    [Senate Hearing 114-658, Part 3]
    [From the U.S. Government Publishing Office]

                                                     S. Hrg. 114-658, Pt. 3

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                   2017 AND THE FUTURE YEARS DEFENSE PROGRAM

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

                                    HEARINGS

                                   before the

                          COMMITTEE ON ARMED SERVICES
                              UNITED STATES SENATE

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 SECOND SESSION

                                       ON

                                    S. 2943

         TO AUTHORIZE APPROPRIATIONS FOR FISCAL YEAR 2017 FOR MILITARY
    ACTIVITIES OF THE DEPARTMENT OF DEFENSE, FOR MILITARY CONSTRUCTION, AND
       FOR DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY, TO PRESCRIBE
       MILITARY PERSONNEL STRENGTHS FOR SUCH FISCAL YEAR, AND FOR OTHER
                                    PURPOSES

                                   ----------

                                     PART 3

                        READINESS AND MANAGEMENT SUPPORT

                                   ----------

                          MARCH 15; APRIL 5, 12, 2016

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

             Printed for the use of the Committee on Armed Services

                                                     S. Hrg. 114-658, Pt. 3

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                   2017 AND THE FUTURE YEARS DEFENSE PROGRAM

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

                                    HEARINGS

                                   before the

                          COMMITTEE ON ARMED SERVICES
                              UNITED STATES SENATE

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 SECOND SESSION

                                       ON

                                    S. 2943

         TO AUTHORIZE APPROPRIATIONS FOR FISCAL YEAR 2017 FOR MILITARY
    ACTIVITIES OF THE DEPARTMENT OF DEFENSE, FOR MILITARY CONSTRUCTION, AND
       FOR DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY, TO PRESCRIBE
       MILITARY PERSONNEL STRENGTHS FOR SUCH FISCAL YEAR, AND FOR OTHER
                                    PURPOSES

                                   __________

                                     PART 3

                        READINESS AND MANAGEMENT SUPPORT

                                   __________

                          MARCH 15; APRIL 5, 12, 2016

                                   __________

             Printed for the use of the Committee on Armed Services

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

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

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                          COMMITTEE ON ARMED SERVICES

                          JOHN McCAIN, Arizona, Chairman

    JAMES M. INHOFE, Oklahoma            JACK REED, Rhode Island
    JEFF SESSIONS, Alabama               BILL NELSON, Florida
    ROGER F. WICKER, Mississippi         CLAIRE McCASKILL, Missouri
    KELLY AYOTTE, New Hampshire          JOE MANCHIN III, West Virginia
    DEB FISCHER, Nebraska                JEANNE SHAHEEN, New Hampshire
    TOM COTTON, Arkansas                 KIRSTEN E. GILLIBRAND, New York
    MIKE ROUNDS, South Dakota            RICHARD BLUMENTHAL, Connecticut
    JONI ERNST, Iowa                     JOE DONNELLY, Indiana
    THOM TILLIS, North Carolina          MAZIE K. HIRONO, Hawaii
    DAN SULLIVAN, Alaska                 TIM KAINE, Virginia
    MIKE LEE, Utah                       ANGUS S. KING, JR., Maine
    LINDSEY GRAHAM, South Carolina       MARTIN HEINRICH, New Mexico
    TED CRUZ, Texas

                        Christian D. Brose, Staff Director
                    Elizabeth L. King, Minority Staff Director
                                    __________

                Subcommittee on Readiness and Management Support

                     KELLY AYOTTE, New Hampshire, Chairman
    JAMES M. INHOFE, Oklahoma            TIM KAINE, Virginia
    DEB FISCHER, Nebraska                CLAIRE McCASKILL, Missouri
    MIKE ROUNDS, South Dakota            JEANNE SHAHEEN, New Hampshire
    JONI ERNST, Iowa                     MAZIE K. HIRONO, Hawaii
    MIKE LEE, Utah                       MARTIN HEINRICH, New Mexico

                                      (ii)

                               C O N T E N T S

                                 ___________

                                 March 15, 2016

                                                                       Page

    The Current State of Readiness of United States Forces...........     1

    Allyn, General Daniel B., USA, Vice Chief of Staff, United States     5
      Army.
    Howard, Admiral Michelle J., USN, Vice Chief of Naval Operations,    10
      United States Navy.
    Paxton, General John M., Jr., USMC, Assistant Commandant, United     16
      States Marine Corps.
    Goldfein, General David L., USAF, Vice Chief of Staff, United        27
      States Air Force.

    Questions for the Record.........................................    71

                                 April 5, 2016

    The State of Public Shipyards to Meet Current Mission Needs and      95
      Investment Strategies.

    Hilarides, Vice Admiral William H., USN, Commander, United States    99
      Naval Sea Systems Command.
    Smith, Vice Admiral Dixon R. USN, Commander, United States Navy     103
      Installations Command.

    Questions for the Record.........................................   123

                                 April 12, 2016

    Military Construction, Environmental, Energy, and Base Closure      127
      Programs.

    Potochney, Peter J., Performing the Duties of Assistant Secretary   132
      of Defense for Energy, Installations and Environment.
    Hammack, Honorable Katherine G., Assistant Secretary of the Army    146
      for Installations, Energy and Environment.
    McGinn, Honorable Dennis V., Assistant Secretary of the Navy for    152
      Energy, Installations and Environment.
    Ballentine, Honorable Miranda A.A., Assistant Secretary of the      159
      Air Force for Installations, Environment and Energy.

    Questions for the Record.........................................   192

    APPENDIX A.......................................................   203

                                     (iii)

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                   2017 AND THE FUTURE YEARS DEFENSE PROGRAM

                                  ----------

                            TUESDAY, MARCH 15, 2016

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

                       THE CURRENT STATE OF READINESS OF
                              UNITED STATES FORCES

        The subcommittee met, pursuant to notice, at 10:03 a.m. in
    Room SR-222, Russell Senate Office Building, Senator Kelly
    Ayotte (chairman of the subcommittee) presiding.
        Members present: Senators Ayotte, Inhofe, Fischer, Ernst,
    Kaine, Shaheen, Hirono, and Heinrich.

               OPENING STATEMENT OF SENATOR KELLY AYOTTE

        Senator Ayotte. Good morning. I want to welcome our
    witnesses here today, the Vice Chiefs of Staff of our Armed
    Forces, and thank them for their leadership. This is a very
    important hearing of the Readiness and Management Support
    Committee.
        As we begin this subcommittee's second hearing of the year
    to receive testimony on the current readiness of our military
    forces, I want to thank the Ranking Member, Senator Kaine, for
    his continued leadership on defense issues and work with me in
    a bipartisan manner on these incredibly important issues to the
    readiness of our forces.
        We're joined this morning by General Daniel Allyn, the Vice
    Chief of Staff for the Army; Admiral Michelle Howard, the Vice
    Chief of Staff of Naval Operations; General John Paxton,
    Assistant Commandant of the Marine Corps; and General David
    Goldfein, the Vice Chief of Staff of the Air Force. I want to
    thank each of you for your leadership and service to our
    country, and all of those who serve underneath you. We're
    grateful for what they do for our country.
        General Paxton, I understand that today may be one of your
    last, certainly, readiness force-posture hearings, but you're
    also the longest serving Assistant Commandant in the Marine
    Corps in the last 100 years.
        [Laughter.]
        Senator Ayotte. You have been in that position since
    December of 2012. I just want to thank you for your amazing
    service to our country, your leadership. You are the finest.
    I've appreciated getting to know you in this position, and I
    speak for all my colleagues in saying that we just very much
    appreciate your distinguished service to our country and all
    that you and your family have done for us.
        [Applause.]
        General Paxton. Thank you, Chairman. Honored to serve and
    to be with great battle buddies like this and to be with great
    marines. Thank you, Senator.
        Senator Ayotte. Thank you. Semper Fi.
        On February 9th, the Director of National Intelligence,
    James Clapper, said, ``In my 50-plus years in the intelligence
    business, I cannot recall a more diverse array of challenges
    and crises that we confront as we do today.'' When we consider
    just a few developments, it is easy to understand why Director
    Clapper would say that from where we even met from last year
    for this important hearing.
        You recently testified that there are more Sunni terrorist
    group members and save havens than at any other point in
    history. Russia, a country that the commander of European
    Command reminds us represents an existential threat to the
    United States and the NATO [North Atlantic Treaty Organization]
    alliance as a whole, has invaded and annexed part of Ukraine
    while conducting a major military modernization and resuming
    provocative military actions that we have not seen since the
    Cold War.
        China has invested massively in its military capabilities,
    steadily closing many of the technological advantages that the
    U.S. has enjoyed for decades. Simultaneously, Beijing is
    building and militarizing artificial islands in the South China
    Sea, an effort that seeks to bully its neighbors and challenge
    one of the pillars of U.S. and global trade: the freedom of
    navigation.
        Assumptions that held true a decade or two ago regarding
    the absence of a peer or near-peer military competitor can no
    longer be taken for granted. In North Korea, an unpredictable,
    despotic, and nuclear-armed ruler has developed a road-mobile
    intercontinental ballistic missile that the commander of the
    Strategic Forces Command assesses is likely capable of reaching
    much of the continental United States.
        Iran, the world's leading state sponsor of terrorism, is
    pocketing billions of dollars in benefits from the Iran deal
    while supporting Hezbollah and the murderous Assad regime and
    advancing Tehran's ballistic missile program to threaten our
    forward-deployed troops, our allies, like Israel, and
    ultimately our Homeland.
        Meanwhile, as our communities confront horrible drug
    epidemics, South Command struggles with a severe lack of
    resources to detect and interdict drug shipments traveling to
    the United States. At the same time, Northern Command and its
    Federal partners confront a tremendous challenge in securing a
    porous southern border that is as vulnerable to terrorists
    attempting to enter our country as it is to drug smugglers.
        These are just a few examples of the threats and challenges
    that we face and our allies confront. Yet, as these threats
    have grown, our military readiness has not kept pace. Instead,
    we have seen a disturbing deterioration in the readiness of
    each of our services. Many servicemembers don't have enough
    time home between deployments for rest and training,
    undercutting full-spectrum of readiness. The readiness of
    nondeployed forces is not what it should be, depriving our
    Nation of the strategic depth that we need, given the threats
    that we face. Key combatant commander requirements go unmet.
    Critical war plans lack the necessary resources, and key
    modernization programs are delayed. In short, the gap between
    the military we need and the military we have has grown, and
    that gap is making--in my opinion, is a dangerous gap.
        Our defense budgets must be based on our national security
    interests and the threats that we face to those interests, not
    artificial budget caps. A small percentage of our fellow
    citizens raise their right hands, join the military, and agree
    to leave their families to keep the rest of us safe. We owe
    them tough, realistic training as well as modern, well-
    maintained equipment. To provide them anything less is to
    neglect our moral and constitutional responsibilities. By
    maintaining unchallenged military superiority and preparedness,
    we take care of our troops, fulfill our responsibilities and
    make costly conflicts less likely. I look forward to hearing
    from each of you today regarding the readiness of each of our
    services and what you specifically need from Congress to ensure
    that we meet our needs and that we can defend our Nation, and
    that our most precious resource, our men and women in uniform
    who serve below you, and you, yourself, that you can let us
    know what they need to effectively do their jobs.
        I also look forward to getting some specific updates that
    are important to my home State of New Hampshire on the arrival
    of the KC-46A at Pease Air National Guard Base. I want to also
    discuss some issues that are important to the New Hampshire
    Army National Guard, as well as workers at the Portsmouth Naval
    Shipyard as they maintain our Nation's attack submarine fleet,
    which is so important to our combatant commanders.
        I would now like to call on our Ranking Member, Senator
    Kaine, for his opening remarks, and thank him for his
    leadership.

                     STATEMENT OF SENATOR TIM KAINE

        Senator Kaine. Thank you, Madam Chair.
        Thanks, to all the witnesses. I've enjoyed the--working
    together in conversations I've had with many of you in
    preparation for this hearing.
        I want to extend my thanks to General Paxton. I gather
    you're the longest-serving Assistant Commandant since the very
    first one, Lieutenant Colonel Eli Cole, in 1915. Your penalty
    for that is, you've had to do this posture hearing four times.
    Your reward is, you won't have to do it a fifth time.
        [Laughter.]
        Senator Kaine. But, we're--again, we're very, very happy to
    celebrate with you this significant accomplishment.
        You know, for many years, the recurring theme from this
    annual posture hearing is--remain unchanged. That is, military
    is stuck at an unacceptable level on the spectrum readiness--on
    readiness spectrum. Last week, I received a classified
    briefing, available to all committee members, on this readiness
    question. I was really shocked, and I would encourage any
    member of the committee, and especially this subcommittee, to
    go get that same briefing. It will really put in context this
    readiness question in a way that will stun you.
        Everything I'm going to say now is not from that classified
    briefing. This is open, what I'm now going to say. There are
    other things that I could say, but I won't.
        Today, less than half of our Nation's military is ready to
    perform their core wartime mission. Some critical units are in
    far worse shape than this 50 percent. Fourteen years of
    sustained combat, together with the Budget Control Act of 2011,
    have presented the Nation with a unique readiness challenge.
    It's kind of the perfect storm of two significant events. That
    problem has no likely end in sight if we continue down the path
    of sequestration budget caps with the increasing operational
    demand that the Chairwoman described, given the state of the
    world.
        Today, there are no--zero--fully ready Army Brigade Combat
    Teams, and there are only nine ready BCTs [brigade combat
    teams] available for unforeseen contingencies.
        Less than half of the Marine Corps units are ready to
    perform their core wartime mission, despite having a
    congressionally mandated role as the Nation's crisis-response
    force.
        Today, 80 percent of aviation squadrons do not have the
    required number of aircrafts to train.
        Less than half of our Navy's ships are ready to ship to
    meet wartime plans, while deferred and unplanned maintenance
    continues to delay training timelines and prolong deployments.
    For example, ship deployments that used to be 6 months are now
    8 to 10 months, which exacerbates the conditions of the ships
    and also creating challenges for those in the extended
    deployments. I look forward to digging deeper into the topic of
    our shipyards. We're going to have a subcommittee hearing on
    this on April 5th.
        On the Air Force side, half of the Air Force aircraft are
    ready, some fighter and unmanned units are in far worse
    condition. This is well below the 80-percent requirement that
    is necessary to execute the national military strategy.
        High operational tempo and the combatant command requests
    have left too many units with unsustainable deploy-to-dwell
    ratios. The ratio--the rate of operational tempo is like
    forcing the same five people to play an entire game of
    basketball without relief from the bench.
        However, we, in Congress, have to admit that we've helped
    create these terrible conditions for our military. We can't buy
    you time--we can't buy time to restore readiness. It will take
    a while to rebuild our strategic depth. Nor can we simply buy
    our way out of our readiness problem. But, we can do much
    better in the way in which we provide you with resources.
    Sequestration continues to be a significant challenge and kind
    of a mindless menace, because it's nonstrategic. Too often,
    we've given DOD [Department of Defense] unpredictable funding
    levels, and even those appropriations have arrived late in the
    year or in the form of last-minute continuing resolutions. The
    only reason we suffer from this self-inflicted predicament is
    because we were not able to come together to find a meaningful
    solution to a sequestration that was artificially passed by
    Congress in August of 2011. A lot of things have happened in
    the world since August of 2011. That was pre-Ebola, pre-Zika,
    pre-North Korean cyberattacks, pre-ISIL [Islamic State of Iraq
    and the Levant], pre-Russia into the Ukraine. The world has
    changed dramatically, and yet we're still living under a
    significant straightjacket.
        I continue to believe, as I expressed in one of my first
    votes in the Senate, we need to repeal sequestration, not only
    for the sake of readiness, but for the sake of our full
    spectrum of national security needs. Our intelligence agencies,
    law enforcement agencies, Homeland security, international
    development, State Department, and domestic agencies all
    require relief, and we need to work together to make this
    happen.
        General Allyn, I know it's a few months before your son
    graduates from West Point, but I want to, as I conclude,
    congratulate both you and him today. We both have sons in the
    military, and we owe them, and all future generations, our
    thanks. I want to congratulate you on that.
        Then, Madam Chair, thanks for pulling this hearing
    together. I know that we're going to have an awful lot to talk
    about.
        Senator Ayotte. Thank you, Senator Kaine. Appreciate your
    leadership.
        I would like to call on, first, for testimony, General
    Daniel Allyn, the Vice Chief of Staff of the United States
    Army.

    STATEMENT OF GENERAL DANIEL B. ALLYN, USA, VICE CHIEF OF STAFF,
                           UNITED STATES ARMY

        General Allyn. Thank you, Madam Chair Ayotte, Ranking
    Member Kaine, distinguished members of the subcommittee. Thanks
    for inviting me to testify on the readiness of your United
    States Army.
        We live in a dangerous world, as you've both talked about.
    After more than 14 years of continuous combat, it is tempting
    to hope that a respite lies just over the horizon. Instead, the
    velocity of instability is increasing, and demand for Army
    forces across a range of military operations is increasing.
        At current end strength, the Army risks consuming readiness
    as fast as we build it. Today, the Army is globally engaged,
    with more than 186,000 Total Force soldiers deployed in support
    of combatant commanders in over 140 countries. These soldiers
    conduct combat operations, deter aggression, and assure our
    allies and partners.
        In Afghanistan, the Army continues to train, advise, and
    assist Afghan National Security Forces to defeat the enemies of
    our country. In Iraq, we build partner capacity to fight the
    Islamic State of Iraq and the Levant. In Africa and throughout
    the Americas, we partner to prevent conflict and to shape the
    security environment. In the Pacific, more than 75,000 soldiers
    remain committed, including 20,000 who stand ready in the
    Republic of Korea. In Europe and Asia, Army forces reassure
    allies and deter Russian aggression. At home and in every
    region of the world, the Army stands ready.
        This is why readiness is, and must remain, the Army's
    number-one priority. Training is the bedrock of that readiness.
    To provide trained and ready forces to combatant commanders,
    the Army must conduct realistic and rigorous training across
    multiple echelons. Realistic training demands predictable and
    sustained resources in both time and money. To ensure a trained
    and ready Army today, the Army is accepting considerable risk
    by reducing end strength while deferring modernization programs
    and infrastructure investments. These tradeoffs are reflections
    of constrained resources, not strategic insight.
        The Army requests congressional support to rebuild
    readiness, maintain end strength, equip our soldiers with the
    best systems now and in the future, and provide soldiers and
    their families with quality of life commensurate with their
    unconditional service and their sacrifice. With your
    assistance, the Army will continue to produce the best-trained,
    best-equipped, and best-led Army forces to fight as our Nation
    calls them.
        We thank Congress for your steadfast support of our
    outstanding men and women in uniform, our Army civilians, our
    families, and our veterans. They deserve our best effort.
        Thank you again for allowing me to join you today, and I
    look forward to your questions.
        [The prepared statement of General Allyn follows:]

                   Prepared Statement by General Daniel Allyn
                                  introduction
        Chairman Ayotte, Ranking Member Kaine, distinguished Members of the
        Subcommittee, thank you for the opportunity to testify on the
    readiness of your United States Army. On behalf of our Acting
    Secretary, the Honorable Patrick Murphy, and our Chief of Staff,
    General Mark Milley, I would also like to thank you for your support
    and demonstrated commitment to our soldiers, Army civilians, families,
    and veterans.
        We live in a dangerous world, and after more than 14 years of
    continuous combat, it is tempting to hope that a respite lies just over
    the horizon. Instead, the global security environment remains unstable
    and continues to place a high demand on the Army. Instability across
    Europe, the Middle East, Africa, and the Pacific, coupled with
    continued threats to the Homeland, demand our Army remain an
    indispensable foundation of the Joint Force while we simultaneously
    build the Army for the future.
        Today, the Army is globally engaged with more than 186,000 soldiers
    supporting combatant commanders in over 140 countries. These soldiers
    conduct combat operations, deter aggression, and assure our Allies and
    partners. In Afghanistan, the Army continues to engage the enemy as we
    work with Allies and partners to train, advise, and assist Afghan
    National Security Forces. In Iraq, we build partner capacity to fight
    the Islamic State of Iraq and the Levant. In Africa, and throughout the
    Americas, we partner to prevent conflict and shape the security
    environment. In the Pacific, more than 75,000 soldiers remain
    committed, including 20,000 who stand ready in the Republic of Korea.
    In Europe and Asia, Army forces reassure Allies and deter Russian
    aggression. At home and supporting every region of the world, the Army
    stands ready.
        In this unstable and unpredictable world, the Army is called to
    lead. We are called to lead because the Army delivers the essential
    backbone that provides foundational capabilities to Joint, interagency,
    and multi-national teams. America's Army remains capable of compelling
    the Nation's enemies through decisive action and our Army is called to
    lead because we are trusted professionals. It is the character,
    competence, and commitment of our soldiers that makes our Army the
    greatest land force in the world today.
        To meet the demands of today's security environment and maintain
    the trust placed in us by the American people, our Army requires
    sustained, long term, and predictable funding. Although the Bipartisan
    Budget Act (BBA) of 2015 provided short-term relief, funding levels
    have not kept pace with the realities of the strategic environment. The
    fiscal year 2017 Army Budget base request of $125.1 billion is $1.4
    billion less than the fiscal year 2016 enacted budget of $126.5
    billion. While the budget provides a modicum of predictability, it is
    insufficient to simultaneously rebuild decisive action readiness and
    modernize. To ensure sufficient readiness for the demands of today's
    operating environment, the Army must assume risk by reducing end-
    strength, delaying modernization, and deferring infrastructure
    recapitalization and investment. These trade-offs mortgage future
    readiness.
        Absent additional legislation, the caps set by the Budget Control
    Act of 2011 will return in fiscal year 2018, forcing the Army to
    further draw down end strength, reduce funding for readiness, and
    increase the risk of sending under-trained and poorly equipped soldiers
    into harm's way--a preventable risk our Nation must not accept. We
    request Congressional support of the fiscal year 2017 President's
    budget request that will fund readiness, maintain end-strength, equip
    our soldiers with the best systems now and in the future, and provide
    soldiers and their families with quality of life commensurate with
    their unconditional service and sacrifice.
    Readiness: Manning, Training, Equipping/Sustaining and Leader
            Development
        Readiness is the Army's number one priority. The Army's primary
    focus on counterinsurgency operations for the last decade shaped a
    generation of leaders and imparted invaluable skills and experience
    across the force. This mission focus forced us to accept developmental
    trade-offs. Fourteen years of sustained counter-insurgency operations
    degraded the Army's ability to conduct operations across the entire
    spectrum of conflict and narrowed the experience base of our leaders.
    The global security environment now demands a shift in focus to support
    Joint operations against a wide range of threats in diverse
    environments. The ability to conduct combined arms maneuver in support
    of the Joint Force to deter, deny, compel, and defeat the threat of
    hybrid warfare represents the benchmark by which we will measure our
    future readiness.
        A ready Army is a fully manned, well trained, well equipped, and
    competently led force able to conduct Joint missions to deter and
    defeat a wide range of adversaries. A ready Army enables the Joint
    Force to protect our Nation and win decisively in combat.
    Manning:
        At today's end-strength, the Army risks consuming readiness as fast
    as we build it. Today, the Army has one third fewer Brigade Combat
    Teams (BCT) than it did in 2012, yet emergent demand for Army forces
    across Combatant Commands has increased by 23 percent during the same
    period. Reductions to end-strength below the current plan will reduce
    the Army's ability to meet emerging global requirements, affecting
    combatant commanders' efforts to prevent conflict and shape their
    security environments.
        Demand for Army forces, combined with current end-strength
    limitations, will reduce the Army's capacity to support the National
    Military Strategy. Of the Army's 20 Ready or Fully Ready BCTs, 11 are
    already committed to Combatant Command missions around the globe,
    leaving only nine to provide strategic flexibility for unforecasted
    contingencies. To address this reality, manage risk, and maximize
    readiness of our fighting formations, we reorganized our BCTs,
    implemented the Sustainable Readiness Model (SRM), and optimized the
    contributions from all components of our Total Army.
        In fiscal year 2015, the Brigade Combat Team reorganization
    enhanced the combat effectiveness of our fighting units by adding a
    third maneuver battalion to CONUS BCTs while reducing the total number
    of BCTs from 73 to 60 (32 Active Army and 28 Army National Guard) in
    the Total Force. Although we cut 13 BCTs, we retained 93 of our
    original 100 maneuver battalions, decreased the number of headquarters
    and personnel, and retained combat power with our operational
    battalions.
        To ensure the highest level of readiness throughout the Army, we
    initiated a Total Force effort to generate, assess, and monitor
    readiness through the Sustainable Readiness Model. SRM is an enduring
    process that enables the Army to clearly analyze and evaluate
    readiness, optimize resources and unit activity, and minimize risk. The
    end state of the SRM is to build and sustain the highest possible
    readiness levels across the Total Force.
        Optimizing readiness requires an appropriate mix of forces across
    Active, National Guard and Reserve units. Given increasing global
    demand, a smaller Active Army requires all components to increase
    deployment frequency. To support Joint Force requirements worldwide
    over the last 14 years, the Army increased operational use of the Army
    National Guard and the Army Reserve. We will continue this trend. With
    the support of Congress, the Army can maintain the appropriate force
    mix capable of conducting sustained operations worldwide.
        To this end, the Army appreciates the insights of the National
    Commission on the Future of the Army. We are carefully assessing their
    recommendations for potential implementation to increase Army
    readiness, consistent with statute, policy, and available resources.
    Implementation of recommendations will require a coordinated effort
    across the Army's three components. The Army's ongoing analysis will
    determine if implementation requires additional funding.
    Training:
        Training is the bedrock of readiness. To provide trained and ready
    forces, the Army must conduct realistic and rigorous training across
    multiple echelons. Realistic training demands predictable and sustained
    resources, in time and money. To ensure a trained and ready Army today,
    the Army accepts considerable risk by reducing end-strength while
    deferring modernization programs and infrastructure investments. These
    trade-offs are reflections of constrained resources, not strategic
    insight. But, given end-strength reductions, budget constraints, and
    global demand, the Army prioritized building decisive action
    proficiency to rebuild readiness across the force and assure a
    predictable flow of trained and ready forces for Combatant Command
    requirements.
        Today, less than one-third of Army forces are at acceptable levels
    of readiness to conduct sustained ground combat in a full spectrum
    environment against a highly lethal hybrid threat or near-peer
    adversary. To mitigate this risk, the Army will continue to prioritize
    readiness. In addition to fully funding CTC rotations, the Army is
    establishing objective training standards, reducing non-essential
    training requirements, and protecting home station training to increase
    training rigor and readiness in our formations. We will build decisive
    action proficiency through repeated, high quality training iterations
    at home station before units attend CTC rotations, while sustaining the
    readiness of our remaining forces. This strategy enables the most
    effective and efficient use of training resources and focuses our
    leaders to optimize readiness across the Army.
        A ready Army requires highly trained units across all components.
    To build sufficient operational and strategic depth, the Army is
    exploring a number of initiatives to build increased readiness in our
    Reserve Component units. This includes increasing the number of annual
    training days to provide sufficient repetition in core tasks; building
    multi-component and round-out units to enhance Total Force integration;
    and expanding CTC rotations for National Guard BCTs from two to four
    annually. These initiatives would provide readiness for current
    operations and ensure strategic depth required for future campaigns,
    and will require increased funding.
    Equipping/Sustaining:
        A trained and ready Army requires modernized equipment to win
    decisively. This includes the equipment soldiers use in combat and the
    infrastructure that supports them as they prepare, deploy, and return
    from battle. Technological overmatch against our adversaries is a
    hallmark of America's Army and as leaders, we have an obligation to
    deploy our soldiers into combat with the best equipment our Nation can
    provide.
        However, an unintended consequence of current fiscal constraints is
    that the Army can no longer afford the most modern equipment, and we
    risk falling behind near-peers in critical capabilities. Decreases to
    the Army budget over the past several years significantly impacted Army
    modernization. Since 2011, the Army ended 20 programs, delayed 125 and
    restructured 124. Between 2011 and 2015, Research and Development and
    Acquisition accounts plunged 35 percent. Procurement alone dropped from
    $21.3 billion to $13.9 billion. Given these trends, and to preserve
    readiness in the short term, the Army has been forced to selectively
    modernize equipment to counter our adversary's most pressing
    technological advances and capabilities. These decisions increase the
    time necessary to defeat an adversary, increase risk to mission, and
    potentially increase casualty rates. It reflects the best of bad
    options, given current fiscal constraints.
        The Army developed the Army Equipment Modernization Strategy to
    preserve readiness in the short term and manage risk in the mid to long
    term. The strategy reflects those areas in which the Army will focus
    its limited investments for future Army readiness. We request the
    support of Congress to provide flexibility in current procurement
    methods and to fund the five capability areas--Aviation, the Network,
    Integrated Air Missile Defense, Combat Vehicles, and Emerging Threats--
    to provide the equipment the Army requires to fight and win our
    Nation's wars.
        To provide greater Aviation combat capability at lower cost, the
    Army continues to execute the Aviation Restructuring Initiative (ARI).
    Today, ARI is fully underway and the benefits of our hard choices are
    starting to show. The Army has already inactivated one Combat Aviation
    Brigade, converted the 12th Combat Aviation Brigade, inactivated seven
    Air Cavalry Squadrons, divested nearly all of the OH58D fleet, stopped
    all TRADOC OH-58D training, transferred 66 LUH aircraft to Fort Rucker,
    and transferred 28 UH-60Ls to the National Guard and eight MEDEVAC UH-
    60s to the Army Reserve. Additionally, the Army is examining the
    recommendations of the National Commission on the Future of the Army as
    we work to ensure the most modern Aviation capabilities are ready now
    while underwriting critical modernization efforts to build the future
    Aviation force.
        The Army Network provides foundational capabilities to the Joint
    Force, requiring the Army to maintain a robust Network hardened against
    cyber-attacks. Key investments in the Army Network are Warfighter
    Information Network-Tactical; assured position, navigation, and timing;
    communications security; and defensive and offensive cyberspace
    operations. Given the rapid advances in the cyber warfare capabilities
    of our adversaries, these investments ensure access to reliable,
    timely, and secure information, enabling our Joint Force to sustain a
    decisive advantage.
        The Army is investing in Integrated Air Missile Defense to defeat a
    wide array of threats, from micro unmanned aerial vehicles to cruise
    missiles and medium range ballistic missiles. The Army will continue to
    upgrade the Integrated Air and Missile Defense Battle Command System,
    Indirect Fire Protection Capability, and Patriot missile system. These
    investments ensure the Joint Force remains capable and ready to defeat
    the most advanced adversaries in an array of contested environments.
        Army improvements to Combat Vehicles focus on the Ground Mobility
    Vehicle, Stryker lethality upgrades, Mobile Protected Firepower, and
    the Armored Multi-Purpose Vehicle. These investments ensure future Army
    maneuver forces retain the optimal capability in expeditionary
    maneuver, air-ground reconnaissance, joint combined arms maneuver, and
    wide area security.
        Finally, the Army addresses emerging threats by focusing Science
    and Technology investments on mature technologies with the greatest
    potential for future use. We are investing in innovative technologies
    to protect mission-critical systems from cyber-attacks, enhance active
    protection systems for both ground and air weapons systems, improve
    aircraft survivability, expand future vertical lift, and employ
    cutting-edge directed energy, cyber, and integrated electronic warfare
    weapons.
        To prioritize readiness, a second area in which the Army assumes
    risk is in installation modernization and infrastructure improvement.
    Installations are the Army's power projection platforms and a key
    component in generating readiness. To build readiness, however, the
    Army has been forced to cancel or delay military construction,
    sustainment, restoration and modernization across our posts, camps and
    stations. Additionally, the Army reduced key installation services,
    individual training programs, and modernization to a level that impacts
    future readiness and quality of life. In addition to effects on soldier
    quality of life, these cuts force commanders to divert soldiers from
    training to perform life-support tasks. We estimate an annual burden of
    at least $500 million to operate excess or underutilized facilities--an
    amount that would fund an Armored BCT European Activity Set for almost
    an entire year.
        The deliberate decision to prioritize readiness over Army
    modernization and installation improvement is an unfavorable choice. To
    meet current operational requirements, however, combatant commanders
    employ almost one-third of the Active Army and regularly require access
    to critical Reserve component capabilities. If in the midst of these
    current operations the Army is directed to support a major war plan,
    the additional requirements will consume the rest of the Army--all
    three components--for the duration of the conflict. This imperative
    requires the Army to maximize the readiness of our remaining forces
    while managing future risk as best we can.
    Leader Development:
        The single most important factor in delivering Army readiness, both
    now and in the future, is the development of decisive leaders of
    character at every echelon. In a complex and uncertain world, the Army
    will cultivate leaders who thrive in uncertainty and chaos. Our
    creative, adaptive, and agile leaders deliver success on the
    battlefield and sustain our All Volunteer Force.
        To ensure the Army retains this decisive advantage, we are
    increasing funding for leader development across the force; from the
    individual, unit, and institution level. This year, the Army will train
    approximately 130,000 leaders from all three components in its
    Professional Military Education programs. We instituted the Select,
    Train, Educate and Promote process to improve leader development of
    non-commissioned officers and we continue to enhance the strategic
    development of our officers through broadening assignments in graduate
    school, inter-agency fellowships, and training with industry. Despite
    budget constraints, we will continue to fund these priority programs,
    targeted to develop leaders who demonstrate the necessary competence,
    commitment and character to win in a complex world.
        Decisive leaders also strengthen the bond between our Army and the
    Nation and preserve our All-Volunteer Force. Empowered leaders instill
    the Army values in our soldiers and uphold the high standards that our
    Nation expects. As Army leaders, we continue to express our enduring
    commitment to those who serve, recognizing that attracting and
    retaining highly-qualified individuals in all three components is
    critical to readiness. This is why our fiscal year 2017 budget request
    includes key initiatives that support leaders of character in
    mitigating the unique challenges of military life, fostering life
    skills, strengthening resilience, and promoting a strong and ready
    Army.
        The Army is expanding our Soldier for Life program to drive
    cultural change. Our soldiers will receive the tools to succeed across
    the continuum of their Service to our country, in or out of uniform. As
    they return to civilian life, soldiers will continue to influence the
    most talented young people to join the Army and, along with retired
    soldiers and veterans, retain the vital link with our Nation's
    communities. As we reduce the Army's end-strength, we owe it to our
    soldiers and their families to ensure our veterans strengthen the
    prosperity of our Nation through rewarding and meaningful civilian
    careers and service to their communities.
        Committed and engaged leadership is the focal point of our SHARP
    prevention efforts. The Army's ``Not in My Squad'' program is a grass
    roots initiative to develop a unit culture that prevents sexual
    harassment and sexual assault. The Army instituted a SHARP Resource
    Center pilot program; a ``one-stop shop'' to coordinate and support all
    SHARP services on an installation. Cadet Command has 232 Reserve
    Officer Training Corps programs that have signed partnership charters
    with civilian academic institutions, and cadets serve as peer mentors,
    bystander intervention trainers, and sexual assault prevention
    advocates. Future Army initiatives will continue to focus on prevention
    through the use of ``I. A.M. Strong'' and ``Not In My Squad''
    campaigns. These holistic prevention efforts will shape Army culture
    and enrich Army readiness.
        Army leaders remain committed to building diverse teams. Opening
    the Army to all qualified citizens of our Nation builds upon the best
    the United States has to offer. Diversity of thought strengthens our
    bonds with America and builds readiness by contributing diverse
    solutions to complex problems. The Army is in full compliance with the
    Department's Women in Service Review and is prepared to fully integrate
    women in all occupational specialties. The Army's deliberate process
    validated standards, grounded in real-world operational requirements,
    and will provide our integrated professional force the highest level of
    readiness and potential for mission success.
        Decisive leaders are essential to maintaining a ready Army,
    composed of resilient individuals and cohesive teams, capable of
    accomplishing a range of operations in environments of uncertainty and
    persistent danger.
                                    closing
        Today, our Army stands ready to defend the United States and its
    interests. This requires sustained, predictable funding. To rebuild
    readiness today and prepare for tomorrow's challenges, the Army has
    prioritized decisive action readiness required to respond to current
    security challenges. The difficult trade-offs in modernization and
    installation improvements reflect the hard realities of today's fiscal
    constraints.
        The strength of the All-Volunteer Force is our soldiers, civilians
    and their families, and we must do all we can to ensure they stay
    ready. History provides recurring testimony to past failures to heed
    this harsh reality, which ultimately falls on the backs of our
    soldiers. With your assistance, the Army will continue to resource the
    best-trained, best-equipped and best-led fighting force in the world.
    We thank Congress for the steadfast support of our outstanding men and
    women in uniform, our Army Civilians, Families, and Veterans. They
    deserve our best effort.

        Senator Ayotte. Thank you, General Allyn.
        I'd like--I'd now like to call on Admiral Howard, the Vice
    Chief of Staff of Naval Operations.

      STATEMENT OF ADMIRAL MICHELLE J. HOWARD, USN, VICE CHIEF OF
                  NAVAL OPERATIONS, UNITED STATES NAVY

        Admiral Howard. Chairman Ayotte, Senator Kaine, and
    distinguished members of the subcommittee, it is my honor to
    represent the thousands of Navy sailors and civilians who
    sustain operations around the globe.
        I appreciate the opportunity to testify on the current
    state of Navy readiness and the projected changes to that
    readiness with the fiscal year 2017 budget request. This budget
    submission provides the resources for our deployed forces and
    supports our continued readiness recovery efforts. This
    submission also contains the hard choices and tradeoffs we made
    to achieve future warfighting capability. In a design for
    maintaining maritime superiority, the Chief of Naval
    Operations, Admiral Richardson, has challenged the Navy team to
    meet the demands of our mission along four lines of efforts.
    First, the readiness funding directly contributes to
    strengthening naval power at and from sea. Navy readiness
    organizations are actively engaged in efforts to meet the
    second line of effort, to achieve high-velocity learning at
    every level by investing in our sailors through new and
    reinvigorated training programs. We support the third line of
    effort to strengthen our Navy team for the future by employing
    innovative training methodologies to accelerate productivity of
    new shipyard employees. Lastly, we strive to expand and
    strengthen our network of partners in order to meet our most
    critical challenges. We have reached out to industry to address
    our shipyard and aviation depot workload. Our budget request
    supports the design, and, if executed, will result in continued
    operational excellence throughout our Navy.
        The demand for naval assets by global combatant commanders
    remains high, and Navy continues to provide maximum sustainable
    global presence. Supporting this posture requires a commitment
    to protect the time and funds needed to properly maintain and
    modernize our force. Full recovery of the material readiness of
    the fleet is likely to extend beyond 2020. Stable funding,
    improvement in on-time execution of ship and aviation depot
    maintenance, and steady-state operations are required to meet
    our fleet readiness goals.
        As we proceed on the road to recovery for float operational
    units, we continue to do so by taking conscious risk in the
    maintenance of our shore infrastructure. To mitigate impacts
    ashore, Navy has made difficult decisions and focused on items
    directly tied to our primary missions. As a tradeoff, Navy
    continues to postpone much needed repairs and upgrades for the
    majority of our infrastructure.
        Continued shortfalls in our facility sustainment will
    eventually have effects on our sea readiness model. Failing to
    plan for these necessary investments will continue to slow our
    future recovery. We are still paying down the readiness debt we
    accrued over the last decade, but more slowly than we would
    prefer and at continued risk to our shore infrastructure.
        Powered by our exceptional sailors and civilians, your Navy
    is the world's finest, and we are committing to retaining our
    superiority. This budget represents a margin of advantage over
    our adversaries. That margin could be lost if we do not achieve
    stable budgets. We can only maintain our status as the world's
    greatest Navy with constant vigilance, dedication to restoring
    our readiness, and a commitment to sustain forces around the
    globe.
        With that, I'd like to depart from my prepared remarks with
    one caveat. Senator Kaine, you talked about August of 9/11 as a
    milestone. For my Navy, there's another issue that's capacity
    all of its own as it affects readiness. On another 9/11, I was
    in the Pentagon. At the end of that timeframe, when we--when 9/
    11 happened, we had 14 carriers, we had over 300 ships, and we
    had 60,000 more people in the United States Navy. During this
    time of conflict, we have become more efficient, we are a
    smaller Navy, but we are at 272 ships, as of today. That's
    ships and submarines. We are growing back to over 308 ships,
    and I appreciate the support of this committee in understanding
    the purpose of the Navy and helping us get back to where I
    believe we need to be, in terms of capacity. We've got to have
    a certain core capacity in order to achieve readiness for the
    warfight.
        I extend my thanks to all of you for your efforts in
    continue to support.
        Thank you.
        [The prepared statement of Admiral Howard follows:]

                 Prepared Statement by Admiral Michelle Howard
        Chairman Ayotte, Senator Kaine, and distinguished members of the
    Senate Armed Services Subcommittee on Readiness and Management Support,
    I appreciate the opportunity to testify on the current state of Navy
    readiness and projected changes to that readiness with the fiscal year
    2017 budget request. This budget submission provides the resources to
    deliver sustainable deployed forces and supports our continued
    readiness recovery efforts. The submission also contains the hard
    choices and tradeoffs we were obligated to make in order to achieve
    future warfighting capability.
        America's security and prosperity are inextricably linked to
    maritime freedom. With over 90 percent of our trade traveling the seas,
    the fiscal year 2017 Navy budget submission provides a thoughtful
    approach to meeting our security challenges within our budgetary means.
    We have balanced capability and capacity, delivered current and future
    readiness, and postured our forces to meet geographic combatant
    commanders' (GCCs) missions, while rebuilding our contingency response
    posture in a difficult budget environment. Although we have seen
    improvements in rebuilding the workforce in both our public shipyards
    and aviation depots, we have not yet recovered from the readiness
    impacts resulting from a decade of combat operations. The cumulative
    effect of budget reductions, complicated by four consecutive years of
    continuing resolutions, continues to impact maintenance, afloat and
    ashore. The secondary effects of these challenges impact material
    readiness of the force, and the quality of life of our sailors and
    their families.
        In ``A Design for Maintaining Maritime Superiority'' the Chief of
    Naval Operations, Admiral Richardson, has challenged the Navy team to
    meet the demands of our mission along four lines of effort. The
    readiness funding accounts directly contribute to Strengthening Naval
    Power at and from Sea. In addition, Navy readiness organizations are
    actively engaged in efforts to Achieve High Velocity Learning at Every
    Level, by investing in our sailors through new and reinvigorated
    training programs, and to Strengthen our Navy Team for the Future, by
    employing innovative training methodologies to accelerate productivity
    of new shipyard employees. To meet our most critical challenges, we
    must also Expand and Strengthen our Network of Partners. We have
    reached out to industry to meet some of our most critical challenges in
    shipyard and aviation depot workload. Our budget request supports this
    Design and if executed will result in continued operational excellence
    throughout our Navy.
        Although our readiness shows improvement, recovery is not yet
    complete. Full recovery of the material readiness of the Fleet is
    likely to extend beyond 2020. Stable funding, improvement in on-time
    execution of ship and aviation depot maintenance, and steady state
    operations are required to meet our Fleet readiness goals. As we
    proceed on the road to recovery for afloat operational units, we
    continue to do so by taking conscious risk in the recapitalization,
    maintenance, and operation of our shore infrastructure. To mitigate
    impacts ashore, Navy has made difficult decisions and focused on shore
    items directly tied to our primary missions.
        My testimony today will focus on the current readiness of the Navy
    as set forth in our fiscal year 2017 budget submission, provide an
    overview of our readiness recovery efforts to restore our contingency
    response posture, and address challenges to delivering future
    readiness.
                 current navy operations and mission readiness
        The demand for naval assets by the GCCs remains high, and Navy
    continues to provide the maximum sustainable global presence it can
    generate to support a diverse array of GCC missions. Today, the Harry S
    Truman Carrier Strike Group (CSG) is underway in the CENTCOM area of
    responsibility while the John C Stennis CSG conducts operations in the
    Western Pacific. The Stennis CSG will also support RIMPAC 2016 this
    summer. This is the first year since 2009 that Navy has been able to
    provide a CSG to PACOM while the forward deployed CSG was in
    maintenance. Over the past twelve months, three CSGs conducted strike
    missions against ISIS in support of Operation Inherent Resolve. Four
    Amphibious Readiness Groups (ARGs) with embarked Marine Expeditionary
    Units (MEUs) supported a wide range of missions including maritime
    security operations, strike missions against ISIS and blockade support
    off the coast of Yemen as part of Operation Restore Hope. Closer to
    home, fleet ocean tug USNS Apache (T-ATF 172) embarked a deep-water
    search and salvage team and successfully located the U.S. flagged
    merchant vessel El Faro after her sinking off the coast of the Bahamas
    during Hurricane Joaquin. Across the globe, the Navy supported other
    critical GCC missions such as theater security cooperation, anti-
    piracy, counter-drug, ballistic missile defense, and Intelligence,
    Surveillance, and Reconnaissance. Missions such as these not only
    demonstrate our responsiveness and warfighting prowess, but maintain
    our sailor proficiency, a key aspect of readiness which can only be
    bought with time at sea.
        The Optimized Fleet Response Plan (OFRP), in conjunction with
    ongoing Fleet material condition reset efforts, is designed to support
    Navy's overall readiness recovery goals and maximize the employability
    of our operational units for both sustainable presence and contingency
    response. To date, three CSGs and four ARGs have been inducted into
    OFRP. In 2016, the Dwight D. Eisenhower CSG will be the first to deploy
    under the OFRP construct. Fleet implementation of OFRP for CSGs is
    scheduled to be complete in fiscal year 2021 with the deployment of the
    Gerald R Ford CSG. While it is difficult to pinpoint an exact readiness
    recovery timeframe for each of our force elements given the array of
    factors involved, we predict CSG readiness recovery will occur slightly
    outside of the Future Year Defense Program (FYDP). ARG recovery will
    remain constrained until we complete modernization of our large deck
    amphibious ships to include the capability to operate the F-35B. Key to
    our success is operating the battle force at a sustainable level over
    the long term. As stated in fiscal year 2016 testimony, readiness
    recovery requires a commitment to protect the time needed to properly
    maintain and modernize our capital-intensive force and to conduct full-
    spectrum training. Achieving full readiness also requires us to restore
    capacity and throughput at our public shipyards and aviation depots,
    primarily through hiring and workforce development. Successful efforts
    in meeting hiring goals have been largely achieved. OFRP allows us to
    recover material readiness without hindering our forward presence,
    provide our sailors and their families with predictable deployment
    schedules, and preserve our force structure so that it meets service
    life expectations.
                 strengthening naval power at and from the sea
        The Navy's fiscal year 2017 budget request ensures the readiness of
    our deployed forces to operate and fight decisively, meets the
    adjudicated requirements of the fiscal year 2017 Global Force
    Management Allocation Plan (GFMAP), and supports implementation of the
    Optimized Fleet Response Plan. In fiscal year 2017, Navy will stabilize
    deployment length for the first time in many years. For fiscal year
    2017, no Navy ship is scheduled to deploy for greater than seven
    months. The establishment of this important tenet of OFRP will help
    instill the predictability required for our shipyards and aviation
    depots. In addition, the predictability is a positive quality of life
    factor for our sailors and their families. This is a major milestone in
    Navy's ongoing readiness recovery.
    Ship Operations
        The baseline Ship Operations request for fiscal year 2017 provides
    an average of 45 underway steaming days per quarter for deployed ships
    and 20 days non-deployed, and supports the highest priority presence
    requirements of the combatant commanders. With Overseas Contingency
    Operations (OCO) funding, ship operations are funded at 58 steaming
    days deployed and 24 days non-deployed. This total funding allows Navy
    to meet the fiscal year 2017 ship presence requirement, supports the
    higher operational tempo for deployed forces, and provides full funding
    for ships deployed or preparing to deploy. This account also supports
    spare parts inventories, organizational level maintenance consumables,
    and administrative and travel requirements. Because of a constrained
    top line the Navy took risk. Those latter elements of the Ship
    Operations account were reduced for one year to 90 percent of the
    requirement. This funding reduction will have some impact on the
    restocking of spare parts for non-deployed ships, but is recoverable if
    addressed in the next budget cycle.
    Air Operations (Flying Hour Program)
        The Flying Hour Program (FHP) funds operations, intermediate and
    unit-level maintenance, and training for nine Navy Carrier Air Wings,
    three Marine Corps Air Wings, Fleet Air Support aircraft, training
    squadrons, Reserve forces, and various enabling activities. Combined
    baseline and OCO funding will be required to maintain current and
    future levels of readiness for deployment. OCO funding also supports
    additional deployed operating tempo to meet combatant commander
    requirements above baseline funding. All Navy and Marine Corps aviation
    squadrons deploy with their full entitlement of aircraft, however some
    squadrons are challenged to achieve their required training readiness
    levels in early phases of the operational cycle, or following
    deployment due to shortfalls in available aircraft. To improve depot
    throughput, the Naval Aviation Enterprise is aggressively tackling
    three initiatives that include decreasing Work in Progress (WIP),
    reducing cycle time, and increasing capacity which will restore combat
    sustainment readiness levels.
    Spares
        While replenishment of ``off the shelf'' spares used in ship and
    aircraft maintenance is funded through the Ship Operations and Flying
    Hour Programs, the provision of initial and outfitting spares for new
    platforms, systems, and modifications is funded through the procurement
    appropriation spares accounts (APN/OPN). In recent years, these
    accounts have been funded below requirements due to budget constraints.
    fiscal year 2017 sustains sufficient funding levels to reduce the
    cross-decking between units and cannibalization of parts driven by
    unfilled requisitions. fiscal year 2017 starts to stabilize funding
    necessary to ensure parts are available when needed. This is
    complemented by Navy-wide efforts to improve execution of these
    accounts, which has achieved considerable success in aviation spares by
    meeting first year execution benchmarks over the last three years.
    Sustaining the Force--Ship and Aircraft Maintenance
        The Navy maintenance budget requests are built upon independently
    certified models, reflecting engineered maintenance plans for each ship
    class and aviation type/model/series. Our shipyards and aviation depots
    have been challenged by emergent work beyond that expected, associated
    with a decade of high tempo operations and additional wear on assets.
    The workforce behind our public and private depots is no longer
    sufficient for these emergent projects and is still in the midst of
    rebuilding and training new workers.
        Resetting our surface ships and aircraft carriers after more than a
    decade of war led to significant growth in public and private shipyard
    workload. The Navy baseline budget request funds 70 percent of the ship
    maintenance requirement across the force, addressing both depot and
    intermediate level maintenance for carriers, submarines and surface
    ships. OCO funding provides the remaining 30 percent of the baseline
    requirement and allows for the continued reduction of surface ship
    life-cycle maintenance backlogs. For the second year, the additional
    OCO request to support Navy's maintenance reset ($625 million) includes
    funding for aircraft carriers (CVNs) in addition to other surface fleet
    assets, to address increased wear and tear outside of the propulsion
    plant. Since much of this reset work can only be accomplished in a
    drydock, the maintenance schedule needs to be closely managed, as reset
    is expected to continue across the FYDP.
        To address the increased workload in our public shipyards and
    improve on-time delivery of ships and submarines back to the Fleet, the
    fiscal year 2017 budget promotes growth in our shipyard workforce,
    sustaining 33,500 Full Time Equivalents (FTE) in fiscal year 2017, with
    additional investments for workforce training and development.
    Additionally, two attack submarine (SSN) availabilities were moved to
    the private sector in fiscal year 2017 to help level load shipyard
    workload.
        The Fleet Readiness Centers (FRCs) and Navy's aviation depots have
    been challenged to recover full productivity after hiring freezes,
    furloughs, and overtime restrictions in fiscal year 2013. Through a
    concerted hiring effort with the support of congressional budgetary
    increases, the recovery in maintenance capability is in progress.
    However, the FRCs face a significant backlog of work, particularly for
    the service life extension of our legacy F/A-18 Hornets. FRCs hiring
    progress returned to pre-sequestration manning levels in fiscal year
    2015 and they continue to adjust hiring in order to ensure the
    workforce can meet the workload demand. In an effort to improve
    throughput, FRCs are increasing engineering support to address the work
    required to reach 10,000 hours of service life, reallocating some of
    the existing workforce, and contracting additional private sector
    support. Navy has increased its number of field teams to improve flight
    line maintenance and ensure there is a clear understanding of the
    material condition of airframes heading to the depots. FRCs have also
    developed repair kits that ensure long-lead parts are readily available
    as repair parts are identified.
        The Aviation Depot Maintenance program is funded to 76 percent in
    baseline and 85 percent with OCO for new work to be inducted in fiscal
    year 2017. This funding level supports repairs for 583 airframes and
    1,684 engines/engine modules.
    Navy Expeditionary Combat Forces
        Navy expeditionary combat forces support ongoing combat operations
    and enduring GCC requirements by deploying maritime security,
    construction, explosive ordnance disposal, logistics, and intelligence
    units to execute missions across the full spectrum of naval, joint and
    combined operations. In fiscal year 2017, baseline funding remains
    significantly improved over prior years, providing 79 percent of the
    enduring requirement, with OCO supporting an additional 17 percent of
    the requirement.
    Shore Infrastructure
        Navy's 70 installations worldwide provide the platform to train and
    prepare our sailors, deploy our ships and aircraft, and support our
    military families. Nevertheless, fiscal constraints over the past
    several years have caused Navy to take deliberate risk in shore
    infrastructure in order to sustain Fleet readiness today.
        Navy's Military Construction program, which is resourced at the
    lowest level since 1999, is prioritized to support combatant commander
    requirements, enable new platforms/missions, upgrade utility
    infrastructure, and recapitalize our Naval Shipyards. Navy is also
    taking some risk in the sustainment, restoration, and modernization of
    our existing buildings, piers, runways, hangars, utilities systems, and
    support facilities. Our fiscal year 2017 facilities sustainment account
    is resourced at 70 percent of the OSD facilities sustainment model,
    which falls short of DOD's goal of 90 percent for the sixth year in a
    row. Navy's fiscal year 2017 request for restoration and modernization
    funding is roughly half of fiscal year 2016 levels. This is only enough
    to address the most critical deficiencies for the naval shipyards,
    nuclear enterprise, piers and runways, and to renovate a small portion
    of inadequate barracks for our junior sailors. We are mitigating the
    risk in our infrastructure sustainment by prioritizing life/safety
    deficiencies and repairs for our mission-critical buildings and
    structures. By deferring less-critical repairs, we are increasing risk
    of greater requirements in the outyears and acknowledge that our
    overall facilities maintenance backlog will increase.
        Navy continues to postpone much-needed repairs and upgrades for the
    vast majority of our infrastructure, including utilities systems,
    waterfront structures, airfields, laboratories, administrative
    buildings academic institutions, warehouses, ordnance storage, roads,
    and other vital shore infrastructure. Long term underinvestment in
    these facilities will take an eventual toll on our ability to support
    deploying forces.
        Despite these challenges, the Navy is committed to improving the
    condition of our Naval Shipyards, which are critical to maintaining the
    warfighting readiness of our force. The Department of the Navy will
    again exceed the mandated capital investment of 6 percent across our
    shipyards and depots described in 10 USC 2476 with a 7.1 percent total
    investment in fiscal year 2017. We focus our shipyard investments to
    address the most critical safety and productivity deficiencies in
    Controlled Industrial Areas, which primarily include production shops,
    piers, wharfs, and dry docks.
                                   conclusion
        The fiscal year 2017 budget submission has been carefully
    structured to ensure the Navy continues readiness recovery through the
    implementation of OFRP. Continued shortfalls in our facilities
    sustainment will eventually have effects in our at sea readiness model,
    and failing to plan for these necessary investments will continue to
    slow our future recovery. We are still paying down the readiness debt
    we accrued over the last decade, but more slowly than we would prefer
    and at continued risk to our shore infrastructure.
        Powered by the exceptional sailors and civilians I am proud to
    represent today, your Navy is the world's finest and we are committed
    to retaining our superiority. This budget represents a margin of
    advantage over our adversaries. That margin could be lost if we do not
    achieve stable budgets. We will only maintain our status as the world's
    greatest Navy with constant vigilance, dedication to restoring our
    readiness, and sustaining forces around the globe. I thank you for your
    support.

        Senator Ayotte. Thank you, Admiral Howard.
        I would now like to call on General Paxton, the Assistant
    Commandant of the United States Marine Corps.

       STATEMENT OF GENERAL JOHN M. PAXTON, JR., USMC, ASSISTANT
                 COMMANDANT, UNITED STATES MARINE CORPS

        General Paxton. Thank you, Chairman Ayotte, Ranking Member
    Kaine, distinguished members of the Readiness Subcommittee. I
    appreciate the opportunity to appear before you again today and
    to report on the readiness of your United States Marine Corps.
        The Marine Corps is committed to remaining our Nation's
    ready force, a force that's truly capable of responding to any
    crisis anywhere around the world at a moment's notice. It has
    been so for 240 years, since Captain Nichols led his marines
    ashore in Nassau in March of 1776. Last year, the Congress
    reiterated the expectations of the 82nd Congress that the
    Marine Corps continue to serve as our country's expeditionary
    force in readiness, and to be most ready when the Nation is
    least ready, as you mentioned just a moment ago, Senator Kaine.
    I thank you for that reaffirmation, and assure you that today
    the Marine Corps is meeting, and will continue to meet
    tomorrow, your rightly high expectations.
        Marines continue to be in high demand from all our
    combatant commanders around the world. They are forward-
    deployed and engaged on land and on sea for crisis response in
    Africa, Europe, the Middle East, and the Pacific. Last year,
    marines conducted airstrikes in Iraq and Syria, they enabled
    Georgian forces operating in Afghanistan, and they conducted
    lifesaving and disaster-relief operations in Nepal, among many
    other issue--many other missions, all while remaining ready to
    respond at a moment's notice.
        Maintaining that ``fight tonight'' warfighting relevance
    across all five pillars of readiness requires careful
    balancing. We must constantly balance between operational
    readiness and institutional readiness, between capability and
    capacity, as the VCNO [Vice Chief of Naval Operations] just
    said, between current and future operations, between steady-
    state and between surge and between low-end and high-end
    operations as well as the training that goes with them, all of
    this as we face the increasing and varied demands from the
    combatant commanders.
        In our challenging fiscal environment, we're struggling to
    maintain all of those balances. As the Commandant said in his
    posture statement, the Marine Corps is no longer in a healthy
    position to generate current readiness and simultaneously reset
    all of our equipment while sustaining our facilities and
    modernizing to ensure future readiness.
        We have continued to provide the geographic combatant
    commanders with operationally ready forces to execute all of
    their assigned missions. In some cases, these units are fully
    trained only to those assigned missions, not the full spectrum
    of possible operations.
        In addition to this operational--in addition to this,
    operational readiness is generated at the cost of our wider
    institutional readiness. This year, I must again report that
    approximately half of our nondeployed units are suffering from
    some degree of personnel, equipment, or training shortfalls. We
    continue to prioritize modernization for the most important
    areas, particularly the replacement of aging aircraft and aging
    amphibious assault vehicles, but we are deferring other needs.
    Our installations continue to be the billpayers for today's
    readiness, putting the hard-earned gains from the past decade
    and the much needed and the congressionally supported military
    construction further at risk.
        While our deployed forces continue to provide the
    capabilities demanded by the combatant commanders, our capacity
    to do so over time and in multiple locations remains strained.
    Our deployment-to-dwell-time ratio continues to exceed the rate
    that we consider to be sustainable in the long term. The
    strains on our personnel and equipment are showing in many
    areas, particularly in aviation, in communications and
    intelligence. I'm prepared to talk about those, thank you.
        We have already been forced to reduce the capacity
    available to the COCOMs by reducing the number of aircraft
    assigned to several of our aviation squadrons, and we expect to
    continue those reductions throughout 2017.
        While we are able to maintain steady-state operations
    today, to include the ever-expanding Phase Zero operations and
    to better shape theater capacity for the combatant commanders
    and be focused on theater security cooperation, building
    partnership capacity, and sustaining mil-to-mil [military-to-
    military] engagements, our ability to surge for a crisis or for
    a warfight is increasingly challenged.
        Though your Marine Corps remains able to meet the
    requirements of the defense strategy and to conduct high-end
    operations in a major contingency response, we may not be able
    to do so with a level of training and for all of our units and
    along the timelines that would minimize the costs in damaged
    equipment and in casualties.
        These challenges in balancing provide context for the
    message today. Your Marine Corps remains ready to answer the
    Nation's call, but with no margin for error on multiple
    missions in which failure is not an option. To win in today's
    world, we must move quickly, move decisively, and move with
    overwhelming force.
        I thank each of you for your faithfulness to our Nation and
    for your continued bipartisan support of the Department and all
    of the services.
        I request that my written testimony be accepted for the
    record.
        I thank you for the opportunity to appear before you today,
    and I look forward to your questions.
        [The prepared statement of General Paxton follows:]

               Prepared Statement by General John M. Paxton, Jr.
        On December 15, 2012 General Paxton assumed the duties of the
    Assistant Commandant of the Marine Corps. Prior to his current
    assignment he served as commander, United States Marine Corps Forces
    Command, the commander, United States Marine Corps Forces, Europe and
    the Commanding General, Fleet Marine Force, Atlantic. He has served as
    the Commanding General, II Marine Expeditionary Force, and commander,
    United States Marine Forces Africa; the Director for Operations, J-3,
    The Joint Staff; and as the Chief of Staff for Multi-National Force
    Iraq in Baghdad. Additional General Officer assignments include
    Commanding General, 1st Marine Division, Commanding General, Marine
    Corps Recruit Depot/Western Recruiting Region, and Assistant Deputy
    Commandant of the Marine Corps, Programs and Resources (Director
    Programs).
        General Paxton graduated from Cornell University in Ithaca, New
    York with Bachelor of Science and Master of Civil Engineering degrees.
    He was commissioned into the Marine Corps in 1974 through Officer
    Candidate School. A career marine infantryman, the general has
    commanded marines at every level from platoon through division and has
    served and commanded in all three Active Marine Divisions (1st Bn, 3d
    Mar; 2nd Bn, 4th Mar; 3rd Bn, 5th; 1st Bn, 8th Mar; 1st Mar; 1st Mar
    Div). General Paxton has also served as an operations, plans and
    training (G3-S3) officer within Fleet Marine Force units at the
    battalion, regiment, division and Marine Expeditionary Force levels.
        In addition to service in Iraq, General Paxton has operational
    tours supporting stability efforts in the Bosnian conflict with Landing
    Force Sixth Fleet (LF6F) and in Mogadishu, Somalia as United Nations
    Quick Reaction Force (QRF), both while commanding Battalion Landing
    Team 1/8. Other staff and joint assignments include the Military
    Assistant to the Under Secretary of the Navy, Amphibious Operations
    Officer and Executive Officer Crisis Action Team (CAT) at UNC/CFC/USFK
    in Korea; and in Strategic Plans Branch, Deputy Commandant Plans,
    Policies and Operations, Headquarters U.S. Marine Corps. Supporting
    establishment commands include Company B, Marine Barracks 8th & I as a
    Captain and Marine Corps Recruiting Station New York, New York as a
    Major.
        In addition to The Basic School, General Paxton's professional
    education includes United States Marine Corps Amphibious Warfare School
    (non resident), United States Army Infantry Officer Advanced Course,
    and the United States Marine Corps Command and Staff College. He was a
    Federal Executive Fellow in Foreign Policy Studies at the Brookings
    Institution as a Lieutenant Colonel, as well as a Military Fellow at
    the Council on Foreign Relations as a Colonel. He has also been a
    Marine Corps Fellow at Massachusetts Institute of Technology's Seminar
    XXI.
                                  introduction
        Chairman Ayotte, Ranking Member Kaine, and distinguished members of
    the Senate Armed Services Subcommittee on Readiness: I appreciate the
    opportunity to testify on the current state of readiness in your Marine
    Corps and on our fiscal year 2017 budget request. We greatly appreciate
    the continued support of Congress and of this subcommittee in ensuring
    our ability to remain the nation's ready force.
        The Marine Corps has been our nation's crisis response force since
    our first landing in the Bahamas in March 1776. Two hundred and forty
    years ago this month the marines led by our First Commandant, Captain
    Samuel Nichols, seized weapons and gunpowder for George Washington's
    Continental Army. Since that day the Marine Corps has been dedicated to
    being our country's expeditionary force in readiness, chartered by the
    82nd Congress to be the most ready force when the nation is least
    ready. I thank this Committee and the 114th Congress for their
    appreciation of that vital role, which you reaffirmed in the most
    recent National Defense Authorization Act (NDAA).
                            your marine corps today
        2015 was a demanding year, much like any other for your Marine
    Corps. Our expeditionary forces continue to be in demand and heavily
    employed in the face of an increasingly challenging global environment.
    Your marines executed approximately 100 operations, 20 of them
    amphibious, 140 security cooperation activities with our partners and
    allies, and 160 major exercises. In partnership with the State
    Department, we employed marines at 174 embassies and consulates in 146
    countries, with many posts permanently increased in size to contend
    with increased threats. Our Marine Security Augmentation Units (MSAUs)
    deployed 33 times from the United States for short-term reinforcement
    of posts under particular threat. We remain grateful for your support
    of our 61 year old mission sets in support of the Department of State
    as demonstrated by your 2013 NDAA.
        Our 22,500 marines west of the International Date Line continued to
    play an important role in maintaining stability in East Asia, working
    closely with America's treaty allies from Japan and the Republic of
    Korea in the north to Darwin, Australia in the south and numerous other
    allies, partners, and locations in between. III Marine Expeditionary
    Force (MEF) once again demonstrated why they are the force of choice
    for crisis response in Pacific Command. marines from III MEF based in
    Okinawa and mainland Japan moved directly from a training exercise in
    the Philippines into a disaster response mission in Nepal. Once there
    they evacuated 69 casualties, flew 376 sorties totaling 1300 hours in
    high mountains, and provided 1070 tons of emergency relief supplies.
    Six marines gave their lives in support of that relief operation. The
    Bonhomme Richard Amphibious Ready Group (ARG) and the 31st Marine
    Expeditionary Unit (MEU), one of the seven MEUs that operate at sea in
    support of all combatant commanders, also provided humanitarian
    assistance after a typhoon struck the Commonwealth of the Northern
    Mariana Islands. The ARG/MEUs in the Middle East supported our embassy
    in Yemen, enabled United States special operations forces, and
    conducted other training missions.
        Geographic combatant commander (GCC or COCOM) operational
    requirements also continue to be quickly and capably met by land-based
    Special Purpose Marine Air-Ground Task Forces (SPMAGTFs). The unit
    assigned to Africa Command supported the reopening of our embassy in
    the Central African Republic, provided security at an operating
    location in Cameroon, conducted high risk site surveys for numerous
    diplomatic posts, and provided incident response forces from multiple
    locations. We added a new combined arms capability to the Black Sea
    Rotational Force (BSRF), supporting our nation's commitment to security
    and stability in Eastern Europe. In Southern Command, a tailored unit
    assisted with the reconstruction of a runway in Honduras and conducted
    security cooperation in three other countries. Finally, in Central
    Command (CENTCOM) our SPMAGTF complemented our MEUs and Special
    Operations Force efforts across the region by reinforcing our embassy
    in Baghdad. They also reinforced and in February and March assisted
    with the evacuation of our diplomatic facilities in Yemen. Additionally
    they conducted training in Jordan, and contributed security forces,
    quick reaction forces, train, advise, and assist teams, tactical
    recovery of aircraft and personnel (TRAP) support, and other
    capabilities to Operation Inherent Resolve (OIR).
        Seven hundred and fifty marines established and are still operating
    training sites at Al Asad and Al Taqaddam Air Bases in Iraq. From there
    they have been training and enabling the progress of Iraqi forces as
    they combat ISIS, including their recent support to a successful Iraqi
    Security Forces (ISF) counterattack at Ramadi. Marine aviation, working
    from the land base and the sea base, flew over 1,275 sorties in the
    CENTCOM theater, conducting 325 kinetic strikes and providing personnel
    recovery assets for that air campaign. In Afghanistan, more than 100
    marines continue to operate with the ISAF staff and as enablers for
    forces from the Republic of Georgia. While our large-scale commitments
    in Iraq and Afghanistan have diminished, today many marines still
    remain in harm's way, heavily engaged in the Middle East and around the
    globe to do our nation's bidding.
                  your marine corps from today into the future
        As we continue to organize for, train for, and execute our
    missions, we are concentrating our near term efforts in five
    interrelated areas that are vital to the Marine Corps' future success.
    Our Commandant, General Robert Neller, has directed that we focus on
    five key areas: People, Readiness, Training, Naval Integration, and
    Modernization. The three major themes that run throughout his guidance
    are maintaining and improving the high quality people who make up
    today's Marine Corps; decentralizing training and preparation for war
    while adhering to Maneuver Warfare principles in the conduct of
    training and operations; and modernizing the force, especially through
    leveraging new and evolving technologies.
        Readiness, our focus here today, cannot be considered in isolation
    from the other areas, which in turn help comprise the five historic
    pillars that are the foundation of our institutional readiness and
    responsiveness. First, unit readiness is our most immediate concern. We
    must guarantee our ability to execute the mission when called. Second,
    we must have the ability to deploy, aggregate, and command and control
    our expeditionary capabilities to meet the combatant commanders'
    requirements. The third, strongest, and most vital pillar of our
    readiness remains our marines, the product of a time tested
    transformation process at our Recruit Training Depots. Fourth, those
    marines and units rely on our infrastructure sustainment: our bases,
    stations, and installations are our launch and recovery platforms and
    must remain up to that key task. Fifth and finally, we must
    continuously push forward with equipment modernization, balancing our
    current and future warfighting needs.
        These five pillars represent the operational and foundational
    components of readiness across the Marine Corps. We know we are ready
    when our leaders confirm that their units are well trained, well led at
    all levels, properly equipped, and can respond quickly to the
    unforeseen. Our nation's leaders may call on us for that response
    today, next week or next year, but we must be ready in any case. In the
    current fiscal environment we have been struggling to maintain that
    balance between current readiness and projected future readiness. Our
    5.6 percent reduction in Operations and Maintenance funding from fiscal
    year 2015 to fiscal year 2016 makes that near term struggle even more
    difficult.
        While we remain grateful for the balanced budget agreement (BBA)
    and overseas contingency operations (OCO) dollars, we also continue to
    need a stable and predictable fiscal planning horizon. As I stated last
    year the possibility of Budget Control Act (BCA) implementation
    continues to loom over us all. It threatens our planning and readiness.
    While all of our deployed forces have met or exceeded our readiness
    standards for their assigned missions, as resources have already flat-
    lined or diminished, it has been at the expense of our non-deployed
    forces, and investments in other areas such as sustainment and
    modernization. As the Commandant wrote in his posture statement, today
    the Marine Corps is no longer in a position to generate current
    readiness and reset our equipment while sustaining our facilities and
    modernizing to ensure our future readiness. In order to stay ready and
    to ``fight tonight'' under current budgetary outlays and constraints,
    we are continuing to mortgage our future readiness.
                                 unit readiness
        We will ensure that an aviation squadron embarks on amphibious
    warships for a MEU deployment or on a Unit Deployment Program (UDP)
    rotation to an expeditionary base in the Pacific with its full
    complement of trained personnel and ready aircraft. They must also have
    a complete block of vital spare parts, which have taken on even greater
    importance as we work to reset aircraft fleets flown hard over fourteen
    years of conflict. In doing so that squadron may leave its sister
    squadrons deficient in ready aircraft and parts as they attempt to
    train for their own upcoming deployments. Those deficiencies then cut
    into the number of Ready Basic Aircraft (RBA) available to train. This
    in turn reduces flying hours for the squadron's pilots, making it more
    difficult for them to maintain or achieve their own necessary
    qualifications (eg. overall hours, flight leadership qualifications,
    night flying proficiency, shipboard landing qualifications). The same
    dynamic is true in other forms for some of our other units--the
    communications and engineering battalions that send their best
    equipment and operators out to support our MEUs and SPMAGTFs may lack
    the assets to support elements remaining at home station, inhibiting
    their ability to train for future deployments and be ready to execute
    OPLANs or support crisis response.
        That same flying squadron struggling to prepare for its next
    deployment, that communications or engineering battalion with key
    personnel and equipment already forward, are all a part of our
    ``bench''--our ready force for any crisis or contingency that exceeds
    our forward deployed capacity. Some enabling units, primarily those
    located in our Marine Expeditionary Force (MEF) headquarters formations
    that provide functions such as intelligence and communications, are
    deploying elements in support of sustained missions that were not
    anticipated by past planning assumptions. The absence of those
    elements, and the need to reset those elements following their
    deployments, degrades the readiness of the parent unit at home station.
    If the MEF were required to respond to a major crisis, they would
    require augmentation of personnel and equipment to alleviate those
    shortfalls. In order to retain our home station crisis response
    capability as well as our surge capabilities for operational plans
    (OPLANs), our rotational units must be able to quickly regain and
    sustain their own readiness following brief post-deployment
    degradations as old personnel depart, new personnel report, and
    equipment is reset. Under our current resource levels we are accepting
    prolonged readiness risks and focusing the training of some units to
    their more limited rotational mission sets vice full spectrum
    operations.
        When our resources fail to keep pace with operational requirements
    it further exacerbates these readiness problems. In the event of a
    crisis, these degraded units could either be called upon to deploy
    immediately at increased risk to the force and the mission, or require
    additional time to prepare thus incurring increased risk to mission by
    surrendering the initiative to our adversaries. By degrading the
    readiness of these bench forces to support those forward deployed, we
    are forced to accept increased risk in our ability to respond to
    further contingencies, our ability to assure we are the most ready when
    the nation is least ready. This does not mean we will not be able to
    respond to the call of the nation's leadership. It does mean that
    executing our defense strategy or responding to an emergent crisis may
    require more time, more risk, and incur greater costs and casualties.
                         demand and capacity to respond
        After a deliberate Marine Corps Quadrennial Defense Review study in
    2014, the study identified 186,800 as the optimal force size to address
    the forecast demands foreseen at that time. World events continue to
    challenge the assumptions behind that forecast, both in terms of the
    world situation and capability requirements such as cyber and special
    operations, and we are reassessing our projected future requirements.
    As shown by our operations in 2015, your Marine Corps continues to be
    in high demand from our regional COCOMs. With our stabilization at an
    end strength of 182,000 we will continue to satisfy many but not all of
    those demands. That demand signal has not substantially abated due to
    the emergence of threats in new forms, gradually increasing the strain
    on our forces.
        Along with adequate resourcing, our forces require time to conduct
    training and maintain their equipment between deployments. We use the
    term ``deployment to dwell'' (D2D) to capture the ratio of time marines
    and units spend deployed as opposed to resetting for their subsequent
    deployment. Our ideal D2D ratio is 1:3, which means a deployment of 7
    months is followed by 21 months of time at home station. That home
    station time is required for the unit to conduct personnel turnover,
    equipment reset and maintenance, and complete a comprehensive
    individual, collective, and unit training program across all their
    mission essential tasks (METs) prior to deploying again. Today this
    timeline is challenged by the increased maintenance requirements of
    aging equipment, shortages in the availability of ships with which to
    conduct amphibious training, ensuring personnel fills are in place, and
    other factors to include school seats, training range availability and
    even weather.
        Those challenges are compounded by the demands on today's force,
    which have many of our units and capabilities deploying with a 1:2 D2D
    ratio, which translates to one third less home station training time
    than we would prefer. In several fields, we are currently operating in
    excess of a 1:2 ratio for entire units or individuals with critical
    skills. For example, our infantry regimental headquarters elements are
    currently providing command and control for our SPMAGTFs in Africa and
    Central Command, which is limiting their ability to train to other core
    METs in major conventional operations. While we may be able to develop
    internal solutions to partially mitigate that concern, there are other
    challenges that belie simple solutions. Whereas a few years ago we were
    focused on our explosive ordnance disposal, engineering, and unmanned
    aerial vehicle units, today our critical ground force concerns are for
    our communications, intelligence, and signals intelligence battalions.
    All of our intelligence and communications battalions and one of our
    signals intelligence battalions would be unable to execute their full
    wartime mission requirements if called upon today. While other
    supporting enablers have scaled down their deployments as the overall
    size of our deployed units decreased, those three areas in particular
    are facing similar requirements as in the past in support of our
    forward deployed crisis response forces, along with increased demands
    for ``reach back'' support that further inhibits their abilities to
    train and reset while at home station. Those units require specialized
    equipment and highly skilled, highly trained individuals, making them
    difficult to quickly scale up.
        Our aviation community also has elements being stressed by a tempo
    in excess of a 1:2 D2D ratio including all of our fixed wing and
    tiltrotor aircraft, while our attack helicopters are being
    recapitalized and heavy lift helicopters reset as they cope with
    shortfalls in ready basic aircraft (RBA). Approximately 80 percent of
    our aviation units lack the minimum number of RBA for training, and we
    are also short ready aircraft for potential wartime requirements. We
    are working hard with the Office of the Chief of Naval Operations
    (OPNAV), the Department of the Navy, and the Office of the Secretary of
    Defense to find solutions to the RBA issue. Our tactical fighter and
    attack squadrons (TACAIR), F/A-18 A-D Hornets and AV-8B Harriers, are
    suffering from shortages in aircraft availability due to increased wear
    on aging aircraft and modernization delays. The average age of our
    TACAIR fleet is over 22 years, over two times the average age of the
    corresponding Navy TACAIR fleet. The impact of reduced funding levels
    on our depot throughput and the 2013 furloughs of highly skilled
    artisans resonates today and will continue to resonate into the future.
    We have increased depot throughput by 44 percent in fiscal year 2015
    compared to 2014, returning to pre-sequestration levels. We anticipate
    continuing to increase depot productivity, but will not fully recover
    our F/A-18 A-D model backlog before 2019. We have temporarily reduced
    the aircraft requirement for our F-18 squadrons from 12 to 10 to allow
    home station squadrons greater training opportunities. For the same
    reasons, we have temporarily reduced our CH-53E squadrons from 16 to 12
    aircraft and Harrier squadrons from 16 to 14. We are essentially
    increasing risk in one area (forward today in support of COCOMs) to
    mitigate risk in another (allow home station training for future
    readiness).
        Our tiltrotor MV-22 Ospreys, deployed in conjunction with KC-130J
    aerial refueling aircraft, have provided previously unthinkable reach
    and flexibility to our combatant commanders. Deployment demands have
    also brought both communities to D2D ratios in excess of 1:2, which is
    unsustainable in the long term. This is compounded as we continue to
    field both aircraft. In our Global Force Management allocation proposal
    for fiscal year 2017, we will reduce the number of those aircraft
    assigned to two SPMAGTFs in order to move these communities closer to a
    sustainable path. Our combatant commanders can mitigate this reduction
    to some degree with judicious use of similar assets from our MEUs when
    available, but there will be a loss in capacity forward. As we continue
    to contend with constant or increasing demand, every reduction in
    resources will force further difficult decisions by COCOMs and sourcing
    MEF alike.
                                   personnel
        The success of our Marine Corps, the center of our readiness, and
    our ability to respond to the requests of the combatant commanders and
    demands of our nation's leaders rests on the high quality, character,
    and capabilities of our individual marines. Those marines are the
    product of a time-tested yet continuously assessed process of
    recruiting, transformation at our Recruit Depots, and subsequent
    military occupational specialty training that provides our units with
    the trained marines they need to prepare for their collective missions.
    Since the establishment of the All-Volunteer Force over 40 years ago
    through the millennial generation of today, we have successfully
    recruited and retained the high caliber American men and women we need
    to operate effectively on today's battlefields. The steadily increasing
    quality of our recruits is testimony to the solid foundation of our
    recruiting system. The continual success of our tactical units on the
    battlefield over the past 14 years validates our transformation and
    training processes.
        Despite our continued successes, we cannot take future success in
    these areas for granted and must continue to seek ways to maintain and
    improve the high quality people who make up today's Marine Corps. Some
    of our most stressed career fields with the longest training timelines,
    including aviators, intelligence, communications, and cyber personnel
    are also potentially in high demand in the civilian sector. We most
    closely track our ability to retain our highly qualified marines in
    these areas. Our drawdown from the congressionally approved temporary
    increase in end strength to 202,000 in support of Operations Iraqi
    Freedom (OIF) and Enduring Freedom (OEF) to our current force of
    184,000 resulted in increased competition for retention, but that
    drawdown will reach its conclusion at 182,000 marines this year. We are
    now re-emphasizing and re-energizing our leadership's attention on
    retention to ensure that we continue to retain the requisite numbers of
    the very best marines capable of fulfilling our leadership and
    operational needs.
        We also continue to be challenged to ensure we have the correct
    small unit leaders with the right grade, experience, technical skills,
    and leadership qualifications associated with their billets. As I
    stated last year, our inventory and assignment policies of Non-
    Commissioned Officers (NCOs) and Staff Non-Commissioned Officers
    (SNCOs) has not been meeting our force structure requirements. Our
    efforts to correctly draw down end-strength have included right-sizing
    our NCO ranks to provide our marines the small unit leadership they
    deserve and which our Corps needs. Concurrent with that right-sizing,
    we have implemented a Squad Leader Development Program (SLDP) in the
    infantry, our largest occupational field, to continue to improve the
    tactical proficiency, the technical skills, and the leadership
    qualifications of those NCOs. We are studying ways to broaden that
    program into other career fields, including a deliberate effort to
    identify and map all of our critical enlisted leader billets. We have
    also identified approximately 500 non-structured billets for
    elimination, allowing us to return some experienced Marines to
    assignments where their leadership will have a greater impact. We will
    execute these programs in tandem with our continuing efforts to improve
    the personnel stability and cohesion in our non-deployed units, which
    our current operating tempo renders difficult. Our goal continues to be
    ensuring that all units have the right personnel, leadership, and
    cohesion in place at the right time to conduct the collective and unit
    training they need to succeed in the face of any mission and to
    overcome any challenge.
        We are also monitoring the implementation of two significant
    personnel reforms for still undetermined impacts and potential
    challenges to our personnel readiness. We are already moving ahead with
    the Secretary of Defense's order of 3 Dec 2015 to implement full
    integration of all qualified Marines, regardless of gender, into all
    military occupational specialties (MOSs) and units. Over the past three
    years we have dedicated significant resources to preparing for the
    implementation of this order, including our Ground Combat Element
    Integrated Task Force (GCE-ITF) research, training female volunteers at
    the entry level military occupational specialty (MOS) producing schools
    for the now open fields, and opening other previously restricted MOSs
    and units. These lines of effort (LOEs) have provided us with the data
    we needed to codify operationally relevant, occupationally specific
    standards that were previously informal, unclear, or outdated. This
    will help improve the overall readiness of all of our forces going
    forward. We have already awarded the appropriate Additional MOSs (AMOS)
    to all of the exceptional volunteers from our research efforts, and
    encouraged them to consider applying to move into those combat arms
    fields as their primary MOS (PMOS). We currently have female officers
    training in the Field Artillery Officer Basic Course for service in
    that community, and our Recruiting Command is contacting all of the
    women in our Delayed Entry Program pool to inform them of their
    expanded opportunities. As we move forward with our Marine Corps
    Integration Implementation Plan (MCIIP), we will closely monitor the
    process and progress to determine the impact on first, our combat
    effectiveness; second, on the health and welfare of our individual
    Marines; and third, on our ability to manage and best utilize the
    talents of all the Marines in our force. These are the three lenses
    through which we have assessed all of our efforts and recommendations
    over the past 2-3 years. I continue to have concerns in all three
    areas, but am confident that our assessment and subsequent adjustments
    during implementation will help us find the best way forward for our
    Marines, the Marine Corps, and the nation as we execute these changes.
        The Department of Defense is also in the midst of implementing,
    preparing for, or studying multiple other personnel reforms that may
    have significant but as yet undetermined impacts on our ability to
    afford, recruit, and retain the highest quality force. Many of these
    are outlined in the Force of the Future Initiative (FotFI). The
    Department's FotFI touches on nearly all aspects of military and
    civilian personnel systems. In many cases the changes driven by this
    initiative are welcome, often codifying what has been existing service
    practices. In select other cases we continue to advocate for service
    flexibility from any overly prescriptive policies or targets which may
    dilute the authorities and flexibility the Service Chiefs need to
    execute their title 10 responsibilities and in particular reduce our
    availability of ready and trained personnel. We are preparing to
    educate our current force on the retirement program changes enacted
    into law by Congress last year and assess the long term consequences of
    those changes both fiscally and on our personnel. Ideally those changes
    will be part of a wider program of reforms including compensation,
    healthcare, and retirement which collectively ensure we have an
    adequate, comprehensive, and attractive plan for our force. Finally,
    the Goldwater-Nichols examination being undertaken by the Congress and
    the Department includes a look at our joint training, education,
    assignment, and availability of our mid-grade and senior officers. We
    must make haste slowly in all these areas to ensure that our attempts
    to continually improve upon our current, although sometimes imperfect
    system do not disrupt a system that has in fact been exceptionally
    successful since 1986 at improving jointness, integration, and
    warfighting capability including over fourteen years of continuous
    combat.
                           infrastructure sustainment
        Our installations and infrastructure are the platforms upon which
    and from which our Marines and units live, train, launch, and recover.
    They are the platforms that generate our readiness. The Marine Corps'
    installations provide the capability and capacity we need to support
    the force. This includes our two depot maintenance facilities, which
    provide responsive and scalable depot maintenance support. Both depot
    sites, which were right-sized in 2014, have been vital to our ongoing
    equipment reset activities based on our past force and equipment
    reductions in Iraq and Afghanistan. To date the Marine Corps has reset
    78 percent of its ground equipment with 50 percent returned to our
    operating forces. We anticipate the depot sites will continue to play
    vital roles for the Marine Corps even after our expected completion of
    our current reset efforts in 2019. As we are resetting, we are also
    conducting a Corps-wide equipment review to right-size and reposition
    our equipment sets for today's environment as well as future
    challenges. This includes careful examination of items, such as
    critical communications equipment, that are having the most significant
    impacts on our readiness. We have already identified several critical
    items and components and have requests to address them in our fiscal
    year 2017 budget.
        The Marine Corps has infrastructure and facilities worldwide that
    train, house, and provide quality of life for our Marines and their
    families. These facilities must be appropriately maintained to prevent
    degradation of their ability to support our force and its readiness. We
    are executing our Facility Sustainment, Restoration, and Modernization
    (FSRM) initiative, the single most important investment in facilities
    readiness to support training, operations, and quality of life. We are
    accepting risk by programming at 74 percent of the funding level based
    on the Office of the Secretary of Defense Facilities Sustainment Model.
    We are focused on meeting the essential habitability, safety, and
    quality of life requirements while deferring all other activities, to
    include the demolition of outdated facilities that are no longer needed
    but continue to incur safety driven maintenance costs. Our fiscal year
    2017 military construction (MILCON) funding proposal decreases by $330
    million from fiscal year 2016 enacted levels. This fiscal year 2017
    program enables continued progress towards our long term re-alignment
    in the Pacific, including projects necessary to introducing vital new
    warfighting capabilities into the region such as the F-35B. We will
    require future construction funding increases as some of these projects
    mature, such as on Guam, and to activate additional combat staging
    locations (CSLs) from which to support forward deployed forces. In
    addition to these future requirements, the reductions to military
    construction of the past two years and continuing shortfalls in
    sustainment funding put us at risk of reversing hard-earned gains in
    our infrastructure status (with thanks to Congress for their support of
    our MILCON for the past 5-10 years) as our new construction most likely
    ages prematurely for lack of maintenance. Left unchecked, this
    degradation of our infrastructure can be expected to have negative
    long-term impacts not only on quality of life, but also on our support
    to training, operations, logistics, and ultimately readiness.
                                 modernization
        We are continuing to press modernization in the most essential
    areas to ensure the Marine Corps remains ready and relevant in the face
    of more capable future enemies. We must balance the cost of those
    efforts against our current readiness. Our first operational Joint
    Strike Fighter (JSF) Squadron, VMFA 121, declared its initial operating
    capability (IOC) in 2015, equipped with state of the art technology in
    our F-35Bs. After the second squadron becomes operational in 2016, VMFA
    121 will relocate to Iwakuni, Japan in fiscal year 2017. From there
    they will operate with the U.S. Air Force and our regional allies
    ashore and at sea with our Navy partners. While we are still working to
    achieve the full operating capabilities (FOC) of these aircraft, even
    at their IOC status our F-35B squadrons are prepared to conduct combat
    missions and are much more capable than the 3rd and 4th generation
    aircraft they are replacing. The F-35B will have a transformational
    impact on Marine Corps doctrine, providing 5th generation capabilities
    to support sea control operations (SCO) with the Navy and enable joint
    forcible entry operations (JFEO) by the MAGTF even in the most
    contested environments. We look forward to the stand-up of our first F-
    35C squadron, which will further enhance the capabilities of our Navy-
    Marine Corps team and our tactical aviation integration (TAI) plan.
        Our other major aviation modernization program is the CH-53K Heavy
    Lift Replacement, which will be critical to maintaining the battlefield
    mobility of our force, with nearly triple the lift ability of the
    aircraft it is replacing. We anticipate our first detachment achieving
    IOC in fiscal year 2019 and the full 200 aircraft delivery being
    complete by 2029. It will be complemented within our Ground Combat
    Tactical Vehicle Strategy (GCTVS) by the fielding of 5,500 Joint Light
    Tactical Vehicles (JLTV) with IOC in fiscal year 2019 and FOC by fiscal
    year 2022. We will bridge the sea and land with the Amphibious Combat
    Vehicle (ACV) 1.1, using this year to test sixteen each of two down
    selected models against each other to ensure we receive the best
    possible capability even as we look forward to developing the
    requirements for ACV 1.2. The development of ACV 1.2 is essential to
    the nationally unique ship to shore power projection capability that
    your Marine Corps provides. We are also continuing with numerous other
    fiscally smaller programs that are no less vital to our warfighting
    capability such as the Ground/Air Task Oriented Radar (G/ATOR) and
    command and control systems such as Networking on the Move (NotM).
    Programs such as these will help us continue to improve our battlefield
    awareness and the dissemination of information to small and dispersed
    tactical units to maximize their effectiveness. Given evolving cyber
    threats, we also assess an as yet unidentified requirement to properly
    encrypt all these command and control systems, be they radio, radar,
    airborne, or ground mobile.
        We are balancing the cost of our modernization efforts in those
    essential areas against our current readiness by extending and
    refreshing some of our legacy systems. Even as we look to modernize by
    replacing the F/A-18, AV-8B, and CH-53E with the F-35B/C and CH-53K, we
    are also working to refresh our current aircraft fleets to recover and
    maintain readiness and capability during the transitions. We have
    already completed independent readiness reviews (IRR) of our AV-8B
    Harrier and CH-53E Sea Stallion fleets, are in the midst a review of
    our MV-22 Osprey fleet, and will next examine our AH-1Z Cobra/UH-1Y
    Huey squadrons and aircraft to ensure we restore and maximize the
    potential readiness of our entire aviation community. With our ground
    equipment, we are in the midst of a survivability upgrade (SU) to our
    existing Assault Amphibian Vehicles (AAVs) to maintain essential ship
    to shore power projection capability and capacity while we work to get
    the ACV right and fielded. We are accepting much greater risk with our
    Light Armored Vehicles (LAVs) now with an average age of 33 years, M1A1
    tanks with an average age of 26 years, and other critical warfighting
    assets at this time. While we judge these risks to be at acceptable
    levels today, they are yet more examples of the trade-offs we are
    required to make due to fiscal reductions that accompany operational
    demand increases. As we have stated before, there remains the potential
    for unacceptable increases in risk associated with any additional
    resource reductions or erroneous assumptions, operational or fiscal.
                       naval and joint force integration
        Amphibious warships and their embarked MAGTFs are the center pieces
    of the Navy and Marine Corps' time tested and proven forward presence,
    forcible-entry, and sea-basing capabilities in support of assurance,
    deterrence, and contingency operations. Although our Special Purpose
    Marine Air-Ground Task Forces (SPMAGTFs) have been making essential
    contributions to our COCOMs, their operations have been shore based due
    to the inadequate size of our amphibious fleet. This represents a
    compromise of our preferred amphibious basing, with its sovereign
    launch and recovery status, and of our rich heritage and strong
    partnership with the United States Navy. Although the SPMAGTFs have
    been sought after and very successful they are not always the optimal
    method of employment of our forces. They may require greater resource
    capacity to produce the same warfighting and power projection
    capabilities as we achieve operating from the sea.
        The availability of amphibious shipping remains paramount to
    readiness and responsiveness. The nation's amphibious warship
    requirement remains at a minimum of 38 ships to support a two Marine
    Expeditionary Brigade (MEB) assault echelon (AE). As the Commandant and
    Chief of Naval Operations have testified in past years, the number of
    vessels required to meet the steady-state demands of our combatant
    commanders exceeds 50 vessels. The current inventory of 30 vessels
    falls short of the requirement by both measures, and that shortfall is
    aggravated by recurrent maintenance challenges in the aging amphibious
    fleet. The current and enduring gap of amphibious warships to
    requirements inhibits ours and the Navy's ability to train to our full
    capabilities, inhibits our shared ability to respond to an emergent
    crisis, and increases the strain on our current readiness.
        The Marine Corps whole-heartedly supports the Navy's current build
    back to 34 L-class ships by fiscal year 2022, including the 12th LPD-17
    class vessel this Congress has provided, the LHA-8, and the 11 ship
    LX(R) program based on the LPD-17 hull form. The Marine Corps would
    obviously prefer to reach at least the minimum requirement of 38
    platforms as soon as feasible, but we understand the Navy's difficult
    task in balancing amphibious readiness with many other national
    requirements. We agree that 34 ships, with the appropriate level of
    availability and surge ability, is a compromise that continues to
    assume an acceptable level of risk for a brief period. This risk may be
    seriously exacerbated if the Department of the Navy (DON) continues to
    be obligated to fund the Ohio-class submarine replacement from within
    their already pressurized total obligation authority (TOA). We also
    support our continued DON effort to develop and experiment with
    alternative platforms including the newly designated ``E Class'' ships.
    The value of the Mobile Landing Platform, now designated the
    Expeditionary Mobile Base (ESB), as an afloat forward staging base
    (AFSB) is already clear. Our combatant commanders are demanding their
    employment as fast as they are being fielded. The creative use of these
    and other existing platforms, particularly on exercises and in
    experiments, will enhance our capacity for operations in lower threat
    environments. They may provide enabling support for the operation of
    our amphibious warships and landing force in contested scenarios. The
    modernization of our ship to shore connectors (SSCs) is equally vital
    to this effort, including the programmed replacement of the Landing
    Craft Air Cushioned (LCAC) and Landing Craft Utility (LCU) platforms.
    Both the LCAC and LCU successor programs should provide affordable
    replacements for those aging craft with incremental but much needed
    increases in capability. These investments combined with our
    modernization efforts such as the fielding of the F-35B will enable a
    greater contribution of the Marine Corps to our overall maritime
    operations, particularly for forcible entry.
        While retaining dominance in our traditional domains, the Navy and
    Marine Corps must also continue to move forward with integration into
    the total Joint Force as we enhance our capabilities across the entire
    and evolving five domain (5D) battlespace. We will begin by reinforcing
    our role as a naval expeditionary force that assures access for the
    Joint Force. While balancing our own resources, we must also ensure we
    remain ready to leverage and enable the capabilities of the Army, Navy,
    Air Force, and Special Operations Forces. This includes continuing to
    develop information warfare (IW) and command and control (C2)
    capabilities which are required to operate effectively against
    increasingly sophisticated adversaries. Our Marine Cyber Mission Teams
    (CMTs) and Cyber Protection Teams (CPTs) are already engaged in real
    world operations supporting COCOM missions and enabling the
    functionality of our networks in the face of persistent threats. Their
    expertise has been sought more than once to conduct defensive cyber
    operations in support of the Office of the Secretary of Defense and
    Joint Staff. By the end of fiscal year 2018, Marine Forces Cyber
    Command will have 13 Cyber Mission Force Teams with approximately 600
    marines, civilians, and contractors. As we continue to develop and
    assess our requirements in this area, we are challenged to balance them
    within our existing force structure and resourcing. We must ensure our
    networks are configured to provide world-wide access in garrison or
    forward, and are deployable, digitally interoperable, and able to
    support rapid advancements in technology and combat capabilities. As
    our adversaries and potential adversaries continue to make advances in
    the cyber domain, we must ensure Marine Corps Cyber Forces are ready to
    face and respond to those threats with cutting edge capabilities as
    part of U.S. Cyber Command. This may require new policies for
    programmatic flexibility in manning, training, and equipping as we
    contend with this rapidly changing technological environment.
                    concept development and experimentation
        As we prepare to combat our foes in these new domains and focus on
    building our maritime based operational capability, we will continue to
    expand upon a robust program of experimentation embedded within our
    training and exercise program to push innovation and validate new
    ideas. While we have been focused and operationally committed to the
    conflicts of the past decade, our enemies and competitors have been
    advancing their own capabilities--technically, tactically,
    organizationally, and operationally. In some cases they have developed
    new capabilities which now equal or exceed our own. Global instability
    has also increased in the past few years and the threats to our
    national interests have evolved. We are confident that the future fight
    may not be what we have experienced in the past, but will involve
    rapidly changing and evolving technologies, which will force us to be
    more agile, flexible, and adaptive. We must continue to push forward
    and explore new warfighting and operating concepts as we must be
    prepared for the future fight on the distributed and lethal
    battlefields of 2025. We must also therefore balance our investment and
    commitment to experimentation against our current readiness. This
    creates yet another area of potential risk.
        The force we need to succeed against the threats of 2025 will not
    be a mirror of today's Marine Corps. We expect those threats will
    require significant and yet unknown adjustments in manpower, training,
    and equipment. In order to develop the force to operate in new domains
    and across the electromagnetic spectrum, we may need to either grow or
    to rebalance our manpower to ensure we are gaining the capability and
    capacity we need in new areas while continuing to improve our existing
    edge. That force may also require command and control, reach back, and
    lift capabilities that exceed our current capacities. This summer
    during the Rim of the Pacific (RIMPAC) exercise, we will conduct an
    experiment employing the distributed operations (DO) concept, itself
    developed and refined through repeated experimentation, in an anti-
    access area denial (A2AD) environment. We will project a lethal
    conventional force integrating unmanned technologies from the sea base
    against objectives deep ashore, then sustain that force for continuous
    operations. That same unit will continue to experiment with its
    organization throughout its scheduled fiscal year 2017 deployment to
    the Western Pacific. The results gleaned from these and subsequent
    experiments will be vital as we shape the design of future force 2025
    to ensure we are prepared for the next generation of threats.
                                   conclusion
        On behalf of all of our marines, sailors, and their families, I
    thank the Congress and this subcommittee for affording us the
    opportunity to discuss some of the key challenges faced by our Marine
    Corps today and providing us the support and resources to win on the
    battlefield of the future as well as of today. With your continued
    support, we will strive to carefully and correctly balance readiness
    with risk in today's force and the force of tomorrow, and to articulate
    what we require to guarantee our warfighting capability and capacity as
    we improve our balance across all five pillars of readiness today and
    into the future. We will continue to answer the nation's call to arms,
    meet the needs of the combatant commanders and national leaders who
    depend on us, and be prepared to respond to any crisis or contingency
    that may arise. Your Marine Corps will continue to do as the 82nd and
    114th Congress directed: ``to be the most ready when the nation is
    least ready.''

