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



 

                         [H.A.S.C. No. 113-60] 

       RESETTING THE FORCE FOR THE FUTURE: RISKS OF SEQUESTRATION 

                               __________

                                HEARING

                               BEFORE THE

                       SUBCOMMITTEE ON READINESS

                                 OF THE

                      COMMITTEE ON ARMED SERVICES

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD

                            OCTOBER 2, 2013

                                     
              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                               ----------
                         U.S. GOVERNMENT PRINTING OFFICE 

85-324 PDF                       WASHINGTON : 2013 
-----------------------------------------------------------------------
  For sale by the Superintendent of Documents, U.S. Government Printing 
  Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800 
         DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, 
                          Washington, DC 20402-0001
                                 



                       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
                Ryan Crumpler, Professional Staff Member
               Vickie Plunkett, Professional Staff Member
                         Nicholas Rodman, Clerk



                            C O N T E N T S

                              ----------                              

                     CHRONOLOGICAL LIST OF HEARINGS
                                  2013

                                                                   Page

Hearing:

Wednesday, October 2, 2013, Resetting the Force for the Future: 
  Risks of Sequestration.........................................     1

Appendix:

Wednesday, October 2, 2013.......................................    21
                              ----------                              

                       WEDNESDAY, OCTOBER 2, 2013
       RESETTING THE FORCE FOR THE FUTURE: RISKS OF SEQUESTRATION
              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

Faulkner, LtGen William M., USMC, Deputy Commandant, 
  Installations and Logistics, U.S. Marine Corps.................     5
Mason, LTG Raymond V., USA, Deputy Chief of Staff for Logistics, 
  U.S. Army......................................................     4

                                APPENDIX

Prepared Statements:

    Faulkner, LtGen William M....................................    36
    Mason, LTG Raymond V.........................................    28
    Wittman, Hon. Robert J.......................................    25

Documents Submitted for the Record:

    [There were no Documents submitted.]

Witness Responses to Questions Asked During the Hearing:

    Mrs. Hartzler................................................    45

Questions Submitted by Members Post Hearing:

    Ms. Bordallo.................................................    51
    Mr. LoBiondo.................................................    51
    Mr. Wittman..................................................    49
       RESETTING THE FORCE FOR THE FUTURE: RISKS OF SEQUESTRATION

                              ----------                              

                  House of Representatives,
                       Committee on Armed Services,
                                 Subcommittee on Readiness,
                        Washington, DC, Wednesday, October 2, 2013.
    The subcommittee met, pursuant to call, at 2:02 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 call to order the House Armed Services 
Subcommittee on Readiness. I want to welcome all of our members 
and welcome back our distinguished panel to today's hearing 
focused on resetting the force for the future and to look at 
the risks of sequestration as it relates to that reset.
    This afternoon, we are privileged to have with us 
Lieutenant General Raymond V. Mason, Deputy Chief of Staff of 
the Army for Logistics, and Lieutenant General William M. 
Faulkner, Deputy Commandant of Installations and Logistics.
    Gentlemen, thank you so much for your service to our 
Nation. Thank you for all of your efforts and leadership during 
these challenging times. And I thank you for being here with us 
this morning as we look at--or this afternoon, I should say, as 
we look at--all this time runs together--as we look at the 
challenges that we have here before us.
    As we know, gentlemen, no one will dispute that we have the 
most capable and professional military in the world. And our 
men and women in uniform have exemplified the best America has 
to offer during the last 13 years of protracted 
counterinsurgency operations in the Middle East. Thanks to 
their tireless efforts, we are able to begin shifting our focus 
from combat operations toward resetting the force for the 
future.
    However, the challenges will not end as combat operations 
wind down in Afghanistan. Thirteen years of combat have taken 
their toll on every aspect of our military. Today's hearing 
focuses on the materiel impacts as the Army and Marine Corps 
face a staggering $11.2 million of reductions.
    We are concerned that this bill, this $11.2 million bill, 
to restore readiness to vital military hardware is going to 
create a challenge. And I believe this massive effort to 
retrograde, repair, replace, and upgrade equipment to a level 
of combat capability commensurate with the unit's future 
missions is vital to our operational readiness.
    Unfortunately, like everywhere else within the Department 
of Defense, sequestration has left its mark on these efforts, 
as well. Facing smaller and smaller budgets for the replacement 
of war-torn equipment, critical reset work has been deferred, 
and the focus has shifted more to repair than procuring newer, 
more capable systems. I am particularly concerned about how 
limited reset funding will impact our Reserve Component, who 
has and will continue to remain critical as a part of our total 
force structure.
    However, I fear that this desperately needed repair effort 
may also be in jeopardy if we continue much further down the 
road with sequestration. During my trip to Afghanistan earlier 
this year, I witnessed thousands of containers, hundreds of 
vehicles, and millions of individual items awaiting shipment 
home to units that desperately need them. All of these items 
are at risk as transportation costs continue to rise and 
budgets continue to shrink.
    At the same time the Marine Corps and the Army are working 
through these fiscal challenges, sequestration has caused 
additional uncertainty by forcing the Army to shed 72,000 
soldiers and the Marine Corps 20,000 Marines to make ends meet 
and an unknown number more the longer sequestration persists.
    Undoubtedly, this lack of certainty on the size and 
composition of the future force raises questions about what 
capabilities will be deemed enduring, what equipment should be 
reset to support those enduring requirements, and what 
resources Congress should provide to meet these requirements.
    Make no mistake about it, failure to properly and fully 
reset the force will invariably lead to placing more and more 
of our service members at risk in future conflicts. I have said 
it before and I will say it again: Increased risk means more 
men and women will die defending this Nation when we ask them 
to do so.
    This afternoon, I look forward to hearing how the Marine 
Corps and the Army plan to reset the force in this challenging 
environment and how we are managing the uncertainty and risks 
we are facing in this critical area of readiness.
    We must not let our legacy be one of overseeing the slow 
dismantlement of the greatest military the world has ever 
known. We all have a responsibility to ensure our men and women 
in uniform are given all the tools necessary for the job we 
have asked them to do.
    And I look forward to hearing from our witnesses.
    And I would now like to turn to my dear friend and ranking 
member, Madeleine Bordallo, for any remarks that she may have.
    [The prepared statement of Mr. Wittman can be found in the 
Appendix on page 25.]

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

    Ms. Bordallo. Thank you very much, Mr. Chairman. And thank 
you for holding this hearing in spite of the uncertainty that 
we are experiencing today on the Hill.
    I welcome back to both General Mason and General Faulkner, 
and I know you are both familiar with our subcommittee. And I 
thank you for your visits to my office, and it is good to see 
you again. I appreciate your testimony today and your 
leadership during these challenging times.
    I appreciate hearing your comments on reset and retrograde 
during a time of fiscal uncertainty. The only thing that is 
clear in the budget picture is that sequestration is 
detrimental to our military readiness and is completely 
unnecessary.
    Unfortunately, we meet today during a government shutdown 
that was completely avoidable. While the Affordable Care Act 
has dominated the discussion as the shutdown occurred, the 
underlying issue is really our budget situation and the impact 
of sequestration.
    Congress has the ability but not the desire to fix 
sequestration. And I continue to urge leadership to seek a 
comprehensive solution that ends sequestration once and for 
all. And I hope that we will come to a compromise in the near 
term as we discuss how to solve these budget issues.
    It is indeed unfortunate that Congress has placed the 
Department of Defense in the position that you are in today. I 
fully support having a robust military to defend our great 
Nation and our interests, but it is the responsibility of 
Congress to ensure the Defense Department has the necessary 
resources to succeed when confronted with current and emerging 
threats.
    I support ending sequestration immediately and in its 
entirety, not just piecemeal. Finding a comprehensive solution 
to sequestration will allow the Department of Defense and other 
Federal agencies to properly plan and prepare for potential 
conflicts of the future.
    Clearly, Congress is not allowing the world's greatest 
fighting force to effectively and efficiently maintain pace. We 
in Congress are the problem, sorry to say. And I ask that all 
of my colleagues put aside all of the political positioning and 
understand what is at stake here. The time for action is now.
    The discussion today regarding resetting our force given 
the real and immediate implications of sequestration is of high 
interest to this subcommittee. Thousands of U.S. assets have 
been heavily used, often well beyond their service life, 
throughout the harsh environment in the Middle East in support 
of operations in Iraq and Afghanistan.
    It is important for our subcommittee members to understand 
the challenges with returning equipment from Afghanistan to 
units at home and inducted into military depots. I am 
interested to hear your views today on how the Army and the 
Marine Corps prioritize equipment reset among many competing 
interests and units, from home-stationed units to foreign 
military sales. How are the assets that were primarily designed 
to use in Iraq and Afghanistan prioritized during reset, 
knowing our next conflict may not be fought in the same type of 
environment? What is the underlying strategy?
    Moreover, I hope our witnesses will address what impact 
sequestration will have on your current plans to reset and 
retrograde. I am particularly concerned that if we do not find 
a comprehensive solution to sequestration that it could create 
complications for retrograde of materials out of Afghanistan 
and also set back goals for reset of equipment.
    Ultimately, I do not want to see a situation where any unit 
stateside or in the territories, particularly our National 
Guard, are not equipped and ready to respond to any natural 
disaster or some other type of contingency. This would simply 
be unacceptable, given that we can solve sequestration right 
here in Congress.
    I also hope to hear about the Marine Corps process for 
reset and how you are addressing readiness issues with the III 
Marine Expeditionary Force. As we pivot to the Asia-Pacific 
region, it is more important than ever that we make the III 
Marine Expeditionary Force whole again and ensure they have the 
proper equipment to meet current and emerging requirements in 
this theater over the coming years. In terms of whether to 
repair, rebuild, or replace, how do you assess what equipment 
now being used in Afghanistan is appropriate for the challenges 
that exist in the Asia-Pacific region?
    So, again, thank you, Mr. Chairman. And I do look forward 
to our witnesses' testimony and our question and answer period. 
Thank you.
    Mr. Wittman. Madeleine, thank you very much.
    And we will now go to our witnesses.
    And, Lieutenant General Mason, we will begin with you.

