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

                                                 S. Hrg. 114-658, Pt. 3




                               before the

                      COMMITTEE ON ARMED SERVICES
                          UNITED STATES SENATE


                             SECOND SESSION


                                S. 2943



                                 PART 3



                      MARCH 15; APRIL 5, 12, 2016


         Printed for the use of the Committee on Armed Services

                                                 S. Hrg. 114-658, Pt. 3




                               before the

                      COMMITTEE ON ARMED SERVICES
                          UNITED STATES SENATE


                             SECOND SESSION


                                S. 2943



                                 PART 3



                      MARCH 15; APRIL 5, 12, 2016


         Printed for the use of the Committee on Armed Services


        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

                           C O N T E N T S


                             March 15, 2016


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

Allyn, General Daniel B., USA, Vice Chief of Staff, United States     5
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

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




                        TUESDAY, MARCH 15, 2016

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

                          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.


    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 
    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.
    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.
    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 
    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 


    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.
    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 
    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 
    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 
    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 
    Senator Ayotte. Thank you, Senator Kaine. Appreciate your 
    I would like to call on, first, for testimony, General 
Daniel Allyn, the Vice Chief of Staff of the United States 

                       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
    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 
    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 
    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.
    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 
    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 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 
    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.
    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 
    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 
    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 
    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.
    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 
    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.


    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 
    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 
    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 
             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.
    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 
    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.
    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 

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


    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 
    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
    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 
    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 
    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 
    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 
    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.
    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 
    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 
    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.

    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 
    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 
    General Goldfein. Sir.
    Senator Kaine [presiding]. These issues do tie together 
    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 
    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 
    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 
    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 
    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 
    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 
    Senator Heinrich. Right.
    General Goldfein.--up to 80 percent, where we were sitting 
    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 
    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 
    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.
    Senator Ayotte. He came right after that?
    Senator Ernst. You have a good friend in General Allyn, 
    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 
    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 
    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 
    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 
    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 
    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 
    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 
    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, 
    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 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 
    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 
    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 
    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 
    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 
    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 
    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 

    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 
    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 
    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 
    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 

      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 
    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 
    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) 

    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 
    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 
    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 
    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 
    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 
    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 
    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 
    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 

    22. Senator Inhofe. All, can you comment on the current deployment 
to time at home ratio, retention, and the morale of each of your 
    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 
    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 
    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 
    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) 
    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 

    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 
    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 
    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 
    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
    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.
    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 
    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 
    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 
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.
    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.
    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 
    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 
    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 
    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 
    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.
    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.



                         TUESDAY, APRIL 5, 2016

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

                         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.


    Senator Ayotte. Good afternoon. This hearing of the 
Subcommittee on Readiness and Management Support will come to 
    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 
    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] 
    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 
    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 
    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 
    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 
    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?


    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 
    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 
    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 
    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.


    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 
    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.
    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 
    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.
    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 
    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 


    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 
    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 
    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, 
    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.
    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 
    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 
    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 
    Senator Hirono. Is that happening at all of our four 
    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 
    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 
    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 
    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 
    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 
    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 
    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 
    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 
    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 
    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 
    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 
    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.
    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
    1. Senator Ayotte. Admiral Hilarides and Admiral Smith: How 
important are the dry-docks at our public shipyards to the Navy and our 
    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 
    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 

    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 
    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 

    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 
                       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 

    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 
    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 
    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 
    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 
    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 

    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 
    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 
    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.



                        TUESDAY, APRIL 12, 2016

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


    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.


    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 
    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 
    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 
    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.
    Senator Ayotte. Senator Kaine for his opening statements. 
Thank you, Senator 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?
    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 
    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 
    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 
    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.


    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 
    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
    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 
    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 
    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 
    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 
    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%
    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 
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%
Family Housing Operations &       1,136        961      (175)      (15%)
Family Housing Improvement            0          3          3       100%
    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
    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 
            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 

      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 
    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 
    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 
      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 
    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
                                    Project        FY(s)       FY 2017
          Project title              total     Appropriated    request
                                  ($millions)   ($millions)  ($millions)
Upgrade Wastewater Treatment              139            71           68
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 
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 
    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 
    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 

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


    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 
    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
    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 
    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 
    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 
    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 
    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.
    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?


    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 
                    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
                         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 
      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 
    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 
    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 
    EPA-required central heating plant conversion-MCAS Cherry Point; 
    Range safety improvements at MCB Camp Lejeune.

Recapitalize and Replace Inadequate Facilities ($117 million, 4 
    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 
    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 
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 
    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 
                         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 
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 
    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
                           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 
    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 
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.
    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?

                     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 
    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 
    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 
    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.
    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)
    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 
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.
    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 
    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 
    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 
    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 
    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.
    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.
    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 
                           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 
                       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 
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 
    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.
    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 
    Ms. Ballentine. Yes. Thank you, ma'am. I appreciate the 
    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 
    [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 
    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 
    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 
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 
    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 
    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 
    Ms. Ballentine. We use the same parametric capacity 
analysis that we used early in the 2004 and in the prior BRAC 
    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 
    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 
    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 
    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 
    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 
    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 
    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 
      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.
    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 
    Senator Ayotte. Great. Thank you.
    Do any of the other services want to comment? Similar 
    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 
    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.
    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 
    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 
    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 
    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 
    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 
    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 

    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 
    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 

    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 
    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 
      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 

    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 
    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 
    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 

    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 
    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 

    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 
                        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 
    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 

    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 
    Mr. McGinn.

      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-

      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 
    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 
    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 

    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 
    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