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i 

44–279 2009

[H.A.S.C. No. 110–123] 

HEARING 

ON

NATIONAL DEFENSE AUTHORIZATION ACT 

FOR FISCAL YEAR 2009 

AND

OVERSIGHT OF PREVIOUSLY AUTHORIZED 

PROGRAMS 

BEFORE THE

COMMITTEE ON ARMED SERVICES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

SECOND SESSION 

READINESS SUBCOMMITTEE HEARING 

ON

BUDGET REQUEST ON MILITARY 

CONSTRUCTION 

HEARING HELD 

FEBRUARY 28, 2008 
(II) 

READINESS SUBCOMMITTEE 

SOLOMON P. ORTIZ, Texas, Chairman 

GENE TAYLOR, Mississippi 

SILVESTRE REYES, Texas 

LORETTA SANCHEZ, California 

ROBERT A. BRADY, Pennsylvania 

JIM MARSHALL, Georgia 

MADELEINE Z. BORDALLO, Guam 

MARK E. UDALL, Colorado 

DAN BOREN, Oklahoma 

NANCY BOYDA, Kansas 

CAROL SHEA-PORTER, New Hampshire 

JOE COURTNEY, Connecticut 

DAVID LOEBSACK, Iowa 

GABRIELLE GIFFORDS, Arizona 

ELIJAH CUMMINGS, Maryland 

J. RANDY FORBES, Virginia 

WALTER B. JONES, North Carolina 

MIKE ROGERS, Alabama 

JOHN M. MCHUGH, New York 

HOWARD P. ‘‘BUCK’’ MCKEON, California 

ROBIN HAYES, North Carolina 

FRANK A. LOBIONDO, New Jersey 

TOM COLE, Oklahoma 

ROB BISHOP, Utah 

CANDICE S. MILLER, Michigan 

TRENT FRANKS, Arizona 

CATHY MCMORRIS RODGERS, Washington 

DOUG LAMBORN, Colorado 

DAVE SIENICKI, Professional Staff Member 

TOM HAWLEY, Professional Staff Member 

MEGAN PUTNAM, Staff Assistant 
(III) 

C O N T E N T S 

CHRONOLOGICAL LIST OF HEARINGS 

2008 

Page 

HEARING: 

Thursday, February 28, 2008, Fiscal Year 2009 National Defense Authorization Act—Budget Request on Military Construction ......................................... 1 

APPENDIX: 

Thursday, February 28, 2008 ................................................................................. 37 

THURSDAY, FEBRUARY 28, 2008 

FISCAL YEAR 2009 NATIONAL DEFENSE AUTHORIZATION ACT— 

BUDGET REQUEST ON MILITARY CONSTRUCTION 

STATEMENTS PRESENTED BY MEMBERS OF CONGRESS 

Forbes, Hon. J. Randy, a Representative from Virginia, Ranking Member, 

Readiness Subcommittee ..................................................................................... 2 

Ortiz, Hon. Solomon P., a Representative from Texas, Chairman, Readiness 

Subcommittee ....................................................................................................... 1 

WITNESSES 

Anderson, Hon. William C., Assistant Secretary of the Air Force, Installations, Environment and Logistics ....................................................................... 9 

Arny, Wayne, Deputy Under Secretary of Defense, Installations and Environment ...................................................................................................................... 4 

Penn, Hon. B.J., Assistant Secretary of the Navy, Installations and Environment ...................................................................................................................... 6 

Prosch, Geoffrey, Principal Deputy Assistant Secretary of the Army, Installations and Environment ........................................................................................ 11 

APPENDIX 

PREPARED STATEMENTS: 

Anderson, Hon. William C. .............................................................................. 109 

Arny, Wayne ..................................................................................................... 46 

Forbes, Hon. J. Randy ...................................................................................... 43 

Ortiz, Hon. Solomon P. ..................................................................................... 41 

Penn, Hon. B.J. ................................................................................................. 82 

Reed, David M., Deputy Assistant Secretary of the Army (Installations 

and Housing) submitted by Geoffrey Prosch .............................................. 141 

DOCUMENTS SUBMITTED FOR THE RECORD: 

Naval Shipyard MCON History (Mil) Chart .................................................. 171 

WITNESS RESPONSES TO QUESTIONS ASKED DURING THE HEARING: 

Mr. Bishop ......................................................................................................... 179 

Mr. Forbes ......................................................................................................... 176 

Mr. Hayes .......................................................................................................... 178 

Mr. Loebsack ..................................................................................................... 179 

Mr. Marshall ..................................................................................................... 177 
Page

IV 

WITNESS RESPONSES TO QUESTIONS ASKED DURING THE HEARING—Continued 

Mr. Ortiz ........................................................................................................... 175 

Ms. Shea-Porter ................................................................................................ 178 

Mr. Taylor ......................................................................................................... 177 

QUESTIONS SUBMITTED BY MEMBERS POST HEARING: 

Mr. Courtney ..................................................................................................... 190 

Mr. LoBiondo .................................................................................................... 189 

Mr. Ortiz ........................................................................................................... 183 

Mr. Rogers ......................................................................................................... 189 

Mrs. Napolitano ................................................................................................ 190 
(1) 

FISCAL YEAR 2009 NATIONAL DEFENSE AUTHORIZATION ACT—BUDGET REQUEST ON MILITARY CONSTRUCTION 

HOUSE OF REPRESENTATIVES, COMMITTEE ON ARMED SERVICES, READINESS SUBCOMMITTEE, 

Washington, DC, Thursday, February 28, 2008. 

The subcommittee met, pursuant to call, at 1:30 p.m., in room 

2118, Rayburn House Office Building, Hon. Solomon Ortiz (chairman of the subcommittee) presiding. 

OPENING STATEMENT OF HON. SOLOMON P. ORTIZ, A REPRESENTATIVE FROM TEXAS, CHAIRMAN, READINESS SUBCOMMITTEE 

Mr. ORTIZ. The subcommittee will come to order. 

I want to thank our distinguished witnesses for appearing before 

the subcommittee. Today, the Readiness Subcommittee will hear 

about our military construction programs. The President’s budget 

proposes an increase in military construction that leads one to believe that the Department of Defense (DOD) will have a well-funded infrastructure program for fiscal year 2009. 

That is a bell for Mr. Reyes because he has a lot of money in this 

budget. If he doesn’t make it in time, Randy and I are going to split 

that money. [Laughter.] 

However, I believe that a deeper review of the program may reveal that this is not the case. The services are trying to perform 

three complex tasks at the same time: Grow the Force, transformation, and maintaining existing infrastructure. Unfortunately, 

this budget proposal does not fully address any of these areas. 

First let me say that this committee strongly supports the ‘‘Grow 

the Force’’ and expansion of the Army and Marine Corps endstrength. Unfortunately, this committee has heard reports that in 

many cases, the permanent infrastructure needed to support the 

end-strength increases will arrive well after the soldiers and Marines have already reported to their permanent duty stations. 

To cover this gap in facilities, the Army and the Marine Corps 

have indicated that they will aggressively pursue a temporary 

building program and can finalize their permanent infrastructure. 

This is a very huge undertaking, with the Army alone maintaining 

over 10 million square feet of space in temporary facilities. These 

facilities will be minimally adequate and will affect the quality of 

life for our service-members and civilian employees. I understand 

the driving need for space, but I am very concerned that in the end 

we will spend a great deal of money on a short-term solution. 
2 

The services’ transportation plans present us with similar concerns. I have always opposed Base Realignment and Closure 

(BRAC) and believe that our selection process was badly flawed, 

and the reason I say this is not because it is partisan. I had one 

of my bases shut down, but it was one of the newest bases in the 

Navy’s inventory, something to the tune of close to a half-billion 

dollars, but that is another story for another day. 

In the 2005 round of BRAC, we did not eliminate any excess infrastructure. We only moved facilities around the checkerboard. 

BRAC implementation costs have doubled. Savings are down and 

now I understand that the services may not be able to meet the 

September 2011 deadline. These are all concerning, and I hope that 

our witnesses will address these issues in their testimony. 

On a related transformation note, I understand that the Air 

Force budget submissions include a request for additional F–22s, 

C–17s, and other aircraft. Unfortunately, the infrastructure to support these new airplanes won’t be available until well after the arrival of these important aviation assets. This is a very puzzling disconnect and again causes me to worry about the transformation 

program, that it isn’t being executed carefully. 

Finally, let me again voice my concerns about the maintenance 

of our existing infrastructure. In the fiscal year 2009 budget request, the Department has proposed to fund the daily maintenance 

of its facilities at 90 percent of the requirement. This means that 

10 percent of the things that are broken will not be repaired. Imagine if we only fixed 90 percent of our critical problems in our own 

homes every year. It wouldn’t take long before our houses were in 

a state of disrepair. 

In addition to this shortfall, the Army has elected to take a 

pause in recapitalizing the infrastructure, with zero restoration. 

These decisions continue a DOD trend of underfunding repairs and 

will lead to an accelerated decline of facilities that will decrease the 

quality of life and negatively impact operations on base. I don’t 

think that this is smart management. Gentlemen, I think that we 

have a lot to discuss today, and I look forward to hearing you address these important issues. 

And now the chair recognizes the distinguished gentleman and 

my good friend from Virginia, Mr. Forbes, for any remarks that he 

would like to make. Randy. 

[The prepared statement of Mr. Ortiz can be found in the Appendix on page 41.] 

STATEMENT OF HON. J. RANDY FORBES, A REPRESENTATIVE 

FROM VIRGINIA, RANKING MEMBER, READINESS SUBCOMMITTEE 

Mr. FORBES. Mr. Chairman, as always I thank you for your leadership and thank you for holding this hearing. 

To our distinguished panel of witnesses, we thank you for your 

service to our country and for being here. We know some of you 

have gone beyond the call of duty to be here on short notice, and 

we just thank you all for taking the time to do that. 

This hearing is the first of a series of budget and oversight hearings the Readiness Subcommittee will conduct on the current state 

of military readiness, and how this budget addresses the real readi-
3 

ness needs of the services. I share the chairman’s great concern 

about the state of our military readiness and our Nation’s ability 

to respond to troubled areas throughout the world. I agree that our 

military needs more resources to replenish and repair equipment 

worn out in fighting the global war on terror. But as we all know, 

building readiness is a complex art with many components. 

Like most complex subjects, success begins with a strong base. 

I bring this up today to underscore that installation readiness—the 

subject of today’s hearing—is a vital component of military readiness and the base upon which readiness is built. Readiness begins 

with the military services’ real property infrastructure—the training ranges, airspace, sea lanes and buildings used by our troops to 

prepare for the arduous missions they face around the world. 

In that regard, it is important that the record note the significant increase proposed in the Defense Department’s military construction budget for fiscal year 2009, both in the recurring military 

construction budget and the BRAC accounts. This is important for 

a number of reasons. 

First, it shows the administration and the Department of Defense are serious about effectively implementing the base closure 

round of 2005. Base closure authority was requested as a means 

to consolidate DOD assets more efficiently. A range of projects 

around the United States bear witness to that resolve, from improving medical facilities in the national capital region to consolidating Army communications electronics work at Aberdeen Proving 

Ground, Maryland, and a similar consolidation of Army logistical 

activities at Fort Lee, Virginia. Even though I was opposed, as the 

chairman was, to authorizing this BRAC round, it is the law and 

needs to be executed properly. Indeed, committed, prompt execution of the round will build readiness. 

Second, the budget provides substantial sums for the Army and 

Marine Corps to provide the infrastructure and support of these 

services and Grow the Force initiatives, another important readiness component that will ultimately relieve stress on the active 

force. I applaud these increased military construction budget and 

BRAC requests, while realizing that execution of such large 

projects will be challenging. 

Mr. Chairman, I look forward to working with you and our witnesses to make these transformational changes a reality and thereby doing all we can to improve the readiness of tomorrow’s military. 

Finally, I would like to ask the witnesses to comment on some 

unfinished business from last year. The Consolidated Appropriations Act of the last session reduced BRAC funding by over $1 billion. To my mind, that money is as critical to restoring readiness 

to our armed forces as anything we do, as it helps the Army and 

Marine Corps build the needed infrastructure for a larger force. I 

would like to request that the witnesses describe the impact on 

their services if that money is not restored. 

Once again, Mr. Chairman, thank you for holding this hearing, 

and I yield back the balance of my time. 

[The prepared statement of Mr. Forbes can be found in the Appendix on page 43.] 
4 

Mr. ORTIZ. Today, we are very fortunate to have a panel of very 

distinguished witnesses representing the Department. Our witnesses include Wayne Arny, the Deputy Under Secretary of Defense for Installations and Environment for the Department of Defense. Wayne and I—Mr. Secretary—we have known each other 

since my first day in Congress back in 1983, so it is good to see 

you again and congratulations on your new promotion. 

Secretary ARNY. Thank you. 

Mr. ORTIZ. The next gentleman is Assistant Secretary of the 

Navy for Installations and Environment, B.J. Penn. I have worked 

with you for many, many years. 

Mr. Anderson, thank you, sir. Also, I have worked with you before, and thank you so much for joining us. He is the Secretary of 

the Air Force for Installations, Environment and Logistics. 

And also my good friend George Prosch, I have known you for 

many years, so we are among friends today. He happens to be the 

Principal Deputy Assistant Secretary of the Army for Installations 

and Environment. 

Without objection, the witnesses’ prepared statements will be entered for the record. 

Mr. Secretary, good to see you again, and welcome. If you are 

ready with the start of your testimony, you can proceed. 

STATEMENT OF WAYNE ARNY, DEPUTY UNDER SECRETARY OF 

DEFENSE, INSTALLATIONS AND ENVIRONMENT 

Secretary ARNY. Thank you, sir. You look just as good as you did 

all those years ago. [Laughter.] 

