    [House Hearing, 113 Congress]
    [From the U.S. Government Publishing Office]

                           [H.A.S.C. No. 113-18]
    =====================================================================

        IS BASE REALIGNMENT AND CLOSURE (BRAC) APPROPRIATE AT THIS TIME?

                                   __________

                                    HEARING

                                   BEFORE THE

                           SUBCOMMITTEE ON READINESS

                                     OF THE

                          COMMITTEE ON ARMED SERVICES

                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED THIRTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                  HEARING HELD

                                 MARCH 14, 2013

    [GRAPHIC] [TIFF OMITTED]

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                           SUBCOMMITTEE ON READINESS

                     ROBERT J. WITTMAN, Virginia, Chairman

    ROB BISHOP, Utah                     MADELEINE Z. BORDALLO, Guam
    VICKY HARTZLER, Missouri             JOE COURTNEY, Connecticut
    AUSTIN SCOTT, Georgia                DAVID LOEBSACK, Iowa
    KRISTI L. NOEM, South Dakota         COLLEEN W. HANABUSA, Hawaii
    J. RANDY FORBES, Virginia            JACKIE SPEIER, California
    FRANK A. LoBIONDO, New Jersey        RON BARBER, Arizona
    MIKE ROGERS, Alabama                 CAROL SHEA-PORTER, New Hampshire
    DOUG LAMBORN, Colorado               WILLIAM L. ENYART, Illinois
    E. SCOTT RIGELL, Virginia            PETE P. GALLEGO, Texas
    STEVEN M. PALAZZO, Mississippi
                   David Sienicki, Professional Staff Member
                    Brian Garrett, Professional Staff Member
                        Nicholas Rodman, Staff Assistant

                                C O N T E N T S

                                  ----------

                         CHRONOLOGICAL LIST OF HEARINGS
                                      2013

                                                                       Page

    Hearing:

    Thursday, March 14, 2013, Is Base Realignment and Closure (BRAC)
      Appropriate at This Time?......................................     1

    Appendix:

    Thursday, March 14, 2013.........................................    29
                                  ----------

                            THURSDAY, MARCH 14, 2013
        IS BASE REALIGNMENT AND CLOSURE (BRAC) APPROPRIATE AT THIS TIME?
                  STATEMENTS PRESENTED BY MEMBERS OF CONGRESS

    Bordallo, Hon. Madeleine Z., a Delegate from Guam, Ranking
      Member, Subcommittee on Readiness..............................     2
    Wittman, Hon. Robert J., a Representative from Virginia,
      Chairman, Subcommittee on Readiness............................     1

                                   WITNESSES

    Conger, John, Acting Deputy Under Secretary of Defense for
      Installations and Environment..................................     4
    Ferguson, Kathleen, Acting Assistant Secretary of the Air Force
      for Installations, Environment and Logistics...................     9
    Hammack, Hon. Katherine, Assistant Secretary of the Army for
      Installations, Energy, and the Environment.....................     6
    Natsuhara, Roger, Principal Deputy Assistant Secretary of the
      Navy for Energy, Installations and Environment.................     8

                                    APPENDIX

    Prepared Statements:

        Conger, John.................................................    35
        Ferguson, Kathleen...........................................    65
        Hammack, Hon. Katherine......................................    46
        Natsuhara, Roger.............................................    60
        Wittman, Hon. Robert J.......................................    33

    Documents Submitted for the Record:

        [There were no Documents submitted.]

    Witness Responses to Questions Asked During the Hearing:

        Mr. Scott....................................................    75

    Questions Submitted by Members Post Hearing:

        Mr. Barber...................................................    85
        Ms. Bordallo.................................................    83
        Mr. Enyart...................................................    88
        Ms. Shea-Porter..............................................    86
        Ms. Speier...................................................    84
        Mr. Wittman..................................................    79
        IS BASE REALIGNMENT AND CLOSURE (BRAC) APPROPRIATE AT THIS TIME?

                                  ----------

                      House of Representatives,
                           Committee on Armed Services,
                                     Subcommittee on Readiness,
                              Washington, DC, Thursday, March 14, 2013.
        The subcommittee met, pursuant to call, at 3:30 p.m., in
    room 2118, Rayburn House Office Building, Hon. Robert J.
    Wittman (chairman of the subcommittee) presiding.

     OPENING STATEMENT OF HON. ROBERT J. WITTMAN, A REPRESENTATIVE
           FROM VIRGINIA, CHAIRMAN, SUBCOMMITTEE ON READINESS

        Mr. Wittman. I want to call to order the House Armed
    Services Subcommittee on Readiness and today's hearing
    concerning the need for a BRAC [Base Realignment and Closure].
    And I want to welcome this afternoon's panel members to our
    hearing. And I would like to thank you for being here to
    address whether BRAC is appropriate at this time. And after
    reading your opening statements, I understand that one of the
    principal reasons why the Department requested a BRAC round
    last year was because of the imbalance between infrastructure
    and future force structure. This imbalance was caused by
    reduced force structure levels imposed by the Budget Control
    Act. Unfortunately, this is a very good example of a poor plan.
    Whenever budgets drive strategy, poor decisions result, which
    in this case includes a reduced force structure.
        I categorically reject this notion that presumes to balance
    the Federal budget on the backs of our service members. Having
    budget decisions driven by strategy is both immoral, and only
    increases the likelihood of service men and women not returning
    from future combat. I believe that the Department of Defense
    needs a robust military capacity, and that any diminution of
    this capacity should be staunchly opposed. Furthermore, this
    assertion that a reduction of 100,000 service members is a
    principal reason to have a BRAC round is shortsighted. I
    compared the BRAC 2005 force structure numbers to the 2017
    future force structure proposed by the Department. While it is
    true that we will have reduced the Active force structure by
    130,000 service members, this is almost completely offset by
    the increase in civilian personnel of 120,000 over the same
    time period. Where is the excess infrastructure? I have yet to
    see any empirical evidence that would provide even the
    slightest degree of support for another round of BRAC.
        As to the BRAC process itself, BRAC 2005 was an absolute
    failure. Cost estimates to implement BRAC 2005 recommendations
    have increased from $21 billion to $35 billion, a 66-percent
    increase. Compared to the commission's reported estimates, GAO
    [Government Accountability Office] determined that the BRAC
    2005 payback would not occur for over 13 years. Even more
    efficient BRAC initiatives of the 1990s did not pay back until
    a few years after BRAC implementation was finalized.
        At a time when there is significant variability in the
    budget and the ensuing force structure, would a BRAC round be
    effective in providing rapid savings? Unfortunately, history
    has emphatically told us, ``no.'' I believe that the Department
    should pursue a multipronged strategy that fully utilizes the
    available capacity on hand. Leveraging the private sector to
    support military and use excess infrastructure provides a
    valuable revenue stream in a time of diminishing resources.
    Furthermore, the Army and the Marine Corps heavily relied on
    temporary facilities to support the Grow the Force initiatives.
    I think that we need to reduce this temporary infrastructure
    first before we move forward with eliminating entire bases and
    other permanent infrastructure.
        While I look forward to the discussion today with our
    esteemed group of witnesses to see if there is a compelling
    argument to change my position, I continue to have significant
    reservations with authorizing another BRAC round because of
    critical flaws in terms of both the process and the underlying
    assumptions. I believe that aggressively moving forward with a
    BRAC round could significantly harm our military power and
    their ability to project power.
        With that, I will move now to our ranking member, Ms.
    Bordallo.
        [The prepared statement of Mr. Wittman can be found in the
    Appendix on page 33.]

    STATEMENT OF HON. MADELEINE Z. BORDALLO, A DELEGATE FROM GUAM,
               RANKING MEMBER, SUBCOMMITTEE ON READINESS

        Ms. Bordallo. I thank you, Mr. Chairman, and I want to
    thank all of the witnesses here today to discuss this important
    matter with the Readiness Subcommittee. Today our subcommittee
    is going to receive testimony on an issue that evokes a lot of
    emotion for our members as well as defense communities. Many of
    us remember BRAC 2005, and some even previous BRAC rounds. As
    the former Lieutenant Governor of Guam, I remember working hard
    to protect the bases on Guam. Based on that experience, I found
    it very ironic that despite BRAC rounds on Guam, the Department
    of Navy continues to seek private or Government of Guam land to
    meet training requirements on the island. I think this serves
    to highlight how shortsighted the BRAC process can be given the
    dynamic nature of our military requirements, particularly given
    the new strategic guidance.
        Our subcommittee held a hearing on this same topic last
    year, and many members expressed concerns about the costs of
    the 2005 BRAC round and how that round has not yet achieved the
    estimated savings. Members cited a GAO report that highlighted
    a greater than 66-percent increase in the cost of the 2005 BRAC
    round, and a 58-percent decrease in savings across a 20-year
    period. Further, a GAO report released last week indicates that
    while the COBRA [Cost of Base Realignment Actions] Model is
    accurate for assessing the impact of BRAC, the Department needs
    to better develop a process for ensuring the data provided to
    the COBRA Model. And we are not understated and accurately
    capture requirements such as military construction or
    information technology. This report goes on to indicate that
    other processes focusing on reduction of excess infrastructure
    are not even developed yet. Given that BRAC 2005 ended up
    costing more and saving less than expected, and based on our
    current budget environment, I remain skeptical about the value
    of a new BRAC round at this juncture.
        So I hope that our witnesses can comment on what, if any,
    procedures have been put in place to ensure better oversight of
    the data that would be provided to the COBRA Model. Also, what
    assurance do members have that the focus of this BRAC would be
    on excess capacity and not on realigning missions, as was the
    case in 2005, which did not lead to significant savings in the
    near term?
        I am also perplexed as to the need for a BRAC round when we
    do not know the total extents of force structure or end
    strength changes from all the Services. For example, Army has
    just initiated a programmatic environment assessment to
    determine the basing for a two- to three-battalion BCT [Brigade
    Combat Team] construct. So I hope that the witnesses can
    comment on whether it is wise to reduce our infrastructure and
    footprint when we do not know what the ultimate end state is
    for our force structure or our end strength.
        I am also concerned that the economic impact to local
    jurisdictions is not quantified or adequately considered for
    areas surrounding the bases that are closed or realigned. In a
    time where our economy is struggling to recover, I question the
    wisdom of a BRAC round that may negatively impact communities
    that are struggling to put people back to work. This is an
    important consideration for this committee and Congress to
    consider if we are to authorize a BRAC round.
        Furthermore, I would encourage our witnesses to discuss the
    U.S. overseas basing structure, where we might find excess
    capacity abroad, and how a divesting of excess infrastructure
    abroad would impact the Department's request for a BRAC at
    home.
        That said, I believe it is important for our Nation to
    maintain an intelligent, well-balanced, forward presence of
    forces in overseas locations. It is important for us to find
    the right balance between permanent presence in some locations,
    as well as reliance on host nation support and rotational
    forces. But the risks associated with finding balances must be
    weighed carefully. I am concerned that these risks have not
    been clearly weighed, and I am also concerned about proposed
    reductions in Europe and the message that sends to our allies
    in NATO, especially Germany.
        So I look forward, ladies and gentlemen, to the testimony
    that you are going to give, and to our question and answer
    period. Mr. Chairman, I yield back.
        Mr. Wittman. Thank you, Ranking Member Bordallo. I want to
    introduce our witnesses. Joining us today are Mr. John Conger,
    Acting Deputy Under Secretary of Defense for Installations and
    Environment; the Honorable Katherine Hammack, Assistant
    Secretary of the Army for Installations, Energy, and
    Environment; Mr. Roger Natsuhara, Principal Deputy Assistant
    Secretary of the Navy for Energy, Installations, and
    Environment; and Mrs. Kathleen Ferguson, Acting Assistant
    Secretary of the Air Force for Installations, Environment, and
    Logistics.
        Ladies and gentlemen, thank you very much for being with us
    today. I appreciate your thoughtful statements and your
    insights into this complex topic, and I am looking forward to
    those. While I understand that we are in challenging budget
    times, it is a matter of record that this Administration has
    been unable to deliver a timely budget request for the fourth
    consecutive year. Considering this late submission, I
    understand that our witnesses will not be able to comment on
    the record as to whether the Administration will support a
    request for another round of BRAC in the fiscal year 2014
    budget request. However, the Administration did request two
    additional rounds of BRAC in last year's budget request, and
    former Secretary of Defense Panetta indicated his support for
    additional infrastructure consolidations earlier this year. I
    expect our witnesses to be able to discuss their thoughts as to
    the applicability of BRAC with the current force structure and
    overseas force posture. With that being said, we will begin
    with Mr. Conger.

      STATEMENT OF JOHN CONGER, ACTING DEPUTY UNDER SECRETARY OF
               DEFENSE FOR INSTALLATIONS AND ENVIRONMENT

        Mr. Conger. Thank you very much. This is my first testimony
    ever, and I am really happy to be here on this topic in front
    of this subcommittee.
        Mr. Wittman. We are glad to have you here. Just take a deep
    breath.
        Mr. Conger. That is the press talk in order to start. All
    right. Chairman Wittman, Ranking Member Bordallo, distinguished
    members of the subcommittee, I appreciate the opportunity to
    appear before you to discuss Base Realignment and Closure.
    First, let me highlight up front, as the chairman mentioned,
    that the Administration has not yet delivered its fiscal year
    2014 budget request, and that means my colleagues and I are not
    in a position to comment on the possibility of a future----
        Mr. Wittman. Mr. Conger, if I could ask you to pause for
    just a second. If you will take the microphone and pull it a
    little bit closer to you so we can--there you go. That will
    work. Very good. Thank you. Perfect.
        Mr. Conger. All right. Am I on?
        Mr. Wittman. You are good.
        Mr. Conger. Okay. All right. So because we don't have a
    fiscal year 2014 request, we are not going to be in a position
    to comment on the possibility of a future request for BRAC
    authority. It is true we asked for BRAC authority last year,
    and our constraints have only magnified. But we will be
    treating the Administration position on future BRAC rounds to
    be predecisional. This may make some of our Q and A a little
    awkward, and I hope you will have patience with us. Still, I
    expect to have a robust discussion about BRAC process and
    problems facing the Department.
        In order to frame the discussion ahead, I want to offer
    three points. First, the Department is facing a serious problem
    created by the tension caused by declining resources,
    reductions in force structure, and limited flexibility to adapt
    to the first two. We have many must-pay bills in the
    Department, from operations in Afghanistan to defined salary
    and benefit costs associated with each service member and
    civilian employee. Our facilities, for example, we have utility
    bills that we have to pay. So when across-the-board cuts come
    down, they weigh more heavily on a smaller, more concentrated
    part of the budget. We need to find a way to strike the right
    balance so infrastructure does not drain too many resources
    from the warfighter. Without question, installations are
    critical components of our ability to fight and win wars.
    Whether that installation is a forward operating location or a
    training center in the U.S., our warfighters can't do their job
    without bases from which to fight, on which to train, or on
    which to live when they are not deployed. However, we need to
    be cognizant that maintaining more infrastructure than we need
    taxes other resources that the warfighter needs, from depot
    maintenance, to training, to bullets and bombs. So as we talk
    today, let's keep in mind that together we need to figure out
    how to strike that balance.
        Second, our problem is smaller today than it would have
    been due to the fact that we have conducted five rounds of BRAC
    in the last 25 years. We have about $12 billion in recurring
    savings that we can spend on people, on ships, on aircraft, on
    training, on depot maintenance, on bullets and bombs. Those
    savings are real. They have been validated by GAO. Previous
    Congresses and previous administrations have done us all a
    favor by conducting those rounds and leaving the savings for
    us.
        The third point I wanted to make is that my goal here is to
    work with this committee and this Congress as a whole to find
    solutions to the problems we have got and to ensure we
    appropriately support the installations that we all agree we
    need. I don't have a fiscal year 2014 request to discuss today.
    But let me ask for your moral support on something that doesn't
    require legislative authority; namely, our effort to
    consolidate infrastructure overseas. Base closure in the U.S.
    requires BRAC authority. Closing bases overseas, while it
    requires us to work closely with the State Department and our
    international partners, doesn't require any legislation. So on
    January 25, Secretary Panetta kicked off a BRAC-like process to
    review our infrastructure in Europe. If I could provide one
    short quote from his kickoff memo just to give you a little bit
    of context on why we focused on Europe specifically,
    ``Consolidation of our footprint in Europe will take into
    account the shift in strategic focus to the Pacific, the
    planned inactivation of two Brigade Combat Teams and associated
    support forces, reductions in Air Force units, and decreasing
    requirements for support to the ongoing conflict in
    Afghanistan.'' So when we discussed last year's BRAC request,
    many Members of Congress said they wanted to see just this kind
    of holistic effort focused overseas. I hope I can count on your
    strong support for that initiative.
        And so this concludes my opening statement. I appreciate
    your attention and your partnership, and I look forward to your
    questions.
        Mr. Wittman. Thank you, Mr. Conger.
        [The prepared statement of Mr. Conger can be found in the
    Appendix on page 35.]
        Mr. Wittman. Ms. Hammack.

