    [Senate Hearing 112-453]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 112-453

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

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

                                    HEARINGS

                                    before a

                              SUBCOMMITTEE OF THE

                COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                          ONE HUNDRED TWELFTH CONGRESS

                                 FIRST SESSION

                                       on

                                   H.R. 2055

      MAKING APPROPRIATIONS FOR MILITARY CONSTRUCTION, THE DEPARTMENT OF
       VETERANS AFFAIRS, AND RELATED AGENCIES FOR THE FISCAL YEAR ENDING
                   SEPTEMBER 30, 2012, AND FOR OTHER PURPOSES

                                   __________

                             Department of Defense
                         Department of Veterans Affairs

                                   __________

             Printed for the use of the Committee on Appropriations

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            committee.action?chamber=senate&committee=appropriations

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                                   __________

                          COMMITTEE ON APPROPRIATIONS

                       DANIEL K. INOUYE, Hawaii, Chairman
    PATRICK J. LEAHY, Vermont            THAD COCHRAN, Mississippi
    TOM HARKIN, Iowa                     MITCH McCONNELL, Kentucky
    BARBARA A. MIKULSKI, Maryland        RICHARD C. SHELBY, Alabama
    HERB KOHL, Wisconsin                 KAY BAILEY HUTCHISON, Texas
    PATTY MURRAY, Washington             LAMAR ALEXANDER, Tennessee
    DIANNE FEINSTEIN, California         SUSAN COLLINS, Maine
    RICHARD J. DURBIN, Illinois          LISA MURKOWSKI, Alaska
    TIM JOHNSON, South Dakota            LINDSEY GRAHAM, South Carolina
    MARY L. LANDRIEU, Louisiana          MARK KIRK, Illinois
    JACK REED, Rhode Island              DANIEL COATS, Indiana
    FRANK R. LAUTENBERG, New Jersey      ROY BLUNT, Missouri
    BEN NELSON, Nebraska                 JERRY MORAN, Kansas
    MARK PRYOR, Arkansas                 JOHN HOEVEN, North Dakota
    JON TESTER, Montana                  RON JOHNSON, Wisconsin
    SHERROD BROWN, Ohio

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

    Subcommittee on Military Construction and Veterans Affairs, and Related
                                    Agencies

                      TIM JOHNSON, South Dakota, Chairman
    DANIEL K. INOUYE, Hawaii             MARK KIRK, Illinois
    MARY L. LANDRIEU, Louisiana          KAY BAILEY HUTCHISON, Texas
    PATTY MURRAY, Washington             MITCH McCONNELL, Kentucky
    JACK REED, Rhode Island              LISA MURKOWSKI, Alaska
    BEN NELSON, Nebraska                 ROY BLUNT, Missouri
    MARK PRYOR, Arkansas                 JOHN HOEVEN, North Dakota
    JON TESTER, Montana                  DANIEL COATS, Indiana
                                         THAD COCHRAN, Mississippi
                                           (ex officio)

                               Professional Staff

                                Christina Evans
                                 Chad Schulken
                              Andrew Vanlandingham
                           Dennis Balkham (Minority)
                           D'Ann Lettieri (Minority)

                             Administrative Support

                                  Rachel Meyer
                          Courtney Stevens (Minority)

                                C O N T E N T S

                                  ----------

                            Thursday, March 31, 2011

                                                                       Page

    Department of Veterans Affairs...................................     1

                            Thursday, April 7, 2011

    Department of Defense:
        Office of the Secretary of Defense...........................    65
        Department of the Navy.......................................   101

                            Thursday, April 14, 2011

    Department of Defense:
        Department of the Army.......................................   129
        Department of the Air Force..................................   169

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

                                  ----------

                            THURSDAY, MARCH 31, 2011

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 10:05 a.m. in room SD-124, Dirksen
    Senate Office Building, Hon. Tim Johnson (chairman) presiding.
        Present: Senators Johnson, Inouye, Reed, Nelson, Tester,
    Kirk, Murkowski, Blunt, and Hoeven.

                         DEPARTMENT OF VETERANS AFFAIRS

    STATEMENT OF HON. ERIC K. SHINSEKI, SECRETARY
    ACCOMPANIED BY:
            HON. ROBERT PETZEL, M.D., UNDER SECRETARY FOR HEALTH
            MICHAEL WALCOFF, ACTING UNDER SECRETARY FOR BENEFITS
            STEVE MURO, ACTING UNDER SECRETARY FOR MEMORIAL AFFAIRS
            HON. ROGER BAKER, ASSISTANT SECRETARY FOR INFORMATION
                TECHNOLOGY
            TODD GRAMS, ACTING ASSISTANT SECRETARY FOR MANAGEMENT
                TECHNOLOGY

                    opening statement of senator tim johnson

        Senator Johnson. Good morning. The hearing will come to
    order.
        We meet today to review the President's fiscal year 2012
    budget request and fiscal year 2013 advanced appropriation
    request for the Department of Veterans Affairs (VA).
        Secretary Shinseki, I welcome you and your colleagues, and
    I thank you for appearing before our subcommittee.
        I also welcome Senator Kirk as the new ranking member, and
    I look forward to working with him and with all the new and
    returning members of the subcommittee as we move the fiscal
    year 2012 budget process forward.
        Before getting started with my opening statement, I want to
    recognize the chairman of the full Committee and the most
    senior member of the subcommittee, Senator Inouye, for any
    opening remarks he may have.

                     statement of senator daniel k. inouye

        Senator Inouye. All right. Thank you very much, Mr.
    Chairman.
        I am here to acknowledge and commend the work of the
    Secretary of VA because while bringing about a new culture of
    efficiency, he has been able to set up a system wherein
    hospitals are now working with universities and major
    hospitals. Men and women who we consider to be hopeless cases
    are now hopefully getting up--comatose patients. I have seen
    those men and women who are now benefiting from the work of
    this Department in new prosthetic appliances, and that is a new
    specialty on my part.
        What you have achieved here is almost miraculous, and I
    want to commend you.
        I am also here for a personal reason. I have the pride of
    having nominated General Eric Shinseki when I was in the House
    of Representatives. That is a long time ago. That makes me
    ancient. And here he is now the head of VA and former Chief of
    the Staff of the Army.
        I wish I could stay here, General Shinseki, but as you
    know, we are trying to resolve the budget, if it goes well, we
    will do it. So if you will excuse me, sir, and Mr. Chairman,
    you will excuse me. Thank you very much.
        Senator Johnson. Thank you, Mr. Chairman.
        In order to reserve the majority of the time for questions,
    our procedure will be to have opening statements by the
    chairman and ranking member, followed by an opening statement
    from the Secretary. We will limit the first round of questions
    to 6 minutes per member, but we can have additional rounds
    should we need them.
        The overall fiscal year 2012 budget--discretionary budget
    request for the VA totals $58.8 billion, $1.8 billion more than
    last year's request. Additionally, the submission also includes
    a fiscal year 2013 medical care request of $52.5 billion.
        Mr. Secretary, I would note that outside of the increase
    for medical care in the fiscal year 2012 budget submission,
    that the Department's request for all other functions is down,
    a combined $859 million from last year's request.
        I understand and appreciate that as budgets get tighter,
    Departments are being asked to do more with less. But I want to
    make sure that these cuts will not erode services or diminish
    the quality of care that veterans receive.
        In particular, I am concerned about the 25-percent
    reduction in the request for the construction and facilities
    accounts, and the impact this may have on the adequacy of VA
    medical facilities and healthcare deliveries in future years.
        VA has a $9 billion backlog in repairs and improvements to
    existing buildings, and I am concerned that this budget does
    not adequately address that requirement.
        Before I turn to my ranking member, I want to point out
    that the VA is estimating that the average wait time for
    disability claims will reach 230 days in fiscal year 2012. This
    is totally unacceptable. This subcommittee has provided the VA
    with significant resources over the past several years,
    including an additional $460 million in the current continuing
    resolution for fiscal year 2011, which the Department said was
    needed to reduce the wait time and backlog. Yet the problem is
    getting worse, not better.
        I understand that the decision on Agent Orange claims and
    the complexity of new claims have added to the problem, but the
    VA needs to come up with a comprehensive plan to solve this
    problem sooner rather than later.
        I will have specific questions on these and other topics
    after your testimony. So I will end my opening statement here.
        Senator Kirk, welcome, and do you have an opening statement
    that you would like to make?

                         statement of senator mark kirk

        Senator Kirk. Thank you, Mr. Chairman, and thank you for
    having me to be a new member of this subcommittee. And, Senator
    Reed, it's an honor to be serving with you, especially after
    your nasty habit of jumping out of perfectly good airplanes on
    behalf of the----
        Senator Reed. I was just trying to emulate the Secretary.
        Senator Kirk. That's right.
        Mr. Chairman, I really look forward to working with you,
    Tina, Chairman Culberson, and Tim, and especially Dennis
    Balkam, Ben Hammond, Patrick Magnusson, and you, Mr. Secretary.
        After Operation Iraqi Freedom, you have been very much a
    personal hero of mine, and I particularly have been proud of
    your work on the Stryker, and in a reserve capacity, I was a
    customer of that vehicle. And I want to touch on Stryker later
    during this hearing because I think its philosophy has bearing
    on the Department.
        Now, I have served in the Navy Reserve for 23 years, and on
    top of that, 10 years in the Congress. My major work with the
    VA was regarding the North Chicago Veterans Medical Care
    Center, which was the first ever to truly combine with a
    military hospital, Great Lakes. And that combination has led to
    a number of groundbreaking precedents, to be topped off by it
    being named after the Commander of Apollo 13, Captain James A.
    Lovell.
        We have about 780,000 veterans in Illinois, 5 Senators, 26
    clinics, 12 veteran Senators. And I am looking at your budget
    now, and it is a hefty sum, needed for our veterans, $181
    billion. We are aware that 40 cents of every Federal $1 is
    borrowed. Now, that would mean $72 billion of this money is
    borrowed, one-half of it from abroad. And so, the increased
    scrutiny that that has given us a chance to look at your
    budget. I know that you are at about $5.7 billion more than
    last year.
        Key issues for me are medical records, and the Stryker
    model is the model that I hope we follow here on this
    subcommittee and in the Department--no new invention;
    commercial-off-the-shelf only, with a complete inability for
    beltway bandits and propeller heads to get into your
    decisionmaking cycle and procurement and try to invent
    something new that in the end will be too ambitious, too
    expensive, and will fail during your operational time with us.
    The Stryker model was to bring in a project and complete it
    within your secretary-ship, and my hope is that we are able to
    do that with medical records of inventing as little as
    possible.
        On the care provided to veterans, I first was concerned
    about incidents in my own State of Marion, Illinois. We also
    understand that we have had 2,500 veterans exposed to HIV in
    Miami. In Philadelphia, the cancer unit at the VA botched 92 of
    116 radioactive treatments over 6 years and then tried to cover
    it up. The VA suspended similar programs in Cincinnati, Ohio,
    and Jackson, Mississippi. And in St. Louis, very much a part of
    our State's veteran's picture as well, we had to improperly
    sterilize tools, exposing 1,800 veterans to HIV.
        I think that much of this has come to light because of you
    and your added scrutiny and focus on medical standards. And I
    hope that we will hear about how we are upgrading that,
    especially at those facilities.
        I share the chairman's concern about claims. Justice
    delayed is justice denied. My understanding is this
    subcommittee has provided $277 million extra since 2007 for
    additional claims processing, but as the chairman highlighted,
    adjudication times have climbed from 165 days to 230 days just
    in the last 2 years.
        I am particularly concerned about the idea of a contingency
    fund. I talked about this with Chairman Culberson. I do not
    have a big problem with your top line, and so I think we should
    just roll it into your regular budget. Estimate what you need,
    then the subcommittee should provide it. But I think the House
    of Representatives is not going to be approving any contingency
    funds. I just talked to the full Committee chairman; he
    understood that, and I think he is amenable to going in the
    same direction, at least as of this morning. And so, my hope is
    that we do not set the precedent here. I think it would be a
    very failed precedent in the House anyway. My hope is just to
    team up on a good top line which reflects your actual needs.
        With that, Mr. Chairman, let me just say my only hope for
    you, General Shinseki, was that you had gone Navy instead of
    Army, but it has been a very impressive career.
        And Mr. Chairman, I yield back.
        Senator Johnson. Thank you, Senator Kirk.
        Mr. Secretary, again, I welcome you to the subcommittee. I
    understand that yours will be the only opening statement. Your
    full statement will be included in the record, so please feel
    free to summarize your remarks.
        Mr. Secretary.

                   summary statement of hon. eric k. shinseki

        Secretary Shinseki. Thank you, Mr. Chairman.
        Chairman Johnson, Ranking Member Kirk, distinguished
    members of the subcommittee, thank you for this opportunity to
    present the President's fiscal year 2012 budget and fiscal year
    2013 advanced appropriations request as two documents for this
    Department.
        I thank the members of the subcommittee for the generosity
    of time and meeting with me prior to this hearing.
        Let me also acknowledge the presence of some of our veteran
    service organizations. Their insights are helpful as we
    structure our programs to best meet the needs of veterans. And
    so, their insights are useful.
        Mr. Chairman, thank you for allowing the introduction of my
    written statement.
        Let me just very quickly say that the President's fiscal
    year 2012 budget request would provide $132.2 billion to VA to
    meet its responsibilities; $61.9 billion of that is in
    discretionary funding, which is our primary discussion today,
    and the remainder of that, $70.3 billion, in the mandatory
    account.
        Our discretionary budget request represents an increase of
    $5.9 billion or a 10.6-percent increase over the last enacted
    budget, which was fiscal year 2010.
        The budget request for fiscal year 2012 and advanced
    appropriations request for fiscal year 2013 continue the
    strategic cultural change that has been underway in VA now for
    at least 2 years. They also enable our pursuit of three urgent
    priorities that have also guided our efforts for the past 2
    years, namely expanding access to VA benefits and services to
    the topic that both the chairman and ranking member addressed,
    reducing and ultimately eliminating the claims backlog, and
    then third, ending veterans homelessness by 2015.
        I would like to touch on each of those very quickly.

                                     access

        In 2008, 7.8 million veterans were enrolled in VA for
    healthcare. Today, that number is 8.4 million, and it is
    estimated to go to 8.6 million veterans in 2012, the year of
    the budget we are looking at is an increase of 800,000
    enrollments in 4 years.
        Veterans continue to be among the oldest and sickest
    patients in any medical system, and the youngest of them are
    challenged by increasingly complex injuries and the insidious
    wounds that we all know about from these current conflicts.
    Most of them are challenged economically, and so this budget
    request allows VA to address this surge in demand at this time
    given the circumstances facing our veterans.

                                  the backlog

        VA's highest priority is to eliminate the disability claims
    backlog in 2015, ensuring all veterans receive a quality
    decision with an accuracy of 98 percent in no more than 125
    days. We have a ways to go to meet that goal.
        Major information technology (IT) investments have been
    made to supplant the Veterans Benefits Administration's (VBA's)
    paper-bound processes with Veterans Benefits Management System
    (VBMS), being piloted today in Providence, Rhode Island,
    something that has been underway since November of last year,
    and Veterans Relationship Management (VRM), another initiative
    in the process of being fielded. We anticipate significant
    progress in 2012.
        The fiscal year 2011 and fiscal year 2012 budget requests
    are intended to posture us to begin reducing that backlog in
    disability claims.

                                  homelessness

        Two years ago, there were approximately 131,000 homeless
    veterans on any given night. Today, that estimate is down to
    76,000 veterans. We intend that number to be less than 60,000
    by June 2012. We have made progress, and this budget request
    allows us to put in place the detailed plans to both rescue and
    prevent homelessness amongst veterans. Healthcare for homeless
    veterans costs three-and-one-half times more than what it costs
    to care for veterans who are not homeless. There is a cost
    factor associated here. This budget request enables pursuit of
    our goal to eliminate veterans' homelessness by 2015.
        For more than 2 years now, we have established and
    reinforced the importance of the right behaviors, disciplines,
    processes, and the leadership it takes to become more
    effective, accountable, and efficient as a Department. Our
    budget is large and complex with the country's largest
    integrated healthcare system, the largest national cemetery
    system in the country, repeatedly recognized as the country's
    top performer in customer satisfaction over the past 10 years,
    the country's second-largest educational assistant program, the
    only zero-down payment guaranteed home loan program in the
    Nation with the lowest foreclosure rates in all categories of
    mortgage loans, and, finally, the seventh-largest life
    insurance enterprise in the country with a 96-percent customer
    satisfaction rating.
        In the past, these services were either not available or
    affordable for the men and women who wore our country's
    uniforms, and, hence, the VA's mission to care for those who
    have borne the battle and for their spouses and orphans. This
    budget request is VA's plan for meeting our obligation to all
    veterans of all generations.
        I will continue to do everything possible to ensure that we
    wisely use the funds that the Congress appropriates for us to
    improve the quality of life for our veterans innovatively and
    transparently so that you can see the decisions we make and how
    those funds are being invested.

                               prepared statement

        Again, thank you for this opportunity to appear before the
    subcommittee and for your unwavering support. I look forward to
    your questions.
        [The statement follows:]
                  Prepared Statement of Hon. Eric K. Shinseki
        Chairman Johnson, Ranking Member Kirk, distinguished members of the
    Senate Appropriations Committee, Subcommittee on Military Construction,
    Veterans Affairs and Related Agencies.
        Thank you for the opportunity to present the President's fiscal
    year 2012 budget and fiscal year 2013 advance appropriations requests
    for the Department of Veterans Affairs (VA). Budget requests for this
    Department deliver the promises of Presidents and fulfill the
    obligations of the American people to those who have safeguarded us in
    times of war and peace.
        Today, the Nation's military remains deployed overseas as it has
    during the last 9 years of major conflict. Our requirements have grown
    over the past 2 years as we addressed longstanding issues from past
    wars and watched the requirements for those fighting the current
    conflicts grow significantly. These needs will continue long after the
    last American combatant departs Iraq and Afghanistan. It is our intent
    to continue to uphold our obligations to our veterans when these
    conflicts have subsided, something that we have not always done in the
    past. Not upholding these obligations in the past has left at least one
    generation of veterans struggling in anonymity for decades. We, who
    sent them, owe them better.
        VA has an obligation to track, communicate to stakeholders, and
    take decisive action to consistently meet the requirements of our
    Nation's veterans for care and services. We pay great attention to
    detail but there are many factors in the healthcare market that we
    cannot control. We must mitigate the risk inherent when requirements
    for veterans' care and services, and costs in the healthcare market,
    exceed our estimates. This request is the Department's plan for
    managing that risk and meeting our obligations to all veterans
    effectively, accountably, and efficiently.
        The President's budget for fiscal year 2012 requests $132 billion--
    $62 billion in discretionary funds and $70 billion in mandatory
    funding. Our discretionary budget request represents an increase of
    $5.9 billion, or 10.6 percent, more than the fiscal year 2010 enacted
    level.
        Our plans for fiscal years 2012 and 2013 pursue strategic goals we
    established 2 years ago to transform VA into an innovative, 21st
    century organization that is people-centric, results-driven, and
    forward-looking. These strategic goals seek to reverse in-effective
    decisionmaking, systematic inefficiency, and poor business practices in
    order to improve quality and accessibility to VA healthcare, benefits,
    and services; increase veteran satisfaction; raise readiness to serve
    and protect in a time of crisis; and improve VA internal management
    systems to successfully perform our mission. We seek to serve as a
    model of governance, and this budget is shaped to provide VA both the
    tools and the management structure to achieve that distinction.
        For almost 146 years now, VA and its predecessor institutions have
    had the singular mission of caring for those who have ``borne the
    battle'' and their survivors. This is our only mission, and to do that
    well, we operate the largest integrated healthcare system in the
    country; the eighth-largest life insurance entity covering both Active-
    Duty members as well as enrolled veterans; a sizable education
    assistance program; a home mortgage enterprise which guarantees more
    than 1.4 million veterans' home loans with the lowest foreclosure rate
    in the Nation; and the largest national cemetery system, which
    continues to lead the country as a high-performing institution.
        For 2 years now, we have disciplined ourselves to understand that
    successful execution of any strategic plan, especially one for a
    Department as large as ours, requires good stewardship of resources
    entrusted to us by the Congress. Every $1 counts, both in the current
    constrained fiscal environment and during less stressful times.
    Accountability and efficiency are behaviors consistent with our
    philosophy of leadership and management. The responsibility of caring
    for America's veterans on behalf of the American people demands
    unwavering commitment to effectiveness, accountability, and in the
    process, efficiency. In the past 2 years, we have established and
    created management systems, disciplines, processes, and initiatives
    that help us eliminate waste.
                            stewardship of resources
        VA has made great progress instilling accountability and
    disciplined processes by establishing our Project Management
    Accountability System (PMAS). This approach has created an information
    technology (IT) organization that can rapidly deliver technology to
    transform VA. PMAS is a disciplined approach to IT project development
    whereby we hold ourselves and our private-sector partners accountable
    for cost, schedule, and performance. In just 1 year, PMAS exceeded an
    80-percent success rate of meeting customers' milestones.
        In addition to PMAS, we adopted a new acquisition strategy to make
    more effective use of our IT resources. This new strategy,
    Transformation Twenty-One Total Technology (T4), will consolidate our
    IT requirements into 15 prime contracts, leveraging economies of scale
    to save both time and money and enable greater oversight and
    accountability. T4 also includes significant goals for subcontractors
    and other protections to make sure veteran-owned small businesses get a
    substantial share of the work. Seven of the 15 prime contracts are
    reserved for veteran-owned small businesses, and four of the seven are
    reserved for service-disabled small businesses.
        In developing the fiscal year 2012 budget, VA used an innovative,
    Department-wide process to define and assess VA's capital portfolio.
    This process for strategic capital investment planning (SCIP) is a
    transformative tool enabling VA to deliver the highest quality of
    services by investing in the future and improving efficiency of
    operations. SCIP has captured the full extent of VA infrastructure and
    service gaps and developed both capital and noncapital solutions to
    address these gaps through 2021. SCIP also produced VA's first-ever
    Department-wide integrated and prioritized list of capital projects,
    which is being used to ensure that the most critical infrastructure
    needs are met, particularly in correcting safety, security, and seismic
    deficiencies, and creating consistent standards across the system.
        The use of metrics to monitor and assess performance is another key
    strategy we employ to ensure the effective use of resources and
    accountability. For example, in November 2010, VA launched two online
    dashboards to offer transparency of the clinical performance of our
    healthcare system to the general public. First, VA's Linking
    Information Knowledge and Systems (LinKS) provides outcome measurement
    data in areas such as acute, intensive, and outpatient care. This
    allows management to assess a specific medical facility's performance
    against other facilities while, at the same time, serving as a
    motivational tool to improve performance. The dashboard, Aspire,
    compiles data from VA's individual hospitals and hospital systems to
    measure performance against national private-sector benchmarks.
    Financial and performance metrics also provide the foundation for
    monthly performance reviews that are chaired by the Deputy Secretary.
    These monthly meetings play a vital role in monitoring performance
    throughout the Department, and are designed to ensure both operational
    efficiency and the achievement of key performance targets.
        We also demonstrated our ongoing commitment to effective
    stewardship of our financial resources by obtaining our 12th
    consecutive unqualified (clean) audit opinion on VA's consolidated
    financial statements. In 2010, we were successful in remediating three
    of four longstanding material weaknesses, a 75-percent reduction in
    just 1 year. We also began implementation of a number of key management
    initiatives that will allow us to better serve veterans by getting the
    most out of our available resources:
      --Reducing improper payments and improving operational efficiencies
            in our medical fee care program will result in estimated
            savings of $150 million in 2011. This includes continued
            expansion of the Consolidated Patient Account Centers to
            standardize VA's billing and collection activities.
      --Implementing Medicare's standard payment rates will allow VA to
            better plan and redirect more funding into the provision of
            healthcare services. The estimated savings of this change in
            business practices in 2011 is $275 million.
      --Consolidating contracting requirements, adopting strategic sourcing
            and other initiatives will reduce acquisition costs by an
            estimated $177 million in 2011.
        The effective use of IT is critical to achieving efficient
    healthcare and benefits delivery systems for veterans. To accelerate
    the process for adjudicating disability claims for new service-
    connected presumptive conditions associated with exposure to Agent
    Orange, we implemented a new online claims application and processing
    system.
        A recent independent study, which covered a 10-year period between
    1997 and 2007, found that VA's health IT investment during the period
    was $4 billion, while savings were more than $7 billion.\1\ More than
    86 percent of the savings were due to the elimination of duplicated
    tests and reduced medical errors. The rest of the savings came from
    lower operating expenses and reduced workload. VA is continuing to
    modernize its electronic medical records to optimally support
    healthcare delivery and management in a variety of settings. This
    effort includes migrating the current computerized patient record
    system (CPRS) into a modern, Web-based electronic health record (EHR).
    ---------------------------------------------------------------------------
        \1\ ``The Value From Investments in Health Information Technology
    at the U.S. Department of Veterans Affairs'', Colene M. Byrne, Lauren
    M. Mercincavage, Eric C. Pan, Adam G. Vincent, Douglas S. Johnston, and
    Blackford Middleton, Health Aff, April 2010 29:4629-638.
    ---------------------------------------------------------------------------
        Advance appropriations for VA medical care require a multi-year
    approach to budget planning whereby 1 year builds off the previous
    year. This provides opportunities to more effectively use resources in
    a constrained fiscal environment as well as to update requirements.
                    multi-year plan for medical care budget
        The fiscal year 2012 budget request for VA medical care of $50.9
    billion is a net increase of $240 million more than the fiscal year
    2012 advance appropriations request of $50.6 billion in the fiscal year
    2011 budget. This is the result of an increase of $953 million
    associated with potential increased reliance on the VA healthcare
    system due to economic employment conditions, partially offset by a
    rescission of $713 million which reflects the cumulative impact of the
    statutory freeze on pay raises for Federal employees in fiscal years
    2011 and 2012. The fiscal year 2013 request of advance appropriations
    is $52.5 billion, an increase of $1.7 billion more than the fiscal year
    2012 budget request.
        The establishment of a contingency fund of $953 million for medical
    care is requested in fiscal year 2012. These contingency funds would
    become available for obligation if the administration determines that
    additional costs, due to changes in economic conditions as estimated by
    VA's Enrollee Health Care Projection Model, materialize in 2012. This
    economic impact variable was incorporated into the model for the first
    time this year. Based on experience from 2010, the need for this fund
    will be carefully monitored in 2011 and 2012. This cautious approach
    recognizes the potential impact of economic conditions as estimated by
    the model to ensure funds are available to care for veterans, while
    acknowledging the uncertainty associated with the new methodology
    incorporated into the model estimates.
        Another key building block in developing fiscal years 2012 and 2013
    budget requests for medical care is the use of unobligated balances, or
    carryover, from fiscal year 2011 to meet projected patient demand. This
    carryover of more than $1 billion, which includes savings from
    operational improvements, supports anticipated costs for providing
    medical care to veterans in fiscal years 2012 and 2013 and is factored
    into VA's request for appropriations. This is a vital component of our
    multi-year budget and any reductions in the amount of fiscal year 2011
    projected carryover funding would require increased appropriations in
    fiscal years 2012 and 2013.
                transforming the department of veterans affairs
        The Department faces an increasingly challenging operating
    environment as a result of the changing population of veterans and
    their families and the new and more complex needs and expectations for
    their care and services. Transforming VA into a 21st-century
    organization involves a commitment to many broad challenges:
      --to stay on the cutting edge of healthcare delivery;
      --to lay the foundation for safe, secure, and authentic health record
            interoperability;
      --to deliver excellent service for veterans who apply for disability
            and education benefits; and
      --to create a modern, efficient, and customer-friendly interface that
            better-serves veterans.
        In this journey, we are focusing on opportunities to improve our
    efficiency and effectiveness and the individual performance of our
    employees.
        Our health informatics initiative is a foundational component for
    VA's transition from a medical model to a patient-centered model of
    care. The delivery of healthcare will be better tailored to the
    individual veteran, yet utilize treatment regimens validated through
    population studies. Veterans will receive fewer unnecessary tests and
    procedures and more standardized care based on best practices and
    empirical data.
        The purpose of the VA Innovation Initiative (VAi2) is to identify,
    fund, and test new ideas from VA employees, academia, and the private
    sector. The focus is on improving access, quality, performance, and
    cost. VA remains committed to the best system of delivering quality
    care and benefits to veterans. VAi2 plays an important role by enabling
    the use of promising technologies in the design of cost-effective
    solutions. For example, the TBI Toolbox pilot, located at McGuire VA
    Medical Center in Richmond, Virginia, will test a software tool to
    standardize data gathered from brain injury treatments. The strategy
    will allow sharing of rapidly evolving treatment guidelines at VA
    polytrauma centers and Department of Defense (DOD) medical facilities,
    as well as patient progress and outcomes.
        The fiscal year 2012 budget continues our focus on three key
    transformational priorities I established when I became Secretary:
      --expanding access to benefits and services;
      --reducing the claims backlog; and
      --eliminating veteran homelessness by 2015.
    These priorities address the most visible and urgent issues in VA.
                   expanding access to benefits and services
        Expanding access to healthcare and benefits for underserved
    veterans is vital to VA's success in best-serving veterans of all eras.
        The Veterans Relationship Management (VRM) initiative will provide
    veterans, their families, and survivors with direct, easy, and secure
    access to the full range of VA programs through an efficient and
    responsive multi-channel program, including phone and Web services. VRM
    will provide VA employees with up-to-date tools to better serve VA
    clients, and empower clients through enhanced self-service
    capabilities. Expanding the self-service capabilities of the eBenefits
    online portal is one of the early successes of the VRM program in 2010,
    and expansion of eBenefits functionality continues through quarterly
    releases and programs to engage new users.
        VA also saw significant progress in expanding access to veterans.
    In July 2010, the Center for Women veterans sponsored a forum to
    highlight enhancements in VA services and benefits for women veterans
    which resulted in an information toolkit for advocates such as veteran
    service organizations to share with their constituencies.
        Outreach was extended directly to women when, for the first time in
    25 years, VA surveyed women veterans across the country to:
      --identify in a national sample the current status, demographics,
            healthcare needs, and VA experiences of women veterans;
      --determine how healthcare needs and barriers to VA healthcare differ
            among women veterans of different generations; and
      --assess women veterans' healthcare preferences in order to address
            VA barriers and healthcare needs.
        The interim report, released in summer 2010, informs policy and
    planning and provides a new baseline for program evaluation with regard
    to veterans' perceptions of VA health services. The final report will
    be released in spring 2011.
        The Enhancing the Veteran Experience and Access to Healthcare
    Initiative will expand healthcare for veterans, including women and
    rural populations. Care alternatives will be created to meet these
    special population access needs, including the use of new technology.
    Where technology solutions safely permit, VA has already transitioned
    from inpatient to outpatient settings through the use of tele-medicine,
    in-home care, and other delivery innovations.
        One area of success is our expansion of telehome health-based
    clinical services in rural areas, which increases access, and reduces
    avoidable travel for patients and clinicians. In 2010, the total
    average daily census in telehome health was 31,155. This program will
    continue to expand to an estimated average daily census of 50,147 in
    2012, an increase of 60 percent more than 2010.
        Through the Improve Veteran Mental Health Initiative more veterans
    will have access to the appropriate mental health services for which
    they are eligible, regardless of their geographic location. VA is
    leveraging the virtual environment with services such as the Veterans'
    Suicide Prevention Chat Line and real-time clinical video conferences.
                          reducing the claims backlog
        One of VA's highest priority goals is to eliminate the disability
    claims backlog by 2015 and ensure all veterans receive a quality
    decision (98-percent accuracy rate) in no more than 125 days. The
    Veterans Benefits Administration (VBA) is attacking the claims backlog
    through a focused and multi-pronged approach. At its core, our
    transformational approach relies on three pillars:
      --a culture change inside VA to one that is centered on advocacy for
            veterans;
      --collaborating with stakeholders to constantly improve our claims
            process using best practices and ideas; and
      --deploying powerful 21st century IT solutions to simplify and
            improve claims processing for timely and accurate decisions the
            first time.
        The Veterans Benefits Management System (VBMS) initiative is the
    cornerstone of VA's claims transformation strategy. It integrates a
    business transformation strategy to address process and people with a
    paperless claims processing system. Combining a paperless claims
    processing system with improved business processes is the key to
    eliminating the backlog and providing veterans with timely and quality
    decisions. The Virtual Regional Office, completed in May 2010, engaged
    employees and subject-matter experts to determine system specifications
    and business requirements for VBMS. The first VBMS pilot began in
    Providence in November 2010. Nationwide deployment of VBMS is expected
    to begin in 2012.
        VA is encouraging veterans to file their Agent Orange-related
    claims through a new online claims application and processing system.
    Vietnam veterans are the first users of this convenient automated
    claims processing system, which guides them through Web-based menus to
    capture information and medical evidence for faster claims decisions.
    While the new system is currently limited to claims related to the new
    Agent Orange presumptive conditions of Parkinson's disease, ischemic
    heart disease, and hairy cell leukemia, we will expand it to include
    claims for other conditions.
        VA also published the first set of streamlined forms capturing
    medical information essential to prompt evaluation of disability
    compensation and pension claims, and dozens more of these forms are in
    development for various disabilities. The content of these disability
    benefit questionnaires is being built into VA's own medical information
    system to guide in-house examinations. Veterans can provide them to
    private doctors as an evidence guide that will speed their claims
    decisions.
        Another initiative to reduce the time needed to obtain private
    medical records utilizes a private contractor to retrieve the records
    from the provider, scan them into a digital format, and send them to VA
    through a secure transmission. This contract frees VA staff to focus on
    processing claims more quickly.
        Additional claims transformation efforts deployed nationwide in
    2010 include the Fully Developed Claims Initiative to promptly rate
    claims submitted with all required evidence and an initiative to
    proactively reach out to veterans via telephone to quickly resolve
    claims issues.
        VA needs these innovative systems and initiatives to expedite
    claims processing as the number of claims continue to climb. The
    disability claims workload from returning war veterans, as well as from
    veterans of earlier periods, is increasing each year. Annual claims
    receipts increased 51 percent when comparing receipts from 2005-2010
    (788,298-1,192,346). We anticipate claims receipts of nearly 1.5
    million in 2011 (including new Agent Orange presumptive) and more than
    1.3 million claims in 2012. The funding request in the President's
    budget for VBA is essential to meet the increasing workload and put VA
    on a path to achieve our ultimate goal of no claims over 125 days by
    2015.
                        eliminating veteran homelessness
        VA has an exceptionally strong track record in decreasing the
    number of homeless veterans. Six years ago, there were approximately
    195,000 homeless veterans on any given night; today, there are about
    75,600. VA uses a multifaceted approach by providing safe housing;
    outreach; educational opportunities; mental healthcare and treatment;
    support services; homeless prevention services; and opportunities to
    return to employment. The National Call Center for Homeless has
    received 13,000 calls since March 2010, and 18,000 veterans and
    families of veterans have been provided permanent housing through VA
    and Department of Housing and Urban Development (HUD) programs. These
    veterans were also provided with dedicated case managers and access to
    high-quality VA healthcare.
        The Building Utilization Review and Repurpose (BURR) study is using
    VA's inventory of vacant/underutilized buildings to house homeless and
    at-risk veterans and their families, where practical. The Congress
    allocated $50 million to renovate unused VA buildings and VA has
    identified 94 sites with the potential to add approximately 6,300 units
    of housing through public/private ventures using VA's enhanced-use
    lease authority. This legislative authority is scheduled to lapse at
    the end of calendar year 2011. The administration remains committed to
    this important program, and a proposal to address the expiration will
    accompany the Department's legislative package submitted through the
    President's Program. In addition to helping reduce homelessness, vacant
    building reuse is being considered for housing for Operation Enduring
    Freedom/Operation Iraqi Freedom/Operation New Dawn ()veterans,
    polytrauma patients, assisted living, and seniors.
        Homelessness is both a housing and healthcare issue, heavily
    burdened by depression and substance abuse. Our fiscal year 2012 budget
    plan also supports a comprehensive approach to eliminating veteran
    homelessness by making key investments in mental health programs.
        The fiscal year 2012 budget includes $939 million for specific
    programs to prevent and reduce homelessness among veterans. This is an
    increase of 17.5 percent, or $140 million more than the fiscal year
    2011 level of $799 million. This increase includes an additional $50.4
    million to enhance case management for permanent housing solutions
    offered through the HUD-VA Supported Housing program. These funds are
    required to maintain the services that keep veterans rescued from
    homelessness sheltered; get the remaining men and women off the streets
    whom we have not reached in the past; and, prevent additional veterans
    from becoming homeless during a time of war and difficult economic
    conditions.
                                 mental health
        The mental health of veterans is a more important issue now than
    ever before, as increasing numbers of veterans are diagnosed with
    mental health conditions, often coexisting with other medical problems.
    More than 1.2 million of the 5.2 million veterans seen in 2009 in VA
    had a mental health diagnosis. This represents about a 40-percent
    increase since 2004.
        Veterans of Iraq and Afghanistan rely on mental healthcare from VA
    to a greater degree than earlier groups of veterans. Diagnosis of post-
    traumatic stress disorder (PTSD) is on the rise as the contemporary
    nature of warfare increases both the chance for injuries that affect
    mental health and the difficulties facing veterans upon their return
    home. In addition, mental health issues are often contributing factors
    to veterans' homelessness.
        In order to address this challenge, VA has significantly invested
    in our mental healthcare workforce, hiring more than 6,000 new mental
    healthcare workers since 2005. In 2010, VA hired more than 1,500
    clinicians to conduct screenings and provide treatment as well as
    trained more than 1,000 clinicians in evidenced-based practices. The
    Department has also established high standards for the provision of
    mental healthcare services through the recent publication of our
    Handbook on Uniform Mental Health Services in VA medical centers and
    clinics, and we have developed an integrated mental health plan with
    DOD to ensure better continuity of care--especially for veterans of
    Iraq and Afghanistan. The fiscal year 2012 budget includes $6.2 billion
    for mental healthcare programs, an increase of $450 million, or 8
    percent more than the fiscal year 2011 level of $5.7 billion.
                              medical care program
        We expect to provide medical care to more than 6.2 million unique
    patients in fiscal year 2012, a 1.4-percent increase more than fiscal
    year 2011. Among this community are nearly 536,000 veterans of Iraq and
    Afghanistan, an increase of more than 59,000 or 12.6 percent more than
    fiscal year 2011.
        The fiscal year 2012 budget will support several new initiatives in
    addition to our efforts to eliminate veteran homelessness. For example,
    $344 million is provided for the activation of newly constructed
    medical facilities. In addition, we provide $208 million to implement
    provisions of the Caregivers and Veterans Omnibus Health Services Act
    and improve the quality of life for veterans and their families.
        The fiscal year 2012 budget also includes operational improvements
    that will make VA more effective and efficient in this challenging
    fiscal and economic environment. VA is proposing $1.2 billion of
    operational improvements which include aligning fees that VA pays with
    Medicare rates, reducing and improving the administration of our fee-
    based care program, clinical staff realignments, reducing indirect
    medical and administrative support costs, and achieving significant
    acquisition improvements to increase our purchasing power.
        Beginning in 2010, VHA embarked on a multi-year journey to enhance
    significantly the experience of veterans and their families in their
    interactions with VA while continuing to focus on quality and safety.
    This journey required the VHA to develop new models of healthcare that
    educated and empowered patients and their families, focused not only on
    the technical aspects of healthcare but also designed for a more
    holistic, veteran-centered system, with improved access and
    coordination of care. New Models of Healthcare is a portfolio of
    initiatives created to achieve these objectives. We are re-designing
    our systems around the needs of our patients and improving care
    coordination and virtual access through enhanced secure messaging,
    social networking, telehealth, and telephone access.
        An essential component of this approach is transforming our primary
    care programs to increase our focus on health promotion, disease
    prevention, and chronic disease management through multidisciplinary
    teams. The new model of care will improve health outcomes and the care
    experience for our veterans and their families. The model will
    standardize healthcare policies, practices, and infrastructure to
    consistently prioritize veterans' healthcare over any other factor
    without increasing cost or adversely affecting the quality of care.
    This important initiative will enable VA to become a national leader in
    transforming primary care services to a medical home model of
    healthcare delivery that improves patient satisfaction, clinical
    quality, safety, and efficiencies. VA Tele-Health and the Home Care
    Model will develop a new generation of communication tools (i.e.,
    social networking, micro-blogging, text messaging, and self-management
    groups) that VA will use to disseminate and collect critical
    information related to health benefits and other VA services.
        VA is taking this historic step in redefining medical care for
    veterans with the adoption of a modern healthcare approach called
    Patient Aligned Care Team (PACT). PACT is VA's adaptation of the
    popular contemporary team-based model of healthcare known as Patient
    Centered Medical Home designed to provide continuous and coordinated
    care throughout a patient's lifetime.
                                medical research
        VA's many trailblazing research accomplishments are a source of
    great pride to our department and the Nation. Today's committed VA
    researchers are focusing on traumatic brain injury, PTSD, post-
    deployment health, women's health, and a host of other issues key to
    the well-being of our veterans. As one of the world's largest
    integrated healthcare systems, VA is uniquely positioned to not only
    conduct and fund research, but to develop solutions and implement them
    more quickly than other healthcare systems--turning hope into reality
    for veterans and all Americans.
        VA's budget request for fiscal year 2012 includes $509 million for
    research, a decrease of $72 million less than the 2010 level. In
    addition, VA's research program will receive approximately $1.2 billion
    from medical care funding and Federal and non-Federal grants. These
    research funds will continue support for genomic medicine, point-of-
    care research, and medical informatics and IT. Genomic medicine, also
    referred to as personalized medicine, uses information on a patient's
    genetic make-up to tailor prevention and treatment for that individual.
    The Million Veteran Program invites users of the VA healthcare system
    nationwide to participate in a longitudinal study with the aim of
    better understanding the relationship between genetic characteristics,
    behaviors, and environmental factors and veteran health.
        To leverage data in the EHR, VA Informatics and Computing
    Infrastructure (VINCI) is creating a powerful and secure environment
    within the Austin Information Technology Center. This environment will
    allow VA researchers to access more easily a wide array of VHA
    databases using custom and off-the-shelf analytical tools. The
    Consortium for Healthcare Informatics Research (CHIR) will provide
    research access to patient information in VA's CPRS narrative text and
    laboratory reports. Together, VINCI and CHIR will allow data mining to
    accelerate findings and identify emerging trends. Ultimately, this
    critical work will lead to greater effectiveness of our medical
    system--improving value by assisting in the prevention and cure of
    disease.
                                veteran benefits
        The fiscal year 2012 budget request for VBA is $2 billion, an
    increase of $330 million, or 19.5 percent, more than the fiscal year
    2010 enacted level of $1.7 billion. This budget supports ongoing and
    new initiatives to reduce disability claims processing time, including
    development and implementation of further redesigned business
    processes. It funds an increase in full-time equivalents (FTE) of 716
    more than fiscal year 2010 to 20,321 to assist in reducing the benefits
    claims backlog. It also supports the administration of expanded
    education benefits eligibility under the Post-9/11 GI Bill, which now
    includes benefits for noncollege degree programs, such as on-the-job
    training, flight training, and correspondence courses. In addition, the
    fiscal year 2012 budget request supports the following initiatives:
        Integrated Disability Evaluation System Program.--The Integrated
            Disability Evaluation System (IDES) simplifies the process for
            disabled servicemembers transitioning to veteran status,
            improves the consistency of disability ratings, and improves
            customer satisfaction. An IDES claim is completed in an average
            of 309 days; 43 percent faster than in the legacy system. VA
            and DOD worked together to increase the number of sites for the
            IDES program from 21-27 in 2010. The six new sites are Fort
            Riley, Fort Benning, Fort Lewis, Fort Hood, Fort Bragg, and
            Portsmouth Naval Hospital, and VA and DOD will continue to
            expand the IDES program.
          IDES is being expanded to provide Vocational Rehabilitation and
            Employment (VR&E) services to Active-Duty servicemembers
            transitioning through the IDES. These services range from a
            comprehensive rehabilitation evaluation to determine abilities,
            skills, and interests for employment purposes as well as
            support services to identify and maintain employment. The
            budget request includes $16.2 million for 110 FTE for the VR&E
            program to support IDES.
        Veterans Benefits Management System.--In 2011, we will conduct two
            of three planned pilot programs to test the Veterans Benefits
            Management System (VBMS), the new paperless claims processing
            system. Each pilot will expand on the success of the first
            pilot by adding additional software components. In the fiscal
            year 2012 budget request for IT, we will invest $148 million to
            complete pilot testing and initiate a national rollout.
        VetSuccess on Campus.--In July 2009, VA established a pilot program
            at the University of South Florida called VetSuccess on Campus
            to improve graduation rates by providing outreach and
            supportive services to veterans entering colleges and
            universities and ensuring that their health, education, and
            benefit needs are met. The program has since expanded to
            include an additional seven campuses, serving approximately
            8,000 veterans. The campus vocational rehabilitation counselor
            and the vet center outreach coordinator liaise with school
            certifying officials, perform outreach, and communicate with
            veteran-students to ensure their health, education, and benefit
            needs are met. This will enable veterans to stay in college to
            complete their degrees and enter career employment. In
            addition, it provides veterans the skills necessary to gain
            employment after graduation, which can help prevent veteran
            homelessness. The fiscal year 2012 budget includes $1.1 million
            to expand the program to serve an additional 9,000 veteran
            students on nine campuses, more than doubling the size of the
            current program.
                        national cemetery administration
        The budget plan includes $250.9 million in operations and
    maintenance funding for the National Cemetery Administration (NCA). The
    funding will allow us to provide more than 89.8 percent of the veteran
    population a burial option within 75 miles of their residences by
    keeping existing national cemeteries open and establishing new State
    veterans cemeteries, as well as increasing outreach efforts.
        VA expects to perform 115,500 interments in fiscal year 2012, a 1-
    percent increase more than fiscal year 2011. In fiscal year 2012, NCA
    will provide maintenance of 8,759 developed acres, 3 percent more than
    the fiscal year 2011 estimate, while 3,228,000, or 2.6 percent more,
    gravesites will be given perpetual care.
        The budget request will allow NCA to maintain unprecedented levels
    of customer satisfaction. NCA achieved the top rating in the Nation
    four consecutive times on the prestigious American Customer
    Satisfaction Index (ACSI) established by the University of Michigan.
    ACSI is the only national, cross-industry measure of satisfaction in
    the United States. On the most recent 2010 survey and over the past
    decade, NCA's scores bested more than 100 Federal agencies and the
    Nation's top corporations including Ford, FedEx, and Coca Cola, to name
    a few. Our own internal surveys confirm this exceptional level of
    performance. For 2010, 98 percent of the survey respondents rated the
    appearance of national cemeteries as excellent; 95 percent rated the
    quality of service as excellent.
        NCA has implemented innovative approaches to cemetery operations:
      --the use of pre-placed crypts that preserve land and reduce
            operating costs;
      --application of ``water-wise'' landscaping that conserves water and
            other resources; and
      --installation of alternative energy products such as windmills and
            solar panels that supply power for facilities.
        NCA has also utilized bio-based fuels that are homegrown and less
    damaging to the environment. NCA is developing an independent study of
    emerging burial practices throughout the world to inform its planning
    for the future.
        Support for the Veterans Cemetery Grants Program continues in 2012
    with $46 million to fund the highest priority veterans cemetery grant
    requests ready for award. In addition to State cemetery grants, NCA is
    engaged in discussions with tribal governments regarding the
    construction of veterans' cemeteries on their land and is awarding six
    such grants in 2011. The inclusion of tribal governments as grant
    recipients recognizes and empowers the authority of these groups to
    represent a unique group of veterans and respond to their needs.
                             capital infrastructure
        Congressional support of VA has resulted in 63 major construction
    projects funded in whole or, in part, since 2004. When combined with
    investments in our minor construction and major lease programs, this
    has contributed to a plant inventory which includes 5,541 owned
    facilities, 1,629 leased facilities, 155 million square feet of
    occupied space (owned and leased), and 33,718 acres of owned real
    property.
        To best utilize resources, VA has reduced its inventory of owned
    vacant space by 34 percent, from 8.6 million square feet in 2001 to 5.7
    million square feet in 2010. As discussed previously, we are using the
    BURR effort to reuse vacant space for homeless veterans and their
    families. BURR also identifies other potential reuses of vacant and
    underutilized space and land within VA's inventory such as assisted
    living, senior housing, and housing for veterans of Iraq and
    Afghanistan and their families. VA also houses homeless veterans in
    public and private ventures through enhanced-use leasing.
    Major Construction
        The major construction request in fiscal year 2012 is $589.6
    million in new budget authority. In addition, VA has been the
    beneficiary of a favorable construction market and, as a result, is
    able to reallocate $135.6 million from previously authorized and
    appropriated projects to accomplish additional project work--resulting
    in a total of $725.2 million for the major construction program. This
    reflects the Department's continued commitment to provide quality
    healthcare and benefits through improving its infrastructure to provide
    for modern, safe, and secure facilities for veterans. It includes seven
    ongoing medical facility projects (New Orleans, Denver, San Juan, St.
    Louis, Palo Alto, Bay Pines, and Seattle) and design for three new
    projects (Reno, West Los Angeles, and San Francisco) primarily focused
    on safety and security corrections. One cemetery expansion will be
    completed to maintain and improve burial service in Honolulu, Hawaii.
    Minor Construction
        In fiscal year 2012, the minor construction request is $550.1
    million. In support of the medical care and medical research programs,
    minor construction funds permit VA to realign critical services, make
    seismic corrections, improve patient safety, enhance access to
    healthcare and patient privacy, increase capacity for dental care,
    improve treatment of special emphasis programs, and expand our research
    capability. We also use minor construction funds to improve the
    appearance of our national cemeteries. Further, minor construction
    resources will be used to comply with energy efficiency and
    sustainability design requirements.
    Greening the Department of Veterans Affairs
        The ``greening VA'' effort continues to be strong. There are 21
    facilities Green Globe-certified and 4 facilities LEED-certified. We
    have completed energy efficiency benchmarking for 99 percent of VA-
    owned facilities and obtained the ENERGY STAR label for 30 VA sites
    since 2003. Electric meter installations were completed for 60 percent
    of targeted buildings and we are installing solar energy systems at 35
    sites for a total capacity of 30 megawatts. VA has installed wind
    turbines at two sites, awarded two ground source heat pump projects,
    awarded five renewably fueled cogeneration projects, and completed one
    fuel cell project.
        In fiscal year 2012, we plan to invest $27 million for solar
    photovoltaic projects, $51 million in energy infrastructure
    improvements, $21 million in renewably fueled cogeneration using
    biomass (wood waste) or biogas (waste methane), $1 million in
    sustainable building, $14 million for wind projects, and $10 million
    for alternative fueling projects and expansion of environmental
    management systems.
                             information technology
        IT is integral to the delivery of efficient and effective service
    to veterans. IT is not a supplementary function--it is key to the
    delivery of efficient, modern healthcare. The fiscal year 2012 budget
    includes $3.161 billion to support IT development, operations, and
    maintenance expenses. The fiscal year 2012 budget will fund the
    Department's highest IT priorities as well as information security
    programs, which protect privacy and provide secure IT operations across
    VA. Under our disciplined development program, Project Management
    Accountability System (PMAS), the delivery of customer software
    milestones exceeds 80 percent which is up from just 20 percent before
    the implementation of PMAS. The budget request will also fund systems
    that VA will develop and implement under the Caregivers and Veterans
    Omnibus Health Services Act of 2010.
        In 2010, VA made the sound business decision to discontinue the
    Integrated Financial Accounting System and the data warehouse component
    of the Financial and Logistics Integrated Technology Enterprise. The
    Office of Information and Technology will fund other continuing
    projects such as Compensation and Pension Records Interchange (CAPRI)
    which offers VBA rating veteran service representatives and decision
    review officers help in building the rating decision. CAPRI does this
    by creating a more efficient means of requesting compensation and
    pension examinations and navigating existing patient records.
    Veterans Relationship Management
        The fiscal year 2012 IT budget for VRM is $108 million, and it will
    support continued development of the online portal as well as the
    development of customer relationship management capabilities.
                       virtual lifetime electronic record
        The Virtual Lifetime Electronic Record (VLER) is a Federal,
    interagency initiative to provide portability, accessibility, and
    complete health, benefits, and administrative data for every
    servicemember, veteran, and their beneficiaries. The goal of this major
    initiative is to establish the interoperability and communication
    environment necessary to facilitate the rapid exchange of patient and
    beneficiary information that will yield consolidated, coherent, and
    consistent access to electronic records between DOD, VA, and the
    private sector.
        VLER will not create a new data record, but it will ensure
    availability of reliable data from the best possible source. The VLER
    health component of this initiative is in operation at two pilot sites
    with a plan to add nine more pilots this fiscal year. VLER will work
    closely with other major initiatives including VBMS and VRM. A total of
    $70 million in IT funds in 2012 is required to complete the effort and
    move to national production and deployment of initial VLER
    capabilities. The VLER partnership between VA and DOD will serve as a
    positive model for EHR interoperability in the country, which has been
    an administration priority.
                                    summary
        VA is the second largest Federal department and has more than
    300,000 employees. Among the many professions represented in the vast
    VA workforce are physicians, nurses, counselors, claims processors,
    cemetery groundskeepers, statisticians, engineers, architects, computer
    specialists, budget analysts, police, and educators--all working with
    the greatest determination to best serve all generations of veterans.
    In addition, VA has approximately 140,000 volunteers serving veterans
    at our hospitals, vet centers, and cemeteries. There are things that
    they do that cannot be converted into dollar values--patience, dignity
    and respect for veterans, some of whom are heavily challenged by the
    memories of their wars.
        As advocates for veterans and their families, VA is committed to
    providing the very best services. I will do everything possible to
    ensure that we wisely use the funds the Congress appropriates for VA to
    improve the quality of life for veterans and the efficiency of our
    operations--innovatively and transparently--as we deliver on the
    enduring promises of Presidents and the obligations of the American
    people to our veterans.
        I am honored to present the President's fiscal year 2012 budget
    request for VA, and to represent all VA employees and the interests of
    those outside of VA, who share our commitment to veterans.