 STATEMENT OF LTG RAYMOND V. MASON, USA, DEPUTY CHIEF OF STAFF 
                    FOR LOGISTICS, U.S. ARMY

    General Mason. Well, good afternoon, Chairman Wittman, 
Ranking Member Bordallo, and distinguished members of the 
subcommittee. Thank you for the opportunity to testify today.
    I submitted a longer statement for the record, but I would 
like to touch on a few subjects that are critical to Army 
retrograde and reset, which both of you spoke of in your 
opening remarks.
    After more than a decade of conflict in Iraq and 
Afghanistan, the Nation and our Army are certainly in a period 
of transition. The Army is bringing back soldiers and equipment 
while finishing operations and training Afghan forces. Our goal 
is to retrograde all nonenduring equipment out of Afghanistan 
by October 2014.
    To meet future requirements and improve readiness, the Army 
plans to retrograde approximately $17 billion worth of 
equipment that is still in Afghanistan.
    However, the 2014 retrograde timeline assumes generally 
stable conditions. For example, surface lines of 
communications, such as the Pakistan ground line of 
communication, which we call the PAKGLOC, and, to a lesser 
extent, the Northern Distribution Network, the NDN, are 
critical to meeting our timelines. And they are less expensive 
than the multimodal and direct air transportation. 
Unfortunately, the PAKGLOC and the NDN are not always viable 
and open. Additionally, other variables, including increased 
enemy activity, potential delays in Afghan elections, would 
most certainly affect our retrograde and drawdown plans.
    Once the equipment is retrograded, it must be reset to a 
required level to support units' missions and the national 
military strategy. Thanks to the support of Congress and our 
American citizens, the Army to date has invested $55 billion in 
operations and maintenance funds and $35 billion in procurement 
funds to recover from both Iraq and Afghanistan to date. That 
investment has enabled the Army to maintain operational 
readiness rates of equipment at about 90 percent for ground and 
about 75 percent in aviation. That is for the forces in 
theater, not back at home; they are much lower than that.
    To reset the necessary equipment, OCO [overseas contingency 
operations] funding must continue for 3 years after the last 
piece of equipment comes back from Afghanistan. In fiscal year 
2013, the Army had expected to reset approximately 100,000 
items in its organic industrial facilities and more than 
600,000 pieces of equipment onsite where units are stationed. 
However, fiscal year 2013 sequestration impacts caused a $1.7 
billion cut to reset, and we had to defer nearly $800 million 
of reset to future years--all immediately impacting equipment 
readiness today. In fact, as the Chief of Staff of the Army 
testified 2 weeks ago, the Army only has one brigade combat 
team that is at C1 [highest readiness rating].
    Full and predictable funding is critical to the health of 
our organic industrial base and Army readiness. We must ensure 
the organic industrial base remains effective, efficient, and 
capable of meeting Army contingency requirements.
    To help address these issues, we published our first Army 
Organic Industrial Base Strategic Plan. This plan details the 
strategy and management framework needed to ensure that our 
depots and arsenals remain viable, effective, and efficient. 
The current fiscal uncertainty could drastically impact that 
strategy.
    In conclusion, to protect our Nation's Army logistics 
capabilities and ensure that our Army's readiness is 
maintained, I encourage you to reverse sequestration and to 
ensure that the OCO accounts used for retrograde and reset are 
fully funded for 3 years after the last piece of equipment has 
left Afghanistan.
    I thank you again for your continued support of our 
soldiers and their families, and I look forward to your 
questions.
    [The prepared statement of General Mason can be found in 
the Appendix on page 28.]
    Mr. Wittman. Thank you, Lieutenant General Mason.
    And we will now go to Lieutenant General Faulkner.

