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78–486 PDF 2002

S. HRG. 107–536

MILITARY CONSTRUCTION APPROPRIATIONS FOR

FISCAL YEAR 2003

HEARINGS

BEFORE A

SUBCOMMITTEE OF THE

COMMITTEE ON APPROPRIATIONS

UNITED STATES SENATE

ONE HUNDRED SEVENTH CONGRESS

SECOND SESSION

ON

H.R. 5011/S. 2709

AN ACT MAKING APPROPRIATIONS FOR MILITARY CONSTRUCTION FOR

THE DEPARTMENT OF DEFENSE FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2003, AND FOR OTHER PURPOSES

Printed for the use of the Committee on Appropriations

(

Available via the World Wide Web: http://www.access.gpo.gov/congress/senate
(II)

COMMITTEE ON APPROPRIATIONS

ROBERT C. BYRD, West Virginia, Chairman

DANIEL K. INOUYE, Hawaii

ERNEST F. HOLLINGS, South Carolina

PATRICK J. LEAHY, Vermont

TOM HARKIN, Iowa

BARBARA A. MIKULSKI, Maryland

HARRY REID, Nevada

HERB KOHL, Wisconsin

PATTY MURRAY, Washington

BYRON L. DORGAN, North Dakota

DIANNE FEINSTEIN, California

RICHARD J. DURBIN, Illinois

TIM JOHNSON, South Dakota

MARY L. LANDRIEU, Louisiana

JACK REED, Rhode Island

TED STEVENS, Alaska

THAD COCHRAN, Mississippi

ARLEN SPECTER, Pennsylvania

PETE V. DOMENICI, New Mexico

CHRISTOPHER S. BOND, Missouri

MITCH MCCONNELL, Kentucky

CONRAD BURNS, Montana

RICHARD C. SHELBY, Alabama

JUDD GREGG, New Hampshire

ROBERT F. BENNETT, Utah

BEN NIGHTHORSE CAMPBELL, Colorado

LARRY CRAIG, Idaho

KAY BAILEY HUTCHISON, Texas

MIKE DEWINE, Ohio

TERRENCE E. SAUVAIN, Staff Director

CHARLES KIEFFER, Deputy Staff Director

STEVEN J. CORTESE, Minority Staff Director

LISA SUTHERLAND, Minority Deputy Staff Director

SUBCOMMITTEE ON MILITARY CONSTRUCTION

DIANNE FEINSTEIN, California, Chairman

DANIEL K. INOUYE, Hawaii

TIM JOHNSON, South Dakota

MARY L. LANDRIEU, Louisiana

HARRY REID, Nevada

ROBERT C. BYRD, West Virginia

(ex officio)

KAY BAILEY HUTCHISON, Texas

CONRAD BURNS, Montana

LARRY CRAIG, Idaho

MIKE DEWINE, Ohio

TED STEVENS, Alaska

(ex officio)

Professional Staff

CHRISTINA EVANS

B.G. WRIGHT

SID ASHWORTH (Minority)

Administrative Support

ANGELA LEE

ALYCIA FARRELL (Minority)
(III)

CONTENTS

TUESDAY, MARCH 5, 2002

Page

Department of Defense:

Office of the Secretary ...................................................................................... 1

Defense agencies:

Special Operations Command .................................................................. 35

TRICARE Management Activity .............................................................. 35

Military Community and Family Policy .................................................. 35

Defense Logistics Operations ................................................................... 35

Department of the Army .................................................................................. 57

TUESDAY, MARCH 19, 2002

Department of Defense:

Department of the Navy .................................................................................. 83

Department of the Air Force ........................................................................... 109

(1)

MILITARY CONSTRUCTION APPROPRIATIONS

FOR FISCAL YEAR 2003

TUESDAY, MARCH 5, 2002

U.S. SENATE, SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS, Washington, DC.

The subcommittee met at 2:30 p.m., in room SD–138, Dirksen

Senate Office Building, Hon. Dianne Feinstein (chairman) presiding.

Present: Senators Feinstein, Hutchison, Stevens, and Craig.

DEPARTMENT OF DEFENSE

OFFICE OF THE SECRETARY

STATEMENT OF HON. DOV ZAKHEIM, UNDER SECRETARY OF DEFENSE

(COMPTROLLER)

OPENING STATEMENT OF SENATOR DIANNE FEINSTEIN

Senator FEINSTEIN. I know Senator Hutchison is on her way, but

in the interest of time and not to keep everyone waiting, I think

we will begin. I would like to call to order this hearing of the Subcommittee on Military Construction to review the President’s fiscal

year 2003 military construction budget request. Secretary Zakheim,

Secretary DuBois, I am very pleased to welcome you to the subcommittee again, and we look forward to your testimony, and I

thank you for all you have done.

We have an ambitious schedule, so what I would like to do is finish my remarks, then hear from the Ranking Member her remarks,

and then ask all of the witnesses if they would submit their prepared statements for the record and try to summarize their comments very briefly so that we might move this along.

Secretary Zakheim, the President’s 2003 MILCON budget is slightly less than $9 billion. That is a 14-percent cut, or decrease

from last years’ MILCON bill, and it is 10-percent decrease from

what the President requested last year. It is fair to say, I think,

that this budget request has raised the concern of many members

in Congress, and particularly given the $48 billion increase in the

overall budget request I feel that we should as nearly as possible

adhere to the President’s request.

I am also aware that where investment in military construction

is needed and necessary, this committee wants to provide it, so the

real question is whether this can be done within these budget constraints, and I believe it is really up to you, both Secretaries, as
2

well as the commanders in the field and in Washington, that if you

feel this budget does not meet your needs, that you so state, or as

the saying goes, forever after hold your peace, because I do not

think we can play games with this budget in the sense of, well, we

can cut MILCON but the Congress is going to put it all back again.

I do not believe that is going to happen this year, so I think if

there are shortfalls, if there are shortcomings, if there are real

problems for the men and women in our Armed Services, not only

abroad but also in this country, that it is really up to the commanders to say so and really up to you to let us know, both the

Ranking Member and myself, or else you may end up getting just

what has been requested, and I want to make that really very

clear.

Senator Tim Johnson requested a statment be put in the record.

[The statement follows:]

PREPARED STATEMENT OF SENATOR TIM JOHNSON

Madame Chairwoman, I’d like to thank you and Ranking Member Hutchison for

holding today’s hearing. I appreciate your continued leadership on the subcommittee

and your commitment to maintaining the strength of our military through thoughtful investments in our defense infrastructure.

I’d also like to thanks today’s witnesses for coming before the subcommittee and

to share with us their knowledge and expertise. We are grateful for your service to

our nation.

Although military construction appropriations do not go to fund the latest fighter

aircraft or battleships, it would be a mistake to think that the work of this subcommittee is any less important to the defense of our nation. In fact, the ultimate

success of Operation Enduring Freedom—the ongoing fight against global terrorism—will be due in large measure to the funding contained in the Military Construction Appropriations Bill.

The funding in this bill will construct and maintain our military facilities around

the world. It will build new, state-of-the-art training facilities. It will upkeep of the

runways our Air Force uses to fly missions against Al Qaeda. It will create new

medical clinics to care for sick and injured service members. And it will maintain

facilities where our high-tech war-fighting equipment is kept in peak condition to

be used by our soldiers, sailors, airmen, and marines.

These are just a few examples of the projects that will be funded by the Military

Construction Appropriations Bill. Projects that will provide the foundation for ensuring we continue to field the best-equipped, best-trained military in the world.

Madame Chairwoman, as you well know, all of the best weapons and all the best

facilities in the world will be rendered useless if our military personnel and their

families are not afforded a good quality of life. That is why this subcommittee has

placed such a high priority on addressing the issue of military housing. I am pleased

that we have made some progress toward ensuring quality housing for all of our

military personnel and their families. But more needs to be done. In fact, according

to the Department of Defense, 20 percent of all service members on U.S. military

bases live in inadequate housing.

The President’s budget request includes a very modest increase for family housing, I am hopeful we can do more because the issue of quality housing goes to the

heart of military readiness. We should not underestimate what poor housing can do

to the morale of our military families. The stress on morale not only affects the preparedness of our military units, but discourages some of our most able personnel

from re-enlisting, and makes recruitment of the best and brightest even more difficult. As you know, South Dakota is home to one active duty installation, Ellsworth

Air Force Base. As a Lead Wing for the Aerospace Expeditionary Force, the 28th

Bomb Wing at Ellsworth Air Force Base has played a leading role in the war in

Afghanistan. In fact, the capabilities of the B–1 bombers flying out of Ellsworth is

one of the reasons the war has been so successful. I am very proud of the men and

women who are serving at Ellsworth. In my conversations with them, I have heard

that an upgrade in facilities, especially in housing, is essential to their quality of

life. This highlights the important work of this subcommittee. If we are going to recruit and retain quality people for our military, it is necessary for us to provide ade-
3

quate funding to all aspects of the military, not just to the weapons programs. I look

forward to working with my colleagues to address this important matter.

Since we are privileged to be joined by representatives from the Army National

Guard, I would also like to take this opportunity to say a word about the increasingly important role the National Guard plays in defending our nation. Most South

Dakotans know at least one of the 4,500 current members of the South Dakota

Guard and Reserves, or the thousands of former Guardsmen and Reservists. South

Dakota’s Guard and Reserve units consistently rank in the highest percentile of

readiness and quality of its recruits. But keeping and recruiting the best of the best

in the South Dakota National Guard and Reserves is becoming more of a challenge

as our military’s operations tempo has remained high, while the number of active

duty military forces has decreased. This tempo places significant pressure on the

members of the reserve component, as well as the buildings and other support systems meant to sustain them.

Once again, I would like to thank the witnesses for coming before the subcommittee to share with us their expertise. I look forward to working with you, Madame Chairwoman, and the rest of my colleagues as we move forward with the fiscal year 2003 Military Construction Appropriations Bill.

Senator FEINSTEIN. So with that—and I do not see the Ranking

Member—Mr. Secretary, why don’t we proceed with your comments

and your statement.

FISCAL YEAR 2003 BUDGET REQUEST

Mr. ZAKHEIM. Thank you, Madam Chairwoman. I am certainly

honored to be back here again to present the military construction

component of the President’s fiscal year 2003 DOD budget request,

and I might add that if, indeed, our wishes are met and we get

what we ask for, I would be delighted. The President’s budget request advances his commitment to win the war on terrorism, to

take the best care of our military people and their families, and to

transform America’s defense posture, our forces, our capabilities,

our infrastructure to enable us to counter 21st Century threats decisively.

The request supports the new defense strategy and recommendations from Secretary Rumsfeld’s 2001 quadrennial defense review

and his other strategic assessments. The budget includes strong

funding both for current demands, most notably the ongoing war

on terrorism, and for investments for the future. It supports the

President’s defense commitment not only through the increased

total funding, but also, and most important, through the wise allocation of that funding.

The fiscal year 2003 military construction budget furthers the

President’s defense aims with a balanced program to improve the

quality of life for our military through better working and living

conditions. This budget will enhance our sustainment and modernization of existing facilities. It will fund critical new construction. It will replace facilities that are no longer economical to repair. It will address environmental compliance requirements; and

it will continue caretaker efforts at closed bases.

The request for military construction and family housing totals,

as you have already noted, about $9 billion, and funds over 300

construction projects at more than 185 locations. It is true that the

request is about $1 billion lower than last year’s request, but in no

way does that imply any easing of our commitment to revitalizing

DOD’s infrastructure. The $9 billion total is the second largest request in the past 6 years. In addition, we have added $1.6 billion

to the 2003 funding that had been anticipated in the President’s
4

budget request for 2002. In other words, a year ago we anticipated

$1.6 billion less in military construction funding for this year than

we actually asked for. I should add that complementing the $9 billion request is increased funding for sustainment restoration and modernization, or

SRM, within the operations and maintenance title. Fiscal year

2003 funding for SRM totals $6.2 billion, which is $500 million increase over last year’s request, and this total includes $5.6 billion

specifically for sustainment. Although we had to make difficult

choices because of escalating demands for the war on terrorism, especially within the operations and maintenance title, we were able

to fund 93 percent of the Services’ maintenance requirements. That

is an increase over the 89 percent provided in last year’s budget,

and a significantly higher level than what was budgeted in the previous several years, for example in 2000, when the Department met

only 78 percent of the Services’ facilities maintenance requirements.

Our budget includes $225 million more than requested last year

for military family housing construction and privatization. That

keeps us on track to meet Secretary Rumsfeld’s goal of ensuring

adequate housing for all military personnel and their families by

2007, which is 3 years earlier than was originally planned.

We are also achieving greater benefit from our housing funds, because by joining forces with the private sector we will be leveraging

our investments to provide quality housing. In fiscal year 2003, we

are planning to obtain about 35,000 privatized housing units, nearly twice the number of privatized units obtained to date.

Based on the privatization projects awarded so far, we estimate

that the DOD investment was leveraged at about 8 to 1. In other

words, for every dollar we invest, we are getting $8 of value, so

that our 2003 funding request for privatization projects of $195

million to provide about 24,000 units, that translates with that 8

to 1 leverage to over $1.5 billion worth of quality privatized housing. This leveraged return must be factored into the overall value

of our military construction budget.

Our funding of new infrastructure is sufficient to construct new

facilities that are absolutely critical. Most notably, these are to support new weapons systems coming into the inventory. Our new construction funding and our emphasis on SRM reflects our multiyear

management plan to revitalize DOD facilities.

A critical component of our plan is the congressionally approved

2005 base realignment and closure, otherwise known as BRAC

round, which we hope will achieve the needed 20 to 25 percent reduction in DOD infrastructure. With a successful BRAC round, our

planned funding through 2007 will be sufficient to achieve, by that

time, Secretary Rumsfeld’s commitment to and goals for facilities

recapitalization.

Highlights of our request for military construction and family

housing include, with respect to quality of life, $1.2 billion for new

or improved barracks for unaccompanied military personnel. This

will fund 46 projects to construct or modernize barracks and to provide roughly 12,600 new or improved living spaces.

In addition, the budget will allow the Department to construct or

modernize 13 schools for dependents, seven physical fitness cen-
5

ters, two child development centers, and three community support

centers.

With respect to overseas construction, in keeping with congressional direction, new construction in overseas areas is being requested only where construction requirements are of high priority;

when they are absolutely essential to our overseas basing needs;

and after all burden-sharing opportunities have been explored and

found to be unworkable. I might mention in this regard, Madam

Chairwoman and Senator Hutchison, that we have just completed

negotiations with the Republic of Korea that will effectively, by

2005, have them contributing 50 cents on every dollar that is

spent.

That is a significant increase from the past, and it was our

goal—and, frankly, we have received a lot of help from you and

other people on the Hill. It is our goal to achieve a minimum 50-

percent standard with every country in which we are based. The

2003 program of $847 million for projects overseas therefore meets

the criteria I have just laid out.

A word about chemical demilitarization. Sustaining our steady

progress, the 2003 budget includes $168 million for the construction of chemical demilitarization facilities, and reflects change as a

result of our review of the program’s funding and scheduling.

The NATO security investment program, NSIP: that request totals about $168 million. It is the minimum essential U.S. contribution for NATO’s efforts, and is needed to support both our strategic

security and our economic interest in the European theater.

Let me return to Family housing, which I have already mentioned briefly. This year our request for budget authority for fiscal

2003 totals about $4.2 billion, which is up from the $4 billion requested a year ago. The Department’s 2003 family housing inventory will include an estimated $250,000 Government-owned units,

and 29,500 leased units worldwide. Our operation and maintenance

budget of $2.9 billion will ensure that houses in our inventory in

an adequate condition for occupancy by our military families. We

are requesting $1.3 billion to build, replace, or improve an additional 7,200 family housing units.

So in conclusion—I know you want me to keep this short—I want

to thank you very much again for the opportunity to describe our

plans both to sustain and revitalize DOD’s facilities. This budget

will enhance the quality of life for our service members and their

families. It will strongly support current requirements and missions, and it will enable the long-term streamlining and recapitalization of DOD facilities.

PREPARED STATEMENT

Again, we stand by this request. If you were to grant it to us,

as you said, Madam Chairwoman, we would be delighted. We indeed urge your approval of that request. The Department and I are

ready to provide whatever further details you may need to make

these important decisions.

Thank you very much.

[The statement follows:]
6

PREPARED STATEMENT OF DR. DOV S. ZAKHEIM

Madam Chairwoman, Senator Hutchison, members of the committee, I am honored to present the Military Construction component of President Bush’s fiscal year

2003 Department of Defense (DOD) budget request.

The President’s DOD request advances his commitment to win the war on terrorism; to take the best care of our military people and their families; and to transform America’s defense posture—our forces, capabilities, and infrastructure—to enable us to counter 21st century threats decisively. The request supports the new defense strategy and recommendations from Secretary Rumsfeld’s 2001 Quadrennial

Defense Review (QDR) and his other strategic assessments. The budget includes

strong funding both for current demands—most notably the war on terrorism—and

for investments for the future. The budget supports the President’s defense commitment not only through increased total funding, but also and most important,

through the wise allocation of that funding.

The fiscal year 2003 Military Construction budget furthers the President’s defense

aims with a balanced program to improve the quality of life for our military through

better working and living conditions. This budget will enhance our sustainment and

modernization of existing facilities, fund critical new construction, replace facilities

that are no longer economical to repair, address environmental compliance requirements, and continue caretaker efforts at closed bases.

FUNDING OVERVIEW

The President’s request for Military Construction and Family Housing totals $9.0

billion and funds over 300 construction projects at more than 185 locations. Although this request is $1 billion lower than last year’s fiscal year 2002 request, in

no way does it imply any easing of our commitment to revitalizing DOD infrastructure. The $9 billion total is the second largest request in the past 6 years. Moreover,

we added $1.6 billion to the fiscal year 2003 funding that had been anticipated in

the President’s budget request for fiscal year 2002. This budget clearly supports our

critical requirements and missions and actually increases funding for sustainment

and other key functions.

I should add that complementing this $9 billion request is increased funding for

Sustainment, Restoration, and Modernization (SRM) within the Operation and

Maintenance (O&M) title. Fiscal year 2003 funding for SRM totals $6.2 billion—an

$500 million increase over last year’s request. This total includes $5.6 billion for

sustainment. Although we had to make difficult choices because of the escalating

demands from the war on terrorism, especially within the O&M title, we were able

to fund 93 percent of the Military Services’ maintenance requirements. That is an

increase over the 89 percent provided for in last year’s budget and represents a significantly higher level than what was budgeted in the previous several years, such

as in fiscal year 2000 when the Department met only 78 percent of the Services’

facilities maintenance requirements.

Our budget includes $225 million more than requested last year for military family housing construction and privatization. This keeps us on track to meet Secretary

Rumsfeld’s goal of ensuring adequate housing for all military personnel and their

families by 2007—3 years earlier than originally planned.

Moreover, we are achieving greater benefit from our housing funds because—by

joining forces with the private sector, we will be leveraging our investments to provide quality housing. In fiscal year 2003, we are planning to obtain about 35,000

privatized housing units—nearly twice the number of privatized units obtained to

date.

Our funding of new infrastructure is sufficient to construct new facilities that are

absolutely critical, most notably to support new weapon systems coming into the inventory. Our new construction funding—and our emphasis on SRM—reflects our

multiyear management plan to revitalize DOD facilities.

A critical component of our plan is the congressionally approved 2005 Base Realignment and Closure (BRAC) round, which we hope will achieve a needed 20–25

percent reduction in DOD infrastructure. With a successful BRAC round, our

planned funding through fiscal year 2007 will be sufficient to achieve—by that

date—Secretary Rumsfeld’s strong goals for facilities recapitalization.

MILITARY CONSTRUCTION

Following are the key elements of our $4.8 billion fiscal year 2003 request for

Military Construction:

Active Forces and Defense-Wide.—The $4.0 billion budgeted for Active Forces and

Defense-Wide programs is targeted towards improving readiness, quality-of-life, and
7

DOD work places; restoring the most seriously degraded facilities; and providing facilities to support new weapons systems. The request includes $1.2 billion for barracks projects; $1.0 billion for operational and training facilities; $436 million for

maintenance and production facilities; $192 million for community facilities; $147

million for medical facilities; $134 million for utility facilities; $112 million for administrative facilities; $76 million for supply facilities; and $33 million for research

and development facilities.

Guard and Reserve Facilities.—The $297 million requested for the Reserve Components is balanced both to provide the necessary facilities to support current and

new missions and to replace aging facilities that are no longer economical to repair.

It is true that the fiscal year 2003 request is $646 million less than the fiscal year

2002 enacted level and $318 million lower than the Department’s fiscal year 2002

request. Nevertheless, the fiscal year 2003 request is higher than requests prior to

fiscal year 2002.

The fiscal year 2003 program includes 37 major construction projects as well as

planning and design work and minor construction. Most projects are training centers, maintenance facilities, and operational facilities in support of the Reserve

Components’ mission.

Quality-of-Life.—A significant portion of the military construction program—$1.2

billion—will provide for new or improved barracks for unaccompanied military personnel. Our budget will fund 46 projects to construct or modernize barracks and to

provide 12,643 new or improved living spaces. Specifically, the Army, Navy, and Air

Force are continuing to build to the ‘‘1∂1’’ design (one soldier to a room with a

shared bathroom) for personnel permanently assigned to a base. The Marine Corps

is building to the ‘‘2∂0’’ design (2 E1–E3s to a room, each room with its own bathroom) in an effort to improve living conditions of Marines sooner than if they followed the 1∂1 design standard. In addition, the fiscal year 2003 program will allow

the Department to construct or modernize 13 schools for dependents, 7 physical fitness centers, 2 child development centers, and 3 community support centers.

Overseas Construction.—In keeping with congressional direction, new construction

in overseas areas is being requested only where construction requirements are of

high priority, when absolutely essential to U.S. overseas basing needs, and only

after all burden-sharing opportunities have been explored and found to be unworkable. The fiscal year 2003 program of $847 million for projects in overseas areas

meets these criteria. Of the $847 million, $181 million is for the Republic of Korea,

$246 million for Germany, $131 million for Italy, $143 million for other European

sites, and $146 million for various locations overseas. I should note that we have

negotiated a burden-sharing agreement with the Republic of Korea and, for the first

time, expect the Korean share to reach 50 percent during its term.

Medical Projects.—Consistent with the Department’s emphasis on quality-of-life

improvements and readiness, the fiscal year 2003 budget reflects the high priority

it places on health care. The budget requests $147 million for 5 medical projects,

including $53 million for the fourth phase of a $133 million replacement hospital

at Ft. Wainwright, Alaska; $3 million to replace a clinic at Hickam AFB, Hawaii;

$40 million for the replacement of a hospital at Spangdahlem, Germany; and $41

million to replace a medical and dental facility at Naples, Italy. It also includes $10

million to pay a contractor claim on the recently completed hospital at Elmendorf

Air Force Base, Alaska.

Chemical Demilitarization Construction.—The Department continues to make

steady progress in its chemical demilitarization efforts. To that end, the fiscal year

2003 budget includes $168 million for the construction of chemical demilitarization

facilities. It reflects the completion of an overall review of the program, and—consistent with the Department’s emphasis on realistic costing—we made funding and

schedule changes that mirror the Cost and Analysis Improvement Group’s (CAIG)

estimates and timelines. The CAIG estimate reflects the ‘‘end of operations’’ for all

sites (except Pueblo and Blue Grass) to be slipped from fiscal year 2007 to fiscal

year 2011; no projected end of operations has been made for the Pueblo and Blue

Grass facilities. This revised schedule will require the United States to request a

5-year extension (to 2012) to the deadline in the Chemical Munitions Disposal Treaty.

Two chemical demilitarization facilities are now in operation. The prototype incineration facility on Johnston Atoll in the Pacific Ocean is fully operational and has

destroyed 100 percent of the original chemical agent stockpile stored there. In addition, the Chemical Agent Disposal Facility in Tooele, Utah began operation in August 1996 and has destroyed over 39 percent of the original chemical agent stockpile

stored at that site. We have completed construction of the Chemical Agent Disposal

Facilities in Anniston, Alabama and Umatilla, Oregon. In January 1999, the Army

issued a full Notice to Proceed to Raytheon Demilitarization Company to begin con-
8

struction for the Chemical Agent Disposal Facility in Pine Bluff, Arkansas. Construction of the Pine Bluff facility is 74 percent completed.

The Army has selected alternative technologies to be used in lieu of the baseline

incineration process at the two bulk-only chemical agent storage sites at Aberdeen

Proving Ground, Maryland and Newport, Indiana. Systems contractors were selected for the Aberdeen facility in October 1998, and for the Newport facility in February 1999. Construction of the Aberdeen facility is 47 percent completed, while the

Newport facility is 24 percent completed. Additional technologies are being evaluated for the remaining two chemical demilitarization sites: Pueblo, Colorado and

Blue Grass, Kentucky. Environment and permitting efforts are ongoing, and technology decisions are expected during fiscal year 2002 for both locations.

Energy Programs.—This Administration is committed to energy conservation. Re- flecting that commitment, the budget includes approximately $50 million in fiscal

year 2003 for projects that will result in energy savings and support long-standing

goals to reduce energy demand. Last year the Congress appropriated $26.7 million.

Minor Construction/Planning and Design.—The request contains $89 million in

fiscal year 2003 for minor construction, alterations, and modifications to existing facilities. These funds are essential to meet unforeseen construction requirements that

can impair the health, safety, and readiness of our forces. In addition, we are requesting $334 million for planning and design. These funds are urgently needed to

complete the design of fiscal year 2004 projects and to initiate design of fiscal year

2005 projects. We seek your support for this request so we can proceed with these

construction requirements.

BASE REALIGNMENT AND CLOSURE (BRAC)

In the past, the BRAC process has been a major tool for reducing our domestic

base structure. Between 1988 and 1995, four BRAC Commissions proposed the closure or realignment of 152 major installations and 235 smaller ones. Implementation of the last round of the four approved BRACs was completed on July 13, 2001.

Once all funding is complete, the Department will have invested about $22.2 billion

and realized savings of about $37.7 billion for total net savings of about $15.5 billion

over the implementation period from fiscal year 1990 to fiscal year 2001. Total annual savings after fiscal year 2002 are projected to be about $6 billion. For fiscal

year 2003, the BRAC request is $545.1 million—for environmental restoration and

caretaker costs for bases closed under these previous rounds. This funding will ensure that bases continue both to be cleaned efficiently and to meet environmental

standards to speed the transfer of property to redevelopment authorities.

The fiscal year 2003 budget assumes that the additional round of base closures

and realignment in 2005 will occur, as authorized in the fiscal year 2002 National

Defense Authorization Act. The Department hopes that this round will achieve at

least a 20–25 percent reduction in military infrastructure and savings of approximately $6.5 billion per year. Funds to begin implementation of the 2005 BRAC recommendations are currently programmed in fiscal year 2006.

NATO SECURITY INVESTMENT PROGRAM

The NATO Security Investment Program (NSIP) request totals $168.2 million in

fiscal year 2003. This is the U.S. share (approximately 24.7 percent) of the acquisition of NATO common use systems and equipment; construction, upgrade, and restoration of operational facilities; and other related programs and projects required

in support of agreed NATO strategic concepts and military strategy. We anticipate

recoupments of $11 million from previously financed U.S. projects, which will result

in a total fiscal year 2003 program of $179.2 million. This request is the minimum

essential U.S. contribution for NATO’s efforts. It will support both our strategic security and our economic interest in the European Theater.

FAMILY HOUSING

Budget authority for fiscal year 2003 Family Housing totals $4.2 billion—up from

$4.0 billion requested in fiscal year 2002. This budget will construct, improve, privatize, operate, maintain, and lease family housing units. It will enable the Department to continue the aggressive effort begun last year to eliminate inadequate housing by 2007, 3 years sooner than the previous goal.

Housing quality also will benefit from our proposed increases in the Basic Allowance for Housing (BAH). Through BAH increases, the fiscal year 2003 budget will

reduce out-of-pocket costs for personnel living off-base from 11.3 percent now to 7.5

percent in fiscal year 2003, and it projects funding to phase out these costs completely by 2005. Prior to fiscal year 2001, service members had to absorb 18.8 percent of these housing costs.
9

Family Housing Operations.—The Department’s fiscal year 2003 family housing

inventory will include an estimated 250,000 government-owned units and 29,500

leased units worldwide. The government-owned units average about 35 years in age.

These DOD-owned and leased units house approximately one-third of our military

families.

The family housing operation and maintenance budget funds a range of services

and expenses necessary to support the DOD-owned and leased housing units. For

example, the operation account funds items such as housing administration and

management, basic support services, referral services, furnishings, and utilities,

while the maintenance account funds routine maintenance and major repairs. In addition, the family housing leasing account provides housing at both domestic and

foreign locations when the local economy cannot provide adequate support and additional assets are needed to satisfy a housing shortfall. Our fiscal year 2003 operation and maintenance budget of $2.9 billion will ensure

that houses in our inventory are in adequate condition for occupancy by our military

families. The fiscal year 2003 request is $21 million higher than the amount Congress approved for fiscal year 2002 due primarily to the need to maintain an aging

housing inventory.

Family Housing Construction.—The major emphasis of the Family Housing Construction Program is to replace units that are uneconomical to repair or renovate

and to upgrade the remaining units. We are requesting $1.3 billion in fiscal year

2003 to build, replace, or improve 7,200 family housing units. This fiscal year 2003

request is $159 million higher than the amount enacted for fiscal year 2002, due

to the President’s initiative to improve housing for our troops and families.

Family Housing Privatization.—The fiscal year 1996 National Defense Authorization Act provided innovative authorities that enable the Department to partner with

the private sector to revitalize our housing inventory. By means of loan and rental

guarantees, direct loans and investments, differential lease payments, and the conveyance or leasing of land and facilities, the Department has been able to tap private sector expertise and capital to provide quality housing more quickly than would

be possible through traditional construction methods.

Using the funds Congress appropriated directly into the Family Housing Improvement Fund (FHIF) or funds for construction projects that were later transferred into

the FHIF, the Military Services have awarded fourteen privatization projects. Based

on the projects awarded so far, we estimate that the DOD investment was leveraged

at about eight to one. Our fiscal year 2003 funding request for privatization projects

is $195 million—to provide about 24,000 housing units. Applying that previous 8:1

leverage rate, with our $195 million investment we should be able to obtain over

$1.5 billion worth of quality privatized housing. This leveraged return should be

factored into the overall value of our military construction budget.

Highlights of our privatization initiatives:

—Fort Carson, Colorado.—At Fort Carson, the Army invested $10 million to provide a limited loan guarantee and is obtaining 1,823 revitalized housing units

and 840 new units. The return on the Army’s investment in this $229 million

project is 22:1 when compared to traditional construction approach. The Army

has also awarded a contract to privatize 5,912 housing units at Fort Hood,

Texas, and is finalizing two deals to privatize 3,982 units at Fort Lewis, Washington, and 3,170 units at Fort Meade, Maryland. The fiscal year 2003 budget

request includes $153.5 million to privatize 17,483 housing units at six Army

bases.

—South Texas/Everett, Washington.—The Navy entered into a 30-year limited

partnership with a private developer to provide 404 off-base units in the Corpus

Christi-Ingleside-Kingsville, Texas area. These are all new units that required

an investment of $9.5 million, less than a third of the $32 million project cost.

A similar partnership arrangement provided 185 new family housing units at

Naval Station Everett. The Navy invested $5.9 million in a $20 million limited

partnership project for a return on investment of slightly better than 3:1. Both

the south Texas and Everett, Washington projects have been completed. The

Navy has since awarded five more contracts to privatize a total of 5,994 units

at Everett (288 units), Kingsville (150 units), San Diego (3,248 units), New Orleans (935 units), and a third project in south Texas (661 units). The Marine

Corps’ first privatization project at Camp Pendleton, California (712 units) is

currently under construction. In fiscal year 2003, the Navy is requesting $33.4

million to privatize 1,978 housing units at the Naval Complex in Pearl Harbor,

Hawaii.

—Lackland, Texas.—The Air Force’s first family housing privatization project, at

Lackland AFB, will be completed in a few months. The Air Force employed a

combination of limited loan guarantee and small direct loan to finance a 420-
10

unit housing project worth $42 million. For its investment of $6.2 million in this

project, the Air Force realized a return of 8:1 when compared to traditional military construction approach. The Air Force has awarded three more projects—

Robins AFB, Georgia (670 units); Dyess AFB, Texas (402 units); and Elmendorf

AFB, Alaska (828 units). In the fiscal year 2003 budget, the Air Force has identified five projects to privatize 4,564 units, and is requesting $7.8 million. The

Air Force believes that four of the five projects will not require any up-front

funding due to expected leverage from the assets to be conveyed.

CONCLUSION

Thank you again for this opportunity to describe our plans to sustain and revitalize DOD facilities. This budget will enhance the quality of life of our service

members and their families, strongly support current requirements and missions,

and enable the needed long-term streamlining and recapitalization of DOD facilities.

I urge your approval of our request. The Department and I are ready to provide

whatever details you may need to make these important decisions.

Senator FEINSTEIN. Thanks very much, Mr. Secretary.

Secretary DuBois, before we hear from you I would like to acknowledge that we have been joined by some of our colleagues, the

Ranking Member of this committee, the Ranking Member of the

overall Appropriations Committee, and the distinguished Senator

from Idaho, and I would like to ask Senator Hutchison if she would

like to make her remarks at this time.

STATEMENT OF SENATOR KAY BAILEY HUTCHISON

Senator HUTCHISON. I would, and I thank you, Madam Chairman. I will be brief, but first let me say I am very pleased about

what you just reported regarding Korea, and that negotiation. I applaud you for that. I think it is the right thing to do, and I think

in light of the other necessary expenditures that we have right

now, that it is appropriate.

The only other thing that I would just note and ask that you address, and we can do it in questions, but that is in the area of European military construction. You have got over $1 billion in military construction projects in Europe. Of those, 168 million is NATO

infrastructure, including a new subregional base in Greece.

Your Spanish expenditures are in Rota, which I think is totally

appropriate. It is necessary for what we are doing now, but down

the line we are looking at yet another subregional headquarters of

NATO in Madrid, and my question is, are we asking our European

allies to do enough in light of our current needs for other places?

I think—I have looked at many of your other overseas expenditures. They meet the test of current necessities, and infrastructure

for refueling and those kinds of things, but I guess the big question

is, are we maybe in line to look for a little bit of a realignment with

Europe, in light of the burden we are carrying in the Middle East

and in the war on terrorism?

And then secondly, I would just say the lowering of the amount

being spent in our domestic bases, I understand that you are now

looking at a BRAC farther out, but I would like for you to address

the cost of having to beef up the bases that are going to be kept,

versus not spending for 3 years. In anticipation of a BRAC, could

we not continue to upgrade the housing and especially the medical

facilities where you have, I think, four medical facilities in the

U.S., and you have a huge upgrading of medical facilities in several

places overseas. I just wonder if we are doing enough to keep up
11

the domestic part of health care and housing and quality of life

issues with the really large cuts in the increases in spending for

domestic military construction.

With that, then, I will certainly ask questions, but those are the

points I would like to make.

Senator FEINSTEIN. Thank you very much, Senator Hutchison.

Senator Stevens, did you have a comment you would like to

make at this time, or any comments?

Senator STEVENS. Well, Madam Chairman, I want to be able to

ask some questions. I am not sure I am going to be able to stay,

but I do not have any opening comments.

Senator FEINSTEIN. Thank you very much.

Secretary DuBois, would you like to proceed?

STATEMENT OF HON. RAYMOND DuBOIS, DEPUTY UNDER SECRETARY

OF DEFENSE FOR INSTALLATIONS AND ENVIRONMENT

Mr. DUBOIS. Yes, ma’am. Thank you very much, again, to have

this opportunity to appear before you and your distinguished subcommittee. September 11, as we all know, changed this country,

perhaps changed it forever, but the imperative remains, that imperative to transform our military installations and to maintain

our commitment to our people in uniform with respect to improving

their quality of life.

Senator Hutchison, you are quite right, the quality of life initiatives must be focused on, and in addition to the basic allowance for

housing increases in this year’s budget, the medical treatment facilities, the MILCON increases, we have got to remember that

there are a series of investments in resources that are put against

the so-called facilities, housing sustainment, restoration, and modernization accounts, or program elements in this budget.

Now, the context of competing priorities, I think we always have

to remember that no matter whether it is this fiscal year or last,

where we had a greater request for MILCON, although, as Secretary Zakheim said, this year’s request is the second largest in 6

years, we have got to remember that there are competing priorities,

and those priorities shifted on September 11.

Now, we believe we have developed a feasible and fiscally responsible plan for getting our facilities on a continued path to recovery.

As I indicated, the basic allowance for housing to eliminate out-ofpocket cost by our service members is on a glide path to get to zero

by 2005. We are also increasing, as Secretary Zakheim said, our reliance upon the private sector both for access to existing quality

housing, but also through our military family housing privatization

efforts, and we want to thank the Congress for having extended our

housing privatization authority to 2012, although Secretary Rumsfeld’s goal is to achieve the reduction and elimination of all inadequate housing by 2007.

Having said that, we do have a goal of achieving privatization of

over 60,000 family housing units by the end of fiscal 2003. There

is a continuing commitment to our unaccompanied service men and

women. You touched a little bit upon Korea, where we have nearly

95 percent of all military personnel are unaccompanied. I did speak

with General Schwartz, our CINC there, just a couple of days ago

about the situation there. We are both very thankful, as is the Sec-
12

retary of Defense, for your continued focus on the construction

needs of our personnel in Korea.

On the overseas issue, Senator Hutchison, you mentioned Europe

in particular. Secretary Zakheim has testified to the land partnership program in Korea, wherein we are going to reduce our footprint from 41 installations to 25 or 26, a very substantial reduction. It is true also in Europe, and I spoke to General Ralston

about this just the other day. He is proposing a reduction in Europe. As you know, these kinds of programs require the State Department involvement, host country Nation involvement, but the

European Command is submitting to the chairman, and ultimately

to the Secretary, a footprints reduction and basing structure rationalization for Europe.

As you also know, I am sure, we have 25 percent of our military

personnel stationed overseas, and yet only 23 percent of our

MILCON budget goes to overseas, 77 percent in CONUS. It is also

even more skewed or unbalanced, as it were, with respect to military family housing, 79 percent in the United States, 21 percent

overseas.

Let me address briefly now the other critical question I think

that is before us this afternoon, and that is the reduction year over

year. As I indicated, and as Secretary Zakheim indicated, it is the

second largest request in 6 years, and I think it is important that

we look at total investments. As I indicated, you have got new footprint MILCON, you have got restoration and modernization military construction, but you also have restoration and modernization

that come out of the O&M account, granted, not in the authority

and purview of this subcommittee, but still focused on our infrastructure. You have got sustainment O&M dollars, not MILCON

dollars but sustainment dollars focused on our infrastructure and,

of course family housing construction and family housing maintenance.

If you take those program elements as a whole, and include all

four services and the defense agencies, you have a total budget

year over year with the reduction of about 3 percent. Now, granted,

the pure MILCON part of this is presidential budget year over year

10 percent, but if you look at the total investment portfolio focused

on quality of life, focused on infrastructure, it shows a 3 percent

reduction.

Now, the sustainment part of that total investment portfolio is

very important to focus on. It is in all accounts across the board

and all Services, except for the Navy, it is in excess of 90 percent.

In fact, the Air Force is nearly 100 percent, and the Marine Corps

is at 100 percent of sustainment. That is to say, taking care of

what we have now, a very important issue.

The recapitalization issue, which is probably somewhat arcane to

those of us who live outside of the beltway, but a very important

metric nonetheless to you and to us in the Pentagon. It is going up

year over year, and it is inescapable, and I say this with some concern, because sometimes it gets misunderstood.

It is inescapable that we do have, because you all authorized the

Secretary to do so, a BRAC in 2005. It is important to recognize

that just because BRAC sits out there, it does not dictate that we

invest in one installation today over another. It does, however,
13

mean that the Service Chiefs and the Service Secretaries making

tough decisions, tough priorities, funding competing priorities, will

invest, in MILCON terms, on mission-critical requirements.

Some mission-critical requirements are at certain installations

and not others. That is an inescapable fact. The recap rates do go

up, but it is important, as Secretary Zakheim reiterated, and as

Secretary Rumsfeld said in his testimony before your committee,

that the 67-year recap rates will be achieved by fiscal 2007.

I think the other issue that is important to understand is the

majority, 60 percent of all MILCON projects are for restoration and

modernization for mission-critical requirements. That is both

MILCON and O&M.

Now, BRAC. Certainly, last time that I sat in front of you it was

an issue that was highly charged. It remains highly charged. The

Secretary of Defense testified, and not with tongue in cheek, I

might add, but quite seriously, this is a painful process, but it is

a process that, with your authority, and the fact that it is in 2005,

we are going to take a comprehensive, and we are going to take a

very thorough and methodic and deliberate look at our entire real

estate asset portfolio, and I do want to say on his behalf, on behalf

of the Secretary of Defense, we do thank the Senate for supporting

him in his efforts to rationalize our infrastructure, our total infrastructure through this process, this needed process referred to as

BRAC.

Now, just for purposes of reemphasis, we have not deferred—we

have not deferred any projects in anticipation of BRAC. Our fiscal

year 2003 budget request reflects, as I indicated, the highest priorities identified by the Service Secretaries and the Service Chiefs to

support their missions as currently configured. We are just beginning to analyze the total DOD infrastructure from a BRAC point

of view. Specific construction projects in this fiscal year’s budget request are driven, as I said, by military necessity and mission-critical requirements.

One final point, if I might, and I address this because it has received a certain amount of press attention. Several committees of

the House and the Senate have now called a hearing specifically

to focus on the term and the issue called encroachment.

Twenty-six, 27 years ago, when Secretary Rumsfeld and I served

in the Pentagon, the word encroachment was not even in our lexicon. Maybe it should have been, because today we are facing in a

number of our test and training ranges and installations across the

country urban density, environmental encroachment, spectrum

competition, air space encroachment, issues which are now directly

impacting upon our ability to provide realistic combat training for

our troops.

This encroachment issue has emerged in the last couple of years,

certainly since Secretary Rumsfeld was sworn in, as a very serious

concern. We are addressing that concern. We do not have all the

answers yet. We are in the process of discussing this with folks on

the Hill, folks in the environmental community, folks in the Department of Interior, EPA, NOAA, those sister agencies in the executive branch which focus on the regulatory aspect of these statutes.

I am reminded that I believe this is the 30th anniversary of the

Clean Water Act and other acts, other statutes passed by the Con-
14

gress. Deputy Secretary Wolfowitz back in December set out specifically a cross-discipline, cross-service group in the Department of

Defense cochaired by myself and Paul Mayberry, the Deputy Under

Secretary for Readiness, to focus on this and try to come up with

some reasonable approaches, given the seriousness of the situation,

and we look forward to working with you. We absolutely, positively

must have your advice and counsel as to how to proceed in this regard.

In closing, I have spent the last 9 months having been in this

job as Deputy Under Secretary, and I visited over 30 major installations here and abroad, also a number of our premier, our crown

jewels of training and test ranges, several of which are in California and Texas and Alaska, as it turns out. We are committed in

that regard, and I remain committed to advise the Secretary as

best I can on how to improve and support healthy installations, facilities, and housing.

PREPARED STATEMENT

We have to remember that if we are going to transform the military, which remains, notwithstanding 9/11, reforming the way we

think about defense and reshaping the way we manage the Defense

Department is first and foremost still in Secretary Rumsfeld’s

mind, and he also, I think, appreciates the fact that part of that

transformation, an integral part of that transformation has to be

how we transform our platforms, our deployment platforms called

our installations.

Thank you very much.

[The statement follows:]

PREPARED STATEMENT OF RAYMOND F. DUBOIS, JR.

INTRODUCTION

Mr. Chairman and distinguished members of this Subcommittee, thank you for

the opportunity to discuss the Department of Defense’s fiscal year 2003 programs

supporting military installations and facilities and the Department’s environmental

management. The Department’s goal is to restore the readiness of our installations

and facilities—which are the foundation for military operations and deployments.

We are continuing to improve the management of our installations and housing to

ensure that they can fully support the men and women who live and work there

in the accomplishment of their mission.

To begin I would first like to recognize you and the Committee for the support

you continue to provide to the Department. In particular, we appreciate this committee’s strong support for the Secretary’s effort to rationalize our infrastructure

through a needed round of base realignment and closure. We are also grateful for

the Congress’ willingness to extend our housing privatization authority to 2012.

These actions support the key elements of the Department’s program to manage

military installations and facilities more efficiently.

Today, I will address the current state of our facility assets and the Department’s

revitalization plans; our sustainment, restoration and modernization programs; our

management initiatives; and our environmental progress.

REVITALIZING INSTALLATIONS

As Secretary Rumsfeld recently testified to Congress, ‘‘September 11 changed our

nation forever.’’ Our challenge today and in the future is to accomplish three difficult missions at once: to win the war on terrorism, to restore our military forces

through investments in procurement, people and modernization, and to transform

our forces to meet future demands.

Last year, the Secretary of Defense undertook a series of initiatives to transform

our installations and facilities into those required for a 21st Century military. Our

fiscal year 2003 budget, as well as our current future years defense program, sup-
15

ports that commitment. In the context of competing priorities resulting from the

events of September 11, we have developed a feasible and fiscally responsible plan

for getting our facilities on a path to recovery. Even after the events of September

11, we are continuing to transform our installations and maintain our commitment

to our people by improving their quality of life.

Installations’ Vision

Military installations and facilities are an integral component of readiness. Installations are the ‘‘platforms’’ from which our forces successfully deploy to execute their

diverse missions. However, they are also places where our people live, work and

train. The Department’s sustainment and restoration and modernization programs

must enhance military readiness while also providing in adequate quality of life an

adequate working environment and provide for appropriate military training.

Quality of life and quality of workplace are directly linked to the quality of our

infrastructure. Many surveys have shown that poor quality facilities and services

are a major source of dissatisfaction for families and services members alike. Our

aging and deteriorating infrastructure has a direct impact on retention.

To address these long standing infrastructure problems in an integrated fashion,

the Department is aggressively pursuing a number of approaches to benefit service

members and improve their quality of life. First, we will increase the basic allowance for housing to eliminate the out-of-pocket costs paid by service members for

private sector housing in the United States. The fiscal year 2003 budget request includes necessary funding to continue lowering service members’ out-of-pocket housing costs for those living off-base from 11.3 percent today to 7.5 percent in 2003.

By 2005, the typical member living off-base will have no out-of-pocket housing expenses.

Second, we will increase our reliance upon the private sector—higher allowances

will increase and enhance service member access to existing quality housing. Higher

allowances will also increase the income available to private sector developers, facilitating increases in the quantity and quality of privatized housing.

Finally, we will continue to fund military construction for housing where necessary. Our fiscal year 2003 budget requests about $227 million more for family

housing construction than last year. We have also maintained our significant investment in barracks modernization. The combination of increased allowances and continued use of privatization will permit more efficient use of our military construction

funding. Increased availability of quality private sector options will ease pressure

for on-base housing, reduce the need to maintain our current inventory, and allow

us to spend our sustainment funding more wisely.

The Defense Facilities Strategic Plan, published in August 2001, defines our facilities vision for the future—healthy, productive installations and facilities that are

available when and where needed with capabilities to support current and future

military requirements. At the same time, we must spend the taxpayer’s investment

wisely and transform the way we do business to reduce the total operational cost

of ownership of our installations and facilities.

We must right size and locate our installations and facilities based on military

requirements. The recently authorized base realignment and closure round in 2005

provides a key tool that will allow the Department to align operational forces with

the installations best suited to their 21st Century missions. Providing the right

quality installations and facilities also means we furnish quality living and working

environments that support the warfighters’ missions while enhancing quality of life

for our service members and their families.

Through providing the right resources and leveraging that funding, we will

achieve the right size and quality of our installations and facilities. We have developed analytical tools and metrics that allow us to more accurately forecast our requirements and measure our progress. Our tools, like the Facilities Sustainment

Model, which identifies facility sustainment requirements, and the Facilities Recapitalization Metric, which assesses the rate of modernization relative to the service

life of the facilities’ inventory, have matured, and we have several new tools under

development. For instance, we are integrating the Services’ real property inventory

databases to guide and monitor management decisions. Accomplishing these goals

will ensure that the needs of the warfighters and military families are met.

Current State of Facility Assets

In fiscal year 2000, 42 Major Commands of the military services collectively rated

69 percent of their nine facilities categories C–3 (have serious deficiencies) or C–

4 (do not support mission requirements) as reported in their Installations’ Readiness

Reports. At the end of fiscal year 2001, with 43 Major Commands now reporting,

this percentage is 68 percent.
16

1 Includes O&M as well as related military personnel, host nation, and working capital funds.

The first step to improve our readiness posture is to sustain what we own. It will

take some time to reach an acceptable state of readiness. We are committed to sustaining our facilities appropriately to avoid incurring substantial costs in later

years. In the fiscal year 2003 budget request, the Department funds 93 percent of

the requirement. The fiscal year 2003 recapitalization rate for our facilities has increased to about 150 years (121 if one factors in the potential 20 to 25 percent reduction that could be achieved from base realignment and closure). However, the

fiscal year 2003 military construction request is the second largest in the past 6

years. We plan to invest over $20 billion from fiscal years 2003 through 2007 to

achieve our goal of a 67-year recapitalization rate by the end of the Future Years

Defense Program.

