[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



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