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i 

88–455 2015

[H.A.S.C. No. 113–110] 

THE DEPARTMENT OF DEFENSE’S 

READINESS POSTURE 

HEARING 

BEFORE THE

SUBCOMMITTEE ON READINESS 

OF THE

COMMITTEE ON ARMED SERVICES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

HEARING HELD 

APRIL 10, 2014 
(II) 

SUBCOMMITTEE ON READINESS 

ROBERT J. WITTMAN, Virginia, Chairman 

ROB BISHOP, Utah 

VICKY HARTZLER, Missouri 

AUSTIN SCOTT, Georgia 

KRISTI L. NOEM, South Dakota 

J. RANDY FORBES, Virginia 

FRANK A. LOBIONDO, New Jersey 

MIKE ROGERS, Alabama 

DOUG LAMBORN, Colorado 

E. SCOTT RIGELL, Virginia 

STEVEN M. PALAZZO, Mississippi 

MADELEINE Z. BORDALLO, Guam 

JOE COURTNEY, Connecticut 

DAVID LOEBSACK, Iowa 

COLLEEN W. HANABUSA, Hawaii 

JACKIE SPEIER, California 

RON BARBER, Arizona 

CAROL SHEA-PORTER, New Hampshire 

WILLIAM L. ENYART, Illinois 

PETE P. GALLEGO, Texas 

JAMIE LYNCH, Professional Staff Member 

VICKIE PLUNKETT, Professional Staff Member 

NICHOLAS RODMAN, Clerk 
(III) 

C O N T E N T S 

CHRONOLOGICAL LIST OF HEARINGS 

2014 

Page 

HEARING: 

Thursday, April 10, 2014, The Department of Defense’s Readiness Posture ..... 1 

APPENDIX: 

Thursday, April 10, 2014 ........................................................................................ 39 

THURSDAY, APRIL 10, 2014 

THE DEPARTMENT OF DEFENSE’S READINESS POSTURE 

STATEMENTS PRESENTED BY MEMBERS OF CONGRESS 

Bordallo, Hon. Madeleine Z., a Delegate from Guam, Ranking Member, Subcommittee on Readiness ...................................................................................... 3 

Wittman, Hon. Robert J., a Representative from Virginia, Chairman, Subcommittee on Readiness ...................................................................................... 1 

WITNESSES 

Campbell, GEN John F., USA, Vice Chief of Staff, U.S. Army ........................... 4 

Ferguson, ADM Mark, USN, Vice Chief of Naval Operations, U.S. Navy .......... 6 

Paxton, Gen John M., Jr., USMC, Assistant Commandant, U.S. Marine 

Corps ..................................................................................................................... 7 

Spencer, Gen Larry O., USAF, Vice Chief of Staff, U.S. Air Force ..................... 9 

APPENDIX 

PREPARED STATEMENTS: 

Campbell, GEN John F. ................................................................................... 46 

Ferguson, ADM Mark ...................................................................................... 63 

Paxton, Gen John M., Jr. ................................................................................. 73 

Spencer, Gen Larry O. ..................................................................................... 93 

Wittman, Hon. Robert J. .................................................................................. 43 

DOCUMENTS SUBMITTED FOR THE RECORD: 

Statement of the American Legion ................................................................. 107 

Transmittal letter for Section 347 report on European Infrastructure 

Consolidation Initiative ................................................................................ 110 

WITNESS RESPONSES TO QUESTIONS ASKED DURING THE HEARING: 

Mr. Barber ......................................................................................................... 113 

Mrs. Noem ......................................................................................................... 113 

Mr. Palazzo ....................................................................................................... 113 

QUESTIONS SUBMITTED BY MEMBERS POST HEARING: 

Mr. Bishop ......................................................................................................... 149 

Ms. Bordallo ...................................................................................................... 142 

Mr. Wittman ..................................................................................................... 117 

(1) 

THE DEPARTMENT OF DEFENSE’S READINESS POSTURE 

HOUSE OF REPRESENTATIVES, COMMITTEE ON ARMED SERVICES, SUBCOMMITTEE ON READINESS, Washington, DC, Thursday, April 10, 2014. 

The subcommittee met, pursuant to call, at 8:02 a.m., in room 

2212, Rayburn House Office Building, Hon. Robert J. Wittman 

(chairman of the subcommittee) presiding. 

OPENING STATEMENT OF HON. ROBERT J. WITTMAN, A REPRESENTATIVE FROM VIRGINIA, CHAIRMAN, SUBCOMMITTEE 

ON READINESS 

Mr. WITTMAN. Good morning. I am going to call to order the Subcommittee on Readiness of the House Armed Services Committee, 

and want to welcome our panelists this morning. And welcome all 

of our members for today’s hearing focused on the Department of 

Defense’s readiness posture. 

This morning we have with us General John Campbell, Vice 

Chief of Staff of the United States Army; Admiral Mark Ferguson, 

Vice Chief of Naval Operations of the United States Navy; General 

John Paxton, Assistant Commandant of the United States Marine 

Corps; General Larry Spencer, Vice Chief of Staff, United States 

Air Force. 

This hearing is critically important, as we try to understand and 

evaluate this year’s budget request and proposed investment as the 

services seek to address gaps created by sequestration. 

Although we recognize that the Bipartisan Budget agreement 

provided some relief, sequestration is not going away and the problem it creates persists. 

The budget we have before us today obviously doesn’t include or 

address the Overseas Contingency Operations [OCO] supplementary requirements, which have been so critical to sustaining our 

force in recent years. 

So we will be challenged to understand the full funding picture, 

but there is no doubt that there are a multitude of enduring, highpriority activities funded by that account. It is imperative that we 

find a way to mitigate the billions of dollars in funding for these 

essential and enduring activities from the OCO to the base budget 

as we ramp down operations in Afghanistan. 

My top priority is to ensure that no soldier, sailor, airman, or 

marine ever enters into a fair fight. All of us recognize the shortfalls and it is our duty and responsibility to ensure our men and 

women who serve have the necessary tools to dominate in any 

operational environment. 
2 

As I look across the services at respective readiness posture, I 

want to highlight a few issues that I think are noteworthy. 

The Air Force flying-hours program cuts from last year have only 

restored approximately 50 percent of those pilots back to appropriate training levels. 

The facilities sustainment accounts represent only 65 percent of 

the total requirement. 

The Navy proposes possible future reductions in force structure 

to include phased modernization of 11 Aegis cruisers and amphibious warships over the next few years, in addition to an out-years 

request to retire a carrier. 

The Marine Corps is establishing crisis response task forces in 

the Middle East and South America, but has not been given the 

$33.8 million in additional resources to properly resource them. The Army has identified approximately $1.73 billion in unfunded 

training needs. 

And not to be overlooked, shortfalls and backlogs in the depots 

persist for all the services for fiscal year 2015. 

I want to make one thing very clear from my perspective. I have 

taken the opportunity to travel on numerous occasions to visit with 

our men and women in uniform, both at home in training status 

and overseas while they are deployed in combat zones. 

I make the same two observations everywhere I visit, whether it 

is on the deck of an aircraft carrier or at a training range or on 

a FOB [Forward Operating Base]—we have the best and brightest 

the Nation has to offer, and these men and women are trained and 

ready. They have volunteered to do an inherently dangerous job 

and there is nothing safe about serving in the military. But these 

are well-trained professionals and they mitigate risks and they 

make it safe. 

My fear is that Congress and this Nation are taking these men 

and women’s service and their safety for granted. They operate in 

a dangerous world doing dangerous and daring things. This danger 

is mitigated because they are trained, ready, and prepared to do 

their jobs. 

The threat of sequestration is not over. If sequestration persists, 

if we continue to hack away indiscriminately at our DOD [Department of Defense] budget, our readiness will erode to levels that will 

take decades to fix. We will lose our initiative and our edge in 

power projection, influence, and forward presence around the globe. 

We will create gaps that will be filled by adversaries and we will 

see more men and women die in training accidents and killed in 

combat because we did not properly resource their mission and we 

did not provide them with the best training and equipment to do 

their jobs. 

This is absolutely reprehensible and irresponsible. 

I look forward to hearing greater details about the fiscal year 

2015 budget request, the status of readiness, and how existing gaps 

and shortfalls will be satisfied to ensure we have the most ready, 

capable, and proficient military in the world. 

I would now like to turn over to our ranking member, Ms. Madeleine Bordallo, for any remarks that she may have. 

[The prepared statement of Mr. Wittman can be found in the Appendix on page 43.] 
3 

STATEMENT OF HON. MADELEINE Z. BORDALLO, A DELEGATE 

FROM GUAM, RANKING MEMBER, SUBCOMMITTEE ON READINESS 

Ms. BORDALLO. Thank you very much, Mr. Chairman. 

And to each of our witnesses this morning, thank you for your 

testimony and for your service to our great Nation. 

And Admiral Ferguson, I understand that this will be your last 

testimony as the Vice Chief of Naval Operations and that you will 

be headed over to Europe soon. So thank you for your leadership 

and service to our great Navy. 

We hold this hearing at a critical point for the Department of Defense. By allowing sequestration to go into effect in 2013, Congress—Congress created the largest single challenge and risk to the 

readiness of our military in many, many decades. 

We reduced that risk with passage of the Balanced Budget 

Agreement in December of 2013. But sequestration will return in 

a little over a year if we don’t find a permanent solution. 

I hope that our witnesses can discuss how they balanced readiness and risk in the current budget submission before us for consideration. We know the Department has used the additional funds 

from the Balanced Budget Agreement to buy back readiness. But 

where do we assume risk now? 

And further, I hope our witnesses will discuss the challenges in 

future budgets if we do not find a permanent solution to sequestration. How will each of the services meet the Department’s strategic 

objectives to have a flexible, agile, and deployable force should sequestration continue? How does the current budget find the right 

balance between meeting operational requirements, strategic guidance, and budget realities? 

And beyond the quarterly readiness reports to Congress, how do 

we truly measure the risk that is being taken in our budgets? The 

quarterly readiness reports give us a sense of readiness at a point 

in time. But how do we really quantify or qualify that risk? 

In particular, I hope that our witnesses can touch on training capacity and access to training in the Asia-Pacific region. One of the 

critical components of the rebalance to the Asia-Pacific region is ensuring that our military remains ready to deploy to support a variety of contingencies, as well as engaging in more training opportunities with partner nations. 

How is this reflected in the fiscal year 2015 budget, as well as 

in future budgets? 

And further, I hope General Campbell can discuss how this budget affects the readiness of the Army National Guard. I understand 

the operation and the maintenance account for the Army National 

Guard sees a decrease at $827 million in fiscal year 2015 from fiscal year 2014 levels. 

I understand this may be a result of savings from depot maintenance requirements for a smaller force. But I am concerned that 

there will be no national training center rotations in fiscal year 

2015 for the National Guard. 

I hope that our witnesses can elaborate on this matter because 

I am concerned that this is an indication of greater challenges in 

ensuring the Guard is ready to deploy and support contingencies 

and operations abroad. 
4 

I have been very supportive of the strategic guidance that requires a right-sized military force that is trained, that is equipped 

and ready to deploy to any variety of operational requirements and 

contingencies. 

I appreciate that the fiscal year 2015 budget request buys back 

a lot of readiness that was lost or deferred as a result of sequestration last fiscal year. 

However, if we do not find a permanent solution to sequestration, 

I fear that we risk the ability to meet not just immediate operational requirements, but that we will be unable to execute the 

DOD’s strategic guidance. 

And this is simply unacceptable. We can fix the problem that 

Congress created. 

And I yield back. 

Mr. WITTMAN. Thank you, Ms. Bordallo. 

Gentlemen, again, thank you for joining us this morning. Thank 

you for your service to our Nation and we will begin with your testimony. 

And General Campbell, we will start with you. 

STATEMENT OF GEN JOHN F. CAMPBELL, USA, VICE CHIEF OF 

STAFF, U.S. ARMY 

General CAMPBELL. Sir, thank you very much. 

Chairman Wittman, Ranking Member Bordallo, other distinguished members of the subcommittee, thank you very much for 

the opportunity to discuss the readiness of your United States 

Army. 

I appreciate your support and commitment to our soldiers, our 

Army civilians, our families, our wounded warriors, and our veterans. 

I would like to take a quick moment to send our regards to our 

brother-in-arms at Fort Hood, Texas. Our Nation’s leaders attended 

a very emotional memorial ceremony yesterday and we continue to 

keep the families of the victims in our thoughts and prayers; so, 

thank you for that. 

Today, the Army remains globally engaged with more than 

66,000 soldiers deployed, including 32,000 in Afghanistan, and 

about 85,000 forward-stationed in over 150 different countries. 

While the restoration of some funding in fiscal year 2014 helps 

the Army restore readiness, it is not sufficient to fully eliminate 

the void in core capabilities created over the past decade of 

counterinsurgency operations and made greater by sequestration. 

The current level of fiscal year 2015 funding will allow the Army 

to sustain readiness levels achieved in fiscal year 2014, but will 

only generate minimum readiness required to meet the defense 

strategy. 

The anticipated sequestration reductions in fiscal year 2016 and 

beyond will severely degrade manning, readiness, and modernization efforts and will not allow us to execute the strategic guidance. 

To really understand our current and future readiness, I need to 

quickly provide a little bit of context on what happened in fiscal 

year 2013. 

Due to fiscal year 2013 Budget Control Act spending caps, the 

Army canceled seven combat training rotations and significantly 
5 

reduced home station training, negatively impacting readiness and 

leader development. These lost opportunities only added to the gap 

created between 2004 and 2011 as the Army focused exclusively on 

counterinsurgency. 

In the event of a crisis, we will deploy these units at a significantly lower readiness level. They will accomplish their mission; 

but, sir, as you said, probably with higher casualties. 

Further results of sequestration fiscal year 2013 include the 

deferment of approximately $716 million worth of equipment reset 

in fiscal year 2014 and also fiscal year 2015. 

The Army was also forced to cut routine maintenance for nondeployed units, thereby creating an additional $73.5 million in deferred cost that carried over to fiscal year 2014. 

We have lost some of our most skilled civilians, many in highly 

technical fields, as a result of a 6-week furlough that cut their pay 

by 20 percent and 2 years of frozen salaries and performance-based 

salaries. 

In order to preserve funding for readiness and modernization, the 

Army is in the process of an accelerated drawdown to 490,000 in 

the Active Component, 350,000 in the Army National Guard, and 

202,000 in the U.S. Army Reserve by the end of fiscal year 2015. 

By the end of fiscal year 2017, we will further decrease end 

strength to 450,000 in the Active, 335,000 in the Army National 

Guard, and 195,000 in the U.S. Army Reserve Component. 

Seventy percent of these cuts will come from the Active Army 

and the reductions will reverse the force mix ratio going from 51 

percent Active and 49 percent Reserve Component mix in fiscal 

year 2012 to a 46 percent Active, 54 percent Reserve Component 

in fiscal year 2017. So, we will have more reliance on our National 

Guard and our Reserve. 

In conjunction with this rapid drawdown, the Army is reorganizing the brigade combat teams and restructuring our aviation 

formations to achieve a leaner, more efficient force that balances 

operational capability and flexibility. 

As we continue to draw down and restructure over the next 3 to 

4 years, the Army will have readiness and modernization deficiencies. 

Fiscal realities have caused us to implement tiered readiness as 

a bridging strategy. Under tiered readiness, only 20 percent of the 

total operational force will conduct collective training to a level necessary to meet our strategic requirements. 

And we have accepted risks to the readiness of multi-functional 

and theater support brigades, as well as in our home station training, installation readiness and infrastructure. 

Base operation support levels remain under-resourced and must 

be a future priority as additional funds become available. 

This year and next are critical to deciding the fate of what is the 

greatest Army in the world. Cuts implemented under the Budget 

Control Act and sequestration have significantly impaired our readiness. 

Further, I am concerned about the impact of Army base funds in 

fiscal year 2015 if the Overseas Contingency or OCO, sir, as you 

talked about, is not acted upon by the start of the fiscal year. 
6 

Absent approval of OCO funding, we would be required to support OCO-funded missions with base funds, which would immediately begin degrading readiness across the total Army. 

Ultimately, the Army is about people. And as we downsize, we 

are committed to taking care of those who have sacrificed so much 

for our Nation over the past 12-plus years of war. 

Assisting our transitioning veterans, our wounded warriors, our 

Gold Star families will remain a top priority and we must protect 

the programs that support their needs. 

I thank you again for your steadfast and generous support of the 

outstanding men and women of your United States Army. 

Please accept my written testimony for the record, and I am honored to sit here with my fellow Vices. 

Mark, thank you for your service here; too bad we will not do another testimony together. 

But I look forward to the questions from the subcommittee. 

Thank you very much. 

[The prepared statement of General Campbell can be found in 

the Appendix on page 46.] 

Mr. WITTMAN. General Campbell, thank you very much. 

Admiral Ferguson. 

STATEMENT OF ADM MARK FERGUSON, USN, VICE CHIEF OF 

NAVAL OPERATIONS, U.S. NAVY 

Admiral FERGUSON. Chairman Wittman, Ranking Member 

Bordallo, and distinguished members of the committee, good morning. Thank you for the opportunity to testify before you today. 

As we conclude over a decade of conflict and extended stability 

operations, your naval forces remain on watch around the globe. 

Forward presence is our mandate. Our forward deployed forces 

are where it matters, when it matters—thanks in good measure to 

your support. 

Since we testified last year, America’s naval forces helped shape 

events and provided immediate options to the President during 

times of crisis around the globe. 

Our global presence reassures our allies and partners, deters aggression, and provides a ready response to humanitarian crises. It 

confronts piracy and supports counterterrorism operations from the 

sea. 

The Bipartisan Budget Act has improved our forward operations 

and readiness over fiscal year 2013. 

Through the remainder of this fiscal year, we are restoring fleet 

training, maintenance and operations and we will recover a substantial portion of our ship maintenance backlog. 

Our fiscal year 2015 Navy budget request with Overseas Contingency Operations or OCO funding will provide the resources necessary to train, maintain, and operate our planned fleet structure. 

Our request with OCO will also sustain required levels of readiness to support the adjudicated Global Force Management Allocation Plan for naval forces. To remain a balanced and ready force 

across the Future Years Defense Plan, this budget proposes slowing cost growth in compensation and benefits, maintaining the option to refuel or inactivate one aircraft carrier and a carrier air 

wing. 
7 

The budget also proposes, as the chairman mentioned, inducting 

11 guided-missile cruisers and three dock landing ships into a 

phased modernization period. 

This phased modernization approach, while fiscally driven, will 

reduce force structure risk in the 2030s and beyond by extending 

the service life of these ships. 

In recognition of reduced funding levels from our PB14 submission, our request also reflects a reduction of nearly 80 aircraft and 

3,500 weapons when compared to last year. 

We have endeavored to reset in stride across a decade of hightempo operations. The Navy will require approximately 5 years beyond the end of Operation Enduring Freedom to complete the reset 

of the force. This period and the length of it reflects unique ship 

depot maintenance demands which are limited by operational 

schedules and the capacity of our depot infrastructure. Our budget 

request also proposes lower investment in our shore infrastructure. 

We are mindful that this backlog will compound over time and 

must eventually be addressed. 

Accordingly, we will continue to aggressively pursue opportunities such as reprogramming or realignment of funds in the year of 

execution to modernize and sustain our shore facilities. As we look 

to the future, a return to sequestration spending levels in fiscal 

year 2016 and beyond will lead us to a Navy that would be insufficient in size and capability to meet the needs of the country. Under 

that scenario, additional force structure reductions would be required to fund adequate readiness of the remaining force. Under 

sequestration, further reductions in procurement, in maintenance, 

training, and operations would be required and damage to the industrial base would likely be severe. 

Despite these challenges, we are fortunate to continue to enjoy 

the highest quality force in our history. These outstanding men and 

women who serve our Nation at sea make us the finest Navy in 

the world. And on behalf of all our Active, Reserve, and civilian 

sailors, I wish to express my appreciation for your efforts and your 

continued support of them and their families. Thank you very 

much. 

[The prepared statement of Admiral Ferguson can be found in 

the Appendix on page 63.] 

Mr. WITTMAN. Admiral Ferguson, thank you very much. And now 

we will go to General Paxton. 

STATEMENT OF GEN JOHN M. PAXTON, JR., USMC, ASSISTANT 

COMMANDANT, U.S. MARINE CORPS 

General PAXTON. Good morning, Chairman Wittman. Thank you 

Ranking Member Bordallo and distinguished members of the committee. I appreciate the opportunity to report on the readiness of 

your United States Marines Corps. 

Today, as always, your Marine Corps is committed to remaining 

our Nation’s force in readiness, a force that is truly capable of responding to crisis anywhere around the globe at a moment’s notice. 

As we gather here this morning, almost 37,000 marines are forward deployed or stationed around the world, promoting peace, protecting our Nation’s interests and securing our defense. There are 

more than 6,000 Marines in Afghanistan who continue to make a 
8 

huge difference to our Nation and our allies in the world. All of 

your marines who are forward remain well-trained, well-equipped, 

well-led, and at the highest state of readiness. 

Our readiness was proven last year, as your Marine Corps displayed its agility and responsiveness in saving lives in the aftermath of the super typhoon that struck the Philippines in November 

and then shortly thereafter with the rescue of American citizens in 

South Sudan over Christmas. Both of these indicate the reality and 

the necessity of maintaining a combat-ready force that is capable 

of handling today’s crisis today. Such an investment is essential to 

maintaining our Nation’s security and our prosperity into the future. 

We fully appreciate that our readiness today and the ability to 

maintain it in the future are directly related to the fiscal realities 

that face our Nation and particularly the Department of Defense 

budget. As our Nation continues to face fiscal uncertainty, we are 

making the necessary choices to protect our near-term readiness 

and to place your United States Marine Corps on the best trajectory to meet future defense requirements. 

I look forward to elaborating on examples of the choices that we 

have made and how they impact our training proficiency, our 

equipment maintenance, and our unit readiness, to name a few. 

As we navigate the current fiscal environment, we will strive to 

maintain balance across what we call our five pillars of readiness. 

Number one is to recruit and retain the high-quality people. Number two is to maintain a high state of unit readiness. Number three 

is to maintain combatant commanders—to meet, rather, combatant 

commanders’ requirements for our marines. Number four is to ensure that we maintain appropriate infrastructure investments. And 

number five is to keep an eye towards the future by investing in 

the capabilities that we will need to meet tomorrow’s challenges. 

As we begin this hearing, I would like to highlight a few points 

from my written statement. First, with regards to high-quality people. United States Marine Corps continues to achieve 100 percent 

of its officer and enlisted recruiting goals for both the Active and 

the Reserve Component while exceeding DOD quality standards. 

Marine Corps remains committed to attracting, mentoring, and retaining the most talented men and women who bring diverse backgrounds, cultures, and skills into the service of our Nation. 

Second, United States Marine Corps has and always will source 

our best-trained, most ready forces to meet combatant commander 

demand requirements. In doing so, the Marine Corps has accepted 

risks to both personnel manning and to equipment readiness in our 

non-deployed units in order to fully support forces who are forward 

deployed and those who are next to deploy. 

We have taxed our home station units as the billpayers to ensure 

that marines in Afghanistan and our Marine Expeditionary Units 

have everything that they need. As a result, as we sit here this 

morning, slightly more than 50 percent of our non-deployed forces 

are experiencing some degree of degraded readiness in their ability 

to execute what we consider to be core missions. 

Third, we continue to foster a rich heritage and a strong partnership with our naval counterparts. As we look to the future, we all 

realize that sea-based and forward-deployed naval forces provide 
9 

day-to-day engagement, crisis response, and assured access to the 

global commons. 

A critical component in building, training, and maintaining an 

expeditionary forward presence is the availability and readiness of 

amphibious ships. This is why we ask for a continued congressional 

support for the Navy and for our naval shipbuilding and surfaceto-ship connector programs in order to maintain an adequate fleet 

that is modern and combat-ready, and particularly on the amphibious ships. Doing so enables continuous naval expeditionary presence and projects power across the globe whenever and wherever 

our Nation needs it. 

I thank each of you for the opportunity this morning, for your 

faithfulness, and I request that the written testimony be accepted 

for the record. Thank you very much. I look forward to your questions. 

[The prepared statement of General Paxton can be found in the 

Appendix on page 73.] 

Mr. WITTMAN. Thank you, General Paxton. Without objection. 

We will now go to General Spencer. 

STATEMENT OF GEN LARRY O. SPENCER, USAF, VICE CHIEF 

OF STAFF, U.S. AIR FORCE 

General SPENCER. Chairman Wittman, Ranking Member 

Bordallo, and distinguished members of the subcommittee, thank 

you for the opportunity to share the Air Force’s current readiness 

posture. Readiness is critical for your Air Force, especially as the 

time and place of our next crisis are never certain and rarely what 

we expect. 

The Air Force’s range, speed, and agility enable us to quickly respond in hours, not days, to national missions, a national security 

threat, or a humanitarian event from home to anywhere on the 

globe. The cornerstone of our success depends on airmen who are 

exploiting and mastering emerging technologies not only in warfare, but also in space and cyberspace, giving us the ability to 

project global military power on a scale our adversaries cannot 

match. However, decades of sustained combat operations have 

stressed our force and decreased our readiness to unacceptable levels. 

We are finding it increasingly difficult to maintain our advantage 

when it comes to effectively operate in contested environments and 

against adversaries with access to increasing levels of advanced 

warfighting technology. We will continue to maintain our ability to 

respond to today’s requirements, but we must also regain and further maintain our ability to operate in the most demanding threat 

environments, but we need your help and support to get there. 

The Air Force defines readiness as having the right number of 

airmen, with the right equipment, trained to the right skill level, 

and with the right amount of support, force structure, weapons, 

and supplies to successfully accomplish what the Nation asks us to 

do. A good readiness plan depends on an optimum level of health 

in all of these areas, but sequestration has slashed our budget by 

billions of dollars, forcing us to make the difficult decision to cut 

force structure in order to help preserve our near-term readiness. 
10 

In order to maintain our readiness health, we had to look beyond 

flying hours and exercises. We took a close look at the preservation 

of modernization efforts to help us maintain our technological edge. 

This includes preferred munitions; live, virtual, constructive environments that can replicate the threats we may face; and installation support that allow us to literally fight and power project from 

our bases. 

Additionally, weapon sustainment health is also critical to our 

readiness plan. As many of you with logistic centers and depots in 

your districts know, you witness firsthand how these centers contribute to the sustainment and readiness of all of our aircraft and 

equipment. Said another way, while adequate flying-hour funding 

ensures the aircraft on our ramps are ready to fly, weapon system 

sustainment readiness funding ensures we have the adequate numbers of aircrafts on our ramps to fly in our missions and to complete our flying goals. 

Because every aircraft and every piece of equipment counts, we 

are driven to seek the most efficient and effective way to ensure 

we are ready to sustain the warfighter in any environment. Investments in Air Force capabilities and readiness are essential if we 

are to maintain our agility and flexibility. Where we struggle is 

with last year’s sequestration trigger that placed the Air Force 

readiness posture at an unacceptable level of risk that we are still 

working to recover from. 

The loss of time and experience flying, maintaining, supporting, 

and integrating those aircraft equated to a loss of critical readiness 

for our airmen across the entire force. Our highly sophisticated and 

capable force cannot be reconstituted overnight, if our readiness is 

allowed to atrophy. This is why we desperately need your help to 

de-trigger sequestration going forward. The Air Force appreciates 

the temporary relief that the Bipartisan Budget Act provides and 

it puts us on a gradual path to recovery. But our analysis indicated 

it will not fix readiness during the FYDP [Future Years Defense 

Program]. 

Because our readiness is heavily influenced by ongoing operations, we need to ensure we can meet these requirements while 

also training for the full spectrum of potential conflict. 

As demonstrated after the conclusion of every major combat operation in recent history, there will continue to be high demand for 

Air Force capabilities even as we begin our drawdown from Afghanistan. 

If we are not able to train for scenarios across the full range of 

military operations against a backdrop of increasingly contested 

air, space, and sovereign environments around the world, we face 

unacceptable risk to mission accomplishment and to our joint 

forces. 

Mr. Chairman and committee members, today’s Air Force provides America an indispensable hedge against the challenges of an 

uncertain future. Properly trained and equipped, your Air Force 

can set the conditions for success in any conflict, in any region of 

the world, whenever we are called upon. 

Sequestration and the demands of sustained combat have decreased our readiness, but with your help we can execute our plan 
11 

to slowly fix this. Thank you for your time this morning and I look 

forward to your questions. 

[The prepared statement of General Spencer can be found in the 

Appendix on page 93.] 

Mr. WITTMAN. Thank you very much, General Spencer. 

I would ask now for unanimous consent to include into the record 

a statement from the American Legion to the Subcommittee on 

Readiness. Is there objection? 