For fiscal year 2003, we are requesting a total of $9 billion for military construction, family housing and environmental remediation on properties from the 1988 to

1995 base realignment and closure rounds. Consistent investment levels over time

will help us restore and maintain readiness, stabilize and reduce the average age

of our physical plant, reduce overhead costs, and maximize our return on investment. Last year, the Department modernized its treatment of our real property requirement. Our approach to sustainment (operations and maintenance-like 1 funds)

and restoration and modernization (both military construction and operations and

maintenance funds), underscore our focus on improving infrastructure management.

SUMMARY OF REQUEST

[President’s budget in billions of dollars]

Funding category

Fiscal year

2002 request 2003 request

New Footprint (MilCon) ............................................................................................................ 1.4 1.5

Restoration and Modernization (MilCon) ................................................................................. 3.8 2.5

Restoration and Modernization (O&M-like) ............................................................................. .8 .8

Sustainment (O&M-like) .......................................................................................................... 5.1 5.6

Family Housing Construction/Improvements ........................................................................... 1.1 1.3

Family Housing Maintenance .................................................................................................. 1.3 1.3

Total SRM, New Footprint, FH Const. & Maint. ......................................................... 13.5 13.0

Fully sustained, restored and modernized facilities are more cost effective in the

long term and result in more prudent use of scarce resources. It is more expensive

to allow facilities to deteriorate, which reduces service life and causes premature recapitalization requirements. Further, deteriorated facilities contribute to mission

interruptions.

SUSTAINMENT

The first principle of sound installation management is taking care of what you

own, and our fiscal year 2003 budget request supports that principle. Our fiscal year

2003 budget request of $5.6 billion increases sustainment funding to 93 percent of

the requirement, from 89 percent in last year’s budget. Full funding of sustainment

throughout the program is an appropriate investment that will avoid significant

costs in the future by stabilizing facility conditions and preventing further erosion.

The fiscal year 2003 budget request also includes $6.1 billion for Real Property

Services (RPS) which are must pay ‘‘open-the-door’’ costs generally performed by

contract. The RPS account includes purchase of utilities, lease payments, custodial

services, trash collection, snow removal, and grounds maintenance.

RECAPITALIZATION

The Department is requesting $3.3 billion for recapitalization in fiscal year 2003

(including both operations and maintenance and military construction funds) to restore and modernize our facilities. Recapitalization is important not only to restore

the readiness of poor facilities, but also to maintain the relevance of all facilities

to future missions of the Department. A consistent modernization program tied to

expected service life best accomplishes this. The Department stands by its goal of

achieving a recapitalization rate of 67 years. We currently plan to achieve this goal

by fiscal year 2007.
17

There may be concerns with the increased fiscal year 2003 recapitalization rate.

However, our fiscal year 2003 budget request represents a restructuring of our priorities to achieve a more fiscally responsible program with lower costs over the long

term. Sustaining facilities up front will reduce the need for costly restoration of facilities in the future, and we are requesting significant increases to our sustainment

budget to accomplish this. In addition, the majority of the military construction

budget projects (over 60 percent) are for restoration and modernization of mission

critical requirements.

COMPARISON OF MILITARY CONSTRUCTION AND FAMILY HOUSING REQUESTS

[President’s budget in millions of dollars]

Fiscal year

2002 request 2003 request

Military Construction ............................................................................................................... 5,210 4,054

NATO Security Investment Program ......................................................................................... 163 168

Base Realignment and Closure IV .......................................................................................... 532 545

Family Housing Construction ................................................................................................... 1,114 1,341

Family Housing Operations & Maint ....................................................................................... 2,940 2,877

Homeowners Assistance .......................................................................................................... 10 0

Family Housing Improvement Fund ......................................................................................... 2 2

Total ........................................................................................................................... 9,971 8,987

HOUSING

Military housing is a priority for the President and the Secretary, is an integral

part of the Administration’s Management Plan and is crucial to providing a decent

quality of life for our service members. We are investing $1.2 billion in the budget

request to construct or revitalize almost 14,000 barracks spaces for our unaccompanied service men and women to continue improvements in their quality of life.

The Services are making great progress toward meeting, or have already met, the

Department’s goal for eliminating gang latrine conditions for permanent party unaccompanied service members.

Our request of $4.2 billion for military family housing in fiscal year 2003 will operate and maintain the Department’s family housing and enable us to eliminate

most substandard housing by 2007—3 years earlier than previously planned. Our

family housing construction budget request of $1.3 billion, up from the $1.1 billion

requested in fiscal year 2002, supports traditional approaches to military family

housing as well as the Department’s plan to renovate, replace, or privatize over

35,000 housing units. We plan to have privatized a cumulative total of over 60,000

units by the end of fiscal year 2003. The Department is also requesting $2.9 billion

for operating and maintaining almost 280,000 family housing units world-wide,

(251,000 government-owned and another 29,000 leased), approximately 60 percent

of the government-owned units are considered inadequate.

The Department’s use of housing privatization, aided by Congress’ extension of

our authorities to 2012, continues to leverage our funding and has allowed us, to

date, to privatize over 17,500 housing units. Our most recent projects have been at

Fort Hood, Texas, where Army personnel have been deployed to support Operation

Enduring Freedom and Naval Complex South Texas, which includes Naval Air Station Corpus Christi and Naval Station Ingleside in Texas.

Privatizing military housing is a Presidential and Secretary of Defense management priority and is recognized as a key item on the Administration’s agenda to improve the quality of life for our service men and women. Because decent, safe and

affordable housing is such an important component of our service members’ lives,

we are taking steps to ensure that the privatization projects we have already undertaken remain fiscally and physically in good shape. To that end, we are overseeing

the legal and financial documents of these projects through our internal oversight

document called the Program Evaluation Plan, which provides the Secretary of Defense with key information on the Services’ portfolio management of these projects.

We are using this report to oversee the Services’ progress in project management,

meeting schedules for housing renovation and construction, customer satisfaction,

and overall financial management.

Privatization is intended to enable the military services to revitalize their inventories of inadequate housing by leveraging appropriations with private capital.

Under privatization policy, the Services leverage appropriations to get at least three
18

times the housing they would get under traditional military construction programs.

In practice, the current 10 projects in our most recent report have leveraged appropriations at a rate of six to one. In addition, our data show that our initial ten

projects allowed us to build and renovate houses on our installations that would

have cost $600 million more had we used the traditional military construction approach. By leveraging available resources, we can revitalize housing on other military installations.

In terms of future steps, the Department plans to build on our earlier privatization successes by simplifying the process, accelerating project execution, and institutionalizing best practices in the Services’ deals with the private sector. We plan to

sharpen our post-award management to ensure fiscal integrity and sound project

management.

IMPROVING BUSINESS PRACTICES

Our installations’ management approach extends to improving our business practices. The Secretary of Defense is committed to improving the way the Department

operates and reducing total ownership costs, and one of the methods is through improved information technology (IT) systems. The Installations’ community is a

frontrunner in the development and use of IT systems to improve the way we manage facilities.

For example, in the fiscal year 2000 CFO Financial Statement, we estimated the

funding requirements for sustainment, since we had no system to capture or forecast sustainment requirements. Now, using the Facilities Sustainment Model which

applies industry benchmarks for sustainment costs, we are able to precisely identify

the requirements. Thus, sustainment costs in financial statements for fiscal years

2003 and beyond will be based on accurate, verifiable information.

Many of our decision-making tools and financial systems are linked to the Department’s real property inventory databases. Currently, the Department maintains

many divergent systems that should be modernized using the latest state of the art

technology and improved business processes. We recently began an effort to improve

the availability and accuracy of information on our physical plant. Our vision is to

improve our processes by developing a standardized real property inventory information system called the Base Information System. The goal is to develop new processes and systems for inventorying real property that will allow users of real property information to easily share and gain access to the information. During this fiscal year, we will develop an enterprise architecture that will help us clearly identify

our current state and processes, develop a ‘‘to-be’’ process and, finally, develop the

road map for change.

In addition to our information systems, we are emphasizing several management

initiatives to improve the efficiency of our installations and reduce total ownership

costs. For example, the facilities demolition program has eliminated almost 62 million square feet of excess and obsolete facilities since its inception in 1998, and we

expect to exceed our goal to eliminate 80.1 million square feet by the end of fiscal

year 2003. The costs avoided by demolition will also free up funding to sustain, restore and modernize other infrastructure in our inventory. The demolition program

was expanded to include several Defense Agencies and will continue past its originally intended completion in 2003.

We have actively solicited ideas to improve the operation and management of our

installations and are currently developing evaluation criteria in order to determine

if there are successful candidates for the Efficient Facilities Initiatives pilot program

authorized in the National Defense Authorization Act for fiscal year 2002. The Department continues to consider opportunities for enhanced-use leasing, and we have

established a working group to identify candidates and share lessons learned. We

anticipate these leasing projects will enable better utilization of our infrastructure,

reduce ownership costs, foster cooperation between the Department and private industry, and stimulate the local job market.

Joint use has been another effective way to better utilize our facilities. For example, the Joint Mobility Center at Elmendorf Air Force Base, Alaska, saved the Air

Force and Army up to 20 percent of the cost to build separate mobility facilities.

In another recent case, the joint Armed Forces Reserve Center at Gray, Tennessee,

combined three construction projects for the Army Reserve, Army National Guard

and Marine Corps Reserve into a single facility project, saving millions of dollars.

FUTURE BASE CLOSURES

Continuing to operate and maintain facilities we no longer need diverts scarce resources that could be better applied to higher priority programs, such as improving

readiness, modernization and quality of life for our service members. We need to
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seek every efficiency in the application of available resources to ensure we maintain

just what we need to accomplish our missions. In the wake of the attacks of September 11, the imperative to convert excess base capacity into warfighting ability

is enhanced, not diminished. With approximately 20 to 25 percent of our base infrastructure estimated to be excess to our needs, a significant financial benefit can be

realized through Base Realignment and Closure (BRAC) 2005 infrastructure reductions.

Prior BRAC actions have resulted in net savings to the Department of approxi- mately $16 billion, with annual recurring savings of approximately $6 billion. We

estimate that the next round of BRAC could save an additional $4 billion in annual

recurring savings if the infrastructure reductions approximate the 12 percent reduction experienced in the last two rounds in 1993 and 1995. Greater reductions in excess capacity could produce greater annual recurring savings.

BRAC 2005 is our most important facilities rationalization initiative. It will help

the Department ultimately save several billion dollars annually. But a financial return is not the only benefit—in fact, it is not even the primary benefit. The authority to realign and close bases we no longer need will be a critical element of ensuring the right mix of bases and forces within our warfighting strategy as we transform the Department to meet the security challenges of the 21st Century. Transformation requires rationalizing our base structure to better match the force structure for the new ways of doing business, and the Department will conduct this rationalization with an eye toward ensuring we look at base capacity across the military services for the best joint use possible.

The Department is currently engaged in the upfront process of organizing and

planning to accomplish the analysis and reporting requirements. We are building

on the experiences gained in previous BRACs and using the additional time Congress has given us to finalize our approach. However, we have not officially ‘‘kicked

off’’ the process.

UTILITIES PRIVATIZATION AND ENERGY MANAGEMENT

The Department seeks to reduce its energy consumption and the associated costs,

while improving utility system reliability and safety. To accomplish this, DOD has

developed an integrated program that optimizes utility system management by conserving energy and water, taking advantage of restructured energy commodity markets, and privatizing our utilities infrastructure.

Conserving energy saves the Department money that can be invested in readiness, facilities sustainment, and quality of life. Energy conservation projects make

business sense, historically obtaining about $4 in life-cycle savings for every dollar

invested. This dynamic becomes even more important when you consider that military installations spent nearly $2.8 billion in fiscal year 2001 to buy energy commodities (almost $400 million more than the previous year—a 16 percent increase),

despite reducing their energy use by about 3 trillion BTUs (a one percent reduction).

We continue to make progress in achieving the 2010 energy reduction goal for buildings of 35 percent per square foot and have reduced consumption by over 23 percent

since 1985.

The Department has a balanced program for energy conservation—installing energy savings measures using appropriated funding and private-sector investment—

combined with using the principles of sustainable design to reduce the resources

used in our new construction. The fiscal year 2003 budget contains $50 million for

the Energy Conservation Investment Program (ECIP) to implement energy savings

measures in our existing facilities.

The Department places a high priority on privatizing utilities. However, we have

found implementation to be more difficult than originally envisioned. We have made

progress and will continue to move forward on the privatization of our utility infrastructure in areas where it makes economic sense. Privatization allows the Military

Departments to focus on core defense missions by relieving them of those installation management functions that can be done more efficiently and effectively by nonFederal entities. Historically, military installations have been unable to upgrade

and maintain utility systems fully due to inadequate funding and competing installation management priorities. Utilities privatization will allow military installations

to benefit from private-sector financing and efficiencies to obtain improved utility

systems and services.

ENVIRONMENTAL PROGRESS

The Department’s environmental program is focused on four overarching principles. First, environment is a fundamental component of our national power. We

must be ever vigilant in ensuring lack of attention to environment does not under-
20

mine or degrade our national power. Second, environmental stewardship is a component of good business management. The Department is fully committed to implementing environmental management systems to improve efficiency and integrate environment into day-to-day operations. Third, environmental stewardship reflects the

high ethical standards of our soldiers, sailors, marines, and airmen. Fourth, completing environmental remediation quickly, effectively, and safely, to protect human

health and the environment from the results of past contamination, is important,

both at our active and BRAC installations, as well as formerly used defense sites

and surrounding communities. We are committed to continuing to be a leader in the

Federal government in environmental management, and our fiscal year 2003 budget

request, highlighted in the table below, reflects this commitment to ensuring environment fully supports our defense mission.

ENVIRONMENTAL PROGRAM—SUMMARY OF REQUEST

[President’s budget in million of dollars]

Fiscal year

2002 request 2003 request

Cleanup .................................................................................................................................... 1,278 1,278

BRAC ........................................................................................................................................ 491 520

Compliance .............................................................................................................................. 1,623 1,706

Pollution Prevention ................................................................................................................. 245 247

Conservation ............................................................................................................................ 138 152

Technology ............................................................................................................................... 211 205

Total ........................................................................................................................... 3,955 4,108

To maintain our ability to defend our country against terrorism and other security

threats, our forces have conducted—and must continue to conduct—training and operations on land, at sea, and in the air. Environmental degradation can deny access

to lands, undermine the realism and effectiveness of training, limit operational flexibility or productivity, and pose safety risks. Hence, cleaning up past contamination

is important to sustain the land we hold in the public trust. Through the Defense

Environmental Restoration Program, we are working to cleanup past contamination

in all 50 States, the District of Columbia, and eight U.S. territories. This program

covers environmental restoration activities at active installations, installations that

are closing or have had their missions realigned, and formerly used defense sites

(FUDS).

Our environmental restoration request is $1.3 billion for fiscal year 2003, slightly

higher than in our fiscal year 2002 request. We are proud of our cleanup successes

but acknowledge that we still have some complex issues to address. The Department

has built a strong environmental cleanup program over the last two decades and

is charting a course for completing our environmental restoration requirements.

The environmental cleanup at current BRAC installations continues to serve as

a model for collaboration among Department cleanup and real estate professionals,

Federal and State regulators, and communities in integrating reuse with cleanup.

We have completed environmental cleanup requirements under CERCLA at 84 percent of land slated for transfer from the Department. To continue the remaining environmental cleanup required at previous BRAC installations, we are requesting

$520 million, $29 million more than was requested last year.

We are also building on the requirements of Executive Order 13148, Greening the

Government Through Leadership in Environmental Management, to improve our

business practices. We have recently undertaken an initiative to implement environmental management systems across all missions, activities and functions. Industry

leaders have shown us that effective environmental management systems will enable the Department to leverage its environmental investment to reduce missiondriven risks and associated compliance costs. We believe successful implementation

of environmental management systems in the Department is essential to maintain

and improve readiness, mission efficiency, and environmental stewardship in light

of the increasingly demanding national security and environmental requirements of

the 21st Century.

The fiscal year 2003 environmental quality request for $2.1 billion includes $1.7

billion for compliance, $250 million for pollution prevention and $152 million for

conservation. This will allow us to continue to comply with environmental laws and

regulations and to effectively reduce the amount of pollutants we generate in performing the defense mission. These funds are a good defense investment. As of the
21

end of fiscal year 2001, the Department reduced the number of new environmental

violations received by 75 percent since 1992, reduced the amount of hazardous

waste generated by over 60 percent, and completed Integrated Natural Resource

Management Plans at the vast majority of bases.

For several years, the Department has worked to integrate environmental, safety,

and occupational health considerations into defense acquisition weapon system programs. We believe that smart consideration of environmental concerns during the

acquisition process is the key to efficient, cost effective, and environmentally sound

weapon system performance.

We have revised the Directives that impact the major weapon system acquisition

programs for the Department. These changes clarify and strengthen the management of life-cycle environmental issues by integrating them into the overall acquisition program management process. The new language also drives reduction in the

procurement and use of hazardous materials to ensure waste minimization and pollution prevention are institutionalized in the acquisition process. In addition, the

program manager is required to assess the life-cycle environmental impacts of the

weapon system to identify opportunities for source reduction and recycling to minimize these impacts. These changes help reduce the cost and impact of these weapons systems on the people who make them, use them, maintain them and live

around installations where they are stationed. Such improvements in today’s weapon system acquisitions will have far-reaching positive impacts on ‘‘green’’ initiatives

at all of our installations for many years to come.

Since sound environmental policy is the foundation of future improvement in environmental performance, we provided greater emphasis on promoting teamwork between environmental and procurement personnel to realize the benefit of affirmative

procurement policy goals. All of these changes have improved our performance of

purchasing environmentally preferable products, which has reduced our potential

environmental impact on both the communities around our installations as well as

our own personnel.

The Department is fully committed to military explosives safety—protecting military members and the public from the adverse effects of munitions. Last year, after

an in-depth review, we divided our challenge into two areas of responsibility: Operational Ranges and Munitions Response Areas.

Our operational ranges are needed today and tomorrow. We fully appreciate the

need for good stewardship and, as a part of our Range Sustainment Initiative, we

are reviewing how we look at and manage our operational ranges. Most immediately, the Department is clarifying our operational range clearance policy. We are

also developing the protocols for determining and responding to any groundwater

contamination under our operational ranges. For our Munitions Response Areas,

which include all property which may have unexploded ordnance, abandoned munitions, or munitions constituents, and we are building on the authority provided to

us with the Defense Environmental Restoration Program. In so doing, the Department intends to fully comply with Sections 311, 312, and 313 of the National Defense Authorization Act for fiscal year 2002, Public Law 107–107, which call for several significant items, including a site inventories, cost projections and a technology

roadmaps.

ENCROACHMENT

Civilian encroachment at active military bases and test and training ranges can

interfere with the ability of our military to carry out their missions and can degrade

the training and readiness of our military personnel at a time we need them most.

Encroachment involves buildings and structures protruding into navigable air space;

residential development locating in noisy, high performance aircraft approach and

departure corridors or too close to gunnery ranges; or it can be off-base electrical

transmissions interfering with air and ground communications. The presence of endangered species or their critical habitats in or near gunnery and bombing ranges

also contributes to encroachment problems.

Urban growth and development is the most visible form of encroachment and has

the greatest impact on military operations, training, and readiness. Encroachment

of incompatible civilian activities in whatever form—if allowed to go unmanaged

and unregulated—will continue to compromise the effectiveness of our military

forces. Since maintaining the readiness of our forces is one of the highest priorities

of the Department, we strive to maintain a reasonable balance between test and

training requirements, the concerns of our neighbors near our test and training

ranges, and the importance of sound environmental stewardship. All of our military

services are prepared to work with appropriate State and local authorities to control

and hopefully curtail encroachment on both sides of the fence line.
22

We are addressing encroachment by developing a comprehensive strategy that

will consider test and training mission needs, regulatory requirements, community

support, urban encroachment, and the current and projected capability of our ranges

to support the mission. The Deputy Secretary of Defense established a full time Integrated Product Team in the Office of the Under Secretary of Defense for Personnel

and Readiness to act as the Department’s coordinating body for overall range encroachment issues. This IPT, which reports to the Senior Readiness Oversight Council, has been tasked with developing a comprehensive set of proposals to address the

encroachment issue.

ENABLING LEGISLATION

Consistent with our work to improve installations and environmental business

practices, we are developing specific military construction legislation that will enable us to conduct our work more efficiently at lower cost. The legislation Congress

enacted during fiscal year 2002 greatly improved the Department’s freedom to manage, and the legislation currently under consideration by the Department will continue that trend without diminishing our accountability.

CONCLUSION

Our fiscal year 2003 budget request for military construction and for the Department’s environmental programs supports the Department’s obligation to acquire and

maintain facilities vital to our changing missions and readiness. America’s security,

today and in the future, depends on installations and facilities that support operational readiness and changing force structures and missions. We have slowed the

deterioration of our facilities, and will, over time, fully restore their readiness. With

the Defense Facilities Strategic Plan as our guide, we are committed to providing

and supporting healthy installations, facilities and housing that will enhance readiness, morale and quality of life for our service members and civilians. This installations’ transformation will continue until all of our facilities meet the requirements

of a 21st Century military.

We will also continue to identify opportunities to operate more efficiently and leverage our resources through partnerships with the private sector on housing and

utilities privatization and competitive sourcing initiatives. We are committed to divesting ourselves of unneeded, underutilized facilities through the Efficient Facilities Initiative, facilities demolition, outleasing, and other facility reduction initiatives.

As a leader in environmental management, we will complete environmental remediation quickly and effectively at both our current and former installations and will

protect our service members and others from the results of past contamination. In

addition, we are developing a strategy to address encroachment that considers the

needs of everyone involved.

In closing, Mr. Chairman, I sincerely thank you for providing me this opportunity

to describe the Department’s plan for revitalizing our installations and facilities and

for your very strong support for a robust military construction program. I look forward to working with you as we transform our plans into actions.

Senator FEINSTEIN. Thank you very much, Mr. DuBois. I might,

if I could—and we will do 5-minute rounds—ask about the cuts in

the guard and reserve. As I understand it, the Army National

Guard is down 75 percent, the Army Reserve 65 percent, the Air

Guard 79 percent, the Air Force Reserve 57.4 percent, and the

Navy Reserve 1.4 percent. How can these entities function with

these kinds of cuts?

Mr. ZAKHEIM. Well, let me take a stab at that, Senator, and then

I will turn it over to my colleague.

Senator FEINSTEIN. Can you speak up, Mr. Zakheim?

Mr. ZAKHEIM. Can you hear me better now? I will take a stab

at that, then turn it over to my colleague.

The percentages, of course, are true. The real issue, as far as we

are concerned, is very much the same issue as that which Ray

DuBois just mentioned and I briefly alluded to, and that is one of

priorities. The Services’ priority, of course, is to fund the first-tofight units, and the guard and reserve units tend not always to be
23

first to fight. For this and other reasons, they simply did not get

priority.

By way of context, however, if you take the $297.3 million that

was allocated to the 37 guard and reserve projects in this budget,

it compares favorably both with the original 2002 budget, which

was at about $224 million, and the 2001 budget, which was roughly

the same, at $222 million. Again, you had a spike in the amended

2002 budget.

But recalling the context, and again I draw you back to what my

colleague, Ray DuBois just said earlier, until 9/11 the Secretary

had as one of his highest priorities bringing down the recapitalization rate, and that was reflected in our amended 2002 budget.

REDUCED REQUESTS FOR RESERVE COMPONENTS

Senator FEINSTEIN. But my question is a little different. If you

are going to take the Army National Guard from $405 million to

$100 million, how is that guard going to function as the primary

position from which you draw troops for the actives, as well as nay

role it might have in homeland defense?

Mr. ZAKHEIM. Well, my number reflects our request, which actually is $267, but I think that does not really answer your question.

Again, it is not that there are no facilities. It is a question of

modernizing those facilities, and once again it was a question of

priorities. To place just the Army National guard in context, in

2001 we spent just under $60 million for the Army National Guard.

Senator FEINSTEIN. Let me clear this up. The number I am using

of $405 million is the amount that Congress finally appropriated.

Are you saying that was not used, because you are taking it down

to $111 million. You are saying that the $405 million was not used?

Mr. ZAKHEIM. I understand it was the amount that you appropriated, but I still go back to my point that relative—there was a

spike there last year, and relative to the historic levels, I believe

I am correct that the $101 million is actually somewhat higher,

even if one accounts for inflation.

Senator FEINSTEIN. Are you saying the 400—and I do not mean

to beleaguer you, but that the $405 million was not used?

Mr. ZAKHEIM. It was used. It is being used. It was appropriated.

The number I used—and I am sorry for the confusion—was the

number that we requested in the amended budget. I withdraw

that. I do not mean to confuse you. The basic answer is, as I said,

it is just a question of priorities, for example, the ‘‘first-to-fight’’

concern. Historically the $101 million is actually very much in line

with previous, other than last year’s level, but I am sorry if I confused you.

Senator FEINSTEIN. The same thing is true of the Army Reserve,

from $167 million to $58 million. I have a hard time understanding

how you are going to keep a strength and absorb this kind of cut.

Mr. ZAKHEIM. Again, I would have to refer you particularly to the

Services. They made these allocations, and these were the priorities

as they saw they best could fund them.

Senator FEINSTEIN. Are you saying those were the Services’ requests?

Mr. ZAKHEIM. Yes, ma’am.
24

Senator FEINSTEIN. They have actually requested this kind of

cut?

Mr. ZAKHEIM. Yes, ma’am. This is what they agreed to. When we

went to them and we set our priorities out, they had the flexibility

to reallocate, readjust, protest, whatever you want to say. This is

how it came back. This was not forced down their throats.

Mr. DUBOIS. Madam Chairwoman, if I could possibly suggest

that we all recognize the dramatic increase last year, both in terms

of the President’s request and in terms of the ultimate appropriation. I think it is probably fair to say that as the Services allocated

their top line and were grateful and happy for the plus-up last

year, they probably looked at the requirements for this year and

saw where they could come down but historically still stay within

the same basic glide path that they had been on before with respect to the military reserve components.

I am just suggesting—and that is something, as Secretary

Zakheim said, is more particularized to the individual Service, but

last year, both active and reserve components had a substantial

dramatic increase in terms of appropriation, in terms of presidential budget request amended, and in terms of the appropriation.

Senator FEINSTEIN. Well, my time is up, and I did have some

other questions, but I would be very surprised if they can absorb

these kinds of cuts without any substantial reduction, because they

are the largest cuts I have seen since I have been in the Senate.

Senator Hutchison.

Senator HUTCHISON. I am going to defer to Senator Stevens.

Senator STEVENS. Thank you very much.

I am interested in the comments that you have made and the

comments that Under Secretary Wolfowitz made before our committee when he said, earmarks directing infrastructure spending

on facilities the taxpayers do not need and eventually could be

closed would be compounding the waste that the delay in BRAC is

already causing. I think that the implication to us has been that

there is to be a delay in significant investment until the Department knows which are going to be closed, and you are saying that

is not going on, Mr. DuBois?

Mr. DUBOIS. I am suggesting, Senator, that while it is inescapable that BRAC is in our future, and it is inescapable that because

the BRAC is in our future I suspect that the services focused their

previous MILCON dollars on current mission requirements, they do

not—MILCON allocations this year and next are not and will not

be allocated on a facilities-centric basis. It is on a mission-centric

basis.

Senator STEVENS. I am confused about that, because Dr.

Zakheim, you have told us that you have deferred $400 million to

low priority MILCON projects because of the uncertainty over base

closure, and you are saying it is mission-oriented. You are telling

me that none of these bases that have been delayed have any missions that are so important that they should be considered now?

Mr. ZAKHEIM. Well, Senator Stevens, since you quoted me, let me

explain something about that $400 million, sir. That had absolutely

no relationship to the BRAC closures and, in fact, if you like I can

even now give you detail as to how that $400 million was achieved.
25

Senator STEVENS. I would like to have a list of the projects that

have been delayed. Mr. DuBois says that they are all mission-oriented, and yet there is a whole series of them that have been delayed. Many of the Services, of course, are coming in directly to us

saying, we had a project that has been delayed, and we are going

to be looking to adding these back in and getting into a fight again

with you all.

Mr. ZAKHEIM. Well, I cannot speak for what the Services tell you privately. I can tell you that, for instance, there were $22 million

worth of projects that were simply accelerated by the Congress so

that there was no need to put the same money in in 2003, and I

can give you details of those, the Schofield Barracks land project,

the basic supply at Incirlik in Turkey, the Army National Guard

Readiness Center in California. Those were all accelerated by the

Congress in 2002.

Senator STEVENS. I am not asking about what was accelerated.

I want to find out those that were delayed, Dr. Zakheim. You have

testified, and your program shows low priority military construction projects delayed. Mr. DuBois says we have not delayed any

mission-oriented projects directed by the service. Am I misquoting

you?

BASE CLOSURE

Mr. DUBOIS. No, sir.

Senator STEVENS. There seems to be a conflict there to me, and

we are hearing about them, and I would like to know what are the

delays. I do not have much time. Dr. Zakheim, in terms of this

statement, it indicates that 152 major installations in the last four

BRAC rounds, and 235 were proposed, and that implementation of

the last round of the four approved BRAC’s was completed on July

13, 2001. Is your testimony that all of the BRAC’s are closed now,

the prior BRAC’s? We had four rounds. Are they all closed now?

Mr. DUBOIS. May I answer that question in the following way?

They are closed, but not disposed. There is a difference between the

military making the decision to close an installation and whether

or not the military department has had the opportunity to dispose

or convey that property to a local redevelopment authority.

Senator STEVENS. Respectfully, to us the question is whether

they are having the savings you and your predecessors have told

us they would have. Now, I think there are still costs out there

that are associated with bases that were supposed to be closed that

are not really closed, and will not be closed because of environmental or public pressures, a lot of other things. That is why many

of us voted not to go into another round of BRAC until we found

out what happened to the last four and whether they really saved

the money we were told they would save.

Now, the implication of your statement today is that they are

closed and they are saving more than $6 billion a year, is that

right?

Mr. DUBOIS. Yes, sir. According to the statistics that have been

provided to us by OMB. GAO last summer wrote another report on

this in this regard, specifically addressing the savings that the Department of Defense estimates on a recurring basis exists from

closed and BRAC’d properties.
26

It is true that some of those BRAC’d properties have not been

conveyed to the local redevelopment authority or put out for bid,

but that does not mean the savings have not already been created.

Senator STEVENS. I have great difficulty with this subject, because in my judgment, as I said, there are many of them that have

not been closed. Are you crediting against those savings the continued cost of the bases that are no longer used?

Mr. DUBOIS. This is a net savings per annum, sir.

Senator STEVENS. I would like to see the study. I think it ought

to be broken down. I also again request a list of the projects that

were deferred for this year for the record.

Thank you very much, Madam Chairman.

Senator FEINSTEIN. Thank you, Senator.

Senator Hutchison.

Senator HUTCHISON. Thank you, Madam Chairman. I have to say

that I would like to see how anybody could say we are saving today

$6 billion in closed bases when we are still doing environmental

cleanup and have not even gotten the full bill yet for environmental cleanup for many of these bases.

Mr. DUBOIS. You are quite right, Senator Hutchison. In fact

there is probably—we estimate a $4 billion cost to complete environmental cleanup of all prior BRAC’d properties, but the $6 billion

that has been attested to by agencies outside of the Department of

Defense is a $6 billion current cost avoidance cost savings, does not

include the cost to complete the $4 billion that—I do not know how

many years it will take us to complete this, because as you know,

there are a number of installations that probably will take some

time to clean up and some of them may, because of their ranges,

unexploded ordnance, a very serious issue, it may be the decision

to fence those areas, as has been the case in the past, and create

wildlife refuges out of them.

Senator HUTCHISON. Well, I would just say that one of the reasons that many of us were concerned about another BRAC is because we have not yet gotten all the bills for the closures, and what

we want to assure ourselves of is that if we close a base, that it

is really going to save money.

Mr. DUBOIS. I want to assure you that Secretary Rumsfeld, one

of the first things he did after I got this job was to ask me to review all BRAC’d properties which have been closed, which have

been conveyed, which have been disposed, and those that have not

been disposed or conveyed, why not.

Working, as Senator Feinstein knows, with H. T. Johnson, the

Assistant Secretary of the Navy, and Mayor Brown in San Francisco, we have made several major steps forward. Hunter’s Point is

now conveyed. We have got several other in the pipeline, but I will

give you a great example, El Toro. Today they are voting in El Toro

in Orange County on whether or not that is going to be a future

airport or not. We have had to sit there to wait until the local political jurisdictions, plural, decided what their future use would be.

Depending on the referendum today as we sit here we, the Department of the Navy, will issue a record of decision and hopefully dispose that property forthwith.

Senator HUTCHISON. Well, I will just ask you on the issue of the

BRAC that we now know is going to be in 2005, that you come to
27

us in good time with the force structure that we are going to need

in the next 25 to 30 years in this country, and then make sure that

we have the training facilities. You talk about encroachment in

America. What about encroachment overseas and our ability to

train overseas?

So let us make sure we know what our troop strength is going

to be in what services, and probably before September 11 you

would have said we did not need a cavalry any more, and now you

need to make sure that we have training space for cavalry, so we

have got—and obviously I am being a little disingenuous here, but

I am trying to say that we need to really know what our training

requirements are and our force structure before we go into that

BRAC.

Mr. DUBOIS. You are absolutely right, and as you know, in the

legislation it requires the Secretary of Defense to report to Congress no later than February of 2004 with a force structure for the

next 20 years.

Now, I hope everyone in this room understands, because certainly the Secretary of Defense does, that that kind of report has

got a little crystal ball aspect to it. It is tough enough to sit there

and look over the next several years, but he has an obligation to

report to you in February of 2004 with not just the force structure

for the next 20 years, but also, as the legislation requires, an inventory capacity analysis, a base structure inventory. These are

important reports that you have correctly required, before we go

into that 2004, 12 months of very intense debate and analysis as

to how that force structure superimposes itself on the appropriate

infrastructure.

Senator HUTCHISON. I have another question, but I do not know

what my time is.

NATO MILITARY CONSTRUCTION

Senator FEINSTEIN. Go ahead.

Senator HUTCHISON. I want to go to my European component,

and with the added burden that we are taking in the war on terrorism, which is going to be necessarily proliferating among many

countries where we are going to have military construction

projects, I would just ask if the increase in the investment in Europe, and the 25-percent NATO requirement which we have, is a

fair allocation, or is it time for us to look at burden-sharing with

our European allies and our percentage of NATO? Is any of this in

the cards, or are we just going to continue to have the same responsibilities in Europe and also have to take the lion’s share of

the burden in the war on terrorism?

Mr. ZAKHEIM. Well, it is in the cards. It is a very, very appropriate question at this time. We are in fact looking at doing in Europe what we have been able to accomplish in Korea. There will be

a new burden-sharing report coming out soon, and you can take a

look at the chart there. You will see that most of our European allies contribute less than 40 cents on the dollar for what is spent

out there.

There are many, many ways we can get them to increase their

percentage, for example, as part of the Efficient Basing East

project that General Ralston has put together. Both Ray DuBois
28

and I were in Europe to view progress in this area. About $50 million is being contributed by the German Government for what is

called payment in kind. They are doing all kinds of things such as

landfill for the training facility and so on.

That is a good model, and we need to ensure that we repeat it.

I talked extensively with the Secretary about this, and with Ray.

We have his wholehearted support to go out and get our friends to

contribute more because we are bearing such a massive load. Even

the direction the current military construction, the thrust of the

construction you mentioned yourself Greece, Spain—is a southward

orientation. This makes a lot of sense relative to what we are doing

right now and are likely to do in the future.

So there is a reorientation going on. There is efficiency going on.

General Ralston is committed to that, and at the same time we are

formulating a strategy, frankly, to approach our European friends

and say, we need some help here.

Senator HUTCHISON. Thank you.

Senator FEINSTEIN. Thank you, Senator. Just a couple of wrapup things. Before we move this bill, I would like to ask you to provide us with a net-net accounting of savings from BRAC closures

to date. That includes environmental cleanup. I mean, do not exclude that, because environmental cleanup has always been shortfunded, and I want to see what the actual numbers are, if I may.

[The information follows:]

The net BRAC Savings over the implementation period from fiscal year 1990 to

fiscal year 2001 is about $15.5 billion. The annual recurring savings after fiscal year

2001 are projected to be about $6 billion.

The detailed cost and savings data is available in the DoD Base Realignment and

Closure Executive Summary and Budget Justification for the Fiscal Year 2003

Budget Estimates.

Senator FEINSTEIN. A second point is, I do not believe, Mr.

DuBois, Hunter’s Point has been conveyed yet. That is probably another, I am told by my staff, another year or so away, and last year

our committee included a direction to submit a joint FYDP, or even

to submit a plan to develop a joint FYDP by February 15 of 2002.

Well, we have not received it, and my question is, are you really

serious about your support of joint construction?

Mr. ZAKHEIM. Let me take that last one first. We are putting the

report together. We have five joint use projects in the current budget, as I think you know, NAS-Atlanta, which is about $7 million,

the joint reserve base, which is about $3 million, and New Orleans,

about $141⁄2 million, Norfolk, nearly $5 million, Forbes Field, in Topeka, Kansas, about 141⁄2 million, so we have those. We are putting

that report together.

And by the way, I have also created, and this I guess is real

green eyeshade stuff, Senator, but what is called a program element. Within the FYDP you measure activity. If you really want

to be specific about it and direct it, you create what is called a program element, and a report asks for that. You ask for that, and I

have done that, so we have moved along on those grounds.

And I also, I guess, again being a numbers guy, I cannot resist

at least in part not responding to your previous point about the

net-net savings. Sure, it is true environmental remediation is not

really a BRAC cost, but I know what you are driving at. But never-
29

theless, the point is that we have $4 billion, or frankly even $6 billion in remaining cleanup costs, the estimates of annual savings is

$6 billion, so if you are stretching the cleanup cost over a number

of years, it is clearly a small percentage of annual savings of $6 billion. Those savings are real. As you well know, we do not always

see eye to eye with GAO, and on this one we do.

Senator FEINSTEIN. Thank you very much.

INFRASTRUCTURE IN KOREA

Senator HUTCHISON. I just have one follow-up, and that is on

Korea. Now, last year when we were here talking about Korea, I

made the observation that it did not seem as if we had reassessed

our troop strength in Korea for a long time, and we were spending

a lot of money in Korea. This year, I think it is more relevant to

spend money in Korea, but I still have to ask the question, have

we looked at what our long-term requirements are going to be in

Korea, and are we sizing our commitment there correctly?

Now, obviously there is a tension that would require a certain

vigilance, but in the long term, is our troop strength being looked

at for long term needs, and is our military construction following

what we would think would be a long term, because you are cutting

off domestic MILCON pretty much. Are you doing the same thing

in Korea?

Mr. ZAKHEIM. Well, those are very, very important questions,

Senator, and as you rightly noted, this is probably not a time when

we should be thinking very much about reducing anything in that

part of the world.

As you know, General Schwartz has worked very hard to create

a program that would essentially make our footprint in Korea far

more efficient. The Koreans want that as well, but in terms of the

force structure, obviously any kind of significant change in force

structure presupposes a political change on the peninsula, and

right now we just do not see that.

Indeed, thinking back to how things went totally out of hand in

1950 because we sent the wrong signals to Kim Il Sung, the last

thing we want to do is send the wrong signals to his son by speculating about possible withdrawals, or anything like that. They are,

given that for the foreseeable future our posture in Korea is going

to be what it is, and given that the state of facilities in Korea is

just really horrible, and our troops go out there primarily on unaccompanied tours and live a very hard life, it seems appropriate to

do what we are doing there. This is especially because General

Schwartz has been so attentive to not only modernizing the facilities, but doing it in the most efficient way possible.

Senator HUTCHISON. But looking at the long term, and I understand and agree with everything you have said, you do not want

to send a signal now that we would be lessening our commitment,

but given that in the long term there is the possibility of a lessening of hostilities, are we looking at our military construction for

the more permanent kinds of needs that we would have there?

Mr. ZAKHEIM. My understanding is that by doing it more efficiently we in effect hedge against that possibility, if it ever were

to emerge in the foreseeable future, so that we provide the right

sorts of facilities for our people now. Of course we all hope there
30

would be, changes. But the only changes as far as we are concerned

are some kind of change in the north. In that case those facilities

would, at least as we can see from here on out, and no one is a

prophet, would be relevant to whatever we would be doing.

There is no question that our commitment to peace on the peninsula and our commitment to the Republic of Korea is extremely

strong. It has to be, and indeed, our Japanese friends want to be

sure it is as well, so it is not just Korea only. It is our posture in

a very potentially dangerous part of the world for a long time to

come.

Senator FEINSTEIN. Thank you, Senator. Thank you, gentlemen.

Thank you so much, and thank you for the Korean agreement. I

hope it does result in 50 cents on the dollar.

Mr. ZAKHEIM. Well, they have signed up to it, Senator.

ADDITIONAL COMMITTEE QUESTIONS

Senator FEINSTEIN. That is great, and I, for one, have heard

many, many stories about how bad the housing and sanitary facilities are for our people there, so I am glad it will be getting additional attention.

Thank you very much.

Mr. ZAKHEIM. Thank you.

[The following questions were not asked at the hearing, but were

submitted to the Department for response subsequent to the hearing:]

QUESTIONS SUBMITTED TO DR. DOV S. ZAKHEIM

QUESTIONS SUBMITTED BY SENATOR DIANNE FEINSTEIN

REDUCTION DUE TO PLANNED BRAC

Question. Do you have any concern the this deferral of military construction

projects, while you await the next BRAC proposal, may create an unmanageable

backlog of construction projects in the outyears?

Answer. The Department has not deferred military construction projects pending

BRAC, hence we do not anticipate a backlog of projects in the outyears. This year’s

military construction request, the second largest request in 6 years, supports the

most mission critical requirements. With programmed investments, we plan on

reaching the Secretary’s goal of a 67-year recapitalization rate by the end of the current future years defense program. Military construction investments, coupled with

increased operations and maintenance funding for sustainment, restoration, and

modernization, will continue improving our facilities and their support for military

readiness even as we rationalize our base structure.

SUPPLEMENTAL

Question. Do you intend to ask for any additional military construction funding

in the fiscal year 2002 Defense supplemental?

Answer. No, there are no military construction projects requested in the fiscal

year 2002 Supplemental request; however, we are requesting authority to execute

a construction project not otherwise authorized by law if an unforeseen requirement

arises.

Question. What projects are you considering? When do you intend to submit your

supplemental request to Congress?

Answer. We do not anticipate funding any military construction projects at this

time; however, we are requesting authority to execute a construction project not otherwise authorized by law if an unforseen requirement arises.
31

OUTYEARS MILITARY CONSTRUCTION REQUESTS

Question. Each of the Services are projecting huge spikes in MilCon funding in

fiscal year 2006 and fiscal year 2007, but outyear funding typically tends to shrink

when the time comes to pay the bill.

Are the MilCon budget projections for fiscal year 2006 and 2007 realistic today,

and will they continue to be realistic down the road?

Answer. The budget projections for fiscal year 2006 and fiscal year 2007 reflect

our current plan to achieve the 67-year recapitalization rate within existing priorities. Secretary Rumsfeld is committed to achieving the 67-year recapitalization

rate, so I believe you will continue to see funding for military construction to meet

that goal.

ARREST DISMAL CONDITIONS/LARGE RESERVE COMPONENT CUT

Question. Dr. Zakheim, last year you testified, and I quote, ‘‘Regrettably, in the

past we did not plow enough back into our facilities. We have increased the level

of funding we traditionally spend on military construction and family housing and

hope to spend even more in the future to arrest the dismal conditions of many of

our facilities.’’ Well, this is what you said last year. . . . Today is the future, but

this budget doesn’t appear to reflect your previous intentions.

Your previous testimony stated that the Department has, and again, I quote,

‘‘taken special care to ensure that the National Guard and reserve facilities requirement were fully and fairly incorporated in this portion of the process.’’

This year’s budget request reflects steep cuts in the Guard and Reserve budgets—

even if you take away Congressional inserts, the reserve component budgets are

down 40 percent to 60 percent from last year’s budget request. Would you please

address the reasoning behind the sharp cuts in the Guard and Reserve? (He is likely

to respond that those are Army decisions, and you will have to ask the Army for

the rationale.)

Answer. Although the Guard and Reserve request is lower than last year’s fiscal

year 2002 request, in no way does it imply any easing in our commitment to revitalizing the Guard and Reserve infrastructure. For instance, the $297.3 million request

for fiscal year 2003 is higher than requests prior to fiscal year 2002. Further, funding for Sustainment, Restoration, and Modernizaton of our facilities within the Operation and Maintenance accounts has been increased. While last year’s funding

level is not sustained due to higher priorities for tranformation, mission requirements, and readiness, our multiyear magagement plan to revitalize DOD facilities

through construction, increased SRM, demolition, and BRAC is on targert to achieve

the 67-year recapitalization rate goal by fiscal year 2007.

Question. Do you believe the Guard and Reserve budget requests are adequate?

Answer. Yes. Again, I would like to point out that the fiscal year 2003 request

is higher than the requests prior to fiscal year 2002 and that the fiscal year 2003

request is just one piece of our multiyear management plan to achieve a 67-year

recapitalization rate. The fiscal year 2003 Guard and Reserve military construction

requests support this plan.

QUESTIONS SUBMITTED BY SENATOR KAY BAILEY HUTCHISON

LOW PRIORITY MILCON PROJECTS

Question. Dr. Zakheim, there has been a lot of discussion about the deferral of

$400 million of low priority milcon projects because of the uncertainty/delay over

base closure. Why were they projects deffered? Will you provide us that list of

projects?

Answer. The projects were not really of a lower priority. Instead, they were either

deleted since they were funded elsehwere, i.e. out of the Defense Emergency Response Fund (DERF), accelerated by Congress, not executable, Funded with prior

year savings, or repriced based on foreign currency rates or extension of congressional actions.

I will provide a list of the projects that were deferred depending on the ruling of

the General Counsel and the Office of Management and Budget.

MILCON BUDGET

Question. Dr. Zakheim, has the decision to delay brac until 2005 impacted the

military construction budget in 2003 and how will it impact it over the next 2 years?

Will we see a smaller milcon budget?
32

Answer. The decision to delay BRAC by 2 years has not impacted the size of the

fiscal year 2003 military construction budget request. The fiscal year 2003 military

construction budget request was the second highest in the last 6 years. The highest

request ever was the fiscal year 2002 request. I do not believe you will see smaller

budget requests in the next 2 years since we are not allowed to, nor would we, prejudice the BRAC process. The Department will continue to fund the most critical requirements in fiscal year 2004 and fiscal year 2005 regardless of the fact that BRAC

has been delayed until fiscal year 2005.

QUESTIONS SUBMITTED TO RAYMOND F. DUBOIS, JR.

QUESTIONS SUBMITTED BY SENATOR KAY BAILEY HUTCHISON

EUROPEAN ALLIES HELP

Question. Secretary DuBois, I note that this budget contains over a billion dollars

of major military construction projects for Europe alone. This does include funding

for the NATO security investment account. However, this does not include any funding to operate and maintain family housing or bachelor housing in Europe which

would be additive to the billion dollars.

Secretary DuBois, I also note that we have projects in the budget associated with

the expansion of NATO headquarters in Larissa, Greece and two projects in Belgium associated with the U.S. component of NATO, shape headquarters.

Secretary DuBois, with the U.S. fighting a worldwide campaign against terrorism,

is it unreasonable to ask our European allies to do more in defense of the alliance

and especially help with our infrastructure bill to help maintain U.S. military presence in their countries, such as in Germany, Italy and Spain? How often do we renegotiate burden sharing agreements in Europe?

Answer. While we encourage our NATO Allies to assume a greater share of the

burden of providing for the common defense, the Department believes that their

burdensharing, or responsibility sharing, efforts are generally positive. NATO countries have long provided substantial indirect support for U.S. forces stationed on

their territory. Our Allies provide bases and facilities rent-free, various tax exemptions, and reduced-cost services. They also provide direct support through commonfunded budgets such as the NATO Security Investment Program (NSIP).

Since September 11, NATO Allies have shown an unprecedented level of support

for the United States. The decision to invoke Article 5 of the Washington Treaty,

the core clause of NATO’s founding charter which states that an armed attack

against one Ally shall be considered an attack against them all, is the most profound expression of Alliance solidarity. This was the first invocation of Article 5 in

the Alliance’s history.

Subsequent to invocation of Article 5, the Allies agreed (at the request of the

United States) to take eight measures to implement it and to expand the options

available in the campaign against terrorism. These measures range from enhancing

intelligence sharing to providing blanket overflight clearances for U.S. and other Allied aircraft for flights related to operations against terrorism.

Our active participation in NSIP assures the U.S. of a major leadership and frontline role in shaping and influencing the collective defense posture of the Alliance.

