[Senate Hearing 113-]
[From the U.S. Government Publishing Office]



 
   MILITARY CONSTRUCTION AND VETERANS AFFAIRS, AND RELATED AGENCIES 
                  APPROPRIATIONS FOR FISCAL YEAR 2014

                              ----------                              


                         THURSDAY, MAY 9, 2013

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 2:30 p.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Tim Johnson (chairman) presiding.
    Present: Senators Johnson, Udall, Begich, Kirk, and 
Collins.

                         DEPARTMENT OF DEFENSE

                   Office of the Secretary of Defense

STATEMENTS OF:
        HON. ROBERT F. HALE, UNDER SECRETARY OF DEFENSE (COMPTROLLER) 
            AND CHIEF FINANCIAL OFFICER
        JOHN CONGER, ACTING DEPUTY UNDER SECRETARY OF DEFENSE 
            (INSTALLATIONS AND ENVIRONMENT)

                OPENING STATEMENT OF SENATOR TIM JOHNSON

    Senator Johnson. Good afternoon. This hearing will come to 
order.
    We meet today to discuss the President's fiscal year 2014 
budget request for military construction (MILCON) and family 
housing for the Department of Defense (DOD) and the Navy.
    We will have two panels today. Our first panel includes Mr. 
Robert Hale, Under Secretary of Defense, Comptroller; and Mr. 
John Conger, Acting Deputy Under Secretary of Defense for 
Installations and Environment. We welcome you both to this 
hearing, and we look forward to your testimony.
    The President's fiscal year 2014 budget request for MILCON 
and family housing is $11 billion, which is on par with the 
fiscal year 2013 request and reflects the continued fiscal 
constraints under which DOD is operating.
    I understand the fiscal reality, but I hope that military 
construction accounts are not being starved to feed operational 
priorities, as important as those programs are. Our troops 
stationed around the world live, work, and train on U.S. 
military bases. Many families live in military family housing, 
are treated at military clinics and hospitals, and in some 
areas, send their kids to on-base military schools. At a time 
of unrelenting wartime pressure on our troops and their 
families, we simply cannot afford to short-change them when it 
comes to providing state-of-the-art training and operational 
facilities and safe and convenient housing.
    I am very concerned about the impact of the sequester on 
the fiscal year 2013 MILCON program, and potentially on the 
fiscal year 2014 program. I understand that the Office of 
Management and Budget (OMB) is still calculating the impact on 
specific fiscal year 2013 MILCON projects, which is continuing 
to cause delays in executing the projects. We are now more than 
halfway through the fiscal year, and I hope OMB guidance will 
be forthcoming soon.
    I am also concerned about the potential impact of a 
sequester on the fiscal year 2014 MILCON program. The Office of 
the Secretary of Defense (OSD) and the services may have the 
resources now to make up funding shortfalls in projects by 
backfilling them with bid savings. But as the MILCON program 
continues to shrink, bid savings are likely to shrink as well. 
I hope OSD has a plan B for executing the fiscal year 2014 
MILCON program under a sequester.
    Secretary Hale and Mr. Conger, I look forward to discussing 
these and other issues with you. Mr. Secretary, I know you have 
worked tirelessly to manage and mitigate the impact of 
sequestration on the Defense Department, including the troops 
on the ground and the army of civilians that come to work every 
day to support the defense of our Nation. We thank you for your 
service.
    I now ask my ranking member for any opening remarks he 
cares to make.
    Senator Kirk.

                     STATEMENT OF SENATOR MARK KIRK

    Senator Kirk. Thank you, Mr. Chairman.
    A quick overview. I want to talk about three things, which 
are a request for a background and overseas bases 
consolidation, and I will just note on the Base Realignment and 
Closure (BRAC) 2005 it was estimated to cost $13 billion, and 
it cost $35 billion. Only in the Government could a base 
closing exercise end up overrunning its budget.
    I will say I think if we are to discuss any kind of a BRAC, 
we need to complete the overseas base consolidation plan of DOD 
to make sure that we have looked at everything overseas and we 
don't launch into the BRAC, which affects many local economies.
    Mr. Chairman, Thank you. That's it.
    Senator Johnson. Thank you, Senator Kirk.
    I will remind our witnesses that their prepared statements 
will be placed in the record, so I encourage you to summarize 
your remarks.
    Secretary Hale, please proceed.

                SUMMARY STATEMENT OF HON. ROBERT F. HALE

    Mr. Hale. Mr. Chairman, Senator Kirk, Senator Collins, 
thank you for the chance to be here today to discuss the MILCON 
and family housing request. Your support is critical to our 
required infrastructure. I will summarize my statement briefly.
    Let me first turn to a very brief overview of our defense 
budget as a whole for context. We are requesting $526.6 billion 
in discretionary budget authority, which is about the same as 
our 2013 request, but about 8 percent higher than we are 
executing right now in 2013 under sequestration. Beyond 2014, 
if we are able to carry out the President's plan, we would 
anticipate increases of about 2 percent a year, roughly enough 
to keep up with inflation.
    Our overall budget request represents the amount the 
President and the Secretary of Defense believe is needed to 
protect our national security interests in a time of very 
complex challenges. Our request does not take into account a 
possible $52 billion reduction if sequester becomes an annual 
event. However, the President has submitted a budget with a 
balanced deficit reduction plan of $1.8 trillion over 10 years, 
more than enough to meet the targets in the Budget Control Act. 
We strongly hope the Congress will pass this plan or another 
plan supported by President and repeal sequestration.
    Our proposed base budget was built on a number of guiding 
principles, in particular the need to continue to serve as good 
stewards of taxpayer dollars. Accordingly, the budget includes 
$5.5 billion in fiscal year 2014 in efficiency savings, $34 
billion over the 5-year period of 2014 through 2018. That is in 
addition to several other efficiency packages we have submitted 
over the last year; and, of course, the plan, the proposal last 
year for $487 billion in DOD topline reductions over a decade.
    In an effort to be good stewards, we are proposing many 
initiatives, ranging from healthcare to weapons terminations, 
but let me emphasize one that I know is of interest and 
probably of concern. We need to consolidate and reduce 
infrastructure. The only effective way to do that is for 
Congress to authorize a new round of base realignment and 
closure, so we ask for a round in 2015.
    BRAC saves money. Let me say that again: BRAC saves money. 
We are saving $12 billion a year from the past BRAC rounds. I 
would hate to think what I would be doing right now as 
Comptroller of the Department of Defense, especially in this 
environment, if I had to find another $12 billion of savings in 
the fiscal 2014 budget.
    And I might add I understand the concerns about 2005, and 
we will discuss it. We do not intend to repeat the experience 
of 2005. It was a move-around BRAC. This is going to be a 
close-the-bases BRAC. It will be a lot less expensive and save 
money much more quickly.
    We need your support so we can make further cuts in 
infrastructure in 2015 and hold down the amount of dollars the 
American taxpayer has to give us to meet our national security 
needs.
    Seeking to be good stewards of the public funds is just one 
of the themes in the budget. We also are seeking to strengthen 
our alignment to the President's defense strategy that was 
announced last year. We also seek a ready force with an 
emphasis on people. But, frankly, sequestration is seriously 
undermining both of those goals.
    Let me turn briefly to military construction for 2014. We 
are requesting $9.5 billion in that category, roughly equal to 
the President's request of $9.6 billion in 2013, and $11 
billion, as you said, Mr. Chairman, in family housing. On the 
MILCON side, we request $3.3 billion for operational training 
facilities, $0.9 billion to modernize medical facilities, 17 
dependent school projects, and many others. In addition, we are 
asking for $1.5 billion in family housing, in order to provide 
quality, affordable housing for our military families. My 
colleague, John Conger, can provide more details on our MILCON 
and family housing requests.
    In very brief terms, that is an overview of our 2014 
budget. Let me close with a few words about the impact of 
sequestration on military construction in the current year. We 
are still researching the specific impacts, but we know most of 
them.
    Most of the military construction accounts will not 
experience sequester-related cuts in 2013 because of special 
crediting provisions in the current law that apply when 
Congress enacts major cuts in an appropriation. The law says if 
the cuts are big enough, there is no further sequestration.
    For the construction accounts that are affected, which are 
mainly Navy and Defense-wide, we believe we can absorb most of 
the sequestration reductions with available bid savings. We 
don't intend to reduce the scope of any construction projects, 
at least as of now. We don't believe that will be necessary, 
and we plan to minimize the number of canceled projects as a 
result of sequestration. We will have to do a larger than 
normal number of reprogrammings, which will add to our 
workload, and also to yours.
    I should add that while sequestration and related problems 
do not affect most military construction projects, they are 
devastating military readiness. I just can't believe what we 
are doing to the military right now. I don't think any of us 
meant to do this. Moreover, facility sustainment and 
restoration and modernization projects, which I know are of 
interest to this subcommittee, are being cut severely in fiscal 
2013. We are essentially funding only down to safety, life and 
property projects for the rest of the year. Overall, I think 
sequestration is living up to its unfortunate reputation for 
imposing devastating effects on our military.

                           PREPARED STATEMENT

    Mr. Chairman, that concludes my opening statement. On 
behalf of the men and women who wear America's uniform and the 
civilians who support them, I want to thank you for your 
support. After Mr. Conger finishes, I will welcome your 
questions.
    [The statement follows:]
               Prepared Statement of Hon. Robert F. Hale
    Mr. Chairman, members of the subcommittee, thank you for the 
opportunity to discuss the Military Construction and Family Housing 
portion of the fiscal year 2014 budget for the Department of Defense.
    This subcommittee's support is essential if America's Armed Forces 
are to have the infrastructure and facilities needed to carry out their 
missions and to continue ensuring the security of the United States.
    Before I discuss the Military Construction and Family Housing 
request, I would like to set the stage with a brief summary of the 
President's budget for the entire Department of Defense.
                          base budget request
    For fiscal year 2014 the Department is requesting $526.6 billion in 
discretionary budget authority. That is about 8 percent higher than 
what we are executing in fiscal year 2013 under the impact of 
sequestration, but it is similar to the level of funding in our fiscal 
year 2013 budget request. In the years beyond 2014, we anticipate 
budgets that will increase by about 2 percent per year, roughly enough 
to keep pace with inflation.
    I would make two broad points regarding our request for fiscal year 
2014. First, our overall budget is consistent with the adjusted 
provisions of title I of the 2011 Budget Control Act (BCA). However, it 
does not take into account what could be a $52 billion reduction if the 
BCA remains unchanged and these reductions become an annual event. The 
President has submitted a budget that calls for a balanced deficit 
reduction of $1.8 trillion over the 10-year period. We hope that 
Congress will enact this deficit reduction plan, or an alternative that 
the President can sign, and then repeal sequestration.
    Second, our budget does not yet include a request for Overseas 
Contingency Operations (OCO) funding. In order to give our commanders 
time to make the best judgments about the drawdown of troop levels in 
Afghanistan, the President did not announce force level decisions until 
mid-February, and even then he did so only for the period through 
February 2014. Since those force level decisions were made, we have 
been working on completing the OCO budget, and we hope to deliver it to 
Congress this month.
    In short, the request we submitted last month for $526.6 billion 
represents the base budget for the Department. It was developed with a 
number of fundamental principles in mind.
                              stewardship
    The first of these principles is to continue to serve as good 
stewards of taxpayer dollars. We recognize that, in a time of 
uncertainty when the Nation is beset by economic problems, we need to 
do our part and stretch Defense dollars. Consequently, we have proposed 
a budget that includes $5.5 billion in efficiency savings next year and 
about $34 billion in the 5 years from 2014 through 2018. Keep in mind 
that this is on top of the belt-tightening that the Department has gone 
through in recent years, including a budget plan in fiscal year 2013 
that reduced the Department's topline by $487 billion over a decade.
    As part of this ongoing commitment to good stewardship, we are 
asking Congress for authority for a new round of Base Realignment and 
Closure, better known as BRAC. It is not appropriate to identify 
specific facilities to be closed until this process has been completed, 
but we are patterning the effort after the rounds in 1993 and 1995. We 
know that BRAC, while it saves substantial sums in the long run, 
requires upfront funding. To pay related costs, we have added $2.4 
billion to the out-years of this budget in fiscal years 2016 through 
2018.
    We are also looking at a restructuring of the military healthcare 
system in order to address some significant underutilization in 
military treatment facilities. Our past efforts to control healthcare 
costs have met with some success, but we need to do more.
    These two initiatives--BRAC and healthcare restructuring--are 
important for restructuring the civilian workforce. We anticipate a 
total civilian reduction of between 4 and 5 percent, or as many as 
34,000 positions.
    Other stewardship efforts in fiscal year 2014 also include 
initiatives to terminate or restructure additional weapons systems. 
Specifics include termination of the precision tracking satellite 
system in favor of additional research on interceptor capability, and 
restructuring the SM-3IIB missile system in favor of warhead 
improvements.
    In addition, we are undertaking additional efforts to slow the 
growth in military compensation, while continuing to provide strong 
support for the All-Volunteer Force. The requested budget includes a 
modest slowing of the growth of military pay by implementing a 1-
percent pay raise in fiscal year 2014, instead of the 1.8-percent 
increase authorized in law.
    Our request also includes additional changes to the TRICARE program 
in the fiscal year 2014 budget to bring the beneficiary's cost-share 
closer to the levels envisioned when the program was implemented--
particularly for working age retirees. This change in healthcare cost-
share, along with our pay raise proposal, will save $1.4 billion in 
2014 and $12.8 billion through fiscal year 2018, which helps the 
Department avoid cuts in end strength, or in training and 
modernization, beyond those already planned.
                    aligning with strategic guidance
    After efficiencies, our second guiding principle in developing the 
proposed budget is to implement and deepen program alignment with the 
President's new Strategic Guidance that was introduced last year. That 
strategy envisions a smaller, leaner force. As a result, we are 
continuing to draw down ground forces. By the end of fiscal year 2014, 
we will be about two-thirds of the way toward an end strength target of 
490,000 for the Army and 182,100 for the Marine Corps.
    We also proposed a number of ship retirements last year in line 
with strategic needs. Congress rejected those proposals and provided 
funds to operate those ships through 2014. However, because these are 
costly but lower priority vessels, we plan to retire the ships after 
fiscal year 2014. We did reach agreement with Congress on aircraft 
retirements, and we are moving ahead on those.
    The President's strategy also involves a rebalance toward the Asia-
Pacific region while sustaining a presence in the Middle East. Our 
proposed budget reflects these goals. We are moving our most capable 
forces forward--F-22s are now in Kadena and Okinawa and, by 2020, we'll 
have 60 percent of our Navy forces in the Pacific region. We are also 
working to expand access and cooperation in the region. That includes 
establishing a rotational Marine Corps presence in Australia and 
deploying ships to Singapore. We also envision a continued strong 
presence in the Middle East, aimed at providing stability in the region 
in part by deterring Iranian aggression.
    Building alliances is a critical aspect of this strategy. We 
already have authority for the Global Security Contingency Fund (GSCF), 
a fund that DOD and the State Department can use jointly to aid allies. 
In fiscal year 2014, for the first time, we are asking for dedicated 
funding of $75 million for the GSCF.
    Alignment with the new Strategic Guidance also involves protecting 
and investing in new capabilities and technology to sustain our role as 
the world's preeminent military force. Highlights include investments 
in fiscal year 2014 in missile defense, upgrades to our carriers, 
enhanced long-range strike, a new tanker, the joint strike fighter, 
more and better precision-guided munitions, procurement of an 
additional Virginia-class submarine, and an increase in funds for 
cybersecurity.
                         seeking a ready force
    Besides stewardship and alignment with the President's Strategic 
Guidance, the Department's fiscal year 2014 budget request seeks to 
ensure and maintain a ready force. Over the last decade, our emphasis 
has been on counterinsurgency and counterterrorism. This budget 
emphasizes a return to full-spectrum operations and training across the 
Services.
    For example, the marines are shifting from what has been almost 
exclusively a land mission to their historic specialty in amphibious 
expeditionary warfare. We also hope to invest more in steaming and 
flying hours, reversing the severe limitations imposed by the present 
sequestration. Special Operations Command will return to its earlier 
status as a global force rather than concentrating on Afghanistan.
    Unfortunately, our efforts to seek a ready force are being 
undermined by sequestration and wartime budget shortfalls. The 
resulting large shortfalls in our operating accounts have driven us to 
cuts in training that are having devastating effects on military 
readiness. The Army, for example, has canceled seven combat training 
center rotations--ending this experience as a culminating training 
event for numerous units. As a result, by year's end many Army units 
will be below acceptable readiness levels. The Air Force has stopped 
flying at about one-third of its active combat-coded squadrons. This 
decision, and other reductions in flying hours, will limit the 
Service's ability to support combatant commanders. The Navy has cut 
back on deployments and also on training. All the Services have cut 
fiscal year 2013 maintenance funding, which will adversely affect 
future readiness.
    These unfortunate decisions not only seriously damage readiness in 
fiscal year 2013. They will also damage military capability beyond this 
fiscal year.
                           people are central
    The fiscal year 2014 budget also seeks to maintain a vital emphasis 
on people in Defense. That is the fourth principle behind our budget 
request. It means, for example, that the Department continues to ensure 
that our budget in fiscal year 2014 reflects our commitment and support 
for wounded warriors and military families.
    As with readiness, our goal to make people central is being 
undermined by the budgetary chaos in fiscal year 2013. Our civilians, 
who have suffered numerous pay freezes, may now face furloughs. 
Secretary Hagel is currently evaluating whether DOD should impose 
furloughs. Even our military personnel, whose funding is exempt from 
sequestration, are being hurt by resulting budget cuts because some can 
no longer train and stay ready to protect our Nation's security--which 
is one reason they joined the military. Indeed, today's sequestration 
problem may become tomorrow's retention problem.
                military construction and family housing
    Mr. Chairman, that provides a brief summary of our proposed budget 
for 2014 and the basis for the proposal. It also provides a context for 
the Military Construction request that we are here to discuss today.
    For fiscal year 2014, we are asking $9.5 billion for Military 
Construction, which is roughly equal to the President's request of $9.6 
billion for fiscal year 2013. Our current request will provide $3.3 
billion to support operational and training facilities, $0.9 billion to 
modernize medical facilities, and $0.8 billion for 17 Dependents 
Schools projects. The request also includes $1.3 billion for 
maintenance and production facilities and $0.5 billion for BRAC-related 
expenses, primarily to cover environmental and caretaker costs for 
property not yet conveyed. The remaining $2.7 billion of the request 
provides for research and development, supply, administrative and 
utility facilities, troop housing, the NATO Security Investment 
Program, the Energy Conservation Investment Program, minor construction 
and planning and design.
    In addition, we are asking for $1.5 billion for the Family Housing 
program, which will help to provide and maintain quality, affordable 
housing for military personnel and their families in locations that 
lack adequate rental housing.
                            selected issues
    Let me turn to several specific issues, starting with the effects 
of sequestration on Military Construction funding in fiscal year 2013. 
Many Military Construction accounts will not experience sequestration 
cuts because of crediting provisions in the current law. Our initial 
assessment is that, for those accounts that are cut by sequestration, 
we can absorb most of the sequestration with available bid savings. 
Emphasis will be placed on completing on-going construction projects 
(including incrementally funded projects). We do not intend to reduce 
the scope of any construction projects. Our plan is to minimize the 
number of projects deferred or canceled as a result of sequestration. 
However, since sequestration of affected accounts affects projects with 
unobligated balances, a large number of reprogramming actions will 
likely be required to execute the projects. Managing sequestration at 
the project level has been very difficult and will cost the Department 
many man hours to manage and implement.
    Turning to the fiscal year 2014 request, I want to highlight the 
importance of our request for funding in support of Global Defense 
Posture initiatives. In addition to the $1.4 billion investment planned 
for overseas military facility investments, we are asking for another 
$0.5 billion to continue strengthening forward capabilities and to 
ensure support for allies. Included are funds:
  --To continue working with Japan to achieve an end state Marine 
        presence in Okinawa consistent with the April 2012 joint 
        statement on planned force posture;
  --To enhance the ability of forces in the Asia-Pacific region to 
        survive in potential future conflicts;
  --For CV-22 support facilities in the United Kingdom; and
  --For continued construction of AEGIS Ashore mission facilities in 
        Romania.
    In the Asia-Pacific region, investment is needed to establish a 
more enduring U.S. role in advancing security and prosperity in the 
region. This includes funds for the development of Guam as a strategic 
hub in the Western Pacific and to relocate marines from Okinawa. These 
initiatives are particularly important because of our strategic goal to 
rebalance our forces toward the Asia-Pacific region.
    I also want to highlight our efforts to reduce overseas 
infrastructure. For years we have been pursuing an aggressive program. 
Since 2003, the Department has returned more than 100 sites in Europe 
to their respective host nations, and we have reduced our personnel by 
one-third. The Army plans to close 33 additional sites between fiscal 
year 2013 and fiscal year 2016, including those associated with the 
announced decision to reduce our presence from four to two brigade 
combat teams.
    Still, given recent announcements to further reduce our forces in 
Europe, we decided it was appropriate to build on our past successes in 
BRAC and use a similar approach to review our European infrastructure. 
We have initiated a comprehensive infrastructure analysis effort that 
will identify potential closures and consolidations. We are developing 
business case analyses for this task, taking into consideration 
operational impacts, return on investment, and military value. By the 
end of this year, we plan to produce a fully vetted list of options 
from which the Secretary can make strategic investment decisions.
    As we reduce our footprint overseas, we also need to consolidate 
infrastructure in the United States. The only effective and fair way to 
do that is BRAC. And, contrary to some assertions, BRAC does save 
money. Today we are saving $12 billion every year because of changes 
made during past BRAC rounds. We need to consolidate infrastructure 
now, and that statement will be even more true if Congress decides to 
continue cuts in defense funding. We must have your help to permit us 
to make cuts in infrastructure so that we can maintain a fighting force 
that is ready and modern. In short, we need your support for a BRAC 
round in 2015.
                               conclusion
    In conclusion, I believe that the fiscal year 2014 budget request 
is appropriate given the needs of the Armed Forces and the current 
fiscal reality. In particular, the budget supports a reasonable 
Military Construction and Family Housing program. We seek your support 
for our request. We also ask your help, and the help of others in 
Congress, to take actions to repeal sequestration and end its mindless 
and disastrous effects on our military forces.
    Mr. Chairman, members of the subcommittee, thank you again for your 
support for the Department of Defense and especially the men and women 
who wear America's uniform as well as the civilians who support them. 
That concludes my statement. I welcome your questions.