                               CONTINGENCY FUNDS

        Senator Johnson. Mr. Secretary, the budget includes a
    request for $953 million of contingency funds for medical
    services. As you described in your testimony, the need for this
    is due to the incorporation of current unemployment rates into
    the model, which may lead to greater demand for VA healthcare
    in fiscal year 2012. As you know, contingency funds are often
    viewed with skepticism by the Congress, especially in the House
    of Representatives. Can you explain the requirement and the
    rationale for this fund, and do you see this fund as a one-time
    only requirement?
        Secretary Shinseki. Mr. Chairman, an important question.
        As I think most members of the subcommittee know, we
    anticipate our requirements for healthcare through a process of
    modeling. It's called the Milliman model and it has been tuned
    to VA's factors.
        Over the past 7 years, the model has gotten refined and
    quite precise to the point that it enjoys confidence in the
    Office of Management and Budget (OMB) and the Government
    Accountability Office, who have both looked at this. For the
    first time, the model has raised the requirement for an
    unemployment rate factor. It has never done that before. What
    we understand is because of the extended economic conditions,
    the model has raised this issue, indicating in 2012, it is
    likely we will need $953 million to address the unemployment
    rate factor.
        While I have great confidence in the basic model because we
    have worked with it so closely over years, the unemployment
    rate factor is a first-year requirement. I do not have the
    history to be able to speak confidently about the accuracy of
    its prediction. The modelers advise me to pay attention because
    the model is usually correct.
        I guess I could have tucked that money inside the budget. I
    thought it best to be transparent about it and demonstrate my
    concern that we are addressing a first-year new modeling
    requirement. We have scored our budget, put the $953 million
    into the budget, but set it aside, and allowed that to be
    called, unfortunately, a contingency fund, which I understand
    is a less than comfortable term. We have set it aside so that
    we cannot use it unless the unemployment rate factor does kick
    in, and I then have to take evidence of that and get a release
    from OMB. If that factor does not kick in, then the money goes
    back to the Department of the Treasury, or whatever unused
    portion remains goes back to the Treasury.
        I would offer this was my effort to be transparent about my
    concern that this is a first year factor being introduced, and
    I wanted folks to understand that we are doing this. We scored
    it. We have done the right things. It is really risk mitigating
    as a decision that otherwise we would have to come and seek the
    Congress' support on a supplemental in 2012. I thought it was
    prudent to advance that decision in this way. I am open to any
    suggestions that the Congress deems appropriate.

                               CLAIMS PROCESSING

        Senator Johnson. Mr. Secretary, you are to be commended for
    your effort to be transparent. But Senator Kirk and others will
    debate this.
        Mr. Secretary, as you and I have discussed many times, the
    time it takes the VA to process a claim is a recurring
    complaint I have received from South Dakota. This subcommittee
    has provided the VA every dime it has asked for, and then some,
    to try and help you get a handle on the problem, yet the wait
    time is predicted to get even worse in fiscal year 2012. We are
    seeing the VA make significant strides in the past several
    years in shrinking the number of days veterans have to wait to
    see a doctor, yet on the benefits side, delays keep growing.
        My first question is a very basic question. What is it
    about this process that makes processing claims in a timely
    fashion so difficult? And what is the comprehensive plan
    forward?
        Secretary Shinseki. Mr. Chairman, just a little bit of
    history, when I arrived in 2009. For the first time our VBA,
    the people who do the claims processing who are good folks who
    come to work every day and try to do the right thing here--for
    the first time ever, they produced 977,000 claims decisions
    going out the door, and at the same time, there were 1 million
    claims arriving. The following year, 2010, we put 1 million
    claims decisions out the door and received in 1.2 million
    claims. We estimate this year, we are likely to receive 1.4-1.5
    million claims.
        To address this growth in the past, with great support from
    the Congress, our solutions have been to hire more people, and
    so every year we address the growth and have hired more people.
    Well, right now we have 14,000 people processing claims, and
    just looking at our most recent history, I can tell that hiring
    more people will give us an incremental improvement in
    production, but it will not get us to where we are knocking
    this backlog down. So we have to do something different.
        And the issue here is automation. We have invested heavily
    in automation tools. The key one is being piloted today in
    Providence. It is the VBMS I talked about. We anticipate in
    2012 VBMS is going to provide us with a tool that we can
    distribute nationwide and begin to use to go after the backlog.
    That is where we are in this process.
        IT is the elephant in our house, and we have to get this
    done. This year in 2011, we provided an unprecedented increase
    for the folks in the VBA. We plussed them up by 27 percent,
    which is where a lot of the money that you have seen is
    affiliated with the increase in IT. We weighed an outcome on
    the 2011 decisions, and hope the increase for tools in VBA will
    be sustained so we can deliver this tool.
        That is where we are, and our plan is, as soon as these
    tools are available, to begin knocking down the backlog.
        I came in 2009 with the intent of going to work on the
    backlog as the first priority. When I arrived, we had a brand
    new program called the Post-9/11 GI Bill, and all of my efforts
    had to go into getting the Post-9/11 GI Bill up and running,
    beginning in January 2009, because in August 2009 we had
    youngsters in classes going to school. It is a wonderful
    program; it is just that we had no automation tools at that
    time. Everything had to be done by hand. By the summer of that
    year, our efforts paid off. We had kids in school about 173,000
    of them, put there, again, by working with about 6,500
    different educational institutions. In the meantime, we built
    the automation tools that were going to change the environment
    for us. Today, we have in this program alone about 423,000
    youngsters in school, all the processes, for the most part, are
    automated. It is because of what we went through, this sort of
    dark knight of the soul with the Post-9/11 GI Bill from full
    stop to up-and-running automation wise. I am confident that the
    investments we are making in VBMS are the right tool, and the
    payoff will be equally significant.

                                  UNEMPLOYMENT

        Senator Johnson. Senator Kirk.
        Senator Kirk. Thank you, Mr. Chairman.
        Is the unemployment factor in the fiscal year 2013 budget
    request as well?
        Secretary Shinseki. I'm sorry, Senator.
        Senator Kirk. Is the unemployment factor in the fiscal year
    2013 budget request as well?
        Secretary Shinseki. I am not sure I have a good answer for
    you on that.
        Senator Kirk. Can you get back to us?
        Secretary Shinseki. I will. I am happy to provide that.
        Senator Kirk. I also want to make sure that the White House
    prediction of unemployment is your prediction, because my guess
    is the White House is going to predict over next year
    unemployment will fall dramatically. So I want to make sure
    left hand and right hand are actually talking to each other.
        Secretary Shinseki. Yes. Again, the unemployment rate
    factor is an unknown for me, and I have put this in there
    because the model says so, and this is something I will have to
    deal with. I will have a better answer for you in 2012 when we
    see whether or not the unemployment rate factor kicks in. I am
    happy to provide that information.

                                   CARRYOVER

        Senator Kirk. Thank you.
        And, of course, for you and Secretary Baker--as I
    understand it, when Secretary Baker came in as the Chief
    Information Officer in 2009, a significant portion of the
    Department's projects were behind schedule by more than 1 year
    and over budget by more than 50 percent. You halted the
    development of 44 projects and ultimately canceled 12 of them.
    As a result of halting development on so many projects, the
    Department fell short of spending its money that the Congress
    appropriated in fiscal year 2009. As a result, the IT/VA
    account carried $676 million from fiscal year 2009 to fiscal
    year 2010. And, with all that carryover funding to supplement
    your fiscal year 2010 appropriation, you then carried another
    $675 million from fiscal year 2010 to fiscal year 2011.
        In this time of budget constraints, and especially the
    pretty heavy scrutiny you are going to go through over in the
    House Appropriations Committee, I think the days of carrying
    more than $600 million are pretty much over. I think it would
    help us, Mr. Chairman, if we divided the IT account into three
    areas, and I hope our bill can do this--one line for salaries,
    one line for operations and maintenance, and one line for
    development so that we can keep a track of what has been a real
    problem child here. Is that possible to do?
        Mr. Baker. Thank you, Senator. We have looked just briefly
    at that. Clearly, we carry over primarily on the development
    side, but we also have a reason to carry over on the operations
    and maintenance side occasionally--equipment purchases and
    licenses and other things that may not get executed in August
    or September rolling into October or November. But as you
    identified, the primary reason for that carryover comes from
    development projects that we have slowed down or stopped.
        I do not think that the proposal causes me any great angst.
    I think we lay those out in individual lines at this point in
    time, so I would certainly want to work with the staff on the
    implications of that.
        Senator Kirk. Mr. Secretary, do you think--is there a way
    to have sort of, for lack of a better term, a Shinseki
    principle here that this IT effort is brought to bed by
    November of next year so that we make sure that we have full
    Shinseki management from start to finish exactly as we had for
    Stryker so that there is full accountability and no new
    personalities? If you screw up, you go back to the same boss.
        Secretary Shinseki. I think in essence we have that now. It
    is called the Program Management Accountability System, and the
    key words in that are management accountability. This is
    Secretary Baker's creation.
        Senator Kirk. My thinking is, is the deadline so that it
    all comes in while you are definitely with us?
        Secretary Shinseki. We can certainly set it up.
        Senator Kirk. Okay.
        Secretary Shinseki. I would not speak about the deadlines,
    but the key words in the Program Management Accountability
    System are management accountability. Initially when you
    tighten the screws down and people have to explain why they are
    either over budget or over schedule, you get that initial delay
    in the execution and hence, the early carryover. I predict in
    2011 and 2012 the carryover will be significantly less because
    we now have momentum and execution. Eighty percent of our
    projects are being executed at a very high standard, which was
    much less of the case in 2009 when I arrived.

                             GENERAL ADMINISTRATION

        Senator Kirk. Okay. One other question. The Department's
    fiscal year 2012 request that proposes a record high $448
    million for the VA's General Administration offices in
    Washington, DC, that is about $51 million higher than in fiscal
    years 2010 and 2011. The increase includes $23.5 million for an
    OMB initiative on reform for the Federal Government's
    acquisition force, but still it is a pretty high disconcerting
    request.
        To put it in context, as recently as 2006, VA Central
    Office budget was just $275 million. That is a 63-percent
    increase for central offices just in 4 years.
        Can you give us a compelling reason why the central
    administration costs so much so quickly?
        Secretary Shinseki. Senator, I am happy to provide the
    details; I just do not have the details you are referring to
    today.
        [The information was not available at press time.]
        Let me just offer that part of that growth has been in the
    Office of the Secretary--primarily, a $834,000 increase over
    the fiscal year 2011 budget request. In reality, there is not
    another person working in my office this year that was not
    there last year. What I am trying to correct here, and again, I
    will chalk this up to transparency is in the past we have had a
    method of detailing people into the Office of the Secretary.
    They were paid elsewhere, but they actually worked in the
    Office of the Secretary. What I have tried to do is clean up
    the accounts so, if they work in the Office of the Secretary,
    they get paid there. It just made it clear where they were
    being employed.
        Senator Kirk. Right.
        Secretary Shinseki. That is part of what is here also.
    Acquisition is a Governmentwide initiative, and 50 percent of
    that funding is tied to that initiative. I am happy to provide
    the details and the remaining percentage.
        Senator Kirk. Thank you.
        Thank you, Mr. Chairman.
        Senator Johnson. Before recognizing Senator Reed, I want to
    remind members that I am recognizing members in order of
    arrival.
        Senator Reed.

                                 CLAIMS BACKLOG

        Senator Reed. Thank you very much, Mr. Chairman, and thank
    you, Mr. Secretary, and your colleagues for your testimony
    today and for your service.
        Both the chairman and Senator Kirk have raised very
    important questions about the IT funding. One other aspect that
    I would like to touch upon is, to what extent is that
    critical--the amount of money that you are carrying over--to
    addressing what we are all concerned about as a backlog in
    claims applications and processing? Another way to ask that if,
    in fact, this money is sort of recaptured or diverted, will
    that materially affect your ability to reduce significantly,
    and we hope eliminate, the claims backlog?
        Secretary Shinseki. Senator, I am going to call on some of
    our administration leadership here because they really can
    describe the impact. But you know, we centralized IT because we
    wanted better execution. When it was distributed throughout the
    Department, we had uneven decisions being made. We centralized
    it under an assistant secretary so we could have greater
    visibility and greater control.
        The effect of what that creates is as though there is an IT
    entity. There is no IT entity. The IT is in medical, it is in
    benefits, and it is in cemeteries. Although you look over here
    and you see a fairly large program, the dots connect over here.
    Whenever we talk about reducing or reviewing the IT budget,
    those reductions end up impacting medical care and, most
    importantly, veterans' benefits where the backlog is what we
    are trying to take down. Even our cemeteries are tied to that.
        I am happy to have Secretary Baker talk about the IT
    pieces, but I think it is important to ask the administrations
    what the impact to them is, if that is okay.
        Senator Reed. Go right ahead, please.
        Mr. Walcoff. Thank you, Senator. I am really glad that I
    have the opportunity to address this because it is something
    that I feel really strongly about.
        As has been mentioned by several members, we have certainly
    gotten resources for people over the last several years. We
    have added a large number of people, yet we have not been able
    to accomplish what all of us want to accomplish, which is to
    eliminate this backlog.
        Senator Reed. For the benefit, can you identify your
    position?
        Mr. Walcoff. Okay, I am sorry. My name is Mike Walcoff. I
    am the Acting Under Secretary for Benefits.
        Senator Reed. Right.
        Mr. Walcoff. There has not been in the past the investment
    in technology in VBA that there really needed to be,
    particularly for this business line. If there is one reason
    that I would focus on for how we got to this point of a
    backlog, that would be it. What I would say is, that is being
    remedied in the fiscal year 2012 budget. It started in 2011,
    and it is being remedied in 2012 by the existence of two
    particular projects, one being the VBMS. This is the initiative
    that is going to take us away from a paper-laden, cumbersome
    system that has been the same as it was 50 years ago, to an
    electronic system, where everything is done through technology.
    It is going to allow us not only to produce more claims but,
    more importantly, I believe, increase our quality. Right now,
    our quality is at 84 percent. The Secretary has set a goal for
    us of 98 percent, a pretty significant increase.
        What this system is going to do is by being rules-based, it
    is going to make it so when our rating specialists go in to
    work a claim, some of the issues that they have to decide, or
    the forks in the road that they came to in the past and
    possibly gone down the wrong road, this system is going to
    guide them to making the right decision on each of those
    decision points.
        They will still be making the decision, but they will be
    greatly aided by the technology. It is extremely important that
    this go through, since it is really the key to allowing us to
    get over the hump of the situation where we keep getting more
    claims in than we complete, even though we keep increasing our
    production.
        The second initiative is called the VRM system. The
    Secretary referred to it. This has to do with the methods that
    veterans use to interact with us. Right now, when a veteran
    wants to interact with us, basically he is confined to waiting
    until the normal business hours and calling us on the
    telephone. What the VRM initiative is going to do is enable a
    veteran to do a lot of things with self-service whenever he
    wants. If he wants, at 3 o'clock in the morning, to get up to
    change his address, instead of having to wait till the next
    morning to make a phone call, he can go in the system himself
    and do it. He can come in and check the status of his claim
    instead of having to call an agent the next day. He can change
    his direct deposit. There are all kinds of things that he can
    do with VRM that he can do with most other businesses he deals
    with that he has not been able to do with us before. It is
    extremely important.
        The other question I get is, why are you so confident that
    these initiatives are going to be successful? I would tell you
    that my confidence is primarily because I have seen what
    technology has been able to do for the GI Bill. I think most of
    you remember we had some problems with the GI Bill in the
    beginning. We had to do a couple of things to work out of that,
    but the fact is we are in much better shape now. The main
    reason we are in such good shape now is because of the
    technology that was developed by our IT organization under
    Secretary Baker's leadership.
        I appreciate the opportunity to answer. As you can tell, I
    am excited about this because it really is what is going to
    turn us around in the backlog area.
        Senator Reed. Thank you very much. My time has expired. But
    I think one of the--and I am no expert in business management,
    but private companies are able to reserve up front a
    significant amount of money for investment in new technologies,
    etc. One of the problems with our budgeting is everything is
    the same--personnel is the same, investing in technology is the
    same, etc. And this seems to me one of those examples where if
    we are able to reserve sufficient resources and invest them
    wisely, we will be able to save going forward and serve our
    veterans more effectively.
        But thank you, gentlemen. Thank you, Mr. Chairman.
        Senator Johnson. Senator Nelson.

                                  CONSTRUCTION

        Senator Nelson. Thank you, Mr. Chairman.
        Secretary Shinseki, let me just briefly say that under your
    leadership, I really believe the VA is making the kinds of
    gains that we are really taking care of the veterans in a much,
    much more responsible way, and in a way that is far more
    current in dealing with their needs. Obviously, there are
    commitments that need to be met, and we need to be as good at
    taking care of our veterans as we are at creating them. And I
    commend you for all your efforts and success in improvement.
        The commitment made in last year's budget request to the
    Omaha VA hospital is very good news for thousands of veterans
    in Nebraska and western Iowa. The fiscal year 2011 budget
    request addresses the needs of the Omaha VA hospital by
    providing a plan and design money for what will be a much
    needed 21st century healthcare facility. And I understand the
    plan and design of this facility can take as much as 18-24
    months.
        Mr. Secretary, as we are still operating under a continuing
    resolution, you have indicated in a previous conversation that
    the budget stalemate in Washington presents the possibility of
    a delay for the Omaha VA project. And if that is a possibility
    of the delay, perhaps maybe you can help me understand, as we
    have spoken privately, about what this might do to the
    construction and fulfilling the needs of veterans in that
    region of our country.
        Secretary Shinseki. Certainly, Senator. I think, as you
    know, the project is to replace most of the existing campus. It
    will involve a new surgical suite, bed tower, intensive care
    unit, clinical and administrative services, and parking, so it
    is a significant project.
        The request in the fiscal year 2011 budget request is for
    $56 million of design monies. We have within our capability to
    do advanced planning, and so we are in the process of doing
    advanced planning now. Schematic design as it is called; we
    expect it will be probably completed by July of this summer. We
    would then look for the design dollars to be awarded so we can
    go forward.
        As long as the money arrives this year, we can go to the
    next phase, and we will then offer to the Congress the
    opportunity to allow us to carry that over for a 18-24 month
    period over the next few budget years. We would not be asking
    for new money, but it is the design monies that were awarded
    with the fiscal year 2011 budget. There may be a little delay,
    but we would be able to continue with the project.
        Following that design, we expect construction documents and
    an offering for bids. It is a phase sequence. Right now, the
    $56 million is critical because it will allow us to begin the
    next phase. Any request for dollars will be based on what that
    design criteria ends up being. That is where we are, Senator.
        Senator Nelson. And Dr. Pretzel, you are so very familiar
    with the Omaha facility. Can you give us an idea of how
    healthcare will be improved for veterans in--that will be
    accessing that hospital--that facility?
        Dr. Petzel. Thank you, Senator Nelson, I can.
        There are several major problems at the facility right now
    that are going to be corrected. The heating, ventilation, and
    air conditioning systems are out of date and they cannot be
    improved. The operating room suites are very much undersized
    and not in appropriate relationship to the intensive care unit.
    We have difficulties with water seeping through the inner and
    outer walls, etc. There are multiple problems, Senator, that
    will be corrected by this within the facility. I think, most
    importantly, we will have a state-of-the-art new facility,
    state-of-the-art intensive care unit, and state-of-the-art
    operating rooms. We will be able to operate this facility much
    more efficiently than we are able to operate the Omaha facility
    now and do a better job of accommodating the needs of the
    veterans in Nebraska and western Iowa.
        Senator Nelson. We have even experienced, as I recall,
    power outage in the middle of surgical operations, which have
    created more than a slight challenge for the healthcare of the
    veterans.
        Dr. Petzel. Yes, sir, that is true.

                                   CEMETERIES

        Senator Nelson. Let me ask first with the time I have left.
    The plans that are underway for the new veterans' cemetery in
    Satrapy County, and could you comment on--I know that
    cemeteries are under your direction. Could you let us know how
    things are going that way, Mr. Muro?
        Mr. Muro. Thank you, Secretary. Thank you, Senator.
        Right now, we have two sites that have risen to the top
    that we are reviewing, and once we get through the process, we
    will actually provide the Secretary with a recommended site
    that is the best for the area. That process is moving along
    very well. Once we get to that point, the offer to sell will be
    probably mid-summer, early summer. Then we will move forward
    and we will request funding in future years for construction.
    We have the funding to purchase and to design and to conduct
    all the studies we need at this point.
        Senator Nelson. My time has expired, Mr. Chairman. Thank
    you.
        And thank you, gentlemen, for your answers.

                                  CONSTRUCTION

        Senator Johnson. Senator Tester.
        Senator Tester. Thank you, Mr. Chairman. I want to thank
    you, Secretary Shinseki, and all the folks up at the table
    today. I appreciate your service. I will tell you that being on
    the Veterans Affairs Committee and on this subcommittee we get
    to see a lot of one another. I hope you appreciate that. I
    appreciate that, and I appreciate the work you do.
        A couple of things: First of all, I want to thank you, Mr.
    Secretary, and Dr. Petzel for your work on a veterans clinic in
    Billings and because it is going to help a lot. It is going to
    help prevent rural veterans in Montana from traveling
    potentially 400 miles to get a clinic once this baby is built.
        And I just wanted to talk about VA construction for 1
    minute. I know these are tight times, but in your budget, how
    do you feel--the infrastructure portion of this budget, the VA
    construction portion of this budget. Does it meet the needs of
    our veterans? I am looking at it from a rural end in rural
    America, so if you would comment, I would appreciate that.
        Secretary Shinseki. Certainly, Senator. As part of our
    review of our construction projects, one of the things we had
    to make sure of is we were focused on safety and security, both
    of veterans and the workforce. When you look at our projects,
    those projects that we are going to improve the safety and
    security of facilities migrate to the top, so there is a little
    bit of reordering. We are looking for new budget authority of
    $1.27 billion. It is not at the level that past budgets have
    been, but we have had to make some tough choices. But what it
    does do is provide balance in this budget. We support State
    cemetery grants out of this amount. State extended care grants
    also get attention. We did not zero those out to take care of
    just construction for VA; we understand that there is a
    partnership here between this Department and the States and
    being able to look after veterans.
        Minor construction request, $550 million; major
    construction request, a total of $725 million. That is a
    combination of appropriations of $590 million plus $135 million
    that we are putting into the account because we have written
    tough contracts. We have competed them, and we get a better
    rate, because of the economic situation; a better price break
    on those returns. So, $135 million of efficiencies have been
    rolled back into our major construction account.
        Major construction: 10 medical facility projects are in our
    priority list. As you know, we do partial funding as the
    requirements occur, so there are seven major medical facility
    projects underway, and then we are designing three new medical
    projects and one new cemetery project. It is a robust program.
        Senator Tester. You have got two wars, maybe more, who
    knows. Does it meet the needs of the demand of the folks you
    have got coming back from the theater converting into veterans
    in civilian life?
        Secretary Shinseki. It does at this point.

                             MILEAGE REIMBURSEMENT

        Senator Tester. Okay, good.
        Vet centers--first of all, thanks once again for getting us
    a couple more over the last few years and getting them opened
    up. They are going to be a big benefit to veterans, especially
    those with unseen injuries.
        My question is, when you go to a clinic, there is a mileage
    reimbursement. If you go to a vet center, there is not. There
    is not a mileage reimbursement for the veterans, the disabled
    veterans. I have got a bill in to remedy that situation because
    I do not think it is right, and I will get into homelessness
    and mental illness here in a second. But the question is, what
    is your perspective? You probably have not had a chance to look
    at it because we just dropped it in recently. But what is your
    overall thoughts about potentially paying disabled veterans
    mileage reimbursement to get to vet centers? Go ahead.
        Secretary Shinseki. Let me ask Dr. Petzel to comment on
    this.
        Dr. Petzel. Thank you, Mr. Secretary. Senator, that is an
    issue that we have been looking at.
        Senator Tester. Good.
        Dr. Petzel. We have been looking at that issue now over
    this last year and are in the process of developing a pilot to
    look at how this might be done and what it would cost.
        Senator Tester. Okay.
        Dr. Petzel. The issue is that in a fundamental way, because
    the vet centers are an alternate program, they are not viewed
    as being treatment. And the law, as you know, says----
        Senator Tester. Understand.
        Dr. Petzel [continuing]. That we reimburse for treatment.
    We would be delighted to work with you to try and find----

                                  UNEMPLOYMENT

        Senator Tester. Yes. I would love to have that opportunity,
    and I think there is a lot of really, really, really--and that
    is why you guys--I know--I mean, there are a lot of them
    around, and rightfully so. With the unseen injuries we are
    getting out of Iraq and Afghanistan, I think they are
    critically important. And if we are keeping people away, that
    would not be good either.
        Real quick, and I just want your perspective on this. We
    talk about unemployment. What I am reading and what I am
    hearing is we have got two different kinds of unemployment in
    this country. We have got unemployment among general civilian
    population, and then we have got unemployment among our
    veterans in our civilian population. It is much, much, much
    higher. Do you have anything in this budget that will help
    remedy that?
        Secretary Shinseki. We do see the difference, Senator, and
    this is what this contingency fund is intended to look at, and
    that is, the model tells us we are going to be facing this
    factor next year. It is a first year factor for us, but we have
    mitigated the risks.
        Senator Tester. Okay. Thank you. My time is up. I just want
    to close by saying one thing, Mr. Chairman. We have six people
    at the table up here. Three of them are confirmed and three of
    them are not. I think that is a sad statement. I think that you
    guys that are not confirmed hanging out there is ridiculous in
    an agency that is so critically important as we create more and
    more veterans, to have you guys sitting there and not being
    confirmed and you have been in that position for a while. So I
    appreciate your service, especially under those conditions.
        Thank you.
        Secretary Shinseki. Thank you, Senator.

                            EQUIPMENT STERILIZATION

        Senator Johnson. Senator Blunt.
        Senator Blunt. Thank you, Chairman.
        I am going to make one positive comment about what is
    happening at the VA and share one concern of mine. Then, I
    would like to ask a question about the John Cochran Division in
    St. Louis, regarding whether there is anything in either design
    or land acquisition that is included in this budget.
        The positive comment is one I shared with you the other
    day, General Shinseki. The veterans' clinic in Branson,
    Missouri, in my old congressional district, and obviously a
    community I still represent, is likely unique in that at least
    a majority and probably a substantial majority of the people
    that visit this clinic only go there once. It is a real example
    of health IT at work. This is one of the areas where VA is
    clearly ahead of the overall medical environment. It is a good
    example of how much time, energy, and effort, you save and the
    better care that is available if doctors have access to an out-
    of-town patient's file. I believe that only about 25 percent of
    the people that visit the facility go multiple times. These are
    the people who are traveling. There are a number of doctors at
    the Branson Clinic. It is a substantially sized facility. VA is
    out there in a significant way showing how health IT works, and
    I'm appreciative.
        The John Cochran Division in St. Louis, on the other hand,
    continues to have challenges. Last summer, they notified
    approximately 1,800 people who had used the dental clinic that
    the equipment had not been properly sterilized. It was a
    terrifying thing for all 1,800 people to get that notice.
        Recently, a concern about surgical sterilization of
    equipment shut down the surgical part of the facility for a few
    days, both of which led to really low ratings from the
    consumers of their confidence in the facility. The last time I
    was there, I noticed that part of their problem is the age of
    the facility. My understanding is the John Cochran Division is
    at some position in land acquisition near the facility. I am
    wondering if there is anything in this budget that impacts
    either design or land acquisition there, or other things that
    might solve those problems at the John Cochran Division.
        Secretary Shinseki. Let me call on Dr. Petzel.
        Dr. Petzel. Thank you, Mr. Secretary.
        Senator Blunt, first of all, just briefly to describe what
    is happening and go back to what has happened.
        Senator Blunt. Well, I actually think I know what has
    happened. So, I do not have much time.
        Dr. Petzel. All right.
        Senator Blunt. Just tell me----
        Dr. Petzel. I will.
        Senator Blunt [continuing]. What we are going to do about
    it.
        Dr. Petzel. There is the project that you are aware of that
    is ongoing right now which is the redoing of the Sterile
    Processing Department (SPD)----
        Senator Blunt. The sterilization.
        Dr. Petzel [continuing]. The sterilization. That is going
    to be accomplished by July 2012. It involves creating a new
    area for SPD, and then renovating the present SPD and moving
    back into it.
        We would have to get back to you about the specific things
    that are in the queue for St. Louis. There are a number of
    projects that are going to impact St. Louis in the future. We
    are just not prepared to be able to comment on that now.
        Senator Blunt. And I think one of them may involve
    Jefferson Barracks and the facility there.
        Dr. Petzel. That is another project. Jefferson Barracks is
    undergoing----
        Senator Blunt. Right.
        Dr. Petzel [continuing]. An extensive renovation.
        Senator Blunt. Yes.
        Dr. Petzel. Part of that is going to entail moving some of
    the spinal cord injury work that is done down at Jefferson
    Barracks up into the Cochran area where it is going to be
    surrounded by the intensive medical support that is needed.
        There are also additional projects that are in the queue,
    and I would like to be able to get back to you----
        Senator Blunt. That would be great, Dr. Petzel----
        Dr. Petzel [continuing]. Post-hearing.
        Senator Blunt [continuing]. If you would do that. I would
    like to see what those projects are, and how any of them may be
    impacted by this budget, and the status of where both of those
    facilities are headed.
        Dr. Petzel. Yes, sir.

                               ARLINGTON CEMETERY

        Senator Blunt. Mr. Muro, I saw this morning again another
    report on concerns about Arlington. Every one of those reports,
    I am sure, creates questions in the minds of families who now
    wonder how accurate the information is on the graves of those
    they care about. Can you give me a little update on what we are
    doing there?
        Secretary Shinseki. Senator, may I----
        Senator Blunt. Certainly.
        Secretary Shinseki [continuing]. Respond to that----
        Senator Blunt. Certainly.
        Secretary Shinseki [continuing]. Because I saw the same
    article, and I took the opportunity to pick up the phone and
    call the Secretary of the Army, John McHugh.
        Senator Blunt. Yes.
        Secretary Shinseki. Secretary McHugh assures me that he is
    working on this and is going to resolve these issues. At the
    same time, I have committed to him that all of our capabilities
    at VA are at his disposal. We have some of his people going
    through our training programs. We have provided some of our
    workforce there to augment his workforce, even as he is hiring
    folks. We are committed to helping him solve the issues he is
    wrestling with, and I think there will be a good outcome here.
    That is where we are.
        Senator Blunt. Is there a different arrangement for
    memorial affairs at Arlington than at some other veterans
    facilities? Are they all under the direct control of the
    service branches?
        Secretary Shinseki. I will ask Mr. Muro to address this.
        Mr. Muro. Are you wanting me to address how they control it
    at Arlington or at our cemetery?
        Senator Blunt. I am asking if it is different--is Arlington
    not considered one of your cemeteries. Is that right?
        Mr. Muro. Correct, it is not one of ours.

                            ADVANCED APPROPRIATIONS

        Senator Blunt. Okay. Alright. Thank you, Secretary, for
    explaining your follow-up there to me. I think I am out of
    time, though I did want to ask just briefly your sense of the
    merits of the 2-year budgeting appropriation cycle that you are
    in. Just a brief sense of that because I think that is the
    direction we ought to try to head and many other areas, if we
    could.
        Secretary Shinseki. Senator, I attribute this to the wisdom
    of the Congress in providing the advanced appropriations to
    this Department. I think we are one of very few departments to
    have this.
        What it has allowed us to do is to get away from annual
    budgeting, sort of internal pressures where at the end of the
    year if you have any money left over, you are encouraged to
    spend it because you are going to give it up anyway. As I have
    said earlier, it may even be punitive, because your next year's
    budget is reduced by that amount.
        What it has allowed us to do is to put in front of our
    leadership, the folks who bring to bear these ideas, the need
    to write good, tough contracts, which lets us be business
    oriented. We need to write good, tough contracts, and then
    compete them. You always get a better outcome. We look for an
    opportunity to have veterans who own small business, be part of
    this which is important to us because veterans hire veterans,
    and that addresses some of the other issues regarding veteran
    unemployment.
        If we do those things, at the end of the year there will be
    savings. I have guaranteed leadership there is going to be
    savings, and I have invited them not to fall into the old bad
    habits, and spend at the end of the year. Let us collect
    savings and let me work with the Congress to explain what we
    have been able to accomplish, and then take those savings and
    reinvest in future budgets so we are buying down the
    requirement for new monies.
        I know this is different. I know it is unusual. Some would
    say not a wise thing to do, but I just think this is the right
    thing to do with how we treat the monies we are entrusted with.
        Out of this year, we have a full year's budget in
    healthcare. I can see at the end of this year a $1.1 billion in
    savings. We have taken $600 million of that and bought down our
    requirement in 2012. Our budget top line remains the same, but
    $600 million of that is how we have bought down the budget with
    our savings. In 2013, $500 million is a second piece of the
    $1.1 billion. We have bought down our requirement for new
    dollars, and I am anticipating now that this will allow us to
    save another $1 billion in 2011-2012 and another $1 billion in
    2013, so that out of this 3-year cycle, I am looking for a $3
    billion reinvestment opportunity. I just think this is the
    right way for us to approach our responsibilities.
        Senator Blunt. Thank you, Secretary.
        Thank you, Chairman.
        Senator Johnson. Senator Hoeven.
        Senator Hoeven. Thank you, Mr. Chairman.
        Secretary Shinseki, I want to pick up kind of on that point
    that Senator Blunt was just talking about. I really appreciate
    your comments.
        First, I want to start, though--thank you for your service
    on behalf of our veterans. It is such incredibly important
    work, and I truly appreciate it. We all do.
        The second thing I want to mention is the VA medical
    facility in Fargo, North Dakota is outstanding. It is
    outstanding. You serve not only all of North Dakota, you serve
    a big chunk of Minnesota. You also serve into eastern Montana.
    I have toured it on a number of occasions. The facility is a
    good facility, and you are improving it, and your people there
    are caring people. And when I have gone through that facility
    and I have talked to veterans, they across the board have
    expressed appreciation for the quality of care and the quality
    of service that they get. I would encourage you, some time when
    it works for you, to come out. I would like to invite you to
    tour the facility. They are making some expansion improvements
    to it right now. But I think it is a clear demonstration of
    quality work on behalf of our great veterans, and I thank you
    for that.
        Given the budget challenges we face, which are very, very
    real, and the incredible importance of taking care of our
    veterans, what ideas do you have--and I think you started down
    that trail on Senator Blunt's last question. What can we do to
    try to make these dollars go further when we talk about taking
    care of our veterans? What kind of things can we do to help? I
    mean, flexibility and the 2-year budget cycle. What ideas do
    you have that we can help make these dollars go further?
        Secretary Shinseki. That is an excellent question, Senator.
    What we have tried to do over the past 2 years was change the
    culture here in VA into a more business orientation, and we
    have done a lot, but we still have work to do inside our
    Department. Great people come to work every day trying to do
    the right thing, but if we are not synchronized and all looking
    at the same objectives, you won't have a tendency to get
    efficiency and accountability. Those things are then bumper
    stickers that you never really get delivery on.
        The 2-year budget helps because it allows us to get away
    from the pressures of that year-to-year budget. Senator Kirk
    asked about the growth in the general account, which is the
    overhead. Well, suggesting that we ought to be more efficient
    does not usually result in efficiency. You have to put plans
    into place, you have to make clear objectives, and then you
    have to supervise, and that is the only way you get the right
    outcomes. A little bit of this issue is the growth and overhead
    that is of concern. I am happy to provide details, but it is
    the results we are looking at here.
        If I can turn $3 billion in a 3-year span of budgets, I
    think there is other opportunity here that we would like to
    continue what we believe are the right behaviors and culture.
    Long after any of us are departed from this table, if we have
    put the right behaviors, the right disciplines, and processes
    in place, then this will be a new way of doing business in this
    Department. The support of this Congress would be crucial to
    our being able to deliver that system.
        IT is the lifeblood here. Unfortunately, because we wanted
    to get control over IT, we centralized it over in Secretary
    Baker's account, so it looks like IT, but IT isn't an entity.
    It is everything we do over in healthcare. There is no
    separation between healthcare and medical IT, the same for
    benefits, and the same for cemeteries. My interest is being
    able to sustain the priorities that we have invested in so we
    can continue to deliver these returns.

                              BUDGET REQUIREMENTS

        Senator Hoeven. What are the key pressure points in terms
    of your budget and your ability to take care of veterans right
    now? You know, they are coming with post-traumatic stress
    disorder (PTSD), brain tissue injuries. We have been at war for
    more than 10 years. What are the pressing pressure points in
    terms of you taking care and meeting these needs of veterans
    vis-a-vis your budget constraints?
        Secretary Shinseki. Well, it is the growth in the number of
    veterans coming to enroll with us. As I have indicated, in
    2008, just before I arrived, we had 7.8 million veterans
    enrolled in healthcare; in 2012, that number is estimated to be
    8.6 million, or about an 800,000 growth in population over 4
    years. My expectation is that will continue to rise, and so,
    the investments in IT, in research and the quality of
    healthcare that we have underway today must continue.
        The investments in IT for veterans' benefits decisions have
    to be sustained so that we can accept this increase in the
    number of claims being submitted. As I indicated, 1 million
    claims a year is not unusual. Now we expect it will be 1.4-1.5
    million in this year alone.
        I just think that the program we have described is a good
    one. The budget supports that. We have a new strategic program
    for looking at our footprint with all of our facilities. We are
    trying to anticipate in the future where the veterans are going
    to populate, and how our current footprint is designed to meet
    that requirement. If it does not do that very well, how are we
    going to adjust over time? That is going to take a lot of work
    and a lot of engagement with the Congress to understand what
    that future plan will look like.
        Senator Hoeven. Mr. Chairman, if I might, one short follow-
    up to that.
        Do you have the ability to move resources the way you need
    to provide care, and do you need significant more fixed asset
    or fixed facility to meet that population need you talked
    about, or can you focus your dollars into taking care of
    people?
        Secretary Shinseki. You know, this is a great question
    because I am trying to answer the question looking forward.
        Right now, I think we have the capability to respond in the
    way you have expressed. We do, however, from time-to-time, have
    to review our priorities, and that involves discussing them
    with the Congress. I am comfortable that we have a relationship
    and dialogue with the Congress so we can do that.
        I believe that we have the tools at this point, Senator,
    and I am happy to come back and work with you and provide a
    better answer.
        Senator Hoeven. Thank you.
        Senator Johnson. Senator Murkowski.

                              HEALTHCARE REFERRAL

        Senator Murkowski. Thank you, Mr. Chairman.
        Good morning, gentlemen.
        Mr. Secretary, thank you for your service, for your
    commitment to our veterans, to all of you. You do an
    exceptional job by them.
        Mr. Secretary, when we were here at this same hearing last
    year, I had an opportunity to discuss the practice that we see
    in Alaska of sending far too many of our veterans outside to
    Seattle for their care. And at the hearing last year, you told
    me--and I quote from the transcript--you said, ``We are going
    to look at very closely why we would send a veteran on a 2,000-
    mile journey if there is competent, safe healthcare available
    close by.'' And then, Dr. Petzel, you also said, ``It's one
    thing to come down for open heart surgery, which may be a super
    special kind of thing to do, but on the other hand, routine
    surgery that could be performed in Anchorage on a contract or
    in-fee basis probably ought to be looked at.''
        And as I mentioned to the Secretary in our meeting this
    week, which I appreciate, we are making some progress in
    certain areas. We are seeing that when it relates to veterans
    who are receiving chemotherapy treatment. We are now seeing
    that care provided locally.
        The report from the VA inspector general in 2010 looked at
    the referral patterns over the years 2008 through 2009--591
    veterans were required to travel to the lower 48 during that
    time period; 63 percent of those veterans resided in either
    Anchorage or the Matsu area, which is just outside of
    Anchorage. It is the home to the most sophisticated medical
    care that we have available in Alaska.
        This week, Secretary, when we spoke, I shared with you the
    cases of two of our veterans, one a 79-year-old Anchorage
    veteran who was required to travel to Seattle for an orthopedic
    consult. The other one was a 74-year-old Anchorage veteran who
    had been directed to Seattle for goiter surgery. Both of these
    procedures could have been done, and when we asked the VA there
    in Anchorage, the standard response is, well, VA regulations
    provide that it must be done in a VA facility. Even if it is in
    Seattle, that is where the care has to be provided.
        So I am going to take this opportunity again to ask, Mr.
    Secretary, why would we send a veteran on a 2,000-mile journey
    if there is competent, safe healthcare available close by? And
    Dr. Petzel, I would ask you if you stand by your statement from
    last year that if routine surgery can be performed in
    Anchorage, it ought to be provided by contract or a fee basis
    if it cannot be done in a VA facility. So, if we can just go
    back to that colloquy that we had last year.
        Mr. Secretary.
        Dr. Petzel. Thank you, Mr. Secretary.
        Senator Murkowski, you accurately did quote what I said
    back in the hearing last year. I was pleased when we reviewed
    this to see that the chemotherapy patients have been provided
    for in Anchorage. I am not pleased with the progress we have
    made. I think there are more things that could be done.
    Specifically, we would like to work with the Indian Health
    Service (IHS), the Native tribes, and the Air Force to see,
    like the Air Force and others who contract in the community, if
    we could do a consolidated bit of contracting to get a better
    price.
        One of the issues has been the difficulty, with only one
    provider, of getting a contract that would be possible to work
    with. You have my promise that we are going to look much more
    carefully at being able to provide more of the care in the
    community. There will be an occasional thing, such as the
    example used before of open heart, where it might be in the----
        Senator Murkowski. Sure.
        Dr. Petzel [continuing]. Veteran's best interest to move. I
    stand by what I said before, and we will do a better job now of
    looking for alternatives in the community.
        Senator Murkowski. Okay. Well, we want to work with you.
        Mr. Secretary.
        Secretary Shinseki. Yes. Senator, let me just add, I think
    Dr. Petzel's response was significant. I would just say, as I
    am looking at the numbers I have, and the numbers you cited for
    2010, these numbers are based on a 2009----
        Senator Murkowski. Right.
        Secretary Shinseki [continuing]. Survey. For 2011, thus
    far, up till March, we are down to inpatient referrals to 26.
    Still, I would want to get into the 26 and then answer your
    question about why are we still sending folks. I do not have
    that detail, but from 200 or so down to 26, we are moving in
    the right direction.
        And then in outpatient referrals, from the 2009 numbers of
    600-plus, we are down to 278. So again, I would want to get in
    the details of the numbers.
        I would also add that for non-VA care, fee-basis care, we
    are paying, about $4 billion a year, and that is going to go up
    significantly over the 2012-2013 time frame. We do have the
    ability to refer patients to the economy for civilian
    healthcare in communities when we are not able to provide it. I
    will work with Dr. Petzel and with you to have a better idea of
    what we are going to try to accomplish, set some objectives,
    and then let us work at them.
        Senator Murkowski. I appreciate you stating not only that
    you will work with us on this. Again, we recognize we have made
    some progress, but I think it is clear that we can and we must
    do more.
        When you state you want to set some objectives, I
    appreciate that because you operate over there within the VA
    system from a very businesslike perspective using benchmarks
    and matrixes. I guess I would ask whether or not you can give
    me a matrix in terms of what we can anticipate or what we would
    hope to reduce the number of Alaska veterans that are being
    sent outside for care in this next fiscal year. If that is not
    something that you can give me today, maybe we can work on
    defining what that is.
        Secretary Shinseki. I am not able to give you those numbers
    today, but I am happy to work with you and try to look forward
    and anticipate what the requirements are going to be, and at
    least have a common vision of what is the likely outcome.
        Senator Murkowski. I want to try to better understand.
    Again, we keep getting the message out of Anchorage VA that
    they are limited in their ability to provide for a level of
    flexibility if the regulations say we are stuck with it. Is it
    necessary for the Congress to provide you with any additional
    legislative authority in order to reduce the number of veterans
    that are sent outside for care, because I am getting a mixed
    message out of what is coming from the State and then what I
    hear from you and your clear willingness to work with us. But
    do we need more to ensure that there is no question but that
    that authority exists to provide that care locally?
        Secretary Shinseki. I do not think at this point, Senator,
    we need any more assistance on this. Just let me get into it a
    little more deeply, and then come back and work with you on
    those outcomes. Then if you still feel that it is not
    sufficient, I am happy to work legislation with you.
        Senator Murkowski. I appreciate that, and I look forward to
    further defining how we address the care of the many veterans
    in our State. And I appreciate that.
        Thank you, Mr. Chairman.

                                NATIVE AMERICANS

        Senator Johnson. I will permit a brief second round of
    questioning.
        Secretary Shinseki, it remains important to me that we meet
    the unique needs of our Indian veterans. The Wagner State block
    was a groundbreaking partnership between the VA and IHS, and
    was long overdue. Mr. Secretary, now that the facility has been
    open for almost 1 year, how has cooperation between these two
    agencies been going, and does the VA plan on duplicating those
    efforts at other locations?
        Secretary Shinseki. Mr. Chairman, the real hero here is Dr.
    Petzel, so I am going to let him provide the details.
        Dr. Petzel. Thank you, Mr. Secretary.
        Senator Johnson, as you know, I am very familiar with the
    clinic in Wagner. It started a long time ago when I was a
    network director in Minneapolis and you and I shared the podium
    when we did the groundbreaking at----
        Senator Johnson. Yes.
        Dr. Petzel [continuing]. That place. It was a precedent-
    setting effort. It is a VA-owned and operated clinic that sits
    on reservation land almost in the middle of the city of Wagner,
    and it is used by both American Indians and non-Indian
    veterans. It is an example that we would like to transmit to
    other parts of the country.
        There have been a few others now, and we do have a number
    of clinics that are located proximate to reservations, but
    really not very many of them that are on reservations. Wagner
    has been a good example. It is operating. They have 370
    patients enrolled. We think it is something that could be done
    in other parts of the country.
        But the difficulty, and the big lesson learned there, was
    the fact it was very difficult to get the tribes, the IHS, the
    VA, and the local community all together on the same page
    deciding what to do. It took us actually 10 years to develop
    that. With the new memorandum of understanding (MOU) between
    the VA and the IHS, I am hoping that we can truncate that
    process and accomplish getting more of these clinics built in a
    much, much shorter period of time.
        Senator Johnson. Do you have a concrete example of another
    VA-IHS combination?
        Dr. Petzel. Well, I do in South Dakota actually----
        Senator Johnson. Yes.
        Dr. Petzel [continuing]. Where there has been a lot of
    progress made. We have a PTSD treatment program on the
    reservation at Pine Ridge. We do telehealth in both Rosebud and
    Pine Ridge in South Dakota. We have compensated work therapy
    programs at four Indian reservations in South Dakota. So there
    are a lot of examples of us being present on the reservations.
        They are very remote, and they are underserved. There is
    just no doubt about the fact they are underserved. Just to
    point out the value and the importance of doing this, in South
    Dakota, 50 percent of the American Indian males are veterans.
        Senator Johnson. Yes.
        Dr. Petzel. This is a warrior society. They participate in
    our military extensively, and I think we need to do a better
    job, quite frankly, of meeting their needs on the reservation.
        Senator Johnson. Dr. Petzel, the healthcare reform bill
    authorized the IHS to enter into arrangements with the VA to
    share not just medical facilities, but also services. Are there
    plans underway to expand the sharing of healthcare services
    between the VA and IHS for Indian veterans in Wagner?
        Dr. Petzel. Senator, thank you, Mr. Secretary.
        Senator, I cannot point to a specific thing that is going
    on in Wagner. I will go back and we can look and hopefully get
    back to you, as a post-hearing response. I do know that in a
    general sense across the country, once our attorneys in the IHS
    and the VA have agreed on what exactly the legislation means
    there will be substantial opportunities to share services
    around the country, particularly for us to provide specialty
    care referral services for the IHS, and for us to, as you had
    mentioned earlier, co-locate some of our primary care and
    mental health facilities on reservations. I anticipate there
    will be a growth in our activity.
        [The information was not available at press time.]
        Senator Johnson. Mr. Secretary, what is the VA doing to
    improve access to VA healthcare and counseling on tribal lands?
        Secretary Shinseki. Mr. Chairman, the basis for our
    approach here, and we are just at the inaugural stages of this,
    is we just signed an MOU with the IHS in October of last year,
    and that is now beginning to promulgate the activities that I
    think over time will deliver what Dr. Petzel is describing.
        Just as an example here, the Wagner community-based
    outpatient clinic, as Dr. Petzel describes, is built on Yankton
    Sioux tribal lands, and it is bringing in more than just tribal
    veterans to that location. It is sized to fit about 700-800
    veterans, and right now, the population is growing. We are
    about at the 370-400 mark, and there are lots of opportunity
    for growth. A lot of what will be required will be driven by
    the veterans who come there looking for services. Right now, we
    provide primary care, mental health services, and home-based
    primary care out of Wagner, as well as contracted specialty
    care. It is open 5 days a week, with normal working hours, so
    there is great access for veterans in the 10-county area that
    is serviced by Wagner.

                                INTEROPERABILITY

        Senator Johnson. Senator Kirk.
        Senator Kirk. Thank you, Mr. Chairman.
        Back to health IT, especially medical records, what would
    be the difficulty in just saying across the board that all
    imagery are JPEGs, all documentation is Word documents, all
    databases are Access databases, so that we could just kill the
    proprietary thing right off the bat and have almost
    interoperability tomorrow?
        Mr. Baker. Thank you, Senator.
        I think the one in there that I would be most concerned
    about would be specifying on the database side. Data
    representation is probably the toughest part of that one.
        I would tell you that we are very focused on incorporating
    a lot more commercial-off-the-shelf--private-sector software,
    into what we do. It is our entire strategy.
        Senator Kirk. Right.
        Mr. Baker. We recognize that we cannot build electronic
    health records (EHRs) at the rate that private sector does. If
    you look, we are blessed by the fact that we build and own one,
    and it is still one of the best EHR systems out there.
        Our entire strategy going forward is to figure out how to
    bring in a lot more commercial-off-the-shelf into what we do
    and turn that into our entire strategy for EHRs.
        Senator Kirk. What is wrong with just having you use the
    Department of Defense (DOD) stuff since they are generating
    veterans, or since you are a little bit larger than them right
    now, having them just surrender and using the VA standard? I
    mean, honestly.
        Secretary Shinseki. I would just say that this has been a
    discussion that has been underway for 2 years now, and I think
    between the two of us, DOD understands that its current system
    capabilities are not going to be what they need in the future,
    so they are looking for a new direction.
        We have a terrific EHR, but again, it is about 20 years in
    being. We are going to have to just also ensure the
    sustainability of that system. It is a great opportunity for
    both of us to put our heads together. Secretary Gates and I and
    our staffs met on the 17th of March to come to an agreement on
    a joint common platform. We have done that. Our staffs now have
    the responsibility by our next meeting in early May to come
    back with an implementation plan and the details of what that
    means. At that point, I am happy to come back and explain what
    our future will look like, and I expect that commercial-off-
    the-shelf will be very heavily represented.
        Senator Kirk. The chairman and I were briefly talking. I
    think it would be great if he and I had you and Secretary Gates
    up here in mid-May to discuss how far you got and to have the
    Appropriations Committee propel you forward on defeating one
    side or the other, and just going with a common standard so
    that we are not inventing very much.
        Secretary Shinseki. I am happy to come back and provide
    that update to the subcommittee. I cannot speak for Secretary
    Gates' calendar.
        Senator Kirk. I was just talking with Tina. She said, you
    know, if we include Chairman Inouye and Chairman Cochran, it
    might propel attendance.
        Secretary Shinseki. I think we have a good solution. This
    is what he and I have been working on for 2 years, and I think
    there is real potential for an outcome here that is different
    than anything that has been tried over the previous decades.