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

        Secretary Hammack. Thank you, Chairman Wittman and Ranking
    Member Bordallo, other distinguished members of the committee.
    Thank you for allowing us the opportunity to discuss the need
    for infrastructure realignments and perhaps to clarify a little
    about the 2005 BRAC round from an Army perspective. First of
    all, the Budget Control Act of 2011 significantly reduced
    future Army budgets. These reductions, placed alongside lower
    demand for Army forces in Afghanistan and a new national
    defense strategy, have placed the Army on a path to reduce its
    Active Duty end strength from 570,000 in fiscal year 2010 to
    490,000 by fiscal year 2017. And this is a reduction of 80,000
    soldiers, or approximately 14 percent from the Active
    Component. These end-strength and force-structure reductions
    will affect every installation in the Army. And these
    reductions are already programmed into the Army budgets.
    Additional reductions to the Army budget of a magnitude
    associated with sequestration may drive our Active Component
    end strength down below 490,000. And just as a piece of
    information, the only time the Army has been lower than 480,000
    was prior to World War II in 1940. And frankly, I don't believe
    the world has gotten any smaller or any safer since that point
    in time.
        As a first step in the process of major force-structure
    reductions, the Army published a Programmatic Environmental
    Assessment, or a PEA, as part of the National Environmental
    Policy Act on January 19, 2013. That PEA [Programmatic
    Environmental Assessment] identified 21 installations that have
    the potential to be impacted by our force-structure reductions.
    A PEA analyzes both environmental and socioeconomic factors
    that could impact those 21 installations. Due to the responses
    that we got both from Members of Congress and from those
    communities, instead of that PEA closing on February 19, we
    have extended the comment period by another 30 days, and
    currently it is scheduled to close on March 21, 2013.
        To your point, Chairman Wittman, the Army has not yet
    conducted any capacity analysis to determine the level of
    excess infrastructure that would be created as a result of our
    force-structure reductions. That would begin with a
    comprehensive installation inventory once we determine where we
    are going to take these force structure changes. The Army will
    conduct a rigorous analysis to identify the excess
    infrastructure and prudently align supporting civilian
    personnel with reduced force structure and our reduced
    industrial base design. We will inactivate at least eight
    Brigade Combat Teams, and possibly more. While the U.S.-based
    BCT decisions and locations have not yet been made, two of
    these BCT inactivation decisions have already been announced in
    Europe, and are in the process of being implemented. Putting
    force-structure reductions into a facility context, I want you
    to consider that a Brigade Combat Team takes up about 1.4
    million square feet of space. And in today's dollars, it costs
    about $350 million to build. Inactivating six or more Brigade
    Combat Teams in the United States, depending upon several
    variables, but inevitably that will generate excess
    infrastructure measured in hundreds of thousands of square
    feet. At our overseas installations, as Mr. Conger mentioned,
    the Army has already made strides in consolidating our
    facilities. Since 2001, we have reduced our end strength and
    force structure in Europe by over 45 percent. Correspondingly,
    that resulted in a 51-percent reduction in infrastructure, 58-
    percent reduction in civilian staffing, and 57-percent
    reduction in base operations. These are our projections that
    will be in effect by the end of fiscal year 2017.
        The story in Korea is similar. Significant declines in
    soldiers supported a consolidation of garrisons and sites, and
    resulted in thousands of acres of property returned to host
    nation. And although elimination of infrastructure was one
    objective of the BRAC 2005 round, the Army focus was aligning
    our infrastructure with our military strategy to enhance
    warfighting capacity and efficiency. So in 2011, when--or
    before the 9/11 attacks, the Army end strength was 480,000,
    with 62,000 soldiers in Europe, or 13 percent in Europe. And by
    the end of fiscal year 2017, forces in Europe will be 30,000,
    which is less than 6 percent of the Army's end strength. The
    Army used the BRAC 2005 round as a vehicle to meet our wartime
    needs, to move soldiers home from overseas, and to maximize
    military value and capability. But given those stated goals,
    the BRAC 2005 round was a success to the Army. It produced
    reoccurring savings for the Army of more than a billion dollars
    annually.
        The 2005 round was also very successful for our Guard and
    our Reserve units, which used the BRAC 2005 process to
    consolidate into areas of growing populations, where recruiting
    and demographic needs are greater. They are now realizing
    benefits of consolidation, recapitalization, more jointness,
    and enhanced operational readiness.
        I want to bring to light two additional areas of concern
    that we have right now, and I am sure are on your minds too,
    one of which is the continuing resolution, where currently the
    Army's operations and maintenance account is underfunded by $6
    billion. This account directly supports our worldwide
    operations, base operating support, and facility sustainment at
    all of our posts and stations. Compounding this $6 billion
    problem is the cost of the war in Afghanistan, which actually
    increases at the end of a war as you spend money to bring home
    equipment and reset or fix that materiel. If you look at both
    Korea and Vietnam, you will see that the cost increased at the
    end of the war. The same is true of Afghanistan. Afghanistan is
    a land-locked country, and ground transportation out of that
    country is currently limited. That means we have to airlift the
    equipment there to bring it back home. And the cost of airlift
    is exceeding our budget expectations. This $6 billion
    incremental cost this year is necessary to enable us to wind
    down operations.
        Sequestration is on top of that. And I don't need to tell
    you how devastating that is. I have met with many of you
    individually and helped you to understand the impact that has
    to the Army.
        As the Army force structure declines in the U.S., we do
    have facility overheads and infrastructure and civilian support
    staff that remains constant. Our investments in equipment,
    training, and maintenance then become distorted. Over time,
    these distortions in investments and spending will contribute
    to a hollow Army. Unless we have relief from the defense budget
    cuts of 2011 and sequestration, we have no other choice but to
    reduce our infrastructure in line with force reductions.
        Thank you for your attention, and I look forward to your
    questions.
        Mr. Wittman. Thank you so much, Ms. Hammack.
        [The prepared statement of Secretary Hammack can be found
    in the Appendix on page 46.]
        Mr. Wittman. Mr. Natsuhara.

       STATEMENT OF ROGER NATSUHARA, PRINCIPAL DEPUTY ASSISTANT
    SECRETARY OF THE NAVY FOR ENERGY, INSTALLATIONS AND ENVIRONMENT

        Mr. Natsuhara. Thank you, Chairman Wittman, Ranking Member
    Bordallo, and distinguished members of the subcommittee. I
    welcome this opportunity to appear before you today to discuss
    the Department of Navy's position on efforts to optimize its
    infrastructure both at home and abroad. As mentioned by Mr.
    Conger, Secretary Panetta directed the Department of Defense to
    conduct a European capacity analysis to reduce long-term
    expenses through footprint consolidations. In the last 8 years,
    the Navy relocated its European headquarters from London to
    Naples and closed three additional bases: Naval Air Station
    Keflavik, Iceland; Naval Support Activities Gaeta and La
    Maddalena, Italy. The Department has four installations and one
    prepositioning site remaining in Europe. They are located in
    Rota, Spain; Naples and Sigonella, Italy; Souda Bay, Greece,
    and central Norway. We are undertaking preliminary capacity
    assessments of these locations that will inform a defensewide
    path forward.
        With respect to consolidating our domestic infrastructure,
    the Base Realignment and Closure, BRAC process, offers the best
    opportunity to assess and evaluate opportunities to properly
    realign our domestic infrastructure with our evolving force
    structure and laydown. Although the Department's force
    structure has remained relatively constant since fiscal year
    2005 when the last round of BRAC began, a new assessment will
    allow us to take into account changes to the shore platform
    interface as our weapons systems capabilities, testing, and how
    we employ them have evolved over time. Since the first round of
    BRAC in 1988, the Department has closed 186 domestic
    installations activities, including 52 major installations. By
    the end of fiscal year 2012, we had disposed of 91 percent of
    our excess property through a variety of conveyance mechanisms,
    with less than 17,000 acres remaining on 23 installations. We
    anticipate reducing this number by six installations this year,
    with the remainder to be disposed as we complete our
    environmental remediation efforts. The past support Congress
    has given to our prior BRAC efforts resulted in an annual
    recurring savings of approximately $4.4 billion a year, which
    the Department applies to higher priority programs to support
    the warfighter.
        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. This concludes my
    remarks, and I welcome your questions.
        Mr. Wittman. Thank you, Mr. Natsuhara.
        [The prepared statement of Mr. Natsuhara can be found in
    the Appendix on page 60.]
        Mr. Wittman. Ms. Ferguson.

     STATEMENT OF KATHLEEN FERGUSON, ACTING ASSISTANT SECRETARY OF
       THE AIR FORCE FOR INSTALLATIONS, ENVIRONMENT AND LOGISTICS