Chairman Ortiz, Congressman Forbes and distinguished members of the subcommittee, I am honored to appear before you this 

afternoon. This is my first appearance, as the chairman said, before 

the subcommittee in my new capacity as the Deputy Under Secretary. I am pleased to discuss with you the President’s Budget Request for Fiscal Year 2009 as it applies to those programs that support the Department’s management of installation assets. 

I don’t need to tell you that I believe installations are the foundation of America’s security. They are the critical assets that must be 

available when and where we need them, with the capability to 

support current and future mission requirements. Our installations 

are the core of U.S. combat power here and overseas, and they are 

an inseparable element of the Nation’s military readiness and wartime effectiveness. 

Our 2009 budget request supports a number of key elements of 

the Department’s efforts to manage and maintain these assets. 

First, we continue to recalibrate our bases overseas and in the 

United States through global basing and base closure. To ensure 

the flexibility needed to contend with the 21st century security 

challenges, the budget reflects global restationing efforts by transforming overseas legacy forces, Cold War basing structures, co-station relationships, and forward capabilities to better contend with 

post–9/11 security challenges. For example, we are shifting our European posture south and east by transforming the 173rd Airborne 

Brigade in Italy and establishing a headquarters and infrastructure support for rotational presence in Romania and Bulgaria. 
5 

We are requesting $9.2 billion for BRAC 2005 implementation and $393.4 million for prior BRAC cleanup to support the stateside 

portion of our reconfiguration efforts. These amounts are approximately $1.1 billion higher than the 2008 request, and the $9.2 billion for BRAC 2005 represents full funding for the BRAC 2005 implementation assuming—and I go to Congressman Forbes and Mr. 

Chairman your statement—assuming the $939 million reduction to 

the 2008 appropriation is restored. 

Regarding the 2008 reduction, we greatly appreciate this committee’s action to provide authorization to the full amount. As Secretary Gates recently testified, if the $939 million is not restored, 

we believe we will have to work very, very hard to meet the September 15, 2011 deadline. 

The huge size of the reduction requires careful evaluation and 

management on our part, and when restored, we will need that 

funding this year and next year’s funding as early as possible in 

the fiscal year to continue our execution at an efficient and effective pace. The point at which we find ourselves right now in the 

BRAC implementation period underscores that requirement because every delay makes it increasingly difficult to complete implementation by the statutory deadline. 

Second, we continue to renew and take care of what we own. Our 

goal has been to achieve a recapitalization rate of 67 years for our 

bases, and the 2009 budget request, if enacted, exceeds that goal 

by funding recap at a rate of 56 years. This is an improvement over 

the 76-year rate achieved in the 2008 budget and is due in part to 

the impact of funding for BRAC and global basing implementation. 

It equates to an increase of $2.8 billion compared to the 2008 request. 

We have understood for years the limitations of this metric, and 

it was better than what we had before. We have been working with 

the services and with your staffs to change that. Next year, we will 

transition to a more comprehensive measure that we hope will provide a broader, more meaningful index for the Department and for 

Congress to measure our progress. 

For sustainment, this budget request reflects an additional $796 

million over last year which results in a Department-wide funding 

rate increasing from last year’s 88 percent to 90 percent this year. 

We would like to hit 100 percent for the obvious reasons, some of 

which you outline, but we have had to make difficult tradeoffs 

within this budget with other parts of the budget with the services. 

Third, we continue to provide the best housing available for our 

military members and families, primarily through privatized housing, but we will continue to operate housing overseas and in some 

few stateside locations. To date, the military services have leveraged DOD housing dollars by 12 to 1, with $2 billion in Federal investments generating $24 billion in housing development at 

privatized installations. 

The 2009 request does include $3.2 billion for housing, an increase of $300 million over the 2008 level. This will construct new 

family housing to accommodate Grow the Force, improving existing 

housing, eliminating inadequate housing overseas, operate and 

maintain our remaining government-owned housing, and fund the 

privatization this year of 12,324 additional homes. 
6 

Fourth, environmental management is critically important to our 

stewardship of what we own now. Employing a strategy that goes 

beyond mere compliance with environmental laws and regulations, 

the Department is transforming our business practices by integrating environment into our acquisition process, maintaining a 

high level of environmental quality in all our defense activities and 

preventing pollution at its source. 

We are also working to better forecast the impact of emerging 

contaminants. We have established a proactive program to make 

earlier and better-informed decisions. We have completed 20 impact assessments in the past 18 months for chemicals that include 

explosives, fuel constituents, corrosion preventives, firefighting 

foams, and industrial de-greasers. 

We have also made significant progress implementing the core 

capabilities of the real property accountability business enterprise. 

This effort spans all components, applying best business practices 

and modern asset management techniques to provide access to secure reliable information on real property assets on environment, 

safety and occupational health sustainability. 

Last but not least, we continue to fulfill our commitment to work 

with communities and states impacted by our closure and growth 

initiatives, assisting them in collaboration with other Federal resources to respond accordingly, thanks to our colleagues at the Office of Economic Assistance. 

Mr. Chairman, the Department is working hard to reposition, to 

reshape, and to take care of our installations for the future, and 

we need the items we have requested in this budget, as well as the 

$939 billion for BRAC execution that was cut from our 2008 appropriations. We are going to do all that we can to make the Department successful, and we appreciate deeply all that this committee 

has done for us over the years. It has demonstrated repeatedly its 

support for installations, and we look forward to continuing to work 

with you this year to continue to advance our mutual interests. 

Thank you. 

[The prepared statement of Secretary Arny can be found in the 

Appendix on page 46.] 

Mr. ORTIZ. Secretary Penn, whenever you are ready, you can proceed with your statement, sir. 

STATEMENT OF HON. B.J. PENN, ASSISTANT SECRETARY OF 

THE NAVY, INSTALLATIONS AND ENVIRONMENT 

Secretary PENN. Thank you, sir. 

Chairman Ortiz, Congressman Forbes, members of the subcommittee, it is a privilege to come before you today to discuss the 

Department of the Navy’s installation and environmental efforts. I 

would like to touch on a few of the highlights in this year’s budget 

request—the largest facilities budget in well over 15 years. Our request is a robust $14.3 billion, or 9.6 percent of the Department’s 

Total Obligational Authority (TOA). 

Most apparent is our increase in infrastructure investment, both 

in Sustainment Restoration and Modernization (SRM) and the construction accounts. With regard to SRM, the Navy acknowledges 

that years of underfunding have degraded its core infrastructure to 

below industry standards and that is a substantial shot in the arm, 
7 

about 41 percent this year. It is necessary to reverse course and 

maintain these systems so that we can maximize their full service 

life. 

The increase in construction—at 45 percent for military construction (MILCON), 13 percent for family housing—continues the trend 

begun last year with the Marine Corps’ Grow the Force initiatives 

to ensure their bases are ready to house and operate with additional end-strength. Our military construction program also includes a number of projects to enhance the quality of life of our 

sailors and Marines, including four fitness centers, six child development centers, and four enlisted dining facilities. 

Our fiscal year 2009 budget also includes the second increment 

of two MILCON projects that were proposed last year for full funding by the administration, but selected by Congress for incremental 

funding. While we did not consider any of the projects in our fiscal 

year 2009 program to be viable candidates for incremental funding, 

we have taken the lead in drafting criteria for incrementaling costly construction projects and working with DOD and Office of Management and Budget (OMB). We commit to work with the Congress 

to reestablish mutually acceptable and objective criteria in time for 

the next budget cycle. 

Fiscal year 2009 marks the first year since 2005 that we have 

asked for appropriated funds for prior BRAC. We have been able 

to finance all or part of our prior BRAC with land sale revenue, but 

we have used all but $25 million which are applying to this year’s 

program. 

Our fiscal year 2009 request includes $179 million for prior 

BRAC. We will need appropriated funds in future years to complete 

our cleanup work, despite the prospect of some limited revenue 

from land sale revenue in Roosevelt Roads, Puerto Rico, and other 

small parcels. We have disposed of 91 percent of the prior BRAC 

properties, so there is little left to sell, and the real estate market 

is not as lucrative as it was several years ago. 

With respect to the BRAC 2005 program, we have several goodnews stories to share. Nearly all impacted communities have established local redevelopment authorities to guide local planning and 

redevelopment efforts. We were able to facilitate the reversion of 

the former naval station Pascagoula to the state of Mississippi last 

June, and we have been able to hold down our cost increases to a 

modest two percent for the implementation period of fiscal year 

2006 through 2011. 

However, our ability to meet the statutory deadline of September 

15, 2011 hinges on the prompt restoration of the fiscal year 2008 

reduction of $939 million. I ask the committee’s support to help restore these funds as soon as possible. For the Navy, that was $143 

million. 

We continue to improve where our sailors, Marines and their 

families live. We have ordered our second barracks privatization 

pilot program in December of 2007—this one in Hampton Roads, 

Virginia—and we have almost finished with evaluating our third 

pilot project in the Jacksonville area. Surveys of our residents, both 

in family and unaccompanied housing, show that satisfaction has 

increased significantly since privatization began. 
8 

As a Department, we emphasize and participate in communication at all levels of management from the installation level, where 

focus groups bring together the residents, to command representatives and the property managers, to the annual meetings with partner Chief Executive Officers (CEOs). The Department remains engaged through all levels of management. The objective is to identify 

issues early and take prompt corrective action when required. In fiscal year 2009, the Department is investing over $900 million in its various environmental programs. We were recognized 

last year for our efforts in several areas, winning six ozone protection awards from the Environmental Protection Agency (EPA) and 

the White House, the Closing the Circle award for progress in alternative fuels and fuel conservation. 

I am troubled, though, by the press coverage lately about how 

the Navy’s training and sonar testing affects marine mammals. 

One of the most challenging threats that our Navy faces is the 

modern quiet diesel electric submarines and the tactical use of 

Mid-frequency active (MFA) sonar as the best means of detecting 

potential hostile vessels. 

The inability to train effectively with active sonar really puts the 

lives of thousands of Americans at risk. As you know, the Navy is 

operating under an exemption to the Marine Mammal Protection 

Act through January of 2009 to give the Department enough time 

to complete the required environmental impact statements and obtain letters of authorization for sonar use on our maritime ranges 

and operating areas. What gets less airtime is that the Navy will invest $18 million, 

or more than any other agency in fiscal year 2008, for marine 

mammal research—again, more than any single agency. This research aims to develop effective mitigation and monitoring methods 

to reduce any potential effects to sonar and other human-induced 

sound on marine mammals. 

We have made significant progress in the past year in planning 

for the relocation of Marines from Okinawa to Guam. We established the Joint Program Office, both the headquarters and forward 

elements. The environmental impact statement for Guam is underway with a targeted record of decision in January, 2010—in time 

for construction in fiscal year 2010. 

We are working closely with our counterparts in the government 

of Japan to prepare the details for construction requirements and 

their phasing and construction priorities, and we are working with 

our domestic partners—the government of Guam, the Department 

of Interior, OMB and other Federal agencies—to ensure the island 

meets the challenges of such a concentrated influx of people and 

workload. 

Finally, it has been an honor and privilege to serve this great 

Nation and the men and women of our Navy and Marine Corps 

team, the military and civilian personnel and their families. 

Thank you for your continued support and the opportunity to testify before you today, sir. 

[The prepared statement of Secretary Penn can be found in the 

Appendix on page 82.] 

Mr. ORTIZ. Thank you, sir. 

Secretary Anderson. 
9 

STATEMENT OF HON. WILLIAM C. ANDERSON, ASSISTANT SECRETARY OF THE AIR FORCE, INSTALLATIONS, ENVIRONMENT AND LOGISTICS 

Secretary ANDERSON. Good afternoon, Mr. Chairman, Congressman Forbes. On behalf of America’s airmen, I want to thank every 

member of this distinguished committee for your continued support 

of America’s Air Force. 

As our Nation finds itself both in a time of war and a time of 

transition, the Air Force continues to evolve to ensure we stand 

ready to protect America and our interests. Beginning with Operations Desert Shield and Desert Storm, the Air Force has been in 

continuous combat operations now for more than 17 years. We currently have over 22,000 airmen deployed in direct support of Operations Enduring and Iraqi Freedom. My team is firmly committed 

to supporting the Air Force’s priorities of winning today’s fight, 

taking care of our people, and preparing for tomorrow’s challenges. 

We are changing on a scale that we have not seen since the postCold War drawdown, and for us to support these priorities we must 

be transformational in all that we do. In order to provide global 

vigilance, global reach, and global power, we need high-quality 

warfighting platforms. Those are our installations. I would like to 

highlight just a few of the significant initiatives that we are implementing to ensure installation quality and superior warfighter support well into the future. 

Under our corps of discovery concept, we benchmarked against 

Fortune 500 companies like GM, GE, IBM and Bank of America. 

We are capturing best practices in all aspects of infrastructure, 

from adopting new asset management philosophies to transforming 

our informational technology systems. With our organizational 

transformation, we are also committed to making joint basing a 

raging success. 

The Air Force believes that joint bases should be the preferred 

duty station for every soldier, sailor, airman and Marine. To accomplish this in each instance, we must select the highest quality of 

life standard from among the individual bases and mandate that 

that quality of life standard is implemented across the entire joint 

base. Also maintaining individual service control of real property 

and resources allows for the natural tension between customer and 

supplier. This has proven to be the most effective and efficient way 

for suppliers to respond to customer needs. 

On the environmental front, the Air Force has established an aggressive internal goal to have all cleanup remedies in place at our 

active installations by the end of 2012. That is two years ahead of 

the current DOD goals. We are proactively working with the EPA 

to break the paradigm of the inefficiencies of Federal Facilities 

Agreements, or FFAs. We feel FFAs are non-value-added instruments focusing on administrative process, as opposed to timely and 

effective cleanup. 