     STATEMENT OF LTGEN WILLIAM M. FAULKNER, USMC, DEPUTY 
   COMMANDANT, INSTALLATIONS AND LOGISTICS, U.S. MARINE CORPS

    General Faulkner. Chairman Wittman, Ranking Member 
Bordallo, members of the committee, thank you for this 
opportunity to update this committee on the Marine Corps' 
Afghanistan equipment retrograde and reset actions.
    Your Marines take seriously our sacred oath to defend our 
Nation, our Constitution, and the American people. In 
Afghanistan today, Marines continue to support the transition 
of security and responsibility to the Afghan Government and 
people.
    As my Commandant testified to this committee about 2 weeks 
ago, Marine Corps readiness is directly linked to resources, 
and the enduring impacts of the Budget Control Act of 2011, to 
include sequestration, will force us to forfeit our long-term 
priorities to fund near-term readiness.
    In my testimony today, I would like to underscore the 
importance of our ground equipment reset strategy and its 
linkage to enduring operational readiness. Completing the full 
reset of our equipment is in line with our fidelity to the 
taxpayer, and the continued availability of overseas 
contingency operations, or OCO funds, is critical to completing 
our reset strategy.
    This strategy was built on the recognition of tightening 
budgets and the expeditious use of available OCO funds to 
achieve a properly equipped and ready force capable of 
conducting the full range of military operations. We are moving 
with a clear sense of purpose to rapidly restore equipment 
readiness in a fiscally conscientious manner, and we need to 
maintain the tempo that we currently have under way. In order 
to avoid enduring reductions to our overall operational 
readiness, we need continued OCO funding for 2 to 3 years after 
the last Marines leave Afghanistan.
    When I last appeared before this committee 6 months ago, 
the Marine Corps had recently completed its post-surge 
recovery. In the year between December 2011 and December 2012, 
the Marine Corps redeployed its 2009 surge forces and 
retrograded over 39,000 associated items of equipment.
    If you had a picture of our major forward operating base, 
Camp Bastion, at the height of our surge and one of the same 
base today, in today's picture you would see empty lots that 
were once stacked with shipping containers and equipment, you 
would see empty warehouses that were once filled with supplies 
and repair parts, and you would see vacant aircraft parking 
ramps.
    To put the effort into context, since our first Marine 
Corps units redeployed at the end of 2011, 67 percent of the 
72,000 equipment items have already been removed from our 
Marine Corps portion of the joint coalition operating area in 
Afghanistan. Additionally, of the over 42,000 total items 
retrograded to date, 60 percent of those are being inducted at 
our depot maintenance plants in Albany, Georgia, and Barstow, 
California. In total, we have completed reset actions on about 
one-third of the items returned from Afghanistan.
    Not to say that there is not hard work ahead of us. 
Tomorrow's fiscal environment will certainly impact our ability 
to complete our reset strategy, and we still have much to do.
    In fiscal year 2013, the Marine Corps was fully funded for 
reset, to include an additional $120 million in depot 
maintenance graciously provided by the Congress in H.R. 933. 
However, required maintenance conducted at our depot production 
plants was deferred as a result of the 6-day furlough of our 
civilian Marine workforce.
    It is important to point out that even seemingly nominal 
cuts compound increasing workload requirements as maintenance 
is deferred to another year. This will have a detrimental 
effect on our readiness if funding limitations extend into 
fiscal year 2014 and beyond.
    As I close, I want to point out that our readiness is 
preserved through a careful balance of high-quality people, 
well-trained units, modernized equipment, well-maintained 
installations, and a force level sufficient to accomplish our 
missions. The Marine Corps recognizes the realities of the 
fiscal constraints before us and our responsibility to ensure 
our reset strategy places the right equipment in the right 
hands at the right cost of the warfighter.
    With the continued support of Congress, the Marine Corps 
will remain to meet the Nation's next crisis in any clime or 
place. Thank you again for the opportunity to address this 
committee, and I look forward to your questions.
    [The prepared statement of General Faulkner can be found in 
the Appendix on page 36.]
    Mr. Wittman. Very good. Thank you, Lieutenant General 
Faulkner. We appreciate it.
    And, gentlemen, thanks again for your service to our Nation 
and for joining us today and for giving us that general 
overview about what the impact of reset will be in the 
conditions placed on us by the sequester.
    I wanted to get you to go a little bit further, though, in 
characterizing for both of your service branches what would the 
impact be, based on sequestration, either of curtailing or 
significantly delaying those efforts to reset?
    And then if you could tell us, which areas would be most 
challenged? Where do you see the biggest immediate impact? And 
what would be the most difficult for you to overcome? And, 
remember, that's also an element of time. So even if you were 
to get the resources but they are spread out over a longer 
period of time, you know, what does that mean for your service 
branches?
    I just wanted to get a little more of a feeling, a 
characterization about how we could tell people this would 
affect the Army and the Marine Corps.
    General Mason.
    General Mason. Yes, Chairman Wittman, I think I will start 
off with describing the workforce, because I think that is the 
place where we are taking an incredible amount of risk.
    We certainly are focused on plant equipment and 
modernization of our industrial base, but it is really the 
workforce. Based on sequestration in 2013, we can attribute 
about 2,000 employees that were lost through sequestration. 
Another 2,000 came down because of workload reduction. But we 
didn't anticipate that sequestration, so that was a huge loss 
in workforce.
    Inside of that are very technical skills. For example, at 
Corpus Christi, our aviation depot, we lost 36 master engineers 
that went off to find jobs someplace else, in the oil industry 
or wherever, because they saw this furlough in 2013 and they 
looked out into 2014 and 2015 and perhaps they predicted where 
we are at today, which is not a good thing.
    So I am very concerned about the workforce in our 
industrial base and its ability to do that.
    Secondly is the equipment piece. So we had planned to, as I 
said, execute about $4 billion worth of reset. We lost about a 
$1.7 billion in that. That equates to about 800 vehicles we 
weren't able to reset, 2,000 weapons, about 10,000 pieces of 
communication gear, 32 helicopters that we had to not do this 
year. All that got pushed into 2014, and now we are in 2014 not 
able to do that work again because of where we are at.
    So I think it is this combination of the people, which are 
the key thing--and it is difficult to grow those people and 
bring them back.
    And I would say, to conclude, we are eating our seed corn, 
we are eating our future. Those people that would want to join 
us, that would say, this is a great place to serve, I want to 
work at Anniston Army Depot, I want to work the Corpus Christi, 
they look at our situation, it is very unpredictable.
    So we have this issue of predictability and balance, and we 
have neither of those right now. And that is dramatically 
impacting our workforce and our ability to get this equipment 
back into the hands of our soldiers for whatever is required of 
the next mission for this Nation.
    Mr. Wittman. Very good.
    General Faulkner.
    General Faulkner. Yes, sir, some similarities, but let me 
give you some little bit of different numbers.
    Primary impact, similar to the Army, was really to our 
depots and to our civilian workforce, specifically at Albany, 
Georgia, and Barstow, California. And so, just as a result of 6 
days of furlough, which perhaps to the uninformed may seem 
relatively modest, 1,200 pieces of equipment we were not able 
to induct in our maintenance system. And that is stuff, again, 
that is deferred out to the right, and you just can't catch up 
on it. And so those are items such as radars, communication 
equipment, vehicles that are already destined for our operating 
forces.
    One of the things that our Commandant put in place early on 
is we published an Afghanistan equipment reset strategy in a 
playbook. So every one of these pieces of equipment that is in 
Afghanistan today, right at 24,000 of them, have a home, and 
they are part of our future. And the challenge with us now is 
that, if they don't come home on time, as we planned, our focus 
being those forward-deployed crisis response forces, they go 
without or their readiness is not as high. And that is a 
challenge for us.
    The other piece, Chairman, to get to your second piece, are 
the longer-term impacts. The longer-term impacts, quite 
frankly, is just that deferred maintenance and that readiness 
is just going to be like a tsunami over time; it is just going 
to gain.
    One of our concerns, though, is that the conscious decision 
that our Commandant has made is he is not going to take risk in 
forward-deployed crisis response forces. They are going to be 
ready. They are going to be ready to support a combatant 
commander's requirements. Where he has taken risks and going in 
with full knowledge is on our bases and stations and our 
installations. And those are the areas that are going to really 
be most impacted over a longer period of time.
    Mr. Wittman. Very good. Thank you, Lieutenant General 
Faulkner.
    I am going to go now to Ms. Bordallo.
    Ms. Bordallo. Thank you again, Mr. Chairman.
    My first question is for you, General Mason. Can you 
further discuss for the subcommittee how the Army is working to 
ensure that National Guard units back in the United States and 
territories will receive equipment that is coming back from 
Afghanistan? That is the first part of the question.
    And, further, can you elaborate on how the dual-use and 
specific homeland defense mission equipment requirements will 
be met for National Guard units back in the States and the 
territories?
    General Mason. Yes, ma'am. I personally work with the Chief 
of the Army National Guard, Bill Ingram, and the Director of 
the Army Reserve, Jeff Talley, Lieutenant General Jeff Talley, 
and we look at the requirements they have. I build that into 
our reset plan. So we have a total force policy. And the 
individual compos [components]--Active, Reserve, and National 
Guard--each get those equipment that is coming out of 
Afghanistan through our depots to those compos appropriately.
    In fact, right now, the Army, total Army, is about at 88 
percent. After we would complete all the retrograde out of 
Afghanistan, we would be at about 92 percent for equipment on 
hand, latest equipment that is being reset. That is across all 
three compos. We continue to focus on the modernization of the 
National Guard and the Reserves, as well. And that is a primary 
focus for the Secretary and the Chief of Staff.
    The dual-purpose equipment is a key issue for me in the G-
4, and I am watching that very closely. As that equipment comes 