        Ms. Ferguson. Chairman Wittman, Ranking Member Bordallo,
    and distinguished members of the subcommittee. I appreciate the
    opportunity to appear before you today to discuss Base
    Realignment and Closure. As you are aware, the United States
    Air Force takes great care to protect the distinctive
    capabilities of air power. Those capabilities are enabled and
    reinforced by our global network of Air Force installations,
    and managing those installations involves understanding and
    balancing mission requirements, risk, market dynamics, budget,
    and the condition of our assets. Within the portfolio of
    installations, environment, and energy we continually evaluate
    how to reduce costs, while improving the way we manage our real
    estate, housing, and energy demand. We focus our investments on
    critical facilities, reduce our footprint by demolishing old
    energy-inefficient buildings, upgrade heating and cooling
    systems and other energy-intense building systems, and leverage
    third-party financing through public-public and public-private
    partnerships and through the lease of underutilized portions of
    the portfolio where those opportunities exist. We do all this
    while recognizing that we are carrying infrastructure that is
    excess to our needs. While we have no recent excess
    infrastructure capacity analysis from which to draw, our
    capacity analysis from 2004 suggested that 24 percent of Air
    Force basing infrastructure was excess to our mission needs.
    While BRAC 2005 did not make major reductions to the Air Force,
    since that time we have reduced our force structure by more
    than 500 aircraft, and reduced our Active Duty military end
    strength by nearly 8 percent. So intuitively we know that we
    still have excess infrastructure. We have limited authority
    under current public law to effectively consolidate military
    units or functions and divest real property no longer needed.
    Put plainly, we continue to spend money maintaining excess
    infrastructure that would be better spent recapitalizing and
    sustaining our weapons systems, training for readiness, and
    investing in the quality of life needs of our airmen.
    Divestiture of excess property is a must. We stand ready to
    partner with the members of this committee and your staffs.
        Thank you for your strong support of the men and women of
    the Department of the Air Force. That concludes my statement,
    and I welcome your questions.
        Mr. Wittman. Thank you, Ms. Ferguson.
        [The prepared statement of Ms. Ferguson can be found in the
    Appendix on page 65.]
        Mr. Wittman. We appreciate our witnesses today and your
    opening testimony. We look forward to questions. And with that,
    I am going to begin with Mr. Conger. Just ask basically has the
    Secretary of Defense undertaken an assessment of the current
    infrastructure within DOD [Department of Defense]? And
    secondly, has there been any effort to identify if there is
    excess infrastructure?
        Mr. Conger. So two questions there. And let me take them in
    order. Has the Secretary undertaken a capacity analysis,
    basically is what I am hearing you ask. That is a part of the
    BRAC process. It was part of the BRAC process authorized for
    the 2005 round. And we have not undertaken that explicit
    process as part of--because it is part of the BRAC process. And
    I don't expect you to want us to jump-start that per se without
    direction from the committee.
        Are we looking at excess infrastructure? We are always
    looking at excess infrastructure. We are always looking at ways
    to consolidate within the rules. So, sure, we are doing that.
    And there is lots of smaller examples. It is just that you
    don't have the ability to do larger-scale examples without
    specific authority. And I am sure the subcommittee is well
    aware of the constraints that we have under the BRAC law.
        Mr. Wittman. So am I safe to assume from that then you are
    saying there is no empirical evidence that has been put
    together to support additional rounds of BRAC?
        Mr. Conger. The empirical evidence that we have comes from
    a couple of different sources. We have a study that was done in
    2004 that was mentioned earlier in the opening statements that
    identified 24-percent excess capacity inside the DOD. That
    study was followed by the BRAC 2005 round. In BRAC 2005, the
    data that we have implies that 3- to 4-percent PRV reduction,
    plant replacement value reduction. So under that simple math,
    and under that original study's data, we can conclude that
    there is space. Now, we also have additional information. We
    have information implying we have plans to reduce the number of
    Army soldiers, the number of marines, the number of Air Force
    aircraft since that study was done. So all of that, if you
    assume that--even if you assumed we had no excess at that point
    in time, we are opening up space following that point. So the
    deduction that we have is that it is at least worth following
    down this path. That was the conclusion that we reached last
    year.
        Mr. Wittman. You spoke about the 2005 BRAC and the element
    of savings there. And as we have seen, we are not even at the
    point of accruing any of those savings. We are talking about a
    13-year-old window with that particular realignment, which is
    essentially what that was. We have heard other witnesses talk
    about the exacerbating effects of the current CR [Continuing
    Resolution] structure and how it could come about without
    direct elements to be able to move money around and the
    sequester.
        My question is this. We know under any scenario of BRAC
    taking place historically that it takes years to accrue those
    savings. Can we afford to exacerbate an already challenging
    budget condition with further expenditures to pursue a BRAC in
    the near future?
        Mr. Conger. That is a great question. And let me be very
    careful about how I answer it, because obviously I am not here
    to defend any future request for BRAC. But I do want to address
    the first point. We are doing nothing but saving at this point
    from previous BRAC rounds. There was an investment made. It was
    larger than anticipated. But it is done now. We are doing
    nothing but saving from this point on. For the BRAC 2005 round,
    we are saving $4 billion a year. If you look out 20 years from
    today as opposed to from when we started the round, that
    implies tens of billions of dollars that we are saving from the
    2005 round from here on out. Now, people look at 2018 as the
    break-even point. And that is valid. But that is based on sunk
    costs. The cost is sunk. This committee already authorized
    those expenditures, and they have been made. So then to your
    point, which is can you afford to make expenditures, can you
    spend some money to save money essentially? Do you have the
    money available? And in the same way that, you know, an
    investor can only put money in the stock market, for example,
    if they have it, if they are not, you know, that is doing
    better than breaking even, that is how they are going to make
    money. Even if they have the best opportunity, if somebody has
    no money they can't spend it, can't invest it. So that is the
    question we have before us. Can we make the room to have that
    kind of recurring savings? Thank God that the folks before us
    authorized the rounds that they did, because otherwise we would
    have a $12 billion bigger hole than we have today.
        Mr. Wittman. Looking at the savings and the costs from the
    2005 BRAC, if you were to take the $35 billion cost of that
    particular BRAC and play it out over the period of time, that
    would have bought the United States three additional aircraft
    carriers. So you can see prospectively the question then
    becomes strategically what is our focus? Is it the budget
    driving strategy or strategy driving the budget? And I think
    that is a fundamental element that has to be answered with
    this. I know the GAO came out recently with a study looking at
    what should be the selection criteria for actually pursuing a
    BRAC. Going back to the 2005 BRAC, that BRAC stated at that
    time that there was a 24 percent overage in capacity. That BRAC
    effort, though, only reduced that capacity by 5 percent. DOD's
    response is, hey, listen, you can't really tell us to use
    selection criteria because that makes our decisionmaking
    suboptimal. Which brings me back to the question of what is
    really the purpose behind the previous words within DOD to want
    to pursue a BRAC and DOD's resistance to saying, well, you
    can't really use selection criteria because that necessarily
    fences us in and we don't think we can make good decisions
    within that realm.
        Mr. Conger. We do have selection criteria. There are eight
    of them. They were published in the law. And they are focused
    on military value. Those are the top ones. We don't want to
    make a decision that is solely based on money. We want to make
    it based on how does this optimize the military footprint. So
    that is part one. What the GAO suggested, which I would take
    issue with, is to make the cuts paramount. You have to cut this
    amount of stuff. And so what I don't want is for us to be put
    in a position at any future time under any future construct
    where somebody says you have to close, you know, 20 bases or
    eliminate 20,000 jobs. That is an artificial and arbitrary
    construct that compels us to do things that are suboptimal for
    the sake of reaching that goal. And unfortunately, even when a
    goal is not mandated people work very hard to get to it, and
    sometimes they make suboptimal decisions. So that is why we
    resist that kind of a construct.
        Mr. Wittman. Well, what the GAO recommended was selecting
    targets for reducing capacity there as part of the selection
    criteria. So essentially saying where do you want to go? You
    know, putting those objectives out there, whether it is cost
    reductions or whether it is realignment, whatever it may be,
    but that needs to be part of the criterion.
        But with that, I want to go to our ranking member, Ms.
    Bordallo, to have her pursue her questions.
        Ms. Bordallo. Thank you very much, Mr. Chairman. I guess my
    first question would be to you, Mr. Secretary, Secretary
    Conger. Could you address how the Department would ensure the
    next round of BRAC, if proposed and approved by Congress, would
    be better evaluated for its financial viability and implemented
    to ensure that there are not cost overruns?
        Mr. Conger. Well, there is a couple ways I can answer that
    question. Let me run through a couple of thoughts. One, once
    again I don't want to say that we are requiring the BRAC round
    to achieve a certain amount of savings. We are just not.
    Intuitively, you have a BRAC round in order to save, you have a
    BRAC round when you have excess. But the individual decisions
    have to be sub-optimized for military value. That is the
    construct that we have set up. And it has worked, right? We
    have saved a considerable amount of money over the years. How
    do we ensure that the costs don't go up? That is an interesting
    question, because when we conducted the last round, and GAO
    pointed this out, the costs went up in a very small number of
    recommendations. There were decisions that were made at
    specific places. And those recommendations had their costs go
    up. And they fall into a couple different categories. But one
    of the significant ones was when Congress said that hospitals
    have to meet world-class status, for example. You know, they
    have to reach certain requirements. And that added the costs.
    It added to the costs of the hospital at Belvoir, at Bethesda.
    That drove up a bill. And, you know, what are we going to do?
    Tell Congress, no, we are not going to do that? Of course we
    are going to do what Congress tells us to do.
        The second is on the MILCON [Military Construction]
    increases. There were several recommendations where we decided
    to construct rather than renovate. Those decisions were made
    after the costing, the original costing was done. And those
    requests came to Congress, and said here is exactly what we are
    proposing to do. Congress said okay. So there is an oversight
    mechanism that we each have to participate in in order to
    regulate that. I think that significant pushback from Congress
    on changing the scope would have had a significant impact on
    what we chose to do.
        Ms. Bordallo. Thank you. Thank you. I have another
    question. I guess this would be for any one of our witnesses.
    As I stated in my opening comments, I am curious how a BRAC
    review would be adequately evaluated while the force structure
    is still very fluid. Would it be wise to reduce our
    infrastructure and footprint when we do not know the ultimate
    end state for our force structure or our end strength?
        Mr. Conger. Let me take that one real briefly. Part of the
    process requires the joint staff to put together a 20-year
    force structure plan. So we are not making this up on the fly.
    The Joint Staff has to put together a projection of what we are
    mapping to. We are infrastructure folks. Right? I mean it is
    not our job to say we need one brigade or one more or one less.
    We are working with the numbers that the warfighters give us in
    order to figure out what the optimal structure is. So we would
    rely on the Joint Staff to make those calls for us.
        Ms. Bordallo. Yes, Ms. Hammack.
        Secretary Hammack. Thank you. One of the examples is what
    we are doing in Europe currently. We are scheduling and staging
    and planning our infrastructure reduction side by side with the
    inactivation of the Brigade Combat Teams. And so we are able to
    do it in a very systematic, programmatic manner to keep our
    costs in line as those brigades are inactivated. So we have the
    ability, we have the manpower to do it very systematically and
    programmatically. And that is the authority we are looking for
    here, to do the same in the United States as we reduce the
    number of Brigade Combat Teams in the Army.
        Ms. Bordallo. Good. Thank you. Secretary Ferguson, the
    question is it seems that the Air Force has been the most vocal
    in a request for another round of BRAC. Can you tell me what
    aspect of the Air Force mission differs from other Services
    that would demand base closures? And how has your Department
    reviewed the long-term effects to ensure hidden costs do not
    put additional taxpayer money in jeopardy?
        Ms. Ferguson. Thank you for the question. I think I would
    go back to some of what I said in the opening statement. As we
    executed through, as we entered into BRAC 2005, the Air Force
    determined we had 24-percent excess capacity across our
    installations in the United States. BRAC 2005 really----
        Ms. Bordallo. Is that just the U.S.?
        Ms. Ferguson. That is just the U.S. In BRAC 2005 we really
    only closed eight minor locations that accounted for just .8
    percent of our plant replacement value, so a very small amount.
    And since that time we have taken down force structure by over
    500 airplanes. So we do believe we have excess capacity still
    out there that we would like to address to begin to save some
    costs.
        Ms. Bordallo. Thank you. One other final question, Mr.
    Chairman. As Lieutenant Governor of Guam at the time, I was in
    charge of BRAC 1995 and closing down the Naval Air Station. And
    I remember that after they closed down we were on a list for
    cleanup. Maybe Mr. Natsuhara can answer this. I remember we
    were very far down on the list of cleanup because it was an air
    base before, commercial--or rather a military. And we were very
    far down on the list of priorities. So I am wondering, I am
    curious with all the closures across the United States and
    wherever, what is the status of our cleanup now? Are we up to
    date, or do you still have a lot of areas that need cleaning
    up? And it is very costly.
        Mr. Natsuhara. For the Navy, like I mentioned in my
    statement, 91 percent of our property authority has been
    disposed of, turned over to other uses. We still have 26
    installations that we are working on as far as cleaning up. The
    funding, we are on schedule with our funding. We are working
    with all the local reuse authorities on their timelines. So we
    believe we are properly funding the cleanups to match our
    remaining bases.
        Ms. Bordallo. So you still have 26, and so they are not
    being utilized, is that correct?
        Mr. Natsuhara. Correct. They are not full installations,
    most of them. Most of them are just partial installations that
    are left.
        Ms. Bordallo. Do we have the funding for this?
        Mr. Natsuhara. We do have funding in our budgets. We are
    matching the development plans of the local use authorities. We
    work very closely with them.
        Ms. Bordallo. Mr. Secretary Conger, did you want to----
        Mr. Conger. Yeah. I appreciate it. I did want to talk a
    little bit about cleanup, because this is important. And people
    often think of cleanup as a bill that we are hiding. All right?
    And we are not. And what is interesting is if you look at the
    earlier BRAC rounds, there was a bigger cleanup burden. Pardon
    me for just a second. There was a bigger cleanup burden because
    as a whole the Department had a bigger cleanup burden. We have
    had a very active cleanup program at all of our active sites
    for the last 20 or 25 years. We have in fact--allow me to quote
    some statistics. From the 1988 round, we have 92 percent of the
    sites either with a remedy in place or a response complete.
    1991 BRAC round it is 96 percent. 1993 round it is 93 percent.
    1995 round we are at 74 percent, and 2005 we are at 58 percent.
    But one of the interesting things is in the 2005 round, after
    many years of cleaning up our Active Duty bases, we had an
    order of magnitude almost of fewer sites that needed cleanup.
    So digest that for a second. We have been cleaning up all of
    our active bases in parallel with this very aggressively for
    the last 20 years. That means that if you close a base today,
    or say in the 2005 round, it is far less likely to have cleanup
    problems because we have been cleaning up those active bases.
    These are things--we should have been cleaning up those bases
    that closed anyway, and we would have been spending that money
    anyway because it is important for the people who are working
    and living on that base.
        Ms. Bordallo. So what is your list today that remain to be
    cleaned up?
        Mr. Conger. Yeah. If you look at the Department's plans, we
    have a fairly aggressive projection that by 2018 we will have
    90 percent of the sites in the Department on all of our active
    bases, all the BRAC bases, cleaned up, response complete. By
    2021, we project 95 percent. This is not the same situation we
    were in in 1988 or 1995, for example. It is just a different
    world that we are in right now.
        Ms. Bordallo. All right. Thank you, Mr. Chairman. I yield
    back.
        Mr. Wittman. Thank you, Ranking Member Bordallo.
        We will now go to Mr. Scott.
        Mr. Scott. Thank you, Mr. Chairman. And I guess each of you
    in your testimony you seem to believe very adamantly that there
    is excess capacity. Is that an accurate statement? Could you
    give us a list of where that excess capacity is?
        Mr. Conger. No. That is why we have a BRAC analysis.
        Mr. Scott. Sir, how can you be so convinced that there is
    excess capacity if you don't know where it is?
        Mr. Conger. Because we did a study in 2004 that identified
    parametrically, because you don't want to prejudge the BRAC
    process, because then people say you have a list of winners and
    losers. We don't have that. So we did it parametrically. We did