                              CLAIMS ADJUDICATION

        Senator Kirk. Great. I read the House transcript of your
    hearing pretty closely. In it, Chairman Culberson laid out an
    inspector general (IG) report that said callers to the VA had
    only a 49-percent chance of reaching an agent and getting
    correct information; that in claims processing, 23 percent of
    claims were processed incorrectly, and 50 percent of the
    compensation determinations were unnecessarily delayed. How
    have you responded to that IG report that the House
    Appropriations Committee focused so much attention on?
        Secretary Shinseki. Mr. Walcoff.
        Mr. Walcoff. Senator, what you are actually quoting from
    are several different reports that the IG has done involving
    different parts of the VBA operation.
        The reports on the quality of the claims adjudication, I
    would tell you that we recognize the fact that we have got to
    do something to improve the quality of our adjudications. That
    is why the technology part is so important because we recognize
    that just doing more claims at the current accuracy rate that
    we are doing is not the answer, we have got to make sure we
    improve our quality. We are working to do that.
        Senator Kirk. I guess more worrying is the--only 49 percent
    chance of a caller----
        Mr. Walcoff. I am going to make a statement on that. We had
    some disagreement with them on the methodology they used to
    come up with that statistic. We did not concur with that fact
    the way that was quoted. Now, that being said, I will tell you
    that there is a lot of room for improvement in the quality of
    the call agent's work at our call centers. I am not going to
    deny that. We have done a lot of work since that report came
    out on reorganizing our training, having it more centralized,
    and having the individual call centers more accountable for how
    the training is being implemented. While I might not
    necessarily agree with that specific number, I will tell you
    that there is definitely room for improvement, and we are
    definitely trying to improve.
        Senator Kirk. Last question, Mr. Chairman. The Congress
    appropriated a very large amount of money for health IT over at
    the Department of Health and Human Services (HHS). Can you
    describe how you have reached out to HHS who has what I would
    technically describe as a vast amount of money that we
    appropriated on the IT side?
        Secretary Shinseki. Senator, we have been working with HHS.
    Part of the effort between Secretary Gates and I, first of all,
    we have two good EHRs, and our belief is that if we can merge
    our capabilities here and come out with this joint common
    platform in a way that is useful--if we are attentive to
    everyone else, not just the two of us, and have it be useful
    for HHS to use as a model as it looks forward, it will be
    cheaper and faster as well.
        Senator Kirk. If I called Secretary Sebelius and said, how
    about the VA electronic record becoming the Medicare record,
    would she fight me?
        Secretary Shinseki. I do not know the answer to that, but I
    can tell you that we have been working with her IT folks in
    this arena and keeping them abreast of our work with DOD.
        Senator Kirk. Great.
        Mr. Chairman, thank you.
        Secretary Shinseki. May I just add, Mr. Chairman, to Mr.
    Walcoff's remarks? And the question is the IG report. I do not
    quarrel with the IG report. I think what you will see in our
    efforts to automate addresses most of those sort of
    observations in the report.
        First of all, we have a growth in veterans coming to us,
    and that is accompanied by a growth in the amount of claims we
    are getting every year. The numbers are significant. Our
    ability to intervene here with just hiring more people, we have
    realized, at least I have realized in 2 years, you cannot hire
    and train fast enough because the quality you want comes with
    20-30 years of claims processing. That is where the experience
    and the insights make for good, high-quality outcomes. Frankly,
    our quality employees with 2 or 3 years' experience cannot
    match that.
        What we can match is if designing this rules-based engine
    that takes advantage of that 30-year set of experience and put
    it into the rules, then the 2- or 3-year experienced employee
    fills out the right data, pushes the button, and the computer
    can take over.
        Senator Kirk. And by rules-based, you know, for people out
    in the public, this is like TurboTax.
        Secretary Shinseki. It is.
        Senator Kirk. It asks you a set of questions, and based on
    those answers, generates a tax return. This would ask a set of
    questions and would generate a disability determination.
        Secretary Shinseki. Absolutely.
        Senator Kirk. Yes.
        Secretary Shinseki. Last year we produced 1 million claims
    in 2010. Just so there is clear sighting on what is involved in
    here, I would tell the subcommittee that 57.6 percent of those
    claims that we produced were reopened compensation claims,
    either a request for increase, a new condition that wanted us
    to take cognizance of, or a claim that had been previously
    denied. When you are in paper, every resubmission is a new
    start.
        Senator Kirk. Right.
        Secretary Shinseki. When you get that information in
    automation, 60 percent of the work is already done. It has
    already developed, and what you are doing is you are pulling
    that data up and reviewing it. That is why we want to get to
    this automation piece and why that is going to make a
    tremendous change in the way we have been doing business.
        I would say of the phone calls that come in and cannot get
    a satisfactory answer, 50 percent of the calls are
    administrative like I want to change my number of
    beneficiaries; I want to change my mailing address; or I want
    to change my bank account. It is either those administrative
    calls or what is the status of my claim. It is sort of like
    that, with where is my FedEx package en route. All of this is
    through automation, and that is why the other project, VRM, is
    really the opportunity for a veteran to check in the system
    without having to make a phone call and wait for a call back or
    try to find someone with the right information. They can
    influence their interactions with us at a time and a place of
    their choosing, and that is why I think this automation
    solution in both these categories, claims and relationship
    management, hold the best opportunity for a major and
    significant change in how veterans interact with us and their
    satisfaction.

                                 RURAL VETERANS

        Senator Johnson. Senator Murkowski, do you have any follow-
    up questions?
        Senator Murkowski. Just very quickly, Mr. Chairman, if I
    may. And this follows on your inquiry about working with the
    IHS.
        Mr. Secretary, we have been talking for a number of years
    now about how we can better provide access for our Alaska
    Native veterans that are living in some pretty far flung parts
    of the State, some pretty remote areas, and how we can provide
    care for them closer to their homes, utilizing the Alaska
    Native Health System. And I appreciate your comment earlier
    about working together more collaboratively within IHS and with
    the tribes.
        We have got a tribal liaison that has been created within
    the VA. I appreciate that. I really hope that we are able to
    see some positive action out of that. We will await that.
        A couple of years ago, the Anchorage VA launched this pilot
    project to provide our rural veterans with a limited number of
    appointments at Native health facilities or community centers.
    We had an opportunity to discuss the independent report that
    came out August of last year, and it was not surprising that it
    was as big a disappointment, I think, as the report concludes.
    I had sent you a letter earlier saying that I was concerned
    about the design of this and how we were really going to be
    able to get the information out. What we learned was that 92
    percent of the veterans surveyed indicated they had never heard
    of it. Many others said they did not use the pilot because they
    did not understand how it worked. Providers expressed their
    concerns that it was too limited in scope to provide for
    adequate level of care.
        So we are through that. We are now where we are, and it
    does not seem like we have figured out what that solution is,
    how we provide for that better level of access to our rural
    veterans and more specifically, to our Alaska Native veterans.
        Have we learned anything from this pilot project? What--and
    this is a very general question to you, but where do we go next
    in our efforts to provide care for our rural veterans?
        Secretary Shinseki. Let me call on Dr. Petzel, and I will
    conclude.
        Dr. Petzel. Thank you, Mr. Secretary.
        Senator Murkowski, you accurately described the results of
    that pilot. My personal feeling is that not all of the right
    things were done in terms of implementing that pilot. As you
    pointed out, for making people aware, and providing for a case
    manager coordinator to see that people actually used it and
    then follow through to see that the people that were eligible
    and in the area could actually use the clinic.
        I think with the new MOU with the IHS and then the sharing
    arrangements that are described in that MOU, we have got an
    opportunity to go back and look at veterans using IHS clinics.
        One of the issues that has arisen around the country, not
    just in Alaska, is the difficulty sometimes of having non-
    Native people use a facility that was dedicated to Natives. The
    fact that we have the interest on the part of the IHS at the
    national level in seeing that this occurs and that we do this,
    I think is going to go a long ways toward overcoming that
    resistance that we felt in some areas.
        I think one of the immediate answers to your question is
    that we need to go back and re-look at and reinvigorate the
    idea of us using Native clinics for non-Native veterans, number
    one.
        Number two is what I mentioned earlier, and that is a
    concerted effort at contracting for-fee care with the Air Force
    and the Alaska Native community. I just believe that we would
    provide a substantial amount of leverage if all three of us got
    together and looked for one contract with a network perhaps of
    providers that could better meet the needs of the Air Force,
    the VA, and the Native community.
        You have got my promise that we are going to go back and
    look at trying to reinvigorate our using the Native clinics.
        Secretary Shinseki. Senator, let me just conclude. I think
    if we were to look at the history of VA healthcare delivery, I
    think we would all recognize decades ago we had large
    hospitals, and healthcare delivery was, come to the hospital
    and get your healthcare. In the past 15 years or so, some
    bright folks at VA decided to change that delivery model and to
    push from those hospitals out to the communities where veterans
    live. That is why we have community-based outpatient clinics
    and vet centers and mobile clinics, and so forth. I think that
    they were a good first step in trying to outreach to where the
    veteran populations were.
        With the chairman's leadership, we have begun a rural
    program within VA, which takes that outreach to the next step
    with $250 million a year now for several years and that
    addresses the rural requirements, which is creating more
    opportunities for access to veterans.
        I do not think what we have done is quite visualized what
    you are describing, and that is the longer reach to the highly
    rural areas where there are no roads, and it is difficult to
    get in to provide healthcare in the way we have traditionally
    provided it. That is why this MOU with the IHS is significant
    for us. I do not think we have maximized yet the capabilities
    here, and we probably need to take that vision--that next
    step--and codify some very specific objectives that we intend
    to accomplish here. I'm happy to do that with you and your
    staff and also with the chairman, who has been helpful here in
    the rural efforts.
        Senator Murkowski. I think the answer is clearly there. It
    is not as if we need to create or build VA facilities in every
    small community in America. That is not our answer. But where
    you do have systems, Federal healthcare systems, whether it is
    within the military, the DOD, or whether it is within IHS.
    Looking at it from the veteran's perspective, they are looking
    it and they are saying, ``It is all Federal money here. I am a
    veteran. I am a Native. There ought to be some ability to work
    within this Federal system.'' It is not unlike what Senator
    Kirk has been talking about in terms of the electronic records.
    I think the average individual just cannot fathom that the VA
    does not connect with, speak with, DOD when it comes to the
    records of that individual who at one point in time was active
    military, then moved to the veteran. He has not changed. His
    health status has not changed, and yet his records do not
    travel with him. And it is not unlike being able to receive a
    level of care. You are working within different Federal health
    systems. There must be some better way that we can help to
    facilitate this. So again, I urge you as we look to these
    systems that we are setting up, whether it is our tribal
    liaisons to work within--between the VA and the IHS, the MOUs
    that we have. I think we need to get more aggressive because
    right now what happens is the promise that we have made to our
    veterans when it comes to healthcare seems to be only able to
    be fulfilled if you happen to live in the right part of the
    country. And that was not the promise. So we have got to be a
    little more flexible.
        I think you have given the commitment to work with us, and
    I look forward to working with the chairman on this as well.
        Thank you.
        Secretary Shinseki. Senator, I would just conclude that the
    MOU we signed with the IHS is significant because we have begun
    to implement and to define what that really means. To this
    point, it includes pharmaceutical support, telehealth, homeless
    services, cultural competence education, co-managing patients,
    physician cross-credentialing, and building of community-based
    outpatient clinics located near and even on tribal lands, which
    you know is a serious discussion, including transportation
    programs. We have begun to flush out what that MOU represented,
    and we just need to do that faster and better.
        Senator Murkowski. Thank you, Mr. Chairman.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Johnson. I would like to thank the Secretary and
    those that accompanied him for appearing before this
    subcommittee. We look forward to working with you this year.
        For the information of the members, questions for the
    record should be submitted to the subcommittee staff by the
    close of business on April 7.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]
                   Questions Submitted by Senator Tim Johnson
                strategic capital investment plan (10-year plan)
        Question. Mr. Secretary, the budget release was accompanied by the
    Department's Strategic Capital Investment Plan (SCIP). This plan
    outlines the Department of Veterans Affairs' (VA's) capital needs
    totaling between $55 and $60 billion over 10 years. Yet the VA is
    estimating it will spend a combined $720 million less on all of its
    construction programs in fiscal year 2012 than in fiscal year 2011.
        How do you plan to achieve completion of the plan if budget
    requests continue to shrink?
        Answer. The intent of the SCIP process is to provide, for the first
    time, a comprehensive and complete picture of VA's current inventory
    and outline the steps needed to enable VA to continually improve the
    delivery of benefits and services to veterans, their families, and
    their survivors. The fiscal year 2012 SCIP process identified $53-$65
    billion in cost estimates over the course of the 10-year planning
    horizon.
        The SCIP plan provides a rational, data-driven strategic framework
    to ensure all capital investments are focused on the most critical
    infrastructure needs first and funded in priority order. Safety and
    security is the criteria with the highest weight so projects that have
    the greatest impact in this area typically rank high and are included
    in our budget request. For example the highest ranking major
    construction projects address seismic issues at West Los Angeles and
    San Francisco, California, and Reno, Nevada. Furthermore, because the
    plan is data-driven and prioritizes projects based on identified needs,
    it ensures that VA uses the best value solutions to provide the highest
    quality benefits and services to veterans, their families, and
    survivors. The SCIP process also emphasizes the use of noncapital
    solutions to close gaps.
        VA's fiscal year 2012 budget submission reflects choices that are
    made each year balancing the construction needs identified in the SCIP
    10-year plan with other VA priorities. The advantage to the SCIP
    process is that the plan focuses resources on the highest capital asset
    priorities.
                      veterans benefits management system
        Question. Mr. Secretary, the Department has been in the process of
    developing its new paperless claims processing system--or Veterans
    Benefits Management System (VBMS)--for several years now. I understand
    that the first phase of VBMS is currently being tested at the VA in
    Providence, Rhode Island.
        Can you tell us when you expect this system to be fully deployed?
        Answer. The VBMS initiative involves business transformation
    efforts coupled with incremental technology releases to modernize the
    benefits adjudication process. There are three successive phases that
    are designed to develop and test process improvements and VBMS
    technology solutions in a production claims setting. Full national
    deployment is scheduled to begin in calendar year 2012, with completion
    projected in calendar year 2013.
        As you have pointed out, VBMS is a critical part of your
    transformation initiative and seems to be one of the key pieces in your
    plan to eliminate the claims backlog and wait times.
        Question. When can we expect to see tangible results from this
    system?
        Answer. National deployment of VBMS will begin in calendar year
    2012, with a staggered rollout to regional offices. Regional offices
    will deploy VBMS in groups of three to five offices. Offices should
    expect to see tangible results within 6-9 months postdeployment as they
    work through their existing inventory of paper-based claims and
    transition to the paperless environment. All offices in the Veterans
    Benefits Administration are projected to transition to VBMS by the end
    of calendar year 2013.
        Question. In other words, when will this system actually lower the
    average time a vet has to wait for a claim to be processed?
        Answer. As VBMS is deployed in small groups, processing times for
    those regional offices will be reduced as they work through the paper-
    based inventory and transition into the paperless environment. Veterans
    should expect to see a reduction in processing time within 6-9 months
    of their regional office of jurisdiction transitioning to VBMS.
    Ultimately, VBMS will provide the technology solution to achieve the
    goal of no veterans waiting more than 125 days for a quality decision
    on their claim.
        Question. The VA was a pioneer in the development of electronic
    health records. However, the current system was designed in the 1980s
    and needs to be updated. The Department of Defense (DOD) is in the same
    boat. Over the years, this subcommittee has strongly encouraged both
    Departments to develop systems based on the same designs so that each
    aren't reinventing the wheel and doubling the cost to taxpayers.
        Have you and Secretary Gates made a decision to pursue systems
    based on the same architecture?
        Answer. Yes. In a meeting on May 2, 2011, Secretary Shinseki and
    Secretary Gates agreed to pursue a joint electronic health record.
        Question. If not, why not, and if you have, when will development
    begin?
        Answer. DOD Secretary Gates and VA Secretary Shinseki formally
    agreed on March 17, 2011, that the two Departments will work
    cooperatively toward a common electronic health record (iEHR). The iEHR
    is currently in the early planning phases. Planners have agreed to
    transform the team structure to best support the proposed governance
    model.
                                 medicare rates
        Question. Mr. Secretary, the VA is moving toward charging Medicare
    rates for certain services. I believe you are in the process of
    shifting to that model with dialysis right now and your budget assumes
    that you will also begin doing the same with ambulatory services in
    fiscal year 2012. There has been concern raised that moving to the
    lower Medicare rates could disrupt services for vets, especially in
    rural areas.
        How do you plan to ensure that services for vets are not disrupted?
        Answer. Dialysis is a service provided by VA as part of the
    veterans medical benefits package, and VA provides dialysis treatment
    within VA or by purchasing dialysis treatments from non-VA providers
    when such care is unavailable internally. VA is currently evaluating
    the risks associated to veteran access and VA costs if large provider
    groups decide to not accept veterans at the Centers for Medicare &
    Medicaid Services (CMS) rates. We believe many, if not most, providers
    will accept the CMS rates as these are the same rates reimbursed by
    other Federal payers. As a result we anticipate that there will be
    little to no impact on access to care for veterans. If we observe any
    negative impact new contractual agreements may be utilized to ensure
    our veterans continue to receive dialysis services closer to home. If
    contracts are required, VA will work in those specific areas to ensure
    no negative impact to access for these healthcare services.
                         black hills health care system
        Question. Secretary Shinseki, 1 year ago, as rumors were swirling
    in South Dakota about changes to the Black Hills Health Care System,
    you assured me that before any final decisions were made, the VA would
    hold local town hall meetings to receive input from veterans and
    employees. I noticed that in the Department's SCIP, a project to build
    a new domiciliary in Rapid City, South Dakota, ranked No. 7. Such a
    project would have a significant impact on the Hot Springs VA campus
    and the Hot Springs community, where the domiciliary is located. I also
    understand there are efforts underway to expand the Rapid City
    community-based outpatient center.
        Secretary Shinseki, what is the VA's overall, long-term plan for
    the Black Hills Health Care System?
        Answer. We are working to develop a feasible long-term plan for VA
    Black Hills that aligns services to veterans needs and locates more
    services closer to where the larger groups of veterans live.
    Demographic changes and migration of veterans, jobs, and other services
    to larger population centers in western South Dakota and northwestern
    Nebraska are forcing us to evaluate whether the current service
    configuration and locations of care are appropriate for optimal service
    to veterans both now and in the future. I can assure you that prior to
    any final decisions being made about Black Hills, veterans and
    stakeholder input will be received.
        Question. When will this be communicated to the veterans and VA
    staff in the Black Hills?
        Answer. No specific plan for re-configuration has been presented to
    the Secretary at this time. As options are developed, VA will ensure
    that all stakeholders, including veterans, Members of Congress, service
    organizations, employees, and the community are included in the
    discussion.
                                     ______

                 Question Submitted by Senator Mary L. Landrieu
                                contingency fund
        Question. In the current fiscal environment, it is important that
    we look for inventive solutions to meet the needs of our growing
    veteran population while remaining fiscally responsible. We are also at
    a time when transparency is paramount in the way that we build and
    execute our budgets. I would like to commend Secretary Shinseki for
    innovative use of a contingency fund for veterans medical services.
        Based on this backdrop, what are the trigger points that would
    warrant the use of the $940 million contingency fund?
        Answer. Section 226 of the Administrative Provisions proposed in
    the 2012 President's budget states that:

    ``. . . such funds shall only be available upon a determination by the
    Secretary of Veterans Affairs, with the concurrence of the Director of
    the Office of Management and Budget, that:
      (a) The most recent data available for:
        (1) National unemployment rates,
        (2) Enrollees' utilization rates, and
        (3) Obligations for Medical Services,
    validates the economic conditions projected in the Enrollee Health Care
    Projection Model, and
      (b) Additional funding is required to offset the impact of such
            factors.''
                                     ______

                   Questions Submitted by Senator Ben Nelson
                      medical certification and employment
        Question. I recently met with a group of Iraq and Afghanistan
    veterans, two of whom were medically trained personnel who served on
    the front lines treating injured servicemembers. When they separated
    from the military, these veterans tried to continue their medical
    service in the community, but found that they lacked the State and
    local certifications to secure a job. Now both of these vets are
    unemployed and are faced with the decision to take 1 year or more,
    using their GI Bill benefits, to go through certification programs for
    skills they may already have. This seems to me to be a misutilization
    of two great resources: our combat veterans who have great training and
    real-world experience, and our GI Bill funds which may be paying for
    duplicate training. I understand it is not just our medical personnel
    who are facing this dilemma, this problem crosses multiple disciplines,
    including mechanics, firefighters, military police, etc.
        Has the VA looked into this particular issue of specialized fields
    that require certification and what could perhaps be done for veterans
    to capitalize on their military training and service, so that we aren't
    duplicating money, time and training for the same specialties?
        Answer. The Veterans Health Administration (VHA) staff is actively
    engaged with the Office of Personnel Management, and participated in a
    March 29, 2011, mini-summit on this issue. The purpose of the summit
    was to better understand the environment affecting veterans and
    transitioning servicemembers with medical backgrounds seeking Federal
    nursing positions. Additionally, there was discussion regarding the
    creation of a career track to assist and guide these former medics and
    corpsmen who desire Federal nursing careers. Executives from VHA are
    assigned and actively working on subgroups to assist in developing
    strategies to improve recruitment into nursing and other allied health
    occupations. Federal agencies, colleges and universities, and other
    organizations are collaborating on these teams to identify potential
    solutions.
        Qualification standards for nursing and some other occupations do
    require that candidates be licensed and/or credentialed to practice in
    their fields. Licensing standards traditionally rest with organizations
    external to VHA.
        GI Bill benefits may be used to pay the costs associated with
    licensing and/or certification. If specific additional training is
    required to achieve a license or certification, the GI Bill could also
    be used for that training.
        Question. What are we doing to help our veterans translate their
    military service into the civilian workforce?
        Answer. The Department of Veterans Affairs (VA) will work with the
    Departments of Defense and Labor, accrediting agencies, and certifying
    bodies to ensure that the training and work experience that
    servicemembers receive will be acceptable for civilian employment.
        At the present time, all schools and programs approved for VA
    education benefits must have processes in place to grant credit for
    prior training and experience. Each individual student's records must
    be evaluated, and credit granted as appropriate. Schools and programs
    make the final determination of whether a student will receive credit
    for prior training and experience.
        Additionally, vocational rehabilitation and employment (VR&E)
    counselors meet individually with each veteran or servicemember seeking
    our services to assess their rehabilitation needs, set employment
    goals, and determine the most effective means to achieve successful
    outcomes.
        As part of a comprehensive assessment, VR&E counselors conduct a
    transferable skills analysis to determine how an individual's previous
    education or experience may be used to qualify for employment in a
    similar occupation or related field. As a result of the assessment, the
    individual may be able to identify a shorter path to suitable
    employment that is compatible with his or her interests, aptitudes, and
    abilities. The individual and the VR&E counselor may develop a
    rehabilitation plan focused on VR&E's rapid access to employment track.
    VR&E provides employment assistance services that include short-term
    training or certification examinations, if needed to qualify for
    employment in the chosen occupation.
        If the comprehensive assessment indicates that a longer period of
    education or training is needed to prepare for competitive employment,
    VR&E can help with transitional employment while the individual
    participates in VR&E's long-term services track. Depending on the
    individual's financial needs and the rate of pursuit of training,
    assistance may be provided through a work-study position or through job
    placement services focused on supplementing the monthly subsistence
    allowance with full-time or part-time work that would not interfere
    with completion of the rehabilitation plan.
                                     ______

                   Questions Submitted by Senator Mark Pryor
                                    savings
        Question. On March 1, 2011, the Government Accountability Office
    (GAO) released a report with recommendations to reduce duplication and
    save money across almost every Federal agency. On March 8, 2011, I sent
    letters to various agencies asking them to review the recommendations
    and report back to me regarding whether or not the agency agrees with
    GAO's findings and advise me of any actions taken or planned to be
    taken to address GAO's findings. I sent a letter to the Department of
    Veterans Affairs (VA) but have not gotten a response. GAO had three
    specific areas for the VA to look at.
        Opportunities for the Department of Defense (DOD) and the VA to
    jointly modernize electronic health record systems.
        Answer. The VA is responding to Senator Pryor's letter. In a
    meeting on May 2, 2011, Secretary Shinseki and Secretary Gates agreed
    to pursue a joint electronic health record. This is a complex, large-
    scale effort to modernize the health records systems of the two
    Departments in a manner that will allow for unprecedented amounts of
    data-sharing. This effort will produce enormous cost-savings for
    taxpayers over the long term through the use of large-scale
    efficiencies.
        The integrated electronic health record (iEHR) when completed, will
    be a national model for capturing, storing, and sharing electronic
    health information, and will eliminate the costly duplicative medical
    testing that typically occurs as Active-Duty service personnel
    transition out of the military and over to VA healthcare facilities for
    medical care.
        Question. The need to control drug costs and increase joint
    contracting when cost-effecting within the VA and DOD.
        The VA and DOD currently have 88 joint national generic
    pharmaceutical contracts. The VA/DOD joint contracting subcommittee of
    the Federal Pharmacy Executive Steering Committee (FPESC) is focusing
    on increasing this number. There are currently 30 joint proposed
    contracts undergoing clinical review, and 8 joint pending contracts in
    various stages of contracting at the National Acquisition Center. It
    should be noted that because VA and DOD contract requirements can be
    extensive, a joint contract may actually decrease the number of bids
    and may result in no award.
        Under the current formulary management systems, the opportunity for
    VA/DOD joint national contracting for pharmaceuticals is limited to
    generic drugs. Alteration of the structure of one or both formulary
    systems used by VA and DOD would be required in order to increase joint
    contracting opportunities for branded drugs; requiring legislative and/
    or regulatory changes. The FPESC subcommittee for joint contracting
    will continue to review both new and existing drugs for the possibility
    of joint contracting. The DOD and VA will continue to optimize joint
    contracts for generic drugs as joint contracts are currently in
    negotiations for previous blockbuster drugs such as losartan,
    tamsulosin, and ramipril.
        Question. The need to improve cost-effectiveness and enhance
    services for transportation-disadvantaged persons. Have you had a
    chance to look at these recommendations? What are your thoughts on
    them?
        Answer. The VA has included the VA Beneficiary Travel Program as
    part of its Health Care Efficiency Initiative. The program has been
    closely reviewed and areas for improvement identified with revised
    policy, procedures, and technical solutions currently being implemented
    that will result in improved efficiencies and cost-savings in the
    provision of this benefit.
        VA recently initiated the Veterans Transportation Service (VTS)
    which seeks to overcome barriers to access, especially for veterans who
    are visually impaired, elderly, or immobilized due to disease or
    disability, and those living in rural and highly rural areas. VTS will
    increase transportation resources and options for all veterans, but
    also focus on improving efficiency of existing transportation resources
    through use of 21st century technology including ridesharing software
    and global positioning system (GPS) units. The program is established
    at four sites and is currently being implemented at an additional 22
    facilities.
        In addition to the long-standing collaborative effort with the
    Disabled American Veterans' Veterans Transportation Network that
    provides transport to veterans otherwise not eligible for beneficiary
    travel, VA is drafting regulations and procedural guidance to implement
    section 307 of Public Law 111-163, which authorized a program of grants
    for veterans service organizations to provide transportation services
    to highly rural veterans. This program will allow VA to support
    veterans service organization efforts to provide innovative means to
    transport veterans to healthcare. Once the program is operational,
    access to VA healthcare will increase for certain veterans currently
    experiencing barriers to VA healthcare due to transportation issues.
        VA currently utilizes public and commercial transport services for
    both special mode (ambulance, wheelchair van, etc.) and common carrier
    (bus, taxi, airplane, train, boat, or ferry) transportation of eligible
    beneficiaries. Veterans integrated service networks and individual
    healthcare facilities are encouraged to enter into contracts for such
    services whenever possible. They also have authority to arrange
    services on an individual basis as required, and to reimburse for
    transport not previously authorized in certain circumstances. Field
    stations are encouraged to explore all available local, regional,
    State, and Federal transportation resources to provide services to
    eligible veterans at VA expense, as well as to assist veterans who do
    not meet beneficiary travel eligibility with potential transportation
    options.
        In addition, as an agency member of United We Ride, VA is working
    with the Departments of Labor, Defense, and Transportation (among
    others) on a veterans initiative that will make it easier for veterans,
    military families, and other community members to learn about and
    arrange for locally available transportation services that connect them
    with work, education, healthcare, and other vital services.
                                  homelessness
        Question. In the Department's fiscal year 2012 budget proposal, the
    administration requests a 17.5-percent increase in funding for programs
    that prevent and reduce homelessness among veterans. Part of this
    increase includes additional funding to better coordinate case
    management with the Department of Housing and Urban Development (HUD)
    through the HUD-Veterans Affairs Supported Housing (HUD-VASH) program.
    In the recently released GAO report on duplicative Government programs,
    GAO found that there are seven Federal agencies and more than 20
    programs that address homelessness and that better coordination would
    minimize fragmentation and overlap.
        How are you coordinating with the other agencies involved in
    addressing homelessness?
        Answer. To eliminate homelessness among veterans, VA must
    coordinate these and other efforts with internal and external
    stakeholders. This strategy is a cornerstone of VA's Plan to End
    Homelessness Among Veterans. VA, along with other Federal partners and
    key stakeholders, has been an active participant in the planning and
    implementation of the U.S. Interagency Council on Homelessness's
    (USICH's) Federal Strategic Plan to Prevent and End Homelessness. Both
    VA and USICH plans require close partnerships with Federal, State,
    local, and tribal governments; faith-based, nonprofit, and private
    groups; outreach to veterans, people, and organizations providing
    services to veterans and the general public.
        The strong partnership and coordination between VA and HUD is
    evidenced by the implementation and expansion of the HUD-VASH program
    and VA's participation in the 2011 Point in Time Count. The coordinated
    efforts between HUD, VA, and the Department of Labor (DOL) are also
    demonstrated in the HUD-VA Homelessness Prevention Pilot. This 3-year
    pilot is a partnership among VA, HUD, DOL, and local community agencies
    to provide housing assistance and supportive services to veterans
    returning/transferring from military service in the following
    locations:
      --MacDill Air Force Base in Tampa, Florida;
      --Camp Pendleton in San Diego, California;
      --Fort Hood in Killeen, Texas;
      --Fort Drum in Watertown, New York; and
      --Joint Base Lewis-McChord near Tacoma, Washington.
        At VA's National Forum on Homelessness Among Veterans Conference
    held in December 2010, each VA Medical Center (VAMC) was charged with
    holding a homeless veteran summit to confer with key partners in VA's
    efforts to end homelessness among veterans. Key partners of these local
    homeless veteran summits included local public housing authorities,
    Continuums of Care, HUD, DOL, State VA Departments, other key Federal,
    State, and local organizations. These meetings enabled VAMC leadership,
    staff, and local organizations to determine ways to more efficiently
    and effectively assist homeless veterans in accessing needed supportive
    services and suitable permanent housing in order to achieve and
    maintain stabilization. More than 170 local summits have been held
    since January 1, 2011. These summits have improved existing
    partnerships and assisted in building new partnerships.
        Also at this conference, each VAMC was directed to participate in
    the 2011 Point in Time Count of the homeless held in January 2011, and
    in their local Continuum of Care. These directives have served to
    foster closer cooperation and collaboration between VA staff and
    community providers, including those in rural areas. These meetings
    will continue and further strengthen the ability of VA and other
    housing and service provider partners to effectively work together to
    end homelessness among veterans.
        VA's Community Homelessness Assessment, Local Education and
    Networking Groups Program (CHALENG) is an innovative program designed
    to enhance the Continuum of Care for homeless veterans provided by the
    local VA and its surrounding community service agencies. The guiding
    principle behind Project CHALENG is that no single agency can provide
    the full spectrum of services required to help homeless veterans become
    productive members of society. Project CHALENG enhances coordinated
    services by bringing the VA together with community agencies and other
    Federal, State, and local governments who provide services to the
    homeless to raise awareness of homeless veterans' needs and to plan to
    meet those needs. The fiscal year 2009 CHALENG report indicates that
    local VAMCs have established almost 4,000 formal and informal
    collaborative agreements to serve homeless veterans.
                                    research
        Question. The administration is requesting $509 million for medical
    and prosthetic research for fiscal year 2012, which is $72 million less
    than the 2010 levels. I've had several veteran service organizations
    express concern regarding this drop in funding given the type and
    number of injuries we see sustained by returning veterans.
        Can you address how your agency is addressing these concerns and
    the current efforts being made in these areas?
        Answer. VA supports research projects based on merit review, and
    within the fiscal year 2012 budget, VA will support approximately 135
    fewer projects from all services when compared with the fiscal year
    2010 level. While there will be fewer projects, VA will continue to
    emphasize research on deployment and veteran-specific health issues.
    Areas of particular focus, such as gulf war veterans illnesses, women
    veterans, and mental health, will be preserved or increased, with the
    reductions being realized across the board in other areas.
        VA's Office of Research and Development is adopting International
    Organization of Standardization (ISO) 9001 principles to increase
    management efficiencies in conducting clinical trials. The ISO is
    widely considered to be the standard for efficient and effective
    management systems. These improvements will further reduce the cost of
    performing clinical trials by reducing administrative costs and
    streamlining processes.
                                     ______

                    Questions Submitted by Senator Mark Kirk
                       unemployment rate (milliman model)
        Question. Mr. Secretary, in last year's budget submission, the
    Department of Veterans Affairs (VA) requested $50.611 billion in
    advance appropriations for its medical care accounts in fiscal year
    2012. However, the Department has since informed us that its budget
    estimates were based on 2008 actuarial data that did not account for a
    high unemployment rate. This year's request includes an additional $953
    million for veterans' medical care, appropriated as a ``Contingency
    Fund,'' if the Department needs additional resources due to high
    unemployment. However, we have no information about how unemployment
    has affected the fiscal year 2013 advance request.
        Is the unemployment rate a factor in the 2013 advance request; if
    so, what is the assumed unemployment rate; and do you expect to submit
    a revised request for 2013 based on economic conditions?
        Answer. Our actuarial model projection run for fiscal year 2013
    assumed an unemployment rate of 7.4 percent. The budgetary impact of
    this economic factor on VA medical care for fiscal year 2013 will be
    considered during the development of the fiscal year 2013 President's
    budget, similar to the update of the fiscal year 2012 estimate in the
    fiscal year 2012 budget submission.
                               claims processing
        Question. Mr. Secretary, one of the biggest problems facing the
    Department is claims processing. Since 2007, this subcommittee has
    provided $277 million in additional resources for extra claims
    processors, plus $150 million in stimulus funding, in order to
    accelerate adjudications and reduce the disability claims backlog. Yet
    the stubborn fact remains that the Department hasn't been able to get
    its arms around this enormous problem. This budget predicts that
    average adjudication times and the disability claims backlog will be
    the worst they've ever been, with average adjudication times increasing
    from 165 days to 230 days in only 2 years due to the influx of Agent
    Orange claims.
        What is it in this process that takes so much time? Do you need
    legislative fixes? New regulations? Or is it simply that the Department
    hasn't yet been able to balance new technologies with its claims
    processing method?
        Answer. The number of disability claims received continues to
    increase at record pace. This challenge is due to a number of factors,
    including:
      --The addition of three presumptive conditions associated with
            exposure to Agent Orange;
      --VA's successful outreach efforts;
      --The return of servicemembers from Iraq and Afghanistan;
      --More complex medical issues; and
      --An increasing number of issues claimed by each veteran.
        VA is confident that our transformation efforts will enable us to
    eliminate the claims backlog in 2015. The cornerstone of VA's claims
    transformation strategy is the Veterans Benefits Management System
    (VBMS). VBMS integrates a business transformation strategy to address
    process and people with a paperless claims processing system. Combining
    a paperless claims processing system with improved business processes
    is the key to eliminating the backlog and providing veterans with
    timely and quality decisions.
        Question. I understand that the Department hopes to roll out the
    VBMS to revolutionize the disability benefits claims process. But given
    the Government's history of developing IT projects, I just want to be
    sure we're not pinning all our hopes on one IT program to solve all of
    these problems. Is that what we're doing?
        Answer. We believe that VBMS will be a valuable tool in eliminating
    the backlog starting in 2012. Evolving to a paperless process is
    essential, but we are aggressively pursuing our claims transformation
    initiatives right now, in order to lay the technological and business
    transformation groundwork to streamline claims processing and eliminate
    the claims backlog. Our end goal is a smart, paperless, electronic
    claims processing system.
        While we work to develop the paperless system, we are making
    immediate changes to improve the efficiency of our business activities.
    New calculators for certain medical conditions guide claims
    decisionmakers with intelligent algorithms similar to tax preparation
    software or through simple spreadsheet buttons and drop-down menus. A
    growing body of evidence-gathering tools, called disability benefits
    questionnaires, brings new efficiencies to collection of medical
    information needed to rate each claim. The Fully Developed Claims
    Program speeds the decision process by empowering veterans and helping
    them submit claims that are ready for VA decision as soon as they are
    received.
        Question. Are you looking at making it easier for veterans to
    clearly know what documentation he or she needs to submit to the VA
    when making a particular disability claim, and thereby simplifying the
    back-and-forth between the veteran and the Department that consumes
    much of the adjudication process?
        Answer. VA has implemented several initiatives designed to inform
    and help veterans with their claim submissions. Three disability
    benefits questionnaires are available online, and more on the way, for
    veterans to provide to their private or VHA physician. Each disability
    benefits questionnaire is for a specific condition, and the questions
    guide the physician's response to ensure we receive the data we need to
    make a decision on the veteran's claim.
        VA also offers an online application system, Veterans Online
    Application, that is accessible through e-Benefits and the VA Web site.
    The application system allows a veteran to file a claim for
    compensation, pension, education, or vocational rehabilitation and
    employment benefits.
        VA implemented the Fully Developed Claims Program, partnering with
    veterans service organizations to assist veterans in submitting
    everything VA needs at the time of their application. VA is working to
    improve its processes with a goal of completing fully developed claims
    within 90 days of receipt.
        In addition, the Veterans Claims Assistance Act requires VA to
    notify all claimants of the information and evidence necessary to
    substantiate their claims, which portion of the information and
    evidence VA will try to obtain for them, and which portion they are
    expected to provide.
                                 north chicago
        Question. Mr. Secretary, one of my biggest priorities since I
    entered the Congress has been the Captain James A. Lovell Federal
    Health Care Center (FHCC), a first-of-its-kind partnership between the
    VA and the Department of Defense (DOD) to fully integrate all medical
    care into a single mission. The facility not only integrates the two
    facilities, but also serves 40,000 Navy recruits, 67,000 military and
    retiree beneficiaries each year, and veterans throughout northern
    Illinois and southern Wisconsin. I look forward to working with you to
    make sure this first-of-its-kind partnership with the DOD is a success.
        Can you provide me with an update on this facility, how has
    integration gone thus far, and do you view it initially as a success?
        Answer. As of May 5, 2011, after 216 days, the James A. Lovell FHCC
    continues to work through the change management processes as the new
    organization evolves. The FHCC is currently meeting the needs of all
    beneficiaries. Because there are no shortages of clinicians, healthcare
    providers at the FHCC currently serve all beneficiaries not requiring
    urgent or emergent care on a first come, first served basis. As of
    April 2011, the facility does not have a wait list for patient access.
    The close monitoring of Navy recruit medical readiness ensures we are
    able to maintain the ``pipeline to the fleet'' of enlisted sailors.
    Integration is completed in a number of areas and the new ambulatory
    care facility is fully operational. The joint governance structure was
    fully implemented on October 1, 2010. Information management/
    information technology (IT) efforts are beginning to yield successful
    results, in particular in joint registration and single medical sign on
    for both DOD and VA record systems. Successes and lessons learned from
    FHCC are helping to contribute the way forward of an integrated
    electronic health record (iEHR) maximizing joint interoperability of
    records and care for the DOD and VA beneficiaries.
        The FHCC is continuing the development of an integrated budgeting
    and financial reconciliation process. For fiscal year 2011 through
    fiscal year 2013, the FHCC plans to use historical financial data to
    budget and determine the amount each department will transfer to the
    Joint Fund and expects to manually conduct the year-end reconciliation
    process. By fiscal year 2014, the FHCC plans to have an automated year-
    end financial data reconciliation process. However, as of April 2011,
    the integration of fiscal authority had not been fully implemented
    because there was no legal authority to transfer appropriations to the
    Joint Fund. For fiscal year 2011, the FHCC is being funded through an
    alternative funding mechanism (resource-sharing agreement) established
    by the executive agreement. However, with funding now authorized for
    transfer to the Joint Fund, the FHCC will be funded through the Joint
    Fund beginning July 1, 2011.
        In the workforce management and personnel integration area, 469 DOD
    civilian personnel were transferred to VA as of October 10, 2010--the
    deadline established in the executive agreement. FHCC completed
    integration of the staff training programs through an integrated
    education department, as stated in the executive agreement. One
    component of staff education is the maintenance of medical and dental
    skills for the FHCC's Navy healthcare providers. One of the benefits of
    the integration is that dental school graduates obtaining advanced
    education in the Navy can see Veteran patients while completing their
    residencies and have opportunities to be exposed to different dental
    conditions than those normally seen in the generally younger and
    healthier recruit population. This is especially helpful training for
    dentists who will be placed on ships, where they are often the only on-
    site dentist. There is a similar benefit for healthcare professionals
    providing inpatient care.
        GAO is conducting a study of the Lovell FHCC due to the Congress
    this summer and DOD contracted the Institute of Medicine to evaluate
    whether the integrated DOD/VA healthcare facility in North Chicago is
    more beneficial to DOD and VA than their independent facilities in
    serving the needs of their eligible populations. The Institute of
    Medicine is expected to evaluate health outcomes, patient satisfaction,
    provider satisfaction, quality of care, and costs of care and prepare a
    written report with findings, conclusions, and recommendations for DOD
    and VA that will be available to the general public in 2012.
        Question. As I understand it, the VA and the DOD have pledged $100
    million for an IT project at this unique facility to allow their
    medical software communicate with one another. Can you provide me with
    an update on that project?
        Answer. In a meeting on May 2, 2011, Secretary Shinseki and
    Secretary Gates agreed to move forward with joint solutions for the
    remaining capabilities not yet delivered at the Captain James A. Lovell
    FHCC. The refined implementation will be informed by the work being
    done on the iEHR Way Ahead.
        The current status of the IT projects is:
      --Medical single sign-on with context management:
        --Production: December 13, 2010;
        --Current status: Sustainment;
      --Single patient registration:
        --Production: December 13, 2010;
        --Current status: Maintenance and enhancements;
      --Pharmacy (iEHR):
        --Current status: On-hold pending iEHR business policy review: July
                7, 2011;
      --Laboratory and radiology orders:
        --Production Limited/Controlled: March 2011;
        --Current status:
          -- Radiology:
             -- Production: Projected to go live June 15, 2011;
             -- Current status: Preparing for live production;
          -- Laboratory:
             -- Production: Projected full production July 15, 2011;
             -- Current status: Currently in limited production to a
                controlled number of physicians.
        Question. That brings to me a larger question about joint
    collaboration between the DOD and the VA. As I understand it, each
    Department is in the process of developing its own electronic medical
    record at a cost of billions of dollars to taxpayers. However, GAO
    recently reported the departments lack the mechanisms to jointly
    address collaborative opportunities for common development. I want to
    be sure that DOD and VA aren't on separate, parallel tracks that
    duplicate costs.
        Are the Departments working together on these massive efforts, and
    has everyone agreed to build to the same standards, and where have you
    identified potential economies of scale for joint development?
        Answer. Yes. The VA and the DOD are working together to jointly
    develop an electronic health record that will provide information to
    both agencies about our soldiers, sailors, airmen, and veterans. Both
    agencies have agreed to consolidate data where applicable, use common
    services, and develop a joint platform in order to realize economies of
    scale.
        Question. One approach that would make sense to me is for the
    Congress to require each Cabinet Secretary to certify that all new
    development on an electronic medical record is both interoperable
    between VA and DOD and that neither Department is reinventing the
    wheel. Do you have any response to that potential approach?
        Answer. The Secretaries of VA and DOD agreed to meet on a
    continuous basis to monitor and discuss the progress made on the joint
    electronic health record being developed by their staff. These
    recurring meetings will afford the Secretaries to continue to move
    forward with joint solutions for the remaining capabilities not yet
    delivered at the Captain James A. Lovell FHCC and to discuss and remove
    any impediments that stand in the way of making progress.
                                 staff offices
        Question. Mr. Secretary, as you well know, this country faces
    record-high deficits and debt, and we are now entering a period of
    fiscal restraint and budget cuts.
        So I couldn't help but notice that the Department's fiscal year
    2012 budget request proposes a record-high amount of $448 million for
    the VA's General Administration offices in Washington, DC. This amount
    is $51 million higher than in fiscal years 2010 and 2011. Now I
    understand that this increase includes a $23.6 million Office of
    Management and Budget initiative to reform the Federal Government's
    acquisition workforce, but I find this specific request disconcerting.
        To put this in some context, as recently as 2006, funding for VA
    central offices was $275 million. That's a 63-percent increase in the
    budgets for VA central offices since 2006.
        Question. Can you give us a compelling reason why these offices
    should be increased by $51 million over last year when almost all other
    agencies and Departments across our Government are taking painful
    budget cuts, particularly in their administrative overhead in
    Washington, DC?
        Answer. Much of this staff office increase is driven by new
    capabilities necessary to oversee and enhance enterprise-wide
    performance in critical areas such as safety and security,
    acquisitions, human capital and financial management. For example, the
    fiscal year 2012 request includes $23.6 million to increase the
    capacity and capability of VA's acquisition workforce. In addition,
    $2.9 million will be invested to enhance VA's Emergency Preparedness
    capability and to fully implement Homeland Security Presidential
    Directive 12. This will lead to improvements in veteran and employee
    safety and greater protection of VA facilities. Overall, staff office
    capability seeks greater enterprise-wide efficiency, accountability,
    and effectiveness.
        Question. Putting aside the $23.6 million Office of Management and
    Budget initiative to reform the Federal Government's acquisition
    workforce, can you please provide us with the impacts if General
    Administration remains at the fiscal year 2010 enacted level of $397.5
    million?
        Answer. The fiscal year 2012 budget supports the establishment of a
    corporate management infrastructure that will lead to greater
    accountability, efficiency, and effectiveness throughout VA. Some of
    the major investments that would not be supported at fiscal year 2010
    levels include the following:
      --Enhance VA's Emergency Preparedness capability and full
            implementation of Homeland Security Presidential Directive 12
            (HSPD-12) initiated August 27, 2004. This makes facilities
            safer for veterans and employees.
      --Increase the use of the Alternative Dispute Resolution (ADR)
            program which will lead to a safer work environment and provide
            cost-savings. Use of the ADR program in VA has increased to 55
            percent which VA estimates has resulted in $81 million in cost
            avoidance in 2010.
      --Build a facilities management system that will maximize life cycle
            performance and reduce project costs
      --Perform audits of the non-VA Care (fee) program expected to
            identify $4 million in improper payments and further cost
            avoidance.
      --Improve VA/DOD collaboration, and build a corporate analysis and
            evaluation process to improve analysis and data that drive
            corporate level decisions.
      --Establish the Office of Tribal Government Relations to increase
            Nation-to-nation partnerships and increase access and awareness
            and utilization rates of American Indian/Alaska Native veterans
            and their families.
      --Leverage new media tools to improve VA's ability to get the right
            information to the right veteran at the right time and
            incorporate their feedback
        In addition to strengthening corporate-level oversight, the General
    Administration account also funds the Board of Veterans Appeals (BVA)
    and the Office of General Counsel (OGC):
      --If the BVA were funded at the fiscal year 2010 level, this would be
            a reduction of $4.7 million below the budget request. BVA would
            need to reduce staffing by 35 full-time equivalents which would
            reduce the number of appeals decided by 5,460 cases and
            increase the time all veterans must wait for a final decision
            on appeals of their disability claims.
      --Funding OGC operations in fiscal year 2012 at the fiscal year 2010
            level would represent a reduction of $3.3 million and 24 full-
            time equivalents. That would adversely impact OGC's ability to
            keep pace with an increasing legal workload, including meeting
            litigation deadlines set by the U.S. Court of Appeals for
            Veterans Claims (so that veterans would wait longer for
            decisions), and also keep VA from timely issuing regulations to
            implement acts of the Congress.
                               polytrauma centers
        Question. Mr. Secretary, I want to commend the VA for the quality
    of its care to wounded veterans recovering at VA polytrauma centers. I
    understand that veterans in deep comas at VA polytrauma centers are
    returning to consciousness at a higher than average rate.
        Can you provide the subcommittee with a detailed background of this
    encouraging development?
        Answer. As veterans and servicemembers with catastrophic injuries
    started coming to the VA Polytrauma Rehabilitation Centers for care, it
    became apparent that patients who were slow to recover consciousness
    required a specialized clinical program to address their medical and
    rehabilitation needs. These patients require high complexity and
    intensity of medical services and associated resources in order to
    improve the level of responsiveness and decrease the occurrence of
    medical complications. Furthermore, there are few programs specifically
    designed for patients with disorders of consciousness outside of VA.
        VA charged a workgroup of subject matter experts from VA, Defense
    and Veterans Brain Injury Center, and the private sector to develop a
    specialized emerging consciousness program for veterans and
    servicemembers who are slow to recover consciousness after severe
    traumatic brain injury (TBI) and polytrauma. This is a clinical
    algorithm prescribing the main elements of the medical, nursing,
    therapy, technology, and family education and support services required
    for the care of patients in an emerging consciousness state. The
    Emerging Consciousness Program was implemented in 2007, and is
    continually updated to reflect advances in medical science.
        The VA Emerging Consciousness Programs at the Polytrauma
    Rehabilitation Centers maintain the highest standards of accreditation
    and certification for rehabilitation facilities awarded by the
    Commission on Accreditation of Rehabilitation Facilities. These
    programs admit both Active-Duty servicemembers and veterans with
    various forms of acquired brain injury, including TBI, anoxia (or lack
    of oxygen), stroke, and infectious causes (e.g., encephalopathy).
    Approximately 65 percent of the admissions have been Active-Duty
    servicemembers. Of the Active-Duty servicemembers, approximately 45
    percent were injured while serving in a foreign theater of operations.
    Mechanisms of injury have included combat injuries (blast,
    penetrating), motor vehicle collisions, violence, and metabolic damage
    from underlying medical conditions.
        Retrospective review of outcomes from 121 veterans with impaired
    level of consciousness admitted to the four Polytrauma Rehabilitation
    Centers from 2003 through third quarter of 2009 were compiled and
    analyzed using a research approved protocol. Results showed emergence
    from coma in 70 percent of veterans with blast related TBI, 85 percent
    of nonblast-related TBI, and 60 percent with anoxic brain injury. Of
    those who emerged, 75 percent did so by 4 months post-injury. These
    results were presented at the American Congress of Rehabilitation
    Medicine in October of 2010, and are being submitted to medical
    journals for publication.
                                     ______

                 Questions Submitted by Senator Mitch McConnell
                  kentucky community-based outpatient centers
        Question. Of the contract-run community-based outpatient centers
    (CBOCs) in Kentucky, what is the level of patient satisfaction with
    their care?
        Answer. [Follows:]

                                                  OVERALL SATISFACTION
                                                      [Percentage]
    ----------------------------------------------------------------------------------------------------------------
                                                                                                        Fiscal year
                                Facility                              September 2010    Fiscal year    2011 year-to-
                                                                                       2010 average        date
    ----------------------------------------------------------------------------------------------------------------
    Hopkinsville, Kentucky..........................................            89.6            55.3            53.3
    Bowling Green, Kentucky.........................................            28.7            49.5            41.1
    ----------------------------------------------------------------------------------------------------------------