Without objection, so ordered. 

[The information referred to can be found in the Appendix on 

page 107.] 

Mr. WITTMAN. Gentlemen, thanks again for your testimony. I am 

going to defer my questions until the end to give our members a 

chance to ask their questions. So I will now go to Ranking Member 

Bordallo. 

Ms. BORDALLO. Thank you, Mr. Chairman. 

I would like to address each of the witnesses, but if you could 

make it brief, to describe the risk associated with this year’s readiness budget, as well as the risk you foresee in future years if sequestration is not eliminated. What happens if sequestration returns in 2016? If you could be specific. 

And I will begin with General Campbell. 

General CAMPBELL. Thank you, ma’am. 

As in the read testimony as I talked very briefly in the opening, 

as General Odierno, as Secretary McHugh through all their testimonies have said, sequestration would impact your Army in that 

we would not be able to do the Defense Strategic Guidance if we 

go with full sequestration. 

Right now we are on a path to go from 570,000 in your Active 

Component in 2010 to 490,000. We were going to do that in fiscal 

year 2017. Sequestration is forcing us to do that earlier in fiscal 

year 2015. Then we are on a path to go from 490 to 450,000 in your 

Active. 

We have been—at 490 we are at moderate risk to get all the 

tasks accomplished that you expect us to do and to finish strategic 

guidance. At 450, our Chief, our Secretary have testified that we 

are at significant risk at 450. 

Below 450, moving down to potentially 420, that number is out 

there based on trying to keep things in balance, we would not be 

able to accomplish what is required in the Defense Strategic Guidance. That is plain and simple. 

Ms. BORDALLO. Thank you. 

Admiral. 

Admiral FERGUSON. First of all, let me talk about the size of the 

Navy. It would be smaller. 

We would procure one less submarine, three fewer destroyers of 

the Arleigh Burke class, four fewer support ships, one less afloat 

forward staging base, and so you would see immediate decrease in 

force structure. 

We would see that our investment in weapons and capability 

against a high-end adversary would be degraded because we could 

not procure those systems across the future. 

We would see less surge capability in the force that we could 

surge to meet national requirements. 
12 

Our infrastructure, we would defer additional investments. It 

would degrade over time. And we would see less investment in 

spare parts, in maintenance, and in capability. 

We would be a smaller, less capable Navy, and unable to meet 

the tenets of the Defense Strategic Guidance. 

Ms. BORDALLO. Thank you. 

General Paxton. 

General PAXTON. Thank you, ma’am. 

When we moved into OIF [Operation Iraqi Freedom] and OEF 

[Operation Enduring Freedom], through the great support of Congress, the Marine Corps expanded to 202,000; we knew that that 

would be unsustainable and probably not needed for the Nation in 

the aftermath of the conflict. 

The optimal size for the Marine Corps would be 186,800. Under 

sequestration, in order to give you a balanced and forward and 

ready force, we can support 175,000. So that is a significant decrease in the number of uniformed personnel in the Marine Corps, 

first and foremost. 

Second, that force would be ready and forward and balanced, but 

we would be mortgaging the readiness of the next-to-deploy units 

in order to keep that unit forward and ready. 

And then the third piece, ma’am, is that with those forward units 

would be moving at a 1:2 dep-to-dwell instead of the optimal 1:3. 

So due to sequestration, we would have a smaller force, we would 

be mortgaging future readiness and the readiness of our bench 

strength, and then we would be turning forces over more frequently. 

Ms. BORDALLO. Thank you. 

And General Spencer. 

General SPENCER. Congresswoman, just briefly, just to make 

sure we get this in context, based on sequestration last year we 

were in the hole, readinesswise. We had to stand down 13 combatcoded fighters and bombers. And we are now trying to climb out 

of that hole. 

With sequestration, specifically for the Air Force, we would divest 80 more aircraft. To be more specific, we right now struggle 

to meet 60 percent of the COCOM [combatant command] requirements for ISR [intelligence, surveillance, and reconnaissance]. We 

would have to reduce those by 10 additional combat air patrols. 

We would divest the entire KC–10 fleet. We would divest the entire Block-40 Global Hawk fleet. We would take further cuts to our 

readiness in terms of depot support, weapons systems sustainment 

support. 

So we would be a smaller Air Force. We would—as was mentioned before, under sequestration we could not meet the current 

defense strategic ops. 

Ms. BORDALLO. I wish to thank all of you. It is a gloomy picture, 

I must admit. 

General Campbell, can you elaborate on what is driving the $827 

million reduction in the National Guard O&M [Operations and 

Maintenance] account? And can you elaborate on the rationale behind why the Army National Guard will have no planned national 

training center rotations in fiscal year 2015? 
13 

I truly am concerned that this is evidence of relegating the 

Guard to strategic reserve status and not maintaining their operational capabilities. 

General CAMPBELL. Thank you, ma’am. 

Well, first off, as I think everybody knows, you have asked your 

Army to cut $75 billion in the next 5 years—$75 billion. So we 

have got to balance. So what the Chief and the Secretary are trying 

to do is make sure we have the best total Army. 

I have gone into combat with our National Guard, our U.S. Army 

Reserve, and our Active in Iraq and Afghanistan. They have all 

served us very well. 

But as we move forward we have to get smaller, as all of the 

other Vices have said. But what you expect us to do is to balance 

that. And as we do that, we have to take out end strength. 

Your Army is about people. So we have to take out end strength; 

we have to take out force structure. We can’t take out that end 

strength fast enough based on the uncertainty of sequestration. 

The $827 million you talked about, the O&M, is based on the sequestration, as you talked about. 

On the CTC [combat training center] rotations, right now if we 

get the additional monies that we have asked for in the Opportunity, Growth, and Security Initiative, $7.5 billion of that, we plan 

to have two National Guard rotations at the combat training centers in fiscal year 2015. So we are planning for two, but that is dependent upon these additional monies that will help in the shortterm readiness piece. 

Brigade combat teams. We are going in the Active force from 45 

in 2010 to 32. But that is only going at 490,000. As we go to 450, 

we are probably going to have to take out more brigade combat 

teams. On the order of maybe four on the Active side. 

Now brigade combat teams only make up 30 percent of the total 

force, but they are sort of the pacing item—carriers for the Navy, 

fighter squadrons for the Air Force, is brigade combat teams for 

your Army. 

On the National Guard we have 28. We continue to have 28. But 

if we go down to 335, we are probably going to have to take out 

two of those National Guard brigade combat teams. 

We will continue to work this very hard with our National 

Guard, with our U.S. Army Reserve. As I talked about earlier, we 

are going to have more reliance on our National Guard and our 

Army Reserve based on 56 or 46/54 percentage as we move to the 

future. But we have to have it in balance. 

Our Chief and our Secretary have testified over and over that we 

cannot go back to a strategic reserve for our National Guard. They 

are better manned, equipped, trained, and led than they ever have 

been. We have got to maintain that. 

But we can’t maintain that as an operational reserve if we keep 

all of the end strength, if we keep all of the force structure, and 

we have no readiness in our National Guard. So we have to balance 

that and we will continue to work that very hard. 

Ms. BORDALLO. Thank you very much, General. 

I have one final question, Mr. Chairman. This is for General 

Spencer. As we refocus on the Asia-Pacific region, I am wondering 
14 

if the Air Force is looking seriously at its rotational presence in the 

Asia-Pacific region and its cost and impact to the O&M accounts. 

Have we seriously looked at the cost-benefit of how we do rotational presence and whether innovative ways of keeping a permanent presence of some assets in the region would make more budget sense? 

General SPENCER. Yes, Congresswoman, we have thought about 

that. And it is a balance, obviously. 

So if we had a sequester, as an example, and we look at additional reductions to O&M, money that we would already—our readiness account, if you will, money that we would use for tankers to 

drag fighters across their rotations or other—or parts, and that 

sort of thing, we clearly have looked at the balance between keeping—the cost of keeping forces back home and pulling them across 

the—you know, such a long distance or forward stationing them. 

So we have got some analysis that we are working on, as we 

speak, to try to look at that balance, if we take that sort of cut, 

exactly how would we adjust to make sure we maintain our presence forward. 

Ms. BORDALLO. Thank you very much. 

And I yield back, Mr. Chairman. 

Mr. WITTMAN. Thank you, Ms. Bordallo. 

I will now go to Mr. Palazzo. 

Mr. PALAZZO. Thank you, Mr. Chairman. 

Good morning, gentlemen. Thank you for your service. And 

thank you for being here so early in the morning. 

General Spencer, I know you—excuse me—you probably share 

my appreciation for the Keesler Air Force Base, given the fact that 

they were named the best Air Force base in the nation in 2013. 

I had the opportunity a few weeks ago to speak with Secretary 

James and General Welsh and to invite them personally down to 

Keesler to see firsthand the fine facilities, the airmen, and our 

south Mississippi community, so I want to extend that invitation 

to you. 

And, of course, I always extend it to my colleagues, as well, and 

anyone who would like to come see Keesler Air Force Base. 

The latest Air Force budget proposal contains the third plan in 

3 years to try to move the C–130J planes from Keesler Air Force 

Base. I fought to kill the first two, previous proposals, and I am 

going to continue to ask the hard questions for this third proposal. 

Because, quite frankly, this move doesn’t make any sense. It 

doesn’t make sense from a cost perspective and it doesn’t make 

sense from a readiness perspective. 

The latest proposal to send these planes and these airmen to Little Rock seems like it would cost $27 million, just to move this 

unit. 

That doesn’t even take into account the $58 million in construction investment that has been completed at Keesler in recent years 

in order to accommodate these planes. 

And then there is also the cost of retraining personnel for work 

on a completely different plane, and that also takes time. 

So in past hearings, I focused on the questionable costs of moving 

these planes, but I want to focus today on the readiness factor. And 

so, my question to you, General Spencer, from a readiness perspec-
15 

tive, how much time and use of these planes does the Air Force 

stand to lose if this move goes forward? 

General SPENCER. Well, obviously, we wouldn’t—well, let me 

back up a second. I think you have heard before that we—and 

when we look at every one of our weapons systems, as we looked 

at these reductions. 

And we did an analysis on each one and bounced those against 

campaign plans to see where we could take less risk. 

Our C–130 fleet overall is in excess of the requirement. And so, 

what we decided to do, then, is sit down with the Active Duty, 

Guard, and Reserve and look at the entire C–130 fleet, and look 

at where they are located and try to figure out where is the best 

place for them to be, based on the mission that we have, and allow 

us to also draw down C–130s. 

And so, based on that sort of chessboard, if you will, there was 

a holistic plan—— 

Mr. PALAZZO. General, not to interrupt, because I might—want 

to ask a question of General Paxton, how does this affect readiness? I mean, we have a unit that has been in combat, broke some 

serious awards over there. 

And from our perspective, we are hearing that it may take 12 to 

24 months just to train up this unit, to get it to a state of readiness. And if we want to get it to the state of readiness that this 

unit already has, it could possibly take another 12 to 24 months. 

General SPENCER. No, I—— 

Mr. PALAZZO. Is—— 

General SPENCER. No, I do not agree that it would take 12 to 24 

months. 

Mr. PALAZZO. Well, will you provide me some—— 

General SPENCER. Yes, sir. 

Mr. PALAZZO [continuing]. Justification for that? I would appreciate that. 

General SPENCER. Yes, sir. Yes, sir. 

[The information referred to can be found in the Appendix on 

page 113.] 

Mr. PALAZZO. Thank you, sir. 

General Paxton, my second question is for you. 

A few weeks ago General Amos testified before our committee 

that the Marine Corps needs more amphibious ships. In fact, CNO 

[Chief of Naval Operations] Greenert said we should use 50 ships. 

We got retired generals and admirals out there saying we have got 

to have more of these ships as well. 

So we have got a need. The Navy says it is 38 ships. Under fiscal 

constraints, they can make do with 33. Right now, we have only 

got 28 ships, and we could drop as low as 22 in the next 10 years. 

We are not anywhere close to the 38, and certainly not anywhere 

near the 50. And so, I just want to know, how—I mean, I understand how important these ships are to have survivable amphibious lift, like the LPD. It is important to our Marines and our Navy 

personnel. 

And we have got to provide our service members with the capabilities they need. 

So my question is, does the Navy-Marine Corps team require 

more amphibious lift? What can we do to ensure that the Marine 
16 

Corps requirements are being met, that our homeland is protected, 

and that we can get our troops to and from where they need to be? 

And how would increased amphibious lift capabilities provide 

flexibility to our services as the world becomes a much more dangerous place and not safer? 

General PAXTON. Thank you, Congressman Palazzo. 

And I believe the Navy and Marine Corps team are pretty close 

on this, and we have been fairly consistent. 

And if I could just add maybe a fine point to the numbers there. 

The most pressing set of circumstances for the Navy-Marine team 

is the steady-state demand requirement. And both Admiral 

Greenert and General Amos have been on record to say that given 

the studies, that somewhere between 48 and 54 is the optimal amphibious lift capacity that we need. 

The 38 has to do with getting amphibious lift and getting our 

forcible entry element into the current—the two major theater war 

plans. So we have accepted, the Navy-Marine team years ago accepted 33 as a fiscally constrained goal. 

We are below that right now. We have 31 that are commissioned 

and on the waterfront. And then, when you account for those that 

are in and out of maintenance, that is the loss. 

So to your specific question, sir, absolutely. We could use and we 

would like to have more ships. 

The challenge is, the Navy and the Marine Corps both have 

maintenance requirements and capital investment requirements, so 

there is a higher class sub and other things like that. So the challenge for us is to get that balance within the current top line. 

In order to get more amphibious ships, we know that we need 

to just increase the top line for the entire Navy-Marine team, so 

that the Navy isn’t forced to go into these really tough decisions between a carrier, a submarine, and an amphib ship. 

But we need more amphibious ships, sir. 

Mr. PALAZZO. Thank you, General. 

General PAXTON. Thank you, sir. 

Mr. PALAZZO. My time is expired. Thank you. 

Mr. WITTMAN. Thank you, Mr. Palazzo. 

We will now go to Mr. Courtney. 

Mr. COURTNEY. Thank you, Mr. Chairman. 

And thank you to all the witnesses for your testimony this morning. 

Admiral Ferguson, in your testimony you indicated that the fiscal 

year 2015 budget request will provide the maintenance funding 

necessary to maintain, train, and operate the proposed operational 

fleet. 

Again, that is subject to getting the OCO sort of supplement to 

hit the number you need, is that correct? 

Admiral FERGUSON. That is correct, Congressman. 

Mr. COURTNEY. And approximately how much is that number? 

Admiral FERGUSON. Well, our OCO requirements are broken into 

three pieces. The first is what we look at as the support operations, 

that the combatant commanders. That is about $3.3 billion. 

The second piece is reset, as we try to recover some of the back- log of maintenance. That is about another $2.2 billion, $2.4 billion, 

or so. 
17 

And then the last piece is about another $2 billion, which is the 

enduring, things of maintenance, another piece. So it is approximately $7 billion to $8 billion for us. 

Mr. COURTNEY. Well, that is helpful in terms of, you know, focusing in it for us, so that we can make sure we keep an eye on it 

through the process here this year. 

You know, I was pleased to see on page 1 of your testimony that 

you listed as, in terms of one of the priorities for the Navy is to 

sustain a relevant industrial base. I mean I think sometimes, you 

know, the readiness discussion doesn’t focus on that enough. 

And, again, I appreciate that. 

You know, since we have sort of stabilized 2014 and hopefully, 

you know, we have got, I think, actually some overlap in terms of 

the two sides for the 2015 budget that we are going to be voting 

on later today that will protect the priority that you described. 

I guess in terms of the industrial base, I think that Admiral 

Kevin McCoy once described a goal of the Navy in terms of sort of 

viewing the shipyards as sort of one shipyard, that it makes no 

sense to be laying off a nuclear welder in one shipyard at the same 

time there is a backlog of work in another shipyard where they 

need nuclear welders. 

And I guess, again, given the fact that we have retained—you 

know, we have achieved some stability, I mean, do you sort of see 

that still as sort of a basic goal, in terms of protecting the industrial base? 

Admiral FERGUSON. Well, as a capital intensive service, as you 

know, I mean, we rely heavily on both the innovation in the industrial base, the development of new systems, and the repair capability. 

All our naval shipyards are at capacity right now in working, 

and they have a backlog in work that will carry them through the 

next 5 years. 

So, our industrial base, we are extraordinarily reliant on each of 

them to provide that both technical expertise you referred to as 

well as the capacity and innovation. 

So we do treat them and look at it as a holistic piece as we go 

forward. 

Mr. COURTNEY. Right. I think that is the right approach. I think 

General Campbell described sort of the damage that was done to 

the workforce with sequestration and furloughs is that, you know, 

when you—when people have to leave, you know, they have still 

got to feed their family. And sometimes, even, you know, when 

things get restored, they don’t come back, because they have found 

something somewhere else to feed their family. 

And, again, that one shipyard approach, in terms of protecting 

the industrial base I think is really the balanced way to make sure 

that, you know, once we are out of the woods here with sequestration—I am an optimist; I think we are going to get there—you 

know, that we have got people who are ready to do the work. 

So, thank you for your testimony and your service and good luck 

with your next endeavor. 

And I yield back, Mr. Chairman. 

Mr. WITTMAN. Thank you, Mr. Courtney. 

I want to now go to Mr. Scott. 
18 

Mr. SCOTT. General Spencer, you were at Robins Air Force Base 

from 1980 to 1982, I see. 

And I have the privilege of representing that area; would like to 

represent you—invite you back, I should say, and join you at the 

base and give you an opportunity to meet some of the men and 

women that are there today. 

One of the concerns that I have as we have gone through these 

talks has been the proposal of arbitrary cuts to the civilian workforce. 

I personally think we broke faith with them with the furloughs 

and the other things, and I think that they are a vital role in national defense. And if we don’t have our civilian workforce providing the weapon systems that we need and making sure that 

they are maintained and we end up having to put more uniformed 

personnel in those positions. 

So, my question for you is if these arbitrary cuts to the civilian 

workforce that have been proposed were put in place, what would 

the impact on readiness be for the Air Force? 

General SPENCER. Yes, thank you for the question. Because quite 

frankly, we haven’t treated our civilian workforce very well. 

We had a sequestration which forced us to carry thousands of vacancies. We then had to do a government shutdown; we actually 

had to furlough civilian employees. 

And so, one of the misconceptions I think there is—and I can just 

speak for the Air Force—is that, you know, we have civilian employees that are sort of doing administrative work. 

And whereas we do—I mean, and that is important work, as 

well—we have 180,000—roughly 180,000 civilians in the Air Force, 

5,000 of them work in the National Capital Region; the other civilians are out in depots, turning wrenches every day. 

And in the case of our air training—Air Education and Training 

Command as an example, the entire maintenance of the airplanes 

that we have to train our pilots are maintained by civil service employees. 

So if you cut—are doing across-the-board arbitrary reduction to 

civilians in the Air Force, it is—the impact on readiness is going 

to be devastating. We can’t make it up. 

You can’t cut civilians off a flight line or in a depot that are fixing airplanes and expect the work to be done. You just—it just 

won’t happen. 

Mr. SCOTT. Well, thank you for your comments and thank you for 

your service. 

Gentlemen, if any of the rest of you would like to comment on 

the proposed cuts to—just arbitrary cuts to the entire civilian 

workforce, I would appreciate your opinion. 

Admiral FERGUSON. Congressman, from the Navy’s perspective, 

we are in a similar position to the Air Force—less than 15 percent 

of our civilians are in the National Capital Region. 

And the rest are in, you know, over 30,000 in naval shipyards; 

we have, you know, thousands in our aviation depots. 

And just like the Air Force, they provide the readiness; they 

work on our aircraft and systems—they repair them; they train; 

they care for our families and our children in our daycare centers. 
19 

I mean, they are indispensable to what we do and to execute the 

mission every day. 

General CAMPBELL. Sir, same thing with the Army. At the 

height, probably fiscal year 2010, we had 285,000 Department of 

Army civilians. Today, we are about 250,000. 

As the Army end strength continues to go down, there will be a 

proportional cut to our civilians, as well. 

I agree with General Spencer—fiscal year 2013 was a very, very 

tough year for our civilians. We need to do better in the future. 

We have to give them some certainty or we will continue to lose 

the best and brightest. We will have a hard time recruiting the 

best and brightest that will stay with us. 

It is a total force with Army civilians—Army military, as well. 

General PAXTON. And Congressman, for the record, I would concur with my mates here. 

And then in particular, we have less than 5 percent of our civilian workforce who are here inside the National Capital Region and 

they are essential to what we do at our depots and all around the 

Marine Corps. So, I concur with my mates, sir. 

Mr. SCOTT. Thank you, General. I have a cousin, actually, that 

works at your depot in Albany. 

So, thank you for your service. And with that, I will yield the remainder of my time. 

Mr. WITTMAN. Thank you, Mr. Scott. 

We will now go to Mr. Barber. 

Mr. BARBER. Thank you, Mr. Chairman. 

And thanks to all the witnesses for being here today and for your 

long and patriotic service to our country. 

What you said this morning and what we have heard at previous 

hearings worries me deeply, as I know it does my colleagues, and 

you, of course, as well. There are very serious threats to our national security in the path we are on. 

In terms of the cuts that we are talking about and future cuts 

that might come, we are putting our country in a very dangerous 

position in the world, not only in protecting this nation, but in protecting and standing up with our allies and abiding by our treaty 

obligations. 

General Spencer, I would like to direct a question to you. It is 

an issue that I am very concerned about and I think it seriously 

threatens our readiness. 

As you know, General, last year, our Congress approved the National Defense Authorization Act [NDAA]. 

And in there, there was a provision that said the A–10 Thunderbolt would not be divested—or not—you wouldn’t take action to divest it during calendar year 2014. 

It specifically said no preparatory actions for future divestment 

within calendar year 2014. 

And it has been since reported, General, that the Air Force may 

not have allotted any flight hours for the A–10 weapon school, may 

have canceled A–10 modernization and ended the normal 

sustainment process for fiscal year 2015, which begins October 1st. 

This, in my opinion, General, would clearly demonstrate a complete disregard for congressional intent within the NDAA. 
20 

General, how and when will the Air Force rectify this violation 

and ensure that the A–10 continues to fly as we said it should? 

Congress intended that the Air Force would keep the A–10 flying—not only because it is an important aircraft, but also because 

it is critical to the defense and protection and support of our troops 

on the ground. 

I recently returned from Afghanistan where I heard that story 

over and over again—how important it is to their protection. So, 

General, please tell me, when will we see this violation rectified? 

General SPENCER. All right, thank you, sir, for the question, Congressman. First of all, we are not going to violate the law. 

And the airplane is funded through fiscal year 2014, so I am not 

sure where those reports came from; but we understand the NDAA. 

The flying hours are there for the airplane, so we are not going 

to violate the law in terms of funding. 

If you will allow me, based on the second part of your question, 

you won’t find anybody in the Army or the Air Force say the A– 

10s are not a good airplane. It is a good airplane. 

But it is an airplane; it is not a mission. And we are talking 

about a mission here, which is CAS [close air support], and we 

have—as you have heard before, we have multiple aircraft that can 

perform that mission. 

So, we are not walking away from the mission at all. Again, 

when—as you have heard, when we take—when we lose $8 billion 

to $10 billion a year, we have to stop doing something. We have 

to cut something. 

And so, as I mentioned before, we looked at—across our entire 

portfolio. We balanced all of our weapon systems against the 

COCOM demands and the war plans and the campaign plans that 

we have and we took risk across every area, not just in CAS; but 

we took risk in every area. 

We have got—you know, I heard someone once say that close air 

support is a game changer. I don’t—I think it is, but we have a lot 

of game changers. 

Air superiority is a game changer so no one can drop bombs on 

our folks; command and control is a game changer; ISR is a game 

changer. 

So, if we had the money, we wouldn’t have cut the A–10. But 

again, we try to focus on the mission, not necessarily the platform. 

Mr. BARBER. I do want to speak to that issue momentarily. But 

I would like to ask you, General, to look into these allegations and 

these reports that the Air Force is in violation of our provision in 

the NDAA—and let us have an answer in writing as soon as possible. 

General SPENCER. Yes, sir. 

[Mr. Barber received a classified briefing in response.] 

Mr. BARBER. Let me then follow up on what you were saying, actually, a moment ago. Senator Graham recently asked General 

Welch if the Air Force would keep flying the A–10 if Congress 

could find the money to sustain the mission over the next 5 years. 

And I would like to pose the same question to you, sir. If we found 

the money, would the Air Force keep flying the A–10 if the money 

was not an issue? 
21 

General SPENCER. Well, if money wasn’t an issue overall, of 

course we would. But if you are asking me that if you gave us 

money back, is the A–10 our first priority, the answer is no. 

I mean, as an example, we are having to reduce our AWACS 

[Airborne Warning and Control System] fleet by seven airplanes 

just to take the money to upgrade the remaining airplanes. That 

would be a higher priority than the A–10. 

But if you are saying Congress gave us the money and said, 

‘‘Fund the A–10,’’ of course, we would. 

Mr. BARBER. My time is up. But I just want to leave you with 

one question for the record, sir; and that is could you get us the 

analysis that led you to the decision that the A–10 should be divested—the monetary analysis and the combat mission analysis? 

General SPENCER. Yes, sir. I will get that for you. 

[The information referred to can be found in the Appendix on 

page 113.] 

Mr. BARBER. Thank you for your time, sir. 

Mr. WITTMAN. Thank you, Mr. Barber. 

We will now go to Mrs. Noem. 

Mrs. NOEM. Thank you. 

General Spencer, I wanted to visit with you a little bit about 

Ellsworth Air Force Base—— 

General SPENCER. Sure. 

Mrs. NOEM. Which is in South Dakota. It is home to roughly half 

the B–1 bomber fleet. 

And last year at this time, they were grounded due to sequester. 

So, is it safe to assume that that will not be a situation that could 

happen in the near future? 

General SPENCER. Well, we certainly hope not. I mean, keep in 

mind, when we had sequester last year, it hit us in the middle of 

the year. 

And so, we were faced with—we already had our budget. We had 

6 months to make up a year’s worth of cut. 

And so, we had no—I mean, we were going to—you know, we 

couldn’t go anti-deficient. And so, we had to just stop—you know, 

stop hiring, stand down airplanes. So short of something like that, 

we certainly hope not. 

Mrs. NOEM. Okay. So where are we at in the process of getting 

these squadrons back to the Tier 1 combat readiness status? 

General SPENCER. Yes, ma’am. That is a continuous process 

every day. You know, obviously, some systems are able to bounce 

back faster than others. But again, keep in mind that what we are 

talking about here is that we put pilots down and so they start to 

lose their certification over time. We had maintenance folks who 

work on these airplanes, same thing. 

And so, as we spin them back up, it is not like a pilot can go 

jump in an airplane and say, okay, I had a couple of months off, 

now it is time to fly. I mean, you know, they have training in refueling. They have training on ranges on dropping bombs, you 

know, that sort of across-the-board full-spectrum training to meet 

any threat from a high-end threat to sort of a coin fight. We expect 

our pilots and crews to be able to respond across that full spectrum. 
22 

So we are in the process of doing that now. That is why we are 

so worried about sequestration going forward because as we have— 

we had sort of a temporary break with 2014 and 2015, and we are 

starting to recover. And oh, by the way, it is not just the pilots and 

the flying, it is the ranges that they fly on, it is buying the proper 

emitters that have our pilots fly against the realistic threats that 

they are going to see. It is red-flag exercises out in Nellis. I mean, 

it is the whole readiness package, if you will, that we are trying 

to get back up to speed. 

Mrs. NOEM. So can you give me some perspective on where we 

are in that process or, you know, do we have a timeframe for when 

we get back to Tier 1? 

General SPENCER. Yes, you know, we estimated initially about a 

year or so. About 50 percent of those are getting pretty close, but 

about 50 percent of them are not. 

Mrs. NOEM. Okay. 

General SPENCER. But again we are slowly climbing out of that 

hole, but which is what scares us so much about 2016, if we go 

back to sequestration. 

Mrs. NOEM. Okay. So I wanted to ask you one more thing 

about—my understanding of the fiscal year 2015 funds is that it 

does fund flying hours at capacity. In the case of the B–1s, though, 

3 of the 36 combat-coded aircraft are not fully staffed. They don’t 

have the same crew ratio or flying hours programmed against 

them, as other combat-coded aircraft. And so what is the reason for 

the difference on those particular aircraft and would you still consider this funded at capacity? 

General SPENCER. Yes, ma’am. Thank you for the question because, without going classified, it is one thing to fund the flying 

hours that we can execute. You know, again, it is not just about 

flying hours. First of all the depots and the maintenance folks have 

to have the airplanes ready to go. And so, of those airplanes that 

we are able to get on the flight line, we have fully funded the hours 

that they can execute. 