    it in 2004. We got a result of about 24-percent excess
    capacity. And we can map out what we actually closed in the
    2005 round. And it is a lot less than that. And so that is why
    we think we have excess capacity. Plus the fact that we know
    how many people fewer that we are going to have. Moreover, in
    addition to the fact that we have force-structure reductions,
    Congress asked us to reduce the number of civilians that we
    have got. And so that is going to create excess capacity too.
        Mr. Scott. Can I ask you, I am sorry, I am limited, how
    many of those came actually from the Pentagon?
        Mr. Conger. The reduction in personnel?
        Mr. Scott. Yes.
        Mr. Conger. I don't have that information, but we can get
    it for the record.
        Mr. Scott. I would like to have that. I would like to know
    what the reduction in personnel has been at the Pentagon. And
    since you think it is necessary to do a 20-percent reduction in
    our uniformed soldiers in the Army, I would like to know if
    there is going to be a corresponding decrease in the
    bureaucracy at the Pentagon.
        [The information referred to can be found in the Appendix
    on page 75.]
        Mr. Conger. Well, two things. One, I didn't advocate, I am
    articulating, because we are the installations guys. We don't
    decide how many fewer military we have. All right. The numbers
    that we are given imply an excess in infrastructure, and that
    is why we are thinking what we are thinking. But I get your
    point.
        Mr. Scott. Let me interrupt you right there, because I am
    sorry, I am just limited to 5 minutes. And you talked about
    energy costs.
        Mr. Conger. Yeah. Utility bills.
        Mr. Scott. Absolutely. What do we pay for a gallon of jet
    fuel in the Air Force and the Navy?
        Mr. Conger. I am going to defer to my Service colleagues to
    answer that question. I don't know the answer.
        Ms. Ferguson. I will have to take that and bring that back.
    I don't have the current cost.
        [The information referred to can be found in the Appendix
    on page 75.]
        Mr. Scott. I would appreciate that. I would appreciate if
    we could just get the average cost per gallon for jet fuel from
    the Air Force and the Navy. It is my understanding that we paid
    up to 100 times as much as the private sector pays for fuel.
    And so when you talk about the fiscal constraints that we have
    that you report as one of the reasons that we need the BRAC, I
    guess my question would be couldn't the Pentagon go back and
    look at some of the things that they have mandated on the
    bases, especially with regard to energy, where we are forcing
    our bases to spend more per kilowatt of energy, more per gallon
    of fuel, more per anything and everything that they do on our
    bases, quite honestly as a result of what seems to be a
    political agenda. Why can't we relieve our bases from some of
    those mandates while we are in these times of such fiscal
    distress?
        Mr. Conger. It is a fair question to ask why can't we look
    for other ways--what restrictions, goals, can you ease up on to
    help save money. That is a good question. Now, two things. One,
    the jet fuel is not in our--not in my bailiwick. I will have to
    defer that one. But when we think about energy projects on the
    bases, I tell you what, I am not--I am not urging anybody to
    spend extra money for a dream purpose, but for a green purpose.
    In other words, they need to have a business case if they are
    going to spend this money. They need to have a business case
    if--they need to show that they are going to reduce their
    utility bills. They are not doing this to----
        Mr. Scott. Mr. Conger, I apologize. I am down to 1 minute.
    But you would acknowledge that there is an anti-fossil fuel, or
    a mandate to reduce the consumption of fossil fuels in the DOD.
        Mr. Conger. No, sir.
        Mr. Scott. Yes, sir, I think there is.
        Mr. Conger. There is no mandate that I am familiar with.
    But I would be happy to----
        [The information referred to can be found in the Appendix
    on page 75.]
        Mr. Scott. We will take that for the record. I am down to
    45 seconds. But I would tell you this. We have a very serious
    situation with regard to the finances today in this country.
    And the bottom line is if we go through a BRAC today, it is
    going to increase spending for the next couple of years. And so
    while I don't necessarily agree with you that we have excess
    capacity, what I will tell you is that I am absolutely
    convinced that now is not the time when we can afford a BRAC.
    So would you at least agree that if we had a BRAC today it
    would increase spending short term?
        Mr. Conger. I would agree that any BRAC is going to have
    spending up front and savings later.
        Mr. Scott. Thank you.
        Mr. Wittman. Thank you, Mr. Scott.
        We will now go to Mr. Courtney.
        Mr. Courtney. Thank you, Mr. Chairman. I feel like we are
    kind of shadow boxing here because we are trying to get our
    arms around obviously critical issues like Mr. Scott just asked
    about. And because we don't have a budget and we don't have an
    actual request officially for a BRAC, we I guess have to sort
    of speculate here a little bit. And so one way of trying to
    frame a question today is to go back a year ago, when Dr. Robyn
    was sitting across from us and was answering questions. She was
    peppered with a lot of questions about the 13-year breakpoint
    on the 2005 BRAC, which again a lot of us who have been on this
    committee for the last 7 or 8 years have lived with it. And it
    is I think a question this Administration has to be ready to
    answer if it is going to come back later with a BRAC request.
    But her answer at that time was, well, you know, if you look at
    the prior BRACs, they actually achieved savings at a quicker
    pace, and therefore it was justified. So our office actually
    went back and looked at the 1985 through early 2000 BRACs, and
    even in those cases it was quicker, but it was still 6 years on
    average before, you know, you went from spending money to
    showing any kind of net savings. And, you know, we are in a
    situation right now where the Budget Control Act was passed in
    August of 2011. If your request for BRAC does materialize and
    it moves at mach speed through the Congress, which is, you
    know, we can't agree on the day of the week around here, but in
    2015 the BRAC is actually carried out, again, using Dr. Robyn's
    prediction of a better payout, we are still hitting 2021, which
    really doesn't help us. I mean we are going to be living with
    budget caps through this entire period of time under the Budget
    Control Act. So Mr. Scott's question still, you know, has to be
    answered, which is that this costs money. And if you are going
    to justify it within the context of the budget structure that
    we are living in here, you can't make it work for the numbers.
    I mean to me it seems like a better question ought to be asked
    about what we are realigning in Afghanistan and Europe, which
    you talked about earlier here today. Secretary Carter appeared
    before this committee a few weeks ago and confirmed that we are
    still spending $2 billion a week in Afghanistan. I mean we are
    clearly rolling up a lot of facilities over there. It is going
    to be a challenge, as Ms. Hammack said, in terms of getting
    equipment and installations out of there. I mean why don't we
    focus on that right now, which is frankly where I think the
    American people would feel a lot better about if we are going
    to start consolidating Pentagon infrastructure, it is in
    Afghanistan. And I mean if you are starting a new initiative in
    Europe, great. But, you know, can you share something with us
    on that? I mean what is the savings that this European
    initiative is going to be taking place? And in the meantime, I
    just feel like based on even the best case scenarios that Dr.
    Robyn presented, you know, this just doesn't work within the
    Budget Control Act structure that we are all going to have to
    live with through 2021.
        Mr. Conger. All right. So a couple different points. First,
    it is a fair thing to say that you have to spend money to make
    money in these kind of situations. You are investing--in the
    2005 round, I will use that as an example, or previous ones,
    you are investing in infrastructure to move folks around--I
    apologize--you are investing in infrastructure to move folks
    around, and so therefore if you have a budget problem, this
    committee, the Appropriations Committee, the House and the
    Senate, everybody has to figure out whether any investment
    makes sense. Of course that makes sense. And so you have to
    prioritize, the Department has to prioritize, the
    Administration has to prioritize where they are going to
    allocate resources. We are not here making a specific request.
    But any investment--let me take an energy-efficiency project
    for an example, just because it is innocuous here. If we are
    going to make an investment in a building that will save money
    in utility bills and it pays back in, oh, I don't know, 5 years
    or so, we have to decide whether to spend that money right now
    because we don't have any money right now. Okay. And so that is
    part of the dynamic we are dealing with. If it is deemed that
    the investment in any sort of realignment or whatever that is
    going to yield significant savings out in the outyears, that
    this is something you can't do right now, that is something for
    the principals, for--sorry. That is something for you all to
    work through. And if I missed any parts of your question I will
    get you on the second round.
        Mr. Wittman. Thank you, Mr. Courtney.
        Mr. Forbes.
        Mr. Forbes. Thank you, Mr. Chairman, Ranking Member, for
    holding this hearing. And thank all of you for being here. Mr.
    Conger, you are doing a good job. We are glad to have you here.
    We appreciate your testimony and----
        Mr. Conger. Appreciate it.
        Mr. Forbes [continuing]. To all of you, we appreciate your
    service. And Ms. Hammack, I am always glad to get your opinion
    on things. And I just want to go back to a comment I think you
    made, but I want to make sure that I heard it. You said based
    on the force structure that we are having now, that down to
    that 490,000 in the Army was based on the Budget Control Act
    and sequestration. And I want to take sequestration off the
    table just a minute, because General Odierno sat pretty close
    to where you sat, took up a little more space, but he sat
    there, and the testimony that I recalled him giving with all of
    this force structure before sequestration, they were still
    going to cut 80,000 people. I mean, that wasn't based on
    sequestration.
        And what we were told over and over again by the Department
    of Defense was that all of these cuts was based upon the fact
    that there was this new strategic analysis that had been done
    for the country and that these cuts were made in alignment with
    that, and as the chairman alluded to earlier, that they weren't
    done based on budget driving that, it was based on strategic
    needs. Am I misinterpreting either what you said or what
    General Odierno said?
        Secretary Hammack. I think we are saying the same thing,
    but in different ways, sir.
        Mr. Forbes. Okay. Help me with it, then.
        Secretary Hammack. The strategic realignment was done at a
    time where we were strategically reducing the size of our
    force, bringing forces back from overseas and facing cuts in
    budget. So everything----
        Mr. Forbes. But can I----
        Secretary Hammack [continuing]. Came together----
        Mr. Forbes. I don't want to interrupt you. I want you to be
    able to answer it, but that is--the cuts in budget, we
    specifically asked over and over and over again, are these cuts
    being driven by the budget or are they being driven by the new
    defense strategy? And we were told over and over again they are
    being driven by the new strategy.
        So is it your testimony today that this force structure was
    driven down based on budget cuts and budget numbers that were
    given, or was it based on the defense strategy?
        Secretary Hammack. I am saying it came from three things.
    It came from realigning forces coming out of Afghanistan, it
    came from the new national defense strategy, and it came from
    working to live within a declining budget from the Budget
    Control Act of 2011.
        Mr. Forbes. If it came from the declining budget and the
    Budget Control Act, were those numbers lower than what would be
    necessary to meet the defense strategy?
        Secretary Hammack. I am not sure I can answer that at this
    point in time.
        Mr. Forbes. And the reason I raise it is because for the
    last 4 years, if we take sequestration, which we are hearing so
    much about now and the amount which is going to be cut this
    year, the Administration has already cut 19 times that amount
    out of defense the last 4 years, and we have been pleading with
    folks from Mr. Conger's office to come over here and tell us,
    that is too much, that is--we can't do it, and we have heard
    crickets, you know, we have heard nothing. ``It is okay. It is
    okay. It is okay.''
        And now my question would come back to the facilities part
    of this, which is your bailiwick. If, in fact, we knew that
    these numbers were going down to the figures that they were
    going down to, do you have enough money to operate the
    facilities and the installations without a BRAC, because, as
    Mr. Courtney pointed out and the chairman pointed out, you all
    knew, I know you did last year, you saw this committee, you
    knew we weren't budging on BRAC, so the Army couldn't figure on
    that. Do you have enough money to operate those facilities if
    you take sequestration off the table?
        Secretary Hammack. No.
        Mr. Forbes. Then why didn't you guys tell us that when we
    were making these $800 billion in cuts?
        Secretary Hammack. Those comments were made in January and
    February.
        Mr. Forbes. Of what year?
        Secretary Hammack. Of this year.
        Mr. Forbes. The cuts were made in 2011 and before. Why
    didn't you make any of those comments when those cuts were
    actually being made? And why did you wait until January, when
    the Budget Control Act was passed in 2011?
        Secretary Hammack. Okay. And I think maybe we may be
    talking two different things. For the Budget Control Act,
    that----
        Mr. Forbes. That is all I am talking about. Not
    sequestration.
        Secretary Hammack. Okay.
        Mr. Forbes. Take sequestration off the table.
        Secretary Hammack. All right. Based upon the Budget Control
    Act that is returning the size of the Army back to the size we
    were pre-9/11, so pre-9/11 we were at 480 [480,000]. The Army
    plussed-up, the Army grew, the Army built additional
    infrastructure and moved forces back from overseas to the
    United States to handle the load that we had in responding to
    the war on terror.
        Now as that war ceases and we withdraw combat forces from
    Afghanistan and reduce the size of our force back to pre-9/11,
    it is expected the budget will reduce. It is also expected that
    our need for infrastructure will shrink.
        Mr. Forbes. Okay. Thank you, Mr. Chairman.
        Mr. Wittman. Thank you, Mr. Forbes.
        Mr. Loebsack.
        Mr. Loebsack. Thank you, Mr. Chairman. I want to thank the
    ranking member, too, both of you, for holding this hearing,
    very important hearing. It is good to see you folks here today.
    I appreciate your service to our country. I do have very
    significant concerns, of course, regarding reports, I think all
    of us do, that the budget request will include a request for
    two new rounds of BRAC. And I think, probably like maybe all of
    my colleagues, I do fundamentally question the wisdom behind
    the proposal at a time of significant budget uncertainty.
        I just want to reiterate, I think, a point that has been
    made by just about everyone. We know the significant upfront
    costs of BRAC and the savings that have not materialized in the
    prior BRAC rounds. We have been over that already a little bit.
    I don't think we should brush those numbers off, especially, as
    Mr. Courtney said, even if we are looking at a 6-year timeframe
    here for things to start paying off, if you will.
        I do think we should be looking at our basing structure
    overseas before looking at closing installations here at home.
    As a matter of a record, I want to put that on the record. That
    is what I believe.
        Ms. Hammack, I have a question for you. I was pleased to
    see in your written testimony that you refer to the Army's
    organic industrial base as, ``a national strategic asset,'' to
    the joint force. I agree with you, as you know, that we must
    work to ensure our arsenals, our ammunition plants and our
    depots remain effective and efficient. And we all, I think,
    have the same view that that ought to be the case in the event
    of another contingency down the road, an unforeseen
    contingency.
        Can you elaborate on your statement in your written
    testimony that, ``the Army must assess its current
    infrastructure in terms of capacity and capability to ensure
    that the organic industrial base is shaped properly''? And how
    would the Army define an optimally-sized industrial base? What
    criterion strategy would be used to determine that size and
    whether the organic industrial base footprint does need to be
    reduced, and, of course, the ways to reduce it?
        I know that is more than one question, but I think you get
    the gist of what I am asking. Thank you.
        Secretary Hammack. Thank you for the question. One of the
    great things that occurred as a result of the war in
    Afghanistan is we made significant investments in our
    industrial base. And as a mechanical engineer, I have enjoyed
    going to the facilities and looking at the equipment that has
    enabled us to respond to the needs of the warfight. And
    advanced technology and advanced equipment has increased our
    capability to produce the materiel needed for the warfight.
        As we size down, we are taking a look at those increased
    capabilities. And those increased capabilities that technology
    has given us is enabling us to work in a reduced footprint. So
    as we look at capacity, as we look at requirements, we are
    looking at what the footprint is that we need. And, again,
    coming from a manufacturing background, I had the unfortunate
    responsibility of consolidating four manufacturing facilities
    into one, because technology enabled us to have increased
    production in a smaller footprint.
        That is the advantage of technology, that is the advantage
    of the investments that we have made, is that we have increased
    our abilities, and it is time to look at our industrial base to
    ensure that we can reap those efficiencies for the long term.
        Mr. Loebsack. And, of course, we have to be thinking about
    it strategically, too, and I think this--you know, I can--I
    would reiterate some of the things that were already said here,
    especially by Mr. Forbes about certainly the concern is it
    budget, is it strategy, what is driving these decisions? And
    certainly when we are talking about organic industrial base, we
    have to keep in mind that we may very well have contingencies
    down the road and we have to make sure that we have an
    industrial base that is going to be there, that is going to be
    ready, that is going to be warm, that could be utilized in the
    event of another contingency or series of contingencies down
    the road. We all hope we are not going to have those, but in
    the event that we do, we have really got to be ready. That is
    why we are doing this, you know, on the Readiness Subcommittee