out, we make sure we get those things that the Governors need 
to use for national emergencies or weather incidents in their 
States and territories. And so that is a high priority, to make 
sure that that equipment also--and we have been pretty 
successful with that. I think the Governors would tell you 
that. A vast majority of that equipment that was used in Iraq 
and Afghanistan, a lot of that has been returned--we still have 
more to come--back to the dual use.
    So all of those are critical to--and we have the guidance 
from the leadership of the Army to make sure that we have a 
total-force policy.
    Ms. Bordallo. Thank you. Thank you, General.
    Now, I realize that the retrograde of equipment from 
Afghanistan is going to be vastly different than the retrograde 
equipment from Iraq because of the transportation challenges--
this is for both of you--and the lack of a holding area, such 
as we had for Iraq with Kuwait. Afghanistan is simply a more 
difficult logistics challenge.
    Could either of you expand on the issues surrounding the 
Northern Distribution Network and unforeseen logistics 
challenges?
    And then another part of the question is, we know that it 
is far more expensive to transport equipment through the NDN 
and that the Pakistan ground route is a fragile relationship. 
Additionally, fuel costs continue to consume DOD [Department of 
Defense] budgets. And we have a significant amount of equipment 
still in Afghanistan, with some uncertainty about what must 
remain in the country in the absence of a bilateral security 
agreement.
    So how confident are you with the current retrograde plan 
to reduce the equipment in Afghanistan? Either one of you.
    General Mason. Yes, ma'am, I will start and then Mark.
    Ma'am, I am cautiously optimistic. Right now, we are on our 
glide slope that we had planned, but that can change overnight. 
One incident at a border, one thing that occurs could cause us 
challenges in there, so we watch it. What you just described is 
the update I get every single morning on retrograde. So let me 
address a couple of your specific questions.
    So the Northern Distribution Network, I would describe that 
as a capillary, as opposed to the Pakistan GLOC, which I would 
describe as an artery. We need them all. And one of our key 
solution sets in getting out of Afghanistan, the same thing the 
Marines used as they began to get out, is use all available 
transportation modes--ground, air, sea, whatever we can work. 
So we are using all of those multiple routes.
    So, through the NDN, we are bringing mostly supplies in. 
There's not a lot going out through the NDN. One of the 
challenges with the NDN, it is very long, as you described, 
four times longer than the PAKGLOC; more expensive in time and 
distance, obviously; many countries you have to go through, so 
all those customs issues. And it is also north of a thing 
called the Salang Tunnel. The Salang Tunnel through most of 
winter months is closed. Most of our forces are south of the 
Salang Tunnel.
    So we use it, but it is not our main route. We really want 
the PAKGLOC to be our main route, and we are getting there. We 
are about 50 percent of what is departing Afghanistan right now 
is on the Pakistan GLOC.
    But a lot of it is flying out. It flies out in two ways. 
One, it flies out of Afghanistan to a local seaport in the Gulf 
region in the Middle East, and then we put it on ships because 
it is much cheaper to go on a ship than a plane. Some things do 
fly all the way back to the United States, critical items--
weapons, things of that nature that we want to get right back--
and that's called direct air. It is the most expensive, but we 
are using that very judiciously.
    The fuel issue is a concern, and that is why I have an 
estimate for retrograde, the rest of the Army equipment that is 
in Afghanistan, which the value of that right now today is 
about $17 billion. Our estimate is, for the transportation 
cost, is $2 billion to $3 billion. The reason I have such a big 
range in there, fuel is one of those variables. If fuel costs 
continue to go up, we are going to push into the $3 billion 
range. If the PAKGLOC was to close, we could, in fact, go above 
that $3 billion range and we would have to fly more out. So 
that is why I have that variable in there.
    The BSA [bilateral security agreement], as you describe, 
the security agreement, basic security agreement, is key. And 
that allows us to work on that timeline that the President has 
established of December 2014. If things happen with that--and I 
guess I would make this final point. The retrograde is driven 
by the political environment and the training of the Afghans 
and the drawdown of our forces and the closure of bases. And 
then retrograde follows that. So it is in response to whatever 
the commander on the ground says he is doing for base closures 
and as he works through the BSA.
    Ms. Bordallo. Thank you. Thank you, General.
    And General Faulkner.
    General Faulkner. Yes, ma'am. Thanks. Just a couple things 
to add to General Mason's comment.
    You did a great job of characterizing the fragile nature of 
both the PAKGLOC and the NDN. The success that we have had to 
date, the 67 percent reduction that I commented to in my 
opening statement, was really multimodal. So that was a period 
of time when the PAKGLOC was closed and we flew that equipment 
out that General Mason described. And as you described, it is 
more expensive.
    But what I would say is that it is going to be more 
important over the course of the next 6 to 9 months that, in 
fact, we maintain every opportunity to use all three of those 
methods of retrograding equipment just because of the 
uncertainty associated with a couple of them. And that may be a 
cost that, as a Nation, we just might have to endure to meet 
the timelines and based on our larger readiness.
    The other thing I will add, ma'am, is that we recognize our 
numbers pale in comparison to the Army's. Certainly, they are 
just as important to us. But just to give you a sense, our 
equipment cost in theater right now is $1.6 billion. And, 
again, what I commented earlier, right now in theater somewhere 
around 21,000 principal end items. And so, of those, somewhere 
around 2,500 are rolling stock. And those are much smaller than 
our brothers and sisters in the Army.
    But the important last thing I will leave you with is going 
to be flexibility in getting multiple modes out. And General 
Dunford is working those in theater to deal with the 
uncertainty.
    Ms. Bordallo. Thank you. Thank you.
    I have just one final question. This is for both of you. 
Reset and retrograde have relied heavily on OCO funding. Now, 
as this funding dwindles and the Department faces significant 
cuts as a result of the Budget Control Act and sequestration, 
how will the Army and the Marine Corps complete retrograde and 
reset?
    General Faulkner. Yes, ma'am, thank you. Let me go first.
    That overseas--the contingency operations or OCO funding 
that you refer to is critical to us completing our reset. And 
if we don't continue to receive those OCO funds well into 
fiscal year 2017, then, in fact, we are going to have to take 
from our base budget, which is already insufficient to fix our 
reset.
    So where we will see the impacts is in readiness. And we 
will see the impacts in not only our forward-deployed forces 
but our ability to fight in support of a major contingency 
operation. That is one.
    The other thing I will tell you is that our equipment will 
just basically stack up at our maintenance depots. It will be 
sitting there. For example, today at Albany we have almost 
20,000 pieces of equipment that are waiting to be inducted in 
the system. So that is a problem for us. And that gets at the 
criticality of OCO funding 2 to 3 years past December of next 
year.
    Ms. Bordallo. And General Mason.
    General Mason. Yes, ma'am. Very similar to General 
Faulkner. I think, take it to a little higher level 
strategically.
    So, really, the Army has three places where we can decide 
to move money around that we are given: readiness, current 
readiness; we have modernization; and then people. And so the 
leadership, again, of the Army has decided to go to 490 by 
2015. If we do not receive OCO funds, we may have to accelerate 
that even more than planned now. He already accelerated--the 
Chief and the Secretary have already accelerated from 2017 to 
2015. We had originally planned to go to 490 at 2017. We have 
pulled that left to 2015 just because of the discussion we are 
having today with sequestration.
    So we would have to go to the base. And we would go again 
into readiness, because that is the money that is immediately 
available. It takes you a while to get savings with people. You 
have to treat them right, have them come out of the Army 
appropriately, not give them pink slips and give them 90 days 
to get out. That is not a good way to treat people.
    And then modernization, which is a little deeper and longer 
dollars, but we would begin to eat away at our modernization, 
which I would call an insurance policy for the future. It 
allows us to keep a technical overmatch to any potential enemy. 
If we don't receive OCO, we will begin to eat modernization 
even more than it is now.
    We are risking the future, we are risking the now, and we 
are not taking care of our people. So it is a trifecta of a bad 
situation if we don't receive the OCO dollars. We must go to 
the base in that kind of a construct.
    Ms. Bordallo. Thank you. Thank you very much.
    And I yield back, Mr. Chairman.
    Mr. Wittman. Thank you, Ms. Bordallo.
    We will now go to Mrs. Hartzler.
    Mrs. Hartzler. Thank you, Mr. Chairman.
    Thank you, gentlemen.
    Madam Bordallo asked some of the same questions along those 
lines that I was wanting to talk about, but I would like to go 
a little further.
    When you said that 2 to 3 years of OCO funding would be 
needed when you come back, could you kind of explain about 
that? So it is overseas contingency fund, but yet that would be 
the pool of money you would use basically for the reset, is 
what I am hearing, right, to do the maintenance and to----
    General Mason. Yes, ma'am, that is exactly right. It is the 
maintenance dollars, both OMA [Operation and Maintenance, Army] 
dollars in the depots and at unit level, and it is also 
procurement dollars that we buy for battle losses. We are 
losing equipment on the battlefield. For example, to date, 
between Iraq and Afghanistan, we have lost over 2,500 vehicles, 
combat-damaged, and almost 3,000 off the books, completely 
damaged. Helicopters, we repaired about 130 helicopters. We 
have lost 230 helicopters--gone. They were not reparable. So 
this OCO dollars goes to that.
    We will continue to take battle damage over the next year. 
So part of the dollars of OCO is to replace those battle 
damages, helicopters and ground vehicles and other equipment 
such as that, and then to do the reset dollars both in the 
depots and at home station. We do some work at home station--
weapons, radios, things of that nature.
    Mrs. Hartzler. Yes.
    General Faulkner. The only thing I would add, ma'am, is 
this is in addition to the maintenance on the rest of our 
equipment. And so this is above and beyond. So for the Marine 
Corps, the rest of our equipment set, which is really 95 
percent, in general, we are still doing that maintenance. And 
that is what we are relying on our baseline budget to do. So it 
is additive.