    Senator Johnson. Thank you, Mr. Secretary.
    Mr. Conger.

                        STATEMENT OF JOHN CONGER

    Mr. Conger. Thank you, Mr. Chairman. Chairman Johnson, 
Ranking Member Kirk, Senator Collins, I appreciate the 
opportunity to appear before you to discuss the Department's 
fiscal year 2014 budget request for installations and 
environment. The testimony that I have submitted for the record 
describes the $11 billion that we are requesting for military 
construction, the $10.9 billion more that we are investing in 
sustaining and restoring our facilities, and the $3.8 billion 
that we are seeking for environmental compliance and cleanup.
    As Mr. Hale mentioned, these numbers are not significantly 
lower than those we requested in fiscal year 2013 and, in fact, 
they represent a slight increase from what was appropriated 
this year. That's because the President's budget request 
replaces the across-the-board sequester cuts, as Mr. Hale 
mentioned. The fiscal year 2014 budget request allows us to 
continue a prudent investment in our infrastructure.
    I did want to mention two quick points in my opening 
statement. First, I wanted to talk a little bit more about the 
sequestration impact not to military construction, where the 
impact will be minor, but on facilities sustainment and 
restoration accounts. Because operation and maintenance (O&M) 
dollars or more discretionary and thus more flexible, the 
operational accounts were given more protection and facilities 
sustainment was cut more deeply to make up the difference. In 
fiscal year 2013, we are deferring all but the most critical 
repairs, we are deferring routine maintenance, we are holding 
off on major purchases and accepting risk by looking for 
building equipment to hold out longer.
    Frankly, we can accommodate this for a short period of 
time, but facilities will break if we short-change these 
accounts for multiple years. Building systems will begin to 
fail. The cost to repair broken systems is much higher than 
that to maintain them, just like changing the oil in your car. 
Keep in mind, this car is actually a real property portfolio of 
more than 500,000 facilities and a plant replacement value of 
more than $800 billion. If we don't invest in keeping it up, it 
will deteriorate and we will end up with a steady increase in 
failing or unusable facilities.
    Finally, let me say a word or two about BRAC. As you know, 
the administration is requesting a BRAC round in 2015. The 
Department is facing a serious problem created by the tension 
caused by constrained budgets, reductions in force structure, 
and limited flexibility to adapt to the first two. 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 United 
States. Our warfighters can't do their jobs without bases from 
which to fight, on which to train, or in which to live when 
they are not deployed.
    However, we need to be cognizant of the fact that 
maintaining more infrastructure than we need taxes other 
resources that the warfighter needs as well, from depot 
maintenance to training to bullets and bombs. We are 
continually looking for ways to reduce the cost of doing 
business, from looking for ways to reduce the cost of military 
construction to investing in energy efficiency that pays us 
back in lower operating costs. BRAC is another very clear way 
for us to reduce the infrastructure costs to the Department, 
and the previous five rounds of BRAC are providing us with the 
recurring savings of $12 million that Mr. Hale mentioned. These 
savings come from the elimination of excess, so they don't 
result in decreased capability.
    I am well aware of the skepticism that many in Congress 
have about the need for BRAC, and that seems to be based on the 
fact that we spent more than originally advertised during the 
2005 round. To be clear, BRAC 2015 will not look like BRAC 
2005. BRAC 2005 was conducted, one, while force structure was 
growing; two, while budgets were growing; and three, under 
leadership that directed the use of that authority to 
accomplish transformative change, not just the elimination of 
excess.
    Let me talk about that last point for just a second. Keep 
in mind that under the law, the only way to move functions of 
any significant size from base to base, simply to manage them, 
is through BRAC. In BRAC 2005, 33 out of the 222 
recommendations had no recurring savings. There were 70 more 
recommendations that took over 7 years to pay back. This wasn't 
a mistake. It was a conscious choice to use BRAC authority to 
better manage the enterprise. But even with BRAC 2005 
significant expenditure on transformation, it's generating $4 
billion in recurring savings. With no more investment in BRAC 
2005, we're going to save those $4 billion a year in 
perpetuity.
    Today's situation is dramatically different than 2005. The 
force structure is shrinking, the budget is shrinking, and we 
are firmly focused on reducing our future costs. That 
description characterizes the first four rounds of BRAC as 
well. Frankly, it also characterizes the other one-half of the 
recommendations that have fast payback from the 2005 round. The 
119 recommendations that did have fast payback from the 2005 
round cost us $6 billion and paid back $3 billion of the $4 
billion in recurring savings. So there were savings that 
occurred in the 2005 round.

                           PREPARED STATEMENT

    That concludes my opening statement. I appreciate the 
opportunity to testify this afternoon. It is a pleasure to be 
here, and I look forward to your questions.
    [The statement follows:]
                   Prepared Statement of John Conger
                              introduction
    Chairman Johnson, Ranking Member Kirk and distinguished members of 
the subcommittee: Thank you for the opportunity to present the 
President's fiscal year 2014 budget request for the Department of 
Defense programs supporting installations, facilities energy and the 
environment.
    It would be an understatement to say these are challenging times 
for the DOD budget. The impact of sequestration on our installations 
budgets in fiscal year 2013, combined with the uncertain budget context 
it poses for the next decade, requires us to change the way we think 
about our installations and the funds we will allocate to maintain 
them. We are still evaluating the impact the fiscal year 2013 cuts have 
had and will have on our various installations accounts, but we must 
consider every day how we can drive efficiencies and do more with less.
    While budgets are constrained and force structure shrinks, our 
infrastructure is being held constant. Our portfolio of approximately 
550,000 buildings and structures, 2.3 billion square feet, and a 
replacement value of $848 billion will be recapitalized and maintained 
in fiscal year 2014 through our request of $11 billion for military 
construction and family housing and $10.85 billion in Operations and 
Maintenance (O&M) for sustainment, restoration and modernization.
    This budget request represents a prudent investment in 
recapitalizing and maintaining our facilities. 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 United States, our warfighters cannot do their job without bases 
from which to fight, on which to train, or in which to live when they 
are not deployed. The bottom line is that installations support our 
military readiness, and we must ensure they continue to do so.
    Moreover, the environment in which our forces and their families 
live has an impact on their ability to do their job, and the 
Department's ability to retain those troops. Quality of life--to 
include not only the physical condition of the facilities in which our 
servicemen and servicewomen and their families live and work, but 
whether or not there is a safe, healthy environment around and within 
those facilities--is also critical to the readiness of the force. This 
request reflects that priority.
    Still, while we prioritize readiness and protect quality of life, 
we must be constantly seeking efficiencies in the budget. We are 
exploring ways to lower the cost of military construction as well as 
the cost of operating our facilities into the future. We are also 
cognizant that maintaining more infrastructure than we need taxes other 
resources that the warfighter needs--from depot maintenance to training 
to bullets and bombs. That is why the President's budget request for 
fiscal year 2014 also requests authority to conduct a round of Base 
Realignment and Closure (BRAC) in 2015.
    My testimony will outline the fiscal year 2014 budget request and 
highlight a handful of top priority issues--namely, the 
administration's request for BRAC authority, European consolidation 
efforts, status of the plan to move marines from Okinawa to Guam, an 
overview of our energy programs, and the request to renew or expand our 
land withdrawals at several critical installations.
   fiscal year 2014 budget request--military construction and family 
                                housing
    The President's fiscal year 2014 Military Construction (MILCON) and 
Family Housing appropriation request totals $11.0 billion, a decrease 
of approximately $211.1 million from the fiscal year 2013 budget 
request. Our MILCON and Family Housing budget will allow the Department 
to respond rapidly to warfighter requirements, enhance mission 
readiness, and provide essential services for its personnel and their 
families, while better balancing available resources and our security 
needs.

            TABLE 1.--MILCON AND FAMILY HOUSING BUDGET REQUEST, FISCAL YEAR 2013 VS. FISCAL YEAR 2014
                                              [Dollars in millions]
----------------------------------------------------------------------------------------------------------------
                                                                                   Change from fiscal year 2013
                                                   Fiscal year     Fiscal year  --------------------------------
                                                  2013 request    2014 request       Funding          Percent
----------------------------------------------------------------------------------------------------------------
Military Construction..........................        $8,540.7        $8,505.3          $(35.3)          (0.4)%
Base Realignment and Closure...................           476.0           451.4           (24.7)           (5.2)
Family Housing.................................         1,650.8         1,542.7          (108.0)           (6.5)
Chemical Demilitarization......................           151.0           122.5           (28.5)          (18.9)
Energy Conservation Investment Program.........           150.0           150.0  ...............  ..............
NATO Security Investment Program...............           254.2           239.7           (14.5)           (5.7)
                                                ----------------------------------------------------------------
      Total....................................        11,222.7        11,011.6          (211.7)           (1.9)
----------------------------------------------------------------------------------------------------------------
Numbers may not add due to rounding.

                     military construction (milcon)
    We are requesting $9.0 billion for military construction (Military 
Construction, Chemical Demilitarization, Energy Conservation Investment 
Program and NATO Security Investment Program). This request addresses 
routine needs for construction at enduring installations stateside and 
overseas, and for specific programs such as the NATO Security 
Investment Program and the Energy Conservation Investment Program. In 
addition, we are targeting MILCON investments in three key areas:
    First and foremost, our MILCON request supports the Department's 
operational missions. MILCON is key to initiatives such as the Nuclear 
Weapon Security Deviation Elimination Initiative and the Army 
Stationing Initiative, as well as the President's timeline for the 
European Phased Adaptive Approach (EPAA), and for projects that support 
enhanced homeland defense capabilities. Our fiscal year 2014 budget 
includes $3.26 billion to support operations and training requirements, 
including: range and training facilities for ground forces at several 
Army and USMC installations; a third increment of the Naval Explosives 
Handling Wharf at Kitsap, Washington; Air Force infrastructure to bed-
down the initial delivery of the KC-46A tankers; communications 
facilities in California and Japan to support operations in the Pacific 
region; and training and support facilities for Special Operations 
Forces.
    Second, our fiscal year 2014 budget request includes $797.8 million 
to replace or modernize 17 DOD Education Activity (DODEA) schools that 
are in poor or failing physical condition. These projects, most of 
which are at enduring locations overseas, support the Department's plan 
to replace or recapitalize more than half of DODEA's 194 schools over 
the next several years. The recapitalized or renovated facilities, 
intended to be models of sustainability, will provide a modern teaching 
environment for the children of our military members.
    Third, the fiscal year 2014 budget request includes $1.2 billion 
for 11 projects to upgrade our medical infrastructure, including $151.5 
million for the third increment of funding to replace the Landstuhl 
Regional Medical Center at the Rhine Ordnance Barracks in Germany, a 
critical facility supporting our wounded warriors. Our budget addresses 
medical infrastructure projects that directly impact patient care, and 
enhance our efforts to recruit and retain personnel. These projects are 
crucial for ensuring that we can deliver the quality healthcare our 
servicemembers and their families deserve, especially during overseas 
tours.
                family housing and unaccompanied housing
    A principal priority of the Department is to support military 
personnel and their families and improve their quality of life by 
ensuring access to suitable, affordable housing. Servicemembers are 
engaged in the front lines of protecting our national security and they 
deserve the best possible living and working conditions. Sustaining the 
quality of life of our people is crucial to recruitment, retention, 
readiness, and morale.
    Our $11.0 billion MILCON request includes $1.5 billion to fund 
construction, operation, and maintenance of Government-owned family 
housing worldwide. Most Government-owned family housing is on enduring 
bases in foreign countries, since the Department has privatized the 
vast majority of its family housing in the continental United States. 
The requested funding will ensure that we can continue to provide 
quality, affordable housing to U.S. military personnel and their 
families.
    The Department is committed to improving housing for our 
unaccompanied personnel as well. In recent years, we have invested 
heavily in unaccompanied personnel housing to support initiatives such 
as BRAC, global re-stationing, force structure modernization and 
Homeport Ashore--a Navy program to move sailors from their ships to 
shore-based housing when they are at their homeport. The fiscal year 
2014 MILCON budget request includes $423 million for 11 construction 
and renovation projects that will improve living conditions for more 
than 2,000 unaccompanied personnel.
    The Services rely largely on privatization to provide family 
housing on U.S. installations. As you've heard from my predecessors, 
privatization of family housing--where the Services partner with the 
private sector to generate housing built to market standards--is the 
single most effective reform my office has carried out. Prior to 
privatization, the Services' chronic underinvestment in their 
facilities had created a crisis, with almost 200,000 of the 
Department's family housing units rated ``inadequate.'' Privatization 
leverages the power of the commercial market to serve our needs. With 
an investment of approximately $3.6 billion, the Services have 
generated $29.7 billion in construction to build new and renovate 
existing family housing units. The Services also transferred 
responsibility for maintenance, operation and recapitalization for 50 
years to private entities that have an incentive to maintain the 
housing so as to attract and retain military tenants.

                 TABLE 2.--FAMILY HOUSING BUDGET REQUEST, FISCAL YEAR 2013 VS. FISCAL YEAR 2014
                                              [Dollars in millions]
----------------------------------------------------------------------------------------------------------------
                                                                                  Change from fiscal year 2013
                                                  Fiscal year     Fiscal year  ---------------------------------
                                                 2013 request    2014 request       Funding          Percent
----------------------------------------------------------------------------------------------------------------
Family Housing Construction/Improvements......          $190.6          $193.8            $3.1             1.6%
Family Housing Operations & Maintenance.......         1,458.3         1,347.2          (111.2)            (7.6)
Family Housing Improvement Fund...............             1.8             1.8  ...............            (0.3)
                                               -----------------------------------------------------------------
      Total...................................         1,650.8         1,542.7          (108.1)            (6.5)
----------------------------------------------------------------------------------------------------------------
Numbers may not add due to rounding.

      facilities sustainment, restoration and modernization (fsrm)
    In addition to investing in new construction, we must maintain, 
repair, and recapitalize our existing facilities. The Department's 
Sustainment and Recapitalization programs strive to keep our inventory 
of facilities mission capable and in good working order. Facility 
recapitalization is the funding that is used to improve a facility's 
condition through repair (restoration and modernization) or replacement 
(military construction (MILCON)). Sustainment represents the 
Department's single most important investment in the health of its 
facilities. It includes regularly scheduled maintenance and repair or 
replacement of facility components--the periodic, predictable 
investments an owner should make across the service life of a facility 
to slow its deterioration and optimize the owner's investment. 
Sustainment prevents deterioration, maintains safety, and preserves 
performance over the life of a facility, and helps improve the 
productivity and quality of life of our personnel.
    For fiscal year 2014, the Department's Operations and Maintenance 
(O&M) request for Facility Sustainment, Restoration and Modernization 
(FSRM) includes $8.0 billion for sustainment, $2.7 billion for 
restoration and modernization (recapitalization), and $145 million for 
demolition. The total FSRM O&M funding ($10.85 billion) reflects a 0.3-
percent increase from the fiscal year 2013 President's budget (PB) 
request ($10.81 billion). While the Department's goal is to fund 
sustainment at 90 percent of modeled requirements, due to budget 
challenges, the Army, Navy, and Air Force have taken risk in 
maintaining and recapitalizing existing facilities. These Services 
continue to budget to fund sustainment at between 80 percent and 85 
percent of the modeled requirement, whereas the Marine Corps and most 
Defense Agencies achieve or exceed the 90 percent goal.
    Continued deferred sustainment of existing facilities will present 
the Department with larger bills in the outyears to replace facilities 
that deteriorate prematurely due to underfunding.

 TABLE 3.--FACILITY SUSTAINMENT, RESTORATION AND MODERNIZATION BUDGET REQUEST, FISCAL YEAR 2013 VS. FISCAL YEAR
                                                      2014
                                              [Dollars in millions]
----------------------------------------------------------------------------------------------------------------
                                                                                  Change from fiscal year 2013
                                                  Fiscal year     Fiscal year  ---------------------------------
                                                 2013 request    2014 request       Funding          Percent
----------------------------------------------------------------------------------------------------------------
Sustainment...................................        $7,895.0        $8,040.0          $145.0              1.8
Restoration and Modernization.................         2,794.0         2,666.0          (128.0)            (4.6)
Demolition....................................           125.0           145.0            20.0             16.0
                                               -----------------------------------------------------------------
      Total FSRM..............................        10,814.0        10,851.0            37.0              0.3
----------------------------------------------------------------------------------------------------------------

    Our fiscal year 2014 budget also includes $2.7 billion in O&M funds 
for recapitalization, reflecting a decrease of 4.6 percent from the 
fiscal year 2013 PB request. This decrease largely results from the 
Services' decision to defer renovations at locations that may be 
impacted by changes in force structure. This constrained funding 
follows significant reductions in energy conservation investments from 
Sequestration reductions in fiscal year 2013, which will make 
achievement of DOD's statutory energy intensity goals impossible to 
attain for the foreseeable future.
    A final category of investment is demolition, which allows the 
Services to eliminate facilities that are excess to need or no longer 
cost-effective to operate. Our fiscal year 2014 budget request includes 
$145 million in operations and maintenance funding, a net increase of 
$20 million (16 percent) over the fiscal year 2013 request. This 
funding will allow us to demolish approximately 5 million square feet 
of facilities. Demolition is also accomplished as part of many of our 
military construction projects, and with both sources of funding, we 
anticipate eliminating over 62 million square feet of space between 
fiscal year 2008 and fiscal year 2014. Demolition is an important task 
in completing an asset's lifecycle. In most of cases, it removes 
eyesores and hazards from our installations and opens land for other 
uses.
         ongoing initiatives to reduce costs and improve value
    Finally, I would like to mention several ongoing initiatives 
designed to improve the Department's management of our infrastructure.
    Clarifying Anti-Terrorism/Force Protection (AT) Standards.--On 
December 7, 2012, the Deputy Secretary issued policy for DOD to begin 
using the antiterrorism standards developed by the Federal Interagency 
Security Committee (ISC) for DOD leased space in buildings, in lieu of 
continuing the use of DOD-developed standards. The revised policy will 
put DOD in line with other Federal agencies when determining security 
requirements for leased facilities, thereby promoting efficiencies with 
leasing arrangements through General Services Administration, 
particularly in buildings with multiple Federal tenants, as commonly 
found in urban areas. Additionally, because the ISC standards will 
allow DOD to better align organization missions to threats and risk 
mitigation, the Department can realize cost-savings through decreased 
relocation, rent, and retrofit costs. We will also be reviewing our on-
base processes for applying antiterrorism standards to determine if the 
ISC or similar processes and standards are more appropriate given the 
vast spectrum of missions that occur on military installations.
    Improving Facility Assessments.--In order to understand the effect 
of investments on our infrastructure, we need a reliable process for 
measuring the condition of those assets. Accurate and consistent 
Facility Condition Index (FCI) data, expressed in terms of the 
relationship between what it would cost to repair a facility to a like-
new condition and what it would cost to replace that facility, are 
essential for leadership to make informed decisions that target scarce 
resources to those facilities in most need of recapitalization, or to 
identify those assets that should be demolished. The Department is 
developing policy to reinvigorate and standardize our inspection and 
reporting processes, to include qualified professionals conducting the 
inspections. To make the results of these inspections relevant, we 
intend on using the FCIs as a centerpiece for a new recapitalization 
program that better considers facility conditions when prioritizing 
asset investments.
    Improving Asset Investments Planning and Programming.--Budgets 
associated with sustaining, renovating and modernizing DOD facilities 
are dropping at a disproportional rate compared to the size of our 
existing inventory. The facility investments made over the last decade, 
as a result of Grow the Forces, BRAC 2005, and Army Modularity 
initiatives, can easily be undermined with sharp reductions in future 
maintenance budgets. The Department is nearing completion on 
establishing a facility recapitalization program that focuses on the 
use of FCIs, which makes having an accurate and consistent facility 
inspection program essential. The recapitalization program will contain 
elements that look broadly across DOD's facility inventory as well as 
target specific facilities that fall below a minimum FCI. The former 
element provides the DOD components with flexibility in prioritizing 
which assets best support their operational priorities and maintaining 
appropriate levels for quality of life. For assets that fall below an 
acceptable FCI, the DOD components will be charged with determining 
whether that asset should be repaired, replaced or demolished. The 
concept is to only retain and sustain those facilities that contribute 
to our military readiness and are in a condition that will not 
jeopardize life, health, and safety of DOD personnel, weapon systems, 
or equipment.
    Reducing the Federal Premium.--My office continues to interact with 
industry and academia to explore innovation and efficiency in military 
construction projects, as part of our focus on Better Buying Power 
initiatives. We are completing a study on military construction unit 
costs compared with commercial unit costs for similar facilities. We 
are evaluating medical facilities, unaccompanied housing, 
administrative buildings, child care centers, and schools for 
differences in constructed features and costs, as well as other 
process-based differences and their impacts on costs. The insight 
gained from this study should allow us to identify potential cost-
saving measures in DOD-based processes or requirements, as well as 
cost-saving opportunities in statutory requirements that we will work 
with Congress to address.
    Reducing Lifecycle Costs While Minimizing Impacts to First Costs.--
In March, the Department published its new construction standard 
(Unified Facilities Criteria), governing the construction of all new 
buildings and major renovations. The new standard incorporates the most 
cost-effective elements of consensus-based green building standards 
like those managed by the American Society of Heating Refrigeration and 
Air Conditioning Engineers (ASHRAE) to help accelerate DOD's move 
toward more efficient, sustainable facilities that cost less to own and 
operate. This new standard is consistent with recommendations made by 
the National Research Council following their evaluation of the cost-
effectiveness of commercial green building standards and rating 
systems.
        fiscal year 2014 budget request--environmental programs
    The Department has long made it a priority to protect the 
environment on our installations, not only to preserve irreplaceable 
resources for future generations, but to ensure that we have the land, 
water and airspace we need to sustain military readiness. To achieve 
this objective, the Department has made a commitment to continuous 
improvement, pursuit of greater efficiency and adoption of new 
technology. In the President's fiscal year 2014 budget, we are 
requesting $3.83 billion to continue the legacy of excellence in our 
environmental programs. While this is below the fiscal year 2013 
request, the reduction reflects improved technologies and processes 
rather than any decline in effort.
    The table below outlines the entirety of the DOD's environmental 
program, but I would like to highlight a few key elements where we are 
demonstrating significant progress--specifically, our environmental 
restoration program, our efforts to leverage technology to reduce the 
cost of cleanup, and the Readiness and Environmental Protection 
Initiative (REPI).