But that is only a part of readiness. I mean, when we look at 

readiness, it involves personnel, as you mentioned, the crew members, having the right training personnel, having the number of 

personnel. So, no, clearly, our readiness posture is not what we 

would like to to be right now, again, without getting classified. 

Mrs. NOEM. Well, can you speak to, on those three aircraft what 

the readiness level would be? 

General SPENCER. No, those three, ma’am, if I could I would like 

to get back to you on those, if I could? 

Mrs. NOEM. Okay. Let’s do that. And with that, I yield back, Mr. 

Chairman. 

[The information referred to can be found in the Appendix on 

page 113.] 

Mr. WITTMAN. Thank you, Mrs. Noem. And now we will go to Mr. 

Enyart. 

Mr. ENYART. Thank you, Mr. Chairman. General Spencer, it is 

certainly a delight to see a fellow Saluki before me today. And I 

was glad Mr. Scott asked you to come down to Robins Air Force 

Base. Since you were stationed in Scott, I would like you to come 

to Scott Air Force Base. 
23 

General SPENCER. Sure. I would be happy to. 

Mr. ENYART. And while you are there, we will go down to 

Carbondale and we will visit a few old haunts that you and I might 

have crossed paths in back in the late 1970s. 

General SPENCER. Yes, definitely. 

Mr. ENYART. General Campbell, before I came to this hearing, I 

had the Army Aviation Caucus breakfast with one of your predecessors, General Jack Keane. And General Keane, I thought, had 

some very interesting remarks for us. 

And General Keane this morning said that, in our Army, aviation 

is fully integrated into the Army, unlike in other nations. And in 

other nations, aviation tends to come in from the outside. And it 

is his opinion that that is one of the reasons that Army Aviation 

does such a great job and does such a great job with all of its missions, whether it is close air support or a utility lift or intel, or 

whatever. Would you agree with General Keane’s assessment on 

that? 

General CAMPBELL. Sir, absolutely, we have the best aviation in 

the world today. And as we move forward, we have got to make 

some very, very tough decisions. The ARI [Aviation Restructuring 

Initiative], as you know, makes some of those very tough decisions. 

But I think at the end if we go with ARI, we will continue to have 

the very best aviation in the world. And it is integrated down to 

the lowest levels. 

I commanded the 101st Airborne Division, the largest aviation, 

two combat aviation brigades with that division, taking them to 

combat. So I understand the importance of that integration from 

the air to the ground. But he is absolutely right. 

Mr. ENYART. And I agree with you. I think that is very, very important. And I was glad to hear your remarks about the importance 

of the Army National Guard and the importance of the Army Reserve, as we move forward in changes in our defense posture. And 

so I would assume from your remarks that you would agree that 

the Army National Guard, the Army Reserve essentially serves as 

the shock absorber, if you will, for when we need to rapidly increase the size of our Army. 

General CAMPBELL. Yes, sir. That is one term I have heard used. 

Bottom line, we have to have a total force. We have to have Active, 

Guard, and Reserve. If we have to balance that, and as we have 

to make some very tough decisions based on the budget, we want 

to continue to have a National Guard as manned, equipped, trained 

and led, the very best. We don’t want to go back to a strategic reserve. To have an operational reserve, there is probably going to be 

some small proportional cuts in their end strength and force structure, so we can keep readiness so they can continue to be an operation reserve. 

Mr. ENYART. And I agree with you, General. I think that is absolutely the right policy as we move forward. And having served 

when it was the strategic reserve and later having served when it 

was such an important part of our overall combat force, I agree entirely with you. 

And that is why I am so very, very concerned about the Army’s 

proposal with Army Aviation, to strip AH–64 Apaches out of the 

Army and National Guard. You need to train as you fight. We all 
24 

agree to that, and that is why the Army National Guard needs 

those and they need to be in that shock absorber for the American 

military. 

But I have another question for you. General Keane indicated 

this morning that—and of course, he has been very active, he has 

remained as an adviser to General Petraeus, when Petraeus would 

come in in Afghanistan. And so, he has not just been out of the 

loop for the last 10 years. 

But he indicated that we fought, Iraq and Afghanistan, we 

fought two wars. We didn’t fight them contemporaneously. We 

fought them sequentially. And he said that we fought them sequentially, and that was when we had an Army of 570,000 Active soldiers. We fought them sequentially because we could not fight two 

wars at the same time. 

And he made a very interesting remark, and I don’t want to misquote him, but he said something about we were fighting against 

guys who were armed with AK–47s and RPGs [rocket-propelled 

grenades] and we couldn’t fight two wars at the same time. We 

couldn’t beat them. Now of course, Iraq was a little different story 

than Afghanistan, in terms of their armaments. 

But we spent trillions of dollars on our defense. We spend hundreds of billion of dollars on our military. And what is it that we 

are doing wrong that we can’t defeat folks with RPGs and AK–47s 

when we have the finest military in the world that we spend hundreds of billions of dollars on. 

So that is a thought I would like you to take back and think 

about. We need to think a little out of the box. And I think we need 

to look much more at strategic agility and some other concepts, because we don’t seem to be getting the job done, even though we 

have spent a nation’s fortune on it. I yield back. 

Mr. WITTMAN. Thank you, Mr. Enyart. We will now to go Mr. 

Rigell. 

Mr. RIGELL. Thank you, Mr. Chairman. And I thank all who are 

here this morning, generals and admiral. 

Admiral Ferguson, my question is directed to you. Part of our essential role of oversight on House Armed Services and specifically 

within the Readiness Subcommittee, you know, I have reviewed 

carefully the SRM [Sustainment, Restoration, and Modernization] 

document, the bullet points that are laid forth on that particular 

aspect of the budget. And the priorities that are set, I really have 

a question about that, specifically as it relates to how much the 

Navy is directing toward energy and really alternative energy and 

energy goals. 

I have gone at this with a good man I respect greatly, Secretary 

Mabus. We have talked about this extensively. And as I see what 

is actually here before us, that only 70 percent of the SRM account 

is being really funded. Yet, over a hundred million dollars or over 

7 percent of the budget is being directed toward the energy goals. 

And so I would like to hear from you what the rationale is on 

that and I will give it careful consideration. But I approach this as 

a skeptic just because of my own experience. And I think the priorities are not in the right order at this time. But I certainly want 

to afford you the opportunity to walk us through that. 

Admiral FERGUSON. Great, thank you, Congressman. 
25 

I will start in the broader sense, is that as we started to balance 

this budget presentation, like the other services, we faced a reduction. In our terms it was about $31 billion across the FYDP. 

And so the missions haven’t changed the demand for presence, 

and so as we started to prioritize, we prioritized presence forward, 

we prioritized keeping the forces—those operational forces ready to 

be sustained and generate forward force. And we started to take 

risk in our procurement accounts, in the size of the force structure 

of the Navy, and in our shore infrastructure. 

As you look at the SRM account, we focused at the 70 percent 

level in our investments for the DOD model. And we look to the 

year of execution, as funds become available, to either reprogram 

or to cover them. 

We would like to invest more because we realize that is a deferred maintenance backlog that is going to accumulate over time. 

We invested in this budget in the key safety and operational factors, in barracks. There is no demolition included in this budget, 

for example, which we would like to demo some old facilities. But 

the very key safety issues and operational issues that support the 

force went into this shore infrastructure. 

With respect to energy, the investments that we have in there 

and those projects, one, they provide a return on investments for 

energy efficiency for our bases. They show future savings that will 

accrue to the service. They support issues of Federal compliance 

that we have to meet. And fundamentally, they improve our infrastructure. We are looking at our naval shipyards. We are looking 

at other places in the electric grid where we have to do improvements. 

So we try to balance in this broader context those projects that 

would show a return on energy because it is a strategic imperative 

for us to get more efficient in the future. 

Mr. RIGELL. I appreciate your response. From my own experience 

in commercial buildings and other things, I do know that perhaps 

as an older building, an older HVAC [heating, ventilation, and air 

conditioning] system or something is replaced, the efficiency is 

much greater. 

That said, the more that we have dug into this and as we give 

careful examination to it, I remain holding this view that we have 

placed a disproportionate amount of emphasis on this over some of 

the things that I think would help our service members more directly. 

And I would ask again that there be a consideration of moving 

some of those funds over from energy into those aspects of modernization and the SRM account that would have a more direct and 

immediate impact. 

And I thank you for your service and all of those who are serving 

and are with us today. 

And I yield back the remainder of my time. 

Mr. WITTMAN. Thank you, Mr. Rigell. 

We will now go to Ms. Shea-Porter. 

Ms. SHEA-PORTER. Thank you. And thank you, gentlemen, for 

being here. 
26 

And I just wanted to state for the record that I think Congress 

has put all of you in a very, very difficult position and that we simply cannot have it both ways. 

We can’t expect the military to stay strong and properly fund our 

programs, especially those in our districts that we know how important and critical they are, and still do these cuts. 

So you do have my sympathy and it is a message I think that 

this committee has tried repeatedly to share with other Members 

of Congress. So I just wanted to be on the record for that. 

Now I read your statements, but my question is, were these written before Crimea? Is this written before we saw the Russians fairly aggressive on borders now? 

What does this mean to readiness now? Does this mean any 

pivot, any change? Do you foresee extra requirements and needs? 

I didn’t hear anything addressed on that and I know this has 

been a topic that had me concerned and other members as well 

concerned about do we have to pivot back a little bit? Should we 

continue closing down the bases in Europe? Have we moved too 

quickly? 

So if you could look ahead a little bit and tell me what you think 

we need to do and are you comfortable with where we are and 

what we are doing right now. And I am going to ask each one of 

you. Thank you. 

General CAMPBELL. Thank you, ma’am. 

My statement was written after the Crimea piece. But as you 

say, a month and a half ago if you thought we were going to talk 

about Russia in Crimea, we would have been saying, ‘‘What?’’ 

And I think what it goes to is what the chairman said up front— 

is that we live in a very volatile, very complex, and probably more 

dangerous world than we have ever lived in before. And so we have 

to take that into consideration. I think all the service chiefs have 

been up front in voicing this. 

And as we do this, we continue to come down and we continue 

to come down at a time when your Nation is still at war in Afghanistan. So all these factors make that very tough. 

What you asked all your services to do is maintain a balance, 

provide the very best capabilities that we can at the budget that 

you give us. And I think we take a look at all the different scenarios, we run simulations, we run models, and then we owe our 

Congress in terms of risk where we are at and what we can and 

cannot do. 

And I think Crimea is just another example of how dangerous 

our world is, and that if we continue to go down too fast, we will 

not be able to respond accordingly to different nations in the world 

here. 

So it does concern us. I think there is a whole bunch of policy 

things that we probably will not get into on that part of it. But we 

are very cognizant. 

Your Army has to be able to go all over the world. And so there 

is a rebalance to the Pacific. We think we have been able to do 

that. But we are also maintaining forces in Afghanistan and 

CENTCOM [U.S. Central Command] and all the combatant commands. 
27 

As one of the other Vices said, it is kind of funny here—as we 

continue to draw down, the demand for your services, I know for 

the Army, the requirement and demands continue to grow. So it is 

going in the opposite direction. 

Ms. SHEA-PORTER. What about the bases in your—— 

General CAMPBELL. Ma’am, we are looking—OSD [Office of the 

Secretary of Defense] is running a European infrastructure consolidation review with all of the services. The Vices are part of that 

senior review group, as we take a look at that. 

I think as you know, we came from four brigade combat teams 

down to two. The mitigation effort for that is to have a NATO 

[North Atlantic Treaty Organization] response force. We have a brigade that will rotate and do exercises with our NATO partners. We 

will continue to look at that very hard. 

But again, we are going to have to cut additional brigade combat 

teams as we go forward. And my fear is that if we say we are going 

to cut that someplace in CONUS [continental United States] the 

United States, a Member of Congress will say, ‘‘You can’t do it in 

my State.’’ So go to Europe. 

Well, if you go to Europe, we have certain NATO obligations and 

treaties that we must fulfill. And I think we are probably on the 

cutting edge with right now being where we are bare bones. And 

I think General Breedlove as EUCOM [U.S. European Command] 

commander said that, as well. 

So we will continue to look at that very hard. We have to make 

sure we don’t have excess and all the services are looking very 

hard on where we can consolidate in Europe and continue to be 

more efficient, give us the biggest bang for the buck. 

But when I joined the Army, we were probably over 300,000 in 

Europe. We are down to about 28,000 Army in Europe today. 

Ms. SHEA-PORTER. Great concern. Thank you. 

Admiral FERGUSON. Congresswoman, my statement was written 

concurrently or after. And I would say that, from the Navy perspective, we are improving our presence in Europe. I have a keen interest in that, since that is where I am going next. 

And so we are bringing online and finishing an Aegis missile site 

that is going to be based in Romania. We are stationing four of our 

advanced guided-missile destroyers in Rota, Spain. And providing 

missile defense coverage for Europe and be available there. 

So we are seeing demand for naval forces just like the Army not 

relenting in Europe. And so, as you think about the readiness 

piece, the point I would ask you to think about is, is from the naval 

perspective, we are investing in the forces forward and pushing 

them forward. 

And they are a force multiplier for us because one ship in Rota, 

Spain, is equivalent to three in the United States that rotate. 

So they are there. But that surge force, the non-deployed readiness, is where we have to watch very carefully that we have forces 

that can surge forward in times of a crisis. 

With respect to the basing structure, the Navy downsized its basing structure over the last 10 to 15 years, getting out of London, 

many of the northern European bases. We feel very confident that 

the structure we have—Rota, Spain, Sigonella, Naples, Souda Bay, 

use of Augusta Bay—that the structure there is very supportive, 
28 

looking both south toward Africa and those challenges, as well into 

Europe. So we feel very confident in our base structure. And again, 

confident that we have sustained the presence and are building it 

over time in Europe. 

Ms. SHEA-PORTER. Thank you. 

General PAXTON. Thank you, Congresswoman. 

And as I mentioned in—to your first question, statements were 

written concurrent, so we were aware of what was going on in Crimea and Ukraine and influences the way we do—prepare for the 

testimony, ma’am. 

One of the five pillars that I mentioned by which the Marine 

Corps measures readiness is our ability to meet combatant commander requirements. 

So to anticipate what EUCOM or SACEUR [Supreme Allied 

Commander Europe] could need over there and how any of the 

force services I think would respond is always foremost on our list. 

Because as we are fond of saying, the enemy always gets a vote 

here. 

To Congressman Palazzo’s question earlier, though, I mean, our 

amphibious ship capability and our MEUs [Marine Expeditionary 

Units], our expeditionary units, we used to have a fairly heel-to-toe 

and substantive footprint in the Mediterranean that we could move 

up into the Black Sea if we needed, or as Admiral Ferguson noted, 

could shift down to the littorals in the North African continent. 

But most of that MEU now is part of the theater reserve for the 

CENTCOM AOR [area of responsibility] and they move through 

the Red Sea and then are disaggregated and used by that geographic combatant commander. 

So, we only get access to that amphibious capability either on the 

way in or on the way out from the CENTCOM AOR. 

So, to have additional shipping, to not be in a 1:2 dwell and to 

be able to put naval forces—Navy and Marine—in the Mediterranean that could respond would certainly be a benefit, I know, that 

General Breedlove and the folks over there. 

And as with the other Vices here, we watch the European infrastructure—and that is an ongoing requirement that we have at 

OSD to make sure we get that right; that when we establish what 

the fiscal limits are on the floor is that we have sufficient basing 

capability and it is flexible enough that we can expand from there. 

So, thank you, ma’am. 

Ms. SHEA-PORTER. Thank you. 

General SPENCER. Congresswoman, I also prepared my statement 

concurrently with the recent events. 

But, you know, I generally sleep pretty good at night. But the— 

you touched on something that does keep me up at night, and that 

is that we are prepared to respond to anything across any spectrum 

of conflict that may arise. 

And none of us have been very good at predicting what is going 

to happen next. I don’t think anyone could have predicted 9/11— 

that we would be in Afghanistan. 

And the type of conflict we have been in over the last decade, you 

know, is sort of low-end, if you will, in terms of conflict. None of 

us like any conflict. 
29 

And I worry sometimes that we have been lulled into that is— 

you know, that is the way it is always going to be until things like 

this happen and so, you know, and if you look at—this is why we 

are all so afraid of sequestration. 

Because if you look at our budgets over the last century—if you 

look at World War II, you know, we went up in spending; the 

threat came down, we came down. 

Korean War, Vietnam, Cold War—they all had something in 

common. We built up, the threat went down, we came down. 

We are coming down now in funding and the threat is not coming down. And it is more dangerous. And that bothers me. That 

keeps me up at night. 

Ms. SHEA-PORTER. Thank you. 

I yield back. Thank you for allowing me to ask that. 

Mr. WITTMAN. Sure. Thank you, Ms. Shea-Porter. 

Gentlemen, I want to ask an overarching question. I have read 

all your statements; they do a very good job about expressing 

where the challenges are looking at what is needed to sustain. 

But I think there are three levels of concern here about readiness. Current states of readiness, the resources necessary for that 

readiness—and they occur at three different levels. 

One is where are we in a state of readiness now; where would 

we be if OCO dollars were to disappear; and where would we be 

in the face of sequestration? 

And I am going to ask you for your assessment—where we are 

now, where you would be if OCO were to disappear, where you 

would be if the sequester were to go into place. 

And what would the risk entailed in those three scenarios look 

like? And I would like for you to be very, very specific about what 

that risk would look like. 

And General Campbell, I will begin with you in getting your appraisal about those three elements and then where we would be 

risk-wise with our Nation’s military. 

General CAMPBELL. Sir, thanks for the question. As you know, 

for all of us, this is about prioritization. And if everything is a priority, then nothing is a priority. So, we really look hard at that. 

And then our senior leadership always makes decisions in terms 

of risk—risk to force and risk to mission. And we have to take all 

that into consideration. 

And the uncertainty of the budget has caused us to be all over 

the map on the risk piece. And so, that is what keeps me up at 

night—is the uncertainty of not knowing as—along with what 

Larry said on the world that we live in today; we have to prioritize 

that. 

So, I talked about tiered readiness. I talked about progressive 

readiness—and progressive readiness is really what we were able 

to do when we had a predictable budget and we were growing. 

And so, in Iraq and Afghanistan, progressive was an Army Force 

Generation model that had brigade combat teams—all the enablers 

have what they need at a certain points in time; they continue to 

get ready, then they deploy. 

We don’t have that luxury now. So, we have to prioritize. 

And on tiered readiness, what we do is we make sure that the 

deployers—so, everybody going to Afghanistan, you are going to 
30 

have what you need. If you are in Korea and forward deployed, you 

are going to have what you need. If you are in the Global Response 

Force, you are going to have what you need. 

But everybody else, based on that, their readiness is going to 

continue to drop. And therefore, if we have other contingencies that 

we have to respond to, ma’am, as you talked about, it is going to 

take more time and more resources. 

If we don’t have that time, you are still going to expect us to deploy these soldiers and they are going to go at more risk. 

So, today, what I would tell you is that all of our forces going 

to Afghanistan, we are providing them the right resources; all in 

the Global Response Force, the right resources; forward deployed 

like in Korea, the right resources. 

We are building up our short-term readiness based on what you 

have given us for 2014 and 2015. But again, as everybody stated, 

we went down in a hole in 2013. That is going to take some time. 

But I feel much better today than where I was 2 or 3 months 

ago, because we are building it up. 

With the additional monies, we will fund our combat training 

centers. We will be able to get more brigades through; we will have 

much higher readiness 

But if sequestration comes, that drops back off, and then we will 

only be able to focus on a smaller number; and again, it will probably be those forward deployed—it will be those in a Global Response Force. 

If OCO goes away, what I would tell you—OCO funds everything 

in Afghanistan for us. But it also funds a lot more that we have 

been accustomed to. And we are now trying to figure out what we 

can do if we don’t have that OCO. 

So, Operation Spartan Shield for CENTCOM—many of those 

forces, forward deployed Patriots—those type of things; the missile 

defense—that is all covered in OCO right now. And if we had to 

bring that back into our base budget, that means we are going to 

have to cut more things. So, we have to look very hard. 

The issue with OCO is we go year to year. And so, there is no 

predictability. But your Army is working very hard on how we can 

work through the OCO piece. 

As you know, in 2013 with sequestration, because of the issues 

with OCO, we had to figure out how we could pay the war-fight. 

And we had to take money out of our base budget to pay for the 

war-fight because of the issues that we had with OCO. 

And people think, as we come down, that our OCO requirement 

is going to go down. It is the opposite. As you come out and all that 

equipment we have to bring out, our OCO—and go back and look 

at Iraq and people go back and look at how much OCO we spent 

in the last 6 months and the first 6 months after coming out of 

Iraq; it was much higher. 

So, you know, when we look at it—‘‘ah, you don’t need OCO’’— 

that is absolutely wrong. We have been very consistent on OCO for 

reset. 

So, in the future, if we don’t have OCO to reset the equipment 

that we need for any of these contingencies, that risk would drive 

up even higher. 

Mr. WITTMAN. Thank you, General Campbell. 
31 

Admiral Ferguson. 

Admiral FERGUSON. I will echo that all of us are in the difficult 

prioritization business. So, our current state of readiness today. 

We are meeting about 44 percent of the combatant commander 

demand for naval forces. So, that means that we are funding two 

carrier strike groups, two amphibious ready groups, about 13 submarines—you know, some number, approximately 10, of missile defense ships. 

But it is a supply-based model in a sense that the readiness dollars that we are given—we ensure those forces are fully trained, 

ready, confident to meet the demands. 

And we take risk in the surge and we take risk in what is available in non-deployed forces. We have a backlog in aviation depot 

maintenance; we have a backlog in ship depot maintenance. With 

the money you have given us under the BBA, we are working 

through that to get through it. 

As you talk about sequestration, I gave Ranking Member 

Bordallo a list of the procurement things. 

But there are some other force structure things that would happen. We would have to decommission the carrier and the air wing. 

We could not afford it—it is a $7 billion bill to us across the next 

5 years. 

We would have to put six additional guided-missile destroyers 

into phased modernization plan, take them out of service; we would 

reduce aircraft procurement, as well. And so, you know, we would 

have to draw down those accounts with greater backlogs and maintenance. 

So, the law—the sequestration piece, as I articulated, is a smaller Navy. And we now start to not meet—we won’t be able to meet 

the strategy because of the force demands. 

And there is a mismatch between what the combatant commanders are asking for versus what we will be able to provide. 

On OCO, as I mentioned, it is about $7–$8 billion a year. It 

funds the CENTCOM operations that we are having, and 

AFRICOM [U.S. Africa Command]; it funds all the [Operation] Enduring Freedom for us. As I said, about $2.2 billion is reset—so, 

that is a maintenance backlog that would just accumulate—and accumulates every year in a growing way and compounds. 

And then the last piece is there is some enduring—it is about $2 

billion that we would have to migrate over time into the base budget. But we would lose that, as well. 

We would have to go into the other accounts to cover that bill 

at $7–$8 billion a year procurement, research and development. 

We start to mortgage our future to trade—to meet the demands 

of the present and have less surge to answer what the Nation’s call 

is. That is the summary for us. 

Mr. WITTMAN. Thank you, Admiral Ferguson. 

General Paxton. 

General PAXTON. Thank you, Chairman Wittman. 

Sir, within the Marine dollar, if you will, we spend roughly 63 

cents of that dollar on our manpower accounts to get the right people, to properly train them, to put them in the right units, to make 

sure they are at the right position, ready to deploy. 
32 

The next 27 cents on that dollar is the actual operations and 

maintenance cost to get them around the world and do what our 

Nation needs them to do. 

Right now, it is that last 10 cents on the dollar that is split between our facilities sustainment, restoration, modernization, and 

our overall modernization accounts. 

So, as both General Campbell and Admiral Ferguson said, we are 

actually—we are mortgaging our future. 

There is a cost to the All-Volunteer Force. We are incredibly 

proud of it. It is the best Army, best Navy, best Air Force, best Marine Corps our Nation has had in many, many years, and has 

served us very, very well, our soldiers, sailors, airmen, and marines, in conflict the last 12 years. 

But there is a cost to the All-Volunteer Force. So the OCO money 

is what is actually so important to all the services for the actual 

execution of the missions and then the reset afterwards. 

As General Campbell said, we have the same challenge in the 

Marine Corps. Fortunately, we have reset about 79 percent of our 

equipment coming out of Afghanistan. A year ago, when I was before the committee, it was $3.2 billion and almost 3 years to finish 

the reset. That is down to about $1.3 billion now and only about 

21 percent still left over there. 

But that is not an insignificant amount of equipment that we 

need to train on and it is not an insignificant amount of money. 

So the OCO is very, very important to us. 

And the risk in the future, sir, as General Spencer said earlier, 

with each time that we don’t have the equipment we need, it is not 

properly reset, it is not in the maintenance pipeline, then we still 

have the squadrons that need to fly and the pilots are ready to fly, 

but there is less forward aircraft for them to do that. 

And we get this death spiral. And they don’t get the night-vision 

ops they need, they don’t get the feet dry ops they need on the big 

deck carrier, and the bounces. And it takes us longer and longer 

to be ready. 

So the risk for our force and to the Nation is actually the risk 

to the mission in that we would probably be slower to respond to 

the fight, get in there, do exactly what we need with the first 

round, but our bench won’t be as deep and unfortunately we will 

probably see more casualties. 

Thank you, sir. 

Mr. WITTMAN. Thank you, General Paxton. 

General Spencer. 

General SPENCER. Mr. Chairman, a similar story to my colleagues here. Currently our readiness is not where we need it to 

be. 

You know, the current war that we are in, the combination of sequestration, standing down airplanes last year, has put us in a position we don’t want to be in. 

And it—some might say, well, you are over flying in a war, you 

are getting ready. No, some of the challenges that the Congresswoman mentioned, they are—our pilots and our crews are not 

training for the—have not been training. So we are not where we 

need to be today. 
33 

If OCO disappears, then that risk goes up because—for several 

reasons. One is, we need to reset once we come out of Afghanistan. 

So we need to bring airplanes back, get them into depot. We need 

to bring equipment back, get the equipment repaired. 

And we also need to make sure that our folks get back and get 

trained. 

In addition to that, so reset is just a piece of that. The other half 

of that is we have enduring bases that we have been told are going 

to remain. 

So bases that are over there, that are in the theater right now, 

that are being paid for by OCO, that are costing us $2 billion a 

year, we would have to drag that money into the base budget, and 

it is going to come right out of readiness account because we can’t 

take it from anyplace else. 

And then—so you are talking about level of pain all the way 

down to sequestration. So it is a—again, that is what we all talk 

about. 

As I mentioned to you I think the other day, or maybe it was yesterday, we—this is not—we don’t get a Super Bowl and get to lose 

and come back. I mean, we have to win. And so we want to make 

sure that when we go, it is not a fair fight, we win and we come 

back. That is what the American people expect. 

That is why we are so worried about this. 

Mr. WITTMAN. Very good. 

General Spencer, can you give us your assessment of what increased risk would be for the Air Force? And what is the manifestation of that? 

General SPENCER. Well, if—as you look at our current—if we go 

into sequestration as an example, and it has been said, we will not 

be able to—and I am not sure—folks may not understand the impact of this, the current Defense Strategic Guidance that we have, 

we cannot do it. So we just won’t have the capacity to respond to 

what we say we can respond to today. 

And so, now would we go? Absolutely we would. We would go 

with everything we had. But you are talking about now a longer 

conflict. You are talking about more lives lost. You are talking 

about something the American people don’t expect from us. 

Mr. WITTMAN. Right. 

General SPENCER. So it is serious. It is deadly serious. 

Mr. WITTMAN. Very good. Thank you, General Spencer. 

I want to go back to General Campbell. You had mentioned a little bit earlier your assessment of what increased risk would look 

like for the Army under these different scenarios. 

Can you give us a little additional elaboration on that? 

General CAMPBELL. Sir, again, the Army is all about people. We 

don’t have the big platforms but it is people. So for our money, 

about 48 percent of that goes to the people. And the risk is as we 

continue to downsize that piece, we can’t bring the people down 

quick enough to keep in balance and that is what we need to do. 

We don’t want to have a hollow Army like we had after Vietnam. 

To do that, you have to balance your modernization, your end 

strength, your force structure, and your readiness. And we continue 

to try to do that. 
34 

Again, the uncertainty is the greatest piece that inhibits us from 

having the opportunity to do that. I am also worried about the risk 

that we have for the All-Volunteer Force that General Paxton 

talked about. You know, we have the greatest services because we 

have had this All-Volunteer Army for the last 40-plus years. 

But they are watching now what Congress is doing, what we are 

doing. Are we taking away their pay? Are we taking away compensation? Do we not value their service? 