        Question. How is this satisfaction measured, if at all?
        Answer. Satisfaction with Department of Veterans Affairs (VA)
    healthcare is measured using the Survey of Healthcare Experiences of
    Patients (SHEP). After a healthcare visit, veterans may receive a
    confidential questionnaire in the mail from VA's Office of Quality,
    Safety and Value asking about their satisfaction with recent outpatient
    or inpatient treatment at the specific medical center. The survey is
    used to communicate any concerns, complaints, compliments, or questions
    about the care received. Survey responses are compiled in the result of
    a SHEP score.
        To what extent are CBOCs provided incentives to provide good
    patient care?
        Answer. VA has the same high expectations for performance and
    quality for its CBOCs as for its VA Medical Centers (VAMCs). To enhance
    staff engagement in quality and process improvement, VAMC and CBOC
    providers' incentive pay incorporates metrics that reward meeting and
    exceeding VA-wide performance measures, and their performance plans
    incorporate performance accountability on these metrics. Performance
    measures that receive particular emphasis in provider evaluation
    include measures of veteran access and clinic management for common
    chronic conditions, such as diabetes, congestive heart failure, and
    pneumonia.
                                  homelessness
        Question. What is the VA doing to enhance efforts to locate
    homeless veterans and to help them?
        Answer. VA operates the largest system of homeless treatment and
    assistance programs in the Nation. The hallmark of VA's homeless
    programs is that they provide comprehensive care and benefits including
    medical, psychiatric, substance use, rehabilitation, dental care, and
    expedited claim processing for these veterans. In the past decade,
    major VA homeless initiatives on outreach, treatment, residential
    services, and vocational rehabilitation have touched the lives of tens
    of thousands of veterans. Outreach, especially to the homeless on the
    street, is an essential component of VA's plan to end homelessness
    among veterans. VA's outreach workers engage veterans in the community
    who are living on the streets and assist them to acquire appropriate
    services and housing. VA's outreach efforts are also essential in the
    prevention of homelessness. Identification of a veteran who may be at-
    risk of homelessness is crucial to keeping that veteran from falling
    into the cycle of homelessness.
        In fiscal year 2010, outreach teams from VA's Health Care for
    Homeless Veterans (HCHV) Program conducted more than 42,000 clinical
    assessments and the community-based residential treatment component of
    this program admitted more than 3,500 homeless veterans. VA provides
    homeless outreach at all 152 VAMCs and has several programs targeted
    toward outreach efforts.
        Health Care for Homeless Veterans.--The central goal of the HCHV
    Program is to reduce homelessness among veterans by conducting outreach
    to those who are the most vulnerable and are not currently receiving
    services and engaging them in treatment and rehabilitative programs.
    The HCHV Outreach Program has served approximately 90,237 veterans in
    fiscal year 2010 and more than 36,000 veterans during the first quarter
    of fiscal year 2011.
        The Health Care for Homeless Veterans Contract Residential
    Treatment Program.--The contract residential treatment component of the
    HCHV Program ensures that veterans with serious mental health diagnoses
    can be placed in community-based residential treatment programs which
    provide quality housing and services. HCHV provides ``in place''
    residential treatment beds through contracts with community partners
    and VA outreach and clinical assessments to homeless veterans who have
    serious psychiatric and substance use disorders. The HCHV Contract
    Residential Treatment Program has served 54,723 unique veterans since
    1987; approximately 3,519 veterans were served in fiscal year 2010.
        Stand Downs.--Stand downs are primarily focused on services. They
    are collaborative events, coordinated between local VAs, other
    Government agencies, and community agencies who serve the homeless.
    Over the years, stand downs have become increasingly crucial components
    in VA's efforts to outreach to homeless veterans. Since the first stand
    down was held in San Diego in 1988, literally tens of thousands of
    veterans have benefited from the array of services made available
    through these events. During fiscal year 2010, VA assisted in
    supporting 196 stand down events where 44,325 veterans were served.
    Thirteen sites held their first stand down in 2010.
        Supportive Services for Veteran Families Program.--The Supportive
    Services for Veteran Families (SSVF) Program will make available grant
    funds for community providers to help veteran families rapidly exit
    homelessness, or to avoid entering homelessness. In addition to
    providing linkage to VA healthcare and other services, grantee
    organizations will have the ability to directly address the type of
    emergent needs that, if unmet, can be deciding factors in a family's
    struggle to remain stably housed. Funds for emergency rental
    assistance, security, and utility deposits, food and other household
    supplies, child care, one-time car repairs, and other needs will help
    to keep veterans and their families housed--as families. A notice of
    funding availability was announced earlier this calendar year and the
    application period closed on March 11, 2011. VA is in the process of
    reviewing these applications and awarding grants. VA expects to
    announce awards in June 2011.
        Veterans Homelessness Prevention Demonstration Program.--The
    Veterans Homelessness Prevention Demonstration (VHPD) (also referred to
    as the HUD-VA Pilot Program) is designed to explore ways for the
    Federal Government to offer early intervention homeless prevention,
    primarily to veterans returning from wars in Iraq and Afghanistan. This
    demonstration program provides an opportunity to understand the unique
    needs of a new cohort of veterans and will support efforts to identify,
    outreach, and assist them to regain and maintain housing stability.
    This 3-year HUD-VA prevention pilot is a partnership among VA, the
    Department of Housing and Urban Development (HUD), the Department of
    Labor (DOL), and local community agencies. VHPD will serve the
    following locations:
      --MacDill Air Force Base in Tampa, Florida;
      --Camp Pendleton in San Diego, California;
      --Fort Hood in Killeen, Texas;
      --Fort Drum in Watertown, New York; and
      --Joint Base Lewis-McChord near Tacoma, Washington.
    As the lead agency, HUD is awarding grants for the provision of housing
    assistance and supportive services to prevent veterans and their
    families from becoming homeless, or reduce the length of time veterans
    and their families are homeless. HUD's Office of Special Needs
    Assistance Programs executed the grant agreements with the pilot site
    Continuum of Care grantees on February 3, 2011. The first veterans were
    seen on April 1, 2011.
        The National Call Center for Homeless Veterans.--The National Call
    Center for Homeless Veterans (NCCHV) was founded to ensure that
    homeless veterans or veterans at risk for homelessness have free, 24/7
    access to trained counselors. The hotline is intended to assist
    homeless veterans and their families, VAMCs, Federal, State, and local
    partners, community agencies, service providers, and others in the
    community. The NCCHV (1-877-4AID VET) was fully implemented on March 1,
    2010. From March 1, 2010, to February 28, 2011, there were 25,771 calls
    to the NCCHV. Of the calls received, 20,831 callers identified as
    veterans; 6,578 veteran callers identified as being homeless; and
    11,769 veteran callers identified as being at risk of homelessness.
        Veterans Justice Programs.--As part of VA's Plan to End
    Homelessness Among Veterans, VA is focused on serving veterans involved
    with the criminal justice system, who may be homeless or at risk for
    homelessness. In fiscal year 2010, the Health Care for Re-Entry
    Veterans Program and the Veterans Justice Outreach Program continued to
    provide outreach and linkage to services to justice-involved veterans
    at high risk of homelessness. Many of these vulnerable veterans were
    diverted from homelessness and provided healthcare, residential, and
    benefits assistance. Studies have shown that for adult males,
    incarceration is the most powerful predictor of homelessness (Burt et
    al., 2001). The Health Care for Reentry Veterans (HCRV) Program
    provides outreach and linkage to post-release services for veterans in
    State and Federal prisons; HCRV specialists have provided reentry
    services to 24,244 reentry veterans since fiscal year 2008. The
    Veterans Justice Outreach (VJO) Program focuses on veterans in contact
    with law enforcement, jails, and courts, including the rapidly
    expanding veterans treatment courts. VJO specialists have served a
    total of 8,004 justice-involved veterans since the start of the
    program.
        National Homeless Registry.--Although not a program itself, VA's
    comprehensive Homeless Registry is intended to provide up-to-date
    information about the prevalence of homelessness among veterans and key
    demographics of the homeless veteran population seen in VA homeless
    programs. The registry is also intended to provide information
    regarding VA homeless programs, enabling VA to identify and monitor
    program utilization and treatment outcomes. VA is working with other
    Federal partners to expand this capability. The registry includes
    information on more than 367,230 veterans, and includes data from 2006
    to the present.
        VA and community partners participated in the 2011 Homeless Point
    in Time (PIT) Count conducted by the local Continuums of Care.
    Participation and engagement of VA staff during the PIT Count ensured
    that homeless veterans were provided immediate information about VA
    services and programs.
        VA continues efforts to identify and contact homeless veterans,
    improve access to services, create new connections both within and
    outside VAMCs, and educate healthcare providers and veterans regarding
    VA homeless services and benefits.
        Women Veterans.--Women veterans make up nearly 6 percent of
    homeless veterans. Eleven percent of those accepted for Federal housing
    vouchers are women. In addition, women veterans are more likely than
    nonveteran women to become homeless. Risk factors for homelessness
    among women veterans include mental health conditions, substance abuse,
    and a prior experience of military sexual trauma. The Women Veteran's
    Health Strategic Healthcare Group is developing a screening instrument
    to identify women veterans at risk of homelessness. This screening
    instrument will identify women at risk, before they become imminently
    homeless, and enable efficient and timely referral to social and mental
    health services.
        Question. What more can be done in this area?
        Answer. The VA National Center on Homelessness Among Veterans
    (NCHV) has adopted a research agenda with a focus on the epidemiology
    of homelessness among veterans and the effectiveness of services
    intended to prevent and end homelessness among veterans. These studies
    are aimed at closing gaps in the research related to the prevalence of
    homelessness among veterans, characteristics of veterans who experience
    homelessness, and factors that predict homelessness among veterans as
    well as veterans' utilization of services and whether these services
    are both efficient and effective.
        The initial studies conducted by the NCHV are focusing on
    developing a definitive count of homeless veterans. The NCHV
    collaborated with HUD to develop Veteran Homelessness: A Supplemental
    Report to the 2009 Annual Homeless Assessment, Report to Congress
    February 2011 which provides a point-in-time count of homeless veterans
    in the United States, as well as the characteristics and locations of
    homeless veterans. An additional investigation by the NCHV of the
    prevalence and risk of homelessness among veterans in a selection of
    communities provides more detailed analyses of homelessness risk. These
    studies suggest that veterans are over-represented in the homeless
    population. Specifically, the multi-site investigation found that,
    after controlling for poverty, age, race, and geographic variation,
    female veterans were three times as likely as female nonveterans to
    become homeless, and male veterans were twice as likely as male
    nonveterans to become homeless.
        Another study underway will identify specific risk factors for
    homelessness among veterans in order to accurately prioritize
    prevention resources for those who are at imminent risk of
    homelessness. The NCHV is developing a homelessness risk assessment,
    which will be piloted in a variety of settings, to include VAMC
    emergency rooms, CBOCs, and other specialty clinics. The homelessness
    risk assessment will be tested for reliability and validity. The
    assessment instrument is a brief, two-stage assessment. It first
    assesses whether a veteran has a safe and stable place to stay for at
    least 90 days. If the veteran appears to be at risk, the second stage
    of the instrument assesses the veteran's current living situation,
    barriers to living independently, and supports that the veteran may
    have or require to access and maintain safe and stable housing. The
    assessment will inform appropriate referrals to homelessness prevention
    or other services. In addition, data collected through the assessment
    process will guide decisions regarding need for and targeting of
    resources moving forward, including specific characteristics that may
    pose risk for homelessness.
        While homelessness among veterans in the Operation Enduring Freedom
    (OEF), Operation Iraqi Freedom (OIF), and Operation New Dawn (OND)
    service era is a priority concern, there is limited empirical data
    about the extent to which or dynamics whereby they do become homeless.
    To address this, the NCHV is examining the onset of homelessness among
    recent veterans, including those returning from the OEF and OIF
    conflicts. Working in conjunction with the VA Office of the Inspector
    General and municipal shelter providers in Columbus, Ohio; New York
    City, New York; and Philadelphia, Pennsylvania, researchers at the NCHV
    are compiling an array of data that will facilitate identifying risk
    factors for homelessness among OEF/OIF veterans at the time of their
    separation from the military. This promises to inform prevention
    programs and potentially increase their efficiency. Service use
    patterns among this group will also be examined to assess the extent to
    which they use VA services, community services, or a combination of the
    two. The review of service use patterns will increase the understanding
    of how veterans access the services available to them, and may
    facilitate better coordination of services between VA and mainstream
    homeless service systems.
        The NCHV is also organizing a series of studies around the general
    topics of mortality, morbidity, and aging among homeless veterans. The
    overall goal of this project is to assess the demographic trends among
    the homeless veteran population to project future trends in the size
    and makeup of this population, and to anticipate future demand for
    services. Research conducted by study investigators has shown the
    overall single adult (i.e., not family) homeless population to be
    steadily aging. If this trend continues, it would lead to higher risk
    for early mortality and greater needs for long-term care. Research is
    currently underway to assess whether the trend also holds for homeless
    veterans, and the impact that providing homeless veterans with housing
    has on subsequent health and mortality.
                          women veterans medical care
        Question. What is the VA doing to assist female veterans?
        Answer. VA works to ensure that timely, equitable, and high-quality
    comprehensive healthcare services are provided in a sensitive and safe
    environment at VHA facilities nationwide. The VA strives to be a
    national leader in the provision of healthcare for women.
        Since 2009 VA has ensured that full-time women veteran program
    managers are in place at all VAMCs. These employees are women veteran
    champions who improve advocacy for women veterans, oversee outreach,
    and work to improve quality of care by implementing new policies and
    evidenced-based best practices in healthcare for women.
        VHA Handbook 1330.01, released in May 2010, requires that every
    female veteran have access to primary care from a proficient and
    interested provider who can provide primary care, gender-specific care,
    and mental healthcare. VHA is currently assessing the ongoing system-
    wide enhancement of access to comprehensive primary care with a
    structured tool and validated external site visits.
        Ensuring privacy, dignity, and safety of women veterans in VA
    healthcare settings is a top VA priority. VA has clarified safety and
    security policies in VHA Handbook 1330.01 which requires a female
    chaperone present at all gender-specific examinations and procedures.
    In addition, VA has been assessing the environment of care on a monthly
    basis, and tracking correction of any privacy deficiencies.
        Another top priority is education of primary care providers to
    maintain a proficient work force for care of women veterans. VA has
    educated more than 800 primary care providers in a mini-residency for
    women's health. Through extensive trainings offered this summer, VA
    will fulfill the goal of having at least 1,200 providers trained by end
    of fiscal year 2011. It is important that wherever a woman veteran
    access VA healthcare she can be seen by a women's health provider for
    her primary care.
        Working with VA researchers, in 2010 VA completed a National Survey
    of Women Veterans to assess healthcare needs and barriers to care. In
    addition, in order to benchmark services to women veterans, VA will
    soon release Sourcebook Volume 1 of the Women's Health Evaluation
    Initiative which describes the socio-demographic characteristics and
    healthcare utilization patterns of women veterans.
        Ongoing work will improve patient care coordination by improving
    emergency department care for women veterans, identifying high-risk
    medications in pregnant or lactating patients, and creating a novel
    system in the computerized patient medical record system for tracking
    abnormal mammogram results.
        Question. What is the VA doing to ensure that female veterans have
    sufficient privacy during their medical visits to VA facilities?
        Answer. Following the Government Accountability Office's (GAO)
    report, ``VA Has Taken Steps to Make Services Available to Women
    Veterans, but Needs to Revise Key Policies and Improve Oversight
    Processes,'' (March 2010), VA has undertaken an extensive evaluation of
    its facilities, identifying existing deficiencies in the environment of
    care, including bathrooms, privacy curtains, locks, and other areas.
    These deficiencies have been prioritized and tracked for correction. In
    fiscal year 2011, VA has budgeted $21 million in nonrecurring
    maintenance projects that will be used at the facility level to correct
    bathroom privacy deficiencies in addition to the $241.8 million of
    gender-specific care (from treatment funds) and $2.89 billion for total
    care for women veterans. In fiscal year 2010, VA spent more than $214
    million in gender-specific care and nearly $2.6 billion in total care
    for women veterans.
        Question. What more can be done in this area?
        Answer. Access to care, including making care available outside of
    typical operating hours, continues to be a part of the prospective
    changes to support ever increasing patient-centeredness of VA
    healthcare. According to information gathered in March 2011, 29
    facilities across 24 States currently offer extended primary care hours
    for women. Overall, 20.4 percent of facilities offer extended primary
    care hours (operating hours outside of usual operating hours 8 a.m. to
    4:30 p.m.) for women, and 24 percent offer extended primary care hours
    for men. It is anticipated that these numbers will continue to increase
    as the transformation to patient-aligned care teams and the focus on
    more patient-centered care continues.
        Question. What efforts are being done specifically at Kentucky VA
    facilities in this vein?
        Answer. The Louisville and Lexington VAMCs both have active women
    veteran's health programs. Full-time women veteran program managers are
    in place at each facility and are working to improve advocacy,
    outreach, and quality of care for women veterans. As a result of their
    efforts, there has been a steady increase in numbers of women veterans
    using Kentucky VA facilities. In addition, primary care providers from
    Louisville and Lexington have attended women's health mini-residency
    training to improve their proficiency in providing comprehensive
    primary care to women veterans.
                          women veterans appointments
        Question. I am informed that the percentage of female veterans who
    do not show up for their medical appointments is in many cases greater
    than the percentage of male veterans that do not show up for theirs.
        What is the VA doing to better understand why this occurs, and what
    is being done to reduce this higher percentage?
        Answer. VA has been collecting data on no-shows and missed
    appointment opportunities for several years. While there are small
    absolute differences in no-show rates by gender, further analysis
    demonstrates that these differences are not statistically significant.
        In 2008, the VHA Under Secretary for Health (USH) released a report
    that surveyed the current state of healthcare delivery to women
    veterans. This report called attention to gaps that existed in the care
    for women veterans, noting that the delivery of primary care for women
    veterans is frequently fragmented requiring women to travel to multiple
    locations or make several appointments to receive primary care.
    Recommendations from the USH report to improve service delivery were
    incorporated into policy changes outlined in VHA Handbook 1330.01
    released in May 2010.
        VHA Handbook 1330.01 requires that every female veteran have access
    to primary care from one provider who can provide primary care, gender-
    specific care, and mental healthcare. This policy will reduce
    fragmentation of care and need for women to return for separate
    appointments for gender-specific services. VA is also evaluating the
    ongoing system-wide enhancement of access to comprehensive primary care
    with a structured tool and validated external site visits. Increasing
    numbers of VA facilities are providing extended hours for women's
    health services (more than 20 percent of facilities).
        VA has conducted a scientifically validated National Survey of
    Women Veterans to assess barriers to use of VA Care and will soon
    undertake another national survey of women veterans as required by
    Public Law 111-163.
        VA recognizes that needs of women are different from men and is
    enhancing facility and clinic designs to better meet the needs of women
    veterans. The VHA transformation to patient-aligned care teams improves
    access for women by incorporating alternatives to face-to-face care
    including increased access to telehealth and e-health communications
    through the My Healthe Vet secure messaging system. These enhancements
    will improve access for women veterans as they balance their own needs
    for healthcare with their priorities for their children and their jobs.
                     outreach for kentucky medical facility
        Question. The location of the new VA hospital in Louisville,
    Kentucky, is of great importance to the local veterans community. In
    this vein, the VA's initial efforts at outreach to the veterans
    community to determine their views on a site location has been poorly
    planned and executed. Veterans were given little notice about the last
    public hearing and many were unable to participate. I therefore would
    urge the VA to better consider the views of local veterans,
    particularly African-American and younger veterans, in regards to the
    location of the hospital.
        How will the VA improve its outreach efforts in this respect?
        Answer. VA is committed to maximizing the dissemination of
    information to all veterans the Robley Rex VAMC serves. Our efforts
    were designed with all veterans in mind and are intended to reach all
    populations.
        Two public meetings were conducted on May 11, 2011. The purpose of
    the meetings was to inform veterans and the general public on the
    status of the due diligence process and the locations of the five sites
    under consideration. Methods used to make veterans and the public aware
    of this event consisted of the following:
      --Beginning April 25, 2011, a mass mailing to approximately 45,000
            veterans seen by the Robley Rex VAMC was sent advising of the
            public meeting and inviting them to attend. The mailing was
            done to ensure all veterans seen by the medical center were
            aware of the public meeting and invited to attend.
      --Letters providing notification of the public meeting date and times
            were also mailed to veterans service organizations, legislative
            offices, Kentucky VA, and to the medical center's major
            affiliates.
      --On January 3, 2011 (Frankfort), March 2, 2011 (Frankfort), and
            April 6, 2011 (Owensboro), the medical center sent
            representatives to the Joint Executive Council for Veteran
            Organizations. This also occurred on April 21, 2011, for the VA
            Voluntary Service meetings to provide status updates on the due
            diligence process, announce the upcoming public meeting, and
            answer questions.
      --Public notices have been placed in the medical center's volunteer
            newsletter (May 4, 2011) and local newspaper (May 1, 2011, and
            May 8, 2011). Media advisories were issued on April 26, 2011,
            and May 11, 2011.
      --Flyers and posters have been placed throughout the medical center
            and CBOCs.
      --The medical center has recently launched an Internet site where
            visitors, at their convenience, can review progress updates and
            other related issues.
        Question. In addition, how are the opinions of local veterans being
    incorporated into the decisionmaking process of the VA?
        Answer. Time will be allowed during both meetings for participants
    to ask questions and provide comments concerning site preference.
      --Verbal comments will be recorded, transcribed, and collated.
      --Participants will be provided with a form they may use to
            prioritize site preferences and provide written comments.
      --Participants had the opportunity to submit their preferences/
            comments either at the public meetings on May 11, 2011, or via
            mail from May 11-20, 2011.
        The medical center is also in the process of conducting another
    veterans preference survey using a third-party vendor in order to
    scientifically determine veteran preferences for the five sites under
    consideration.
        Results from the verbal and written comments of the public meeting
    and the veterans preference survey will be included with the findings
    and recommendations of the due diligence process and submitted to the
    Secretary for consideration while making his final decision.
                             employment assistance
        Question. With the rate of veterans returning from combat
    increasing, and with an already high unemployment rate, what is the VA
    doing to help ensure that these brave servicemembers are able to find
    jobs when they return to civilian life?
        Answer. VA administers a number of programs and works with the
    Departments of Labor and Defense to assist servicemembers in their
    transition to civilian life.
        VA's Vocational Rehabilitation and Employment (VR&E) Program
    assists disabled veterans prepare for and obtain sustainable
    employment. VR&E provides employment services such as:
      --Translation of military experience to civilian skill sets;
      --Direct job placement services;
      --Short-term training to augment existing skills to increase
            employability (e.g., certification preparation tests and
            sponsorship of certification); and
      --Long-term training including on-the-job training, apprenticeships,
            college training, or services that support self-employment.
    Additionally, under the Coming Home to Work Program, full-time VR&E
    counselors are assigned to 13 military treatment facilities to assist
    disabled servicemembers plan their future career.
        VA's Post-9/11 GI Bill education benefits cover the cost associated
    with the education or training needed to help veterans as they
    transition back into civilian life. This includes tuition and fees, a
    monthly housing allowance, and an annual books and supplies stipend up
    to $1,000.
        Additionally, VA will work with the DOD and DOL, accrediting
    agencies, and certifying bodies to ensure that the training and work
    experience that servicemembers receive will be acceptable for civilian
    employment.
        The Transition Assistance Program (TAP) is a partnership among the
    Departments of Defense, Veterans Affairs, Transportation, and Labor's
    Veterans Employment and Training Service (VETS) to provide employment
    and training information to servicemembers within 180 days of
    separation and retirement. Servicemembers learn about job searches,
    career decisionmaking, current occupational and labor-market
    conditions, resume preparation, and interviewing techniques. They are
    also receive an evaluation of their employability relative to the job
    market and information on veterans' benefits.
        DOD, DOL, and VA administer a Web site for Wounded Warriors that
    provides access to thousands of services and resources at the national,
    State, and local levels to support recovery, rehabilitation, and
    community reintegration. The National Resource Directory Web site
    (www.nationalresourcedirectory.gov) provides extensive information for
    veterans seeking resources on VA benefits, including disability and
    education benefits.
          department of veterans affairs hospital at eastern kentucky
        Question. I am informed that many veterans in eastern Kentucky are
    forced to travel several hours to Lexington or Huntington, West
    Virginia to undergo procedures at VA hospitals.
        I would like to know what the feasibility is for a new, centrally
    located hospital in eastern Kentucky.
        Answer. VA bases planning for future healthcare facilities on
    projected demand for healthcare services by veterans within specific
    market areas. These projections are obtained from the VA enrollee
    healthcare projection model, which is produced in partnership with
    Milliman USA, Inc, the largest healthcare actuarial firm in the United
    States. Demand for acute inpatient services for veterans in eastern
    Kentucky is projected to decrease over the next 10 and 20 years, which
    would make a new, centrally located hospital in eastern Kentucky not
    feasible. Decreasing demand in patient services is primarily due to
    changing demographics, as well as continuing shifts in the healthcare
    industry from inpatient to outpatient care. A hospital sized to meet
    the small demand would be inefficient to operate and could not offer
    the breadth and scope of services required to maintain safety and
    quality of services.
        Question. What criteria (infrastructure, veterans' population,
    etc.) does a community need to meet to warrant a VA hospital and what
    can the eastern Kentucky region do to try to facilitate and hasten
    construction of a VA hospital there?
        Answer. VA engages in thorough and continuous analyses of several
    factors when planning healthcare delivery in communities. These factors
    include the enrolled veteran population, the projected demand for
    healthcare over a 20-year horizon, and existing and planned points of
    service in that area. Population and demand projections take into
    account current servicemembers and veterans from ongoing conflicts
    (OEF/OIF/OND), to include gender-specific healthcare needs. Demand
    projections address both inpatient and outpatient services, including
    specialty care.
                                 prescriptions
        Question. It is my understanding that, based on a November 21,
    2006, VA memorandum, that VA officials as a general matter are
    restricted in their authority to write prescriptions to commercial
    pharmacies. It is also my understanding that many low-income veterans
    might benefit from significant cost-savings if their non-service-
    related prescriptions could be filled at commercial pharmacies.
        What is the rationale for this policy?
        Answer. The November 21, 2006, memorandum (attached below) does not
    restrict VA prescribers in their authority to write prescriptions that
    veterans may have filled in commercial pharmacies. Paragraph 4b on the
    November 21st memo states:

    ``VA practitioners are permitted to write prescriptions for veterans to
    be filled in private sector pharmacies, if they meet all prescribing
    requirements for the State where the prescriptions will be filled.''.

        The memorandum also provides guidance to VA prescribers to ensure
    patients do not receive duplicate prescriptions from VA and non-VA
    pharmacies that the electronic medical record is updated with a
    reference to the prescriptions being filled in a non-VA pharmacy and
    that DEA registration numbers should not ordinarily be used for
    identification purposes.
        Paragraph 4.a prohibits the ``transfer'' of a prescription
    previously filled in VA to a non-VA pharmacy. This requirement does not
    prohibit VA prescribers from writing a new prescription, only from
    transferring an existing prescription. The reason paragraph 4.a. was
    included in the memorandum was for safety reasons. If an error were to
    be made by the non-VA pharmacy in their understanding of the existing
    VA prescription, the patient could be harmed. For this reason, VA has
    instructed prescribers to cancel the VA prescription and issue a new
    one upon the patient's request.
        [The memorandum follows:]

        Question. What can be done to fix this problem?
        Answer. Since there is no prohibition for writing prescriptions to
    be filled in non-VA pharmacies, we don't believe that corrective action
    is required.
                                 claims backlog
        Question. Although the Congress approved the hiring of more than
    1,200 new claims processors for fiscal year 2010, I am told that
    veterans continue to wait far too long to have their claims processed.
        What is the average time between when a claim is filed and when the
    VA finalizes the process?
        Answer. The average time to process a VA disability claim is
    currently 182 days. A significant factor contributing to the recent
    increase in processing time is Secretary Shinseki's decision of October
    13, 2009, to add three new conditions to disabilities currently
    presumed related to exposure to herbicides used in the Republic of
    Vietnam (ischemic heart disease (IHD), Parkinson's disease (PD) and
    hairy cell (B-cell) leukemia (HCL). While a very positive decision for
    our veterans, VA must readjudicate previously denied claims for IHD,
    PD, or HCL filed by Nehmer-class members (Vietnam veterans and their
    survivors) in order to provide retroactive benefits pursuant to 38 CFR
    section 3.816. This requirement involves claims filed or denied from
    September 25, 1985, to the date Secretary Shinseki announced his
    decision on October 13, 2009. Approximately 93,000 cases were
    identified fitting this criterion. Due to the complexity of
    readjudicating claims in this category, all Nehmer readjudication
    claims are currently being reviewed and readjudicated by the Veterans
    Benefits Administration's (VBA's) 13 nationwide resource centers, along
    with some employees at the St. Paul regional office.
        VA is also adjudicating a second group of claims under Nehmer
    provisions that were received between Secretary Shinseki's announcement
    on October 13, 2009, and the date VA published the final regulation
    establishing a presumption of service connection on August 31, 2010.
    Approximately 50,000 cases were received during this period. Completion
    of these Nehmer claims often requires review of multiple volumes of
    claims folders to ensure accuracy of effective dates. Unfortunately,
    there are no technological enhancements to this review process. It is
    extremely labor-intensive, and one case alone may take 4 to 6 hours to
    review.
        VA currently has 1,300 employees at resource centers around the
    country devoted to the readjudication of Nehmer claims. Another 1,800
    VA employees across VA's 56 regional offices are adjudicating Agent
    Orange claims received after October 13, 2009. All other regional
    office employees continue to process non-Agent Orange workload.
        Question. As the number of veterans and claims continue to
    increase, what is being done going forward to ensure that claims are
    processed in a more efficient and timely manner?
        Answer. Our approach to transformation is a holistic approach that
    changes our culture, improves our processes, and integrates innovative
    technologies. Through our claims transformation initiatives, we are
    laying technological and business transformation groundwork to
    streamline claims processing and eliminate the claims backlog. VA's end
    goal is the Veterans Benefits Management System (VBMS), a smart,
    paperless, electronic claims processing system.
        VBMS will dramatically reduce the amount of paper in the current
    claims process, and will employ rules-based claims development and
    decision recommendations where possible. Utilizing automated workflows
    and business rules engines will prevent common errors, thereby
    improving quality. Additionally, by using a services-oriented
    architecture and commercial off-the-shelf products, VA will be
    positioned to take advantage of future advances in technology developed
    in the marketplace to respond to the changing needs of veterans.
        While we work to develop the paperless system, we are making
    immediate changes to improve the efficiency of our business activities.
    New calculators guide decisionmakers with intelligent algorithms
    (similar to tax preparation software) or through simple spreadsheet
    buttons and drop-down menus in evaluating certain medical conditions. A
    growing body of evidence-gathering tools, called disability benefits
    questionnaires, brings new efficiencies to collection of medical
    information needed to rate each claim. The Fully Developed Claims
    Program speeds the decision process by empowering veterans and helping
    them submit claims that are ready for VA decision as soon as they are
    received.
        Question. Also, what is currently being done to address the massive
    existing backlog of VA claims?
        Answer. VBA increased the claims processing workforce in 2010 by
    converting 2,400 temporary employees, previously funded through the
    American Recovery and Reinvestment Act, to full-time employees, and
    hiring an additional 600 new employees. We currently employ more than
    11,000 full-time claims processors. VBA will begin to realize
    additional gains in production beginning in the fourth quarter of
    fiscal year 2011 as our new employees complete their training and gain
    in experience. We are continuing to hire claims processors in fiscal
    year 2011.
        In addition, all veterans service representatives and rating
    veterans service representatives with more than 1 year of experience in
    their position are now mandated to perform 20 hours of overtime per
    month. VBA realized positive results when a similar overtime strategy
    was implemented to reduce the backlog of education claims in the first
    year of post-9/11 GI Bill implementation.
        VBA recognizes that continuing to increase our full-time equivalent
    levels is not a sufficient solution. The need to better serve our
    veterans requires bold and comprehensive business process changes to
    transform VBA into a high-performing 21st century organization that
    provides the best services available to our Nation's veterans,
    survivors, and their families.
        VA's multi-tiered approach for addressing the dramatically
    increasing volume of incoming claims includes a number of innovations.
    VA deployed two rules-based calculators to streamline and improve
    decision quality, with more tools in the pipeline. VA is providing
    veterans with improved online access to claims status information and
    other self-service options (such as ordering copies of discharge
    records) through the eBenefits portal. This increases client
    satisfaction while freeing VA staff to work on claims. A recently
    deployed Agent Orange (AO) miner tool links AO-related databases
    together and facilitates data search in developing veterans' AO claims.
    New evidence-gathering tools are being developed, such as the
    disability benefits questionnaires, which sharpen the focus in medical
    examinations to ensure all information needed to rate the claim is
    gathered the first time in the medical examination process and is
    presented succinctly. VA's Fully Developed Claims Program operating in
    all 56 regional offices puts veterans in the driver's seat for
    submitting claims that are ready to rate when received.
        We estimate that in late 2012, production will begin to outpace
    receipts. At that same time, we plan to begin the deployment phase of
    the VBMS. VBMS will provide powerful new tools to claims examiners to
    boost efficiency and productivity. Gains in accuracy through rules-
    based processing will reduce re-work and appeals. Rules-based
    processing and calculator tools also speed the rating process, which
    will increase employee productivity and provide additional staff hours
    to rate other claims.
      post-traumatic stress disorder/traumatic brain injury/mental health
        Question. Post-traumatic stress disorder (PTSD) and traumatic brain
    injury (TBI) continue to be serious conditions for many veterans, as
    are a host of other mental health issues.
        What more can be done to help veterans coping with PTSD, TBI, and
    mental health issues?
        Answer. VA has established a comprehensive system of clinical care
    for veterans with mental disorders including those veterans who suffer
    from TBI and other physical problems. These services are fully
    described in VHA Handbook 1160.01, Uniform Mental Health Services in VA
    Medical Centers and Clinics, published in 2008. This handbook defines
    requirements for those mental health services that must be available to
    all veterans, and those that must be directly provided by VA staff in
    VA facilities--medical centers, very large, large, mid-sized, and small
    CBOCs. Uniform access to evidence based clinical care across the VA
    system is a core feature of VA mental health services, as is a recovery
    orientation, providing services that will help veterans with serious
    mental illness fulfill their personal goals and live meaningful lives
    in a community of their choice. VA continues to work toward full
    implementation of the services described in the handbook; we have
    accomplished most implementation, but efforts remain for full
    implementation and sustainment.
        As of the first quarter of fiscal year 2011, 50.7 percent of OEF/
    OIF/OND veterans who have come to VAMCs and clinics for care have
    received a provisional diagnosis of mental disorder. Of these 53.4
    percent have a provisional diagnosis of PTSD and 39.3 percent have a
    provisional diagnosis of depressive disorder. It is clear that mental
    health issues are prominent among returning servicemembers, but also
    that PTSD is not the only diagnosis manifested by these veterans.
        Recognizing that TBI is another common problem among veterans of
    the Southwest Asia wars, VA collaborated with the Defense Centers of
    Excellence for Psychological Health and Traumatic Brain Injury (DCoE)
    to hold a 2-day consensus conference of clinical and scientific experts
    on April 27-28, 2009. That conference concluded, based on a thorough
    review of the published evidence, that the assessment and treatment of
    veterans with co-occurring PTSD and mild TBI could be approached using
    the evidence-based approaches identified in the VA/DOD clinical
    practice guidelines. This information is the current standard of
    practice for these disorders and has been disseminated across the VA
    system through a variety of face to face, satellite broadcast, and Web-
    based educational programs. VA mental health and rehabilitation
    services collaborate to address the needs of veterans with co-occurring
    PTSD, other mental health problems, and TBI. This coordination is
    typical of VA's integration of mental health with primary care and
    other medical services in order to enhance access of veterans to mental
    health services.
        With a clinical infrastructure based on evidence-based assessment
    and treatment, and enhanced mental health staffing since 2005, VA
    mental health services are left with two goals--sustaining and
    expanding the capability to provide these services and promoting access
    of veterans to these services. Sustaining services is being achieved by
    tracking the implementation of the Uniform Mental Health Services
    Handbook. Increasing access is being addressed by initiatives such as
    providing VA staff at colleges and universities, in a current pilot
    program, and enhancing availability of VA services in rural areas.
    Expanding the public's awareness of VA mental health services is being
    achieved through multiple activities, including (but not limited to):
      --Large public outreach campaigns;
      --Dissemination of a version of the Uniform Mental Health Services
            Handbook developed to communicate about required mental health
            services in language readily understood by veterans and their
            families;
      --Web-based activities such as MyHealtheVet;
      --The National Center for PTSD Web site;
      --Collaborating with the Caregiver Initiative being implemented by VA
            Social Work Service;
      --Information on VA services and ways to access these services made
            available through social media such as Facebook;
      --A recently released PTSD app for iPhones; and
      --Collaborations with community partners, including initiatives such
            as the VA/DOD Integrated Mental Health Strategy and the
            Substance Abuse and Mental Health Services Administration
            Policy Academy Technical Assistance Center.
                                  rural access
        Question. What is the VA doing to provide improved access to
    healthcare services for the large population of rural veterans,
    especially in Kentucky?
        Answer. For fiscal year 2011, VA Rural Health Initiative funding of
    $250 million has been appropriated for National Telehealth/Telemedicine
    Expansion, Project Access Received Closer to Home, Veterans Rural
    Resource Centers, Teleradiology Services Sustainment, and veterans
    integrated service network (VISN) rural initiatives to include outreach
    clinics and mental health projects.
        Approximately 3.3 million veterans enrolled in the veterans
    healthcare system live in rural and highly rural areas. This represents
    41 percent of the approximately 8 million total enrolled veterans.
    Access to care for rural veterans is increasing which is partly due to
    the addition of 26 new rural CBOCs. As 25 additional rural CBOCs open,
    the numbers of enrolled veterans reported are expected to quickly grow.
        Rural access is also expanded through opening new rural outreach
    clinics, mobile units, and telehealth. Data from fiscal year 2009,
    fiscal year 2010 and fiscal year 2011 quarter one reports show that
    416,131 VA encounters/services were provided for rural veterans,
    including 8,927 rural OEF/OIF veterans and 11,704 rural women veterans.
        The State of Kentucky has seen a steady increase in VHA enrollment
    for rural veterans, across all enrollment categories. In fiscal year
    2010, 269 additional rural veterans enrolled in VHA. The State of
    Kentucky is part of VISN 9. VA currently funds 11 projects in VISN 9,
    all designed to expand access to high quality healthcare. Approximately
    5,734 VA encounters/services have been provided to/for rural veterans
    through these projects.
        In fiscal year 2010, there were 1,485 veterans in Kentucky that had
    telehealth-based care in VA clinics; these patients received 3,120
    encounters. Of this population receiving clinic-based care via
    telehealth, 88 percent (1,314) were in rural areas. Currently, as of
    June 6, 2011, 1,024 veterans in Kentucky are enrolled in VA's home
    telehealth programs, and 64 percent (656) of these patients live in
    rural areas.
        VA has opened two new rural health CBOCs, expanding both primary
    and specialty care, and has made significant expansion of available
    rehabilitation services in the area. VISN 9 is especially proud of
    expansion of teleretinal screening at the Clarksville CBOC.
        With funding from VA, VISN 9 has been a key contributor to the
    Rural Health Professions Institute (RHPI). RHPI collaborated with
    Mountain Home VAMC to deliver training to CBOCs and VISN
    representatives from across the Nation. The RHPI developed new teaching
    tools and technologies to facilitate understanding of rural culture and
    delivery of care. RHPI educated staff to the array of VA telehealth
    technologies, which offered rural veterans the opportunity to receive
    care from a variety of specialists. Although these projects are not
    located in Kentucky, they do provide access and care to veterans from
    Kentucky.
        Question. What measures are being taken by the VA to expand the use
    of telemedicine to help rural veterans who lack access to major VA
    facilities?
        Answer. VA provides funding of initiatives that optimize the use of
    available and emerging technologies to enhance services to veterans
    residing in rural and highly rural areas. VA continues to fund
    innovative and diverse pilot projects and service initiatives that
    improve access and quality of primary, mental health, and specialty
    care; and enhance care through advances in technology and telehealth
    services. In addition, the Veterans Rural Health Resource Center--
    Eastern Region focuses on the education and training of VA and non-VA
    service providers caring for rural veterans and bringing specialty care
    to community-based clinics via telehealth technology. In fiscal year
    2010, VA telehealth programs provided care to veterans residing in
    rural and highly rural areas as follows:
      --Approximately 20,000 veterans using Home Telehealth;
      --Approximately 45,000 veterans using Clinical Video Telehealth; and
      --Approximately 77,000 veterans using Store and Forward Telehealth.
        VA plans to expand by 50 percent, both its Home Telehealth Program
    and capacity to undertake clinical consultations using real-time
    clinical video telehealth in fiscal year 2011. The capability to
    remotely review clinical digital images via Store and Forward
    Telehealth (nonradiology) is planned to increase by 30 percent in
    fiscal year 2011. VA also has other specific initiatives to expand the
    scope of its telehealth services that include:
      --Spinal cord injury (Tele-SCI);
      --Audiology (Tele-audiology); and
      --Pathology (Tele-pathology) clinical consultation networks.
        VA is developing a rural telehealth communications plan, which will
    include an annual report of accomplishments. The products and tool
    developed as a result of the communication plan will be distributed
    VHA-wide. VA places the highest priority on telehealth services and
    will continue to support expansion of telehealth services nationally.
              fort knox ireland community-based outpatient clinic
        Question. I am informed that DOD will begin budgeting for the
    replacement of the Fort Knox Ireland Army Community Hospital in fiscal
    year 2013. Currently, Ireland has a CBOC affiliated with it.
        What steps are being taken by the VA to ensure that efforts on the
    CBOC are synchronized with those of DOD and the new hospital?
        Answer. There is an ongoing dialogue between the VA and DOD
    concerning this issue. Efforts are being coordinated through the VA's
    DOD-sharing office and involve discussion at both the local and
    national levels. VA is developing a business case to best address the
    needs of veterans served by the CBOC at Fort Knox, which will be
    evaluated in VA's strategic capital investment planning process.

                              SUBCOMMITTEE RECESS

        Senator Johnson. This hearing is recessed.
        [Whereupon, at 11:54 a.m., Thursday, March 31, the
    subcommittee was recessed, to reconvene subject to the call of
    the Chair.]