We have carefully crafted our foreign policy decision to be a leader in the NATO

Alliance. And while most of the Allies’ contributions are less than .5 percent of their

defense budgets, our contribution represents even less than that.

The agreed cost sharing formulae determining each member nations’ cost shares

are based primarily on their contributive capacity (‘‘ability to pay’’), Gross Domestic

Product (GDP), and the economic and user benefits derived from the program. However, the U.S. cost share is only about half what it would be if the GDP measurement strictly governed, in recognition of U.S. contributions to non-NATO global responsibilities. Our cost share has been reduced from a high of 44 percent in 1960

to approximately 24.7 percent today. Further reductions are foreseen should additional nations be offered membership in NATO, a decision expected to be made in

the fall of 2002.

Cost shares are reviewed every second year, but percentages could be raised at

the ministerial level at any time. The U.S. cost share of 24.7 percent brings us a

high value return—in 2000, 60 percent of the total NSIP budget was spent to meet

U.S. needs.

Practical examples abound of the support our European Allies provide for regional

and collective security affairs. The U.S. received NATO infrastructure Allied-nation

support for many humanitarian and peacekeeping initiatives and operations—for ex-
33

ample, DESERT STORM, PROVIDE RELIEF, PROVIDE HOPE, PROVIDE COMFORT, SOUTHERN WATCH, ABLE SENTRY, DENY FLIGHT, ENDURING FREEDOM, and U.S. operations in the former Yugoslavia, Bosnia, and Kosovo. Additionally, peacekeeping operations in Somalia and Iraq were executed and sustained

through the direct use of NATO infrastructure.

Furthermore, NATO has approved and funded 83 infrastructure projects, totaling over $330 million, for the bed down of two fighter squadrons at Aviano Air Base,

Italy and for quality of life projects not historically funded by NSIP. Allied agreement to fund these U.S. requirements is particularly significant since NATO facility

funding for the European Allies has been all but eliminated, while full support has

continued for U.S. requirements at our European bases. Despite this, the cost share

percentage for European nations has not been reduced (other than a pro-rata reduction for all members when three new nations entered into the Alliance). Thus, our

European Allies must now shoulder the bulk of the costs of NATO-required construction and facility restoration within their own budgets while NATO funding support for U.S. facility requirements in Europe remains unchanged.

Regarding your opening comments, NATO is fully funding all headquarters, administration, communications, and limited morale and welfare facilities for its new

command structure. NATO requires ‘‘sender’’ nations to provide baseline support of

their own personnel, and to pay for support infrastructure such as medical, dental,

dormitories, housing and other ‘‘quality of life’’ facilities. In addition, participating

nations must provide for housing of personnel stationed at NATO headquarters

sites.

The proposed MilCon projects are to provide support facilities for U.S. personnel

assigned to NATO headquarters, in accordance with U.S. national requirements.

The fiscal year 2003 budget submission contains $33.9 million for U.S. user facilities

in support of NATO headquarters sites.

Specific projects are as follows:

—BEQ/Support Facilities—$14.8M—Larissa, Greece;

—Two Family Housing Flag Units—$1.2M—Larissa, Greece;

—Navy Exchange/MWR—$2.9M Madrid, Spain (Joint Subregional HQ West);

—Barracks Complex-Chievres—$13.6M—Chievres Airbase, Belgium; and

—SHAPE Elem School Classroom Add—$1.4M—SHAPE, Belgium.

In addition, the fiscal year 2003 budget includes $2.9 billion to operate and maintain DOD family housing world wide. The fiscal year 2003 budget also includes operation and maintenance funding for bachelor housing in Europe as part of DOD’s

overall operations and maintenance request.

MASTER BASING STUDY

Question. Mr. Dubois, as I mentioned earlier, we are expecting the overseas master basing study within the next month. How was this review used to determine

overseas priorities and which military construction and family housing projects were

recommended in the 2003 budget?

Answer. The construction projects contained in the 2003 budget address the most

critical requirements of the Department. The overseas master basing study is on

going, and it could not be used to determine which military construction and family

housing projects would be in the 2003 budget. When the study is finalized, we will

work with appropriate host nations to expedite implementation of the study recommendations, as appropriate, and factor the results into future budgets.

Question. Mr. Dubois, did the office of the secretary of defense have any meaningful input into the study, such as criteria and projected force levels?

Answer. The Secretary of Defense tasked the geographic combatant commanders,

through the Chairman of the Joint Chiefs of Staff, to conduct this study. Force levels used were based upon the recent Quadrennial Defense Review. We are now entering in a dialog with the Joint Staff on the methodology and preliminary data that

have been collected, particularly in regard to joint use requirements and capabilities.

DOMESTIC DEFENSE INFRASTRUCTURE

Question. Mr. Dubois, the budget gives the appearance that we shorted domestic

defense infrastructure because of the pending round of base closure and instead invested in overseas areas because they are not subject to brac. Is this true?

Answer. No. Our fiscal year 2003 military construction request focuses investments on critical military requirements, readiness shortfalls, and quality of life, as

determined by the Services, without regard to specific installations or location. 77

percent of the budget request is for U.S. military construction projects while 23 percent is for projects overseas. This percentage, although not predetermined, seems
34

reasonable since about 25 percent of our forces are stationed overseas, and our overseas facilities have been badly neglected.

FACILITIES

Question. Secretary DuBois, I note the rate at which we replace our facilities has

gone from 83 years in the 2002 budget to 121 years in the 2003 budget. There were

a lot of promises made last year in the budget regarding facilities. Are we back to

business as usual and just forget about revitalizing our infrastructure?

Answer. Looking only at the facilities recapitalization portion of the fiscal year

2003 budget, it is true that our investment in recapitalization is not as robust as

the previous year. However, if we look more broadly at fiscal year 2003 in the context of our longer range plans, and if we look at the overall facilities investment

and not just the recapitalization portion, then we are definitely not back to business

as usual. The fiscal year 2003 budget goes a long way toward correcting facilities

sustainment funding—a necessary first step to revitalizing the infrastructure. The

budget improves sustainment funding every year, from fiscal year 2003 to fiscal

year 2007. Our fiscal year 2003 budget request of $5.6 billion increased sustainment

funding to 93 percent, up from 89 percent in last year’s budget. For housing, our

fiscal year 2003 budget requests $227 million more for family housing construction

than last year. These funds will allow the Department to renovate, replace, or privatize over 35,000 housing units. We are also investing $1.2 billion to construct and

revitalize almost 14,000 barracks spaces for our unaccompanied service men and

women to continue improvements in their quality of life. In addition, the budget improves facilities recapitalization funding beginning in fiscal year 2004, and then continues this improvement each year thereafter until we reach our minimum recapitalization rate goal of a 67-year cycle in fiscal year 2007.

Question. Mr. Dubois, what kind of message are we sending to the young service

members and their families about the condition of facilities, in which they work,

train and live? Are we telling them just wait 5 to 7 years, and we will get around

to fixing it?

Answer. We have developed an achievable plan for getting our facilities back on

track, a process which began in fiscal year 2002. However, the deterioration did not

happen overnight, and it will take time to fully eliminate. The fiscal year 2003

budget request concentrated funding on fixing the most degraded facilities while increasing sustainment funding to prevent future deterioration in our facilities overall.

Specifically, the fiscal year 2003 military construction request focused funding on

critical military requirements, readiness shortfalls, and quality of life enhancements. We are making significant investments in housing through renovating existing housing and providing additional quality housing to reduce deficits. We increased sustainment funding to 93 percent of the requirement which will help to

preserve our facilities and reduce the need for future, more costly revitalizations.

In addition, over 60 percent of the military construction budget projects will restore

and modernize mission critical requirements, decreasing the number of facilities

rated C–3 or C–4. Even with a slightly lower budget request, we are taking care

of our people.
(35)

DEFENSE AGENCIES

SPECIAL OPERATIONS COMMAND

STATEMENT OF LIEUTENANT GENERAL WILLIAM TANGNEY, DEPUTY

COMMANDER IN CHIEF

TRICARE MANAGEMENT ACTIVITY

STATEMENT OF MAJOR GENERAL LEONARD RANDOLPH, JR., DEPUTY

EXECUTIVE DIRECTOR

MILITARY COMMUNITY AND FAMILY POLICY

STATEMENT OF JOHN MOLINO, DEPUTY ASSISTANT SECRETARY OF

DEFENSE

DEFENSE LOGISTICS OPERATIONS

STATEMENT OF FREDERICK N. BAILLIE, EXECUTIVE DIRECTOR, BUSINESS MANAGEMENT LOGISTICS OPRERATIONS

Senator FEINSTEIN. We will have the next panel come forward.

I will just begin the introduction. I am very pleased to welcome

Lieutenant General William Tangney, Special Operations Command, Major General Leonard Randolph from the Tricare Management Activity, Mr. John Molino, representing Department of Defense Education Activity, and Mr. Frederick Baillie, Defense Logistics Agency.

This is a very diverse panel. It represents several defense-wide

agencies. We would like to hear from each of you gentlemen, and

I would ask you to put your statements in the record, the record

is open, and just summarize your statements.

General Tangney, before you begin, I think both the Ranking

Member and I would like to recognize the exceptional contributions

that the United States Special Forces have made and are making

even as we speak, and we owe a big debt of gratitude to you and

to your people, so welcome, and please proceed.

STATEMENT OF LIEUTENANT GENERAL WILLIAM TANGNEY

General TANGNEY. Madam Chairwoman, members of the committee, I am Lieutenant General Bill Tangney, Deputy Commander

in Chief of the U.S. Special Operations Command, MacDill Air

Force Base, Florida. I am pleased to be here today to discuss the

USSOCOM military construction budget request for fiscal year

2003. With the chairwoman’s concurrence, I will submit my formal

statement for the record and present a brief summary at this time.

Senator FEINSTEIN. Please. Thank you.
36

TWENTY-FIRST CENTURY FORCE

General TANGNEY. United States Special Operations Command

(USSOCOM) continues its transition to a 21st Century full spectrum multimission special operations force (SOF). In our Nation’s

current war against terrorism, SOF has proved to be uniquely capable.

In order to maintain our status as the force of choice in this area

of asymmetric warfare, we placed emphasis on funding critical

readiness programs, eliminating legacy systems, and investing in

leap-ahead technologies. However, fiscal constraints have prevented us from funding modernization and military construction at

the desired level. Our active and reserve special operations forces

possess highly technical skills used to successfully execute a broad

range of joint special operations missions.

The command’s MILCON program provides essential facilities

that contribute to our unique capabilities and current military construction projects support our unique training needs, enhance our

source capabilities, and increase the readiness of our personnel and

weapons systems to perform their specialized missions.

The MILCON budget request for fiscal year 2003 totals $63.1

million, consisting of $56.2 million for six major construction

projects at three installations, $2 million for unspecified minor construction, and $4.9 million for military construction planning and

design. Your support of this program is vital to the continued effectiveness of special operations forces and their ability to advance

our national security.

PREPARED STATEMENT

This committee’s support in prior years has greatly improved our

joint special operations capability. We look forward to your committee’s continuing support again this year and in the future to acquire the facilities which we need to perform our mission.

Thank you very much.

[The statement follows:]

PREPARED STATEMENT OF LIEUTENANT GENERAL WILLIAM P. TANGNEY

INTRODUCTION

Madam Chairwoman and members of the committee, I am pleased to present the

United States Special Operations Command (USSOCOM) Military Construction

(MILCON) budget request for fiscal year 2003. USSOCOM continues our transition

to a 21st century full spectrum, multi-mission special operations force (SOF). SOF

have proved to be uniquely capable in our nation’s war against terrorism. To maintain our status as the force of choice in this era of asymmetric warfare, we have

placed emphasis on funding critical readiness programs, eliminating legacy systems,

and investing in leap-ahead technologies. As a result USSOCOM has maintained a

level of effort for mission-related MILCON and supporting Operations and Maintenance (O&M) at approximately 1.6 percent of our total funding. This level of funding

is below the minimum required to meet long-term needs—replacing and renovating

aging facilities, satisfying space deficits, and constructing facilities for new missions—because the resources were allocated to more pressing needs such as procurement and O&M. Ideally, we would fund MILCON and supporting O&M at the level

necessary to ensure recapitalization of SOF facilities over a 30-year life cycle, and

to eliminate 75 percent of remaining space deficits within the command. Our

MILCON program has a direct, positive impact on the training, readiness and operational capabilities of our nation’s joint SOF. The highly specialized skills and

equipment required to successfully execute the full spectrum of special operations
37

missions require a modern array of operations, training, and maintenance and support facilities.

PURPOSE

The long term goal of the USSOCOM facilities program, of which annual

MILCON investment is a major factor, is to have all units and personnel working

and living in adequate facilities to enhance SOF training and operations capabilities. Facility requirements are generated by the need to support new weapons systems, force structure and missions, and to modernize and replace old inadequate facilities. USSOCOM budgets for our own operations, training, equipment maintenance, and storage facility requirements. We rely a great deal on, and receive support from, the military departments for barracks and dormitory, family housing,

community facilities, and installation infrastructure. The USSOCOM MILCON program, therefore, is planned to provide facilities to increase readiness of SOF weapons systems, support diverse training needs, and to enhance SOF capabilities. Current construction needs consistent with these criteria include: replacing weapons

training facilities and renovating deteriorated command facilities at Fort Bragg,

North Carolina; constructing a Close Quarters Battle (CQB) training complex and

operational facilities at Naval Amphibious Base Little Creek, Virginia; and building

additional command secure space and making hangar modifications at Eglin Auxiliary Field#9, Florida. Each construction requirement is part of a USSOCOM integrated plan to ensure the most critical projects are constructed and that they contribute the greatest value to our mission.

Your committee’s support, whether directly provided to USSOCOM or to the military departments on behalf of SOF has aided immeasurably in improving our operational capability and the quality of life of our personnel. We look forward to working with your committee to acquire needed facilities so USSOCOM can continue to

perform its missions and ensure we have a fully trained and capable force in the

21st Century.

MILCON PROGRAM

USSOCOM’s fiscal year 2003 MILCON budget request totals $63.1 million consisting of: $56.2 million for major construction, $2 million for unspecified minor construction, and $4.9 million for Military Construction project planning and design.

The six military construction projects in this program for our joint command include

two projects each for the Army Special Operations Command, Air Force Special Operations Command, and Naval Special Warfare Command. Following is a brief description of each project:

SOF Add/Alter Command & Operations Facility Eglin Auxiliary Field #9, Florida—

$9.0M

Constructs a command and operations facility addition to consolidate classified

mission planning functions to facilitate effective emergency operations and mission

accomplishment.

SOF Alter Facilities for CV–22 Eglin Auxiliary Field #9, Florida—$2.1M

Alters an existing aircraft maintenance hangar to install a second hangar door

and extends aircraft access pavement to enable the hangar to accommodate two CV–

22 aircraft and facilitate aircraft movement in and out of the hangar.

SOF Renovate Bryant Hall Fort Bragg, North Carolina—$11.6M

Renovates a 30-year old command headquarters facility to rehabilitate the heating, ventilation and air conditioning, electrical, communications, fire protection and

plumbing systems, and to provide backup electrical power and force protection

measures.

SOF Weapons Training Facility Fort Bragg, North Carolina—$19.2M

Constructs a facility for storage and maintenance of foreign and nonstandard military small arms and builds a weapons training center to provide related training

for special operations forces.

SOF Seal Team Operations Facility Naval Amphibious Base Little Creek, Virginia—

$9.9M

Constructs a Sea Air and Land (SEAL) Team facility to provide platoon areas and

unit operations staging space for an existing and newly established SEAL Team.
38

SOF Naval Special Warfare Operations Trainer Naval Amphibious Base Little

Creek, Virginia—$4.4M

Constructs a Close Quarters Battle (CQB) trainer building for Naval Special Warfare training of units in unconventional warfare, small arms close quarters battle

and specialized weapons tactics.

SUMMARY

The proposed military construction investment in fiscal year 2003 will significantly improve the operational readiness and training capability of the U.S. Special

Operations Command. Your support of this program is essential to ensure the continued quality and effectiveness of our nation’s special operations forces.

Senator FEINSTEIN. Thanks very much, General.

General Randolph.

STATEMENT OF MAJOR GENERAL LEONARD RANDOLPH, JR.

General RANDOLPH. Yes, ma’am. Good afternoon, Madam Chair,

members of the subcommittee. I am Major General Randy Randolph, the Deputy Executive Director of the Tricare Management

Activity of the Office of the Assistant Secretary of Defense for

Health Affairs. On behalf of Dr. William Winkenwerder, the Assistant Secretary, and Mr. Thomas Carrato, my boss, the Executive Director, it is both a privilege and an honor to again present an overview of TMA’s medical military construction program for fiscal year

2003.

I, too, would like to proceed with a short—in fact, I have abbreviated my abbreviated statement, and would like to submit the

longer statement.

The Tricare Management Activity is committed to having all eligible beneficiaries and their providers conduct their health care encounters in modern, safe, efficient facilities. The Appropriations

Committee has been supportive in this ever-evolving process, and

I would like to take this opportunity to thank you and to request

your continued support in our efforts. Our fiscal year 2003 program

requests appropriations of $147,178,000 for five major line items.

We are also seeking $3,363,000 for unspecified minor construction,

and $14,200,000 for planning and design efforts to complete designs on fiscal year 2004 projects, further design projects identified

for fiscal year 2005, and commence design on projects for fiscal

year 2006.

The total appropriation request for the medical construction

budget in fiscal year 2003 is $164,741,000. Three of the major construction line items are U.S.-based, and two are overseas. The first

project is a replacement hospital at Fort Wainwright in Alaska.

This request seeks the fourth of six funding phases. We are seeking

$53 million in fiscal year 2003 for this project.

The second item is a bit unique in that it seeks $10,400,000 to

reimburse the Treasury Department’s Judgment Fund, which has

paid a settled claim following construction of a replacement hospital at Elmendorf Air Force Base, also in Alaska. The Department

of Treasury fund was paid this claim to avoid the accrual of interest. Currently, sufficient military construction funds are not available to reimburse the judgment fund without cancellation of prior

appropriated projects.

The third project is a replacement life skills project at Hickam

Air Force Base in Hawaii, at a cost of $2,700,000. The current facil-
39

ity is more than a half-century old, as am I, and has outlived its

useful life.

The last two projects are overseas. The first consolidates medical

services between Bitburg Air Force Base and Spangdahlem Air

Force Base with a 10-bed hospital replacement facility at

Spangdahlem Air Force Base in Germany at a cost of $39,629,000.

We are also requesting $41,449,000 for the purchase of a medicaldental facility replacement and long-term interest in approximately

10 acres of land that is located in Naples, Italy. This is part of the

Naples Improvement Initiative. All of these facilities will include

antiterrorism/force protection features.

In conclusion, the medical construction program continues to be

an integral component of the quality of life for our uniformed personnel and eligible beneficiaries. As we go forward with these

projects, we show our earnest support and commitment to providing the highest quality health care to those who are committed

to standing for the cause of freedom.

The events of September 11, 2001, put this country on alert, and

have brought forth the best of American character and resolve. The

provision of world-class health care seems to me one small but very

important benefit that we can provide for those warriors and their

families who stand in harm’s way in the defense of our great Nation.

PREPARED STATEMENT

Again, thank you for the opportunity to present our budget to

you today, and this concludes my opening statement.

[The statement follows:]

PREPARED STATEMENT OF MAJOR GENERAL LEONARD RANDOLPH, JR.

Good morning Madam Chair and Members of the Subcommittee. I am Major General Randy Randolph, Deputy Executive Director of the TRICARE Management Activity, Office of the Assistant Secretary of Defense for Health Affairs.

On behalf of Dr. William Winkenwerder, Assistant Secretary of Defense for

Health Affairs and Mr. Thomas Carrato, the Executive Director, TRICARE Management Activity (TMA), it is both a privilege and an honor to again present an overview of TMA’s Medical Military Construction Program for fiscal year 2003.

The TRICARE Management Activity is committed to having all eligible beneficiaries and providers conduct their healthcare encounters in modern, efficient facilities. The Appropriations Committee has been supportive in this ever-evolving

process. I’d like to take this opportunity to thank you and request your continued

support in our efforts.

Our fiscal year 2003 program requests appropriations of $147,178,000 for 5 major

line items. We are also seeking $3,363,000 for unspecified minor construction and

$14,200,000 for planning and design efforts to complete designs on fiscal year 2004

projects, further design projects identified for fiscal year 2005 and commence design

on projects for fiscal year 2006. The total appropriation request for the medical construction budget in fiscal year 2003 is $164,741,000.

Three of the major construction line items are US-based and two are overseas.

The first project is a Replacement Hospital at Fort Wainwright in Alaska. This

request is seeking the fourth of six funding phases to construct a 32-bed facility to

support the military, their dependents and the surrounding retiree population. This

budget seeks $53,000,000 to continue the proposed construction of the main structure of this facility.

The second item requests $10,400,000 to reimburse the Judgement Fund for payment of settled contractor claims surrounding the construction of the Replacement

Hospital at Elmendorf Air Force Base in Alaska. This project was jointly funded by

the Department of Defense and the Department of Veterans Affairs. Construction

was completed in December 1998. However, the contractor submitted numerous

claims that have gone through litigation. The Department of Treasury Judgement
40

Fund has paid the $10,400,000 claim to avoid the accrual of interest. In compliance

with the Department of Defense Financial Management Regulation, the Judgement

Fund should be reimbursed with available Military Construction funds. However,

the Financial Management Regulation also states that if sufficient funds do not

exist within the applicable Appropriation, additional funds must be sought. Currently, sufficient military construction funds are not available to reimburse the

Judgement Fund. This is why an appropriation in fiscal year 2003 specifically to reimburse the Judgement Fund is needed.

The third project is a replacement Life Skills Clinic at Hickam Air Force Base in Hawaii. We are seeking $2,700,000 for this project. The current facility is more

than a half-century old. It is not feasible to renovate the facility due to several

structural impediments. The utility systems have exceeded their useful life span

and have become maintenance and energy intensive. Constructing this facility will

co-locate several support activities that will result in improved efficiencies and provide a significantly improved facility for conducting the sensitive business of mental

health, family advocacy and substance abuse support services performed by these

activities.

The last two projects are overseas. We are seeking $39,629,000 to consolidate

medical services currently split between Bitburg Air Base and Spangdahlem Air

Base with a 10-bed Hospital Replacement at Spangdahlem Air Base in Germany.

This project results in greater efficiencies by eliminating duplicate services and consolidating staff in addition to eliminating excessive maintenance cost due to much

needed upgrades of the electrical, communications, medical gases and HVAC systems. There are also concerns about the current facilities being located too close to

the explosive quantity-distance (Q–D) zone for the flight line munitions loading

area. This creates greater risk to personnel should an explosion occur at the munitions loading area.

For our last overseas project we are seeking $41,449,000 to purchase a Medical/

Dental Facility Replacement and a long-term Right of Superficie in approximately

ten acres of related land in Naples Italy. This facility is located at the support complex at Gricignano, Italy and is part of the Naples Improvement Initiative. This will

give the Department the use of the medical building and the associated land without having to re-negotiate pricing for 99 years. All of these facilities will include

Antiterrorism/Force Protection features.

CONCLUSION

The Medical Construction Program continues to be an integral component of the

quality of life for our uniformed personnel and eligible beneficiaries. As we go forward with these projects we show our earnest support and commitment to providing

the highest quality healthcare to those who are committed to standing for the cause

of freedom.

The events of September 11, 2001 put this country on alert and have brought

forth the best of American character and resolve. The provision of world-class

healthcare seems to me to be one small, but important, benefit we can provide for

those warriors and their families who stand in harm’s way in the defense of our

great Nation.

Again, thank you for the opportunity to present our budget to you. This concludes

my overview request of the Medical Military Construction budget for fiscal year

2003.

Senator FEINSTEIN. I just want to say one thing before the other

two presentations. All of these budgets are down, yet all of you are

presenting new projects. Special Ops is down 38 percent, and I

trust you are happy with that. Tricare is down 20 percent, the education 22 percent, and defense logistics 17 percent, and I must say,

I am just a little puzzled by the presentations, because you are so

eagerly presenting new projects, and yet overall your budgets are

down dramatically, but if that is the way you want it, that is the

way you want it.

Mr. Molino.

STATEMENT OF JOHN M. MOLINO

Mr. MOLINO. Thank you, Madam Chair. Madam Chair, Senator

Hutchison, I will limit my oral comments and respectfully thank
41

you for making my complete statement part of the record. Thank

you for the opportunity to testify this afternoon on the military construction program for the DOD education activity, a very important

element of the Department’s quality of life program.

The Department’s leadership considers itself a part of a compact

with the members of the military and their families. In response

to the continued outstanding performance of our highly qualified

troops and the unwavering support of their families, DOD is

obliged to underwrite that portion of the military child’s education

delivered by DOD in this, the twelfth largest American school district, and certainly the most widely dispersed.

And how have these young students responded? In recent national testing, the DOD Education Activity was ranked among the

top five in the Nation, scoring above the national average at every

grade tested and in every subject area tested. Indeed, we were at

the top of the rankings among African American and Hispanic students. The results prompted one national newspaper to call the

DOD system the best-kept secret in Washington, and Secretary of

Education Rodney Paige told an audience to look to the Defense

Department to find America’s best education success story.

This success is the product of hard work by the students, active

involvement by the parents and the teachers, concerned oversight

by the Department, and unwavering, strong support by the Congress, particularly this subcommittee. Thank you for the leadership

you provide in this regard.

When I last appeared before this subcommittee, I had been in

this position only a matter of weeks. Since then, I have had the

privilege of traveling to the Pacific and to Europe to see first-hand

the dedicated men and women who teach in our schools, the enthusiastic students who thrive in diverse environments, and the parents who serve on active duty or as members of the military family.

You know better than I that visits of this nature are informative

at least and, more often than not, inspirational, whether we consider school construction, child development centers, fitness facilities, or any of the other areas within my purview. It is a privilege

to serve in this position, to serve the men and women in uniform,

and to serve the interest of their families.

PREPARED STATEMENT

Thank you again for the opportunity to testify, and I am happy

to entertain any questions you may have.

[The statement follows:]

PREPARED STATEMENT OF JOHN M. MOLINO

Madam Chairwoman and members of the Committee, it is an honor to appear before you today to discuss the status of a key component of our quality of life program, the Department of Defense Education Activity’s (DODEA) military construction program. Military members and their families make sacrifices in the service of

our country and face special challenges. We must forge a new social compact with

them and recognize the reciprocal ties that bind Service members, families and the

military mission. The Department has made a renewed commitment to underwrite

family support programs, to provide quality education, to support affordable, available child care and to encourage quality fitness programs. Quality schools, along

with other facilities such as first-rate child development and fitness centers are critical to our commitment to uphold the quality of life of Service members and families

in order to attract and retain the best.
42

I will begin my testimony by referring to the DODEA program. This Committee

has a long-standing tradition of advocacy for DODEA’s programs. You recognize, as

do we, the critical necessity and value of providing a first-rate educational program

for the children of our Service men and women. Quality education remains a central

quality of life issue for our military and supports the President’s initiative to ensure

that no child is left behind.

The quality of DOD schools is measured in many ways, but most importantly, as

in other school systems, by student performance. DOD students regularly score significantly above the national average in every subject area at every grade level on

nationally standardized tests.

In addition, students participate in the National Assessment of Educational Process (NAEP) tests. NAEP is known as ‘‘the Nation’s Report Card’’ because it is the

only instrument that permits a direct comparison of student performance between

student groups across the country. DODEA students, and in particular its AfricanAmerican and Hispanic students, score exceptionally well on this test, often achieving a first or second place national rank. This outstanding performance led the National Education Goals Panel to commission Vanderbilt University to study the instructional program, teaching, and other aspects of DODEA schooling to identify the

variables that contribute to the students’ success. The findings, which were published in October 2001, received extensive national coverage. Secretary of Education

Paige has noted that DOD schools can take a diverse, highly mobile group of students and do so well on national tests because we set high standards, demand accountability and encourage parental involvement.

Providing modern, well-equipped educational facilities is vital to the educational

process itself. Research shows that students in well-maintained environments outperform those who attend neglected, poorly maintained schools. DODEA serves

106,187 students in 223 schools in 14 countries, 7 states, one Commonwealth and

one Territory, with a total facility inventory of over $3.2 billion. Sixty-three percent

of our schools are over 30 years old, and many are housed in former barracks or

administrative buildings, not built to be educational facilities. The changing educational curriculum, increasing use of technology in the classroom, and rising expectations of the military community make the state of the facilities more and more

important to the education process.

DODEA is aggressively addressing outdated infrastructure through the replacement or upgrade of the schools in the worst condition. In the past 3 years, we have

programmed construction totaling over $189 million, including $75.9 million in additions and renovations to existing facilities, $62.6 million for the replacement of older

schools, $45.6 million for construction of new schools, and $5.2 million in minor construction. This includes funding to support a worldwide implementation of new educational programs: full-day kindergarten and reduced pupil-teacher ratios in the

first three grades. Both of these initiatives enjoy the strong support of our military

stakeholders. For the future, we have focused our efforts to identify those schools

that are in the most urgent need of repair or replacement and have programmed

Military Construction projects where necessary to address those needs.

The fiscal year 2003 military construction budget before you now includes $54.7

million in major construction for DODEA and $6.3 million to pay for the new requirements associated with force protection and antiterrorism initiatives. This additional funding will enable DODEA to comply with the new DOD antiterrorism construction standards and increase the safety and security of our children and staff.

Last year, with your support, there was $70.3 million in DODEA’s construction

program. I’d like to thank the committee for its consistent support for the educational program. The fiscal year 2003 program includes two of our most sorely

needed projects, the replacement of Berkeley Manor Elementary School, at Camp

Lejeune, North Carolina, and Seoul Middle School, in South Korea. Berkeley Manor

consists of a series of pod style buildings constructed in the 1960s, as well as singlewide trailers. Seoul Middle School is currently housed in facilities built in 1955. It

began operation in school year 2000–2001 in the existing Seoul Elementary and

High School without dedicated specialist classrooms, a gymnasium, and computer

and science labs.

These two projects aside, the fiscal year 2003 budget consists solely of projects to

support full-day kindergarten and reduced pupil-teacher ratios in the first three

grades. These projects are located at Quantico, Virginia; Fort Bragg, North Carolina

(2); Fort Jackson, South Carolina (2); West Point, New York; and five projects in

Europe. This educational program allows DODEA to reduce the pupil-teacher ratios

in the first through third grades from 23:1 to 18:1. The fiscal year 2003 projects will

allow completion of this educational program, one that is very popular with our

Service members and important to the quality of our children’s early education.
43

In addition to improving facilities, we have been working with public school districts and state education authorities to lessen the displacement and trauma experienced by children of military personnel who are forced to change schools frequently

due to the reassignment of military members. Within the last 2 years we have

brought together over 300 students, parents, military leaders, school personnel, and

state policy makers to help address and give visibility to these issues which affect

about 600,000 children of active duty military personnel.

In addition to school initiatives, I’d like to report on a second program—child development. We have made progress in child development during the last 10 years—

progress that would have been impossible without strong congressional support. The

fiscal year 2002 budget was $26 million for four centers. I gladly thank the Congress

for an additional $19 million construction funding in fiscal year 2002. The Department received $43 million under the fiscal year 2001 construction program for construction or expansion of ten child development centers. This was a funding investment of an additional $23 million above the fiscal year 2000 level of $20 million.

The fiscal year 2003 presidential budget request for operations and maintenance funding increases the child care funding by $27 million, or 7 percent. The fiscal year

2003 military construction program contains $11 million for two centers.

The child development program consists of a variety of delivery systems to include

center-based care, in-home care (on and off the installation), school-age care, and resource and referral programs. Although we have child development programs at

over 300 locations with 800 facilities and over 9,000 Family Child Care homes, we

still project a need for an additional 45,000 spaces. We continue to pursue an expansion program for quality, affordable child care through a balanced delivery system

that combines center construction, an increased number of family child care homes,

and partnerships with local communities. We are providing family child care both

on and off the installation, encouraged by subsidies.

The DOD child development program is the largest American employer-sponsored

child care program. Since 99.7 percent of DOD centers have been accredited, compared with less than 10 percent in the civilian sector, the military child development remains a model for the nation.

In support of the war effort, we expanded operating hours. Locations offer aroundthe-clock care, as necessary. Many have reacted to the needs of geographically single

parents by offering special operating hours and instituting projects for children to

communicate with absent parents.

The third program I am reporting on is our fitness centers. Fitness centers consistently rank as the top Morale, Welfare and Recreation program. According to the

1999 DOD Survey of Active Duty Personnel, 80 percent of the respondents said they

use the installation fitness center at least once per month, with 40 percent using

the facility 11 times or more per month. This equates to an average usage of approximately 12 million visits to fitness centers per month.

Over the past 4 years, the Department has received an average of $136 million

annually for fitness and physical training facility construction. This provided the

funding for the construction and major upgrade of 57 facilities. Thirty-four percent

of these were funded as congressional inserts. For fiscal year 2003, the Department

has requested $60.1 million for construction and major upgrades of 7 facilities. We

appreciate the continued recognition by Congress of fitness as an essential part of

military life and an important contributor to force readiness.

The Department has crafted a strategic plan recognizing the contribution provided

by each of these elements. A critical step in achieving the objectives of this strategic

plan is to bring fitness centers, staffs and programs up to a consistent standard of

quality.

The Services have conducted assessments of their programs based on Departmentwide program standards that were developed using industry guidelines. The results

show that 37 percent of installation fitness facilities meet the standards. Clearly,

the Department still has a long way to go to achieve full compliance with these program standards. The support provided to renovate and replace fitness centers enhances both opportunities to improve individual fitness and also the quality of life

of Service members and their families.

Physical fitness contributes to force readiness in numerous ways. It is critical to

providing forces that are more resistant to illness, less prone to injury and the influence of stress, and better able to recover quickly should illness or injury occur. Fitness centers provide a key element, along with unit commanders, physical trainers,

and health promotion specialists, in maintaining the physical performance of Service members.

Thank you for the opportunity to appear before this subcommittee and for your

strong and consistent support of our programs in the past. I look forward to working

with you closely during the coming year.
44

Senator FEINSTEIN. Thank you very much.

Mr. Baillie.

STATEMENT OF FREDERICK N. BAILLIE

Mr. BAILLIE. Thank you, Madam Chairman. With your permission, I will submit my prepared statement for the record and proceed with a very short oral summary.

Madam Chairman, Senator Hutchison, the Defense Logistics

Agency’s (DLA) fiscal year 2003 Military Construction request is

$142 million for 10 projects. As in previous years, we continue our

emphasis on sustaining and enhancing the Department’s fuel storage and distribution infrastructure. Through your support, our program to rebuild America’s strategic airlift and refueling capability

is on schedule. We expect to program the last project in fiscal year

2005. In fact, more than 58 percent of these projects are already

operational or under construction.

This year’s request includes four projects at $81 million to support strategic mobility at several critical military installations. At

three other critical military installations that provide vital links for

the flow of deploying forces and logistics, we request $41 million to

improve fuel storage and distribution systems. Equally important

to us is our need to safeguard the environment and eliminate current environmental hazards associated with fuel storage.

At the Naval Air Station Joint Reserve Base in New Orleans,

Louisiana, we propose to replace seven 45-year-old underground

fuel tanks with three above-ground tanks for $9.5 million.

At DLA’s Supply Center in Richmond, Virginia, we propose to

modernize a 60-year-old command headquarters building for $5.5

million to make it accessible to our disabled employees and visitors,

and to replace substandard electrical and fire protection systems.

Finally, at our Supply Center in Columbus, Ohio, we have an opportunity to relocate a physical fitness facility that is in a mostly

vacant World War II warehouse scheduled for demolition. This fitness center is in an isolated part of the installation, more than 1

mile from the vast majority of users. Our $5 million project locates

a new facility in the hub of the center’s activities. This fitness facility will vastly improve the quality of life for more than 2,300 active

duty military, reserve, and National Guard service members.

In summary, our military construction program supports the

DLA vision to be America’s Premier Logistics Combat Support

Agency by providing vital facilities that enhance our military services’ war fighting capabilities.

PREPARED STATEMENT

Madam Chairman, this concludes my oral statement. Thank you

for asking me to appear today, and I will be pleased to answer

questions at your convenience.

[The statement follows:]

PREPARED STATEMENT OF FEDERICK N. BAILLIE

Madam Chairman, and Members of the Subcommittee: I am Frederick N. Baillie,

Executive Director of Business Management, Logistics Operations, at the Defense

Logistics Agency (DLA). I am pleased to have the opportunity to provide information

about DLA’s fiscal year 2003 Military Construction (MILCON) request.
45

MILITARY CONSTRUCTION REQUEST

The Defense Logistics Agency requests $142.0 million for its fiscal year 2003

MILCON program. This program consists of 10 projects that will enhance strategic

airlift en route fueling capability, increase mission responsiveness, reduce environmental hazards, and improve facility readiness at our activities in support of the

Agency’s missions. This request includes:

—$122.0 million to replace deteriorated, obsolete hydrant fuel systems and fuel

storage tanks, or provide new systems, at seven critical Air Force and Navy installations.

—$9.5 million to provide aboveground fuel storage tanks to eliminate potential environmental hazards associated with deteriorated underground tanks at a naval

air station joint reserve base.

—$5.5 million to modernize an installation headquarters building at DLA’s Defense Supply Center Richmond, Virginia, to provide accessibility for disabled

employees and visitors and to meet current life-safety and fire protection codes.

—$5.0 million to replace a physical fitness facility currently in a converted World

War II warehouse at the Defense Supply Center Columbus, Ohio, so this mostly

vacant building may be demolished.

FUEL FACILITIES INFRASTRUCTURE

In fiscal year 1996, DLA assumed new responsibilities for programming fuel-related MILCON projects for bulk and intermediate fuel storage and hydrant fuel systems at the Services’ installations. The Agency places a high priority on sustaining

and enhancing the Department’s fuel distribution, storage, and handling infrastructure. This year, our requested funding of critical fuel facilities improvements

amounts to 93 percent of our total military construction program. This level of funding reflects the priorities of the Joint Chiefs of Staff to provide critical fuels infrastructure to support strategic airlift en route mobility and correct environmental deficiencies at defense fuel support points.

STRATEGIC AIRLIFT EN ROUTE FUEL INFRASTRUCTURE

Our proposed investment to replace old and deteriorated hydrant fuel systems, or

provide new bulk fuel storage tanks at critical overseas bases, is $81.0 million.

These projects all support strategic en route mobility requirements. Because of past

congressional support, our program to rebuild America’s strategic en route fuel infrastructure is on schedule to complete programming in fiscal year 2005. More than

58 percent of these projects are already operational or under construction.

At Andersen Air Force Base (AFB), Guam, we will replace an existing hydrant

fuel system for wide-bodied aircraft supporting strategic airlift en route mobility requirements in the Pacific with a modern, pressurized fuel hydrant system of 11 outlets for $17.6 million. This project DRAFT provides the last of four hydrant systems

needed to meet a total requirement of 67 hydrant outlets. Currently, the base operates a 45-year-old hydrant system that is failing and cannot support peacetime missions or strategic airlift en route mobility requirements in contingency or wartime

operations. As with other obsolete hydrant systems elsewhere, repair parts are no

longer commercially available and must be salvaged from other similar systems or

individually fabricated. In addition, the underground piping system lacks cathodic

(corrosion) protection. The new hydrant system will include features to protect it

from the corrosive marine environment and will employ a leak detection system.

The existing hydrant system will be demolished.

At RAF Fairford, United Kingdom, we propose to replace four 45-year-old hydrant

systems with a new 15-outlet system for wide-bodied aircraft and provide fuel truck

fillstands and support facilities. This project will cost $17.0 million. A precautionary

prefinancing statement for the future recoupment of funds from the NATO Security

Investment Program is being submitted to NATO.

A bulk fuel storage project for $23.0 million at Yokota Air Base, Japan, will provide two 100,000-barrel (15,900 kL) fuel tanks and supporting facilities for additional fuel storage capacity for strategic airlift en route refueling and force projection in the Pacific. At this location, there is insufficient on-site storage capacity to

satisfy the projected fuel demand during a contingency. This project is ineligible for

funding consideration by the Japanese Facilities Improvement Program. This is the

second of two projects to provide a total of 300,000 barrels DRAFT (47,700 kl) of

additional storage capacity at this site. The first project for one 100,000-barrel tank,

approved in the fiscal year 2002 DLA MILCON program, will be constructed this

year.
46

At the Naval Station, Rota, Spain, we will construct a 16-outlet hydrant fuel system for $23.4 million to support the strategic airlift en route mobility of peacetime

and contingency operations in Europe, Southwest Asia, and Africa. This project is

part of a larger Air Force initiative to expand airfield aprons and aircraft support

facilities for wide-bodied aircraft passing through Rota. Congress approved the aircraft-support-facilities project in fiscal year 2001. The apron work will be programmed in the Air Force’s MILCON programs in fiscal years 2003 and 2004.

OTHER CRITICAL FUEL INFRASTRUCTURE

Though not designated as strategic airlift en route bases, per se, several critical

military installations support the strategic airlift mobility mission by providing vital

links for the flow of deploying forces and logistics. At three of these locations, we

propose to invest $41.0 million to improve fuel infrastructure to meet current operational requirements.

At Travis Air Force Base (AFB), California, aging fuel storage tanks and supporting facilities will be replaced for $16.0 million. Two 100,000-barrel (15,900 kL)

fuel storage tanks will be constructed to meet the base’s required fuel storage demand. These tanks will replace two aging tanks of only 55,000-barrels total capacity.

In the Azores at Lajes Field, we will provide a nine-outlet hydrant fuel system

for $19.0 million to replace an old hydrant system that had been taken out of service

due to DRAFT environmental concerns and interference with airfield communications and operations. This base provides essential support for Expeditionary Air

Force deployments as well as ground and in-flight refueling of aircraft transiting the

Atlantic Ocean. The base has had a pivotal role in supporting Operation Enduring

Freedom.

The two naval fuel piers in Guam under the Commander, Naval Forces Marianas,

are an essential element of the strategic infrastructure in the Pacific since these fuel

systems receive and transfer bulk fuels to Andersen Air Force Base and naval vessels in this region. The current method of unloading fuel from ships by using hoses,

cranes, and several workers is time and manpower intensive. We propose to install

six marine fuel loading arms on these piers for $6.0 million to improve efficiency

and reduce the potential for environmental accidents in handling fuel hoses. These

mechanical loading arms will be the same as commercial systems that are now a

standard fuel-handling feature on fuel piers in the United States.

ENVIRONMENTAL STEWARDSHIP

At the Naval Air Station Joint Reserve Base New Orleans, Louisiana, we need

to replace seven 45-year-old underground fuel storage tanks that no longer comply

with Federal and State underground storage tank regulations. One of these tanks

has already been taken out of service because of a fuel leak. To meet current fuel

storage requirements at this base, we plan to construct three 12,000-barrel (1,908

kL) aboveground tanks and fuel support facilities for $9.5 million.

SUPPLY CENTER INVESTMENTS

At DLA’s Defense Supply Center Richmond, Virginia, we need to modernize the

interior of a command headquarters building to comply with requirements of the

Americans with Disabilities Act (ADA) and life-safety and fire protection standards.

Currently, disabled employees and visitors do not have direct access to the commander’s office or the Center’s primary conference facilities. In addition, restrooms

are not ADA compliant. This $5.5 million project will provide this essential accessibility and replace substandard electrical, mechanical, and fire protection systems

with ones that conform to current building codes and standards.

At the Defense Supply Center Columbus (DSCC), Ohio, we propose to replace an

old, existing physical fitness facility for $5.0 million. The existing facility occupies

approximately 34,000 square feet (SF) of a mostly vacant 288,000 SF World War

II warehouse. This warehouse and several other unused warehouses in the western

part of the installation are planned for demolition as part of a program to reduce

infrastructure sustainment costs. Construction of new administrative buildings in

the 1990s in the eastern section of the base and the reduction of depot-operations

personnel have resulted in the existing fitness facility now being in an isolated section of the installation, more than one mile from the vast majority of the employee

population. Relocating this fitness facility within the campus of administrative

buildings at DSCC will make it more accessible to employees and enhance DLA’s

workplace quality of life objectives. This facility will support more than 2,300 activeduty military, Reserve, and National Guard personnel.
47

SUMMARY

DLA’s fiscal year 2003 MILCON request reflects our efforts to support military

readiness, protect the environment, and provide safe and adequate working conditions for our military and civilian work force. Eight of the ten proposed projects provide vital fuel facilities to support the Services’ warfighting requirements. The remaining two projects are needed to provide an accessible, quality working environment to attract and retain DLA’s most valuable resource—its employees.

Thank you, Madam Chairman, for this opportunity to present our fiscal year 2003

Military Construction program.

Senator FEINSTEIN. Thanks very much, Mr. Baillie.

Let me begin with you, General Tangney. Was your projected request approved as submitted to OSD, or was it reduced by the Pentagon?

General TANGNEY. Our budget request in fact was plussed-up by

OSD for 2003 in the operational and readiness accounts. Military

construction was what we requested.

DEPARTMENT OF DEFENSE EDUCATION ACTIVITY

Senator FEINSTEIN. All right. Mr. Molino, as I understand it, as

part of the efficient basing initiative in Italy the DOD Education

Activity is expected to receive approximately 340 additional students. Is it true that the construction project is not in the program

at this time, but you will need additional classrooms, a gymnasium,

storage, administrative facilities, and additions to administrative

facilities?

Mr. MOLINO. Madam Chair, that is true in the case you cite. It

is also true in several other cases that services are considering as

part of their restationing moving units around and centralizing

their locations. Some of these programs are, in fact, in the longterm program but will not be ready by any means should the services decide to go forward with these plans.

Guam is a good example, for instance. We have two schools, an

elementary/middle school and a high school. Only one school, the

high school is in the program for fiscal year 2006. But if the Navy

does restation the submarines to Guam as they plan, it will make

worse a need that currently exists, and not only that, but it will

make it immediate.

Senator FEINSTEIN. Well, let me ask this question, then. How are

you going to take care of the cost of these projects, and when will

they be requested?

Mr. MOLINO. We are working, in fact, have been working last

week and this week with the Comptroller to do everything possible

to take those programs that are in the FYDP and move them to

the left, if you will, get to them sooner, get to them in 2003, if possible, 2004 by all means, in order to meet the needs.

Senator FEINSTEIN. But you will not get to them within the confines of this budget.

Mr. MOLINO. That is absolutely correct. What will happen then

is, it will increase class sizes, it will require us to take facilities,

for instance a lunch room, and turn it into something else. We will

move temporary classrooms in by way of single wide trailers. In

other cases we will actually be adding single wide trailers to locations where we already have single wide trailers, in order to accommodate the burgeoning population.
48

Senator FEINSTEIN. Thank you. I am puzzled, General Tangney,

because in your prepared testimony you note that the level of

MILCON funding is below the minimum needed to meet your longterm requirements for replacing and renovating aging facilities,

satisfying space deficits, constructing facilities for new missions,

and yet you say that your budget was actually plussed-up. How

could that be?

General TANGNEY. Not on the military construction side. The

budgetary guidance given to the services by the Department was

to use fiscal year 2002 as a baseline of departure adjusted for inflation when we put together our mini-POM or POM 2003 to 2007.

When we did that, we had a very, very constrained amount of dollars, readiness, O&M, MILCON not the least.

Given the budgetary situation that we are looking at, we asked for the program which is presented, which is $63.1 million, recognizing that there were other projects that we would like to have

funded, but we could not fund, given the impact on readiness and

the POM. When we put our POM together, we actually had to

unfund our flying hour program by approximately 15 percent. We

were facing a service life extension on our Air Force rotary wing

helicopters, which we could not afford. That was not in the program due to the slip on V–22, and we had a number of other shortfalls, so when we went into the POM build process the Department

plussed us up to rectify those shortfalls.

They gave us back the money for the flying hour program we

were forced to reduce, they gave us the money to extend our Air

Force helicopters, so in that sense, yes, we received a plus-up, but

in the MILCON side of the house we still remain constrained, because of the overall number of dollars available and other competing priorities to the program which is under discussion today.

Senator FEINSTEIN. I see. Thank you.

Senator Hutchison.

Senator HUTCHISON. Thank you, Madam Chairman.

TRICARE MANGEMENT ACTIVITY

General Randolph, you now have the over-65 included in Tricare

for Life, and the military has always said that it is more efficient

to treat veterans and retirees at military facilities rather than in

a Tricare situation, and the active duty as well, I suppose. My

question is, you do have, I think, a modest number of new hospitals

to be constructed, or clinics. Are you doing enough to meet this

huge added demand that you have?

General RANDOLPH. Senator, thanks for the question. In fact, it

is very similar to the one you asked me last year. I would like to

answer that and then make a comment from the chairperson’s comments also, if that is all right. I do believe that we are adequately

managing Tricare for Life at this time, and this is why. There are

two parts to your question. Tricare for Life, the way it was designed, it was not designed primarily to have care given in our facilities.