              TABLE 4.--ENVIRONMENTAL PROGRAM BUDGET REQUEST, FISCAL YEAR 2014 VS. FISCAL YEAR 2013
                                              [Dollars in millions]
----------------------------------------------------------------------------------------------------------------
                                                                                  Change from fiscal year 2013
                                                  Fiscal year     Fiscal year  ---------------------------------
                                                 2013 request    2014 request       Funding          Percent
----------------------------------------------------------------------------------------------------------------
Environmental Restoration.....................          $1,424          $1,303           -$121             -8.5
Environmental Compliance......................           1,449           1,460             +11             +0.8
Environmental Conservation....................             378             363             -15             -4.0
Pollution Prevention..........................             111             106              -5             -4.5
Environmental Technology......................             220             214              -6             -2.7
Legacy BRAC Environmental.....................             318         379 \1\             -12             -3.1
BRAC 2005 Environmental.......................              73         379 \1\             -12             -3.1
                                               -----------------------------------------------------------------
      TOTAL...................................           3,974           3,826            -148             -3.7
----------------------------------------------------------------------------------------------------------------
\1\ BRAC accounts were combined in fiscal year 2013 NDAA.

                       environmental restoration
    We are requesting $1.7 billion to continue cleanup efforts at 
remaining Installation Restoration Program (IRP--focused on cleanup of 
hazardous substances, pollutants and contaminants) and Military 
Munitions Response Program (MMRP--focused on the removal of unexploded 
ordinance and discarded munitions) sites. This includes $1.3 billion 
for ``Environmental Restoration,'' which encompasses active 
installations and Formerly Used Defense Sites (FUDS) locations and $379 
million for ``BRAC Environmental.'' DOD is making steady progress, 
moving sites through the cleanup process towards achieving program 
goals. While the fiscal year 2014 request for environmental restoration 
is down 8.5 percent, that reduction is because DOD has nearly finished 
investigating our sites and is bounding the problem.

                                   TABLE 5.--PROGRESS TOWARD CLEANUP GOALS \1\
----------------------------------------------------------------------------------------------------------------
                                                                   Status as of      Projected       Projected
                                                                    the end of     status at the   status at the
                                                                    fiscal year    end of fiscal   end of fiscal
                                                                       2012          year 2018       year 2021
                                                                     (percent)       (percent)       (percent)
----------------------------------------------------------------------------------------------------------------
Army............................................................              88              97              98
Navy............................................................              72              89              95
Air Force.......................................................              68              89              94
DLA.............................................................              88              91              91
FUDS............................................................              75              90              94
                                                                 -----------------------------------------------
      Total.....................................................              77              92              96
----------------------------------------------------------------------------------------------------------------
\1\ Goal: Achieve Response Complete at 90 percent and 95 percent of active and BRAC IRP and MMRP sites, and FUDS
  IRP sites, by fiscal year 2018 and fiscal year 2021, respectively.

    By the end of 2012, the Department, in cooperation with State 
agencies and the Environmental Protection Agency, completed cleanup 
activities at 77 percent of active and BRAC IRP and MMRP sites, and 
FUDS IRP sites, and is now monitoring the results. During fiscal year 
2012 alone, the Department completed cleanup at over 900 sites. Of the 
more than 38,000 restoration sites, over 29,000 are now in monitoring 
status or cleanup completed. We are currently on track to exceed our 
program goals--anticipating complete cleanup at 96 percent of active 
and BRAC IRP and MMRP sites, and FUDS IRP sites, by the end of 2021.
    Our focus remains on continuous improvement in the restoration 
program: minimizing overhead; developing new technologies to reduce 
cost and accelerate cleanup; and refining and standardizing our cost 
estimating. All of these initiatives help ensure that we make the best 
use of our available resources to complete cleanup.
    Note in particular that we are cleaning up sites on our active 
installations in parallel with those on bases closed in previous BRAC 
rounds--cleanup is not something that DOD pursues only when a base is 
closed. In fact, the significant progress we have made over the last 20 
years cleaning up contaminated sites on active DOD installations is 
expected to reduce the residual environmental liability.
                        environmental technology
    A key part of DOD's approach to meeting its environmental 
management obligations and improving its performance is its pursuit of 
advances in science and technology. The Department has a long record of 
success when it comes to developing innovative environmental 
technologies and getting them transferred out of the laboratory and 
into actual use on our remediation sites, installations, ranges, depots 
and other industrial facilities. These same technologies are also now 
widely used at non-Defense sites helping the Nation as a whole.
    While the fiscal year 2014 budget request for Environmental 
Technology overall is $214 million, our core efforts are conducted and 
coordinated through two key programs--the Strategic Environmental 
Research and Development Program (SERDP--focused on basic research) and 
the Environmental Security Technology Certification Program (ESTCP--
which validates more mature technologies to transition them to 
widespread use). The fiscal year 2014 budget request includes $72.3 
million for SERDP and $39.5 million for ESTCP for environmental 
technology demonstrations. (The budget request for ESTCP includes an 
additional $32.0 million for energy technology demonstrations.)
    These programs have already achieved demonstrable results and have 
the potential to reduce the environmental liability and costs of the 
Department--developing new ways of treating groundwater contamination, 
reducing the lifecycle costs of multiple weapons systems, and most 
recently, developing technology that allows us to discriminate between 
hazardous unexploded ordnance and harmless scrap metal without digging 
up an object. This last development promises to reduce the liability of 
the MMRP program by billions of dollars and accelerate the current 
cleanup timelines for sites within the program--without it, we 
experience a 99.99-percent false positive rate and are compelled to dig 
up hundreds of thousands of harmless objects on every MMRP site. We are 
proceeding deliberately and extremely successfully with a testing and 
outreach program designed to validate the technology while ensuring 
cleanup contractors, State and Federal regulators, and local 
communities are comfortable with the new approach. We are already 
beginning to use this new tool at a few locations, but hope to achieve 
more widespread use within the next few years.
         environmental conservation and compatible development
    In order to maintain access to the land, water and airspace needed 
to support our mission needs, the Department continues to manage 
successfully the natural resources entrusted to us--including 
protection of the many threatened and endangered species found on our 
lands. DOD manages over 28 million acres containing some 420 federally 
listed threatened or endangered species, more than 520 species-at-risk, 
and many high-quality habitats. A surprising number of these species 
are endemic to military lands--that is, they are found nowhere else in 
the world--including more than 10 listed species and at least 75 
species-at-risk.
    While we make investments across our enterprise focused on 
threatened or endangered species, wetland protection, or protection of 
other natural, cultural and historical resources, I wanted to highlight 
one particularly successful and innovative program--the Readiness and 
Environmental Protection Initiative (REPI)--for which we are requesting 
$50.6 million in fiscal year 2014.
    REPI is a key tool for combating the encroachment that can limit or 
restrict military test and training. Under REPI, DOD partners with 
conservation organizations and State and local governments to preserve 
buffer land near installations and ranges. Preserving these areas 
allows DOD to avoid much more costly alternatives, such as workarounds, 
segmentation or investments to replace existing test and training 
capability, while securing habitat off of our installations and taking 
pressure off of the base to restrict activities. REPI supports the 
warfighter and protects the taxpayer because it multiplies the 
Department's investments with its unique cost-sharing agreements. Even 
in these difficult economic times for States, local governments and 
private land trusts, REPI partners continue to directly leverage the 
Department's investments one-to-one. In other words, we are securing 
this buffer around our installations for half-price.
    In 10 years of the program, REPI partnerships have protected more 
than 270,000 acres of land around 64 installations in 24 States. This 
land protection has resulted in tangible benefits to test and training, 
and also significant contribution to biodiversity and endangered 
species recovery actions. For example, the U.S. Fish and Wildlife 
Service recently found it was not warranted to list a butterfly species 
as endangered in Washington State, citing the ``high level of 
protection against further losses of habitat or populations'' from 
Joint Base Lewis-McChord's REPI investment on private prairie lands in 
the region. In California, the U.S. Fish and Wildlife Service exempted 
Marine Corps Base Camp Pendleton populations of Riverside fair shrimp 
from critical habitat designation because of ongoing base management 
activities and also off-post buffer protection. Both of these actions 
allow significant maneuver areas to remain available and unconstrained 
for active and intense military use at both locations.
                           highlighted issues
    In addition to the budget request, there are several legislative 
requests and other initiatives that have received interest from 
Congress. In the sections that follow, I highlight five specific items 
of interest:
  --Base realignment and closure;
  --European basing consolidation;
  --Rebasing of marines from Okinawa to Guam;
  --DOD facilities energy programs; and
  --Request for legislative land withdrawals.
Base Realignment and Closure (BRAC)
    The administration is requesting authority from Congress to conduct 
a BRAC round in 2015.
    The Department is facing a serious problem created by the tension 
caused by declining budgets, reductions in force structure, and limited 
flexibility to adapt our infrastructure accordingly. We need to find a 
way to strike the right balance, so infrastructure does not drain 
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 United States, our warfighters can't do their job without bases 
from which to fight, on which to train, or in 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.
    While the primary function of BRAC is to match infrastructure to 
missions, it is also about trimming excess so that resources otherwise 
wasted on unnecessary facilities can be reapplied to higher priorities. 
Savings from BRAC are 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 BRAC 2005 is producing an additional $4 
billion in annual, recurring savings. This $12 billion total represents 
the savings that the Department realizes each and every year as a 
result of the avoided costs for base operating support, personnel and 
leasing costs that BRAC actions have made possible.
    An additional savings benefit of BRAC is that it enables the 
Department to execute the civilian workforce efficiencies plan required 
by the fiscal year 2013 National Defense Authorization Act. BRAC 2005 
eliminated 13,000 civilian positions associated with closed 
installations and reorganized common business oriented support 
functions. The BRAC 1993/95 rounds averaged 36,000 eliminations per 
round. Congress has already demanded these civilian personnel cuts, and 
if they are not made through BRAC, they will need to be made elsewhere.
    We believe the opportunity for greater efficiencies is clear, based 
on three basic facts:
  --In 2004, DOD conducted a capacity assessment that indicated it had 
        24 percent aggregate excess capacity;
  --In BRAC 2005, the Department reduced only 3.4 percent of its 
        infrastructure, as measured in Plant Replacement Value--far 
        short of the aggregate excess indicated in the 2004 study;
  --Force structure reductions--particularly Army personnel (from 
        570,000 to 490,000), Marine Corps personnel (from 202,000 to 
        182,000) and Air Force force structure (reduced by 500 
        aircraft)--subsequent to that analysis point to additional 
        excess.
    The fundamental rationale for using the BRAC process to achieve 
these efficiencies is to enable DOD, an independent commission, the 
public, and Congress to engage in a comprehensive and transparent 
process to facilitate the proper alignment of our infrastructure with 
our mission. As we witnessed last year, piecemeal attempts to improve 
the alignment of installations to mission are generally met with 
skepticism and resistance from Congress and State and local officials 
who question DOD's rationale to the extent that the proposed changes 
are effectively stopped. Indeed, recent statutory changes have further 
restricted the Department's ability to realign its installations. 
Absent BRAC, the Department is effectively locked into a status quo 
configuration. BRAC, therefore, should be an essential part of any 
overall reshaping strategy.
    BRAC provides us with a sound analytical process that is proven. It 
has at its foundation a 20-year force structure plan developed by the 
Joint Staff; a comprehensive installation inventory to ensure a 
thorough capacity analysis; and defined selection criteria that place 
priority on military value (with the flexibility to express that in 
both a quantitative and qualitative way).
    The BRAC process is comprehensive and thorough. Examining all 
installations and conducting thorough capacity and military value 
analyses using certified data enable rationalization of our 
infrastructure in alignment with the strategic imperatives detailed in 
the 20-year force structure plan. The merits of such an approach are 
twofold. First, a comprehensive analysis ensures that the Department 
considers a broad spectrum of approaches beyond the existing 
configuration to increase military value and align with our strategy. 
Second, the process is auditable and logical which enables independent 
review by the commission and affected communities. In its 2013 report, 
GAO stated, ``We have reported that DOD's process for conducting its 
BRAC 2005 analysis was generally logical, reasoned and well documented 
and we continue to believe the process remains fundamentally sound.''
    Additionally, and of primary importance, is the BRAC requirement 
for an ``All or None'' review by the President and Congress, which 
prevents either from picking and choosing between the Commission's 
recommendations. Together with the provision for an independent 
commission, this all-or-none element is what insulates BRAC from 
politics, removing both partisan and parochial influence, and 
demonstrating that all installations were treated equally and fairly. 
It is worth noting that the process validates the importance of those 
bases that remain and are then deserving of continued investment of 
scarce taxpayer resources.
    The Department's legal obligation to close and realign 
installations as recommended by the Commission by a date certain, 
ensures that all actions will be carried out instead of being endlessly 
reconsidered. That certainty also facilitates economic reuse planning 
by impacted communities.
    Finally, after closure, the Department has a sophisticated and 
collaborative process to transition the property for reuse. The 
Department is mindful of the significant toll BRAC has on our host 
locations. Our Office of Economic Adjustment (OEA) provides technical 
and financial support to help these communities through closure, 
disposal, and redevelopment with a program tailored to their specific 
planning and implementation requirements. The former installation is 
often the single greatest asset for impacted communities to redevelop 
and restore a lessened tax base and the lost jobs from closure. One of 
the most important disposal authorities available to help impacted 
communities with job creation is the Economic Development Conveyance 
(EDC). The Department is using the full breadth of this authority to 
structure conveyances into win-win agreements wherein communities can 
create jobs and bolster their local tax base, and the Department sees 
increased savings through reduced property maintenance costs and 
participation in the cash flows from successful local redevelopment 
efforts.
    The Department anticipates approximately 13,000 jobs will be 
generated by eight EDCs for real and related personal property at the 
following BRAC 2005 locations: Kansas Army Ammunition Plant, Kansas; 
Lone Star/Red River Army Depot, Texas; Naval Air Station Brunswick, 
Maine; Newport Chemical Depot, Indiana; Buckley Annex, Colorado; Fort 
Monmouth, New Jersey; Pascagoula Naval Station, Mississippi; and 
Ingleside Naval Station, Texas. The Department anticipates approving 
additional EDCs in fiscal years 2013 and 2014.
European Basing Consolidation
    In response to last year's request for BRAC authority, many in 
Congress asserted that we should look first at our overseas 
infrastructure for reductions. Even though we have already made 
substantial reductions over the last several years in our European-
based personnel and infrastructure, upcoming force structure changes 
and a focus on greater joint utilization of assets should produce 
additional opportunities for reducing infrastructure while preserving 
required capabilities.
    To that end, on January 25, then Secretary Panetta directed the 
Department to initiate a review of our European footprint, stating: 
``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.''
    In response, we have initiated a comprehensive infrastructure 
analysis effort that will identify potential closure/consolidation 
scenarios. We are developing business case analyses for this task, 
taking operational impacts, return on investment, and military value 
into consideration. By the end of this year we plan to conclude with a 
fully vetted list of options from which the Secretary can make 
strategic investment decisions.
    Through this process we seek to create long-term savings by 
eliminating excess infrastructure, recapitalizing astutely to create 
excess for elimination, and closing and/or consolidating sites. The 
results will ultimately validate our enduring European infrastructure 
requirements, providing an analytical basis to support sustainment 
funding and future recapitalization.
Rebasing of Marines to Guam
    One important rebasing initiative that has received continued 
attention from Congress is our plan to realign several thousand marines 
from Okinawa to Guam. The Government of Japan has welcomed the U.S. 
strategy to rebalance defense priorities toward the Asia-Pacific region 
and U.S. efforts to advance its diplomatic engagement in the region. To 
achieve the goals of the shared partnership between the two countries, 
the United States-Japan Security Consultative Committee (SCC) decided 
to adjust the plans outlined in the original 2006 ``Realignment 
Roadmap''.
    On April 27, 2012, the SCC issued a joint statement detailing 
changes to the plans. Specifically, the United States and Japan 
separated the requirement of tangible progress on the construction of 
the Futenma Replacement Facility (FRF) before the movement of marines 
to Guam, from other Marine restationing efforts on Okinawa to return 
lands to local communities. Also, while the overall number of marines 
planned to leave Okinawa remained essentially the same (approximately 
9,000), the new distributed laydown will result in fewer marines (and 
accompanying family members) being re-stationed to Guam (approximately 
5,000) with the remainder of the forces moving to Hawaii and the 
continental United States.
    The revised laydown, commonly referred to as the ``distributed 
laydown'' establishes fully capable MAGTFs (maritime, air, ground, 
logistics, and associated lift) in Okinawa, Guam (5,000), Australia 
(2,500 through a rotational deployment) and Hawaii (2,700) and ensures 
that individual MAGTFs can respond rapidly to low-end contingencies 
(e.g., humanitarian assistance/disaster relief, counter-piracy, etc.) 
while also ensuring that the force can aggregate quickly to respond to 
high-end contingencies. Additionally, the revised laydown increases our 
ability over time to train and exercise with allies and partners 
throughout the region.
    The President's fiscal year 2014 budget request includes $85 
million for construction of an aircraft hangar at the north ramp of 
Andersen Air Force Base. In addition to supporting the Marine Corps 
Aviation Combat Element relocation to Guam, this facility can also be 
utilized to meet current operational requirements of Marine units in 
the Pacific. Our request includes another $273.3 million for non-
military assistance to address Guam water and wastewater improvements. 
As a result of the fragile state of Guam's water and wastewater 
infrastructure, remedies and new infrastructure are required to support 
existing military missions, as well as potential growth associated with 
the Department's rebalance to the Asia-Pacific region. Numerous Federal 
agencies, including the Environmental Protection Agency (EPA), worked 
with the Department and validated these water and wastewater 
requirements, concluding significant capital improvements were 
necessary.
    Finally, as a result of the adjustments to the laydown of marines 
on Guam, the Department must conduct a Supplemental Environmental 
Impact Study (SEIS). This SEIS supersedes and expands on the previously 
initiated Live Fire Training Range Complex (LFTRC) SEIS by 
incorporating the requirement for a new Marine Corps cantonment area on 
Guam. With the reduction in the size of future Marine forces in Guam, 
the National Environmental Policy Act requirements are being combined 
in order to determine the optimal locations for the range complex, 
cantonment and housing relative to each other and the Record of 
Decision is anticipated in February 2015.
DOD Facilities Energy Programs
    The Department has focused on facilities energy for three key 
reasons: to reduce costs; improve the energy security of our fixed 
installations; and achieve DOD's statutory energy goals. Energy bills 
are the largest single cost in our facilities operations accounts, and 
any effort to reduce the cost of installations must include efforts to 
reduce them. Moreover, given the reach of our installations to provide 
direct support to operational forces, we must reduce the vulnerability 
of our installations to possible outages of the electric grid. DOD has 
statutory energy goals for energy intensity and renewable energy among 
other statutory goals.
    Our approach to achieving these goals has four elements: reduce the 
demand for traditional energy through conservation and improved energy 
efficiency; expand the supply of renewable and other distributed (on-
site) generation sources; enhance the energy security of our 
installations directly (as well as indirectly, through the first two 
elements); and leverage advanced technology.
            Reduce Demand
    From DOD's new energy budget data system within the Department's 
fiscal year 2014 budget request, there are approximately $1 billion in 
energy conservation investments, mostly for investments in repair and 
upgrading systems in existing buildings. The preponderance of these 
investments are within the Facilities Sustainment, Restoration and 
Modernization accounts along with other necessary investments in 
maintaining our existing real property. As mentioned in that section 
above, this constrained funding follows significant reductions in 
energy conservation investments from sequestration reductions in fiscal 
year 2013, which will make achievement of DOD's statutory energy 
intensity goals impossible to attain for the foreseeable future. One 
account that is singled out is the Energy Conservation Investment 
Program (ECIP), a military construction appropriation for which we are 
requesting $150 million. DOD also is investing more than $2 billion in 
energy conservation projects for Operational Energy, including aviation 
and other transportation fuels that are used on DOD bases.
    The Services also use third-party financing tools, such as Energy 
Savings Performance Contracts (ESPCs) and Utility Energy Service 
Contracts (UESCs), to improve the energy efficiency of their existing 
buildings. While such performance-based contracts have long been part 
of the Department's energy strategy, in fiscal year 2012 the DOD 
committed to award nearly $1.2 billion in performance-based contracts 
by the end of 2013, or soon thereafter, in response to the President's 
December 2, 2011, commitment ($2 billion in such contracts Federal 
Government-wide). To date, the Department has awarded 39 contracts 
worth $362 million with another $930 million in contracts under 
development.
    In addition to retrofitting existing buildings, we are taking 
advantage of new construction to incorporate more energy-efficient 
designs, material and equipment into our inventory. This past March, I 
issued a new construction standard for high-performance, sustainable 
buildings, which will govern all new construction, major renovations 
and leased space acquisition. This new standard, which incorporates the 
most cost-effective elements of commercial standards like ASHRAE 189.1, 
will accelerate DOD's move toward efficient, sustainable facilities 
that cost less to own and operate, leave a smaller environmental 
footprint and improve employee productivity.
    Collection of accurate, real-time facility energy information 
remains a priority. My office continues to lead the development of an 
Enterprise Energy Information Management System (EEIM) that will 
collect facility energy data in a systematic way. The EEIM will also 
provide advanced analytical tools that allow energy professionals at 
all levels of the Department both to improve existing operations and to 
identify cost-effective investments. In order to make EEIM a reality, 
the Department must vastly increase the deployment of advanced energy 
meters, capable of automatically collecting energy use information.
            Expand Supply of On-Site Energy
    DOD is increasing the supply of renewable and other distributed 
(on-site) sources of energy on our installations. On-site energy is 
critical to making our bases more energy secure. The Military 
Departments have each established a goal to develop 1 gigawatt (GW) of 
renewable energy (RE) by 2025. Almost all projects will be third-party 
financed, using existing authorities (e.g., 10 U.S.C. section 2922a and 
enhanced use leases).
    The Army issued a Multiple Award Task Order Contract (MATOC) 
Request for Proposal for $7 billion in total contract capacity for RE. 
Army projects currently underway include Fort Bliss, Texas (1 MW Solar 
PV), White Sands Missile Range, New Mexico (4.5 MW Solar PV), and Fort 
Carson, Colorado (2 MW Solar PV). The Navy has a goal to produce at 
least 50 percent of the Navy's shore-based energy requirements from 
renewable sources by 2020. Projects currently underway include Marine 
Corps Air Station, Miramar, California (3 MW Landfill Gas), Marine 
Corps Logistics Base, Barstow, California (1.5 MW Solar PV), Naval Air 
Weapons Station China Lake, California (13.8 MW Solar PV), and Marine 
Corps Air Ground Combat Center Twentynine Palms, California (1.2 MW 
Solar PV). Air Force is using existing authority to lease non-excess 
land for the development of large-scale RE projects, the first of which 
is under negotiation at Edwards AFB, California (200 MW Solar PV 
projected to come on line in 2016).
    Where renewable energy development is compatible with the military 
mission, certain public lands that have been withdrawn for military 
purposes offer a significant opportunity to improve our energy security 
while lowering the cost of energy. My office continues to work closely 
with the Department of the Interior (DOI) to identify and overcome 
impediments to the execution of renewable energy projects on such 
lands.
            Enhance Security
    The DOD is focusing on a diverse set of solutions to enhance 
facility energy security. These include prioritization agreements with 
utilities, addressing operations and maintenance of current back-up 
generators, microgrids, fuel supply and storage, and ensuring reliable 
access to fuel in the case of emergencies (e.g., Hurricane Sandy--DLA-
Energy and FEMA interagency partnership). Multiple demonstration 
projects are currently underway to assess the benefits and risks of 
alternative advanced microgrid and storage technologies.
            Leverage Advanced Technology
    DOD's Installation Energy Test Bed Program was established to 
demonstrate new energy technologies in a real-world, integrated 
building environment so as to reduce risk, overcome barriers to 
deployment and facilitate widespread commercialization. DOD is 
partnering with the DOE and reaching out directly to the private sector 
to identify those energy technologies that meet DOD's needs. The fiscal 
year 2014 budget request includes $32 million for the test bed under 
the Environmental Security Technology Certification Program (ESTCP).
    The test bed has >85 projects underway in five broad areas: 
advanced microgrid and storage technologies; advanced component 
technologies to improve building energy efficiency, such as advanced 
lighting controls, high performance cooling systems and technologies 
for waste heat recovery; advanced building energy management and 
control technologies; tools and processes for design, assessment and 
decisionmaking on energy use and management; and on-site energy 
generation, including waste-to-energy and building integrated systems. 
The rigorous Installation Energy Test Bed Program provides an 
opportunity for domestic manufacturers to demonstrate the technical and 
economic feasibility of implementing their innovative products. These 
demonstrations provide the credible evidence needed by investors to 
commercialize emerging technologies to serve the DOD and broader 
markets.
            A Note on Renewable Energy Siting
    While the DOD has embraced renewable energy projects that improve 
energy security and reduce cost, and each service has established 1 
gigawatt goals for the production of renewable energy on their 
installations, we are also responsible for evaluating the impact of 
these projects on our mission and objecting where there is unacceptable 
risk to national security. While most transmission and renewable energy 
projects are compatible, some can interfere with test, training and 
operational activities. The DOD created the Siting Clearinghouse to 
serve as the single point of contact for energy and transmission 
infrastructure issues at the DOD level. The goal of this body is to 
facilitate timely, consistent and transparent energy siting decisions, 
while protecting test, training, and operational assets vital to the 
national defense.
    During 2012, the Clearinghouse oversaw the evaluation by technical 
experts of 1,769 proposed energy projects; 1,730 of these commercial 
projects, or 98 percent, were cleared (assessed to have little or no 
impact to DOD test, training or operational missions). These 1,730 
projects represent 38 gigawatts of potential renewable energy 
generation. The 39 projects that have not been cleared are undergoing 
further study, and the Clearinghouse is working with industry, State, 
tribal, and local governments, and Federal permitting and regulatory 
agencies to identify and implement mitigation measures wherever 
possible.
    In addition to reviewing projects, the Clearinghouse has conducted 
aggressive outreach to energy developers, environmental and 
conservation groups, State and local governments, and other Federal 
agencies. By encouraging developers to share project information, we 
hope to avert potential problems early in the process. We are being 
proactive as well by looking at regions where renewable projects could 
threaten valuable test and training ranges.\1\ The Clearinghouse is 
working with DOE, DHS, and the Federal Aviation Administration to model 
the impact of turbines on surveillance radars, evaluate alternative 
mitigation technologies, and expedite fielding of validated solutions.
---------------------------------------------------------------------------
    \1\ DOD is conducting a study to identify areas of likely adverse 
mission impact in the region that is home to China Lake and Edwards Air 
Force Base in California, and Nellis Air Force Base and the Nevada Test 
and Training Range in Nevada. These installations are the Department's 
premier sites for test and evaluation and require a pristine 
environment clear of interference. The results of the study can be used 
by developers as a risk-management tool.
---------------------------------------------------------------------------
    Finally, the Clearinghouse is taking advantage of section 358 of 
the Fiscal Year 2011 NDAA, which allows DOD to accept voluntary 
contributions from developers to pay for mitigation. For example, the 
Clearinghouse and the Navy have negotiated two agreements that provide 
for developer contributions for mitigation measures to protect the 
precision approach radar at the Naval Air Station (NAS) Kingsville, 
Texas, from wind turbine impacts. The agreements facilitate the 
continued growth of wind energy generation along the Texas Coastal 
Plain while providing for the safety of student pilots at NAS 
Kingsville and NAS Corpus Christi. We believe there will be other 
situations where developers will wish to contribute funds toward 
mitigation measures in order to realize a much larger return on a 
project; section 358 is an extremely useful, market-based tool that 
allows us to negotiate these win-win deals.
BLM Land Withdrawals
    The Department has a number of installations, training areas and 
ranges that are located partially or wholly on public lands temporarily 
or permanently withdrawn from public use. Public lands are managed by 
the Department of the Interior through the Bureau of Land Management 
(BLM). Withdrawals of public lands for military use require joint 
actions by the Department of Defense and the Department of the 
Interior. Withdrawals exceeding 5,000 acres must be authorized by 
congressional legislation. Depending on the terms of the prior 
legislation, some withdrawals must be renewed by legislative action 
every 20-25 years.
    Presently, withdrawals for Naval Air Weapons Station (NAWS), China 
Lake, California, and the Chocolate Mountain Aerial Gunnery Range 
(CMAGR), California, expire on October 31, 2014. Additionally, the Army 
needs to convert its use of public lands at the Montana Army National 
Guard, Limestone Hills Training Area, from a BLM issued right-of-way to 
a legislative withdrawal. Finally, the Marine Corps seeks a new 
withdrawal of public lands at Marine Corps Air Ground Combat Center 
(MCAGCC) Twentynine Palms, California, to expand its training areas to 
support increased requirements.
    NAWS China Lake.--NAWS China Lake consists of over 1.1 million 
acres of land of which 92 percent are withdrawn public lands. The 
current legislative withdrawal, expiring in 2014, is for a 20-year 
term. Under a memorandum of understanding between the Department of the 
Navy and the Department of the Interior, the Commanding Officer of NAWS 
China Lake is responsible for managing the withdrawn land. The 
installation is home to approximately 4,300 DOD personnel and its 
primary tenant is the Naval Air Warfare Center Weapons Division.
    Chocolate Mountain AGR.--The Chocolate Mountain range was 
established in 1941. The range consists of about 459,000 acres of which 
approximately 227,000 acres are withdrawn public lands under the co-
management of the Marine Corps and Bureau of Land Management. The 
current 20-year withdrawal is set to expire on October 31, 2014. Its 
primary uses are aviation weapons training, including, precision guided 
munitions, and Naval Special Warfare (SEAL) training ranges. It is the 
only Marine Corps aviation range that is capable of accommodating 
training with precision guided munitions. Failure to renew the 
legislative withdrawal will have the practical effect of shutting the 
entire range down because it is an unusual checkerboard configuration 
of several hundred parcels of alternating fee-owned DOD land and 
withdrawn public lands.
    Limestone Hills Training Area.--The Limestone Hills Training Area 
consists of 18,644 acres of land in Broadwater County, Montana, that 
has been used for military training since the 1950s. In 1984, the BLM 
issued the Army a right-of-way formally permitting use of the training 
area for military purposes. The current right-of-way expires on March 
26, 2014. The Montana Army National Guard is the primary DOD user of 
the training area but it is also used by Reserve and Active components 
from all branches of the military services for live-fire, mounted and 
dismounted maneuver training and aviation training. The legislative 
withdrawal of the Limestone Hills Training area is necessary because 
the BLM has determined that it no longer has the authority to permit 
the use of the property for military use under a right-of way 
instrument. If the legislative withdrawal is not enacted, the use of 
the training area will be suspended and the Department will lose access 
to valuable training areas, operational readiness will be negatively 
impacted and training costs will increase.
    MCAGCC Twentynine Palms.--At MCAGCC Twentynine Palms, the 
Department proposes to withdraw approximately 154,000 acres of public 
lands adjacent to the Combat Center. The added training lands would 
create a training area of sufficient size with characteristics suitable 
for the Marine Corps to conduct Marine Expeditionary Brigade (MEB) 
level training. MEB training requires sustained, combined-arms, live-
fire and maneuver training of three Marine battalions with all of their 
associated equipment moving simultaneously towards a single objective 
over a 72-hour period. The Department has no other training area within 
its inventory, including the National Training Center at Fort Irwin, 
California, where it can conduct such training.
    The Department has worked since 2007 with the Department of the 
Interior, the BLM, and the Federal Aviation Administration in 
preparation for the withdrawal. During that period, the Department of 
the Navy has received numerous comments concerning the potential loss 
of use of the proposed withdrawal property to off-road recreational 
vehicle use. The Department's proposed withdrawal provides for 
continued access by off-road recreational vehicles to just under half 
of the Johnson Valley Off-Highway Vehicle (OHV) area. About 43,000 
acres of the withdrawn lands will be open to year-round OHV use and an 
additional 43,000 acres of the withdrawn lands will be available to OHV 
use for 10 months out of the year provided there is no active military 
training. Without the legislative withdrawal of these lands, the Marine 
Corps will be unable to train its premier forcible entry force, Marine 
Expeditionary Brigades, to deploy and perform the missions and 
operations that the Department requires of them.
    Because of the looming expiration dates of the current withdrawals 
for NAWS China Lake and CMAGR and the BLM issued right-of-way for the 
Limestone Hills Training Area, as well as the continuing Marine Corps 
training requirement shortfalls, DOD, with DOI's concurrence and 
cooperation, is leading the renewal process and proposes that the 
withdrawals be enacted with the fiscal year 2014 National Defense 
Authorization Act. This is somewhat different, in that in past 
withdrawals, the Department of the Interior typically introduced the 
withdrawal proposals to its congressional committees. However, the 
Department opted to combine these four withdrawals into a single 
legislative proposal. Unlike prior legislative withdrawals which were 
uncodified, stand-alone provisions of law, DOD is proposing that these 
withdrawals be made in a new chapter of title 10, United States Code. 
This would allow commonality among the withdrawal provisions, place 
them in a location that is easy to find and refer to, and, if used for 
future withdrawals, reduce the need to reconsider and revise provisions 
on responsibilities, rights and requirements with each proposal. An 
important objective of the consolidated approach is to make the 
withdrawal process substantially more efficient.
    The need to enact legislation and authorize these four withdrawals 
is urgent. The consequences of failing to enact withdrawal legislation 
could, in some of these instances, cause severe impacts on the 
Department if it is forced to stop training and operations. In all 
cases, the Department has a compelling need for the withdrawn land in 
order for it to successfully conduct its training, missions and 
operations with the capabilities and competence that it must maintain.