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

                                  ----------

                            THURSDAY, APRIL 7, 2011

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

                             DEPARTMENT OF DEFENSE

                       Office of the Secretary of Defense

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

                    OPENING STATEMENT OF SENATOR TIM JOHNSON

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

                         STATEMENT OF SENATOR MARK KIRK

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

                    SUMMARY STATEMENT OF HON. ROBERT F. HALE

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

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

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

                               PREPARED STATEMENT

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

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

                     SUMMARY STATEMENT OF DR. DOROTHY ROBYN

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

                             MILITARY CONSTRUCTION

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

                          BASE REALIGNMENT AND CLOSURE

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

                              INSTALLATION ENERGY

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

                               PREPARED STATEMENT

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

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

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

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

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

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

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

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

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

                                    Appendix

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

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

                              GOVERNMENT SHUTDOWN

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

                                      GUAM

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

                                     LIBYA

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

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

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

                                KOREA TOUR NORM

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

                              GOVERNMENT SHUTDOWN

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

                                   NEW STARTS

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

                               GUARD AND RESERVE

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

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

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

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

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

                               PREPARED STATEMENT

        Thank you for the opportunity to appear before you today. I
    look forward to answering any questions you may have.
        [The statement follows:]
                  Prepared Statement of Jackalyne Pfannenstiel
        Chairman Johnson, Senator Kirk, and members of the subcommittee, I
    am pleased to appear before you today to provide an overview of the
    Department of the Navy's (DON's) investment in its shore
    infrastructure.
                      the navy's investment in facilities
        Our Nation's Navy-Marine Corps team operates globally, having the
    ability to project power, effect deterrence, and provide humanitarian
    aid whenever and wherever needed to protect the interests of the United
    States. Our shore infrastructure provides the backbone of support for
    our maritime forces, enabling their forward presence. The Department's
    fiscal year 2012 budget request includes a $13.3 billion investment in
    our installations, a decrease of more than $1.6 billion from last year.
        The fiscal year 2012 military construction (MILCON) (Active and
    Reserve) request is $2.5 billion. Although significantly less than the
    fiscal year 2011 request, it represents continued investment in
    quality-of-life and mission requirements, a continued emphasis on
    energy conservation, and implementation of the Defense Policy Review
    Initiative to relocate marines from Okinawa to Guam.
        The fiscal year 2012 family housing request of $469 million
    represents a 15-percent decrease from the fiscal year 2011 request. The
    Navy and Marine Corps continued to invest in housing, particularly the
    recapitalization of our overseas housing. Having virtually privatized
    all family housing located in the United States, we are investing in a
    ``steady state'' recapitalization effort to replace or renovate housing
    at overseas and foreign locations where we continue to own housing.
        Our base realignment and closure (BRAC) program consists of
    environmental cleanup and caretaker, and property disposal costs at
    prior round BRAC and BRAC 2005 locations.
        We do not foresee much potential for large revenue from land sales,
    which were used to fund the Legacy BRAC program from fiscal year 2005
    through fiscal year 2008. Thus, we again seek appropriated funds in
    fiscal year 2012 in the amount of $129 million. Should land sale
    revenue accrue from the disposal of any BRAC property sales, we will
    reinvest them to accelerate cleanup at the remaining BRAC locations.
        The fiscal year 2012 BRAC 2005 budget request of $26 million
    supports ongoing environmental restoration, caretaker, and property
    disposal efforts. The Department has made significant progress in
    implementing the BRAC 2005 recommendations during the past year, and to
    date has completed 328 of 485 realignment and closure actions as
    specified in our established business plans and we are on track for
    full compliance with statutory requirements by the September 15, 2011
    deadline.
        Our fiscal year 2012 request for base-operating support (BOS) is in
    excess of $7 billion. The BOS program finances shore activities that
    support ship, aviation, combat operations, public safety, and family
    quality-of-life programs for both Active and Reserve components.
        Finally, the Department's budget request is increased to $1.2
    billion fiscal year 2012, and $4.4 billion across the Future Years
    Defense Plan, to support Secretary Mabus' aggressive energy goals to
    increase energy security, reduce dependency on fossil fuels, and
    promote good stewardship of the environment. The fiscal year 2012
    program funds three MILCON projects to decentralize steam plants,
    continues research and development in operational energy efficiencies
    for the tactical fleet, and will enable the services to increase the
    energy efficiency of its infrastructure.
        Here are some of the highlights of these programs.
                             military construction
        The DON's fiscal year 2012 MILCON program requests appropriations
    of $2.5 billion, including $87 million for planning and design and $23
    million for unspecified minor construction.
        The Active Navy program totals $1.1 billion and includes:
      --$190 million to fund five Combatant Commander projects:
        --a bachelor quarters;
        --a taxiway enhancement;
        --an aircraft logistics apron at Camp Lemonnier, Djibouti;
        --a bachelor quarters; and
        --the fourth phase of the waterfront development in Bahrain.
      --$195 million to fund four energy savings and security projects:
        --a steam system decentralization at Naval Support Activity,
                Norfolk, Virginia;
        --a steam system decentralization at Naval Support Activity, South
                Potomac (Indian Head, Maryland);
        --a steam system decentralization at Naval Station Great Lakes,
                Illinois; and
        --an electrical distribution system replacement at Pacific Missile
                Range Facility, Hawaii.
      --$128 million to fund a bachelor quarters at Naval Station Norfolk,
            Virginia in support of the Chief of Naval Operations' Homeport
            Ashore Initiative; and
        --a fitness center at Naval Base Coronado, California.
      --$208 million to fund five nuclear weapons security projects:
        --the first increment of a second explosives-handling wharf;
        --explosives handling;
        --wharf security force facility; and
        --waterfront restricted-area security enclave at Naval Base Kitsap,
                Washington; and
        --waterfront restricted-area land/water interface and security
                enclave at Submarine Base Kings Bay.
      --$114 million to fund five projects to achieve initial/final
            operational capability requirements for new systems:
        --a P-8A trainer facility;
        --a P-8A hangar upgrade, and a broad area maritime surveillance
                operator training facility at Naval Air Station
                Jacksonville, Florida;
        --a MH-60 R/S rotary maintenance hangar at Naval Base Coronado,
                California; and
        --an E-2D aircrew training facility at Naval Base Ventura County,
                California.
      --$15 million to fund Massey Avenue corridor improvements at Naval
            Station Mayport, Florida in support of homeporting a nuclear
            capable aircraft carrier by 2019.
      --$198 million to fund additional critical Navy priorities:
        --a controlled industrial facility at Norfolk Navy Shipyard,
                Virginia;
        --an applied instruction facility at Eglin Air Force Base;
        --an aircraft prototype facility at Naval Air Station Patuxent
                River;
        --an integrated dry dock water treatment facility at Naval Base
                Kitsap, Washington;
        --a Navy information operations command FES facility at Naval
                Station Pearl Harbor, Hawaii; and
        --a potable water plant modernization at Naval Support Facility
                Diego Garcia.
      --$42 million for planning and design efforts.
        The Active Marine Corps program totals $1.4 billion and includes:
      --$59 million for the construction of unaccompanied housing at Camp
            Lejeune and Quantico in a continuation of the Commandant of the
            Marine Corps' initiative to improve the quality of life for
            single marines;
      --$48 million to provide quality-of-life facilities such as a child
            development center, a dining facility, and a physical fitness
            center at 29 Palms and Quantico;
      --$28 million to construct student billeting for the Basic School in
            Quantico, Virginia;
      --$301 million to build infrastructure to support new construction.
            These projects include road improvements and drinking and
            wastewater systems. These projects will have a direct effect on
            the quality of life of our marines. Without these projects,
            basic services generally taken for granted in our day-to-day
            lives, will fail as our marines work and live on our bases;
      --$514 million to fund operational and maintenance projects such as
            those needed for the MV-22 aircraft at Camp Pendleton and Joint
            Strike Fighter at Beaufort and Yuma; and operational units in
            Camp Lejeune, New River, Cherry Point, 29 Palms, Barstow, and
            Hawaii;
      --$127 million to provide training facilities and ranges at Camp
            Pendleton, Camp Lejeune, 29 Palms, and Quantico;
      --$75 million to support professional military education by providing
            facilities at Marine Corps University in Quantico;
      --$9 million for land expansion for Marine Air Ground Task Force
            large-scale training exercises at 29 Palms;
      --$156 million for facilities necessary to support the relocation of
            marines to Guam; and
      --$42 million for planning and design efforts.
        With these new facilities, marines will be ready to deploy and
    their quality of life will be enhanced. Without them, quality of work,
    quality of life, and readiness for many marines will have the potential
    to be seriously degraded.
        The Navy and Marine Corps Reserve MILCON appropriation request is
    $26 million to construct an Armed Forces Reserve Center at Pittsburgh,
    Pennsylvania, and a Marine Corps Reserve Training Center at Memphis,
    Tennessee. Additionally, $18 million has been realigned to the
    Department of the Army to construct a joint Navy, Marine Corps, and
    Army Reserve complex at Indianapolis, Indiana.
    Fully Funded and Incrementally Funded Military Construction Projects
        Our fiscal year 2012 budget request complies with Office of
    Management and Budget Policy and the Department of Defense (DOD)
    Financial Management Regulation that establishes criteria for the use
    of incremental funding. The fiscal year 2012 request includes $78
    million to support the first increment of a second explosives-handling
    wharf at Naval Base Kitsap, Washington. Follow-on increments will be
    submitted in future budget requests. Otherwise, all new projects are
    fully funded or are complete and usable phases.
                             facilities management
    Facilities Sustainment, Restoration and Modernization
        DOD uses a sustainment model to calculate lifecycle facility
    maintenance and repair costs. These models use industry-wide standard
    costs for various types of buildings and geographic areas and are
    updated annually. Sustainment funds in the operation and maintenance
    accounts are used to maintain facilities in their current condition.
    The funds also pay for preventative maintenance, emergency responses
    for minor repairs, and major repairs or replacement of facility
    components (e.g., roofs, heating, and cooling systems). The fiscal year
    2012 budget request funds sustainment at 80 percent and 90 percent for
    the Navy and Marine Corps, respectively. To maximize support for
    warfighting readiness and capabilities, the Navy reduced its facilities
    sustainment posture to 81 percent of the DOD facilities sustainment
    model; joint bases are funded to 90 percent of this model. The Naval
    Academy, Naval War College, and Naval Postgraduate School are funded to
    100 percent of this model. Additionally, the Navy has targeted the
    allocation of sustainment funds to increase the sustainment and
    maintenance of unaccompanied housing. As a result, the Navy has
    minimized operational impacts and ensured the safety of our sailors and
    civilians by prioritizing maintenance and repair efforts for facilities
    that directly affect mission operations such as piers, hangars, and
    communications facilities as well as unaccompanied housing and family
    support centers.
        Restoration and modernization (R&M) provides major upgrades of our
    facilities using MILCON, operation and maintenance, Navy Working
    Capital Fund, and BRAC, as applicable. In fiscal year 2012, the DON is
    investing nearly $1.5 billion in R&M funding.
    Naval Safety
        Protecting DON's sailors, marines, and civilian employees and
    preserving the weapon systems and equipment entrusted to us by the
    American people remains one of our highest priorities. I consider
    continual improvement of our safety performance to be an integral
    component to maintaining the highest state of operational readiness for
    our Navy-Marine Corps team. During fiscal year 2010, the DON once again
    achieved record-setting mishap rate reductions in numerous key mishap
    categories. The Department is successfully tracking toward becoming a
    world-class safety organization, where, in step with civilian industry
    leaders, no avoidable mishap or injury is considered the cost of doing
    our business.
        The Secretary of Defense established a goal to achieve a 75-percent
    reduction in baseline fiscal year 2002 mishap rates across DOD by the
    end of fiscal year 2012. By the end of fiscal year 2010, the DON
    exceeded the DOD-wide mishap rate reduction in three of the four mishap
    categories being tracked by the Office of the Secretary of Defense.
        During fiscal year 2010, we continued our Department-wide assault
    to reduce the loss of sailors and marines to fatal accidents on our
    Nation's highways. Over the past 5 years, we lost on average 53 sailors
    and marines to automobile and motorcycle accidents. In fiscal year
    2010, we brought those losses down to just 34, our lowest number ever
    recorded. While we achieved unprecedented reductions in highway
    fatalities during fiscal year 2010, we still find these losses
    untenable--we can and must do better.
        In fiscal year 2010 DON achieved our best year ever recorded for
    total class A operational mishaps.\1\ While this represents a
    significant achievement, fiscal year 2010 was the fourth consecutive
    fiscal year we achieved, ``best year ever recorded'' in this category.
    Additionally, fiscal year 2010 marked DON's best year ever recorded for
    the number of off-duty/recreational fatalities \2\ and for the rate of
    class A aviation flight mishaps.
    ---------------------------------------------------------------------------
        \1\ A fiscal year 2010 class A mishap is one where the total cost
    of damages to Government and other property is $2 million or more, or a
    DOD aircraft is destroyed, or an injury and/or occupational illness
    results in a fatality or permanent total disability. An operational
    mishap excludes private motor vehicle and off-duty recreational
    mishaps. Mishaps exclude losses from direct enemy action.
        \2\ Off-duty/recreational fatalities do not include off-duty deaths
    resulting from automobile, motorcycle, or pedestrian/bicycle mishaps.
    ---------------------------------------------------------------------------
        Our efforts also focus on achieving continual improvement in the
    reduction of workplace injuries. By the end of fiscal year 2010, the
    Department had achieved Voluntary Protection Program ``Star'' status,
    the Occupational Safety and Health Administration's highest level of
    achievement, at 14 sites. These activities include all four naval
    shipyards, our largest industrial facilities. Additionally, over the
    past 8 years, we have reduced the Navy and Marine Corps civilian lost
    day rates (due to injury) by 45 percent and 51 percent respectively.
    Encroachment Partnering
        DON has an aggressive program to manage and control encroachment,
    with a particular focus on preventing incompatible land use and
    protecting important natural habitats around installations and ranges.
    A key element of the program is encroachment partnering, which involves
    cost-sharing partnerships with States, local governments, and
    conservation organizations to acquire interests in real property
    adjacent and proximate to our installations and ranges. Encroachment
    partnering agreements help prevent development that would adversely
    impact existing or future missions. These agreements also preserve
    important habitat near our installations in order to relieve training
    or testing restrictions on our bases. The program has proven to be
    successful in leveraging DOD and DON resources to prevent encroachment.
        DOD provides funds through the Readiness and Environmental
    Protection Initiative (REPI) that are used in conjunction with Navy and
    Marine Corps operations and maintenance funds to leverage acquisitions
    in partnership with States, local governments, and nongovernmental
    organizations. For fiscal year 2010, the Marine Corps acquired
    restrictive easements over 8,191 acres. REPI and Marine Corps funds
    totaled and $8.7 million while the encroachment partners provided $11
    million. The Navy acquired 1,908 acres of restrictive easements with
    combined REPI and Navy funds of $9.36 million and $6.4 million provided
    by partners.
        To date, the marines have acquired restrictive easements for 32,408
    acres of land with $49 million of REPI and Marine Corps funding.
    Encroachment partners have contributed $54 million. The Navy has
    acquired 9,851 acres of restrictive easements to date with $28.4
    million of REPI and Navy funding, and $35.5 million contribution from
    encroachment partners.
    Compatible Development
        Vital to the readiness of our fleet is unencumbered access to
    critical water and air space adjacent to our facilities and ranges. An
    example is the outer continental shelf (OCS) where the vast majority of
    our training evolutions occur. The Department realizes that energy
    exploration and off-shore wind development play a crucial role in our
    Nation's security and are not necessarily mutually exclusive endeavors.
    Therefore, we are engaging with the other services, the Office of the
    Secretary of Defense, and the Department of the Interior to advance the
    administration's energy strategy. We are poised to coordinate with
    commercial entities, where feasible, in their exploration and
    development adjacent to installations and our operating areas along the
    OCS that are compatible with military operations. However, we must
    ensure that obstructions to freedom of maneuver or restrictions to
    tactical action in critical range space do not measurably degrade the
    ability of Naval forces to achieve the highest value from training and
    testing.
                                     energy
        DON is committed to implementing a balanced energy program that
    exceeds the goals established by the Energy Independence and Security
    Act of 2007, Energy Policy Act of 2005, National Defense Authorization
    Act of 2007 and 2010, Executive Orders 13423 and 13514. We place a
    strong emphasis on reducing our dependence on fossil fuels, reducing
    overall energy consumption, increasing energy reliability, and
    environmental stewardship. The Department is a recognized leader and
    innovator in the energy industry by the Federal Government and private
    sector as well. Over the past decade, DON has received almost one-
    quarter of all of the Presidential awards and nearly one-third of all
    of the Federal energy awards. Additionally, DON has received the
    Alliance to Save Energy ``Star of Energy Efficiency'' Award and two
    Platts ``Global Energy Awards'' for Leadership and Green Initiatives.
    Organization
        The Secretary established a Deputy Assistant Secretary of the Navy
    for Energy (DASN-Energy) to consolidate the Department's operational
    and installation energy missions in the Office of the Assistant
    Secretary of the Navy for Energy, Installations and Environment ASN.
    The consolidation of both operational and installation energy
    portfolios under the DASN-Energy has led to a more concentrated focus
    on the Secretary of the Navy's priority of Energy Security and Energy
    Independence. At the service level, energy efficiency is being
    institutionalized by the Chief of Naval Operations (CNO) and the
    Commandant of the Marine Corps (CMC). The Navy Energy Coordination
    Office and Marine Corps Expeditionary Energy Office drive energy
    efforts and initiatives within the services.
        From the Secretary down to the deck plate sailor and the marine in
    the field, the Department is committed to meeting our aggressive energy
    goals. We all view energy as an invaluable resource that provides us
    with a strategic and operational advantage.
    Naval Energy Vision, Priorities, and Goals
        As part of the Secretary of the Navy's priority on energy, DON is
    committed to a Naval energy vision that states ``The Navy and Marine
    Corps will lead the DOD and the Nation in bringing about improved
    energy security, energy independence, and a new energy economy.''
        With this vision, the Secretary of the Navy has set two priorities
    for Naval energy reform: energy security and energy independence.
    Energy security will be achieved by utilizing sustainable sources that
    meet tactical, expeditionary, and shore operational requirements and
    force sustainment functions, and having the ability to protect and
    deliver sufficient energy to meet operational needs. Energy
    independence will be achieved when Naval forces rely only on resources
    that are not subject to intentional or accidental supply distributions.
    As a priority, DON's energy independence will increases operational
    effectiveness by making Naval forces more energy self-sufficient and
    less dependent on vulnerable energy production and supply lines.
        With his vision and priorities, the Secretary of the Navy set forth
    five energy goals to reduce DON's overall consumption of energy,
    decrease its reliance on petroleum, and significantly increase its use
    of alternative energy. Meeting these goals requires that the Navy and
    Marine Corps value energy as a critical resource across maritime,
    aviation, expeditionary, and shore missions. DON will lead the Navy and
    Marine Corps efforts to improve operational effectiveness while
    increasing energy security and advancing energy independence. DON will
    achieve the Secretary of the Navy's goals by adopting energy efficient
    acquisition practices, technologies, and operations.
        The five goals are:
      --By 2020, 50 percent of total DON energy will come from alternative
            energy resources;
      --By 2020, DON will produce at least 50 percent of shore-based energy
            requirements from alternative resources;
      --DON will demonstrate a Green Strike Group in local operations by
            2012 and sail the Great Green Fleet by 2016;
      --By 2015, DON will reduce petroleum use in commercial vehicles by 50
            percent; and
      --Evaluation of energy factors will be used when awarding contracts
            for systems and buildings.
        As part of these ambitious energy goals, the Secretary of the Navy
    released The Department of the Navy's Energy Program for Security and
    Independence. This strategic roadmap provides guidance and direction to
    the Navy and Marine Corps. In addition, the CNO and CMC are developing
    strategic plans, baselines, and metrics to outline energy requirements,
    funding, profiles, and milestones for achieving energy efficiency and
    security. The strategy requires action across the DON and is the
    responsibility of every individual member.
    Energy Funding
        DON has budgeted $1.2 billion in fiscal year 2012 and approximately
    $4.4 billion across the Future Years' Defense Plan for energy
    initiatives. Our strategy focused on reducing our dependence on
    petroleum, lowering our energy cost, and complying with Federal
    legislation and energy mandates. This focus on energy investment will
    result in cost-savings that will allow DON to continue to aggressively
    pursue the Secretary of the Navy's priorities and goals.
        Operation and Maintenance, Navy.--Projects funded would include
    testing/certification of Great Green Fleet fuel, propeller coatings,
    hull coatings, advanced metering infrastructure, simulator upgrades,
    aviation and maritime i-ENCON and facility energy audits, and facility
    energy efficiency upgrades.
        Operation and Maintenance, Marine Corps.--Projects funded would
    include completion of mandated energy audits, mobile electric power
    equipment units, advanced power systems, renovate HVAC system to
    increase efficiency, and complete SMART metering projects.
        National Defense Sealift Fund/Other Procurement, Navy.--Projects
    funded would include large medium-speed roll-on/roll-off light
    upgrades, shore power management/monitoring systems, and ship engine
    automation upgrades.
        Military Construction, Navy.--Funds would go toward solar array
    construction projects, energy efficiency upgrades, critical asset
    energy security enhancements, advanced metering, ground-source heat
    pumps, small-scale wind projects, and steam line distribution upgrades.
        Research, Development, Test and Evaluation.--Projects funded would
    include testing of hybrid electric drive, Fleet Readiness R&D Program,
    the shipboard energy dashboard, landing craft air cushion efficiency
    initiatives, water purification technologies, man-portable electric
    power units, and energy storage and distribution.
        Achieving these priorities and goals will present challenges for
    the Navy and the Marine Corps. Final success will depend on
    advancements on technology maturity, resource availability, alternative
    fuel availability, and business process transformation. However, with
    the investments budgeted for energy, DON is taking the leadership role
    within DOD for this success.
    Success
        We are on track to meet all our goals, and throughout 2010, we
    demonstrated progress through an assortment of energy programs,
    partnerships, and initiatives. Our F/A18, dubbed ``The Green Hornet''
    reached Mach 1.7 as part of the test and certification process using a
    50-50 blend of Camelina-based JP-5. We also successfully conducted
    tests on the MH-60 Seahawk helicopter, and ran a Riverine command boat
    on renewable biofuel. These tests represent milestones for the
    Secretary of the Navy's goal of sailing the Great Green Fleet in 2016.
    The USS Makin Island, using a hybrid-electric drive to dramatically
    lower its fuel usage at slow speeds, will generate lifecycle savings of
    millions of dollars at today's fuel prices. And we are not stopping
    there. We will continue to move forward with installation of a similar
    system on new construction DDGs and look at the feasibility of
    retrofitting the fleet with these systems in the course of routine
    shipyard availabilities.
        Additional energy initiatives that will reduce the energy
    consumption of our ships and make them more efficient are propeller and
    hull coatings. Stern flaps will also assist in reducing energy
    consumption. And when we look to our future Navy, advanced materials
    used on our propellers, energy storage and power management systems,
    and advanced propulsion technology will make our warships more
    efficient while still allowing them to meet their combat capability.
        And the Navy is not alone in implementing change. Last year, the
    Marine Corps tested equipment that could be deployed on battlefields at
    their experimental forward operating bases (ExFOB) at Quantico and
    Twenty-Nine Palms. Technologies tested at the ExFOB are now deployed
    with marines in Afghanistan. Solar power generators and hybrid power
    systems are reducing the amount of fossil fuel needed to operate in a
    combat zone. By deploying these technologies, the Marine Corps has
    proven that energy efficiency means combat effectiveness.
        In addition to these tactical and platform applications, we have
    implemented a number of energy projects at our facilities ashore. We
    are actively exploring for new geothermal resources to augment our
    existing 270 MW geothermal power plant at China Lake. Solar multiple
    award contracts in Hawaii and the Southwest will allow for large-scale
    solar projects to be built on our installations. And we are looking at
    developing our wind resources, exploring Waste-to-Energy projects and
    developing ocean power technology.
        We are also aggressively conducting facility energy audits while
    completing installation of ``smart'' electric metering to implement a
    wide range of facility energy efficiency measures. By the end of this
    year, more than 27,000 meters will be installed in our existing
    facilities and provide the means to better measure the amount of energy
    we are consuming. This will allow for our energy managers to provide
    ``real-time'' feedback to our leaders on our installations. At the same
    time, we continue to ensure that new construction is at a minimum LEED
    Silver. By exceeding building efficiency standards, we will be able to
    meet mandated efficiency goals and drive down our need for conventional
    energy sources.
        The Secretary of the Navy is committing DON to transform its
    requirements-setting, acquisition, and contracting processes to
    incorporate energy efficiency into decisions for new systems and
    buildings. Our Preferred Supplier Program (PSP) was developed as a tool
    to reward contractors with favorable contract conditions that have
    demonstrated superior performance in the area of cost, schedule
    adherence, quality of product/services and business relations.
    Evaluation factors for energy efficiency performance include energy
    benchmarking, goal setting, and measurement and verification. PSP has
    been renamed Superior Supplier Program and transferred over to the
    Office of the Director, Defense Research and Engineering in early 2011.
    And in October of last year, the Secretary of the Navy Green Biz Opps
    site was launched in partnership with the Small Business Administration
    (SBA) as a way to partner with small businesses and highlight the
    opportunities within DON.
        Communication and awareness are critical to achieving the Secretary
    of the Navy energy goals. DON is exploring how to implement and
    maintain culture change initiatives, beginning with education and
    training, to ensure that energy management is understood by all
    personnel to be a priority in tactical, expeditionary, and shore
    missions. Energy awareness campaigns will be used to encourage personal
    actions that show commitment to energy program goals.
        DON will continue to cultivate strategic partnerships with existing
    and new organizations to leverage our energy goals. By partnering with
    Federal agencies, such as the Department of Energy, the Department of
    Agriculture, the National Aeronautics and Space Administration (NASA),
    and SBA, we are raising the awareness at all governmental levels of the
    strategic importance of energy within DON. In addition, we are working
    with academic institutions and private industry to bring innovative
    ideas and approaches to the forefront.
        Our budget request asks for continued support of these and similar
    projects in order to enhance our efficiency and maximize our move to
    greater independence and more resilient infrastructure.
                                    housing
        The following tenets continue to guide the Department's approach to
    housing for sailors, marines, and their families:
      --All servicemembers, married or single, are entitled to quality
            housing; and
      --The housing that we provide to our personnel must be fully
            sustained over its life.
        A detailed discussion of the Department's family and unaccompanied
    housing programs, and identification of those challenges, follows:
    Family Housing
        As in past years, our family housing strategy consists of a
    prioritized triad:
          Reliance on the Private Sector.--In accordance with longstanding
            DOD and DON policy, we rely first on the local community to
            provide housing for our sailors, marines, and their families.
            Approximately three out of four Navy and Marine Corps families
            receive a basic allowance for housing (BAH) and own or rent
            homes in the community. We determine the ability of the private
            sector to meet our needs through the conduct of housing market
            analyses that evaluate supply and demand conditions in the
            areas surrounding our military installations.
          Public/Private Ventures.--With the strong support from this
            subcommittee and others, we have successfully used public/
            private venture (PPV) authorities enacted in 1996 to partner
            with the private sector to help meet our housing needs through
            the use of private-sector capital. These authorities allow us
            to leverage our own resources and provide better housing faster
            to our families. Maintaining the purchasing power of BAH is
            critical to the success of both privatized and private-sector
            housing.
          Military Construction.--MILCON will continue to be used where PPV
            authorities don't apply (such as overseas), or where a business
            case analysis shows that a PPV project is not feasible.
        Our fiscal year 2012 budget includes $101 million in funding for
    family housing improvements (including planning and design). This
    request provides for the revitalization of more than 400 Navy and
    Marine Corps housing units in Japan, Spain, and Cuba. The budget
    request also includes $368 million for the operation, maintenance, and
    leasing of remaining Government-owned or controlled inventory. As of
    the end of fiscal year 2010, we have awarded 38 privatization projects
    involving more than 63,000 homes. These include more than 43,000 homes
    that will be constructed or renovated. (The remaining homes were
    privatized in good condition and did not require any work.) Through the
    use of these authorities we have secured approximately $9 billion in
    private-sector investment from approximately $1.6 billion of our funds,
    which represents a ratio of more than $7 in private-sector dollars for
    each taxpayer $1.
    Unaccompanied Housing
        Our budget request includes more than $267 million in funding for
    the construction of unaccompanied housing to support more than 2,300
    single sailors and marines. This includes $59 million to support
    requirements to continue implementation of the Commandant of the Marine
    Corps program to construct sufficient housing so that no more than two
    single marines are required to share a sleeping room. The budget
    request also includes an $81 million unaccompanied housing project in
    Norfolk, Virginia to support the Chief of Naval Operations commitment
    to achieve the Navy's ``Homeport Ashore'' objective by 2016.
        The following are areas of emphasis within the Department regarding
    housing for single sailors and marines:
          Provide Homes Ashore for Our Shipboard Sailors.--The Homeport
            Ashore Initiative seeks to provide a barracks room ashore
            whenever a single sea-duty sailor is in his or her homeport, so
            they need not live on the ship. The Navy has made considerable
            progress toward achieving this goal through MILCON,
            privatization, and intensified use of existing barracks
            capacity. The Chief of Naval Operations is committed to
            providing housing ashore for all junior sea-duty sailors by
            2016.
          Commandant's Bachelor Enlisted Quarters Initiative.--It is the
            Commandant of the Marine Corps' priority to ensure single
            marines are adequately housed. Thanks to your previous support
            of this initiative, the Marine Corps will make significant
            progress toward fulfilling this priority. MILCON funding since
            fiscal year 2008 for the Marine Corps barracks initiative will
            result in the construction of approximately 25,500 new
            permanent party spaces at multiple Marine Corps installations.
            Your continued support of this initiative in our fiscal year
            2012 proposal will allow us to construct an additional 800 new
            permanent party barracks spaces. With this funding we will stay
            on track to meet our 2014 goal. The fiscal year 2012 request
            for bachelor housing will provide two barracks projects at Camp
            Lejeune, North Carolina; and Quantico, Virginia. We are also
            committed to funding the replacement of barracks' furnishings
            on a 7-year cycle as well as the repair and maintenance of
            existing barracks to improve the quality of life of our
            marines. These barracks will be built to the 2+0 room
            configuration, as have all Marine Corps barracks since 1998.
            This is consistent with the core Marine Corps tenets for unit
            cohesion and teambuilding.
          Condition of Unaccompanied Housing.--The Department continues to
            address the challenge of improving the condition of existing
            Navy and Marine Corps unaccompanied housing. The Navy has
            increased its level of restoration and modernization funding
            targeted to unaccompanied housing across the Future Years'
            Defense Plan to ensure that 90 percent of the Navy's
            unaccompanied housing inventory is adequate by fiscal year
            2022. With the construction of a large amount of new housing
            under the aforementioned Commandant's Bachelor Enlisted
            Quarters Initiative, almost 90 percent of the Marine Corps'
            unaccompanied housing is now considered adequate.
                                  environment
        In fiscal year 2012, the DON is investing more than $1 billion in
    its environmental programs across all appropriations. This level of
    investment has remained relatively consistent over the past few years:
      --Fiscal year 2010--$1,117 million;
      --Fiscal year 2011--$1,094 million; and
      --Fiscal year 2012--$1,221 million.
        Additionally, the relative distribution of environmental funding
    across the environmental programs, as displayed within the following
    chart, has also remained stable.

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

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

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

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

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

                         GUAM RANGE ID AND ACQUISITION

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

                         ANTI-BALLISTIC MISSILE TREATY

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

                         ADDITIONAL COMMITTEE QUESTIONS

        For the information of the members, questions for the
    record should be submitted by the close of business on April
    15.
        [The following questions were not asked at the hearing, but
    were submitted to the Department for response subsequent to the
    hearing:]
                   Questions Submitted to Hon. Robert F. Hale
                   Questions Submitted by Senator Ben Nelson
        Question. For the past several years, the need for a new U.S.
    Strategic Command (STRATCOM) headquarters building has been apparent
    and identified as a requirement. The Department of Defense's (DOD's)
    budget seeks to fulfill that requirement by requesting authorization of
    $564 million for a new headquarters. As I understand the request, the
    full authorization is being requested this year and the appropriation
    will be incremental with the first phase being $150 million for fiscal
    year 2012. We all know that we are in a constrained budget and that
    hard choices are being made within DOD. This I know is a hard choice
    but one that is essential in protecting our national strategic missions
    for cyber, missile defense, and nuclear command and control now and in
    the future as these threats will not likely dissipate.
        Question. As I understand the funding process for this project, the
    funding is scheduled to be spread over a 3-year period. What are the
    benefits to spreading this funding over 3 years? And does this optimize
    the construction schedule? How?
        Answer. The benefits to spreading this funding over 3 years is that
    it is optimized and synchronized to the construction schedule. With
    this strategy, we obligate the construction funding at a pace
    consistent with the planned construction schedule. Programming the
    funding quicker than the three increments currently planned would be
    too early and would result in tying up valuable MILCON dollars
    unnecessarily. To the contrary, to shift the increments much beyond 3
    years would delay overall construction completion, as the construction
    schedule would out-pace the funding stream.
        Question. Is the full $150 million needed in fiscal year 2012? What
    would be the impact if the full $150 million were not realized? What
    would be the impact of any reductions in this funding in any year? Why
    is it not practical to just refurbish the current facility?
        Answer. Funding the first increment at less than the $150 million
    requested would likely result in the delay of the overall construction
    timeline. Any reduction in funding that would extend the funding
    increments much beyond 3 years would result in an extension to the
    construction schedule, thus delaying STRATCOM's move to its new
    facility and jeopardizing the viability of this mission so critical so
    America's national defense.
        We considered a number of alternatives for recapitalizing the
    STRATCOM complex at Offutt Air Force Base, Nebraska. Those options
    included building an entirely new facility, renovating a portion of the
    existing complex and constructing an addition to replace the portions
    of the existing complex not suited for renovation, and building an
    entirely new campus-like complex, with multiple facilities, over a
    number of years. In the end, the option to build an entirely new
    facility was the cheapest (when measured by both initial construction
    cost and by annual and periodic maintenance costs over the facility
    lifecycle), the quickest (in terms of overall construction duration),
    and least risky alternative (when measured by suitability for long-term
    STRATCOM mission and mission viability during the construction
    process).
                                     ______

                   Question Submitted by Senator Tim Johnson
                           electronic medical records
        The Air Force recently completed a site survey at Malmstrom Air
    Force Base, as part of the ongoing process to determine suitable basing
    for this repository. The communities of Malmstrom and Great Falls
    continue to be strongly supportive of situating it there. In fact,
    Montana State University in Great Falls has phenomenal online health
    information technology, medical billing and coding, and medical
    transcription courses. If selected, these courses would help to quickly
    train and support military and civilian personnel in these processes--
    what a perfect fit for the base, the community, and DOD.
        Question. Realizing that the final decision on basing assignments
    resides with the Secretary of Defense, and in light of the recent
    announcement, Mr. Hale, could you please expound on the nature of the
    facilities that are being looked at to house these electronic medical
    records repositories, and discuss the current timetable for
    implementation?
        Answer. The infrastructure capabilities of facilities within the
    United States, including Defense Information Systems Agency data
    centers, are being considered with regard to electronic medical records
    repositories. A chief consideration in the decisionmaking process will
    be the investment needed to accommodate capability requirements for the
    DOD/VA integrated electronic health record (iEHR). The Departments of
    Defense and Veterans Affairs will continue to collaborate on this
    decision. We anticipate the initial data center consolidation locations
    will be determined in fiscal year 2011. A timetable to support
    migration to these data centers will be established at that time.
                                     ______

                    Questions Submitted to Dr. Dorothy Robyn
                    Questions Submitted by Senator Jack Reed
        Question. I support this effort because it promotes the efficient
    administration and completion of Federal construction projects. It
    would also make sure workers are being treated fairly in terms of wages
    and benefits during these difficult economic times.
        What steps has the Department taken to implement this Executive
    order?
        Answer. DOD joined with other agencies and the Federal Acquisition
    Regulatory Council to develop Government-wide implementing regulations
    for Executive Order 13502. The Federal Acquisition Regulation (FAR)
    rulemaking process included going out for public comments, making
    changes based on the comments, and additional deliberations prior to
    publication of a final rule. The final rule amending the FAR was
    effective on April 13, 2010. The rule adds subpart 22.5--Use of Project
    Labor Agreements (PLAs) for Federal Construction Projects to the FAR
    which provides definitions, explains the policy and general
    requirements for project labor agreements. It also identifies a number
    of specific factors that agencies may consider in making a decision to
    require a PLA. The FAR rule provides standard solicitation provisions
    and contract clauses to facilitate implementation.
        Question. What guidance are you providing to the services to
    encourage them to use PLAs on MILCON projects?
        Answer. Executive Order 13502 was issued in February 2009
    encouraging agencies to consider requiring the use of PLAs with large-
    scale construction projects. In July 2009, the Office of Management and
    Budget issued a memorandum that required reporting of those contracts
    exceeding the $25 million threshold. The services report to the Office
    of the Under Secretary of Defense (Acquisition, Technology and
    Logistics), Director, Defense Procurement and Acquisition Policy on
    their large-scale construction projects on a quarterly basis.
        A new FAR implementing Executive Order 13502 was announced in April
    2010. The FAR rule provides guidance through standard solicitation
    provisions and contract clauses to facilitate implementation. The DOD
    organization with the majority of large construction contracts that
    exceed the $25 million threshold are the U.S. Army Corps of Engineers
    (USACE) and Naval facilities (NAVFAC). DOD organizations were
    encouraged to develop internal implementing policies for their
    organizations. The USACE procurement instruction letter was signed and
    became effective in October 2010; similar guidance was developed by
    NAVFAC in February 2011.

                              SUBCOMMITTEE RECESS

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

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

                                  ----------

                            THURSDAY, APRIL 14, 2011

                                           U.S. Senate,
               Subcommittee of the Committee on Appropriations,
                                                        Washington, DC.
        The subcommittee met at 2:02 p.m., in room SD-124, Dirksen
    Senate Office Building, Hon. Tim Johnson (chairman) presiding.
        Present: Senators Johnson, Nelson, Pryor, Tester, Kirk,
    Hutchison, Murkowski, Blunt, and Hoeven.

                             DEPARTMENT OF DEFENSE

                             Department of the Army

    STATEMENT OF HON. KATHERINE HAMMACK, ASSISTANT
                SECRETARY OF THE ARMY (INSTALLATION,
                ENVIRONMENT AND ENERGY)
    ACCOMPANIED BY:
            MAJOR GENERAL JAMES C. BOOZER, DIRECTOR OF OPERATIONS, OFFICE
                OF THE ASSISTANT CHIEF OF STAFF (ARMY INSTALLATION
                MANAGEMENT)
            MAJOR GENERAL RAYMOND W. CARPENTER, ACTING DIRECTOR, ARMY
                NATIONAL GUARD
            JAMES L. SNYDER, ASSISTANT CHIEF, ARMY RESERVE

                    OPENING STATEMENT OF SENATOR TIM JOHNSON

        Senator Johnson. Good afternoon. This hearing will come to
    order.
        I welcome everyone to today's hearing to discuss the
    President's fiscal year 2012 budget request for military
    construction (MILCON) and family housing for the Department of
    Army and the Department of the Air Force.
        We will start with the Army. Our witnesses will be
    Katherine Hammock, Assistant Secretary of the Army for
    Installations, Energy and Environment; Major General James C.
    Boozer, Director of Operations for the Army; Major General
    Raymond W. Carpenter, Acting Director for the Army National
    Guard; Mr. James L. Snyder, Assistant Chief of the Army
    Reserve.
        I would like to extend a personal welcome to General
    Carpenter, who is a fellow South Dakotan. I thank each of you
    for coming and I look forward to your testimony.
        I remind my colleagues that in order to reserve the
    majority of time for the questions, our procedure will be to
    have opening statements by the chairman and ranking member,
    followed by an opening statement from the Secretary and remarks
    from members of the panel. We will limit our first round of
    questions to 6 minutes per member, but we can have additional
    rounds, should we need them.

                               PREPARED STATEMENT

        If there are any of my colleagues that wish to have
    statements submitted for the record, they will be accepted for
    the record without objection.
        [A statement follows:]
                    Prepared Statement of Senator Roy Blunt
        Thanks, Mr. Chairman and I appreciate the opportunity to hear from
    our distinguished witnesses from both panels today.
        Missouri has two critically important bases in Whiteman Air Force
    Base and Fort Leonard Wood. I'm proud to represent the soldiers and
    airmen who serve at these facilities. Both have construction needs and
    I'm anxious to ensure that those needs are met to the greatest extent
    possible.
        Missouri is also home to nearly 31,000 Guardsmen and Reservists,
    men and women who our Nation has relied upon like no other time in our
    history during the past decade. We need to do right by them and I look
    forward to working with you to meet their needs as well.
        Obviously in today's fiscal environment it's more important than
    ever that we wisely invest our scarce resources. Ensuring that our
    soldiers and airmen are properly housed and have available amenities
    meets that test and I'm hopeful that this subcommittee will be able to
    do its work and deliver on those needs.
        In particular I want to make a note of the tornado damage incurred
    at Fort Leonard Wood earlier this year. I had a chance to visit the
    base in the wake of that disaster and I'm hopeful that the Army will
    come through with needed repairs and upgrades, especially with regard
    to the base's housing facilities, in the near future. I'd like to ask
    Assistant Secretary Hammack if she can follow up with me after this
    hearing with an update on what is being done in this regard.
        While I'm quite certain you already are in possession of these
    requests, I want to submit the highest priority requests from both
    Whiteman and Fort Leonard Wood for the record.
        Once again, thanks for the work that you're doing to make the
    difficult decisions on where to prioritize resources for our soldiers
    and airmen. They're our Nation's most valuable asset and they deserve
    whatever we can feasibly provide for them during these difficult
    economic times.
        [The following budget requests were submitted for the record from
    Fort Leonard Wood, Whiteman Air Force Base, and Missouri National
    Guard:]

    FORT LEONARD WOOD--PROJECT PRIORITY LISTING: COMBINED (FISCAL YEARS 2013-
                                2017 AND BEYOND)
    ------------------------------------------------------------------------
               Project
      2010     number       Proponent          Project           Command
    priority    (PN)                         description
    ------------------------------------------------------------------------
          178184      DPW.............  Permanent Party    IMCOM
                                         Barracks.
          265234      MEB.............  92d MP Bn Vehicle  FORSCOM
                                         Maintenance
                                         Facility.
          365679      MEB.............  5th En Bn & 50th   FORSCOM
                                         MRBC Vehicle
                                         Maintenance
                                         Complex.
          465236      MEB.............  92d MP Co          FORSCOM
                                         Operations
                                         Complex.
          566099      MEB.............  94th EN BN         FORSCOM
                                         Complex Phase 2.
          654489      DPW.............  Training Barracks  TRADOC
                                         Complex III,
                                         Phase 2.
          750486      DPW.............  Training Barracks  TRADOC
                                         Complex II,
                                         Phase 2.
          871502      DPW.............  AIT Barracks       TRADOC
                                         Complex 2, Phase
                                         I.
          955315      DPW.............  Training Barracks  TRADOC
                                         Complex VIII,
                                         Phase 1.
         1071684      DPW.............  AIT Barracks       TRADOC
                                         Complex 2, Phase
                                         II.
         1162160      DPW.............  Training Barracks  TRADOC
                                         Complex VIII,
                                         Phase 2.
         1275019      DPTM............  Engagement Skills  TRADOC
                                         Simulator
                                         (Training
                                         Support Center).
         1378185      DPW.............  Permanent Party    IMCOM
                                         Barracks Ph 2 on
                                         Indiana.
         1478609      MEB.............  Deployment         FORSCOM
                                         Railhead and
                                         Warehouse.
         1578610      MEB.............  Deployment         FORSCOM
                                         Complex at
                                         Airfield.
         1633713      USAES/DOL/Joint.  Dining Facility    IMCOM
                                         TA-244.
         1775475      USAMPS/USMC.....  Marine/MP EVOC     TRADOC
                                         Driving Range.
         1870362      USAES...........  Joint Assault      TRADOC
                                         Bridge & Armored
                                         Breach Vehicle.
         1973998      MWR.............  Fitness Center,    IMCOM
                                         MANSCEN.
         2075095      MEB.............  Supply Support     FORSCOM
                                         Activity
                                         Warehouse.
         2169357      DPW.............  Installation       IMCOM
                                         Infrastructure
                                         Upgrades.
         2251908      USAES...........  Engineering Veh    AMC
                                         Maint Facility--
                                         TA-244.
         2358904      USACBRNS........  58th Trans Bn Veh  AMC
                                         Maint Facility.
         2462560      DOL.............  Warehouse          IMCOM
                                         Facilities Phase
                                         1.
         2575675      RMD.............  Revitalize         TRADOC
                                         Modified Record
                                         Fire Range, Rg
                                         20.
         2619555      USAES...........  Combat Bridge      TRADOC
                                         Complex TA-250.
         2725927      USAES...........  Sapper Leader      TRADOC
                                         Course Complex.
         2875676      USAMPS/RMD......  Scout/             FORSCOM
                                         Reconnaissance
                                         Gunnery Complex.
         2971621      RMD.............  Explosive          TRADOC
                                         Ordinance
                                         Clearance Agent
                                         (EOCA) Course.
         3059546      USAMPS..........  USA MPS Crime      TRADOC
                                         Scene
                                         Investigation
                                         Facility.
         3175660      DES.............  Fire Station No.   IMCOM
                                         3 and Admin.
                                         Building.
         3265680      MEB.............  5th EN BN Bn and   FORSCOM
                                         Co Operations.
         3319551      USAES...........  Field Engineer     TRADOC
                                         Complex Rg 33.
         3475705      DPW.............  43rd AG Barracks,  TRADOC
                                         Classrooms.
         3559547      MARINE..........  Vehicle Maint      TRADOC
                                         Facility--USMC.
         3675708      USAMPS..........  Large MOUT.......  TRADOC
         3761218      NCOA............  NCOA Training      TRADOC
                                         Complex.
         3865418      USAES...........  Vehicle Wash       IMCOM
                                         Facility at TA-
                                         244.

             PROJECTS ABOVE THIS WILL BE SUBMITTED FOR FISCAL YEAR 2017.
            PROJECTS BELOW THIS LINE REMAIN AS ON THE LIST FOR SUBMISSION
                                   IN FUTURE YEARS.

         395          MARINE..........  Consolidated       TRADOC
                                         Marine
                                         Maintenance
                                         Training
            2                            Facility.
         405          MSCoE...........  International      TRADOC
                                         Student Liaison
                                         Office.

            5
         417          USAMPS/RMD......  Range 13-3 Story   TRADOC
                                         Shoot House.

            5
         425          DPW.............  Force Protection   IMCOM
                                         Barriers.

            8
         435          DPTM............  Force Mod          IMCOM
                                         Deployment
                                         Complex.

            9
         447          USAMPS..........  Joint Nonlethal    TRADOC
                                         Training Center.

            1
         456          MEB.............  FORSCOM Engineer   FORSCOM
                                         Training Areas.

            5
         467          CDID............  CDID Building....  IMCOM

            5
         475          USACBRNS........  Joint Service      TRADOC
                                         Chemical
                                         Training Center.

            8
         487          USAES...........  Warmup Shelters    IMCOM
                                         at TA-236.

            5
         497          USAES...........  TA-244 Latrine     IMCOM
                                         and Water
                                         Facilities.

            5
         507          MEB.............  4th MEB Gymnasium  IMCOM

            5
         517          MEB.............  4th MEB Chapel...  IMCOM

            5
         527          MEB.............  4th MEB Dining     IMCOM
                                         Facility.

            5
         537          USAMPS..........  Forensic Science   TRADOC
                                         Training
                                         Facility.

            5
         547          RMD.............  Relocate Robotic   TRADOC
                                         Training Area.

            5
         557          MEB.............  Tank Trails--4th   FORSCOM
                                         MEB to TA-244.

            5
         567          DPTM............  Air Traffic        IMCOM
                                         Control Tower.

            5
         577          MEDDAC..........  Dental Clinic at   TRADOC
                                         43 AG.

            5
         587          DPW.............  Warehouse          IMCOM
                                         Facility Phase 2.

            5
         597          DPW.............  Range Road         IMCOM
                                         Improvements
                                         Phase 1.

            5
         607          DPW.............  Upgrade            IMCOM
                                         Constitution
                                         Avenue Bypass.

            5
         616          EOC.............  Emergency          IMCOM
                                         Operations
                                         Center/Post HQ.

            5
         626          DOL.............  Logistics          IMCOM
                                         Maintenance
                                         Facility.

            5
         635          MWR.............  Pippen Youth       IMCOM
                                         Center.

            9
         646          MEB.............  Operational        FORSCOM
                                         Readiness
                                         Training Center.

            2
         656          DES.............  Directorate of     IMCOM
                                         Emergency
                                         Services.

            0
         667          RMD.............  TA-236 Classroom   TRADOC
                                         (Driving Skills
                                         Pad).

            5
         676          USAMPS..........  DA Police Academy  TRADOC
                                         Facility.

            2
         685          DPW.............  Improve/Widen FLW  IMCOM
                                         1.

            2
         697          DENTAC..........  Dentac             IMCOM
                                         Administrative
                                         Facility.

            5
         707          DPW.............  Education Center.  IMCOM

            7
         717          DPW.............  Band Building....  IMCOM

            8
         726          DPW.............  Soldier Readiness  IMCOM
                                         Processing
                                         Center.

            5
         737          DOL.............  Ammunition         AMC
                                         Bunkers.

            8
         745          DPW.............  Training Barracks  TRADOC
                                         Complex IV,
                                         Phase 1.

            2
         756          DPW.............  Training Barracks  TRADOC
                                         Complex IV,
                                         Phase 2.

            2
         765          DPW.............  Training Barracks  TRADOC
                                         Complex V, Phase
                                         1.

            2
         776          DPW.............  Training Barracks  TRADOC
                                         Complex V, Phase
                                         2.

            2
         785          DPW.............  Training Barracks  TRADOC
                                         Complex VII,
                                         Phase 1.

            5
         796          DPW.............  Training Barracks  TRADOC
                                         Complex VII,
                                         Phase 2.

            2
         805          DPW.............  Training Barracks  TRADOC
                                         Complex IX,
                                         Phase 1.

            5
         816          DPW.............  Training Barracks  TRADOC
                                         Complex IX,
                                         Phase 2.

            2
         825          DPW.............  Training Barracks  TRADOC
                                         Complex X, Phase
                                         1.

            5
         836          DPW.............  Training Barracks  TRADOC
                                         Complex X, Phase
                                         2.

            2
         847          DPW.............  AIT Complex 3, Ph  TRADOC
                                         1.

            7
         857          DPW.............  AIT Complex 3, Ph  TRADOC
                                         2.

            7
         867          DPW.............  AIT Complex 3, Ph  TRADOC
                                         3.

            7
    ------------------------------------------------------------------------
           Approved/Disapproved.
           David E. Quantock, Major General, USA, Commanding. Date: August
             25, 2010.

                                  ----------

          Whiteman Air Force Base--Priority List and Current Missions

                                  ----------

                               MISSOURI NATIONAL GUARD--LONG RANGE CONSTRUCTION PLAN 2010
    ----------------------------------------------------------------------------------------------------------------
                Project
    Priority     number           City               Name              Type            Facility            FED
    ----------------------------------------------------------------------------------------------------------------
          1290186A       Springfield......  Readiness Center.  MILCON..........  29809-00001.....      $14,442,000
          2290117A       Kansas City,       Readiness Center.  MILCON..........  29B42-00001.....       13,095,000
                          North.
          3290221A       WAFB.............  AASF PH II.......  MILCON..........  29B60-AASFW.....       13,794,000
          4290179A       North St. Louis..  Armed Forces       MILCON..........  29C64-00001.....       12,914,000
                                             Reserve Center.
          5290211A       Macon............  Field Maintenance  MILCON..........  29B78-OMS8A.....        5,670,600
                                             Shop.
          6290222A       Fort Leonard Wood  RTI Phase II.....  MILCON..........  29C77-RTI02.....       24,871,000
          7290009A       Kansas City......  Field Maintenance  MILCON..........  29B41-OMS1A.....       17,093,000
                                             Shop.
          8290219A       Macon............  Land Acquisition.  MILCON..........  29B78-1LAND.....        3,000,000
          9290187A       Springfield......  Field Maintenance  MILCON..........  29C20-OMS16.....        5,709,400
                                             Shop.
         10290109A       Springfield......  AVN AVCRAD EXP/    MILCON..........  29D01-00001.....       51,533,000
                                             ALT PHASE II.
         11290111A       Springfield......  AVN AVCRAD EXP/    MILCON..........  29D01-00001.....       39,368,000
                                             ALT PHASE IV.
         12290223A       Camp Crowder.....  Barracks #3......  MILCON..........  29155-00753.....        1,500,000
         13290224A       Camp Crowder.....  Barracks #4......  MILCON..........  29155-00754.....        1,500,000
    ----------------------------------------------------------------------------------------------------------------
           Stephen L. Danner, Brigadier General, Missouri National Guard, the Adjutant General. Date: March 30,
             2010.

        Senator Johnson. The Army's request for MILCON, family
    housing, and base realignment and closure (BRAC) is $5.3
    billion, 33 percent less than the fiscal year 2011 request.
    That is a very large reduction and I hope the panel will
    address some of the reasons for it. I note that the Army has a
    number of major initiatives underway that are not reflected in
    this budget, but will impact future MILCON requirements. These
    include the decision to retain three brigade combat teams in
    Europe instead of four, and the Secretary's announcement of a
    reduction of 27,000 in Active Army end strength by 2015. I will
    be very interested to hear how the Army is preparing to meet
    these challenges.
        Senator, Kirk, would you care to make an opening statement?

                         STATEMENT OF SENATOR MARK KIRK

        Senator Kirk. Thank you, Mr. Chairman and I am very happy
    to be here in my first time role as a ranking member.
        I, too, share your concerns about the implications of the
    Department's April 8 decision on the brigade combat teams in
    Europe and so my specific question will be the implications for
    Schweinfurt and Bamberg and what that means for this
    subcommittee and this future budget.
        Also looking at the Government Accountability Office report
    on our requirements, in general, I, in my experience, sort of
    see Europe becoming a huge military gas station for onward
    deployment to Unified Protector or New Dawn operations or
    Operation Enduring Freedom. We do have a 27,000-man reduction
    and so it's the impact on the MILCON budget is something that I
    would like to hear about.
        We have expressed our concerns about the full-tour norm
    proposal for Korea, which looks extraordinary expensive. And
    when I have seen the--also the move that has no real
    controversy from the Seoul area to the Camp Humphreys area, and
    I was struck in my preparation for this hearing that the
    overseas housing allowance for Seoul is $3,800 per soldier, per
    month, but the Camp Humphreys number is $4,200 and that
    surprised me, given the relocation.
        It does appear that, as the Army is becoming much smaller,
    it may almost be Rumsfeldian in its level as we go back to
    that. And I would like to see a longer term plan, because it
    does appear that the Army will be much heavier on aviation
    brigades, air defense artillery, including theater high-
    altitude area defense, and the personnel to support that.
        I also looked at the Air Force side, which we are going to
    have in the second panel, and looking for an Andersen Master
    Plan, my team gave us the original one, which is kind of
    chamber of commerce-esque, but there is one chart in here and
    as I did with our Office of the Secretary of Defense folks, to
    lay out the more comprehensive chart for Guam to see if we
    could get that, my final concern with regard to the Air Force
    is the growing role of unmanned aerial vehicle systems and
    looking at an unmanned beddown plan that also includes the Air
    National Guard, and see if we could have that emerge from the
    hearings.
        [The information was not available at press time.]
        And with that, Mr. Chairman, back to you.
        Senator Johnson. Secretary Hammack, General Boozer, General
    Carpenter, and Mr. Snyder, thank you again for appearing before
    our subcommittee. Your prepared statements will be placed in
    the record, so I encourage you to summarize your remarks to
    allow more time for questions.
        Secretary Hammack, please proceed.

                  SUMMARY STATEMENT OF HON. KATHERINE HAMMACK

        Ms. Hammack. Thank you, Chairman Johnson, Senator Kirk, and
    other members of the subcommittee.
        We greatly appreciate your support of the Army's MILCON
    programs. These investments have provided our soldiers the
    facilities they need to fight in two wars and hopefully return
    from two wars. But at the same time, we are working to reduce
    our energy footprint and be good stewards of the environment.
        I do want to talk briefly about the impact that a
    continuing resolution has upon our ability to enact the fiscal
    year 2011 MILCON budget. Currently, we have $1.9 billion in
    projects that are ready to award. These are projects that have
    been bid, they are thoroughly designed, and some of the bids
    are aging.
        Unfortunately, these are projects, since we have been
    unable to award to date, that are jobs waiting to be awarded.
    And these are constituents in your States: $300 million in
    Alaska, $198 million in Texas, and I could go on. Every State
    of just about every member on this subcommittee has projects
    that are waiting to be awarded. So I ask for your support to
    enact legislation today that enables us to move forward with
    fiscal year 2011.
        But keep in mind that this does not put our fiscal year
    2012 projects in jeopardy. Even some of the phased projects are
    able to be phased together and in fact there may even be
    efficiencies by grouping these closer together. So we would
    hope, not only that you enact legislation to enable us to
    proceed with fiscal year 2011, but that our fiscal year 2012
    budget is approved in an expeditious manner so that we can
    proceed with that.
        As you said, we did submit written statements, so I will
    focus on only a few areas, the first being MILCON, the second
    efficiencies, and the third being energy and the environment.
        As you stated, our budget is $5.3 billion for MILCON in
    fiscal year 2012, and that is a 33-percent reduction or a $2.6
    billion reduction from the previous year. A portion of that,
    approximately $1 billion of that reduction comes from BRAC, and
    the fact that we are completing BRAC and will be complete by
    September 15 of this year means that we are not asking for more
    MILCON dollars for BRAC. Another portion has to do with us
    completing programs, such as the barracks buyout or the Army's
    growth to 45 brigade combat teams. We are completing those
    projects.
        But we did implement an efficiency in deferring $1.4
    billion in construction. And what we deferred were projects
    that we considered to be low to medium risk that, to impacting
    mission, are not mission-critical facilities. They are
    important to the Army and we are reevaluating everything for
    the fiscal year 2013 program year.
        One of the things we are doing for fiscal year 2013 is
    reexamining our facility investment strategy. We are looking at
    the kinds of facilities we build, we are looking at the energy
    efficiency of the facilities, we are looking at the size of the
    facilities and we are also looking to invest more money in
    sustainment, restoration, and modernization so we can make
    better use of facilities that we already have. So although this
    is a reduced MILCON request for us, we do not feel that it
    jeopardizes the Army mission.
        We have also returned $1 billion over the last 2 years from
    bid savings. We have seen, in this economic decline, that the
    cost of constructing the projects is lower than the bid or the
    programmed amount. So we have seen savings that we are
    returning.

                                  BID SAVINGS

        We have retained a small portion of the bid savings, and
    those we are using for unexpected requirements such as some of
    the problems we saw at Fort Leonard Wood where we had to
    rebuild some facilities because of tornado damage, we had some
    other emergency requirements in the Southwestern United States,
    some are going to energy efficiency or other unexpected
    reprogramming requests.
        We are examining all solutions, and we are looking for
    efficiencies, and we are looking for cost savings.
        In energy, we are building more efficient structures, more
    efficient power generation, and we are also looking at the
    efficiency of vehicles that we are investing in because we are
    aware that efforts to reduce energy here in the United States
    and at home station also has effect on how we use energy in
    contingency operations.
        Our cost for energy is approximately $4 billion a year and
    so we are focused on operational energy savings as well as we
    invest in more efficient structures, vehicles, and other
    technologies for our soldiers.
        The Army environmental program needs an investment of $1.4
    billion to ensure that we have adequate environmental resources
    to support the mission. Some of this is going to BRAC so that
    we are able to conduct remediation efforts so that the
    properties can be utilized by the local community for a
    productive purpose.