Our proposed solution is a streamlined effort through an interagency agreement that meets the explicit requirements of the Comprehensive Environmental Response, Compensation, and Liability 

Act (CERCLA). The Air Force believes this process modification 

will protect our communities, reduce the taxpayer burden, and return back land to productive use as quickly as possible. 
10 

Let me take a moment to talk about one of my highest priorities, 

and that is energy. The increasing cost of energy and the Nation’s 

commitment to reducing its dependence on foreign oil have led to 

the development of the Air Force energy strategy to reduce demand, increase supply, and change the culture within the Air Force 

so that energy is a consideration in everything that we do. The Air 

Force is investing in its facility energy future with $14 million in 

2008 and $229 million across the remainder of the Five-Year Defense Plan (FYDP). We have been recognized as the number one 

Federal purchaser of renewable energy now four years running. 

The Air Force is DOD’s leading consumer of jet fuel and 10 percent of the total U.S. jet fuel market. To meet our jet fuel needs 

of the future, the Air Force is evaluating domestically-sourced synthetic fuel alternatives. We have certified the B–52 to fly on a synthetic fuel blend, and are on track to test and certify the C–27, B– 

1 and F–22 on synfuel this fiscal year, with the entire Air Force 

fleet being certified by early 2011. 

At Nellis Air Force Base, Nevada, through a public and private 

partnership, we installed the largest solar array in the Americas, 

producing 14.2 megawatts of clean renewable power, while delivering savings of nearly $1 million a year to the installation and to 

the American taxpayer. At our underutilized land at Malmstrom 

Air Force Base in Montana, the Air Force is exploring the potential 

for a privately financed and operated coal-to-liquids fuel plant. 

We are also pursuing energy enhanced-use lease projects at 

Edwards Air Force Base in California, Luke Air Force Base in Arizona, and Kirtland Air Force Base in New Mexico. We are also 

looking into the merits of hosting a small-package nuclear facility 

on an Air Force installation at the request of several Members of 

Congress. 

At the same time, the Air Force recognizes that energy and environment are tightly linked. Not only have we committed to purchase only alternative energy sources with a greener footprint than 

current options, but the Air Force is committed to being a leader 

in establishing a global consortium to tackle the reduction, capture 

and reuse of greenhouse gas emissions. 

Being a driving force is not risk-free. Our installations are 

warfighting platforms which must continually perform to support 

the warfighter. The fiscal year 2009 President’s budget request for 

the Air Force military construction is more than $2.1 billion, comprised of traditional MILCON, BRAC and housing investments. 

Unfortunately, we do face demands on our resources that require 

us to make some very tough choices. 

Our challenging budgetary environment includes increased operations, maintenance and personnel costs, the cost of the war 

against terrorism, and inflation factors that reduce overall buying 

power. These demands have forced us to self-finance the centerpiece of future dominance, a massive and critical recapitalization 

and modernization effort of our aging air and space fleet. To accomplish this, we are accepting manageable risk in facilities and infrastructure funding. 

The current and future readiness and capability of the Air Force 

to deter our enemies and, when necessary, fight and win this Nation’s wars depends heavily upon the state of our power projection 
11 

platforms—our installations. As the Air Force continues to modernize and recapitalize, we will wisely invest our precious funding 

allocated to military construction, operations and maintenance, 

BRAC, the environment, military family housing, and energy. This 

will enable us to win today’s fight, take care of our people, and prepare for tomorrow’s challenges. 

Mr. Chairman, thank you. 

[The prepared statement of Secretary Anderson can be found in 

the Appendix on page 109.] 

Mr. ORTIZ. Thank you. 

Secretary Prosch, go ahead with your statement, sir. 

STATEMENT OF GEOFFREY PROSCH, PRINCIPAL DEPUTY ASSISTANT SECRETARY OF THE ARMY, INSTALLATIONS AND 

ENVIRONMENT 

Secretary PROSCH. Mr. Chairman, Congressman Forbes, and distinguished members of the subcommittee, it is an honor to appear 

before you this afternoon to discuss the Army’s military construction budget request for fiscal year 2009. We have submitted a 25- 

page detailed written statement. I will briefly summarize it in a 

page-and-a-half. 

Thank you for your continued support to our soldiers and their 

families serving around the world. They are and will continue to 

be the centerpiece of our Army, and their ability to successfully 

perform their missions depends upon your continued support. We 

must transform and rebalance our Army in an era of persistent 

conflict. This transformation affects the entire Army, to include our 

operational forces, our institutional Army, and our installation infrastructure. 

We will accomplish these efforts by translating the Army’s four 

major imperatives—sustain, prepare, reset, and transform—into 

initiatives such as base realignment and closure, global defense 

posture realignment, Army modular force transformation, Grow the 

Army, the Army Medical Action Plan, and the soldier and family 

action plan. 

Restoring balance to the Army is critical to our success in implementing the Nation’s military strategy and providing our soldiers 

and families a quality of life commensurate with their quality of 

service. The fiscal year 2009 budget includes projects to ensure 

that our facilities continue to meet the demands of the transforming Army and help put the Army back into balance. The Army’s fiscal year 2009 budget request includes $11.4 billion 

for military construction appropriations and associated new authorizations, Army family housing, and BRAC. And $4.2 billion of this 

supports the Grow the Army initiative. We have put in place the 

necessary oversight structure to execute this critically important 

program. The Army’s BRAC request of $4.5 billion will continue to fund 

both BRAC and global defense posture realignment actions necessary to comply with BRAC 2005 law. The Army took a $560.2 

million reduction as our share of the $938 million DOD-wide cut 

to the BRAC account last year. It is absolutely critical that we 

quickly recover and restore these funds this year. This cut includes 

10 Reserve armed forces centers, 9 training and range projects, and 
12 

12 quality of life soldier family projects that I would be happy to 

go into more detail on during the hearing. 

Our fiscal year 2009 military construction and BRAC budget request is for balanced programs that support our soldiers and their 

families, continued operations, Army transformation, readiness, 

and DOD installation strategy goals. We can execute these programs with your support through sustained and timely funding. 

Thank you again for the opportunity to appear before you today 

and for your sustained continued support for America’s Army. 

Mr. ORTIZ. Thank you, Mr. Secretary. 

At this moment, I would like to request unanimous consent, and 

after consultation with the minority, I ask unanimous consent that 

Representative Napolitano be allowed to participate in today’s 

Readiness Subcommittee hearing and to be authorized to question 

the witnesses. She will be recognized at the conclusion of the questions by members of the subcommittee. Hearing no objection, so ordered. 

Thank you so much for your testimony. Saying from the beginning that I am not partisan, let me ask a question about Naval Air 

Station Kingsville. [Laughter.] 

Naval Air Station Kingsville has significant issues with regard to 

the maintenance and restoration of the facilities. The Department 

elected to fund maintenance facilities sustainment at 90 percent of 

the requirement. This level of funding will lead to accelerated deterioration of facilities. This question is directed to inquire as to the 

appropriate level of sustainment. 

Mr. Secretary, I believe that you have been to Naval Air Station 

Kingsville, Secretary Arny, and can see the value of continued 

maintenance of facilities over the long term. Yet the Department 

requested the funds for sustainment at 90 percent at all installations. Why does the Department continue to advocate for facilities 

sustainment below optimal levels? 

Secretary Penn, I understand the Naval Air Station Kingsville 

was funded at 48 percent of sustainment in fiscal year 2008. Can 

you explain this incredibly low sustainment rate and maybe I can 

understand why this is being done? It is hard to understand, but 

maybe you can make me understand why it is at this low level. 

Take your time, take your time. [Laughter.] 

Secretary PENN. Mr. Chairman, as you know, the facilities 

sustainment and recap metrics were developed by DOD as macrolevel programmatic tools, and the results can be distorted both up 

and down when applied at the installation level. For instance, 

Navy centrally manages costly special projects which can be in the 

range of tens of millions of dollars for sustainment and recap rates. 

I think it is that variation that you see. 

Mr. ORTIZ. Would you like to add anything to that? 

Secretary ARNY. From a macro point, as I mentioned to you before, the base that I was most used to was Beeville and it is gone 

now, in Texas. 

Mr. ORTIZ. We can make it up in Kingsville. [Laughter.] 

Secretary ARNY. Okay—especially during the fall, during hunting 

season. I understand Kingsville is very good in the fall during 

hunting season. 
13 

From the macro perspective, Mr. Groening, my predecessor, I 

think went a long way toward bringing sustainment back up to 

higher rates. As you well know, within the services we are contending with our procurement associates for scarce funding in all 

of our budgets. 

At the Office of the Secretary of Defense’s (OSD’s) urging initially and then finally mandated that all the services be sustained 

at 90 percent or higher, and it was Mr. Groening’s goal and I hope 

to pursue that to get that through the Program Objectives Memorandum–10 (POM–10) back up to 100 percent. One-hundred percent has always been OSD’s goal, but up until this year, it wasn’t 

mandated. In order to get it back up to the rate at which we felt 

it needed to be, we mandated 90 percent and we are going to go 

to 100 percent. Now, that is on a macro scale. 

I have talked with Mr. Penn and his staff and we are working 

with ours to discuss the specific incidence at Kingsville, but that 

is at a macro level and at certain levels the regions make their 

puts and takes on certain bases. We will have a specific answer for 

you on Kingsville. 

Mr. ORTIZ. You know, Secretary Penn, the recap rate at 

Kingsville is 230 years. The recap rate at Corpus Christi is 100 

years. Maybe you can explain why there is this big difference at 

the local levels. 

Secretary ARNY. If I could comment? Again, from a macro level, 

we have all felt the inadequacy of the recap rate when we measure 

it in years, because it only looks at a specific year. Right now, we 

are boasting in our statements that we have recap rates well below 

67 years. I mention in my statement that is masked by the fact 

that we are making a lot of investments in BRAC. 

So if you look at the BRAC bases where we are realigning, like 

moving Willow Grove in the Navy to McGuire primarily. We are 

moving Brunswick down to Jacksonville. Their recap rates will be 

very, very low in numbers of years. We have all recognized over the 

past few years that recap rates in years is not a very good measure. It is the best that we have. And we have worked for the past 

few years, and next year we will have a rate that takes these factors into effect. 

So I don’t know the specifics on those two bases, and we are 

checking on that, but I think you will find that they haven’t had 

a MILCON project in a couple of years. Now, they may be in wonderful shape and they don’t need one, and then next year they may 

get one or two large projects, which would drive their recap rate 

from 100 or 200 years down to 25 or 50 years. So it is not a very 

good measure. It is the best we have, but it does have inconsistencies up and down. As far as the details of those specifics, we will 

have to get back to you. 

[The information referred to can be found in the Appendix beginning on page 175.] 

Mr. ORTIZ. One of the reasons why I am concerned with both of 

the bases, as you well know, we are way down south, and it doesn’t 

take too much reading or looking at activity to realize what is happening in Central and South America. This is why I feel that we 

need to keep our bases in tip-top shape, from training, to the facilities deterioration. I could go on and on. This is why I am con-
14 

cerned. I hope that by all of us working together that we will be 

able to find the right solution to address these problems. 

I don’t want to take too much time because we have members 

who are still here even though we will finish at 12 o’clock. Let me 

allow now my good friend, Mr. Forbes, to see if he has any questions. Randy? 

Mr. FORBES. Mr. Chairman, could I request that Mr. Hayes go 

out of order and take my spot at this particular point? He has a 

plane to catch, if you don’t mind. 

Mr. ORTIZ. We understand. Go right ahead. 

Mr. HAYES. Thank you, Mr. Chairman. 

Mr. Arny, Mr. Reed is co-chair of the House Impact Aid Caucus, 

a high priority for all of us to increase impact aid assistance to 

local school districts, and you know the details. It is my understanding the Department of Defense has been working with the Department of Education to improve the process. Could you bring us 

up to date on the status of those efforts and where we are now? 

Secretary ARNY. Sir, I am new to education, but I did get a briefing and I would be happy to get back to you with more details. I 

know we are working very closely with the Department of Education. As a matter of fact, we received legislation I think thanks 

to the Congress that allows us to reach out from the Office of the 

Secretary of Defense to the Department of Education to work with 

them and to work with the communities to make sure, especially 

at the bases where we have significant growth, to work with the 

states in making sure that those education facilities are in place 

as our troops get there. 

Mr. HAYES. I appreciate that. As you know, Fort Bragg is the 

epicenter of the universe. 

Secretary ARNY. I thought it was Kingsville. [Laughter.] 

Mr. HAYES. And with the expansion underway, for which we are 

very grateful, and Mr. Prosch is very familiar, and I appreciate 

your efforts on that, and if you will get back to us and give us the 

good news about how we are going to help Dr. Harris in the local 

schools. 

[The information referred to can be found in the Appendix beginning on page 178.] 

Mr. HAYES. Mr. Prosch, do you have a comment? 

Secretary PROSCH. Well, I would just like to say that OSD, with 

the Office of Economic Adjustments, has done a very good job grabbing the bull by the horns here. Working with the Department of 

Education, we have made four joint trips to Fort Riley, Fort Drum, 

Fort Benning and Fort Bliss. I think the Department of Education 

is starting to have confidence in our numbers and starting to see 

progress there. We are hoping that we can eventually change this 

policy to provide impact aid in advance, rather than a year after 

the students are on the ground. 

OSD is doing a good job trying to pursue that goal. We are hoping to visit OMB, led by OSD, in the near future to try to work 

that policy change, because that would be a tremendous advantage 

and a tremendous tool for some of your poorer counties that would 

have a hard time raising literally hundreds of millions of dollars 

for new schools if they had the advantage of having the advance 
15 

impact aid to hire teachers, to buy books, to even lease perhaps 

mobile classrooms while waiting for the brick and mortar. 

So OSD is doing a good job, and I think we are going to see some 

progress here, sir. 

Mr. HAYES. I appreciate that. We will continue to encourage 

them because it is crucially important. It gives our local school systems flexibility to do things that they need to do, and they are 

working with us very well. 

