[Senate Hearing 112-80, Part 3]
[From the U.S. Government Publishing Office]




                                                  S. Hrg. 112-80, Pt. 3
 
DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
               2012 AND THE FUTURE YEARS DEFENSE PROGRAM

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

                                HEARINGS

                               before the

                      COMMITTEE ON ARMED SERVICES
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                                   ON

                                S. 1253

     TO AUTHORIZE APPROPRIATIONS FOR FISCAL YEAR 2012 FOR MILITARY 
ACTIVITIES OF THE DEPARTMENT OF DEFENSE AND FOR MILITARY CONSTRUCTION, 
TO PRESCRIBE MILITARY PERSONNEL STRENGTHS FOR FISCAL YEAR 2012, AND FOR 
                             OTHER PURPOSES

                               ----------                              

                                 PART 3

                    READINESS AND MANAGEMENT SUPPORT

                               ----------                              

                       MARCH 17 AND MAY 18, 2011


         Printed for the use of the Committee on Armed Services
DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
   2012 AND THE FUTURE YEARS DEFENSE PROGRAM--Part 3  READINESS AND 
                           MANAGEMENT SUPPORT




                                                   S. Hrg. 112-80 Pt. 3

DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
               2012 AND THE FUTURE YEARS DEFENSE PROGRAM

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

                                HEARINGS

                               before the

                      COMMITTEE ON ARMED SERVICES
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                                   ON

                                S. 1253

     TO AUTHORIZE APPROPRIATIONS FOR FISCAL YEAR 2012 FOR MILITARY 
ACTIVITIES OF THE DEPARTMENT OF DEFENSE AND FOR MILITARY CONSTRUCTION, 
TO PRESCRIBE MILITARY PERSONNEL STRENGTHS FOR FISCAL YEAR 2012, AND FOR 
                             OTHER PURPOSES

                               __________

                                 PART 3

                    READINESS AND MANAGEMENT SUPPORT

                               __________

                       MARCH 17 AND MAY 18, 2011

                               __________

         Printed for the use of the Committee on Armed Services


        Available via the World Wide Web: http://www.fdsys.gov/



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                      COMMITTEE ON ARMED SERVICES

                     CARL LEVIN, Michigan, Chairman

JOSEPH I. LIEBERMAN, Connecticut     JOHN McCAIN, Arizona
JACK REED, Rhode Island              JAMES M. INHOFE, Oklahoma
DANIEL K. AKAKA, Hawaii              JEFF SESSIONS, Alabama
E. BENJAMIN NELSON, Nebraska         SAXBY CHAMBLISS, Georgia
JIM WEBB, Virginia                   ROGER F. WICKER, Mississippi
CLAIRE McCASKILL, Missouri           SCOTT P. BROWN, Massachusetts
MARK UDALL, Colorado                 ROB PORTMAN, Ohio
KAY R. HAGAN, North Carolina         KELLY AYOTTE, New Hampshire
MARK BEGICH, Alaska                  SUSAN M. COLLINS, Maine
JOE MANCHIN III, West Virginia       LINDSEY GRAHAM, South Carolina
JEANNE SHAHEEN, New Hampshire        JOHN CORNYN, Texas
KIRSTEN E. GILLIBRAND, New York      DAVID VITTER, Louisiana
RICHARD BLUMENTHAL, Connecticut

                   Richard D. DeBobes, Staff Director

               David M. Morriss, Minority Staff Director

                                 ______

            Subcommittee on Readiness and Management Support

                  CLAIRE McCASKILL, Missouri, Chairman

DANIEL K. AKAKA, Hawaii              KELLY AYOTTE, New Hampshire
E. BENJAMIN NELSON, Nebraska         JAMES M. INHOFE, Oklahoma
JIM WEBB, Virginia                   SAXBY CHAMBLISS, Georgia
MARK UDALL, Colorado                 ROB PORTMAN, Ohio
MARK BEGICH, Alaska                  SUSAN M. COLLINS, Maine
JOE MANCHIN III, West Virginia       LINDSEY GRAHAM, South Carolina
JEANNE SHAHEEN, New Hampshire        JOHN CORNYN, Texas

                                  (ii)
?

                            C O N T E N T S

                              ----------                              

                    CHRONOLOGICAL LIST OF WITNESSES
    Military Construction, Environmental, and Base Closure Programs
                             march 17, 2011

                                                                   Page

Robyn, Dr. Dorothy, Deputy Under Secretary of Defense, 
  Installations and Environment..................................     9
Hammack, Hon. Katherine G., Assistant Secretary of the Army, 
  Installations and Environment..................................    23
Pfannenstiel, Hon. Jackalyne, Assistant Secretary of the Navy, 
  Energy, Installations, and Environment.........................    32
Yonkers, Hon. Terry A., Assistant Secretary of the Air Force, 
  Installations, Environment, and Logistics......................    52

             The Current Materiel Readiness of U.S. Forces
                              may 18, 2011

Stevenson, LTG Mitchell H., USA, Deputy Chief of Staff, 
  Logistics, U.S. Army...........................................   133
Panter, Lt. Gen. Frank A., Jr., USMC, Deputy Commandant for 
  Installations and Logistics, U.S. Marine Corps.................   137
Reno, Lt. Gen. Loren M., USAF, Deputy Chief of Staff for 
  Logistics, Installations, and Mission Support, U.S. Air Force..   142
Burke, VADM William R., USN, Deputy Chief of Naval Operations for 
  Fleet Readiness and Logistics (N4), U.S. Navy..................   146

                                 (iii)


DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
               2012 AND THE FUTURE YEARS DEFENSE PROGRAM

                              ----------                              


                        THURSDAY, MARCH 17, 2011

                           U.S. Senate,    
              Subcommittee on Readiness and
                                Management Support,
                               Committee on Armed Services,
                                                    Washington, DC.

    MILITARY CONSTRUCTION, ENVIRONMENTAL, AND BASE CLOSURE PROGRAMS

    The subcommittee met, pursuant to notice, at 2:33 p.m. in 
room SR-232A, Russell Senate Office Building, Senator Claire 
McCaskill (chairman of the subcommittee) presiding.
    Committee members present: Senators McCaskill, Webb, Udall, 
Shaheen, and Ayotte.
    Majority staff members present: Peter K. Levine, general 
counsel; Jason W. Maroney, counsel; and Russell L. Shaffer, 
counsel.
    Minority staff members present: Lucian L. Niemeyer, 
professional staff member; and Diana G. Tabler, professional 
staff member.
    Staff assistants present: Kathleen A. Kulenkampff and Breon 
N. Wells.
    Committee members' assistants present: Ann Premer, 
assistant to Senator Nelson; Gordon Peterson, assistant to 
Senator Webb; Tressa Guenov, assistant to Senator McCaskill; 
Joanne McLaughlin, assistant to Senator Manchin; Clyde Taylor 
IV, assistant to Senator Chambliss; and Brad Bowman, assistant 
to Senator Ayotte.

    OPENING STATEMENT OF SENATOR CLAIRE McCASKILL, CHAIRMAN

    Senator McCaskill. Thank you for being here.
    I'd like to take just a moment to acknowledge a moment of 
history here. There is something happening today that has never 
happened before in the history of the U.S. Senate. What we have 
today is a woman chairman and a woman ranking member on a 
subcommittee in Armed Services, and that has never happened 
before in our country.
    So, with that, I want to welcome Senator Ayotte to the 
Senate Armed Services Committee, and this subcommittee in 
particular. She and I are taking on this responsibility with 
enthusiasm. I'm honored to have the opportunity to do whatever 
I can to support the military.
    I will give a very brief opening statement and then turn it 
over to Senator Ayotte for her opening statement. Then we'll 
look forward to your testimony today.
    The Subcommittee on Readiness and Management Support meets 
this afternoon to hear testimony on fiscal year 2012 budget 
request for Department of Defense (DOD) Installations and 
Environment. At today's hearing, we will hear from our 
witnesses on the request for military construction (MILCON) and 
environmental programs for fiscal year 2012.
    This is our first subcommittee hearing in the 112th 
Congress, and I want to welcome all of the members of the 
subcommittee and say how much I look forward to working with 
everyone this year.
    I'd also like to thank our witnesses for rearranging their 
schedules to appear today on such short notice. It is very 
important for us to have this hearing as early in the 
congressional budget process as possible so we can have a full 
and frank discussion of the President's request that informs 
this year's Defense authorization bill, and we appreciate your 
help in enabling us to do that.
    The subcommittee has scheduled a hearing on the Secretary's 
efficiencies initiatives for later this month. As far as I'm 
concerned, however, every hearing that we hold will be about 
efficiencies.
    Earlier this week, the Congressional Budget Office reported 
that the DOD budget has grown by 75 percent over the last 
decade. That is the base budget, not including the cost of 
overseas contingency operations. I do not believe there is 
anything DOD is doing that they cannot do better. I do not 
believe that there is any part of the budget that can be off 
limits as we look for potential savings. I will be looking at 
every area of this subcommittee's jurisdiction as we attempt to 
cut duplicative projects and programs, increase management 
efficiencies, and reduce waste while we stay very focused on 
maintaining the finest military in the world.
    Overall, the President's budget request for MILCON and 
family housing is $14.7 billion in fiscal year 2012, as 
compared to a $19.3 billion authorized in last year's National 
Defense Authorization Act (NDAA). That sounds like a huge drop, 
and it is. However, it is worth noting that more than half of 
the decrease is attributable to a drop in requests for Base 
Realignment and Closure (BRAC) construction as we near the 
completion of the 2005 BRAC recommendations, and a drop of $1.2 
billion in requests for MILCON in the budget for overseas 
contingencies operations.
    This budget arrives at a time when DOD has embarked on a 
number of large force posture adjustments that should have 
significant impacts on our MILCON programs, such as the 
realignment of the U.S. forces on Okinawa and Guam, and the 
2005 BRAC round scheduled to be completed this year.
    Indeed, I'm told that DOD plans to announce another 
significant decision today, the number of brigade combat teams 
(BCT) it expects to retain in Europe. I'm assuming that 
announcement has not been made yet, or has it? Was it made 
today?
    Dr. Robyn. It was delayed.
    Senator McCaskill. It was delayed. Okay. I'm on the edge of 
my seat. I just wanted to make sure I hadn't missed it. 
[Laughter.]
    I'm very curious to see what happens there.
    Force posture decisions like these come with associated 
costs, and those costs are often first apparent in the MILCON 
accounts, as infrastructure and facilities are either prepared 
or closed. Making sure those initial expenditures are the 
result of well thought out and planned decisionmaking should 
result in more effective and efficient results. As chairman, I 
plan to be very aggressive in my oversight to make sure these 
large, costly, force-posture actions are accompanied by 
careful, rigorous planning and analysis. Too often, when we 
look back on failed projects and programs, we see that the 
analysis and decisionmaking on the front end were deficient.
    In this regard, I have concerns about DOD's plan to move 
8,000 marines and their dependents from Okinawa to Guam by the 
agreed-upon date of 2014. Successful execution of this program 
will require the coordination of over $10 billion in 
construction projects on Guam and the construction of a new 
airfield at Camp Schwab in Okinawa. Congress has asked DOD 
repeatedly for a master plan laying out the costs and schedule 
for the various projects necessary to effect this large 
realignment. To date, we have not received such a master plan, 
which makes it difficult to determine when certain projects 
must be funded.
    For instance, the fiscal year 2012 budget again includes a 
request for $181 million for two projects on Guam that Congress 
cut from last year's budget because they were clearly ahead of 
need. The Navy claims that if, for some reason, the Marine 
squadron scheduled to use the utility project at Andersen Air 
Force Base does not arrive as planned, then the Air Force would 
use it. However, the Air Force has its utilities requirements 
for Andersen Air Force Base on Guam planned as a part of the 
planned fiscal year 2013 budget, and states that the Air Force 
would have no need for the Navy's planned project. This is one 
example, but there are others.
    Obviously, we have to talk about what the impact of the 
decision to assist Japan, where clearly they are going to have 
huge needs in their budget for rebuilding their country, 
regaining their manufacturing, and all--everything that's 
associated with that disaster. As we all know, a huge part of 
our decision to move that force to Guam had to do with Japan's 
willingness to foot a large part of the bill. The question is, 
are they still going to be in a position to foot a large part 
of the bill, and what impact does that have on our decision? I 
certainly don't want to spend a lot of money on preparing to 
move this force, knowing that, at the end of the day, all of 
the predicates that we made the decision on are no longer 
valid. I think it's time for a real pause and a look at the 
whole decision to move the marines from Okinawa to Guam.
    There are other areas in which we can, and should, do 
better. For example, the budget request includes funding for a 
new medical center near Ramstein Airbase, Germany, at an 
expected cost of $1.2 billion. That is as much as the entire 
DOD budget for family housing this year, for one single 
hospital. I recognize that the medical facility at Ramstein has 
been the first stop for our wounded warriors returning from 
Iraq and Afghanistan. But, we will be out of Iraq, and maybe 
out of Afghanistan, before this facility is ever built.
    The budget request includes four new fitness centers, with 
a cost of over $100 million, including a single fitness center 
that will cost almost $50 million to build. I understand that 
fitness is a requirement of the job. We will always need 
fitness centers for our military. But, at a time when our 
Nation is facing fiscal cuts, I have trouble seeing how we can 
justify spending $50 million on a single fitness center. I want 
to examine that more fully in the questions that will follow 
our statements.
    The budget also includes funding for working dog facilities 
at $3.5 million and $4.9 million. Those are expensive working 
dog facilities.
    Simply put, the era when cost was no object for DOD 
construction projects must come to an end. Critics of the DOD 
acquisition system have long complained about our tendency to 
build so-called gold-plated weapon systems. What the Secretary 
of Defense has referred to as ``exquisite'' designs.
    Unfortunately, this problem is not limited to weapon 
systems. I believe we have a similar problem in the area of 
MILCON. I'll be asking today's witnesses how they intend to 
address that issue.
    We have a great deal to discuss today. I look forward to 
your testimony and a lively discussion that will follow, not 
only today, but throughout the year.
    I now turn to Senator Ayotte for any opening remarks she 
may have.
    [The prepared statement of Senator McCaskill follows:]

             Prepared Statement by Senator Claire McCaskill

    The Subcommittee on Readiness and Management Support meets this 
afternoon to hear testimony on the fiscal year 2012 budget request for 
Department of Defense (DOD) installations and environment. At today's 
hearing we will hear from our witnesses on the request for military 
construction and environmental programs for fiscal year 2012.
    This is our first subcommittee hearing in the 112th Congress, and I 
would like to begin by welcoming all of our members and say how much I 
look forward to working with you this year. I am particularly pleased 
to welcome Senator Kelly Ayotte as our new ranking member. We have 
already seen Senator Ayotte's sharp focus on readiness and management 
issues in full committee hearings this year, and I look forward to a 
very productive partnership with her as we get to work on these 
important issues.
    I'd also like to thank our witnesses for rearranging their 
schedules to appear 1today on short notice. It is very important for us 
to have this hearing as early in the congressional budget process so we 
can have full and frank discussions of the President's request that 
inform this year's defense authorization bill, and we appreciate your 
help in enabling us to do that.
    The subcommittee has scheduled a hearing on the Secretary's 
efficiencies initiatives for later this month. As far as I am 
concerned, however, every hearing that we hold will be an efficiencies 
hearing. Earlier this week, the Congressional Budget Office reported 
that the DOD budget has grown by 75 percent over the last decade--and 
that is the base budget, not including the cost of overseas contingency 
operations. I do not believe there is anything DOD is doing that we 
cannot do better, and I do not believe that there is any part of the 
budget that can be off limits as we look for savings. I will be looking 
at every area of this subcommittee's jurisdiction as we attempt to cut 
duplicative projects and programs, increase management efficiencies, 
and reduce waste.
    Overall, the President's budget request for military construction 
and family housing is $14.76 billion in fiscal year 2012 as compared to 
$19.3 billion authorized in last year's National Defense Authorization 
bill. That sounds like a huge drop, and it is, but it is worth noting 
that more than half of the decrease is attributable to a drop of $1.3 
billion in requests for the Base Realignment and Closure (BRAC) 
construction, as we near the completion of the 2005 BRAC 
recommendations and a drop of $1.2 billion in requests for military 
construction in the budget for overseas contingency operations.
    This budget arrives at a time when DOD has embarked on a number of 
large force posture adjustments that should have significant impacts on 
our military construction programs, such as the realignment of U.S. 
forces on Okinawa and Guam and the 2005 BRAC round scheduled to be 
completed this year. Indeed, I'm told that the Department plans to 
announce another significant decision today--the number of brigade 
combat teams (BCT) it expects to retain in Europe.
    Force posture decisions like these come with associated costs, and 
those costs are often first apparent in the military construction 
accounts as infrastructure and facilities are either prepared or 
closed. Making sure those initial expenditures are the result of well 
thought out and planned decisionmaking should result in more effective 
and efficient results. As chairman, I plan to be very aggressive in my 
oversight to make sure these large, costly force posture actions are 
accompanied by careful, rigorous analysis. Too often when we look back 
on failed projects and programs we see that the analysis and 
decisionmaking on the front end were deficient.
    In this regard, I have concerns about the Department's plan to move 
8,000 marines and their dependents from Okinawa to Guam by the agreed 
upon date of 2014. Successful execution of this program will require 
the coordination of over $10 billion in construction projects on Guam 
and the construction of a new airfield at Camp Schwab on Okinawa. 
Congress has asked DOD repeatedly for a master plan laying out the 
costs and schedule for the various projects necessary to effect this 
large realignment. To date, we have not received such a master plan 
which makes it difficult to determine when certain projects must be 
funded.
    For instance, the fiscal year 2012 budget again includes a request 
for $181 million for two projects on Guam that Congress cut from last 
year's budget because they were clearly ahead of need. The Navy claims 
that if, for some reason, the Marine squadron scheduled to use the 
utilities project at Andersen Air Force Base does not arrive as planned 
then the Air Force would use it. However, the Air Force has its 
utilities requirements for Andersen Air Force Base on Guam planned as 
part of the planned fiscal year 2013 budget and states that the Air 
Force would have no need for the Navy's planned project.
    There are other areas in which we can and should do better. For 
example:

         The budget request includes funding for a new medical 
        center near Ramstein Air Base, Germany at an expected cost of 
        $1.2 billion. That is as much as the entire DOD budget for 
        family housing this year, for a single hospital. I recognize 
        that the medical facility at Ramstein has been the first stop 
        for wounded warriors returning from Iraq and Afghanistan--but 
        we will be out of Iraq, and may be out of Afghanistan, before 
        this facility is ever built.
         The budget request includes four new fitness centers 
        with a total cost of over $100 million--including a single 
        fitness center that will cost almost $50 million to build. I 
        understand that fitness is a requirement of the job, and we 
        will always need fitness centers for our military. But at a 
        time when our Nation is facing a fiscal crisis, I have trouble 
        seeing how we can justify spending $50 million on a single 
        fitness center.
         The budget also includes funding for working dog 
        facilities at $3.5 and $4.9 million each. You could buy an 
        exceptional house in St. Louis for that much money.

    Simply put, the era when cost was no object for DOD construction 
projects must come to an end. Critics of the DOD acquisition system 
have long complained about our tendency to build so-called ``gold-
plated'' weapon systems--what the Secretary of Defense has referred to 
as ``exquisite'' designs. Unfortunately, this problem is not limited to 
weapon systems. I believe that we have a similar problem in the area of 
military construction, and I will be asking today's witnesses how they 
intend to address the issue.
    We have a great deal to discuss today. I look forward to your 
testimony and a lively discussion that will follow not only today but 
throughout the year.
    I now turn to Senator Ayotte for any opening remarks that she may 
have.

               STATEMENT OF SENATOR KELLY AYOTTE

    Senator Ayotte. Thank you so much, Madam Chairman. It is an 
honor to be able to work on this committee with you. I had not 
appreciated the historic nature of today's hearing, so thank 
you so much for raising that.
    I thank all of you, first of all, for coming to testify 
before us today. This is our first hearing together, and I look 
forward to working with you in the years to come to address the 
critical programs under the oversight of this committee.
    As the wife of an Air National Guardman who has served in 
the Iraq war as an A-10 pilot, I share your concerns and 
commitment to ensure that the resources we provide to our men 
and women in uniform are used wisely and effectively to sustain 
the readiness of our forces, as well as the quality of life of 
our military.
    I want to thank our witnesses for their dedicated public 
service. I know that the issues you deal with are not easy.
    As we consider the overall DOD budget, as well as MILCON, 
environmental, and BRAC funding issues, more specifically, I 
believe the dire fiscal condition of our country must guide our 
efforts. In our current fiscal crisis, as Chairman McCaskill 
also identified, we cannot afford to waste even $1 on a program 
that does not address a valid military need or shortfall. As 
Admiral Mullen has said, the national debt is a threat to our 
national security. In the midst of this fiscal crisis, the 
spending of every department of the Federal Government requires 
scrutiny, including DOD. At the same time, I believe we have a 
sacred obligation to our servicemembers and veterans. As we go 
forward, we must fulfill our moral obligation to our troops 
while reviewing every program to eliminate duplication and 
waste.
    DOD has proposed, for 2012, a budget that includes $14.8 
billion for MILCON, BRAC, and housing programs, as well as 
$10.6 billion for facility sustainment. Many aspects of this 
request for 2012 certainly deserve praise and recognition, 
based on prior history of the work done on this committee. I 
commend DOD's commitment to invest in new K-12 schools run by 
DOD, and a full range of facilities to support our Special 
Operations Forces who've we asked so much of in Afghanistan and 
in Iraq, as well.
    I note that DOD has abandoned a former set of goals for 
facility recapitalization. While some deferrals may be 
necessary in light of the current fiscal crisis, we must 
scrutinize these deferrals to ensure that none of them endanger 
our mission. I look forward to working with DOD to scrutinize 
these deferrals and to reinstate standards, which I think is 
very important that we have standards that will serve as 
benchmarks to assess future funding requests.
    In the midst of the 10th year of war, the Guard and Reserve 
components have shouldered an increasing share of the burden. 
For example, the New Hampshire National Guard is currently 
undergoing its largest deployment since World War II. The Guard 
and Reserve is now a critical component of our operational 
force, not an infrequently used Strategic Reserve, as it was 
historically. Yet, in some important areas, DOD budget levels 
and prioritization have not evolved to reflect this reality. 
For example, I'm concerned about the levels of investment for 
proposed facilities for our Guard and Reserve. We certainly owe 
it to our Guard and Reserve, given the multiple deployments 
that they are now undertaking, to make sure that we review this 
carefully.
    In response in the past, Members of Congress have used 
earmarks to provide the Guard and Reserve the facility funding 
that their operational tempo requires. Utilizing earmarks to 
meet these essential Guard and Reserve needs is not the proper 
way to provide adequate resources for our citizen soldiers. DOD 
cannot continue to rely on Congress to direct additional 
spending for the programs that are actual needs. I ask each of 
you to review your Service's priorities for your Reserve 
components.
    I look forward to hearing from the witnesses their views on 
the conclusion of the 2005 round of BRAC, which has a statutory 
deadline to be completed by September 15 of this year. For the 
local communities that faithfully support our military bases, I 
know how important it is to have certainty regarding schedules 
for BRAC.
    It is also important to control the cost growth in every 
aspect of BRAC. We cannot afford to spend even one dollar more 
than is absolutely necessary to complete the moves directed by 
BRAC.
    As the Honorable Chairman has mentioned, I also look 
forward to discussing the complex issue of the realignment of 
the U.S. Marines on Okinawa and the relocation of 8,000 marines 
and their families to Guam. Again, I think the issues in Japan 
further complicate this decision, and we should not make this 
investment if it is going to be one that we cannot afford and 
we're not going to be able to get the support from the Japanese 
Government, given the current events in Japan.
    In the environmental area, the President's budget request 
for fiscal year 2012 proposes an investment of nearly $4.25 
billion for DOD's environmental program, a level that is 
consistent with funding provided in past years. While DOD 
continues to make steady progress in achieving its cleanup 
goals, which includes having a cleanup remedy in place, or 
completed cleanup, at all Active-Duty military installations by 
2014, I certainly would like our witnesses to address the 
actions of the Environmental Protection Agency (EPA) at Tyndall 
Air Force Base. The EPA is threatening to take enforcement 
action which could impact military training and readiness 
activities there and in the adjoining airspace over the Gulf of 
Mexico. I would like both Dr. Robyn and Mr. Yonkers to address 
the situation with the EPA and overall cleanup at Tyndall.
    Finally, Madam Chairman, I hope we will look into DOD's 
position on the use of Defense funds to support grants and 
other initiatives for nonmilitary requirements. Given our 
Nation's fiscal crisis, I fully support the Secretary of 
Defense's initiatives to spend each Defense dollar wisely and 
only on critical military priorities. Therefore, I believe this 
committee must lead the way in stopping the use of Defense 
funds to support special interests for medical research, local 
roads, and other public infrastructure. While these projects 
may be worthwhile, non-Defense projects should be funded by 
other Federal, State, or local agencies, and should go through 
the proper committees of jurisdiction in the Senate.
    I would like to conclude by thanking you again, Madam 
Chairman. I look forward to serving alongside you on this 
important subcommittee to sustain the readiness of our military 
forces, eliminate wasteful DOD spending, and improve the 
quality of life for our military members and their families.
    Thank you again.
    [The prepared statement of Senator Ayotte follows:]

               Prepared Statement by Senator Kelly Ayotte

    Madam Chairman, I thank you for calling this hearing to review the 
2012 budget request for military installations and environmental 
programs. This is our first hearing together and I look forward to 
working with you in the years to come to address the critical programs 
under the oversight of this committee. As the wife of a member of the 
Air National Guard, who served in the Iraq War as an A-10 pilot, I 
share your concerns and commitment to ensure the resources we provide 
our men and women in uniform are used wisely and effectively to sustain 
the readiness of our forces as well as the quality of life for our 
military members and their families.
    I want to thank our witnesses for their dedicated public service as 
you manage the full range of installation, environment and energy 
programs for your respective departments. Many of these programs have 
complex and difficult issues associated with them, and you deserve our 
gratitude and appreciation for your service.
    As we consider the overall Department of Defense (DOD) budget, as 
well as military construction, environmental, and base realignment and 
closure (BRAC) funding issues more specifically, I believe the dire 
fiscal condition of our country must guide our efforts. In our current 
fiscal crisis, we cannot afford to waste even one dollar on a program 
that does not address a valid military need or shortfall. As Admiral 
Mullen has said, the national debt is a threat to our national 
security. In the midst of this fiscal crisis, the spending of every 
department of the Federal Government requires scrutiny--including DOD.
    At the same time, I believe we have a sacred obligation to our 
servicemembers and veterans. We must ensure our warfighters have 
everything they need to succeed in their missions and to keep us safe. 
We must also ensure that servicemembers and veterans and their families 
have access to the support they have earned. We have a moral obligation 
to ensure we take care of those who have taken care of us, not just 
now--but years from now--when the current wars end. As we go forward, 
we must fulfill our moral obligation to our troops while reviewing 
every program to eliminate duplication and waste.
    DOD has proposed a budget for 2012 that includes $14.8 billion for 
military construction, BRAC, and housing programs as well as $10.6 
billion for facility sustainment. Many aspects of this request for 2012 
deserve praise and recognition. I commend the Department's commitment 
to invest in new K through 12 schools run by the Department and a full 
range of facilities to support our Special Operations Forces.
    I note that DOD has abandoned a formal set of goals for facility 
recapitalization. While some deferrals maybe necessary in light of the 
current fiscal crisis, we must scrutinize these deferrals to ensure 
none of them endanger the mission. I look forward to working with the 
Department to scrutinize these deferrals and to reinstate standards 
that will serve as benchmarks to assess future funding requests.
    In the midst of the 10th year of war, the Guard and Reserve 
components have shouldered an increasing share of the burden. For 
example, the New Hampshire National Guard is currently undergoing its 
largest deployment since World War II. The Guard and Reserve is now a 
critical component of the operational force, not an in frequently used 
Strategic Reserve. Yet, in some important areas, DOD budgeting levels 
and prioritization processes have not evolved to reflect this new 
reality. For example, I am very concerned about the levels of 
investment proposed for new facilities for our Guard and Reserve 
components in the 2012 budget. Underfunding of Guard and Reserve 
facilities is a chronic problem based on the processes used by the 
Services to prioritize military construction projects. In response, in 
the past Members of Congress have used earmarks to provide the Guard 
and Reserves the facility funding their new operational tempo requires. 
Utilizing earmarks to meet these essential Guard and Reserve needs is 
not the proper way to provide adequate resources for our citizen 
soldiers. DOD cannot continue to rely on Congress to direct additional 
spending to Guard and Reserve construction programs. I ask each of you 
to review your Service's priorities for your Reserve components.
    I look forward to hearing from the witnesses their views on the 
conclusion of the 2005 round of BRACs, which has a statutory deadline 
to be completed by September 15, 2011. For the local communities that 
faithfully support our military bases, I know how important it is to 
have certainty regarding schedules for base closures and realignments. 
It is also important to control cost growth in every aspect of BRAC. We 
cannot afford to spend even $1 more than is absolutely necessary to 
complete the moves directed by BRAC.
    I also look forward to discussing the complex issue of the 
realignment of U.S. marines on Okinawa and the relocation of 8,000 
marines and their families to Guam. This issue has been further 
complicated by the catastrophic events in Japan which the recovery will 
affect each and every funding decision by the Government of Japan for 
some time to come. I am extremely concerned that the Department has 
decided to award construction contracts on Guam to support the 
relocation of forces without having any sign of tangible progress by 
the Government of Japan on the relocation of Marine Corps Air Station 
Futenma on Okinawa. This decision represents a potential substantial 
waste of U.S. taxpayer funds. Our warfighters will find no stronger 
advocate, but I will look to all departments of the U.S. Government--
including DOD--to identify and eliminate redundancies and waste.
    In the environmental area, the President's budget request for 
fiscal year 2012 proposes an investment of nearly $4.25 billion for the 
Department's environmental program, a level that is consistent with 
funding provided in past years. While the Department continues to make 
steady progress in achieving its clean up goals, which includes having 
a cleanup remedy in place or a completed clean up at all Active-Duty 
military installations by 2014, I would like our witnesses to address 
the actions of the Environmental Protection Agency (EPA) at Tyndall Air 
Force Base. The EPA is threatening to take enforcement action which 
could impact military training and readiness activities there and in 
the adjoining airspace over the Gulf of Mexico. I would like both Dr. 
Robyn and Mr. Yonkers to address the situation with EPA over cleanup at 
Tyndall.
    Finally, Madam Chairman, I hope we will look into the Department's 
position on the use of defense funds to support grants and other 
initiatives for non-military requirements. Given our Nation's fiscal 
crisis, I fully support the Secretary ofDefense's initiatives to spend 
each defense dollar wisely and only on critical military priorities. 
Therefore, I believe this committee must lead the way in stopping the 
use of defense funds to support special interests for medical research, 
local roads, and other public infrastructure. While these projects may 
be worthwhile, non-defense projects should be funded by other Federal, 
State, or local agencies.
    I would like to conclude by thanking you again, Madam Chairman. I 
look forward to serving alongside you on this important subcommittee to 
sustain the readiness of our military forces, eliminate wasteful DOD 
spending, and improve the quality of life for our military members and 
their families.
    Thank you, Madam Chairman.

    Senator McCaskill. We have just had two votes called on the 
Senate floor.
    So, why don't we begin, Dr. Robyn, with you. Approximately 
how long is your testimony?
    Dr. Robyn. Just a few minutes.
    Senator McCaskill. Okay.
    Dr. Robyn. Just a couple of minutes.
    Senator McCaskill. Why don't we do your testimony and then 
the three of us will go vote.
    Dr. Robyn. Okay.
    Senator McCaskill. By then we'll be at the end of the first 
vote and near the beginning of the second vote and we can be 
more efficient--since this is about efficiencies----[Laughter.]
    --we'll be more efficient, in terms of getting over there 
and getting back, and not keep all of you waiting any longer 
than absolutely necessary.
    Dr. Robyn. Terrific.
    Senator McCaskill. Thank you, Dr. Robyn.
    Dr. Robyn. Thank you.

   STATEMENT OF DR. DOROTHY ROBYN, DEPUTY UNDER SECRETARY OF 
             DEFENSE, INSTALLATIONS AND ENVIRONMENT

    Dr. Robyn. Madam Chairman, Senator Ayotte and Senator 
Udall, thank you for the opportunity to testify on the 
President's fiscal year 2012 budget request.
    I will submit my written statement for the record, and it 
includes details on the numbers that you all have been citing--
$14.8 billion for MILCON, family housing, and BRAC, $17.9 
billion for sustaining, restoring, and upgrading the condition 
of our existing facilities, and $4.3 billion for environmental 
programs. The $14.8 billion for MILCON, as you said, Madam 
Chairman, is down about $4 billion from last year, largely due 
to the fact that we're completing BRAC. Conversely, a request 
for sustainment and recapitalization is up by about the same 
amount, primarily reflecting efforts by the Army and the Air 
Force to upgrade their existing facilities. Finally, the 
environmental program is fairly level, reflecting maturity and 
stability of our efforts in this area.
    My service colleagues will detail parts of the budget--of 
the request within their individual budgets. I want to use my 
time to highlight two key priorities, both of which I think 
drive your major interest in efficiency.
    The first is energy. Energy is important to DOD for two 
reasons. The first is mission assurance. Our installations 
support combat operations more directly than ever before. From 
domestic bases, we pilot unmanned aerial vehicles, perform 
intelligence analysis, and even deploy long-range bombers. 
These bases rely, in turn, on a fragile and vulnerable 
commercial electricity grid.
    The second reason energy is important to DOD is cost. We 
have 300,000 buildings, 2.2 billion square feet of space. 
That's three times as much as Walmart, 10 times as much as 
General Services Administartion. We have an energy bill that 
matches that: $4 billion a year. That's fully a quarter of 
DOD's total energy bill.
    With an eye toward lowering those energy bills and 
improving the energy security of our installations, we've 
adopted a multifaceted strategy. We're using our MILCON and 
sustainment budgets to drive the effort to make our buildings 
more energy efficient. We're installing renewable and 
alternative sources of energy on our installations, primarily 
using third-party financing. We're taking steps to make our 
installations more secure, in the event of a major disruption 
to the electric grid, such as what is happening now in Japan. I 
should say that renewable energy is helpful in this regard.
    These efforts to green DOD 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. They're 
smart investments for DOD, and they will pay for themselves 
many times over.
    The second theme I want to hit is technology. One of the 
great opportunities we have to improve our performance and 
lower cost is to leverage technology. This has been DOD's great 
advantage when it comes to combat operations, and the same is 
true when it comes to running installations.
    Let me just give you one example from the environmental 
area. We have a major program to clean up unexploded ordnance 
(UXO). The estimated bill is $17 billion. The cost is high 
because current cleanup methods can't distinguish between UXO 
and harmless scrap metal--beer cans, barbed wire, horseshoes. 
As result, contractors have to dig up literally hundreds of 
thousands of items. Each one is remotely exploded in order to 
retrieve just a handful of UXO--pieces of harmful UXO.
    A program that I help oversee has developed technology that 
can reliably distinguish UXO from scrap metal. Over the next 4 
years, we will validate and test this technology. We think it 
can save up to $12 billion in cleanup costs.
    Let me mention just give one other quick example. We are 
using our installations as a testbed for next-generation energy 
technology. This emerging energy technology has the potential 
to produce dramatic savings in our energy bill. But, there are 
huge impediments to the commercialization of this technology. A 
lot has been written about it. It's the nature of the building 
sector.
    It is in our direct self-interest, as the owner of 300,000 
buildings, to help overcome these impediments. We're doing that 
by demonstrating these technologies at our installations, using 
our installations as a virtual testbed. For those technologies 
that prove effective, we'll go on to serve as an early 
customer, creating a market, just as we did with aircraft, with 
electronics and the Internet. We have about 40 projects 
underway, and we expect to have results later this year.
    Let me thank you for the opportunity to testify. I look 
forward to your questions. I look forward to working with you 
on your agenda.
    [The prepared statement of Dr. Robyn follows:]

                Prepared Statement by Dr. Dorothy Robyn

    Chairman McCaskill, Senator Ayotte, 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 military construction, 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.

        I. 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 U.S. forces 
in Japan and the Western Pacific. Third, by making better use of Guam's 
strategic advantages, it will more effectively array U.S. 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 marine relocation to 
Guam. Our request includes another $33 million for projects to address 
the socio-economic impact of the buildup, including a repository for 
the preservation of artifacts unearthed during military construction as 
required by the National Historic Preservation Act (NHPA). 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 military construction program and the subsequent 
realignment will produce. They will also demonstrate our commitment to 
working with the Goverment of Guam, whose support for the relocation is 
key. As one indication, Guam last week signed the ``Programmatic 
Agreement'' required under the NHPA, which paves the way for military 
construction 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 long-standing 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, 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 
``back-end'' 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.

                   II. 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 $4.0 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.
      
    
    
      
Military Construction
    We are requesting $12.5 billion for ``pure'' military 
construction--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 $9.0 
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.
      
    
    
      
    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 $9.0 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.
      
    
    
      
    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.

                      III. 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 $4.0 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
         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 $10 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. 
Fully one-fourth of the $7.4 billion that the Department spent on 
facility sustainment and recapitalization under the American Recovery 
and Reinvestment Act (ARRA) went directly to improve energy efficiency.
    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.
    In short, the Department's Sustainment and Milcon programs are the 
engine of our drive to reduce facility energy use. To be sure, this 
effort to ``green'' our facilities is good for the environment. But it 
is driven above all by our desire to get major cost savings.
    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.
    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 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 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 Walmart 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 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, 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), which excludes 
geothermal. 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 pilot in 2009 with $20 
million in ARRA funds. 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 RDT&E 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--three times the footprint of Walmart and 
ten 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 Walmart, the 
largest private sector energy consumer in the United States, has its 
own test bed. Walmart 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), Walmart deploys 
them in all of its stores. This approach has helped Walmart 
dramatically reduce its energy consumption. But whereas Walmart'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 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 life cycle 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 R&D, largely through the 
Department of Energy (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 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.

                 IV. 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 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 U.S. Fish & 
Wildlife Service (USFWS), 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 USFWS 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 non-recurring 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 U.S. 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 $2.0 billion for fiscal year 2012 to clean up IRP 
and MMRP sites. (This includes both $1.5 billion for ``Environmental 
Restoration'' and $458 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 life cycle 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 to 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+ 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 life cycle 
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 research and 
development 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, timeconsuming, and ad hoc, 
and the resulting delays were costly for industry and for our partners 
elsewhere in governments. Spurred in part by your direction in section 
358 of the NDAA for Fiscal Year 2011, 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 (FAA) and the Department of Interior's Bureau 
of Land Management, focusing on protecting critical military mission 
requirements as we promote energy independence. We are also engaged in 
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 
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, or 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, or 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 non-tactical 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.

    DOD reduced its energy intensity by only 11.2 percent from 2005 to 
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 5.0 percent. By contrast, we met 
the NDAA for Fiscal Year 2007 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 non-tactical 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 
non-tactical 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 to 2010, compared 
to the goal of 6 percent. From 2007 to 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 McCaskill. Thank you, Dr. Robyn. I will--we will go 
vote now, and return. I want to especially apologize for 
mispronouncing your name, because I know you're from St. Louis, 
which is particularly painful that I didn't get it right. 
[Laughter.]
    So, we will return in just a few minutes, after we've 
completed both votes. Thank you for your patience. [Recess.]
    Thank you very much for allowing us to run and vote. I'm 
sure the other members will return quickly.
    Secretary Hammack, why don't we begin with you at this 
point. Thank you.

STATEMENT OF HON. KATHERINE G. HAMMACK, ASSISTANT SECRETARY OF 
            THE ARMY, INSTALLATIONS AND ENVIRONMENT

    Ms. Hammack. Thank you, Chairman McCaskill.
    I want to tell you we appreciate your support for the Army 
programs, our soldiers, and our families, over the years. We're 
fighting two wars. At the same time, we're relocating, 
building, and closing with BRAC. We have one-third of our force 
that is going to be moving as part of the BRAC this summer and 
fall. We are realigning with global defense posture 
realignment. We have Grow the Army (GTA), which has grown our 
force by 50,000. We're transforming to a modular force to face 
the current wars that we're in. We have housing, barracks, and 
lodging, and infrastructure modernization programs to 
compensate for some of the infrastructure that has been 
neglected over the last 30 years. We are working to reduce our 
energy boot print. But, at the same time, we lead the Federal 
Government and water conservation and reduction. We're energy 
and environmental stewardship. So, we have a lot of programs 
that we are working on, and I'm going to talk a little bit 
about each.
    But, first, we want to thank you for the NDAA for Fiscal 
Year 2011, but want to talk a little bit about the continuing 
resolution and the challenges that it's posing to us.
    We have the inability to proceed with many programs. Right 
now, we have $1.6 billion in MILCON projects. They're on hold, 
waiting for authorization to proceed or new start authority. 
They are in, as Secretary McHugh said this morning, 18 
different States, and they do affect all of us. These are 
projects that have already been bid, that are ready to award. 
As the bids get old, they are at risk for being repriced at a 
slightly higher amount. As a matter of fact, there are 23 
projects in States represented by members of this subcommittee. 
So, support, as U.S. Senators, to enact appropriate legislation 
is something we look forward to.
    On a MILCON basis, the budget request for the Army is $5.3 
billion. This is 3.6 percent of the Army's total obligation 
authorization. It is a 33-percent reduction, or a $2.6 billion 
reduction, from the President's budget fiscal year 2011. 
Although there was a mention that some of the budget reduction 
was due to BRAC, that is not true for the Army, in that in 
fiscal year 2011 we did not have any BRAC construction projects 
budgeted. So, these represent--or, this reduction represents a 
reevaluation of our facility strategy and investments required 
to support other programs.
    In GTA, we have four projects which are necessary, 
regardless of end strength reductions, even though it's under 
the GTA program. They are correcting conditions, not capacity. 
But, we are working on an analysis of how the end strength 
change in 2015 will affect our investments, and feel confident 
it's primarily going to impact future budget requests.
    We are focusing to complete our barracks buyout program, 
transformation to a modular force, and accommodating stationing 
decisions, such as a combat aviation brigade.
    In Europe, the investments that we require are not impacted 
by any force-structure decisions in fiscal year 2012, and the 
fiscal year 2011 requirements are necessary to support 
missions, units, and locations that are known to be enduring. 
These are validated requirements, and we look forward to your 
support of them.
    Just to let you know, over the last 5 years, we have 
reduced the sites that we occupy in Germany by 91 and returned 
23,000 acres of land to the German Government. Over the next 5 
years, we plan to close 29 additional sites and return an 
additional 7,000 acres to the German Government.
    BRAC 2005 is certainly an issue that we are focused on. 
That program is three times larger for the Army than the last 
four previous rounds, combined. It is an $18 billion program, 
of which $13.5 billion are construction programs. There's 330 
projects in our construction program. We are closing 12 Active 
component installations, 1 Reserve installation, and 387 
Reserve component installations. At the same time, we are 
opening 4 centers of excellence through collocation, relocating 
5 major headquarter commands, constructing 125 Armed Forces 
Reserve Centers and restationing, as I said, one-third of the 
Active Force. The Reserve and the Guard will both say this has 
been a tremendous boost to their infrastructure and is very 
well received by all of our Reserve component.
    We are making progress, and are on target, with all 102 of 
the BRAC actions that have been tasked to the Army. There are 
six actions that are on our close watch list with critical 
milestones. We have not yet missed any of the critical 
deadlines, but we are watching them closely, because the 
deadlines are very close, and we will keep the committee 
informed if we see any change in that.
    Also, just to let you know, we have moved out, on a fairly 
expeditious basis, to transfer some of the excess land freed up 
from the BRAC program to the local community. Currently we've 
transferred 19,000 of the 70,000 acres that will be deemed 
excess.
    In energy, as Dr. Robyn mentioned, it is a key focus, 
especially energy security, to reduce our vulnerability. We 
need to retain access to energy in order to operate when there 
is a catastrophe or supplies are disrupted through acts of 
nature, accident, or acts of threat. The Army spends $3.9 
billion on energy, of which $2.7 billion is spent in theater 
and $1.2 billion is spent on our bases. We know that, to remain 
operationally relevant and viable, we have to reduce our 
dependency on foreign oil, increase efficiencies, and implement 
renewable and alternate sources of energy strategies.
    We have launched a Net-Zero Initiative to focus our 
installations on reductions in energy, water, and waste. It's a 
holistic approach. It's an integrated process, which we believe 
will afford us quite a few efficiencies.
    We have made progress on our energy goals with investments 
in many parts of the budget. In MILCON, we have adopted ASHRAE 
standard 189.1 as a environmental sustainability standard. It 
is the most stringent energy efficiency and sustainability 
strategy in the Federal Government.
    We are also implementing renewable energy in both our base 
operations and in theater. At the end of this month, we have a 
wind energy project at Fort Huachuca that comes online. I was 
just over in Iraq and Afghanistan and saw that we--our 
perimeter security systems--the sensors are solar powered. We 
have solar-powered announcement systems. We have solar-powered 
lighting. We are really working on reducing operational energy 
so that energy can be focused where it's most critical, and 
that is in our missions.
    We do want to invest in science and technology (S&T), as 
Dr. Robyn mentioned, to research more energy efficient 
strategies; and for the Army, one of the strategies is more 
efficient helicopter engines so we can reduce the amount of 
fuel so that our helicopters can fly further and utilize less 
fuel. We're also working to leverage commercial, off-the-shelf 
technologies in both base and theater.
    One of the things that did help our energy efficiency 
program in fiscal year 2010 was American Reinvestment and 
Recovery Act funding, which we leveraged quite a few energy 
efficiencies, whether they were renewable energy or improving 
the insulation in many of our buildings. We understand that 
investments in energy are operationally necessary, fiscally 
prudent, and mission essential.
    On the environmental standpoint, the Army is investing $1.4 
billion in fiscal year 2012 in environmental programs, which is 
a slight decrease from fiscal year 2011. This enables us to 
sustain compliance with State and Federal mandates, support 
conservation programs. We have over 200 endangered species, 
which we must monitor. We have over 64,000 archaeological 
sites. We have 29 sites with compatible-use buffers.
    We invest in S&T, as Dr. Robyn mentioned, in the UXO area. 
We also have investments in chemical demil and other test and 
evaluation programs. We have required investments in BRAC 
restoration to enable us to transfer some of the property that 
is deemed excess to the local community. We also have 
responsibility for all formerly used Defense sites by the 
military to implement a remedy-in-place response complete 
strategy.
    On the efficiencies standpoint, we are working on our 
facility investment strategy. We are reviewing our standards 
and our criteria to ensure that they are appropriate to the 
task. We're also looking at modernization and facility 
restoration as an alternative to MILCON. You will see changes 
and, hopefully, those strategies enacted as we go forward.
    I would close, Ma'am. I appreciate this is a historic 
moment. I find it very interesting that most of the witnesses 
here are female, as well, although----
    Senator McCaskill. We're taking over, aren't we?
    Ms. Hammack. Absolutely. Terry, God bless you, you're the 
minority here. [Laughter.]
    But, we look forward to working with you and the committee 
to ensure that our soldiers, civilians, and families have 
energy efficient facilities and the needed services they have 
to perform the many missions in defense of our Nation.
    So, thank you, and I look forward to your questions.
    [The prepared statement of Ms. Hammack follows:]

            Prepared Statement by Hon. Katherine G. Hammack

                              INTRODUCTION

    Good afternoon Chairman McCaskill, Senator Ayotte, and members of 
the subcommittee. I appreciate the opportunity to join Dr Robyn to 
explain the Army's fiscal year 2012 budget needs and requirements.
    The Army's 2012 Military Construction (MILCON) 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 (BCT) 
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 
committee's commitment to our soldiers, families, and civilians and 
support of the Army's 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) 
and Global Defense Posture Realignment (GDPR) and BRAC is declining and 
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 re-balancing 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 over a year ago--projects 
that are needed to continue the momentum required to meet our goals. We 
have approximately $1.5 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-advertize projects, shortened 
construction seasons--especially in northern climes, and delays to 
ongoing consolidation and stationing actions. So, I strongly urge the 
committee to work hard to pass the fiscal year 2011 budget.

                                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 
1,111.6K (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 BCTs and combat support/combat service support 
(CS/CSS) 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, prepositioned stock facilities and transportation 
infrastructure.
    The Army is executing a tightly woven plan integrating BRAC, GDPR/
GTA, and transformation to a modular force as facilitated by MILCON. 
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 4 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 BCT 
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 $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, 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 3 Tactical Unmanned Aircraft 
System Facilities, 5 Readiness Centers, 1 Army Aviation Support 
Facility, and 1 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 1 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 ($27 million/10 percent):
    The budget request of $27 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 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 over 85,000 homes--98 percent of the on-post family housing 
inventory inside the U.S. 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 $2.0 billion. During the 12 years since 1999 
through 2010, our partners have constructed over 25,000 new homes, and 
renovated another 19,000 homes.
    The RCI program for Senior Unaccompanied Housing includes 4 
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 7 high-cost leased homes that cost the Army over $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

BRAC 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 
over 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, 1 Army Reserve 
installation, 387 National Guard Readiness and Army Reserve Centers, 
and 8 leased facilities; and over 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 6 Army installations, 1 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 only $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 environmental programs is $112.3 million, which includes 
munitions and explosives of concern and hazardous and toxic waste 
restoration activities.

BRAC 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 CONSERVATION INVESTMENT PROGRAM

    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.
    The Energy Conservation Investment Program (ECIP) fiscal year 2012 
program includes 10 renewable energy projects and 3 energy conservation 
projects for $51.5 million. The estimated average annual savings is 
projected at $4 million dollars or 258 billion British Thermal Units. 
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 SECURITY AND SUSTAINABILITY

    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 is ready to lead by example.

Drive Efficiency Across the Enterprise
    The Army is working 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.

                               CONCLUSION

    The Army's fiscal year 2012 MILCON, AFH, and BRAC budget requests 
are balanced programs that support 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 McCaskill. Thank you, Secretary Hammack.
    Secretary Pfannenstiel.

 STATEMENT OF HON. JACKALYNE PFANNENSTIEL, ASSISTANT SECRETARY 
      OF THE NAVY, ENERGY, INSTALLATIONS, AND ENVIRONMENT

    Ms. Pfannenstiel. Chairman McCaskill, Senator Ayotte, 
Senator Shaheen, I'm pleased to appear before you today to 
provide an overview of the Department of Navy's (DON) 
investment in our shore facilities.
    DON's fiscal year 2012 budget request includes $13.3 
billion for installations, which includes MILCON, facility 
sustainment, restoration, and modernization, BRAC, family 
housing, environmental programs, energy initiatives, and base 
operating support.
    MILCON request of $2.5 billion is significantly less than 
our 2011 request of $3.9 billion, primarily due to the 
completion of the Marine Corps barracks initiatives and the 
Grow the Force initiative. The MILCON request contains further, 
though limited, investments to relocate marines from Okinawa to 
Guam. Marine Corps relocation, along with other DOD efforts to 
realign forces and capabilities to Guam, represents a unique 
opportunity to improve the U.S. force posture in the Pacific. 
This is a major effort, and one we must get right for both our 
military families and for the people of Guam.
    I'm pleased to share with you that we're making progress in 
this effort. This week, we achieved an important milestone in 
the realignment, the finalization of a programmatic agreement, 
which, after 3 years of consultation, concludes the National 
Historic Preservation Act section 106 process. We may now move 
forward, executing construction associated with the realignment 
and with preparing a record of decision for the training ranges 
on Guam.
    This is an important year for the Guam realignment program. 
The start of construction is imminent and additional contracts 
will be awarded over the next several weeks and months at a 
sustainable pace that Guam can support. Building on fiscal year 
2010 and fiscal year 2011 projects, the projects we are 
requesting in fiscal year 2012 will enable future vertical 
construction, support the introduction of off-island workers, 
and support future operations.
    Similarly, the Government of Japan's fiscal year 2011 
request includes financing for critical utilities projects that 
will support the Marines in the long run and the boost in 
construction in the near term.
    As for BRAC 2005, we are on track to meet the statutory 
deadline of September 15th, 2011. Our fiscal year 2012 budget 
request of $26 million enables ongoing environmental 
restoration, stewardship, and property disposal efforts. DON 
has made significant progress during the past year, and, to 
date, we have completed 328 of the 485 realignment and closure 
actions, as specified in our established business plans.
    The last program I'd like to touch on is our increased 
investment to support the Secretary of the Navy's ambitious 
energy goals. DON has requested $1.2 billion for fiscal year 
2012 and $4.4 billion across the Future Years Defense Plan 
(FYDP) for shore and operational energy efficiencies. This 
supports our capacity to increase energy reliability and 
security, and to reduce our dependence on fossil fuels.
    In closing, your support of DON's fiscal year 2012 budget 
request will enable us to build and maintain the facilities our 
sailors and marines need to succeed in their defense, capacity-
building, and humanitarian missions.
    Thank you for the opportunity to testify before you today. 
I look forward to your questions.
    [The prepared statement of Ms. Pfannenstiel follows:]

           Prepared Statement by Hon. Jackalyne Pfannenstiel

    Chairman McCaskill, Senator Ayotte, and members of the 
subcommittee, I am pleased to appear before you today to provide an 
overview of the Department of Navy'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 (Active + 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 is in 
excess of $7.0 billion. The BOS program finances shore activities that 
support ship, aviation, combat operations, facilities infrastructure 
maintenance, 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 Program, 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 military construction 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 Military Construction 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, and an 
        Aircraft Logistics Apron at Camp Lemonnier, Djibouti; and 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, VA; a Steam System Decentralization at Naval 
        Support Activity South Potomac (Indian Head, MD); a Steam 
        System Decentralization at Naval Station Great Lakes, IL; and 
        an Electrical Distribution System Replacement at Pacific 
        Missile Range Facility, HI;
         $128 million to fund a Bachelor Quarters at Naval 
        Station Norfolk, VA in support of the Chief of Naval 
        Operations' Homeport Ashore initiative; and a Fitness Center at 
        Naval Base Coronado, CA;
         $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, FL; a MH-60 R/S Rotary Maintenance Hangar 
        at Naval Base Coronado, CA; and an E-2D Aircrew Training 
        Facility at Naval Base Ventura County, CA;
         $15 million to fund Massey Avenue Corridor 
        Improvements at Naval Station Mayport, FL, 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, VA; 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, WA; a Navy Information Operations Command 
        FES Facility at Naval Station Pearl Harbor, HI; and a Potable 
        Water Plant Modernization at Naval Support Facility Diego 
        Garcia; and
         $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 Twentynine Palms and Quantico;
         $28 million to construct student billeting for the 
        Basic School in Quantico, VA;
         $301 million to build infrastructure to support new 
        construction. These projects include, road improvements, 
        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;
         $511 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, 
        Twentynine Palms, Barstow, and Hawaii;
         $121 million to provide training facilities and ranges 
        at Camp Pendleton, Camp Lejeune, Twentynine 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 Twentynine 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 Military Construction 
appropriation request is $26 million to construct an Armed Forces 
Reserve Center at Pittsburgh, PA, and a Marine Corps Reserve Training 
Center at Memphis, TN. 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, IN.

Fully-funded and Incrementally-funded Military Construction (MILCON) 
        Projects
    Our fiscal year 2012 budget request complies with Office of 
Management and Budget Policy and the DOD Financial Management 
Regulation that establishes criteria for the use of incremental 
funding. The fiscal year 2012 request includes $78 million to support 
the first increment of a second Explosives Handling Wharf at Naval Base 
Kitsap, WA. 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 (SRM)
    The Department of Defense uses a Sustainment model to calculate 
life cycle facility maintenance and repair costs. These models use 
industry-wide standard costs for various types of buildings and 
geographic areas and are updated annually. Sustainment funds in the 
Operation and Maintenance accounts are used to maintain facilities in 
their current condition. The funds also pay for preventative 
maintenance, emergency responses for minor repairs, and major repairs 
or replacement of facility components (e.g. roofs, heating and cooling 
systems). 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 80 percent of the Office 
of the Secretary of Defense (OSD) 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 renovation of unaccompanied housing. 
As a result, the Navy has minimized operational impacts and ensured the 
safety of our sailors and civilians by prioritizing projects that 
address facilities with the lowest quality rating first.
    Restoration and modernization (R&M) provides major upgrades of our 
facilities using Military Construction, Operation and Maintenance, Navy 
Working Capital Fund, and BRAC, as applicable. In fiscal year 2012, the 
Department of Navy is investing nearly $1.5 billion in R&M funding.

Naval Safety
    Protecting Department of the Navy'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, 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, DON exceeded 
the DOD-wide mishap rate reduction in three of the four mishap 
categories being tracked by the OSD.
    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 (VPP) ``Star'' 
status, OSHA'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
    The Department of the Navy has an aggressive program to manage and 
control encroachment, with a particular focus on preventing 
incompatible land use and protecting important natural habitats around 
installations and ranges. A key element of the program is Encroachment 
Partnering (EP), which involves cost-sharing partnerships with States, 
local governments, and conservation organizations to acquire interests 
in real property adjacent and proximate to our installations and 
ranges. 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 Department of Defense 
and Department of Navy resources to prevent encroachment.
    The Department of Defense provides funds through the Readiness and 
Environmental Protection Initiative (REPI) that are used in conjunction 
with Navy and Marine Corps O&M funds to leverage acquisitions in 
partnership with States, local governments, and nongovernmental 
organizations. For fiscal year 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 with combined REPI and Navy 
funds of $9.36 million and $6.4 million provided by partners.
    To date, the Marines have acquired mainly 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 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 OSD, and the 
Department of Interior to advance the administration's energy strategy. 
We are poised to coordinate with commercial entities, where feasible, 
in their exploration and development adjacent to installations and our 
operating areas along the OCS that are compatible with military 
operations. However, we must ensure that obstructions to freedom of 
maneuver or restrictions to tactical action in critical range space do 
not measurably degrade the ability of naval forces to achieve the 
highest value from training and testing.

                                 ENERGY

    The Department of the Navy (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 a quarter of all of the Presidential 
awards and nearly a third of all of the Federal energy awards. 
Additionally, DON has received the Alliance to Save Energy ``Star of 
Energy Efficiency'' Award and two Platts ``Global Energy Awards'' for 
Leadership and Green Initiatives.

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 
(EI&E). 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 (NECO) and Marine Corps Expeditionary Energy Office (E2O) 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 Department of Defense 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 goals by adopting energy efficient 
acquisition practices, technologies, and operations.
    The Goals are:

          Goal 1 - By 2020, 50 percent of total DON energy will come 
        from alternative energy resources;
          Goal 2 - By 2020, DON will produce at least 50 percent of 
        shore based energy requirements from alternative resources;
          Goal 3 - DON will demonstrate a Green Strike Group in local 
        operations by 2012 and sail the Great Green Fleet by 2016;
          Goal 4 - By 2015, DON will reduce petroleum use in commercial 
        vehicles by 50 percent; and
          Goal 5 - 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 Department of the 
Navy 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 FDYP 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 aggressively pursue the Secretary of the Navy's 
priorities and goals.
    OMN - Projects funded would include testing/certification of Great 
Green Fleet Fuel, propeller coatings, hull coatings Advanced Metering 
Infrastructure, simulator upgrades, Aviation & Maritime i-ENCON and 
facility energy audits and facility energy efficiency upgrades.
    OMMC - 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.
    NDSF/OPN - Projects funded would include LMSR Light Upgrades, shore 
power management/monitoring systems, ship engine automation upgrades.
    MCN - Projects funded would go towards 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.
    RDT&E - Projects funded would include testing of hybrid electric 
drive, Fleet Readiness R&D Program, the shipboard energy dashboard, 
LCAC 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 life-cycle savings 
of millions of dollars at today's fuel prices. 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. 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.
    The Navy is not alone in implementing change. Last year, the 
Marines tested equipment that could be deployed on battlefields at 
their Experimental Forward Operating Bases (ExFOB) at Quantico and 
Twentynine 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 Marines have 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. 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, over 27,000 meters will be installed in our existing facilities 
and provide the means to better measure the amount of energy we are 
consuming. This will allow for our energy managers to provide `real-
time' feedback to our leaders on our installations. At the same time, 
we continue to ensure that new construction is 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. The PSP 
program has been renamed Superior Supplier Program (SSP) and 
transferred over to OSD DDR&E in early 2011.
    In October of last year, the Secretary of the Navy Green Biz Ops 
site was launched in partnership with the Small Business Administration 
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 the Small Business Administration, we are raising the awareness at 
all governmental levels of the strategic importance of energy within 
DON. In addition, we are working with academic institutions and private 
industry to bring innovative ideas and approaches to the forefront.
    Our budget request asks for continued support of these and similar 
projects in order to enhance our efficiency and maximize our move to 
greater independence and more resilient infrastructure.

                                HOUSING

    The following tenets continue to guide the Department's approach to 
housing for sailors, marines, and their families:

          All servicemembers, married or single, are entitled to 
        quality housing; and
          The housing that we provide to our personnel must be fully 
        sustained over its life.

    A detailed discussion of the Department's family and unaccompanied 
housing programs, and identification of those challenges, follows:
Family Housing
    As in past years, our family housing strategy consists of a 
prioritized triad:

         Reliance on the Private Sector. In accordance with 
        longstanding DOD and DoN policy, we rely first on the local 
        community to provide housing for our sailors, marines, and 
        their families. Approximately three out of four Navy and Marine 
        Corps families receive a Basic Allowance for Housing (BAH) and 
        own or rent homes in the community. We determine the ability of 
        the private sector to meet our needs through the conduct of 
        housing market analyses that evaluate supply and demand 
        conditions in the areas surrounding our military installations;
         Public/Private Ventures (PPVs). With the strong 
        support from this committee and others, we have successfully 
        used PPV authorities enacted in 1996 to partner with the 
        private sector to help meet our housing needs through the use 
        of private sector capital. These authorities allow us to 
        leverage our own resources and provide better housing faster to 
        our families. Maintaining the purchasing power of BAH is 
        critical to the success of both privatized and private sector 
        housing; and
         Military Construction. 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 over 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 
over 63,000 homes. These include over 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 $1.3 billion of our funds, which 
represents a ratio of over seven private sector dollars for each 
taxpayer dollar.

Unaccompanied Housing
    Our budget request includes over $267 million in funding for the 
construction of unaccompanied housing to support over 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, VA to 
support the Chief of Naval Operations commitment to achieve the Navy's 
``Homeport Ashore'' objective by 2016.
    The following are areas of emphasis within the Department regarding 
housing for single sailors and marines:

         Provide Homes Ashore for our Shipboard Sailors. The 
        Homeport Ashore initiative seeks to provide a barracks room 
        ashore whenever a single sea duty sailor is in his or her 
        homeport, so they need not live on the ship. The Navy has made 
        considerable progress towards achieving this goal through 
        military construction, privatization, and intensified use of 
        existing barracks capacity. The Chief of Naval Operations is 
        committed to providing housing ashore for all junior sea duty 
        sailors by 2016 at the Interim Assignment Policy standard 
        (shared bedrooms at a minimum 55 square feet of space per 
        person).
         Commandant's BEQ Initiative. It is the Commandant of 
        the Marine Corps' priority to ensure single marines are 
        adequately housed. Thanks to your previous support 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, NC; and Quantico, VA. 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 BEQ initiative, almost 90 
        percent of the Marine Corps' unaccompanied housing is now 
        considered adequate.

                              ENVIRONMENT

    In fiscal year 2012, the Department of the Navy (DON) is investing 
over $1 billion in its environmental programs across all 
appropriations. This level of investment has remained relatively 
consistent over the past few years: fiscal year 2010 - $1,117 million; 
fiscal year 2011 - $1,094 million; fiscal year 2012 - $1,221 million. 
Additionally, the relative distribution of environmental funding across 
the environmental programs, as displayed within the chart to the right, 
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 the Department of the Navy.

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 U.S. Fish and Wildlife Service (FWS) 
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 Department 
of Navy equity in this Executive order is extensive: for the first time 
comprehensive spatial planning is being conducted in our Exclusive 
Economic Zones (EEZs) 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 (OST) 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. The Department of the Navy 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 
(ORRAP).

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 EPA 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
    Department of the Navy natural resources program managers continue 
to provide installation Commanders with special subject matter 
expertise, products and services necessary to ensure they can 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 Department of Navy's stewardship 
include infrastructure, ships, and objects of our Navy and Marine Corps 
heritage; vestiges of our Colonial past; and Native American/Alaskan 
Natives/Native Hawaiian resources. We take great pride in our heritage, 
and the many cultural resources on our installations serve as reminders 
of the long and distinguished course we have charted and of those who 
lived on the lands before they were incorporated into our bases. The 
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 
(ICRMP), which remains the key mechanism for gathering information 
about an installation's history and resource inventory, assessing 
potential use/reuse candidates with our built environment and ensuring 
that our installation planners and cultural resources managers are 
working closely together to protect cultural resources while supporting 
the DON mission.
    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 (IRP)
    The DON continues to make significant progress remediating past 
contaminants. As of the end of fiscal year 10, 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 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 DERP 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 (MRP)
    The DON is proceeding with investigations and cleanup of Munitions 
and Explosives of Concern and Munitions Constituents at all Navy and 
Marine Corps munitions response sites. Our major focus through fiscal 
year 2010 was completing site inspections at all 330 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 $24 million in funding for 
research initiatives, including over $22.9 million to ATSDR and over 
$900,000 to the National Academy of Sciences. This total includes $8.8 
million transferred on February 26, 2010 to fund ATSDR for fiscal year 
2010. 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
    The Department of the Navy is continuing its focused research and 
monitoring programs addressing marine mammals and anthropogenic sound. 
The Navy is investing over $25 million per year to continue research 
into the effects of sound on marine mammals, develop products and tools 
that enable compliance with marine mammal protection laws for navy 
training and operations, provide a scientific basis for informed 
decision making 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 to design 
and construct facilities in support of the relocation. The projects 
provide the horizontal infrastructure (utilities, site improvements, et 
cetera) necessary to enable subsequent vertical construction and/or 
support Marine Corps operations. The Government of Japan, in its JFY-
2011 budget (which runs April 1, 2011 through March 31, 2012) has 
requested a comparable amount of $167 million for facilities and 
design. The JFY-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 graph at left identifies the projects each funding stream 
constructs.
    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 Department of Defense recognizes 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 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 Department of Defense 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 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 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 military 
construction 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 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 RT 15 site be 
selected in the Record of Decision 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 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 JFY-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 Department of Defense 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 O&M 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 towards 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.

                        BRAC 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 
5 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, TX, 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, GA and relocated the personnel 
        and assets to Naval Station Newport, RI. By 15 September, two 
        more installations, Naval Air Station Willow Grove, PA and 
        Naval Air Station Brunswick, ME will be closed.
         Construction was completed in December 2010 on the 
        Consolidated Investigative Agencies facility at Marine Corps 
        Base Quantico, VA. 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 over $400 million on 
        construction and outfitting of 11 facilities to establish a 
        state-of-the-art Research, Development, Acquisition, Test and 
        Evaluation center for Integrated Weapon System and Armaments 
        and Fixed Wing Air Platforms at Naval Air Warfare Center China 
        Lake, CA. 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, 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, MO, 
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, GA, this spring when the 
base will operationally close. This property will be conveyed to the 
University of Georgia via an Education Public Benefit Conveyance. The 
2011 Plan also includes transfer of remaining real property at Marine 
Corps Support Activity Kansas City, MO, and Naval Support Activity New 
Orleans, LA. Other significant disposals include about 1,200 acres at 
Naval Air Station Brunswick, ME, to support aviation and education 
uses.

Naval Support Activity New Orleans, LA
    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, ME
    The Department's largest BRAC 2005 operational action will close 
Naval Air Station Brunswick and consolidate the east coast maritime 
patrol operations in Jacksonville, FL. 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 Public Benefit Conveyance to the Local 
Redevelopment Authority. These facilities will become an executive 
airport.

Naval Air Station Joint Reserve Base Willow Grove, PA
    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 over 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, ME, Naval Weapons Station Seal Beach 
Detachment Concord, CA, and Naval Air Station Joint Reserve Base Willow 
Grove, PA. 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 BRAC 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, CA, 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 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, CA and Naval Station 
Roosevelt Roads, PR. Although supplemental NEPA analysis is not needed 
at Naval Station Treasure Island, CA, 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, CA 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, MA, under an Economic Development Conveyance. 
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, PR, 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 BRAC 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, AK, and Naval Shipyard Mare Island, CA, cleanup at 
Naval Air Station Moffett Field, CA, and additional long term 
monitoring program-wide. The increase is also associated with 
additional radiological contamination at Naval Station Treasure Island, 
CA, and Naval Air Station Alameda, CA.

Naval Station Roosevelt Roads, PR
    The Commonwealth submitted an Economic Development Conveyance 
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, CA
    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. Congress has added a total of $160 
million to the entire Prior BRAC Program over the past 3 years, and we 
have used over $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 Records of Decision 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, CA
    With adoption of new Economic Development Conveyance (EDC) language 
in the National Defense Authorization Act for Fiscal Year 2010, DON was 
able to complete negotiation of a profit participation model for the 
transfer of Treasure Island. In August 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, MA
    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, CA
    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 residing Hangar 1. They are seeking 
additional financial support for this effort.

                              BRAC 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 
resupply, reequip, 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 warfighting readiness and 
quality of life for the most formidable expeditionary fighting force in 
the world.

    Senator McCaskill. Thank you.
    Secretary Yonkers.

STATEMENT OF HON. TERRY A. YONKERS, ASSISTANT SECRETARY OF THE 
      AIR FORCE, INSTALLATIONS, ENVIRONMENT, AND LOGISTICS

    Mr. Yonkers. Good afternoon, Chairman McCaskill, Senator 
Ayotte, Senator Udall, and Senator Shaheen. I want to thank you 
for inviting me here today to be able to talk to you about our 
wonderful Air Force.
    I'd be remiss if I did not say thank you very much for the 
strong support that this committee has given the U.S. Air Force 
in all of these years. So, thank you very much for doing that.
    I would also be remiss if I didn't say I didn't like A-10s, 
as well. [Laughter.]
    So, we're all in, as far as the Air Force is concerned.
    A right-sized and efficient infrastructure is essential in 
enabling our total-force airmen to perform their duties while 
ensuring responsible stewardship of our fiscal resources. Our 
fiscal year 2012 budget request contains $2 billion for MILCON, 
military family housing, and BRAC; $1.4 billion of this is for 
new MILCON to ensure alignment with our new weapons system 
deliveries and strategic basing initiatives. It keeps us on 
track to eliminate the inadequate dormitories for our 
unaccompanied airmen by 2017. Our efforts to provide quality 
housing for airmen and their families also includes nearly $500 
million to sustain and modernize primarily overseas housing and 
support housing privatization in the United States continental.
    Moreover, the Air Force is on track to fully implement all 
assigned BRAC recommendations by September 2011. We had on the 
order of 400 of those assignments. To this end, we are 
requesting 125, for $4 million, to continue completing our 
legacy BRAC programs; in particular, the environmental 
cleanups.
    We have all been challenged by the Secretary to find 
efficiencies in our program areas. We have done this, and we 
are going to continue to do this. Earlier this year, I issued a 
policy that refocuses our environmental cleanup program. This 
policy moves us towards completing cleanup and closure of 
contaminated sites by leveraging innovative technologies and 
business acumen. Our new goals are to achieve completion of 75 
percent of all our active base sites by the end of 2015, and 90 
percent of all our BRAC sites by the same timeframe.
    As importantly, our cleanup decisions, going forward, are 
going to be better informed by a lifecycle cost analysis. To 
meet our aggressive goals, we're refocusing the program on a--
fixed-price performance-based contracts with clear performance 
standards and endpoints. Starting in fiscal year 2014, we 
expect to achieve initial reductions in our program cost, 
eventually leading to at least a 30-percent program efficiency.
    On our Air Force installations, we continue to focus on 
reducing energy demand through greater energy efficiency and by 
increasing supply through renewable energy projects. In fiscal 
year 2010, the Air Force funded 100 percent of our eligible 
MILCON projects to meet Leadership in Energy and Environmental 
Design silver standards. All new buildings designed since 2007 
are 30-percent efficient or more.
    On the supply side, the Air Force is a leader among Federal 
agencies in renewable energy use, with 6.4 percent of 
electricity coming from renewable. As of last year, the Air 
Force had 85 renewable projects on its bases, producing over 70 
megawatts of power. These numbers are truly growing fast. 
Within the next few years, we expect to add 100--or, excuse me, 
1,000 megawatts of power from solar, wind, waste-to-energy, and 
biomassed energy. As Dr. Robyn said, we are engaging with the 
private sector to use their dollars and the authorities that 
you've granted us to fund these projects.
    The budget request in efficiencies described here represent 
only a small sample of our efforts to meet our environmental 
and energy security responsibilities and to increase the 
quality of life for our airmen.
    While there are certainly challenging times for everyone, 
the Air Force remains committed to fulfilling its obligation to 
fly, fight, and win like never before.
    Madam Chairman, Senator Ayotte, distinguished members of 
the committee, it's been an honor to be here before you today 
and to be able to represent our wonderful airmen and their 
families.
    Again, I want to thank you for your continued support. I am 
really looking forward to working with you. I'm ready to answer 
any questions you may have.
    [The prepared statement of Mr. Yonkers follows:]

              Prepared Statement by 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 U.S. 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: (1) continue to strengthen the nuclear enterprise; (2) 
partner with the joint and coalition team to win today's fight; (3) 
develop and care for our airmen and their families; (4) modernize our 
air, space, and cyberspace inventories, organizations, and training; 
and (5) recapture acquisition excellence.

                                OVERVIEW

    Our fiscal year 2012 President's budget request contains $2 billion 
for military construction, military family housing, and Base 
Realignment and Closure (BRAC). The $1.4 billion military construction 
request represents an increase of $97 million over 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 military construction 
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 number one 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 military construction for the nuclear enterprise, 
including a B-52 maintenance dock at Minot AFB, ND, and an addition to 
the Air Force Nuclear Weapons Center at Kirtland AFB, NM. 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 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, U.S. Strategic Command at 
        Offutt AFB, NE, and a new Air Freight Terminal Complex at 
        Andersen AFB, Guam.
         New facilities for operations and mission support. A 
        new Air Support Operations Facility at Fort Riley, KS, 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 SATCOM relay in Sigonella, Italy, and a 
        Communications and Network Control Center at Nellis AFB, NV.
         Improvements at Andersen AFB, 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 AB, 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 AFB, CA; Osan AB, Korea; Eielson AFB, AK; Minot 
AFB, ND; Ramstein AB, Germany; Thule AB, Greenland; and Cannon AFB, NM. 
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, AK; Joint Base San Antonio, TX; 
and Joint Base Langley-Eustis, VA, with the construction of three 
dormitories worth $193 million. These projects represent the last of 
the Joint Base military construction 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 AFB, TX, and an Education Center at Vandenberg AFB, 
CA.

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 AFB, NM. 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 military 
construction projects, including:

         Five projects to beddown our newest fighter, the F-35. 
        This includes the F-35 force development and evaluation mission 
        at Nellis AFB, NV, the second training location at Luke Air 
        AFB, AZ, and the first operational unit at Hill AFB, UT.
         Three projects supporting our HC/EC/C-130J fleet. 
        These projects include a Joint Use Fuel Cell at Davis-Monthan 
        AFB, AZ, and flight simulators at Davis-Monthan and Pope AFB, 
        NC.
         Three projects supporting the Pacific Regional 
        Training Center at Andersen AFB, Guam. This requirement was 
        driven by the relocation 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 AFB, NM, and support operations at Barksdale AFB, 
        LA, Fairchild AFB, WA, the U.S. Air Force Academy, CO, and 
        Cannon AFB, NM.

                    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 (BRAC)
    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 BRAC
    Real Property Transformation
    The Air Force remains a Federal leader in the implementation of the 
management principles outlined in Presidential Executive Order 13327, 
Federal Real Property Asset Management. We continue to aggressively 
manage our real property assets to deliver maximum value for the 
taxpayer, improve the quality of life for our airmen and their 
families, and ensure the protection and sustainment of the environment 
to provide the highest level of support to Air Force missions. The Air 
Force is achieving these goals through an enterprise-wide Asset 
Management transformation that seeks to optimize asset value and to 
balance performance, risk, and cost over the full asset life cycle. Our 
approach is fundamentally about enhancing our built and natural asset 
inventories and linking these inventories to our decisionmaking 
processes and the appropriate property acquisition, management and 
disposal tools. Even though the BRAC 2005 round did not 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.
    BRAC 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 over 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 timeframe 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 2010, 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 number one 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: (1) continue to strengthen the nuclear 
enterprise; (2) partner with the joint and coalition team to win 
today's fight; (3) develop and care for our airmen and their families; 
(4) modernize our air, space, and cyberspace inventories, 
organizations, and training; and (5) 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 dollar spent. Thank you for your continuing support of our 
Nation's Air Force.

    Senator McCaskill. Thank you.
    I want to welcome all the subcommittee members here today. 
I'm so pleased that we have a great turnout. I think this is 
terrific. I hope we keep it up, because we're going to have 
some great hearings in this subcommittee.
    I want to start with the move from Okinawa to Guam, 
especially in light of the situation in Japan. Correct me if 
I'm wrong, but this decision was predicated on Japan being 
willing to spend billions and billions of dollars to make this 
work for our military. Don't you think it would be wise, at 
this moment, to do a timeout? Since we have not been able to 
get tangible progress on the new airfield replacement facility 
in Okinawa that was supposed to be part of the deal. It seems 
to me, as I review all the documents, that we're getting ahead 
of ourselves here.
    Ms. Pfannenstiel. Thank you, Chairman McCaskill. There 
are--as you pointed out, and I think as both Dr. Robyn and I 
were saying, there are a lot of moving parts here. Certainly 
the Futenma replacement facility is, in fact, something we've 
been watching and waiting for as an indication of commitment on 
the part of the Japanese before we went much farther in Guam.
    On the other hand, there are other signs of commitment. 
Right now, the U.S. Treasury has $834 million of Japanese money 
that they have invested, that they have given us to be used on 
Guam. There is another $415 million that has been proposed in 
their--this year's budget for utilities on Guam. So, there 
really has been, I think, a showing of commitment from the 
Government of Japan.
    Clearly, the events of the past week put everything in some 
kind of different place, in terms of being able to come up with 
the money. But, what we're looking at now is not getting ahead 
of where the agreement was--the international agreement--but, 
rather, allowing the construction to begin as it starts. The 
amount that we have put in the fiscal year 2012 request, the 
$181 million, is intended to begin to allow us to get started 
on some projects that, in the one case, the case of Andersen 
Air Force Base, will have an enduring value. Now, the value 
will depend on whether we end up putting the Marine air wing 
there, whether it's used for operations that are not now 
planned. It clearly gives the Air Force some flexibility if we 
don't use it for the Marines.
    The other major project is a--water projects and water 
facilities that will be needed to support the workers that will 
come. So, we're trying to stage, gradually and without moving 
too fast, the investments that will need to be made.
    Senator McCaskill. Do you think it's reasonable that this 
subcommittee, and the full committee, should see a master plan 
before we start funding?
    Ms. Pfannenstiel. I do. In fact, we are putting that 
together. There have been so many moving parts that, frankly, 
it's moved faster than we've been able to put pen to paper on 
it. We will bring in a plan of expenditures and timing and 
projects before this goes to bed.
    Senator McCaskill. Okay. I think we're going to be looking 
for that, and especially looking to see the posture of the 
Japanese Government in the aftermath of this disaster, whether 
or not this, in fact, makes sense.
    Let me talk a little bit about MILCON requirements. I'm 
just going to do this question, and then I want to move on so 
everyone has a chance to question. Then I'll come back to my 
other questions.
    Let me preface this by saying, I certainly will be the very 
first person to stand up and say our military deserves the 
best--but, we are searching everywhere in Federal spending to 
find ways to bring down the footprint of the Federal 
Government. So, when I saw that there was a $50 million fitness 
center, I thought, ``Well, this must be in a very, very 
difficult part of the world. This must be a fitness center 
someplace where there is no other access to easy and affordable 
and accessible physical training activities.'' When I find out 
that it's in Coronado, in San Diego, and that it includes a 
$7.5 million swimming pool and a $4 million recreational center 
for single sailors and close to $20 million just for the gym 
facility. I have to say, first of all, I'm anxious to hear what 
we're replacing. Certainly I want our men and women to have the 
best. But, this is the most beautiful place in the world. 
Certainly, the outdoors lends itself for exercise almost every 
day there. So, I'm trying to figure out, in these tough budget 
times, how that kind of expenditure is one that we can justify 
to the American taxpayer.
    Ms. Pfannenstiel. I do agree with you that San Diego is one 
of the most beautiful places in the world and that people do 
spend a lot of time outdoors. The reason that this facility is 
at the price that it is, is that it will have something like 
80,000 patrons. That area of San Diego, the north island of San 
Diego, is a major hub for the Navy and the Marines. So it is 
expected that this will be the central facility for that entire 
area.
    Senator McCaskill. I just want to let the word go out that 
we're going to look really carefully at all of this, and--
because we want our men and women to have the best, 
particularly in terms of their safety and their ability to 
achieve mission and a quality of life for them and their 
families, but we have to be really careful about the 
expenditures, and justifying them.
    Senator Ayotte.
    Senator Ayotte. Thank you, Madam Chairman.
    I wanted to ask you, as a followup to my opening statement, 
Secretary Robyn, in recent years, a proliferation of earmark 
grants have been appropriated to DOD through the Office of 
Economic Adjustment (OEA) for vague general requirements. In 
part, I think that was to technically avoid being called an 
earmark. An example, $300 million for medical transportation 
infrastructure in the National Capital Region (NCR), $45 
million for reimbursement to local towns, and $250 million for 
repairs to local community schools. None of these amounts were 
included in the DOD budget requests and nor are they considered 
firm DOD requirements. All of them are added as a result of 
decreases to other DOD accounts where you might need those 
funds for the priorities of the military. So, it would seem 
logical, given the challenges that we face on a fiscal basis, 
where DOD is making these difficult decisions that we're going 
to have, to make sure we support our troops while reducing 
costs. This is of concern.
    I guess I would ask you, should the OEA be in the business 
of serving as a passthrough, almost, to improve public 
infrastructure off military bases?
    Dr. Robyn. Two of the three examples you mentioned are 
issues where there are--I think Congress will resolve them. 
Senator Webb can speak to the transportation issues around, I 
will say that DOD has added enormously to the already horrible 
congestion in the NCR. Senator Webb, Congressman Moran, Senator 
Warner are understandably concerned about that.
    I could speak to the school issue, but these are issues 
within Congress. OEA is a wonderful office. It as created by 
Robert McNamara in the 1960s to work with communities. Pease 
Air Force Base, the success of reuse at Pease, has a lot to do 
with OEA. It's a wonderful office. I don't know how to answer, 
when we are asked to carry out something like that, we do it, 
and we do it well.
    Senator Ayotte. I guess I would ask you, just on a big-
picture basis, what do you think are the implications of doing 
things that way, as opposed to--for example, in transportation 
funding. I also have the privilege of serving on the Commerce, 
Science, and Transportation Committee that oversees 
transportation funding, and so I'm concerned that it's going to 
be a drain on your priorities, to feel that you have to serve 
this purpose, when there are other oversight committees that 
really should be the ones deciding, on a budgetary basis, where 
those funds, for example, would come from. I'm just using roads 
as an example.
    Dr. Robyn. We will implement that in a way that takes into 
account competition and creates criteria so it is not--we don't 
view it as ``an earmark.'' But, we will implement it 
responsibly.
    Senator Ayotte. But when you're given the legal language 
for--or the language in the bill itself, it seems like it is a 
way to circumvent what has been actually a decision of 
Congress, right now, on earmarks. So, I guess I would ask you 
to consider the overall priorities of making sure--we want to 
make sure that the proper committees oversee these issues, and 
also that the funds that you're given are used for your 
priorities, based on what this committee decides and what the 
overall Armed Services Committee decides.
    Thank you for your answer.
    The other question, I wanted to ask Secretary Hammack. 
We've talked quite a bit about the September 2011 deadline for 
BRAC. As you and I talked in advance of the hearing, there is 
an outstanding issue with regard to the Paul A. Doble Army 
Reserve Center in Portsmouth, NH, where we have a situation 
where, as I understand it, we'll probably be unlikely to meet 
the September 15 deadline. Could you just elaborate on where 
the status of that is at this moment?
    Ms. Hammack. Certainly. In section 2712 of the 2010 NDAA, 
it authorized us some more latitude in selection of the site, 
because the original language in the BRAC law said that it had 
to be directly adjacent to Pease, and the NDAA language allows 
us to find a location in the locality of Pease. So, with that 
legislation in the 2010 NDAA, it removed the timeline 
requirement of BRAC. So, it gave us the flexibility to evaluate 
all alternatives and find an appropriate site that helps us do 
it in an economic manner.
    Senator Ayotte. In conjunction with finding that new site, 
is the plan to actually construct a new Reserve Center in an 
alternative site?
    Ms. Hammack. Yes. The plan is to construct a Reserve Center 
and, if there is an increase in cost, to work with the Office 
of the Secretary of Defense (OSD) on reprogramming.
    Senator Ayotte. Thank you very much.
    Secretary Yonkers, I know that you're in the process of 
coming up with the criteria for strategic basing of where the 
KC-46A will be stationed. I'm sure you're aware that, 
obviously, Pease National Guard has a KC-46A there, and 
certainly, in my view, is a great location. But, more 
importantly, I wanted to ask you where that issue was right 
now, in terms of criteria, and how you anticipate the Guard and 
Active-Duty decisionmaking to go forward, of where that 
refueler will be located, and what type of criteria you're 
looking at to come forward once you do announce the criteria.
    Mr. Yonkers. Thank you for the question, Madam. You know 
that this award was just made in February, and it's a big 
program for the Air Force--billions of dollars. You also know 
that we have a strategic basing process in place. It's been in 
place about 2 years now. It was designed specifically to be 
open and transparent and to have a number of touchstones with 
the U.S. Congress as we went through it. So, we haven't veered 
from that. We intend to continue to have a transparent and an 
open process so that you can see, as we move down these 
strategic basing decisions, such things as the criteria, 
preferred locations, and the other kinds of parts to the 
process.
    I will tell you that, as we look at this, we're going to 
look at every installation in the Air Force. So, all bases, 
everything is on the table, including the Guard and the Reserve 
units and bases, as well.
    The first bird is expected to arrive, right now, in the 
2015 timeframe. So, we don't have a lot of time. If you look at 
the MILCON program that we're going to have to put into place 
in order to support the bed-down of these initial aircraft, 
that's a 2-year lead time. If you back that up another year and 
look at the National Environmental Policy Act requirements, 
that's at least 12 months, if not 18 months.
    So, I would say, within the next year, year and a half or 
so, we're going to have to sort through the criteria. We're 
going to have to start making some judgment on preferred 
alternatives and start looking at where we're actually going to 
be bedding down the aircraft. So far, ma'am, Air Mobility 
Command (AMC) is working through those criteria, so I don't 
have much definition for you other than that.
    Senator Ayotte. Thank you very much. We also had the 
opportunity to question the Secretary this morning in the Armed 
Services Committee about the issue. I would just ask that this 
clearly become a merit-based decisionmaking that looks 
strategically at what makes sense and be the most cost-
efficient use of taxpayer funds. Because on the merits, that 
would be the way to make the decision. So, I appreciate that.
    My time is expired.
    I want to thank all the witnesses who are here for your 
service to our country.
    Senator McCaskill. Senator Shaheen.
    Senator Shaheen. Thank you, Madam Chair.
    Since Senator Ayotte and I are both from New Hampshire, we 
get to double-team you all on these concerns we have locally. I 
would just like to follow up, Secretary Hammack, on the 
concerns raised by Senator Ayotte, relative to the Reserve 
Center that's currently planned for Portsmouth. I'm aware that 
we have an alternate site and that the project is actually 
ready to go.
    What we have heard is that there are some concerns that 
because the projected cost is going to be higher than the 
original amount authorized, that there has been some 
questioning about whether that project is going to go forward. 
So, can you assure us that you've looked at that and you're 
comfortable with what's being proposed, and that it is going to 
go forward?
    Ms. Hammack. As mentioned before, we are examining all 
costs. We want to be prudent stewards of taxpayer resources, so 
we want to ensure that those incremental costs are appropriate. 
So, we are near the end of an analysis to determine whether--
or, what the amount of the cost is that we need to ask for 
reprogramming on. So, we will be working with OSD on that. But, 
our intent is to move forward with a new Reserve Center.
    Senator Shaheen. Thank you. That's very good to hear. I 
know there's a great interest in the potential for the new 
facility to provide training for those medical personnel that 
will be so needed. So, we appreciate that.
    Secretary Pfannenstiel, we had the opportunity to have 
Secretary Mabus before us a week or so ago. One of the concerns 
that we raised with him at the time was the new Government 
Accountability Office (GAO) report that has come out that talks 
about the backlog in needed investments in our public 
shipyards. Again, Senator Ayotte and I both represent, along 
with the Maine Senators, the Portsmouth Naval Shipyard. The 
backlog there is projected to be over $500 million. So, can you 
talk a little bit about what priorities the Navy is going to 
use as you're looking at the backlog of investments that are 
needed, and how you'll make those decisions?
    Ms. Pfannenstiel. Yes, I'd be glad to. We recognize that 
this backlog needs to be addressed. We have been putting into 
the shipyards, on average in the last few years, much more than 
the minimum requirement--in some years, double the minimum 
requirement.
    In terms of Portsmouth, in particular, we do have some 
projects right now, some $47 million underway as we speak, 
another $49 million in the FYDP. So, those are headed towards 
Portsmouth. We have a $17 million repair that is supposed to be 
done, but now is being held up for the--because of the 
continuing resolution, but it would be in 2011. Then another 
$100 million in an energy project.
    Senator Shaheen. Right, we were very excited to hear about 
that.
    Ms. Pfannenstiel. So, I guess what I'm saying is that we 
have recognized that there has been this backlog, and we're 
trying to address it through a number of quite ambitious 
projects, going forward.
    Senator Shaheen. But, as you look at the backlog, not just 
at Portsmouth, but across the other three public shipyards, how 
do you prioritize those projects? Is it based on impact on 
national security? Is it based on competitiveness? How do you 
determine what gets moved forward in the queue?
    Ms. Pfannenstiel. That's an excellent question, and I think 
it goes across the entire range of the Department budget, when 
we're looking across at any one of our projects that come up. 
As we have a minimum that we need to be addressing, and where 
we go above that is--it's a decision that is programmed each 
year.
    Senator Shaheen. Thank you.
    You've all mentioned the investment in energy to try and 
make each branch of the military less dependent on foreign 
sources of fuel and more energy efficient.
    Secretary--or Dr. Robyn, can you speak to how you're 
integrating the various work that's being done by each branch? 
I was impressed to hear the Navy talking about their goal of a 
50-percent reduction by 2020. This morning we had 
representatives from the Air Force talking about what you're 
planning, Secretary Yonkers. But, how is that being integrated 
across all of the branches of the military, and how are we 
sharing what we've learned?
    Dr. Robyn. Thank you. First off, we talk continually. I 
think, for most of us, energy is our highest priority. It's a 
moment when we can do a lot. So, a lot of it is informal.
    My office sets policy, primarily. I will give you an 
example. We're currently developing guidance that will require 
the Services--and the Navy is already doing this--to meter a 
higher fraction of their buildings--for energy consumption--
more of their buildings than they're currently doing.
    We are very data-starved. This is an area where you need to 
know how much you're consuming in order to make progress. We 
don't know that. Most of our buildings are not metered. So, I 
can set guidance. So, I can, through policy, create guidance.
    We are also leading the effort to create an energy 
information management system that cuts across the Services.
    I believe, before you got here, in my opening statement, I 
talked about an energy test bed initiative. This is, I think, a 
tremendously important effort, because no individual service 
has the incentive to make these investments. We believe that 
industry is coming up with technology, that they can't get 
commercialized, that can radically improve our energy 
performance. All the Services have the same infrastructure, 
they have the same energy challenges. So, we've taken that on 
through this testbed.
    We do the same in the environmental area; where there are 
crosscutting issues that are common across the Services, we 
make the investment. But, most of the execution is done through 
the Services.
    So, it's a combination of policy and coordination. I'm sure 
there are areas where we're guilty of duplication, but I think 
our staffs and our teams work very, very closely together in 
the energy area, because it's such a high priority, number one, 
and because resources are so scarce, and we're trying to figure 
it out together. Using private money is a key thing, figuring 
out how to do that is something we're doing collectively.
    Senator Shaheen. Thank you very much. I hope you will share 
with other agencies within government what you have learned.
    Senator McCaskill. Senator Webb.
    Senator Webb. Thank you, Madam Chairman, and 
congratulations on your newly-assumed position, and as well as 
Senator Ayotte.
    There are a lot of things that I would like to discuss as 
the year goes forward. Particularly, we just had some 
discussion on the BRAC implementation difficulties. We have a 
number of similar funding situations in Virginia, because we 
have so many military installations.
    But, what I wanted to convey today is how strongly I 
believe we need to move forward in a time-sensitive way with 
the situation on Okinawa and Guam. This has been something of a 
hot potato from one administration to another. I know, 
Secretary Pfannenstiel, you're talking about how you're 
inundated with information right now, you're behind the 
information flow. The first agreement was made in 1996--it's 15 
years ago--and we have a very tumultuous situation in Japan 
right now, which may impact the decisionmaking.
    But, when we talk about the $6 billion, we have to put it 
in the context of how the Japanese have been such a cooperative 
partner since the end of World War II. This is an issue that is 
extremely important to our relationship with Japan, as well as 
to the future of our presence in the Pacific. This is sort of a 
full-faith issue with the Japanese. A lot of people don't 
realize how much they have put into our infrastructure on 
Okinawa, as well. They pay administrative costs. I was in 
Okinawa, as a marine in 1969, and there were nothing but 
Quonset huts out there. But, the Japanese have paid for the 
types of facilities where our people have lived, hosted our 
bases. It's just not conceivable to me, given the strength of 
our alliance, but, in international legal terms, they could 
turn around and say, ``We don't want you here.'' So, they have 
stepped forward, and the administrative costs for relocating 
from Okinawa to Guam are a part of that.
    But, let's put that into the context of what's just 
happened over there. At a minimum, this is probably a $180 
billion tragedy that hit Japan, with the combinations of the 
earthquake, the tsunami, and the situation they have in their 
nuclear power program.
    But, the questions that I have, and the concerns that I 
have on Okinawa and Guam, go more to whether or not we have 
properly planned the relocation itself, in terms of military 
force structure and those sorts of things.
    As I think some of you know, I worked as a military planner 
out there in the 1970s. I either walked or drove every square 
inch of Guam, Tinian, Saipan, and went up to the training bases 
in Okinawa. I did a facilities analysis there. Force-structure 
changes, the nature of our military changes, but in islands, 
the area of an island doesn't change. The percentage of Guam, 
particularly that's in military retention areas, really hasn't 
changed.
    I went back last February, to Okinawa and to Guam. I was 
surprised at the plans that they were putting into place on 
Guam. We had some good meetings. I noticed, in your testimony, 
there--I think there was some good response to some of those 
meetings. We're going back again next month. Chairman Levin and 
I are planning to go back and meet with people out there again 
and have this discussion.
    So, point number one would be, I hope we could do a--and 
this may go to your comment, Senator McCaskill, about a 
timeout. I don't think we need a timeout, but I think we need 
to make sure that we are moving into the right structure before 
we put this forward. I don't think the 2014 goal was doable, 
either on Okinawa or Guam. I said that last year, when I came 
back.
    If nothing else, I think the last 2 weeks has again 
reinforced the importance of our military bases in Japan to the 
Japanese people. Our military people are up there right now 
assisting with the horrendous circumstances up in northern 
Japan.
    But, I really believe that we need to sit down and take a 
hard look at the planning that has been done for Guam, and, 
potentially, to look at a different way to leave the Futenma 
base on Okinawa, instead of building this mammoth structure, 
which I went out and visited last year. So, that's not going 
back to square one. Hopefully, with some real energy, maybe we 
could sit down and make sure we're doing it the right way.
    One particular point, and then I would like to hear some 
response. When I was doing the planning, all those years ago, 
no one was thinking that the marines who would be on Guam and 
Tinian, would, by and large, be a permanent change-of-station 
force. In other words, this would not have been 3-year tours. 
It would have been rotational tours. What's the difference in 
that? The difference is, we're saying we're going to put 8,000 
marines on Guam. If you put 8,000 marines, rotating from Hawaii 
or some other place, that's 8,000 marines on short tours. But, 
if you put 8,000 marines under permanent change of station down 
there, you're talking probably 23,000 people--totally different 
infrastructure with schools, hospitals, roads, et cetera.
    So, where are we on this? I asked Secretary Mabus, a couple 
of weeks ago. But, what are your thoughts here?
    Ms. Pfannenstiel. Senator, what you said is exactly what we 
have been struggling with--there are changes of circumstance. 
The 2014 date, that was originally put out as the completion 
date, looks harder and harder to achieve, when we have made the 
commitment to the people in Guam that we will not overwhelm 
their infrastructure. So to try to bring in the work crews and 
to do the work that needs to be done by 2014, seems hard to 
picture. We have agreed that we will slow down the process, as 
necessary, to avoid overwhelming the infrastructure.
    But, back to your point about, are we bringing in 8,000 
permanent marines with families? That was the original 
agreement. You're correct, that's an enormous number of people, 
given the population of Guam is 170,000. So, we need to work 
with the people of Guam. We are doing that. So, all of this has 
given us a lot to think about, a lot of changes to the way we 
were originally thinking.
    When we've been asked for a master plan, or a plan of when 
and where and how much and what projects, we've been putting 
that together. We are doing the full sum assessment of what 
makes sense on Guam, what makes sense in the Pacific. This is 
part of it. We believe that the projects that we now are 
looking at will work, either way, but we're still building to 
move the marines that we need to have on Guam. We're building 
the facilities for them to be there. The timing and the 
structure is what we are struggling with now.
    Senator Webb. Okay. I'm looking forward to going back next 
month. I think our trip is still going to be on.
    Just a couple of things I hope you would put into the 
formula when you're thinking about this is, I was surprised, 
last year, at how little Tinian was being planned on--the use 
of Tinian is--29 square miles, most of it's uninhabited. There 
would be ways to make better use of Tinian, particularly with 
ranges. But, I don't want to get into details that--the marines 
would have much better recommendations than I would. But, there 
are ways to use Tinian that really weren't being thought about 
or considered last year.
    The other is how important it is to resolve the issues on 
Okinawa in a timely way. To do so, I think, with a respect for 
what the Japanese have contributed. I don't see a lot of that 
up here. It kind of surprises me.
    Thank you, Madam Chairman.
    Ms. Pfannenstiel. Thank you.
    Senator McCaskill. Thank you, Senator Webb.
    There are many things I can say about Senator Webb. I'm 
going to miss his friendship in the Senate. But, this committee 
is really going to miss Senator Webb, because of his 
experiences and expertise, particularly in the part of the 
world we're talking about.
    I think what we're both saying, maybe in different ways, 
is, there needs to be a plan. We need to make sure the plan 
makes sense and it's clear to everyone before we begin 
investing serious amounts of money, so that we know exactly 
what the way forward is. I'll look forward to visiting with 
Senator Webb when he gets back from his trip so that, together, 
we can try to do the best job possible.
    Certainly, I think we, especially at this time, need to 
remember the special relationship we have with the Japanese 
people and what they have done for our country over the last 
decades.
    I want to talk about BRAC bid savings and where that money 
goes. There clearly is some bid savings in BRAC. Frankly, I 
want to know if there's bid savings other places, over the last 
2 years, in the MILCON budget. Do we need to talk about whether 
or not that money goes back to the Treasury to reduce our 
deficit or whether that's found money that can be spent other 
places?
    Dr. Robyn. Let me say two things. One of them I was tempted 
to say earlier, when you were talking about the health center. 
I think--we can argue--I think the current issue over bid 
savings has to do with $20 million that we would like to 
reprogram from BRAC bid savings to begin to carry out some 
short- and medium-term transportation improvements at the Mark 
Center, where we are going to have a horrendous impact on 
transportation, not just on our own employees, but on tens of 
thousands of innocent commuters. We believe that falls within 
our discretion in implementing BRAC.
    BRAC is one of those big savings things. We are going to 
realize $4 billion a year in savings from BRAC. That's the 
biggest BRAC, in terms of savings. If you take all the BRACs 
together, it's, I think, $11 billion. So, that's big. The money 
that we spend on the OEA is peanuts by comparison. The money 
that we spend on facilities and traffic improvements to better 
implement BRAC, that's small.
    I agree, every project should be justified, and we believe 
it is. We have an internal process for doing that. There will 
be savings at the end of the day. But, I want to just keep our 
eye on the ball of the huge, multibillion-dollar savings that 
BRAC is going to bring about.
    Senator McCaskill. Although it was not as large as 
projected.
    Ms. Pfannenstiel. The savings?
    Senator McCaskill. We have a $20 billion shortfall in 
projected savings that have not been realized over what was 
originally set out, in terms of BRAC savings.
    Ms. Pfannenstiel. Correct. I think what you're referring to 
is that we originally said BRAC would cost $21 billion to 
implement. You spend money upfront in order to save it later 
on, with BRAC. We estimated, for purposes of internal analysis, 
using something called the COBRA model, that the costs would be 
$21 billion. At the end of the day, it will be $35 billion, 
which, yes, that means that your savings are fewer. I could go 
into the COBRA model and why that's not accurate. But, I think 
most of that $14 billion gap, was a result of decisions by the 
Department to meet needs that they felt were not being met. So, 
rather than do a renovation, do new constructions, do a more 
fundamental renovation to better serve the mission, this BRAC 
was not about getting rid of excess capacity, it was about 
better--having our facilities better suit our mission. There 
was a decision--and, granted, it was in a different fiscal 
climate--but, to spend this money in order to have our 
facilities be better suited to meet the mission.
    Senator McCaskill. Let me get back to what my original 
question is, when we have bid savings, I think we had 
rescissions in the Federal Aviation Administration bill that 
was $340 million from the Army on BRAC bid savings, $110 
million from the Navy, and $50 million from the Air Force. I 
know there probably have been bid savings in MILCON over the 
last couple of years. The question is, should bid savings be 
allowed to be reprogrammed, or should bid savings go back to 
the taxpayers to reduce the overall pricetag, since the savings 
belong to taxpayers?
    Dr. Robyn. Let me speak to BRAC, because I honestly don't 
know how it works on MILCON. The fact that you have bid savings 
doesn't mean you spend them.
    Senator McCaskill. If you planned----
    Dr. Robyn. No, that's definitely not our policy.
    Senator McCaskill. Good.
    Dr. Robyn. Keep in mind, with respect to BRAC, the 
construction climate--the first--up until 2008, we were 
experiencing unexpected increases in construction prices. To 
make Fort Belvoir and Bethesda world class, which is what 
Congress asked us to do, midway through, we took bid savings 
and applied to that. We had to come up with a additional money 
when the construction industry was bad. Now we are seeing bid 
savings, because--one of the silver linings.
    But, no, it is not our policy to spend bid savings merely 
because they are there.
    Senator McCaskill. You don't have to answer this today, 
because I don't mean to put you too much on the spot, 
especially at your first hearing--but, I think that I would 
like to hear back from the Secretary about whether or not we 
should include in the defense authorization language that bid 
savings are returned to the Treasury. Obviously, if you need 
more money, then you come back to us and ask for it. Generally 
speaking, I think you've been given it when there's been 
shortfalls. I don't think we've ever left the military hanging 
when a project has been more expensive than anticipated. In 
fact, we could have a hearing that lasted a long, long time 
talking about how many times we've come back and added more 
money when the estimates were too low.
    Dr. Robyn. Right.
    [The information referred to follows:]

    The Department uses bid savings to offset military construction 
general reductions, offset cost overruns in other projects, and fund 
contract modifications and options. Returning bid savings to the 
Treasury would negatively impact the Department's flexibility to 
address emergent requirements such as restoration projects necessitated 
by weather related damage, cost overruns on construction projects, and 
project cost increases due to necessary project modifications or 
contractor claims. Using bid savings as a source of funding prevents 
unnecessary delays and enables project completion on schedule to 
support mission requirements.
    Additionally, the reprogramming of military construction funds is a 
formal process that requires congressional approval through the House 
and Senate Appropriations Committees.