I would disagree with Mr. Enyart where he talked about—he 

didn’t say lose, but I got the impression he said we were losing. If 

we try to tell our soldiers in the last two wars that we are losing, 

that is absolutely wrong. 

If you go to Iraq, if you have been there, we set the government 

up for success. Now that has changed since we left. We are doing 

the same thing in Afghanistan. And so our men and women of all 

the services, I think, have done incredible for the wars. 

But I worry about if we will be able to maintain the best talent, 

as we go forward. If they know that we are not going to be able 

to take care of them, if they know that we are not going to have 

the money to provide them the best training, the moms and dads 

won’t have their children come in the service. 

My son enlisted in the Army. He is on his second tour in Afghanistan today. He comes back and says, ‘‘Hey, Dad, you generals, you 

have to get it right. We have to have what we need.’’ He definitely 

understands what he is doing over there is making a difference in 

the lives of many Afghan people and that big part of the region. 

And my fear is that we will not continue to bring in the best and 

brightest that our Nation has to offer. 

We have less than one-half of one percent serve this country. 

Several years ago, probably 3 out of 10 young men and women 

could serve in any of the services, would qualify. That number is 

probably about 22.5 percent today based on medical issues, criminal issues, obesity, on and on. 

So that is something we got to look—we are looking at the 50- 

meter targets. We better start looking at these 300-meter targets 

to enable us to keep the best men and women coming into all of 

our services. That is the risk. 

Mr. WITTMAN. Thank you, General Campbell. 

Admiral Ferguson, I would like you to elaborate a little bit, too, 

on what increased risk would be in terms of how the Navy envisions that? 

Admiral FERGUSON. Under sequestration? 

Mr. WITTMAN. Yes. 

Admiral FERGUSON. Okay. 

Mr. WITTMAN. Yes. 

Admiral FERGUSON. As I mentioned earlier, we would be a smaller Navy. We would have less capability against the high-end adversary. And pacing that high-end adversary in terms of our ability to 

project power into certain environments around the world. 

Second, less capacity. In the sense that as a smaller force, we 

would have less to surge to a second operation if we are engaged 

in a first one around the globe. 

With a smaller force under sequestration, we would have great 

pressure from the combatant commanders to deploy for prolonged 
35 

periods of time, turn around the forces quicker. You wear out the 

equipment at a faster pace. 

But the concern, to echo General Campbell, is a concern about 

the people. We are predominantly a career force. And we rely on 

a very high caliber of young men and women that come into the 

service with great technical skills and scores and a great commitment to serve. 

They are extraordinary. And we rely on them. And you know, we 

have to be concerned about the retention of that force as a career 

force in the future. 

And to me, that is the institutional risk that if they look around 

and they see that they don’t have the spare parts to do their job, 

they are not getting trained, they are—I spent some time with a 

group of aviation commanding officers out at North Island. And I 

try to visit the force before I testify. And their number-one issue, 

the young pilots’, was the flight time so they can gain the skills 

and experience to serve. 

And they were frustrated that they were lacking parts, that they 

were lacking airplanes with flight hours, or the flight time in order 

to develop their own professional skills and serve. 

And I think we have to be extraordinarily mindful of the fact 

that they look to their future to be proficient and great leaders in 

their field. 

And if they don’t see the investment of the parts, the training, 

and in their future, we are at risk of losing them. And to me, that 

is the institutional risk that we face. 

Mr. WITTMAN. Let me ask you to expand a little bit on that. I 

think it is spot-on about the institutional risk and the retention 

issues that come from that. 

Tell me what does it mean, though, in terms of the lives of our 

sailors as they go to sea, as they go into aircraft, or if we put them 

in situations where they don’t have as much training or they don’t 

have the full skill set when we put them into those situations in 

a combat situation. 

Give me your perspective on that, if you would? 

Admiral FERGUSON. Yes. I would tell you that, and I think I 

speak for all of us, we consider it a sacred trust that we don’t send 

untrained people into combat. We have to give them the very best. 

And so, when we make these trades, we will ensure that the 

forces we have are ready. But those that are not on that cyclic deployment, that are sitting back at shore station, are the next to go, 

they will see this degradation under sequestration. 

And to me, that is where the elements of retention loss may start 

to grow. 

And so, you know, we will always invest in them, but it will be 

a smaller force; they will have less behind it. And, you know, as 

I think ahead about the strategic challenges in the future, the 3 

to 5 years, it will be upon balancing this demand and the retention 

and the risk. 

Because when you get into a retention crisis, those of us that 

lived through it in previous years, it is awful tough to pull out of 

it, once it starts. 

Mr. WITTMAN. If we get into a demand scenario where you have, 

obviously, that ready force that is ready to go, but the demand sig-
36 

nal surpasses that and then you have to go to those units that 

don’t have that elevated tier of readiness, give me a perspective on 

what it means there. 

I mean, I look at it from this perspective: We either have two 

choices. We either say we are not going to send them, which in 

many instances is not a choice, or if we send them, at increased 

risk to them and few of them coming back from the battlefield 

under that scenario. 

I wanted to get your perspective on that. 

Admiral FERGUSON. Well, certainly I think in sequestration, 

there are two risks. The first risk is that because we haven’t made 

investments in our future capability, there is not enough force 

structure, that they are at a disadvantage in facing a high-end adversary. 

That is—and then, it is very easy to do the modeling, after that, 

and you have to adjust the war plans or adjust the execution of 

your mission or you accept higher risk with loss of assets and the 

accompanying casualties. 

You know, we would certainly apply every level of effort to avoid 

that, but that is—you know, as you project out, under a sustained 

period of sequestration with a smaller Navy, against a high-end adversary, I think that is a risk that you have to be very careful of. 

Mr. WITTMAN. Very good. 

Gentlemen, thank you. I appreciate what you have laid out for 

us with the challenges going forward. I appreciate, too, every one 

of you saying that in these scenarios increased risk means a lot of 

different things to the Nation, but at the end of the day, it is about 

the brave men and women that volunteer to put themselves into 

harm’s way, and that that increased risk does mean for them potentially, if we don’t get this right, higher casualties, issues with 

sustainment of the force. 

All those things I think are very, very compelling about why 

Congress needs to do its job to address this issue and make sure 

that things are properly resourced. 

We understand the challenges with this Nation’s budget. We understand the deficit and the debt. Those things are very important, 

too. But we also understand our constitutional responsibility under 

Article I, Section 8, and that is something that I think all of us 

here need to remind ourselves of that, every day. 

And we appreciate each of you for your leadership. Please thank 

your soldiers, your sailors, your marines, and your airmen for their 

service to our country. 

And please pass on to them, too, the thanks of this committee 

and this Congress to their families, who also sacrifice in keeping 

this Nation safe. 

Gentlemen, thank you again. 

If there are any—no other questions? 

Ms. BORDALLO. I do. 

Mr. WITTMAN. You do? Yes? 

Ms. BORDALLO. Thank you, Mr. Chairman. I would just like to 

make a few personal comments. 

After hearing from the vice chiefs this morning from all the services, I think this indeed presents a grim picture. 
37 

And I just returned with the chairman from a very interesting 

trip to Afghanistan and different places in Africa. And I was 

amazed at the morale of our service men there. In spite of the 

harsh conditions that they are undergoing, they seem to be pleased 

with what they are doing and happy to go helping with the training of the soldiers in these different countries. 

And it would be a shame, as you said, you know, to continue to 

cut the budgets and find that they do not have the equipment and 

so forth. And I think it will bring down recruitment, definitely. 

So I just want to say that we were just so astounded with the 

friendliness and the performance of our men and women in service 

in all these different areas. 

And I just hope that Congress can rectify what has happened 

with the decrease in the budgets. And that is the—and I praise you 

for continuing to try to work out things as much as you have to, 

to cut the funding from every program under your supervision. 

And, again, I want to thank you for your testifying this morning. 

And, as I said, I hope we can rectify some of these problems. 

Thank you. 

Mr. WITTMAN. Very good. Thank you, Ms. Bordallo. 

If there are no other comments, the committee is adjourned. 

[Whereupon, at 9:45 a.m., the subcommittee was adjourned.] 

A P P E N D I X 

APRIL 10, 2014 

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DOCUMENTS SUBMITTED FOR THE RECORD 

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WITNESS RESPONSES TO QUESTIONS ASKED DURING 

THE HEARING 

APRIL 10, 2014 

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RESPONSE TO QUESTION SUBMITTED BY MR. PALAZZO 

General SPENCER. Due to the experience and training of the flight crews and 

maintainers at Little Rock Air Force Base, we expect they could be at full operational capability much sooner than the usual 12 to 24 months needed for other 

units that do not have Little Rock’s level of experience. This move will not affect 

readiness. The Fiscal Year 2015 President’s Budget (FY15 PB) request reduces the 

C–130 fleet from 358 (FY14) to 318 aircraft (FY15), then increasing to 328 (FY19) 

with C–130J procurement. This number is still above the tactical airlift operational 

requirement. [See page 15.] 

RESPONSE TO QUESTION SUBMITTED BY MR. BARBER 

General SPENCER. The Air Force provided the operational analysis briefing, with 

focus on the A–10 divestment decision, to Congressman Barber on May 9, 2014.

[See page 21.] 

RESPONSE TO QUESTION SUBMITTED BY MRS. NOEM 

General SPENCER. In the Fiscal Year 2012 President’s Budget, the Air Force requested authority to retire three combat coded B–1 aircraft, but this was reversed 

in the National Defense Authorization Act for Fiscal Year 2012 (FY12 NDAA). The 

FY12 NDAA actions did not provide funding for these aircraft and the Air Force 

topline did not permit funding. The Air Force maintains the aircraft as combat 

coded, but in backup aircraft inventory (BAI) status, which earns no manpower or 

flying hours. We maintain their ability to meet Defense Planning Guidance, meaning we are funding sustainment and modification to keep the airframes relevant. In 

order to operate these B–1s daily as a primary aircraft, it would require $58 million 

per year—$26 million for active duty officers and enlisted personnel and $32 million 

for flying hours. [See page 22.] 

QUESTIONS SUBMITTED BY MEMBERS POST HEARING 

APRIL 10, 2014 

(117) 

QUESTIONS SUBMITTED BY MR. WITTMAN 

Mr. WITTMAN. What level of unit readiness does the President’s Budget Request 

assume? If funded at the budget request level, how long until we regain sufficient 

full spectrum readiness? 

General CAMPBELL. The President’s Budget (PB) balances risk from low core readiness (due to the Army’s commitment to counterinsurgency operations since 2001) 

with re-structuring and end-strength drawdown in order to build decisive action 

readiness across the full spectrum of conflict. 

Additionally, the combined effects from the Budget Control Act (BCA), previous 

shortfalls to Overseas Contingency Operations funding (OCO), and the impacts from 

emergent and undocumented demand for Army forces by combatant commanders 

has impacted and delayed this transition. For example, the BCA forced the cancellation of seven combat training center rotations in FY13, while all but select Army 

units were forced to reduce training to the squad and platoon levels. 

Given these other variables and funding at the PB levels, the Army will not regain the appropriate balance across modernization, procurement, readiness, and 

manpower accounts until FY 2019 and will regain sufficient full spectrum readiness 

across the total force by FY 2023. 

Mr. WITTMAN. Much of the $26 billion Opportunity, Growth, and Security Initiative (OGSI) Fund is aimed at mitigating short-term readiness shortfalls. If funded 

at the budget request levels, what additional readiness shortfalls are present within 

the Army? Can we expect the OGSI to mitigate all or most of these? What is the 

impact or risk if OGSI is not funded? 

General CAMPBELL. The combined effects of sustained operational demand for 

Army forces and budget reductions have resulted in a decline in unit readiness 

across the Total Army. In order to build decisive action capabilities in Fiscal Year 

(FY) 2015, the Army has prioritized funds to train forces in the Army Contingency 

Force (ACF); however, due to top line funding decreases, the Army has accepted risk 

in the readiness of multifunctional and theater support brigades as well as in home 

station training, facilities, and equipment sustainment and modernization programs. 

The Army’s 7.5 billion dollar share of the Opportunity, Growth, and Security Initiative (OGSI) is currently programmed in our base budget submission to accelerate 

training readiness (2.0 billion dollars), enhance installation readiness (2.4 billion 

dollars) and continue equipment modernization (3.1 billion dollars). While this infusion would not eliminate all risk, the OGSI provides the necessary resources to mitigate several areas of concern left uncovered at the budget request level to include: 

expansion of progressive operational training beyond the ACF to meet Combatant 

Commander demands and improve Army National Guard and US Army Reserve 

readiness levels; increasing installation sustainment and base operation support levels to 90% of requirements across the Total Army; and accelerating equipment modernization to ensure we maintain the technological advantage over any potential adversary. 

The current level of funding programmed for FY15 only generates the bare minimum level of readiness required to meet the Defense Strategy. The budget caps in 

FY16 and beyond further hinder our ability to shape the Army for the future while 

simultaneously and severely degrading Army readiness and modernization efforts. 

Our objective is to preclude hollowness in our force as we continue to draw down 

and restructure the Army by achieving balance between readiness, end strength and 

modernization. The OGSI is an essential tool in this process. 

Mr. WITTMAN. The Army in particular has faced cuts in force structure (depth/ 

capacity) and deferred much needed modernization (capability). How would this 

dual degradation in depth and capability impact the ability to respond to a major 

contingency? How would you characterize the risk associated with the Army’s current state? Is today’s Army today sufficient to meet OPLAN and CONPLAN requirements? 

General CAMPBELL. If allowed to continue, the Budget Control Act spending caps 

can result in an Army end-strength of 920,000 in FY19. At this force level, the Army 

would not have the appropriate depth/capacity or capability to successfully conduct 

all components of the Defense Strategic Guidance (DSG), under terms acceptable to 
118 

the United States. With a total Army end-strength of 920,000, it is likely that U.S. 

forces would be unable to sustain conflict long enough to mobilize, train, and deploy 

additional formations. Further, the Army would be unable to respond quickly or decisively enough to ensure an outcome consistent with American goals and objectives; 

any outcome that is achieved would come at a much higher cost in terms of blood, 

treasure, and time. 

I would characterize the risk associated with the Army’s current state as moderate. Although the Army presently has the force structure to meet DSG requirements, it lacks the readiness to ensure success under terms acceptable to the nation. 

Mr. WITTMAN. Budget materials cite the creation of, and the provision of, resources to support the training of an Army Contingency Force (ACF) consisting of 

infantry, armor, and Stryker BCTs, an aviation task force, and associated enabling 

units. How large will the ACF be in terms of BCTs? If the Army is uncertain, how 

is there confidence that the budget request is adequate to support the training and 

operational requirements of the ACF? 

General CAMPBELL. The amount of Army units dedicated to the Army Contingency 

Force (ACF) is certain. However, the amount of contingency forces remains classified. The ACF was designed to provide combatant commanders with the most ready 

contingency force possible given constraints from global demand for rotational forces 

and reduced funding due to the Budget Control Act (BCA) and other resourcing 

shortfalls. The amount of forces designated to be in the ACF has grown, and is expected to continue growing, as both funding is restored and operational commitments lessen or change. 

Today, there are three variables impacting the training and operational requirements of the ACF. First and foremost, funding is required to adequately build readiness and train units to a level of proficiency that is necessary to maintain an appropriate contingency readiness posture within Army units. Without adequate funding, 

the Army will be unable to build readiness to man, equip, sustain, and train units 

during this vital transition period from counterinsurgency to decisive action operations. Second, predictable and sustainable demand for forces from the combatant 

commanders is needed to adequately plan and balance resources for current operations against the need to build a contingency force. Recent emergent and undocumented demand for Army forces, while not un-expected, further impacts the ability 

of the Army to re-build contingency readiness. Finally, the combined effects of the 

accelerated drawdown to 490,000 active component Soldiers and BCT re-organization by the end of FY15 have impacted the readiness of ACF units. These effects 

include impacts to Soldier and equipment availability and unit training proficiency. 

The ACF was designed as a bridging strategy to maintain a contingency capability 

for crisis response until the Army can re-build a sustainable readiness posture 

across the Total Army. 

Mr. WITTMAN. What level of unit readiness does the President’s Budget Request 

assume? If funded at the budget request level, how long until we regain sufficient 

full spectrum readiness? 

General CAMPBELL. The President’s Budget (PB) balances risk from low core readiness (due to the Army’s commitment to counterinsurgency operations since 2001) 

with re-structuring and end-strength drawdown in order to build decisive action 

readiness across the full spectrum of conflict. 

Additionally, the combined effects from the Budget Control Act (BCA), previous 

shortfalls to Overseas Contingency Operations funding (OCO), and the impacts from 

emergent and undocumented demand for Army forces by combatant commanders 

has impacted and delayed this transition. For example, the BCA forced the cancellation of seven combat training center rotations in FY13, while all but select Army 

units were forced to reduce training to the squad and platoon levels. 

Given these other variables and funding at the PB levels, the Army will not regain the appropriate balance across modernization, procurement, readiness, and 

manpower accounts until FY 2019 and will regain sufficient full spectrum readiness 

across the total force by FY 2023. 

Mr. WITTMAN. Much of the $26 billion Opportunity, Growth, and Security Initiative (OGSI) Fund is aimed at mitigating short-term readiness shortfalls. If funded 

at the budget request levels, what additional readiness shortfalls are present within 

the Services? Can we expect the OGSI to mitigate all or most of these? What is the 

impact or risk if OGSI is not funded? 

General CAMPBELL. The combined effects of sustained operational demand for 

Army forces and budget reductions have resulted in a decline in unit readiness 

across the Total Army. In order to build decisive action capabilities in Fiscal Year 

(FY) 2015, the Army has prioritized funds to train forces in the Army Contingency 

Force (ACF); however, due to top line funding decreases, the Army has accepted risk 
119 

in the readiness of multifunctional and theater support brigades as well as in home 

station training, facilities, and equipment sustainment and modernization programs. 

The Army’s 7.5 billion dollar share of the Opportunity, Growth, and Security Initiative (OGSI) is currently programmed in our base budget submission to accelerate 

training readiness (2.0 billion dollars), enhance installation readiness (2.4 billion 

dollars) and continue equipment modernization (3.1 billion dollars). While this infusion would not eliminate all risk, the OGSI provides the necessary resources to mitigate several areas of concern left uncovered at the budget request level to include: 

expansion of progressive operational training beyond the ACF to meet Combatant 

Commander demands and improve Army National Guard and US Army Reserve 

readiness levels; increasing installation sustainment and base operation support levels to 90% of requirements across the Total Army; and accelerating equipment modernization to ensure we maintain the technological advantage over any potential adversary. 

The current level of funding programmed for FY15 only generates the bare minimum level of readiness required to meet the Defense Strategy. The budget caps in 

FY16 and beyond further hinder our ability to shape the Army for the future while 

simultaneously and severely degrading Army readiness and modernization efforts. 

Our objective is to preclude hollowness in our force as we continue to draw down 

and restructure the Army by achieving balance between readiness, end strength and 

modernization. The OGSI is an essential tool in this process. 

Mr. WITTMAN. Which readiness accounts are you most concerned about? What can 

we do to help? If provided with extra budgetary authority, what would you seek to 

do? 

General CAMPBELL. For FY15, the priority Army readiness accounts include Operation and Maintenance funding for all components in Land Forces (Sub Activity 

Groups 111–116) that are vital to executing the collective training required for units 

to build readiness to deploy. Additional funding would support restoring training 

readiness for Non-Contingency Force units, Multi-Functional Brigades, and other 

enabler units throughout the Total Force. Any additional remaining funding would 

support critical Skill Progression (Enlisted) and Additional Skill Identifier training, 

as well as technical and war-fighting skills training and Reserve Component Training Pay and Allowances for Schools. This would enable Soldiers to complete Initial 

Skill Acquisition/Specialized Military Occupational Specialty training and Leader 

Development training. Additionally, the Army’s investment programs for Combat 

Training Center Support, Non-System Training Devices, Close Combat Tactical 

Trainer, Aviation Combined Arms Tactical Trainer and Gaming Technology in support of Army Training, remain vital to the modernization and life cycle management 

of current Training Support Systems, and would benefit from additional funding as 

well. 

Mr. WITTMAN. Can you articulate the impact of cancelled training that occurred 

over the last two years as a result of sequestration? 

General CAMPBELL. Sequestration caused the Army to cancel seven Combat Training Center rotations in FY13 and two rotations early in FY14. This directly delayed 

the Army’s ability to return to Decisive Action proficiency in support of Unified 

Land Operations and denied essential leader development training for a large cohort 

of leaders; specifically, 270 company commanders, 180 field grade officers and 54 

Battalion commanders missed this critical developmental experience. Sequestration 

also forced the Army to reduce funding for all units to individual/crew/squad level 

in FY13, which created a significant reduction in unit readiness that requires extensive time to regenerate. The Bipartisan Budget Act has provided some relief to 

begin rebuilding readiness in FY14 and FY15, but that readiness is again in jeopardy in FY16 when the Budget Control Act spending caps exert more downward 

pressure on funding. 

Mr. WITTMAN. How dependent are you on OCO for day-to-day operations? How 

will the dependence change after the majority of, or possibly all, combat troops are 

out of Afghanistan? 

General CAMPBELL. The Army is critically dependent on OCO to support the dayto-day war fighting demands of Operation Enduring Freedom (OEF). After the departure of all U.S. troops from Afghanistan, the Army must continue to satisfy Combatant Commanders’ operational demands, such as Operation Spartan Shield, Integrated Air and Missile Defense, and other overseas missions. Current U.S. National 

Security Policy dictates a sizeable U.S. troop presence in key regions to support U.S. 

vital interests and those of our allies. Many of these requirements are paid for from 

OCO. Furthermore, the Army needs OCO funding for three years after the last piece 

of equipment returns from Afghanistan so that it can fully execute the equipment 

Reset program. 
120 

Mr. WITTMAN. Please describe the enduring, non-Afghanistan-related requirements your service funds through OCO. How would you address those requirements 

in the absence of OCO? 

General CAMPBELL. Some overseas operations, including Operation Spartan Shield 

in the Persian Gulf, are primarily supported with OCO funding in FY14. Many of 

these forces support operations in Afghanistan, but may remain in Central Command the theater following the end of the conflict to support any other efforts. Without OCO, these requirements would still need support and would demand tough decisions in the base budget that would impact readiness, sustainment, and investment accounts. The end of OCO funding would increase demand for base budget resources, impacting operations world-wide, including: Resolute Support, Operation 

Spartan Shield, Horn of Africa, and the Philippines. These overseas presence missions are critical for security and maintaining relationships with our Allies. 

The eventual end of OCO funding with no corresponding increase to the Army’s 

base budget would lead to reduced readiness due to shortfalls in programs such as 

Depot Maintenance and Reset. The Army will require Reset funding for three years 

after the last piece of equipment leaves Afghanistan. The Army will require over 

$9 billion in Reset funding through FY18. Training previously funded with OCO for 

readiness will need to be part of the base budget when the OCO-funded Deployment 

Offset stops. Increasing pressure on static or declining toplines will impair our ability to sustain training readiness and to restore infrastructure and equipping readiness in future years. 

The Army has used OCO funding for these critical requirements and will require 

funding in the future to pay these bills. The Army’s Base Budget topline will need 

to increase to capture these enduring requirements. 

Mr. WITTMAN. Please describe your service’s efforts to migrate enduring requirements into the base budget. How challenging has sequestration made that task? 

What is most at-risk? 

General CAMPBELL. The Army is in the process of updating the validation of enduring Operation Enduring Freedom (OEF) and other requirements that need to be 

brought into the base budget. Fiscal uncertainty and funding under sequestration 

compels prioritization and trade-offs between funding current operations, training to 

build readiness, and modernization. Over the long term, if the Army is not provided 

adequate base funding for enduring OCO requirements, it will significantly degrade 

combat readiness. 

Mr. WITTMAN. Although you may not be able to discuss specifics until the FY15 

OCO budget is officially released, how confident are you in the adequacy of this 

year’s OCO budget request? How much of your services’ operations, maintenance, 

and training requirements are met by the base budget? 

General CAMPBELL. The Army is confident that if the pending FY15 OCO budget 

request is enacted it will adequately support warfighting requirements. 

The FY15 Army base budget funds 19 Combat Training Center exercises that will 

validate Brigade Combat Team readiness for units designated to achieve a high 

level of readiness. All other units will achieve lesser training readiness at battalion 

or lower levels. The ARNG and USAR are funded to achieve Individual/Crew/Squad 

levels of readiness. The budget request funds depot maintenance to less than 50% 

of the requirement, reflecting risk taken to meet Army priorities, but still supporting critical requirements and core capabilities in aviation, communications and 

electronics systems, embedded software systems, general purpose items, and combat 

and tactical power. Facility sustainment is funded at less than 65% across all 

compos, with the Active Force funded at 62%. 

Mr. WITTMAN. How would your overall readiness be affected by the elimination 

of OCO? What training would be curtailed? What infrastructure would be affected? 

How would ability to maintain equipment and fully staff units be affected? 

General CAMPBELL. Terminating Overseas Contingency Operations (OCO) funding 

too early would have very serious consequences on the Army’s ability to rebuild and 

sustain readiness. Many of the Army’s enabling capabilities are funded in OCO to 

include such activities as commercial satellite airtime, enduring portions of the 

Criminal Investigation Command’s (CID) Deployable Forensics Labs, contract 

MEDEVAC, and Contractor Logistics Support. The Army is still reliant on OCO 

funding to support portions of forward deployed unit costs, such as those involved 

in Operation Spartan Shield and the on-going Integrated Air and Missile Defense 

(IAMD) mission in the Persian Gulf, as well as significant network operations costs. 

There are enduring capabilities such as comprehensive Soldier and family fitness activities that engender resilience throughout the force. Elimination of OCO funding 

would force the Army to find offsets within base funding to support these actions. 

From a readiness perspective, the training of next deploying units is funded via 

OCO. This training is non-negotiable. If OCO is prematurely ended, the Army must 
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accept additional risk by curtailing or eliminating decisive action training for non 

Army Contingency Force (ACF) units, and potentially even reducing training for 

units in the ACF as well, to offset the bill. Equipment maintenance would also suffer as the Army would focus all maintenance on the next deploying and deployed 

forces creating additional risk in our other formations and creating a backlog of 

reset and other depot maintenance activities that eventually must be cleared. 

While the elimination of OCO funding would not directly impact Army infrastructure accounts, these accounts would most likely suffer indirectly as a result of the 

need to reduce base accounts in order to offset critical activities formerly supported 

by OCO. This would result in reduced construction of new projects as well as an 

overall degradation of facilities with authorized repairs only addressing base life, 

health and safety concerns. 

In addition, if Congress does not provide at least 3 years of OCO funding for 

Reset, some of the Army’s most modern and capable equipment that was used in 

Afghanistan will not be Reset, thereby negatively impacting equipment serviceability and availability. Reset funding is critical to reversing the effects of combat 

stress on equipment and has been instrumental in sustaining readiness at over 90% 

for ground and 75% for aviation systems. Resetting the remaining equipment in Afghanistan will improve Total Army Readiness of equipment on-hand from approximately 88 percent to 92 percent. Reset funding must be spread over a three-year 

period to align with available Industrial Base capacity and flow of equipment retrograde. These factors include: the volume of equipment currently undergoing Reset; 

the pace of equipment retrograde from theater; the available capacity within the industrial base; and the repair cycle times of major systems. For example, due to the 

previously mentioned factors, the Army cannot immediately and simultaneously 

Reset all of our returning AH–64 Apaches. Each AH–64 Apache takes approximately 

27 months to Reset, our longest repair cycle time. 

Finally, without the 2.5 billion dollars in FY15 OCO for the non-enduring above 

490,000 end strength, the Army would have to take drastic personnel actions, such 

as halting all Permanent Change of Station moves, jeopardizing re-organization and 

unit readiness. The Army would cut contracts for service and support resulting in 

unit manning issues due to borrowed military manpower offsets and a corresponding skills mismatch as a result of the cuts. The impact to our civilian workforce would be particularly painful and would include hiring freezes, continuing the 

talent drain among our workforce of continued presence and readiness support. 

Mr. WITTMAN. In light of the civilian personnel hiring freezes and furloughs in 

FY2014, what impacts, if any, were there on the shipyards and aviation depots? 

How were they mitigated or what risk was assumed? What is the civilian personnel 

hiring plan for the shipyards in FY15? 

General CAMPBELL. Although the Army does not own any shipyards, the Corpus 

Christi Army Depot (CCAD) provides aviation depot maintenance capability through 

the overhaul, repair, modification, retrofitting, testing and modernization of helicopters and associated components for government agencies and U.S. allies. The 

FY13 and FY14 furloughs and hiring freeze negatively impacted CCAD productivity, 

workforce availability, and capability. During FY13, CCAD experienced a 40% increase in workforce resignations over historical norms. The loss of employees resulted in production delays, increased repair cycle times, and a loss of revenue. The 

Army was able to mitigate risk in these areas by prioritizing critical requirements 

for production, making adjustments to production lines where required, and revising 

production schedules to meet customer requirements. The CCAD Depot Commander 

conducted multiple town hall meetings and training to ensure the workforce was apprised of workload and operational changes. Additionally, the commander developed 

a training plan to address critical skills lost during this time for its depot employees. 