It has taken a while for those of us who work in those facilities

to really realize that, quite frankly, but in fact Tricare for Life was

designed to take the patients who were age 65 or over and were

already in stable situations with providers. Why? Because they
49

could not get care in our facilities, and they paid Medicare, a Medicare premium, and in fact when they went to see their provider the

Medicare bill was paid after the forms went forward, and then they

received a bill for a copay of some sort, and out of that came the

medigap policies that I know you are very familiar with.

Tricare for Life was done in such a way that once Medicare has

paid, there is an immediate and automatic cross-over to Tricare for

the remaining bill, and that is now being paid by Tricare. So the

out-of-pocket costs for that age 65 and over beneficiary is normally

zero, so most are very happy where they are at this particular

time.

The second part of your question, though, is, would it not be

great to have our folks in our facilities? It is cheaper.

Senator HUTCHISON. They like it better.

General RANDOLPH. I am glad you said that. Tricare Plus is our

vehicle to begin winning some of the people who have been very

settled in their previous age 65 and over situation with our situation. That is a local facility program. So each facility will have a

different way of looking at that and it is based on their individual

capacity. So far it has been my experience in looking at our data

that most facilities have that capability.

This allows patients age 65 and over who were already—this is

primarily already being seen in our facility because of graduate

medical education, because they were being seen by the local cardiologists in the facilities. If for some reason they were already in our

facility, it allowed them an opportunity to remain within our facility. That has been a very popular program also. So we are balancing the two as we are trying to make sure that we fill our capacity with those who would like to come back from the Tricare for

Life into our facilities where they are happy to do that.

But obviously, once someone is pretty happy in a stable medical

condition, they kind of like staying where they are. So that is going

to be a hard sell.

Senator HUTCHISON. Well, let me ask you this, because most

military retirees that I talk to would prefer to be treated in a military facility, but many of them have to travel so far that they just

cannot do it.

In my home State, many people in South Texas would like to

have a hospital, but they have to go to San Antonio, but if you upgraded the clinic there, that would help them a lot, so I am asking

if you have enough capacity to serve the people that want to be in

a military facility, and is your expansion program too modest, because I know a number of areas of the country, not just Texas but

in other areas of the country, I hear the same thing, so should you

be looking at more clinics and hospitals, and not relying on the

Tricare out-sourcing if it is more efficient to do it in military facilities?

General RANDOLPH. Yes, ma’am, that is a great question, and it

is a little different from the way I interpreted the question.

First, the capacity does exist within a great majority of our facilities now, but as you mention, there are some folks who cannot get

there from here. Should we, in fact, be looking at facilities in other

places, smaller ones that can do the primary care? The answer is

that we are doing that. We are looking at that.
50

We have for the first time an overarching committee now that is

Tri Service and oversees the steering committee. We now also have

a strategic plan, something last year I could not have told you, and

that is one of the key things we are looking at now, is basing.

Where should they be? Where should Wilford Hall be, for instance.

That kind of thing, so we are looking at it from the major medical

center down to the clinic. Are they in the right places? If they are

not, what can we do to move them to the right places?

Senator HUTCHISON. You are certainly not thinking of moving

Wilford Hall?

General RANDOLPH. No, ma’am. That is the Air Force Flagship,

if you will. So the short answer to your question is, yes indeed we

are looking at that in the long range plan of the committee. Each

of the services is also looking at that individually. By the way, and

if I may, I would like to give you a little bit of a spin on the budget

for medical MILCON. It is, in fact, less as you pointed out. I believe our budget last year was around $225 million, something like

that, certainly more than now.

As you may know, each one of the five line items I mentioned

today are mid-1950’s or earlier facilities. Last year, the great majority of those projects were mid-1950’s or earlier. Now, we are getting to a point where we are actually getting into the sixties with

some of our facilities, and those still are amenable to a fair amount

of restoration and sustainment, and perhaps modernization. So

what we have done, instead of spending as much or requesting as

much as we had last year for construction, we have increased the

amount that we are using for sustainment, restoration, and modernization, approaching perhaps 3 percent now, as opposed to the

21⁄2 or so percent 2 years ago.

Senator HUTCHISON. Thank you.

Senator FEINSTEIN. Well, thank you very much, gentlemen. We

appreciate it. We are delighted you are all happy with the cuts in

your budget.

Senator HUTCHISON. There was one other question I had of Mr.

Molino, and that was, I appreciate the job that you are doing in

education, but my question to you is more global, I guess. Is it

more efficient for the Department to continue to operate school districts, or should we be looking at turning over the DOD schools to

contiguous school districts?

Mr. MOLINO. Senator, I assume you are talking domestically and

not overseas.

Senator HUTCHISON. Yes, I am.

Mr. MOLINO. In fact, that is a question that I asked when I first

came to the job. It is a question the Secretary has asked us to consider as part of the litany of asking hard questions even though we

may be uncomfortable with the process that yields to an eventual

answer. I have been asked that question by a colleague of yours in

the other body about the West Point Elementary and Middle

School, for example.

What we have at West Point, and I think that is a good example

to explain where we are going, what we have at West Point is an

excellent elementary school and middle school run by the Department of Defense on the property. When the students graduate and

move to high school, they go to the local high school in the High-
51

land Falls Fort Montgomery School District, which is just outside

the gate. I visited those schools. In fact, I visited them last Friday.

What I found outside the gate were very good elementary, middle, and high schools run by very qualified people with very good

programs, and so the question then is, for educational reasons, can

I justify maintaining a DOD school at West Point, and the answer

is, in the considered opinion of the experts, the educators who were

traveling with me, that for educational reasons we cannot, because

there is not a dichotomy between the quality of education. The kids

outside the gate are getting a very good education.

The next question is, can you justify it fiscally, and that is what

we are looking at right now. New York may be a peculiar situation,

but I understand we have other arrangements around the country.

Eight percent of the land that is encompassed by the school district

outside the gate of West Point is taxable property. They run their

school district on 8 percent of the land being taxed. Ninety-two percent of the land is untaxable, because it is either Federal or State

land, so currently, we pay tuition for the high school students that

go out, nearly $2 million a year for tuition and transportation.

There are roughly seven times as many middel and elementary

school students as there are high schoolers. I do not know if we can

afford to pay tuition for them, and that is what I am looking at

right now to see if fiscally it makes sense.

A third aspect is, any time you do a change like this, it is vitally

important that the community is well-educated about what we are

going to do, or what we are considering, and they become supportive. At this point I can tell you that just from my asking questions to various people while at West Point, I do not sense a great

deal of support in the West Point community to make that kind of

a transfer.

There is a perception once you leave the DOD school you are

going into a bad school system. That is not the case outside the

gate at West Point. It is an excellent school system, performing

well above the national average, but there is still that perception,

and we will have to do that if we decide that fiscally it is the responsible thing to do.

Senator HUTCHISON. Well, I think that is the right assessment

criteria. You have to assure that the quality of education would be

the same if you moved out, but there is a situation in San Antonio

where the infrastructure in the DOD school system has been way

behind, and it is leaking roofs, it is asbestos, it is a lot of infrastructure problems, so you just have to ask the question, with very

good schools contiguous to the base, are you better off staying with

the investment in infrastructure on the base, or are you better off

fiscally going outside, and I guess in some cases the quality of education would not be comparable. In this case, I am sure it would

be.

Mr. MOLINO. There are some examples within the United States,

Senator, where the quality of education would not be comparable.

We also have situations, and West Point would actually be in this

situation, where the capacity does not exist outside the gate to

house these students, so what would likely happen if we went to

the next step, just hypothetically what would likely happen is, the

school district would want to teach those children in the current
52

buildings, but they would certainly require that they be brought up

to whatever State standards might exist.

We have a reprogramming that your subcommittee approved

that we are hopeful that the HAC will approve as well to try to

build a gymnasium at the West Point Elementary School if that

school stays DOD. If that school goes to the West Point School District, or the school district outside the gate, there is a dire need for

that gymnasium at the elementary school regardless of the situation, and what happens sometimes if you transfer, you then move

some of these costs you have spread out over the years. They become immediately bills that are due because the school district will

not accept a building unless you do them immediately, and so

again the fiscal concern.

Senator HUTCHISON. Are you doing major work at all of the DOD

school districts to determine if it is a fiscally responsible thing to

not offer the DOD school district and go into the community and

reimburse the community, obviously, versus just leaving it the way

it is.

Mr. MOLINO. I do not know how you would describe the major

study. After my visit to West Point I have concluded that we do

need to look at the situation. We have been directed by

Congress——

Senator HUTCHISON. This is throughout the system?

Mr. MOLINO. Yes, ma’am. We have been directed in the past by

Congress to do such a study, and have done a number over time.

What I have found in just reviewing the results of those studies is,

they come up with a gross conclusions and I do not see individual

schools being looked at and decided on an individual basis. Whatever we do in the future, we need to do that.

Senator HUTCHISON. Do you need to be directed by Congress to

do such a study, even if you, say, look at each individual school,

and the first criteria would be, would you get a comparable education outside, then the second criteria would be, is it fiscally more

efficient? Would you need language from Congress to direct you to

do such a study, or would you be willing to commit to doing it on

your own?

Mr. MOLINO. I think the answer is yes to both. I am determined

to do the study and to direct that we put our resources to do that,

but I would certainly not object if the Congress asked or directed

that we do such a study.

Senator HUTCHISON. Thank you.

Senator FEINSTEIN. Just to add, I think it is extraordinarily important that it be done school by school. I do not think you can generalize. Some school districts are good, some are not good. I mean,

that is just an unsavory fact of life in our country. I would kind

of hope you would do this without legislation, because I think it is

very hard to get a study that covers the entire United States that

is really going to give you the kind of results that you can depend

on.

Mr. MOLINO. Yes, Madam Chair, I agree with you, and that is

one of the shortcomings I found. We look at the system, and we

reach a gross conclusion, but we do not get into the eaches, and I

think it is necessary in this instance to get into the eaches.
53

ADDITIONAL COMMITTEE QUESTIONS

Senator FEINSTEIN. Thank you very much, gentlemen. We appreciate your testimony, and the fact that you are all very happy with

cuts in your budgets. It is a first for me. In my budget years when

I was mayor of San Francisco it never happened that way. Thank

you very much.

[The following questions were not asked at the hearing, but were

submitted to the Defense Agencies for response subsequent to the

hearing:]

QUESTIONS SUBMITTED TO GENERAL WILLIAM TANGNEY

QUESTIONS SUBMITTED BY SENATOR DIANNE FEINSTEIN

ENCROACHMENT ISSUES/CORONADO

Question. General Tangney, How has encroachment at the training beaches at

Coronado, California affected the training capabilities of the Navy SEAL Teams at

Coronado, and what are you doing to ensure that these key military personnel are

able to achieve the training they need?

Answer. Environmental encroachment at Coronado, California beaches may

present increased obstacles to Navy SEAL training at that location in the future.

The exact impact of encroachment and environmental issues are currently under review by the U.S. SOCOM Range Tiger Team, which is conducting an in-depth strategic study into all range issues impacting the training and readiness of special

forces worldwide. The outcomes and findings of this extensive effort will be forwarded when finalized. The Tiger Team has implemented an effective methodology

and quality control to ensure depth and scope of information, minimize bias, and

involve personnel at each level for an ‘‘all angles’’ perspective.

The Naval Special Warfare Command continues to maintain the highest standards of training and readiness under the current constraints. Our professional

Naval officers and non-commissioned officers using innovative training and leadership skills have managed to perform work-arounds at all levels and ensure the highest level of SEAL training in spite of encroachment impediments. Most importantly,

the findings and analysis of the Tiger Team will provide a tool to better identify

and anticipate the future impact of encroachment on readiness and national security.

Question. Do you have any requests for land acquisition in the Future Years Defense Plan for training sites in the Coronado area?

Answer. No.

QUESTIONS SUBMITTED TO MAJOR GENERAL LEONARD RANDOLPH, JR.

QUESTIONS SUBMITTED BY SENATOR DIANNE FEINSTEIN

DECREASE IN CONSTRUCTION APPROPRIATIONS REQUESTS

Question. General Randolph, your budget this year is about 20 percent less ($204

million in fiscal year 2002—$164 million in fiscal year 2003) than last year’s request.

Realizing that many of your projects are high dollar, phased projects, how does

a 20 percent decrease in construction appropriations requests affect your long-term

program?

Answer. The fiscal year 2003 President’s Budget is actually more in line with our

budget requests for fiscal year 2000 and fiscal year 2001. The anomaly is fiscal year

2002 when the President’s Amended Budget increased the entire Defense budget,

medical construction program included. The medical program through the Department’s Future Years Defense Program (FYDP) is closer to the fiscal year 2001 budget with inflation.

PLANNING & DESIGN FUNDS

Question. General Randolph, You have requested $14 million in planning and design funds this year, but, if I am correct, you also have a planning and design backlog.
54

What is the amount of that backlog and should that requirement be addressed

this fiscal year? Answer. We do not have a planning and design backlog. The $14 million we have

requested in fiscal year 2003 will adequately support the planned expenditures required to ensure that the medical program stays on track and that requested

projects meet the Congressionally imposed milestone of 35 percent design by January 1 of the preceding budget year.

QUESTIONS SUBMITTED BY SENATOR KAY BAILEY HUTCHISON

HOSPITAL PROJECTS OVERSEAS

Question. General Randolph, almost half of your 2003 budget request is for two hospital projects overseas—in Italy and Germany—about $81 million. Last year we

provided funding for hospital/clinic replacement projects in Greenland, Germany

and Portugal.

I know from my travels around the country the sad state of some of our domestic

military clinics and hospitals. How are priorities established and why the continuing

focus on overseas?

Answer. The prioritization depends upon the mission of the hospital, its physical

condition, functionality of existing spaces, compliance with the national fire and life

safety codes, Joint Commission Accreditation on Healthcare Organizations standards and the facility requirements to deliver healthcare efficiently and cost-effectively. Our goal is not to balance our request on a CONUS/OCONUS basis but to

request the replacement or modernization of our most needed medical facilities each

year.

DOMESTIC MEDICAL PROJECTS

Question. General Randolph, are you deferring domestic medical projects because

of the 2005 round of brac?

Answer. No medical construction projects have been deferred because of a pending

round of BRAC in fiscal year 2005. Our mission is to ensure medical readiness and

to provide for the healthcare needs of our eligible beneficiary population. The

projects in this budget request support that mission.

QUESTIONS SUBMITTED TO JOHN M. MOLINO

QUESTIONS SUBMITTED BY SENATOR KAY BAILEY HUTCHISON

GYM PROJECT

Question. Mr. Molino, I understand that the request to add a gym to the west

point elementary schools is ‘‘on hold.’’ I also understand the department is studying

whether the two DOD schools at West Point should be turned over to the local

school district. Can you provide the subcommittee an update on the gym situation,

why is this project so important, and what is the current situation?

Answer. The project is important because the current facilities at West Point are

woefully inadequate. The middle school presently offers physical education classes

in a gymnasium that was constructed in 1934. The gym is not handicap-accessible

and is unsuited for this or any school’s physical education (PE) program due to obstructions, low ceilings, poor lighting, and no seating. The elementary school presently offers physical education classes in a multipurpose room that also serves as

the school cafeteria. As a result, PE programs are curtailed due to the time required

to set up and take down tables for breakfast and lunch. Because of limited storage

space at the elementary school, food service and other school equipment are stored

in the multipurpose room around the play court creating a dangerous environment

for the small children running and playing there. Additionally, the Elementary

School Occupational/Physical Therapy Program is offered in a makeshift classroom

at the back of the multipurpose room stage. The stage is cluttered with desks,

chairs, and teaching equipment, and doesn’t leave enough space for the mobility instruction requirements of this program. The area used is also not accessible to the

physically challenged. Heating for this area is not available except with space heaters, and the stage curtain is the only thing that separates this area and the multipurpose room that houses the PE and food services programs.

In June 2001 a reprogramming request was sent by the Department of Defense

Education Activity (DODEA) to the Office of the Under Secretary of Defense (Comptroller) Directorate of Construction, requesting the use of fiscal year 1999 MILCON
55

funds from another DODEA MILCON project to fund the balance required for the

West Point gym project and other critical needs. Following a revision requested by

the Comptroller’s Directorate of Construction, it was submitted and in September

2001 the Senate Appropriations Committee approved the reprogramming request.

The House Appropriations Committee (HAC) deferred its decision on the DODEA

reprogramming request until a later date. On January 24, 2002, the Chairman of

the House Subcommittee on Military Construction approved most of the reprogramming request, but not the part of the request for the West Point gym project.

On February 14, 2002, New York District Corps of Engineers extended the current bids for another 60 days. On March 20, 2002, Deputy Assistant Secretary of

Defense (Military Community and Family Policy) met with the Chairman of the

HAC Military Construction Subcommittee. On March 21, 2002, DOD received the

HAC approval for the reprogramming action.

OVERSEAS DOD SCHOOLS

Question. Mr. Molino, over the past several years, the department has expanded

its overseas bases to several new locations, such as Larrisa, Greece, and Vicenza,

Italy. How do we ensure that we have Department of Defense schools in these

places when our service members and their families arrive?

Answer. The Department of Defense Education Activity (DODEA) has been routinely informed of restationing decisions only after a restationing plan has been approved. The Department is working with the Services to ensure that the Under Secretary of Defense for Personnel and Readiness is involved sooner and during the

planning process. In this way, we will be better able to plan for a restationing’s impact on the entire spectrum of quality of life services, including schools, commissaries, exchanges, child development centers, and fitness facilities. Early involvement will also ease funding concerns that always accompany late notifications.

QUESTIONS SUBMITTED TO FREDERICK N. BAILLIE

QUESTIONS SUBMITTED BY SENATOR KAY BAILEY HUTCHISON

STRATEGIC EN-ROUTE FUEL INFRASTRUCTURE PROJECTS

Question. Mr. Baillie, I understand that a signifant portion of your 2003 budget

request is for strategic en-route fuel infrastructure projects. How are those requirements developed and prioritized?

Answer. The Commander-in-Chief (CINC), U.S. Transportation Command, specifies the requirements for fuel infrastructure to support the strategic en route airlift

mission in coordination with the other geographic combatant CINCs. Fuel infrastructure projects are developed from strategic mobility requirements studies to support worldwide operations plans, contingencies, and readiness.

Each year a Defense Logistics Agency (DLA) Fuel Installation Planning and Review Board meets to set priorities for all DLA fuel MILCON projects. This board

consists of representatives of the combatant CINCs’ Joint Petroleum Offices, Joint

Staff J–4, Military Services’ Energy Offices, and DLA’s Defense Energy Support

Center,

EXCESS INFRASTRUCTURE

Question. Mr. Baillie, senior Defense officials have recently testified that the Department has between 20–25 percent excess infrastructure. Does the Defense Logistics Agency have 25 percent more facilities than you currently need?

Answer. With the DOD force structure review not completed yet, it would be premature to speculate whether the Defense Logistics Agency (DLA) has excess infrastructure at this point. While DLA’s infrastructure is a very small percentage of the

Department’s overall inventory, it will be aligned with the pending force structure

review in the next BRAC round to meet mission requirements.

MILCON PROJECTS

Question. Mr. Baillie, are you deferring military construction projects because of

a pending brac round in 2005?

Answer. No, the Defense Logistics Agency has not deferred any projects because

of BRAC 2005 considerations. For the most part, our fiscal year 2003 MILCON program will provide or replace essential fuel storage and distribution facilities requested by the combatant commands and Military Services.

(57)

DEPARTMENT OF THE ARMY

STATEMENT OF HON. MARIO P. FIORI, ASSISTANT SECRETARY OF THE

ARMY (INSTALLATION ENVIRONMENT)

ACCOMPANIED BY:

MAJOR GENERAL ROBERT L. VAN ANTWERP, JR., ASSISTANT

CHIEF OF STAFF FOR INSTALLATION MANAGEMENT

MAJOR GENERAL JAMES R. HELMLY, COMMANDER, 78TH DIVISION

(TRAINING SUPPORT), U.S. ARMY RESERVE

BRIGADIER GENERAL MICHAEL J. SQUIER, DEPUTY DIRECTOR,

ARMY NATIONAL GUARD

Senator FEINSTEIN. Now, the next panel.

Welcome, gentlemen. I am very pleased to welcome the panel,

Hon. Mario Fiori, the Assistant Secretary of the Army for Installations and Environment, Major General Robert Van Antwerp, Assistant Chief of Staff for Installation Management, Major General

James Helmly, United States Army Reserve, and Brigadier General

Michael Squier, Deputy Director, Army National Guard.

Gentlemen, I think you heard my puzzlement over the cuts that

you each have achieved and how you are going to be able to sustain

those cuts and still provide the kind of services and personnel that

you are going to be requested and required to provide, so why don’t

we begin with Dr. Fiori, and perhaps as you put your remarks into

the record you might deal with these very large cuts.

STATEMENT OF HON. MARIO P. FIORI

Dr. FIORI. Thank you, Madam Chairman, Senator Hutchison. I

am pleased to appear before you with Major General Van Antwerp,

Generals Helmly and Squier, to discuss our fiscal year 2003 Military Construction budget. We have provided a detailed written

statement for the record, but I want to comment briefly on the

highlights of our program.

The Army has many challenges in front of it. Our goal is to ensure that all our garrisons throughout the world have an equal and

outstanding level of service for our soldiers and their families. As

I visited selected Army installations, I have observed the progress

that has already been made, and I attribute much of the success

directly to the longstanding support of this committee and your

staff.

The Army’s overall budget request for fiscal year 2003 supports

he Army vision—people, readiness, and transformation—and the

strategic guidance to transform to a full spectrum force while ensuring the war fighting readiness. It reflects a balanced base program that will allow he Army to remain trained and ready

throughout fiscal year 2003 while ensuring we fulfill our critical

role in the global war on terrorism.

Our military construction budget request is $3.2 billion, and will

fund our highest priority facilities and family housing require-
58

ments. In fiscal year 2002 we presented a budget that was a down

payment on our goal to better support our infrastructure. When we

developed this year’s budget, in light of the events that took place

last year, we had some very difficult decisions to make. The need

to fund our military pay raises, Army transformation, OPTEMPO,

the war on terrorism, increases in health care, and other key programs were all included in the decisions leading to our request.

Thus, the Army budget provides the best balance between all of our

programs, including military construction.

A few critical areas in the military construction request include

the Army Transformation at Fort Lewis, Fort Wainwright, and

Fort Polk. We have eight projects for $195 million included in the

program to ensure that the transformation continues to progress as

envisioned by our leadership.

Our Army family housing is a success this year. We are now on

target to eliminate inadequate family housing through construction

or privatization by 2007. Our budget includes $180 million for the

Residential Communities Initiative to continue acquisition and

transition of the 11 installations currently underway, and 7 new installations for a total of 50,000 housing units. RCI is a great success story. I visited Fort Carson on February 25th and am delighted to report that the RCI program there is 3 months ahead of

schedule. There are 338 new units that are occupied, 500 units renovated, and we are getting new units on line at 20 per month, and

40 renovated units per month, for a total of 2,600 units. So in fact

at Fort Carson we will be completed by year 2004.

The combination of privatization and construction will meet our

goal of fixing family housing 3 years earlier than was reported last

year. A portion of our military construction, Army, and our family

housing construction program this year is dedicated to overseas

construction. Seventy-five percent of the overseas military construction request will be used to provide better barracks for almost

3,000 soldiers, mainly in Europe and Korea. We are also constructing new facilities to support the Efficient Basing, East initiative in Germany, which will consolidate 13 smaller installations

into a single installation at Grafenwoehr.

Two projects in our request will finalize the Army’s construction

requirements for Efficient Basing, South initiative in Italy, which

will station a second airborne infantry battalion at Vincenza. Each

project is vital to maintaining a suitable working and living environment for our soldiers and families overseas.

At the end of fiscal year 2003, we will have 106,000 of our permanent party single soldiers, 77 percent of our goal for barracks

modernization will be funded. Our strategic mobility program will

be 100-percent funded. We will have completed all base closures

and realignments, and will concentrate this year on the final

phases of disposal of these properties.

The Army National Guard anticipates that 30 of 32 weapons of

mass destruction/civil support team facilities will be initiated. Our

sustainment, restoration and modernization request is $2.4 billion,

which provides 92 percent of our requirements.

I want to conclude by telling you about one of the most important

initiatives in the facilities area, the way in which The Army manages installations. Last year, the Secretary of the Army approved
59

the concept of centralized installation management through a regional alignment. We will implement this new management structure, called TIM, or transformation of installation management, on

1 October, 2002. A top-down regional alignment creates a corporate

structure with the sole focus on efficient and effective management

of all our installations. It frees up our mission commanders to concentrate on readiness. They will still have an influence on the important installation decisions, but not the day-to-day headaches.

We believe centralized management will also enhance our ability to

integrate the Active and Reserve components, and to develop multifunctional installations to support the evolving transformation

force structure.

In closing, Madam Chairman, I look forward to continuing our

work in taking care of our soldiers and their families. Thank you.

[The statement follows:]

PREPARED STATEMENT OF DR. MARIO P. FIORI

Madam Chairman and members of the subcommittee, it is a pleasure to appear

before you to discuss the Active Army and Reserve Components’ military construction request for fiscal year 2003. This request includes initiatives of considerable importance to America’s Army, as well as this committee, and we appreciate the opportunity to report on them to you.

This budget provides resources in our construction and family housing programs

essential to support The Army’s role in our National Military Strategy. It supports

The Army’s Vision and Transformation strategy.

The program presented herein requests fiscal year 2003 appropriations and authorizations of appropriations of $1,476,521,000 for Military Construction, Army

(MCA); $1,405,620,000 for Army Family Housing (AFH); $101,595,000 for Military

Construction, Army National Guard (MCNG); $58,779,000 for Military Construction,

Army Reserve (MCAR). There is no request this year for the Homeowners Assistance Fund, Defense.

At the turn of the century, The Army published its Vision—People, Readiness,

and Transformation—that defined how we meet the Nation’s military requirements

today and into the future. We started the arduous task of self-transformation that

will allow us to continue to dominate conventional battlefields but also provide the

ability to deter and defeat adversaries who rely on surprise, deception and asymmetric warfare to achieve their objectives.

Army Transformation was already well under way when the attacks on September 11, 2001, provided a new urgency to our efforts. By accelerating Transformation, we will provide additional capabilities to the warfighting CINCs, enabling them to assure allies and friends; dissuade future military competition; deter

any threats; and, if necessary, defeat any adversary.

To meet the challenges of accelerating transformation and carrying out today’s

missions at home and abroad, The Army must sustain a force of high quality, welltrained people; acquire and maintain the right mix of weapons and equipment; and

maintain effective infrastructure and power projection platforms to generate the capabilities necessary to meet our missions. Taking care of soldiers and families is a

readiness issue and will ensure that a trained and qualified soldier and civilian

force will be in place to support the Objective Force and the transformed Army.

As The Army transforms, we must ensure that Army installations are transformed to meet the needs of the force. Army installations, both Active and Reserve

Component, must fully support our war fighting needs, while providing soldiers and

their families with a quality of life that equals that of their peers in civilian communities.

To support the transformation of our installations, the Secretary of the Army has

approved the concept of centralized installation management through a regional

alignment. The implementation date of the new management structure is October

1, 2002.

The regional alignment creates a corporate structure with a sole focus on efficient

and effective management of installations. Mission commanders can concentrate on

readiness but still influence critical issues through the rating chain for Garrison

Commanders and membership on the Installation Board of Directors.
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This approach will ensure standard and equitable delivery of services from installation to installation. It will also ensure that all tenants, including the Reserve

Components, are treated equally. It enables the Army to resource to standards.

The future will increasingly trend toward multi-functional installations. Supporting transformation, geographic-based regions provide the maximum flexibility

for the future. In the end, it will allow improved facilities provided to soldiers and

their families and better permit us to implement our facilities strategy.

FACILITIES STRATEGY

The Army’s Facilities Strategy (AFS) is the centerpiece of our efforts to fix the

current state of Army facilities over 20 years. It addresses our long-term need to

sustain and modernize Army-funded facilities in both Active and Reserve Components by framing our requirements for both sustainment, restoration and modernization (SRM) and military construction (MILCON) funding. The AFS addresses

sustainment, recapitalization, quality and quantity improvements, and new mission

requirements so that The Army will have adequate facilities to support our 21st

Century missions. SRM includes funds for annual maintenance and scheduled repair—sustainment; and military construction funding to repair or replace facilities

damaged due to failures attributable to inadequate sustainment or emergencies or

to implement new or higher standards—restoration and modernization.

The first pillar of the strategy requires us to halt further deterioration of our facilities. Our sustainment funding, which comes from the Operation and Maintenance (O&M) SRM accounts, has greatly improved thanks to the support from Congress. We are funded at over 90 percent of our requirements in fiscal year 2003.

This level of funding may be sufficient to prevent further deterioration of Army facilities. Our current C–3 conditions are a result of years of underfunding. We must

have sufficient O&M SRM resources to sustain our facilities and prevent facilities

from deteriorating further, or we put our MILCON investments at risk.

The second pillar of the strategy is to tackle the enormous backlog that has grown

over numerous years of underfunding. Since we can’t afford a quick fix to buy down

the SRM backlog, we will centrally manage resources towards focused investments.

This capital investment requirement will primarily require MILCON funding, supplemented by O&M SRM project funding. Our goal is to raise Army facilities from

current C–3 ratings to C–2 by the end of 2010 by bringing a focused set of facilities

to C–1 during that timeframe. Also, we plan to eliminate facility shortfalls where

they exist over the entire 20-year strategy. These shortfalls are a result of facilities

modernization not keeping pace with our weapons modernization and supporting

force structure.

We are basing the initial focused set of facilities on Commanders’ ratings in our

Installation Status Report. The facilities we chose to modernize under this centrally

managed program are critical to The Army’s mission and to our soldiers. It is essential that both the sustainment (O&M SRM) and the capital investment (MILCON

and O&M SRM) pieces be funded as a single, integrated program.

The third (recapitalization) and fourth (new mission) pillars of our strategy address improving recapitalization of our facilities to a 67-year cycle and ensuring adequate facilities keep pace with future force structure changes and weapons modernization programs (such as transformation). These four pillars will enable us to

improve the health of Army real property and its ability to successfully support our

worldwide missions and our soldiers.

In addition to implementing our facilities strategy, we continue our policy of eliminating excess facilities throughout the entire Army to allow us to use our limited

resources where they have the most impact. During fiscal years 1988–2003, our footprint reduction program, along with the base realignment and closure process, will

result in disposal of over 200 million square feet in the United States. We continue

our policy of demolishing at least one square foot for every square foot constructed.

By 2003, with our overseas reductions included, The Army will have disposed of

over 400 million square feet from its fiscal year 1990 peak of 1,157,700,000 square

feet.

Additionally, we are pursuing innovative ways to modernize our infrastructure

and reduce the cost of our facilities. One example is installation utilities systems.

Our goal is to privatize all utility systems in CONUS by 2003, where it is economically feasible, except those needed for unique security reasons. We are also expanding the privatization of military family housing in an effort to provide quality residential communities for soldiers and their families.
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MILITARY CONSTRUCTION, ARMY (MCA)

This year’s MCA program focuses on six major categories of projects: mission facilities, transformation, well-being, efficient basing, installation support, and chemical demilitarization. I will explain each area in turn.

MISSION FACILITIES

In fiscal year 2003, there are 10 mission facility projects to ensure The Army is

deployable, trained, and ready to respond to meet its national security mission.

Projects in this program conclude the successful Army Strategic Mobility Program

(ASMP) to ensure deployment within specified timelines; provide enhanced training

via live fire ranges and simulators; and maintain equipment readiness by ensuring

Army vehicles are repaired and operational.

Army Strategic Mobility Program.—The six mobility projects in our fiscal year

2003 budget request facilitate movement of personnel and equipment from CONUS

bases for both the Active and Reserve Components to meet Army and Defense

timelines for mobilization operations. They are part of an important program started in the early 1990’s to upgrade our strategic mobility infrastructure, enabling The

Army to maintain the best possible power projection platforms. We are requesting

$53.6 million. The fiscal year 2003 projects will complete the Strategic Mobility program. A follow-on program, Army Power Projection Program (AP3) is being implemented as a result of changes in force structure and stationing.

The six projects in our request include improving our deployment capability by

upgrading a deployment facility at Fort Stewart, Georgia; constructing a truck loading/unloading facility at Fort Carson, Colorado; and providing ammunition storage/

outloading facility improvements at Anniston Army Depot, Alabama, Blue Grass

Army Depot, Kentucky, and Letterkenny Army Depot, Pennsylvania. In addition, to

improving fuel storage, we plan to consolidate multiple fuel points at Fort Bragg,

North Carolina, into one modern facility.

Training and Readiness.—To improve soldier training, we are requesting $23.8

million to construct four training and readiness projects. Our request includes a

Modified Record Fire Range at Darmstadt, Germany, and a live fire Shoot House

at Fort Drum, New York. These ranges will provide our soldiers with realistic, stateof-the-art marksmanship training. We are also requesting a Military Operations in

Urban Terrain (MOUT) Urban Assault Course at Fort Benning, Georgia, that will

provide realistic urban combat training necessary for many scenarios in today’s environment. A Tactical Vehicle Simulator facility at Fort Leonard Wood, Missouri, is

requested to train new motor transport operators with our new vehicle simulators.

TRANSFORMATION

Our budget contains $194.9 million for eight projects at three installations, Fort

Lewis, Washington; Fort Wainwright, Alaska; and Fort Polk, Louisiana, that support the deployment, training, unit operations, and equipment maintenance and

motor pool facilities of the Interim Brigade Combat Team (IBCT) new transformed

force. These projects include one maintenance facility for new vehicles, three ranges,

a Military Operations in Urban Terrain (MOUT) facility, a Battle Simulator Center

and a Mission Support Training Facility to ensure our forces are properly trained,

and a Battalion Headquarters/Company Operations Facility to provide a command

and control facility for the increased unit size. We will continue to identify and validate additional requirements associated with transformation and will include these

projects in future budgets.

EFFICIENT BASING, EAST

The Army is requesting the first year of a five-year plan to support the Efficient

Basing, East, initiative in Germany. The initiative will move a Brigade Combat

Team to Grafenwoehr from 13 smaller installations over a five-year time frame.

This year’s budget requests three projects at Grafenwoehr totaling $69.9 million.

Army construction for the entire initiative is expected to cost $596 million. The

three projects in this year’s budget will complete the site preparation for the brigade, construct infrastructure to and around the brigade complex, and renovate existing barracks to the current Army standard. These projects will support the Brigade headquarters element.

WELL BEING PROJECTS

Fifty-four percent of our MCA budget is dedicated to providing for the well being

of our soldiers, their families, and civilians. Although our first priority is to move

permanent party soldiers out of gang-latrine type barracks, we are also requesting
62

Phase II of the Basic Combat Trainee barracks project at Fort Jackson, South Carolina, that was authorized in fiscal year 2002. We are also requesting two child development centers, one physical fitness center, and the expansion of a community support center. These projects will improve not only the well being of our soldiers and

families, but also the readiness of The Army. We are requesting $796.8 million for

well being projects this year.

Whole Barracks Renewal Program.—Modernization of barracks for enlisted permanent party soldiers continues to be the Army’s number one facilities’ priority for

military construction. It provides single soldiers with a quality living environment.

The new complexes provide increased personal privacy, larger rooms, closets, new

furnishings, adequate parking, and landscaping. In addition, administrative offices

are separated from the barracks. With the approval of our budget, as requested, 77

percent of our barracks requirement will be funded at the new standard for our permanent party soldiers. Between fiscal years 2004 and 2009, we plan to invest an

additional $4.0 billion in MCA and host nation funds, supplemented by $400 million

in SRM funding to achieve our goal of providing improved living conditions for all

of our single soldiers by fiscal year 2009. While we are making considerable progress

at installations in the United States, we will request increased funding for Germany

and Korea in future budgets to compensate for these areas having been historically

funded at lower levels than installations in the United States. A large portion of

the remaining modernization effort, 41 percent, is in these overseas areas.

In fiscal year 2003, we are planning 21 barracks projects. This includes 4 projects

in Europe and 5 projects in Korea. The installations with the largest investment are

Fort Bragg, North Carolina, with $100 million (2 projects), and Schofield Barracks,

Hawaii, with $91 million (2 projects). Large soldier populations and poor barracks

conditions require sustained high investment through fiscal year 2008 at both of

these installations to provide quality housing. We are completing a complex at Fort

Carson, Colorado, which was authorized in fiscal year 2002; and we are continuing

second phases at Fort Lewis, Washington, and Fort Richardson, Alaska, which were

also fully authorized in fiscal year 2002. At Fort Campbell, Kentucky, we are requesting authorization for all phases of a multi-phase barracks complex; however,

we are only requesting the appropriation needed for the fiscal year 2003 phase. Our

plan is to award each complex, subject to subsequent appropriations, as a single

contract to gain cost efficiencies, expedite construction, and provide uniformity in

building systems. Barracks projects are also requested for Fort Hood, Texas; Fort

Riley, Kansas; Fort Benning, Georgia; and Fort Detrick, Maryland.

Basic Combat Training Complexes.—We are requesting Phase 2 to complete the

Basic Combat Training complex at Fort Jackson, South Carolina, that was authorized in fiscal year 2002. This project will provide a modern, initial entry basic training complex that includes separate and secure housing to support gender-integrated

training, and provides for the administrative and training functions that are organic

to the mission of the basic training battalion.

Community facilities.—Our budget request includes two new child development

centers to replace failing or inadequate facilities in Bamberg, Germany, and

Vicenza, Italy. To improve soldier physical fitness and community wellness, our

budget includes a physical fitness training center at Camp Castle, Korea. The expansion of a Community Support Center at Fort Detrick, Maryland, is also included

in our request.

INSTALLATION SUPPORT PROGRAMS

This category of construction projects provides vital support to installations and

helps improve their readiness capabilities. We are requesting one project for a Centralized Wash Facility at Schweinfurt, Germany, $2 million. A classified project is

also requested at $4 million.

AMMUNITION DEMILITARIZATION

The Ammunition Demilitarization (Chemical Demilitarization) Program is designed to destroy the U.S. inventory of lethal chemical agents, munitions, and related (non-stockpile) materiel. It also provides for emergency response capabilities,

while avoiding future risks and costs associated with the continued storage of chemical warfare materiel.

The Office of the Secretary of Defense devolved the Chemical Demilitarization

program to the Department of the Army in fiscal year 1999. Although Congress has

consistently authorized and appropriated funding for the Chemical Demilitarization

construction program to the Department of Defense, the overall responsibility for

the program remains with The Army and we have included it in this year’s Army

budget.
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We are requesting $167.6 million in The Army’s fiscal year 2003 budget to continue the Chemical Demilitarization projects previously authorized, and a NonStockpile Chemical Munitions Facility at Pine Bluff, Arkansas. Table 1 summarizes

our request:

TABLE 1.—FISCAL YEAR 2003

[In dollars]

Installation Type Amount

Aberdeen PG, MD ......................................... Ammun Demil Facility, Phase V ......................................... $30,600,000

Blue Grass AD, KY ....................................... Ammun Demil Facility, Phase III ........................................ 10,300,000

Blue Grass AD, KY ....................................... Support Facility, Phase III .................................................. 8,300,000

Newport AD, IN ............................................ Ammun Demil Facility, Phase V ......................................... 61,494,000

Pine Bluff AD, AR ........................................ Non-Stockpile Munitions Facility ........................................ 18,937,000

Pueblo AD, CO ............................................. Ammun Demil Facility, Phase IV ........................................ 38,000,000

Total ............................................... ............................................................................................. 167,631,000

The destruction of the U.S. stockpile of chemical weapons is a major priority of

The Army, DOD and the Administration. These chemical weapons must be destroyed to reduce the risk to the stockpile storage communities and eliminate these

weapons as potential terrorist targets. The MILCON funding for the chemical weapons facilities is essential to achieving this goal.

PLANNING AND DESIGN/UNSPECIFIED MINOR CONSTRUCTION

The fiscal year 2003 MCA budget includes $119.8 million for planning and design.

The fiscal year 2003 request is a function of the construction programs for three fiscal years: 2003, 2004, and 2005. The requested amount will be used to design-build

a portion of the fiscal year 2003 program, complete design in fiscal year 2004, and

initiate design of fiscal year 2005 projects.

Host Nation Support (HNS) Planning and Design (P&D): The Army, as Executive

Agent, provides HNS P&D for oversight of Host Nation funded design and construction projects. The U.S. Army Corps of Engineers oversees the design and construction to ensure the facilities meet our requirements and standards. Lack of oversight

may result in an increase in design errors and construction deficiencies that will require United States dollars to rectify. Maintaining the funding level for this mission

results in a payback where $1 of United States funding gains $36 worth of Host

Nation Construction. The fiscal year 2003 budget request for $23.7 million will provide oversight for approximately $850 million of construction in Japan, Korea, and

Europe.

The fiscal year 2003 budget also contains $20.5 million for unspecified minor construction.

ARMY FAMILY HOUSING

The family housing program provides a major incentive that is necessary for recruiting and retaining dedicated individuals to serve in the Army. Adequate and affordable housing continues to be a major concern to soldiers when asked about their

quality of life. We have waiting lists at nearly all of our major posts and as of January 2, 2002, the out-of-pocket expenses for soldiers living off post were approximately 11.3 percent of the total cost of their housing. The Army supports the initiative to increase the Basic Allowance for Housing (BAH) to eliminate the out-of-pocket costs being paid by Service members for off-post housing in the United States by

2005. Maintaining and sustaining safe, attractive, and convenient housing for our

soldiers and families is one of our continuing challenges. This budget represents an

increase in the family housing program for family housing improvements and expanded privatization. This increase will assist us in providing improved housing

quicker and to more of our military families. Our current plan ensures we meet the

Secretary of Defense’s goal of 2007 to provide adequate housing to all military families.

Privatization is an essential element in solving our acute family housing problem.

The Army’s privatization program, Residential Communities Initiative (RCI), utilizes the authorities granted by the Congress in 1996 and extended to December 31,

2012 to implement an aggressive program to create modern residential communities

in the United States. The Army is leveraging appropriated funds and government

assets by entering into long-term partnerships with private sector real estate devel-
64

opment and management firms to obtain financing and management expertise to

construct, repair, maintain, and operate Army family housing communities.

The RCI program includes projects at Fort Carson, Colorado; Fort Hood, Texas;

Fort Lewis, Washington; and Fort Meade, Maryland. Fort Carson transitioned to

privatized operations in November 1999, and Fort Hood transitioned in October

2001. Forts Lewis and Meade are expected to transition by mid-2002. The projects

include over 15,000 housing units. Army families have already moved into new and

renovated housing at Fort Carson and our experience to date has been very positive.

The program is expanding to 20 additional privatization projects between fiscal

years 2002 and 2004. These projects will privatize more than 48,000 additional

housing units. Using funds appropriated in fiscal year 2002, The Army kicked-off

nine projects. The 2003 budget request will continue to expand the program, adding

five projects covering seven installations (Fort Polk, Louisiana; Fort Belvoir, Virginia; Forts Eustis and Story, Virginia; Fort Leonard Wood, Missouri; and Fort

Shafter and Schofield Barracks, Hawaii).

The Army is using the development partners’ experience and resources, and market-based incentives, to bring about dramatic improvements in the Army family

housing and the quality of life for soldiers and their families.

Our fiscal year 2003 request for Army Family Housing is $1,405,620,000. Table

2 summarizes each of the categories of the Army Family Housing program.

TABLE 2.—ARMY FAMILY HOUSING—FISCAL YEAR 2003

Facility category Dollars Percent

New Construction ....................................................................................................... 27,942 2

Post Acquisition Const ............................................................................................... 239,751 17

Planning and Design ................................................................................................. 15,653 1

Operations .................................................................................................................. 183,408 13

Utilities ....................................................................................................................... 212,432 15

Maintenance ............................................................................................................... 485,257 35

Leasing ....................................................................................................................... 215,251 15

Privatization ............................................................................................................... 25,926 2

Total .............................................................................................................. 1,405,620 100

FAMILY HOUSING CONSTRUCTION

The total fiscal year 2003 request for construction is $283,346,000. It continues

the Whole Neighborhood Revitalization (WNR) initiative approved by Congress in

fiscal year 1992 and supported consistently since that time. This successful approach addresses the entire living environment of the military family. The projects

are based on life-cycle economic analyses and support the Department of Defense’s

2007 goal by providing units that meet current construction and adequacy standards.

New Construction.—The fiscal year 2003 new construction program provides WNR

projects at four locations. Replacement construction provides adequate facilities

where there is a continuing requirement for the housing and it is not economical

to renovate. All of these projects are supported by housing surveys, which show that

adequate and affordable units are not available in the local community.

Post Acquisition Construction (Renovation).—The Post Acquisition Construction

Program is an integral part of our housing revitalization program. In fiscal year

2003, we are requesting funds for improvements to 18,314 existing units at 9 locations in the United States, including privatization at 7 installations; 7 locations in

Europe; and 1 site in Korea. Included within the scope of these projects are efforts

to improve supporting infrastructure and energy conservation.

FAMILY HOUSING OPERATIONS AND MAINTENANCE

The operations, utilities, maintenance, and leasing programs comprise the majority of the fiscal year 2002 2003 request. The requested amount of $1,122,274,000

for fiscal year 2003 is approximately 80 percent of the total family housing budget.

This budget provides for The Army’s annual expenditures for operations, municipaltype services, furnishings, maintenance and repair, utilities, leased family housing,

and funds supporting the Military Housing Privatization Initiative.
65

FAMILY HOUSING LEASING

The leasing program provides another way of adequately housing our military

families. We are requesting $215,251,000 in fiscal year 2003 to fund existing Section

2835 project requirements, temporary domestic leases in the United States, and approximately 8,600 units overseas.

MILITARY CONSTRUCTION, ARMY NATIONAL GUARD (MCNG)

The Army National Guard’s (ARNG) focus is on two categories of projects: transformation and mission.

Transformation

This year we continue converting twelve brigades and two division slices to support the Army Division Redesign Study (ADRS). The ADRS is a high priority for

this budget. Eight facilities will be constructed or converted to house the ARNG’s

Combat Support/Combat Service Support structure. We are requesting $26.8 million

for this transformation for facilities in Alabama and North Carolina and two

projects each in California, Kansas, and Nebraska.

Mission

In fiscal year 2003, the ARNG has requested $55.2 million for five mission

projects. Two projects are in Wisconsin and will replace part of the existing United

States Property and Fiscal Office complex made up of 23 buildings, ranging in year

built from 1895 to 1980. These new facilities will permit all personnel to perform

the necessary tasks that will improve their own readiness as well as provide fiscal

and logistical support for the entire Wisconsin Army and Air National Guard.

The first phase of a project for administrative buildings at Barbers Point, Hawaii

is also included. These units are currently stationed in the Diamond Head State

Monument area, in older, pre-World War II facilities. The renovation of an existing

building at Barbers Point will help with the Diamond Head State Monument Plan,

allowing the Monument area to revert back to a semi-wilderness condition.

As part of The Army’s Facility Strategy, we are requesting a Readiness Center

at Summersville, West Virginia, and phase one of a joint facility with the Marine

Corps Reserve and the Kansas Counterdrug Office at Topeka, Kansas.

PLANNING AND DESIGN/UNSPECIFIED MINOR CONSTRUCTION

The ARNG’s fiscal year 2003 budget request contains $14.7 million for planning

and design and $4.9 million for unspecified minor construction.

MILITARY CONSTRUCTION, ARMY RESERVE (MCAR)

The fiscal year 2003 MCAR budget focuses on mission facilities that support the

Army Reserve’s mission of providing trained and ready unit and individuals to mobilize and deploy in support of the National Military Strategy.

MISSION FACILITIES

In fiscal year 2003, there are seven mission facility projects in the Army Reserve’s

Military Construction program. These projects provide four Army Reserve Centers

(Lincoln, Nebraska; Oswego, New York; Grand Prairie, Texas; and Fort Story, Virginia); four maintenance facilities (Mare Island, California; Lincoln, Nebraska;

Grand Prairie, Texas; and Fort Story, Virginia); a battalion-size dining facility at

Fort McCoy, Wisconsin; and an alteration to an Army Reserve training facility at

Fort Bragg, North Carolina.

PLANNING AND DESIGN/UNSPECIFIED MINOR CONSTRUCTION

The fiscal year 2003 MCAR budget includes $6.965 million for planning and design and $2.85 million for unspecified minor construction.

SUSTAINMENT, RESTORATION AND MODERNIZATION (SRM)

In addition to Military Construction and Family Housing, the third area in the

facilities arena is the O&M SRM program. O&M SRM is the primary account in the

base support funding area responsible to maintain the infrastructure to achieve a

successful readiness posture for The Army’s fighting force. Installations and Reserve

Component facilities are the platforms of America’s Army and must be properly

maintained to be ready to support current Army missions and any future deployments.
66

O&M SRM consists of two major functional areas: (1) facilities sustainment of real

property and (2) restoration and modernization. Facilities sustainment provides resources for maintenance and repair activities necessary to keep an inventory of facilities in good working order. It also includes major repairs or replacement of facility components, usually accomplished by contract, that are expected to occur periodically throughout the life cycle of facilities. Restoration includes repair and replacement work to restore facilities damaged by inadequate sustainment, excessive age,

natural disaster, fire, accident or other causes. Modernization includes alteration of

facilities solely to implement new or higher standards, including regulatory changes,

to accommodate new functions, or to replace building components that typically last

more than 50 years, such as foundations and structural members.