    Senator McCaskill. I just would like the taxpayers to get 
the benefit when the estimates are too high, as opposed to it 
being reprogrammed. I won't put any of you on the spot in that 
regard, but you should--fair warning that it's coming down the 
pike.
    Let me also talk about data centers and high-performance 
computing centers at Fort Meade--$860 million. DOD is building 
a similar facility in Utah, at a cost of more than $1.5 
billion, Secretary Hammack, in the budget request; $246 
million, this year, for a facility; and next year's request is 
supposed to be $175 million. I think we have to have computing 
power and data centers. Obviously, they have to be done right, 
because it's a critical component of our national defense. But, 
are we confident that we are building these facilities at a 
comparable cost that they might be built in the civilian 
sector? Are we confident that these aren't more expensive that 
we need or more duplicative than we need? Have we done some 
lessons learned from data centers that we've built? Are those 
being incorporated in the new versions of those same types of 
facilities?
    Ms. Hammack. A lot of questions there. Let me address, 
first of all, that we do have a data center consolidation plan, 
where we intend to reduce the number of data centers we have by 
over 50 percent; could be as much as 75 percent. Part of that 
is leveraging new technology. The new technology enables us to 
do more in a smaller square footage that uses less energy. 
That--those are the key objectives of our data center program.
    [The information referred to follows:]

    As mentioned earlier, the Army's Data Center Consolidation Plan 
focuses primarily on consolidating data centers to existing Defense 
Enterprise Computing Centers (DECCs) operated by the Defense 
Information Systems Agency (DISA). While the Army Data Center 
Consolidation Plan (ADCCP) does not include building more data centers, 
the Army did consult with industry and conduct an internal Base 
Realignment and Closure audit to capture lessons learned during 
consolidation. Key lessons incorporated in the ADCCP include centrally 
managing consolidation and eliminating redundant or legacy applications 
prior to consolidation.
    The Army's decision to consolidate primarily to DECCs resulted from 
consultation with both industry and the DISA.

    Senator McCaskill. Then I hope that you can provide the 
committee some guidance as to what the plan is in that regard. 
Because, I don't want to build new ones if we're getting ready 
to consolidate, unless we have already identified that we're 
consolidating existing ones into the new ones we're building.
    I have one related question, if you all will bear with me. 
Secretary Pfannenstiel, we have a data center in Kansas City 
for the Marine Corps. We learned, very recently, frankly, not 
exactly from the Marine Corps, that there were potential plans 
to move that center, and that it would involve building a new 
building in a different location. I am trying to figure out 
what the rationale is for that move, if it is something that is 
needs-based. Because, you can't make a move--and even if 
another location is offering to bill the money, they're doing 
that with public dollars. It all comes from taxpayers 
somewhere.
    Ms. Pfannenstiel. I understand. Madam Chairman, I will have 
to take that for the record and get back to you.
    [The information referred to follows:]

    The Marine Corps is reviewing a number of locations for an IT 
Center. A decision on whether or not to relocate the information 
technology organizations will be made in the spring 2012.
    The Marine Corps is conducting a risk analysis on the cost of 
moving to a different location that includes both equipment and 
personnel. It is uncertain at this time whether the current building, 
owned by the General Services Administration, is suitable as a 
permanent solution. We have learned that the building, while having 
good potential as a permanent facility, does have some possible 
environmental and safety issues. Along with selecting the best site 
available, it is equally important to maintain and hire a qualified 
information technology staff for all our programs now and into the 
future. Other factors we are considering are the facility cost, 
workforce relocation, transition costs, and suitability of a facility 
to meet information technology security and force protection 
requirements. We welcome any additional input you may have for this 
important decision.
    We share the concerns regarding the budgetary and fiscal challenges 
confronting the Department and are committed to ensuring the 
responsible stewardship of the taxpayers' funds.

    Senator McCaskill. Okay.
    Senator Ayotte.
    Senator Ayotte. Secretary Pfannenstiel, just a brief 
followup to a question that Senator Shaheen had asked having to 
do with the Portsmouth Naval Shipyard. Secretary Mabus had 
testified before the Armed Services Committee about the Navy 
looking at moving up the P266 project to improve maintenance 
for critical Navy readiness. But also, he identified that we 
might be able to save $8 billion to do that sooner, in fiscal 
year 2012. Right now it's in fiscal year 2015. So, I obviously, 
would ask your thought on that. The Secretary seemed very open 
to that. I think that makes sense, if we can--assuming we 
move--once we move forward with the full appropriation for this 
fiscal year--please know that we're very concerned about that, 
as well--but, that you would consider moving that up.
    Ms. Pfannenstiel. I did hear that exchange, and, as I 
remember, the conclusion was that he would go back and look at 
that and see if that makes sense. So, I'll certainly do that, 
Senator.
    [The information referred to follows:]

    The Navy will continue to assess all Military Construction (MILCON) 
requirements, to include the Portsmouth Naval Shipyard Structural Shop 
Consolidation Project (P266), in future budget requests as we balance 
risk across the Navy and provide the most capability within fiscal 
constraints.
    The Navy continues to invest in the Portsmouth Naval Shipyard 
infrastructure within today's fiscally constrained environment through 
Sustainment (ST), Restoration and Modernization (RM), and MILCON. In 
fiscal year 2010, the Navy executed eight operation and maintenance 
(O&M) (ST and RM) special projects at Portsmouth Naval Shipyard (PNSY) 
with a total value of $40.9 million. In fiscal year 2011, the Navy 
planned additional special projects, valued at $17 million, to repair 
and enable certification of Dry Dock #1. However, these projects are 
currently on hold due to the Continuing Resolution. Finally, in fiscal 
year 2012, the Navy plans to invest $100.3 million in four Energy 
special projects at PNSY.

    Senator Ayotte. Thank you very much.
    In the fiscal year 2012 budget, you have $100 million for 
MILCON in Bahrain. One of the issues I just hope you will 
address is, given the unrest there, whether it makes sense to 
invest that money right now, until we know what the outcome is 
going to be.
    Ms. Pfannenstiel. Clearly, there are a lot of events in the 
world that we're waiting for the outcome. But, Bahrain is a 
very important base for us. It is the home of the 5th Fleet, 
and remains a place that, for the foreseeable future certainly, 
will be important to us. So, the dollars that we have in the 
fiscal year 2012 proposal, I would strongly support, still.
    Senator Ayotte. Okay. I just wanted to check on that, given 
the current world situation.
    Thank you very much.
    Senator McCaskill. Senator Shaheen.
    Senator Shaheen. Yes, thank you. I just have one other 
question for Secretary Hammack, actually.
    I understand the Army is soon going to announce its plans 
for Europe, whether it will leave four BCTs in Europe, as 
proposed by the Quadrennial Defense Review, or scaled down, or 
do something in between. Can you give us any insights on what 
that new force structure in Europe is going to look like? 
Obviously, the decision is going to have a large impact on 
installations, not only in Europe, but here in the United 
States.
    Ms. Hammack. That decision has not been made yet. It is 
under consideration, and we expect an announcement to be made 
by the end of this month. At least, that is the current intent. 
But, our strategy--our investment strategy in Germany is one of 
consolidation. So, in my opening statement, I mentioned that we 
have closed 91 sites over the last 5 years, and returned 28,000 
acres to the German Government. In the next 5 years, we plan to 
close another 29 sites and return 7,000 acres to the German 
Government. The sites in which we have MILCON dollars requested 
are those that we have determined to be enduring missions, 
regardless of the stationing decisions. They are locations 
where we will continue to have a presence. We desperately need 
the money for that infrastructure and to support our 
servicemen.
    Senator Shaheen. Have we heard any concerns, either from 
the Germans or our other European allies, about what's being 
discussed?
    Ms. Hammack. Any stationing decision, especially when we 
are leaving a country, we have to consider the Status of Forces 
Agreement (SOFA). So, we are complying with any required 
disclosures in the SOFA.
    Senator Shaheen. So, have we heard any concerns, as a 
result of those SOFA, from any of our allies?
    Ms. Hammack. We have heard from them that, in some of the 
bases or sites that we are closing, they would wish we would 
stay, because we are an economic engine in the local area.
    In other areas, I won't say they're glad we're leaving, but 
they have identified alternate uses for the facilities, one of 
which is to use as a university campus, because it has 
dormitories and it has classroom buildings.
    So, we are working with the local area and with the German 
Government to determine what is appropriate on our stationing 
area.
    Senator Shaheen. To what extent will those concerns of our 
allies influence our decision? Or, how are they factored in?
    Ms. Hammack. The stationing decision in Europe has been 
discussed at several NATO meetings. So, it is something that is 
being discussed with all of our allies to ensure that we are 
adequately participating in the NATO alliances.
    Senator Shaheen. Thank you.
    Thank you, Madam Chair.
    Senator McCaskill. Thank you.
    I have a pet peeve about temporary structures. One of my 
very first lessons, when I came to the Senate in the Armed 
Services Committee, had to do with something that was called a 
temporary structure, that ended up being AMC, down at Fort 
Belvoir. I took a trip down to see this temporary structure. I 
can assure you, in Missouri, this would never be called a 
temporary structure. It looked like, to me, the temporary 
structure was used to avoid MILCON, that it was just an attempt 
to do an end-round around the long and difficult process of 
obtaining the MILCON authorization. In fact, I'm confident 
that's what it was--that it was an end around MILCON.
    Now, my first question is, do any of you know of a 
relocatable structure that has been relocated?
    Ms. Hammack. I guess I'll take that one, because I know we 
have a lot of relocatables. The relocatables have been used as 
flex space to compensate for restationing decisions when we are 
awaiting MILCON projects. So quite often they are called 
``swing space.'' I will venture to say that they haven't been 
relocated, but they have been auctioned off or disposed of, and 
the area in which they were located used for an alternate 
purpose. The fact that they did not have dense infrastructure 
as part of it made it easier to construct on that site.
    Because of our growth by 50,000 soldiers, we have had to 
use relocatable buildings, because we have not had the time or 
the ability to put together the required documents and requests 
for MILCON authorization. So, MILCON quite often follows a 
decision to utilize a relocatable building.
    Senator McCaskill. As an auditor, I'm pretty confident that 
if I had the time and the staff, I could figure out that 
relocatables cost our military a lot of money that we didn't 
need to spend. I understand your answer. But, what I'm most 
concerned about is fixing it and getting out of this very bad 
habit, that you can put up a great big building and somehow 
have a fantasy that it's temporary.
    Even worse, the building that really got my eyes wide open 
as to how this could possibly work, we were leasing it, and 
guess what we ended up doing after we leased it for 4 or 5 
years? We bought it. So, let me see if I get this straight. It 
wasn't temporary. We got around MILCON. We put it up. We paid a 
really high amount to lease it for a number of years, and then 
we turned around and bought it. I would have liked that deal on 
the other end.
    The GAO report came out and said there was not a proper 
means to collect and maintain consistent data on the number and 
cost of relocatables. The year after that, they doubled. We 
still don't have some kind of plan that can reassure this 
committee and--in our oversight function, that relocatables are 
a good value for the taxpayers.
    If we've made MILCON too hard, then let's figure out a way 
to make MILCON easier. But, let's don't waste a lot of money 
because we are going to fill in the gap until we get the MILCON 
money. It's almost like the bureaucracy has assured that we're 
going to pay twice as much, or a third more than we need to, 
for the space that we need to construct for our military 
services.
    So, I will await, with interest, a report from all of you 
about relocatables that have been relocated and any analysis 
that you have ever done about what the real cost of 
relocatables have been and whether or not they have been leased 
and eventually purchased. I'm going to continue to stay on 
this. So, you just, like, got to know, when you're getting 
ready to do one of these, ``Okay. She's going to yell about 
this.'' Because, I really do think that this is an area that 
we've wasted a lot of money.
    [The information referred to follows:]

    Dr. Robyn. The Military Services acquire relocatable facilities to 
meet viable needs that cannot be met in a timely fashion through 
military construction. Relocatable facilities are used to support 
reorganizing or relocating units until their permanent facilities are 
available, provide swing space for buildings undergoing renovation, and 
accommodate surge requirements.
    Our challenge is to ensure that relocatable facilities are acquired 
only when absolutely necessary, and that they are properly disposed of 
when they are no longer needed to meet their original purpose. My staff 
is working on improving our oversight of the use of relocatable 
facilities through the issuance of clear guidance, and the 
establishment of standard reporting requirements. The Department is 
nearing completion of a report that will provide additional detail on 
the number of relocatable facilities, where they are located, and the 
plan to replace or eliminate them.
    Ms. Hammack. In the Army, the authority to acquire relocatable 
buildings has been delegated to the Senior Commanders of HQ, 
Installation Management Command, Army Materiel Command, U.S. Army Corps 
of Engineers, Medical Command, Strategic Missile Defense Command, U.S. 
Army Reserve, and Army National Guard. These organizations have 
installation or garrison responsibilities.
    Since 2004, the Army has spent over $1 billion acquiring 
relocatable buildings, providing about 10 million square feet of 
facility space. As of the fiscal year 2012 President's budget request, 
permanent military construction has been completed or is in progress, 
to replace 1,010 relocatables (approximately 33 percent of the 
inventory). Another 582 relocatables have replacement construction 
programmed in fiscal year 2012-2016. This will result in approximately 
52 percent of the Army's inventory of relocatables being replaced with 
permanent facilities by fiscal year 2016.
    The balance of relocatable space is being examined to match 
permanent requirements with permanent facilities. The Army is 
aggressively working to ensure that these replacement projects receive 
the highest priority and that construction is completed before the 6 
year term use for relocatable facilities expires.
    Additionally, relocatable facilities supporting temporary missions 
(i.e. transitory peak military missions, deployments, military 
contingency operations, disaster relief requirements, and fielding 
exercises) do not require replacement military construction and will be 
disposed of at the expiration of the approved relocatable period. The 
Army is improving the management of relocatable buildings through 
updating its regulation, increased leadership focus, and a bottoms-up 
review on its utilization.
    Ms. Pfannenstiel. The Navy's policy on the procurement, lease, and 
use of relocatable buildings, OPNAVINST 11010.33C, states ``the use of 
relocatable buildings is not an acceptable means of providing 
facilities for long-term needs.''
    The Navy remains committed to minimizing the use of relocatable 
buildings. Navy requires additional time to conduct a full analysis of 
the inventory, including purchase and lease costs.
    Mr. Yonkers. Relocatable/Temporary Use Facility information is 
provided by the Air Force Major Commands on an annual basis. The report 
includes cost data, whether the facility is leased or owned, and the 
proposed future use or disposal plan for each facility.
    As of the 2010 Annual Comprehensive Temporary Use Facilities 
Report, the Air Force is tracking 506 relocatable/temporary facilities. 
62 facilities were removed or demolished in 2010. Of those, 52 were 
owned, 9 were leased, and 1 is a facility that has been re-leased to 
another customer in-place. The total costs reported in the 2010 report 
are $2.7 million for the owned facilities, with an average cost of 
$774,000; $1.3 million for the leased facilities, with an average cost 
of $140,000. There were no reported conversions to real property; 
however, 13 owned facilities that cost $13.8 million are identified for 
future conversion.
    Information consolidated from 2006 through 2009 reveal that 126 
temporary facilities have been removed or demolished. 84 were owned at 
cost of $2.1 million ($101,000 average), 41 were leased at a cost of 
$13.2 million ($306,000 average), 29 facilities that cost $4.0 million 
were converted to real property; all were owned, not leased prior to 
conversion. Although minor trends can be identified from year to year, 
the only overall general trend that can be inferred is an increase in 
the number of temporary facilities removed or demolished per year. The 
cost data, as collected, does not support any overall trends due to the 
widely varying type, size, and required length of service for each 
individual facility.

    Dr. Robyn. Senator?
    Senator McCaskill. Yes.
    Dr. Robyn. Could I just add to your list of negatives about 
relocatables? They're real energy hogs.
    Senator McCaskill. Yes. There's another good one. Energy 
hogs.
    Let me, finally--the last question I have is for Secretary 
Yonkers about a phase IV of the dormitory complex in Qatar. 
It's my understanding that's rotational, and it's 4,900 rooms 
billeted for 6,200 folks, which means that the majority of the 
people will be in rooms by themselves. We have a number of 
airmen living in inadequate housing on a permanent basis that 
are unaccompanied, I need to hear from the Air Force about the 
policy to build housing to a 1+1 standard. Is this a change?
    Mr. Yonkers. Madam Chairman, you are catching me really 
flatfooted on this one.
    Senator McCaskill. Okay.
    Mr. Yonkers. I'll take it for the record.
    [The information referred to follows:]

    The dormitory standard used in Qatar is the U.S. Central Command 
(CENTCOM) standard--that is, rotational forces are billeted at a 2+2 
density and permanent party forces are billeted at 1+1. The total room 
requirement is based on enduring steady state requirements, post 
Operations Enduring Freedom and New Dawn. The planning factor is 2+2 
configuration for 3,000 rotational personnel, 1+1 configuration for 
3,000 steady state permanent party personnel, and 1+0 for commanders 
and chiefs. During the current contingency surge, many rooms are 
occupied 2+2.
    It is important to note that we validate the requirements at Al 
Udeid in the context of the long-term global posture dictated by the 
Commander, CENTCOM, while noting that the Air Force has conducted 
continuous operations in this region since the Gulf War in 1990/1991. 
So while we use the term rotational above, in reflection of the nature 
of the Air Expeditionary Task Forces (AETFs) that deploy to Al Udeid, 
we build support facilities for these AETFs with as much flexibility as 
possible. The Air Force has been deploying to the Mideast, and to Al 
Udeid in particular, for a very long time, and throughout that history 
we have surged many times in response to regional challenges. The key 
flexibility inherent in the 4,900-room Blatchford-Preston Complex is 
the variety of room configurations pointed out in your question. The 
4,900 rooms support the global long-term posture of 6,200 Air Force 
personnel and negate the need for costly continual recapitalization of 
temporary facilities. Those same 4,900 rooms also allow the Air Force 
to quickly surge to different room configurations handling ever larger 
number of personnel--very easily the Air Force could increase the 
number of personnel housed in a 2+2 configuration from the 3,000 above 
and increasing the overall occupancy in the complex significantly. This 
flexibility enables much more rapid response to the ever shifting 
strategic environment.
    Bottom line--we're building long-term facilities based on the 
mandated global posture . . . but we are ensuring the room sizes and 
infrastructure provided are as flexible as they can be.

    Senator McCaskill. That's great.
    Mr. Yonkers. But one-plus-one is sort of the standard for 
the Air Force. I do not know how that works out over in Qatar.
    Senator McCaskill. Okay. If you would get back to us on 
that, that would be terrific.
    I have a lot of other questions here. We will ask them for 
the record. I think the staff gave me a lot of choices here, 
and they all looked good to me, along with some that I added 
myself.
    I must admit that I am--the temporary-building thing had my 
attention very early in my career on this committee, and it has 
kept my attention, because I think it's symbolic of some of the 
issues that we have to address as we try to shrink the amount 
of money we spend, but not the quality of the military that we 
are putting on the field.
    I want to certainly give both our Senators here another 
opportunity to question, if you have anything else.
    Senator Ayotte. No, thank you, Madam Chairman.
    I would just add that I have a whole host of questions that 
I'm going to submit for the record, as well.
    So, I appreciate what all of you are doing, and your 
responses.
    Thank you.
    Senator McCaskill. The final thing I will say is that, as 
you all probably know, I have never participated in the 
earmarking process. As chairman of this subcommittee, I know 
that the entire Congress has adopted that position, for now. I 
don't know how long it will last. Maybe we've turned a corner. 
I'm hopeful, but we might not have. There are all kinds of 
assumptions that are made. Sometimes there have been budgets 
that have been submitted, knowing that there were going to be 
certain earmarks that were going to be added, and therefore, 
there was no reason for DOD to put it in the budget. Everyone 
was confident that that would get marked on as a plus-up or an 
add-on to the military's budget. Of course, we cut things to 
find room for earmarks in the Defense authorization bill and 
other places in Congress.
    So, we're going to still try to do what we've done in the 
past, and that is, find savings. It will be my goal that those 
savings go back to the Treasury. But, I did want to at least 
notify everyone that, as long as I have the honor of chairing 
this subcommittee, this subcommittee will not be turning in an 
earmarked document to the full committee.
    Dr. Robyn. Could I say--first of all, thank you very much. 
I think all of us are really excited about working with you in 
this new environment.
    I want to say something that hasn't come up. I think we all 
are also sometimes surprised at how expensive it is to do 
things, how much we have to spend to--on this--in this part of 
DOD. But, this is--we're--this is the part of DOD that, in many 
parts of it, can run more like a business. Jackie and I are 
economists; we are continually surprised at DOD's lack of use 
of the leverage of the broader commercial economy. The single 
most significant thing I think we've done in this area is to 
privatize family housing. The service is chronically 
underinvested in it. We had 200,000 units of inadequate private 
family housing. We privatized it, immediately changed the 
incentives, and it's a tremendous success story--$3 billion of 
investment by DOD, $30 billion worth of private housing, with 
the owners having the incentive to maintain it.
    So, with your help, we want to do more of that kind of 
thing. When you do competitive outsourcing, which we can no 
longer do, you create losers. So with your help, I think we can 
do this. But, I think it requires more competition, more 
outsourcing, more privatization. I think this is the climate in 
which to take advantage of that. But, it does require your 
help.
    Thank you.
    Senator McCaskill. I think maybe we could start with the 
data centers.
    Thank you all for being here today. We'll look forward to 
working with you throughout the year.
    [Questions for the record with answers supplied follow:]

            Questions Submitted by Senator Claire McCaskill

             LANDSTUHL REGIONAL MEDICAL CENTER REPLACEMENT

    1. Senator McCaskill. Dr. Robyn, Secretary Hammack, Secretary 
Pfannenstiel, and Secretary Yonkers, this year's budget request 
contains the first increment of funding for a hospital at Rhine 
Ordinance Barracks to replace Landstuhl Regional Medical Center. The 
project would be authorized at $1.196 billion. According to the 
justification documents the Department of Defense (DOD) has provided, 
this facility will provide direct medical services to 31,000 enrolled 
beneficiaries and be the contingency casualty evacuation location for 
U.S. European Command (EUCOM), U.S. Central Command (CENTCOM), and U.S. 
Africa Command (AFRICOM). I understand our desire to build our medical 
facilities to a world-class standard, but do we really need a $1.2 
billion hospital?
    Dr. Robyn. This project consolidates Landstuhl and Ramstein medical 
capabilities into one convenient location 8 miles closer to Ramstein 
Air Base in the Kaiserslautern community. This location reduces wounded 
warrior casualty transit times to medical care from as much as 45 
minutes across public roads to less than 5 minutes on DOD controlled 
roads.
    The size and cost of the Kaiserslautern replacement medical 
facility is the minimum necessary to meet peacetime requirements while 
allowing the flexibility to meet contingency surge demands. In addition 
to the 31,000 beneficiaries supported in the immediate Kaiserslautern 
Military Community, this facility serves a catchment population (within 
a 55-mile radius) of 73,000 beneficiaries, and specialty medical 
referrals coming from another 172,000 beneficiaries located across 
EUCOM.
    The facility will comply with world-class standards and evidence-
based design principles. The hospital's size and cost are consistent 
with newly constructed peer facilities with similar patient loads and 
requirements. The facility will include built-in capabilities to meet 
its peacetime beneficiary demands and smoothly transition to address 
contingency operations when necessary.
    The replacement project included in the fiscal year 2012 
President's budget is a cost-effective solution to the challenges and 
risks facing our servicemembers and their families. The sizeable 
peacetime beneficiary population that would rely on this facility will 
fully utilize its capabilities and capacity.
    Ms. Hammack. A military medical facility in the Kaiserslautern area 
is a strategic national asset that is precisely placed to meet the 
expectations of our citizens to provide the highest quality healthcare 
for their sons, daughters, and spouses. This recapitalized medical 
center will be perfectly located at the premier airbase supporting 
three theaters, a catchment population (within a 55-mile radius) of 
73,000 beneficiaries, and specialty medical referrals coming from 
another 172,000 beneficiaries located in the EUCOM area.
    The current facilities, created from 1950-vintage buildings, have 
served us well but are now in failing condition and unable to meet the 
demands of modern medicine. We clearly need to replace our military 
healthcare facilities in the Kaiserslautern Area. This project 
consolidates Landstuhl and Ramstein medical requirements into one 
location 8 miles closer to Ramstein Air Base. This location reduces 
wounded warrior casualty transit times to medical care from as much as 
45 minutes across public roads to less than 5 minutes on DOD controlled 
roads. The new medical facility will continue to provide a critical, 
enduring platform for maintaining the ready medical force that is 
essential to delivering the highest possible quality of care to our 
military worldwide.
    The size and cost of the Kaiserslautern replacement medical 
facility is the minimum necessary to meet peacetime requirements while 
allowing the flexibility to meet contingency surge demands. The 
facility will comply with world-class standards and evidence-based 
design principles. The hospital's size and cost are consistent with 
newly constructed peer facilities with similar patient loads and 
requirements. The facility will include built-in capabilities to meet 
its peacetime beneficiary demands and smoothly transition to address 
contingency operations when necessary.
    The replacement project included in the fiscal year 2012 
President's budget is a cost-effective solution to the challenges and 
risks facing our servicemembers and their families.
    Ms. Pfannenstiel. The Department of the Navy (DON) is not directly 
responsible for this issue, and therefore DON does not have an opinion 
or response relating to this issue.
    Mr. Yonkers. A military medical facility in the Kaiserslautern area 
is a strategic national asset that is precisely placed to meet the 
expectations of our citizens to provide the highest quality healthcare 
for their sons, daughters, and spouses. This recapitalized medical 
center will be perfectly located at the premier airbase supporting 3 
theaters, a catchment population (within a 55-mile radius) of 73,000 
beneficiaries, and specialty medical referrals coming from another 
172,000 beneficiaries located in the EUCOM area.
    The current facilities, created from 1950-vintage buildings, have 
served us well but are now too antiquated and inefficient to meet the 
demands of modern medicine. We clearly need to replace our military 
healthcare facilities in the Kaiserslautern Area. This project 
consolidates Landstuhl and Ramstein medical capabilities into one 
convenient location 8 miles closer to Ramstein Air Base. This location 
reduces wounded warrior casualty transit times to medical care from as 
much as 45 minutes across public roads to less than 5 minutes on DOD 
controlled roads. The new medical facility will continue to provide a 
critical, enduring platform for maintaining the ready medical force 
that is essential to delivering the highest possible quality of care to 
our military worldwide.
    The size and cost of the Kaiserslautern replacement medical 
facility is the minimum necessary to meet peacetime requirements while 
allowing the flexibility to meet contingency surge demands. The 
facility will comply with world-class standards and evidence-based 
design principles. The hospital's size and cost are consistent with 
newly constructed peer facilities with similar patient loads and 
requirements. The facility will include built-in capabilities to meet 
its peacetime beneficiary demands and smoothly transition to address 
contingency operations when necessary.
    The replacement project included in the fiscal year 2012 
President's budget is a cost-effective solution to the challenges and 
risks facing our servicemembers and their families. The sizeable 
peacetime beneficiary population that would rely on this facility will 
fully utilize its capabilities and capacity.

    2. Senator McCaskill. Dr. Robyn, Secretary Hammack, Secretary 
Pfannenstiel, and Secretary Yonkers, is this hospital properly sized 
for the population it will serve with a capacity to surge during 
contingency operations, or is it sized to include its surge 
requirements as part of its base standard?
    Dr. Robyn. The hospital replacement project included in the fiscal 
year 2012 President's budget is sized to serve the peacetime 
beneficiary population with the built-in ability for a limited 
expansion to address surge from medium intensity conflicts similar to 
the current Overseas Contingency Operations.
    For example, 50 of the larger medical/surgical single patient rooms 
incorporate additional headwalls (electrical, medical gases, plumbing) 
to allow these rooms to be readily converted from single to dual 
patient use during a contingency surge. This approach provides a cost-
effective, rapid expansion capability to address emergency surge 
requirements without the need to build a stand-alone surge ward.
    Ms. Hammack. The Department has right sized the Kaiserslautern 
replacement medical facility to ensure that it is a cost effective, 
flexible solution that meets both peacetime beneficiary and warfighter 
needs. The hospital has been sized as a result of a careful analysis of 
the peacetime patient workload; detailed assessment of the new facility 
mission, beneficiaries, and contingency demands; and consideration of 
clinical practice changes and world-class principals that provide the 
best clinical outcomes for costs incurred.
    The hospital project is scoped to meet requirements of the 
peacetime population it will serve. The hospital will include 122 
inpatient beds that will address the peacetime demand, including an 
increase in the number of behavioral health beds to accommodate the 
increased workload in this clinical area. The hospital will include 198 
exam rooms to meet DOD's standard of 2 exam rooms for each full-time 
clinical staff equivalent that will provide outpatient care in the 
consolidated facility. These capacities are slightly less than the 
current capacities of 136 inpatient beds and 205 exams rooms.
    The hospital design provides flexibility to meet surge 
requirements. For example, 50 of the larger medical/surgical single 
patient rooms incorporate additional headwalls (electrical, medical 
gases, plumbing) to allow these rooms to be readily converted from 
single to dual patient use during a contingency surge. This approach 
provides a cost-effective, rapid expansion capability to address 
emergency surge requirements without the need to build a stand-alone 
surge ward.
    The replacement project included in the fiscal year 2012 
President's budget is sized to serve the peacetime beneficiary 
population with the built-in ability for a limited expansion to address 
surge from medium intensity conflicts similar to the current Overseas 
Contingency Operations.
    Ms. Pfannenstiel. DON is not directly responsible for this issue, 
and therefore DON does not have an opinion or response relating to this 
issue.
    Mr. Yonkers. The Kaiserslautern replacement medical facility 
project included in the fiscal year 2012 President's budget is sized to 
serve the peacetime beneficiary population with the built-in ability 
for a limited expansion to address surge from medium intensity 
conflicts similar to the current Overseas Contingency Operations.
    The Department has right-sized the new facility to ensure that it 
is a cost-effective, flexible solution that meets both peacetime 
beneficiary and warfighter needs. The hospital has been sized as a 
result of a careful analysis of the peacetime patient workload; 
detailed assessment of the new facility mission, beneficiaries, and 
contingency demands; and consideration of clinical practice changes and 
world-class principles that provide the best clinical outcomes for 
costs incurred.
    The hospital will include 122 inpatient beds that will address the 
peacetime demand, including an increase in the number of behavioral 
health beds to accommodate the increased workload in this clinical 
area. The hospital will include 198 exam rooms to meet DOD's standard 
of 2 exam rooms for each full-time clinical staff equivalent that will 
provide outpatient care in the consolidated facility.
    The hospital design provides flexibility to meet surge 
requirements. For example, 50 of the larger medical/surgical single 
patient rooms incorporate additional headwalls (electrical, medical 
gases, plumbing) to allow these rooms to be readily converted from 
single to dual patient use during a contingency surge. This approach 
provides a cost-effective, rapid expansion capability to address 
emergency surge requirements without the need to build a stand-alone 
surge ward.

               OKINAWA/GUAM--FUTENMA REPLACEMENT FACILITY

    3. Senator McCaskill. Secretary Pfannenstiel, there has been a 
consistent linkage between construction of the Futenma Replacement 
Facility (FRF) and the marines moving from Okinawa to Guam. The marines 
will not begin moving until tangible progress has been made on the FRF. 
DOD has consistently defined tangible progress on the FRF as a 
signature by the Governor of Okinawa on a landfill permit needed to 
begin work on the runway. Does DOD still consider tangible progress to 
be the Governor of Okinawa's signature on the landfill permit?
    Ms. Pfannenstiel. We see tangible progress on the FRF, not as a 
single specific event, but rather as a series of steps taken roughly in 
parallel between Japan and the United States, as spelled out in our 
bilateral understandings on the realignment. As the Government of Japan 
makes progress on the FRF, the United States will take associated steps 
to move forward on Guam. There are a number of different indicators of 
this progress, starting with the decision on the runway configuration 
that we expect at the upcoming two-plus-two meeting with Japan, the 
issuance of the landfill permit, the construction of the sea wall, and 
progress on the landfill itself.
    An essential point of our realignment understanding with Japan is 
that preparations for facilities on Guam need to begin well in advance 
of the actual construction of the replacement facility at Camp Schwab. 
It is necessary to ensure that when we are satisfied with the progress 
Japan has made on the FRF, suitable facilities will be available on 
Guam to allow the phased relocation of marines from Okinawa, such that 
any relocation can be sequenced to maintain unit cohesion and 
operational readiness.

    4. Senator McCaskill. Secretary Pfannenstiel, in a best-case 
scenario, what is the time line for signature on the landfill permit?
    Ms. Pfannenstiel. It is my understanding that there may be a 
requirement for the Government of Japan to conduct some additional 
environmental analysis after a decision on the runway configuration for 
the FRF. We are encouraging the Government of Japan to take necessary 
steps to expedite the required environmental assessment work as soon as 
possible after the decision is made and to begin necessary political 
consultations so that they can gain the approval of the Okinawa 
governor for the landfill permit. This is a timeline that is ultimately 
worked out between those two parties.

                     BRIGADE COMBAT TEAMS IN EUROPE

    5. Senator McCaskill. Dr. Robyn, Secretary Hammack, Secretary 
Pfannenstiel, and Secretary Yonkers, with the end of the Cold War, we 
have seen a significant drawdown of U.S. forces in Europe. From a high 
point of approximately 331,000 in 1980 to approximately 116,200 in 
1999, we now have some 79,000 troops stationed in Europe, the bulk of 
which are in Germany, 53,900. From fiscal years 2004 to 2009, the Army 
spent approximately $1.3 billion to implement its infrastructure 
transformation and consolidation plans in Europe, the vast majority of 
which consisted of military construction (MILCON), $957.0 million.
    We were informed that on March 17, 2011, DOD would likely announce 
how many Brigade Combat Teams (BCT) it plans to base in EUCOM. DOD has 
informed this committee that the cumulative cost of having some of 
those BCTs in the United States versus keeping them in Europe is a wash 
over fiscal years 2012 to 2021. A September 2010 Government 
Accountability Office (GAO) study, however, found that the cumulative 
savings from redeploying two BCTs to the United States would be between 
$1 and $2 billion in incremental costs from fiscal years 2012 to 2021 
assuming no rotational costs. Can you please explain this discrepancy?
    Dr. Robyn. Over time the Army has improved the original cost 
estimates by gathering more detailed information and costing data. The 
cost estimates reflected in the GAO Report on Defense Planning reflect 
return dates of fiscal year 2012 for the 170th BCT and fiscal year 2013 
for the 172nd BCT. The Army cost estimates represent a more detailed 
analysis of the cost drivers for European Transformation than 
previously addressed. As stated in the analysis and the report, it is 
more expensive to operate outside of the United States due to increased 
base operations costs and increased military personnel allowances. In 
addition, while the GAO Report assumed no rotational costs, subsequent 
DOD analysis considered the cost of rotational forces that might be 
necessary to meet EUCOM Commander's requested theater mission 
requirements. Generally, rotating forces to meet overseas mission 
requirements off-sets savings derived from having brought those forward 
deployed forces back to CONUS.
    The Secretary of Defense announced in January 2011 that no action 
will occur until fiscal year 2015; the projected cost savings will be 
reduced during the 2012-2021 period as a result of the shifting 
timeline.
    Ms. Hammack. Over time the Army has improved the original cost 
estimates by gathering more detailed information and costing data. The 
cost estimates reflected in the GAO Report on Defense Planning reflect 
return dates of fiscal year 2012 for the 170th BCT and fiscal year 2013 
for the 172nd BCT. The cost estimates reflected in the report represent 
a more detailed analysis of the cost drivers for European 
Transformation than previously addressed. As stated in the analysis and 
the report, it is more expensive to operate outside of the United 
States due to increased base operations costs; increased military 
personnel allowances; and students costs. The $2 billion cost over a 
10-year period does not include the funding of rotational forces to 
meet EUCOM Commander's requested theater mission requirements. To date, 
the Army has not been able to source rotational forces. The majority 
stateside cost driver remains the MILCON required to house returning 
units.
    The Secretary of Defense announced in January 2011 that no action 
on BCTs in Europe will occur until fiscal year 2015; the projected cost 
savings will be reduced during the 2012-2021 period as a result of the 
shifting timeline.
    Ms. Pfannenstiel. DON is not directly responsible for this issue, 
and therefore DON does not have an opinion or response relating to this 
issue.
    Mr. Yonkers. This is an Army focused question and the response 
falls outside the expertise and portfolio of Air Force directorate of 
installations, environment, and logistics. Recommend question be 
forwarded to DOD or the Army.

    6. Senator McCaskill. Dr. Robyn, Secretary Hammack, Secretary 
Pfannenstiel, and Secretary Yonkers, if the ultimate decision is to 
leave three BCTs in Europe, will the fourth BCT be eliminated or will 
it be restationed in the United States?
    Dr. Robyn. DOD has not yet decided whether to eliminate this BCT or 
restation it. The Secretary directed a reduction in the Army's end-
strength of approximately 27,000 soldiers beginning in 2015, when we 
anticipate a reduced strain on the force from our current operations. 
In light of this decision and the recent Secretary of Defense 
announcement to retain three BCTs in Europe beginning in 2015, the Army 
will conduct a thorough analysis over the next year to determine the 
overall makeup of the force. Stationing decisions will be addressed 
along with other force structure actions at the conclusion of this 
year's Total Army Analysis.
    Ms. Hammack. The Secretary directed a reduction in the Army's end 
strength of approximately 27,000 soldiers beginning in 2015, when we 
anticipate a reduced strain on the force from our current operations. 
In light of this decision and the recent Secretary of Defense 
announcement to retain three BCTs in Europe beginning in 2015, the Army 
will conduct a thorough analysis over the next year to determine the 
overall makeup of the force. Stationing decisions will be addressed 
along with other force structure actions at the conclusion of this 
year's Total Army Analysis.
    Ms. Pfannenstiel. DON is not directly responsible for this issue, 
and therefore DON does not have an opinion or response relating to this 
issue.
    Mr. Yonkers. This is an Army focused question and the response 
falls outside the expertise and portfolio of Air Force directorate of 
installations, environment, and logistics. Recommend question be 
forwarded to DOD or the Army.

    7. Senator McCaskill. Dr. Robyn, Secretary Hammack, Secretary 
Pfannenstiel, and Secretary Yonkers, what is the change in funding 
levels between DOD's original decision to leave two BCTs in Europe and 
the final decision on the number of BCTs remaining in Europe?
    Dr. Robyn. First, DOD will incur a cost increase of $568 million 
associated with retaining four brigades in Europe through fiscal year 
2015 as the 170th BCT and the 172nd BCT were scheduled to return in 
fiscal year 2012 and fiscal year 2013, respectively. This increase is 
mostly associated with military pay allowances, base operations, and 
schools. Second, DOD will realize long-term cost savings of $60 
million annually associated with retaining three brigades in Europe, 
compared to $162 million in annual cost savings under the plan to 
leave two BCTs in Europe.
    Ms. Hammack. In fiscal year 2012, Army is funded to retain the two 
BCTs in Europe. There are no MILCON dollars in the current program 
associated with the two BCTs. DOD will incur increased costs associated 
with retaining four brigades in Europe through fiscal year 2015 as the 
170th BCT and the 172nd BCT were scheduled to return in fiscal year 
2012 and fiscal year 2013, respectively. Increases in costs are mostly 
associated with military pay allowances, base operations, and schools. 
A decision to maintain three BCTs in Europe as a desired end-state will 
be less costly than the current four BCTs.
    Ms. Pfannenstiel. DON is not directly responsible for this issue, 
and therefore DON does not have an opinion or response relating to this 
issue.
    Mr. Yonkers. This is an Army focused question and the response 
falls outside the expertise and portfolio of Air Force directorate of 
installations, environment, and logistics. Recommend question be 
forwarded to DOD or the Army.

    8. Senator McCaskill. Dr. Robyn, Secretary Hammack, Secretary 
Pfannenstiel, and Secretary Yonkers, how much has it cost us to 
postpone this decision for so long?
    Dr. Robyn. DOD will incur a cost increase of $568 million 
associated with retaining four brigades in Europe through fiscal year 
2015 as the 170th BCT and the 172nd BCT were scheduled to return in 
fiscal year 2012 and fiscal year 2013, respectively.
    Ms. Hammack. It will cost the Department an additional $138 
million/year for fiscal year 2014-2015 to retain the fourth brigade in 
Germany. This amount does not consider any required overseas or 
stateside MILCON and is not offset by the cost of rotating forces to 
Germany.
    Ms. Pfannenstiel. DON is not directly responsible for this issue, 
and therefore DON does not have an opinion or response relating to this 
issue.
    Mr. Yonkers. This is an Army focused question and the response 
falls outside the expertise and portfolio of Air Force directorate of 
installations, environment, and logistics. Recommend question be 
forwarded to DOD or the Army.

                                MAYPORT

    9. Senator McCaskill. Secretary Pfannenstiel, the Navy recently 
announced its intention to homeport a nuclear powered aircraft carrier 
in Mayport. The Future Years Defense Plan (FYDP) contains $412.6 
million in MILCON funds to make this move happen. The first significant 
project, $14.998 million for road improvements, is contained in this 
year's budget request. In these resource-constrained times, can you 
explain to me why the Navy intends to spend $412.6 million to homeport 
an aircraft carrier in Florida?
    Ms. Pfannenstiel. Strategic dispersal of aircraft carriers 
increases our operational flexibility and mitigates the risk posed by 
manmade or natural disasters to these forces and our critical nuclear 
training and maintenance infrastructure. West Coast carriers are 
dispersed among three CONUS and one Forward Deployed Naval Force 
homeports. Carrier maintenance and repair infrastructure exists in two 
West Coast locations. The East Coast carriers are not currently 
dispersed; all East Coast carriers and support infrastructure are 
consolidated within a 15-mile radius in the Hampton Roads area, placing 
them at strategic risk.
    The decision to upgrade Naval Station Mayport's operational, 
maintenance, and support facilities to homeport a nuclear-powered 
aircraft carrier will mitigate risk and ensure the Navy can meet its 
national defense obligations should Navy operations in Hampton Roads be 
disrupted. The Navy's budget submission includes $489 million in fiscal 
years 2010-2016 for the projects necessary to homeport a carrier in 
Mayport and represents the best balance of funding amongst all the 
Navy's priorities.

                        AL UDEID AIR BASE, QATAR

    10. Senator McCaskill. Secretary Yonkers, this year's budget 
request contains $37.0 million for phase four of the Blatchford-Preston 
dormitory complex at Al Udeid Air Base, Qatar. It is my understanding 
that this base is an enduring forward operating site (FOS). This means 
that all troops are stationed at Al Udeid on a rotational basis.
    It is my understanding that the stated Air Force requirement is for 
25 dormitories containing 4,900 rooms with billeting for 6,200 
personnel. I assume this means that a majority of personnel will be put 
in rooms by themselves, a 1+1 standard. Is it the Air Force's policy to 
build housing to a 1+1 standard for rotational forces?
    Mr. Yonkers. The dormitory standard used in Qatar is the CENTCOM 
standard--that is, rotational forces are billeted at a 2+2 density and 
permanent party forces are billeted at 1+1. The total room requirement 
is based on enduring steady state requirements, post Operations 
Enduring Freedom and New Dawn. The planning factor is 2+2 configuration 
for 3,000 rotational personnel, 1+1 configuration for 3,000 steady 
state permanent party personnel, and 1+0 for commanders and chiefs. 
During the current contingency surge, many rooms are occupied 2+2.
    It is important to note that we validate the requirements at Al 
Udeid in the context of the long-term global posture dictated by the 
Commander, CENTCOM, while noting that the Air Force has conducted 
continuous operations in this region since the Gulf War in 1990/1991. 
So while we use the term rotational above, in reflection of the nature 
of the Air Expeditionary Task Forces that deploy to Al Udeid, we build 
support facilities for these AETFs with as much flexibility as 
possible. The Air Force has been deploying to the Mideast, and to Al 
Udeid in particular, for a very long time, and throughout that history 
we have surged many times in response to regional challenges. The key 
flexibility inherent in the 4,900-room Blatchford-Preston Complex is 
the variety of room configurations pointed out in your question. The 
4,900 rooms support the global long-term posture of 6,200 Air Force 
personnel and negate the need for costly continual recapitalization of 
temporary facilities. Those same 4,900 rooms also allow the Air Force 
to quickly surge to different room configurations handling ever larger 
number of personnel--very easily the Air Force could increase the 
number of personnel housed in a 2+2 configuration from the 3,000 above 
and increasing the overall occupancy in the complex significantly. This 
flexibility enables much more rapid response to the ever shifting 
strategic environment.
    Bottom line--we're building long-term facilities based on the 
mandated global posture.but we are ensuring that the rooms sizes and 
infrastructure provided are as flexible as they can be.

                      AIR FORCE NUCLEAR ENTERPRISE

    11. Senator McCaskill. Secretary Yonkers, in your testimony on the 
Air Force's nuclear mission you mention that ``Air Force 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.'' Indeed, the 
first tranche of money, $75.6 million, is included in the fiscal year 
2012 budget request. Can you please provide a list of projects 
necessary to complete this significant modernization and replacement of 
facilities needed to support this mission?
    Mr. Yonkers. As stated in my testimony, the Air Force has recently 
completed three enterprise-wide assessments of facilities supporting 
the nuclear enterprise. These included a Weapons Storage Area (WSA) 
Assessment, a Nuclear Related Facilities (NRF) Assessment Report 
(everything that is not a WSA, launch facility or missile alert 
facility) and also the Life Extension Assessment Program to evaluate 
Launch Control facilities. We are currently analyzing the issues 
presented in that data to identify, plan and program the facility 
solutions that best meet the mission needs, i.e. is it better to 
repair/upgrade a certain facility or to replace it with a new facility. 
This analysis and resultant prioritization of projects will form the 
basis for a list of requirements that will be appropriately resourced 
in the future by the Air Force. It is important to note that many of 
the solutions will be SRM funded and therefore will not be identified 
individually in our FYDP.
    To clarify, the $75.6 million in fiscal year 2012 MILCON (four 
projects) supports the Nuclear Enterprise, but only the fiscal year 
2012 WSA Security Control facility at Whiteman AFB, MO supports the 
recapitalization of existing nuclear infrastructure. The remaining 
three fiscal year 2012 projects support the B-52 Beddown at Minot AFB, 
ND and the AF Nuclear Weapons Center at Kirtland AFB, NM.

    12. Senator McCaskill. Secretary Yonkers, how many of these 
requirements are planned in the current FYDP?
    Mr. Yonkers. None of the requirements resulting from the facility 
assessments are included in the current FYDP as these requirements were 
not indentified prior to the development of fiscal year 2012-2016 FYPD. 
We have just completed the first phase of the Nuclear Enterprise-wide 
facility assessments. This phase has identified the facilities 
deficiency such as condition, safety, security, reliability, etc. The 
next phase will provide a road map to fix these deficiencies. We are in 
the process of developing a prioritized list of facilities needed to 
upgrade the current deficiencies. This phase will identify MILCON and 
O&M requirements, funding, and year of execution. We plan to develop 
and indentify these requirements during the development of fiscal year 
2013-2017 POM and will provide you the list of the MILCON projects at 
that time.

                   HIGH PERFORMANCE COMPUTING CENTER

    13. Senator McCaskill. Dr. Robyn, Secretary Hammack, Secretary 
Pfannenstiel, and Secretary Yonkers, the President's budget request 
authorization to begin building a High Performance Computing Center at 
Fort Meade, MD, at a total cost of $860.6 million. It is my 
understanding that DOD is building a similar facility in Utah at a cost 
of more than $1.5 billion. In fact, the budget requests $246.4 million 
this year for that facility and next year's request is expected to be 
$175.2 million. While I don't question the need for computing power or 
data centers, what I question is the cost. What lessons have been 
learned about controlling costs from the recent experience in Utah and 
from experience of the private sector, which builds similarly large, 
expensive data centers itself?
    Dr. Robyn. The Utah Data Center (UDC) and the High Performance 
Computing Center (HPCC) are not as similar as they first appear. The 
primary difference between the UDC and the HPCC is the reliability 
requirements of each facility. The UDC is a Tier III (concurrently 
maintainable) facility with full backup generation capability across 
the entire campus, which allows it to operate independent of commercial 
utility power. The HPCC will only have minimal backup generation 
capabilities. The HPCC will be a high power density facility that will 
not be comparable to the civilian sector's current building approach 
for data centers. In addition, this facility is not just a repository 
for data, but the vast majority of the equipment will be used for data 
processing.
    The lessons learned from the UDC are minimal in nature at this time 
since it is still under construction. What we have learned relates 
mainly to the acquisition and design processes, but we have also 
incorporated lessons from other recent major construction projects for 
the National Security Agency/Central Security Service (NSA/CSS).
    Lessons learned from the acquisition process include partnering 
immediately with the U.S. Army Corps of Engineers (USACE) (NSA/CSS's 
Construction Agent) to identify the key tasks where senior leadership 
can assist in accelerating the lengthy approval processes and allow the 
team to run tasks in parallel. By doing this, NSA reduced a normal 2-
year acquisition effort down to 18 months. NSA and USACE also 
determined that by conducting a two-step acquisition process, they were 
able to better focus the competition to only the most qualified 
contractors thereby streamlining the source selection review period.
    NSA was also able bring lessons learned into the design process. 
They found that by fully defining requirements early they could avoid 
scope creep during the design process. The also ensured there was quick 
response to contractor requests for information (RFI) and advocated for 
open dialogue between technical counterparts to speed up the design 
timeline.
    Ms. Hammack. The Army is not the Executive Agent for these MILCON 
projects and holds no equity. The Army's Data Center Consolidation Plan 
focuses primarily on consolidating data centers to existing Defense 
Enterprise Computing Centers (DECCs) operated by the Defense 
Information Systems Agency (DISA).
    Note: NSA as the Executive Agent has also provided an answer.
    Ms. Pfannenstiel. DON is not directly responsible for this issue, 
and therefore DON does not have an opinion or response relating to this 
issue.
    Mr. Yonkers. This question and the response falls outside the 
expertise and portfolio of Air Force directorate of installations, 
environment, and logistics. Recommend question be forwarded to DOD.

    14. Senator McCaskill. Dr. Robyn, Secretary Hammack, Secretary 
Pfannenstiel, and Secretary Yonkers, how have we incorporated these 
lessons learned into the design of these facilities?
    Dr. Robyn. The lessons learned allowed us to utilize a Design/Build 
fast-track process for the design of the Utah Data Center (UDC). 
Instead of the traditional process of obtaining complete construction 
drawings at the 35 percent, 65 percent, and 100 percent levels, this 
process breaks the design into smaller and more manageable packages 
allowing them to be reviewed and approved to start construction much 
sooner.
    The Department is still in the early stages of planning for the 
HPCC and has not yet begun the design process, but discussions continue 
between the NSA and the U.S. Army Corps of Engineers to capitalize on 
lessons learned from previous construction projects.
    Ms. Hammack. While the Army Data Center Consolidation Plan (ADCCP) 
does not include building more data centers, the Army did consult with 
industry and conduct an internal Base Realignment and Closure (BRAC) 
audit to capture lessons learned during consolidation. Key lessons 
incorporated in the ADCCP include centrally managing consolidation and 
eliminating redundant or legacy applications prior to consolidation.
    Note: NSA as the Executive Agent has also provided an answer.
    Ms. Pfannenstiel. DON is not directly responsible for this issue, 
and therefore DON does not have an opinion or response relating to this 
issue.
    Mr. Yonkers. This question and the response falls outside the 
expertise and portfolio of Air Force directorate of installations, 
environment, and logistics. Recommend question be forwarded to DOD.

    15. Senator McCaskill. Dr. Robyn, Secretary Hammack, Secretary 
Pfannenstiel, and Secretary Yonkers, I know that we have some of the 
government's most sensitive information stored in commercial 
facilities, so security cannot be the sole reason for providing this 
capability in government-owned and -operated facilities. Have you 
conducted rigorous analyses to see how we could provide these services 
more efficiently through government-owned and -operated facilities or 
by relying on the private sector?
    Dr. Robyn. Yes. The NSA's unique requirement for very high power 
density equipment disqualified the High Performance Computing Center 
facilities from lease consideration under Office of Management and 
Budget Circular A-11. Therefore, only government-owned sites were 
considered as possible locations for these facilities. A comprehensive 
study was conducted in 2010 to determine the final government-owned 
location.
    Ms. Hammack. The Army's decision to consolidate primarily to DECCs 
resulted from consultation with both industry and the DISA. In addition 
to providing the mandatory security environment, DISA DECCs enable 
interoperability across the DOD, efficient use of server and data 
storage, and built-in continuity of operations capabilities.
    Note: NSA as the Executive Agent has also provided an answer.
    Ms. Pfannenstiel. DON is not directly responsible for this issue, 
and therefore DON does not have an opinion or response relating to this 
issue.
    Mr. Yonkers. Response falls outside the expertise and portfolio of 
directorate of installations, environment, and logistics. Recommend 
question be forwarded to DOD.

                         KANSAS CITY IT CENTER

    16. Senator McCaskill. Secretary Pfannenstiel, I would like to 
highlight an issue of importance today for Missouri and Kansas. As you 
may know, the Marine Corps is considering relocating the Kansas City IT 
Center (KCITC) to another location outside of the region - and that 
location could require an entirely new building and potential personnel 
relocation. I am concerned that we could be spending our Federal 
dollars twice for this possible move. Further, it strikes me as an area 
for potential waste and duplication because even as this move is being 
considered, the Marine Corps continues to invest dollars in the KCITC 
by implementing several key IT and support programs in Kansas City and 
expanding the Kansas City workforce. While the Missouri and Kansas 
congressional delegations have expressed concerns about this issue to 
the Commandant of the Marine Corps in a letter on February 17, 2011, I 
continue to feel that we don't have adequate information from the 
Marine Corps to know what factors are going into this decision. How 
much does the Marine Corps anticipate a new building will cost?
    Ms. Pfannenstiel. We share the concerns regarding the budgetary and 
fiscal challenges confronting the Department and are committed to 
ensuring the responsible stewardship of the taxpayers' funds. We are 
working to provide all the information that the Missouri and Kansas 
congressional delegations have requested.
    The Marine Corps is reviewing a number of locations for an IT 
Center. A decision on whether or not to relocate the information 
technology organizations will be made in the spring 2012.

    17. Senator McCaskill. Secretary Pfannenstiel, how much will it 
cost to move workers and equipment to a new location?
    Ms. Pfannenstiel. The Marine Corps is conducting a risk analysis on 
the cost of moving to a different location that includes both equipment 
and personnel.

    18. Senator McCaskill. Secretary Pfannenstiel, will you have to 
duplicate the new technology at the KCITC at the new location or will 
you be able to transfer that technology?
    Ms. Pfannenstiel. The Marine Corps will make every effort to 
transfer technology or time any move to coincide with a planned 
technology refresh cycle in order to limit any duplicate spending.

    19. Senator McCaskill. Secretary Pfannenstiel, if technology needs 
to be duplicated at a new site, what is the estimated cost?
    Ms. Pfannenstiel. The Marine Corps is conducting a risk analysis on 
the cost of moving to a different location that includes both equipment 
and personnel.

    20. Senator McCaskill. Secretary Pfannenstiel, are these factors in 
your consideration whether to move?
    Ms. Pfannenstiel. It is uncertain at this time whether the current 
building, owned by the General Services Administration, is suitable as 
a permanent solution. We have learned that the building, while having 
good potential as a permanent facility, does have some potential 
environmental and safety issues. It is equally important to maintain a 
qualified information technology staff for all our programs now and 
into the future. Other factors we are considering are the facility 
cost, workforce relocation, transition costs, and suitability of a 
facility to meet information technology security and force protection 
requirements. We welcome any additional input you may have for this 
important decision.

    21. Senator McCaskill. Secretary Pfannenstiel, conversely, how much 
will it cost you to stay in Kansas City?
    Ms. Pfannenstiel. We are reviewing all costs and are conducting 
further analysis in order to support a decision from Marine Corps 
leadership.

    22. Senator McCaskill. Secretary Pfannenstiel, when will the Marine 
Corps sit down with all stakeholders and provide baseline information 
about the status of this decision and key cost considerations?
    Ms. Pfannenstiel. The Marine Corps will continue to keep all 
stakeholders involved in this process and provide information as 
necessary, including key considerations in making the final decision. 
Again, we welcome any additional input you may have for this important 
decision.

    23. Senator McCaskill. Secretary Pfannenstiel, bottom line, can the 
Marine Corps ensure that this plan is not going to lead to essentially 
duplicative Federal funding during these economically tight times? If 
so, how?
    Ms. Pfannenstiel. The Marine Corps is committed to ensuring that 
there is no duplicative funding associated with any potential move. The 
Marine Corps would phase any possible move order to mitigate any 
workforce, funding and capability gaps.
                                 ______
                                 
               Questions Submitted by Senator Mark Udall

              DEFENSE ENVIRONMENTAL PROTECTION INITIATIVES

    24. Senator Udall. Dr. Robyn, encroachment on our military 
installations and ranges has been and continues to be a concern for our 
military and for me. Our testing and training footprint for new weapon 
systems continues to increase. As troops returning from Iraq and 
Afghanistan begin the training reset they will require more land. For 
the Air Force, new aircraft like the F-35 may require a wider noise 
abatement zone around airfields. As BRAC 2005 is fully implemented, the 
pressure on our bases and ranges will increase. How important are 
programs like the Readiness and Environmental Protection Initiative 
(REPI) in protecting our bases and ranges now and into the future?
    Dr. Robyn. Since its first year of funding in 2005, the REPI has 
been a critical part of the Department's comprehensive Sustainable 
Ranges Initiative to protect and sustain the military operational 
footprint. Under REPI, we can ensure that our ability to test and train 
is protected through cost-share partnerships outside of our boundaries, 
rather than having to shrink our operational footprint within the 
controlled space of our fence lines. The leveraged nature of REPI 
allows DOD funds to be pooled with funds from our partners to 
accomplish more with less. Since fiscal year 2005, REPI has protected 
over 174,000 acres of buffer land in 59 locations in 23 States. DOD's 
$202.5 million investment has attracted over $261 million in partner 
contributions to protect the DOD mission from encroachment.
    Immediate proactive and protective REPI investments help avoid 
other more expensive costs, such as the need for training workarounds 
and higher future military expenses. The $100 million appropriated for 
REPI in fiscal year 2011 will allow acceleration of ongoing efforts to 
more effectively integrate REPI with other private, State and local 
government, and Federal agency programs and resources at landscape 
scales--the scale needed to fully address the long range protection of 
the DOD mission.

    25. Senator Udall. Dr. Robyn, what are your plans for establishing 
buffer zones around military installations to prevent further 
encroachment?
    Dr. Robyn. The Department is committed to protecting and sustaining 
the operational mission footprint required to maintain a trained and 
ready force. The REPI is a highly effective and cost-efficient tool to 
help us meet that commitment.
    Today, we are using REPI to work with more than 80 partners to 
protect readiness at 59 key installations and ranges in 23 States. 
Significant opportunity now exists to maximize the benefits of REPI due 
to current real estate market conditions, increasing numbers of willing 
sellers and emerging landscape-scale conservation initiatives 
benefitting key DOD installations. Going forward, we will continue to 
support and expand these partnerships and work closely with operators 
and commanders to be sure that we employ the REPI program in ways that 
deliver the maximum readiness benefit in the most economically 
efficient manner.
    Acquisition of these conservation buffers are often made in 
response to recommendations from a Joint Land Use Study. The Joint Land 
Use Studies (JLUS) program allows us to collaborate with communities 
near our installations to promote compatible zoning and development 
plans.

                       DEFENSE ENERGY INITIATIVES

    26. Senator Udall. Dr. Robyn, Secretary Hammack, Secretary 
Pfannenstiel, and Secretary Yonkers, DOD has established ambitious 
goals relating to energy efficiency. Where are you now relative to 
achieving those goals? If you are not fully on track as of today, what 
is needed to get you on or ahead of that track?
    Dr. Robyn. Although the Department is steadily improving its 
installation energy performance, we have failed to meet the energy 
intensity reduction [Energy Independence and Security Act of 2007] goal 
for the past 2 years. (Energy intensity is a measure of energy 
consumption per building square footage.) DOD reduced its energy 
intensity by 11.2 percent from 2005 to 2010, compared to the goal of 15 
percent.
    To get back on track towards achieving the efficiency goals, the 
Department is investing more to improve the energy profile of our fixed 
installations. Financing for these investments has come from annually 
appropriated funds, including MILCON, operations and maintenance, and 
the Energy Conservation Investment Program (ECIP). The Department will 
not, however, be able to close the gap solely through use of 
appropriated funds. We also plan to increase our use of third-party 
financing of energy conservation projects. This includes use of such 
vehicles as Energy Savings Performance Contracts (ESPCs) and Utility 
Energy Services Contracts (UESCs) which allow DOD to use private 
funding to finance energy conservation projects and pay for them 
through the accrued savings.
    To increase the visibility of energy investments, the Department 
has created budget exhibits for the fiscal year 2013 budget process 
which will link funding to energy impact. This will allow the 
Department to better predict future energy performance to further 
improve energy efficiency.
    Ms. Hammack. The Energy Independence and Security Act (EISA) of 
2007 requires that all Federal agencies reduce their energy intensity 
from the fiscal year 2003 baseline by 3 percent per year between fiscal 
year 2006 and fiscal year 2015 (30 percent). In fiscal year 2010 Army 
energy intensity was 8.7 percent below its 2003 baseline vs. a goal of 
a 15 percent reduction. The Army is currently working on several 
initiatives to achieve this goal. First and foremost there is guidance, 
leadership and oversight over the energy program from the highest 
levels of the Army with unprecedented attention and priority given to 
energy during the budget process. The Army's Senior Energy and 
Sustainability Council (SESC), co-chaired by the Under Secretary of the 
Army and the Vice Chief of Staff of the Army, oversees the execution of 
our Army Energy Security Implementation Strategy (AESIS). It tracks 
progress on goals, tasks, and metrics and provides senior level 
visibility to Army energy efforts.
    The Army has recently announced several new policies to standardize 
energy efficiency in Army operations. These include energy efficient 
lighting requirements, implementation of the highest building standards 
in the Federal Government and an Acquisition Policy requiring energy 
productivity to be a consideration in all Army Acquisition Programs. 
The Army is also working to improve its utilization of performance 
contracts and leverage other private investment to accelerate energy 
projects. Finally, on April 19, I will be announcing the selection of 5 
pilot Net Zero energy installations for environmental analysis under 
the National Environmental Policy Act (NEPA). These 5 installations 
will be working towards Net Zero energy status. Through conservation, 
efficiency and renewable energy measures these installations will 
strive towards the goal of producing as much energy on site as they 
consume by 2020. This initiative will help to ensure that sustainable 
practices are instilled and managed throughout the appropriate levels 
of the Army, while also maximizing operational capability, resource 
availability and well-being
    Ms. Pfannenstiel. We are on track to meet most of our energy goals. 
Throughout 2010 we demonstrated progress through an assortment of 
energy programs, partnerships, and initiatives.
    DON has reduced our shore energy intensity, compared to a 2003 
baseline, by 15.7 percent. This progress is towards a 2007 Energy 
Independence and Security Act goal mandating a 30 percent reduction in 
energy intensity by 2015. We have programmed funds in fiscal year 2012 
to continue our progress towards meeting the fiscal year 2015 
requirements.
    Mr. Yonkers. The Air Force has an ambitious goal in place to reduce 
the energy intensity of its facilities by 3 percent per year to reach 
30 percent of fiscal year 2003 levels by fiscal year 2015 and then 1.5 
percent per year to reach 37.5 percent by fiscal year 2020. By 
continuing to focus investments on proven, high-return projects since 
2005, the Air Force has reduced its energy intensity by nearly 15 
percent. However, due to limited budgets and the fact that much of the 
``low hanging fruit''-projects may have already been addressed, the Air 
Force is concerned about meeting its energy intensity mandate beyond 
fiscal year 2012. Additionally, most investments require 2 years from 
contract award to realize measureable energy savings due to contract 
and construction lag time.
    Currently, there are 447 energy and water conservation projects in 
progress from fiscal year 2010 funding. These energy conservation 
projects include all categories of work to make existing installation 
systems more efficient. And while the Air Force continues to advance 
energy independence through coordinated efforts aimed at minimizing 
energy costs and leveraging proven technology, the most important 
commitment is toward the Air Force energy goal to make smarter 
decisions and change the culture when it comes to energy.

    27. Senator Udall. Dr. Robyn, Secretary Hammack, Secretary 
Pfannenstiel, and Secretary Yonkers, I'd like to discuss how to improve 
energy security for our military installations. True energy security 
for U.S. bases cannot be realized as long as the supply of electricity 
to key systems and operations would be disrupted if the larger energy 
supply and transmission grid were to be disrupted. What would be 
required in terms of programs, technologies, and resources to allow key 
systems and operations on our bases to continue to operate indefinitely 
on a 24/7 basis in the event of a disruption or failure of the broader 
commercial electrical power grid?
    Dr. Robyn. Our current security strategy is three-fold: (1) reduce 
demand, (2) expand supply, and (3) improve our energy resiliency.
    The energy resiliency aspect of the strategy mitigates risk of grid 
failure, and, protects critical missions on fixed installations during 
peacetime and contingency operations. The DOD has not identified a 24/
7/365 need for power as a general requirement. For most loads, it is an 
unnecessary level of assurance. Even for critical loads, a 24/7 power 
supply may only be needed for a finite period before the mission would 
transfer to an alternate site until the commercial grid is restored. 
Instead, the Defense Critical Infrastructure Program (DCIP) is 
developing a prioritized list of critical missions, their 
vulnerabilities, and recommended mitigations. The output of this 
program will be a set of requirements that will compete for resources 
in the Defense Planning Programming Budgeting and Execution process. 
DCIP is important in identifying Defense Critical Assets and 
prioritizing those assets for protection against electric grid 
vulnerabilities.
    There also are DOD technology initiatives which could provide 
increased mission assurance at our installations. These include the 
Environmental Security Technology Certification Program (ESTCP) and 
DOD's smart microgrid initiatives. The ESTCP uses DOD facilities as 
test beds for innovative energy technologies, and allows the 
development, test and evaluation of technologies on DOD installations. 
DOD's smart microgrid initiatives include the Smart Power 
Infrastructure Demonstration for Energy Reliability and Security 
(SPIDERS) program, the Norfolk Case Study and the Twentynine Palms 
microgrid effort.
    Ms. Hammack. I agree that one of the key security concerns for our 
installations is their dependence on an aging and outdated electric 
grid. To that end the Army has announced a Net Zero initiative that is 
a holistic approach to addressing energy, water, and waste at Army 
installations. On April 19th I will announce the selection of 16 pilot 
Net Zero Installations for environmental analysis under the NEPA. Five 
installations that will strive for Net Zero energy, five for Net Zero 
waste, five for Net Zero water, and at least one that will strive to be 
Net Zero in all three categories. A Net Zero energy facility would 
produce as much energy as it consumes on an annual basis, thereby 
greatly reducing its dependence on the electric grid. Our goal is to 
have an additional 25 installations strive to be Net Zero by 2030.
    In addition to the Net Zero initiative the Army is also working on 
several projects at various installations that will have a significant 
impact on those installations dependence on the commercial transmission 
grid and prove technology that could be transferred to other 
facilities. At Fort Irwin, CA we are evaluating the environmental 
impacts of developing a 500MW solar electric generating facility that 
would produce more than enough energy to meet Fort Irwin's energy 
security needs. There are also several micro-grid projects in 
development on our facilities that will provide a more secure electric 
distribution system. One such project, called SPIDERS, at Fort Carson, 
CO which will demonstrate bi-directional power transfer or vehicle-to-
grid (V2G) capable vehicles at U.S. installations. This is intended to 
provide ancillary grid services from the vehicle on-board batteries in 
the event of a power disruption. Finally, the Army is currently working 
to consolidate over 75 percent of its data centers over the next 5 
years, which will result in significantly lower energy demands for data 
center operations and improve security of Army information assets.
    Army efforts to reduce demand for energy through energy efficiency 
and conservation efforts, increase the use of renewable energy 
generated on base, and development of micro-grids will help to 
significantly reduce the threat of disruption from the commercial grid 
by decreasing the amount of energy from the grid needed to run our 
installations and in some cases operate completely independently of the 
grid.
    Ms. Pfannenstiel. Senator Udall, DON has taken a number of steps to 
ensure continuity of supply to our critical facilities.

         First, our Mission Assurance Division of the Naval 
        Surface Warfare Center conducts mission assurance assessments 
        to DON and other DOD customers. The goals of these assessments 
        is to identify external and internal to the base 
        vulnerabilities to our utilities and energy systems. From these 
        assessments we take the necessary steps to mitigate the threat.
         All our key systems and operations are equipped with 
        emergency generators to provide electrical power for short 
        timeframes (several days to week's duration).
         To relieve the base's emergency power system we have 
        procedures for the ships in port to disconnect from shore power 
        and operate using their own equipment.
         For longer periods of power disruption we deploy our 
        Mobile Utilities Support Equipment to provide generation and 
        substation capacity to the critical loads. The MUSE program has 
        over 140 MW of portable generation, ranging in size from 200 KW 
        to 2500 KW. This equipment proved valuable in supplying power 
        to critical loads following Hurricane Katrina, as well as after 
        other major storms.
         Our installations are developing renewable energy 
        projects on our bases and we are studying the use of micro-
        grids to allow all on base generation to operate effectively 
        during a grid outage. To make renewable power effective for 
        extended periods energy storage technology will need to be 
        improved.

    The steps I have identified above will enable us to support 
critical requirements in the case of most grid outages. Providing 
electric power indefinitely 24/7 will be more difficult and very 
costly. To accomplish this, the following actions will be needed:

         Improved energy storage capability to maximize use of 
        solar and wind renewable resources which are intermittent
         Redundant and secure sources of fuel for on base 
        generators. Liquid fuel should be a drop in bio-fuel. Where 
        natural gas is available, dual fuel capability of boilers and 
        generators should be considered
         Secure on-base energy distribution systems that can 
        survive and continue to operate after a disaster

    Mr. Yonkers. The Air Force is currently developing more explicit, 
actionable, quantifiable planning factors that can be used to both 
solve energy security challenges and help with investment decisions. 
Advanced energy independence for the Air Force is assured through 
coordinated efforts aimed at minimizing energy costs and leveraging 
proven technology in conservation measures and renewable energy 
development while assuring system reliability and critical asset 
security for critical Air Force missions. These efforts reduce 
dependence on commercial utility supply and delivery systems and 
enhance energy surety for the Air Force.
    Using the existing Defense Critical Infrastructure asset 
identification methodology, the Air Force identifies mission critical 
assets (i.e. installations, facilities, or activities). Risk 
assessments identify specific electric power related vulnerabilities, 
including those associated with the reliability of supporting 
commercial electric power, the availability of back-up electric power 
supplies, and single points of failure. The Air Force recently 
established a Critical Infrastructure Program (CIP) Working Group at 
the Headquarters Air Force level to facilitate cross-functional 
awareness and understanding of risk assessment findings and to 
coordinate Higher Headquarter functional support in programming for 
remediation or mitigation of risks not addressed at the installation or 
major command levels. The Air Force also plans to use CIP results to 
influence resource allocation decisions at the corporate level and will 
begin to track mitigation and remediation projects through completion 
or adoption of other risk mitigation measures to ensure closure.
    Energy Surety efforts were enhanced in fiscal year 2010 by striving 
to meet the Air Force goals that: (1) reduce demand through 
conservation and efficiency; and (2) increase supply through 
alternative energy sources. Facility energy reduction was 14.9 percent 
against the 2003 baseline. Furthermore, renewable energy accounted for 
6.4 percent of the total energy consumed, beating the 5 percent goal.
    The Air Force has partnered with Department of Energy (DOE) on 
energy security initiatives. In February 2010, the Air Force Civil 
Engineer adopted Sandia Labs Energy Surety Microgrid (ESM) concept as 
the definition of ``smart grid'' for our bases because it incorporates 
energy security and energy resiliency using a risk assessment 
methodology to identify secure and reliable power to support critical 
missions for extended duration, quantifies existing energy assets, 
assesses outage possibilities, and critical energy demand requirements, 
and quantifies infrastructure improvements for energy system 
performance and protection goals. They are performing ESM assessments 
at four Air Force bases: Maxwell, Kirtland, Schriever, and Vandenberg.
    In 2010, the Air Force started to analyze the effects that 
utilities privatization may have on installation energy security and to 
assess backup power requirements for mission critical functions. The 
results of the study will be used to evaluate gaps in back-up power 
requirements, redundancy, resiliency, and both utility and base power 
grid vulnerabilities. One of the deliverables of the study will be an 
Energy Security checklist assessment tool that will be used at each 
base to provide an initial Energy Security ``score'' and a means to 
identify and optimize actions that can be accomplished to improve the 
installations' Energy Security posture. During 2011 Vulnerability 
Assessments, the Air Force will assess installation plans to mitigate 
the all-hazards impact from power interruptions, written contingency 
plans for power outages, and coordination procedures with local utility 
providers.
    A DOD (including Army, Air Force, Navy, and Marine Corps) and DOE 
joint task force is examining the potential to establish Net-Zero 
Energy Installation (NZEI) initiatives at military installations. The 
Air Force Academy is our demonstration site for the Air Force. NZEI 
could make installations more energy secure in the future by reducing 
installation dependence on the commercial power grid.
    While the Air Force has a generator testing and inspection program 
in place at all installations, Major Accident Response Exercise (MARE) 
and Operational Readiness Inspection (ORI) programs do not currently 
evaluate generator performance. The AF will create a standardized 
requirements policy to address emergency generator testing for MAREs 
and ORIs, including how the base prioritizes, refuels and tests 
equipment reliability for a sustained period.
    The Air Force is looking into business models to procure all-
electric vehicles at a more economical price point. Part of the 
assessment is to right-size the battery depending on range requirements 
and also to assess the capability of using the vehicle batteries as on-
base energy storage to shed peak load and provide power in the event of 
outages.
    In summary, the Air Force is focusing its energy security efforts 
through increased inter-service and interagency collaboration, and 
capability improvements to reduce mission critical vulnerabilities to 
extended electric power outage and to enable better risk-informed 
decisionmaking.

    28. Senator Udall. Dr. Robyn, Secretary Hammack, Secretary 
Pfannenstiel, and Secretary Yonkers, will your current plans and 
programmed resources accomplish that? If not, are you developing plans 
and programming resources to accomplish that in the out-years?
    Dr. Robyn. The planning and programming of resources in the future 
will be important, and we are continuing to identify the technologies 
and DOD missions important in shaping our energy resiliency strategy.
    Technologies are being identified and demonstrated through the 
ESTCP, the SPIDERS program, the Norfolk Case Study and the Twentynine 
Palms microgrid effort. These efforts are integrating secure, smart 
microgrid technologies and concepts such as continuity of operation 
planning (COOP), building design considerations, metering, smart grid 
systems and load management, on site generation (e.g., generators and 
renewables) and system islanding.
    Further, specific critical missions and assets are continuing to be 
identified through the Critical Infrastructure Program (DCIP), which 
prioritizes Defense Critical Assets (DCAs). In the future, DCAs would 
warrant the greatest consideration in targeting resources to shape an 
energy security posture at our installations. These activities, both 
the technology demonstration efforts and the identification of critical 
missions under the DCIP, will provide the basis for energy resiliency 
requirements in the Defense PPBE process.
    Ms. Hammack. The Army is currently implementing the highest 
building standards in the Federal Government by adopting ASHRAE 
Standard189.1, expanding our ability to install small scale renewable 
energy projects through the ECIP program and large utility scale 
renewable energy projects by leveraging third party investment 
authorities, implementing a Net Zero strategy, and developing micro 
grid technologies that will greatly reduce our installations dependence 
on the commercial grid. These initiatives are being backed at the 
highest levels of the Army through the Senior Energy and Sustainability 
Council. Additionally, the Secretary of the Army recently announced 
that energy was one of his top priorities for the year providing the 
program with an unprecedented level of support.
    Ms. Pfannenstiel. DON's current budget across the FYDP does not 
include plans or resources to allow key systems and operations on our 
bases to continue to operate indefinitely on a 24/7 basis in the event 
of a disruption or failure of the broader commercial electrical power 
grid. In the unlikely event that the electric power grid is disabled 
indefinitely, we would operate initially using our station emergency 
capability, MUSE, renewable and ship generation. If the period without 
grid power became untenable, we would consider relocating critical 
missions and ships to other ports.
    Mr. Yonkers. The Air Force is currently developing more explicit, 
actionable, quantifiable planning factors that can be used to both 
solve energy security challenges and help with investment decisions.

    29. Senator Udall. Secretary Pfannenstiel, in many ways, what DOD 
is doing in terms of energy efficiency, biofuels, and other energy-
related programs is a model for the Federal Government and society as a 
whole. We can use this technology to increase our energy security, 
create jobs, and reduce our consumption of foreign oil. DOD's renewable 
energy development programs should remind us of how DOD-focused 
research and development (R&D) and technology applications in other 
areas have blazed a trail for broader society-wide application.
    The Navy has been doing some very impressive work with regard to 
developing biofuels and there are some very exciting possibilities. 
They can deliver the energy density of traditional fuels. They can be 
used without any modifications to current engines or fuel systems. They 
have a lifecycle greenhouse gas level well below traditional fuels, and 
they do not depend on foreign sources of supply. As you go about 
developing new alternative fuel options for Navy missions, do you 
believe your work will create a pathway for the civilian long-haul 
fleet of planes, ships, trucks, and trains?
    Ms. Pfannenstiel. The operational use of alternative fuels used by 
the Navy and the Marine Corps will be hastened by collaborating with 
Federal agencies and private industry involved in research, 
development, and certification of alternative fuels. This increased use 
of alternative fuels is part of a bold energy agenda set forth by the 
President of the United States as he seeks to reduce the Nation's 
dependence on fossil fuels. By collaborating with the Departments of 
Energy and Agriculture, the airlines industry, research universities, 
Navy laboratories, the private sector, and others, collectively we will 
create the pathway for the greater use of alternative fuels throughout 
the transportation industry.

    30. Senator Udall. Secretary Pfannenstiel, is this just a Navy 
strategy you are working on or do you see your work as the leading edge 
of a DOD-wide and ultimately broader national strategy?
    Ms. Pfannenstiel. The President set forth a bold energy agenda and 
DOD, like other departments and agencies, is working aggressively to 
reduce its dependence on fossil fuels. Within DOD, the Secretary of the 
Navy has challenged the Navy and the Marine Corps to lead the DOD and 
the Nation in bringing about improved energy security and energy 
independence.

    31. Senator Udall. Secretary Pfannenstiel, if you see your work as 
playing a role in blazing the trail for the whole economy are you 
looking at the scale-up implications on land use and food supply that 
would result from moving your biofuel choices into the whole economy?
    Ms. Pfannenstiel. DON is closely working with the Departments of 
Energy and Agriculture to identify alternative fuel sources. We are 
very aware of the implications on land and water use and food supply 
and are committed to non-food feedstock alternative fuels. Our 
partnership with the Department of Agriculture will closely review what 
non-food crops, such as camelina, can be harvested to create this new 
supply of biofuels. We are partnering with the Department of Energy on 
research and development on biofuels derived from algae and other non-
food sources.

    32. Senator Udall. Secretary Pfannenstiel, how are those 
considerations reflected in your future plans?
    Ms. Pfannenstiel. DON has set two priorities that illustrate the 
Department's role in investing in alternative sources of energy: energy 
security and energy independence. The Navy will achieve energy security 
by utilizing sustainable non-food feedstock sources that meet force 
sustainment functions and fulfill tactical, expeditionary and shore 
operational requirements. This allows the ability to protect and 
deliver sufficient energy to meet operational needs without impacting 
the food industry. Second, energy independence is achieved when naval 
forces rely only on energy resources that are not subject to 
intentional or accidental supply disruptions. As a priority, energy 
independence increases operational effectiveness by making naval forces 
more energy self-sufficient and less dependent on vulnerable energy 
production and supply lines.
    Additionally, advanced biofuels represent the best option for 
meeting military needs while reducing greenhouse gas emissions. The EPA 
has evaluated the life cycle greenhouse gas emissions from a number of 
advanced biofuel platforms to ensure that they do reduce emissions 
compared to petroleum.
    The Secretary of the Navy has 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. 
DON is committed to improving our role in investing in alternative 
sources of energy for the future.
    The Secretary of the Navy's Energy Goals:

    1.  Increase Alternative Energy Use DON-Wide: By 2020, 50 percent 
of total DON energy consumption will come from alternative sources
    2.  Increase Alternative Energy Ashore: By 2020, at least 50 
percent of shore-based energy requirements will come from alternative 
sources; 50 percent of DON installations will be net-zero
    3.  Reduce Non-Tactical Petroleum Use: By 2015, DON will reduce 
petroleum use in the commercial fleet by 50 percent
    4.  Sail the ``Great Green Fleet'': DON will demonstrate a Green 
Strike Group in local operations by 2012 and sail it by 2016
    5.  Energy Efficient Acquisition: Evaluation of energy factors will 
be mandatory when awarding contracts for systems and buildings

                 PINON CANYON ENVIRONMENTAL ASSESSMENT

    33. Senator Udall. Secretary Hammack, please provide an update on 
the status of the environmental assessment for the Pinon Canyon 
Training Site in Colorado.
    Ms. Hammack. Fort Carson will meet their obligation to conduct 
National Historic Preservation Act consultations (section 106) on the 
Pinon Canyon Maneuver Site Transformation Environmental Assessment (EA) 
prior to making any potential Finding of No Significant Impact on the 
proposed action. The EA was completed in January 2011, and included 
public meetings and input. A copy of the EA can be accessed at: http://
www.carson.army.mil/pcms/documents/2011--Final--EA.pdf

    34. Senator Udall. Secretary Hammack, would the addition of a 
combat aviation brigade at Fort Carson--which I fully support--require 
the Army to purchase additional training land?
    Ms. Hammack. No. Stationing of a Combat Aviation Brigade at Fort 
Carson does not require the purchase of additional land.
                                 ______
                                 
               Questions Submitted by Senator Joe Manchin

                                BAHRAIN

    35. Senator Manchin. Secretary Pfannenstiel, as you know, the Fifth 
Fleet is stationed in Bahrain, a country that is undergoing a great 
deal of turmoil right now. The National Defense Authorization Act 
(NDAA) for Fiscal Year 2011 authorized three projects in Bahrain: 
Ammunition Magazines, $89.2 million; Operations and Support Facilities, 
$60.0 million; and Waterfront Development, Phase 3, $63.8 million. The 
budget request this year contains two projects: Bachelor Enlisted 
Quarters, $55.0 million; and Waterfront Development, Phase 4, $45.1 
million.
    I recently visited Jordan and after speaking to the King, I realize 
the concerns about the stability of the governments in the region and 
also the strategic value of Bahrain as a very good ally to the United 
States. In tight fiscal times, is now the time to be investing over 
$300.0 million there?
    Ms. Pfannenstiel. Bahrain remains the location for our Naval Forces 
CENTCOM/U.S. Fifth Fleet headquarters, so it is vital to have 
facilities to enable our Navy's forward maritime presence and enable 
rapid crisis response.
    The Waterfront Development Phase IV at Naval Support Activity 
Bahrain ($45.2 million) constructs a combat vehicle warehouse, water 
storage tank, and fleet recreation facility. This project will enable 
the Navy to meet CENTCOM anti-terrorism/force protection standards as 
well as properly execute assigned missions with sufficient power, space 
and communications capability.
    The Bachelor Enlisted Quarters at Naval Support Activity Bahrain 
($55 million) constructs secure on-base permanent party bachelor 
quarters for unaccompanied sailors.

    36. Senator Manchin. Secretary Pfannenstiel, has the Navy done any 
analysis on what would happen if the Fifth Fleet were no longer welcome 
in Bahrain?
    Ms. Pfannenstiel. There has been no change in the status of the 
relationship between COMUSNAVCENT/C5F and the Government of Bahrain. 
The Government of Bahrain continues to fully support hosting Naval 
Support Activity-Bahrain (NSA-Bahrain) and its tenant commands. The 
King and Crown Prince have stated their continuing support to the U.S. 
Navy presence in the Kingdom of Bahrain. We do not expect a change in 
the Bahraini government's attitude toward hosting NSA-Bahrain.

    37. Senator Manchin. Secretary Pfannenstiel, are plans to evacuate 
dependents and support staff up-to-date and executable?
    Ms. Pfannenstiel. DOD dependents have not been evacuated from 
Bahrain. On 15 March, 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 13 May 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 
01 May, of Bahrain's 710 command sponsored dependents, 82 have departed 
under AD. NSA Bahrain's Joint Reception Center (JRC) continues to 
receive questions and process applications for alternation Safe Havens 
in the United States.

                      LANDSTUHL MEDICAL FACILITIES

    38. Senator Manchin. Dr. Robyn and Secretary Hammack, I was at 
Landstuhl Regional Medical Center a few weeks ago and visited with 
wounded servicemembers, some from international forces. I toured the 
medical center and was impressed with the level of care and level of 
services available at the hospital. However, I understand that the 
floor structure in certain areas is deteriorating and failing, in fact 
a portion fell through the ceiling in the pediatric unit on the level 
below. Can you tell me about the Army's fiscal year 2012 plans to 
invest in the Landstuhl Medical facilities?
    Dr. Robyn. The Army has addressed the immediate concerns with the 
floor structure. The fiscal year 2012 plan for major repair (<$500,000) 
includes a project to repair roof insulation and a project to brace 
flooring due to settling in a crawl space.
    The Department's long-term plan for the hospital includes an fiscal 
year 2012 budget request for the first increment ($70.6 million) of 
funding for a replacement hospital at Rhine Ordinance Barracks in the 
Kaiserslautern Military Community. This project (total cost of $1.2 
billion) consolidates the Landstuhl Regional Medical Center and the 
Ramstein Air Base clinic at one convenient location 8 miles closer to 
Ramstein Air Base than the existing hospital. This location reduces 
wounded warrior casualty transit times to medical care from as much as 
45 minutes across public roads to less than 5 minutes on DOD controlled 
roads. The facility will provide direct medical services to 31,000 
enrolled beneficiaries and be the contingency casualty evacuation 
location for EUCOM, CENTCOM, and AFRICOM.
    Ms. Hammack. The Army's fiscal year 2012 budget plans to invest in 
Landstuhl Medical facilities include only two major repairs 
(<$500,000): (1) a project to repair roof insulation; and (2) a project 
to brace flooring due to settling in a crawl space.

    39. Senator Manchin. Dr. Robyn and Secretary Hammack, how would a 
year-long continuing resolution make a difference in the completion of 
this project?
    Dr. Robyn. We are requesting authorization and funds to begin this 
project in fiscal year 2012. A year-long fiscal year 2011 continuing 
resolution will not impact this project as long as the fiscal year 2012 
President's budget request is acted upon in a timely manner.
    Ms. Hammack. A year-long continuing resolution for fiscal year 2011 
has no impact on the completion of the project. The first increment is 
requested for fiscal year 2012 as part of the OSD Defense-wide MILCON 
request.

                      ALTERNATIVE ENERGY PROGRAMS

    40. Senator Manchin. Dr. Robyn and Secretary Yonkers, in recent 
testimony by the Commandant of the Marine Corps, General Amos spoke 
highly of their efforts to reduce the environmental footprint of the 
Marine Corps bases by saving energy and using alternative fuels 
including solar power for batteries. At this morning's Senate Armed 
Services Committee hearing, General Schwartz said the Air Force is 
ready to certify plane engines for alternative fuel blends but the 
challenge for the Air Force will be who will produce alternative fuels 
and where will they be able to buy it. Are there any DOD alternative 
energy projects that use coal-to-liquid fuels? If so, would you buy it 
if we could produce it?
    Dr. Robyn. The Office of the Under Secretary for Acquisition, 
Technology and Logistics is actively providing oversight on alternative 
fuels and is particularly interested in the progress of qualifying such 
fuels for use, and in their long term availability. For the answer to 
this specific question, I defer to the Air Force.
    Mr. Yonkers. For the DOD, the Defense Logistics Agency (DLA) is the 
mandated agency for purchase of bulk liquid fuels. The Air Force is 
feedstock agnostic-what the fuel is made from is not important so long 
as it has the desired performance, environmental and safety 
specifications. By going through the test and certification process, 
the Air Force is positioning itself to integrate cost competitive, 
environmentally friendly, domestically produced alternative fuel blends 
by 2016. Generally, the Air Force will not be a producer of fuel, but 
will use what the market cost competitively provides.
    Currently, over 99 percent of the Air Force fleet is certified for 
unrestricted operational use of a 50/50 synthetic fuel blend, where the 
synthetic component is produced via the Fischer-Tropsch (FT) process. 
FT synthetic fuel can be produced from coal, natural gas or biomass.
    The alternative aviation fuel certification process increases the 
types of fuel Air Force aircraft can use. Once the commercial market is 
ready, the Air Force will be position to use those fuels, as long as 
they meet the technical, environmental and economic requirements, 
including the provisions outlined in Section 526 of the Energy 
Independence and Security Act. Having the ability to use non-
traditional aviation fuels provides the Air Force with an improved 
energy security posture and increased protection from price 
fluctuations.

    41. Senator Manchin. Dr. Robyn and Secretary Yonkers, for the 
projects that use bio-fuels, what are your concerns about your ability 
to readily buy these types of fuels and have a steady supply?
    Dr. Robyn. Again, the Office of the Under Secretary for 
Acquisition, Technology and Logistics is actively providing oversight 
on alternative fuels and is particularly interested in the progress of 
qualifying such fuels for use, and in their long term availability. For 
the answer to this specific question, I defer to the Air Force.
    Mr. Yonkers. To date, the Air Force has certified the C-17 and the 
F-16 for unrestricted operations using 50/50 blend of traditional jet 
fuel and hydrotreated renewable jet (HRJ) fuel. Certification 
activities are on-track for 2012 completion. To date, no performance or 
safety-of-flight anomalies have been determined.
    The Air Force is looking at alternative aviation fuels that are 
cost competitive, environmentally friendly and act as a ``drop-in'' 
fuel with traditional JP-8. The Air Force is feedstock agnostic-what 
the fuel is made from is not important so long as it has the desired 
performance, environmental and safety specifications.
    The Air Force will not be a producer of fuel, but will use what the 
market cost competitively provides. If sufficient amounts of the fuel 
are available and meet the Air Force's technical, environmental and 
cost requirements, the Air Force will use them. The Air Force needs 
industry to start making it in a cost competitive and environmentally 
friendly manner, so it can provide the best value for the taxpayer and 
the environment.
    Additionally, producers of alternative aviation fuels have 
indicated they need long-term contracts in place to raise the capital 
to build the first plants. Air Force does not have nor need long-term 
contracting authority for fuels, as the DLA is the mandated agency for 
purchase of bulk liquid fuels for DOD. However, industry believes if 
DLA had long-term contracting authority and producers were able to 
negotiate long-term contracts, their ability to obtain favorable 
financing terms for arranging capital to build production facilities 
would improve.