        Senator Ayotte. Thank you, General Paxton.
        I would now like to call on General Goldfein, the United
    States Air Force Vice Chief of Staff.
        Thank you.

      STATEMENT OF GENERAL DAVID L. GOLDFEIN, USAF, VICE CHIEF OF
                     STAFF, UNITED STATES AIR FORCE

        General Goldfein. Thank you, Chairman Ayotte, Ranking
    Member Kaine, and distinguished members of the subcommittee, on
    behalf of our Air Force Secretary and Chief of Staff. It's an
    honor to be with you today, and a privilege to be here with my
    fellow Vice Chiefs.
        I request my written statement be placed in the record.
        Just as you have heard from my colleagues, your airmen work
    side by side with their fellow soldiers, sailors, marines, and
    coastguardsmen to defend U.S. interests here in the Homeland
    and across the globe. As an example, it's still winter in
    Minot, North Dakota, Malmstrom, Montana, and F.E. Warren Base
    in Wyoming, and early this morning, a number of airmen drove
    the equivalent of Philadelphia to D.C., and now stand watch
    over the most destructive force on the planet as they provide
    strategic nuclear deterrence for our Nation and our allies. At
    the same time, airmen are providing top cover and precision
    fires for our joint and coalition teammates in Iraq, Syria,
    Afghanistan, Korea, Africa, and Europe, all while our Air
    National Guardsmen provide 24/7 defense of the Homeland in
    support of U.S. Northern Command. From moving critical supplies
    and people to every corner of the map to managing 12
    constellations in space to defending our critical cyber
    networks to executing lifesaving personnel recovery and Special
    Operations missions, I could not be prouder to represent the
    more than 660,000 Active Duty, Guard, Reserve, and civilian
    airmen who put the power in airpower.
        However, 25 years of continuous combat coupled with budget
    instability and lower-than-planned top-lines have made the Air
    Force one of the smallest, oldest, and least ready in our
    history. To put our relative size, age, and readiness in
    perspective, in 1991 we deployed 33 of our 134 combat-coded
    Active, Guard, and Reserve fighter squadrons in support of
    Operation Desert Storm. We were 946,000 airmen strong. On
    average, our aircraft were 17 years old, and 80 percent of the
    fighter force was ready for full-spectrum conflict. Today, we
    have just 55 Total Force fighter squadrons, and our Total Force
    is 30 percent smaller, at 660,000. The average age of our
    aircraft is 27 years, and less than 50 percent of our combat
    Air Force is ready for full-spectrum operations.
        Couple this significant readiness decline with a rising and
    more aggressive China, recent Russian actions in eastern Europe
    and Syria, continued Iranian malign influence, North Korean
    nuclear and space ambitions, and our ongoing fight to deliver a
    lasting defeat to ISIL, and you understand my concern with this
    dangerous trajectory.
        The fiscal year 2017 budget reflects our best effort to
    balance capability, capacity, and readiness under the top-line
    we received. We made difficult trades between readiness today
    and the critical investment required to modernize for the
    future against potential adversaries who continue to close the
    technological gap. Air Forces who don't modernize eventually
    fail. When the Air Force fails, the joint team fails. I look
    forward to discussing these trades and their impacts in today's
    hearing.
        Madam Chairman, decisive air, space, and cyberspace power
    is fundamental to American security, and it underpins joint
    force operations at every level. The 2017 President's Budget
    and the flexibility to execute the resources as we have
    recommended is an investment in the Air Force our Nation needs.
    America expects it, the combatant commanders require it, and,
    with your support, airmen will deliver it.
        On behalf of our Secretary and our Chief of Staff and our
    airmen who give our service life, thank you for your tireless
    and continued support. I look forward to your questions.
        [The prepared statement of General Goldfein follows:]

                Prepared Statement by General David L. Goldfein
                                  introduction
        Today's national security challenges come from a combination of
    strong states that are challenging world order, weak states that cannot
    preserve order, and poorly governed spaces that provide sanctuary to
    extremists who seek to destabilize the globe. The world needs a strong
    American Joint Force, and since our establishment in 1947, the Air
    Force remains an agile responder in times of crisis, contingency, and
    conflict. In fact, the Joint Force depends upon Air Force capabilities
    and requires Airpower at the beginning, the middle, and the end of
    every Joint operation.
        America's Air Force must be able to disrupt, degrade, or destroy
    any target in the world, quickly and precisely, with conventional or
    nuclear weapons, to deter and win our Nation's wars. Undoubtedly,
    decisive air, space, and cyberspace power--and the ability to command
    and control these forces--have become the oxygen the Joint Force
    breathes and are fundamental to American security and Joint operations.
        Whether in support of global counter-terror operations or near-peer
    deterrence, your Air Force remains constantly committed, as we have
    without respite for the past 25 years.
        However, 25 years of continuous combat operations and reductions to
    our Total Force coupled with budget instability and lower-than-planned
    funding levels have resulted in one of the smallest, oldest, and least
    ready forces across the fullspectrum of operations in our history. The
    Budget Control Act (BCA) further degraded our readiness, and there is
    simply no way to recover without time, money, and people. While the
    Bipartisan Budget Act of 2015 provides some space to recover readiness
    and continue modernization efforts, your Air Force needs permanent
    relief from BCA, consistent, flexible funding, modestly increased
    manpower, and time to recover readiness.
               impact of the budget control act and sequestration
        In 2013, sequestration abruptly delayed modernization and reduced
    both readiness and the size of the Total Force. Specifically,
    sequestration forced the grounding of one-third of our combat fighter
    squadrons for three months. It is important to understand the
    cumulative effect on readiness when the Air Force stops flying. We
    delay aircrew proficiency and progression, suspend aircraft
    maintenance, create months of maintenance backlog, and defer major
    depot inspections and overhauls on our aging fleet. Sequestration also
    postponed maintenance, repair, and upgrades on our ranges, which
    degraded high-end training for our combat forces. Furthermore, we
    canceled partnership-building exercises and could not support multiple
    Army combat unit certification missions. Half of non-combat joint
    airlift and air refueling requirements were unsupported. Further,
    sequestration halted investment in infrastructure repairs cancelling or
    delaying military construction and facility restoration and
    modernization projects across the Air Force.
        Even worse, we broke faith with our airmen. We furloughed
    approximately 180,000 civilian airmen, froze their pay, and released
    all temporary and term employees. Professional military education and
    development of our airmen stopped, some base facilities closed, and
    airmen and family services halted. Approximately 20,000 experienced
    airmen separated from the Air Force under force management programs and
    our accession targets were decreased to meet reduced end strength caps.
    Our airmen's trust, loyalty, and confidence, an essential aspect that
    underpins the effectiveness of our force, eroded during this time.
    Bottom line-when an Air Force does not fly, readiness atrophies across
    the enterprise with impacts that cannot be reversed in the time it took
    to lose it.
        The Air Force entered fiscal year 2014 in a government shutdown
    with fiscal planning focused on a second year of sequestration. We
    remain grateful for the modest, temporary relief from sequestration in
    2014 and 2015. This relief enabled the Air Force to fly to capacity,
    resume critical aircraft and facility maintenance, invest in our
    Nuclear Force Improvement Program, fund our training ranges, purchase
    munitions, and invest in the KC-46, F-35, and LRS-B. Despite this
    relief, we still made some very tough choices. We attempted to reduce
    force structure, carried risk in base infrastructure support and
    military construction, and sacrificed near-term readiness for future
    modernization.
        After submitting our fiscal year 2015 budget, our Secretary of
    Defense outlined five threats that factor into our National security
    calculus: China, Russia, Iran, North Korea, and the ongoing fight
    against global terrorism. As a result, the demand for Air Force
    capability and capacity increased. We made necessary adjustments to
    balance near-term readiness with future modernization in our fiscal
    year 2016 budget, but our readiness remains at a near all-time low due
    to continuous combat operations, reduced manpower, an aging fleet, and
    inconsistent funding. For the last two years, instead of rebuilding
    readiness for future, high-end conflicts, our airmen have responded to
    events across the globe, leading and in support of the Joint Force.
        Although we remain the world's greatest Air Force, a return to
    sequestration would exacerbate the problem and delay our goal to return
    to full-spectrum readiness.
                             state of the air force
        Today, the demand for Air Force capabilities continues to grow as
    airmen provide America with Global Vigilance, Global Reach, and Global
    Power. Airmen are engaged defending U.S. interests around the globe
    with approximately 200,000 airmen directly supporting combatant
    commander requirements from home station. Your Air Force has deployed
    20,000 airmen worldwide, and another 80,000 are permanently stationed
    at overseas bases. In this past year, more than 35,000 airmen protected
    our national interests and those of our Allies by ensuring a safe,
    secure, and reliable nuclear deterrent. We flew nearly 1.7 million
    flying hours, equal to 194 continuous years of flying. We delivered a
    staggering 1.2 billion pounds of fuel, 345,000 tons of cargo, and
    evacuated over 4,000 patients. We also conducted over 8,000 cyberspace
    operations and prevented network intrusions. American airmen performed
    nearly 20,000 Intelligence, Surveillance and Reconnaissance (ISR)
    missions around the world and enabled 25 space missions supporting
    national security objectives while simultaneously tracking over 23,000
    objects orbiting the earth. All this was accomplished with a force
    almost 33 percent smaller than in 1991.
        To put our reduced size in perspective, in 1991, during Operation
    Desert Storm, we deployed 33 fighter squadrons into our first conflict
    since Vietnam. At that time, we had 134 combat-coded fighter squadrons,
    946,000 Active Duty, guard, reserve, and civilian airmen, and 80
    percent of the fighter force was ready for fullspectrum operations.
    Today, we have just 55 combat-coded fighter squadrons, approximately
    660,000 Total Force Airmen, and less than 50 percent of our Air Force
    is ready for full-spectrum operations-a 30 percent reduction since
    Operation Desert Storm. While the extraordinary success of Operation
    Desert Storm shaped the world's perceptions of American Airpower, our
    near-peer adversaries responded by modernizing their forces with
    systems specifically designed to neutralize our strengths.
        As our Secretary of the Air Force and Chief of Staff highlighted,
    for the first time in a generation, adversaries are challenging
    America's freedom of maneuver in air, space, and cyberspace in
    contested regions and near our Allies' borders. The Air Force continues
    to lead the global response against ISIL in the Middle East while still
    heavily engaged in Afghanistan. A resurgent Russia now supports Assad
    in the skies over Syria and has announced their intent to modernize
    their nuclear forces. In addition, we watched North Korea conduct a
    space launch and an illegal nuclear test, and we see worrisome military
    activity in the South China Sea. We also have other growing threats in
    both space and cyberspace. Our adversaries are closing the capability
    gap in space and cyberspace while also fielding advanced air defenses
    and fifth-generation aircraft. Our strategic capability advantage over
    competitors is shrinking, and our ability to project strategic
    deterrence is being challenged.
        To meet the full requirements of our Defense Strategic Guidance and
    current operation plans, we require 80 percent of our combat squadrons
    to be full-spectrum ready. We define full-spectrum readiness as the
    right number of airmen, properly led, trained and equipped, to
    accomplish our Air Force mission in support of the Joint Force in both
    contested and uncontested environments.
        We measure full-spectrum readiness through our five levers of
    readiness: critical skills availability, weapons system sustainment,
    training resource availability, flying hour program, and operational
    tempo. If airmen are not ready for all possible scenarios, especially a
    high-end fight against a near-peer adversary, it could take longer to
    get to the fight; it could take longer to win; and it could cost more
    lives. To maintain the advantage the Air Force provides to the Joint
    Force, we need sufficient, predictable funding, increased manpower in
    critical skills areas, and improved deployto-dwell time. To achieve
    balance across our five levers of readiness, the following highlights
    our state of readiness and where Congressional support for this budget
    request is needed.
                  state of the air force--global nuclear power
        As we emphasized last year, the Air Force represents two-thirds of
    our Nation's nuclear triad, and the nuclear enterprise remains our
    number one priority. With both nuclear and conventional forces, the Air
    Force provides a range of options for America's leaders, but the
    effects of age are beginning to limit Air Force nuclear capabilities.
    While our nuclear forces remain safe, secure, and effective, this
    budget provides significant investment needed to ensure nuclear
    readiness and unrivaled deterrence for the 21st century. Today's
    bombers were built in the 1960s and are approximately 55 years old. On
    average our facilities are now approximately 40 years old, with many
    facility systems operating well past their 20-year designed life span.
    Currently, all of our weapons storage areas are operating with waivers
    and deviations from our high standards. Although these storage areas
    are uncompromised, safe and secure, in order to address the
    recommendations identified in our Nuclear Enterprise Reviews for
    facility and weapons sustainment, we require the resource levels
    requested in this budget.
        To ensure a reliable nuclear deterrent for the Joint Force, this
    budget request includes modernizing nuclear command and control,
    replacing some outdated and unsupportable components of Minuteman III
    ICBM equipment, while also making initial investments in the Ground
    Based-Strategic Deterrence Program. Our National Airborne Operations
    Centers provide critical, survivable Nuclear Command, Control, and
    Communications but they are 35 years old. We must recapitalize this
    fleet in order to maintain our Command and Control advantage in times
    of crisis or nuclear conflict. To support the Joint Force, we must
    ensure our mobile Command and Control systems are able to withstand
    attacks from space and cyberspace and are sufficiently resilient to
    function if prevention fails. Additionally, we reorganized our Nuclear
    Enterprise and established Air Force Global Strike Command as our Air
    Force lead to ensure continued, sustained, and secure Nuclear Command,
    Control and Communications. We managed to sustain Air Launched Cruise
    Missiles and Minuteman III platforms within our resources. We are
    developing the Long-Range Standoff weapon to provide the Joint Force
    with a survivable air-launched weapon capable of destroying otherwise
    inaccessible targets in any conflict zone. This budget request includes
    the resources to address those critical challenges.
               state of the air force--global conventional power
        Air Superiority is the critical prerequisite for every military
    operation to ensure freedom of action for the Joint Force and the
    Nation. Our F-22s are in high demand in the Central, Pacific, and
    European Commands. Our F-15Cs provide primary support for Homeland
    Defense and to both the European and Pacific theaters. These platforms
    secure the high ground and have prevented American ground forces from
    attack by enemy air strike since 1953. Today, our six F-22A squadrons
    are in high demand. Therefore, we are continuing last year's
    investments to modernize advanced air-to-air weaponry, requesting
    additional funding for sensor and tactical and seeking electronic
    warfare protection and modern sensor suites for our remaining F-15C
    fighters. To develop airmen properly trained to meet the combatant
    commanders' demand signals, we funded flying hours to their maximum
    executable level and are continuing to invest in full-spectrum combat
    exercises like Red Flag and Green Flag. We have properly resourced
    these readiness components in this year's budget and request
    Congressional support for these critical requirements.
        We also testified last year that weapons system sustainment is a
    key component of readiness. Weapons system sustainment costs continue
    to increase due to the complexity of new systems, the challenges of
    maintaining old systems, operations tempo, and increasing demand for
    maintenance personnel. We fly all of our aircraft to their full service
    life and beyond. The longer we extend the service life of our legacy
    aircraft, the more investment, preventive maintenance and manpower they
    require.
        This year's budget continues investment in modernizing and
    sustaining the three combat-coded B-1 squadrons with additional
    precision weapons, digital data links, and other improvements aimed to
    negate diminished manufacturing resources. Similar to last year, we
    will also invest in extending the B-1 service life to maintain this
    strategic capability against evolving threats. We are approaching our
    second service life extension on F-16s. Our F-15Cs and F-15Es, which
    are in high demand, are experiencing structural fatigue and require the
    sustained, consistent funding requested in this budget for repairs to
    remain effective.
        Since Operation Inherent Resolve in 2014, we have expended over
    28,000 munitions worth $1.2 billion, and continue to deplete our
    inventories in Iraq and Syria. Our Hellfire expenditures in Operations
    Inherent Resolve, Enduring Freedom, and Freedom's Sentinel increased
    nearly 500 percent since 2012, but procurement did not keep pace.
    Therefore, in this budget we will fund munitions to capacity to support
    current operations and start the process to replenish current
    inventories.
        Similar to last year, we're seeking support in this budget
    submission to increase our capacity to provide airmen with increased
    high-end training against realistic scenarios and threats. Regrettably,
    investments in aging critical infrastructure such as ranges, airfields,
    facilities, and even basic infrastructure like power and drainage
    systems, have been repeatedly delayed, and the problem was
    significantly exacerbated by sequestration. Every year that we delay
    these repairs affects operations and substantially increases
    improvement costs. Even with the world's most advanced technology, our
    airmen are at a disadvantage without conducting realistic combat
    training exercises involving the Joint Force, our Allies, and our
    partners. Red Flags, and other similar training exercises, built the
    foundation for our success in air campaigns during the past 25 years.
    We need your support for this budget request to continue investment in
    computer-aided live, virtual, and constructive training to provide
    opportunities to train against the world's most capable threats,
    provide routine training at lower costs, and achieve the full-spectrum
    readiness that is vital for our national defense and to safeguard U.S.
    interests abroad.
                    state of the air force--global vigilance
        Our global security environment drives an insatiable demand for
    integrated ISR. Today, the Air Force continues to sustain 60 Combat Air
    Patrols through crossdomain synchronization. With 74 percent of our ISR
    forces operating in direct support of combat operations, limited time
    remains for training and recuperation. The high demand impacts our
    ability to train and retain this critical skill set. Currently less
    than one third of our Rivet Joint linguists re-enlist, and our
    Intelligence career fields are critically manned.
        This critical reduction of experience, coupled with the insatiable
    demand for Collection Management, Targeting, Expeditionary Signals
    Intelligence, and Airborne ISR Operators drove heavy reliance on
    contract personnel. While contract personnel fill a just-in-time
    requirement--and perform admirably--this solution does little for the
    long-term health of the ISR Enterprise.
        To improve the quality of mission for our ISR community, the budget
    includes funds to create a dedicated launch and recovery MQ-1/9
    squadron, increase training, and restore two MQ-9 operations squadrons.
    Additionally, the budget funds training for enlisted operators to fly
    the RQ-4 Global Hawk and funds a basing study to provide options to
    eventually fly RPAs on a schedule more conducive to steady-state
    operations.
        Equally strained are the more than 7,000 airmen working in our
    Distributed Common Ground System. These airmen supported over 29,000
    ISR missions, analyzed more than 380,000 hours of full motion video and
    disseminated 2.6 million images to our warfighters in the last year.
    They have now operated at these surge levels for over a decade.
    Therefore, this budget continues to invest in our ISR Enterprise to
    provide globally integrated ISR that supports multi-domain, actionable
    intelligence for the Joint Force.
        As we testified last year, space and cyberspace threats continue to
    grow. In space, our Global Positioning System provides the world's gold
    standard, supporting citizens across the globe every day. Fortunately,
    our 40 existing Global Positioning System satellites remain healthy,
    but they are exceeding projected service life. To maintain this
    capability and to build readiness for any potential conflict, we are
    requesting support to improve anti-jamming and secure access of
    military Global Positioning Systems. We also continue to partner with
    the Joint Force on the Space Security and Defense Program and the Joint
    Interagency Combined Space Operations Center to develop options for a
    more resilient National Security Space Enterprise.
        Our cyberspace capabilities are essential to every Airman,
    platform, and mission in our portfolio. Therefore this budget request
    makes strategic investments in our cyberspace capabilities. For
    instance many of our weapons systems were developed prior to the
    emergence of the rapidly evolving cyber threats existing today. A cyber
    intrusion could significantly impact our ability to project vigilance,
    reach, and power anytime, anywhere. To improve offensive and defensive
    cyber readiness, we plan to grow our 26 Cyber Force Mission Teams to 39
    fully operational teams by fiscal year 2019 and continue our
    investments in the Joint Information Environment.
        Turning to command and control, this is the glue that enables Joint
    Force operations and provides the essential link between our Joint
    Force Air component commander and all Joint Forces working for
    combatant commanders. The ability to understand changing battlefield
    conditions and command friendly forces is central to an effective,
    agile combat force especially as we face more threats that are
    transregional and span from traditional state adversaries to non-state
    unconventional forces. At any of our Air Operations Centers, located in
    every combatant commander's area of responsibility, you will find
    airmen providing the backbone and expertise to integrate effects from
    every warfighting domain. The budget also includes funds to upgrade
    legacy equipment to open architectures to ensure critical security
    improvements. Our E-8 Joint Surveillance Target Attack Radar System
    (JSTARS) is 47 years old and will begin to reach the end of its service
    life next year. The E-3 Airborne Warning and Control System (AWACS) is
    35 years old and requires multiple upgrades to keep this capability
    ahead of emerging threats. We need your support for this budget to fund
    mature communications, sensors, and Battle Management Command and
    Control system technologies to recapitalize our JSTARS and AWACS.
                      state of the air force--global reach
        Airmen perform the Rapid Global Mobility mission every day in areas
    of peace and conflict, and provide our Nation the ability to move the
    Joint Force rapidly to any point on the globe. Flexibility allows
    airmen to deliver bombs and bullets to the Joint Force in Iraq and
    Afghanistan, as well as blankets and bundles of life-saving relief
    supplies. Following last year's devastating earthquake in Nepal, C-130s
    and C-17s, refueled by KC-135s, accomplished over 150 missions
    delivering more than 800 tons of cargo. This core mission was also
    exemplified in March 2011 when we executed more than 300 airlift and
    combat sorties in a single day. During that time, every combatant
    commander had a Priority 1 mission, and the Air Force accomplished each
    one without fail. We simultaneously delivered humanitarian relief to
    tsunamiravaged Japanese cities, established and enforced a no-fly zone
    over Libya with Operations Odyssey Dawn and Unified Protector, surged
    forces in Afghanistan for Operation Enduring Freedom, and supported
    Presidential airlift.
        Today, airframes have aged significantly and some of the same
    tankers refueling aircraft over Iraq and Syria were present over
    Vietnam. In fact, the Air Force's oldest flying KC-135, assigned to the
    190th Air Refueling Wing at Forbes Field, Kansas, was refueling
    aircraft when some Vietnam-era pilots were still in elementary school.
    This year's investments begin to recapitalize refueling capabilities
    with the KC-46A and are essential to combat operations in anti-access/
    area denial environments. It also accelerates the C-130 Avionics
    Modernization Program and funds modernization to sustain our
    approximately 40-year-old MC-130 and AC-130 fleet, which support our
    Special Operations Command.
               state of the air force--people and infrastructure
        Full-spectrum readiness cannot be achieved without investing in our
    Total Force Airmen. Maintaining our strategic advantage necessitates
    reaching, recruiting, retaining, and developing the broadest and most
    talented All Volunteer Force our Nation has to offer. To improve
    mission quality in fiscal year 2016, we are increasing accessions and
    expanding our retention programs to bring our inventory from 311,000 to
    317,000 Active Duty airmen to address a number of key areas, including
    critical career fields such as intelligence, cyber, maintenance and
    battlefield airmen. In the aircraft maintenance field, we are short
    approximately 4,000 aircraft maintainers. Our maintainers must keep our
    existing aircraft flying at home and in combat, while simultaneously
    fielding the F-35. Due to an ongoing shortage of Active Duty aircraft
    maintainers, this budget request will fund contract maintenance
    personnel to fill the gap at select non-combat A-10, F-16, and C-130
    units allowing our Active Duty maintainers to transition to the F-35.
    This allows us to strike the best balance between meeting today's
    demand while modernizing for the future.
        As stated previously, we project airpower from our bases, and our
    infrastructure must keep up with modernization and recapitalization to
    sustain a ready force. To consolidate management, reduce overhead
    costs, and increase efficiencies, we centralized installation
    management under the Air Force Installation and Mission Support Center.
    This new command structure consolidates installation support
    requirements from the headquarters, major commands, and multiple field
    operating agencies. This budget request prioritizes readiness and
    modernization over installation support. With this decision we focused
    investments on a ``mission critical, worst first'' philosophy, funding
    projects with the most mission impact. Today the Air Force maintains
    infrastructure that is in excess of our operational needs. We have 500
    fewer aircraft today than we had 10 years ago, yet they are spread
    across the same number of bases. This arrangement is inefficient with
    aging, unused facilities consuming funding that should be used for
    readiness and modernization. A reduction and realignment of Air Force
    infrastructure would best support Air Force operational needs,
    therefore we support another round of base realignment and closure.
                         future state of the air force
        The Air Force, in consultation with combatant commanders, academia,
    and think tanks, developed a 30 Year Strategic Plan to make our forces
    more agile to effectively respond to future global conflicts. The plan
    provides for increased capability across all mission areas,
    specifically Adaptive Domain Control, Globally integrated ISR, Rapid
    Global Mobility, Global Precision Strike, and Multi-domain Command and
    Control. Yet, budget uncertainty has complicated our ability to execute
    this plan. Furthermore, the Air Force faces a modernization bow wave
    over the next 10 years that requires funding well beyond the BCA caps--
    this includes critical programs necessary to meet our capacity and
    capability requirements across all mission areas. Although we are
    grateful for the Bipartisan Budget Act relief, we still face great
    uncertainty for fiscal year 2018 and beyond. Without the funding
    requested in this budget, we cannot meet current demand for Air Force
    capability and capacity without sacrificing modernization.
        As our potential adversaries employ increasingly sophisticated,
    capable, and lethal systems, your Air Force must modernize to deter,
    deny, and decisively defeat any actor that threatens the Homeland and
    our national interests. Without the resources requested in our fiscal
    year 2017 budget, we will delay F-35 and C-130H recapitalization, defer
    some fourth-generation aircraft modifications, slow our planned end
    strength growth and take even more risk in Air Force infrastructure. A
    return to Budget Control Act funding levels would necessitate delays to
    modernization efforts. It would also further erode the already
    shrinking capability gap between America and our adversaries, and it
    would defer critical investments in space and cyber.
        A return to Budget Control Act funding in fiscal year 2018 would
    force us to revisit actions taken during fiscal year 2013's
    sequestration--actions that devastated readiness and broke faith with
    our airmen. We would be forced to divest force structure, disrupt
    readiness recovery, delay modernization efforts, defer investments in
    space and cyber, and triage maintenance on infrastructure and aircraft.
    It would continue to degrade base infrastructure, delay airmen growth,
    and limit critical skill set recruitment and retention resulting in a
    less ready, less capable force. Air Force readiness depends on your
    support of this this budget and your support for repeal of the Budget
    Control Act to remove the threat of sequestration--permanently.
                                   conclusion
        In the face of a dynamic, complex, and unpredictable future, your
    airmen provide a strategic advantage over America's rivals. They are
    educated, innovative, and motivated. Our airmen's ability to see
    threats, reach threats, and strike threats is a powerful deterrent
    against America's enemies. These courageous airmen, when properly
    trained, effectively equipped, and emboldened by the trust of their
    leadership, will ensure the Air Force continues to outwit and outlast
    opponents in Joint and Coalition operations and defend the United
    States from any who would do us harm.
        As our Army and Marine Corps get smaller, they do not want less
    airlift; they want it to be more responsive. As combatant commanders
    look toward battlefields of the future, they do not want less ISR; they
    need more persistent, capable, and agile ISR. We have the
    responsibility to assure air superiority so American soldiers and
    marines keep their eyes on their enemies on the ground rather than
    concern themselves with enemy Airpower overhead.
        The fiscal year 2017 budget request--and the flexibility to execute
    it as we recommended--is an investment in the Air Force our Nation
    needs. The global developments remind us that America's Air Force must
    have the capability to engage anytime, anywhere, and across the full
    spectrum of conflict, all while providing a reliable strategic nuclear
    deterrent. America expects it; combatant commanders require it; and
    with your support for this budget request, our airmen will deliver it.

        Senator Ayotte. Thank you, General.
        I would like to start by asking each of you, What is your
    leading readiness concern as we think about where we stand?
    Appreciate the testimony that you've given, but if you can tell
    me, What are the things--what is the thing that keeps you up at
    night, readiness-wise?
        General Allyn. Thanks, Madam Chair.
        For the United States Army, our number-one readiness risk
    is sequestration. We must have sustainable and predictable and
    sustained funding to deliver the readiness that our combatant
    commander requires--require to meet the missions that continue
    to emerge. Elimination of sequestration is our greatest risk to
    future readiness.
        Admiral Howard. Madam Chair, I would echo those comments. I
    was at the fleet when we actually sequestered. We ended up
    canceling deployments, shifting maintenance periods to meet the
    savings required to meet the new budget top-line. It--the
    ripple effect of that goes through the years. You not only lose
    the maintenance time, but you lose qualification time for
    people in that experience that can never be bought back,
    because you can't get the time back. Particularly for us, as a
    capital-intensive force, having a stable budget, being able to
    procure and maintain our ships with certainty allows us to
    maintain a ready fleet.
        Thank you.
        Senator Ayotte. Thank you.
        General Paxton. Thank you, Chairman.
        I concur with both the VCA--Vice Chief of the Army and the
    VCNO. The continued impacts of sequestration are felt over
    multiple years. We have not had a stable fiscal planning
    environment for 3 years now. We are--we continue to make hard
    tradeoffs, and we mortgage our future readiness, because we're
    trying to fight today's fight. I have concerns about capacity
    and future readiness. Everything we do is trade space, and we
    need some top-line relief, ma'am.
        Thank you.
        General Goldfein. Ma'am, and I'll just continue the same
    dialogue. When we stopped flying in--when we were sequestered,
    we shut down and grounded 31 fighter squadrons. When an Air
    Force stops flying, it's actually felt across the enterprise,
    because not only is it the aircrew that stop training, it's the
    air traffic controllers that stop training, it's the folks that
    actually all participate in producing airpower, and it extends
    into the depots that all work towards becoming our readiness
    engine. For us, we're still climbing out of the impacts of
    sequestration.
        I would just add, one point is that we also broke faith
    with our airmen, especially our civilian airmen. When they were
    furloughed, we lost a number of them who decided that if the
    company was not invested in them, they were not going to stick
    with the company. For us, repeal of sequestration is job one.
        Thank you.
        Senator Ayotte. Thank you all.
        General Goldfein, I wanted to have you provide us an update
    on the KC-46A and where they stand with the delivery to Pease.
    I saw, in the Air Force request, that you've requested funding
    in 2017 for a KC-46A fuselage trainer at Pease. Is that
    important training resource as we base the KC-46A at Pease?
        General Goldfein. Yes, ma'am. Right now, the KC-46 is on
    track to meet both their required aircraft availability
    delivery date, which is 18 aircraft in August of 2017. We have
    had some testing delays. The impact of that is that, in a
    normal schedule, we would have aircraft, you know, be produced,
    we would induct them into the Air Force, we would do the
    maintenance and the testing on those. What's happening is, even
    though we believe they're going to be able to meet their
    required aircraft delivery date, we're going to get a number of
    aircraft all at once. As we work our way through that, we
    believe that we're going to be able to absorb that in the first
    two bed-downs, which is Altus and McConnell. By the time they
    actually get to Pease Air Force Base, we believe that we'll
    actually be back on track. We're watching that very closely.
        We have had some issues lately with some boom axial loads,
    but we think we actually have the software fix in place, so
    we're on track, we believe, to meet the IOC dates.
        Senator Ayotte. Excellent. Appreciate it. I know that our
    airmen and all at Pease are anxiously waiting and ready, so we
    appreciate it--the update. Keep us updated on where things
    stand there.
        I wanted to ask, Admiral Howard--you and I talked about the
    Virginia-class submarine. Of course, you've been to the
    shipyard, and I appreciate your visit there. Right now, are we
    able to meet all the combatant commanders' requests for support
    from our attack submarine fleet?
        Admiral Howard. Ma'am, thank you for that question.
        Across our entire fleet, we're not able to meet the
    combatant commander requests. Generally, their accumulated
    requests are--is about three times higher than the force that
    we have. Our SSNs and their multimissions are very important to
    the combatant commanders.
        Senator Ayotte. As you talked about in your opening
    testimony, the size of the fleet, it--obviously, our attack
    submarine fleet's phenomenal, but presence is very important,
    especially as we think about the Asia-Pacific region and also
    the Middle East and various areas around the world that we have
    to cover.
        As I look at--right now, under the Navy's current plan--you
    and I talked about this, but--by 2021, we're at one--producing
    one Virginia-class submarine a year, versus two. I know that
    Secretary Stackley had testified that he would be open to the
    idea of, if you were able to have enough--achieve enough
    savings in the Ohio-class replacement program, that he would
    like to see you purchase two in 2021.
        Now, I understand you can't answer that question now until
    you know what the planning is, and investment in the Ohio-class
    program, going forward. But, do you agree with Secretary
    Stackley that, if--obviously, if this were something that you
    were able to achieve the savings and we were to give you the
    certainty that you needed, that there is an urgency and
    importance to making sure that we continue to build up and
    strive for the two production of Virginia-class submarines from
    2021, going forward?
        Admiral Howard. Yes, ma'am, I do. Yes, Senator, I do.
        In our last force-structure assessment, we believe we need
    about 48 SSNs. As we've been buying two a year, then, as the
    older ones start to reach the end of their lifecycle, we will
    be down to 48 in 2024, and then we continue to drop in numbers
    until we get into this bathtub in the 20s. In order to make
    sure we don't get to that bathtub, we're going to have to
    continue to build two, and we're going to have to figure out
    how to get there.
        In terms of the Ohio replacement, one of our issues will be
    whether or not we will have to manage that funding for that
    asset. It's a strategic asset. I certainly appreciate this
    group's work on the strategic deterrence fund, but if we have
    to fund Ohio replacement within our budget top-line, that will
    affect all of shipbuilding and actually affect the rest of the
    conventional force, as well.
        Senator Ayotte. Excellent. Thank you, Admiral Howard.
        I would now like to call on Senator Kaine.
        Senator Kaine. Thank you, Madam Chair.
        Thanks, to the witnesses.
        General Allyn said something. I just took it down quickly.
    I think I got the quote right, ``Sequestration is the greatest
    risk to future readiness.'' I believe that that's true.
    Sequestration was driven by a reality that we also have to
    acknowledge, which is, we do have an increasing debt that we
    have to manage. The deal that was struck, the BCA [Budget
    Control Act of 2011] cap deal on August of 2011, basically
    punished a lot of our operations, discretionary spending, and
    defense spending, as a way of forcing the effort to find a
    deal. The deal was, basically, supposed to be a deal that dealt
    with the costs of Medicaid and Medicare, on one hand, and the
    escalating tax expenditure suck out of the revenues, on the
    other hand. We haven't done that deal. You know, just bluntly,
    Democrats generally are loathe to get involved in Medicaid and
    Medicare reform, and Republicans are loathe to get into tax
    reform. But, if we don't do that deal at some point, we can't
    just say the deficit doesn't matter. Because it does. The
    sequester is going to stay on.
        The need to release sequester is going to demand of us a
    willingness to show backbone and find some reforms in these
    areas that, in the past, has been difficult to do. But, I
    really pray that, as a U.S. Senator, I'm going to get to cast a
    vote on a big tax reform and spending reform package that will
    enable us to just put sequester in the dustbin, where it
    belongs.
        The--I'm going to ask this question for the record. Senator
    McCain has written a letter to the Service Chiefs in--asking
    for fiscal year 2017 unfunded requirements priorities list.
    Chatted with you about some of that. Some of the material is
    starting to come over to the committee. The unfunded
    requirements and priorities are not, themselves, prioritized.
    For the record, I'm going to ask that the Service Chiefs'
    submissions, in fact, be prioritized, because it will help us,
    if we decide, can we do some additional resources, to know how
    those would be applied by the services. I'll ask that question
    for the record.
        [The information referred to follows:]

        General Allyn. The Army Staff conducted a fair and in-depth
    assessment of the Army's fiscal year 2017 budget request; the fiscal
    year 2017 Unfunded Requirements (UFR) list prioritizes the shortfalls
    and related impacts to the Army's ability to address security
    challenges identified by our national leadership. The UFR list has been
    prioritized and identifies top Army operational requirements totaling
    $1.0 billion and Military Construction requirements totaling about $300
    million. The prioritized UFR list does not displace what was already
    submitted as part of the President's Budget. Instead, these items would
    increase the Army's funding topline for fiscal year 2017 and reduce
    risk. Critical Tier I funding priorities include the following: the
    National Commission of the Future of the Army (NCFA) recommendations,
    which are a strategic assessment of the capabilities and capacity of
    the future force and emerging strategic environment; strategic
    mobility, which includes the maintenance support costs for
    prepositioned equipment sets and war reserve ammunition shortfalls to
    support deterrence activities in Europe; operational shortfalls in
    support of combatant commanders in support of critical near-term
    readiness including many key Intelligence, Surveillance and
    Reconnaissance (ISR) assets, which will provide ISR support and
    intelligence products for analysts to answer commander's priority
    intelligence requirements; capability upgrades to Vehicle Protection
    Systems, which provide enhanced protection and survivability in order
    to retain a technological edge; and high priority readiness
    requirements to include funding for home station training, ground
    operational tempo, training ammunition, improvements to our Combat
    Training Centers program, emergency deployment readiness exercises,
    range support, individual skills training and Second Destination
    Transportation which impact the Total Force.
        Providing funding for the prioritized requirements on the UFR list
    would enhance the readiness of the nation's land forces and should only
    come as an additive increase to the Army's fiscal year 2017 topline.
    The complete prioritized UFR list was provided directly to the
    Congressional office.
        Admiral Howard. Attached is the Navy's fiscal year 2017 unfunded
    priorities list below.

          [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        General Goldfein. The Air Force's fiscal year 2017 Unfunded
    Priority List provided in March is presented in priority order. The
    first five requirements listed are our highest priority requirements.
    These top requirements focused on the tough choices we made in fiscal
    year 2017 to stay within the 2015 Bipartisan Budget Act topline. Beyond
    those tough choices, the Air Force focused on Modernization, Readiness,
    and Installation Support; which directly support the SecAF's three
    priorities . . . taking care of people, striking the right balance
    between readiness and modernization, and making every dollar count. The
    requirements give our airmen the equipment they need, the training to
    meet readiness requirements, and the facilities to work and enhance
    quality of life.
        General Paxton. Please see the attached prioritized Unfunded
    Priority List for the Marine Corps below.

        Senator Kaine. General Paxton, let me ask you about a
    couple of items with respect to the marines on aviation. The
    goal of the Osprey readiness is 87 percent, but it's about 60
    percent today. About one-third of the Sea Stallion helicopters
    you need to train are ready today. Last year's hearing, you
    talked about the extensive backlog of requests for legacy model
    F/A-18 Hornets. Tell us a little bit about how we can help you
    best on this aviation readiness shortfall that you've
    described.
        General Paxton. Thank you for the question, Senator Kaine.
        We continue to have challenges in our aviation communities,
    writ large. If I were to say--if you needed an exemplar of the
    impact of continued sequestration or the readiness dollars, I
    would tell you that the pacing indicator in the Marine Corps is
    our aviation community. Within that community, we are
    struggling to get F- --B-22 parts to keep them online, and we
    are struggling for maintenance for the F/A-18s. We have some
    challenges in our depot maintenance. Some of that was
    exacerbated by the loss of skilled craftsmen and the loss of
    money during the sequestration, 3 years ago. We have a
    continued rebound there.
        The plan to regenerate F-18 capability is behind schedule
    on a monthly and on an annual basis. We continue to chip away
    at that, sir.
        It is a mix of three component pieces. It's the ability to
    get the aircraft off the line, to get it in to be ready to
    maintain, which means you're going to strip away a frame that
    pilots would be training on. It's also the need to have the
    wrench-turner, be it a uniformed military or a civilian. Then
    it's the money available to continue to do the maintenance and
    to bring that offline.
        We have to sync all of those up together, sir. We have a
    demand signal for--particularly for our F-18s right now, until
    we get the F-35s online. We're flying the wings literally off
    the F-18s right now. That is probably the biggest pacing item
    for us, sir. The depth-to-dwell is below 1-to-2. We continue to
    source them to two of our Special-Purpose Marine Air-Ground
    Task Forces [MAGTFs] in support of CENTCOM [Central Command]
    and AFRICOM [African Command]. There's a demand signal, and
    we're trying to meet the ``fight tonight'' capability, as I
    said. We're doing it at the expense of both the sustainment and
    the modernization, Senator.
        Senator Kaine. Can I follow up on the point you made about
    the Special Purpose MAGTFs? You've got two, and they're
    assuming a greater role in crisis response in the regions that
    you discuss. I understand the Marine Corps is looking at even
    increasing forward presence to ensure that one-third of Active
    operating forces are immediately available for use for
    contingencies. How do you, kind of, position forward and at the
    same time deal with some of the home base readiness issues that
    the marines are experiencing?
        General Paxton. Thanks, Senator Kaine.
        We are committed, as you know and the committee knows, I'm
    aware, and as I said in testimony, to answer the ``fight
    tonight'' requirements from the geographic combatant
    commanders, which is why we have the two Air-Ground Task Forces
    forward-deployed. We have, in the last year, as we did our
    global force allocation--we have had to reduce the density of
    aircraft available to those Special Purpose MAGTFs, in at least
    one case. That's because we reached the point where we had to
    change our depth-to-dwell model. We had to change our
    maintenance. We had to actually induct aircraft back into the
    line, back here in the States, and we had to keep sufficient
    aircraft at home to train pilots. We're answering the
    geographic combatant commander's demand signal, but we have
    asked him to reduce that demand signal a little bit. We had to
    strike that balance, again, between ``operate tonight'' and
    ``ready for tomorrow,'' Senator.
        Senator Kaine. General Goldfein, I want to move over and
    ask about an Air Force issue that we talk about a lot in the
    committee, but I didn't fully grasp, til recently, that it was
    not a platform issue; it was really kind of a readiness issue.
    This is--we debate, on the committee, about A-10 versus F-35.
    We have been. If dollars were no object, we might not be having
    the debate. But, dollars are an object, and so there's been
    kind of a tug-o-war of this.
        I thought that was a--essentially, a debate about the
    viability or the effectiveness of one platform versus another.
    But, what I find, for example, as I've dug into it more, the
    Air Force was intending, in the phase-down of the A-10, to take
    the A-10 maintainers and move them over and have them become F-
    35 maintainers. If we don't phase down the A-10, suddenly
    there's about 4,000 maintainers that you need for the F-35 that
    you don't have. This is really a readiness question on the
    maintenance side. How do you deal with that maintenance gap on
    the F-35 side? Because that's a sizable crew of people that you
    need to make sure the F-35 are effective.
        General Goldfein. Yes, sir. Thanks for the question.
        Because we actually are all in the same boat on this one,
    in that we don't have excess capacity to bring on new while we
    maintain the old.
        Senator Kaine. Yeah.
        General Goldfein. Actually, I could not give you a better
    example of the impacts of sequestration than the A-10
    discussion we're having, because it came directly out of the
    sequestration discussion. I mean, in 2015, we were given an $8
    billion math problem to solve under the sequestered budget. In
    2013, just as the Chairwoman said in the opening comments, you
    know, a lot of the--the world was relatively stable as we
    looked to the forward. We were coming--we were out of Iraq, we
    were coming out of Afghanistan, Russia was not active. We had a
    relatively stable environment we were looking forward to. We
    had to solve an $8 billion math problem.
        We went to the combatant commanders and said, ``Of those
    missions that we do for the Nation and for your combatant
    commands, we have got to find an--a weapon system that we can
    take offline to be able to harvest the dollars to pay the bill
    and the manpower to bring on the new weapon system. Here are
    the options. Take out the B-1, take out the F-15E, take out 400
    F-16s, or take out the A-10.''
        As you know from working budgets, the easy answers are gone
    pretty early in the discussion, and what you're left with is a
    series of bad options, and you try to pick the least bad one,
    which was the A-10. We have 100-percent concurrence with the
    combatant commanders that, given those options, the A-10 is the
    weapon system that we would take offline and retire, because we
    do have a mitigation--not a one-for-one replacement, not a
    platform that can step in for the A-10, but jointly across all
    of our aviation capabilities, we have a way to mitigate the
    shortfall of the A-10. When the combatant commanders looked at
    that, versus other options, they chose that.
        We are going through a number of steps to be able to
    mitigate that. When we came back to Congress and delayed the
    retirement, it was based on the reality that the world changed
    since our assumptions were made.
        Senator Kaine. This is not to really get back into--members
    of the committee have strong feelings about A-10 versus F-35--
    --
        General Goldfein. Sir.
        Senator Kaine. I'm actually not interested in arguing that
    right now. But, the thing that I hadn't fully grasped is, by
    keeping the A-10 alive, we had made a decision to move the
    maintainers over, and so now we have a maintenance gap on the
    F-35 side, which is pretty critical. That's a readiness
    question.
        General Goldfein. Sir.
        Senator Kaine [presiding]. These issues do tie together
    tightly.
        My time is up. Senator Inhofe is next.
        Senator Inhofe. Okay, thank you, Senator Kaine.
        I think one thing we're getting out of this, so far, is
    that General Hawk Carlyle was right when he was talking about,
    ``We have more mission than money, manpower, and time.'' That
    refers not just to the Air Force, but across the board. I know
    that's the situation we're in right now. It's very disturbing.
        Secretary James and General Walsh were before this
    committee last--I think it was 2 weeks ago--and they said,
    prior to 1992, the Air Force procured an average of 200 fighter
    aircraft per year. In the two and a half decades since,
    curtailed modernization has resulted in procurement of less
    than an average of 25 fighters yearly. Now, that's--General
    Goldfein, that is pretty disturbing. How are we--did we have
    too many before? Explain how we got to this situation.
        General Goldfein. Yes, sir, thanks.
        Over the last 15 years, while the Nation has been very
    singularly focused, in many ways, on the violent extremism
    threat and fight in the Middle East, each service has made
    strategic trades, based on demand signals, on what we provide
    to the joint team. For the Air Force, the demand signal has
    been primarily in space, cyber, ISR [intelligence,
    surveillance, reconnaissance], and the nuclear enterprise.
    You'll see in our budget that we invest in those. When you're
    trying to balance against those, there's only two places you go
    to balance, and that's people and conventional airpower.
        Senator Inhofe. Yeah. We're talking about fighter squadrons
    there.
        General Goldfein. Sir.
        Senator Inhofe. I can remember, not too many years ago, I
    think they, through necessity, did away with 17--or stood down
    17 fighter squadrons. I remember, at the time, we were making
    statements, and I did, before the general committee, that it
    costs more to reinstate those than anything that is saved in
    that short period of time by standing down those fighter
    squads. Do you agree with that?
        General Goldfein. Yes, sir, I do.
        Senator Inhofe. We had the actual figures of that, and it's
    pretty astounding, that----
        General Goldfein. Yes, sir.
        Senator Inhofe. Then, talking--and I would also mention the
    Chairman of the committee, Senator Ayotte, talked about what's
    happening over there, what our competition is doing. As we find
    ourselves in a situation where we are downgrading, China and
    Russia are not standing still. I see this gap closing. The J-
    20--I guess they were the--yeah, J-20 in China, and the T-50 in
    Russia. They are--they're closing in on us. China's J-20, it's
    my understanding, would be a real competitor to our F-35 and F-
    22. We have those problems.
        When you talk about failing--and we all said that it's
    modernization that is paying the bill for a lot of this stuff.
    We're not preparing for the future. I can remember--and I'd
    direct this at our Army and our Marine Vices. Are you aware
    that my last year on the House Armed Services Committee, before
    I came to the Senate, we had people testifying that, in 10
    years, we would no longer need ground troops? Remember that?
    Yeah. Well, I guess what I'm saying is, when you're talking
    about modernization, you have two problems. One, modernizing
    equipment. The other is on your mission--modernize your
    mission. If we were to sit here right now--you guys are all
    smart--and determine what are our needs going to be 10 years
    from today, you're going to be wrong. The only way, if we are
    going to try to reinstate our position of superiority, is to go
    ahead and do what's necessary in all the possible scenarios
    that might be taking place in--10 years from now, or 20 years
    from now. You have to stop. You can't wait 8 years and then
    determine what to do.
        I would hope that you'd consider that to be a major problem
    that we need to address, in that we don't know what our needs
    are going to be. The American people out there, they don't know
    that we don't already have--aren't already superior in every
    possible scenario, put together. I think that's something----
        Now, I don't disagree with Senator Kaine, although let's
    keep in mind that, when we were testifying--I think it was
    General Walsh or--but one of them said that, in 1964, we spent,
    total--52 percent of our total expenditures on defense. Today
    it's 16. Now, when you read further, you do find the culprit in
    there is in the entitlements that we're going to have to
    address. I would agree that we're going to have to get there.
    But, nonetheless, whether it's entitlements' fault or anybody
    else's, we're still down there to a small fraction of what we
    considered to be the priorities to defend America at that time.
        Did we find--Mr.--General Goldfein, when we talked about
    the--we brought this up when we had your boss in here and
    talked about the fact that we, today, have 33--he said 34 at
    that time; this was just last week--fighter squadrons into our
    first conflict since Vietnam, or today. But, in 1991, we had
    134 combat-coded fighter squadrons. Would you say that we--
    again, asking you kind of the same question that we did
    before--did we have too many at that time? How can we justify
    this kind of degrading, in terms of the numbers of fighter
    squadrons?
        General Goldfein. Yeah, thanks, sir.
        I would say that we did not have too many. We had,
    actually, what we needed to go. That was a result of the vision
    of the Vietnam generation who built our force back after
    Vietnam and gave us the force we needed when we wanted to go
    in.
        Our challenge today is that for an Air Force--and we all
    build and sustain readiness a little bit differently, but I'll
    tell you, for an Air Force, when we say that we require the
    force to be--80 percent of the force to be ready, it's because
    if you take a look at the timelines of the operational plans
    that the combatant commanders rely--approximately 80 percent of
    the Air Force is forward within 120 days. We have to have that
    capacity to be able to meet the defense strategic guidance.
        Senator Inhofe. Yeah. Okay.
        Lastly, in this morning's--one of the publications, they
    kind of relived what happened to our Harrier that caught fire,
    here, just the other day. I think it was the--yeah, it was
    General Neller said that he raised the question as to whether
    readiness shortfalls had contributed to what has become a 5-
    year high in aviation mishap rate. That's really astonishing. A
    5-year--it affects all you guys--a 5-year high. What--now that
    you've had some time to think about it, what do you think about
    that, in terms of, What could have been the cause of the
    Harrier with the fire accident that--just a few days ago?
        General Paxton. Yeah, thank you, Senator Inhofe.
        We are concerned about the safety of the aircraft. We're
    not concerned--let me rephrase that, sir. That's incorrect.
        We're not concerned about the safety of the aircraft. The
    aircraft are well-designed, well-built, well-maintained, and
    well-flown by great pilots.
        Senator Inhofe. Been around, though, since 1985.
        General Paxton. But, we are concerned about an increasing
    number of aircraft mishaps and accidents. We are--although that
    particular one is under investigation, Senator, we're looking
    to see if there's a linear correlation. We know, historically,
    that if you don't have the money and you don't have the parts
    and you don't have the maintenance, then you fly less.
        Senator Inhofe. Sure.
        General Paxton. We call it ``sets and reps.'' You need set
    and repetitions to keep proficiency up there. We truly believe
    that if you fly less and maintain slower, there's a higher
    likelihood of accidents. We're worried.
        Senator Inhofe. Your schedule now is--I think that's--
    they're ultimately going to be replaced by the B-35Bs. Is that
    correct? The date for ultimate--for ultimately replacing all of
    them would be 2025. Am I--is that information correct?
        General Paxton. That is correct, Senator.
        Senator Inhofe. Do we have enough Harriers to last that
    long?
        General Paxton. We have sufficient inventory, sir. We have
    to keep up the maintenance on them.
        Senator Inhofe. Okay.
        General Paxton. Absolutely.
        Senator Inhofe. Thank you.
        Thank you, Mr. Chairman. Madam Chairman, not Mr. Chairman.
        Senator Ayotte [presiding]. Thank you, Senator Inhofe.
        I'd like to call on Senator Heinrich.
        Senator Heinrich. Thank you, Madam Chair.
        General Goldfein, Senator Kaine brought up the issue of--
    with keeping the A-10s flying, the maintainer challenges that
    we have. That's something that's been impacting my home State
    of New Mexico, as well. Some of that gap has been filled with
    contractors. Why haven't we looked at using the Air National
    Guard to help fill that maintainers gap?
        General Goldfein. Sir, actually, we have. It's--what's an
    interesting part of your Air Force today is that you can jump
    on a C-17, walk up into the cockpit and ask, ``Okay, who's
    Guard, who's Active, who's Reserve,'' and all three hands will
    go up. We're that integrated.
        We actually have used, and are continuing to use, the Air
    National Guard as we look at resolving the maintenance
    challenges we have as we, right now, maintain the A-10 and
    bring on the F-35. It's a complete one-Air Force solution that
    we're going down.
        You mentioned contractors. What we've done is, we've
    actually looked at those locations where squadrons don't
    deploy, and we're using contractors. That's where you see the
    replacement training units and the aggressor squadrons. But,
    that's a short-term fill, because eventually we've got to get
    back into blue-suit maintenance for those units.
        Senator Heinrich. Yeah. I would just encourage you along
    those lines. I think that's a really good role for our Air
    Guard. As we work through those challenges, I think that's one
    of the solutions that I'm certainly most attracted to.
        I wanted to bring up something that came up here when we
    did the NDAA [National Defense Authorization Act] last year. As
    you know, this committee provided a pay incentive specifically
    to encourage RPA [remotely piloted aircraft] pilots to enter
    into and stay in that field. In the end, the Air Force decided
    against providing that incentive pay. The justification or the
    rationalization for that was to main parity across Air Force
    platforms, but it ignores the underlying issue, which is the
    Air Force RPA pilots are leaving the service in high numbers,
    as you know, and creating very serious training challenges.
    It's--it seems to be a pretty insatiable demand right now for
    those capabilities overseas. Some have said that the RPA is
    literally--community--is literally at a breaking point. That's
    why I think you saw this committee authorize that.
        If RPA pilots fly more hours--and I've seen estimates
    around 900 per year--shouldn't their bonus structure reflect
    that increased demand?
        General Goldfein. Yes, sir, thanks.
        The reality of the RPA--remotely powered aircraft--business
    in ISR is, it's been on an exponential growth really ever since
    2001, when we had zero caps, then we grew up to--all the way to
    65 caps. What happened along the way is, we continued to try to
    mature that weapon system. A mature weapon system, as we define
    it, is enough individuals in the weapon system to do the
    primary mission, plus go to school, plus do staff, plus serve
    as interns here, and do all those things that we can
    communicate that portion of the Air Force across the
    enterprise.
        What's happened in the business of RPA is that every time
    we try to stabilize, three more caps were added. The question
    came to the Air Force, ``Can you?'' Our answer was always,
    ``Yes, if.'' ``Yes, if--yes, we can add three more caps if we
    delay maturing the weapon system.'' Everyone we had in the
    weapon system was doing mission.
        This year is the first time we've actually had a chance to
    stabilize. We've got--we've got 140 initiatives now that we're
    actually able to execute, that have been on the books for
    years, actually, that can now improve, not only the manning we
    need to be able to get the weapon system to be mature, but also
    improve the quality of life for these folks that you mentioned.
    One of those is the pay that you authorized.
        When we looked at the critically--the, you know, low-
    density, high-demand weapon systems across the Air Force,
    personnel recovery, you know, some of our other weapon systems,
    we want to make sure that we target all of them. While it's a--
    it may come across as an issue of fairness and equity; it's
    really a matter of making sure that we target. We're doing that
    the first year, with 25,000. We're going to come back to you
    this next year and, as we've taken a look at the impact, and
    perhaps come back for the full 35.
        Senator Heinrich. Can you talk a little about, aside from
    the bonus issue, what steps you're taking just to recruit and
    train more quickly?
        General Goldfein. Yes, sir.
        First, the most important thing we've done is, we've
    increased our instructor pilot force that you've seen at
    Holloman----
        Senator Heinrich. Right.
        General Goldfein.--up to 80 percent, where we were sitting
    about----
        Senator Heinrich. Yeah.
        General Goldfein.--60 percent. That's really----
        Senator Heinrich. Huge change. It's----
        General Goldfein.--increased its throughput.
        Senator Heinrich.--very----
        General Goldfein. That's going to get us that 10-to-1 crew
    ratio that we've got to build to mature the weapon system.
        The other thing we're doing is, we're actually working to
    add a squadron to each wing that we have. Because the way we
    are operating now is, every squadron is in full combat
    operations. There's no relief. We want to add another squadron
    so that you have one squadron that's in training, the one
    squadron that's doing, you know, all of their additional work
    that they have to do, while the other two are engaged in combat
    operations. You rotate through the wing the way we do in other
    mature weapon systems.
        The other thing we're looking to do is add a base. We'll do
    that transparently through the basing process so that we don't
    have the option of essentially going between Holloman and
    Creech as the only two locations for that enterprise.
        Senator Heinrich. Great. I appreciate your attention to
    that.
        General Allyn, the National Commission of the Army appeared
    to take a pretty pragmatic approach when considering the
    tradeoffs that you've talked about between readiness and
    modernization. The Commission recognized the need to preserve
    the Army's level of readiness, but also provided a pretty
    scathing critique of the lack of investment for next-generation
    Army platforms. The Commission concluded that the consequences
    for modernization were regrettable, and warned that the long-
    term risk to force and mission would be significant. What are
    your thoughts on what needs to be done differently, in terms of
    the acquisition or the requirements process, so that the Army
    can pursue the testing, evaluation, and procurement of those
    next-generation weapon system, as well as investing in the
    ranges to actually test them?
        General Allyn. Thank you, Senator.
        I mean, you put your finger on the issue that affects all
    of our services, and that is this struggle that we have to
    maintain balance between delivering the force that's required
    today while building the force for the future and taking care
    of our people. What you see us having to do is make a very hard
    decision and a poor choice, but the best choice we have within
    the resources that we have. While acquisition reform is
    essential to make sure that we get the best value for every
    dollar that we put into procurement and acquisition efforts,
    the problem in delivering capability is not because of
    acquisition reform, it's under-funding. All right? We have
    eroded our procurement----
        Senator Heinrich. You will get----
        General Allyn.--funding by 35 percent.
        Senator Heinrich.--I think, no argument from us on that
    fact. I think, as you heard from Senator Kaine, in particular,
    that, until we address sequestration, I don't think any of us
    are under the misinterpretation that we're going to be able to
    fix the gross overall problem.
        General Allyn. But, we are absolutely committed, Senator,
    to taking not only actions within the service to address
    acquisition reform, because it's absolutely vital that we
    deliver the right equipment at the right time for the best
    value for the Nation, and we're committed to that, but we also
    have got to put more funding into future readiness, because
    we're mortgaging it right now.
        Senator Heinrich. Thank you.
        Senator Ayotte. Senator Ernst.
        Senator Ernst. Thank you, Madam Chair.
        Thank you, ma'am, gentlemen, for your great years of
    service.
        General Paxton, especially to you, thank you so much for
    your many, many years of service. I think General Allyn would
    also thank you for your service, as well.
        General Allyn. For the record, he wasn't there 100 years
    ago when the first ACMC [Assistant Commandant of the Marine
    Corps] went on duty, contrary to popular opinion.
        [Laughter.]
        Senator Ayotte. He came right after that?
        [Laughter.]
        Senator Ernst. You have a good friend in General Allyn,
    sir.
        General Allyn, I'd like to start with you and thank you for
    your hospitality yesterday, as well. I appreciate your time and
    effort in these matters.
        But, over the past year, we've had a number of combatant
    commanders that have told us they are either lacking
    capabilities or they're not--just barely able to adequately
    meet demands. I would like to hear from you how comfortable you
    are with the Army's ability to respond to the combatant
    commanders' requirements currently, and then also, Do you think
    that you have adequate capacity to respond to the combatant
    commander current requirements as well as if we have an
    unforeseen crisis that comes up in the near future? If you
    could expand on that, please.
        General Allyn. Thank you, Senator.
        Let me probably hit a target that everyone at this table is
    wrestling with. You've heard it from each of us, that we are
    absolutely committed to delivering trained and ready forces in
    support of our combatant commanders. That is job one for us.
    For the United States Army, we delivered 91 percent of what our
    combatant commanders asked for, in terms of known requirements,
    for this past year. That sounds good. Ninety-one percent.
    That's an A in many schools across the country. But, that 9-
    percent gap is unacceptable to a combatant commander, and we
    recognize that.
        In addition to that, the Army has delivered 64 percent of
    the emerging requirements that came out during this past year,
    of their total requirements. Sixty-four percent of what they
    asked for that was unpredicted at the beginning of the year, we
    delivered. Of course, the problem with that is, that came out
    of our surge capacity build. While we're trying to generate
    surge capacity for contingencies, we must continue to answer
    the emerging requirements that are validated by the Chairman of
    the Joint Chiefs and the Secretary of Defense. The end result
    of that is, I do not have a level of comfort that we are ready
    for a contingency of a major scale against our peer
    adversaries; and therefore, I am very uncomfortable with the
    trajectory of our drawdown right now, and I do believe it's
    time for a strategic review of, is that what is best for our
    Nation?
        Senator Ernst. General Paxton, do you have any thoughts on
    that, as well? Do you have capacity?
        General Paxton. Thank you, Senator Ernst.
        I know this will shock you, but my battle buddy and I are
    pretty aligned here, ma'am. We will continue to always meet
    geographic combatant commander demand signals. Even within
    those requirements, as General Allyn just talked about, there
    is a prioritization on the Joint Staff. We delude no one in
    knowing that Pacific Command and Central Command are resourced
    at a much higher capacity than AFRICOM or SOUTHCOM [U.S.
    Southern Command]. That is of some concern, certainly to those
    two geographic combatant commanders, but also to the services.
        In the case of the Marine Corps, when we say ``fight
    tonight,'' we have an equally high pride factor and ability
    factor to source ``fight tonight'' forces. As you just heard me
    explain to Senator Kaine, we've had to already chip into that
    by saying, ``We're going to resource you and send it over, but
    you're not going to get quite as many aircraft in the next
    round of doing that.'' We do all of that at the expense of our
    bench strength. We have ``tonight'' forces, which are ready,
    ``tomorrow night,'' which is ready, then everything else is at
    some degraded state of readiness, whether it's personnel,
    training, leadership, equipment. That is not only mortgaging
    the future, but that's mortgaging the surge capability to fight
    an operations plan against a known adversary, where we're
    banking to have good indications and warning, adequate lift,
    and right time. I worry about the capability and the capacity
    to win in a major fight somewhere else right now.
        Senator Ernst. Okay. Very good. Thank you, General Allyn
    and General Paxton.
        General Paxton, if we could just continue the conversation
    about personnel readiness. You--the Marines are a small force
    already. Yet, you continue to downsize. As we look at the pool
    of ready applicants that are coming into the Marine Corps, we
    really do want those quality individuals. Can you talk a little
    bit about how the Marine Corps is facing these challenges in
    recruiting and retention? Also, how do you deal with the
    challenges of keeping qualified senior leadership in your
    ranks?
        General Paxton. Yeah, thank you very much, Senator Ernst.
    Two great questions.
        All the services, I think, are vitally interested in
    quality applicants. The amount of high-quality young men and
    young women in the United States, that pool continues to
    dwindle when you look at physical characteristics, you look at
    academic performance, you look at morals, and things like that.
    We continue to have a challenge to identify interested and
    propensed individuals from a smaller and smaller pool.
        In the particular case of the Marine Corps, we are not
    having a problem now at all. We have not had a problem for
    many, many years attracting high-quality individuals, officer
    and enlisted, regular and Reserve, to come into the Marine
    Corps. We're very, very proud of our recruiters, our recruiting
    force, our recruit trainers, and our entry-level pipeline. We
    do not have a problem with reenlisting officer and enlisted
    first-term, too.
        The challenge we see, as you said, to continue to maintain
    a high-quality force over time. There are certain leading
    indicators in our second-term reenlistments. Forces--there is a
    high demand signal for them to train a lot. Forces where we
    need--we have the authorities for bonuses, but we may not have
    the money for the bonuses. There's a demand signal out in the
    civilian economy.
        I think all the services right now are wrestling with the
    cyberworld. We know that we need better defensive cyber
    capabilities. We know that, at some type, we need offensive
    cyber capabilities. It takes a long time to train those
    individuals. Once you train them and you get them the security
    clearance, they are highly marketable, and the civilian
    establishment is making money off of us, because we qualify
    them, we train them, we give them security clearances, and then
    we need to keep them around. Cyber operators, special
    operators, there's a handful of folks--pilots--I think all four
    services will wrestle with the long-term retention of those
    critical skills, Senator.
        Senator Ernst. Thank you very much.
        I just want to echo that. I know it's true in the Army, as
    well; I'm sure in the other services. I struggled, as a
    battalion commander, once we found those soldiers that had
    those special skills, keeping them employed within our units
    without losing them to other civilian occupations.
        Thank you very much, ma'am, gentlemen. Thank you for your
    time here today. Appreciate it.
        Thank you, Madam Chair.
        Senator Ayotte. Thank you, Senator Ernst.
        Senator Hirono.
        Senator Hirono. Thank you, Madam Chair.
        Thank all of you for being here.
        General Goldfein, adversary air is an important part of
    keeping readiness levels of our pilots at their desired levels.
    Because there are no convenient aggressor aircraft available in
    a nearby State, the Hawaii Air National Guard's F-22s are
    forced to conduct exercises against each other, which eats up
    very valuable and expensive airtime of these advanced fighter
    aircraft. I've introduced legislation in the past encouraging
    the Air Force to look at a wider range of solutions to this
    problem. For Hickam, are you considering having--basing some
    aircraft that can be used as aggressors, looking at commercial
    aggressor services, for example? Can you tell me where the Air
    Force is in trying to solve this problem?
        General Goldfein. Yes, ma'am.
        In a--couple of jobs ago, I served as the A3, the Director
    of Operations for a combat command, and we built a fleet of T-
    38As, much older aircraft that were no longer in use in
    Training Command. We currently use those in three locations in
    the United States, in the CONUS [continental U.S.], for
    training the F-22, for exactly what you're talking about,
    because the cost per flying hour is much less and we're able to
    replicate at least a portion of the threat when we fly these
    against them.
        Within our current top-line, we continue to look at
    commercial alternatives while we can contract some of those. We
    do, in some our exercise, already do that. The services do, as
    well. Right now, I know of no initiative that we're looking at
    specifically for Hawaii, but I'll go back and ask and get back
    to you.
        [The information referred to follows:]

        We are pursuing a range of options to satisfy the Hawaii F-22
    Raptor Adversary Air training requirements to include exercises,
    partnerships with the contracting organization at Nellis Air Force
    Base, Nevada, and long term solutions for stationing adversary air
    assets in Hawaii.
        Currently, Sentry Aloha remains the sole and best opportunity to
    meet Hawaii F-22 adversary air training. Sentry Aloha is a large-scale,
    peer-to-peer fighter exercise hosted at Joint Base Pearl Harbor-Hickam.
    The exercise allows Hawaii F-22s to accomplish valuable Dissimilar Air
    Combat Training (DACT) requirements by bringing Air National Guard and
    Active Duty flying units to Hawaii for exercises. It is a mutually
    beneficial enterprise, as visiting units conduct valuable force
    integration and DACT training in world-class airspace and year-long
    favorable weather conditions. The National Guard Bureau supports Sentry
    Aloha with both funding and manpower to run the DACT events.
        We are also working with the 99th Contracting Squadron at Nellis
    Air Force Base, Nevada on avenues to access their contract for
    adversary air, and believe this will be a viable option under Phase II
    of their contract.
        Finally, the T-38 has been researched as a possible adversary air
    solution for Hawaii F-22s, and was deemed financially unviable by Air
    Combat Command. Additionally, there are currently no available T-38
    assets. We continue to explore options for stationing adversary air
    assets in Hawaii should assets become available.