    But the fact of the matter is that, of the equipment that 
we have in Afghanistan, over 50 percent of it we brought 
directly from Iraq. We didn't bring it back to the United 
States and run it through our depots. So, to the chairman's 
opening comment, some of that equipment has either been in 
either Iraq or Afghanistan for going on 12 or 13 years. So to 
say it has been rode hard is an understatement.
    Mrs. Hartzler. Do you have those numbers of how much 
equipment needs to be replaced, that, you know, battle-
damaged----
    General Faulkner. Yes, ma'am.
    Mrs. Hartzler. You shared a little bit, General, that--you 
said, of the helicopters, 130 need to be repaired, 230 are 
totally gone. Do you have a breakdown that you could get me--I 
think that would be very interesting--of how many, you know, 
are totally destroyed and we have to replace?
    General Faulkner. Absolutely, ma'am. We can get you that 
down to the individual end item. We can get that.
    Mrs. Hartzler. Okay. Thank you. I would appreciate that.
    General Mason. Yes, ma'am, same here.
    [The information referred to can be found in the Appendix 
on page 45.]
    General Mason. Let me just clarify a little bit the 
description I gave to you. Those numbers I gave to you, those 
were battle losses on the battlefield and pieces of equipment 
that were completely gone and out of the space.
    We continue to pull maintenance just from wear and tear on 
the--that come out of Afghanistan, as well. So, literally, we 
have pulled maintenance on hundreds of helicopters. Those are 
just the ones that took significant battle damage and the 230-
plus that are gone now, that were totally gone.
    So there is a whole level of maintenance above that that 
takes care of desert damage, you know, from that kind of thing, 
normal wear and tear.
    Our equipment, as General Faulkner described it, is used at 
a much higher level, probably five to six times higher, each 
day in Afghanistan than we would back at home station. And then 
our aviation fleet, particularly--high altitudes, high 
temperatures, conducting combat missions, they do a different 
profile, carrying heavy loads. So our equipment is taking a 
significant--as General Faulkner says, ``rode hard and put up 
wet'' is pretty accurate.
    Mrs. Hartzler. Well, I have the 1-135th over there right 
now, the Apache helicopters. And I talked to them last week via 
telephone, and they are doing 24/7 operations out there. And so 
I know what you mean about that.
    General, did you want to add something?
    General Faulkner. Yes, ma'am, just one last comment.
    We are very sensitive to not spending one extra dollar of 
OCO money that we don't have to. And so every piece of 
equipment that we are bringing back, we have actually done a 
business case analysis to make sure that it is in our best 
economical interest.
    For example, if a water buffalo, a big container that holds 
400 gallons of water, if, in fact we are going to incur more 
costs associated with the transport of bringing it back, we are 
not going to bring it home. We are going to try to give it to 
another nation through foreign military sales or through excess 
defense articles or something like that. We are just not going 
to incur the cost, because there is no reason to add to the OCO 
requirement.
    Mrs. Hartzler. Sure. I appreciate that, looking at that 
from a business sense.
    Just quickly, last question: How much equipment will we be 
leaving there and transferring to Afghanistan? Is that 
dependent on the agreement that we come up with them? Or how 
will that be determined?
    General Mason. Yes, ma'am. Let me address that.
    Right now, we have about $24 billion worth of Army 
equipment on the ground in Afghanistan. We plan to bring back 
$17 billion.
    And I would add that that is our most modern equipment. It 
is the latest equipment we have fielded. It is our up-armored 
fleet, it is our Strykers, it is our helicopters with all the 
latest modernization in it. So it is the equipment we really 
need back. It is our best and greatest stuff that we have used. 
It needs to be reset.
    So the $7 billion we are going to divest, a lot of that is 
not vehicles and weapons. A lot of it is equipment we use to 
run base operations. It is buildings, it is shower units, it is 
mobile dining facilities, it is some commercial equipment. So 
there is a lot of that that we will donate to the Afghanis 
through a process that we are doing, similar to what we did in 
Iraq.
    Some equipment we will do our best to do what is called 
excess defense articles, to countries in the region that we are 
working very closely with CENTCOM [U.S. Central Command] on. So 
there is an opportunity there for some partnership with local 
countries. Not an easy thing do, but we are working our way 
through it.
    So there is a variety of different ways--through donation, 
through sales--to divest the $7 billion. We look at it all the 
time.
    And that $17 billion, ma'am--one last point--is built on 
the 490 force structure of the Army, the Active Component. If 
that changes, we will re-look at the numbers again.
    And, as General Faulkner said, I would reiterate that, we 
are not going to bring back one thing that we don't need. This 
is equipment we need, and we watch it very carefully so we are 
being judicious with the OCO dollars we are given.
    Mrs. Hartzler. Thank you, gentlemen.
    Mr. Wittman. Very good. Thank you, Ms. Hartzler.
    And now we will go to Mr. Loebsack.
    Mr. Loebsack. Thank you, Mr. Chair.
    Thanks, both of you, for your service and for being here 
today. This is an important topic, there is no question.
    You probably know I am the co-chair of the House Depot, 
Arsenal, Ammunition Plant, and Industrial Facilities Caucus, 
along with Walter Jones, my good friend from North Carolina. 
And we have had a lot of meetings, multiple meetings, to 
discuss some of these specific issues over the course of this 
particular Congress, as well as our overall concern about the 
health of the organic base going forward.
    And I am very proud to represent the Rock Island Arsenal, 
too. I think you are very aware that we have the Joint 
Manufacturing Technology Center there, and also we have the 
Army Sustainment Command and other aspects of logistics located 
there at the Rock Island Arsenal.
    I have been a firm believer all along in the importance of 
the industrial base, especially maintaining the base, organic 
industrial base, as much as we can in the event of another 
contingency. And I know that, you know, we are talking about a 
lot of reductions in force and other things going forward, but 
we have obviously got to keep our eye on the ball, we have to 
be prepared in the event that we do have another contingency. 
And I know you two agree with that; all of us on this panel do. 
We just have to make sure that our warfighter has what he or 
she needs in the event that we have another contingency.
    But I don't think anybody asked you yet today--I mean, we 
are now in the middle of the second day of a shutdown, and it 
may be too early for you folks to give us any kind of an 
assessment of what the shutdown means for the issues that we 
are talking about today. But do your best, if you can give us 
some indication of what this shutdown means right now in 
realtime for what you folks are doing.
    General Mason. Yes, sir.
    First off, I would say, as you recall, when the Joint 
Chiefs of Staff were up here several weeks ago, they described 
where we were at at that time with 2013 going into 2014, 2015, 
and it was pretty gloomy. And they talked about the readiness 
of our force and our ability to meet another contingency around 
the world, that was at serious risk.
    So I would say that is where we started 2014 at. And, of 
course, coming right into 2014, we have a government shutdown. 
So, certainly, readiness isn't getting better. In fact, I would 
say it is eroding, and the longer this goes, the more it will 
erode.
    We are focused on the forces that are in combat today. So 
we are taking risk, just as my brother, General Faulkner, said, 
in other places to make sure that our forces that are in harm's 
way this very evening have got what they need. And we will 
continue to do that. As well as Korea; that is the other place 
that we focus us on. So those two are where we are putting our 
resources, and taking risks generally everywhere else.
    If you would bear with me for one moment, I think I would 
just tell you a story that occurred yesterday. So at 1100 
yesterday, 1100 hours yesterday, I brought my civilian 
workforce in, and I looked them in the eye, all 236 of them, 
and I told them I didn't have good news, I had to send them all 
home without pay. And, worse than that, I didn't know when I 
would be able to bring them back.
    And I can imagine the scene as they went home and told 
their husband and wife and their children that they were 
basically furloughed, laid off, and didn't know when they would 
go back to work again. And would they be able to make rent and 
mortgage and buy groceries and pay for the college fund? And to 
hear their children saying, ``But, Dad, didn't''--or Mom--
``didn't just last month the same thing happen to you? I didn't 
think it was going to happen now. You told me we were going to 
be okay.'' So this compounding of the furlough from last year 
and now this issue.
    So when I send soldiers into combat, that is a difficult 
thing to do, but at least I know when I send a soldier into 
combat I am giving them the fuel and the ammunition and the 
weapons they need. I feel like I have abandoned my workforce. 
And that is not a good place to be. And so, in my career, I 
have really never faced something like this, so this is very 
difficult. And even though it is only day 2, that is where I am 
coming emotionally.
    One other data point for you on an impact. We had to close 
all of our commissaries in the continental United States. 
Soldiers and their families get about a 30 percent savings from 
the commissaries. They will not get that savings now until the 
commissaries are back open. So that is 30 percent out of their 
pay this month when they go buy food and necessities for their 
family.
    Mr. Loebsack. Something people don't even think about.
    General Mason. That is right, sir.
    Mr. Loebsack. I appreciate that, General.
    General Mason. We were able to keep the commissaries 
overseas going because they just don't have a lot of options, 
and so we had to take risks back here in the continental United 
States.
    Mr. Loebsack. Thank you.
    General Mason. They have other options. But that is a--you 
know, for our soldiers and their families, it is very 
difficult.
    Mr. Loebsack. General Faulkner, I will be talking to my 
Marine children soon enough about this, but I would like to 
hear what you have to say about this.
    General Faulkner. Yes, sir. Words like ``disruptive'' and 
``unfortunate'' don't even begin to address the impact of this 
shutdown on our Marine civilians. And I think more descriptive 
words, such as ``disrespectful,'' are more appropriate.
    And so the same thing that General Mason talked about, 
these are--these are loyal patriots. The only difference is 
they don't wear the cloth. But many of them have been serving 
the Marine Corps longer than I have. And so, to treat them like 
this, send them home, sends a pretty--just a poor signal in 
terms of how much we value what they have given to our country. 
And so that is really disconcerting.