                     MILITARY CONSTRUCTION PROJECTS

    42. Senator Manchin. Dr. Robyn, the National Guard and Reserves 
have been heavily dependent on earmarks for MILCON projects--in fiscal 
year 2010, $235 million in earmarks went to projects for the Air 
National Guard and $93 million to the Air Force Reserve. MILCON 
projects not only help our Guard and Reserves but also support local 
economies. What is your assessment about how our Guard and Reserve 
facilities will meet operational needs without additional support in 
the President's budget and by Members of Congress?
    Dr. Robyn. I believe that the Military Departments have appropriate 
processes in place to prioritize their MILCON requirements to meet 
operational needs across the force and incorporate changes to defense 
strategies, policies, and fiscal challenges. Further, the inclusion of 
the Reserve components within the Military Department processes ensures 
that they have a voice in setting these priorities.
                                 ______
                                 
              Questions Submitted by Senator Kelly Ayotte

                  SHIPYARD FACILITY MODERNIZATION PLAN

    43. Senator Ayotte. Secretary Pfannenstiel, I want to note that the 
Navy has not requested any MILCON modernization funds for the 
Portsmouth Naval Shipyard in the last 10 years. It's not that the Navy 
doesn't care about shipyards, but it seems like the ones in Virginia 
and Hawaii have been getting a lot more attention in budget requests. I 
also want to note that the congressional delegations in Maine and New 
Hampshire have responded to this omission by adding a succession of 
critical projects intended to improve efficiencies and capabilities at 
the shipyard. But this is not the proper way to address critical 
shipyard needs.
    GAO released a report in November 2010, titled: ``Defense 
Infrastructure: Actions Needed to Improve the Navy's Processes for 
Managing Public Shipyards' Restoration and Modernization Needs,'' that 
cited numerous concerns with the processes used by the Navy to capture, 
assess, and prioritize facility modernization requirements for 
shipyards. This report found that the Navy's modernization requirements 
at the Nation's four public shipyards were underestimated, even though 
the Navy has stated that the backlog of facility improvements at 
Portsmouth Naval Shipyard is $513 million. GAO recommended that the 
Navy develop guidance to standardize shipyard strategic planning 
requirements, improve its process for developing shipyard restoration 
and modernization needs, and document resolution of identified quality-
of-life issues.
    I couldn't agree more. I believe it should be a core efficiency 
initiative of the Navy to develop a long-term and consistent funding 
plan for our Nation's four public shipyards--including Portsmouth Naval 
Shipyard, and then implement projects to improve their efficiency and 
effectiveness. For example, the current FYDP for the Navy includes a 
project to consolidate structural workshops at Portsmouth. (P-266). 
This project would ultimately save the taxpayers' money by improving 
efficiency of shipyard operations and reducing the cost and duration of 
submarine maintenance. This project is currently planned for the budget 
in fiscal year 2015. Why wait so long to carry out a project that will 
save money?
    Ms. Pfannenstiel. The Navy's fiscal year 2012 budget request 
deliberately targets our shore infrastructure investments to deliver 
the greatest impact on achieving our strategic and operational 
objectives. These investments will increase our warfighting capability, 
enhance nuclear weapons security, support energy initiatives, and 
improve sailor quality of life. The Navy is continuing to invest in the 
Portsmouth Naval Shipyard infrastructure within today's fiscally 
constrained environment through Sustainment (ST), Restoration and 
Modernization (RM), and MILCON. The Navy will continue to assess all 
MILCON requirements, to include the Structural Shop Consolidation 
Project (P266), in order to balance risk across the Navy and provide 
the most capability within fiscal constraints.
    The Navy continues to invest in all four Naval Shipyards. In fiscal 
year 2010, the Navy executed eight O&M (ST and RM) special projects at 
Portsmouth Naval Shipyard (PNSY) with a total value of $40.9 million. 
In fiscal year 2011, the Navy planned additional special projects, 
valued at $17 million, to repair and enable certification of Dry Dock 
#1. Finally, in fiscal year 2012, the Navy plans to invest $100.3 
million in four Energy special projects at PNSY.

    44. Senator Ayotte. Secretary Pfannenstiel, why is this not part of 
the Navy's efficiencies initiatives and included in the budget request 
for 2012?
    Ms. Pfannenstiel. The Navy's fiscal year 2012 budget request 
deliberately targets our shore infrastructure investments to deliver 
the greatest impact on achieving our strategic and operational 
objectives. These investments will increase our warfighting capability, 
enhance nuclear weapons security, support energy initiatives, and 
improve sailor quality of life.
    The Navy will continue to assess all MILCON requirements, to 
include the Portsmouth Naval Shipyard Structural Shop Consolidation 
Project (P266), in future budget submissions in order to balance risk 
across the Navy and provide the most capability within fiscal 
constraints.

    45. Senator Ayotte. Secretary Pfannenstiel, would you agree that 
the Navy's four public shipyards are critical in maintaining fleet 
readiness and supporting ongoing operations worldwide?
    Ms. Pfannenstiel. Yes, the Navy's four public shipyards, along with 
other elements of the Navy's shore infrastructure, are all critical in 
maintaining fleet readiness and supporting ongoing worldwide 
operations.

    46. Senator Ayotte. Secretary Pfannenstiel, please describe what 
actions the Navy has taken to implement the recommendations of the GAO 
report.
    Ms. Pfannenstiel.

Recommendation A:
    Develop guidance that lays out the requirement for the shipyard to 
develop strategic plans that address their future restoration and 
modernization needs and that reflect the seven essential elements of a 
comprehensive strategic planning framework.

Response A:
    The Ship and Submarine Global Shore Infrastructure Plan (GSIP), 
which serves as a higher order strategic document that provides the 
context for the individual shipyard plans, is being finalized. Once the 
GSIP is finalized, NAVSEA will develop guidance to align the individual 
shipyard plans and the Depot Maintenance Infrastructure Plan (DMIP) 
with the GSIP and the 2011 Naval Shipyard Business Plan. The guidance 
will reflect the seven essential elements of a comprehensive strategic 
planning framework as laid out by the GAO report.

Recommendation B:
    Develop and document a method for systematically collecting and 
updating the Navy's configuration and condition information, including 
establishing measurable goals and timeframes, for updating its 
processes so that the data are complete and accurate.

Response B:
    The Infrastructure Condition Assessment Program (ICAP) is in place 
to ensure assessment of the condition of all shipyard buildings and 
waterfront structures (piers, wharfs, etc). Additionally, waterfront 
structures receive a structural inspection on a 6-year cycle. The Navy 
will add conduct a ``pilot program'' assessment of dry docks to 
evaluate the associated costs for inclusion into the ICAP process. 
Finally, the shipyard utility infrastructure is being evaluated for 
potential assessment in the next few years. Updated condition ratings 
from these inspections will be uploaded into the internet Navy 
Facilities Asset Data Store (iNFADS) annually. The Navy currently plans 
to have all waterfront infrastructure (to include dry docks) evaluated 
and relevant data systems updated by fiscal year 2013. Additionally, a 
majority of configuration (functionality) ratings are currently 
available in iNFADS, which will be updated as necessary via the ongoing 
asset evaluation program.

Recommendation C:
    Submit documentation to the Office of the Deputy Under Secretary of 
Defense for Installations and Environment to update the replacement 
unit cost factor for dry docks, so that plant replacement value 
calculations for dry docks, and subsequent restoration and 
modernization cost calculations, more accurately reflect the shipyards' 
unique infrastructure needs.

Response C:
    The Navy is committed to accurately reflecting the magnitude of the 
dry-dock backlog. Navy is pursuing a re-assessment of the Replacement 
Unit Cost factors, and will provide this information to DUSD(I&E).

Recommendation D:
    Develop guidance for the shipyards to systematically collect 
information on and document corrective actions to prioritize and 
address identified quality of life issues.

Response D:
    With workforce safety, health, and quality of life as top 
priorities, the Navy develops comprehensive restoration and 
modernization (RM) projects, based primarily upon the Infrastructure 
Condition Assessment Program (ICAP) and Asset Evaluation (AE) program 
data. These assessments and subsequent projects specifically address 
improvements for people and processes in support of the Shipyard 
mission.
    The Navy cannot address every shortfall in the desired time-frame, 
due to fiscal constraints, so Shipyard projects are evaluated and 
prioritized with all Navy RM projects in accordance with the Navy's 
shore investment strategy. Our shore investment strategy provides shore 
infrastructure that is properly sized and aligned to enable warfighting 
and Joint capabilities, minimizes the decline of critical mission-
essential and quality of life infrastructure, and optimizes warfare 
enterprise outputs and quality of service.
    The Navy is exploring methods to collect additional information on 
shipyard Quality-of-Life and Quality-of-Service issues.

    47. Senator Ayotte. Secretary Pfannenstiel, has the Navy issued 
guidance detailing the need for shipyard strategic plans or what to 
include in them? If so, please provide a copy of that guidance.
    Ms. Pfannenstiel. This guidance has not yet been issued. The Ship 
and Submarine Maintenance GSIP will serve as a higher order strategic 
document to provide the context for individual shipyard plans and is 
being finalized. The estimated completion date is summer 2011. Once the 
GSIP is finalized, NAVSEA will complete guidance to align the facility 
and infrastructure portion of individual shipyard plans with the GSIP. 
The estimated completion date for this guidance is one month after 
completion of the GSIP. The guidance will reflect the seven essential 
elements of a comprehensive strategic planning framework.

               AIR FORCE BASING DECISIONS FOR THE TANKER

    48. Senator Ayotte. Secretary Yonkers, noting the recent 
announcement by the Air Force concerning the award of a contract to 
build a new air refueling tanker, I am aware that the Air Force is now 
in the early stages of the Strategic Basing Process (SBP) that will 
determine where the KC-46A will be stationed. As I am sure you are 
aware, Pease Air National Guard Base in New Hampshire would be an ideal 
location for the stationing of the new tanker. Since so many of the Air 
Force air refueling tanker missions are carried out by Air National 
Guard and Air Reserve units, when will the Air Force make a decision 
about the apportionment of the new aircraft between Active and Reserve 
components?
    Mr. Yonkers. The Strategic Basing process uses criteria-based 
analysis and the application of military judgment, linking mission and 
combatant commander requirements to installation attributes to identify 
locations that are best suited to support any given mission. The 
results of this analysis will be used to inform the basing decisions 
made by the Secretary and Chief of Staff of the Air Force.
    In support of KC-46A basing decisions, Air Mobility Command (AMC), 
is developing basing criteria in a way that best quantifies both 
operational and support requirements related to KC-46A basing. Based on 
these requirements and any Total Force Enterprise Strategic Force mix 
vector, the criteria may reflect the Active Duty/Air Reserve component 
mix, as applicable. After the criteria are finalized and approved by 
the Secretary, a briefing will be made available to interested members 
of Congress and their staffs near the end of this calendar year. AMC 
will then evaluate all Air Force installations against the criteria in 
an Enterprise-Wide Look, to identify candidate bases.
    After the release of the candidate bases list, Air Force site 
survey teams will conduct detailed, on-the-ground, evaluations at each 
candidate location covering a range of operational and facility issues. 
The results of the site surveys will be briefed to the Secretary and 
Chief of Staff who will then select the preferred and reasonable 
alternatives for beddown locations.
    Once the preferred and reasonable alternatives are identified, 
environmental analysis will be conducted in accordance with the NEPA. 
The Secretary and Chief of Staff site selection decision will become 
final after the Environmental Impact Analysis Process is completed.

    49. Senator Ayotte. Secretary Yonkers, will you keep this committee 
informed of any and all developments with this important basing 
process?
    Mr. Yonkers. The Air Force strategic basing process includes 
Congressional engagement opportunities throughout the process. In the 
case of the KC-46A, Congress will be briefed after the basing criteria 
are approved by the SecAF and CSAF, the base candidate list is 
approved, and the preferred alternative (or alternatives) is/are 
designated.

                           FORT BRAGG HOUSING

    50. Senator Ayotte. Secretary Hammack, I am so concerned about the 
situation at Fort Bragg, NC, concerning the tragic, sudden deaths of 12 
infants in military housing with no apparent cause in the last few 
years. With everything else our military members and their families 
have to contend with, they should not have to worry about the safety 
and security of their kids in homes provided by the military. I realize 
that an ongoing Army Criminal Investigation Command's (ACIC) probe is 
underway of the unexplained infant deaths at Fort Bragg, so there is 
limited information available to the public.
    I do know that the Consumer Product Safety Commission (CPSC) 
conducted testing to determine whether Chinese drywall or other 
environmentally unsafe building materials might have been a cause for 
the deaths. In February 2011, CPSC determined that there was no 
evidence of toxic drywall or other environmental factors contributing 
to the infants' deaths.
    I am also aware that a team of medical, epidemiology, industrial 
hygiene, and risk communication subject matter experts assigned to the 
U.S. Army Public Health Command was deployed to Fort Bragg in December 
2010 to initiate an epidemiological consultation regarding the infants' 
deaths among residents of on-post housing. Do you expect to receive a 
report from this team?
    Ms. Hammack. Yes. The team from the U.S. Army Public Health Command 
is in the process of concluding their investigation and will issue a 
report of their findings and recommendations. The team anticipates 
completion of their report by the end of April.

    51. Senator Ayotte. Secretary Hammack, when will the results of the 
team's consultation and investigation be released publicly?
    Ms. Hammack. The U.S. Army Public Health Command's team will 
provide a final report to the Fort Bragg leadership. Given the current 
timeline for completion of the report, we anticipate information will 
be available to the public sometime in May.

    52. Senator Ayotte. Secretary Hammack, do you believe the testing 
conducted on the environmental conditions in the homes has been 
adequate and comprehensive?
    Ms. Hammack. Yes. The homes have been tested extensively by 
multiple outside experts for an extremely comprehensive list of 
potential toxins, pollutants, and other chemicals. The results of the 
thousands of tests performed on these homes indicate that there are no 
known environmental factors that contributed to or caused the 
unfortunate deaths of these infants.

    53. Senator Ayotte. Secretary Hammack, do you believe additional 
testing, such as chamber tests, would be beneficial to comfort those 
families who live with infants in Fort Bragg housing?
    Ms. Hammack. Chamber tests were, in fact, conducted. In addition to 
the extensive testing done by the Consumer Product Safety Commission, 
Ft Bragg also had a contractor analyze drywall samples from 144 
Groesbeek St and 4 Darden St using the closed-chamber off-gassing 
method discussed in recent media reports. Closed-chamber off gassing 
analyses were completed in August 2009 (144 Groesbeek St) and May 2010 
(4 Darden St). Results from these tests were negative. Both the chamber 
testing and elemental sulfur testing completed by the Consumer Products 
Safety Commission of the Bragg drywall samples did not identify the 
presence of corrosive drywall. It is clear from repeated testing of all 
homes being evaluated in the current investigation that none contain 
corrosive drywall. No additional testing is required.

              LEASES FOR MILITARY CONSTRUCTION ACTIVITIES

    54. Senator Ayotte. Dr. Robyn, on January 16, 2007, the DOD 
Inspector General (IG) reported that the Counter Intelligence Field 
Activity (CIFA) had failed to follow the required procedures before 
spending almost $100 million to lease office space in the National 
Capital Region (NCR). The IG reported that CIFA violated ``a myriad of 
statutes,'' including the Anti-Deficiency Act and congressional 
notification and approval requirements in entering into the lease and 
using the lease to fund capital improvements to the leased space, 
including work that would be classified as MILCON.
    Does DOD have guidance or regulations in place that ensure leases 
that include capital improvements are properly reviewed and funded, and 
that the required notifications are submitted to Congress?
    Dr. Robyn. Yes. DOD guidance and regulations that address the 
acquisition of leased facilities and space include:

    (1)  In response to CIFA services contract irregularities, the 
Office of the Under Secretary of Defense (Acquisitions, Technology and 
Logistics) issued two policy memorandums in March 2007 to prevent a 
similar problem from occurring in the future. These policy memorandums 
covered contracts for services and leasing office space.
    (2)  DOD Instruction 5305.5 Space Management Procedures, National 
Capital Region provides specific guidance on the requirements and 
approval process and congressional reporting requirements for 
acquisition of lease space in the NCR.
    (3)  The Services and WHS adhere to the reporting requirements of 
title 10, United States Code 2662. Additionally, each service has real 
property instructions that govern the Acquisition, Management, and 
Disposal of Real Property and Real Property Interests. These service 
specific instructions and regulations provide detailed guidance for 
complying with all applicable statutes dealing with DOD real property.

    55. Senator Ayotte. Dr. Robyn, can you provide a description of any 
leases entered into by a military service or defense agency in the last 
3 years that included a cost for capital improvements carried out by 
the lessor as a requirement of DOD?
    Dr. Robyn. In the last 3 years, the Air Force has entered into 
three leases--one from U.S. Air Forces Europe (Izmir Air Station, 
Turkey) and two from Air Mobility Command (Fairchild AFB), which fit 
this category.
USAFE
         Izmir Air Station, Lease Nr. TUIZ-1680
         Lease Cost: $100,000.00 annually
         Capital Improvement cost: $400,000
         Term of the Lease: 1-year, Dec 15, 2010 thru Dec 14, 2011.
         Purpose of the Lease: Provides approximately 25,000 SF of 
        space for the Izmir Air Station Exchange and Commissary. The 
        building they are moving from can no longer be leased due to 
        Anti-terrorism/ Force Protection requirements. The lessor was 
        asked to make the space ready and to amortize the cost over a 
        5-year term. The project will be ready for occupancy by August 
        31, 2011.
         Location (where): Izmir Air Station, Turkey
AMC
         Port of Moses Lake, DACA67-5-11-6
         Lease Cost: $94,670.00 per month
         Capital Improvement cost: Approximately $15,000
         Term of Lease: 1-year, January 1, 2011 thru December 31, 2011
         Purpose of Lease: This lease is in effect to support 
        installation total runway renovation for aircraft, vehicles, 
        and support equipment necessary to conduct the 92d Air 
        Refueling Wing flying operations. This includes temporary use 
        of the multiuse ramp located on the Southeast side of Taxiway 
        Alpha and North of Hangar #2203, located at the Grant County 
        International Airport. The project should be completed by the 
        end of lease.
         Location (where): Moses Lake, WA
         Measurement Use and Occupancy: Approximately 74 Acres and 
        159,908 Bldgs SF
Spokane International Airport, DACA67-5-11-5
         Lease Cost: $16,767.00 per month
         Capital Improvement cost: Approximately $48,000
         Term of Lease: 1-year, January 1, 2011 thru December 31, 2011
         Purpose of Lease: This lease is necessary to support 
        installation total runway renovation for aircraft parking and 
        aircraft operation for 92d Air Refueling Wing flying during 
        runway close. The project should be completed by the end of the 
        lease.
         Location (where): Spokane, WA
         Measurement Use and Occupancy: Approximately 25.8 Acres

    The Army, Navy and Washington Headquarters Service report that 
during the last 3 years they have not entered into a lease that 
included a cost for capital improvements carried out by the lessor as a 
requirement of DOD.

               ANTI-TERRORISM/FORCE PROTECTION STANDARDS

    56. Senator Ayotte. Dr. Robyn, in the aftermath of September 11, 
DOD revised and strengthened facility standards for anti-terrorism and 
force protection (AT/FP). Part of the revisions to Unified Facilities 
Criteria (UFC) 4-010-01 was to establish minimum AT/FP standards for 
leased space in the NCR that support DOD personnel. Since then, DOD has 
worked diligently to invest in new facilities and leases to ensure that 
DOD personnel were protected in facilities meeting the new standards.
    In 2009, DOD granted temporary relief to the specific requirement 
that all lease renewals executed after September 30, 2009, must comply 
with the enhanced DOD minimum AT/FP criteria for buildings that house 
DOD employees. Further, you were directed to develop, in coordination 
with GSA, a detailed plan of action to acquire UFC AT/FP compliant 
leased-facility space that will enable all DOD employees occupying 
leased facilities in the NCR to be located in AT/FP compliant space. 
What is the status of that plan?
    Dr. Robyn. The temporary relief from full compliance with DOD 
antiterrorism (AT) standards for buildings applied only to leases in 
the National Capital Region (NCR) that were affected by BRAC 2005 
recommendations. Other leases were unaffected.
    The Washington Headquarters Services (WHS), as the leasing agent 
within the NCR, developed a plan in cooperation with the General 
Services Administration (GSA) to have all DOD tenants in the NCR in AT 
compliant space between 2011 and 2016 by utilizing the following 
strategy:

         Retain approximately 2.8 million square feet of space 
        in 54 locations that are compliant.
         Retain approximately 2.4 million square feet of space 
        in 22 locations that are not currently compliant, but by 
        reducing DOD's footprint in each building to below 25 percent 
        of the usable square feet, they would become AT compliant.
         Return approximately 4.5 million square feet of non-
        compliant space in 47 buildings to GSA and vacate approximately 
        350 thousand square feet of space leased by the Army Corps of 
        Engineers
         Acquire approximately 2.5 million square feet of space 
        of new, AT compliant space through GSA.

    WHS has held off implementing the lease acquisition part of the 
plan pending the outcome of a comparative assessment of AT standards 
for leased space. An outcome of this assessment could alter the 
Department's process for conducting AT risk assessments. The assessment 
is ongoing, with a completion targeted for late summer.

    57. Senator Ayotte. Dr. Robyn, can you provide an estimate of the 
approximate square footage and number of DOD personnel in leased space 
in the NCR that do not comply with current AT/FP standards?
    Dr. Robyn. DOD occupies approximately 8,979,279 square feet of 
leased space in the NCR. We estimate that approximately 6,224,217 
square feet square feet out of the total leased space is not UFC ATFP 
compliant space. We further estimate that 31,121 DOD personnel are 
housed in the non-compliant space.

    58. Senator Ayotte. Dr. Robyn, are you in the process of 
reassessing AT/FP standards for leased space? If so, what is the goal 
of the assessment?
    Dr. Robyn. Yes, DOD is now undertaking a comparative assessment of 
AT standards for leased space, with the goal of determining whether DOD 
will continue to use its own AT building standards, or will adopt the 
AT criteria established for the Federal Government at large developed 
by the Interagency Security Committee. The assessment is ongoing, with 
a decision targeted for late summer 2011.

    59. Senator Ayotte. Dr. Robyn, is DOD committed to ensuring a 
consistent standard of protection for its personnel working in leased 
space in the NCR?
    Dr. Robyn. Yes, DOD is committed to ensuring a consistent standard 
of protection for all of its personnel. However, a consistent standard 
of protection does not necessarily equate to a uniform level of 
protection across the board. The existing DOD standard recognizes 
differences in mission sensitivity and threat for different DOD tenant 
organizations that could result in varying levels of protection, all 
within a consistent standard. This is also the case with the security 
criteria developed by the Interagency Security Committee (ISC) for the 
rest of the Federal Government.

                NATIONAL GUARD READINESS CENTERS REPORT

    60. Senator Ayotte. Secretary Hammack, the Senate Armed Services 
Committee last year directed the Secretary of the Army to report to 
this committee no later than February 1, 2011, on the results and 
recommendations of an independent study to review the conditions of 
3,000 readiness/reserve centers (formerly known as armories) for the 
Army National Guard over all 54 States/territories. These readiness 
centers in local communities serve as the primary facilities to support 
unit training as well as State operations. The committee is aware that 
40 percent of the Army National Guard (ARNG) facilities are over 50 
years old and about 40 percent of readiness centers do not adequately 
meet requirements for the support of training for the full range of 
mission essential tasks. Can you provide an update on the status of 
this report?
    Ms. Hammack. The office of the Assistant Secretary of the Army 
(Installations, Energy, and Environment) provided a written response to 
the chairman and ranking member on 18 March 2011. In summary, The Army 
National Guard reviewed the requirement and estimated a national study 
of this scope and scale will require resources beyond those available 
under a Continuing Resolution (P.L. 111-242).

    61. Senator Ayotte. Secretary Hammack, do you have any issues or 
concerns with the reporting requirement that this committee should be 
aware of?
    Ms. Hammack. The only concern is that an assessment of the cost of 
the study shows that is requires funding that is not currently in the 
budget.

    62. Senator Ayotte. Secretary Hammack, when will the report be 
provided to this committee?
    Ms. Hammack. The Army National Guard is eager to begin work on this 
study once funds become available and expects it will take a year to 
complete.

             COSTS OF U.S. MILITARY FORCE POSTURE IN EUROPE

    63. Senator Ayotte. Dr. Robyn, on the issue of our U.S. force 
posture in Europe, the pending announcement of a change in the number 
of Army BCTs to be stationed in Europe for the time being raises 
questions about the certainty of our numbers of our forces over the 
long-term and which bases will endure in Europe. The Secretary of 
Defense announced as part of the budget release for 2012 that the Army 
plans to reduce 15,000 to 20,000 personnel starting in 2015, which is 
consistent with many of our NATO partners, who are also making drastic 
cuts to their military budgets and size of their forces to respond to 
tough fiscal times.
    With this as a backdrop, the President's budget for 2012 includes a 
request for authorization of $1.2 billion to construct a new medical 
center in Germany near Ramstein Air Force Base to replace the aging 
Landstuhl medical center. I know how important Landstuhl is to our 
military, serving as the first stop for extensive care for our severely 
wounded personnel evacuated from Afghanistan. As such, I support the 
construction of a world-class medical center to ensure the best care 
possible.
    This committee's staff has raised concerns with DOD on the size of 
the facility given the dynamic state of force structure in Europe and 
the hope at some point, we will no longer be fighting in the Middle 
East. Are you confident that the size and cost of the facility has been 
reviewed to ensure we are spending over a billion in taxpayers' funds 
in an efficient and effective manner?
    Dr. Robyn. Yes, the size and cost of the Kaiserslautern replacement 
medical facility is the minimum necessary to meet peacetime 
requirements while allowing the flexibility to meet contingency surge 
demands. In addition to the 31,000 beneficiaries supported in the 
immediate Kaiserslautern Military Community, this facility serves a 
catchment population (within a 55-mile radius) of 73,000 beneficiaries, 
and specialty medical referrals coming from another 172,000 
beneficiaries located across EUCOM.
    The facility will comply with world-class standards and evidence-
based design principles. The hospital's size and cost are consistent 
with newly constructed peer facilities with similar patient loads and 
requirements. The facility will include built-in capabilities to meet 
its peacetime beneficiary demands and smoothly transition to address 
contingency operations when necessary. This project is a cost-effective 
solution to the challenges and risks facing our servicmembers and their 
families. The sizeable peacetime beneficiary population that would rely 
on this facility will fully utilize its capabilities and capacity.

    64. Senator Ayotte. Dr. Robyn, can you provide the analysis and 
modeling that was conducted by DOD to develop the scope and cost for 
this medical center?
    Dr. Robyn. I defer to the Tricare Management Activity, Office of 
the Assistant Secretary of Defense for Health Affairs to respond to 
this question as they are responsible for program and project 
development for the initiative.

    65. Senator Ayotte. Dr. Robyn, on the issue of costs for 
maintaining forces in Europe, do you have an estimate of the costs 
incurred by DOD to carry out the announcement today on maintaining Army 
brigades in Europe?
    Dr. Robyn. It will cost the Department $138 million/year for 
fiscal year 2014-2015 to retain four brigades in Europe as the 170th 
BCT and the 172nd BCT were scheduled to return in fiscal year 2012 and 
fiscal year 2013, respectively. Increases in costs are mostly 
associated with military pay allowances, base operations, and schools. 
However, DOD will still realize long-term cost savings associated with 
retaining only three brigades in Europe while maintaining our 
commitment to NATO and our allies.

    66. Senator Ayotte. Dr. Robyn, please provide an estimate of the 
costs to keep installations open and to bring all the facilities at 
that installation up to an adequate standard.
    Dr. Robyn. When two Brigades were programmed for return from 
Europe, the Army planned to close both Bamberg and Schweinfurt, 
Germany. Since a third Brigade will now remain, if one or both of these 
communities must be kept open facilities investments will be required. 
The requirements for MILCON and other Operations and Maintenance 
facilities investments will be considered during the stationing 
analysis and decision processes.

                      NAVAL OPERATIONS IN BAHRAIN

    67. Senator Ayotte. Secretary Pfannenstiel, I realize that the 
events in Bahrain are extremely fluid at this point and the future of 
our critical naval presence at Manama is more a question for the 
Department of State (DOS) and General Mattis at CENTCOM. But the budget 
request for fiscal year 2012 for the Navy includes an authorization of 
$100 million for MILCON at Manama in addition to $252 million provided 
over the past 2 years. I've been told that these funds are not intended 
to support new missions at Manama, but to replace and relocate existing 
facilities. What is the Navy's plan for the use of these funds?
    Ms. Pfannenstiel. The PB12 budget includes six MILCON projects in 
Bahrain over the FYDP to ensure Fleet operational capability. For 2012, 
the budget request includes two projects: Bachelor Quarters/Phase 2 
($55 million) and Waterfront Development/Phase 4 ($45.2 million). These 
projects do not replace or relocate existing facilities. These projects 
support new operational requirements.

    68. Senator Ayotte. Secretary Pfannenstiel, given the uncertainty 
in that country, wouldn't it be prudent to defer these MILCON 
investments until we have a better understanding of the future of our 
forces and their families stationed in Bahrain?
    Ms. Pfannenstiel. Bahrain remains the location for our Naval Forces 
CENTCOM/U.S. Fifth Fleet headquarters, so it is vital to have 
facilities to enable our Navy's forward maritime presence and enable 
rapid crisis response. The PB12 budget includes six MILCON projects in 
Bahrain over the FYDP to ensure Fleet operational capability. The Navy 
will adjust future budget requests if operational conditions change.

         FEDERAL FACILITIES AGREEMENT AT TYNDALL AIR FORCE BASE

    69. Senator Ayotte. Dr. Robyn and Secretary Yonkers, cleanup at DOD 
Superfund sites is routinely conducted under the terms of a Federal 
Facilities Agreement with the Environmental Protection Agency (EPA). I 
understand that DOD has concluded such agreements for all but a handful 
of its Superfund sites. That said, I was concerned to learn that DOD's 
negotiations with EPA over cleanup at Tyndall Air Force Base, Florida, 
which had been ongoing for more than a year have reached a stalemate 
and that EPA has now withdrawn from negotiations and is threatening 
enforcement action against DOD. What is the status of negotiations with 
EPA at Tyndall Air Force Base?
    Dr. Robyn. The Office of the Deputy Under Secretary of Defense 
(Installations & Environment) defers to the Department of the Air Force 
for this QFR response because the Air Force exercises active oversight 
of this issue.
    Mr. Yonkers. In March 2011, EPA responded to a December 2010 Air 
Force proposal by stating that it considered negotiations closed on the 
Federal Facility Agreement (FFA) for Tyndall and is considering ``other 
options.'' The Air Force is not aware of what options EPA is 
considering but is willing to continue discussions at any time.
    In the interim and in order to take whatever action is necessary to 
protect human health and the environment, consistent with applicable 
authorities and requirements, the Air Force decided to press ahead 
expeditiously with cleanup of known releases following the provisions 
of the FFA template agreed to by DOD and EPA in February 2009. The FFA 
template also includes actions to provide for suitable public 
involvement, which the Air Force will implement, and the Air Force will 
continue to request EPA review and approval on various documents as 
provided in the template.

    70. Senator Ayotte. Dr. Robyn and Secretary Yonkers, could an 
enforcement action by EPA at Tyndall impact the ability to conduct 
military training there and over the Gulf of Mexico?
    Dr. Robyn. The Office of the Deputy Under Secretary of Defense 
(Installations & Environment) defers to the Department of the Air Force 
for this QFR response because the Air Force exercises active oversight 
of this issue.
    Mr. Yonkers. Yes. For example, an enforcement action that mandated 
specific actions (e.g., a study to determine if there is a release) for 
a specific area on a range (e.g., an area that included targets) be 
completed by a specific date could limit or conflict with training 
schedules.

    71. Senator Ayotte. Dr. Robyn and Secretary Yonkers, what sort of 
training and how many units use Tyndall's facilities?
    Dr. Robyn. The Office of the Deputy Under Secretary of Defense 
(Installations & Environment) defers to the Department of the Air Force 
for this QFR response because the Air Force exercises active oversight 
of this issue.
    Mr. Yonkers. There are many units throughout DOD and foreign forces 
that use the ranges at Tyndall Air Force Base, an Air Education and 
Training Command (AETC) facility. The primary mission activity at 
Tyndall AFB (TAFB) is the training and evaluation of personnel and 
weapons. The 325th Fighter Wing (FW) conducts academic and hands-on 
training for F-15 Eagle pilots to fly in air superiority roles. 
Training is directed to pilots who have never flown a fighter aircraft, 
experienced pilots converting to, or requalifying in, the F-15 and 
those who will become instructors in the F-15. Currently, the 1st, 2nd, 
and 95th Fighter Squadrons perform the flying training operations of 
the wing. The 43rd Fighter Squadron was recently stood up and now 
trains pilots for the F/A-22 Raptor. Additionally, the 325th Air 
Control Squadron trains air battle managers in the U.S. Air Force.
    The 53rd Weapons Evaluation Group (WEG) conducts air-to-air Weapon 
Systems Evaluations Programs, overseeing flight operations and recovery 
of full-scale (QF-4) and subscale (BQM-34 and MQM-107) drone targets. 
The Air Force, Air National Guard, Navy, Canadian Air Defense Force 
units, and other foreign military forces come to Tyndall to fire their 
missiles at realistic targets over the Gulf of Mexico. It also supports 
Weapons Instructor Course air-to-air formal training syllabi and 
conducts William Tell, the tri-annual worldwide air-to-air weapons 
meet, at Tyndall. The 53rd WEG includes four squadrons; three of these 
squadrons are located at TAFB. They include the 81st Test Support 
Squadron (TSS), the 82nd Aerial Targets Squadron (ATRS), and the 83rd 
Fighter Weapons Squadron (FWS).
    Detachment 1, 823rd Red Horse Squadron (RHS), mission is to provide 
agile combat support training to Active Duty, Air National Guard, and 
Air Force Reserve civil engineer, services, and personnel teams so that 
they can construct, operate, and maintain forward operating bases for 
deployed forces.
    The 372nd Training Squadron, Detachment 4 provides worldwide and 
local training on F-15 aircraft systems and support equipment. 
Customers include all active duty, Air National Guard, and Reserve 
units operating F-15 Eagle aircraft.
    The Noncommissioned Officer (NCO) Academy is a part of Air 
University with the establishment of the College for Enlisted 
Professional Military Education. The Academy has graduated more than 
24,110 students since its origin in March 1957.

    72. Senator Ayotte. Dr. Robyn and Secretary Yonkers, is it limited 
to just those units stationed at Tyndall, or could this possibly impact 
a wider number of DOD units?
    Dr. Robyn. The Office of the Deputy Under Secretary of Defense 
(Installations & Environment) defers to the Department of the Air Force 
for this QFR response because the Air Force exercises active oversight 
of this issue.
    Mr. Yonkers. Any unit, whether stationed at Tyndall or not, that 
uses the operational ranges at Tyndall could be impacted. For example, 
units from the Air National Guard, Navy, Canadian Air Defense Force 
units, and other foreign military forces come to Tyndall to fire their 
missiles at realistic targets over the Gulf of Mexico.
    The inclusion of operational ranges, in their entirety, in an 
agreement that would subject the range's total acreage to cleanup 
processes and regulatory enforcement is unprecedented for the DOD. 
Installations on the National Priorities List (NPL) with Federal 
Facility Agreements (FFA) could be approached to add any operational 
ranges to the agreement. In addition, those installations on the NPL 
that have FFA negotiations ongoing could be expected to include them. 
Thus all units that are on and/or use ranges on NPL installations could 
be affected.

    73. Senator Ayotte. Dr. Robyn and Secretary Yonkers, what are DOD 
and the Air Force doing to try to resolve the issue?
    Dr. Robyn. The Office of the Deputy Under Secretary of Defense 
(Installations & Environment) defers to the Department of the Air Force 
for this QFR response because the Air Force exercises active oversight 
of this issue.
    Mr. Yonkers. After multiple discussions through 2010 and several 
OSD/AF proposals that matched the template agreed upon by OSD and EPA 
in 2009, on March 1, 2011 EPA stated that it considered negotiations on 
the Federal Facility Agreement closed. The Air Force is willing to 
continue negotiations at any time to complete the interagency agreement 
required by the Comprehensive Environmental Response, Compensation and 
Liability Act. The Air Force's first priority is to ensure the 
protection of the communities on and surrounding Tyndall AFB by 
continuing with the cleanup of known releases in an efficient and 
effective manner. We will continue frequent and transparent 
communication with EPA Region 4 in every aspect of the cleanup process.

                   INSTALLATIONS RESTORATION PROGRAM

    74. Senator Ayotte. Dr. Robyn, Secretary Hammack, Secretary 
Pfannenstiel, and Secretary Yonkers, I understand that cleanup of 
hazardous substances other than munitions at active installations is 
conducted under the Installations Restoration Program and that DOD's 
goal is to have a remedy in place or response complete at all its 
active installation cleanup sites by 2014. Are you on track for meeting 
the 2014 goal?
    Dr. Robyn. As of the end of fiscal year 2010, the Department is on 
track to achieve its remedy in place or response complete goal at 99.6 
percent of its 19,865 Installation Restoration Program sites on active 
installations by the end of fiscal year 2014.
    Ms. Hammack. The Army will achieve the fiscal year 2014 Remedy in 
Place (RIP) or Response Complete (RC) goal for more than 99.5 percent 
of its 10,894 Installation Restoration Program sites on active 
installations.
    Ms. Pfannenstiel. 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. The Department has identified 578 additional sites requiring 
cleanup over the past 15 years. We have been working aggressively to 
achieve remedy in place or response for all sites by 2014, but have 
reached the limits of possibility. As of the end of fiscal year 2010, 
we are projecting 46 sites will not meet this DOD goal, but will by 
2017. We consider this a huge success that we have accomplished site 
cleanup at both our original inventory of site as well as 532 
additional sites in this time period.
    Mr. Yonkers. Air Force will have a remedy in place or response 
complete at 99.5 percent of its 6651 active installation cleanup sites 
by 2014. Approximately 32 sites are projected to miss the 2014 goal.

    75. Senator Ayotte. Dr. Robyn, Secretary Hammack, Secretary 
Pfannenstiel, and Secretary Yonkers, is your budget for environmental 
restoration in the fiscal year 2012 request sufficient to meet this 
goal?
    Dr. Robyn. Yes. The budget for environmental restoration in the 
fiscal year 2012 request is sufficient to achieve the goal of remedy in 
place or response complete at all active Installation Restoration 
Program sites by fiscal year 2014. Funding is not the issue for the few 
sites that will not achieve the fiscal year 2014 goal. The sites that 
will not meet the fiscal year 2014 goal are sites with complex cleanup 
requirements.
    Ms. Hammack. Yes. The fiscal year 2012 budget is sufficient for 
meeting the Army's environmental restoration requirements, and funding 
is not the source of the complications that have prevented a few sites 
from meeting the fiscal year 2014 Remedy in Place/Response Complete 
goal.
    Ms. Pfannenstiel. The DON fiscal year 2012 budget for the 
Environmental Restoration, Navy account is sufficient to meet the 
projections described in question 74. Additional funds would have 
limited impact on the 46 site projected to extend past 2014. The 
extended schedules for these sites is driven by the date of site 
discovery and time required to complete regulatory processes and 
community engagement, not lack of funding.
    Mr. Yonkers. Yes, the budget is sufficient. The AF is projecting to 
have remedy in place or response complete at 99.5 percent of its site 
by fiscal year 2014. The 32 sites that may miss the goal are due to 
complex site conditions and a funding increase will not expedite the 
cleanup.

    76. Senator Ayotte. Dr. Robyn, Secretary Hammack, Secretary 
Pfannenstiel, and Secretary Yonkers, if you have sites that will lag 
behind, describe why the goal cannot be achieved on time.
    Dr. Robyn. The Department projects that 80 active Installation 
Restoration Program sites will not achieve the goal to have a remedy in 
place or response complete by fiscal year 2014. There are two primary 
reasons these sites will miss the goal. First, some of these sites have 
complex cleanup requirements that will take several years to complete. 
Second, over the past 2 years DOD discovered 67 new sites. It will take 
time to move these sites through the cleanup phases and achieve the 
goal.
    Ms. Hammack. There are various challenges which we expect to cause 
48 of 10,894 sites to miss the fiscal year 2014 Remedy in Place/
Response Complete goal. At several of these sites, the releases to the 
environment were discovered more recently and response actions are 
still under way. It takes time for the Army to complete the 
investigations, remedy selection, and remedy implementation steps, 
while still including regulatory and public consultation requirements. 
Additionally, technical challenges are being experienced at some sites 
with contaminants that pose particular treatment complications and 
difficult geologic settings. The feasibility studies to confirm the 
effectiveness of remedial approaches are more extensive, and it is time 
consuming to implement these more complex remedies.
    Ms. Pfannenstiel. As described above, the extended schedules for 
these sites is driven by the date of site discovery and time required 
to complete regulatory processes and community engagement, not lack of 
funding. DON is going to far exceed the goal based on the initial site 
inventory from 1996 when the 2014 goal was established.
    Mr. Yonkers. The Air Force projects that 32 sites will miss the DOD 
fiscal year 2014 goal. These are complex sites where investigations are 
taking longer than the AF had expected. We are working closely with the 
regulatory agencies to expedite the investigations and to put remedies 
in place. This is critical, as in some cases regulators are slow or 
decline to coordinate/approve cleanup documents which in turn may slow 
cleanup or if the AF proceeds without regulator participation, the AF 
becomes vulnerable to objections from regulators after cleanup is 
underway or complete. For example, negotiations between the AF and EPA 
over the governing Federal Facilities Agreement at Tyndall AFB are 
stalled. As a result, the AF, while inviting EPA participation, 
anticipates cleanup will proceed without EPA support.

    77. Senator Ayotte. Dr. Robyn, Secretary Hammack, Secretary 
Pfannenstiel, and Secretary Yonkers, I understand that cleanup of all 
of DOD's military munitions and their components at both its active and 
inactive sites is a huge undertaking and that cleanup is a long-term 
undertaking and liability that may take decades and cost billions. What 
is your estimate of the extent of the cleanup required under the 
Military Munitions Response Program (MMRP) and how long do you estimate 
it will take to complete the cleanup?
    Dr. Robyn. The Department has nearly 4,500 MMRP sites in its 
inventory, with an estimated cost to complete cleanup, including long-
term management (LTM), of $15.2 billion. The Department projects that 
it will complete cleanup, with the exception of LTM, at:

         95 percent of MMRP sites on active installations by 
        the end of fiscal year 2021.
         95 percent of MMRP sites on Legacy BRAC installations 
        by the end of fiscal year 2018.
         95 percent of MMRP sites on BRAC 2005 installations by 
        the end of fiscal year 2016.

    The Department is in the process of completing site inspections 
(SI) at MMRP sites on Formerly Used Defense Site properties. Once the 
Department completes the remaining SIs, it will have a better 
understanding of the cleanup requirements associated with these sites.
    Ms. Hammack. DOD established goals for the active Sites, Legacy 
BRAC and BRAC 2005 MMRP. The Army has 1,528 of these MMRP sites with an 
estimated cost to complete of $13.8B.

         The Army will achieve approximately 99.7 percent of 
        the fiscal year 2020 Response Complete (RC) goal for Active 
        MMRP sites.
         Legacy BRAC MMRP completed 58 percent of its fiscal 
        year 2009 RC goal. The Legacy BRAC MMRP is projected to achieve 
        RC by 2030, however, any installation that had sites that 
        presented an imminent and substantial endangerment to human 
        health or safety or the environment have been addressed.
         The BRAC 2005 MMRP is projected to meet its RC goal of 
        fiscal year 2017.
         The DOD has not established an MMRP RC goal for the 
        Formerly Used Defense Site (FUDS) Program for which the Army is 
        the Executive Agent. Munitions response actions at FUDS are 
        more complex, given that DOD no longer controls the property 
        and often there are other responsible parties involved in the 
        property's restoration. The Army expects to achieve RC for all 
        MMRP sites in the FUDS inventory in about 50 years.

    Ms. Pfannenstiel. DON has identified a total of 330 munitions 
response sites to date. We currently have achieved remedies in place or 
response complete at of these sites (37 percent). We are on track to 
achieve 100 percent remedies in place or response complete by 2021.
    Mr. Yonkers. Given the known parameters and setting the goal as 
site completion, our planned estimated cost at this time is $1.2 
billion; however, this estimate does not include water ranges and 
operational ranges. The Air Force expects to complete the preliminary 
site assessments by 2011, to complete 90 percent of our responses by 
2018, and to complete 95 percent of our responses by 2021. If the EPA 
sets cleanup standards for additional munitions constituents, or 
tightens standards for the cleanup of constituents that are already 
regulated, the cost will increase and the scheduled cleanup will be 
delayed.

    78. Senator Ayotte. Dr. Robyn, Secretary Hammack, Secretary 
Pfannenstiel, and Secretary Yonkers, DOD has planned for years to shift 
resources to the MMRP when cleanup of other hazardous substances at 
active installations is complete. Now, however, there are enormous 
fiscal pressures on the budget. Is such a shift of funding priority 
going to survive budgetary pressures?
    Dr. Robyn. Yes. Despite budgetary pressures, the Department expects 
that funding will be sufficient to switch resources to the Military 
Munitions Response Program when cleanup of other hazardous substances 
at active installations is complete.
    Ms. Hammack. The Army expects that there will be sufficient funds 
appropriated for necessary response actions at MMRP sites that pose an 
unacceptable risk or hazard to human health or safety or the 
environment. The Army will continue to seek funding to address these 
requirements.
    Ms. Pfannenstiel. All programs are experiencing budgetary 
pressures. However, DON is still planning to shift resources to the 
MMRP when cleanup of other hazardous substances at active installations 
is complete.
    Mr. Yonkers. My goal is to achieve clean up of all contamination 
(hazardous substance and Military Munitions) and bring the Air Force 
land back to full mission use. I feel confident that we will maintain 
sufficient funding to carry on the cleanup in an expeditious manner 
even under the severe budgetary pressure. We continue to create 
efficiencies and opportunities in our Defense Environmental Restoration 
Account (DERA) and BRAC program. AF policy signed Feb 2011 refocuses 
the AF's DERA and BRAC cleanup program from meeting intermediary 
cleanup milestones to accelerating site completion. Using a 
performance-based restoration approach to address this new focus is 
just one example of the AF's use of efficiencies to maximize the use of 
available funding.

    79. Senator Ayotte. Dr. Robyn, Secretary Hammack, Secretary 
Pfannenstiel, and Secretary Yonkers, I understand that DOD has been 
pursuing technology that could vastly decrease the cost of unexploded 
ordnance (UXO) cleanup and much more rapidly result in turning land 
back over to States and communities for productive use. What can you 
tell me about this technology and your efforts to gain its acceptance 
by regulators and the contractor community which does cleanup work?
    Dr. Robyn. The Department is supporting the Unexploded Ordnance 
(UXO) Live Site Demonstration Project, which uses a classification 
technology that assists in discriminating UXO from scrap. The 
Department is working to demonstrate that the technology is effective 
at actual munitions response sites of varying degrees of complexity. 
This technology is particularly important because the Department wastes 
an extraordinary amount of time and money unearthing harmless scrap. 
With this new technology, we will be able to focus on removing only 
those items we deem to be harmful. The Defense Science Board has 
indicated this could reduce our UXO cleanup costs by 75 percent. We are 
working with EPA's Federal Facilities Restoration and Reuse Office, the 
Environmental Council of States, and the Association of State and 
Territorial Solid Waste Management Officials to ensure environmental 
regulators are familiar with the technology and can give it their 
support at future munitions response site cleanups. We are also working 
with the National Association of Ordnance Contractors and the U.S. Army 
Corps of Engineers to identify and resolve contracting disincentives to 
the use of innovative technologies as a whole in DOD's environmental 
cleanup program.
    Ms. Hammack. The DOD has invested $89 Million in developing 
munitions response technologies over the last several years. Although 
these technologies are advancing significantly, the next generation 
technologies are not yet fully mature. DOD, its contractors, and most 
regulators, understand that there is no single technology that will 
support the varying conditions (e.g., geology, different munitions-
related activities that occurred, the variety of munitions used, the 
physical differences and varying land uses) found within a given 
munitions response site (MRS) and across all MRS. Metal detection and 
characterization technologies that are better able to discriminate 
between scrap metal and munitions related items have gone through the 
demonstration and ESTCP validation process. Although this technology is 
commercially available, its use has been limited and has received 
varying levels of regulatory acceptance.
    Ms. Pfannenstiel. DON is not directly responsible for this issue, 
and therefore DON does not have an opinion or response relating to this 
issue.
    Mr. Yonkers. OSD is the lead for Un-exploded Ordnance (UXO) cleanup 
technology development, and I must refer you to them for the answer on 
cost savings should UXO discrimination techniques prove promising.
    Although OSD is the lead for UXO technology development, we support 
their effort and have provided funding to OSD to help their development 
effort. We will be working closely to implement these technologies on 
the AF installations to reduce our cleanup cost. In addition I would 
like to point out that we are also investing in a number of 
technologies that promote good stewardship of active bombing and 
gunnery ranges. Good stewardship is a top priority within the AF and 
responsible management of range lands will enable future efforts should 
DOD decide to close and transfer these lands for commercial use. Many 
of our AF Research Labs work closely with the U.S. Army Corps of 
Engineers, Strategic Environmental Research and Development Program 
(SERDP), and the ESTCP to test and validate UXO and range clearance 
processes. This includes UXO discrimination techniques and use of 
robotics for the safety of UXO personnel. DOD has been pursuing such 
technology for over a decade; partnering with industry through the 
SERDP/ESTCP venues. The primary issue with UXO clearance technology 
always comes down to safety of DOD or UXO contract personnel.
    Another organization the AF works closely with is the UXO Center of 
Excellence (UXOCOE) who is responsible for centrally coordinating DODs 
UXO research and engineering detection and neutralization technology 
efforts to ensure that required technology needs are met, while at the 
same time avoiding duplication and ensuring efficiencies within DOD.

                               BRAC SITES

    80. Senator Ayotte. Dr. Robyn, Secretary Hammack, Secretary 
Pfannenstiel, and Secretary Yonkers, where does DOD stand on cleanup of 
its legacy BRAC sites, those that were closed under BRAC rounds before 
2005?
    Dr. Robyn. The Department is working aggressively to complete the 
cleanup of legacy BRAC sites. By the end of 2010, the Department, in 
cooperation with State agencies and the U.S. EPA, had completed cleanup 
activities on 81 percent of the Installation Restoration Program sites, 
and it is now monitoring the results. For the Military Munitions 
Response Sites, the comparable figure is 67 percent.
    Using existing authorities, the Department is able to transfer the 
remaining sites to a redevelopment authority while cleanup continues, 
if the community is interested.
    Ms. Hammack. The Army legacy BRAC program has completed cleanup at 
1,847 (91 percent) of 2,035 environmental sites at 118 installations 
that closed during BRAC rounds in 1988, 1991, 1993, and 1995. The 
estimated cost to complete cleanup (including compliance costs) at the 
remaining 188 sites is $1,008 million. This includes long-term 
management with a target completion date of 2030.
    Ms. Pfannenstiel. DON 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 fiscal year 2011 and beyond is 
approximately $1.3 billion. At the end of fiscal year 2010, DON has 
disposed of 93 percent of Prior BRAC properties and has 12,353 acres 
remaining for disposal.
    Mr. Yonkers. Of 1,950 legacy BRAC environmental sites, the Air 
Force has achieved site completion at 1,092 (56 percent). The Air Force 
goal is to complete 75 percent of all BRAC environmental sites by the 
end of 2012, and 90 percent by the end of 2015.
    Of the original 87,000 acres excessed in legacy BRAC, 78,000 acres 
(90 percent) have been transferred. Final legacy BRAC whole base 
property transfer is scheduled for fiscal year 2014. The Air Force has 
supported expeditious community reuse and redevelopment of property 
that is not available for immediate conveyance with long-term leases in 
furtherance of conveyance. These leases allow the communities to begin 
redevelopment efforts in advance of receipt of the property by deed, 
further enhancing economic recovery.

    81. Senator Ayotte. Dr. Robyn, Secretary Hammack, Secretary 
Pfannenstiel, and Secretary Yonkers, where do we stand on cleanup of 
the 2005 BRAC sites?
    Dr. Robyn. The Department is working aggressively to complete the 
cleanup of BRAC 2005 sites. By the end of 2010, the Department, in 
cooperation with State agencies and the EPA, had completed cleanup 
activities on 40 percent of the Installation Restoration Program sites, 
and it is now monitoring the results. For the Military Munitions 
Response Sites, the comparable figure is 39 percent.
    Using existing authorities, the Department is able to transfer the 
remaining sites to a redevelopment authority while cleanup continues, 
if the community is interested.
    Ms. Hammack. The Army has completed cleanup at 71 (54 percent) of 
155 environmental sites at 18 installations closing under BRAC 2005 
that have cleanup requirements. The cost to complete cleanup (including 
compliance costs) at the remaining 71 sites is $398 million. This 
includes long-term management with a target completion date of 2017.
    Ms. Pfannenstiel. DON has spent about $170 million on environmental 
cleanup, environmental compliance, and program management costs at BRAC 
2005 locations through fiscal year 2010. Our cost to complete remaining 
environmental cleanup for fiscal year 2011 and beyond is $117 million. 
At the end of fiscal year 2010, DON has disposed of 45 percent of BRAC 
2005 properties and has 10,131 acres remaining for disposal.
    Mr. Yonkers. Of 81 BRAC 05 environmental sites, the Air Force has 
achieved site completion at 56 (69 percent). The Air Force goal is to 
complete 75 percent of all BRAC environmental sites by the end of 2012, 
and 90 percent by the end of 2015. Six of our eight BRAC 05 
installations will have all environmental sites completed before 15 
September 2011. The remaining 2 installations have 23 sites including 
groundwater cleanup that will continue beyond September 2011.
    To date, 164 (23 percent) of the original 700 BRAC 05 acres have 
been transferred, which includes the whole base transfer of the former 
General Mitchell Air Reserve Station (ARS), WI. Final BRAC 05 whole 
base transfer is scheduled for fiscal year 2013.

    82. Senator Ayotte. Dr. Robyn, Secretary Hammack, Secretary 
Pfannenstiel, and Secretary Yonkers, when do you think all BRAC sites 
will be cleaned up and turned over--when are we done?
    Dr. Robyn. Using existing authorities, the Department is able to 
transfer the remaining sites to a redevelopment authority while cleanup 
continues, if the community is interested. Therefore, when all of the 
BRAC sites will be turned over will depend on the communities' interest 
and ability to redevelop the properties.
    The Department projects that it will complete cleanup at 95 percent 
of the hazardous waste sites on Legacy BRAC installations by the end of 
fiscal year 2018; at all Military Munitions Response Program (MMRP) 
sites on Legacy BRAC installations by the end of fiscal year 2042; at 
all hazardous waste sites on BRAC 2005 installations by the end of 
fiscal year 2041; and at all MMRP sites on BRAC 2005 installations by 
the end of fiscal year 2017.
    Ms. Hammack. The Army BRAC Environmental Program projects that RIP/
RC will be achieved at Army installations closing under the BRAC 2005 
by fiscal year 2017. Legacy BRAC installations are projected to achieve 
RIP/RC by 2030.
    Ms. Pfannenstiel. The majority of sites are scheduled to have an 
environmental remedy in place by fiscal year 2015. Long term 
monitoring, however, will continue to fiscal year 2040 and beyond for 
sites such as groundwater plumes, landfills, and sites with restricted 
use.
    Most sites are also scheduled to be transferred by fiscal year 2015 
with the last installations scheduled to be transferred in fiscal year 
2020.
    Mr. Yonkers. The Air Force goal is to complete 90 percent of all 
legacy BRAC environmental sites by the end of 2015. We are unable to 
provide of a definitive time when the last of the cleanups will be 
completed. For example, groundwater cleanup is complex and completion 
could take decades.
    Final legacy BRAC whole base transfer is scheduled for fiscal year 
2014. Of the original 87,000 acres excessed in legacy BRAC, 78,000 
acres (90 percent) have been transferred. The Air Force retains 
responsibility to complete environmental remediation on any open sites 
at the time of transfer.

    83. Senator Ayotte. Dr. Robyn, on the issue of the 2005 round of 
BRAC, as you may know, DOD is required by law to complete all actions 
resulting from the 2005 BRAC round by September 15, 2011. As of this 
date only 6 months away from the statutory deadline, DOD has 
accumulated hundreds of millions of dollars in savings due to the 
economic downturn, and as opposed to returning those funds to the 
General Treasury, is now considering spending those funds on additional 
projects that do not directly support the BRAC moves. From a fiscal 
responsibility perspective, has DOD established a policy to determine 
which additional projects can be funded from the BRAC account?
    Dr. Robyn. It is not the Department's policy to fund additional 
support facilities simply because bid savings are available. As you are 
aware, however, the BRAC statute gives the Department the authority and 
flexibility to reprogram funds within the BRAC account in furtherance 
of implementation, and we have used this flexibility to ensure that 
BRAC recommendations are implemented efficiently and effectively. For 
example, the Department increased funding for construction projects to 
address the unfavorable market conditions that existed earlier in the 
implementation period. We also used this authority to apply savings to 
offset cost growth due to unexpected site conditions and to address the 
concerns of Congress regarding the quality of facilities being built at 
the new Walter Reed National Military Medical Center at Bethesda.

    84. Senator Ayotte. Dr. Robyn, will every support facility on a 
military installation that may have an impact from a BRAC move 
supporting incoming personnel be eligible for improvements or 
replacement using BRAC funds?
    Dr. Robyn. Throughout the six-year implementation process, the DOD 
Components have made decisions to fund projects that they felt were 
necessary to support BRAC implementation. My office has reviewed these 
decisions regularly and found them to be both prudent and fully within 
the authority provided by the BRAC statute.

    85. Senator Ayotte. Dr. Robyn, according to current policy, can the 
Services continue to identify and award new MILCON projects indirectly 
supporting functions right up to the BRAC statutory completion date?
    Dr. Robyn. There are some direct and indirect infrastructure 
projects where some elements of construction will continue after 
September 15, 2011. The Department is working diligently to ensure we 
satisfy our BRAC legal obligations, even if some construction continues 
past the deadline.

    86. Senator Ayotte. Dr. Robyn, does the Office of the Secretary of 
Defense (OSD) have an estimate of the impact of funding projects from 
the BRAC account that are not directly supporting the relocating 
function will have on total 2005 BRAC expenditures and projected 
savings?
    Dr. Robyn. The costs and savings associated with the projects are 
imbedded within the $35B implementation cost and $4 billion annual 
savings generated by BRAC 2005. This represents the combined effort of 
the 222 recommendations that the Department is executing. We do not 
have an explicit break out of projects deemed ``direct'' or indirect'' 
within each recommendation.

    87. Senator Ayotte. Secretary Hammack, in April 2010, the Army 
notified Congress of its intent to use BRAC bid savings to award a 
MILCON project to construct an eating establishment that would be run 
by a contracted vendor in support of Army Material Command (AMC) 
Headquarters at Redstone Arsenal, Alabama. Both the Senate Armed 
Services Committee and the Senate Appropriations Committee expressed 
concerns with using BRAC MILCON funds for this purpose and asked the 
Army to consider the use of proceeds from a non-appropriated fund 
contract for the operation of other eating establishments at Redstone 
Arsenal to fund the construction of the AMC eatery. Please provide an 
update on the status of this project.
    Ms. Hammack. The Army issued a conditional award to Aramark, the 
only offeror for a combined Missile Defense Agency (MDA)/AMC project, 
in late January and we have been in negotiations with them since that 
time. Our approach bundled the operation of the MDA cafeteria and a 
small coffee shop with a Public Private Venture (PPV) to fund, design, 
construct and operate the AMC Cafeteria without executing the MILCON 
project. When negotiations are complete and the required Congressional 
approval is received for the PPV project, we expect construction to be 
complete in 10 months.

    88. Senator Ayotte. Secretary Hammack, can you provide the 
justification, a collective bargaining agreement in this case, that was 
used to justify the need to build a dedicated cafeteria next to the new 
AMC headquarters building?
    Ms. Hammack. The current bargaining agreement requires us to 
negotiate if we change any work conditions of the bargaining employees; 
food service would be included in that category. Thus, since we are 
able to provide hot lunch options on site today at Belvoir, we would 
have to negotiate with the union if we were not able to provide that 
option at Redstone Arsenal. The following is a quote from the Federal 
Labor Relations Authority (FLRA).
    ``FLRA precedent states that bargaining proposals related to food 
services and prices concern conditions of employment. The FLRA 
concluded that the precedent applied to these proposals, so they were 
within the duty to bargain.''
    While there are other food service facilities in operation on 
Redstone Arsenal, they are not in close proximity, they currently 
operate near capacity, and some are located in secure facilities that 
preclude access to AMC employees. There are also food service 
facilities off of the installation, but delays getting on and off post 
make their use an unattractive option that would reduce worker and 
organizational productivity.

                    CAMP LEJEUNE WATER CONTAMINATION

    89. Senator Ayotte. Dr. Robyn and Secretary Pfannenstiel, there is 
a long history of mistrust between people who believe they were exposed 
to harmful chemicals that resulted in adverse health impacts due to the 
drinking water contamination at Camp Lejeune, NC, and the U.S. 
Government. As required by the Superfund law, the Agency for Toxic 
Substances Disease Registry (ATSDR), which falls under the Department 
of Health and Human Services, has been studying the possible adverse 
health impacts at Camp Lejeune since 1993.
    What is the Navy doing to work with the ATSDR to complete their 
studies of the contamination of the water system at Camp Lejeune and 
any possible adverse health impacts that resulted from it?
    Dr. Robyn. The Office of the Deputy Under Secretary of Defense 
(Installations & Environment) defers to DON for this QFR response 
because the DON staff exercises active oversight of the issue.
    DON response: The DON remains committed to taking care of marines, 
sailors, their families, and civilian workers. At Camp Lejeune, that 
means seeking answers to the many questions surrounding the historic 
water quality issue.
    Since 1991 the DON has provided more than $27 million in funding to 
support scientific research and health initiatives on this issue to 
investigate whether diseases and disorders experienced by former 
residents and workers are or are not associated with their exposure to 
contaminants in the water at Camp Lejeune. Of this funding, more than 
$26 million has been provided to ATSDR.
    In addition, the DON has spent thousands of hours and more than $2 
million collecting information for past and ongoing health and research 
initiatives. Our information collection and sharing initiatives, which 
included a base-wide document search of Camp Lejeune, are unique in 
their breadth and scope. In 2010, the DON and ATSDR formed the Camp 
Lejeune Data Mining Technical Work Group (CLDMTWG) in a joint effort to 
complete the ongoing data discovery and collection process and ensure 
ATSDR possesses all relevant data and information needed for their 
health activities. In a March 2011 status update DON and ATSDR leads 
for the CLDMTWG agreed that: Pursuant to the Charge and the goals of 
the Workgroup, the two agency leads are confident that the Workgroup 
has successfully created an accurate and complete inventory. Further, 
the continued efforts of the Workgroup members have ensured that ATSDR 
representatives have received full access to all relevant information 
identified in the inventory.
    Ms. Pfannenstiel. The DON remains committed to taking care of 
marines, sailors, their families, and civilian workers. At Camp 
Lejeune, that means seeking answers to the many questions surrounding 
the historic water quality issue.
    Since 1991 the DON has provided more than $27 million in funding to 
support scientific research and health initiatives on this issue to 
investigate whether diseases and disorders experienced by former 
residents and workers are or are not associated with their exposure to 
contaminants in the water at Camp Lejeune. Of this funding, more than 
$26 million has been provided to ATSDR.
    In addition, the DON has spent thousands of hours and more than $2 
million collecting information for past and ongoing health and research 
initiatives. Our information collection and sharing initiatives, which 
included a base-wide document search of Camp Lejeune, are unique in 
their breadth and scope. In 2010, the DON and ATSDR formed the CLDMTWG 
in a joint effort to complete the ongoing data discovery and collection 
process and ensure ATSDR possesses all relevant data and information 
needed for their health activities. In a March 2011 status update DON 
and ATSDR leads for the CLDMTWG agreed that: Pursuant to the Charge and 
the goals of the Workgroup, the two agency leads are confident that the 
Workgroup has successfully created an accurate and complete inventory. 
Further, the continued efforts of the Workgroup members have ensured 
that ATSDR representatives have received full access to all relevant 
information identified in the inventory.

    90. Senator Ayotte. Dr. Robyn and Secretary Pfannenstiel, what is 
the Navy and the Marine Corps doing to ensure former marines, Navy 
personnel, and civilian employees and their families that they are 
committed to finding out the truth and doing what is right on this 
issue?
    Dr. Robyn. The Office of the Deputy Under Secretary of Defense 
(Installations & Environment) defers to DON for this QFR response 
because the DON staff exercises active oversight of the issue.
    DON response: The welfare of our marines, sailors, and their 
families has been, and always will be a top priority for DON. We 
continue to work diligently to identify and notify individuals who may 
have been exposed to the past water contamination. The Marine Corps 
operates a comprehensive outreach and notification program, which 
includes a call center and online registry, direct notification by 
letter, and supplemental notification through the media. To date the 
Marine Corps has collected more than 168,000 names and sent out well 
over 200,000 direct notifications.
    DON also continues to seek answers to the many questions 
surrounding the historic water quality issue at Camp Lejeune. Since 
1991 the DON has provided more than $27 million in funding to support 
scientific research and health initiatives on this issue. These health 
initiatives include work by the ATSDR and the National Academies, 
National Research Council.
    Ms. Pfannenstiel. The welfare of our marines, sailors, and their 
families has been, and always will be a top priority for the DON. We 
continue to work diligently to identify and notify individuals who may 
have been exposed to the past water contamination. The Marine Corps 
operates a comprehensive outreach and notification program, which 
includes a call center and online registry, direct notification by 
letter, and supplemental notification through the media. To date the 
Marine Corps has collected more than 168,000 names and sent out well 
over 200,000 direct notifications.
    DON also continues to seek answers to the many questions 
surrounding the historic water quality issue at Camp Lejeune. Since 
1991 the DON has provided more than $27 million in funding to support 
scientific research and health initiatives on this issue. These health 
initiatives include work by the ATSDR and the National Academies, 
National Research Council.

    91. Senator Ayotte. Dr. Robyn and Secretary Pfannenstiel, how long 
do you think it will take to complete all the studies that ATSDR has 
ongoing?
    Dr. Robyn. The Office of the Deputy Under Secretary of Defense 
(Installations & Environment) defers to DON for this QFR response 
because the DON staff exercises active oversight of the issue.
    DON response: ATSDR currently has four research initiatives planned 
or underway (water modeling, a birth defects and childhood cancer 
study, a health survey, and a mortality study). ATSDR has projected 
that these studies will be completed by 2013. Additionally, ATSDR is 
considering a cancer incidence study contingent upon the results of the 
health survey.
    Ms. Pfannenstiel. ATSDR currently has four research initiatives 
planned or underway (water modeling, a birth defects and childhood 
cancer study, a health survey, and a mortality study). ATSDR has 
projected that these studies will be completed by 2013. Additionally, 
ATSDR is considering a cancer incidence study contingent upon the 
results of the health survey.

    92. Senator Ayotte. Dr. Robyn and Secretary Pfannenstiel, I 
understand there have been some disputes in the past on ATSDR. Has the 
Navy agreed to fund all of ATSDR's requested studies?
    Dr. Robyn. The Office of the Deputy Under Secretary of Defense 
(Installations & Environment) defers to DON for this QFR response 
because the DON staff exercises active oversight of the issue.
    DON response: ATSDR is funded by DON through a negotiated annual 
plan of work (APOW). ATSDR has been fully funded ($3.921 million) by 
DON for fiscal year 2011. The APOW for fiscal year 2012 will be 
negotiated later this fiscal year.
    Ms. Pfannenstiel. ATSDR is funded by DON through a negotiated APOW. 
ATSDR has been fully funded ($3.921 million) by DON for fiscal year 
2011. The APOW for fiscal year 2012 will be negotiated later this 
fiscal year.

    93. Senator Ayotte. Dr. Robyn and Secretary Pfannenstiel, has the 
Navy and the Marine Corps turned over to ATSDR all the necessary 
historical materials about the water system and testing of the water to 
inform ATSDR's studies?
    Dr. Robyn. The Office of the Deputy Under Secretary of Defense 
(Installations & Environment) defers to DON for this QFR response 
because the DON staff exercises active oversight of the issue.
    Ms. Pfannenstiel. ATSDR has had access to information under DON 
control since their Public Health Assessment began in 1991. Since 1991, 
DON has assisted ATSDR's work by searching for, collecting, and 
providing pertinent documents. By 2000, DON shifted its focus to 
consolidating and archiving these documents, and in 2005 DON provided a 
database of such documents to ATSDR. In 2005, DON also contracted with 
Booz Allen Hamilton to provide comprehensive, transparent document 
search and collection covering all Camp Lejeune areas and facilities in 
an effort to fully identify the universe of information potentially 
related to the historic drinking water issue. ATSDR provided input on 
search parameters and has always had access to these documents as well. 
In a joint effort to complete the ongoing data discovery and collection 
process and ensure ATSDR possesses all relevant data and information 
needed for their health activities, the DON and ATSDR formed a CLDMTWG. 
In a joint March 2011 memo, DON and ATSDR leads for the CLDMTWG agreed 
that: Pursuant to the Charge and the goals of the Workgroup, the two 
agency leads are confident that the Workgroup has successfully created 
an accurate and complete inventory. Further, the continued efforts of 
the Workgroup members have ensured that ATSDR representatives have 
received full access to all relevant information identified in the 
inventory.

    94. Senator Ayotte. Dr. Robyn and Secretary Pfannenstiel, why has 
it taken so long to ensure ATSDR had all the data that was available?
    Dr. Robyn. The Office of the Deputy Under Secretary of Defense 
(Installations & Environment) defers to DON for this QFR response 
because the DoN staff exercises active oversight of the issue.
    Ms. Pfannenstiel. DON has always been committed to assisting ATSDR 
by providing information necessary for their health initiatives at Camp 
Lejeune. ATSDR has had access to information under DON control since 
their Public Health Assessment began in 1991. Since 1991, DON has 
assisted ATSDR's work by searching for, collecting, and providing 
pertinent documents. By 2000, DON shifted its focus to consolidating 
and archiving these documents, and in 2005 DON provided a database of 
such documents to ATSDR. In 2005, DON also contracted with Booz Allen 
Hamilton to provide comprehensive, transparent document search and 
collection covering all Camp Lejeune areas and facilities in an effort 
to fully identify the universe of information potentially related to 
the historic drinking water issue. ATSDR provided input on search 
parameters and has always had access to these documents as well. This 
has included numerous ATSDR site visits, interviews, meetings, and 
document requests. As ATSDR's information needs have evolved over the 
years, the DON's data management efforts have evolved to meet those 
needs. The DON has spent thousands of hours and more than $2 million 
collecting information for past and ongoing health and research 
initiatives. Our information collection and sharing initiatives, to 
include a base-wide document search of Camp Lejeune, are unique in 
their breadth and scope. In 2010, DON and ATSDR recognized that it was 
important to make an additional final effort to ensure ATSDR had all of 
the data and information needed for their health initiatives at Camp 
Lejeune. This led to the establishment of the CLDMTWG, a joint effort 
between DON and ATSDR to complete the ongoing data discovery and 
collection process and ensure ATSDR possesses all relevant data and 
information needed for their health activities. In a March 2011 status 
update DON and ATSDR leads for the CLDMTWG agreed that: Pursuant to the 
Charge and the goals of the Workgroup, the two agency leads are 
confident that the Workgroup has successfully created an accurate and 
complete inventory. Further, the continued efforts of the Workgroup 
members have ensured that ATSDR representatives have received full 
access to all relevant information identified in the inventory.

                SERVICE SUPPORT FOR SCHOOL CONSTRUCTION

    95. Senator Ayotte. Dr. Robyn, the budget request for 2012 and the 
FYDP includes over $3 billion to modernize aging elementary, middle, 
and high schools operated by DOD Education Activity (DODEA). I 
wholeheartedly support the Secretary's priority to ensure that the 
schools owned by DOD meet world-class standards for the benefit of our 
military families.
    This committee directed in last year's defense bill by requiring 
the Secretary of Defense ``to establish a formal process whereby the 
best practices and design innovations in public and private school 
construction can be incorporated into the design of DODEA schools. The 
Secretary shall ensure that the process encourages the use of 
sustainable designs, green building systems, acoustics management, 
student safety/security, and interactive technology to create a 
positive learning environment for children and an efficient teaching 
environment for faculty.'' How is DOD complying with this requirement?
    Dr. Robyn. In April of this year, DODEA established a formal 
process whereby the best practices and design innovations in public and 
private school construction can be incorporated into the design of 
DODEA schools. In addition to the emphasis on sustainability and energy 
conservation, the process will also focus on advances in education, 
curriculum delivery, and innovative uses of technology. Final facility 
specifications will result in schools that are flexible and adaptable, 
allowing DODEA to adjust to new and innovative ways to deliver 
instruction in a positive learning environment for children and an 
efficient teaching environment for faculty.

    96. Senator Ayotte. Dr. Robyn, is DOD committed to the 
establishment of standards for DODEA schools that will result in world-
class education facilities for the children of military personnel?
    Dr. Robyn. DODEA is committed to production of new school facility 
design standards. In April of this year, a symposium, including 
participation by public and DODEA school educators, university faculty, 
and private sector architects and engineers, established a formal 
process whereby the best practices and design innovations in public and 
private school construction can be incorporated into the design of 
DODEA schools. This process will take into consideration innovations in 
education, curriculum delivery, use of technology, and requirements for 
sustainability and energy conservation. Final facility specifications 
will result in design standards for world-class education facilities to 
support the children of our military personnel.

    97. Senator Ayotte. Dr. Robyn, will the best practices and design 
innovations identified in the process be incorporated into the plans 
for new schools authorized by Congress in the 2011 defense bill?
    Dr. Robyn. DODEA is in the process of identifying best practices 
and design innovations that can be incorporated in fiscal year 2011. 
The fiscal year 2011 construction contract solicitations will be 
revised, to the extent possible and within budgets, to allow the 
maximum inclusion in fiscal year 2011 school construction.

    98. Senator Ayotte. Dr. Robyn, Secretary Hammack, Secretary 
Pfannenstiel, and Secretary Yonkers, DODEA will be carrying out a $3 
billion construction and renovation effort over the next 4 years that 
will require the cooperation of effort and resources from each Service 
to assist with the selection and improvement of sites for each school. 
As you may know, DODEA will only be responsible for the construction of 
the school, playgrounds, and athletic fields. Any roads or utilities 
needed at the site are a funding responsibility of the base. Are the 
Services offering adequate land and resources to support DOD's 
construction efforts?
    Dr. Robyn. With any large, complex program, it is not unexpected to 
encounter challenges. When DOD committed to the aggressive 
recapitalization of over 130 schools valued at more than $3.8 billion, 
many of the replacement projects did not have specific sites 
identified. As DODEA and the Military Departments worked out the 
location options for the replacement schools, consistent with 
installation master plans, new requirements (e.g., roads, utilities) 
emerged necessitating additional funding. Where funds were available, 
the Military Departments provided the resources needed to keep the 
school projects on schedule. In a few cases, projects were moved back 
in the queue to allow the Department to program resources needed to 
make a complete and usable project.
    Ms. Hammack. Yes. With the exception of one planned school at USAG 
Stuttgart, there are no infrastructure issues with DODEA planned 
construction on Army installations. DOD Dependents Schools-Europe 
(DODDS-E), USAREUR, IMCOM-Europe, and EUCOM decided to include 
infrastructure costs in the project scope for the school at Boeblingen 
Training Area, USAG Stuttgart, to ensure project synchronization.
    Ms. Pfannenstiel. Yes. DON is supporting DODEA in its construction 
program. In addition to the provision of a site, several of our 
military housing privatization projects have included construction of 
schools for DODEA operation.
    Mr. Yonkers. The Air Force is offering adequate land and resources 
to support DODEA construction efforts.

    99. Senator Ayotte. Dr. Robyn, Secretary Hammack, Secretary 
Pfannenstiel, and Secretary Yonkers, do any of the projects planned for 
construction in fiscal year 2011 or fiscal year 2012 have problems with 
siting or utilities? If so, can you describe the problems and remedies?
    Dr. Robyn. I am not aware of any projects in fiscal year 2011 or 
fiscal year 2012 that have siting or utilities issues; however there is 
one fiscal year 2010 project, the elementary school at Boeblingen 
Training Area, which encountered some infrastructure challenges on the 
building site. The Army is working the DODDS-E to resolve the issue.
    Ms. Hammack. The Army is not aware of any problems for projects in 
those fiscal years. However, we are working cooperatively with DODDS 
and EUCOM to resolve an issue for a fiscal year 2010 project for an 
elementary school at the Boeblingen Training Area, USAG Stuttgart.
    Ms. Pfannenstiel. There are no problems associated with the siting 
or utilities at Navy/Marine Corps installations in the fiscal year 
2011/2012 DODEA construction program (Camp Lejeune, New River, 
Quantico, and Dahlgren).
    Mr. Yonkers. There are no siting or utility issues associated with 
fiscal year 2011/12 DODEA construction projects.

                 EARMARKS FOR NON-DEFENSE REQUIREMENTS

    100. Senator Ayotte. Dr. Robyn, in recent years, a proliferation of 
earmarked grants have been appropriated to DOD through the Office of 
Economic Adjustment for vague requirements (to preclude technically 
being called an earmark) like $300 million for medical transportation 
infrastructure in the NCR, $45 million for reimbursements to local 
towns, and $250 million for repairs to local community schools. None of 
these amounts are included in DOD budget requests nor are they 
considered firm DOD requirements. All of them are added as a result of 
decreases to other DOD accounts. So, it would seem logical that in 
these times of fiscal austerity where DOD is making hard decisions 
about savings and efficiencies, there would be strong opposition to 
congressional efforts to fund them from DOD accounts. But there isn't, 
and it's very troubling. Should DOD assume funding responsibility for 
improvements to public facilities and infrastructure that historically 
have been funded by other agencies?
    Dr. Robyn. The Department understands that neither the $300 million 
for medical transportation infrastructure nor the $250 million for 
schools located on military installations (both funded through fiscal 
year 2011 appropriations) are earmarks, as defined by Congress. While 
these programs (local roads and schools) are local responsibilities, 
they do have significant effects on the quality of life of military 
personnel and their families. DOD will execute them as directed.

    101. Senator Ayotte. Dr. Robyn, in the case of funds to improve 
schools not owned by DOD, it is true that in some cases, local school 
districts specifically voted to steer funds away from schools on bases 
supporting military children with the expectation that Federal funds 
would eventually be provided? If true, why would DOD want to reward 
that type of behavior?
    Dr. Robyn. The Department is unaware of any Local Education Agency 
purposefully allowing the education environment for these students to 
deteriorate in anticipation of Federal funding. We know there are a 
number of public schools located on military installations that service 
mostly military children. Our recent assessment of these schools 
indicates some have significant condition and capacity deficiencies and 
Local Education Agencies have not been able to generate the revenue 
required to recapitalize these facilities in spite of fair efforts to 
do so.

    102. Senator Ayotte. Dr. Robyn, could DOD's support for Federal 
funding to improve these schools invite in additional requests for 
billions to support the other hundreds of schools?
    Dr. Robyn. While anything is possible, we prefer not to speculate 
what Local Education Agencies would do. Our recent inventory indicates 
there are approximately 160 public schools located on military 
installations. The majority are well maintained and recapitalized with 
only a fraction lacking the resources to invest beyond general 
operations and maintenance to remedy serious condition and/or capacity 
problems. Since these schools service mostly military children, the 
Department is a stakeholder in ensuring the most serious problems are 
remedied. However, over the long term, states and Local Education 
Agencies must remain in the lead to find innovative solutions.

    103. Senator Ayotte. Dr. Robyn, why wouldn't every school district 
in the country then stop funding school improvements supporting 
military children, knowing that DOD would eventually step in?
    Dr. Robyn. The Department is unaware of a situation where a Local 
Education Agency has made a conscious decision to ignore its 
responsibility to operate and maintain its public schools, regardless 
of school location.

                    ECONOMIC DEVELOPMENT CONVEYANCES

    104. Senator Ayotte. Dr. Robyn, DOD recently issued a proposed 
regulation implementing its revised Economic Development Conveyance 
(EDC) authority for BRAC properties. I believe the Services are meeting 
with you this week to discuss implementation of the revised policy. As 
you know, EDCs are intended to facilitate the disposal of property to a 
local redevelopment agency (LRA) with some sort of consideration 
received by the Government as compensation. How much compensation has 
historically been the focus of negotiations between DOD and the LRA, 
just like a purchase of a house for you and me. The buyer has an idea 
of what the property is worth and so does the seller, both based on 
county or bank appraisals. But the revised policy you have issued would 
delete the requirement to establish estimated fair market through a 
government appraisal, which is a consistent requirement for other 
property disposal actions of the Federal Government. Why would DOD no 
longer require a fair market appraisal in order to inform government 
representatives?
    Dr. Robyn. The proposed regulation deletes the requirement to 
conduct--but does not prevent--an appraisal. In fact, the proposed 
regulation directs the Military Departments to gather any information 
they need to conduct an informed negotiation such as an appraisal, 
market analysis, construction estimate, or real estate pro forma. An 
appraisal may not be an appropriate tool to use in all circumstances 
because other information may better help the parties understand the 
potential value of a property. Elimination of the requirement to 
determine Fair Market Value and related appraisal requirements should 
expedite the conveyance process and remove a common source of conflict 
and delay between the community and Department.

    105. Senator Ayotte. Dr. Robyn, how will DOD know what the property 
is worth?
    Dr. Robyn. The proposed regulation specifically allows the Military 
Departments to obtain and use any information deemed appropriate to 
conduct an informed property disposal negotiation to include a market 
analysis, construction estimates, real estate pro forma, and appraisal. 
It is difficult to identify the exact value of property at closing 
installations due to redevelopment uncertainties and differences in 20-
30 year projected costs and revenues. The proposed regulation offers 
the Department the flexibility to gather information it needs to 
conduct a negotiation--the same type of information a private landowner 
would use for similar transactions.

    106. Senator Ayotte. Dr. Robyn, is it DOD's intent to dispose of 
more BRAC property for no cost or less than fair market value? If 
so,why?
    Dr. Robyn. No. The Department's intent is to dispose of property as 
quickly as possible to support local economic development and job 
creation. Some urban properties may have current or future value 
potential, while others, particularly in rural or isolated areas, may 
not. The Department and communities should share in that value as well 
as support local economic development and job creation.

    107. Senator Ayotte. Dr. Robyn, part of the costs ($30 billion as 
of 2011) associated with implementing the 2005 BRAC round was to be 
offset with proceeds gained from the conveyance or sale of DOD land. 
These funds were required by law to be applied to environmental 
remediation actions to clean up BRAC sites. Doesn't the adoption of 
back-end financing deals undercut your source of front-end land revenue 
needed to clean up sites for disposal?
    Dr. Robyn. No. The Department does not assume any revenue from the 
sale of BRAC property because a projection would be very speculative. 
Clean-up budgets are independent from revenue and sale proceeds. Any 
money derived from sales should expedite the clean up, but not be the 
primary source of funds to meet remediation obligations.

    108. Senator Ayotte. Dr. Robyn, what is the estimate in lost 
revenue to the Services from the changes in policy?
    Dr. Robyn. The Department does not anticipate revenue loss. In many 
communities, the current real estate market is depressed and suffers 
from low demand and inadequate financing, which makes it difficult to 
determine current property value. The Department may achieve more 
return by taking a share of future revenue rather than a sale at 
current market conditions. This approach assists local economic 
development and job creation, and if successful, may increase the total 
revenue to the taxpayer over time.

    109. Senator Ayotte. Dr. Robyn, how will DOD compensate for this 
lost revenue?
    Dr. Robyn. The Department does not anticipate revenue loss.

                            OKINAWA AND GUAM

    110. Senator Ayotte. Secretary Pfannenstiel, regarding U.S. MILCON 
on Guam to support the relocation of 8,000 marines and their families 
from Okinawa, I notice that the Navy scaled back the request for funds 
in 2012 by almost $300 million for Guam construction from what was 
planned last year for 2012. This is in addition to the $320 million we 
deferred in fiscal year 2011.
    One of the projects planned last year for 2012 that is not in the 
current budget request is $148 million to purchase private land on Guam 
for training ranges for the marines. We have heard testimony in other 
hearings that consistent access to adequate training ranges on Guam is 
considered a show-stopper by the Marine Corps.
    Considering that ``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,'' why was this project for land 
acquisition stricken from the 2012 budget request if you need the 
authorization starting in the fall of 2011?
    Ms. Pfannenstiel. Based on the lack of a Programmatic Agreement 
under the National Historic Preservation Act (NHPA), the lack of a 
Record of Decision (ROD) selecting the final site for the live fire 
training range complex, and other factors, the budget request for 
fiscal year 2012 was re-evaluated and it was determined that budgeting 
for land acquisition to support a live fire training range complex 
would be premature.

    111. Senator Ayotte. Secretary Pfannenstiel, considering your 
commitment to conduct training activities in a manner which will allow 
unfettered access to the Pagat Village and Pagat Cave historical sites, 
what is the plan to meet the training range requirements for the Marine 
Corps on Guam?
    Ms. Pfannenstiel. Developing an achievable plan for delivering 
required training capabilities on Guam to support the realignment of 
Marine Corps forces from Okinawa is a priority. Option A at the Route 
15 area remains the preferred alternative for the location of a live 
fire training range complex. Should Option A be selected in the Record 
of Decision for training, 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. This commitment, 
which was made in the Programmatic Agreement, can be kept without 
compromising Individual Training Standards (ITS) for Marines on Guam. 
Regarding the timing for land acquisition, our focus is on ensuring 
training ranges are in place by the time relocating units will need 
them.

    112. Senator Ayotte. Secretary Pfannenstiel, when will you be sure 
that the Marine Corps has adequate land for their ranges?
    Ms. Pfannenstiel. The preferred alternative site for a live-fire 
training complex, which is along Route 15 on the eastern side of Guam, 
is non-DOD property. Should the Department select this alternative in a 
supplemental Record of Decision, which is slated for mid-summer at the 
earliest, it would involve the acquisition of approximately 1,090 acres 
of non-DOD lands.
    Our focus is on ensuring that the training range complex is in 
place to support the relocation of Marine Corps forces. Accordingly, we 
are currently developing an updated notional timeline to support 
potential acquisition of lands along Route 15 that adequately considers 
necessary property studies and surveys, informal discussions with Guam 
concerning possible acquisition, and submission of required MILCON 
budget submissions for land acquisition.
    If the Record of Decision selects the preferred alternative, then 
the Department believes that the area will fulfill the Marine Corps' 
mission. At that time, informal land discussions will begin with Guam, 
and the Department will have a more complete understanding of the 
feasibility of land acquisition.

    113. Senator Ayotte. Secretary Pfannenstiel, do you agree that we 
should resolve this issue before awarding construction contracts for 
the site work on the Marine Corps base?
    Ms. Pfannenstiel. The projects appropriated in fiscal year 2010, 
those authorized for appropriation in fiscal year 2011, and those 
requested in fiscal year 2012 are necessary to enable subsequent 
vertical construction and to support Marine Corps operations. Waiting 
to begin MILCON projects until after training range land acquisition 
issues are resolved would create a significant bottleneck in Guam's 
limited construction capacity by delaying a large volume of site 
preparation and other preliminary development necessary to support 
follow-on vertical construction of the new Marine Corps base. The force 
flow of Marines to Guam will be based upon the availability of 
requisite facilities and infrastructure. Therefore, a delay in the 
early horizontal construction stage of the program will potentially 
delay the Marines' ability to relocate from Okinawa in fulfillment of 
our international agreement.

    114. Senator Ayotte. Secretary Pfannenstiel, why are we commencing 
work without resolving significant issues with the Government of Japan 
over the relocation of MCAS Futenma?
    Ms. Pfannenstiel. An essential point of our realignment agreement 
with Japan is that relocation of Marine Corps forces from Okinawa to 
Guam is dependent upon tangible progress in the construction of the 
FRF. To support this realignment effort, construction of facilities on 
Guam must begin well in advance of the actual construction on the FRF. 
Japan has shown commitment to the realignment by moving forward with 
significant upland construction at Camp Schwab to support the FRF, 
design plans for the FRF, and by transferring money to the U.S. 
Treasury to support construction of utilities and infrastructure on 
Guam for the relocating Marine Corps forces. Likewise, the United 
States must now reciprocate by moving forward with construction on 
Guam.
    The projects appropriated in fiscal year 2010, those requested in 
fiscal year 2011, and those requested in fiscal year 2012 are necessary 
to enable subsequent vertical construction and to support Marine Corps 
operations. Waiting to begin MILCON projects until completion of the 
FRF would create a significant bottleneck in Guam's limited 
construction capacity by delaying a large volume of site preparation 
and other preliminary development necessary to support follow-on 
vertical construction of the new Marine Corps base. Therefore, a delay 
in the early horizontal construction stage of the program will 
potentially delay the Marines' ability to relocate from Okinawa in 
fulfillment of the international agreement.

    115. Senator Ayotte. Secretary Pfannenstiel, do we run the risk of 
never finishing or using the construction we have started, resulting in 
another congressional scandal of running utilities to nowhere?
    Ms. Pfannenstiel. The projects appropriated in fiscal year 2010, 
those authorized for appropriation in fiscal year 2011, and those 
requested in fiscal year 2012 are necessary to enable subsequent 
vertical construction and to support Marine Corps operations. The 
execution plan is designed to avoid creating a significant bottleneck 
in Guam's limited construction capacity by delaying a large volume of 
site preparation and other preliminary development necessary to support 
follow-on vertical construction of the new Marine Corps base. The force 
flow of Marines to Guam will be based upon the availability of 
requisite facilities and infrastructure. Therefore, a delay in the 
early horizontal construction stage of the program will potentially 
delay the Marines' ability to relocate from Okinawa in fulfillment of 
our international agreement with Japan.
    The marines relocating to Guam will utilize capabilities being 
developed at Apra Harbor and Andersen Air Force Base and, should the 
Marine Corps relocation not move forward, this capability would provide 
the Air Force with some flexibility as it could be used for operations 
that are not currently planned. However, the U.S. and Government of 
Japan remain committed to the realignment and are thus taking the steps 
necessary to begin execution.

    116. Senator Ayotte. Secretary Pfannenstiel, in your written 
testimony you stated, ``the Department will also consider recent input 
to issue a record of decision (ROD) for the live-fire training range 
complex on Guam.'' When will that ROD be issued?
    Ms. Pfannenstiel. The Department is currently reviewing all 
materials related to the siting of a live-fire training range complex 
and completing the necessary due diligence and consideration before 
issuing a Record of Decision. It is anticipated that the Record of 
Decision for live-fire training will be available mid-summer at the 
earliest.

    117. Senator Ayotte. Secretary Pfannenstiel, noting your commitment 
to a ``net negative'' growth in the amount of property controlled by 
DOD on Guam, approximately how many acres of land not owned by DOD will 
have to be acquired? Can you describe what existing DOD lands DOD has 
identified as available for disposal to result in a smaller footprint?
    Ms. Pfannenstiel. The Record of Decision (ROD) issued in September 
selected the Former FAA property, currently not in DOD's inventory, for 
family housing. However, the ROD made no decision regarding the 
location for a live-fire training range complex. The preferred 
alternative site for a live-fire training complex, which is along Route 
15 on the eastern side of Guam, is also non-DOD property. Real estate 
studies are ongoing; however, the approximate acreage required to 
execute the selected site for housing and the preferred alternative 
site for training ranges is about 1,800 acres.
    Should the Record of Decision for training select the preferred 
alternative site at Route 15, successful acquisition of the Route 15 
property is a priority so that Marine Corps training requirements can 
be met on Guam. The Net Negative concept is currently in the early 
stages of development and specific parcels available for disposal have 
not yet been identified. The Department is also assessing the 
feasibility of utilizing existing DOD property to limit the need for 
additional land. As part of these assessments, we will look to identify 
mission that could be relocated to free up land to meet the Net 
Negative commitment.

    118. Senator Ayotte. Secretary Pfannenstiel, your testimony notes 
that studies will be conducted to determine if missions can be 
relocated in order to free up land for disposal. Shouldn't Congress 
defer any construction on Guam until the studies are complete?
    Ms. Pfannenstiel. The projects appropriated in fiscal year 2010, 
those requested fiscal year 2011, and those requested in fiscal year 
2012 are necessary to enable subsequent vertical construction and to 
support Marine Corps operations. Waiting to begin MILCON projects until 
land acquisition issues are resolved would create a significant 
bottleneck in Guam's limited construction capacity by delaying a large 
volume of site preparation and other preliminary development necessary 
to support follow-on vertical construction of the new Marine Corps 
base. The force flow of Marines to Guam will be based upon the 
availability of requisite facilities and infrastructure. Therefore, a 
delay in the early horizontal construction stage of the program will 
potentially delay the Marines' ability to relocate from Okinawa in 
fulfillment of our international agreement.

               HOUSING FOR U.S. FORCES STATIONED IN KOREA

    119. Senator Ayotte. Secretary Hammack, I have a question about the 
plan to support the stationing of military families in Korea to 
accompany 28,000 military forces assigned there under the new policy 
for up to 3 years. On September 23, 2010, the Secretary of Defense 
directed United States Forces Korea and the Services to proceed with 
full tour normalization for Korea, as affordable, but not according to 
any specific timeline. I understand that DOD is still in the process of 
developing a plan and cost estimate by March 31, 2011, for the 
construction of facilities and infrastructure to support the families. 
Along those lines, the Army has been working for 3 years on a plan for 
housing at Camp Humphreys to support the families that are already 
stationed in Korea.
    Two years ago at a similar hearing, the Army representative 
testified that the first phase of a public/private partnership for the 
construction and operation of housing was scheduled to begin 
construction of a total of 2,427 units in the fall of 2009 and begin 
occupancy in the fiscal year 2011 and fiscal year 2012 timeframe to 
coincide with unit moves under the Yongsan Relocation Plan. The second 
phase was planned to begin construction in the fall of fiscal year 2011 
with occupancy and lease up in fiscal year 2013 to fiscal year 2014. 
The total development budget was estimated to be approximately $1.3 
billion. Please provide an update on the progress of this housing 
initiative.
    Ms. Hammack. The Humphreys Housing Opportunity Program (HHOP) Phase 
1 (1,400 homes) was approved by the Secretary of Defense on September 
23, 2010. The private partner Humphreys Family Communities (HFC) began 
final consultations with bond rating agencies, Korean developers and 
Republic of Korea government officials in December 2010. HFC 
anticipates completion with the rating agencies and a financial closing 
in the summer 2011.

    120. Senator Ayotte. Secretary Hammack, what is the current plan 
and cost estimate for the construction of 2,427 housing units?
    Ms. Hammack. On September 23, 2010, the Secretary of Defense 
approved a two-phase plan to provide family housing in support of the 
Yongsan Relocation Plan (YRP). Phase 1 will provide 1,400 homes thru a 
private partnership referred to as HHOP with an estimated development 
budget of $770 million. Phase 2 will provide 1027 homes using MILCON or 
an extension of HHOP. Phase 2 construction cost is estimated at $625 
million.

    121. Senator Ayotte. Secretary Hammack, which DOD account will the 
costs of housing construction be funded from?
    Ms. Hammack. Phase 1 housing construction is financed by the 
Republic of Korea and a private developer. Phase 2 construction will be 
thru MILCON or private finance.

                            TREASURE ISLAND

    122. Senator Ayotte. Secretary Pfannenstiel, the former Naval 
Station Treasure Island was closed in 1993. Of the total 535 acres of 
the island in the middle of the San Francisco Bay, 247 acres were 
determined suitable for transfer in 2006. Currently, the Local 
Redevelopment Agency operates the island under a cooperative agreement 
with the Navy bringing in $7 to $10 million in annual lease revenue.
    Starting in 2007, the Navy negotiated with the City of San 
Francisco to transfer the island under an economic development 
conveyance. The Navy estimated the fair market value of the property to 
range from $185 million to $275 million depending on the economic 
conditions. The city estimated the worth of the island at about $22 
million. Both sides were at an impasse, resulting in efforts by 
Congress to force a resolution through directive legislation.
    Last year, the Navy announced a deal with the city that would set 
aside a fair market value, relying instead on a series of payments to 
the Navy over time based on certain financial benchmarks. As you stated 
in your testimony, the Navy would receive $55 million with interest 
paid over 10 years. The Navy would then be eligible for subsequent 
payments of net cash flow up to $50 million after a private developer 
had achieved an 18 percent cumulative unleveraged internal rate of 
return (IRR) and 35 percent of net cash flow after the developer has 
achieved a cumulative 22.5 percent return. If the developer does not 
achieve these financial returns, the Navy will not receive the 
payments. Under this arrangement, how confident are you that the Navy 
will receive any additional compensation beyond the $55 million?
    Ms. Pfannenstiel. DON is confident that the Economic Development 
Conveyance terms for Naval Station Treasure Island will return a fair 
value to the Navy. As you noted, DON and the City of San Francisco were 
at an impasse on the determination of fair market value. This was 
primarily due to the inherent difficulty in cost and revenue 
projections over a 20 year development timeline in an uncertain housing 
market. Legislation in the National Defense Authorization Act for 
fiscal year 2009 allowed for a share of project revenues as 
consideration for Economic Development Conveyances. This legislation 
provided the impetus to construct consideration that guaranteed a 
payment to DON and allowed for unlimited participation in project 
profits. This structure ensures that if the project is successful as 
projected in the DON appraisal, the Navy will receive its fair market 
value.