        Senator Hirono. Can you take a look at that?
        General Goldfein. Yes, ma'am.
        Senator Hirono. Because if you can locate some of these T-
    38s in Hickam, for example, that would definitely release the
    F-22s from that particular part of training.
        Admiral Howard, I was happy to see, in your written
    testimony, that you remain committed to improving the
    conditions of our Navy shipyards, of which, of course, Pearl
    Harbor Naval Shipyard is a large facility. Can you elaborate on
    the importance of maintaining our shipyards, including, of
    course, Pearl Harbor Naval Shipyard? Do you believe that the
    funding allocated in the fiscal year 2017 is adequate to meet
    your needs in this area? I know that you've testified that, you
    know, we're really putting aside--postponing the needed repairs
    and upgrades of all of our facilities. That includes the
    shipyard facilities. But, can you just elaborate a bit more on
    whether the fiscal year 2017 budget meets your commitment to
    maintaining our shipyards?
        Admiral Howard. Ma'am, at this point, the budget does
    maintain our commitment to the shipyards. Overall, the amount
    of money we've put into facility sustainment across all of our
    installations is less, and our MILCON [military construction]
    is less. But, we understand the importance of our shipyards. I
    mean, those are the incubators and the lifeblood for us to
    produce ships. We've exceeded a 6 percent investment the last
    few years into the shipyards. We're probably going to hit about
    8.1 percent investment of upgrades in the shipyards. Then, for
    2017, we're at 7.1 percent investment, continuing to upgrade or
    modernize the infrastructure. In a budget where we have fewer
    dollars allocated to infrastructure support, we prioritize the
    shipyards to make sure that they continue to provide us
    excellent work.
        Senator Hirono. I think that, as you focus on issues such
    as the productivity at our shipyards--and, at one time, that
    was an issue at Pearl Harbor, and I would think probably at the
    other shipyards--modernization and just keeping the equipment
    up to par, all of that, totally impacts productivity. Also the
    fact that our ships are out longer when they come back to--for
    repair and maintenance, it takes our workers longer. That
    recognition should be reflected in what you consider
    productivity numbers.
        Another question for General Paxton. You mentioned, in your
    written testimony, that the number of amphibious warship
    vessels required to meet the demands of the combatant
    commanders exceeds 50 vessels. Furthermore, while the minimum
    requirement is 38 vessels, you currently only have 30 in your
    inventory. That's page 16 of your testimony. Can you elaborate
    on what efforts and duties you are unable to perform as a
    result of this inadequate number of vessels? Does the Marine
    Corps have a current plan to increase the number of vessels to
    fulfill necessary requirements and missions?
        General Paxton. Thanks for that question, Senator Hirono.
        Work very closely with my shipmate on my right here,
    because this is a joint problem. The VCNO alluded, earlier in
    her statements, about the overall size of the Navy. Then,
    secondly, she also indicated the pressures of funding the Ohio
    replacement program within the Department of the Navy top-line,
    because this is what actually pressurizes all of the accounts,
    not only the shipbuilding account, which affects amphibs for
    us, but service combatants, destroyers, carriers, everything
    for the Navy, but it also pressurizes our joint aviation top-
    line, too. It--because it's just a big bill.
        To your specific two questions, Senator. Number one is, the
    50 and the 38 are measured against two different metrics. Of
    course, the 50, which both General Dunford and Admiral Greenert
    testified to last year, reflects the steady-state demand signal
    around the world if we were to answer all of those combatant
    commander demands. The 38 reflects the war plans and if we had
    the requirement to take two marine expeditionary brigades and
    move them simultaneously to two major conflicts. Those are the
    metrics that we measure against. The Navy-Marine team agreed,
    several years ago, that if the funding was available, if the
    maintenance of the ships was available, we could handle 34
    amphibious ships, provided they were surge-ready to get to the
    fight. As we both know, we're at 30 today. We have not been
    above 30 for the last 11 years, since 2006. We are interested
    in building more amphibs, given the fiscal constraints that the
    Department operates under. Right now, we have, thanks to the
    good offices of the Congress, the ability to build a 12th LPD,
    and we have a plan to take the 12th LPD and move it into the
    LXR, a common hull form. We have a plan to get better, ma'am,
    but it's contingent on the money.
        Senator Hirono. Everything is contingent on the money. We
    start, first and foremost, by lifting the threat of sequester,
    going forward.
        Considering that all of--everyone who comes to testify
    says, ``Get rid of sequester,'' and you notice we haven't done
    it yet. I would say that that should be a top priority for our
    committees and our subcommittees.
        General Allyn, you mentioned, in your written testimony--
    oh, I'm running out of time.
        Madam Chair, I--perhaps I'll submit some of these questions
    for the record.
        Thank you.
        Senator Ayotte. Thank you, Senator Hirono.
        Senator Shaheen.
        Senator Shaheen. Thank you.
        Thank you, to each of you, for testifying today and for
    what you do every day to ensure the security of this country
    and for your service to America.
        I would like to start talking about energy in the upcoming
    budget, because I am very interested in hearing about the
    efforts to continue to leverage alternative energy use and
    energy efficiency. I think there is a perception in some
    quarters that this is being done in the military because people
    are being told to ``go green.'' Actually, I think it's more
    about our combat effectiveness and how we address our
    vulnerabilities because of our dependence on energy for so much
    of what we do and how we can be more effective using that
    energy. I'm sure that everybody here is very aware of the
    impact in Afghanistan and other conflicts with needing to
    continually convoy energy use--or oil and other resources for
    energy use.
        Can you all update me on what you're thinking as you're
    looking at this upcoming budget, and where you are with energy
    use?
        General Allyn. I'll go ahead and start, give my teammates a
    chance to reflect.
        I'll give you two examples, Senator Shaheen, where this is
    playing out exactly as you described. We did a significant
    amount of work to reduce energy expenditure on our forward
    operating bases in Afghanistan. On those bases where we were
    able to put energy-efficient generators to operate all of our
    facilities, we were able to reduce monthly fuel convoys from
    five to two. Every convoy that stays off the battlefield is one
    less target in a very IED [improvised explosive devices]-rich
    environment. It's about, actually, force protection as much as
    it is about saving fuel expenditure and reducing weight for
    what has to be brought into the theater.
        In terms of what we're doing for future warfighting
    development at our NIE [network integration evaluation]
    exercises out in Fort Bliss, Texas, and White Sands Missile
    Range, New Mexico, we are assessing smart technologies to
    reduce the number of generators it takes to run our mission
    command centers, particularly for our brigade and our battalion
    task force--tactical operations centers. This does many things
    for us. Number one, it reduces the signature for these mission
    command nodes on the battlefield. Number two, it makes these
    entities much more expeditionary. We can reduce from multiple
    airframes to bring them into a combat environment, to a couple
    of airframes. That's substantial over the--a major conflict, in
    terms of strategic lift requirement reduction for the United
    States Air Force and the United States Navy.
        We have already seen huge gains, in terms of smart power
    generation and onboard power generation, where many of our
    medium tactical vehicles, and now some of our--even our small
    tactical vehicles, will have power generation capacity that can
    be outported to run mission command systems and reduce the need
    to even bring trailers and fuel haulers and generators. It's--
    --
        Senator Shaheen. And----
        General Allyn.--it's got great long-term effects.
        Senator Shaheen. Can you speak to the importance of that,
    in terms of readiness for----
        General Allyn. Well, in terms of readiness for the
    combatant commander, if I can deliver a brigade combat team
    with three or four less C-17s, he's able to use those aircraft
    to bring additional capability that he needs. Because it's all
    about--in a no-notice fight, every single piece of equipment is
    prioritized. If you reduce equipment, you enable more capacity
    for a smaller consumption of strategic lift. That is absolutely
    critical to us.
        Senator Shaheen. Admiral Howard?
        Admiral Howard. Senator, thank you for the question.
        For us, energy independence is directly tied to our
    warfighting effectiveness. The Navy has to be completely self-
    sufficient at sea. We carry all the fuel for our conventional
    ships, and then we carry the fuel for the aircraft. The more
    efficient we use fuel at sea means we can stay on station
    longer, it means we have to go alongside another ship less
    times. Every time you're alongside another ship to receive
    fuel, you're not doing your primary mission, whatever it is.
        Then, for us, I once heard a admiral say, years ago, a
    captain of a ship is least important when the ship is in port.
    Mobility is intrinsic to who we are as a Navy. But, then, also
    for us, there are security issues that you're also most
    vulnerable when you're in port. Speed is life. If you're
    static, that's when you're most likely to be a target. An
    ability to be energy independent of host nations is important
    to our warfighting effectiveness.
        For us, we've been doing different things. We've been
    looking at our actual propulsion plans for new design, making
    sure we have hybrid electric drive. We're backfitting a couple
    of our destroyers with hybrid electric drive. Then, when you
    look at our shore infrastructure, when you look at critical
    infrastructure and utilities, it is to our benefit to be energy
    independent as much as we can, even stateside.
        Then, in the end, it helps us be good stewards of the
    taxpayers' money. If we are not paying high utility bills to
    power a ship that's pier-side stateside, that's better use of
    that dollar to something else.
        Thank you for the question, Senator.
        Senator Shaheen. Thank you.
        General, either of you like to comment, as well?
        General Paxton. Very quickly. Thank you, Senator Shaheen.
        Of course, being marines, we're partway between the Army
    and the Navy, here. If I could give you just two more examples,
    though, of the benefits of this.
        General Allyn talked about reducing the number of
    generators, or the size of the generators. When you talk about
    your core marines being expeditionary, that reduces one of the
    five fingerprints of lift. When you look at that cubic foot,
    square foot available space on the ships, then we take less.
    That means we can put more on the ship, so we become more agile
    and mobile, out moving around the seaspace and the battlespace.
        The second one that General Allyn alluded to was in terms
    of fuel consumption, too. As you know, with our O&M [operations
    and maintenance] dollars, we pay to train. We now have the
    capability to meter vehicles, and you can figure out at what
    point the idling is no good and it's time to shut it down, and
    the fuel consumption is actually better then, and you figure
    out when you start it back up, as opposed to having a marine or
    a soldier let it idle too long. That saves money, which allows
    us to train longer and get more bang for the buck out of the
    training dollar.
        Thank you, ma'am.
        Senator Shaheen. Perhaps you should share that information
    with the vehicle fleets that the government maintains,
    because--the rest of government--because I think that's--we
    have a--awful lot of idling vehicles out front.
        General? Just to finish up.
        General Goldfein. Ma'am, very quickly. I'll just give you
    one example.
        In the business of remotely piloted aircraft intelligence,
    you've got to simultaneously have access to assured energy for
    the aircraft that are flying overhead that bounce off the
    satellite to go back to command and control, that go into the
    process exploitation dissemination. Part of what we're working
    with, with an energy task force, is to ensure that we have
    uninterrupted access to that energy and electricity so we don't
    have mission failure, which impacts readiness, based on
    vulnerability to cyberattack. That's where we're putting a lot
    of our effort.
        Senator Shaheen. Thank you.
        Senator Ayotte. Thank you, Senator Shaheen.
        Admiral Howard, I wanted to follow up an issue that you and
    I had talked about in my office, but one of the things that the
    workers at the Portsmouth Naval Shipyard do is, they're often
    deployed to share their expertise at other shipyards to help
    make sure that we've got good maintenance and we're all working
    together. One of the issues that we put in the 2016 NDAA was a
    concern that the new long-term TDY [temporary duty] policy may
    be discouraging excellent, excellent workers from going to
    other shipyards because of the cost of it and also, you know,
    putting a burden on them that doesn't allow them to stay
    similarly situated if they had stayed homeside. This is
    something that I'm worried about--just worried about, because
    I--we want to share our expertise. Our shipyard workers do a
    great job with this. I know Admiral Hilarides has raised some
    issues about this, as well. I just wanted to say, is this
    something that you can look at to make sure that these concerns
    are addressed?
        Admiral Howard. Yes, ma'am, absolutely.
        Admiral Hilarides' concerns have now reached the Department
    of Navy secretariat, and then we'll be looking more deeply into
    it and forwarding a recommendation to OSD [Office of the
    Secretary of Defense].
        There's a couple more aspects I think we need to think
    about. One, the policy was created to help save money----
        Senator Ayotte. Right.
        Admiral Howard.--and to help all of us be good stewards of
    the taxpayers' money. In the end, unless we have volunteers, we
    can only compel shipyard workers to spend a certain amount of
    time TAD [temporary additional duty], so we may end up--as they
    reach the end of that 4-week cycle, we may have more turnover
    than we like. Then we end up----
        Senator Ayotte. Would cost us more money, right?
        Admiral Howard. It ends up--in the end, the policy may be
    costing us more money. We are working through to get those
    details with NAVSEA [Naval Sea Systems Command]. Obviously, a
    policy that had exactly the opposite effect is not one we
    should stay committed to.
        But, there's another principle here that we need to think
    about. One is the commitment to these artisans and their
    skillsets----
        Senator Ayotte. Right.
        Admiral Howard.--and that, as a government, we should be
    providing just compensation to our people. If it's true that,
    based off the per diem rates and then the actuality of the
    functioning of how we have these people working, they are
    paying money out of their pocket, then that sort of violates
    many principles of----
        Senator Ayotte. Right.
        Admiral Howard.--leadership and government. We are working
    with NAVSEA to get to the facts of what's going on, and then we
    can make a good recommendation to OSD.
        Senator Ayotte. Well, we really appreciate your
    consideration and really careful view of this, because--I just
    want to say, for the shipyard workers at the Portsmouth Naval
    Shipyard, I know they want to go and help the other shipyards.
    We just want to make sure that they're treated fairly and are
    able to do that. I appreciate your looking at this policy.
    Thank you.
        General Goldfein, I wanted to ask you, How are the A-10s
    performing in--against ISIL? The Secretary of Defense has said
    they've been performing superbly. How are they doing?
        General Goldfein. Superbly, yes, ma'am. I would align with
    that.
        Senator Ayotte. Okay, appreciate it.
        I wanted to follow up--I--on the maintenance issue that was
    raised earlier. The Air Force told Congress that it had had to
    place A-10s on XJ or set-aside status to free up maintenance
    personnel moved to the F-35. I think this may have been raised
    earlier in the hearing. You've discussed the maintenance
    shortfall in your prepared testimony. Yet, my office has
    learned that at least five A-10 crew chiefs from Davis-Monthan
    have--were not moved to the F-35, but, rather, to the Azores to
    conduct basic aircraft transient alert activities that can be
    done by any maintenance personnel. Are you aware of this? If
    not, can you look into it for me?
        General Goldfein. I'm not, and I will. Yes, ma'am.
        Senator Ayotte. I appreciate it. Because I want to make
    sure that, if this is the claim on the maintenance personnel,
    that it is--that we're maximizing and properly using the
    maintenance personnel. I want to know, for the record, that the
    Air Force has told our office previously that it couldn't use
    contractors to solve a short-term maintenance shortfall. But, I
    know, in this budget request, it will--the request will fund
    contractor maintenance personnel to fill gaps at select
    noncombat A-10, F-16, and C-130 units, following our Active
    Duty maintainers to transition to the F-35. I've gotten
    different stories on the maintenance issue. One thing I would
    appreciate, overall, is if you could provide my office--since
    the claim is that we need the A-10s maintainers to assist the
    F-35, I'd like to know a--what's happening with the A-10
    maintenance personnel, and to have a list of the last 2 years
    of where they're moving and how they're performing.
        [The information referred to follows:]

        The Air Force has an overall shortfall of 4,000 aircraft
    maintainers, to include legacy and F-35 requirements. This shortfall
    widely impacts the experience level of maintainers as well as aircrew
    mission readiness levels across all Combat Air Forces (CAF) platforms.
    New accessions require five to seven years to become fully qualified
    aircraft maintainers. In addition to the F-35 Initial Operational
    Capability manpower requirements, there are key legacy (i.e., F-16, F-
    15 and A-10) maintenance manpower requirements that need to be
    addressed to maintain experience levels and readiness.
        As a result of the conversion of 18 A-10s to Backup Aircraft
    Inventory (BAI) status in fiscal year 2015, the Air Force retrained 110
    A-10/U-2 crew chiefs and 30 A-10/U-2 avionics technicians to F-35
    units. These 140 personnel were assigned to Nellis, Hill, Eglin, Luke
    and Edwards Air Force Bases. Below is a breakdown of the locations they
    were assigned:

                               F-35 crew chiefs     F-35 avionics (total =
                                (total = 110):       30):
                                 Nellis--8            Nellis--3
                                 Hill--58             Hill--11
                                 Eglin--12            Eglin--6
                                 Luke--26             Luke--8
                                 Edwards--6           Edwards--2

        Over the last 6 overseas assignment cycles (2 years), the Air Force
    Personnel Center assigned two 2A353E (A-10/U-2 crew chiefs) to Kadena,
    and one to Lajes to support A-10 Transient Alert missions for a total
    of three personnel. Kadena and Lajes Transient alert operations support
    enroute aircraft deployment requirements, including A-10s that deploy
    overseas, so these individuals are still working on the A-10. All of
    the remaining 321 2A3X3E personnel remained at A-10/U-2 units to
    sustain continued operations on those platforms. Note: The A-10 and U-2
    share the same Air Force Specialty Code (AFSC) at the 3/5-level.
        As for 2A3X4A (A-10/U-2 avionics), no A-10 maintainers were
    reassigned except between A-10/U-2 units. A-10 units include: Osan,
    Moody, Davis-Monthan, Nellis, and Whiteman (Active Associate Unit); U-2
    units include: Beale and Osan.
        In response to your contract maintenance question; the Air Force
    could not implement contract maintenance during the fall of 2014 and
    move approximately 500 Active Duty maintainers to Hill AFB in 2015 in
    time to meet F-35 IOC requirements by August 2016. However, over the
    next three years, the Air Force will implement contract maintenance
    initiatives from 2017-2020 to support F-35 bed-down requirements until
    Active Duty end strength and maintenance accessions fill the 4,000
    maintainer shortfall to meet Air Force manning and experience
    requirements. Readiness levels across the CAF are dependent on
    addressing total manning and experience requirements.

        Senator Ayotte. My concern about the A-10 continues to--and
    I think it's exemplified by the letter that I received from
    other TACP [Tactical Air Control Party] Association that
    represents roughly 1300 Active Duty, Air National Guard, and
    Reserve JTACs [Joint Terminal Attack Controller] and 2,000
    former JTACs who have written me and said, ``We believe F-15s,
    F-16s, and B-1s cannot replicate the CAS [close air support]
    capabilities of the A-10. We know from combat experience that
    the elimination of the A-10 before a viable replacement
    achieves full operational capability will cost American
    lives.'' That's been my focus from the beginning, and my
    concern about this particular platform.
        I do also--you and I have gone round and round about this--
    but, I also want to follow up on the wing issue that you and I
    have talked about. As I understand it right now, that, under
    the current plan, if there's not a reprogramming request
    submitted for A-10 wings, that 13 A-10s will be grounded in
    2018 due to the need for new enhanced wing assemblies. Part of
    it is, they're being used right now, right, a lot against the
    fight against ISIL? Is that--is my understanding correct for
    that? Am I right to say that, for the record, without a
    reprogramming request for additional action, not only the 13
    retired in fiscal year 2018, the Air Force will--also told me
    that 28 A-10s would be grounded in 2019, 42 in 2020, and 47 in
    2021. Is that true?
        General Goldfein. Partially, ma'am. The aircraft in 2018
    are actually going to be grounded, but the--even if we were
    able to buy new wings, those wings won't show up until 2019, so
    they actually will not affect the 2018 numbers that will be
    grounded. Our plan right now is to take those out of the BAI
    [Backup Aircraft Inventory] aircraft so it won't affect,
    actually, those combat-coded aircrafts that we send forward to
    a combatant commander, so we'll manage those 10 in 2018. The
    wings, if, in fact, we come forward and are approved for a
    above-threshold reprogramming by the committees that approve
    that, if that's approved and the Secretary comes through with
    that, those wings will start showing up in 2019. That's when
    they'll start being refitted.
        Senator Ayotte. Well, I--and I would--as you and I have
    talked about, I would urge the Secretary to come forward,
    because obviously time is of the essence. We know that this
    platform is working well against ISIL. I really would
    appreciate the Secretary--and I know that Chairman McCain
    shares my concerns about this.
        Thank you.
        I would like to call on Senator Kaine.
        Senator Kaine. Thank you.
        Admiral Howard, we talked a bit in my office about an issue
    that's related to the workforce issue that Chairwoman Ayotte
    was discussing. We are going to have a shipyard workforce
    hearing in this subcommittee in early April, so I don't need to
    go into it in depth, but I just wanted to focus on it for a
    second.
        The shipyard workforce is public shipyards who do repairs,
    private shipyards who do construction and repairs, and in many
    different locations around the country. Now we also do some
    significant ship repairs in foreign countries when our ships
    are posted there; in Spain, for example, I know at Rota we do
    some repairs. One of the concerns that I'm hearing from my
    ship-repair community, private ship-repair community in Hampton
    Roads, is kind of the challenge they have sort of knowing
    what's coming down the pike. Now, some of that is on us,
    Congress. Budgetary certainty is a significant generator of
    uncertainties. But, they also feel like they don't really know
    who to go to, to try to find out what the likely future
    schedule is. If we--if we're balancing work between public
    shipyards, private shipyards, and some shipyards overseas, and
    some of the way we balance it is, in the public shipyards, by
    moving people around, then the private ship-repair community
    often feels like they're the last ones to know, and it creates
    challenges with them having to staff up, layoff, some people
    move to other areas. Then there's a kind of a surge. We need
    more, and it's more difficult to staff up.
        One of the issues I'd kind of like to dig into, and I would
    just like any general thoughts you have about, Are there points
    of contact that would be better for the industry to be able to
    kind of reach out to, to get some sense of how this work will
    be apportioned and allocated down the road? Again, we have to
    own our portion of it on the budget-certainty side, but I'd
    love to have you talk about that for a bit, and then we'll dig
    into it more in early April.
        Admiral Howard. Senator, thank you for the opportunity.
        In particular, this last year, when the issue was brought
    up, NAVSEA and fleet went into dialogue with the private
    shipyards, and one of the things that--we tend to look at the
    schedules in terms of producing operational ships, but then
    there generally is some fungibility in the schedule. They were
    able to work with the private yards and move the start of when
    some of those availabilities would be, and then that allows the
    private yards to get more long-term endurance, in terms of the
    number of workers they need to employ.
        I think, one, we need to continue that dialogue with NAVSEA
    and the fleet and the private yards, not just in our fleet
    concentration areas, but, in some cases, in other areas where
    we more rarely use them. But, it's the same sort of thought
    process, allowing them to understand what our schedules are
    going to be and then working through so that they can more
    optimally support us.
        Then, for us, our type commander, Vice Admiral Rowden, has
    started to take this on, because there is a Navy portion to
    this, in terms of the planning and getting to a better
    definitized of what the repairs need to be before we even send
    a proposal out for everybody to bid on. I will, right now,
    commit to working with the fleet, NAVSEA, and Admiral Rowden in
    making sure that one of them says, ``I want to be the
    integrator of all of this,'' and continue this dialogue and
    make sure that the folks who are helping us keep our ships
    going are also optimized. Because, in the end, that's probably
    going to cost us less money. If they're not having to hire and
    fire, then that means the continuity will help us get to the
    best return on investment.
        Thank you, Senator.
        Senator Kaine. Thank you all for your testimony.
        Senator Ayotte. Senator Shaheen.
        Senator Shaheen. Thank you.
        I wanted to follow up on the discussion about the
    shipyards, because obviously, like Senator Ayotte, I share an
    interest in the Portsmouth Naval Shipyard. I was very pleased,
    Admiral Howard, to hear your commitment to the Shipyard
    Modernization Program, and very pleased to be see that the
    President put in even more than the 6-percent target in this
    budget. I hope that we can continue to ensure that we make the
    investment, the capital investment that we need to make in our
    shipyards, and appreciate your commitment to that.
        I want to also follow up on the question that Senator
    Ayotte raised about the travel regulations. Because one of the
    things that I have heard from shipyard workers is that many of
    the people who are--who have been there the longest, who have
    the highest skills, are some of the people who find the new
    regulations the most difficult. When I have people say to me
    that, on the per diem that they get under the new regulations,
    that they can't afford to go out for dinner, and they--because
    they're working such long hours, it's really hard to cook in
    the facilities that they're in. I think that creates a real
    challenge for people. I appreciate your willingness to look at
    this issue and also your recognition that it's really the
    skills of our employees who make such a difference, and that it
    could have the ironic impact of actually costing us more money
    than saving money. Thank you. I hope you'll be willing to let
    us know soon what NAVSEA sees with respect to the information
    around what we're seeing with those travel regulations.
        Admiral Howard. Yes, ma'am. I'll make sure we get you
    feedback.
        Senator Shaheen. I wanted to ask one other question. That
    has to do with the 2014 NDAA that we passed that says that it's
    DOD policy to eliminate the fielding of service-specific combat
    uniforms so that we adopt and field a common combat uniform for
    all members of the Armed Services. Can anyone tell me what the
    status is of the effort to have our Military Services working
    together on joint clothing and combat--joint combat uniform?
    Because, as we think about where are areas that we can
    cooperate and save money, it seems to me that this is one.
        I appreciate everyone's interest in being identified as--
    with their branch in the military, but it seems to me, when
    we're talking about combat uniforms, since, before 2002,
    everybody wore the same combat uniforms, that it's--we should
    think about whether that policy should be changed. I don't know
    if anybody wants to comment on that.
        General Goldfein. Ma'am, I'll jump on that one. We meet
    routinely on all issues relative to, really, personnel actions,
    whether force of the future or women in service, all those kind
    of things. I won't speak for all of us, but I will tell you,
    this issue hasn't come up in the last 6 months, in terms of any
    of the dialogues we're having. However, you know, we have been
    operating in a single combat uniform deployed in the OCPs
    [Operational Camouflage Patterns], and all of us tend to wear
    that same uniform, and then we change the tape, you know, that
    actually has our service on it. We went to that, some years
    ago. As far as any of the dialogues we've been in, I've not--
    that has--topic has not come up.
        General Allyn. I'll just add one point to leverage on the--
    continuing to use the OCP. That's the uniform we're going to as
    we transition away from the Army combat uniform. We're going to
    the combat variant that we're using so that we save resources
    and don't create a new requirement. We're trying to leverage
    all of the contingency stocks that we have purchased to ensure
    that, as we go forward, we're being good stewards of the
    resources you provide us.
        Senator Shaheen. General Paxton?
        General Paxton. Yeah, thanks, Senator Shaheen.
        The question did come up. I don't believe it was last year.
    I believe it was the year before, when we discussed it. Last--
    --
        Senator Shaheen. Yes. 2014.
        General Paxton. Then last year, we did take it for a
    question in the House. I know the concern of the committee and,
    rightfully so, the American taxpayer is not excess money. There
    is a commitment among the four of us and all four services to
    always share our RDT&E [research, development, test, and
    evaluation]. If we figure out that, in a pixilated pattern,
    where if, in a uniform, itself, that there is a best practice
    there, we'll share that with each other.
        The way I recall this when we left it, 2 years ago, was
    that we had all--we were freeze-framed in our current plan
    right now, and there was an obligation to continue to share
    that information, because I thought the sense of the committee
    and the sense of the Congress was not to invest further R&D
    [research and development] money in that. I know, in the case
    of the--particularly the Marine Corps, we had two uniforms that
    we developed, a woodland pattern and a desert pattern, that
    were actually developed pre-9/11, and that's what we've
    continued to use for the entirety of the last 14 years. I know
    some of the pattern that we have, even though it is trademarked
    and patent-righted, and it was when we did this, we share it
    with Special Operations units, and they strip off the Marine
    things and put on--as General Goldfein said, they put on their
    own identification and patches like that. There is a high
    degree of sharing, here. I thought the commitment was not to
    expend R&D monies in the future without sharing best practices,
    ma'am.
        Senator Shaheen. I don't know, Admiral, do you want to
    comment on this?
        Admiral Howard. Ma'am, the Navy and Marine Corps have been
    together a long time. When we put our corpsmen in docks with
    the marines, as long as they pass the PFT test, they're allowed
    to wear the Marine Corps uniform. We've been saving money that
    way. We do have our own camouflage, but we have not been
    looking at a new camouflage uniform, so this has not come up.
        Senator Shaheen. You think things are progressing, then, in
    the way that the 2014 NDAA legislation envisioned? Is that what
    I'm hearing everybody say?
        General Paxton. Yeah. I mean, again, Senator, it hasn't
    come up in 2 years. I thought we understood the legislation. We
    were all compliant with the paths that we were taking, and it
    was just an issue of no further investments. But, you know,
    happy to take that for the record and go back and make sure we
    understand exactly what the obligations were in the language,
    Senator.
        Senator Shaheen. I guess my understanding was a little bit
    different, so that would be helpful. We can submit a question
    for the record, if that's helpful to everybody.
        Admiral Howard. Yes, ma'am, it is. Thank you.
        Senator Shaheen. Thank you all.
        [The information referred to can be found in the Questions
    for the Record portion of this transcript.]
        Senator Ayotte. Thank you, Senator Shaheen.
        I do have a couple of brief followups, and they relate to
    end strength.
        I want to--obviously, you all can weigh in on it, but
    particularly, General Allyn, General Paxton, as we think about
    our ground forces--would like to ask you, General Allyn, where
    our Army size is right now. How many of those men and women in
    uniform who have served or deployed combat missions on our
    behalf are receiving involuntary separations? What are--as we
    look at the potential for--if we were called to a major
    conflict, what our capacity is. I would like to, obviously, get
    General Paxton to comment on the Marine Corps, as well, because
    I think it's important for people to understand where we are,
    vis-a-vis the size of our force, the force structure, versus
    what we really need for size of force.
        General Allyn?
        General Allyn. Thank you, Madam Chair.
        The--to your first point, the size of our Army today is
    about 1.03 million in the Total Force. We're headed in this
    program toward a----
        Senator Ayotte. What's the Active Duty component of that?
        General Allyn. We are at about 482 today, headed to 475,000
    by the end of this fiscal year, and toward a program force of
    450,00 in the Active Force. As I mentioned, with 186,000
    deployed on a daily basis in 140 countries, you understand my
    discomfort with trying to continue to meet emergent demands and
    current operations with a force that is getting smaller, and
    what that means, in terms of our ability to build surge
    capacity in a time when the contingencies are becoming ever
    more real as we face them.
        We have done a number of things internally to try to
    address that risk. We've gone to a sustainable readiness model,
    a goal of which is to deliver two-thirds of our force ready at
    any moment in time for an unforeseen contingency. Frankly, at a
    980,000-soldier Total Force, that's the only way that we can
    make the math work for a major contingency against a peer
    competitor. We're sitting at about a third of the Total Force
    ready today sufficiently for combined-arms maneuver against a
    near-peer competitor.
        It's not where we need it to be, and I am absolutely
    uncomfortable with a force that gets smaller as the demands for
    our forces continue to grow and the contingency requirements
    escalate in multiple theaters around the globe.
        Senator Ayotte. How many are--I know this isn't of your
    desire to do this, so--how many of our men and women who have
    deployed--and I know--understand many of them deployed more
    than once--are receiving involuntary separations as we downsize
    the force, even though it's not consistent with what we need to
    do to defend the Nation?
        General Allyn. I apologize, Senator Ayotte, for not
    answering that part of your question.
        The bottom line is, if we continue on the path toward a
    program force, we will have to involuntarily separate another
    14,000 soldiers, 10,000 of which are officers. On this last
    round of involuntary reductions, over 50 percent of those that
    we were asking to separate involuntarily had two or more combat
    deployments. These are all soldiers that have answered the call
    of the Nation, they have served admirably, and, because of the
    program force structure, we must separate them. It's not
    something we want to do. Frankly, we're doing everything that
    we can to ensure, through our Soldier for Life Program, that
    we're providing them a seamless transition. We're also ensuring
    that our Army Reserve and our National Guard leadership have
    the first shot at accepting these seasoned soldiers into their
    ranks. Frankly, it has really helped our Reserve component save
    dollars by taking experienced soldiers into the ranks and not
    having to retrain them. That has been a positive benefit of
    this unfortunate drawdown. But, it's still a situation that we
    should not find ourselves in.
        Senator Ayotte. Right. I would say that this is one where I
    really am concerned that we're not keeping faith with them, if
    they have deployed multiple times and we're going to give them
    an involuntary separation. I hope that's something we think
    about. But, also, the threats we face, given what we need to
    do.
        General Paxton, I wanted to get your thought on this, as
    well. Because we've talked about it in prior hearings. We used
    to build for two conflicts, right? Then we went down to a one-
    and-a-half-conflict strategy. As I understand where we are now,
    if we got called to one major conflict, we're all-in. Can you
    help us understand that, from the ground perspective? I know we
    have naval and Air Force issues, as well, but in terms of the
    first in for us.
        General Paxton. Thank you, Madam Chair.
        I'll try and work in reverse, given your last question. We
    were originally, many years ago, a two-MCO [Marine Corps order]
    force, and then we reduced from there, and we are now at a--in
    a--defeat-deny is the strategy. The DSG [deployment support
    group] has not changed since 2012. I think the shared concern
    of the members here in the committee is, if you're all-in on
    the defeat piece, what is left for the deny somewhere else. If
    the deny grows exponentially, we may not have the indications
    and warnings we need for lead time, we may not have the
    strategic lift by sea or air. We may not have the--either the
    capability or the capacity to respond in time to keep the other
    one in either deny or impose costs. As we are commonly wont to
    say, capacity has a quality all its own.
        To your original questions, Senator Ayotte, if I may, the
    Marine Corps at peak strength was 202,000. We knew, when we
    were asked for that authorization, that that was only going to
    be a 3- or 4-year authorization. This was pre-sequestration. We
    are--we have done three specific studies on optimal end
    strength of the Marine Corps. All three of those were completed
    before Senator Kaine's point about--this was pre-ISIL, pre-
    Ukraine, pre-South China Sea, pre-cyber, pre-Snowden----
        Senator Ayotte. Pre-all of the obvious----
        General Paxton.--pre-all of that.
        Senator Ayotte.--threats we face.
        General Paxton. As we came down from 202, Senator, we knew
    that the optimal strength of the Marine Corps was supposed to
    be 186-8. We are, today, en route to 182,000 by the end of this
    fiscal year. We are below where we would optimally like to be.
    Again, that study was based on previous--unknown previous
    conditions.
        To your second point, we have not had to involuntarily
    separate anyone. We would obviously prefer not to break faith.
    I know the challenges that the larger and the other services
    have there. We continue to have, you know, 66 percent of the
    force on the first-term enlistment. It's a fairly young force.
    Most of them come in for 4 to 6 years, and then they separate.
    Our challenges are a little different.
        We do worry, as I said earlier, under question, about the--
    some of the critical skills, Special Operations, cyber
    operations, pilots, and how we retain them.
        Then, ma'am, just as an indicator, the combat capability
    that we have lost going below 186/8--when we went from 202 to
    186/8 to 182--we have lost three infantry battalions, six towed
    artillery companies--excuse me--batteries. Three battalions,
    six batteries, four tank companies, and five AAV [assault
    amphibious vehicle] companies. That's conventional capacity
    that we have offered up because we had to pay for cyber, for
    space, for nuke, for third offset strategy, and those things
    that we know are national priorities. But, that has been the
    trade space, in terms of conventional capability.
        Thank you.
        Senator Ayotte. I want to thank all of you for being here.
    I want to thank you for your leadership and important positions
    of defending our country and serving our country with such
    distinction. I want to thank all of the men and women who serve
    underneath you for the incredible work that they do making us
    proud every day and defending our Nation, and especially what
    we've learned today with the gaps in capabilities that we have.
    This is a real issue for us, and I really appreciate your
    coming forward and testifying. Thank you for being here.
        [Whereupon, at 11:56 a.m., the hearing was adjourned.]

        [Questions for the record with answers supplied follow:]

                  Questions Submitted by Senator Kelly Ayotte
                            close air support report
        Senator Ayotte. Section 142 of the fiscal year 2016 NDAA requires
    the Air Force to submit to Congress no later than September 31, 2016,
    an independent and detailed assessment of the required aircraft
    capabilities to replace the A-10.

        1. General Goldfein, what is the status of the independent
    assessment required by the fiscal year 2016 NDAA?
        General Goldfein. The RAND Corporation is supporting this
    independent assessment, which will include direct and detailed
    responses to Fiscal Year 2016 National Defense Authorization Act
    language. While it is too early to provide any specific findings or
    recommendations, we expect to deliver this report to Congress on time.
                            a-10 versus f-35 fly off
        2. Senator Ayotte. General Goldfein, does the Air Force support the
    Director of Test and Evaluation's (DOTE) plans to conduct a CAS fly-off
    between the F-35A and the A-10 to ensure there is no degradation in CAS
    capability for our ground troops?
        General Goldfein. The Air Force fully supports the Director of Test
    and Evaluation's efforts to validate the operational effectiveness of
    the F-35A through a robust and rigorous Initial Operational Test and
    Evaluation period at the end of the System Development and
    Demonstration phase of the baseline program. These efforts, to include
    comparative testing of the F-35A's operational capabilities, will help
    ensure the air system will be able to successfully accomplish the
    required mission sets in the expected range of combat conditions.
                        time at home between deployments
        3. Senator Ayotte. General Allyn and General Paxton. What type of
    Army and Marine Corps units have the least time at home between
    deployments?
        General Allyn. High operational tempo is one of the greatest
    challenges to the Army's ability to recover the readiness needed to
    meet contingency requirements. The types of units most affected by high
    operational tempo and that spend the least amount of time at Home
    Station are Division Headquarters, Combat Aviation Brigades, Patriot
    Battalions, and Brigade Combat Teams.
        General Paxton. Since the conclusion of Operation Enduring Freedom,
    USMC forces have been reconstituting and regenerating readiness with
    positive results. However, Operations Freedom Sentinel and Inherent
    Resolve continue to levy significant demand across our human
    intelligence (HUMINT), signals intelligence (SIGINT), communications,
    and tactical aviation (TACAIR) capabilities.
        Although the Marine Corps' TACAIR Deployment-to-Dwell (D2D) ratio
    has improved over the past year from 1:1.7 to 1:1.8, stress on both
    airframes and personnel continues. The personnel operating tempo for
    TACAIR (F/A-18 and AV-8B) and Aerial Refueling (KC-130) maintenance
    personnel has reached levels similar to that experienced by the SIGINT,
    HUMINT, and communications communities; as low as 1:1.5 for select
    MOS's.
        CMC has implemented measured and deliberate actions to further
    reconstitution and readiness recovery (i.e. MV-22/KC-130 forward
    presence decreases and reductions in VMFA flight line entitlements from
    12 to 10) while ensuring combat effectiveness is not compromised in the
    process. Additionally, modification to the fiscal year 2017 Global
    Force Management Allocation Plan will further assist in managing
    stressed communities across the force and provide a baseline for fiscal
    year 2018 Global Force Management sourcing actions.

        4. Senator Ayotte. What is their current dwell time between
    deployments?
        General Allyn. Currently, Regular Army forces are not meeting the
    1:3 deploy:dwell ratio goal. Most affected by this are: Division
    Headquarters at 1:1, Combat Aviation Brigades at 1:1.7, Patriot
    Battalions and Brigade Combat Teams are less than 1:2. These rotation
    ratios exclude forces assigned to combatant commanders. The continuing
    high operational demands for Army Forces from a shrinking Army is
    driving us to not meet the desired deploy:dwell ratio goals.
        General Paxton. The average dwell time for units across the Active
    Component (AC) is 1:1.9. As I indicated in my written statement and in
    my answer to your previous question, some communities and specific
    occupational specialties are deploying at faster rates.
        Our ideal deployment to dwell (D2D) ratio is 1:3, which means a
    deployment of 7 months is followed by 21 months of time at home
    station. That home station time is required for the unit to conduct
    personnel turnover, equipment reset and maintenance, and complete a
    comprehensive individual, collective, and unit training program across
    all their mission essential tasks (METs) prior to deploying again.
    Today this timeline is challenged by the increased maintenance
    requirements of aging equipment, shortages in the availability of ships
    with which to conduct amphibious training, ensuring personnel fills are
    in place on time, and other factors to include school seats, training
    range availability and even weather.
        Those challenges are compounded by the increasing demands on
    today's force, which have many of our units and capabilities deploying
    with a 1:2 D2D ratio, which translates to one third less home station
    training time than we would prefer. This challenges the ability of our
    units train to their full list of core missions and degrades our home
    station crisis response capability.
                              air force munitions
        Senator Ayotte. DOD has said that the Pentagon is starting to run
    low on smart bombs and guided missiles. Consequently, this year's
    budget request includes $1.8 billion for munitions.

        5. General Goldfein, can you discuss any potential munitions
    shortage?
        General Goldfein. The ongoing operations against ISIS are expending
    many more weapons than planned for a contingency operation.
    Consequently, some direct attack smart munitions and Air-to-Ground
    missiles (Hellfire) have current and forecasted inventory shortfalls.
    Mitigating these shortfalls will not begin to occur until fiscal year
    2018 (FY18). Reprogramming actions and resources in the fiscal year
    2016 and fiscal year 2017 budgets will replenish current operations
    expenditures, but do not address meeting the inventory objective.

        6. Senator Ayotte. General Goldfein, to what extent are coalition
    partners in the fight against ISIS helping to fund the munitions that
    the U.S. Air Force is expending in the air campaign against ISIS?
        General Goldfein. The coalition partners are not helping to fund
    the munitions the Air Force is expending in the air campaign against
    ISIS.

        7. Senator Ayotte. General Goldfein, to what extent are weapons
    shortages affecting prepositioned munitions inventories, and
    consequently readiness to address other potential conflicts around the
    globe?
        General Goldfein. The increased expenditures of certain munitions,
    along with known budgetary constraints since the August 2014 start of
    Operation Inherent Resolve (OIR) have resulted in reallocation of some
    munitions stocks from pre- and forward-positioned locations to the
    point of need. Replenishment of those stocks will occur through
    existing Air Force munitions prioritization and positioning
    governances.
        The Air Force is below its inventory objective for almost all
    Precision Guided Munitions (PGMs). Due to low inventory numbers,
    Hellfire and laser Joint Direct Attack Munitions are only available for
    the U.S. Central Command Area of Responsibility. The Air Force is able
    to meet the OIR requirement in the near term but inventory levels for
    PGMs will continue to decline until new production increases.
        national commission on the future of the army--army duplication?
        Senator Ayotte. On January 28th of this year, the National
    Commission of the Future of the Army delivered its report to Congress,
    which was an effort driven by the fiscal year 2015 National Defense
    Authorization Act.
        While there were dozens of recommendations made by the Commission,
    Recommendation 39 states that the Secretary of the Army should
    consolidate marketing functions under the authority of the Army
    Marketing Research Group (AMRG). The function currently resides in the
    Army Recruiting Command.

        8. General Allyn, why, unlike other services, does the Army have
    two different directorates, which are at two different physical
    locations, in charge of branding, recruiting and marketing the Army?
        General Allyn. The Assistant Secretary of the Army for Manpower and
    Reserve Affairs, through the Army Marketing and Research Group (AMRG),
    is responsible for the Army Brand and the Army's national marketing
    program. AMRG activities support Regular Army and Army Reserve
    recruiting activities for officer, enlisted, and civilians; U.S. Army
    Recruiting Command is responsible for Regular Army and Army Reserve
    enlisted, warrant officer, and officer candidate recruiting.
        Marketing and recruiting are separate functions, and, per best
    business practice, marketing is an executive (Headquarters, Department
    of the Army) function. For the Army, marketing is the means by which we
    communicate to, connect with, and engage our target audiences to convey
    the value of the Army. Successful marketing builds advocacy, dispels
    misperceptions, increases willingness to support and propensity to
    join, and sets the conditions for recruiting success. This approach of
    separating marketing from recruiting enables the Army to better
    maintain a unified Army Brand that underpins outreach to future
    soldiers and officers for the Active Army and the U.S. Army Reserves.
    The National Guard Bureau is currently responsible for all National
    Guard marketing; the National Commission on the Future of the Army
    Recommendation 39 concludes that, to the maximum extent feasible, the
    Army's marketing function should be managed as one Army. If approved,
    this legislative change would further unify the marketing of the Army
    brand by giving the Secretary of the Army responsibility for Army
    National Guard marketing as well.
                             port security barriers
        9. Senator Ayotte. Admiral Howard, what action is the Navy taking
    to resolve the vulnerability of the inadequate Port Security Barriers
    (PSBs) in use to protect our national Fleet assets?
        Admiral Howard. Waterside security barriers were deployed by the
    U.S. Navy in response to the October 2000 USS Cole terrorist bombing.
    The first waterside security barriers deployed were the commercially
    available Dunlop Boat Barriers developed by Dunlop GRG Holdings,
    Trelleborg, Sweden. In order to eliminate both vulnerability and
    reliability issues with this system the current Navy Port Security
    Barrier (PSB) was designed and fielded beginning in 2003.
        The Navy's PSB was designed to defeat a wide range of small craft
    threats and has performed well for more than a decade. In 2008 the
    Assistant Secretary of the Navy for Research, Development, and
    Acquisition (ASN-RDA) recognized the Navy design team for developing an
    improved PSB which met operational capability requirements while
    reducing both acquisition and sustainment costs.
        Naval Facilities Engineering and Expeditionary Warfare Center
    (NAVFAC EXWC) has continually used lessons learned to modify the PSB
    design in order to improve operational capability and reduce life-cycle
    costs. Examples of these efforts include:

          Switching from steel to composite materials to reduce
    maintenance costs and extend service life
          Changing the barrier gate latch from a machined stainless
    steel design to a simpler and more robust chain latch design
          Changing primary barrier connection from a pinned design
    to a bolted flange design that reduces life-cycle costs
          Following industry's lead to replace wire rope mooring
    components with synthetic line to improve service life
          Use of improved materials for `heavy wear' components in
    high energy environments to improve service life and reduce cost
          Use of a more capable capture net to improve high speed
    vessel stopping capability
          Extension of service life for capture nets to reduce
    replacement costs
          Use of new metal coatings to improve service life and
    reduce costs
          Use of anti-wetting coating to prevent ice adhesion to
    improve performance in icing conditions

        In addition to continuing efforts to implement system improvements
    based on lessons learned, the Navy is aggressively looking for new
    water barrier system designs/technologies that are capable of providing
    increased levels of protection and reduce annual sustainment and
    operating costs.

        10. Senator Ayotte. Admiral Howard, in terms of force protection,
    what is the difference between the PSBs the Navy is currently utilizing
    and PSBs commercially available? Please provide a detailed plan to
    close the gap between the two.
        Admiral Howard. After conducting a worldwide market study of
    waterside security barriers, the Navy selected seven waterside security
    barrier offerings to test in an operational environment under mission
    conditions. Although industry changes in designs and materials used by
    private ventures increased the options available as compared to when
    the PSB was first fielded, the majority of the designs were very
    similar or licensed copies of the PSB system currently used by the
    Navy.
        One notable exception was the HALO Maritime Defense System. This
    system is essentially a floating double wall that utilizes surrounding
    water to absorb the force of local impacts and environmental conditions
    (wave and wind impact). The system appears to meet operational
    requirements. While the initial cost appears higher than the current
    PSB, this system may have a lower lifecycle costs due to improved
    design, materials and an automated ship gate feature.
        To determine if the HALO system design could provide the Navy
    increased capability the Navy has executed or is planning the following
    actions:

          In 2012, Navy Installations Command conducted a
    developmental test of the HALO waterside security barrier at the
    Aberdeen Test Facility in Aberdeen, MD
          In 2014, the Navy Physical Security Enterprise and
    Analysis Group conducted an Integrated Waterside Security technology
    demonstration in San Diego, CA
          In 2015, Naval Facilities Engineering Command began an
    eight-month In-Situ test of a semi-automatic ``Guardian'' gate onboard
    Naval Station Norfolk, VA
          In 2016, a followon test project onboard Naval Station
    Norfolk, VA will be awarded to determine the feasibility of a fully
    automated gate for the HALO system
          In 2017, a roll out of the full system at a location yet
    to be determined is planned to determine the feasibility of a full
    scale roll out
          In 2018 the Navy will develop the acquisition strategy
    for a Low Rate Initial Procurement

        The analyses and results from the In-Situ test will be utilized to
    develop future waterside security barrier performance specifications
    and an acquisition decision of a NEXGEN Type II water barrier.
        The projected total life-cycle cost of replacing the currently
    deployed U.S. Navy PSB with a next generation maritime security barrier
    is projected to cost in excess of $350 million.
        While the evaluation of newer systems continues, Naval Facilities
    Engineering and Expeditionary Warfare Center will carry on efforts to
    improve the performance and durability of the current PSB system.
                                 advanced armor
        11. Senator Ayotte. General Allyn and General Paxton, with the
    increased focus on full spectrum operations, what is your service doing
    to keep their advantage over peer and near-peer potential adversaries
    when it comes to advanced armors--including increasing survivability
    while reducing weight?
        General Allyn. In the early 2000s, the Army reacted superbly to
    equip our soldiers with life-saving body armor to defeat the relevant
    threat. The result was soldiers having an array of protective
    capabilities that were individually developed, such as body armor and
    combat helmets that protect against multiple threats associated with
    ballistic, blast, and blunt force events. This led to the development
    of an integrated protective capability for a complete Soldier
    Protection System (SPS) to provide soldiers with modular, scalable, and
    mission tailorable protection to reduce weight and increase mobility
    while also optimizing protection and remaining vigilant of adversary
    threats.
        SPS is the Army's next generation Personal Protection Equipment
    system. SPS will improve the level of mobility, form, fit, and function
    for all soldiers (male and female) at a reduced weight compared to
    legacy body armor systems. Based on the combination of hard and soft
    body armor SPS systems that entered into Low Rate Initial Production,
    the body armor's weight alone will be reduced by about 15 percent,
    representing 6.5 pounds for a size medium soldier. These results were
    achieved through more ergonomic and better integrated designs and the
    use of advanced materials.
        The SPS program represents the near-term investment in improving
    mounted and dismounted soldier survivability. The Army continues to
    invest in research and development for lighter, stronger, and more cost
    effective solutions in body armor. Research in advanced and emerging
    materials and manufacturing processes is ongoing and will continue to
    ensure that U.S. soldiers have the best protection available.
        General Paxton. The Marine Corps is employing a two-pronged
    approach to increasing survivability and reducing weight by looking at
    advances in armor technology as well as looking at vehicle protection
    systems (VPS), which are inclusive of both hard kill and soft kill
    technologies. Hard kill systems typically employ an explosive
    countermeasure to disrupt, redirect, and/or destroy an inbound threat
    munition. Soft kill system typically disrupts the threat munition
    guidance system causing the rocket or missile to miss its intended
    target.
        We are taking a proactive approach by examining the feasibility of
    various VPS's. We have a Deliberate Universal Needs Statement (D-UNS)
    for VPS as a means of defeating advanced generation Rocket Propelled
    Grenades (RPG) and Anti-Tank Guided Missiles (ATGM). We are looking to
    develop VPS capability with an eye to expanding our thinking beyond
    single vehicle protection, such as armor, to cooperative networks of
    systems that complement one another's capabilities to improve
    lethality, communication, command and control, and protection of the
    force. Ultimately, there is no single solution to the tactical
    challenges we face on the battlefield. Our VPS approach is three-fold:

          U.S. Army Expedited Active Protection Systems (APS)
    Effort: We assess these efforts as the most effective and efficient
    means for the Marine Corps to learn about the state of several mature
    hard kill systems via demonstrated performance and to best set the
    conditions to integrate and employ such systems when they are
    sufficiently developed and readied for service in combat. In close
    coordination we are looking to outfit a USMC M1A1 with APS while the
    Army looks at M1A2, Stryker, and Bradley options.
          Department of the Navy: We are also exploring rapid
    prototyping opportunities within the Department of the Navy (i.e.
    Office of Naval Research) to further develop soft kill technologies.
    Leveraging Navy expertise in electronic warfare and a robust warfare
    center capability, we view this avenue as one with strong potential to
    advance the capability and set the conditions for further development
    and eventual fielding.
          MAPS: We are maintaining a positive link with ongoing
    U.S. Army science and technology work within their Modular APS (MAPS)
    program.

        Additionally, within our Amphibious Assault Vehicle (AAV)
    Survivability Upgrade (SU) program we are applying an improved armor
    package. This upgrade is derived from the need for an operationally
    effective amphibious armored personnel carrier capability bridge until
    the future amphibious portfolio of vehicles reaches full operational
    capability. The AAV (SU) provides increased survivability and force
    protection while retaining water and land mobility performance. With
    the AAV (SU), we will be fielding a new buoyant applique armor package,
    which replaces the old applique system, provides better ballistic
    protection, and increases the buoyancy of the upgraded AAV. The old
    applique armor system brought with it a significant weight penalty that
    detracted from the water mobility performance of the vehicle. In
    contrast the new system improves the water mobility performance of the
    vehicle by making the AAV float more efficiently.
                                  improved isr
        12. Senator Ayotte. General Goldfein, what steps is the Air Force
    taking to develop and procure advanced technologies for aircraft, ISR
    payloads, and orbiting platforms that will provide improved performance
    and lower weight?
        General Goldfein. The Air Force is investing in Science and
    Technology (S&T) areas for platform, sensor, and payload capabilities
    which demonstrate improved performance with reduced size, weight, and
    power (SWaP) requirements.
        To enable the reduction in energy demand in future combat aircraft,
    the Air Force is investing in the development of adaptive turbine
    engine technologies that have the potential to reduce fuel consumption
    by 25 percent, provide higher thrust/sustained supersonic operation,
    and significantly enhance vehicle thermal management capability. We are
    also developing and demonstrating materials and processes technologies
    for air vehicle and subsystems to enhance lift, propulsion, low-
    observable performance, power generation management and affordability.
    Our research in ceramic, ceramic matrix composite, and hybrid materials
    technology will provide performance and supportability improvement in
    propulsion systems and high temperature aerospace structures.
        Our investments in Space Electronics Technology focus on 3-D
    techniques to increase throughput while reducing SWaP, and also
    benchmarking tools to assess the ability of emerging satellite
    electronics technologies to lower SWaP. Cold Atom gyroscope efforts
    focus on reduced size and weight to expand GPS-free navigation to a
    large number of Air Force platforms. Elements of the S&T portfolio
    examine: lighter weight structures for space platforms; higher
    efficiency cryo-coolers; and higher efficiency solar cells to be used
    in spacecraft vehicles. In addition, S&T continues to mature these
    technologies for scheduled flight experiments and transition to
    acquisition programs of record.
        We have advanced sensor and imaging technology to see farther than
    ever before without increasing SWaP, extending range by up to 40
    percent, especially in low visibility conditions. Our Optoelectronics
    and Photonics portfolio, which has been supporting work on silicon
    photonics, uses light to transfer information versus electrons in
    traditional integrated circuits for a significant reduction in SWaP,
    while increasing performance and reliability.
                                   __________
                  Questions Submitted by Senator James Inhofe
                              threats vs resources
        13. Senator Inhofe. General Allyn, how would you assess the future
    operations tempo of each of our services based on the assessment that
    former SecDef Gates made about aggressors, terrorists, revanchists, and
    expansionists half a world away are always interested in us?
        General Allyn. The Army has sufficient readiness, capability, and
    capacity to conduct counterterrorism and combat violent extremist
    organizations at current operations tempo. The Army is less than ready
    to conduct high-intensity ground combat against modernized aggressors,
    revanchists, and expansionists. Future operations tempo remains
    uncertain but the Army must be prepared to address all five challenges
    highlighted by former SecDef Gates' assessment.

        14. Senator Inhofe. All, would each of you agree that budget
    constraints have forced each service to prioritize near-term readiness
    at expense of capacity, capability, modernization, and infrastructure?
    How does that impact long-term readiness?
        General Allyn. Yes, budget constraints have forced the Army to
    prioritize near-term readiness at the expense of capacity, capability,
    modernization, and infrastructure.
        Current operational tempo, growing global instability, and lack of
    consistent and predictable funding over time will challenge the Army's
    ability to regain and sustain the combined arms proficiency needed for
    future contingencies. A return to sequestration will further delay
    modernization, disrupt full spectrum training plans, and prolong the
    Army's readiness recovery by three to five years. The Army already has
    minimal trade space to generate additional surge operating forces, and
    continuing fiscal turbulence will challenge the Army to meet the
    simultaneous requirements of the National Military Strategy.
        Admiral Howard. Similar to our sister services, the Navy's
    readiness continues to be challenged in a fiscally constrained
    environment. The fiscal year 2017 Navy budget submission provides the
    resources needed to deliver sustainable forward presence and supports
    our continued readiness recovery efforts for long-term readiness. The
    budget also reflects tough choices made, including taking deliberate
    risks in shore infrastructure, to provide a balanced approach to
    meeting our security challenges. Should budget constraints continue, we
    will impact all aspects of the fleet; capacity, capability,
    modernization, and readiness, both ashore and at sea.
        General Paxton. Current budget constraints have required the Marine
    Corps to prioritize near-term readiness at the expense of long-term
    modernization and infrastructure investment. For instance, in order to
    protect the readiness of our deployed and next-to-deploy forces and to
    meet current overseas commitments, the Marine Corps is accepting risk
    to the readiness of our home station units. These units constitute the
    ready ``bench'' of forces that would surge to meet an unexpected crisis
    or major contingency. Such a posture incurs additional risk in our
    ability to simultaneously meet current operational demand and respond
    to a major contingency. Achieving a ready bench--one capable of meeting
    major contingency requirements and effectively responding to the
    unforeseen--requires a force resourced with sufficient numbers of
    marines who are properly trained and equipped to operate across the
    full range of military operations.
        The current environment has also required us to adopt a fiscally
    constrained end strength of 182,000 in fiscal year 2017. At this level,
    we will accept deployment-to-dwell ratios of 1:2 and 1:4 for our Active
    and Reserve components, respectively. This is less than our goal of 1:3
    for the Active component and 1:5 for the reserves, placing added stress
    on our marines and marine families. Some types of Active component
    units did not achieve even these reduced dwell time goals in fiscal
    year 2015. This reduced end strength will also exacerbate the
    imbalances in readiness described above.
        We are already balancing the cost of modernization efforts
    necessary for long-term readiness against near-term readiness by
    focusing on essential areas, including the F-35, CH-53K Heavy Lift
    Replacement, the Joint Light Tactical Vehicle (JLTV), and Amphibious
    Combat Vehicle (ACV) 1.1, as well as smaller programs such as Ground/
    Air Task Oriented Radar (G/ATOR) and Networking on the Move (NotM). At
    the same time, we are investing resources in refreshing or upgrading
    legacy equipment we must continue to rely upon, including the
    survivability upgrade of our Assault Amphibian Vehicles. The longer we
    continue to rely upon such aging systems, including those such as the
    over 33 year old Light Armored Vehicle fleet and 26 year old M1A1 tank
    fleet for which we do not yet have funds to program replacements, the
    more resource intensive those systems become to maintain. Any further
    constraints on our budget may actually increase these costs, having an
    even greater negative impact on both long and short term readiness.
        Finally, we have had to assume risk in our Facilities Sustainment,
    Restoration, and Modernization (FSRM) accounts, funding facilities
    sustainment at approximately 74 percent of the requirement in fiscal
    year 2017. Though this level allows us to maintain our facilities at an
    average condition of ``Q2,'' or ``fair,'' it precludes further
    improvements. Restoration and modernization projects will be limited to
    those that address potential life, safety, and health requirements, as
    well as investments in mission critical facilities. Such a strategy,
    while necessary in the short term, risks reversing the gains we have
    realized over the last six years from investments and recapitalization
    of barracks, child development centers, and various operational,
    training, and support facilities. Furthermore, inadequate facilities
    maintenance for sustained periods of time will lead to more costly
    repairs, ultimately driving up the cost of future FSRM.
        General Goldfein. Yes, due to budget constraints, the Air Force has
    been compelled to take risk in capacity, capability, modernization and
    readiness. These constraints, combined with a consistent high
    operational tempo, have negatively impacted the service's ability to
    affect a readiness recovery inside the next decade. The fiscal year
    2017 budget request prioritizes capacity and readiness ahead of
    modernization.
        The Air Force cannot effectively sustain its current force
    structure and at the same time sustain the current level of operational
    demand. We are too small for the requirements. Additionally, the Air
    Force has not been allowed to divest cold war assets (discontinued
    BRAC, directed retention of legacy systems). To sustain existing force
    structure and meet operational requirements, the Air Force has been
    compelled to take risks in nearly every area to include acquisition,
    legacy sustainment, and readiness.
        In the short-term, the Air Force is forced to fund some key
    readiness accounts below the minimum requirements. These short-term
    decisions impact long-term readiness by delaying the Air Force's
    ability to begin the path to recovery. Readiness recovery takes time
    and consistent attention to each of the Air Force's readiness levers.

        15. Senator Inhofe. All, is the current defense budget sufficient
    to simultaneously rebuild the readiness of each of your services and
    modernize the force for the future while continuing current operations
    around the globe?
        General Allyn. No, the Army's PB17 budget request is minimally
    sufficient to meet our needs. The Chief of Staff of the Army has
    testified we are assuming high military risk. This budget strikes the
    best balance possible between readiness, modernization, and end-
    strength. Soldier readiness is our number one priority; in order to
    meet current operational requirements, funding for near-term readiness
    is prioritized at the expense of modernization and end-strength. The
    budget request provides sufficient capacity, capability, and readiness
    to respond to a changing global security environment. The President's
    Fiscal Year 2017 Budget request, in conjunction with stable and
    predictable funding in the future, will rebuild Army readiness for
    large-scale, high-end, ground combat in order to protect national
    security interests.
        Admiral Howard. The Navy's readiness continues to be challenged in
    a fiscally constrained environment. Navy's fiscal year 2017 budget
    submission provides resources needed to deliver sustainable forward
    presence and funds our continued readiness recovery efforts. This
    budget reflects tough choices made under current fiscal constraints to
    provide a balanced approach to meeting our security challenges.
    Balancing capability and capacity, delivering current and future
    readiness, providing naval presence to the geographic combatant
    commanders, while rebuilding our contingency response posture in a
    difficult budget environment, has required hard choices and tradeoffs.
        General Paxton. No, our current budget is not sufficient to address
    these issues simultaneously. In fact, to meet current operational
    requirements, the Marine Corps is forced to prioritize the readiness of
    our deployed and next-to-deploy forces. In the current fiscally-
    constrained environment, the Marine Corps accepts risk in our current
    home station readiness--the ready ``bench'' that would surge to meet a
    major crisis or contingency--and our future modernization.
        General Goldfein. Our fiscal year 2017 budget request prioritizes
    capacity and readiness ahead of modernization. However, despite relief
    from the Bipartisan Budget Act, the Air Force was still forced to make
    sacrifices as a result of sequestration. Our combat air forces remain
    at below 50 percent readiness for full spectrum conflict, and we were
    also compelled to defer F-35 acquisition this year and across the
    Future Years Defense Program. Continued fiscal uncertainty and spending
    cap restrictions will make our balancing efforts even more difficult,
    culminating in a modernization bow-wave beginning in 2022.
                       procurement delays and `bow wave'
        16. Senator Inhofe. All, what is the impact of delaying
    modernization on each of your services ability to conduct full-spectrum
    operations?
        General Allyn. Delaying modernization will exacerbate capability
    gaps against evolving threats. Lack of modernization risks the Army's
    ability to conduct ground operations of sufficient scale and ample
    duration to achieve strategic objectives or win decisively at an
    acceptable cost against a highly lethal hybrid threat or near-peer
    adversary in the unforgiving environment of ground combat.
        Admiral Howard. Modernization programs upgrade existing systems and
    introduce new systems, delivering improved readiness and enhanced
    capabilities to the fleet. This is vitally important to the Navy and
    our nation as we seek to maintain our robust power projection advantage
    over our adversaries. For example, the DDG modernization program
    provides those ships the advanced combat and weapons systems essential
    to defeat emerging technologically advanced threats, and the mid-life
    modernizations of our big-deck amphibious ships provides Joint Strike
    Fighter integration and continued interoperability in our amphibious
    fleet.
        Delaying modernization degrades Navy's ability to conduct full-
    spectrum operations by reducing capability, interoperability, and
    operational availability. Any delay also imposes increased maintenance
    costs to sustain legacy equipment. For example, delaying the Submarine
    Warfare Federated Tactical System (SWFTS) shipset installations results
    in more equipment failures and ultimately lost operational time.
    Readiness degradation is also evident in the modernization of the
    tactical air force. When aircraft such as the F/A-18A-D and AV-8B reach
    the end of service life before replacement aircraft are delivered into
    service, Navy faces significant challenges in strike fighter inventory
    management.
        Modernization programs provide the best balance of capability and
    capacity to the fleet by enhancing near-term readiness while ensuring
    long-term relevance. In the years ahead, we will need adequate funding
    levels and predictability to fully pay back our readiness debt from
    over a decade at war. Navy will continue to work with Congress to fund,
    develop, and execute vital modernization programs.
        General Paxton. The fiscal year 2017 President's Budget request
    provides the nation with a Marine Corps that is forward deployed and
    ready to meet today's challenges. However, this readiness comes at a
    steep price. Maintaining the readiness of these forces during a period
    of high operational tempo amid the current fiscal uncertainty comes
    with ever-increasing operational and programmatic risk that must be
    addressed at some point. As resources diminish, we will continue to
    protect the near-term operational readiness of our deployed and next-
    to-deploy forces at the expense of equipment maintenance, facilities
    sustainment, and investments in our equipment and infrastructure.
        Today I would highlight our tactical aviation (TACAIR) fleet as an
    example of the impact of delayed modernization. The average age of our
    TACAIR fleet is over 22 years, and as I testified we are experiencing
    challenges in maintaining sufficient Ready Basic Aircraft (RBA) to
    execute necessary training and fulfill operational commitments.
        While we are working to recover the readiness of our existing
    airframes, modernization through the introduction of the F-35 is the
    long term solution to that challenge. Our first F-35B squadron declared
    Initial Operating Capability in 2015. It will re-locate to a forward
    location in Japan in fiscal year 2017 after the stand-up of the second
    squadron. The continued and timely fielding of the F-35 will not only
    improve our ability to conduct full spectrum operations, but also have
    a transformational impact on Marine Corps doctrine, providing 5th
    generation capabilities to support sea control operations (SCO) with
    the Navy and enable joint forcible entry operations (JFEO) by the MAGTF
    even in the most contested environments. This essential warfighting
    capability is experiencing delays and under constant fiscal pressure to
    ``slide right'' or ``reduce buys'' in our current fiscal environment.
        General Goldfein. The impact manifests itself in eroded capability
    and closure of the capability gap between us and potential adversaries.
    Our legacy fleet is not as capable against advanced integrated air
    defense capabilities, and space and cyber domains are now contested.
    Our modernization efforts focus on addressing these concerns. Further
    delaying our modernization efforts puts airmen, the Joint Force,
    coalition partners and mission success at greater risk.

        17. Senator Inhofe. All, is there a procurement `bow wave'--pushing
    out and flattening procurement of critical modernization programs, all
    with growing budget demand, because they will not fit into the current
    budget topline?
        General Allyn. Yes, there is a procurement ``bow wave'' of critical
    modernization programs. This bow wave differs from funded requirements
    in that the bow wave contains quantities that can be delayed with
    tolerable risk in the near term but jeopardizes our ability to defeat
    and deter enemies in the future.
        The bow wave is caused by reduced budget caps that have forced the
    Army to decrease procurement quantities and research and development
    spending. These reductions allowed us to protect our number one
    priority, readiness and future modernization, through science and
    technology investments.
        Admiral Howard. Navy continues our commitment to modernization
    through investments in critical programs such as CG, DDG, and LSD-class
    modernization and legacy F/A-18 service life extension. We are
    concurrently adding new capabilities through such priority programs as
    the Ohio Replacement, Joint Strike Fighter, P-8 procurement, and the
    development of unmanned systems. The budget request delivers current
    and future readiness and postures our forces to meet geographic
    combatant commanders' missions. However, in order to rebuild our
    contingency response posture in the difficult fiscal environment, we
    have accepted risk in the modernization and maintenance of our shore
    infrastructure, including piers, runways, hangars, utility systems, and
    other support facilities. Long term underinvestment in these facilities
    will take an eventual toll on our ability to support deploying forces.
        General Paxton. The recapitalization of our force--through
    investments in aviation, ground combat vehicles, command and control,
    and digitally interoperable protected networks, as well as the reset of
    our ground equipment--is critical to our future readiness. With
    Congress' support, we have been able to protect our investments in key
    equipment modernization programs such as the Amphibious Combat Vehicle,
    the Joint Light Tactical Vehicle, and the RQ-21 Unmanned Aerial System,
    as well as our blue-dollar F-35 and CH-53K programs while incurring
    acceptable risks in other areas such as our decades old Light Armored
    Vehicle and M1A1 tank fleets. In addition, we have reset over three
    quarters of our ground equipment that was employed in Iraq and
    Afghanistan and returned approximately 50 percent to the operating
    forces. For these reasons, under current fiscal conditions, we do not
    anticipate a procurement `bow wave' of unfunded requirements within the
    Marine Corps' critical modernization programs. Further reductions to
    our topline may impact our ability to maintain this stability within
    these programs.
        I do have a concern, however about the larger Department of the
    Navy (DON) modernization requirements, specifically in regards to the
    Ohio-class Replacement Program (ORP). If the DON continues to be
    obligated to fund that program from within our already pressurized
    total obligation authority (TOA), it will crowd out other vital
    shipbuilding programs. I am particularly concerned about the impact on
    amphibious shipbuilding. As I stated, we have a minimum requirement of
    38 platforms to support the nation's forcible entry requirement and
    steady state demand exceeds 50 vessels. We have accepted an inventory
    of 34 ships, with appropriate availability, as a short term risk, but
    the ORP has the potential to seriously exacerbate and extend that risk.
    We currently have both an inventory and availability issue with
    amphibious shipping.
        General Goldfein. Yes, the Air Force is facing a `bow wave' that is
    now making contact with the Future Years Defense Program. The bow wave
    is made significantly more difficult by the large cost of
    recapitalizing the nuclear enterprise. Secretary Carter estimates it
    will cost $18 billion per year for fiscal years 2021-2035 for all three
    legs of the triad. The Air Force is attempting to reduce the impact of
    the bow wave by sequencing programs over time. This has forced the Air
    Force to reduce or delay procurement of systems such as F-35, T-X,
    Combat Rescue Helicopter (CRH), GPS III, and JSTARS recapitalization.
    This has also driven the Air Force to extend legacy airframes to
    compensate for delayed recapitalization.

        18. Senator Inhofe. All, if yes, how does this `bow-wave' impact
    future costs as well as cost to operate and maintain its legacy
    systems?
        General Allyn. The bow wave is created by costs that had to be
    deferred to the future to stay under the spending caps. The deferred
    spending reduces procurements per year and increases the time required
    to buy out required quantities, both of which drive costs up.
        Delayed procurements also create capability gaps, forcing the Army
    to slow the divestment of older equipment to prevent the capability gap
    from widening. These older systems cost more to sustain as they
    approach the end of their economic useful life, which will result in
    increased field and depot level maintenance costs.
        The Army needs sustained modernization to efficiently provide
    capabilities to our soldiers and to avoid rapidly procuring equipment
    at premium prices to modernize deploying forces when a conflict occurs.
    Efficient modernization paves the way for next generation systems and
    achieves lowest unit costs and shortest procurement timelines. It
    reduces sustainment costs by allowing the Army to divest older obsolete
    equipment while increasing operational readiness to support strategic
    deterrence, depth, and responsiveness.
        Admiral Howard. A delay to the procurement of critical
    modernization programs could lead to a Navy that can't meet warfighting
    requirements. In addition, this would put pressure on future budgets to
    recapitalize the Navy's force structure in several programs
    concurrently, as we are presently experiencing with the Virginia-class,
    Ohio Replacement, and Joint Strike Fighter. While the Navy continues to
    effectively modernize and extend the service life of many of our in-
    service platforms, such as DDG 51, CG 47, LSD-class ships, and legacy
    F/A-18 aircraft, eventually the cost to operate and maintain these
    legacy systems exceeds the cost of replacements.
        General Paxton. As I stated in my response to the previous
    question, we do not anticipate a procurement `bow wave' of unfunded
    requirements within our critical modernization programs.
        However, while we have been able to protect our near-term readiness
    while modernizing, our home station (non-deployed) readiness, as well
    as our infrastructure sustainment and investment accounts, have borne
    the burden of our ongoing fiscal challenges. Roughly half of our non-
    deployed force is insufficiently resourced, in terms of having both the
    level of required and trained personnel and equipment, to achieve
    readiness levels needed to execute wartime missions, respond to
    unexpected crises, and surge for major contingencies. The return of
    reset equipment from Iraq and Afghanistan to the operating forces has
    relieved some of these shortages, but continued cuts to Operation and
    Maintenance (O&M) accounts will reverse these gains and exacerbate
    challenges to our non-deployed readiness, placing us at risk in the
    event of major contingencies.
        Our infrastructure accounts have also become a bill payer for our
    deployed units. The Marine Corps has spent over $9 billion in
    facilities investments over the past six years to repair or
    recapitalize barracks, child development centers, and various
    operational, training, and support facilities, raising the average
    ``Q'' rating of our facilities from Q3 (Poor) to Q2 (Fair). Now, recent
    decreases to facilities sustainment funding have accelerated the rate
    of infrastructure degradation and precluded further improvements. In
    addition, fiscal year 2017 restoration and modernization will only
    address potential life, safety, and health requirements. Such a
    strategy drives up repair, restoration, and new construction costs over
    the long term.
        General Goldfein. Procurement reductions and delays are forcing the
    Air Force to extend legacy airframes. Extending legacy airframes is
    becoming increasingly expensive due to service life extension program
    costs, modification requirements to maintain viability in the evolving
    threat environment, and parts obsolescence.
                                force structure
        19. Senator Inhofe. All, how much of each of your service's
    capacity is consumed by day-to-day, steady-state operations?
        General Allyn. Combatant commanders continue to request Army forces
    to address current and emerging challenges to global security.
    Currently, the Secretary of Defense has ordered the assignment or
    allocation of all three Army Corps HQs, six of ten Regular Army
    Divisions, and 20 of the 59 Regular Army and Army National Guard BCTs
    in support of combatant commander requirements. In total, over 187,000
    soldiers are supporting contingency operations, efforts to deter
    adversaries and assure allies, and shape today's security environment.
    Today's demand for forces strains the Army's ability to sustain current
    readiness levels, recover readiness for the future, and respond to
    future contingencies.
        Admiral Howard. On average, 90-100 ships Navy ships are deployed or
    forward stationed at any given time. This follows Navy's model that, in
    general, one third of the fleet is underway, one third of the fleet is
    training to deploy or maintaining surge, and one third of the fleet is
    in maintenance.
        General Paxton. Generally, a third of the Marine Corps' Operating
    Forces are forward deployed. The allocation of the Service's capacity
    remains in alignment with priorities as outlined in the current
    Guidance for Employment of the Force (GEF).
        Overall, the majority of steady state activity executed in support
    of the Combatant Commands is conducted by forces that are assigned or
    allocated in support of SECDEF priority missions. In many cases, these
    steady state activities contribute to both the achievement of combatant
    commander campaign objectives and the readiness of the force to execute
    operational requirements.
        General Goldfein. Over 24,000 airmen are currently deployed
    supporting combatant commander requirements with an additional 80,800
    Active, Guard, and Reserve stationed overseas. Thus far in fiscal year
    2016, the Air Force has flown over 500,000 flying hours with
    approximately 110,000 in support of overseas contingency operations.
    Our Mobility Forces have passed 130 million + pounds of fuel, airlifted
    more than 25,000 passengers and over 15,000 short tons of cargo.
    Approximately two thirds of Air Force fighter squadrons are engaged on
    a day-to-day basis. This includes units deployed/allocated to CENTCOM/
    PACOM/EUCOM, forces forward-stationed in EUCOM/PACOM, Air National
    Guard units supporting NOBLE EAGLE ACL-5 requirements, and units who
    are prepared to rapidly deploy in support of the Global Response Force.