Last question, Mr. Reed, again speaking for Fort Bragg, reflects 

the wonderful men and women wearing the uniform everywhere. 

But as BRAC moves forward and U.S. Army Forces Command 

(FORSCOM) and Army Reserve headquarters move to Fort Bragg, 

the status of BRAC implementation—are we on track for the fiscal 

year 2011 deadline? 

And also I know we have a little bit of a traffic delay moving our 

Special Forces folks down to Eglin, with some issues there. Could 

you update us on that? Mr. Prosch, you look like you are ready to 

go. Take it and run with it. 

Secretary PROSCH. Yes, sir. Sir, we are on track. We do have the 

FORSCOM headquarters move funded. It would help if we could 

get that $560 million restored to make sure that we can take care 

of all of our needed projects. I would tell you that General Wilson 

is launching tonight down at Eglin Air Base with a team to coordinate with the Air Force. We are getting good cooperation with the 

Air Force for the move of the Seventh Special Forces Group. We 

will keep you posted on that. 

We feel confident about the BRAC moves. I was at Fort Bragg 

recently speaking to the Chamber of Commerce. I hosted a visiting 

delegation this morning for breakfast from Fort Bragg. So there is 

an active dialogue going between your district in Fayetteville and 

the Army team. 

Mr. HAYES. Absolutely. I will be there tomorrow. 

Mr. Chairman, thank you. 

Mr. ORTIZ [continuing]. So we are happy to have you. [Laughter.] 

Mr. HAYES. We have a lot of the district covered there. I just 

kind of take ownership of it. 

Mr. ORTIZ. He couldn’t make it. He is ill today. That is why Mr. 

Reed is not here, but we have a good replacement for him. 

Mr. HAYES. Jim Marshall even speaks favorably. He keeps the 

‘‘air’’ in ‘‘airborne.’’ Right, Jim? 

Mr. ORTIZ. Mr. Marshall. 

Mr. MARSHALL. Thank you, Mr. Chairman. 

I appreciate all of your services, the work that you do, and I particularly appreciate Secretary Prosch being here on short notice 

doing his duty. 

Secretary Arny, I will use Robins Air Force Base as an example, 

but it applies to installations across all of the forces and across 

DOD generally. We have a large number—in the thousands—of 

Robins employees who are working in facilities that are World War 

II warehouses that were renovated at some point quite some time 

ago, and are about as dated as facilities can possibly be. 

We also in Robins—and there are a number of other issues, but 

I will just highlight one—Air Force Reserve has some of its per-
16 

sonnel located off-base. If for no other reason than force security, 

we would like to move those folks from off-base on-base. 

With the initiatives that this Congress and DOD put together for 

military housing, we have had remarkable success in bringing in 

private dollars and essentially recapitalizing. It has really truly inured to our benefit in ability to retain, to recruit, to keep our families happy—that sort of thing. 

I know that DOD has given some thought to using a similar device to recapitalize some of the facilities that I have just described. 

There is no question that productivity—just simply the wellness of 

our employees—will be enhanced if we could recapitalize and put 

them in modern facilities, safer facilities, more efficient facilities, 

those sorts of things. 

Now, I know the concern is that the tendency by Congress and 

any given Administration would be to frontload and effectively obligate future taxpayers to pay for the toys that we are buying right 

now. That would be true of platforms. It is true of weapons systems. It is true of installations as well. 

But I would like you to comment a little bit about, are you thinking about any way in which we could move forward? I just use Robins as an example because I am familiar with that, but I know we 

have similar problems across the force, and I suspect that there are 

a few instances in which we have brought in private developers. 

They fund it and they fund it against some long-term lease agreement, something along those lines entered into with DOD, in order 

to upgrade installations. 

Secretary ARNY. We looked at that. I spent the last six years 

working with Mr. Penn and his colleagues in the Navy, and worked 

heavily on privatization for housing and also in family housing and 

bachelor housing. And back in 2002, I took a look personally at how 

we could do privatization for administrative facilities, because I 

agree with you that there are a lot of administrative facilities that 

we use and we don’t maintain them as well as we should. 

The problem that I have found is we got permission thanks to 

the Congress—begrudgingly I think out of OMB and the Congressional Budget Office (CBO)—to do this program. I spent 2 1/2 years 

in the 1980’s working at OMB so I think I understand the mentality. You were right in saying that they want to make sure that 

we don’t put a debt on the future that we don’t clearly lay out 

there. So they are very much for full funding. 

The advantage that we have for privatization is that we take the 

basic allowance for housing and we give it to the sailor, soldier, airman and Marine, and then he makes that choice. The privatized 

housing is truly private. It belongs to the corporation, which in the 

Navy’s case we are a minority partner. We transfer the assets 

physically to them. 

So you have a stream of potential income to that housing that 

is not controlled by the Department. We give it to the sailor and 

he makes a choice. He either goes into private housing or he rents 

a house off-base or he buys a house off-base. That has been the key 

to privatization for housing. 

Unfortunately, in administrative facilities, we don’t have that. 

We don’t give our units—maybe it would be better if we did, if we 

assigned a certain amount of money to the units and then they had 
17 

to go buy or rent space on the base. To date, and I defer to other 

members of the panel, I have not figured out nor have the people 

working with me, figured out a way to be able to do that without—— 

Mr. MARSHALL. Without having the problem that I described, 

that we would frontload everything and pass the buck to the next 

generation. 

Secretary ARNY. Yes, sir. 

Mr. MARSHALL. I will ask a question of Secretary Anderson. You 

mentioned very briefly that at the request of a couple of Members 

of Congress, you were looking in to the possibility of nuclear power 

generation on military facilities. I am interested in that. 

My time is up, I think. Mr. Chairman, is my time up or not? It 

was red to start out with, so if I can inquire about this? 

Mr. ORTIZ. Go ahead, because we appreciate the fact that a lot 

of members stayed here. We want to allow everybody and I know 

you have flights to catch—— 

Mr. MARSHALL. Well, let me very quickly explore this. Could you 

give us a little detail about that initiative? I was on the USS Enterprise this Thanksgiving and was struck by how efficient all of 

our—well, throughout the Navy—the use nuclear power has been, 

and beneficial to us. Could you describe a little bit more about 

what you all have in mind and what you might be thinking about? 

Secretary ANDERSON. Sure. Yes, sir. Just to kind of step back a 

little bit, I think that the request specifically came to the Air Force 

from several members of the Senate, because of our status as the 

largest user of energy in the Federal Government. So rather than 

being a research or policy type of a request, it was more looking 

at us as a large major user of energy in this country. 

Back in the summer, we received some requests by letter for the 

Air Force to look at whether it would be feasible to host what they 

call a small package gas-cooled new type of technology reactor on 

an Air Force base, the issue of course being that the United States 

has lost its technological advantage or edge in nuclear over the last 

number of decades. 

As we move forward in finding locally sourced or domestically 

sourced sources of energy, we ought to have nuclear in the debate. 

The Air Force, having bases that are secure—you can put these 

pieces of equipment behind the fence and defend them that way— 

seemed to make a lot of sense. 

In addition, the Defense Sciences Board suggested that the vulnerability to the grid would suggest that generating power on a 

military installation makes a lot of sense, and having an energy 

source that only needs refueling every number of months or years 

certainly provides an advantage. 

We spent the entire summer taking a look, talking to the Department of Energy, the developers, the financiers in this industry, and 

determined that it would be potentially a feasible alternative. 

Mr. MARSHALL. Let me interrupt if I could. 

Secretary ANDERSON. Sure. 

Mr. MARSHALL. Again, everybody’s time is kind of precious here, 

as well as yours. 

What size are you thinking? Do you have specific sizes? Do you 

have specific manufacturers? Do you have locations? Could you 
18 

share the names of the senators who are asking that these things 

be put into their states? I assume that is what is going on—those 

sorts of things? 

Secretary ANDERSON. Okay. Absolutely. The two senators were 

Senators Craig and Domenici. There has been no decision where to 

put these things. We all believe, including the two senators, that 

there has to be a significant amount of research done before we decide on a site. 

The size of the reactors are somewhere between, we believe, 100 

to 250 megawatts each as individual units. None are currently in 

production. There are companies around the world that are looking 

at these technologies. None are Nuclear Regulatory Commission 

(NRC) licensed yet, and we know it has to occur. 

Our vision, sir, is essentially to do the following. Next week, we 

will be having the nuclear—— 

Mr. MARSHALL. Let me interrupt you. 

Secretary ANDERSON. Sure. 

Mr. MARSHALL. Is this an initiative that you are involved with 

DOD-wide, so DOD generally is interested in this? 

Secretary ANDERSON. I don’t want to speak for my colleagues. 

Mr. MARSHALL. Secretary Arny, just briefly? 

Secretary ARNY. Again, I am new here. I think some of our staff 

is working with the Air Force. It is one of the items that I need 

to look into. 

Mr. MARSHALL. I guess, Mr. Secretary—— 

Mr. ORTIZ. We have other members that—— 

Mr. MARSHALL. Yes. Could you give us as much information in 

writing as you can about this, and then keep us apprised as you 

move forward? 

Secretary ANDERSON. Absolutely. We will get written material to 

the committee right away. 

Mr. MARSHALL. Thank you. 

[The information referred to can be found in the Appendix beginning on page 177.] 

Mr. ORTIZ. Mr. Forbes. 

Mr. FORBES. Thank you, Mr. Chairman. 

I am going to be as concise as I can. If I can throw out two questions at one time so that we can get to the answers, and if you 

can’t do it today, if you would submit it for the record. 

First for Secretary Penn, as you know, the Navy is currently 

looking at the possibility of some Outlying Landing Fields (OLFs) 

in Virginia and North Carolina. I was just wondering if you had 

a timeline for when the environmental impact studies would be 

back on any of those sites. 

Second, are you considering or can you discuss any potential incentives that might be utilized for any of the local residents and 

officials who might be impacted by the location of those outlying 

fields? 

And then third, will the Navy be seeking any authorization or 

appropriation for the outlying fields in the current budget? 

As you are looking at that, if the other witnesses would consider 

either for today or to submit for the record, if each of you would 

address what impact specifically in terms of cost and/or delays, 

does the $1 billion cut in BRAC funds have on the departments 
19 

and each of your respective services in terms of execution of the 

2005 BRAC round, because that is something that is important for 

us to know as we are trying to fight to get those funds back in. 

[The information referred to can be found in the Appendix beginning on page 176.] 

Mr. FORBES. Secretary Penn, do you have any thought on the 

OLF situation? 

Secretary PENN. Yes, sir, I have. Thank you. Thank you for the 

opportunity. 

As you know, we listened to the population in North Carolina, so 

we have withdrawn Washington County from our choices. We have 

been working closely with both the governor of Virginia and North 

Carolina, to environmental agencies. North Carolina has given us 

two additional sites, and Virginia three sites, that we are going to 

conduct the Environmental Impact Statements (EISs) at. We are 

going to look at them. 

The EIS normally takes 3 years, or 30 months. The cost is about $10 million. Thus far, we have no funding, no MILCON funding at 

all in any of the OLF accounts. We have $3 million for the EIS for 

this year and $2 million for next year, and that is all we have programmed. 

On incentives, we are looking at several different incentives. We 

are still on the ground level at that with everything from schools 

on, to make it truly beneficial, but nothing has been decided yet 

and we haven’t gone to Mr. Arny with our recommendations. 

We have no appropriations at all. We really need the OLF. We 

are sending our troops into harm’s way. As I say, we have two sites 

in North Carolina, three in Virginia, and we have included the tactical airplanes from Norfolk, as well as Oceania, in our study. So 

we want one field where all the tactical aircraft can practice their 

carrier landings. 

Mr. FORBES. The cuts, with specificity, or is that something you 

need to submit for the record at a later point? 

Secretary PROSCH. Yes, sir. Let me just say that predictable and 

timely funding is absolutely key for us to be able to operate an organization the size of the United States Army, with a million men 

and women in uniform, over 200,000 civilians, and over 200,000 

contractors. 

When funding is unpredictable, it makes it very hard to plan 

long term. One of our great concerns as part of this right now is 

the BRAC funding. Last year, you all did not fund the entire BRAC 

bill, and for the Army we were $560 million short going into this 

year in BRAC funding. 

It is going to make it very, very difficult for us to meet what the 

law requires—finishing BRAC by September, 2011. We need the 

funding. We need it sooner, rather than later, as well as military 

construction funding which is critical to maintaining support for 

our families. We are moving tens of thousands of soldiers around 

the world. We are building housing, support structures all around 

the world. 

The delays that we have experienced in receiving the military 

construction funding has complicated our ability to be able to build 

what we need, when we need it, and maintain the type of detailed 

synchronization that is necessary in order to manage the personnel 
20 

in a huge organization such as the Army. So thank you for reconsidering that. 

Secretary ARNY. Mr. Forbes, we will get some specifics to you. 

We have been asking for it. As you well know, and I have spent 

most of my life in and around the military, we have a ‘‘can-do’’ attitude. So consequently, when people ask us to slip and make a later 

target time, we always stretch it. Sometimes I can’t give you the 

specifics. 

All I know is we are planning. We are planning around it now 

to the point where we believe—at least in the Navy, where I was 

a couple of weeks ago—there are a couple of buildings that if we 

don’t get that money by the very beginning of the first quarter of 

2009, and the immediate response from some folks is, well, we can 

wait until 2009—well, unfortunately, we have seen over the past 

years and you all know, we can’t get our funding for the 2009 budget in on October 1 of 2009. It just doesn’t happen. 

So we really do need it prior to the end of this fiscal year. In 

about three months we will be able to see some of the ripple effects 

on the slow-down and perhaps be able to give you more details. 