                               PREPARED STATEMENT

        I would like to give time for the fellow panel members to
    talk, so in close, I look forward to working closely with you
    and the subcommittee and answer any questions you might have.
    Thank you.
        [The statement follows:]
                  Prepared Statement of Hon. Katherine Hammack
                                  introduction
        Good afternoon Chairman Johnson, Senator Kirk, and members of the
    subcommittee. I appreciate the opportunity to explain the Army's fiscal
    year 2012 budget needs and requirements.
        The Army's fiscal year 2012 installations management budget request
    will continue to invest in facilities infrastructure required to
    support highly visible and synchronized initiatives of base realignment
    and closure (BRAC), growth of the force to 45 brigade combat teams with
    an end strength of 547,400 soldiers, transformation to a globally
    postured and versatile modular force, and the Reserve components
    transformation from a strategic force to an operational force. Your
    subcommittee's commitment to our soldiers, families, and civilians and
    support of the Army's military construction (MILCON) program is deeply
    appreciated. The Army's strength is its soldiers--and the families and
    Army civilians who support them. They are and will continue to be the
    centerpiece of our Army.
        The level of investment required to complete Grow the Army (GTA),
    global defense posture realignment (GDPR), and BRAC is declining. This
    permits the Army to focus on the funding to recapitalize and modernize
    legacy facilities, construct new facilities to eliminate deficit
    requirements, such as quality of life, and complete both permanent
    party and training barracks buy-out programs. Continued timely and
    predictable funding is critical as we transition from a period of
    prolonged conflict to one of increased stability while continuing to
    focus on rebalancing the force and maintaining a combat edge developed
    through a decade of war.
                      impacts of the continuing resolution
        Under the current continuing resolutions, the Army is unable to
    proceed with the MILCON projects we requested more than 1 year ago--
    projects that are needed to continue the momentum required to meet our
    goals. We have approximately $1.8 billion of Army MILCON projects--
    across all components--that are ready to award pending receipt of an
    appropriations bill or new start authority. As long as new starts are
    prohibited, we risk increased cost to re-advertise projects, shortened
    construction seasons--especially in northern climes, and delays to
    ongoing consolidation and stationing actions. So, I strongly urge the
    subcommittee to work hard to pass the fiscal year 2011 appropriation
    bills.
                                    overview
        The Army's fiscal year 2012 President's budget requests $5.3
    billion for MILCON, Army family housing (AFH), and BRAC, which is $2.6
    billion less or a 33-percent reduction from the fiscal year 2011
    request. This represents 3.6 percent of the total Army budget. Of the
    $5.3 billion request, $3.2 billion is for the Active Army, $774 million
    is for the Army National Guard, $281 million is for the Army Reserve,
    $300 million is for BRAC, and $682 million is for AFH. Although the
    overall MILCON funding level declines due to completion of BRAC
    construction and reduced investments in major initiatives such as GTA
    and GDPR, the Army continued to follow the ``pillars of priority'' in
    development of the fiscal year 2012 MILCON program which supports Army
    imperatives of sustain, prepare, reset, and transform.
        The five pillars of priority are the foundation of the MILCON
    program. The pillars address all categories of facilities in the Army
    facilities portfolio for Active and Reserve component forces. The
    pillars are:
          Global Defense Posture Realignment/Grow the Army.--GDPR
            construction provides facilities to ensure Army forces are
            properly positioned worldwide in support of the National
            Military Strategy. GTA supports the fiscal year 2013 Army end
            strength of 1,111,600 (547,000--Active Army; 358,000--Army
            National Guard; and 206,000--Army Reserve) necessary to
            increase Active component dwell time to 1:2 years and Reserve
            component dwell time to 1:4 years. Construction provides
            facilities for brigade combat teams and combat support/combat
            service support units activated as part of GTA. The Secretary
            of Defense recently announced a reduction of 27,000 in Active
            Army end strength planned for 2015. Unit level details of this
            reduction, and therefore impacts to facilities, will not be
            known for some time.
          Transformation.--Supports the Army's transformation to a modular
            force, enables critical force structure initiatives, and
            eliminates inadequate permanent party and trainee barracks. The
            last inadequate permanent party spaces are planned to be
            removed after the new barracks are fully occupied in fiscal
            year 2015, if we have new start authority for our fiscal year
            2011 projects.
          Modernization.--Supports ongoing investment in recapitalization
            of operations infrastructure and quality of life facilities.
          Training Support.--Supports ongoing investment in modernization
            and revitalization of Army training ranges, training centers,
            and supporting infrastructure.
          Strategic Readiness.--Supports the modernization and
            recapitalization of the Army's industrial base, pre-positioned
            stock facilities, and transportation infrastructure.
        In addition to the $5.3 billion investment in our MILCON programs,
    the Army is sustaining its existing facilities by requesting $3.4
    billion in the President's budget for sustainment, restoration, and
    modernization and demolition. The request is $2.5 billion for the
    Active Army, $618 million for the Army National Guard, and $255 million
    for the Army Reserve.
        The fiscal year 2012 base operations support (BOS) program request
    is $9.3 billion (Active Army--$7.7 billion; Army Reserve--$0.6 billion;
    Army National Guard--$1 billion), an increase of $181 million more than
    the President's fiscal year 2011 budget request and a decrease of $1.5
    billion from fiscal year 2010 execution. The Army anticipates lower BOS
    requirements associated with efficiencies, installation closures
    associated with BRAC and the missions transferred to other services
    under joint basing. BOS is vital in all aspects of mission readiness
    and training, provides for operating and maintaining installations that
    serve as our Nation's power projection platforms, and provides
    essential services and programs promoting quality of life for soldiers,
    families, and civilians--essentially, the Army installations equate to
    the Army's home and workplace for soldiers, family members, and
    civilians.
        The Army is executing a tightly woven plan integrating BRAC, GDPR/
    GTA, and transformation to a modular force as facilitated by MILCON,
    sustainment, restoration, and modernization, and BOS. The strategy
    includes aligning facilities to support a U.S.-based force structured
    as an expeditionary Army; completing facilities and moving personnel to
    comply with BRAC 2005 law by 2011; and completing GDPR/GTA by 2013.
    Facilities modernization for modular force units converted from the
    legacy force structure extends beyond 2016. The fiscal year 2012 MILCON
    request is crucial to the success of the Army's strategic imperatives
    to sustain, prepare, reset, and transform the force.
                        fiscal year 2012 budget request
    Military Construction, Army
        The Active Army fiscal year 2012 MILCON request is for $3,236
    million (for appropriation and authorization of appropriations) to
    support the army imperatives of sustain, prepare, and transform.
        Grow the Army ($164 Million/5 Percent).--The GTA request in fiscal
    year 2012 funds four projects. The total includes $137 million for
    operations facilities, $23 million for a training barracks, and $3.6
    million for one operational support facility. These facilities are
    essential to support growth in the Army's combat support and combat
    service support force structure and establish the appropriate training
    support infrastructure for a 45-brigade combat team Active Army.
        Global Defense Posture Realignment ($178 Million/6 Percent).--The
    request includes $80 million for barracks, an entry control point, and
    the third phase of the drainage system at Bagram Air Base, as well as
    $49 million for a brigade complex at Fort Bragg as part of the Army
    Patriot units' global realignment, and $49 million for a maintenance
    facility at Fort Leonard Wood.
        Transformation ($1.165 Million/36 Percent).--The fiscal year 2012
    request of $639 million supports the stationing of units in support of
    weapons systems; theater high-altitude area defense; joint land attack
    cruise missile defense elevated netted sensor; combat aviation
    brigades; and enhanced range multipurpose unmanned aerial vehicle
    units. Another $526 million will provide permanent operations and
    maintenance facilities and barracks to support the conversion of
    existing forces into new modular force units for the Active component.
    The Army strategy is to use existing facility assets to support
    transformation where feasible and program new construction projects
    when existing facilities are inadequate.
        Barracks Modernization ($296 Million/9 Percent).--The fiscal year
    2012 request will provide for 3,482 new permanent party barracks spaces
    that will meet Department of Defense ``1 + 1'' or equivalent standard
    and complete the permanent party barracks buyout program by fiscal year
    2013 and beneficial occupancy by fiscal year 2015. In addition to the
    barracks modernization program, additional barracks projects are
    included in the fiscal year 2012 request that support GTA,
    transformation, and modernization pillars. These projects are located
    at Joint Base Lewis-McChord, Forts Bliss, Carson, and Knox, Germany,
    Honduras, and Korea. The total fiscal year 2012 investment in permanent
    party barracks is $562 million.
        Training Barracks Modernization ($59 Million/2 Percent).--The
    fiscal year 2012 request will provide 1,140 new training barracks
    spaces for our soldiers that meet applicable standards. One trainee
    barracks complex is at Fort Jackson. In addition to the training
    barracks modernization program, a second trainee barracks complex at
    Fort Benning is funded under the GTA pillar. The total fiscal year 2012
    investment in training barracks is $82 million.
        Modernization ($685 Million/21 Percent).--The fiscal year 2012
    request consists of 30 projects with investments of $258 million for
    operations facilities, $321 million for operational support facilities,
    and $106 million for quality-of-life projects.
        Training Support ($340 Million/11 Percent).--Training support
    facilities include training ranges to support multiple weapon systems,
    land acquisitions, and other soldier training facilities.
        Strategic Readiness ($74 Million/2 Percent).--Fiscal year 2012
    represents the first year the Army will invest in industrial base and
    deployment facilities under the Strategic Readiness Initiative. Prior
    to fiscal year 2012, these types of facilities fell under general
    recapitalization and modernization of aging facilities. Five
    transportation infrastructure projects will be constructed to support
    railhead, deployment, and supply operations, as well as a Maneuver
    Systems Sustainment Center project at Red River Army Depot.
        Other Support Programs ($275 Million/8 Percent).--The fiscal year
    2012 budget includes $230 million for planning and design. As executive
    agent, the Army also provides oversight of design and construction for
    projects funded by host nations. The fiscal year 2012 budget requests
    $25 million for oversight of host nation funded construction for all
    services in Japan, Korea, and Europe. The budget request also contains
    $20 million for unspecified minor construction to address unforeseen
    critical needs.
    Military Construction Efficiencies
        The Army decremented the Active Army program by $200 million in
    fiscal year 2012. Although described as an efficiency, the decrement
    action initiates the Army's relook of its facilities investment
    strategy--a strategy that will decrease new construction and increase
    use and maintenance of the current inventory of real property in a
    manner that best supports the Army's mission.
        Over the next months the Army will assess an increased use of the
    Army's restoration and modernization funding program to complement
    MILCON in a manner that optimizes scarce investment dollars. If after
    reassessment, the decremented projects are found to be mission critical
    MILCON requirements, they will be inserted back into the program at the
    next opportunity.
    Military Construction, Army National Guard
        The Army National Guard fiscal year 2012 MILCON request of $774
    million (for appropriation and authorization of appropriations) is
    focused on GTA, modernization, transformation, training support, and
    other support programs.
        Grow the Army ($101 Million/14 Percent).--The fiscal year 2012
    budget request includes $101 million for 11 energy-efficient readiness
    centers that will support the Army National Guard's end strength growth
    and ability to react to high levels of force deployment.
        Modernization ($198 Million/25 Percent).--The Army National Guard
    budget request also includes $198 million to replace 11 obsolete and
    energy-inefficient readiness centers. There are five readiness centers
    and one Armed Forces Reserve center, one maintenance facility, one Army
    aviation support facility, one U.S. Property and Fiscal Office, and one
    utilities replacement project that will provide modernized facilities
    to enhance the Guard's operational readiness.
        Transformation ($198 Million/25 Percent).--The budget request
    offers the Army National Guard the opportunity to reach higher levels
    of readiness by equipping Army National Guard units on a comparable
    level with the Active component. The request is comprised of 10
    projects which include three tactical unmanned aircraft system
    facilities, five readiness centers, one Army aviation support facility,
    and one field maintenance shop.
        Training Support ($245 Million/32 Percent).--In fiscal year 2012,
    the Army National Guard is requesting $245 million for 16 projects
    which will support the training of its operational force. These funds
    will provide the facilities soldiers require as they train, mobilize,
    and deploy. Included are five operations readiness and training
    complexes, seven range projects, one maneuver area training and
    equipment site, one railhead expansion and container facility, and two
    deployment processing facilities.
        Other Support Programs ($32 Million/4 Percent).--The fiscal year
    2012 Army National Guard budget also contains $20 million for planning
    and design of future projects and $12 million for unspecified minor
    MILCON to address unforeseen critical needs.
    Military Construction, Army Reserve
        The Army Reserve fiscal year 2012 MILCON request for $281 million
    (for appropriation and authorization of appropriations) is for
    modernization, training support, strategic readiness, and other support
    programs.
        Modernization ($216 Million/77 Percent).--In fiscal year 2012, the
    Army Reserve will invest $216 million in facilities that prepare our
    soldiers for success in current operations. The construction of 10 new
    Army Reserve centers and one Armed Forces Reserve center will provide
    the modernized training classrooms, simulations capabilities, and
    maintenance platforms that support the Army Force Generation cycle and
    the ability of the Army Reserve to provide trained and ready soldiers
    for Army missions when called.
        Training Support ($28 Million/10 Percent).--The budget request of
    $28 million provides for three ranges that enable soldiers to hone
    their combat skills. It also provides for construction of the final
    phase of a noncommissioned officer academy classroom/training billets
    complex that, when completed, will allow for a modernized training
    environment for training.
        Strategic Readiness ($5 Million/2 Percent).--The request includes
    $5 million for a containerized loading facility supporting mobilization
    and demobilization missions of the Reserve component.
        Other Support Programs ($32 Million/11 Percent).--The fiscal year
    2012 Army Reserve budget request includes $29 million for planning and
    design of future year projects and $3 million for unspecified minor
    MILCON to address unforeseen critical needs.
    Army Family Housing
        The Army's fiscal year 2012 budget includes $681.8 million for the
    Army's investment in and operation of its worldwide inventory of family
    housing assets. The Army relies first on the local economy to provide
    housing for our soldiers. When housing on the economy is not available,
    the Army provides housing by various means including Government-owned,
    privatized, and leased housing. The Army has successfully privatized 98
    percent of its housing assets inside the United States, while overseas
    we primarily house families in Government-owned and leased quarters.
        Residential Communities Initiative.--In 1999, the Army began
    privatizing housing assets and the Residential Communities Initiative
    (RCI) continues to provide quality housing which soldiers and their
    families and senior single soldiers can proudly call home. The Army
    leverages appropriated funds and existing housing by engaging in 50-
    year partnerships with nationally recognized private real estate
    development, property management, and home builder firms to construct,
    renovate, repair, maintain, and operate housing communities.
        The RCI family housing is in 44 locations, with a projected end
    state of more than 85,000 homes--98 percent of the on-post family
    housing inventory inside the United States. Initial construction and
    renovation investment at these 44 installations is estimated at $12.7
    billion over a 3- to 14-year initial development period, which includes
    the Army's contribution of close to $2 billion. During the 12 years
    since 1999 through 2010, our partners have constructed more than 25,000
    new homes, and renovated another 19,000 homes.
        The RCI program for senior unaccompanied housing includes four
    installations for a total of 1,394 accommodations for senior single
    soldiers in grade staff sergeant and above including officers at
    locations where there is a deficit of adequate accommodations off post.
    The four locations are Forts Irwin, Drum, Bragg, and Stewart.
        Army Family Housing Construction ($186.9 Million/27 Percent).--The
    Army's fiscal year 2012 family housing construction request is $186.9
    million (for authorization of appropriation, and appropriation) to
    continue our significant investment in our soldiers and their families.
    This supports our goal to sustain Government-owned housing and
    eliminate our remaining inadequate inventory at enduring overseas
    installations.
        The family housing construction program includes $76 million for
    traditional MILCON to provide 128 new homes in Germany, and to acquire
    10 acres of land in Brussels for future construction so that the Army
    can eliminate seven high-cost leased homes that cost the Army more than
    $1 million annually. The request also includes $103 million for
    improvements to 276 family homes in Germany, and $7.9 million for
    planning and design.
        Army Family Housing Operations ($494.8 Million/73 Percent).--The
    Army's fiscal year 2012 family housing operations request is $494.8
    million (for appropriation and authorization of appropriations). This
    account provides for operations, utilities, maintenance and repair,
    leased family housing, and management of RCI. This request supports
    almost 16,000 Army-owned homes, in the United States and in foreign
    countries, as well as almost 8,000 leased residences and provides
    Government oversight of more than 80,000 privatized homes.
        Operations ($85.4 Million).--The operations account includes four
    subaccounts--management, services, furnishings, and a small
    miscellaneous account. All operations subaccounts are considered ``must
    pay accounts'' based on actual bills that must be paid to manage and
    operate the AFH-owned inventory.
        Utilities ($73.6 Million).--The utilities account includes the cost
    of delivering heat, air conditioning, electricity, water, and
    wastewater support for family housing units. The overall size of the
    utilities account is decreasing in proportion with the reduction in
    supported inventory due to RCI.
        Maintenance and Repair ($105.7 Million).--The maintenance and
    repair account supports annual recurring projects to maintain and
    revitalize AFH real property assets. Since most family housing
    operational expenses are fixed, maintenance and repair is the account
    most affected by budget changes. Funding reductions result in slippage
    of maintenance projects that adversely impact soldier and family
    quality of life.
        Leasing ($204.4 Million).--The leasing program is another way the
    Army provides adequate housing for families. The fiscal year 2012
    budget includes funding for a total of 9,036 housing units, including
    1,080 existing section 2835 (``build-to-lease''--formerly known as 801
    leases), 1,828 temporary domestic leases in the United States, and
    6,128 leased units overseas.
        Privatization ($25.7 Million).--The privatization account provides
    operating funds for management and oversight of privatized military
    family housing in the RCI program. RCI costs include civilian pay,
    travel, and contracts for environmental and real estate functions,
    training, real estate and financial consultant services, and oversight
    to monitor compliance and performance of the overall privatized housing
    portfolio and individual projects.
                          base realignment and closure
    Base Realignment and Closure 2005
        BRAC 2005 is a massive undertaking, requiring the synchronization
    of base closures, realignments, MILCON, and renovation, unit
    activations and deactivations, and the flow of forces to and from
    current global commitments. BRAC 2005 encompassed:
      --102 Army recommendations;
      --affected more than 150,000 soldiers and civilians, and their family
            members;
      --330 construction projects, which includes 125 Armed Forces Reserve
            centers;
      --closure of 12 Active component installations, one Army Reserve
            installation, 387 National Guard readiness and Army Reserve
            centers, and eight leased facilities; and
      --more than 1,100 discrete actions.
        BRAC 2005 established training centers of excellence, joint bases,
    a human resources center of excellence, and joint technical and
    research facilities.
        While the Department is facing scheduling challenges in a few
    cases, we are working diligently to ensure we satisfy our BRAC legal
    obligations. Army senior leaders continue to intensely manage these
    recommendations and are putting in place mitigation procedures to
    ensure we meet our legal obligations. Currently, the Army has completed
    23 of 102 recommendations and awarded 327 MILCON projects, of which 154
    have been completed. The Army has initiated 850 of 1,147 actions and
    completed 393. The Army has closed six Army installations, one Army
    Reserve installation, 42 Army Reserve centers, and disposed of 19,067
    acres associated with the closures. The Army is on schedule to complete
    the remaining 754 actions and 173 projects in accordance with the BRAC
    law.
        The Army fiscal year 2012 budget request for BRAC 2005 is $229
    million. The budget request is critical to the success of the Army's
    BRAC 2005 initiative and does not contain funding for new construction
    projects. The funding request includes $116.9 million in operation and
    maintenance to support facility caretaker requirements. In fiscal year
    2012, the Army will continue environmental closure, cleanup, and
    disposal of BRAC properties. These activities will continue efforts
    previously ongoing under the Army Installation Restoration Program and
    will ultimately support future property transfer actions. The budget
    request for BRAC environmental programs is $112.3 million, which
    includes munitions and explosives of concern and hazardous and toxic
    waste restoration activities. These actions do not occur at the expense
    of protecting human health and the environment from past activities
    that may have resulted in contamination. BRAC funds ensure human health
    and environmental protectiveness first, while also enabling the timely
    transfer of acreage for productive community re-use.
    Base Realignment and Closure 95
        The Army is requesting $70.7 million in fiscal year 2012 for prior
    BRAC rounds. The request includes $4.6 million for caretaking
    operations and program management of remaining properties and $66.1
    million for environmental restoration to address environmental
    restoration efforts at 280 sites at 36 prior BRAC installations. To
    date, the Army has spent $3.1 billion on the BRAC environmental program
    for installations impacted by the previous four BRAC rounds. The Army
    has disposed of 177,842 acres (85 percent of the total acreage disposal
    requirement of 209,291 acres), with 31,448 acres remaining. As a
    result, the Army estimates approximately $14.5 billion in savings
    through 2010--and nearly $1 billion in recurring, annual savings from
    prior BRAC rounds.
                               energy investments
        Army installations and facilities require secure and uninterrupted
    access to energy. Dependence on fossil fuels and a vulnerable electric
    power grid jeopardizes the security of Army installations and mission
    capabilities. Investment in renewable energy and energy-efficient
    technologies will help ensure the Army can meet mission requirements
    today and into the future. An average of 2 percent of every facilities
    construction project is invested in increased energy efficiencies.
        The Energy Conservation Investment Program (ECIP) fiscal year 2012
    program includes 10 renewable energy projects and three energy
    conservation projects for $51.5 million. The estimated average annual
    savings is projected at $4 million or 258 billion BTUs. Although ECIP
    is an annual Defense-wide appropriation ($135 million), the Army is
    taking a strategic look at requirements and developing an ECIP Future
    Years Defense Program that will provide the Army the ability to pull
    requirements forward should such an opportunity arise.
                                     energy
        The Army is moving forward to address the challenge of
    sustainability and energy security to ensure the Army of tomorrow has
    the same access to energy, water, land, and natural resources as the
    Army of today. The Army realizes that innovative, cost-effective
    solutions are critical to success. Addressing these challenges is
    operationally necessary, fiscally prudent, and mission-essential. The
    Army has implemented an energy efficiency requirement into all new
    facilities construction, renovation, and modernization requirements.
        Drive Efficiency Across the Enterprise.--The Army is investing to
    significantly reduce requirements for natural resources, to include
    energy and water, both on installations at home and in our combat
    operations. Reducing demand through efficiency improvements is often
    the cheapest and fastest way to save funds and reduce dependency. The
    easiest gallon of fuel to secure and transport is the one that is not
    required. The need to reduce energy vulnerabilities and associated
    costs is clear, given experiences in Iraq and Afghanistan. The approach
    will require a concerted effort involving a combination of new
    technologies, changes to user behavior, and conversion of ``waste'' in
    resource streams to energy with approaches that convert waste heat or
    garbage into electricity.
        Build Resilience Through Renewable/Alternative Energy.--Army forces
    must still prevail, even in the face of disruptions due to enemy
    action, weather, shifting priorities, or energy availability. Given
    this, it is prudent that the Army take steps to diversify its sources
    of energy, particularly to include renewable and alternative sources
    available both here and abroad. The Army is building resilience and
    flexibility into force capabilities to continue operating in the face
    of energy disruption. These disruptions can occur at the national,
    regional, or local level and affect bases, weapons systems, vehicles,
    and soldiers.
                                  environment
        The Army fiscal year 2012 budget provides $1.4 billion for its
    Environmental Program in support of current and future readiness. This
    budget ensures an adequate environmental resource base to support
    mission requirements, while maintaining a sound environmental posture.
    Additionally, it allows Army to execute environmental aspects of re-
    stationing, GDPR, and BRAC while increasing programmatic efficiencies,
    and addressing the Army's past environmental legacy.
        As a land-based force, our stewardship sustains the quality of our
    land and environment as an integral component of our capacity to
    effectively train for combat. We are committed to meeting our legal
    requirements and protecting natural and cultural resources during a
    time of unprecedented change. We are on target to meet DOD goals for
    cleaning up sites on our installations, and we continue to manage
    environmental requirements despite operating in a constrained resource
    environment.
                   sustainment, restoration and modernization
        The Army continues to comply with the joint planning guidance 1 and
    has funded sustainment at 90 percent of the Office of the Secretary of
    Defense facilities sustainment model requirement. The Army views 90
    percent sustainment funding as the absolute bedrock of proper
    facilities stewardship, and is an essential objective of the Army
    facilities investment strategy. The Army has chosen not to take risk in
    the sustainment of our facility inventory valued at $326 billion.
    Sustainment is an outward and visible sign of the Army's commitment to
    providing a quality of life to our soldiers, civilians, and families
    that is consistent with their commitment to our Nation's security.
                            base operations support
        The Army fiscal year 2012 BOS request, the budget provides $1.7
    billion in support of the Army Family Covenant, which is the Army
    leadership's commitment to provide a quality of life to the soldiers
    and families that, is commensurate with their service. Other funded
    senior leadership initiatives are:
      --Army Substance Abuse Program;
      --Sexual harassment/assault response and prevention;
      --Health promotion;
      --Risk reduction and suicide prevention; and
      --Comprehensive soldier fitness.
        The Army is committed to developing a cost culture for increasing
    the capabilities of BOS programs through an enterprise approach.
    Additionally, the Army will continue to review service delivery of its
    soldier, family, and civilian programs to ensure the most efficient and
    effective means of delivery are realized.
                                   conclusion
        The Army's fiscal year 2012 installations management budget request
    is a balanced program that supports our soldiers, families, and
    civilians; continued rebalancing of the force; completion of BRAC 2005
    by September 2011; continued support to Army transformation, GTA and
    GDPR initiatives, and investments in barracks buyout programs. The
    Army's facilities investment strategy will be accomplished through your
    continued commitment to timely and sustained funding of MILCON, BRAC,
    and family housing.
        In closing, we would like to thank you again for the opportunity to
    appear before you today and for your continued support for our
    soldiers, families, and civilians.

        Senator Johnson. Thank you, Secretary Hammack.
        General Boozer.

                      STATEMENT OF GENERAL JAMES C. BOOZER

        General Boozer. Mr. Chairman, Senator Kirk, I would also
    like to thank you all as well for your support.
        Thanks in large measure to the support received from this
    subcommittee, we've made great progress toward sustaining Army
    soldiers, families, and civilians, and we are regaining that
    balance that I know you have heard General Casey speak of so
    very, very often.
        This year, as you know, the Army is striving to complete
    all 1,147 actions associated with the Army's 102 BRAC
    recommendations that are necessary to fulfill our obligation
    for BRAC 2005. Construction continues on 330 projects; 165 of
    those 330 have been completed to date, as well as all the
    preparation in completing all the personnel moves, the civilian
    personnel moves mainly associated with those BRAC
    recommendations.

                          BASE REALIGNMENT AND CLOSURE

        We have spent some time identifying risk associated with
    those--with our BRAC recommendations and have identified risk
    by project, by specific project type and we have put mitigation
    strategies in place to reduce that risk so that we can keep
    BRAC implementation on track. And our senior leaders are
    actively engaged in over watch as we near the BRAC deadline of
    September 15, 2011.
        Restoring balance to our Army, though, is not an end state,
    but rather a continuous process. And that is why we have
    programmed $1.7 billion for transformation projects and $1
    billion for modernization in the President's budget request.
        Transformation projects ensure that we have the right
    modern facilities for the capability the Army is bringing to
    the fight, like conditional combat aviation brigades and the
    unmanned aerial vehicles that Senator Kirk mentioned.
        We will continue to modernize our aging and obsolete
    facilities, and will continue to make investments in areas like
    Germany and Korea.

                           EUROPEAN BASING/STATIONING

        Now, although a decision on the brigade combat teams in
    Europe was recently announced, it is critical that the projects
    in the President's budget request for fiscal year 2012 for
    Germany be appropriated. It is critical because those projects
    are not tied in any way to a brigade combat team stationing
    decision in Europe. Those were all tied to the consolidation
    plan in U.S. Army Europe that is going to yield savings as we
    close installations and concerns in Germany. So delaying the
    fiscal year 2012 Germany projects or any other further delay of
    the fiscal year 2011 budget will cause us some additional cost
    and delay some efficiencies that we could garner overseas.
        And then finally, the investment in the Guard and Reserve
    facilities has increased significantly. As you know, they are
    an integral part to our current operations. This year, more
    than $1 billion or 20 percent of the Army MILCON program is
    being invested in the Army Guard readiness centers and the Army
    Reserve centers.
        So in closing, Mr. Chairman, I would also like to thank
    this subcommittee once again for your support to our Army and
    our soldiers, and look forward to your questions and the
    discussion and dialogue this afternoon.
        Senator Johnson. Thank you, General Boozer.
        Let's turn to General Carpenter.

                   STATEMENT OF GENERAL RAYMOND W. CARPENTER

        General Carpenter. Mr. Chairman, it is also great on my
    part to see a fellow South Dakotan. And for the third year in a
    row, it is my privilege to appear before this subcommittee as
    the Acting Director of the Army National Guard.
        I am here today representing 360,000-plus soldiers in the
    Guard who are on point at home and abroad for our Nation. Our
    Army National Guard is approaching a decade of war with an all-
    volunteer force. We have mobilized soldiers for Operation Iraqi
    Freedom, Operation Enduring Freedom, Operation New Dawn, for
    the Balkans, the Sinai, and elsewhere in the world. More than
    478,000 soldiers have been mobilized since 9/11, and as we
    speak, we have nearly 35,000 soldiers mobilized and deployed,
    away from their homes, away from their families, their
    employers, and communities.
        Sadly, but very importantly, I would be remiss if I did not
    acknowledge the toll that this has taken. We have 10,000
    soldiers with nonbattle injuries, 5,000 wounded, and 643 who
    have sacrificed their lives.

                           ARMY NATIONAL GUARD BUDGET

        I want to assure you the Army National Guard would not be
    the operational force it is today without the support of the
    Congress and this subcommittee. I am here today to discuss the
    Army National Guard MILCON budget request for fiscal year 2012.
    That request is for $773,000 and would fund 48 MILCON projects
    in 30 States and territories. These projects include readiness
    centers, ranges, tactical unmanned aerial system facilities,
    maintenance shops, training institute facilities, and one U.S.
    Property Fiscal Office building in Washington.
        Facilities and infrastructure are key contributors to
    readiness for the homeland mission and overseas operations. And
    that infrastructure is aging. More than 40 percent of our
    readiness centers are more than 50 years old and require
    substantial modernization or total replacement to meet the
    needs of an operational force. In many cases those facilities
    not only do not meet the needs of the transformed units, but
    they also fall short of the Department of Defense (DOD),
    Federal, and State building standards in the areas of anti-
    terrorism, force protection, energy efficiencies, and the
    Americans with Disabilities Act requirements.

                      EFFECTS OF THE CONTINUING RESOLUTION

        I would also like to point out, as previous panel members
    have, that because of the continuing resolution, we have been
    unable to begin to award the fiscal year 2011 construction
    contracts of $873,000 worth of projects recommended by this
    subcommittee last year. We desperately need the funding to
    replace numerous substandard facilities across the Army
    National Guard. Incidentally, one of those projects, Mr.
    Chairman, is in our home State, Watertown, South Dakota.
        It is vital that the fiscal year 2011 MILCON request is
    fully funded.
        Again, Mr. Chairman, I would like to acknowledge the
    critical role this subcommittee has played in building and
    sustaining the best Army National Guard I have seen in my
    career of more than four decades.
        I look forward to your questions and comments.
        Senator Johnson. Thank you, General Carpenter.
        Mr. Snyder.

                          STATEMENT OF JAMES L. SNYDER

        Mr. Snyder. Mr. Chairman, Senator Kirk, and distinguished
    members, it is my pleasure to be here on behalf of Lieutenant
    General Jack Stultz, the Chief of the Army Reserve, to discuss
    the MILCON program today.

                                  ARMY RESERVE

        Our requests are crucial to the Army Reserve as we continue
    the most comprehensive transformation we have conducted since
    World War II. And we are using the energy of the transformation
    from a strategic force to an operational force to provide the
    Nation a very good return on their investment.

                               OPERATIONAL FORCE

        Of the 205,000 Army Reserve soldiers, about 190,000 have
    deployed since the operations have started. Today, we have
    27,000 mobilized in support of operations, and that is down
    from recent years where we've had about 30,000 to 32,000. We do
    believe we are making a good contribution to the operational
    force.

                        MILITARY CONSTRUCTION PRIORITIES

        MILCON priorities are: Army Reserve centers, training
    support facilities, and maintenance facilities, as you can
    imagine. But these are no longer just meeting places of the old
    strategic Reserve that you may remember, these are places to
    conduct training and family support group meetings and do
    collaborative planning over network simulations and so forth
    that really prepare soldiers for today's operations. And they
    require progressive readiness training through the Army force
    generation cycle, in order to be prepared to be mobilized for
    their available year. We have utilized BRAC and the Grow the
    Army (GTA) program over the last few years to transform our
    command and control posture to better support an operational
    Army Reserve. And those programs are being completed in fiscal
    year 2011, both BRAC and GTA.
        As discussed, we have 26 projects in our fiscal year 2011
    program that are on hold--10 are at the award stage, and 17 of
    those support structure that is activating in fiscal year 2012,
    so it's critical to get on with those programs, and we look
    forward to the authority.

                            FISCAL YEAR 2012 BUDGET

        The fiscal year 2012 budget request of $281 million
    supports modernization, training support, strategic readiness,
    and unspecified programs--$216 million in modernization, that
    is 11 facilities, operations center.
        Training support, about $27 million, supports, primarily,
    our regional training centers at Fort Hunter Liggett,
    California; Fort McCoy, Wisconsin; and Fort Dix, New Jersey;
    and we have a deployment facility at Fort McCoy as well. We
    have $29 million in planning and design and $3 million in
    unspecified minor as part of that package as well.
        And we are particularly proud to contribute on the energy
    front to the efforts that have been going on since 2008. And
    while we've designed for Leadership in Energy and Environmental
    Design (LEED) Silver standards, we have been able to achieve a
    number of LEED Gold and LEED Platinum standards as we complete
    the projects. And, in some cases, using renewable energy
    sources, we are able to reduce the consumption by 50 percent at
    particular facilities.
        The fiscal year 2012 program will directly support 4,400
    soldiers and families with these new facilities, and that is
    fitting with their service and sacrifice. Our citizen soldiers
    and families will continue to be the centerpiece of the Army
    Reserve, and their ability to perform their mission
    successfully depends upon your continued support.
        Again, on behalf of Lieutenant General Stultz and the
    soldiers and families of the Army Reserve, I thank you for your
    support.
        Senator Johnson. Thank you. Thank you, Mr. Snyder.
        Thank you for your opening statements. We will begin with a
    6-minute round of questions. Senators will be recognized in
    order of their arrival.

                                FORCE REDUCTION

        Secretary Hammack and General Boozer, as part of his
    efficiencies review, Secretary Gates indicated that the Army
    would likely see a reduction in forces by as much as 27,000 in
    fiscal year 2016. It is my understanding that the drawdown on
    forces will be contingent on troop withdrawals in Afghanistan
    and as part of an Army force structure review.
        What is the Army's time line for its force structure
    review? And what impact will this anticipated drawdown have on
    the Army MILCON program?
        General Boozer. Mr. Chairman, if it is okay----
        Senator Johnson. Yes.
        General Boozer [continuing]. I would like to take a stab at
    that and I really appreciate that question.
        As you know, I alluded to some of that reduction--not some
    of the reduction, but alluded to the brigade combat team
    stationing decision. But if I could just quickly--and I am a
    history major, so I am going to try to walk through the
    numbers, probably more for my benefit than yours, and talk
    through the reductions of where we are.

                                  END STRENGTH

        As you know, we are currently operating under a temporary
    end strength increase of 22,000. And so that took us from our
    permanent end state of 547 and brought us up to 569.
        The Army's time line is to come off of that temporary end
    strength of 22,000 back down to the 547 by the end of 2013.
        Then the 27,000 reductions that the Secretary has talked
    about and announced, we have to work through our process. In
    the Army, we call it the total Army analysis process, where we
    take strategic guidance, and we go through a series of
    qualitative and quantitative analyses to right-size the force.
    And we will start that process this summer, even though the
    27,000 reductions aren't supposed to start until 2015. We are
    going to start that process this summer so we can lay out some
    options for the Army's senior leadership, because we have a lot
    of issues that we have to wrestle with when we take into
    consideration how we would proceed with reducing the force by
    27,000.
        Ms. Hammack. And then I would like to address your question
    as far as MILCON goes. As we enact that plan, and taking the
    force down starting in fiscal year 2015, we will be looking at
    our construction.
        One of the things to keep in mind is, because we grew so
    fast in response to the current battles that we are in, the
    current wars that we are involved in, we have soldiers that are
    working out of temporary facilities, whether they are
    relocatable facilities or other facilities that are past their
    effective use State and sub-par facilities. So as we look at
    reducing end strength, we will be looking at consolidating into
    those facilities that have the highest and best use and looking
    at reducing the amount of facilities that are older or aging or
    that are temporary facilities.
        And we will be looking at our MILCON budgets in the out
    years to ensure that we are not building structures that don't
    have appropriate use.

                               READINESS CENTERS

        Senator Johnson. General Carpenter, you mentioned the age
    of the readiness center inventory. Does the Guard have a
    modernization plan for its readiness centers and a goal for
    completion?
        General Carpenter. Senator, I believe you are aware of the
    readiness centers study that was discussed in the last session
    of the Congress. We have begun the process in terms of figuring
    out what the requirements are for that study. Unfortunately,
    the study was unfunded. We have taken $2 million from our
    fiscal year 2010 budget that was not to be expended for other
    uses and we have dedicated that toward the start of that study.
        Our effort is to look across all the readiness centers that
    we have got across all the States in the United States and rank
    order the ones that require replacement at the top and start
    working down through that list in order to modernize the
    readiness centers inside of the Army National Guard.
        So, yes, sir, we do have a plan, and we are moving out on
    it. However, it is not fully funded at this point.

                                 GROW THE ARMY

        Senator Johnson. Secretary Hammack and General Boozer, how
    is it that there is a discussion in reducing force growth when
    we haven't funded MILCON for the current growth of force
    initiative? And how much MILCON does the Army have left to
    complete the growth of force initiative?
        Ms. Hammack. I don't have the exact numbers with me right
    now to complete the initiatives, but the GTA and the Global
    Defense Posture Realignment programs were both scheduled for
    completion mainly in fiscal year 2012, with a little bit left
    in fiscal year 2013.

                              EUROPEAN STATIONING

        Senator Johnson. General Boozer, on Friday DOD announced
    its intent to revise the force posture in Europe. As part of
    that announcement the Department intends to retain only three
    brigade combat teams in Europe, down from four. Now, no
    specifics of the re-stationing were offered in the press
    release even though this decision has been anticipated for
    months.
        Will the brigade combat team be re-stationed in the United
    States or will it be deactivated? How will this decision impact
    current installations at Bamberg and Schweinfurt in Germany?
        General Boozer. Yes, Chairman, thank you for that question.
        If I were to remain in my current posting here I would be
    knee deep in the analysis that we owe you. The good news is, in
    my future job, my posting in Europe as the Deputy Commanding
    General for U.S. Army Europe, I am still going to be knee deep
    in that analysis that is going to take place. We are
    certainly--in that new posting I will certainly help the Army
    with.
        And your question is a very, very good one. We have
    installations in Europe that are tagged as enduring
    installations and some that are tagged as nonenduring
    installations, I am kind of answering the question backwards in
    reference to the installations.
        Some of those installations, specifically the ones Senator
    Kirk mentioned in his opening statements, Bamberg and
    Schweinfurt, are categorized as nonenduring installations. We
    are currently using those installations, in layman's term, as
    probably swing space.
        As we consolidate installations and concerns in Europe, we
    are using Bamberg and Schweinfurt for those units or
    organizations. In fact, one of the brigades that is stationed
    in Grafenwoehr, the 172nd, some of its units are still in
    Schweinfurt, have not completed their closure into their
    permanent home which is Grafenwoehr.
        Once we understand and get senior leader guidance from the
    Army on the end state for that one brigade combat team, because
    that is a reversal from the 2004 decision to bring two back, as
    we take into consideration the force reductions that we have
    talked about, the temporary end strength of 22,000 that we have
    got to come down off of between 2013, and then this 27,000-
    reduction, those decisions will all play in that.
        So we do not have an answer. That is a long way to get at
    an answer. We do not have an answer to what is going to happen
    to that brigade combat team that has been identified.
        Senator Johnson. What time frame do you anticipate?
        General Boozer. Mr. Chairman, I believe we have, in concert
    with the total Army analysis process, we have to bring those
    options and decisions to our senior leadership before the end
    of this year, because we are going to work that 2015 stance, if
    you will, during the upcoming total Army analysis process, so
    it has got to be part of that, that holistic process.
        Senator Johnson. Thank you, General.
        Senator Kirk.

               MILITARY CONSTRUCTION BUDGET FOR FISCAL YEAR 2012

        Senator Kirk. Thank you, Mr. Chairman.
        Just note that for our legislation, the Department of
    Veterans Affairs (VA), last year, took up about $53 billion,
    and MILCON was $23 billion. And this year for the bill; it
    looks like the VA will take up $56 billion and MILCON $16.6
    billion. So MILCON was 30 percent of this bill last year; it is
    just 22 percent this year. At that rate, MILCON disappears from
    this bill in 3 years.
        Any thought about recommendation to us about reorganizing
    our committees and moving MILCON into DOD, because you are
    rapidly disappearing here?
        Ms. Hammack. Thank you for that question. We are reaching a
    steady state level. And our steady state level of investment
    and reinvestment and our facilities is around that $5 billion
    mark. After we have finished the re-stationing and corrected
    for capacity, new construction is going to be correcting for
    condition where we have aging or decaying facilities that
    require replacement.
        So we will always have a continuing need for MILCON, just
    as any other enterprise would, to manage and maintain our
    facilities. We are looking at increased investment in
    sustainment, restoration, and modernization, but there will
    always be a need for MILCON.
        Senator Kirk. All right. I would just note that--when we
    talk about new buildings for DOD and the Army, what is more
    important to you: increased combat capability or energy
    efficiency?

                              ENERGY EFFICIENCIES

        Ms. Hammack. Mission comes first, sir.
        Senator Kirk. Yes. I would like to hear that more, because
    it seems like we are really pushing energy efficiency, when it
    is great to have an energy-efficient facility, but if it is not
    yielding additional combat capability, that is----
        Ms. Hammack. I would disagree with you on that point,
    because it is mission-critical that our facilities be energy-
    efficient. And if you take a look at Japan, our facilities were
    able to operate and continue to operate in light of a frail and
    dysfunctional power grid. And so we need our facilities to
    better manage the energy that is required to maintain mission--
    --
        Senator Kirk. Right.
        Ms. Hammack [continuing]. And be able to operate should the
    power grid go down.
        And just in the last decade, we have seen issues, whether
    they be accident, weather-related, or acts of terror, that
    could impact our mission. So our mission is to remain viable
    and operational should there be hazards in the local community.
        Senator Kirk. Right.
        Ms. Hammack. So we view energy as mission-critical.
        Senator Kirk. Yes, although I would just say they are two
    vehicles, but would you rather go to war in a Nissan Leaf or in
    a Humvee, you know? And I would just say that in the end,
    combat capability is, I think, our primary value here that we
    are looking for in the facilities.

                            KOREA TOUR NORMALIZATION

        Can we talk about Korea and Army MILCON? Because it is a
    big swing number. Should we go with full-tour norm? What is
    your timeline on assessment for this huge bill?
        General Boozer. Yes, Senator Kirk, as you know, the
    Secretary first approved our command sponsorship of our
    families at that level at 3,740. And, to date, that is really
    the only decision that has been made that is associated with
    career tour normalization, is the command sponsorship levels,
    if you will.
        We are working toward what we call the consolidation and
    the relocation----
        Senator Kirk. Right.
        General Boozer [continuing]. Of forces north to south, from
    the Seoul area into the Daegu, Yongsan area into what we know
    as Camp Humphreys. And that----
        Senator Kirk. Do you have any idea--I would think that
    housing would be vastly more expensive in Seoul than Camp
    Humphreys, but your numbers show it is actually vastly more
    expensive in Camp Humphreys than in Seoul.
        General Boozer. Yes, sir. And you mentioned the way that we
    are going to tackle that problem for housing with our families
    is using the Humphreys Housing Opportunity Program, which is
    not using MILCON dollars, but is using an overseas housing
    allowance rate. And it is, as you mentioned, $4,200, that rate.
    That rate allows the public-private venture, if you will, to
    occur.
        And, quite frankly, in the short term, it is cheaper and
    more efficient than MILCON.

                              EUROPEAN STATIONING

        Senator Kirk. Yes. Last question. As we bring that brigade
    combat team home from Germany, I didn't really get a sense of
    when you would be bedding that, making a decision on beddown of
    that unit. When----
        General Boozer. Yes, Senator Kirk, that will occur in 2015.
    All those brigade combat----
        Senator Kirk. The decision will occur in 2015?
        General Boozer. No, I'm sorry, I misunderstood. I thought
    you were talking about the actual movement or whether we
    activate--inactivate it or moved it would be 2015. The
    decision, I believe, has to occur sometime late this fiscal
    year.
        Senator Kirk. Thank you.
        Thank you, Mr. Chairman.
        Senator Johnson. Senator Pryor.
        Senator Pryor. Thank you, Mr. Chairman. I want to thank the
    panel for being here today.

                                    ARSENALS

        Ms. Hammack, let me start with you, if I may. I want to ask
    about arsenals. I know that there are several laws out there
    that the Congress has passed over the years, and some
    regulations, that basically encourage us to utilize our
    arsenals more fully. You are aware of those laws and
    regulations, the Arsenal Act, Defense Industrial Reserve Act,
    Army Regulation 700-90 and others. You know those better than I
    do.
        But how are we doing in terms of keeping our arsenals
    fully, workloaded and fully busy?
        Ms. Hammack. I would say they are very busy right now, but
    thank you for the question.
        Our arsenals are very busy because we are engaged in two
    conflicts right now. As we bring our soldiers home and
    disengage, the load on the arsenals will reduce. Several of our
    arsenals are right now at three shifts, so they are operating
    on a 24/7 aspect. Our peacetime load is much closer to one
    shift, 5 days a week. So we will get closer to that.
        Our arsenals are a critical resource to the military, to
    the Army, so we need to ensure that their capabilities remain
    and that investment in them remain.
        We are looking at options to offer services that could be
    coupled more closely with the public sector. We are looking at
    some realignments right now that might change their structure,
    not necessarily their location but their cost structure so that
    it would make them more competitive in the private sector.
        Senator Pryor. How would you do that, when you say to
    change their cost structure? What do you mean by that?
        Ms. Hammack. Right now many of our arsenals are operating
    both the manufacturing portion and the garrison portion coupled
    very closely together. We have an installation management
    command that manages the garrison side of our installations and
    does that for more than 150 different installations.

            INSTALLATION MANAGEMENT COMMAND'S MANAGEMENT OF ARSENALS

        We are looking at decoupling the production aspect and
    having the installation management command manage the garrison
    side of the arsenal, and we believe that will focus what the
    costs are strictly for the production capabilities. Also, the
    first couple of ones we have looked at, and we are implementing
    this on a pilot basis, are showing cost savings because
    installation management command has contracting mechanisms that
    they can then leverage.
        Senator Pryor. And do you think that those cost savings are
    what you will find at most of these locations?
        Ms. Hammack. We believe so. The final results are due in
    September.
        Senator Pryor. And what percentage of the arsenals in our
    system now are, I guess what you would call, fully work-loaded?
    I know it is an up tempo time, but do you know the answer?
        Ms. Hammack. I would have to take it for the record, but I
    believe that most of them are fully utilized. The question
    right now is, as our up-tempo decreases, how they will be
    unloaded.
        [The information follows:]
                                    Arsenals
        For the two manufacturing arsenals, Rock Island Arsenal Joint
    Manufacturing and Technology Center (RIA) and Watervliet Arsenal (WVA),
    the percentages are approximately 81 percent for RIA and 52 percent for
    WVA. The chemical arsenal, Pine Bluff Arsenal, is presently workloaded
    at approximately 28 percent.
        These percentages are against a full 40-hour work week, and do not
    take into account the added capacity with multiple shifts.

        Ms. Hammack. One of the things to keep in mind is, many of
    our arsenals are engaged in resetting equipment as it comes out
    of the theater. So there will be a period of time where they
    will remain or they will lag the up tempo as they work to reset
    equipment.
        Senator Pryor. Right. And, of course, we have the Pine
    Bluff arsenal in Arkansas and they have just gone through the
    big chemical demilitarization process. And my understanding is,
    we have a lot of capability there now that is really not being
    utilized because of that change of mission. So we certainly
    would appreciate you all considering Pine Bluff as you look at
    arsenals and what our needs are in the future.
        Let me ask--I guess this might be best for General
    Carpenter. And that is, on the Operational Reserve call-up
    concept. I met with Lieutenant General Stultz the other day,
    and we were talking about this and he was describing the desire
    for the Reserve components to amend title 10 to provide the
    Secretary of Defense the authority to involuntarily activate a
    limited number of selective Reserve personnel. And as I
    understand, that would allow for easier activation for
    validated, nonemergency DOD force generation requirements.
        Is that something that the National Guard supports?
        General Carpenter. Senator, I think you know the history of
    this particular issue. I believe it was in 2007 there was part
    of the National Defense Authorization Act allowed for the
    mobilization and employment of the Army Reserve in emergency
    and disaster operations. And then at the request of the
    Governors, I believe that was reversed in 2008.
        The feedback I get from the adjutant generals across the
    Nation, and as a result consistent with our Governors' wishes,
    is the Governor wants to remain responsible and in charge of
    what goes on in disaster and emergency operations inside of his
    or her State. And, right now, we, the National Guard, are
    working, in conjunction with the Council of Governors and U.S.
    Northern Command, on a process that has a critical, dual-status
    commander, a dual-hat commander, if you will, that represents
    both the title 10 forces and the title 32 forces.
        And as we work through that process to establish that, the
    Governors, the ones that I know about, feel confident that when
    that is in place they would be inclined to support what General
    Stultz has in mind.
        I believe--you know, I sit with General Stultz regularly as
    my counterpart in the Army National Guard and his position is,
    why would we call the 82nd Airborne when we have the engineer
    unit in Florida that is already there to take care of business?
    And they have done great work, Hurricane Katrina, for instance,
    as being an example.
        Senator Pryor. Thank you.
        Thank you, Mr. Chairman.
        Senator Johnson. Senator Hutchison.

                              EUROPEAN STATIONING

        Senator Hutchison. Thank you. Thank you, Mr. Chairman.
        I appreciate what you said, Secretary Hammack, about
    gauging the MILCON as you go based on these decisions that are
    going to be made. I have expressed, pretty publicly, that I am
    concerned that we have spent so much on MILCON in Germany, and
    then the announcement was made that we were going to reverse an
    earlier decision by the previous administration to leave two
    brigade combat teams in Germany instead of have three.
        And I look at the Government Accountability Office (GAO)
    reports, the GAO said that when the decision was made to keep
    two and bring two home, that it would save millions. And they
    estimated that it would cost nearly $2 billion more from fiscal
    years 2012-2021 to retain the two brigades in Europe than it
    would cost to return them to the United States.
        The GAO also said that they were concerned about the lack
    of comprehensive cost data that the Army used when they were
    doing their theater posture plans. And they said that, of the
    $17 billion obligated by the services to support installations
    in Europe from 2006-2009, approximately $13 billion was for
    operations and maintenance (O&M).
        So my question is, how do you factor in the added costs of
    new MILCON in Germany and the O&M costs on top of that when the
    GAO and others have said that you could save so much more by
    keeping with the original decision to bring the two brigade
    combat teams back and not doing that added MILCON and then
    keeping the O&M?
        And I would ask either you or General Boozer.
        Ms. Hammack. In Germany, in Europe, we have been working on
    consolidation, and we have been working to reduce our
    footprint. In the last 5 years, we have closed 91 sites and
    returned 23,000 acres to the German Government. Over the next 5
    years, we plan to close 29 sites and return 7,000 acres to the
    German Government.
        In doing so, some of the facilities that we are closing are
    aging facilities that cost a lot to operate and maintain and
    cost a lot to sustain. So, as we consolidate into the other
    facilities, by building new, it is reducing our costs for O&M
    in those facilities that we need to remain in.
        Senator Hutchison. General, did you have something to add?
        General Boozer. Yes, ma'am, if I could, Senator?
        Senator Hutchison. Yes.
        General Boozer. Thank you. Ma'am, I mean, you are correct,
    absolutely correct. It is more expensive to operate, build,
    maintain, and sustain a force in Europe versus back here in the
    United States. And Secretary Hammack pointed out some of the
    ways we have to try to mitigate that is through these
    consolidation and efficiency efforts that are still ongoing.
    U.S. Army Europe, now based on this most recent decision, will
    have to look, are there more efficiencies and more
    consolidations that can take place? Senator Kirk mentioned
    Bamberg and Schweinfurt, so clearly, U.S. Army Europe and the
    Army, the Department is going to have to look at that very,
    very closely to see if there is more efficiencies to be
    garnered.
        There are some things that, even though more expensive,
    hard to put a price tag on of the benefits that are reaped by
    having a force over there. What the right size is, I think, is
    still under discussion, but the benefit of having a force there
    that can partner and build alliances and the training value
    that our soldiers get by operating in a multinational
    environment, are very hard to put a price tag on that.
        Senator Hutchison. Well, General, let me just make a couple
    of points. Germany was supposed to be the lead for NATO early
    on for the security in Kabul. And they started backing out with
    restrictions on what they would do, rules of engagement that
    were limiting, and America has taken the giant lead, as we all
    know, in Afghanistan. Germany has said right away, right up
    front, they are doing nothing in Libya.
        And so I think we do need to start looking at the overall
    importance of and effectiveness of these joint international
    training missions if in fact some of our allies participate and
    then sometimes they don't.
        The other point that I would ask you about, and I would ask
    both of you, is that Germany is notorious for not making much
    of an effort for the building programs that we do in country.
    Germany's contribution has been about $20 million per year of
    the overall $1.4 billion that we have spent in Germany between
    2006 and 2010. That is less than 10 percent.
        And my question is, are you factoring those things in? And
    are you asking for more participation from Germany, such as,
    for instance, Japan does and even Korea is doing more now? Are
    we also making this case with Germany? And are we looking at a
    long term--whether, in fact, it is so much more expensive and
    maybe not as effective as we would like for it to be to have
    these operations there when our allies don't seem to be
    stepping up in the major theaters like Afghanistan, certainly
    nothing in Iraq from Germany.
        How are you putting that all together? And are you asking
    for more of an effort? And are you looking at really carefully
    how much more we should be building in Germany, and then
    eventually turning back to the Germans, with very little effort
    on their part?
        General Boozer. Yes, Senator, thank you. Yes, that is a
    true statement. German host-nation contributions are absolutely
    lagging from other host nations like Japan and Korea.
        I don't know how engaged we are in trying to turn that
    tide, but it is something that I would personally take on to
    see what else we can do. I think we need to ask, and I think we
    need to probably solicit the help of the State Department and
    our ambassadors there to help us in that endeavor.
        So I absolutely concur.
        Senator Hutchison. Well, thank you. I do appreciate that
    response. I do. And I appreciate that you will be looking,
    Madam Secretary, at whether we really do go forward with some
    of this MILCON when we look at the bigger picture of how many
    we are going to really have there and what is the effectiveness
    of it.
        So I thank you for saying you will look at it and I hope
    that you will. Thank you.
        Senator Johnson. Senator Nelson.
        Senator Nelson. Thank you, Mr. Chairman. And thank you all
    for being here today.