        20. Senator Inhofe. All, what is each of your service's capacity to
    provide additional ``surge'' forces to respond to a major contingency?
        General Allyn. The Chief of Staff of the Army recently stated ``We
    risk the ability to conduct ground operations of sufficient scale and
    ample duration to achieve strategic objectives or win decisively at an
    acceptable cost against a highly lethal hybrid threat or near-peer
    adversary.'' Less than one-third of the Army has achieved acceptable
    readiness levels to conduct sustained ground combat. The Brigade Combat
    Team is the Army's primary fighting formation, and only 20 of 59 (34
    percent) BCTs are ready. Of those: 11 (18 percent) are Assigned or
    Allocated--committed--to Combatant Commands. The remaining nine (15
    percent) belong to the Army, forming the backbone of current surge
    capability.
        Admiral Howard. Navy's capability to provide additional ``surge''
    forces in response to a major contingency varies by major force element
    and depends on the specific requirements and timelines of the
    contingency plan being executed.
        As we rebuild our readiness due to prior year over utilization,
    Navy is challenged across a variety of force elements to meet the
    ``surge'' requirements, in both quantity and timeline, of our most
    demanding operational plans. In cases where we can provide initial
    contingency response, we remain challenged to provide follow-on forces
    in accordance with plan timelines. This stems from the overconsumption
    of our Naval Forces for the last 15 years, deferring required
    maintenance and modernization, and the lingering effects of
    sequestration.
        Navy and the Department of Defense remain intensely focused on
    recovering the readiness of its fighting forces. Navy is recovering
    readiness ``in-stride'' through implementation of the Optimized Fleet
    Response Plan (OFRP). OFRP allows Navy to continue to provide a
    baseline level of global presence while we work through a backlog of
    ship and aircraft maintenance, conduct required modernization, increase
    the efficiency of our processes, and better align our ships, manning,
    and command and control structures.
        For Navy, readiness recovery does not necessarily correlate to an
    increase in global presence for a particular force element, but rather
    builds surge capacity. Over time, OFRP will increase the ready forces
    Navy has ``on the bench'' and available to respond to contingency.
        General Paxton. The Marine Corps is Congressionally mandated to be
    the United States most ready fighting force. As such it stands ready to
    rapidly deploy in order to protect national interests. The Marine Corps
    metric of force capability is not the individual or unit, but the
    Marine Air-Ground Task Force (MAGTF). The MAGTF comprises a command
    element (CE), ground combat element (GCE), aviation combat element
    (ACE), and logistics combat element (LCE) to win battles and fight the
    nation's wars. These MAGTFs and scalable and expeditionary. The Marine
    Corps organizes, trains, and equips to routinely provide combat ready,
    amphibious MAGTFs. Your Marine Corps today is a one-Major Contingency
    Operation (MCO) force and would be all-in to defeat an adversary in an
    MCO. ``Surge'' forces available for an MCO would be all forces not
    currently deployed to support combatant commander theater campaign
    plans or engaged in operations overseas.
        Marines are ready to deploy, but our own Marine Corps' Active
    component surge availability to respond to an MCO is currently limited
    by aviation and command element readiness as well as by joint aviation,
    amphibious shipping and strategic lift availability. Reserve unit
    availability is dependent on funding and appropriate authorities to
    mobilize and deploy reserve forces.
        Ready units are trained in mission essential tasks (MET) and
    certified by the Service to have the necessary competencies to complete
    missions designated for that unit type (e.g. ``Ready'' Infantry
    battalions are offense, defense, security, and amphibious operations
    qualified). MCO execution could call for immediate deployment through
    reduced or non-training of a specific MET, partial unit employment
    (i.e. artillery batteries versus a full artillery battalion), or
    additional time to prepare. This comes at increased risk to force, risk
    to mission and risks surrendering the initiative to our adversaries.
        General Goldfein. If required, the Air Force is postured to provide
    nearly 100 percent of its combat force in response to a major
    contingency; however, surging to that contingency may involve
    disengaging from existing steady-state operations. While less than 50
    percent of Air Force units are currently full-spectrum ready, the Air
    Force can surge forces at less than full-spectrum readiness; however,
    if airmen are not ready for all possible scenarios, especially the
    high-end, contested fight, it could take longer to get there, it could
    take longer to win, and potentially cost more lives.

        21. Senator Inhofe. All, given the current and projected threat
    environment and the increased demands being placed on your force
    structure, are each of your services sized to meet increased
    operational requirements? If not, what is the right force structure
    size for each of your services?
        General Allyn. The Army at 980,000 (450,000 Active Component,
    335,000 Army National Guard, 195,000 United States Army Reserve) is at
    the edge of its ability to meet the strategy to defeat an adversary in
    one major combat operation while simultaneously denying the objectives
    of an adversary in a second theater. Over 180,000 soldiers are
    supporting combatant commanders around the world today. The National
    Military Strategy (NMS) calls for a fully resourced total force of
    about 1.2 million. But, given the current lack of sufficient funding to
    maintain a force of this size, the Army must make the most effective
    use of available forces. The Chief of Staff of the Army testified that
    for the Army to reduce military risk to a moderate level we require an
    Army Total Force of 1.2 million to meet the needs of the NMS.
        Admiral Howard. Navy sources current rotational and emergent
    combatant commander (CCDR) force requirements as directed by the
    Secretary of Defense (SecDef) in the Global Force Management Allocation
    Plan (GFMAP). SecDef orders are the result of a Joint Staff-led Global
    Force Management (GFM) process that balances competing CCDR demands
    with available resources and strategic objectives. GFM allows SecDef to
    make risk-informed decisions to align U.S. Military forces and
    capabilities against current priority requirements. Through the GFM
    process, Navy meets the critical elements of Asia-Pacific rebalance
    while still supporting operations in other theaters, such as Europe or
    the Middle East.
        Navy's 2014 update to the 2012 Force Structure Assessment (FSA)
    identified a 308 ship combatant force as the minimum required to meet
    Defense Strategic Guidance missions. The 308 battle force is the right
    mix of ships, by quantity and type, with the requisite capability and
    capacity to fulfill all of the Navy's essential missions at an
    acceptable level of risk based on mission and threat projections, based
    on CCDR input and verified by the Navy's analytic process.
        General Paxton. After a deliberate Marine Corps Quadrennial Defense
    Review study in 2014, the study identified 186,800 as the optimal force
    size to address the forecast demands foreseen at that time. World
    events continue to challenge the assumptions behind that forecast, both
    in terms of the world situation and capability requirements such as
    cyber and special operations, and we are reassessing our projected
    future requirements. For example, Ukraine, South China Sea, and
    counter-ISIL in Iraq and Syria have all occurred or significantly
    expanded in scope since our 2014 review. As shown by our operations in
    2015, your Marine Corps continues to be in high demand from our
    regional COCOMs as well as the State Department at our diplomatic posts
    overseas. With our stabilization at an end strength of 182,000 we will
    continue to satisfy many but clearly not all of those demands. That
    demand signal has not substantially abated due to the emergence of
    threats in new forms, gradually increasing the strain on our current
    force level. It is clear that an 186,800 force is closer to a minimum
    sized Marine Corps for today's world situation.
        General Goldfein. Our fiscal year 2017 (FY17) budget prioritized
    capacity and readiness over modernization. As such, the Air Force
    maintains the appropriate force structure to meet the current
    requirements of the Defense Strategic Guidance, but at greater overall
    risk to the nation as a result of increased warfighter demand and
    continued fiscal constraints. In order to rectify this situation, the
    Fiscal Year 2017 President's Budget increases Active component end
    strength to support A-10 force structure, stand-up of F-35 units to
    sustain fighter capacity of 54+1 Total Force fighter squadrons. It also
    increases maintenance capacity to begin improving readiness, and the
    expansion of training capacity to meet the needs of additional end
    strength.

        22. Senator Inhofe. All, can you comment on the current deployment
    to time at home ratio, retention, and the morale of each of your
    services?
        General Allyn. While the Active Component (AC) Army is currently
    exceeding the overall deployment to home goal ratio of 1:3 for larger,
    named operations, and the Reserve Component (RC) is likewise exceeding
    its overall deployment to home goal of 1:4, certain Regular Army Forces
    are challenged to meet these ratios for all operational deployments
    because of high demand for their capabilities. Regular Army forces that
    are not meeting the 1:3 deploy-to-dwell ratio for all operational
    deployments are: Division Headquarters at 1:1, Combat Aviation Brigades
    at 1:1.7, Patriot Battalions and Brigade Combat Teams at 1:2.
        The number of soldiers deploying in support of combat operations is
    less than 20 percent of the number who deployed in the mid and late
    2000's. This has allowed the Army to surpass its dwell goals despite
    high operational demand for certain capabilities.
        The Army continues to retain soldiers at high levels, which is a
    testament to the patriotism of our soldiers, support of our Families,
    and the quality of leadership within our ranks. Active and RC
    Noncommissioned Officer (NCO) and Officer satisfaction with operational
    tempo increased between 2008 and 2012, and has remained stable since
    then. Over the last few years, the percentage of Active junior enlisted
    soldiers and officers planning to stay in the Army until retirement has
    remained above the historic average. The percentage of Active NCOs
    planning to stay markedly increased between 2012 and 2015 (from 59
    percent to 70 percent).
        Admiral Howard. While extended deployment lengths have historically
    had a negative impact on retention, it is difficult to conclude that
    retention rates are significantly affected by longer deployments alone
    since many other factors influence a sailor's retention decision.
    Aggregate retention remains strong and there is no indication that
    sailor morale has been negatively impacted by longer deployment
    lengths. Our Optimized Fleet Response Plan (OFRP) establishes
    deployment lengths (six to seven months, depending on the particular
    platform) designed to provide greater stability and predictability for
    sailors and their families.
        General Paxton. Based on the fiscal year 2016 and fiscal year 2017
    Global Force Management Allocation Plans (GFMAP) and a force structure
    of 182,000 marines, the Active Component (AC) has maintained a Depth-
    to-Dwell (D2D) ratio of 1:2 or better for some portions of the force.
    However, infantry battalions, communications battalions, MV-22 Osprey,
    tactical aviation (TACAIR) and KC-130J (VMGR) squadrons have fallen
    short of the 1:2 D2D ratio due to global demand requirements and
    aviation type/model/series transitions. Additionally, Operations
    Freedoms Sentinel and Inherent Resolve continue to levy significant
    demand with respect to personnel tempo across our human intelligence
    (HUMINT) and signals intelligence (SIGINT), capabilities. The Reserve
    Component (RC) will continue to maintain an overall Deployment-to-Dwell
    (D2D) no less than 1:4.
        An fiscal year 2016 mid-year assessment was conducted to determine
    the Marine Corps' progress toward meeting the new prescribed end
    strength target of 182,000. The Marine Corps has adjusted its First
    Term Alignment Plan (FTAP) and Subsequent Term Alignment Plan (STAP)
    boat spaces accordingly and does not foresee any issues with meeting
    its FTAP and STAP retention goals. The Service assesses it will
    complete its fiscally driven drawdown to 182,000 by the end of this
    fiscal year.
        The current morale in the United States Marine Corps remains high
    in every clime and place, despite protracted engagements across the
    globe. History has shown, in fact, that marines enlist and reenlist in
    order to deploy and fight and execute our nation's most critical
    missions. We recognize that initiative, endurance, and patriotism. Our
    solemn obligation is to provide them the time and resources to properly
    train pre-deployment, and then the best of equipment and fullest
    manning when they deploy. Marines have, are, and will continue to be
    professional maintaining the good order, discipline and teamwork
    necessary to sustain our readiness in peace and guarantee our success
    in the future operational environment.
        General Goldfein. The Air Force has recognized that the evolving
    geopolitical situation continues to place significant demands on the
    force and we recognize the increased strain this places on our airmen.
    The Air Force's capacity to reach the SECDEF's goal of 1:2 deploy-to-
    dwell ratios is dependent on both its End Strength and the number of
    airmen the Air Force must deploy (Operational Tempo). As a result, the
    Air Force has embarked on a growth strategy to address key capability
    gaps in the nuclear, maintenance, cyber, intelligence, surveillance and
    reconnaissance, and support career fields, adding roughly four thousand
    in end strength across these enterprises. As warfighter demands
    persist, the fiscal year (FY) 2017 budget cycle sought to carry forward
    fiscal year 2016 end strength levels of 317 thousand to stabilize the
    force and posture for future manpower increases in order to address
    maintenance capacity shortfalls, additive F-35 bed-downs, expanded
    training capacity requirements, and systemic unit under-manning.
        The Air Force is also retaining experience through robust and
    expanded incentive programs, like Selective Reenlistment Bonuses
    (increased from 40 specialties in fiscal year 2015 to 117 in fiscal
    year 2016/17); bringing on prior service accessions; utilizing Reserve
    Active Duty tour opportunities; and implementing High Year of Tenure
    extensions (increased from 38 specialties in fiscal year 2015 to 122 in
    fiscal year 2016/17). These programs target our shortfalls across the
    board with specific emphasis on battlefield airmen, maintenance,
    Intelligence, Surveillance and Reconnaissance, support, nuclear, Air
    Liaison Officer, Intel, Remotely Piloted Aircraft pilots, and Cyber
    career fields.
        But we are concerned. The Air Force is smaller, older and busier
    than it has ever been. We need Congress' support for increased end
    strength to get after our capability and readiness challenges including
    deploy to dwell.
                    depots, shipyards and ammunition plants
        23. Senator Inhofe. All, are your depots, shipyards and ammunition
    plants adequately funded to ensure your weapon systems are meeting
    current operational requirements or do you have shortfalls? Are they
    driven by budget or other factors?
        General Allyn. Presently, the depots and ammunition plants are
    adequately funded to meet operational requirements. This has been
    possible primarily due to Overseas Contingency Operations (OCO) funding
    in support of the Reset efforts and deployments. As OCO funding is
    eventually discontinued, Base Program funding must be increased to meet
    enduring requirements. Manufacturing arsenal funding in the Base
    Program continues to present a challenge for the Army due to of
    workload (low) to workforce (high) imbalance.
        Admiral Howard. The Navy maintenance budget requests are built upon
    independently certified models, reflecting engineered maintenance plans
    for each ship class and aviation type/model/series. Our shipyards and
    aviation depots have been challenged by emergent work beyond that
    expected, associated with a decade of high tempo operations and
    additional wear on assets.
        Resetting our surface ships and aircraft carriers after more than a
    decade of war led to significant growth in public and private shipyard
    workload. The Navy baseline budget request funds 70 percent of the ship
    maintenance requirement across the force, addressing both depot and
    intermediate level maintenance for carriers, submarines and surface
    ships. OCO funding provides the remaining 30 percent of the baseline
    requirement and allows for the continued reduction of surface ship
    life-cycle maintenance backlogs.
        The Fleet Readiness Centers (FRCs) and Navy's aviation depots have
    been challenged to recover full productivity after hiring freezes,
    furloughs, and overtime restrictions in fiscal year 2013. Through a
    concerted hiring effort with the support of congressional budgetary
    increases, the recovery in maintenance capability is in progress.
    However, the FRCs face a significant backlog of work, particularly for
    the service life extension of our legacy F/A-18 Hornets. FRCs hiring
    progress returned to pre-sequestration manning levels in fiscal year
    2015 and they continue to adjust hiring in order to ensure the
    workforce can meet the workload demand.
        The Aviation Depot Maintenance program is funded to 76 percent in
    baseline and 85 percent with OCO for new work to be inducted in fiscal
    year 2017. This funding level supports repairs for 583 airframes and
    1,684 engines/engine modules. A $34 million funding shortfall to
    achieve the executable level of aviation depot maintenance has been
    identified in the Chief of Naval Operations Unfunded Priorities Letter
    and we will continue to monitor the impacts.
        General Paxton. The depot and field-level maintenance accounts
    supporting equipment readiness in forward-deployed/operational
    environments, home station, and reset have kept pace with requirements
    over the last decade. However, current fiscal realities require
    difficult decisions across all pillars of readiness, to include
    maintenance. Through baseline and OCO funding, our fiscal year 2017
    depot maintenance program is sufficient to meet all current operational
    and reset requirements but results in risk to home station maintenance.
    We anticipate an enduring need for OCO funding in support of forward-
    deployed operations, to include maintenance accounts. To ensure
    operational requirements are met and mitigate this risk in execution,
    we use a complex depot maintenance model which optimizes funding to
    maximize readiness and warfighting capability. Validated warfighting
    values associated with equipment readiness drivers are key variables in
    the optimization model computation. This risk is manageable in the
    short term, but if sustained, will impact ground equipment readiness in
    the long term.
        I do have and continue to voice concerns over the inventory and
    availability of amphibious shipping (naval shipyard issues) as well as
    the availability of ready basic aircraft (RBA) on our flightlines
    (aviation depot issues.) Our current budget puts additional fiscal
    strain on the already reduced capabilities and negatively impacts our
    warfighting readiness, particularly in responding (``surge'') with home
    station forces.
        General Goldfein. The Fiscal Year 2017 President's Budget Weapon
    Systems Sustainment depot maintenance baseline funding maintains the
    delicate balance between capability, capacity and readiness. This level
    of funding supports the most critical aircraft depots/engine overhauls
    with no anticipated maintenance backlog.

        24. Senator Inhofe. All, what is the current status of investment
    across your depots, shipyards and ammunition plants? Is it meeting
    mandated capital investment of 6 percent as described in 10 USC 2476?
        General Allyn. The Army has budgeted to meet the 6 percent
    investment requirement for fiscal year (FY) 2016 and fiscal year 2017
    as reflected in the Fiscal Year 2017 President's Budget request. The
    Army is committed to continuing to invest in the Organic Industrial
    Base in accordance with 10 U.S. Code 2476.
        Admiral Howard. The Department of the Navy will again exceed the
    mandated capital investment of 6 percent across our shipyards and
    depots described in 10 USC 2476 with a 7.1 percent total investment in
    fiscal year 2017. This equates to $376.9 million at Naval Shipyards,
    $114.3 million at Fleet Readiness Centers and $15.7 million at USMC
    depots.
        General Paxton. Based on the Fiscal Year 2017 President's Budget
    (PB), the current status of the investment for the Marine Corp (MC)
    Depot is as follows:

    ------------------------------------------------------------------------
                   PB17                        FY15               FY16
    ------------------------------------------------------------------------
    % Executed/Projected                5.9%               3.9%
    ------------------------------------------------------------------------

        The MC Depot is not meeting the mandated capital investment of 6
    percent.
        In accordance with 10 U.S. Code  2476, subsection (a)--Minimum
    capital investment for certain depots, it states that ``each fiscal
    year, the Secretary of a military department shall invest in the
    capital budgets of the covered depots of that military department a
    total amount equal to not less than six percent of the average total
    combined maintenance, repair, and overhaul workload funded at all the
    depots of that military department for the preceding three fiscal
    years.''
        While the MC Depot strives to meet the 6 percent threshold at the
    command level through multiple operational variables and investment
    into modernization of equipment and facilities, the investment may fall
    below the goal due to the relatively smaller Depot operation as
    compared to other services. The 6 percent minimum capital investment
    for covered depots is mandated at the Department of the Navy (DON)
    level.
        General Goldfein. The Air Force has a robust capital investment
    program that provides the depot complexes equipment, minor
    construction, and software for new workloads while modernizing and
    recapitalizing aging equipment and facilities. Yes, the Air Force has
    always met the mandated capital investment of 6 percent as described in
    10 USC 2476, and projects continued compliance. For example, in fiscal
    year (FY) 2017, the procurement equipment investments will support the
    activation of the organic depots to support F-35 and KC-46A. In fiscal
    year 2016 and fiscal year 2017, MILCON investments support the KC-46A
    depot bed-down at the Oklahoma City Air Logistics Complex.

        25. Senator Inhofe. All, we are working with OSD to help facilitate
    the timely hiring civilians at our depots, shipyards and ammunition
    plants. The Office of Personnel Management has a goal of 80 days which
    is unacceptable. What is the impact on readiness if we cannot hire
    require civilian personnel into our depots, shipyards and ammunition
    plants in a timely manner?
        General Allyn. Readiness can be negatively impacted. Our workforce
    however is committed to their mission and has continuously sustained
    the warfighter as required. Through use of surges in the workforce,
    such as five day/ten hour work week, three shifts per day, or limited
    use of contract services, our depots', arsenals', and ammunition
    plants' workforce can flex to meet the readiness requirements of our
    Army. Hiring managers will continue to work through the federal hiring
    process to strive to get the right worker into the right job in a
    timely manner.
        Admiral Howard. Navy readiness is not significantly impacted by the
    length of time needed for civilian hiring actions at Navy aviation
    depots and shipyards. These activities routinely plan hiring well in
    advance of workload increases due to the extensive training required
    for their unique and highly skilled workforce. While not directly
    impacting readiness, the Navy is working on reducing the hiring
    timelines at the aviation depots and shipyards to get new personnel
    into training and the production workforce faster. Further, the
    Department of the Navy has seen significant improvements in the hiring
    process through the concentrated joint efforts of the Human Resources
    and Comptroller communities in the last two years. Operation Hiring
    Solutions, which expands best practices and streamlines processes
    throughout the Department, is improving our ability to get people
    onboard more efficiently. The aviation depots and shipyards are
    benefiting from these programs as well.
        General Paxton. Although the goal of OPM is 80 days, our analysis
    shows that the actual wait time for hiring civilian employees and
    having them in place averages 149 days in the Civilian Human Resource
    Office--Southeast (CHRO-SE) Region. This excessive wait time has a
    significant impact to both production and financial execution goals.
    The depots are Working Capital Funded (WCF) activities, which must
    generate revenue through the execution of Direct Labor Hours (DLH) to
    recover costs. Based on the standard 80 day wait time, the depots would
    lose approximately 55 productive days waiting for a civilian to be
    hired and report to work. An 80 day wait time equates to $40K in
    revenue and 400 DLH's that would be lost per employee and with the
    hiring process taking almost twice that amount of time, the impact is
    even greater.
        To offset the wait times for hiring civilian employees, the depots
    currently leverage labor contracts to fill skill gaps and civilian
    workforce deficiencies as a temporary mitigation strategy.
        General Goldfein. As of March 21, 2016, there were 1,762 vacant
    positions in critical skills within the Air Force Sustainment Center
    (AFSC). AFSC expects the critical need to exist until March 31, 2017.
        Immediate shortages with extensive lag times in hiring,
    particularly in critical aerospace skills, drives high overtime rates
    and creates the inability to meet delivery deadlines. The unfinished
    work must transfer into the next fiscal year. As the workload moves to
    the out years, it directly impacts the ability to support warfighter
    needs within required timelines. The inability to meet AFSC commitments
    ultimately leads to the potential of Air Logistics Complex customers
    seeking other sources to perform the necessary workload.
        Air Force Materiel Command (AFMC) is working closely with the Air
    Force Personnel Center to break down barriers that result in lengthy
    hiring timelines. Significant progress has been made, and AFMC is
    continuing to look for other opportunities to improve.
                                pilot shortfall
        26. Senator Inhofe. All, are each of your services experiencing
    shortages in the pilot manning?
        Admiral Howard. Our aggregate pilot inventory meets current
    authorizations. However, pilot manning among lieutenant commanders (O4)
    in three carrier-based fixed wing type/model/series aircraft,
    specifically the Electronic Attack (VAQ), Strike Fighter (VFA) and
    Early Warning (VAW) communities, is projected to decline over the next
    five years. This will necessitate increased incentive power to mitigate
    a critical pilot inventory shortfall at the department head level.
    Accordingly, we support the Administration's proposal to increase
    statutory caps on aviation pays to ensure we retain a competitive edge
    as we work to retain highly-trained and experienced pilots.
        General Paxton. No. On average, Marine Aviation is not experiencing
    pilot shortages. Within HQMC Aviation, various metrics are used to
    track pilot manning. Some metrics measure by rank/grade and others by
    duty location (e.g. fleet squadrons, supporting establishments,
    training commands). In the majority of our Type/Model/Series (T/M/S),
    these metrics show our target goals are exceeded; however, in our newer
    T/M/S (e.g. F-35 and MV-22), deficiencies are shown. This is due in
    part to wait times within Chief of Naval Air Training (CNATRA) training
    pipelines to build up our newer T/M/S inventories. Another area of
    deficiency is shown in our junior officer grades/ranks within our
    operational squadrons, specifically F/A-18. That was primarily due to a
    lack of inventory of available F/A-18 aircraft to train and meet
    operational commitments. We have prioritized all our Fleet Replacement
    Squadrons (FRS) training squadrons for available aircraft and now are
    producing the numbers we need, but in some year groups we remain short
    of company grade officers in F/A-18.
        General Goldfein. Yes, the Air Force is experiencing a shortage of
    pilots. Currently the Air Force is 641 pilots short of our total
    requirement, and expecting to be over 750 pilots short by the end of
    fiscal year (FY) 2016. Over the last three years, we have noticed a
    decreasing trend in pilot retention. Since fiscal year 2014, yearly
    losses have exceeded the Air Force's annual production capacity. While
    many of the separating pilots have affiliated with the Reserve
    Components (RC), the RC is also experiencing a pilot shortage in full
    time positions. Overall, the pilot manning shortage is most critical in
    our fighter community, where we are more than 511 pilots short as of
    the end of fiscal year 2015, and the trend is worsening. The Air Force
    expects to be over 700 fighter pilots short by the end of fiscal year
    2016.

        27. Senator Inhofe. All, are you starting to see any indications of
    an increasing number of military pilots leaving your services?
        Admiral Howard. Aggregate Navy pilot retention has declined in each
    of the last three years against the backdrop of an improving economy
    and increased airline pilot mandatory retirements. Recent studies
    forecast that, based on industry growth and mandatory retirements,
    airline and cargo pilot hiring-demand will grow to 4,000 pilots per
    year by 2020. A 2006 Center for Naval Analyses study postulated that
    for every 1,000 airline hires, Navy would experience a 2.4-2.6 percent
    decline in pilot retention.
        General Paxton. Not at this time, but we anticipate we may in the
    near future. Statistical data shows a 26-year average attrition rate at
    7.2 percent for marine aviators and fiscal year 2015 attrition rates
    were below the 26-year average. However, we have reduced pilot
    populations due to our drawdown, and the growing commercial and airline
    shortfalls will drive a demand for pilots from the military. The Bureau
    of Labor Statistics (BLS) indicated on 17 December 2015 a 7 percent
    (faster than all occupations) pilot demand until 2024 due to the
    current pilot population aging out. BLS noted ``military and
    experienced pilots will have a [hiring] advantage over applicants whose
    flight time consists only of small piston-driven aircraft.'' Airline
    industry insiders are now hiring Tiltrotor (V-22) pilots, especially
    given the FAA changes in the wake of the Colgan air crash and this
    increases the USMC's aviation population at risk.
        We believe our current lowered state of aviation readiness (ready
    basic aircraft, RBA) and resultant reduced flying hours (flying hours
    program, FHP) combined with industry's pilot demand will generate a
    retention problem. Although our statistics, looking backward, indicate
    we are within historic norms, the aviation industry demand has the
    potential for reducing our pilot population below required levels. On a
    side note, we are also watching and concerned about retention of our
    highest qualified aviation maintenance Marines. They too are in high
    demand in the commercial world. We will continue to monitor closely to
    ensure we don't re-learn the lessons in the 1990's where pilot
    shortfall required Navy pilot volunteers to change service to the USMC
    because bonuses came too late.
        General Goldfein. Yes. Over the last three years we have noticed a
    decreasing trend in pilot retention and the Air Force is experiencing a
    shortage of pilots. Currently the Air Force is 641 pilots short of our
    total requirement, and expecting to be over 750 pilots short by the end
    of fiscal year (FY) 2016. For fighter pilots, fiscal year 2014 was the
    largest single year drop in Aviation Retention Payment (ARP) take rate
    in 14 years. This corresponds to the last major significant airline
    hiring in 1999-2000. Overall, the Air Force desires retention bonus
    take rates between 65-70 percent. For the past 2 years (fiscal year
    2014 and fiscal year 2015), we have experienced retention bonus take
    rates between 55-59 percent, and the trend is worsening. To date, the
    Air Force has experienced as many separations in the first six months
    of fiscal year 2016 as it did in all of fiscal year 2015.

        28. Senator Inhofe. All, what steps are each of your services
    taking?
        Admiral Howard. Navy applies both monetary and non-monetary
    incentives to retain pilots who possess the requisite qualifications
    and demonstrated leadership to maintain our preeminent operational
    aviation force. Non-monetary incentives include graduate education
    opportunities, spouse co-location, geographic assignment stability, and
    participation in the Career Intermission Program. Monetary incentives
    include a monthly Aviation Career Incentive Pay (ACIP) and Aviation
    Career Continuation Pay (ACCP). ACCP is comprised of two separate
    bonuses. The first is targeted at mid-grade Active Duty aviators, and
    designed to retain them in the Navy to serve as squadron department
    heads. The second, a command retention bonus, is designed to retain
    squadron commanding officers through 22 years of commissioned service
    (YCS).
        As we work to retain the number of pilots needed to meet
    operational requirements and against the backdrop of increasing
    commercial aviator hiring and compensation, we support the
    Administration's current proposal to increase ACIP and ACCP statutory
    caps to ensure we retain a competitive edge.
        General Paxton. While on average, our current inventory of pilots
    is sufficient as we have already described in Questions 26 and 27, we
    are still concerned about our pilot populations. Given the overall
    shortfalls in Marine Aviation readiness, we have seen a reduction of
    flight hours per pilot across every platform. This long term readiness
    problem and the career opportunities in the commercial aviation sector,
    give us pause. While we do not see broad retention issues today, we are
    concerned that this could become a problem in the future and do not
    want to get caught behind it. Headquarters Marine Corps actively
    conducts surveys to seek insights into current motivations of our
    pilots, their intentions, and perceptions. This enables us to be
    proactive and ensure we sustain the pilot population depth and breadth,
    and ensure that corrective action, if needed in the future, will be
    applied in a timely manner.
        General Goldfein. In September 2015, General Welsh initiated the
    Fighter Enterprise Redesign, an Air Force effort investigating
    initiatives to reduce fighter pilot requirements and increase the
    production and retention of pilots. Regarding requirements, the Air
    Force is reviewing developmental education policies to determine
    whether changes in existing policies can provide some relief to current
    requirements. With respect to production, the Air Force is currently
    reviewing available options for standing up additional fighter pilot
    training capacity. To prepare for this, we assessed additional
    maintenance manpower in fiscal year (FY) 2015 and 2016 to increase our
    ability to produce experienced pilots, as well as increase combat
    readiness. In an effort to retain more pilots, the Air Force is looking
    at addressing high operations tempo, home station quality of life, and
    Total Force integration. Lastly, regarding retention, we are exploring
    improvements to the officer developmental process, and developing a
    more agile and accommodating assignment management policies to help
    retain skilled pilots. Additionally, in the Fiscal Year 2017
    President's Budget, the Air Force advocated for increases in Aviator
    Retention Pay. If commercial airline hiring and pay increases continue
    beyond current levels, the Air Force may need to revisit additional
    bonus increases.
                                   __________
                 Questions Submitted by Senator Jeanne Shaheen
                                combat uniforms
        29. Senator Shaheen. Section 352 of the fiscal year 2014 NDAA
    established that it is DOD policy to eliminate the fielding of service-
    specific combat uniforms in order to adopt and field a common combat
    uniform for all members of the Armed Services. This committee has
    always strived to improve efficiencies and the multitude of service-
    specific combat uniforms even made the top of GAO's list of duplicative
    DOD issues not long ago. Given this committee's potential look at
    Goldwater-Nichols reform, the combat uniform issue has potential for
    improvement.
        Given the DOD policy and the fact that the Military Services all
    wore the same combat uniform prior to 2002, what is the status of the
    Military Services working together on the Joint Clothing and Textiles
    Governance Board to develop and field a joint combat uniform?
        General Allyn. The Army's ongoing fielding of Army Combat Uniforms
    in the Operational Camouflage Pattern has been in full compliance with
    section 352, with the enactment of the Fiscal Year 2014 National
    Defense Authorization Act.
        The Services have consistently worked together on the Joint
    Clothing and Textiles Governance Board (JCTGB) to address the topic of
    a common combat uniform. The Army also participates in the JCTGB
    Advisory Group and the Cross-Service Warfighter Equipment Board (CS-
    WEB). The JCTGB Advisory Group meets two to four times a year to
    discuss policy and to review items to be presented at the JCTGB. The
    CS-WEB meets three to four times a year and is the forum where the
    Services brief current and planned development efforts and
    opportunities for collaboration.
        Admiral Howard. The Navy participates as a member of the Joint
    Clothing and Textiles Governance Board (JCTGB); the next JCTGB meeting
    is planned for June 2016 and the topic of a joint Service combat
    uniform is on the agenda. The Navy is in compliance with section 352 of
    the fiscal year 2014 NDAA as well as DODI 4140.63, Management of DOD
    Clothing and Textiles (Class II). These documents provide the current
    guidance for combat uniforms for acquisition and procurement that the
    Services must follow. Combat uniforms have evolved since 2002 with the
    Services' missions and operational responsibilities. The Navy ensures
    personnel safety by utilizing uniforms appropriate to the theater and
    environment. As an appropriate efficiency measure, Navy Service
    personnel adopt the Services' requisite combat uniform when assigned as
    Individual Augmentees to Army or other Service units.
        General Paxton. Section 352 of the fiscal year 2014 NDAA contained
    a provision which stated, ``The Services are not prohibited in the
    continued fielding or use of pre-existing service-specific combat
    uniforms as long as the uniforms continue to meet operational
    requirements.'' Since the establishment of the provisions contained in
    this section, the Marine Corps has not had any changes to the
    requirements of our current, service developed and patented combat
    uniforms as they continue to meet our operational needs. The Marine
    Corps participated in the drafting of Joint criteria via the Joint
    Clothing and Textiles Governance Board for a future combat utility
    uniform. The Marine Corps continues to fully cooperate and share with
    all of the other services in the pursuit of technology improvements for
    current and future combat utility uniforms.
        General Goldfein. Threats to our Military Service members and the
    roles they are required to assume have evolved since 2002. For example,
    airmen have assumed joint service ground support roles that exposed
    them to what two decades ago would have been considered uncommon
    threats. As a result, the Air Force recognized the need for fire
    retardant, ground combat uniforms, and partnered with the Army in
    October 2010. The Air Force adopted the Army's Operation Enduring
    Freedom Camouflage Pattern combat uniform as a joint service solution
    that minimized those emerging threats to our airmen.
        The Air Force continually supports collaborative efforts and has
    representatives, who routinely act as advisors to principal members of
    the Joint Clothing and Textiles Governance Board, as well as its
    subsidiary, the Cross-Service Warfighter Equipment Board (CS-WEB).
                                   __________
                  Questions Submitted by Senator Mazie Hirono
                                   readiness
        30. Senator Hirono. Admiral Howard, you stated in your written
    testimony that full recovery of the material readiness of the Fleet is
    likely to extend beyond 2020. What are the implications of a Fleet that
    won't achieve readiness for another four years at the least? What areas
    are suffering from a lack of support? Which areas are most concerning
    to you?
        Admiral Howard. The President's Budget for fiscal year 2017
    provides sufficient funding to needed areas for continued support of
    our readiness recovery efforts. My concerns remain having stable
    funding, improvement in on-time execution of ship and aviation depot
    maintenance, and steady-state operations. The main implication of
    recovering full readiness beyond 2020 is the impact to our contingency
    force posture during the readiness recovery period. In the near term,
    we are confident in our ability to provide presence, but surge capacity
    has been diminished.

        31. Senator Hirono. General Goldfein, your written testimony stated
    that the Air Force is ``currently one of the smallest, oldest, and
    least ready forces across the full-spectrum of operations in your
    history.'' Can you please explain the implications of reduced readiness
    and the impacts on morale and retention? Does the Air Force have a plan
    to increase readiness in future years?
        General Goldfein. Reporting indicates that the longstanding, very
    high operational tempo has negatively affected Air Reserve Component
    and Active Duty retention and invariably a reduction in combat
    capability. One example involves the departure of 60 air refueling
    crews from our Reserve Component in the last eight months, which we
    attribute partially to the high ops tempo our personnel endure.
        The Air Force continues to pursue its readiness recovery goal of 80
    percent ready. Unfortunately, the conditions required to rebuild
    readiness have not yet been set. Demand for Air Force capabilities has
    created an environment where readiness is being consumed faster than we
    can build it. The Air Force's plan provides the resource foundation
    (starting with end strength increases) from which to begin rebuilding
    readiness in fiscal year 2020, if deployment conditions improve and
    global force management reforms show promise in achieving this end. We
    will regularly analyze actual conditions and adjust the resource plan
    accordingly, but the readiness enterprise depends on consistent,
    predictable funding.

        32. Senator Hirono. General Goldfein, you mentioned in your written
    testimony that our adversaries are challenging our competitive
    advantages and closing the gap with regard to capability. What must the
    Air Force do to regain our competitive advantages? What specific areas
    require additional attention?
        General Goldfein. Our potential adversaries are keenly aware of the
    importance of air superiority to our Nation's way of war. The threats
    we will have to face continue to evolve in technology and complexity.
    Potential adversaries are acquiring advanced fighters on par with or
    better than our legacy fleet, developing sophisticated and networked
    early warning radar surveillance systems, and fielding surface to air
    missile systems with increasing range and lethality.
        To address these challenges, we must improve capability and
    capacity to allow us to maintain our competitive advantage across the
    full spectrum of operations and readiness. Investment in the re-
    capitalization and modernization of our fighter and bomber fleets,
    incorporating improvements in Electronic Warfare, advanced weapons
    inventory, cyber security, and interoperability will allow us to
    operate and survive in the higher threat environments. In addition, we
    are reviewing options to provide for affordable and sustainable
    rotational capacity that can help us preserve readiness across the full
    spectrum of operations. Lastly, we must accelerate the implementation
    of acquisition reform in order to increase our agility and
    responsiveness in order to develop and field new technologies to
    counter rapidly advancing threats.
                                     energy
        33. Senator Hirono. General Allyn, Admiral Howard, General Paxton,
    and General Goldfein, the national security of our country is greatly
    dependent on the implementation of energy security efforts. By
    decreasing our energy footprint, we enable our forces to more efficient
    and lessen our dependence on fuel. Can you please provide an update on
    how the fiscal year 2017 budget reflects your efforts to reduce
    consumption, use alternative clean sources and increase U.S. energy
    security?
        General Allyn. All Army energy investments are focused on enhancing
    mission effectiveness, building resiliency of our energy
    infrastructure, and containing or reducing costs.
        To reduce consumption and increase efficiency on Army
    installations, the Army's fiscal year (FY) 2017 budget request is for
    $164 million in energy efficiency improvements. In addition to this
    amount of direct investment, the Army plans to partner with the private
    sector for an additional $180-$220 million in investment through energy
    savings performance contracts (ESPCs). The Army is the largest user of
    ESPCs in the Federal Government. Since 1992, we have leveraged over
    $2.2 billion in third party investments for energy efficiency
    improvements, including over $500 million in the last two years alone.
    Since 2010, the Army has saved more energy through ESPCs than is
    consumed in a year at Fort Bragg, our largest installation.
        In response to risks posed to our vulnerable energy grid, the
    Army's budget request reflects our efforts to improve the resiliency of
    Army installations and increase energy security through the use of on-
    base renewable sources of energy. Our fiscal year 2017 budget requests
    funding for the Office of Energy Initiatives (OEI), which helps to plan
    and develop third party-financed renewable energy projects. The Army
    currently has 159 mega-watts (MW) of renewable energy generation
    capacity installed on our installations, of which 40.5 MWs of this
    amount was installed in the past twelve months. These projects produce
    power equivalent to 12 percent of the Army's total consumption. The
    Army is developing a further 400MWs of projects, representing over $800
    million in private sector investment. All of these projects are at or
    below conventional electricity costs, and are expected to save the Army
    $250 million.
        The Army's fiscal year 2017 Operational Energy (OE) budget request
    of $1.28 billion recognizes that improved use of energy enhances
    mission capabilities. The bulk of this request, $1.084 billion, is for
    Equipment Procurement, which funds energy efficient equipment that will
    reduce physical and logistical burdens on our soldiers. A portion of
    this budget will fund the Army's Improved Turbine Engine Program, which
    will develop a new engine for the medium helicopter fleet with 50
    percent more power, 25 percent improvement in fuel efficiency, 35
    percent decrease in maintenance costs, and 20 percent longer engine
    life.
        Admiral Howard. Energy security is fundamental to executing Navy's
    mission both afloat and ashore. Reliance on petroleum-based fuels poses
    critical strategic vulnerabilities and creates operational constraints.
    The Navy's investments in energy efficiency and alternative fuels
    increases energy security by extending range and endurance, shortening
    the length of the logistics tail, and reducing supply chain
    vulnerabilities.
    I. Operational Energy Investments
        Navy's PB17 investment in Operational Energy initiatives aims to
    enhance combat capability and effectiveness through innovative
    technologies, operational procedures, culture change initiatives, and
    the qualification of advanced alternative fuels for Fleet-wide use.
    These initiatives focus on strengthening our Naval Power and providing
    the warfighter with the tools to continue taking the fight forward.
    Energy efficient technologies and procedures enhance our warfighting
    capability by extending our combat range, `on station' time, and
    mission endurance, while also netting some savings.
    II. Shore Energy Investments
        Navy is making investments to reduce energy consumption, increase
    the use of alternative energy resources and improve energy security for
    our installations. To reduce our energy consumption, Navy is investing
    in facility upgrades, smart energy analytics, and utility system repair
    projects. These investments help improve energy security, energy
    management and provide advanced capabilities like demand response and
    load shedding.
        Navy remains highly committed to improving our energy security
    posture. We are focused on improving our utility infrastructure
    backbone of our installations and ensuring reliable, resilient power
    for our mission-critical assets. In addition to improving resiliency
    and reducing consumption, Navy is working closely with its private
    sector partners for advances in this area.
        General Paxton. The Marine Corps is addressing operational energy
    from multiple avenues in order to holistically develop sustainable
    expeditionary solutions. These avenues include analysis of operational
    energy risk to identify current and future capability gaps, development
    of technology solutions, and adoption of changes to behavior at both
    the operational and tactical level to better use the energy we are
    consuming. Specifically, we will accomplish this by:

          Operational Energy Risk Analysis--USMC is conducting
    wargaming and experimentation to inform future capability needs and
    assess projected shortfalls in these capabilities. USMC is also
    coordinating with geographic combatant commanders to conduct exercises
    and OPLAN energy risk analysis to identify energy-based risks to war
    plans and assess possible mitigation options. Insights from these
    exercises and analyses will inform planning and enable more effective
    use of energy and maximize the operational effectiveness.
          Advanced Technology Development--USMC is working closely
    with the Research and Development offices within Department of Navy,
    Department of Army, and Office of the Secretary of Defense to develop
    technology solutions to address expeditionary energy capability gaps.
    We are pursuing solutions in the areas of energy efficiency, energy
    harvesting, energy storage, and consumption management. Technologies
    include advanced vehicle power train systems, high performance
    photovoltaic energy generation, wearable kinetic energy harvesting, and
    sensors that monitor energy usage.
          o  The Office of Naval Research Fuel Efficient Medium Tactical
    Vehicle Replacement (FEMTVR) program is developing the technology to
    improve fuel efficiency of the Marines' most ubiquitous truck. FEMTVR
    will demonstrate efficiency gains of over 15 percent which equates to
    the ability to drive over 90 miles further on a tank of gas.
          o  The Joint Infantry Company Prototype (JIC-P) is a wearable
    energy system that integrates human borne energy harvesting with
    personal power management and central power storage. JIC-P will
    increase the electrical energy sustainment capability of dismounted
    warfighters in austere environments and extend the time between
    resupply from 36 hours to multiple days.
          o  The Energy Command and Control project is a system of
    networked tactical fuel consumption, distribution, and capacity sensors
    combined with analytics that provides energy information to the MAGTF
    common operational picture. This actionable information is critical for
    planning at the operational level and has been demonstrated to enable a
    Marine unit to travel 190 miles further on the same fuel.
          Behavior Change--While the development and deployment of
    advanced technology to reduce energy use is required, it alone is not
    sufficient to maximize combat advantage and meet USMC goals.
    Technological capabilities must be combined with changes in behavior.
          o  The sensors being developed in the Energy Command and Control
    project to monitor energy usage will be used to provide real-time
    feedback to operators on their fuel usage enabling them to reduce fuel
    consumption by changing their driving habits (i.e. idle time).
          o  The USMC is conducting a behavioral analysis to discover and
    document energy related behavior and identify behavior modification
    options that could significantly increase operational reach of Marines
    by reducing ground vehicle fuel usage. In addition, the operational
    energy risk analyses are identifying possible changes in doctrine at
    the operational level that will reduce energy-related risk to
    completing the mission.

        General Goldfein. The Air Force is focused on enhancing mission
    assurance through energy assurance, and is optimizing our capabilities
    in order to maximize combat readiness and reduce mission risks. As part
    of its approach, the Air Force is aggressively pursuing clean facility
    energy projects, which can serve as critical investment building blocks
    to resilient energy systems, and is looking at both direct and third-
    party financing options to develop energy projects and optimize its
    energy demand. In February 2016, the Air Force established the Air
    Force Office of Energy Assurance (OEA), a central program office
    dedicated to the development, implementation, and oversight of
    privately-financed, large-scale renewable and alternative energy
    projects. The OEA, which will leverage partnerships with the Army and
    Navy, will take an enterprise-wide approach to identify and facilitate
    energy projects that provide resilient, cost-effective, cleaner power
    to Air Force installations.
        The Air Force is also investing in a broad spectrum of operational
    energy initiatives impacting the way airmen behave, weapons platforms
    are maintained and modernized, and processes are enhanced. Improving
    the energy productivity of our weapon systems and installations will
    increase capabilities, provide the Air Force with strategic energy
    agility, and mitigate the mission, geopolitical, financial, and
    environmental risks posed by a reliance on specific resources. Included
    in the fiscal year 2017 budget request is more than $600 million for
    projects that will improve current and future operational capabilities.
    One such project is the work the Air Force is doing with advanced
    adaptive engines. This research and development effort may provide up
    to 30 percent more range, 25 percent better fuel efficiency, and a 10
    percent increase in thrust. The Air Force is also looking at process
    improvements. For example, Air Mobility Command has implemented
    multiple process improvements, such as smart cargo loading, which have
    resulted in a cost savings of $500,000 per day. These efforts are
    leading to improved capabilities for our warfighters and have improved
    aviation energy productivity by 6 percent over the last five years.
                                    funding
        34. Senator Hirono. General Allyn, you mentioned in your written
    testimony that the fiscal year 2017 Army Budget base request is $1.4
    billion less than the fiscal year 2016 enacted budget. What specific
    areas suffer from this lesser budget number? How does this impact your
    readiness and ability to execute your missions?
        General Allyn. In the near term, the fiscal year (FY) 2017 budget
    builds operational readiness for potential major combat operations
    while also ensuring deploying units are ready for ongoing contingency
    operations. However, because it is $1.4 billion less than fiscal year
    2016 enacted, the prioritization of Army readiness comes at the expense
    of modernization and installation sustainment. The Army is forced to
    reduce investments in procurement, purchasing lower quantities of
    equipment than previously planned. Funding for facility sustainment
    accounts is also reduced, causing an increased backlog in facility
    maintenance. The funding levels constrain the Army's ability to achieve
    the desired balance between near term readiness for the current
    environment, and long term modernization required for future security
    challenges. Without additional funding, the Army will continue to make
    trade-offs to best implement the defense strategy and address emerging
    requirements with limited resources available.
                                 modernization
        35. Senator Hirono. General Allyn, Admiral Howard, General Paxton,
    and General Goldfein, modernization and readiness are often at odds
    with each other: Funding that is used for readiness, which is an
    immediate need, is often used at the expense of modernization. Can you
    talk about the importance of modernization in your respective commands?
    Are you finding a balance between modernization and readiness? Which
    areas requiring modernization are most concerning to you?
        General Allyn. You are correct that we have had to delay
    modernization in order to support near-term readiness because of budget
    reductions. We have been doing so since 2011, and the longer we have to
    stay at reduced modernization levels, the farther behind we will fall
    to future adversaries. A trained Army requires modern equipment to win.
        While we are deliberately choosing to delay several modernization
    efforts to stay within our budget constraints, we do have priorities:
    Aviation, the Network, Integrated Air Missile Defense, Combat Vehicles,
    and Emerging Threats. In the area of emerging threats, we are looking
    for innovative technologies focused on Active protection systems (both
    ground and air), aircraft survivability, future vertical lift, directed
    energy weapons, cyber, and integrated electronic warfare.
        Admiral Howard. Modernization of our fleet that builds on current
    capabilities as well as introduction of new systems that enhance our
    future capabilities is vitally important to the navy as we seek to
    maintain our robust, power projection advantage over our adversaries'
    ever improving A2/AD posture. Our investment in modernization also aims
    to achieve Defense Planning Guidance's tenet of developing a smaller
    yet highly capable ready force that meets future, emerging challenges.
    Achieving this objective through smart investments also enables the
    navy's balanced superiority in Air, Surface and Submarine warfare areas
    over our adversaries in a complex, maritime threat environment. To that
    end, we are continuing in our commitment to modernization through
    investments in priority programs like the Joint Strike Fighter, legacy
    F/A-18 service life extension, P-8 procurement, DDG/CG modernization,
    Ohio Replacement Program and the development of unmanned systems.
        Finding the balance between modernization and readiness is a
    challenge on which the navy is principally focused in a pressurized
    budget environment. Investments we have made in readiness over the last
    couple of budget cycles have raised capacity in naval shipyards and
    aviation depots. However, we have also experienced requirements
    increase resulting from continued high operations tempo, increased need
    for combating cyber security threats, costs associated with
    prepositioning forces forward and additional training requirements for
    newly hired artisans in our depot, maintenance activities. To achieve
    the balance between modernization and readiness in this austere
    environment, the navy is looking into innovative solutions beyond just
    financial investments. One of the ways is through achieving high
    velocity learning in every level of the naval service. This concept is
    outlined in the CNO's ``Design for Maintaining Maritime Superiority''
    and leverages on building a culture of innovation and creativity and
    institutionalizing the rapid adoption and implementation of best
    concepts, techniques and technologies to achieve personal and
    organizational performance objectives without additional resources.
    Another example of innovative solutions is our approach to making smart
    investments in modernization. More than we have in the past, the navy
    is taking a systematic approach by analyzing every phase of the kill
    chain to focus on most effective delivery methods and investing in most
    vulnerable phases to achieve kill chain wholeness. This methodology is
    allowing the navy to make the most out of our modernization dollars and
    move toward balancing readiness and modernization.
        One concern the Navy has with modernization is maintaining
    continuity of capabilities in the near-term (current FYDP) through the
    long-term (into 2030 and beyond) to sustain superiority in all naval
    warfare areas. In some instances, on a case-by-case basis, the navy
    will have to make risk-based, priority decisions to either lean toward
    near-term capabilities over the long-term or vice versa. In terms of
    modernization investment areas that are of most concern, the navy is
    currently placing emphasis on 15 key warfare and 2 force generation
    mission areas including the undersea leg of the strategic deterrent
    triad, which is foundational to our survival as a nation, the defense
    against long-range precision strike and cyber resiliency, to name a
    few.
        General Paxton. We must constantly balance between operational
    readiness and institutional readiness; between capability and capacity;
    between current and future operations; between steady-state and between
    surge; and between low-end and high-end operations as well as the
    training that goes with them. We constantly seek these balances as we
    face simultaneously increasing and varied demands from the combatant
    commanders.
        In our current challenging fiscal environment we are struggling to
    maintain all of those balances. The Marine Corps is no longer in a
    healthy position to generate current readiness and simultaneously reset
    all of our equipment while sustaining our facilities and modernizing to
    ensure future readiness. We have consciously and properaly prioritized
    near term readiness in order to meet COCOM demand. We have continued to
    provide the geographic combatant commanders with operationally ready
    forces to execute all of their assigned missions, not the full spectrum
    of possible operations.
        In addition to this, operational readiness is generated at the cost
    of our wider institutional readiness. This year I must again report
    that approximately half of our non-deployed units are experiencing some
    degradation in personnel, equipment, or training readiness. We continue
    to prioritize modernization for the most important areas, particularly
    the replacement of aging aircraft and amphibious assault vehicles, but
    we are deferring other needs. Our installations continue to be the
    bill-payers for today's readiness, putting the hard-earned gains from
    the past decade and much-needed military construction further at risk.
        While our deployed forces continue to provide the capabilities
    demanded by the combatant commanders, our capacity to do so over time
    and in multiple locations remains strained. Our deployment-to-dwell
    ratio (currently 1:2 average) continues to exceed the rate that we
    consider to be sustainable in the long term, 1:3. The strains on our
    personnel and equipment are showing, particularly in aviation,
    communications, and intelligence communities.
        We have already been forced to reduce the capacity available to the
    combatant commanders by reducing the number of aircraft assigned to
    several of our squadrons, e.g. F/A-18s and those of the deployed MAGTFs
    like SPMAGTF-Crisis Response Africa. We expect to continue those
    reductions throughout 2017. While we are able to maintain steady-state
    theater security cooperation, build partnership capacity, and sustain
    mil-to-mil engagements, our ability to surge is increasingly
    challenged.
        Furthermore, a return to BCA-level spending/full sequestration
    would significantly exacerbate institutional readiness imbalances. More
    tradeoffs would be made in acquisitions of needed equipment, essential
    training, living and work spaces, and end strength to protect the
    Marine Corps' performance of its statutory obligations. Sequestration
    impacts on key modernization programs will have catastrophic effects on
    achieving desired capabilities to defeat emerging threats and will
    place an unacceptable burden on legacy ground combat tactical vehicle
    (GCTV) programs such as the Assault Amphibian Vehicle (AAV, 40 + years
    old), the HMMWV (out of productions since 2012), The Light Armored
    Vehicle (LAV, average age 33 years), and M1A1 tank (average age 26
    years).
        These challenges in balancing readiness and modernization provide
    context for today's budget environment. Your Marine Corps remains ready
    to answer the nation's call, but with no margin for error on multiple
    missions in which our indicators and warning are diminished, our
    response time is strained, and within which failure is not an option.
        General Goldfein. Our fiscal year (FY) 2017 budget prioritized
    capacity and readiness over modernization. We are currently facing a
    modernization bow wave. The modernization efforts in the Air Force are
    critical to our ability to gain and maintain control of the air and
    space domains to support the joint force. With the proliferation of
    advanced technologies/capabilities, the gap between our capabilities
    and those of potential adversaries is closing.
        In the mid-term (fiscal year 2022-2027), the Air Force will be
    unable to meet modernization requirements, recover from below 50
    percent readiness levels for full spectrum conflict, and maintain
    National Defense Authorization Act-required force capacity. The two
    biggest areas of concern to the Air Force are the nuclear enterprise
    and our fighter force. With the recapitalization of the nuclear
    enterprise and our conventional fighter force all taking place in the
    2020s, the Air Force will not be able maintain readiness and capacity
    within current fiscal constraints if the present strategic environment
    changes. While we are able to meet operational requirements in the
    present strategic environment, this will all change if there are
    increased operational demands put on the Air Force; especially if the
    current fiscal environment does not change.
                                   rebalance
        36. Senator Hirono. Admiral Howard, in terms of the Rebalance and
    given our current threat environment and the actions of China and North
    Korea in the Asia-Pacific, do you see Hawaii as a strategically
    important area in terms of readiness? How important is it to have an
    Active and ready force prepositioned in Hawaii?
        Admiral Howard. Without question Hawai'i's geo-strategic location
    is vitally important in terms of readiness due to the tyranny of
    distance from the West Coast to the distant Indo-Asia-Pacific operating
    areas. Located 2000 miles closer to these operating areas, Hawai'i
    enables the Navy to stay on station longer and respond faster. These
    great distances from CONUS underscore how indispensable Hawaii is to
    Navy's readiness. Hawai'i's location and defense infrastructure offset
    this tyranny of distance.
        Having an active and ready Naval force prepositioned in Hawaii is
    an essential element of Navy's readiness. Hawaii is home to U.S.
    Pacific Fleet and the preponderance of Navy's non-CONUS based ships,
    and is ideally suited to support the Asia-Pacific rebalance.

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                   2017 AND THE FUTURE YEARS DEFENSE PROGRAM

                                  ----------

                             TUESDAY, APRIL 5, 2016

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

        THE STATE OF PUBLIC SHIPYARDS TO MEET CURRENT MISSION NEEDS AND
                             INVESTMENT STRATEGIES

        The subcommittee met, pursuant to notice, at 2:31 p.m. in
    Room SR-222, Russell Senate Office Building, Senator Kelly
    Ayotte (chairman of the subcommittee) presiding.
        Committee members present: Senators Ayotte, Fischer,
    Rounds, Ernst, Shaheen, Hirono, and Kaine.

          OPENING STATEMENT OF SENATOR KELLY AYOTTE, CHAIRMAN

        Senator Ayotte. Good afternoon. This hearing of the
    Subcommittee on Readiness and Management Support will come to
    order.
        I want to thank Ranking Member Senator Kaine for his
    continued leadership on defense issues and eagerness to work
    together in a bipartisan manner on behalf of our men and women
    in uniform.
        I am very pleased to have our witnesses here today. We are
    joined this afternoon by Vice Admiral William Hilarides,
    Commander of the United States Naval Sea Systems Command; and
    Vice Admiral Dixon Smith, Commander of United States Navy
    Installations Command. I want to thank both of you for being
    here and for your leadership and service to the country.
        As we prepare for the committee markup of the National
    Defense Authorization Act, the focus of today's hearing is on
    our Nation's four public shipyards: Norfolk, Pearl Harbor,
    Puget Sound, and the Portsmouth Naval Shipyard. These four
    public shipyards and the skilled Department of Defense
    civilians who work at these shipyards are major national
    security assets for our Navy and our Nation, performing
    mission-critical depot and intermediate-level maintenance,
    modernization, and repair on our Nation's naval fleet.
        In order to protect our economic and national security
    interests, our Nation needs the world's most capable, well
    maintained, and combat-ready fleet. To ensure we have such a
    fleet, our Nation looks to the Navy and the Navy looks to the
    thousands of Department of Defense skilled civilian artisans
    who work at our public shipyards.
        To fulfill this critical national security role, our public
    shipyards must have a fully trained and supported workforce
    that is appropriately sized, as well as modernized
    infrastructure, including dry docks, piers, production shops,
    and wharfs. That is what more than 33,000 skilled shipyard
    workers deserve and what our national security interests
    require.
        I have been fortunate to witness the excellence of our
    shipyards at the Portsmouth Naval Shipyard, where many of my
    constituents work. The week before last, I was privileged to
    attend and speak at the Portsmouth Naval Shipyard's trade
    apprentice program and worker skills progression program
    graduation. I was so impressed by the comprehensiveness of the
    training, as well as the quality of the more than 180
    individuals who graduated from the program. The graduates
    actually logged thousands of hours of on-the-job training,
    trade theory and academic training, honing their trade and
    sharpening their skills.
        Portsmouth is known for programs like this and others that
    promote labor-management collaboration, empower the workforce,
    and create a culture that values high standards and continuous
    learning. In fact, this subcommittee highlighted these efforts
    and Portsmouth's dedication to improving its workforce in a
    hearing that we had before this committee last July, and in
    that hearing, Mr. Paul O'Connor testified at the hearing. I am
    so pleased to see Paul here today in the audience.
        In part because of these programs, Portsmouth has
    solidified its reputation as the Navy's Center of Excellence
    for fast attack nuclear-powered submarine maintenance,
    modernization, and repair. These are not just words. Portsmouth
    Naval Shipyard consistently proves it by completing submarine
    maintenance ahead of schedule and under budget. Last year,
    Portsmouth executed the fastest engineering overhaul of a Los
    Angeles-class submarine in history, completing the work on the
    USS Alexandria 2 weeks ahead of schedule and $9 million under
    budget. We are not too proud. We have seen similar top-notch
    performances at Portsmouth with the USS Springfield,
    California, Topeka, and Dallas.
        The challenge before us is to ensure Portsmouth and the
    other three public shipyards have the resources that they need
    to improve performance even further. Our sailors, our combat
    commanders, and our country depend on our public shipyards.
    These civilians perform a vital national security mission, and
    we should avoid policies that make their jobs harder or fail to
    reflect the importance of their work like sequestration,
    government shutdowns, and misguided TDY [temporary duty]
    policies.
        This subcommittee is also particularly eager to discuss at
    the hearing with both of you today the performance of the
    public shipyards, including areas of excellence and areas that
    we need to continue focusing on, current and projected
    workload, and the personnel and infrastructure capacity of the
    public shipyards necessary to execute that workload, the
    importance of investing in infrastructure facilities and
    equipment, and why the projects requested in the 2017 budget
    request are needed, plans for the dry dock modernization at all
    four shipyards, apprenticeship and training programs like the
    one that I referenced at the Portsmouth Naval Shipyard, and
    efforts to codify and share best practices among all of our
    shipyards.
        Before we hear from our witnesses, I want to touch, in
    particular, on one area we will discuss, which is long-term TDY
    policies that negatively affect the civilian shipyard workers
    across the country. This is something that I have heard quite a
    bit from our shipyard.
        As both of you point out in your joint prepared statement,
    on any given day, hundreds of naval shipyard workers are on
    travel to conduct critical maintenance of our Navy ships. That
    travel is central to maintaining our naval readiness and to
    sharing expertise and resources. As the Senate Armed Services
    Committee stated in its report on the national defense
    authorization last year, we must ensure that workers conducting
    long-term TDY for off-yard work are fully supported and
    encouraged.
        Admiral Hilarides, based on your January 19th letter, I
    look forward to hearing why you believe that the long-term
    temporary duty policy for shipyard civilians is having a,
    quote, negative impact on the naval shipyards' ability to
    effectively and efficiently conduct Navy ship maintenance and
    actually, quote, has the potential to increase the end cost of
    projects.
        I look forward to the testimony of our witnesses and to
    continue our work together to ensure the skilled men and women
    at our public shipyards have what they need to continue their
    work which is so vital to our naval readiness and our national
    security.
        I thank our witnesses again for coming here to testify this
    day and for your service to our country.
        I would now like to call on my ranking member, Senator
    Kaine, for his opening remarks. Senator Kaine?

                     STATEMENT OF SENATOR TIM KAINE

        Senator Kaine. Great. Thank you, Chairwoman Ayotte.
        Thanks to our witnesses for being here today. I so much
    enjoy working on this committee with our chair and we have had
    a number of hearings bearing upon the workforce that builds the
    largest items manufactured on the planet earth that are so
    important to our Nation's defense. I look forward to your
    testimony today.
        We have to recognize the collective condition of our
    shipyards, both the workforce and the infrastructure, and the
    ways that we can improve that to do our job better in the
    future. Age and the deterioration and even the design of the
    shipyard infrastructure can negatively impact the work that we
    do. GAO [Government Accountability Office] found for fiscal
    year 2010 to fiscal year 2013, there were 96 ships that were in
    maintenance availabilities whose maintenance was affected
    because of inadequate infrastructure, either obsolescent
    because it was designed a long time ago or needing significant
    maintenance.
        I am very happy to see that the Navy's proposal is to
    exceed the minimum 6 percent capital investment threshold for
    shipyards as required by law with a 7.1 percent investment in
    fiscal year 2017 proposed.
        However, for an awful lot of the public shipyard workforce,
    the unfortunate effects of the RIFs, reductions in force, in
    the 1990s have come home to roost in the workforce. I just have
    a couple of exhibits on the table I think before the witnesses
    and also before all the staff members and all the committee
    colleagues.
        Chart 1 shows an age demographics bathtub which resulted
    from workers being let go in the 1990s, and the compounding
    effect of sequestration has deepened this bathtub effect of
    worker experience. If you look at chart 1, you see significant
    numbers of the public shipyard employees in the 26- to 30- and
    31- to 35-year-old age range, but then you see this dip in the
    kind of more experienced upper level workers because of that
    RIF policy in the 1990s.
        We have a second chart, and it shows that currently one-
    third of all public shipyard employees have less than 5 years
    experience, and the average level of experience of the entire
    workforce is only 8 years. The Navy has, I think, a desired
    goal that that should be between 12 and 15 years, and at 8
    years, we are a little bit short on the experience side,
    obviously. It is going to take a number of years to make a
    significant change and bring that average up to 12 to 15 years.
        But there is some good news and it is the last chart. It
    shows what the hiring has been--hiring efforts and training
    investments in the shipyards with the target manning level of
    33,000 by fiscal year 2016. You can see how it has ramped up as
    we have tried to fill in that bathtub that was left by the RIF
    policies.
        But if the sequester comes back full force, some of these
    best laid plans of getting back to where we ought to be are
    really in jeopardy. I want to echo the comments that were made
    by the chair about that.
        I also represent a State with a wonderful public shipyard
    in Norfolk but also one that has a lot of private shipyards
    too. This is a hearing about the public shipyard workforce, but
    I do want to say I am pleased that the Navy continues to
    grapple with how to kind of structure the entire level of work
    and provide as much predictability and balance as possible
    across the public and private shipyards.
        For example, I understand that the Navy shifted three
    attack submarine availabilities to the private sector in fiscal
    year 2016 and for 2017 in addition to increasing private sector
    contracting opportunities in an area to try to even out the
    workforce. The whole cycle of hirings and RIFs, even if they
    are temporary, can put uncertainty into the shipyard workforce
    that does the work that we need.
        I will conclude by just saying I also am really interested
    in talking about an issue that the chairwoman mentioned, which
    is best practices on the apprenticeship side. I think these are
    some of the best workforce programs that we have in the United
    States. I think if you look broader than just the issue of the
    day, we have tended to, you know, maybe for a couple of
    generations really promote college education and demean,
    downgrade, or kind of put at second class apprenticeship,
    career, and technical education opportunities when we know from
    experience these are great jobs that you feel patriotic doing
    every day, that you can be employed for a very long time. We
    need to do the work to let the public know how high quality
    these are.
        I am encouraged by the induction of nearly 1,000 first-year
    apprentices into the program and the hiring of over 650 nuclear
    and non-nuclear engineers in fiscal year 2016 and the
    apprentice school at Newport News, which is a private program
    which is going to celebrate its 100th anniversary here within
    the next couple of years. These core principles of
    craftsmanship, leadership, and scholarship in service of the
    Nation, in service of our Nation's defense, and also in service
    of setting the example of the American manufacturing might is
    something that we can be proud of.
        Madam Chair, thanks for holding this hearing today, and I
    look forward to asking questions and learning from our
    witnesses. With that, I will turn it back to you.
        Senator Ayotte. Thank you so much, Senator Kaine.
        I would now like to call on Admiral Hilarides.

    STATEMENT OF VICE ADMIRAL WILLIAM H. HILARIDES, USN, COMMANDER,
                UNITED STATES NAVAL SEA SYSTEMS COMMAND

        Admiral Hilarides. Madam Chair, Ranking Member Kaine,
    distinguished members of the committee, thank you for inviting
    me and us here today to be part of this hearing. I am really
    honored to be here.
        Vice Admiral Smith and I have submitted our full joint
    statement to the committee, which we ask to be made part of the
    hearing record. We would now like to provide a brief opening
    statement.
        Senator Ayotte. Yes, please.
        Admiral Hilarides. Over the past several years, our four
    public naval shipyards, Portsmouth, Norfolk, Puget Sound, and
    Pearl Harbor, have dealt with some difficult challenges, as you
    noted, a government shutdown, a hiring freeze, furloughs, aging
    infrastructure, in the face of an increasing workload, which
    has led to an imbalance in our capacity and our requirements.
        I am pleased to say that we are well down the road to
    recovery. The Navy's fiscal year 2017 budget request includes
    funding to staff our shipyards to 33,500 full-time employees so
    that we can execute our peak workload.
        However, having the right number of workers on board is the
    right first step, and over the last 3 years, our shipyard
    workforce has grown by roughly 4,000 full-time employees. When
    you combine that with natural attrition, we have hired more
    than 10,000 people in the last 3 years, and that is reflected,
    Senator Kaine, by the graph that you pointed out.
        Now training is our top challenge. Our shipyards have shown
    a talent for innovation when it comes to training, whether it
    is revolutionizing training of today's new hires to get them on
    the job site faster, taking tanks off decommissioned submarines
    to use as real-life trainers for our sandblasters and painters,
    or utilizing 3D printing to create models to allow for proper
    planning of difficult evolutions. We have changed the way we
    train the next generation of shipyard workers who, not
    surprisingly, learn differently than previous generations, as
    our shipyards continue their innovative efforts to share their
    lessons with each other so that all may benefit.
        Once our newly hired and trained personnel reach the
    waterfront, they quickly realize they are part of something
    special. Working on our Navy's most complicated and powerful
    warships makes them part of our Navy. They do not wear uniforms
    but they do know their work directly impacts global events.
    Without them, our Navy could not be forward deployed. They take
    great pride in their work, and this sense of duty has a lasting
    effect that I believe is the primary reason why people stay at
    our shipyards so long.
        In reading the committee's invitation letter, I was pleased
    to see we share an interest in science, technology,
    engineering, and math [STEM]. I will tell you the Naval Sea
    Systems Command [NAVSEA] is committed to sharing our passion
    for STEM with students of all ages, and our four naval
    shipyards are leaders in this area. They have provided hands-on
    support to a number of national and local fronts, everything
    from first robotics, sea perch, underwater vehicle pool
    challenges, STEM fairs, going to schools to talk about what
    they do, and hosting students at the facilities to see what a
    STEM career looks like. I am exceptionally proud of the men and
    women who volunteer to take their time to be part of these
    great efforts.
        As this is likely the last time testifying before Congress,
    I would like to take the opportunity to recognize the nearly
    70,000 government civilians, including more than 33,000 naval
    shipyard employees who work at NAVSEA. Over my tenure, I
    visited all of NAVSEA's 30-plus facilities to see firsthand the
    remarkable accomplishments. NAVSEA's workforce is a national
    treasure. There is no other organization in the world that can
    do what they do. These unsung Americans allow the United States
    to have the greatest Navy in the world. As I approach
    retirement this summer, I would like to state publicly it has
    been my honor to serve with them.
        Thank you for the opportunity to say a few words, and I
    look forward to answering your questions.
        [The prepared statement of Admiral Hilarides and Admiral
    Smith follows:]

       Prepared Statement by Vice Admiral William H. Hilarides and Vice
                             Admiral Dixon R. Smith
        Chairman Ayotte, Senator Kaine, and distinguished members of the
    Senate Armed Services Subcommittee on Readiness and Management Support,
    we appreciate the opportunity to testify about the Naval Shipyards'
    role in meeting Navy operational requirements. We are here representing
    the more than 33,000 hardworking, dedicated and patriotic
    professionals--both civilian and military--who work in the Naval
    Shipyards. Our Naval Shipyards have been challenged by an increasing
    workload and the effects of hiring freezes and overtime restrictions
    that have contributed to some ships being delivered late out of their
    availabilities. To address this workload-to-workforce imbalance, we
    increased the size of our workforce and enhanced training and
    apprenticeship programs to improve productive capacity. Further, we
    continue to recapitalize our infrastructure to improve workflow and
    better align the shipyard layout and tooling. The men and women,
    military and civilian, who work at our Naval Shipyards are right now
    undertaking these initiatives and tackling these challenges every day.
                                    overview
        The four public-sector Naval Shipyards (Portsmouth, Norfolk, Puget
    Sound, and Pearl Harbor) are wholly government-owned. As the owner of
    the Naval Shipyards, the Fleets provide the funding and task the Naval
    Sea Systems Command to oversee their operation. The Naval Shipyards
    provide the essential organic capability to perform depot- and
    intermediate-level maintenance, modernization, refueling, emergency
    repair work, and inactivations on nuclear-powered aircraft carriers and
    submarines. They also maintain the specific core capabilities to
    support conventional surface ship maintenance.
        Our Naval Shipyards must operate at peak efficiency. Accomplishing
    this requires correctly predicting the ship maintenance required;
    optimizing schedules with operational requirements; properly sizing the
    workforce; embedding the correct critical skillsets in the workforce;
    and enabling our people by equipping them with the right tools,
    facilities, and processes.
        While work is primarily performed onsite at the Naval Shipyards,
    significant depot work is done off-station in Yokosuka, Japan, and San
    Diego, California. Maintenance and repairs are also performed underway
    and around the globe in Guam, Diego Garcia, and elsewhere. Our
    workforce will go wherever and whenever needed to execute repair work.
    On any given day, hundreds of Naval Shipyard workers are on travel to
    conduct critical maintenance on Navy ships.
                        workload-to-workforce imbalance
        The Navy had an increased workload and a less experienced workforce
    over the past three years. In fiscal year 2015, the Naval Shipyards
    executed 4.9 million mandays of workload which is 200,000 more mandays
    than fiscal year 2014 and well below the Navy's projected peak workload
    of 5.4 million mandays in fiscal year 2018. This steady rise has been
    caused in part by SSBN refueling, 688 major overhauls, introduction of
    the Virginia-class as well as evolving fleet composition, high
    operational tempo, and extended deployments.
        Looking back over the past three years, hiring freezes and overtime
    restrictions had a significant impact on the Naval Shipyards.
    Additionally, we have seen a surge in retirements over the last several
    years and a rise in early career attrition. Combining retirements and
    attrition, our shipyards lost 2,125 people in fiscal year 2013, 1,931
    employees in fiscal year 2014 with 2,235 in fiscal year 2015 and 911 to
    date this year.
        To address productive capacity, we are focusing our efforts on four
    specific areas:

          One, hiring to meet increased workload demand and higher-
    than-average retirement rates;
          Two, developing our new workforce through mentoring,
    trade and skill training, and leadership/management training;
          Three, recapitalizing and modernizing the Naval
    Shipyards' infrastructure; and
          Four, implementing modern solutions to information
    technology systems to address cybersecurity vulnerabilities and improve
    productivity.
                                     hiring
        In fiscal year 2013, the Naval Shipyards staffing levels were about
    29,000 full-time employees. With the impact of budgetary constraints, a
    hiring freeze, and increased workload, accelerated hiring has been
    necessary. We continue to aggressively hire apprentices and experienced
    workers to support the increased workload. We are on track to meet our
    2016 goal of an average of 33,500 direct and indirect full time
    employees by the end of the year. These new workers need extensive
    training, and we continue to invest in the required workforce training
    and development. In conjunction with increased hiring to meet workload
    demands, we have increased contracting with the private sector and
    deferred some non-critical work.
                            apprenticeship programs
        The Naval Shipyard Apprenticeship Programs are some of the best in
    the country and have been recognized by the U.S. Department of Labor as
    model programs. These programs seek to produce highly skilled trades
    people who are capable of executing the Naval Shipyards' technical and
    complex maintenance needs. They are a critical investment in workforce
    development that builds a quality workforce for the ship repair
    industry today, and lays the foundation of a longer term investment in
    our future leaders. In fiscal year 2015, we inducted nearly 1,100
    apprentices, will bring in nearly 1,000 new apprentices in fiscal year
    2016, and plan to add nearly 900 more in fiscal year 2017.
                        productivity program initiatives
        The Naval Shipyards continue to invest in the following major
    productivity program initiatives:

          Continuous Training and Development, which uses practical
    hands-on training with learning centers and mock-ups to accelerate
    production-worker skill and proficiency development. These methods
    create an environment where it is safe to fail--meaning that the
    workers have a simulated environment where it is okay to make mistakes
    and to learn from them. The training method is dynamic in that it is
    given to new employees, mid-level mechanics, and journey-level workers
    for critical skills proficiency and qualifications to accelerate and
    leverage knowledge transfer from subject matter experts to our newly
    hired workforce. Continuous Training and Development improves our
    ability to get work right the first time.
          Industrial Processes Corporate Communities of Practice
    bring multi-disciplined, multi-yard groups together and create
    opportunities to stimulate innovation, promulgate best practices, and
    significantly expand knowledge sharing to improve performance. These
    communities have the involvement of engineering and production
    organizations that are aligned to similar work products and processes.
          Continuous Process Improvement efforts are focused on
    Lean Principles, which maps processes to identify and eliminate waste
    in order to improve throughput and cycle time to drive efficiency. In
    addition, a Cumbersome Work Practice Task Force is helping the Naval
    Shipyards challenge requirements to maximize efficiency and
    effectiveness while minimizing cost. New technology insertion is used
    to keep abreast of technology changes and evaluate them for
    incorporation into Naval Shipyard industrial processes for improvements
    in safety, quality, and cost performance.
          Integrated Work Teams responsible for planning and
    executing work with the use of Lean principles are being implemented to
    improve work coordination and efficiency. Project management specifies
    what work is required to be accomplished and when, and the integrated
    work teams determine who does the work and how it is accomplished.
    Efficiencies are created as the work teams perform the same type of
    work across multiple projects or availabilities. By creating stable
    work teams, the execution of work is improved and waste is eliminated.
                                 infrastructure
        Naval Sea Systems Command and Commander Navy Installations Command
    continue to prioritize the sustainment and recapitalization of the
    Naval Shipyards' infrastructure. Investments are focused on mission-
    critical facilities in the Controlled Industrial Area, which primarily
    include production shops, piers, wharfs, dry-docks, and supporting
    utility systems. Other investments maintain and upgrade industrial
    plant equipment capabilities that are integral to performing ship and
    submarine maintenance. Naval Sea Systems Command is also focused on the
    Naval Shipyards' information technology systems. These systems are
    outdated and a challenge to support as we push to meet new
    cybersecurity standards. To address this issue, Naval Sea Systems
    Command is implementing solutions to the maintenance information
    systems which focus on improving workforce productivity and
    cybersecurity vulnerabilities. Overall, facility investments are
    prioritized to address the most critical capability, safety, and
    productivity deficiencies associated with mission-critical facilities.
        In concert with Commander, Navy Installations Command, Naval Sea
    Systems Command is prioritizing military construction projects and
    continues to invest in Naval Shipyard facilities sustainment,
    restoration, and modernization at a level above the Navy facility
    average. The fiscal year 2017 military construction funds of $58
    million will recapitalize infrastructure in the Naval Shipyards by
    improving utility system resiliency and reliability, aircraft carrier
    and ballistic missile submarine maintenance facility capabilities and
    efficiencies, and production shops. Restoration and modernization
    projects will mitigate seismic vulnerabilities, maintain dry-dock
    certification, improve utility system reliability, repair aged and
    failing facilities in the worst condition, improve energy efficiency
    and reconfigure shipyard layout to improve efficiencies. The capital
    investment in Naval Shipyard infrastructure continues to adhere closely
    to the report to Congress and exceeds the minimum level required by law
    (10 USC 2476) for all Department of Navy Depots.
        As part of the Navy's Nuclear Enterprise Review, $42 million was
    added in fiscal year 2016 and the President's Budget submission for
    fiscal year 2017 adds $48 million to accelerate shipyard infrastructure
    improvements from a 17-year recapitalization plan to a 15-year plan.
    Increased funding for sustainment and for restoration and modernization
    is intended to reduce the risk to the Nuclear Enterprise as supported
    by the shipyards.
        In fiscal year 2017, the Naval Shipyard Capital Investment Program
    industrial plant equipment investments include a $25 million defueling
    complex at Portsmouth Naval Shipyard, $9 million in drydock #2 material
    processing improvements at Pearl Harbor Naval Shipyard & Intermediate
    Maintenance Facility, and $4 million in dock crane modernization
    projects for Puget Sound Naval Shipyard & Intermediate Maintenance
    Facility. These investments will help to improve Naval Shipyard
    performance.
                                    summary
        Our Naval Shipyards are comprised of more than 33,000 hardworking,
    dedicated professionals devoted to supporting our Navy. Through our
    Registered Apprenticeship Programs, ongoing training, and productivity
    improvement initiatives, we will continue to invest in this workforce.
    We will gain increased efficiencies through recapitalization of our
    infrastructure. Our goal each and every day is to get our Navy's ships
    back to sea when the Fleet needs them.
        Again, thank you for the opportunity to talk about our critical
    Naval Shipyards and for your continued and crucial support of our Navy.

