[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

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             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.]
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              QUESTIONS SUBMITTED BY MEMBERS POST HEARING

                             March 14, 2013

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                   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.

                                  
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