Due to the decrease in aviation maintenance workloads, CCAD has sufficient 

manpower and does not plan to hire additional personnel in FY15. 

Mr. WITTMAN. How will each of your services achieve the headquarters reductions 

ordered by Secretary Hagel and at the same time ensure critical functional capabilities are not lost? What is your strategic human capital plan? 

General CAMPBELL. In response to the Secretary of Defense’s guidance, Army senior leaders conducted reviews to consolidate and reorganize organizations, programs, 

and functions across several focus areas—readiness; institutional and operational 

headquarters reductions; operational force structure; installations services and investments; the acquisition workforce; Army cyber; and command, control, communications and intelligence. As a result of this effort, the Army will achieve greater 

efficiency across our core institutional processes, consolidate functions within the acquisition workforce, and reduce headquarters overhead by up to 25 percent. 
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In regard to specific headquarters reductions, authorizations associated with critical functional capabilities will be retained. Less critical, but still necessary functions such as administrative or technical support positions, will be prioritized. While 

critical functions will still be executed, risks to less critical functions will be evaluated with commands to determine where and how those functions should best be 

executed, such as transfer to other commands, automation, or reducing expectations. 

Where reductions cannot be achieved through efficiencies, the balance will occur by 

eliminating authorized, non-critical positions that have not been filled due to previous hiring freezes and attrition. Finally, backlogs of lower priority administrative 

or technical actions will be monitored and mitigated to avoid potential disruptions 

to higher priority functions. 

Mr. WITTMAN. Can you address the impact of the furlough on the military and 

civilian workforces? Have you seen spikes in post-furlough separations or retirements? Do you anticipate another furlough will be required? 

General CAMPBELL. Furloughs degraded medical services to Soldiers, civilians, 

Veterans, retirees, and family members; delayed maintenance services; slowed contracting; and decremented nearly every support function at every installation. 

There was a negative impact on morale coming on the heels of three years of frozen pay and performance-based bonuses. Some of our best and brightest employees 

left to seek employment in the private sector. Since the furlough, we have seen an 

increase over previous years in the number of separations and retirements. Given 

the negative effects of a furlough on the workforce, the Army is not planning nor 

are we anticipating another one. 

Mr. WITTMAN. How did the Secretary’s mandatory 20% headquarters cuts impact 

readiness accounts, if at all? 

General CAMPBELL. The Army foresees no direct impact on the readiness of operational forces as a result of the Secretary of Defense’s mandatory 20% headquarters 

cuts. 

Mr. WITTMAN. Considering the significant variability associated with the budget 

and the resulting force structure, why does the Department feel that it is an appropriate time to request an additional BRAC round? 

General CAMPBELL. Army force structure and end-strength are declining alongside 

our available funding. We must carefully balance end-strength, modernization, and 

readiness. The Army cannot afford to retain force structure at the expense of readiness. Now is the appropriate time to request BRAC because the money is gone. If 

we do not shed excess overhead, hundreds of millions of dollars will be wasted each 

year in maintaining underutilized buildings and infrastructure. Without BRAC authorization, the Army will be constrained in closing or realigning any installations 

to reduce overhead. This ‘‘empty space tax’’ on our warfighters will result in cuts 

to capabilities elsewhere in the budget. 

The Army has conducted some facility capacity analyses to support an endstrength of 490,000 Active Component Soldiers. Preliminary results indicate the 

Army will have about 15–20% excess capacity at its installations (over 160 Million 

Square Feet) by 2019. The average excess capacity is about 18 percent. Force structure cuts will only increase the amount of excess capacity. At roughly $3 per square 

foot for sustainment, the ‘‘empty space’’ or ‘‘under-utilization tax’’ on our budget rapidly compounds. 

Distributing a smaller budget over the same number of installations and facilities 

will result in rapid decline in the condition of Army facilities. Multiple years of 

empty and unoccupied facilities retained by the Army will transform an asset that 

could otherwise be repurposed to host another mission realigned from another installation or disposed of to benefit the local community, into a liability requiring 

demolition. 

Mr. WITTMAN. Please provide an update as to when the Department is expected 

to complete the European Infrastructure Consolidation Initiative as required by Section 347 of the National Defense Authorization Act for Fiscal Year 2012. Why does 

the Department feel it is appropriate to request an additional round of BRAC prior 

to completing the assessment of infrastructure in Europe? 

General CAMPBELL. The Office of the Secretary of Defense (OSD) transmitted the 

report required by section 347 of the FY12 NDAA to Congress on April 16, 2013. 

Subsequently, OSD provided an initial briefing on the European Infrastructure Consolidation Initiative on March 13, 2014, per H.Rpt. 113–102 (pg. 321), and projected 

that it could provide the Congress the results of the European Infrastructure Consolidation (EIC) assessment by the end of June, 2014. 

The Army has downsized force structure and footprint in both Europe and Asia 

for many years in the post-Cold War era. Since 2006, Army end-strength in Europe 

has declined 45 percent, and we are on track to shrink the supporting infrastructure, overhead, and operating budgets by over 50 percent. Similarly, in Korea, the 
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Army decreased the number of Soldiers by about a third (10,000 Soldiers) and is 

on pace to shrink acreage and site footprint by about half. 

The Department feels it is appropriate to request an additional round of BRAC 

prior to the EIC completion because changes in the European force structure have 

predominately been inactivation of units in Europe. The Army’s first two Brigade 

Combat Team (BCT) inactivation decisions were announced in February 2012 and 

were made in Europe—the 170th BCT at Baumholder, Germany, and the 172nd 

BCT at Grafenwoehr, Germany. The 170th BCT was inactivated in FY 2013 and the 

172nd was inactivated in early FY 2014. Since these forces are not returning to the 

U.S., there is no opportunity to utilize domestic excess infrastructure to support restationing. 

Current Army Capacity Analysis reflects 10 to 15 percent excess capacity in Europe versus an average of 18 percent in the United States (domestic). Force structure cuts will only increase the amount of excess capacity as we reduce the Active 

Component force structure below 490,000. At roughly $3 per square foot for sustainment, the ‘‘empty-space’’ or ‘‘underutilized tax’’ on the Army budge rapidly compounds. This ‘‘tax’’ will directly impact critical Army readiness, training and modernization requirements. 

Mr. WITTMAN. Has the Secretary of Defense assessed whether excess infrastructure exists in the Department? What empirical support can the Department provide 

to support a request for additional BRAC rounds? 

General CAMPBELL. The Army has conducted facility capacity analyses to support 

an end-strength of 490,000 Active Component Soldiers. Preliminary results indicate 

the Army will have about 15–20% excess capacity at its installations by 2019. The 

average excess capacity is about 18 percent. 

At roughly $3 per square foot for sustainment, the ‘‘empty space tax’’ on our budget rapidly compounds. Paying nearly $500M a year to maintain over 160 million 

square feet of excess or under-utilized facilities on our books will result in cuts to 

capabilities elsewhere in the budget. 

Further Army end-strength and force structure cuts will only increase the amount 

of excess capacity. 

Mr. WITTMAN. What readiness challenges does the Navy face if sequestration persists beyond FY2015? 

Admiral FERGUSON. A return to sequestration spending levels in FY16 and beyond 

will lead us to a Navy that would be insufficient in size and capability to conduct 

the missions of the 2012 Defense Strategic Guidance (DSG). Under that scenario, 

additional force structure adjustments, to include the inactivation of one nuclear aircraft carrier and one carrier air wing, would be required to fund adequate readiness 

of the remaining force. This would result in a smaller and less capable Navy with 

insufficient capability and capacity to execute at least four of the ten primary DSG 

mission areas: Counter Terrorism and Irregular Warfare, Deter and Defeat Aggression, Project Power Despite Anti-Access/Area Denial Challenges, and Provide a Stabilizing Presence. Continuing to address this challenge on an annual basis without 

a realistic Future Years Defense Plan planning horizon sub-optimizes decision-making, reduces future ability to provide ready surge forces, delays the introduction of 

new capabilities and upgrades, risks long-term gaps in the professional development 

of our personnel, and ultimately increases cost. 

Mr. WITTMAN. What would be the impacts to the Navy’s readiness if we maintained our current force structure with the current funding levels? 

Admiral FERGUSON. Navy’s budget assumes phased modernization of 11 CG and 

3 LSD class ships and defers funding for refueling of CVN73 pending a path ahead 

for long term funding to support 11 carriers and 10 carrier air wings. If forced to 

retain existing force structure at current funding levels, this will leave us with a 

force less ready now and in the future. We will not have sufficient funding to fully 

maintain our ships—a burden which will fall hardest on our surface combatants and 

amphibious ships—and these platforms will not reach their expected service lives. 

We will be forced to reduce training for units not required for an immediate deployment, reducing Navy contingency response capacity and impacting the professional 

development of a generation of future leaders. Navy would also be forced to look at 

reducing recapitalization and modernization, increasing the risk of falling behind 

potential adversaries in terms of capability and relevance. 

We must remain a balanced and ready force. The FY15 President’s Budget provides the right balance between capability, capacity and readiness for the level of 

funding directed by the Bipartisan Budget Act and fiscal guidance. If forced to retain force structure and overhead, we increase risk not only to readiness and our 

ability to implement the defense strategy, but also to a forces ability to respond effectively to future challenges. 
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Mr. WITTMAN. Please describe your plan to lay up the 11 cruisers: For how long? 

At what cost? What are the anticipated savings? How can you ensure they will be 

returned to active service in future years in light of the persisting budget fiscal challenges? What is the alternative if Congress does not approve the layup plan? 

Admiral FERGUSON. The Navy’s budget must include sufficient readiness, capability and manpower to complement the force structure capacity of ships and aircraft. This balance must be maintained to ensure each unit will be effective, no matter what the overall size and capacity of the Fleet. To preserve this balance and 

modernize cruisers while avoiding a permanent loss of force structure and requisite 

‘‘ship years,’’ our FY15 Navy budget request proposes to induct 11 Ticonderoga Class 

cruisers (CG) into a phased modernization period starting in FY 2015. 

Only fiscal constraints compel us to take this course of action; CG global presence 

is an enduring need. The ships will be inducted into phased modernization and 

timed to align with the retirements of CGs such that the modernized ships will replace one-for-one the retiring ships when they finish modernization. This innovative 

plan permits us to reapply the CG manpower to other manning shortfalls while simultaneously avoiding the operating costs for these ships while they undergo maintenance and modernization. 

The plan to modernize and retain the CGs adds 137 operational ‘‘ship years’’ to 

the Battle Force and it extends the presence of the Ticonderoga class in the Battle 

Force to 58 years. It avoids approximately $2.2 billion in operating and maintenance 

costs across the Future Years Defense Plan (FYDP). In addition, it precludes Navy 

from having to increase our overall end strength by about 3,400 people (approximately $1.6 billion over the FYDP), which would otherwise be required to fill critical 

shortfalls in our training pipelines and fleet manning. 

The ships undergoing phased modernization will be brought back into active service to replace, on a hull-for-hull basis, the retiring ships (CG 52–62) as those ships 

reach the end of their service life in the 2020’s. In general terms, this will mean 

that phased maintenance periods will vary between four and 11 years for each cruiser. The cost per ship will vary based on individual hull material condition of the 

ship and previously completed modernization. The range is approximately $350- 

$600M per ship which includes induction, sustainment, modernization, and maintenance costs. Initially, Navy will leverage the Ship’s Modernization, Operations and 

Sustainment Fund (SMOSF) for those ships specifically named in the FY14 National 

Defense Authorization Act (CGs 63–66, 68–69, 73). Navy has an enduring requirement for 11 cruisers to fulfill the Air Defense Commander role. There is no replacement cruiser, thus Navy will have to return these ships to active service. In order 

to provide additional assurance that the CGs will return to active service in future 

years in light of the persisting budget fiscal challenges, the Navy has built a transparent plan which includes direct Congressional monitoring of funding and work accomplishment. 

If Congress does not approve the phased modernization plan or provide the funding to retain the force structure, the Navy’s only remaining alternative would be to 

pursue decommissioning the ships. This will result in a permanent loss of force 

structure. 

Mr. WITTMAN. If the cruisers are laid up, how will the Navy meet the COCOM 

force presence requirements? And, what risk does the Navy assume in doing so? 

Admiral FERGUSON. The Navy will maintain 11 of its most capable Air Defense 

Commander CGs and increasing number of DDGs to meet the adjudicated Global 

Force Management Allocation Plan. Under the Optimized Fleet Response Plan, surface combatant deployment lengths will increase to eight months, providing increased presence to mitigate the effects of CG modernization. 

Our FY15 budget request supports meeting the President’s strategic guidance. 

Eleven Cruisers is the minimum number of purpose-built Air Defense Commander 

platforms necessary to support the 10 deploying Carrier Strike Groups. A reduction 

from 22 to 11 adds acceptable risk to the Navy’s multi-mission air warfare capacity, 

strike flexibility, and redundancy. 

Mr. WITTMAN. Please describe the benefits of the Optimized Fleet Response Plan 

(OFRP). Under OFRP, what ability do you have to surge assets in response to unanticipated COCOM demand and requirements? And, what risk do you assume? 

Admiral FERGUSON. OFRP is a supply-based system designed to meet the adjudicated Global Force Management Allocation Plan (GFMAP) requirements while 

safeguarding time to conduct maintenance on our capital intensive force, providing 

adequate time to train, and developing some degree of schedule predictability for 

our Sailors and their families. 

OFRP delivers a standard eight month deployment in a 36 month CSG operational cycle that yields comparable levels of global presence and increases the total 

operational availability (21 months) of the units. This assumes funding is provided 
125 

for post-deployment readiness sustainment as reflected in the budget request. This 

improves the return on investment for maintenance and initial training and increases surge capacity when fully implemented. 

To further enhance readiness, Navy is also improving the alignment of our manning processes with the OFRP cycle. This force generation model also allows us to 

train all units to a single, high deployment certification standard and sustains 

alignment of units within the strike group, improving continuity of command. 

With time to reset the force and funding at the level of the President’s budget, 

Navy will rebuild surge capacity across the FYDP to have ready forces available to 

support execution of the Combatant Commanders’ Operational Plans as well as 

other lesser contingency operations. Actual employment of surge is not included in 

the budget. Contingency operations or other ‘‘Requests for Forces’’ should, whenever 

possible, use forces already deployed. Units surging from homeport should be limited to those that can complete the operation within their scheduled period of operational availability and within operational tempo guidelines to avoid impacting the 

maintenance and training cycle, or negatively impacting Sailors and their families. 

Within these guidelines, risk to scheduled global presence, platform service life and 

Sailor quality of service is mitigated. Risk to long term readiness increases with 

funding below PB levels, unfunded surge operations, surging units during maintenance or training phases, or exceeding operational tempo guidelines. 

Mr. WITTMAN. In the FY2015 budget request, there are known maintenance shortfalls that persist from FY2014—due to descoped ship maintenance availabilities, 

and 89% of required aircraft depot maintenance funding. What is your ability to relieve the backlog? Or, will shortfalls be expected to persist? 

Admiral FERGUSON. The FY14 Appropriations Act (baseline and OCO) fully funded the ship maintenance requirement. The FY14 OCO appropriation also included 

$347M to reset the backlog of maintenance on surface ships with dry docking availabilities in FY14. The FY14 reset request does not fully liquidate the surface ship 

maintenance backlog that developed over the past decade. Full liquidation of that 

backlog is expected to require $1.8B of reset funding and take through the end of 

the FYDP to complete. 

The ship maintenance account is highly dependent on supplemental funding. In 

PB15, OCO funds the reset requirement, 40% of the enduring surface ship maintenance requirement, and 14% of the enduring carrier and submarine maintenance requirement. 

The FY14 Appropriations Act funded all required aviation depot maintenance. 

Navy has mitigated a significant portion of the projected FY14 aviation depot maintenance backlog through aggressive inventory management efforts. However, there 

will be approximately $62M of aircraft and engines/modules backlogged at the end 

of FY14 that will need to be programmed for maintenance in FY15. This backlog 

would be inducted in the first quarter of FY15 ahead of any new work previously 

scheduled to begin in FY15. Given aviation depot maintenance baseline funding levels (∼80% of requirement), the projected result is $218M of aircraft and engines/ 

modules backlog at the end of FY15 going into FY16. This backlog will be addressed 

through additional OCO requests. 

Mr. WITTMAN. What level of unit readiness does the President’s Budget Request 

assume? If funded at the budget request level, how long until we regain sufficient 

full spectrum readiness? 

Admiral FERGUSON. Navy builds the requirement for our readiness accounts to 

meet the expected presence levels in the adjudicated Global Force Management Allocation Plan. The certified models that are used to develop the requirement identify 

the funding required to maintain and train Navy forces to deploy at a readiness 

level of C2 or better and to meet all pre-deployment certification requirements. 

To fund these activities in the present fiscal environment, Navy is accepting risk 

in several areas, notably in shore infrastructure. This includes prioritizing the most 

critical military construction (MILCON) requirements, focusing sustainment funding 

on key operational facilities, and improving energy efficiency. Less critical MILCON 

and repairs are deferred, adding to an existing backlog resulting from prior year deferrals, and further exacerbating our shore readiness posture. 

While the forces we deploy are full spectrum ready, Navy continues to take risk 

in the readiness of non-deployed forces—reducing our total surge capacity and increasing the time required to provide those forces that can be made ready. A larger 

part of the total force is C3/C4, and they have material or training deficiencies that 

prevent their rapid employment. Further, Navy is taking additional risk in modernization, slowing the introduction of improved capabilities to the Fleet. This increased risk is most likely to manifest if we are faced with a technologically advanced adversary. 
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Mr. WITTMAN. Much of the $26 billion Opportunity, Growth, and Security Initiative (OGSI) Fund is aimed at mitigating short-term readiness shortfalls. If funded 

at the budget request levels, what additional readiness shortfalls are present within 

the Services? Can we expect the OGSI to mitigate all or most of these? What is the 

impact or risk if OGSI is not funded? 

Admiral FERGUSON. One of our FY15 budget priorities was to focus on critical 

afloat and ashore readiness to ensure the force is adequately funded and ready. Our 

budget request (compared to a BCA revised caps level) improves our ability to respond to contingencies (surge capacity) by increasing the readiness of non-deployed 

forces. However, it increases risk to ashore readiness in FY15, compared to the 

FY14 budget request, by reducing facilities sustainment, restoration, and modernization (FSRM) and military construction (MILCON) investments. This reduction 

adds to backlogs created by the deferrals in FY13 and FY14, exacerbating an existing readiness problem. 

The OGSI is a one-year FY15 initiative that requests funds for additional discretionary investments that can spur economic growth, promote opportunity, and 

strengthen national security. The FY15 base budget request provides the resources 

needed to gradually restore readiness and balance. However, it does not provide 

funds to accelerate readiness improvements in FY15. The OGSI provides the resources needed in FY15 to make faster progress by improving Navy facilities and 

adding additional resources for FSRM, accelerating the modernization of key weapons systems, and making faster progress toward restoring readiness lost under sequestration. Without OGSI funding, readiness can only be restored at a more gradual pace with the risks noted above. 

Mr. WITTMAN. Which readiness accounts are you most concerned about? What can 

we do to help? If provided with extra budgetary authority, what would you seek to 

do? 

Admiral FERGUSON. A balance of adequate funding across all the readiness accounts is essential to sustaining the long term readiness of the Fleet. I am particularly concerned that we maintain the operations accounts (Flying Hour Program and 

Ship Operations) to support the safety and proficiency of our operators as well as 

the advanced combat capabilities of our strike groups and other deploying units. The 

Ship Maintenance and Aviation Depot Maintenance accounts are critical to the long 

term readiness of the force and ensure our platforms reach their expected service 

lives. We must also adequately fund the supporting enabler accounts (Aviation Support, Ship Support and Aviation Logistics) as well as the spares accounts if we expect to achieve the appropriate balance in our readiness accounts. While we can 

take short term risk in one account or another, continuing to do so will ultimately 

produce significant readiness impacts with long term consequences. 

In our effort to ensure our Fleet units operating forward have what they need, 

we have further reduced investments in our shore infrastructure. Although a justifiable short term strategy, this will also produce significant and expensive long term 

impacts if sustained. Investing 3.5% in our shipyard and depot infrastructure will 

not keep pace with need, and funding 70% of the Facilities Sustainment, Rehabilitation and Modernization requirement only meets emergency requirements and limited investment. While we have focused our shore investment in support of operational requirements to include piers and airfields, at this level of funding the long 

term health of the entire infrastructure is at risk. 

If additional funds were available above those already requested in the FY15 

budget request, Navy would propose investments in the following areas: 

• Fleet Maintenance: Additional depot maintenance activity to accelerate recovery 

from sequestration, improve operational availability of Fleet aircraft and meet 

the statutory requirement of 6% for capital investment in depot facilities. 

• Afloat Readiness: Improve availability of Combat Logistics Force platforms, increase JHSV operations and increase funding for aviation logistics. 

• Critical Spares: Improve sparing for aviation platforms to address reduced readiness, enhance safety and provide greater flexibility for training and operations. 

• Shore Readiness: Reduce the level of risk in sustaining Navy shore infrastructure, including facility sustainment, restoration and modernization as well as 

increased funding for military construction. 

• Modernization: Accelerate rate of delivery of key capabilities to the Fleet to ensure technological superiority over potential adversaries. 

• Manpower/Training: Increase training support to achieve readiness levels and 

improve manpower management. 

While each of these potential investments are important, they are not of a higher 

priority than items already in the FY15 Navy budget submission. 

Mr. WITTMAN. Can you articulate the impact of cancelled training that occurred 

over the last two years as a result of sequestration? 
127 

Admiral FERGUSON. Sequestration broadly impacted Navy training in a number 

of areas. Our rotational deployment cycles and forward operations require us to 

preferentially fund primary pre-deployment training and overseas operations and 

training events in support of Combatant Commander named operations and theater 

engagement plans. Under sequestration, this prioritization had some critical readiness impacts, including: • Unit level training/Operator Proficiency: Perhaps the most pervasive impact of 

sequestration is the lack of funds to fully support the training that ship and 

squadron commanding officers conduct outside of required training cycle events 

to improve unit readiness and develop the experience base of their junior officers and enlisted crewmembers. This has potential long term impacts on leadership and professional skills, safety and retention. We were forced to reduce 

some air wings to ‘‘tactical hard deck’’—a minimum safe-to-fly level of training, 

and reduce steaming days and flying hours across the board for non-deployed 

units. While the Navy Safety Center cannot yet draw a direct link to reduced 

readiness activity, the number of aviation Class A mishaps this year is up notably from our five year average. • Deferred pre-deployment training: Additional contingency response capacity is 

generated by completing pre-deployment training of units. Under sequestration, 

Navy held units at lower levels of training until required to meet deployment 

timelines. Non-deployed units are therefore less ready to surge in the event of 

crises. • Furlough readiness impacts: The large majority of the Navy civilian workforce 

is engaged in generating current and future readiness. Although our public 

shipyard direct workforce was exempt from furlough, the individuals supporting 

material procurement, engineering, contracting and other important enablers of 

their work were not. Our aviation depot workforce was furloughed along with 

training organizations and the acquisition workforce that procures and modernizes the future Navy. All of these damage readiness well beyond the actual 

number of days it is imposed, and when combined with lengthy hiring freezes 

in order to manage within a sequestered budget, it reduces readiness disproportionately to the cost it avoids. 

Mr. WITTMAN. How dependent are you on OCO for day-to-day operations? How 

will the dependence change after the majority of, or possibly all, combat troops are 

out of Afghanistan? 

Admiral FERGUSON. The Navy’s OCO funding can be split into four parts: 

1. Increased operating tempo for flying and ship operations or operating forward. 

Navy funds the increased operating tempo required of our aircraft and ships 

in the Middle East through OCO as well as expeditionary units operating forward. 

2. Afghanistan operations. Navy funds in-country operations for expeditionary 

units and air operations for Marine Corps aircraft. 

3. Enduring requirements. Additionally, Navy funds some remaining enduring requirements through OCO, which include air and ship depot maintenance above 

80 percent of the modeled requirement for ship operations to fully support 

operational requirements, base support operations for several locations in the 

Middle East, and operating support for expeditionary units. 

4. Reset. Lastly, Navy funds the reset or repair of equipment, aircraft, and ships 

returning from theater. Reset of these items will take up to five or six years 

based on scheduling of maintenance activities. 

Once the Afghanistan operations end, the Navy will have three parts of their OCO 

funding requirements remaining. The enduring requirements combined with the increased flying and ship operations above baseline levels when deployed to the Middle East would result in a substantial amount of continued OCO dependence after 

the majority of combat troops leave Afghanistan. These activities currently require 

up to ∼$4.0 billion in OCO funding per year. Additionally, the Navy OCO reset requirements are currently estimated to total ∼$2.2 billion over the next five to six 

years. 

Mr. WITTMAN. Please describe the enduring, non-Afghanistan-related requirements your service funds through OCO. How would you address those requirements 

in the absence of OCO? 

Admiral FERGUSON. Navy has been working to transition OCO funded enduring 

activities to baseline over the last few years. However, we have only been partially 

successful in meeting that goal. At present, our baseline funding only includes about 

80% of the enduring aviation and ship depot maintenance requirements—the remaining 20% are funded as part of the OCO request. Navy enduring requirements 

funded in OCO also include base support operations for several locations in the Middle East and operating support for expeditionary units. In addition to the operating 
128 

costs imbedded in the Navy’s OCO funding request, the Navy will also have a longterm need for reset funding in order to recover deferred maintenance and material 

condition for the ships and aircraft that have been operated over the last decade 

at rates higher than anticipated when they were procured. 

Specifically, without OCO funding, the enduring requirements necessary to meet 

the Navy’s operational requirements, combined with the increased flying and ship 

operations above baseline levels when deployed to the Middle East, would represent 

a shortfall of between $2.5B and $4B annually. In addition, our reset requirement 

is estimated to be approximately $2.2B, which would need to be funded over the period from the cessation of hostilities in the Middle East to a point in time about 

5 years after that happens. 

Navy has funded all enduring flying hour operations in baseline for several years. 

Increased operating tempo required of our aircraft and ships in the Middle East continue to be OCO funded. For the foreseeable future, the Combatant Command and 

Joint Staff expect continued increased flying and ship operations above baseline levels when deployed to the Middle East. The Navy continues to work with the Office 

of the Secretary of Defense to identify and plan for the possible transition of enduring requirements from OCO funding to the baseline. However, absent additional 

funding, the Navy would be forced to cut back on its expenditures in other critical 

areas or reduce the level of presence we can provide to the combatant commanders. 

Mr. WITTMAN. Please describe your service’s efforts to migrate enduring requirements into the base budget. How challenging has sequestration made that task? 

What is most at-risk? 

Admiral FERGUSON. Navy has been working to transition OCO funded enduring 

activities to baseline over the last few years. However, we have only been partially 

successful in meeting that goal. At present, our baseline funding only includes about 

80% of the enduring aviation and ship depot maintenance requirements—the remaining 20% are funded as part of the OCO request. Navy enduring requirements 

funded in OCO also include base support operations for several locations in the Middle East and operating support for expeditionary units. In addition to the operating 

costs imbedded in the Navy’s OCO funding request, the Navy will also have a longterm need for reset funding in order to recover deferred maintenance and material 

condition for the ships and aircraft that have been operated over the last decade 

at rates higher than anticipated when they were procured. 

Specifically, without OCO funding, the enduring requirements necessary to meet 

the Navy’s operational requirements, combined with the increased flying and ship 

operations above baseline levels when deployed to the Middle East, would represent 

a shortfall of between $2.5B and $4B annually. In addition, our reset requirement 

is estimated to be approximately $2.2B, which would need to be funded over the period from the cessation of hostilities in the Middle East to a point in time about 

5 years after that happens. 

Navy has funded all enduring flying hour operations in baseline for several years. 

Increased operating tempo required of our aircraft and ships in the Middle East continue to be OCO funded. For the foreseeable future, the Combatant Command and 

Joint Staff expect continued increased flying and ship operations above baseline levels when deployed to the Middle East. The Navy continues to work with the Office 

of the Secretary of Defense to identify and plan for the possible transition of enduring requirements from OCO funding to the baseline. However, absent additional 

funding, the Navy would be forced to cut back on its expenditures in other critical 

areas or reduce the level of presence we can provide to the combatant commanders. 

Sequestration would further drive our base down, pressurizing already difficult decisions and adding risk to our balance between force structure, modernization, and 

readiness. 