    Senator Johnson. Thank you.
    For the information of Senators, we will begin with a 7-
minute round of questions. We will use the early bird rule, and 
I will recognize members from alternating sides in the order in 
which they arrive.

                       PRESSURES ON MILCON BUDGET

    Secretary Hale, as I mentioned in my opening statement, I 
am concerned that MILCON will have a place at the table when 
upcoming decisions are made in light of the overall constraints 
on the DOD budget. I fully understand the priority of 
operational readiness, but I also understand that MILCON plays 
an important role in readiness, not only in providing mission-
critical training and operational facilities, but also in 
providing for military families during wartime operations.
    Last year, the Air Force took what it called a strategic 
pause in MILCON to fund higher priorities. Sustainment, 
Restoration, and Maintenance (SRM) is being underfunded by all 
of the services in both fiscal years 2013 and 2014 due to 
budget constraints. I worry that MILCON, especially quality of 
life MILCON, will fall victim to budget pressures. Could you 
comment on that?
    Mr. Hale. Well, Mr. Chairman, I think there is a risk. 
First, let's hope that we can reach a broad budget agreement, 
that the Congress can work with the administration, and we can 
go back to the levels that appear in both the House and Senate 
budget resolutions for fiscal year 2014 for Defense. They are 
all pretty consistent with the President's budget request. So 
if there were a broad budget deal, it seems to us we will get 
back to the level that both the President and the Secretary of 
Defense believe is appropriate.
    But if we find ourselves taking $52 billion out of that 
request, as would be required if there is no changes in the 
Budget Control Act, then the suddenness of that decline will 
cause serious problems. You would need to cut force structure, 
and we will if we are allowed. But you generate very little 
savings in the first year because it takes a while for people 
to leave. Modernization will certainly have to be cut severely, 
but there is only so much you can do. I think in that case, 
there will be a risk to military construction.
    We want a balanced drawdown. That is the right way to do 
this. What we need is some time to do that and a ramp down if 
we're going to go to a lower level rather than falling off a 
cliff. So let's hope that either we can stay at the level that 
we believe is the right one, or we can drawdown gradually. If 
we fall off the cliff, I think there is a risk. I hope I 
haven't been too blunt.
    Senator Johnson. Yes. You are not.
    Secretary Hale, I understand that OSD and the services 
believe they can deal with the fiscal year 2013 MILCON 
sequestration without major problems by applying funds from bid 
savings to backfill any project shortfalls. However, if bid 
savings continue to be used to backfill current projects, this 
ability will likely diminish. Does OSD have a plan B for 
executing the fiscal year 2014 MILCON under a sequester if 
future bid savings are not sufficient?
    Mr. Hale. Well, I wish you had said plan B and stopped 
there rather than under sequestration. My preferred plan B, as 
I have said, would be a broad budget deal that avoids 
sequestration. If it happens, I think you are right. I mean, we 
still may see some bid savings as the economy recovers, but I 
suspect you are right, that they will get smaller, and I think 
we will be forced in that case into changes we don't want to 
make in the scope and timing of these projects. Let's hope not.
    As you said, we will avoid most of them this year. We are 
still looking at some of the details. I don't want to sit here 
and tell you there won't be effects, but we don't believe there 
will be significant ones in 2013. I think there is more risk in 
2014.

                        QUALITY OF LIFE PROJECTS

    Senator Johnson. Secretary Hale, do OSD and the services 
have prioritization guidelines if necessary for fiscal year 
2014, and where do quality of life projects fall on that 
priority list?
    Mr. Hale. Well, I assume you are asking about the 
guidelines in the event of a big cut, right? We are working on 
that now. We still support the President's budget and I want to 
emphasize that point. As I said in my testimony, we are hopeful 
that there will be a budget deal that allows the Congress to 
support that level.
    We recognize that we may have to make changes, and so the 
Secretary has initiated his strategic choices and management 
review, which is looking at those priorities. So I think the 
answer to your question, Mr. Chairman, is we understand that we 
need to maintain our facilities. I was in the Air Force in the 
1990s. We struggled. All of DOD did. We were under-investing 
significantly in facilities sustainment, restoration and 
modernization, and in MILCON as well. I think we have gotten 
well to some extent in the subsequent decade, but I do fear 
that we may be going back down that path again. I mean, it is 
certainly a risk, and if I am at the Pentagon at that point, I 
will be mindful of that risk.
    Senator Johnson. Mr. Conger, DOD is currently working on 
the European basin setting report that will align the master 
plan for the future force laydown in Europe. The report is 
currently scheduled to be released in December 2013. However, 
we hope to conference and pass the fiscal year 2014 MILCON bill 
before then.

                         EUROPEAN BASIN REPORT

    Can the European basin report be expedited so that the 
subcommittee can review it, or at least its interim findings, 
prior to conferencing with the House this autumn?
    Mr. Conger. I think the short answer is that we are 
certainly going to keep the subcommittee informed, and we are 
hopeful that we can provide some early information that will 
inform your process. The original schedule was to start in 
January, kicked off by the Secretary's memo, to finish with 
some results in December. Mr. Kendall, the leader of the 
process--he chairs the senior steering group that governs it--
has asked us to accelerate that as well, and he is looking for 
answers in October.
    There is a concentrated amount of effort that we are going 
to have to do in order to do this work. We will try to get some 
preliminary answers on that schedule. We are certainly going to 
work toward that end. Because this is not BRAC but rather BRAC-
like, we have more freedom to talk to the Congress about 
interim results, to tell you guys where we are going, to give 
insight into which bases might very well be the enduring ones 
in advance of the final product. In BRAC, that wouldn't be 
possible. In this analysis, it would be.
    Senator Johnson. One last question. In the 2014 budget, 
there are numerous requests for projects located in Europe. How 
can this subcommittee be assured that the fiscal year 2014 
project requested in Europe will be supported by the findings 
of the pending report?
    Mr. Conger. It's a fair question. Recall back when we have 
conducted BRAC rounds before, we didn't have any sort of a 
MILCON pause then. We are not intending to have a MILCON pause 
in Europe while we are doing this analysis. However, our goal 
is to be sure to inform the subcommittee as results become 
apparent so that we don't make investments in places that we 
don't expect to be enduring. I think the plan that you have in 
front of you actually has construction at locations we expect 
to hold onto. That said, we will commit to have a regular 
conversation with this subcommittee so that we can inform your 
process as you go forward.
    Senator Johnson. Senator Kirk.
    Senator Kirk. Thank you, Mr. Chairman. I have one strategic 
question. More and more, I am worried about MILCON and Guam, 
and I want to make sure we can eventually defend that 
investment, no matter what, for the United States, since the 
President has outlined the importance of the Pacific. My hope 
is that you guys could come forward with us for making 
permanent the THAAD deployment there, and that we can build a 
structure around that to preserve that asset out of MILCON. For 
lack of a better term, I will call it a THAAD-in-the-box just 
to pop out and make sure we defend our enormous investment in 
Guam so that that entire infrastructure is always there when we 
need it.
    Mr. Hale. Well, I think I need to--I don't know if I can 
make any full commitments, Senator Kirk. We have the fat over 
there for obvious reasons in connection with North Korea, and 
it's an important deployment, and I think we will be looking 
carefully at our next steps. But I am not going to sit here and 
tell you I have a firm answer to your question.

                           INVESTMENT IN GUAM

    Mr. Conger. I think that we are certainly committed to 
moving forces to Guam into the plan moving forward, and the 
Navy panel that is coming up behind me is going to be able to 
answer these questions to a larger degree. So rather than dance 
up here and come up with an incomplete answer, I think that we 
might defer the questions to them.
    Senator Johnson. Senator Udall.
    Senator Udall. Thank you, Chairman Johnson and Ranking 
Member Kirk. And I want to thank everyone on the panel. Thank 
you for your service, and thank you for being here with us 
today.
    As you know, in New Mexico, military construction is very 
important to our bases. They are important for providing 
important mission capabilities to our soldiers, and also 
important for ensuring that there is adequate quality of life 
for both servicemembers and their families. I am supportive of 
the President's request for military construction in New 
Mexico. Thank you for working to ensure that our soldiers, 
sailors, airmen, and marines have the facilities they need to 
train, operate, and carry out their missions.
    However, I have to tell you, I am also skeptical about the 
need for another BRAC. We need to know a lot more from DOD 
before we move forward and authorize another round of BRAC.

                    WHITE SANDS MISSILE RANGE (WSMR)

    Now to questions, Mr. Conger. I want to thank you for the 
time you have spent with the New Mexico delegation and 
addressing the important issues posed by the Sunzia 
transmission project and the White Sands Missile Range (WSMR). 
My understanding is that a technical working group has been 
formed by the Department of Defense to explore options to 
mitigate against any impacts the transmission line might have 
on WSMR's national security missions. The New Mexico delegation 
has encouraged the projects sponsor to minimize any impacts to 
WSMR, but also believes that transmission infrastructure is 
very important to tap New Mexico's vast renewable energy 
resources. I am urging DOD and the Bureau of Land Management 
(BLM) to continue to work together to resolve these difficult 
issues.
    Along those lines, I would like to ask about possible DOD 
mitigation options. Has DOD examined modification to military 
tasks and evaluation activities, military training routes or 
military training procedures, or the acquisition of new systems 
by the DOD and other departments and agencies of the Federal 
Government as a possible way to mitigate against the preferred 
route?
    Mr. Conger. The short answer is yes. We have looked at a 
variety of impacts, and we certainly don't want to highlight 
problems when we can simply get around them. There are 
problems. If the line does go in without any sort of 
mitigation, it will impact test programs that are going to be 
difficult to replicate and are difficult to change. I certainly 
would be happy to offer you a briefing on more specifics on 
that particular program that might get into the classified 
arena.
    That said, we are working with BLM to identify mitigations 
if the line goes in along that route. The possible mitigations 
could include specific siting to minimize impacts, burial of 
portions of the route. There are a variety of items that we 
have outlined both to the developer and to BLM, and we hope to 
be able to come to resolution on those.
    Senator Udall. Thank you for doing that. Has DOD considered 
the cost of military construction for constructing a new launch 
facility south of the current desert ship which could meet 
mission needs? And if not, when does DOD plan on determining if 
such a facility is a feasible mitigation option?
    Mr. Conger. I would like to defer that specific question 
for the record because I think that we are going to need to 
talk to the specific program manager to get you the details on 
that. But the short answer is that desert ship is close to the 
southern edge of the installation, and as it has been outlined 
to me, there is not a whole lot of room for it to move, even if 
we were going to invest the money to use that as an 
accommodation for this particular situation.
    Senator Udall. Thank you, and we would be happy to take you 
up on the briefing that you mentioned.
    In 2011, the Congress appropriated military construction 
funds for barracks at White Sands Missile Range. To date, we 
have only heard excuse after excuse why this project has not 
broken ground. Our soldiers at White Sands Missile Range 
deserve better, and I believe that it is about time that DOD 
and the Army carried out this appropriation. What can you tell 
me about the status of the barracks, and when will we be able 
to see this project get started at White Sands Missile Range?
    Mr. Conger. I have to admit, I am not familiar with the 
particular project. We will get you an answer for the record.
    [The information follows:]

    An fiscal year 2011 MILCON project was authorized and appropriated 
to replace the existing barracks at White Sands Missile Range. The 
project was designed and advertised for construction award, but was 
placed on hold pending final decisions in force structure. If the final 
decision in force structure continues the requirement to station the 
2nd EN BN at White Sands Missile Range, the replacement of the barracks 
may be prudent. The existing barracks meet Army standards and currently 
have an occupancy rate of 79 percent. The Army will continue to provide 
routine maintenance and repair of the existing barracks until a 
decision to proceed is made.