        Senator Ayotte. Thank you for your leadership and all that
    you have done for the country, for the Navy, and we are so
    grateful for the sacrifices and service of you and your family.
    We wish you the very, very best. Thank you.
        I would like to call on Admiral Smith now for his
    testimony.

       STATEMENT OF VICE ADMIRAL DIXON R. SMITH, USN, COMMANDER,
                UNITED STATES NAVY INSTALLATIONS COMMAND

        Admiral Smith. Thank you, Madam Chair. Madam Chair, Senator
    Kaine, and distinguished members of the committee, thank you
    for inviting Admiral Hilarides and me today to discuss our
    efforts in support of the Navy's four public shipyards and our
    investment in their infrastructure and supporting services.
        Budget shortfalls over the past several years have caused
    Navy to take deliberate risk in the shore infrastructure in
    order to sustain fleet readiness. Within the shore accounts,
    the Navy continues to place a high priority on the
    infrastructure of our Navy shipyards, including military
    construction, facilities sustainment, and facilities
    restoration, and modernization. Shipyard investments address
    the most critical safety and productivity deficiencies in the
    controlled industrial area, which primarily includes
    production, jobs, piers, wharfs, and dry docks.
        Despite today's fiscal constraints, the Navy remains
    committed to improving the condition of our naval shipyards
    which are critical to maintaining the warfighting readiness of
    our force. I am pleased to report in fiscal year 2017, as
    Senator Kaine stated, the Navy will again exceed the mandated
    capital investment of 6 percent across our shipyards.
        Having served as an installation commander and a region
    commander three times, regions which included three of the four
    public shipyards, now as Commander of Navy Installations
    Command, I have witnessed firsthand the challenges and
    opportunities of operating such a complex command and have made
    it my personal priority to support the shipyard commanders and
    their world-class workforce.
        Thank you, Madam Chair. I look forward to yours and the
    committee's questions.
        Senator Ayotte. Thank you, Admiral Smith.
        I would like, first, to begin with a question for Admiral
    Hilarides about the TDY policy. This is something that this
    committee has also discussed as well very recently with Admiral
    Howard who came before our committee. She had testified that
    there should be a concern that we ensure that there is no
    negative impact on the naval shipyards' ability to effectively
    and efficiently conduct Navy ship maintenance. To me, this is
    something that--I talked to her about your prior comments in
    the January letter, and she expressed concern as well that this
    policy could end up costing us more.
        My concern, having heard from, obviously, my constituents
    who work at the Portsmouth Naval Shipyard who are deployed to
    help other shipyards all the time and obviously help the Navy,
    they want to do this. But right now, the new TDY policy is
    negatively impacting their ability to do that. We cannot ask
    them to go off to other shipyards and leave their family and
    actually be in situations where it might cost them more to do
    that based on staying stateside or put them in living
    conditions that do not allow them to focus on their job.
        I wanted to ask you just very specifically based on what
    you have said in the past--I know you have already said that it
    has had a negative impact on the naval shipyards' ability to
    effectively and efficiently conduct Navy maintenance and does
    have the potential to increase the end cost. I know that was
    not the goal in putting the policy in place, but we have to
    look at the actual impact of a policy. I think that is really,
    really important.
        I wanted to ask you today how has the new long-term TDY
    policy negatively impacted the naval shipyards' ability to
    effectively conduct naval ship maintenance. I know the policy
    was intended to save money, but what are these unintended
    consequences that have flowed from it that I think all of us
    think it is important to address?
        Admiral Hilarides. Yes, ma'am. I will attempt to
    characterize it, and I will try to be concise but it does
    require some detail.
        I do stand by the letter that I wrote, and it deals
    specifically with the trade laborers. These are shipyard
    workers who spend 10, sometimes 12 hours a day hauling a
    welding machine cable, pipe. This is hard physical work. They
    are volunteers. To go on TDY in accordance with their union
    contract requires them to volunteer. They will volunteer if
    they are properly recompensed for their travel.
        The travel regulation, as I understand it, when it was put
    in place, said after a month, you can negotiate a long-term
    arrangement with your housing, and you can lower your cost of
    food and other things by shopping smartly. Many people on
    travel can do that. They go to school for 6 months. They can
    find time to get to a store and stock a long-term lease with
    that kind of food.
        These folks, however, are working many times 12 hours a
    day, hard, physical labor, and getting out to a store, finding
    food, coming back, and cooking it just has not been something
    that fits in the kind of day that they have. They spend their
    money at the closest fast food store they can find, and they
    really cannot survive on the money that is provided once it
    starts to get reduced on that.
        I wrote specifically about those folks because we need them
    to volunteer to go do these jobs, many times of which is 3
    months, 4 months. It could even be more than 6 months. We want
    them to go as a team. They are most effective. It is as much an
    effectiveness argument as anything. They are most effective
    when that team is integral and operates together as a team for
    their entire time. When that work team goes, you want them to
    volunteer. You want to properly support them, and you want them
    to get their work done efficiently and effectively.
        If after a month, their allowance goes down and they go
    home and are replaced by someone else, you lose that
    effectiveness in the team, and then of course you have the
    travel costs.
        I wrote my letter. It is in staffing. We have made the
    business case that is being analyzed, as the Vice Chief
    indicated. I will continue to fight to have them see that, yes,
    in fact, in this narrow case, it makes sense to create some
    sort of a standard variance from that rule. We will see how
    that goes over the next few months.
        Senator Ayotte. Well, you know, I certainly appreciate that
    you have made that case, Admiral. I think we are, hopefully,
    going to make our case as well, wanting to make sure that our
    shipyard workers can continue to help and deploy to help with
    the naval maintenance that needs to be done.
        I know today, in fact, every Senator who is representing a
    public shipyard is supporting legislation that I have
    introduced that will ensure that we have a TDY policy that
    allows them to continue doing this. We want to work with you on
    this. I want to thank all my colleagues, including the ranking
    member and, of course, Senator Shaheen and Senator Hirono, for
    their support on this issue because this is a critical issue to
    us and to make sure that we can continue to support our
    workforce as they deploy to other shipyards or other
    maintenance calls from the Navy.
        I also want to ask about the issue of best practices
    because as we look at the number of new hires that have been
    made, I mean, it is a tremendous number of new hires. Having
    recently been at the graduation at the Portsmouth Naval
    Shipyard, this is quite a few people that they are integrating.
    They have an excellent apprentice program. As we think about
    how to improve all of our public shipyards, how are we going to
    make sure that we share best practices whether it is in the
    training space?
        Also, Portsmouth has really done a lot of work on labor-
    management collaboration, empowering the workforce, and this I
    think is what has allowed Portsmouth, for example, to produce
    these submarines back into service under budget and before
    time. How are we in the Navy going to make sure that we do that
    and we are all sharing each other's best practices not only on
    the training and the workforce issues but also just the
    excellence and performance issues so that we all benefit from
    hearing from each other?
        Admiral Hilarides. Yes, ma'am. That is really headquarters'
    responsibility to pull the four shipyards together. We have
    created, really with the help of the shipyards--in many cases,
    it was their idea--things we call communities of practice. You
    get the electrical shop of all four shipyards together in one
    location. You share the best training ideas. You share the best
    workforce development ideas. If there is a new maintenance
    practice that has been created, there is nothing like being
    shown it hands-on as opposed to a written description or even a
    video. Those communities of practice is our principle method of
    taking those best practices and sharing them across all the
    yards.
        Portsmouth is very much in the lead of this, but Pearl
    Harbor's rigging trainer sets the standard for the shipyards.
    Actually some Portsmouth people saw that rigging trainer and
    said, boy, we need one of those at our shipyard. Those
    communities of practice are a predominant way to do that.
        On the labor-management side, my predecessor created a
    thing called the NAVSEA Labor-Management Council. This is a
    council between NAVSEA, the national metal trades, the national
    IFPT, and the other unions that are at the shipyards above the
    bargaining unit, so it is a management-labor discussion that is
    above bargaining and it is about opening up this dialogue about
    how to make sure we have all the pathways to the sharing across
    the shipyards to the very best communications between
    management and labor. When there are shortfalls, they tend to
    go up to the Labor-Management Council, and then I talk at the
    national level with folks like Ron Ault and then we go work on
    it together from a national level to go try to help labor
    relations improve. I think Portsmouth still is at the leading
    edge of that labor-management relationship.
        Senator Ayotte. Well, I thank you for that. I think having
    seen how they together really from the grassroots perspective
    develop their declaration of excellence and things, I hope that
    that is something that we can, obviously, share. I appreciate
    your testimony. Thank you.
        I would like to call on Senator Kaine.
        Senator Kaine. Thank you, Madam Chair.
        I want to talk a little bit about the infrastructure and
    how you guys measure the infrastructure plan that you have. The
    naval shipyard depot maintenance infrastructure plan was issued
    in April 2013. I think it was pursuant to the NDAA [National
    Defense Authorization Act] that was done in 2012. The plan had
    five tenets of infrastructure improvement: eliminating
    maintenance backlogs, remediating seismic deficiencies at any
    of the shipyards, maintaining dry dock certification, improving
    infrastructure layout to increase efficiency, and improving the
    utility system reliability. When the plan was initially done,
    there was an extensive list of things to be done. It was
    estimated that it would take about 17 years to complete each of
    the five tenets.
        Talk to us about progress on that plan. The plan came out
    right as full sequester hit. I am going to get into the
    sequester in a minute. But I am curious as to the timeline of
    the Navy's effort to tackle that significant amount of work to
    keep our shipyards in a very efficient and productive status.
        Admiral Smith. Senator, we have been working at that. As
    you know, with the budget restraints that we have right now, we
    have to prioritize the risk of what we go after. With the
    shipyards, the requirements that Admiral Hilarides has at his
    four shipyards feeds into the fleets, and then the fleets will
    balance that with the requirements they have on the operational
    side. Then those will go up and come up to D.C., and then we
    will rack and stack those in the priorities. Through that
    process, we are making efforts on getting after the shipyards
    and that plan and moving it. I believe we are inside 17 years
    now. I am not sure of the specific----
        Admiral Hilarides. As a result of the review of the nuclear
    forces, that number has actually been reduced to 15 years, and
    that 15 years has been funded as reflected in the 2017 budget.
        Admiral Smith. Whereas, for example, in fiscal year 2017
    where we are funding our facilities sustainment, restoration,
    and modernization account to 70 percent, shipyards are being
    funded to 85 percent and the nuclear enterprise is being funded
    to 100 percent. We are putting our emphasis on the shipyards to
    get them where they need to be.
        Senator Kaine. Admiral?
        Admiral Hilarides. The other question I think is about dry
    dock modernization. The dry docks at Norfolk Naval Shipyard
    will eventually be required to support the Ford-class aircraft
    carrier, which is significantly different. We have those
    modernizations laid in place. Of course, they are not for a
    number of years because the first dry-docking at Norfolk Naval
    is not out for a number of years.
        Similar is true of the Virginia-class. Eventually we will
    need more dry docks in Pearl Harbor and Portsmouth that are
    capable of docking the Virginia-class, which has some
    differences from the 688 class. Particularly as we go look to
    put Virginia payload modules into Virginia, we will lay those
    plans in. But we will not do them long in advance of those
    requirements. We will probably do them just in time as those
    ships come into the fleet and then are projected out to when
    they will need their first dry-docking, which could, in some
    cases, be as many as 10 years into the ship's life.
        Senator Kaine. Now to kind of segue into sequester, because
    it is related to the ability to complete this infrastructure
    program, when we went into full sequester in fiscal year 2013,
    there was a $9 billion shortfall in the Navy's budget, and as
    it affected these items, there was the cancellation in the Navy
    of about 75,000 days of civilian labor for major projects and
    the outright cancellation of a number of planned shipyard
    projects.
        We heard from Admiral Howard earlier this month that even
    if everything is fine going forward, we do not go back into
    full sequester, that dip will suggest that we will not get back
    to full spectrum readiness until at least the early 2020s, and
    that is assuming no more sequester.
        How would another round of sequester, if we do not find a
    path out of sequester at the end of the biannual budget deal we
    did--how would another round of sequester affect your ability
    to do the ship maintenance on time, on budget, but also
    complete some of these infrastructure improvements that you
    planned out over the next 15 years?
        Admiral Hilarides. I will take a stab at sort of the
    operation of the shipyard and then turn to Admiral Smith for
    the infrastructure side.
        The most damaging thing that happened out of all of the
    things that went on there is when it became clear the budget
    was going to be dramatically reduced, they put in place a
    hiring freeze and stopped the hiring of civilian employees.
    Then the sequester then locked that freeze in place. It was
    some number of months after the kind of a path from that point
    was laid out before we returned to hiring. It ended up being
    almost a year where we did not hire in the shipyards.
        If you do the math on what I talked about, we lost ground
    by 2,500 or so employees from zero, and we were supposed to be
    hiring up during that time period. We found ourselves 4,000 or
    5,000 people below manning at a time when the budget came back
    and we started doing the maintenance again, that we were so far
    behind that that bow wave that formed is a part of what the
    Vice Chief was talking about.
        The most damaging part of all of it is the idea that we
    stopped the hiring machine that is in the shipyards. Two
    thousand five hundred people a year on average just for
    attrition. If you are not hiring regularly with connections
    into the schools and into the local labor force, you cannot
    just turn that on a dime. For me, that is the most alarming
    thing out of the thought that we would go into some sort of a
    temporary freeze is those temporary freezes have lasting
    impacts that go for a very long time.
        The other part that a sequester does is it squeezes the
    other accounts. The people who are in the government will be
    paid, and we have a commitment to them to pay them. But they
    will not get any overtime or enough overtime to do all the jobs
    they have. They will not get those borrowed labor folks from
    Newport News or from the other places we get borrowed labor to
    go help them in those times where the work peaks and they do
    not have all the resources themselves.
        Then it hurts in the material and parts and all the things
    necessary to be ready to do the job when you show up.
        It is a broad impact, hard to measure in any one metric,
    saying that was caused by sequester. But overall in efficiency.
    The place we are right now is still very much due to the
    impacts that that event had there at the end of 2013.
        Senator Kaine. Admiral Smith?
        Admiral Smith. Sir, with respect to infrastructure
    facility--and I will talk larger than just the shipyards. We
    track our facility condition by what we call FCI, facility
    condition index, code. One hundred is good. We consider 60
    failing. The Navy's average right now--we are at 79.9 is our
    FCI. The shipyards are a little bit less than that, i.e., the
    reason we are funding above the 6 percent.
        With the BBA [Bipartisan Budget Act of 2015] right now, in
    2021 with the current funding, that 79.7 will drop to 77.7. We
    are going to lose 2 percent just with the funding we have right
    now. If we go into sequestration, that is going to fall off
    even more.
        In other words, we are not gaining ground right now. We are
    gaining ground in the shipyards. We are putting 100 percent to
    the nuclear enterprise, but for the rest of our facilities out
    there, we are not gaining ground. We are losing ground.
    Sequestration will cause us to lose even faster.
        Senator Kaine. Thank you very much. I appreciate it.
        Senator Ayotte. Senator Rounds?
        Senator Rounds. Thank you, Madam Chair.
        I would like to just begin by talking a little bit about
    the per diem issue with regard to the shipyard workers. I think
    the chairwoman's proposal to offer a legislative fix may very
    well be the appropriate way to go in terms of reinstating the
    full per diem payments. Admiral, it would appear that you agree
    with the chairwoman's thought process in terms of bringing that
    back up to where it should be. Is that a fair--am I putting
    words in your mouth, sir?
        Admiral Hilarides. No, Senator. I just want to be clear. It
    was for a very specific group of trade labor people, direct
    labor people. It was not for everybody who travels from the
    shipyards or all of us who travel routinely for our business.
    It is for that narrow group. Yes, I very much stand by that.
        Senator Rounds. Very good. Thank you. I have an interest in
    seeing that move forward. I do think that the possibility is
    that we have probably tried to save some pennies and it may
    very well be costing us in terms of pounds. I do not have any
    shipyards in South Dakota, but I do have an interest in seeing
    that things run efficiently within those shipyards, and it
    sounds like this is one of those cases where it would be very
    helpful to make things more efficient.
        Also, am I correct in that when we start looking at the
    labor arrangements that we have, that as these folks are asked
    to volunteer, there is a lineup from senior members down the
    line to the most junior in terms of those who may accept a
    deployment away from their home? If we have reduced the per
    diem for these individuals, the most qualified are perhaps the
    first to decline where you may have junior members accepting a
    deployment away from their home base, thus probably not having
    your most seasoned team members moving from one location to
    another on a regular basis. Am I correct in that?
        Admiral Hilarides. Sir, I think to be precise, that depends
    on the bargaining unit of each shipyard, which trade school you
    are talking about. Generally that is, I believe, an accurate
    description of how those union arrangements work. But it is
    very specific by bargaining unit. But I do know that broadly it
    has been detrimental to both the quality of the people who come
    and their willingness to stay long enough to finish the job,
    sir.
        Senator Rounds. Let me turn just a little bit--I noted in
    the discussion earlier that you had indicated, sir, that the
    Naval Sea Systems Command is focused on updating the shipyards,
    the outdated IT systems in order to meet modern cybersecurity
    standards. I am just wondering if you could take a few minutes
    and elaborate on just what that means and the impacts, if there
    are some examples of concerns that you could share with us and
    what the needs are that are out there right now.
        Admiral Smith. Yes, sir. We are in the middle of a study to
    go figure out the correct path to go replace the information
    infrastructure that we run our shipyards from. That really does
    include everything from the individual work items, putting them
    into packages that workers can use, taking those packages and
    streaming them into a time-phased network that allows you to
    plan and sequence the work. It allows you to apply people to
    those jobs and then have them be paid. It is the actual system
    that documents their hours and makes sure they get a paycheck
    in their account at the end of the 2-week period.
        That system right now is an old set of information systems
    that have been put together over the last 30 years. We have
    attempted to modernize it before and not done well at that
    because, frankly, we did not put the right professionals in my
    opinion against the task. We are now re-arraying those correct
    IT professionals with people who actually have better
    experience to go get that project right.
        We anticipate that is a 5 to 6 year project. It is
    currently in the analysis of alternative [AOA] stage. I am
    confident that we will be able to, this time, modernize that
    system and be able to answer all the things that go on there.
        There is an efficiency piece there. We have a program to
    build an electronic work document. If you get a shipyard
    worker, he will be walking around with this stack of paper
    drawings and paper procedures. The electronic work document is
    about ready to field, and of course I need the infrastructure
    to put that technical work document in. That is all part of
    that investment. You will begin to see that investment in our
    budgets going forward as we finish the AOA and lay in the
    program to go do that.
        Sir, I will point out that when South Dakota is ready to
    come into a shipyard, we want to make sure they are ready.
        [Laughter.]
        Senator Rounds. No question about it. The experience that I
    had yesterday in the keel laying for the future USS South
    Dakota was impressive. Anytime you learn about a Virginia-class
    submarine and what the capabilities are, you start to realize
    how significant the weapon systems are, how complex they are,
    and how much they rely on the newest technology. I think when
    we start talking about the work on the weapon systems that are
    found within these shipyards and propulsion systems, it would
    appear to me that this would be an area of very high priority
    in terms of making sure that the data we take in, the
    information that we feed back in and so forth would be of the
    most sensitive nature. Certainly we should have appropriate
    cybersecurity protections in place. It sounded like while we
    talked a little bit about the operations side on this--or the
    information side on it, the operations side of the systems and
    so forth, which are also upgraded, would be a critical part of
    that discussion as well.
        Admiral Hilarides. Yes. The shipyards also would use those
    systems to feed, for example, dimensional controls into a
    numerically controlled machine. The cybersecurity of that is
    along the lines of our SCADA [Supervisory Control and Data
    Acquisition] systems, the things that are going on. A lot of
    work inside NAVSEA to go provide the cybersecurity of those
    control systems both inside ships and then inside our physical
    infrastructure, Admiral Smith as well for his critical
    infrastructure. That would be part of that program would be to
    make sure we do that exactly right.
        Senator Rounds. Thank you very much for your service to our
    country.
        Thank you, Madam Chair.
        Senator Ayotte. Thank you, Senator Rounds.
        I would like to call on Senator Hirono.
        Senator Hirono. Thank you very much.
        We just noticed that the clock is not quite giving us the
    full time, just to let you know, Madam Chairman.
        Senator Ayotte. I am going to make sure everyone gets their
    full time.
        Senator Hirono. Thank you very much, Admiral Hilarides, for
    your service, and I also extend my best wishes to you in your
    future endeavors.
        Thank you also for raising the issue with regard to the
    impact of TDY on our workers. Those of us who have shipyards--
    and of course, Pearl Harbor is the largest industrial employer
    on Oahu--we have all heard from our workers as to the negative
    effects of this policy. I certainly support the chairwoman's
    initiatives in this regard.
        As we look at the need for training of the workforce, as
    you mentioned, the hiring freeze really put a damper on the
    number of workers that we need. Training, our apprenticeship
    programs are really critical. I try to go to every single one
    of our apprenticeship graduations as I can.
        My understanding is for the apprenticeship program at Pearl
    Harbor, they get a lot more applicants than they actually take
    into the apprenticeship program. Is that the case in the other
    apprenticeship programs? If so, since we have such huge
    workforce needs, can we expand the program so that we can train
    more people?
        Admiral Hilarides. The apprenticeship programs were sized
    to make up that sort of standard loss, a couple thousand people
    a year.
        Senator Hirono. Two thousand five hundred or so.
        Admiral Hilarides. When we try to take many more than that,
    as we have in the last 2 years, we stretch those apprenticeship
    capabilities sort of to their maximum. I actually believe they
    are appropriately sized, as long as we continue as a going
    concern, normally hiring and not freezing and then rehiring.
        Your question I think, though, is beyond that. It is could
    we use those apprenticeship programs to train workers for other
    industries. I would not advocate that, but again, we can go
    look at that.
        Senator Hirono. I think that we definitely need people
    trained, especially in the STEM areas. It is very impressive to
    see a submarine in dry dock, for example, because you realize
    the kind of skill sets that our workers need to repair and
    maintain these huge, complicated ships.
        When we talk about efficiencies, I realize that
    modernization and maintenance of our facilities is really
    important--best practices. I am curious to know whether you
    have a process or a system to get input from the workers
    themselves as to how they can improve efficiencies at the
    shipyards.
        Admiral Hilarides. Yes, ma'am. Actually I know you are
    fairly aware of them, the moonshine projects that have come out
    of Pearl Harbor Naval Shipyard. Really each of the shipyards
    has a slightly different name but really the same idea, which
    is when you get the trade labor involved in the decisions about
    what machine to buy, how to modernize your processes and
    procedure, you get the very best idea. I think Toyota would
    tell you the same thing. We very much work to encourage those.
        They tend to be local. I do not spend a lot of time from
    headquarters directing that because those things do not tend to
    work very well. But the shipyard commanders certainly know that
    I have incentivized them to open up the idea machine from the
    workforce and make sure that we are getting their best ideas. A
    very complex set of controls and things associated with it
    because you have got to also be very safe with all that. But I
    think that each of the shipyards, to the best of their ability,
    is working to go tap into that stream of innovation that comes
    from their workforce.
        Senator Hirono. There have been some real creative ideas
    from the workers themselves that have been incorporated into
    the shipyard.
        Admiral Hilarides. Yes. I think point of use tooling is a
    great example of that. Can you not just put the tools by where
    the worksite is? They challenged us and we did. Of course, we
    got efficiencies from that.
        Senator Hirono. That seems so sensible.
        As Senator Kaine has mentioned, though, our experiential
    level is not where they could be in terms of the workers we
    have. Are there any programs to bring some of the more
    experienced people back into the workforce or keep them in
    longer to fill that gap--experienced staff?
        Admiral Hilarides. Yes, ma'am. In the government civilian
    ranks, there is a program called ``retired annuitant.'' You can
    get a retired annuitant.
        Senator Hirono. Retired what?
        Admiral Hilarides. Retired annuitant. Basically you are
    allowed to bring them back for up to 2 years half-time, so
    about a year's worth of work. They have to spend half of their
    time training the workforce. You cannot bring them back just to
    work. They have to come back for training.
        I know the shipyards are using those sparingly because they
    are fairly expensive. Those people, after they get out, a lot
    of times will go get other jobs.
        We have a contract with several different companies,
    different in each shipyard, to bring coaches. We are finding
    that now with a large tranche of new labor force that the first
    and second line supervisors, of course, are not keeping up.
    Because you have created that bathtub that Senator Kaine
    pointed out, you are pulling forward first and second line
    supervisors to more senior jobs, and we are getting a lot of
    very junior first and second line supervisors. We are actually
    working to bring in companies that know how to coach new
    supervisors on how to run a meeting, how to schedule work, how
    to deal with problem employees. We are doing both of those
    things.
        Senator Hirono. Is that happening at all of our four
    shipyards?
        Admiral Hilarides. To varying degrees and, again, according
    to their need. I think Pearl is probably not quite as urgent as
    Puget and Norfolk are. Their numbers are very, very large.
    Pearl has been able to use predominantly their traditional
    methods. But I think that is the case. Yes, ma'am.
        Senator Hirono. I also know that at Pearl Harbor that we do
    have students from other nations. Right now, 12 students from 7
    nations are learning skills at the shipyard on various aspects.
    Can you discuss the importance of working with our
    international partners and programs such as these?
        In Pearl Harbor's case, we have people from Bahrain,
    Bangladesh, Brunei, Guyana, Pakistan, Saudi Arabia, and the
    Philippines working with our shipyard people.
        Admiral Hilarides. Yes, ma'am. That is a project that
    predates my leadership time at NAVSEA. We basically partner
    with countries that we want to help build their own capacity.
    Predominantly this is at the leadership level not at the trade
    skill level. It is at the leadership level. Someone who would
    likely run one of their shipyards. We bring them in. We show
    them how our shipyards function. We provide them mentoring
    opportunities and training opportunities. Then those
    relationships--I know some of my shipyard commanders have
    relationships with people they went through that course with
    when they were younger, and those relationships endure and
    create the kind of conditions by which we have very, very close
    shipbuilding relationships with many, many countries that are
    our close allies.
        Senator Hirono. That is probably a really good idea.
        Would you like to add anything to that, Admiral Smith?
        Admiral Smith. We use the annuity guys also, you know, for
    hiring after, for training. I have got some of my staff that
    are out. They are folks that are ready to retire. I want them
    to be able to pass on their skill set. It is not just kept to
    the shipyards, but we do use that across DOD [Department of
    Defense] and Navy.
        Senator Hirono. Thank you.
        Thank you, Madam Chair.
        Senator Ayotte. Senator Shaheen?
        Senator Shaheen. Thank you.
        Thank you both for being here and for the work that you do
    every day for the country.
        I want to also add my voice to the support for the waiver
    of those joint travel regulations. Like Senator Ayotte, I
    represent the shipyard in Portsmouth, and we have heard very
    directly about the concerns that people have had. As you
    reiterated, we want the very best people with the most skills
    doing those jobs when they travel. I think it is very
    appropriate that you have waived those requirements, and
    hopefully we can get that fixed for the long term.
        I also want to applaud again the Navy's exceeding the
    minimum 6 percent capital investment for shipyard
    modernization. Obviously, we are seeing that begin to have an
    effect at Portsmouth where they are working on the backlog of
    projects that need to be done. I wonder if you can speak to the
    importance of those modernization projects. You have talked a
    little bit about how important they are to maintaining the
    fleet, but can you elaborate on that?
        I know one of the things that we are very proud of in
    Portsmouth is, when a project comes in, completing it on time
    and on budget and often ahead of time. Do you know what
    percentage of ships and submarine maintenance were completed on
    time and within budget for the last year that we have data on?
        Admiral Hilarides. We have that data. It is not
    particularly flattering, and I can provide it to the committee.
        [The information referred to follows:]

        In fiscal year 2015, the 4 Naval Shipyards completed 22
    availabilities of which 6 (27.3 percent) were on time and 1 (4.5
    percent) was at budget. For perspective, 10 of the 22 availabilities
    completed in fiscal year 2015 were within 10 percent of CNO schedule
    durations and 4 of those 22 availabilities completed within 10 percent
    of budgeted mandays.

        Senator Shaheen. Does it break out how the differences by
    ship, by shipyard, by year, by project in a way that provides
    some insight on what could be done to improve operations with
    respect to completing projects?
        Admiral Hilarides. Yes, ma'am. For--and I will say
    Portsmouth and Pearl Harbor where predominantly it is SSN
    projects and there is a lot of like work, that is very good
    data and we use it all the time to go benchmark and figure out
    how to help project teams do better and better.
        The two large shipyards are wrestling with a much more
    challenging set of work. Each of the big yards has a ballistic
    missile submarine refueling going on right now. They are
    actually moving nuclear fuel around a ballistic missile
    submarine. Both of them have an aircraft carrier in yard right
    now, which is a massive workload compared to a submarine
    project. They both have SSN projects, as well as waterfront
    support and other off-yard things. Puget has a carrier in San
    Diego and a carrier in Yokosuka also under repair.
        I can provide you all that detail. I would just urge
    caution in the use of the data for benchmarking. Each shipyard
    is in a place in its cycle. Portsmouth is in a very, very good
    cycle. They have been at the top of their game now for quite a
    while. Pearl is on the rise. There are some lights of great
    performance and a couple of things that have not gone quite so
    well in the other two yards as well. We can provide the data. I
    would just urge caution in how you would interpret as that
    shipyard is great and that shipyard is not any good. We spend a
    lot of time on that data.
        Senator Shaheen. Well, and certainly that would not be my
    thinking about it, but more to think about how the Navy is
    using the information and what lessons can be learned from
    shipyard to shipyard about what is working and effective and
    what needs more work.
        Admiral Hilarides. We used that data actually to make the
    case for the hiring. The hiring was not a slam dunk. It took us
    a long time to convince the Navy to allow us to hire up to the
    numbers that we made the case for. We used specifically the
    Portsmouth performance in 2011, 2012, and 2013--and Pearl. They
    got almost all their avails done in time during that period
    because their workforce was sized to the workload we had. We
    are just now starting to size Norfolk, Puget for the workload
    they actually have in yard. Performance is improving nowhere
    near fast enough and plenty of work to do, but we do use that
    data. Thank you, ma'am.
        Senator Shaheen. To what extent has sequestration affected
    the ability to make the case for the hiring that you need for
    those projects?
        Admiral Hilarides. We went into the time of the sequester
    working on convincing them to hire us up. They had applied some
    efficiency targets to the shipyards that had suppressed the
    total number of people we had. We had made the argument that
    those targets were not rational and that we needed to release
    them. We were sort of on a flat hiring spot. Then we froze
    hiring, and then we finally made the case. Those 11,000 people
    really represent that divot, and that divot is reflected in
    delays in aircraft carriers, submarines, the avails that are
    going on right now. That is not an excuse. That is just the
    facts.
        Senator Shaheen. One of the things that I have been very
    impressed by is the Navy's diversifying its energy resources
    and the ability to use efficiencies both on base and in terms
    of the fleet and making it more efficient and relying less on
    fossil fuels. I wonder if you could talk about how you see the
    importance of that.
        Admiral Smith. We take the energy conservation and
    efficiency very seriously. We are working very hard to meet not
    only the Federal goals, but we have our own goals within DOD
    and the Navy. I can speak to the shore side. I really cannot
    speak to the operational side. But we focus at all 70 of our
    installations on how we do conservation, reducing the demand,
    efficiency against a 2003 baseline. They are all well over 20
    percent and coming down. We invest a significant amount of
    resources in each year into those energy projects to help
    continue to bring those down. It is also a behavioral and
    getting folks to turn out lights and do those kind of things.
    The more we do that, it reduces the utility bill. I have for
    running the shore, about a $10 billion budget. About $1 billion
    goes to utilities. The more we can drive down that utility
    bill, it is obvious that it is going to help us. That is why we
    focus on it very hard. It is just smart business because it is
    less expensive.
        Senator Shaheen. I assume there are some national security
    incentives for doing that as well.
        Admiral Smith. Yes, ma'am.
        Admiral Hilarides. On the ship side, there is a set of
    alterations to various classes of ships that are aimed
    specifically at that. It is really not to save the money for
    the fuel. It is to give the CO [commanding officer] more combat
    range because the ship uses less gas. There is an operational
    imperative on the ship side as well.
        Senator Shaheen. Thank you. I think sometimes that gets
    lost in the debate around energy that it is really not just
    about saving money and being more efficient. It is also about
    the national security imperative. Thank you.
        Thank you, Madam Chair.
        Senator Ayotte. Thank you, Senator Shaheen.
        First of all, I want to say a thank you, which I have said
    before, but I want to make sure I thank you again, Admiral, and
    that is for requesting funding for the P285 barracks at
    Portsmouth Naval Shipyard for our junior enlisted sailors. I
    thank you. I know that Senator Shaheen was a great advocate for
    that too, and I think both of us were grateful that you put
    that in. Thank you.
        I also wanted to ask about--in light of the threat of
    terrorism, as we think about force protection, obviously
    security personnel, security barriers are all important as we
    think about the important assets at our shipyard. Obviously,
    our nuclear submarines are so important in terms of their
    technology in protecting them.
        One of the things I wanted to ask you, Admiral Smith--has
    the Navy been examining waterside security barriers to provide
    better protection for our shipyards and naval bases? I think
    that was an issue that you were studying, and if you could give
    me an update versus what you have determined on that and how
    that compares to what is currently used. Is there a next
    generation of force protection for waterside barriers that we
    should be looking at?
        Admiral Smith. Yes, ma'am. We are looking at next
    generation. We have been doing that throughout this winter. All
    our shipyards have a harbor security barrier around it, as do
    our installation piers. But what we have right now does not
    meet the requirement for high-speed boats that could be used
    for a terrorist attack.
        Senator Ayotte. What is in place right now does not do it.
    We need to----
        Admiral Smith. Yes, ma'am. We are looking at that. This
    past winter--actually this week, we are going through the
    eighth testing of a new product down in Norfolk. My operations
    officer from headquarters is actually going to be down there to
    witness it. It has got a better ability--it is proving out to
    have a better ability to stop vessels quicker. It also has a
    semi-automatic capability to open and close on its own. One, it
    has the potential to provide more security, and it also, on the
    other hand, can be more efficient so we can reduce overhead,
    dedicated boats that we have to open and close those. That
    testing is still going on, but it looks to be very fruitful. I
    am very optimistic that we are well on our way to going to the
    next generation and have good potential resources out there to
    do that.
        Senator Ayotte. Good. This important to the Navy to do
    that?
        Admiral Smith. Yes, ma'am. Absolutely.
        Senator Ayotte. Thank you.
        I also wanted to ask about an issue that has been brought
    to my attention at our shipyard as well, which is security
    personnel. This is the issue, obviously, of the gates and
    people who are manning the entry points in our shipyard. The
    concern that I had that has been raised with me is it is taking
    too long to recruit and train security personnel. I know that
    the Navy recognized this issue. It is something that I have
    also spoken to Vice Chief Admiral Howard about, that you raised
    the GS [general schedule pay] level for security personnel and
    created a career progression because one of the issues was
    keeping people in that position to pay the people in a way that
    they are going to stay and conduct these important security
    positions.
        I understand the new policy is going to allow security
    personnel at Portsmouth and other shipyards the opportunity for
    career progression that did not exist with a fixed GS-5
    position and that officers will be GS-7 positions, and
    supervisory police officers will have a GS-8 position.
        Is that what you understand is the new policy? What impact
    is the policy having on attrition, and do we continue to have,
    still, challenges on the security for our shipyards?
        Admiral Smith. Yes, ma'am. We have redone the position
    descriptions for that. We are building the career path. We are
    still in the process of doing that. That is not a complete----
        Senator Ayotte. Okay. You have not put it in place yet.
        Admiral Smith. It is starting to roll out.
        For example, you talk to the GS-5's. We now have the GS-6
    in place. Folks will be evaluated and move up to GS-6. 7's are
    not in place yet. We have the 8. We are still in the process of
    building that in addition to then-CNO [Chief of Naval
    Operations] Greenert last summer directed that we hire another
    1,461 security personnel because of the shortfall. We are still
    hiring to that.
        From an enterprise perspective, we are doing pretty well.
    We are still struggling in the mid-Atlantic and New England. We
    are still struggling at Portsmouth. I know that. I am diving
    into that to figure out why, why am I being successful
    elsewhere but not being successful in Portsmouth.
        Senator Ayotte. Is the Navy prepared, if they have to, to
    address the career progression issue? I know you have gone to
    GS-6, but also I think looking at the progression issue, GS-7,
    GS-8 perhaps for the supervisory positions. Is this something
    you are going to continue? How fast do you expect implementing
    the rest of this policy and keeping a focus on those----
        Admiral Smith. The goal is to have the plan built by the
    end of June and then to start working our way into it as we get
    the hires and identify, based upon the requirements of each
    installation, who needs what resources based upon number of
    entry control points, amount of waterside property, those kind
    of things. We are still working to build a plan to understand
    where we need to put those positions at. I should have that
    done by the end of June.
        Senator Ayotte. Thank you. I appreciate it.
        I see that Senator Ernst is here. I know that Senator Kaine
    has a couple. What I will do is I have a couple more questions.
    I will wait till the end. I believe the next would be Senator
    Ernst.
        Senator Ernst. Thank you very much, gentlemen, for being
    here today. I apologize. We were talking about small arms
    modernization in the other subcommittee. Glad to join you.
        I do appreciate your support. Shipyards--I will be honest.
    Not my thing in Iowa. If you want to talk about corn or
    soybeans, you know, that is awesome.
        But public shipyards. Thank you. I know you are both very
    familiar with this. Thank you for holding this hearing.
        Just for my information as well, the public shipyards are
    hiring thousands of additional workers to better match
    workforce with workload. What I have heard is that the process
    from application to the first day on the job--so filling out
    the paperwork, whether it is online, and then actually getting
    to work--that that is unnecessarily long and complicated for a
    lot of those workers.
        As a result, we are losing some of our best applicants as
    they take other jobs that can hire them quicker. This is not
    just in this particular situation. I think it is DOD-wide.
        Are you seeing this issue and are you concerned by it? I
    know they have to go through--what is the website? USA Jobs.
    Yes. Thank you very much. You are familiar with that. If you
    could talk a little bit about that issue, if you are concerned
    by it, and maybe the average wait time, if you are aware of
    that, from that time the applicant goes on line, fills out the
    application, until they are actually able to be hired.
        Admiral Hilarides. Yes, ma'am. We will talk the specific
    case of the shipyards. When we recognized how far behind we
    were and the need to hire that nearly 11,000 that we hired in
    the last 2 years, we went out and sought authorities and
    streamlined processes, everything from a physical--you got to
    get a physical. We hired extra doctors. We had to get
    clearances. The clearance system was bogged down. We helped
    them with contractors to go help boost their capacity to go
    process clearances. We specifically went after all those
    barriers and got the shipyard hiring specifically because we
    had this tremendous challenge and hill to climb. We were able
    to get it down.
        Routinely, however, I hear that same thing at my
    headquarters, at my field activities that the government hiring
    process is cumbersome and it takes a long time. We do lose some
    number of folks who apply for those jobs. We have a few silver
    bullets we can use, but we cannot use them all the time. I
    think that that is going to continue to be an issue is the
    amount of time it takes. When a company like a Google can show
    up at a college and make a job offer in a minute, I just do not
    have that opportunity. That will continue to be a challenge for
    us.
        Admiral Smith. I mean, from the Navy at large, DOD, we are
    seeing the same challenge. To Madam Chair's question on
    security, it is taking us 163 days to get a security officer on
    board. That is just way too long. Yes, ma'am. It is too long.
    We have got to get the process better.
        Senator Ernst. That is pretty incredible. I know we do have
    an arsenal that sits between Iowa and Illinois, and we face
    some of those similar challenges as well. I have heard from
    workers there that maybe they have someone they would just love
    to see in their workforce. They encourage them to apply. They
    will apply online through the website, and it may be 6 months
    before they ever hear back from the entity that is hiring. That
    is too long. By then, those folks have already moved on. They
    have found other workforce opportunities. I do not think that
    that is acceptable that we are asking people to wait that long
    for these important positions. Yes, I am astounded. That should
    not happen.
        Do you happen to know the reasons why it would take that
    long? Is it reasonable to expect people to wait that long to
    hear back on these types of positions?
        Admiral Hilarides. Those procedures have grown up over a
    lot of years. Some of the parts of it are extremely important.
    We have hired some people who we found out were bad people. In
    the last 2 years, we hired 2 people who turned out to be
    attempting to work for us to get inside to get information to
    sell to someone else. The security piece is absolutely
    essential. The same thing with the physical. You are going to
    put them in the bilge of a ship and hauling an 80-pound welding
    rig around, you want to make sure they are physically capable.
    Many parts of it are absolutely essential.
        The parts that are not tend to be outside of our controls.
    The Navy is a big bureaucracy. Hiring a government civilian--
    you want to be a little careful as well because generally you
    are hiring that person for a long time. Very few people come
    into the government and leave just a couple years later. The
    number of people who come in our shipyards and stay for their
    entire career is a very large number--and other places. We end
    up being pretty careful.
        I would say this. These jobs are attractive enough that if
    somebody really wants to come into the government, they wait. I
    do not think we are taking a really large hit on the quality.
    But it is frustrating, and I hate to get a new employee who
    just the first thing tell me as a leader is how frustrated they
    are at the selection process. Yes, ma'am.
        Senator Ernst. Absolutely.
        Are there any suggestions that you would make on how we can
    speed up the process? Like if you are buying a home, you can
    get prequalified on your loan while you are looking for a home.
    Is there anyway that you could prequalify individuals? Within a
    certain time frame maybe they get a physical and it is good for
    6 months if they are looking for government employment. Are
    there ways that we could work with them?
        Admiral Smith. There are a lot of fingers, hands go into
    the hiring process. It is streamlining that process. There are
    things that as the commander, Admiral Hilarides or I can do
    within our command to improve our processes, but then we rely
    on others. I mean, one of the things we have done in going back
    to the security manning and hiring and the challenges we find
    in that is a potential employee would have to go out and get
    his eye exam. He would have to go out and get a health exam. He
    would have to go out and get this exam instead of coming in a
    one-stop shop. One of the things that we have done is now do a
    one-stop shop, and we have all the medical facilities and
    requirements there so they can come in and get it done at once.
    We are saving several weeks with that process. There are those
    kind of things out there.
        I would submit, though, the biggest challenge is because
    there are so many hands in the pot trying to get that
    streamlined which a lot of that is not within our control as
    commanders of our organizations.
        Senator Ernst. Is there anything that we could do as
    Congress that would help that, or is that beyond----
        Admiral Hilarides. The only other point I was going to make
    is that we use both the intern program. We have authority for
    interns. We do a temp worker program in the shipyards where we
    need a worker for a short period of time. They are sort of a
    probationary employee. They come in and you can let them go.
    Those tend to last a year. Those are the places where we do
    most of that prequalification. When there is a hiring, when
    hiring is available, often those temp workers will be brought
    in. That is a very good process by which the workforce sort of
    vets them and finds out if they are willing to work hard enough
    and all that sort of stuff. But those are really our
    workarounds.
        I cannot point to an agency and say get rid of that agency.
    I probably should not.
        Senator Ernst. Well, my time has expired. But I very much
    appreciate your expertise and your willingness to be here
    today. I am better informed, those of us that are not familiar
    with shipyards. I appreciate it. Thank you.
        Thank you, Madam Chair.
        Senator Ayotte. Thank you, Senator Ernst.
        I just want to share Senator Ernst's concerns about the
    hiring period, and I think that is a challenge. We want to get
    talented people in. This is something, of course, we would want
    to work with you on in any way we can assist with.
        With that, I would like to call on Senator Kaine.
        Senator Kaine. Thanks, again. Just a couple of points, but
    Senator Ernst made a good point in saying, well, I am from
    Iowa. We do not have a shipyard. I am from Virginia. I have
    been in our shipyards a million times, but I am not a
    professional at it. I do not necessarily know what I am looking
    at.
        But I will tell you it is something I would recommend to
    committee members on Armed Services. We do travel to other
    nations. Go look at another nation's shipyards. It was not
    until I went with Senator King of this committee to the Mazagon
    docks in Mumbai and looked at the Indian shipbuilding industry.
    They were so proud that two U.S. Senators would want to come
    see their shipbuilding operation. It was a fantastic visit.
    But, boy, when you saw that, now all of a sudden I could think
    about what I had seen at Newport News or at the Norfolk base
    and realize, wow, just in terms of the layout, so much more
    efficient--the layout and the scheduling of the work. They were
    basically doing things in a very odd set of structures that had
    been built for different kinds of ships. They were trying to
    build subs in there. It was just virtually impossible. They
    were proud to do and excited to show it off, but it really
    helped demonstrate what we had and what we sometimes take for
    granted.
        Two really specific things: one about an old problem and
    one about a new opportunity.
        Old problem: corrosion. I am amazed. You know, we have
    spent all this time battling about budgetary issues. I read GAO
    reports that say corrosion DOD-wide--$22 billion a year. Wow.
    $22 billion a year. As we get into sequester and some of the
    pressures that lead us to defer maintenance, that is a problem
    that can expand, not shrink. But if you could do innovative
    strategies to reduce the corrosion expenditure in DOD by a
    third, there is a whole lot of really important programs in the
    United States where we spend than $7 billion a year.
        I am just wondering. I am really curious in what you do in
    your corner of the world, what are the kind of innovative
    strategies to deal with the corrosion problem, especially given
    some of the budget pressures that we have put on your
    shoulders.
        Admiral Hilarides. Sir, I will make sure you get an
    invitation to Megarust. We actually have a Navy conference
    called ``Megarust.''
        Senator Kaine. Wow.
        Admiral Hilarides. We bring in Sherwin Williams, all the
    paint manufacturers. We bring in chemical companies and are
    actually looking at all series of formulations to go try to do
    that. Again, sea water, air, ships, vibration. There are a lot
    of reasons why there is a constant need for painting of ships.
        Continually looking at better and better paint systems. One
    of those paint systems was pioneered up at Portsmouth Naval
    Shipyard, the high solids pain that we put in the ballast tanks
    on submarines, went from a 10-year period of painting it to a
    15-year period which saves one entire paint cycle of a
    submarine over the course of its life.
        We put a lot of effort into it. I spend way too much time
    on rust, and so I am right with you, sir. We are looking for
    industry to help us out as much as possible.
        Senator Kaine. That is great.
        Another area of industry--I am going to go to the new
    opportunities side because the hearing is about sort of
    investment strategies. We have a lot of innovative private
    sector folks in Virginia in the additive manufacturing or 3D
    printing area. I understand that the Navy has used 3D printing
    technologies to do on shipboard production of some parts that
    can be used so you do not have to fly parts in to a ship. Talk
    a little bit about 3D printing and the kind of investment going
    forward especially for on-time, on-ship production of critical
    components.
        Admiral Hilarides. Yes, sir. We actually have a lot of
    research inside the entire Naval Sea Systems Command enterprise
    and across the Navy on additive manufacturing. Our principal
    challenge is almost all the things that we need that are
    critical are made of some material that is not plastic, some
    alloy of some metal. Right now, the research is going on. Even
    if you alloy a steel and you three-dimensionally print it, the
    atoms go in in the sequence the printer puts them in.
        When we manufacture that piece of steel otherwise, it gets
    worked. It gets heat-treated, and we know its properties very
    well. We are actually now characterizing additive manufacturing
    metal properties because I cannot certify that part out of that
    printer until I know its metal properties. We actually have a
    significant body of research going on in the Naval Sea Systems
    Command to go characterize the strength of particularly the
    metals to go make sure that we can then start to use it. It is
    holding us back a little bit, but it is fundamental research
    that has got to be done before you can say that part is ready
    to go in that nuclear reactor or in that gun system or in that
    kind of critical thing. We are working on it full speed,
    though, and wherever we can, we qualify the process and the
    fleet is already using those systems.
        Senator Kaine. Great. Thank you both very much.
        Senator Ayotte. I just have one final question for you,
    Admiral Smith. One of the issues that I had focused on as well
    is our servicemembers and our DOD civilians, you know, the jobs
    that they are doing--is ensuring that they have access to good,
    affordable child care. Obviously, those who serve our country--
    it is really important that they have access to this so that
    they can do their jobs.
        Unfortunately, at Portsmouth, one thing I learned is that
    there were over 160 families waiting average of almost 300 days
    to get their children into care there. This is something I have
    been focusing on not only for Portsmouth but thinking across
    DOD.
        The Navy told us yesterday that they believe that wait
    times at Portsmouth had been reduced about 3 months, but we
    also had my staff call Portsmouth and find out. What we learned
    was that depending on the category of individual, wait times
    can still be as long as a year.
        I just wanted to follow up with you. I know the Navy has
    said that you are looking at plans to install military learning
    centers at Portsmouth to reduce the child development center
    wait list and wait times. I wanted to get an update on that.
    Obviously, I know that this is an issue at other naval
    installations. If you can give me an update on Portsmouth and
    then just an overall Navy view of where we are on these issues.
        Admiral Smith. Yes, ma'am. Absolutely.
        You are right. It depends. We will talk Portsmouth. Like
    any CDC [Child Development Centers], the wait list varies on
    the age of the child and spaces available. The average wait
    list right now is 7 months up at Portsmouth. The high was 10.
    It is down to 7. But that goes to some folks who were waiting a
    year, some folks less.
        For the MLCs [Military Learning Centers], we are still
    working through that process. They will be on the ground,
    installed. We are targeting the end of this fiscal year three
    to four MLCs will be there. Depending how you configure them,
    whether you configure them for an infant, 1-year-old, or an
    older child, they can accommodate anywhere from 8 to 24
    children. We will hire some additional staff members to man
    those up, nominally four per MLC with the final number being
    depending how we configure it.
        Senator Ayotte. So--I am sorry. Go ahead.
        Admiral Smith. You were coming with a question.
        Senator Ayotte. No. It just occurred to me with all the new
    hiring, this is going to be a bigger issue.
        Admiral Smith. Absolutely. I will say, though, that is not
    appropriated fund [APF] hiring. It is a little bit different
    from APF, and it is a bit easier to hire on the NAF [non-
    appropriated funding] side.
        That is where we are at with Portsmouth.
        From a big picture, so we have got 120-plus CDCs across our
    70 installations. We have 57,000 spots in those CDCs. We have
    created an additional 7,000 since 2009. We created those
    additional 7,000 to get us down to the DOD target of a 3-month
    wait list. The Navy is meeting the 3-month wait list overall.
    We have 16 installations, Portsmouth being one of them, that is
    not meeting that 3-month.
        Senator Ayotte. Well, I really would appreciate, obviously,
    the focus on getting the military learning centers up and
    running as soon as possible at Portsmouth. Then having been
    there, we need to get to a new facility that has more capacity
    in the long term. I look forward to continuing to remind you of
    that issue.
        Admiral Smith. Yes, ma'am.
        [Laughter.]
        Admiral Smith. We are finishing up the engineering studies
    right now to put in the pads, and then it will take about 3 to
    4 months to get the MLCs there installed, upgraded, and ready
    to go.
        Senator Ayotte. Okay. Thank you. I appreciate it.
        I want to thank you both for being here and for your
    service to the country. Again, I want to thank you, Admiral
    Hilarides, for your leadership and for your dedicated service
    for decades to our country. Will you please pass along to your
    family how grateful we are for all that they have done as well?
        Admiral Hilarides. Will do.
        Senator Ayotte. Thank you.
        [Whereupon, at 3:52 p.m., the hearing was adjourned.]
                  Questions Submitted by Senator Kelly Ayotte
                                   dry-docks
        1. Senator Ayotte. Admiral Hilarides and Admiral Smith: How
    important are the dry-docks at our public shipyards to the Navy and our
    nation?
        Admiral Hilarides and Admiral Smith. The ability of the public
    shipyards to fulfill their mission of executing depot-level nuclear
    ship maintenance is highly dependent on the condition of dry docks
    along with related facilities, including piers, nuclear facilities,
    production shops, and utilities. Without dry docks, all required depot-
    level submarine, aircraft carrier, and ship maintenance cannot be
    accomplished.
        As for their importance to the nation, the execution of submarine,
    aircraft carrier, and ship depot-level maintenance is essential to
    national defense, and the continued availability of dry dock capacity
    is essential to ensure an effective and timely response for
    mobilization, national defense contingency situations, and other
    emergency requirements.

        Senator Ayotte. My sense is that naval shipyard dry-dock capacity
    is substantially inadequate to serve the future life-cycle depot-level
    maintenance needs of the U.S. Navy fleet. This means that significant
    investment in dry-dock facilities at our four public shipyards is
    necessary. I understand that more than $2.3 billion is needed in dry-
    dock construction and modernization might be needed at the four public
    shipyards.

        2. Admiral Hilarides and Admiral Smith: Can you describe the need
    for dry-dock construction and modernization?
        Admiral Hilarides and Admiral Smith. Naval shipyard dry dock
    concerns are being driven by the following:

        1.  New ship characteristics render some dry docks obsolete.
        2.  Unprecedented Inactivation and Reactor Compartment Disposal
    workload (SSN 688 class and CVN 65 and 68 class) over the next three
    decades.
        3.  Environmental vulnerabilities (seismic and flooding) have the
    potential to cause loss of critical facilities.
        4.  All dry docks require periodic maintenance and repair to
    maintain certification.

        The estimated costs are pending the completion of the ongoing Dry
    Dock Modernization study. Cost estimates are impacted by pre-
    construction site studies, such as National Environmental Policy Act
    requirements, class maintenance plan changes, workload forecasting
    between public and private shipyards, and improved depot maintenance
    performance.

        3. Senator Ayotte. Admiral Hilarides and Admiral Smith: How does
    the Navy plan to resource this requirement without crowding out other
    required military construction projects?
        Admiral Hilarides and Admiral Smith. Modernizing naval shipyard dry
    docks is required to mitigate future obsolescence due to modern ship
    characteristics and workload, such as recycling aircraft carriers, as
    well as mitigating seismic and flooding vulnerabilities. However, the
    Navy is still in the process of evaluating all available courses of
    action to ensure Naval Shipyards maintain mission capability. The
    options being considered include modifying dry docks to increase
    capacity, using floating dry docks, and upgrading dry dock utility
    systems.
                           maritime security barriers
        Senator Ayotte. Admiral Smith: During Tuesday's hearing you
    testified that ``shipyards have harbor security barrier around it, as
    do our installation piers. But what we have right now does not meet the
    requirement for high-speed boats that could be used for a terrorist
    attack. We're looking for next (generation barrier).''

        4. What is the Navy's plan to procure next generation barriers?
        Admiral Smith. We have an ongoing next generation barrier pilot
    project at Naval Station Norfolk. This pilot will run throughout fiscal
    year 2016 with final evaluation and recommendations complete in April
    2017. The next step is to use results of this pilot to develop detailed
    performance specifications and an acquisition strategy.
                p-371 utility investment for nuclear facilities
        5. Senator Ayotte. Admiral Hilarides and Admiral Smith: Why is the
    P-371 utility investment MILCON project at Portsmouth Naval Shipyard
    that the Navy has requested funding for in fiscal year 2017 needed?
        Admiral Hilarides and Admiral Smith. P-371 (Utility Investment for
    Nuclear Facilities) is primarily focused on mitigation of risks to
    existing utility systems, primarily electrical, that provide services
    to nuclear submarines in Dry Dock 1 or pier side. In addition to
    electrical enhancements, the project improves steam, compressed air,
    and water distribution capabilities to Berths 1 and 2 adjacent to Dry
    Dock 1. The project increases utility system reliability and
    resiliency, and improves energy efficiency via modern equipment and
    technology. The project was developed as a consequence of failure
    analysis of potential risks attributed to the current system condition.
    This project will improve the Portsmouth Naval Shipyard utility
    infrastructure and meets the recently adopted standby power
    requirements for nuclear powered warships.
                     optimized fleet response plan (o-frp)
        Senator Ayotte. Under the Navy's new force generation model, the
    Optimized Fleet Response Plan (O-FRP), all the ships in a strike group
    need to come out of maintenance at roughly the same time. However, the
    first carrier, which will deploy under O-FRP later this year, USS
    Eisenhower (CVN 69), overran its latest 14 month maintenance period by
    9 months when it concluded last August. Eisenhower is just the latest
    example in a pattern of aircraft carrier maintenance delays in public
    shipyards.

        6. Admiral Hilarides and Admiral Smith: Can you comment on the
    schedule-dependent nature of O-FRP and what steps you have taken to
    ensure aircraft carriers finish availabilities on time?
        Admiral Hilarides and Admiral Smith. Increased deployment lengths
    have resulted in a maintenance backlog prior to entering an
    availability that has not been fully identified or resourced, which has
    resulted in extended maintenance periods to restore their material
    readiness.
        The increased operational tempo of the last 10 years and the
    effects of sequestration on our shipyard workforce, coupled with a
    fixed capacity industrial base (both public and private) has resulted
    in lengthened maintenance schedules and delayed availability
    completions. As detailed in the responses to Questions #10 and #11, the
    Navy's life cycle activities are all working with the maintenance
    community at large to ensure the execution plans for the maintenance
    requirements are providing the ``best value'' and take the industrial
    base's constraints into account.
        To address these issues, the Navy began implementing a revised
    operational schedule in November 2014 referred to as the Optimized
    Fleet Response Plan (OFRP). The Navy is in the process of applying an
    OFRP process to all of our force elements to include carrier strike
    groups, amphibious-ready groups, submarines, expeditionary units,
    aviation squadrons, and Military Sealift Command ships. OFRP is
    designed to achieve a number of benefits, including service readiness
    recovery and a sustainable level of employability to support combatant
    commander demand. OFRP seeks to provide a more sustainable schedule for
    Navy ships, as it holds deployment lengths constant and introduces more
    predictability for maintenance and training. Improved scheduling
    through OFRP will provide stability to our sailors and improve the
    ability of our public shipyards and private ship repair companies to
    plan and schedule maintenance. OFRP is still in its early stages of
    implementation and will take time to create positive change. As of
    January 2016, no aircraft carriers and only 15 of 83 cruisers and
    destroyers had completed a Chief of Naval Operations' maintenance
    availability under OFRP.
                       defining maintenance requirements
        Senator Ayotte. In May 2015, GAO found that incidents of degraded
    or out-of-service equipment have doubled on surface and amphibious
    ships over the past 5 years (GAO-15-329). According to Navy officials,
    we are now paying for the deferred maintenance and increased use of the
    surface force over the last decade. In addition, officials state that
    deferred maintenance is not just postponed, but also increased as
    corrosion weakens structural aspects of the ship (a compounding effect
    referred to as the ``fester factor'').
        The Navy has been struggling to adequately define maintenance
    requirements which are key to completing maintenance on time. GAO's
    preliminary analysis showed that from fiscal years 2011 to 2014,
    aircraft carriers and surface combatants required 16 and 34 percent
    more work, respectively, than estimated by the Navy.

        7. Admiral Hilarides and Admiral Smith: Please discuss the impacts
    of deferred maintenance on the Navy's ability to accurately predict the
    duration and cost of ship maintenance?
        Admiral Hilarides and Admiral Smith. The Navy maintenance budget
    requests are built based upon independently certified models reflecting
    engineered maintenance plans for each ship class. Those engineered
    maintenance plans include what and when certain maintenance should be
    performed in support of the ship reaching its expected service life.
    When that maintenance is deferred, deviating from those plans,
    uncertainty is introduced and the engineering analysis used to predict
    ship material condition and determine the required maintenance may be
    invalidated.
        There are systems where inspections to determine their actual
    condition are not possible until the ships are in the maintenance
    availability, particularly in dry dock. For example, many portions of
    ships' hulls are not accessible unless the ship is in dry dock. The
    paint used on these surfaces are known to last at least the planned
    eight years between dry docking availabilities, when repainting is
    scheduled in the engineered maintenance plan. If deferred to nine
    years, one ship may have no issues, but another may have significant
    corrosion damage requiring significant time and funding resources for
    additional repairs.

        8. Senator Ayotte. Admiral Hilarides and Admiral Smith: Please
    discuss the risk posed by the magnitude of the surface fleet's deferred
    maintenance on its ability to achieve the CNO's goals for operational
    availability?
        Admiral Hilarides and Admiral Smith. The Navy's plans to reduce and
    minimize future deferred maintenance in the surface fleet are aligned
    with the CNO's goals for operational availability as reflected in the
    Optimized Fleet Response Plan (O-FRP). O-FRP allows us to recover
    material readiness ``in-stride'' while providing an agreed to level of
    presence to the combatant commanders. It protects the time required to
    properly train our sailors, maximizes the employability of our
    operational units for both sustainable global presence and contingency
    response, gives our sailors and their family's predictable deployment
    schedules, and preserves our force structure so that it meets service
    life expectations. If the Navy cannot reduce the magnitude of the
    surface fleet's deferred maintenance, we will continue to have
    difficulty completing maintenance on time without disrupting O-FRP
    schedules and negatively impacting training and certification, surge
    availability, and overall readiness.

        9. Senator Ayotte. Admiral Hilarides and Admiral Smith: How long
    will it take to remedy the surface fleet's deferred maintenance
    backlog?
        Admiral Hilarides and Admiral Smith. The President's Budget for
    2017 and the Future Years Defense Program (FYDP) supports continued
    efforts to work through the maintenance requirements and address the
    maintenance backlog to reset the force. Full recovery of the material
    readiness of the fleet is likely to extend beyond 2020. Stable funding,
    improvement in the on-time execution of ship depot maintenance and
    steady state operations are required to meet fleet readiness goals.

        10. Senator Ayotte. Admiral Hilarides and Admiral Smith: What is
    the navy doing to improve its definition of maintenance requirements?
        Admiral Hilarides and Admiral Smith. The various platform life
    cycle planning activities ensure that Class Maintenance Plan
    requirements are assigned at the correct level (Organizational (Ships
    Force), Intermediate (Intermediate Maintenance Facility), and or Depot
    (Naval or Private Shipyard) to enable proper accomplishment, taking
    into consideration applicable laws, urgency, priority, crew impact,
    capability and total cost. Maintenance procedures and schedule for Navy
    ships and related equipment are developed and performed per condition-
    based maintenance (CBM) methodology. The goal is to perform maintenance
    only when there is objective evidence of actual or predictable failure
    of a ship's installed systems or components, while ensuring operational
    readiness, safety, and equipment reliability in a cost effective
    manner. This is determined by approved reliability-centered maintenance
    (RCM) methodology by the command exercising technical authority for the
    system or component. The planning activities continually collect and
    evaluate Material Condition Data, Performance Monitoring Equipment
    data, Component Casualty Reports and accomplish Reliability Centered
    Maintenance Workshops / Maintenance Effectiveness Reviews (MERs). This
    is a continuous validation and refinement of Maintenance Plans using
    Reliability Centered Maintenance Principles coupled with Engineering
    Analysis, Configuration Data, Material Conditions, and Job Completion
    Data, which provides the outputs of 1) What to do: Inspect, Test,
    Restore, Replace, etc., 2) When to do it: Time Based, Condition, or
    Situation Based, and 3) Who to do it: Depot, Intermediate or Ship's
    Force.

        11. Senator Ayotte. Admiral Hilarides and Admiral Smith: What
    progress has the Navy made in limiting the amount of growth and new
    work in its ship maintenance availabilities?
        Admiral Hilarides and Admiral Smith. The various life cycle
    planning activities, including Submarine Maintenance Engineering
    Planning and Procurement Activity (SUBMEPP), Surface Maintenance
    Engineering Planning Program Activity (SURFMEPP) and Carrier Planning
    Activity (CPA), accomplish post-completion reviews of their respective
    platform availabilities, review the fidelity (scope) of existing
    maintenance requirements and analyze the growth and new work items that
    were accomplished for possible addition as new requirements in future
    availabilities.
        As an example of this process, the CPA is working with the entire
    maintenance community, including technical warrant holders, to focus
    efforts on future improvements, including; 1) the Availability Work
    Package Development Knowledge Sharing Network (KSN) where working
    groups review recent availabilities growth/new work and develop
    mitigation plans to support future availabilities, 2) the Remaining
    Service Life KSN, which focuses on specific systems and components, and
    3) the Industrial Material Processes KSN, which addresses material
    issues, and planned equipment replacement program improvements.
                           constructing new buildings
        12. Senator Ayotte. Admiral Smith: As the Navy conducts new
    construction and major renovations, in terms of bathrooms and locker
    rooms, what assumptions are made regarding the ratio of men and women?
        Admiral Smith. Navy shore engineers continually assess existing
    facility capacity and configuration in order to meet requirements.
    Prior to constructing or renovating a facility, the end user provides
    the actual number and gender of personnel to be supported. The shore
    establishment then determines bathroom and locker room capacity/
    configuration. Specific plumbing fixture allowances and criteria for
    these facilities are then determined through tables found in the DOD's
    Unified Facilities Criteria (UFC).
                        integrated lodging pilot program
        Senator Ayotte. Admiral Smith: As you know, on January 27, I wrote
    to you about the conditions at the Navy Gateway Inns and Suites in
    Norfolk at Scott Center Annex that many of my constituents have had to
    endure while conducting TDY.
        Some of my constituents, preparing to conduct maintenance on
    nuclear-powered submarines the next day, had to sleep in their cars due
    to elevated temperatures.
        I appreciate your February 11 response, and I appreciate that you
    took the time to visit the facility. However, I am concerned that you
    are saying the temperature problem in the rooms will not be addressed
    until 2018.

        13. Admiral Smith: What can we do to expedite this necessary
    solution?
        Admiral Smith. The Navy is developing a project to repair/modernize
    Bldg 1530. Pending funding availability, we anticipate award in fiscal
    year 2017. In the event of unseasonable weather impacting room
    temperatures, the lodging staff will offer to move guests to another
    NGIS building at Norfolk Naval Shipyard or provide a certificate of
    non-availability to allow use of commercial lodging options.

    DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
                   2017 AND THE FUTURE YEARS DEFENSE PROGRAM

                                  ----------

                            TUESDAY, APRIL 12, 2016

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

    MILITARY CONSTRUCTION, ENVIRONMENTAL, ENERGY, AND BASE CLOSURE PROGRAMS

        The subcommittee met, pursuant to notice, at 2:32 p.m. in
    Room SR-232A, Russell Senate Office Building, Senator Kelly
    Ayotte (chairman of the subcommittee) presiding.
        Committee members present: Senators Ayotte, Ernst,
    McCaskill, Shaheen, Hirono, and Kaine.

               OPENING STATEMENT OF SENATOR KELLY AYOTTE

        Senator Ayotte. Good afternoon. I want to thank all of you
    for being here.
        This hearing on the Subcommittee on Readiness and
    Management Support will come to order.
        I want to thank Ranking Member Kaine for your leadership on
    defense issues, including infrastructure, energy, and
    environmental programs, which is what our hearing is about
    today.
        We are joined this afternoon by Mr. Peter Potochney,
    performing the duties of the Assistant Secretary of Defense for
    Energy, Installations and Environment. We are joined by
    Assistant Secretary of the Army for Installations, Energy and
    Environment, the Honorable Katherine Hammack. Wonderful to see
    you, Secretary Hammack. We are also joined by Secretary McGinn
    and certainly the Assistant Secretary of the Navy for Energy,
    Installations and Environment. We are joined by Assistant
    Secretary of the Air Force for Installations, Environment and
    Energy, Secretary Ballentine. So thank you all for being here
    today and for your service to our country. We really appreciate
    it.
        As we prepare for the committee markup of the National
    Defense Authorization Act, the focus of today's hearing is on
    the state of our military installations and the
    administration's budget request for military construction,
    facilities sustainment and restoration, energy projects, and
    environmental remediation and management. As I have said
    before, well maintained and modern Department of Defense
    installations are critical to maintaining the readiness of our
    armed forces.
        That is why we must carefully scrutinize the Department's
    military construction and facilities sustainment, restoration,
    and modernization funding requests. While we must continually
    root out waste and inefficiency and scrutinize the need for
    every proposed project, I am concerned that a defense budget
    based on artificial budget caps, rather than our national
    security interests, is forcing each of the services to postpone
    important facility projects that our troops need.
        The services are being forced to take risks in facility
    investments in order to understandably prioritize near-term
    readiness requirements for our men and women in uniform. One of
    the purposes of this hearing is to better understand the
    consequences over time of underfunding facility accounts.
        As you point out in your written testimony, Mr. Potochney,
    almost 27 percent of the Department's facility inventory is in
    poor or failing condition. The condition of readiness centers
    in New Hampshire is particularly unacceptable. According to the
    December 2014 Army National Guard study, the average condition
    index of New Hampshire Army National Guard readiness centers is
    poor, 64 out of 100 scale, ranking New Hampshire 51 out of 54
    States and territories that have been evaluated nationwide.
        After repeatedly raising concerns about the need for
    military construction projects in New Hampshire to support our
    Army National Guard, I am very, very pleased that the Army has
    requested funding for much needed vehicle maintenance shops in
    Hooksett and Rochester for fiscal year 2017. So I thank you for
    that.
        I also look forward to authorizing those needed projects in
    this markup, as well as projects at the Pease Air National
    Guard Base, Portsmouth Naval Shipyard, and other bases around
    the country in my Readiness Subcommittee mark and working with
    my colleagues to provide timely funding.
        I look forward to discussing some budget requests that
    require additional scrutiny, including the request for $6.1
    million for a microgrid project in California that Department
    documents say will support nonessential functions. So I would
    like to understand more about that request.
        While I recognize that the Obama administration has once
    again requested another round of base realignment and closure,
    BRAC, I continue to oppose another BRAC round for many reasons.
    As I have said before, according to the Government
    Accountability Office, the 2005 BRAC round process cost 67
    percent more than originally anticipated, and even after
    acknowledging the shortcomings of the 2005 round, the
    Department continues to request another BRAC round. I do not
    want to give the Department the open-ended authority to pursue
    another BRAC round that will potentially incur significant
    upfront costs when we do not have the room in our budget in the
    next few years to afford many fundamental readiness investments
    that are right before us.
        Also, our military is currently sized based on artificial
    budget caps, instead of being sized to protect our national
    security interests from the threats we face, and certainly we
    have had testimony before this committee by the Vice Chiefs of
    Staff of each of our forces discussing the concerns they have
    about the size of our force and our readiness. In short, there
    is a significant and dangerous gap between the military we have
    and the military we need.
        Therefore, I do not believe at this point it makes sense to
    authorize a round of base closures when many of us are hopeful
    that regardless of the outcome of this coming election, that
    the next administration will align its proposed defense budget
    and the size of our military to the growing threats we face and
    we will need many of the bases that DOD [Department of Defense]
    may currently want to close.
        I will also say it will be up to us in the Congress to
    address sequestration and to make sure that sequestration does
    not go back into effect. We will need to do that on a
    bipartisan basis, and I look forward to working on that.
        So I will not be including the authority to conduct a BRAC
    round in the Readiness Subcommittee mark of the National
    Defense Authorization Act for the Fiscal Year of 2017.
        Regarding environmental programs, I look forward to getting
    an update from you, Secretary Ballentine, regarding the recent
    agreement with the City of Portsmouth, as well as the Air
    Force's compliance with the Environmental Protection Agency's
    directive to restore the Pease aquifer. I appreciate that the
    Air Force has really negotiated with the city to come to this
    outcome, and I look forward to hearing about it.
        I look forward to the testimony of our witnesses and to
    continuing our work together to ensure that each of the
    service's military construction, energy, and environmental
    programs are well designed and appropriately funded to support
    our servicemembers, military families, combat readiness, and
    our national security.
        I thank our witnesses again for being here today and for
    their leadership and service to our country in challenging
    times. I look forward to your testimony.
        With that, I would like to call on my ranking member,
    Senator McCain--Senator Kaine. I made him chairman already.
        [Laughter.]
        Senator Ayotte. Senator Kaine for his opening statements.
    Thank you, Senator Kaine.

                     STATEMENT OF SENATOR TIM KAINE

        Senator Kaine. Thank you, Madam Chair.
        To all my colleagues, I was at my son's graduation from the
    basic school, and it was a massive crowd. They started to
    introduce dignitaries in the audience, and they said, and we
    have Senator McCain here. Really?
        [Laughter.]
        Senator Kaine. Why did Senator McCain come to the
    graduation? Oh. Okay. So at my own son's graduation, I was
    introduced as Senator McCain. But I am used to that now, I
    guess.
        But I want to thank you all for coming. This is an
    important hearing, and it is all to prep for the work that we
    will be doing shortly in this room and the room around the
    corner on the NDAA [National Defense Authorization Act].
        The administration budget request is $7.4 billion for
    MILCON [military construction] and family housing, and another
    $10.2 billion for facilities sustainment and modernization.
    Both of these numbers are $1 billion less compared to last
    year's request.
        Now, last year, the administration requested more than the
    budget caps and got grief for that. This year, the
    administration's requests are in accord with the budget deal,
    and we will give you grief for that. But it all goes for the
    proposition that we recognize that sequester and the budget
    caps put you and put the national defense under a
    straightjacket that it is our responsibility, working with our
    colleagues, to ameliorate and hopefully lift. If we do not
    reach a deal to repeal sequestration, our military end
    strength, our readiness, our modernization all suffer, and in
    our installations, the readiness account items start to really,
    really degrade. Then it will cost us more to bring them back to
    where they should be. So we appreciate the service you provide,
    and we are going to get into this today.
        Many of you have significant expertise for energy programs.
    I just want to say a word about that. The DOD is the biggest
    energy user in the Federal Government. I am happy--I have been
    happy--to see the degree of forward thinking in the DOD about
    energy usage. Alternative energy strategies, pursuing sort of
    third-party financed energy, alternative energy, real energy
    projects at little or no cost to the DOD is a significant item
    that you have been working on.
        The Air Force has established an Office of Energy Assurance
    and leveraging lessons learned there. The Air Force is
    developing a solar array at Nellis. I want to understand more
    about that and think that that can be important because that
    will insulate the base and provide protection in case the grid
    were to go down. We need to worry about those eventualities.
        The Army has a biomass project in New York which could
    enable Fort Drum to operate completely independently off the
    grid.
        These are example, I think, of smart investments that can
    give us resilience.
        These operational energy investments are not only important
    for costs and resilience, but they have a direct impact on our
    warfighting mission. History provides a lot of lessons here.
    During Operation Iraqi Freedom, 20 percent of our casualties
    came from units having to protect resupply convoys, of which 70
    to 80 percent of those resupply convoys were water and fuel
    restocking. The USS Cole was bombed while it was in refueling.
    If we can mitigate those kinds of risks to sailors and marines,
    by having hybrid electric drives enabling ships to steam
    farther on the same amount fuel, then it reduces risk of the
    most dangerous kind. So we need to increase our energy across
    the DOD spectrum. I know we will talk about that today.
        The Marine Corps is investing in fascinating technologies
    in this regard, not just to protect ourselves, but to engage in
    better warfighting, solar powered unmanned aircraft which can
    identify and then use thermals to sail off even longer for as
    long as 20 hours per day, advancing our defense mission.
        then finally, there is a number of items underway in each
    of the service branches to deal with the effect of climate
    change on our installations and infrastructure. I have a real
    sensitivity about this because of the effect of climate and sea
    level rise, especially upon the largest naval installation in
    the world in Hampton Roads, Virginia. It is a region that is
    the second most vulnerable to sea level rise in the United
    States after New Orleans. Currently the main Norfolk road in
    and out of the largest naval base in the world is going to be
    inundated by normal daily tides 2 or 3 hours a day by 2040, and
    that does not even take into account storm conditions, which
    are getting more and more frequent.
        I associate myself with sort of the punch line of the
    chairwoman's comments about BRAC and maybe from a slightly
    different angle.
        I think the military is assessing that you may have 15 to
    20 or even 25 percent of excess infrastructure. Now, that is a
    cost. If we are spending a cost on something that is truly
    excess, then there is money we are spending on things we should
    not and there would be a higher and better use to spend it on
    things we should.
        My own experience with BRAC as a mayor and governor
    convinced me that there has got to be a better way to
    rationalize excess infrastructure. I have tended to be of the
    belief that the military should make recommendations to us
    about infrastructure the way they make recommendations about
    pay and benefits or weapon systems or a whole lot of things.
    You know what happens. You make these recommendations to us and
    we ask you a lot of tough questions, and we sure do not agree
    with all of them. We may agree with two-thirds of them. We may
    agree with three-quarters of them. This is a hard dialogue.
        But the BRAC process, from the standpoint of somebody who
    has been a mayor and governor, basically is this. The Federal
    Government will declare a need for a BRAC. Every city and
    county in the United States that has any military asset then
    has to hire lawyers and lobbyists to do a full court press to
    protect their base, even if their particular installation is
    not at all in jeopardy. But it would be political suicide for
    local officials or State officials not to put on the full court
    press to protect an installation, even it was not in jeopardy
    on the off chance that, at the end of the day, there would be a
    decision made about it, and the local officials would say,
    well, gosh, why did you not do anything about this?
        So what BRAC becomes is just this massive lobbyist and
    lawyer effort that is largely unnecessary. The military has
    great expertise. You are no more omniscient or perfect than any
    of us are. You might make recommendations that we would
    disagree with for maybe the wrong reasons or we might disagree
    with them for the right reasons.
        But I would love to move to a situation where we
    rationalize our infrastructure investments, even including
    closures, with the basic recommendations that are based on the
    expertise within DOD and then allowing Congress to do what we
    do, which is kick them around and criticize them. We will
    embrace some of them and we will reject others. I think that
    would be a much better way to look at the rationalization of
    infrastructure, and that is why I want to support the
    chairwoman when we get into the mark with respect to a BRAC
    round.
        But a lot of important issues to talk about. We appreciate
    your service, and we are looking forward to hearing your
    testimony and asking questions.
        Senator Ayotte. Thank you, Senator Kaine.
        I would now like to call on Mr. Potochney for his
    testimony. Thank you.