Mr. WITTMAN. Although you may not be able to discuss specifics until the FY15 

OCO budget is officially released, how confident are you in the adequacy of this 

year’s OCO budget request? How much of your services’ operations, maintenance, 

and training requirements are met by the base budget? 

Admiral FERGUSON. The Navy, in conjunction with the Office of the Under Secretary of Defense (Comptroller), is currently working on the FY15 OCO requirements to be included in the budget request. 

In FY14, the OCO budget included incremental costs to sustain operations, manpower, equipment and infrastructure repair, as well as equipment replacement. 

These costs included aviation and ship operations, combat support, base support, 

USMC operations and field logistics, mobilized reservists and other special pays. 

The FY13 President’s budget reflected the start of the transition out of Afghanistan, 

and this effort to transition to Afghan responsibility is continued in FY14. We continue this transition and anticipate requesting similar incremental costs in the 

FY15 OCO request. 
129 

Our FY15 budget baseline funds enduring aviation and ship depot maintenance 

baseline requirements to 80%. Our baseline budget also funds ship operations to 45 

days per quarter for deployed forces and 20 days per quarter for non-deployed 

forces, and flying hour operations to a T-rating of 2.5 Navy/2.0 USMC. The Navy’s 

FY15 baseline readiness funding meets the preponderance of Combatant Commander operating tempo requirements, properly sustaining and maintaining ships 

and aircraft, and sustaining the enduring flight hour readiness requirement for both 

Navy and Marine Corps. 

Navy will require OCO funding for some remaining enduring requirements. This 

includes aviation and ship depot maintenance above 80 percent, ship operations to 

fully support operational requirements, base support operations for several locations 

in the Middle East, and operating support for expeditionary units. Without OCO 

funding, these enduring requirements, combined with the increased flying and ship 

operations above baseline levels when deployed to the Middle East, would result in 

the need for an additional $2.5 to $4.0 billion per year in baseline funding. Absent 

additional funding, the Navy would be forced to cut back on its expenditures in 

other critical areas or reduce the level of presence we can provide to the combatant 

commanders. 

Mr. WITTMAN. How would your overall readiness be affected by the elimination 

of OCO? What training would be curtailed? What infrastructure would be affected? 

How would ability to maintain equipment and fully staff units be affected? 

Admiral FERGUSON. OCO funding, in addition to our base budget, continues to 

play a critical role in maintaining the capability, capacity, and readiness necessary 

for the Navy to support our Combatant Commanders, in addition to meeting the 

missions of the Defense Strategic Guidance. For over ten years, OCO funding has 

allowed the Navy to operate at a war-time operational tempo throughout the Middle 

East. As the land war draws down, Navy is uniquely challenged because our forces 

continue to serve and provide presence in the CENTCOM region as land-based 

forces depart. The demand for naval presence in this theater remains high and is 

likely to increase elsewhere as we rebalance to the Pacific. 

If the Navy remains at our current level of operations, it will not be sustainable 

within our base budget alone. OCO funding is also necessary to reset our ships and 

equipment after a decade of higher tempo wartime operations. The capital asset nature of our ships makes longer-term supplemental reset funding more critical to the 

Navy. In the current fiscal environment, any transition from OCO into base at the 

current base topline, or worse under sequestration levels, would drive our base 

down and pressurize already difficult decisions as we work to balance between force 

structure, modernization, and readiness. Without additional supplemental funding, 

this balance will suffer. For readiness specifically, we could be forced to delay maintenance activities for our ships and aircraft, reducing their operational availability 

and service life. Training could be reduced, preventing ships and aircraft from being 

ready and available for contingency operations. 

In FY14, the OCO budget included incremental costs to sustain operations, manpower, equipment and infrastructure repair, as well as equipment replacement. 

These costs include aviation and ship operations, combat support, base support, 

USMC operations and field logistics, mobilized reservists and other special pays. 

The FY13 President’s Budget reflected the start of the transition out of Afghanistan, 

and this effort to transition to Afghan responsibility is continued in FY14. We continue this transition and anticipate requesting similar incremental costs in the 

FY15 OCO request. 

Mr. WITTMAN. In light of the civilian personnel hiring freezes and furloughs in 

FY2014, what impacts, if any, were there on the shipyards and aviation depots? 

How were they mitigated or what risk was assumed? What is the civilian personnel 

hiring plan for the shipyards in FY15? 

Admiral FERGUSON. The FY2013 hiring freeze and overtime funding restrictions 

created a capacity shortfall for naval shipyards resulting in deferral of approximately 75,000 man-days of planned work from FY2013 to FY2014. Navy mitigated 

the impact by lifting the hiring freeze in June 2013, commencing aggressive recruitment efforts, and exempting shipyards from civilian furloughs. Even with those efforts, the number of personnel at the end of FY2013 was about 200 below the budgeted end strength. 

Commander, Fleet Readiness Center (COMFRC) lost 12 working days on all production lines across the Fleet Readiness Centers. This issue was exacerbated by the 

FY2013 hiring freeze and resulted in COMFRC understaffing its FY2014 requirement by just under 600 Full Time Equivalent personnel. Additionally, the furlough 

resulted in 43 aircraft and 289 engine repair delays and caused a net operating loss 

of approximately $8 million to this working capital funded organization. 
130 

The following table provides information on the staffing requirements for FY 2015 

for the four Naval Shipyards (Portsmouth Naval Shipyard (PNSY), Norfolk Naval 

Shipyard (NNSY), Puget Sound Naval Shipyard and Intermediate Maintenance Activity (PSNS & IMF), and Pearl Harbor Naval Shipyard & Intermediate Maintenance Facility (PHNSY & IMF)). 

Naval Shipyard FY15 Controls 

PNSY NNSY 

PSNS & 

IMF 

PHNSY 

& IMF 

FY14 End Strength 4,772 9,551 12,250 4,455

Hires 387 890 492 245

Attrition (225) (690) (700) (270)

Planned FY15 End 

Strength 4,934 9,751 12,042 4,430

Mr. WITTMAN. How will each of your services achieve the headquarters reductions 

ordered by Secretary Hagel and at the same time ensure critical functional capabilities are not lost? What is your strategic human capital plan? 

Admiral FERGUSON. Our FY 2015 President’s Budget request achieves savings 

through significant headquarters reductions, placing us on track to meet the 20% 

reduction by FY 2019 required by Secretary of Defense fiscal guidance. To protect 

the Navy’s ability to rebalance to the Pacific and continue to execute on-going overseas contingency operations, less pressure is applied to fleet operational headquarters staffs and more on other staffs. Specifically, Fleet Forces Command, the 

U.S. Pacific Fleet, and Navy Component Command headquarters were allocated a 

5% reduction. This decision required additional pressure to be placed on other staffs 

in the Navy to compensate for the protection of the fleets. 

The headquarters reductions are designed to streamline management through efficiencies and elimination of lower-priority activities, protecting critical functional 

capabilities. The reductions will be based on projected mission requirements and are 

consistent with legislative requirements including 10 USC 2463. 

Mr. WITTMAN. Can you address the impact of the furlough on the military and 

civilian workforces? Have you seen spikes in post-furlough separations or retirements? Do you anticipate another furlough will be required? 

Admiral FERGUSON. We have seen the impact of furlough on our workforce in the 

following ways: 

• Reduced readiness. Reduced Department of Navy’s (DON) maintenance and 

sustainment capacity by losing 6 days of work for logisticians, comptrollers, engineers, contracting officers, and planners. 

• Financial Hardship. The furlough created a significant financial hardship for 

the men and women dedicated to public service. The workforce lost 6 full days 

of pay, and corresponding leave retirement contributions in 2013. 

• Morale of the Force. Internal surveys indicate a decrease in trust in the institution among the workforce and a perceived devaluation of the contribution of our 

Civilian Sailors to the DON mission. The furlough also dampened the enthusiasm of the workforce, as evidenced by a five-point drop in the Office of Personnel Management federal employee viewpoint survey and a decline in employee engagement. 

While there has been no increase in post-furlough separations or retirements 

among active duty members, the DON has seen an increase in civilians exploring 

the possibility of retirement through the retirement application process. To date, 

there has been no increase in post-furlough civilian separations or retirements from 

the Department of the Navy. 

We cannot rule out the possibility of additional furloughs should sequestration be 

required in FY16 and beyond. 

Mr. WITTMAN. How did the Secretary’s mandatory 20% headquarters cuts impact 

readiness accounts, if at all? 

Admiral FERGUSON. To enable the rebalance to the Pacific and continue to execute 

theater presence missions and on-going overseas contingency operations, Navy applied less pressure on operational warfighting headquarters and took the larger reductions in ashore overhead headquarters organizations. As a result, there is no expected direct impact to the major Fleet readiness accounts (Ship Operations, Flying 
131 

Hour Program, Ship Maintenance or Aviation Depot Maintenance) from the 20% 

headquarters reduction. The specific funding lines that support ship and aircraft 

maintenance and operations were not affected by the 20% headquarters reduction. 

That said, there are some minor reductions to two support accounts (Ship Support 

and Air Support)—which total $1.45M across the FYDP which could cause second 

order affects to longer-term readiness. As an example, reductions in the Planning, 

Engineering and Design accounts could manifest in delays in executing contracts, 

less deck plate supervision for the work that is being done at ship depots and less 

personnel available to execute the quality control functions we have been doing in 

the past. The long-term impact of these issues would likely be more re-work required, cost overruns for slower identification of deficiencies and less efficient execution of work-packages. 

Since all of the reductions are phased-in over the next 4 years, it is unlikely that 

these cuts will result in any immediate impacts. We will manage our way through 

these reductions and search for productivity improvements/efficiencies as well as 

identify lower-priority, less critical tasks that can be cancelled or deferred to permit 

those remaining personnel to execute our most critical missions. If necessary, we 

will consider divesting less critical missions. Until the 2017–2018 timeframe, the 

cuts are limited and are planned such that we can evaluate long term impacts. 

Mr. WITTMAN. Considering the significant variability associated with the budget 

and the resulting force structure, why does the Department feel that it is an appropriate time to request an additional BRAC round? 

Admiral FERGUSON. The last BRAC analysis the Department of the Navy performed was back in 2004. Since that assessment was completed, we have reduced 

force structure, the number of personnel in the Navy, and consolidated commands 

and staffs. Therefore, it is the appropriate time to review base structure, force 

laydown, and assess our capacity in order to reduce the costs of infrastructure 

sustainment. 

Mr. WITTMAN. Please provide an update as to when the Department is expected 

to complete the European Infrastructure Consolidation Initiative as required by Section 347 of the National Defense Authorization Act for Fiscal Year 2012. Why does 

the Department feel it is appropriate to request an additional round of BRAC prior 

to completing the assessment of infrastructure in Europe? 

Admiral FERGUSON. The Department of Defense (DOD) is in the midst of a comprehensive review of its European infrastructure to create long-term savings by 

eliminating excess infrastructure, recapitalizing astutely to create excess for elimination, and leveraging announced force reductions. DOD is analyzing infrastructure 

relative to the requirements of the defined force structure, emphasizing military 

value, operational requirements, joint utilization, and obligations to our allies. DOD 

expects to complete its analysis in late spring and anticipates providing a classified 

report outlining the findings soon after. 

Even significant closures overseas, though, will not be sufficient to make the 

needed reductions in DOD’s excess infrastructure. This underscores the need to conduct the same effort with respect to DOD’s domestic infrastructure, in concert with 

the overseas review to maximize its comprehensiveness and creativity. 

Regarding the Section 347 report on the European Infrastructure Consolidation 

Initiative, then-Deputy Secretary of Defense Ashton Carter submitted the analysis 

on April 16, 2013 (transmittal letter attached). 

[The letter referred to can be found in the Appendix on page 110.] 

Mr. WITTMAN. Has the Secretary of Defense assessed whether excess infrastructure exists in the Department? What empirical support can the Department provide 

to support a request for additional BRAC rounds? 

Admiral FERGUSON. The last BRAC analysis DOD performed was back in 2004, 

and at that time the DOD reported an average of 24% excess capacity as compared 

to the metrics established by the 1989 baseline inventory. 

Since that assessment was completed, however, the capabilities of our weapons 

systems and platforms have advanced and our warfighting tactics have evolved, as 

has planning criteria for our infrastructure. Further, while the 2005 BRAC round 

included a number of closures within the DON, the Navy has not experienced the 

same level of force structure reductions as has the Army and Air Force. A new 

BRAC round would give us the opportunity and rigorous process to take a hard look 

at our infrastructure and force laydown to determine if the Navy has excess capacity 

today. 

Mr. WITTMAN. General Paxton, you’ve mentioned the effects of sequestration on 

Marine Corps Readiness both in its current state and into the future. We understand that the corps has done diligent work in redesigning a force structure around 

175,000 marines, which is based on fiscal constraints. You and the Commandant 
132 

have testified that the optimal force structure for the Marine Corps is 186,600 marines to meet all crisis response and steady-state requirements of the nation. 

Can you briefly discuss what the Marine Corps loses in regards to readiness with 

this reduced force structure? 

Can you also provide the committee with your assessment of what specific capabilities the Marine Corps stands to lose if the full implementation of the BCA continues beyond FY15? 

Lastly, can you provide the committee an assessment on the ability of the Marine 

Corps to regenerate capabilities/capacities lost due to sequestration if and when 

emergent threats arise or major combat operations are required. 

General PAXTON. Under current levels of funding, the 175k force will be an extremely capable and ready force, optimized for steady state operations, but will assume risk in the execution of a Major Combat Operation (MCO) and will stress personnel tempo rates at the 1:2 deployment-to-dwell ratio in the active component and 

a 1:4 ratio for the Reserves. The 175k force will not be sized to rotate in MCOs (i.e., 

the force will be ‘‘all-in’’ to meet the demands of an MCO at a 1:0 unit deploymentto-dwell ratio). The 175k force is not the 186.8k force level the Marine Corps desires, but it is the best balanced force to meet the strategic and fiscal realities of 

the near future while simultaneously preserving the ability to rapidly grow in times 

of crisis. The 175k force will maintain an average of C2 readiness across all operational units, will restructure unit and institutional training for emerging security 

demands, will expand use of simulation and virtual training, and will rely on Navy 

investments in steaming days and flight hours which impacts readiness. 

The 175k force at full sequestration levels will be a high risk force. Funding for 

Marine Corps modernization will be reduced or depleted, funding for readiness will 

be reduced, funding for infrastructure will be reduced, and Marine Corps capability 

to deter and defeat aggression will be reduced. Specifically, full sequestration in the 

FY15–19 timeframe will result in reduction in funding for MDAPs, G/ATOR, and 

CAC2S, while JLTV will be delayed one year and may be forced to cancel. Modernization to the Marine Corps’ most crucial capabilities—ACV and F–35B—will be 

preserved. Additional risk will be manifested over time as equipment and modernization yields less viably equipped Marines. Marine Corps bases and stations 

will, over time, see a diminished ability to provide the training ranges to keep Marines trained. Within 5–7 years the Marine Corps may be forced to make the choice 

between deploying a fully equipped Marine or a fully trained Marine. Although the 

Marine Corps will continue to serve the nation as America’s Expeditionary Force in 

Readiness at whatever end-strength the nation is prepared to fund, full implementation of the BCA beyond FY15 will negatively impact Marine Corps modernization, 

infrastructure, and readiness accounts, reducing Marine Corps capability to fulfill 

key DSG missions (Countering Terrorism & Irregular Warfare, Deterring & Defeating Aggression, Projecting Power Despite A2AD Challenges, and Providing a Stabilizing Presence). 

Although the 175k force is the current planned force, history shows the Marine 

Corps will not be held at 175k forever; end-strength fluctuations are natural and 

necessary. Rather than ignore this reality, it is best to plan for it and accept risk 

in the areas that can be reconstituted when needed. The Defense Strategic Guidance 

(DSG) refers to this concept as ‘‘reversibility.’’ The Ground Combat Element (GCE) 

is the element of the Marine Air Ground Task Force (MAGTF) that can most rapidly 

be reconstituted during times of crisis; it is the most reversible. The Air Combat 

Element is arguably the least reversible. Aircraft are considered long-lead items because of the length of time required to move from concept to reality. Additionally, 

aviation units require more senior personnel who take longer to develop. The 175k 

force reduces structure in areas that can be restored the most rapidly in times of 

crisis, thereby preserving reversibility. 

Mr. WITTMAN. Does the budget request for the Marine Corps fully fund current 

and planned crisis response capabilities? If not, why? What are your future plans 

for developing and growing crisis response elements? Where will future capabilities 

be based? 

General PAXTON. Special Purpose Marine Air Ground Task Force-Crisis Response 

(SPMAGTF–CR), in support of USEUCOM/USAFRICOM, is an enduring capability 

for the Marine Corps and supports our priorities for forward presence, steady state 

operations and crisis response. It is funded in the President’s Budget 2015 (PB–15) 

request. The Marine Corps’ rebalance to the Pacific is also funded in PB–15. The 

rebalance provides forward presence, steady state operations, and crisis response capabilities to that region. A Marine Expeditionary Unit (MEU) presence in support 

of USCENTCOM and the 31st MEU in support of USPACOM are also funded. Lastly, Marine Security Augmentation Unit funding was submitted as part of PB–15. 
133 

The Marine Corps requested funding in the USMC FY–15 Unfunded Priority List 

(UPL) submission for SPMAGTFs in support of USCENTCOM and USSOUTHCOM. 

These capabilities were not funded in the [baseline] budget, because they were in 

development at the time of submission. SPMAGTF–CENT is scheduled to deploy in 

the fall of this year and will be comprised of a Theater Security Cooperation (TSC) 

element in Jordan and a Security Force in Yemen. The Marine Corps and 

USCENTCOM are in the process of coordinating host nation support for the Crisis 

Response element and associated aviation assets. SPMAGTF-South is scheduled to 

deploy in May of 2015. Although it is not planned to have as robust a crisis response 

capability as the SPMAGTFs in USCENTCOM or USEUCOM/USAFRICOM, it will 

have the ability to conduct TSC and support Humanitarian Assistance/Disaster Response missions. The Marine Corps and USSOUTHCOM are in the process of coordinating host nation support for elements of the SPMAGTF. 

Mr. WITTMAN. The budget request summary highlights support for the continuation Marine Unit Deployment Program (UDP) in FY15. How many deployments to 

you anticipate? With the updated strategic guidance, do you anticipate a UDP-type 

arrangement outside of Okinawa? 

General PAXTON. The Unit Deployment Program consists of sustained presence of 

three reinforced infantry battalions that conduct six month deployments. This results in six deployments per year. One of these battalions will rotate to Darwin, 

Australia for a six month period each year as the Marine Rotational Force (Darwin). 

Mr. WITTMAN. What level of unit readiness does the President’s Budget Request 

assume? If funded at the budget request level, how long until we regain sufficient 

full spectrum readiness? 

General PAXTON. The FY15 budget preserves near-term readiness to support an 

increased forward presence in the Pacific, and crisis response capabilities, such as 

those demonstrated in the Philippines for humanitarian assistance and disaster response and later with the evacuation of American citizens from South Sudan. In 

partnership with the Navy, we utilize Amphibious Ready Groups (ARG) and Marine 

Expeditionary Units (MEU) that are forward deployed. Additionally, the budget resources the land-based Special Purpose Marine Air-Ground Task Force–Crisis Response (SPMAGTF–CR), located in Spain and Italy. SPMAGTF–CR is not intended 

to replace, but rather compliment the ARG–MEU. The Navy-Marine Corps team is 

committed to forming capabilities that would provide other crisis response capabilities to U.S. Central and Southern Commands. The help of Congress is needed to 

secure these future capabilities. 

Full spectrum readiness depends on a budget that balances current unit readiness 

and long-term investments—balanced institutional readiness is essential to regaining full spectrum readiness. Currently, this balance is misaligned as resources that 

would have otherwise been applied to non-deployed units and investments accounts 

are re-prioritized to deployed and next-to-deploy units to safeguard near-term operational unit level readiness. Tough choices have been made in these fiscally challenging times to protect this near term readiness. Whereas the President’s budget 

protects near-term readiness, fully reconstituting the Corps after over a decade of 

war is at risk if funding is not available for equipment modernization and needed 

infrastructure essential for full spectrum readiness. Force level draw down savings 

are not expected to be realized until 2019, at which time the Corps would be on 

a path to balanced institutional readiness. 

Mr. WITTMAN. Much of the $26 billion Opportunity, Growth, and Security Initiative (OGSI) Fund is aimed at mitigating short-term readiness shortfalls. If funded 

at the budget request levels, what additional readiness shortfalls are present within 

the Services? Can we expect the OGSI to mitigate all or most of these? What is the 

impact or risk if OGSI is not funded? 

General PAXTON. The Marine Corps prioritized near term readiness at the expense of infrastructure sustainment and equipment modernization. The programs 

requested via the OGSI will help mitigate the risk associated with those reductions. 

Mr. WITTMAN. Which readiness accounts are you most concerned about? What can 

we do to help? If provided with extra budgetary authority, what would you seek to 

do? 

General PAXTON. The Marine Corps prioritized near term readiness at the expense of infrastructure sustainment and equipment modernization. If additional 

funds were available, the Marine Corps would request support of the OGSI/UPUL. 

Mr. WITTMAN. Can you articulate the impact of cancelled training that occurred 

over the last two years as a result of sequestration? 

General PAXTON. No significant training was cancelled as a result of sequestration. The Marine Corps explicitly protected training and near-term unit readiness 

at the expense of equipment modernization and installation sustainment. The Marine Corps’ concern is that in achieving short-term readiness goals to meet DOD 
134 

guidance, in the long-term it will reduce overall readiness across the Infrastructure 

Sustainment and Equipment Modernization pillars of institutional readiness. Funding cuts to these pillars, under sequestration, will not be sustainable due to their 

impacts on future readiness. 

Mr. WITTMAN. How dependent are you on OCO for day-to-day operations? How 

will the dependence change after the majority of, or possibly all, combat troops are 

out of Afghanistan? 

The majority of Marine Corps OCO funding supports the incremental costs of 

combat operations, equipment and infrastructure repair, equipment replacement, 

military pay for mobilized reservists, deployed pay and allowances, and end-strength 

above the baseline active duty force (182.7K in FY15). However, as the Marine 

Corps transitions from Operation Enduring Freedom in Afghanistan to steady state 

operations, including forward presence and crisis response, some of the activities 

currently funded via OCO will likely migrate to the baseline to support enduring 

missions and requirements. The Marine Corps currently estimates this amount to 

be between $200 and $450 million. This represents approximately 8 to 11 percent 

of our total FY 2014 OCO request of $4.0B. 

The $700 million realigned from baseline to OCO in FY 2014 by the Congress in 

the 2014 Omnibus Appropriations Act is also an enduring requirement, and is reflected in the FY15 budget as such. 

Mr. WITTMAN. Please describe the enduring, non-Afghanistan-related requirements your service funds through OCO. How would you address those requirements 

in the absence of OCO? 

General PAXTON. The majority of Marine Corps OCO funding supports the incremental costs of combat operations, equipment and infrastructure repair, equipment 

replacement, military pay for mobilized reservists, deployed pay and allowances, 

and end-strength above the baseline active duty force (182.7K in FY15). However, 

as the Marine Corps transitions from Operation Enduring Freedom in Afghanistan 

to steady state operations, including forward presence and crisis response, some of 

the activities currently funded via OCO will likely migrate to the baseline to support enduring missions and requirements. The Marine Corps currently estimates 

this amount to be between $200 and $450 million. This represents approximately 

8 to 11 percent of our total FY 2014 OCO request of $4.0B. Examples of enduring 

requirements include: CENTCOM operations and presence, redeployment of forces 

post OEF, intermediate and operational maintenance requirements, as equipment 

is deployed in support of non-OCO missions, commercial satellite bandwith, and information systems requirements. 

The Marine Corps has made modest gains in its efforts to fund enduring requirements in the baseline, but will face challenges to migrate the requirements identified above as sequestration has resulted in reduced top lines for all the Services. 

The ability to continue to fund missions with OCO has enabled the Marine Corps 

to limit further reductions in operation and maintenance and procurement accounts 

(infrastructure sustainment and equipment modernization) in order to support a 

ready and capable force. 

Mr. WITTMAN. Please describe your service’s efforts to migrate enduring requirements into the base budget. How challenging has sequestration made that task? 

What is most at-risk? 

General PAXTON. The Marine Corps has made modest gains in its efforts to fund 

enduring requirements in the baseline, but will face challenges to migrate the requirements identified above as sequestration has resulted in reduced top lines for 

all the Services. The ability to continue to fund missions with OCO has enabled the 

Marine Corps to limit further reductions in operation and maintenance and procurement accounts (infrastructure sustainment and equipment modernization) in order 

to support a ready and capable force. 

The majority of Marine Corps OCO funding supports the incremental costs of 

combat operations, equipment and infrastructure repair, equipment replacement, 

military pay for mobilized reservists, deployed pay and allowances, and end-strength 

above the baseline active duty force (182.7K in FY15). However, as the Marine 

Corps transitions from Operation Enduring Freedom in Afghanistan to steady state 

operations, including forward presence and crisis response, some of the activities 

currently funded via OCO will likely migrate to the baseline to support enduring 

missions and requirements. The Marine Corps currently estimates this amount to 

be between $200 and $450 million. This represents approximately 8 to 11 percent 

of our total FY 2014 OCO request of $4.0B. 

The $700 million realigned from baseline to OCO in FY 2014 by the Congress in 

the 2014 Omnibus Appropriations Act is also an enduring requirement, and is reflected in the FY15 budget as such. 
135 

Mr. WITTMAN. Although you may not be able to discuss specifics until the FY15 

OCO budget is officially released, how confident are you in the adequacy of this 

year’s OCO budget request? How much of your services’ operations, maintenance, 

and training requirements are met by the base budget? 

General PAXTON. The majority of Marine Corps OCO funding supports the incremental costs of combat operations, equipment and infrastructure repair, equipment 

replacement, military pay for mobilized reservists, deployed pay and allowances, 

and end-strength above the baseline active duty force (182.7K in FY15). However, 

as the Marine Corps transitions from Operation Enduring Freedom in Afghanistan 

to steady state operations, including forward presence and crisis response, some of 

the activities currently funded via OCO will likely migrate to the baseline to support enduring missions and requirements. The Marine Corps currently estimates 

this amount to be between $200 and $450 million. This represents approximately 

8 to 11 percent of our total FY 2014 OCO request of $4.0B. In FY2011, the Marine Corps requested $4.0B (5% of the DOD’s $85.3B request). 

With continued support from Congress for our manpower, combat operations, predeployment training equipment repair and replacement, and our reset requirements, 

we believe we can maintain a ready and capable force albeit with some near term 

risks in our infrastructure sustainment and equipment modernization accounts. 

Mr. WITTMAN. How would your overall readiness be affected by the elimination 

of OCO? What training would be curtailed? What infrastructure would be affected? 

How would ability to maintain equipment and fully staff units be affected? 

General PAXTON. In FY2011, the Marine Corps requested $4B (5% of the DOD’s $85.3B request). With continued support from Congress for our manpower, combat 

operations, pre-deployment training equipment repair and replacement, and our 

reset requirements, we believe we can maintain a ready and capable force albeit 

with some near term risks in our infrastructure sustainment and equipment modernization accounts. 

Mr. WITTMAN. In light of the civilian personnel hiring freezes and furloughs in 

FY2014, what impacts, if any, were there on the shipyards and aviation depots? 

How were they mitigated or what risk was assumed? What is the civilian personnel 

hiring plan for the shipyards in FY15? 

General PAXTON. The Marine Corps has no shipyards or aviation depots and, 

thus, defers to Navy on civilian furlough and pay freeze impacts on those entities. 

Mr. WITTMAN. How will each of your services achieve the headquarters reductions 

ordered by Secretary Hagel and at the same time ensure critical functional capabilities are not lost? What is your strategic human capital plan? 

General PAXTON. The Marine Corps supports measures such as the 20% reduction 

to management headquarters which is designed to enhance efficiency and cost effectiveness of our workforce. Due to fiscal constraints, the Marine Corps had already 

established an Executive Steering Group to determine how to minimize stress and 

maintain faith with our civilian workforce in this austere environment. As a result, 

the Marine Corps phased the management headquarters reduction at approximately 

four percent per year beginning in FY 2015. In addition, since 2009, the Marine 

Corps has restrained growth by prioritizing civilian workforce requirements and realigned resources to retain an affordable and efficient workforce. Similarly, the Marine Corps has identified active duty military billets within headquarters organizations that will be eliminated to achieve the 20% reduction in management headquarters by 2019. Such billets, the Marine Corps feels are appropriate for reduction 

and will not negatively impact functional capabilities of headquarter elements. 