    Senator Udall. Okay, thank you.

                         HIGH-SPEED TEST TRACK

    The Central Test and Evaluation Investment Program has been 
a crucial program for defense testing, including testing done 
at Holloman Air Force Base's high-speed test track. The track 
is a cost-effective alternative for reducing expensive air 
vehicle testing. The current track, however, is limited to 
useful speeds up to Mach 1, and DOD is currently working on 
programs which far exceed this capacity.
    Is DOD still committed to the high-speed test track? Would 
DOD support updating this technology to allow vibration-free 
testing up to Mach 3 in order to expand ground-based testing at 
reduced cost compared to airborne testing?
    Mr. Hale. I think we'll have to take that one for the 
record, too. I apologize. Maybe some of our subsequent 
witnesses can help you. I'm sorry.
    [The information follows:]

    Question. Is DOD still committed to the high-speed test track?
    Answer. Yes. The Holloman High Speed Test Track (HHSTT) is 
recognized as a national test and evaluation (T&E) asset and included 
as a component part of the DOD's designated Major Range and Test 
Facility Base. The test capabilities resident at the HHSTT are viewed 
as important elements that fill the gap between laboratory 
investigations and full-scale flight tests.
    As a point of clarification, the HHSTT is currently capable of 
operations exceeding Mach 9. The technology referenced in the question 
is most probably the Holloman Magnetic Levitation Track (MAGLEV) 
currently being developed to provide a low vibration environment for 
payloads on rocket-propelled sleds for speeds from subsonic to Mach+. 
The MAGLEV can now achieve Mach 1 speed and future plans increase this 
capability to Mach 3.
    Question. Would DOD support updating this technology to allow 
vibration-free testing up to Mach 3 in order to expand ground-based 
testing at reduced cost compared to airborne testing?
    Answer. Yes, but there is concern that the technology may not be 
mature enough for full-scale development at this time. The suggested 
update to technology might be a candidate for either an Air Force 
budgeted capability improvement or possibly as a Service proposed 
Central Test and Evaluation Investment Program (CTEIP) project. CTEIP 
competitively evaluates proposed projects that best align with the 
objectives of the Strategic Plan for DOD Test and Evaluation Resources 
and provide enterprise solutions that benefit the Department as a 
whole.

    Senator Udall. Okay. Just as a final comment here and 
focusing back on BRAC, it seems to me that with the large 
numbers of foreign bases we have, that that is the first place 
we ought to be looking. I know from your comments that we have 
made some progress there, and you have listed this out, that 
you have turned 100 sites in Europe back to their respective 
host nations and that the Army is planning to close 33 
additional sites between 2013 and 2016. But I think it is 
important that we see the overall plan and understand the 
savings, how much has been done there. I would just like a lot 
more transparency on that front to know that you have done a 
thorough analysis, that you have really looked hard at that and 
you have squeezed out the savings that can be had there before 
we look at a domestic BRAC.
    So with that, I really appreciate your service.
    Mr. Hale. May I just respond briefly?
    Senator Udall. Yes, please.
    Mr. Chairman, I'm out of my time.
    Mr. Hale. All right. Well, I will be very brief.

                            BASING DECISIONS

    You know, we face some really serious budget problems, and 
I would urge you to let us proceed concurrently. We know that 
we are going to be able to make changes in our European basing, 
but we also need to make changes in the continental United 
States, and we can only do those effectively and fairly with 
BRAC. It takes several years for a BRAC to come into being.
    So I believe we need to get started, and we will obviously 
provide you every bit of information we can along the way about 
the European efforts. But I would hope you wouldn't delay this 
request. We are costing the American taxpayers more money.
    Senator Udall. Well, when I talk about overseas bases, I am 
talking about our bases all over the world. I highlighted the 
European because that is in your statement, but I think you 
need an overall analysis of all of those bases and tell us what 
the plan is, tell us how much the savings is so that we can see 
you have really done the analysis and done the work.
    Sorry, Mr. Chairman, for going over. Thank you very much.
    Senator Johnson. Senator Collins.
    Senator Collins. Thank you, Mr. Chairman.

                    FURLOUGHS OF CIVILIAN EMPLOYEES

    Secretary Hale, I met this morning with a group of 
supervisors from the Portsmouth Naval Shipyard in Kittering, 
Maine, and they were extremely persuasive in presenting me with 
additional data to supplement that which I have already brought 
to your attention and to the Secretary's attention, along with 
my colleague Senator King, that suggests that if you impose a 
disruption on a ship's maintenance or modernization schedule at 
one of our public shipyards--and Kettering, as you know, 
overhauls submarines--that you end up paying more in the long 
run than if you had kept on schedule, not to mention the fact 
that the submarines are going to be delayed in being returned 
to the fleet and the obvious impact on readiness that that has.
    Yesterday, Assistant Secretary of the Navy, Sean Stackley, 
testified before an Armed Services Sea Powers Subcommittee 
hearing that there is going to be more than a one-for-one 
impact if you furlough civilian employees at one of our public 
shipyards, and he went on to say, ``Everyone understands that 
the shipyards are a special case in terms of direct impact on 
readiness,'' and he said that the shipyards are ``in the mix 
for possible exceptions to the Department-wide furloughs.''
    The fact is that if we furlough these employees and then 
you have not budgeted for increased costs in fiscal year 2014, 
the costs are very real. They are going to occur to both the 
taxpayer and the military. That's why the Navy has come up with 
an alternative approach that still meets the budget targets but 
does so without resorting to furloughs.
    So I would like you to give me your view on whether we 
should be accepting the Navy plan, as I believe we should, to 
avoid these higher costs and these adverse impacts.
    Mr. Hale. Well, Senator Collins, Secretary Hagel hasn't 
made a decision yet, so I am not going to get ahead of my boss. 
But let me tell you, we are faced with a truly nasty set of 
choices. I mean, the United States Air Force has stopped flying 
in 12 combat-coded squadrons. The Army has stopped all of its 
combat training center rotations for the rest of the year. Many 
of our units in the Army and the Navy will be below acceptable 
readiness levels by the end of the year if the sequestration 
continues.
    We are actively looking at ways to mitigate those problems, 
and we are faced with some truly nasty choices, like will you 
take an action over here that you know is stupid--furloughs are 
a bad idea for everybody--in order to avoid an action even more 
stupid over here? Like I said, I am not enjoying this job right 
now. But we haven't made a final decision, and we are well 
aware, the Navy has made this abundantly clear, their feelings 
on this issue. We haven't made a final decision, so I can't 
give you that decision.
    Senator Collins. Well, it just seems to me that if a 
service can come up with an alternative way of meeting the 
budget target, that that ought to be accepted, embraced, and 
applauded.
    Mr. Hale. Well, perhaps we should move that money if 
something over here in the Air Force and the Army is even more 
stupid. I mean, that is the dilemma we face. It's a really 
nasty set of choices.
    Senator Collins. Well, it seems to me each service is 
responsible for coming up with its own plan, and has done so. 
The National Guard also has a plan to avoid furloughs and still 
meet the targets. I'm just perplexed by the reluctance here.
    I want to bring up a related issue, and that is, according 
to the most recent figures from your office, the shortfall in 
the military readiness accounts is not due solely to 
sequestration, and let me go on record again. I agree with you 
that sequestration is an extraordinarily poor policy, and it 
makes no sense not to set priorities. But that's what the Navy 
is trying to do, is set priorities. It shouldn't be blocked 
from doing so.
    But the fact is that a portion of the shortfall in the 
readiness accounts, about 25 percent, maybe even a little more, 
is not due to sequestration. It's due to unanticipated costs 
related to the wars.
    So is the Department going to submit a supplemental request 
to cover these unanticipated war costs? It's not fair to 
furlough employees when the Department understandably did not 
anticipate correctly what the war costs would be. You should be 
coming to us for additional funds for the war costs.
    Mr. Hale. Well, I don't think we will submit a supplemental 
request. I mean, in this environment, I think it would be a 
fool's errand. But we will submit a reprogramming request. Now, 
unfortunately, Congress also limits the amount of transfer 
authority we have, and although we asked for an increase, it 
was not granted. So we won't be able to meet all of the wartime 
shortfalls. But we will very soon, I hope, submit a large 
reprogramming request to try to move money from investments and 
military personnel accounts into the operation and maintenance 
accounts to significantly reduce that wartime shortfall or meet 
much of that gap.
    Senator Collins. Well, I personally think that it's not 
fair for the Department to blame the readiness crisis entirely 
on sequestration, even though I am totally opposed to 
sequestration, when in fact at least one-quarter of it is due 
to unanticipated war costs.
    Mr. Hale. I agree with that. Whenever I speak, I always say 
it's not just sequestration, there are problems with the 
wartime costs. It's also our choice, which we thought we had to 
make to protect the wartime operating costs. We are not going 
to leave General Rumford and his troops over there without the 
resources they need, and that means more money out of the base 
budgets. So that is another problem.
    Senator Collins. Which is why I would urge you to submit a 
supplemental for those unanticipated war costs.
    Just one more point, if I may, Mr. Chairman. Since so many 
of us mentioned the proposal for another round of BRAC, I just 
want to remind all of us what the results of the 2005 BRAC 
round cost data were, and it's why you see such skepticism 
among so many members of this subcommittee.
    The Government Accountability Office (GAO) did an analysis 
which was released in June of last year and found that the one-
time cost grew from $21 billion, estimated by DOD, to $35 
billion. That was a 67-percent increase. Overall, the military 
construction costs increased 86 percent from the original 
estimate, $13.2 billion to $24.5 billion. And the 20-year net 
present value savings expected to be reaped by the Department 
of Defense decreased by 72 percent. I'm not saying that there 
aren't annual recurring savings, but the fact is the Department 
was way off in its estimates, and from my perspective we lost 
some valuable assets in this country.
    I can't tell you how many very high-ranking naval officers 
have told me what a mistake it was to close the Brunswick Naval 
Air Station, the last Active Duty air station in the Northeast, 
and now the P-3s have to come from Jacksonville, Florida, to 
patrol the North Atlantic shipping lanes, and we've lost a lot 
of other advantages as well. So I just want to go on record as 
sharing the skepticism of my colleagues about having another 
BRAC round.
    Thank you, Mr. Chairman.
    Senator Johnson. Senator Begich.
    Senator Begich. Thank you very much, Mr. Chairman. Let me 
follow up and associate at least some of my comments with 
Senator Collins on the issue of furlough, if I can just ask 
this question. Have you received, you or your office or other 
offices, from the Navy or Air Force other proposals to save the 
money rather than furloughs?
    Mr. Hale. Yes.
    Senator Begich. Can you share that with the subcommittee?
    Mr. Hale. I think we probably already have in testimony. 
But I can tell you what they are. We started in January with a 
whole set of initiatives including hiring freezes, and reducing 
facilities, sustainment, restoration and modernization. As 
discussed today, we also cutback in base operating costs. All 
of the services did that. The next step, which you will see 
soon, is a reprogramming effort to transfer money to offset the 
shortfalls, mainly the wartime shortfalls. That was all we 
could do within the constraints of the law other than cutting 
training and maintenance, and we have made far-reaching cuts--
--
    Senator Begich. Can you----
    Mr. Hale. So furloughs are the last issue. The question is 
do we cut more training and maintenance, or do we move to 
furlough?
    Senator Begich. Just on those two departments, I would like 
to, even if you have--I don't have them right here, so I would 
like it if you would submit----
    Mr. Hale. Sure, we'd be happy to get you that information.
    [The information follows:]

    To buy back civilian furloughs, the Navy would defer 50 percent of 
its fiscal year 2013 restoration and modernization program for reducing 
Q4 barracks. This could delay the Department's goal of maintaining all 
barracks at Q1 and Q2 condition by fiscal year 2022, but is a lower 
overall readiness impact than civilian furlough. Additionally, Navy 
would slightly reduce funding for fleet operating targets for ship 
repair parts/consumables/repairables and other administrative 
requirements.
    To buy back civilian furloughs, the Marine Corps would defer $58.3 
million of facility sustainment, restoration and modernization projects 
planned to improve the habitability at headquarters elements and bases 
and stations across the Marine Corps. This action could result in 
falling short of the facility sustainment goal, but balances overall 
readiness impacts and recognizes the critical work performed by 
civilian marines.
    To enable the buyback of civilian furloughs, the Air Force must 
have full support of its $1.8 billion emergency reprogramming request 
and, even then, the absence of furloughs would end any chance of 
restarting much-needed flying operations. Buying back 11 days of 
civilian furloughs would cost approximately $220 million, which is 
roughly equivalent to the cost of flying hours necessary to return at 
least 10 currently stood down active combat coded fighter and bomber 
squadrons to combat mission ready flying rates; as well as associated 
funding for ranges and a portion of training forces. Training forces 
include aggressor and weapons squadrons, as well as their deferred 
weapons system sustainment.
    While these specific buyback proposals have been received, 
furloughs must be considered in view of the Department's overall fiscal 
situation. The Army is having significant problems meeting wartime 
needs. Part of the solution is to transfer funds from the Navy to Army, 
as has been requested in the current reprogramming action. Furloughs 
help make this possible. As noted above, Air Force furloughs may help 
restart some flight training.

    Senator Begich. That would be great.

                        UNANTICIPATED WAR COSTS

    And on the unanticipated war costs, again, it may be in the 
mill here, but I know you're not going to request that, but can 
you give me something that just says here's what the 
unanticipated war costs were, even though you're not asking for 
it, to say what that number is?
    Mr. Hale. Sure. I can tell it to you, too. It ranges from 
$7 billion to $10 billion. Most of it is the Army, primarily 
two things.
    Senator Begich. Is it mostly transferring of goods back?
    Mr. Hale. Two things. That's part of it, but that's a 
smaller part of it. We didn't anticipate the closure of the 
ground lines of communication in Pakistan, obviously, and the 
sluggish reopening of them, which has raised our transportation 
costs. But the bigger part of it is higher than expected 
operating tempo, and it's not just the Army. It occurred in the 
Air Force and to a lesser extent in the Navy, as well. But, 
yes, I can give you the numbers.
    Senator Begich. That would be great. I'm just trying to 
watch my time here. So let me, if I can, last year, when we did 
the annual authorization bill, one of the pieces we changed in 
the law in DOD, the ability to realign, to limit DOD's ability 
to realign enclosed bases, like section 993 and 268 of title 
10, which I worked on when I was on the Armed Services 
Committee to strengthen that. The idea was to ensure that there 
wouldn't be a backdoor BRAC process, and I want to make sure--
I'm going to be very specific here.

                         EIELSON AIR FORCE BASE

    As you know, Eielson Air Force Base was slowly being 
stripped away or proposed to be stripped away, and other bases 
were being affected around the country. I want to make sure you 
concur with the understanding that Congress has on this, that 
you would not propose, like last year, when the Air Force tried 
to backdoor an effort, especially on Eielson Air Force Base, do 
you concur with the language and what its intent is?
    Mr. Hale. Well, we certainly concur. We're going to obey 
the law.
    Senator Begich. Good. That's the first question. Good.
    Mr. Hale. Right.
    Senator Begich. So the second question is do you also agree 
that the Air Force, again because of the changes, they must 
seek congressional approval before proposing any significant 
realignments at Eielson or any other installation, based on the 
law?
    Mr. Conger. Let me take that one. The language, as far as 
realignments go, requires notification to Congress, and that is 
still the law. We are still going to follow the law.
    Senator Begich. You acknowledge that's the rule.
    Mr. Conger. The second piece of the puzzle, though, if I 
recall, if I am getting the reference that you made for a 
backdoor BRAC, the rule said you can't make transfers that 
lowers the number below the threshold of 300 and then say, oh, 
it's below 300, we can close the base.
    Senator Begich. Correct.
    Mr. Conger. We acknowledge the new rule and the constraint 
that that places on us.
    Senator Begich. Very good. I'm doing that because I can 
tell you in Fairbanks, Alaska, where Eielson touches, you hear 
rumblings all the time, and I want to make sure it's clear, and 
this is a great place to do it, to make sure it's on the record 
and that it's very clear how this process works, because that's 
what was happening last year. So we appreciate that kind of 
acknowledgment.
    Mr. Conger. So the question then becomes is what the Air 
Force proposed a backdoor closure?
    Senator Begich. Last year it was.
    Mr. Conger. The idea that was the base going to be closed 
or kept at sort of a more empty----
    Senator Begich. Stripped down.
    Mr. Conger. And a stripped-down base is not a closed base.
    Senator Begich. Well, I'll tell you, to the Fairbanks 
economy, it sure as heck is.
    Mr. Conger. I understand that as well, and I don't mean to 
debate that point. I just want to be clear that the impact of 
the legislation said you can't close the base. Well, actually, 
it said you have to wait a certain amount of time.
    Senator Begich. Right. But you understand that the new 
piece of the puzzle was the 300 threshold, because what was 
slowly happening was it was being picked away. You're right, we 
don't want to debate this because we agree on the law. I just 
remember when I was mayor of Anchorage and they would say, my 
guys would say in transit, well, this bus service isn't getting 
a lot of riders. And I would say, well, what's the frequency? 
They'd say, well, it's only once a day. And I'd say, well, of 
course. And then they'd say, well, we should close it because 
there's not a lot of riders, right? But if they did it five 
times a day, they'd have a lot more riders, a lot more use. So 
I just want to make sure that we are clear that the threshold 
is there and that you understand and concur with the law, and 
it sounds like the answer is yes.
    Mr. Conger. Of course, we're going to obey the law.
    Senator Begich. Let me go to the broader BRAC, if I can, 
because I think, again, I associate my comments with many 
people here. I know before I got here, Senator Kirk made some 
additional comments on it. I agree with him, we should be 
continuing to look overseas and seeing where we can and squeeze 
down where we can there.
    On the $12 billion or so that you estimate that you are 
saving on the last BRAC per year----
    Mr. Conger. The last five.
    Senator Begich. The last five, can you give me the detail 
of how those savings are associated, where they come from, and 
then what other agencies unrelated to the Air Force--oh, I'm 
sorry--to the DOD that may be recurring costs but are not 
included in your analysis, if any?

              BASE REALIGNMENT AND CLOSURE (BRAC) SAVINGS

    Mr. Conger. I'm not sure how we would calculate how much 
additional cost a different agency incurs with the BRAC 
decision.
    Senator Begich. Let me do it a different way, then. Can you 
just indicate what agencies may be affected? And then we'll 
talk to the agencies. Like the Department of Education was 
probably affected to some degree, right? Because you had 
education facilities.
    Mr. Hale. This goes back to the 1980s.
    Senator Begich. Well, do what you can, okay?
    The other, if I can, we've asked--I sent a letter last 
week, but this has been a pending request by the Army, to go 
look at Eielson Air Force Base for some of the work they are 
going to do on unmanned aircraft, because they see opportunity 
to maximize some of the use of that facility there for saving 
money, which I think we are all into that. They have had this 
request sitting at the Air Force side for months, almost 5 
months, with no answer. It makes no sense, what I'm about to 
say to you. The Air Force will say to the Army, hey, sure, no 
problem, go look at our assets up there and determine if that 
fits into your plan, because if it does, with unmanned 
aircraft, with unmanned aircraft utilization, then let's 
consider it. But the Air Force has been sitting on that request 
by the Army for 5 months, and I just sent a letter last week 
trying to jack that loose. Can you look at that? I don't 
understand why----
    Mr. Hale. I'm not familiar with the details.
    Senator Begich. It seems so simple, a base that has 
opportunities. So if you could do that, I'd greatly, greatly 
appreciate it.
    Mr. Conger. Sure.
    [The information follows:]

    There are several ways in which the costs associated with 
constructing a facility by DOD differ from the private sector. While 
there were no details provided on the $40 million and $14 million 
school projects, in general, differences in the costs can be attributed 
to whether any support facilities are included in the private sector 
project, how the educational requirements are factored in each project, 
and the specific Federal statutes and regulations that apply to DOD.
    Specific to school designs, DOD costs are higher because designs 
reflect costs of adopting 21st Century Education Specifications 
developed by the DOD Education Activity. These specifications reflect 
lower student/teacher ratios, thereby requiring more classrooms and 
teachers for a given number of students. Most public school districts 
have not adopted these standards.
    More generally, the Department recently completed a study to 
identify and quantify factors that contribute to cost differences 
between DOD and private sector construction projects. The study 
concluded that statutes, regulations, and policies that apply to the 
DOD and not to the private sector create a cost premium the study 
estimated that DOD has to pay 20-30 percent more for the same building 
type than it would cost for an equivalent private sector facility.
    Driving factors include: the application of prevailing labor wages 
required under the Davis-Bacon Act; DOD's internal design practices 
that differ from the private sector; anti-terrorism and force 
protection standards; Federal sustainability and energy-conservation 
standards; safety standards and enforcement; and base access 
restrictions for construction personnel and material delivery. DOD is 
looking further at the factors contributing to higher construction 
costs to determine where we can make changes that continue to provide 
quality facilities at a lower cost.