    I did the same thing that General Mason did. And I will 
tell you that I had some Senior Executive Service members that 
have enough time to retire, and they may just do that. And so 
my concern is, especially as this thing becomes even more 
protracted, we are going to lose that expertise.
    And for the Marine Corps, we are a pretty frugal service. 
We don't have the depth to plug a senior Marine and a general 
officer to fill that. So we will fill that. We won't see it 
immediately in readiness, but we will see it over the course of 
time.
    Mr. Loebsack. All the more reason why we had damn well 
better figure out what we are going to do about this shutdown 
here on Capitol Hill.
    Thank you very much. Thanks to both of you.
    And thank you, Mr. Chair.
    Mr. Wittman. Thank you, Mr. Loebsack.
    We will now go to Mr. Enyart.
    Mr. Enyart. I yield my time to Ms. Bordallo.
    Mr. Wittman. Okay.
    Any questions, Ms. Bordallo?
    Mr. Enyart. I am yielding my time to you.
    Ms. Bordallo. You go ahead. Thank you.
    Mr. Enyart. Gentlemen, can you give me an idea--Mr. 
Loebsack questioned you regarding the impact of the current 
furloughs on the morale in your force, in your civilian 
workforce. But can you give me an idea of the number of 
civilian employees as compared to military employees in your 
respective logistics branches?
    General Mason. Well, I will start just with the 
headquarters, you know, the G-4 of the Army. Three-quarters of 
my workforce is civilian. Great teammates, as General Faulkner 
mentioned, many of them with 40 years of service. So that is 
generally--and most of our headquarters, Army Materiel Command, 
Forces Command that I have served at, TRADOC [U.S. Army 
Training and Doctrine Command], they are significantly civilian 
employees there. They are our teammates.
    Now, when you get out into the operational Army, obviously, 
those are soldiers. But these institutional Army, what we call 
the generating Army, that really is the base that allows these 
operational forces to train, deploy, be supported in combat, 
that pushes them forward, that is significantly civilian 
workforce.
    And so they are a key part of the team. We couldn't survive 
without them. I certainly couldn't, as the G-4 of the Army. My 
deputy is Kathy Miller, a magnificent civilian teammate, and I 
had to send her home, as an SES. I had to send all my SESes 
[Senior Executive Service] home. I have five of those.
    So within the Department of the Army and the other 
services, I am sure it is very similar. We depend on our 
civilian teammates. They are many times the continuity. They 
have this depth of knowledge. And so that skill set they have 
is critical.
    And, right now, what we are doing is the uniformed forces 
are coming to work every day, which is about, again, about a 
quarter of my total workforce, and we are focusing on 
supporting the troops down range. And about everything else we 
just can't do right now.
    Mr. Enyart. General Faulkner.
    General Faulkner. Sir, I would tell you that our number, 
our furlough number, in the Marine Corps is probably somewhere 
around 10,000.
    We were fortunate in that several of them are excepted. 
That means there are exemptions for life, security, and other 
key factors that they--things that they provide at our bases 
and stations.
    But it is a moving target. It is very unfortunate. And as I 
talked about earlier, I just think that the impacts are 
really--we are going to have a lot of people that are going to 
walk, because there are other opportunities out there, if they 
are disrespected like this.
    Mr. Enyart. General Mason, about half of the manpower of 
the Army is contained in the Army Reserve and in the Army 
National Guard. And the bulk of the full-time force, the people 
who make sure the Guard and Reserves get paid, get trained, do 
all of the administrative work, the bulk of those people are 
dual-service technicians. That is, they are civil service 
employees during the week and wear a uniform on the weekend for 
drill.
    Are these furloughs adversely impacting those folks on the 
logistics end as well as the combat power end?
    General Mason. Yes, they are.
    Sir, as you described, the Reserve and National Guard makes 
up about 51 percent of the force and the AAC [Army Active 
Component] is about 49 percent of the force, that mix. And I 
will tell you, in the logistics community, which I grew up in, 
about 85 percent of our capability resides in the Reserve and 
National Guard. So you can see how critical they are to an 
ability to conduct any combat operation, and early on.
    So, yes. In fact, both the Chief of the Army and the 
National Guard and the Chief of the Army Reserve were both 
describing this morning the impacts. They were having to cancel 
training, send soldiers home, just tell them to stand by. And 
so what was going on at the arsenal--at the Reserve training 
centers and the National Guard armories all had to be put on 
hold because they are not getting paid. So, yes, it is 
impacting them immediately.
    Mr. Enyart. General Faulkner, is there a similar proportion 
in the Marine Corps Reserve? I am not as familiar with that as 
I am the Army Reserve and the National Guard.
    General Faulkner. No, sir, a little different. Certainly, 
they are part of our total force, so it is impactful. But I 
wouldn't--a little different than the Army in that regard.
    Mr. Enyart. I yield back.
    Mr. Wittman. Thank you, Mr. Enyart.
    We will now go to the gentleman from Connecticut, Mr. 
Courtney.
    Mr. Courtney. Thank you, Mr. Chairman. And, again, 
actually, just briefly, and then I want to yield to Mr. 
Loebsack.
    The military technician issue, which I think all of us who 
have Guard, you know, units and installations in our districts, 
is just, you know, a huge outrage in terms of, you know, who is 
being sent home. I mean, it is all outrageous, but in that 
particular area it is just completely almost incoherent, you 
know, that that is the impact, although that is, by law, the 
impact.
    And we are going to be voting soon on another one of these 
piecemeal measures, which we have actually analyzed with a 
microscope to see whether or not it really solves that problem, 
and unfortunately it does not. It only is aimed at funding 
drilling activities, you know, by the Guard.
    And it really shows why we just need a comprehensive CR 
[continuing resolution], clean, get the government open again. 
Because you are just going to constantly be squeezing a 
balloon, in terms of trying to sort of fixing this thing bit by 
bit. The government is too big to do that in any kind of 
reasonable scope of time.
    So, in any case, I want to now yield the balance of my time 
to my friend from Iowa, Mr. Loebsack.
    Mr. Loebsack. Thank you, Congressman Courtney.
    Very quickly, General Mason, as you know, the Army Organic 
Industrial Base Strategic Plan was released last December, a 
high-level plan to support our depots and our arsenals. It kind 
of fits in with some of the other things that we have already 
been talking about, certainly in terms of the workforce.
    Can you provide kind of an update, if you will, on the 
implementation of that strategy, provide some detail about what 
efforts are being undertaken to ensure that our arsenals and 
depots have the workload necessary to provide an effective and 
timely response to warfighter needs?
    I know it fits in somewhat with the furlough issue, but--
this is all one big ball of wax, in some ways. But can you 
comment on that plan and its implementation?
    General Mason. Yes, sir.
    If there is any good news here, it is that we do have a 
strategic umbrella plan that can help us deal with some of this 
uncertainty and unpredictability. It is not going to solve it, 
but at least we have a roadmap. And that is helping our arsenal 
commanders and our depot commanders work their way through it.
    As you know, it has four pillars to it. And it is really 
about modernization, it is capacity, it is the workforce, and 
also the capital investment piece, that fourth piece. So that 
allows us to plan.
    I chair the depot corporate board. General McQuistion, the 
Deputy AMC [Army Materiel Command], and I co-host that with a 
host of other people. And we work through the metrics of each 
one of our arsenals and depots, the health of it, what the 
workforce looks like, what our investments--all those things 
that are in the Organic Industrial Base Strategic Plan. It also 
allows us to focus on comparative advantages at different 
locations to make sure we are not having redundant 
capabilities. And so that is important, as well.
    And you know the work we are doing at Rock Island, 
partnering. We have public-private partnerships. And then, just 
recently, we did some work with the Defense Logistics Agency 
with some of their back orders.
    Mr. Loebsack. Right.
    General Mason. And so there is a great opportunity there, 
so partnering with the other services, with Defense Logistics 
Agency, with firms and corporations in the Quad City areas.
    So those are all abilities to spread our work out and 
reduce down our rates so we can be competitive in the 
marketplace. And one of my biggest concerns is, if we are not, 
our rates will continue to go up, and we will become not the 
choice for our customers, they will want to go somewhere else. 
And so that is what that strategic plan is really focused on, 
keeping our rates competitively so we can be in the marketplace 
and provide a great product. And Rock Island does that.
    But the workforce, as I started off with in the beginning 
of this testimony, is where I think our biggest risk is, and we 
are really watching that. And I know General Via spends about 
every waking hour focused on the morale of that team and skill 
sets.
    Mr. Loebsack. Because, ultimately, when we have to rely on 
those folks in the event of another contingency, we have to 
make it as cost-effective as possible to get that organic base 
back up and working and providing the troops, you know, with 
what they need.
    Thank you very much.
    Thank you, Mr. Courtney, for yielding to me. And I will 
yield back. Although I see he is leaving, so I will have to 
yield to the Chair, probably. Thank you.
    Mr. Wittman. Thank you, Mr. Loebsack. We appreciate it.
    There are no more questions from the committee. Lieutenant 
General Mason, Lieutenant General Faulkner, thank you so much 
for joining us today. Thanks for your commitment to find a path 
through this very challenging time. We have a commitment back 
to you that we will do the same, working here to make sure that 
we provide for what we know is the critical aspects of what 
this Nation's needs are as it relates to readiness, and, as you 
pointed out, it is our people. And we want to make sure we are 
keeping that first and foremost in our mind.
    So, with all the deliberations we have, both today and the 
months to come, whether it is concerning funding the government 
or concerning the sequestration, we keep in mind your thoughts 
and comments today as to how it affects our Marines and how it 
affects our Army, as well as the other service branches.
    And we thank you for your service to our Nation. And we 
will make sure that we keep in the forefront of our minds the 
great folks that work for you and do a great job for our 
Nation.
    And, with that, our subcommittee is hereby adjourned.
    [Whereupon, at 2:58 p.m., the subcommittee was adjourned.]
      