Mr. WITTMAN. Can you address the impact of the furlough on the military and 

civilian workforces? Have you seen spikes in post-furlough separations or retirements? Do you anticipate another furlough will be required? 

General PAXTON. About 90% of our civilian Marines suffered 48 hours of administrative furlough between 8 July and 17 August 2013. Some suffered financially because of 6-days lost pay. The lapse in appropriations furlough during 1–4 October 

affected about 63% of our appropriated funded (APF) civilians and 26% of our nonappropriated funded (NAF). 

Over 60% of our civilian Marines are veterans; a great many are retired and 

former Marines. They come to work for the Marine Corps because they believe in 

and are committed to our mission. Through anecdotal evidence, we know that our 

civilians are frustrated with continued budgetary uncertainty, and the increasing 

publicity in media that portrays them as unproductive and overpaid is stressful and 

demoralizing. 

We have not seen any spikes in separations or retirements. 

The Marine Corps does not anticipate another furlough. Our civilian Marine appropriated-funded workforce is less than 5% of USMC total O&M budget. That represents a ‘‘best value’’ for the defense dollar, as the leanest of all services, with a 
136 

ratio of one appropriated funded civilian to every ten active duty Marines. Frankly, 

sequestration actions break faith with our civilians, and will jeopardize the expertise and continuity necessary to support our military as commitment to federal service wanes. 

Mr. WITTMAN. How did the Secretary’s mandatory 20% headquarters cuts impact 

readiness accounts, if at all? 

General PAXTON. The Marine Corps supports measures such as the 20% reduction 

to management headquarters which is designed to enhance efficiency and cost effectiveness of our workforce. Due to fiscal constraints, the Marine Corps had already 

established an Executive Steering Group to determine how to minimize stress and 

maintain faith with our civilian workforce in this austere environment. As a result, 

the Marine Corps phased the management headquarters reduction at approximately 

four percent per year beginning in FY 2015. In addition, since 2009, the Marine 

Corps has restrained growth by prioritizing civilian workforce requirements and realigned resources to retain an affordable and efficient workforce. Similarly, the Marine Corps has identified active duty military billets within headquarters organizations that will be eliminated to achieve the 20% reduction in management headquarters by 2019. Such billets, the Marine Corps feels are appropriate for reduction 

and will not negatively impact functional capabilities of headquarter elements. 

Mr. WITTMAN. Considering the significant variability associated with the budget 

and the resulting force structure, why does the Department feel that it is an appropriate time to request an additional BRAC round? 

General PAXTON. The last BRAC analysis the Department of the Navy (DON) performed was back in 2004, and at that time the Department reported having about 

21% excess capacity as compared to the metrics established by the 1989 baseline 

inventory; the DOD average was 24%. 

Since that assessment was completed, however, the capabilities of our weapons 

systems and platforms have advanced and our warfighting tactics have evolved, as 

has planning criteria for our infrastructure. Further, while the 2005 BRAC round 

included a number of closures within the DON, the Marine Corps has not experienced the same level of force structure reductions as has the Army and Air Force. 

A new BRAC round would give us the opportunity and rigorous process to take a 

hard look at our infrastructure and force laydown to determine how much excess 

capacity the Marine Corps has today. However, the Marine Corps feels that it is 

appropriately aligned with its bases and infrastructure for its future force structure 

going forward. 

Mr. WITTMAN. Please provide an update as to when the Department is expected 

to complete the European Infrastructure Consolidation Initiative as required by Section 347 of the National Defense Authorization Act for Fiscal Year 2012. Why does 

the Department feel it is appropriate to request an additional round of BRAC prior 

to completing the assessment of infrastructure in Europe? 

General PAXTON. The Department of Defense (DOD) is in the midst of a comprehensive review of its European infrastructure to create long-term savings by 

eliminating excess infrastructure, recapitalizing astutely to create excess for elimination, and leveraging announced force reductions. DOD is analyzing infrastructure 

relative to the requirements of the defined force structure, emphasizing military 

value, operational requirements, joint utilization, and obligations to our allies. DOD 

expects to complete its analysis in late spring and anticipates providing a classified 

report outlining the findings soon after. 

Even significant closures overseas, though, will not be sufficient to make the 

needed reductions in DOD’s excess infrastructure. This underscores the need to conduct the same effort with respect to DOD’s domestic infrastructure, in concert with 

the overseas review to maximize its comprehensiveness and creativity. 

Regarding the Section 347 report on the European Infrastructure Consolidation 

Initiative, then-Deputy Secretary of Defense Ashton Carter submitted the analysis 

on April 16, 2013 (transmittal letter attached). 

[The letter referred to can be found in the Appendix on page 110.] 

Mr. WITTMAN. Has the Secretary of Defense assessed whether excess infrastructure exists in the Department? What empirical support can the Department provide 

to support a request for additional BRAC rounds? 

General PAXTON. The last BRAC analysis the Department of the Navy (DON) performed was back in 2004, and at that time the Department reported having about 

21% excess capacity as compared to the metrics established by the 1989 baseline 

inventory; the DOD average was 24%. 

Since that assessment was completed, however, the capabilities of our weapons 

systems and platforms have advanced and our warfighting tactics have evolved, as 

has planning criteria for our infrastructure. Further, while the 2005 BRAC round 

included a number of closures within the DON, the Marine Corps has not experi-
137 

enced the same level of force structure reductions as has the Army and Air Force. 

A new BRAC round would give us the opportunity and rigorous process to take a 

hard look at our infrastructure and force laydown to determine how much excess 

capacity the Marine Corps has today. However, the Marine Corps feels that it is 

appropriately aligned with its bases and infrastructure for its future force structure 

going forward. 

Mr. WITTMAN. Please describe the readiness challenges the Air Force faces if we 

revert to sequestration level funding after FY15. 

General SPENCER. The Fiscal Year 2015 President’s Budget funding levels are the 

minimum required to achieve Air Force readiness goals by 2023. The reality of the 

Air Force budget is that without sufficient readiness funding, we assume greater 

risk across the full range of military operations required to support the defense 

strategy. Current fiscal constraints pose difficult choices between our strategy-based 

modernization/acquisition programs and the need to simultaneously address our 

near- and long-term full-spectrum readiness shortfalls. Without adequate readiness 

funding, the Air Force cannot maintain a ready force or even begin reversing our 

long downward readiness trend, which we are currently addressing in FY14–15 

under the funding provided by the Bipartisan Budget Act. 

The return of Budget Control Act (BCA) funding levels would significantly impact 

our ability to adequately resource flying hours, weapons system sustainment, depot 

maintenance, training ranges, preferred munitions, and large-force exercises. If BCA 

funding levels return, readiness will decline across all Air Force core missions and 

we will not be able to meet our 2023 readiness goals. 

Our units will have to fly at reduced training rates and the Air Force will again 

be forced to stand down units, similar to actions taken in FY13. As the Department 

indicated in the sequestration reports, the Air Force will be forced to consider additional force structure options, such as divesting the KC–10 and Global Hawk Block 

40 fleets and reducing by ten the number of MQ–9 orbits. BCA funding levels mean 

cuts to our readiness and recapitalization/modernization accounts and will result in 

fewer ready forces available to support the defense strategy. The result will be a 

less capable, smaller force that is even less ready for tomorrow’s fight. 

Mr. WITTMAN. What would be the impacts to the Air Force’s readiness posture if 

we maintained our current force structure with the current funding levels? 

General SPENCER. The Bipartisan Budget Act’s (BBA) funding levels do not resolve the long term readiness issues that stemmed from the imposition of the Budget Control Act and years of declining readiness. Anticipated funding based on the 

BBA helps reverse the readiness decline, but it will likely not fix Air Force readiness during the Future Years Defense Program (FYDP); this is one of the reasons 

that PB15 seeks increased resources (above the BBA level) in Fiscal Year 2016 

(FY16) and beyond. Achieving a ready Air Force will be an estimated ten year process, with recovery sometime around 2023. The longer term readiness picture remains uncertain due to the resource drain stemming from the Air Force’s inability 

to shed excess force structure and the looming threat of a return to sequester-level 

budgets in FY16 and beyond. 

If the Air Force were to maintain its current force structure at current funding 

levels, we would be forced to shift critical funds out of our readiness and recapitalization/modernization accounts. Depending on the outcome of these budget-driven 

tradeoffs, units will be forced to fly at reduced training rates and the Air Force will 

again be forced to stand down units, similar to actions taken in FY13 and from 

which (as of May 2014) the Air Force has yet to fully recover. This would result in 

fewer ready forces to meet the requirements of the defense strategy and a less capable, smaller force that is even less ready. 

Mr. WITTMAN. If Congress fails to grant the Air Force authority to cut A–10s, do 

you anticipate implications for force readiness? If so, can you provide specifics? 

General SPENCER. Yes, we do expect negative impacts to readiness if we are not 

permitted to divest the A–10. Without a $4.2 billion addition to the Air Force’s 

topline that is necessary to maintain the current A–10 fleet across the Future Years 

Defense Program (FYDP), the Air Force would be forced to shift critical funds out 

of our readiness and recapitalization/modernization accounts. Without these savings, 

units will be forced to fly at reduced training rates and the Air Force will again be 

forced to stand down units, similar to actions taken in fiscal year 2013 and from 

which (as of May 2014) the Air Force has yet to fully recover. This would result in 

fewer ready forces to meet the requirements of the defense strategy and a less capable, smaller force that is even less ready. 

Mr. WITTMAN. The budget request funds only 65% of facility sustainment requirements. What is the impact of this budget decision? What tradeoffs were made to justify this determination? When do you anticipate this issue to be addressed? How 

much budget authority is required? 
138 

General SPENCER. The Air Force’s Fiscal Year 2015 President’s Budget (FY15 PB) 

budget decision accepts near-term risk with long-term effects in facilities 

sustainment, restoration, and modernization (FSRM). The impact of this budget decision is further degradation of an already older/aging infrastructure. The current 

fiscal environment required difficult choices. We prioritized readiness and modernization over facilities to balance capacity, capability, and readiness. The FY15 PB 

supports that strategy, but a return to sequestration-level budgets will make the 

choices worse. 

Mr. WITTMAN. How much excess capacity does the Air Force currently have with 

respect to installations and facilities? How did you determine this percentage? What 

current information do you have to make this determination? 

General SPENCER. The Secretary of Defense’s 2004 § 2912 Report to Congress stated the Air Force had 24 percent excess infrastructure. Broad mission categories 

were parametrically assessed, compared to mission requirements, and yielded a nonspecific, excess capacity result. The 24 percent conclusion was mission focused (i.e., 

bomber, depots, training) and not base-by-base. 

This excess infrastructure was not sufficiently addressed by the base realignment 

and closure round in 2005 (BRAC 2005). Only eight minor installations were closed 

and less than one percent of Plant Replacement Value (PRV) was reduced. Since 

BRAC 2005, the Air Force has further reduced its force structure by approximately 

500 aircraft and eight percent of military manpower authorizations. Add to this the 

FY15 PB proposal to reduce force structure by an additional 500 aircraft and up to 

20,000 Airmen, and the need for BRAC becomes even more compelling. 

Mr. WITTMAN. Last year, the committee provided the Air Force with budget authority to demolish a number of excess buildings across installations. What is the 

status of demolition projects and do you need additional authority this year? 

General SPENCER. In FY14, Congress authorized $2.88B in Facilities Sustainment, 

Restoration and Modernization (FSRM). From this FSRM, the Air Force had 

planned for $29M in Demolition. 

Due to budget constraints, the Air Force made the decision to target resources on 

‘‘mission-critical, worst-first’’ infrastructure needs, and defer demolition (low risk) to 

focus resources on mission-enabling renovations (restoration and modernization). 

The Air Force has currently funded five projects in fiscal year 2014 (FY14) worth 

$4.1 million and is prepared to fund 12 more projects in FY14 worth $8.3 million. 

Mr. WITTMAN. Which readiness accounts are you most concerned about? What can 

we do to help? If provided with extra budgetary authority, what would you seek to 

do? 

General SPENCER. The Air Force’s primary readiness concern is to ensure adequate funding levels for flying hours, weapons system sustainment (WSS), ranges, 

preferred munitions, simulators, and exercises. Without adequate funding, the Air 

Force cannot maintain a ready force or even begin reversing our long-standing 

downward readiness trend, which we are currently addressing under the Bipartisan 

Budget Act. The Air Force will prioritize flying hours, WSS, ranges, munitions, simulators, and exercises to recover readiness and to meet our 2023 readiness goals. 

Mr. WITTMAN. Can you articulate the impact of cancelled training that occurred 

over the last two years as a result of sequestration? 

General SPENCER. Loss of high-intensity training has eroded the Air Force’s fullspectrum readiness. As of May 2014, nearly 50 percent of the units stood down in 

fiscal year 2013 (FY13) due to sequestration had yet to recover to their suboptimal, 

pre-sequester readiness levels. Sequestration forced the cancellation or curtailment 

of weapons school classes and several major exercises in FY13, including RED 

FLAG, which has further eroded the Air Force’s readiness and made us less prepared to decisively win in future contingencies in contested and highly-contested environments. 

If desired, we can provide more detail in a classified forum. 

Mr. WITTMAN. What level of unit readiness does the President’s Budget Request 

assume? If funded at the budget request level, how long until we regain sufficient 

full spectrum readiness? 

General SPENCER. PB15 funding levels enable the Air Force to achieve its readiness goals by 2023. Below this funding level, we assume greater risk across the full 

range of military operations that are required to support the defense strategy. Current fiscal constraints pose difficult choices between our strategy-based modernization/acquisition programs and the need to simultaneously address our near- and 

long-term full-spectrum readiness shortfalls. Without PB15 funding levels, the Air 

Force cannot realize a ready force. The Air Force began reversing our long-standing 

downward readiness trend in Fiscal Years 2014–15 with funding provided by the Bipartisan Budget Act. 
139 

The return of Budget Control Act (BCA) funding levels would significantly impact 

our ability to adequately resource flying hours, weapons system sustainment, depot 

maintenance, training ranges, preferred munitions, simulators, and large-force exercises. If BCA funding levels return, readiness will decline across all Air Force core 

missions and we will not be able to meet our 2023 readiness goals. 

Mr. WITTMAN. Much of the $26 billion Opportunity, Growth, and Security Initiative (OGSI) Fund is aimed at mitigating short-term readiness shortfalls. If funded 

at the budget request levels, what additional readiness shortfalls are present within 

the Services? Can we expect the OGSI to mitigate all or most of these? What is the 

impact or risk if OGSI is not funded? 

General SPENCER. The Fiscal Year 2015 President’s Budget (FY15 PB) request 

continues to rebuild readiness levels for the Air Force by funding all executable flying hours, sustaining space enterprise capabilities, and investing in cyber operations 

readiness. However, emergent requirements in the nuclear enterprise and critical 

shortfalls for Combat Air Force exercises, ranges, and training still remain. The Opportunity, Growth, and Security Initiative (OGSI) and the Air Force unfunded priority list (UPL) seek to mitigate all of these shortfalls in FY15 by funding over $100 

million in nuclear force improvement program initiatives, increasing funding for 

combat training ranges, and restoring installation support funding that directly enhances Air Force preparedness for combat, contingency, and day-to-day operations. 

If the OGSI/UPL is not funded, it will take the Air Force longer to return to fullspectrum training and achieve necessary readiness levels required to fully execute 

combatant commander requirements. 

Mr. WITTMAN. Which readiness accounts are you most concerned about? What can 

we do to help? If provided with extra budgetary authority, what would you seek to 

do? 

General SPENCER. The Air Force’s primary readiness concern is to ensure adequate funding levels for flying hours, weapons system sustainment (WSS), ranges, 

preferred munitions, simulators, and exercises. Without adequate funding, the Air 

Force cannot maintain a ready force or even begin reversing our long-standing 

downward readiness trend, which we are currently addressing under the Bipartisan 

Budget Act. The Air Force will prioritize flying hours, WSS, ranges, munitions, simulators, and exercises to recover readiness and to meet our 2023 readiness goals. 

Mr. WITTMAN. Can you articulate the impact of cancelled training that occurred 

over the last two years as a result of sequestration? 

General SPENCER. Loss of high-intensity training has eroded the Air Force’s fullspectrum readiness. As of May 2014, nearly 50 percent of the units stood down in 

fiscal year 2013 (FY13) due to sequestration had yet to recover to their suboptimal, 

pre-sequester readiness levels. Sequestration forced the cancellation or curtailment 

of weapons school classes and several major exercises in FY13, including RED 

FLAG, which has further eroded the Air Force’s readiness and made us less prepared to decisively win in future contingencies in contested and highly-contested environments. 

If desired, we can provide more detail in a classified forum. 

Mr. WITTMAN. How dependent are you on OCO for day-to-day operations? How 

will the dependence change after the majority of, or possibly all, combat troops are 

out of Afghanistan? 

General SPENCER. The Air Force currently executes over $9 billion per year in 

OCO operations and maintenance (O&M) funding. This funding covers flying hours, 

weapon system sustainment (WSS), transportation, and base operating support 

(BOS) for Air Force-operated installations in the U.S. Central Command area of responsibility (CENTCOM AOR). Over 80 percent of our OCO BOS costs are for installations located outside of Afghanistan. We anticipate those requirements and 

costs will endure. 

The Air Force does not anticipate significant changes in CENTCOM enduring requirements. Operations over the last 20 years suggest the demand for Air Force capabilities will remain high even after combat operations cease, particularly in terms 

of continued rotational deployments and sustaining the bases in the CENTCOM 

AOR that are not in Afghanistan. If OCO is no longer available, the Air Force will 

need a topline funding increase to the baseline budget or supplemental funding to 

continue operations to support combatant commander requirements. 

Mr. WITTMAN. Please describe the enduring, non-Afghanistan-related requirements your service funds through OCO. How would you address those requirements 

in the absence of OCO? 

General SPENCER. The Air Force anticipates a number of enduring requirements, 

particularly in terms of continued rotational deployments and sustaining the Air 

Force-operated bases in the U.S. Central Command area of responsibility 

(CENTCOM AOR) that are not in Afghanistan. If we continue to deploy and sustain 
140 

these bases, all of the associated costs (e.g., flying hours, weapon system 

sustainment (WSS), base operating support (BOS)) must be funded, either by baseline growth or continued supplemental funding. Without increased baseline or continued supplemental funding, we will be forced to fund these requirements within 

the current operations and maintenance (O&M) baseline. This could result in similar impacts seen during fiscal year 2013 sequestration: insufficient flying hours to 

maintain readiness, standing down flying units, less ready units for emergent requirements, and potentially not enough ready units for rotational demands, such as 

theater security packages in U.S. Pacific Command (PACOM) or CENTCOM. The 

Air Force would either need increased baseline or supplemental funding as the magnitude of the efforts cannot be sustained in current baseline funding levels. The impact of no overseas contingency operations (OCO) funding depends on requirements. 

If all of the requirements—to include flying hours, transportation, WSS, and BOS— 

were to go away, the Air Force would only need OCO funding for a finite reset period of a few years, after which there would be minimal impact to terminating OCO 

funding. However, as stated earlier the Air Force does not anticipate significant 

changes in the CENTCOM requirements. 

Mr. WITTMAN. Please describe your service’s efforts to migrate enduring requirements into the base budget. How challenging has sequestration made that task? 

What is most at-risk? 

General SPENCER. The Air Force is focused on maximizing full spectrum readiness 

requirements. As overseas contingency operations (OCO) missions decline, funding 

for flying hour and weapon systems sustainment (WSS) programs will require additional baseline funding to return to full spectrum readiness training as the Air 

Force continues to execute the same number of flying hours and depot maintenance 

levels. The Air Force incrementally increased the OCO-to-base funding request for 

WSS in the fiscal year 2015 (FY15) Future Years Defense Program (FYDP) to account for this enduring requirement. Programmed increases start in FY16 by approximately $1 billion to $1.5 billion a year, increasing base funding from 70 percent 

to 80 percent of the WSS requirement. This is the only OCO to base transfer the 

Air Force has made in the FY15 budget submission. However, this plan is not 

achievable if the Air Force has to maintain Budget Control Act levels in FY16 and 

out. 

Mr. WITTMAN. Although you may not be able to discuss specifics until the FY15 

OCO budget is officially released, how confident are you in the adequacy of this 

year’s OCO budget request? How much of your services’ operations, maintenance, 

and training requirements are met by the base budget? 

General SPENCER. The Air Force is confident that the fiscal year 2015 (FY15) 

overseas contingency operations (OCO) budget request will be adequate to properly 

fund the OCO mission. The Air Force is maximizing the use of operations and maintenance (O&M) dollars to help recover full-spectrum readiness, which is directly tied 

to operations, maintenance, and training requirements. Readiness recovery needs a 

stable level of funding and reduced operations tempo over time rather than a total 

requirement funded in a single year. 

Mr. WITTMAN. How would your overall readiness be affected by the elimination 

of OCO? What training would be curtailed? What infrastructure would be affected? 

How would ability to maintain equipment and fully staff units be affected? 

General SPENCER. The Air Force relies on overseas contingency operations (OCO) 

funds to adequately resource weapon system sustainment (WSS) accounts. WSS is 

a critical component of overall readiness, encompassing depot maintenance, contract 

logistics support (CLS), and sustainment engineering. WSS directly impacts fleet 

availability and the ability of front line units to generate aircraft at a rate that can 

support the flying hour program, and, hence, the ability to train for a full spectrum 

of operations called for in the defense strategy. 

The elimination of OCO funding would significantly impact Air Force full-spectrum readiness. Should OCO funding be unavailable in future budgets and without 

an equivalent increase to the Air Force’s topline, depot throughput and weapon system repair capabilities would be significantly impacted and jeopardize the Air 

Force’s ability to meet 2023 readiness goals. 

In addition, the Air Force needs adequate flying hours to generate trained and 

ready aircrew. We anticipate continued deployment requirements in the U.S. Central Command area of responsibility (CENTCOM AOR) even after combat operations 

end, and if the Air Force is compelled to resource these flying hours from the baseline flying hour program (vice OCO or supplemental funding), readiness will significantly degrade. 

Finally, operations, sustainment, repair, maintenance, and construction of some 

overseas infrastructure and real property assets are funded through OCO. These 

costs are significant. The elimination of OCO funding would greatly reduce the abil-
141 

ity of the Air Force to provide engineering capabilities and services to the combatant 

commanders, limit their ability to generate combat power, and reduce readiness 

across the Air Force. An alternate funding source, or migration of these costs to the 

Air Force base budget and an equivalent increase to the Air Force topline, will be 

required. 

Mr. WITTMAN. In light of the civilian personnel hiring freezes and furloughs in 

FY2014, what impacts, if any, were there on the shipyards and aviation depots? 

How were they mitigated or what risk was assumed? What is the civilian personnel 

hiring plan for the shipyards in FY15? 

General SPENCER. The Air Force focused on recovering from sequestration in fiscal 

year 2013 (FY13) and getting depot production back on track in 2014. FY13 sequestration negatively impacted the time required to perform depot maintenance at 

Oklahoma City Air Logistics Complex, Ogden Air Logistics Complex, and Warner 

Robins Air Logistics Complex. We expect to fully recover from flow day delays by 

December 2014. In terms of depot maintenance manpower, the Air Force manages 

workforce based on the available funded workload per Title 10 USC 2472. As a result, any personnel actions underway at the depot in FY14 are not expected to add 

risk to the funded workload. 

Mr. WITTMAN. How will each of your services achieve the headquarters reductions 

ordered by Secretary Hagel and at the same time ensure critical functional capabilities are not lost? What is your strategic human capital plan? 

General SPENCER. The Air Force has undertaken a fundamental process review 

across all levels of headquarters to identify and streamline staff capabilities, while 

ensuring we do not lose all critical functional capabilities resident on the staff. 

Where applicable, we are moving organizations with key warfighting-enhancing capabilities out from under the Headquarters Air Force and to the major commands 

responsible for conducting those operations. Within the headquarters reductions, the 

strategic human capital plan will maximize use of all voluntary measures, such as 

voluntary early retirement authority and voluntary separation incentives, in order 

to achieve any necessary headquarters reductions. 

Mr. WITTMAN. Can you address the impact of the furlough on the military and 

civilian workforces? Have you seen spikes in post-furlough separations or retirements? Do you anticipate another furlough will be required? 

General SPENCER. The furlough decreased the morale and sense of value of the 

civilian workforce. We are working to rebuild trust, and we do not anticipate the 

need for a furlough in fiscal year 2014 (FY14) or beyond. The impacts of the furlough have translated into very minimal impacts to current recruitment efforts and 

the retention of civilians. In fact, there was a downward trend in the overall number 

of civilian retirements from FY12 to FY13. 

Mr. WITTMAN. How did the Secretary’s mandatory 20% headquarters cuts impact 

readiness accounts, if at all? 

General SPENCER. The Air Force implemented the management headquarters cost 

reduction per Secretary Hagel’s direction in the Fiscal Year 2015 President’s Budget 

(FY15 PB) submission. The cost reduction in management headquarters overhead 

allowed the Air Force to maintain more funding in readiness accounts within the 

FY15 PB submission than would have been possible otherwise. 

Mr. WITTMAN. Considering the significant variability associated with the budget 

and the resulting force structure, why does the Department feel that it is an appropriate time to request an additional BRAC round? 

General SPENCER. An additional base realignment and closure (BRAC) round is 

needed now to allow the Air Force to properly address its excess infrastructure, and 

thus focus limited resources on remaining essential force structure and readiness. 

Annually, the Air Force expends $5 billion on facilities and $9 billion to operate 

installations. It is becoming more and more difficult to sustain installation infrastructure, with sustainment funds reduced from 80 percent in the Fiscal Year 2014 

President’s Budget (FY14 PB) to 65 percent in the FY15 PB. The Air Force has accepted near-term risk (with long-term detrimental effects) in order to keep installations running. 

In the absence of BRAC, the Air Force has pursued other available avenues to 

reduce costs, demolishing 48.8 million square feet of aging building space since 2006 

and saving $300 million in the process. Demolition cannot address the full extent 

of Air Force excess infrastructure, however, and another BRAC is necessary to reduce long-term costs in the face of continuing budgetary pressures. 

Mr. WITTMAN. Please provide an update as to when the Department is expected 

to complete the European Infrastructure Consolidation Initiative as required by Section 347 of the National Defense Authorization Act for Fiscal Year 2012. Why does 

the Department feel it is appropriate to request an additional round of BRAC prior 

to completing the assessment of infrastructure in Europe? 
142 

General SPENCER. The Office of the Secretary of Defense (OSD) European Infrastructure Consolidation (EIC) analysis and recommended scenarios is expected to be 

complete in summer 2014. The EIC has progressed sufficiently to validate infrastructure requirements and has revealed opportunities for reductions and savings. 

The EIC also validated the current force structure requirement in Europe, which 

will remain relatively constant in order to support the national strategy and alliance 

commitments. 

But the potential savings are not enough to offset the declining Department of Defense (DOD) budget and contracting forces the Department anticipates in the coming years. The Fiscal Year 2015 President’s Budget (FY15 PB) requests a BRAC 

round in 2017, which allows the Department two years to prepare. The process will 

begin by providing Congress a certified force structure plan and installation inventory. BRAC authority will allow the Air Force time to conduct the appropriate analysis, authoritatively measure and compare force structure and infrastructure requirements, and validate operational and support requirements. 

We know at this juncture an additional round of BRAC, that best aligns infrastructure to anticipated mission and personnel end states, will provide significant 

savings. For these reasons the Department requests a BRAC even as the EIC report 

concludes. 

Mr. WITTMAN. Has the Secretary of Defense assessed whether excess infrastructure exists in the Department? What empirical support can the Department provide 

to support a request for additional BRAC rounds? 

General SPENCER. The Air Force has not conducted a capacity analysis to determine the current level of excess infrastructure since the base realignment and closure round in 2005 (BRAC 2005). For BRAC 2005, as part of Section § 2912 of the 

National Defense Authorization Act for Fiscal Year 2003, the Secretary of Defense’s 

2004 BRAC report to Congress stated that the Air Force had approximately 24 percent excess infrastructure capacity. 

The BRAC 2005 Commission recommendations for the Air Force resulted in eight 

closures, but only reduced Air Force infrastructure by approximately one percent of 

plant replacement value. Since then, the Air Force has reduced force structure by 

approximately 500 aircraft and eight percent of its military authorizations. The Fiscal Year 2015 President’s Budget further proposes to reduce force structure by an 

additional 500 aircraft and cut military authorizations by up to 20,000 Airmen. We 

therefore believe the Air Force currently retains excess infrastructure capacity. 

QUESTIONS SUBMITTED BY MS. BORDALLO 

Ms. BORDALLO. The DOD and Army budget submissions highlight reductions in 

depot maintenance personnel as an area of cost savings. By what percentage does 

the Army plan to reduce its depot maintenance workforce in FY15? What is the 

risk? 