    in that sense. And I appreciate your efforts along those lines.
        I want to stay in touch going forward as co-chair of the
    Depot Caucus, obviously. And ammunitions and ammunition plants
    arsenals as well, it is very, very important.
        I would like now to move to Mr. Conger. As you know, many
    installations have multiple organizations based at them. These
    complement each other's missions as well, yet decisions
    regarding the location of organizations during past BRAC rounds
    have been made sometimes without consideration of the mission
    and cost efficiencies created by their collocation.
        Would the Department look at installations as a whole
    moving forward to ensure that a transfer of one organization
    doesn't make another more inefficient in that sense?
        Mr. Conger. I think it is an important point, and it is
    part of the calculation for military value, which is the
    paramount criteria we measure. Now, there is some subjectivity
    there, but what you are characterizing is a subjective kind of
    a thing, and those are, by all means, included. And this is not
    the only kind of subjective element of military value that is
    evaluated.
        Mr. Loebsack. I think it is important along these lines, I
    know that folks are able--who make these decisions are able to
    visit different locations, but I think it is really important
    to keep in mind that there are bases, there are locations,
    there are facilities around this country that have empty
    spaces, for example, that could be utilized. And I think we
    have to be very, very careful moving forward that we take into
    consideration those installations where there might be tens of
    thousands of feet that could be utilized on a collocation
    basis, to make sure that the mission is, in fact, able to be
    carried out in the future. So it is just a suggestion, more
    than anything else, for you to take back with you.
        Thanks very much to all four of you. I appreciate your
    service. And thank you, Mr. Chair. And I yield back.
        Mr. Wittman. Thank you, Mr. Loebsack.
        Ms. Noem.
        Mrs. Noem. Thank you, Mr. Chairman. Mr. Conger, a question
    for you. If dollars haven't been appropriated for a BRAC
    process and there hasn't been excess funds that have been
    dedicated towards that, what do you plan to use in order to
    fund the BRAC process? Have funds been diverted from another
    area of your budget? What are the plans that have gone into
    making sure that it is actually paid for and accounted for?
        Mr. Conger. Well, two answers to that question. First, we
    haven't asked for a BRAC round, and so we don't have dollars
    appropriated for a BRAC round.
        Mrs. Noem. Correct.
        Mr. Conger. If----
        Mrs. Noem. Would you agree----
        Mr. Conger. I would imagine that any time one would request
    such a thing, that we would have to have dollars associated
    with the analysis.
        Mrs. Noem. And do you agree that in the current
    environment, more than likely those funds would have to be
    diverted from another area of the Department of Defense's
    current funding levels, considering that we are in a bit of a
    fiscal situation?
        Mr. Conger. I would imagine that in any case we are talking
    about a zero-sum game when it comes to the budget, that there
    has to be a prioritization for anything.
        Mrs. Noem. And there could be the possibility of
    shortchanging our men and women that defend this country.
        Mr. Conger. I would hope that anybody who puts together the
    defense budget that comes over here wouldn't dream of
    shortchanging the men and women who serve the country in any
    prioritization that they make.
        Mrs. Noem. Thank you.
        Ms. Ferguson, I have a couple questions for you. In a
    future BRAC process, will the Air Force be focusing on
    eliminating any particular category of excess base
    infrastructure?
        Ms. Ferguson. At this time, we have not done any type of
    analysis. As Mr. Conger pointed out earlier, as we would get
    the legislation passed from the Congress along with the
    criteria of military value, we would look at all installations
    across the United States Air Force, but we have not done
    anything so far.
        Mrs. Noem. So the 24-percent excess is just in general
    across the Air Force, not specifically identified at this time?
        Ms. Ferguson. That is correct.
        Mrs. Noem. Do you believe that the most--or least
    disruptive way to approach this from a national security level
    would be, and national readiness, would to first focus on
    support systems such as military schools and--rather than going
    after seeking to close bases that house bombers or fighter
    wings?
        Ms. Ferguson. I think I will defer that to Mr. Conger to
    answer that one from a more strategic perspective.
        Mr. Conger. Okay. Thanks. I think that it would be--two
    things. One, we haven't asked for a BRAC round, but let us talk
    in the abstract for a second. In advance of any BRAC round, we
    do our best not to prejudge, to imply any sort of a result. So
    we don't have a list of what is likely to happen if there was a
    BRAC round; that we would wait until the actual authorization
    from Congress, because it would be inappropriate for us to
    start that kind of thing ahead of time.
        Mrs. Noem. Okay. Well, I do want to thank you for your
    service, and I do look forward to helping all branches of our
    military look for efficiencies that we can find and agreement
    that we can find, whether or not there is another BRAC round or
    if one would potentially be requested throughout in the future.
    So thank you.
        Mr. Wittman. Thank you, Mrs. Noem.
        We will now go to Mrs. Shea-Porter.
        Ms. Shea-Porter. Thank you very much. A year ago when the
    budget hearings were held for the Services, General Odierno
    stated, ``I don't think you will see a big Army installation
    being asked to close. We think we have the right footprint.''
    And that is a quote. And Admiral Greenert said regarding a Navy
    BRAC, ``nothing jumps out at this point to me about
    installations that should close.''
        This was just a year ago, and really nothing has changed
    substantially between then and now except for the
    implementation of sequestration. Would you still stand by these
    statements from the views from last year? If not, what has
    happened in the past 12 months to military requirements,
    leaving aside the budgetary considerations, to change your
    views?
        Secretary Hammack. In reference to the comment made by
    General Odierno, he doesn't envision a big Army installation
    that would close and he doesn't have in his mind--as Mr. Conger
    stated, none of us have in our mind right now, because the
    analysis has not been done.
        When we look at a military value analysis, we take a look
    at the training capabilities, and so when we talk about a big
    Army installation, quite often those are the ones that have
    very large training lands or very large training areas, and
    they have a high military value and would bear differently in
    an evaluation of capabilities than maybe a smaller base would
    be. So he accurately portrayed that in his mind right now, he
    cannot name one.
        As we said, we have not done the capacity analysis to
    determine where the excess infrastructure is, nor have we done
    the military value analysis that determines if our bases are in
    the right locations or where that we need to be located.
        Mr. Natsuhara. And to be consistent with Admiral Greenert,
    I believe on the second part of that, to paraphrase him, that
    he also said that he thought doing an analysis would be good to
    look at our infrastructure. So I think we are still remaining
    consistent on that.
        Ms. Shea-Porter. Okay. Thank you. I also would like to ask
    you specifically about the Portsmouth Naval Shipyard, which was
    on the list, as you all know, in 2005. And my concern is losing
    ever, and almost lost at that time, a public yard where the
    cost of repairing nuclear subs is less, and the availability,
    having a 24/7 yard like that, how do you calculate the cost of
    closing, or when you even look at a public yard, versus
    transferring the work elsewhere and how heavily do you weigh
    that into the considerations?
        Mr. Natsuhara. Since a BRAC round hasn't been requested,
    when we--if we do do another BRAC round, the selection criteria
    will have to be established in the military value. So as we
    have all stated, you know, there is nothing, then, that has
    been decided, there is no predecisional selections.
        Going forward on the next analysis, depending on the
    criteria, we will do a thorough analysis, and based on that
    analysis and the public--and your inputs, we will make a
    decision, but we don't have a predecision on any of the bases
    right now.
        Ms. Shea-Porter. Okay. Thank you. I would like to thank you
    all for being here. I realize this is a difficult moment for
    you, as well as for us, as we look at this, but I do want to
    express my concerns and what you have heard from my colleagues
    as well about the ability to actually carry out any of this,
    given the budgetary considerations and the ultimate costs,
    especially at this time.
        Thank you. And I yield back.
        Mr. Wittman. Thank you, Mrs. Shea-Porter.
        We will now go to Mrs. Hartzler.
        Mrs. Hartzler. Thank you, Mr. Chairman. Good to be here and
    to visit with you about this very important issue. And
    Secretary Hammack, I wanted to say hello again from Fort
    Leonard Wood and thank you for coming and visiting. And we
    appreciate that and your efforts to get out on the
    installations. And I wanted to try to get this clarified in my
    mind about the force structure and the installation footprint
    that we have. It seems like pre-9/11, you said we had 480,000
    and--okay. And then there was a BRAC in 2005. How many
    installations were closed with that?
        Secretary Hammack. Overall, I think there were 24
    installations. And of the Army--I think there were 13
    installations. If I can think of--some of them were depots or
    Army ammunition plants.
        Mrs. Hartzler. Okay. So 13 total. But now you are saying
    that with the drawdown back from Afghanistan, our force
    structure will be somewhere around 480,000 again? Okay. Then
    how come there is a thinking that we need to close more
    installations, because it seems like we have the same number of
    troops, the same force structure at actually less installations
    than they had pre-9/11?
        Secretary Hammack. Certainly. And thank you for that
    question. You know, I pulled numbers on the Army end strength
    going back to 1919. It was very interesting to look at the ebb
    and flow in the size of the Army.
        At its peak in 1945, the Army had 8,267,000 soldiers. At
    that point in time, the Army built a lot of infrastructure. And
    in the lexicon of the infrastructure environment, we call a lot
    of this World War II wood. Much of that remains today: some of
    it in excess, waiting for demolition dollars; some of it has
    transferred to the Guard and Reserve, but we have a lot of
    infrastructure.
        If you look at the next high point, the next high point was
    in 1968 with 1,570,000 soldiers. We have declined since that
    time to 1989, when there was an infrastructure analysis as part
    of BRAC process. We were at 769,000 soldiers. We reached a low
    in 1999 of 479,700, which is at about that 480,000 I mentioned,
    and that was the lowest point since before World War II.
        The Army has a lot of infrastructure. The Army has had a
    lot of infrastructure. And through the years, we have worked to
    refine it, we have worked to transfer it, we have worked to
    shrink it, and these BRAC rounds have assisted us to right-size
    the infrastructure along with the size of our force.
        As Mr. Conger stated, the analysis done by OSD [Office of
    the Secretary of Defense] identified that the military services
    overall had 24-percent excess infrastructure, and the BRAC 2005
    round shrunk that by about 5 or 6 percent. That means there is
    still excess infrastructure. And I know on many of the bases I
    go to, even on some of the industrial bases--I was just on one
    that had 800 buildings, and we were utilizing 300 of them.
        The Army does have excess infrastructure, we continue to
    have excess infrastructure. And in the United States, it takes
    authorization from Congress for us to significantly reduce it.
        Mrs. Hartzler. I just wanted to make sure that our troops
    coming back that will still be there in the force still have
    adequate facilities to train and to be housed in and things.
        And I know votes are occurring, but I wanted to ask real
    quick, your comment about the CR problem, $6 billion short in
    operation and maintenance. Question: We passed a CR last week
    attaching the DOD approps [appropriations] bill to it. Will
    that help with that problem?
        Secretary Hammack. And thank you very much. That helps. It
    does not completely fix our problem. We remain having a
    problem, especially on operations and maintenance, but our OCO
    [Overseas Contingency Operations] problem is a big problem on
    how do we retrograde that equipment from theater.
        Mrs. Hartzler. Yes. Thank you. Thank you.
        Mr. Wittman. Thank you, Mrs. Hartzler.
        We will now go to Mr. Barber.
        Mr. Barber. Thank you, Mr. Chairman and Ranking Member. And
    thank you for coming today to testify on this very important
    topic. My first question, and I may only get one in, because we
    are going to be going to vote shortly, is for you, Secretary
    Ferguson. It has to do with the F-35 [Lightning II Joint Strike
    Fighter] and the basing of the F-35s and the decisions that
    will be made in the next year or two. How do you think, if it
    isn't, in fact, likely, that the BRAC could impact on the
    timing of those basing decisions?
        I know that the Air Force is currently engaged in site
    surveys, they have had some in my community as well, but I am
    interested in knowing how BRAC may impact on that. And
    secondly, how will the Air Force weigh the information that you
    have gleaned from the site surveys as you consider possible
    BRAC procedures?
        Ms. Ferguson. Thank you for the question. F-35 is--as you
    likely know right now, we are in the middle of finalizing the
    environmental impact statements for the first operational
    locations. The first operational locations have been identified
    as Hill Air Force Base, as the preferred and reasonable
    alternative for the first Active Duty location, and Burlington,
    Vermont, as the first operational location for the Air National
    Guard. We are completing the environmental impact statement for
    those right now. Those will then be presented to our chief and
    secretary for final decision, and then a final decision will be
    made on that later this year.
        The next time we anticipate needing to make a decision for
    F-35 will be some time in fiscal year 2017, and so the timing
    of that decision will be--or let me--it will depend on the
    timing of BRAC also, but certainly any basing decision, whether
    it is F-35 or any other basing decision, would potentially get
    linked up with a BRAC, but as you look at the bed-down for the
    F-35, the bed-down for the F-35 is going to go on for many,
    many years to come, and we will work through the processes as
    it falls out.
        Mr. Barber. I think, Mr. Chairman, I better yield back. It
    is time for us to go to vote. I appreciate the opportunity.
    Thank you all for coming and for your service.
        Mr. Wittman. Thank you, Mr. Barber.
        I want to go down to Mr. Palazzo so we can finish up.
        Mr. Palazzo. Thank you, Mr. Chairman. And I also want to
    thank our witnesses for being here today and for your
    testimony. And I will keep my remarks fairly brief. I don't
    really have questions, but I do just want to bring up
    something. I noticed your bios, that pretty much all four of
    you are engineers by trade or your training and your education.
    Well, I am a CPA [Certified Public Accountant], I am a
    certified public accountant, and I come from industry and I
    have also worked in quasigovernment agencies and things of that
    nature. And the one thing that I know most successful
    businesses and most successful government agencies have always
    relied upon is reliable financial statements, financial
    statements that are typically audited by independent public
    audits through other CPA firms and things of that nature.
        The House Armed Services Committee under Chairman McKeon
    actually set up a panel in 2011, and it was the Financial
    Independence Audit Readiness Panel, and we had over eight
    meetings very early in the morning, Congressman Courtney was a
    member of the panel as well as Congressman Andrews and a few
    others, myself, and the one thing was that, you know, we had
    Robert Hale, we had a lot of people come in and tell us that it
    was important that we could provide reliable financial
    statements for DOD, and they set September 30th, 2017, as the
    deadline.
        And it is so important, because when you make any type of
    business decision, you just don't make business decisions,
    especially in the real world, you don't make, you know, across-
    the-board cuts like, you know, we did in sequestration. That is
    just not the smart way of doing business, or you won't be in
    business for long.
        But we have an oversight function in Congress, and I am
    very--I am a strong believer in being able to rely on financial
    statements that have been audited by an independent group. So,
    I mean, I am not going to say I ever want to hear the words
    ``BRAC,'' but I definitely don't want to hear them until I
    can--you know, I have reliable financial information that I can
    depend and make value-based decisions, and that I can go back
    and not only tell my constituents, but the American people can
    see that these are wise decisions, this is what the decisions
    were based upon.
        I think it is extremely important to have those kind of
    financial statements so Congress can fulfill its oversight
    mission, you know, for the American taxpayer. And it is with
    that I will yield back.
        Mr. Conger. Can I have 15 seconds----
        Mr. Palazzo. Thank you.
        Mr. Conger [continuing]. To respond to that?
        Mr. Wittman. Please. Quickly.
        Mr. Conger. One, the Secretary is committed to having such
    a statement; and, two, we are deeply integrated with GAO when
    we do this process, and they are our auditors, for lack of a
    better description. So they are a big part of this, and I would
    recommend you talk to them about their opinion about how we do
    it.
        Mr. Wittman. Well, I would like to wrap up with thanking
    our witnesses for coming today. Thank you for answering our
    questions.
        I do want to close with a pretty direct statement. I
    haven't heard anything today that indicates that there is a
    rational basis to pursue a BRAC, nor are there dollars
    available during these very austere times by which to pursue a
    BRAC. And with that, I want you to know that I am adamantly
    opposed to the pursuit of a BRAC at this particular time. I
    think that we have many, many other issues that we have to deal
    with with budgeting and strategy within the military. This is
    not the time to pursue a BRAC.
        And I will go to my ranking member to see if she has any
    closing comments before we leave.
        Ms. Bordallo. Thank you, Mr. Chairman. And I guess I will
    have to concur with your thoughts.
        Mr. Wittman. Thank you. Thank you, Ranking Member Bordallo.
    And with that, the Subcommittee on Readiness is adjourned.
        [Whereupon, at 5:00 p.m., the subcommittee was adjourned.]