                        NATIONAL GUARD READINESS CENTERS

        I applaud the investment that is being made in the Army
    National Guard readiness centers. These centers provide the
    necessary support for the operational and ever-ready Guard and
    Reserve. We have had several new facilities in Nebraska, and I
    think that they are not limited to our State, but the Guard
    has, for a long time, been under-resourced in meeting those
    facility requirements.
        I know, General Boozer, you mentioned about having a study
    that is going to be required. Can you talk a bit about how the
    Guard and Reserve facilities are prioritized when you have this
    report that you go through?
        And I think, Madam Secretary, you made reference to it as
    well, how you are going to determine the facilities. Obviously,
    aging facilities are going to have one priority, but priorities
    may be for different reasons in different locations. Is there
    going to be a way to establish priorities, not simply on an
    aging basis?
        I think we will start with you, Madam Secretary.
        Ms. Hammack. Absolutely, and thank you for that question.
    Each command prioritizes where they need investment. So when it
    is all brought together, we have a prioritized list from the
    Guard, we have a prioritized list from the Reserve, the regular
    Army, Army materiel command, et cetera, and we look at them all
    together based upon the critical nature of the requirements.
        And as I said, we are launching into increased scrutiny of
    this to really look at condition of facilities. And some of the
    capacity things we might be looking at--less square foot for
    each function, but condition is where the focus of our MILCON
    will be.
        And as I said, every project competes, and it competes
    based upon the requirements of that facility.
        Senator Nelson. Well, in that regard, it could be that an
    aging facility is going to be less important to today and
    tomorrow and the needs beyond than, perhaps, a facility that is
    not as old, but needs to be modified to take into consideration
    the mission for that facility. So what I am getting at is, I
    know aging will be a factor, but you might move new facilities
    ahead of old facilities just on the basis of there is a higher
    need for them for mission.
        Ms. Hammack. And mission is part of the process, and that
    is where the prioritization by the command comes from, looking
    at what their mission requirements are.
        Senator Nelson. So it won't simply be by aging?
        Ms. Hammack. No, but that is--and age isn't part of it, it
    is condition.
        Senator Nelson. Well, condition.
        Ms. Hammack. We have some very old facilities that are in
    excellent condition. But we have some newer facilities--there
    is a certain era where some of the facilities that were built
    were not of durability to last. So we have some newer
    facilities in worse condition than older facilities.
        Senator Nelson. But condition alone will only be part of it
    because mission requirements would be equally or, in many
    cases, more important?
        Ms. Hammack. Absolutely. Mission is the primary focus.
        Senator Nelson. Okay.
        General, anything you might like to add?
        General Boozer. Yes, Senator, thank you. The one thing I
    would add is that we do have this internal process in the Army
    where we look at the MILCON projects for all three components--
    Active, Guard, and Reserve--and we do look at quality, age, and
    we also look at quantity. So when we have deficits of certain
    facility types, whether it be Guard, Reserve, or MILCON, that
    plays in heavy as well in terms of are we meeting mission
    requirements.
        Senator Nelson. Thank you, Mr. Chairman.
        Senator Johnson. Senator Murkowski.
        Senator Murkowski. Thank you, Mr. Chairman. And welcome to
    the panel.

                            FORT WAINWRIGHT, ALASKA

        Secretary Hammack, a question for you. I know that you are
    familiar with the housing project on Fort Wainwright known as
    the Birchwood Homes, these are 400 unit, the 801 housing.
        Back in May 2007, the Army allowed that these units be
    leased out to the public, and that out-lease ends then in May
    2018. The 801 project developer as well as the Fairbanks North
    Star Borough have requested that the Secretary consider an
    approval to extend that ground lease beyond the year 2018 so
    that the housing can continue to be made available to the
    military as well as the Fairbanks community. This is in a
    community where housing is an issue, particularly the four- and
    five-bedroom units. This is a big deal for us.
        Back in October, the Alaska delegation wrote the Secretary,
    asking that the Army favorably consider that proposal to extend
    the ground lease. But then back in December, we received a
    response that the proposal had been rejected. And the comment
    made by the Secretary was that Fort Wainwright may need this
    land in the future for installation support facilities.
        So the question this afternoon is whether or not the Army
    does have some kind of a plan, a definitive plan for developing
    the land where the Birchwood Homes projects sits.
        And basically, we are trying to find a creative solution.
    And I know this is not news to you, but just seeking a little
    bit of input this afternoon as to how we can advance this in a
    way that is good for Fort Wainwright, good for the community,
    and really get to that win-win situation.
        Ms. Hammack. Thank you very much for the question.
        I was up there in August taking a look at this area. One of
    the challenges of Alaska, as I'm sure you know, is permafrost.
    And this area that these houses are built on is an area that is
    permafrost-free, which means it reduces the complexities with
    construction there.
        So when we look at the entire base configuration, including
    the land on which those houses are located, that is one of the
    largest areas that the Army had set aside for future use. And
    when this lease expires, we do have intended use, we have plans
    and programs for that use of that area. So the developer is
    very well aware that it was a land that the Army needs, that it
    was a lease that had a termination date on it. And because of
    the characteristics of the land, that is land that the Army
    does need to support our soldiers in that area.
        Senator Murkowski. So there is, what you would consider to
    be, a definitive plan that is either under way or is on the
    books for after 2018?
        Ms. Hammack. Yes.
        Senator Murkowski. Let me ask you, because you bring up the
    subject of permafrost and the fact that in Alaska, particularly
    up in the interior there, you have got a pretty short
    construction season. And with the situation that we have been
    in back here in Washington, DC, it makes for a pretty short
    construction season when in fact we are just now in the process
    of completing the work on our fiscal year 2011 MILCON
    appropriations bill.
        So the question that I would pose to you this afternoon,
    and I understand you may have alluded to it in your opening,
    but how much groundwork have you been able to lay in
    anticipation that we were actually going to get our work done
    here so that you can get these new projects moving along? Are
    you going to be accelerating some of the contracting process?
    How are you going to deal with just a very consolidated time
    period that we have got?
        Ms. Hammack. I appreciate your question and we had a
    meeting on this last week to look specifically at Alaska.
    Because right now there is $300 million worth of contracts,
    projects that have been bid, that have been thoroughly scoped,
    and that are ready to award. And essentially, the contracts are
    written ready to award, but we can't obligate funds until we
    have a budget.
        May 1 is really our definitive date. We have to have the
    contracts enacted and in place by May 1 in order for us to
    execute what we need to do out of the fiscal year 2011 budget.
        Senator Murkowski. So, are you anticipating that some of
    these projects may drop off if we are not able to do what we
    need to do prior to May 1?
        Ms. Hammack. They would not drop off, they would have to be
    postponed. We would award the contracts. Some of them are at a
    65-percent design level. And part of the contract is the final
    last touches on the design, finishes, and some of the other
    final fit-outs. So we would have to use some of that time
    period for other activities and be ready to then start the
    construction as soon as----
        Senator Murkowski. Do you have any sense----
        Ms. Hammack [continuing]. The season starts.
        Senator Murkowski [continuing]. As to how many or perhaps
    what percentage might be in that deferred status?
        Ms. Hammack. It is entirely dependent upon when we get that
    new start authority. And as I said, if we get that new start
    authority by May 1, we will be able to enact the plans that we
    have right now.

                              APPROPRIATIONS BILL

        Senator Murkowski. Well, that certainly goes to highlight
    one of the issues that we were talking about around here about
    the impact that the delay here in the Congress to these
    appropriations bills and how that actually translates on the
    ground. I think it has meaningful consequence and
    unfortunately, possibly negative consequence if we're looking
    at a lot of the deferrals. So hopefully that will get to you in
    a more timely manner.
        Ms. Hammack. Well, the concern is, as bids age, we reach
    bid expiry dates. And, so far, many of our contractors have
    been willing to give us bid extensions. But if they age too
    much, then it has to be re-competed because the bids have
    expired, and then you are at risk of increased cost. So really,
    we encourage everyone to give us the new start authority so we
    can put your constituents to work.
        Senator Murkowski. I am hoping we do that today.
        Thank you, Mr. Chairman.
        Senator Johnson. Senator Tester.
        Senator Tester. I'm going to save all my fireworks for the
    Air Force.

                         ADDITIONAL COMMITTEE QUESTIONS

        Senator Johnson. Thank you all for coming today, and thank
    you for your service to our Nation. We will look forward to
    working with you and your staffs this year. Will our second
    panel please be seated?
        [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. Katherine Hammack
                   Questions Submitted by Senator Tim Johnson
       transportation improvements/base realignment and closure medical
                                   facilities
        Question. The fiscal year 2011 Department of Defense (DOD)
    appropriations bill includes $300 million for transportation
    improvements related to base realignment and closure (BRAC) medical
    facilities. Does the Army have a plan for this money that could be
    executed quickly?
        Answer. The Army has identified road improvement projects related
    to BRAC medical facilities. The oversight of these funds however is
    with the Office of Economic Adjustment (OEA) from the Office the
    Secretary of the Defense (OSD). The Army is prepared to move forward
    with these projects once OEA has determined which projects will be
    funded.
        Question. In addition to the traffic improvements needed at
    Bethesda and Fort Belvoir, are there any other medical facilities that
    would receive a portion of these funds?
        Answer. The oversight of these funds is with the OEA from the OSD.
    The Army must work with OEA as they determine how the funds will be
    used.
        Question. What specific road improvements needed at Fort Belvoir
    and Bethesda as a result of the new hospitals, and what is the
    projected cost to complete them?
        Answer. The oversight of these funds is with the OEA from the OSD.
    The Army must work with OEA as they determine how the funds will be
    used.
        Question. How much of the $300 million will be used for traffic
    mitigation measures in the vicinity of Fort Belvoir and how much for
    Bethesda?
        Answer. The oversight of these funds is with the OEA from the OSD.
    The Army must work with OEA as they determine how the funds will be
    used.
                              army force reduction
        Question. Secretary Hammack, Secretary Gates has announced a
    reduction of 27,000 in Active Army end strength by 2015. It is my
    understanding that the drawdown in forces will be contingent on troop
    withdrawals in Afghanistan and as part of an Army force structure
    review.
        What impact will this anticipated drawdown have on the Army
    military construction (MILCON) program?
        Answer. The Army continues to review and analyze future force
    structure and operational adjustments to meet the directed 27,000-
    reduction in the Army end strength beginning in 2015. This reduction is
    contingent on troop withdrawals in Afghanistan, which are expected to
    reduce significantly by the end of 2014. If the anticipated drawdown
    occurs, end strength reduction plan options will be developed and
    provided to Army leadership for decisions. Based on Army leadership
    decisions, the Army will adjust the MILCON program as necessary during
    the annual reconciliation of current construction requirement. No
    decisions have been made as to what type of units or what installations
    will be impacted.
        Question. How is it that there is a discussion on reducing force
    strength when the Army has not completed the MILCON piece of the
    current Grow the Army (GTA) initiative?
        Answer. The GTA initiative was a restructuring to the Army
    organization using the brigade as the centerpiece formation. The
    discussion on the 27,000-reduction in Army end strength is conditioned
    on projected reduction in demand for ground combat forces in
    Afghanistan, which is expected to be significantly reduced by the end
    of 2014. Assuming these conditions, an implementing plan will be
    developed and a set of options presented to Army senior leadership for
    decisions. However, at this point in time, no decisions have been made
    as to the type of units or installations that will be affected. As the
    Army's end strength is reduced, we expect that the impacts to the
    MILCON program will be minimal and that decrements and adjustments to
    the MILCON program will be addressed upon the conclusion of this year's
    Total Army Analysis.
        Question. Are there additional GTA MILCON requirements beyond 2012?
        Answer. There are three GTA MILCON projects currently programmed
    for fiscal year 2013. The projects appear in the fiscal year 2012
    President's budget Future Years Defense Program.

                             [Dollars in thousands]
    ------------------------------------------------------------------------
                 Location                    Description      Estimated cost
    ------------------------------------------------------------------------
    Fort Carson.......................  Addition/Alteration           $5,700
                                         to Preventive
                                         Medicine Facility.
    Fort Stewart......................  Digital Multipurpose          17,000
                                         Training Range.
    Fort Drum.........................  Soldier Specialty             22,000
                                         Care Clinic.
    ------------------------------------------------------------------------

        These are the final Army GTA MILCON requirements.
                               army efficiencies
        Question. Secretary Hammack, the Secretary's efficiencies
    announcement included a $1.4 billion reduction in Army MILCON over the
    next 5 years. This included the elimination of $200 million in projects
    from the fiscal year 2012 request. However, you indicated in your
    written statement that the Army will be reviewing these decisions and
    will reserve the right to put projects back into future MILCON budgets.
        When will the Army begin this review?
        Answer. The Army reviews requirements on a continual basis. The
    Future Year Defense Program is developed and refined each year based on
    senior leader initiatives and priorities. The majority of the deferred
    projects ($1.4 billion reduction) supported quality-of-life, force
    projection, operational, and training range requirements. These
    projects may compete for funding to be included in future MILCON
    budgets based on current need and senior leader initiatives.
        Question. If some of the deferred projects need to be added back
    into the MILCON program, will the Army offer offsets to maintain the
    $1.4 billion in efficiencies?
        Answer. Yes, the Army will offer offsets to maintain the $1.4
    billion reduction in the Army's Military Construction Program.
                                     ______

                Questions Submitted by Senator Mary L. Landrieu
                     land acquisition efforts at fort polk
        Question. Regarding the land acquisition efforts at Fort Polk, I
    understand the company rejected the first two offers for the initial
    parcel of land. I have also been informed the local leadership,
    including one of the local mayors and a police jury president, has
    reached out to the landowner in an effort to move the process forward.
    What is the status of the negotiation with that company?
        Answer. The Army Corps of Engineers (COE), Fort Worth District,
    Chief of Real Estate provided an initial written offer with maps and
    engaged in discussion with a local company official in Shreveport,
    Louisiana to purchase the initial tract of land. The local company
    official declined to make a counter offer or proceed with negotiations.
    To encourage company officials to reconsider, a second offer letter was
    elevated to the company's principle business office in Boston,
    Massachusetts. Company officials are reviewing the offer and possible
    sale to the Government. We expect an update from the company mid- to
    late May 2011. To date no counter offer has been received and
    negotiations are not yet complete.
        Local and State representatives met with a company representative
    to emphasize the land acquisition's importance and Fort Polk's
    significance within Louisiana.
        All land negotiations are conducted by Government officials in
    accordance with the Uniform Relocation Act at 42 U.S.C. 4601, et. seq.
        Question. Have you spoken/engaged with the local leadership to
    inquire about their knowledge of the landowner and his/her asking
    price?
        Answer. There has been no direct dialogue between the COE's Fort
    Worth District, Chief of Real Estate, and local leadership to inquire
    about the landowner's asking price. In accordance with the Uniform
    Relocation Act, the Government offered market value for purchase of
    land. This value is not shared or made public with any party other than
    with the landowner involved. The COE is waiting on feedback to our
    offer directly from the landowner's corporate representative. To date,
    the COE has no knowledge that the landowner has stated an asking price.
    Instead, our understanding is that the landowner is assessing if a sale
    is in their best interest or even possible from their standpoint.
        Question. What is the plan for bringing the current landowner to
    the table for continued negotiations?
        Answer. The landowner has not rejected the Government's offer and
    continues to be involved with negotiations. When/if a counter offer is
    received from the landowner, those terms will be evaluated and
    negotiations will continue and possibly conclude with a purchase
    through a signed offer-to-sell and closing. However, if negotiations
    for purchase ultimately fail, the Army will have to re-evaluate
    training requirements and the land acquisition effort.
        Question. Would you please tell me the lead from the installation
    command who is working with the COE in the negotiations? As the Army
    continues with the Fort Polk land acquisition, I want to ensure we keep
    the right folks informed and to be of assistance where possible.
        Answer. The installation management command lead is the Fort Polk
    Directorate of Public Works.
        Question. Can you provide me a detailed list of the money that is
    currently available for use to acquire the additional acreage in
    question around Fort Polk, Louisiana?
        Answer. The list of money appropriated and programmed to acquire
    the additional acreage at Fort Polk is as follows:
      --$17 million military construction (MILCON) dollars have been
            appropriated for project number (PN) 74406 in fiscal year 2010;
      --$30 million MILCON dollars have been appropriated for PNs 66194 and
            72676 in fiscal year 2011, $6 million and $24 million,
            respectively;
      --$27 million MILCON dollars are being requested in fiscal year 2012
            for PN 66195; and
      --$30 million MILCON dollars are planned for PN 66196 in fiscal year
            2013.
        Question. Also, please detail when these different pots of money
    were appropriated to the Army, for what purpose, and in what account?
        Answer. Currently, only Military Construction, Army dollars have
    been appropriated for land acquisition at Fort Polk. These dollars were
    appropriated as follows:
      --one project for $17 million in fiscal year 2010;
      --two projects for $30 million in fiscal year 2011;
      --one project for $27 million has been requested in fiscal year 2012;
            and
      --one project for $30 million is planned in fiscal year 2013.
        Question. Also if any of these monies are at risk in the Army's
    overall budgeting process. I see this as an important project for the
    Army's training and recap efforts and want to provide the right amount
    of oversight to protect these appropriations.
        Answer. The Army does not currently see these dollars at risk. It
    is important to note that although land acquisition funds are requested
    as MILCON projects, in truth they have little in common with
    traditional facility construction projects. For example, they tend to
    have slower execution timetables, which are dependent upon having all
    of the funds on hand to conclude a negotiation in good faith with
    landowner(s). The Army would urge patience and caution when analyzing
    unobligated balances in the Military Construction, Army account, as
    unobligated balances in land acquisition programs deserve to be treated
    differently than regular construction projects.
        Question. The Army has indicated that the privatized family housing
    has been given the go-ahead to build roughly 192 additional units on
    Fort Polk. Will these be houses that are refurbished from existing
    units or will they be newly constructed units?
        Answer. The current family housing deficit at Fort Polk is 192
    units. Of that deficit, the project will construct 112 new units. The
    remaining 80 units will likely be addressed via a variety of methods--
    i.e., home purchases, soldiers choosing not to bring their families to
    Fort Polk, or soldiers residing outside the defined commute area.
        Question. And what is the time frame for completion?
        Answer. All 112 of the new homes will be constructed by March 2014.
        Question. I am encouraged to hear that Fort Polk was selected as
    participant in the Army's Net Zero Waste Program. What are the
    necessary steps that we (local, State, and Federal leaders) can take to
    make the Net Zero Waste Initiative a successful program in and around
    Fort Polk?
        Answer. Fort Polk is working with more than 70 local community
    partners to establish long-term goals and identify opportunities to
    improve sustainable practices. Local mayors, the Louisiana Economic
    Development Agency, and industry are very proactive and support
    establishing a regional recycling program. Continued partnerships among
    the Army, local community groups, and other key stakeholders are
    critical in meeting the Net Zero Waste goal at Fort Polk.
        Question. Are there any steps that would help make this initiative
    viable for the long term?
        Answer. The continued collaboration between Fort Polk and local
    community stakeholders to address regional waste reduction will ensure
    that the Net Zero Waste initiative is viable into the future. A
    regional recycling facility will reduce the total volume of waste that
    has to be disposed of in local landfills, directly assisting both Fort
    Polk and the local communities to achieve sustainable goals.
        Question. Are there any public-private partnership opportunities?
        Answer. No, family housing was privatized in September 2004,
    lodging was privatized in August 2009, and there are no additional
    privatization opportunities being considered at this time.
        Question. The soldiers and the families of Fort Polk deserve
    quality housing. The first six renovated barracks are receiving very
    positive revues from the soldiers and their leaders. Would you provide
    me with a detailed time frame for the proposed completion of the
    remaining barracks that are slated for renovation?
        Answer. The Army has engaged in a long-term initiative, the
    Barracks Modernization Program, to improve living conditions for
    soldiers residing in permanent party barracks at all Army
    installations. Fort Polk has an inventory of 4,920 spaces in 33
    barracks buildings for permanent party single soldiers in the ranks of
    private through sergeant. The sustainment, restoration, and
    modernization (SRM) funded fiscal year 2008-2009 projects to renovate
    16 barracks buildings and four central energy plants are scheduled to
    be completed by February 2013. The Army is planning on renovating six
    more barracks buildings with SRM funding in 2011 with completion
    scheduled for 2013. Ten more barracks buildings are planned for
    renovation through SRM-funded projects in fiscal year 2012. These
    renovations are estimated to be completed by fiscal year 2014.
                                     ______

              Questions Submitted by Senator Kay Bailey Hutchison
                           heavy brigade combat team
        Question. Secretary Hammack, the Department of Defense announced on
    Friday, April 8, that the Army will be re-deploying one heavy brigade
    combat team (BCT) from Germany to the United States, although it is not
    yet determined which BCT will be redeployed and the move would not
    occur until 2015. As you are aware, there are only two heavy BCTs in
    Europe, the 170th infantry brigade in Baumholder and the 172nd infantry
    brigade in Grafenwoehr. How will the Army determine which BCT will be
    redeployed and what installation in the United States the BCT will be
    re-deployed to?
        Answer. The Department of Defense recently announced that it will
    retain three BCTs in Europe to maintain a flexible and rapidly
    deployable ground force to fulfill the United States' commitments to
    NATO, to engage effectively with allies and partners, and to meet the
    broad range of 21st century challenges. In addition, the Secretary of
    Defense announced plans to reduce the Active component Army end
    strength by 27,000 soldiers beginning in 2015. In light of these
    announcements, the Army is conducting a thorough analysis to determine
    the overall makeup of the force. Any BCT stationing decisions will be
    addressed, along with other force structure actions, at the conclusion
    of this year's Total Army Analysis.
        Question. Secretary Hammack, on January 11 when Secretary Gates
    made his announcement about efficiency initiatives that the Department
    was looking to implement, he mentioned that in an effort to save $6
    billion the Army's permanent Active Duty end strength would be reduced
    by 27,000 troops starting in 2015. Is it your assessment that the BCT
    scheduled to be redeployed from Germany could be impacted by these
    troop cuts?
        Answer. No decision has been made as to what types of units or what
    installations will be impacted by the Secretary of Defense announcement
    to reduce the Active component by 27,000 soldiers. The Army is
    conducting a thorough analysis to determine the unit and stationing
    implications associated with this end strength reduction.
                                     ______

                 Question Submitted by Senator Mitch McConnell
                           the blue grass army depot
        Question. The Blue Grass Army Depot (BGAD) industrial operations,
    specifically the mine resistant ambush protected (MRAP) and chemical
    defense equipment (CDE) operations, are important missions that support
    the combat fighters. What is the Department of Defense's plan for these
    two critical functions, for the overall future workload at BGAD in this
    vein and for the relevant work force at BGAD?
        Answer. Thank you for recognizing the importance of our mission at
    BGAD. I will address your MRAP question first. The Joint Program
    Management Office for MRAPs is currently storing MRAP kits and raw
    materials at BGAD on a year-by-year basis as needed. In fiscal year
    2011 we will provide approximately $500,000 to fund storage operations,
    to date $250,000 has already been provided. We anticipate the same
    level of funding in fiscal year 2012. The plan for the CDE mission at
    BGAD is to execute the same level of funding in fiscal year 2012 that
    was executed in fiscal year 2011--$2.4 million. BGAD possesses a unique
    stock, store, and distribution system that has the capability to manage
    shelf life items. There are more than 400 CDE items that require
    intensive shelf life management.
                                     ______

                    Question Submitted by Senator Roy Blunt
                     land acquisition efforts at fort polk
        Question. Can you please provide an accounting of the actions being
    taken by the Army to expeditiously repair and replace housing and
    training facilities damaged or destroyed by the tornadoes that affected
    Fort Leonard Wood in February?
        Answer. The installation management command has validated a cost
    estimate of $19 million in sustainment, restoration, and modernization
    and base operations support costs as a result of the tornado damage.
    Currently, the installation has completed 65 projects; 53 projects are
    under construction; and 15 projects are in the design phase and
    contracting phase. Fort Leonard Wood has completed 85 percent of the
    installation cleanup. Operations and training at Fort Leonard Wood are
    normal; the installation has provided workarounds until all repairs/
    replacements are made to facilities, ranges, and training areas so no
    training or normal operations are hindered.
        Fort Leonard Wood had/has surplus housing and the tornado did not
    adversely impact the supply of housing. Prior to the tornado, Fort
    Leonard Wood was drawing down from 2,242 homes to an end state of 1,806
    homes and that plan remains the same. The project will replace all 40
    destroyed homes with new construction and build an additional 100 new
    homes with $15.75 million in Grow the Army funds previously transferred
    to the Family Housing Improvement Fund for privatization initiatives.
        Construction is anticipated to begin July 1, 2011. All of the
    damaged homes will be repaired with insurance proceeds--final estimates
    are still pending.
                                     ______

                  Questions Submitted to General James Boozer
                   Questions Submitted by Senator Tim Johnson
                        brigade combat team announcement
        Question. General Boozer, on Friday, the Department of Defense
    announced its intent to revise force posture in Europe. As part of that
    announcement, the Department intends to retain three brigade combat
    teams (BCTs) in Europe instead of four.
        Will the fourth BCT be re-stationed in the United States or is
    there a possibility that it will be deactivated?
        Answer. A decision has not yet been made regarding the heavy
    brigade. The Army continues to anticipate increased budget pressures
    which will require that it evaluate force capabilities and structure.
    The required Active component end strength reduction may impact all
    installations across the force. A stationing decision for the BCTs and
    other force structure actions, to include end strength reductions, will
    be addressed at the conclusion of this year's Total Army Analysis.
        Question. How will this decision impact Army bases at Bamberg and
    Schweinfurt in Germany?
        Answer. Future impact to the Army bases at Bamberg and Schweinfurt,
    to include the locations for the three BCTs to remain in Europe, will
    be determined at the conclusion of the this year's Total Army Analysis.
        Question. Is the Army end strength reduction linked to the
    reduction of one BCT in Germany?
        Answer. The disposition of BCTs in Europe was pending NATO's
    strategic concept and U.S. defense posture. To date, no decisions have
    been made as to what types of units or what installations will be
    impacted by the Secretary of Defense announcement. The Army will
    develop its plan to adjust force structure to meet the 27,000 end
    strength reduction, and a set of options will be presented to Army
    senior leadership for decision.
                                     ______

              Questions Submitted by Senator Kay Bailey Hutchison
                       barracks facilities in grafenwoehr
        Question. General Boozer, the Army requested $75.5 million in
    fiscal year 2011 for construction of new barracks facilities in
    Grafenwoehr, home of the 172nd heavy brigade combat team (BCT), and for
    fiscal year 2012 the Army is requesting $38 million in new military
    construction (MILCON) projects for a new barracks facility, chapel, and
    convoy live fire range. Why is the Army requesting more than $100
    million for new construction in Grafenwoehr if the 172nd BCT could
    potentially be redeployed to the United States?
        Answer. All of the MILCON projects requested in Germany for fiscal
    year 2011 and fiscal year 2012, including the projects at Grafenwoehr,
    have validated requirements that would still exist regardless of
    whether the 172nd heavy BCT is, or is not, selected to depart from
    Europe. The Army's construction request in Europe was specifically
    planned to be neutral on BCT stationing, given that no decision on
    force posture in Europe had been made at the time the budget was
    developed.
                   brigade combat team complex at fort bliss
        Question. General Boozer, as you are aware the American taxpayers
    have spent more than $437 million to build a brand new BCT complex at
    Fort Bliss. If the decision is made not to re-deploy a heavy BCT to
    Fort Bliss, what will become of this brand new facility?
        Answer. The Army asserted in its gap analysis that the 48th BCT
    MILCON would be required to support population increases as well as to
    address facility requirements related to the activation of the 212th
    fires brigade (fourth quarter fiscal year 2011), the re-stationing of
    the 15th sustainment brigade (second quarter fiscal year 2011), and the
    pending increased mission requirements pertaining to the Army
    Evaluation Task Force, effective second quarter fiscal year 2011. The
    current Fort Bliss Facility Synchronization Plan includes:
          212th Fires Brigade.--Re-stationing to Fort Bliss (fourth quarter
            fiscal year 2011), and is scheduled to occupy its phase 1/
            recently completed MILCON, as well as a portion of the BCT No.
            48 complex (supporting its requirement for two tactical
            equipment maintenance facilities and six company operation
            facilities).
          15th Sustainment Brigade (Headquarters and Headquarters Company
            Only).--Relocated from Fort Hood in second quarter fiscal year
            2011, moving into a portion of the BCT No. 48 complex.
          Division Special Troop Units.--Expected activation date of third
            quarter fiscal year 2011, with planned facility support to
            include legacy facilities, relocatables, and a portion of the
            48th BCT complex, once completed third quarter fiscal year
            2011.
          Army Evaluation Task Force.--Currently resides in legacy
            facilities on main post. Pending senior leadership review and
            approval, the Army Evaluation Task Force could conduct a phased
            movement of its mission operation and personnel to the 2/1AD
            BCT complex.
        Although the decision to remove one brigade from Europe by 2015 was
    announced, the Army has yet to determine which one of the four brigades
    will be removed from Europe, has not determined if it will relocate to
    the United States, nor has any decision been made on its final
    location. However, should a BCT be returned to Fort Bliss, additional
    MILCON will be required to support its relocation.
                                     ______

                Questions Submitted to General Raymond Carpenter
                   Questions Submitted by Senator Tim Johnson
                           lack of earmarks/plus-ups
        Question. In past years, the Congress has made it a priority to
    provide additional military construction (MILCON) funding for the Army
    Guard and Army Reserve in the form of earmarks and plus-ups to account
    top-lines.
        General Carpenter, with the increased reliance on the National
    Guard for operational mission support, and the overwhelming need to
    improve Guard facilities for training, can the Guard realistically meet
    its MILCON requirements without help from the Congress through
    earmarks?
        Answer. The President's budget does not assume the receipt of
    earmarks, and our internal processes are based on mission-related
    requirements. Earmarks have, in the past, addressed the replacement and
    maintenance of legacy facilities and meeting mission requirements. The
    President's budget request provides distribution of MILCON resources
    within established priorities of the Army.
        Question. What impact will the current ban on earmarks have on the
    Guard MILCON program?
        Answer. The internal process for selecting MILCON projects in the
    President's Budget is based on mission related requirements and does
    not assume the receipt of earmarks. This selection process will not
    change if earmarks are not received. The President's budget request
    provides distribution of resources within established priorities of the
    Army and identifies the Army National Guard's level of funding for the
    Military Construction, Army National Guard program.
                                     ______

                    Questions Submitted to Mr. James Snyder
                   Question Submitted by Senator Tim Johnson
                           lack of earmarks/plus-ups
        Question. Same question to you, Mr. Snyder--what impact will the
    earmark ban have on the Army Reserve's ability to meet its military
    construction (MILCON) requirements?
        Answer. The earmark ban will have a minimal impact on the Military
    Construction, Army Reserve program. The President's budget request
    provides an equitable distribution of resources within the established
    priorities of the Army and provides the Army Reserve with $281 million
    for the Military Construction, Army Reserve program. However, as with
    the Active component and the National Guard funding, the Army Reserve
    funding is currently not sufficient to address all of the Army Reserve
    requirements to include modernizing our legacy facilities and upgrading
    our facilities to meet current operational training standards.
                                     ______

                  Questions Submitted by Senator Mark L. Pryor
                          army strong community center
        Question. The Army Strong Community Center (ASCC) is an element of
    the Army Reserve virtual installation that was created to fill gaps in
    services and to support geographically dispersed service members,
    retirees, veterans, and their families. There are currently four pilot
    sites:
      --Rochester, New York;
      --Brevard, North Carolina;
      --Coraopolis, Pennsylvania; and
      --Oregon City, Oregon.
        I understand a new ASCC recently opened in Oregon. Can you talk
    briefly about how this program works and the future expansion of the
    project?
        Answer. ASCCs are an element of the Army Reserve Virtual
    Installation Program created to fill in gaps in services, and support
    geographically dispersed soldiers, retirees, veterans, and their
    families. The ASCCs provide responsive support through a personal touch
    by trained, qualified, and skilled staff. They combine military and
    community resources to provide, virtually, the same level access to
    support that soldiers and families would expect from a military
    installation.
        Soldiers and families need responsive services near where they
    live, and should not be required to drive great distances to Active
    component installations. The ASCCs connect soldiers and families with
    services that exist in the community, and provide them directly via
    personal touch, to obtain resolution. The ASCCs also build community-
    based capacity and foster effective Federal, State, and local
    partnerships. Through these efforts, initiatives are built and
    strengthened, while partnerships are fostered, and services coordinated
    to support the strength, resilience, and readiness of soldiers and
    their families. There are currently four pilot ASCCs in operation:
      --Rochester, New York;
      --Brevard, North Carolina;
      --Coraopolis, Pennsylvania; and
      --Oregon City, Oregon.
        As each pilot ASCC opens, Army Reserve Family Programs conducts
    analysis of their usage, types of issues resolved, and the demographics
    served in order to ensure proper selection of new pilot sites, services
    offered, and staffing. Plans for a total of six pilot sites, in both
    rural and urban areas, in partnership with Federal, State, and local
    agencies, are in motion.
        Question. As you know, Arkansas has many rural areas and a
    significant number of Reserve members. I read there are four locations
    to be added throughout the year. What criteria do you look at when
    deciding where to open the centers?
        Answer. Army Reserve Family Programs conducts market research and
    analysis of the areas throughout the country to determine the Army
    Reserve's ability to partner with local community and other
    organizations to create a network to assist Army Reserve soldiers and
    families.
        ASCCs build community capacity and foster effective partnerships
    with Federal, State, and community agencies, as well as with veterans'
    and social service organizations. We are looking for opportunities to
    partner with community colleges, Veterans' Affairs centers, and other
    cost-effective locations.
        Prior to opening a pilot ASCC the criteria used to determine each
    site includes the below elements:
      --Army Reserve soldier and veteran population within 50-mile radius.
      --Installation Army community services, Navy family services, Air
            Force Family Service Centers, and National Guard Family
            Assistance Centers within 50-mile radius.
      --Facilities with easy access for soldiers and families, space for
            parking, office suite that has private office space,
            comfortable waiting area for adults and children, Internet, and
            e-mail capability, controlled access, and safety features.
                          Department of the Air Force

    STATEMENT OF HON. TERRY A. YONKERS, ASSISTANT SECRETARY
                OF THE AIR FORCE (INSTALLATIONS,
                ENVIRONMENT AND LOGISTICS)
    ACCOMPANIED BY:
            MAJOR GENERAL TIMOTHY A. BYERS, CIVIL ENGINEER, UNITED STATES
                AIR FORCE
            MAJOR GENERAL WILLIAM H. ETTER, DEPUTY DIRECTOR, AIR NATIONAL
                GUARD
            MAJOR GENERAL JAMES F. JACKSON, DEPUTY CHIEF, UNITED STATES AIR
                FORCE RESERVE

        Senator Johnson. I am pleased to welcome our second panel
    of witnesses. The Hon. Terry A. Yonkers, Assistant Secretary of
    the Air Force; Major General Timothy A. Byers, the Air Force
    Civil Engineer; Major General William H. Etter, Deputy Director
    of the Air Guard; and Major General James F. Jackson, Deputy
    Chief of the Air Force Reserve.
        This year's military construction (MILCON) budget for the
    Air Force is $1.4 billion, which is $97 million more than last
    year's request.
        I am pleased to see that the Air Force Reserve request is
    more than triple the fiscal year 2011 request, which funded
    only one project. But I note that the Air Guard's request is 40
    percent lower than last year's request.
        I continue to believe that more needs to be done to address
    the backlog of MILCON requirements for Guard and Reserve
    forces, and I am interested in your thoughts on the impact that
    a moratorium on earmarks will have on the Reserve's forces.
        As I said at last week's hearing, I recognize that there
    are hard choices we must make in these difficult economic
    times. But we must not shortchange our Reserve forces at a time
    when their resources and manpower are already stretched thin.
        Again, thank you for coming. We look forward to your
    testimony.
        Mr. 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. TERRY A. YONKERS

        Mr. Yonkers. Thank you, Mr. Chairman, Senator Kirk, and
    distinguished members of the subcommittee.
        I want to thank you for allowing us to be here today to
    talk to the subcommittee about our MILCON, housing, base
    realignment, and other programs within the jurisdiction of this
    subcommittee. Again, thank you very much for the continued
    strong support that you have provided to our Air Force over the
    years.
        As you mentioned, sir, today I am joined by the Civil
    Engineer of the Air Force, General Tim Byers, Deputy Director
    of the Air National Guard, General William Etter, as well as
    the Deputy Chief of Air Force Reserve, General Jim Jackson.
        I would like to put in a pitch, as you heard from Secretary
    Hammack, about the continuing resolution, and it is the
    criticality of getting this fiscal year 2011 appropriations
    bill passed. We right now have about $650 million worth of
    MILCON that is on hold in the same status as the Army with
    regards to ready to go designs, ready to be contracted for, but
    they are on hold because of the green light to proceed with new
    MILCON starts. That constitutes just about one-half of our
    MILCON projects for this year.
        A right-sized and efficient infrastructure is essential to
    enabling our total Air Force and airmen to perform their
    duties, while ensuring responsible stewardship of the fiscal
    resources we are entrusted with. Our fiscal year 2012
    President's budget request contains $2 billion for MILCON,
    family housing, and base realignment and closure (BRAC).
        The $1.4 billion MILCON request, as you mentioned, sir,
    ensures new construction is aligned with our weapon system
    deliveries and strategic basing initiatives, and keeps us on
    track to eliminate inadequate housing for unaccompanied airmen
    by the year 2017.
        The $1.4 billion MILCON request includes $147 million to
    continue supporting Guam Strike and the beddown of the
    persistent missions at Andersen Air Force Base, Guam, that
    include the fighters, the bombers, the tankers, and the
    intelligence, surveillance, and reconnaissance platforms that
    we will have there. Guam Strike provides the air power vital to
    the U.S. Pacific Command's theater's engagement plan. And we
    continue to work through the Office of the Secretary of
    Defense-established Joint Guam Program Office, who ensures all
    the services' requirements are planned collaboratively for
    maximum effectiveness, efficiency, and synergy at Guam.
        The Air Force is well on its way to privatize the 52,500
    houses on all of our bases in the continental United States by
    the year 2012. To date, we have provided more than 1,500 new
    homes, 8,000 renovated homes for our airmen through housing
    privatization at 44 bases in 27 projects across the country.
        This would not have been possible without our private
    sector partners who have allowed us to do $6.5 billion worth of
    development for an Air Force investment of $423 million. That
    is a 15-to-1 exchange and leverage.
        There are six privatized housing projects yet to be done--
    Southern Group, Joint Base Elmendorf-Richardson, the Western
    Group, the Continental Group, Air Combat Command Group III, and
    the Northern Group--that remain and will provide upgraded
    houses at 19 installations. The final project, the Northern
    Group, sir, which I know you are familiar with, is scheduled to
    close January 2012.
        Our efforts to provide quality housing for airmen and their
    families also includes nearly $500 million to sustain and
    modernize overseas housing and support housing privatization in
    the continental United States.
        As far as BRAC 2005 is concerned, the Air Force is on track
    to fully implement all of the statutory requirements required
    of us by the BRAC 2005 legislation. And we are fully funded at
    the $3.8 billion that has already been authorized.
        Housing for our unaccompanied airmen remains a top priority
    for us. Our fiscal year 2012 budget request includes seven new
    construction dormitory projects that total $190 million.
        This investment keeps us on track to meet our 2017 goal to
    provide adequate dormitories for all our unaccompanied airmen.
        We are also supporting our partners at the Joint Base
    Elmendorf, Alaska; Joint Base San Antonio, Texas; and Joint
    Base Langley-Eustis in Virginia with a construction of three
    more dormitories worth $190 million. These projects represent
    the last of the joint base MILCON funds transferred to the Air
    Force.
        Let me shift gears just a little and talk about
    environmental and some of the efficiencies that we are looking
    at within the portfolio of Installations, Environment and
    Logistics.
        Earlier this year, I signed out a policy that refocuses our
    environmental restoration efforts. The policy moves us much
    closer to completing cleanups of contaminated sites by
    leveraging available technologies and industry innovation
    through such contracting mechanisms as performance-based
    contracts.
        We have established some new goals to get to the end point
    much sooner than we are scheduled to do prior. For example, we
    are looking at accelerating the completion of sites of 75
    percent of our Active bases by the year 2015, and for our BRAC
    sites, 90 percent by the same time frame.
        Our Air Force installations, renewable energy is a key
    pillar to our goal for increasing energy supply. Increasing
    energy efficiency is central to addressing our goal of reducing
    the energy demand.
        In fiscal year 2010, the Air Force funded 100 percent of
    our eligible MILCON projects to meet the LEED Silver standards.
    We have designed all new buildings since 2007 to be at least 30
    percent more energy-efficient. Within the Federal Government,
    the Air Force is also a leader in renewable energy use with 6.4
    percent of our electricity coming from renewables to date. Last
    year, we had 85 renewable energy projects on our bases that
    produced more than 34 megawatts of power and we expect to have
    1,000 megawatts of renewable power in production within the
    next couple of years.
        The budget request and efficiencies described here
    represent only a small sample of the efforts to meet our
    responsibilities to our airmen and to the Nation. While these
    are certainly challenging times for everyone, sir, and you have
    said it, the Air Force remains committed to fulfilling its
    obligation to fly, fight, and win as never before.

                               PREPARED STATEMENT

        Chairman Johnson, Senator Kirk, and distinguished members
    of the subcommittee, it is really an honor again to be here
    today and thank you for your continued support. I look forward
    to your questions.
        [The statement follows:]
                  Prepared Statement of Hon. Terry A. Yonkers
                                  introduction
        The United States faces diverse and complex security challenges
    that require a range of agile and flexible capabilities. From the
    ongoing conflicts in Afghanistan and Iraq, to potential confrontation
    with aggressive State and non-State actors, to providing humanitarian
    assistance, the Air Force continues to provide capabilities across the
    range of potential military operations. As part of this effort, we must
    ensure that we have right-sized and efficient infrastructure that
    enables our most valuable resource, our total force airmen, to perform
    their duties, while ensuring responsible stewardship of fiscal
    resources. To maximize our contributions to the joint team, we
    structured our resource choices by balancing them across the near- and
    long-term.
        Over the last year, the Air Force has striven to deliver our
    trademark effectiveness in the most efficient way possible. We are
    focused on five priorities, which serve as a framework for this
    testimony:
      --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 cyberspace inventories, organizations,
            and training; and
      --Recapture acquisition excellence.
                                    overview
        Our fiscal year 2012 President's budget request contains $2 billion
    for military construction (MILCON), military family housing, and base
    realignment and closure (BRAC). The $1.4 billion MILCON request
    represents an increase of $97 million more than fiscal year 2011,
    allowing us to invest in the top priorities of the Air Force and our
    combatant commanders, even in a fiscally constrained environment. This
    request also ensures new construction is aligned with weapon system
    deliveries and strategic basing initiatives. In addition, we continue
    our efforts to provide quality housing for airmen and their families by
    dedicating nearly $500 million to sustaining and modernizing overseas
    housing, and supporting housing privatization in the continental United
    States. Our unaccompanied airmen remain a top priority; we request $190
    million to invest in dormitories, keeping us on track to meet our goal
    of eliminating inadequate housing for unaccompanied airmen by 2017.
    Finally, we also request $124 million to continue completing our legacy
    BRAC programs and environmental clean-up.
        In the course of building the fiscal year 2012 budget request, we
    applied asset management principles to ensure maximum efficiency
    without compromising the effectiveness of our installation weapons
    systems, the platforms from which we fly and fight. This was
    accomplished through the judicious funding of our sustainment
    priorities (for example, spending money in the right place at the right
    time to keep our good facilities good) and using MILCON to recapitalize
    existing facilities first, as a preferred alternative to growing our
    footprint.
                 continue to strengthen the nuclear enterprise
        Since its inception, the Air Force has served as a proud and
    disciplined steward of a large portion of the Nation's nuclear arsenal.
    We steadfastly secure and sustain these nuclear weapons to deter
    potential adversaries and to assure our partners that we are a reliable
    force providing global stability. Reinvigorating stewardship,
    accountability, compliance, and precision within the nuclear enterprise
    remains the Air Force's No. 1 priority. While we have made progress in
    this area, we have taken additional steps in the fiscal year 2012
    budget to continue to strengthen and improve this core function.
        Air Force Global Strike Command achieved full operational
    capability on September 30, 2010, moving all Air Force nuclear-capable
    bombers and intercontinental ballistic missiles under one command. In
    addition to ensuring that our organizations and human resource plans
    support this mission, we are also concentrating on the infrastructure
    and facilities that are crucial to our success. Air Force civil
    engineers have conducted enterprise-wide facility assessments and
    understand that a significant portion of the existing infrastructure
    will require modernization or complete replacement in the years ahead.
    Our fiscal year 2012 budget request begins to address these issues with
    $75.6 million in MILCON for the nuclear enterprise, including a B-52
    maintenance dock at Minot Air Force Base, North Dakota, and an addition
    to the Air Force Nuclear Weapons Center at Kirtland Air Force Base, New
    Mexico. These and similar projects in the years to come will ensure
    maximum effectiveness for the Air Force's most important mission.
         partner with the joint and coalition team to win today's fight
        Our Air Force continues to project air, space, and cyber power to
    great effect in our conflicts in Afghanistan and Iraq, and our men and
    women make incredible contributions every day. We currently have more
    than 33,000 airmen deployed, including nearly 2,300 Air Force civil
    engineers. Nearly one-half of these engineers are filling joint
    expeditionary taskings, serving shoulder-to-shoulder with our solider,
    sailor, and marine teammates. Due to their wide array of skills, 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 in high demand in several theaters of
    operation.
        In addition to the contributions and sacrifices of our airmen, our
    fiscal year 2012 budget request invests $366 million in projects that
    directly contribute to today's fight. Examples include the following:
          Projects Supporting Our Combatant Commanders That Will Greatly
            Enhance Ongoing Operations.--These include the recapitalization
            of headquarters, United States Strategic Command at Offutt Air
            Force Base, Nebraska and a new air freight terminal complex at
            Andersen Air Force Base, Guam.
          New Facilities for Operations and Mission Support.--A new air
            support operations facility at Fort Riley, Kansas will further
            our efforts to support joint terminal attack control
            specialists as they partner with ground forces to integrate
            airpower in Iraq and Afghanistan. Additionally, we are
            strengthening communications capabilities of combatant
            commanders with a satellite communications relay in Sigonella,
            Italy, and a communications and network control center at
            Nellis Air Force Base, Nevada.
          Improvements at Andersen Air Force Base, Guam.--Three projects
            continue to support the Guam Strike initiative, consolidating
            operational capability for fighter and bomber operations at the
            base.
                 develop and care for airmen and their families
        The all-volunteer force provides the foundation for our flexibility
    and agility. Our fiscal year 2012 budget request reflects a commitment
    to providing first-class housing, while focusing on training and
    education, and striving to improve the overall quality of life for our
    airmen and their families.
        The best airmen in the world deserve the best facilities in the
    world, and our fiscal year 2012 budget request supports that goal. We
    aim to build upon the foundation laid during the Year of the Air Force
    Family, and utilize new data such as our 2010 Dormitory Master Plan to
    ensure we effectively allocate taxpayer dollars to our most pressing
    requirements.
    Billeting
        We continue our efforts to provide quality housing for our airmen
    deployed to the U.S. Central Command theater with the fourth phase of
    the Blatchford-Preston Complex at Al Udeid Air Base, Qatar. This $37
    million project will build two dormitories, raising the billeting
    capacity there to 3,332 rooms.
    Dormitories
        Housing for our unaccompanied airmen remains a top priority, and
    our Dormitory Master Plan provides valuable insight into how to
    maximize the impact of our investment. Our fiscal year 2012 budget
    request includes seven dormitory projects totaling $190 million. These
    include dorms at:
      --Travis Air Force Base, California;
      --Osan Air Base, Korea;
      --Eielson Air Force Base, Alaska;
      --Minot Air Force Base, North Dakota;
      --Ramstein Air Base, Germany;
      --Thule Air Base, Greenland; and
      --Cannon Air Force Base, New Mexico.
        This investment keeps us on track to meet our 2017 goal to provide
    adequate housing for all unaccompanied airmen. We are also supporting
    our partners at Joint Base Elmendorf, Alaska; Joint Base San Antonio,
    Texas; and Joint Base Langley-Eustis, Virginia, with the construction
    of three dormitories worth $193 million. These projects represent the
    last of the Joint Base MILCON funds transferred to the Air Force.
    Training and Education
        The most professional airmen in the world grow into the world's
    best noncommissioned officers because of the investments we make in
    their education, starting from the day they enlist. We have two
    projects in this year's program totaling $78 million that address these
    areas. They include the fourth phase of the basic military training
    complex at Lackland Air Force Base, Texas, and an Education Center at
    Vandenberg Air Force Base, California.
    Military Family Housing
        We are carrying forward the momentum we gained during the Year of
    the Air Force Family with continued investment in building thriving
    housing communities. Our fiscal year 2012 budget request for military
    family housing is nearly $500 million. Included in this request is $85
    million to improve nearly 1,400 homes in Japan and the United Kingdom
    and an additional $405 million to fund operations, maintenance,
    utilities, and leases, and to manage privatized units for the family
    housing program.
        Housing privatization has leveraged $423 million into $6.5 billion
    in private sector financing; it is central to the success of our
    housing initiatives. At the start of fiscal year 2012, we will have
    47,700 privatized units, increasing to 52,500 by January 2012, when 100
    percent of our family housing in the United States will be privatized.
    Child Development Centers
        The final component of caring for airmen and families is ensuring
    the children of our service men and women receive the same standard of
    care at installations around the world, from bases in major
    metropolitan areas to those in remote locations to those overseas. The
    American Recovery and Restoration Act allowed us to allocate $80
    million for eight new child development centers, to help ensure that
    our force has adequate child care capacity. This year, we have only one
    requirement for a child development center, at Holloman Air Force Base,
    New Mexico. This $11 million project will get our airmen's children out
    of temporary, substandard facilities.
     modernize our air, space, and cyberspace inventories, organizations,
                                  and training
        Modernizing our force to prepare for a wide range of future
    contingencies requires a significant investment. For fiscal year 2012,
    a key focus area is enabling the beddown of several new weapon systems.
    Therefore, we are requesting $233 million for a variety of MILCON
    projects, including:
          Five Projects To Beddown Our Newest Fighter, the F-35.--This
            includes the F-35 force development and evaluation mission at
            Nellis Air Force Base, Nevada, the second training location at
            Luke Air Force Base, Arizona, and the first operational unit at
            Hill Air Force Base, Utah.
          Three Projects Supporting Our HC/EC/C-130J Fleet.--These projects
            include a joint use fuel cell at Davis-Monthan Air Force Base,
            Arizona, and flight simulators at Davis-Monthan and Pope Air
            Force Base, North Carolina.
          Three Projects Supporting the Pacific Regional Training Center at
            Andersen Air Force Base, Guam.--This requirement was driven by
            the re-location of the 554th RED HORSE from Korea to Guam in
            2007, along with an increased need for expeditionary training
            in the Pacific.
          Other Projects.--These will support diverse mission areas,
            including C-5 training, F-22 support, the F-16 beddown at
            Holloman Air Force Base, New Mexico, and support operations at
            Barksdale Air Force Base, Louisiana; Fairchild Air Force Base,
            Washington; the United States Air Force Academy, Colorado; and
            Cannon Air Force Base, New Mexico.
                        recapture acquisition excellence
        The Air Force continues its efforts to optimize the effective use
    of taxpayer resources in the acquisition of goods and services. By
    focusing on asset management principles, we have built a culture that
    supports the warfighter by delivering the right products and services
    on time, within budget, and in compliance with all applicable laws,
    policies, and regulations. Where possible, we seek strategic sourcing
    opportunities to maximize the use of available dollars, pursuing ways
    to leverage our size as we purchase common commodities and services to
    be used across the enterprise. Our engineering and contracting
    communities continue to partner on efforts to transform the processes
    that support Air Force installation-related acquisition.
                             other programs of note
     Base Realignment and Closure Actions
        Completing Air Force BRAC actions remains a priority for the Air
    Force and Department of Defense. The fiscal year 2012 request includes
    $123.5 million for legacy BRAC actions at our 28 remaining former
    bases, and $1.97 million to perform program management, environmental
    restoration, and property disposal at locations closed in BRAC 2005.
    The Air Force is on track to fully implement all BRAC 2005
    recommendations by the mandated September 2011 deadline.
    Legacy Base Realignment and Closure
                Real Property Transformation
        The Air Force remains a Federal leader in the implementation of the
    management principles outlined in Presidential Executive Order 13327,
    Federal Real Property Asset Management. We continue to aggressively
    manage our real property assets to deliver maximum value for the
    taxpayer, improve the quality of life for our airmen and their
    families, and ensure the protection and sustainment of the environment
    while providing the highest level of support to Air Force missions. The
    Air Force is achieving these goals through an enterprise-wide asset
    management transformation that seeks to optimize asset value and to
    balance performance, risk, and cost over the full asset lifecycle. Our
    approach is fundamentally about enhancing our built and natural asset
    inventories and linking these inventories to our decisionmaking
    processes and the appropriate property acquisition, management, and
    disposal tools. Even though the BRAC 2005 round did not substantially
    reduce the Air Force's real property footprint, our current
    transformation efforts seek to shrink from within and to leverage the
    value of real property assets in order to meet our ``20/20 by 2020''
    goal of offsetting a 20-percent reduction in funds available for
    installation support activities by achieving efficiencies and reducing
    by 20 percent the Air Force physical plant that requires funds by the
    year 2020.
                Base Realignment and Closure Property Management
        To date, the Air Force has successfully conveyed nearly 90 percent
    of the 88,000 acres of Air Force land directed by BRAC 1988, 1991,
    1993, 1995, and 2005 with the remainder under lease for redevelopment
    and reuse, or pending final transfer. With the successful redevelopment
    of Air Force BRAC property, local communities have been able to
    increase the number of area jobs by more than 45,000.
        To complete the clean up and transfer of remaining property, the
    Air Force is partnering with industry leaders on innovative business
    practices for its ``way ahead'' strategy. Of the 40 BRAC bases slated
    for closure--including BRAC 2005--the Air Force completed 23 whole-base
    transfers as of September 2010. Eleven of the remaining 17 legacy and
    BRAC 2005 bases are targeted for transfer by the end of fiscal year
    2011, while the remaining BRAC bases (Chanute, George, McClellan,
    Wurtsmith, Williams, and Galena) will transfer no later than the end of
    fiscal year 2014.
        In February 2011, I issued a memo directing accelerated site
    completion and performance-based remediation (PBR) performance
    objectives. For the BRAC program, 90 percent of all sites must be
    completed by 2015 and 95 percent under a PBR by 2014. Performance based
    remediation projects and contracts represent the Air Force's best tool
    for achieving site completion in the quickest time frame and best value
    to the Air Force, while still protective of human health and
    environment. Also included in this directive, is an initiative to
    reduce overhead and management costs to below 10 percent of program,
    costs.
    Joint Basing
        The Air Force remains committed to maximizing installation
    efficiency and warfighting capability, while saving taxpayer resources
    and being the best partner we can be. The Air Force has equity in 10 of
    the 12 joint bases and is the lead service for 6 of the 12. All 12
    bases achieved full operating capability on October 1, 2010. We
    anticipate that the benefits derived from this initiative will yield
    significant efficiencies and cost savings.
    Energy
        The Air Force energy vision is to reduce demand through
    conservation and efficiency, increase supply through alternative energy
    sources, and create a culture where all airmen make energy a
    consideration in everything we do. In pursuit of this vision, the Air
    Force continues as a Federal energy leader by advancing energy
    independence through coordinated efforts aimed at minimizing energy
    costs and leveraging proven technology in conservation measures and
    renewable energy development, while matching system reliability and
    critical asset security with Air Force mission requirements. These
    efforts effectively reduce dependence on commercial supply and delivery
    systems and enhance energy security for the Air Force. The Air Force is
    committed to reducing its greenhouse gas emissions and carbon footprint
    through the reduced use of fossil fuels consumed directly through
    vehicles and facilities or indirectly through consumption of fossil
    fuel-generated electricity from the national electric grids. In fiscal
    year 2012, we will continue our energy conservation efforts, which have
    already reduced facility energy use nearly 15 percent from 2003 levels.
    In fiscal year 2011, we exceeded our goals and produced or procured
    nearly 7 percent of our total facility energy from renewable sources,
    and we have led the Department of Defense as the No. 1 purchaser of
    renewable energy for the fifth year in a row.
                                   conclusion
        The Air Force remains a trusted and reliable joint partner--all-in
    to provide air, space, and cyberspace capabilities to our combatant
    commanders as they face the myriad short- and long-term security
    challenges in their areas of responsibility. Nearly two-thirds of the
    men and women serving in our Air Force today are actively supporting
    combatant commanders in their fight across the full spectrum of
    military operations from installations all over the world. Our fiscal
    year 2012 budget request balances warfighter requirements,
    recapitalization efforts, new mission beddowns, and quality-of-life
    requirements.
        As we have shown, it remains aligned with 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 cyberspace inventories,
            organizations, and training; and
      --Recapture acquisition excellence.
        In addition to being committed to providing and maintaining
    effective infrastructure, efficiently right-sized to support our
    missions and priorities, we are also committed to ensuring that we
    continue to care for our total force airmen and their families. This
    includes making good on our promise to provide first-class dormitories
    and housing with a focused determination to eliminate inadequate
    housing for all by 2017. Finally, we remain committed to ensuring the
    judicious and responsible use of taxpayer resources with every decision
    we make.
        In so doing, we remain focused on a continual pursuit of
    efficiencies that allow us to provide our trademark delivery of
    effective air, space, and cyber power while ensuring maximum impact
    from every $1 spent. Thank you for your continuing support of our
    Nation's Air Force.