General CAMPBELL. The DOD and Army budget submissions do not highlight reductions in depot maintenance personnel as an area of cost savings. Personnel reductions to the organic industrial base would not result in any direct savings because these personnel are employed on a reimbursable basis. The FY15 President’s 

Budget submission projects a 3.8% (818 people) reduction of civilian personnel from 

industrial operation activities. 

The personnel reductions are aligned with declining workloads, will not result in 

a loss of required critical skill sets, and demonstrate that the Army is effectively 

executing its strategic vision outlined in The Army’s Organic Industrial Base Strategic Plan; specifically, depot and arsenal work force and infrastructure will be sized 

and adjusted accordingly over time to sustain core depot and critical manufacturing 

capabilities to support war fighting equipment during current and future contingency operations. 

Ms. BORDALLO. DOD indicates that the budget protects core functions. Under the 

FY15 budget proposal, does the Army fund core at each of its 5 primary maintenance depots? If not, where does it fall short? 

General CAMPBELL. The Army’s goal is to satisfy 100% of core workload requirements. Currently, the Army projects funding 72% of its total core requirements in 

FY15, but falls short in meeting minimum core requirements for ground vehicles 

(Stryker, Bradley, Paladin, Tactical Wheeled Vehicles, etc.) and communications 

electronics systems (AN/TPQ–36, SMART–T, etc). Currently, these weapon systems 

do not need depot level repair above the budgeted level because of low Operating 

Tempo rates and reduced fleet ages as a result of the Army’s robust Reset and Recapitalization programs. The Army will mitigate these shortfalls through Army 
143 

funded programs, other Service funded work, repair of Foreign Military Sales equipment, and like system work requiring similar artisan skills. 

Ms. BORDALLO. Are there any areas where there is insufficient FY15 workload 

proposed for assignment to a depot to meet the core requirement, but funded workload that meets the definition of core is contracted to the private sector? The committee is aware of those types of situations taking place in Fiscal Year 13 in the 

Army and would like to know under what authority the Department or a military 

service could take such an action. Is that taking place in the current fiscal year? 

General CAMPBELL. The Army has core shortfalls due to reduced available workload for ground vehicles (Stryker, Bradley, Paladin, Tactical Wheeled Vehicles, etc.) 

and communications electronics systems (AN/TPQ–36, SMART–T, etc). Currently, 

these weapon systems do not need depot level repair above the budgeted level because of low Operating Tempo rates and reduced fleet ages as a result of the Army’s 

robust Reset and Recapitalization programs. The Army is able to mitigate these 

shortfalls through the provision of depot level repairs in support of the Foreign Military Sales program, other Service workload, and like system work requiring similar 

artisan skills. 

A small percentage of ground vehicle and communication electronics system workload that is contracted to private industry could be used to meet Army core requirement shortfalls in FY15. However, this contracted workload was initially identified 

as above core requirements and the majority of the work is performed under publicprivate partnerships, Title 10 U.S. Code 2474, between the organic depots and original equipment manufacturers. The Army currently projects 59.4% of its depot level 

workload will be performed in organic depots and 40.6% of that work to be contracted to private industry in FY15. 

Ms. BORDALLO. How was the analytically based workforce-to-workload review conducted that was designed to preserve mission essential skills and capabilities that 

suggested the proposed reductions in depot maintenance personnel in the Army? 

Who conducted the review and when was it conducted? Please share the findings 

with the committee. 

General CAMPBELL. The Army re-calculated its core depot requirements using the 

Department of Defense Instruction 4151.20, Depot Maintenance Core Capabilities 

Determination process. Core requirements are based on the number of weapon systems and other military equipment assigned to Army organizations and required to 

deploy in support of contingency and emergency operations. 

The analytically based workforce-to-workload review begins by converting the 

equipment densities required to support these operations into annual peacetime repair quantities and then converting the repair quantities into annual direct labor 

hour requirements. Once core requirements are determined, the workforce capabilities and skills necessary to support the core workload requirements are established 

at selected organic depots. 

HQDA G–4, in coordination with the Army Materiel Command, completed the 

Army’s Biennial Core Report that will be released to Congress this summer. The 

Army core requirements will continue to evolve as force structure and equipment 

densities required to support joint warfighting scenarios change. 

Ms. BORDALLO. The budget submission indicates that changes reflect Componentidentified opportunities for reshaping their civilian workforces through realignments 

and workload reductions consistent with Departmental strategies, and with due consideration of statutory total force management and workload sourcing mandates. 

What realignments are you proposing for depots or the organic industrial base to 

ensure efficiency of operations? What statutory mandates were considered in making proposals for large scale reductions in Army depot personnel? 

General CAMPBELL. The FY15 President’s Budget submission projects a 3.8% (818 

people) reduction in civilian personnel across all Army Organic Industrial Base 

(OIB) activities. Title 10 U.S. Code, Section 2472, was considered in making these 

personnel reduction decisions to efficiently support the declining workloads, without 

the loss of critical workforce skill sets. 

The Army Organic Industrial Base Strategic Plan provides the strategy and management framework to size the OIB workforce to sustain core depot and critical 

manufacturing capabilities as the Army draws down from a decade of combat operations, and adjusts to declining workload requirements. This plan is designed to ensure the OIB remains effective, efficient, and capable of meeting future Army contingency requirements. As part of this strategic plan, the Army will develop a 

Human Capital Investment Plan for depots and arsenals that will inform future personnel alignment decisions. 

Currently, OIB facilities adjust the size of their workforce to meet the workload 

demand through a judicious use of Government temporary and term personnel, and 
144 

contractor support and use overtime compensation to meet surge workload requirements. 

Ms. BORDALLO. What percentage of reset dollars do you expect to allocate to organic depots? How much of that workload is core? 

General CAMPBELL. The Army expects to execute approximately 80% of its FY14 

Sustainment Reset funding within organic industrial base facilities; approximately 

45% of that workload satisfies Army’s core workload requirements. 

Ms. BORDALLO. What percentage of depot maintenance requirement is funded in 

FY15? 

General CAMPBELL. 44% ($1.19 billion) of the Army’s critical depot maintenance 

requirements are funded in the FY15 budget request. The Army has assumed a 

level of risk in depot maintenance as we work toward a balanced program in future 

budget submissions. The Army views this level of risk as manageable so long as the 

Congress supports OCO funding requirements for equipment Reset. 

Ms. BORDALLO. In calculating core, the military services have increasingly placed 

an emphasis on minimum capabilities; however, the statute also requires efficient 

operations. Under the FY15 budget, should we assume that each of the services’ organic primary maintenance depots and shipyards have been workloaded and funded 

at efficient levels before workload is planned for the private sector? 

General CAMPBELL. Army depots are assigned available workload to meet the intent of 10 USC Section 2464, Core Depot-level Maintenance and Repair Capabilities, 

prior to outsourcing workload to the private sector. 

Although depot level work load is declining commensurate with the end of combat 

operations in Afghanistan, the Army continues to balance depot level workload between organic and the private sector. Adhering to 10 USC Section 2474, which authorizes the use of Public Private Partnership, the Army employs the Army’s Organic Industrial Base Strategic Plan to set conditions for establishing complementary capabilities between organic and commercial industrial base providers. This 

practice ensures the Army appropriately assigns available depot level workload to 

each sector. The Army also adheres to 10 USC Section 2466, which limits the Army 

to using no more than 50% of funds received in a fiscal year to contract for the performance of such workload by non-Federal Government personnel. 

Ms. BORDALLO. In light of section 832 of the FY12 NDAA (Public Law 112–81), 

regarding the assessment, management, and control of O&S costs for major weapon 

systems: • What predictive analysis and modeling processes have been the most effective 

at weapon systems optimization across the enterprise? Are there specific examples of successes or best practices that might be cited? • How are modeling and simulation results comparing to actual performance once 

the decisions have been implemented? Although some savings may take time 

to materialize, are there indications of ROI are they achieving? 

• In accordance with the NDAA section 823, how should DOD be using predictive 

analysis and modeling and simulation to understand the real impact of the 

DOD 5000.2 (http://www.acq.osd.mil/ie/bei/pm/ref-library/dodi/p50002r.pdf) on 

the effectiveness and efficiency of the DOD enterprise? 

a. What predictive analysis and modeling processes have been the most effective 

at weapon systems optimization across the enterprise? 

General CAMPBELL. The Army has placed increased emphasis on estimating weapon system operating and sustainment (O&S) costs early in the acquisition process. 

Estimates for O&S are conducted and updated at specific stages throughout the 

lifecycle of a program, including Analysis of Alternative studies, Milestone Decision 

reviews, and Full Rate Production Decisions/Full Deployment Decisions. The Army 

Costs Review Board (CRB) was established to provide an independent service-level 

cost position for programs. The cost position is a development to divestment lifecycle 

cost estimate. 

The life cycle cost estimate (LCCE) is an effective predictive analysis and modeling tool for optimizing investment in new equipment capabilities. The LCCE helps 

identify nearly all program costs up front, which informs analysis regarding the affordability of the system. Additionally, the LCCE can be used to identify critical 

high cost sub-systems and components that ultimately drive operation and 

sustainment (O&S) costs. These high cost items can be emphasized during the design phase both to minimize O&S cost impacts and posture the Army to sustain 

these systems. The LCCE can also be used to identify trade space in the requirements, which provides program managers the flexibility to trade performance where 

it will not gain capability for better sustainability that will lower O&S costs. 

The estimate development process is collaborative, with participation from all 

stakeholder Army agencies, and includes the O&S resources that contribute to 

weapon systems. The estimate incorporates Lifecycle Sustainment Plans and uses 
145 

actual cost data from the sustainment of current weapon systems. This enables 

leadership to make cost-informed decisions early in the acquisition strategy planning process. The CRB process results in defined programs with high-quality cost 

estimates that are documented, defendable, and affordable. 

The Army also has implemented the Long-range Investment Requirements Analysis (LIRA) process to manage the lifecycle of weapon systems from a holistic approach over a 30 year period. LIRA uses input from multiple organizations within 

the Army to synchronize across the modernization, sustainment, training, and installation communities, coordinating materiel development schedules to eliminate 

production/sustainment gaps and redundant solutions for identified requirements. 

LIRA also reviews Science and Technology initiatives, operational testing efforts, 

key decisions and timelines, total lifecycle cost assessments, program new starts or 

transitions to sustainment, potential infrastructure adjustments and timelines for 

developing training and requirements, to eliminate redundancies and promote efficiency. LIRA provides a strategic view of investments over time and informs the 

Army’s overall investment strategy to meet the long term vision and goals. 

In addition to these broader initiatives, the Army is also controlling O&S cost at 

the program level through incorporation of Condition-Based Maintenance Plus 

(CBM+) and Item Unique Identification (IUID) on Army weapon systems as part of 

the design process. CBM+ is a proactive maintenance capability that predicts and 

reports impending system failures by monitoring system health indicators. IUID is 

a capability to identify and track individual items and systems throughout the 

lifecycle. The combined objectives of both efforts are to increase platform availability, readiness, and safety; increase maintainer efficiency and productivity; and 

decrease logistics footprint and maintenance support requirements. To date, the 

Army has installed CBM+ sensors on 2,835 aircraft, 1,425 missiles, and over 200 

tactical wheel vehicles. 

b. Are there specific examples of successes or best practices that might be cited? 

The emphasis on O&S cost reduction has been implemented for all Army programs, 

from upgrades to Blackhawk helicopters to the design of a new light tactical vehicle. 

These best practices will ensure systems are sustainable and will increase efficiencies in their respective logistics infrastructures and footprints. The Joint Light 

Tactical Vehicle (JLTV) is an example of a program controlling cost through best 

practices. The JLTV program has used historical data and an independently certified lifecycle cost estimate to identify critical requirements driving O&S cost, along 

with continuing analysis at milestone decision points to continue affordability 

through the lifecycle. 

c. How are modeling and simulation results comparing to actual performance once 

the decisions have been implemented? 

Due to the newness of these recently implemented policies and the lack of currently fielded systems that were designed with O&S as a main requirement, there 

is not yet sufficient data to compare M&S results with actual performance. The 

Army is committed to fielding highly sustainable systems and is still searching out 

new as well as refining old methods to further reduce O&S costs. 

Ms. BORDALLO. What percentage of reset dollars do you expect to allocate to organic depots? How much of that workload is core? 

Admiral FERGUSON. Slightly less than 10% of PB15 reset funding is expected to 

be allocated to organic depots. None of the work executed with this OCO funding 

is core workload (as defined by 10 USC § 2464). 

The majority of reset funding will support ship depot maintenance to liquidate the 

backlog of maintenance on our surface ships undergoing depot availabilities in 

FY15. All reset work will be conducted in the private sector and will include no core 

workload. 

Some reset funding will support aviation airframe depot maintenance. This maintenance is conducted primarily in organic depots, but includes no core workload. 

Some reset funding will support Navy Expeditionary Combat Enterprise depot 

maintenance. None of this funding will be allocated to organic Navy depots or fund 

core workload. 

Ms. BORDALLO. What percentage of depot maintenance requirement is funded in 

FY15? 

Admiral FERGUSON. Navy’s FY15 baseline budget request funds 80% of ship and 

aviation depot maintenance requirements. 

Ms. BORDALLO. In calculating core, the military services have increasingly placed 

an emphasis on minimum capabilities; however, the statute also requires efficient 

operations. Under the FY15 budget, should we assume that each of the services’ organic primary maintenance depots and shipyards have been workloaded and funded 

at efficient levels before workload is planned for the private sector? 
146 

Admiral FERGUSON. The Navy’s organic primary maintenance depots and shipyards have been funded to perform at an efficient level. Specifically, the workload 

and funding at the Naval shipyards are set at levels that ensure the efficient performance of depot and intermediate-level maintenance, modernization, and emergency repair work on nuclear-powered aircraft carriers and submarines. 

Core capability is maintained to perform maintenance on unique surface ship systems, while nearly all of conventional surface ship maintenance is performed in the 

private sector. Likewise, the workload and funding at Fleet Readiness Centers are 

set at levels that ensure the efficient performance of depot-level maintenance, modernization, and special re-work on aircraft and engines. 

Ms. BORDALLO. In light of section 832 of the FY12 NDAA (Public Law 112–81), 

regarding the assessment, management, and control of O&S costs for major weapon 

systems: • What predictive analysis and modeling processes have been the most effective 

at weapon systems optimization across the enterprise? Are there specific examples of successes or best practices that might be cited? • How are modeling and simulation results comparing to actual performance once 

the decisions have been implemented? Although some savings may take time 

to materialize, are there indications of ROI are they achieving? • In accordance with the NDAA section 823, how should DOD be using predictive 

analysis and modeling and simulation to understand the real impact of the 

DOD 5000.2 (http://www.acq.osd.mil/ie/bei/pm/ref-library/dodi/p50002r.pdf) on 

the effectiveness and efficiency of the DOD enterprise? 

Admiral FERGUSON. The industry standard in forecasting future Operating and 

Support (O&S) phase costs entails the use of compiled actual system performance 

data as well as statistical regression analysis of extrapolated data of analogous systems. To that end, the Department of Navy (DON) maintains a database compliant 

with Section 832 of the 2012 NDAA, called the Visibility and Management of Operating and Support Costs. It catalogs historical costs and operational metrics for 

DON weapons platforms. Modeling of O&S costs is accomplished using the Operating and Support Cost Analysis Model. Together, these databases represent the 

DON authoritative data source for historical costs and associated operational/logistic 

metrics for DON weapons systems. 

Best practices for modeling O&S costs are captured in the March 2014 O&S Cost 

Estimating Guide maintained by OSD Cost Assessment and Program Evaluation 

(CAPE). The Navy staff also tracks O&S phase return on investment which is used 

in its coordination of a yearly Total Ownership Cost (TOC) reduction process. This 

process evaluates, selects, and prioritizes affordability candidates within the Navy 

for inclusion in Navy program/budget development. In February 2012, lessons 

learned from these efforts were captured in the DON TOC Guidebook detailing the 

means to mitigate and reduce weapon system O&S related costs. Navy’s TOC efforts 

also serve as an input to major acquisition program gate reviews where they are 

used to assess the life cycle management of cost reduction initiatives. Additionally, 

opportunities to better control or reduce TOC are a key element in the models that 

develop program/budgetary requirement inputs for Navy’s operations/maintenance 

accounts. 

For Acquisition Category (ACAT) I programs, Deputy Assistant Secretary of the 

Navy (Cost and Economics) (DASN (C&E)) performs independent cost estimates and 

assessments, to include O&S costs, prior to milestone reviews. Unless specifically 

designated to do so, they do not perform cost analyses on ACAT II and below, nor 

does DASN (C&E) maintain a repository of all O&S specific models and simulations. 

DASN (C&E) is not chartered to continue involvement in programs beyond the ‘‘full 

rate production’’ milestone, as programs enter execution. 

DOD Instruction 5000.2R was canceled in lieu of DOD Instruction 5000.02 (December 2013). This instruction requires CAPE to review all cost estimates and cost 

analyses for major defense acquisition/information system programs, including estimates of their O&S costs. Any questions regarding the impact of modeling and simulation on the effectiveness/efficiency of the DOD Enterprise are better directed to 

OSD CAPE, Office of the Under Secretary of Defense for Acquisition, Technology, 

and Logistics (OSD (AT&L)), or Assistant Secretary of the Navy Research, Development & Acquisition ASN(RDA). 

Ms. BORDALLO. What percentage of reset dollars do you expect to allocate to organic depots? How much of that workload is core? 

General PAXTON. Due to the recent increase in FY15 reset requirements stemming 

from the Marine Corps’ decision to increase its enduring requirement for MRAP vehicles, the Marine Corps is conducting analysis to determine the optimal source of 

repair strategy for its FY15 reset workload. The Marine Corps plans to validate its 

FY15 reset requirements and source of repair strategy during its annual depot 
147 

maintenance requirements review in August of 2014, and expects to solidify its 

FY15 workload sourcing strategy by the end of the fiscal year. 

Ms. BORDALLO. What percentage of depot maintenance requirement is funded in 

FY15? 

General PAXTON. The Marine Corps is funded to approximately 83% of its FY15 

baseline depot maintenance requirement and the Marine Corps’ FY15 OCO request 

accounts for 100% of planned FY15 depot maintenance OCO requirements. The Marine Corps appreciates the continued support of the Congress for our depot maintenance and Operation Enduring Freedom reset requirements. Although the Marine 

Corps baseline is not funded to 100%, the Marine Corps remains confident that it 

can manage baseline risk by prioritizing and optimizing depot maintenance requirements through its Enterprise Lifecycle Maintenance Planning (ELMP) process. 

Ms. BORDALLO. In calculating core, the military services have increasingly placed 

an emphasis on minimum capabilities; however, the statute also requires efficient 

operations. Under the FY15 budget, should we assume that each of the services’ organic primary maintenance depots and shipyards have been workloaded and funded 

at efficient levels before workload is planned for the private sector? 

General PAXTON. The Marine Corps considers numerous factors when sourcing 

depot maintenance workload including depot providers’ capability, capacity and ability of the depot to meet quality standards and timelines; best value for the government; previously established Depot Source of Repair (DSOR) decisions; and preserving its core organic workload to maintain depot viability. The Marine Corps is 

confident that our organic depot is sufficiently resourced in FY15 to support efficient 

operations per the statute. 

Ms. BORDALLO. In light of section 832 of the FY12 NDAA (Public Law 112–81), 

regarding the assessment, management, and control of O&S costs for major weapon 

systems: • What predictive analysis and modeling processes have been the most effective 

at weapon systems optimization across the enterprise? Are there specific examples of successes or best practices that might be cited? • How are modeling and simulation results comparing to actual performance once 

the decisions have been implemented? Although some savings may take time 

to materialize, are there indications of ROI are they achieving? • In accordance with the NDAA section 823, how should DOD be using predictive 

analysis and modeling and simulation to understand the real impact of the 

DOD 5000.2 (http://www.acq.osd.mil/ie/bei/pm/ref-library/dodi/p50002r.pdf) on 

the effectiveness and efficiency of the DOD enterprise? 

General PAXTON. The Marine Corps has initiated the transition from a documentbased to a model-based engineering approach for acquisition by implementing the 

Framework for Assessing Cost and Technology Tool (FACT). FACT, a governmentowned, web-based tool, provides the framework that integrates disparate data and 

models into a decision-support system that permits concurrent engineering analysis. 

This predictive modeling solution allows for bottom-up, detailed system designs to 

be built, explored in a top-down concurrent cross-domain fashion, filtered and scored 

against a set of dynamically assigned requirements. For example, the Marine Corps’ 

modeling and simulation system engineering assisted I MEF in integrating networks, databases, command and control devices, ground and air training virtual 

simulations and training simulators to enhance home station training. 

Marine Corps Systems Command (MCSC) uses FACT among other predictive lifecycle modeling capabilities to support various life-cycle analyses and Marine Corps 

ground weapon systems programmatic decisions. By using such modeling and simulation (M&S) capabilities, multiple risks can be examined to include the potential 

impacts of executing particular courses of action throughout the weapon system 

lifecycle. Decisions made during the early stages of acquisition could have an impact 

during the O&S phase. For example, conducting predictive analysis throughout the 

systems engineering process (SEP), Analyses of Alternatives (AoA) and Business 

Case Analyses (BCA), design changes, or updates to maintenance support strategies 

can assist decision-makers in implementing a course of action with a defined degree 

of confidence in a resultant outcome in terms of O&S cost and performance. 

While the capability is maturing in knowledge and application, to include organic 

capability, the Marine Corps is applying a predictive analysis strategy that will support continuous process improvement (CPI) across the full range of actions required 

to maintain and sustain ground equipment. Recent analyses results indicate that 

there is an inherent ROI which indicates statistical probabilities of outcomes based 

on available data. 

The application of Model Based engineering and the use of model based systems 

engineering will have an impact on the effectiveness and efficiency of the DOD enterprise. 
148 

Ms. BORDALLO. What percentage of reset dollars do you expect to allocate to organic depots? How much of that workload is core? 

General SPENCER. Approximately 39 percent of the Air Force’s Fiscal Year (FY) 

15 Overseas Contingency Operations (OCO) request for Weapon System Sustainment (WSS) funding is planned for work at organic depots. In addition, approximately 23 percent of the Air Force’s FY15 Flying Hour Program (FHP) OCO submission request is projected to pay for Depot Level Reparables using OCO dollars. Since 

the Air Force does not have a final approved or funded FY15 OCO position, these 

numbers may change. 

If the current submission is funded, 30 percent of the total WSS and FHP OCO 

requests would fund work used to sustain a core requirement. 

Ms. BORDALLO. What percentage of depot maintenance requirement is funded in 

FY15? 

General SPENCER. The Fiscal Year 2015 President’s Budget baseline funds Total 

Force Weapon System Sustainment (WSS) for depot maintenance activities at approximately 70 percent without Overseas Contingency Operations (OCO) funding. 

The Air Force will likely request additional OCO funding, which would improve the 

total force WSS position to over 80 percent. This includes depot maintenance activities in depot purchased equipment maintenance and contractor logistics support. 

Ms. BORDALLO. In calculating core, the military services have increasingly placed 

an emphasis on minimum capabilities; however, the statute also requires efficient 

operations. Under the FY15 budget, should we assume that each of the services’ organic primary maintenance depots and shipyards have been workloaded and funded 

at efficient levels before workload is planned for the private sector? 

General SPENCER. Yes, for the Air Force under the fiscal year 2015 (FY15) budget, 

our depots are work-loaded and funded to ensure effective and efficient operations. 

The Air Force considers the retention of a strong and viable industrial baseline critical to our ability to successfully complete the Air Force mission. In the Department 

of Defense (DOD) core process, the Air Force identifies required core capabilities and 

also allocates the workloads necessary to sustain effectively the core capabilities and 

efficient depot operation within public sector facilities. Specifically, the Air Force 

has issued policy to ensure the identification and establishment of sufficient organic 

core depot level capability on current and future weapon systems. 

But the greatest challenge facing the Air Force depots is budget uncertainty. The 

uncertainty drives risk in planning for the Air Force depot customers due to schedule and availability of assets. The budget uncertainty does not allow the depots to 

size to the workload early in the planning process, resulting in staffing uncertainty, 

impacting workforce stability, lowering workforce morale, and causing unnecessary 

production variance, all of which drives less efficiency and effectiveness at the depots. The budget uncertainty impacts all levels of suppliers supporting the depots’ 

workload, since we cannot provide them a firm forecast. Many of the suppliers are 

small businesses, and the inability of the Air Force to provide them with a firm demand forecast increases inefficiency and drives longer delivery times of material in 

support of depot production. All of these challenges will only be exacerbated if sequestration returns in FY16. 

Ms. BORDALLO. In light of section 832 of the FY12 NDAA (Public Law 112–81), 

regarding the assessment, management, and control of O&S costs for major weapon 

systems: 

What predictive analysis and modeling processes have been the most effective at 

weapon systems optimization across the enterprise? Are there specific examples of 

successes or best practices that might be cited? 

General SPENCER. We have been doing predictive modeling for operations and 

sustainment (O&S), primarily peacetime costs, since 2005. We developed cost estimating relationships (CERs) that were suitable for estimating these costs with system concept information and very generic support concepts. We have made a number of improvements to our methodology, including: 

—Developing growth rates with causal factors to account for sustainment cost 

growth over time; 

—Including costs to upgrade and modify the aircraft; 

—With the advent of performance based logistics, accounting for more complex 

sustainment strategies and evaluate those impacts; and 

—Developing and demonstrating predictive models for cost and system availability for fielded systems with more detailed information to support the ongoing improvement in cost and performance. 

Based on the further interest over the last few years to improve product support 

we are developing methodology that accounts for more variables to directly evaluate 

impacts of system/component reliability, design improvements for sustainability, 

and product support strategies. This will directly support the new requirements in 
149 

the law, but bear a higher cost in resources to develop, validate, and execute the 

methodology. 

Developing cost estimates from analogous historical actual cost data is the most 

effective approach to produce realistic estimates and identify cost drivers for improvement. Life Cycle Management Control (LCMC) demonstrated this approach on 

the E–4B program using actual costs from the Air Force Total Ownership Cost 

Database and program subject matter experts to predict future costs and identify 

cost reduction opportunities. Similar methodology has been developed and applied 

for multiple studies on new requirements for tankers, trainers, bombers, remotely 

piloted aircraft (RPA), and other systems over the last eight years. In the last two 

years, we integrated trade space analysis into that updated cost methodology allowing us to generate cost capability metrics that now inform requirements and program decisions. Air Force Materiel Command (AFMC) has completed six pilot studies and is developing guidance and training to promulgate that trade space analysis 

capability. 

Ms. BORDALLO. How are modeling and simulation results comparing to actual performance once the decisions have been implemented? Although some savings may 

take time to materialize, are there indications of ROI are they achieving? 

General SPENCER. Due to the 15 year or longer long lead time between when the 

development planning studies such as analyses of alternatives are completed and 

O&S activities are conducted, we have not been able to verify the impact of the new 

methodology yet. However, for studies conducted on programs in sustainment, we 

have received positive feedback on the utility and results. These results are being 

captured in new reporting requirements. Return on investment ROI calculations will 

be possible in the future since O&S costs are being included in the Selected Acquisition Reports SAR and other reports form the program offices. 

Ms. BORDALLO. In accordance with the NDAA section 832, how should DOD be 

using predictive analysis and modeling and simulation to understand the real impact of the DOD 5000.2 (http://www.acq.osd.mil/ie/bei/pm/ref-library/dodi/p50002r. 

pdf) on the effectiveness and efficiency of the DOD enterprise? 

General SPENCER. The Air Force defers on this part of the question to the Office 

of the Secretary of Defense Cost Assessment and Program Evaluation. 

QUESTIONS SUBMITTED BY MR. BISHOP 

Mr. BISHOP. The Navy’s proposal to terminate the Tactical Tomahawk program 

beginning in Fiscal Year 2016 has the potential to decimate the defense industrial 

base that supports this weapons system, and the highly-specialized small turbine 

engine manufacturing capability in particular. Without sustainment funding to support the industrial base, there are doubts that it will be available to support the 

Navy’s planned rectification of older Block IV Missiles projected for FY 2019. What 

does the Navy plan to do to ensure that the industrial base will be viable to support 

the recertification of older Block IV Missiles given the lack of program funding in 

FY16 through FY19? 

Admiral FERGUSON. The industrial base is estimated to remain active through 

FY17 delivering missiles ordered in FY15. Industrial activity will be extended past 

FY17 as a result of rotatable spares buys in FY16. Additionally, there is substantial 

non-recurring engineering investment requiring Raytheon Missile Systems and vendor base contributions for recertification stand-up and Tactical Tomahawk modernization. These investments total more than $642.2M throughout the Future 

Years Defense Program. 

Æ