Mr. FORBES. My time is up and I don’t want to impose on other 

members, but I just want to let you know, we are trying to help 

all of you. This is the hearing to be able to get that information 

in the record, so I am just giving you that opportunity to put it in 

the record at a later point in time if you can. But we need that 

specificity so that we can try to help and make sure that that takes 

place. So you have that open invitation if you would like to later 

put it in. 

[The information referred to can be found in the Appendix beginning on page 176.] 

Secretary PENN. To repeat what Mr. Arny was saying, we are 

going to have to delay some moves from 2008 to 2009, and delay 

the award of two BRAC construction awards. One of the areas is 

in investigative facilities agencies, which we are trying to consolidate at Quantico. We are putting all the services down there in one 

large investigative agency. The other is the Reserve Center at Fort 

Lewis, Washington. So if we don’t get the money as soon as possible, we are not going to do it. We can’t do it. 

Secretary ANDERSON. And just briefly from the Air Force per- spective, of the $1 billion, $235 million fell upon the Air Force, and 

represents 20 percent of our fiscal 2008 programs, so it is significant. As you know, sir, because of the complexity of many of these, 

it is a domino effect. So as you don’t pick over one domino in one 

year, it certainly trickles down and puts us at risk at the end of 

the game. 

We have already deferred 21 projects, and are trying to analyze 

the impact of that to making the September, 2011 final deadline. 

If that money is restored sometime during this fiscal year, we will 

figure out a way to get back on track. If it is permanently lost, 

though, to be honest, we will be hard broke. We will not be able 

to make if the money goes away permanently. 

Mr. FORBES. Please take advantage of that invitation. 

Mr. Chairman, I want to help you. We just need the specificity 

so we can do it. Mr. Chairman, thank you. 

Mr. ORTIZ. Thank you. 
21 

Mr. Forbes, Mrs. Napolitano and any other member that might 

have questions for the record, I ask unanimous that they be allowed to submit those questions. 

Mr. Courtney. 

Mr. COURTNEY. Thank you, Mr. Chairman. 

I want to thank the witnesses. It is good to see Secretary Arny 

and Secretary Penn and the others here today. I particularly want 

to congratulate Secretary Penn on his son-in-law’s appointment as 

the new Admiral for the squadron in the Northeast. We look forward to seeing him in Groton. 

Secretary PENN. Thank you. 

Mr. COURTNEY. I wanted to just take a moment, Secretary Penn, 

to have your thoughts on the budget which we have before us that 

indicates that the sub base in Groton is going to receive $104 million over the next 5 years. That is on top of some investment in 

the base over the last year. It was $14 million for demolition of 

some of the old structures that Secretary Arny approved. Mr. Ortiz 

was extremely helpful in terms of getting special grant funding for 

the sub learning center at the Groton sub base. 

The reason why I go through this litany is that as you know Connecticut has gone through three BRAC rounds where it was the 

perils of Pauline in terms of whether Groton was going to survive. 

Frankly, people have a bit of a concern that it is just a matter of 

time before the Navy puts us on the chopping block again. So I was 

wondering what your perspective is on the future of sub base New 

London in Groton, Connecticut as far as the Navy’s future plans 

are concerned. 

Secretary PENN. I think with the MILCON we are programming 

to invest in Groton—as you know, we are doing a pier. We are looking at a commissary, a rec center. We just put the new Submersible 

ship-guided nuclear (SSGN) submarine training center in. Fortunately, I was just there maybe six months ago, and I see a lot of 

good things happening at Groton. I see it as an enduring base. 

We are putting money in there, MILCON in there. I also think 

what the state is doing to enhance the infrastructure is going to 

help long term. We are looking for ways we can work with you on 

that. Thank you for that contribution. 

Mr. COURTNEY. Absolutely. The sub learning center at the end of 

the day is probably the most exciting new development there. 

Secretary PENN. It is. 

Mr. COURTNEY. As you know, it is the largest operational military base in New England, and the people obviously are the most 

important, and the young men who are trained there. It is so impressive to see the way the Navy shapes that skill. 

Secretary PENN. Yes, sir. 

Mr. COURTNEY. One of the projects that is happening this year 

is the construction of the new pier. That, combined with the pier 

that was in last year’s plan, goes a long way in terms of accommodating the Virginia-class assault attack submarines. I guess, 

though, it is unclear whether or not there are other piers slated 

after we get done with this project this year, is it your sense that 

there is going to continue to be that upgrading of that critical part 

of the infrastructure? 
22 

Secretary PENN. We are still studying that at this time. As you 

notice, we have a two-year window between the construction efforts, just to allow us to continue our op tempo that we need, but 

we are still studying that at this time. 

Mr. COURTNEY. Thank you. As you know, the state of Connecticut itself has made a commitment through the legislature and 

the governor’s office to partner with the Navy, and we look forward 

to working with you and Secretary Arny in terms of moving that 

forward. I want to thank you for your strong statements here 

today. 

With that, I yield back, Mr. Chairman. 

Mr. ORTIZ. Mr. Loebsack. 

Mr. LOEBSACK. Thank you, Mr. Chairman. 

Thanks to all of you for being here today. I am from Iowa, and 

as I like to say, we don’t have a submarine base. In fact, we don’t 

have any bases to speak of, but we have lots of National Guard 

folks and Reserve. I think the Iowa National Guard has made a 

tremendous contribution to the operations overseas in recent years. 

We have four facilities in Iowa that were included in the 2005 

BRAC, and three of them just happen to be in my particular district. So I guess following the tradition here, I am learning as a 

freshman, that I will go ahead and speak specifically to my district 

or ask questions about my district. 

At the same time, I think as Congressman Marshall said, too, 

what I am going to ask probably is very relevant to lots of other 

districts and facilities in other districts around the country. I don’t 

think I am being too presumptuous to make that statement. 

The Cedar Rapids and Middletown sites include armed forces 

readiness centers and field maintenance shops. The Muscatine site 

is a readiness center. These facilities were built in 1916, 1950 and 

1973 respectively. They are too small to support current operations. 

They contain asbestos. They are prone to flooding. Yet the Iowa 

National Guard does not receive sufficient funding, of course, to improve the sites over 15 years. 

The Iowa National Guard, like National Guard units around the 

country, faces increasing recruiting and retention shortfalls. I 

might say, at a time when they are being called upon to perform 

more of the regular duties of the regular Army for example, rundown, unhealthy facilities weigh heavily on recruitment and retention, and the readiness centers are therefore absolutely vital to the 

health of the Guard. 

The Army approved and funded designs for all three BRAC sites 

in my district to not only modernize infrastructure and maximize 

funding, but will also allow for increased joint operations and training between the Iowa National guard and reserve forces. The good 

news is that the Iowa National Guard did receive design funding 

for these facilities this year, for fiscal year 2008. 

However, I was able to follow up testimony of former Under Secretary Groening back in December of a phone conversation. At that 

time, he said the construction funding was not slated to be provided until fiscal year 2010 construction. So the design is there for 

2008, but construction not until 2010. 

So I am obviously very concerned that cost overruns and delays 

in the BRAC process have led the Army to prioritize funding in 
23 

such a way that the National Guard in Iowa is being left behind, 

with the possible result that the Cedar Rapids, Muscatine, and 

Middletown sites will have to be scaled back, and the effectiveness 

of BRAC 2005 reduced. 

So I just do want to ask Mr. Arny and Mr. Prosch, obviously if 

you can’t provide specifics today—even though I would like to hear 

from you in writing—but I would like to know the status, if you 

will, of the construction funding for these particular sites. The design funding is there for 2008, but we are not talking about construction money until 2010. So do you have any sense of what 

might happen with that? Might we be able to expedite that process 

and provide the construction funding for 2009? 

Secretary ARNY. I think I will defer to Mr. Prosch for the details, 

and we can work with them to get details for you. I suspect from 

looking at it, that they are funded. As you said, they are probably 

in 2010. This cut of $939 million doesn’t help us getting that money 

earlier, rather than later, and may cause it to slip, but I am only 

guessing at this point. So it is urgent for us to get that in. I will 

check. I defer to Mr. Prosch on the details. 

Secretary PROSCH. Sir, the Cedar Rapids, Muscatine and Middletown armed forces rec centers are ready to award. The funds are 

available in 2008. We would like to provide for the record all of our 

projects that are being impacted by the $560 million cut. I would 

like to thank this committee for giving us tools such as MILCON 

exchange and like-type exchanges that allows us to do some innovative things with our armed forces rec centers during the BRAC 

era, where you could take an old, perhaps worn-out armed forces 

rec center in a large urban area where the land is quite valuable, 

and you can use that to build a more modern facility outside of 

town that could be a joint-type facility. So your committee has 

helped us to that and we thank you for that. 

The costs are acted for fiscal year 2010, and no scope has been 

left out. But we need your help to encourage all of Congress to ensure that these 10 armed forces rec centers are not left out due to 

that $560 million cut. We will keep you posted with the details, sir. 

Mr. LOEBSACK. I do appreciate that. Thank you very much. 

Again, I think it is just important that we recognize how important 

the National Guard is in our efforts overseas, and how important 

they continue to be in the coming years. As a congressman from 

Iowa, I think it is really critical that I state that publicly. So thank 

you very much. Thank you. 

Secretary PROSCH. Yes, sir. 

[The information referred to can be found in the Appendix beginning on page 179.] 

Mr. ORTIZ. Mr. Bishop. 

Mr. BISHOP. Thank you, Mr. Chairman. 

For the four gentlemen here, I appreciate your willingness to 

serve the country, as well as the military, and your willingness to 

be here this afternoon when we work so hard today on the floor. 

We are probably tuckered out by it. 

I am happy for you guys to be here. I wish to say, I am not necessarily happy for me to be here because, as you know, I am going 

to continue being parochial. The reason I am here is obviously because not everything is satisfactory. In my state, there are two 
24 

Army—actually, I only have about four questions, two for Mr. 

Prosch and perhaps another two, if I could, to Secretary Anderson. 

Mr. Prosch, first of all, in my state there is the Dugway Proving 

Grounds and the Tooele Army Depot. Dugway Proving Grounds is 

vital to the chemical and biodefense system of this United States. 

It is the only place you really have to be able to do that, and it 

is truly an isolated and remote facility by every definition. 

You are going to take an hour’s drive getting there to the nearest 

community from Dugway. The only positive thing about that is you 

can drive as fast as you can because no one else will really care 

about it. The only limitation is the road that is not all that cool 

anyway. 

Since 9/11, the workload has been increased by 800 percent at 

Dugway, but the infrastructure has simply not. The infrastructure, 

the water system, the biolevel 3 labs—the biolevel 3 labs are still 

being done in temporary trailers, which is not the greatest situation in any of the weather conditions out there. The community 

club is 50 years old. Part of it is condemned. It doesn’t have running water in it. Even though there was design money in 2006 that 

was appropriated for it, it has now been pushed off the MILCON 

FYDP so far to the right. 

The water system is also 50 years old and inadequate. It was on 

the FYDP last year, scheduled for year 2010. Once again, it has 

disappeared from that particular list this year. The biolevel lab is 

a $29 million project that is necessary for existing space, and once 

again that keeps being pushed to the right as well. 

The first time we saw this year’s proposal, there were no 

MILCON anywhere in the FYDP for any of these proposals. I understand one of them may be on in year 2012. I am not quite sure. 

The problem I have here is we have talked about this in the past. 

To be honest, the answers are simply not acceptable. 

These are impossible conditions in these two areas. The Tooele 

Army Depot, which has provided a great deal of the ordnance in 

our conflicts, has not had any MILCON since 1994 in that area, 

and they are still required to try and be competitive in the system 

that we have, without the infrastructure to do it. 

The question I have is that when I look at the situation, and I 

may be inaccurate, it seems like the 800-pound gorilla in the room 

is BRAC—the MILCON requirements for BRAC—which seems to 

be eating the lunch of the other requirements we have for ongoing 

programs and existing facilities. 

Perhaps the only question that I could possibly ask—I could ask 

you when this is going to be rectified, but I don’t think you can give 

me an answer. But perhaps the only question I could ask, is it really the costs for BRAC-related MILCON, as well as—before 2012 is 

kind of an arbitrary figure. If indeed, that could be extended somehow, a couple of years? Could some crumbs from the BRAC-necessary MILCON be extended to some of these other programs that 

are ongoing? Because basically, this is an extremely frustrating situation for these two areas. 

Mr. Prosch. 

Secretary PROSCH. Thank you, sir. 

We understand. We have competing operational demands for 

MILCON. It is not just BRAC, but BRAC is a mandated law that 
25 

we must comply with. We are also growing the Army by 74,000 soldiers. We are bringing 41,000 soldiers back from Germany and 

Korea under the global defense posture and realignment. We are 

balancing the force. We are trying to improve quality of life. 

So the Army’s priority is to create operational depth and strategic flexibility in order to rebalance the force. We have competing 

priorities and we have limited resources. Unfortunately, our nonoperational facilities are competing for these limited resources 

when we prioritize. I understand how you feel that your research, 

development, test and evaluation (RDT&E) installation has been 

disadvantaged. I will promise to work with you and try to articulate your very valid points you have made today, sir. 

Mr. BISHOP. Sir, I don’t want to be overly critical because everyone has talked to you about needs they have in their particular 

areas. But once again, this is 15 and 20 years on stuff that is significant. I recognize the prioritization has to be there. If you can 

find out a way, realizing the military in my estimation is underfunded in every branch and we have been for many years, if you 

can find a way to work through that, I would be more than happy 

to work on those issues, but this is coming up here. 

I have a second specific question just for you. I want to make 

sure I read this so I get it properly. My office has been told by the 

Army legislative liaison that it is Army policy not to release the 

full Army FYDP that comes over to the Hill, on which our 2009 

MILCON budget is based, to member offices, even to member offices that are on the Readiness Subcommittee. They state that it 

is only going to be provided—the detailed information to committee 

staff. I simply do not know if this is correct. If it is, is there a policy 

decision for withholding this information from committee member 

staff? 