    Senator Begich. Thank you all very much.
    Thank you, Mr. Chairman.

                           SCHOOL RENOVATION

    Senator Johnson. Senator Kirk and I have one last question. 
Mr. Conger, the fiscal year 2014 budget request includes $798 
million to renovate 17 DOD schools. Seven of these projects are 
elementary school replacements in the United States. It costs 
around $40 million each. However, the National Clearinghouse 
for Educational Facilities places the average national cost of 
a comparable private-sector 600-student elementary school at 
$14.8 million. What are the reasons for this dramatic cost 
difference between DOD schools and the equivalent private-
sector schools? Are there ways that the DOD can maintain high 
standards while getting closer to private-sector costs?
    Mr. Conger. Let me answer that question in two parts. We 
are fully cognizant of the fact that it costs more money to 
build the same building on a base with military construction 
than it does for the commercial sector to build a similar 
building off base. We have been exploring the reasons for that 
and studying it, and there are a few things that bubble up as 
to the rationale.
    There are Federal rules. When you spend Federal money, 
there is additional regulation that is imposed, prevailing wage 
rates, et cetera. There are military requirements on how one 
can construct the building. There are anti-terrorism force 
protection requirements that aren't required off base. There 
are additional costs to construction when one has to get 
through security. Just the access to the site adds cost.
    That cost delta is significant but not on the scale that 
you just described. The information that we've got implies 
something on the order of a 30-percent premium that we pay. We 
are looking at those rules to find out what is in our control 
and what we can change in order to create a more balanced 
number, something that has less of a premium. We want to get 
the same building for less, we really do.
    The second piece of this is the school-specific piece. In 
order to figure out why a $40 million school, on the one hand, 
has a comparable analog of $14 million--I think those were the 
numbers you cited--that we are going to have to dig into a 
little bit more because I wasn't familiar with that order-of-
magnitude difference.
    [The information follows:]

    On May 28, 2013, the Secretary of the Air Force approved the Army's 
request to conduct a site survey of Eielson to assess its potential to 
host a MQ-1C Gray Eagle company. Once all the site surveys are 
complete, the results will be evaluated and a recommendation presented 
for decision. This decision is expected to occur later this summer.

    Senator Johnson. It's somewhat the same with the Indian 
country schools. I've been mystified, and as soon as you can 
come up with an answer, that is welcome.
    Senator Kirk.
    Senator Kirk. Mr. Chairman, I will turn to the Pacific, 
which I think I completely agree with the President on. I 
understand that we deployed B-2s to Anderson in Guam, but they 
do not have hardened facilities. I want to make sure that it is 
typhoon hardened as well and we don't lose an asset like the B-
2 that is essential to our diplomacy to calm the Koreans down.
    Mr. Conger. I know that we are investing a significant 
amount of funds in Guam for resiliency and hardening. The 
specific typhoon hardening that you are referring to, we can 
find out if the specs meet that requirement.
    Senator Kirk. Over to you, Mr. Chairman.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Johnson. This panel is excused.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
               Questions Submitted to Hon. Robert F. Hale
              Questions Submitted by Senator Mark L. Pryor
    Question. There are three fiscal year 2013 military construction 
projects in Arkansas: $6.8 million for Field Maintenance Shop, Army 
Guard, Searcy; $4.17 million for C-130J Flight Simulator Addition, AF 
Active Duty, LRAFB; and $26 million for C-130J Fuel Systems Maintenance 
Hangar, AF Active Duty, LRAFB.
    Have these projects been cut or delayed as a result of 
sequestration?
    Answer. The two fiscal year 2013 Air Force military construction 
projects (C-130J Flight Simulator Addition project and C-130J Fuel 
Systems Maintenance Hangar project) located at Little Rock Air Force 
Base, Arkansas, were not cut or delayed as a result of sequestration. 
The Air Force military construction account did not experience 
sequestration cuts because of crediting provisions in the current law.
    The Field Maintenance Shop project located at Searcy, Arkansas, and 
funded in the Military Construction, Army National Guard appropriation 
has been reduced by $214,000 due to sequestration. A below threshold 
reprogramming will be able to restore funding if necessary.
    Question. How many military construction projects have currently 
been delayed or canceled as a result of sequestration?
    Answer. At this time, our intent is to not cancel any projects and 
to date, no projects have been canceled as a result of sequestration. 
Due to the late receipt of fiscal year 2013 appropriations and the 
subsequent sequestration, all projects have been delayed. Further 
delays will be experienced for projects that will require congressional 
prior approval reprogramming to restore the lost sequestration funding 
to make the projects executable at full scope.
    Question. How much do you think it would cost to deal with any 
necessary contract renegotiations, penalties for delays, and any 
additional design, planning and engineering work needed to address a 
reduced project scope for fiscal year 2013 military construction 
projects?
    Answer. The Department does not plan to reduce the scope of any 
projects as a result of sequestration. At this time, the Department 
intends to use its reprogramming authorities to fund projects at full 
scope.
    Question. Does the fiscal year 2014 budget request account for the 
impacts of contract renegotiations, penalties for delays, and any 
additional design, planning and engineering work as a result of a 
reduced project scope for fiscal year 2013 military construction 
projects caused by sequestration?
    Answer. No. Our intent is to not reduce the scope of any projects. 
At this time, the Department intends to use its reprogramming 
authorities to fund projects at full scope.
    Question. Has the Department of Defense already begun new contract 
negotiations as a result of sequestration?
    Answer. No. Our intent is to not reduce the scope of any projects 
as a result of sequestration. At this time, the Department intends to 
use its reprogramming authorities to fund projects at full scope.
    Question. What is the impact on military readiness for fiscal year 
2013 military construction project delays or cancellations?
    Answer. At this time, the Department does not plan to cancel any 
projects as a result of sequestration. Due to the late receipt of 
fiscal year 2013 appropriations and the subsequent sequestration, all 
projects have been delayed. However, we do not anticipate any 
degradation of military readiness as a result.
    Question. Senate Report 112-173, to accompany S. 3254, the National 
Defense Authorization Act for Fiscal Year 2013, specifically addressed 
the ``Critical manufacturing capabilities and capacities'' within the 
defense organic industrial base. Specifically, the report states, ``the 
committee directs the Secretary of Defense to identify critical 
manufacturing capabilities and capacities that should be government 
owned and government operated, identify the level of work needed to 
sustain capabilities, and report to the congressional defense 
committees on these matters no later than February 28, 2013.'' When can 
Congress expect to receive this report?
    Answer. The Assistant Secretary of Defense for Logistics and 
Material Readiness is completing the required report. Consistent with 
the letter to you from the Under Secretary of Defense for Acquisition, 
Technology, and Logistics dated April 26, 2013, the Department 
anticipates providing the report by the end of June 2013.
    Question. Will the February 28, 2013, report address both the level 
of work needed to sustain capabilities, and the level of work required 
to remain a cost-effective production solution?
    Answer. The report required by Senate Report 112-173, which 
accompanied S. 3254, directs the Secretary of Defense to, `` . . . 
identify critical manufacturing capabilities and capacities that should 
be government owned and operated, identify the level of work needed to 
sustain capabilities and report to the congressional defense committees 
on these matters no later than February 28, 2013.'' Consistent with the 
letter to you from the Under Secretary of Defense for Acquisition, 
Technology, and Logistics, dated April 26, 2013, the Department 
anticipates providing the report by the end of June 2013.
    This report will identify workload estimates, in direct labor 
hours, required to sustain critical manufacturing capabilities. The 
report will not specifically address workload estimates required for a 
cost-effective production solution since this direction was not 
included in Senate Report 112-173. However, the Department has 
initiated a study to develop a proven, repeatable methodology for the 
identification of minimum sustaining workloads, economic sustaining 
workloads, and surge requirements necessary to protect critical 
manufacturing capabilities. The results of this study will be available 
by March 2014.
    Question. In 2010, the Department of Defense established a policy 
that new construction and major repair and renovation projects be 
certified at least LEED-Silver, or its equivalent; however, the 
Department has not clearly defined an equivalent standard. Further, it 
is my understanding that the LEED standard does not accept over 75 
percent of wood grown in the United States, therefore opening the door 
for use of foreign wood products. Is the Department updating its 
current policy and how is the Department making sure that all 
certification standards are treated equally?
    Answer. The Department has published a new building standard 
(Unified Facilities Criteria) that does not rely on third-party rating 
systems, but instead draws from consensus green building standards like 
ASHRAE 189.1. The new building standard establishes a minimum level of 
performance that all new buildings and major renovations must meet. 
This new standard does not articulate any preference for a third-party 
certification system or for a particular kind of wood.
    Question. I am concerned that specifically naming the LEED-Silver 
standard in the Department's policy creates a bias towards using the 
LEED standard despite existence of other acceptable standards, and in 
some cases, other standards may be more cost-effective. What are the 
other acceptable green building rating systems that the Department has 
determined to be equivalent to the LEED-Silver standard?
    Answer. In accordance with the Energy Independence and Security Act 
(EISA) section 436, the Department of Energy determines which green 
building rating systems are acceptable for use by Federal agencies. 
Notwithstanding the DOE decision, DOD has published a new building 
standard (Unified Facilities Criteria) that does not rely on third-
party rating systems, but instead draws from consensus green building 
standards like ASHRAE 189.1. The new building standard establishes a 
minimum level of performance that all new buildings and major 
renovations must meet. This new standard does not articulate any 
preference for a third-party certification system.
                                 ______
                                 
                Questions Submitted by Senator Mark Kirk
   base realignment and closure (brac) authorization--office of the 
                          secretary of defense
    Question. While Congress is debating the new BRAC proposal, the 
Department of Defense is conducting a study on European Infrastructure 
Consolidations. The goal of this study is to ``reduce expenses by 
eliminating excess capacity in Europe''. According to the DOD policy 
guidance, the services and COCOMS are to analyze capacity and compare 
the current facility inventory to the requirements of planned force 
structure. Unfortunately, this study is not planned to be completed 
until December 2013, well after Congress has to vote on the 
authorization for a new CONUS BRAC authority. Many members want to see 
what facilities will be closed in Europe and if forces will return to 
the United States before they agree to another round of closures in the 
United States.
    Mr. Hale, can you offer a reasonable explanation as to why we 
should vote to authorize another round of U.S. base closures before the 
Department completes the European Consolidation Study?
    Answer. BRAC is recognized as the only fair, objective, and proven 
process for closing and realigning military installations within the 
United States and its territories. Without statutory BRAC 
authorization, the Department is limited in its ability to reduce 
infrastructure in a comprehensive manner.
    The Department has initiated a comprehensive infrastructure 
analysis to identify opportunities for consolidation in Europe, beyond 
the significant reductions already accomplished in this area. This 
effort, however, is not focused on relocating forces and organizations 
back to the United States, but instead on trimming capacity that is 
excess to what is necessary to support our enduring presence in Europe. 
The process will ultimately result in a validation of those enduring 
European infrastructure requirements, providing an analytical basis to 
support sustainment funding and future recapitalization.
    Given the size of the current budget cuts and the uncertainty of 
the Department's future fiscal circumstances, it is unrealistic to 
expect all reductions to come from overseas sources. This is why the 
Department has requested authority to conduct a BRAC round, which is a 
critical element of our strategy to reduce infrastructure and personnel 
costs.
                guam--office of the secretary of defense
    Question. The Navy is requesting $318 million for projects in Guam 
while the Air Force is requesting $176 million, that's nearly a half a 
billion dollars this year alone. Looking back in 2013 we appropriated 
$102 million; $168 million in 2012; in 2011 we appropriated $246 
million; and in 2010 we appropriated $675 million. That means in the 
last 5 years alone the appropriations are nearing $2 billion. And, we 
are planning over $10 billion more once we work out the issue on 
transferring the marines there. That is a huge investment for one 
location--granted an important strategic location--but my point is with 
that investment we have not adequately planned to protect it.
    Mr. Hale, the original Guam master plan called for a missile 
defense of the island. Only recently did we even put a deployable THAAD 
unit on Guam. Will you comment from the OSD perspective why we have not 
adequately planned on a permanent missile defense to protect such an 
important yet vulnerable strategic location and will the current 
Secretary revisit that decision?
    Answer. Guam is clearly an important strategic hub in the Asia-
Pacific and the facilities there play a critical role in our ability to 
project power into the region. It is also a United States sovereign 
territory, and accordingly, we consider the defense of Guam and other 
U.S. territories against the threat of intermediate and long-range 
missile strikes a priority--a position demonstrated by our decision 
earlier this year to deploy a ballistic missile defense (BMD)-capable 
Aegis ship and the Terminal High Altitude Area Defense (THAAD) system 
to the island in response to North Korea's threat to strike U.S. bases 
in the Pacific with intermediate range ballistic missiles.
    We will continue to evaluate the requirement for forward deployment 
of missile defense capabilities in defense of Guam and the Commonwealth 
of the Northern Mariana Islands as the situation with North Korea 
unfolds. However, it's important to note that because global demand for 
missile defense assets exceeds their availability, the Department of 
Defense is purposefully developing an array of mobile, re-locatable 
missile defense capabilities--such as the Aegis BMD and THAAD systems--
that make possible our ability to shift additional assets into an area 
in times of crisis. Each of these systems is capable of providing 
protection to U.S. citizens and forces forward-deployed in our 
territories and foreign countries.
                         Department of the Navy

STATEMENT OF ROGER M. NATSUHARA, PRINCIPAL DEPUTY 
            ASSISTANT SECRETARY OF THE NAVY (ENERGY, 
            INSTALLATIONS AND ENVIRONMENT)
ACCOMPANIED BY:
        MAJOR GENERAL JAMES A. KESSLER, COMMANDER, MARINE CORPS 
            INSTALLATIONS COMMAND AND ASSISTANT DEPUTY COMMANDANT FOR 
            INSTALLATIONS AND LOGISTICS (FACILITIES)
        REAR ADMIRAL KEVIN SLATES, DIRECTOR, CHIEF OF NAVAL OPERATIONS, 
            ENERGY AND ENVIRONMENTAL READINESS DIVISION
    Senator Johnson. Will the second panel please be seated?
    I am pleased to welcome our second panel of witnesses. Mr. 
Roger Natsuhara, Principal Deputy Assistant Secretary of the 
Navy for Energy, Installations and Environment; Major General 
James Kessler, Commander of the Marine Corps Installations 
Command and Assistant Deputy Commandant for Installations and 
Logistics; and Rear Admiral Kevin Slates, Director, Chief of 
Naval Operations Energy and Environmental Readiness Division.
    This year's military construction and family housing budget 
request for the Navy and Marine Corps is $2.4 billion, roughly 
equal to the fiscal year 2013 request. I note, however, that 
the budget request for the Naval Reserve is decreased 33 
percent from the fiscal year 2013 request, $33 million from $49 
million. However, the Naval Reserve received a robust 88-
percent increase in fiscal year 2013. It is important that we 
continue to make wise, long-term investments in Reserve and 
Guard forces during this time of budget belt tightening.
    The Navy's MILCON request encompasses several important and 
evolving mission requirements, including the pivot toward the 
Pacific, the relocation of marines from Okinawa to Guam, and 
the continued build-up of facilities in Djibouti. I look 
forward to discussing these initiatives with our witnesses 
today.
    I thank our witnesses for coming today, and we look forward 
to your testimony.
    Mr. Natsuhara, I understand that yours will be the only 
opening statement. Your full statement will be entered into the 
record. Please proceed.

                SUMMARY STATEMENT OF ROGER M. NATSUHARA

    Mr. Natsuhara. Thank you, Mr. Chairman. Chairman Johnson, 
Ranking Member Kirk, and member Begich, I am pleased to appear 
before you today to provide an overview of the Department of 
the Navy's investment in its shore infrastructure. For fiscal 
year 2014, the Department is requesting over $12 billion in 
various appropriation accounts to operate, maintain, and 
recapitalize our shore infrastructure.
    This level of funding represents continued investment to 
enhance combatant commanders' capabilities, improve 
servicemembers' quality of life, and recapitalize aging 
infrastructure. The fiscal year 2014 budget also demonstrates 
the Department's commitment to energy security by funding cost-
effective projects that will improve our energy infrastructure 
and reduce our energy consumption.
    Additionally, the budget request provides $185 million for 
military construction and operation and maintenance projects to 
address critical requirements at our shipyards.
    Our request includes $1.7 billion in military construction 
projects supporting several key objectives of the Defense 
Strategic Guidance of 2012. For instance, the Navy and Marine 
Corps have programmed approximately $657 million to enhance 
warfighting capabilities in the Asia-Pacific region such as the 
new hangar, apron and infrastructure at Marine Corps Base 
Hawaii and the Navy's warfare improvements at Naval Base Guam; 
$200 million in projects such as the Broad Area Maritime 
Surveillance hangars in California and Guam; and the EA-18G 
Growler and P-8 Poseidon projects in Washington State that will 
ensure the United States remains capable of projecting power in 
anti-access and area denial environments.
    The Navy's investment in a barracks and armory at Camp 
Lemonnier, Djibouti, provides supporting infrastructure 
enabling Special Operations forces to carry the fight forward, 
conducting stability and counterinsurgency operations for U.S. 
Central and U.S. Africa Commands.
    The strength of our Navy and Marine Corps teams lies not 
only in advanced weaponry and faster, stealthier ships and 
aircraft. Our naval forces also derive their strength from the 
sailors and marines who fire their weapons, operate and 
maintain their machinery, fly the planes, and the families and 
civilians supporting them. Toward this end, the Navy and Marine 
Corps have programmed over $224 million in military 
construction funds for operational and technical training, 
professional development, and academic facilities; nearly $100 
million for unaccompanied housing; $463 million to support 
family housing construction and operations.
    Guam remains an essential part of the United States' larger 
Asia-Pacific strategy, which includes developing the island as 
a strategic hub and establishing an operational Marine Corps 
presence. The Department recognizes congressional concerns 
regarding execution of the Guam military realignment and is 
taking steps necessary to resolve critical issues that will 
resolve the construction program and move forward.
    Furthermore, the United States and Japan are continuously 
looking for more efficient and effective ways to achieve the 
goals of the realignment roadmap. Both countries remain 
committed to maintaining and enhancing their robust security 
alliance, and the United States remains committed to enhancing 
the United States-Japan alliance and strengthening operational 
capabilities.
    Our Nation's Navy and Marine Corps team operates globally, 
having the ability to project power, effect deterrence, and 
provide humanitarian aid whenever and wherever needed to 
protect the interests of the United States. The Department's 
fiscal year 2014 request supports critical elements of the 
Defense Strategic Guidance by making needed investments in our 
infrastructure and people and preserving access to training 
ranges, afloat and ashore.

                           PREPARED STATEMENT

    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. Thank you 
for the opportunity to testify before you today, and I welcome 
your questions.
    [The statement follows:]
                Prepared Statement of Roger M. Natsuhara
    Chairman Johnson, Ranking Member Kirk, and members of the 
subcommittee, I am pleased to appear before you today to provide an 
overview of the Department of the Navy's investment in its shore 
infrastructure.
              meeting the challenge of fiscal uncertainty
    The American public expects its 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 and whenever they may occur. We appreciate the support of the 
Congress in passing the Defense and the Military Construction, Veterans 
Affairs, and Related Agencies Appropriations Acts for fiscal year 2013. 
They provide us with the critical funding necessary to repair, 
maintain, and modernize our infrastructure and support new platforms as 
they arrive on station. Yet, since balanced deficit reduction was not 
enacted, the sequestration reductions must be taken from these funds 
and applied in a manner that provides no flexibility.
    The Department continues to consider options that could mitigate 
the impact of sequestration to the extent possible. With respect to 
military construction, Department of the Navy's objective is to 
preserve project scope and limit any project deferrals to the greatest 
extent possible. The Department intends to achieve this by 
reprogramming existing bid savings and any that may accrue in the 
future. The Department is still in the process of evaluating the 
precise impact of the sequester and will have more definitive 
information when our analysis is complete.
    The effects of the fiscal year 2013 sequester will persist beyond 
the current year and profoundly affect the Navy and Marine Corps' 
ability to carry out their missions in today's threat environment using 
the protocols and force structure that currently exist. Moreover, the 
President's fiscal year 2014 budget request assumes the Congress will 
reach a compromise on deficit reduction; otherwise, the programs and 
projects we present today will be subject to reductions as well.
                    investing in our infrastructure
Overview
    Our installations provide the backbone of support for our maritime 
forces, enabling their forward presence. The Department is requesting 
over $12 billion in various appropriations accounts, a decrease of $619 
million from the President's fiscal year 2013 request, to operate, 
maintain and recapitalize our shore infrastructure. Figure 1 provides a 
comparison between the fiscal year 2013 and fiscal year 2014 budget 
request by appropriation.

                                              [Dollars in millions]
----------------------------------------------------------------------------------------------------------------
                    Category                         PB 2013         PB 2014          Delta      Delta (percent)
----------------------------------------------------------------------------------------------------------------
Military Construction, Active and Reserve......          $1,752          $1,733            $-19            -1.1
Family Housing, Construction...................             102              73             -29           -28.4
Family Housing Operations......................             378             390              12             3.2
BRAC...........................................             165             145             -20           -12.1
Sustainment Restoration & Modernization (O&M)..           3,025           2,829            -196            -6.5
Base Operating Support.........................           7,220           6,848            -372            -5.2
Environmental Restoration, Navy................             311             316               5             1.6
                                                ----------------------------------------------------------------
      Total....................................          12,953          12,334            -619            -4.8
----------------------------------------------------------------------------------------------------------------
Figure 1: DON infrastructure funding by appropriation.