       STATEMENT OF PETER J. POTOCHNEY, PERFORMING THE DUTIES OF
     ASSISTANT SECRETARY OF DEFENSE FOR ENERGY, INSTALLATIONS AND
                              ENVIRONMENT

        Mr. Potochney. Thank you, ma'am. Good afternoon, Chairwoman
    Ayotte and Ranking Member Kaine and distinguished members of
    the committee.
        My name is Pete Potochney. I am proud and honored to be
    here. I am currently the Deputy Assistant Secretary for Basing,
    and so I know a little bit about BRAC because I have been doing
    BRAC for quite a while. But I am also performing the duties of
    the Assistant Secretary for Energy, Installations and
    Environment, and in that capacity, I am sitting here in front
    of you this afternoon. I have been in that capacity since
    December and will probably remain for a little while.
        I will make three quick points, and they piggyback onto the
    points that both the chairwoman and ranking member just made.
        The budget situation we are in right now is critically
    impacting us, and it is obvious. Everybody knows it. Yet, here
    we are. Facilities do have a direct impact on our warfighting
    capability, quality of life of our personnel, our families,
    retention, everything. But we do enjoy less of a priority than
    operational requirements that are more directly related to
    readiness. For that reason, we choose to accept risk in our
    facilities, and that is why we pay, I would argue, a
    disproportionate share of the cuts that we are experiencing
    right now, but that is the way it should be.
        The second point I would make that flows from that is the
    people sitting around this table facing you right now. We are
    the advocates for our facilities. We are not the warfighters.
    So we are the people who are trying like hell to make sure that
    the Department exercises informed decision-making and that
    decision-making is informed by the facts of how important our
    facilities are. Yet, we compete for resources like everyone
    else.
        The third point I will make--and it piggybacks on both what
    you said but it runs counter to it--is that we do need BRAC. We
    do need to avoid wasting the precious funding that we do get on
    facilities that we do not need. I think all the services would
    benefit from an examination, a holistic examination of their
    infrastructure compared to their force structure and their
    projections for that force structure in a process that treats
    all bases equally, fairly, in a way that Congress has oversight
    and an independent commission reviews it, although, Senator
    Kaine, I appreciate your comments about BRAC being--I do not
    want to put words in your mouth, but BRAC being very difficult
    on communities. You are absolutely right. But I would argue it
    is so important that it has to be, and we need a process that
    will allow us to conduct that kind of rigor that those
    communities and the Congress deserve. That is my final point.
        I appreciate the opportunity to be here. Thank you.
        [The prepared statement of Mr. Potochney follows:]

                    Prepared Statement by Mr. Pete Potochney
                                  introduction
        Chairman Ayotte, Ranking Member Kaine and distinguished members of
    the subcommittee: Thank you for the opportunity to present the
    President's Fiscal Year (FY) 2017 Budget request for the Department of
    Defense programs supporting energy, installations, and the environment.
        In my testimony, I will focus first on the budget request. As you
    will note, the Administration's budget includes $7.4 billion for
    Military Construction (including family housing), and $10.2 billion for
    Facility Sustainment and Recapitalization. These are both decreases
    from last year, as the Bipartisan Budget Act of 2015 caps overall
    defense spending. Although this request allows a reduction in
    facilities risk due to a slight increase in Sustainment funding by the
    Services, the Department is still accepting risk in facilities. As this
    Subcommittee well knows, facilities degrade more slowly than readiness,
    and in a constrained budget environment, it is responsible to take risk
    in facilities first.
        My testimony will also address the environmental budget. This
    budget has been relatively stable, and we continue to show progress in
    both our compliance program, where we've seen a decrease in
    environmental violations, and in cleanup, where 84 percent of our
    39,000 sites have reached Response Complete. We remain on track to meet
    our goals of 90 percent Response Complete in 2018, and 95 percent in
    2021.
        As you know, Operational Energy Plans and Programs merged with
    Installations and Environment office in 2015 to form the Office of
    Assistant Secretary of Defense for Energy, Installations and
    Environment (EI&E). EI&E now oversees all energy that is required for
    training, moving and sustaining military forces and weapons platforms
    for military operations, as well as energy used on military
    installations. While the budget request for Military Construction and
    Environmental Remediation programs includes specific line items, the
    Department's programs for Operational Energy and Installation Energy
    are subsumed into other accounts. With that in mind, I will summarize
    the newly released 2016 Operational Energy Strategy and address the
    budgets for the Department's operational and installation energy
    portfolio.
        In addition to budget, I will also highlight a handful of top
    priority issues--namely, the Administration's request for BRAC
    authority, European consolidation efforts, European Reassurance
    Initiative, the status of the movement of marines from Okinawa to Guam,
    an overview of our energy programs, and climate change.
       fiscal year 2017 budget request--military construction and family
                                    housing
        The President's Fiscal Year 2017 Budget requests $7.4 billion for
    the Military Construction (MilCon) Appropriation--a decrease of
    approximately $1.0 billion from the fiscal year 2016 budget request
    (see Table 1 below). This decrease is directly attributable to the
    resourcing constraints established by the Bipartisan Budget Agreement
    and the Department's need to fund higher priority readiness and
    weapon's modernization program. The request does recognize the
    Department's need to invest in facilities that address critical mission
    requirements and life, health, and safety concerns, while acknowledging
    the constrained fiscal environment. In addition to new construction
    needed to bed-down forces returning from overseas bases, this funding
    will be used to restore and modernize enduring facilities, acquire new
    facilities where needed, and eliminate those that are excess or
    obsolete. The fiscal year 2017 MilCon request includes projects that
    directly support operations and training, maintenance and production,
    and projects to take care of our people and their families, such as
    medical treatment facilities, unaccompanied personnel housing, and
    schools.
        As shown by the decrease in this year's budget request, the DOD
    Components continue to take risk in the MilCon program in order to
    lessen risk in other operational and training budgets.
        While the Department's fiscal year 2017 budget request funds
    critical projects that sustain our warfighting and readiness postures,
    taking continued risk across our facilities inventory will degrade our
    facilities and result in the need for significant investment for
    facility repair and replacement in the future. Our limited MilCon
    budget for fiscal year 2017 leaves limited room for projects that would
    improve aging workplaces, and therefore, could adversely impact routine
    operations and the quality of life for our personnel.

     Table 1.--MilCon Appropriation Request, fiscal year 2016 versus fiscal
                                    year 2017
    ------------------------------------------------------------------------
                                                         Change from FY 2016
                                   FY 2016    FY 2017  ---------------------
          Account Category         request    request    Funding
                                      ($         ($         ($      Percent
                                  millions)  millions)  millions)
    ------------------------------------------------------------------------
    Military Construction.......      6,653      5,741      (912)      (14%)
    Base Realignment and Closure        251        205       (46)      (18%)
    Family Housing..............      1,413      1,320       (93)       (7%)
    Chemical Demilitarization...          0          0          0         0%
    NATO Security Investment            120        178         58        48%
     Program....................
        TOTAL...................      8,437      7,444      (993)      (12%)
    ------------------------------------------------------------------------

    Military Construction
        The fiscal year 2017 military construction request of $6.1 billion
    addresses routine requirements for construction at enduring
    installations stateside and overseas, and for specific programs such as
    Base Realignment and Closure and the NATO Security Investment Program.
    This is a 13 percent decrease from our fiscal year 2016 request, and
    this level of funding remains significantly less than historic trends
    prior to the Budget Control Act. In addition, we are targeting MilCon
    funds to three key areas.
        First and foremost, our MilCon request supports the Department's
    operational missions. MilCon is key to supporting forward deployed
    missions as well as implementing initiatives such as the Asia-Pacific
    rebalance, European Infrastructure Consolidation, European Reassurance
    Initiative, and cyber mission effectiveness. Our fiscal year 2017
    budget request includes $473 million for 13 F-35A/B/C maintenance,
    production, training, and support projects to accommodate initial F-35
    deliveries; $194 million to support 8 fuel infrastructure projects;
    $62.2 million for a power upgrades utility project in support of the
    U.S. Marines relocation to Guam; $260 million for recapitalization of
    National Security Agency facilities; and $53.1 million for the third
    phase of a Joint Intelligence Analysis Complex Consolidation at Royal
    Air Force Croughton, United Kingdom. The budget request also includes
    $470 million to address new capabilities/mission, force structure
    growth, and antiquated infrastructure for Special Operations Forces;
    $176 million for 3 Missile Defense Agency projects, including $156
    million for Phase 1 of the Long Range Discrimination Radar System
    Complex in Alaska; a $76 million investment to recapitalize facilities
    at three Naval Shipyards; and $124 million for 4 unmanned aerial
    vehicle operational facilities.
        Second, our fiscal year 2017 military construction budget request
    continues the Department's 10 year plan (which started in fiscal year
    2011) to replace and recapitalize more than half of the DODEA schools.
    Funding in fiscal year 2017 includes $246 million to address four
    schools in poor condition at Dover, Delaware; Kaiserslautern, Germany;
    Kadena AB, Japan; and RAF Croughton, United Kingdom.
        Third, the fiscal year 2017 budget request includes $304 million
    for medical facility recapitalization. This includes $50 million for
    the first increment of a $510 million project for the Walter Reed
    Medical Center Addition/Alteration; $58.1 million for increment six (of
    a $982 million seven increment project) for the Medical Center
    Replacement at Rhine Ordnance Barracks in Germany; and $195.9 million
    for five other smaller medical/dental facilities. All the projects are
    crucial for our continued delivery of quality health care that our
    servicemembers and their families deserve whether stationed stateside
    or during overseas deployments.
    Overseas Contingency Operations
        The fiscal year 2017 Overseas Contingency Operations budget request
    includes $47.9 million for projects supporting the mission in East
    Africa (Djibouti). The request also includes $113.6 million in European
    Reassurance Initiative military construction funding for military
    construction activities for the Active components of all Military
    Services, and Defense-Wide Activities supporting military operations in
    Europe in direct support of NATO, Operation Freedom's Sentinel, and
    Operation Inherent Resolve. Funds provided would bolster security of
    U.S. NATO Allies and partner states in Europe and deter aggressive
    actors in the region by enhancing prepositioning and weapons storage
    capabilities, improving airfield and support infrastructure, providing
    5th generation warfighting capability, and building partnership
    capacity.
    Family and Unaccompanied Housing
        A fundamental priority of the Department is to support military
    personnel and their families to improve their quality of life by
    ensuring access to suitable, affordable housing. Service members 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 fiscal year 2017 budget request includes $1.3 billion to fund
    construction, operation, and maintenance of government-owned and leased
    family housing worldwide as well as to provide housing referral
    services to assist military members in renting or buying private sector
    housing, and oversight of privatized family housing (see Table 2
    below). Included in this request is $356 million for construction and
    improvements; $232 million for operations (including housing referral
    services); $229 million for maintenance; $154 million for utilities;
    and $349 million for leasing and privatized housing oversight.
        This funding request supports over 38,000 government-owned family
    housing units, almost all of which are on enduring bases in foreign
    countries now that the Department has privatized the vast majority of
    our family housing in the United States (over 206,000 units). The
    Department is also leasing more than 9,000 family housing units where
    government-owned or privatized housing is not feasible. Our request
    also includes $3.3 million to support administration of the Military
    Housing Privatization Initiative (MHPI) Program as prescribed by the
    Federal Credit Reform Act of 1990, to ensure the project owners
    continue to fund future capital repairs and replacements as necessary
    to provide quality housing for military families and to ensure that
    these projects remain viable for their 40-50 year lifespan.
        In fiscal year 2015, the Department notified Congress of DOD's
    intent to transfer $96 million of Navy family housing construction
    funds into the Department's Family Housing Improvement Fund (FHIF) to
    execute Hawaii Phase 6 to support Marine Corps housing requirements in
    Hawaii. Execution of Hawaii Phase 6 brings the Department's total
    privatized family housing inventory to nearly 202,000 homes.

     Table 2.--Family Housing Budget Request, Fiscal year 2016 Versus Fiscal
                                    Year 2017
    ------------------------------------------------------------------------
                                                         Change from FY 2016
                                   FY 2016    FY 2017  ---------------------
          Account category         request    request    Funding
                                      ($         ($         ($      Percent
                                  millions)  millions)  millions)
    ------------------------------------------------------------------------
    Family Housing Construction/        277        356         79        29%
     Improvements...............
    Family Housing Operations &       1,136        961      (175)      (15%)
     Maintenance................
    Family Housing Improvement            0          3          3       100%
     Fund*......................
        TOTAL...................      1,413      1,320         93       (7%)
    ------------------------------------------------------------------------
    *We made no fiscal year 2016 request for funds to oversee privatized
      housing because we had sufficient fiscal year 2015 cost savings to
      cover our fiscal year 2016 expenses.

        The Department also continues to encourage the modernization of
    Unaccompanied Personnel Housing (UPH) to improve privacy and provide
    greater amenities. In recent years, we have heavily invested in UPH to
    support initiatives such as BRAC, global restationing, force structure
    modernization, and the Navy's Homeport Ashore initiative. However, this
    constrained budget request only includes five UPH projects totaling
    $161 million, all of which are for transient personnel or trainees such
    as a $67 million Recruit Dormitory at Joint Base San Antonio, Texas.
    Facilities Sustainment and Recapitalization
        In addition to new construction, the Department invests significant
    funds in maintenance and repair of our existing facilities. Sustainment
    represents the Department's single most important investment in the
    condition of its facilities. It includes regularly scheduled
    maintenance and repair or replacement of facility components--the
    periodic, predictable investments that should be made across the
    service life of a facility to slow its deterioration, optimize the
    Department's investment, and save resources over the long term. Proper
    sustainment slows deterioration, maintains safety, preserves
    performance over the life of a facility, and helps improve the
    productivity and quality of life of our personnel.

     Table 3.--Sustainment and Recapitalization Budget Request, Fiscal Year
                          2016 Versus Fiscal Year 2017
    ------------------------------------------------------------------------
                                                         Change from FY 2016
                                   FY 2016    FY 2017  ---------------------
          Account category         request    request    Funding
                                      ($         ($         ($      Percent
                                  millions)  millions)  millions)
    ------------------------------------------------------------------------
    Sustainment (O&M)...........      8,022      7,450      (572)       (7%)
    Recapitalization (O&M)......      2,563      2,088      (475)      (19%)
        TOTAL...................     10,585      9,538    (1,047)      (10%)
    ------------------------------------------------------------------------

        The accounts that fund these activities have taken significant cuts
    in recent years. For fiscal year 2017, the Department's budget request
    includes $7.4 billion for sustainment and $2.1 billion for
    recapitalization (see Table 3 above) in Operations & Maintenance
    funding only. The combined level of sustainment and recapitalization
    funding ($9.5 billion) is a 10 percent decrease from the fiscal year
    2016 President's Budget (PB) request ($10.6 billion), and reflects an
    acceptance of significant risk in DOD facilities. In fact, the request
    supports average DOD-wide sustainment funding level that equates to 74
    percent of the FSM requirement as compared to the Department's goal to
    fund sustainment at 90 percent of modeled requirements.
        Recent and ongoing budget constraints have limited investment in
    facilities sustainment and recapitalization to the point that 11.7
    percent of the Department's facility inventory is in ``poor'' condition
    (Facility Condition Index (FCI) between 60 and 79 percent) and another
    14.8 percent is in ``failing'' condition (FCI below 60 percent) based
    on recent facility condition assessment data. Compared to last year
    (see Table 4), the Department is seeing more poor facilities moving
    into failing conditions. Until the out-year sequestration challenges
    are overcome, the Department will continue to take risk in funding to
    sustain and recapitalize existing facilities. This will ultimately
    result in DOD facing larger bills in the out-years to restore or
    replace facilities that deteriorate prematurely.

     Table 4.--Comparison of Fiscal Year 2014 and Fiscal Year 2015 Facility
                                Condition Indices
    ------------------------------------------------------------------------
                                            End of FY 2015 FCI (%)
                                 -------------------------------------------
       End of FY 2014 FCI (%)     Poor  (60-  Failing   Poor  (60-  Failing
                                    79 %)      (<60%)     79 %)      (<60%)
    ------------------------------------------------------------------------
    Army........................       31.3       10.2       12.8       26.1
    Navy........................       17.4        6.4       15.8        6.4
    Air Force...................        2.6        4.1        5.7        3.9
    Washington Headquarters             2.2        4.7        2.1        5.8
     Service....................
        TOTAL...................       19.7        7.4       11.7       14.8
    ------------------------------------------------------------------------

            fiscal year 2017 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 2017 Budget, we are
    requesting $3.4 billion, a slight decrease from fiscal year 2016, to
    continue the legacy of excellence in our environmental programs.
        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
    Integration (REPI) program.

                Table 5.--Environmental Program Budget Request, Fiscal Year 2017 Versus Fiscal Year 2016
    ----------------------------------------------------------------------------------------------------------------
                                                                                                Change from FY 2016
                                                                      FY 2016      FY 2017   -----------------------
                                Program                               Request      Request      Funding
                                                                    ($millions)  ($millions)  ($millions)   Percent
    ----------------------------------------------------------------------------------------------------------------
    Environmental Restoration.....................................       1,107        1,030         (77)        (7%)
    Environmental Compliance......................................       1,389        1,493          103          7%
    Environmental Conservation....................................         389          420           31          8%
    Pollution Prevention..........................................         101           84         (17)       (17%)
    Environmental Technology......................................         200          186         (14)        (7%)
    BRAC Environmental............................................         217          181         (36)       (17%)
        TOTAL.....................................................       3,405        3,395         (10)      (0.3%)
    ----------------------------------------------------------------------------------------------------------------

    Environmental Restoration
        We are requesting $1.2 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
    ordnance and discarded munitions) sites. This includes $1.0 billion for
    ``Environmental Restoration,'' which encompasses active installations
    and Formerly Used Defense Sites (FUDS) locations and $181 million for
    ``BRAC Environmental.'' The amount of BRAC Environmental funds
    requested will be augmented by $108 million of land sale revenue and
    prior year, unobligated funds, bringing the total amount of BRAC
    Environmental funding planned for obligation in fiscal year 2017 to
    $289 million. These investments help to ensure DOD continues to make
    property at BRAC locations safe and environmentally suitable for
    transfer. We remain engaged with the Military Departments to ensure
    they are executing plans to spend remaining unobligated balances in the
    BRAC account.

                                         Table 6.--Progress Toward Cleanup Goals
    ----------------------------------------------------------------------------------------------------------------
     Goal: Achieve Response Complete at 90% and 95% of Active and BRAC IRP and MMRP sites, and FUDS IRP sites, by FY
                                             2018 and FY 2021, respectively
    -----------------------------------------------------------------------------------------------------------------
                                                                                 Projected Status   Projected Status
                                                              Status as of the   at the end of FY   at the end of FY
                                                               end of FY 2015          2018               2021
    ----------------------------------------------------------------------------------------------------------------
    Army...................................................                90%                94%                97%
    Navy...................................................                80%                86%                92%
    Air Force..............................................                80%                89%                94%
    DLA....................................................                86%                97%                97%
    FUDS...................................................                80%                89%                94%
        TOTAL..............................................                84%                91%                95%
    ----------------------------------------------------------------------------------------------------------------

        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 in the disposition of our property
    made excess through the BRAC process or other efforts.
        By the end of 2015, the Department, in cooperation with state
    agencies and the Environmental Protection Agency, completed cleanup
    activities at 84 percent of Active and BRAC IRP and MMRP sites, and
    FUDS IRP sites, and is now monitoring the results. During fiscal year
    2015 alone, the Department completed cleanup at over 870 sites. Of the
    roughly 39,500 restoration sites, almost 31,500 are now in monitoring
    status or cleanup completed. We are currently on track to meet our
    program goals--anticipating complete cleanup at 95 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; adopting new technologies to reduce cost
    and accelerate cleanup; refining and standardizing our cost estimating;
    and improving our relationships with State regulators through increased
    dialogue. All of these initiatives help ensure that we make the best
    use of our available resources to complete cleanup.
    Environmental Technology
        A key part of DOD's approach to meeting its environmental
    obligations and improving its performance is its pursuit of advances in
    science and technology. The Department has a long record of success
    when it comes to developing innovative environmental technologies and
    getting them transferred out of the laboratory and into actual use on
    our 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 2017 budget request for Environmental
    Technology overall is $191 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 2017 budget request includes $65
    million for SERDP and $32 million for ESTCP for environmental
    technology demonstrations, with an additional $20 million requested
    specifically 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 life-cycle costs of multiple weapons systems, and
    improving natural resource management.
        As an example, this past year SERDP-sponsored project to conduct
    basic research that is will develop an environmentally benign Chemical
    Agent Resistant Coating (CARC), which is critical technology for the
    protection of military assets. Current CARC coatings contribute
    approximately 2.3 million pounds of volatile organize compounds (VOCs)
    and hazardous air pollutants (HAPs) to the environment each year. The
    new novel powder CARC is absent of solvent, emits nearly zero VOCs, can
    be recycled, and is compatible with existing CARC systems. In addition,
    testing to date proves that the exterior durability of this coating is
    superior to any liquid CARC system, supporting DOD's initiative for
    corrosion prevention and mitigation. Coating products are currently in
    transition to Original Equipment Manufacturers, Depots, and the Defense
    Logistics Agency (DLA).
        Looking ahead, our environmental technology investments are focused
    on the Department's evolving requirements. In the area of Environmental
    Restoration, we are launching a new three-year initiative to support
    sustainable range management by researching the environmental impacts
    of new munitions compounds and we will continue our investments in
    technologies to address the challenges of contaminated groundwater
    sites where no good technical solutions are currently available. We are
    working to understand the behavior of contaminants in fractured bedrock
    and large dilute plumes, which represent a large fraction of these
    sites, and to develop treatment and management strategies. We will
    continue our efforts to develop the science and tools needed to meet
    the Department's obligations to assess and adapt to climate change.
    Finally, to transition the important work of improving the
    sustainability of our industrial operations and reducing life-cycle
    costs by eliminating toxic and hazardous materials from our production
    and maintenance processes we are initiating a program to demonstrate
    that our most hazardous chemicals can be eliminated from a maintenance
    production line.
    Environmental Conservation and Compatible Development
        To maintain access to the land, water and airspace needed to
    support our mission needs, the Department continues to successfully
    manage the natural resources entrusted to us--including protecting the
    many threatened and endangered species found on our lands. DOD manages
    approximately 25 million acres containing many high-quality and unique
    habitats that provide food and shelter for nearly 520 species-at-risk
    and over 400 that are federally listed as threatened or endangered
    species. That is 9 times more species per acre than the Bureau of Land
    Management, 6 times more per acre than the United States Fish and
    Wildlife Service (USFWS), 4.5 times more per acre than the Forest
    Service, and 3.5 times more per acre than the National Park Service. A
    surprising number of rare species are found only on military lands--
    including more than 15 listed species and at least 75 species-at-risk.
        The fiscal year 2017 budget request for Conservation is $420
    million. The Department invests these funds to manage its imperiled
    species as well as all of its natural resources in an effort to sustain
    the high quality lands our service personnel need for testing, training
    and operational activities, and to maximize the flexibility our
    servicemen and women need to effectively use those lands. Species
    endangerment and habitat degradation can and does have direct mission-
    restriction impacts. That is one reason we work hard to prevent species
    from becoming listed and, if they do become listed, to manage these
    species and their habitat in ways that sustain the resource and enable
    our ability to test and train. All of our plans now adequately address
    these species, and we have successfully and consistently avoided
    critical habitat designations because our plans adequately address
    management concerns for species that exist on our lands. Getting ahead
    of any future listings has been a prime, natural resource objective for
    the last several years and will remain so in the future.
    Readiness and Environmental Protection Integration (REPI) Program
        To help ensure DOD sustains its national defense mission and
    protects species under duress, the Department has developed a strategy
    that supports conservation beyond installation boundaries. Under this
    strategy DOD engages with other governmental and non-governmental
    partners, as well as private landowners, to develop initiatives and
    agreements for protecting species for the purposes of precluding or
    mitigating regulatory restrictions on training, testing, and operations
    on DOD lands. Expanding the scale and options for protecting species on
    non-DOD land benefits conservation objectives while helping sustain
    access to, and operational use, of DOD live training and test domains.
        This strategic focus is a key element of the Readiness and
    Environmental Protection Integration (REPI) Program. Under REPI, the
    Department partners with conservation organizations and state and local
    governments to preserve buffer land and sensitive habitat near
    installations and ranges. Preserving these areas allows the Department
    to avoid more costly alternatives such as workarounds, restricted or
    unrealistic training approaches, or investments to replace existing
    test and training capability. Simultaneously, these efforts ease the
    on-installation species management burden and reduce the possibility of
    restricted activities, ultimately providing more flexibility for
    commanders to execute their missions.
        Included within the $420 million for Conservation, $60 million is
    directed to the REPI Program. The REPI Program is a cost-effective tool
    to protect the nation's existing training, testing, and operational
    capabilities at a time of decreasing resources. In the last 13 years,
    REPI partnerships have protected more than 437,000 acres of land around
    86 installations in 29 states. In addition to the tangible benefits to
    training, testing, and operations, these efforts have resulted in
    significant contributions to biodiversity and recovery actions
    supporting threatened, endangered and candidate species.
        The REPI Program supports the warfighter and protects the taxpayer
    because it multiplies the Department's investments through unique cost-
    sharing agreements. Even in these difficult economic times, REPI is
    able to directly leverage the Department's investments at least one-to-
    one with those of our partners, effectively securing critical buffers
    around our installations for half-price.
        In addition, DOD, along with the Departments of the Interior and
    Agriculture, continues to advance the Sentinel Landscapes Partnership
    to protect large landscapes where conservation, working lands, and
    national defense interests converge--places defined as Sentinel
    Landscapes. Established in 2013, the Sentinel Landscapes Partnership
    further strengthens interagency coordination and provides taxpayers
    with the greatest leverage of their funds by aligning federal programs
    to advance the mutually-beneficial goals of each agency.
        Thus far, three Sentinel Landscapes have been identified around
    Joint Base Lewis-McChord, Washington; Fort Huachuca, Arizona; and Naval
    Air Station (NAS) Patuxent River and the Atlantic Test Ranges,
    Maryland. The pilot Sentinel Landscape project at JBLM influenced the
    USFWS decision to avoid listing a butterfly species in Washington,
    Oregon, and California. The USFWS cited the ``high level of protection
    against further losses of habitat or populations'' from investments
    made by Joint Base Lewis-McChord's REPI partnership, actions that allow
    significant maneuver areas to remain available and unconstrained for
    active and intense military use at JBLM. At Fort Huachuca, NAS Patuxent
    River and the Atlantic Test Ranges, DOD is working with USFWS, the
    Natural Resources Conservation Service, the U.S. Forest Service, and a
    variety of state and private conservation organizations to protect
    important swaths of special use airspace used for aircraft testing and
    training, while also benefiting ecologically sensitive watersheds and
    the installations, wildlife, and working lands dependent on those
    resources.
                fiscal year 2017 budget request--energy programs
        Unlike the Department's Military Construction and Environmental
    Remediation programs, where the budget request includes specific line
    items, our energy programs are subsumed into other accounts. The
    following sections describe the Energy portion of the budget request.
    Further discussion of energy follows in the highlighted issues section.
    Operational Energy
        In fiscal year 2017, the Department's budget request includes an
    estimated $9.8 billion for 93.3 million barrels of fuel. In order to
    increase warfighting capability and reduce operational risk, the
    Department's fiscal year 2017 budget request also includes $2.5 billion
    for adaptations and improvements in our use of operational energy.
    Operational energy is the energy used to power aircraft, ships, combat
    vehicles, and mobile power generation at contingency bases. While there
    is no explicit budget request for Operational Energy, these investments
    across multiple accounts and appropriations are intended specifically
    to improve military capability.
        Within this overall request, the Department is requesting $37.3
    million in RDT&E funding to support the Operational Energy Capabilities
    Improvement Fund (OECIF). OECIF provides funding to DOD research
    programs that improve operational energy performance organized around a
    specific annual theme or focus area, as well as sustain funding to
    those programs already underway. The fiscal year 2017 President's
    Budget will provide funding for new programs, as well as support those
    programs established in fiscal year 2014-fiscal year 2016.
        Finally, the Department is requesting $5.4 million in fiscal year
    2017 to fund the operations of OASD(EI&E) and oversee operational
    energy activities. Each year, EI&E certifies that the President's
    Budget is adequate for carrying out the Department's Operational Energy
    Strategy. The full certification report, which will be provided to
    Congress in the near future, will provide a more comprehensive
    assessment of the alignment of operational energy initiatives with the
    goals of the recently released 2016 Operational Energy Strategy.
      2016 Operational Energy Strategy
        Reflecting lessons learned, strategic guidance, and the evolving
    operational environment, the 2016 Operational Energy Strategy is
    designed to improve our ability to deliver the operational energy
    needed to deploy and sustain forces in an operational environment
    characterized by peer competitors, asymmetric insurgents, and
    unforgiving geography. The strategy identifies the following three
    objectives:

          Increase Future Warfighting Capability. Foremost, the
    strategy focuses on increasing warfighter capability through energy-
    informed force development. In addition to energy Key Performance
    Perimeters (eKPP) informed by energy supportability analyses that
    improve the combat effectiveness and supportability of major
    acquisition programs, the Department will continue to invest in energy
    innovation that improves the long-term capability of the Department,
    such as increasing the unrefueled range or endurance of platforms. With
    this knowledge of inherent energy constraints and risks, the Military
    Departments will be better able to make energy-informed decisions
    related to force development and future capabilities.
          Identify and Reduce Logistics and Operational Risks. To
    effectively reduce logistics risks, the Department will address energy
    risks in near-term operation plans as well as more exploratory, longer-
    term concepts of operation. Initiatives that fall into this category
    seek to mitigate warfighting gaps found in Integrated Priority Lists,
    OPLANs, and wargames. The Department's focus on risk will ensure future
    forces are better aligned to mitigate potential threats to operations.
          Enhance Mission Effectiveness of the Current Force.
    Finally, the strategy will improve the effectiveness of U.S. forces
    operating around the globe today. To do so, the Department will
    emphasize improved energy use in operations and training, and enhanced
    education of operators, logisticians, and system developers. These
    initiatives may include material and non-material enhancements to day
    to day operations, as well as adaptations in training, exercises, and
    professional military education.

        In coordination with the Combatant Commands, Military Departments,
    Joint Staff, and Defense Agencies, my office is overseeing the
    execution of fifteen targets arrayed across the three objectives. For
    instance, we are supporting Joint Staff oversight of the energy KPP,
    facilitating operational energy advisors at the Combatant Commands, and
    assessing the role of operational energy in war games and operation
    plan reviews. In addition to the Defense Operational Energy Board, we
    will use existing requirements, acquisition, programming, and budgeting
    processes to review Department progress against these targets.
    Installation Energy
        As with Operational Energy, there is no explicit request in the
    overall budget for Facilities Energy--utilities expenditures are
    included in the Base Operations O&M request. Facilities Energy remains
    our single largest base operating cost and in fiscal year 2015, we
    spent $3.9 billion to heat, cool, and provide electricity to our
    buildings. To reduce this cost the Department is pursuing energy
    efficiencies through building improvements, new construction, and
    third-party investments.
        The Department's fiscal year 2017 budget request includes
    approximately $618 million for investments in conservation and energy
    efficiency, most of which will be directed to existing buildings. The
    majority ($468 million) is in the Military Components' operations and
    maintenance accounts, to be used for sustainment and recapitalization
    projects. Such projects typically involve retrofits to incorporate
    improved lighting, high-efficiency HVAC systems, double-pane windows,
    energy management control systems, and new roofs. The remainder ($150
    million) is for the Energy Conservation Investment Program (ECIP), a
    Military Construction account used to implement energy efficiency,
    water conservation, and renewable energy projects. Each individual ECIP
    project has a positive payback (i.e. Savings to Investment Ratio (SIR)
    > 1.0) and the overall program has a combined SIR greater than 2.0.
    This means for every dollar we invest in ECIP, we generate more than
    two dollars in savings.
        The Military Component investments include activities that would be
    considered regular maintenance and budgeted within the O&M accounts for
    Facilities Sustainment, Restoration, and Maintenance activities. The
    risk that has been accepted in those accounts will not only result in
    fewer energy projects, but failing to perform proper maintenance on our
    buildings will without question have a negative impact on our energy
    usage. In plain terms, upgrades to air conditioning systems will not
    reduce energy usage as projected if the roof is leaking or the windows
    are broken.
        In addition to retrofitting existing buildings, we continue to
    drive efficiency in our new construction. Our new buildings must be
    constructed using the high-performance sustainable buildings standards
    issued by my office 2 years ago which include greater energy efficiency
    requirements.
        Additionally, the Department is taking advantage of third-party
    financing through Energy Savings Performance Contracts (ESPCs) and
    Utility Energy Service Contracts (UESCs), to implement energy
    efficiency improvements in our existing buildings. Under these
    contracts private energy firms or utility companies make energy
    upgrades to our buildings and are paid back over time using utility
    bill savings.
      Facilities Energy Management
        With respect to facilities energy management the Department has
    made great progress towards improving the energy efficiency of its
    installations. Since fiscal year 2009, the Department reduced the
    energy consumed on our military bases by 10 percent, avoiding over $1.2
    billion in operating costs.
        In addition to using appropriated funding for energy conservation
    and efficiency initiatives, the Department is continuing to take
    advantage of third-party financing tools through energy performance
    based contracts (ESPCs and UESCs) to implement energy efficiency
    improvements in our existing buildings. While such performance-based
    contracts have long been part of the Department's energy strategy, the
    Services have significantly increased the use of ESPCs and UESCs in
    response to the President's Performance Contracting Challenge (PPCC)
    originally issued in December 2011 and extended in May 2014. The PPCC
    challenged federal agencies to award $4 billion in energy performance
    based contacts by the end December 2016. The DOD's commitment to the
    challenge is just over $2 billion in contracts. To date the Department
    has awarded $1.3 billion in ESPCs and UESCs.
        Regarding renewable energy, the Department has a goal to deploy 3
    gigawatts of renewable energy by fiscal year 2025. Most renewable
    energy projects we pursue are financed by private developers. DOD's
    authorities for renewable energy--particularly the ability to sign
    power purchase agreements of up to 30 years--provide incentives for
    private firms to fund the projects themselves, and can also provide a
    strong business case that they are able to offer DOD lower energy rates
    than are being paid currently. The DOD does not make any capital
    investment in these renewable energy projects. When feasible, renewable
    energy projects are being built with micro-grid-ready applications that
    can enable the provision of continuous power in the event of a
    disruption.
        As of the end of fiscal year 2015 the Department has 702 megawatts
    in renewable energy projects in operation. The Services also have more
    than 550 megawatts of projects under construction including a 15 MW
    Solar PV/ 50 MW wind ``hybrid'' project at Ft Hood, TX and an off-site
    210 MW solar PV facility that will supply power to 14 Department of
    Navy installations in California. Further, there is another 1.3
    gigawatts of renewable energy projects in various stages of
    development; putting the Department well on track towards meeting its 3
    gigawatt goal.
                               highlighted issues
    Merger of the Energy, Installations, and Environment Organizations
        As you know, the fiscal year 2015 National Defense Authorization
    Act directed the merger of the Assistant Secretary of Defense for
    Operational Energy Plans and Programs and the Deputy Under Secretary of
    Defense for Installations and Environment to create the Assistant
    Secretary of Defense for Energy, Installations and Environment. The ASD
    (EI&E) is now the principle advisor to the Secretary of Defense for
    Acquisition, Technology, and Logistics on matters relating to energy,
    installations, and environment and the principal advisor to the
    Secretary of Defense and the Deputy Secretary of Defense regarding
    operational energy plans and programs.
        The Department is currently developing the required report on the
    status of the merger, and will provide that to the Congress later this
    year. I can tell you that through the merger operational energy
    functions have benefited from additional resources and collaboration
    with complementary functions related to installation energy, facilities
    investment and management, and basing.
    Base Realignment and Closure
        Given the need to find efficiencies and reexamine how our
    infrastructure is configured, the Administration is requesting the
    authority from Congress to conduct a 2019 BRAC round. As indicated in
    testimony last year, the Department has excess capacity. The Army and
    Air Force have analyzed their infrastructure and have found that they
    have 18 percent and 30 percent excess capacity, respectively. We are
    currently conducting a DOD wide parametric analysis as directed by the
    fiscal year 2016 National Defense Authorization Act, which will likely
    indicate excess of around 20 percent. This level of excess is not
    surprising given the fact that in 2004 we found that the Department had
    24 percent excess and BRAC 2005 reduced infrastructure by 3.4 percent
    (as measured by plant replacement value).
        As we have said, a new BRAC round will be different than BRAC 2005.
    The new round will be efficiency focused. It will save about $2 billion
    a year after implementation; with costs and savings during the six year
    implementation being a wash at approximately $7 billion. Our projection
    is based on the efficiency rounds of the 1990s.
        In addition to being a proven process that yields savings, BRAC has
    several advantages that we have outlined before in our testimony. I
    want to highlight a few of these:

          BRAC is comprehensive and thorough--all installations are
    analyzed using certified data aligned against the strategic imperatives
    detailed in the 20-year force structure plan;
          The BRAC process is auditable and logical which enables
    the Commission to conduct an independent review informed by its own
    analysis and testimony from affected communities and elected officials;
          The Commission has the last say on the Department's
    recommendations--being fully empowered to alter, reject, or add
    recommendation;
          The BRAC process has an ``All or None'' construct which
    prevents the President and Congress from picking and choosing among the
    Commission's recommendations; thereby insulating BRAC from politics;
          The BRAC process imposes a legal obligation on the
    Department to close and realign installations as recommended by the
    Commission by a date certain that facilitates economic reuse planning
    by impacted communities and grants the Department the authorities
    needed to satisfy that legal obligation.

        In recognition of your concerns about cost and the amount of time
    the BRAC Commission has to review our recommendations, the Department's
    request for BRAC authorization includes four key changes from prior
    year submissions as well as a handful of administrative and timeline
    changes. Each of the changes are narrowly tailored to address
    congressional cost concerns while not altering the fundamental
    principles of the BRAC process: treating all bases equally; all or none
    review by both the President and Congress; review by an independent
    Commission; making military value the priority consideration; and a
    clear legal obligation to implement all of the recommendations in a
    time certain together with all the authorities needed to accomplish
    implementation.
        To ensure the next BRAC round is focused on saving money and
    maximizing efficiency, our legislation adds a requirement for the
    Secretary of Defense to certify that the BRAC round will have the
    primary objective of eliminating excess infrastructure to maximize
    efficiency and reduce cost. Like the existing requirement to certify
    the need for a BRAC round, this certification occurs at the outset of
    the BRAC process and is a precondition to moving forward with
    development of recommendations. Additionally, subject to the
    requirement to give priority consideration to the military value
    selection criteria, the legislation now requires the Secretary to
    emphasize those recommendations that yield net savings within 5 years
    of completing the recommendation and limits the Secretary's ability to
    make recommendations that do not yield savings within 20 years. In
    order to make a recommendation that does not yield savings within 20
    years, the Secretary must expressly determine that the military value
    of such recommendation supports or enhances a critical national
    security interest of the United States.
        Finally, the legislation also now specifically delineates those
    costs that must be considered when determining the costs associated
    with a recommendation. As revised, the legislation specifies that the
    Department must consider costs associated with military construction,
    information technology, termination of public-private contracts,
    guarantees, the costs of any other activity of the Department of
    Defense or any other Federal agency that may be required to assume
    responsibility for activities at the military installations, and such
    other factors as the Secretary determines as contributing to the cost
    of a closure or realignment. Previous versions of the legislation had
    only specifically mentioned the costs of any other activity of the
    Department of Defense or any other Federal agency that may be required
    to assume responsibility for activities at the military installations
        Our proposal extends the Commission review period to run from April
    15 to October 1 which adds two months to Commission review and requires
    that Commissioners be named by February 1st which enables the
    Commission to be up and running for ten weeks before our
    recommendations come to them. Our revision also requires the Chair of
    the Commission to certify that the Commission and its staff have the
    capacity to review the Department's recommendations.
        Heretofore, we've addressed every concern raised by Congress. We
    conducted the European Infrastructure Consolidation to address concerns
    that we need to look at overseas installations first; we programmed the
    costs and pledged the next round will reduce excess instead of the 2005
    round's more costly ``transformation'' focus in response to concerns
    that we could not afford BRAC; and we have demonstrated that excess
    capacity exists--Army and Air Force testified to 21 and 30 percent.
    We've updated our DOD-wide (parametric) analysis and will provide it to
    Congress soon; it indicates over 20 percent excess.
        We hope the Department's efforts will result in a real dialog with
    members of Congress regarding the need for and value of the BRAC
    process, ultimately resulting in authority for a 2019 BRAC round.
    European Infrastructure Consolidation
        In response to our recent requests for BRAC authority, Congress
    made it clear that it wanted DOD to look at reducing our overseas
    infrastructure first--particularly in Europe. We did so by conducting
    the European Infrastructure Consolidation (EIC) analysis--the first
    holistic and joint review of our legacy infrastructure in Europe.
        To analyze our European infrastructure we used a process very
    similar to the proven U.S. BRAC process. We looked at capacity,
    requirements (including surge), military value, cost, and the
    diplomatic dynamics involved with each action. As we consolidate our
    footprint, the infrastructure remaining in place will continue to
    support our operational requirements and strategic commitments, but we
    will not need as many support personnel (military, civilian, and host
    nation employees) to do so.
        The 26 approved EIC actions will allow us to create long-term
    savings by eliminating excess infrastructure without reducing our
    operational capabilities. In other words, operationally we will
    continue to do everything we currently do but at a lower cost. After a
    one-time investment of approximately $800 million in Military
    Construction to implement two major base closures, eight minor site
    closures, and 16 realignment actions, the Department will realize
    approximately $500 million in annual recurring savings.
        These actions will be executed over the next several years, but
    that does not mean that everything will remain static in Europe while
    these changes occur. There were consolidations made before EIC and
    there will undoubtedly be future basing actions--especially given the
    evolving security environment. However, our holistic review and the
    resultant actions allow us to redirect resources supporting unneeded
    infrastructure and apply them to higher priorities, thus strengthening
    our posture in Europe.
        Although we continually seek efficiencies as we manage
    installations worldwide, the Department does not conduct this degree of
    comprehensive analyses of its infrastructure on a regular basis. That's
    one of the reasons we have requested BRAC authority from Congress to do
    a review of our U.S. installations. In this fiscal environment it would
    be irresponsible of us not to look for such savings.
                         rebalance to the asia-pacific
    Rebasing of Marines from Okinawa to Guam
        The movement of thousands of marines from Okinawa (and elsewhere)
    to Guam is one of the most significant re-basing action in recent
    years. We appreciate Congress' support allowing us to move forward on
    this essential component of our rebalance to the Asia-Pacific region,
    resulting in a more geographically dispersed, operationally resilient,
    and politically sustainable posture in the area. As a U.S. territory,
    Guam offers strategic advantages and operational capabilities that are
    unique in the region. Presence in Guam is a force multiplier that
    contributes to a force posture that reassures allies and partners and
    deters aggression.
        Now that the very complex National Environmental Policy Act (NEPA)
    process (nearly five years of study) is complete, there is a clear path
    for construction to proceed in earnest. Utilities and site improvements
    (8$300 million funded by the GoJ) for the main cantonment area at
    Finegayan, and a live-fire training range ($125 million) at Andersen's
    Northwest Field will be the first projects under the new Record of
    Decision (ROD). Construction for the Marine Aviation Combat Element
    (ACE) at the North Ramp of Andersen proceeded earlier because it was
    covered under the original 2010 ROD; it remains on track.
        We understand Congress' concerns regarding both the cost and
    feasibility of the relocation and we are firmly committed to the
    principles of operational effectiveness and fiscal responsibility. We
    remain confident in the estimate of $8.7 billion for the program, which
    includes $3.1 billion provided by the Government of Japan (GoJ) ($1.152
    billion transferred to date). The Department is evaluating this program
    in advance of each year's budget submission to pursue efficiencies that
    have the potential to reduce overall cost. For example, the
    Department's decision to relocate housing to Andersen Air Force Base
    reduced the requirement for a water works project (at the main
    cantonment area) saving the Department approximately $50 million.
    Additionally, we continue to provide the necessary oversight,
    conducting quarterly Deputy Secretary led Guam Oversight Council
    meetings to address issues related to the program's implementation.
        The Marines, in conjunction with the Naval Facilities Engineering
    Command (NAVFAC), have an established program management organization
    for construction execution and oversight. NAVFAC is standing up an
    Officer in Charge of Construction office and anticipates it will be in
    place by the first quarter of 2017. The marines continue with planning
    to meet operational requirements on the ground. This is the largest
    infrastructure program (8$9 billion) that has been executed in many
    years, so it is prudent to have the necessary management structure in
    place to ensure success.
        The Economic Adjustment Committee Implementation Plan (EIP)
    (submitted to Congress in October 2015) was the last Congressional
    requirement restricting project execution on Guam. The Plan outlines
    the five ``outside the fence'' projects (listed in the table below)
    associated with the impacts of the build-up on Guam's civilian
    infrastructure. Last year's fiscal year 2016 NDAA provides
    authorization for moving forward with the water/wastewater projects--
    but not for the cultural repository and the public health lab projects.
    Our fiscal year 2017 President's Budget requests authority for these
    two projects and the balance of funding ($87 million).

             Table 7--EAC Projects Supporting DON Record of Decision
    ------------------------------------------------------------------------
                                                     Previous
                                        Project        FY(s)       FY 2017
              Project title              total     Appropriated    request
                                      ($millions)   ($millions)  ($millions)
    ------------------------------------------------------------------------
    Upgrade Wastewater Treatment              139            71           68
     Plan...........................
    Refurbishment sewer line                   31            31            0
     Andersen AF....................
    Repair/expansion Aquifer                    4             4            0
     monitoring system..............
    Public Health Laboratory........           32            13           19
    Cultural Repository.............           12            12            0
        TOTAL.......................          218           131           87
    ------------------------------------------------------------------------

        The cumulative impact of this stationing was carefully evaluated
    within the environmental analysis process and we determined that water/
    wastewater, public health, and our obligation to care for artifacts
    uncovered in our construction need to be addressed. The associated
    projects total $218 million, which is a relatively small, but
    absolutely necessary, portion of this relocation.
        Failure to provide authorization for these projects increases the
    risk of litigation and project delay and will affect DOD's credibility
    with the Guam's populace. Our inability to meet commitments to the
    Government of Guam will also adversely affect our credibility with the
    Government and people of the Commonwealth of Northern Mariana Islands
    (CNMI) since they have similar concerns, as discussed below.
    Commonwealth of Northern Mariana Islands (CNMI) Initiatives
        The Department continues to pursue two key military initiatives in
    CNMI--the CNMI Joint Military Training (CJMT) Complex (a U.S. Pacific
    Command (PACOM) initiative (led by USMC) to reduce joint training
    deficiencies in the Western Pacific); and an Air Force Divert and
    Exercise Field on Tinian.
        PACOM requires a Joint Military Training Complex in-theater to meet
    Department of Defense training requirements in the theater. The Complex
    will make a key contribution to the readiness of marines relocating to
    Guam and provide bilateral and multilateral training opportunities with
    foreign allies and partners. The Department sought to design the CJMT
    complex on Tinian and Pagan in a manner that minimizes the impacts on
    the local communities and provides direct economic and other benefits
    while meeting PACOM and its Service Components' training requirements.
        The training complex includes a series of live-fire Range Training
    Areas, training courses, maneuver areas, and associated support
    facilities located in close proximity to each other. The total cost of
    the complex is 8$900 million with GoJ contributing $300 million. In
    April 2015, the Department of Navy (DON) released the draft
    Environmental Impact Statement (DEIS) for the proposed action with an
    original public comment period of 60 days (extended to 180 days to
    accommodate requests by the CNMI Governor to give him more time in
    light of internet problems and damage from Typhoon Soudelor). In
    response to the over 28,000 comments received in October 2015 the DON
    announced its intent to prepare a Revised DEIS to more fully address
    potential impacts to water, coral, and other natural resources. The DON
    now estimates the ROD will be issued in the summer of 2018. This
    timeline still supports force flow to Guam in 2022.
        The Air Force needs to establish a divert capability for up to 12
    tankers if access to Andersen Air Force Base is unavailable. The Air
    Force proposes to construct facilities and infrastructure to support a
    combination of cargo, tanker, and similar aircraft and associated
    personnel not only for divert operations, but also to support periodic
    exercises and disaster relief activities. Efforts to establish this
    capability are on track for a Record of Decision in mid-April 2016. The
    Air Force is now pursuing a Tinian-only solution consistent with CNMI's
    desires.
    Building and Maintaining Resilience in the Face of a Changing Climate
        Resilience to climate change continues to be a priority for the
    Department. Both the 2010 and 2014 Quadrennial Defense Reviews (QDRs)
    discussed the impacts associated with a changing climate that present a
    threat to DOD's national security mission. We recognize these impacts
    and their potential threats represent one more risk that we must
    consider as we make decisions about our installations, infrastructure,
    weapons systems and, most of all, our people. We have always dealt with
    the risks associated with extreme weather events and its impacts on our
    operations and missions. Our challenge today is how to plan for changes
    in the environment we will be operating from and in.
        Even without knowing precisely how or when the climate will change,
    we know we must build resilience into our policies, programs, and
    operations in a thoughtful and cost effective way. In January 2016, we
    issued a DOD Directive on climate change adaptation and resilience that
    identifies roles and responsibilities across the Department for
    implementing these strategies over the next ten years.
        Specifically, I am focusing on our installations and
    infrastructure. Sea level is rising and many coastal areas are
    subsiding or sinking. This impacts the operation and maintenance of our
    existing installations and infrastructure. As Arctic Sea ice melts and
    breaks apart, our early warning radar sites are being eroded away at a
    much greater rate than before. Drought and flooding, which ironically
    go together, threaten water resources for us and our surrounding
    communities and exacerbate wildfire issues across the country.
        The Military Services have conducted a screening level assessment
    of all DOD sites world-wide to identify where we are potentially
    vulnerable to extreme weather events and tidal anomalies today. The
    information gleaned from this initial look will help to focus reviews
    of installation footprints, and shape planning for current and future
    infrastructure.
        Given the projected increases in major storms, DOD continues its
    progress to ensure energy resilience for its military installations. We
    completed our power resilience review, and are now updating Department-
    level instructions to include energy resilience requirements. These
    requirements will ensure that the Department has the ability to prepare
    for and recover from energy disruptions that impact mission assurance
    on its military installations.
        Our goal is to increase the Department's resilience to the impacts
    of climate change. To achieve this goal, we are integrating
    consideration and reduction of climate risks into our already
    established mission planning and execution.
    Financial Improvement & Audit Readiness
        In order to effectively manage its financial resources, the
    Department remains focused on improving financial record keeping and
    conducting an independent audit of DOD's financial books beginning in
    fiscal year 2017. This includes not only an audit of the Department's
    Statement of Budgetary Resources, but also validating the existence and
    completeness, rights and obligations, and financial valuation of
    slightly less than 562,000 facilities located at 513 installations
    world-wide. The results of a more accurate and reliable real property
    inventory will better inform our decisions and actions in addressing
    our real property management challenges.
        The Department has made significant progress towards the
    environmental liabilities associated with our cleanup program and
    disposal of equipment aspects of the financial audit. Last fall we
    issued clarifying policies through which we are refining the cost
    estimates associated with those liabilities; thereby giving the
    Department a better understanding of our future environmental costs and
    the ability to plan for any required remediation.
    Mission Compatibility Evaluation Process
        The Department appreciates the legislative changes made in fiscal
    year 2016 to section 358 of the Ike Skelton National Defense
    Authorization Act of Fiscal Year 2011. These changes significantly
    streamlined the Mission Compatibility Evaluation Process, and ensured
    that DOD's mission capabilities are protected from incompatible energy
    developments. As a result of congressional direction and our own
    efforts we are effectively evaluating the mission impact of utility-
    scale energy projects, while being mindful of the need for a clean
    energy future. In 2015 the Department reviewed over 3,400 applications
    for energy projects that were forwarded by the Federal Aviation
    Administration. The DOD Siting Clearinghouse worked aggressively with
    the Military Departments, energy project developers, and relevant
    states to implement affordable and feasible mitigation solutions where
    DOD missions might have been adversely impacted. No project reviewed in
    2015 rose to the level of an unacceptable risk to the national security
    of the United States, which is the threshold established in section 358
    of the fiscal year 2011 NDAA to object to a project. The Department is
    prepared for an increased number of renewable energy project
    developments as newly approved tax credits become available to
    developers.
                                   conclusion
        Thank you for the opportunity to present the President's Fiscal
    Year 2017 Budget request for DOD programs supporting installations,
    energy, and the environment. Our budget situation requires that we take
    risk in our facilities. No one is happy about that, but we are
    effectively managing within this budget constrained environment and we
    appreciate Congress' continued support for our enterprise and look
    forward to working with you as you consider the fiscal year 2017 budget
    request.

        Senator Ayotte. I would like to call on Secretary Hammack.

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

        Ms. Hammack. Thank you, Chairwoman Ayotte and Senator Kaine
    and other distinguished members of this subcommittee. I
    appreciate the opportunity to talk to you about the fiscal year
    2017 budget request for military construction, environmental,
    energy, and base closure.
        For fiscal year 2017, the Army's budget for MILCON is just
    over $1 billion, a reduction of 18 percent from last year's
    appropriations and an over 60 percent cut from fiscal year
    2013. This is the lowest level of military construction for the
    Army since 1993.
        Of the Army's military construction request, 28 percent
    supports combatant commanders' top priorities and another 20
    percent funds new directed missions. So that leaves only 50
    percent of the military construction budget for
    recapitalization of existing infrastructure.
        Of that 50 percent, 23 percent is going to the National
    Guard, supporting recapitalization of readiness centers.
    Senator Ayotte, as you mentioned, the National Guard readiness
    center report really clarifies and brings to light some of the
    challenges and critical facility shortfalls that the National
    Guard is seeing. The fiscal year 2017 request of $233 million
    represents a step toward addressing those shortfalls but does
    not come close to meeting the backlog of requirements the
    National Guard has.
        At the request of Congress, the National Commission on the
    Future of the Army report was completed, and its findings were
    issued to Congress in January of this year. The commission
    specifically recommended--and I quote--that Congress and the
    administration should look for cost savings opportunities in
    areas such as energy savings and a reduced inventory of
    military facilities. With the planned reduction in our forces
    from where we are now to 450,000 by fiscal year 2018, the Army
    will have excess facility capacity of approximately 21 percent.
    If budget caps remain in place, the Army will need to further
    reduce the number of soldiers and our excess capacity will
    continue to increase.
        As Mr. Potochney mentioned, the Army's budget request does
    represent our decision to continue to take risk in installation
    readiness so that we can focus our financial resources on
    soldier readiness. The risk we are taking in sustainment
    funding results in an accumulation of deferred maintenance
    right now estimated at approximately $7 billion. The Army needs
    the authorization to optimize installation capacity and free up
    funds to use for critical military needs. The Acting Secretary
    of the Army and the Chief of Staff of the Army have testified
    that they are fully in support of another round of base
    realignment and closures authorized in fiscal year 2017.
        As Pete mentioned, BRAC is a proven, cost-effective means
    to reduce excess infrastructure. Without a BRAC, the Army
    continues to spend scarce resources to maintain unneeded or
    underutilized facilities and infrastructure, thus hurting our
    highest military value bases. This is an unacceptable result
    for the Army and a disservice to the American taxpayer. I look
    forward to working with you to figure out how we can shape a
    means to dispose of excess infrastructure in a fair and
    equitable manner.
        The Army manages over 12 million acres of land, on which
    more than 200 endangered species live. Our environmental budget
    of approximately $1 billion addresses those areas, as well as
    our historic areas, our cleanup requirements, and maintaining
    access to training and testing lands.
        The request also supports implementation of energy cost
    savings and ensuring energy security across our installations.
    We are leading the Federal Government and leveraging private
    sector capital for energy savings performance contracts. Since
    2003, we have reduced our energy consumption by approximately
    22 percent. Working with the private sector increasing
    renewable energy projects, we estimate we are going to generate
    about $250 million in savings across the life of those
    projects.
        But the Army's top priority continues to be readiness, and
    so to meet our mission requirements, your Army does require
    ready and resilient installations.
        I look forward to continuing to work with you to ensure
    that they have the critical resources our soldiers need to
    defend the homeland. So thank you for the opportunity to appear
    before you today, and I look forward to your questions.
        [The prepared statement of Ms. Hammack follows:]

            Prepared Statement by the Honorable Katherine G. Hammack
                                  introduction
        Chairman Ayotte, Ranking Member Kaine, and Members of the
    Subcommittee: on behalf of the soldiers, families, and civilians of the
    United States Army, thank you for the opportunity to present the Army's
    fiscal year (FY) 2017 budget request for Installations, Energy,
    Environment, and Base Realignment and Closure.
        The U.S. Army's top priority continues to be readiness: the Army
    must be ready to shape the global security environment, defend our
    homeland, and win the nation's wars. To meet these missions, the Army
    requires ready and resilient installations--our power projection
    platforms--to enable regional engagement and global responsiveness. Our
    fiscal year 2017 budget request reflects the Army's decision to take
    risk in our installation facilities and services to maximize available
    funding for operational readiness and modernization. The request
    focuses our limited resources on necessary and prudent investments in
    military construction, installation energy programs supporting
    operational activities, and environmental compliance.
        The Army recognizes that reduced funding of installations accounts
    will lead to the continued degradation of our facilities and
    infrastructure, and risks our long-term ability to adequately support
    Army forces and meet mission requirements. The Army is stretched thin
    at a time when we are facing a global security environment that is more
    uncertain than ever. Without increased funding in the outyears or the
    authority to close and realign our installations, these problems will
    only get worse--expending precious funds and putting the readiness and
    welfare of our soldiers at risk. It is therefore particularly critical
    that we maximize the efficient use of our resources at this time to
    meet mission requirements and ensure soldier readiness.
        The Army's fiscal year 2017 military construction appropriations
    request strikes a careful balance to meet these growing and changing
    demands. We look forward to working with Congress to ensure that our
    national security needs and priorities are met in the upcoming fiscal
    year and well into the future.
                    making efficient use of army facilities
        To meet readiness requirements, the Army must maintain
    installations that make efficient and effective use of available
    facilities. Army installations should be sized and resourced to meet
    the needs of our current and future missions, both at home and
    overseas.
        Efficient use of our installations includes the closure of low
    military value installations and the divestment of excess facilities
    that burden Army budgets. Reducing the portfolio of Army facilities was
    among the recommendations of the National Commission on the Future of
    the Army (NCFA), established by Congress as part of the fiscal year
    2015 National Defense Authorization Act (NDAA). The NCFA's report,
    released in January 2016, states that ``Congress and the Administration
    should look for cost-saving opportunities in areas such as . . . a
    reduced inventory of military facilities.'' \1\ The report recommends
    that the Army pursue these and other efficiency initiatives to free up
    funds that could be used to meet warfighting needs and other high-
    priority initiatives identified by the Commission.
    ---------------------------------------------------------------------------
        \1\ National Commission on the Future of the Army, ``Report to the
    President and Congress of the United States,'' 28 January 2016, p. 44:
    Recommendation 5.
    ---------------------------------------------------------------------------
        The Army has made every effort to be fiscally prudent in the
    maintenance of excess infrastructure. The Army has employed its current
    authority to minimize costs and maximize the use of existing
    facilities. We have identified and are working to reduce excess
    capacity overseas through the European Infrastructure Consolidation
    (EIC) initiative, in addition to implementing efficiency measures
    across the board. Nevertheless, the modest savings attained from these
    efforts cannot substitute for the significant savings that can be
    achieved through base realignments and closures. Without them, the Army
    is forced to make deep cuts at our highest military value installations
    because we continue spending scarce resources maintaining and operating
    lower military value installations.
        As the Army is planning to reduce its Active Component end strength
    to 450,000 by fiscal year 2018, we will have over 170 million square
    feet of facilities that are not fully utilized--an excess facility
    capacity averaging 21 percent. Depending on the facility type, the
    excess infrastructure ranges from 18 percent to 33 percent. At an
    annual cost of about $3 per square foot to maintain these facilities,
    the Army is incurring over $500 million a year in unnecessary
    expenditures. If fiscal year 2018-2021 budget caps remain, the Army
    will need to further reduce the number of soldiers, and our excess
    capacity will continue to increase.
        The Army cannot afford this status quo. Although Base Realignment
    and Closure (BRAC) forces difficult choices affecting the local
    communities surrounding our installations, they are already seeing
    fewer soldiers and families as force structure continues to decline.
    BRAC allows the Army to use a fair and non-partisan process to close a
    few lower military value locations and realign the remaining missions
    to help fill the excess capacity at our higher military value
    installations.
        Today, facilities needed to support readiness, training exercises,
    airfields, and other priorities are deteriorating, while resources are
    diverted to supporting installations that could be closed. The Army
    cannot carry excess infrastructure costing over half a billion dollars
    per year indefinitely. Half a billion dollars represents the annual
    personnel costs of about 5,000 soldiers, which is slightly less than
    the number assigned to a Stryker Brigade Combat Team. It represents
    five annual rotations at the Army's Combat Training Centers, which are
    the foundation of Army combat readiness.
        Until we get the BRAC authority to analyze what types of excess
    exist at individual installations and develop recommendations on how to
    best consolidate into the highest military value installations we have,
    we do not know which lower military value installations should be
    closed and/or realigned. However, we do know BRAC is a proven process
    producing significant reoccurring savings of roughly $2 billion per
    year for the Army, as validated by the Government Accountability Office
    (GAO). A future BRAC round has the capability to save the Army hundreds
    of millions of dollars per year. Once the up-front costs are paid, the
    intermediate and long-term savings from BRAC can fund any number of
    important Army warfighter initiatives, including force structure,
    additional CTC rotations, and modernization.
        Not authorizing BRAC is a choice with real consequences. The lack
    of authorization for a BRAC results in our highest military value
    installations bearing the deepest impacts. This is an unacceptable
    result for the Army and a disservice to American taxpayers.
        The BRAC process is a proven, cost-effective means for reducing
    costly excess infrastructure, while ensuring a continued focus on
    efficiency and consolidation. The Army strongly supports DOD's request
    for a BRAC round, and urges Congress to enact legislation in fiscal
    year 2017 authorizing the Department to begin the process.
                         preserving ready installations
        Army installations--where soldiers live, work, and train--are where
    Army readiness is built to meet future challenges and ensure the
    security of our nation. Increasing global threats generate installation
    requirements for force protection, cyber security, and energy security.
    Installation budgets provide the premier All-Volunteer Army with
    facilities that support readiness and quality of life for our soldiers,
    families, and civilians.
        The Army continues to focus its limited resources on supporting
    readiness initiatives and replacing failed facilities. As we remain
    under pressure from current law budget caps, our installation services
    must continually be adjusted. Increases in deferred maintenance and
    reduced investments in installations and infrastructure ultimately
    increase our growing backlog of failing facilities. This degrades the
    Army's ability to be ready to project full spectrum forces over time.
    Excess facility capacity burdens the Army sustainment and base
    operations--consuming limited dollars that need to be better invested
    elsewhere.
        Sustainment, Restoration, and Modernization (SRM) accounts fund
    investments to maintain and improve the condition of our facilities.
    Periodic restoration and modernization of facility components are
    necessary to ensure the safety of our soldiers and civilians. Efforts
    are focused on preventing the degradation of our facilities and
    optimizing the use of Army investments, to prevent small maintenance
    issues from turning into large and expensive problems.
        The fiscal year 2017 $3.1 billion budget request will help support
    our sustainment and restoration requirements. However, the Army is
    assuming risk in installation readiness to preserve operational
    readiness. The $2.7 billion request for Sustainment meets 71% of our
    Facility Sustainment Model for long-term sustainment, whereas DOD
    recommended meeting an 80 percent threshold to stem the tide of further
    facility degradation.
        Reduced funding in the outyears for installation readiness
    adversely impacts facility condition and ultimately increases future
    military construction and restoration and modernization requirements.
    This shifts the Army's investment focus to the worst facilities,
    diverting resources needed to preserve our newest and best
    infrastructure. Deferred sustainment over the long term can lead to
    higher life-cycle repair costs and component failure, significantly
    reducing facility life expectancy.
        Responsibly managing over 12 million acres of real property also
    means that the Army must maintain extensive base operations. Through
    funding for Base Operations Support (BOS) accounts, Army installations
    provide services similar to those associated with a municipality:
    public works, security protection, logistics, environment, and Family
    programs. These programs and services enable soldiers, civilians, and
    families to live and work on 154 Army installations worldwide.
        Balancing BOS needs in a changing global environment calls for
    continued due diligence. The President's fiscal year 2017 budget
    therefore requests a total of $9.43 billion for BOS accounts, including
    $7.82 billion for the Active Component; $1.04 billion for Army National
    Guard; and $573.8 million for Army Reserve.
                     investing in essential infrastructure
        The Army's request for Military Construction provides secure and
    sustainable facilities and infrastructure critical to supporting the
    combatant commander's top priorities, enabling Army missions, and
    maintaining soldier and unit readiness. For fiscal year 2017, the Army
    requests just over $1 billion for Military Construction, a reduction of
    $229 million--18 percent--from fiscal year 2016 appropriations. The
    budget allocates $503 million (approximately 50 percent) for the Active
    Component; $233 million (23 percent) for the Army National Guard; $68
    million (7 percent) for Army Reserves; and $201 million (20 percent)
    for Army Family Housing Construction.
        The Army continuously reviews project scope and costs. We must
    continue to adapt to evolving missions, account for emerging
    organizational changes, and meet unit readiness needs, while
    simultaneously seeking efficiencies at every opportunity. However,
    funding for Army Military Construction has reached historically low
    levels. This reduces the Army's ability to recapitalize inadequate and
    failed facilities into infrastructure that supports operations,
    readiness, and the welfare of the All-Volunteer Force.
        The Army National Guard (ARNG) is the oldest component of the U.S.
    Armed Forces. The Guard has courageously participated in every war and
    every conflict this nation has ever fought, including Iraq and
    Afghanistan, and is our first line of defense in responding to domestic
    emergencies. These men and women perform an important mission for our
    country, and our military construction budget endeavors to ensure that
    the needs of their facilities are met.
        The Guard's fiscal year 2017 Military Construction request is
    $232.9 million. This includes $161.3 million to support seven Readiness
    Centers, $50.9 million to construct three maintenance facilities, $12
    million to fund minor projects, and $8.7 million for planning and
    design. Our ARNG budget request is focused on recapitalizing readiness
    centers--the heart and soul of the National Guard--as well as
    maintenance facilities, training areas, ranges, and barracks to allow
    the Guard to be ready to perform state and federal missions. These
    projects will address space constraints and focus on replacing failing
    facilities.
        In the 2014 ARNG Readiness Center (RC) Transformation Master Plan,
    a key finding was that the RC portfolio is experiencing ``critical
    facility shortfalls.'' This budget request is a small step toward
    addressing the ARNG's challenges.
        The fiscal year 2017 budget request for the Army Reserve totals
    $68.2 million, with four critical projects totaling $57.9 million.
    Three of these will focus on replacing some of our most dilapidated and
    failing facilities on Army Reserve installations that are in the most
    dire need. This includes $21.5 million to replace an Emergency Services
    Center at Fort Hunter Liggett, CA--currently in failing condition--
    which will provide life-saving police, fire, crash and rescue, and
    Emergency Medical Team (EMT) services. An additional $10.3 million will
    support planning and design of future year projects, as well as to
    address unforeseen critical needs through the Unspecified Minor
    Military Construction account.
        The Army Family Housing budget allows us to provide homes and
    services to the soldiers and their families living on our installations
    around the world. For fiscal year 2017, the Army requests $200.7
    million for family housing construction. This will fund two projects in
    Korea, at Camp Humphreys and Camp Walker, critical to supporting
    consolidation and quality of life for our soldiers and their families.
    The projects are necessary to eliminate dilapidated family housing
    units and meet the U.S. Forces Korea (USFK) Commander's requirements
    for housing. An additional $326 million is requested to help sustain
    all family housing operations, cover utility costs, ensure proper
    maintenance and repair of government family housing units, lease
    properties where advantageous, and provide privatization oversight and
    risk mitigation.
                            ensuring energy security
        It is operationally necessary, fiscally prudent, and mission
    essential that the Army have assured access to the energy required to
    achieve our primary objectives for the United States. The Army has led
    the way toward increasing energy efficiency on our installations,
    harnessing new energy technologies to lessen soldier battery loads, and
    improving our operational capabilities to reduce the need for fuel
    convoys. Our installation energy budget request is focused on enhancing
    mission effectiveness, and is supported by strong business case
    analyses. For fiscal year 2017, the Army is requesting $1.716 billion
    to pay utility bills on our installations, leverage private sector
    investment in renewable energy projects, and invest in discrete energy
    efficiency improvements.
        In response to risks posed to our vulnerable energy grid, the Army
    is improving the ``resiliency'' of its installations through the use of
    on-base renewable sources of energy. A resilient Army installation is
    one that can withstand threats to its security--be they power
    interruptions, cyber-attacks, or natural disasters--and endure these
    hazards to continue its own operations and those of the local
    community. With this in mind, the Army conducted a test and temporarily
    disconnected Fort Drum, NY from the energy distribution network this
    past November, validating the installation's ability to operate
    independently from the wider grid.
        The Army leads the Federal Government in the use of Energy Savings
    Performance Contracts (ESPCs) and Utility Energy Service Contracts
    (UESCs), which allow private companies and servicers to provide the
    initial capital investment needed to execute projects using repayments
    from Utilities Services Program savings. The amount of energy saved by
    Army ESPC and UESC projects awarded between fiscal year 2010 and fiscal
    year 2015 is equal to the amount of energy consumed by Fort Bragg--one
    of the Army's largest and most populous installations--in a year. In
    total, the Army has reduced its facilities energy consumption by 22.6
    percent since fiscal year 2003, while also leading the Federal
    Government in reductions of its potable water intensity use and non-
    tactical vehicle (NTV) fossil fuel use.
        In addition, our energy program account funds the Office of Energy
    Initiatives (OEI), which helps to plan and develop third party-financed
    renewable energy projects. OEI currently has 14 projects completed,
    under construction, or in the final stages of the procurement process--
    together providing an incredible 350 megawatts (MW) of generation
    capacity. These projects represent over $800 million in private sector
    investment, saving funds that would otherwise be appropriated for
    military construction. Further, all of these projects provide
    electricity that is at or below the cost of conventional power.
        The Army's operational energy initiatives seek to extend range and
    endurance, increase flexibility, improve resilience, and enhance force
    protection, all while enhancing mobility and freedom of action for our
    soldiers. Operational energy investment in science and technology has
    been a proven force multiplier, providing our soldiers with a distinct
    advantage on the battlefield. Therefore, the bulk of our operational
    energy budget request, $1.28 billion, is for investments in energy
    efficient equipment that will reduce physical and logistical burdens on
    our soldiers and, most importantly, help save lives.
        Improved use of energy enhances mission capabilities. Our
    operational energy program is focused on improving soldier power,
    enhancing maneuver capabilities, advancing research and development of
    new technologies, and more effectively supporting our contingency
    bases. Working with the marines, we have reduced the battery weight
    carried by infantry soldiers by 23 percent. We have deployed tactical
    micro-grids and more efficient generators to our base camps, which
    reduce the volume and frequency of fuel resupply. Since fuel and water
    constitute 80 percent of our resupply convoy capacity by weight, these
    improvements can decrease the number of convoys, reduces the
    vulnerability of our soldiers, and frees up assets for other purposes.
        The Army's energy program has proven results--reducing our reliance
    on the grid, improving energy security and efficiency, and contributing
    to mission readiness--all at a minimal impact to Army budgets. Energy
    performance on our installations is a testament to the Army's success
    in leveraging its limited resources to achieve considerable results. We
    urge Congress to continue to support the Army's energy initiatives both
    in operational and installation environments.
                          safeguarding our environment
        The mission of the Army's environmental program is three-fold: (1)
    to comply with environmental laws and regulations and ensure proper
    stewardship of our natural, cultural, and Tribal resources; (2) to meet
    DOD's goals for installation restoration and munitions response; and
    (3) to invest in environmental technology research, development,
    testing, and evaluation.
        The Army manages over 12 million acres of land, which requires the
    Army to protect endangered species and historic sites or structures.
    Efforts are made to remediate environmental contaminants that pose a
    danger to human health or the environment, while supporting Army
    operations and our soldiers, families, and communities. Our fiscal year
    2017 budget request of $1.05 billion will allow the Army to fulfill
    these objectives, keeping the Army on track to meet our cleanup goals
    and maintain full access to important training and testing lands, which
    are integral components of Army readiness.
                                   conclusion
        Readiness is the U.S. Army's top priority--there is no other
    ``number one.'' The Army's fiscal year 2017 Military Construction
    budget request takes moderate risk to ensure our readiness needs are
    met by focusing our financial resources where they are needed most.
        Maintaining failing facilities and low-military value installations
    takes money away from critical investments in the readiness of our
    soldiers and the acquisition of advanced weapons and technology. BRAC
    allows the Army to optimize installation capacity and achieve
    substantial savings, freeing up scarce resources that could easily be
    applied elsewhere.
        The strength of the U.S. Army is its people, and our installations
    serve as the platforms for this strength. Without ready and resilient
    installations, our soldiers will be ill-equipped to fight the growing
    threats facing our nation. We owe it to our men and women who wear the
    Army uniform to be prudent in the use of our installation budgets and
    prioritize them appropriately to ensure they have the best resources
    available to defend our homeland.
        Thank you for the opportunity to present this testimony and for
    your continued support of our soldiers, families, and civilians.

        Senator Ayotte. Thank you, Secretary Hammack.
        Secretary McGinn?

    STATEMENT OF HONORABLE DENNIS V. McGINN, ASSISTANT SECRETARY OF
           THE NAVY FOR ENERGY, INSTALLATIONS AND ENVIRONMENT

        Mr. McGinn. Madam Chairman, Ranking Member Kaine, members
    of the committee, thank you for the opportunity to discuss our
    Department of the Navy's enterprise for installations.
        This year's request is nearly $1.4 billion less than it was
    for fiscal year 2016 for the same reasons that have been noted.
    The prioritization on readiness and warfighting investments
    have reduced the amount of money available to maintain our
    ashore establishment.
        That said, we have become very, very good at risk
    management. We worry about things breaking, and we have been
    very fortunate in a deliberate way from avoiding that to date.
    But as you know, leaks do not fix themselves and old buildings
    and facilities and utilities do not get better with age. So we
    are in the business of making the case that every dollar that
    is available for sustainment, for base operating supports, for
    military construction has to address in a very deliberate way
    the highest priorities to maintain readiness of all of our Navy
    and Marine Corps installations to support the operating forces,
    as well as to maintain a quality of life for our sailors,
    marines, and their families and our civilian workforce.
        We have, as the other services, invested in energy and, as
    Senator Kaine pointed out, a lot of that is funded by third
    party finance, which creates a win-win-win for the service, for
    the people who are doing the work, and for the people who are
    investing in those projects. We will continue to do that. It is
    not, however, any type of long-term solution for underfunding
    in our basic accounts.
        With that, I will conclude my opening statement, and I look
    forward to your questions.
        [The prepared statement of Mr. McGinn follows:]

              Prepared Statement by the Honorable Dennis V. McGinn
        Chairman Ayotte, Ranking Member Kaine, and members of the
    Subcommittee, I am pleased to appear before you today to provide an
    overview of the Department of the Navy's (DON's) investment in its
    infrastructure, energy, and environment programs.
        Our Navy and Marine Corps installations and facilities are the
    platform to train and prepare our marines and sailors, to deploy ships,
    aircraft and operational forces, as well as to support our military
    families. We are stewards of a large portfolio of installations--valued
    at $229 billion ($173 billion Navy and $56 billion USMC, respectively)
    in plant replacement value--that is vital to our operational forces.
    Against the backdrop of world events and competing requirements and
    resources, we must balance our desired level of funding with the
    principal purposes for our existence: to optimize readiness of the
    operational forces and preserve their quality of life. Readiness-
    enablers include runways, piers, operations & maintenance facilities,
    communications & training facilities, and utilities; those that enable
    quality of life include barracks, mess halls, and recreation and
    fitness centers. We have a responsibility to balance the investments
    for this portfolio according to current year authorizations while being
    mindful of the impacts to life cycle and ever-evolving mission
    requirements.
                        investing in our infrastructure
        We thank Congress for passage of the Bipartisan Budget Act (BBA) of
    2015, the National Defense Authorization Act (NDAA) for fiscal year
    (FY) 2016 and the Consolidated Appropriations Act, 2016. Although the
    BBA of 2013 provided some budget stability for fiscal year 2014-2015,
    and limited relief from the Budget Control Act (BCA) of 2011
    sequestration levels, the unfortunate consequence of constrained DON
    funding levels and timing is that many of our installations' piers,
    runways, and other facilities are degrading. We continue to make
    progress in replacing and demolishing unsatisfactory infrastructure,
    yet still have challenges based on BCA caps and on the prospect of a
    return to sequestration levels in fiscal year 2018.
        In fiscal year 2017, the President's Budget (PB) is requesting
    $11.9 billion in various appropriations, a 10.4 percent decrease
    ($1.4B) from amounts appropriated in fiscal year 2016 to operate,
    maintain and recapitalize our shore infrastructure. Figure 1 compares
    the fiscal year 2016 enacted budget and the Fiscal Year 2017 Presidents
    Budget request by appropriation. Each appropriation is discussed more
    fully in the following sections.

                                 Figure 1.--DON Infrastructure Funding by Appropriation
    ----------------------------------------------------------------------------------------------------------------
                                                                       FY2016
                             Appropriation                            enacted        PB17        Delta     Delta (%)
                                                                    ($millions)  ($millions)  ($millions)
    ----------------------------------------------------------------------------------------------------------------
    Military Construction, Active and Reserve.....................       1,739        1,126        (613)     (35.3%)
    Family Housing, Construction..................................          17           94           77      452.9%
    Family Housing, Operaitons....................................         353          301         (52)     (14.7%)
    BRAC..........................................................         170          154         (16)      (9.4%)
    Sustainment, Restoration and Modernization....................       3,110        2,356        (754)     (24.2%)
    Base Operating Support........................................       7,625        7,610         (15)      (0.2%)
    Environmental Restoration, Navy...............................         300          282         (18)      (6.0%)
        Total.....................................................      13,314       11,923      (1,391)     (10.4%)
    ----------------------------------------------------------------------------------------------------------------

        We strive to maintain a shore infrastructure that is mission-ready,
    resilient, sustainable and aligned with Fleet and operational
    priorities. Toward that end, and especially important given the risks
    inherent at these funding levels, Navy and Marine Corps have taken
    actions to more proactively manage the installations portfolio. For
    example, Navy has taken the initiative to:
          Standardize the facility inspection and Facility
    Condition Index (FCI) process that quantifies facility condition and
    documents the needed maintenance and repair work within our facilities
    portfolio. This information helps guide spending of available dollars.
          Incorporate principles of condition-based maintenance
    across all buildings, utilities and structures, in order to prioritize
    work on only the most critical components (e.g. roofs and exterior
    walls) at our most critical facilities or on components that relate to
    life, health and safety. We are able to focus resources on specific
    building components and systems where failure jeopardizes personnel
    safety or a warfighting mission.
          Led by Commander, Navy Installations Command, exercise a
    single integrated forum to receive and adjudicate demand signals from
    Fleet and Enterprise Commanders to identify and prioritize projects,
    optimizing the available resources.
          Maintain focus on reducing footprint by demolishing or
    divesting unneeded buildings as funds are available, and recapitalizing
    existing facilities in lieu of new construction when possible.
          Supplement available appropriated dollars by the
    increased use of authorities that leverage third party financing for
    improving infrastructure while lowering energy consumption and energy
    costs.
          We support a DOD legislative proposal that would provide
    temporary authority to classify facility conversion projects as repair
    projects. This proposal would afford the Services the flexibility to
    use operations and maintenance funding to repurpose existing
    facilities. The proposal will help installations increase their
    facility utilization, will enable increased efficiency and
    effectiveness, and will support footprint reduction and energy
    efficiency goals. The Navy will collect data to determine the
    effectiveness of this proposal.
    Military Construction (MILCON)
        Navy's MILCON program funds infrastructure at home and abroad,
    supports our warfighters, and meets the objectives in CNO's Design for
    Maintaining Maritime Superiority and the Secretary of Defense's
    Strategic Guidance. Together, Navy and Marine Corps will invest $1.13
    billion worldwide in military construction funds to support warfighting
    and modernization of our utilities and critical infrastructure.
        For Navy, the fiscal year 2017 request is for 25 projects, Planning
    and Design and Unspecified Minor Construction, at a budget of $700
    million, which is 29 percent lower than the fiscal year 2016 as-enacted
    budget of $986 million. Navy has invested an average of $1 billion
    annually in MILCON since 2010, and the fiscal year 2017 request is the
    lowest since 1999. Navy continues to invest prudently in MILCON, but
    assumes long-term risk in deferring recapitalization of our existing
    infrastructure.
        The Navy's fiscal year 2017 MILCON request supports combatant
    commander requirements, enables new platforms/missions, upgrades
    utilities and energy infrastructure, recapitalizes Naval Shipyard
    facilities, and supports weapons of mass destruction (WMD) training
    requirements. They include:

    Combatant Commander Support ($233 million, 9 projects)
        Medical/Dental Facility-Camp Lemonnier Djibouti
        Harden POL Infrastructure-NAVBASE Guam
        Coastal Campus Utilities Infrastructure-NAVBASE Coronado
        Coastal Campus Entry Control Point-NAVBASE Coronado
        Communication Station-NAVSTA Rota
        Grace Hopper Data Center Power Upgrades-NAVBASE Coronado
        Missile Magazine-NAVWPNSTA Seal Beach
        P-8A Hanger Upgrade-NSA Naples (Keflavik, Iceland)
        P-8A Aircraft Rinse Rack-NSA Naples (Keflavik, Iceland)
    New Platform/Mission ($198 million, 6 projects)
        UCLASS RDT&E Hangar-Naval Air Station PAX River
        Triton Mission Control Facility-NAS Whidbey Island
        Triton Forward Operating Base Hangar-VARLOCS
        EA-18G Maintenance Hangar-NAS Whidbey Island
        F-35C Engine Repair Facility-NAS Lemoore
        Air Wing Simulator Facility-NAS Fallon

    Utilities and Energy Infrastructure ($85 million, 4 projects)
        Upgrade Power Plant & Electrical Distribution System-PMRF Barking
    Sands
        Energy Security Microgrid-Naval Base San Diego
        Service Pier Electrical Upgrades-Naval Base Kitsap
        Shore Power (Juliet Pier)-COMFLEACT Sasebo

    Naval Shipyards ($76 million, 4 projects)
        Sub Refit Maintenance Support Facility-Naval Base Kitsap
        Nuclear Repair Facility-Naval Base Kitsap
        Utilities for Nuclear Facilities-Portsmouth Navy Shipyard (NH)
        Unaccompanied Housing Consolidation-Naval Shipyard Portsmouth (NH)

    WMD Training ($21 million, 1 project)
        Applied Instruction Facility-NAS Whiting Field, Milton, FL

    MILCON Reserves ($11 million, 1 project)
        Joint Reserve Intelligence Center-NAS JRB New Orleans

        For the Marine Corps, the fiscal year 2017 request is for 11
    projects, Planning and Design and Unspecified Minor Construction, at a
    budget of $426 million, which is 44 percent lower than the fiscal year
    2016 as enacted budget of $754 million. Investments in MILCON will
    primarily support new warfighting platforms, weapons support, force
    relocation facilities (Rebalance to the Pacific, Aviation Plan),
    improve security and safety posture, and recapitalize and replace
    inadequate facilities. The 11 projects in the Marine Corps fiscal year
    2017 MILCON budget include:
    New Platform and Weapons Support Facilities ($110 million, 2 projects):
        F-35 aircraft maintenance hangar at MCAS Beaufort, SC; and
        F-35 aircraft maintenance shops at Kadena Air Base, Japan.