Secretary PROSCH. Sir, I would defer to OSD, that has told us to 

comply with that guidance. 

Mr. BISHOP. It is the correct policy, though? It is an official policy? 

Secretary ARNY. Yes. We will get back to you, sir. 

[The information referred to can be found in the Appendix beginning on page 179.] 

Mr. BISHOP. That is fair enough. That is fair enough. 

Secretary Anderson, if I could ask you two quick questions. First, 

if you have any comment on the enhanced use lease policy we are 

trying to accomplish at Hill Air Force Base, and the position on 

how this is progressing. 

The second question I also have is once again a long-time interest, an energy policy of the United States should be one that makes 

us energy independent. The question I have is it in any way possible for the Air Force to be energy independent if indeed we do not 

have some form of coal to gas, coal liquefaction projects that are 

going on. 

Secretary ANDERSON. Okay, yes, sir. First, let me talk quickly 

about the Hill Air Force Base enhanced use lease. From my perspective, sir, that is a real good-news story. We have recently gone 

through the bid process and have accepted a developer called Sunset Ridge Development, and entered negotiations to enter into a 

contract. 
26 

Mr. BISHOP. Can I interrupt? 

Secretary ANDERSON. Yes, sir. 

Mr. BISHOP. Maybe to help this process go on, are you satisfied 

with how it is progressing down there? 

Secretary ANDERSON. Satisfied? Absolutely. Yes, sir. 

Mr. BISHOP. I am, too. 

Secretary ANDERSON. Good. Okay. 

Mr. BISHOP. Let us go to coal-to-gas, if you could. 

Secretary ANDERSON. Okay. From my position, not being an energy policy person, but a businessman, based on current technologies, the world can’t survive without using coal, and we have 

to figure out how to use it in an environmentally friendly way. The 

United States is the number one depository of coal in the world, 

and if we don’t use it as part of our energy independence strategy, 

we are never going to get there, but that is Bill Anderson talking. 

Mr. BISHOP. I am seeing that. I am sorry. I will just summarize 

this and I am done. 

Mr. ORTIZ. Please do because we have other members that—— 

Mr. BISHOP. Yes, I just saw the red light and I apologize. 

It becomes essential. Without that, we are not going to be independent for military needs. 

Secretary ANDERSON. In my opinion, yes, sir. 

Mr. BISHOP. Thank you. 

And I apologize. Thank you, sir. 

Mr. ORTIZ. I know you are very valuable to our team, so don’t 

leave now. 

Mr. BISHOP. If I was that valuable, I wouldn’t be sitting this far 

away from you. [Laughter.] 

Thank you, sir. 

Mr. ORTIZ. Ms. Shea-Porter. 

Ms. SHEA-PORTER. Thank you. 

Today has been a very good day. I have had the privilege of being 

at the national defense authorization budget for the Army hearing 

with the Secretary of the Army and General Casey. I also had the 

honor of speaking on the floor to honor a fallen soldier from my district. 

And then I went to the Budget Committee hearing to speak 

about military families and more money for TRICARE. And now I 

have the honor to be here. So I just want to say that always we 

think about the men and women who serve this country and we 

thank them and we are working for them. 

Now, I am going to get a little provincial myself, but this is actually pretty important because I want to talk about the Portsmouth 

Naval Shipyard. The Portsmouth Naval Shipyard continues to 

show that it is the best yard in the fleet. They regularly exceed the 

Navy’s expectations by bringing projects in under cost and ahead 

of schedule. They are the fastest and the most efficient. They are 

so good at what they do that detachments from Portsmouth have 

been sent to San Diego to get the operations on track. 

Despite their proven record of quality and efficiency, they have 

received virtually no support from the Navy. Portsmouth has not 

received a single MILCON project from the Navy since 1971. For 

the last 37 years, they have relied on congressional earmarks for 

51 projects and BRAC and the global war on terror (GWOT) money 
27 

for others. In comparison to the other public yards, Portsmouth has 

received only eight percent of the total MILCON for public shipyards since 1992. 

In 30 months, the first Virginia-class submarine will arrive at 

Portsmouth for maintenance, and Portsmouth needs the waterfront 

maintenance facilities promised by the Navy. Pearl has gotten their 

facilities, but Pearl doesn’t have the first ship. 

So Mr. Arny, I wanted to ask you, please, why does the Navy 

seem to be leaving Portsmouth off the list? And why isn’t the Navy 

funding the facilities at Portsmouth that they need to take care of 

our newest, best Navy platforms? 

Secretary ARNY. I will defer the details to my Navy colleague, 

Mr. Penn. I will let him, because I am not sure what the MILCON 

is specifically for Portsmouth. Again, we are trying to maintain all 

our bases at a high enough level, and I know that Portsmouth feels 

like it has been left out. I know the Navy has a plan to fix that. 

Ms. SHEA-PORTER. Okay. You know, it is not just perception. I 

have a chart here that is absolute reality. I would be very happy 

to show it to you. It is color-coded so you can catch it very quickly. 

We have been left out, so I appreciate your attention to it. 

Secretary PENN. I will have to take that question for the record. 

I will have to see your chart and we will address it appropriately. 

Ms. SHEA-PORTER. Thank you. I appreciate your attention and I 

will look forward to your reply. 

I yield back. Thank you. 

[The chart referred to can be found in the Appendix on page 

171.] 

Mr. ORTIZ. The kind—response? If not, my good friend, the kind 

gentleman from Mississippi decided to pass and allow Ms. Bordallo 

to ask a question. 

Ms. BORDALLO. I want to thank my colleague, Mr. Taylor, for 

such a kind gesture. 

Mr. Chairman, thank you for calling this hearing and for your 

continued—— 

Mr. TAYLOR. Ms. Bordallo, could I have a note for my wife? 

[Laughter.] 

Ms. BORDALLO. Yes, yes, I will. He owes me one so I think we 

are even. 

I want to thank you, Mr. Chairman, for your leadership on this 

subcommittee and for calling this meeting today. 

Secretary Arny, thank you for coming here today and congratulations on your promotion. I knew you in your other life. 

And Secretary Penn, who I see almost daily. 

And Secretary Anderson and Secretary Prosch, thank you for testifying today. 

Secretary Penn, I appreciate your working closely with our office 

to identify and work on solutions for some of the difficult issues 

that we face in Guam. We have made some progress this year, and 

I look forward to working with you during this critical year of the 

buildup. 

As you know, I have called for the drafting of a memorandum of 

understanding (MOU) between the government of Guam and the 

appropriate Federal agencies. Guam will need substantial assistance in bringing its infrastructure, schools, hospitals and utilities 
28 

up to par in order to handle the influx of people as a result of the 

buildup. Guam will need a commitment of funding, especially as 

new administrations take over here in Washington and even back 

in Guam. 

Moreover, a commitment of funding in writing will signal to private industry that the Federal Government is serious about the 

buildup. Can you share with this committee your feelings on an 

MOU? And also can you give us an indication where you are in the 

process of working MOUs between the Federal Government and 

the government of Guam? 

Secretary PENN. As you know, ma’am, we have established an 

interagency working group with the Department of Interior and 

with the governor of Guam to identify the requirements and to 

marshal resources across the Federal Government to address the 

needs. OMB is also participating. In fact, we had a meeting—I 

think it was Tuesday—with five other government agencies to address the process and what we need to do. In fact, GovGuam gave 

us a sheet where they requested $3 billion to get their programs 

going. 

Just before I came here this afternoon, I was with Secretary 

Kempthorne at the DC Hospital Association to see if we can’t get 

some partnership going with the hospital on Guam. We have the 

military hospital, but the civilian hospital is what we need. In fact, 

we wanted to do the entire Marshall Islands and the government 

of the Marianas. The Secretary of Interior has the administrative 

responsibility for coordinating the Federal policies out there for us. 

The policy is being elevated. I will say it like that. 

As far as the MOU, I can’t specifically say when that will be 

signed, what it will contain. I heard you Tuesday when you talked 

about it. We listened to you. We will make something happen with 

that. 

Ms. BORDALLO. Good. I think it will just give the people of Guam, 

the leaders of Guam some assurance that what we are really doing 

here is really going to happen. Some of us are a little bit queasy. 

We see the 2009 budget request and a lot of it does not include 

anything in the way of assistance to Guam. 

Secretary PENN. We cannot do construction. We can’t turn the 

first shovel of dirt until the National Environmental Policy Act 

(NEPA), the EIS process is completed. 

Ms. BORDALLO. That is correct. 

Secretary PENN. And we will not be able to request this funding 

until fiscal year 2010. I was in Japan maybe two weeks ago, three 

weeks ago, talking with their Minister of Defense and others about 

the sincerity of their budget issues. As you know, several people 

there have turned over. They are still moving forward. Okay? We 

are moving forward on this and 2014 is still our date. 

Ms. BORDALLO. Good. Thank you, Mr. Secretary. 

I have another question for you. The special purpose entities, the 

SPEs, will be funding some of the most critical components of the 

buildup, including the military housing and the utilities. Some of 

us here in Congress are concerned that the SPE funding portion is 

too limited in scope. 

Moreover, we want to ensure that utility improvements and military housing construction are done to U.S. standards. So can you 
29 

first update the committee on the status of negotiations between 

the U.S. Government and the government of Japan, which you just 

spoke to, on the SPE funding portion of the Guam military buildup? 

And second, can you address some of the concerns that have been 

raised about implementation of the SPEs, notably the restriction on 

how SPE funding will be utilized? 

Secretary PENN. We have a number of details we are working 

with Japan. Some of the examples include the applicability of the 

Federal Acquisition Regulation (FAR), the FARs, the interpretation 

with utility systems on Guam, and privatization of funds. The government of Japan is not familiar with the way we do public-private 

venture (PPV), so this is a totally new experience for them. We are 

meeting with the government of Japan and representatives monthly. In fact, they will be Guam next week when we are there for the 

industry forum. I am sure we will meet at that time as well. We 

are just working through these details. 

We have Mr. Scott Forrest, who does the planning, programming, 

and budgeting (PPB) for us in the Navigation Package (NAVPAC) 

going to the meetings. He is traveling to Guam and trying to explain the process as to how it works so they will be better prepared 

to make the decision. They will be funding several of the SPEs for 

us. 

Ms. BORDALLO. Good. 

And finally, Secretary Penn, I am somewhat concerned about the 

level of military construction funding for fiscal year 2009, which I 

just mentioned, and you said until we get our environmental study, 

and of course our master plan should be ready sometime next 

month. 

Secretary PENN. Yes, ma’am. 

Ms. BORDALLO. But the President’s budget has only programmed $169 million of construction work on Guam, which is about a 26 

percent decrease in construction spending since last year. In our 

previous conversations, we both have recognized that Guam has 

construction capacity constraints and that military construction 

funding would need to be ramped up in the years before the realignment construction begins in order to enhance Guam’s construction capacity. So that is why I was surprised at this year’s decrease in funding. 

Can you comment on why there was an overall decrease in Navy 

military construction? And also can you comment on why there 

were not any projects that are specifically directed at preparing 

Guam for realignment of Marines from Okinawa? Particularly the 

first part of that question, because not anything to do with the Marines, but just beefing up our construction on Guam as is. 

Secretary PENN. Our 2009 MILCON is $141 million, compared to 

the $285 million we had in 2008. You are correct there. All of the 

money is used to upgrade our existing facilities. As you know, we 

went for several years without putting any MILCON, really any 

money into Guam. We thought it might be BRAC’d eventually, so 

we didn’t invest the money. 

Now that it is not, we are doing several things. In fact, the 

things we are doing, we are putting in there now, we decided to 

do before we knew the Marines were coming, such as the hospital 
30 

and other things. We are investing substantial amounts in Guam 

over the next few years. 

Ms. BORDALLO. All right. I am just concerned, because I just feel, 

you know, we should really be stepping up this activity, and to see 

it being decreased just prior to this buildup concerns me. So I just 

wondered what the rationale was. Let us face it, it is not just the 

Marines, but the Air Force will be enhanced, the Navy will be enhanced. So there is a need for funding in these areas. I have just 

been concerned. 

Secretary Anderson, yesterday I was at the Air Force’s posture 

hearing and asked Secretary Wynne about the 32 percent overall 

decrease in Air Force military construction funding. I was disappointed in Secretary Wynne’s answer to my question. He simply 

does not make any sense to me, or it simply does not make any 

sense to me that we are procuring new airframes without having 

places to house this new equipment. 

I believe the Air Force is taking a very dangerous approach to 

the future quality of their installations. I am concerned about the 

quality of life, which has been a hallmark for the Air Force and the 

readiness of our airmen will suffer. 

So my question is, I am particularly concerned about construction projects at Anderson. I understand that there is about a $700 

million unfunded requirement for construction at Anderson over 

the next several years. I further understand that the environmental impact statements for these projects have been completed 

and they simply need funding. The Navy and Marines anticipate 

beginning the bulk of their construction activities in fiscal year 

2010 and 2011, the same time that the Air Force anticipates its 

construction to occur. 

I fear that the Navy and the Marine Corps projects will take 

precedence over the Air Force projects. So I simply do not understand why funding was not programmed in earlier years to meet 

the demands of realigning forces from Korea to Anderson Air Force 

Base, who by chance arrive earlier on Guam than the Marines. 

There are also examples of F–22s in Alaska and Hawaii that will 

without supporting infrastructure for several years. At a macro 

level, you are cutting personnel and facilities, but increasing the 

number of planes. I always believed that you need people and facilities before you get the planes. So can you please explain this? 

Secretary ANDERSON. Yes, ma’am. Let me see if I can try. There 

are a lot of good questions in your comments. First, it is not a matter of more planes. It is a matter of replacing older—very old, 

sometimes—aircraft, with newer technology that is easier to maintain, less expensive to the taxpayer, and the whole nine yards. 