    123. Senator Ayotte. Secretary Pfannenstiel, when do you expect 
that the Navy will start receiving payments above and beyond the $55 
million over 10 years?
    Ms. Pfannenstiel. Consideration above and beyond the guaranteed 
payment will be determined by project performance. DON will receive the 
first $50 million after the project reaches an Internal Rate of Return 
(IRR) of 18 percent. Once the project reaches this IRR threshold, DON 
receives all net cash flow until the $50 million is paid. At that 
point, the project must reach an additional 4.5 percent return for a 
total of 22.5 percent and DON would receive 35 percent of all net cash 
flow. Utilizing the current Pro Forma and development schedule, 18 
percent IRR and additional payments to DON occur in year 10 or about 
the same time as the last guaranteed payment.

    124. Senator Ayotte. Secretary Pfannenstiel, how will the Navy 
verify the financial returns of the developer?
    Ms. Pfannenstiel. The Economic Development Conveyance terms contain 
a number of controls to ensure that all project costs and revenues are 
transparent and all aspects of the project are subject to audit and 
reporting requirements. There are four aspects of the deal where DON 
will verify project accounting. First, the City is required to submit 
an annual accounting specific to calculations of the Internal Rate of 
Return (IRR) and determination of DON payments. Second, the City is 
required to submit annual audited financial statements for the entire 
project. Third, DON has the right to conduct our own audit of project 
financials. Under this scenario, any discrepancy must be corrected and 
a discrepancy greater than 5 percent would require the City to pay all 
costs of the DON audit. Finally, DON will receive copies of any audit 
conducted by the City under the terms of the City's development 
agreement with Lennar.

    125. Senator Ayotte. Secretary Pfannenstiel, shouldn't the Navy 
insist on an independent accounting firm and audits to validate the 
cash flows and to protect the Navy's interests?
    Ms. Pfannenstiel. DON believes that the process established in the 
Economic Development Conveyance protects DON interests. DON has the 
right to hire its own independent firm to validate cash flow and audit 
books. We feel that this direct relationship of a firm hired by DON is 
in the best interest of DON and provides the best opportunity to 
validate cash flows and protect Navy interests.

    126. Senator Ayotte. Dr. Robyn, is this agreement consistent with 
the policy being established by DOD for economic development 
conveyances?
    Dr. Robyn. Yes.

    127. Senator Ayotte. Dr. Robyn, are you comfortable with the Navy 
risking payments to the U.S. Treasury based on the performance and 
bookkeeping of a developer years after turning over the deed to the 
property?
    Dr. Robyn. The Department views the Navy's agreement as an 
opportunity to share in future development profits while benefiting the 
taxpayer. The Navy is a partner in the development and has the 
opportunity for unlimited revenue if the project is successful. In the 
current real estate and finance environment, projected value of 
property is extremely speculative and inherently risky. The Navy has 
crafted an agreement that aligns incentives and interests of all 
parties creating a win-win scenario for the City, the developer, and 
the U.S. Treasury.

    128. Senator Ayotte. Dr. Robyn, knowing that the funds received by 
DOD for disposed properties are used to fund environmental clean-up 
actions at other BRAC sites, why would you be willing to delay by many 
years receipt of those proceeds?
    Dr. Robyn. The Department does not assume any revenue from property 
sales when creating clean-up budgets. The Department only uses funds 
from the sale of BRAC property to accelerate existing cleanup 
operations. Additionally, these revenue-sharing agreements were 
specifically authorized by the National Defense Authorization Act for 
fiscal year 2010 as a way of quickly transferring BRAC property to the 
communities for job-creation purposes. These authorized revenue sharing 
agreements have several benefits besides providing funds to supplement 
clean-up budgets. Not only do they reduce operations and maintenance 
costs, they also support quicker reuse and assist community economic 
recovery and job creation.

                          DEFENSE ACCESS ROADS

    129. Senator Ayotte. Dr. Robyn, the Defense Access Roads (DAR) 
Program allows DOD to collaborate with the Department of Transportation 
for the use of MILCON funds to construct or improve roads in local 
communities that have been impacted by a military basing decision. The 
criteria used by DOD to assess the validity of projects have been the 
subject of much scrutiny and criticism over the years. You mention in 
your written statement that you plan to revise the DAR funding 
criteria. When will you issue the revisions?
    Dr. Robyn. The Military Service and DLA Transportation Engineering 
Program regulations contain the DAR criteria. Revising the criteria 
will require coordination within the Department as well as with the 
Federal Highway Administration. Our intention is revise the criteria by 
the end of summer.

    130. Senator Ayotte. Dr. Robyn, can you describe what changes you 
propose for the criteria?
    Dr. Robyn. Our intention is to revise the criteria to address 
impacts in urban areas in a manner similar to that suggested by the 
National Academy of Sciences report. The final form and details of the 
change will result from coordination within DOD and with the Federal 
Highway Administration.

    131. Senator Ayotte. Dr. Robyn, the budget request for fiscal year 
2012 includes a project for $4 million to improve an intersection in 
and around Marine Corps Base Quantico. Does this project meet the DAR 
criteria currently in use by DOD? If so, how?
    Dr. Robyn. The fiscal year 2012 President's budget request includes 
a certified DAR Program project at the intersection of Telegraph Road 
and Route 1. The project was certified under the existing doubling of 
traffic eligibility criterion. The consolidation of multiple 
intelligence, security and investigative organizations will relocate 
personnel to the west side of Marine Corps Base, Quantico, VA. The 
personnel increases will double traffic volumes and the number of 
vehicles making turns leading to and from Route 1 at Telegraph Road 
since it is a primary access from the public road system to the 
Quantico facilities.

              INVESTMENT LEVELS FOR MILITARY CONSTRUCTION

    132. Senator Ayotte. Dr Robyn, noting that DOD still uses a goal of 
90 percent to budget operations and maintenance (O&M) funding to 
sustain our facilities, does DOD currently have any guidance issued to 
the Military Services that would establish benchmarks or minimum goals 
for the levels of investment needed annually to recapitalize aging 
facilities and infrastructure? If not, how can we know whether the 
President's budget request for MILCON in 2012 is funded at a level that 
adequately addresses the needs of DOD to replace or modernize 
deteriorated facilities?
    Dr. Robyn. While the DOD continues to explore an affordable and 
quantitative method for determining benchmarks for recapitalizing our 
large facility inventory, currently the DOD has not established a goal 
associated with facility recapitalization. The Department's Planning, 
Programming, Budgeting, and Execution (PPBE) process provides the basis 
for fiscal decisionmaking that is predicated on priorities derived from 
strategic objectives. The PPBE process revisits these priorities 
annually, which includes what facilities require construction or repair 
to correct known deficiencies. The resulting decisions by the Secretary 
and Deputy Secretary on investment levels for all programs are based on 
an informed decision process.

    133. Senator Ayotte. Dr. Robyn, are you concerned that the 
decreases in Services' budgets for MILCON projects to replace current 
facilities over the past 3 years is leading to a strain on O&M accounts 
that are used to maintain these deteriorated facilities?
    Dr. Robyn. The decrease in MILCON funding over the past 3 years is 
largely the result of BRAC, Global Defense Posture, and Grow-the-Force 
programs coming to a close. The DOD Components continue to recapitalize 
their facilities using both MILCON and operations and maintenance 
funds.

                     GUARD AND RESERVE REQUIREMENTS

    134. Senator Ayotte. Dr. Robyn, Secretary Hammack, Secretary 
Pfannenstiel, and Secretary Yonkers, do you believe the President's 
budget request for 2012 for each of the Services adequately funds the 
construction needs of Guard and Reserve Forces?
    Dr. Robyn. I believe that the President's fiscal year 2012 budget 
request adequately funds the most pressing balance of Active and 
Reserve component construction needs.
    Ms. Hammack. Yes. The President's budget request provides an 
equitable distribution of resources within the established priorities 
of the Army and provides the Army Reserve and the Army National Guard 
with $1.1 billion (MCAR program is $281 million and the MCNG program is 
$774 million). However, as with the Active component funding, the 
Reserve component funding is currently sufficient to address only the 
most critical requirements needed to continue the momentum required to 
meet readiness goals; it makes only a slight dent in the significant 
backlog of construction/modernization projects for readiness centers.
    Ms. Pfannenstiel. Yes, we remain committed to supporting the 
infrastructure needs of our Navy Reserve as we balance risk across the 
Navy to provide the most capability within fiscal constraints. The 
Navy's fiscal year 2012 budget request includes $26.0 million to 
construct an Armed Forces Reserve Center at Pittsburgh, PA, and a 
Marine Corps Reserve Training Facility 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, IN.
    Mr. Yonkers. Yes. The Air Force utilizes a scoring model for its 
projects, which scores new mission and current mission projects. This 
scoring model prioritizes the MILCON program, with the most critical 
and urgent requirements ranking at the top. We follow that initial 
prioritization with a specific evaluation for ANG and AFRC support and 
make specific adjustment as necessary to ensure adequate component 
support. The ANG and AFRC have competed fairly and scored well in this 
process in 2012. In effect, the most pressing MILCON requirements, for 
both the active Duty and the Air Reserve components, were included in 
the fiscal year 2012 President's budget request.

    135. Senator Ayotte. Dr. Robyn, Secretary Hammack, Secretary 
Pfannenstiel, and Secretary Yonkers, how are Guard and Reserve 
requirements addressed in the prioritization process of MILCON projects 
for each of the Services?
    Dr. Robyn. The Military Departments use separate processes for 
prioritizing their MILCON requirements. Each of the Military 
Departments' processes includes consideration of the Guard and Reserve 
requirements when prioritizing their MILCON projects. I will defer to 
the Military Departments to provide specific information on how the 
Guard and Reserves are incorporated in their respective MILCON 
prioritization processes.
    Ms. Hammack. The Reserve components fully participate in the Army 
MILCON prioritization process. MILCON projects are reviewed in detail 
and prioritized using the overall priorities of the Army, i.e., Grow 
the Army (GTA), Global Defense Posture Realignment Army Modular Force 
(AMF), Modernization of Legacy Facilities, Training Support, and 
Strategic Readiness.
    Ms. Pfannenstiel. DON assesses all requirements in order to balance 
risk across the Navy and Marine Corps, and provide the most capability 
within fiscal constraints. We remain committed to supporting our Naval 
Reserve. DON's fiscal year 2012 budget request includes $26.0 million 
to construct an Armed Forces Reserve Center in Pittsburgh, PA, and a 
Marine Corps Reserve Training Facility in Memphis, TN. Additionally, 
$18 million has been realigned to the Department of the Army to 
construct a Joint Navy, Marine Corps, and Army Reserve Complex in 
Indianapolis, IN.
    Mr. Yonkers. The Air Force utilizes a scoring model for its 
projects, which scores new mission and current mission projects. New 
mission requirements are primarily driven by the beddown location and 
acquisition timing of the new weapon system-these factors are 
determined through the Air Force's strategic basing process. So for new 
mission requirements, should a Air National Guard (ANG) or Air Force 
Reserve Command (AFRC) base be selected as a beddown location, their 
MILCON requirements would be funded as part of the beddown process (as 
funding within a given year permits). For current mission projects, our 
scoring model prioritizes the MILCON program, with the most critical 
and urgent requirements ranking at the top. We follow that initial 
prioritization with a specific evaluation for ANG and AFRC support and 
make specific adjustment as necessary to ensure adequate component 
support. The ANG and AFRC have competed fairly and scored well in this 
process in 2012. In effect, the most pressing MILCON requirements, for 
both the Active Duty and the Air Reserve components, were included in 
the fiscal year 2012 President's budget request.

    136. Senator Ayotte. Dr. Robyn, Secretary Hammack, Secretary 
Pfannenstiel, and Secretary Yonkers, are you concerned that the 
prioritization process may result in a disadvantage for Guard and 
Reserve projects?
    Dr. Robyn. The military departments reassess their prioritization 
processes annually to ensure operational requirements across the force 
incorporate recent changes to defense strategies, policies, and fiscal 
challenges. Further, the inclusion of the Reserve components within the 
Military Department processes ensures they are not disadvantaged.
    Ms. Hammack. We are always reviewing our business rules to ensure 
the Department makes the best use of our limited resources. The current 
MILCON prioritization process does not disadvantage the Guard or Army 
Reserve. We are vigilant that any future changes to the current process 
also support equity across the components.
    Ms. Pfannenstiel. No, DON remains committed to supporting our Naval 
Reserve. DON assesses all requirements in order to balance risk across 
the Navy and Marine Corps, and provide the most capability within 
fiscal constraints. DON's fiscal year 2012 budget request includes 
$26.0 million to construct an Armed Forces Reserve Center in 
Pittsburgh, PA, and a Marine Corps Reserve Training Facility in 
Memphis, TN. Additionally, $18 million has been realigned to the 
Department of the Army to construct a Joint Navy, Marine Corps, and 
Army Reserve Complex in Indianapolis, IN.
    Mr. Yonkers. No, our process ensures that the Guard and Reserves 
projects are at no disadvantage when compared to the Active Air Force 
requirements.

                    ENCROACHMENT ON AIR FORCE RANGES

    137. Senator Ayotte. Secretary Yonkers, I am concerned that the 
proliferation of energy production initiatives as a result of national 
efforts to expand the use of renewable energy sources must be 
compatible with other national priorities, such as providing our 
military forces with safe and adequate training ranges free from 
encroachment or obstruction. We passed legislation last year that would 
establish a clearing house in DOD to assess permit requests from 
private entities in an expedited manner for their potential impact on 
national security and military training. How prevalent is this concern 
of encroachment on Air Force training ranges?
    Mr. Yonkers. OSD has developed a clearing house process based on 
legislation and is actively employing that clearing house process.
    We are becoming increasingly aware of the potential impacts 
renewable energy projects have upon our training and test and 
evaluation ranges. For example, wind turbines can impact the 
performance of radar through shadowing, creation of false targets and 
loss of real targets. The Air Force continues to study the potential 
operational impacts of development and the potential mitigation 
strategies to overcome the impacts. We currently have efforts underway 
to assess impacts to air-traffic-control radar and our ability to 
improve performance through optimization and/or upgrade.
    The Department must carry out its national security missions 
effectively with careful attention to the safety of the general public 
and Department personnel. The presence of wind turbines and other 
energy infrastructure in the vicinity where these military missions 
occur has the potential to impact the effectiveness of such missions 
and thus military readiness.
    As operational requirements at different locations vary, the 
particular characteristic of a wind farm may present a challenge in one 
location but not others. Consequently, potential impacts on readiness 
due to any particular proposed wind farm development need to be 
evaluated on a case-by-case basis. Where possible impacts to readiness 
could occur it is important to ensure that appropriate measures to 
mitigate risk are identified and implemented.
    Also, many of the potential impacts are similar to those that can 
be posed by other tall objects such as radio antennas, cell phone 
towers, and buildings proposed for construction in the vicinity of 
Department sites and facilities. The Air Force has developed and 
employed, for many years, strategies and mitigation techniques to 
effectively address those possible impacts.
    The potential impacts to readiness are generally categorized into 
the following areas: (1) Overflight and Obstruction, (2) Security, (3) 
Electromagnetic Signature, and (4) Environment. Potential impacts to 
flying safety are considered in the area of over-flight where 
obstructions may be introduced. Potential security issues during and 
after development are addressed near installations or where the 
Department conducts operations. Potential impacts related to the 
electromagnetic signature associated with wind turbines must be 
evaluated. Finally, possible impacts related to the responsibilities of 
the Air Force with regard to environmental stewardship should be 
considered.

    138. Senator Ayotte. Secretary Yonkers, what is at stake for the 
Air Force?
    Mr. Yonkers. The Air Force conducts its operations in shared space 
throughout the United States. Much of the operating space used to test 
and train our people and equipment was established over 60 years ago. 
As population and other types of development occur in these once-remote 
areas, we must ensure that impacts to mission are considered in any 
development decisions. The Air Force's ability to conduct timely 
training and testing to support mission requirements could potentially 
be at risk. The Air Force attempts to engage developers early to 
identify mutually acceptable outcomes and avoid undesirable impacts to 
our missions associated with ranges, installations and airspace. 
Working with the DOD Energy Siting Clearinghouse, the AF established 
processes for addressing projects already submitted to the Federal 
Aviation Administration and Bureau of Land Management (BLM). Throughout 
the process, the AF attempts to communicate with developers, local, 
State, and governmental agencies on potential encroachment impacts on 
the mission and mitigate when possible.

    139. Senator Ayotte. Secretary Yonkers, much of the land used for 
Air Force training ranges is under the control of the BLM. What can be 
done to improve coordination with BLM on the assessment of the impact 
on military training as a result of private initiatives that propose to 
use BLM land?
    Mr. Yonkers. The Air Force and BLM over the course of many years 
have fostered a long standing working relationship acting as 
Cooperating Agencies on NEPA actions. This relationship is based upon 
Council on Environmental Quality regulations to invite agencies to act 
as a Cooperating Agency if the agency has jurisdiction by law or 
special expertise with respect to the proposal.
    In order to improve the coordination between the Air Force and BLM 
on assessments of private initiatives that propose to use BLM land that 
could impact Air Force training ranges, the Air Force believes that 
being brought into the process at the initial planning stages, as a 
Cooperating Agency, would foster better communication. Early engagement 
between the Air Force, BLM and the private third parties, that are 
proposing these initiatives, would help in the identification of 
potential issues that could hinder the planning efforts as the proposal 
moves through the planning and implementation stages.

    140. Senator Ayotte. Secretary Yonkers, what other measures can 
Congress undertake to provide you the tools needed to work with 
developers of private lands whose initiatives may result in a 
detrimental impact to military training?
    Mr. Yonkers. In conjunction with the Department of Homeland 
Security and the Federal Aviation Administration, DOD will continue to 
work through the National Security Staff's sub-Interagency Policy 
Committee on the Air Domain to identify other measures that may become 
necessary. We expect the establishment of both an early voluntary 
consultation process for wind developers and a longer notification 
requirement for the FAA's Obstruction Evaluation/Airport Airspace 
Analysis will be effective. The Department of Energy, the Department of 
Commerce, and the Department of the Interior are also participating in 
the process.
                                 ______
                                 
             Questions Submitted by Senator Saxby Chambliss

                           MILITARY ARTIFACTS

    141. Senator Chambliss. Secretary Hammack, the 2005 BRAC round 
directed transfer of three U.S. Army Training and Doctrine Command 
schools to Forts Benning, Lee, and Sill. There are significant 
collections of military artifacts that represent the technological and 
tactical evolution of tanks, artillery, and air defense. These 
collections support the training missions that are relocating due to 
BRAC. The Army requested MILCON to construct storage facilities for 
these artifacts at Forts Benning, Lee, and Sill in the fiscal year 2011 
budget request but no funding was authorized.
    I understand there are several options for moving forward on these 
projects, the most feasible of which are: (1) lease off-post facilities 
to allow for storage of the artifacts, Army training, and public 
access; (2) fund the original MILCON projects as planned; and (3) 
modify the original MILCON projects to allow for public access. Of the 
issues at stake here--providing for Army training, preserving Army 
artifacts, and educating the public about Army history--how does the 
Army prioritize these issues?
    Ms. Hammack. The Army's first priority is the preservation of its 
historical artifacts in accordance with Federal statute (American 
Antiquities Act of 1906, 16 U.S.C. 431-433, National Historic 
Preservation Act of 1966, 16 U.S.C. 470). Failure to preserve the 
artifacts will lead to failure of all other artifact-supported Museum 
missions. The second priority is Soldier Training in Military History 
and Heritage and practical instruction to develop skills such as 
critical thinking and foreign materiel identification. The third 
priority is educating the public about the Army's rich heritage of 
service and its role in national development, which is closely related 
to the Soldier Training mission and esprit de corps.

    142. Senator Chambliss. Secretary Hammack, equipment is being moved 
to support the relocation of Army schools. Approximately what 
percentage of the artifacts moved or to be moved is being moved from 
public museums?
    Ms. Hammack. The Air Defense Artillery Museum, the Armor Museum, 
and the Ordnance Museum were all open to public visitation at their 
former locations at Fort Bliss, Fort Knox, and Aberdeen Proving Ground 
respectively. The educational exhibits were open to the public during 
operating hours. Researchers could make appointments to see artifacts 
that were in storage or to study the archival and library holdings.
    Of the total collection of the U.S. Army Air Defense Artillery 
Museum, about 95 percent is moving from Fort Bliss, TX to Fort Sill, 
OK. Of the macro artifacts in the original collection, over three 
quarters are moving from Fort Bliss, TX to Fort Sill, OK. 100 percent 
of the museum's library and archival holdings are moving from Fort 
Bliss, TX to Fort Sill, OK.
    Of the total collection of the National Armor and Cavalry Museum, 
over three quarters is moving from Fort Knox, KY to Fort Benning, GA. 
Of the macro artifacts in the original collection, over two thirds are 
moving from Fort Knox, KY to Fort Benning, GA. About 98 percent of the 
museum's library and archival holdings are moving from Fort Knox, KY to 
Fort Benning, GA.
    Of the total collection of the U.S. Army Ordnance Museum, about 90 
percent is moving from Aberdeen Proving Ground, MD to Fort Lee, VA. Of 
the macro artifacts in the original collection, over three quarters are 
moving from Aberdeen Proving Ground, MD to Fort Lee, VA. Approximately 
95-98 percent of the museum's library and archival holdings are moving 
from Aberdeen Proving Ground, MD to Fort Lee, VA.

    143. Senator Chambliss. Secretary Hammack, will the museums from 
which the artifacts are being moved remain open?
    Ms. Hammack. Organizations that replaced the Ordnance, Armor, and 
ADA schools have existing museum programs and these replaced the three 
school museums. They are in the process of standing up at all three 
losing locations:
    The Aberdeen Proving Ground Museum will focus on the history of APG 
and Communications Electronics Command.
    The George S. Patton Museum of Leadership at Fort Knox will focus 
on Army Accessions Command to include the history of commands or units 
associated with Fort Knox from 1918 to the present, Army leadership, 
Army recruiting history, and the history of the Reserve Officers 
Training Corps. The ADA Museum at Fort Bliss is being replaced by the 
1st Armored Division Museum, which combined with the Fort Bliss Museum 
will focus on the history of Fort Bliss from 1848 to the present and on 
the history of the 1st Armored Division.

    144. Senator Chambliss. Secretary Hammack, is it correct that one 
of the advantages of the leasing option would be that the public could 
access the artifacts?
    Ms. Hammack. Yes, however, where the leasing option is available, 
it will lead to split operations for the museum staff at locations that 
could be miles apart. Requests for access to portions of the artifact 
collections that are not located in the leased facilities will meet 
with stricter scrutiny than is currently practiced, due to constraints 
on staff operations across multiple artifact repositories.
    The leasing option is not available to the Air Defense Artillery 
Museum at Fort Sill, so that course of action does not ensure public 
access to any Air Defense Artillery artifacts. Available commercial 
properties in Lawton, OK were unsatisfactory. They either did not meet 
the minimum square footage requirements, or they were in poor condition 
and located in unsafe districts not conducive to public visitation. 
Currently, about 50 percent of the macro artifacts are in on-post 
warehouses that can be modified for public access with funding.
    The leasing option currently considered for the Ordnance Museum at 
Fort Lee will enable public access to most of the tanks, artillery, and 
vehicles in the collection, however, the small arms collection and 
other micro artifacts will be stored on Fort Lee warehouses and not 
accessible. 90 percent of the Ordnance Museum's inert munitions and 
small arms collections will be restricted to on-post by appointment 
research requests only, due to the nature of the security regulations 
governing the management of these types of collections.
    The leasing option currently considered for the Armor Museum at 
Fort Benning will enable the balance of the museum's tanks, vehicles, 
and archives to be available to the public however, the storage of the 
micro artifact collection in the basement of the National Infantry 
Museum makes that portion of the collection inaccessible to the public.

    145. Senator Chambliss. Secretary Hammack, the locations receiving 
the artifacts--Forts Benning, Lee, and Sill--have never had public 
access to these artifacts. How do you judge the public expectation for 
their ability to access these artifacts?
    Ms. Hammack. There have been many newspaper articles and television 
news programs in the communities surrounding Forts Benning, Lee, and 
Sill anticipating the arrival of the respective museum collections. 
Army staff have emphasized to the press that the soldier training 
mission is paramount to the three museums, but the public expectation 
has been that the local communities would benefit from the museums' 
arrival. Columbus, GA, has shown great interest in the educational 
opportunities that the Armor Museum offers. These include science, 
physics, history and math applications for elementary through high 
school curricular, and internship programs at the college level. Along 
with the National Infantry Museum and the Civil War Naval Museum, the 
addition of the Armor Museum collection would create the largest museum 
venue in the South. The Lawton, Oklahoma media expect the Air Defense 
Artillery collection to be co-located in the vicinity of the Field 
Artillery Museum and Fort Sill Museum and see the complex to be the 
largest of its kind in that region of the country. The Petersburg and 
Richmond, Virginia media have portrayed the arrival of the Ordnance 
Museum as an enhanced cultural attraction to the area. The U.S. Army 
Ordnance Collection joined with the current U.S. Army Quartermaster 
Museum, Woman's Army Museum and the Petersburg National Parks Service 
Unit would provide the second largest cultural venue on the east coast 
for American Military History outside of the Mall in Washington, DC.
    Interest in the three museums extends well beyond the local 
community to national and international audiences. Recent media, email, 
and telephone inquiries to the museums show a widespread concern among 
researchers and the general public over the fate of the artifacts, 
future access to the collections, and exhibits for tours and research.
    DOD activities have also expressed concern over the inability to 
continue joint educational programs and research within the collections 
if they are divided between off-post leased spaces and on-post deep 
storage facilities. If the individual collections are subdivided 
between on-post and off-post leased facilities, the logistics of 
research trips will be greatly complicated. The three museums' 
contributions to educational and research programs of the U.S. Navy EOD 
In-Country Exploitation Team, CIA, DIA, Army Research Laboratory, as 
well as organizations of our allies such as the joint Anglo-American 
Armor Board, are in jeopardy while the collections' long-term 
preservation arrangements remain in limbo.

    146. Senator Chambliss. Secretary Hammack, can you explain how the 
leasing option might facilitate fundraising by private foundations and 
how the Army could legally support that?
    Ms. Hammack. I cannot predict how the leasing option might affect 
fundraising by private foundations. Private organizations must, 
however, conduct their fundraising operations in Army leased facilities 
in the same manner as they do in Army owned museum facilities. To date, 
fundraising that supports a state-of-the-art museum facility and 
exhibit gallery has been the result of key drivers--determined and 
talented private organization leadership, accessibility to the 
collection, the subject matter of the museum, and location near a 
metropolitan center.

    147. Senator Chambliss. Secretary Hammack, is it possible that the 
lease option could hurt private fundraising?
    Ms. Hammack. As previously stated, I cannot predict the effect of 
the leasing on fundraising by private foundations.

    148. Senator Chambliss. Secretary Hammack, can you explain why 
these MILCON projects were not requested in BRAC MILCON accounts, and 
did the Army General Counsel concur with this decision and judge it to 
be in compliance with the BRAC law?
    Ms. Hammack. The Army deliberately included these projects, 
categorized as BRAC enablers, in the MILCON, Army (MCA) request. While 
BRAC is funding the move of the artifacts, indoor and outdoor storage 
mitigations were available at gaining locations to house the artifacts 
until such time as MILCON could be programmed to consolidate the 
collections at a single location accessible to the trainees. The Army 
General Counsel posed no objection with the decision to fund these 
projects with MCA.

    149. Senator Chambliss. Secretary Hammack, as the Army addresses 
this issue, I encourage you to explore all viable options and perform 
your due diligence. However, before you irretrievably commit to one or 
more of these options, can I get your assurances that the Army will 
first brief me and the committee's stakeholders?
    Ms. Hammack. The Army remains committed to open and transparent 
dialogue with Congress. We will continue to apprise you and the 
committee stakeholders of our progress and intentions related to this 
issue.

    150. Senator Chambliss. Secretary Hammack, I believe our goal here 
should not simply be to reach a solution that is feasible, but to 
achieve the right solution for the Army and the Nation. For that 
reason, I want to make sure the alternatives have a solid business case 
analysis and take into consideration all the various stakeholders--the 
Army, the public, and the foundations seeking to build private museums, 
and of course the taxpayers. If your due diligence shows that a MILCON-
funded solution is the most appropriate route, will the Army take this 
into consideration in a possible future budget request?
    Ms. Hammack. The Army will consider including storage facilities in 
future requests as required and if there is an adequate level of 
Congressional support for such projects.

    151. Senator Chambliss. Secretary Hammack, will you engage the non-
Army stakeholders-- particularly the local communities and the private 
foundations seeking to build museums--to make sure you properly 
understand their interests, concerns, and desires before recommending a 
final course of action?
    Ms. Hammack. The staffs of the Army museums have engaged their 
respective private foundations on the challenges facing the Museum 
Operations Support Facilities. The appropriate Army organizations will 
engage with the local communities to gauge their interests, concerns 
and desires in regards to public access to the historical artifacts of 
the Air Defense Artillery, Armor, and Ordnance Museums.

                     DOD FORCE STRUCTURE IN EUROPE

    152. Senator Chambliss. Secretary Hammack, Secretary Gates 
mentioned several months ago that he believes we have excess force 
structure in Europe and stated that DOD would work with our allies to 
determine the precise force structure and timing. Do you have an update 
on where that process stands?
    Ms. Hammack. As of the March 17, 2011, hearing date, the answer is: 
The Army has and continues to reduce its footprint in Europe while 
consolidating remaining forces and infrastructure. U.S. military 
posture in Europe is important to our National security and global 
strategic interests, and it allows the United States to maintain 
critical relationships with our allies and partners, and promotes 
continued stability throughout the region. As part of the Secretary of 
Defense's announcement on excess force structure in Europe, U.S. Army 
Europe has been reduced to a three-star level command. This 
streamlining of the command is commensurate with the current and future 
level of Army forces in Europe, and is consistent with Army Service 
Component Command structure worldwide. The Army is currently awaiting 
the final OSD decision on the future disposition of forces in Europe.
    Update: However, since that date, DOD announced that the Army would 
retain three BCTs in Europe beginning in 2015. In light of this recent 
decision and the previous Secretary of Defense announcement to reduce 
the Active component Army end strength by 27,000 Soldiers, the Army 
will conduct a thorough analysis over the next year to determine the 
overall makeup of the force. Stationing decisions will be addressed 
along with other force structure actions at the conclusion of this 
year's Total Army Analysis.

                              FORT STEWART

    153. Senator Chambliss. Secretary Hammack, Fort Stewart was one of 
the bases slated to receive an additional brigade as part of the Grow 
the Army plan. That decision was later reversed but not before the 
community invested tens of millions of dollars preparing to receive the 
additional brigade and soldiers. As you look to make a basing decision 
on any future brigades, my hope is you would heavily weigh three 
criteria in strategic priority: power projection; training capacity; 
and available infrastructure. I believe Fort Stewart excels in all 
these criteria and I know that the community would welcome any 
additional force structure the Army wishes to place there. In these 
times of geopolitical uncertainty and fiscal crisis, if we get this 
basing decision wrong, it could prove costly not only monetarily but 
most importantly in our soldiers' lives. I have also heard that the 
Army may be standing up or growing a new field artillery brigade. Is 
that correct, and if so, can you provide the status of that force 
structure action?
    Ms. Hammack. As of the March 17, 2011 hearing date, the answer is: 
I understand and appreciate that communities surrounding Fort Stewart 
have spent considerable time, effort, and money in anticipation of the 
activation and stationing of the 46th BCT at Fort Stewart. To support a 
possible decision by the Secretary of Defense on force structure in 
Europe, the Army is updating the 2007 Grow the Army Military Value 
Analysis (MVA). The MVA assesses installations on growth capacity, 
ability to support power projection, ability to support training, and 
the well-being of soldiers and their families, and provides the Army's 
leadership a rank-ordered assessment of installations that would best 
support the stationing of Army units. Fort Stewart will be given every 
consideration in any stationing action as the Army continues to review 
and analyze possible future force structure and operational adjustments 
to develop a versatile and balanced force. This analysis will be in the 
context of potential impacts as a result of the Secretary of Defense 
announcement to reduce the Active component Army end strength by 27,000 
soldiers beginning in 2015. Any basing decisions on field artillery 
units and BCTs will be addressed along with other Force Structure 
decisions as part of this year's Total Army Analysis results which will 
be integrated into the Army fiscal year 2014 budget submission.
    Update: However, since that date, DOD announced at the Army would 
retain three BCTs in Europe beginning in 2015. In light of this recent 
decision, a stationing decision for BCTs, to include the disposition of 
the heavy brigade, will be addressed along with the 27,000 end strength 
reduction, and other force structure actions at the conclusion of this 
year's Total Army Analysis.

                ASSESSMENT AT THE AIR LOGISTICS CENTERS

    154. Senator Chambliss. Secretary Yonkers, I realize the focus of 
this hearing is not on depots, but one depot-related environmental 
issue that I wanted to bring up which we discussed in my office a few 
weeks ago is in regards to Occupational Safety and Health 
Administration (OSHA) and the inspections they have performed recently 
at the Air Logistics Centers (ALC). I am concerned and I know you are 
also concerned about OSHA's approach and their flagging the ALCs for 
violations that do not seem to be based on a clear standard and that do 
not have any apparent negative effect on the workforce. I would 
appreciate your thoughts on this issue, the approach you recommend for 
engaging OSHA, and your recommendation for holding the ALCs to a 
reasonable standard of safety and health without hampering their 
ability to carry out their mission, which is to deliver combat ready 
aircraft to the warfighter.
    Mr. Yonkers. OSHA identified some shortfalls in execution of our 
processes which we have aggressively addressed at all our ALC. Eighteen 
of the 39 OSHA citations regarded compliance with hexavalent chromium, 
lead or cadmium standards--many specifically addressed surface 
contamination. Except for ``eating surfaces'' in the cadmium standard, 
there are no promulgated analytical standards for surface contamination 
based on adverse employee health effects. The current stand is ``as 
free as practicable'' from contamination.
    OSHA inspectors are currently citing our units based on 
contamination presence as evidence of not meeting the ``as free as 
practicable'' standard. This interpretation is causing our units to 
make costly process changes which adversely affect our production cycle 
times.
    We have a duty to protect our workers. We have provided interim 
guidance to the ALC regarding housekeeping and industrial hygiene to 
address the contamination issues. The USAF School of Aerospace 
Medicine, Wright Patterson Air Force Base, OH, has studied the 
contamination levels noted by OSHA and cannot substantiate an ingestion 
health hazard. We are finalizing formal guidance to our ALCs on 
housekeeping/industrial hygiene and verification processes. In the 
interim, we will contest citations issued based on contamination 
presence without a substantiated health risk.
    This OSHA action is a policy issue which must be worked by the OSD, 
not each of the Services or defense agencies. Preliminary interaction 
with OSHA is complete. OSD will meet with OSHA Compliance Directorate 
in the near future to discuss the way forward.

    [Whereupon, at 4:36 p.m., the subcommittee adjourned.]


DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR 
               2012 AND THE FUTURE YEARS DEFENSE PROGRAM

                              ----------                              


                        WEDNESDAY, MAY 18, 2011

                           U.S. Senate,    
              Subcommittee on Readiness and
                                Management Support,
                               Committee on Armed Services,
                                                    Washington, DC.

             THE CURRENT MATERIEL READINESS OF U.S. FORCES

    The subcommittee met, pursuant to notice, at 10:09 a.m. in 
room SR-232A, Russell Senate Office Building, Senator Claire 
McCaskill (chairman of the subcommittee) presiding.
    Committee members present: Senators McCaskill, Udall, 
Shaheen, Inhofe, Chambliss, and Ayotte.
    Committee staff members present: Leah C. Brewer, 
nominations and hearings clerk; and Jennifer L. Stoker, 
security clerk.
    Majority staff members present: Peter K. Levine, general 
counsel; John H. Quirk V, professional staff member; Russell L. 
Shaffer, counsel; and William K. Sutey, professional staff 
member.
    Minority staff member present: Lucian L. Niemeyer, 
professional staff member.
    Staff assistants present: Hannah I. Lloyd and Breon N. 
Wells.
    Committee members' assistants present: Tressa Guenov, 
assistant to Senator McCaskill; Christopher Kofinis, assistant 
to Senator Manchin; Patrick Day, assistant to Senator Shaheen; 
Anthony Lazarski, assistant to Senator Inhofe; Clyde Taylor IV, 
assistant to Senator Chambliss; and Brad Bowman, assistant to 
Senator Ayotte.

    OPENING STATEMENT OF SENATOR CLAIRE McCASKILL, CHAIRMAN

    Senator McCaskill. Good morning, everyone. I will begin 
with an opening statement, and then turn to my colleague 
Senator Ayotte for her opening statement, and then we will take 
your testimony. I appreciate you all being here today.
    The Subcommittee on Readiness and Management Support meets 
this morning to hear testimony on the materiel readiness of our 
military. Today, we'll hear from Lieutenant General Mitchell 
Stevenson, Deputy Chief of Staff, Logistics, for the Army; Vice 
Admiral William Burke, Deputy Chief of Naval Operations for 
Fleet Readiness and Logistics; Lieutenant General Loren Reno, 
Deputy Chief of Staff for Logistics, Installations, and Mission 
Support for the Air Force; and Lieutenant General Frank Panter, 
Deputy Commandant for Installations and Logistics for the 
Marine Corps. I welcome you all and thank you, not only for 
your testimony, but for your contributions and service to our 
Nation.
    After almost a decade of combat operations, we have 
significant gaps in our materiel readiness accounts. While I 
want to support the Services with every possible resource, I 
also want to ensure that we do a better job at matching up 
funding to requirements. For this reason, I continue to be 
concerned by the longstanding failure of the military 
departments to fully fund our maintenance requirements. At a 
time when we already have significant equipment backlogs, the 
continuing lack of full funding can only increase the scope of 
the problem. It's a classic case of pay now or pay dearly 
later.
    As a result of our decade-long military operations in Iraq 
and Afghanistan, both the Army and the Marine Corps face 
significant military readiness issues, particularly with regard 
to nondeployed units. The Army has said it will need 2 to 3 
years of reset funding beyond the end of combat operations, 
while the Marine Corps has said it will face a $5 billion bill 
for reset and an additional $5 billion bill to reconstitute the 
force, yet have only allocated $250 million in the fiscal year 
2012 budget to address this looming funding request.
    The Navy and the Air Force also face significant backlogs 
in maintenance and repair of equipment. For example, because 
the Navy has failed to fully fund their depot maintenance 
accounts over the past few years, we currently have a $367 
million maintenance backlog.
    Similarly, the Air Force has failed to fund their readiness 
accounts, at 83 percent in fiscal year 2011 and 84 percent in 
fiscal year 2012. This inadequate funding has resulted in a 
significant backlog of aircraft in great need of repair.
    Last year in the committee, we attempted to address this 
problem by adding $532 million to address unfunded requirements 
for ship depot maintenance, aircraft depot maintenance, and 
spare parts identified by the Chief of Naval Operations, and 
$337 million for unfunded requirements for weapon system 
sustainment that were identified by the Air Force Chief of 
Staff.
    I hope that we will hear from our witnesses today whether 
their depots are operating at capacity or could repair 
equipment faster and enhance unit readiness if any additional 
funding were available.
    I hope we will hear from each of our witnesses today what 
steps they plan to take to address these backlogs of deferred 
maintenance and reset requirements and ensure that all of our 
units, not just deployed units, reach the level of readiness 
that we need and expect. This effort will undoubtedly require a 
long-term strategy which extends beyond fiscal year 2012, and 
probably even beyond the scope of Future Years Defense Program 
(FYDP).
    Finally, as I have said at our previous hearings, I do not 
believe there is anything the Department of Defense (DOD) is 
doing that it cannot do better. I do not believe there is any 
part of the budget that should be off limits as we look for 
savings. While we are not about to cut funds that are needed to 
support forces engaged in ongoing military operations, I am 
convinced there are things that we can, and should, do better.
    In this regard, I am particularly concerned about the 
extent that we have become reliant upon contractors to provide 
logistics support for these operations. As the Commission on 
Wartime Contracting recently concluded, there are too many 
areas in which the contractors have become the default option. 
I recognize that our witnesses today are not contracting 
experts, but you are responsible for providing logistics 
support, including contractor support, for ongoing military 
operations.
    As I understand it, the military departments are 
responsible for: ensuring that operational contract support 
requirements are identified and integrated into the operation 
plans; ensuring that contractor management plans are 
incorporated into operation plans; ensuring that contract 
oversight processes and manpower requirements to execute 
oversight are incorporated into operation plans; integrating 
identified contract requirements into training simulations, 
mission rehearsals, and exercises; ensuring that military 
personnel outside the acquisition workforce who are expected to 
have acquisition responsibility, including oversight 
responsibility, are, in fact, properly trained; determining 
requirements and qualifications for contracting officer 
representatives (CORs), making sure that the corps are properly 
trained and certified; and collecting and distributing 
operational contract support lessons learned.
    I intend to ask our witnesses today what actions they and 
the Services they represent have taken, and plan to take, to 
carry out these important responsibilities.
    I look forward to the testimony of our witnesses, and I now 
turn to Senator Ayotte for any opening remarks that she might 
have.

               STATEMENT OF SENATOR KELLY AYOTTE

    Senator Ayotte. Thank you, Chairman McCaskill, for calling 
this important hearing on the materiel and logistical readiness 
of our Armed Forces.
    I want to also welcome Senator Inhofe here, as well.
    I also thank the witnesses for appearing before our 
subcommittee today, and for your service to our country, and 
for all of those that are serving beneath you.
    I believe it was Napoleon who first observed that, in 
warfare, while the amateurs discussed tactics, the 
professionals discussed logistics. Our committee has no greater 
role than ensuring our military personnel are properly equipped 
to succeed in their missions. In tough fiscal times, with 
decreasing budgets across all Federal agencies, it is 
especially important to review department resource decisions 
regarding logistics programs to understand their impact on 
readiness. We need to be clear about what risks to the force we 
are willing to assume in the short term, and in the future, 
based on the declining availability of resources. While the 
Pentagon must relentlessly pursue efficiencies and eliminate 
waste--and I certainly agree with the statements made by the 
Chairman--we must devote sufficient resources for weapon system 
sustainment, prepositioned stocks, equipment accounts, and 
depot operations. Given the current state of world affairs, 
tasking our warfighters to do more with fewer resources is 
going to extend the strain on the force, resulting in longer 
deployments and shorter amounts of downtime needed to allow our 
troops and their families to recuperate, units to train, and 
equipment to be reset.
    I look forward to receiving the details from the witnesses 
on the risks associated with each of the department's 
efficiency initiatives in the 2012 budget request affecting 
logistics. We also need to remember that the Services have 
already assumed risks, for years, in certain aspects of 
readiness, such as facility maintenance and adequate training 
for all aspects of roles and missions. For example, the 
Department of the Navy recently estimated that they already 
have a backlog of over $3.5 billion for estimated costs of 
facility repairs at their four public shipyards alone, and 
almost $40 billion in other shore infrastructure requirements. 
Another example all Services have acknowledged in their 
testimony this year, is that the readiness of nondeployed 
forces has been sacrificed in order to ensure the readiness of 
forces deployed to Iraq and Afghanistan. This mortgaging of the 
nondeployed forces' readiness to ensure the readiness of those 
deploying to Iraq and Afghanistan has undercut our Nation's 
preparedness for a variety of contingency missions. We've 
already seen how those have risen. For example, adequately 
equipping deploying forces has often left units stationed back 
home, particularly in the Reserve and Guard units, without the 
equipment they need to train for their next deployment or to 
carry out stateside missions. Too often, we hear of units 
seeing equipment for the first time in theater, or at the last 
minute, in their final predeployment training. I wonder just 
how much longer we can continue to defer maintenance in 
training before we start to see the signs of a hollow force. We 
need to hear, from our witnesses, how they are addressing these 
issues.
    Finally, the witnesses have all stated, in written 
testimony, that over 10 years of persistent conflict has taken 
a toll on military readiness and the availability of equipment. 
They have stated, as well, that years of dedicated funding for 
reset and reconstitution will be required after our forces come 
home in order to restore adequate levels of readiness across 
the full spectrum of operations. I look forward to hearing 
detailed information from the witnesses on what supplies, 
equipment, and levels of activity in our depots and shipyards 
are needed to reset our forces. In addition, this committee 
needs to hear from our witnesses regarding the amounts of 
resourcing that will be needed in the next 5 years to restore 
the levels of full-spectrum readiness necessary to preserve our 
national security. While we must reduce Federal spending in all 
areas to restore the fiscal health of this country, we must not 
lose sight of our sacred vow to fully equip, train, and support 
those who defend our Nation and keep us safe.
    I thank the witnesses in advance for their candid views on 
these matters, and look forward to a productive hearing on this 
topic.
    Thank you, Chairman McCaskill.
    Senator McCaskill. Thank you very much.
    I will now turn to our witnesses. I know you are aware of 
how much we want you to give us information, but then, at the 
same time, we tell you not to talk for too long. So, we're 
hopeful that you all can keep your comments to about 5 minutes. 
Obviously, all of your statements have been available to us, 
have been reviewed, and will be placed in the record. We look 
forward to your testimony. We'll begin with you, Lieutenant 
General Stevenson.

 STATEMENT OF LTG MITCHELL H. STEVENSON, USA, DEPUTY CHIEF OF 
                  STAFF, LOGISTICS, U.S. ARMY

    General Stevenson. Chairman McCaskill and Ranking Member 
Ayotte, as you asked, I will not read my opening statement, but 
rather just ask that it be accepted into the record. What I'd 
like to do now is just highlight a few points from that 
statement.
    First, in terms of the materiel readiness of the Army, as 
you acknowledged, we certainly have our challenges. But, I 
would argue that we are more ready today than we have been in a 
long time in a lot of areas. I can elaborate on that, if you'd 
like, in my upcoming testimony. This is in no small measure to 
the amount of unwavering support we get from Congress to keep 
us well funded.
    In Iraq and Afghanistan, we are on track and, in some 
cases, ahead of schedule. In the drawdown from Iraq, we've been 
getting pretty decent marks from the Government Accountability 
Office (GAO), in that regard. I can talk about that later, if 
you'd like, as well.
    Our readiness posture in Afghanistan is actually quite 
strong, and getting stronger every day. Just this morning, I 
had an update on materiel readiness in Afghanistan of all of 
our forces. In all but one case, we are at or above the 90-
percent goal that we set for ourselves in terms of readiness.
    Here at home, we've improved our ammunition readiness. It's 
stronger than it's ever been, that I can remember. We're 
reconstituting our Army prepositioned stocks. Like everyone in 
the DOD, as you pointed out, we logisticians are focused on 
being better stewards of our taxpayers' dollars. An example of 
that is a pretty aggressive property accountability campaign 
that mandates a culture of supply discipline.
    Our depots and arsenals remain quite busy, though. As a 
result of the drawdown in Iraq, the workload is declining. 
Having said that, as you point out, it is still the case that 
we will require reset funding for 2 to 3 years after operations 
finally end.
    Your support has made us ready.
    I look forward to your questions.
    [The prepared statement of General Stevenson follows:]

          Prepared Statement by LTG Mitchell H. Stevenson, USA

    Chairman McCaskill, Ranking Member Ayotte, members of the 
subcommittee, on behalf of all soldiers, Army civilians, and their 
families, I appreciate the opportunity to appear before this 
subcommittee.
    As the Secretary and the Chief of Staff of the Army have testified, 
the war is not over yet, and we remain in an era of persistent conflict 
facing an uncertain and increasingly complex strategic environment. To 
that end, I continue to be impressed by the work of Army Soldiers and 
Civilians. I have visited them as nearby as Fort Lee, VA, and as far 
away as Bagram, Afghanistan, and I can say without equivocation that 
the Army's sustainment system, and the personnel who make it work, is a 
well-tuned enterprise capable of supporting a versatile and adaptable 
Army.
    As I appear before you today, the Army is seamlessly moving 
supplies and equipment out of Iraq to multiple destinations, while 
simultaneously supporting complex military operations in the land-
locked country of Afghanistan, with its treacherous terrain and poor 
infrastructure. We have utilized our prepositioned stocks several 
times, most recently to aid our allies in Japan, and after each usage, 
quickly rebuilt them to be ready for the next requirement--Army 
prepositioned stocks (APS) are doing precisely what they are intended 
to do. Our depots, arsenals, and ammunition plants have surged to keep 
the warfighter on the front lines stocked with the best and most 
reliable equipment and supplies. On top of all this, we are working to 
get even better: the Army's soldiers and civilians are pursuing 
cutting-edge technologies in operational energy, improving efficiencies 
and accountability. Because of these efforts, your Army is more 
prepared to meet operational challenges than it ever has been--a state 
of readiness that I think will improve even more in the coming years.
    Of course, such a feat would not have been possible without the 
support of Congress. Speaking on behalf of the Army, let me just 
acknowledge that this subcommittee's commitment to our men and women in 
uniform has been instrumental to our success, and we are committed to 
being good stewards of the resources you have authorized us.

                          RESPONSIBLE DRAWDOWN

    The Army is currently drawing down our presence in Iraq. As part of 
this effort, we will redistribute over 3.4 million pieces of equipment, 
redeploy more than 143,000 U.S. military personnel, and transfer or 
close 505 Forward Operating Bases. These bases were supported by 22 
Supply Support Activities (the Army equivalent of a Walmart store), 
containing a total of over 135,000 lines of repair parts, 21,000 short-
tons of common-use supplies, and 34,000 short-tons of ammunition. As 
part of our drawdown effort, we have already retrograded roughly 2.3 
million pieces of equipment, and have only 74 Forward Operating Bases 
still in place. This is, as you would imagine, no small task. Based on 
results of reviews by both the Army Audit Agency and the Government 
Accountability Office, I am pleased to report that we are currently on 
track or ahead of schedule in every measurable area, and I am confident 
we will complete this mission on time, and do so responsibly.
    Since the beginning of the Iraq drawdown process, the Army has had 
clearly defined, coordinated, and synchronized plans and policies for 
the redistribution and retrograde of materiel. Our first priority for 
any piece of equipment no longer required in Iraq is to fill 
requirements in Afghanistan. After we meet those needs, some equipment 
redeploys home with units for unit level Reset; the remainder is sent 
directly to industrial base facilities for national level Reset. Upon 
completion of Reset, we distribute this equipment in accordance with 
Army priorities to fill unit equipment authorizations in the active 
Army, Army National Guard, and Army Reserve, or to restock APS. Also we 
are using Congressionally granted authorities to provide varying types 
of equipment to Iraqi and Afghan Security Forces to help build up their 
minimum essential capabilities. Finally, we are working with State and 
local governments to provide them the opportunity to claim certain 
pieces of excess, non-standard equipment.

                  SUPPORTING OPERATIONS IN AFGHANISTAN

    While our efforts to draw down successfully and responsibly in Iraq 
have been noteworthy, what makes it even more remarkable is that this 
drawdown in Iraq is being accomplished while concurrently supporting 
combat operations in Afghanistan. As many of you who have traveled to 
these places know, the challenges a soldier faces in Iraq are not 
always the same as he or she faces in Afghanistan. In Afghanistan, a 
land-locked country with poor infrastructure, we are put to the test 
every day to find new and better ways to sustain the warfighter, both 
in moving supplies into theater, and then also in successfully 
delivering it to soldiers in remote locations under austere and 
dangerous conditions. The Army, working in conjunction with our 
partners in U.S. Central Command and U.S. Transportation Command 
(TRANSCOM), use multiple modes of transportation to get the soldier 
what he or she needs on the battlefield. Critical and sensitive 
equipment, such as communications equipment, ammunition, repair parts, 
and weapons are delivered by air, while the remainder of the equipment 
is generally delivered by ground. In some cases, the poor to non-
existent roadway infrastructure and the high risk of enemy activity 
require us to resupply remote military outposts by airdrop. Recently, 
the Army and Air Force conducted the largest ever resupply of fuel when 
they dropped approximately 20,000 gallons of JP8 fuel for Wasa K'wah, 
an outpost that has not had ground convoys resupply it in nearly 3 
years.

                            INDUSTRIAL BASE

    While supporting the war effort, the Army has relied heavily on our 
organic industrial base, which has operated at historically high rates, 
the highest since the Vietnam War. In fiscal year 2011, the Army 
expects to Reset approximately 116,000 items at our depots (including 
1,000 Mine Resistant Ambush Protected (MRAP) vehicles). Army rotary 
wing aircraft continue to operate at up to six times non-combat usage 
levels; and many tactical wheeled vehicles have similar and, in some 
cases, even higher tempo of operations (OPTEMPO). Yet our maintenance 
facilities have enabled the Army to maintain operational readiness of 
equipment in theater at rates of over 90 percent for ground, and 75 
percent for aviation equipment. Our current equipment readiness rates 
are a good indicator that we are meeting our requirements, but the Army 
continues to look for ways to keep improving. With our efforts in Iraq 
winding down, we are pursuing strategies that will sustain capabilities 
in the long-term, both in terms of workforce and facilities.
    The Army, with the help of Congress, needs to make the right 
choices to maintain the critical capabilities of depots and arsenals in 
the future. The fiscal year 2012 President's budget request is a good 
step forward in transitioning from a reliance on overseas contingency 
operations (OCO) funding to the standard base budget. This will allow 
us to better ensure that depots sustain core capabilities as we draw 
down from the high wartime OPTEMPO. Additionally, given all the new 
equipment brought into the inventory as we have conducted operations in 
Afghanistan and Iraq, we need to adapt our depot programs to 
accommodate the latest systems. A good example of that is the work we 
are doing right now in establishing a competency for repair of MRAPs at 
Red River Army Depot, and route clearance equipment at Letterkenny Army 
Depot.
    I know the industrial base is an issue of importance to this 
subcommittee. As part of the National Defense Authorization Act for 
Fiscal Year 2009, Congress required an independent study on the 
capability and efficiency of the Department of Defense (DOD) depots. 
Prior to this study, the Army was already working to address many of 
its key elements. The Army has instituted a ``portfolio review'' 
process to provide overarching analysis and recommendations to posture 
us even more effectively for the future--we are using this process to 
comprehensively assess the organic industrial base and consider options 
to sustain ready and relevant depots, arsenals, and ammunition plants 
for the 21st century. In addition, we had already been working hard to 
ensure we had a well thought out industrial base strategy, and were 
meeting our core requirements in our maintenance depots.

                       ARMY PREPOSITIONED STOCKS

    Like the industrial base, our Army Prepositioned Stocks (APS) 
program must be maintained to meet the need of future contingency 
operations. The APS program is doing exactly what it was created to do, 
which is to give our combatant commanders access to strategically 
placed equipment to enable a rapid response to contingencies. As an 
example, we have issued and reconstituted our APS-5 set in Southwest 
Asia several times in order to meet operational requirements in both 
Afghanistan and Iraq. To help restore APS, the Army has requested $679 
million in Base funding and $288 million in OCO funding in the fiscal 
year 2012 budget request. Our current focus is the reconstitution of a 
fully operational APS-3 Army Strategic Flotilla I Infantry Brigade 
Combat Team (BCT), APS-3 Army Strategic Flotilla III Sustainment 
Brigade, APS-3 Army Strategic Flotilla IV Theater Opening/Port Opening 
Package, APS-4 Heavy BCT, APS-5 Sustainment Brigade, APS-5 Heavy BCT, 
and APS-5 Infantry Battalion. With your continued support, the Army is 
committed to completely restoring our prepositioned stocks, a task we 
expect to accomplish by the year 2015. The APS program supports our 
National Military Strategy by positioning critical warfighting stocks 
afloat and ashore worldwide which provides combatant commanders maximum 
strategic flexibility and operational agility.

                           OPERATIONAL ENERGY

    Access to energy is also an important function of readiness. The 
Army purchased just over $1 billion worth of fuel in Afghanistan during 
fiscal year 2010. Operational Energy represents a complex set of 
challenges and opportunities for us. It requires synchronization across 
the Army and with joint and other external organizations. In terms of 
sustaining our operations in theater, it is critically important that 
we manage our energy resources in order to maximize our overall combat 
effectiveness. That means our approach to managing fuel and energy 
requires a comprehensive approach--no single solution (process/
procedural change, technology-insertion, or otherwise) can address the 
challenges we face across the full spectrum of operations. In addition, 
it is important to note that Operational Energy is inextricably linked 
to the management of water and other resources.
    There are several system initiatives underway for Army Operational 
Energy, with energy efficiency improvement of Army base camps 
representing one of the best opportunities to reduce, and more 
intelligently manage, energy and water usage. The Army is taking a 
systems approach to demand reduction of both energy and water--this 
includes the use of energy-efficient shelters, micro-grids and 
renewable power and water reuse systems.
    To support our focus on energy savings, the Army developed a tool 
to estimate the Fully Burdened Cost of Fuel (FBCF) and made it 
available to all of the DOD, so that it can be used to estimate the 
FBCF for specific types of equipment, different types of units, and 
various locations throughout the world. Reducing our demand for energy 
will take fuel convoys off the road and save lives.

                              EFFICIENCIES

    As part of the overall Army efficiency initiatives, we logisticians 
are looking at ways to reduce the need for taxpayers' dollars without 
adversely affecting current or future readiness. The Army is partnering 
with TRANSCOM to consolidate shipments and use more efficient modes of 
transportation. We are also saving money by accelerating the completion 
of chemical demilitarization activities. By reducing War Reserve Stocks 
for Allies Ammunition Stockpile in Korea, we are saving money on the 
associated storage and maintenance costs--we are currently reducing 
that stockpile by 32,000 short tons per year. The Army is also becoming 
more efficient by using bar code technology to reduce processing times 
and improve inventory management for Organizational Clothing and 
Individual Equipment, along with an entire suite of initiatives aimed 
at streamlining supply operations across the board for this gear.

                      EQUIPMENT ON HAND READINESS

    The Army is also taking actions to improve our equipment on hand 
readiness and to ensure we do a better job of reporting the true 
capability of our modular force. The logistics, readiness and equipping 
staffs are conducting a thorough review of all the Army's equipping 
requirements to ensure we have the right capabilities in the right 
quantities reflected in our authorization documents. Taking advantage 
of the experience and advice of our combat-experienced commanders, we 
are validating and where appropriate, adjusting our requirements. This 
allows us to redistribute on hand equipment so that we can make maximum 
use of the dollars Congress provides.

                              STEWARDSHIP

    Property Accountability is the foundation of good stewardship and a 
top priority of the Army's leadership. The Army is adapting its 
corporate equipment accountability policies and processes to support 
Army Force Generation and streamline its procedures. We have placed 
increased emphasis on stewardship by publishing orders that mandate 
that all Army Commands, Army Service Component Commands, and Direct 
Reporting Units account for everything, account for and redistribute 
excess, and educate leaders at every level to reestablish a culture of 
supply discipline. The Army's Property Accountability Campaign is a 
highly visible, enduring effort that enables the Army to make prudent 
use of its resources and enhance its readiness.

                          AMMUNITION READINESS

    Over the past 9 years of war, the Army has steadily improved its 
ammunition readiness while supporting our deployed forces. Our forward 
positioned forces can fully support their missions, while maintaining 
their stocks at the highest readiness levels. The Army's ability to 
flex to support missions and operations has vastly improved since 2003, 
when we came out of our post Cold War hiatus on ammunition production. 
We continue to monitor our ammunition readiness closely, working in 
conjunction with the other Services, to ensure that the DOD is able to 
supply a highly trained force when and where they are needed.

                               CONCLUSION

    Army logisticians work tirelessly to make sure that the Army is 
ready whenever called upon; and we continue to improve on our readiness 
every day. We are simultaneously meeting our goals of drawing down in 
Iraq while supporting the needs of the warfighters in Afghanistan. In 
addition to these military operations, the Army has executed multiple 
humanitarian assistance and disaster relief missions in which it has 
provided support in the aftermath of events such as the earthquake in 
Haiti, the flood in Pakistan, and the earthquake and tsunami in Japan. 
Here at home, we are determining the best ways to respond to future 
contingencies by supporting our industrial base facilities, 
strategically placing equipment and supplies across the globe in 
prepositioned stocks, fully supporting deployed forces with critical 
ammunition and other supplies, and pursuing new initiatives in 
operational energy. As mentioned throughout my testimony, Army 
logisticians are also looking at ways to become more efficient. We 
believe we are successfully addressing current challenges and working 
to posture our equipment, policies, industrial base, and people so that 
we can be ready for the future. I would like to thank the subcommittee 
again for their support and look forward to your questions.

    Senator McCaskill. Thank you.
    Lieutenant General Panter.

   STATEMENT OF LT. GEN. FRANK A. PANTER, JR., USMC, DEPUTY 
 COMMANDANT FOR INSTALLATIONS AND LOGISTICS, U.S. MARINE CORPS

    General Panter. Chairman McCaskill, Senator Ayotte, and 
other distinguished members of the subcommittee, thank you for 
the opportunity to speak to you about the materiel readiness of 
the U.S. Marine Corps. On behalf of all the marines and their 
families, thank you for your unwavering support.
    I would respectfully request my written statement be 
submitted for the record.
    I just returned from Afghanistan yesterday. I had the 
privilege to travel with our Commandant of the Marine Corps and 
our Sergeant Major of the Marine Corps. We observed the marines 
and sailors in the Regional Command Southwest. That's the area 
were the U.S. Marine Corps is operating in Afghanistan--a 
pretty tough neighborhood. I'd like to share with you just a 
couple of stories, what I saw while I was there.
    There's no other way to put it. It is pretty eye-watering 
to observe your marines and sailors professionally performing 
their assigned missions in a very harsh environment. It was 105 
degrees while we were there. They're doing it without 
complaint. We saw things like young captains, lieutenants, 
staff sergeants, and gunnery sergeants planning and conducting 
convoy operations to resupply outlying forward operating bases. 
These convoys range in size from 17 vehicles, roughly, to as 
high as 70 or 80 vehicles, with as many as 140 personnel 
assigned to them. These are, essentially, combat patrols and 
they're dangerous.
    We watched a section of the light armored vehicle battalion 
return from a route interdiction mission in Southern Helmand 
Province. These marines have been out from their forward 
operating base since late February. They hadn't had showers. 
They'd been living off of meals ready-to-eat. But, they were in 
high spirits and motivated.
    It was pretty impressive to see them come back to the 
forward operating base, and watch them immediately turn to 
maintaining their equipment, accounting for their equipment, 
repairing their equipment.
    I had a chance to watch our doctors operate on wounded 
marines. I saw one doctor operating on a marine that had been 
shot in the neck, and he saved his life.
    The stories go on and on. The bottom line is that they're 
in a dangerous environment. These stories represent any of my 
brothers at arms sitting at the table. The leadership that's 
being shown by our young warriors is just simply amazing. 
Bottom line, you have the right to be proud of your marines 
forward-deployed.
    As you mentioned, our equipment abroad has been stressed 
over the last almost 10 years of combat. Our readiness ratings 
at our home station are not what we would like for it to be. We 
continue to globally source equipment to respond rapidly to 
emerging treats in the Middle East, and elsewhere in the globe, 
throughout the Marine Corps.
    I'd be more than happy to answer your questions related to 
our planning for reset and reconstitution.
    In closing, I'd like, again, to thank you, on behalf of our 
brave and dedicated marines and their families, for your 
continued support and your past support. The U.S. Marine Corps 
stands ready to fulfill our role as ``America's Expeditionary 
Force-in-Readiness.'' And with your support, we will continue 
to respond appropriately.
    Thank you.
    [The prepared statement of General Panter follows:]

          Prepared Statement by Lt. Gen. Frank A. Panter, USMC

    Chairman McCaskill, Ranking Member Ayotte, members of the 
subcommittee, thank you for the opportunity to provide you a report on 
how the Marine Corps is sustaining the force. Despite high operational 
tempo, your marines are resilient, motivated, and performing superbly 
in combat, maritime security, humanitarian assistance and disaster 
relief missions around the globe.\1\
---------------------------------------------------------------------------
    \1\ CMC Posture Statement, pp. 1-2.
---------------------------------------------------------------------------
    Today, partnered with the U.S. Navy, we have roughly 32,000 marines 
forward deployed and forward engaged around the world. This past year 
alone, our afloat forces conducted humanitarian assistance missions in 
Pakistan, Haiti, and the Philippines; recaptured the pirated ship 
Magellan Star, rescuing its crew from Somali pirates; and partnered 
with allied forces in engagement missions in the Pacific Rim, Latin 
America, Africa, and Eastern Europe.
    Even as we speak today, your U.S. Marine Corps is supporting 
disaster relief operations in Japan as the result of the recent 
devastating earthquake and tsunami while concurrently supporting 
Operations Odyssey Dawn and Enduring Freedom.
    The Marine Corps is keenly aware of the fiscal realities 
confronting our Nation. During these times of constrained resources, 
the Marine Corps remains committed to being the best stewards of scarce 
public funds. We maintain a longstanding tradition in Congress as the 
DOD's ``Penny Pinchers.'' Our institutionalized culture of frugality 
positions us as the ``best value'' for the defense dollar. For 
approximately 8.5 percent of the annual Defense budget, the Marine 
Corps provides the Nation 31 percent of its ground operating forces, 12 
percent of its fixed wing tactical aircraft, and 19 percent of its 
attack helicopters.
    The Marine Corps' continued success as ``America's Expeditionary 
Force-in-Readiness'' is completely dependent on continued congressional 
investment in our marines, their families, the reset and modernization 
of our equipment, and the training of the Marine Air Ground Task Forces 
(MAGTF) for future security environments. On behalf of all marines, 
their families, and our civilian marines, thank you for your unwavering 
support.

                        ROLE OF THE MARINE CORPS

    As our commandant recently testified, the role of the U.S. Marine 
Corps affords three strategic advantages for our Nation:

         We are a versatile ``middleweight'' force capable of 
        response across the range of military operations;
         We have inherent speed and agility that buys time for 
        our Nation's leaders; and
         We possess an enabling and partnering capability in 
        joint and combined operations.

    To enable these strategic advantages, the commandant identified 
four enduring priorities aligned with the 2010 National Security 
Strategy:

    (1)  Continue to provide the best trained and equipped Marine units 
to Afghanistan;
    (2)  Rebalance our Corps, posture it for the future, and 
aggressively experiment with and implement new capabilities and 
organizations;
    (3)  Better educate and train our marines to succeed in distributed 
operations and increasingly complex environments; and
    (4)  Keep faith with our marines, sailors, and our families.\2\
---------------------------------------------------------------------------
    \2\ CMC Posture Statement, pp. 2-4.

                       OPERATION ENDURING FREEDOM

    We have made tremendous progress in Afghanistan and this clearly 
remains our number one priority. At present, there are more than 20,000 
marines deployed in Afghanistan. The gains that we have achieved in 
Helmand Province are the result of the outstanding leadership, 
professionalism, and bravery of our young marines and their leaders on 
the ground. We will continue to provide forces to Afghanistan capable 
of full spectrum combat and counterinsurgency operations, while 
balancing our capabilities to meet the other tasks the Nation will ask 
of us in the future. We have provided, and will continue to provide, 
the best possible training and equipment for our marines to further 
capitalize on the current successes in Afghanistan.
    Marine units operating in Afghanistan have the highest state of 
readiness for equipment, personnel, and training. Through congressional 
support, we continue to receive funds for the rapid fielding of 
urgently needed items to support the Afghanistan effort. The Mine 
Resistant Armor Protected (MRAP) vehicles and the MRAP All Terrain 
Vehicles provide superb force protection as our marines continue to 
reclaim ground previously controlled by the Taliban. In December 2010, 
we deployed a reinforced Tank Company to complement our efforts in 
Regional Command Southwest to further exploit our hard-earned 
achievements in this highly contested region.

                       GROUND EQUIPMENT READINESS

    As the commandant testified in his statement before Congress in 
March, our equipment abroad and at home stations has been heavily taxed 
in nearly a decade of constant combat operations.\3\ We continue to 
globally source equipment for Afghanistan, and to meet other equipment 
requirements as we rapidly respond to emerging threats in the Middle 
East and elsewhere around the globe. The requirement to fully resource 
deployed forces, often in excess of our tables of equipment, has 
resulted in redistribution of assets from nondeployed forces and 
strategic programs to meet these requirements. The result is a reduced 
availability of equipment essential to outfit and train our nondeployed 
units. The supply rating of units at home station that are not in pre-
deployment training hovers around 65 percent. When we surged forces 
into Afghanistan, we sent almost half of the required equipment 
directly from Iraq to Afghanistan without full reset actions. Success 
in Afghanistan has stressed our equipment readiness posture due to the 
following factors:
---------------------------------------------------------------------------
    \3\ CMC Posture Statement, p. 4.

         The harsh environment and tempo of operations in 
        theater through nearly a decade of combat have accelerated wear 
        and tear.
         The enemy's weapon of choice in Afghanistan (as it was 
        in Iraq)--the improvised explosive device--has greatly 
        accelerated wear and tear on our vehicles due to the increased 
        weight of vehicle armor.
         The greatly distributed nature of current operations 
        has shown us that our legacy tables of equipment were 
        inadequate. As a result, the type and number of ground 
        vehicles, radios, and other major end items has significantly 
        increased. For example, in our infantry battalions, the number 
        of tactical vehicles has almost doubled while the number of 
        radio sets has grown sevenfold.

                                 RESET

    The decision to rapidly build combat power in Afghanistan forced us 
to delay our original plans to reset the Corps. We estimate that our 
reset requirements have increased as a direct result of the shift of 
equipment from Iraq to support the surge of forces in Afghanistan. 
While we have adjusted our original reset plan, we continually seek to 
synchronize Marine Corps reset efforts to ensure we effectively and 
efficiently reset equipment to support follow-on combat operations. 
Major elements of our ongoing reset plan are:

         Better integrating our Ground Combat Tactical Vehicle 
        Strategy as part of an overall Ground Equipping Strategy. These 
        efforts are informing the Reset and Reconstitution resource 
        allocation decisions for the Marine Corps.
         Maximizing sources of repair in the Central Command 
        area of responsibility to sustain our equipment in theater by 
        tapping into joint capabilities such as the great support 
        provided by the U.S. Army Material Command and the Defense 
        Logistics Agency.
         Aggressively repairing equipment at our depots and 
        distributing to fill shortfalls for established priorities.
         Disposing of equipment deemed beyond economical repair 
        or no longer needed in our inventory.

    The commandant stated that the price tag for reset is $10.6 
billion, of which $3.1 billion has been requested in fiscal year 2011, 
and $2.5 billion in fiscal year 2012. The remaining $5 billion will be 
needed upon the completion of our mission in Afghanistan.\4\ This 
funding will provide depot level maintenance of equipment; procurement 
of combat vehicles, major weapons systems, and engineering equipment; 
replacement of ammunition; and related expenditures.
---------------------------------------------------------------------------
    \4\ CMC Posture Statement, p. 12.
---------------------------------------------------------------------------
    Reconstitution of Equipment. As we implement the changes identified 
in lessons learned from nearly 10 years of combat and from our force 
structure review, we will continue to assess modernization requirements 
for equipment to meet our post-Afghanistan posture. Our initial 
estimate of costs to modernize equipment sets to support future 
operations is $5 billion, which is completely separate from our reset 
costs. We have begun to address our reconstitution shortfall, 
requesting $253 million in fiscal year 2012 for new equipment 
procurement.\5\
---------------------------------------------------------------------------
    \5\ CMC Posture Statement, p. 12.
---------------------------------------------------------------------------
                        PREPOSITIONING PROGRAMS

    The current MPF program is composed of a fleet of 16 ships divided 
into 3 Maritime Prepositioning Squadrons (MPSRON) located in the 
Mediterranean Sea, Indian Ocean (Diego Garcia), and Pacific Ocean (Guam 
and Tinian). When completely loaded, Marine Corps prepositioning 
vessels today carry more than 26,000 pieces of major equipment 
including tanks, wheeled tactical vehicles, and howitzers, as well as 
the necessary supplies to support our expeditionary force.
    We continue to rotate the MPSRONs through our scheduled maintenance 
cycles at our Blount Island complex in Florida. Our MPSRONs reset 
efforts will ensure the ships are loaded with the most capable and 
modern equipment available in order to support the full range military 
operations. While there are some critical shortages, the readiness 
trend lines remain high and our Maritime Preposition Force remains a 
viable option for the Nation when needed to support contingencies plans 
throughout the globe.
    The Department of the Navy is currently funding the full Maritime 
Prepositioning Force (MPF) program of 16 ships through fiscal year 
2012. However, the Department of the Navy POM-13 efficiency approved by 
the Secretary of Defense places six ships in Reduced Operating Status 
(ROS) beginning in fiscal year 2013. This equates to savings of 
approximately $500 million across the Future Years Defense Plan but 
implementation of this new strategy needs additional analysis. The 
Marine Corps will continue to optimize its MPF program to remain a 
responsive and relevant warfighting capability to Geographic Combatant 
Commander requirements.
    With the deferring of MPF-Future (MPF-F), the Marine Corps and Navy 
have focused on an interim solution to enhance current MPF with three 
new programs of ships to enable future seabasing concepts. The addition 
of three Mobile Landing Platforms (MLP) and three Auxiliary Dry Cargo/
Ammunition ships (T-AKEs) to the MPSRONs, coupled with existing Large, 
Medium-Speed, Roll-On, Roll-Off (LMSR) cargo ships, will enable the 
MPSRONs to conduct at-sea, sea-state three, selective offload of 
vehicles, personnel, and equipment without complete reliance on fixed 
ports. The introduction of MLPs, Auxiliary Dry Cargo/Ammunition ships 
(T-AKEs), and LMSRs provide the Navy and Marine Corps team a 
substantial step in enhancing our current sea-basing capabilities. It 
is important to note that these programs are not just strategic war 
reserve. Marine Corps prepositioning programs support forward-deployed 
training exercises, theater engagement and, with the amphibious ships 
of the U.S. Navy, the steady state requirements of the combatant 
commanders.

                           ENERGY INITIATIVES

    For installations, we have a diverse and balanced portfolio 
including photovoltaic, wind and landfill gas generated renewable 
power. In 2012, the Marine Corps plans to invest over $200 million in 
installations energy. Over 90 percent of that will be invested on 
efficiency projects to decentralize heating plants, upgrade HVAC 
systems, retrofit lighting fixtures/controls, and improve building R-
values (insulating properties) to reduce energy consumption.
    Up to 10 percent of the investment will support additional 
renewable energy sources. Our overall energy investments over the next 
3 years will enable the Marine Corps to meet the requirement to reduce 
Energy Intensity by 30 percent by 2015. To date, we have cut Energy 
Intensity by 10 percent. All facilities being constructed by the Marine 
Corps adhere to the most stringent energy standards in the construction 
industry and are certified to a minimum standard of LEED Silver. Many 
of our recent projects have been certified to LEED Gold and Platinum.
    While our primary objectives for installation energy initiatives 
are environmentally and fiscally focused, for our deployed units, the 
safety and well-being of our marines and sailors in combat are our 
critical goals. We consider reducing energy consumption on the 
battlefield as a force protection issue in that it reduces the 
logistics burden to sustain forces in the field. Additionally, energy 
efficiency makes us more expeditionary by extending operational range 
and reducing reliance on logistical support.
    The Marine Corps is experiencing success in a number of 
expeditionary energy initiatives. Our current initiatives in 
Afghanistan center in Helmand Province and include solar battery 
chargers for portable radios, photovoltaic arrays (towed and land 
arrayed) for static combat outposts, and solar thermal powered tent 
lighting. We have purchased 200 shelter liners for our standard Base-X 
dome tents. These liners will raise the R-value of our tents from R-1 
to approx R-3. These improvements should pay for themselves in fuel 
saved in less than 1 year on the battlefield.

                            FUTURE READINESS

    In fulfilling the commandant's priorities, we are seeking to 
rebalance the Corps, posture for the future, and aggressively 
experiment with and implement new capabilities and organizations. The 
2010 Quadrennial Defense Review and the 2010 National Security Strategy 
identify the necessity of overcoming irregular threats and enabling 
forces that are globally available, yet regionally focused. Today, 
Geographic Combatant Commanders continue to register a need for forward 
deployed amphibious forces capable of operating across the spectrum of 
military engagements, from countering irregular threats to conducting 
security cooperation, from engaging in regional deterrence to providing 
crisis response.
    In recognition of this shifting landscape, last fall the U.S. 
Marine Corps conducted a rigorous force structure review. The outcome 
of this review is a post-Afghanistan Marine Corps comprised of an 
optimum mix of capabilities to fulfill our role as America's 
Expeditionary Force in Readiness. This review addressed Marine Corps 
capabilities, cost, and readiness relative to operational requirements 
of the combatant commanders. The result is a strategically mobile, 
middleweight force, ideally suited for forward presence and crisis 
response. We will be light enough to leverage the capacity and 
flexibility of our amphibious ships, but heavy enough to carry the day 
when we get there. This optimum mix of people and equipment entails 
reorganization of our force and a modest reduction in personnel. As we 
make these adjustments, we will keep faith with our marines, sailors, 
and their families to ensure that personnel are successful in their 
transition back to civilian status. Achieving this future posture will 
of course require continued dialogue with and the support of Congress.

                                SUMMARY

    Your Navy and Marine Corps team offers an impressive forward 
deployed and forward engaged capability in the defense of our Nation. 
It provides an immediate response to contingencies and supports the 
combatant commanders in setting conditions for follow-on forces as 
required.
    On behalf of your brave and dedicated marines, I offer again our 
sincere appreciation for your past and continued support. The U.S. 
Marine Corps stands ready to fulfill our role as ``America's 
Expeditionary Force-in-Readiness,'' and with your support, we will 
respond rapidly and capably when called upon for future contingencies.

    Senator McCaskill. Lieutenant General Reno.

  STATEMENT OF LT. GEN. LOREN M. RENO, USAF, DEPUTY CHIEF OF 
 STAFF FOR LOGISTICS, INSTALLATIONS, AND MISSION SUPPORT, U.S. 
                           AIR FORCE

    General Reno. Good morning, Chairman McCaskill, Senator 
Ayotte, other distinguished members of the subcommittee. Thank 
you for the opportunity to discuss the materiel readiness of 
your Air Force.
    As Secretary Donley previously stated, passing a fiscal 
year 2011 Defense Appropriations bill is essential to avoiding 
severe disruptions to readiness. On behalf of the Air Force, I 
thank you for your hard work in resolving this situation.
    Agile combat support underpins all Air Force core functions 
and plays a central role in our ability to create, protect, and 
sustain air and space forces. This is a challenging task, given 
over 20 years of constant combat operations.
    From the development and training of airmen, maintaining 
and supporting weapon systems, and regaining acquisition 
excellence, agile combat support enables the Air Force to 
remain a mission-focused and highly capable force across the 
full spectrum of military operations.
    Permit me to highlight the following areas: the fiscal year 
2012 budget and Air Force efficiencies, joint support to the 
warfighter, personnel readiness, nuclear deterrence operations, 
and weapon system sustainment and readiness.
    Within the Air Force's fiscal year 2012 budget request is 
$33.8 billion for agile combat support. This represents a 
careful balance of resources among the Air Force core functions 
necessary to implement the President's national security 
strategy and an extraordinary effort to ensure America gets the 
maximum value out of every dollar.
    Last year, the Secretary of Defense directed the Services 
to identify $100 billion in efficiencies in overhead and 
support, and move it to warfighting and readiness. Our fiscal 
year 2012 budget supports that efficiency initiative and 
incorporates over $33 billion in efficiencies across the FYDP. 
The savings will be shifted to higher-priority combat 
capability as we reduce our overhead costs, improve business 
practices, and eliminate excess, troubled, or lower-priority 
programs.
    Our airmen continue to inspire us with their dedication and 
service, serving proudly alongside their Army, Marine, Navy, 
and Coast Guard teammates. With airmen at 135 locations 
worldwide, nearly 37,000 forward-deployed and more than 57,000 
forward-stationed, the Air Force fully supports the joint 
fight. The airmen that form the logistics chain have provided 
world-class support to the joint and coalition team in 
Operation Iraqi Freedom (OIF), Operation New Dawn, Operation 
Enduring Freedom (OEF), and most recently, Operations Tomodachi 
and Odyssey Dawn.
    Continued and sustained high operations has reduced our 
personnel readiness. Since 2003, we have seen a steady, but 
slow, decline in reported readiness indicators. At present, 22 
career fields are stressed. However, there are a number of 
programs in place to bolster manning in these career fields, as 
well as to mitigate potential negative effects on our airmen 
and their families.
    We continue to provide two of the three arms of the 
Nation's nuclear deterrence with steadfast excellence, 
precision, and reliability. To that end, we have taken positive 
steps in the fiscal year 2012 budget to continue improving this 
core function.
    The mission capability of the airlift and refueling fleet 
remains high, at 82.7 percent, while meeting robust and dynamic 
operational requirements. Mission capability of the fighter-
bomber fleet is adequate, at 74 percent. Overseas contingency 
funding (OCO), the fiscal year 2012 President's budget request, 
and efficiencies combine to enable us to meet in excess of 84 
percent of our weapon system sustainment requirements. The 
professionalism and dedicated work of our airmen ensure our 
aircraft inventory is ready.
    In closing, the Air Force is prepared for today's 
operations and tomorrow's uncertainties despite fiscal 
challenges and high operations tempo (OPTEMPO). With the 
uncompromising commitment to Air Force core values, the Air 
Force remains ready to provide global vigilance, reach, and 
power for America.
    Chairman McCaskill, Senator Ayotte, and distinguished 
members of the subcommittee, it's an honor to be here before 
you today. Thank you for your service and continued strong 
support of our airmen and their families.
    I have submitted a written statement for the record, and I 
look forward to your questions.
    [The prepared statement of General Reno follows:]

           Prepared Statement by Lt. Gen. Loren M. Reno, USAF

                              INTRODUCTION

    The United States continues to confront a dynamic international 
environment requiring the military to remain strong and agile in the 
face of a diverse range of threats. Along with our joint partners, the 
Air Force defends and advances the interests of the United States by 
providing unique core function capabilities required to succeed in 
today's fight and future conflicts. Underpinning the work of all Air 
Force Core Functions are the capabilities inherent in Agile Combat 
Support (ACS). ACS is the ability to create, protect, and sustain air 
and space forces across the full spectrum of military operations, 
spanning the entire set of our diverse functional capabilities. The 
fiscal year 2012 budget request of $33.8 billion for ACS impacts our 
entire Air Force--from the development and training of airmen, 
maintaining and supporting weapon systems, and regaining acquisition 
excellence. ACS enables the Air Force to remain a mission-focused and 
highly capable force; a difficult task given over 20 years of constant 
combat operations.

                       SUPPORTING THE WARFIGHTER

    Our enduring commitment to readiness and the joint fight is 
evidenced by the nearly 37,000 forward deployed, and more than 57,000 
forward stationed airmen at 135 locations worldwide. These Airmen 
contribute to the fight in a variety of ways by fulfilling traditional 
roles as Air Liaison Officers, Combat Control Teams, Combat 
Communications and Battlefield Weather personnel, as well as non-
traditional roles supporting Joint Expeditionary Taskings as Provincial 
Reconstruction Teams, Ground Convoy Operators and Agricultural 
Development Teams. The many outstanding Airmen that form the 
``logistics chain''--maintainers, security forces, vehicle operators, 
explosive ordnance disposal teams, engineers, aerial porters, and 
others have enabled the Air Force to conduct more than 45,000 sorties 
supporting Operations Iraqi Freedom/New Dawn, and almost 101,000 
sorties supporting Operation Enduring Freedom, deliver over 1.78 
million passengers and 712,000 tons of cargo, and employ almost 2,580 
short tons of munitions.
    The full impact of agile combat support cannot be expressed by mere 
statistics of tonnage moved and sorties generated. ACS covers virtually 
every aspect of joint and coalition operations and one example of our 
support to the entire joint and coalition team is Basic Expeditionary 
Airfield Resources (BEAR). BEAR includes virtually everything the joint 
warfighter might need for airfield operations in an austere environment 
such as shelters, generators, hygiene kits, and airfield matting. A 
recent example of how BEAR was used is when the 49th Materiel 
Maintenance Group at Holloman Air Force Base, NM, and the Army's 
Surface Deployment and Distribution Command rapidly packed and shipped 
BEAR assets to Afghanistan. This movement equated to 14,550 short tons 
of equipment enabling the set of 15 housing encampments supporting 
8,250 personnel. Additionally, the Air Force has transferred 22 BEAR 
sets to the Army and Marine Corps to support the stand-up of Forward 
Operating Bases throughout Afghanistan as well as two BEAR sets to the 
Navy to support the initial stand-up of detainee operations at 
Guantanamo Bay, Cuba. These tremendous efforts exemplify our unmatched 
Agile Combat Support--not just to Air Force units--but also to our 
joint and coalition partners.

                        PERSONNEL AND READINESS

    With Air Force personnel deployed to more than 135 locations 
worldwide on an average day, we rely heavily on the total force. Of the 
37,000 forward deployed airmen, nearly 30,000 are continuing on a 
rotating basis to contribute to operations in the U.S. Central Command 
(CENTCOM) area of responsibility (AOR), including 10,000 airmen in 
Afghanistan. An additional 57,000 total force Airmen are forward 
stationed overseas providing capabilities in direct support of our 
combatant commander requirements. From home stations here in the United 
States, approximately 216,000 Total Force airmen also provide daily 
support to combatant commanders' worldwide operations.
    This level of activity reflects our commitment to provide Global 
Vigilance, Reach, and Power in today's joint fight. However, this high 
operations tempo (OPTEMPO) has also had some detrimental effects on our 
overall readiness. Readiness for full spectrum military operations is a 
challenge for our combat air forces and some other limited-supply/high-
demand units. Since 2003, we have seen a slow but steady decline in 
reported readiness indicators. Our OPTEMPO since 2001 has produced 
lower deploy-to-dwell ratios for high-demand skills. At present, 16 
enlisted and 6 officer career fields are ``stressed''. However there 
are a number of programs in place to bolster manning in these career 
fields, as well as mitigate potential negative effects on our Airmen 
and their families.
    Regardless, the readiness of the Mobility Air Forces (MAF) remains 
high while meeting robust and dynamic operational requirements. Our 
airlift fleet continues to provide strategic airlift as well as theater 
and direct support airlift missions moving personnel and a wide variety 
of equipment and supplies. MAF assets continue to directly support our 
Joint and coalition partners, achieving a mission capable (MC) rate of 
82.7 percent despite a 350 percent increase in hourly utilization 
within the AOR. Stateside, MAF fleet MC and aircraft availability (AA) 
rates have steadily improved over the last few years, attaining current 
rates of 78 percent and 65 percent, respectively. These improvements 
are attributed to initiatives such as the C-5 Reliability Enhancement 
and Re-Engining Program and the C-130 Avionics Modernization Program.
    The readiness of Combat Air Forces (CAF) aircraft is adequate 
despite challenges from accumulating hours on our fleet faster than 
envisioned when the aircraft were first fielded. We're now flying the 
oldest Air Force fleet in our history as a result of 20 years of 
continuous combat operations. The average age of all CAF aircraft is 
21.3 years. Our CAF aircraft fleet has shown a slight decline in MC and 
AA rates of 3 percent and 4.5 percent, respectively over the past 5 
years, settling at 75 percent and 65.5 percent for fiscal year 2011. In 
the AOR, the current MC rate is 84 percent. This is to be expected due 
to the focus on warfighter support. To offset these challenges, we are 
conducting full-scale structural and durability tests and engineering 
analysis to assess the longevity of our CAF fleets. These actions to 
extend and modernize the legacy fleet as a bridge to 5th generation 
capabilities are not considered replacement actions. The F-16 Service 
Life Extension Program is one example of the ongoing efforts to 
mitigate fighter force challenges.
    In the logistics arena, we've improved funding to Weapon System 
Sustainment (WSS); however, sustainment challenges continue as we field 
new weapon systems and balance contract versus organic sources of 
repair. To address these readiness issues, we must keep aircraft 
recapitalization and procurement programs on track while continually 
managing our force to ensure we maintain the right numbers and mix of 
skills in our highly tasked and highest priority mission areas. The 
dedicated work and professionalism of our Airmen ensure our aircraft 
inventory is ready, despite extensive use in contingency operations and 
increases in fleet service life. Notwithstanding these challenges, 
modernization and recapitalization of our aircraft remains a very high 
priority.

                    FISCAL YEAR 2012 BUDGET OVERVIEW

    For fiscal year 2012, the Air Force is requesting $150 billion in 
our baseline budget and $16 billion in the Overseas Contingency 
Operations (OCO) supplemental appropriation. Our budget request 
represents a careful balance of resources among the Air Force core 
functions necessary to implement the President's national security 
strategy, and an extraordinary effort to ensure America gets the 
maximum value out of every dollar.
    Last year, the Secretary of Defense directed the Services to 
identify $100 billion in efficiencies in overhead and support, and move 
it to warfighting and readiness. Our fiscal year 2012 budget supports 
the Office of the Secretary of Defense efficiency request and 
incorporates over $33 billion in efficiencies across the Future Years 
Defense Program (FYDP). The savings will be shifted to higher priority 
combat capability as we reduce overhead costs, improve business 
practices and eliminate excess, troubled or lower priority programs. As 
we consider how we can achieve efficiencies, the Air Force is looking 
across the enterprise, thinking broadly and creatively across business 
areas--from our organizational structures, to reducing fuel and energy 
consumption, to improving depot and supply-chain business processes and 
sustaining weapons systems.
    Specifically in the logistics area and weapon systems sustainment, 
we conducted an end-to-end review of over 5,500 sustainment tasks, 
resulting in a reduction of $1.2 billion in requirements. We also 
looked at supply chain management processes which led to expanding the 
use of strategic sourcing, the consolidation of accounts, and 
reductions in manpower and overhead. Finally, we standardized 
requirements using improved collaboration and supportability reviews to 
increase planning accuracy and on-time depot performance. To date, our 
efforts have yielded $3 billion in efficiencies over the FYDP and will 
allow the Air Force to fund WSS at 85 percent, including funding in the 
OCO budget, in fiscal year 2012.
    In the energy area, the Air Force continues as a Federal energy-
conscious leader by advancing energy independence by reducing aviation 
fuel use, installation energy intensity, and vehicle fleet petroleum 
consumption. Our fiscal year 2012 budget request includes over $550 
million for energy initiatives and focuses on reducing energy 
consumption through enhanced efficiencies. We are already making 
significant reductions in aviation fuel use through the implementation 
of demand reduction initiatives adopted from commercial industry best 
practices. As we recapitalize our mobility fleets, we expect an annual 
savings of nearly 70 million gallons of fuel.
    The Air Force is also committed to reducing greenhouse gas 
emissions and carbon footprint through the reduced use of fossil fuels 
consumed directly through vehicles and facilities and indirectly 
through consumption of fossil fuel-generated electricity from the 
national electric grids. From replacing outdated heating/air-
conditioning systems, to using energy efficient light bulbs, to working 
with local communities to build large solar arrays and wind turbines on 
installations, we are utilizing practical and innovative solutions to 
meet our goal of reducing energy intensity by 30 percent by 2015.
    In fiscal year 2012, we will continue our energy conservation 
efforts, which have already reduced facility energy intensity nearly 15 
percent from 2003 levels. In fiscal year 2010, we exceeded our 
renewable goals and produced or procured nearly 7 percent of our total 
facility energy from renewable sources, and we continued to lead the 
Department of Defense as the number one purchaser of renewable energy 
for the fifth year in a row. To reduce our use of vehicle fleet 
petroleum on our installations, we maintain over 7,000 flex fuel and 
hybrid vehicles and over 1,800 low-speed vehicles. The Air Force has 
made significant progress and is committed to further energy 
efficiencies wherever we can find them.
    Realization of cost-savings initiatives like the ones mentioned 
above will allow the Air Force to reallocate funding to modernize and 
recapitalize weapons systems, improve capabilities, and enhance 
warfighter operations, especially in the current fiscally constrained 
environment.

                     NUCLEAR DETERRENCE OPERATIONS

    Continuing to strengthen our nuclear enterprise remains the number 
one Air Force priority. Toward that end, we have taken positive steps 
within the fiscal year 2012 budget request related to this core 
function.
    The Air Force Nuclear Weapons Center continues to pursue vital and 
deliberate sustainment of the nuclear enterprise through efforts such 
as the Air Force Comprehensive Assessment of Nuclear Sustainment 
process. ICBM modernization and sustainment includes ongoing programs 
to replace aging support equipment such as weapons load trailers, 
electronic systems test sets, weapons storage, and security systems. In 
addition to these important efforts, we are strengthening positive 
inventory control and accountability for Nuclear Weapons Related 
Materiel by creating improved visibility and performing semi-annual 
inventories. We're also refining the inspection process by using a 
self-assessment philosophy, examining the scope and size of the 
inspections, and performing rigorous root cause analysis of all major 
write-ups.
    Beyond nuclear weapon system sustainment and modernization, the Air 
Force is focusing on human capital as we carefully balance requirements 
for our limited, intensively scrutinized, high-demand airmen in the 
nuclear field. We've instituted changes to improve the long-term 
professional fitness of our most precious resource--our airmen. Our 
airmen must be trained, educated, and experienced through professional 
development initiatives designed to create the capabilities and culture 
this critical mission demands, and our Nation deserves. The Nuclear 
Enterprise Human Capital Execution Plan seeks to improve the 
development and retention of Airmen with appropriate experience and 
critical skills. Our new approach to managing enlisted talent will give 
us the capability to evaluate airmen in the nuclear field and provide a 
deliberate process for developing them.

                               CONCLUSION

    Air Force personnel, weapon systems, equipment, and organizations 
are prepared for today's operations and tomorrow's uncertain 
challenges, despite fiscal challenges and high operations tempo. With 
an uncompromising commitment, the Air Force remains ready to provide 
Global Vigilance, Reach, and Power for America.

    Senator McCaskill. Thank you.
    Vice Admiral Burke.

STATEMENT OF VADM WILLIAM R. BURKE, USN, DEPUTY CHIEF OF NAVAL 
  OPERATIONS FOR FLEET READINESS AND LOGISTICS (N4), U.S. NAVY

    Admiral Burke. Yes, ma'am. Chairman McCaskill, Senator 
Ayotte, and distinguished members of the Readiness and 
Management Support Subcommittee, it is my honor to participate 
in today's hearing, representing the Navy men and women--Active 
Duty, Reserve, and civilian--who work to ensure our Navy is 
ready to deliver the full range of capabilities we possess to 
defend the Nation. On their behalf, I also want to express our 
great appreciation for the work of this committee in support of 
their service. I would add my thanks on completing the fiscal 
year 2011 Appropriations bill. That was key to our readiness.
    As I discussed in my written testimony, readiness is a 
function of both capability and capacity, and my goal is 
finding the most effective balance to deliver readiness today 
and in the future. Both components are impacted by how we 
acquire new platforms and systems, how we accomplish 
significant upgrades on major systems, and how we sustain the 
current force and its existing capabilities. My responsibility 
is the sustainment of our current force, including Navy shore 
infrastructure. We must deliver the expected service life of 
our current warfighting platforms to provide the future 
capacity to meet the Nation's needs. Our shore infrastructure 
must support our warfighting platforms and our sailors.
    For fleet sustainment programs in the Navy's fiscal year 
2012 budget, we focus first on supporting our deployed forces 
in the current fights and then on achieving the expected 
service life of all of our platforms. Ashore, we focused on 
those projects that provide the greatest return on investment 
in supporting the warfighter and on those providing quality 
services for our sailors and their families. Because of the 
impact of energy consumption on both current affordability and 
future readiness, we continue our investment in reducing energy 
consumption and supplementing fossil fuels with renewable 
sources ashore, afloat, and in the air.
    The President's budget for fiscal year 2012 balances risk 
across the entire Navy program to achieve the strongest current 
and future readiness outcomes.
    Again, I appreciate the opportunity to be with you today, 
and look forward to discussing the Navy's sustainment programs 
with you.
    Thank you.
    [The prepared statement of Admiral Burke follows:]

            Prepared Statement by VADM William R. Burke, USN

    Madam Chairman McCaskill, Senator Ayotte, and distinguished members 
of the Senate Armed Services Committee, Readiness and Management 
Support Subcommittee, it is an honor for me to be with you today 
representing the over 600,000 men and women of the U.S. Navy, Active, 
Reserve, and civilians. Their dedicated service helps ensure the 
security of this Nation every day. Today, as always, our Navy is 
deployed globally with over half the Fleet at sea and more than 24,000 
personnel serving in the U.S. Central Command (CENTCOM) area of 
responsibility (AOR). Ashore, Navy personnel are supporting our 
deployed warfighters, and sailors and their families, at facilities 
worldwide.
    The readiness of the Navy to provide the warfighting resources 
needed by our combatant commanders (CCDRs) is a function of both combat 
capability and force capacity. Achieving the required levels of each 
requires a fine balance between acquiring the right force structure 
along with new warfighting capabilities, and properly sustaining 
existing capabilities and platforms to achieve their expected service 
life. The Navy has sustained its focus on ensuring our front line 
warfighters have the resources they need to accomplish their planned 
operations--and that is reflected in a continued high state of 
readiness of our deployed forces in their key mission areas.
    The President's budget for fiscal year 2012 provides the balanced 
funding necessary for the Navy to support today's force while 
developing the future capabilities and capacity necessary to continue 
to execute Navy missions in support of the National Military Strategy. 
Navy programming continues to be informed by our Maritime Strategy--``A 
Cooperative Strategy for 21st Century Seapower'' (CS21). Since its 
publication in 2007, CS21 has provided a clear and enduring vision of 
the core capabilities the Navy must provide for the Nation. Based upon 
this foundation, the Chief of Naval Operations provides annual guidance 
on his principal focus areas for executing the Maritime Strategy--which 
have become enduring imperatives. They are:

         Build the Future Force. In recent testimony before 
        this committee, Secretary Mabus and Admiral Roughead outlined 
        our plans to build the Navy required to deliver our core 
        capabilities into the future. The Navy budget submission 
        balances these plans with acceptable risk across all our 
        requirements to deliver a Navy program that most effectively 
        employs the resources entrusted to us.
         Maintain Warfighting Readiness. The CCDRs demand for 
        the capabilities delivered by Navy forces continues to grow. 
        Concurrently, we continue to reset in stride to deliver our 
        Global Force Management (GFM) commitments while taking 
        proactive steps to improve the readiness of our forces, 
        particularly our surface ships.
         Develop and Support our Sailors, Navy Civilians, and 
        Families. We continue to expand our capabilities to support our 
        sailors and families. The service and sacrifice of our 
        returning warfighters, particularly our wounded warriors and 
        their families, place a special obligation upon us, one we will 
        not shirk.