    Facilities to Support Force Relocations/Increased Force Requirements
    ($119 million, 3 projects):
        Aircraft maintenance hangar for VMX-22-MCAS Yuma;
        Expansion of Reserve Center Annex-Galveston; and
        Utility upgrades for Finegayan cantonment area--Guam.

    Safety, Security, and Environmental Compliance ($31 million, 2
    projects):
        EPA-required central heating plant conversion-MCAS Cherry Point;
    and
        Range safety improvements at MCB Camp Lejeune.

    Recapitalize and Replace Inadequate Facilities ($117 million, 4
    projects):
        Replace and consolidate communications, electrical, and maintenance
    shops-MCB Hawaii;
        Replace unreliable electrical power supply at reserve center-
    Brooklyn, NY;
        Replace reserve training facilities-Syracuse, NY; and
        Modernize recruit barracks and construct a recruit reconditioning
    center for injured recruits at MCRD Parris Island.

        Reduced funding availability in MILCON will result in reduced
    investments in projects that support the consolidation of functions or
    replacement of existing facilities, which will cause degradation of the
    long-term health of existing facilities.
        Relocation of marines to Guam remains an essential part of the
    United States' larger Asia-Pacific strategy of achieving a more
    geographically distributed, operationally resilient and politically
    sustainable force posture in the region. Guam provides a critically
    important forward base for our expeditionary marine ground and air
    forces and also provides key sustainment capabilities for our forward-
    deployed ships and submarines. The permanent basing of marines in Guam
    significantly contributes to maintaining regional stability and
    provides reassurance for key allies and partners across the Pacific
    region.
        With the PB 2017 budget request, the Navy will exceed the minimum 6
    percent mandated by 10 USC 2476 for depot capital investment. The Navy
    has met this statutory requirement every year since its enactment in
    2006.
    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 2017 request of $395 million
    supports Navy and Marine Corps family housing operation, maintenance,
    renovation, and construction requirements. Of this amount, $79 million
    is for the first phase of replacement of inadequate family housing at
    Naval Support Activity Andersen, Guam and $11 million is for the
    renovation of family housing at Marine Corps Air Station Iwakuni,
    Japan. The budget request also includes $301 million for the daily
    operation, maintenance, and utilities expenses of the military family
    housing inventory.
        To date, over 62,000 Navy and Marine Corps family housing units
    have been privatized through the Military Housing Privatization
    Initiative (MHPI). MHPI has enabled the Department to leveraged private
    sector resources to improve living conditions for sailors, marines, and
    their families.
    Facilities Sustainment, Restoration and Modernization (FSRM)
        To maximize support for warfighting readiness and capabilities, the
    President's fiscal year 2017 budget request continues to carefully
    accept risk in FSRM.
        The fiscal year 2017 budget requests $1.9 billionto sustain
    infrastructure, a 16 percent reduction from the fiscal year 2016
    enacted value of $2.3B. Navy and the Marine Corps have resourced fiscal
    year 2017 facilities sustainment at 70 percent and 74 percent,
    respectively, of the Department of Defense (DOD) Facilities Sustainment
    Model. Over time, this lack of sustainment will cause our facilities to
    deteriorate.
        To restore and modernize our existing infrastructure, the fiscal
    year 2017 budget request is $463 million, a 38 percent reduction from
    the fiscal year 2016 enacted value of $749 million. Budget constraints
    have compelled the Department to focus its limited resources to address
    life/safety issues and the most urgent deficiencies at our mission-
    critical facilities, piers, hangars, runways and utility systems. We
    are committed to fully funding infrastructure at strategic weapons
    facilities, accelerating Naval shipyard infrastructure improvements,
    supporting the Marine Corps Aviation Plan, and force relocations.
    However, as the Department defers less critical repairs, especially for
    facilities not directly tied to DON's warfighting mission, certain
    facilities degrade and the overall facilities maintenance backlog
    increases. At current funding levels, the overall condition of DON
    infrastructure will slowly, but steadily, erode over the Future Years
    Defense Plan (FYDP). Although we are proactively managing the risk we
    are taking in our shore infrastructure, we acknowledge that this risk
    must eventually be addressed.
    Base Operating Support (BOS)
        The fiscal year 2017 BOS request of $7.6 billionis essentially the
    same as fiscal year 2016 levels. Similar to the risk taken in our
    facility investments, the Department is accepting lower standards in
    base operating support at our installations. Base operations at Navy
    and Marine Corps installations are funded to the minimum acceptable
    standards necessary to continue mission-essential services. We have
    enforced low service levels for most installation functions
    (administrative support, base vehicles, grounds maintenance, janitorial
    and facility planning) in order to maintain our commitment to
    warfighting operations, security, family support programs, and child
    development. These measures, while not ideal, are absolutely necessary
    in the current fiscal environment.
    Safety Program
        Our initiatives are improving the skills of our Safety
    Professionals directly benefiting over 800,000 personnel (uniformed
    personnel (Active and Reserve) and civilian) executing diverse, complex
    missions across the globe. DON's safety program has expanded its global
    online training resources to ensure the Naval Safety workforce is
    educated and trained through more effective and modernized cost
    efficient methods. We are acquiring commercial off-the-shelf
    information technology tools to enhance our tireless fight to reach our
    objective of zero mishaps. The Risk Management Information initiative
    will comprise a streamlined mishap reporting system, data base
    consolidation, state-of-the-art analytical innovations, and data
    capabilities to improve our predictive abilities for safer sailors and
    marines.
                             managing our footprint
    Base Realignment and Closure (BRAC)
        We appreciate the Congressional support for additional fiscal year
    2016 funds for environmental cleanup at BRAC properties. For fiscal
    year 2017, the Department has planned to expend $154 million to
    continue cleanup efforts, caretaker operations, and property disposal.
    By the end of fiscal year 2015, we disposed of 94 percent (178,180
    acres) of our excess property identified in previous BRAC rounds
    through a variety of conveyance mechanisms. Of the remaining 6 percent
    (11,674 acres), the majority is impacted by complex environmental
    issues. Of the original 131 installations with excess property, Navy
    only has 17 installations remaining with property to dispose.
        Although many tough cleanup and disposal challenges remain from
    prior BRAC rounds, we have fostered good working relationships with
    regulatory agencies and local communities to tackle these complex
    issues and provide creative solutions to support redevelopment
    priorities.
    Compatible Land Use
        DON has an aggressive program to promote compatible land use
    adjacent to our installations and ranges. This program helps Navy and
    Marine Corps to operate and train in cooperation with surrounding
    communities, while protecting important natural habitats and species.
    We conduct Air Installation Compatible Use Zone Studies and Range Area
    Compatible Use Zone Studies, and provide them to nearby communities for
    their consideration in the exercise of their land management
    responsibilities.
        A key element of the program is Encroachment Partnering, which
    involves cost-sharing partnerships with states, local governments, and
    conservation organizations to acquire interests in real property
    proximate to our installations and ranges.
        The Department is grateful to Congress for providing funds for the
    DOD Readiness and Environmental Protection Integration (REPI) Program.
    Since 2005, DON has acquired restrictive easements on approximately
    91,000 acres.
                           protecting our environment
        The Department is committed to environmental compliance,
    stewardship and responsible fiscal management that support mission
    readiness and sustainability, investing over $1 billionacross all
    appropriations to achieve our statutory and stewardship goals. The
    funding request for fiscal year 2017 is about 2.3 percent less than
    enacted in fiscal year 2016, as shown in Figure 2:

                                     Figure 2.--DON Environmental Funding by Program
    ----------------------------------------------------------------------------------------------------------------
                                                                       FY2016
                               Category                               enacted        PB17        Delta     Delta (%)
                                                                    ($millions)  ($millions)  ($millions)
    ----------------------------------------------------------------------------------------------------------------
    Conservation..................................................          86           93            7        8.1%
    Pollution Prevention..........................................          22           19          (3)     (13.6%)
    Compliance....................................................         480          485            5        1.0%
    Technology....................................................          36           37            1        2.8%
    Active Base Cleanup (ER,N)....................................         300          282         (18)      (6.0%)
    BRAC Environmental............................................         158          141         (17)     (10.8%)
        Total.....................................................       1,082        1,057         (25)      (2.3%)
    ----------------------------------------------------------------------------------------------------------------

        The Department continues to be a Federal leader in environmental
    management by focusing resources on achieving specific environmental
    goals, implementing efficiencies in our cleanup programs and regulatory
    processes, proactively managing emerging environmental issues, and
    integrating sound policies and lifecycle cost considerations into
    weapon systems acquisition to achieve cleaner, safer, more energy-
    efficient and affordable warfighting capabilities without sacrificing
    operational capability.
        In fiscal year 2017 we will complete environmental planning for
    Navy's Records of Decision (RODs) for EA-18G Growler training at
    Whidbey Island, Washington. As an example of our land stewardship
    responsibilities, we will complete natural and cultural surveys to
    support Marine Corps air and ground training at Twentynine Palms,
    California. To maintain our environmentally responsible operations at
    sea, we will continue to be leaders in ocean research by studying
    marine mammal behavioral response to sound in water. We will also build
    on our accomplishments this past fiscal year, which included finalizing
    the environmental planning processes for the new Marine Corps Base on
    Guam; completing a five year authorization for testing and training in
    the Marianas Island Testing and Training area with National Marine
    Fisheries Service; and successfully rearing five hundred hatchlings and
    releasing thirty five mature tortoises with the University of
    California, Los Angeles (UCLA) at the Marine Corps Twentynine Palms
    Desert Tortoise Head Start Facility.
        Coastal installations and the communities in which our sailors,
    marines, civilians and their families live are especially vulnerable to
    rising sea levels and increased storm surge resulting from a changing
    climate. The resilience of these installations and communities is
    essential to future readiness associated with all naval mission areas.
    The DON continues to develop relevant policy and guidance to address
    climate change challenges.
                         enhancing combat capabilities
        The Department of the Navy's Energy Program has two central goals:
    (1) enhancing Navy and Marine Corps combat capabilities, and (2)
    advancing energy security afloat and ashore. Partnering with other
    government agencies, academia and the private sector, we strive to meet
    these goals with the same spirit of innovation that has marked our
    history--new ideas delivering new capabilities in the face of new
    threats.
        Our naval forces offer us the capability to provide power and
    presence--to deter potential conflicts, to keep conflicts from
    escalating when they do happen, and to take the fight to our
    adversaries when necessary. Presence means being in the right place,
    not just at the right time, but all the time; and energy is key to
    achieving that objective. Using energy more efficiently allows us to go
    where we're needed, when we're needed, stay there longer, and deliver
    more firepower when necessary.
        Improving our efficiency and diversifying our energy sources also
    saves lives. During the height of operations in Afghanistan, we were
    losing one marine, killed or wounded, for every 50 convoys transporting
    fuel into theater. That is far too high a price to pay. Reducing demand
    at the tip of the spear through energy efficiency, behavior change and
    new technologies takes fuel trucks off the road.
        I'll mention just a couple of examples. The work that the Marine
    Corps is doing to integrate solar power and software into autonomous
    UAVs will allow them to take advantage of environmental conditions and
    provide persistent surveillance for periods far in excess of our
    current capabilities without refueling. They are also working on
    technologies that harvest kinetic and other forms of energy into an
    integrated power system capable of running a marine's radios and
    electronic gear. These are real combat capabilities that will result in
    increased lethality.
        Navy is pursuing similar combat capabilities. In 2016 we will begin
    installing hybrid electric drives in our destroyers, enabling our ships
    to remain on station longer during low speed missions and extend time
    between refueling. This is the same technology that is now onboard USS
    Makin Island and USS America, allowing those ships to stay on station
    between refueling far longer than their predecessors.
    Improving Energy Security and Resilience
        Reliable and affordable electricity at our installations is
    critical to mission effectiveness. Measures to reduce vulnerability and
    to increase resiliency of the electrical system improve and protect
    national security. The 2013 attack on key grid infrastructure in
    California is a reminder of how fragile the commercial system can be.
    The Department of the Navy recognizes this vulnerability and is working
    to enhance our energy security.
        Navy's Renewable Energy Program Office (REPO) has brought one
    gigawatt (GW) of renewable energy into procurement. We expect those
    renewable energy projects to yield hundreds of millions in projected
    utility cost savings and even more important energy security benefits.
    For example, last August we celebrated the procurement of 210 megawatts
    (MW) of solar generation for 14 installations in California, with a
    projected cost savings of $90 million over a 25-year term. At Naval
    Submarine Base Kings Bay, Georgia Power Company is constructing a 42 MW
    solar generation facility, which the base will have access to during
    external grid outages. Marine Corps Logistics Base Albany will receive
    access to a 44 MW on-base solar generation facility for use during grid
    outages and a second feeder line from Georgia Power Company's grid.
        DON's successful industry partnerships form a foundation for future
    third party-financed energy resiliency projects in the form of
    microgrids, battery storage, fuel cells, and distributed generation,
    where these capabilities make sense. Industry has shown interest in
    battery storage by proposing facilities located at two Navy
    installations in California. The Arizona Power Service recently signed
    an agreement to develop a microgrid at Marine Corps Air Station Yuma
    and will provide the base unlimited access to onsite backup power,
    eliminating the need for up to 41 diesel generators. These and future
    energy security efforts using existing title 10 authorities will help
    make DON's installations more energy secure and resilient mission
    platforms.
    Strategic Investments in the Future
        We endeavor to make investments that enhance our operational
    flexibility. Our program to test and certify emerging alternative fuels
    is critical for us to keep pace with developments in the private sector
    and maintain interoperability with commercial supply chains. In
    addition, the Defense Logistics Agency (DLA) Energy (through which Navy
    buys operational fuels) recently awarded a contract to provide us with
    an alternative fuel blend of F-76--the fuel we use to power our ships.
    The contract was awarded at a cost competitive rate with traditional
    fossil fuels and represents an important step toward diversifying our
    fuel supply chains.
                                   conclusion
        Navy-Marine Corps Energy, Installations and Environment team will
    continue to carefully and deliberately manage our portfolio to optimize
    mission readiness, and improve quality of life. The Department's fiscal
    year 2017 request makes needed investments in our infrastructure and
    people, preserves access to training ranges, and promotes
    environmentally prudent and safe actions, while ensuring energy
    resiliency and security.
        Thank you for the opportunity to testify before you today. I look
    forward to working with Congress to deliver an innovative, resilient,
    sustainable and secure shore infrastructure that enables mission
    success for the United States Navy and Marine Corps, the most
    formidable expeditionary fighting force in the world.

        Senator Ayotte. Thank you, Secretary McGinn.
        Secretary Ballentine?

            STATEMENT OF HONORABLE MIRANDA A.A. BALLENTINE,
        ASSISTANT SECRETARY OF THE AIR FORCE FOR INSTALLATIONS,
                         ENVIRONMENT AND ENERGY

        Ms. Ballentine. Good afternoon, Chairwoman Ayotte, Ranking
    Member Kaine, distinguished members of the committee. It is a
    great honor and pleasure to represent America's airmen before
    you today.
        Look, the bottom line for the Air Force is that our
    installations are too old, too big, and too expensive to
    operate. Twenty-four years of continuous combat really have
    taken their toll.
        Like the other services, in order to afford other Air Force
    priorities, our total fiscal year 2017 PB [President's Budget]
    facilities request at $8.3 billion is down 4 percent compared
    to last year. That includes MILCON, FSRM [facilities
    sustainment, restoration, and modernization], environmental
    accounts, former BRAC implementation, and environmental
    programs.
        The Air Force has prioritized MILCON this year over FSRM,
    requesting $1.8 billion in MILCON, which is actually up 14
    percent compared to last year, and $2.9 billion in FSRM, which
    is down about 10 percent compared to last year.
        I expect our backlog of degrading facility requirements to
    grow.
        Our MILCON program is three-tiered similar to the other
    services. First, we support combatant commanders' requests at
    about 16 percent of our MILCON budget this year. Second, 34
    percent of our budget supports the beddown of new weapon
    systems to ensure that they have the facilities required.
    Third, about 40 percent of our fiscal year 2017 MILCON request
    this year allows us to begin to chip away at that significant
    backlog of existing infrastructure recapitalization needs.
        In fiscal year 2017, we funded only about 30 of the 500 top
    priority projects that our MAJCOM [major command] commanders
    submitted, about 30 of the 500.
        Let me briefly address the Air Force energy programs. The
    Air Force is focused on mission assurance through energy
    assurance. We are taking a holistic enterprise approach to our
    installation energy programs with an emphasis on resilient,
    cost effective, cleaner energy projects.
        The Air Force is also developing, acquiring, and improving
    aviation energy technologies and behaviors to improve the range
    and endurance of our weapon systems.
        Finally, the Air Force does need another round of base
    realignment and closure. We have about 30 percent excess
    infrastructure capacity. Since the Gulf War, we have reduced
    our combat-coded fighter squadrons from 134 to 55. That is a
    nearly 60 percent reduction. Yet, all BRACs in that time have
    only reduced U.S. bases by about 15 percent. BRAC is not easy.
        Congress has laid out three very specific concerns, which
    you reiterated today in your opening statements.
        First, communities. Air Force communities are some of our
    greatest partners. Our friends and our families live there. The
    Association of Defense Communities recently asked community
    leaders what they thought about BRAC, and 92 percent said that
    they believe BRAC is better for their communities than the
    status quo of hollowed-out bases, reduced manning, and reduced
    funding. Without BRAC, many communities will continue to suffer
    the economic detriment of hollowed-out bases without the
    economic benefits that only BRAC legislation brings.
        Second, cost. Congress rightly wants to ensure that the
    savings of BRAC justify the costs, and we agree. Simply put,
    the results for the Air Force have been staggering. Previous
    rounds of BRAC save the Air Force $2.9 billion each and every
    year. The Air Force supports new BRAC legislation that
    emphasizes recommendations that yield net savings within 5
    years.
        Third, mission. Some have questioned the wisdom of right-
    sizing infrastructure to current force structure. We have no
    intent to close infrastructure that may be needed for future
    missions. Through five previous rounds of BRAC and numerous
    force structure changes, we have always left room for future
    maneuvering, and we always will.
        We continue to leverage community partnerships, enhanced
    use leases, power purchase agreements, but we really need BRAC
    authority to significantly reduce our spend on installations.
        In closing, the Air Force has made hard, strategic choices
    during this budget request, attempting to strike that delicate
    balance between readiness and modernization. We believe it is
    the right way ahead.
        Chairman Ayotte, Ranking Member Kaine, members of the
    committee, I ask for your full support of the Air Force 2017
    program, and I thank you for questions.
        [The prepared statement of Ms. Ballentine follows:]

                 Prepared Statement by Miranda A. A. Ballentine
        Miranda A.A. Ballentine is the Assistant Secretary of the Air Force
    for Installations, Environment, and Energy, Headquarters U.S. Air
    Force, the Pentagon, Washington, DC. Ms. Ballentine is responsible for
    the oversight, formulation, review and execution of plans, policies,
    programs and budgets for installations, energy, environment, safety and
    occupational health.
        Prior to assuming her current position, Ms. Ballentine served as
    the Director of Sustainability for Global Renewable Energy and
    Sustainable Facilities at Walmart Stores, Inc. In this role, she
    developed and executed global strategies to reduce operating expenses
    in over 10,000 facilities in over 25 countries. Through acceleration of
    renewable energy, energy efficiency, and sustainability, Ms. Ballentine
    identified over $1 billion in potential annual expense reductions and 9
    million metric ton of potential avoided greenhouse gas emissions.
        Prior to joining Walmart, Ms. Ballentine was Vice President for
    Investor Analysis and Chief Operating Officer at David Gardiner &
    Associates, where she informed multi-million dollar investment
    decisions by analyzing companies' off-balance sheet risks and
    opportunities, including climate and energy programs, environmental
    management, labor relations, diversity, and corporate governance.
        Ms. Ballentine previously served as the chair of the World Economic
    Forum's Global Growth Action Alliance's Renewable Energy Working Group,
    as well as a number of non-profit boards, including the Sustainability
    Consortium's External Relations Committee; the NetImpact Corporate
    Advisory Council; and the George Washington University's Institute for
    Sustainability Research, Education, and Policy Advisory Board.
        In 2013, Ms. Ballentine was selected by the World Economic Forum
    for membership in its Forum of Young Global Leaders. Ms. Ballentine
    also serves as a guest lecturer at a number of national business
    schools, including Duke University, University of North Carolina, and
    George Washington University.
                                   education
        1996 Bachelor of Science Degree in Psychology, Colorado State
    University, Magna cum Laude
        2004 Master of Business Administration in Environmental Management
    and Policy and International Business, George Washington University
                               career chronology
        1.  2001 - 2004, Operations Director, Solar Electric Light Fund,
    Washington, DC.
        2.  2003 - 2008, Vice President of Investor Analysis and Chief
    Operation Officer, David Gardiner & Associates, LLC, Washington, DC.
        3.  2008 - 2014, Director of Sustainability for Renewable Energy
    and Sustainable Buildings, Walmart, Washington, DC.
        4.  2014 - present, Assistant Secretary of the Air Force for
    Installations, Environment, and Energy

        (Current as of October 2015)
                                  introduction
        Ready and resilient installations are a critical component of Air
    Force operations. Unfortunately, twenty-four years of continuous
    combat, a fiscal environment constrained by the Budget Control Act
    (BCA), and a complex security environment have taken their toll on Air
    Force infrastructure and base operations support investments.
    Furthermore, the Air Force is currently maintaining installations that
    are too big, too old and too expensive for current and future needs.
    This forces us to spend scarce resources on excess infrastructure
    instead of operational and readiness priorities.
        Air Force installations are foundational platforms comprised of
    both built and natural infrastructure. Our installations serve as the
    backbone for Air Force enduring core missions delivering air, space and
    cyberspace capabilities; sending a strategic message to both allies and
    adversaries signaling commitment to our friends and intent to our foes;
    foster partnership-building by stationing our airmen side-by-side with
    our Coalition partners; and enable worldwide accessibility when our
    international partners need our assistance and, when necessary, to
    repel aggression. Taken together, these strategic imperatives require
    us to provide efficiently operated, sustainable installations to enable
    Air Force core missions.
        The total Air Force fiscal year (FY) 2017 facilities budget request
    is down 4 percent from fiscal year 2016 at $8.5 billion including
    Military Construction (MILCON), Facility Sustainment, Restoration and
    Modernization (FSRM), Housing, BRAC implementation and Environmental
    programs. As in fiscal year 2016, the Fiscal Year 2017 President's
    Budget (PB) request for the Air Force attempts to strike the delicate
    balance between a ready force today and a modern force for tomorrow
    while also continuing its recovery from the impacts of sequestration
    and adjusting to sustained budget reductions. The result is the Air
    Force facilities budget accepts near term risk in the entire
    infrastructure Maintenance and Repair portfolio of MILCON and
    Sustainment, Restoration and Modernization accounts in order to protect
    readiness and maintain credible capabilities in other core missions. In
    doing so, it acknowledges this choice will have long term effects on
    the overall health of infrastructure.
        The Air Force's Fiscal Year 2017 President's Budget includes $1.8
    billion in Military Construction (MILCON) requirements, a 14 percent
    increase over the Fiscal Year 2016 President's Budget. This allows the
    Air Force to replace degraded facilities that can no longer wait, while
    still meeting combatant commander (COCOM) needs and new weapon systems
    beddown requirements that must be accomplished now. This also allows us
    to provide an equitable distribution of $333 million to the Guard and
    Reserve components. This increase was funded by reductions in our
    Sustainment, and Restoration and Modernization accounts for which we
    request $2.9 billion, about 10 percent less than last year. We
    recognize this reduction will expand a backlog of facility investment
    requirements that already totals nearly $20 billion. To assure
    continued focus on taking care of our airmen and their families, the
    Fiscal Year 2017 President's Budget also requests $274 million for
    Military Family Housing operations and maintenance, and $61.4 million
    for Military Family Housing Construction, $56.4 million for Base
    Realignment and Closure and $842 million for Environmental programs.
                             military construction
        The fiscal year 2017 MILCON program consists of three primary
    tiers. The first is support to the COCOMs; the second is providing
    facilities for the beddown of new weapons systems by their need dates;
    and the third is replacing our most critical existing mission degraded
    infrastructure on a worst-first basis.
    COCOM Support
        This year's President's Budget request includes $293 million for
    COCOM requirements; $35 million for Central Command (CENTCOM), $97
    million for European Command (EUCOM), $29 million for Northern Command
    (NORTHCOM), and $293 million for Pacific Command (PACOM). The Air Force
    continues with phase three of the U.S. European Command Joint
    Intelligence Analysis Center consolidation at Royal Air Force (RAF)
    Croughton, United Kingdom, which also supports four other COCOMs.
    Additionally, the Asia-Pacific Theater remains a focus area for the Air
    Force where we will make a $109 million investment in fiscal year 2017
    to ensure our ability to project power into areas which may challenge
    our access and freedom to operate, and continue efforts to improve
    resiliency. Guam remains one of the most vital and accessible locations
    in the western Pacific. For the past ten years, Joint Region Marianas
    (JRM)-Andersen AFB, Guam has housed a continuous presence of our
    Nation's premier air assets, and will continue to serve as the
    strategic and operational center for military operations in support of
    a potential spectrum of crises in the Pacific. Additionally, fiscal
    year 2017 investments in the Pacific Theater include Kadena Air Base,
    Japan; Royal Australian Air Force Base (RAAF) Darwin, Australia; and
    the Commonwealth of Northern Marianas Islands (CNMI).
        To further support PACOM's strategy, the Air Force is committed to
    hardening critical structures, mitigating asset vulnerabilities,
    increasing redundancy, fielding improved airfield damage repair kits
    and upgrading degraded infrastructure as part of the Asia-Pacific
    Resiliency program. In 2017, the Air Force plans to construct a
    Satellite Communications Command, Control, Communications, Computers
    and Intelligence facility at JRM-Andersen AFB, Guam to sustain Guam's
    continued functionality. The Air Force also intends to recapitalize the
    munitions structures in support of the largest munitions storage area
    in the Air Force. Furthermore, the fiscal year 2017 budget invests in
    the aircraft parking apron expansion and aircraft maintenance support
    facility projects at RAAF Darwin supporting the Air Force's
    participation in bilateral training exercises. The fiscal year 2017 PB
    investment also includes a land acquisition in CNMI, to support the Air
    Force's operational capability to execute weather diverts, accomplish
    training exercises and respond to natural disasters. Our total fiscal
    year 2017 COCOM support makes up 16 percent of the Air Force's MILCON
    request.
    New Mission Infrastructure
        The Fiscal year 2017 President's Budget request includes $623
    million of infrastructure investments to support the Air Force's
    modernization programs, including the beddown of the F-35A, KC-46A,
    Combat Rescue Helicopter (CRH) and the Presidential Aircraft
    Recapitalization. The Air Force's ability to fully operationalize these
    new aircraft depends not only on acquisition of the aircraft
    themselves, but also on the construction of the aircraft's accompanying
    hangars, maintenance facilities, training facilities, airfields and
    fuel infrastructure.
        The fiscal year 2017 PB includes $132.6 million for the beddown of
    the KC-46A at five locations. This consists of $11.6 million at Altus
    AFB, Oklahoma, the Formal Training Unit (FTU); $8.6 million at
    McConnell AFB, Kansas, the first Main Operating Base (MOB 1); $1.5
    million at Pease International Tradeport Air National Guard Base
    (ANGB), New Hampshire, the second Main Operating Base (MOB 2); $17
    million at Tinker AFB, Oklahoma, for KC-46A depot maintenance; and
    $93.9 million at Seymour Johnson AFB, NC, the preferred alternative for
    the third Main Operating Base (MOB 3).
        This request also includes $340.8 million for the beddown of the F-
    35A at five locations consisting of $10.6 million at Nellis AFB,
    Nevada; $20 million at Luke AFB, Arizona; $10.1 million at Hill AFB,
    Utah; $315.6 million at Eielson AFB, Alaska; and $4.5 million at
    Burlington International Airport, Vermont. Additionally, the fiscal
    year 2017 investment includes $7.3 million in support of the CRH
    beddown at Kirtland AFB, New Mexico. As the Air Force continues its
    efforts to modernize its fleet, we have moved forward to select
    installations to beddown our newest airframes. In January of this year,
    we announced the enterprise and criteria for the fourth KC-46A Main
    Operation Base (MOB 4).
        In preparation for the Presidential Aircraft Recapitalization
    acquisition, the Air Force's 2017 budget request accounts for the
    planning and design requirements essential to this future beddown and a
    project to relocate the Joint Air Defense Operations Center Satellite
    Site at Joint Base Andrews, Maryland.
    Existing Mission Infrastructure Recapitalization
        This year's President Budget request also includes $723 million in
    MILCON recapitalization projects addressing existing mission
    infrastructure. Existing mission projects include requirements that
    revitalize the existing facility plant and projects that address new
    initiatives for capabilities already contained in the Air Force
    inventory. The Air Force's fiscal year 2017 PB supports Nuclear
    Enterprise priorities and includes three MILCON projects, totaling $41
    million. With this budget submission, the Air Force intends to provide
    a Missile Transfer Facility at F.E. Warren AFB, Wyoming, which
    recapitalizes the current facility and continues to ensure proper
    processing of missiles in support of the Missile and Alert Launch
    Facilities at three sites. The fiscal year 2017 budget also includes a
    Consolidated Communications Facility recapitalization project at
    Barksdale AFB, Louisiana. Additionally, a new Missile Maintenance
    Dispatch Facility at Malmstrom AFB, Montana will be built in support of
    the UH-1 Helicopter and Tactical Response Force facilities beddown.
    Together, these projects will consolidate scattered installation
    functions and provide adequately sized and configured operating
    platforms for the UH-1 recapitalization. Additionally, the fiscal year
    2017 PB request includes three munitions storage projects to
    accommodate the realignment and relocation of primary Standard Air
    Munitions Package assets from McConnell Air Force Base, Kansas to Hill
    Air Force Base, Utah.
        The Air Force's fiscal year 2017 PB supports airfield
    recapitalization requirements to include a project to construct an
    updated, properly sized Air Traffic Control Tower at McConnell Air
    Force Base, Kansas and a new aircraft maintenance hangar in support of
    the Global Hawks at JRM-Andersen AFB, Guam. Additionally, the Air
    Force's Fiscal Year 2017 PB supports force protection recapitalization
    requirements to include a project that constructs a compliant main gate
    complex at RAF Croughton, United Kingdom and new Combat Arms Training
    Maintenance facilities at Buckley Air Force Base, Colorado, Yokota Air
    Base, Japan, and Joint Base-Andrews, Maryland.
        In total, our fiscal year 2017 request represents a balanced
    approach ensuring critical infrastructure requirements to meet mission
    needs and operational timelines.
              facility sustainment, restoration and modernization
        In fiscal year 2017, the Air Force requests $2.9 billion for
    Facilities Sustainment, Restoration and Modernization (FSRM), which is
    approximately 10 percent less than our fiscal year 2016 PB request and
    funds sustainment to 77 percent of the OSD modeled requirement. The
    Restoration and Modernization account is reduced by 34 percent in
    fiscal year 2017 as compared to fiscal year 2016. The Air Force cut
    this account in order to increase the MILCON program and therefore
    reduce the greatest risk within the facility infrastructure portfolio
    this year. Nonetheless, the Air Force's fiscal year 2017 FSRM request
    attempts to keep ``good facilities good'' as the AF continues to focus
    limited resources on ``mission critical, worst-first'' facilities
    through application of asset management principles.
                                    housing
        During periods of fiscal turmoil, we must never lose sight of our
    airmen and their families. Airmen are the source of Air Force airpower.
    Regardless of the location, the mission, or the weapon system, our
    airmen provide the innovation, knowledge, skill, and determination to
    fly, fight and win. There is no better way for us to demonstrate our
    commitment to servicemembers and their families than by providing
    quality housing on our installations. The Air Force has privatized its
    military family housing (MFH) at each of its stateside installations,
    including Alaska and Hawaii. The Air Force has 32 projects at 63 bases,
    with an end-state of 53,240 homes and we are now focused on long-term
    oversight and accountability of the sustainment, operation and
    management of this portfolio.
        Concurrently, the Air Force continues to manage approximately
    18,000 government-owned family housing units at overseas installations.
    Our $274 million fiscal year 2017 Family Housing Operations and
    Maintenance (O&M) sustainment funds request allows us to sustain
    adequate units and improve inadequate units, and our $61.4 million
    request for Family Housing Construction funds improves 204 tower units
    at Camp Foster, Okinawa and 12 units on Kadena Air Base. This request
    will ensure we support the housing requirements of our airmen and their
    families as well as the Joint Service members the Air Force supports
    overseas.
        Similarly, our focused investment strategy for dormitories enables
    the Air Force to achieve the DOD goal of 90 percent adequate dormitory
    rooms for permanent party unaccompanied airmen, while continuing to
    support airmen in formal training facilities. The fiscal year 2017 PB
    MILCON request includes two training dormitories at Fairchild AFB,
    Washington and Joint Base San Antonio, Texas. With Congressional
    support, we will continue to ensure wise and strategic investment in
    these quality of life areas to provide modern housing and dormitory
    communities. More importantly, your continued support will take care of
    our most valued asset--our airmen and their families.
                    air force community partnership program
        In support of the Air Force priority to ``make every dollar
    count'', the Air Force has put a concentrated effort to cultivate
    partnerships between our installations and the local communities. The
    Air Force Community Partnership program has been heralded by our Wing
    Commanders and community leaders as an ideal forum for exploring win-
    win partnerships. To date, there are 53 installations and communities
    participating in the Air Force Community Partnership program. Since the
    program's inception in 2013, we have completed more than 140
    partnership agreements that have generated over $23 million in Air
    Force benefits and $24 million in community benefits. Beyond the
    tangible savings, the program creates an invaluable forum for fostering
    relationships and promoting innovation. Installations and communities
    now have the framework and tools needed to finalize many of the over
    1,000 potential initiatives identified to date, such as shared medical/
    EMT training, joint small arms ranges, and shared refuse management
    services.
        Without losing focus on fostering a partnership mentality across
    the Air Force, we are now turning our attention to cultivate
    initiatives that show significant promise of large returns-on-
    investment (ROI) or have Air Force-wide application. In the future, the
    Air Force Community Partnership program will continue to strengthen its
    foundation by building upon concepts under development while
    reallocating resources towards initiatives with large returns on
    investment.
        Of course, we need your help to pursue the initiative, which has,
    by far, the largest return-on-investment--Base Realignment and Closure.
                      base realignment and closure (brac)
        The Air Force has more infrastructure capacity than our missions of
    today and tomorrow require. Our numbers of aircraft and personnel have
    drawn down significantly since the Cold War. Since the last round of
    BRAC in 2005, we have continued to drawdown our forces, but we have not
    paired these drawdowns with comparable reductions in our
    infrastructure. Since BRAC 2005, the Air Force has thousands fewer
    personnel and hundreds fewer aircraft in our planned force structure,
    yet we have not closed a single installation in the United States.
    Ultimately, we are paying to retain more installations than we require,
    and that money could be used to recapitalize and sustain our weapons
    systems, on readiness training, and on investing in airmen quality of
    life programs.
        Congress has expressed concerns that BRAC may cost too much, is
    often hard on communities, and may not adequately consider potential
    future growth of our forces.
        Regarding cost, Air Force experience shows that BRAC provides
    significant savings. BRAC pays for itself. In each prior round of BRAC,
    including BRAC 2005, the Air Force achieved net savings during the
    implementation period. Couple that with the plain truth that the Air
    Force simply cannot afford to maintain our current infrastructure
    footprint, and our request for BRAC makes fundamental economic sense.
    The Air Force has a $20 billion facility investment backlog. We
    estimate (parametrically) that we currently have about 30 percent
    excess infrastructure capacity when measured against our fiscal year
    2019 force structure. Sustaining and maintaining this extra
    infrastructure further strains our limited funds by forcing us to
    spread them even thinner to support infrastructure that we simply do
    not need. Without previous rounds of BRAC, the Air Force infrastructure
    bill would be about $3 billion higher each year than it is now. BRAC
    has been effective in reducing our infrastructure cost and we need
    another round to truly align our infrastructure to our force structure.
    We acknowledge there will be upfront costs, but those costs are the
    down payment to significant savings in the future.
        Regarding BRAC's impact on communities, we understand that Air
    Force installations are key components of their communities. These
    communities house not only our missions but also our families; our kids
    go to the local schools; our airmen attend the local sporting events;
    our families volunteer across the spectrum of activities--these
    communities are our neighbors. With that in mind, the Association of
    Defense Communities asked our neighbors what they thought about BRAC,
    and 92 percent of community leaders \1\ believe BRAC is better for
    their community than the status quo of hollowed bases, reduced manning
    and minimal investment. As BRAC is, by nature, a consolidation effort,
    some installations will be the recipients of new missions and these
    communities will benefit from the economic boost that increased
    installation activity will provide. Other installations will close;
    however, it is only under BRAC that communities whose bases are closing
    will receive direct economic support through redevelopment guidance and
    financial assistance. Based on prior rounds of BRAC, communities in
    which bases closed had lower unemployment rates and higher per capita
    income growth than national averages \2\. Additionally, the Air Force
    is committed to partnering with DOD, Congress, and communities to
    consider alternative approaches to the prolonged BRAC analysis and
    selection process that puts an economic drag on all communities
    surrounding military installations. In sum, without a BRAC, the Air
    Force will continue to spread out our people and force structure, and
    as this occurs many communities will continue to suffer the economic
    detriment of hollowed out bases without the economic support that BRAC
    legislation provides. This lose-lose scenario can only be reversed
    through BRAC.
    ---------------------------------------------------------------------------
        \1\ From the June 2015 Association of Defense Communities National
    Summit at which General Session audience members were asked: ``What
    would be worse for defense communities?'' and chose from ``Status Quo''
    or ``BRAC''.
        \2\ From Government Accountability Office (GAO) studies GAO-05-138
    and GAO-13-436
    ---------------------------------------------------------------------------
        Finally, Congress has expressed concerns that a BRAC will enable
    reductions in infrastructure that do not account for potential future
    force structure growth. In asking for the authority to permanently
    reduce our infrastructure footprint, the Air Force has considered both
    its needs for today and its needs for the future. The Air Force has no
    intent to close infrastructure that may support any realistically
    achievable surge or contingency needs of the future. While we estimate
    30 percent excess infrastructure capacity, the Air Force would build
    specific reduction targets on future needs, and seek to reduce only
    infrastructure that exceeds future scenarios. BRAC would be driven
    first by a military value assessment grounded in operational needs, and
    would not compromise future growth in force structure. In comparing
    infrastructure capacity with force structure requirements going back to
    the 1990s, the Air Force has never dipped below 20 percent excess
    infrastructure capacity \3\ despite numerous force structure changes
    and five previous rounds of BRAC. Thus, we believe we have the
    opportunity to significantly reduce excess capacity while ensuring more
    than adequate infrastructure to support any envisioned force structure.
    Further, we are certain that BRAC provides the most effective means for
    our infrastructure to achieve the right balance of effectiveness,
    efficiency, and support to AF missions.
    ---------------------------------------------------------------------------
        \3\ From DOD reports to Congress on BRAC and capacity in April 1998
    and March 2004 in accordance with section 2912 of the Defense Base
    Closure and Realignment Act of 1990
    ---------------------------------------------------------------------------
                                 climate change
        The 2010 and 2014 Quadrennial Defense Reviews (QDRs) recognized
    that climate change will shape DOD's operating environment, roles, and
    missions, and that we will need to adjust to the impacts of climate
    change to our facilities, infrastructure and military capabilities. As
    part of a larger DOD effort, the Air Force recently collected data from
    over 1,500 sites regarding impacts from past severe weather events.
    Surveyed sites not only included major installations, but also radar/
    communications sites, housing annexes, training ranges, missile sites,
    etc. Sixty percent of all sites reported some impact due to past
    flooding, extreme temperatures, drought, wildfire, and wind. The single
    most prevalent factor was drought which accounted for 42 percent of all
    reported impacts, followed by non-storm surge flooding and wind with 19
    percent each. Further, roughly a third of the 78 sites within 2
    kilometers of the coast reported having experienced storm surge
    flooding.
        There are several pertinent examples of how climate change is
    affecting our plans for current and future infrastructure operations.
    The Air Force recently completed a study on the risks of coastal
    erosion to remote Alaskan radar sites. Our radar stations are at risk
    due to rapid, significant coastal erosion because the shore ice that
    used to protect the coast from waves has melted. We continue to study
    the rate of erosion, mitigate impacts and incorporate considerations in
    future planning for these sites.
        The DOD climate survey provided qualitative data that helped to
    frame a more holistic understanding of the impacts of climate on
    installations and operations. For the majority of reported severe
    weather events, bases reported emergency preparedness actions and
    procedures were successful in mitigating impacts on mission and
    personnel. That being said, mitigation becomes more difficult and
    cumulative impact to missions more crippling with increasing frequency
    and/or magnitude of severe weather events. The Air Force continues to
    integrate climate considerations into individual mission and
    installation planning efforts to produce informed and resiliency-
    focused decisions.
                                     energy
        The Air Force is the largest single consumer of energy in the
    federal government. Air Force budgetary constraints have strained
    investments in right-sizing, modernizing, and maintaining power
    systems. As energy costs increase and budgets decrease, energy places
    greater pressure on the constrained Air Force budget. From a cost
    perspective, in fiscal year 2015, the Air Force spent approximately
    $8.4 billion on fuel and electricity, with more than 86 percent going
    towards aviation fuel. That $8.4 billion represented approximately
    eight percent of the total Air Force budget; only 10 years ago, less
    than four percent of the budget went towards energy expenses. As we
    refocus our efforts, the Air Force will take a multi-faceted energy
    investment approach to enhance mission assurance.
                   mission assurance through energy assurance
        The Air Force's ability to accomplish its mission--whether
    executing today's fight or training for future fights--is dependent on
    fuel and installation electricity. We must ensure reliable, resilient,
    cost-competitive power for our airmen to fly, fight and win. To do so,
    the Air Force has revectored its installation energy program from a
    largely conservation oriented stance to one of energy resilience
    through strategic agility in installation energy programs and projects.
    The guiding tenet for this strategic agility is ``Mission Assurance
    Through Energy Assurance.'' This new paradigm focuses on providing the
    Air Force with the ability to complete its mission in light of
    disruptions to electricity and fuel, as well as optimizing its energy
    productivity through improvements in technology and process.
                              installation energy
        Over the last several years, the Air Force has seen installations
    lose power for significant periods of time as a result of ice storms,
    hurricanes, fallen trees, and other forms of denial of service. So far,
    the Air Force has been able to mitigate the most critical mission
    impacts due to those power losses by exercising alternatives such as
    moving missions in the case of weather events. There are several
    critical missions, however, that cannot be moved and where even a
    microsecond interruption in power puts Air Force mission capabilities
    at risk. Even though the Air Force has reduced its energy intensity by
    more than 23 percent since fiscal year 2003, we still rely almost
    exclusively on expensive, non-networked diesel generators limited to
    very specific systems to provide the only depth of resiliency beyond
    that inherent in the electrical grid in our system. While that can be
    sufficient for short outages, today's grid is increasingly threatened
    by cyber incursions and physical attacks designed to disrupt power;
    increasing frequency and severity of natural disasters; and
    malfunctions from human error, aging equipment, and faulty
    infrastructure; all with the potential for long-term outages. To that
    end, we must enhance the energy resilience of Air Force installations
    through the adoption of innovative technologies and business models.
        Going forward, the Air Force will transition to a more
    comprehensive approach to installation energy challenges, and it will
    holistically optimize cost and provide resilient, cleaner sources of
    energy by balancing the objectives of AF energy projects, including
    energy efficiency, renewable energy, energy resilience, and other
    energy projects. The core principles below will continue to
    characterize Air Force installation energy projects, but with an
    increased focus on meeting multiple objectives within single projects.

          Resilient: Every Air Force energy project should be
    designed through the lens of enhancing energy resilience; the strategic
    energy agility to maintain critical mission functions even during
    unexpected disruptions. Air Force missions require agile networks of
    platforms, communications equipment, satellites, and other technology
    and equipment. The Air Force will secure critical infrastructure and
    missions through a layered approach to energy resilience, taking
    advantage of rapidly evolving energy technologies to meet both home
    station and expeditionary needs. The Air Force will buttress commercial
    power with on-site electricity generation (preferably cleaner) paired
    with smart distribution networks and cyber-secure control systems,
    enabled to power critical infrastructure during grid disruptions.
          Cost-competitive: Air Force installations and commands
    should continue to ``make every dollar count'' when acquiring advanced,
    cleaner energy projects, while also examining trade-offs between lowest
    price and other priorities such as resilience. The Air Force will
    continue to pursue energy projects or transactions that will save
    money, leverage third-party investment, and prioritize resources to
    projects that also enhance energy resilience and reliability.
          Cleaner: Three global trends identified in America's Air
    Force: A Call to the Future (rapidly evolving technologies, decreasing
    availability of natural resources, and diverse operating environments)
    work in favor of energy modernization. Renewable and other distributed
    energy technologies are key components of energy agility and assurance,
    especially when projects are on site and capable of delivering
    continuous energy when the grid is disrupted.
                                   resilience
        To help achieve Air Force energy resiliency goals, the Secretary
    and the Chief of Staff of the Air Force established the Air Force
    Office of Energy Assurance (AF-OEA) to serve as a central management
    office dedicated to the development, implementation, and oversight of
    privately-financed, large-scale renewable and alternative energy
    projects. This office leverages partnerships with the Army's Office of
    Energy Initiatives and Navy's Renewable Energy Program Office to
    develop projects that contribute to strategic energy agility by
    identifying and awarding third-party financed energy projects that
    provide 10MW or greater and cleaner (but preferably renewable) power
    that increases energy resiliency. These projects will provide
    significant energy alternatives to assure Air Force missions in the
    event of grid outages for short or long periods. The Air Force is
    establishing this office with existing personnel resources and will not
    include any new headquarters personnel; rather, it will co-locate AF-
    OEA with the Army's Office of Energy Initiatives to share support and
    processes, and move forward as a team. The AF-OEA will proactively team
    with the Navy's Renewable Energy Program Office to optimize
    opportunities that office identifies.
        Finally, AF-OEA is charged to take a holistic, enterprise-level
    approach to its energy assurance programs brought to bear on the Air
    Force's mission assurance through an energy assurance approach. This
    includes clean, cost-competitive, reliable and resilient energy through
    the application of utilities privatization, power purchase agreements,
    direct investment (e.g., energy conservation investment program), and
    third-party financed (e.g., ESPCs, etc.) authorities Congress has
    granted the Air Force. All available tools will be used.
                                cost competitive
        Although current and projected energy prices are relatively low,
    from a mission perspective, price volatility does not change mission
    vulnerability. With mission assurance as our focus, the Air Force still
    recognizes the need to reduce the cost of energy to allow our dollars
    to support readiness and recapitalization requirements. The Air Force
    directly invests in facility energy projects primarily using FSRM
    funding based on Air Force priorities. Based on an historical average,
    the Air Force anticipates approximately $223 million of its FSRM
    funding going towards projects with energy benefits such as increased
    resiliency and efficiency through modernized infrastructure.
        While the Air Force has made considerable progress to avoid costs
    through reduced energy consumption, there is more to do. The Air Force
    is pursuing Energy Savings Performance Contracts (ESPC) and Utility
    Energy Service Contracts (UESC) to fund energy conservation projects.
    Since fiscal year 2012, the Air Force has awarded approximately $128
    million across eight ESPCs and UESCs. In fiscal year 2016, the Air
    Force expects to award up to $359 million in such contracts. To take
    advantage of existing expertise, the Air Force has also partnered with
    the Defense Logistics Agency (DLA) and the U.S. Army Corps of Engineers
    (USACE) to expand its ability to identify and execute third-party
    performance contracts.
                                  clean energy
        The Air Force recognizes both clean energy, and its more desirable
    renewable subcomponent, are key elements to diversifying our energy
    portfolio to achieve strategic energy agility. By the end of fiscal
    year 2015, the Air Force had 311 renewable energy projects on 104
    sites, either installed, in operation, or under construction, across a
    wide variety of renewable energy sources, including wind, solar,
    geothermal, and waste-to-energy projects. Cumulatively, the Air Force
    has 104.3 megawatts of on-base renewable energy capacity. These
    projects, which are typically owned and operated by private industry,
    have increased energy production on Air Force installations by more
    than 26 percent from fiscal year 2014 to fiscal year 2015. About eight
    percent of the Air Force's total electrical energy consumption in
    fiscal year 2015 came from a mixture of renewable on-base projects and
    purchased commercial renewable supply. Unfortunately, little of this
    energy can be directly consumed by our bases in the event of a grid
    outage. As we evaluate both direct investment and third party
    investment opportunities, the Air Force will exhibit preference for
    renewable solutions where cost effective, followed by clean but not
    renewable solutions, and ultimately by solutions that provide mission
    assurance through energy assurance without a clean element.
                                 the sweet spot
        Each of the principles above are spectrums, and the Air Force does
    not consider them ``either-or'' choices. The ``sweet spot'' projects
    will have elements of all three core principals, but not every project
    will demonstrate every characteristic. The Air Force will expect each
    project to demonstrate a clear connection to at least two principles.
    Projects that only achieve one principle will need strong mission
    justification. In short, energy projects should move toward the ``sweet
    spot.''
                               operational energy
        Similar to the installation energy program, mission assurance is
    the basis for the Air Force's operational energy program. Through
    behavioral and technological advancements, the Air Force is optimizing
    its capabilities in order to maximize combat readiness and reduce the
    mission risks posed by our fuel supply challenges. With more than 5,000
    aircraft in the Air Force fleet, and a demand for over two billion
    gallons of jet fuel every year, improving how the aircraft and crew use
    their fuel can generate significant increases in capabilities. To
    address the risks posed by that demand, the Air Force has a goal to
    improve its fleet aviation energy efficiency, defined as productivity
    per gallon, by 10 percent by 2020. Since developing the goal in fiscal
    year 2011, the Air Force has improved its aviation energy efficiency by
    almost six percent through a combination of materiel solutions and
    changes to policies and processes.
        The Air Force is requesting $682.6 million in operational energy
    related funding for fiscal year 2017. Included in this is $567.1
    million to increase future warfighter capabilities, $4.5 million to
    reduce the logistical risks to the mission from energy, and $111.0
    million to improve current mission effectiveness.
                               materiel solutions
        The Air Force faces a challenge when implementing materiel
    solutions, as many of them require high upfront investments with long-
    term paybacks. However, those paybacks often provide significant
    returns in both fuel savings and reduced maintenance requirements. The
    Air Force is in the midst of a propulsion upgrade program for the KC-
    135 at a rate of 100 to 120 engines per year for the next 12 years, at
    a cost of approximately $106 million per year. While this is primarily
    a service-life extension effort, it provides a 1.5 percent reduction in
    its fuel consumption rate per engine. Additionally, by improving
    reliability and durability, these upgrades will provide lifetime fuel
    and maintenance savings approaching $3 billion.
                             science and technology
        Part of the Air Force's funding request for fiscal year 2017 is for
    research, development, test and evaluation (RDT&E) opportunities with
    operational energy benefits. One of the main operational energy related
    projects is developing new adaptive engine technology, which provides
    revolutionary advances in turbine engine performance. By incorporating
    these advanced technologies, the Air Force will be demonstrating a
    transformational engine that can operate with the power and performance
    needed for a combat aircraft, while maintaining the higher fuel
    efficiency of large aircraft. Based on the results of Air Force lab
    experimentation, this engine will provide 25 percent greater fuel
    efficiency, 30 percent greater range, 10 percent greater thrust, and
    improved thermal management compared to current engines.
                            modeling and simulation
        While the Air Force is enhancing its fleet through current and
    future materiel solutions, it is also looking to improve how it manages
    fuel usage for future conflicts. As part of the Joint Operational
    Energy Modeling and Simulation (JOEMS) project, the Air Force is
    leading a collaborative effort to examine how technology upgrades
    impact operations in various scenarios through identification of fuel
    usage requirements and logistical fuel supply challenges. By
    incorporating energy considerations in wargames and other modeling and
    simulation efforts, the Air Force can better understand the role fuel
    and logistics can play in future operations. The way it manages and
    consumes fuel can be a catalyst towards a successful mission, and the
    Air Force is driving forward to ensure it maintains an energy advantage
    against potential adversaries.
                                process changes
        The Air Force is also actively fostering an energy-aware culture
    that empowers airmen to take a smart approach to energy to better
    complete their mission. Simple changes in how a pilot flies and trains
    can affect aircraft fuel consumption. Through the Energy Analysis Task
    Force (EATF), the Air Force studied how instructor pilots and simulator
    instructors at Vance AFB in Oklahoma could incorporate fuel efficiency
    concepts into pilot training to ensure new pilots understand how to
    optimize fuel use. As part of a year-long trial, the EATF developed
    four training techniques to reduce fuel consumption in the T-1A
    Jayhawk, which were tested in T-1 simulators with a small group of
    students. The energy efficiency techniques explored for integration
    into the T-1 syllabus have the potential to save up to six percent in
    fuel requirements on navigation training sortie profiles. One of these
    techniques, called the Fuel Efficient Descent, involves teaching
    student pilots to select the optimal point to begin their descent into
    an airfield. When the students select the correct point to begin their
    descent, they are able to reduce engine power to idle and descend using
    minimum fuel. So far, the new technique has proven the potential to
    reduce fuel usage by 35 percent during the descent phase of flight.
        While this effort saves fuel today, it goes much further by
    instilling an energy aware culture in those new pilots, which
    proliferates into the Air Force's major weapons systems and will
    potentially provide exponential savings. This type of savings can be
    seen in the process changes executed at Altus AFB in Oklahoma, which
    instituted scheduling and airspace utilization initiatives in 2013 that
    are providing over $60 million in cost savings on an annual basis.
                           alternative aviation fuel
        The Air Force is also committed to diversifying the types of energy
    and securing the quantities necessary to perform its missions, both for
    near-term benefits and long-term energy resiliency. The ability to use
    alternative fuels in its aircraft provides the Air Force with enhanced
    capabilities by increasing the types of fuels available for use. The
    entire Air Force fleet has been certified to use two alternative
    aviation fuel blends; one of these is generated from traditional
    sources of energy and the other one is generated from bio-based
    materials.
                           environmental stewardship
        While the Air Force strives to prevent or minimize environmental
    degradation from our training activities and operations, we recognize
    that sustaining the world's most capable Air, Space, and Cyber Force
    inevitably results in environmental impact. As a result, we view our
    responsibility to protect human health and the environment as an
    extraordinary duty. The Air Force is subject to the same environmental
    statutes and regulations as any other organization in the country and
    recognizes both its legal and inherent environmental responsibility.
    The Air Force Fiscal Year 2017 PB request assures our programs comply
    with applicable regulatory requirements but, more significantly, in a
    manner that ensures the ready installations and resilient natural
    infrastructure necessary to support the Air Force mission now and in
    the future.
    Environmental Program Funding Details
        Within our environmental programs, the Air Force continues to
    prioritize resources to ensure our defense activities fully comply with
    legal obligations and our natural infrastructure remains resilient to
    support our mission and our communities; restore sites impacted by Air
    Force operations; and continuously improve. The fiscal year 2017 PB
    seeks a total of $842 million for environmental programs. This is $20
    million less than last year due to sustained progress in cleaning up
    contaminated sites and efficiencies gained through centralized program
    management. By centrally managing our environmental programs we can
    continue to fund full compliance with all applicable laws, while
    applying every precious dollar to our highest priorities first.
    Further, our environmental programs are designed to provide
    environmental stewardship to ensure the continued availability of the
    natural infrastructure; the air, land and water necessary to provide
    ready installations and ensure military readiness.
    Environmental Quality
        The Air Force's Fiscal Year 2017 PB request seeks $422.6 million in
    Environmental Quality funding for environmental compliance,
    environmental conservation, and pollution prevention. With this
    request, the Air Force ensures a resilient natural infrastructure and
    funds compliance with environmental laws in order to remain a good
    steward of the environment. We have instituted a standardized and
    centralized requirements development process that prioritizes our
    environmental quality program in a manner that minimizes risk to airmen
    and surrounding communities, the mission and the natural
    infrastructure. This balanced approach ensures the Air Force has ready
    installations with the continued availability of the natural
    infrastructure it needs at its installations and ranges to train and
    operate today and into the future.
        The environmental compliance program focuses on regulatory
    compliance for our air, water and land assets. Examples of compliance
    efforts include more detailed air quality assessments when analyzing
    environmental impacts from Air Force activities; protecting our
    groundwater by improving management of our underground and aboveground
    storage tanks; and properly disposing of wastes to avert contaminating
    our natural infrastructure.
        Efforts in pollution prevention include recycling used oil,
    fluorescent lights and spent solvents, as well as sustaining our
    hazardous materials pharmacies to manage our hazardous materials so
    they don't turn into waste. We continue to make investments in
    minimizing waste and risk to airmen through demonstrating and
    validating new technology such as the robotic laser de-painting process
    on aircraft.
        The Air Force remains committed to a robust environmental
    conservation program. Prior appropriations allowed the Air Force to
    invest in conservation activities on our training ranges, providing
    direct support to mission readiness. The conservation program in fiscal
    year 2017 builds on past efforts to continue habitat and species
    management for 96 threatened and endangered species on 45 Air Force
    installations. This year's budget request also provides for continued
    cooperation and collaboration with other agencies, like the U.S. Fish
    and Wildlife Service, to provide effective natural resources management
    and safeguard military lands from wildfire hazards through coordinated
    planning and incident response, and the application of prescribed burn
    techniques. The fiscal year 2017 budget will further the Air Force's
    implementation of tribal relations policy to ensure that the unique
    trust relationship the U.S. government shares with tribes continues,
    and to provide opportunities to communicate aspects of the Air Force's
    mission that may affect tribes.
        As trustee for more than 9 million acres of land including forests,
    prairies, deserts, wetlands, and costal habitats, the Air Force is very
    aware of the important role natural resources plays in maintaining our
    mission capability. Sustained military readiness requires continued
    access to this natural infrastructure for the purposes of realistic
    training activities. The Air Force utilizes proactive ecosystem
    management principles and conservation partnerships with other federal
    and state agencies to minimize or eliminate impacts on the training
    mission. We are challenged by the fact that in many instances, our
    installations have become the last bastion of habitat for certain
    species due to the increased development outside the installation
    boundary. The fiscal year 2017 PB request includes $53.4 million to
    implement the Air Force's conservation strategy, which will ensure that
    all aspects of natural resources management are successfully integrated
    into the Air Force's mission.
        The Air Force remains committed to good environmental stewardship,
    ensuring compliance with legal requirements, mitigating mission
    impacts, reducing risk to our natural infrastructure, and honing our
    environmental management practices to ensure the sustainable management
    of the resources we need to fly, fight, and win now and into the
    future.
    Environmental Restoration
        The Air Force Fiscal Year 2017 PB request seeks $419 million in
    Environmental Restoration funding for cleanup of current installations
    and those closed during previous BRAC rounds. Our focus has been on
    completing investigations and getting remedial actions in place, to
    reduce risk to human health and the environment in a prioritized
    manner. Ultimately, the Air Force seeks to make real property available
    for mission use at our active installations, and to facilitate
    community property transfers and reuse at our closed installations.
        The Air Force has made progress over time in managing this complex
    program area, with more than 13,500 restoration sites at our active and
    closed installations (over 8,200 Active and almost 5,300 BRAC). The Air
    Force BRAC restoration program is on-track to achieve, at least, a
    ``response complete status'' at 90 percent of its Installation
    Restoration Program (IRP) sites at closed installations by the end of
    fiscal year 2018. Our active installation restoration sites are
    currently projected to achieve the same 90 percent response complete
    level by fiscal year 2020.
        A new topic of focus is Emerging Contaminants (EC). ECs pose
    significant risk management challenges to the Air Force environmental
    program. Regulatory requests for environmental sampling and
    implementation of EC response actions are on the rise. Characterizing
    the extent of Air Force environmental releases of an emerging
    contaminant, assessing the potential risk and impact to human health
    and the environment, and initiating response actions and implementing
    appropriate mitigation measures, drive unforeseen, chemical- and site-
    specific environmental liabilities and program costs.
        The Air Force response to releases of ECs from its facilities is a
    deliberate, science-based and data-driven process that is focused on
    protection of human health and the environment, conducted in accordance
    with the Defense Environmental Restoration Program, and consistent with
    the Comprehensive Environmental Response, Compensation, and Liability
    Act (CERCLA).
        The Air Force continues to work with regulators, city and state
    officials and other stakeholders to develop the best solution to an
    emerging problem. For example, for confirmed perfluorinated compounds
    (PFC) releases, the Air Force is determining the extent of
    contamination and taking steps to mitigate any validated human
    exposures with interim actions until cleanup standards and effective
    remedial technologies are available. When groundwater sampling results
    indicate PFC levels exceed the EPA's provisional health advisory for
    drinking water, the Air Force reduces PFC levels with filtration
    technologies or provides an alternate drinking water source. When PFCs
    are detectable, but below the provisional health advisory level, the
    Air Force may conduct well monitoring to track PFC level changes and
    determine if further action is needed.
        While we cannot compromise on the protection of the public, our
    airmen and civilian workforce and their families, neither can we
    endlessly absorb the operational and financial risks of attempting to
    work with a myriad of unregulated contaminants without some level of
    certainty that the cost of controlling exposure will have a
    commensurate public health and operational benefit.
                                   conclusion
        The Air Force made hard strategic choices during formulation of
    this budget request. The Air Force attempted to strike the delicate
    balance between a ready force for today with a modern force for
    tomorrow while also recovering from the impacts of sequestration and
    adjusting to budget reductions. Our fiscal year 2017 PB request
    increases funding in MILCON to support COCOM and new weapon system
    requirements, reduces Restoration and Modernization (R&M) and continues
    to address the current mission backlog of deferred infrastructure
    recapitalization from the fiscal year 2013 PB strategic pause.
    Sequestration will halt this recovery. We also must continue the
    dialogue on right-sizing our installations footprint for a smaller,
    more capable force that sets the proper course for enabling the Defense
    Strategy while addressing our most pressing national security issue--
    our fiscal environment.
        In spite of fiscal challenges, we remain committed to our Service
    members and their families. Privatized housing at our stateside
    installations and continued investment in Government housing at
    overseas locations provide our families with modern homes that improve
    their quality of life now and into the future. We also maintain our
    responsibility to provide dormitory campuses that support the needs of
    our unaccompanied Service members.
        Finally, we continue to carefully scrutinize every dollar we spend.
    Our commitment to continued efficiencies, a properly sized force
    structure, and right-sized installations will enable us to ensure
    maximum returns on the Nation's investment in her airmen, who provide
    our trademark, highly valued airpower capabilities for the Joint team.

        Senator Ayotte. Thank you, Secretary Ballentine.
        First of all, if you could give us an update on the recent
    agreement that was reached between the City of Portsmouth and
    the Air Force on the Haven well cleanup and also support in the
    community and how you think that is going to work going
    forward.
        Ms. Ballentine. Yes. Thank you, ma'am. I appreciate the
    question.
        The emerging contaminant of PFCs [perfluorinated chemicals]
    which is in Air Force firefighting foam or jet fuel
    firefighting foam is an emerging contaminant that we are
    managing all across the Nation. So we have been really pleased
    with the partnership that you and Senator Shaheen and your
    community have brought to really scrutinizing this issue and
    looking at ways to lean in to solving it.
        So we are excited. Last week, we were able to sign the
    agreement with the city to move forward on the pilot phase of
    the Harrison and Smith wells, and we are looking forward. The
    next milestone is next month. So May. We are waiting for
    estimated completion of construction September of 2017. But the
    final design will be next month.
        Senator Ayotte. I really appreciate your working with the
    City of Portsmouth on this important issue because I want to
    make sure, obviously, my constituents have clean water and also
    continue your efforts that I know you have made to notify
    current and former members of the Air Force and civilians who
    have worked in that facility so that they are aware of their
    potential exposure to this chemical.
        Ms. Ballentine. Yes, ma'am. Thank you for your support. It
    has been a great partnership.
        Senator Ayotte. I appreciate it. Thank you. I look forward
    to continuing to work on this so we can have clean water.
    Pretty important.
        In line with the City of Portsmouth, since we are on the
    topic of the City of Portsmouth, I wanted to ask about--
    actually I am going to ask Secretary Hammack. On January 26th,
    I sent a letter to Lieutenant General Talley regarding the
    transfer of the Paul A. Doble Center to the City of Portsmouth.
    Can you provide me an update on that, what the timeline is for
    when the Army Reserve expects to complete the environmental
    reviews and then transfer ownership to the City of Portsmouth?
    What can we do to expedite that?
        Ms. Hammack. Senator Ayotte, thank you for that question.
        We are following the normal procedures for property
    transfer and one of those is consulting with the New Hampshire
    Division of Historic Resources----
        Senator Ayotte. Yes.
        Ms. Hammack.--regarding the historic status of the
    facility. We expect to receive a determination that the
    property has historic resources that must be preserved. This
    finding has lengthened the timeline for our disposing and
    transferring of the property. But even so, we are progressing
    with the environmental assessment.
        Senator Ayotte. So right now, actually you are waiting for
    the State Division of Historic Resources.
        Ms. Hammack. Yes.
        Senator Ayotte. Okay. Got it.
        Ms. Hammack. But if it comes in the timeline that we
    anticipate, we expect the transfer to take place by the end of
    this calendar year.
        Senator Ayotte. Okay. Excellent. Very good. Thank you for
    continuing to focus on this. I know it is important to the
    local community.
        I also wanted to ask you, Secretary Ballentine, in January
    I learned about approximately 100 New Hampshire Air National
    Guard members who recently experienced unacceptable living
    conditions at Al Udeid Air Base in Qatar. I know this is not
    just my constituents who were impacted by this, but basically I
    get reports of black mold existing in showers, bathrooms,
    curtains, and some of my constituents talking about chunks of
    black mold and people getting sick and potentially having been
    caused by the mold.
        So servicemembers have been told by my office that they
    attempt to clean their living quarters thoroughly but years of
    systematic neglect have put our airmen and other members who
    are supporting our airmen in a tough position there.
        I brought this up to Mr. Carson in the February hearing,
    and I understand that local command is working hard to resolve
    this problem. But we cannot deploy our men and women in uniform
    and put them in situations that make them sick. So I would like
    an update on what the Air Force is doing to ensure our
    servicemembers, including our New Hampshire Air National Guard
    members, do not have to live in unhealthy and unacceptable
    conditions at Al Udeid Air Base in Qatar.
        Ms. Ballentine. Thank you, ma'am.
        You know, taking care of airmen is one of Secretary James'
    top three priorities. So when this came to her attention, she
    immediately directed two courses of action. One was for our
    Surgeon General to ensure that airmen, sailors, soldiers,
    marines, coalition partners who may have had exposure had
    proper health care afterwards. The second was to direct all
    those folks that are working on facilities to mitigate any mold
    issues on the base.
        So let me give you a little bit of an update on both of
    those efforts. I am happy to provide a pretty extensive
    response for the record as well.
        Senator Ayotte. That would be terrific. I would appreciate
    it.
        [The information referred to follows:]

        Upon recently learning of this mold issue at Al Udeid, Qatar,
    Secretary James and General Welsh immediately requested more
    information from AFCENT and the Air Force Surgeon General. Taking care
    of airmen is one of our top priorities, including healthy, safe living
    environments.
        The AF Surgeon General, Lt Gen Dr. Mark Ediger, is actively
    monitoring and evaluating potential health impacts associated with the
    conditions of our facilities at Al Udeid. He issued guidelines based on
    information from Centers for Disease Control and Institute of Medicine
    on medical care for airmen with health concerns associated with mold.
    All servicemembers rotating through Al Udeid are provided instructions
    on what to do to avoid mold or mildew growth, how to clean the room if
    it is found, and who to call should mold or mildew become a recurring
    problem. We are monitoring the post-deployment health assessments of
    the 34 New Hampshire Air National Guard unit members who have
    documented mold exposures and none have required medical follow-up at
    this time.
        We have improved our maintenance capabilities and accelerated
    repairs, recommissioning, and renovation efforts through increased
    quality control, pre-positioned bench stock, $1.3 million dollars of
    Secretary of the Air Force accelerated funding, and the prioritization
    of mold repairs. Along the maintenance line of effort, the
    implementation of our new custodial contract is already yielding great
    dividends to improve the conditions of 73 trailer latrines. Airman are
    actively conducting quality control assessments on 770 tasks per week
    and this has resulted in the new contractor performing at a 97 percent
    pass rate.
        Great progress has been made repairing showers, faucets, urinals,
    and air conditioning units in bathrooms. We expedited $312,000 of high
    quality, US-sourced repair parts to the base which facilitated the
    completion of 103 work orders on latrine or shower facilities in the
    month of April alone. Two large bathroom facilities have been
    recommissioned and another recommissioning effort is underway. Our
    deployed engineers from the 379th and 1st Expeditionary Civil
    Engineering Squadrons are performing full-scale renovations of the ten
    worst large bathroom facilities. Their first renovation is near
    completion and included stripping the building down to its frame and
    replacing all plumbing fixtures, walls, and flooring.
        Finally, we have two major facility replacement initiatives
    underway. The first is the completion of a long-term 20-unit housing
    facility construction project that includes integrated showers and
    latrines. This project is planned to complete on Sep 16. It will house
    up to 2,500 airmen, soldiers, sailors, marines and coalition partners
    and reduce our dependency on latrine and shower trailers. The second
    intuitive includes demolishing and replacing the 49 worst latrine
    trailers. Through the persistent efforts of our 379th Expeditionary
    Contracting Squadron, 12 trailers have been replaced since November
    2015 and seven additional trailers are expected to arrive by July 2016.