=======================================================================
 
                            A P P E N D I X

                            October 2, 2013

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

              PREPARED STATEMENTS SUBMITTED FOR THE RECORD

                            October 2, 2013

=======================================================================
     
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

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

              WITNESS RESPONSES TO QUESTIONS ASKED DURING

                              THE HEARING

                            October 2, 2013

=======================================================================
      
           RESPONSES TO QUESTIONS SUBMITTED BY MRS. HARTZLER

    General Mason. Ma'am that number represents the total aircraft we 
have lost through attrition due to combat and training losses from 2002 
to January of this year. We lost the majority of those attritted 
aircraft due to combat losses. We have been able to officially classify 
the loss of 59 AH-64A/D Apache; 47 UH-60 Black Hawk; 44 CH/MH-47 
Chinook; and 51 OH-58D Kiowa Warrior due to operations in Iraq and 
Afghanistan or during pre/post-deployment training. Since Fiscal Year 
2005, the Army has received funding to replace 190 of these families of 
combat loss aircraft. Once the Army makes the formal determination that 
an aircraft is a combat loss, it can take three to five years to 
receive a replacement aircraft back in the Army inventory. [See page 
13.]
    General Faulkner. Quantifying Marine Corps procurement requirements 
to replace equipment lost in combat in OEF:
    Ground equipment: A significant amount of the Marine Corps OEF 
equipment set has sustained battle damage or has simply been worn-out 
through years of hard use in a combat environment to the point that it 
is no longer possible or cost effective to repair. In support of 
retrograde and re-deployment, we continue to conduct technical 
inspections on equipment in Afghanistan to determine if repair is 
possible and/or economical. Additionally, we still have equipment 
supporting operations that will likely require replacement due to 
repair costs nearly equaling or exceeding procurement cost. Actions to 
identify equipment requiring replacement are continuous. We have more 
than 1,500 equipment items (procurement cost of $24M) turned-in by our 
OEF units to date that require replacement. Based on planning factors 
in our Reset strategy for battle damage and wear rates, we estimate 
more than 3,000 additional items (estimated procurement cost of $65M) 
will require replacement. Ground equipment the Marine Corps is 
projected to replace include communications equipment, generators, 
logistics vehicle systems (heavy trucks), small arms and mortars. 
Aircraft: All aircraft undergo scheduled depot maintenance in order to 
retain air worthiness. For the duration of the war, aviation assets in 
theater have been continuously rotated back to depot maintenance 
centers in the U.S. for scheduled maintenance. Replacements have been 
procured for aircraft losses in OEF from 2001 to 2013, with the 
exception of the following: AV-8B and CH-53D aircraft lost in 2012 have 
not been replaced do to no replacements being available (the AV-8B 
production line is closed due to transition to the F-35B, and the CH-
53D production line is closed due to transition to CH-53E and MV-22B). 
The following are USMC aircraft losses in support of OEF:
    UH-1N, Huey 2 (Utility Helicopter)
    CH-46E, Sea Knight 2 (Utility Helicopter)
    CH-53D, Super Stallion 1 (Utility Helicopter)
    CH-53E, Super Stallion 1 (Cargo Helicopter)
    AH-1W, Cobra 5 (Attack Helicopter)
    KC-130R, Hercules 1 (Cargo Transport)
    F-18C, Hornet 1 (Attack Aircraft)
    AV8-B, Harrier 7 (Attack Aircraft)
    RQ-7B, Shadow 1 (Unmanned Aerial Vehicle)
    K-Max 1 (Unmanned Cargo Helicopter)
    [See page 13.]
?

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


              QUESTIONS SUBMITTED BY MEMBERS POST HEARING

                            October 2, 2013

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

      
      