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                                A P P E N D I X

                                 March 14, 2013

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                  PREPARED STATEMENTS SUBMITTED FOR THE RECORD

                                 March 14, 2013

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                      Statement of Hon. Robert J. Wittman

                   Chairman, House Subcommittee on Readiness

                                   Hearing on

               Is Base Realignment and Closure (BRAC) Appropriate
                                 at This Time?

                                 March 14, 2013

        Welcome to this afternoon's hearing. I'd like to thank our
    panel of experts for being here today to address ``whether BRAC
    is appropriate at this time.''
        After reading your opening statements, I understand one of
    the principal reasons why the Department requested a BRAC round
    last year was because of the imbalance between infrastructure
    and future force structure. This imbalance was caused by
    reduced force structure level imposed by the Budget Control
    Act. Unfortunately, this is a very good example of a poor plan.
    Whenever budget drives strategy, poor decisions result which in
    this case includes a reduced force structure.
        I categorically reject this notion that presumes to balance
    the Federal budget on the backs of our service members. Having
    budget decisions driving strategy is both immoral and only
    increases the likelihood of service men and women not returning
    from future combat. I believe that the Department of Defense
    needs a robust military capacity and that any diminution of
    this capacity should be staunchly opposed.
        Furthermore, this assertion that a reduction of 100,000
    service members is a principal reason to have a BRAC round
    today is shortsighted. I compared the BRAC 2005 force structure
    numbers with the 2017 future force structure proposed by the
    Department. While it is true that we will have reduced the
    Active force structure by 130,000 service members, this is
    almost completely offset by the increase in civilian personnel
    of 120,000 over the same period. Where is the excess
    infrastructure? I have yet to see any empirical evidence that
    would provide even the slightest degree of support for another
    round of BRAC.
        As to the BRAC process itself, BRAC 2005 was an absolute
    failure. Cost estimates to implement BRAC 2005 recommendations
    have increased from $21 billion to $35 billion (66 percent)
    compared to the Commission's reported estimates. GAO determined
    that BRAC 2005 payback would not occur for 13 years (until
    2018). Even more efficient BRAC initiatives of the 1990s did
    not pay back until a few years after the BRAC implementation
    was finalized. At a time when there is significant variability
    in the budget and the ensuing force structure, would a BRAC
    round be effective in providing rapid savings? Unfortunately,
    history has emphatically told us, ``NO.''
        I believe that the Department should pursue a multiprong
    strategy that fully utilizes the available capacity. Leveraging
    the private sector to support the military and use excess
    infrastructure provides a valuable revenue stream in a time of
    diminishing resources. Furthermore, the Army and the Marine
    Corps heavily relied on temporary facilities to support the
    Grow the Force initiatives. I think that we need to reduce this
    temporary infrastructure first before we move forward with
    eliminating entire bases and other permanent infrastructure.
        While I look forward to the discussion today with our
    esteemed group of witnesses to see if there is a compelling
    argument to change my position, I continue to have significant
    reservations with authorizing another BRAC round because of
    critical flaws in terms of both the process and the underlying
    assumptions. I believe that aggressively moving forward with a
    BRAC round could significantly harm our military and their
    ability to project power.
        Joining us today are:

             LMr. John Conger, Acting Deputy Under
            Secretary of Defense for Installations and Environment;
             LHonorable Katherine Hammack, Assistant
            Secretary of the Army for Installations, Energy and
            Environment;
             LMr. Roger Natsuhara, Principal Deputy
            Assistant Secretary of the Navy for Energy,
            Installations and Environment; and
             LMrs. Kathleen Ferguson, Acting Assistant
            Secretary of the Air Force for Installations,
            Environment and Logistics.

        Ladies and Gentlemen, thank you all very much for being
    here. I appreciated your thoughtful statements and your
    insights into this complex topic.
        While I understand that we are in challenging budget times,
    it is a matter of record that this Administration has been
    unable to deliver a timely budget request for the fourth
    consecutive year. Considering this late submission, I
    understand that our witnesses will not be able to comment on
    the record as to whether the Administration will support a
    request for another round of BRAC in the fiscal year 2014
    budget request. However, the Administration did request two
    additional rounds of BRAC in last year's budget request and
    former Secretary of Defense Panetta indicated his support for
    additional infrastructure consolidations earlier this year. I
    expect our witnesses to be able to discuss their thoughts as to
    the applicability of BRAC with the current force structure and
    overseas force posture.
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    ?

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

                  WITNESS RESPONSES TO QUESTIONS ASKED DURING

                                  THE HEARING

                                 March 14, 2013

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

                 RESPONSES TO QUESTIONS SUBMITTED BY MR. SCOTT

        Mr. Conger. BRAC 2005 eliminated 1,490 civilians positions in the
    National Capital Region which includes the Pentagon. In implementing
    these reductions we utilized government-owned office space like the
    Pentagon in order to minimize leasing costs. As such, the Pentagon's
    population remains constant commensurate with its designed capacity.
    [See page 15.]
        Mr. Conger. Section 142 of the Energy Independence and Security Act
    of 2007 and Executive Order 13423, Strengthening Federal Environmental,
    Energy, and Transportation Management, requires Federal agencies to
    achieve a 20 percent reduction in non-tactical fleet vehicle petroleum
    consumption by FY 2015 compared to a FY 2005 baseline. Executive Order
    13514, Federal Leadership in Environmental, Energy, and Economic
    Performance extends the reduction goal to 30 percent by FY 2020. In FY
    2012, DOD's non-tactical vehicle petroleum consumption was 19.5 percent
    below the baseline compared to a goal of 14%. The DOD continues to
    pursue replacement of fleet vehicles with more efficient models,
    Alternative Fuel Vehicles, and hybrid electric vehicles to decrease
    petroleum consumption. [See page 16.]

        Ms. Ferguson. In Fiscal Year 2012 (FY12), the Air Force consumed
    2.24 billion gallons of aviation fuel at a total cost of $7.92 billion,
    which results in an average cost of $3.53 a gallon. [See page 15.]
    ?

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

                  QUESTIONS SUBMITTED BY MEMBERS POST HEARING

                                 March 14, 2013

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

                       QUESTIONS SUBMITTED BY MR. WITTMAN

        Mr. Wittman. Has the Secretary of Defense assessed whether excess
    infrastructure exists in the Department? What empirical support can the
    Department provide to support a request for additional BRAC rounds?
        Mr. Conger. Parametric techniques used to analyze aggregate
    assessment of excess capacity in 2004 indicated that the Department had
    24 percent excess overall relative to the force-structure plan
    developed by the Joint Staff. Because BRAC 2005 eliminated only about
    three percent of the Department's capacity, we believe we have
    significant excess at the aggregate level today. In addition, force-
    structure reductions in the Army (from 570,000 to 490,000 Active Duty
    personnel), in the Marine Corps (from 202,000 to 182,000 Active Duty
    personnel), and in the Air Force (reduced by 500 aircrafts) subsequent
    to the 2004 analysis point to additional
    excess.
        We believe the only fair and thorough way to determine whether
    there is excess capacity within the Department is to conduct the
    analysis in BRAC using certified data that collects detailed
    information from each base across a broad array of many metrics and
    compares this information to force structure.
        Mr. Wittman. Considering BRAC 2005 will not realize a payback on
    the $35 billion investment until 2018, 13 years after the start of the
    initial investment, can we afford to exacerbate the budget constraints
    placed on the Department of Defense by sequestration by undertaking an
    additional round of BRAC?
        Mr. Conger. BRAC is a key priority to the Department and we will
    apply the resources necessary to support both a robust and thorough
    BRAC analysis and an efficient and effective implementation process.
    BRAC is expensive, to be sure, but it begins generating savings almost
    immediately, and those savings will partially offset its initial costs.
    Moreover, BRAC will generate recurring savings far in excess of the
    upfront investment. Furthermore, because BRAC 2005 was conducted during
    a period of growth and focused more on transformation than elimination
    of excess capacity, it was significantly more costly than prior rounds.
    The first four rounds of BRAC, which cost (in today's dollars) $3.9B,
    $6.5B, $10.2B, and $8.5B, respectively, are a better gauge of what a
    capacity reduction round might cost.
        Mr. Wittman. GAO recommended that targets for eliminating excess
    capacity be provided as a selection criterion. This is particularly
    relevant considering the Department estimated 24% excess capacity in
    BRAC 2005 but closed less than 5% of the DOD infrastructure. DOD
    opposes this GAO recommendation because it ``may lead the Department to
    pursue suboptimal recommendations that maximize square footage
    reductions.'' Can you explain why infrastructure reductions are not the
    preeminent requirement?
        Mr. Conger. We agree that the existence of excess infrastructure
    capacity underlies the need for BRAC. What concerns the Department
    about GAO's report is its emphasis on establishing goals, measurements
    of effectiveness, and capacity reduction targets rather than on
    optimizing military value. The premise that we should be required to
    close a particular number of bases or eliminate a particular number of
    civilian jobs is arbitrary, counterproductive, and would undermine
    military capability. Again, the overall rationale for BRAC is driven by
    the presence of excess infrastructure and the need to optimize the
    allocation of infrastructure to support military forces, individual
    recommendations should be based primarily on optimizing military value.
    Goals or targets would subvert that process.
        Mr. Wittman. Considering the significant variability associated
    with the budget and the resulting force structure, is it premature to
    initiate a BRAC round? In terms of force structure and budget, what
    planning factors would the Department use to determine the appropriate
    infrastructure requirements?
        Mr. Conger. The current budget situation and declining forces make
    it even more important to reduce overhead. The Department believes we
    have excess capacity in our infrastructure. Parametric techniques used
    to analyze aggregate assessment of excess capacity in 2004 indicated
    that the Department had 24 percent excess overall relative to force
    structure plans developed by the Joint Staff. Because BRAC 2005
    eliminated only about three percent of the Department's capacity, we
    believe we have significant excess today.
        A BRAC round would be based on a 20-year Force structure plan and a
    20-year threat assessment.
        Mr. Wittman. Please provide an update as to when the Department is
    expected to complete the Study on Overseas Basing Presence of United
    States Forces required in Section 347 of the National Defense
    Authorization Act for Fiscal Year 2012. As a foundational document,
    shouldn't the Department complete the overseas basing assessment before
    an authorization for an additional round of BRAC is
    provided?
        Mr. Conger. An independent assessment of the Department's overseas
    basing of military forces, as required by Section 347 of the FY12 NDAA,
    was completed by the RAND Corporation on December 31st. The Department
    delivered the assessment and the Deputy Secretary's comments in
    response to the assessment to the congressional defense committees on
    April 18. Generally speaking, it is beneficial to undertake reviews of
    overseas and domestic infrastructure in tandem, so each can inform the
    other.
        We believe the only fair and thorough way to determine whether
    there is excess capacity within the Department is to conduct the
    analysis in BRAC using certified data that collects detailed
    information from each base across a broad array of many metrics and
    compares this information to force structure.
        Mr. Wittman. The difference between the commissions cost estimates
    and the actual costs identified by GAO varied significantly in BRAC
    2005, with a 66% increase over the commission's estimate. . In the
    March 2013 report, GAO recommended that DOD ``improve the process for
    fully identifying recommendation-specific military construction
    requirements.'' DOD disagreed with this finding. If an additional round
    of BRAC was authorized, how would the Department ensure a greater deal
    of accuracy in cost estimates and cost stability when executing the
    BRAC recommendations?
        Mr. Conger. As I indicated in my written statement, GAO's 2012
    report found that most of the cost increase could be tied to only 14 of
    182 recommendations. Those increases were largely due to deliberate and
    subsequent decisions to expand the originally-envisioned scope of
    construction and recapitalization to address deficiencies in our
    enduring facilities or to expand the capabilities they provide as
    opposed to issues of accuracy. Second, BRAC 2005 occurred during a time
    of growth (both personnel and resources) and as such contributed to
    scope increases. A future BRAC round would be similar to in terms of
    cost and savings to that of the 1993 and 1995 rounds which had quicker
    payback (two to three years). Third, we will incorporate our own
    lessons learned and the findings of GAO to improve our cost estimating
    particularly for areas such as information technology.
        Mr. Wittman. With the exception of the Army and Air Force, the
    other Service Chiefs generally indicated last year that they did not
    anticipate any major closures or realignments as a result of a future
    BRAC authorization. Why would the Department request broad authority
    for an additional BRAC authorization when significant excess
    infrastructure does not appear to exist across the Department?
        Mr. Conger. Parametric techniques used to analyze aggregate
    assessment of excess capacity in 2004 indicated that the Department had
    24 percent excess overall relative to force structure plans developed
    by the Joint Staff. Because BRAC 2005 eliminated only about three
    percent of the Department's capacity, we believe we have significant
    excess at the aggregate level today. In addition, force-structure
    reductions in the Army (from 570,000 to 490,000 Active Duty personnel),
    in the Marine Corps (from 202,000 to 182,000 Active Duty personnel),
    and in the Air Force (reduced by 500 aircrafts) subsequent to the 2004
    analysis point to additional excess. We believe the only fair and
    thorough way to determine whether there is excess capacity within the
    Department is to conduct the analysis in BRAC using certified data that
    collects detailed information from each base across a broad array of
    many metrics and compares this information to force structure.
        Mr. Wittman. What is the purpose of BRAC? Is it to enhance military
    value or is it to close installations and reap savings? What are the
    advantages to retaining the existing selection criteria that includes
    military value as the principal criterion?
        Mr. Conger. BRAC is a statutory process by which the Department can
    comprehensively examine how well its infrastructure supports its force
    structure, and close and realign installations to improve that
    relationship. As such, the purpose of BRAC is to both optimize military
    value and reduce excess capacity through closing installations and that
    process reaps savings. The advantage of giving the military value
    criteria primary consideration is that when coupled with a 20-year
    force structure plan, the DOD and the Commission's decisions are based
    on a rational analytical process. This is why we welcomed Congress'
    decision in BRAC 2005 to make DOD's practice of placing primary
    consideration on military value a legal requirement, and why our
    proposal last year contained the same provision.