Within the O&M SRM program, there are two areas to highlight: (1) our Barracks

Upgrade Program (BUP) and (2) the Long Range Utilities Strategy. The first area

is our BUP program, which is the major renovation and restoration of existing barracks and an integral part of the Barracks Modernization program’s goal to eliminate gang-latrine barracks by 2008. However, due to the reallocation of central

funding of the BUP program in fiscal year 2002, we will now complete the program

in 2009. At the completion of the fiscal year 2003 program, as requested, we will

have funded, with MILCON and BUP, adequate housing to meet or approximate the

DOD 1∂1 barracks standard for 77 percent of our soldiers. The fiscal year 2004–

2008 Military Construction program will provide barracks for another 18 percent of

eligible soldiers. We will use O&M SRM resources to renovate barracks to an approximate DOD 1∂1 standard for the remaining 5 percent of eligible soldiers. We

are committing an average of about $120 million per year in O&M SRM to continue

the efforts to upgrade housing for our single soldiers.

The second area to highlight within the O&M SRM program is our Long Range

Utilities Strategy to provide reliable and efficient utility services at our installations. Privatization or outsourcing of utilities is the first part of our strategy. All

Army-owned electrical, natural gas, water, and wastewater systems are being evaluated to determine the feasibility of privatization. When privatization appears economical, we use competitive contracting procedures as much as possible. We continue to successfully privatize utility systems on Army installations. Recent successes include privatization of the natural gas system at Fort Benning, and the

water and waste water systems at Presidio of Monterey. Of the 320 Army systems

available for privatization since 1998, 24 have been privatized, 28 have been exempted, and the remaining are in various stages of privatization. The second part

of the strategy is the utilities modernization program. We are upgrading utility systems that are not viable candidates to be privatized, such as central heating plants

and distribution systems. We have executed approximately $188 million in utility

modernization projects in fiscal years 1998 through 2001 and we plan to accomplish

$83 million in additional projects in fiscal year 2002 to complete the program. Together, privatizing and modernizing utility systems will provide reliable and safe

systems.

We are making progress in upgrading barracks and improving utility services,

and funding for the basic maintenance and repair of Army facilities has improved

to 92 percent of the OMA, OMNG and OMAR requirement in fiscal year 2003. However, we still need to strive toward fully funding sustainment to keep facilities from

getting worse and to protect the large infrastructure investment requested in this

budget. The Installation Status Report (ISR) shows Army facilities are rated C–3

(not fully mission capable) due to years of under-funding. At the end of fiscal year

2001, the ISR for The Army showed 28 percent of our facilities were ‘‘red’’—mission

failure; 42 percent were ‘‘amber’’—mission degraded; and only 30 percent were

‘‘green’’—mission supported.

HOMEOWNERS ASSISTANCE FUND, DEFENSE

The Army is the executive agent for the Homeowners Assistance Program. This

program provides assistance to homeowners by reducing their losses incident to the

disposal of their homes when military installations at or near where they are serving or employed are ordered to be closed or the scope of operations reduced. For fiscal year 2003, there is no request for appropriations and authorization of appropriations. Requirements for the program will be funded from prior year carryover and

revenue from sale of homes. Assistance will be continued for personnel at 7 installations that are impacted with either a base closure or a realignment of personnel,

resulting in adverse economic effects on local communities.
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BASE REALIGNMENT AND CLOSURE (BRAC)

Our facilities strategy strives to meet the needs of today’s soldiers while also focusing on the changes required to support the Army of the 21st century. For BRAC

in fiscal year 2003, we are requesting appropriations and authorization of appropriations of $149.9 million. This budget represents the Army’s budget required to

continue unexploded ordnance (UXO) removal, environmental restoration and property management of those facilities not yet disposed from the first four rounds of

BRAC. In fiscal year 2001, the Army began saving $945 million annually upon completion of the first four rounds of BRAC. Although these savings are substantial, we

need to achieve even more, and bring our infrastructure assets in line with projected

needs. The Army supports the need to close and realign additional facilities and we

appreciate the Congress’ authority to have an additional round in fiscal year 2005.

The Army is now in the first year of exclusively care taking and completing the

remaining environmental restoration activities at BRAC installations. The Army implemented innovative approaches to environmental restoration at BRAC sites in fiscal year 2001, which will support the early transfer of several properties. The Army

will continue to support early property transfers in fiscal year 2002 and beyond and

requests $149,878,000 in fiscal year 2003 to continue this important work. These

funds allow us to properly care take these properties and to continue environmental

and ordnance removal efforts that will facilitate economic revitalization and will

render these properties safe. Our efforts will make 24,854 acres of property available for reuse in fiscal year 2002 and complete restoration activities at 7 additional

locations. This budget includes the resources required to support projected reuse in

the near term and to continue with current projects to protect human health and

the environment.

Although the extensive overseas closures do not receive the same level of public

attention as those in the United States, they represent the fundamental shift from

a forward-deployed force to one relying upon overseas presence and power projection. Without the need for a Commission, we are reducing the number of installations by 70 percent, roughly equal to the troop reductions of 70 percent. Your support of our Efficient Basing, East, military construction project will allow us to continue reducing the number of installations in Europe. In Korea, the number of installations is dropping 20 percent. The total number of Army overseas sites announced for closure or partial closure since January 1990 is 680. Additional announcements will occur until the base structure matches the force identified to meet

U.S. commitments.

The significant challenges posed by the removal of unexploded ordnance, the remediation of groundwater, and the interface of a variety of regulatory authorities

continue to hinder the disposal of property. A number of innovative approaches for

environmental restoration were recently developed in an effort by the Army to expedite the transfer of property, while ensuring the protection of human health and the

environment. Two innovative mechanisms are being utilized to complete environmental restoration efforts: Guaranteed/Fixed Price Remediation (G/FPR) Contracts

and Environmental Services Cooperative Agreements (ESCA). A G/FPR Contract obligates BRAC funds necessary for regulatory closure of specified restoration activities. The Army retains responsibility for completion of the environmental restoration, overseeing the contractor and ensuring that regulatory closure of the property

is obtained. An ESCA is a different mechanism, authorized under the environmental

restoration program that obligates Army BRAC funds and apportions some amount

of liability to a governmental entity representing the reuse interests of the particular BRAC installation, in exchange for specific environmental restoration services outlined in the ESCA.

We remain committed to promoting economic redevelopment at our BRAC installations. We are supporting early reuse of properties through economic development

conveyances as well as the early transfer of properties along with cooperative agreements to accelerate the completion of remaining environmental remediation. The

Army is also making use of leasing options approved by Congress and awarding

guaranteed fixed price remediation contracts to complete environmental cleanup to

make properties available earlier. Real property assets are being conveyed to local

communities, permitting them to quickly enter into business arrangements with the

private sector. Local communities, with the Army’s support and encouragement, are

working to develop business opportunities that result in jobs and tax revenues. The

successful conversion of former Army installations to productive use in the private

sector benefits the Army and ultimately the local community.

The BRAC process has proven to be a viable method to identify and dispose of

excess facilities. The closing and realigning of bases saves money that otherwise

would go to unneeded overhead and frees up valuable assets for productive reuse.
68

These savings permit us to invest properly in the forces and bases we keep to ensure their continued effectiveness. We request your support by providing the necessary BRAC funding to continue environmental restoration and property management in fiscal year 2003.

FISCAL YEAR 2003 SUMMARY

Mr. Chairman, our fiscal year 2003 budget is a balanced program that permits

us to execute our construction programs; provides for the military construction required to improve our readiness posture; and provides for family housing leasing,

operation and maintenance of the non-privatized inventory, and initiates privatization at seven additional installations. This request is part of the total Army budget

request that is strategically balanced to support both the readiness of the force and

the well being of our personnel. Our long-term strategy can only be accomplished

through sustained, balanced funding, divestiture of excess capacity, and improvements in management. We will continue to streamline, consolidate, and establish

community partnerships that generate resources for infrastructure improvements

and continuance of services.

The fiscal year 2003 request for the Active Army is for appropriations and authorization of appropriations of $2,882,141,000 for Military Construction, Army and

Army Family Housing.

The request for appropriations and authorization of appropriations is

$101,595,000 for Military Construction, Army National Guard and $58,779,000 million for the Military Construction, Army Reserve.

Madam Chairman, this concludes my statement. Thank you.

Senator FEINSTEIN. Thank you very much. Dr. Fiori, I am told

that the three military gentlemen are not here to make speeches

but to answer questions. Is that correct, Dr. Fiori?

Dr. FIORI. Yes, ma’am.

LOW MILCON BUDGET

Senator FEINSTEIN. So we will proceed with the questions. Let

me begin with you, General Van Antwerp. The Army’s MILCON

budget request is 15-percent cut from last year’s funding level. I

would like to ask you the same question I asked Mr. Zakheim. Is

this budget request adequate to meet all your MILCON needs for

fiscal year 2003?

General VAN ANTWERP. Ma’am, I will start out by saying first of

all this MILCON funds 38 percent of our requirement, so there is

a lot of the requirement that is not funded here. We had to make

budget tradeoffs, of course, to decide what were the priorities, so

we funded along priority lines.

We did keep our barracks, permanent party barracks, which is

the Army’s top priority, funded at 100 percent, and we kept our

strategic mobility projects, which provides the ability for our forces

to deploy from their bases at 100 percent, so we took the cut in the

other revitalization areas, so if we ask, did we get everything that

absolutely we want and need, no, but we have funded our highest

priority, to answer your question.

The comments you made about the services and personnel on the

installation, we fund the services and personnel out of the base ops

account, which is the O&MA account, rather than the MILCON account, so whether MILCON is up or down, it does not impact the

people as much as it does when you have a substandard facility

that you really cannot do the mission in. That is when you do the

upgrade or a new facility.

Senator FEINSTEIN. But you are saying you could live with this

budget and that the MILCON is adequate to maintain readiness

and quality of life?
69

General VAN ANTWERP. Well, we would live with it. I will tell you

that our facilities are at what we call C–3, as opposed to our units

at C–1, C–1 being fully mission-capable, C–3 being marginally mission-capable, and so our facilities with this budget will remain at

the marginally mission-capable level.

Dr. FIORI. That is with the exception of the housing, which we

will get into C–1 by 2007.

Senator FEINSTEIN. And you would say the same for the Guard

and the Reserve, right?

General VAN ANTWERP. Yes, ma’am. I can let them speak.

Senator FEINSTEIN. Perhaps they would speak for themselves,

then. Gentlemen, you heard the question. Would you like me to repeat it?

General HELMLY. Ma’am, I would ask you to repeat it, if you

would.

Senator FEINSTEIN. My question is that you have had a substantial cut in MILCON, and I would like to ask whether the cut is

such that you can continue to operate effectively, that neither readiness nor quality of life will be affected by it.

General HELMLY. Yes, ma’am. In the near term, I will say that

for the Army Reserve it will not be affected negatively. Our

Sustainment and Restoration and Modernization funding, SRM, as

was mentioned by Dr. Fiori, is adequate, and that provides the

near-term sustainment for the facilities. MILCON obviously is

longer-range, as this committee well knows. Our MILCON is definitely down from $111 million requested last year to $58.9 million

requested this year.

I would only note that last year—we have all alluded to the

events of 11 September. Last year was the first year that I believe

you would see that all of us were beginning to encroach upon, to

use that negative word, the negative funding we had seen for

years. We requested in the Army Reserve $111 million, and this

committee with the help of the Congress appropriated $165 million.

We were on the road to requesting the same kinds of amounts

again, but the events of 11 September precipitously changed that.

Our focus, as previous witnesses have stated, changed materially.

It is decidedly, this moment, on operations, readiness for near-term

operations, so it was with the understanding of our leadership that

we took this precipitous reduction.

I would note again, that reduction is in longer-term MILCON.

Short-term we are adequately funded at 91 percent of our SRM

budget. We do not like the cut, but it is something that we are

quite willing to live with, given our priorities in the Nation and in

turn in the Armed Forces and in the Army Reserve today.

Senator FEINSTEIN. Thank you. General Squier, would you like

to comment?

General SQUIER. Madam Chairman, of course I would like to

make some comments in support of the issues that we bring to the

table.

Senator FEINSTEIN. General, could you move the mike over and

speak directly into it?

General SQUIER. As General Van Antwerp and General Helmly

have already alluded to, this is a tough issue for us, to balance our

competing requirements for readiness, especially since the things
70

that have evolved since 9/11. There are a lot of competing interests.

Yes, the long-term recapitalization program that we worked with

the Army is on target for what we can afford right now. For the

long-range plan, and given the sustainment dollars, we have been

able to program in the interim.

Would we like more money? Of course we would, but we will

work that issue harder with the Army for the future, on our road

to the future.

Senator FEINSTEIN. I guess what concerns me, because everybody

seems so happy with what they have, that we will begin to get

phone calls from commanders and others saying, you know, we cannot possibly live with this, you have got to help us, and of course

we will want to do it, and many people believe that that is the

game that is played in this institution with this particular budget,

that they really look at the Congress to kind of plus it up after it

has been requested, and I guess what I am saying is, that very well

might not happen this year.

If you are all happy with it and you are coming before us and

saying this meets our short-term needs, and there are other things

that are more important, and we are going to be fine with this level

of funding, that is a signal to me, and I think even to the Ranking

Member, to hold firm at this number.

Dr. FIORI. We have looked at the budget, and I was fortunate to

be pretty much at the front end of the budget process this year. We

weighed all the different items that affected our budget, and as

General Van Antwerp said, our budget took care of the most important construction issues—barracks, strategic mobility, and transformation. We gave 70-percent to the Army National Guard Division Redesign program, and then what was remaining we split up

among the components. None of our total requirements are going

to be met, nor will they ever be met every year. These were balanced things we had to do to fund other things.

The one thing we did do, of course, the Active Army, Army National Guard and Army Reserve, is to make sure our sustainment

was going to be equal, and that is 92 percent. Ideally, obviously,

if we could have afforded 100 percent, we would have done that.

This is where we came out.

EFFICIENT BASING, SOUTH—SCHOOL ENROLLMENT

Senator FEINSTEIN. Let me ask you one question. I was briefed

last year by General Miggs regarding Efficient Basing South and

the rationale for the development in Vincenza, Italy, and General

Miggs emphasized the need for this initiative, which would move

an additional battalion to Vincenza.

Now, I understand the existing Vincenza Elementary High

School cannot anticipate the anticipated enrollment increase, and

I am just wondering what is going to happen long term, and then

there is Grafenwoehr, which will cost $70 million this year and another $492 million in the future, and that does not include other

things as well.

EFFICIENT BASING EAST

Dr. FIORI. The quick lesson I learned from listening to the testimony is, I am going to check on the school and the Grafenwoehr
71

project. I am going to ask General Van Antwerp to answer the

question about Vincenza, since we are almost finished everything

there. I certainly was not aware of the school issue, but the

Grafenwoehr issue, we are doing another validation of our economic study to show why it makes both financial sense and also

sense just for the soldiers for time away from home, all the other

soldier issues, to get ourselves into one area, instead of 13 that we

are in presently.

We are also finding that Germany will contribute the housing.

We are going to be leasing the housing from them. We are going

to have some savings there, but we have an economic analysis, and

we are reverifying it, and we will have that report in April.

General VAN ANTWERP. The end of April.

Dr. FIORI. So we are going to look at the financial aspect of it,

and we will also look at the aspect of what OSD is providing in

this. I just cannot answer that at the moment.

Senator FEINSTEIN. My time is up. Senator Hutchison.

FORT BLISS DESALINIZATION PLANT

Senator HUTCHISON. I am going to ask a question first on a more

local issue, and that is the issue of the desalinization plant at Fort

Bliss. In the fiscal year 2002 military construction budget there

was $2.8 million for the planning and design activities at that

plant. As you know, there is a dwindling supply of potable water

at Fort Bliss, and yet the Army has not yet executed any of those

funds, and here we are in March. What is the hold-up?

Dr. FIORI. I was briefed on this earlier, in the last few days, and

we are looking at what is the status basically of the $2 million that

was provided in the 2002 Defense Bill, it has been obviously earmarked for Fort Bliss in the funding letter to TRADOC, and the

funds will be sent to TRADOC, or should have been sent by now.

We have not defined the best methods of disposal of brine solution

byproducts from desalinization, and this will help fund the reinjection of the brine back into the aquifer.

There are pre-design studies that still have to be done, and my

understanding is the Army cost for this co-venture is going to be

$29 million. The total cost of the venture with the City will be

$50.4 million.

The $2 million will fund engineering studies required prior to design. The current estimated time to perform these engineering

studies is going to be 12 to 18 months. The project will also require

an environmental study that could take up to 24 months, and this

effort would cost $11⁄2 million, which Fort Bliss has submitted to

TRADOC for action during the midyear review process. It is premature to initiate any design work, and I think that may be the

issue that appears to be slowing things down, before these engineering studies are completed.

General, can you add anything to that?

General VAN ANTWERP. We will be doing the studies, and then

that will tell us what we need to do for the planning and design,

but this first phase for the studies, we will be beginning those very

shortly. The engineer district will get those funds probably in the

next week or so to begin those studies.
72

Senator HUTCHISON. Well, that did not sound like we are really

on top of this. I would just ask you to go back and make this happen. It has been sitting there since October 1, and we would like

to get going on it. It is very important. It is a joint effort with the

City of El Paso, as you mentioned, and I think it is essential for

Fort Bliss and essential—I think it cuts the cost by doing it in a

joint venture. It is good for the city as well, but I just would like

to see it not be delayed further.

I mean, I know there is a lot of work to do, but the studies have

been appropriated, so I think we should go forward.

General VAN ANTWERP. Actually, ma’am, we did not get the

money in order to be able to put our funding letter out, until very

recently, to the field, so we did not have the money on 1 October

to do it. We just recently put the funding letter out, and it has now

gone through TRADOC.

Senator HUTCHISON. So it is imminent?

General VAN ANTWERP. It is.

Senator HUTCHISON. You do not see any further hold-up?

General VAN ANTWERP. No.

REPROGRAMMINGS

Senator HUTCHISON. Last question. The services normally will

take excess funds as bill-payers to offset other MILCON projects.

That, I think, has been the norm if it meets certain criteria, 25 percent or less, or less than $2 million, and it is my understanding

that the services tried to do that in its normal course last year, reprogramming money saved from Korea to Fort Belvoir’s fire station, and that was held up by the House Appropriations MILCON

Congressman.

I understand that now there has been, I do not know, a policy

or an edict or something that says you cannot use money that is

programmed for Korea or Germany to fund other projects. Is that

the case, and what is happening there, and if it is the case, is that

going to hurt your capability to fully utilize money where you need

it most?

Dr. FIORI. This has certainly been under discussion, of course,

and I will let General Van Antwerp answer.

General VAN ANTWERP. Ma’am, you are correct. When we were

reprogramming for the ARVN Physical Development Center at

West Point, we were looking at funds. We originally proposed $27

million that we got from bid savings in Korea to reprogramming for

that facility.

We were requested by the House to not use those funds from

Korea for that, but to keep those funds for other Korea projects, so

what we did was go back and found other reprogramming sources

where we could take a little bit from an awful lot of projects, and

where we had bid savings and other things.

Where it leaves us today is, we have very little money left if we

cannot reprogram those dollars in other areas, if they are confined

to Korea or Europe. I am not aware of the Europe restriction, but

the Korea restriction right now is that we have no ability to use

those funds anywhere else, so they are just sitting there right now.

We have not used those funds.
73

Senator HUTCHISON. Do you think that is hurting your capability

to decide your priorities?

General VAN ANTWERP. I think it does. We have needs to reallocate that money elsewhere, and we are not able to.

Senator HUTCHISON. Thank you.

WEAPONS OF MASS DESTRUCTION/CIVIL SUPPORT TEAMS

Senator FEINSTEIN. I have one last question for General Squier,

if I might. General, I wanted to ask you about the WMD civil support teams that have gone from 20 to 32, and without going into

the history of the funding, I think we are all hopeful that that will

be completed in the coming year. Are the funds adequate to fund

those 32 teams?

General SQUIER. Ma’am, thanks for the question. We do have a

shortfall in unspecified minor, making sure that we can stand up

these last five teams that were announced this year. It will be

about $3.5 million. That would help.

Senator FEINSTEIN. Another $3.5 million?

General SQUIER. Yes, ma’am.

Senator FEINSTEIN. Okay, because I think that is a priority, I

think, for us, to see that those teams are set up, and I am pleased

you are telling me what it will take to do it, but if there was another $3.5 million, that would take care of 32 teams in place when?

General SQUIER. By the end of 2003.

Senator FEINSTEIN. The end of 2003?

ADDITIONAL COMMITTEE QUESTIONS

General SQUIER. Yes, ma’am. Those last five teams were just announced this year. The first 27 are going to finish up this year in

2002, and there will be those last five stood up and completed by

the end of 2003. $3.5 million in unspecified money will help us facilitate that.

[The following questions were not asked at the hearing, but were

submitted to the Department for response subsequent to the hearing:]

QUESTIONS SUBMITTED TO DR. MARIO P. FIORI

QUESTIONS SUBMITTED BY SENATOR DIANNE FEINSTEIN

UNITED STATES FORCES KOREA BRIDGE

Question. Secretary Fiori, the US Forces Korea plans to construct a $7.9 million

bridge linking its two military posts (main post and south post) in Yongsan in central Seoul. Understanding the convenience that is offered by this project, however,

I am still concerned. Is it true that the land proposed for the building of this bridge

is not in accordance with the Status of Forces Agreement (SOFA)? And, with plans

to move Yongsan at a cost of nearly $10 billion, during the next decade, is a project

of this magnitude justified?

Answer. The project is being funded with construction funds provided by the Republic of Korea (Host Nation Funded Construction). This project is not for convenience, but to improve force protection and reduce the negative impact of our controlled access procedures on the city. There is no land required, only a right of way

(easement). The SOFA provides for such requirements, and the SOFA Joint Committee set up by treaty to negotiate such actions is already engaged. The Republic

of Korea government is providing the easement, and both the Korean Federal and

Seoul city governments support the project. Our force protection requirements and

controlled access, particularly during heightened threat conditions, cause a tremendous traffic problem for the city. This project will significantly reduce the impact
74

on the city of our force protection requirements, and thus has their full support.

There are no ‘‘plans’’ to move Yongsan garrison. There is an agreement from 1990

stating Yongsan will relocate (by 1996) and the Korean government will pay for it.

This agreement has lain dormant for many years. Recently, the Korean government

has expressed interest in revisiting the issue, but there is no agreed upon new location, no scope of work for the relocation, no designs, and no master plans. Should

the Korean government decide to aggressively pursue the relocation, it will take

years to accomplish. In the interim, the overpass will still help improve USFK force

protection and reduce our impact on the city.

CHEMICAL DEMILITARIZATION PROGRAM

Question. Dr. Fiori, the President’s budget requests $168 million for the Defense

Department’s Chemical Demilitarization Program in fiscal year 2003. Yet, in an

evaluation from the Office of Management and Budget accompanying the fiscal year

2003 budget, the program was rated ‘‘ineffective’’ because of a 60 percent cost increase estimate and delays stemming from ‘‘unrealistic schedules, site safety and environmental concerns, and poor planning.’’ That evaluation doesn’t give me a lot

confidence that the budget request is justified or will be well spent.

Since it is the Army that administers that program, could you please comment

on the budget evaluation and tell us what your department is doing to improve the

chem-demil program?

Answer. The Office of the Secretary of Defense (OSD) completed a major program

review (September 2001) that resulted in the recognition that the prior stockpile destruction milestones would not be met. The current schedule approved by the Defense Acquisition Executive projects completion of disposal operations at six chemical stockpile sites between 2007 and 2011, and associated costs of $24 billion.

Schedules for the Pueblo, CO, and Blue Grass, KY, sites will be published once the

technology decisions are made, now projected for the 3rd Quarter, fiscal year 2002

and the 1st Quarter, fiscal year 2003, respectively. The revised program cost and

schedules are based on operational experience obtained at the Johnston Island and

Tooele, UT, chemical agents disposal facilities. Chemical agent destruction efforts at

these sites were evaluated to develop realistic schedules for other incinerator sites.

The significant cost drivers are revised processing rates; disposal facility operations

extensions; stockpile conditions that affect processing rates (e.g., gelled chemical

agent in rockets, frothing and solidification with mustard agent; and heavy metal

contamination in ton containers); higher labor rates; increased equipment and construction costs; technology maturity and design evolution. The schedule extensions

have also increased the costs of emergency response and preparedness. In addition,

facility closure estimates for CONUS sites have increased based on ongoing closure

efforts at the Johnston Island facility.

The Army has consolidated the management of the Chemical Demilitarization

Program under the Assistant Secretary of the Army (Installations and Environment). I have extensive experience in managing environmentally sensitive and complex Government facilities and programs. The revised milestones and associated

costs are incorporated into a new set of program requirements by which OSD and

the Army will monitor schedule, cost and performance of the program. The Army

has accelerated the neutralization process by as much as 3 years for disposal of

mustard bulk agent at Aberdeen, MD. The Army is studying the feasibility of a

similar effort to accelerate disposal of the bulk VX nerve agent stockpile at Newport,

IN, and will continue to evaluate options at other sites. This approach will save time

and money. I assure you that the Army will continuously review options for potential cost savings and utilization of resources, while not jeopardizing the safety of the

public, workers and environment.

Question. Do you believe that the fiscal year 2003 budget request is the actual

amount that will be needed in fiscal year 2003, or is it more of a guesstimate?

Answer. The fiscal year 2003 Military Construction budget request is based on

historical experience and detailed engineering estimates for the work to be performed in fiscal year 2003. The fiscal year 2003 budget request represents funds

needed to begin, continue and complete Chem Demil projects during the year. Significant activities during fiscal year 2003 are: (a) completion of construction activities associated with the accelerated neutralization initiative at Aberdeen; (b) continuation of facility construction activities at Newport, IN; (c) award of the designbuild systems contract at Pueblo, CO; (d) execution of technology dependent infrastructure projects at Blue Grass, KY (technology decision expected September 2002);

and (e) completion of construction activities at Pine Bluff, AR (no fiscal year 2003

funds requested). For work already under contract, the budget requests are based

on projected obligation and expenditure to support the planned workload. For work
75

not yet awarded, the budget requests are based on government estimates based on

past experience. Decisions regarding accelerated destruction of the chemical agent

stockpile (over and above what is currently scheduled) may alter the fiscal year

2003 funding requirements.

QUESTIONS SUBMITTED BY SENATOR KAY BAILEY HUTCHISON

MILITARY CONSTRUCTION SPENDING AND BACKLOG

Question. Dr. Fiori, last year senior Defense officials testified that after many

years of neglect, the Department intended to start investing in infrastructure. They

stated that our facilities had been allowed to deteriorate to unacceptable levels and

that we needed to address these shortfalls. The fiscal year 2002 budget was a major

step forward in that regard. However, I note that we are back to business as normal

with a proposed recapitalization rate of 123 years in the 2003 budget versus the 83

year rate in the fiscal year 2002 budget. Is the Army serious about improving Army

facilities, and if so, why the reduction in MILCON spending in this budget?

Answer. Our military construction budget request is $3.2 billion and will fund our

highest priority facilities and family housing requirements. In fiscal year 2002, we

presented a budget that was a down payment on our goal to better support our infrastructure. When we developed this year’s budget in light of the events that took

place last year, we had some very difficult decisions to make. The need to fund our

military pay raises, Army transformation, OPTEMPO, the war on terrorism, increases in health care and other key programs were all included in the decision

leading to our request. Thus, the Army budget provides the best balance between

all our programs, including military construction.

BACKLOG OF ACTIVE AND RESERVE COMPONENT MILCON PROJECTS

Question. What is your backlog of Active and Reserve Component MILCON

projects?

Answer. The Army’s backlog is $17.7 billion based on the fiscal year 2001 Installations Status Report (ISR) and the associated cost to improve the condition of our

facilities to C–1. Much of this backlog will require MILCON funding because the facilities require extensive renovation. Some of the work will be accomplished with

Operation and Maintenance (O&M) funds. The component breakout of the backlog

requirement is Active $9.6 billion, Army Reserve $1.7 billion, and Army National

Guard (Federally Funded portion) $6.4 billion.

INTERIM BRIGADE COMBAT TEAMS (IBCTS)

Question. I understand that there is a disconnect between the fielding of the Interim Brigade Combat Teams and the amount of funding available for the military

construction facilities necessary to support those brigades. Can the Army provide me

a list of the unfunded MILCON requirements essential for all of the IBCTs?

Answer. Yes. When the fiscal year 2003 budget was developed, all known IBCT

requirements were funded. However, while budget decisions were being made, we

continued to refine military construction requirements, using emerging IBCT doctrine and lessons learned from fielding and training in the first two IBCTs. As a

result, we have since identified $276.4 million in emerging Military Construction,

Army (MCA) requirements for the IBCTs, primarily in Alaska and Hawaii (Table

follows).

EMERGING BILLS PROGRAM CATEGORY

Location Description Dollars

ARMY

Alaska:

Fort Richardson ...................................... Sniper Range ................................................... 3,650

Fort Richardson ...................................... Mission Support Training Facility ................... 34,000

Fort Richardson ...................................... Multipurpose Training Range .......................... 14,800

Fort Wainwright ...................................... Combined Arms Collective Training Facility ... 24,000

Fort Wainwright ...................................... MOUT Upgrades ............................................... 10,880

Fort Wainwright ...................................... Company Operations Facilities (2) .................. 7,500

Fort Wainwright ...................................... Brigade Motor Pool Phase 2 ........................... 32,000
76

EMERGING BILLS PROGRAM CATEGORY—Continued

Location Description Dollars

Fort Wainwright ...................................... Ammunition Supply Point ................................ 13,000

Fort Wainwright ...................................... Battle Area Course .......................................... 48,000

Hawaii:

Schofield Barracks .................................. Mission Support Training Facility ................... 43,000

Schofield Barracks .................................. Information Systems Facility ........................... 22,000

Washington: Fort Lewis ................................... Arrival Departure Airfield Control Group ......... 2,600

Worldwide: Various .......................................... Planning and Design ....................................... 21,000

Question. What caused this delay in getting projects lined up for the interim brigades? Have you all fixed the problem?

Answer. The delay in the development of the total requirements was due to several factors. The announcement of the locations for IBCTs 3 through 6 occurred in

July 2001. Since then, interim doctrinal development and lessons learned from

training and fielding the first IBCTs has resulted in changing project requirements,

particularly for Alaska and Hawaii. With a better opportunity to analyze specific installations’ on-hand facilities against more developed IBCT requirements, additional

requirements have emerged that are critical to support the fielding, training and

sustaining these IBCTs.

The Army is fixing these problems. We are working to synchronize the Interim

Force requirements process with the MILCON process and capture the refined facilities requirements to support fielding IBCTs 3 through 6. We are addressing these

emerging requirements in the Army’s program development for fiscal years 2004

through 2009. The Army is leveraging IBCT lessons learned to better plan and program the fielding of the Objective Force.

PROJECT BID SAVINGS

Question. What is the Army’s Policy towards MILCON bid or project savings generated in South Korea and Germany?

Answer. Construction contract bid savings or project savings need to be used

wherever there is a justified MILCON program shortfall. The country, state or installation location that generated the savings is not a factor in the decision on

where the savings will be used to fund an Army MCA shortfall.

Question. What are the policy implications to the rest of the MILCON program

of maintaining bid savings in each state or country?

Answer. There would be an impact on the Army’s ability to effectively manage

and execute the MILCON program. Maintaining bid savings in each state or country

might result in the eventual expiration of unexpended funds in areas with no requirement, reduction in required project scope in areas with no bid savings, or possible cancellation of projects where further scope reductions would impact the

functionality of the facility.

U.S. ARMY SOUTH RELOCATION

Question. Dr. Fiori, I understand that the Army is in the process of sending evaluation teams to five or six bases to determine their suitability to serve as the new

home to U.S. Army South (USARSO). Will the criteria these installations be evaluated on include: Proximity to an international airport with direct flights to Central

and South America? Abundant spousal employment opportunities? Existing infrastructure capable of absorbing USARSO, without the need for new construction?

Answer. Senator Hutchison, the Army is not currently evaluating any locations

for a future home for USARSO. The Army is, however, studying the necessity of

moving USARSO and a decision is expected soon. If a decision is made to move

USARSO, criteria, to include such criteria as you mentioned in your question, will

be developed and utilized in the process of reviewing possible relocation sites and

in making a final selection.

MILCON CUTS

Question. When I look closely at the proposed MILCON budget and break it out

by state, I find that four of the states that received the lion’s share of the cuts from

previous budgets are California, Florida, Texas, and Hawaii. Am I to believe that

this is coincidence that these states are heavily represented on the appropriations

committees or can I conclude that the administration purposely under funded these
77

states with the intent that the committees would then take the role of making them

‘‘whole?’’

Answer. The Army funds our priorities without respect to specific states, but with

regards to where our most important requirements exist. The Army has identified

certain facility types for focused investment. These facilities are our first priority for

funding.

Our Permanent Party Barracks will be replaced or modernized to the new Army

standard barracks of 1∂1 by fiscal year 2008.

Strategic Mobility will be complete with this budget and a follow on Army Power

Projection Program will apply additional funding to requirements that have been

identified through new missions and changing force structure.

The Transformation of the Army requires significant facility investment at all impacted installations.

Ammunition (Chemical) Demilitarization supports the destruction of the U.S.

stockpile of chemical weapons to reduce the risk to the communities surrounding he

stockpile sites and is a major priority of the Army.

National Guard Army Division Redesign Study (ADRS) provides facilities for new

wartime and domestic support requirements.

Critical C–3 and C–4 Facilities. We will focus also on critical categories of facilities in poor condition (vehicle maintenance shops, tactical equipment shops, general

instruction buildings, Chapels, Reserve Centers, National Guard facilities, etc)

Last, is recapitalization of existing facilities. Our goal is to reach a 67 year cycle

by 2010. We are currently on a 123 year cycle.

QUESTIONS SUBMITTED TO MAJOR GENERAL JAMES R. HELMLY

QUESTIONS SUBMITTED BY SENATOR DIANNE FEINSTEIN

ADEQUATE FUNDING FOR THE ARMY RESERVE

Question. The Army Reserve requirements and funding profile for fiscal year 2003

indicate that the President’s budget request will meet just 26 percent of the Reserve’s MILCON requirement. Do you consider that to be an adequate level of funding?

Answer. I consider the Army Reserve military construction funding to be adequate

within the context of the fiscal year 2003 budget. The Army had some very difficult

decisions to make in light of the events that took place last year. The need to fund

the war on terrorism, military pay raises, Army transformation, OPTEMPO, increases in health care and other key programs were all included in the decisions

leading to our budget request. Although the Army Reserve has other military construction projects we would like to see funded, the budget provides the best balance

between all Army programs.

ANTI-TERRORISM/FORCE PROTECTION

Question. General Helmly and General Squier. I see no specific requests in the

budgets of the reserve components addressing increased force protection requirements. However, understanding that this amount could be in the billions of dollars,

the Army Guard has made an initial cut as to the amount that could be executed

in the next fiscal year. I assume the USAR has a similar estimate. Would you please

provide your estimated requirement for the Committee?

Answer. The Army Reserve estimates increased force protection MILCON require- ments will cost $13 million for fiscal year 2003. This estimate encompasses the resources required to consistently assess our force protection posture, fix deficiencies

discovered during that process, secure our installations and Reserve centers, and

emplace the communication links necessary to gather intelligence and coordinate response plans.

QUALITY OF LIFE FOR MOBILIZED RESERVISTS

Question. With more Guardsmen and reservists employed full-time, what concrete

efforts are being planned to address quality of life for these soldiers.

Answer. We have established a much more robust Family Support network to

educate, assist and support soldiers’ families on the requirements, responsibilities

and entitlements associated with being mobilized and serving on active duty as well

as demobilization and the soldiers’ return to civilian work.

The OSD TRICARE demonstration which affords mobilized Reservists greater coverage and entitlements is a good step toward understanding and compensating for

the health issues of the soldier and, more importantly, his or her family. Further
78

considerations to deal with any loss of health care and afford our Reserve family

a true continuum of health care are ongoing.

Our Reservists continue to benefit from the Uniformed Services Employment and

Reemployment Rights Act of 1994, as amended, and the work of the National Committee for Employer Support of the Guard and Reserve Ombudsman program.

QUESTION SUBMITTED TO BRIGADIER GENERAL MICHAEL J. SQUIER

QUESTION SUBMITTED BY SENATOR DIANNE FEINSTEIN

ADEQUATE FUNDING FOR THE NATIONAL GUARD

Question. General Squier, the National Guard requirements and funding profile

for fiscal year 2003 indicates that the President’s budget request will meet only 14

percent of the Guard’s MILCON requirement in fiscal year 2003. Do you consider

this an adequate level of funding?

Answer. Last year, the Army made a down payment against their requirements

to increase funding for both the Active and Reserve Component facilities. Unfortunately, the Army could not sustain that level this year due to higher Army priorities

for transformation, mission and readiness.

QUESTIONS SUBMITTED TO MAJOR GENERAL ROBERT L. VAN ANTWERP, JR.

QUESTIONS SUBMITTED BY SENATOR DIANNE FEINSTEIN

ANTI-TERRORISM/FORCE PROTECTION

Question. General Helmly and General Squier. I see no specific requests in the

budgets of the reserve components addressing increased force protection requirements. However, understanding that this amount could be in the billions of dollars,

the Army Guard has made an initial cut as to the amount that could be executed

in the next fiscal year. I assume the USAR has a similar estimate. Would you please

provide your estimated requirement for the Committee?

Answer. The Army Reserve estimates increased force protection MILCON requirements will cost $13 million for fiscal year 2003. This estimate encompasses the resources required to consistently assess our force protection posture, fix deficiencies

discovered during that process, secure our installations and Reserve centers, and

emplace the communication links necessary to gather intelligence and coordinate response plans.

QUALITY OF LIFE FOR MOBILIZED RESERVISTS

Question. With more Guardsmen and reservists employed full-time, what concrete

efforts are being planned to address quality of life for these soldiers.

Answer. We have established a much more robust Family Support network to

educate, assist and support soldiers’ families on the requirements, responsibilities

and entitlements associated with being mobilized and serving on active duty as well

as demobilization and the soldiers’ return to civilian work.

The OSD TRICARE demonstration which affords mobilized Reservists greater coverage and entitlements is a good step toward understanding and compensating for

the health issues of the soldier and, more importantly, his or her family. Further

considerations to deal with any loss of health care and afford our Reserve family

a true continuum of health care are ongoing.

Our Reservists continue to benefit from the Uniformed Services Employment and

Reemployment Rights Act of 1994, as amended, and the work of the National Committee for Employer Support of the Guard and Reserve Ombudsman program.

UNFUNDED PRIORITIES

Question. General Van Antwerp: General Shinseki (Army Chief of Staff) reported

last week that the Army has nearly $9.5 billion in unfunded priorities for fiscal year

2003. What portion of that amount involves military construction?

Answer. The total MILCON identified in the unfunded priorities for fiscal year

2003 is $621,871,000. The program categories are Facilities Revitalization and

Emerging Bills.

Question. Would you please provide for the Committee a list of the Army’s unfunded MILCON priorities?

Answer. The projects are listed below:
79

FACILITIES REVITALIZATION PROGRAM CATEGORY

Location Description Dollars

ARMY

Alaska: Fort Richardson ............................................... Mylar Window Glazing .................................................. 1,115

Alabama: Anniston AD ................................................. Igloo Mods for THAAD .................................................. 2,150

Colorado:

Fort Carson .......................................................... Multi-Purpose Machine Gun Range ............................. 2,700

Fort Carson .......................................................... Arrival Departure Airfield Control Group & Ramp ....... 50,000

District of Columbia:

Walter Reed AMC ................................................. Physical Security, Main Section ................................... 3,450

Georgia:

Fort Benning ........................................................ Cantonment Fencing .................................................... 14,600

Fort Gillem ........................................................... Modified Record Fire/Combat Pistol Qual Course ....... 4,400

Kansas:

Fort Leavenworth ................................................. Cantonment Fencing .................................................... 1,300

Fort Riley ............................................................. Cantonment Fencing .................................................... 7,000

Fort Riley ............................................................. Combined Arms Collective Training Facility ................ 27,000

Kentucky:

Fort Campbell ...................................................... Combined Arms Collective Training Facility ................ 12,779

Fort Campbell ...................................................... Shoot House ................................................................. 1,250

New York:

Fort Drum ............................................................ Combined Arms Collective Training Facility ................ 14,500

Fort Drum ............................................................ Parallel Taxiway ........................................................... 8,600

Fort Drum ............................................................ Mountain Ramp and Hot Pad ...................................... 15,000

North Carolina:

Fort Bragg ........................................................... Shoot House ................................................................. 1,250

Fort Bragg ........................................................... Anti-Armor/Infantry Squad Battle Course .................... 6,900

Oklahoma:

Fort Sill ................................................................ Railroad Equip/Engine Maintenance ............................ 2,100

McAlester AAP ...................................................... Consolidated Shipping Center LCL .............................. 2,500

Texas:

Fort Hood ............................................................. Qualification Training Range ....................................... 8,100

Fort Hood ............................................................. Urban Assault Course .................................................. 1,400

Fort Hood ............................................................. Urban Assault Course .................................................. 1,000

Washington:

Fort Lewis ............................................................ Guard House ................................................................. 15,500

Fort Lewis ............................................................ Fencing ......................................................................... 2,400

Fort Lewis ............................................................ Shoot House ................................................................. 1,250

Germany: Grafenwoehr Training Area .......................... Combined Arms Collective Training Facility ................ 31,850

Kwajalein:

Kwajalein ............................................................. Vehicle Paint and Prep Shop ....................................... 10,000

Kwajalein ............................................................. Cover Raw Water Tanks ............................................... 4,516

Puerto Rico: Roosevelt Roads ...................................... SOF Aircraft Maintenance Hangar ............................... 18,500

Worldwide: Various ....................................................... Planning and Design ................................................... 7,780

ARMY RESERVE

California: Los Alamitos ............................................... Perimeter Security (fencing, gates, lighting, doors,

camera, IDS), 63rd RSC.

1,773

Massachusetts: Devens ................................................ Upgrade and Installation of fencing, gates, lighting,

gates, doors, camera, IDS), 94th RSC.

1,331

New York: Fort Totten ................................................... Upgrade and Installation of fencing, gates, lighting,

gates, doors, camera, IDS), 77th RSC.

1,400

Pennsylvania: Oakdale ................................................. Upgrade and Installation of fencing, gates, lighting,

gates, doors, camera, IDS), 99th RSC.

1,651

Utah: Salt Lake City ..................................................... Upgrade and Installation of fencing, gates, lighting,

gates, doors, camera, IDS), 96th RSC.

2,500

Washington: Seattle ..................................................... Upgrade and Installation of fencing, gates, lighting,

gates, doors, camera, IDS), 70th RSC.

2,235

Puerto Rico: Ft Buchanan ............................................ Upgrade and Installation of fencing, gates, lighting,

gates, doors, camera, IDS), 65th RSC.

1,235

Worldwide: Various ....................................................... Planning and Design ................................................... 857

NATIONAL GUARD

Arkansas:

Camp Robinson ................................................... Cantonment Fencing .................................................... 1,600
80

FACILITIES REVITALIZATION PROGRAM CATEGORY—Continued

Location Description Dollars

Camp Robinson ................................................... Fence Training Areas ................................................... 4,805

Fort Chaffee ......................................................... Relocate Parking lots ................................................... 2,000

Connecticut:

Bradley Intl Airport .............................................. State Area Reserve Command (STARC) (-) and alt

EOC. Install Force Protection.

2,300

Bristol Armory ...................................................... State Area Reserve Command (STARC)—Install Force

Protection.

1,900

Enfield Armory ..................................................... Install Barriers, gates, fences ..................................... 1,250

MTA Cp Rowland ................................................. Install Barriers, gates, fences ..................................... 1,250

Illinois:

Springfield ........................................................... New Standoff Mail/Receiving Center ........................... 2,000

Springfield ........................................................... New Entrance /Exit, Harden Guard Bldg ..................... 1,500

Indiana: Camp Atterbury .............................................. Installation Boundary Fence with Patrol Road ............ 7,429

Kansas: Topeka ............................................................ Inspection facility, & internal access lines ................. 2,242

Maryland: Fifth Regiment Armory ................................ State Headquarters (STARC) ........................................ 1,200

New York:

Latham STARC ..................................................... Fencing, lighting, CCTV ............................................... 2,500

Troy Armor/OMS ................................................... fencing, lighting, CCTV ................................................ 1,500

New York .............................................................. Relocate entrance, drive, guard house ........................ 1,500

North Dakota: Camp Grafton ....................................... Upgrade and harden perimeter Security Fence ........... 1,500

South Dakota:

Rapid City ............................................................ Enhance site perimeter barriers & access gates, provide guard houses.2,500

SD, Sioux Falls .................................................... Barriers, Fencing .......................................................... 2,000

Tennessee: Smyrna ....................................................... Replace fencing and Improve ...................................... 1,802

Virginia: Fort Pickett .................................................... Install perimeter security ............................................. 4,500

Worldwide: Various ....................................................... Planning and Design ................................................... 4,291

EMERGING BILLS PROGRAM CATEGORY

Location Description Dollars

ARMY

Alaska:

Fort Richardson ...................................... Sniper Range ................................................... 3,650

Fort Richardson ...................................... Mission Support Training Facility ................... 34,000

Fort Richardson ...................................... Multipurpose Training Range .......................... 14,800

Fort Wainwright ...................................... Combined Arms Collective Training Facility ... 24,000

Fort Wainwright ...................................... MOUT Upgrades ............................................... 10,880

Fort Wainwright ...................................... Company Operations Facilities (2) .................. 7,500

Fort Wainwright ...................................... Brigade Motor Pool Phase 2 ........................... 32,000

Fort Wainwright ...................................... Ammunition Supply Point ................................ 13,000

Fort Wainwright ...................................... Battle Area Course .......................................... 48,000

Hawaii:

Schofield Barracks .................................. Mission Support Training Facility ................... 43,000

Schofield Barracks .................................. Information Systems Facility ........................... 22,000

Washington: Fort Lewis ................................... Arrival Departure Airfield Control Group ......... 2,600

Worldwide: Various .......................................... Planning and Design ....................................... 21,000

INCREASING COSTS OF THE EFFICIENT BASING INITIATIVE IN EUROPE

Question. General Van Antwerp, I want to get a handle on the real costs and efficiencies of the Efficient Basing Initiatives—both East and South. I am told that the

Efficient Basing effort in Grafenwoehr will cost $70 million this year, another $492

million in the future, and this doesn’t include $90 million for DODEA in Germany

alone. That’s a lot of cash. Plus, we’re looking at almost $35 million this year in

Vicenza alone. Are there hidden outyear costs there?
81

Answer. We have identified all known costs for both initiatives and we have provided that information to various members and staff. If changes in costs or requirements occur we will continue to keep Congress informed.

Efficient Basing East (Grafenwoehr). The total construction costs are $695 million,

of which $70 million is programmed in fiscal year 2003 as part of the Military Construction, Army (MCA) budget request, and the remaining requirement is split between Army ($492 million), Military Construction, Defense-wide (MCD) ($99 million)

and planning and design. These non-Army construction requirements are for

schools, medical facilities and Army and Air Force Exchange System facilities. There

is no construction requirement for Army Family Housing (AFH) because our family

housing requirements will be provided through Build to Lease facilities—currently

estimated at $34 million per year funded out of our AFH Operations account.

Efficient Basing—South (Vicenza). Construction requirements total $53 million, of which $39 million is funded in MCA and $14 million is part of a larger MCD school

expansion project (totaling $17 million) to be programmed. Family housing requirements can be satisfied on the local economy.

Question. What is the bottom line? Is the Efficient Basing Initiative really efficient? Answer. The initiatives are necessary and efficient.

Efficient Basing—East consolidates a heavy Brigade Combat Team from 13 small,

scattered installations to a single installation. It is good for soldiers, it will improve

operations and training, and it saves money. Soldiers will be located next to their

major training area, work in facilities built to support their job most efficiently and

housed in modern barracks and family housing, properly sized and outfitted to today’s standards. This initiative saves money because in the long run it is cheaper

to build new in a single location than rehabilitate and refurbish old outmoded facilities in a dispersed World War II footprint.

Efficient Basing—South will increase forces in the NATO Southern Region and

provide CINCEUCOM with more flexibility to deploy assets across the spectrum of

military scenarios—it provides operational efficiencies rather than economic efficiencies. Vicenza was selected because of its robust support structure, availability

of quality of life services and facilities, and least overall cost.

Question. I would like to see an analysis of the payout of this initiative.