    My testimony today centers on the second of the CNO's focus areas, 
and the contribution of Navy readiness accounts in maintaining our 
warfighting readiness. The fiscal year 2012 budget provides the 
resources to deliver Navy units ready today, and to sustain our ships, 
aircraft, equipment, and supporting capabilities to be ready for 
tomorrow.

                         NAVY UNITS-READY TODAY

    Global trends in an uncertain world portend an increased demand for 
sea power. The safety and economic interests of the United States, its 
allies and partners rely upon the unimpeded trade and commerce that 
traverse the world's oceans. U.S. vital national interests are tied, 
therefore, to a secure maritime environment, which places global 
responsibilities on our Naval forces. The fiscal year 2012 budget, 
including Overseas Contingency Operations (OCO) funding, supports Navy 
operations across this broad spectrum of responsibilities. Our 
readiness and operational support programs will meet the anticipated 
CCDR demand for Navy forces within force structure constraints and 
provide surge forces in support of operational plans, with an 
acceptable level of risk.

Afloat Operations
    The Fleet Response Plan (FRP) remains the foundation for Navy force 
generation, and has proven to optimize returns on training and 
maintenance investments. It enhances sailor proficiency, and ensures 
units and task groups are trained and certified in defined, progressive 
levels of employability to meet both deployed presence and surge 
requirements in support of potential operation plan execution. The 
exact FRP Operational Availability (Ao) required each year depends on 
the projected GFM plan for the year plus surge requirements. Because of 
current OPTEMPO demands, our next-to-deploy forces are reaching 
deployed readiness levels later in the FRP cycle, resulting in some 
risk to our surge capacity at any given time.
    Ship Operations
    The fiscal year 2012 budget (including OCO) provides the Ship 
Operations account with funding for an average ship's OPTEMPO of 58 
steaming days per quarter (deployed) and 24 steaming days per quarter 
(nondeployed). This OPTEMPO enables the Navy to meet FRP training/
certification requirements with acceptable risk. Measures, such as 
increased use of simulators, concurrent training and certification 
events while underway, and the judicious use of fuel, are used to 
mitigate risk. While the Navy met all GFM commitments in fiscal year 
2010, including the operational requirements in support of Operation 
Iraqi Freedom (OIF)/Operation New Dawn (OND) and Operation Enduring 
Freedom (OEF), we continue to experience high OPTEMPO globally. 
Sustainment of this OPTEMPO remains dependent upon the receipt of OCO 
or similar supplemental appropriations.
    Air Operations (Flying Hour Program)
    The Flying Hour Program (FHP) account provides for the operation, 
maintenance, and training of 10 Navy carrier air wings, 3 Marine Corps 
air wings, Fleet Air Support (FAS) squadrons, training commands, 
Reserve Forces, and various enabling activities. The fiscal year 2012 
budget (including OCO) resources the FHP account to achieve Training-
rating (T-rating) levels of T2.3 for Navy and T2.0 for the Marine 
Corps. With this funding, Tactical Aviation squadrons conduct strike 
operations, provide flexibility in dealing with a wide range of 
conventional and irregular threats, and provide long range and local 
protection against airborne surface and sub-surface threats. FAS 
squadrons provide vital fleet logistics and intelligence. The Chief of 
Naval Air Training trains entry-level pilots and Naval Flight Officers, 
and Fleet Replacement Squadrons provide transition training in our 
highly capable, advanced Fleet aircraft. Reserve component aviation 
provides adversary and logistics air support; makes central 
contributions to the counter-narcotics efforts; conducts mine warfare; 
and augments Maritime Patrol, Electronic Warfare, and Special 
Operations support.
    The Navy is increasing the use of simulation to reduce nondeployed 
flying hours and is continuing to invest in new simulators. We are also 
investing in improvements to existing simulators to enable further 
reductions in aircraft flying hours while maintaining requisite 
training levels for deployed operations.

Shore Operations
    Shore infrastructure supports and enables operational and combat 
readiness. It is an essential element to the quality of life and 
quality of work for our sailors, Navy civilians, and their families. 
Continued high operational demand has led the Navy to take deliberate 
risk in Shore Readiness programs to resource our critical warfighting 
needs.
    To meet critical mission requirements with today's available 
resources, the Navy is targeting our shore investments to have the 
greatest impact on warfighting readiness and the quality of life of our 
sailors and their families. We are focusing sustainment and restoration 
efforts on barracks and mission-critical facilities such as shipyards, 
airfields, hangars, piers and dry docks. Likewise, we are directing 
capital investments ashore toward the recapitalization of critical Navy 
assets and the construction and modernization of new mission and 
warfighter support facilities. Despite today's fiscal and operational 
challenges, the Navy continues to support air and port operations and 
key shore initiatives such as nuclear weapons security, bachelor 
housing, family services and shore energy initiatives.
    Family Readiness Programs and Child and Youth Programs
    The Navy's Family Readiness programs enhance mission readiness by 
assisting commanding officers, sailors, and their families in managing 
the demands of the military lifestyle. Our Navy Child and Youth 
Programs provide high-quality educational and recreational programs for 
Navy children ages 6 weeks through 18 years in multiple venues. All 
programs are operated in accordance with the Military Child Care Act 
and are DOD-certified and nationally accredited. This year, we will 
complete our 7,000-space expansion and meet the Office of the Secretary 
of Defense (OSD) goal of providing childcare to meet at least 80 
percent of the potential need of our military population.
    Bachelor Housing
    Our Bachelor Housing program currently focuses on two goals: (1) 
providing Homeport Ashore housing for our junior sea-duty sailors by 
2016; and (2) attaining the OSD goal of 90 percent ``adequate'' (Q1/Q2) 
bachelor housing. The Homeport Ashore program will complete a new 
barracks for 1,000 sailors at Naval Base Coronado this year, and the 
final three Homeport Ashore construction projects are programmed in 
fiscal year 2013 and fiscal year 2014. At the same time, the Navy 
increased our efforts to improve the condition of our existing 
barracks. The fiscal year 2012 budget requests $195 million per year 
across the Future Years Defense Program (FYDP) to bring 90 percent of 
our bachelor housing inventory to ``adequate'' condition by 2022.
    Family Housing
    Navy Family Housing supports the Navy's readiness by providing 
sailors and their families the opportunity for suitable, affordable and 
safe environments in community, privatized, or Navy-owned housing. The 
fiscal year 2012 Family Housing budget includes $75 million for family 
housing improvements, planning, and design. Our investments across the 
FYDP will enable Navy to meet OSD's target of bringing 90 percent of 
our family housing inventory into ``adequate'' (Q1/Q2) condition by 
2015. The Navy has privatized 97 percent of our CONUS and Hawaii family 
housing inventory. We continue to perform enhanced oversight of our 
privatized housing portfolio and ensure Navy sailors and their families 
continue to benefit from quality housing and services.
ensuring the navy is ready for tomorrow (navy platforms, equipment, and 

                        SUPPORTING CAPABILITIES)

    Sustaining the capital assets of the current force is essential to 
building the future Navy. Using the proven engineered maintenance 
planning of the carrier and submarine forces, the Navy is investing in 
improvements in surface ship maintenance processes to enhance long-term 
surface ship material readiness. Investment in future F/A-18 service 
life extension will assist in managing strike-fighter force structure 
until sufficient F-35 resources are available in the Fleet. Supporting 
capabilities are also funded to ensure a ready Navy in the future.

Ship Maintenance
    Keeping our ships in acceptable operating condition is vital to 
their ability to accomplish assigned missions and reach their expected 
service life (ESL), a key factor in the Navy's 30-Year Shipbuilding 
Plan. Surface ships, aircraft carriers and submarines currently in 
commission comprise approximately 70 percent of the ships that will be 
in service in 2020. Reaching ESL requires an integrated engineering 
approach to plan, fund, and execute the right maintenance.
    In 2009, Navy Fleet Commanders recognized significant deficiencies 
in surface ship material readiness and commissioned a review, known as 
the Fleet Review Panel for Surface Readiness, to fully investigate the 
causes and propose corrective action. Initiatives are currently 
underway to reverse the identified negative readiness trends, including 
an increase of 1,105 billets for optimally manned ships in fiscal year 
2012, and increasing manning at our Regional Maintenance Centers (RMCs) 
by 400 sailors and 385 civilian personnel across the FYDP. Navy is 
reopening the Intermediate Maintenance facilities in Norfolk and 
Mayport, providing maintenance support and valuable sailor skill 
training.
    We have also expanded the Surface Ship Life Cycle Management 
Activity into the Surface Maintenance, Engineering Planning Program 
(SURFMEPP). This activity is re-establishing the engineered 
requirements and Class Maintenance Plans (CMPs) necessary for surface 
ships to reach their ESL. Using the CMP and individual ship life-cycle 
maintenance plan, SURFMEPP is building a Baseline Availability Work 
Package (BAWP) for each scheduled availability, and then tracking the 
completion of all required maintenance actions. NAVSEA is conducting an 
independent technical review of the CMPs to verify they account for all 
individual ship life-cycle maintenance plan requirements. SURFMEPP 
provides the Navy with centralized surface ship life-cycle management 
and discipline in defining maintenance and modernization requirements. 
The result is better use of available maintenance dollars to achieve 
long-term readiness and achieve surface ship ESL.
    The fiscal year 2012 budget (including OCO) resources the ship 
maintenance account to 94 percent. This funding level represents the 
best balance between current force readiness and building the future 
force within available top line funding. Although we will defer $367 
million of maintenance, primarily in the Surface Force, the work 
accomplished by SURFMEPP enables us to mitigate risk by scheduling and 
completing the most critical maintenance in fiscal year 2012. We are 
also able to better understand the impacts and accurately track the 
deferred maintenance that must be accomplished in the future.
    The Navy is committed to the right level of ship maintenance at the 
most efficient cost but remains dependent upon the receipt of OCO or 
similar supplemental appropriations to fund ship maintenance 
requirements. We continue efforts to reduce the total cost of ownership 
of the Fleet, as we have done with SSN 688 and SSN 774 class 
submarines, through the analysis of engineered technical requirements 
and assessment of recently completed availabilities. The cyclic nature 
of ship and submarine depot availabilities from year to year continues 
to cause variations in budget requests and annual obligation levels. 
Budget years with multiple ship-docking availabilities increase 
required funding.
    Surface ship availabilities are conducted almost exclusively in the 
private sector. Nuclear submarine and aircraft carrier availabilities 
are primarily conducted in the public sector, with selected 
availabilities completed by nuclear capable private shipyards. Whenever 
practical, maintenance is performed in the ship's homeport to minimize 
the impact on our sailors and their families. The Navy recognizes that 
maintenance organizations need a stable and level workload to maximize 
efficient execution. We level the workload to the maximum extent 
practicable within operational constraints.

Aviation Maintenance
    The Aviation Depot Maintenance account ensures operational aviation 
units have sufficient Ready for Tasking (RFT) aircraft to accomplish 
assigned missions. The fiscal year 2012 budget request (including OCO) 
resources the Aviation Depot Maintenance account to 95 percent of 
requirement, and funds the repair and overhaul of 742 airframes and 
2,577 engines. The shortfall results in a projected backlog of 23 
airframes and 162 engines, which is moderate, but acceptable risk and 
below our 1 year red-line backlog of 100 airframes and 340 engines.'' 
The Naval Aviation Enterprise (NAE) AIRSpeed strategy continues to 
deliver cost-wise readiness by focusing efforts to reduce the cost of 
end-to-end resourcing, increase productivity, and improve the 
operational availability of aircraft. This strategy provides a robust 
capability to use efficiencies to manage the highest priority 
requirements.

Navy Expeditionary Forces
    Expeditionary Navy forces support global missions that expand and 
enhance CCDR capabilities by deploying security, construction, 
logistics and training units. NECC's cost effective capabilities are 
expected to remain in demand supporting OND/OEF missions and CENTCOM's 
long-term, steady state security posture. The fiscal year 2012 budget 
supports major expeditionary capabilities in the following areas:

         Explosive Ordnance Disposal (EOD): Provide Brigade/
        Battalion-level HQ elements or Platoons and Mobile Support 
        Teams executing Joint EOD operations in multiple theaters, as 
        well as supporting Carrier Strike Group and Amphibious Ready 
        Group deployments around the world.
         Maritime Expeditionary Security Forces (MESF): Provide 
        force protection for high value assets, including maritime 
        infrastructure protection in the CENTCOM and Pacific Command 
        (PACOM) AORs. MESF forces also provide landward and seaward 
        security for Global Partnership Station operations, and 
        Embarked Security Teams for Operation Vigilant Mariner.
         Naval Construction Force: The Seabees provide 
        construction services for Theater Security Cooperation efforts, 
        disaster response, and build partner capacity. Alongside the 
        USMC, they led surge forces into Afghanistan, and currently 
        provide a Regimental Headquarters controlling a Joint force of 
        more than 3,000 personnel executing hundreds of projects as 
        well as four Naval Mobile Construction battalions in support of 
        OEF. In addition, the Seabees continue direct support to other 
        CCDRs, such as PACOM's Combined/Joint Special Operations Task 
        Force-Philippines. They provided infrastructure support to 
        relief efforts in Haiti, including reconstruction of port 
        facilities.
         Additional expeditionary forces supported by the 
        fiscal year 2012 budget include the Naval Expeditionary 
        Logistics Support Group, Riverine Forces, Mobile Diving and 
        Salvage Units, the Maritime Civil Affairs Security and Training 
        Command, and the Navy Expeditionary Intelligence Command. The 
        multiple capabilities of each of these organizations are highly 
        valued by the CCDRs.

Environment
    Our Navy continues to engage in comprehensive and robust 
environmental planning for at-sea training and operating areas to 
ensure environmental stewardship while carrying out the national 
defense mission. To date, we have completed documentation for 11 at-sea 
testing, training, and combat certification areas, and anticipate 
completing documentation for an additional four areas over the next 
year. We are always preparing for the next round of at-sea 
environmental planning.
    The Navy continues to maintain the world's foremost marine mammal 
research program to ensure science-based protective measures for Navy 
activities at sea. These measures allow the Navy to be both a good 
steward of our Nation's marine environment and a mission-ready global 
force for good.

Energy
    Because energy is as vital to our mission as the systems it fuels, 
we are actively pursuing the Secretary of the Navy's energy goals to 
increase combat capability and reduce reliance on fossil fuel from 
foreign sources through greater conservation, efficiency and the use of 
alternative energy sources. We continue to make great progress toward 
these energy goals, laying the foundation for reduced energy 
consumption and increased use of alternatives.
    Fuel consumption has a powerful impact on our forces and force 
structure, both in terms of the resources required to transport fuel 
and the sailors whose duty it is to protect this logistics tail. On the 
operational side, we are currently testing and evaluating technologies 
that will make our existing ships and aircraft more efficient, 
enhancing combat capability and reducing overall fuel consumption. The 
fiscal year 2012 budget includes funding to begin implementing many of 
these technologies in the Fleet, including efficient lighting, anti-
fouling hull and propeller coatings, improved engineering plant 
controls, and route optimization software. We also continue research 
and development of technologies that will be implemented in future 
years, such as a hybrid-electric drive for the DDG-51 class and engine 
efficiency modifications for the F-35.
    In addition, we have taken major steps forward with our alternative 
fuel test and certification program. In April 2010, we flew an F/A-18 
``Green'' Hornet beyond the sound barrier on a 50/50 blend of petroleum 
fuel and biofuel produced from the camelina plant. In October 2010, we 
conducted a full-power demonstration of the Riverine Command Boat-
Experimental using a biofuel blend produced from algae. The following 
month, we flew an MH-60S Seahawk helicopter on the camelina-based jet 
fuel blend. Navy also recently completed the first test of a maritime 
gas turbine engine, using a 50/50 biofuel blend. Completion of the test 
and certification process will ultimately allow us to demonstrate a 
``Green Strike Group'' in late fiscal year 2012.
    We are focusing our energy investments ashore to increase the 
energy security of critical assets, improve the energy efficiency of 
our infrastructure, and develop promising technologies. Specifically, 
we will increase the energy security of our Pacific Missile Range 
Facility in Hawaii and replace antiquated steam plants at three bases 
with modern and efficient energy systems. We are transforming our 
energy culture and behavior using enabling systems, with our new 
advanced metering infrastructure and secure system technologies to 
provide greater energy consumption transparency, efficiency 
opportunities, and control. Our strategy is to focus first on 
efficiency to enable compliance with legal mandates, while increasing 
our energy security and making progress toward alternative energy 
goals.
    Finally, along with developing and implementing new technologies, 
we will drive energy awareness education in afloat and ashore training 
to capitalize on the gains we have made and magnify the effect of our 
future efforts. Changing our culture to value energy as a strategic 
resource depends on every sailor's commitment to the accomplishment of 
the Secretary's goals.

Total Ownership Cost Optimization
    Building and sustaining a capable, yet affordable Fleet is one of 
the CNO's highest priorities. Optimizing the Fleet's total cost of 
ownership is a critical component of meeting that goal. The Navy 
defines total ownership cost as the total life cycle cost of a system 
from concept, research and development, production, and sustainment 
through disposal, including the total supporting infrastructure that 
plans, manages and executes that program over its life cycle.
    In execution, we seek to maximize performance and retain 
flexibility while controlling total ownership cost. However, we must 
also balance required performance with sufficient flexibility to 
adequately respond to changes in our battle space. We employ a broad 
spectrum of contracting tools and procedures to craft, award, and 
administer contractual vehicles to incentivize total ownership cost 
efficiencies. The following contracting tools are being used to control 
total ownership cost in the sustainment arena:

         Performance based logistics contracts for sustainment 
        logistics aligns contractor incentives with Navy performance 
        objectives. This optimizes system readiness while keeping cost 
        in check.
         Strategic sourcing and commonality approaches lead to 
        ``buying smarter'' (and more affordably) through consolidated 
        purchasing, reductions in technical specification variability, 
        and tailored performance work statements.

    One common characteristic of these contracting strategies is the 
long-term nature of their required funding. The Navy is focused on 
developing sustainment strategies early in order to identify the proper 
contract type, clearly define performance requirements, and develop a 
clear understanding between government and industry regarding required 
performance standards. These efforts ensure equitable risk and 
performance measures resulting in the right performance for the right 
price.

                               CONCLUSION

    Together with the U.S. Marine Corps and the broader joint force, 
our long-term allies, and newer partners, the Navy remains ready to 
defend our Nation, and the common interests of the community of 
nations, from those countries or other actors who would seek to harm 
us. In the fiscal year 2012 budget, we have balanced our resources to 
sustain Navy readiness today within acceptable risk in each of the core 
capabilities defined in our Maritime Strategy, while building the 
capacity to sustain the Navy of the future. We appreciate the 
committee's consideration of our budget request and thank you again for 
your support of the Navy's mission and particularly for your commitment 
to the welfare of our sailors, their families, and our Navy civilians.

    Senator McCaskill. Thank you very much.
    I want to welcome the other members who are here today. I 
especially want to acknowledge that Senator Inhofe is here. As 
the former chair of this subcommittee, I appreciate your 
valuable contributions, because of the expertise that you've 
developed over the years in this area.
    Obviously, I'm glad to see both Senator Udall and Senator 
Shaheen.
    Let me start.
    First on the efficiencies program. I think it's great what 
Secretary Gates has done in terms of identifying $78 billion in 
the Pentagon and $100 billion across the branches. I am a 
little worried about some of the ways the money is going back 
in. Let me drill down on the Air Force. You're planning to 
spend more than half of your savings, from the efficiency 
effort, on operation and maintenance (O&M). You are a little 
bit different than the other branches in that regard--$2.2 
billion in fiscal year 2012 and $17.4 billion over the FYDP, 
all on O&M. Clearly, this was not in your budget, as you 
originally drew it up. I'm particularly curious about the $165 
million on something called ``administration,'' and $104 
million for something called ``other servicewide activities.'' 
Could you explain what that $269 million actually represents, 
in more specific detail than just those categories?
    General Reno. Chairman McCaskill, I don't have the detail 
on that line item, but I will be happy to provide it for the 
record.
    [The information referred to follows:]

    A portion of the Air Force efficiencies was aligned to support 
increased costs of day-to-day operations such as pay and allowances, 
fuel and weapon system requirements. The $269 million for 
administration and service wide activities covers civilian pay pricing 
impacted by updated workyear costs. The Air Force supported these types 
of increased costs through savings generated by efficiencies.

    General Reno. I would add though that in addition to the 
O&M requirements that we have, we have found significant 
savings and efficiencies in our weapon system support areas; in 
fiscal year 2012, $605 million, where we have streamlined the 
tasks and processes, we have reviewed requirements, and have 
made depot improvements. These would provide efficiencies that 
we can then put back into the Air Force to support operations.
    Senator McCaskill. I think the efficiencies effort is 
great. It's just the putting-back-in part that I'm a little 
worried about. If this is, in fact, O&M money that was not in 
your budget when you put it together last summer, and it's gone 
back in as O&M money, I want to make sure that the money that's 
coming back in from the efficiencies is actually going to a 
priority that can be clearly stated and not just into some grab 
bag category, like administration or other servicewide 
activities.
    The goal here is to spend less money. Obviously, the first 
goal is to have a military that is the best in the world, and 
ready and capable of doing whatever we've asked them to do, 
which, by the way, they have done, and you have done, in a 
spectacular fashion. But, we also want to save money. So, if 
this money is going back in, in a way that I don't think 
reflects what we're trying to get accomplished here, I think we 
need to identify it as quickly as possible, and save that 
money.
    Let me go to COR questions. GAO has reported that the units 
continue to deploy to Afghanistan without designating CORs, 
without designating them ahead of time, that the COR function 
is still often an additional duty for personnel with other 
responsibilities, and CORs often lack technical knowledge and 
training needed to oversee contracts.
    Now, it's frustrating to me, because, as a brand-spanking-
new Senator, I went to Iraq--right out of the auditor's 
office--and looked at the Logistics Civil Augmentation Program 
(LOGCAP) and looked at what was going on in Iraq. It was clear 
to me that the COR was just somebody who was just handed a 
clipboard. It was a low man on the totem pole. They were not 
performing oversight functions. They were filling a niche on a 
sheet, but they weren't getting trained. They didn't understand 
their oversight responsibilities. They weren't empowered to 
even do oversight within the units. So, it's really concerning 
to me that now, some years later, after we know the kind of 
money that walked out the door on contracting in Iraq--and 
while we still are struggling with problems with contracting 
dollars walking out the door and not being accountable for 
them, that we still are not designating these CORs, and not 
training them and not lifting up that particular expertise 
within the culture of the military. I'd like any of you to 
respond to that. What is your role in establishing 
qualifications for CORs and ensuring they're appropriately 
trained? If you could each briefly address that.
    General Stevenson. Yes, ma'am. We think we're improving. I 
don't know the date of the GAO report you're referring to, but 
we've taken a number of steps to improve how we're performing 
there.
    First of all, we have a number of places you can get the 
COR training from. We teach it internal to the Army. It's 
taught at the Defense Acquisition University. It's taught 
online. It is our requirement that we've issued to all the 
forces deploying, that they figure out how many CORs they'll 
require before they deploy, get them trained before they 
deploy, so that the COR can report to the contracting officer, 
satisfy the contracting officer that they do know--they have 
been trained, and obtain their certification there from the 
contracting officer.
    We have almost 1,000 trained CORs downrange now. We've 
taken--in a number of cases, we--there are certain specialties 
in the Army that tend to always end up being a contracting 
officer. I'll give you a couple of examples.
    Dining facility sergeants, the sergeants that run our 
dining facilities here in the States, often are the ones who 
are overseeing the contract for running dining facilities. So, 
we just have made that a part of their course. As they become a 
dining facility sergeant, they get a week's worth of COR 
training.
    We do the same thing with maintenance warrant officers, 
with supply warrant officers, and others, in an attempt to 
populate the Army with people who already have this training 
and don't have to go through some sort of special rigmarole to 
get downrange.
    I won't sit here and tell you we're perfect and that we're 
meeting our requirements exactly, but we're focused on it, and 
think we're improving.
    Senator McCaskill. Anyone else want to briefly address 
that?
    General Panter. Yes, ma'am. Chairman McCaskill, our problem 
is, of course, smaller in scale and in scope, because of our 
size. I do know that those contracting officers that we have 
embedded on those Marine Corps staffs are closely aligned with 
the commanding officers, and they get plenty of oversight from 
the commander; that is not lacking, there, at all.
    Our staff noncommissioned officers (NCOs) are, I think, 
appropriately trained. But, just to show you size and scope of 
our effort relating to contractors in theater, there's 477 
contractors that are actually deployed in direct support of the 
second MEF forces. Now, that doesn't count third-nation folks 
that are used to pick up trash and things like that. But I 
would make the point that the primary contracting officer is 
closely aligned with that commander, and therefore has to 
report. He gets oversight, on a daily basis, from either the 
commanding officer or XO. That's all I would say about it.
    Thank you.
    General Reno. Chairman McCaskill, the contracting business 
is out of my lane. But, I will tell you that the contracting 
officers and NCOs that we send downrange are fully trained and 
experienced. They are properly warranted, and they receive the 
oversight, in connection to the on-scene, on-ground commander, 
that they should receive.
    I would tell you, of six officer career fields that we have 
that are stressed, this is one of them. That's bad news, on the 
one hand. On the other hand, it shows you the level of 
experience that they have, as they go back again and again.
    Senator McCaskill. Thank you. Thank you.
    I will now turn questioning over to Senator Ayotte.
    Senator Ayotte. Thank you, Chairman McCaskill.
    I have an overall question for all of the witnesses. This 
really cuts to the heart of our responsibility, so if you need 
to take it for the record, I understand. Has any unit deployed 
overseas at a contingency location, particularly in 
Afghanistan, provided an urgent needs request for supplies or 
for an equipment item, in the past year, that has not been 
satisfied in a timely manner?
    General Stevenson. As you would imagine, we get quite a few 
operational needs statements from units. I think we do a pretty 
good job of satisfying them. But, they continue to come as new 
requirements develop.
    We focus on this every week. There's a meeting with the 
folks in Afghanistan, as well as Iraq, where they tell us what 
their top 10, top 20 priorities are. We work to satisfy them. 
But, I'm certain that we've not satisfied every wish list of 
every unit. I can assure you, though, that critical things they 
need for warfighting are being met and they're being filled.
    Senator Ayotte. That is one of the things that I want to 
make sure that we have a full understanding on in this 
committee. I have a whole series of follow-ups on it. But 
really, the bottom line is wanting to make sure that we're 
fulfilling all of our responsibilities when there is a request 
made for equipment that is needed for our troops. We have to 
have a strong understanding of how that's happening in theater, 
whether you're meeting their needs, and also, if there are 
concerns from that end.
    So, what I'd like to do is just give you all that question, 
in six parts. I would hope that you could all get back to this 
committee in detail on those so that we can be sure, if there 
are any areas we need to address right away, that we're 
fulfilling that function to make sure that we're helping you 
get our troops what they need. Given what we're asking from 
them at the moment, it is important.
    [The information supplied by the witnesses appears as an 
answer to Senator Ayotte's question for the record (see 
question 58).]
    General Reno. Ranking Member Ayotte, could I just give you 
one short example that gets at what I think you're talking 
about?
    Senator Ayotte. Yes.
    General Reno. It was last year when we saw the requirement 
came from Afghanistan, in particular--to field a uniform that 
would give better camouflage protection outside the wire, the 
terrain in Afghanistan being different than it is in Iraq and 
other places. Working with the Army and the Army Program 
Executive Officer (PEO) office, as lead, we've co-fielded the 
OEF camouflage-pattern uniform, and the Army has been putting 
their soldiers in it. We have been putting our airmen in it who 
are outside the wire. This gives increased camouflage 
protection. It is a lighter-weight uniform. It gives the airmen 
and the soldiers what they need. But, this is an example of the 
way that we rapidly respond to requirements that come from the 
theater.
    Senator Ayotte. Very good. I appreciate that. I will submit 
my question for the record, just because it's fairly detailed. 
I want to make sure that I have a full picture of what's 
happening in theater. I know that that is a top priority for 
all of you in making sure that our troops get what they need.
    I wanted to ask you about logistics support of operations 
in Afghanistan, so this is probably a appropriate question for 
General Stevenson or General Panter. Without the support of the 
logistics community, obviously, our men and women fighting on 
the front lines wouldn't be able to do what they're doing and 
have the successes that they have had. For years, the southern 
supply route into Afghanistan, through Pakistan, has been 
plagued by instability and repeated attacks. In fact, I just 
got a headline today of another one, unfortunately, on NATO 
troops. Also, pilferage, stealing supply of convoys, and I know 
that we've been able to add two additional supply routes 
through central Asia and the Baltics.
    Just for perspective, what percentage of our U.S. supplies 
are currently being trucked through Pakistan? Particularly, I 
think this is important to bring up, in light of the 
discussions we're having about our relationship with Pakistan 
at this time.
    General Stevenson. Yes, ma'am. Currently, it's about 40 
percent of the total supplies shipped into Afghanistan, on the 
surface, that don't fly in, come through Pakistan; the other 60 
percent, from the north. We're taking a number of steps to deal 
with potential problems there, and potential disruption of that 
supply line. As a matter of fact, ongoing today, there's a 
sitdown strike going on outside the port that our trucks are 
not able to get through. It's going to probably last a couple 
of days. Not uncommon; we've dealt with this before. But as you 
point out, this is problematic for us.
    The goal is to get to 75 percent from the north. We're not 
there yet. That was a goal established by the U.S. 
Transportation Command commander to his staff, and, working 
with us, we're trying to get there.
    We're sending nothing that is what we consider sensitive on 
the ground. No ammunition flows on the ground. No high-tech 
military gear--we even flew the mine resistant ambush protected 
all-terrain vehicles into theater, rather than send them and 
potentially subject them to pilferage.
    We have created what we call ``theater-provided 
equipment.'' It's a pool of equipment that just stays in 
Afghanistan so that as a unit rotates out each year, it doesn't 
have to drag out its equipment, and the new unit has to bring 
in its own. We just keep the equipment there. Now, as you would 
imagine, that creates a second problem that we have to deal 
with, which is, after about 2 or 3 years, that we have to do 
something significant to refurbish that equipment. We're doing 
that. But, the idea is, keep things off that ground lock.
    The last point I'll mention, that we're now experimenting 
with, is the notion of sending things, surface, to a friendly 
country. This is an open hearing, so I'd rather not get into 
the details--but, a friendly country in the Mideast, and then 
just flying over from there using C-17s. It takes advantage of 
the inexpensiveness of surface movement, but avoids that entire 
trip into Pakistan. We've just done that with two Brigade 
Combat Teams that have flown in and flowed out. We're happy 
with it. It's a bit more expensive, but, in the long run, we 
think--and we're doing a business case analysis--we think that 
it will be cheaper in the longrun, because we avoid all the 
pilferage and problems with that.
    Senator Ayotte. Just to be clear, as a follow-up, if all of 
those supply routes were to suddenly be shut down--Pakistan, 
Afghanistan--what type of long-term impact would that have on 
our mission?
    General Stevenson. I'll start out, and then ask the others 
to chime in.
    Initially, we'd probably last several weeks before we had 
any significant impact. We, just this year, upped the fuel 
stockage that we have on the ground, to 45 days of supply. So, 
we have 45 days of fuel on the ground to withstand these kinds 
of disruptions. We've increased the amount of materiel we fly. 
We'd increase our airdrop, which is already pretty high. We'd 
try to flow more in from the north than we are today. It is 
longer and more expensive, so there's some downside to using 
that route.
    I honestly believe we'd overcome it. I don't think it would 
stop our operations in Afghanistan, but it would certainly be a 
challenge.
    Senator Ayotte. My time is expired.
    I appreciate your answer on that. I'll look forward to 
asking you some additional questions in the next round. Thank 
you.
    Senator McCaskill. Senator Shaheen.
    Senator Shaheen. Thank you, Chairman McCaskill.
    General Reno, I just wanted to give you a postscript to 
your anecdote about the camouflage uniforms, because I was in a 
company in New Hampshire recently--Velcro USA. One of the 
things they described was that they are actually doing 
camouflage Velcro for those uniforms, because of the testing 
that shows that it makes a difference, if the Velcro is not 
also camouflaged, in terms of being able to be picked out when 
the soldiers are on the ground. So, thank you for that quick 
turnaround.
    General Reno. Thank you, Senator. It's the great support of 
the Army and PEO Soldier that made that possible.
    Senator Shaheen. Thank you.
    Admiral Burke, like Senator Ayotte, who represents the 
Portsmouth Naval Shipyard--I wanted to go back to your comments 
about making maintenance a bigger priority, and taking care of 
what we have. A GAO report came out in November cited several 
troubling examples of underfunding for maintenance at our 
shipyards. They gave several examples at the Portsmouth Naval 
Shipyard: plywood boards replacing broken windows, mold that 
had been painted over because leaks hadn't been fixed, those 
sorts of things. I wonder if you could talk about the effort to 
address the issues that have been raised in that GAO report. 
Specifically, as I understand, your written testimony states 
that, ``Continued high operational demand has led the Navy to 
take deliberate risk in shore readiness programs to resource 
warfighting needs.'' Can you elaborate on what some of those 
risks are? Is that what we're talking about--the kinds of 
underfunding for maintenance at our shipyards that have been 
affected? What do we need to do to address those challenges?
    Admiral Burke. Yes, ma'am. Specifically with shipyards, the 
requirement is that we put 6 percent funding back into 
shipyards for maintenance and upgrades, et cetera, based on a 
3-year running average of the volume of work that they've done. 
We look at it as a one-shipyard concept. So, we look at that 
across the board, if you will.
    In the case of that requirement, we've met that requirement 
every year since 2007. If you were to break it--and once again, 
I said we do this--we look at it as a one-shipyard concept--
but, if you break it down, and you look at it by individual 
yards, in the case of Portsmouth, we've met it--we've met that 
6-percent number every year since 2008.
    In the fiscal year 2012 budget, there's 22 percent going to 
Portsmouth. So, we're well above that 6 percent requirement. We 
average nearly 10 percent across all shipyards in 2012. We meet 
that with military construction (MILCON) restoration and 
modernization funding, capital equipment expenditures, and 
minor property.
    So, pretty significant effort, in the last few years, to 
address that backlog, and specifically--and I'm--it's just--
we're not cooking the books, here, on Portsmouth Shipyard. It 
just works out that, this year, a number of projects made it to 
the top of the list on Portsmouth. I think you're going to be 
pretty pleased with what you see from your perspective.
    Senator Shaheen. Yes, well, so noted. We did notice that 
there's a bump in 2012. We appreciate that and think that it's 
critical, because of the backlog in maintenance that needs to 
be done there.
    Admiral Burke. But, if you'd allow me, I'll address your 
larger point, I think, of maintenance.
    Senator Shaheen. Please.
    Admiral Burke. As it was pointed out earlier by Chairman 
McCaskill, I think that it is a pay-me-now or pay-me-later. 
It's probably a pay-me-now or pay-me-more-later situation. So, 
it's just a case where we can afford to not change our oil 
today, because we won't have the engine seize up tomorrow. It 
will seize up at some point if we don't do the maintenance 
because we're trying to push more money into the operating 
forces. But, we must get back to addressing that at some point. 
So, I think that's the challenge we have.
    Certainly, in the shore is where we've taken most of the 
risk. We are not putting as much money in sustainment as we 
know we should be putting in, and I hope that that is a short-
term issue that we will address in the longer term.
    Senator Shaheen. Good. I would agree. I hope that's the 
case, as well.
    Several of you mentioned energy use as part of your 
remarks, and I wonder if you could speak to the kinds of 
efficiencies that you're looking at, in terms of energy use, 
and what coordination is going on between branches as you're 
looking at that energy use. General Stevenson, maybe you want 
to start off.
    General Stevenson. Yes, ma'am. In terms of the last part of 
your question, the coordination that's going on, we're very 
much watching what the Air Force is doing, with regard to 
aircraft energy, fuel, because we intend to use that same 
technology that comes from that work, in our helicopter fleet.
    We're doing a number of things across the board, both 
tactically and operationally--like in Afghanistan and Iraq--as 
well as back home, here in the States. We have an Army Energy 
Council that's personally led by the Secretary of the Army. 
It's important enough that he personally chairs it. That 
happens quarterly. I sit in on those with him. We have to 
report on various tasks that he's assigned to us. We have a 
number of net-zero installations that we are just now starting, 
with a goal that, by 2020, they'll be producing as much energy 
as they consume. By 2030, we hope to have that up to another 
couple of dozen energy installations. We have 126 renewable 
energy projects ongoing.
    Then, lastly, I'll just mention, because I know you're 
pressed for time. We're trying to reduce demand for energy. 
That is, as we buy new equipment--we have a procurement that's 
ongoing on the ground combat vehicle--we hope that one day 
we'll replace the HMMWV with a joint light tactical vehicle. 
Those new pieces of equipment will have significantly more 
stringent miles-per-gallon requirements than do their 
predecessors.
    Senator Shaheen. Thank you.
    My time is expired, Chairman McCaskill.
    Senator McCaskill. Thank you.
    Senator Inhofe.
    Senator Inhofe. Thank you, Chairman McCaskill. You pointed 
out, initially, that when the Republicans were a majority, I 
was the chairman of this subcommittee, and I've always 
considered this to be perhaps the most significant one, because 
the readiness is what it's all about.
    I see problems that I kind of put back in the perspective 
of the 1990s, when I did chair this. I see a lot of the 
problems that are much more serious than they were at that 
time.
    Now, I have to say this about these meetings. One of the 
reasons that I spend so much time actually in Iraq and 
Afghanistan and places like that is because--I don't mean this 
personally to you guys, but by the time we get some kind of 
testimony here, with all the media out there--you get kind of 
rosy in your interpretation as to what we have.
    Here's the problem with that: There are a lot of people 
that I serve with, in the U.S. Senate, who don't hold defending 
America as high a priority as I do. For those who are wanting 
to cut back on the military spending, all they do is point to 
testimony here--``Well, they don't have any problems at all. 
They said everything's fine now.'' I remember back when I was 
in the Army, we had 9 percent of the gross domestic product 
(GDP) spent on defending America, General Stevenson. Up until 
the last budget, I believe, before this current administration, 
it was 4.7 percent of the GDP.
    I remember when Rumsfeld came in for his first confirmation 
hearing, I told him that in my last year on the House Armed 
Services Committee, we had someone testify, at that time, that, 
in 10 years, we'd no longer need ground troops. Are you 
listening, General Panter? That's what they said. It was back 
in 1993, 1994. So, I said to Rumsfeld, ``You're going to have 
to make determinations as to what you're going to do today to 
be where we want to be 10 years from now. You're going to be 
surrounded by a lot of real smart generals, but they're going 
to be wrong, because there's no way in the world you can say 
what our needs are going to be.''
    Now, the question is this. It's not a question, really, but 
an observation. The American people assume our kids going into 
battle have the best of everything; and they don't. In order to 
get there, what would your recommendation be? Rumsfeld 
responded. He said, ``Well, for the last 100 years, our average 
percentage of GDP to defend America--average for 100 years--5.7 
percent.'' Now, it's down to 3.5 percent, with the goal of 
getting down to 3 percent. Now, I see that as a problem. This 
is a readiness hearing. When I think about the age of some of 
the stuff that we're dealing with right now--the Abrams, the 
Bradley fighting vehicles, the Paladin--I'm very thankful that 
the Paladin Integrated Management program is there, and we're 
now going to advance that. But really, the Paladin technology, 
that was World War II. We went through these things like we 
were supposed to have the upgraded capabilities, and those 
programs that we get a big investment going in it, and then we 
slow it down. So, we're dealing with a lot of old stuff. It has 
to take its toll.
    Let me throw in one other thing, too, and that's end 
strength. Right now, we're talking about cutting back--what? 
20--some 20,000 marines and 49,000 soldiers. We've been running 
a dwell-to-BOG ratio of 2 to 1--actually, 3 to 1, and we're not 
even at 2 to 1 yet. We are in the Army, but not in the Marines.
    So, combine all those things. It has to, to me, translate 
into an increase in risk. You mentioned maintenance. Deferred 
maintenance is the first thing that goes--and you all know 
that--when you're strapped. When we go over there and say, ``We 
need more body armor and these things,'' we come back and we 
get that. Then what suffers? It's maintenance, deferred 
maintenance, and you said it very well, Admiral Burke, you 
said, ``You pay now or you pay a lot more later.''
    So, in light of that, do any of you have any comments to 
make, in terms of how this affects risk, in terms of readiness?
    General Panter. Sir, if I may start off with----
    Senator Inhofe. Yes. Are the marines still using the 
retreads?
    General Panter. Not so much anymore, sir. Over the last few 
years, we've gotten better.
    We do have some challenges, and I will not paint a rosy 
picture. We have identified the fact that, when the time comes, 
we'll need the support of Congress to reset our equipment sets. 
That's a requirement to the tune of about $5 billion, as 
Chairman McCaskill alluded to earlier.
    We have a reconstitution piece, as well. We have learned 
that our legacy TEs, in both Iraq and Afghanistan, are not 
satisfactory. For example, a infantry company today has the 
same command-and-control capability that a infantry battalion 
had in the early 1990s. Our radio assets that are in our units, 
the requirements for those have increased, as well as ground 
tactical equipment. We need to--after this thing is over--after 
Afghanistan, we need to address those issues. That's part of 
the $5 billion in reconstitution that I mentioned earlier.
    Now, trying to keep our heads above water, because, 
Senator, about 50 percent of the equipment that we currently 
have in Afghanistan came right out of Iraq, when we drew down 
in Iraq and we shipped----
    Senator Inhofe. Exactly. Yes.
    General Panter.--that equipment over, that added to the 
stress of that equipment.
    Senator Inhofe. To the personnel.
    General Panter. To the personnel, most definitely.
    What we could, we did bring back to our depots to reset 
that OIF equipment. That continues, and that should be 
completed later this year.
    We do have continuing deliveries of equipment that were 
part of previous-year contracts. Those deliveries continue on, 
which gives us some degree of relief.
    We're attempting to repair forward and refresh that 
equipment as best as we can. In fact, I'm asking Army Materiel 
Command to help us out in that endeavor, and to mature their 
capability within Afghanistan so we can hit the refresh button 
on that equipment.
    For the Marine Corps, we have a equipment rotation plan 
that we----
    Senator Inhofe. Yes. I'm really trying to get to how all 
this affects risk. We know what risk is.
    General Panter. Sure.
    Senator Inhofe. You know what the risk is. In terms of end 
strength, in terms of the age of the equipment, in terms of 
everything we've been talking about here, which is the 
percentage of the GDP that is going to--do you have any comment 
to make about how that affects readiness?
    General Panter. Yes, sir.
    Senator Inhofe. Is there a price? There's a price we have 
to pay for all that stuff.
    General Panter. Exactly. If we don't get help from Congress 
to reset our equipment when we pull out of Afghanistan, we are 
at risk to respond to contingencies.
    Senator Inhofe. That's good. That's good.
    Any very brief comment about that, General Stevenson?
    General Stevenson. Sir, I agree. As you noted in my earlier 
statement, that I think that we are in better shape today than 
we've been in a long time. I honestly believe that. It's not 
all rosy. We have issues. But, we've been very well funded. 
We've gotten--our reset--every dollar we've asked for, in 
reset, we've gotten.
    Senator Inhofe. Okay.
    General Stevenson. It's reset that's eliminating a lot of 
that risk.
    Senator Inhofe. Chairman McCaskill, if I might, I'd like to 
ask one last question to General Reno.
    Yes, I don't agree with that, but I do feel that, when 
you're looking at the deferred maintenance--there's another 
area, also, that goes, and that is in spare parts. I have to 
say this, Chairman McCaskill, about General Reno. He possesses 
a character that is very rare in his side of the table and our 
side of the table, both. It's called humility. He was the 
commander there at Tinker Air Force Base, and, I think, 
probably one of the best--the best commander we've ever had 
there.
    General Reno. Thank you, Senator.
    Senator Inhofe. But, let me just say this about General 
Reno, because I think it's very important. When you are backed 
up on spare parts--and we're talking about the KC-135s, all the 
stuff that's going through there--you--I understand up to 4,000 
spare parts are always identified as being critical and on 
backorder. Then I have a statement, that's too long for me to 
read right now, but it comes from Tinker Air Force Base and 
addresses your choices. When you run out of a part and you have 
it on jacks, you have a choice of either dropping it down, 
taking 5 or 6 days out of the work week and--or cannibalizing 
it and hoping that it gets there in time. Could you just make 
one comment about the critical nature of our spare parts 
inventory? I think whatever you say about that particular 
operation is true in the rest of the operations, also.
    General Reno. Thank you, Senator. The choices available 
when a part is not available are not good. None of them are 
good. It's either inefficient or delayed or waiting. None of 
the choices are good if the part is not available. The parts 
have to be--you have to have the requirement right. That's a 
joint problem--a joint solution with the Defense Logistics 
Agency (DLA) and the Air Force. We have to get the procurement 
right. That is, shortening the timeline on the acquisition lead 
time and the production lead time. We have to get the delivery 
right so that there's perfect order fulfillment and so that the 
customer wait time is absolutely minimized. But, whether at an 
ALC, a depot, or in the field, if the part's not available, 
there are no good choices.
    Senator Inhofe. Chairman McCaskill, the other question I'm 
going to ask him will be for the record, but it will address 
the somewhat arbitrary 50/50. I'll ask a specific question 
about that on your ALC, as well as the rest of them.
    Thank you, Chairman McCaskill.
    Senator McCaskill. Senator Chambliss.
    Senator Chambliss. Thanks, Chairman McCaskill.
    Following up on that, General Reno, what are we going to do 
about this parts issue? I had a visit with General McMahon, at 
Robins, just last week, and obviously this is one of the issues 
we continue to work. But, tell me what your thoughts are, where 
we're going, here. How are we going to improve this 
availability issue?
    General Reno. Thank you, Senator. General McMahon is doing 
a terrific job.
    Senator Chambliss. He is.
    General Reno. I would start by telling you that our Chief 
of Staff, General Schwartz, has had an eyeball-to-eyeball 
conversation with the director of DLA, so there is no ambiguity 
in where he stands and what we need as an Air Force.
    Second, the Air Force Materiel Command commander has met 
twice in the last year with the DLA director to not only lay 
out what our needs and requirements are, but to track the 
progress. I meet with the DLA director bimonthly, and members 
of his staff and mine get together even more often than that. 
It's getting the right requirement. It's getting the right 
procurement. It's getting the right delivery and continuing in 
the proper engagement, and holding them accountable.
    Senator, I would tell you, the DLA has a long record, 
almost 50 years, of excellence in wholesale supply. As a result 
of the the Base Realignment and Closure (BRAC) 2005, they are 
now in the retail supply business. It's different. They are 
adjusting to it, and we are holding them accountable.
    It's not all bleak. The C-5, for example, which you are 
very familiar with, enjoys the best support it's had in years. 
It has the highest mission-capable rate that it's had in 7 
years. It has the highest aircraft availability rate it's had 
in 6 years. It has the lowest--not-commissioned--not-capable-
for-supply--not-mission-capable-for-supply parts--the lowest 
rate in 20 years. So, there are some good things that are 
happening, but as DLA gets into the retail supply, we 
absolutely have to have what we have signed them up to do.
    Senator Chambliss. The delays in delivery are concerning to 
all of us. It's happening at all three of our ALCs, and it 
looks like this is the big issue. Of course, we made the 
change, a couple of years ago, to try to improve efficiency and 
save money. All that's well and good. But, if it's not going to 
work, then we have to figure out what direction we need to go 
in. But, I appreciate your commitment to it, and General 
Schwartz's commitment, to making sure we get this issue solved.
    General Panter, you note, in your written statement, that 
the Marine Corps equipment, both at home and abroad, has been 
heavily taxed in a nearly decade of constant combat operations. 
You also note that the requirement to fully resource deployed 
forces has resulted in a redistribution of assets from 
nondeployed forces and strategic programs to meet these 
requirements. None of this is surprising, obviously, given the 
OPTEMPO of the last decade. The Marines have done a tremendous 
job, both with your combat units and your reset effort. Your 
contributions will be critical to our success. However, the 
situation you lay out, with respect to availability of 
equipment and supply rating of units at home, is somewhat 
troubling.
    Specifically regarding reset, as you just alluded to a 
minute ago, you note that reset requirements increased as a 
direct result of the shift of equipment from Iraq to support 
the surge forces in Afghanistan. This is also understandable.
    Regarding how you will address your reset shortfall, you 
mentioned several actions, including, and I quote, 
``aggressively repairing equipment at our depots and 
distributing to fill shortfalls for established priorities.'' 
What do you mean by that last phrase of ``distributing to fill 
shortfalls''? If that means outsourcing work, where's it going 
to go?
    General Panter. Sir, relating to fulfilling established 
shortfalls, by direction of our Commandant, we have a priority 
list that we fill. It's a listing of units that are racked and 
stacked according to what the priority or the needs are.
    For example, anything forward in Afghanistan--of course, 
they're top-tier folks, they get what they need. Their 
readiness ratings hover at 92, 93 percent, as you know.
    Next thing that would come up in the priority stacking or 
rating would be units that are preparing to deploy the theater. 
We attempt to ensure that those units, as mentioned earlier, 
don't see this equipment for the first time as they train to go 
forward. So, those readiness--readiness rating of the units 
that are on deck, ready to deploy, is fairly high.
    The outsourcing piece that you mention, it is--we're not 
there, on outsourcing. Right now, we're not leveraging 
outsourcing to fulfill the needs that we have.
    Is that the basis of your question, Senator, or did I miss 
the mark here?
    Senator Chambliss. Let me just continue on a little bit. 
So, is it my understanding you're not looking at outsourcing 
now.
    General Panter. Yes, sir. The capacity at our depots right 
now--we can meet our requirement, as we know it. Now, when the 
day comes--and I'll use the analogy ``the pig and snake''--when 
we come out of Afghanistan, that is a consideration; and to 
leverage other Services' depots, as well. It may well be, if we 
have the resources to get this equipment reset as quickly as 
possible, we might have to consider outsourcing.
    Senator Chambliss. If I understand what you're saying, 
you're not at that point now. Based upon the priorities that 
you just alluded to, both the depots are doing the work that 
needs to be done right now. That appears to be the case for the 
immediate future.
    General Panter. Yes, sir, that's correct. Both depots are 
roughly on a shift, shift-and-a-half workload.
    Senator Chambliss. Yes, okay.
    General Reno, I want to discuss one other issue with you. I 
mentioned the Occupational Safety and Health Administration 
(OSHA) issues to Mr. Yonkers, but, there again, it seems like 
OSHA may be holding our depots to arbitrary standards, and to 
standards that really have no relevancy. We have real issues 
with OSHA that General McMahon is working through, and looks 
like we're on track to get those resolved. But, if we're not 
careful, this is going to absolutely hamstring our ability to 
carry out our mission.
    What's your perspective on OSHA's role? How can we ensure 
that the depots are not subjected to arbitrary regulations that 
do not affect the safety and health of the workforce?
    General Reno. Senator, we absolutely care about the safety 
and welfare of our workforce. That is paramount. We do not push 
back on that at all. There were 36 findings that OSHA gave us 
under General McMahon's leadership. Thirty-three of those have 
already been responded to. Another will be responded to in 
June; the final two, in October. So, he has moved out smartly 
on those.
    As far as the grasp or the extent of OSHA's involvement in 
what we do, compared to what they do with others, I would tell 
you that the Assistant Secretary of the Air Force, Mr. Yonkers, 
is personally engaged and involved in this. This is something 
that we are involved in and we are pursuing. But, we want to 
first make sure that our people are being taken care of. We 
don't push back on that at all, sir.
    Senator Chambliss. Yes. Obviously, that is a priority, and 
the Air Force has always done a good job with that. We've never 
had a significant issue with OSHA before. That's why it's 
puzzling to me as to why we're encountering these somewhat 
major issues right now. Frankly, they appear to be inhibitors 
to getting the job done, and not for the right reasons. It's 
not safety and health of the employees that is the issue with 
these OSHA issues. So, we look forward to continuing the 
dialogue with you and Mr. Yonkers, with respect to that.
    General Reno. Thank you, Senator.
    Senator McCaskill. Thank you, Senator Chambliss.
    I talked about--in the opening statement, about this 
committee, last year, adding money on maintenance and reset. I 
can look at the Air Force as an example. You report that, for 
fiscal year 2012, your budget will only cover 84 percent of the 
needed aircraft repairs. Last year's provided only 83 percent 
of the needed aircraft repair money.
    It appears to the committee that you are underfunding reset 
and maintenance, and I'm trying to figure out why. Is it 
because you can't absorb any more of the funding, in terms of 
what your capabilities are?
    General Stevenson. Ma'am, you're looking at me, so I'll----
    Senator McCaskill. Any of you--whenever I ask one of these 
open-ended questions, everybody looks down like I'm about to 
pass the plate in church. [Laughter.]
    General Stevenson. I'll take the first shot. We're not 
underfunding reset and maintenance. We have the reset money we 
require, and we're thankful for it. You'll note our reset 
request this year in 2012 is lower than it's been in previous 
years. It's a function of not having our large mechanized 
forces deployed in Iraq. It's a function of leaving that 
equipment that's in Afghanistan there for longer than just a 
year's rotation.
    When we finally bring it all out of Iraq, by the end of 
this year, and in Afghanistan, whenever--we're looking at about 
a 20 to 25 billion liability, in terms of reset. We're hopeful 
that you'll continue to provide the reset dollars that we need 
for it. Up to now, it's been great.
    Senator McCaskill. Okay.
    General Stevenson. We've--and we don't have capacity 
issues.
    Senator McCaskill. Marines?
    General Panter. Yes, ma'am, very similar to the United 
States Army. Now, we have had a challenge this--Chairman 
McCaskill, about moving the OCO into base; and we've gotten 
better at that. For example, in fiscal year 2010, it was right 
at $92 million, and in 2012, we have $207 million in the base. 
That's a constant challenge, though.
    Relating to what General Stevenson said, though, we're 
doing okay now, but it's yet to come. That's our concern, when 
we do start to withdraw.
    Senator McCaskill. Because your reset is 10 billion, right?
    General Panter. Pardon, ma'am?
    Senator McCaskill. You've acknowledged $5 billion at the 
end of combat, an additional $5 billion to reconstitute the 
force.
    General Panter. That's correct. Now, in 2011, we asked for 
$3.1 billion; we got $2.9 billion. In 2012, we're asking for 
$2.5 billion plus the liability of $5 billion when we draw 
down.
    Senator McCaskill. Okay.
    General Reno. Chairman McCaskill, the reset is different 
for the Air Force than it is for the ground forces. Our 
recurring maintenance is done at our ALCs, and we bring all 
that aircraft back for that depot-level maintenance. With the 
OCO request for $2.9 billion, $2.2 billion of which is weapon 
system sustainment, we are funded at 80 percent. With the 
efficiencies that we've gained, in fiscal year 2012, of $605 
million, it takes us above 84 percent. It's going to be closer 
to 85 percent, though that number is a moving target, as we get 
closer to fiscal year 2012. But, that level of funding, ma'am, 
will preserve the combatant commander support and will give us 
balanced legacy and new system support. We do not have capacity 
issues.
    Senator McCaskill. Okay.
    Vice Admiral Burke?
    Admiral Burke. Yes, ma'am. We also are a little different 
from the ground forces, because of our capital ships. In ship 
maintenance, we count on about $1 billion of supplemental 
funding. Some portion of ship maintenance can be attributed to 
today's ops, so we think that's--or, today's higher ops, so we 
think that's reasonable; the same sort of approach for 
aviation. So, we are reliant on supplemental funding to address 
some of those basic requirements.
    Senator McCaskill. Okay.
    General Stevenson, I would love to know what our LOGCAP 
costs are, compared to Iraq. Now, I know that it's hard to do 
apples to apples, because it's a completely different 
environment with a lot of different supply challenges that we 
have in Afghanistan that were not as--such a heavy lift--pardon 
the expression--in Iraq. But, as you look at per-soldier, in 
terms of logistical support, when you're looking at food and 
laundry and all of the things that we're using LOGCAP for, it 
was--I will use an unladylike term--but, it was the Wild West, 
in terms of LOGCAP, in Iraq, for many years, in terms of the 
money that was being spent and the lack of accountability. I'd 
be curious if anybody has done an analysis what our per-soldier 
cost is, in terms of logistics under LOGCAP IV, as compared to 
III, II, and I. Because I think that might tell us if, in fact, 
we are distributing lessons learned. I'm sure that you don't 
have that off the top of your head. If you do, I'll dance a 
jig. But, I'm happy to take that for the record. But I'd love 
to see that comparison.
    General Stevenson. Yes, ma'am, you're right, I'm going to 
have to take it for the record. It is less than in Iraq. But, I 
don't have the specifics. I'll provide that to you.
    [The information referred to follows:]

    The Logistics Civil Augmentation Program (LOGCAP) IV acquisition 
strategy was developed specifically to implement lessons learned under 
LOGCAP III. Most notably, with the award of the LOGCAP IV contracts, 
the program realized the establishment of a competitive base of LOGCAP 
contractors, an improved two-tiered award fee structure, and 
standardized performance work statements. Further refinements designed 
to increase responsiveness to warfighter requirements, preserve the 
benefits of competitively established pricing, promote effective cost 
control, and minimize administrative burden were incorporated into the 
LOGCAP IV Afghanistan task orders. These refinements are providing 
material improvements to the way we contract for LOGCAP services, and 
we continue to collect and evaluate lessons learned as we strive to 
achieve continuous improvement on the program.
    As Senator McCaskill noted, comparing costs between LOGCAP III and 
LOGCAP IV presents significant challenges. To do so would require a 
comprehensive analysis. Major obstacles derive both from substantially 
differing and extraordinarily fluid operational conditions and 
requirements, and fundamental structural differences between the LOGCAP 
III and LOGCAP IV contracts.
    A reliable baseline from which to compare the Iraq LOGCAP III and 
Afghanistan LOGCAP IV contracts is not readily available. We can state 
at a high level that the Iraq and Afghanistan task orders are being 
executed to different requirements, and under substantially different 
operating conditions. We would have to perform a rigorous analysis to 
identify the specific differences and the comparability of the two sets 
of costs. To answer your question, we would have to consider the 
possibility of comparing the LOGCAP III and LOGCAP IV task orders in 
Afghanistan. Our objective in this regard was to attempt to limit, the 
variability of the conditions under which the contracts were performed.
    I can discuss some of the most easily identified obstacles we 
encountered in our efforts to compare costs under LOGCAP III and LOGCAP 
IV task orders in Afghanistan.
    Troop Uplift: Rapid growth in Afghanistan LOGCAP IV operations 
started in late September 2008 to support troop uplift in the south 
area of responsibility. An increase in troop strength, accompanied by 
extreme fluidity in requirements led to rapid growth in Afghanistan 
LOGCAP IV operations. The troop uplift contributed to an increase in 
contractor commercial procurements due to shortfalls in the Federal 
Supply System (schedule and availability). Additional equipment leasing 
was required to make up for government furnished equipment from Iraq 
that did not materialize.
    Unavailable MILAIR: LOGCAP III utilized 100 percent MILAIR for all 
intra-theater travel. National Command Element (NCE)/Combined Joint 
Task Force (CJTF) 101 required that LOGCAP IV contractors provide their 
own air assets within theater.
    ``Ring Route'' Services: LOGCAP III had 33 Forward Operating Bases 
(FOBs) that were serviced by ring route where the LOGCAP III contractor 
did not have an enduring presence; support was provided by a team 
traveling from FOB to FOB. For LOGCAP IV, the NCE (CJTF 101) required 
that that FOBs be fully supported by site.
    Performance Work Statement (PWS): Differences between the LOGCAP 
III and LOGCAP IV performance work statements exist both in structure 
and requirements. Also each Contractor's unique approach to performance 
of the individual PWS requirements and each contractor's internal 
accounting policies present inherent cost variations at the PWS level.
    Levels of Service/Maintenance: The majority of facilities on LOGCAP 
III supported bases had minimal Operations and Maintenance (O&M) and a 
large percentage of facilities were not on routine maintenance by 
LOGCAP. Additionally, the LOGCAP IV contractor was required to provide 
O&M services to facilities that had received minor to no maintenance 
under LOGCAP III.
    These obstacles are the most easily identified, but are by no means 
a comprehensive listing of the variations that would have to be taken 
into account when attempting to compare costs between the LOGCAP III 
and LOGCAP IV task orders in Afghanistan. A full business case analysis 
would be necessary to derive any reliable conclusions from a broad 
based comparison of LOGCAP cost per soldier. Given the continuing pace 
of change in LOGCAP requirements, it is highly unlikely that a stable 
baseline suitable for such a comparison will exist in the foreseeable 
future.
    The most reliable estimate of the difference in costs between 
LOGCAP III and LOGCAP IV at this time is the 9 percent savings figure 
developed by the U.S. Army Central (ARCENT) J8 and validated by the 
Army Cost and Economic Analysis Center for use in the Iraq Base Life 
Support (BLS) business case analysis. In support of the business case 
analysis for Iraq BLS, the ARCENT J8 developed an estimated LOGCAP III 
to IV savings figure based on a comparison of incurred costs under 
LOGCAP III with a composite of the proposed prices for selected similar 
services under LOGCAP IV. The best data available at the time was the 
O&M costs from six LOGCAP III task order cost reports in Afghanistan. 
The cost reports from the six task orders were compared to the average 
Fluor and DynCorp band pricing from LOGCAP IV awards. The supported 
populations under LOGCAP III per task order were compared to similar 
band sizes under LOGCAP IV. The comparison did not include any 
construction or engineering activities as those costs were unknown at 
the time. The estimate did not include any contractor unique costs such 
as Overhead, General and Administrative, or Fees. The 9 percent savings 
figure was validated by the Army Cost and Economic Analysis Center. In 
our opinion, this remains the most reliable estimate of the difference 
in costs between LOGCAP III and LOGCAP IV.
    Notwithstanding the challenges associated with developing a 
reliable comparison of costs between LOGCAP III and LOGCAP IV, as we 
noted in our 10 December 2009 response to the inquiry regarding 
concerns about the LOGCAP IV task order strategy for Afghanistan, the 
following mechanisms were built into the Afghanistan task orders.
    Service Price Matrix: Included in both LOGCAP Afghanistan task 
orders are service price matrices that can be independently executed 
over the life of the task orders. The competitive pricing established 
at time of award sets the budget from which the contractor manages its 
costs. The budgets also set the cost base from which fees are 
calculated. While under a cost reimbursement contract the contractor 
will be reimbursed for its allowable costs determined reasonable and 
allocable to the task order. The budgets are only adjusted in the event 
of a recognized change in accordance with a unique change management 
clause I will discuss later on.
    Keeping the fee base under control is a crucial element in 
controlling overall costs under a cost type contract. The establishment 
of the competitively based price matrix in tandem with a disciplined 
approach used to manage changes has provided a substantial incentive 
for the contractor to control costs. Under a cost type contract, the 
contractor does not earn more profit simply for spending more money; it 
is only when the fee base is expanded that the contractor increases its 
returns. As experienced under the LOGCAP IV task orders, the fee base 
has only been adjusted under circumstances dictated in the change 
management clause of the contract. Indeed, the task order in the north 
has stopped earning base fee due to an apparent cost overrun status. By 
keeping the fee base under control the contractor is incentivized to 
minimize the incurred cost to protect its profit margin. This effect is 
accentuated by the fact that the Federal Acquisition Regulation 
precludes contractors from recovering interest expenses.
    Change Management Clause: Second in the task order control 
mechanism has been a structured approach to change management. The 
Afghanistan task orders contain a clause that clearly establishes what 
constitutes a change or modification requiring an equitable adjustment 
under the contract. The foundation of the clause is a population based 
mechanism for acknowledging a change has occurred. To date, the Army 
has recognized and is in the process of negotiating an equitable 
adjustment due to the uplift of forces experienced after the award of 
the task orders. The population trigger works both ways; when the 
drawdown occurs negotiations will commence to adjust the fee base 
downward.
    Award Fee Criteria: The third element is the award fee structure. 
Cost/Schedule Management and Cost Control are separate and unique 
factors under the award fee clause making up 40 percent of the 
contractors score. This provides further incentive for the contractor 
to engage in prudent operations under the task order. Biweekly cost 
reports are submitted to the government with a required analysis by the 
contractor explaining substantial variances. The contracting officer 
systematically tracks incurred costs against the service price matrix 
budgets. Performance against the award fee criteria is briefed to the 
Award Fee Evaluation Board. Poor performance and inadequacies in 
business systems results in reduced award fee determinations. To date, 
two Award Fee Boards have been held for each of the task orders.
    Incurred Cost Audits: Under a cost reimbursable contract the 
contract awarded value does not establish the cost of the task order. 
The actual determination of the allowable costs incurred under the task 
order is not until contract closeout after a formal DCAA audit of the 
direct costs and indirect costs and the negotiation/settlement of the 
final costs. Therefore, the government gets multiple ``bites of the 
apple'' on cost type task order awards based on conducting audits 
during contract performance and monitoring of cost control activities. 
Presently, the LOGCAP definitization team is working closely with DCAA 
Auditors in negotiating adjustments to the LOGCAP task orders.

    Senator McCaskill. If there is an analysis that has been 
done about why it is less--I'm looking for: Is it the 
competitive process that has helped? Is it more contract 
oversight? I'm looking for some good news, here, where I can 
feel good that we are at least headed the right direction, in 
terms of logistical contracts and the huge burden they've been, 
in terms of these contingencies.
    Let me ask about the LMI depots study. It came out in 
February, and I am curious if any of you have any take on those 
recommendations and findings that you would like to put on the 
record at this time.
    General Reno. Chairman McCaskill, I have read the report. 
While I agree with many of the recommendations that LMI makes, 
we have not had opportunity to fully vet that with DOD, and 
intend to.
    The one that I would differ with is their recommendation 
for combining the statute with regard to 50/50 and Core. I 
don't think that's advisable. I think we gain flexibility by 
keeping those separate, as they are now. I would provide other 
comments after we have a chance to review that with the other 
Services and OSD.
    [Additional information referred to follows:]

    The one recommendation that I differ with is combining the 50/50 
and Core statutes. I don't think that is advisable because we gain 
flexibility by keeping the statutes separate, as they currently are 
right now. As stated earlier, we have not been able to fully vet the 
Air Force's viewpoints on LMI's recommendations with the Office of the 
Secretary of Defense (OSD) and the other Services. A cross-service team 
will soon be formed through the OSD Maintenance Executive Steering 
Committee to review the report and make recommendations on any 
statutory, policy, and organizational structure changes.

    Senator McCaskill. Okay. Anyone else on LMI?
    General Panter. Yes, ma'am. There are some things we agree 
with and some things we don't agree. We agree with 
strengthening the Core determination process; there's goodness 
in that. The recommendation that sustainment policies must be 
closely linked to depot maintenance activities--agree with 
that. We agree with some of the conclusions about why the depot 
workload has decreased--newer equipment, rapidly fielding UUNS, 
and things like that.
    Things we don't agree with, much like my friend Loren 
mentioned, is the consolidation aspect. We think that distracts 
from our flexibility. There are secondary issues involved with 
that, such as the Services' relationship with the local 
community. That was a major, I think, disagreement with the 
study.
    Thank you.
    General Stevenson. Pretty much ditto. We generally agree 
with the findings. There are a couple of findings in there, we 
don't care for. One is the notion of improving our reporting, 
because we think we report pretty well right now. The other is 
the independent commission that they suggested be set up. We 
don't think that's necessary.
    But, what we find is that many of the things that are in 
that report are things we already have done or are doing. So, 
we agree.
    Senator McCaskill. Okay. My time is up. I will probably 
take one more round, after Senator Ayotte.
    Senator Ayotte. Thank you, Chairman McCaskill.
    Admiral Burke, I just wanted to follow up on Senator 
Shaheen's question with regard to the shipyards, and, in 
particular, Portsmouth Naval Shipyard. Admiral Roughead 
testified before the Armed Services Committee earlier this year 
about consolidation of a maintenance workshops project that has 
been proposed at the shipyard. I had a chance to go to the 
shipyard and really look at what this would do, in terms of 
efficiency and reduce cost at the shipyard. One of the things 
that Admiral Roughead said, that if we moved the consolidation 
project up two phases right now, consolidate them into one--the 
P266 into one--then--and put them in 2012--we would save $8 
million by doing that. I think that demonstrates two things. 
Number one, often, when we put maintenance off, it ends up 
costing us more in the long run, instead of looking at the big 
picture and making the decisions upfront. Then, I wanted to ask 
you, in particular, about--right now, you've--the Navy has 
proposed that this project occur, again, in a phased approach 
in 2015, even though we would save $8 million by consolidating 
it and doing it sooner, in 2012. So, could you tell me what the 
thought process was there, in putting it in 2015, and why we 
wouldn't be better off moving it into 2012 to save that $8 
million that the Admiral has identified?
    Admiral Burke. Yes, ma'am. First, I've gone back and looked 
at the project. We don't think we'd save $8 million. We think 
we'd save $3 million. So, an update on the numbers.
    Senator Ayotte. So the number that was given to us 
previously isn't the number that----
    Admiral Burke. I think we've gone back and looked at it, 
and we see that if you did phase 1 alone, it would be almost 
$12 million; phase 2 alone would be a little over $8 million. 
That's a total of $20.5 million. If you did both phases 
together, it'd be $17.2 million. So that's a savings of $3.3 
million if they were done concurrently.
    Now, that has nothing to do with whether you move it up or 
not. So, maybe I'm missing the point of your question.
    Senator Ayotte. As I understand it, the way it's currently 
proposed, it's a phased approach. Is that right?
    Admiral Burke. It is. It's in 2015 and 2016, I believe, 
so----
    Senator Ayotte. Right. So, we're not, number one--actually, 
one of the reasons why we would want to move it up is because 
the sooner we get the efficiencies gained from actually 
consolidating the workshops--probably--I haven't--having been 
there--is that we will be able to more efficiently perform 
maintenance. That, in turn, will have cost savings, in terms of 
how we maintain the submarines. So, obviously, that number's 
not included in the $3.3 million.
    Admiral Burke. That's right.
    Senator Ayotte. So, that would be one of the reasons I 
could see of moving it up. But, just wanted to understand why, 
even though you know you could save money, you would still 
phase it in, rather than just doing it together.
    Admiral Burke. I think we'll look at the opportunity to put 
them together. When I've asked the question about, ``Could they 
be done concurrently?'' the answer that I've gotten is yes. So, 
it would seem to me that they ought to be done together. I 
would agree with you.
    Senator Ayotte. I would like to, obviously, hear further 
about what the reasoning was for moving it to 2015, as opposed 
to doing it sooner. So, if you want to get back to me on that, 
I'd appreciate it--or, unless you know now.
    Admiral Burke. Well, I'll be happy to get back to you on 
it.
    [The information referred to follows:]

    The Navy assesses all military construction requirements as we 
balance risk across the Navy and provide the most capability within 
fiscal constraints. The Portsmouth Naval Shipyard Structural Shop 
Consolidation Project (P266), while executable in fiscal year 2012, is 
currently programmed in fiscal year 2015. The Navy will continue to 
assess the Portsmouth Naval Shipyard Structural Shop Consolidation 
Project as we target our shore infrastructure investments to deliver 
greatest impact on achieving our strategic and operational objectives.

    Admiral Burke. I assume it was just placing it amongst a 
bunch of other MILCON projects, as well. But, I'll get back to 
you with a good answer----
    Senator Ayotte. Thank you very much, Admiral.
    Admiral Burke.--one that you might like. [Laughter.]
    Senator Ayotte. An answer I like, that would be even 
better. I appreciate it.
    I wanted to ask, also, General Stevenson, about our Guard 
and Reserve, because, with the conflicts that we've been 
involved in, in Iraq and Afghanistan, they're an operational 
force now, as how we traditionally envisioned our Guard and 
Reserve. The most recent National Guard and Reserve equipment 
report identified nearly a--$4.1 billion in significant major 
item shortages that were identified just for the Army National 
Guard. Obviously, this could apply in other contexts, as well, 
in any other services.
    Can you tell me what you estimate the shortfall to be for 
the National Guard? Also, could you address for me--both what 
I'm seeing and what I have just heard from our Guard--is that 
often the Guard has outdated equipment, versus the Active 
Forces. Just one example, in New Hampshire, the Active 
component's fielding M-4 carbine with M-68 close-quarter 
optics, and the New Hampshire Guard is still using the M-16 
with the iron sights. So, could you address for me just what 
we're doing? We're asking so much more of them. We need to make 
sure that they have what they need--the readiness, and also, 
with the important missions that they carry for us on the 
homeland front, as well.
    General Stevenson. You're right, in years past, the Guard 
and the Army Reserve have suffered lesser-quality equipment--in 
some cases, shortages of equipment, outright--than the Active 
component has. Under the Army Force Generation Model, which we 
using today, as I'm sure you know, that will not work. The 
Reserve component has to be equipped as good as the Active 
component, and we're committed to that. Matter of fact, I just 
talked, yesterday, with General Carpenter, who's the acting 
director of the Army Guard, and--because I had noticed, in his 
testimony last month, that he was pretty pleased with the 
amount of equipment fills they're starting to see happening in 
the Guard. I asked him, ``Are you still comfortable that the 
equipment is flowing, your shortages are being addressed?'' He 
said, ``Absolutely. The equipment is coming in droves.'' In the 
TOE--the way we organize our units--a rifle company in the 
Guard has the same equipment as a rifle company in the active. 
So, if they're authorized M-4s in the active, they'll be 
authorized them in the Guard, and they should have them. If 
they don't have them today, it's probably a function of, ``We 
have those weapons being used downrange for other reasons.''
    We have a lot of equipment in use in Afghanistan that 
doesn't exactly match the way units are organized. I'll give 
you an example.
    Today, our aircraft crews, we equip with an M-9 pistol. The 
pilots--the crews in Afghanistan want to carry M-4s in addition 
to their pistol, because if their aircraft goes down, they want 
to be able to fight.
    Senator Ayotte. Absolutely.
    General Stevenson. Absolutely logical. We've given them the 
M-4s. But, to give them the M-4s, somebody else is short, back 
here in the continental United States. We'll get that fixed. 
But, it's just a short-term problem.
    Senator Ayotte. Does anyone else want to add on this issue?
    General Reno. Ranking Member Ayotte, the Air Force Air 
National Guard, about 102,00 strong, fly the same aircraft that 
we do Active Duty--fifth-generation fighter F-22, F-15, as 
you're very well aware, F-16s, tankers, airlift, C-17s. So, we 
use the same equipment.
    Senator Ayotte. I'm certainly familiar with that. What I've 
heard the feedback on is, there's much more at the ground troop 
level, of making sure that we're prepared, given what we're 
asking them to do.
    General Panter. Senator, if I just may add--now, the 
quantity of equipment is, of course, different, because we give 
our Reserves training sets to train on. But, there's not 
sufficient Active Duty Marines at that site location to 
maintain a full-up table of equipment. So, there is a 
difference in quantity.
    But, like General Stevenson mentioned, as these units get 
ready to deploy and they go through their predeployment 
training and all the workup packages, they get the same 
equipment as our Active-Duty Forces.
    Thank you.
    Senator Ayotte. Thank you very much.
    With the latitude of the Chairman, I have one other 
question. That is about the Maritime Prepositioning Force 
Program changes, and I would address that to General Panter and 
Admiral Burke. I had a chance to go over to the Pentagon, about 
a week ago, and receive a briefing on readiness from the Army 
and the Marines. One of the issues that I noticed was that the 
Navy plans to place 6 ships of the 3-squadron/16-ship total 
maritime prepositioning forces for the Marine Corps into 
reduced operating status, beginning in fiscal year 2013, and--
in the Mediterranean--and wanted to get two things. General 
Panter, one, you said, in your testimony, that that needs 
additional analysis. I'm concerned, given what we see happening 
right now in that area of the world, that that reduced 
operating status, which I understand was part of the efficiency 
initiative recommended--and probably was recommended before 
we--any of us could have predicted, maybe, some of the 
activities that are occurring in that area of the world--wanted 
to get, General Panter, what your view is on that.
    Then, Admiral Burke, yours as well, in understanding what 
went into that thinking of really reducing that prepositioning 
in the Mediterranean.
    General Panter. Would you like for me to start, ma'am?
    Senator Ayotte. Yes, General. Thank you.
    General Panter. Okay. Two or three points on this thing. 
Anytime that you don't have that Maritime Prepositioning 
Squadron (MPSRON), that maritime preposition, in our view, 
geographically located, which--and you were briefed on it--
that's the intent, up to--if they're not in the maintenance 
cycle, to have them forward-deployed. You quickly would have to 
question, ``Okay, if they're not in the geographical area, how 
much longer would it take to get them there?''
    Second point would be the opportunity to train with this 
particular MPSRON in the U.S. European Command (EUCOM) and U.S. 
Africa Command (AFRICOM) areas of responsibility. If you have 
them tied up to the pier, you might have a missed opportunity 
related to that.
    But, of all this, one of the major concerns we have is just 
assembling the ammunition requirements. That's a long process 
if that capability is not associated with the MPSRON. For 
example, it takes 18 million pounds--there's a 18-million-
pounds requirement for class 5 associated with these MPSRON. 
That equates to roughly 600 tractor trailers that come 
throughout the United States, continental United States, to put 
this package together. That takes time. That's roughly 35 to 42 
days to put that together, if you had to start from a cold 
start. So, to aggregate that capability with this MPSRON that's 
in reduced operating status is a concern for us.
    Senator Ayotte. What do you think is the impact on 
readiness in that area of the world?
    General Panter. Well, I--it, logically, would have to 
translate to, potentially, a slower response time in support of 
the COCOMs.
    Senator Ayotte. In AFRICOM?
    General Panter. In AFRICOM and EUCOM.
    Senator Ayotte. EUCOM.
    General Panter. And EUCOM.
    Senator Ayotte. We've seen quite a bit of activity in that 
area.
    General Panter. There has been.
    Senator Ayotte. Right.
    General Panter. Yes, ma'am.
    Senator Ayotte. So, Libya, Tunisia, other areas.
    General Panter. Exactly.
    Senator Ayotte. Thank you.
    General Panter. Yes, ma'am.
    Senator Ayotte. Admiral?
    Admiral Burke. I think I can see your chart there that you 
have--you recognize that there are two other MPSRONs that are 
active, one in the Western Pacific, one in U.S. Central 
Command. Then, we had--we have, today, the one in EUCOM that 
we're talking about.
    I think the calculus that went into this was that we are 
more likely to need those maritime prepositioning ships, which 
are used for a high-end engagement--they would--they are part 
of the Amphibious Assault Force in the two theaters that we 
plan to keep them in. These--we have not had a situation where 
we have needed all three of them, in some period of time, in--
and I hate to say it--forever--but, for about the 20 years that 
we looked at. However, they have been used frequently as single 
ships, or two ships, in humanitarian assistance operations. As 
a matter of fact, some of them were used in Haiti. Having them 
located on the East Coast in a reduced operating status, where 
they can get underway in 5 days, allows them to be able to 
respond to both the U.S. Southern Command; to some degree, 
EUCOM; and to the west coast of Africa, for humanitarian 
assistance operations.
    The ammunition issue that General Panter mentioned is a 
challenging one that we're working on. But, one of the options 
is to keep much of that ammo on a--afloat on a TAKE--part of 
the prepositioning ship squadron. As far as maintenance, we've 
paid for the additional maintenance to keep those ships ready 
even while they're in port.
    So, I think it comes down to a question of, what is the 
likelihood of using these craft? What is the consequence of not 
having them ready immediately? There are few situations that 
we've come to, in the last 20 years, where you would need them 
as immediately as one--or, as you would--or, more immediately 
than the ROS-5 status. So, we felt like it was a reasonable 
approach to put those ships into the ROS-5 and be able to do 
the job that we think we need to do, and that we can do, and 
save over $400 million a year.
    Senator Ayotte. Admiral, when was this decision made? Can 
you tell me? Just give me a sense of when this was proposed.
    Admiral Burke. We, in the Navy, teed it up in February of 
last year.
    Senator Ayotte. Right.
    Admiral Burke. Well before the efficiencies came out, and 
it was a decision made jointly by the Navy and the Marine 
Corps.
    Senator Ayotte. I think we could probably almost take up a 
whole hearing on this, so I'm going to defer to the chairman. 
I'm very concerned about this decision, and particularly in 
light of the activities that we see happening in that area. You 
have Libya, you have Tunisia, you have, obviously, the African 
nations there that--some of them are this hotbed of terrorist 
activity, in many instances. So, I'm concerned that this was a 
decision more focused on money. We all want to save money, but 
this is one where I would like to gather further information, 
and concerned about where it puts our strategic readiness in 
that area of the world.
    Thank you.
    Senator McCaskill. Thank you, Senator Ayotte.
    I think it's important that we get all the information, in 
terms of the decisionmaking process, in that regard. I do also 
know that, while we have had new activity that has popped up, 
in terms of the public knowing about hotbeds of terrorism in 
Africa, clearly, I think that you all were well aware of the 
significant stresses that we saw in Africa in those areas as 
these decisions were being made. I think we do need to drill 
down and make sure that the decision was not made prematurely, 
as it relates to what's going on in today's environment, and I 
think the line of questioning is appropriate. We need to get 
that information for the record and so that we can brief the 
full committee on it.
    I want to also kind of say ``me, too,'' on Senator Ayotte's 
questions on the reset funding for the Guard and Reserve 
compared to the Active Force. I also have concerns that we are 
paying attention to that because as she said, we have never, 
ever used our Guard and Reserve in the way that we have over 
the last decade. I know that many of them are gasping, in terms 
of their reset capabilities, and want to make sure that I said 
my ``me, too, ditto'' on the Guard and National Reserve.
    Let me ask about the Arsenal Support Program Initiative 
(ASPI). I'm concerned about this ASPI. It started out as a 
pilot program. It basically has been funded by earmarks, $80 
million worth of earmarks. The return on investment has been 
less than 2 percent. GAO has weighed in on this. The 
Congressional Research Service has weighed in on this. It 
appears to me that this program has given cheap rent to local 
development groups, and, in one instance, provided a hardware 
store at Rock Island. We're not going to do earmarks anymore, 
at least we're being told, I hope, that we're not doing 
earmarks anymore. I'm still a little cynical about different 
ways earmarks are being handled. I looked at the House markup, 
and I'm a little confused about all the amendments and the 
vague language associated with the amendments. Looks like, to 
me, that a duck is a duck is a duck. It looks like to me the 
House of Representatives is engaged in earmarking in the 
Defense authorization bill, and just trying to pretend like 
they're not, and it infuriates me.
    But, now that you know how I really feel about it, this 
ASPI thing looks like a place where we can cut back on money 
we're spending. It looks like to me that we need to put up a 
white flag on the ASPI, and say, ``This is not a good use of 
taxpayer dollars.'' But, I would love your input on that, 
General Stevenson.
    General Stevenson. Yes, ma'am. I'm familiar with the 
discomfort about the ASPI program. I've read the GAO report. It 
was an effort to try to reduce operating costs for our 
arsenals. Unlike the depots, which have a legislated Core 
requirement and a legislated 50/50 requirement, there is no 
legislation that covers our arsenals. I think we need some. 
Because, these arsenals are very critical to our ability to 
support our forces--particularly the Army, but others Services, 
as well--for their wartime needs. I mean, the only place in 
this country where you can build a main gun tube to a tank or a 
howitzer is at Watervliet Arsenal. So, we need them to be 
viable. Using this program which has allowed us to bring in 
outside entities onto the Arsenal, charge them rent and help 
reduce the overhead. Because, if they weren't there, the 
overhead costs would be spread on solely the work they are 
getting internal to the Army, which makes their rates very 
high; I mean, upwards of $300 an hour. So, when the program 
managers see that, they say, ``I'm not taking my work to the 
Arsenal. I can get it done cheaper from some outside agency.''
    So, it's a conundrum that we're in. We have to solve it. 
ASPI may not be the solution. But, we have to make our arsenals 
more competitive, if you will, so that they enjoy work in 
peacetime, so that they're--when we need them in wartime, 
they're ready.
    Senator McCaskill. I get it is a problem. We want to make 
them less expensive, because we have to hold on to them. Maybe, 
we need to reinvigorate what the ASPI program is. Maybe it 
hasn't been marketed appropriately. But, it looks like to me 
we've spent a lot of money and haven't gotten much return on 
that. Although I guess the argument can be made that 2 
percent's better than nothing. But, it is only 2 percent. So, 
in your organization, you can task people to come up with ideas 
that could lessen the load for the arsenals in a way that might 
be a little more fiscally straightforward, and maybe not 
through earmarking processes, then we are certainly willing to 
take a look at that and see if there's something we can put in 
the Defense authorization bill that would help that along.
    Finally, I just want to say that I went to Lake City Army 
Ammunition Plant last Friday, in Independence. I know the Army 
submitted an $80 million reprogramming request, because General 
Chiarelli noticed real problems there. I have to tell you, I 
couldn't agree more with General Chiarelli, in terms of the 
quality work environment and the work that needs to be done 
there. I think if most Americans met and talked to the men and 
women who are working at that plant around the clock, I think 
they would not like the working conditions that they are in. I 
think it would make them very uncomfortable that we are relying 
on these men and women to the extent that we are for our 
warfighters, and that they are being asked to work in these 
conditions.
    So, I certainly agree that the $80 million is something 
that is probably needed for efficiencies and for a quality work 
environment. I don't like reprogramming, obviously; you're 
never going to get me all excited about the idea that we're 
reprogramming $80 million. Why wasn't this in the long-range 
planning? Are we missing other facilities out there, where we 
are not taking a hard look at whether or not folks are working 
in conditions that we would expect to see in a movie about the 
1940s?
    General Stevenson. I don't think we are now, but probably 
true that we weren't paying enough attention to quality work 
environment, as opposed to the production output capability of 
our ammunition plants. As you probably heard when you visited, 
we've put a half a billion dollars into Lake City since 2003. 
It's not enough. There needs to be more and Lake City's not 
alone. We have an ammunition plant just south of here in 
Radford, VA--a very important ammunition plant. It's had a lot 
of investment but it needs more.
    We're going to make those investments. You're going to see 
those in the 2012, 2013--in our next POM submission, you'll see 
the requirements for those. But, we're anxious to get started 
now. That was the purpose of the reprogramming request. We very 
much appreciate the support to that.
    Senator McCaskill. Okay.
    Anything else, Senator Ayotte?
    Senator Ayotte. No, thank you, Chairman McCaskill. I do 
have some additional questions that I'll submit for the record, 
thank you.
    Senator McCaskill. I think you all can expect more 
questions for the record.
    We really appreciate your time and your service to our 
Nation.
    Thank you all very much.
    The hearing is adjourned.
    [Questions for the record with answers supplied follow:]

            Questions Submitted by Senator Claire McCaskill

                GOVERNMENT ACCOUNTABILITY OFFICE REVIEW

    1. Senator McCaskill. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, the 
Government Accountability Office (GAO) has conducted a series of 
reports on each Services' depot strategic plans and noted that the 
Services lacked a clear and comprehensive depot maintenance strategic 
plan that focuses on capital investment in facilities and equipment, 
implementation of a methodology to revitalize and resource organic 
depot facilities, public-private partnerships, workforce planning and 
development, and the integration of logistics enterprise planning 
systems. Given the significant role the organic depot maintenance 
facilities have played in resetting equipment that previously returned 
from theater, to what extent have the Services updated or revised their 
depot maintenance strategic plans to address current and future reset 
requirements, the type and mix of equipment expected to return for 
reset, equipping priorities, declining reset funds for operations and 
maintenance, and the impact of contractor support work to reset 
equipment?
    General Stevenson. The Army has recently completed an Organic 
Industrial Base (OIB) Strategic Plan that establishes the necessary 
management framework needed to ensure the Army retains a relevant OIB 
to meet future contingency operational requirements. Our past Reset 
mission clearly demonstrates that we must maintain an OIB that is 
capable of surging rapidly, is forward deployable, and is both 
efficient and effective.
    As current overseas operations begin to wind down, the Army's OIB 
enterprise must adjust to a changing operational and fiscal 
environment. In order to manage the eventual reduction in depot 
maintenance requirements the Army has developed four overarching 
strategic pillars that must be implemented to ensure the Army's OIB 
retains the necessary core competencies and capacities to meet future 
contingency operations, as described below:

        - Modernization: The need to ensure our Army depots are 
        modernized with new technology, training, and plant and 
        equipment at the same rate that the Army modernizes its weapon 
        systems. Critical to this pillar are actions ongoing that 
        better align and document sustainment requirements with the 
        acquisition strategies for new weapon systems.
        - Capacity: The actions necessary to document the core 
        competencies and the minimum number of Direct Labor Hours 
        (DLHs) necessary to sustain the identified core competencies at 
        each facility. The identified workload supporting core 
        competencies will form a basis for capacity and capability 
        assessments to ensure our organic depots are sized correctly.
        - Capital Investment: The actions necessary to develop a 
        capital investment strategy that focuses the Army's capital 
        investment funding to improve each depots core competencies and 
        capabilities. This ensures that the Army is investing in 
        capabilities that contribute to a facilities core mission set 
        to enable world class depot operations.
        - Resource Alignment: The Army's ongoing process to prioritize 
        depot maintenance funding so that depot workload which 
        contributes to sustaining the depots core competencies are 
        funded across the FYDP. This pillar has been completed and was 
        implemented beginning in POM 11-15.

    The focus on core capabilities provides the Army's OIB enterprise 
the mechanism to ensure Army depot workforces and infrastructures are 
aligned and sized properly and remain a ready, responsive, and flexible 
source of support during future contingency operations. This process 
provides a basis to determine the appropriate funding required to 
sustain depot core requirements which, in turn, ensures that the Army's 
industrial base retains the technology, knowledge, skills and abilities 
needed to sustain our critical warfighting equipment throughout the 
system's life-cycle.
    Army depots have been increasingly called upon to deploy skilled 
workers and establish forward critical depot capabilities into theaters 
of operation to conduct Reset maintenance and other logistics services. 
Our depots have met this challenge by being responsive and adaptive to 
the demands of a global force engaged in persistent conflict. These 
requirements and challenges will continue for the foreseeable future, 
and so the Army's OIB strategy requires that our depots be multi-
purpose and multi-use and structured to provide the required 
capabilities and capacities to satisfy future peacetime and wartime 
needs.
    General Panter. The Marine Corps recognizes that the depots are key 
to resetting the force, and we have an integrated strategy to ensure 
the depots' continued success. Key components of this strategy are 
described below:

         The Marine Corps depots operate the Capital Investment 
        Plan (CIP) in accordance with financial management regulations. 
        In addition, Marine Corps depots are compliant with published 
        CIP policy and timelines, completion requirements and other 
        mandated performance metrics in order to enhance the overall 
        execution of CIP. The depots continually monitor the CIP 
        requirements with other stakeholders to align needs with 
        capability and capacity and to ensure infrastructure and 
        related financing is in place at least 6-12 months prior to the 
        requirement to support incoming workload.
         Public-Private Partnering (PPP): Since 2008, the 
        footprint for PPP partnering with the Marine Corps depots 
        continues to increase. Examples of such partnering are the 
        Tunner workload with the Defense Reutilization Service and the 
        repair of secondary items with Raytheon.
         The 2008 Marine Corps Strategic Plan, published on the 
        OSD website, has an objective known as ``Workforce 
        Revitalization'' for sustaining a highly capable, mission ready 
        maintenance workforce.
         Workforce planning: The current Human Capital Plan 
        (HCP) supporting the depots is both flexible and agile in order 
        to readily respond to the needs of our customers. The HCP is 
        designed in four segments for hiring strategies:

      1.  Permanent personnel: The depots retain about 70 various 
skills sets on a permanent basis in order to sufficiently produce 
baseline/routine peacetime workload.
      2.  Personnel to support surge workload using commercial 
contractors: In order to augment the workforce to support surge 
requirements such as our warfighting engaged customer, the HCP includes 
multiple commercial contracts where terms of the contract are built on 
the basis of ensuring readily available journey level skill sets to 
augment/decrease the workforce within 24-48 hours.
      3.  Personnel to support surge and specialty (temporary) customer 
needs: For some of the necessary skills, the depots have partnership 
agreements with the local community colleges and universities that will 
allow personnel with special or unique skills to be on board within 
very reasonable timeframes.
      4.  Personnel hired as temporary/term government employees: The 
depots have partnered with local Human Resource Offices in order to 
ensure that direct hiring authority can be expeditiously executed to 
bring in surge personnel in the most efficient and cost effective 
manner, filling voids in skill sets necessary to support customer 
workload.

    Other workforce strategies include the utilization of overtime/comp 
time and increased shifts to accommodate customer needs. We also 
recognize that, as Operation Iraqi Freedom (OIF) and Operation Enduring 
Freedom (OEF) conclude, depot workload will decline, and we are 
preparing for this transition.
    General Reno. The Air Force is in the final stages of updating its 
Depot Strategy and is addressing the concerns highlighted in past GAO 
reports. The report recommended the Air Force revise the Depot 
Maintenance Strategic Plan to more clearly address all elements needed 
for a results-oriented plan. The Air Force agreed to explicitly address 
the Office of the Under Secretary of Defense's direction and framework 
for future challenges and demonstrate clear linkages to the Department 
of Defense's (DOD) Depot Maintenance Strategic Plan.
    The Air Force requires a robust depot Maintenance, Repair, and 
Overhaul (MRO) capability to support its air, space and cyberspace 
force of the 21st century. This capability relies on a seamless 
integration of public and private sector competencies, achieved through 
an increased reliance on public-private partnering on new and existing 
weapon systems. The Air Force continues to maintain and improve its 
``world-class'' organic MRO operations by ensuring they are sized to 
support a spectrum of operations, i.e. peace, contingencies, 
humanitarian operations, and war. This effort requires maintaining 
current infrastructure investments at a sustained level of investment 
that is appropriate and commensurate with private industry. It also 
requires continuous investment in the Air Force's organic depot 
maintenance workforce.
    The Air Force continually resets equipment as it returns or is 
rotated back from theater using Overseas Contingency Operations (OCO) 
funding. For Weapon System Sustainment (WSS), Resource Management 
Decision 700 directed the Air Force to develop a plan to fund the 
baseline at 80 percent of requirements by fiscal year 2016. This 
requirement is being considered in the Air Force plan for the fiscal 
year 2013 Program Objective Memorandum and will require increased 
baseline funding to sustain enduring WSS requirements when OCO funding 
ceases.
    The Air Force Depot Maintenance Strategy provides for:

    (a)  professional, skilled workforce;
    (b)  improved maintenance throughput and quality;
    (c)  sustained world class infrastructure;
    (d)  transformed processes;
    (e)  postured strategic enterprise workload capabilities;
    (f)  leveraged partnerships with the private sector;
    (g)  continued viable industrial base, and;
    (h)  compliance with policy and law.

    Admiral Burke. Navy ship and submarine class maintenance 
requirements are continuously updated based on current material 
condition and maintenance issues (e.g., superstructure cracking), 
capturing changes ``in stride'' resulting from OPTEMPO changes. Naval 
Shipyard capacity and capability, including workforce, tools, 
equipment, parts and infrastructure capacity, are sized to accomplish 
the maintenance requirements of assigned ships and submarines as part 
of the annual programming and budgeting process. Naval Shipyards 
periodically update their strategic plans to reflect the capacity and 
capability necessary to address the Fleet maintenance requirement which 
includes that resulting from OCO; shipyard workforce and infrastructure 
are commensurately adjusted.
    Naval Aviation has been able to absorb the depot requirements 
driven by OCO with minimal increase in permanent personnel or 
facilities. Navy has adopted an Integrated Maintenance Concept with 
Planned Maintenance Intervals for aircraft based on calendar months, 
and as such the scheduling of these events has not been altered by 
current operations. Aircraft inductions will continue for scheduled 
maintenance events based on fixed induction dates, allowing Navy to 
budget, plan, and execute the events without having to establish a 
stand-alone ``reset'' program. The engine and component depot work is 
driven by flight hours and environmental exposure which have only seen 
a slight (less than 7 percent overall) increase in workload since the 
beginning of operations. This workload has been absorbed by the normal 
depot workforce through overtime or augmentation by contractor support; 
both of which are temporary and can be returned to normal operations in 
a short timeframe. Last December, Commander Fleet Readiness Centers 
promulgated an fiscal year 2011-2017 Strategic Plan embedded in which 
are goals, objectives and initiatives designed to address Naval Air 
Systems Command's strategic priorities of current readiness, future 
capability, and people.