        Senator Johnson. Thank you, Mr. Secretary.
        Secretary Yonkers, earlier this year Secretary Gates
    announced a DOD efficiencies initiative that included $34
    billion in savings from the Air Force through 2016. Will any of
    those savings be derived from the MILCON program?
        Mr. Yonkers. Thank you for the question, Senator Johnson.
    No, sir, the MILCON program remains untouched with regards to
    the efficiencies. We did take efficiencies in the sustainment,
    restoration, and modernization. And through various mechanisms
    such as better business practices, using asset management
    principles and through contracting and other mechanisms, we are
    pretty convinced that we are going to be able to do a better
    job in our facility sustainment and thereby reducing the
    investment that we are making there. Over the Future Years
    Defense Program, that should save us about $1.6 billion.
        But I will also remark that, just like the Army, we are
    beefing up our restoration and modernization accounts. And
    you've seen this, I think there is about $197 million
    additional for this fiscal year 2012 request to do exactly what
    the Army talked about doing, reducing our footprint with new
    construction and taking better care of the facilities that we
    already have in place.
        Senator Johnson. Secretary Yonkers, thank you for bringing
    us up-to-date to the Northern Group housing plan.
        Secretary Yonkers, the Air Force had a strong reservation
    about the joint-basing decision mandated by the BRAC 2005 at
    the beginning of the process. Where is the Air Force now on
    joint basing?
        Mr. Yonkers. Sir, I think we are all in. We were concerned
    initially as to whether or not the efficiencies would be
    returned as projected. I think we are now beginning to see that
    the fruit of those endeavors is beginning to bear out. As you
    probably know, we went full operational capability on all of
    the joint bases last year. So it has been a pathway for us to
    get to where we are.
        I have been out to almost every one of the joint bases now,
    including some of the Army lead as well as the Navy lead, and
    what I am seeing is a terrific amount of effort putting into
    making this work and work right. And I think over time that we
    will see this mature, we are going to start realizing those
    efficiencies that we expected when we started down this path
    some years ago.
        Senator Johnson. As you well know, the Congress has been
    helpful in the past by providing funding for additional MILCON
    dollars for the Air Guard and Air Force Reserve in the form of
    earmarks and plus-ups to account top lines.
        General Etter and General Jackson, with the ban on
    earmarks, does this change any of your funding priorities in
    the fiscal year 2012 request or future requests?
        General Etter. Senator, thank you for the question.
        The Air National Guard participates in the enterprise-wide
    integrated Future Years Defense Program MILCON process. Within
    the process, the Air National Guard is treated as a full
    partner. We appreciate the past strong support of the
    subcommittee and all the members. As with any set of
    priorities, often there are more requirements than resources.
    Any future support would help satisfy Air National Guard
    requirements.
        Senator Johnson. General Jackson.
        General Jackson. Mr. Chairman, thank you very much for the
    question.
        We have not seen an impact in our priorities. We, once
    again, compete within the Air Force total MILCON process. We
    get our fair share. We have been able to go ahead and put into
    the fiscal year 2012 budget our top two priorities, so we think
    that we are competing fairly there. And we will have to
    continue to go ahead and look for more efficient means and
    better ways of racking and stacking our projects.
        Senator Johnson. Senator Kirk.
        Senator Kirk. Thank you, Mr. Chairman.
        Secretary Yonkers and General Byers, are we going to see a
    full-tour norm proposal for Kunsan Air Base?
        Mr. Yonkers. Sir, as you know, the Secretary of Defense's
    instruction was to look at this from an affordability point of
    view and we all know that this is going to be a big bill to
    pay. I would say right now, we have looked at several
    alternatives, particularly for our housing at Kunsan Air Base,
    South Korea. And the spread of dollars that we are seeing is
    somewhere between $1.3 billion and $5 billion, depending upon
    whether or not we can work a public-private partnership, or
    whether we would go full up on a full MILCON.
        So right now, it is a question of affordability for us, and
    we have not made any decisions about it.
        Senator Kirk. Great. Obviously be a concern actually about
    both numbers.
        On the Andersen general plan, it is kind of the chamber of
    commerce view, but I think it is page 40 did give us the
    beginnings of what a master plan would look like.
        I think for us in the subcommittee, what would be most
    helpful is what the Office of the Secretary of Defense
    originally put out back in fiscal year 2009 for what Guam
    construction looks like. Would it be possible for you guys to
    update this so we could see what Andersen really looks like?
        Mr. Yonkers. Sir, we will be happy to share the Air Force's
    master plan for Guam.
        Senator Kirk. Does it exist, or is it just kind of this
    thing?
        Mr. Yonkers. Well, I will let General Byers also talk to
    this, but we have, as you know, identified the MILCON
    requirement for the full build-out of Guam Strike on Guam over
    the course of several years. That is going to be about $700
    million. So we already identified the MILCON and other kinds of
    requirements that are going to need to construct at Guam to
    meet our combatant commander support responsibilities for that
    area of the Pacific.
        General Byers. Senator Kirk, we have details on all of our
    plans for the next 20 years, our base master plan for Andersen
    Air Force Base, and we can definitely sit down and give you the
    rest of those details that you require.
        [The information was not available at press time.]
        Senator Kirk. Good. And the schedule of when things hit?
        General Byers. When we plan on doing it is based on the
    budget, yes, sir.
        Senator Kirk. Great.
        General Byers. If we have a beddown requirement and we know
    what year, we can do that.
        Senator Kirk. We are seeing the growth of unmanned aerial
    vehicle systems, obviously very big and popular. In my other
    life, I am a huge customer of them.
        At Sigonella, it is basically becoming an Air Force base
    now. Will we begin to see that takeover? I can't imagine there
    is much Navy happening there at all anymore, but with Unified
    Protector, it is kind of all your show.
        Mr. Yonkers. Senator Kirk, I have not been to Sigonella, so
    I cannot really respond, but maybe some of my other panel
    cohorts could.
        General Byers. Senator Kirk, as you mentioned, there are a
    lot of requirements there that the Air Force has put in,
    especially for unmanned aerial systems and obviously in our
    fiscal year 2012 request, a satellite communications relay
    parts for our unmanned aerial systems.
        There has not been a discussion with the Navy for any
    details of us taking over the base-operating support
    requirements for that particular installation at this point.
        Senator Kirk. It would seem that that would make sense for
    you guys.
        Last thing, and I raised this before with the Office of the
    Secretary of Defense side, but if I can go back to Guam for a
    second. It is a very complicated build, it is a very expensive
    build, and yet, it is completely worthless if it gets pummeled
    in the first hours of a conflict. And so, can we begin to think
    about what the MILCON requirements are to actually defend the
    island itself?
        Mr. Yonkers. Senator, you're making a great point. And you
    know, we harden, right now, our facilities based on climatic
    conditions. There is, as you probably----
        Senator Kirk. Unfortunately, the climate is going to be
    several hundreds of surface-to-surface missiles landing on the
    island.
        Mr. Yonkers. Yes, sir. I think we need to re-look this. I
    think your point is so well taken.
        There are a number of different options I think you are
    aware of with regards to dispersion and so forth, and those
    game plans haven't quite come together yet. And as they do, I
    think it will put more focus on the hardening and the defensive
    mechanisms that yet to be decided on the island and how we
    would defend against it.
        Senator Kirk. Yes. I meant to ask this of the Army, but
    since I have you guys there, it would seem that before tens of
    billions get thrown in there, you would put a missile defense
    base in and other ways to make sure that you were invulnerable
    to bomber and fighter or cruise missile strike.
        Mr. Yonkers. Sir, we are always happy to make commitments
    on behalf of the United States Army.
        Senator Kirk. Thank you.
        Thank you, Mr. Chairman.
        Senator Johnson. Senator Nelson.
        Senator Nelson. Thank you, Mr. Chairman, and thank you
    gentlemen for being here today.
        Secretary Yonkers, for the past several years, the need for
    a new U.S. Strategic Command (USSTRATCOM) headquarters building
    has been apparently identified as a requirement and priority.
    The Department's budget seeks to fulfill that requirement by
    requesting authorization of $564 million for a new
    headquarters.
        As I understand the request, the full authorization is
    being requested this year and the appropriation will be in
    three increments with the first phase being $150 million for
    fiscal year 2012.
        Could you outline the Air Force's decision to build a new
    facility versus to renovate the current headquarters?
        Mr. Yonkers. Senator Nelson, good to see you again, sir.
        Senator Nelson. Good to see you.
        Mr. Yonkers. You know this nuclear deterrent mission that
    is performed by USSTRATCOM is absolutely essential to our
    Nation. And this building that they are in right now, this
    building 500/515 is 57 years old. While the inside of this
    building and the outside structure are in pretty good shape,
    the infrastructure is in need of repair in any number of
    different ways. And we saw this back in December when the water
    pipe broke and flooded the basement of the building.
        As you accurately portray, the request is for $564 million
    spread across 3 years--$150 million in fiscal year 2012; $250
    million in fiscal year 2013; and the remainder in fiscal year
    2014 with an occupancy date on or about the latter part of
    fiscal year 2016 or the early part of fiscal year 2017.
        We are looking at phasing this for a number of different
    reasons. For one reason, affordability and what we can put into
    the budget on any particular fiscal year. But also from a
    practical point of view, in terms of being able to execute the
    construction, given those amounts of dollars, we need to spread
    it over the 3 years.
        Senator Nelson. Do you think the Air Force will be able to
    execute the $150 million needed in fiscal year 2012? I guess
    you were assuming that we would pass the budget and authorize
    it. But are you anticipating that that will be executed as a
    result of fiscal year 2012?
        Mr. Yonkers. I will give you my answer and then I will ask
    the Civil Engineer of the Air Force to embellish. But I don't
    think we are seeing any potential delays in being able to
    execute that $150 million. I mean, it really does depend upon
    how long it takes to get the green light to proceed. But right
    now I think we are going to be able to execute it.
        Senator Nelson. General Byers.
        General Byers. Senator Nelson, we will be 100-percent
    designed in June 2011 and ready to award as soon as the
    appropriation is available to us for fiscal year 2012.
        And just to embellish a little bit more on Mr. Yonkers'
    statement earlier. One of the things we did when I was the Air
    Combat Command Civil Engineer, working with General Chilton at
    the time he was the USSTRATCOM commander----
        Senator Nelson. Yes.
        General Byers [continuing]. Was to look at several options.
    We did a business case analysis and we also did an economic
    analysis, so two separate studies, to look at all the options:
    to renovate as-is, to build new, to do a modification of some
    new, and some renovate. And all those led to being the
    cheapest, being the fastest and the best impact to the mission
    was to build new, as we have brought into the fiscal year 2012
    program.
        Senator Nelson. Well, it is an obvious question, I guess I
    am just getting it for the record. What would be the impact of
    any reductions in the funding of this year? That sounds like a
    question for an engineer.
        General Byers. Yes, sir. The Army pretty well laid it out.
    Anything for fiscal year 2011, same issues. For fiscal year
    2012, any delay will cause a delay in the mission and the
    impact at Offutt Air Force Base is not quite as bad as Alaska,
    but it is still pretty cold there, and it does have a short
    construction season. So if the appropriation is enacted on
    time, we will get the best use of the construction timing and
    it won't delay the construction season, nor delay the mission,
    if we can stay on track.
        Senator Nelson. Well, you're right about Nebraska. We have
    two seasons. We have building season and football season. So.
        General Byers. Yes, sir.
        Senator Nelson. To optimize the construction process over a
    3-year period, stretching the funding over a 3-year period,
    that simply will be a good way to facilitate the construction.
    If you had all the dollars in a check right now, you couldn't
    put it all in the ground at the same time. Do you feel that
    that is an appropriate way to do this?
        I think maybe I'd ask the engineer first and then Secretary
    Yonkers. General Byers.
        General Byers. Sir, thanks again for a great question.
        You are spot on, we can't put $564 million in the ground
    right away. In fiscal year 2012, we have a lot of other
    priorities in the Air Force for quality of life and mission. So
    we went to the Office of the Secretary of Defense to ask for
    incremental funding of this project, in other words, one
    project authorized and awarded, but spread the money out to
    line up with the construction period. And that is what we did.
    Working real close with the Army Corps of Engineers, how much
    we needed in the first year of fiscal year 2012, how much in
    fiscal year 2013, and how much we need to finish up in fiscal
    year 2014.
        So it does a couple of things for us. It helps us get other
    MILCON dollars, into the right projects that we need. Second
    is, it ensures that we have enough money to continue the
    construction period without work stoppage; even if we are a
    little late in some fiscal years of appropriating the dollars,
    we should be okay.
        Senator Nelson. Mr. Yonkers, do you have any thoughts you
    would share?
        Mr. Yonkers. No, sir, I think General Byers answered the
    question.
        Senator Nelson. Thank you.
        Thank you, Mr. Chairman.
        Senator Johnson. Senator Tester.
        Senator Tester. Yes, thank you, Mr. Chairman. And I want to
    thank everybody for being here today to testify.
        I know that you are well aware of the mission conversion
    issues that we are working through in Montana with the Air
    National Guard unit, and if you are not, you can stop me right
    away.
        I want to thank the Air Force and the Air National Guard
    for working with the Montana Air National Guard as we continue
    to find the right solution with our manpower concerns and our
    potential mission conversion from F-15s to C-27Js.
        We have talked and written about this repeatedly over the
    past 2 years. It is a big change. But, in particular, I want to
    express my appreciation for the past observations about the
    value of an airspace east of Great Falls and what an important
    national asset that airspace is. My concern is that I don't
    want to see that airspace underutilized, and I think you share
    that same concern. There are very few places left in this
    country where we have the amount of room to operate overland.
    In fact, I don't know that there is any, 4.5 million acres with
    a lack of civilian over flights.
        Can we get your commitment that you won't forget about that
    national asset as the Air Force considers future requirements?
        Mr. Yonkers. Senator, I appreciate your comment. And as we
    talked when the civic group came in, for example, we recognized
    that is unused airspace, uncrowded airspace. It truly is a
    national asset.
        As we think through these future basing decisions, these
    kinds of things will come into play and will be a prominent
    criteria for how we decide where we are going to beddown
    whatever weapon system it is that we're talking about.
        Senator Tester. Okay. Thank you for that.
        As Air Force has concluded and indicated to us, the Air
    Force hopes to be transitioning the F-15s that are currently in
    Great Falls, Montana Air National Guard to the California Air
    National Guard in Fresno as part of a larger Air Force aircraft
    reconstruction plan very soon, contingent on the completion of
    an environmental impact statement (EIS).
        Is that correct?
        Mr. Yonkers. Yes, sir, that is correct.
        Senator Tester. What's the status of that EIS?
        Mr. Yonkers. I believe the EIS is about to be wrapped up in
    the latter part of the summer, if I remember the dates
    correctly. And so far the information that we have is that
    there really are no show stoppers on the EIS.
        Senator Tester. And what do they take into consideration?
        Mr. Yonkers. Any number of different things.
        Senator Tester. They can take into consideration noise on
    neighborhoods?
        Mr. Yonkers. Noise, air quality, biological, cultural, et
    cetera.
        Senator Tester. Do they take into consideration things like
    effectiveness of those fighters at the Montana Air National
    Guard versus the effectiveness those fighters would be with the
    California Air National Guard in Fresno?
        Mr. Yonkers. Typically environmental impact analyses do
    not. However, operational needs, requirements, and so forth do.
    And as you know, part of what you are talking about is a $3
    billion, almost a $4 billion savings as we restructured the
    Combat Air Forces, and looked at F-16s and F-15s.
        Senator Tester. I am all about the savings, but I have got
    to say it for the record, even though this isn't in your guys'
    bailiwick. I am a little biased, but I don't mind basing it on
    fact. The Montana Air National Guard has met every doggone
    thing they have put up against them, and they have done it
    every time, and they have done it incredibly well. I don't know
    that Senator Feinstein could say the same thing about the Guard
    in Fresno. Just my observation. You can respond if you'd like.
        Mr. Yonkers. Sir, you know, the Air National Guard in
    Montana is quality, so well noted.
        Senator Tester. Yes. Thank you. I appreciate that.
        And as you can tell, that outfit has been a fighter unit
    forever, and I appreciate the C-27Js coming in, but that
    airspace, I talked about that 4.5 million acres, my farm is
    under that. I remember as a 6-year-old watching the F-102s fly
    over. And to take them out away from that airspace, as a dirt
    farmer, I don't think it makes a lot of sense, as a military
    person, I will have to defer. But I still think, when we look
    back on it, I am not sure it is the best thing for the country.
        I just want to talk about electronic medical records just
    for a second. Secretaries Gates and Shinseki have agreed to
    create a joint common platform for the Department's electronic
    medical records, early May deadline to come. I don't know if
    you guys have any say where that repository is going to be, do
    you?
        Mr. Yonkers. You are catching me really cold. No, I don't.
        Senator Tester. Yes, that is okay. That is the best way to
    do it.
        Mr. Yonkers. I don't know. This would be in the bailiwick
    of our surgeon general. And that is about all I can say about
    it.
        Senator Tester. Okay. Well, we have got a base up there
    called Malmstrom Air Force Base that happens to be on the east
    end of Great Falls, the Air Guard is on the west end. And it is
    an incredible piece of property and also another incredible
    asset that has great infrastructure built originally for the
    transport missions. And so if there is any way that you can
    help influence the final decision on where that database might
    go, it would be a nice place to put it.
        Thanks, folks. Appreciate your service to this country.
        Mr. Yonkers. Thank you, Senator.
        Senator Kirk. Senator Tester, by the way, I think Senator
    Durbin and I would be very happy to take those C-27Js off you
    for Springfield. So.
        Senator Tester. If we could keep the F-15s, I would be
    inclined to say go ahead.
        Senator Johnson. Obviously, Senator Tester, the assets you
    speak about obviously belong at Ellsworth Air Force Base.
        Senator Hoeven.
        Senator Hoeven. Thank you, Mr. Chairman. Secretary Yonkers,
    thank you for being here. General Byers, General Etter, and
    General Jackson, thank you for your service. We have the Minot
    Air Force Base and the Grand Forks Air Force Base in North
    Dakota, also the North Dakota Air National Guard, and all do
    just an outstanding job, as do all of you that wear the blue
    suit. We are really proud and really appreciative of what you
    do and all the men and women in our great Air Force. My wife
    grew up in the Air Force. Her family is career Air Force. And I
    tell you, the things that you do, not only here to protect our
    country, but all over the world, is absolutely amazing. So I
    thank you.
        Secretary Yonkers, if I could, I would like to start with
    you. And you know, you may want to hand some of these questions
    off and you probably are best equipped to make that call.
        The Minot Air Force Base is getting an additional squadron
    of B-52s. The 5th bomb wing is expanding with the 23rd bomb
    squadron. And it is going to be composed of the 23rd and 69th
    squadrons. So with the additional aircraft coming in, and as
    you know, the buses are big, it is going to require some
    facilities, some of which are in the 2011.
        Now, we are hoping with the vote today we will get you
    under way there. I know you're anxious to get going, and we
    need to get you going. But with some runway issues, control
    tower. But then in the fiscal year 2012, there are both some
    facilities as far as aircraft maintenance facilities, munitions
    maintenance facilities, and then dormitories. That is a
    community that is growing significantly, it is now up more than
    40,000. And so your young, outstanding airmen are coming in and
    not having a place to live right away, so the dormitories issue
    is very important, too.
        Could you comment on the MILCON there for that? Actually,
    it is not a mission conversion, it is mission growth. And if
    you would comment on that, I would appreciate it.
        Mr. Yonkers. Thank you, Senator. I would be happy to.
        We have got a number of what we call inadequate dormitories
    spread across our Air Force. And our goal right now is to make
    those whole by the year 2017.
        And General Byers can get into this in greater detail, but
    we have a dormitory master plan, and we are on track with the
    funding that we have spread out across the Future Years Defense
    Program, along with the dollars that we have in the
    construction program this year, to get to that point, both here
    and overseas as well.
        As you have adequately and eloquently stated, our airmen
    really are the basis of our Air Force. And we are trying to do
    everything we possibly can to improve their quality of life and
    whether they are deployed or here in the States, and also for
    their families.
        As far as some of the other MILCON is concerned, I know one
    of the things that is probably on your mind is the improvement
    of the runway. I think there is a $2 million MILCON project
    slated, and again, General Byers can correct me, this year to
    expand the taxiway as a temporary runway with O&M dollars being
    invested in the next 2-3 years to repair and make that a full-
    up runway ready to do business for those B-52s.
        Senator Hoeven. That is right on, Mr. Secretary, and it is
    very important. It is, both your MILCON budget and then your
    O&M budget, as it is set up right now, is very important for
    the ability of our airmen and aircraft to deliver those
    missions. And so, the way you have it slotted right now between
    MILCON and O&M is good, and it is very important that you stick
    to it.
        And so your comments there? At this point, it is looking
    like you are on track and you are going to be able to stay on
    track, correct?
        Mr. Yonkers. Unless something extraordinary happens, sir,
    yes.
        Senator Hoeven. Okay. Well, it is a good plan, and I
    commend you for it. And I want to work hard to help you achieve
    it on behalf of our airmen and the mission.
        Switching gears, Grand Forks Air Force Base is actually
    converting now to the Global Hawk mission. Again, that is going
    to be important. Again, your plans look good and we want to
    make sure that we are doing everything we can to help support
    you in that endeavor, and I hope you will let me know, but also
    there are fuel lines at that facility. And there is tremendous
    facilities there, but they need to be maintained. And so I
    would ask that you look at your O&M account, and with our cold
    weather and all, make sure that you are maintaining those
    underground fuel lines, both for the unmanned mission or the
    remotely piloted aircraft mission, but also potentially for the
    future tanker mission now that tanker mission is going forth.
        That is a tremendous asset and a tremendous facility and I
    would ask that you check and get back to me that you are,
    through your O&M account, maintaining those fuel lines, for
    both now and for the future.
        Mr. Yonkers. Well, I would remark that I agree 100 percent.
    Not only are fuel lines required for mission essential
    requirements, but if we don't take good care of them, they
    become environmental hazards. And we are finding across our Air
    Force where we have spent millions of dollars not only in the
    fuel that we lost, but in cleaning up the fuel that is in the
    ground and the groundwater. So from my perspective, as far as
    underground infrastructure is concerned, that is one of the
    ones that peaks my interest the most.
        Senator Hoeven. Thank you.
        Mr. Chairman, if I could beg your indulgence for just 1
    minute?
        The other thing at Grand Forks is, we are bringing in a
    tremendous amount of support in the area for remotely piloted
    aircrafts, including University of North Dakota School of
    Aviation and Aerospace. Customs and Border Protection is also
    flying the unmanned aerial vehicles and the remotely piloted
    aircrafts--specifically, it is the Predator in their case. Our
    Guard flies the Predator now, one of the first Guard units to
    fly the Predator, they will also fly the joint cargo aircraft.
    They are flying the Predator right now along with the C-21.
        But all of these things go to--and we are getting a
    tremendous influx now of industry that is involved in
    developing, you know, the whole unmanned aircraft system
    mission. And it is very important that we continue to develop
    that here at home because we have got to maintain your global
    leadership in unmanned aerial systems. You are the leader. I
    think this is incredibly important for the future of the
    country. And so I would ask that you do focus attention on
    Grand Forks Air Force Base and making sure that we have
    whatever we need to continue to make that mission the best
    possible mission.
        We are dovetailing it now with being able to fly unmanned
    aircraft systems here in the United States with concurrent
    airspace, and that is what we're working toward. So we are
    trying to make sure that that is an asset and an opportunity
    for Air Force.
        And so, again, just any thoughts that you might have on how
    we can work on building that mission the right way for the
    future of unmanned aircraft system in this country and for Air
    Force.
        Mr. Yonkers. Well, as you know, Senator, it is a critical
    mission for us, and it is a growing mission. Eventually, we
    will get to 65 combat air patrols. A good lot of that will be
    with the Air National Guard. We have a number of different
    locations that we are yet to be looking at with regards to
    where we will beddown some of these Predators or Reapers or
    even some of the Global Hawks, so it is a work in progress, but
    a good lot of that will end up with the Air National Guard at a
    number of different locations.
        I think it is fair to say that we are engaged strongly, not
    only with Department of Homeland Security's Customs and Border
    Protection in particular, but with the Federal Aviation
    Administration----
        Senator Hoeven. Right.
        Mr. Yonkers [continuing]. On how we are going to
    collectively figure out how to go about recognizing airspace
    for unmanned aerial vehicles or for remotely piloted aircraft.
    Those discussions are yet to be finalized, but we are pushing
    hard on resolving those kinds of issues.
        Senator Hoeven. It is an incredible opportunity, and I
    really am pleased to see that you are very tuned into it. And
    obviously, you are and I thank you for that.
        Senator Johnson. I would like to thank all of our witnesses
    for appearing before this subcommittee today. Thanks for your
    service to our Nation. We 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 22.
        [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
                   Questions Submitted by Senator Tim Johnson
                                  b-1 bombers
        Question. Secretary Yonkers, the Air Force briefed my staff
    yesterday on the Department's plan to consolidate the B-1 fleet.
    Specifically, Ellsworth Air Force Base (Ellsworth AFB) will lose two
    aircraft as part of the consolidation plan.
        What impact will this have on future personnel levels and
    operations at Ellsworth AFB?
        Answer. As a result of Ellsworth AFB, South Dakota losing two B-1s
    as part of the fiscal year 2012 President's budget request, we project
    a fiscal year 2012 manpower reduction of 160 authorizations (12
    officer, 148 enlisted). Local B-1 operations are expected to decrease
    commensurate with the aircraft and manpower reductions.
        Question. It was estimated that this plan would save $357 million
    in the out years. Some of this savings, about $125 million, will be
    used to modernize the remaining B-1 fleet.
        Where will the remaining $231.9 million in savings be invested?
    Does the Air Force have specific programs identified that will be the
    recipient of these savings?
        Answer. The retirement of six B-1s will provide a total savings of
    $61.9 million in fiscal year 2012 and $357.3 million over the Future
    Years Defense Plan. Of these savings, the Air Force is reinvesting
    $32.9 million in fiscal year 2012 and $125.4 million over the Future
    Years Defense Plan, into critical B-1 sustainment and modernization
    programs to ensure the health of the remaining fleet. These programs
    include procurement and installation of vertical situation display
    upgrade and central integrated test system sustainment efforts, fully
    integrated data link capability upgrade, and procurement of critical
    initial spares for these modifications.
        The remaining $231.9 million enabled the Air Force to make
    additional investments in other Air Force and Department of Defense
    (DOD) priorities to include the future long-range penetrating bomber
    and programs that support activities such as continuing to strengthen
    the nuclear enterprise and building partnerships capacity.
                      air force financial services center
        Question. Secretary Yonkers, the Air Force has also decided to
    disperse current military pay operations of the Air Force Financial
    Services Center (AFFSC) out to the installations and eliminate military
    positions in South Dakota. It is my understanding that the Air Force
    consolidated these functions in 2007 as an efficiencies/cost savings
    measure. Now, more than 4 years later, the Air Force is reversing that
    decision claiming that this action will increase efficiency and improve
    customer service. I worry that this gives the Air Force a credibility
    problem.
        Secretary Yonkers, I know this is outside of your expertise, but
    can you tell me how the Air Force hopes to avoid the mistakes of the
    past by redistributing personnel out to the field?
        Answer. Military pay operations was never intended to permanently
    reside at the AFFSC in South Dakota. The manual process was to be
    subsumed by DOD's automated Defense Integrated Military Human Resources
    System (DIMHRS). DIMHRS was supposed to merge a military member's
    personnel record and pay record into one, with the result that a
    personnel transaction would automatically update the associated pay
    information. This would have eliminated the need for finance personnel
    to do a manual pay transaction. However, DIMHRS was canceled and the
    Air Force is now developing its own system, the Air Force Integrated
    Personnel and Pay System (AF-IPPS). AF-IPPS will be designed to
    integrate personnel and pay records. Over the past couple of years
    we've discovered that doing manual military pay transactions at the
    AFFSC slows processing time and decreases levels of customer service by
    adding a middleman.
        Question. How are we going to get efficient by dispersing people
    back out to the field, when it was determined over 4 years ago that
    consolidating into one location was key to reducing personnel cost and
    gaining efficiencies?
        Answer. Since DIMHRS was canceled and we are still doing manual
    military pay transactions, it makes sense to move back to the base
    level until AF-IPPS deployment. Personnel transactions are still done
    at the base level, and often drive a pay transaction. Having both at
    the base level allows for faster resolution of issues, quicker
    processing times by eliminating the middleman (the AFFSC), and face-to-
    face customer service.
                      northern group housing privatization
        Question. In December, the Air Force issued a notice to proceed
    with the long delayed the Northern Group Housing plan, which includes
    Ellsworth.
        What is the status of this plan?
        Answer. The Northern Group Housing Privatization Project (Minot Air
    Force Base, North Dakota; Grand Forks Air Force Base, North Dakota;
    Cavalier Air Force Station, North Dakota; Ellsworth Air Force Base,
    South Dakota; Mountain Home Air Force Base, Idaho; and Cannon Air Force
    Base, New Mexico) remains on track for a project closing in January
    2012. Proposals were received on April 5, 2011. Oral presentations from
    the offerors were presented on May 2-6, 2011. The selection of the
    highest ranked offeror is scheduled for July 2011 and following
    congressional notification of this selection the Air Force will enter
    into a period of exclusive negotiations with the highest ranked
    offeror.
                                     ______

                  Questions Submitted by Senator Mark L. Pryor
                     little rock mission and restructuring
        Question. An important Air Force installation in my State is the
    Little Rock Air Force Base (LRAFB). The base is the home of the C-130
    center of excellence. The C-130 mission at the base is undergoing some
    restructuring with the Reserve training unit coming under the Guard
    unit.
        The restructuring of the C-130 training unit involves a Reserve
    unit coming under the command of a Guard wing and this is taking place
    on an Active Duty base.
        Can you give me your impression regarding how this mission and the
    restructuring are going at LRAFB?
        Answer. The transition of legacy C-130 training from the Active
    component to the Reserve component is in progress and on schedule; but,
    we face some manpower and aircraft availability challenges. This is the
    first time a C-130 Air National Guard unit has associated with an Air
    Force Reserve unit. The Air Staff, Air Force Reserve Command, Air
    National Guard, and Air Education and Training Command will continue to
    work through these and other issues as they arise to ensure mission
    success of this training partnership.
        Question. An important Air Force installation in my State is the
    LRAFB. The base is the home of the C-130 center of excellence. The C-
    130 mission at the base is undergoing some restructuring with the
    Reserve training unit coming under the Guard unit.
        Can you describe the unique role that LRAFB plays in training our
    C-130 pilots and navigators?
        Answer. As you have stated, LRAFB, Arkansas hosts the C-130 center
    of excellence and provides C-130 qualification training required for
    the Air Force, Navy, Marines Corp, Coast Guard, and our international
    partners. This includes all variants of the C-130 and all crew
    positions (pilots, navigators, flight engineers, and loadmasters).
        Question.  An important Air Force installation in my State is the
    LRAFB. The base is the home of the C-130 center of excellence. The C-
    130 mission at the base is undergoing some restructuring with the
    Reserve training unit coming under the Guard unit.
        I think it is important that all of our C-130 pilots receive the
    same high-quality training. It's my understanding that no one does C-
    130 training better than the LRAFB. I mention this because I want to
    focus on efficiency both for the Air Force and for the C-130 students.
    LRAFB has all of the facilities (academics, simulators, and aircraft)
    in one location without any disruption to the flow of training.
        Do you all agree that C-130 training should be conducted by our
    military experts at the C-130 center of excellence?
        Answer. The Air Force performs a variety of C-130 training at
    multiple locations, but LRAFB, Arkansas is currently our primary C-130
    qualification training location and the majority of C-130 training will
    occur at LRAFB for the foreseeable future.
                                     ______

                    Question Submitted by Senator Jon Tester
               housing privatization at malmstrom air force base
        Question. On January 12 of this year, I received a letter from the
    Air Force announcing their intent to award a combined housing
    privatization project to the Western Group bases, to include Beale Air
    Force Base, California; F.E. Warren Air Force Base, Wyoming; Whiteman
    Air Force Base, Missouri; and Malmstrom Air Force Base, Montana. In
    February, Balfour Beatty Communities, LLC, was awarded that contract,
    estimated at $330 million in development costs, slated to provide new
    and renovated housing for a total of 3,264 military families at the
    four bases combined. According to the DOD, this process represents a
    significant cost-savings to the Government. I applaud these measures.
        There are real concerns though as to how this private firm will
    utilize local subcontractors through a fair and competitive bidding
    process. Many of our small local military communities, like Great
    Falls, have greatly benefited in the past with MILCON projects. The
    rapport our small businesses have established within these military
    communities has provided top-notch workmanship on military bases
    through a fair and proven contract-bidding method.
        Many of the details with this privatized process are not yet
    transparent.
        Will contract bidding continue as it has in the past or will
    Balfour Beatty bring many of the subcontractors with them, thus hurting
    the local businesses and in turn the local economy? Please elaborate on
    the details?
        Answer. The Air Force encourages offerors to promote small business
    participation on their project teams. Companies that have been selected
    to enter into exclusive negotiations with the Air Force for housing
    privatization projects usually host industry forums at the bases to
    educate small businesses about project details and hire local
    companies. This is an efficient and cost-effective way for project
    owners to utilize local small businesses on their project teams. In our
    previous privatization efforts the majority of the work has been done
    by local businesses.
        Subsequent to the January notification you received, a protest of
    the Air Force's selection of Balfour Beatty Communities, LLC as the
    highest rated offeror (HRO) for the Western Group housing privatization
    project was filed with the Government Accountability Office. As a
    result of that protest the Air Force is currently taking corrective
    action to include re-evaluating proposals and making a new selection of
    the HRO for the Western Group project. When an HRO is selected we will
    encourage them to conduct industry forums and use small businesses,
    particularly in the Great Falls area.
                                     ______

                  Question Submitted to General Timothy Byers
                   Question Submitted by Senator Tim Johnson
                                  mq-9 beddown
        Question. General Byers, what is the status of the MQ-9 beddown at
    Ellsworth Air Force Base?
        Answer. The beddown is on track. The environmental impact analysis
    process concluded in June 2010 with a categorical exclusion. The first
    ground control station will arrive in March 2012. The first combat air
    patrol to be controlled from Ellsworth Air Force Base, South Dakota is
    scheduled for May 1, 2012.
                                     ______

                  Question Submitted to General William Etter
                   Question Submitted by Senator Tim Johnson
                           lack of earmarks/plus-ups
        Question. General Etter and General Jackson, I will ask you the
    same question I asked the Army Guard and Reserve about earmarks.
        With the increased dependence on the Air National Guard (ANG) for
    mission support, and the backlog of military construction (MILCON)
    requirements for ANG facilities, can the ANG realistically meet its
    urgent MILCON requirements without help from the Congress through
    earmarks? What impact will the current ban on earmarks have on the ANG
    MILCON program?
        Answer. ANG MILCON projects in the fiscal year 2012 President's
    budget request competed along with all other Air Force and Air Force
    Reserve command projects in the Air Force's corporate process, and they
    were judged among the Air Force's highest MILCON priorities based on
    contributions to satisfying mission requirements at the appropriate
    timing/schedule.
        The ANG enjoyed generous additional MILCON funding from the
    Congress in years past and appreciates the support to help satisfy ANG
    and State mission requirements. The majority of former ANG
    congressional add projects funded recapitalization of existing
    facilities; without this funding stream, the ANG will need to carefully
    manage available assets and apportion the sustainment, restoration, and
    modernization, and unspecified minor MILCON funds available to support
    existing facilities as long as possible.
        The Congress has pledged to curtail earmarks and the associated
    acceleration of future MILCON requirements. In an environment of fiscal
    austerity, the ANG will continue to assess mission requirements and
    MILCON projects needed to satisfy the requirements, and advocate in the
    Air Force corporate process alongside all other Air Force missions, to
    achieve funding for the highest priority requirements across the
    Active, Guard, and Reserve mission sets.
                                     ______

                  Question Submitted to General James Jackson
                   Question Submitted by Senator Tim Johnson
                           lack of earmarks/plus-ups
        Question. General Etter and General Jackson, I will ask you the
    same question I asked the Army Guard and Reserve about earmarks.
        General Jackson, what impact will the earmark ban have on the Air
    Force Reserve's ability to meet its military construction (MILCON)
    requirements?
        Answer. The Air Force Reserve participates in the enterprise-wide
    integrated Air Force MILCON process. The Air Force works hard to ensure
    the Air Reserve components receive their fair share of funding during
    the Air Force corporate review process, and is treated as a full
    partner.
        The Air Force Reserve's plant replacement value is equal to 4
    percent of the total plant replacement value for all three components
    of the Air Force. In fiscal year 2012 the Air Force Reserve received 4
    percent of the MILCON funds available. However, with a backlog of more
    than $125 billion in validated MILCON projects, the Air Force Reserve
    cannot meet the Department of Defense benchmark infrastructure
    guidelines.

                             CONCLUSION OF HEARINGS

        Senator Johnson. This hearing is concluded.
        [Whereupon, at 3:48 p.m., Thursday, April 14, the
    subcommittee was recessed, to reconvene subject to the call of
    the Chair.]

           LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                                  ----------
                                                                       Page

    Baker, Hon. Roger, Assistant Secretary for Information
      Technology, Department of Veterans Affairs.....................     1
    Blunt, Senator Roy, U.S. Senator From Missouri:
        Prepared Statement of........................................   130
        Question Submitted by........................................   164
    Boone, Rear Admiral David M., Director, Shore Readiness Division,
      Office of the Chief of Naval Operations, and Vice Commander
      (Navy Installations Command), Department of the Navy,
      Department of Defense..........................................   101
    Boozer, Major General James C., Director of Operations, Office of
      the Assistant Chief of Staff (Army Installation Management),
      Department of the Army, Department of Defense..................   129
        Questions Submitted to.......................................   164
        Statement of.................................................   144
    Byers, Major General Timothy A., Civil Engineer, Department of
      the Air Force, Department of Defense...........................   169
        Question Submitted to........................................   188

    Carpenter, Major General Raymond W., Acting Director, Army
      National Guard, Department of the Army, Department of Defense..   129
        Questions Submitted to.......................................   165
        Statement of.................................................   145

    Etter, Major General William H., Deputy Director, Air National
      Guard, Department of the Air Force, Department of Defense......   169
        Question Submitted to........................................   188

    Grams, Todd, Acting Assistant Secretary for Management
      Technology, Department of Veterans Affairs.....................     1

    Hale, Hon. Robert F., Under Secretary of Defense (Comptroller),
      Office of the Secretary of Defense, Department of Defense......    65
        Prepared Statement of........................................    70
        Questions Submitted to.......................................   126
        Summary Statement of.........................................    67
    Hammack, Hon. Katherine, Assistant Secretary of the Army
      (Installation, Environment and Energy), Department of the Army,
      Department of Defense..........................................   129
        Prepared Statement of........................................   137
        Questions Submitted to.......................................   160
        Summary Statement of.........................................   136
    Hutchison, Senator Kay Bailey, U.S. Senator From Texas, Questions
      Submitted by.................................................163, 165

    Inouye, Senator Daniel K., U.S. Senator From Hawaii, Statement of     1

    Jackson, Major General James F., Deputy Chief, U.S. Air Force
      Reserve, Department of the Air Force, Department of Defense....   169
        Question Submitted to........................................   189
    Johnson, Senator Tim, U.S. Senator From South Dakota:
        Opening Statements of....................................1, 65, 129
        Questions Submitted by...41, 127, 160, 164, 165, 166, 186, 188, 189

    Kirk, Senator Mark, U.S. Senator From Illinois:
        Questions Submitted by.......................................    47
        Statements of............................................3, 66, 135

    Landrieu, Senator Mary L., U.S. Senator From Louisiana, Questions
      Submitted by..................................................43, 161

    McConnell, Senator Mitch, U.S. Senator From Kentucky, Questions
      Submitted by..................................................52, 163
    Muro, Steve, Acting Under Secretary for Memorial Affairs,
      Department of Veterans Affairs.................................     1

    Nelson, Senator Ben, U.S. Senator From Nebraska, Questions
      Submitted by..................................................43, 126

    Petzel, Hon. Robert M.D., Under Secretary for Health, Department
      of Veterans Affairs............................................     1
    Pfannenstiel, Hon. Jackalyne, Assistant Secretary of the Navy
      (Energy, Installations and Environment), Department of the
      Navy, Department of Defense....................................   101
        Prepared Statement of........................................   103
    Pryor, Senator Mark, U.S. Senator From Arkansas, Questions
      Submitted by.............................................44, 166, 187

    Reed Senator Jack, U.S. Senator From Rhode Island, Questions
      Submitted by...................................................   127
    Robyn, Dr. Dorothy, Deputy Under Secretary for Installation and
      Environment, Office of the Secretary of Defense, Department of
      Defense........................................................    65
        Prepared Statement of........................................    75
        Questions Submitted to.......................................   127
        Summary Statement of.........................................    72
    Ruark, Major General Robert R., Assistant Deputy Commandant
      (Installations and Logistics, Facilities), Department of the
      Navy, Department of Defense....................................   101

    Shinseki, Hon. Eric K., Secretary, Department of Veterans Affairs     1
        Memorandum, November 21, 2006 (From William F. Feeley, Deputy
          Under Secretary for Health for Operations and Management,
          Veterans Health Administration, Department of Veterans
          Affairs)...................................................    59
        Prepared Statement of........................................     6
        Summary Statement of.........................................     4
    Snyder, James L., Assistant Chief, Army Reserve, Department of
      the Army, Department of Defense................................   129
        Questions Submitted to.......................................   166
        Statement of.................................................   146

    Tester, Senator Jon, U.S. Senator From Montana, Question
      Submitted by...................................................   188

    Walcoff, Michael, Acting Under Secretary for Benefits, Department
      of Veterans Affairs............................................     1

    Yonkers, Hon. Terry A., Assistant Secretary of the Air Force
      (Installations, Environment and Logistics), Department of the
      Air Force, Department of Defense...............................   169
        Prepared Statement of........................................   172
        Questions Submitted to.......................................   186
        Summary Statement of.........................................   169

                                 SUBJECT INDEX

                                  ----------

                         DEPARTMENT OF VETERANS AFFAIRS

                                                                       Page

    Access...........................................................     5
    Additional Committee Questions...................................    41
    Advanced Appropriations..........................................    28
    Arlington Cemetery...............................................    27
    Backlog, the.....................................................     5
    Black Hills Health Care System...................................    42
    Budget Requirements..............................................    30
    Capital Infrastructure...........................................    14
    Carryover........................................................    18
    Cemeteries.......................................................    24
    Claims:
        Adjudication.................................................    36
        Backlog......................................................20, 60
            Reducing the.............................................    10
        Processing...................................................17, 47
    Construction.....................................................22, 24
    Contingency:
        Fund.........................................................    43
        Funds........................................................    16
    Department of Veterans Affairs (VA):
        Hospital at Eastern Kentucky.................................    58
        Transforming the.............................................     9
    Employment Assistance............................................    57
    Equipment Sterilization..........................................    26
    Expanding Access to Benefits and Services........................     9
    Fort Knox Ireland Community-Based Outpatient Clinic (CBOC).......    63
    General Administration...........................................    20
    Healthcare Referral..............................................    31
    Homelessness..................................................5, 46, 52
    Information Technology (IT)......................................    15
    Interoperability.................................................    35
    Kentucky Community-Based Outpatient Centers (CBOCs)..............    52
    Medical:
        Care Program.................................................    12
        Certification and Employment.................................    43
        Research.....................................................    12
    Medicare Rates...................................................    42
    Mental Health....................................................    11
    Mileage Reimbursement............................................    25
    Multi-Year Plan for Medical Care Budget..........................     8
    National Cemetery Administration (NCA)...........................    13
    Native Americans.................................................    33
    North Chicago....................................................    48
    Outreach for Kentucky Medical Facility...........................    56
    Polytrauma Centers...............................................    51
    Post-Traumatic Stress Disorder (PTSD)/Traumatic Brain Injury
      (TBI)/Mental Health............................................    61
    Prescriptions....................................................    58
    Research.........................................................    46
    Rural:
        Access.......................................................    62
        Veterans.....................................................    38
    Savings..........................................................    44
    Staff Offices....................................................    50
    Stewardship of Resources.........................................     7
    Strategic Capital Investment Plan (SCIP) (10-Year Plan)..........    41
    Unemployment.....................................................18, 25
        Rate (Milliman Model)........................................    47
    Veteran:
        Benefits.....................................................    13
        Homelessness, Eliminating....................................    11
    Veterans Benefits Management System (VBMS).......................    41
    Virtual Lifetime Electronic Record (VLER)........................    15
    Women Veterans:
        Appointments.................................................    56
        Medical Care.................................................    55

                             DEPARTMENT OF DEFENSE

                          Department of the Air Force

    Acquisition Excellence, Recapture................................   174
    Additional Committee Questions...................................   186
    Air Force Financial Services Center..............................   186
    Airmen and Their Families, Develop and Care for..................   173
    B-1 Bombers......................................................   186
    Housing Privatization at Malmstrom Air Force Base................   188
    Lack of Earmarks/Plus-Ups:
        National Guard...............................................   188
        Reserve......................................................   189
    Little Rock Mission and Restructuring............................   187
    Modernize Our Air, Space, and Cyberspace Inventories,
      Organizations, and Training....................................   174
    MQ-9 Beddown.....................................................   188
    Northern Group Housing Privatization.............................   187
    Nuclear Enterprise, Continue To Strengthen the...................   172
    Partner With the Joint and Coalition Team To Win Today's Fight...   173
    Programs of Note, Other..........................................   175

                             Department of the Army

    Additional Committee Questions...................................   159
    Appropriations Bill..............................................   159
    Army:
        Efficiencies                                                    161
        National Guard:
            Budget...................................................   146
            Continuing Resolution, Effects of the....................   146
            Force Reduction..........................................   160
            Missouri--Long Range Construction Plan 2010..............   134
            Readiness Centers......................................149, 156
        Reserve......................................................   146
            Fiscal Year 2012 Budget..................................   147
            Military Construction (MILCON) Priorities................   147
            Operational Force........................................   147
        Strong Community Center (ASCC)...............................   166
    Arsenals.......................................................152, 153
    Barracks Facilities in Grafenwoehr...............................   165
    Base:
        Operations Support...........................................   144
        Realignment and Closure (BRAC).............................142, 144
    Bid Savings......................................................   137
    Blue Grass Army Depot (BGAD), the................................   163
    Brigade Combat Team (BCT):
        Announcement.................................................   164
        Complex at Fort Bliss........................................   165
        Heavy........................................................   163
    Continuing Resolution:
        Effects of the...............................................   146
        Impacts of the...............................................   138
    End Strength.....................................................   148
    Energy...........................................................   143
        Efficiencies.................................................   151
        Investments..................................................   143
    Environment......................................................   143
    European Basing/Stationing...........................145, 149, 152, 154
    Force Reduction................................................148, 160
    Fort:
        Bliss, Complex at............................................   165
        Leonard Wood--Project Priority Listing: Combined (Fiscal
          Years 2013-2017 and Beyond)................................   130
        Polk, Land Acquisition Efforts at..........................161, 164
        Wainwright, Alaska...........................................   157
    Grow the Army....................................................   149
    Installation Management Command's Management of Arsenals.........   153
    Korea Tour Normalization.........................................   151
    Lack of Earmarks/Plus-Ups:
        National Guard...............................................   165
        Reserve......................................................   166
    Land Acquisition Efforts at Fort Polk..........................161, 164
    Military Construction (MILCON) Budget for Fiscal Year 2012.......   150
        Request......................................................   139
    Missouri National Guard--Long Range Construction Plan 2010.......   134
    Readiness Centers................................................   149
    Sustainment, Restoration and Modernization (SRM).................   143
    Transportation Improvements/Base Realignment and Closure (BRAC)
      Medical Facilities.............................................   160
    Whiteman Air Force Base--Priority List and Current Missions......   132

                             Department of the Navy

    Additional Committee Questions...................................   126
    Anti-Ballistic Missile Treaty....................................   125
    Bahrain Authorized Departure of Dependants Update................   122
    Base Realignment and Closure (BRAC):
        Cleanup and Property Disposal, Prior.........................   119
        Summary......................................................   121
        2005 Implementation..........................................   116
    Electronic Medical Records.......................................   127
    Energy...........................................................   106
    Environment......................................................   110
    Facilities Management............................................   105
    Guam Range ID and Acquisition....................................   123
    Housing..........................................................   109
    Military Construction (MILCON)...................................   103
    Navy's Investment in Facilities, the.............................   103
    Relocating the Marines to Guam...................................   114

                       Office of the Secretary of Defense

    Base:
        Budget Request...............................................    70
        Realignment and Closure (BRAC)...............................    73
    Fiscal Year 2011 Continuing Resolution--A Crisis at Our Doorstep.    72
    Global Picture: International and Domestic Basing, the...........    75
    Government Shutdown..............................................87, 93
    Guam.............................................................    88
    Guard and Reserve................................................    97
    Installation Energy..............................................    74
    Key Facilities Energy and Water Goals............................    86
    Korea Tour Norm..................................................    90
    Libya............................................................    89
    Managing Our:
        Built Environment............................................    77
        Energy Use...................................................    79
    Military Construction (MILCON)...................................    73
        And Family Housing...........................................    71
    Natural Environment, Protecting the..............................    82
    New Starts.......................................................    95
    Overseas Contingency Operations, Request for.....................    71
    Trends and Specific Issues.......................................    71