        Ms. Ballentine. Do you want a little update now or just
    take it for the record?
        Senator Ayotte. Yes, please. Why do you not give me an
    update and then you can give me an even greater detail for the
    record. That would be terrific.
        Ms. Ballentine. All right. Sounds great.
        So on the Surgeon General side, on the 7th of March, the
    Surgeon General issued a guidance on how to evaluate airmen for
    exposure to mold based on CDC [Center for Disease Control]
    standards, and CDC standards indicate that treatment for any
    kind of mold is the same.
        534 guardsmen from a range of different States have been
    evaluated in the last couple of months after their deployment.
    120 of those documented some exposure that they believe that
    they had been exposed to mold, and one airmen still needs his
    or her post-deployment follow-up. None of those airmen have
    required ongoing care for the exposure.
        On the mold mitigation in the facilities, there are really
    two elements to it. One is in the latrines and one is in the
    living spaces, as you noted. Importantly, when we are in
    expeditionary environments, the facilities are designed for
    shorter lifetimes, and the facilities there have well exceeded
    their life. So a big part of the plan is replacing or moving
    folks into more permanent facilities.
        So Secretary James had directed acceleration of $1.4
    million of funding to accelerate the plan that the base had
    already had in place for the latrine facilities. On the living
    facilities, the dorms and lodging and the like, you are right.
    The folks living in the facilities are responsible for their
    cleaning. The commanders there have really stepped up their
    communication on two things: one, ensuring that folks know how
    to identify, clean and mitigate mold, but more important, that
    they know how to elevate any concerns that they have that they
    cannot handle on their own.
        So one of the things that I have been very pleased about is
    since the commander, Brigadier General James, has increased his
    communication on this effort--and he is communicating quite
    regularly with every member that is deployed there--we have
    seen a significant increase in work orders come in as people
    have learned how to communicate their concerns. Every single
    one of those work orders is treated as an emergency. You know,
    we send folks out within 24 hours. That is not new. We have
    done that. Really, we looked back at work orders over the last
    year. We were getting about, on average, 10 work orders a month
    for mold concerns. We saw a significant increase when the wing
    commander increased his communication telling folks how to do
    it. So that is good news, an increase in folks telling us that
    they have concerns.
        The other good news is only about 10 percent of those work
    orders that have come in actually have turned out to be mold.
        But anyway, I will give you much more detail for the
    record. I gave you more detail than I planned to.
        Senator Ayotte. No, no. I appreciate it. One of the
    interesting things for me is when I raised it with Mr. Carson,
    apparently this has been going on for a long time because it
    sort of opened up the flood gates to my office beyond our own
    Air Guard on it. That is why I wanted to raise it. I think it
    has impacted a lot of our men and women in uniform over the
    period that that base has been in operation.
        Ms. Ballentine. Actually Brigadier General James, when he
    took command earlier last year, did note it as an issue and had
    actually started a mitigation plan that has kind of come into
    fruition in the last couple of months.
        Senator Ayotte. Well, I appreciate your answer and
    certainly look forward to any supplement you make on the
    record.
        I have many other questions, but now I am going to turn it
    over to Senator Kaine.
        Senator Kaine. Thank you, Madam Chair.
        Just a couple of questions based upon testimony. Secretary
    Hammack, I would like to start with you. You gave a very good
    statistic. I want to make sure that we do not bury a lead here.
    Since 2003, the Army has reduced its energy consumption by 22
    percent. I want to dig into that a little bit, then maybe ask
    the rest of you to share also in your own branches or DOD-wide
    what you are seeing.
        Is that 22 percent reduction in the energy budget or is
    that actual in kind of unit of energy used the Army has reduced
    by 22 percent?
        Ms. Hammack. Thank you for that question.
        The 22 percent is a reduction in consumption. That is the
    actual amount of energy used.
        It is interesting. There is another metric that we are
    measured by and that is energy use per square foot. That has
    not reduced as much because what we are doing is we are trying
    to consolidate people into under-utilized facilities. So when
    you have more people per square foot, then in that building
    your energy used per square foot goes up. We are also demo-ing
    some of our older under-utilizing facilities, and if your
    square footage goes down, then your energy use per square foot
    metric also goes up. But overall consumption has gone down, and
    that is due to our team focusing on energy saving performance
    contracts while the private sector is doing the investment, and
    then we pay back out of the energy savings.
        Senator Kaine. If I could hear from other branches if you
    are seeing an equivalent reduction in energy consumption. I
    think this is a very good news story. So Navy, Air Force,
    Marines, DOD-wide. Are we seeing similar trends?
        Mr. McGinn. We are, Senator. It is not just the reduction
    in energy consumption because of our energy efficiency measures
    that we are taking both ashore, as well as on our ships and
    airplanes, but it is also in a large measure substituting brown
    power with green power or renewable energy. I would like to
    provide you a more detailed response, and I will differentiate
    it from Navy and Marine Corps and shore and operational energy
    as well.
        Senator Kaine. That would be very helpful.
        [The information referred to follows:]

                    operational / expeditionary energy input
    U.S. Navy
        The Navy is focused on optimizing energy use on our operational
    platforms to increase our range, endurance, and payload. We are making
    progress toward that goal.
        Navy evaluated the trends in fuel consumption rates for several
    classes of ships during the period from 1992 to 2014, which included a
    period of significant variation in operational tempo. Reductions in
    daily consumption were observed across all evaluated classes, with an
    average reduction of 9.4 percent, or 63.4 barrels per day, which
    translates into more than 10 additional steaming days per year for each
    ship at the most recent average consumption rates.
        Within classes of ships, we observed reductions across the Navy's
    fleet of Arleigh Burke-class destroyers (DDGs) and Whidbey Island and
    Harpers Ferry-class amphibious ships (LSDs), which on average were
    consuming 9.8 percent and 6.5 percent less fuel per day, respectively.
    This translates to about 11 additional steaming days per year for each
    DDG, and 7 additional days per year for each LSD. During the same
    period, employment rates of these ships also increased, with each DDG
    underway for about 8 additional days per year on average, and each LSD
    underway for an additional 11 days.
        These reductions in fuel consumption demonstrate how the
    combination of operational practices and fuel-saving upgrades, such as
    stern flaps, are yielding real-world benefits that translate into
    operational gains for our ships through extended reach, and further
    fuel cost savings for the Navy. Additional efforts, such as the
    installation of LED lighting across the fleet, and the incorporation of
    hybrid-electric drive (HED) systems aboard DDGs, will build on those
    gains and further enhance operational capability.
        Navy also continues to identify and validate energy saving
    initiatives for legacy and new aircraft through efforts like the
    Aviation Energy Conservation Research and Development Program. The
    program is working on advanced flight management system capabilities
    such as optimized launch & recovery profiles which the Navy expects to
    reduce fuel consumption by as much as 10 percent, extending available
    aircraft range and flight time.
    U.S. Marine Corps
        The Marine Corps' operational energy goals are expanding the
    warfighting capability of the Marine Air-Ground Task Force (MAGTF) and
    increasing the training readiness of units. The Marine Corps views
    operational energy as an enabler of combat power; we strive to manage
    Operational Energy in the most effective manner to maximize capability.
        Since the early 1990s, increases in information technology,
    platform maneuverability, and force protection capabilities have
    greatly increased the Marine Corps' capabilities, but these capability
    increases comes with corresponding increases in energy consumption.
    Analysis indicates the energy requirement for the Marine Expeditionary
    Brigade (MEB) is approximately 29 percent higher today than in the mid-
    1990s and is estimated to be 45 percent higher by 2024.
        The Marine Corps understands the risks associated with increases in
    energy requirements and is undertaking mitigation efforts. These
    efforts are led by the Marine Corps Expeditionary Energy Office (E2O).
    For example, efforts aligned with ground assets will result in a
    projected 9 percent increase in efficiency of the MEB--putting downward
    pressure on the trend of increasing fuel and battery requirements for
    the MAGTF. E2O continues to work closely with Marine Corps units and
    agencies, as well as other services, industry, and academia, to
    identify and mitigate energy related risk to Marine Corps warfighting
    capabilities to maintain the warfighting advantage for our current and
    future force.
                               shore energy input
        Department of the Navy (DON) shore installations are critical to
    generating force structure, and play an increasingly important role in
    supporting front line operations. DON is increasing energy efficiency
    and resiliency across the U.S. Navy (USN) and United States Marine
    Corps (USMC) shore enterprise.
        DON initiatives focus on optimizing energy use--or making the most
    of every gallon of fuel and kilowatt hour of power--as well as growing
    the utilization of renewable energy assets in order to decrease
    dependency on the commercial grid. DON has made significant progress,
    reducing energy intensity by 22 percent since 2003.
        Over the last four years, DON has made significant investment in
    both appropriated and third party-financed projects. Return on many of
    these investments is expected to begin in 2016, as projects reach
    completion. DON's overall Energy Saving Performance Contract (ESPC)/
    Utility Energy Savings Contract (UESC) pipeline has over $1.4 billion
    in planning, acquisition and execution with over $150 million already
    awarded this fiscal year.
        DON is pioneering base-wide ESPC projects at a number of
    installations. This approach looks beyond typical lighting and HVAC
    energy conservation measures, to identify all possible efficiency
    opportunities available in areas such as buildings, distribution
    systems and industrial equipment.
        DON has made great strides in developing renewable energy
    resources, with over 650 MW of capacity from projects that are
    operational, under construction, or awarded, and an additional 350 MW
    in procurement. With continued reductions in energy consumption, we
    estimate that half of DON's facility energy consumption will be
    procured or produced from renewable sources by 2020.
        DON also worked to modernize the non-tactical vehicle fleet,
    reducing greenhouse gas emission by 32 percent.
        Service specific information includes:
    United States Navy
        The USN has reduced its facilities energy consumption by 23 percent
    and energy intensity by 21.5 percent since 2003. Navy is also on track
    to meet its consumption reduction goal by 2020, as well as energy
    intensity reduction targets.
        In addition to reducing energy consumption and intensity, Navy's
    Shore Energy Program focuses on improving energy security and energy
    resilience. To this end, Navy has focused on increasing renewable
    energy production. Currently the Navy produces or procures 33 percent
    of its total shore electricity requirement from renewable energy
    sources.
    United States Marine Corps
        USMC has reduced facility energy intensity by 20 percent since
    2003. USMC intends to assess all installations to determine the
    economic viability of utilizing third-party financing mechanisms to
    identify, evaluate, and finance infrastructure upgrades and new
    equipment that will improve energy efficiency.
        USMC has significantly increase the amount of renewable energy
    consumed by its facilities, exceeding the 7.5 percent goal set forth in
    the Energy Policy Act of 2005 by over 2 percent. USMC has over 128 MW
    currently in procurement, and continues to identify financially
    opportunities to reduce energy consumption from brown power sources.
    DON wide
        While counterintuitive the DON aggregate is 22 percent. The overall
    DON metric benefits from a reduction in the energy consumption
    (numerator) primarily driven by Navy's reduction of 820 percent, as
    well as an increase in the KSF (denominator) primarily driven by USMC's
    increase in square footage of 820 percent. Even though USMC isn't very
    large proportionally, their energy intensity is enough to push that
    combined DON number to look slightly higher than either Navy or USMC
    individually. Please see detailed breakdown below:

    Navy FY15: 38,290,000 MBTU / 358,997 KSF = 106.6
    Navy Baseline: 47,659,000 MBTU / 350,685 KSF = 135.9
    Navy Progress: -21.5%

    MC FY15: 10,442,000 MBTU / 133,080 KSF = 78.46
    MC Baseline: 10,649,400 MBTU / 108,374 KSF = 98.27
    MC Progress: -20.2%

    DON FY15: (38,290,000 + 10,442,000) / (358,997 + 133,080) = 48,732,000
    / 492,077 = 99.03
    DON Baseline: (47,659,000 + 10,649,400) / (350,685 + 108,374) =
    58,308,400 / 459,059 = 127.02
    DON Progress: -22.0%

        Senator Kaine. Secretary Ballentine?
        Ms. Ballentine. So for installation energy, the Air Force
    has improved both our energy intensity and reduced absolute
    energy by about 23-24 percent since the 2003 baseline.
    Unfortunately, costs have gone up significantly during this
    time. So the overall energy budget has not necessarily gone
    down. We have avoided many, many millions of dollars
    thankfully.
        Senator Kaine. Mr. Potochney?
        Mr. Potochney. Senator, my figures are overall for facility
    energy, it is down 10 percent, and that is translated into a
    cost avoidance of $1.2 billion. So I think that is pretty
    substantial.
        Senator Kaine. We are now seeing per-unit costs
    dramatically decline in the last couple years. That was not the
    case necessarily during that 2003 to today, but if you are
    seeing reductions in energy consumption by 10 percent in
    facilities or 22 percent Army-wide and then the other
    statistics and you are seeing a reduction in per-unit costs of
    energy, I mean, this is a big success story and we need to
    recognize you for what you do and encourage other agencies to
    do more of it.
        Mr. McGinn. Senator, if I could.
        Senator Kaine. Yes, please.
        Mr. McGinn. I would just like to make the point that a lot
    of times we tend to talk about technology, the technology of
    energy efficiency or renewable energy. That certainly is a key
    part. But I think across the whole DOD, certainly in the
    Department of the Navy, we are seeing a tremendous benefit from
    partnerships with other services, with DOE [Department of
    Energy], and in our case with biofuels with the Department of
    Agriculture. We are also seeing a great change in culture, and
    the culture is going to be sustaining. From seaman to admiral,
    from lance corporal to general, we are seeing great changes in
    how we understand the value of energy, both in garrison as well
    as in the field.
        Senator Kaine. You talk about third-party contracts as part
    of the reason for this, and I just want to make sure I
    understand what you are talking about now. When I was mayor, we
    entered into contracts where we asked third parties to install
    energy efficiency equipment on city buildings and schools. They
    did the capital investment. We contracted for the service, not
    for the equipment. But then we had a baseline and then we
    shared the reduction in energy cost with them. So it takes some
    creativity on the acquisition side to switch from a ``buy the
    equipment'' to ``enter into a service contract and then share
    the energy reduction savings.'' Is that the kind of third-party
    contract that you are talking about?
        Mr. McGinn. That is very similar. We have an energy savings
    performance contract mechanism that is very, very effective at
    doing, in principle, the same thing as you did when you were
    mayor. We really have done it for a number of years, but we are
    really accelerating it over the past 3 or 4.
        Senator Kaine. Because it is a different way than buying
    the equipment. You get better and better at actually doing the
    service contracts once you have the experience.
        I want to ask Secretary Ballentine on the BRAC issue.
    Again, the need to reduce spending on excess infrastructure I
    really think we need to do that. I am just trying to grapple
    with what is the right way to do it. You said the Air Force
    suspects that you have got about 30 percent excess
    infrastructure. How does the Air Force come up with that
    number?
        Ms. Ballentine. We use the same parametric capacity
    analysis that we used early in the 2004 and in the prior BRAC
    rounds.
        Senator Kaine. The 2005 round?
        Ms. Ballentine. Yes, the 2005 round. The 2004 analysis for
    the 2005 round.
        Senator Kaine. Since I was not here then--I was actually a
    lieutenant governor working on a BRAC commission for my State
    back then.
        I do not mean to get into all the details, but I mean, how
    does the Air Force approach it and come to that conclusion that
    there is a 30 percent excess?
        Ms. Ballentine. So we look at force structure. We have
    looked at several different types of force structure. I think
    Senator Ayotte's concerns about optimizing infrastructure to
    today's force structure if today's force structure is not
    optimal to the need is an important concern. So we looked at
    force structure a range of different ways, which is why I say
    about 30 percent excess capacity because depending on which
    force structure we look at, it ranges from 27-28 percent all
    the way up to 34-35 percent.
        For the Air Force the infrastructure that is most important
    that we look at is infrastructure that supports our aircraft.
    So we look at ramp space, hangar space, maintenance space. We
    do look at some facility space such as classroom space and the
    like, but really most of our analysis is on infrastructure that
    supports our aircraft. I can provide all nine categories for
    you for the record and specifically the details on how we do
    the parametric analysis.
        Senator Kaine. Excellent. We will ask that question of all
    the branches. I think that would be helpful.
        [The information referred to follows:]

        Ms. Ballentine. The Air Force used nine category metrics in
    conducting its parametric excess infrastructure capacity analysis,
    consistent with Air Force category metrics used to justify previous
    rounds of BRAC. The category metrics are as follows: large aircraft
    parking apron; small aircraft parking apron; Air Force Reserve parking
    apron; Air National Guard parking apron; education and training parking
    apron; education and training classroom space; depot level maintenance;
    space operations; and product centers, labs, and test & evaluation
    installations. For each metric, a baseload ratio, for example number of
    aircraft to parking apron square yardage, is calculated and compared to
    a 1989 baseline ratio. Decreases in baseloads indicate that force
    structure drawdowns have outpaced reductions in infrastructure and that
    excess infrastructure capacity exists.
        Ms. Hammack. The Army used nine categories of installations to
    develop its parametric capacity analysis. It analyzed the
    infrastructure for a force structure comprising a Total Army of 980,000
    by the end of fiscal year 2019 (450,000 Active Component, 335,000 Army
    National Guard, and 195,000 Army Reserve). Each installation category
    had a metric for infrastructure divided by a metric of force structure
    to develop a ratio of infrastructure-to-force structure. That ratio was
    then compared to a historical baseline (the year 1989) to measure the
    amount of increase in that ratio over time. The overall excess capacity
    for the Army was measured at 30 percent using the parametric capacity
    analysis.
        Administrative Installations: Base loading of approximately 97
    square feet of infrastructure per person, which represents a 29 percent
    increase in excess capacity in comparison to 1989. Seven installations
    made up the category.
        Depots: Base loading of approximately 27 percent more single-shift
    capacity than available funding/utilization. However, this category
    shows no net increase in excess capacity in comparison to 1989. Five
    installations made up the category.
        Other Organic Industrial Base: Base loading of approximately 30
    percent more single-shift capacity than available funding/utilization.
    However, this category shows no net increase in excess capacity in
    comparison to 1989. Five installations made up the category.
        Arsenals/Industrial Manufacturing: Base loading of approximately
    2,258 square feet of facilities per person, which represents a 36
    percent increase in excess capacity in comparison to 1989. Three
    installations made up the category.
        Major Training--Active: Base loading of approximately 7,949 acres
    per maneuver battalion equivalent of force structure, which represents
    a two percent increase in excess capacity to 1989. Four installations
    made up the category.
        Major Training--Reserve. Base loading of approximately 1.71 acres
    per U.S. Army Reserve Soldier, which represents a 53 percent increase
    in excess capacity in comparison to 1989. Five installations made up
    the category.
        Maneuver: Base loading of approximately 40,405 acres per maneuver
    battalion equivalent of force structure, which represents a 42 percent
    increase in excess capacity in comparison to 1989. Twelve installations
    made up the category.
        Schools: Base loading of approximately 72 square feet of
    instructional space per solider/student, which represents a 44 percent
    increase in excess capacity in comparison to 1989. Thirteen
    installations made up the category.
        Research, Development, Test, and Evaluation/Labs: Base loading of
    approximately 879 square feet per person, which represents a 46 percent
    increase in excess capacity in comparison to 1989. Ten installations
    made up the category.
        Mr. McGinn. For the capacity analysis based on fiscal year 2019
    force structure, the Department of the Navy (DON) used 12
    infrastructure categories to determine potential excess/deficit
    capacity. Categories include: Naval Bases, Marine Corps Bases, Air
    Stations, Ordnance Stations, Supply Installations, Aviation
    Maintenance, Maintenance Depots (USMC), Shipyards, Research Development
    Testing and Evaluation (RDT&E) Labs, Training Air Stations, Training
    (Pipeline), and Training (Degree-granting).
        The parametric analysis methodology was used to identify potential
    excess/deficit percentage for each category and an aggregate DON
    excess/deficit capacity. For each category, capacity and loading
    information came from authoritative sources such as the internet Naval
    Facilities Assets Datastore (iNFADS), which provides the real property
    inventory for the DON, and the Navy Aircraft Program Data File (APDF),
    which provides the number and types of aircraft. Ratios of capacity to
    loading were calculated, with the resulting ratio compared to the 1989
    ratio to determine the proportional excess/deficit in 2019. The
    resulting estimate of 2019 excess/deficit percentage is an aggregate
    value and cannot be used to imply an excess/deficit for a given
    installation.
        To determine the aggregate DON capacity, each category was assigned
    a relative weight. Installations were mapped to categories, and each
    category weighted by the percent of installations in the category
    relative to the total number of installations.
        For infrastructure categories that show a shortfall, the shortfall
    percentage is reported as ``0'' in the aggregate calculation. As a
    result, excess in one category is not offset by shortfalls in another
    category.
        Mr. Potochney. I have nothing more to add than what my co-panelists
    provided and concur with their answers.

        Mr. Potochney, you have a follow-up, and then I will turn
    it over to Senator Ernst.
        Mr. Potochney. To follow up, Senator, our analysis--it is a
    parametric analysis, as Secretary Ballentine said. Basically
    what it is it is a base loading analysis. If in 1989 we were
    able to accommodate, say, for instance, three ships--or let us
    make the math easy--four ships per 1,000 feet of pier space and
    now we only have three ships to fill up that 1,000 feet, we
    have a 25 percent delta in excess. That is how we do our excess
    capacity analysis at the beginning end of BRAC. Its only
    purpose is to illustrate there is enough out there to justify
    you all authorizing us to do an actual BRAC analysis. It is not
    a BRAC analysis.
        Senator Kaine. I hope that we might have a full committee
    discussion sometime about the best way to rationalize excess
    infrastructure because my sense is your expertise in branches
    or division-wide coming up with an assessment of the excess
    infrastructure suggests you also have an expertise to make
    recommendations to us. Again, we are going to approve some and
    not approve some. I just believe, having lived at the other end
    of BRAC as a mayor and governor, that that would be a better
    process than the process in the past.
        I know there have been critiques of the 2005 BRAC because
    it did not really save money, but I understand some of that was
    the BRAC was not just about excess infrastructure. It was also
    about joint and transformation of mission, et cetera. But even
    if we said, okay, there is a way to save money, there is way to
    rationalize excess infrastructure, I am not sure the BRAC
    process does it the right way. But you make a compelling case
    that we should not be spending money on excess infrastructure.
        Ms. Hammack. Absolutely. BRAC 2005 is saving the Army $1
    billion a year and cumulatively the prior BRAC rounds are
    saving us another $1 billion a year. So BRAC is a proven
    process to save money. If you look at the GAO [Government
    Accountability Office] report, the GAO report recognized that
    BRAC 2005 did save money.
        Senator Kaine [presiding]. Senator Ernst?
        Senator Ernst. Thank you, Ranking Member Kaine, and thank
    you to our witnesses for today. We appreciate you taking the
    time to be here.
        Secretary Potochney, I will start with you but I would love
    input if the others would like to jump in as well.
        I am a strong supporter of SOCOM's [Special Operations
    Command] Preservation of the Force and Family, a very important
    program, and their initiatives. I am glad to see that SOCOM has
    done so much to support our special operations families and our
    wounded warriors through this program.
        I have a dear friend who is part of that family. He is an
    injured special operator at Fort Bragg. Earlier this year, I
    did have the opportunity and the honor to visit him at Fort
    Bragg and go through some of his recovery process as well and
    also visit a number of the operators that are not part of that
    wounded warrior program but they are very important to us as
    well.
        Now, at Fort Bragg, they do have what is called the
    tactical human optimization, rapid rehabilitation, and
    reconditioning facilities. This is otherwise known as THOR III.
    I see that you are familiar with that. I had the opportunity to
    visit and loved the facilities and their very reason for being,
    which is to not only assist our special operators as they are
    training for the missions, but also in assisting their members,
    their wounded warriors that come back, and assisting them to
    getting back to their potential, hopefully their full
    potential. I hope that we can enhance and expand these
    facilities for our operators and again just want to make sure
    that we are returning them to the fight. We invest a lot of
    time and energy and money in these operators. They are a great
    part of our war on terror, as well as many other missions. So
    we want to support them however we can.
        Sir, can you briefly describe the importance of THOR III to
    our special operations soldiers and what more can we as
    Congress do to support THOR III and this program, particularly
    with MILCON and other initiatives under the preservation of the
    force and families program? Can you talk a little bit about
    that and its importance?
        Mr. Potochney. Yes, ma'am.
        We do support it. In fact, from what I can see, it is
    expanding, and people do recognize its validity and its value.
    We have got a series of projects in the works to enhance it.
    There was some reporting requirements we had levied on us from
    the appropriators, as I understand it, and we worked through
    those, also as I understand it. So we are firmly behind it.
        Senator Ernst. Any other thoughts from our panelists on
    that particular issue?
        [No response.]
        Senator Ernst. I just want to reinforce again--and I have
    brought this up in different types of subcommittees and the
    committee as well as the full committee, just emphasizing how
    important I believe this is because our special operators do
    take on different types of missions maybe than a transporter
    like myself would have done in the Iraqi War. So understanding
    the importance it is to our families, to our wounded warriors,
    and those special operators, I would like to encourage you to
    continue working with that program, hopefully expanding those
    facilities. It is very, very important to us.
        Mr. Potochney. Yes, ma'am.
        Senator Ernst. Thank you. That is all I have for today.
    Thank you.
        Senator Kaine. Thank you, Senator.
        Senator McCaskill?
        Senator McCaskill. Thank you.
        Secretary Hammack, I know that you recently visited Fort
    Leonard Wood, and one of the things that has cost our military
    a lot of money that frankly a lot was wasted is the support of
    contingency operations. If you look at the not-so-pretty
    history of the LOGCAP [Logistics Civil Augmentation Program]
    contracts, it does not take much work to figure out that we
    sure overpaid for a lot of contingency support as it related to
    particularly the early era of LOGCAP in Iraq. I spent a lot of
    time on that.
        So I think it is pretty important that we have CBITEC
    [Contingency Basing Integration and Technology Evaluation
    Center]. I know you visited it at Fort Leonard Wood. If you
    would share with the committee what you think about this effort
    to help us make smarter, more efficient, effective decisions
    around contingency support, whether it is water, waste,
    housing, security protection. If you could speak to that, I
    think it would be important to get that on the record.
        Ms. Hammack. Thank you, Senator.
        CBITEC is a great opportunity for us to take technologies,
    whether they are commercial, off-the-shelf technologies or
    developing technologies, and run them through a test in a camp
    that soldiers live and use every day, yet in an environment
    where if something goes wrong, we can fix it.
        The challenge, especially in the early years of Iraq and
    Afghanistan, is we sent some equipment over there that had not
    been thoroughly tested, we did not understand completely how to
    operate, nor how to maintain it. A lot of our servicemembers
    said do not use us as guinea pigs. CBITEC was stood up. So was
    the base camp integration lab in Fort Devens, Massachusetts.
        With those two base camps, one tests solutions for very
    medium to large base camps. A B-cell does the small base camps.
    But we are able to test force protection. We are able to test
    technologies that are water savings technologies such as water
    from air, which we might call a supersized dehumidifier. But
    the fact is if you do not have to drill a well, then your force
    becomes more expeditionary and there is less strain on the
    environment in which you are setting up base camp.
        But we are also able to test energy efficiency technologies
    to try and reduce the number of convoys that are crossing the
    roads and to reduce the risk and vulnerability to our
    servicemembers. So we have seen great technologies and
    solutions come out of that lab. We have also seen some
    solutions that were tested there that were not ready for prime
    time, and I think that is the right kind of environment to do
    that testing in.
        Senator McCaskill. Which, of course, saves us money. When
    we figure out something is not ready for prime time, then we do
    not chase bad money after good.
        So I am confused as to why this thing appears to be headed
    towards an end because we have got--surprise, surprise--people
    fighting over who is supposed to be paying for it. I know this
    is shocking within the armed services that people are fighting
    over who should pay for it.
        Can you help this committee navigate through this? It would
    be a shame for us to lose this capability because one branch
    says not us and the other branch says not us, and therefore, it
    is my understanding, the funding is going to shut down this
    year.
        Ms. Hammack. That is true. Just due to sequestration, we
    have limited funding for everything. So we have limited funding
    to spend on maintaining our facilities. We are trying to focus
    our funding on manning, training, and equipping our soldiers.
    When it comes to some of the research, testing, and support for
    installations----
        Senator McCaskill. We are manning, equipping, and
    protecting our soldiers. We know that. We are not talking about
    testing for something that is not directly relevant to doing
    what we are asking our soldiers to do.
        Ms. Hammack. I agree with you. We have asked CBITEC to put
    together what it will cost to continue to maintain it through
    the end of this calendar year. TRADOC [U.S. Army Training and
    Doctrine Command] is doing that now, and I expect to have that
    information by the end of the month.
        Senator McCaskill. Well, I am interested in this, and I
    think sometimes--I know that you all are doing your best to try
    to figure out how to operate in this environment, although I
    see the OCO [overseas contingency operations funding] relief
    wagon coming up over the horizon in this appropriations
    process. I can assure you I think this Congress is getting
    ready to do what I think is irresponsible and that is to push
    everything into OCO instead living up to our responsibility of
    putting it in the budget and being transparent and accountable
    to the American people for that.
        But I am very interested in figuring out really how much
    money are we talking about and are we cutting off our nose to
    spite our face if we let this important capability go by the
    wayside. I particularly would be interested in knowing what we
    have learned there has, in fact, saved us money because I
    guarantee you there is a list, probably fairly long, of what we
    have learned there that has saved us money. So I would
    appreciate a follow-up of that.
        [The information referred to follows:]

        CBITEC provides a realistic training base camp for soldiers, as
    well as a venue in which to demonstrate and assess new technologies and
    techniques that will improve energy efficiency, equipment readiness,
    and mission capability at future contingency bases. To date, CBITEC has
    demonstrated a suite of life-support equipment with the potential to
    reduce future contingency base fuel use by 50 percent.
        While CBITEC provides an excellent capability to support soldier
    training and doctrine development, the Army does have other facilities
    in which to train. In an era of constrained resources, the Army must
    make difficult choices to prioritize spending to maximize the
    generation of readiness and the welfare of our soldiers.
        Army Training and Doctrine Command (TRADOC) evaluated and
    prioritized 67 unfunded requirements, of which CBITEC was one, for mid-
    year reprogramming. TRADOC was unable to secure funding for the CBITEC.
    The Maneuver Support Center of Excellence provided $40,000 in the
    interim for limited operations (fuel, waste water), to continue
    supporting initial military training classes. CBITEC's facilities began
    limited operations on May 1, 2016, and will close on July 1, 2016 and
    transfer to range control. The two term employees will be released at
    the expiration of their term in August 2016.
        In the absence of the CBITEC, the Army conducts field tests and
    evaluations on contingency basing technologies at other locations,
    including the Base Camp Integration Laboratory (BCIL) at Fort Devens,
    MA, and the Army Warfighting Assessments at Ft. Bliss, TX.
    Additionally, individual technologies that support base camp operations
    are developed and evaluated at Army laboratories.

        Just briefly for Mr. McGinn, you know, we are trying to
    make sure that we are ready for women in our facilities. I just
    referenced Fort Leonard Wood. They have been duly training our
    soldiers there, both men and women, for a long time, and so
    their facilities are capable in that regard. Could you briefly
    give us your assessment of how prepared are our marine training
    facilities to accommodate what we believe will continue to be
    an increased number of women in the marines?
        Mr. McGinn. I know that the marines are moving out smartly
    in making adjustments to their whole training and operating
    pipeline to support women marines as their roles and missions
    have expanded. I will be happy to take a question for the
    record to provide you a more comprehensive answer for both the
    Marine Corps and, to the extent that you are interested, women
    in the Navy as well, although that is a more stable situation
    than the expansion of roles and occupations for women marines.
        Senator McCaskill. Both would be great, but I am
    particularly interested in the marine setting because it is
    such an expansion. I know that has not exactly been the
    smoothest of roads, so to speak. I am anxious to know how all
    that is going.
        [The information referred to follows:]

        All Navy commands and activities, with the exception of Naval
    Special Warfare Command, already train men and women in a fully
    integrated training setting.
        The Naval Special Warfare Center (NAVSPECWARCEN) and the Naval
    Special Warfare (NSW) Women in Service Review team have identified all
    known supply and facility requirements for integration and are
    executing their plan to ensure all candidates are equipped and
    outfitted for optimal training. NAVSPECWARCEN reviewed all training and
    berthing sites and created a barracks instruction that addresses
    standards, policy, and procedures for student's use of berthing and
    restrooms. Restroom modification projects throughout NSW training
    facilities are currently underway and are expected to be completed
    prior to arrival of the first female students.
        MCICOM reviewed facility requirements and identified the facility
    projects necessary to accommodate the integration of women in the
    force. The attachment shows the total facility change costs to date and
    the work remaining. Approximately $977k of work has been completed as
    of 15 May 2016 (the majority of projects by number). There are nine
    projects remaining for training facilities, with an estimated cost
    total of $1.53 million. These remaining projects are in various stages
    from planning through construction, and are estimated to be fully
    complete in fiscal year 2018. The list of projects is provided in the
    attached table.

        Mr. McGinn. Great.
        Senator McCaskill. Thank you. Thank you all.
        Senator Ayotte [presiding]. Thank you all.
        Secretary McGinn, I wanted to ask about the Navy's request
    for $6.1 million for a microgrid project in California.
    According to the documents, it says it will support
    nonessential functions. Yet, I know that there are significant
    unfunded priorities. Just to use one example, the Marine Corps
    requirement for F-35 stationing in Miramar. I am sure there are
    many other examples that I could pull out. So could you help me
    understand why we are requesting this and why you think given
    all of the, really, reduction in funding we have talked about
    here and all the concerns we have, that this is a priority?
        Mr. McGinn. I will be happy to investigate that. I do not
    have an answer, but I will find one for you, Senator. It may be
    a matter of just words describing this microgrid as for
    nonessential purposes. I assure you we are not doing anything
    for nonessential things. It may be just a definition or use of
    terms that is technical. But we will find out the specific
    project and provide you a full background on its rationale.
        Senator Ayotte. I appreciate it because when you can
    imagine when I read ``nonessential,'' how that kind of makes me
    wonder. So if you would get me more details on that, I would
    really appreciate it.
        [The information referred to follows:]

        Naval Medical Center San Diego services nearly 100,000 enrolled
    beneficiaries. The installation requires the energy security to provide
    full mission support capability with increased continuity of
    operations, especially during unplanned disasters.
        The Navy's P624, $6.1 million ``Energy Security Hospital
    Microgrid'' in San Diego, California (Balboa Hospital) will increase
    the Naval Hospital energy security posture and afford improved
    efficiencies and load shedding through improved metering, controls and
    distribution improvements. The Navy will use this project to validate
    concepts that will be applied on future projects.
        This project improves the electrical distribution and control
    infrastructure to increase the capability and usefulness of the
    existing 10.4MW co-generation plant. The project will ensure the entire
    hospital complex has reliable power during extended San Diego Gas &
    Electric grid outages and mitigate impacts of unplanned outages. Since
    2011, four unplanned outages occurred, which impacted hospital
    facilities, emergency response, and family care centers, with some of
    the outages taking almost half a day to restore to full service. The
    restoration of power for the affected facilities could have been
    significantly quicker with microgrid capability to support the
    installation mission, take care of patients, families and staff.
    Additionally, this project will install metering and controls to
    improve energy monitoring and control capability.
        The project would:
          create a campus-wide microgrid at Balboa Complex that is
    capable of providing reliable power to critical emergency services
    infrastructure;
          provide faster restoration of service in case of an
    unplanned outage or natural disaster;
          integrate additional power sources which will provide
    power to other essential facilities at the Medical Center (this shall
    increase energy resilience and security);
          increase the efficient use of the existing turbine and
    other generation assets during island mode;
          integrate the cogeneration plant with all Balboa
    facilities and to a future Facility and Energy Operation Center (FEOC).
        The planned dates are: construction award: 2/2017, construction
    start: 7/2017, and construction completion: 8/2018.

        Mr. McGinn. I really appreciate that and I am glad I never
    read ``nonessential'' in any of my fitness reports.
        [Laughter.]
        Senator Ayotte. We all hope not to read that in any of our
    reports. Thank you.
        Secretary Hammack, in your written testimony, you noted
    that the Army recently conducted a test and a temporary
    disconnect that was also referenced, I believe, by Senator
    Kaine at Fort Drum, New York from the energy distribution
    network, which is an important issue for us to understand as we
    think about threats to our grid, the vulnerability of our base
    and defense system to cyber attacks. So what have you learned
    from this test? What has the Army learned? Have other services
    conducted similar tests? What are we doing, and can you maybe
    talk to me a little bit about what we are doing to make sure
    that we think about protecting our military assets from
    potential cyber attacks, potential other types of attacks that
    even if we had a missile attack or something like that, that
    could impact our grid that we have a plan to protect our
    military assets?
        Ms. Hammack. Thank you for that question.
        Certainly the Fort Drum project is a delight that it
    worked. It is a combination of things that were tried. It was a
    decommissioned, coal-fired plant that the private sector and
    the private sector's money rehabilitated into a biomass plant.
    It is taking clippings from the timber industry and using that
    for fuel. They are maintaining 3 months? worth of fuel within a
    5-minute radius so that they could survive an extended outage.
    There was a requirement in the contract for them to put in
    additional technology to be able to disconnect from the grid.
        The power plant in and of itself serves twice the needs of
    Fort Drum. So it is supplying power to the local community in
    addition to Fort Drum. But we wanted to simulate the grid
    dropping out and how that switch would occur. The switch was
    seamless. It was done in coordination with the utility so that
    the utility grid itself did not experience a shock and they
    knew what was going to go on. So we demonstrated that right now
    Fort Drum is the most resilient installation in the Army's
    portfolio from an energy standpoint.
        As we all learn more about cybersecurity, we are
    approaching that in a methodic way as well. It is interesting
    that cybersecurity is the unknown unknown. You do as much as
    you know about. We are working hard to ensure we stay abreast
    of current threat and current technology because our intent is
    that our installations are resilient so that they can become
    and remain the deployment platforms that this Nation expects of
    them.
        Senator Ayotte. Great. Thank you.
        Do any of the other services want to comment? Similar
    projects?
        Ms. Ballentine. Yes. I would say that from the Air Force
    perspective, mission assurance here and all around the world is
    absolutely dependent on energy assurance even at our CONUS
    [continental U.S.] bases. The Air Force executes a real-time
    mission from bases here in the United States. The threat
    environment has changed.
        We have always thought about energy resiliency on our
    bases. We have always had diesel generators as backup, but it
    is a 19th century solution supporting 21st century weapon
    systems. So we are advancing how we think about energy
    assurance to have smart, cybersecure, highly dynamic, agile
    energy systems, microgrids, that allow us to be severed from
    the wider utility grid because the threat environment has
    changed. We are no longer in an environment where we are just
    planning for a big hurricane or an ice storm. We have to
    prepare for long-term outages, either due to physical threats
    against the U.S. grid or cyber attacks against the U.S. grid.
    So the Air Force has a number of tests, as well as with the
    other services.
        I have to say this is an area where we collaborate very,
    very well. We work together. We are learning from each other.
    We are ensuring that we are not replicating tests and R&D
    [research and development] of various technologies. So we are
    not making the same mistakes twice, and we are really learning
    from one another.
        Mr. McGinn. We are taking in the Department of the Navy a
    hard look at all aspects of cybersecurity for our industrial
    controlled systems and our SCADA [supervisory control and data
    acquisition] systems for reasons of mission assurance. However,
    mother nature continues to be the greatest threat to mission
    resiliency in our installations around the world. So we are
    deploying more and more distributed energy closer to loads. We
    are deploying microgrids. I would describe them, Madam
    Chairman, as essential microgrids for our bases for operations.
        This is a process that has begun with the deployment of
    distributed generation assets. Some of them are renewable
    energy. Many of them are gas-powered. An example of that latter
    category is at Marine Corps Station Yuma, Arizona where we have
    a 25-megawatt gas-fired peaker plant that is going on inside
    the defense line that will be able to cover all of our Marine
    Corps Air Station Yuma requirements should there be a grid
    outage. But in the meantime, it is very, very helpful to all of
    the customers of APS [Arizona Public Service], the utility that
    we are doing this partnership with, as a peaker plant to
    prevent a grid outage in times of heavy load.
        Ms. Hammack. If you do not mind, one more project that we
    are working on in association with Hawaiian electric is in
    Hawaii where on Oahu most of the power is generated on the
    shoreline in the tsunami zone. Should there be a large weather
    event there, the whole island of Oahu is at risk. So in
    partnership with Hawaiian Electric, we are giving them an
    easement at Schofield Barracks so they will be putting in a 52-
    megawatt multi-fuel plant there that will power Schofield
    Barracks so we will have an Army barracks up, Wheeler Army
    Airfield, so there will be an airstrip since Honolulu airport
    is again on the shoreline in the tsunami zone, and it is also
    going to power a community hospital.
        So when that gets up--we are doing the groundbreaking later
    this summer. When that goes up, we will again test it
    disconnecting those three locations, disconnecting from the
    grid to ensure we have resiliency to help restart the island.
        Senator Ayotte. Thank you. I think you might want to invite
    Senator Hirono to that groundbreaking. I am sure she really
    appreciates what you are doing there.
        I understand that Senator Shaheen is on the way. So I am
    going to ask you some additional questions until she gets here
    to give her an opportunity to ask you.
        Secretary McGinn, can you talk to me about the P-371
    utility improvements project at the Portsmouth Naval Shipyard?
    You have listed that as an important project for the Navy for
    2017, including utilities for nuclear facilities at the
    shipyard, and how that fits into some of our efforts there.
    There have been a lot of energy efficiency efforts at the
    shipyard, which I am glad that the Navy continues to support.
        Mr. McGinn. About a year and a half ago, we began an in-
    depth analysis of Portsmouth Naval Shipyard to determine the
    state of health, if you will, of the power utilities. As a
    result of that work, that analysis, we have identified exactly
    where the best use of dollars are for that project so that, as
    you know, anytime you have an outage, it has a lot of
    compounding costs when you stop critical operations in the
    shipyard and it delays the completion of a lot of key work. So
    that project is intended to increase the reliability, the
    resilience, if you will, of the shipyard, and to primarily
    eliminate the potential for mechanical failures, but will have
    other attributes as well to make it more robust in the face of
    any storm or other type of natural phenomenon.
        Senator Ayotte. Well, we really appreciate your including
    that in the 2017 request, and I think it is a really important
    priority to our prior discussion here about resiliency. It is
    very critical, obviously, at all of our facilities, especially
    the shipyard.
        Mr. McGinn. As you know, we love the productivity of
    Portsmouth and getting those boats in and out on time or
    earlier at or below or cost. We want to make sure that
    continues.
        Senator Ayotte. Well, we appreciate it, Secretary McGinn.
    When we can do some of these upgrades to our military
    construction, it makes it more efficient for our shipyard
    workers. I mean, we are so proud of them. They are phenomenal.
    They have been producing, as you know, even setting records
    when it comes to the work that they are doing in getting our
    attack submarine fleet back out in operation. So thank you.
        Mr. McGinn. That is great. Thank you.
        Senator Ayotte. I appreciate it.
        With that, Senator Shaheen is now here. So I want to turn
    it over to her.
        Senator Shaheen. Well, thank you, Senator Ayotte, both for
    holding this hearing and for keeping it open long enough so I
    could get here. I am a little late, I have to admit, because
    Bono was testifying before the Appropriations Subcommittee on
    Defense Operations.
        [Laughter.]
        Senator Shaheen. So I had to go there first.
        But I certainly want to thank you all very much for what
    you are doing to focus on energy and energy use within our
    military. I think one of the really unknown secrets that people
    do not appreciate is just how advanced the military in this
    country is on addressing energy issues that we have. You all
    know more directly than anybody else the threat to our national
    security from too much dependence on overseas fuels, and so
    your work is really critical to our security efforts. I just
    want to start by thanking all of you for that.
        Also, I want to thank you, Secretary Ballentine, for all of
    the support from the Air Force in dealing with the Haven well
    at Pease. I know Senator Ayotte has already addressed that and
    you have talked about that, but I want to add my appreciation
    for what the Air Force has committed to do and what you are
    working on. The community is very appreciative. So thank you
    very much.
        I want to start, I guess, with you, Secretary McGinn,
    because one of the things that I understand has been successful
    in helping address efficiency has been the hybrid electric
    drives [HEDs]. As it has been explained to me, it is kind of
    like a Prius because it enables a warship to conduct anti-
    pirate patrols for longer periods. I do understand that there
    is a question about whether this is something that the Navy is
    going to continue to do in future years in our defense program.
    I just wondered if you could talk about that and what the Navy
    is thinking about with respect to HEDs.
        Mr. McGinn. We have in this budget and in the future years
    defense plan a start with two retrofits of our Arleigh Burke
    destroyers to hybrid electric drive which, as you point out,
    increases their on-station time and their loiter time,
    especially important in missions like ballistic missile defense
    and Tomahawk strike boxes. It allows them to stay there longer
    and be effective and not have to go alongside the oiler as
    frequently.
        The plan in the FYDP [Future Years Defense Plan] calls for
    a 4-year, beginning in 2018, and it is our intention to keep
    that drumbeat going in the future.
        There are always a lot of competing requirements within a
    particular program element, the Arleigh Burke destroyers. There
    is a balance between how much you want to do in the way of
    weapon systems and sensors and all that compared to the hull
    mechanical electric that hybrid drive would come under. But we
    intend to recognize not just the mission effectiveness, but the
    lifecycle cost savings over the 30- or 40-year life of an
    Arleigh Burke destroyer that hybrid electric drive brings.
        Senator Shaheen. Thank you. I appreciate that that is going
    to continue. So that is good to hear.
        Secretary Hammack, the New Hampshire National Guard ranks
    51 out of 54 in terms of the condition of our facilities and
    armories. I do not know if Senator Ayotte has addressed this
    already. I assume we are both on the same path in terms of some
    of these New Hampshire issues. But I do want to say how pleased
    I was that this year's budget request includes two MILCON
    projects in New Hampshire. I wonder if you could talk about how
    the future efforts to address these kinds of shortfalls, not
    only in New Hampshire but around the country, would be affected
    by a return of sequestration to the budgeting process.
        Ms. Hammack. Sequestration has severely cut our budgets,
    and this year's budget is 18 percent below last year's and 60
    percent below fiscal year 2013. We are taking risk. We have a
    tremendous backlog across Active Duty, Army National Guard,
    Army Reserve. The total force has a huge backlog. The fact that
    we only put forward about 31 projects for authorization out of
    hundreds that are backlogged. If you say five per state and
    then five per major base, you are getting into somewhere around
    700 to 800 that are backlogged across the United States.
    Sequestration has caused us to take risk in military
    construction.
        We know that we are building facilities to last for 50
    years. Yet, we are funding replacement of facilities at well
    over 100 years? life. That equation just simply does not work.
    The effects of sequestration are felt the hardest in the
    installation community. I think that holds true across the
    services.
        Senator Shaheen. What does that mean for readiness? For
    example, we just welcomed home about 350 members of our Guard
    who had been in the Middle East, and they had a number of
    accolades that they had achieved while over there because of
    what a great job they did. But what does having these kinds of
    outdated facilities to train with--what does that do to our
    readiness?
        Ms. Hammack. I have got to tell you I actually visited them
    over there, and they gave me a little bottle of maple syrup. I
    said, serious, guys, you brought this over with you? They did.
    Little bottles of maple syrup. They said it is a little taste
    of home.
        Senator Ayotte. Are they not awesome?
        Ms. Hammack. They are awesome.
        But they needed military construction in theater, and they
    were in tents that were not in the best condition, yet they
    were still doing a great job.
        Unfortunately, sequestration is affecting us across the
    board, and we are not doing what we know we should do in
    installations. The risk, though, in underfunding installations
    and military construction is not loss of life or limb. The risk
    in underfunding manning and the risk in underfunding training
    and the risk in underfunding equipment is loss of life or limb.
    When you underfund installations, there is risk, but it is a
    mitigatable risk. The longer, though, that you underfund, that
    risk gets greater and greater. We are getting to that point,
    having seen the last 5 years of underfunding installations and
    military construction, that that backlog is getting to a
    breaking point. I think the National Guard and their Readiness
    Center Transformation Master Plan really identified the risks
    that the National Guard is seeing.
        Senator Shaheen. Thank you for that, and I certainly agree.
    So hopefully we will--and I know this subcommittee and the
    entire Senate Armed Services Committee is committed to trying
    to roll back those cuts from sequestration because we
    appreciate the impact that it is having.
        I am out of time, but hopefully the chair will let me
    continue.
        I just want to ask one final question. Mr. Potochney, am I
    pronouncing that correctly?
        Mr. Potochney. Yes, ma'am.
        Senator Shaheen. The budget request includes $113.6 million
    from MILCON-related activities that are associated with the
    European Reassurance Initiative [ERI]. I have just come back
    from a trip to Europe where I met with some elected officials
    from the Baltics, from Eastern Europe who were very
    appreciative of the increased support for the ERI in the
    President's budget. So can you talk a little bit about what
    projects that this funding will support and how those projects
    improve the capabilities of our forces in Europe?
        Mr. Potochney. I can do so in general terms. They enhance
    our capabilities and our presence and our reassurance for our
    allies. In that regard, they allow us to carry out the--to
    conduct or to maintain the capabilities that we need. We can go
    through--and I can get you for the record--each one of the
    projects and what it is specifically going to do if that would
    help. I would be happy to do that.
        Senator Shaheen. I would very much appreciate that.
        [The information referred to follows:]

        The Department's European Reassurance Initiative (ERI) military
    construction request funds 20 projects, as well as planning and design
    funding at various locations throughout Eastern Europe. The fiscal year
    2017 ERI projects will enhance prepositioning of U.S. combat equipment
    and provide support infrastructure improvements to training sites and
    increase range capabilities. ERI projects will also improve airfield
    infrastructure across the European theater to provide increased
    dispersal options, an increased level of fixed-wing fighter operations,
    as well as additional mobility capabilities. The airfield support
    facility improvements are necessary to make fighter and air mobility
    operations less dependent on weather and optimize training and
    operations.

        Senator Shaheen. I will point out I think I heard you say
    that these are critical to us as well as our European allies--
    --
        Mr. Potochney. Yes, ma'am.
        Senator Shaheen.--which I think is an important piece of
    the consideration there because as we look at the challenge
    that we are facing on the eastern front of Europe from Russia,
    it is very important that we are working in conjunction with
    our European allies.
        Mr. Potochney. Yes, ma'am.
        Senator Shaheen. Thank you.
        Thank you very much, Madam Chairman.
        Senator Ayotte. Thank you, Senator Shaheen.
        This concludes the hearing, and I want to thank all of our
    witnesses for your service and your testimony today.
        [Whereupon, at 3:53 p.m., the hearing was adjourned.]

        [Questions for the record with answers supplied follow:]

                  Questions Submitted by Senator Kelly Ayotte
               department of defense new hampshire cleanup sites
        Senator Ayotte. Mr. Potochney: In your witness statement you noted
    that ``84 percent of our 39,000 sites have reached Response Complete.''
        My staff requested an update on Department of Defense cleanup
    projects in New Hampshire. Your staff provided a list of 32 cleanup
    sites in New Hampshire.

        1. What percentage of the cleanup sites in New Hampshire are
    `response complete'?
        Mr. Potochney. Through the end of fiscal year 2015, the Department
    of Defense has achieved response complete at 83 percent of the cleanup
    sites in New Hampshire.

        2. Senator Ayotte. What is your plan to get the rest of these New
    Hampshire sites complete as soon as possible?
        Mr. Potochney. Through the end of fiscal year (FY) 2015, we have
    completed cleanup at 83 percent of our sites in New Hampshire, and we
    are working hard to finish the remaining sites as quickly as possible.
    We expect to complete cleanup at 27 of the remaining 32 sites by the
    end of fiscal year 2020, at which point 97 percent of the sites in New
    Hampshire will be at response complete. We are studying the five sites
    we will not complete by fiscal year 2020 to characterize them and
    develop appropriate cleanup strategies.
                 long range discrimination radar system complex
        Senator Ayotte. Mr. Potochney: In your written statement you
    mentioned the fiscal year 2017 budget request for Phase 1 of the Long
    Range Discrimination Radar System Complex in Alaska.

        3. Mr. Potochney and Secretary Ballentine: Can you provide an
    overview of this requested project and discuss what would specifically
    occur in Phase 1?
        Mr. Potochney. and Ms. Ballentine. The Long Range Discrimination
    Radar (LRDR) is the new midcourse tracking radar that will provide
    persistent coverage and improve discrimination capabilities against
    long range ballistic missile threats to the homeland from the Pacific
    theater. Discrimination capability is the missile defense function that
    distinguishes between lethal and non-lethal objects in the threat
    missile cluster. LRDR will also provide larger hit assessment coverage
    enabling improved warfighting capability to manage Ground Based
    Interceptor inventory by enabling the Ballistic Missile Defense System
    to implement an improved post-intercept assessment capability.
        The LRDR will be built in 2 phases: Phase 1 includes construction
    of a Missile Defense Radar System Complex and will construct a System
    Security Level-A secure boundary with an entry control facility, the
    mission control facility, the radar foundation, site infrastructure and
    security, along with the necessary utilities to provide initial
    operations of the radar. Phase 2, programmed for fiscal year 2019, will
    construct a HEMP shielded power plant.

        4. Senator Ayotte. Secretary Ballentine: In light of the growing
    ballistic missile threat from North Korea, what missile defense
    capabilities would this project provide?
        Mr. Potochney. The Long Range Discrimination Radar (LRDR) is the
    new midcourse tracking radar that will provide persistent coverage and
    improve discrimination capabilities against long range ballistic
    missile threats to the homeland from the Pacific theater.
    Discrimination capability is the missile defense function that
    distinguishes between lethal and non-lethal objects in the threat
    missile cluster. LRDR will also provide larger hit assessment coverage
    enabling improved warfighting capability to manage Ground Based
    Interceptor inventory by enabling the Ballistic Missile Defense System
    to implement an improved post-intercept assessment capability.
              quality dod school facilities for military families
        Senator Ayotte. Mr. Potochney: You mention in your written
    statement that your military construction budget continues the
    Department's 10 year plan to ``replace and recapitalize more than half
    of the [DOD] schools.''

        5. Can you please provide an update on the effort to provide our
    military families the quality school facilities for their children that
    they deserve?
        Mr. Potochney. The Department of Defense Education Activity (DODEA)
    goal is to have all 173 school facilities in a Good or Fair (Q1 or Q2)
    condition by fiscal year 2024 as defined by its recapitalization plan.
    The 10 year plan objective was delayed by three years to address
    additional analysis required to accommodate decreasing force structure,
    completion of the European Infrastructure Consolidation review, and to
    address site challenges at several overseas locations. Since receiving
    initial recapitalization funds in 2011, DODEA has completed
    renovations, additions, or replacement of 12 schools. DODEA also has 83
    school projects in planning and design, or currently in construction
    and is on track to meet the 2024 plan goal.
            public shipyard dry-dock construction and modernization
        6. Senator Ayotte. Secretary McGinn: How important are the dry-
    docks at our public shipyards to the Navy and our nation?

        My understanding is that naval shipyard dry-dock capacity is
    substantially inadequate to serve the future life-cycle depot-level
    maintenance needs of the U.S. Navy fleet. This means that significant
    investment in dry-dock facilities at our four public shipyards is
    necessary. I understand that more than $2.3 billion is needed in dry-
    dock construction and modernization might be needed at the four public
    shipyards.
        Mr. McGinn. Importance to Navy: The ability of the public shipyards
    to fulfill their mission of depot-level nuclear ship maintenance is
    highly dependent on the condition of dry docks along with related
    facilities, including piers, nuclear facilities, production shops, and
    utilities. Without dry docks, depot-level submarine, aircraft carrier,
    and ship maintenance cannot be accomplished.
        Importance to the nation: The execution of submarine, aircraft
    carrier, and ship depot-level maintenance is essential to national
    defense, and the continued availability of dry dock capacity is
    essential to ensure an effective and timely response for mobilization,
    national defense contingency situations, and other emergency
    requirements.

        7. Senator Ayotte. Secretary McGinn: Can you specifically describe
    the need for dry-dock construction and modernization at each of the
    public shipyards?
        Mr. McGinn. Naval shipyard dry dock concerns are being driven by
    the following:

        1.  New ship characteristics render some dry docks obsolete.
        2.  Unprecedented Inactivation and Reactor Compartment Disposal
    workload (SSN 688 Class and CVN 65 and 68 Class) over the next three
    decades.
        3.  Environmental vulnerabilities (seismic and flooding) have the
    potential to cause loss of critical facilities.
        4.  All dry docks require periodic maintenance and repair to
    maintain certification.

        Summary by shipyard:

          Puget Sound Naval Shipyard and Intermediate Maintenance
    Facility (PSNS & IMF)
          o  Requires investment to increase the physical capacity of a dry
    dock to support CVN 78 Class.
          o  Requires dry dock electrical and salt-water cooling utility
    upgrades to accommodate new systems.
          o  Requires mitigation for existing dry dock seismic
    vulnerabilities.
          Norfolk Naval Shipyard (NNSY)
          o  Requires upgrades to dry dock salt-water cooling utility to
    accommodate CVN 78 Class. Electrical utility upgrades are underway.
          o  Requires investment to mitigate dry dock flooding risks during
    extreme weather events.
          Portsmouth Naval Shipyard (PNSY)
          o  Requires investment to increase the physical capacity of a dry
    dock to support Virginia-class Submarines with Virginia Payload Module.
          Pearl Harbor Naval Shipyard and Intermediate Maintenance
    Facility (PHNSY & IMF)
          o  Requires investment to increase the physical capacity of a dry
    dock to support Virginia-class Submarines with Virginia Payload Module.

        The estimated costs are pending the completion of the ongoing Dry
    Dock Modernization study. Cost estimates are impacted by pre-
    construction site studies, such as National Environmental Policy Act
    requirements, class maintenance plan changes, workload forecasting
    between public and private shipyards, and improved depot maintenance
    performance.

        8. Senator Ayotte. Secretary McGinn: How does the Navy plan to
    resource this requirement without crowding out other required military
    construction projects?
        Mr. McGinn. The Naval Sea Systems Command Dry Dock Modernization
    study is not yet complete, and the Navy is still in the process of
    evaluating all available courses of action to ensure Naval Shipyards
    maintain mission capability. The options being considered include
    modifying dry docks to increase capacity, using floating dry docks, and
    upgrading dry dock utility systems to make them CVN 78 capable.
                 new constructions reflect the future workforce
        9. Senator Ayotte. Secretary McGinn: As the Navy conducts new
    construction and major renovations, in terms of bathrooms and locker
    rooms, what assumptions are made regarding the ratio of men and women?
        Mr. McGinn. The building user determines the actual number and
    gender of personnel whom will occupy the building. During the building
    design phase, bathroom and locker room capacity/ configuration is
    determined based on the number and gender of the buildings occupants.
    Specific plumbing fixture allowances are then determined in accordance
    with DOD Unified Facilities Criteria.

        10. Senator Ayotte. Secretary McGinn: Do these assumptions reflect
    the current or anticipated demographics during the life of the
    building?
        Mr. McGinn. It reflects the current building occupancy. As the
    building is repurposed throughout the life cycle, bathroom and locker
    room capacity/configuration and the associated fixtures are determined
    based on the proposed new facility user group.
                        integrated lodging pilot program
        Senator Ayotte. Secretary McGinn: On January 27, I wrote to Admiral
    Dixon Smith about the conditions at the Navy Gateway Inns and Suites in
    Norfolk at Scott Center Annex that many of my constituents have had to
    endure while conducting TDY.
        Some of my constituents, preparing to conduct maintenance on
    nuclear-powered submarines the next day, had to sleep in their cars due
    to elevated temperatures.
        I appreciate that Admiral Smith took the time to visit the
    facility. However, I am concerned that he is saying the temperature
    problem in the rooms will not be addressed until 2018, and that is too
    long for my constituents to wait.

        11. As we enter the summer months, what can we do to expedite a
    necessary solution to the temperature problems in the rooms there?
        Mr. McGinn. The Navy Gateway Inns and Suites (NGIS) at Scott Center
    Annex, Norfolk, is currently on a system that provides both heat and
    Air Conditioning (AC) to the room. The current two-pipe system
    configuration is unable to run both heat and AC simultaneously. The
    change of season's transition date, from heat to AC in the spring and
    back to heat in the fall, varies by year and is normally based on
    outside ambient temperatures. It is during this transition period that
    issues with room temperatures (too hot or too cold) are most likely to
    occur. Currently as we enter the summer months, the system is set to
    keep room temperature at 72 degrees when the AC is on. The planned
    fiscal year 2018 upgrade to the system will allow for both heat and AC
    to run simultaneously, eliminating the twice--a-year transition period.
    If an NGIS is unable to maintain comfortable room temperatures, patrons
    will be offered the opportunity to move to a different room, another
    NGIS, other military lodging facility or off-base lodging facilities up
    to the full per diem rate.

        12. Senator Ayotte. If this problem cannot be fixed sooner, will
    the Navy permit my constituents to stay elsewhere-providing them full
    reimbursement?
        Mr. McGinn. The Navy is committed to providing comfortable
    accommodations for all our guests at Navy Gateway Inns & Suites (NGIS)
    facilities. If an NGIS is unable to maintain comfortable room
    temperatures, patrons will be offered the opportunity to move to a
    different room, another NGIS, , other military lodging facility or off-
    base lodging facilities up to the full per diem rate.
                            10 u.s. code Sec.  2476
        Senator Ayotte. When 10 U.S. Code Sec.  2476 was revised to
    increase the minimum funding level to 6 percent of total revenue of the
    military depot, ``sustainment activities pertaining to maintenance''
    were specifically excluded from the calculation. It appears that DOD is
    continuing to determine the funds available for both investment and
    sustainment in its military depots using the 6 percent rule even though
    the Statute specifically excludes funds spent for sustainment from the
    calculation.

        13. Secretary McGinn: It is my understanding that Department of
    Navy is now adding investment and sustainment requirements related to
    utility systems into the 6 percent calculation. Is this correct?
        Mr. McGinn. The DON does not include funds spent for sustainment in
    its calculation to meet the 6 percent minimum capital investment for
    certain depots per 10 USC Sec.  2476. More specifically, the DON does
    not include funds spent for sustainment related to utility systems.
                            delayed milcon projects
        Senator Ayotte. All witnesses: The budget for military construction
    is over $1 billion short of what it was projected to be this year in
    last year's future year defense program (FYDP).

        14. How many military construction projects that you had planned to
    request for fiscal year 2017 have been deferred as a result of budget
    shortfalls?
        Mr. Potochney. For completeness, attached is the list of all
    military construction projects that have been either added to and
    removed from the fiscal year 2017 Military Construction program. Please
    see Appendix A for Milcon Projects.
        Ms. Hammack. As a result of shortfalls due to fiscal constraints
    under current law budget caps, the Army deferred 10 planned projects
    valued at $286 million from its fiscal year 2017 Military Construction
    Program. Of the 10 projects, four are Military Construction, Army;
    three are Army National Guard; two are Army Family Housing
    Construction; and one is Army Reserve.
        Mr. McGinn. The Department of Navy's fiscal year 2017 budget
    request deferred 36 projects (totaling $940 million programmed) which
    were previously programmed for fiscal year 2017 in the Fiscal Year 2016
    Future Years Defense Program (FYDP). Of these, 18 projects were delayed
    in order to meet budget controls and 18 were replaced with higher
    priority requirements.
        Ms. Ballentine. From the Total Force perspective, the Air Force
    deferred 31 military construction projects (10 Active Duty, 10 Air
    Force Reserve and 11 Air National Guard) as a result of budget
    shortfalls. The complete list is identified below.
                air force kc-46a fuselage trainer milcon request
        Senator Ayotte. Secretary Ballentine: As you note in your prepared
    statement, to support the arrival of the KC-46A at Pease, the Air
    Force's Fiscal Year 2017 budget proposal includes a $1.5 million
    military construction request to install a KC-46A fuselage trainer.

        15. Can you explain why this MILCON project is important?
        Ms. Ballentine. The project is a vital part of the beddown of the
    KC-46A at Pease. It is necessary for full operational capability of the
    KC-46A mission and will ensure uninterrupted and cost effective
    training of personnel supporting home station and COCOM taskings. The
    KC-46A is a new aircraft acquisition replacing the KC-135. Additional
    part-task training equipment items are required that did not exist for
    the KC-135 mission. Existing facilities are not adequately configured
    for the new training components and must be converted for the new
    function. If not provided, aircrews will require travel to other
    installations to conduct training. The lack of adequate training
    facilities increase the potential for significant degradation of
    mission readiness and performance. There are no other facilities or
    cost-effective workarounds available to accommodate this requirement to
    support the new mission. Without this facility, the Air Force will
    incur costs to store and/or re-direct the fuselage trainer equipment.
                                  south korea
        Senator Ayotte. Mr. Potochney: The administration is requesting
    that we authorize significant funds for host nation in-kind
    contributions on the Korean peninsula as part of the shift away from
    Seoul.

        16. What are the additional elements that we can expect to see in
    the future to complete this effort, and how much of that will rely upon
    U.S. taxpayer funds vs. host nation contributions?
        Mr. Potochney. As required under section 2803 of the National
    Defense Authorization Act for Fiscal Year 2015, the Department of
    Defense has requested the authorization of $684.1 million of in-kind
    contribution construction projects to be accepted from the Republic of
    Korea (ROK) under the U.S.-ROK Special Measures Agreement (SMA). The
    SMA specifies cost sharing contributions the ROK makes toward the costs
    of stationing U.S. forces on its territory.
        The $684.1 million of in-kind contribution projects support the
    military construction requirements of U.S. Forces in Korea to include
    U.S. construction obligations under the Land Partnership Plan. The Land
    Partnership Plan is one component of the U.S. Forces Korea Relocation
    Program, where the relocation program--composed of the Land Partnership
    Plan and Yongsan Relocation Plan--move the majority of U.S. Forces
    located in the city of Seoul and north of Seoul to areas in the
    southern half of the ROK.
        Most U.S. construction obligations under the Land Partnership Plan
    have already been met, being resourced for the most part with ROK
    construction contributions accepted by the U.S. under the SMA. Future
    Land Partnership Plan projects that will be resourced with ROK in-kind
    construction contributions include a brigade headquarters facility,
    site development, and a school.
                   impact of budget on environmental cleanup
        17. Senator Ayotte. All Witnesses: How have budget challenges
    limited your ability to meet environmental compliance, conservation,
    and cleanup obligations?
        Mr. Potochney. Budget challenges have not limited DOD's ability to
    meet environmental compliance, conservation and cleanup obligations.
    DOD continues to fund its statutory and regulatory requirements. DOD's
    Fiscal Year 2017 President's Budget request for environmental programs
    was $3.4B, which is only a 2 percent reduction from the fiscal year
    2016 appropriations, and a less than 1 percent reduction from the
    fiscal year 2016 request. Budget constraints have caused relatively
    minor delays in the cleanup program. While these delays are not ideal
    for cost or efficiency of the overall program, none of the delays have
    impacted negotiated schedules for our National Priority List sites.
        Ms. Hammack. The Army's Fiscal Year (FY) 2017 Environmental Program
    budget request of $1.05 billion is a decrease of 6.25 percent from the
    $1.12 billion fiscal year 2016 appropriation, as a result of budget
    budget caps under current law. At this funding level, the Army will
    meet its current statutory requirements and commitments and maintain a
    sound compliance posture for air, water, and waste management. However,
    progress will slow toward meeting future goals. In addition, budget
    challenges result in risk being taken in Pollution Prevention,
    Environmental Technology, and Environmental Cleanup programs. Deferral
    of pollution prevention projects and environmental technology
    initiatives can be an ``opportunity lost'' to make Army environmental
    practices and programs more efficient and effective. The impact to the
    cleanup program will result in delays finalizing cleanup
    investigations, as well as deferring and extending the construction
    timeframes of some cleanup remedies. Deferring or delaying cleanup
    projects can also result in increased costs to complete projects and
    increased regulatory pressure and enforcement actions.
        Mr. McGinn. DON has met all legal agreements and requirements
    within the environmental compliance, conservation, and cleanup
    programs, despite the budget challenges over the past five years. We
    have prioritized our investments to meet these requirements with a key
    focus on protecting human health and the environment. Specifically
    within the cleanup program, these decreased budgets have resulted in
    lower priority sites being delayed to future years.
        Ms. Ballentine. The current fiscal environment has led the Air
    Force to reduce and defer some lower priority requirements in
    environmental compliance and conservation. For example, compliance
    education and training focuses on compliance mandated training while
    leaving very little professional development or awareness training.
    Budget reductions affect the conservation program by deferring lower
    priority historic and archeological asset surveys which are important
    but do not have specific completion deadlines. Although the Air Force
    has continued to manage natural/built infrastructure to reduce risks
    and mission impacts, while meeting all applicable legal and regulatory
    obligations, Executive Orders, and DOD/Air Force policies, long term
    budget reductions and funding deferments may impede our ability to
    manage these resources efficiently and effectively in the future.
    Budgetary challenges and a dynamic and evolving regulatory environment
    have strained the program by limiting our ability to address emerging
    contaminant challenges, but the Air Force is still focused on meeting
    its currently identified environmental compliance and cleanup
    obligations.
                            utilities privatization
        18. Senator Ayotte. All Witnesses: Can each of you provide a brief
    update on your service's activities related to utilities privatization?
        Mr. Potochney. The Department has privatized 585 systems under the
    authority of 10 U.S.C. Sec. 2688 as well as those privatized under
    separate authority including 10 U.S.C. Sec. 2671 as of January 1, 2016.
    These equate to: Army, 373; Navy, 58; and Air Force, 154.
        Ms. Hammack. The Army has privatized 151 systems at 62
    installations, representing 43 percent of its U.S. utility systems.
    These include 41 electric, 39 natural gas, 33 water, 35 wastewater, and
    3 heat/power systems. Another 107 system evaluations are scheduled or
    in progress for UP decisions through fiscal year 2023.
        Mr. McGinn. Department of the Navy (DON) has privatized ten percent
    of current utility systems that distribute electricity, natural gas,
    water, wastewater, or thermal energy. Of DON's 811 utility systems, 164
    systems are owned by others (built and maintained by entity other than
    U.S. Government or where overseas status agreements prevail). 64
    systems have been privatized, leaving 583 systems available to
    privatize.
        In late 2015, Navy executed a privatization contract for the Naval
    Air Station Key West waste water system (considered five waste water
    systems). Office of the Secretary of Defense (OSD) recently completed a
    post-conveyance survey and study that examined the ``pro et contra'' of
    systems that have been privatized. Navy sponsored a study that looked
    at alternative base management concepts including utilities
    privatization. Additionally, Navy is finalizing a facility/utility
    privatization study that evaluates the policies, statutory requirements
    and the cost-benefit analysis of privatized systems.
        The Navy acknowledges unique situations wherein divestiture of
    utility assets and establishment of utility service contracts are
    advantageous. The Navy fully intends to continue the Utilities
    Privatization program where economically feasible and in support of
    evolving resilient, cyber secure and energy efficient directives.
    Current Navy policy is to privatize utility systems when cost
    effective, where minimal energy security constraints exist and where
    there are limited regulatory constraints that might restrict
    transactions such as state regulations.
        Ms. Ballentine. Air Force continues to analyze and privatize
    utility systems where there are no precluding security impediments and
    a favorable economic business case supports conveyance of the
    infrastructure to a private owner. However, as a result of budget
    constraints in recent appropriation years, the Air Force temporarily
    paused initiating new analyses and issuing new requests for proposal.
    The pause has not affected the more than 60 systems that were under
    analysis or in solicitation at the time the pause was implemented. In
    order to ensure funding is available for solicitations that may result
    in awarding a contract, we do not anticipate lifting the pause until
    resources can be identified across the Future Year Defense Plan. If
    resources are identified and the pause is lifted, the Air Force will
    schedule more than 175 remaining systems for analysis and potential
    privatization.

        19. Senator Ayotte. All Witnesses: What benefits and challenges
    have you seen when it comes to utilities privatization?
        Mr. Potochney. The Department has found over many years of
    privatizing utilities that it provides greater resilience to our bases
    and benefits than originally predicted. Some of these benefits are: the
    provider often operates at higher standards, resulting in greater
    resilience and reliability through modernization of systems; reductions
    in emergency and service calls; and better trained resources. In
    addition, the Utilities owning the systems leverage all resources
    within their territories, allowing them to immediately address any life
    safety issues, outages, and implement preventive maintenance programs
    that sustain systems.
        The Military Services are also realizing commodity reductions, for
    example, the Army has reported an estimated 31 percent less gas use
    across their privatized utilities and 28 percent less water use after
    privatization. The Air Force is receiving similar commodity savings for
    their privatized systems.
        Utilities privatization also comes with unique challenges such as
    discrepancies in system inventory (between a proposed contract vs.
    post-privatization); funding for modification and planning for capital
    upgrades; and need for better metrics to manage long term success of
    privatization (i.e., service contracts can be executed up to 50 years).
        Ms. Hammack. The Utilities Privatization (UP) Program is the Army's
    preferred strategy to recapitalize and sustain utilities infrastructure
    by leveraging private financing and expertise to provide for more safe,
    efficient, and reliable mission support. A summary of life-cycle cost
    analysis for the UP portfolio shows a 28 percent cost avoidance ($2.1
    billion Net Present Value), as compared to the Army cost for similar
    upgrades, operations, and maintenance. We see additional, second order
    benefits to energy security and resilience. For water systems, metered
    data show dramatic leak reductions following privatization. When the
    combined benefits of operating cost reductions and commodity savings
    are compared to UP Program costs, the Army calculated a Benefit-to-Cost
    Ratio of 14.4 to 1 for the past three years. Additionally, UP
    investments are prudent insurance against potential infrastructure
    failures.
        Mr. McGinn.

    Benefits:
          Privatization can lead to improved reliability,
    resiliency, and energy savings for DOD utility systems
          Privatization allows for more predictable and regular
    capital budgeting for recapitalization and system improvements
          Privatization can reduce liability concerns for
    catastrophic or unforeseen conditions because privately owned systems
    are required to be insured vice Department of Defense (DOD) self-
    insurance

    Challenges:
          Privatization agreements create a ``must-pay'' bill for
    DOD commodity users, which can reduce flexibility in their budget
    execution (no ability to reduce sustainment funding in the future to
    meet emergent Service requirements)
          Successful privatization programs require additional
    overhead and costs, which are difficult to secure in the current
    constrained funding environment.
          Privatization contracts can take multiple years to
    execute, which adds overhead costs and takes staff away from
    operational requirements
          Some potential DOD systems are either in poor condition
    (due to lack of sustainment resources) or are nearing the end of their
    useful life. Private partners require DOD to provide up-front capital
    in order to achieve a sustainable system that can be insured and
    privatized. These privatization first-costs (capital improvements) are
    extraordinarily difficult for DOD Services to program in the current
    constrained funding environment. Additionally, these up-front costs
    usually impact DOD commodity rates, making them very difficult to
    implement. (If these DOD first-costs could be made without impacting
    rates or the budgetary scoring system, additional DOD systems may be
    more viable as privatization candidates.)

        Ms. Ballentine. The benefit of Utilities Privatization (UP) is that
    it restores systems to industry standard. A system at industry standard
    improves reliability, reduces commodity consumption, and the cost of
    system operation, maintenance, repair and recapitalization over the
    long term. Paradoxically, the most significant benefit is also the
    biggest challenge; maximizing reliability and resilience requires
    significant near-term investment to eliminate system deficiencies.
    Finding the resources in times of constrained budgets is challenging.
    Additionally, we have two other challenges; privatization of wastewater
    treatment plants (WWTPs) and a Department of Labor determination that
    Davis Bacon Act (DBA) applies to UP. Privatization of WWTPs is impacted
    as the Resource Conservation and Recovery Act's domestic sewage
    exclusion (DSE) would no longer apply to operations of the WWTP on an
    installation. This limits the range of competition because privately
    owned WWTPs would likely be regulated under different, and potentially
    more stringent, regulatory requirements. Lastly, DBA results in
    increased costs and oversight negatively impacting the business case
    for UP. We believe DBA rules do not apply to UP contracts awarded under
    FAR Part 41, Utility Services. We believe legislation could help
    mitigate these challenges.
                               stormwater impact
        Senator Ayotte. All Witnesses: I have heard reports of outdated
    drainage systems on some bases causing negative mission impacts.

        20. How big of a problem is outdated drainage systems for each
    service?
        Mr. Potochney. Even though our drainage systems may be old, we are
    not aware of any major issues throughout DOD. There may be areas on
    some installations where heavy precipitation can cause occasional
    flooding, but these are rarely chronic and mission impact is minimal
    and isolated to those times of severe weather. Chronic instances are
    addressed on a case by case basis.
        Ms. Hammack. Operating and maintaining our stormwater
    infrastructure does present some challenges, as many of the drainage
    systems use overland routes to collect the stormwater into natural
    streams and water retention basins. However, while the Army has some
    older stormwater collection and drainage systems, they do not pose a
    significant negative impact to Army mission capabilities. Although some
    drainage systems are not performing optimally or as designed, the Army
    has not seen any trend toward significant non-compliance with National
    Pollutant Discharge Elimination System (NPDES) permits for stormwater.
        Mr. McGinn. Outdated drainage systems are not a signifcant problem
    for the Navy. Generally issues only arise when extreme weather results
    in volumes of stormwater that exceed the design capacity of the system.
    Examples include major flooding to heavy rains at NSA Mid-South in 2010
    and storm surges at NAS Pensacola in 2013. Garnering more of Navy's
    concern is ensuring compliance with applicable environmental
    regulations for stormwater systems.
        Ms. Ballentine. There are no indications that there are systemic,
    Air Force-wide problems related to storm drainage. $30 million to $52
    million a year for the last three years were invested to sustain and
    modernize stormwater drainage systems across the enterprise. As the Air
    Force shifts toward centralized execution of projects the drainage
    requirements have been identified and executed at a higher rate as a
    part of the Asset Management business model. The Air Force will
    continue to monitor the capability and capacity of these systems in
    light of future risk factors such as system age and global warming.
    There is always a risk that larger than normal weather events could
    exceed the capacity at any particular installation, but there are no
    indications that Air Force missions are routinely at risk due to
    drainage systems.

        21. Senator Ayotte. What is your plan to address these outdated
    drainage systems?
        Mr. Potochney. Even though our drainage systems may be old, we are
    not aware of any major issues throughout DOD. There may be areas on
    some installations where heavy precipitation can cause occasional
    flooding, but these are rarely chronic and mission impact is minimal
    and isolated to those times of severe weather. If they become systemic,
    they will be addressed on a case-by-case basis.
        Ms. Hammack. Recapitalization of utility and drainage system
    infrastructure is included in each installation's capital investment
    plan. Where appropriate, the Army incorporates new or updated drainage
    strategies that maximize natural recharge and minimize run-off. Along
    with other utilities, existing stormwater infrastructure competes
    within the Army's limited resources. Consistent with OSD guidance,
    strategic and financial priority is placed on investments in
    communications, natural gas, electrical, water, wastewater, heating,
    and cooling systems. These other utilities provide mission-critical
    capabilities, carry valuable commodities, or pose more significant and
    direct risks to health, safety, and the environment, than does
    stormwater drainage. However, specific stormwater requirements
    stipulated under Clean Water Act / NPDES permits are given a priority
    and limited stormwater repairs are performed as required on a case-by-
    case basis. Army has considered stormwater systems in developing its
    schedule for Utilities Privatization (UP) evaluations.
        Mr. McGinn. Outdated drainage systems are not a significant problem
    for the Navy, but are identified through specialized structural
    inspections based on system criticality; projects to address drainage
    issues are subsequently developed, prioritized, and compete for
    available funding. Drainage systems not meeting design requirements or
    are in failing condition that result in mission impacts or
    environmental regulation violations would receive higher priority than
    other drainage issues. Substandard drainage systems may be replaced or
    upgraded as part of MILCON projects, or repaired through O&M,N funded
    projects.
        Ms. Ballentine. The Air Force uses a risk based model to determine
    investment in the infrastructure portfolio. Storm water and drainage
    projects compete against all infrastructure repair, maintenance and
    sustainment requirements in the Air Force. Installations have
    identified potential projects to repair, sustain and maintain storm
    water systems and drainage. There are 21 drainage and/or storm water
    projects valued at $30.6 million planned to take place at 16 bases in
    fiscal year 2016. In fiscal year 2017, there are 23 projects worth
    $51.6 million programmed to be executed at 16 bases. After fiscal year
    2017, there will still be 57 requirements worth $51.9 million at 28
    bases that will need to be completed in the following years. The Air
    Force is taking a proactive approach to address the current condition
    of drainage systems in order to address its readiness and mission
    support.

        22. Senator Ayotte. Referring to section 2813 of the Fiscal Year
    2016 NDAA, is OSD or your service aware that the fiscal year 2016 NDAA
    explanatory text explicitly stated, ``We note that there has been
    confusion about whether the definition of a utility system for the
    treatment of wastewater includes the treatment of stormwater. We
    believe, consistent with the Department of Defense's interpretation,
    that wastewater includes stormwater.''?
        Mr. Potochney. Even though stormwater is not covered explicitly in
    the definition of ``utility system'' in 10 U.S.C. Sec. 2688(i), the
    Department agrees with the option to include conveyance of stormwater
    treatment on a case-by-case basis where it makes economic sense.
    Currently the DOD is drafting language to include further clarification
    on current internal guidance.
        Ms. Hammack. Yes, the Army is aware of the fiscal year 2016 NDAA
    explanatory text stating that the definition of a utility system for
    the treatment of wastewater includes the treatment of stormwater.
        Mr. McGinn. Yes, Navy is aware of this 2016 NDAA text.
        Ms. Ballentine. The Air Force is aware of the fiscal year 2016 NDAA
    explanatory text stating that the definition of a utility system for
    the treatment of wastewater includes the treatment of stormwater.
    However, stormwater is not included in the definition of ``utility
    system'' in 10 U.S.C. Sec. 2688(i). The Air Force believes explanatory
    text provides guidance, but the language in the statute provides the
    basis for compliance policy. At this time we are unaware of any OSD
    interpretation on the treatment of stormwater as explained in the
    NDAA's explanatory text. The Air Force canvassed the Army, Navy, and
    Department of Defense on this question and are unaware of any
    countervailing opinions.
                                   __________
                 Questions Submitted by Senator Mazie K. Hirono
                    installation energy resilience planning
        23. Senator Hirono. Secretary Hammack and Mr. Potochney, I commend
    the Army for expanding its use of renewable energy, including the
    upcoming biofuel-capable generation plant at Schofield Barracks in
    Hawaii. Last year, I introduced the DOD Energy Security Act, which
    would require the DOD to plan for integrating on-site power generation,
    energy storage, and micro-grid technologies to enhance energy security
    at critical military installations. What plans do the Army and the rest
    of the Department of Defense have to enhance energy resilience at
    critical installations?
        Mr. Potochney. It is Department of Defense policy that DOD
    Components shall take necessary steps to ensure energy resilience on
    military installations. DOD Components are required to plan for and
    have the capability to ensure available, reliable, and quality power to
    continuously accomplish DOD missions from military installations and
    facilities. This includes aligning energy requirements to critical DOD
    missions, appropriately sizing energy generation systems; and
    maintaining, fueling, and testing energy generation systems and
    infrastructure. DOD Components are also required to perform periodic
    vulnerability assessments and audits to assess the risk of energy
    disruptions on military installations, and implement remedial actions
    to remove unacceptable energy resilience risks.
        Ms. Hammack. It is Department of Defense policy that DOD Components
    shall take necessary steps to ensure energy resilience on military
    installations. DOD Components are required to plan for and have the
    capability to ensure available, reliable, and quality power to
    continuously accomplish DOD missions from military installations and
    facilities. This includes aligning energy requirements to critical DOD
    missions; appropriately sizing energy generation systems; and
    maintaining, fueling, and testing energy generation systems and
    infrastructure. DOD Components are also required to perform periodic
    vulnerability assessments and audits to assess the risk of energy
    disruptions on military installations, and to implement remedial
    actions to remove unacceptable energy resilience risks.
        The Army's large-scale renewable energy portfolio includes 14
    projects throughout the United States, totaling approximately 350 MW
    and over $880 million in capital investments. The 50 MW multifuel-
    capable power generation plant under development at Schofield Barracks
    in Hawaii is evidence of Army efforts to enhance energy resilience at a
    critical installation. Other large-scale renewable energy projects
    located on installations in Arizona, Georgia, Maryland, New York,
    Texas, and Alabama further demonstrate the Army's efforts to enhance
    energy resilience at critical installations.

        24. Senator Hirono. Secretary Hammack and Mr. Potochney, how can
    renewable sources of power such as solar and wind provide utility
    resiliency?
        Mr. Potochney. Energy resilience solutions are not limited to
    traditional standby or emergency generators and can include integrated
    and distributed renewable energy generation sources. Renewable energy
    can provide on-site generation independent from the local grid and
    improve the energy resilience of military installations. Specifically,
    renewable energy systems, when installed with the necessary inverter
    hardware and coupled with battery storage or other forms of on-site,
    distributed energy generation, can provide continuous power to a
    military installation in the event of an energy disruption. This
    redundant, secure and reliable power from renewable generation can
    significantly reduce the consequences of blackouts or other power
    disruption events and helps to enable the DOD to continue to carry out
    its mission.
        Ms. Hammack. Energy resilience solutions are not limited to
    traditional standby or emergency generators and can include integrated
    and distributed renewable energy generation sources. Renewable energy
    can provide on-site generation independent from the local grid, and
    thereby improve the energy resilience of military installations.
    Specifically, renewable energy systems, when installed with the
    necessary inverter hardware and coupled with battery storage or other
    forms of on-site distributed energy generation, can provide continuous
    power to a military installation in the event of an energy disruption.
    This redundant, secure and reliable power from renewable generation can
    significantly reduce the consequences of blackouts or other power
    disruption events, and helps to enable the DOD to continue to carry out
    its mission.

        25. Senator Hirono. Secretary Hammack and Mr. Potochney, to what
    extent, if any, have you achieved the ability to continue to operate
    our installations in the event of a grid disruption?
        Mr. Potochney. It is Department of Defense policy that DOD
    Components shall take necessary steps to ensure energy resilience on
    military installations. DOD Components are required to plan for and
    have the capability to ensure available, reliable, and quality power to
    continuously accomplish essential DOD missions from military
    installations and facilities. This includes aligning energy
    requirements to critical DOD missions, appropriately sizing energy
    generation systems, and maintaining, fueling, and testing energy
    generation systems and infrastructure. DOD Components are also required
    to perform periodic vulnerability assessments and audits to assess the
    risk of energy disruptions on military installations, and implement
    remedial actions to remove unacceptable energy resilience risks. DOD
    components are fully in compliance with DOD policy and every military
    installation currently has backup generators to operate our essential
    missions in the event of a grid disruption.
        The DOD also has an on-going study that will establish a potential
    framework to assess different energy resilience solutions on our
    military installations. The study's analysis can be utilized by the
    Department to ensure the implementation of cost-effective and reliable
    energy resilience solutions at military installations.
        Ms. Hammack. It is Department of Defense policy that DOD Components
    shall take necessary steps to ensure energy resilience on military
    installations. DOD Components are required to plan for and have the
    capability to ensure available, reliable, and quality power to
    continuously accomplish essential DOD missions from military
    installations and facilities. This includes aligning energy
    requirements to critical DOD missions, appropriately sizing energy
    generation systems, and maintaining, fueling, and testing energy
    generation systems and infrastructure. DOD Components are also required
    to perform periodic vulnerability assessments and audits to assess the
    risk of energy disruptions on military installations, and implement
    remedial actions to remove unacceptable energy resilience risks. The
    Components are fully in compliance with DOD policy, and every military
    installation currently has backup generators to operate our essential
    missions in the event of a grid disruption.
        The DOD also has an ongoing study that will establish a potential
    framework to assess different energy resilience solutions on our
    military installations. The study's analysis can be utilized by the
    Department to ensure the implementation of cost-effective and reliable
    energy resilience solutions at military installations.
        The Army has demonstrated the ability to continue full base
    operations, when disconnected from the power grid, at Fort Drum, NY. In
    September 2014, a contract was awarded to ReEnergy Black River LLC for
    the provisioning, production, purchase, and delivery of Fort Drum's on-
    site electricity requirements by a biomass generation facility. To test
    the system, Fort Drum was fully disconnected from the grid in November
    2015. The project performed as anticipated, providing the installation
    with 100 percent of its energy requirements.
                             veteran opportunities
        26. Senator Hirono. Mr. Potochney, I offered an amendment that was
    added to the pending energy bill to boost the involvement of veterans
    in a new energy workforce training pilot program. I would like to
    ensure that veterans are able to take advantage of the job
    opportunities associated with the rapidly expanding clean energy
    market, which a witness at a recent Energy and Natural Resource
    Committee hearing reminded us is a $300 billion global market annually.
    Do the services have a sufficient number of building managers trained
    in managing, energy efficiency, cybersecurity, smart meters, and other
    building technologies? If not, what are the services doing to attract
    and train veterans for building manager jobs?
        Mr. Potochney. The Military Services review all workforce
    requirements (i.e. number of personnel, required experience and
    training) to support their infrastructure, to include building managers
    trained in managing energy, cybersecurity, smart meters, and other
    building technologies. Currently there are veterans in various jobs
    such as energy managers and building managers. Even though we are not
    aware of any programs that specifically target veterans for building
    manager jobs, all energy/cyber security billets are open to veterans.
    As with each vacancy, we will follow the veteran hiring policies which
    have been established, and evaluate each applicant and select the best
    person available for the position.

                                   APPENDIX A

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