Let me try to touch directly on Guam and Anderson and Elmendorf or Alaska, if I could. In Guam, there are plans to do some significant intelligence, surveillance, and reconnaissance (ISR) and 

strike MILCON over the next couple of years. You are correct. It 

has slid to the right, farther out. That was based on some hard 

choices that we had to make based on limited funding. We had to 

look at the whole realm of all Air Force projects, not just Guam, 

but the whole Air Force worldwide, and prioritize based on the 

amount of money available. 
31 

You are correct. The MILCON program for that is programmed 

in wedges in the fiscal year 2009 to 2013 FYDP. In fiscal years 

2010, 2011 and 2012, you are again correct that that does run up 

against what the Navy is doing. All I can tell you is the relationship between the Air Force and the Navy on Guam has been a terrific one, with the commanders on the ground working together to 

work through these issues, with BJ’s team and my team working 

together. It will be difficult. I am not going to try to candy-coat it, 

but I am confident that the Navy and the Air Force can work together and get this right. 

Regarding the F–22s in Alaska, we are delaying the construction 

of new facilities that can house these aircraft. They are specifically 

built for the F–22. That doesn’t mean that they will be sitting out 

in the snow. F–15s are coming out of Elmendorf. There are hangars 

that are not perfect for an F–22, but they keep the F–22 out of the 

snow and the weather. We are going to have to do work-arounds. 

It is going to be harder for the people. But again, we have to 

prioritize our construction projects and we will get the new hangars 

built. We can keep the F–22s safe and secure and do the mission 

and get the pilots up and rated to do what they have to do for national security in the older facilities until the money comes around. 

Ms. BORDALLO. So you do have temporary housing for these? 

Secretary ANDERSON. Yes, ma’am. Absolutely. 

Ms. BORDALLO. All right. 

I would also like one last question, Mr. Chairman, to address 

what level of cooperation in integration you have provided to the 

Joint Guam Program Office as you develop this year’s budget. I feel 

if there was more cooperation, maybe we would not be having this 

discussion today. Do you cooperate with the Joint Program Office? 

Secretary ANDERSON. As a matter of fact, we have Air Force assets in the Joint Program Office. 

Secretary PENN. And we have what we call a Guam Executive 

Council—— 

Ms. BORDALLO. Yes, I understand. 

Secretary PENN [continuing]. Which is joint. In fact, I think some 

people from your staff sit there as well. But we have frequent 

meetings, a lot of correspondence. 

And we have two of your people—— 

Secretary ANDERSON. I believe so, yes. 

Secretary PENN [continuing]. In the Guam Executive Office. 

Ms. BORDALLO. Yes. 

I want to thank you all. 

Mr. Chairman, it is just that this buildup is such a magnificent 

size and we are doing so much work right now, not just within the 

military, but also the other Federal Governments, to build up 

Guam and be ready for the Marines when they arrived. 

Also, since I do have the Air Force here, I do want to extend my 

condolences to the Air Force on the crash of the B–2 plane out 

there. That was just a tremendous shock to all of us on Guam. 

Thank goodness that the pilots are well. I understand one was injured, but he is in Tripler Hospital right now recovering from a 

back injury. So our deepest sympathies to the Air Force, but thank 

goodness no life was lost. 

Secretary ANDERSON. Thank you for your concern. 
32 

Ms. BORDALLO. Thank you. 

Thank you, Mr. Chairman. 

Mr. ORTIZ. Thank you. 

Mr. Taylor. 

Mr. TAYLOR. Thank you, Mr. Chairman. 

Thank you, gentlemen, for staying around this long. 

A couple of weeks ago, I was fortunate enough to have dinner 

with Admiral Ruffed, the Chief Naval Officer (CNO), and several 

of the base commanders from South Mississippi—and I am sorry 

for the mental lapse. Interestingly enough, I have probably been 

tracking insurance industry issues more than anybody, given what 

happened in my congressional district in the wake of Katrina. 

But one of the things I had failed to consider was that every one 

of those base commanders made a point to the CNO that their 

folks—and Secretary Penn, you very appropriately point out that 

three out of four sailors and Marines live off-station. Their point 

is that every one of those folks who is living on the economy was 

having trouble making ends meet, due primarily to the dramatic 

increase in the cost of wind insurance in coastal America. 

Keeping in mind that half of all Americans live in coastal America, that a very high percentage of all of our military installations 

are in coastal America, whether it is Eglin Air Force Base, Keesler 

Air Force Base—fill in the blanks. I would imagine more than half 

of our installations are in coastal America. 

Your concern about the basic allowance for housing—are you factoring that in? Because the last thing I want to hear is that people 

are getting out of the military because they can’t keep up with the 

basic allowance for housing because our folks aren’t taking a look 

at the dramatic increases. I will give you a for-instance: in South 

Mississippi today, a single unit to be rented—$300 a month per 

unit per month just for wind insurance. That is not homeowner’s, 

that is not flood—that is just for wind insurance. 

I have tracked this around the country and the insurance industry has pulled out of every coastal state one by one, leaving that 

burden to the states. The states have had to dramatically increase 

rates. I am just curious if you all have taken that into account 

when you determine basic allowance for housing, because quite 

frankly, I hadn’t thought of it until those base commanders brought 

it to the CNO’s attention. 

The second is a request. I realize that the Navy Commander and 

the Air Force Colonel are the only two people in this room who are 

guaranteed a job next January. The rest of us are iffy. [Laughter.] 

But in the time that all of us are here, I can’t emphasize enough, 

based on what I saw after Hurricane Katrina, that when people 

come to you with proposals that say let us privatize our water 

wells, let us use the city sewer system, please don’t. In South Mississippi, the only people who could take a shower south of I–10, the 

only people who had flush toilets south of I–10 for several weeks 

after that hurricane, were the people on our military installations. 

At the Seabee base, the only hot meals being served in South 

Mississippi south of I–10 for probably 3 or 4 days after that storm, 

were served at the Seabee base because they had their own water 

wells, because they had their own water treatment plant, and the 

same thing with Keesler Air Force Base, and the same thing with 
33 

the folks out at the Stennis Space Center. That really is something. 

You don’t miss your water until the well runs dry. 

The city well was not operating. The city sewage treatment 

plants were not operating. They were overwhelmed. They had a 

million things to do. And I know it was one of the initiatives of 

former Secretary Rumsfeld to privatize that. Please think this 

through before you do that. 

If there is an attack on the homeland, it is going to look a lot 

like Katrina. There is going to be no electricity. There is going to 

be no just-in-time at your local gas station, at your local food mart. 

And we are going to count on our bases as the place where the cavalry rides to the rescue from. One of the many differences between 

things going well in Mississippi and things going poorly in New Orleans is that we had wall-to-wall military installations to call on to 

ride to the rescue, and they didn’t. 

And again, just an observation, the last thing is for Secretary 

Anderson. I read your statement, and perhaps I missed it, but I am 

aware that you are fairly close to making a decision on the cybercommand for the Air Force. 

Secretary ANDERSON. Yes, sir. 

Mr. TAYLOR. I was curious if that money had been budgeted and 

how close you are to making that decision. 

Secretary ANDERSON. I can give it to you relatively quickly, if I 

could. 

Mr. TAYLOR. Okay. 

Secretary ANDERSON. Because this is such an important decision, 

standing up a new major command, and also standing up a capability in a new domain, we are going to take this very, very carefully. We have a provisional command set up. Barksdale is the temporary location for that command. We anticipate planting a flag for 

a permanent command probably in October, but that will not be 

the time at which we will be in a position to determine where the 

final location for the command is going to be. 

We are going to take this step by step, making sure that we give 

the communities adequate time to talk to us, give us their impression of the value that they would provide to this command. I am 

going to send a letter out early next month telling all the governors 

that there will be a call for information. That call for information 

will come somewhere in early May. We will expect to have the information back in the July timeframe, and then spend the summer 

and the fall sending teams out to the various bases. 

So far, we have gotten indications of interest from 16 different 

states, going out and really understanding what the issues are. We 

probably won’t narrow down to the final four or five, whatever it 

happens to be, short list candidates probably until the end of the 

year if we want to do this right. 

Mr. TAYLOR. Do you expect a final decision on your watch? 

Secretary ANDERSON. The final decision will probably not come 

on my watch. No, sir. The wickering down to the final short list 

will be, in my guess, probably February or March of 2009, which 

is after I will be gone, and the final decision will occur. 

Mr. TAYLOR. If I can backtrack to the statement that again, my 

gut tells me that the vast majority of our military installations are 

within 50 miles of a coastline. And given that this is not just a Mis-
34 

sissippi phenomenon with the incredible increases in insurance, because so many people live off-station, to what extent have you all 

factored that into your determination of Basic Allowance for Housing (BAH)? 

Secretary ARNY. Let me take a shot at that. We do annual updates in the Basic Allowance for Housing. We go out and seek 

these kinds of inputs. 

Mr. TAYLOR. Do you ask that question specifically? 

Secretary ARNY. Pardon? 

Mr. TAYLOR. Do you ask, because this is a fairly new phenomenon in the past three years of having to buy a separate wind 

policy from your homeowner’s policy. 

Secretary ARNY. I understand that. The base commanders make 

their inputs into our system for all four of the services, including 

the Marine Corps. Now, it does take a while to react, but if it has 

been a couple of years phenomenon, that should be being cranked 

in. I will go ask that specifically. It is more of a personnel issue. 

We don’t do the BAH ourselves. The personnel folks do, but I will 

go back and ask that specific question as to how that is being handled, because there also may be some things we can do to make 

sure that rate comes down to something more reasonable. 

Mr. TAYLOR. Secretary Arny, the thing I would ask you to also 

consider is that when you are crunching the numbers to decide 

whether or not we are going to do base housing as a Nation, or go 

to a public-private partnership, our Nation is self-insured. If you go 

to a public-private venture, that is most certainly going to be a factor in that business person’s equation. 

Again, this is a fairly recent phenomenon that I hope we are factoring into these equations because I don’t see it going away anytime soon. We have a legislative effort to address that that is 

stalled in the United States Senate. But until that happens, this 

is something that men and women who serve our country are going 

to have to deal with, and we as a Nation in fairness to them have 

to deal with. 

Secretary ARNY. We try to account for all those factors to make 

sure it is zero out-of-pocket. 

Mr. TAYLOR. Thank you, sir. 

Thank you, Mr. Chairman. 

[The information referred to can be found in the Appendix beginning on page 177.] 

Mr. ORTIZ. I think we are going to have to do what we did. Secretary Penn, do you remember when we went to the private-public 

housing? In the beginning, it was so expensive for some of those 

service people. What we did, we supplemented some of the rent 

payments. 

But he has brought up a very, very good point, Congressman 

Taylor. If there is any way that we can look at it to see how we 

can help, because he is right. You know, I represent a naval city, 

and we have some of the same problems you are talking about with 

most of us. I hope that we can look into it and see if there is any 

way that we can do something similar to what we did when we 

first initiated the public-private housing venture. 

Any questions? I will tell you what. This was a good hearing 

today. We certainly appreciate your expertise in the areas that we 
35 

are talking about, and your dedication and your service to our 

country. We look forward to working with you. We serve the same 

country. We are in the same boat, and we are going to have to continue to work together. 

I would like to have unanimous consent to allow members to submit questions for the record. Hearing no objection, so moved. 

This hearing is adjourned. Thank you so much. 

[Whereupon, at 3:20 p.m., the subcommittee was adjourned.] 

A P P E N D I X 

FEBRUARY 28, 2008 

PREPARED STATEMENTS SUBMITTED FOR THE RECORD 

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DOCUMENTS SUBMITTED FOR THE RECORD 

FEBRUARY 28, 2008 

(171) 

WITNESS RESPONSES TO QUESTIONS ASKED 

DURING THE HEARING 

FEBRUARY 28, 2008 

(175) 

RESPONSE TO QUESTIONS SUBMITTED BY MR. ORTIZ 

Secretary ARNY. The Department uses the Facilities Sustainment Model, which 

was developed several years ago as a programmatic model. It takes a holistic view 

of the Services’ total inventory and calculates a sustainment requirement for programming purposes so as to prevent deterioration, maintain safety, and preserve 

performance over the life of a facility. It was not intended to be used at the installation level. Percentages at the installation level, if calculated, may present an inaccurate view of the installation’s requirement, and consequently, a possible misrepresentation of sustainment funding at an installation in any given year. Hence, we 

do not evaluate percentages at the installation level, including at Naval Air Station 

Kingsville. 

The Department of Defense (DOD) has used the current facilities recapitalization 

metric since 2002 to assess the adequacy of the investment in modernizing and restoring our inventory of facilities. The metric is based upon the premise that the 

investment should be sufficient to replace the facilities inventory at a rate equal to 

its expected service life, estimated at 67 years using a ‘‘weighted average’’ calculation of plant replacement value (PRV) about ten years ago. The metric divides the 

PRV of the inventory by the annual investment in recapitalization, yielding a recapitalization rate expressed in years. 

While the recapitalization metric has served the DOD well, it has several limitations that the DOD now seeks to reduce or eliminate for the FY 2010 budget submission. These limitations include the following: 

1. The investment target, expressed as a funding rate necessary to replace 

the facilities inventory every 67 years, was calculated using PRV and 

inventory from the late 1990s that is no longer current. 

2. The investment target is an overall DOD average and does not represent the facilities inventory for each DOD Component that can vary 

significantly from one Component to the next. 

3. The investment target is based upon preliminary DOD rough estimates 

of expected service life values for various facility types that have since 

been refined by various published industry sources. 

4. The recapitalization metric does not differentiate between costs to renovate facilities versus costs to replace facilities, both of which are ‘‘recapitalization.’’ This difference can equate to approximately 40% of a facility’s calculated PRV. 