                   QUESTIONS SUBMITTED BY MR. WITTMAN

    Mr. Wittman. There has been a lot of discussion about the impacts 
to the industrial base, both commercial and organic, caused by 
sequestration. How would you describe the current state of the 
industrial base?
    General Mason. Both the commercial and organic components of the 
Army's Industrial Base remain viable elements in the production and 
repairs of the Army's equipment, while adjusting to a new environment 
of constrained resources and reduced demand. The decrease in demand has 
also resulted in excess capacity within the Army Organic Industrial 
Base (AOIB). The current fiscal environment resulted in a loss of 
critical skill sets, loss of suppliers at all tiers, and an increase in 
the number of single points of failure in the supply chain that 
supports Army logistics and AOIB operations.
    The commercial defense industry is reshaping itself to respond to 
significant changes in military missions and requirements. Major 
defense firms are responding by reducing excess capacity, streamlining 
processes, and revamping supplier relationships. These changes may have 
negative impacts on certain suppliers within the United States. The 
Army continues to work with the Office of the Secretary of Defense on 
the Sector by Sector-Tier by Tier analysis to evaluate impacts on all 
Defense Industrial Base sectors.
    The Army is focused on establishing the right balance within the 
Commercial and Organic Industrial Base to ensure that required skill 
sets are sustained and sufficient capacity is preserved in times of 
peace, along with the ability to surge during times of war and other 
emergency operations. The AOIB is developing business processes and 
policies to better align future workload to Centers of Industrial and 
Technical Excellence and effectively leverage Public Private 
Partnerships, modernize facilities to preserve needed capabilities in 
the AOIB, maximize support to Joint Agency and Service customers, 
increase efficiencies to reduce costs, and establish a framework to 
assess risk across the AOIB.
    Mr. Wittman. If resources become more limited, how will you 
prioritize reset funds between the Active and Reserve Components?
    General Mason. The Army has established a very deliberate 
Retrograde, Reset, and Redistribution (R3) process to prioritize Reset 
funds and restore readiness. The process identifies retrograde 
priorities to assist Army Central (ARCENT) in retrograde planning, 
synchronizes retrograde of equipment out of theater with its repair, 
and subsequent redistribution to support training and equipment 
readiness Army Force Generation requirements. Equipment is returned to 
the Force in accordance with the priority established by the Deputy 
Chief of Staff, G3 Dynamic Army Priority List which supports the next 
to deploy formation regardless of whether it is active or reserve. The 
intent is to ensure that those that deploy regardless of component have 
the most capable and reliable equipment in support of our soldiers and 
the Army mission success.
    Mr. Wittman. How have force structure reductions and composition 
changes impacted your reset plans? What respective end strengths are 
you using as planning factors? How can you be sure your reset plans 
meet the needs of the Army/USMC of the future?
    General Mason. Force structure reductions and composition changes 
have not significantly impacted our current Reset plans. Current end 
strength planning guidance requires the use of a 490K planning factor 
for the active force. We use end strength guidance as part of the 
Retrograde, Reset and Redistribution (R3) process to determine the 
equipment that will be reset to fill shortages. Based on this planning 
assumption we are adding a 3rd maneuver Battalion to each of the 
remaining Brigade Combat Teams (BCTs); eliminating only BCT 
headquarters. Consequently, the density of major end items is not 
significantly affected by this force structure change.
    The Army assesses Reset requirement annually and adjusts those 
requirements in concert with future force structure needs of the Army.
    Mr. Wittman. General Mason, how would recent plans to add an 
additional maneuver battalion to certain brigade combat teams impact 
your reset plans?
    General Mason. The addition of a 3rd maneuver battalion to a 
Brigade Combat Team (BCT) will not significantly impact our current 
Reset plans. The proposed active component force structure changes to 
490k primarily affect a small number of equipment assigned to a BCT 
headquarters. The density of critical warfighting equipment remains 
essentially unchanged. Consequently, BCT Battalion equipment currently 
deployed will still require Reset.
    Mr. Wittman. How important are the HASC-provided increases in the 
FY14 reset accounts to your service? What are the impacts if that 
increase is not realized?
    General Mason. The Army supports the FY14 President's Budget 
request. The addition of HASC provided increases help mitigate the 
deferred maintenance bill caused by sequestration. In FY13 we deferred 
$716M of depot an field-level equipment Reset, postponing the Reset of 
nearly 700 vehicles, almost 2,000 weapons, over 10,000 pieces of 
communications equipment, Army prepositioned stocks, and numerous 
Soldier equipment and clothing items.
    Mr. Wittman. There has been a lot of discussion about the impacts 
to the industrial base, both commercial and organic, caused by 
sequestration. How would you describe the current state of the 
industrial base?
    General Faulkner. Sequestration has had, and will continue to have, 
a deleterious impact on our Marine Corps industrial base. Under 
Secretary Hale testified in March 2013 that sequestration disrupted as 
many as 2,500 investment programs--driving up unit costs at the very 
time the Department is trying to hold them down. The persistence of 
sequestration will cause additional cost increases, schedule delays and 
adverse effects on our piece of the larger defense industrial base.
    The Marine Corps relies on the non-Department of Defense base for 
much of the research, development, testing and evaluation (RDT&E) that 
nets us our advanced technology and systems. Sequestration is placing 
pressure on commercial industry's ability to maintain expertise in 
critical technologies and core competencies, as well as its ability to 
avoid contraction, which could lead to less cost-effective solutions in 
support of our warfighting capability. The small businesses the Marine 
Corps relies on, either as prime or sub-prime partners, are hard-
pressed to absorb delays in receipt of contract awards. In order to 
stay in business, they will need timely and predictable contract award 
actions.
    At Marine Corps Logistics Command (MCLC), our artisans perform 
repairs on the full spectrum of Marine Corps equipment. The MCLC 
workforce consists of skilled and seasoned artisans not found in 
commercial industry near our production plants. Many of these artisans 
require highly specialized, technical skill sets and certifications 
that are low-density in commercial industry and take years to develop. 
Examples include specialized metals and coatings workers, electro-optic 
workers, and engineers capable of design and fabrication of parts for 
our legacy systems that are no longer manufactured. If the Marine Corps 
is forced to make precipitous cuts to the MCLC workforce, it would take 
time to regrow the workforce and requisite skill sets, putting at risk 
our capability and capacity to surge in response to unforeseen 
contingencies.
    Mr. Wittman. If resources become more limited, how will you 
prioritize reset funds between the Active and Reserve Components?
    General Faulkner. Reset funds are not prioritized between Active 
and Reserve Components. As a matter of course and based on well-
established DOD OCO funding criteria, the Marine Corps annually 
requests OCO funds for projected war related expenses. The OCO funds 
provided by Congress support equipment maintenance on OEF equipment or 
new procurement to replace OEF combat losses. Once repairs are made or 
new procurement is received in the inventory, equipment is distributed 
to the Active and Reserve Components in accordance with the 
Commandant's equipping priorities.
    Mr. Wittman. How have force structure reductions and composition 
changes impacted your reset plans? What respective end strengths are 
you using as planning factors? How can you be sure your reset plans 
meet the needs of the Army/USMC of the future?
    General Faulkner. The Deputy Commandant for Combat Development and 
Integration (CD&I) Department, determines the equipment requirements 
for our future force and registers those requirements as the Approved 
Acquisition Objective (AAO) within the Total Force Structure Management 
System (TFSMS). The Marine Corps Strategic Ground Equipment Reset 
Strategy approved by the Commandant on 1 Jan, 2012 was based on the 
future force of 186K. As those requirements change, the accompanying FY 
17 Strategic Ground Equipment Playbook also changes and provides the 
operating forces and supporting establishment with detailed overview of 
revised Marine Corps requirements and disposition plans for equipment 
returning from Afghanistan. Equipment requirements are reviewed semi-
annually by our Systems Command Program Managers and Depot Maintenance 
planners to ensure our planning efforts are consistent with the future 
direction of the Marine Corps.
    Approved changes to force structure will also generate appropriate 
changes to associated equipment requirements. Those equipment changes 
will be reflected in TFSMS and accounted for in the annual review 
processes mentioned above. This continuous review and revalidation 
process ensures our reset plans meet our future equipment requirements.
    Mr. Wittman. How important are the HASC-provided increases in the 
FY14 reset accounts to your service? What are the impacts if that 
increase is not realized?
    General Faulkner. While the Marine Corps is grateful for Congress' 
continued support to reset Marine Corps ground equipment, additional 
funds for reset in FY 2014 would be difficult to execute in that our 
requested FY14 funding was carefully calculated based on anticipated 
types and amounts of planned equipment returning from Afghanistan. In 
FY13, the Marine Corps executed more than $620 million for depot 
maintenance, including $455 million for reset. The FY14 President's 
budget request for depot maintenance is $811 million, including $570 
million for reset. This request reflects the anticipated reset 
requirement for FY14.
                                 ______
                                 
                   QUESTION SUBMITTED BY MS. BORDALLO
    Ms. Bordallo. Our lease to utilize the transit center at Manas as 
part of the Northern Distribution Network is slated to end in 2014. I 
understand from your testimony that the PAK-GLOC ground route is 
preferable but any closure of the NDN would slow our retrograde effort. 
To that end, are we looking at possibilities of using air centers in 
Azerbaijian? Azerbaijian is an ally and I understand that they have 
expressed an interest in providing support to our retrograde efforts.
    General Mason. Yes, we are currently using Baku, Azerbaijan to 
support our retrograde efforts. We have used Baku, Azerbaijan, as a 
multi-modal site for retrograde of non-critical/non-sensitive cargo out 
of Afghanistan since completion of Proofs of Principle in May 2013. The 
U.S. Transportation Command route allocation guidance dictates the 
minimum of 40 pieces of Rolling Stock (RS) transit Baku per month via 
the commercial multi-modal option and 36 pieces of RS transit Baku per 
month via the hybrid multi-modal option (military organic airlift and 
commercial surface lift). In addition, we plan to transition from Manas 
to a new passenger transit center in Mihail Kogalniceanu, Romania early 
next year in support Operation Enduring Freedom.
                                 ______
                                 
                  QUESTIONS SUBMITTED BY MR. LOBIONDO
    Mr. LoBiondo. I understand that the Army Aviation Fleet has been 
used very extensively during the 10 years of operation in theater . . . 
some have said that they've been ``rode hard and put away wet'' . . . 
but the Aviation RESET program has been very successful in repairing 
most of the wear on the aircraft once they come back from theater. 
However, regardless of how well the aircraft get reset we understand 
that the lifetime of these aircraft is getting used up faster than 
originally planned. With that as a backdrop, how long will you have to 
continue to conduct RESET after we've brought back the last of our 
aviation forces from Afghanistan? And how will sequestration impact 
this plan? Will we have to fund it for a longer period of time? Will 
our forces have to fly aircraft that have not been RESET? And will we 
continue to request Wartime Replacement Aircraft to backfill those that 
have been irreparably damaged during operations in support of OEF? An 
expedited response would be very much appreciated.
    General Mason. The Army will require OCO Reset funding for three 
years after the last piece of equipment departs Afghanistan. Depending 
on the Reset scope of efforts, Aviation Reset timelines range from 6 
months for repair of desert damage to 18-24 months for repair of severe 
combat damage.
    Sequestration resulted in the deferment of 28 aircraft from FY13 to 
future years. We are unable to assess the full impact of sequestration 
until FY14 funding levels are known. This might result in extending the 
Reset timeline for aircraft beyond the original plan.
    In order to meet Reset and training goals, every aircraft is Reset 
within 48 months of re-deployment. Thus, the Army will continue to 
utilize non-Reset aircraft to train crews as aircraft await induction; 
while at the same time, ensuring that our forces have the most reliable 
and capable aircraft.
    We will continue to request wartime replacements for aircraft that 
have been damaged beyond economical repair.

                                  