        Mr. Wittman. The Army has prepared a Programmatic Environmental
    Assessment to study the force-structure reductions from 562,000 to
    490,000 soldiers. Is this assessment a method to obviate a BRAC
    assessment? What inefficiencies will be created without using the BRAC
    process to reduce the force structure? Can you provide a better
    understanding of the timing associated with this effort? How are
    communities best able to provide input into this process?
        Secretary Hammack. The Army's reduction in force structure and end
    strength analyzed in the Programmatic Environmental Assessment (PEA) is
    not an attempt to obviate a BRAC assessment. The Army has an obligation
    to comply with the National Environmental Policy Act (NEPA), which
    requires an assessment of the environmental impacts of proposed actions
    prior to making irretrievable commitments of Federal resources. The
    Army conducted the PEA to comply with NEPA and consider the
    environmental and socioeconomic impacts of its force structure actions
    and proposed alternatives.
        The Army's mandated force-structure reductions will create excess
    capacity at several installations. If an installation's assigned
    military forces are reduced significantly, it logically follows that
    some civilian personnel functions may no longer be required to support
    our Soldiers and Families. The Army has not yet initiated any capacity
    analysis to determine the level of civilian personnel and
    infrastructure necessary to support a reduced force level. Determining
    whether excess capacity will exist across many installations, or will
    be concentrated in a few installations, cannot occur until after force
    structure and associated stationing decisions are made.
        Under current and foreseeable budget constraints, the Army will not
    be able to maintain that excess capacity without negatively impacting
    military readiness and other critical investments. The restrictions
    currently imposed by 10 USC Sec. 2687 and Title 40 real property
    disposal authorities make it difficult for the Army to efficiently
    eliminate excess capacity once it has been identified. That process
    also results in attempting to eliminate excess infrastructure at each
    installation piecemeal rather than using the holistic and Joint/cross-
    service approach facilitated by the BRAC Commission process.
        BRAC's proven decision making approach promotes efficiencies by
    optimizing military and civilian moves and excess property disposal in
    conjunction with current and future mission capabilities. It is for
    this reason that the Army supports authorization for additional BRAC
    authority to ensure that personnel and infrastructure capacity is
    properly aligned with planned force structure changes.
        The PEA was released for public comment on January 18, 2013. On
    February 19, 2013, the mandatory 30-day public comment period was
    extended to March 21, 2013. A Finding of No Significant Impact (FNSI)
    was signed on April 4, 2013, and a Notice of Availability (NOA) was
    published in the Federal Register on April 12, 2013. The Army must
    reduce and reorganize its force structure in order to achieve the
    fiscal reductions required by the Budget Control Act of 2011,
    consistent with the reduction of commitments in Iraq and Afghanistan,
    and the National Military Strategy. The Secretary of Defense issued
    guidance in January 2012 that the Army will reduce its Active Component
    end strength to 490,000 by the end of FY2017, and inactivate at least
    eight Brigade Combat Teams. The process has already started. Overseas
    forces are being reduced first, with two Brigade Combat Teams
    inactivating in Europe. To accomplish the remaining reductions inside
    the United States, the Army is currently analyzing all available
    options. At this time, no decisions have been made.
        The Army welcomes community input, and has taken steps to afford
    affected communities multiple opportunities to provide input into this
    process. First, the PEA for Army 2020 Force Structure Realignment and
    the draft FNSI were released for 60 days of public comment. After
    signing the FNSI on April 4, 2013, the Army began holding ``community
    listening sessions'' at 30 installations that have a combined permanent
    party Army military and Army civilian population of 5,000 or greater.
        Listening sessions give the public and community leaders (e.g.,
    Local, State, and Federal officials and staff; Chamber of Commerce,
    etc.) an opportunity to provide direct input and key community-unique
    points of interest they believe the Army should consider in its
    stationing decision process. The primary focus of these sessions is to
    capture community input for Senior Leaders to consider as part of the
    Army's overall process, before final decisions are made. The first
    session was held on April 12, 2013, and the sessions ran throughout the
    month of April.
        Mr. Wittman. How will the decision to withdraw two BCTs from Europe
    impact the realignment decisions in the United States?
        Secretary Hammack. The decision to inactivate two BCTs in Europe
    was part of a larger effort to reduce Active Component end strength to
    490,000 Soldiers by the end of FY17 in order to achieve the fiscal
    reductions required by the Budget Control Act of 2011. To achieve the
    reductions, the Army analyzed the stationing of all units within the US
    and overseas. Inactivating two BCTs in Europe accomplishes multiple
    objectives. It preserves more units inside the US. As a result, the
    Army will adjust and consolidate units in Europe to its enduring bases
    and close smaller, less modernized bases
        Mr. Wittman. Has the Army participated in the overseas posture
    review and does the Army believe that the overseas force structure is
    correct in terms of position and size? How can Congress move forward
    with considering a BRAC if the Department has not concluded this
    analysis?
        Secretary Hammack. The Army is a member of the Global Posture
    Process and participates at all levels of the overall Department
    discussion of overseas posture and prioritization each year. The Army
    coordinates and provides input to each Global Posture Executive Council
    (GPEC) deliberation. Although Army forward stationed forces in Europe
    and Korea have decreased over the past decade, the current plan focuses
    on the right locations and structure, adequate to meet requirements of
    Combatant Commanders and to assure our Allies.
        The decline in force structure inside the United States will
    require the Army to bring infrastructure and civilian staffing into
    proper alignment with force structure demands. An independent
    assessment of the Department's overseas basing of military forces, as
    required by Section 347 of the FY12 NDAA, was completed by the RAND
    Corporation on December 31st. The Department delivered the assessment
    and the Deputy Secretary's comments in response to the assessment to
    the Congressional Defense Committees on April 18th. Generally speaking,
    it is beneficial to undertake reviews of overseas and domestic
    infrastructure in tandem, so each can inform the other.

        Mr. Wittman. During the Navy Posture Hearing of February 16, 2012,
    the Chief of Naval Operations Admiral Jonathan Greenert and Commandant
    of the Marine Corps General James Amos said they did not see any bases
    they needed to close. Admiral Greenert said when he looks at his
    current bases, ``Nothing jumps out at me.'' But he said he would
    support the process because it might reveal something. General Amos
    noted he did not see any bases he would offer to cut. ``My sense is,
    we're pretty lean,'' he said. Does Navy and Marine Corps seek another
    round of BRAC? Has the Navy assessed its overall infrastructure
    enterprise to determine whether excess infrastructure exists? What is
    the rationale to support such a
    request?
        Mr. Natsuhara. The Department of Navy fully supports another round
    of BRAC.
        The American public expects the military to spend wisely the
    resources entrusted to us. The fiscal uncertainty we now face as a
    nation only heightens the need to make prudent investments that ensure
    our Navy and Marine Corps team remains ready to respond to crises
    wherever they may occur. Therefore, we must ensure the continuous
    alignment of our infrastructure with our evolving force structure. The
    BRAC process offers the best opportunity to assess and evaluate
    opportunities to properly align our domestic infrastructure with our
    evolving force structure and laydown, and the Department is making
    plans for another round of BRAC should one be authorized by Congress.
        Mr. Wittman. In light of the expected growth in Navy force
    structure and the shift to the Pacific, how is the Navy revaluating its
    infrastructure capacity and requirements?
        Mr. Natsuhara. The Navy and Marine Corps team has had a significant
    forward presence in the Pacific for many decades, and we are
    continually evaluating our requirements there. These theater
    requirements, along with other Service priorities, are considered
    during the Planning, Programming, Budgeting and Execution (PPBE)
    process.
        Mr. Wittman. The Government of Japan has transferred to the United
    States $834.0 million toward the agreed total contribution of $3.1
    billion for construction activities to support the relocation of 4,700
    Marines from Okinawa to Guam. What is the plan for expending these
    monies?
        Mr. Natsuhara. The Government of Japan (GOJ) has transferred $948.3
    million toward the agreed total contribution of $3.1 billion for
    construction activities to support the relocation of 4,700 Marines from
    Okinawa to Guam. This includes a recent transfer of $114.3 million, for
    which formal notification is forthcoming. To date, we have obligated
    $109 million in GOJ contributions for Utilities and Site Improvements
    (U&SI) at Apra Harbor and Andersen AFB gate improvements and design.
        Future planned obligations include $10.8M for U&SI planning and
    design at Andersen AFB in FY13 and $114.3M for construction in FY14 (if
    the FY14 NDAA permits). The remainder of the balance of GOJ funds is
    primarily dependent on the in progress Supplemental Environmental
    Impact Statement (SEIS). The SEIS is being prepared to evaluate
    potential alternatives for construction and operation of a main
    cantonment area, including family housing, and a live-fire training
    range complex to support the relocation of a substantially reduced
    number of Marines than previously analyzed under the National
    Environmental Policy Act (NEPA). Decision on Preferred Alternative is
    targeted for July 2013.

        Mr. Wittman. The Air Force has been rather consistent in seeking
    another round of BRAC. Most recently, Air Force Chief of Staff General
    Welsh indicated ``During BRAC 2005, I know the Air Force fell short of
    its goal to reduce excess capacity. Since then, we've lost
    approximately 500 aircraft through force-structure reductions. Although
    I haven't been involved in the related studies, I would assume that we
    still have excess infrastructure. The only way I know to effectively
    eliminate excess infrastructure is to close installations. Therefore,
    if confirmed, I would fully support the Department of Defense's request
    for additional rounds of BRAC.'' Has the Air Force assessed its overall
    infrastructure enterprise to determine whether excess infrastructure
    exists? What are the results of this analysis?
        Ms. Ferguson. The Air Force has not conducted a detailed capacity
    analysis since the March 2004 Department of Defense Report to Congress,
    as required by Section 2912 of the Defense Base Closure and Realignment
    Act of 1990. This report confirmed the Air Force had 24 percent excess
    installation capacity prior to implementing BRAC 2005. The Air Force
    still has excess infrastructure as BRAC 2005 did not contain any major
    infrastructure reductions and since that time we've further reduced our
    force structure by more than 500 aircraft and reduced our Active Duty
    military end strength by nearly eight percent.
        The Air Force supports the Defense Departments position that the
    only fair and thorough way to determine whether there is excess
    capacity within the Department is to conduct the analysis in BRAC using
    certified data that collects detailed information from each base across
    a broad array of many metrics and compares this information to force
    structure.
        Mr. Wittman. Has the Air Force participated in the overseas posture
    review and does the Air Force believe that our overseas force structure
    is correct in terms of position and size? How can Congress move forward
    with considering a BRAC if the Department has not concluded this
    analysis?
        Ms. Ferguson. The Air Force has reduced both mission and manpower
    in Europe by 75 percent since 1990. We currently operate from only six
    main operating bases on the continent, and they remain critical to
    commitments to NATO and provide throughput and global access to three
    unified combatant commands. Even so, there may be further opportunities
    for consolidation. The Secretary of Defense directed a capacity
    analysis to provide the basis for reducing the long-term expenses
    through footprint consolidation in Europe and the Air Force fully
    supports this effort. The Air Force believes we need to look at
    reducing our footprint in Europe as well as domestically.
                                     ______

                       QUESTION SUBMITTED BY MS. BORDALLO
        Ms. Bordallo. I understand that there has been a substantial amount
    of litigation surrounding the housing management firm at Fort Benning
    and allegations of corruption that have led to the dismissal of the
    property manager. Specifically, I understand that Clark and Pinnacle
    initially jointly managed military privatized housing projects at
    several locations including Fort Benning, Fort Belvoir, Presidio of
    Monterey and Fort Irwin. Because of the alleged fraud and
    mismanagement, Pinnacle has been or is being removed as property
    manager, which has led to substantial litigation.
        1.   What is the status of the litigation between the Army, Clark,
    and Pinnacle?
        2.   How much legal costs have been generated in these matters?
        3.   I understand that some of the legal costs are being funded out
    of accounts designated for housing improvement. How much legal costs
    have been funded out of these reserve accounts? Which exact accounts
    have been used?
        4.   What if Clark and the Army lose the cases against Pinnacle and
    these funds are not reimbursed? Is there a potential that housing
    improvement funds will not be reimbursed? What impact would that lack
    of funding have on the ability of the housing improvement funds to
    accomplish their goals?
        5.   Is there any ongoing effort to resolve and settle this
    litigation in order to limit the amount of litigation costs and
    potential exposure to the military privatized housing program?
        Secretary Hammack. The Project Companies (Fort Benning Family
    Communities LLC, Fort Belvoir Residential Communities LLC, California
    Military Communities LLC, and Monterey Bay Military Housing LLC)
    (collectively, ``the Project Companies'') have filed lawsuits naming
    Pinnacle and others as defendants in both Georgia and California state
    courts. The Army is not a party to the litigation in either Georgia or
    California.
        The Army has not expended any funds on legal costs.
        All litigation and audit costs are funded out of the Projects'
    collective operating cash flows as extraordinary expenses.
        While the loss of any resource to fund out year development is
    undesirable, it is not expected that a loss of funds used to fund the
    litigation will have a material adverse impact on the Project
    Companies' ability to recapitalize their housing.
        There are no current settlement discussions ongoing between the
    Project Companies and Pinnacle. The Project Companies are engaged in
    preliminary settlement discussions with the Lockton Companies, one of
    the named defendants in the Georgia litigation.
                                     ______

                       QUESTIONS SUBMITTED BY MS. SPEIER
        Ms. Speier. The Government Accountability Office has made a number
    of recommendations for achieving cost savings in any future BRAC round,
    including requiring OSD to establish official goals to be achieved by
    the process. But I am particularly concerned about the level of cost
    growth in military construction that occurred in the last BRAC round,
    and the significant information technology costs and overlapping costs
    across the Department. GAO identified 31 potentially duplicative IT
    investments at DOD, totaling approximately $1.2 billion. How will you
    incorporate military construction and information technology
    requirements in developing the initial cost estimates for a future
    BRAC?
        Mr. Conger. As I indicated in my written statement, GAO's 2012
    report found that most of the cost increase could be tied to only 14 of
    182 recommendations. Those increases were largely due to deliberate and
    subsequent decisions to expand the originally-envisioned scope of
    construction and recapitalization to address deficiencies in our
    enduring facilities or to expand the capabilities they provide as
    opposed to issues of accuracy. Second, BRAC 2005 occurred during a time
    of growth (both personnel and resources) and as such contributed to
    scope increases. A future BRAC round would be similar to in terms of
    cost and savings to that of the 1993 and 1995 rounds which had quicker
    payback (two to three years). Third, we will incorporate our own
    lessons learned and the findings of GAO to improve our cost estimating
    particularly for areas such as information technology.
        Ms. Speier. I think many of our concerns about another BRAC round
    is the lack of transparency in the process, and uncertainty about how
    DOD and the services weigh fiscal, environmental, strategic, and
    operational consequences of these decisions. What steps will the
    Department take to make this process more transparent? Would you
    consider submitting comments you receive or the thorough DOD data you
    consider to brac.gov as it is received?
        Mr. Conger. The statutory commission process created by past BRAC
    legislation is a fair, objective, and proven method for eliminating
    excess domestic infrastructure and realigning what remains.
        The details of the BRAC decision making process must remain
    internal to the Department of Defense until the Secretary issues his
    closure and realignment recommendations in order to protect the
    integrity of the BRAC process. This is necessary to follow the
    statutory BRAC direction to treat all installations equally, preserve
    the deliberative process, and prevent public confusion and unnecessary
    alarm.
        Revealing details of the decision making process through the
    release of such things as data call questions, criteria weights, or any
    attributes before the Secretary has made his closure and realignment
    recommendations could:

              Taint the integrity of the BRAC process by opening it
            up to external (and unequal) influences;
              Inhibit open and frank discussions necessary to
            produce quality decisions; and
              Create public confusion from the disclosure of
            reasons and rationales that were not in fact ultimately the
            grounds for a decision or from the disclosure of proposed
            decisions that were not in fact adopted.

        However, all of this information is provided to the Commission and
    the Congress upon submission of the Secretary's recommendations. At
    this point, communities and members of Congress can engage in the
    Commission process which is anchored by public hearings.
        Ms. Speier. The last BRAC Commission raised concerns that that the
    BRAC process is divorced from the other strategic decisions the
    Department of Defense is making, and specifically recommended the next
    BRAC round should be after the Quadrennial Defense Review. What do you
    think of this recommendation?
        Mr. Conger, Secretary Hammack, and Ms. Ferguson. Similar to how
    Integrated Global Presence and Basing Strategy informed BRAC 2005, the
    2014 Quadrennial Defense Review will be used to inform a future BRAC
    round.