Answer. For Efficient Basing East, an independent economic analysis (EA) is

being conducted to determine savings and benefits. We will forward it to you when

it is completed and reviewed by the Army. An initial estimate provided by US Army

Europe indicates an approximate savings of $12 million per year. As for Efficient

Basing South, the initiative was based on military operational requirements rather

than for base efficiencies.

ANTI-TERRORISM/FORCE PROTECTION

Question. MG Van Antwerp: Regarding Anti-Terrorism-Force Protection requirements following the events of September 11th, I would assume that the demand for

increased force protection measures is great. Can you tell me how much of this demand was addressed in this year’s budget request ?

Answer. Due to the events of September 11th, approximately $200 million from

Defense Emergency Response Fund (DERF) Program Year 2001 was allocated to improve Access Control on military installations Army-wide. The fiscal year 2003

Budget Request contains $691 million for DERF to be used for Military Construction

and other Access Control Measures. If approved, it will provide equipment packages

for Perimeter Access Control Points, Internal Limited Access Control Points and

Cargo Inspection Points at mission essential vulnerable areas. Under ‘‘Combating

Terrorism’’ within the fiscal year 2003 President’s Budget there is over $2.0 billion

for Army Anti-Terrorism-Force Protection measures. The intent of funding these

packages is to mitigate risk at entry points and reduce manpower requirements.

QUALITY OF LIFE FOR MOBILIZED RESERVISTS

Question. General Van Antwerp, with the recently declared ‘‘war on terrorism’’ the

readiness of reservists is key to our success. We need modern ranges, training areas,

and facilities that will allow all our service members the training and education

they need. However, this disproportionate budget seems to be divided between ‘‘the

haves and the have nots.’’ If you do not address the service-wide needs of soldiers

this year, what guarantee do the members of Congress have that they will be addressed in coming years?

Answer. The Army’s military construction budget supports all Army soldiers, active and reserve. The Army has funded sustainment of our facilities at 92 percent

for both active and reserve components’ facilities inventory. Also, one-fourth of the

projects in the active Army’s military construction budget are available for joint use
82

with the Army National Guard and Reserve. The fiscal year 2003 Army Military

Construction budget request includes several major programs and initiatives which

are funded at higher percentages, for example: barracks (100 percent), strategic mobility (100 percent), transformation (100 percent), chemical demilitarization (100

percent), and Army National Guard Division Redesign (69 percent). After these, the

Army funded all remaining revitalization requirements for the Active Army at 9

percent of requirements, for the Army National Guard at 9 percent, and for the

Army Reserve at 26 percent. The Army is committed to addressing the needs of soldiers in all components of the Army equitably.

QUESTION SUBMITTED BY SENATOR KAY BAILEY HUTCHISON

FORT BLISS—CAPACITY

Question. General VanAntwerp, as you are well aware, large land areas for maneuver training are at a premium in the U.S. and, because of this scarcity, their

use needs to be maximized. I’m sure you are also aware that the Fort Bliss/White

Sands training area is the largest in the U.S., yet there are no major maneuver

forces permanently stationed at Fort Bliss. Do you see the movement of a division,

or perhaps one of the Army’s new Interim Brigade Combat Teams (IBCTs), to Fort

Bliss to take advantage of this unmatched maneuver space?

Answer. Fort Bliss is home to a robust array of U.S. Army Air Defense Artillery

units, schools, and related activities. The Air Defense Artillery Center and School

trains Army air defenders and Army leaders with a host of courses and facilities.

Major units include the 32nd Army Air and Missile Defense Command, four (4) Air

Defense Brigade Headquarters and Headquarters Batteries, seven (7) Patriot Battalions, and seven (7) Maintenance Companies. Several of these units were relocated

to Fort Bliss after 1995 to maximize Army usage of the range spaces there. Air defense missile firing requires a great amount of range space to safely conduct under

realistic engagement conditions and distances, and Fort Bliss is well suited for this

very mission.

Both Active Component and Reserve Component (both Army National Guard—

from several states—and United States Army Reserve) units and personnel currently conduct extensive training exercises, mobilization activities, and support missions at Fort Bliss. Additionally, the Army staffs, equips, and jointly operates other

United States Government elements at Fort Bliss such as Joint Task Force-6, Operation Alliance, and the El Paso Intelligence Center.

Fort Bliss, like all other installations, is being considered for future stationing options for different units. Each installation has its advantages and disadvantages, in

terms of maneuver and range availability, power projection capacity, and installation support capacity. Fort Bliss is currently undergoing some important upgrade

projects regarding the fielding of Theater High-Altitude Area Defense System

(THAADS), and the installation will continue to meet the important needs of soldiers, civilian employees, and families.

SUBCOMMITTEE RECESS

Senator FEINSTEIN. All right. Does anybody else have anything

they would like to bring to the attention of the committee?

If not, then, I thank you very much. This hearing is recessed.

[Whereupon, at 4:30 p.m., Tuesday, March 5, the subcommittee

was recessed, to reconvene subject to the call of the Chair.]
(83)

MILITARY CONSTRUCTION APPROPRIATIONS

FOR FISCAL YEAR 2003

TUESDAY, MARCH 19, 2002

U.S. SENATE,

SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS,

Washington, DC.

The subcommittee met at 2:30 p.m., in room SD–138, Dirksen

Senate Office Building, Hon. Dianne Feinstein (chairman) presiding.

Present: Senator Feinstein.

DEPARTMENT OF DEFENSE

DEPARTMENT OF THE NAVY

STATEMENT OF H.T. JOHNSON, ASSISTANT SECRETARY OF THE NAVY

FOR INSTALLATION AND ENVIRONMENT

ACCOMPANIED BY:

REAR ADMIRAL DAVID D. PRUETT, CIVIL ENGINEER CORPS, USN,

DIRECTOR, CIVIL ENGINEERING READINESS DIVISION, CHIEF OF

NAVAL OPERATIONS

REAR ADMIRAL NOEL G. PRESTON, USNR, DEPUTY DIRECTOR OF

NAVAL RESERVE

BRIGADIER GENERAL (SELECT) RONALD S. COLEMAN, USMC, DEPUTY ASSISTANT COMMANDANT OF THE MARINE CORPS FOR INSTALLATION AND LOGISTICS FACILITIES

OPENING STATEMENT OF SENATOR DIANNE FEINSTEIN

Senator FEINSTEIN. I would like to call this meeting of the Military Construction Subcommittee of the Defense Appropriations

Committee to order and I welcome our witnesses and members of

the subcommittee. I am sorry the ranking member, Senator

Hutchison of Texas, has an unavoidable commitment and cannot be

here today. But we will proceed in any event. I want everybody to

know that the Appropriations Committee has officially entered the

cyber age and all our witnesses should know that the audio of our

hearing is being broadcast live over the Internet. So the mikes are

live at all times.

Today we are going to hear from representatives of the Navy and

the Air Force on their respective 2003 military construction programs. The prepared statements of all the witnesses will be entered into the record in their entirety. So I will ask the witnesses

to summarize their oral remarks and if you can do it within five

minutes that is really wonderful and then we will have some time

for questions. If you cannot, that is all right, too.
84

The total fiscal year 2003 budget request for military construction is slightly less than $9 billion. Now that is a 15 percent drop

from what Congress appropriated last year and, it is a 24 percent

drop in active component military construction. When you break it

down by service, the Navy’s active military construction program is

down 20 percent and the Air Force is down 48 percent.

For the reserve components, the Navy Reserve has level funding,

while the Air Force Reserve is down almost 69 percent and the Air

Guard is down nearly 75 percent. These are major reductions from

last year and so I want these witnesses to know that this committee would like to support an adequate program for military construction. We have been concerned because the budget is cut so

dramatically in military construction and as I said last time, I generally go by what the military believe they need in military construction to carry out their work. So I would encourage everybody

to speak as frankly as you can.

BASE REALIGNMENT AND CLOSURE CLEANUP

At the last hearing, the military said they could live with these

cuts. So I take them at their word. But last year the Navy and the

Air Force submitted inadequate budget requests for their BRAC

environmental cleanup programs and I want you to know that I appreciate the effort that both services put forth to help correct the

situation.

Secretary Johnson, you in particular have been very helpful with

the Hunter’s Point shipyard problem and I appreciate that very

much. Last year we were able to bail the services out on this environmental remediation of closed bases, but it is going to be very

difficult to do so this year within the budget constraints. And I

think we regard environmental cleanup as being a very vital part

of the BRAC process. It is also the reason, or one of the major reasons, why base conversion has been so slow and so difficult.

Because the cleanup of many of these bases has been dramatically underestimated by the military and local jurisdictions that

have the bases transitioned to them really cannot use them unless

the cleanup is carried out, and of course they do not have the

money on the local level to do the cleanup. So I believe very strongly when the services make promises to affected communities, those

promises must be kept and so I look forward to hearing progress

reports on the BRAC cleanup program today.

Let me begin by introducing panel number one. The Honorable

H.T. Johnson, Assistant Secretary of the Navy for Installations and

Environment; Rear Admiral David Pruett from the Chief of Naval

Operations, Civil Engineer Corps; Rear Admiral Noel Preston,

United States Navy Reserve; and Brigadier General Ronald Coleman, United States Marine Corps. I would ask each of you to summarize your statements if you can. We will put your whole statement in the record and let’s begin now. Secretary Johnson. Welcome.

NAVY TESTIMONY

Mr. JOHNSON. Thank you. I am very pleased to be with you and

you have introduced my partners and they are partners not only
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in this hearing, but also working the MILCON and also taking care

of our people in the Marine Corps and the Navy.

We would like to highlight a few items and we have many more

in our statement, of course. We have done well in the current budget climate. The Department of Navy budget for installations overall

is $9.3 billion. A bit higher than the $8.9 billion appropriated in

2002. We have tilted towards our top priority our sailors, Marines,

their families and our civilian work force.

There is $375 million for family housing construction and improvement. This is a 15 percent increase over this year’s enacted

levels. This will allow us to build 1,1,00 new homes and renovate

some 31,000 existing homes—31 hundred—three thousand one

hundred. We have also funded 4,400 new bachelor quarter homes

for our single sailors and Marine Corps. Of these, 600 and—correction, 764 are for homes for our shipboard sailors.

We have 31,000 sailors who don’t have a home except on the

ship. This is lowest quality of life in the Department of Defense.

We want to give them a home ashore by 2008. We have also added

$269 million to better sustain our existing facilities. This is 15 percent higher than this year’s level.

Unfortunately as you mentioned, our active and reserve military

construction request, MILCON, is $948 million, 21 percent below

this year’s enacted level. This reflects the priorities that I mentioned keeping the balance across all of our Department of Navy

priorities. There was some thought early on that we had anticipated a BRAC 2005. We have not. No one in the Department of

Navy considered that and it is not part of our priority system. You

mentioned cleanup, Madam Chair, but we have done very well.

Last year you mentioned that you helped us a bit and we appreciate that. This year, we are using the funds that we got from the

Congress. In the 2003, we are fully funded. And looking out, we are

also funding all the requirements.

BASE CLOSURE CLEANUP

You mentioned that BRAC is very, very difficult and it is true.

We never know exactly what is going to come up next. When you

uncover a rock, you have to look under it and Hunter’s Point is certainly one that you and I know very well. Every time we dig up

a bucket full of dirt, we find something new.

Looking just at a few of our successes and some of our challenges, Mare Island, I am not sure if you know it or not, but the

Governor just last week approved the transfer of the eastern parcel. That is some 668 acres—the industrial part of Mare Island. In

fact, all of the industrial part has been transferred. There are 3,000

acres in the western parcel, which was wetlands. It is on the Governor’s desk for approval. So very shortly we should have all of

Mare Island completed.

This is a new approach. We gave the cleanup funding to the city

and their contractor teammate for both the eastern sector, some

$78 million, and for the western sector a like amount. So Mare Island is fixed, if you will. Hunter’s Point, we have forged a good relation good partnership under your tutelage with the mayor, the

city, the local contractor and certainly the Department of Navy. We

are anxious to integrate our cleanup with development.
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We are very pleased at Tustin. We are about to transfer most of

Tustin, but we keep some property for the Federal Government to

sell. So we will make a little bit on Tustin. Oakland Naval Hospital, that is up for sale and that seems to be going well also.

Turning now to the part that our Secretary and Department focuses on is housing. As I believe you know, the Secretary of Defense accelerated the goal for having good homes for all of our family members from 2010 to 2007. The Navy service will make 2007.

The Marine Corps will make it 2 years early in 2005, which is

quite an accomplishment.

PUBLIC PRIVATE HOUSING PARTNERSHIPS

We also have some good news. We have been very successful at

privatization and this has worked out very well for the Department

of Navy. We have Public Private Partnerships at six locations for

some 6,600 homes. We have another 1,800 homes at two locations

underway—solicitations, and we have plans for 12,000 more at

seven locations. That has worked very, very well and we get a good

up front leverage and it is a self-sustaining entitlement for our sailors and Marines.

We believe we have real opportunity to use the privatization concept for bachelor housing and we are working that very hard. We

are working on three pilots and we are working with your staff and

other congressional committees to gain support for this concept. We

are also pleased at what we have done in energy. We are concerned

about our facilities, but we are also concerned about conserving our

energy and utilities. The Department of Navy won two of four energy awards that were passed out by the Vice President last Fall.

That is quite an accomplishment for our people and we are very

proud of that. If I may turn it over to Admiral Pruett now ma’am?

Senator FEINSTEIN. Thanks, Mr. Secretary. Admiral?

Admiral PRUETT. Good afternoon, Madam Chairman. It is a

pleasure to be before the committee to discuss the fiscal year 2003

MILCON budget request. I just have a couple of additional comments to amplify a couple of the areas mentioned by Secretary

Johnson in his opening statement.

First of all and primary, mission accomplishment is what we call

our main thing, but our people, of course, are our top priority.

Truly both mission accomplishment and the people are inextricably

linked. As Secretary Johnson discussed, we have over 31,000 sailors that are living on board ships while in home port and these

sailors like all sailors in the Navy endure a very austere lifestyle

aboard ship while underway on deployment. When the ships are in

home port, we need to offer them a better place to call home. This

is a major quality of service issue and we are programming and

executing projects that will resolve this challenge, as the Secretary

mentioned.

But we also need to come up with some more innovative ways

to further expedite the housing of these shipboard sailors as well

as our other eligible sailors ashore. This year’s budget does have

two projects for 764 shoreside sailor rooms for the junior sailors

who would otherwise continue to live aboard the ship. Our goal is

to have them off the ships while at home port, shore side living

spaces by 2008. And this initiative will help lessen the divide with
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regards to housing for our single sailors compared to our married

sailors.

Next, protection of our people while at work and at home has of

course taken on a paramount importance in the wake of the attacks of September 11. I want to assure you that our facility

projects are designed to meet the latest anti-terrorism force protection engineering standards, and those include shatter resistant

glass, building hardening, perimeter protection and structural reinforcing. We employ these standards based upon local conditions

and our threat analyses.

Quality facilities and infrastructure are an integral component of

our readiness. Our installations serve as our launch platforms from

which our sailors and Marines deploy to execute their mission,

while their families remain behind. These are the places where our

sailors, Marines and their families live, work, train and relax. We

do remain committed to assure readiness even though as you’ve

mentioned, we have a smaller MILCON budget this year.

There are no quick fixes and we must stay the course and look

at our available funding, continue to balance it across the different

facility accounts. First of all, we need to sustain our facilities. This

is with what we call our SRM budget—Sustainment, Restoration

and Modernization budget, to stop the growth of C3 and C4 deficiencies. And we need to correct those deficiencies and then achieve

this recapitalization rate goal of 67 years.

The continued support by the Congress and the administration

over the long term is vital to improving the condition of our facilities in order to support the fleet readiness both now and in the future.

PREPARED STATEMENT

So I sincerely thank you for your continued support that this

committee and your staff have given the Navy and Marine Corps

team. In closing, I will just leave you with a thought. I started out

saying mission was our main thing, people are our top priority, but

you could say mission first, people always. Thank you ma’am.

[The statement follows:]

PREPARED STATEMENT OF H.T. JOHNSON

Madam Chairwoman and members of the Committee, I am H. T. Johnson, Assistant Secretary of the Navy (Installations and Environment). I appreciate the opportunity to speak to you today on the Department of the Navy’s shore infrastructure.

We are all justifiably proud of the way this Nation’s military forces have responded to the September 11 terrorist acts in New York, Pennsylvania and Washington DC. From providing increased security for homeland defense at airports and

port facilities against future potential threats, Tomahawk cruise missiles fired from

ships and submarines, and carrier-based Navy and Marine Corps aircraft providing

80 percent of the combat sorties over Afghanistan, Sailors and Marines have served

proudly and with distinction to eliminate terrorist threats in what was previously

considered a landlocked sanctuary. In ‘‘Operation Enduring Freedom’’ and the global

‘‘War on Terrorism,’’ on-station Naval Forces were first to respond, first to fight,

first to secure U.S. interests.

It takes highly trained and motivated individuals, using advanced technologies

and weapon systems, to successfully pursue U.S. military objectives. Our bases and

stations provide direct and indirect support to forward-deployed Naval Forces. Perhaps more importantly, such installations are the means by which Naval forces are

formed, trained, maintained, and housed. And our environmental programs help ensure our continued use of military training areas on land and at sea, while also complying with national and international environmental standards.
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The Secretary of the Navy has repeatedly said people are our most important

asset. Military pay and benefits are obviously important. But members of this Committee know that a modern, well maintained infrastructure is a very strong ‘‘people’’

program; it’s the pier, the hangar, the warehouse, where Sailors, Marines, civilian

employees and contractors report to work; it’s the classroom, the training range

where they learn and hone their skills; it’s the nice home in a good neighborhood

where our military members and their families live. It’s also the commitment to effective safety and occupational health programs that protects them from the daily

hazards they face, whether on the job or off. The military mission is inherently a

dangerous one. Whether it is training for the mission, carrying out the mission, or

preparing the weapons and weapon systems that may be employed, we need to, and

are, pursuing a vision of zero mishaps for the future by institutionalizing operational risk management, embracing best business practices, and adopting key safety technologies.

I will begin by summarizing our fiscal year 2003 budget request, and follow with

more details in each program area.

THE FISCAL YEAR 2003 BUDGET

Shore Infrastructure Budget

The Department of the Navy shore infrastructure budget includes these appropriations: Military Construction, Navy; Military Construction, Naval Reserve; Family Housing, Navy and Marine Corps; Base Realignment and Closure; and the Operations and Maintenance accounts which provide base support and Sustainment,

Restoration and Modernization.

Our fiscal year 2003 infrastructure budget request continues the progress we have

made in last year’s budget. Our budget request of $9.3 billion represents a 4.5 percent increase over the enacted fiscal year 2002 level of $8.9 billion. While maintaining the overall forward momentum, we have emphasized housing and the

sustainment of our existing facilities, consistent with the priorities of the Secretary

of Defense, the Secretary of the Navy, the Chief of Naval Operations, and the Commandant of the Marine Corps. There are notable gains in these areas.
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FISCAL YEAR 2003 DON FAMILY HOUSING CONSTRUCTION

Location Homes Millions of dol- lars

Construction:

Lemoore, CA .................................................................................................................... 178 1 $41.0

New London, CT .............................................................................................................. 100 1 24.4

Mayport, FL ..................................................................................................................... 1 0.3

Meridian, MS ................................................................................................................... 56 1 9.8

Larissa, GR ..................................................................................................................... 2 1.2

St. Mawgan, UK .............................................................................................................. 62 18.5

Twentynine Palms, CA .................................................................................................... 76 1 19.4

Kaneohe Bay, HI ............................................................................................................. 65 1 24.8

Camp Lejeune, NC .......................................................................................................... 317 1 43.7

Quantico, VA ................................................................................................................... 290 1 41.8

Improvements (Various Locations):

Navy ................................................................................................................................ 2,928 123.9

Marine Corps .................................................................................................................. 209 15.6

Planning & Design .................................................................................................................. ........................ 11.3

Total Construction ...................................................................................................... 4,284 375.7

1 Replacement construction.

Housing is a cornerstone of our efforts. The fiscal year 2003 family housing construction request totals $376 million, a 15 percent increase over the fiscal year 2002

enacted level of $328 million. This funding will allow us to build 1,147 new homes

(all but 65 are replacement construction) and renovate 3,137 existing homes. Included in this improvement request is $33 million for privatization at Pearl Harbor,

HI. Our family housing operations and maintenance request totals $868 million, a

4 percent reduction below the fiscal year 2002 enacted level. This reduction is due

to a net reduction of approximately 5,000 government owned homes, primarily the

result of privatization efforts.

Our military construction request for the active component totals $895 million,

consisting of 43 Navy and 19 Marine Corps projects. The facts are that there are

other pressing requirements, most of which are associated with the conduct of the

war on terrorism. After the September 11 attack, the Department was required to

make some difficult choices to pursue the war on terrorism. The Secretary had to

achieve balance across many competing needs. This military construction budget request is the second largest in 6 years. It is exceeded only by our fiscal year 2002

request, and is considerably larger than previous requests. We are planning to use

some of the funds allocated for anti-terrorism/force protection (AT/FP) from the Defense Emergency Response Fund toward military infrastructure. These additional

funds are not included in any tables or other discussion in this statement.

MILITARY CONSTRUCTION NAVY

Type of facility

Navy Marine Corps

No. of projects Millions of dollars No. of projects Millions of dollars

Quality of Life ............................................................... 12 $270 6 $73

Operational ..................................................................... 15 118 1 3

Training .......................................................................... 1 6 2 10

Maintenance/Storage ...................................................... 3 63 8 75

Utilities ........................................................................... 2 34 1 5

RDT&E ............................................................................ 1 9 ........................ ........................

Nearly three-quarters of the military construction request is for restoration and

modernization projects. Consistent with our focus on solving housing needs, the active military construction request includes a robust bachelor housing effort totaling

$275 million to construct, improve and replace 4,360 bachelor-enlisted quarters

beds. There is also $69 million for six Navy and two Marine Corps quality of life

projects, including fitness centers and dining facilities. We have included $69 million

for planning and design efforts, and raised our request for unspecified minor construction to $23 million under the expectation that further AT/FP efforts will be

needed.
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Our Military Construction, Reserve request totals $52 million, about the same as

the fiscal year 2002 enacted level. There are six Navy (including a bachelor enlisted

quarters for 92 spaces) and three Marine Corps projects totaling $48 million, $2.5

million for planning and design, and $1 million for unspecified minor construction.

Our prior Base Realignment and Closure (BRAC) request totals $259 million, a

20 percent increase over the fiscal year 2002 enacted level of $215 million. This

funding supports caretaker functions and cleanup of contamination at base closures

under the four previous rounds (i.e., BRAC 1988, BRAC 1991, BRAC 1993, and

BRAC 1995). This request meets all current regulator and community expectations

for cleanup at our BRAC bases. I am pleased to report we have resolved our fiscal

year 2002 shortfall as a result of the additional funds provided by Congress, the

availability of land sale revenue, and the use of prior year BRAC funds which we

have determined are no longer needed for their original intended purpose. These

prior year BRAC funds are being reallocated to fund fiscal year 2002 BRAC cleanup

needs.

Our Sustainment, Restoration and Modernization (SRM) funded by Operations

and Maintenance accounts request totals $2,066 million, a 15 percent increase over

the fiscal year 2002 enacted level of $1,797 million. This $269 million increase in

funding allows the Marine Corps to achieve 92 percent, and Navy 84 percent, of the

sustainment requirement for the existing facilities inventory based on the current

requirements model. This provides the highest level of sustainment funding

achieved using this metric, considerably higher than the estimated 80 percent for

Marine Corps in fiscal 2002, and the estimated 71 percent Navy average over the

three previous years.

I would now like to address specific program areas in more detail:

HOUSING

We have two overarching housing principles:

—Our Sailors and Marines, and their families, are entitled to quality homes; and

—Housing that we provide, either directly through ownership or indirectly

through privatization, must be self-sustaining over the long term. ‘‘Self-sustaining’’ means that we must ensure that the resources are there to operate,

maintain, and recapitalize the home throughout its life.

Family Housing

Our family housing strategy consists of a prioritized triad:

—Reliance on the Private Sector.—We rely first on the local community to provide

housing for our Sailors, Marines, and their families. Three out of four Navy and

Marine Corps families receive a Basic Allowance for Housing (BAH) and own

or rent homes in the community. Our bases have housing referral offices to help

newly arriving families find suitable homes in the community.

—Private Financing through Public/Private Ventures (PPVs).—With the strong

support from this Committee and others, we have successfully used statutory

PPV authorities enacted in 1996 to partner with the private sector and meet

our housing needs, in part, through the use of private sector capital. These authorities, which I like to think of in terms of public/private partnerships, allow

us to leverage our own resources and provide better housing faster to our families. We are aggressively seeking additional opportunities to meet our housing

needs through the use of PPVs.

—Military Construction.—Military construction will continue to be used where

PPV authorities don’t apply (such as overseas) or where they don’t make financial sense for the Department.

Some years ago, the Secretary of Defense established a goal to eliminate inadequate military family housing units by fiscal 2010. Secretary Rumsfeld recently accelerated that goal by 3 years, to fiscal year 2007. Through a combination of increased funding and increased use of PPV authorities, I am pleased to say that the

Navy and Marine Corps have stepped up to the challenge: the Navy will meet the

Office of the Secretary of Defense (OSD) goal and eliminate their inadequate family

housing by fiscal year 2007. The Marine Corps will exceed the goal and eliminate

their inadequate housing by fiscal year 2005.

Bachelor Housing

Our budget request continues the emphasis on improving living conditions for our

unaccompanied Sailors and Marines. While we are nearing the achievement of our

goal for improving family housing, our track record in addressing the housing needs

of our single members has been uneven. One of our top priorities is to focus attention and resources on improving bachelor housing. There are three challenges:
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1Gang heads remain acceptable for recruits and trainees.

—Provide Homes Ashore for our Shipboard Sailors.—There are approximately

31,000 Sailors worldwide who are required to live aboard ship even while in

homeport. This situation is unacceptable. The recent change in law allowing

E4s to receive BAH is a step in the right direction. Under current levels of funding, the Navy estimates that it will be able to achieve its ‘‘homeport ashore’’ initiative by fiscal year 2008. Our fiscal year 2003 budget includes two ‘‘homeport

ashore’’ projects that will provide homes ashore to 764 shipboard Sailors at Norfolk, VA and Bremerton, WA. Through continued emphasis on military construction and the use of private financing authorities for bachelor housing, I

strongly believe we can, and must, do even better.

—Ensure our Barracks Meet Today’s Standards for Privacy. We are continuing

our efforts to construct new and modernize existing barracks to provide increased privacy to our single Sailors and Marines. The Navy applies the ‘‘1∂1’’

standard for permanent party barracks. Under this standard, each single junior

Sailor has his or her own sleeping area and shares a bathroom and common

area with another member. To promote unit cohesion and team building, the

Marine Corps was granted a waiver to adopt a ‘‘2∂0’’ configuration where two

junior Marines share a room with a bath. Both configurations allow for more

private quarters for our senior Sailors and Marines. Our fiscal year 2003 request reflects a recent change in OSD criteria that gives the Services flexibility

to adjust the proportion of living area and common space within an overall limitation of 66 square meters (710 square feet) per module. The Navy will achieve

these barracks construction standards by fiscal year 2013; the Marine Corps by

fiscal year 2010.

DON BARRACKS CONSTRUCTION REQUEST

Location Spaces Millions of dollars

NS Norfolk, VA ......................................................................................................................... 500 1 $37.3

NAF Andrews, MD .................................................................................................................... 120 9.7

NTC Great Lakes, IL ................................................................................................................. 1,056 43.4

NTC Great Lakes, IL ................................................................................................................. 1,056 41.7

NWS Yorktown, VA ................................................................................................................... 168 15.0

JHCS Larissa, GR ..................................................................................................................... 40 14.8

CNM Guam ............................................................................................................................... 72 13.4

NS Bremerton, WA ................................................................................................................... 264 1 35.1

NAS Atlanta, GA ....................................................................................................................... 92 6.7

MCB Camp Pendleton, CA ....................................................................................................... 400 23.2

MCAGCC 29 Palms, CA ........................................................................................................... 384 25.8

MCB Quantico, VA ................................................................................................................... 200 10.3

MCB Quantico, VA ................................................................................................................... 100 5.0

Total ........................................................................................................................... 4,452 281.5

1 Homeport Ashore. Family Housing Privatization

—Eliminate gang heads. The Navy and Marine Corps remain on track to eliminate the inadequate barracks with gang heads for permanent party personnel 1.

The Navy will achieve this goal by fiscal year 2008; the Marines by fiscal year

2005.

Family Housing Privatization

We are using a two-step approach for PPV. The first step (Request for Qualifications (RFQ) phase) allows a list of proposers to be narrowed to those who are judged

to be highly qualified on the basis of their experience, financial capabilities, and vision for meeting our needs. Those proposers judged to be ‘‘highly qualified’’ (typically

four to six) are then invited to submit technical and financial proposals to achieve

our project objectives. We then select a preferred developer with whom we enter into

exclusive negotiations. In all PPV projects, we have established the following objectives:

—Self-sustaining projects that provide for necessary recapitalization over the

long-term without additional infusions of cash;

—A legally recognized voice in key decisions made over the life of the agreement;

—Flexibility to accommodate unforeseen changes over the life of the agreement;

and
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—Protection of Government interests and minimization of Government exposure

in case of default, poor performance, or non-performance.

DON Family Housing Privatization—Project Awarded

Location No. of homes

Corpus Christi/Ingleside/Kingsville, TX ............................................................... 404

Everett, WA ............................................................................................................ 185

Kingsville (II), TX .................................................................................................. 150

Everett (II), WA ..................................................................................................... 288

San Diego, CA ........................................................................................................ 3,248

New Orleans, LA .................................................................................................... 935

South Texas, TX ..................................................................................................... 661

Camp Pendleton, CA ............................................................................................. 712

Total Awarded ............................................................................................. 6,583

We have now awarded eight PPV projects totaling 6,583 homes. Through the use

of these authorities we have leveraged $135 million in DON funds with $478 million

in private sector capital for a combined investment of $613 million in homes for our

Sailors, Marines and their families. We have effectively expanded our buying power

by stimulating over $4.50 of construction for each $1.00 we have contributed. We

currently have two additional projects in procurement (not yet awarded) and another eight projects in planning. All told, the projects, either in procurement or planning, total 13,792 homes.

DON Family Housing Privatization—Projects in Process

No. of homes

In Procurement:

Beaufort/Parris Island, SC ............................................................................. 1,165

Stewart Army Subpost, NY ............................................................................ 171

Total in Procurement .................................................................................. 1,836

In Planning:

Northeast Region ............................................................................................ 564

Lakehurst, NJ ................................................................................................. 212

Oahu Regional, HI .......................................................................................... 1,978

Mid-South, TN ................................................................................................ 626

San Diego (II), CA .......................................................................................... 4,981

Hampton Roads, VA ....................................................................................... ( 1 )

Camp Pendleton (II), CA ................................................................................ 3,595

Total in Planning ........................................................................................ 11,959

1To be determined.

Private Financing Alternatives for Bachelor Housing

I believe that there are real opportunities for applying PPV authorities to our barracks needs. We held an industry forum last November with developers, lenders,

and property managers. We learned that there is a potential to use private sector

financing to improve bachelor housing. We are developing three bachelor housing

pilot projects—Hampton Roads, VA; Camp Pendleton, CA (Del Mar); and Quantico,

VA (Basic School). We look forward to bringing these proposals to the Committees

in the near future.

Housing Issues

We appreciate Congress extending the military housing public/private venture authorities to 2012. DOD is considering additional legislative changes to improve our

efforts in family housing and remove obstacles for the application of these authorities to bachelor housing, such as combining family and bachelor housing privatization accounts into a single fund to facilitate joint projects.

FACILITIES

Sustainment, Restoration and Modernization

With this budget, the DON is implementing the new DOD methodology for facilities maintenance and repair. ‘‘Sustainment’’ is the amount of funding required for

scheduled maintenance and facility component repairs over the expected service life

of the facility. It does not improve the condition or readiness of the facility. It is
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calculated using the DOD Facilities Sustainment Model (FSM), which considers facilities quantity data (most often square feet), and unit cost factors (most often dollars per square foot) derived from private industry. The calculated sustainment requirement is unique to the DON infrastructure inventory and adds, consistency and

audit ability in determining our requirement. FSM projects inventory gains (new

construction) and losses (demolition, privatization, excess facilities) to arrive at a

total sustainment requirement. The sustainment metric is the percentage funded of

the FSM generated requirement. While competing budget pressures precluded us

from doing better, this budget request meets more than 85 percent of the Department of Navy FSM calculated requirement—much better than in previous years.

‘‘Restoration and Modernization (R&M)’’ is the portion of SRM that goes beyond

sustainment to improve the condition and readiness of the facility, using Operations

and Maintenance as well as military construction funds. The O&M funds help to

correct poorly rated facilities and to recapitalize the inventory. R&M requirements

are based on an investment level to achieve a DOD average 67 year recapitalization

rate, with all facilities satisfactorily sustained. Over the FYDP, R&M (O&M and

MILCON) is funded to eliminate facility deficiencies by 2013. The fiscal year 2003

recapitalization rate is 122 years and the FYDP (03–07) average is 83 years.

Anti-terrorism/Force Protection

Every installation has increased its security posture since the attacks of September 11. Additional security personnel, technology (security systems, detection devices), security fencing, barriers, security boats, and training are being used to enhance our AT/FP posture. The SRM budget includes $147 million in AT/FP projects.

These measures include shatter resistant windows, structural reinforcement, and

building hardening.

The military construction budget request has incorporated AT/FP measures within the scope of each project, where appropriate. These measures include standoff distances, shatter resistant windows, structural reinforcement and building hardening.

These features account for $17.5 million within the projects requested in the fiscal

year 2003 MILCON program.

There are seven military construction projects totaling $107 million that support

specific AT/FP enhancements and/or improvements. These projects were identified

after the September 11 attacks:

—Advanced Explosive Ordnance Disposal Training Facility, Eglin AFB, FL—$6.4

million.

—Shoreline Security Fencing, Naval Station, Norfolk, VA—$2.0 million.

—Installation Services Support Center, Naval Support Activity, Bahrain—$26.0

million.
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—Parking Garage and Perimeter Security Upgrade, Naval Air Station, Sigonella,

Italy—$19.6 million.

—AT/FP Improvements, Naval Shipyard, Kittery, ME—$11.6 million.

—AT/FP Improvements, Naval Shipyard, Portsmouth, VA—$19.7 million.

—AT/FP Improvements, Naval Shipyard, Puget Sound, Bremerton, WA—$21.7

million.

Building Demolition

Our centralized demolition program remains a success story. Defense Reform Initiative Directive 36 directed the Navy and Marine Corps to dispose of excess facilities over the period of fiscal year 1998 through fiscal year 2002. Navy will exceed

its goal of 9.1 million square feet (MSF) in fiscal year 2002. The Marine Corps met

its goal of 2.1 MSF in fiscal year 2000. Both Services will continue the demolition

program. Our fiscal year 2003 budget request continues this effort, with Navy planning to spend $42 million on 50 projects to demolish 2.0 MSF and Marine Corps

planning to spend $5 million on 15 projects to demolish 0.5 MSF. The Navy has expanded the use of the central account funds to allow limited relocation and repair

costs to consolidate functions before demolishing the vacated building. These actions

will eliminate obsolete excess facilities, and further reduce SRM needs.

Energy and Utilities Privatization

To comply with Executive Order 13123 goals, Federal agencies must reduce energy consumption 30 percent by fiscal year 2005 and 35 percent by fiscal year 2010,

using fiscal year 1985 as the baseline. I am pleased to report that we have reduced

consumption by nearly 25 percent through fiscal year 2001, exceeding our target of

24 percent. To meet these goals, we are implementing energy efficient technologies,

conducting energy awareness programs, and using private sector expertise. I am delighted that the DON energy program received two of the four government wide

Presidential Energy Awards presented by the Vice President at a Ceremony on October 18, 2001.

We are also expanding the use of geothermal energy production at Naval Air Warfare Center China Lake, CA and Naval Air Station Fallon, NV. This gives us a cost

efficient method to use private sector financing to generate additional energy in the

western U.S. while using our land for military training needs.

Defense Reform Initiative Directive 49 directed the Services to privatize their natural gas, water, wastewater and electrical systems except where uneconomical or

where precluded by unique security reasons. Privatization is expected to reduce

total ownership costs while upgrading the reliability of our utility systems. The

DON is continuing efforts to privatize, where economically beneficial, 704 systems

at 122 activities worldwide by fiscal year 2005. Proposals are now being evaluated

to privatize utility systems at the Marine Corps base at 29 Palms, CA and Navy

and Marine Corps installations in the Great Lakes and Washington, DC regions.

Facilities Issues

The DOD is considering a number of facilities related proposals, including:

—Reduction in long-term facility maintenance costs.—Expands the demonstration

program under Section 2814 of the fiscal year 2002 National Defense Authorization Bill, now limited to the Army, to allow a single contractor to design, build,

operate and maintain facilities funded with military construction funds. It

would allow additional demonstration projects that seek to reduce life cycle

costs for facilities within the DOD.

—Conveyance of surplus real property for natural resource conservation purposes.—Allows the transfer of environmentally sensitive property with endangered species habitat to a non-governmental organization. This type of property

can now only be transferred to governmental entities. This proposal would expand the field of potential recipients, expanding the opportunity to dispose of

excess property that has limited commercial development potential.

—Amend 10 USC 2810 Construction Projects for Environmental Response Actions.—Based on Congress’ new definition of repair, the Services are not able

to continue to define environmental restoration of soil as repair. The unintended

consequence of this redefinition is that these cleanups would have to be classified as MILCON, with all of the necessary approvals inherent with that funding

source. This proposal would return the status of environmental restoration

projects as repair and allow these cleanup projects to be funded from the Environmental Restoration accounts in the DOD Appropriations Bill. Notification

would be submitted for projects estimated over $10 million.
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PRIOR BASE REALIGNMENT AND CLOSURE

Status

We are now in the home stretch to complete environmental cleanup and property

disposal from the four prior rounds of BRAC, 1988 under Public Law 100–526 and

1991, 1993, and 1995 under Public Law 101–510. We were authorized to implement

a total of 178 actions consisting of 46 major closures, 89 minor closures, and 43 realignments. We have completed closure and realignment of all bases except one

move from leased space to government owned space.

Our focus is now on cleanup and property disposals for 595 parcels at 90 installations. I am pleased to report that to date we have transferred 354 parcels comprising over 69,000 acres. Conveyance actions are complete at 60 of the 90 installations. Still to go are 241 parcels at 30 installations. Completing environmental

cleanup is generally the critical path to conveyance. The fiscal year 2003 budget is

sufficient to meet all regulator requirements and commitments to local redevelopment authorities.

FISCAL YEAR 2001 BRAC HIGHLIGHTS

Cecil Field, FL: 29 acre parcel transferred to the city of Jacksonville, FL

with no-cost economic development authority. Of the 17,037 acres, just 768

acres remain to be conveyed.

Trenton, NJ: final 27 acres of the former Naval Air Warfare Center was sold

for $1.2 million.

Long Beach, CA: 323 acres transferred to the City of Long Beach under a

Port Public Benefit Conveyance. Of the original 1,483 acres, only 235 acres remain to be conveyed.

El Toro, CA: 901 acres conveyed to the Federal Aviation Administration.

Barbers Point, HI: 148 acres transferred to the Hawaii National Guard.

Philadelphia, PA: the last 2.9 acres of the Naval Complex were conveyed to

the Philadelphia Authority for Industrial Development.

Perth Amboy, NJ: 3 acres of the former Naval Reserve Center were sold for

$1 million.

A look ahead

We have ambitious plans for property disposals during the remainder of fiscal

year 2002 and into fiscal year 2003. At Mare Island we have signed early transfer

agreements that will convey approximately 3,670 acres to the City of Vallejo and

the State of California for economic use and development. At Hunters Point, the

Secretary of the Navy signed an agreement with the City of San Francisco to work

with a public/private partnership to accelerate the conveyance of this property. And

at the former Oakland Naval Hospital, we have initiated action with the General

Services Administration to sell the 174-acre property by public sale. We are nearing

conveyance of the final parcels at each of the following locations: Annapolis, Long

Beach, Louisville, Naval Activities Guam, New London, and Orlando, with another

seven locations working toward planned transfer in fiscal year 2003.

CONCLUSION

In conclusion, I believe our infrastructure is well positioned for the future. We are

accelerating the solution to long-standing housing shortfalls for Navy and Marine

Corps families and enlisted personnel. We are making real progress on family housing PPV, and look to apply these tools to bachelor housing. Funding to support our

prior BRAC efforts is on track, and we have a strong environmental cleanup and

property disposal plan for this year and next.

This concludes my statement. I look forward to working with the Committee and

staff to best support our Sailors, Marines, and our Nation.

Senator FEINSTEIN. Thank you very much. Appreciate it. Admiral

Preston and then General?

This was a Marine Corps team, Madam Chairman.

That is a good answer. Very diplomatic. Please proceed, Admiral.

Admiral PRESTON. Madam Chairman, thank you for giving me

the opportunity to come here today and represent Vice Admiral

Totushek——
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Senator FEINSTEIN. Can you pull the mike a little closer and

speak directly into it? Great.

Admiral PRESTON. Thank you for giving me the opportunity to

come and represent Vice Admiral Totushek, the Director of the

Naval Reserve and our some 88,000 Naval Reservists that we have

serving our country. First I would like to thank you for your support in fiscal year 2002. Congress provided the Naval and Marine

Corps reserve some $53 million in budget request and adds to support our Sailors and our reserve Marines as they accomplish our

Nation’s missions and we thank you very much for that.

Our budget for fiscal year 2003 is almost the same. It totals approximately $52 million of which $36 million is for Naval reserve

projects. We believe that these projects are well aligned to the

Chief of Naval Operations and Admiral Totushek’s top priorities for

our naval reserve manpower and readiness.

I will keep it short. Again, thank you for giving me the opportunity to speak today and thank you for the support you have provided to our reserve Sailors and Marines.

Senator FEINSTEIN. Thank you very much. Just a point of clarification, did you say that the Naval Reserve budget totals $56 million this year?

Admiral PRESTON. If I did, I misspoke. It should be $52 million

for Naval and Marine Corps.

Senator FEINSTEIN. Yeah, $51.5 million exactly.

Admiral PRESTON. Yes, ma’am.

Senator FEINSTEIN. Okay. Thank you. General, welcome.

General COLEMAN. Yes, ma’am.

Senator FEINSTEIN. General Coleman.

General COLEMAN. Thank you very much, ma’am. Ma’am, I

would like to thank you for allowing us here this afternoon and tell

you it is a pleasure to appear before you. Top line constraints over

most of the last decade forced us to defer investment in areas that

did not have an immediate impact on near-term readiness, such as

investment in military construction, family housing and maintenance of our existing facilities. We sustained our combat readiness

at the expense of construction because we had no other option.

These were painful decisions because ultimately combat readiness is more than just a well-trained and equipped Marine. I have

been fortunate to visit all of our Marine Corps bases and have spoken with many of our Marines and their families. I am pleased to

report that they are more optimistic than at any time in the past.

Family housing, bachelor housing and operational facilities construction supported by this committee has finally begun to become

visible on Marine Corps installations. Our fiscal year 2003 military

construction family housing and reserve budget provides over $500

million. Our proposals will support most of our urgent requirements for readiness and quality of life construction.

Overall our program will continue to provide in excess of $50 million for new barracks and construction. I am happy to report that

in fiscal year 2003, the administration supported the Commandant’s request to increase family housing construction funding

by 19 percent over fiscal year 2002. In fiscal year 2003, all these

projects continue to focus on our enlisted Marines.
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Every dollar you spend for our facilities is an investment that

pays long-term dividends in readiness, retention and mission accomplishment. The Marine Corps thanks you for your support,

ma’am.

Senator FEINSTEIN. Thank you very much, General Coleman.

I will begin with the questions now. Secretary Johnson, the

Navy’s budget is reduced over 20 percent from last year’s enacted

budget. Admiral Blair, the Pacific Command Commander, recently

told a House Subcommittee and I quote, ‘‘We can’t sustain forever.

MILCON is usually last on the list of priorities.’’ Given this statement from a Commander that controls more of the globe than any

other CINC, how do you justify a request 20 percent lower than the

previous year?

Mr. JOHNSON. Certainly we would like to have had the opportunity to take care of more of his and other people’s desires. We

looked at the overall requirements for the Department of Navy and

Department of Defense. As I mentioned earlier, our overall infrastructure installation budget has gone up.

The MILCON is down the 20 percent you talked about, but the

family housing is up 15 percent and bachelor housing. So overall

for the installations, we have done pretty well. We have not done

as well as we did last year. In military construction alone, last year

was a very good year. This is the second best year in the past six,

exceeded only by last year.

Senator FEINSTEIN. Admiral Pruett, do you consider this request

adequate?

Admiral PRUETT. Yes, ma’am. I think our emphasis is and I am

sure you may have—staffs may have briefed you or you have other

information on the OSD facility sustainment model, we are taking

an approach where we have some very good metrics. The Secretary

mentioned that we have been using this model for the first time

this year and we are focusing on funding sustainment of the facilities and sustainment so that they do not further deteriorate. And

that has caused some increase in that part of our installations

funding. Also base operating support, which sometimes eats into

our sustainment funding, is funded at a better level this year. So

I think that our focus from here should be to improve on what we

do to take care of C3 and C4 deficiencies.

FLAG OFFICER HOUSING

Senator FEINSTEIN. All right. While you are answering questions,

let me ask you one more. I would like to begin by saying that I

think the Navy is to be commended for its efforts to eliminate inadequate family housing by 2007 and the Marine Corps for your 2005

goal. I have a question though regarding a $1.2 million request for

two general officer quarters in Italy. Can you tell us what that is

all about?

Admiral PRUETT. Yes, ma’am. There is a new NATO joint command headquarters in South Central Europe. The Navy has been

designated by EUCOM as the administrative agent. Typically, the

projects that are funded by the U.S. for NATO installations are the

administrative and support type facilities, whereas NATO funds

the operational facilities. This project is for two flag officers who

are in high risk billets. The project builds two 3,000 square foot
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homes. There’s a high geographic area cost factor of about one and

a quarter. The fact that it is just two projects does not give us

much economy of scale.

We do have some added cost because there is a requirement to

manufacture and factory build housing using U.S. firms and then

ship to the project site. And in this particular location, I do not

have some of the specifics, but there is a significant cost in utility

mains and site improvements. But the cost really is seismic bracing, safe haven rooms and other force protection types of issues.

Senator FEINSTEIN. Is this on-base housing?

Admiral PRUETT. Yes, ma’am. It is in the compound that is being

constructed.

Senator FEINSTEIN. And you need all the special security requirements for on-base housing?

Admiral PRUETT. Well, the safe haven rooms are a requirement

as we understand it, and the seismic bracing is another piece of it,

which is not ATFP. That is more for the seismic standards.

Senator FEINSTEIN. Are there any other more cost-efficient alternatives?

Admiral PRUETT. None that I have available to address, ma’am.

Senator FEINSTEIN. Okay. General Coleman, the Marine Corps

has released a fiscal year 2003 unfunded priorities list that includes 30 MILCON and family housing projects totaling over $400

million. Why is that? That sounds like the Marine Corps funding

and the President’s budget falls short of what the Corps actually

needs. Can you comment on the discrepancy please?

General COLEMAN. No, ma’am. Excuse me. Yes, ma’am. I would

just say that it is just the way we prioritize. I feel that the Commandant’s unfunded priority list is just those things that we were

not able to fund for originally, but I would not say that we were

underfunded, ma’am.

Senator FEINSTEIN. So there are no priorities on that list?

General COLEMAN. I beg your——

Senator FEINSTEIN. Is that correct?

General COLEMAN. You say there are none, ma’am?

Senator FEINSTEIN. Yes.

General COLEMAN. Yes, ma’am. They are—the Commandant together with I&L (Installation & Logistics) comes up where we decide what our list should be. The list that you have seen is in no

prioritized order.

Senator FEINSTEIN. Well, now I am talking about the unfunded

priority list——

General COLEMAN. I’m sorry.

Senator FEINSTEIN [continuing]. And what you’re saying is That

list is in no priority order? I don’t know that I am understanding

you correctly.

General COLEMAN. Well, I—and that is my fault. Ma’am, the list

that you should have received or the list that you received is a list

of unfunded items, but the list—the only one that knows the priority of that list would be the Commandant, ma’am.

Senator FEINSTEIN. Oh, I see.

General COLEMAN. The order of precedence.

Senator FEINSTEIN. Okay. There are 30 MILCON and family

housing projects on that list and they are all unfunded and what
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you are saying is then they are in no priority order. The only one

that knows what the priority is, is the Commandant?

General COLEMAN. No, ma’am. I misspoke. Excuse me. That is a

prioritized list. I am sorry, ma’am. I misunderstood you. The list

that you have is a prioritized list. I apologize.

Senator FEINSTEIN. The list I have what?

General COLEMAN. It is—the unfunded prioritized list is in

prioritized order.

Senator FEINSTEIN. All right. That——

General COLEMAN. I apologize, ma’am.