    Although smaller, the fiscal year 2014 request supports the Defense 
Strategic Guidance of 2012 and represents continued investment in 
enhancing Combatant Commanders' capabilities, improving servicemember 
quality of life, and recapitalizing aging infrastructure. The fiscal 
year 2014 budget also demonstrates the Department's commitment to 
energy security by funding cost-effective projects efforts that will 
improve our energy infrastructure and reduce our consumption.
Military Construction
    Our fiscal year 2014 President's budget request of $1.7 billion 
keeps pace with last year's request and supports several key objectives 
of the Defense Strategic Guidance of 2012. For instance, the Navy and 
Marine Corps are investing approximately $657 million to enhance 
warfighting capabilities in the Asia-Pacific region such as the new 
hangar, apron, and infrastructure ($132.2 million) at Marine Corps 
Base, Hawaii that will support the second squadron of MV-22 ``Osprey'' 
aircraft arriving in 2016; and Navy's wharf improvements ($53.4 
million) at Naval Base Guam.
    Additionally, the Navy is investing over $200 million in projects 
such as the Broad Area Maritime Surveillance Hangars in California 
($17.5 million) and Guam ($61.7 million) and the EA-18G Growler ($32.5 
million) and P-8 Poseidon ($85.2 million) projects in Washington State 
that will ensure the United States remains capable of projecting power 
in anti-access and area denial environments. The third increment of the 
Explosive Handling Wharf ($24.9 million) at Naval Submarine Base 
Bangor, Washington, supports the objective of maintaining a safe, 
secure, and effective nuclear deterrent. The Marine Corps is investing 
$84 million in a new cyber operations and headquarters facility at Fort 
Meade, Maryland, that will leverage proximity to U.S. Cyber Command and 
the National Security Agency to operate effectively in the cyberspace 
domain. And finally, the Navy's investments in a barracks and armory 
($29 million) at Camp Lemonnier, Djibouti, provides supporting 
infrastructure enabling Special Operations Forces to carry the fight 
forward, conducting stability and counterinsurgency operations for U.S. 
Central and U.S. Africa Commands.
    The Department continues efforts to reduce our energy costs. The 
fiscal year 2014 request includes nearly $70 million to decentralize 
steam plants at Marine Corps Base Camp Lejeune and Marine Corps Recruit 
Depot San Diego, installing new gas-fired energy-efficient space and 
domestic water-heating systems. Additionally, the Department will 
benefit from nearly $61 million in energy and water conservation 
projects funded through the Defense-Wide Energy Conservation Investment 
Program. These funds will enhance energy security at Camp Smith, Hawaii 
($8 million) and Marine Corps Air Station Miramar, California ($18 
million); increase sources of cost-effective renewable energy ($1.7 
million); improve water conservation efforts ($2.4 million); and 
increase energy efficiency in many other locations ($30.7 million). 
However, the almost $600 million fiscal year 2014 reduction in SRM/O&M 
and Base Operating Support (figure 1 above) in addition to the 
sequester reductions in fiscal year 2013 will make the statutory energy 
intensity goals more difficult to achieve. Moreover, a reduced 
investments in energy projects now will result in lost opportunity for 
savings in the future, higher utility costs and, ultimately, reduced 
readiness as funds are diverted to pay these bills.
Facilities Sustainment, Restoration and Modernization (FSRM)
    The Department of Defense uses a Facilities Sustainment Model to 
calculate lifecycle facility maintenance and repair costs. Using 
industry-wide standard costs for various types of buildings and 
geographic areas, the model is updated annually. Sustainment funds in 
the operation and maintenance accounts are used to maintain facilities 
in their current condition. The funds also pay for preventative 
maintenance, emergency response to minor repairs, and major repairs or 
replacement of facility components (e.g., roofs, heating and cooling 
systems).
    The Navy budgeted $1.5 billion (80 percent of the model) in fiscal 
year 2014 and continues to take risk in its shore infrastructure to 
increase investment in afloat readiness and capabilities. It manages 
this risk by prioritizing work to address mission-critical facilities 
in poor condition and resolve life-safety issues. Projects not meeting 
these criteria are deferred. There are, however, exceptions to the ``80 
percent'' rule. Maintenance dredging, flagship educational 
institutions, Camp David, and the Naval Observatory receive 100 percent 
of the funding recommended by the model. Furthermore, the Navy 
programmed $425.1 million to meet the 6 percent capital investment in 
depots required by title 10, U.S.C. section 2476.
    The Marine Corps will continue to fund sustainment funding at 90 
percent of the model ($691 million) in fiscal year 2014. Even this 
strong commitment will result in some facilities degradation. The 
Marine Corps will continue to prioritize and target facilities that 
directly affect mission operations for full sustainment.
    Restoration and Modernization provides major upgrades of our 
facilities. In fiscal year 2014, the Department of the Navy is 
investing $570 million of Military Construction, and $618 million of 
Operation and Maintenance funding into restoring and modernizing 
existing infrastructure.
                        investing in our people
Overview
    The strength of our Navy-Marine Corps team lies not in advanced 
weaponry or faster, stealthier ships and aircraft. Our naval forces 
derive their strength from the sailors and marines who fire the weapon, 
operate and maintain the machinery, or fly the plane, and from the 
families and civilians supporting them. We continue to provide the best 
education, training, and training environments available so our forces 
can develop professionally and hone their martial skills. Providing 
quality of life is a determining factor to recruiting and retaining a 
highly professional force. To this end, we strive to give our people 
access to high-quality housing, whether Government-owned, privatized, 
or in the civilian community, that is suitable, affordable, and located 
in a safe environment.
Training and Education
    Of the $1.7 billion request for military construction, the Navy and 
Marine Corps together have programmed over $224 million in operational 
and technical training, professional development, and academic 
facilities. For example, the Navy, in order to accommodate an increased 
student load at Nuclear Power Training Unit in South Carolina, will 
expand pierside berthing for an additional moored training ship that 
will provide ``hands on'' propulsion plant training in a realistic 
environment ($73.9 million). The Marine Corps will consolidate its 
Command and Control Training and Education Center of Excellence, Civil 
Military Operations School, and Marine Air Ground Task Force Staff 
Training Program into one 69,000 square foot facility ($25.7 million). 
This project will allow the Marine Corps to carry out its Marine Corps 
University recapitalization program.
Unaccompanied Housing
    In addition to expeditionary housing the Navy will build in 
Djibouti, the fiscal year 2014 request includes two projects that will 
provide accommodations for 1,220 transient and permanent party 
personnel. The first project replaces outdated and deteriorating 
housing for initial skills training (``A'' School) students at Naval 
Station, Great Lakes ($35.9 million). The second project, at Naval Base 
Ventura County, acquires and converts 300 existing leased section 801 
family housing units and two supporting facilities to address pressing 
billeting needs ($33.6 million).
    The Marine Corps is benefiting from prior investments in 
unaccompanied housing made in support of the Commandant's Barracks 
Initiative and the Grow the Force effort that increased end-strength 
from 175,000 to 202,000 marines. Despite the projected decline in end-
strength, the Marine Corps is well-positioned to accommodate its 
projected steady-state troop strength of 182,000 without excess 
inventory, having only programmed an amount to support 90 percent of 
its unaccompanied housing requirement. The results of the ongoing force 
structure analysis will determine whether some locations might require 
additional resources.
Family Housing
    The Department continues to rely on the private sector as the 
primary source of housing for sailors, marines, and their families. 
When suitable, affordable, private housing is not available in the 
local community, the Department relies on Government-owned, privatized, 
or leased housing. The fiscal year 2014 budget request of $463.3 
million supports Navy and Marine Corps family housing operation, 
maintenance, and renovation requirements.
    Both the Navy and Marine Corps have requested fiscal year 2014 
funding for post-acquisition construction projects necessary to improve 
existing Government-owned family housing in overseas locations. These 
include projects in Japan that will revitalize 68 homes at Commander 
Fleet Activities Sasebo ($21.6 million); another 50 homes at Marine 
Corps Air Station Iwakuni while metering 736 units ($24.2 million); and 
59 homes at Naval Base Guam ($23.1 million).
    Through the Military Housing Privatization Initiative, the 
Department has virtually eliminated its entire inventory of inadequate 
housing. While the Navy does not privatize any additional housing in 
fiscal year 2014, the Marine Corps has awarded phase 6 of its Camp 
Lejeune project this year, but is continuing to review the need for 
other previously approved projects as part of an assessment of Marine 
Corps-wide requirements.
    Additionally, the Navy and Marine Corps estimate spending almost 
$75 million to lease over 2,500 housing units domestically (781) and 
abroad (1,763). Over the past several years, the Navy has reduced its 
number of foreign ``high-cost'' leases (based on thresholds contained 
in U.S.C. title 10, section 2828. This past year, the Department 
instituted a policy to limit the leasing of high-cost homes overseas 
(based on 10 U.S.C. 2828 thresholds). We will only consider such leases 
for designated high-risk billets/high-risk personnel where there are no 
less costly options to provide secure housing or where it can be 
demonstrated that such a lease is in the best interests of the 
Government.
    Finally, the Department has programmed $287.3 million that will 
provide for the daily operation, maintenance, and utilities expenses 
necessary to manage its military family housing inventory. The budget 
request also includes another $27.6 million to provide oversight and 
portfolio management for over 63,000 privatized homes to ensure the 
Government's interests remain protected and quality housing continues 
to be provided to military families.
                         managing our footprint
Overview
    It is a basic tenet that the Department of Defense should own or 
remove from public domain only the minimum amount of land necessary to 
meet national security objectives. Coupled with the fiscal imperative 
to conserve resources, especially in this era of deficit reduction, the 
Department of the Navy has more than enough incentive to reduce its 
footprint both at home and abroad.
European Consolidation
    To meet these twin objectives, the Department is ready to conduct a 
capacity analysis that will provide the basis for consolidating 
military infrastructure in Europe. It should be noted the Navy has a 
limited footprint in the European theater, relocating its European 
headquarters from London to Naples in 2005 and closing Naval Air 
Station Keflavik in 2007 and Naval Support Activities Gaeta and La 
Maddalena in 2006 and 2008, respectively. We are undertaking 
preliminary capacity assessments of our remaining bases at Naval 
Station Rota, Naval Air Station Sigonella, and the naval support 
activities in Naples and Souda Bay that will inform a Defense-wide path 
forward. Our assessment will also include, in partnership with NATO and 
Norway, a review of the Marine Corps' prepositioning site in central 
Norway.
Base Closure and Realignment (BRAC)
    With respect to consolidating our domestic infrastructure, the Base 
Realignment and Closure process offers the best opportunity to assess 
and evaluate opportunities to properly align our domestic 
infrastructure with our evolving force structure and laydown. Since the 
first round of BRAC in 1988, the Department has closed 186 domestic 
installations and activities, including 52 major installations. Figure 
2 demonstrates the evolution of the Department's force structure since 
2005:

----------------------------------------------------------------------------------------------------------------
                                                                    Primary
                                                 Battle force     authorized      Personnel-
               Year and service                      ships         aircraft-        active       Installations
                                                                    active
---------------------------------------------------------------------------------------------------------------
PB 2005:
    Navy......................................             290           1,402         365,900              94
    USMC......................................  ..............             995         175,000              26
                                               -----------------------------------------------------------------
      Total...................................  ..............           2,397         540,900             120
                                               =================================================================
PB 2013:
    Navy......................................             284           2,012         322,700              83
    USMC......................................  ..............           1,041         197,300              25
                                               -----------------------------------------------------------------
      Total...................................  ..............           3,053         520,000             108
----------------------------------------------------------------------------------------------------------------
Figure 2: Force structure vs. number of installations.

    The Department has programmed $145 million to continue 
environmental cleanup, caretaker operations, and meet property disposal 
plan. By the end of fiscal year 2012, we had disposed 91 percent of our 
excess property through a variety of conveyance mechanisms with less 
than 17,000 acres remaining. Here are several examples of what we were 
able to achieve in the past year.
    Since the former Naval Air Station Brunswick in Maine closed in 
2011, the Navy has disposed of 79 percent of the surplus property. The 
community is experiencing success in creating short-term and long-term 
jobs as it continues to implement its redevelopment plan for the 
property.
    In fiscal year 2012, the Navy completed the last disposal action at 
the former Naval Station Ingleside, Texas, with the public sale of 155 
acres on October 7, 2011, to Kiewitt Offshore Services, LTD for 
approximately $2 million.
    Finally, at the end of 2012, the Navy and South Shore Tri-Town 
Development Council reached agreement on an economic development 
conveyance amendment that resulted in the disposal of 556 acres of the 
former Naval Air Station South Weymouth in Massachusetts. This 
agreement brought the total percentage disposed at South Weymouth to 93 
percent, with less than 150 acres pending disposal upon completion of 
environmental remediation actions.
    Overall, the Navy continues to reduce its inventory of properties 
closed under BRAC. Of the original 131 installations with excess 
property, the Navy only has 23 installations remaining with property to 
dispose. We anticipate reducing this number by six installations this 
year, with the remainder to be disposed as we complete our 
environmental remediation efforts.
    Under the previous BRAC efforts, the Navy has been able to realize 
approximately $4.4 billion in annual recurring savings. BRAC 2005 alone 
resulted in approximately $863 million in annual recurring savings. 
Although there remain cleanup and disposal challenges from prior BRAC 
rounds, we continue to work with regulators and communities to tackle 
complex environmental issues, such as low-level radiological 
contamination, and provide creative solutions to support redevelopment 
priorities, such as economic development conveyances with revenue 
sharing.
Compatible Land Use
    The Department of the Navy has an aggressive program to promote 
compatible use of land adjacent to our installations and ranges, with 
particular focus on limiting incompatible activities that affect Navy 
and Marine Corps' ability to operate and train, and protecting 
important natural habitats and species. A key element of the program is 
Encroachment Partnering (EP), which involves cost-sharing partnerships 
with States, local governments, and conservation organizations to 
acquire interests in real property adjacent and proximate to our 
installations and ranges.
    The Department of Defense provides funds through the Readiness and 
Environmental Protection Initiative (REPI) that are used in conjunction 
with Navy and Marine Corps O&M funds to leverage acquisitions in 
partnership with States, local governments and non-governmental 
organizations. Figure 3 represents the activity and funding for 
restrictive easements the Department acquired in fiscal year 2012:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                               Expenditures in fiscal year 2012 using multiple      Total expenditures from fiscal year 2005 to present
                                                             fiscal year funding                  ------------------------------------------------------
                                           -------------------------------------------------------
                                              Fiscal                                                 Total     DOD REPI   Service    Partner     Total
                                            year 2012   DOD REPI   Service    Partner     Total      acres      (O&M)      (O&M)      funds      funds
                                              acres      (O&M)      (O&M)      funds      funds
--------------------------------------------------------------------------------------------------------------------------------------------------------
Navy......................................      5,197    $14,369       $682    $15,580    $30,632     16,468    $41,840     $5,699    $53,421   $100,960
Marine Corps..............................      2,200      4,974      2,682      8,755     16,411     44,094     45,538     17,698     70,272    133,509
                                           -------------------------------------------------------------------------------------------------------------
      Totals..............................      7,398     19,343      3,365     24,335     47,043     60,562     87,378     23,397    123,693    234,469
--------------------------------------------------------------------------------------------------------------------------------------------------------
Figure 3: Restrictive easements acquired through encroachment partnering in fiscal year 2012.

    Vital to the readiness of our naval forces is unencumbered access 
to critical land, water and air space adjacent to our facilities and 
ranges. The Department understands that energy exploration, on land and 
off-shore, plays a crucial role in our Nation's security and are 
activities not necessarily mutually exclusive with military training. 
However, we must ensure that obstructions to freedom of maneuver or 
restrictions to tactical action in critical range space do not degrade 
the ability of naval forces to achieve the highest value from training 
and testing. As an active participant in the DOD Clearinghouse, the 
Department of the Navy assisted in the evaluation of 1,769 proposed 
energy projects submitted through the formal Federal Aviation 
Administration's Obstacle Evaluation process during calendar year 2012. 
Ninety-eight percent (1,730) of the projects were assessed to have 
little or no impact on military operations.
    The 1,730 projects cleared by the Clearinghouse represent 
potentially 38 gigawatts (GW) of renewable energy projects. The wind-
turbine developers, in particular, were responsible for a large 
increase in U.S. green energy during 2012--over 13 GW of nameplate 
wind-turbine capacity were completed in 2012.
Land Withdrawals
    A number of Department of Navy installations are located wholly or 
partially on public lands that have been withdrawn from the public 
domain. Withdrawals exceeding 5,000 acres must be authorized in 
statute. As part of the National Defense Authorization Act for fiscal 
year 2014, the administration requests to renew the withdrawals for 
Naval Air Weapons Station, China Lake, California, and the Chocolate 
Mountains Air Gunnery Range, California, managed by the U.S. Marine 
Corps. The Marine Corps also seeks to withdraw an additional 154,000 
acres at its Air Ground Combat Center, Twentynine Palms, California, to 
support increased training requirements. These three withdrawal actions 
have been combined into a single legislative proposal with the Army's 
request to convert its use of public lands at the Limestone Hills 
Training Area, Montana. Each of these withdrawal actions would extend 
for a period of 25 years.
                       relocating marines to guam
Overview
    Guam remains an essential part of the United States' larger Asia-
Pacific strategy, which includes developing the island as a strategic 
hub and establishing an operational Marine Corps presence. The 
Department of Defense recognizes Congress' concerns regarding execution 
of the Guam military realignment as outlined in the fiscal year 2012 
and 2013 National Defense Authorization Acts (NDAA) and is taking steps 
necessary to resolve critical issues that will allow the construction 
program to move forward.
Moving Forward
    In April 2012, the United States-Japan Security Consultative 
Committee (SCC) announced an adjustment to reduce the number of marines 
relocating from Okinawa to Guam from approximately 8,600 to 
approximately 5,000. In October 2012, the Department issued a new 
notice of intent expanding the scope of the Supplemental Environmental 
Impact Statement (SEIS) for the Live Fire Training Complex to also 
evaluate alternatives for the Main Cantonment, Family Housing, and 
impacts on Guam's civilian infrastructure, scaled according to this 
reduction in relocating marines.
    The first military construction contracts funded by both the United 
States and Government of Japan at Apra Harbor, Andersen Air Force Base 
and along Marine Corps Drive (Defense Access Roads) were awarded 
following the record of decision in September 2010 and are now 
proceeding. These projects are not impacted by the SEIS.
    The fiscal year 2013 budget request included $26 million to 
construct facilities in support of the Marine Aviation Combat Element 
at the Andersen Air Force Base North Ramp on Guam. We appreciate the 
support of Congress in authorizing and appropriating funds that enables 
the second increment of a project providing an aircraft parking apron, 
taxiways, lighting, wash racks, and supporting utilities to proceed.
    The fiscal year 2014 budget request includes $85.7 million for 
construction of a type II hangar at the Anderson Air Force Base North 
Ramp. To match the U.S. effort in fiscal year 2013, the Government of 
Japan has agreed to reallocate $10.8 million to fund planning and 
design for the second increment of North Ramp utilities and site 
improvement using their Japan fiscal year 2009 funds already 
transferred to the United States and for fiscal year 2014, transferring 
$114.3 million of Japan fiscal year 2011 funds for the construction of 
this project. None of these projects are impacted by the SEIS.
    Finally, the United States and Japan are continuously looking for 
more efficient and effective ways to achieve the goals of the 
Realignment Roadmap. Both countries remain committed to maintaining and 
enhancing a robust security alliance, and the United States remains 
committed to enhancing the United States-Japan Alliance and 
strengthening operational capabilities.
                               conclusion
    Our Nation's Navy-Marine Corps team operates globally, having the 
ability to project power, effect deterrence, and provide humanitarian 
aid whenever and wherever needed to protect the interests of the United 
States. The Department's fiscal year 2014 request supports critical 
elements of the Defense Strategy of 2012 by making needed investments 
in our infrastructure and people; reducing our world-wide footprint; 
and preserving access to training ranges, afloat and ashore.
    Yet, unless Congress acts to enact a comprehensive and measured 
approach to deficit reduction, our programs will be subject to 
reductions in planned spending even larger than the ones we are 
grappling with today. I look forward to working with you to sustain the 
war fighting readiness and quality of life for the most formidable 
expeditionary fighting force in the world.
    Thank you for the opportunity to testify before you today and I 
welcome your questions.

                              GUAM BASING

    Senator Johnson. Thank you. Mr. Natsuhara, in your 
testimony you noted that Guam remains an essential component of 
the U.S. Pacific strategy. Last year there were significant 
changes to the administration's strategic plan for the Pacific 
AOR, providing for U.S. rotations of our forces in Australia, 
Singapore, and the Philippines. The planned U.S. marine 
presence at Guam was reduced from 8,600 to 5,000, with an 
additional 2,500 marines shifted to Hawaii.
    I understand that a comprehensive basing plan for Guam may 
not be finalized until 2015. Without a plan, how can we know 
that the investments the Navy is making in the Pacific fit with 
DOD's long-term strategy?
    Mr. Natsuhara. The current investments in Guam for the Navy 
this year are for our existing missions. So our logistics force 
has been stationed and operating out of Guam; our MSC ships 
resupply the current fleet. So the bulk of the funds for fiscal 
year 2014 for the Navy, all of the funds for Guam are for the 
existing mission.
    The project we are requesting for 2014 for the Marine Corps 
is to support a need for a current mission that we have in Guam 
where the marines come for training. So it is for an existing 
mission, and it will also be used for the upcoming new laydown 
of marines as they come to Guam from Okinawa.

                          FUTENMA BASING PLANS

    Senator Johnson. General Kessler, in the 2014 budget, there 
is a request for airfield security upgrades at Marine Corps Air 
Station Futenma in Okinawa. However, after years of 
negotiations, a timeline to relocate U.S. forces from Futenma 
remains uncertain at best. How do the marines plan to balance 
investments needed to maintain operations at the current 
Futenma facility in the next 10 to 15 years without making an 
over-commitment of resources given the policy of relocating the 
base?
    General Kessler. Thank you, Mr. Chairman. That particular 
project that we have in the fiscal year 2014 MILCON submission 
is a $5 million project for a security fence. Over about a 3-
year period, we will have a total of about $11 million 
requested for additional MILCON, and probably about $36 million 
in FSRM requests. Those are all in there in order to ensure 
that we maintain a level of safety and operational capability 
at Futenma for as long as we will be there.
    As you stated, we expect that is going to be at least 10 to 
15 years. Futenma has been looked at for closure for such a 
long time that it has had some neglect over the years, that we 
simply have to ensure that we take care of it to ensure its 
future use.