    2. Senator McCaskill. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, to 
what extent have the Services assessed the affects of reset on the 
baseline budgets, competing demands to reset equipment to meet unit 
readiness goals, the preservation of core capabilities, and the risk 
level organic depot maintenance facilities may be able to accommodate 
in order to complete reset workload requirements?
    General Stevenson. The Army assesses annually the affects of Reset 
on baseline budgets, competing demands to reset equipment to meet unit 
readiness goals, the preservation of core capabilities and the risk to 
organic depots to complete reset workload requirements. Workload 
requirements, both base and OCO, are forecasted and planned across the 
industrial base to ensure that the equipping needs of units are met 
within the Army Force Generation (ARFORGEN) cycle while reducing any 
risk. Army uses this information to assess competing demands to repair 
equipment in support of unit readiness goals. Additionally, this 
information informs our ability to meet core requirements with both 
Reset and base program workloads. Total workload is assessed to ensure 
that depots have the capability to meet both Reset and base 
requirements. Risk is mitigated through prioritization of requirements 
and the contracting of work beyond depot capabilities.
    General Panter. Mindful that OCO resources are diminishing, we are 
moving more depot maintenance costs into baseline budgets. In fiscal 
year 2010, we had $92 million in our baseline for depot maintenance - 
our baseline request for depot maintenance in fiscal year 2012 is $207 
million. From a `peace time' perspective-prior to OCO supplemental--in 
the fiscal year 2001-2004 timeframe our depot maintenance baseline 
requests averaged $107 million per year. Factoring for inflation, we 
are much closer to that level of funding today. When we begin to 
conclude OEF activities and determine our new depot maintenance 
demands, we are unlikely to revert to a pre-September 11 OPTEMPO. We 
believe the requested baseline provides a sufficient foundation on 
which to make informed adjustments in funding in the out years. 
Nonetheless, our confidence in the posture of our baseline depot 
maintenance funding in fiscal year 2012 and beyond assumes that OEF 
reset will be funded with OCO dollars in line with stated intent of 
both the administration and Congress. However, mindful of the austere 
nature of present fiscal conditions, we are watching this assumption 
closely.
    As we look beyond OEF, we are developing the core capabilities of a 
Middleweight Force. The results of these efforts (including our Force 
Structure Review Group, Lighten the MAGTF initiative, Table of 
Equipment reviews, and others) will shape the decisions on what 
equipment to reset and how best to reconstitute the force so that we 
are postured to respond across the range of military operations. The 
processes in motion to define our post-OEF force will inform our 
decisions to smartly program acquisitions to modernize the force.
    When the Marine Corps withdraws from Afghanistan, we will quickly 
return mission capable equipment sets to operating forces and strategic 
programs in order to ensure our ability to decisively respond to future 
missions. This will require the full use of our organic depots, as well 
as the strategic use of commercial repair sources to rapidly reset the 
equipment that has sustained significant wear throughout the war. Our 
organic maintenance depots have the flexibility to surge capacity to 
meet the needs of the Marine Corps.
    General Reno. The Air Force is addressing equipment reset budgeting 
by two strategies. First, Weapons System Sustainment (WSS), during the 
fiscal year 2012 President's budget build, the Air Force was directed 
via Resource Management Decision 700 to develop a plan to fund the 
baseline at 80 percent of requirements by fiscal year 2016. This plan 
requires increased baseline funding to sustain enduring WSS 
requirements when OCO funding ceases. Without this restoration to 
baseline funding, WSS will experience significant risk resulting in 
deferred depot-level maintenance and possible aircraft groundings.
    The second budget strategy affects assets such as vehicles (i.e., 
forklifts, trucks, etc) and equipment (i.e., aerospace ground 
equipment, generators, etc). When repair or replacement is needed, OCO 
funds are used. If the Air Force can't repair an asset in-theater, or 
an asset has exceeded its useful life, we dispose of that asset. OCO 
funds are still required for replacement of needed vehicle and 
equipment items until all such assets are reset. Once these assets are 
returned to peacetime use, the Air Force's baseline budget is 
sufficient to fund peacetime replacement and sustainment at required 
levels. However, if OCO ceases before all equipment is reset, the Air 
Force will assume some level of risk in readiness.
    The competing affects of reset to meet unit readiness goals are 
minimal. The Air Force continuously monitors environmental factors on 
deployed equipment, use rate, and failure rates. Air Force organic 
depot maintenance requirements for aircraft and engines are calendar 
driven or operating hour-based. Consequently, the depot maintenance of 
these systems is ongoing; the items return from deployment to the depot 
when maintenance schedules dictate. This process is carefully managed 
for all large equipment items to ensure unit readiness is continuously 
maintained. In so far as support equipment, the AF prioritizes asset 
use in-theater to ensure unit readiness goals are met.
    As for preservation of core capabilities, the Air Force identifies 
core requirements early in the acquisition process utilizing the Depot 
Source of Repair (DSOR) process. The DSOR process identifies core 
capabilities required by 10 U.S.C. Sec. 2464 for the program office and 
candidate depot. This ensures all parties understand the requirement to 
develop and maintain capabilities necessary to sustain the weapon 
systems. The program office works with the depots to stand up the core 
capability and the depot maintains the capability at a level to support 
the mission.
    Admiral Burke. Navy maintenance decisions are driven by class 
maintenance plans and schedules. Navy resets in stride after each 
deployment, and therefore expects minimal impact on depot maintenance 
facilities resulting from the drawdown of operations. However, Navy 
depots are still dependent on OCOs funding, with only 79 percent of the 
ship maintenance requirement and 87 percent of the aviation depot 
maintenance requirement funded in the base budget. Core depot 
capabilities should be unaffected by the reset, and are assessed 
biennially, in accordance with DOD Instruction 4151.20 and Section 2464 
of Title 10 U.S.C.

                    OVERSEAS CONTINGENCY OPERATIONS

    3. Senator McCaskill. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, with a 
drawdown of current operations on the horizon and related reductions in 
separate contingency funding, the baseline budgets for DOD and the 
Services are likely to have substantial requirements placed on them in 
the future. To what extent are the Services planning to include funding 
that is considered OCO funding into their baseline budget?
    General Stevenson. The Army has conducted a comprehensive 
assessment of OCO requirements to identify potential ``enduring'' 
requirements that should shift to the base budget in future years. This 
analysis is updated every year as part of the budget development.
    The Operation and Maintenance, Army (OMA) OCO to Base in fiscal 
year 2011 was $965.5 million and fiscal year 2012 is $1.2 billion. A 
subset of this is Depot Maintenance with $353 million in fiscal year 
2012. We anticipate that as fewer units are deployed, the requirements 
for home station training and support will grow in the future.
    General Panter. The Marine Corps is continuously working to 
identify programs that originated in OCO and are currently funded in 
OCO but that we anticipate becoming an enduring requirement (i.e. one 
that will be maintained after OCOs are ceased). As an example, our 
Depot Maintenance OCO request has decreased significantly over the past 
four budget cycles. This decrease is in part due to a conscious effort 
to fund the correct level of enduring depot requirements within our 
baseline budget.
    General Reno. The Air Force has been reviewing all OCO funded 
requirements to determine those that will be enduring when OCO funding 
is no longer available. As the Air Force builds the fiscal year 2013 
Program Objective Memorandum, every opportunity is being taken to move 
enduring requirements to the baseline.
    Admiral Burke. In fiscal year 2012 budget submission, the Navy 
proposed migrating items totaling $651 million to the base budget. They 
include:

         Flying Hours support costs, which funds civilian 
        personnel, transportation of equipment, travel, and simulator 
        support, increases from 61 percent to 90 percent to fund 
        enduring requirements in the baseline. No longer leveraged on 
        OCO. (OMN $180 million)
         Flying Hours Program Cost per Hour and MV-22 (OMN $83 
        million)
         USNS Mercy/Comfort medical support funding (OMN $5 
        million)
         OCO portions of Family Readiness programs (OMN $4 
        million)
         EOD and Counter IED (OMN $9 million)
         Navy Manpower and Personnel Systems and Navy Standard 
        Integrated Personnel System (OMN $9 million)

    The Navy continues to re-evaluate enduring OCO requirements in 
other areas of the budget for migration to the base budget in future 
years.

    4. Senator McCaskill. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, to 
what extent are the Services able to fund the reset of equipment 
returning from operations in Afghanistan from the base budget when OCO 
funding ceases?
    General Stevenson. The Army base budget request funds workload 
sufficient to sustain Core depot maintenance competencies. Over the 
past two budget submissions, the Army has been increasing the base 
depot maintenance budget (and decreasing the OCO RESET request) to 
restore our capability to fund Core out of the base. We do expect that 
equipment returning from the current OCOs will require more resources 
for reset than we will have in the base budget due to damage from the 
harsh operating conditions. The Army will request OCO funds, separate 
from the base budget, for this portion of reset. The Army also expects 
that the some level of OCO funding will be required for 2-3 years after 
the return of forces.
    General Panter. The Marine Corps would be unable to fund reset 
requirements from within our base budget. Reset is a direct cost of the 
wars in Iraq and Afghanistan and can only adequately be funded through 
supplemental OCO funding.
    The Marine Corps is heavily reliant on OCO funding to sustain 
current operations in Afghanistan and around the globe. The Marine 
Corps will continue to need this critical funding until reset is well 
underway, post-conflict. A lack of sufficient resources to repair and 
recapitalize equipment used after years of sustained combat operations 
could jeopardize the long-term readiness of the force. Accomplishing 
reset from within the Marine Corps' top-line budget in a time of fiscal 
austerity would likely put Marine Corps modernization and investment 
programs at risk.
    General Reno. The Air Force is addressing equipment reset budgeting 
with two overarching strategies dictated by the nature of the equipment 
affected. First, for WSS, the Air Force is developing a plan to restore 
the baseline by fiscal year 2016. This plan requires increased baseline 
funding to sustain enduring WSS requirements when OCO funding ceases.
    The second strategy for resetting equipment affects assets such as 
vehicles and generators. Resetting occurs as each piece of equipment 
completes its mission in Afghanistan. Using a forklift as an example, 
the Air Force will either dispose of the forklift or repair and 
redeploy it to meet other Air Force mission requirements. The Air Force 
will continue to require OCO funding to repair or replace equipment 
items like this until all such equipment is reset. At that time, the 
Air Force's baseline funding for these types of equipment is sufficient 
to fund peacetime replacement and sustainment at required levels.
    Admiral Burke. The Navy will be unable to fund the reset of 
equipment returning from operations in Afghanistan from within our 
baseline accounts. If OCO funding is not appropriated as requested in 
fiscal year 2012, the Navy will only be able to fund 79 percent of the 
ship maintenance requirement and 87 percent of the aviation depot 
maintenance requirement from the baseline budget.

    5. Senator McCaskill. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, what 
challenges do the Services expect to face with resetting equipment when 
OCO funding ceases?
    General Stevenson. We have consistently requested that OCO 
supplemental continue until the end of hostilities plus 2-3 years to 
ensure that all equipment returning from contingency operations can be 
Reset and returned to units to support future contingency operations. 
It is absolutely critical that we invest in restoring equipment 
readiness to ensure it is reliable and capable to support the needs of 
our Nation.
    Without this resourcing, the Army would be challenged to meet the 
incremental cost of war with base budgets that are at peacetime 
resourcing levels. We would have to take risk on the maintenance and 
modernization of equipment which, over time, would result in lower 
readiness and increase Operations and Sustainment (O&S) costs.
    General Panter. Two pressing challenges relate to how the Marine 
Corps will reconstitute its equipment to meet future needs and how 
readiness will impact future combat operations. During the past 8 plus 
years of sustained combat operations, the Marine Corps has experienced 
a steady increase in operational tempo. Wartime usage rates have been 
4-9 times higher than pre-September 11 peacetime rates, while normal 
peacetime operations continue. These increased equipment usage rates 
now constitute the new normal as equipment sets have experienced 
accelerated wear and tear in the harsh operating environments of Iraq 
and Afghanistan.
    Prior to the decision to increase the Marine Corps force size to 
support a surge in Afghanistan, reset budget trends were in alignment 
with projected reset requirements and timelines. However, the surge 
resulted in a significant shift of equipment from Iraq to Afghanistan, 
impacting the planned reset for that equipment. Therefore, reset 
actions initially forecasted to be completed in fiscal year 2012 were 
deferred due to operational necessities. A consequence of this reset 
deferment is that the Marine Corps has accepted considerable risk to 
the long-term readiness of its equipment. Foregoing reset actions now 
(e.g. field or depot-level maintenance) will result in higher than 
normal wash-out rates and more costly depot repairs when the equipment 
is eventually able to be reset. If OCO funding ceases prior to 
completion of reset efforts then the Marine Corps' modernization 
efforts will be severely impacted.
    General Reno. The Air Force is addressing equipment reset budgeting 
with two overarching strategies dictated by the nature of the equipment 
affected. First, WSS, the Air Force was directed during the fiscal year 
2012 President's budget build, via Resource Management Decision 700, to 
develop a plan to fund the baseline at 80 percent of requirements by 
fiscal year 2016. This plan requires increased baseline funding to 
sustain enduring WSS requirements when OCO funding ceases. Without this 
restoration to baseline funding, WSS will experience significant risk 
resulting in deferred depot-level maintenance and possible aircraft 
groundings.
    The second strategy for resetting equipment affects assets such as 
vehicles and generators and occurs as each piece of equipment becomes 
excess to operations in Afghanistan. Using a forklift as an example, 
the Air Force will either dispose of the forklift or repair and 
redeploy it to meet other Air Force mission requirements. The Air Force 
will continue to require OCO to fund replacement of needed equipment 
items like this until all such equipment is reset. At that time, the 
Air Force's baseline funding for these types of equipment is sufficient 
to fund peacetime replacement and sustainment at required levels. 
However, if OCO ceases before all equipment is reset, the Air Force 
will assume some level of risk in readiness.
    Admiral Burke. Navy capital intensive platforms (ships/aircraft) 
reset in stride after each deployment, however, they remain dependent 
on OCOs funding, with only 79 percent of the ship maintenance 
requirement and 87 percent of the aviation depot maintenance 
requirement funded in the base budget. Navy platforms and expeditionary 
equipment readiness will decrease if OCO funding ceases at the current 
baseline funding levels. Additionally, Navy estimates it will also 
require OCO funding for reset of expeditionary equipment for about 2 
years following the return of equipment from OIF/OEF to complete depot 
maintenance.

    6. Senator McCaskill. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, how 
will the maintenance depots determine the ``new normal'' budget since 
they have relied on contingency funds for several years?
    General Stevenson. The Army has aligned its budget process and 
resource prioritization to support ARFORGEN depot maintenance 
requirements. Additionally, fleet readiness and core requirements are 
synchronized and constitute the majority of the future depot 
maintenance budget requirements. The process allows the Army to look 
forward as it considers Base and Reset requirements in a synchronized 
fashion across the 5 Year Defense Plan.
    Army depot maintenance priorities are based on ARFORGEN equipping 
needs to support training, readiness and deployment requirements. The 
Army's depot maintenance requirements and repair programs reflect the 
size and composition of our fighting force, the age of our equipment 
fleets and the technological advances made over the last decade. As a 
result, the Army's depot maintenance requirements determination process 
has evolved and incorporates fleet management strategies synchronized 
with modernization strategies; expands Post-Production Software Support 
for a net-centric battlefield; and sustains non-standard equipment that 
has been rapidly procured and is now being designated as enduring.
    These efforts enable a synchronized Army depot maintenance budget 
that is forward looking, tied to ARFORGEN and ensures the Army's 
industrial base remains a critical and viable sustainment strategy 
supporting the ``new normal''.
    General Panter. The Marine Corps Equipment Maintenance Program has 
historically relied on contingency funding to fund both Home Station 
(Baseline) and OIF/OEF requirements. In an effort to right-size the 
baseline, the Marine Corps has increased baseline funding to support 
the OSD Depot metric of funding 80 percent of the total depot 
maintenance requirements. The increase in baseline funding is reflected 
in the fiscal year 2012-2013 equipment maintenance budget.
    Changes in the Marine Corps brought on by the Force Structure 
Review Group (FSRG) and Ground Combat Tactical Vehicles Strategy (GCTV) 
will lead to new equipment sets. We will be revalidating our 
maintenance strategies for equipment to forecast probable equipment 
returns over the long-term horizon. The Enterprise Level Maintenance 
Program (ELMP) will involve the entire Marine Corps enterprise to 
better define the requirement.
    General Reno. During the fiscal year 2012 President budget build, 
the Air Force was directed via Resource Management Decision 700 to 
develop a plan to migrate all remaining WSS funding from OCO to the 
baseline budget by fiscal year 2016. This plan will require increased 
baseline funding to sustain enduring WSS missions once OCO funding 
ceases. Without OCO-to-baseline funding migration, WSS will experience 
significant risk resulting in deferred depot-level maintenance and 
possible aircraft groundings.
    Admiral Burke. Depot maintenance workload and funding roughly 
tracks the operational tempo for ships and aircraft. The Navy expects 
that as ground forces depart the CENTCOM AOR, Navy operations for ships 
and aircraft will continue at close to current optempo levels to ensure 
regional stability in an area of vital economic interest to the United 
States and does not expect significant changes in depot workload for 
ships and aircraft. Navy has been working to establish the proper 
balance between the ``new normal'' baseline and contingency funding.

    7. Senator McCaskill. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, what 
are the depots' plans to manage workload as current operations draw 
down and how will DOD plan for any decreases in maintenance 
requirements when these operations end?
    General Stevenson. The Army has taken a number of steps to ensure 
the health of the depots in a future era of declining budgets.
    Our primary focus ensures that our depots maintain their Core 
competencies and capabilities to meet future requirements. This 
strategy requires that Core competencies are identified, and our 
facilities and workforce are sized to meet and sustain those Core 
competencies.
    We are developing and executing an Industrial Base Strategy that 
ensures ARFORGEN requirements are met with ready equipment; supports 
the integration of comprehensive fleet management and sustainment 
strategies; and integrates the sustainment of non-standard equipment.
    We have made significant changes in how we view and prioritize Core 
requirements in the 5 Year Defense Plan budget process. Core 
requirements are now identified and highlighted as critical 
requirements to be funded, thereby enabling the Army to successfully 
transition from wartime to a peacetime footing.
    Our depot workforce management remains flexible and responsive to 
meet the Nation's requirements through working multiple-shifts and 
hiring additional temporary personnel. This provides the flexibility to 
adjust personnel strength as the workload requires and avoids 
unnecessary turbulence in the permanent workforce.
    General Panter. The size of the workforce is constantly adjusted to 
meet workload requirements. This includes increasing or decreasing 
term, temporary and contract employees as the workload requirements ebb 
and flow. To best utilize taxpayer dollars, the workload requirement is 
continually assessed and the workforce sized appropriately. This 
includes workforce reductions when requirements have decreased.
    As projected through fiscal year 2013, the Marine Corps is 
beginning to right size the workforce in order to meet the expected 
workload. The Marine Corps executed a build-up in support of the war 
with an anticipated post-war downsizing. The build-up consisted of 
contractors, temporary worker's and term workers so adjustments could 
be made as changes in workload requirements occurred.
    General Reno. The depots manage their staff levels per 10 U.S.C., 
Sec. 2472. which requires that employees shall be managed solely on the 
basis of the available workload and the funds made available for such 
depot-level maintenance and repair. Therefore the depots are 
continually reviewing their budgets and manning levels to ensure they 
are in compliance with the law.
    Admiral Burke. Navy ship and submarine class maintenance 
requirements are continuously updated based on current material 
condition and maintenance issues (e.g., superstructure cracking), 
capturing changes ``in stride'' resulting from OPTEMPO changes. Naval 
Shipyard capacity and capability, including workforce, tools, 
equipment, parts and infrastructure capacity, are sized to accomplish 
the maintenance requirements of assigned ships and submarines as part 
of the annual programming and budgeting process. As the ship and 
submarine maintenance requirement changes, shipyard workforce and 
infrastructure is commensurately adjusted.
    Naval Aviation has been able to absorb the depot requirements 
driven by OCO with minimal increase in permanent personnel or 
facilities. Naval Aviation has adopted an Integrated Maintenance 
Concept with Planned Maintenance Intervals for aircraft based on 
calendar months vice material condition, and as such the scheduling of 
these events has not been altered by the current operations. Aircraft 
inductions will continue for scheduled maintenance events based on 
fixed induction dates which allows Navy to budget, plan, and execute 
the events without having to establish a stand-alone ``reset'' program. 
The engine and component Depot work is driven by flight hours and 
environmental exposure. These areas have seen a slight (less than 7 
percent overall) increase in workload since the beginning of 
operations. This workload has been absorbed by the normal depot 
workforce through overtime or augmentation by contractor support; both 
of which are temporary and can be returned to normal operations in a 
short timeframe.

    8. Senator McCaskill. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, 
several years of OCO have created higher-than-ever levels of 
maintenance requirements which have caused increased expenditures. DOD 
and the private sector have ramped up to meet these requirements, in 
the near term, to reset equipment and weapon systems. What are the 
maintenance implications of lessons learned in supporting the OCO and 
reset operations that will affect the future of DOD maintenance?
    General Stevenson. There are several major implications from 
lessons learned in supporting OCO that will affect the future of DOD 
maintenance. The ability of our industrial facilities to adapt to the 
surge and ebb of Reset workloads underscores the importance of Core to 
sustain the right skill sets. The flexibility of our workforce using 
permanent, temporary and contracted labor has enabled our OIB to 
respond as needed. Moreover, the investment in our facilities provides 
the right capacity to achieve the outcomes realized.
    The Depot Level Reset Repairs, especially those constituting full 
recapitalization or rebuild, have reduced future maintenance 
liabilities for systems which otherwise would be approaching the end of 
their life-cycles and therefore would be more expensive to maintain. In 
addition, wartime experience has refined fleet management strategies 
for many systems and adjusted our supply chains accordingly.
    The Army optimizes repair expenditures based on maintenance lessons 
learned during OCO. We can forecast the expenses associated with 
deploying and Resetting specific pieces of equipment.
    General Panter. The Marine Corps conducts annual capacity and 
capability analysis to ensure preparedness to execute planned and 
budgeted/funded customer workload at its maintenance depots. There are 
many dynamic variables that affect requirements for reset. For example, 
the Marine Corps had a well planned OIF reset strategy and plan in 
place, but world events caused significant modification to the plan as 
the Marine Corps surged personnel and equipment into Afghanistan.
    The Marine Corps' depots have routinely responded to lessons 
learned from previous wars and aligned themselves to readily meet the 
needs of their customers for reset of warfighting equipment. While the 
level and scope of capability required to execute reset remains 
unknown, the flexibility of the depots' HCP already incorporates the 
ability to acquire skilled personnel within short timeframes. The 
buildup is considered temporary.
    In addition, the depot is undergoing investment projects which will 
be able to support either continual warfare or reset. Until decisions 
are made on the eventual OEF draw down phasing, velocity and Force 
structure and size; the depots will not be able to fully determine 
throughput requirements. However, as in past wars, the depots have 
proven their ability to quickly respond to these needs.
    General Reno. OCO and reset operations have not significantly 
impacted the way we do maintenance. The Air Force's depot maintenance 
requirements for aircraft and engines are very structured and calendar-
based or operating hour-based. For this reason, the depot maintenance 
of these systems has been ongoing. The aircraft or engines return from 
the Area of Responsibility to the depot when the maintenance schedule 
dictates. This process ensures the right assets receive the required 
depot maintenance at the right time and enables the Air Force to 
execute its logistics campaign strategy for future engagements.
    Admiral Burke. Navy ship and submarine class maintenance 
requirements are continuously updated based on current material 
condition and maintenance issues, capturing changes ``in stride'' 
resulting from OPTEMPO changes, and ensuring ships can reach their 
expected service life. Consequently, there are no significant 
implications from supporting OCO and reset operations. Naval Shipyard 
capacity and capability, including workforce, tools, equipment, parts 
and infrastructure capacity, are sized to accomplish the maintenance 
requirements of assigned ships and submarines, as part of the annual 
programming and budgeting process.
    During OCO operations, Naval Aviation has been able to absorb the 
scheduled depot requirements driven by OCO with minimal increase in 
permanent personnel or facilities. Forward deployed Contract 
Maintenance Teams (CMTs) were added to assist Sailors and Marines with 
day-to-day maintenance requirements, along with an increased pool of 
fly-away artisans to ensure expeditious depot-level repair while in the 
field. Navy expects to draw down both the CMTs and size of the fly-away 
teams as we return to normal peacetime flying operations.

    9. Senator McCaskill. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, DOD 
has acquired millions of dollars in tactical non-standard equipment to 
address the evolving threat in Iraq and Afghanistan, including the 
enemy's use of improvised explosive devices (IED). To what extent are 
you considering this nonstandard equipment purchased by Joint IED 
Defeat Organization (JIEDDO) and others to meet urgent warfighters' 
needs as equipment that should be added as standard equipment to unit 
requirements?
    General Stevenson. JIEDDO currently develops and equips counter-IED 
capabilities in response to joint urgent warfighter needs. Proven 
fielded capabilities are sustained by JIEDDO for a maximum of 2 years 
then transferred to the Services for sustainment. JIEDDO and the 
Services develop an annual Transfer/Transition (T2) list utilizing 
JIEDDO's Transition Working Group (TWG). Headquarters Department of the 
Army (HQDA), Deputy Chief of Staff, G-3/5/7, serves as the Army lead to 
the TWG and works with JIEDDO to integrate/transfer proven CIED 
capabilities to the Army after 2 years of JIEDDO funding. Transferred 
capabilities are sustained in the G-3/5/7's annual OCO funding request 
until the Army decides which proven materiel/non-materiel capabilities 
will be recommended to become enduring through the Capabilities 
Development for Rapid Transition (CDRT) process.
    The Army instituted the CDRT process in 2004 to identify 
nonstandard equipment and (later) non-materiel solutions developed by 
JIEDDO and others that the Army should incorporate throughout the force 
as enduring. The CDRT process was also developed to significantly 
reduce the time it takes to field selected enduring capabilities to the 
operational force. To date, 18 of 86 (21 percent) JIEDDO initiatives 
were transferred to the Army and identified as enduring in CDRT. 
Enduring capability examples include: Battlefield Forensics Training, 
Husky Mounted Detection System (HMDS) and Greendart. Additionally, the 
CDRT process has selected 54 of 556 (10 percent) capabilities purchased 
by other agencies as enduring. Examples include: Common Remotely 
Operated Weapons System (CROWS) and Command Post of the Future (CPOF).
    The CDRT process does not bypass the JCIDS process for materiel 
systems, but leverages a provision in Chairman of Joint Chiefs of Staff 
Instruction (CJCSI) 3170.01 that provides for a military utility 
assessment enabling entry into the process at a later stage if a system 
has performed successfully. The Joint Staff and the Army have 
interpreted this provision to apply to nonstandard systems performing 
well in an operational environment.
    Capabilities identified as enduring are transitioned into new or 
existing acquisition programs. These enduring capabilities are assigned 
to a U.S. Army Training & Doctrine Command combat developer, and an 
Assistant Secretary of the Army (Acquisition, Logistics, and 
Technology) materiel developer.
    General Panter. Nonstandard equipment purchased by the JIEDDO with 
U.S. Marine Corps (USMC) equity is submitted to the Marine Corps Combat 
Development Command (MCCDC) for consideration for transfer or 
termination. The Marine Corps published a Marine Corps Administration 
Publication in October 2009 that outlines the procedures to determine 
viability of the equipment (MARADMIN 0595/09). In accordance with this 
MARADMIN, the initiative is submitted to the Capability Development 
Integration Board (CDIB) for processing through the Urgent Universal 
Needs Statement (UUNS) Process. The equipment is validated by the 
operating forces through the Marine Component of Central Command 
(MARCENT) and voted on by members of the CDIB. If the system is 
acceptable to the CDIB, it sends a memo to the Marine Corps 
Requirements Oversight Council (MROC) for approval and funding 
decision.
    Two systems that have transferred successfully to the Marine Corps 
are Counterbomber and Keyhole. Counter Suicide Bomber Capability 
``DRAGON-VISION'' combines video tracking and an active, non-imaging 
radar to interrogate human torsos for anomalies. KEYHOLE is a Counter-
IED Reconnaissance, Surveillance, & Target Acquisition (C-IED-RSTA) 
Kit. This initiative provides Marine Corps snipers enhanced detection 
equipment, increases force protection and reduces the enemy's ability 
to emplace IEDs.
    General Reno. The Air Force has used much of the Joint Improvised 
Explosive Device Defeat Organization (JIEDDO) fielded equipment in 
association with Mine Resistant Ambush Protected (MRAP) Vehicle program 
and Counter-IED operations supporting Joint Task Force Paladin and 
Joint Task Force Troy. The majority of this equipment is fielded and 
currently accounted for on theater provided equipment accounts, which 
are managed by the Air Force, Army, or Central Command. The Air Force 
is transitioning MRAPs from vehicle management to weapon systems 
management and in that process is identifying multiple JIEDDO funded 
systems to be considered as standard MRAP equipment and accounted for 
on Air Force property records as a program of record.
    The Air Force is not considering adding nonstandard JIEDDO 
purchased equipment fielded to Joint Task Force Paladin in Afghanistan 
and Joint Task Force Troy in Iraq to Air Force property records and 
that are picked up as a program of record.
    Admiral Burke. Equipment purchased by JIEDDO or others to meet 
urgent warfighter needs are reviewed/evaluated for potential to fill a 
capability gap, provide enhancement to legacy systems and/or be 
addressed within requirements of planned development programs to meet 
future warfighter needs. Examples are: (1) Specific components from EOD 
Dismounted Tool Suite (JUON CC-0402) were added to force's equipage 
list; and (2) Non-Line-of-Sight (NLOS) capability for robots (JUON CC-
0412) has been incorporated within the capabilities development 
document for Advanced EOD Robotic System (AEODRS) program.

    10. Senator McCaskill. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, to 
what extent has DOD identified future maintenance and other sustainment 
costs for these items that will have to be funded in the future?
    General Stevenson. The Army's Capability Development Rapid 
Transition (CDRT) process along without the System Acquisition Life 
Cycle process ensures that systems that are enduring are considered for 
future maintenance and other sustainment costs. Items that are enduring 
will transition to a Program of Record and will be included in the 
Army's Base budget requests.
    General Panter. Through the JIEDDO, Special Equipment Items (SEI) 
were purchased as a result of Urgent Universal Needs Statements (UUNS); 
therefore, there was no initial long-term sustainment requirement 
planning conducted. However, items identified as standard equipment to 
unit requirements will be put through the DOTMLPF process in order to 
determine overall sustainment cost requirements.
    In the interim, these items will continue to be sustained by OCO 
funds, while we collect historical data from similar systems and 
current data from these unique items to determine projected sustainment 
costs.
    General Reno. The Air Force is transitioning MRAP vehicles from 
vehicle management to weapon systems management. We are also in the 
beginning stages of working the maintenance and sustainment transition 
plans and cost estimates to move MRAP vehicles from a joint program to 
a Service-sustained program. At this time, maintenance and sustainment 
costs have yet to be determined.
    Admiral Burke. The Navy takes a holistic approach when adding 
equipment to a Table of Allowance (TOA) and coordinates across 
stakeholders to plan for resourcing and programming sustainment costs. 
Further, when equipment is transferred from JIEDDO or through other 
urgent warfighter needs processes, coordination takes place between the 
Program Offices and the resource sponsors to ensure program sustainment 
funding is in place.

                         WORKING CAPITAL FUNDS

    11. Senator McCaskill. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, GAO 
has done some great work on the Services' Working Capital Funds, more 
specifically the Army and Air Force. I recently drafted a letter to 
examine the Marine Corps next. How do we do a better job at managing 
cash on hand and carryover issues?
    General Stevenson.
DWCF Cash
    Managing cash on hand is a very complex task as reflected by GAO 
audit coverage. The Department is currently conducting a cash study, 
which was directed by the National Defense Authorization Act (NDAA) for 
Fiscal Year 2011. The Army supports this cash study and anticipates the 
review will provide recommendations and best business practices that 
will further improve cash management.
Carryover
    The Army continues to work aggressively to meet production 
schedules and minimize carryover by using higher than normal overtime, 
multiple shifts, and contractors in the workforce. In addition, senior 
leaders are working intensively to eliminate production roadblocks. The 
Army will continue to push to accomplish as much workload as possible 
so that carryover is minimized. It should be noted, however, that the 
later in the fiscal year that the appropriations bill is passed, the 
more likely it is that there will be carryover issues.
    General Panter. The Marine Corps readily accepts, appreciates and 
welcomes any help, assistance, and/or guidance that the GAO can provide 
to help achieve more effective and efficient depot operations.
    With respect to managing cash on hand and how the MC can do a 
better job: The Marine Corps depots have struggled to maintain the 7-10 
day on hand cash levels. However, beginning this fiscal year, as a 
result of a 2 year tiger team analysis of revenue and outlay patterns, 
we managed to establish a level of stability and compliance with the on 
hand cash levels.
    The tiger team continues to work elements of operations affecting 
cash and employing performance metrics aimed at ensuring cash is 
managed by activity.
    Managing carryover for the depots has also been a struggle. The 
timeframe required to complete a heavy workload in support of home-
station training requirements and sustain OEF operations, including the 
additional hours required to repair heavily damaged weapon systems, has 
impacted the ability of the depots to comply with the elements of a 
peace time designed carryover threshold metric.
    In 2008, the same tiger team approach for cash was applied to 
carryover. As a result, organizational problems such as timely fiscal 
job closure, pursuing customer order reductions for closed workload, 
and working with DFAS to track and clear problematic system errors were 
addressed. The tiger team review of these issues and other systemic and 
customer behavioral elements (i.e. customer financing needs, statement 
of work comprehensiveness and funding availability) produced results in 
2009 when we achieved a historic 4.9 million direct labor hours and 
$589 million in revenue and were only $38 million over the carryover 
ceiling.
    In fiscal year 2010, we continued this progress with basically the 
same level of direct labor hours (4.5 million) and revenue ($580 
million) and were only $19 million above the ceiling. The team 
continues its work today by closely monitoring performance metrics and 
stakeholder coordination to help reduce carryover. In many cases, 
carryover has been exacerbated by late funding and Continuing 
Resolution Funds (CRFs). While the Marine Corps worked hard to obtain 
funding, other services or accounts were delayed. Regardless, the 
depots accepted work because it needed to be done.
    General Reno.
Carryover
    In fiscal year 2010, Headquarters Air Force and Air Force Materiel 
Command (AFMC) began implementing actions to improve the accuracy of 
Air Force Working Capital Fund (AFWCF) carryover budgets. First, the 
Air Force began including OCO-funded orders in the fiscal year 2012 
AFWCF budget. Second, we requested and received approval from the 
Office of the Under Secretary of Defense Comptroller (OUSD(C)) 
Revolving Funds to use an alternative outlay rate for software 
maintenance workloads when calculating the allowable amount of 
carryover. We requested the alternative outlay rate because software 
work is fully funded upfront but requires years to complete, and in 
many cases, requires the procurement of hardware from vendors. The 
alternative outlay rate is expected to reduce future variances between 
budgeted and actual allowable carryover. Third, AFMC is taking steps to 
improve workload and budget forecasts. Specifically, in December 2010, 
AFMC developed a process which improves coordination between 
organizations that affect the performance of depot maintenance work 
(i.e., systems program office, maintenance wings, and supply chain 
managers). To accommodate workload requirement changes, this initiative 
includes an approval process to adjust future budgets and workload 
estimates. The Air Force expects these changes will improve on-time 
aircraft and missile performance and reduce variances between budgeted 
and actual carryover.
    Additionally, the Air Force implemented the following GAO 
recommendations into the AFWCF budget process. First, we will compare 
budgeted carryover that is over or under the allowable amount to the 
actual amount to identify the difference and reasons for the 
differences, and consider these trends in developing future budget 
estimates on carryover. Next, we will compare budgeted orders to actual 
orders to identify the differences and reasons for the differences and 
consider them when developing future years' budget estimates on new 
orders received from customers. Finally, we will compare the forecasted 
workload requirements (i.e., number of hours of depot maintenance work 
to be performed) to the actual work accomplished and consider these 
trends in developing future years' depot maintenance workload 
requirements.
Cash
    The DOD cash management policy is to maintain the minimum cash 
balance necessary to meet both operational requirements and 
disbursement requirements in support of capital programs. Thus cash 
levels should be maintained at 7 to 10 days of operating cost plus 6 
months of capital disbursements. Cash generated from operations is the 
primary means of maintaining adequate cash levels. The AFWCF generates 
cash by setting revenue rates to recover full costs to include prior 
year losses, accurately projecting workload, and meeting established 
operational goals. In the event workload or operational performance 
differs from budget and drives cash levels outside the target range, 
Working Capital Fund organizations are permitted, with permission of 
the Director of OUSD(C) Revolving Funds, to direct out-of-cycle rate 
adjustments or surcharges at any time during fiscal years to restore 
cash to targeted levels. In fiscal year 2010, as a result of increased 
workload associated with the surge, the Transportation Working Capital 
Fund was able to: (a) reduce rates by $243 million; (b) relieve the Air 
Force of funding the Airlift Readiness Account for $315 million;, and 
(c) waive the cash recovery funding requirement of $663 million. These 
actions returned over $1 billion to the Services and AFWCF ended the 
fiscal year with $945 million, 8 days of cash. This type of proactive 
cash management is employed to maintain sufficient cash levels within 
AFWCF.
    Additionally, we are collaborating with OUSD(C) Revolving Funds on 
the working capital funds cash study required by section 1402 of the 
NDAA for Fiscal Year 2011 and look forward to the resulting findings 
and cash management process improvement opportunities.
    Admiral Burke. Currently the Department's Navy Working Capital Fund 
(NWCF) cash balance is aligned with the 7-10 days operations, plus 6 
months Capital Investment Program (CIP) outlay metric. Section 1402 of 
HR 6523 EH directed DOD to conduct a study on cash balances, which is 
ongoing. The Office of Revolving Funds, OUSD(C), is the lead for this 
action.

    12. Senator McCaskill. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, do we 
need a war-time versus peace-time policy?
    General Stevenson. We currently believe there is no need for a 
separate wartime versus peacetime policy pertaining to the cash 
requirement computation. This computation takes into consideration the 
level of workload at industrial facilities as well as the level of 
demands placed on the supply system. Currently, the Army Working 
Capital Fund philosophy is to maintain a ``cash corpus'' to cover 
current disbursements and future capital expenditure by budgeting for 7 
to 10 days of operating cash which keeps us in compliance with the 
Antideficiency Act.
    As directed by the NDAA for Fiscal Year 2011, DOD is conducting an 
independent review of each working capital fund within DOD to ascertain 
the appropriate cash corpus required to maintain good financial 
management of the funds. The Army supports this cash study and 
anticipates the review will provide recommendations and best business 
practices that will further improve cash management. The 7- to 10-day 
metric could be adjusted based on the results of this study.
    General Panter. Absolutely. In particular, any way to encourage 
more timely release of supplemental funding to appropriated customers 
in order to adequately execute their war time requirements would be 
extremely helpful. In addition, a carryover policy with more relaxed 
over-the-threshold metrics would help to support both the depot and the 
combatant commanders. The heavy workload in support of home-station 
training requirements and OEF operations, including the additional 
hours required to repair heavily damaged weapon systems, do not readily 
align with peacetime or static operations.
    General Reno. The AFWCF executes orders from customers that are 
both peace-time and war-time funded. The customers have applied Office 
of Management and Budget (OMB) guidance to define these requirements. 
The OMB guidance ``Criteria for War/Overseas Contingency Operations 
Funding Requests'', dated July 2010, was provided to assist DOD in 
deciding if requirements should be funded with OCO funding. The Air 
Force accepts this guidance as sufficient policy to distinguish peace-
time and war-time requirements. Thus, AFWCF customer orders are based 
on the above referenced OMB guidance.
    Admiral Burke. DOD generally prepares a peace-time budget. However, 
following the events of September 11, 2001, enhanced security and force 
protection requirements are now permanent parts of peace-time budgets.

    13. Senator McCaskill. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, is 7 
to 10 days enough of a window for combat operations?
    General Stevenson. We currently believe 7 to 10 days of cash is 
enough of a window for combat operations, but the Department is 
conducting a cash study as directed by the NDAA for Fiscal Year 2011. 
The Army supports this cash study and anticipates the review will 
provide recommendations and best business practices that will further 
improve cash management. Based on the results of this study, the 7 to 
10 day metric could be adjusted.
    General Panter. While it is possible that 7 to 10 days may not be 
enough in a costly war, expanding the on hand days of cash may cause 
more problems than what the Services are already experiencing. It is 
our belief that employing the tiger team process improvement metrics, 
working with DFAS on collections and systemic problems, working with 
contracting officers on viable outlay schedules, and working internal 
and external performance operations related to billings and revenue 
collections, the 7 to 10 day level should be sufficient.
    General Reno. Yes. The current range of 7 to 10 days of cash is 
sufficient for combat operations. Although AFWCF disbursements may 
increase during combat operations, AFWCF collections also increase 
which tends to negate the effects of the increased disbursements on the 
cash balance (reflecting higher customer demand).
    Additionally, the Air Force is collaborating with the Office of the 
Under Secretary of Defense Comptroller Revolving Funds on a working 
capital funds cash study required by Section 1402 of the NDAA for 
Fiscal Year 2011. The legislation directs the performance of a study on 
working capital fund cash balances to determine a sufficient 
operational level of cash that each revolving fund of (DOD should 
maintain in order to sustain a single rate or price throughout the 
fiscal year. The study will also provide an up-to-date perspective on 
cash requirements since it takes into account existing DOD practices.
    Admiral Burke. Navy Working Capital Fund (NWCF) activities are not 
involved in combat operations, but provide support to readiness and 
combat operations. Hence, there is no impact on the 7-10 day cash 
metric.

    14. Senator McCaskill. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, Vice Admiral Burke, how do we 
balance a decline in combat operations with decreasing work orders and 
cash on hand?
    General Stevenson. As combat operations decline, we expect to see 
overall customer orders decline within the Army Working Capital Fund. 
The supply management business will be impacted most immediately as 
operating units return to home station or demobilize, placing fewer 
demands for spare parts on the supply system. The industrial operations 
business will continue to reset and recapitalize equipment returning 
from theater over a period of years but at reduced levels from wartime 
highs.
    In anticipation of a decline in combat operations, the supply 
management business has not been replenishing inventory sold over the 
past several years on a one-for-one basis. Buying less inventory than 
sold helps preserve cash on hand as supply system orders decline. To 
minimize the impact of reduced workload on our depots, the Army has 
identified critical core requirements that must be resourced to support 
capabilities for future contingencies. In addition, the Army is 
examining fleet strategies and whether other equipment items should be 
put through depot maintenance to sustain readiness and help maintain 
efficient depot workload levels. These actions also help preserve cash 
on hand.
    General Panter. Both cash on-hand and work orders are relative to 
points in time as well as the performance metrics for such timeframes 
(i.e. as outlay/disbursing rates change, so does on hand cash level 
requirements). Not to oversimplify a multifaceted and somewhat 
difficult management process, the Marine Corps Working Capital Fund 
depots align their budget, finance and execution with customer demand. 
As such, if workloads decrease due to a decline in customer work 
orders, adjustments are made for personnel and other support utilizing 
the current temporal contractual and other hiring terms that include 
the agility and flexibility to readily respond to customer change in 
demand. As the change in demand completes in execution; so does on hand 
cash calculations. These are balanced with continual attention to 
performance metrics and proactive and reactionary strategies as we work 
with stakeholders for compliance and support as necessary.
    As point of note, even with an eventual decline in combat 
operations, we anticipate depot maintenance work will continue at least 
2 years after the war and funding will be needed.
    General Reno. Declining combat operations does not necessarily 
result in reductions in orders or cash on hand. As a result, AFWCF 
activities work closely with customers in projecting requirements for 
our products and services. This collaboration is critical to the AFWCF 
correctly budgeting for customer demand whether the operations tempo is 
increasing, decreasing or steady. The process enables the AFWCF 
activities to plan for volume and mix changes in both maintenance and 
supply chain requirements. As a result, we ensure revenue rates are set 
to recover our operating costs and to maintain sufficient cash on hand, 
commensurate with the level of orders projected.
    Admiral Burke. Although a decline in combat operations may 
negatively impact some workload, the cash metric requirement (7-10 days 
operations plus 6 months Capital Investment Program (CIP) outlays) 
remains applicable, even if calculated on a smaller base of workload. 
NWCF depots formulate their annual operating budgets using information 
obtained from customers about changes in workload levels and schedules, 
so that adjustments can be made to NWCF workforce, production support, 
and infrastructure elements in a timely manner.

                        DEPOT MAINTENANCE REPORT

    15. Senator McCaskill. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, in the 
past 5 years, what steps have depots taken to ensure core capabilities 
will be maintained in a post-reset environment?
    General Stevenson. The Army has taken a number of steps to ensure 
the Army depots play an integral role in the depot core requirements 
determination and sustaining workload processes in a post-reset 
environment. The Army acknowledges that an effective core depot process 
is essential to the goal of developing and sustaining a relevant OIB. 
Thus, the core depot process is the centerpiece of the Army's recently 
developed OIB strategy.
    As current overseas operations begin to wind down, the Army's OIB 
enterprise must adjust to a changing operational and fiscal 
environment. In order to manage the eventual reduction in depot 
maintenance requirements the Army has developed four overarching 
strategic pillars that are being implemented to ensure the Army's OIB 
retains the necessary core competencies and capacities to meet future 
contingency operations, as described below:

         Modernization: The need to ensure our Army depots are 
        modernized with new technology, training and plant and 
        equipment at the same rate that the Army modernizes its weapon 
        systems. Critical to this pillar are actions ongoing that 
        better align and document sustainment requirements with the 
        acquisition strategies for new weapon systems. Key to this is 
        recent policy that requires the development to conduct a Core 
        Logistics Analyses (CLAs) by Milestone B and Core Depot 
        Assessments (CDAs) by Milestone C to identify core requirements 
        early on in the development cycle of a weapon system.
         Capacity: The actions necessary to document the core 
        competencies and the minimum number of DLHs necessary to 
        sustain the identified core competencies at each facility. The 
        identified workload supporting core competencies will form a 
        basis for capacity and capability assessments to ensure our 
        organic depots are sized correctly. The Army has taken action 
        over the past 2 years to identify and correct core capability 
        shortfalls in our organic depots to include, OH-58D, Bradley 
        Fighting Vehicle, Stryker and M88A1/A2.
         Capital Investment: The actions necessary to develop a 
        capital investment strategy that focuses the Army's capital 
        investment funding to improve each depots core competencies and 
        capabilities. This ensures that the Army is investing in 
        capabilities that contribute to a facilities core mission set 
        to enable world class depot operations. The CIP Plan identifies 
        the facilitization requirements to establish core capabilities 
        at organic depots such as facility upgrades, plant equipment, 
        tooling, access to technical data, workforce training, and 
        other facilitization requirements are planned, funded, and 
        implemented.
         Resource Alignment: The Army's ongoing process to 
        prioritize depot maintenance funding so that depot workload 
        which contributes to sustaining the depots core competencies 
        are funded across the FYDP. This pillar has been completed and 
        was implemented beginning in POM 11-15.

    The focus on core capabilities provides the Army's OIB enterprise 
the mechanism to ensure Army depot workforces and infrastructures are 
aligned and sized properly and remain a ready, responsive, and flexible 
source of support during future contingency operations. This process 
provides a basis to determine the appropriate funding required to 
sustain depot core requirements which, in turn, ensures that the Army's 
industrial base retains the technology, knowledge, skills and abilities 
needed to sustain our critical warfighting equipment throughout the 
system's life-cycle.
    General Panter. The Core Capabilities requirements for all the 
Services are currently calculated on a bi-annual basis to ensure Depots 
operate proficiently through adequate equipment, facilities, and skill 
sets that enable them to meet Core requirements. The amount of volume 
based on past Reset requirements could be well above Core requirements 
(e. g., war related reset requirements could be part of the `above 
Core' requirements).

         The Marine Corps recognized opportunities for 
        improvement in the Core Determination process and initiated a 
        study in fiscal year 2009 to identify/rectify the gaps/voids/
        weaknesses in the process.
         The study expanded to include both halves of the core 
        scenario:

                 Industrial Depot Maintenance Core Logistics 
                Capabilities Determination
                 Acquisition Core Determination (designation of 
                new weapons systems as core or non-core)

         Gaps/voids/weaknesses were identified.

                 12 Industrial (5 process related, 7 policy 
                related)
                 5 Acquisition (1 process related, 4 policy 
                related)

         COAs to resolve were selected.
         Actions ongoing

                 Development of Automated Systems to resolve 
                process issues
                 Policy review/rewrite to resolve policy issues

    Marine Corps depots are engaged in continuous process improvements 
in the facilities which support the maintenance of our equipment. This 
is done by investing an average of 6 percent of working capital funds 
toward these type of improvements. Additionally, the Marine Corps has 
leveraged greater capacity from the U.S. Army to yield more efficient 
returns on select platforms such as the M-1 tank that receives depot 
level maintenance at Anniston Army Depot.
    General Reno. The Air Force identifies core requirements early in 
the acquisition process utilizing the Depot Source of Repair (DSOR) 
process. The DSOR process identifies the core logistics capabilities 
required by 10 U.S.C., Sec. 2464 for the program office and the 
candidate depot. This ensures that all parties understand the 
requirement to develop and maintain those capabilities necessary to 
sustain the weapon systems. The program office works with the depots to 
stand up the core capability and the depot maintains the capability at 
a level to support the Air Force mission. The organic depot maintenance 
requirements for aircraft and engines are very structured and calendar 
or operating hour-based. The Air Force has continually reset equipment 
as it has returned or rotated back from theater using OCO funding. For 
WSS, Resource Management Decision 700 directed the Air Force to develop 
a plan to fund the baseline at 80 percent of requirements by fiscal 
year 2016. This plan requires increased baseline funding to sustain 
enduring WSS requirements when OCO funding ceases.
    Admiral Burke. In the past 5 years, the Navy has focused on 
becoming more efficient and effective in delivering our products to the 
Fleet. Naval Aviation has continued with a distributed maintenance 
philosophy, and in some areas has co-located depot artisans with 
intermediate level maintainers to interdict and repair components close 
to the flight line. This saves turn-around-times (TAT), cost, sparing 
requirements, and improves the knowledge and skills of our military 
maintainers. The Navy has centralized the Capital Investment Program 
(CIP) and initiated a CIP Working Group that is responsible for 
improving the process, managing the portfolio, and acquiring 
replacement machinery, tools, information technology systems, and minor 
construction to maintain the Fleet Readiness Center's capabilities.
    Navy ship and submarine class maintenance requirements are 
continuously being updated, based on current material condition and 
maintenance issues (e.g., superstructure cracking), and capturing 
changes ``in stride'', resulting from OPTEMPO changes. Naval Shipyard 
capacity and capability, including workforce, tools, equipment, parts, 
and infrastructure capacity, are being sized to accomplish the 
maintenance requirements of assigned ships and submarines, as part of 
the annual programming and budgeting process. As the ship and submarine 
maintenance requirement changes, shipyard workforce and infrastructure 
are also adjusted based on the long-range workload projections and 
facilities plans that support them.

                         WORKING CAPITAL FUNDS

    16. Senator McCaskill. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, to 
what extent have the Services conducted periodic reviews of their 
organic depot maintenance facilities to ensure that they have the 
necessary skills and capabilities needed to reset equipment in a timely 
manner and respond to the Services' rapid change in force structure and 
equipping requirements related to Service equipping strategies and 
modernization goals?
    General Stevenson. The Army monitors organic maintenance 
facilities' performance, capabilities and infrastructure at both the 
Headquarters Army Materiel Command (HQAMC) and Headquarters Department 
of the Army (HQDA) levels. This is an ongoing process that occurs and 
is integrated within the Army's overall Industrial Base management 
process. The following are examples of forums used:

         HQAMC conducts weekly production reviews that provide a 
        complete overview of the health of the OIB to include 
        financial, productivity, safety and workload execution.
         HQDA conducts a quarterly Depot Maintenance Corporate Board 
        that provides strategic guidance and direction for the Army's 
        depot maintenance efforts and ensures that the depot 
        maintenance enterprise complies with all Army policies, 
        regulations, and guidance.
         HQDA Capability Integrated Process Teams that are chartered to 
        strengthen and resolve policy issues, resolve core capability 
        and workload issues and ensure Army OIB stakeholders are 
        informed and implement the core depot process correctly.

    The Army Working Capital Fund Capital Investment Strategy (CIS) is 
also a key enabler to improving the effectiveness and efficiency of our 
industrial base facilities. CIS recommends investment in the depot and 
arsenal infrastructure, ensuring facilities maintain technological 
capability and currency. In fiscal year 2010, the Army invested $167 
million in depots and arsenal projects; an additional $155 million is 
programmed for fiscal year 2011 and fiscal year 2012.
    Future planning incorporates the experience gained in the Reset of 
equipment redeployed from Iraq and Afghanistan. This planning is 
informing current and future investments in the infrastructure and the 
workforce. The Army is committed to a modernized industrial base 
infrastructure that is resourced to sustain current and future core 
capability requirements.
    General Panter. The depots have a strategic plan in place to ensure 
they have the capability and capacity to execute current and future 
workloads. This includes 5-year and 20-year plans for infrastructure 
considerations for industrial facilities in order to facilitate mid and 
long-term workload forecasts. The Capital Investment Program (CIP) 
addresses planning, budgeting, procurement, and management-in-use for 
all capital assets. CIP uses the Strategic Plan to reinvest and develop 
projects for new equipment, minor construction and IT programs to meet 
the needs of our operating forces. To maintain skills and capabilities, 
the depot teams, along with civilian counterparts and academia, ensure 
the depots have the skills and capabilities for the 21st century. The 
Strategic Plan along with the 5-year plan is a fluid document. The 
depots routinely analyze the workload requirements for the current year 
and the next 2 fiscal years to determine the skill sets and quantities 
of each specialized skill set needed to execute the scheduled workload. 
This analysis is conducted twice annually, and each time a major change 
in workload occurs.
    General Reno. The Air Force reviews core capabilities every 2 years 
to determine if the correct skills and capabilities exist within our 
organic depots to support core requirements. Force structure is 
continuously reviewed to ensure the correct skills are at the depots 
and adjusted to funds available for depot maintenance and repair 
efforts, per 10 U.S.C., Sec. 2472.
    Admiral Burke. The Navy ``resets in stride'' after each deployment. 
Thus, a significant upward trend in workload at the conclusion of 
operations is not expected. However, Navy does perform core analysis 
biennially, in accordance with DOD instruction, to ensure that we have 
ready and controlled maintenance resources available when needed. Navy 
also has a well-established, rigorous, model-based process for 
determining maintenance requirements and associated /capability 
required to accomplish those requirements.
    Maritime: Ship and submarine class maintenance requirements are 
continuously updated, based on current material condition and 
maintenance issues, thereby capturing any changes in ship maintenance 
resulting from changes in operational tempo. Naval Shipyard capacity 
and capability, including workforce, tools, equipment, parts, and 
infrastructure capacity, are sized to accomplish the maintenance 
requirements of assigned ships and submarines, as part of the annual 
programming and budgeting process.
    Aviation: We will continue to induct aircraft for scheduled 
maintenance events, based on fixed period end dates which allow us to 
budget, plan, and execute without having to establish a stand-alone 
``reset'' program. The engine and component Depot work is driven by 
flight hours and environmental exposure. These areas have seen a slight 
(less than 7 percent overall) increase in workload since the beginning 
of operations. This workload has been absorbed by the normal Depot 
workforce through overtime or augmentation by contractor support; both 
of which are temporary and can be returned to normal operations in a 
short timeframe.

    17. Senator McCaskill. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, what 
were the results of those reviews?
    General Stevenson. In accordance with the Army's industrial base 
management process, the Army assesses, prioritizes and funds the 
necessary changes needed to address any noted deficiencies and/or 
shortfalls. For example, since fiscal year 2010 the Army has 
established a Core depot capability for the OH-58 Kiowa Warrior at 
Corpus Christi Army Depot (CCAD), the Stryker family of vehicles at 
Anniston Army Depot (ANAD), the Bradley Fighting Vehicle A3 
Configuration at Red River Army Depot (RRAD) and the M88A1 and M88A2 at 
ANAD.
    The Army Materiel Command has also developed a 1-n list of all 
required capital improvements across various appropriation types to 
include Military Construction, Army (MCA), Army Working Capital Fund 
(AWCF) and Procurement Army (PA). This prioritized list identifies all 
of the projects in categories addressing issues related to Quality Work 
Environment, Safety, Security, Mission and Production. As a result, the 
Tier 1 projects have been funded for all AWCF CIP and PAA funded work. 
The Army continues to prioritize the MCA funded projects based on 
criticality and need.
    We recently laid out an industrial base capability portfolio review 
for the Vice Chief of Staff of the Army that identified the risk 
associated with our capital improvement process and provided 
recommendations to minimize risk.
    General Panter. These reviews have resulted in new civilian 
partnerships which have decreased turnaround time to our customers. 
These reviews also allowed the depots to increase/decrease manpower in 
specific skill sets and modernize equipment to match/support the 
planned workload. Partnerships with local academia expanded the skill 
sets needed and refined equipment planning needed to support new assets 
brought in by our customers. Lastly, key Capital Investments have 
allowed us to reinvest in our facilities to better meet the needs of 
our operating forces.
    General Reno. The results of the core capability reviews helped the 
Air Force prioritize the 6 percent investment in our depot 
infrastructure as required by 10 U.S.C. Sec. 2476. The reviews were 
also major contributors to the Depot Source of Repair decisions used to 
determine organic and contact sustainment.
    Admiral Burke. Navy's latest core capabilities determination report 
continues to reflect a stable core workload. This aligns with the 
Navy's overall maintenance strategy to reset in stride. Maintenance 
decisions are driven by class maintenance plans and schedules to 
achieve ship and aircraft expected service life.

    18. Senator McCaskill. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, what 
types of employees (permanent, temporary, contractor) currently make up 
the depot workforce?
    General Stevenson. Depots hire a combination of permanent, 
temporary, and contractor personnel to make up the depot workforce.
    Depots align their permanent direct labor workforce to meet core 
skill requirements. Temporary and contractual employees are added to 
offset the surge requirements which cause the spike in workload as a 
result of the war efforts.
    General Panter.

               Marine Depot Maintenance Command (Albany):
Permanent Civilians........................................          789
Temporary Civilians........................................           11
Term Civilians.............................................          497
                                                            ------------
  Total Civilians..........................................        1,297
                                                            ------------
Contractors................................................          737
                                                            ------------
  Total....................................................        2,034
 


               Marine Depot Maintenance Command (Barstow):
Permanent Civilians........................................          854
Temporary Civilians........................................            2
Term Civilians.............................................          213
                                                            ------------
  Total Civilians..........................................        1,069
                                                            ------------
Contractors................................................          203
                                                            ------------
  Total....................................................        1,272
 

    General Reno. There are 24,694 Federal DOD civilian employees, 56 
temporary workers, and 1,021 depot onsite contract augmentees as part 
of the Air Force depot maintenance workforce. These are the total 
numbers from the three Air Force depots; Warner Robins-Air Logistics 
Center, Robins Air Force Base, GA; Oklahoma City-Air Logistics Center, 
Tinker Air Force Base, OK; and Ogden-Air Logistics Center, Hill Air 
Force Base, UT.
    Admiral Burke.

------------------------------------------------------------------------
                FRC                   Military    Civilian   Contractors
------------------------------------------------------------------------
FRCSE..............................          33       3,084          367
FRCSW..............................          38       2,547          694
FRCE...............................          42       3,293          221
                                    ------------------------------------
  Totals...........................         113       8,924       1,282
------------------------------------------------------------------------
TOTAL OF ALL: 10,319
The above data is a snapshot of on board personnel as of 6/9/2011.
  Totals for Military and Civilians obtained from Monthly Muster report
  and the ``1532'' report for civilians.


    19. Senator McCaskill. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, how 
will the depots manage this mix of workers as current operations draw 
down?
    General Stevenson. The combination of temporary and contract 
employees allows our depot workforce management to remain flexible and 
responsive to meet the Nation's requirements through working multiple-
shifts, overtime and the additional hiring of a temporary workforce. 
Depots can quickly adjust the temporary workforce to the actual 
workload and avoids unnecessary turbulence in the permanent workforce. 
This flexibility eliminates further risk of future lay-offs, 
inefficiencies and increased cost of depot operations.
    General Panter. The Marine Corps will drawdown contractors first, 
followed by temporary and term workers. In the out years, Marine Corps 
Logistics Command is planning to maintain their permanent workforce at 
85 percent of projection, filling 15 percent with contractors in order 
to provide flexibility and the ability to acquire unique skill sets 
without exceeding the size and cost of the permanent workforce.
    General Reno. Air Force Materiel Command determines the amount of 
depot workforce required to perform the anticipated work as part of 
their planning process on an annual basis. They monitor and manage the 
workforce during the year of execution to deal with planning variances. 
If less work is planned, the workforce will be adjusted. Reducing 
civilian overtime work hours represents the most responsive reduction 
in capability that can be accomplished. Next would be to reduce the 
number of depot contract workers and temporary workforce employees. 
Additionally there are a number of management tools that the Air Force 
could employ to adjust the permanent workforce including normal 
attrition, the Volunteer Early Retirement Authority or Volunteer 
Separation Incentive Payment, or reduction-in-force following the 
appropriate approval processes.
    Admiral Burke. Navy expects that operations for ships and aircraft 
will not drop significantly as ground forces are reduced in CENTCOM. 
Therefore, Navy does not anticipate a large decrease in depot 
maintenance hours in its depots. Through long-range planning efforts, 
Navy will forecast the changes with sufficient lead time to manage the 
workforce through normal workforce management practices.

    20. Senator McCaskill. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, how do 
the Services ensure that the organic depot maintenance facilities are 
resetting the right equipment at the right time for the warfighters, 
given the challenges the Services face in maintaining visibility over 
equipment assets at any given time?
    General Stevenson. The Army has developed a requirements generation 
process that identifies equipment that will require repair or 
replacement upon completion of deployed operations. The Army's process 
identifies Reset requirements 18 months before the beginning of the 
fiscal year the equipment is expected to return. Requirements are 
reviewed and realigned prior to execution based on actual operational 
conditions and specific types and density of returning equipment. This 
has been successful formula for our Reset program but is always subject 
to change due to operational decisions that impact the return of 
equipment from the CENTCOM AOR.
    Additionally, the Army utilizes a coordinated staff process that 
integrates Retrograde, Reset, and Redistribute (R3) to ensure equipment 
is repaired and returned to units in support of their next train-up and 
deployment cycle. We have visibility of equipment shortages and 
synchronize equipment production (acquisition and depot repair) and 
transfers to ensure that industrial base is resetting or providing the 
right equipment at the right time to warfighters to meet their ARFORGEN 
requirements.
    General Panter. In support of the warfighter, each year the Marine 
Corps conducts a deliberate planning process to identify, validate, and 
set requirements for our depot maintenance program as part of our 
Enterprise Lifecycle Maintenance Planning (ELMP) process. All major 
commands within the Marine Corps participate in this planning process. 
Each weapon system that has a designated depot maintenance strategy 
receives an in-depth analysis to ensure our depot maintenance 
requirements are aligned with each weapon system's lifecycle management 
strategy and the operational requirements of the Marine Corps. Through 
the ELMP process, the Marine Corps continually seeks to synchronize our 
reset efforts to effectively and efficiently prepare for follow-on 
combat operations.
    Equipment accountability and visibility are always major 
challenges, particularly in a combat environment. Throughout the entire 
period that the Marine Corps has been engaged in OCOs, we have 
encountered accountability and visibility challenges. To meet these 
challenges, we have issued updated accountability policy from our 
headquarters; employed our Field Supply and Maintenance Analysis Office 
(FSMAO) in regularly inspecting and analyzing home station and deployed 
unit supply and maintenance accounts; used advanced MAGTF Logistics 
Support Systems to meticulously track and account for our equipment; 
and initiated fielding of our Global Combat Support System-Marine 
Corps, the system that will become the Corps's chief Enterprise 
Resource Planning (ERP) tool and accounting system. All of these 
techniques, coupled with our ELMP process and continuous engagement 
with deployed units, enable us to mitigate visibility challenges and 
reset the right equipment at the right time.
    General Reno. The organic depot maintenance requirements for 
aircraft and engines are very structured and calendar-based or 
operating hour-based. For this reason, the depot maintenance of these 
systems has been ongoing. The aircraft or engines return from the Area 
of Responsibility to the depot when the maintenance schedule dictates. 
This process ensures the right assets have the required depot 
maintenance accomplished at the right time. The Air Force's scheduled 
depot maintenance process ensures we have visibility of our assets.
    Admiral Burke. Naval Aviation airframe depot maintenance is 
calendar based to ensure that the force is continuously maintained and 
reset in stride. The Fleet Readiness Centers (FRCs) perform the work 
according to a master induction schedule developed by Naval Air Systems 
Command in close coordination with the Fleet. The Resource Allocation 
Management Program (RAMP) is used to track each aircraft and all 
upcoming maintenance requirements to determine what needs to be placed 
in work. This planning directs the depots to perform the right work at 
the right time necessary to maintain future readiness levels. The FRCs 
continually update the maintenance status of work. In Naval Aviation, 
engine depot maintenance is demand driven based upon flight hours and 
engine reliability. The Fleet monitors engine inventories and directs 
engines that require depot level repair to the appropriate repair 
facility to ensure engine pool levels are maintained at CNO approved 
readiness levels.
    The Navy Expeditionary Combat Enterprise maintains visibility of 
construction engineering support equipment through the Construction, 
Automotive and Specialized Equipment Management Information System. 
Combatant and small craft visibility is maintained through Naval Sea 
Systems Command Craft and Boat Support System. These management systems 
track data and location of all rolling stock and boats from cradle to 
grave, whether equipment is undergoing refurbishment at a depot, 
intermediate facility, or the unit level. Further, these systems 
maintain accountability of equipment in theater supporting the war 
effort. Resetting the right equipment at the right time is accomplished 
through condition based inspections, evaluation of maintenance records, 
and adhering to established maintenance plans.

    21. Senator McCaskill. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, do the 
depots have assets onsite that they do not have the funds to induct 
into maintenance? If so, will the fiscal year 2012 budget enable them 
to induct this workload?
    General Stevenson. Army Depots do not have any critical assets 
onsite that require funding for induction. The Army resourcing 
prioritization effort ensures that the most critical requirements are 
addressed to support the warfighter's requirements.
    Fiscal year 2012 budget requests address the Army's requirements.
    General Panter. No. Currently, all onsite assets scheduled for 
induction into maintenance are funded.
    General Reno. There have been no assets onsite that we have not 
inducted due to lack of funds. The Air Force has sufficient funds to 
induct workload into maintenance for fiscal year 2011; however, there 
is a need to realign funding between two budget activities to cover 
higher than anticipated maintenance requirements in our mobility 
portfolio. Additionally, the Air Logistics Centers just completed a 
long range workload review (fiscal year 2012 and fiscal year 2013) and 
no funding disconnects were identified.
    Admiral Burke. The Aircraft Depot Maintenance account is expected 
to end fiscal year 2011 with zero unfunded airframe and engine 
maintenance assets/requirements at the depots. Additionally, the fiscal 
year 2012 budget is properly resourced with baseline and anticipated 
OCOs funding to meet required scheduled maintenance inductions.

    22. Senator McCaskill. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, what 
impact will the uncertainty of future increased combat operations, 
particularly in Afghanistan, have on future maintenance budgets?
    General Stevenson. We expect minimal impact on maintenance budget 
requests due to the uncertainty of future increased combat operations 
particularly in Afghanistan. We expect operations, particularly in 
Afghanistan, to decrease in the future. However, if there is an 
unforeseen increase in combat operations, there will be a corresponding 
increase in our future maintenance budget. This increase will be 
reflected in all of our OCO requirements--Sub-Activity Group (SAG) 135, 
which supports Left Behind Equipment (LBE) and in-theater repair and 
SAG 137, which supports the Reset of equipment upon its return.
    As operational decisions are made, the Army adjusts its request for 
funding in subsequent submissions accordingly, up or down. For example, 
operational uncertainty may cause an increase in forces and subsequent 
increase in future Reset requirements or delay equipment available for 
Reset, thereby decreasing requirements in a given year.
    Our OCO submission considers the equipment that will be left 
behind, equipment that will deploy and subsequently return, the current 
operational environment, equipping concepts, Operational Tempo 
(OPTEMPO) and equipment that will be repaired or replaced. This process 
has been effective in identifying our requirement for the last 9 years 
in spite of the uncertainty related to combat operations.
    Future operational uncertainty along with the incremental cost of 
war will require the Army to submit supplemental funding requests for 
2-3 years after hostilities end to ensure equipment readiness is 
restored for all equipment that returns from operations in Afghanistan 
and Iraq.
    General Panter. Our goal is to properly align our depot maintenance 
requirements with the current and planned equipment life cycle 
management strategies and projected combat operations. As we balance 
the depot maintenance requirements in support of current combat 
operations with the requirements planning for future combat operations, 
the uncertainty of combat operations and extent of equipment damage in 
Afghanistan will continue to impact the accuracy and completeness of 
our maintenance budgets. Not knowing when the equipment will return 
makes budget submissions problematic.
    This reduced budget accuracy and completeness results in a 
potential disparity between requested funds and executed funds. We 
experienced this in the recent past (e.g., plan for retrograde of 
equipment in fiscal year 2010 did not occur).
    Additionally, we anticipate depot maintenance work will continue at 
least 2 years after the war and funding will be needed.
    General Reno. The uncertainty of future combat operations becomes 
problematic for depot workload during execution years. Depot budgets 
are built 2 years in advance based on projected, funded workloads as 
determined by customer requirements. For example, aircraft Programmed 
Depot Maintenance (PDM) is calendar driven. However, there may be 
increased corrosion or wear discovered during PDMs due to combat 
missions. These unknown requirements, which are not budgeted for, are 
absorbed by the AFWCF and included in future year rates. This process 
drives budget increases after combat operations have ceased until the 
involved systems have cycled through PDM.
    Admiral Burke. The Navy is forward deployed and constantly prepared 
for a range of contingency operations that may arise. While it is 
impossible to speculate the fiscal impact of any future contingency 
operation, small or short duration operations should have little impact 
on future maintenance budgets. However, larger or longer duration 
operations would require increasing the maintenance budget with 
increased baseline funding or a supplemental appropriation.

                            ARMY RESET PLANS

    23. Senator McCaskill. Lieutenant General Stevenson, to what extent 
has the Army developed a comprehensive reset strategic plan to 
determine how it intends to address current and future reset 
requirements amid declining reset funds, increased repair costs at 
organic depot maintenance facilities, costs factors for in-theater 
maintenance equipment that will remain in Afghanistan, and the 
requirements needed to fund the repair of this equipment under the base 
budget along with other competing repair requirements?
    General Stevenson. The Army submits an annual request for OCO 
funds. The OCO submission reflects our best projection of funds 
necessary for current Reset requirements that will sustain acceptable 
readiness levels across the Army, while taking into consideration the 
dynamics outlined in your question--declining funds, repair costs at 
depot and in theater and subsequent transition of equipment to 
sustainment. Analysis of future Reset requirements is conducted to 
determine the Army's total Reset liability based on equipment densities 
in the theater of operations and is used as a management tool to 
develop future OCO requests.
    Our OCO requests also cover the maintenance and sustainment of 
equipment in theater, which consists of equipment that deployed with a 
unit and Theater Provided Equipment (TPE).
    The level of OCO support the Army has received fully funds 
currently projected Reset requirements. As the drawdown in Iraq comes 
to a close and operational conditions change on the ground, the Army's 
Reset requirements will also decline. The Army reviews its Reset 
requirements during mid-fiscal year to leverage and redirect OCO 
funding across Reset requirements. This comprehensive review enables 
the Army to make maximum use of the Reset OCO funds provided to meet 
evolving operational requirements.
    Our depots are operating at peak levels of production and 
efficiency; levels which have not been seen since the Vietnam era. As a 
result, our depot rates have remained stable in most cases. The 
productivity of our depots has allowed us to conduct analyses based on 
Repair Cycle Times and the type(s)/densities of equipment that remain 
in theater and determine that OCO funds will be required to reset our 
equipment for 2-3 years after the cessation of hostilities.

    24. Senator McCaskill. Lieutenant General Stevenson, to what extent 
has the Army assessed the costs to reset equipment that remains in 
theater, the type of reset repair capability needed to repair this 
equipment upon return, and how this equipment will address unit 
shortfalls and readiness goals, ARFORGEN, force modernization for both 
Active and Reserve units, and modularity priorities?
    General Stevenson. The Army assesses the annual cost to Reset 
equipment remaining in-theater based on the size of equipment pools in 
Afghanistan, troop levels, and the operational tempo. The estimate 
considers the type of reset repair capability needed to Reset the 
equipment upon its return, the expected condition of the equipment upon 
its return, and the deployment duration and use of the equipment. The 
Army has adequate capacity at our installations and depots to repair 
the equipment within 2-3 years after the cessation of hostilities.
    The output from our Reset process is prioritized to address unit 
equipment-on-hand (EOH) shortfalls to meet ARFORGEN readiness goals. 
Reset is also synchronized with the Army's equipment modernization 
strategies to ensure that we are upgrading equipment to meet the Army's 
overall modernization goals.
    The Army has made significant strides, thanks to the support of 
Congress, to meet ARFORGEN readiness requirements. Current Army 
estimates indicate that EOH levels will achieve 92 percent for the 
aggregate Army (Active component - 93 percent; Army National Guard - 92 
percent; and U.S. Army Reserves 90 percent) by the end of October 2012.

    25. Senator McCaskill. Lieutenant General Stevenson, has the Army 
conducted any recent studies or reviews on the costs to fund and 
maintain reset beyond the end of OCO, and if so, what were the results 
or lessons learned from those studies or reviews?
    General Stevenson. In 2010, the Army participated in an OSD study 
to forecast Equipment Reset requirements. The results of that study 
indicated the Army will continue to need OCO funding as long as forces 
are in conflict plus 2-3 years to ensure all equipment is Reset upon 
return. The Army learned three lessons that have influenced our OCO 
funds management: (1) There is a significant amount of difficulty 
associated with projecting future Reset requirements given the unknowns 
of war; (2) A degree of flexibility is needed given our ability to 
project equipment conditions and Reset requirements 18 months prior to 
equipment return from theater in light of unforeseeable operational 
demands; and (3) Base programs are not adequately resourced to support 
the incremental costs of war.
    There is a direct correlation between the time of submission and 
the accuracy of our budget submissions. The greater the time between 
our submission and actual execution the less accuracy in our budget 
requests. Conversely, the shorter the time between our budget 
submission and it's execution the greater the accuracy of our budget 
requests. As a result, the Army periodically reviews and updates it 
submissions and adjusts its Reset program throughout the year to ensure 
that requirements are aligned with available resources.
    If OCO funding ends before hostilities then the Army would be 
forced to take risks in the scope of Reset efforts and in the readiness 
of equipment in order to balance the incremental costs of war with its 
peacetime requirements.

                    ARMY UNIT EQUIPMENT REQUIREMENTS

    26. Senator McCaskill. Lieutenant General Stevenson, as the pace of 
overseas operations declines, the Army is resetting equipment and 
rebuilding the readiness of its forces. Two documents--the Modification 
Tables of Organization and Equipment (MTOE), and the Table of 
Distribution and Allowances (TDA)--provide the basic personnel and 
equipment requirements against which on-hand personnel and equipment 
are measured in determining unit readiness. Given that during our 
operations in Iraq and Afghanistan, U.S. Central Command (CENTCOM) 
repeatedly requested force capabilities that did not align well with 
Army MTOEs. What actions is the Army taking to review and update unit 
requirements so that they better reflect the needs of the combatant 
commands (COCOM)?
    General Stevenson. The Table of Organization and Equipment (TOE) is 
a doctrinally based organizational model that establishes the 
requirements baseline for our modular formations. The Modified Table of 
Organization and Equipment (MTOE) allocates Army equipment and 
personnel to address TOE requirements and serves to synchronize the 
delivery of manning and equipping solutions in support of ARFORGEN. The 
Army annually reviews MTOEs to ensure they adapt to reflect lessons 
learned from war and provide the required capabilities to support our 
soldiers in combat. The Army recently initiated an assessment of Army 
MTOEs to review those factors causing low equipment on-hand readiness 
reporting. This assessment will identify other unit-owned equipment 
that may be recommended for inclusion on the MTOE or Consolidated Table 
of Allowance (CTA) as a new capability or as an Authorized Substitute 
or In-Lieu-Of item for a currently documented capability, and recommend 
removal of equipment identified as obsolete. An Army Staff review team 
is conducting assessments with unit leaders at Army unit locations and 
will provide a final report and recommendations to the Army leadership 
in November 2012.

    27. Senator McCaskill. Lieutenant General Stevenson, given that 
billions of dollars in equipment reset and reconstitution funds will be 
needed to rebuild the readiness of our forces, it is important that we 
sharply scrub our unit requirements and that this be completed 
sufficiently ahead of the budget process so that we use our funds 
smartly. To what extent will you be able to complete your update of 
unit equipment requirement documents (MTOEs and TDAs) in sufficient 
time to be considered in the development of the fiscal year 2013 budget 
request?
    General Stevenson. The Army reviews its MTOEs and TDAs at some 
level every year. Those routine processes are ongoing. In addition, at 
the request of the Chief of Staff, Army and Vice Chief of Staff, Army, 
an Army Staff review team is conducting MTOE assessments on site at 
select Army installations and will provide a final report to Army 
leadership in November 2012. In the interim, the results of these 
assessments have already resulted in adjustments to Army MTOEs. 
Finally, the Army is vigorously executing its ``Line Item Number (LIN) 
Validation'' process, which assesses individual LINs and recommends 
retention or removal from MTOEs. For fiscal year 2011, LIN Validation 
has already resulted in the removal of approximately 500 LINs from Army 
MTOEs for a wide variety of reasons. Likewise, action is being taken to 
remove equipment identified as obsolete. All of these actions result in 
adjusted MTOEs and TDAs for Army units which affect the fiscal year 
2013 budget.

                  AIRCRAFT CONDITION-BASED MAINTENANCE

    28. Senator McCaskill. Lieutenant General Stevenson, I'm very 
concerned with aviation readiness in Afghanistan, as our helicopters 
are under high demand and flying well beyond their anticipated flying 
hours. The Army is currently engaged in an effort to install digital 
source collectors (DSC) on its manned aircraft (AH-64 A, AH64 D, CH-47 
D, CH-47 F, MH-47 G, UH-60 A, UH-60 L, UH-60 M, MH-60 L, MH-6, and OH-
58 D) in order to conduct Condition-Based Maintenance (CBM). The DSCs 
are being installed on all new production utilizing procurement 
appropriations. However, the funding of the transmission, storage, and 
analysis of the data is minimally funded and heavily leveraged with OCO 
funding at this point. An Army Acquisition, Logistics, and Technology 
(AT&L) report released this month cited; ``there is clear evidence that 
CBM+ technologies and procedures have avoided at least three 
catastrophic Class A accidents that would have resulted in the total 
loss of the aircraft.'' What are the Army's plans to fit all manned 
aircraft with DSCs by the end of the fiscal year 2013 (October 1, 2013) 
when the Product Improvement Pilot Program (PIPP) is set to sunset?
    General Stevenson. By the end of fiscal year 2013 we will have 
completed installing digital source collectors on 89 percent of the 
manned aviation fleet (3180 aircraft of the a 3572 fleet) leveraging 
the PIPP authorization. Completion of the entire fleet will not occur 
before fiscal year 2019, using procurement appropriations, due to a 
combination of fielding schedules and the materiel solution that is 
still in development for the CH-47F aircraft.

    29. Senator McCaskill. Lieutenant General Stevenson, will the Army 
be requesting an extension of the PIPP beyond fiscal year 2013? If so, 
why?
    General Stevenson. No, the Army has no plans to request an 
extension to the current PIPP authority. The Army has taken advantage 
of the current authority and is in the process of completing an 
assessment of the Aviation Pilot Program. As requested by the current 
legislation the Army will provide a report and recommendation to 
Congress in fiscal year 2012. At that time the Army will provide a 
recommendation to discontinue the authority or to make it permanent.

    30. Senator McCaskill. Lieutenant General Stevenson, what are the 
Army's plans to appropriately fund the transmission, storage, and 
analysis of the data that are important to improving maintenance 
efforts, decreasing maintenance and spare part costs, and increasing 
readiness?
    General Stevenson. The Army programs the resources to support 
Condition-Based Maintenance (CBM) functions, such as CBM data storage, 
analysis and transmission, within the normal budget cycle, as part of 
Central Supply Activities (CSA). The fiscal year 2012 President's 
budget request is sufficient to meet our CBM data storage, analysis and 
transmission critical requirements. The long-term strategy for CBM data 
transmission, storage and analysis includes the integration of 
actionable logistics data in a future increment of the Global Combat 
Service Support-Army (GCSS-A). The engineering unique CBM data 
transmission and storage requirements to enable weapon system 
performance analyses are separately funded from the GCSS-A.

    31. Senator McCaskill. Lieutenant General Stevenson, what are the 
outcomes/results of the condition-based maintenance effort thus far in 
terms of readiness, cost-savings, etc.?
    General Stevenson. Army Aviation's outcomes/results of Condition-
Based Maintenance in terms of benefits to date include a 3.8 percent to 
12.4 percent reduction in Non-Mission Capable Maintenance rate, a 5 
percent to 8 percent increase in fleet readiness, and a 1 percent to 4 
percent reduction in Maintenance Test Flight Hours. These results have 
increased our combat power, reduced maintenance cost and have provided 
critical information that avoided catastrophic failures during flight.

    32. Senator McCaskill. Lieutenant General Stevenson, what is the 
overall goal of the CBM effort in the Army?
    General Stevenson. The overall goal of Condition-Based Maintenance-
Plus (CBM+) is to increase combat power by performing maintenance and 
supply functions based upon evidence of need. The four CBM program 
objectives to meet this goal are to decrease the maintenance burden, 
increase platform availability and readiness, enhance safety, and 
reduce Operations and Support costs. This process is enabled by using 
Digital Source Collectors (DSC) that record data such as vibration, 
heat and engine starts, as an indicator of future or impending failure. 
The data collected is used to revise our maintenance processes at the 
field and sustainment levels of maintenance. For example the Black 
Hawk's oil cooler bearing is prescribed to have 1,250 flying hours of 
life. Using CBM monitoring and data, the bearing may remain on the 
aircraft for as long as 3,200 hours, thus reducing unnecessary 
maintenance and replacing parts that still have a useful life.

                        ARMY PREPOSITIONED STOCK

    33. Senator McCaskill. Lieutenant General Stevenson, as contingency 
operations in Iraq decline, the Services have begun reconstituting 
their prepositioned equipment. At the same time, the Services have 
begun to review future requirements for their prepositioned stocks. I 
understand that DOD also intends to include prepositioned stock in some 
of its Department-wide strategy planning, and has a number of 
initiatives underway to improve the mobility system, responsiveness to 
forces, and effectiveness of prepositioned capabilities. Given that 
billions of dollars in equipment reconstitution funds are at stake in 
restoring our preposition stocks, to what extent is DOD working with 
the Services to develop and integrate a Department requirement for 
prepositioned stocks that is based on a Department-wide strategy?
    General Stevenson. Currently TRANSCOM and DLA are co-leading a 
study directed by the Vice Chairman of the Joint Chiefs of Staff, 
titled the Comprehensive Materiel Response Plan (CMRP). The purpose of 
the CMRP is to develop a comprehensive plan for DOD materiel 
positioning and distribution to support the full range of military 
activities and identify opportunities for improvement of the global 
materiel, storage, transportation, and distribution network. The CMRP 
is leveraging the work completed during other studies, most notably the 
OSD CAPE Global Prepositioned Materiel Capability Study (GPMCS). Along 
with the DOD-wide studies, the Army is also constantly reviewing our 
own prepositioning strategy to identify efficiencies and improve 
capabilities.

    34. Senator McCaskill. Lieutenant General Stevenson, to what extent 
is the Army assessing which of the many pieces of nonstandard equipment 
that were purchased to meet urgent warfighters' needs should be added 
to the prepositioned stock sets?
    General Stevenson. To a great extent. All non-standard equipment 
the Army has procured is being systematically reviewed as part of the 
Army's Capabilities Development for Rapid Transition (CDRT) process. 
One of the possible outcomes for materiel going thru CDRT is to be 
selected for stockage in APS. Probably the best example of nonstandard 
equipment being selected for APS is the MRAP--in fact, the majority of 
the total MRAP vehicle population will be positioned into global APS 
sets. Other non-standard equipment that has been identified for 
sourcing to APS includes: Single Channel Anti-Jam Man-Portable (SCAMP) 
terminals, Counter Radio Electronic Warfare 2 (CREW2) systems with Duke 
V2 and CREW Vehicle Receiver Jammer (CVRJ), and various commercial off-
the-shelf (COTS) items for U.S. Army North.

    35. Senator McCaskill. Lieutenant General Stevenson, what 
additional reset and sustainment resources will be needed to add these 
stocks?
    General Stevenson. The only resources required at this time is the 
continuation of the OCOs reconstitution funding necessary to reset 
equipment that will fill the remaining APS sets in accordance with the 
approved 2015 Strategy.

    36. Senator McCaskill. Lieutenant General Stevenson, are these new 
requirements accounted for in the Army's Prepostioned Stock Strategy 
(PSS) 2015?
    General Stevenson. Currently, new requirements in our APS sets 
include Mine Resistant Ambush Protection (MRAP) vehicles, Long-Term 
Armor Strategy (LTAS) Tactical Wheeled Vehicles, and Counter Measure 
Electronic Warfare equipment. The Army continues to modernize its APS 
stocks in accordance with Modified Table of Organization and Equipment 
(MTOE) authorization changes and Army priorities. APS modernization 
changes have been planned for and programmed as requirements into the 
Army's Program Objective Memorandum (POM) 13-17.

    37. Senator McCaskill. Lieutenant General Stevenson, the Army's 
plans to meet its PPS by reconstituting its prepositioned stocks around 
the world by 2015. However, most of the procurement funding and about 
half of the operations and maintenance (O&M) funding for prepositioned 
stocks is programmed for fiscal year 2014, after most of the equipment 
sets are scheduled for reconstitution. How is the Army going to meet 
its 2015 plan without securing funding sooner?
    General Stevenson. The Army is counting on the reset of theater 
retrograded equipment from Operation New Dawn (OND) and OEF in order to 
fill its APS strategic requirements. As for Operations and Maintenance 
(O&M) funds, most of the equipment will come to our APS inventory from 
depot stocks or procurement already purchased using previous year's OPA 
funding. Warehoused APS equipment will require minimal Care of Supplies 
in Storage (COSIS) for the first 3 years of storage. The exception 
being equipment stored outside in Southwest Asia (APS-5). We have 
adequately programmed for the O&M funding in Program Objective 
Memorandum (POM) 13-17 to support the COSIS requirements of our planned 
2015 APS sets.

                  ARMY REQUIREMENTS OVERSIGHT COUNCIL

    38. Senator McCaskill. Lieutenant General Stevenson, you 
participate in the Army Requirements Oversight Council (AROC), the 
Configuration Steering Boards (CSB), and the Capability Portfolio 
Reviews (CPR). With the goal of reducing long-term life-cycle costs and 
improving sustainment efforts, are you satisfied with your position and 
feel you have enough of a say?
    General Stevenson. Yes, I am satisfied that I have the opportunity 
to advise and influence the sustainment efforts in this process through 
the various forums. The G-4 plays a critical role in identifying and 
validating sustainment requirements, and suggests trade-offs that 
should be considered in reducing life-cycle costs and/or improving 
sustainment efforts.
    The Army uses the results of the Army Cost Position for AROC, CSB, 
and CPR Executive Leader decision support venues, and the G-4 actively 
pursues opportunities to influence those Sustainment-related portions 
of the Army Cost Positions. By energetically leading a Sustainment and 
Operations & Maintenance cost management culture, The Army sets and 
enforces Total Ownership Cost management standards, using Sustainment 
costs to integrate with all OMA Stakeholders.

                       NAVAL SHIPYARD MAINTENANCE

    39. Senator McCaskill. Vice Admiral Burke, to what extent has OCO 
increased the Navy's operational tempo and associated maintenance for 
readiness of its ships?
    Admiral Burke. Fiscal year 2010 Global Force Management 
commitments, including the operational requirements in support of OIF/
OND and OEF, resulted in a high global OPTEMPO.
    Ship maintenance requirements are based on ship class maintenance 
plans which are continuously updated based on ship condition and 
current maintenance issues. Although it is difficult to relate an 
individual maintenance action to increased OPTEMPO, there is a direct 
relationship between OPTEMPO and wear on rotating equipment and in the 
crew's ability to perform self maintenance.
    Sustainment of the current high level of global commitments exceeds 
available base budget funding and remains dependent upon OCO or similar 
supplemental appropriations.

    40. Senator McCaskill. Vice Admiral Burke, to what extent have the 
Navy's four public shipyards planned for or responded to any increased 
ship maintenance resulting from OCO (in terms of shipyard workforce, 
tools, equipment, parts and infrastructure capacity)?
    Admiral Burke. Ship and submarine class maintenance requirements 
are continuously updated based on current material condition and 
maintenance issues, thereby capturing any increased ship maintenance 
resulting from OCO in the overall requirement. Naval Shipyard capacity 
and capability, including workforce, tools, equipment, parts and 
infrastructure capacity, are sized to accomplish the maintenance 
requirements of assigned ships and submarines as part of the annual 
programming and budgeting process.
    Since the Naval Shipyards are sized to accomplish the full workload 
requirement for assigned ships and submarines, they have fully planned 
to accomplish any increased maintenance resulting from OCO.

    41. Senator McCaskill. Vice Admiral Burke, shipyard officials have 
provided GAO with examples of how degraded infrastructure affected 
efficiency and effectiveness of their workforce and led to increased 
costs stemming from using workarounds, working overtime, or sending 
workers to different shipyards in order to keep their fleet maintenance 
schedules. To what extent are the Navy's four public shipyards' assets 
and workforce currently being utilized, and to what extent have the 
shipyards planned to address any efficiency/productivity issues that 
require improvements to shipyard infrastructure (e.g. constructing new 
or replacement mission critical assets, such as drydocks)?
    Admiral Burke. Naval Shipyard capacity and capability, including 
workforce, tools, equipment, parts and infrastructure capacity, are 
sized to accomplish the maintenance requirements of assigned ships and 
submarines as part of the annual programming and budgeting process.
    Shipyards use the One Shipyard concept to focus on cost, schedule, 
and quality through standardizing processes, sharing resources among 
public shipyards, and partnering with private shipyards to meet their 
resource requirements.
    Shipyard workforce capacity and capability is reviewed monthly, and 
a quarterly review meeting is held to assess and adjust workforce 
needs. To deal with the changes in workload that occur in the year of 
execution, the Navy has several workforce strategies, including the One 
Shipyard concept, the use of the Naval Reserve Force (SURGEMAIN) 
workforce, additional contracting, and the use of overtime to augment 
the Shipyards' capacity
    Infrastructure at the Naval Shipyards is almost fully utilized. For 
instance, in fiscal year 2011, the drydock utilization rate is 94 
percent for the 18 drydocks at the Shipyards. The Navy continues to 
plan and invest to address Naval Shipyard infrastructure efficiency and 
productivity issues using MILCON and O&M Restoration and Modernization 
(RM) investments. U.S.C., title 10, section 2476, requires that the 
Navy invest a minimum of 6 percent of the average of the previous 3 
years of intermediate and depot maintenance revenue into the shipyard 
recapitalization program. The Navy has provided investments of 9.5 
percent, 9.9 percent, and 15.6 percent in fiscal year 2008 through 
fiscal year 2010, respectively, and is planning to invest 9.9 percent 
in fiscal year 2011.
    The buildings and facilities of the four Naval Shipyards are 
primarily configured for WWII-era ship construction vice modern ship 
depot maintenance repair processes for nuclear ships and submarines. 
While ship maintenance processes have improved, the layout of the 
shipyards limits improvements on cost and schedule performance, and 
thus, improvements to operational availability. The continual 
improvement in ship maintenance processes, evolving maintenance 
strategies, longer ship operating cycles, and the advent of future 
platforms, presents opportunities to recapitalize, reconfigure, and 
modernize the Naval Shipyards to support future workload and gain 
efficiency.

    42. Senator McCaskill. Vice Admiral Burke, to what extent has the 
Navy planned for a potential change in its fleet's overall composition 
or size (i.e., less growth than currently projected), and what are the 
associated impacts on workforce utilization and total infrastructure 
capacity across its four public shipyards?
    Admiral Burke. The Navy has not developed contingency plans for 
alternate force structures and remains committed to building and 
sustaining the force structure required to support the Maritime 
Strategy. If fiscal constraints require force structure changes, the 
shipyards' workforce and infrastructure would also be adjusted 
consistent with the resulting maintenance requirements.

           ISSUES WITH AIR FORCE AND DEFENSE LOGISTICS AGENCY

    43. Senator McCaskill. Lieutenant General Reno, the Air Force 
Logistics Centers (ALCs) have expressed frustration over the Defense 
Logistics Agency's (DLA) inability to deliver some parts on time to the 
ALCs. DLA achieves a 94 percent fill rate for spare parts; however, 
that remaining 6 percent can occasionally ground an aircraft. We are 
told that some parts can take well over a year to arrive at the ALCs 
and DLA will not order parts until the aircraft reaches an ALC. As a 
result, the Air Force is sometimes forced to cannibalize a part off of 
a newly arrived aircraft to repair another aircraft that is in the 
hanger. What is your view of DLA's track record on delivering parts to 
the Air Force's ALCs?
    General Reno. DLA does do a good job on the majority of the orders 
and there are opportunities to improve parts support to the Air 
Logistics Centers to decrease cannibalizations and reduce aircraft 
delivery delays to the operational customer. DLA orders parts based on 
current inventory posture, any outstanding sales orders, and the 
forecasted demand. However, improvements in collaboration and alignment 
of supportability measurements will help close gaps.
    For example, the Air Force measures support at the hands of the 
mechanic. Does the mechanic get a part when they ask for it? The Air 
Force calls this Issue Effectiveness. If the part is not available, how 
long do they wait? The Air Force calls this Customer Wait Time. By 
contrast, DLA measures how often a part releases from network storage 
sites, including material released immediately to customers. However, 
this measure is broad and includes material from all classes of supply 
not just material used for repair. DLA calls this Material 
Availability, which does not capture the transportation time between 
release and delivery to the mechanic.
    These dissimilar metrics highlight some institutional differences 
that the Air Force and DLA are working to understand so we can 
collectively improve support to the warfighter. The Air Force is not 
dissatisfied with a 94 percent fill rate, but better collaboration will 
improve supportability at the ALCs. Engagements such as Air Force/DLA 
Service Day, Air Force Materiel Command/DLA Summit, and continuous 
Crosstalk Forums and Integrated Process Improvement Teams are all tools 
the Air Force and DLA leverage to constantly evaluate and improve 
performance levels.

    44. Senator McCaskill. Lieutenant General Reno, do you think that 
significant changes are needed?
    General Reno. Yes, we must continue to work closely with DLA to 
make sustainable improvements in processes, policies, and procedures to 
improve depot maintenance. First, we need DLA's help to define and 
adopt customer-facing metrics and measure all process, policy, and 
procedural improvement initiatives based on their impact to retail 
customer support. Once we establish those metrics, we must work 
together to define and resource our future requirements. DLA's 
inventory models and supply chain strategies can then be utilized to 
accommodate both high demand (low risk) items and the equally important 
low demand (higher risk) items. This is an important point as depot 
maintenance will sometimes use low-demand, sometimes technically 
obsolete items in their repair operations.
    Finally, given marketplace and vendor uncertainty, we must make a 
concerted effort to synchronize the DLA supply chain with Air Force 
repair operations. In any production environment, we must partner with 
DLA to plan and execute better to keep our demand and supply chains in 
synch. We will continue to partner with DLA on these strategies through 
engagements such as Air Force/DLA Service Day, Air Force Materiel 
Command/DLA Summit, Crosstalk Forums and Integrated Process Improvement 
Teams.

    45. Senator McCaskill. Lieutenant General Reno, one initiative, the 
High Velocity Maintenance (HVM), has shown promise by identifying 
needed parts several months in advance, often while the aircraft is 
still deployed. What is your view of the HVM program and what is the 
Air Force plan, if any, to continue or expand HVM?
    General Reno. Improving aircraft availability is a constant 
objective for the Air Force. The HVM concept will improve sustainment 
predictability and our objectives are new policy and new metrics that 
will drive better behaviors. To accomplish this, we are using a phased 
implementation approach with three pilot projects (C-130, B-1, F-22), 
and are offloading best practices to all aircraft as we go. The C-130 
HVM program achieved initial operational capability, as scheduled, in 
March 2011. Based on input from our operational customers, Warner 
Robins Air Logistics Center (ALC), GA, directed that efforts 
concentrate on integrating successful HVM tenets (i.e., known aircraft 
condition, standard work, tools/parts available when needed) across all 
scheduled programmed depot maintenance aircraft. The evidence shows the 
value of the HVM tenets and we are making plans to translate lessons 
learned from the three pilots to the rest of the Air Force Materiel 
Command sustainment community. Due to the outstanding progress, Warner 
Robins ALC, GA accelerated their projected full operational capability 
date from fiscal year 2016 to fiscal year 2012.