        Ms. Speier. The last BRAC Commission raised concerns that that the
    BRAC process is divorced from the other strategic decisions the
    Department of Defense is making, and specifically recommended the next
    BRAC round should be after the Quadrennial Defense Review. What do you
    think of this recommendation?
        Mr. Natsuhara. There are many sources of information that are used
    to inform the assessment and evaluation of opportunities to properly
    align our domestic infrastructure with evolving force structure. If a
    BRAC round is authorized, we would anticipate using the 2014
    Quadrennial Defense Review to inform the future round in a manner
    similar to how Integrated Global Presence and Basing Strategy informed
    BRAC 2005.
                                     ______

                       QUESTIONS SUBMITTED BY MR. BARBER
        Mr. Barber. Secretary Conger, you mention in your testimony that
    given the current budget situation and drawdown of forces that a BRAC
    is much more important so that military overhead can be reduced. I
    understand we need to find the waste, and cut the fat. But I want to
    shine a light on the importance of base installations to the
    communities that live around them, and the families and local
    businesses that support their local military. In my district, we have
    two installations, Davis-Monthan Air Force Base and Fort Huachuca, with
    the 162nd Fighter Wing just across the district line in Tucson. Any
    base closure in Southern Arizona would have a destructive economic
    impact. Fort Huachuca, for example, is the number one economic driver
    for Cochise County. I was just talking yesterday with local officials
    from Sierra Vista who are already reporting a loss in revenue for
    community businesses with the uncertainty around sequester. If the Fort
    were to close completely, the economy in Cochise County would be
    severely impacted. I understand the need to eliminate inefficiencies at
    our facilities, but take the example I just laid out, and amplify it
    nationally. In a memorandum from the Secretary of Defense in 2005, the
    last time we had a round of BRAC, the Department did not weigh heavily
    the possible negative impacts a base closure would have on local or
    national economic growth. If we were to see a new round of BRACs today
    as our economy is still recovering and the full effects of
    sequestration are setting in, communities nationwide would be
    devastated. Is this the right time to conducting another round of BRAC
    when our economy is anemic? Would it not make more sense to first
    determine the effects that our budget uncertainty and sequestration are
    having on force structure, and our local economies, before we begin
    discussing the necessity of a new round of BRAC?
        Mr. Conger. The Department is mindful of the significant impact a
    BRAC decision can have on a host community. In many places, a military
    base is an economic engine, and the closure of the base can lead to
    reduced local tax revenues, decreased student impact aid, falling
    housing prices and loss of retail and business revenue. Most important,
    a base closure can mean the loss of jobs.
        Defense employees, through the service and defense agency human
    resources offices can access a variety of priority placement, referral,
    and retirement programs that are designed to minimize involuntary
    separations. These services have worked in the past and we will use
    them in the future. These programs are complemented by Department of
    Labor`s Employment and Training Administration's reemployment and
    retraining initiatives.
        As the Armed Services Committee recognized (when it first enacted
    section 2687): ``Military bases cannot be maintained to support other
    than national defense requirements.'' ``The committee feels strongly
    that the Defense Department should do everything possible to protect
    existing jobs that meet national defense requirements. At the same
    time, the committee is concerned that in the desire to protect jobs,
    any inclusion of an unemployment rate threshold in the limitations
    placed upon the Defense Department could undermine the careful balance
    that has been achieved.''
        Mr. Barber. Secretary Hammack, so good to see you again. I really
    enjoyed our meeting a couple weeks ago. I wanted to go back to that
    meeting if I might. In our meeting we talked about the Electronic
    Proving Ground at Fort Huachuca in my district. EPG, as you know, has
    the cleanest electromagnetic spectrum in the country and assets that
    can't be duplicated nor found anywhere in the world. We also discussed
    how the Army is now in the process of reducing its force structure
    overseas, and that with the plans here at home, the Army is planning to
    reduce personnel outside of the BRAC process. But as you said in your
    testimony, there will be a price to the consolidation that will likely
    occur over the next few years. During the last round of BRAC, the
    military weighed more heavily the ability of a location to support
    training, mobilization, and surge forces. This speaks to a time when we
    were surging large ground forces in Baghdad and subsequently
    Afghanistan. We now operate in a different environment with a smaller,
    more agile force. My question is when the Army looks over the next few
    years at base and mission realignment, shouldn't the Army place a high
    priority on maintaining unique capabilities essential to national
    security at its testing and evaluation facilities, like the unique
    assets we have at EPG?
        Secretary Hammack. If a future BRAC round is authorized, and as the
    Army makes decisions on base closures and mission realignments, unique
    or specialized capabilities at an installation will be accounted for in
    a broad application of Military Value.
                                     ______

                     QUESTIONS SUBMITTED BY MS. SHEA-PORTER
        Ms. Shea-Porter. How will BRAC data be normalized across DOD when
    Commands, Agencies, and Activities will be impacted differently under
    sequestration? For example, at Portsmouth Naval Shipyard, sequester
    furloughs are going to place the Shipyard a month behind its schedule
    for every submarine availability subsequent to imposition of sequester
    furloughs. Would that kind of impact be taken into account as a delay
    not of the Shipyard's making, and not counted against the Shipyard as
    an inefficiency? And the same with other impacts on other DOD Commands,
    Agencies and Activities.
        Mr. Conger. The BRAC statute specifies that the analysis must
    consider all bases equally; that the data submitted for use in the
    analysis must be certified as accurate and complete; that the
    recommendations must be based on a force structure plan (looking out 20
    years) and statutory selection criteria that make military value the
    primary consideration.
        Ms. Shea-Porter. As the 2005 BRAC round demonstrated, upfront costs
    for BRAC are extremely high. In fact, I don't know why we are even
    considering a BRAC because, in this constrained budget environment, it
    is unaffordable. According to the GAO, the 2005 BRAC will not begin to
    show ANY savings until 2018, more than a dozen years after the closures
    started. Furthermore the savings in the 2005 BRAC round are 67% lower
    than predicted, which proves the untrustworthiness of these
    predictions. If Congress and the BRAC Commission had realized how
    little the BRAC would actually save, they might have closed or
    realigned fewer bases. Why do you think that you can do a better job of
    predicting future costs now than in 2005?
        Mr. Conger. Savings from prior BRACs are real and substantial. The
    first four rounds of BRAC (1988, 1991, 1993 and 1995) are producing a
    total of about $8 billion in annual recurring savings, and the
    comparable figure for BRAC 2005 is $4 billion. These figures have been
    validated by GAO.
        The real issue is one of up-front cost to achieve those savings.
    That up-front cost was inflated during the 2005 round, largely due to
    deliberate and subsequent decisions to expand the originally-envisioned
    scope of construction and recapitalization to address deficiencies in
    our enduring facilities or to expand the capabilities they provide as
    opposed to issues of accuracy. Second, BRAC 2005 occurred during a time
    of growth (both personnel and resources) and as such contributed to
    scope increases. A future BRAC round would be similar to in terms of
    cost and savings to that of the 1993 and 1995 rounds which had quicker
    payback (two to three years). Third, we will incorporate our own
    lessons learned and the findings of GAO to improve our cost estimating
    particularly for areas such as information technology.
        Ms. Shea-Porter. I'd like to know how the costs compare should
    another shipyard be closed through BRAC (meaning that no public
    shipyards would remain on the East Coast) and the repair/refueling work
    transferred to private shipyards. Also, in addition to costs, can you
    compare public versus private shipyards in terms of efficiency,
    availability for emergency surges in work load, personnel productivity,
    or any other differences not directly related to costs?
        Mr. Conger. BRAC is a process that does not have a predetermined
    outcome and we will collect certified data as a part of that process.
    Using statutory selection criteria that emphasize military value and a
    force structure plan looking out 20 years, DOD must complete a
    comprehensive review before it can determine which installations should
    be realigned or closed. The list of closures is then reviewed by an
    independent Commission that can (and has in the past) altered the list.
    Its review includes holding public hearings and visiting various sites.
    The commission's review results in a list of closures and realignments
    that are sent to the President and are subject to review by Congress.
    It is this thorough process that produces the list of installations
    that DOD will close or realign, and the estimate of the costs and
    savings associated therewith.

        Ms. Shea-Porter. How will BRAC data be normalized across DOD when
    Commands, Agencies, and Activities will be impacted differently under
    sequestration? For example, at Portsmouth Naval Shipyard, sequester
    furloughs are going to place the Shipyard a month behind its schedule
    for every submarine availability subsequent to imposition of sequester
    furloughs. Would that kind of impact be taken into account as a delay
    not of the Shipyard's making, and not counted against the Shipyard as
    an inefficiency? And the same with other impacts on other DOD Commands,
    Agencies and Activities.
        Mr. Natsuhara. Base Realignment and Closure (BRAC) assessments
    document existing military infrastructure requirements and capacities
    and the potential cost of realigning workload, from both a manpower and
    infrastructure perspective. Any scenario evaluating the transfer of
    work to private shipyards and closing or otherwise realigning public
    shipyards would need to consider the capacity of the receiving private/
    public shipyards in terms of facilities, dry dock availability, skills,
    infrastructure, and the difference between new ship constructions
    versus maintenance overhauls.
        In addition to evaluating workload and supporting infrastructure
    requirements, transferring work from public shipyards to private
    shipyards would need to consider the requirements of 10 U.S.C. 2464.
    Specifically, the law mandates the retention of certain critical core
    capabilities in the public shipyard that are not replicated in private
    shipyards. Often, certain unique public shipyard skills are considered
    inherently governmental and core capabilities under the law. In
    addition, 10 U.S.C. 2466 requires that no more than 50 percent of the
    funds made available in a fiscal year to a military department for
    depot-level maintenance and repair workload may be used to contract for
    performance by non-federal government personnel, and this must be
    considered when public and private depot maintenance workload is
    assigned. There are additional performance attributes to be considered,
    such as emergent requirements, and workload surge capacity. Workload at
    both public and private shipyards varies cyclically. Private shipyards
    are more dependent on the combination of ship construction and repair
    cycles. All these attributes and considerations would need to be
    carefully and fully evaluated as part of any BRAC scenario that
    evaluated a realignment of work at the Naval Shipyards.
        Ms. Shea-Porter. I'd like to know how the costs compare should
    another shipyard be closed through BRAC (meaning that no public
    shipyards would remain on the East Coast) and the repair/refueling work
    transferred to private shipyards. Also, in addition to costs, can you
    compare public versus private shipyards in terms of efficiency,
    availability for emergency surges in work load, personnel productivity,
    or any other differences not directly related to costs?
        Mr. Natsuhara. Base Realignment and Closure (BRAC) assessments
    document existing military infrastructure requirements and capacities
    and the potential cost of realigning workload, from both a manpower and
    infrastructure perspective. Any scenario evaluating the transfer of
    work to private shipyards and closing or otherwise realigning public
    shipyards would need to consider the capacity of the receiving private/
    public shipyards in terms of facilities, dry dock availability, skills,
    infrastructure, and the difference between new ship constructions
    versus maintenance overhauls.
        In addition to evaluating workload and supporting infrastructure
    requirements, transferring work from public shipyards to private
    shipyards would need to consider the requirements of 10 U.S.C. 2464.
    Specifically, the law mandates the retention of certain critical core
    capabilities in the public shipyard that are not replicated in private
    shipyards. Often, certain unique public shipyard skills are considered
    inherently governmental and core capabilities under the law. In
    addition, 10 U.S.C. 2466 requires that no more than 50 percent of the
    funds made available in a fiscal year to a military department for
    depot-level maintenance and repair workload may be used to contract for
    performance by non-federal government personnel, and this must be
    considered when public and private depot maintenance workload is
    assigned. There are additional performance attributes to be considered,
    such as emergent requirements, and workload surge capacity. Workload at
    both public and private shipyards varies cyclically. Private shipyards
    are more dependent on the combination of ship construction and repair
    cycles. All these attributes and considerations would need to be
    carefully and fully evaluated as part of any BRAC scenario that
    evaluated a realignment of work at the Naval Shipyards.
                                     ______

                       QUESTIONS SUBMITTED BY MR. ENYART
        Mr. Enyart. Scott Air Force Base in my district is home to a number
    of critical missions important to our national defense. Scott serves as
    headquarters to the Air Mobility Command and USTRANSCOM. We have a
    significant National Guard and Reserve presence and growing
    cybersecurity mission to meet the needs of 21st century threats and
    challenges. My question to the Under Secretary centers on scope and
    criteria. When you are determining the factors to label a base
    ``excess'' what would make a base ``not excessive''?
        Mr. Conger. We believe the only fair and thorough way to determine
    whether there is excess capacity within the Department is to conduct
    the analysis in BRAC using certified data that collects detailed
    information from each base across a broad array of many metrics and
    compares this information to force structure.
        As such, BRAC is a process that does not have a predetermined
    outcome such as determining that a base is ``not excessive.'' Using
    statutory selection criteria that emphasize military value and a force
    structure plan looking out 20 years, DOD must complete a comprehensive
    review before it can determine which installations should be realigned
    or closed. The essence of the comprehensive process is that each base
    is evaluated on a host of capacity and military value factors. DOD
    leadership evaluates various closure and realignment scenarios as part
    of a holistic examination of installations across the United States. It
    is this process that the list of closures which is then reviewed by an
    independent Commission that can (and has in the past) altered the list.
    Its review includes holding public hearings and visiting various sites.
    The commission's review results in a list of closures and realignments
    that are sent to the President and are subject to review by Congress.
    It is this thorough process that produces the list of installations
    that DOD will close.
        Mr. Enyart. In regards to equipment in Afghanistan, what is the
    cost to return and repair versus buying new?
        Mr. Conger. Equipment in Afghanistan that provides future military
    utility to U.S. Armed Forces will be returned to maintain readiness.
    Where equipment is excess to the Department's needs and/or the
    transportation cost to return exceeds the cost of the equipment, the
    equipment will be donated or disposed under existing authorities for
    disposition of Foreign Excess Personal Property, Foreign Military
    Sales, and Excess Defense Articles.
        Mr. Enyart. There was 24% excess capacity in 2004. How much of this
    capacity was reduced during the 2005 BRAC?
        Mr. Conger. The 2005 BRAC round focused principally on
    reconfiguring capacity to maximize war fighting capability and
    efficiency as opposed to eliminating excess capacity. BRAC 2005 only
    eliminated about 3 percent of the Department's capacity.
        Mr. Enyart. Is the drawdown of forces equal to the forces deployed
    to Iraq and Afghanistan during the timeframe of 2005-2012?
        Mr. Conger. The drawdown of forces is independent of the withdrawal
    of forces deployed to Iraq and Afghanistan. The withdrawal of forces
    deployed in Iraq and Afghanistan will have little to no impact on our
    excess infrastructure in the United States because when troops deploy
    from bases in the United States those bases are not backfilled with
    additional forces.
        The Department will still have excess infrastructure regardless of
    the return of forces from Iraq and Afghanistan. The parametric
    techniques used to analyze aggregate assessment of excess capacity in
    2004 indicated that the Department had 24 percent excess overall
    relative to the force-structure plan developed by the Joint Staff.
    Because BRAC 2005 eliminated only about three percent of the
    Department's capacity, we believe we have significant excess at the
    aggregate level today. In addition, force-structure reductions in the
    Army (from 570,000 to 490,000 Active Duty personnel), in the Marine
    Corps (from 202,000 to 182,000 Active Duty personnel), and in the Air
    Force (reduced by 500 aircrafts) subsequent to the 2004 analysis point
    to additional excess.

        Mr. Enyart. What will happen with deactivated A-10s from Europe?
        Mr. Conger and Secretary Hammack. The Air Force is deactivating the
    A-10 squadron at Spangdahlem and, after fleet management, will place
    the 20 worst A-10s from the fleet into our inactive inventory. Most of
    these aircraft will be put in Type 2000 storage at the 309th Aerospace
    Maintenance and Regeneration Group at Davis-Monthan AFB for parts
    harvesting and a handful will be used as ground trainers.
        Mr. Enyart. What will happen with deactivated A-10s from Europe?
        Mr. Natsuhara. The Navy does not manage A-10 aircraft. This
    question would be best answered by the U.S. Air Force.

        Mr. Enyart. What will happen with deactivated A-10s from Europe?
        Ms. Ferguson. The 21 A-10s stationed at Spangdahlem Air Base will
    depart no-later-than 31 May 13 to comply with the FY 13 NDAA direction
    requiring unit deactivation before the end of FY 13. All A-10s will
    transfer to the 354 Fighter Squadron at Davis-Monthan Air Force Base,
    Arizona. This transfer involves no manpower gains.