Senator FEINSTEIN. Thank you very much. Secretary Johnson,

last year the Navy did not request—we have talked about this—

adequate funding for BRAC environmental cleanup. Do I have your

assurances that the Navy’s BRAC budget for 2003 is sufficient to

meet all of your commitments and obligations?

Mr. JOHNSON. It is all of our known commitments when we put

it together. As we talked earlier, you never know what comes up,

but it certainly is fully funded to the best of our knowledge. If I

may follow on to General Coleman, the Navy and all services presented their unfunded priority lists. The Navy list did not include

the MILCON breakout. That will be available if you want it, they

had the amount, but not the amount——

Senator FEINSTEIN. I think it would be helpful if we could have

it. Appreciate that very much.

Mr. JOHNSON. And I am sure all services did the same thing.

Senator FEINSTEIN. And again, let me just thank you because on

January when we signed the Hunter’s Point agreement, it was the

first time a meaningful agreement has actually been signed and it

is my understanding that the Navy has requested $36 million for

environmental cleanup at the base. May I ask you how those funds

will be allocated and whether they are sufficient to cover the obligation?

Mr. JOHNSON. I cannot give you the specific allocations among

parcels, but they are sufficient in 2003. After 2003, we think there

will be another $68 million to complete. That is to the best of our

knowledge.

We are working with the city and the contractor team to

prioritize our work. We finished parcel A. We are working on B. We

will continue to work on E, which is a landfill. As we move from

A through D we are working in essence on all of them, but in the

priority established by the city and their developer team.

Senator FEINSTEIN. Thank you. When you testified before the

Senate Armed Services Subcommittee on Readiness 2 weeks ago,

you talked at some length in your prepared statement on the problem of encroachment. And one of the examples you cited was Naval

Air Base Coronado, where you said there was a loss of over 80 percent of its training beaches because of encroachment, and that the

Navy has had to substantially alter training activities and conduct

them elsewhere. Do you have any requests in this budget for land

acquisition and future years defense for training sites to accommodate this problem?

Mr. JOHNSON. We do not for Coronado. We have done very well

there with the nesting of the endangered birds. We have increased
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their nests and also their population obviously. In that case, our

SEALS work——

Senator FEINSTEIN. Is the encroachment from birds? Is that what

you are——

Mr. JOHNSON. Yes.

Senator FEINSTEIN. I thought it was development. No?

Mr. JOHNSON. Not at Coronado. In fact, developers indirectly

cause things, but I do not think at Coronado. At Pendleton to the

north, developers take up the available land and the endangered

species end up being on the only land left between Los Angeles and

San Diego at Camp Pendleton. At Coronado, we have been helping

the species grow. Our Marines and sailors go out and protect nests,

move them and at certain times a year we cannot use the beaches

because of that and other times we have to be careful what parts

we use. So that is strictly an endangered species. Now again, developers help because they take up other available land.

Senator FEINSTEIN. Oh, are you saying that the SEALS cannot

conduct water exercises because of nests on the beach?

Mr. JOHNSON. They are——

Senator FEINSTEIN. What are those nests?

TRAINING AREAS ENCROACHMENT

Mr. JOHNSON. They are constrained by the nests because we protect them and they have certain marked-off areas you cannot use.

And the two types are the California Least Tern. Back in 1987,

there were 30 nests. In 1993, 187. In our conservation effort, we

have built it to 925. We have done very well, but we have also decreased our training space.

The other one is the Western Snowy Plover nests. In 1987, there

were zero. By 1992, we had 12. Now we have 49. So we are proud

of what we are doing to help endangered species, but at the same

time, it does constrain our maneuver area.

Senator FEINSTEIN. So what are you doing to carry out the SEAL

exercises at Coronado?

Mr. JOHNSON. We worked with the environmental groups and we

mark off certain areas. There are rules about the number of birds

and other things that you can harm or potentially harm. So we

have to restrict our activities. At Coronado, we continue to do it,

we work around the birds.

Others, like San Clemente, we have a bigger problem in that certain times of the year during their breeding cycle, we cannot fire

into the island. Other times we have to be careful about starting

fires. But we work very carefully with the environmentalists. We

are working with the Department of Defense, all the services are,

to try put together a package that will be coordinated throughout

the Administration and come to you to help us both from a legislative standpoint to regulatory, we can do that within the administration—and administrative standpoint.

Senator FEINSTEIN. But, basically you are able to carry out your

exercises one way or another?

Mr. JOHNSON. Yes, ma’am. But it is more and more difficult. You

will never find a Marine or sailor who will tell you they cannot

carry out their mission. The Marines for instance, if we may for a

moment, when they do amphibious exercises, they get on the ships,
101

go down to San Clemente, approach the beach and oftentimes they

cannot land there. So they administratively go up to Camp Pendleton. There is only 500 yards on the 17-mile beach of Camp Pendleton that they can land on.

Senator FEINSTEIN. Let me ask you this. Does the Endangered

Species Act take precedence over national security?

Mr. JOHNSON. Sometimes it does. We have something called the

Sikes Act, which allows us to do an integrated Natural Resources

Protection Plan—Management Plan, I think it is. And that takes

everything into consideration, the military needs, the endangered

species and so forth.

Some would say that you also have to have habitats, critical

habitats for the endangered species. We say the Sikes Act NRMP

is sufficient and we are trying to get that accepted by all agencies.

So far the Fish and Wildlife have accepted it, but some people are

suing us about it. Interesting enough, one of the suers is a group

of developers.

Senator FEINSTEIN. What is, just out of curiosity, the nature of

their suit? Well, because development would certainly come much

lower in terms of priority than national security.

Mr. JOHNSON. Not in their eyes.

Senator FEINSTEIN. Not in?

Mr. JOHNSON. Their eyes. No. They would like to build right up

to the base boundary and push all the birds, animals and so forth

into the sanctuary of our military bases. I believe early on you

asked if we were building some buffers around bases. The Army

has the best example so far down at Fort Bragg. They got some environmental easements around the base. We are trying to do that

at Camp Lejeune and we’re also trying to do some in California,

but land is awfully hard to procure in California.

Senator FEINSTEIN. Well, if I can be helpful, let me know

because——

Mr. JOHNSON. I have heard that you——

Senator FEINSTEIN [continuing]. We do want you to carry out

your exercises and there is probably a way through some form of

habitat conservation plan to make areas available in exchange for

committing areas for preservation. But I would be happy to work

with you in that regard.

Mr. JOHNSON. We would like to welcome you for a visit at Camp

Pendleton when you are in California sometimes—Senator Feinstein: Thank you. I would love that. And show you the challenges.

Senator FEINSTEIN. Thanks very much, Secretary. Admiral Preston, of all the service requests submitted in this budget, yours remains virtually unchanged from last year’s amount. Although it is

meager, your budget is strong. What have you done to maintain

that level and avoid a cut? You seem to maybe have some magic

formula.

NAVY AND MARINE CORPS HOUSING

Admiral PRESTON. I do not think we have a magic formula. We

have some pretty strong requirements and we have been very fortunate to get those identified and supported, ma’am.

Senator FEINSTEIN. And what are those requirements?
102

Admiral PRESTON. Well, we have six projects that we are looking

at in 2003. One of them is bachelor enlisted quarters at NAS Atlanta that will give us approximately 92 more spaces, which is

something we really need to support our Sailors’ quality of life,

quality of service. We have three projects in New Orleans again to

support our readiness and our ability to support the operational

units there. We are building a new reserve center.

We would like to build a new reserve center in Montana, which

we feel is very important, in Billings, to maintain the Navy presence there. And we are also looking at expanding the Navy and

Marine Corps Reserve center at Little Creek in Norfolk, Virginia,

which we need because of the growth we have there.

Senator FEINSTEIN. Thank you very much.

Admiral PRESTON. Yes, ma’am.

Senator FEINSTEIN. General——

Admiral PRESTON. I’d like to give a plug here.

Senator FEINSTEIN. Yes. Please.

Mr. JOHNSON. Our reserve forces are very important at all times,

but certainly now we have them around the world, around the

country working as part of the total force team and we are very

proud of what they do and very pleased to have them supported so

well by the Congress and the service.

Senator FEINSTEIN. Thanks, Secretary. I thought there may be

some magic formula there with Mitch Daniels that I was not aware

of, but we will let it go. General Coleman, you have stated that

family housing at Quantico would be fixed by 2003. However, your

unfunded priority list lists the need for new barracks bases at the

same facility. How are you going to accomplish these goals and how

does the Marine Corps plan to address the inadequate barracks

listed as unfunded priorities?

General COLEMAN. Yes, ma’am. Remembering, ma’am, that we

look at family housing and BEQs in two different frames, ma’am.

But anyway to answer the question, the Marine Corps because of

the plus up in the basic allowance for housing along with—and

that was about a 19 percent increase in some areas—and the increased PPV from Camp Pendleton phase two, we are going to be

able to take the money and combine those two projects and fix all

family housing at Quantico. Now we will still have some fixes in

the bachelor quarters, but with 2003 funds, we will fix all family

housing at Quantico.

Senator FEINSTEIN. 2006? I thought it was 2005?

General COLEMAN. No, ma’am. 2003, we will fix——

Senator FEINSTEIN. Oh, just in Quantico?

General COLEMAN. Yes, ma’am. Quantico.

Senator FEINSTEIN. All right. Thank you.

General COLEMAN. Yes, ma’am.

Senator FEINSTEIN. Thank you very much.

Mr. JOHNSON. If I may add something——

Senator FEINSTEIN. Secretary?

Mr. JOHNSON. We are trying to work a pilot on the bachelor

quarters PPV, Public Private Venture and we wanted three locations. A Navy one at Norfolk, which is fairly large. One is down

near Oceanside, it is called Del Mar in Camp Pendleton and then
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with that one also one at Quantico. So the barracks you talk about

we would like to have in a pilot.

We would like to do these pilots to prove number one, that they

are financially proper and number two, that they provide the proper housing for our Marines and sailors and three, that it makes

sense not only to us, but also to the Congress and we have a road

map to move forward if this proves successful.

Senator FEINSTEIN. Thank you very much.

Admiral PRUETT. Last year Admiral Blair was good enough to fill

me in on his needs at Guam, particularly with the new submarines

and my understanding is that you have 3,000 service members currently in Guam and they are going to be increased by an additional

1,000. And my understanding is that there is a need for an elementary and a high school at a cost of $40 and $35 million respectively.

Admiral Blair said that these schools and another $7 million in

Korea for a school did not make the DOD education activity budget

cut. What are you going to do about that?

Admiral PRUETT. Ma’am, we are working with the DOD education activity which includes the Department of Defense dependent schools and well, that is the group that is affected by these

schools in Guam. There are two schools as you mentioned: the high

school, which was never intended to be a permanent school or facility anyway, it was the old headquarters for COMNAVMAR; and

then there is another one that is an old building for the middle

school and for the elementary school. We are working with that

agency, DODEA, and looking at what we can do with our 2004

budget or their 2004 budget to see what can be done to fund those

two schools. That is where we are now. Admiral Fargo was——

Senator FEINSTEIN. So you have pushed it out a year essentially?

Admiral PRUETT. Well, we have not necessarily pushed it out a

year as much as we have had Admiral Fargo working—he has put

some emphasis on it and we are just now getting that emphasis

and we are trying to see what we can do with DODEA.

OVERSEAS FINANCIAL CONTRIBUTION

Senator FEINSTEIN. Okay. Just one final question. It is my understanding that this year Japan and Korea are going to contribute

$942 million in financial assistance and I think I heard somewhere

that Korea was going to contribute 50 percent for housing in

Korea? I was visited by a Korean parliamentary delegation and I

thought that is what they said. What is the percentage that Japan

contributes?

Mr. JOHNSON. It is in essence 100 percent, but I hope David can

give——

Admiral PRUETT. It is for new construction, ma’am, facilities that

are identified that need to be constructed to support our forces. It

is 100 percent. If the——

Senator FEINSTEIN. Both Japan and Korea?

Admiral PRUETT. No, ma’am. Just for Japan.

Senator FEINSTEIN. Oh, I see. All right.

Admiral PRUETT. I cannot address the—it is called the CDIP program, Combined Defense Program In Korea. I do not know the figure there. I will have to check that, but——
104

Senator FEINSTEIN. Well, is that $942 million all Japanese

money or is that a combination of both?

Admiral PRUETT. I am not familiar with that figure, ma’am, as

far as what that split is, but I do know it is 100 percent for Japanese contribution to our construction. When it comes to replacement facilities or major rehabs, that is when we pick up the tab.

Senator FEINSTEIN. And the Korean situation, that is 50 percent.

Is that correct?

Admiral PRUETT. I cannot answer that.

Mr. JOHNSON. We will give you something for the record.

Senator FEINSTEIN. Could I get some information on that reimbursement and what the standard is and if other Nations other

than Japan and Korea are doing the same thing?

[The information follows:]

Japan and Korea are planning to contribute $942 million in financial assistance.

In the proposed Japan fiscal year Facilities Improvement Program (FIP), the U.S.

expects to receive $801 million of which $122 million for Navy and $133 million for

Marine Corps. The Korean cost-sharing programs include Combined Defense Improvement Program (CDIP) and Republic of Korean Funded Construction (ROKFC).

The calendar year 2001 programs are $47 million and $95 million respectfully. The

Navy received $1.1 million in each program. The calendar year 2002 programs are

under development.

Mr. JOHNSON. There are some others who contribute some, but

Japan is far and away the biggest and they are 100 percent and

we will give you what we know about Korea, but we have very little Naval forces in Korea.

Admiral PRUETT. Right.

[The information follows:]

Japan contributes 100 percent for new construction of all but exempted projects

such as those related to offensive operations and some Morale, Welfare and Recreation (MWR) facilities. Korea funds 100 percent related to improved combat operations, war reserves and combined U.S./ROK operations.

Senator FEINSTEIN. Is this just Navy or was this Army, too?

Admiral PRUETT. This is Navy.

Senator FEINSTEIN. It is just Navy?

Admiral PRUETT. Yes, ma’am.

Mr. JOHNSON. We will give you—for the record, ma’am.

ADDITIONAL COMMITTEE QUESTIONS

Senator FEINSTEIN. Okay. Thank you very much. That takes care

of my questions. If anybody has anything to add, I would be happy

to hear it. If not, then I hope you can get along with these budgets.

Mr. JOHNSON. We appreciate your help and we look forward to

being your partner.

Senator FEINSTEIN. Thank you. I will be happy to do what I can.

Thank you very much, gentlemen. And we will go now to panel

two.

[The following questions were not asked at the hearing, but were

submitted to the Department for response subsequent to the hearing:]
105

QUESTIONS SUBMITTED TO H.T. JOHNSON

QUESTIONS SUBMITTED BY SENATOR DIANNE FEINSTEIN

MILCON FUNDING

Question. Admiral Vernon Clark reportedly told the House Armed Services Committee that the Navy will be $8.67 billion short in funding in fiscal year 2003. Do

you know if any of that shortfall includes Milcon? (If so, what is the Milcon shortfall?)

Answer. Admiral Vernon Clark’s letter of 20 February 2002 to Congressman Skelton provided a list of requirements not selected for funding in the fiscal year 2003

President’s Budget. The list provided by the Chief of Naval Operations included

$667 million of military construction (active and reserve) projects.

Question. Does the Navy have any unfunded Milcon priorities? Would you provide

the Committee with a list of your unfunded priorities, in priority order.

Answer. Admiral Vernon Clark’s letter of 20 February 2002 to Congressman Skelton provided a list of requirements not selected for funding in the fiscal year 2003

President’s Budget. The list provided by the Chief of Naval Operations included

$667 million of military construction (active and reserve) projects. Attached is the

list of projects in priority order.

CNO UNFUNDED REQUIREMENT PRIORITY #52 MCON ATFP

[In thousands of dollars]

Activity PNO Title Current Estimate

MCON DESIGN ............................................................ 203 MCON DESIGN .................................................... 15,064

CORPUS CHRISTI TX NAS ........................................... 355 PUBLIC SAFETY FACILITY .................................... 15,790

INDIAN HEAD MD NSWCTRDIV ................................... 171 AT/FP IMPROVEMENTS ........................................ 14,000

YORKTOWN VA ............................................................ 617 MAIN GATE IMPROVEMENTS ............................... 2,610

MILLINGTON TN SUPPACT .......................................... 360 IMPV GATE/PERIMTR SECURITY .......................... 4,200

KITTERY ME PORTSMOUTH NSY ................................. 280 GATE 2 IMPROVEMENTS ..................................... 2,350

MERIDIAN MS NAS ..................................................... 310 AIRFIELD PERIMETER FENCING .......................... 5,150

WHITING FLD FL NAS ................................................. 245 INSTL/RELOCATE PERIM FENCE .......................... 3,020

GREAT LAKES IL NTC ................................................. 771 REPLACE PERIMETER FENCE .............................. 3,610

PEARL HARBOR HI NSY ............................................. 905 PERIMETER/SECURITY LIGHTG ............................ 20,637

MAYPORT FL NS ......................................................... 774 SECURITY BLDG PASS/ID OFC ............................ 1,770

JACKSONVILLE FL NAS ............................................... 268 AIRFLD PERIM SECURTY ENHAN ........................ 3,230

EARLE NJ NWS ........................................................... 034 MAIN GATE IMPROVEMENTS ............................... 4,610

LITTLE CREEK VA NAVPHIBSE .................................... 535 GATE 1 IMPROVEMENTS ..................................... 3,860

NEWPORT RI NAVSTA ................................................. 457 GATE 1 (MAIN) IMPROVEMENTS ......................... 2,440

WHIDBEY IS WA NAS .................................................. 075A AULT FIELD SECURTY FENCING .......................... 4,600

NEWPORT RI NS ......................................................... 345 CONSOL FIRE/POLICE&SEC FAC ......................... 6,660

MECHANICSBURG NAVSUPPACT ................................. 575 NORTH GATE IMPROVEMENTS ............................ 2,820

MECHANICSBURG PA NAVICP .................................... 573 OXFORD GATE IMPROVEMENTS .......................... 4,150

LITTLE CREEK VA NAVPHIBSE .................................... 406 POLICE & SEC OPRS FAC ................................... 4,970

LITTLE CREEK VA NAVPHIBSE .................................... 376 PERIMETER SECURITY FENCE ............................ 2,760

DAHLGREN VA NSWCTR DIV ....................................... 305 INFRASTRCT ASSURANCE FAC ............................ 6,400

BETHESDA MD NSWCCARDEROCK ............................. 901 SECURITY FACILITY ............................................. 5,800

GREAT LAKES IL NTC ................................................. 773 RELOCATE SECURITY FACILITY ........................... 4,430

KEYPORT WA NUWC DIV ............................................ 392 EMERGENCY COMMAND CENTER ....................... 7,600

ORLANDO FL NAWCTSD .............................................. 003 SECURTY/PERIMTR FENCE/WALL ........................ 2,370

PATUXENT RIVER MD AWCACDV ................................ 986 FORCE PROT IMPV GUARD HSE ......................... 13,400

NEW LONDON CT NSB ................................................ 446 LOWER BASE PARKING FAC ................................ 9,000

DAHLGREN VA NAVSPACECOM ................................... 017 PHYS SECTY ENHANCE (CENT) ........................... 7,390

YORKTOWN VA NWS ................................................... 460 STATION SECTY PERIM FENCE ........................... 3,650

PEARL HARBOR HI NS ............................................... 624 MAIN GATE IMPROVEMENTS ............................... 8,600

MAYPORT FL NS ......................................................... 776 AT/FP CENTRALIZED PARKING ............................ 3,350

BARKING SANDS HI PMRF .......................................... 413 SECURITY FENCING & LIGHTING ........................ 8,000

LUALUALEI HI NM ....................................................... 177 PERIMETER/SECURITY LIGHTG ............................ 4,100

PEARL HARBOR HI NS ............................................... 616 PERIMETER/SECURITY LIGHTG ............................ 1,600

PATUXENT RIVER MD AWCACDV ................................ 123 SECURE MAIL FACILITY ...................................... 2,040

KEFLAVIK ICELAND NAS ............................................. 565 BASE PERIMETER SECTY FENCE ........................ 2,600

PEARL HARBOR HI FISC ............................................. 194 SECURITY FENCING ............................................ 2,000

BARKING SANDS HI PMRF .......................................... 416 SECURITY FACS & PARKING ............................... 2,000

MILLINGTON TN SUPPACT .......................................... 363 VEHICLE STAND-OFF ........................................... 4,500

DAHLGREN VA NSWCTR DIV ....................................... 300 EMERGENCY OPERATIONS CTR .......................... 5,000
106

CNO UNFUNDED REQUIREMENT PRIORITY #52 MCON ATFP—Continued

[In thousands of dollars]

Activity PNO Title Current Estimate

KEY WEST FL NAF ...................................................... 901 CVQ AT/FP UPGRADES ........................................ 2,120

KEY WEST FL NAF ...................................................... 903 CVQ & GALLEY AT/FP UPGRADE ......................... 5,070

JACKSONVILLE FL NAS ............................................... 270 GUARD AND WATCH TOWERS ............................. 3,400

NORFOLK VA NS ......................................................... 994 SECURTY/PERIMTR FENCE/WALL ........................ 4,000

LUALUALEI HI NM ....................................................... 167 SECURITY LIGHTING ............................................ 5,800

LUALUALEI HI NM ....................................................... 166 SECURITY LIGHTING ............................................ 5,400

PEARL HARBOR HI NB ............................................... 002 SECURTY/PERIMTR FENCE/WALL ........................ 12,000

PEARL HARBOR HI PWC ............................................. 706 SECURTY/PERIMTR FENCE/WALL ........................ 4,500

KEY WEST FL NAF ...................................................... 902 CVQ AT/FP UPGRADES ........................................ 1,790

NEW LONDON CT NSB ................................................ 433 REALIGN PERIM FENCE/NEW RD ........................ 3,200

TOTAL ............................................................ .......... ............................................................................. 269,411

CNO UNFUNDED REQUIREMENT #98 RECAPITALIZATION ($340M)

[In thousands of dollars]

Activity PNO Title Current estimate

OMN/OMNR ................................................................. .......... ............................................................................. 83,200

MCON:

MCON DESIGN ................................................... 203 MCON DESIGN ($400M Design) ......................... 13,000

CHINA LAKE CA NAWCWPNDIV .......................... 268 BEQ TRANSIENT .................................................. 6,330

NEW LONDON CT NSB ....................................... 463 REPLACE PIER 6 ................................................. 24,800

NORFOLK VA NS ......................................................... 526 A/C MAINTENANCE HANGARS ............................. 37,500

SIGONELLA ITALY NAS ................................................ 635 BASE OPS SUPPORT I ......................................... 32,300

SAN DIEGO CA NAS NORTH IS ................................... 751 SQUADRON OPERATIONS FAC ............................. 36,930

CHINA LAKE CA NAWCWPNSDIV ................................. 521 AIRFIELD PAVEMENT UPGRADE .......................... 13,260

EL CENTRO CA NAF ................................................... 207 APRON & HANGAR RECAP .................................. 47,850

INDIAN HEAD MD NSWCTRDIV ................................... 160 WATER SYSTEM IMPROVEMENTS ........................ 15,270

SAN DIEGO CA NAS NORTH IS ................................... 748 TAXIWAY/TOWER ................................................. 14,040

TOTAL ............................................................ .......... ............................................................................. 241,280

MCNR:

MCNR DESIGN ................................................... 223 MCNR DESIGN .................................................... 1,100

ALBANY NY NMCRC .......................................... 598 RESERVE CENTER ............................................... 10,000

ASHEVILLE NC NRD ........................................... 596 RESERVE CENTER ............................................... 3,140

NEW ORLEANS LA NAS JRB ....................................... 187 PERIMETER ROAD AND FENCE ........................... 1,280

TOTAL ............................................................ .......... ............................................................................. 15,520

CNO UNFUNDED REQUIREMENT #100 RECAPITALIZATION AND C3/C4 DEFICIENCY CORRECTION

($173M)

[In thousands of dollars]

Activity PNO Title Current estimate

OMN/OMNR ................................................................. .......... ............................................................................. 32,700

MCON:

MCON DESIGN ................................................... 203 MCON DESIGN ($400M Design) ......................... 7,400

LEMOORE CA NAS ............................................. 217 AIRCRAFT MAINT HANGAR .................................. 24,880

WASHINGTON DC NRL ................................................ 010 ADVANCED COMPUTING FAC .............................. 12,800

EL CENTRO CA NAF .......................................... 201 BEQ AND GALLEY ............................................... 26,530

PUGET SOUND WA NAVSHIPYD .................................. 346 CVN MAINTENANCE COMPLEX ............................ 18,600

NORFOLK VA LANTFLTHQSPACT .................................. 830 CLF/TYCOM HQ FAC INC I .................................. 45,000

TOTAL ............................................................ .......... ............................................................................. 135,210
107

CNO UNFUNDED REQUIREMENT #100 RECAPITALIZATION AND C3/C4 DEFICIENCY CORRECTION

($173M)—Continued

[In thousands of dollars]

Activity PNO Title Current esti- mate

MCNR:

MCNR DESIGN ................................................... 223 MCNR DESIGN .................................................... 90

ATLANTA GA NAS ............................................... 349 PW COMPLEX ...................................................... 5,000

TOTAL ............................................................ .......... ............................................................................. 5,090

QUESTIONS SUBMITTED BY SENATOR KAY BAILEY HUTCHISON

NATO SUB-REGIONAL HQ

Question. Secretary Johnson, I understand that the Navy has several projects in

the fiscal year 2003 in support of new sub-regional NATO headquarters in Greece

and Spain. Can you tell me how those requirements are developed and how is it

determined that the Navy will fund them?

Answer. The Department of the Navy (DON) has Executive Agent responsibilities

for U.S. support facilities related to NATO in Spain and Greece. DON, as Executive

Agent, is responsible for providing support facilities, such as housing and other community support facilities, to U.S. forces at these locations. Facility requirements are

determined based on planning criteria utilized for all DON projects.

Question. What additional projects related to the Larrisa and Madrid headquarters are in the Navy’s outyears Milcon plans?

Answer. At this time, the Department of the Navy does not have plans to provide

any other facilities at Madrid and Larissa beyond those included in the fiscal year

2003 President’s Budget Request.

BRAC

Question. Secretary Johnson, I understand that the Navy has fully funded the

BRAC account in the fiscal year 2003 budget request. Is that true?

Answer. Yes, the fiscal year 2003 budget request of $261 million includes sufficient funds to meet agreements reached with local redevelopment authorities, State

and Federal regulators and communities affected by the previous BRAC rounds for

environmental cleanup of the properties.

Question. Should the Congress expect that the Navy will fully fund the BRAC account in future budget submissions?

Answer. Yes. Completion of the previous BRAC program is a high priority for the

Department of the Navy.

FACILITIES REPLACEMENT

Question. Admiral Pruett, I note that the rate at which we replace our facilities

has gone from 106 years to 122 years in the 2003 budget. There was a lot of promises made last year in the budget regarding facilities. Are we back to business as

usual with regard to neglecting our facilities?

Answer. The Navy is committed to providing adequate funding to (1) sustain our

facilities in a current state of acceptable readiness, and (2) replace and modernize

those facilities, which have outlived their useful life and function. This year’s budget

request focuses on providing funding for sustaining facilities in a C1/C2 condition

of readiness. Although the fiscal year 2003 military construction budget request is

lower than last year’s budget, it is the 2nd largest military construction budget request in 6 years. The Navy is developing its future year’s military construction program such that the Navy can achieve the Department of Defense goal of a 67-year

recapitalization rate by fiscal year 2007.

CONDITION OF FACILITIES

Question. What kind of message are we sending our young Sailors and families

about the condition of the facilities in which they live, work and train?

Answer. The Navy is committed to providing a better quality of life and workplace

to our Sailors and their families:
108

—We are on track to eliminating all inadequate family housing by fiscal year

2007 through a combination of military construction and public-private ventures.

—We are beginning to bring our Sailors off of their ships while in homeport and

plan to complete this initiative by fiscal year 2008.

—The Navy is replacing and modernizing its bachelor quarters in accordance with

the Department of Defense (DOD) standards that provide much more privacy

for the service members. The Navy plans to complete this initiative by fiscal

year 2013.

—Finally, the Navy is replacing and modernizing its workplace by programming

and budgeting for projects to replace aging facilities. The Navy is developing its

future year’s military construction program such that the Navy can achieve the

DOD goal of a 67-year recapitalization rate by fiscal year 2007.

Through the initiatives outlined above, the Navy is sending the message that it

wants to improve the quality of service for the Sailors and their families in and out

of the workplace.

HOMEPORT ASHORE

Question. Admiral Pruett, can you explain your ‘‘Homeport Ashore’’ initiative and

what is the Navy’s long-term plan to get Sailors off of ships?

Answer. The Navy has determined that single enlisted Sailors who must live on

ship while in Homeport have the worst living conditions in Department of Defense.

The 1999 Quality of Life Domain Study reflected that these Sailors are the least

satisfied with Navy life. As a result, both the Secretary of the Navy and the Chief

of Naval Operations are committed to providing shipboard Sailors a bachelor quarters room when they are in homeport. The Navy has drafted a plan to accelerate

moving shipboard Sailors ashore by construction of 1∂1 bachelor housing units to

temporarily accommodate four Sailors in each unit which would allow junior shipboard Sailors to live off ships by 2008.

Question. Currently, how many additional barracks rooms do you need to accommodate all of the single Sailors who are living on ships?

Answer. The Navy needs to construct about 10,850 rooms to accommodate an additional 21,700 Sailors ashore. This does not include the requirement for shipboard

Sailors in Japan (to be satisfied by the Government of Japan), nor does it include

rooms already provided in Hawaii and Guam, or rooms already funded in fiscal year

2002 at San Diego and Mayport.

FORCE PROTECTION IN PRIVATIZED BQS

Question. Secretary Johnson, I understand that the Navy is looking to privatize

barracks, but there are still financial issues that must be worked out. How do you

address the issue of force protection with privately opened and operated barracks?

Answer. We will include Anti-Terrorism/Force Protection measures in our projects

as deemed necessary as a result of a risk assessment. We will also establish priorities for occupancy that, where necessary, will avoid potential compromises of a

base’s mission or security without adversely affecting a project’s viability.

Question. What are the major cost concerns that will potentially impact this initiative?

Answer. The major elements of cost in barracks privatization are the initial Government investment, if necessary, and the annual housing allowances required. We

have been able to leverage limited resources to accelerate elimination of inadequate

family housing through privatization, and are pleased with the success we have enjoyed with those efforts. We would like to build on that success with similar efforts

for barracks. We are committed to ensuring that barracks privatization initiatives

are cost-effective on a life cycle basis.
(109)

DEPARTMENT OF THE AIR FORCE

STATEMENT OF NELSON F. GIBBS, ASSISTANT SECRETARY OF THE

AIR FORCE FOR INSTALLATION, ENVIRONMENT AND LOGISTICS

ACCOMPANIED BY:

MAJOR GENERAL EARNEST O. ROBBINS, II, USAF, AIR FORCE

CIVIL ENGINEER

BRIGADIER GENERAL DAVID A. BRUBAKER, USAF, DEPUTY DIRECTOR, AIR NATIONAL GUARD

BRIGADIER GENERAL ROBERT E. DUIGNAN, USAF, DEPUTY TO

THE CHIEF, AIR FORCE RESERVE

Senator FEINSTEIN. I am very pleased to welcome this panel. Is

Mr. Gibbs present?

Mr. GIBBS. Yes, ma’am.

Senator FEINSTEIN. There he is. The Honorable Nelson F. Gibbs,

Assistant Secretary of the Air Force for Installation, Environment

and Logistics; Major General Earnest Robbins, The Air Force Civil

Engineer; Brigadier General David Brubaker, Deputy Director of

the Air National Guard; and Brigadier General Robert Duignan—

from the Air Force Reserve. I would ask each one of you to summarize your statement for the record. Secretary Gibbs, would you

begin?

Mr. GIBBS. Thank you very much, Madam Chairman. I will be

the only one making opening remarks.

Senator FEINSTEIN. All right.

Mr. GIBBS. And I will try to beat your 5-minute time limit by at

least 40 percent. Madam Chairman, good afternoon. I appreciate

the opportunity to appear before you today to discuss the Department of the Air Force fiscal year 2003 budget requests for military

construction (MILCON), military family housing and dormitories.

The Air Force’s total force military construction and military family

housing programs play a vital role supporting Air Force operational

needs, workplace productivity and quality of life.

This committee’s support for this program has remained steadfast over the years. The Air Force’s top priorities within this year’s

President’s budget are to sustain the facilities that already exist,

enhance quality of life by improving housing for both single and

married members, complying with existing environmental statutes

and supporting new missions and weapon systems.

AIR FORCE FACILITIES AND INFRASTRUCTURE

For fiscal year 2003, the Air Force is requesting over $4.2 billion

to invest in Air Force facilities and infrastructure, the same level

as submitted in the fiscal 2002 budget request. This includes nearly $2 billion for sustainment, restoration and modernization to

maintain our existing infrastructure and facilities, an increase of

over $360 million from fiscal year 2002. This budget request also

reflects the Air Force’s continued commitment to taking care of its
110

people and their families. Their welfare is a critical factor to overall

Air Force combat readiness and the family housing program, dormitory program and other quality of life initiatives reflect a commitment by the Air Force to provide its people the facilities that

they deserve.

FAMILY HOUSING

The Air Force is requesting $1.5 billion for military family housing of which $700 million is to replace more than 2,100 worn-out

units at 23 bases and improve more than 1,700 units at 11 bases.

This request also supports privatization of more than 4,500 units

at five bases. To improve the quality of life for the Air Force’s unmarried junior enlisted members, the Air Force is requesting $135

million for its fiscal year 2003 dormitory program, which consists

of 11 enlisted dormitory projects at 10 stateside bases and one

overseas base.

F–22 BASING

The fiscal year 2003 request also includes $500 million for active

force military construction, $50 million for the Air National Guard

and $30 million for the Air Force Reserve. Included are 33 new

mission projects totaling over $350 million. This includes investments to base the F–22 Raptor at Nellis Air Force Base for operational test and evaluation and at Langley Air Force Base, the

home of the first operational wing.

NEW MISSION PROJECTS

Also the request includes new mission projects to support B–2

forward operations in the United Kingdom and at Diego Garcia and

basing of the Global Hawk Unmanned Vehicle at Beale Air Force

Base. These projects also include expanded aircraft parking at

Naval Station Rota in Spain and at Ramstein Air Base in Germany.

PREPARED STATEMENT

In conclusion, I want to thank you and the rest of the committee

for its continuing strong support of the Air Force military construction, military family housing and dormitory programs. With the

committee’s assistance and support, the Air Force will continue to

meet the most urgent needs of commanders in the field while providing quality facilities for the men and women who serve in and

are the backbone of the most respected air and space force in the

world. Thank you very much, Madam Chairman.

[The statement follows:]

PREPARED STATEMENT OF NELSON F. GIBBS

INTRODUCTION

Madam Chairman and members of the committee, good afternoon. I appreciate

the opportunity to appear before you and discuss present the Department of the Air

Force’s fiscal year 2003 military construction and military family housing programs.
111

OVERVIEW

The Air Force’s total force military construction and military family housing programs play a vital role supporting Air Force operational needs, work place productivity, and quality of life. This committee’s support for those programs has remained

steadfast over the years, and the Air Force is gratefull believe that privatization is

a key component to accomplish this goal quickly and in a cost-effective manner. In

recent years, the committee’s support for innovative programs such as privatizing

military family housing has given the Air Force additional tools for improving the

quality of life for its members, and that support has been appreciated.

As Secretary Rumsfeld recently testified to Congress, ‘‘September 11 changed our

nation forever.’’ The Air Force’s challenge is to simultaneously accomplish three difficult missions: to win the war on terrorism, to restore the force through investments in procurement, people and modernization, and to transform the force to meet

21st Century demands. In the area of installations and facilities, this transformation began last year with the fiscal year 2002 budget.

Last year the Secretary of Defense made a commitment—to tranform the Department of Defense installations and facilities into those required for a 21st Century

military. Given the competing priorities resulting from September 11, the Air Force

has developed an executable and fiscally responsible plan for getting its facilities on

a path to recovery.

While the Air Force acknowledges the importance of robust funding for facility

sustainment and modernization, other priorities and insufficient Department of the

Air Force topline have not permitted it to fully address the problems associated with

an aging infrastructure. In fiscal year 2002, this administration proposed a significant increase in military construction and housing programs—to $2.7 billion, the

largest in 20 years the last decade. That increase was supported and, in fact, enhanced by this committee and other members of Congress, and was welcomed by

the Air Force.

For fiscal year 2003, the Air Force is requesting over $4.2 billion to invest in Air Force facilities and infrastructure. This request includes $2.3 billion for total force

military construction and military family housing. This request includes including

$644 million for active force military construction, $1.5 billion for military family

housing, $54 million for Air National Guard military construction, and $32 million

for Air Force Reserve military construction. In addition, the Air Force has increased

the request for operations & maintenance sustainment, restoration, and modernization (SRM) funding by $360 million over the fiscal year 2002 request, bringing the

total force facility investment request to the same level as submitted in the fiscal

year 2002 budget request.

These Air Force programs were developed using a facility investment strategy

with the following objectives:

—Accommodate new missions,

—Invest in quality of life improvements,

—Continue environmental leadership,

—Sustain, restore, and modernize our infrastructure,

—Optimize use of public and private resources, and

—Continue demolition of excess, uneconomical-to-maintain facilities.

For fiscal year 2003, the Air Force’s top priorities within the President’s budget

are to sustain the facilities that already exist, enhance quality of life by improving

housing for both single and married members, comply with existing environmental

statutes, and support new missions and weapon systems.

Air Force missions and people around the world clearly depend upon this committee’s understanding of, and support for Air Force infrastructure programs. That support has never wavered, and for that the Air Force thanks you.

OPERATIONS AND MAINTENANCE INVESTMENT

To sustain, restore, and modernize what it owns, the Air Force must achieve a

balance between military construction and operations & maintenance programs.

Military construction restores and re-capitalizes facilities. Operations & maintenance funding ensures the Air Force can perform facility sustainment activities,

without which facilities would fail prematurely. Without proper sustainment, facilities and infrastructure wear out sooner. Operations & maintenance funding is also

used to directly address many of the critical restoration and less-expensive recapitalization needs. Without these funds, commanders in the field are unable to address facility requirements that impact their near-term readiness.

With last year’s ‘‘shot in the arm’’ provided to military construction, the Air Force

is now in a position to restore its operations & maintenance balance. In fiscal year

2003, the sustainment, restoration, and modernization share of the Air Force oper-
112

ations & maintenance funding is $2.0 billion—meeting the required sustainment

level for the first time in many years. Included in this amount is nearly $160 million

in operations & maintenance programmed for restoration and modernization work.

INVEST IN QUALITY OF LIFE

The Air Force is committed to taking care of its people and their families. Quality

of life initiatives acknowledge the increasing sacrifices airmen make in support of

the nation and are pivotal to recruiting and retaining the Air Force’s most important resource—its people. When members deploy, they want to know that their families are stable, safe, and secure. Their welfare is a critical factor to overall Air

Force combat readiness, and the family housing program, dormitory program, and

other quality of life initiatives reflect a commitment by the Air Force to provide its

people the facilities they deserve.

FAMILY HOUSING

The Air Force Family Housing Master Plan provides the road map for meeting

the Department of Defense goal of providing safe, affordable, and adequate housing

for our members. The Air Force has increased its fiscal year 2003 housing request

by $132 million over the fiscal year 2002 request. The $677 million fiscal year 2003 military family housing replacement and improvement program replaces more than 2,100 worn-out units at 23 bases, improves

more than 1,700 units at 11 bases, and supports privatization of more than 4,500

units at five bases. The Air Force housing privatization program will be covered in

more detail later. The fiscal year 2003 housing operations and maintenance program

totals $844 million.

DORMITORIES

Just as the Air Force is committed to provide adequate housing for families, it

has an ambitious program to improve the housing for its unaccompanied junior enlisted personnel. The Air Force Dormitory Master Plan is a comprehensive, requirements-based plan, which identifies and prioritizes dormitory military construction

requirements. The plan includes a three-phased dormitory investment strategy. The

three phases are: (1) fund the replacement or conversion of all permanent party central latrine dormitories; (2) construct new facilities to eliminate the deficit of dormitory rooms; and (3) convert or replace existing dormitories at the end of their useful life using the Department of Defense 1∂1 room standard. Phase 1 is complete,

and the Air Force is now concentrating on the final two phases of the investment

strategy.

The total requirement is 79,400 Air Force dormitory rooms. There is currently a

deficit of 12,700 rooms, and the existing inventory includes 3,900 inadequate rooms.

It will cost approximately $1 billion to execute the Air Force Dormitory Master Plan

and achieve the fiscal year 2009 Air Force goal to eliminate the deficit and replace

the worst existing dormitories.

The fiscal year 2003 dormitory program consists of 11 enlisted dormitory projects

at ten CONUS bases and one overseas base, for a total of $135 million. On behalf

of all the airmen benefiting from this important quality of life initiative, I want to

thank the committee for its continued support of this critical quality of life effort.

FITNESS CENTERS

Other quality of life investments include community facilities, such as fitness centers, vital in the effort to attract and retain high quality people and their families.

A strong sense of community is an important element of the Air Force way of life,

and these facilities are important to that sense of community as well as to the physical and psychological well being of the airmen. The fiscal year 2003 military construction program includes fitness centers at Andersen Air Force Base, Guam;

Hanscom Air Force Base, Massachusetts; and Royal Air Force Lakenheath, United

Kingdom.

ACCOMMODATE NEW MISSIONS

New weapon systems provide the rapid, precise, global capability that enables

combat commanders to respond quickly to conflicts in support of national security

objectives. The fiscal year 2003 total force new mission military construction program consists of 33 projects, totaling $339 million.

These projects support the initial basing of a number of new weapon systems; two

of special significance are the F–22 Raptor and the C–17 Globemaster III. The F–

22 Raptor is the Air Force’s next generation air superiority fighter. Tyndall Air
113

Force Base, Florida, will house the F–22 flying training program. Nellis Air Force

Base, Nevada, will be the location for F–22 Follow-on Operational Test and Evaluation. Langley Air Force Base, Virginia, will be home for the first operational squadrons. The requirements for F–22 related construction at Tyndall were funded in the

fiscal year 2002 military construction program. The fiscal year 2003 military construction request includes one F–22 project at Nellis for $3 million, and three F–

22 projects as Langley totaling $40 million.

The C–17 Globemaster III aircraft is replacing the Air Force’s fleet of C–141

Starlifters. The C–17 provides rapid global mobility by combining the C–141 speed

and long-range transport capabilities; the C–5 capability to carry outsized cargo;

and the C–130 capability to land on short, forward-located airstrips. The Air Force

will base C–17s at Charleston Air Force Base, South Carolina; Altus Air Force Base,

Oklahoma; McChord Air Force Base, Washington; McGuire Air Force Base, New

Jersey; and Jackson Air National Guard Base, Mississippi. Thanks to support from

this committee, construction requirements for Charleston, Altus, and McChord were

all funded in prior-year military construction programs. The request for fiscal year

2003 includes a $25 million facility at McGuire Air Force Base, two facility projects

for $35 million at Jackson International Airport, and $31 million for C–17 facilities

at a soon to be announced location.

Other new mission requirements in fiscal year 2003 include supporting the Air

Force’s Global Strike Task Force by building B–2 aircraft hangars at Royal Air

Force Fairford, United Kingdom, and B–2 aircraft parking pads at Diego Garcia. To

support the Space/C2ISR Task Force the Air Force will build facilities to base the

Global Hawk unmanned aerial vehicle at Beale Air Force Base, California and to

support the Defense Satellite Program and future SBIRS at Buckley Air Force Base,

Colorado. Finally, to support the Global Response Task Force the Air Force will

build facilities to support Combat Search and Rescue aircraft at Davis-Monthan Air

Force Base, Arizona, C–130J aircraft at Little Rock Air Force Base, Arkansas, and

expand aircraft parking at Naval Station Rota, Spain, and at Ramstein Air Base,

Germany.

OVERSEAS MILCON

The quality of overseas installations continues to be a priority for the Air Force

because of the impact it has on both individual and family morale. Even though the

majority of Air Force personnel are assigned in the United States, 14 percent of its

forces are serving overseas, including 33,000 Air Force families. The Air Force overseas base structure has stabilized after years of closures and force structure realignments. At this level, the overseas infrastructure still represents 19 percent of the

total Air Force physical plant. The fiscal year 2003 military construction request for

European and Pacific installations is $233 million totaling 14 projects. The program

consists of infrastructure and quality of life projects in Korea, the United Kingdom,

Germany, Italy, and Spain as well as critical facilities on Guam, Diego Garcia, and

Wake Island. The committee’s support for these operational and quality of life

projects is equally as important as its support for stateside projects.

PLANNING AND DESIGN/UNSPECIFIED MINOR CONSTRUCTION

The Air Force will request $53 million in planning and design for fiscal year 2003.

These funds are required to complete design of the fiscal year 2004 construction program, and to start design of the fiscal year 2005 projects. The Air Force is also requesting $21 million in fiscal year 2003 for the total force unspecified minor construction program, which is the primary means of funding small, unforeseen

projects.

OPTIMIZE USE OF PUBLIC AND PRIVATE RESOURCES

In order to accelerate the rate at which it revitalizes its housing inventory, the

Air Force has taken a measured approach to housing privatization. It started with

a few select projects, with the goal of identifying successes and ‘‘lessons learned’’ to

guide follow-on initiatives. The first housing privatization project was awarded at

Lackland AFB, Texas, in August of 1998, and all 420 of those housing units are constructed and occupied by military families. There are three additional projects under

construction that will result in 1,900 privatized units at Dyess Air Force Base,

Texas; Elmendorf Air Force Base, Alaska; and Robins Air Force Base, Georgia. In

addition, the Air Force is on track to award eight projects in the next 12 months

that will result in an additional 9,000 privatized units across the Air Force. On average, the Air Force has realized a five to one leverage on the military construction

investment for housing privatization, and this kind of favorable ratio is expected to

hold steady or even increase on other projects in the out-years. As mentioned ear-
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lier, the fiscal year 2003 budget request includes $7.8 million to support the privatization of more than 4,500 units at five bases: Maxwell Air Force Base, Alabama;

Hanscom Air Force Base, Massachusetts; Cannon Air Force Base, New Mexico;

Shaw Air Force Base, South Carolina; and F.E. Warren Air Force Base, Wyoming.

The Air Force continues to pursue privatization of utility systems at Air Force installations. The goal is to privatize utility systems where it makes economic sense

and does not negatively impact national security. The Air Force has identified 434

of 513 systems as potential privatization candidates, and has released requests for

proposals for 242 systems and have completed the process on 161 systems.

DEMOLITION OF EXCESS, UNECONOMICAL-TO-MAINTAIN FACILITIES

For the past 6 years, the Air Force has pursued an aggressive effort to demolish

or dispose of facilities that are not economical to sustain or restore. From fiscal year

1998 through fiscal year 2001, the Air Force demolished 9.6 million-square feet of

non-housing building space. It expects to demolish an additional 4.4 million-square

feet in fiscal year 2002 and fiscal year 2003, for a total reduction of 14 million

square feet. This is equivalent to demolishing six Air Force bases equal to the combined square footage of Whiteman, Goodfellow, Moody, Brooks, Vance, and Pope Air

Force Bases. Air Force demolition efforts continue to be a success story enabling it

to reduce the strain on its infrastructure funding by eliminating unneeded facilities.

REALIGNMENT AND CLOSURES

This summer the Air Force lowered the flags at Kelly and McClellan Air Force

Bases, its two most complex closure actions resulting from the Base Realignment

and Closure Acts. The Air Force has now completed all 39 of its base closure and

realignment actions (22 closures and 17 realignments). As part of the closure process, the Air Force has worked with the local reuse authority at each base to minimize the impact on the local community from the closure. This effort has led to the

creation of over 48,000 jobs and an annual payroll of $1.4 billion in the affected communities.

While these facilities are being returned to their respective communities, the Air

Force has a continuing responsibility for environmental clean up from past industrial activities. The Air Force takes this responsibility seriously, having spent $2.4

billion since 1991 in environmental clean up at closing bases. For fiscal year 2003,

the Air Force is requesting $119 million to continue the clean up.

Although past base closure rounds have reduced its infrastructure footprint, the

Air Force still retains excess infrastructure. Maintenance of this excess infrastructure forces the Air Force to sub-optimize use of available operations and maintenance funds. The Fiscal Year 2002 National Defense Authorization Act provides the

Air Force an opportunity to divest itself of this unneeded infrastructure. In preparation for the 2005 base closure round, the Air Force will focus first on sizing its force,

and then on sizing the infrastructure to support that force.

CONCLUSION

In conclusion, I again thank the committee for its strong support of Air Force

military construction and military family housing programs. With the committee’s

assistance and support, the Air Force will meet the most urgent needs of commanders in the field while providing quality facilities for the men and women who

serve in and are the backbone of the most respected air and space force in the

world.