    46. Senator McCaskill. Lieutenant General Reno, it is my 
understanding that depots are not included in targets and goals for 
energy efficiency. Why are they exempt?
    General Reno. The Federal mandated goals for energy reduction are 
for building facility energy. Federal facilities can be excluded in 
accordance with the Guidelines Establishing Criteria for Excluding 
Buildings from the Energy Performance Requirements of Section 543 of 
the National Energy Conservation Policy Act as Amended by the Energy 
Policy Act of 2005 (dated January 27, 2006).
    Department of Energy guidance allows and recommends the exclusion 
of process energy that is not influenced by conventional building 
energy conservation measures. While not all facilities on a depot 
installation are excluded, depot buildings impacted by process energy 
can be categorized as excluded structures. To incorporate the Air Force 
vision ``Energy consideration in all that we do,'' the Air Force 
continues to encourage and investigate the reduction of energy for all 
processes, even if a process is excluded from the mandated reduction 
goals.
    Although not mandated by Congress, the Air Force is exploring ways 
to decrease energy used for processes and in maintenance facilities. 
For example, at one paint facility at Robins Air Force Base, GA, 
process improvements yielded a $400,000 per year savings. The Air Force 
is currently developing a task force to look more closely at this 
across the Air Force.
                                 ______
                                 
              Questions Submitted by Senator Kelly Ayotte

                           SHIPYARD WORKLOADS

    47. Senator Ayotte. Vice Admiral Burke, I have a question about the 
Navy's process for determining shipyard assignments for major work. 
Portsmouth Naval Shipyard is conducting the first in class availability 
on the USS Virginia. After this availability is complete, it is my 
understanding that the next Virginia-class submarine availability at 
Portsmouth is not scheduled until fiscal year 2016. The next three 
Virginia-class submarine availabilities are at Pearl Harbor Hawaii, 
even though the first one was conducted at Portsmouth Naval Shipyard 
and resulted in a trained and ready shipyard workforce. In fact, I have 
heard that the workers at Portsmouth are being asked to fly out to 
Hawaii to train the Pearl Harbor workforce. How does the Navy manage 
the flow of work to the shipyards in order to maintain a consistent 
level of effort and a workforce operating at maximum efficiency?
    Admiral Burke. The Navy manages the assignment of submarine depot 
availabilities to one of its four public shipyards by first looking at 
the shipyard closest to a submarine's homeport, to avoid the cost and 
disruption of homeport changes on crew members and their families. If 
the local homeport shipyard is not available, due either to capacity or 
capability (e.g., nuclear refueling, dry-dock size, etc.), then the 
availability is scheduled at a shipyard that has both the capacity and 
capability to execute it.
    The next three Virginia-class availabilities are on submarines 
homeported in Pearl Harbor, HI. Pearl Harbor Naval Shipyard and 
Intermediate Maintenance Facility (PHNSY and IMF) has the capacity and 
has been assigned to execute these availabilities.
    Virginia-class submarines are being homeported in both Groton, CT 
and Pearl Harbor, HI. Consequently, the Navy needs both Portsmouth 
Naval Shipyard (PNSY) and PHNSY and IMF to develop expertise in 
maintaining this submarine class. To maximize shipyard efficiency, the 
Navy shares knowledge and experience between depots, and for that 
reason, PNSY personnel are being assigned to support PHNSY and IMF on 
the next Virginia-class availability. Similarly, PHNSY and IMF 
knowledge and experience from their Virginia-class availabilities will 
be transferred to PNSY prior to Portsmouth's next Virginia-class 
availability.

    48. Senator Ayotte. Vice Admiral Burke, are any Atlantic fleet 
Virginia-class availabilities being done at Pearl? If so, why?
    Admiral Burke. No, the Virginia-class depot availabilities 
scheduled across the FYDP at Pearl Harbor Naval Shipyard and 
Intermediate Maintenance Facility are for Pearl Harbor homeported 
submarines.

    49. Senator Ayotte. Vice Admiral Burke, what, if any, Virginia-
class work is being done at Norfolk Shipyard?
    Admiral Burke. Norfolk Naval Shipyard (NNSY) is not currently 
scheduled to conduct any Virginia-class submarine depot level 
maintenance. NNSY does provide Virginia-class submarines built at 
Newport News Shipbuilding with intermediate level maintenance support 
prior to each submarine's relocation to its assigned homeport.

    50. Senator Ayotte. Vice Admiral Burke, in terms of taking 
advantage of and maintaining the Virginia-class expertise that has been 
created at Portsmouth Naval Shipyard, what is the impact of a potential 
gap of 4 years between Virginia-class availabilities at Portsmouth?
    Admiral Burke. With a 4 year gap between Virginia-class 
availabilities at Portsmouth Naval Shipyard, Portsmouth may lose some 
of its expertise in dealing with Virginia-class unique systems and 
system interoperabilities. For the most part though, the Virginia-class 
consists of the same type of parts and systems found on all submarine 
(e.g., valves, hydraulics, high and low pressure air, seawater, 
freshwater, motors, pumps, electrical distribution, tanks and voids, 
air-conditioning and refrigeration plants, torpedo tubes, weapons 
systems, habitability systems, steering gear, antennas, hull, nuclear 
propulsion plant, etc.).
    Since Portsmouth Naval Shipyard will be working at capacity on Los 
Angeles-class availabilities over the next 4 years, the Navy is 
confident that Portsmouth will maintain its proficiency at executing 
submarine availabilities. Additionally, Portsmouth will be able to 
leverage the experience gained by Pearl Harbor from their conduct of 
four consecutive Virginia-class availabilities.

    51. Senator Ayotte. Vice Admiral Burke, can the Navy please provide 
the Virginia-class availabilities schedule for the rest of the Future 
Years Defense Plan (FYDP)? I am interested in when and where the 
availabilities will be conducted.
    Admiral Burke. The Virginia-class depot availability schedule 
across the FYDP is as follows:

------------------------------------------------------------------------
                                     Fiscal Year
            Submarine                   Start             Shipyard
------------------------------------------------------------------------
USS Texas........................            2012   PHNSY&IMF
USS Hawaii.......................            2015   PHNSY&IMF
USS North Carolina...............            2016   PHNSY&IMF
USS Missouri.....................            2016   PHNSY&IMF
USS New Hampshire................            2016   PNSY
USS New Mexico...................            2017   PNSY
------------------------------------------------------------------------


               REPLACEMENT OF AGING AIR REFUELING TANKERS

    52. Senator Ayotte. Lieutenant General Reno, I am pleased that the 
Air Force will soon be able to start replacing its Eisenhower era KC-
135 air refueling tankers with the KC-46A. I know that that the 157th 
Air Refueling Wing at Pease Air National Guard Base has been flying 50-
year-old KC-135s with an average of 20,000 flying hours for over 17 
years. Despite the fact that they have done a magnificent job to keep 
their mission capable rates above 72 percent, they look forward to the 
new tanker. I am aware that the Air Force will soon establish the 
strategic basing criteria as the first stage in a transparent process 
to determine the initial operational locations for the new tanker. How 
much of the decision will be based on an analysis of the wear and tear 
of the existing airframes?
    General Reno. The Air Force Strategic Basing process links mission 
and combatant commander requirements to installation attributes to 
identify locations that are best suited to support any given mission. 
Wear and tear on existing weapon systems is not considered in Strategic 
Basing decisions.

    53. Senator Ayotte. Lieutenant General Reno, when do you expect the 
first KC-46As to be delivered to operational units?
    General Reno. I expect the first production KC-46A to be delivered 
in 2016.

    54. Senator Ayotte. Lieutenant General Reno, have you identified 
any troubling trends or maintenance concerns with the aircraft?
    General Reno. We have not identified troubling trends or 
maintenance concerns with the B-767 at this time. Currently, the KC-46A 
is in its development phase. The Air Force will participate in all 
design reviews to ensure our maintenance requirements are met and will 
monitor test and evaluation activities for trends.

    55. Senator Ayotte. Lieutenant General Reno, do you anticipate 
having to invest in system upgrades to the KC-135 in the interim before 
the transition to KC-46As? If so, can you describe what upgrades will 
be needed?
    General Reno. A variety of sustainment modifications are currently 
underway or planned for the KC-135 through 2040+ as we transition to 
the KC-46As. Current modifications include:

    (a)  Global Air Traffic Management, which replaces multiple 
avionics components to meet worldwide civil airspace access mandates;
    (b)  Block 45, which replaces the digital flight director, 
autopilot, radar altimeter and multiple analog engine gauges with an 
electronic multi-function display;
    (c)  a Mode-S upgrade to the transponder to enable access to 
worldwide civil airspace;
    (d)  a Mode-5 upgrade to the existing transponder to meet DOD-
mandated requirements for enhancements to the Identification, Friend or 
Foe system;
    (e)  a Very High Frequency/Instrument Landing System Antenna 
modification which will replace the existing antenna due to 
obsolescence, and;
    (f)  an Auxiliary Power Unit (APU) Oil Cooler modification which 
adds an oil cooler to the APU to prevent hot oil temperature shutdowns 
in the area of responsibility.

    Planned future modifications will also include a variety of minor 
Acquisition Category III and low cost modifications to address 
maintenance discrepancies and parts obsolescence or symptoms common to 
aging aircraft. Safety modifications will be addressed as required. 
Additionally, Programmed Depot Maintenance will continue and include 
items such as rewiring, refurbishment of control surfaces, replacement 
of other primary structures, and other maintenance efforts to keep the 
aircraft viable through 2040+. Other potential upgrades will be vetted 
via the Air Force requirements process for validation, prioritization, 
and approval.

    56. Senator Ayotte. Lieutenant General Reno, finally, has the Air 
Force determined what manpower will be required to maintain the KC-46A 
at the base level?
    General Reno. The 2010 Manpower Estimate for the KC-135 Replacement 
Aircraft was submitted in accordance with the reporting requirements of 
Title 10, U.S.C., Sec. 2434. Required changes to the existing manpower 
requirements baseline will be accomplished through appropriate manpower 
programming actions.

    57. Senator Ayotte. Lieutenant General Reno, will routine 
maintenance be performed by Air Force personnel or by contractors?
    General Reno. For up to the first 5 years, the KC-46A will be 
maintained by Interim Contractor Support (ICS). Beyond the ICS period, 
the plan (which is subject to additional studies) is primarily for 
organic maintenance at the operational bases as well as the Air Force 
depots.

               SUPPLIES AND EQUIPMENT FOR THE WARFIGHTER

    58. Senator Ayotte. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, I have 
a question that cuts to the heart of this committee's top priority to 
support the warfighter. Has any unit deployed overseas at a contingency 
location, particularly in Afghanistan, provided an urgent needs request 
for supplies or an equipment item in the past year that has not been 
satisfied in a timely manner? If so, can you describe the supply or 
equipment item in detail?
    General Stevenson. Yes. Units sometimes deploy overseas with 
unsatisfied urgent needs requests. The Army endeavors to always meet 
the continuous and steady-stream of warfighter generated Operational 
Need Statements (ONS) and Joint Urgent Operational Need Statements 
(JUONS) for either emerging technologies or additional equipment. 
Commanders regularly and justifiably request immediate sourcing of ONS/
JUONS to mitigate risk or provide a tactical edge based on new battle 
space, expanded scope of operations, or changes in enemy tactics. By 
way of context, HQDA receives ONS/JUONS for over 200 separate items 
every week, and at times, these can be very short notice requests. For 
example, Robots were requested thru an ONS for a new capability to 
combat the enemy's ever evolving Improved Explosives Device (IED) 
threat against dismounted patrols. In response to the ONS, the Army 
identified and deployed an operationally ready solution that was in 
testing, the Small Unmanned Ground Vehicle (SUGV) 320 man-portable 
robot. The Army used an existing contractual vehicle to procure these 
SUGV 320 robots as a commercial off-the-shelf (COTS) solution, and we 
also re-allocated resources to procure additional robots to meet future 
requests for Afghanistan. With the continued resourcing support of 
Congress, we can and will meet ONS and JUONS in the near and long term, 
and retain resourcing flexibility to provide equipping solutions to 
mitigate identified capability gaps. This process may not be always 
immediate, but will and does provide enduring material solutions for 
the operational benefit and safety of our soldiers in a quick a manner 
as possible.
    General Panter. The Marine Corps Urgent Needs Process is proving 
highly effective at meeting the urgent needs of Marines in combat. The 
clearest indication of this success is the increase of urgent need 
statement requests from 2008 until present. The Marine Corps processed 
38 requests in 2008, 35 in 2009, the number increased to 63 in 2010, 
and 22 have been processed so far this year. In the end, our commanders 
do not have the time to use a process that does not provide the desired 
results.
    The Marine Corps Urgent Needs Process is not focused on providing 
specific supply or equipment items; however, it is centered on quickly 
providing solutions to problems. Increasingly, these solutions are not 
available ``off the shelf'', but require a degree of rapid development 
and integration. Virtually every capability we are now delivering has 
never been acquired before.
    The objective of the Urgent Needs Process is ``to respond to urgent 
warfighting capability needs by providing the best available solutions 
to mission-critical capability gaps in a timeframe acceptable to 
operating force commanders''. The needs of our commanders are being 
satisfied through the Marine Corps Urgent Needs Process.
    General Reno. Air Force Central (AFCENT) is the Air Force lead to 
support to the combatant commander in Central Command. Neither I nor 
AFCENT/A4 is aware of any delays in support of urgent needs requests 
for supplies or equipment in this Area of Responsibility.
    Admiral Burke. The answer is ``no.'' Navy units deploying overseas 
to a contingency location, including Afghanistan, embark with the 
required levels of equipment and supplies. Urgent requests for supplies 
and equipment are responded to in a timely manner, and the means exist 
to timely respond and accurately track completion.
    In addition, for CSGs and ESGs in the 5th Fleet, due to their 
allowances and the transportation routes to and within, no major 
support issues have been reported. Cargo movement into Afghanistan is 
acceptable.

    59. Senator Ayotte. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, has 
the inability to meet the request been caused by a lack of acquisition 
resources, a constricted manufacturing or supply pipeline, or some 
other factor? Please explain.
    General Stevenson. The inability to meet warfighter requested 
delivery dates can and has been caused by all the factors you have 
mentioned. For example, in support of the operational needs for a 
Persistent Threat Detection and Surveillance System (PTDSS), the 
Department was required to re-program funding to the appropriate 
funding line. While we received excellent support at all echelons thru 
the process, these actions require a detailed analysis and requirements 
validation process to ensure the best possible solution is provided to 
our warfighters. An example of a constricted manufacturing base is the 
OEF Camouflage Pattern (OCP) uniform. There are a limited number of 
American textile companies (which we are restricted to by the Berry 
Amendment) that can produce and supply these uniforms, and because of 
this, the Army ended up phasing in the fielding over a longer period of 
time than the warfighter would have preferred. An example of a 
constricted supply pipeline is SPARK II Minerollers. We have engaged in 
an aggressive effort to ship SPARK II Minerollers to theater; however, 
despite overcoming inter-theater shipping limitations, intra-country 
shipping challenges have adversely impacted our our ability to get them 
distributed within Afghanistan as fast as we would have liked. This is 
a tough business requiring detailed coordination--Congress has always 
supported our requests for appropriate levels of funding for materiel 
solutions in support of our warfighters' urgent requests, and we do our 
best to get what is required to them as quickly as possible.
    General Panter. For the Tactical Handheld Biometrics the required 
capability was not available off the shelf due to technological 
readiness levels. This was exacerbated by the requirement to be 
compatible with the existing biometrics architecture which included a 
proprietary algorithm for the capture, processing, and storage of iris 
images. Recent steps to solve this urgent warfighter need were met with 
vendor protest after a materiel solution was selected.
    For the Stand-off Suicide Bomber Detection the required capability 
was not available off the shelf due to technological readiness levels. 
Several COTS/NDI systems were provided quickly, but none have fully 
closed the gap. Efforts are ongoing to meet the full requirement 
through the integration of several distinct capabilities.
    General Reno. AFCENT is the Air Force lead to support to the 
combatant commander in Central Command. Neither I nor AFCENT/A4 is 
aware of any delays in support of urgent needs requests for supplies or 
equipment in this Area of Responsibility.
    Admiral Burke. N/A. Navy units deploying overseas to a contingency 
location, including Afghanistan, embark with the required levels of 
equipment and supplies. Urgent requests for supplies and equipment are 
responded to in a timely manner, and the means exist to timely respond 
and accurately track completion.

    60. Senator Ayotte. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, have 
any of you heard of concerns that some equipment coming out of Iraq has 
been sent direct to Afghanistan in a deteriorated condition as opposed 
to going through depot maintenance first? If so please explain and 
provide details.
    General Stevenson. Equipment being redistributed out of Iraq to 
Afghanistan did not go thru ``depot maintenance'' first. However, where 
possible, all this equipment was routed thru Kuwait to be inspected and 
to ensure it was in a fully mission capable condition before it was 
onward moved to Afghanistan. In some instances, due to urgency of need, 
that was not possible, and yes, there were isolated reports of non-
mission capable equipment being sent directly from Iraq to Afghanistan. 
However, those issues have long since been overcome. Our deployed 
equipment has generally met or exceeded our operational readiness 
standards for the last 9 years of the war, 90 percent for ground and 75 
percent for air, in both OND and OEF.
    General Panter. No, Headquarters Marine Corps has not received 
official reports concerning equipment coming out of Iraq and being sent 
directly to Afghanistan being in a deteriorated condition. Limited 
Technical Inspections (LTIs) were conducted on all equipment being 
transferred from OIF to OEF. Equipment deemed serviceable was sent 
directly to Afghanistan while equipment determined to be less than 
mission capable was retrograded from theater or received maintenance 
repair actions in order to bring it to mission capable status prior to 
being deployed to OEF.
    General Reno. AFCENT is the Air Force lead to support to the 
combatant commander in Central Command. Neither I nor AFCENT/A4 is 
aware of any equipment going directly to Afghanistan from Iraq in a 
deteriorated condition.
    Admiral Burke. No, I have not heard of such concerns. The Navy goes 
to great effort to ensure that all equipment sent to Afghanistan is 
fully functional and capable of operating in the projected operational 
environment. Equipment being transferred from Iraq is thoroughly 
cleaned, inspected, and has all necessary upgrades or improvements 
installed and tested prior to being sent to the Afghanistan AOR. 
Equipment held in the CENTCOM theater undergoes a condition-based 
inspection and analysis, and if deemed necessary, is sent to a depot-
level maintenance facility for repair or refurbishment, prior to being 
sent to Afghanistan.

    61. Senator Ayotte. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, do any 
of you have any concerns about the serviceability or condition of any 
equipment being sent to Afghanistan?
    General Stevenson. The Army is confident that the serviceability 
and condition of equipment being sent to Afghanistan is fully mission-
capable. If transferred from Iraq to Afghanistan the equipment is 
inspected and repaired in theater prior to transfer. If the equipment 
is deployed from a unit's home station it has been reset to 10/20 + 
Delayed Desert Damage and Degradation (4D) standard, with all effects 
of any 4D removed.
    Our deployed equipment has generally met or exceeded our 
operational readiness standards for the last 9 years of the war; 90 
percent for ground and 75 percent for air.
    General Panter. Currently, the Marine Corps has no concerns about 
serviceability or condition of equipment being sent to Afghanistan.
    General Reno. AFCENT is the Air Force lead to support to the 
combatant commander in Central Command. Neither I nor AFCENT/A4 has 
concerns about the serviceability and condition of equipment being sent 
to Afghanistan.
    Admiral Burke. No, Navy goes to great effort to ensure that all 
equipment sent to Afghanistan is both functional and capable of 
operating in the projected operational environment. Equipment held in 
the CENTCOM theater undergoes a condition-based inspection and 
analysis, and if deemed necessary, is sent to a depot-level maintenance 
facility for repair or refurbishment, prior to being sent to 
Afghanistan.

    62. Senator Ayotte. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, do any 
of you anticipate any supply or equipment shortfalls in the next 12 
months that we need to address?
    General Stevenson. We do not anticipate any significant supply or 
equipment shortfalls in the next 12 months. As we execute the drawdown 
of supplies and materiel from Iraq, we anticipate fewer demands and 
have proven processes in place to redistribute this equipment and 
supplies against other validated theater and Army requirements. We will 
continue to manage our equipment and supply needs closely as we have 
successfully demonstrated over the past 10 years in supporting our Army 
at war, and we hope to continue to enjoy the tremendous support we have 
received year after year from Congress.
    General Panter. No., The Marine Corps has experienced shortfalls in 
certain critical pieces of equipment which were mitigated through 
Service level prioritization initiatives (HQMC's Strategic Ground 
Equipment Working Group (SGEWG) actions) that give priority to the 
Marine units in theater and then those units training for deployment to 
OEF. Currently, there are no supply or equipment shortfalls for the 
foreseeable future (in the next 12 months [through June 2012]) that 
requires congressional level assistance.
    General Reno. The Air Force does not anticipate any major supply or 
equipment shortfalls in the next 12 months; however, as part of the 
Chief of Staff's fiscal year 2012 Unfunded Priorities List (UPL), we 
submitted two items to enhance logistics and maintenance sustainment.
    The Air Force requested replacement of 75 A-10 maintenance testers 
that are used to troubleshoot avionics and weapons functionality. The 
testers will provide greater strike capability and aircraft situational 
awareness. We also requested replacement munitions for those assets 
that were expended as part of Operation Odyssey Dawn.
    Admiral Burke. With respect to unit/operational support, the answer 
is ``no.'' The integrated priority lists, and the budgeting and 
execution processes have proven sufficient to address requirements and 
shortfalls for OCOs. Although continued Congressional support is always 
appreciated, no issues have been identified that would merit such 
intervention.
    With respect to fleet readiness and logistics programming, we 
highlight the response to a request from the House Armed Services 
Committee Ranking Member by the Chief of Naval Operations, which 
identified U.S. Navy fiscal year 2012 unfunded requirements of $684 
million for aviation spares and ship depot maintenance. The CNO noted 
that ``although these unfunded requirements are not of a higher 
priority than anything contained in the Navy's fiscal year 2012 budget 
submissions, these accounts are stressed by increased operational 
tempo.'' The ship depot maintenance account funds naval shipyard and 
private sector maintenance of surface ships and submarines, and the 
fiscal year 2012 unfunded component ($367 million) would restore 44 
deferred surface ship non-docking availabilities. The fiscal year 2012 
aviation spares unfunded component ($317 million) would provide 
aviation spares support for over 3,700 individual Fleet aircraft. The 
primary cost drivers for shortage in aircraft spares and repair parts 
are MV-22, EA-18G, F/A-18-E/F, and MH-60R/S. Congressional assistance 
and consideration of these accounts would be most appreciated.

    63. Senator Ayotte. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, based 
on an assessment of current conditions, are you aware of any changes we 
need to make to the budget request for 2012 to allow resources to be 
more efficiently and effectively applied to the most critical 
warfighters' needs?
    General Stevenson. We do not require any changes to the fiscal year 
2012 budget request to meet critical warfighter needs. Should any new 
requirements emerge in the near future, we will ensure congressional 
staffs are made aware of them immediately.
    General Panter. The following changes to the fiscal year 2012 
budget would provide the greatest impact to warfighter needs:

         Fiscal Year 2012 Unfunded Requirements List

                 Enterprise Land Mobile Radar (E-LMR) ($45.0 
                million PMC) - Provides the network infrastructure 
                ``backbone'' to complement first responder capabilities 
                at various locations. Also enhances training range 
                safety by expanding coverage over a broader area, and 
                FCC radio frequency issues at MCAS Yuma. Restores 
                funding marked from fiscal year 2011 OCO as a 
                ``baseline requirement'' but not added to the fiscal 
                year 2011 baseline.
                 Secondary Fire Suppression Phase II for LVSR, 
                MTVR ($17.0 million PMC) - Emergent requirement to 
                extinguish secondary vehicle fires. Procures aqueous 
                fire suppression systems for 1,104 MTVRs and LVSRs 
                deployed in OEF that operate outside Forward Operating 
                Bases.
                 Chemical/Biological/Nuclear Incident Response 
                Force (CBRN/CBIRF) ($1.0 million PMC/$8.5 million OMMC) 
                - Emergent requirement based on lessons learned in 
                Japan. Upgrades Incident Response Force equipment/
                capability with new technology insertion devices, 
                protective suits, replacement respirators, extended 
                operation filters, and unified command suites.

         Medium Tactical Vehicle Replacement Realignment (MTVR) 
        Request - The Marine Corps has forwarded a request to the 
        Congressional Appropriations and Armed Services committees 
        regarding approximately $298 million in PMC OCO funds that were 
        no longer required to purchase MTVR vehicles and has requested 
        that those funds be realigned as follows:

                 $148 million for Logistics Vehicle System 
                Replacement vehicles
                 $82 million for Expeditionary Energy 
                Requirements (advanced power sources, mobile power 
                equipment, energy efficient tent liners and lights)
                 $70 million for Command and Control Equipment 
                (data distribution systems and digital technical 
                control)

    General Reno. No changes to the fiscal year 2012 President's budget 
(PB) request are needed. The fiscal year 2012 PB request represents the 
best possible balance between mission requirements and risk within the 
authorized funding levels.
    Admiral Burke. The Navy would request the Senate's support for the 
two items on the CNO's unfunded priority list: an additional $367 
million for ship maintenance and an additional $317 million for 
aviation spares support.

 REDUCED READINESS RATES AND OUTDATED EQUIPMENT FOR NATIONAL GUARD AND 
                             RESERVE UNITS

    64. Senator Ayotte. Lieutenant General Stevenson, the Reserve 
component continues to face reduced readiness rates as a result of 
shortfalls in equipment. In the most recent National Guard and Reserve 
Equipment Report, nearly $4.1 billion in significant major item 
shortages were identified for the Army National Guard (ARNG) alone. 
What do you estimate to be the total shortfall in National Guard 
equipment and modernization requirements?
    General Stevenson. The Army continues in its efforts to address the 
ARNG equipment and modernization shortfall. With the help of Congress, 
over $31 billion has been appropriated for procurement of ARNG 
equipment from fiscal year 2007-fiscal year 20l1. As stated in the 
fiscal year 2012 National Guard and Reserve Equipment Report, the total 
ARNG equipment shortfall was $25.2 billion as of September 30, 2010. 
The Army has requested an additional $3.5 billion for ARNG equipment in 
the fiscal year 2012 President's budget.
    As a result of significant investment to improve the ARNG's 
equipping posture, the Army projects the ARNG will have 92 percent of 
its EOH at the beginning of fiscal year 2012.

    65. Senator Ayotte. Lieutenant General Stevenson, to what degree 
are equipment shortfalls among the National Guard impacting the ability 
of units to properly train and maintain readiness for potential 
contingencies?
    General Stevenson. The impacts of equipment shortfalls for ARNG 
training and readiness have been significantly reduced. The portion of 
ARNG units that now meet minimum standards of readiness increased 17 
percent in the past year. ARNG units are now equipped to a level 
comparable to active units, except for modernization, where the ARNG 
slightly trails the Active component. Progress is clearly reflected in 
the effort it takes to equip an ARNG unit for deployment now, versus in 
previous years: the amount of equipment redistributed in fiscal year 
2010 was down by 87 percent from the historical average to 3,826 
pieces. In addition, equipment on-hand for several categories of 
equipment important to the ARNG domestic response mission (water 
purification, HMMWVs, heavy cargo trucks, and fuel haulers) has doubled 
for ARNG units since 2005.
    One readiness challenge involves training on equipment only 
available in theater, at a mobilization station, or fielded just prior 
to mobilization (i.e., Warfigther Information Network-Tactical 
equipment which provides mobile satellite communication, ground-based 
network capabilities, and MRAP vehicles). ARNG readiness issues from 
equipment shortages will be mitigated through future programmed 
deliveries.

    66. Senator Ayotte. Lieutenant General Stevenson, what is being 
done to ensure that the Reserve component is provided proportional and 
concurrent fielding with its Active component colleagues?
    General Stevenson. The Army's objective is to ensure the Reserve 
component is provided proportional and concurrent equipment fielding 
with its Active component (AC) counterparts through policy, equipping 
conferences, EOH and requirements analysis, the Reserve component 
payback program, Transparency Program and the equipping Program 
Objective Memorandum development process.
    The Army's Equipping Strategy establishes EOH readiness Aim Points 
for units as they progress through the ARFORGEN process. These goals 
apply equally to all three components--Active, Reserve, and ARNG. The 
Army holds equipping conferences twice each year to finalize equipment 
distribution plans. These conferences are attended by each Army 
component and the Army commands that support the combatant commanders.
    At the end of March 2009, the aggregate Army EOH was 78 percent 
(6.37 million out of 8.11 million), the AC 80 percent (3.1 million out 
of 3.9 million), the ARNG 77 percent (2.45 million out of 3.19 million) 
and the U.S. Army Reserves (USAR) 80 percent (.82 million out of 1.02 
million). Based on procurement plans developed in collaboration with 
the ARNG and USAR, by the end of October 2012, the aggregate Army EOH 
is projected to be 92 percent (8.34 million out of 9.04 million); 93 
percent (3.40 million out of 3.66 million) for AC, 92 percent (2.66 
million out of 2.90 million) for ARNG and 90 percent (.89 million out 
of 1.0 million) for USAR.
    In September 2010, the ARNG equipment modernization levels were at 
72 percent, an 18 percent improvement from September 2008; USAR was at 
67 percent, a 12 percent improvement; and the AC was at 74 percent, a 
12 percent improvement. Modernization will continue to improve for all 
Army Components and is projected to be 74 percent (+2 percent) for the 
ARNG, 68 percent (+1 percent) for the USAR and 77 percent (+3 percent) 
for the AC by October 2012.
    The Army conducts detailed analyses to determine if the 
distribution of equipment is proportional to the distribution of 
requirements for each of the Army's components. These analyses are 
conducted twice each year in coordination with the ARNG and USAR, and 
is used as part of the Army's equipping conferences.
    The Army is committed to equipping soldiers going into harm's way 
with the most capable systems. This strategy applies to Reserve 
component units as well as Active component units and is designed to 
modernize the Reserve components comparative to the Active component.

    67. Senator Ayotte. Lieutenant General Stevenson, does the National 
Guard have adequate facilities to properly store and maintain the 
equipment they are receiving?
    General Stevenson. The ARNG has a 2.4 million square foot deficit 
in maintenance facilities nationwide. Additionally, 40 percent of the 
Readiness Centers in the ARNG inventory are over 50-years-old. These 
Readiness Centers accommodate just half of the capacity for equipment 
and personnel of today' s ARNG units. The Army's equipment requirements 
have grown with Army modernization over the last 50 years, and the 
current facilities do not meet the requirements to store modern 
equipment. To address this issue the Army and ARNG have agreed that 
beginning in fiscal year 2015, the Guard should receive about 20 
percent of the Military Construction Total Obligation Authority based 
on the ARNG's real estate inventory and attributes.

                               ARMY RESET

    68. Senator Ayotte. Lieutenant General Stevenson, despite billions 
of dollars invested in reset, Army readiness continues to remain 
stagnant. Ready units are consumed as quickly as they can be produced. 
While I understand this is a function of significant demand abroad, I 
am concerned that any meaningful decrease in demand will likely be 
followed quickly by a decrease in the availability of OCO dollars. With 
this said, I am very disappointed that the Army agreed to forfeit over 
$1.0 billion in funding requested in the fiscal year 2011 OCO account 
for equipment reset because it was requested in the wrong account, as 
opposed to aggressively pursuing a reprogramming to fund other critical 
unfunded equipment reset priorities this year. Do you have reset 
requirements that you could have used the funding for?
    General Stevenson. No. Following the end of fiscal year 2010, the 
Army assessed its Reset requirements for fiscal year 2011 (which were 
built over a year prior). After careful review, it was determined that 
O&M Reset, in-theater maintenance, and procurement Reset were fully 
supported in our revised request. We could not reprogram the dollars 
because they had not been appropriated yet (we were under a continuing 
resolution) and we had no critical unfunded equipment reset 
requirements.
    Nonetheless, the support for the Army's Reset requirements has 
resulted in the restoration of equipment readiness to support current 
and future contingencies. Our equipment operational readiness has been 
generally maintained at 90 percent for ground and 75 percent air for 
the last 9 years, a direct result of the Reset investment.

    69. Senator Ayotte. Lieutenant General Stevenson, do you have a 
similar problem in the fiscal year 2012 budget request?
    General Stevenson. At this point we do not anticipate having any 
excess Reset dollars in our fiscal year 2012 Reset request.
    However, it is always possible to have operational decisions that 
impact the return of equipment in a given fiscal year that impact our 
actual Reset workload and subsequent funding posture. As these fact-of-
life situations occur, we will keep Congress informed on their affect 
and impact on our resourcing requirements.

    70. Senator Ayotte. Lieutenant General Stevenson, given that you 
have repeatedly stated that it will be 2 to 3 years following the 
conclusion of operations in Iraq and Afghanistan before the Army can be 
fully reset, I can't help but envision a gap between reset requirements 
and available funding in the out-years. Are you confident that 
sufficient resources will be available through at least 2016 or 2017, 
as would be required to reset forces returning from Afghanistan under 
the current timeline?
    General Stevenson. With the support of Congress, we will have 
sufficient resources available through 2017 to ensure that the 
equipment returning is repaired or replaced to support future 
contingencies.
    Forces are ramping down in both Iraq and Afghanistan and, as a 
result, our OCO requirements are decreasing.
    If there is a gap we will have to prioritize our requirements to 
address the most critical items and take risks in restoring or 
sustaining our equipment since our peacetime budgets do not adequately 
address the incremental costs to repair or replace equipment as a 
result of operations in a harsh demanding environment for an extended 
period of time.
    Ensuring that our equipment is ready for the next contingency is 
absolutely critical. As we have learned from history, the equipment 
that you have at the end of a conflict is usually the same equipment 
that you must use to fight the next conflict. Maintaining our equipment 
to a high readiness standard ensures that we are able to respond to any 
contingency.

                      CONDITIONS OF NAVY SHIPYARDS

    71. Senator Ayotte. Vice Admiral Burke, GAO released a report late 
last year that detailed actions needed to improve the Navy's processes 
for managing public shipyards' restoration and modernization needs. The 
report noted that ``The Navy has not issued guidance detailing the need 
for shipyard strategic plans or what to include in them.'' We also 
received data from the Navy that details a $3.5 billion backlog of 
facility repair requirements at the four shipyards as of the end of 
fiscal year 2010. In response to these alarming trends, working with my 
colleagues, I've drafted legislation for the Readiness and Management 
Support Subcommittee mark this year that will require the Secretary of 
the Navy to develop an investment strategy to address the inadequate 
facilities and infrastructure at our shipyards. Based on current 
funding over the next 5 years, will this backlog be reduced or continue 
to grow?
    Admiral Burke. The Navy anticipates that the shipyard facility 
recapitalization backlog will continue to grow as high operational 
demands and rising costs continue to cause the Navy to take risk in 
shore readiness, specifically in the sustainment, restoration, and 
modernization of our shore infrastructure.

    72. Senator Ayotte. Vice Admiral Burke, can you describe how the 
Navy prioritizes shipyard facility restoration and modernization 
requirements?
    Admiral Burke. With workforce safety, health, and quality of life 
as top priorities, the Navy develops comprehensive restoration and 
modernization (RM) projects, based primarily upon the Infrastructure 
Condition Assessment Program (ICAP) and Asset Evaluation (AE) program 
data.
    We cannot address every shortfall in the desired timeframe due to 
fiscal constraints, so shipyard projects are evaluated and prioritized 
with all Navy projects. Our shore investments are prioritized to best 
enable warfighting and Joint capabilities, minimize the decline of 
critical mission-essential and quality of life infrastructure, and 
optimize warfare enterprise outputs and quality of service.

               FUTURE CAPABILITIES OF MAINTENANCE DEPOTS

    73. Senator Ayotte. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, DOD 
operates 17 major depot activities, employing more than 77,000 
personnel and expending more than 98 million DLHs annually with the 
mission to provide a ready and controlled source of organic depot 
maintenance for most major military weapon systems. Congress recently 
received a report from the LMI Consulting Group on the effectiveness 
and efficiency of these depots.
    The report concluded that the increased demand over the past 9 
years, which increased DOD's organic depot maintenance workload by 50 
percent, will not be sustained as our Nation reduces its involvement in 
OCO. Also, reductions in the overall defense budget, and a likely 
elimination or large reduction in war-supplemental funding could 
further reduce depot activity. In fact, the report noted an alarming 
fact that the Army and Marine Corps budget for over 80 percent of their 
depot workload from the OCO accounts, as opposed to the base budget 
requested by the President each year. Does this reliance on the OCO 
concern you?
    General Stevenson. The Army's reliance on OCO is declining as our 
base depot maintenance budget is restored. As a result, our current 
reliance on OCO does not concern me at this time. Army's base depot 
maintenance funding levels have increased from $1.1 billion in fiscal 
year 2010 to $2.1 billion in fiscal year 2012 and have been sized to 
cover our Core requirements.
    We have taken a number of steps to ensure that the depots are 
postured to support Army base requirements in a post war environment 
through our Industrial Base Strategy which identifies and prioritizes 
Core requirements; sizes our organic base facilities and workforce to 
meet and sustain those core competencies; and uses proven practices 
like Lean Six Sigma to ensure that our maintenance depots maintain 
their core competencies and capabilities to meet future requirements.
    We do expect equipment returning from the current OCOs will require 
more resources for reset than we will have in the depot maintenance 
base budget due to damage from the harsh operating conditions. The Army 
will request OCO funds, separate from the base budget, for this portion 
of reset. The Army also expects that the some level of OCO funding will 
be required for 2-3 years after the return of forces.
    General Panter. Yes, while we have financed our overall Depot Level 
Maintenance Program with a heavy reliance on OCO funding, we are moving 
more into the baseline as we work through the budget process. We are 
positioned to bring our costs down as workload from the war diminishes.
    General Reno. Reliance on OCO funding is a concern, since the Air 
Force's WSS portfolio currently requests approximately $2 billion a 
year in OCO funding. For this reason, the Air Force is developing a 
plan to fund the baseline at 80 percent of requirements by fiscal year 
2016. Because historic funding levels, with OCO, have proven sufficient 
in meeting enduring mission requirements, this plan requires increased 
baseline funding to sustain enduring WSS requirements when OCO funding 
ceases.
    Admiral Burke. In general, the LMI report shows a relatively stable 
Navy workload, even after a projected drawdown of operations in Iraq 
and Afghanistan. Navy strategy is to ``reset in stride'', so that our 
ships and aircraft reach their expected service life. Navy is concerned 
about the continuing reliance on OCO to fund base requirements, but is 
working with OSD to correct this challenge. If OCO funding is not 
appropriated as requested in fiscal year 2012, the Navy will only be 
able to fund 79 percent of the ship maintenance requirement and 87 
percent of the aviation depot maintenance requirement from the base 
budget.

    74. Senator Ayotte. Lieutenant General Stevenson and Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, do the 
plans for your respective Services over the next 5 years include a 
return of depot operations funding back into the base budget at levels 
that will maintain an adequate workload?
    General Stevenson. Yes, the Army has initiated an OIB Strategy that 
is designed to ensure a relevant OIB is sustained in order to meet 
future contingency requirements. As a result, the Army has taken action 
to ensure that our depot core competencies are identified and that the 
workload necessary to sustain our core competency requirements is 
requested in the budgets. The Army will continue to balance depot 
maintenance funding with other Army priorities to ensure that the Army 
can meet current and future core requirements. These actions ensure 
that organic base facilities and workforces meet and sustain core 
competencies; provide a ready and controlled source of technical 
ability, expertise, and resources; and execute depot-level maintenance 
effectively and efficiently.
    General Panter. Yes, The Marine Corps has increased baseline 
funding for the Marine Corps Equipment Maintenance Program as reflected 
in the current fiscal year 2012-2013 budget submission. The increase in 
funding, as mandated by the OSD Depot metric of funding 80 percent of 
the total depot maintenance requirements, properly aligns baseline 
funding with projected baseline requirements.
    General Reno. Yes. During the fiscal year 2012 Presidents budget 
build, the Air Force was directed via Resource Management Directive 700 
to develop a plan to migrate WSS OCO-to-baseline funding by fiscal year 
2016. We are developing the plan as part of the fiscal year 2013 
Program Objective Memorandum process. The plan will require increases 
in baseline funding to sustain enduring WSS missions when OCO funding 
ceases. Without OCO-to-baseline funding migration, WSS will experience 
significant risk resulting in deferred depot-level maintenance and 
possible aircraft groundings.
    Admiral Burke. The Navy continues to evaluate a transition of depot 
maintenance to the baseline budget. In the fiscal year 2012 baseline 
submission, the Navy will be able to fund 79 percent of the ship 
maintenance requirement and 87 percent of the aviation depot 
maintenance requirement.

    75. Senator Ayotte. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, what 
are your responses and opinions of the LMI Study?
    General Stevenson. The Army agrees with many of the recommendations 
in the LMI report and believes them to be aligned with the Army's 
overall OIB Strategy. We agree that the statutory framework could be 
improved with regard to a clearer definition of depot maintenance. We 
also support the need to establish a closer link between the 
acquisition and sustainment policies.
    However, some of the recommendations are not new initiatives. For 
example, the Army has already made significant improvements to the Core 
process and completed a draft OIB Strategy that will ensure sustainment 
of a relevant and responsive OIB into the future.
    We disagree with improving depot maintenance reporting and 
establishing an independent commission to look at inefficiencies. The 
Army's reporting process is sound and we are actively pursuing 
efficiencies across DOD as well within our own service. The Army 
believes that current issues and inefficiencies can be addressed 
through a series of facilitated forums, such as the Maintenance 
Executive Steering Committee (MESC). Such forums would allow the 
Services to share best practices and allow DOD to adopt the practices 
that are applicable across the Services. The Marine Corps and Navy 
officials also agreed that existing bodies such as the MESC could 
address these issues.
    Finally, we feel that this is an important study of a very complex 
issue. The report raises a number of issues that could have financial, 
organizational, legislative (i.e., recommendation to combine statutes 
such as 50/50 and core), and readiness implications. We look forward to 
addressing these concerns as we move forward in this endeavor.
    General Panter. The Marine Corps greatly respects the efforts of 
the LMI study. While there are portions of the study that the Marine 
Corps agrees, there are portions with which the Marine Corps disagrees 
such as the implied suggestion that a Joint Depot Maintenance Command 
would streamline the depot maintenance process and simply reduce 
overhead and create more efficient business practices.
    Regarding LMI's observation on Depot Reliance on OCO funding, 
budget proposals for POM 12 have begun to increase baseline figures to 
meet estimated funding requirements for post-OEF sustainment levels.
    General Reno. We believe the Logistics Management Institute (LMI) 
study identified key issues that must be resolved. We will work with 
Office of the Secretary of Defense (OSD) to jointly address the 
necessary changes to ensure the Air Force has a ready and controlled 
source of technical competence and resources necessary to ensure 
effective and timely response to mobilizations, national defense 
contingency situations, and other emergency requirements. Some of the 
focus areas will be:

    (1)  strengthening the core assessment,
    (2)  including software in the depot maintenance definition, and
    (3)  retaining both the 50/50 and core laws and developing a 
methodology to align core consistent with 50/50 implementation.

    Admiral Burke. The LMI Study contains some good recommendations, 
but Navy does not agree with all the recommendations. The Navy does not 
see value in establishing an independent commission to review 
governance structures. The Services are capable of working directly 
with OSD to address these types of issues. Additionally, some of the 
additional reporting requirement recommendations do not add value. 
There is value in the recommendations to strengthen both the 
acquisition and the ``core'' determination processes. However, we must 
be mindful of increasing reporting requirements, rather than improving 
the reporting requirements which are already present.

    76. Senator Ayotte. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, do you 
believe Congress needs to clarify what the report called ``an ambiguous 
statutory framework for depot maintenance, including a definition that 
is subject to interpretation''?
    General Stevenson. We agree that the statutory framework (title 10, 
U.S.C., section 2460) could be improved to clarify the definition of 
software maintenance and the reporting exceptions for 50/50.
    Title 10, U.S.C., section 2460, which defines depot maintenance, 
provides an ambiguous definition of depot-level software maintenance, 
stating that the term depot maintenance ``includes (1) all aspects of 
software maintenance classified by DOD as of July 1, 1995''. As 
reported in the recently published LMI Future Depot Capability Study, 
there is no source documentation dated July 1, 1995. Thus, we support 
LMI's recommendation that Section 2460 be amended to include a 
comprehensive definition of depot-level software maintenance for use by 
all of the military services. The Office of the Deputy Assistant 
Secretary of Defense for Maintenance Policy & Programs (ODASD(MP&P)) 
has recently developed a DOD-wide definition of depot maintenance 
software.
    Section 2460 also provides the following exceptions to the 
definition of depot maintenance: ``(b) Exceptions. - (1) The term does 
not include the procurement of major modifications or upgrades of 
weapon systems that are designed to improve program performance or the 
nuclear refueling of an aircraft carrier. A major upgrade program 
covered by this exception could continue to be performed by private or 
public sector activities. (2) The term also does not include the 
procurement of parts for safety modifications. However, the term does 
include the installation of parts for that purpose.''
    We support the definition of depot-level maintenance as amended in 
HR 1540 as follows:
          ``(a) In General.-In this chapter, the term ``depot-level 
        maintenance and repair'' means (except as provided in 
        subsection (b)) the processes of material maintenance or repair 
        involving the overhaul, upgrading, rebuilding, testing, 
        inspection, and reclamation (as necessary) of weapon systems, 
        equipment end items, parts, components, assemblies, and 
        subassemblies. The term includes--

                  (1) all aspects of software maintenance;
                  (2) the installation of parts or components for 
                modifications; and
                  (3) associated technical assistance to intermediate 
                maintenance organizations, operational units, and other 
                activities.

          (b) Exception.-The term does not include the nuclear 
        refueling of an aircraft carrier.''

    The above definition is adopted from DOD Instructions (DODI) 
4151.20, titled ``Depot Maintenance Core Capabilities Determination 
Process''.
    General Panter. The current Title 10, Section 2464 definition of 
depot maintenance, as well as the definition of depot software 
maintenance, is open to interpretation. Although it allows flexibility 
in recording and reporting, it also creates inconsistency in how and 
what the Services consider depot maintenance and depot software 
maintenance.
    General Reno. The Air Force agrees with the Logistics Management 
Institute's (LMI) recommendation that Congress and DOD should reexamine 
all the depot-related statutes and guidance to determine what revisions 
are required. The Air Force looks forward to working with Congress and 
DOD to help strengthen the statutory framework for depot maintenance.
    Admiral Burke. The Navy does not have challenges interpreting the 
statutory framework for depot maintenance. However, efforts to better 
define depot maintenance should consider Service unique requirements. 
For example, the nuclear refueling of aircraft carriers is currently 
excluded from the statutory definition of depot-level maintenance (10 
U.S.C. 2460). This exclusion should be sustained, given that a large 
single project, which can only be accomplished at a single yard 
(Huntington Ingalls), can cause an unintended imbalance in the mix of 
workload between the public and private sector, and impact Navy's 
ability to comply with public vs. private sector workload requirements.

    77. Senator Ayotte. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, do you 
believe that acquisition decisions could be better connected to 
considerations of the organic depot system? If so, how are you 
incorporating life cycle maintenance and depot considerations into 
acquisitions decisions?
    General Stevenson. The Army has made great strides over the past 
several years developing policy and processes that better link the 
acquisition decisions with the organic depot system and future life-
cycle support. Our assessment of the necessary linkages is an evolving 
process and not yet complete.
    Current Army policy requires that fleet management and sustainment 
strategies be integrated early in the acquisition development process 
to ensure DOD organic depots and industry are considered as sources of 
repair. This is called the depot source of repair (DSOR) or source of 
repair analysis decision process.
    We have taken several steps in the past 2 years to ensure 
acquisition decisions are better connected to our organic depots. These 
steps include:

         Strengthened emphasis on Program Manager (PM), 
        initiation and completion of the DSOR process, working closely 
        with Army Materiel Command (AMC) Life Cycle Management Command 
        (LCMC) Integrated Materiel Management Center (IMMC) and Depot 
        logisticians. The DSOR decision serves as the critical 
        component of the future sustainment strategy for the weapons 
        system and is made at or before Milestone C in the acquisition 
        process.
         Emphasized the need to complete CLAs NLT Milestone B 
        ((i.e., by the end of the Technology Development Phase) and 
        CDAs NLT Milestone C. The CLA and CDA identifies the weapon 
        system and component core requirements, the technical data and 
        plant and equipment needed to conduct depot level repair. Core 
        requirements are those depot support requirements measured in 
        annual DLHs performed at our organic depots that are necessary 
        to sustain warfighting weapon systems.

    The Army has implemented an integrated acquisition process that 
considers the Army depots early in the life-cycle. This is done through 
coordination between the AMC LCMC IMMC and Depot logisticians and the 
PM's staff. AMC logisticians are now assisting PMs in completing their 
CLA, CDA, and DSOR analyses as required.
    General Panter. The Marine Corps recognizes and normally acts in 
accordance with the Integrated Defense Acquisition, Technology, and 
Logistics Life Cycle Management System, which calls for the 
consideration of organic depot capabilities during the Technology 
Development Strategy portion of the acquisition process. This is done 
prior to the Milestone A decision; however, due to the rapid 
acquisition of some of our major weapon systems such as the MRAP and 
LVSR, the maintenance considerations have been deferred and the gap 
filled by the use of Contractor Logistics Services and Warranties.
    General Reno. The Air Force requires a core analysis at Milestone A 
to facilitate the linkage between the acquisition community and the 
logistics community. This core analysis is part of the depot source of 
repair process incorporating 10 U.S.C. Sec. 2464 (Core) and 10 U.S.C. 
Sec. 2466 (50/50) and provides the program office with a point of 
contact at the Air Force-assigned organic depot. This process links the 
subject matter expertise at the Air Logistics Centers to the program 
office to ensure depot considerations are incorporated in the life 
cycle sustainment plan.
    Admiral Burke. The Navy does believe that acquisition decisions 
could be better connected to both life cycle maintenance and organic 
depot system considerations. An enabler would be a clear and accurate 
Maintenance Plan developed earlier in the acquisition lifecycle.
    To promote the need for early planning, the Navy has developed 
Strategic Planning Imperatives for Industrial Depot Maintenance (SPI 
for IDM). The SPI for IDM identifies key planning activities to help 
Program Managers develop the industrial depot maintenance portion of 
their overall sustainment plan.
    The main focus of the planning effort, in accordance with DODI 
5000.02, is initiation of the industrial depot maintenance planning 
processes and procedures early in the acquisition lifecycle. The 
continuous analysis will result in actual decisions being made as early 
as possible in the lifecycle. When the program becomes stable and 
available information has matured to the appropriate level, the final 
Core Determination (Title 10 U.S.C. 2464) and Depot Source of Repair 
decision processes can be performed.

              CHANGES TO NAVY FLEET MAINTENANCE OPERATIONS

    78. Senator Ayotte. Vice Admiral Burke, in a recent interview, the 
Secretary of the Navy, Ray Mabus, signaled that the Navy needs to steer 
away from the fleet response plan, with its short-notice ``surge'' 
deployments, in favor of a more predictable schedule with enough down-
time for maintenance and personnel. Yet, in your written testimony, you 
state that: ``the fleet response plan remains the foundation for Navy 
force generation, and has proven to optimize returns on training and 
maintenance investments.'' You go on to admit that the high intensity 
of operations has increased the risk of nondeployed forces being ready 
for new assignments on short notice, such as the recent operation in 
Libya. How is the Navy steering away from the fleet response plan?
    Admiral Burke. While Navy remains committed to the principles of 
the Fleet Response Plan (FRP), the current pace of deployed operations 
is not sustainable. FRP was designed to provide surge capacity to 
respond to emergencies. The use of that extra capacity has become 
common and many battle groups have deployed twice in the same 
operational cycle stressing ships and crews.
    Navy is working with OSD to develop a more sustainable balance 
between training, maintenance and PERSTEMPO versus the worldwide demand 
for our forces, to ensure we can both meet demand and reach expected 
service life for our platforms.
    Navy global presence will remain important as current operations 
wind down, but returning to a more predictable deployment schedule will 
be essential to resetting the material condition of our Fleet.

    79. Senator Ayotte. Vice Admiral Burke, what is the Navy doing to 
establish a more predictable schedule for ship maintenance?
    Admiral Burke. The Navy's maintenance schedules are driven first by 
operational schedules and then by the availability and capacity of the 
industrial base to complete the work, when the ships are available. 
Ship maintenance schedules are developed years in advance working in 
conjunction with operational planners. The vast majority of scheduled 
depot availabilities occur as scheduled. The Navy is working closely 
with the combatant commanders to ensure maintenance issues are 
considered as part of the Request for Forces process that should limit 
churn and provide even more predictability to the ship maintenance 
schedules.

                    AFLOAT MAINTENANCE AND READINESS

    80. Senator Ayotte. Vice Admiral Burke, the Navy has proposed an 
efficiency initiative to move 2,200 sailors from ashore jobs to afloat 
jobs to perform ship maintenance. Secretary Mabus described it as: 
``some of the preventive maintenance you can do afloat.'' As the top 
logistician for the Navy, how efficient is it for the Navy to perform 
ship maintenance while afloat?
    Admiral Burke. Having Sailors perform maintenance that is within 
organization level capability is both efficient and effective. When 
sailors perform routine preventative and corrective maintenance, they 
gain greater in-depth knowledge of their equipment, develop a stronger 
sense of ownership and pride in its condition and appearance, and 
maintain their equipment in better working order. The increased skill 
level and sense of ownership directly impacts the readiness of deployed 
ships and submarines operating far from intermediate and depot repair 
facilities by enabling the crew to perform critical at-sea repairs when 
needed, in lieu of returning to port, and reduces reliance on overseas 
maintenance organizations or fly away repair teams.
    It is also more efficient for intermediate and depot repair 
facilities to conduct the more complex maintenance for which they are 
better suited instead of performing organizational level preventative 
and corrective maintenance; organizational level maintenance does not 
require the same level of experience, controls or oversight that 
intermediate and depot repair facilities are designed to provide.
    Additionally, by conducting maintenance when needed by sailors 
afloat, ships are in better operational condition when arriving for 
depot availabilities, thereby reducing the net maintenance requirement 
and ultimately the cost of maintaining the Fleet.

    81. Senator Ayotte. Vice Admiral Burke, wouldn't it be more 
efficient and effective for ashore crews or the shipyards to accomplish 
all maintenance items at one time as opposed to requiring a ship's crew 
to assume responsibility for certain items?
    Admiral Burke. No, sailors must perform preventive and corrective 
maintenance while deployed in order to maximize their ship's 
operational readiness.
    When sailors perform routine preventative and corrective 
maintenance they gain a greater in-depth knowledge of their equipment, 
develop a stronger sense of ownership and pride in its condition and 
appearance, and maintain their equipment in better working order. The 
increased skill level and sense of ownership directly impacts the 
readiness of deployed ships and submarines operating far from 
intermediate and depot repair facilities by enabling the crew to 
perform critical at-sea repairs when needed, in lieu of returning to 
port, and reduces reliance on overseas maintenance organizations or 
fly-away repair teams.
    It is also more efficient for intermediate and depot repair 
facilities to conduct the more complex maintenance for which they are 
better suited instead of performing organizational level preventative 
and corrective maintenance; organizational level maintenance does not 
require the same level of experience, controls or oversight that 
intermediate and depot repair facilities are designed to provide.
    Additionally, by conducting maintenance when needed by sailors 
afloat, ships are in better operational condition when arriving for 
depot availabilities, thereby reducing the net maintenance requirement 
and ultimately the cost of maintaining the Fleet.

    82. Senator Ayotte. Vice Admiral Burke, isn't the Navy just 
transferring workload from an ashore force to a ship's crew?
    Admiral Burke. Workload is not being transferred from ashore to 
ship's crew. Increased shipboard manpower is being provided to improve 
damage control/firefighting readiness, safety of navigation, 
preservation, material readiness, and underway watch standing. These 
additional personnel will perform preventive and corrective maintenance 
and more efficiently distribute the workload.

    83. Senator Ayotte. Vice Admiral Burke, how does this affect the 
ship's readiness and effectiveness while deployed?
    Admiral Burke. Increasing the billets on ships will restore the 
workforce necessary to support damage control/firefighting readiness, 
safety of navigation, preservation, material readiness, and underway 
watch standing for the ship's crew, both while deployed and in 
homeport. When sailors perform preventative and corrective maintenance 
assigned to them, they gain a greater in-depth knowledge of their 
equipment, develop a stronger sense of ownership and pride in its 
condition and appearance, and thereby maintain the equipment in better 
working order. The increased skill level and sense of ownership 
directly impacts the readiness of deployed ships and submarines by 
enabling the crew to perform critical at-sea repairs while operating 
far from intermediate and depot repair facilities, in lieu of returning 
to port. This in turn reduces reliance on overseas maintenance 
organizations, contracted facilities, and fly away repair teams.

    84. Senator Ayotte. Vice Admiral Burke, does this mean that ships 
will deploy without the full maintenance schedule being accomplished, 
thus reducing ship readiness?
    Admiral Burke. No, prior to deployment, Navy vessels are given a 
pier-side availability period to prepare for deployment. During that 
availability, emphasis is given to clearing corrective maintenance 
items and grooming communications, combat systems, engineering, 
electronic and aviation systems, in order to ensure the highest 
possible reliability during deployment.

                  AIR FORCE WEAPONS SYSTEM SUSTAINMENT

    85. Senator Ayotte. Lieutenant General Reno, in the area of 
aircraft maintenance and sustainment, the Air Force realized during 
preparation of the 2012 budget that it was $7 billion short through the 
next 5 years. In response, Air Force leaders approved a $4 billion 
increase to sustain 400 new airframes and existing legacy weapon 
systems, while looking for efficiencies to address the remaining $3.0 
billion. The Air Force then initiated an end to end analysis to more 
accurately define aircraft maintenance requirements and link them to a 
readiness metric. The result of these changes is that the fiscal year 
2012 funding will support 84 percent of validated requirements vice an 
originally planned 80 percent of requirements. Have any of the 
efficiencies proposed by the Air Force actually resulted in a validated 
savings? If not, what confidence do you have that they will?
    General Reno. WSS savings have been identified and validated for 
fiscal year 2012. In fiscal year 2012, $605 million in WSS efficiencies 
were identified and submitted in the fiscal year President's budget 
cycle. The Air Force is committed to providing the warfighter with the 
same capability levels while achieving these efficiencies. To this end, 
metrics have been developed to track efficiencies as they are realized 
during the year of execution.

    86. Senator Ayotte. Lieutenant General Reno, since the requirements 
to safely maintain an aircraft over its lifespan are a matter of 
engineering and physics, which are difficult to reduce through 
efficiencies, is the Air Force in reality reducing maintenance efforts 
on each aircraft in order to respond to decreased funding levels?
    General Reno. For fiscal year 2012, WSS efficiencies represent $605 
million of the $3 billion WSS FYDP bogey. These efficiencies were 
identified via a thorough review of sustainment requirements using a 
three-pronged approach. First, there was a review of Aircraft and 
Missile Requirements where savings were realized from hour reductions 
for organic Programmed Depot Maintenance (PDM) packages. Second, a deep 
dive scrub of over 5000 sustainment tasks for WSS was accomplished 
resulting in the consolidation of mishap/battle damage funding 
management and reductions in PDM schedules based on a transition from 
hours/calendar driven inspections to requirements driven inspections. 
Lastly, a review of depot and supply chain processes was accomplished. 
Overall, these actions did result in minor reductions to maintenance 
efforts for some aircraft; however, they also included increased 
maintenance efforts for other aircraft. Finally, and most importantly, 
all recommended changes in maintenance efforts were only accepted after 
thorough engineering analysis and safety risk assessments.

    87. Senator Ayotte. Lieutenant General Reno, in the past 5 years, 
what has historically been the percentage of aircraft maintenance 
requirements funded each year?
    General Reno. Prior to 2007, there was no Centralized Asset 
Management office serving as the Executive Agent for WSS programming 
and execution. Therefore there is no consolidated WSS requirements data 
available prior to that period. In fiscal year 2007, WSS was funded at 
76 percent of the total requirement with baseline funding and 95 
percent including OCO funding. In fiscal year 2008, WSS was funded at 
73 percent of the total requirement with baseline funding and 90 
percent including OCO funding. In fiscal year 2009, WSS was funded at 
72 percent of the total requirement with baseline funding and 92 
percent including OCO funding. In fiscal year 2010, WSS was funded at 
69 percent of the total requirement with baseline funding and 84 
percent including OCO funding. In fiscal year 2011, WSS was funded at 
65 percent of the total requirement with baseline funding and 82 
percent including OCO funding. For fiscal year 2012, WSS is programmed 
at 70 percent of the total requirement with baseline funding and 85 
percent including OCO funding.

    88. Senator Ayotte. Lieutenant General Reno, are we taking a risk 
for the 16 percent of maintenance requirements that go unfunded each 
year?
    General Reno. The 16 percent unfunded requirement risk is primarily 
being assumed in areas with limited impact to near-term readiness, such 
as software, sustaining engineering and technical orders. This risk is 
further mitigated by the annual, enterprise-wide prioritization of 
requirements to ensure the highest priority systems are funded in the 
year of execution. For our currently defined force structure, historic 
funding levels including OCO funds, have proven sufficient in meeting 
combatant commander mission requirements; however, sustained WSS 
funding at less than these levels, or loss of OCO funds, may lead to 
increased risk of aircraft groundings.

    89. Senator Ayotte. Lieutenant General Reno, is this risk 
compounded each year?
    General Reno. Without careful management and oversight, the risk 
associated with unfunded WSS requirements can grow significantly from 
year to year. The Air Force, however, strives to minimize and mitigate 
this risk by assuming it in areas with limited impact to near-term 
readiness, such as software, sustaining engineering and technical 
orders. This risk is then further mitigated by the annual, enterprise-
wide prioritization of requirements to ensure the highest priority 
systems are funded in the year of execution. Any remaining unfunded 
requirements are then revalidated and reprioritized before being 
included in the following year's Program Objective Memorandum 
requirements.

                AIR FORCE COMPETITION FOR ENGINE REPAIRS

    90. Senator Ayotte. Lieutenant General Reno, the Air Force recently 
saved maintenance funds by increasing competition in the KC-10 Extender 
Logistics Support program for engine spare and repair parts at Port San 
Antonio, TX. Given the Weapons Systems Acquisition Reform Act (WSARA) 
of 2009, section 805 of the 2010 NDAA, and the evolving DOD 
efficiencies initiatives, what else is the Air Force doing to help 
facilitate competition in the sustainment of major weapons systems?
    General Reno. The Air Force is more conscientious given reduced 
budgets and long-term sustainment of weapons system platforms. As such, 
the Air Force is taking a cohesive approach that looks at both our 
legacy platforms and our new platforms in terms of data rights and 
ownership. Where our legacy platforms did not include full ownership of 
data rights, thus limiting competition, the Air Force has initiated a 
business case analysis. The analysis will determine which data rights 
are required to organically support the sustainment of our legacy major 
weapons systems. Where new platforms are established, the Air Force is 
taking a proactive planning approach by determining what type of data 
rights are required for both acquisition and sustainment. This approach 
will lend itself to greater competition at various milestones 
throughout the acquisition and sustainment lifecycles.

    91. Senator Ayotte. Lieutenant General Reno, can the lessons 
learned of lowering O&M costs through competition with the KC-10 
Extender be applied to other airframes and engines?
    General Reno. Yes, the KC-10 engine overhaul is an example where 
competition realized cost savings. The KC-10 engine program was able to 
do so because of two key conditions. First, the KC-10 engine is a 
commercial derivative. This condition typically ensures a robust 
industrial base with several vendors capable of performing the overhaul 
work. The second is that the Air Force owned the data rights to the 
necessary maintenance overhaul manuals. Government ownership of this 
data enabled the Air Force to broadly compete the overhaul work. The 
combination of a robust industrial base and government ownership of the 
maintenance data created the opportunity to realize cost savings. The 
Air Force is committed to open competition, and in cases where these 
conditions exist, the Air Force actively pursues this strategy and the 
opportunity to achieve cost savings.

    92. Senator Ayotte. Lieutenant General Reno, what options are 
available to the Air Force to expand or increase competition in life 
cycle sustainment costs?
    General Reno. The Air Force requires the use of a competitive 
strategy prior to each milestone for each Acquisition Category program. 
Each competitive strategy is included in the Life Cycle Management Plan 
and addresses how the program will obtain technical data, computer 
software and documentation, and associated intellectual property rights 
necessary for operation, maintenance, long-term sustainment and 
competition. In order to reduce lifecycle costs, the Air Force conducts 
should-cost analyses and continues to pursue open architecture 
initiatives to achieve design stability, mature technologies, and 
affordable solutions. The Air Force is also requiring more frequent re-
competes of knowledge-based services, and service contracts valued at 
more than $1 billion are required to include productivity improvements 
and cost efficiency objectives. The Air Force is committed to utilizing 
competition to the greatest extent possible to maximize savings for the 
taxpayer.

                     READINESS OF NONDEPLOYED UNITS

    93. Senator Ayotte. Lieutenant General Panter, Marine Corps 
readiness for nondeployed units continues to erode year-to-year even 
though Congress has authorized an expansion of Marine Corps end 
strength to the current 202,000 level and has funded billions of 
dollars for equipment reset, consistent with the President's and the 
Marine Corps' requests. Despite these substantial investments, the 
Marine Corps has not seen the erosion of nondeployed readiness 
stabilize or start to improve. Since the Marine Corps considers 
themselves America's September 11 force, this is a matter of great 
concern. In recent weeks, we have seen unanticipated, early deployment 
of the Marine Corps in support of Libyan operations, as well as for 
humanitarian and recovery operations for Japan. In some cases, full 
combat readiness across the entire spectrum of conflict is not 
essential such as for operations in support of a humanitarian mission 
in Japan. But in other cases, such as in support of the Libyan 
operations, exactly what combat skills may be called for is much harder 
to judge. Why have Marine Corps readiness rates for nondeployed forces 
not started to level off and then improve given the investment in end 
strength and equipment?
    General Panter. Despite significant investment in both end strength 
and equipment, the Marine Corps has not realized significant 
improvement in the readiness of nondeployed forces because of a steady 
increase in Marine Corps global commitments since 2005.
    In June 2005, the Marine Corps active duty end strength was 
approximately 177,000. At that time, the Marine Corps had approximately 
25 percent of its operating forces forward-deployed in support of OIF 
and other combatant commander requirements. With a deployment-to-dwell 
ratio for many Marine units less than 1:1, sustaining that level of 
commitment came at a tremendous cost to the individual and collective 
readiness and welfare of Marines and their families. Marine units were 
in a constant cycle of ``deploy-train-deploy'' within a highly 
compressed time period. Today, the Marine Corps active duty end 
strength is approximately 202,000 with around 25 percent of the 
operating forces consistently deployed. This represents an aggregate 
increase in combatant commander demand for Marine forces. Simply put, 
the Marine Corps is ``doing more with more [resources]''. A critical 
difference between now and 2005 is that with a larger force and more 
resources, the Marine Corps is able to better sustain current 
commitments based on increasing combatant commander demand, which is 
greater than is was 5 years ago. In 2005, the deployment-to-dwell ratio 
was often less than 1:1, now the deployment-to-dwell ratio for most 
units is approaching 1:2.

    94. Senator Ayotte. Lieutenant General Panter, if the current pace 
of combat operations in Afghanistan continues, how much lower do you 
expect nondeployed unit readiness rates to decline?
    General Panter. It is difficult to precisely forecast future 
readiness based on current conditions; however, after nearly 10 years 
of combat operations, we can draw some basic conclusions. Sustaining 
current operations around the globe has reduced the aggregate readiness 
of the nondeployed force. A generally consistent figure is that 
anywhere from 60-65 percent of the nondeployed force--Active and 
Reserve--report degraded levels of readiness. This figure fluctuates 
based on scheduled rotations of units to and from Afghanistan. It is 
also affected by the extent to which the Marine Corps must commit 
forces to new requirements, such as crisis response. Another consistent 
figure is that the Marine Corps has approximately 24-28 percent of its 
operating forces end strength deployed at any given time. To sustain 
such a large forward-deployed presence, the Marine Corps must commit 
most of the nondeployed force to training to relieve those forces which 
are deployed. The Marine Corps can sustain this commitment under 
current conditions for as long as the Nation requires, acknowledging 
that the readiness of the nondeployed force will not significantly 
improve until reconstitution of the force is well underway (post-OEF).
    Equipment supply is a resource area of particular concern and is 
the primary readiness detractor for the nondeployed force. Lack of 
equipment due to sustainment of current operations impacts the ability 
of nondeployed forces to respond to potential contingencies. Equipment 
shortfalls also make it more difficult for nondeployed units to train 
to core skills earlier in their predeployment training cycle in 
preparation for OEF or other combatant commander requirements. The 
commitment of a seventh infantry battalion and its associated equipment 
to Afghanistan earlier this year has further strained the ground 
equipment available to nondeployed forces.

    95. Senator Ayotte. Lieutenant General Panter, how would you 
describe the level of risk for operations other than those in 
Afghanistan?
    General Panter. The Marine Corps is responding to the Nation's 
demands with a unique combination of expeditionary land-based and 
amphibious forces, but such commitment comes at a cost to the readiness 
of nondeployed units. Sustaining current operations has reduced the 
aggregate readiness of the nondeployed force. Strategically, low levels 
of readiness for the nondeployed force increases risk in the timely and 
successful execution of crisis response and major contingency 
operations (war plans). If the Marine Corps were required to respond to 
a second major contingency, the Marine Corps could respond, but would 
face significant challenges in forming a fully resourced and cohesive 
MEF-level MAGTF to meet war plan timelines. For a smaller scale crisis 
or contingency, readiness levels of the nondeployed force would affect 
the Marine Corps' ability to respond, but to a lesser degree. For 
example, over the past 18 months, the Marine Corps had successfully 
responded to crises in Haiti, Pakistan, Korea, Egypt, Libya, Japan, and 
Yemen. It would be inherently more difficult to respond to a second 
major contingency while sustaining current global and OEF requirements.

                   RESET COSTS AND DEFERRED EXPENSES

    96. Senator Ayotte. Lieutenant General Panter, the Commandant has 
testified that the bill for reset of Marine Corps units will be about 
$10.6 billion. Whether OCO wartime funding will be available after our 
withdrawal from Afghanistan as planned in 2014 is not known at this 
time. If such wartime funds are not available, substantial amounts of 
funding for war-related expenses may be required from within the base 
budget for DOD. Yet, the amount requested for reset of Marine Corps 
equipment in fiscal year 2012 is only $2.5 billion, less than the $3.1 
billion requested for fiscal year 2011. The Commandant has said that 
there will be about $5 billion in additional reset costs that won't be 
addressed until after marines have withdrawn from Afghanistan. Isn't 
there something Congress can do to get ahead of this reset curve now, 
while wartime funds are available?
    General Panter. Fiscal year 2012 funding is adequate to support 
depot maintenance and WSS for deployed and nondeployed units. The 
Marine Corps' $2.5 billion request in fiscal year 2012 for reset is 
directly related to the repair and replacement costs of OCOs in Iraq 
and Afghanistan. In many ways our ability to conduct reset in fiscal 
year 2012 is constrained by the lack of equipment that has returned for 
reset actions. The equipment redeployed from Iraq to Afghanistan in 
support of the 2009 surge included most of our deployed medium tactical 
fleet, the majority of our Mine Resistant Armor Protected (MRAP) fleet, 
light armored reconnaissance vehicles, other hard-to-move equipment 
items, and many theater-specific items. This same equipment comprises a 
significant portion of the Marine Corps' total reset liability. Thus 
much of our reset requirement will remain deferred as long as this 
equipment continues to be employed in Afghanistan. Moreover, as long as 
the war continues, our future costs for reset will grow accordingly.

    97. Senator Ayotte. Lieutenant General Panter, is there no more 
capacity left in either civilian industry or the Marine Corps depot 
system that would allow us to repair or replace more war-damaged 
equipment now?
    General Panter. Our organic maintenance depots have the flexibility 
to expand with the needs of the Marine Corps. We are able to increase 
capacity at our depots, as well as contract with commercial sources to 
rapidly repair war-damaged equipment. The Marine Corps is capitalizing 
on this capability with the Principal End Item (PEI) Rotation program 
to cycle war-damaged equipment through the depots, and return fully 
mission capable equipment to the warfighter. However, because the 
Marine Corps transferred large quantities of equipment retrograded from 
Iraq to support the increased footprint in Afghanistan; most of the 
equipment in need of depot repair is still in theater. Our ongoing 
operational requirements and the transit times associated with cycling 
equipment have allowed the depots to operate at a steady state, without 
huge surges in demand.
    When the Marine Corps withdraws from Afghanistan, we must quickly 
return mission capable equipment sets to operating forces and strategic 
programs in order to ensure our ability to decisively respond to future 
missions. This will require the full use of our organic depots, as well 
as the strategic use of commercial repair sources to rapidly reset the 
equipment that has sustained significant wear throughout the war.

                             RECONSTITUTION

    98. Senator Ayotte. Lieutenant General Panter, separate and apart 
from reset needs, the Marine Corps has discovered through nearly a 
decade of combat that its unit specific Tables of Equipment needed 
major revisions for today's decentralized combat. This has meant, for 
example, far more radio equipment and ground combat vehicles for each 
unit than had been authorized in the Tables of Equipment that existed 
prior to September 11. These reconstitution costs for modernized 
equipment sets are currently estimated to be at least $5 billion in 
addition to the $10.6 billion in reset costs. Yet, in the fiscal year 
2012 budget, equipment reconstitution is funded at only $253 million. 
At that rate, it would take 20 years to buy $5 billion in new 
equipment, drawing the time out for so long that it is almost certain 
the equipment bought at the start of the process would have to be 
replaced due to obsolescence before completing the updates to all 
Marine Corps units. Why are such pressing needs for new equipment 
funded at so low a rate?
    General Panter. The reconstitution requirement of $5 billion is an 
amount entirely separate from our reset costs. This requirement is 
specifically related to table of equipment shortfalls; therefore, if 
funded, it will directly contribute to increased nondeployed readiness 
levels. While we have begun to address our reconstitution shortfall by 
requesting $253 million in fiscal year 2012 for equipment procurement, 
the Marine Corps has many equipment deficiencies (as evidenced by the 
degraded state of nondeployed Marine Corps unit readiness) that 
additional funding could be applied against immediately. However, the 
Marine Corps will responsibly execute only the funds necessary to 
reconstitute the force to meet projected future operational 
requirements.
    Efforts to Close the Gap: to close this reconstitution gap, we are 
developing the core capabilities of a Middleweight Force in the post-
OEF era. The results of these efforts (including our Force Structure 
Review Group, Lighten the MAGTF initiative, Table of Equipment reviews, 
and others) will shape the decisions on what equipment to reset and how 
best to reconstitute the force so that we are postured to respond 
across the range of military operations. The processes in motion to 
define our post-OEF force will inform our decisions to smartly program 
our acquisitions to modernize the force in the near future.

    99. Senator Ayotte. Lieutenant General Panter, how does the Marine 
Corp plan to get ahead of the curve for modernization of its Tables of 
Equipment since clearly units can't wait 20 years for new gear that we 
know will be needed in combat based on the experiences of the last 10 
years?
    General Panter. Our OCO experiences have shown us that our legacy 
20th century tables of equipment (T/E) have become simply inadequate 
with the demands of the modern battlefield. The projected estimate for 
reconstituting our T/E--as previously stated--is $5 billion over fiscal 
year 2012-fiscal year 2015. As the force structure review is 
implemented, we will continue with a deliberate assessment of the 
modernization requirements for equipment that optimizes our post-
Afghanistan posture. Our Service Reconstitution Strategy will guide the 
identification of emerging requirements for refining the capabilities 
of the Middleweight Force, our support to the combatant commanders, our 
Service level prioritization, and resource allocation decisions. We 
will continue to satisfy equipment requirements across the Enterprise 
with both reset actions and needed investments in reconstituting T/Es.

                       LPD-17 CLASS-WIDE PROBLEMS

    100. Senator Ayotte. Lieutenant General Panter, the Navy's LPD-17, 
San Antonio class, has been plagued with materiel readiness problems 
throughout its history such that the lead ship has spent far more time 
being repaired since its delivery to the Navy than it has spent 
deployed with embarked marines. Is the Marine Corps satisfied with the 
progress that is being made to correct the materiel readiness problems 
with the San Antonio class LPDs?
    General Panter. The materiel readiness issues confronting the LPD-
17 class are significant; however, all indications are that the 
resources and policy changes that the Navy has implemented to address 
these issues are producing good results. The positive results of San 
Antonio's recent sea trials demonstrate that the changes the Navy has 
instituted are working, and should soon restore the ship to full 
operational status.
    Efforts to remediate problems with the LPD-17 class have addressed 
other factors which contributed to the obvious materiel shortcomings. 
These efforts include significant, program-wide changes in oversight, 
training, and quality assurance means that will enable the class to 
achieve combat readiness as quickly and safely as possible. We 
anticipate that San Antonio, and the sister ships of her class, will 
prove valuable and dependable additions to the amphibious fleet.

    101. Senator Ayotte. Lieutenant General Panter, what is the level 
of risk to the Marine Corps if the LPD-17s continue to have class-wide 
problems that make them unreliable or unable to deploy to support 
operational missions?
    General Panter. Persistent non-availability of the LPD-17 class 
vessels may have a significant impact on the Marine Corps' ability to 
perform its amphibious mission and satisfy global demand for Marine 
Forces. LSD-17 non-availability, coupled with the planned 
decommissioning of older LPD class vessels, will result in a net 
aggregate shortfall in the number of ships that are available to 
perform missions globally. As currently planned, the older LPD class 
vessels, including USS Cleveland and USS Ponce, will decommission prior 
to a replacement ship being commissioned. Delayed delivery schedules 
and class-wide materiel issues with the LPD-17 class ships, coupled 
with a continued aggressive decommissioning schedule, jeopardize our 
ability to support the demand of combatant commanders.

              COORDINATION WITH SPECIAL OPERATIONS COMMAND

    102. Senator Ayotte. Lieutenant General Stevenson, Special 
Operations Forces (SOF) are heavily dependent on enabling support from 
the Army to conduct operations around the world. As U.S. forces draw 
down from Iraq and eventually Afghanistan, the demand for SOF is likely 
to remain steady. As such, U.S. Special Operations Command (SOCOM) is 
in the initial stages of creating a force generation model based on the 
ARFORGEN cycle to increase predictability in deployments as well as 
improve coordination between the Army and SOCOM for joint pre-
deployment training and the provision of materiel support. What role is 
the Army playing in assisting SOCOM to develop this new force 
generation model to ensure enabling personnel and equipment are 
available and properly synchronized?
    General Stevenson. The Army continues to support the development of 
SOCOM's force generation model, also known as SOFORGEN, by coordinating 
with SOCOM to incorporate the tiered support construct and create SOCOM 
requirements in the Global Force Management process. The tiered support 
construct accounts for organic growth to Special Operations Forces 
(Tier I), specific support of enablers under operational control to 
SOCOM (Tier II), and general support enablers allocated to the theater 
commanders (Tier III).
    The Army and SOCOM are composing a memorandum of agreement that 
will formalize the alignment of SOFORGEN and ARFORGEN for enablers in 
support of SOF current demands for OEF, OND, and future emerging 
events. Future planning is on going with Total Army Analysis (TAA) and 
Rules of Allocation (ROA) to establish regionally aligned brigades with 
an understanding of SOF requirements in support of Geographic Combatant 
Commanders.

                      NAVY SURFACE SHIPS READINESS

    103. Senator Ayotte. Vice Admiral Burke, I understand that the Navy 
recognizes that it needs to improve maintenance on its surface ships to 
repair problems that have developed over the last several years in 
surface ship materiel readiness. However, the Navy's budget request 
shows funding for ship maintenance declining from 100 percent of 
projected requirements in 2010 to 97 percent in the 2011 request and 94 
percent in the 2012 budget request. The total amount of ship 
maintenance funding is going down, from $7.5 billion in 2010, to $7.3 
billion in the 2011 request, and $7.2 billion in the 2012 request. 
Equally troubling is the amount of annual deferred maintenance is 
increasing from $0 in 2010 to $172 million in 2011, and $367 million in 
the 2012 budget request.
    Since funding for maintenance on submarines and aircraft carriers 
is traditionally protected, this downward trend in funding looks like 
it could fall more heavily on the Navy's surface combatants. Why does 
the Navy's budget not reverse the upward trend of deferred maintenance?
    Admiral Burke. Even though the percentage of the Ship Maintenance 
requirement funded has fallen, the baseline maintenance budget request 
has actually increased from $4.3 billion in fiscal year 2010 to $4.9 
billion in fiscal year 2012. This increase is a reflection of the 
Navy's commitment to funding the surface ship maintenance requirement. 
Additionally, investments being made in the Surface Maintenance 
Engineering Planning Program (SURFMEPP), and enhanced assessments of 
our surface ships provides us with more insight on how to best manage 
risk and ensures that deferred work will be properly documented and 
tracked for completion in future availabilities. Navy remains committed 
to sustaining the force structure required to implement the Maritime 
Strategy.
    The Navy's total budget submission reflects the best balance of 
risk and available resources across the Navy portfolio.

    104. Senator Ayotte. Vice Admiral Burke, is the Navy's 2012 budget 
request consistent with its goals of improving surface ship readiness?
    Admiral Burke. Navy's combined fiscal year 2012 baseline and OCO 
budget submissions fund 94 percent of the projected depot ship 
maintenance requirements necessary to sustain global presence 
requirements, and continue to improve overall surface ship readiness. 
This represents the best balance of risk and available resources across 
the Navy portfolio.

    105. Senator Ayotte. Vice Admiral Burke, how much risk is the Navy 
taking on in terms of surface ship readiness with its current year 
budget submission?
    Admiral Burke. Navy's combined fiscal year 2012 baseline and OCO 
budget submissions fund 94 percent of the projected depot ship 
maintenance requirements necessary to sustain global presence 
requirements. The resultant shortfall of $367 million equates to 
deferral of surface ship availabilities in order of priority. First 
deferred would be 34 surface ship non-docking availabilities, followed 
by 3 surface ship docking availabilities, and lastly by the private 
sector portion of seven Carrier Incremental Availabilities. This 
represents the best balance of risk and available resources across the 
Navy portfolio.
    Additionally, Navy has made investments in the past several budget 
cycles in the SURFMEPP and enhanced assessments of our surface ships. 
These investments have provided additional insights on how to best 
manage risk and ensure deferred work is properly documented and 
completed in future availabilities.

                       NAVY EXPEDITIONARY FORCES

    106. Senator Ayotte. Vice Admiral Burke, your statement makes 
mention of Navy Expeditionary Forces--a unique naval capability whose 
forces have been around since World War II. Expeditionary Navy forces 
support global missions that expand and enhance combatant commander's 
capabilities by deploying security, construction, logistics, explosive 
ordnance disposal (EOD), divers, and riverine forces. Your statement 
describes Navy Expeditionary Combat Command's (NECC) cost effective 
capabilities and force structure as an ``enduring mission'' which is 
heavily engaged in today's wars and there is a growing requirement for 
them in the future. Given that, would you please describe why nearly 60 
percent of NECC's budget is in the supplemental OCO budget and not in 
the baseline budget which is preferred by Congress and this committee?
    Admiral Burke. Navy Expeditionary Combat Command (NECC) has been 
heavily involved in support of operations in both Iraq and Afghanistan, 
exceeding programmed baseline levels of support. NECC's force is 
comprised of 51 percent mobilized reservists on a rotational basis to 
support the war effort. NECC's mission is clearly enduring, but due to 
the high operational tempo in theater, it requires significant amounts 
of OCO funding. Congress recognized this by moving $192.8 million from 
the NECC baseline budget to OCO in the fiscal year 2011 DOD 
Appropriations Bill.

                            NAVAL READINESS

    107. Senator Ayotte. Vice Admiral Burke, as you recall, the only 
priority that the Chief of Naval Operations (CNO) identified as 
unfunded in last year's budget submission was ship depot maintenance. 
Recently, there have been several amphibious and other combatant ships 
which have needed additional time and funding while they were 
undergoing shipyard maintenance--in some cases, keeping them from 
meeting their operational deployments. What is the Navy doing to ensure 
we get our ships through their shipyard periods on cost and on time?
    Admiral Burke. The investments made in the past several budget 
cycles in surface ship life cycle maintenance include enhanced 
assessments to improve our understanding of ship material condition, 
and establishment of the SURFMEPP to provide the Navy with centralized 
surface ship life cycle maintenance management, including engineered 
class maintenance plans, availability planning, and a formal work 
deferral process.
    The combination of enhanced assessments and a disciplined 
availability planning and execution process will minimize the impacts 
associated with discovery of unplanned repairs during execution, and 
result in better use of available maintenance funding to achieve 
surface ship expected service life and long-term readiness.

    108. Senator Ayotte. Vice Admiral Burke, to what extent does the 
2012 budget request fully fund the Navy's current requirement for ship 
depot maintenance?
    Admiral Burke. Navy's combined fiscal year 2012 baseline and OCO 
budget submissions fund 94 percent of the projected depot ship 
maintenance requirements. This will defer $367 million of maintenance, 
primarily in the Surface Force.

    109. Senator Ayotte. Vice Admiral Burke, to what extent does the 
2012 budget capture depot maintenance volume that has accumulated from 
chronic underfunding over time?
    Admiral Burke. The fiscal year 2012 budget (including OCO) 
resources the ship maintenance account to 94 percent of the total 
requirement. This includes all known deferrals from prior scheduled 
availabilities for ships that are scheduled for a maintenance 
availability during fiscal year 2012. This funding level represents the 
best balance between current force readiness and building the future 
force within available top line funding.

           MODERNIZING THE SURFACE FLEET AND FLEET READINESS

    110. Senator Ayotte. Vice Admiral Burke, without going into 
specific ship readiness levels, which gets into a classified area, 
there have been recent press reports describing Service-wide problems 
with preventive maintenance, surface-ship firefighting systems, 
corrosion, hull cracking, communication systems failures, steering and 
anchoring issues that made the ship unfit, and in some cases prevented 
ships from getting underway on time. In your view, how is ship 
readiness trending over the past 5 years, and what specific problems 
have been found?
    Admiral Burke. Recent indications are that the negative trend in 
ship readiness has been arrested and we may be starting to see some 
improvement. Data from the Board of Inspection and Survey shows failure 
rates hovering around 10 percent for most of the last 5 years, but in 
2010, the rate was reduced to 4 percent. Since a single year of 
performance does not represent a trend, Navy will continue to monitor 
surface ship readiness into the future.
    Specific problems identified included surface ship and intermediate 
maintenance center manning, accuracy of the class maintenance plans and 
material condition assessments, and formality of the maintenance 
planning and execution process. Corrective actions have been initiated 
for each identified problem, including increasing shipboard and 
Regional Maintenance Center (RMC) billets to improve organic shipboard 
and intermediate maintenance capability and capacity, and provide 
valuable sailor skill training. In addition, the Intermediate 
Maintenance Facility in Mayport is being reopened to provide waterfront 
maintenance support.
    Navy has partnered with the American Bureau of Shipping (ABS) to 
conduct detailed surveys of all surface ship classes using ABS 
standards. Navy also established the Surface Warfare Enterprise 
Assessment Program, supported by technical experts from the RMCs, to 
conduct ship material condition assessments.
    The SURFMEPP was established to provide centralized surface ship 
life cycle maintenance planning. Most surface ship Class Maintenance 
Plans have been updated and significant resources have been added to 
annual ship maintenance budgets, specifically targeted at surface ship 
maintenance. To ensure those resources are effectively used, SURFMEPP 
prepares Baseline Availability Work Packages for scheduled 
availabilities and then tracks the completion of all required 
maintenance actions.
    Navy also established the Senior Leadership Oversight Council to 
provide executive level control over surface force readiness concerns, 
and is confident that the steps taken will ultimately improve surface 
ship readiness.

    111. Senator Ayotte. Vice Admiral Burke, what is the Navy doing to 
correct these deficiencies and reverse this trend?
    Admiral Burke. Initiatives are currently underway to reverse 
negative surface ship readiness trends, including increasing shipboard 
and RMC billets to improve organic shipboard and intermediate 
maintenance capability and capacity and valuable sailor skill training. 
In addition, the Intermediate Maintenance Facility in Mayport is being 
reopened to provide waterfront maintenance support.
    Navy has partnered with the ABS to conduct detailed surveys of all 
surface ship classes, using ABS standards. Navy also established the 
Surface Warfare Enterprise Assessment Program, supported by technical 
experts from the RMCs, to conduct ship material condition assessments.
    The SURFMEPP was established to provide centralized surface ship 
life cycle maintenance planning. Most surface ship class maintenance 
plans have been updated and significant resources have been added to 
annual ship maintenance budgets, specifically targeted at surface ship 
maintenance. To ensure those resources are effectively used, SURFMEPP 
prepares Baseline Availability Work Packages for scheduled 
availabilities and then tracks the completion of all required 
maintenance actions.

            OPERATIONS AND SUPPORT AND JOINT STRIKE FIGHTER

    112. Senator Ayotte. Lieutenant General Reno, last year U.S. Navy 
Naval Air Systems Command (NAVAIR) effectively determined that the 
Marine Corps and the Navy's versions of the Joint Strike Fighter (JSF) 
may end up being too expensive to operate. Specifically, it found that, 
with each flight-hour possibly costing about $31,000 in 2029, compared 
with about $19,000 per flight hour for current F/A-18 Hornets and AV-8B 
Harriers, the operating cost associated with the Navy's versions of the 
JSF may be considerably higher than the costs to operate the legacy 
aircraft they are intended to replace. Has the Air Force reviewed and 
independently validated NAVAIR's analysis. If so, do you agree with its 
finding on the expected operating costs of the JSF? If so, what is your 
sense of what this could mean for the viability of the Air Force's JSF 
program and the kind of mix we can expect in terms of the Air Force's 
future strike fighter force?
    General Reno. The Air Force has reviewed NAVAIR's analysis and 
determined that the operating costs for all three of the JSF variants 
are higher than originally estimated. OSD CAPE also conducted an O&S 
cost estimate for JSF and their estimate is consistent with the 
previous Air Force and Navy cost estimates. These estimates also 
demonstrated that the operating costs of the Air Force's F-35A 
Conventional Take-Off and Land variant will be less than the Short 
Take-Off and Vertical Land and Carrier JSF variants. The Air Force is 
currently working with our Sister services, the JSF Joint Program 
Office, and the prime contractor, Lockheed Martin, in an aggressive 
effort to review the JSF sustainment strategy in order to assess means 
to reduce total life cycle costs. This should result in recommendations 
to reduce costs by the end of the year.
    While the Air Force expects the operating costs for our F-35A fleet 
to be higher than our legacy F-16 fleet it is intended to replace, the 
5th generation capabilities of the JSF will allow our warfighters to 
operate and succeed in Anti-Access/Area Denied environments, which our 
legacy fleet will not be able to do against tomorrow's advanced 
threats. Because of these fifth generation capabilities, the F-35 
remains a key enabler to guarantee and maintain air dominance for the 
foreseeable future.

    113. Senator Ayotte. Lieutenant General Reno, to what extent is 
NAVAIR's assessment (and the Air Force's validation of that assessment) 
reflected in the Air Force's current budget proposal?
    General Reno. The Air Force's fiscal year 2012 budget proposal is 
in line with the NAVAIR assessment and is consistent with OSD guidance 
to fund the program to the OSD CAPE estimate.

                    F-22 RAPTOR SUSTAINMENT STRATEGY

    114. Senator Ayotte. Lieutenant General Reno, this committee has 
concerns about the cost associated with operating and sustaining the F-
22 Raptor. I understand that we just signed a cost-reimbursable 
contract with Lockheed Martin that will get us 1 year of sustainment 
for the F-22 for about $1.2 billion. What is the overall sustainment 
strategy for the F-22 program going forward and, in particular, to what 
extent will that strategy use competition (or the option of 
competition) to drive down costs?
    General Reno. The F-22 sustainment strategy is based on the 
Performance Based Logistics concept/contract mechanism in which the 
prime contractor is incentivized to maximize fleet availability while 
reducing ownership costs across the life cycle of the aircraft. This 
support strategy includes all elements of support for the aircraft, 
trainers, and engines. It includes base and depot level maintenance, 
product support, support engineering, field support, configuration 
control and technical data, and training services. Adjustments to this 
methodology are made as the weapon system matures.
    The F-22 Program Office is currently surveying its portfolio of 
sustainment programs--both products and services--to determine the most 
cost effective options for future product and support services, 
including organic, open competition, or sole source basis from the 
original equipment manufacturer to avoid additional ``pass through or 
markup'' costs by a single prime integrator. The program office will 
conduct a cost-benefit analysis on candidate projects to determine 
whether the net savings associated with in-sourcing, competing, and/or 
procuring directly from the original equipment manufacturer justify 
accepting the additional risks associated with pursuing the new 
procurement strategy.

    115. Senator Ayotte. Lieutenant General Reno, I understand that a 
preponderance of F-22 Raptors came out of production with structural 
defects that are significantly limiting its service life. That as a 
result, the Air Force has initiated a Structures Retrofit Program (SRP) 
that is intended to extend the service life of those aircraft--163 of 
them, in total--to reach 8,000 flight hours (their original intended 
service life). Can you give me a sense of what kind of items need to be 
retrofitted to help extend the F-22's service life to 8,000 flight 
hours?
    General Reno. You are correct. During production, ongoing analysis 
identified a number of structural retrofits required to meet the full 
8,000 hour design life. The SRP performs structural treatments and 
installs structural modifications to bring the F-22 up to its full 
service design life of 8,000 hours.
    The SRP will modify internal F-22 structural components such as 
lugs, bushings, line pass-through holes, spars, attachment flanges, and 
hinges. These SRP modifications are being made to reduce or more 
effectively distribute internal stresses in the F-22 structure in order 
to meet design life.
    The wing attachment lugs are a prime example of an item modified by 
the SRP. The attachment points are subject to high stress and usage 
analysis and testing showed they were prone to crack, limiting aircraft 
service life. The SRP program treated these locations with glass bead 
peening and laser shock wave peening to prevent crack initiation in the 
structure, which extended the service life.

    116. Senator Ayotte. Lieutenant General Reno, what is the total 
cost of this retrofit program?
    General Reno. The total funding for the SRP is $343.7 million. The 
SRP began in fiscal year 2006 and is planned to complete in 2016.

    117. Senator Ayotte. Lieutenant General Reno, what effect will this 
disturbing development have on maintaining the operational availability 
of these aircraft?
    General Reno. The impact of the SRP on operational availability is 
minimal and the SRP is carefully managed to minimize impact to the 
fleet. Each aircraft is individually managed for insertion into SRP 
modifications to ensure the flying hour restrictions are not over-
flown. Additionally, SRP modifications are scheduled concurrently with 
other ongoing scheduled maintenance at the depot level to minimize 
downtime and the maintenance burden on operational wings.

    118. Senator Ayotte. Lieutenant General Reno, what is the 
inspection and installation burden of the retrofit program on the 
legacy fleet of F-22s?
    General Reno. The inspection and installation burden for the SRP on 
operational F-22 wings is minimal. SRP modifications are scheduled 
concurrently with other ongoing scheduled maintenance at the depot 
level to minimize downtime and the maintenance burden on operational 
wings. SRP actually decreases the long-term inspection burden on the F-
22 fleet by repairing structures that previously required inspections.

                     SERVICE LIFE EXTENSION PROGRAM

    119. Senator Ayotte. Lieutenant General Reno, last year, General 
Schwartz told this committee about the plan to survey the F-16 fleet in 
detail to determine what kind of service life extension program (SLEP) 
might be necessary, especially given the delays in the F-35A.Where does 
that effort stand?
    General Reno. The details of F-16 SLEP are still being refined. In 
April 2011, the Air Force awarded a contract for a Full Scale 
Durability Test on an F-16 Block 50, the results of which will inform 
us on how to proceed with our SLEP efforts. Additionally the fiscal 
year 2012 President's budget commits Research, Development, Test, and 
Evaluation funds for the Air Force to study both structural SLEP 
requirements as well as avionics enhancements, including an Active 
Electronically Scanned Array radar, new Center Display Unit, Integrated 
Broadcast System and new ALQ-213 electronic warfare suite. Finally, we 
expect continued refinement of F-16 SLEP details in response to F-35A 
program performance.

    120. Senator Ayotte. Lieutenant General Reno, what have you learned 
so far about the health of the F-16 fleet?
    General Reno. The Air Force aggressively manages the F-16 fleet, 
incorporating information from the Fleet Viability Board, baseline 
engineering design, Full-Scale Durability Tests, and the latest 
recorded flight data to ensure maximum F-16 sustainability and 
viability. The Air Force plans to sustain the F-16 Block 25-32 fleet to 
a planned 10,800 Equivalent Flying Hours (EHF) and the F-16 Block 40/
50s are expected to remain structurally viable though 8,000 EFH. 
Improved structural analysis techniques indicate the F-16 is 
experiencing lower flight stresses than originally estimated. This will 
allow them to reach higher actual flight hours within their certified 
service life limit before structural modifications are required. To 
ensure the Air Force addresses structural unknowns in the F-16 fleet, 
we will fund a 5-year Full Scale Durability Test on the F-16 Block 40/
50 fleet beginning fiscal year 2012 to identify structural issues that 
might limit service life. Actionable results from this testing will be 
available in fiscal year 2016.

    121. Senator Ayotte. Lieutenant General Reno, is there a similar 
program planned for the A-10 Warthog?
    General Reno. The A-10 has gone through several Service Life 
Extension Programs (SLEPs) starting in 2002. Along with SLEP, the A-10 
is replacing the thin-skin wings with new wings starting this year. The 
Air Force is also investigating the need to replace the remaining 
thick-skin fleet with new wings in order to sustain the aircraft to the 
2040 timeframe.
    Most recently, the A-10C Aircraft Scheduled Structural Inspection 
2014 (SSI 2014) was developed. In order to satisfy extended service 
life goals of the A-10 fleet, a restructure of critical components 
within the fuselage is necessary. SSI 2014 includes the following 
repairs: upper longeron strap replacement, crown skin and turtle deck 
skin modification, upper longeron modification at Fuselage Station (FS) 
268, lower auxiliary longeron modification at FS 405, electrical trough 
reinforcement at FS 365, and fuel cell drain hole modification. This 
will start in fiscal year 2014 using Air Force Operations and 
Maintenance (3400) funding and will give the A-10 the capability to 
reach Required Service Life projections of 16,000 flying hours.