               MARINE CORPS AIR STATION FUTENMA TIMELINE

    Senator Johnson. General Kessler, what is the timeline for 
facility investment at Marine Corps Air Station Futenma to 
maintain mission readiness? Are the needed projects in the 
fiscal year 2014 to 2018 future years defense plan (FYDP)?
    General Kessler. Yes, sir. The timeline that we are looking 
at right now, we expect that we will be at Futenma for probably 
the next 10 or 15 years. You know that the Futenma replacement 
facility, or the FRF, is the planned replacement for Futenma. 
The prime minister recently delivered to the Governor of 
Okinawa a permit for a landfill. That was delivered in March of 
this year. The Governor has 1 year in which to sign that. We 
expect he will take that year to do so, at which time we can 
actually begin the Futenma replacement facility up in Honoko.
    So we expect, Mr. Chairman, that we are going to need to 
continue to support Futenma over that 10- or 15-year period. 
The investments that we do make there are going to be very 
targeted and very precise investments to ensure safety and 
operational capability, but not to over-invest, knowing that we 
aren't going to be there forever.

                       CAMP LEMONNIER INVESTMENTS

    Senator Johnson. Admiral Slates, in the 2013 update to the 
Camp Lemonnier, Djibouti master plan, the Navy knows that the 
construction standards are being developed for Camp Lemonnier. 
These include the minimal permanent structures, footprint and 
finishes to meet the mission. Yet, the same report states that 
the master plan is based on a 25-year time horizon, indicating 
that Camp Lemonnier is an enduring mission, one in which we 
expect to invest close to $1 billion in construction.
    With the understanding that we must seek the best value for 
our investment, will the austere standards being applied at the 
camp meet our long-term mission requirements at the base?
    Admiral Slates. Mr. Chairman, the answer is yes. I think we 
have evaluated the construction standards for the environment 
in Djibouti. When we say austere, they are standards that meet 
life, safety, health construction codes for the environment, 
provide a better quality of living standard than the facilities 
that we have that last a 25-year life cycle. But austere means 
they don't necessarily have all of the finishings and 
furnishings and the nice features that we would have for a 
facility here in one of our bases in the United States.
    So we have two projects in the fiscal year 2014 budget. One 
is a barracks project with 60-plus rooms to be able to house up 
to four people in each of those rooms. That doesn't mean we 
will. Our first priority would be to get people out of tents 
and to get people out of the facilities that don't have water.

                         PACIFIC LAYDOWN PLANS

    The other project is a secure armory facility, which is 
basically just a facility intended to consolidate all of the 
units and their weapons storage and their weapons maintenance 
and cleaning into one secure structure instead of having them 
dispersed in temporary facilities around the base.
    Senator Johnson. Senator Kirk.
    Senator Kirk. I would just say that I am hoping for all of 
you, on the implementation of the sequester, that we move away 
from what I would call the insidious implementation of the 
sequester, meant to harm the Nation to make a political point, 
to blame the Congress, on the eve of a potential conflict with 
Korea. I think it is completely reprehensible to have an Air 
Force that doesn't fly and a Navy that doesn't sail and an Army 
that doesn't train.
    I'm going to follow up on something totally different. My 
understanding is in the future-year program, you have three 
$200 million plugs for the Pacific laydown. As I best remember 
it, the President announced the deployment of roughly a platoon 
of marines to Darwin, Australia. That kind of works out to $200 
million, $220 million per marine. I'm sure those guys would 
love accommodations like that.
    So my question is for further detail on those $200 million 
plugs on the Pacific laydown.

                     TRAINING FACILITIES IN ALASKA

    Mr. Natsuhara. Sir, we continue to work with our colleagues 
both in DOD and in DON and our international partners, and part 
of that is working through and finalizing the laydown, but also 
working with our international partners on how much they will 
be contributing to the move, in Australia in particular. We are 
not there yet. It is a joint discussion between OSD policy, 
State Department, and the Australians. So we are aware of that. 
We will try to get the answer as quickly as possible.
    Senator Johnson. Senator Begich.
    Senator Begich. Thank you, Mr. Chairman.
    First off, this is a comment and a question. I really 
appreciate the work you all have been doing to enhance the 
training facility in Alaska for SEALS. We know it is a great 
place to do training because the weather conditions are tough, 
and we appreciate that. I think a couple of years ago there was 
project, maybe $18 million or so, give or take, and I think 
they broke ground last year, or maybe they are doing it this 
year. I just would love to get an update. If you don't have 
that now, for the record, how that project is going.
    And then also, as you continue to develop it, as I 
understand, at some point in the training for the SEALS, they 
are going to go to Alaska. Everyone goes there at some point. 
Are there additional things that you may need in the future 
that you should let us know about? I don't know if anyone wants 
to answer that first.
    Mr. Natsuhara. Sir, I will have to take that for the 
record.
    Senator Begich. Okay.
    Mr. Natsuhara. I believe that is actually funded through 
SOCOM.
    Senator Begich. Okay.
    Mr. Natsuhara. I don't think that's a Navy project, but we 
will verify that and we will take that for the record, sir.
    [The information was not available at press time.]
    Senator Begich. Sure, that would be great. Also, just a 
side note again, to the Navy and marines, we just did the 
ceremony in Alaska on the USS Anchorage, a great ceremony, an 
incredible facility. Seeing the marines and the Navy there, 
Anchorage loved it, incredible technology on that ship, and 
impressive to talk to the manufacturers of that facility, as 
well as meeting some of the crew and the folks. So I just want 
to tell you that that was a real uplift for the community. 
Hopefully, the folks that were there felt it, too. But we 
really appreciated the work on that. That was a fantastic 
ceremony and a fantastic ship to add to the fleet.
    Let me ask you two things, maybe three. One is on energy 
security. Obviously, I come from an energy State. I know the 
DOD has been under attack in the past for some of the 
technology developments because of fuel costs per gallon. I am 
not one of those. I think it's like when we first bought our 
first flat screen TV, we mortgaged our house to get it. When we 
got our first cell phone, now they give them free. Technologies 
around energy will cost a lot on the front end as you develop 
it, but the critical need is down the road if you can have 
multiple sources.

                        ENERGY SECURITY PLANNING

    Can you just give me an indication of are you, in the 
development of energy security, what kind of relationships you 
have with the private sector and the partnerships that you're 
developing on these new technologies? And I know there is a lot 
of different stuff in the mill. Can you give me just any 
general comments from whoever feels comfortable to do that?
    Mr. Natsuhara. Overall, we in the Department established a 
new deputy assistant secretary for energy to focus just on 
that.
    Senator Begich. Which we've had in Alaska, which we are 
very happy about that.
    Mr. Natsuhara. And we are happy to see that the other 
services have also established a counterpart. So Mr. Hicks, Tom 
Hicks, is our----
    Senator Begich. And there is one for the whole DOD, if I 
remember right.
    Mr. Natsuhara. Correct. Ms. Burke----
    Senator Begich. Yes, that's who we had, yes.
    Mr. Natsuhara [continuing]. Is the operational energy 
assistant secretary. So as a Department, we have a structure 
now to do that, and particularly for the Department of the 
Navy. Mr. Hicks, along with the Navy team and the Marine Corps 
energy team, have worked very closely with industry in all 
forms, the biofuels energies, all the operational energy. The 
Marine Corps holds energy forums. Essentially, they call it 
Experimental Forward Operating Base (ExFOB), where they bring 
industry out and let them show their technologies that the 
marines have taken to the battlefield very quickly.
    Senator Begich. I have seen some of the solar energy that 
the marines have utilized in the Forward Operating Bases 
(FOBs), and it is unbelievable. I didn't mean to interrupt you, 
but I know the marines don't want to be humping batteries all 
around. They want to have their weapons and bullets, and to 
know that you went from a big facility down to a much smaller, 
that has to be life-saving, energy-saving, and operational 
saving. Is that a fair statement?
    Mr. Natsuhara. Yes.
    General Kessler. Yes, sir, it certainly is. The Marine 
Corps has taken a very holistic approach, I think, to energy in 
general. The Commandant published his energy policy called 
Bases to Battlefields. The part that you saw, sir, is our 
expeditionary energy, and we really truly can translate some of 
those activities into saved lives. It means fewer convoys on 
the road, less exposure to our marines and sailors that are out 
in harm's way.
    Along with that, though, I would say the other part of 
energy is the installation side, and putting those two 
together, we have developed what we are calling an energy 
ethos. That is, while we practice those things to save lives on 
the battlefield, we want to carry those same energy-minded 
efficient practices to our installations as well. So it really 
is a very concerted effort both on the installations and 
expeditionary side.
    Senator Begich. Very good.
    Admiral.
    Admiral Slates. Sir, if I might, I think from the Navy 
perspective, we have really two focus areas. One is the shore 
side, and the other is the operational. On the shore side, our 
real focus to date has been on consumption reduction. The 
kilowatt hour or the barrel of oil we don't use is one we save 
forever and ever. So that has been the primary focus. 
Renewables, where they make sense, and they make sense in a lot 
of places, and then also instead of maybe energy security, 
energy resilience. We need to make sure that key facilities and 
infrastructure on our bases can continue to operate and to 
support the fleet as it goes forward.
    On the operational side, it may be a little more complex 
than in the Marine Corps because we are talking very big 
systems, ships and aircraft primarily. The focus has been on 
how do we get additional efficiencies out of those platforms 
that we have for 30 to 40 years so that we can have additional 
capability for the commander who operates that.
    So we see that efficiency on the operational side basically 
goes hand-in-hand with enhanced combat capability in the 
future.

                          SERVICE PARTNERSHIPS

    Senator Begich. Let me say one piece, and I know it is a 
sister agency, the Coast Guard, who is on the water too. They 
are doing some great stuff I know in Alaska with biomass and 
their Sitka operation, and now looking at their Kodiak 
operation. It's going to save them unbelievable amounts of 
money in the operational onshore. So my guess is you are 
watching all these as they are being developed to see how you 
can integrate these into your own operation. Is that a fair 
statement?
    Admiral Slates. Yes, sir. It is a pretty good partnership 
between all the services, including the Coast Guard, on our 
energy initiatives.
    Senator Begich. Very good.
    Last question, Mr. Chairman, if I could, and that is I know 
the Navy has been a lead on this, and that is with Task Force 
Climate Change, the work you have recognized. I know that 
people don't want to say the words ``climate change.'' They all 
flip out. They want to talk about the science. But I know from 
you guys, you have had an extra effort because of the impacts 
it could have.

                       TASK FORCE CLIMATE CHANGE

    Have you done an analysis on the construction needs of the 
future that may be required because of changing water depths 
with so much of your infrastructure? And I don't know who wants 
to answer that, but Alaska is Ground Zero when it comes to 
climate change. We are losing shoreline. You name it, we are 
impacted. So we live it every day.
    But I'm wondering, I know you have Climate Change Task 
Force. It has been very successful with a lot of information, 
but I know it gets controversial because they wonder why the 
military is even talking about climate change. Well, because 
you've got infrastructure, and it's lots of money.
    Have you done an analysis of the cost of what this would 
require with changing water depths?
    Mr. Natsuhara. We have not done an analysis of that yet. We 
are aware of that. We have started some studies on trying to 
identify some of the impacts. We will be working with OSD and 
our interagency counterparts because we believe this is much 
bigger than the Navy and bigger than DOD. So we have started 
some analysis, but we don't have any costs right now.
    Senator Begich. I'll leave it on that and just say I look 
forward to further discussion on this because I think we have 
to be real about what these costs will be, because they will 
not be in the thousands, they will not be in the millions. They 
will be in the billions because of the amount of shore 
requirements, just what we saw with the climate change that 
created the storm in the Northeast. It impacted everybody. So I 
would be interested as you progress on that.
    Thank you, Mr. Chairman.

                      CAMP LEMONNIER RESTRICTIONS

    Senator Johnson. One last question for Mr. Natsuhara. The 
mission requirements at Camp Lemonnier have shifted over the 
past several years, impacting the types of MILCON projects that 
DOD has taken at the base. Last year, however, the Government 
of Djibouti demanded that the United States move drone 
operations from Djibouti International Airport to a French-
operated airfield which is well outside the perimeter of Camp 
Lemonnier.
    Are there indications that the Djibouti Government will 
impose additional limitations on operations and our 
construction at Camp Lemonnier? And if so, how does that impact 
our MILCON strategy at that location?
    Mr. Natsuhara. We continue to monitor the situation at Camp 
Lemonnier with the Djiboutians. As of a couple of weeks ago, 
and I believe still to date, we have not shifted our RPAs, 
remotely piloted aircraft, to the outlying field at Chebelley.
    The Djiboutians continue to challenge us. We have a great 
team there that continues to work with them through these 
challenges. Right now, our construction is going fairly well. 
We continue to monitor it. We work with the State Department on 
that and the Ambassador on the ground. It will continue to be a 
challenge, but our team continues to work through those.
    Senator Johnson. I thank all of our witnesses for appearing 
before the subcommittee today. We look forward to working with 
you this year.

                     ADDITIONAL COMMITTEE QUESTIONS

    For the information of members, questions for the record 
should be submitted by the close of business on May 14.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]
               Questions Submitted to Roger M. Natsuhara
                Question Submitted by Senator Jon Tester
    Question. On September 27, 2012, I sent a letter to Navy Secretary 
Mabus requesting the Navy name its newest Virginia-class submarine, the 
USS Montana. In response, Secretary Mabus shared that the Navy would 
keep my request under consideration as opportunities presented 
themselves. In this context, can you provide a list of the most recent 
naval vessels that have been named, and when each occurred? 
Additionally, can you provide a list of naval vessels that have yet to 
be named, as well as expectations for when that will happen?
    Answer. The Secretary of the Navy is responsible for ship naming 
and receives recommendations from many sources. Members of Congress, 
business and community leaders, military personnel, naval historians, 
and private citizens are among those who suggest names for ships. All 
recommendations are carefully considered and hundreds of possible names 
are reviewed by the Secretary of the Navy during the naming process. 
Naming conventions for recently named ships are:
  --JHSV--Joint High Speed Vessels named for small American cities and 
        counties.
  --LPD--Amphibious Transport Dock ships named for major American 
        cities and communities attacked on 9/11.
  --LCS--Littoral Combat Ships named for regionally important American 
        cities and communities.
  --AGOR--Auxiliary General Oceanographic Research vessels named for 
        nationally recognized leaders in exploration and science.
  --DDG--Guided Missile Destroyers named for deceased members of the 
        Navy, Marine Corps and Coast Guard, including Secretaries of 
        the Navy.
  --SSN--Virginia-class attack submarines are named for States.
    In April 2013, seven ships were announced:
  --USNS Trenton (NJ)--JHSV 5.
  --USNS Brunswick (GA)--JHSV 6.
  --USNS Carson City (NV)--JHSV 7.
  --USS Portland (OR)--LPD 27.
  --USS Wichita (KS)--LCS 13.
  --USS Manchester (NH)--LCS 14.
  --R/V Sally Ride--AGOR 28.
    In May 2013, the following were announced:
  --USS Paul Ignatius--DDG 117.
  --USS Daniel Inouye--DDG 118.
    Congress was recently notified of the Secretary of the Navy's 
intent to name the following ships:
  --USNS Yuma (AZ)--JHSV 8.
  --USNS Bismarck (ND)--JHSV 9.
  --USNS Burlington (VT)--JHSV 10.
  --USS Billings (MT)--LCS 15.
  --USS Tulsa (OK)--LCS 16.
    In view of ship naming conventions, the most appropriate vessel 
type to bear the name of a State would be a submarine.
    In 2012, six submarines were named:
  --USS Illinois--SSN 786.
  --USS Washington--SSN 787.
  --USS Colorado--SSN 788.
  --USS Indiana--SSN 789.
  --USS South Dakota--SSN 790.
  --USS Delaware--SSN 791.
    A block of four submarines will be under contract around October 
2013 and the name ``Montana'' will be given strong consideration.
                                 ______
                                 
                Questions Submitted by Senator Mark Kirk
    Question. Background: For the second year in a row the Navy's 
Future Years Defense Plan contains very specific ``Pacific Engagement 
Wedges,'' with no explanation or backup justification. The wedges are:
  --2015--$44,000,000;
  --2016--$49,900,000; and
  --2016--$101,300,000.
    Mr. Natsuhara, last year we asked to see some planning 
justification for the Pacific Engagement wedges but nothing was 
provided. This year's FYDP still contains the wedges with no 
justification. When will you be able to share this planning data?
    Answer. The Department of the Navy is committed to supporting the 
Department of Defense's emphasis on the Asia-Pacific region. So, for 
programming considerations, we included ``wedges'' for ``Pacific 
Engagement'' in fiscal year 2015 and fiscal year 2016 to accommodate 
possible infrastructure costs once basing decisions are made. We will 
include specific data in future budget submissions as we finalize the 
strategic laydown, infrastructure requirements and availability of host 
nation support in the Pacific.
    Question. Background: I understand the Department of Navy has done 
an outstanding job advocating energy-efficient and alternative energy 
projects, but there is one aspect of the new energy program that I am 
concerned about and that is energy security. Our power grids are 
indispensable to the operational missions of our bases and a cyber 
attack on a grid that makes the base go dark could prove disastrous. I 
applaud the focus on renewable sources of energy but I do not see the 
same focus on energy security.
    Is the focus on renewable energy more of a priority that energy 
security?
    Answer. The centerpiece to the Department of the Navy's shore 
energy program is energy security. The Navy is committed to enhancing 
combat capability, reducing total ownership costs, and ensuring energy 
security through investments directed toward efficiency to reduce 
overall energy demand, while optimizing the use of renewable energy 
where financially viable, and improving the resilience to grid 
failures.
    Question. There are several microgrid demonstration projects 
underway at this time and the marines are requesting funds for two 
microgrid projects. I would like to know if you plan to incorporate 
more microgrid technology into your energy programs to ensure greater 
energy security.
    Answer. The Department of Navy is committed to smart grid and 
microgrid technologies where it is viable from a mission, technical and 
financial perspective.
    Question. What are you doing to ensure energy security, 
particularly cybersecurity, is part of the plan for energy projects?
    Answer. The Department of the Navy ensures that our energy projects 
are appropriately secure from a cybersecurity perspective. For example, 
the Navy's smart grid demonstration integrates Advanced Metering 
Infrastructure (AMI) and Industrial Control Systems (ICS) into a cyber-
secure, NETWARCOM-accredited base network.
                                 ______
                                 
              Questions Submitted by Senator Daniel Coats
    Question. What is the future of the National Museum of the United 
States Navy? Does the U.S. Navy intend to have a world-class museum 
like the U.S. Marine Corps?
    Answer. The Navy does intend to have a world-class museum and will 
consider all options, including relocation off the Washington Navy 
Yard, to promote the protection and preservation of the collection of 
art, artifacts, and records contained in the National Museum of the 
United States Navy and to make the collection more accessible to the 
public.
    The Navy plans to take more concrete steps toward this vision in 
the future as the fiscal climate allows.
    Question. The Naval Inspector General found in their December 2011 
report that the, ``Naval History & Heritage Command (NHHC) facilities 
and offices at the Washington Navy Yard are inadequate to support the 
command's mission of historic preservation and the administrative 
requirements of the staff. NHHC facilities do not meet temperature and 
humidity control requirements to preserve the Navy's historical 
archives and artifacts.'' What initiatives are being taken by Navy to 
ensure that their facilities are being upgraded to meet the proper 
temperature and humidity levels required for the long term preservation 
of art, artifacts, and archival documents?
    Answer. Navy is currently pursuing completion of the NHHC Global 
Strategic Infrastructure Plan, NHHC Facilities Design Standards, and 
NHHC Commemorative Facilities Study. When completed, these planning 
efforts will support an integrated set of facility requirements to 
support critical operations and enable targeted facility project 
planning for best use of limited available funding.
    In 2012, Navy executed a repair project for the HVAC and mechanical 
systems of the Navy Historical Center at the Washington Navy Yard at a 
cost of $8.1 million.
    Question. What resources is Navy placing against this requirement?
    Answer. Navy funded $954,000 for development of the three planning 
measures identified above in addition to the $8.1 million repair 
project.
    Question. What is the projected completion date for all required 
facilities renovations or construction?
    Answer. The results of the planning effort are needed in order to 
develop the proper renovation and/or construction requirements.
    Question. Has the Navy reviewed the Army support facility at Fort 
Belvoir?
    Answer. The Navy has made numerous visits to the site to assess 
suitability for storage and the possibility of partnering with the 
Army. The site is not adequately zoned internally to house collections 
for artifacts requiring separate environmental conditions. In addition, 
available storage space at this facility is quickly becoming limited as 
Army collections continue to arrive for caretaking.
    Question. Does the Navy have any plans to replicate this facility 
for Navy artifacts, art, and documents?
    Answer. The Navy is currently conducting an infrastructure review 
which will balance required capabilities with existing assets. Upon 
completion of that study at the end of fiscal year 2013, the Navy will 
better understand if a similar facility is required. In addition, 
aspects of the design criteria used at the Army support facility will 
be incorporated into the new NHHC facilities design criteria.
                                 ______
                                 
              Questions Submitted by Senator Thad Cochran
    Question. The minor MILCON authority for Defense Laboratories 
(section 2805(d)) empowers laboratory directors with the authority to 
fund unspecified military construction projects up to $4 million with 
the caveat that the Congress must be notified on projects over $2 
million. Can you identify projects that your lab directors are trying 
to accomplish this year or are considering in the near future using 
this authority?
    Answer. At this time, there is only one proposed project, which 
seeks to accomplish work in excess of $35 million to revitalize the 
Electronics and Technology Lab at the Naval Research Lab, Washington, 
DC. The current scope of the project exceeds the authorities provided 
under section 2805(d). We are reviewing changes to scope and other 
funding alternatives for pursuing this requirement.
    Question. I understand that the Navy Research Laboratory Director 
may have projects that could use help getting out of the Pentagon. Will 
you check into this and ensure the committee that the approval process 
for Navy Laboratory Revitalization projects is operating efficiently?
    Answer. The Department of the Navy is continuing to work with the 
appropriate stakeholders to identify opportunities and find an 
effective means to use the 2805(d) authority and other mechanisms to 
address laboratory revitalization.

                          SUBCOMMITTEE RECESS

    Senator Johnson. This subcommittee will reconvene on 
Wednesday, May 15, at 10 a.m. to hear testimony from the 
Departments of the Army and the Air Force.
    This hearing is recessed.
    [Whereupon, at 3:55 p.m., Thursday, May 9, the subcommittee 
was recessed, to reconvene at 10 a.m., Wednesday, May 15.]