MCCLELLAN AIR FORCE BASE

Senator FEINSTEIN. Thanks very much, Secretary. I am going to

jump right to California, in particular to a base that has had a lot

of problems, and that is McClellan and the environmental remediation. I have been informed by the local reuse authority for Sacramento County that in January, the Air Force staff at McClellan

had submitted a $27.7 million plan to meet the fiscal year 2003

restoration schedule. By early February that number had been reduced to $12.7 million and the final budget, it is now $11.7 million.

In the Air Force briefing of which I have a copy, it says McClellan has been tasked with the identification of 2003 deferments

within anticipated 2003 funding. It goes on to say these deferments
115

are necessary to ensure that fiscal year 2004 to 2009 is properly

budgeted in case no fiscal year 2003 supplemental funding is received. Now, Secretary Gibbs, in these hearings last year, I was assured that there would be no repeat of a deliberate underfunding

of environmental remediation, and it looks to me like you have submitted a budget that cuts funding to California bases with the expectation that this committee will restore the funds. Is that the

case?

Mr. GIBBS. No, ma’am. It is not.

Senator FEINSTEIN. So you are prepared to maintain your commitment with this amount of money?

Mr. GIBBS. Yes, ma’am. Back in I believe it was in the 2000

budget year, there was a reduction in funding for environmental

remediation across all services for BRAC bases. At that point with

that conclusion, the Air Force reprogrammed all of its remedial actions throughout. We have a detailed plan for each of the bases in

which a remedial treatment is necessary. And McClellan was one

of those. In 2004, we reached the point where we have to again——

Senator FEINSTEIN. Please speak directly into the mike.

Mr. GIBBS. Excuse me. In 2004, we reached the point where we

have to go back and pick up for some of those funds which we did

not get back in 2000 on the bases. What we have in 2003 is the

continuation of the program that started out or was reprogrammed

in 2000, and the overall request for environmental remediation is

approximately $120 million for BRAC bases.

Senator FEINSTEIN. The cost is $400 million.

Mr. GIBBS. The anticipation is in 2004, that request will have to be increased to about $180 million to stay on track for our program.

Senator FEINSTEIN. Well, you know, if the cost for environmental

remediation of that base is $400 million, how are we going to get

there at amounts like—what you are proposing? You cannot get

there. It would take 35 years to get there.

Mr. GIBBS. Unfortunately that is very close. In McClellan specifically, the plan calls for all of the remedial processes to be in place

by 2015 and it will take another 20 years or so after that for all

of the processes to complete what it is they have to do. It is a passage of time.

One of the areas that McClellan, and to be quite honest with you,

I wish it were only going to cost $400 million—that is close to what

we have already spent and it is going to be substantially more.

But, at this point, much of what is occurring, because of the discoveries of the past 2 years really, are studies as to how best to

achieve the cleanup. And moving some of the studies forward

would not substantially change the completion dates, either the

completion dates for the installation of the remedies or the ultimate cleanup of the site.

Senator FEINSTEIN. Is the Air Force capable of executing greater

funding in 2003 at McClellan?

Mr. GIBBS. Yes, ma’am.

Senator FEINSTEIN. And how much would that be? How about

$22 million?

Mr. GIBBS. That would be very close. That would be almost exact

as a matter of fact. There are a number of studies that can be done.
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That is a number of individual projects that we would be capable

of getting going that would—most of them as I said are in the

study area and we would be capable of getting the people going on

the studies and getting them started in 2003. If you would like, I

can provide for you a list of those individual projects.

Senator FEINSTEIN. I would. If you would not mind. Thank you

very much.

Mr. GIBBS. We will provide that to the committee next week.

[The information follows:]

MCCLELLAN AIR FORCE BASE

Potential fiscal year 2003 Projects—$23.0 Million.

The following is a list of McClellan 2004 projects that can be accelerated and executed in 2003.

[In millions of dollars]

Project Description

Ground water pump and treatment/containment system expansion ................ 5.6

Soils feasibility study ............................................................................................. 0.8

West Creeks feasibility study ............................................................................... 0.5

Hexavalent chrome cleanup .................................................................................. 3.0

Remedial investigation building 252 .................................................................... 0.4

Groundwater treatability study ............................................................................ 2.8

Disposal pit treatability study .............................................................................. 3.0

Basewide, sewer and landfill radiological investigations ................................... 6.9

Total ............................................................................................................. 23.0

Senator FEINSTEIN. The Air Force budget request for current

mission MILCON appears to be at its lowest point in 20 years.

With 63 percent of your facilities rated at C3 or C4, how do you

justify a 48 percent MILCON reduction from last year’s enacted

level? And I guess the question I am going to ask, that I hope you

will answer honestly is, does this budget request provide adequate

military construction funding for the Air Force?

Mr. GIBBS. I think if I may, I will answer part of it and then I

will ask General Robbins also to answer from his position. The Air

Force made a specific decision this year in preparing its budget

that what we needed to do first and foremost was to maintain and

shore up that which we have. And that is what I mentioned in my

remarks earlier on that the sustainment aspect of the budget was

increased $360 million. Effectively, we are attempting to fund

sustainment at 100 percent of the Department of Defense (DOD)

sustainment model because we believe that is the right thing to do

and it is also the best use of the money.

CURRENT AND NEW MISSION PROJECTS

Senator FEINSTEIN. But let me just interrupt you because my understanding is you are funding only five Air Force projects. So my

question would be what are the five?

Mr. GIBBS. You mean other than new mission projects? We are

funding about 35 or 40 projects, ma’am, but there are——

Senator FEINSTEIN. Five current mission——

Mr. GIBBS [continuing]. Only five that are not new mission

projects.

General ROBBINS. Yes, I can find the list.

Senator FEINSTEIN. Could you just tell us what those five are?
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General ROBBINS. The list I have here are just the new mission

projects.

Senator FEINSTEIN. Perhaps then would you get that to the committee staff?

Mr. GIBBS. Yes, ma’am. We will provide that to you also.

[The information follows:]

CURRENT AND NEW MISSION PROJECTS

The Air Force has requested a total of 48 projects for the active component in the

fiscal year 2003 President’s Budget Request. Of those 48 projects, 25 support new

mission beddown and force realignment, 14 support quality of life initiatives, four

correct environmental deficiencies, and five are for current mission facility requirements. The following table lists those projects.

[In millions of dollars]

Category State/Base Project Cost

New Mission ................................ AR—Little Rock ................. C–130J 2-Bay Hangar ........................................ 12.9

New Mission ................................ AR—Little Rock ................. C–1 30J Engine Storage Facility ....................... 2.1

New Mission ................................ AR—Little Rock ................. Add to and Alter Fuselage Trainer Facility for

C–1 30J.

2.5

New Mission ................................ AR—Little Rock ................. C–130J Maintenance Training Facility .............. 8.1

New Mission ................................ AZ—Davis-Monthan ........... HH–60 Apron/Taxiway Shoulders ....................... 3.7

New Mission ................................ AZ—Davis-Monthan ........... HH–60 Maintenance Hangar .............................. 6.4

New Mission ................................ CA—Beale .......................... Global Hawk Squadron Operations Facility/Aircraft Maintenance Unit.3.7

New Mission ................................ CA—Beale .......................... Dining Facility .................................................... 3.5

New Mission ................................ CA—Beale .......................... Upgrade Maintenance Dock for Global Hawk .... 4.6

New Mission ................................ CO—Buckley ...................... SBIRS Mission Control Station ........................... 6.9

New Mission ................................ CO—Buckley ...................... Wing Headquarters/Administrative Facility ........ 10.8

New Mission ................................ NJ—McGuire ...................... C–17 Flightline Operations Facility ................... 24.6

New Mission ................................ NV—Nellis .......................... F–22 Munitions Maintenance Facility ................ 3.2

New Mission ................................ TX—Sheppard .................... Euro-NATO Joint Training Flight Simulator ........ 6.0

New Mission ................................ VA—Langley ....................... F–22 Infrastructure and Utilities ....................... 10.7

New Mission ................................ VA—Langley ....................... F–22 Flight Simulator ........................................ 8.1

New Mission ................................ VA—Langley ....................... F–22 Squadron Operations Facility/Aircraft

Maintenance Unit.

20.8

New Mission ................................ O/S—RAF Fairford ............. B–2 Maintenance Hangar/Apron ........................ 19.0

New Mission ................................ O/S—Diego Garcia ............. B–2 Aircraft Parking Apron ............................... 17.1

New Mission ................................ O/S—Rota .......................... Aircraft Parking, Phase 1 .................................. 31.8

New Mission ................................ O/S—Ramstein .................. Passenger Terminal Annex ................................. 17.7

New Mission ................................ O/S—Ramstein .................. Combined Fleet Service/In-flight Kitchen Facility.7.5

New Mission ................................ ............................................. Classified project ............................................... 2.0

New Mission ................................ ............................................. Force Protection Improvements (Classified Location).23.0

New Mission ................................ TBD—TBD .......................... C–17 (Various Facilities) ................................... 30.6

QOL ............................................. AZ—Davis-Monthan ........... Dormitory (120 rooms) ....................................... 9.1

QOL ............................................. FL—Hurlburt ...................... Dormitory (144 rooms) ....................................... 9.0

QOL ............................................. LA—Barksdale ................... Dormitory (168 rooms) ....................................... 10.9

QOL ............................................. MA—Hanscom ................... Fitness Center .................................................... 7.7

QOL ............................................. MS—Keesler ....................... Dormitory (200 rooms) ....................................... 22.0

QOL ............................................. NC—Pope ........................... Dormito (144 rooms) .......................................... 9.7

QOL ............................................. NV—Nellis .......................... Dormitory (144 rooms) ....................................... 12.3

QOL ............................................. OH—Wright-Patterson ....... Dormitory (144 rooms) ....................................... 10.4

QOL ............................................. TX—Lackland ..................... Dormitory (200 rooms) ....................................... 18.5

QOL ............................................. TX—She pard .................... Dormitory (144 rooms) ....................................... 10.0

QOL ............................................. VA—Langley ....................... Dormitory (96 rooms) ......................................... 8.3

QOL ............................................. O/S—Andersen ................... Fitness Center .................................................... 16.0

QOL ............................................. O/S—Lakenheath ............... Fitness Center .................................................... 10.8

QOL ............................................. O/S—Osan ......................... Dormitory (156 rooms) ....................................... 15.1

Environmental ............................. AK—Belson ........................ Upgrade Central Heat Plant Baghouses ............ 21.6

Environmental ............................. AK—Clear .......................... Upgrade Power Plant ......................................... 14.4

Environmental ............................. CA—Vandenberg ................ Repair Water Distribution, Phase 2 ................... 7.4

Environmental ............................. CA—Vandenberg ................ Install Stormwater Drainage .............................. 3.1
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[In millions of dollars]

Category State/Base Project Cost

Current Mission .......................... NV—Nellis .......................... Land Acquisition ................................................ 15.0

Current Mission .......................... O/S—Ramstein .................. Repair Ramp 1, Phase 1 ................................... 23.7

Current Mission .......................... O/S—Wake Island .............. Repair Airfield Pavement, Phase 2 .................... 24.9

Current Mission .......................... O/S—Lakenheath ............... Mobility Processing Facility ................................ 2.6

Current Mission .......................... O/S—Ramstein .................. Kaiserslautern Military Community Center ........ 21.3

Other ........................................... ............................................. Planning and Design ......................................... 41.5

Other ........................................... ............................................. Unspecified Minor Construction ......................... 11.5

Total .............................. ............................................. ............................................................................. 644.1

Senator FEINSTEIN. Could you also give us a list of those projects

funded with the Defense Emergency Response Fund (DERF)?

General ROBBINS. Yes. There are four of those. One was the

Dover Mortuary project—military construction $19 million, I believe. And then there were three classified location projects in

Southwest Asia.

Senator FEINSTEIN. And those are funded?

General ROBBINS. Yes that is correct.

Senator FEINSTEIN. Right.

General ROBBINS. In 2002. Out of the 2002 DERF.

Senator FEINSTEIN. Do you feel your budget is adequate for your

needs?

BACHELOR AND FAMILY HOUSING

General ROBBINS. One of the advantages of going second after

the Navy is to think about your answer to that question and it’s

like asking one of my teenage daughters do they have enough

money to spend. An engineer will never have all that they think

they could use, but I would echo what Mr. Gibbs said in terms of

the process the Air Force goes through to reach the conclusion that

we have reached in terms of taking care of bachelor and family

housing, the new mission bed downs that we know we have to do

and then our most compelling environmental requirements. It is

sufficient to at least help us hold the line when you throw in this

increase in sustainment dollars that we have requested. So we will

hold the line on our overall infrastructure readiness with this

budget.

Senator FEINSTEIN. Well, let me just repeat something that I said

last time. I am told by people who have done this for a long time

that this is sort of typical. The MILCON budget gets cut and the

belief is well, the Congress is going to plus it up, but everybody

this year is saying, oh this is fine, we can handle all our needs with

this. You may just actually have that as the final result, and I just

want to say that publicly that the game may not take place this

year.

Mr. GIBBS. That certainly would be acceptable to the Air Force,

ma’am.

Senator FEINSTEIN. Okay. So in other words, you are not going

to try, General Robbins, to bring all the Air Force’s C3 and C4

rated facility classes to at least C2?

General ROBBINS. Not with this budget. Not with the 2003. What

we are on track to do, and I believe it was in Mr. Gibb’s testimony,

but I am not sure, is that we believe by the time we reach the end
119

of this 5 year defense program, fiscal year defense program, that

we will be on the glide path to meet the defense planning guidance

that says by 2010 we should be on a 67 year recap rate.

Senator FEINSTEIN. Well, but the goal was 2007. Now you are

changing it to 2010.

FAMILY HOUSING

General ROBBINS. Actually I believe that 2007 goal had to do

with family housing.

Senator FEINSTEIN. Substandard family housing.

General ROBBINS. Right.

Senator FEINSTEIN. That is correct.

General ROBBINS. And I’m speaking to overall——

Senator FEINSTEIN. Oh. I beg your pardon.

General ROBBINS. Yes, ma’am.

Senator FEINSTEIN. Well, will the substandard family housing be

brought up to par then by 2007?

AIR FORCE FAMILY HOUSING MASTER PLAN

General ROBBINS. Want me to answer that?

Mr. GIBBS. The Air Force plan—the master plan for family housing is for all of the substandard housing to be brought up to par,

in your terms, by 2010. The specific reason for that is that there

are several bases which are planned to have a construction project

every year from now until 2010, that an attempt to bring any of

those forward to close them out earlier, we believe would cause

substantial disruption on the individual bases and would effectively

dispossess more individuals from where they are living, and that

it would be inappropriate from a mission perspective and also from

how we want to treat our people to force them to do that.

Senator FEINSTEIN. So they are going to live in substandard

housing?

Mr. GIBBS. Well, they actually have two options. The housing—

yes, to that extent. Or, they can seek Basic Allowance for Housing

(BAH) and live off of the facility.

Senator FEINSTEIN. General Brubaker, this budget includes just

$85 million for the Air Guard and Reserve out of the $2.2 billion

overall request and the Air Force MILCON is down sharply. But

the Air Guard and Reserve constitute more than 50 percent of the

Air Force’s war fighting capability and comprise more than 25 percent of the work force, yet only 4 percent of your MILCON budget

is being allocated to the Air Guard and Reserve. Do you believe

this is a fair and balanced program?

AIR NATIONAL GUARD MILITARY CONSTRUCTION

General BRUBAKER. Ma’am, we would like to have more and our

needs are greater. The Air Force had to make some real tough decisions and we played fully in that decision process and it did not

happen that we got more. We are ready to execute the projects that

we did get and we are hopeful next year that we might see some

increases that enable us to do some other things.

Senator FEINSTEIN. What percentage of your facility inventory do

you consider substandard or inadequate?
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General BRUBAKER. We estimate that approximately 50 percent

of the Air National Guard facilities are substandard. They would

be those that we consider small and antiquated, those that are

malpositioned, those with severe violations for life, safety and fire

codes. The categories of facilities with the most pressing problems

are the operations, training and support facilities and aircraft

pavements.

Senator FEINSTEIN. Can I ask you a question? What was your request for funding in this area?

General BRUBAKER. Our total request was for over 30 projects and over $200 million.

Senator FEINSTEIN. And the budget is at what for them? $200

million. So that is a 75 percent cut in essence of your request.

General BRUBAKER. We got a lot less than——

Senator FEINSTEIN. You got $50 million rather than $200 million.

General BRUBAKER. Yes, ma’am.

Senator FEINSTEIN. And you can live with it?

General BRUBAKER. We are going to make do.

AIR FORCE RESERVE MILITARY CONSTRUCTION

Senator FEINSTEIN. Okay. I would like to ask a question about

the Reserve. General Duignan, 23 percent of the Air Force Reserve

projects were congressional adds last year. The 2003 Air Force Reserve budget request funds only four projects, all of them in Portland, Oregon to support the KC–135 tanker relocation program.

For 2004 the future year’s defense plan includes only six Air Force

Reserve projects, five of them for the KC–135 program in Portland.

The Air Force Reserve infrastructure encompasses five major installations, seven air stations and 55 other locations. Why is the

Reserve focusing its 2003 and 2004 request really solely on Portland?

General DUIGNAN. Like our brothers in the Guard, we submitted—we have many more projects, but they are submitted

through the corporate process in the Air Force and compete with

the Air National Guard and the active force to fill the most important needs of the Air Force. In 2003, the most pressing requirement

was the conversion of the rescue unit in Portland to the KC–135s.

That will not be completed in 1 year so we have to continue that

in the 2004 program. We do have additional projects that we have

that we need to complete, but based on the priorities, the Portland

ones are the top ones to get finished.

KOREA

Senator FEINSTEIN. Okay. General Robbins, at a House hearing,

General Schwartz, the Commander in Chief of our forces in Korea,

submitted a list of potential MILCON inserts for Korea. The list includes three Air Force projects, a mechanically protected personnel

processing center, a missile maintenance shop complex and the replacement of an aircraft fuels maintenance dock. That’s $27 million

worth of projects for the Air Force. Are you familiar with this list?

General ROBBINS. No, ma’am.

Senator FEINSTEIN. Do you know if General Schwartz requested

them?

General ROBBINS. No, ma’am.
121

Senator FEINSTEIN. Do you know why they were not included in

the budget request?

General ROBBINS. Why they were or were not?

Senator FEINSTEIN. Were not.

General ROBBINS. I am not familiar with those three projects.

Senator FEINSTEIN. Okay. Could we get answers to those questions?

General ROBBINS. Sure.

[The information follows:]

The projects referenced by Senator Feinstein are shown below. None are in the

fiscal year 2003 budget request.

[Dollars in millions]

Project Programmed

amount PACAF priority

Kunsan AB Consolidated Personnel Processing Facility ....................................................... $4.9 Fiscal year 2007

Osan AB Fuel System Maintenance Shop ............................................................................. 7.5 ( 1 )

Kunsan AB Missile Maintenance Facility .............................................................................. 16.O ( 1 )

1 Not in FYDP.

The Air Force prioritizes requirements, based on each command’s priority and

their impacts to mission, readiness, and quality of life, into one integrated priority

list (IPL). This IPL is submitted to Chief of Staff of the Air Force and Secretary

of the Air Force for endorsement, then to the Office of the Secretary of Defense and

eventually Office of Management and Budget, for inclusion into the President’s

Budget.

The Air Force fiscal year 2003 MILCON submission includes $73.1 million for

overseas bases in the Pacific theater. It includes projects at Diego Garcia, Wake Island, Guam, and Korea.

GLOBAL HAWK AT BEALE AIR FORCE BASE

Senator FEINSTEIN. I wanted to ask a question about Global

Hawk at Beale. Are the funds in this budget sufficient for Global

Hawk?

Mr. GIBBS. Ultimately—I cannot answer your question. Ultimately but for what is planned out for the next couple of years.

Yes, ma’am. Do you know?

General ROBBINS. Yes. The 2003 budget as you know, has the

three projects I guess at Beale. And then in 2004 there are two

more, and in 2005 there are two more, or one more, and then 2006

one more. So it’s spread out ranging from the initial bed down mission support type requirements which are in the early years going

out to a dormitory to bed down the additional people that will flow

in as we get the iron into Beale, and then even a visiting quarters

to handle the TDY rotations that will go up as a result of the bed

down and new mission.

General ROBBINS. So it extends out through 2006.

Senator FEINSTEIN. And from a military point of view, that is

adequate to meet the mission needs for Global Hawk?

General ROBBINS. Yes, ma’am. If this 2003 budget request is supported and we phase these other projects as I have laid them out

here, that will match the flow of the actual aircraft into Beale.

Mr. GIBBS. I would comment for that. That is based upon the

current——

Senator FEINSTEIN. I’m sorry. I cannot hear you.
122

Mr. GIBBS. That is predicated on the current anticipated buy of

Global Hawks. Should that change, then we would have additional

facility requirements.

Senator FEINSTEIN. Right. Thank you. I think that takes care of

my questions. Oh, General Robbins, let me ask you about last

week’s fire——

General ROBBINS. Oh, yes.

BARKSDALE AIR FORCE BASE

Senator FEINSTEIN [continuing]. At the 8th Air Force headquarters at Barksdale in Louisiana?

General ROBBINS. Yes, ma’am.

Senator FEINSTEIN. We are told that it may take a year and $13

million to repair. Could you just describe the extent of the damage

and how the Air Force intends to fund its repair?

General ROBBINS. Right. They have not even got a definitive cost

estimate on the damage yet, because last I heard, it was still smoldering. Although they were prepared to go in with some temporary

tarpaulins to cover the undamaged portions of the roof once they

could do that. The $13 million number that you quote is the first

initial estimate for what it would cost. Some portion of that was

for furnishings and equipment, but about $9 million I believe was

facility. Again, first estimate for facility repairs. Depending upon

the cost—how much this grows or does not grow, we will probably

try to do it with Operations and Maintenance (O&M) dollars. Try

to make the repairs using O&M dollars and the appropriation. But

again until we get——

Senator FEINSTEIN. Sorry. Using what dollars?

General ROBBINS. O&M. Operations and Maintenance.

Senator FEINSTEIN. And you have sufficient O&M dollars to do

that?

General ROBBINS. We would request that, yes.

Senator FEINSTEIN. Oh, I see, but——

General ROBBINS. Through the Air Force budget. We would have

to go in through—as you know the way the O&M account works,

they control the outlays over the year, there are residual funds that

may not execute. So they would come in by the end of the year and

request that we be allowed——

Senator FEINSTEIN. A rollover.

General ROBBINS. As you know, there’s a $7.5 million threshold.

If a repair project exceeds $7.5 million, we have to come to this

committee and request permission to proceed with it as an O&M

funded project versus MILCON.

Senator FEINSTEIN. Right. Okay. I mean, I would assume you are

going to do that.

General ROBBINS. We are going to fix it. And if it is over $7.5

million, we will come to you with a request. If that is the—we really have to wait and see how much damage was done on the facility.

We do not know what the total bill’s going to be yet.

Senator FEINSTEIN. Just one last question. I have been very concerned with the housing in Korea. Do you believe that the money

that is in this request is adequate to do what we began to do last

year to bring our housing up to standard in Korea?
123

General ROBBINS. Right. You want me to take it. Yes, ma’am.

That is a three phase project. This request is to cover the first onethird of the units that are to be required there—it is around 120

units as I recall—to be followed in subsequent fiscal years with the

remaining two-thirds. The command sponsored billets tours there

at Osan are steady right at about 360, 365. And so if we follow this

phased approach, then that should address the concerns of the

Commander and the families that live there.

Senator FEINSTEIN. Because I know the chairman of the House

subcommittee was very concerned about this and I am too, I just

want to make that clear. I mean, I think we ought to house our

people in decent quarters doing that duty there. So I want to be

sure that what we have committed to last year is followed through

this year. Do I have your assurance?

General ROBBINS. Yes, ma’am. The budget request includes the

first tower and as I discussed with your staff members when we

met over at our place a few weeks ago, what has changed is the

site where we were going to build this first tower, but the cost will

remain the same. Same number of units. We are just moving it to

a different location on Osan.

ADDITIONAL COMMITTEE QUESTIONS

Senator FEINSTEIN. Okay. All right. Gentlemen, is there anything

else you would like to say? Otherwise, you are all just happy campers with your budget. I think that is wonderful that you set a

model for taking 75 and 50 percent cuts and big smiles and that

is wonderful.Thank you very much.

[The following questions were not asked at the hearing, but were

submitted to the Department for response subsequent to the hearing:]

Mr. GIBBS. Thank you. Madam Chairman.

QUESTIONS SUBMITTED TO NELSON F. GIBBS

QUESTION SUBMITTED BY SENATOR DIANNE FEINSTEIN

MILCON FUNDING

Question. Secretary Gibbs, do you have any concern that by reducing MILCON

funding this year, by deferring needed MILCON projects, you will be setting the Air

Force up for a MILCON train wreck in the out years?

Answer. We are very concerned with the magnitude of our military construction

requirements backlog, which is the result of many years of undersized military construction budgets. Not counting last year’s shot-in-the-arm, the fiscal year 2003

MILCON request is the largest since fiscal year 1994. Further, we have programmed increasing MILCON budgets across the future years defense plan, which

keeps us moving in the right direction of gradually buying down the backlog.

It will take a number of years of steady, adequate funding to fully recapitalize

our infrastructure to an acceptable desired condition.

QUESTIONS SUBMITTED BY SENATOR KAY BAILEY HUTCHISON

OVERSEAS PROGRAM

Question. Secretary Gibbs, I understand that your fiscal year 2003 overseas program is consistent with last year’s MILCON program. Can you explain to me how

you determine your overseas priorities against the domestic requirements?

Answer. The Air Force investment strategy concentrates scarce resources on its

Total Force top priorities. The Air Force integrates Total Force MILCON requirements into a single priority list and funds the most urgent needs of the Total Air
124

Force within budget constraints. After ‘‘must pay’’ requirements are funded, we utilize a MILCON scoring methodology to fund remaining urgent requirements. Urgency of need takes precedence over ‘‘fair share.’’

Question. Secretary Gibbs: Your proposed budget for MILCON has very few

projects compared to other years. Did the Air Force place more emphasis in the

2003 budget on overseas because of the uncertainty of a future round of base closure?

Answer. No. Future base closures are not factors in determining MILCON priorities.

Question. Secretary Gibbs, last year, senior DOD officials testified that after many

years of neglect, the Department intended to start investing in infrastructure. Your

proposed budget barely funds new mission initiatives, let alone replacement facilities. What is the corporate Air Force position on revitalizing Air Force facilities?

Answer. The Air Force has a balanced program that attempts to maximize the utilization of its facilities. The MILCON focus is, in descending order of priority, on

(1) environmental, legal, or treaty-driven requirements; (2) quality of life initiatives;

(3) new weapon systems requirements and (4) fixing C3/C4-rated facilities. In addition, this budget fully funds sustainment to ensure facilities last their full life. Our

balanced program: (1) attempts to maximize scarce resources on our top MILCON

priorities; (2) continues to reduce physical plant and associated Operation and Maintenance costs, and (3) relies on alternative approaches to MILCON, particularly privatization.

BACKLOG OF MILCON REQUIREMENTS

Question. What is the backlog of Active, Guard, and Reserve Air Force requirements for military construction?

Answer. Active: The Air Force calculates its backlog of restoration and modernization construction requirements using data from our Installations Readiness Report,

updated and submitted to Congress annually per 10 USC 117. We define the backlog as the cost to restore all facility classes to ratings of C–2 or higher. The following

table details that backlog for the Active, Guard, and Reserve components.

BACKLOG OF CONSTRUCTION REQUIREMENTS

[In millions of dollars]

O&M MILCON Total

Active Air Force ................................................................. 1,592 12,016 13,608

Air National Guard ............................................................ 388 2,182 2,570

Air Force Reserve ............................................................... 89 279 368

Total ..................................................................... 2,069 14,755 16,546

Note: The table above includes requirements met with MILCON and Facility Restoration and Modernization (O&M) funding. It does not include an additional $1.8 billion in requirements met with other fund sources (e.g., host-nation funding,

medical and RDT&E appropriations). Including those other fund sources, the Total Air Force backlog is $18.3 billion.

Guard: Unspecified Minor Construction (UMC).—The annual funding for unspecified minor construction is roughly $5 million. The annual shortfall is roughly $8

million. The fiscal year 2003 budget includes $4.4 million for unspecified minor construction. This funding is $7.9 million short of the requirement.

Current Mission Military Construction (MILCON).—The Air National Guard backlog of mission MILCON stands at over $2 billion. This backlog includes projects that

replace or repair aging pavements and facilities at our 176 locations. The Air National Guard could execute $200–$250 million per year toward the backlog if funding were available.

New Mission MILCON.—There are several critical new mission beddowns in

progress. The outstanding construction bill associated with the announced conversions is nearly $200 million. Pending conversions which are being discussed could

add another $325 million to this new mission bill.

Restoration and Modernization.—The Restoration and Modernization backlog is

$928 million. Projects include repairs to degraded airfield pavements, leaking roofs,

failed fire suppression systems, failed heating and ventilating systems, and other

failed utility/building systems.

Reserve.—The total backlog of currently identified Air Force Reserve Military Construction projects is $650 million.
125

QUESTIONS SUBMITTED TO MAJOR GENERAL EARNEST O. ROBBINS, II

QUESTIONS SUBMITTED BY SENATOR DIANNE FEINSTEIN

CURRENT MISSION

Question. General Robbins, the Air Force MILCON budget appears to fund only

five current mission projects. How many Air Force major commands did not get

their #1 current mission MILCON requirement funded in this request?

Answer. Eight. They include Air Combat Command, Air Force Materiel Command, Air Force Reserve Command, Air Force Special Operations Command, Pacific

Air Forces, United States Air Force Academy, the 11th Wing, and Air Intelligence

Agency.

Question. General Robbins, can you provide, for the record, a list of those #1 unfunded priorities?

Answer. Those priorities are:

Air Combat Command.—Hurlburt Field, FL—Air Force Command and Control

Training and Innovation Group Systems/Warrior School Complex ($13.8 million).

Air Force Materiel Command.—Robins AFB, GA—Corrosion Control Paint Facility ($27.0 million).

Air Force Reserve Command.—Keesler AFB, MS—Fuel Cell ($7.2 million).

Air Force Special Operations Command.—Hurlburt Field, FL—Special Tactics Ad- vance Skills Training Facility ($7.9 million).

Pacific Air Forces.—Osan AB, ROK—Add/Alter Operations/Aircraft Maintenance Unit Facility ($15.0 million).

United States Air Force Academy.—Upgrade Academic Facility, Phase 4 ($22.5

million).

Eleventh Wing.—Bolling AFB, DC—Physical Fitness Center ($13.0 million).

Air Intelligence Agency.—Lackland AFB, TX—Information Operations Center ($8.8 million).

Question. General Robbins, what is the Air Force’s recapitalization rate based on

the fiscal year 2003 budget? What was it in fiscal year 2002?

Answer. The fiscal year 2003 President’s Budget request has a fiscal year 2003

recapitalization rate of 227 years. The fiscal year 2002 recapitalization rate was 113

years

QUESTIONS SUBMITTED BY SENATOR KAY BAILEY HUTCHISON

CONDITION OF FACILITIES

Question. General Robbins, I note that the majority of your facilities are in a condition C–3 or C–4. What would be the bill to bring all of the Air Force C–3 and

C–4 facilities to at least C–2?

Answer. Our installation commanders identified over $18.3 billion in facilities restoration and modernization investment is needed to restore the Air Force’s C–3 and

C–4 facility classes to at least C–2.

MAJCOM UNFUNDED PRIORITIES

Question. General Robbins, how many of the Air Force major air commands did

not get their number one priority MILCON budget funded in this request? Can you

provide a list of those unfunded number one priorities for the record?

Answer. Eight major air commands did not get their number one priorities funded

in this year’s budget request: Air Combat Command, Air Force Materiel Command,

Air Force Reserve Command, Air Force Special Operations Command, Pacific Air

Forces, United States Air Force Academy, the 11th Wing, and the Air Intelligence

Agency.Those priorities are:

Air Combat Command.—Hurlburt Field, FL—Air Force Command and Control

Training and Innovation Group Systems/Warrior School Complex ($13.8 million).

Air Force Materiel Command.—Robins AFB, GA—Corrosion Control Paint Facility

($27.0 million).

Air Force Reserve Command.—Keesler AFB, MS—Fuel Cell ($7.2 million).

Air Force Special Operations Command.—Hurlburt Field, FL—Special Tactics Advance Skills Training Facility ($7.9 million).

Pacific Air Forces. Osan AB, ROK—Add/Alter Operations/Aircraft Maintenance

Unit Facility ($15.0 million).

United States Air Force Academy.—Upgrade Academic Facility, Phase 4 ($22.5

million).

Eleventh Wing.—Bolling AFB, DC—Physical Fitness Center ($13.0 million).
126

Air Intelligence Agency.—Lackland AFB, TX—Information Operations Center

($8.8 million).

RECAPITALIZATION

Question. General Robbins, with the funding proposed in the 2003 budget for

MILCON, what does that do to the Air Force recapilatization rate? What is the Air

Force long term plan regarding recapitalization of facilities?

Answer. The fiscal year 2003 President’s Budget level of funding results in a recapitalization rate of 227 years for fiscal year 2003, up from 113 years in fiscal year

2002 and 209 years in fiscal year 2001. Our long-term plan is to properly sustain

and modernize our facilities and infrastructure to ensure we have the right facilities

at the right time and place to support military readiness. To do this, we are fully

funding sustainment across the future years defense plan and are on a funding path

to meet goals of buying out the C3/C4 rated facilities backlog as well as achieving

a 67-year recap rate by 2010.

PLANT REPLACEMENT VALUE

Question. General Robbins, is the Air National Guard portion of your budget request proportionate to the Guard’s share of the Air Force’s plant replacement value?

Answer. The Air Force investment strategy concentrates scarce resources on its

Total Force top priorities. The Air Force integrates Total Force MILCON requirements into a single priority list and funds the most urgent needs of the Total Air

Force within budget constraints. After ‘‘must pay’’ requirements are funded, we utilize a MILCON scoring methodology to fund remaining urgent requirements. Urgency of need takes precedence over ‘‘fair share.’’

However, the Air National Guard (ANG) portion of this budget request is proportionate to the ANG’s share of the overall Air Force plant replacement value (PRV).

The same is true for the Air Force Reserve. The table below shows the breakout.

Air reserve component PRV share (percent)

Fiscal year 2003

MILCON budget

share (percent)

Air National Guard ......................................................................................... 7.9 7.3

Air Force Reserve ........................................................................................... 3.8 4.4

DYESS AFB—MILITARY FAMILY HOUSING

Question. Last November, the Air Force provided a brief on the future of Dyess

AFB. In that brief, the Service indicated that the next MILCON for Dyess would

be in fiscal year 2004. The plan was to build 164 units of MFH for $14 million.

While it appears the Air Force moved the project up by a year, the number of MFH

units the Air Force plans to buy for $14.8 million has now fallen to only 85. This

does not appear to be a good value. Why did this happen?

Answer. The differences in scope between last year and this year are due to the

different unit size and a more accurate estimate of associated support costs (site

preparation, utilities, streets and roads, etc.). Starting with the fiscal year 2003 program, the Air Force implements new size standards which more closely approximate

the size of homes constructed in the local community.

QUESTIONS SUBMITTED TO BRIGADIER GENERAL DAVID A. BRUBAKER

QUESTIONS SUBMITTED BY SENATOR DIANNE FEINSTEIN

CURRENT MISSION

Question. General Brubaker, the Air Guard has been given the responsibility for

executing Operation Noble Eagle. Can you explain whether that added responsibility has had any impact on your infrastructure needs?

Answer. Operation Noble Eagle has had a significant impact on the ANG infrastructure requirements in a number of ways. We have spent approximately $29.5

Million from our Sustainment, Restoration, and Modernization (SRM) account in the

effort. Alert facilities at numerous locations were in disrepair prior to 9–11. Aircraft

alert facilities were shut down and placed in a caretaker status in the early 1990’s,

or these aircraft alert facilities were re-used to meet other facility shortfalls. The
127

SRM funds were used to make the alert aircraft facilities habitable, and to bring

the facilities up to current standards.

—Temporary trailers were leased to provide alert crew quarters to support these

missions: F–15/F–16 fighters, KC–135 tankers and C–130 airlift aircraft.

—Temporary alert aircraft shelters were constructed at Air National Guard locations where alert shelters did not exist or where the number of alert shelters

were insufficient for the mission.

—The estimated cost to provide a long term permanent fix for Noble Eagle requirements, and eliminate the temporary shelters and leased trailers will require approximately $100 Million in the Military Construction (MILCON) Program.

Question. General Brubaker, do you need any additional MILCON funding to

meet those needs? If so, what do you need?

Answer. The estimated cost to provide a long term permanent fix for Noble Eagle

requirements, and eliminate the temporary shelters and leased trailers will require

approximately $100 million in the Military Construction Program. The Air National

Guard’s most urgent requirements are identified in the future year defense program

and the 10543 report.

CONCLUSION OF HEARINGS

Senator FEINSTEIN. I think that completes our hearing for the

day and hearing is recessed.

[Whereupon, at 3:48 p.m., Tuesday, March 19, the hearings were

concluded, and the subcommittees was recessed, to reconvene subject to the call of the Chair.]

(i)

LIST OF WITNESSES, COMMUNICATIONS, AND

PREPARED STATEMENTS

Page

Baillie, Frederick N., Executive Director, Business Management Logistics

Operations, Defense Logistics Operations, Defense Agencies, Department

of Defense ............................................................................................................. 35

Prepared statement .......................................................................................... 44

Questions submitted to .................................................................................... 55

Brubaker, General David A., USAF, Deputy Director, Air National Guard,

Department of the Air Force, Department of Defense ...................................... 109

Questions submitted to .................................................................................... 126

Coleman, Brigadier General (SELECT) Ronald S., USMC, Deputy Assistant

Commandant of the Marine Corps for Installation and Logistics Facilities,

Department of the Navy, Department of Defense ............................................. 83

DuBois, Hon. Raymond, Deputy Under Secretary of Defense for Installations

and Environment, Office of the Secretary, Department of Defense ................. 11

Prepared statement .......................................................................................... 14

Questions submitted to .................................................................................... 32

Duignan, Brigadier General Robert E., USAF, Deputy to the Chief, Air Force

Reserve, Department of the Air Force, Department of Defense ....................... 109

Feinstein, Senator Dianne, U.S. Senator from California:

Opening statement ........................................................................................... 83

Questions submitted by .......................... 30, 53, 73, 77, 78, 105, 123, 125, 126

Statement of ...................................................................................................... 1

Fiori, Hon. Mario P., Assistant Secretary of the Army (Installation Environment), Department of the Army, Department of Defense ................................ 57

Prepared statement .......................................................................................... 59

Questions submitted to .................................................................................... 73

Statement of ...................................................................................................... 57

Gibbs, Nelson F., Assistant Secretary of the Air Force for Installation, Environment and Logistics, Department of the Air Force, Department of Defense ...................................................................................................................... 109

Prepared statement .......................................................................................... 110

Questions submitted to .................................................................................... 123

Helmly, Major General James R., Commander, 78th Division (Training Support), U.S. Army Reserve, Department of the Army, Department of De

fense ...................................................................................................................... 57

Questions submitted to .................................................................................... 77

Hutchison, Senator Kay Bailey, U.S. Senator from Texas:

Questions submitted by ............................ 31, 32, 54, 55, 75, 82, 107, 123, 125

Statement of ...................................................................................................... 10

Johnson, H.T., Assistant Secretary of the Navy for Installation and Environment, Department of the Navy, Department of Defense .................................. 83

Prepared statement .......................................................................................... 87

Questions submitted to .................................................................................... 105

Johnson, Senator Tim, U.S. Senator from South Dakota, prepared statement ...................................................................................................................... 2
Page

ii

Molino, John, Deputy Assistant Secretary of Defense, Military Community

and Family Policy, Defense Agencies, Department of Defense ........................ 35

Prepared statement .......................................................................................... 41

Questions submitted to .................................................................................... 54

Statement of ...................................................................................................... 40

Preston, Rear Admiral Noel G., USNR, Deputy Director of Naval Reserve,

Department of the Navy, Department of Defense ............................................. 83

Pruett, Rear Admiral David D., Civil Engineer Corps, USN, Director, Civil

Engineering Readiness Division, Chief of Naval Operations, Department

of the Navy, Department of Defense .................................................................. 83

Randolph, Major General Leonard, Jr., Deputy Executive Director, TRICARE

Management Activity, Defense Agencies, Department of Defense .................. 35

Prepared statement .......................................................................................... 39

Questions submitted to .................................................................................... 53

Statement of ...................................................................................................... 38

Robbins, Major General Earnest O., II, USAF, Air Force Civil Engineer,

Department of the Air Force, Department of Defense ...................................... 109

Questions submitted to .................................................................................... 125

Squier, Brigadier General Michael J., Deputy Director, Army National Guard,

Department of the Army, Department of Defense ............................................ 57

Question submitted to ...................................................................................... 78

Tangney, Lieutenant General William, Deputy Commander in Chief, Special

Operations Command, Defense Agencies, Department of Defense .................. 35

Prepared statement .......................................................................................... 36

Questions submitted to .................................................................................... 53

Van Antwerp, Major General Robert L., Jr., Assistant Chief of Staff for

Installation Management, Department of Army, Department of Defense ...... 57

Questions submitted to .................................................................................... 78

Zakheim, Hon. Dov, Under Secretary of Defense (Comptroller), Office of the

Secretary, Department of Defense ...................................................................... 1

Prepared statement .......................................................................................... 6

Questions submitted to .................................................................................... 30
(iii)

SUBJECT INDEX

DEPARTMENT OF DEFENSE

DEFENSE AGENCIES

SPECIAL OPERATIONS COMMAND

TRICARE MANAGEMENT ACTIVITY

MILITARY COMMUNITY AND FAMILY POLICY

DEFENSE LOGISTICS OPERATIONS

Page

Additional committee questions ............................................................................. 53

Construction, decrease in appropriations requests ............................................... 53

Department of Defense Education Activity ........................................................... 47

Domestic medical projects ....................................................................................... 54

Encroachment issues/Coronado .............................................................................. 53

Environmental stewardship .................................................................................... 46

Excess infrastructure .............................................................................................. 55

Fuel:

Facilities infrastructure ................................................................................... 45

Infrastructure:

Other critical .............................................................................................. 46

Strategic airlift en route ........................................................................... 45

Strategic en-route projects ........................................................................ 55

Gym project .............................................................................................................. 54

Hospital projects overseas ....................................................................................... 54

Milcon:

Program ............................................................................................................. 37

Projects .............................................................................................................. 55

Military construction request ................................................................................. 45

Overseas DOD schools ............................................................................................. 55

Planning & design funds ......................................................................................... 53

Purpose ..................................................................................................................... 37

Supply center investments ...................................................................................... 46

TRICARE mangement activity ............................................................................... 48

Twenty-first century force ....................................................................................... 36

DEPARTMENT OF THE AIR FORCE

Accommodate new missions .................................................................................... 112

Additional committee questions ............................................................................. 123

Air Force:

Facilities and infrastructure ............................................................................ 109

Reserve military construction .......................................................................... 120

Air National Guard Military Construction ............................................................ 119

Barksdale Air Force Base ....................................................................................... 122

Current and new mission projects ..................................................................... 116, 117

Current mission................................................................................................... 125, 126

Demolition of excess, uneconomical-to-maintain facilities ................................... 114

Dormitories ............................................................................................................... 112

Dyess AFB—military family housing ..................................................................... 126

F–22 basing .............................................................................................................. 110

Facilities, condition of ............................................................................................. 125
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iv

Family housing ........................................................................................................ 110

Fitness centers ......................................................................................................... 112

Global Hawk at Beale Air Force Base ................................................................... 121

Housing:

Air Force family master plan .......................................................................... 119

Bachelor and family ......................................................................................... 118

Family ........................................................................................................... 112, 119

Korea ......................................................................................................................... 120

Majcom unfunded priorities .................................................................................... 125

McClellan Air Force Base ................................................................................... 114, 116

Milcon:

Funding ............................................................................................................. 123

Requirements, backlog of ................................................................................. 124

New mission projects ............................................................................................... 110

Operations and maintenance investment .............................................................. 111

Overseas:

Milcon ................................................................................................................ 113

Program ............................................................................................................. 123

Overview ................................................................................................................... 111

Planning and design/unspecified minor construction ........................................... 113

Plant replacement value ......................................................................................... 126

Public and private resources, optimize use of ....................................................... 113

Quality of life, invest in .......................................................................................... 112

Realignment and closures ....................................................................................... 114

Recapitalization ....................................................................................................... 126

DEPARTMENT OF THE ARMY

Active and Reserve component milcon projects, backlog of .................................. 75

Additional committee questions ............................................................................. 73

Ammunition demilitarization ................................................................................. 62

Anti-terrorism/force protection........................................................................ 77, 78, 81

Army:

Family housing ................................................................................................. 63

Reserve, adequate funding for the .................................................................. 77

Base realignment and closure (BRAC) .................................................................. 67

Chemical demilitarization program ....................................................................... 74

Efficient basing:

East ................................................................................................................... 70, 61

South—school enrollment ................................................................................ 70

Europe, increasing costs of the efficient basing initiative in ............................... 80

Facilities strategy .................................................................................................... 60

Family housing:

Construction ...................................................................................................... 64

Leasing .............................................................................................................. 65

Operations and maintenance ........................................................................... 64

Fiscal year 2003 summary ...................................................................................... 68

Fort Bliss:

Capacity ............................................................................................................. 82

Desalinization plant ......................................................................................... 71

Homeowners assistance fund, defense ................................................................... 66

Installation support programs ................................................................................ 62

Interim brigade combat teams (IBCTs) ................................................................. 75

Low milcon budget ................................................................................................... 68

Milcon cuts ............................................................................................................... 76

Military construction:

Army (MCA) ...................................................................................................... 61

Army National Guard (MCNG) ....................................................................... 65

Army Reserve (MCAR) ..................................................................................... 65

Spending and backlog ...................................................................................... 75

Mission facilities...................................................................................................... 61, 65

National Guard, adequate funding for the ............................................................ 78

Planning and design/unspecified minor construction........................................... 63, 65

Project bid savings ................................................................................................... 76

Reprogrammings ...................................................................................................... 72

Reservists, quality of life for mobilized .......................................................... 77, 78, 81

Sustainment, restoration and modernization (SRM) ............................................ 65

Transformation ........................................................................................................ 61
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v

U.S. Army south relocation ..................................................................................... 76

Unfunded priorities ................................................................................................. 78

United States Forces Korea Bridge ........................................................................ 73

Weapons of mass destruction/civil support teams ................................................ 73

Well being projects .................................................................................................. 61

DEPARTMENT OF THE NAVY

Additional committee questions ............................................................................. 104

Base:

Closure cleanup ................................................................................................ 85

Realignment and closure ..................................................................................

Cleanup ...................................................................................................... 84

Prior ............................................................................................................ 95

BQs, force protection in privatized ......................................................................... 108

BRAC ........................................................................................................................ 107

Budget, the fiscal year 2003 ................................................................................... 88

Facilities ................................................................................................................... 92

Condition of ....................................................................................................... 107

Replacement ...................................................................................................... 107

Flag officer housing ................................................................................................. 97

Homeport ashore ...................................................................................................... 108

Housing ..................................................................................................................... 90

Housing:

Navy and Marine corps .................................................................................... 101

Public private partnerships ............................................................................. 86

Milcon funding ......................................................................................................... 105

NATO Sub-Regional HQ ......................................................................................... 107

Navy testimony ........................................................................................................ 84

Overseas financial contribution .............................................................................. 103

Training areas encroachment ................................................................................. 100

OFFICE OF THE SECRETARY

Additional committee questions ............................................................................. 30

Arrest dismal conditions/large Reserve component cut ........................................ 31

Base:

Closures ............................................................................................................. 25

Future ......................................................................................................... 18

Realignment and closure (BRAC) .................................................................... 8

Reduction due to planned ......................................................................... 30

Budget request, fiscal year 2003 ............................................................................ 3

Business practices, improving ................................................................................ 18

Domestic defense infrastructure ............................................................................. 33

Enabling legislation ................................................................................................. 22

Encroachment .......................................................................................................... 21

Environmental progress .......................................................................................... 19

European allies help ................................................................................................ 32

Facilities ................................................................................................................... 34

Family housing ........................................................................................................ 8

Funding overview .................................................................................................... 6

Housing ..................................................................................................................... 17

Korea, infrastructure in .......................................................................................... 29

Master basing study ................................................................................................ 33

Milcon:

Budget ............................................................................................................... 31

Projects, low priority ........................................................................................ 31

Military construction ............................................................................................... 6

NATO:

Military construction ........................................................................................ 27

Security investment program .......................................................................... 8

Outyears military construction requests ............................................................... 31

Recapitalization ....................................................................................................... 16

Reserve components, reduced requests for ............................................................ 23
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vi

Revitalizing installations ........................................................................................ 14

Supplemental ........................................................................................................... 30

Sustainment ............................................................................................................. 16

Utilities privatization and energy management ................................................... 19

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