                      FULL SPECTRUM TRAINING MILE

    122. Senator Ayotte. Lieutenant General Stevenson, in its fiscal 
year 2012 budget request, the Army began using a new metric to budget 
for its training activity to conduct Full Spectrum Operations. 
According to the Army, the Full Spectrum Training Mile, vice the Tank 
Mile, provides the ``right representative sample size of units and 
equipment that more accurately measures training activity across the 
Army.'' Will you please explain how the Army arrived at the Full 
Spectrum Training Mile and how this metric will increase its ability to 
more accurately capture training requirements and program funding and 
equipment accordingly?
    General Stevenson. To prepare soldiers for deployments in various 
operational environments, the Army transitioned its combined arms 
training strategies, ground and air, from training for major combat 
operations to training for full spectrum operations in fiscal year 
2012. Full spectrum operations training prepares Army forces to conduct 
offense, defense, and stability or civil support operations 
simultaneously for assigned missions at any point along the spectrum of 
conflict from stable peace to general war.
    In support of full spectrum operations training, Army executed a 
full spectrum training mile pilot program in fiscal year 2011 with the 
goal of transitioning away from the tank mile in fiscal year 2012. The 
full spectrum training mile measures training activity in terms of a 
composite average of miles driven by select equipment and type of unit 
in accordance with ARFORGEN. The tank mile was a good indicator of the 
training activity required to prepare soldiers for major combat 
operations, but the full spectrum training mile metric more accurately 
captures variable requirements that are due to changes in the training 
strategy, force structure, and adjustments made for deployed units. The 
full spectrum training mile is more representative of the key units and 
equipment that conduct full spectrum operations training and consume 
operational tempo (OPTEMPO) resources.

    123. Senator Ayotte. Lieutenant General Stevenson, do you 
anticipate this new metric will lead to changes in resourcing 
requirements?
    General Stevenson. Changing the metric alone does not change the 
resource requirement. Requirements that are reflected in the new metric 
change based on changes to the Army's force structure, training 
strategy, or unit deployments.

    124. Senator Ayotte. Lieutenant General Stevenson, how will this 
metric address and measure the unique missions of ARNG units, 
particularly in support of State missions?
    General Stevenson. The full spectrum training mile metric addresses 
a broader mission set that includes civil support operations training, 
which supports the State missions conducted by the ARNG. In part, the 
full spectrum training mile is used to describe the level of training 
activity in approved unit-level training strategies. The training 
strategies are designed to enable units to train on fundamental tasks 
associated with full spectrum operations, i.e., offense, defense, and 
stability operations (or civil support operations if the unit is to be 
employed in the continental United States (CONUS)). The level of 
training activity in approved unit-level training strategies is 
sufficient to enable ARNG units to prepare for civil support operations 
that include riot control, law enforcement and emergency (incident) 
response.

                      ARMY BODY ARMOR ACQUISITION

    125. Senator Ayotte. Lieutenant General Stevenson, there have been 
several reports over the last couple of years conducted by the DOD 
Inspector General (IG) and the GAO that have been critical on issues 
relating to quality control and testing of body armor by the Army--
including most recently a January 2011 DOD IG report that stated the 
Army did not consistently enforce ballistic testing requirements for 
several contracts to produce interceptor body armor and vest 
components. What steps has the Army taken in response to these reports 
to improve testing and quality assurance protocols to ensure our 
soldiers have safe and reliable personal protective equipment?
    General Stevenson. The recent DOD IG and GAO recommendations 
support the Army's efforts to improve testing and quality assurance to 
ensure soldiers receive safe and reliable protective equipment. Some of 
the key changes the Army has instituted in body armor testing are as 
follows:

         To verify that there is no degradation in body armor 
        performance over time, beginning in 2008, Program Executive 
        Office (PEO) soldier developed and deployed Nondestructive Test 
        Equipment (NDTE) systems to detect internal cracks to body 
        armor plates. The December 2009, All Army Activities Message 
        358-2009, requires that ballistic plates are scanned prior to 
        deployment and rescanned during a soldier's mid-tour leave. The 
        plates identified as having cracks or internal flaws are 
        removed from inventory.
         In 2009, the Army made the decision to move body armor 
        testing from National Institute of Justice (NIJ) Ballistic 
        Laboratories to the Army Test and Evaluation Command (ATEC). 
        The testing at ATEC provides direct governmental oversight of 
        all aspects of body armor testing.
         A common standard in body armor testing is now in 
        place across the DOD. The Office of the Director, Operational 
        Test and Evaluation (DOT&E) standardized First Article Testing 
        (FAT) for hard body armor by issuing a standard protocol for 
        ballistic testing on April 27, 2010. The protocol establishes 
        statistically-derived test methods and standard testing 
        references, protocols, and procedures. The Army began using 
        this protocol on May 4, 2010.

    126. Senator Ayotte. Lieutenant General Stevenson, are you 
confident that the Army has appropriate measures in place to ensure the 
safety and reliability of its body armor inventory?
    General Stevenson. Yes, I am confident that body armor issued to 
our soldiers and in our current inventory is safe and reliable. The 
U.S. Army, based on the DOT&E body armor standard test protocol, 
conducts rigorous and extensive testing of body armor to ensure that it 
meets U.S. Army standards and contractual requirements, and is safe for 
use by soldiers in combat. The U.S. Army developed and performs a 
comprehensive test strategy which encompasses FAT and Lot Acceptance 
Testing (LAT). During FAT, the plates are subjected to and must pass 
tests in various extreme operating environments, and must also pass 
both Ballistic Limit testing (provides an indication of safety margin 
in the protection) and Resistance to Penetration test (no penetration 
of a selected threat round). Resistance to Penetration testing is also 
performed during LAT to verify that the product which passed FAT 
maintains its demonstrated quality level.
    Beginning in 2008, PEO soldier developed and deployed 
Nondestructive Test Equipment (NDTE) systems to detect internal cracks 
to body armor plates to verify that there is no degradation in body 
armor performance over time. It is Army policy that all ballistic 
plates be scanned prior to deployment and rescanned during a soldier's 
mid-tour leave. As of 30 April 2011, 2.7 million plates had been 
through the NDTE scanning process and 5.0 percent (135,010 plates) 
failed the inspection process due to wear and tear of soldiers' using 
the plates in combat. Plates identified as having cracks or internal 
flaws are removed from inventory.
                                 ______
                                 
             Questions Submitted by Senator James M. Inhofe

                        SPARE PARTS SUPPLY CHAIN

    127. Senator Inhofe. Lieutenant General Reno, consider the 
following points regarding spare parts:

         Our ALCs are suffering from a lack of spare parts;
         A missing or delayed part creates delays, drives up 
        costs, and impacts readiness;
         Up to 4,000 spare parts are always identified as being 
        critical but on back order up to 6 months; and
         The transfer of supply chain management to the DLA is 
        the source of some of the spare-parts shortfalls. How well is 
        the DLA adapting to its role as the manager of the Air Force's 
        supply chain?

    General Reno. DLA is adapting to their new role-better now than at 
the start. Though nearly 92 percent of all orders are filled 
immediately from DLA stock, there is still room to improve on this 
performance. Production and demand have increased over the past 2 
years. There are process changes required on both the Air Force and DLA 
sides to get proper support of the Air Force's supply chain. Through 
collaborative demand and supply chain processes, I believe DLA has the 
ability to use both demand based and non-demand based models to 
accommodate the full spectrum of Air Logistics Center requirements.
    The Air Force and DLA must work to synchronize our demand and 
supply chains. Where possible, the Air Force must stabilize its ALC 
production requirements to allow for improved demand planning. Where 
the requirement is inherently unstable, we need DLA's help to define 
and source requirements to minimize acquisition lead times.
    Finally, I believe Air Force and DLA should work together to 
develop customer-facing metrics and measure all process, policy, and 
procedural improvement initiatives based on their impact to retail 
customer support, and we are.

    128. Senator Inhofe. Lieutenant General Reno, how is ineffective 
supply chain management affecting the ability of Air Force depots to 
maintain our fleet?
    General Reno. We see impacts in several ways. First, the lack of 
spare parts causes delays in maintenance work, which ultimately means 
the aircraft owners have to wait longer to get an aircraft back from 
depot. A secondary effect is that maintenance managers have to shuffle 
work assignments and move mechanics to supportable work. Then managers 
must backtrack to complete tasks that were delayed for parts. Next, 
part shortages force our maintainers to take parts from one aircraft 
and reinstall them on another to meet availability targets--an act we 
call cannibalization. This adds lead time, creates waste, and increases 
wear/tear to our parts--ultimately decreasing the reliability of our 
spares. It also frustrates our mechanics because they see the act as 
doing twice the work for one task. During the delay, there is an 
increased administrative workload for determining why the parts were 
not available, attempting to procure the required parts as quickly as 
possible, and attempting to prevent future stock-outs on critical 
items. This administrative work detracts from employees' primary 
responsibilities and makes our organizations less efficient and 
effective.

    129. Senator Inhofe. Lieutenant General Reno, what fleets are most 
impacted by this shortfall?
    General Reno. We see significant impact on all organic supported 
weapon systems, but specifically the A-10, B-1, B-52, C-5, F-15, F-15E, 
and F-16 at our operational bases and the C-130, F-15/F-15E, F-16, and 
the KC-135 at our depots. We have not seen the trend in contractor 
supported weapon systems that are not bound to buy consumables through 
the DLA. Additionally, we have felt the impact in landing gear and the 
F108, F101, T33, F100, and F110 engines.

    130. Senator Inhofe. Lieutenant General Reno, what programs are 
being piloted to help our Air Force work through this challenge?
    General Reno. The Air Force Global Logistics Support Center's Long-
Term Strategic Plan has three focus areas that we believe will help the 
Air Force work through the spare parts challenge and significantly 
improve the supply chain as a whole. The first focuses on supply and 
demand planning by improving our requirements and forecast activities, 
increasing asset availability and ensuring collaboration with the DLA.
    The second focus area addresses efforts to improve sourcing. 
Through implementation of our Commodity Sourcing Program and the use of 
Strategic Sourcing, we will continue to leverage spending across 
commodity groups, reducing lead times, and become more responsive to 
changes in customer requirements. In addition, our Supplier Relations 
Management Program is aimed at improving collaboration and 
communication between us and our Top 10 commercial suppliers. This 
program affords us the opportunity to make joint process improvements, 
where both the Air Force and the supplier see reduced cost and improved 
performance.
    Finally, our Depot Supply Chain Management focus area looks at 
improving supply support to depot maintenance. By implementing a 
supportability process that looks ahead of need, we can identify 
impacts and begin to work mitigation actions well ahead of an actual 
parts impact to depot production. Additionally, our teams are looking 
to identify root causes and implement solutions for many of the 
recurring parts problems facing the supply chain through our Continuous 
Process Improvement programs. We continually pursue and collaborate 
with DLA to ensure our initiatives are aligned to improve supply chain 
support.

                    CORE AND 50/50 DEPOT MAINTENANCE

    131. Senator Inhofe. Lieutenant General Reno, consider the 
following points regarding depot maintenance:

         Depot maintenance involves the repair, overhaul, and 
        upgrade of military systems and equipment as well as the 
        subsystems and reparable components that make up these systems;
         It is performed in either military depots or 
        contractor facilities but is sometimes performed at military 
        bases by government civilians or contractor personnel.
         The amount of depot maintenance work done by the 
        public and private sectors is governed by 10 U.S.C. 2466;
         The statute states that not more than 50 percent of 
        the funds made available in a fiscal year to a military 
        department or a defense agency for depot-level maintenance and 
        repair can be used by the private sector;
         Core refers to a depot maintenance capability that is 
        government-owned and operated (including government personnel 
        and government-owned and government-operated equipment and 
        facilities maintained by DOD) to ensure a ready and controlled 
        source of technical competence and resources necessary for 
        effective and timely response to a mobilization, national 
        defense contingencies, or other emergency requirements; and
         Non-core workload is workload that is not needed to 
        support core capability requirements and therefore can be 
        performed by either the public or private sector.

    What role do core and 50/50 play in maintaining our national 
security?
    General Reno. The core statute is in place to ensure that during a 
time of crisis, if needed, the government can maintain tasked weapons 
systems without private sector help. The 50/50 statute's main role is 
to ensure a strong and robust OIB while preserving both the private and 
public sectors.

                         CONTRACTOR MAINTENANCE

    132. Senator Inhofe. Lieutenant General Reno, budget pressures have 
pushed some in DOD to hedge towards contractor maintenance in a search 
for savings and efficiencies. How would you quantify any kind of 
efficiencies that the Air Force might gain by transitioning to more 
contractor maintenance?
    General Reno. Each weapon system Life Cycle Management and Product 
Support plan is considered on a case-by-case basis. Depending on the 
size or complexity of the program, the Program Executive Officer or the 
Milestone Decision Authority is ultimately responsible for deciding on 
the best business case to support a weapon system.
    The Air Force has not used sustainment strategy as a platform to 
claim efficiency savings. The Air Force conducts Business Case Analysis 
(BCA) in accordance with 10 U.S.C. and the OSD guidance contained in 
the April 2011 DOD Product Support BCA Guidebook. The decisions are 
based on best value derived from the BCA. The Depot Source of Repair 
decisions are validated every 3 years in accordance with Air Force 
Instruction 63-101, Acquisition and Sustainment Life Cycle Management. 
The only consideration that impacts making the best value decision is 
meeting the requirement contained in the 10 U.S.C. Sec. 2466, which 
limits the depot-level workload awarded to non-government entities to 
no more than 50 percent of the entire workload.

    133. Senator Inhofe. Lieutenant General Reno, how would you 
quantify the increased risk of doing so?
    General Reno. Having sole source contractor supported systems 
without a competitive market or the ability to compete is not 
desirable. Having the ability to compete does reduce risk. In most 
cases, neither the organic nor commercial industry base possesses all 
the resources, infrastructure, nor the skills to accomplish the 
sustainment functions for most defense systems. A Product Support BCA 
typically considers both all organic or all contract alternatives, as 
well as, alternative analysis focusing on using the best blend of 
organic and industry capabilities to arrive at a best value solution 
and reduce risks.
    When performing a BCA, program offices are required to compare the 
identified risks associated with each potential support strategy. The 
risks are prioritized according to their potential implications for 
meeting the program's objectives.

    134. Senator Inhofe. Lieutenant General Reno, what is the cost-
benefit analysis?
    General Reno. A Product Support BCA typically considers both an all 
organic or all contractor alternative. In addition, for each of the 
product elements required for sustainment, the alternative analysis 
focuses on using the best blend of organic and industry capabilities to 
arrive at a best value solution.
    When performing a BCA, program offices are required to compare the 
identified risks associated with each potential support strategy. The 
risks are prioritized according to their potential implications for 
meeting the program's objectives. The Program Manager considers risk 
associated with both contract and organic maintenance when assessing 
the weapon system support strategy.

                 WEAPON SYSTEM SUSTAINMENT EFFICIENCIES

    135. Senator Inhofe. Lieutenant General Reno, the Air Force has 
identified a $7 billion shortfall in WSS. It was made up by a $4 
billion plus-up and a $3 billion efficiency bogey. The Air Force says 
the savings gained through efficiencies enable it to fund 85 percent of 
the requirements in fiscal year 2012. First, I am concerned about 
funding our requirements at 85 percent. Second, I am concerned about 
some of the things we are calling efficiencies such as postponing or 
realigning PDMs or postponing aircraft upgrades. This all comes down to 
risk management--we do not have enough money to do all the things we 
need to do; therefore, we need to manage risk. What is the risk level 
of funding sustainment requirements at 85 percent?
    General Reno. The unfunded requirement risk is primarily being 
assumed in areas with limited impact to near-term readiness, such as 
software, sustaining engineering and technical orders. This risk is 
further mitigated by the annual, enterprise-wide prioritization of 
requirements to ensure the highest priority systems are funded in the 
year of execution.

    136. Senator Inhofe. Lieutenant General Reno, what percentage of 
funding makes weapons system sustainment unsustainable?
    General Reno. For our currently defined force structure, historic 
funding levels including OCO funds have proven sufficient in meeting 
combatant commander mission requirements; however, sustained Weapon 
System Sustainment funding at less than these levels, or loss of OCO 
funds, may lead to increased risk of aircraft groundings.

                         DEFERRING MAINTENANCE

    137. Senator Inhofe. Vice Admiral Burke, the Navy is deferring $367 
million of maintenance in order to mitigate risk by ensuring you are 
able to complete the most critical maintenance in fiscal year 2012. The 
Secretary of Defense is placing six Maritime Prepositioning Force (MPF) 
ships in Reduced Operating Status (ROS) beginning in fiscal year 2013 
to save $500 million over the FYDP. When do we get to the point where 
these cost-savings measures begin to impact our readiness?
    Admiral Burke. The President's fiscal year 2012 budget provides the 
balanced funding necessary for the Navy to support today's force, while 
developing the future capabilities and capacity necessary to continue 
to execute Navy mission in support of the National Military Strategy. 
The funding requested for Navy readiness accounts represents the best 
balance between current force readiness and building the future force 
within available top line funding.
    Based on recommendations from the Fleet Review Panel for Surface 
Readiness, investments we have made in the past several budget cycles 
in SURFMEPP Activity and enhanced assessments of our surface ships, the 
Navy has more insight on how to manage the risk and ensure the deferred 
work is properly documented and completed in future availabilities.
    We believe that placing the six MPF ships in ROS starting in fiscal 
year 2013 is reasonable, based on the change in war-time planning and 
the future security environment.
    The Navy carefully monitors readiness trends and will adjust 
readiness funding in future budget submissions, if the scope of 
operations is different than predicted, or if ship material condition 
does not continue to improve.

    138. Senator Inhofe. Vice Admiral Burke, how much maintenance can 
we defer?
    Admiral Burke. The cumulative amount of maintenance that can be 
deferred without impacting current operations or the expected service 
life of the platform varies from year to year based on the age and 
individual materiel condition of the ships, current operations and the 
next available opportunity to conduct the maintenance. The recent stand 
up of the SURFMEPP has improved the Navy's ability to assess the risk 
of individual ship maintenance deferrals, track deferred work to ensure 
it gets completed, and optimize deferral decisions in a budget 
constrained environment.

    139. Senator Inhofe. Vice Admiral Burke, how many MPF ships can we 
do without?
    Admiral Burke. All 20 MPF ships in the DOD-approved restructuring 
plan are required, based on risk assessment and analysis from the 
Maritime Preposition Study. The Under Secretary of Navy directed a 
Department of the Navy Maritime Prepositioning Study, as part of 
Secretary of Defense (SECDEF) POM-12 Efficiency Initiative, using 
current operation plans and Defense Planning Scenarios. The changes to 
the status and composition of the Maritime Prepositioning Squadrons do 
not reflect a diminution of Navy and Marine Corps valuation of 
prepositioning.

    140. Senator Inhofe. Vice Admiral Burke, where does the money come 
from after we again kick the can down the road?
    Admiral Burke. The President's fiscal year 2012 budget provides the 
balanced funding necessary for the Navy to support today's force, while 
developing the future capabilities and capacity necessary to continue 
to execute the Navy's mission in support of the National Military 
Strategy. The funding requested for the Navy's ship maintenance account 
represents the best balance possible in fiscal year 2012 between 
current force readiness and building the future force within available 
top line funding.
    Future budgets will be balanced based on the then current knowledge 
of Fleet condition and required future capabilities and capacity in 
support of updates to the National Military Strategy. The Navy is 
confident that surface ship in-service engineering program 
improvements, taken in response to the Fleet Review Panel of Surface 
Force Readiness, will provide better life cycle management and 
discipline in defining future maintenance requirements, specifically 
including the impact of deferred maintenance, to inform future 
programming and budgeting decisions.

    141. Senator Inhofe. Vice Admiral Burke, is there some large 
increase in defense spending on the horizon that will enable all the 
Services to recap, reset, and modernize?
    Admiral Burke. Navy does not anticipate any large increase in 
defense spending in the near future.

                              END STRENGTH

    142. Senator Inhofe. Lieutenant General Stevenson and Lieutenant 
General Panter, I am concerned by Marine Corps and Army plans for 
reductions in end-strength. The Army plans to reduce by 49,000 
soldiers, and the Marine Corps plans to reduce by as many as 20,000 
marines. In the meantime, operations tempo has remained steady. Forces 
removed from Iraq by the Marines Corps have been deployed to 
Afghanistan. The Marines Corps has added a battalion landing team 
stationed off of the coast of Libya. Despite plans to the contrary, 
most people predict that we will have a requirement for tens of 
thousands of boots-on-the-ground (BOG) in Iraq and Afghanistan for at 
least the next 10 years.
    The Army announced that they have achieved their 2:1 dwell-to-BOG 
ratio, but have also announced that their final goal is 3:1. The Marine 
Corps has not yet reached a 2:1 dwell-to-BOG ratio, and their training 
readiness for their designed mission has suffered because of it. We 
have spent billions of dollars to shore up Marine Corps readiness, but 
their overall readiness has dropped every year. Afghanistan is 
acknowledged as the reason why the Marine Corps cannot maintain 
equipment readiness and also the reason that they cannot maintain 
training readiness for their preferred mission as a middle-weight 
contingency force. Are your Services' current end strengths adequate to 
simultaneously sustain current operations and maintain your desired 
readiness level?
    General Stevenson. The Army's current end strength is adequate to 
sustain current operations while maintaining requisite readiness 
levels. As we face anticipated budget reductions and direction to plan 
for personnel reductions, the Army will plan to reduce its end-strength 
and restructure its force mix consistent with reductions in OCO 
commitments and in conjunction with the needs of the Department and the 
combatant commanders. Our intent is to arrive at the right mix of 
capabilities to meet current demands as well as future challenges, 
within budgetary constraints. Based on the current strategic guidance 
and projected future requirements, the Army can maintain its 2:1 dwell 
to boots-on-the-ground ratio and have sufficient troops to respond to 
unforeseen events. The adoption of more positive ratios and shorter 
BOG/deployment periods remain the Army's goals and can be achieved for 
current and projected force demand consistent with current strategic 
guidance. We are conducting deliberate analysis now to develop a plan 
to meet the proposed 27,000 reductions to ensure that our operational 
capability is minimally affected. We are also working closely with the 
Joint Staff in their strategic review to ensure our analysis is 
consistent with their ongoing efforts. As part of this plan, and 
throughout this process, we will continuously monitor our readiness 
levels to ensure we remain able to meet the Nation's and our soldiers' 
needs.
    General Panter. The Marine Corps' current end strength is adequate 
to sustain current operations, under current conditions, for as long as 
the Nation requires, acknowledging such a commitment comes at a cost to 
the readiness of its nondeployed forces. The Marine Corps does not 
intend to begin reduction of overall end strength until after the 
drawdown of our current footprint of approximately 22,000 marines in 
Afghanistan. Therefore, the Service will remain prepared to respond to 
crises and maintain its commitment to Afghanistan between now and 2014. 
After drawdown from Afghanistan begins, the nearly 22,000 troops that 
the Service recovers will be sufficient to offset an end strength 
reduction of 15,000 personnel and enable the Marine Corps to remain 
prepared to respond to emergent crises.

    143. Senator Inhofe. Lieutenant General Stevenson and Lieutenant 
General Panter, General Chiarelli said at an AUSA conference that: ``I 
believe we have to have a balance in our equipment accounts and our 
personnel accounts to make sure that we have an Army that we need, but 
that Army must be well-equipped.'' Are we cutting end strength because 
there is no requirement for the additional forces or are we cutting end 
strength because there isn't enough in the budget to recap and 
modernize our forces given the current force levels?
    General Stevenson. The Army's plan to reduce its end-strength is 
consistent with reductions in OCO commitments and in conjunction with 
the needs of the Department and the combatant commanders. We are 
conducting deliberate analysis and developing a plan that ensures the 
proposed reductions have minimal impact on our operational capability. 
We are working closely with the Joint Staff to ensure our analysis is 
consistent with their ongoing efforts. As part of this plan, and 
throughout this process, we will continuously monitor our readiness 
levels to ensure we remain able to meet our mission requirements.
    General Panter. The Marine Corps is meeting and will meet those 
requirements validated through DOD's global force management process 
and approved by the Secretary of Defense. In the fall of 2010, the 
Marine Corps conducted a Force Structure Review (FSR) to evaluate and 
refine the organization, posture, and capabilities required of the 
Marine Corps as America's Expeditionary Force in Readiness in a post-
OEF security environment. The FSR convened to develop the optimum 
organization, posture, and capabilities of the Marine Corps and to 
affirm its role within the joint force in a complex and uncertain post-
OEF-Afghanistan security environment that is going to be further 
challenged by fiscal constraints. The post-OEF Marine Corps will 
continue to provide the ``best value'' in terms of capability, cost, 
and readiness relative to the operational requirements of the combatant 
commanders. The FSR addressed 21st century challenges confronting the 
Nation and built on the Marine Corps' historic role as the Nation's 
crisis response force. The results of that effort provide for a 
strategically mobile force optimized for forward-presence and rapid 
crisis response, with the capability and capacity to operate across the 
range of military of military operations.

                        COST OF AGING EQUIPMENT

    144. Senator Inhofe. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, OCO 
funding for equipment reset (fixing and replacing damage and wear from 
war) is being pushed into the base budget. This has two detrimental 
effects: (1) it hides the cost of the war; and (2) it pushes force 
research and development (R&D) and modernization out of the base 
budget. This puts us in the position where we will reach a capability 
gap when we will have to retire systems in order to pay to develop and 
procure their replacements.
    Our fleets are significantly older based on when they were first 
designed and fielded with some dating back to the 1950s. The inventory 
of Abrams, Palidins, and Bradleys, designed some 30 years ago, are on 
their 4th and 5th modernization program. Marine Corps aviation average 
an age of 22 years, bombers 34 years old, Air Force fighters 27 years 
old, tanker 46 yrs old, etc. The Air Force is flying the oldest fleet 
of aircraft in its history. What impact does sustaining aging equipment 
have on our ability to procure new equipment?
    General Stevenson. Reset of equipment that has been operating as 
part of OIF/OND/OEF is a true cost of war. The Army has and will 
continue to request Reset funding for that equipment as part of 
supplemental or OCO requests, not our base budget. We will continue to 
need Reset funding for 2 to 3 years after hostilities cease.
    The Army's fiscal year 2012 budget request strikes a balance 
between current and future needs and provides the basis for an 
affordable equipping strategy over time. In support of the overall 
effort to develop the right force design and force mix, the Army must 
develop and field a versatile and affordable mix of equipment to enable 
soldiers and units to execute full-spectrum operations and to maintain 
our decisive advantage over any enemy may encounter. To do this, we 
must continually examine whether it makes more sense to sustain aging 
equipment, or to invest in new, on a case-by-case basis, because in the 
end, we know that the Nation can only afford to devote a finite amount 
of its resources on its Army. To help get at this very complex 
question, the Secretary of the Army directed Capability Portfolio 
Reviews to holistically examine the requirements that drive capability 
development, acquisition and sustainment to determine if current and 
proposed programs were aligned to meet key national and defense 
strategies and Army plans.
    The Army uses incremental modernization to deliver new and improved 
capabilities to the force by leveraging mature technologies, shortening 
development times, planning growth potential and integrating increments 
of those capabilities that give us the greatest advantage in the future 
while hedging against uncertainty. In addition to expanding or 
improving capabilities by developing and fielding new technologies, the 
Army will continue to upgrade, improve and recapitalize existing 
capabilities while simultaneously divesting those capabilities deemed 
redundant, not cost-effective or no longer required. By modernizing in 
an incremental manner, instead of purchasing equipment in quantities 
large enough to equip the entire force, the Army is able to provide the 
most relevant versions of capabilities available to units prior to 
deployment and then provide units in follow-on rotational cycles 
improved or more relevant versions, once available.
    General Panter. The impact of sustaining aging equipment on our 
ability to procure new equipment varies depending on the type of 
equipment.

Intelligence:
    The majority of our intelligence acquisition programs of record are 
comprised of commercial off-the-shelf (COTS) and government off-the-
shelf (GOTS) equipment and software. Refreshing and maintaining this 
equipment is critical, due to technology quickly becoming obsolescent 
and due to the harsh operational environment in which this equipment is 
employed. Likewise, it is critical that funds be available for the 
modernization of intelligence equipment. This is particularly relevant 
in the fields of signals intelligence electronic warfare (SIGINT/EW), 
Counter-Intelligence, and the processing/analysis of large volumes of 
data and intelligence. Efforts to sustain aging intel equipment tend to 
have a negative impact on our ability to procure new equipment because 
less funds are then available for the new equipment. Also, intel 
equipment becomes obsolescent fairly quickly vis-a-vis other types of 
equipment. Thus, investment in new procurement is generally preferred 
over sustainment.

Tactical Communications:
    Tactical Communication Modernization (TCM) maintenance costs have 
been covered mostly under OCO for the past several years. As OCO 
funding diminishes, the TCM base budget OMMC must increase from approx 
$2 million per year to approx $10 million per year. So far, requests 
for increased OMMC have been denied for TCM. This will lead to OMMC 
shortfalls starting in fiscal year 2013 which will negatively impact 
our ability to maintain radio AAOs. The impact of maintenance costs on 
Research and Development (R&D) is minimal. The Joint Tactical Radio 
System (JTRS) program is already conducting all R&D for service radio 
requirements through fiscal year 2025.
    The impact of sustainment costs on the Marine Corps' ability to 
procure new equipment is significant. If additional OMMC is not 
approved, the TCM line will have OMMC deficits of $7-$10 million per 
year through the FYDP. These OMMC deficits will slow the procurement of 
new systems to replace over 130,000 radios, many of which reach end of 
life cycle starting in fiscal year 2018. The effect of reduced AAO's 
due to Force Structure Review (FSR) results on system life cycle is not 
yet determined. We will likely be able to dispose of older systems 
first and gain a year in life cycle deadlines for AAOs.

Vehicles:
    The Marine Corps' inventory of medium and heavy tactical vehicles 
is relatively new. With the planned quantity reductions currently in 
place, the Marine Corps should see minimal impact in those fleets. The 
light armored vehicles (LAVs) and Abrams have retained relevance and 
extended services life through OCO funded upgrades and modifications; 
thus, the impact to these vehicles has been limited.
    The Amphibious Assault Vehicle (AAV) fleet requires consistent and 
aggressive Inspect and Repair Only As Needed (IROAN), in combination 
with a Service Life Extension program (SLEP), to maintain relevance and 
readiness into the next decade. This platform did not benefit from OCO 
resourced upgrades. The IROAN costs run about $425,000 per vehicle and 
running 100 vehicles per year through the process would cover the fleet 
in 10 years. The planned SLEP is budgeted to extend 392 vehicles at 
$1.5 million per vehicle and is needed to sustain the fleet. These 
investments impact modernization and have been accounted for in our 
plans.
    The light tactical vehicle fleet will also need selective but 
consistent IROAN to maintain readiness into the next decade as we 
reduce our quantities by roughly 20 percent to 19,000 vehicles. Our 
HMMWV A2s have are an average of 9 years; selective IROAN at $85,000/
vehicle would extend that fleets life to 2020. The Expanded Capacity 
HMMWVs (ECV), with kits and upgrades partially resourced through OCO, 
have an average age of 4 years. Selective IROAN of that fleet at $115k 
each would extend that fleet's life to 2025. In conjunction with the 
Army we are evaluating the utility and return on investment associated 
with a HMMWV Recap. The results of that evaluation will inform our 
plans to modernize portions of the light fleet through the Joint Light 
Tactical Vehicle program.
    General Reno. In the constrained fiscal environment we operate in, 
requirements for new equipment must be balanced against the sustainment 
of our existing equipment. Continuing to maintain the legacy systems 
necessary to support our current mission is essential. However, 
continuing to pay for sustainment of systems that are no longer 
essential to mission execution reduces available funds for equipment 
recapitalization, modernization, and new development. For example 
sustainment costs for the MRAP vehicle are estimated at $457 million 
across the FYDP. The long-term Air Force need for MRAP is still under 
review. The associated funding could be better applied to updating the 
existing Air Force tactical vehicle fleet.
    Admiral Burke. To the extent that ships and aircraft are maintained 
and operated as planned to meet their Expected Service Lives (ESLs), 
there is no impact on the Navy's ability to procure new equipment. 
Recent experience with surface ships, however, has shown that not 
performing the necessary planned maintenance increases costs over time 
and impacts achievement of platform ESL.

    145. Senator Inhofe. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, have 
we reached the point with any of our current equipment that the BCA 
recommends we procure new equipment but, due to a lack of funds, we are 
forced to sustain the existing equipment?
    General Stevenson. Yes, the following three programs are examples 
where BCA suggests the procurement of new equipment, but for which we 
will instead sustain existing equipment given funding constraints and 
higher priorities. First example is engineering equipment. Without 
current fiscal constraints and higher priorities, the Army would 
replace our 621B Scrapers, Deployable Universal Combat Earthmovers, 
Airborne Graders, D7 Dozers, and 613B Airborne Water Distributor/
Scrapers. However, to keep these older equipment items serviceable, the 
Army executes a Service Life Extension Program to recondition it to 
near zero operating hours/miles. The second example is satellite 
communications terminals. Due to lack of funds to pure fleet the force 
with Phoenix Terminals, the Army made a conscious decision to reduce 
cost and upgraded existing AN/TSC-85 and 93s SATCOM terminals, thereby 
extending the life of these capabilities. The third example is field 
kitchens, in which the Army is currently procuring the modernized 
Assault Kitchen (AK) at unit cost of $53,400 to replace the Kitchen, 
Company Level, Field Feeding (KCLFF). The AKs are funded at minimum 
sustainment rate and full-fielding across the Army will not be met 
until 2022. Due to this fielding gap and lack of funds, the Army must 
sustain the existing KCLFF.
    General Panter. Depending on the size and priorities of future 
budgets, there is a potential for reaching that point in the near 
future. For example, some LID transportation programs that will require 
out-year funding include the MTVR Trailer, PLS Trailer for the LVSR, 
Flatrack Refueler Capability, and the P-19 Crash Fire Rescue vehicle.
    General Reno. Yes, but the Air Force doesn't deliberately keep a 
tally on equipment in this situation (where a business case says 
replace versus sustain).
    The business case and mission case coexist. Combat mission success 
and equipment capability are the first measures of merit. Cost is 
always a factor in decisionmaking.
    An analysis of alternatives is mandatory early in equipment 
procurement planning and helps to determine the `mission case' and 
`business case' options such as buying commercially available 
equipment, designing a new military-specific product, modifying 
existing equipment, or extending the service life of existing 
equipment.
    Much later on in the product life cycle, a fielded piece of 
equipment in the sustainment phase is condemned if the one-time repair 
cost reaches 75 percent of the purchase price. Rather than fixing an 
old piece of equipment at great expense, the Air Force looks for 
options to replace it with new equipment. If no affordable options 
exist, we are forced to retain existing equipment with high sustainment 
cost.
    Specific examples where the Air Force is extending the service life 
of existing equipment, due to mission needs, include flightline air 
conditioners that cool aircraft during maintenance operations, Materiel 
Handling Unit (MHU) 196 and 204 Trailers used for loading weapons on 
aircraft, and MHU 110 and 141 trailers used for transporting munitions.
    Admiral Burke. Navy has not reached the point where equipment is 
maintained solely due to a lack of funding to procure new equipment.

    146. Senator Inhofe. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, how 
will the Services' inability to develop and procure new aircraft and 
vehicles affect our military readiness 10 years from now?
    General Stevenson. We do have some concerns about some of our older 
weapons systems, such that the BFV, OH-58D and Paladin, and in each 
case, are taking appropriate steps to modernize. The Army, on the 
average, meets or exceeds Army readiness standards for our current 
fleets, and I anticipate that we will continue to do so, but in order 
to do that, we will continue to require the generous support of 
Congress in support of our Reset program. Reset funding will need to 
continue for 2 to 3 years post conflict, to ensure that we sustain our 
high readiness levels into the future.
    The fiscal year 2012 Army base budget provides funding for new 
procurement, rebuild, overhaul, and upgrade of the current fleets, and 
grows future capabilities through research and development efforts. 
This budget enables the Army to continue its efforts to balance the 
force with the most modern capabilities available, integrating new 
materiel capability to ensure our soldiers always enter a fight 
overmatching any enemy, while remaining fiscally judicious and 
responsible to the Nation's current economic requirements.
    Regardless of new procurement programs, the Army continuously 
addresses the materiel capability gaps and safety concerns of the 
existing fleets through upgrade programs and modernization efforts. 
These are often developed as solutions to issues identified during the 
current combat operations and maintain the technological superiority of 
our existing fleets.
    Recognizing the significance of Army Aviation and the effects of 
the high operational tempo in current combat operations, we are 
modernizing three of the four primary helicopters: the CH-47 Chinook, 
UH-60 Blackhawk, and AH-64 Apache, and continue to sustain and upgrade 
the Army's fourth helicopter, the OH-58D Kiowa Warrior, while we 
complete an analysis of alternatives for the Armed Aerial Scout, 
intended as the Kiowa Warrior's replacement. The combination of 
remanufacturing and new procurement of our existing helicopter fleet is 
the most cost effective modernization strategy. This will have a 
positive effect on future readiness by decreasing the average aircraft 
age (both years and flight hours).
    General Panter. The Marine Corps has successful procured new 
vehicles for a portion of its tactical vehicle fleet, and has extended 
and upgraded a portion of its combat vehicle fleet.
    The Marine Corps fully fielded the Marine Tactical Vehicle 
Replacement system and is in the process of fielding the Logistic 
Vehicle System Replacement. Each program has a service life of 22 
years.
    The LAVs and Abrahams have been upgraded and modified, thereby 
retaining relevance while extending the economic service life out to at 
least 2025; thus, there would likely be no impact to readiness if our 
planned ongoing depot activities are resourced. We face challenges in 
two areas of our fleet, which could impact readiness if the challenges 
are not properly addressed.
    First, the Amphibious Assault Vehicle fleet will need a consistent 
and aggressive IROAN program, in combination with a Service Life 
Extension program, to maintain relevance and readiness into the next 
decade. The planned SLEP is budgeted to extend 392 vehicles at $1.5m 
per vehicle and is needed to sustain the fleet out to 2026. These 
investments impact modernization, but have been balanced with readiness 
in our investment planning.
    Second, the light tactical vehicle fleet will need selective but 
consistent IROAN to maintain readiness into the next decade. The 
technical challenge is maintaining readiness for the up-armored half of 
the light fleet (Expanded Capacity HMMWVs) that must operate over its 
design rating of 12,100 lbs gross vehicle weight, reducing readiness. 
The ECV, with kits and upgrades partially resourced through OCO, have 
an average age of 4 years. Selective IROAN of that fleet at $115,000 
each will extend that fleet's life to 2025. To maintain readiness in 
the long term we are working with the Army to evaluate the utility and 
return on investment associated with a HMMWV Recap program. The results 
of that evaluation will inform our plans to maintain readiness while 
modernizing portions of the light fleet through the Joint Light 
Tactical Vehicle program.
    The V-22 Osprey is on the last year of its first 5-year multi-year 
procurement plan, culminating in the procurement of 245 of the 360 
aircraft in the program of record by fiscal year 2012. 215 have been 
procured to date. A second multi-year procurement plan is in work with 
the Assistant Secretary of the Navy for Research, Development, and 
Acquisition to buy out the program of record. The Marine Corps is 
taking delivery of over 30 aircraft per year, with nearly 130 currently 
active in the Fleet. The Marine Corps has 10 active tiltrotor 
squadrons, 7 of whom have completed their transition from CH-46E to MV-
22B. The East Coast tiltrotor squadrons have 10 highly successful V-22 
deployments to their credit--3 to Iraq, 3 to Afghanistan, and 4 on 
amphibious shipping as Marine Expeditionary Units. Deployments to 
Afghanistan and the MEUs continue to date.
    The H-1 Upgrades program is also in the midst of delivering new 
aircraft to the fleet. fiscal year 2011 inclusive, 131 of the 349 
(program of record) H-1 Upgrades aircraft are on contract, and to date 
the Marine Corps has accepted delivery of 43 UH-1Ys and 16 AH-1Zs. 
Procurement of these aircraft continues at a consistent rate through 
fiscal year 2019. Five operational squadrons have converted to the UH-
1Y and the first squadron transition to the AH-1Z is well underway. 
Delivered aircraft are already in the fight; the UH-1Y has conducted 
sustained combat operations in OEF since November 2009, and both the 
AH-1Z and UH-1Y deploy with the 11th Marine Expeditionary Unit in fall 
2011. Readiness of H-1 Upgrades aircraft has been high.
    The CH-53K program, currently in development, has been meeting and/
or exceeding OSD benchmarks since fiscal year 2007. Assembly of the 
program's Ground Test Vehicle began in January 2011, and the program's 
first flight is on schedule for CY 2013. The program has been a model 
for aircraft development.
    General Reno. The deferred procurement of new aircraft has the 
potential to impact military readiness 10 years from now. There have 
been acquisition and modernization delays in several aircraft programs. 
These delays will result in a postponed acquisition of improved 
capabilities and an increase in aircraft age for the affected mission 
systems. Increased aircraft age has the potential to impact aircraft 
availability and drive higher sustainment cost. Required warfighting 
capacity will be maintained through selective modernization and service 
life extension of current platforms. Potential effects of aircraft 
aging have been thoroughly studied and can be mitigated through regular 
operations and maintenance activities and modification programs.
    Admiral Burke. Navy development and procurement plans are focused 
on sustaining readiness to deliver required forces and capabilities for 
the long term. For the Navy, the long service life of our capital 
assets requires a balance between proper life-cycle maintenance of 
current assets, procurement of new platforms, and investing in 
capability modernization of existing platforms. The budget submission 
for fiscal year 2012 and the FYDP provides the most effective current 
and future readiness balance considering each of these elements. If 
sustained, Navy development and procurement programs will support 
future readiness requirements.

                          STRATEGIC READINESS

    147. Senator Inhofe. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, our 
military has been continuously engaged in combat operations for a 
decade. Our forces are operating near the limits of their capacity to 
meet the demands of ongoing major operations in Iraq, Afghanistan, 
Libya, and Japan, in addition to operations to maintain peace and 
deterrence ashore, afloat, and in the skies worldwide. While fighting 
the immediate conflicts, we face strategic risks elsewhere from Iran, 
North Korea, and others. Defense spending, while growing, has not kept 
pace with our conflicts. In 1962, total defense spending made up 9.0 
percent of gross domestic product (GDP).
    In 2010, total defense spending, including OCO, made up 4.7 percent 
of GDP. Current conflicts have, understandably, impacted our readiness. 
The cost of the war in terms of readiness is reflected in the Services' 
budgets:

         The Army budget contains $967 million to replenish 
        their prepositioned stocks;
         Budgets for the Air Force contain money for extending 
        the life of aircraft that are accumulating flight hours faster 
        than expected; and
         The Marine Corps will need more than $10 billion to 
        repair war-damaged equipment.

    In the meantime, we have failed to modernize our forces:

         Air Force bombers--34 years old on average;
         Air Force fighters--27 years old on average;
         Surveillance aircraft--30 years old on average;
         Abrams tanks, Paladin artillery, and Bradley Fight 
        Vehicles--designed some 30 years ago, are on their fourth and 
        fifth modernization program; and
         Marine Corps aviation--22 years old on average.

    What is the overall trajectory of the readiness of your Services?
    General Stevenson. The Army is in better shape today than we have 
been in a long time. Through the strong, unwavering support of 
Congress, we have received the funding we need for Reset--and this 
eliminates a lot of our risk. Having Reset fully funded enables us to 
not only ensure our equipment is brought back to the Army ``10/20'' 
maintenance standard, but also allows us to take the necessary 
maintenance actions to eliminate ``delayed desert damage.'' Since 2002, 
our investment in Reset has had a dramatic impact on operational 
readiness rates of equipment on-hand, enabling the Army to maintain 
rates at 90 percent and 75 percent for ground and aviation equipment, 
respectively. Having said that, we do have concerns. With regard to 
Reset, we will need Reset to continue to be fully funded, for 2 to 3 
years beyond the end of major OCOs, and we know that is getting 
increasingly difficult to assure. Another concern is whether or not we 
will get the support of Congress in funding our Combat Vehicle 
Modernization Strategy. This strategy consists of a comprehensive 
modernization plan for our entire fleet of combat vehicles, and 
features as its centerpiece the development, production and fielding of 
the Ground Combat Vehicle to replace the Bradley Infantry Fighting 
Vehicle. A companion need, equally as important, is the need to invest 
in The Network. We have thought thru our modernization requirements 
deliberately, and through a series of Capability Portfolio Reviews, 
chaired by the VCSA and overseen by the Under Secretary of the Army, 
across the entirety of the Army's hardware requirements, thru the FYDP, 
and beyond. We will continue to submit the requirements we need in our 
investment accounts, and in the meanwhile, ensure that that equipment 
that we do have is maintained in a high a state of readiness as 
possible, to ensure we can respond to the Nation's needs. With the 
drawdown in Iraq, and eventual lessening of the commitment of forces in 
Afghanistan, following a rigorous Reset, this will only get better.
    General Panter. The overall trajectory of Marine Corps readiness is 
that the readiness of deployed forces is and will remain high, while 
the overall readiness of the nondeployed force is degraded and will 
remain so for as long as the Marine Corps sustains current 
requirements.
    OCO in Iraq, Afghanistan, and elsewhere have placed an 
unprecedented demand on ground weapons systems, aviation assets, and 
support equipment. Marine Corps equipment has experienced accelerated 
wear due to many years of sustained combat operations in exceedingly 
harsh operating environments. In many cases, the result is that 
operational demand has far exceeded peacetime equipment usage rates or 
items have been destroyed or damaged beyond economical repair. Marine 
Corps legacy aircraft supporting operational missions are consuming 
service life at a rate up to three times faster than scheduled. 
Averaged across the entire aviation inventory, the Marine Corps is 
consuming aircraft service life at a rate 1.85 times faster than 
planned. This means the majority of the Marine Corps' legacy aviation 
platforms are nearing the end of their service lives.
    It is vital the Marine Corps reset its equipment to serviceable 
condition and modernize legacy platforms to achieve the necessary 
levels of readiness to posture itself for the future. The Marine Corps' 
experiences in combat operations over the last decade have shown legacy 
20th century ground tables of equipment are inadequate for the modern 
battlefield. With regard to aviation, new and modern aircraft with low 
average ages and robust service life projections will be critical to 
supporting future Marine Corps and joint operations. Reset and 
modernization of ground equipment and aviation platforms will be 
absolutely essential to reversing what has been an overall downward 
trajectory of MAGTF readiness for the nondeployed force. Congress' 
continued support and investment is needed to reset equipment and 
reconstitute/modernize the force to meet combatant commander 
requirements and correctly posture the Marine Corps for the future 
security environment. This will require multi-year support beyond the 
completion of combat operations.
    General Reno. Readiness for full spectrum military operations is a 
challenge for our combat air forces and some other limited-supply/high-
demand aviation units. Since 2003, there has been a slow but steady 
decline in reported readiness indicators. Air Force operations tempo 
since 2001 has produced lower dwell-to-deploy ratios for high-demand 
skills. At present, 19 enlisted and 9 officer career fields are 
``stressed.'' We have improved funding to weapons systems sustainment; 
however, sustainment challenges continue as we field new weapon systems 
and balance contract versus organic (blue-suit Air Force) sources of 
repair. To address these readiness issues, we must keep aircraft 
recapitalization and procurement programs on track and continue 
managing our force to ensure the right numbers and mix of skills in our 
highly tasked and highest priority mission areas. Our ability to 
project Global Vigilance, Reach, and Power is constrained by the 
increasing costs to design and build platforms in a particularly 
challenging budget environment. Our fiscal year 2012 President's budget 
request reflects the difficult choices that will allow the Air Force to 
provide the necessary capability, capacity, and versatility required to 
prevail in today's wars, prevent and deter conflict, prepare to defeat 
adversaries and succeed across the range of potential military 
operations-while preserving and enhancing the All-Volunteer Force. The 
Air Force must continue to modernize and recapitalize our aircraft 
inventory to remain effective against global and regional competitors 
as they continue to modernize and improve their own air defense 
capabilities and harden valued targets.
    Admiral Burke. The overall readiness trajectory of the Navy has 
been on a slight downward trend since 2007. Since the Navy is a 
traditional rotational force, the standing practice of reset-in-stride 
has resulted in a more steady readiness profile. However, the overall 
pace of operations has impacted both Navy personnel and equipment, 
reduced the readiness of nondeployed forces, and driven mission-
tailored training for some deploying forces. Navy is addressing 
deficiencies in surface ship maintenance planning, crew size, and 
training now, but to achieve the expected service life of ships and 
aircraft over the long-term, operational demand and force structure 
must be rebalanced.

    148. Senator Inhofe.  Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, how 
would you quantify the readiness risks that your Services are accepting 
by operating under the current top-line budget?
    General Stevenson. Operating under the current top-line budget 
impacts our Nation's strategic flexibility but does not create undue 
risk to current operations. Our current equipment readiness rates, over 
90 percent for ground and 75 percent for aviation in theater, are a 
good indicator that we are meeting our requirements. As we go forward, 
we will smartly manage the reduction and change in size and composition 
as the demand for OCO changes. The Army conducted comprehensive 
capability portfolio reviews and terminated, reduced, or deferred 
training and equipment programs that represented the lowest priority 
requirements or had declining relevance or unneeded redundancy. We will 
sustain our warfighting capabilities to prevail, even as we increase 
our ability to prevent conflict. The Army continues to ensure forces 
retain their full spectrum operational readiness and important 
modernization programs as we apply efficiency efforts across our 
equipping, training, manning, and other title 10 functions.
    General Panter. The Marine Corps is responding to the Nation's 
demands with a unique combination of expeditionary land-based and 
amphibious forces, but such commitment comes at a cost to the readiness 
of its nondeployed units. Sustaining current operations has reduced the 
aggregate readiness of the nondeployed force. Strategically, low levels 
of readiness for the nondeployed force increases risk in the timely and 
successful execution of crisis response and major contingency 
operations (war plans). If the Marine Corps were asked to respond to a 
second major contingency, the Marine Corps could respond, but would 
face significant challenges in forming a fully resourced and cohesive 
MEF-level MAGTF without delays to war plan timelines. For a smaller 
scale crisis or contingency, readiness levels of the nondeployed force 
would affect the Marine Corps' ability to respond, but to a lesser 
degree. For example, over the past 18 months the Marine Corps has 
successfully responded to crises in Haiti, Pakistan, Korea, Egypt, 
Libya, Japan, and Yemen. It would be much more difficult to respond to 
a second major contingency while sustaining current global and OEF 
requirements.
    The reality is that the Marine Corps is heavily reliant on OCO 
funding to sustain current operations in Afghanistan and around the 
globe. The Marine Corps will need this funding until reset is well 
underway, post-conflict. Lack of sufficient resources to repair and 
recapitalize equipment used after years of sustained combat operations 
could jeopardize long-term readiness of force. Accomplishing reset from 
the Marine Corps' top-line budget, in a time of fiscal austerity, will 
likely put Marine Corps modernization programs at risk.
    General Reno. Sir, the Air Force is meeting current requirements 
and committed to future readiness. We employ a number of analytical 
tools to target resources at key readiness requirements. Current Air 
Force readiness assessment is based on the Global Status of Resources 
and Training System for resources, Air Expeditionary Force Reporting 
Tool for individual and unit readiness, and the Defense Readiness 
Reporting System for capabilities-based assessment. When looking at 
data collected over the past decade regarding our equipment, training, 
as well as our personnel's readiness to perform the Nation's full-
spectrum of missions, we see that our overall readiness has been 
trending downward since 2003. Our long-term readiness concerns focus on 
aging weapon systems and high operations tempo. Although we continue to 
meet combatant commander requirements, operations tempo continues to 
take a toll and many of our aircraft are increasingly unavailable due 
to required maintenance. Consequently, modernization and 
recapitalization remain priorities. A unit's readiness to conduct all 
title 10 missions decreases during deployment. Units preparing to 
deploy focus training on expected theater wartime missions. The 
requirement to focus on the specific mission tasks for Iraq and 
Afghanistan creates strategic risk in terms of units' readiness, 
availability, and proficiency to perform other types of full-spectrum 
missions. We assume increased strategic risk with high deploy-to-dwell 
units and personnel serving in career fields frequently deployed. Short 
nondeployed windows reduce training opportunities. While we remain 
fully committed to winning today's fight as our top priority, we 
continually monitor and assess our resources so that we implement 
decisions necessary to mitigate strategic risks to readiness.
    Because of budgetary constraints for the foreseeable future, the 
rapid expansion and proliferation of advanced technology and weapon 
systems, and the anti-access and area-denial strategies that those 
weapons counter, we face a reality requiring more disciplined spending, 
efficiency, innovation, and inter-service integration and 
interoperability. In the short term, we will continue to see greater 
demand for Air Force capabilities in relatively uncontested 
environments. In the future, however, we are more likely to encounter 
the global proliferation of precision weapons, coupled with an 
increasing requirement for long-range strike and intelligence, 
surveillance, and reconnaissance (ISR) in areas guarded by increasingly 
capable, agile defenses.
    While our current plans mainly focus on near-term threats, to hold 
risk at acceptable levels we must work hard at developing and refining 
longer-term capabilities, and be mindful of the likelihood of more 
challenging budgetary constraints. For example, to reduce risk while 
conducting operations in opposed-network environments, we must improve 
our approach to electronic warfare. We have to acknowledge the 
challenges of long distance operations and the proliferation of 
sophisticated defenses, and advance our capability to conduct long-
range penetrating strike and persistent ISR.
    The growing threat of precision ballistic and cruise missiles 
compels us to increase the resilience of our bases and logistics, and 
explore ways to reduce logistics demand. To lower risk in the space and 
cyber domains, we need to continue to pursue space situational 
awareness and the space protection program to ensure access and 
attribution in that increasingly contested, congested, and competitive 
domain; and to continue actions that ensure security and freedom of 
action within the cyber domain.
    Admiral Burke. The readiness risks that the Navy is accepting are 
quantified and reported in the Quarterly Readiness Report to Congress 
(QRRC), submitted by OSD. The Navy's submission to the QRRC contains a 
general risk assessment, overall readiness ratings for the Navy, and 
specific readiness data for personnel, equipment, supply, training, and 
ordnance. Also, the Navy's submission describes specific risks in 
meeting mission essential tasks that are coordinated with Navy 
component commanders in the various COCOMs. The specific data and risk 
assessments in the QRRC, and other briefings, are classified.
    The aforementioned data is also a component of the Navy's input to 
the annual Chairman's Risk Assessment, submitted by the Chairman of the 
Joint Chief of Staff in February of each year.

                       ALTERNATIVE ENERGY SOURCES

    149. Senator Inhofe. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, all 
the Services are actively pursuing ways to reduce reliance on fossil 
fuel from foreign countries through greater conservation, efficiencies, 
and use of alternative energy sources. The initiatives range from 
continuing the certification of all military aircraft to fly on a 50/50 
blend of fuel--a project I started back in 2002 as an advanced concept 
technology development program. The Services are also working with wind 
generation, photovoltaic, landfill gas, flex fuel, and hybrid engines. 
Have the Services looked at the BCA of the cost of different energy 
sources based on location of their installation vice one-size-fits-all 
for a mandated energy policy?
    General Stevenson. While preliminary studies do exist as to what 
technologies are feasible in certain geographic locations, the Army 
does not have detailed BCA of the cost of different energy sources 
based on installation location. The Army does not have one-size-fits-
all policy for developing renewable energy projects that requires the 
use of one technology over another. Appropriate due diligence is 
necessary before making decisions about where to develop and deploy 
potential renewable energy projects. Key considerations include the 
cost of the project, return on investment, states with good policy and 
demand for renewable power, sufficient land, state incentives, 
economics of state utility market and any potential effects the project 
would have on the installations mission. In an era of constrained 
budgets it is critical that renewable energy projects developed by the 
Army and its partners provide the greatest possible benefit at an 
appropriate cost. Like the other Services, the Army is certifying our 
mainline air platforms to operate on the 50/50 bio fuel blend. The goal 
of completion is scheduled for the end of fiscal year 2013. The Army's 
tactical/combat ground platforms will complete certification by the end 
of fiscal year 2014.
    General Panter. Absolutely. All major consumers of energy, which 
certainly includes the DOD and the Marine Corps, have a role to play in 
supporting the development and utilization of alternative sources of 
energy to offset the traditional forms of energy they currently 
consume. As established in the recently signed U.S. Marine Corps 
Expeditionary Energy Strategy and Implementation Plan, the Marine Corps 
is committed to pursuing alternative energy solutions for our 
installations/facilities, our vehicle fleets, and our contingency 
operations, consistent with the Secretary of the Navy's goals.\1\
---------------------------------------------------------------------------
    \1\ Per page 23 of the Expeditionary Energy Strategy and 
Implementation Plan: ``By 2020, we will increase the amount of 
alternative energy consumed at installations to 50 percent of total 
energy consumption. Through the combination of aggressive demand 
reduction and on-installation renewable energy production, we will 
transform half of our installations into net-zero energy consumers.''
---------------------------------------------------------------------------
    On our installations, we evaluate each and every project on a case-
by-case basis and carefully assess the projects with respect to:

    (1)  mission execution,
    (2)  real estate and encroachment issues,
    (3)  environmental and cultural resource requirements, as well as
    (4)  economics and costs.

    As directed by the Energy Policy Act of 2005 \2\ and the NDAA of 
2007,\3\ the Marine Corps has actively taken steps to identify and 
implement viable renewable energy projects.\4\ Of note is a project at 
MCLB Albany which will utilize landfill gas located two miles away from 
the Base to produce 1.9 MWs of ``renewable'' electricity to support the 
Maintenance Center, where we rebuild and repair ground combat/support 
equipment. This is being accomplished through an $18.8 million Energy 
Savings Performance Contract (ESPC) with Chevron Energy Solutions to 
install the needed infrastructure and equipment.
---------------------------------------------------------------------------
    \2\ Energy Policy Act 2005 (EPAct 2005):

     Defines ``renewable energy'' as electric energy generated 
from solar, wind, biomass, landfill gas, ocean (including tidal, wave, 
current, and thermal), geothermal, municipal solid waste, or new 
hydroelectric generation capacity achieved from increased efficiency or 
additions of new capacity at an existing hydroelectric project.
     Requires the Secretary of Energy to ensure that, to the 
extent economically feasible and technically practicable, the following 
amounts of the total electricity consumed by the Federal Government 
come from renewable energy:

       Not less than 3 percent in fiscal years 2007-2009
       Not less than 5 percent in fiscal years 2010-2012
       Not less than 7.5 percent in fiscal year 2013 and 
thereafter

     Provides a bonus to Federal agencies by allowing them to 
double count renewable energy if it is produced onsite and used at a 
Federal facility.

    \3\ NDAA of 2007;

     Produce or procure not less than 25 percent of the total 
quantity of electric energy it consumes within its facilities and in 
its activities during fiscal year 2025 and each fiscal year thereafter 
from renewable energy sources (as defined in section 203(b) of the 
Energy Policy Act of 2005).
     Produce or procure electric energy from renewable energy 
sources whenever the use of such renewable energy sources is consistent 
with the considerations specified in Title 10 Section 2911.
    \4\ Current onsite facilities renewable energy generation capacity:
     Current Production (over 1 MW):

       Twentynine Palms: 2.5 MW Photovoltaic
       Camp Pendleton: 2.2 MW Photovoltaic
       Barstow: 1 MW Wind Turbine

     Under Construction/Planned (over 1 MW):

       Albany: 1.9 MW Landfill Gas Turbine
       Camp Pendleton: 8.4 MW Photovoltaic
       Camp Lejeune: 8.1 MW Photovoltaic
       Twentynine Palms: 6.3 MW Photovoltaic
       San Diego: 1.3 MW Photovoltaic
       Miramar: 3.0 MW Landfill Gas Power Purchase Agreement

    Potential advantages of renewable energy sources such as biomass, 
geothermal, solar, wind, and ocean include:

     Reliable power supplies and fuel diversification, which 
enhance energy security for individual facilities.
     Supplementary power for peak-use periods.
     Reduced greenhouse gas emissions associated with energy 
use.
     Lower risk of fuel spills in environmentally sensitive 
locations.
     Increased price stability in an uncertain energy economy.
---------------------------------------------------------------------------
    At this time, the Marine Corps is involved in multiple initiatives 
with the Naval Facilities Engineering Command and Department of Energy 
National Laboratories to identify and assess opportunities that offer 
the best potential in-terms of utilizing cost effective renewable 
generation technologies on our installations.
    General Reno. The Air Force uses an enterprise perspective to meet 
its energy policy goals based on the location and requirements of its 
installations. To ensure it makes the best use of taxpayer funds, the 
Air Force invests its available energy dollars primarily in energy 
efficiencies due to the better savings to investment ratios and the 
high cost of renewable energy.
    The Air Force is taking a balanced approach between Air Force-
focused investments to reduce energy intensity and leveraging the 
renewable energy market through third party investment to increase 
energy resiliency and redundancies. This approach enables the Air Force 
to identify, prioritize, and develop renewable energy projects before 
working with private industry using third party investments to develop 
the projects. The Air Force has a Renewable Energy Game Plan which 
identifies approximately 40 projects for fiscal years 2011-2013 
totaling more than 1,000 megawatts. A key factor in making decisions 
regarding a project relates to the cost of energy at that particular 
installation, as state or Federal initiatives can enhance the financial 
viability of the project.
    Admiral Burke. The Navy does not use a one-size-fits-all approach 
for mandated energy policy. As an example, in fiscal year 2012, the 
Navy will invest $579 million in a portfolio of more than 150 unique 
facility recapitalization, research, and process improvement projects 
across our installations that were selected using a comprehensive 
energy Return on Investment (ROI) framework and analytical tool. This 
holistic portfolio will enable the Navy's achievement of the multitude 
of shore energy legal mandates and DOD/Navy goals, while balancing the 
financial and non-financial benefits of the energy projects.
    In 2009, the Navy analyzed our energy consumption and facility data 
at the enterprise, installation, building, and component level, based 
on asset class, interdependencies, age, size, accessibility, and other 
relevant attributes. Our analysis validated each Navy installation has 
a specific set of opportunities and challenges related to energy supply 
and consumption. These challenges and opportunities are driven by a 
number of factors, including mission requirements, energy costs, 
availability, and reliability of energy supply, environmental 
conditions, as well as state and local regulations.
    As a part of the Navy's Shore Energy Strategy, each installation 
will have individual energy goals and a tailored plan to achieve them, 
based on an iterative, rigorous modeling process using industry 
benchmarks. This approach allows installations to scope projects 
multiple ways: by building, building type/mission, and/or technologies. 
Coupled with the ROI analytical tool, this will allow for the 
prioritization of investment of projects to meet the goals.

    150. Senator Inhofe. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, we 
know the cost of diesel, gas, and JP-8 has increased dramatically over 
the past 3 years which has impacted all of your operating budgets. How 
has the cost of using alternative fuels and energy sources impacted 
your operating budgets?
    General Stevenson. The Army uses ES5 and bio-diesel (B20) on our 
installations to support our Non-Tactical Vehicle (NTV) fleets, where 
available. Using ES5 and bio-diesel has not increased our costs any 
more than standard fuel costs have increased. The standard price paid 
from the operations account for ES5 and bio-diesel is about the same as 
we pay for standard gasoline or diesel fuel.
    The Army has made significant progress to improve the Army NTV 
fleet of more than 80,000 vehicles by reducing the number of large 
vehicles, transitioning the fleet to hybrid, plug-in hybrids and all-
electric vehicles. These efforts will result in the reduced reliance on 
foreign sources of oil. Currently, over 40 percent of the NTVs in the 
Army fleet are clean and green.
    The Army is in the process of qualifying tactical equipment to 
operate on alternative jet fuels, both hydro-treated renewable and 
synthetic based. This effort is in the RDT&E phase so the significant 
cost of developmental fuels has not impacted operating budgets.
    General Panter. Consistent with the information we reported in the 
Federal Automotive Statistical Tool (FAST), which is a Department of 
Energy and Office of Management and Budget web database designed to 
facilitate Federal agencies to meet all non-tactical motor vehicle 
fleet management data reporting requirements, the Marine Corps spent 
$93,975 more on E85 than it would have on gasoline in fiscal year 2010. 
However, compared to diesel fuel, we realized savings of $39,950 and 
$1,081,998 on Compressed Natural Gas and B20 biodiesel, respectively.
    This calculation is based on gas gallon equivalents and factors out 
variations between fuels such as energy content per gallon. The Marine 
Corps considers the extra money spent on E85 to be an acceptable 
expense in order to comply with Executive Orders 13423 and 13514, as 
well as the Energy Independence and Security Act of 2007 and Energy 
Policy Acts of 1992 and 2005.
    In order to achieve these petroleum reduction and alternative fuel 
use increase mandates, the Marine Corps must reduce petroleum 
consumption in light duty vehicles in addition to the medium and heavy 
duty vehicles. The only affordable alternative fuel light duty vehicles 
available in appropriate quantities are Flex Fuel vehicles that operate 
on gasoline or ethanol. As a result, the Marine Corps intends to 
continue its investments in ethanol infrastructure and ethanol fuels.
    General Reno. At this time, the Air Force is not using alternative 
aviation fuel on an operational basis. The alternative aviation fuel we 
purchased has been for test and evaluation purposes only. Once the 
fleet is certified for unrestricted operations using an alternative 
fuel blend, the Air Force is committed to ensuring any alternative 
aviation fuel purchasers are cost competitive with traditional JP-8.
    Admiral Burke. The cost of alternative fuels is not currently 
impacting Navy operations accounts given the fuels are still in 
development and only being used for small scale testing and 
certification of biofuels which are primarily funded by R&D. The Navy's 
first major use of alternative fuels will come in 2016 with the sailing 
of the great green fleet which will require 80K barrels of fuel.
                                 ______
                                 
             Questions Submitted by Senator Saxby Chambliss

                        SUPPLY CHAIN MANAGEMENT

    151. Senator Chambliss. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, GAO 
produced a number of reports in recent years about the cost to the DOD 
of problems with its supply chain management system. A January 7, 2011, 
GAO report stated: ``Since 1990, we have identified DOD supply chain 
management as a high risk area due in part to ineffective and 
inefficient inventory management practices and procedures, weaknesses 
in accurately forecasting demand for spare parts, and challenges in 
achieving widespread implementation of key technologies aimed at 
improving asset visibility. These factors have contributed to the 
accumulation of billions of dollars in spare parts that are excess to 
current requirements.'' The DOD, in both its 2006 and 2010 Quadrennial 
Defense Review (QDR) reports, has also spoken of the need to address 
this challenge. The 2006 report said that ``the use of active and 
passive radio frequency identification (RFID) technologies will play a 
key role in achieving DOD's vision for implementing knowledge-enabled 
logistics support to the warfighter through automated asset visibility 
and management.'' What actions is DOD taking to improve asset 
visibility, reduce costs, and improve accuracy and efficiency in 
delivery of needed supplies to warfighters?
    General Stevenson. The Department has recently developed the DOD 
Comprehensive Inventory Management Improvement Plan (CIMP) which 
addresses the 7 January 2011 GAO report findings and recommendations. 
The Army worked closely with the Office of the Deputy Assistant 
Secretary of Defense for Supply Chain Integration in the development of 
the CIMP and we are well underway in implementing the various 
initiatives outlined in the plan to improve our inventory management 
practices, enhance spare parts demand forecasting and improve asset 
visibility. I will highlight a few.
    The Army is pursing multiple efforts to improve inventory 
management practices. One is a reduction of excess stocks through a 
detailed review process by eliminating those items with no demands in 
the past 2 years. This effort will reduce our storage costs and 
inventory management requirements. Another is the centralization of our 
field level inventory stockage determination processes under the Army 
Materiel Command, who will ensure those items stocked in our Supply 
Support Activities (SSAs) are the right demand supported readiness 
enablers, in the right quantities, to keep combat systems operational 
and in the fight. Third, the Army Materiel Command is aggressively 
working to reduce excess procurements on-order before they are 
delivered from industry which prevents us from building up unnecessary 
inventory.
    To improve spare parts demand forecasting accuracy, we are working 
with the DLA to develop a new Demand Data Exchange process to improve 
the accuracy of Army repair depot parts forecasts. This will reduce 
repair lead-times and more quickly provide critical assets to the 
warfighter. In addition, the Army is developing national-level forecast 
accuracy metrics as part of the DOD CIMP implementation effort that 
will ensure we procure the right repair parts in the right quantities. 
Finally, in the area of Organizational Clothing and Individual 
Equipment (OCIE), we are changing our software to incorporate a Reorder 
Point and Requisition Objective algorithm into our Central Issue 
Facilities that will streamline what they stock, how many of each item 
and when the CIF will reorder items. This will enable DLA to be more 
predictive in Army OCIE requirements as well as improve our own 
internal Army CIF management processes. Finally, the Army has initiated 
several studies to address demand forecasting in order to see where we 
can improve and how. We know we still have work to do in this area and 
have put a focused level of attention to it.
    Finally, the Army is also implementing a number of new technologies 
to improve asset visibility of those assets in transition and in 
storage. For example, we are employing active RFID today at our 
overseas SSAs and piloting use of passive RFID at two of our stateside 
installation level SSAs. We are also testing the use of commercial 
satellite technology to provide ``real time `` and reliable data to 
identify and track Army cargo--especially in areas such as Afghanistan. 
We are also implementing Individual Unique Identification (IUID) 
technologies to track individual items throughout their lifecycle on a 
worldwide basis. This capability will reside within our new Global 
Combat Support System-Army, which begins fielding in fiscal year 2014. 
The Army is also an active participant in the DLA In Storage Visibility 
(ISV) program which provides inter-service visibility and accessibility 
of excess spare parts on a localized basis which increases supply chain 
efficiencies and effectiveness.
    These are a few examples of supply chain management initiatives and 
process changes underway in the Army to ensure we operate more 
efficiently, improve our demand forecasting and enable asset visibility 
in order to ensure responsive and efficient support to our warfighters.
    General Panter. The Marine Corps currently uses in-transit 
visibility (ITV) down to the tactical level in the OEF theater of 
operations leveraging active RFID and utilizing the Automated Manifest 
System-Tactical (AMS-TAC), portable RFID interrogators and Warehouse to 
Warfighter-Last Tactical Mile kits. We are also looking at ways to 
combine the utility of both RFID and IUID. Blount Island Command is 
currently utilizing passive RFID in combination with IUID to more 
accurately and efficiently account for principal end items on board the 
Maritime Prepositioning Ships and in the maintenance cycle ashore.
    The Marine Corps is actively engaged in implementing IUID which 
will:

    (a)  Provide improved item accountability and visibility to enhance 
operational planning,
    (b)  Lower the total life-cycle costs of items acquired and 
managed,
    (c)  Provide item visibility regardless of the weapon system or who 
owned the item,
    (d)  Provide item data needed for top-level logistics and 
engineering analysis,
    (e)  Facilitate issuance of a clean financial audit opinion as 
required by the 1990 Chief Financial Officers' Act by providing an 
accurate data source for determining value and accountability of 
property and equipment,
    (f)  Improve access to historical item life cycle information from 
system design to disposal.

    General Reno. The memorandum from the Under Secretary of Defense 
for Acquisition, Technology, and Logistics, ``Lead Proponent for RFID 
and related Automatic Identification Technology (AIT),'' dated 
September 26, 2006, appointed the U.S. Transportation Command 
(TRANSCOM) as the functional lead to implement RFID and AIT in the DOD 
supply chain.
    To date, two TRANSCOM working groups, the Supply Chain Operations 
Team (focused on Distribution) and the In-Transit Team (focused on 
Materiel Management), have been established to improve asset 
visibility, reduce costs, and improve accuracy and efficiency in 
delivering needed supplies to warfighters. The Air Force is actively 
participating in both working groups as the team develops a centralized 
approach for using asset visibility technologies.
    As part of the overall DOD effort, the Air Force has implemented 
AIT at key nodes in the supply chain to improve asset visibility and 
improve accuracy in delivery of supplies. In support of in-transit 
visibility, the Air Force operates a worldwide network of active RFID 
readers enabling each shipping function with the capability to 
commission (write) active RFID tags. We are also using passive RFID in 
combination with barcodes to provide positive inventory control of key 
sensitive assets. In conjunction with the TRANSCOM Supply Chain 
Operations Team, the Air Force is assessing the cost benefit of using 
passive RFID to trace depot level reparables.
    Admiral Burke. The Department of the Navy (DON) actively employs a 
multi-faceted approach to leverage various capabilities to support 
enhanced asset visibility--In Storage Visibility (ISV), item 
identification, and aid in reducing the total lifecycle cost of 
ownership. This coordinated approach is based on: (1) the application 
of the appropriate technology to meet requirements; (2) the use of 
actionable implementation plans; and (3) the adherence to DON/DOD 
policy and guidance to ensure standardization within and across the 
enterprise. The process of improving item identification accuracy 
begins as items are marked at time of initial acquisition and induction 
into DON accountability records as required by OUSD(AT&L) RFID Policy 
dated 3 June 2004 entitled, ``RFID Mandatory on All Solicitations for 
Delivery of Material on/after 01 January 2005.'' Within the DON supply 
chain, AIT is being inserted at specific logistics nodes (i.e., 
warehouse inventory and asset management) and between nodes (i.e., 
transportation management) to effect a more comprehensive, accurate, 
and timely end-to-end visibility and accountability trail.
    Efforts are jointly coordinated with OSD and TRANSCOM (Distribution 
Process Owner for DOD AIT). Currently, Navy Logistics initiatives are 
focused around four key supply chain components:

         Passive RFID (pRFID) enablement of the end-to-end Navy 
        Repairables supply chain - an effort to improve In-Transit and 
        Asset Visibility of the $11 billion Navy Repairables program 
        from the consumption to maintenance induction cycle at the 
        Navy's largest repairables sites.
         2D Bar Code enablement of Naval Ordnance supply chain 
        to improve In-Transit and Asset Visibility for the Navy's $34 
        billion conventional ordnance inventory by implementing 
        automated 2D bar code transaction processing at over 1,000 Navy 
        sites worldwide.
         Wireless Bar Code enablement of Navy ERP Warehouse and 
        Inventory Management Operations to wirelessly enable all 
        warehouse and inventory management business processes at sites 
        that are being converted to Navy ERP System in fiscal years 
        2011 and 2012.
         Navy-wide sustainment of active RFID (aRFID) programs 
        at almost 200 Navy field activities in support of COCOM in-
        theatre material movement requirements for bulk material 
        shipments (e.g., sea vans, 43L pallets).

    152. Senator Chambliss. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, as one 
example, I understand Tobyhanna Army Depot has instituted asset 
tracking technologies that are accomplishing these objectives. What 
steps are being taken system wide to improve asset visibility and 
supply chain management?
    General Stevenson. The Army has made significant progress towards 
meeting the 2006 QDR objective to enhance the use of active and passive 
RFID technologies. Examples of how the Army is currently using 
automated identification technology (AIT) and an explanation of the 
Army's enterprise-level solution for expanding and integrating the use 
of AIT is as follows:
    Tobyhanna Army Depot, cited in the question, is a good example of 
how AIT is being used to track assets and improve resource management 
at our repair depots. Tobyhanna uses active RFID tags and a network of 
nearly 100 interrogators and location sensors to track the movement and 
location of weapon system parts throughout the facility. The depot uses 
this information, combined with continuous scheduling process 
improvements, to improve its daily operations. The depot also uses RFID 
tags for its test, measurement and diagnostic equipment (to quickly 
locate items for required calibration and loss prevention) and for its 
materiel handling equipment (to locate and recover equipment that is 
due for maintenance inspection or to redistribute equipment where 
needed).
    In the field and at the installation level, the Army is 
implementing several AIT capabilities to enable the automated transfer 
of data vice relying on manual entry of data--this not only saves time 
for the soldier, but also reduces the errors associated with the manual 
entry of data. For example, the Army employs active RFID today in all 
shipments to its overseas supply support activities (SSAs), and is 
initiating passive RFID at two stateside installation level SSAs. The 
Army is also testing the use of commercial satellite technology to 
provide ``real time `` and reliable data to identify and track Army 
cargo--especially in areas such as Afghanistan. Finally, the Army is 
also implementing IUID technologies to track individual items 
throughout their lifecycle on a worldwide basis.
    Many of these AIT capabilities are being standardized within the 
Global Combat Support System-Army (GCSS-Army), which begins fielding in 
fiscal year 2014. GCSS-Army is a state-of-the-art ERP program that 
links the data, systems and processes within the GCSS-A with those of 
the Army's operational national level logistics and financial systems.
    The Army is also taking system wide steps to improve its supply 
chain management (SCM) operations by working closely with the Office of 
the Deputy Assistant Secretary of Defense for Supply Chain Integration 
in implementing its Comprehensive Inventory Management Plan (CIMP). The 
plan is focused on improving inventory management practices, enhancing 
repair parts demand forecasting and improving asset visibility. As part 
of the CIMP, the Army is reducing excess stocks through a detailed 
review process by eliminating those items with no demands in the past 2 
years--this effort will reduce storage costs and inventory management 
requirements. Additionally, the Army Materiel Command (AMC) is 
aggressively working to reduce excess procurements on-order before they 
are delivered from industry, which prevent the build up of unnecessary 
inventory. In addition, the Army is developing national-level forecast 
accuracy metrics as part of the DOD CIMP implementation effort that 
will ensure procurement of the right repair parts in the right 
quantities.
    The Army also has multiple system-wide SCM improvement initiatives 
independent of the CIMP effort. One is the centralization of the field 
level inventory stockage determination process under the AMC, who will 
ensure those items stocked forward in Supply Support Activities are the 
right demand supported readiness enablers, in the right quantities, to 
keep combat systems operational and in the fight. Another is the work 
ongoing with the DLA to improve repair parts demand forecasting 
accuracy by developing a new Demand Data Exchange process to improve 
the accuracy of Army repair depot parts forecasts. This will reduce 
repair lead-times and more quickly provide critical assets to the 
warfighter. In addition, the Army is working closely with DLA to ensure 
selective stockage of large, heavy or bulky items in DLA forward 
distribution depots required to responsively sustain our forward 
deployed forces, with surface replenishment, thus avoiding the 
transportation costs associated with moving these items by air.
    In summary, these are a few of the SCM and asset visibility 
improvement efforts underway in the Army. The keystone of our holistic 
approach is completing the integration and fielding of the GCSS-Army, 
financial, and national level logistics ERP systems. This major 
systemic improvement is enabling the Army to plan for and implement 
significant asset visibility and SCM enhancements--these changes will 
help the Army to reduce overall costs while improving the delivery of 
needed supplies to the warfighter.
    General Panter. A most recent USMC review of the ``Draft DOD AIT 
Implementation Plan (IP) For Distribution Operations Policy'' validates 
our commitment and contributes to supporting the DOD level integration 
and synchronization of AIT distribution. This regulation identifies and 
provides oversight of the proponent activities, supporting agency 
responsibilities and the affected technologies that support global 
distribution operations. While systems are not specifically spelled out 
due to Service AIS architecture, the principle of using IUID and active 
and passive RFID in support of evolving DOD AIT efforts is a constant. 
USMC is supporting the use all three practices to achieve an overall 
goal of obtaining in-transit and total asset visibility and 
accountability of Marine Corps equipment.
    The below provides examples of USMC AIT efforts/actions:

IUID:
    The USMC is currently supporting OSD IUID marking requirement by 
marking applicable equipment. Marine Corps Logistics Command (MCLC) has 
implemented efforts to inspect all newly procurement items and to place 
marks/labels on previously procured and legacy equipment.

Passive RFID (pRFID):
    MCLC's Automated Information Data Capture (AIDC) initiative is a 
Congressionally sponsored MARCORSYSCOM supported endeavor to automate 
the receipt, issue, and inventory all materials/items stored within the 
USMC wholesale supply activities. This initiative provides real-time 
visibility and accountability of equipment, thus contributing to supply 
chain velocity.

Active RFID (aRFID):
    The USMC is in full compliance with the DOD employment of active 
RFID ISO global contingency operations. We employ PDKs, warehouse to 
warfighter kits, and other fixed interrogators to facilitate DOD-wide 
ITV/TAV efforts/actions.

GCSS-MC:
    The Marine Corps is beginning the total force implementation of 
Global Combat Support System-Marine Corps which will provide real time 
demands submission, status and tracking as well as advanced supply 
chain planning functionality which will facilitate better forecasting 
and inventory positioning. The system will allow for Service wide 
visibility of all assets as well as their state of readiness.
    General Reno. The DOD has taken the initial steps by identifying 
TRANSCOM as the lead functional proponent to implement RFID and AIT in 
the DOD supply chain.
    The Air Force is actively participating in the TRANSCOM Supply 
Chain Operations Team's efforts to develop an enterprise wide approach 
for using asset visibility and supply chain management technologies.
    Within the Air Force, we have implemented several AIT capabilities 
aimed at automating base supply, transportation, munitions, and 
maintenance management data. By utilizing mobile wireless hand-held 
terminals with bar code and RFID capability, we are improving inventory 
data collection and accuracy, while reducing the time required to 
complete inventories.
    Another example of where the Air Force has used AIT to improve 
asset visibility and supply chain management is in the Nuclear Weapons 
Related Materiel area. AIT has improved the visibility and the command 
and control of these critical assets across the nuclear enterprise.
    The Air Force is also partnering with the DLA to develop an AIT 
pilot project that will enhance visibility of depot level reparables as 
they move through the supply chain.
    Admiral Burke. Improving asset visibility and the effectiveness of 
the supply chain is predicated on improving the value of logistical 
information (i.e., availability, quality, timeliness and integrity). 
Navy is leveraging the functional strengths of AIT through careful 
application of the right technology to facilitate improved logistical 
information management. The implementation of Navy ERP will enhance 
Navy's ability by integrated business management capability that 
modernizes and standardizes Navy business operations, provide 
unprecedented management visibility across the enterprise, and increase 
the effectiveness and efficiency of the Navy's support for the 
warfighter with improved forecasting and total asset visibility. The 
DON challenge is not only to insert AIT into the supply chain, but work 
in conjunction with numerous supply chain Automated Information Systems 
(AIS) owners to integrate AIT generated data into the existing supply 
chain data architecture providing improved logistics situational 
awareness to warfighters and logisticians alike.
    AIS owners (e.g., Navy ERP, Ordnance Information System) support 
integration of AIT generated information into their organic data 
streams. Navy works closely with elements of OSD, TRANSCOM, DLA, and 
the other Services and Agencies to ensure effective communications 
exist to minimize duplication of effort, wasteful expenditure of 
resources and improve optimization of the value of resulting AIT 
enabled logistical information.
    To meet these challenges, the Navy has placed greater emphasis on 
developing an enterprise approach towards AIT insertion into Navy 
systems. An enterprise approach is designed to better support the DON 
and DOD end-to-end supply chains and subsequent warfighter support. The 
Navy approach is focused around four key systems and their respective 
supply chains:

         eRMS - electronic Retrograde Management System
         TARP - Technical Assistance for Repairables Processing
         OIS - Ordnance Information System
         Navy ERP SAP WM - Systems Application and Products 
        Warehouse Management
         AMS-TAC - Automated Manifest System, Tactical

    AIT enablement of these four systems has been placed into 
production environments in varying degrees of maturity and completion. 
As these systems continue to mature the Navy may further expand AIT 
insertions into other Navy systems.
    Additionally, section 328 of the NDAA for Fiscal Year 2010 
established a formal requirement for the Secretary of Defense to submit 
``a comprehensive plan for improving the inventory management systems 
of the Military Departments and the DLA with the objective of reducing 
the acquisition and storage of secondary item inventory that is excess 
to requirements.'' The overall objective of the plan is a prudent 
reduction in current inventory excesses as well as a reduction in the 
potential for future excesses without degrading material support to our 
customers.
    Navy is currently coordinating with all services and working 
directly with the Office of Secretary of Defense (OSD) to develop and 
fulfill the requirements of the Comprehensive Inventory Plan and 
detailed sub-plans to fulfill the requirements of Section 328 of the 
NDAA.

    153. Senator Chambliss. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, are 
there additional actions that can reduce costs, lessen manpower 
demands, reduce surplus inventories and lost items, and improve 
delivery to needed supplies to forward deployed forces?
    General Stevenson. Yes, the Army has implemented numerous 
initiatives to reduce costs, lessen manpower demands, reduce surplus 
inventories, reduce lost items and improve delivery of needed supplies 
to our forward deployed forces. I will highlight a few things the Army 
is doing and pursuing.
    In efforts to reduce costs and surplus inventories, we have 
undertaken an aggressive effort to reduce excess stocks by eliminating 
those items with no demands in the past 2 years. We have also 
centralized our field level inventory stockage determination processes 
under the Army Materiel Command to ensure the repair parts we stock 
forward in our Supply Support Activities are the right demand supported 
readiness enablers, in the right quantities, to keep combat systems 
operational and in the fight. Both these efforts reduce storage costs 
and handling requirements while enhancing the support we provide to our 
warfighters. In addition, we are working closely with the DLA to ensure 
we selectively stock large heavy or bulky items in DLA forward 
distribution depots required to responsively sustain our forward 
deployed forces, with surface replenishment, thus avoiding the 
transportation costs associated with moving these items by air.
    To lessen manpower demands, we are implementing several 
technologies such as IUID and barcode scanners to enable the automated 
transfer of data vice relying on manual entry of data. This not only 
saves time for the soldier, but also reduces the errors associated with 
the manual entry of data. The Army is also employing radio frequency 
technology to track shipments of supplies and equipment and exploring 
the use of satellite tracking technology in efforts to reduce pilferage 
and lost cargo. With regard to accountability, the Army has launched 
the Army Property Accountability Campaign to ensure that every item is 
posted to record, thus providing accurate accountability and visibility 
of supplies and materiel at every level throughout the Army. This 
campaign applies not only to theater but also to those units who have 
redeployed to home station. This is being accomplished through the 
emphasis of the Command Supply Discipline Program at every level of 
command.
    Each of these initiatives are designed to improve the delivery of 
needed supplies to our forward deployed forces and have reduced 
customer wait times, lowered air transport expenses, and lessened 
storage and handling requirements. Also, we are shifting more cargo to 
the expanded Northern Distribution Network in order to reduce the risk 
of theft and pilferage that occurs over the Pakistan routes and to 
ensure we deliver needed supplies to our forward deployed forces.
    In summary, these are a few examples of some of the initiatives and 
actions being taken in the Army to ensure we reduce costs, lessen 
manpower demands, reduce surplus inventories and lost items, and 
improve delivery of needed supplies to forward deployed forces.
    General Panter. Yes. An integrated and transparent supply chain 
will enable the Services to maintain only the inventory they need to 
operate and maintain a high state of readiness. The Marine Corps 
implementation of GCSS-MC will allow service wide visibility of 
inventory availability. We are also working with DLA in more closely 
aligning their logistics capability with our own. This will have the 
net effect of reducing Marine Corps inventory on hand, with the 
associated requirements for personnel and space. We are currently 
reviewing and revising our policies, training and systems to create a 
more visible and integrated supply chain to more effectively support 
the warfighter in a deployed environment.
    General Reno. Yes. There are three areas we believe we can expand/
exploit across the Services and to DLA. First, the Air Force's 
inventory optimization technique(s) maximizes weapon system/customer 
support while minimizing cost. We have seen these ``bang for the buck'' 
models reduce cost, inventory, and improve support in our core 
logistics processes (e.g. repair, procurement, distribution, and 
inventory).
    Next, continued implementation of a Service-led Commodity Sourcing 
Program, backed up with a comprehensive Spend Analysis, allows a 
Service to take advantage of price breaks, leverage spend with 
suppliers, reduce lead times, and be more responsive to changes in 
customer requirements. It is important to note, these commodity 
strategies are difficult to develop and are best led by the Service who 
has engineering control and the experience with the product, commodity, 
or system to be supported.
    Finally, the Services operate in a dynamic environment and need a 
dynamic, responsive supply chain to deal with the ever-changing 
priorities and mission requirements. Further development of methods and 
decision support tools that create ``sense and respond'' supply chain 
capabilities--essentially focusing on responsiveness in the face of 
changing priorities--is critical to our ability to reduce manpower, 
cost, and footprint while meeting the mission.
    Admiral Burke. The Navy is continually reviewing initiatives that 
address Total Ownership Costs (TOC) and increase efficiencies. These 
are addressed within the Navy N4 Strategic Plan and my staff is engaged 
in efforts such as TRANSCOM's Strategic Network Optimization, Navy 
Logistics Integration (NLI) efficiencies, the Affordability Initiative 
Process, and the Stock Positioning Steering Group. Current policy 
regarding the outfitting of spares for weapons systems utilize 
validated models to attain readiness goals while minimizing end item 
stock on hand, and attaining the lowest cost possible. Activities are 
also using continuous process improvement tools such as Lean 6 Sigma to 
improve supply and maintenance efficiencies at the unit level, reducing 
TOC, and lessening the requirement for large amounts of stock on hand.
    In addition, a robust maintenance strategy is essential to minimize 
the TOC of Navy platforms and ensure that these assets meet their 
expected service life. Crucial to executing any maintenance strategy is 
a clear understanding of the current condition of each asset and a 
detailed plan for properly maintaining and logistically supporting the 
equipment.

              RADIO FREQUENCY IDENTIFICATION TECHNOLOGIES

    154. Senator Chambliss. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, in the 
last decade both passive and active RFID technologies have progressed 
greatly, with many government and nongovernment studies showing great 
cost savings in asset and personnel management and tracking. What steps 
are being taken by your agency to incorporate these technologies and/or 
calculate true overall cost savings that would result from their 
incorporation?
    General Stevenson. The Army uses RFID as part of a suite of AIT. 
The use of both active and passive RFID technology provides 
accountability and visibility benefits in asset tracking. RFID 
technology enables tracking and management of Army supplies and 
equipment end-to-end. Army orders mandate the use of active RFID 
tagging on all containers, aerial pallets, and equipment outside the 
Continental United States in support of OND and OEF.
    The use of the active RFID allows supply chain managers at all 
levels to know what is inbound. Additionally, historical data obtained 
from RFID tag reads allows supply chain managers to make decisions on 
resource allocation to mitigate bottlenecks. Two operational examples 
include:

    (1)  tag reads showed that containers were queuing at the entrance 
to bases in Afghanistan. Theater managers instituted 24 hour entry 
control point operations, requested additional materiel handling 
equipment and established secure container holding yards to call 
forward containers based on capability to handle thereby reducing 
queuing.
    (2)  Volume at some supply support activities was too low to 
rapidly build ``unit-pure'' containers as units drew down in Iraq. Data 
obtained from tag reads gave managers the information to direct 
consolidation of low volume containers, consolidate the containers in 
theater and onward move them to supply activities.

    These actions reduce the volume of inventory in the supply pipeline 
and increase efficiency.
    The Army has initiated use of passive RFID to manage large volumes 
of like items, specifically body armor and parachutes. This allows 
commanders to rapidly inventory and segregate items by size without 
conducting a visual inventory. Additionally, the passive RFID component 
of the Parachute Tracking System allows commanders to segregate chutes 
that were packed by a specific parachute rigger in the event of a 
malfunction. This is a potential life saving capability, exponentially 
increasing the ability to rapidly and accurately segregate the chutes. 
Finally, while investment in passive RFID for use in tactical supply 
activities has been deemed to have an insufficient return on 
investment, the Army is piloting the use of passive RFID at 
installation-level supply activities at Forts Bragg and Irwin.
    General Panter. The Marine Corps has implemented and used active 
RFID for 7 years. We have seen the increased nodal visibility of 
supplies moving across the transportation pipeline. The benefit to 
active RFID is cost avoidance; we no longer requisition a supply item 
multiple times to ensure its delivered within the required timeframe 
since active RFID allows us to track the item through the supply 
pipeline. Our ERP solution (GCSS-MC) will also be implementing passive 
RFID technology as a part of future development efforts. We anticipate 
that passive RFID will also play a role in increased visibility.
    General Reno. The Air Force, along with the other military 
departments, is actively participating in the AIT governance structure 
led by the TRANSCOM. The Air Force focus is to work within the 
governance structure to identify, validate, and implement capabilities 
that can improve retail and wholesale business processes, meet 
overarching DOD supply chain objectives, as well as potential methods 
to determine cost savings.
    Additionally, as part of TRANSCOM's Supply Chain Operations Team, 
we're also partnering with the DLA to develop an AIT pilot project to 
enhance visibility of depot level reparables as they move through the 
supply chain.
    Admiral Burke. The TRANSCOM Concept of Operations and the 
associated Implementation Plan forms the foundation for overall DOD 
active (aRFID) and passive (pRFID) implementations and operation across 
the DOD, including the DON. The Navy is fully compliant with the 
TRANSCOM installation plan to include initial pRFID and aRFID systems 
installed at multiple locations in CONUS and Hawaii. These sites 
support new acquisition and repairable supply chains (aRFID and pRFID), 
contingency operations using Portable Deployment Kits and Early Entry 
Deployment Support Kits (aRFID), and a personnel tracking pilot at 
Naval Shipyard Pearl Harbor HI (pRFID). In compliance with TRANSCOM 
requirements, the Navy has developed a series of strategic level 
performance metrics designed by TRANSCOM to support the calculation of 
Return on Investment (ROI) across the DOD supply chain with ongoing 
information collection. Current TRANSCOM performance metrics are:

    a.  pRFID - Percent of total shipments tagged using pRFID
    b.  pRFID - Percent read rate of pRFID tagged shipments
    c.  pRFID - Receiving process Productivity improvement
    d.  pRFID - Time between physical and logical shipment receipt 
using pRFID
    e.  pRFID - Logistics Response Time for all Issue Priority groups
    f.  pRFID - Order Variability (Logistics Response Time segmented by 
Issue Priority group)
    g.  pRFID - Discrepancy Handling Time/Frustrated Freight
    h.  pRFID - Value of shipment losses
    i.  aRFID - Percent read rate of aRFID tagged shipments
    j.  aRFID - Percent of aRFID tags reused

    155. Senator Chambliss. Lieutenant General Stevenson, Lieutenant 
General Panter, Lieutenant General Reno, and Vice Admiral Burke, it is 
my understanding that there are differences in the functionality and 
cost of active and passive RFID technology. Has the DOD reviewed and 
compared the value, costs, and benefits of each of these technologies 
in the management of the DOD's supply chain, and if so, what 
conclusions have you reached?
    General Stevenson. Yes, the Army has reviewed and compared the 
value, costs, and benefits of each of these technologies in the 
management of the Army supply chain. The comparative cost of active and 
passive RFID tags are significant ($57.00 for active vice $.10 for 
passive), but the use of both technologies provide benefits to the 
Army.
    Each technology has its own pros and cons. Active RFID tags hold 
relatively large amounts of data; are continuously powered, and are 
normally used when a longer tag read distance is desired. Passive RFID 
requires strong Radio Frequency signals from an interrogator, and the 
signal strength equates to a shorter range for passive tags than for 
active tags. Both technologies are beneficial depending on the type of 
function needed. Due to the volume of activity at Army tactical Supply 
Support Activities (SSA), instrumenting them for use of passive RFID 
has not been found to be cost effective; however, at the installation 
SSA, there may be sufficient volume to provide an appropriate return on 
investment--in order to prove that out, two Army installation SSAs are 
currently piloting the use of passive RFID. Additionally, use of 
passive RFID appears to show promise with tracking the Army's parachute 
inventory.
    With the natural progression of new technology on the commercial 
market, the Army is exploring the use and benefits of satellite 
technology to provide `real time' and reliable data to identify and 
track Army cargo. The integrated capability of satellite and RFID 
technology with sensor and security monitoring capabilities will 
provide a single source of data sharing across all DOD logistics 
systems. In July 2011, the Army, in coordination with TRANSCOM, will 
test the use of satellite tags on over 200 unit containers moving from 
a CONUS installation to a theater of operation.
    General Panter. Yes we have. Within the DOD supply chain, we see 
the value of both. Since implementing active RFID 7 years ago, we have 
increased the visibility of supplies in the transportation/distribution 
pipeline. With the DOD migration to a commercial standard for active 
RFID technology, increased competition will reduce our overall costs 
while continuing to maintain nodal visibility. We also see the value of 
passive RFID technology. Once our ERP solution is fully developed and 
fielded, we believe passive RFID technology will also increase 
visibility.
    General Reno. The DOD has taken the initial steps by identifying 
TRANSCOM as the lead functional proponent to implement RFID and AIT in 
the DOD supply chain. As result, TRANSCOM has established two working 
groups to determine how and where to implement the available technology 
and balance efficiencies with mission effectiveness. The Air Force is 
an active participant in this effort.
    Admiral Burke. The measured insertion of AIT into the DON supply 
chain is valuable in enhancing the quality of support to COCOMs. The 
Navy has worked in cooperation with TRANSCOM, as the DOD Distribution 
Process Owner, and other component services to optimize the use of both 
active and passive RFID (aRFID and pRFID) by standardizing how each is 
used throughout the DOD supply chain. The result is a cost effective 
blending of aRFID and pRFID technology across item, package, container 
and vehicular levels in support of COCOM Total Asset Visibility and ITV 
requirements. Essentially, pRFID has been effective at the Package, 
Transport Unit and Unit Load Levels while aRFID has been effective at 
the Container Level.
    The Navy has effectively applied aRFID at sites such as FISC 
Norfolk Ocean Terminal Container Freight Station, Navy Non-Self 
Deployers (Unit Movers), the aircraft engine community, the ordnance 
community, and Navy Exchange Command. The Navy's aRFID use is in 
compliance with TRANSCOM concept of operations and associated 
implementation plan, and as directed by COCOMs to meet ITV requirements 
for sea vans, engine containers, 463L air cargo pallets, and 
prepositioned material. pRFID is effectively applied at the package, 
case, and pallet levels where inexpensive passive tags satisfy asset 
visibility demand requirements. This combination provides a cost 
effective solution to logistics challenges presented by today's 
environment and those anticipated in the future.
    Analysis of pRFID metric data such as Logistics Response Time 
indicates the supply chain benefits from the insertion of pRFID through 
improved asset identification and visibility. Additional causative 
research is required to quantify the degree of impact such insertion 
has had and is anticipated to have in the future. Comprehensive cost/
benefit analysis for aRFID and pRFID is dependent upon continued RFID 
implementations to more fully enable larger segments of the DON supply 
chain with RFID technology. Implementations continue toward achieving 
that goal. Expected quantified benefits include labor savings related 
to improvements in automating inventory reporting and potential 
inventory cost avoidance related to reductions in lost or misidentified 
material.
    The Navy considers the continued deployment of AIT into the supply 
chain to be cost effective and valuable.

    [Whereupon, at 11:50 a.m., the subcommittee adjourned.]

                                 
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