The Department is transforming the recapitalization metric to address each of 

these limitations in support of the FY 2010 budget submission. There are three aspects to this transformation: 

1. The format of the new metric will change from a rate expressed in 

‘‘number of years’’ to a rate expressed as a percent of the investment 

target that is funded. This will parallel the facilities sustainment metric 

(and others) and provide a common funding expression between Components, even those with significant differences in facilities inventory and 

resultant differences in ‘‘average’’ inventory service lives. 

2. The investment target will change from the ‘‘67-year average’’ target to 

specific target values for each Component based upon current Component-specific inventory and published parameters for facility service 

lives and depreciation. The DOD Facilities Modernization Model performs this function. 

3. Finally, the method of identifying and accounting for recapitalization 

investments is being refined to differentiate between types of recapitalization methods (specifically, between renovation and replacement). 

Since its inception, the facilities recapitalization metric has served as an important tool to evaluate the adequacy of the DOD’s aggregate investment to counter facility obsolescence. The improvements planned for the FY 2010 budget and Future 
176 

Year Defense Plan are expected to significantly improve its accuracy and usefulness 

for this purpose. 

Regarding use of the facilities recapitalization metric at the installation level, if 

calculated, it may present an inaccurate view of the installation’s requirement, and 

consequently, a possible misrepresentation of recapitalization funding at an installation in any given year. Hence, we do not evaluate the facilities recapitalization metric at the installation level, including at Naval Air Station Kingsville and Naval 

Station Corpus Christi. [See page 20.] 

RESPONSES TO QUESTIONS SUBMITTED BY MR. FORBES 

Secretary ARNY. The Department is still tracking to complete the Base Realignment and Closure (BRAC) 2005 process by September 15, 2011. If the $939 million 

reduction to the BRAC account is not restored, or even if it is restored late in the 

process, we will have to work ‘‘very, very, hard,’’ as Secretary Gates recently testified, to meet the statutory deadline. This could involve eliminating non-mission construction (gyms, child development centers, medical clinics); shifting Operation and 

Maintenance (O&M) funding to the last implementation years (furnishings and personnel moves); and/or introducing the potential for delaying some recommendations 

(e.g., reserve center consolidations). [See page 19.] 

Secretary PENN. The Navy does not currently have security concerns about Balfour Beatty plc (a London-based public company traded on the London Stock Exchange) acquiring GMH’s Military Housing Division (inclusive of GMH’s interest in 

the Northeast and Southeast projects). 

Balfour Beatty itself is already the design/builder for the Northeast and Southeast 

projects and has recently been awarded, in a joint venture with Clark Construction, 

a $641 million contract to design and build additions and renovations at the new 

Walter Reed National Military Medical Center in Bethesda, Maryland. [See page 

19.] 

Secretary ANDERSON. The $939 million Omnibus reduction to the Department of 

Defense BRAC 2005 account must be restored. If left unfunded, the reduction will 

result in the Air Force receiving $235 million less than required in Fiscal Year 2008. 

The Air Force will experience delays and disruptions in construction and the movement of our people and assets. Delays will impact our ability to meet mandated 

completion deadlines. 

To implement BRAC 2005 and implement the Commission’s recommendations, the 

Air Force uses a continuous process to identify, analyze, refine, coordinate, and validate requirements. Although the Air Force has not cut any projects due to this reduction, it has deferred BRAC MILCON projects, O&M requirements, and planning 

and design. Those deferments are based on today’s planned award dates. The Air 

Force reserves the right to adjust its strategy and the deferral list in order to maintain the needed flexibility to execute its program. 

Our initial analysis of the reduction indicates the Air Force will be required to 

accept risk in the following areas: 

- Military Construction (MILCON): Will defer 21 projects, to include one 

housing project, valued at $126.4M (15% of total BRAC MILCON). All 

deferred projects have estimated award date after 1 June 08 

- Planning and design (P&D): Will defer $5.2M in requirements (28% of 

total P&D) 

- Operations and Maintenance (O&M): Will defer $97.8M in requirements 

(36% of total O&M) 

If the reduction is restored sometime during this fiscal year, we will figure out 

a way to get back on track. If it is permanently lost, we will be hard broke; delays 

in accomplishing the FY08 requirements will have ripple effects impacting mission 

readiness and our ability to meet the mandated BRAC 2005 completion deadline of 

September 2011. [See page 34.] 

Secretary PROSCH. The Army’s apportionment ($560.2M) of the cut in FY08 BRAC 

funding places the Army at very high risk of meeting every aspect of the BRAC 

Law. Based on the cut, the following FY08 projects cannot be completed: 

- 10 Armed Forces Reserve Centers 

- 9 Training and Readiness Projects 

- 12 Quality of Life Projects (Family Support, Medical, etc.) 

Delay in funding drives up costs due to reduced competition from market saturation, compressed construction time to meet required facility timelines, construction 
177 

cost inflation (which can also be impacted by labor and material shortages due to 

market saturation) and decreased planning flexibility. 

Military construction constitutes a crucial portion of our plan to sustain, reset, 

prepare, and transform the Army, all of which supports the global war on terror, 

Army Modular Force Transformation, Global Defense Posture Realignment, and 

Grow the Army. If the Army must reprogram $560.2M for Military Construction to 

BRAC, it would delay by a year the facilities for the equivalent of one Brigade Combat Team causing another $560.2M worth of projects to be delayed. 

Regarding the 2005 BRAC round, If funding is restored in FY08 the Army will 

be successfully in complying with BRAC Law. If funding is not restored until FY09, 

there is a very high risk the Army will not be able to be compliant. If funding is 

restored in FY10, FY11 or not restored, BRAC compliance is impossible. [See page 

19.] 

RESPONSE TO QUESTIONS SUBMITTED BY MR. TAYLOR 

Secretary ARNY. All military housing allowances are based on rental costs, not 

ownership costs. Basic Allowance for Housing (BAH) inside the U.S. has three components: rent, utilities and insurance. The insurance covers normal renters-insurance for damage and replacement of the contents of a dwelling; it does not cover 

the dwelling itself, which is a landlord’s responsibility. Normally, landlords include 

their cost of insurance on the dwelling in the quoted rent, so higher insurance costs 

are assumed to be included in the BAH of the dwelling. Note, however, that this 

cost of insurance is not separately identifiable in the calculation of BAH. [See page 

34.] 

RESPONSE TO QUESTIONS SUBMITTED BY MR. MARSHALL 

Secretary ANDERSON. At the request of Senators Craig and Domenici, the Air 

Force is considering the merits of nuclear power production in order to mitigate the 

impact of decreased availability and rising costs of any one energy source, and because production of nuclear power produces no emissions of greenhouse gasses. 

Right now, we are in the early stages of gathering data to determine exactly what 

is feasible given the mission requirements of the Air Force. In January 2008, the 

Air Force issued a request for information (RFI) to gauge industry’s interest in the 

concept, and to solicit their ideas on potential technologies, financing options, and 

other aspects of a potential project. The Air Force has received ten responses to the 

now closed-RFI. The Air Force’s intent is to follow the RFI with a request for expression of interest and qualifications, and plans to evaluate them by July 2008. 

Pending the results of that evaluation, the Air Force will make a decision about further pursuing nuclear as an option, by October 2008. The Air Force will provide a 

written update to the committee after the July and October milestones. 

The Air Force has asked private industry, via the RFI, to suggest potential technologies and financing options for a potential nuclear power plant. We expect those 

options may include some advanced technologies that industry feels are too financially risky to pursue without a controlled, secure environment such as the Air 

Force can offer by hosting a nuclear project. Any nuclear plant hosted by the Air 

Force will need to be licensed by the Nuclear Regulatory Commission. The Air Force 

will work closely with the NRC to ensure its future industry partners comply with 

all applicable environmental regulations, including NEPA reviews. Ultimately, potential sites will be fully vetted with Congress, industry, and the local communities 

as part of the scoping and planning process. 

The Air Force is considering nuclear energy as part of our overall strategy to reduce demand, increase supply and change our culture to make energy a consideration in all we do. The Air Force is committed to increasing our renewable energy 

portfolio and the availability of energy through the use of public-private partnerships. In fact, at Nellis Air Force Base, Nevada, a public-private partnership built 

and now operates the largest solar photovoltaic array in the Americas and provides 

an annual savings of almost $1 million in reduced energy costs to the base. 

The arrangement envisioned is for the Air Force to provide a site to host an appropriately-sized plant in exchange for electric power generated by the plant, along 

with perhaps process heat and other considerations offered by industry, using its 

Enhanced Use Lease (EUL), or similar authorities. Under a EUL, the Air Force can 

benefit by leasing underutilized land, in exchange for tangible benefits offered by 

the developer, owner, and operator of a potential nuclear plant. These benefits could 

include, lease payments, facility construction or other considerations. The Air Force 

is looking to industry to propose arrangements that maximize the benefit to the Air 
178 

Force for any potential nuclear project. We plan only to support the potential owner, 

operator and licensee of a plant at an Air Force installation; the Air Force will not 

own, operate, or license a nuclear plant. [See page 18.] 

RESPONSE TO QUESTIONS SUBMITTED BY MR. HAYES 

Secretary ARNY. In late June 2008, the Department of Defense (DOD) and the Department of Education (ED) will sign a Memorandum of Understanding (MOU) between the two departments to establish a framework for collaboration to assist communities and local educational agencies (LEAs) as they prepare for projected increases in military dependent students at military installations due to Base Realignment and Closure (BRAC), Global Defense Posture Realignment (GDPR), and Grow 

the Force. Some of the MOU’s objectives are to promote and enhance policies that 

will improve military children’s education and overall well-being; explore legislative 

options to ease transition issues for military children; forge effective partnerships 

with schools and districts; coordinate the DOD and ED Impact Aid programs; and 

develop data protocol for military, DOD civilian and contractor student data as they 

relate to impacted installations, communities, and LEAs. 

The ED reauthorization proposal for the Impact Aid Program, Title VIII of the 

Elementary and Secondary Education Act, contains language to allow Impact Aid 

payments to be based on current fiscal year student counts for school districts that 

experience an increase from the previous year to the current year of at least 10 percent or 100 in students enrolled as a result of Defense program changes (e.g. BRAC, 

global rebasing, other). This change would allow districts to receive additional funding when new students enroll, rather than waiting for the next fiscal year. Also, the 

DOD Office of Economic Adjustment, in coordination with the ED Offices of Elementary and Secondary Education and Management, the U.S Department of Army, and 

DOD Military Community and Family Policy, has conducted site visits to a representative sample of locations (Fort Benning, Fort Bliss, Fort Drum, and Fort 

Riley) to provide program stakeholders (Federal, state and local) with on-the-ground 

knowledge of issues surrounding mission growth, improve communications among 

all partners, identify gaps/lags in capacities, and to more extensively document specific requests for Federal action to assist communities and states responding to student migration. Draft reports on these visits were distributed to LEAs, community 

and state representatives, and installation attendees as well as Federal senior leaders for review and comment. Upon finalization, the information will be shared with 

the Economic Adjustment Committee and made publicly available upon request. 

Visits are now underway to Fort Bragg and Fort Carson to continue on-the-ground 

documentation as well as share best practices from previous site visits. [See page 

14.] 

RESPONSE TO QUESTIONS SUBMITTED BY 

MS. SHEA-PORTER 

Secretary PENN. The Presidential Budget for 2009 contains $67M in future 

MILCON programming to improve the condition and operational efficiency of Portsmouth Naval Shipyard (PNSY). 

The PBO9 FYDP includes: 

2011 Structural Shops Consolidation $23.8M 

2012 DD#3 Waterfront Support Facility $16.8M 

2013 Gate 2 Security Improvements $4.1M 

2013 Consolidate Global Sub Complex Facility $12.2M 

2013 CBQ Building 373 Addition Phase 1 $9.7M 

In addition, PNSY has had six Special Projects worth $19M in the past two years. 

With an eye to the future, the shipyard now has a comprehensive re-investment 

plan that includes approximately $160M in out-year MILCON. 

In the meantime, Portsmouth Naval Shipyard is fully mission capable of supporting the Virginia Class submarines. The Navy will continue to target investments throughout future programming processes. [See page 27.] 
179 

RESPONSE TO QUESTIONS SUBMITTED BY MR. BISHOP 

Secretary ARNY. The Department does not have written policy regarding release 

of project level detail contained in the Active Components Military Construction Future Years Defense Program (FYDP) to Congress. Our practice has been to release 

information to professional staff members of committees when requested. [See page 

25.] 

RESPONSES TO QUESTIONS SUBMITTED BY MR. LOEBSACK 

Secretary ARNY. Regarding construction funding, projects are competing with 

other requirements within Base Realignment and Closure (BRAC) Program. As submitted in the FY 2009 BRAC request, these projects are currently programmed for 

construction in FY 2010. 

Regarding design funding, design is typically initiated two years before construction. The three projects in question have not had any scope reductions and their designs are nearly complete. 

The Department of Defense is committed to all BRAC requirements being completed by September 15, 2011. [See page 23.] 

Secretary PROSCH. Regarding construction funding, projects are competing with 

other requirements within BRAC Program. As submitted in the FY09 BRAC request, these projects are currently programmed for construction funding in FY10. 

Regarding design funding, design is typically initiated two (2) years before construction. The three projects in question are ready to award any time. Costs for 

these projects are accurate for FYI0 execution. No scope has been left out of the 

project. 

Projects are competing with other requirements within BRAC Program. The 

Army’s priority for BRAC funding at this time is for projects impacted by the FY08 

BRAC to ensure successful BRAC compliance. [See page 23.] 

QUESTIONS SUBMITTED BY MEMBERS POST HEARING 

FEBRUARY 28, 2008 

(183) 

QUESTIONS SUBMITTED BY MR. ORTIZ 

Mr. ORTIZ. The Army and the Marine Corps continue to move aggressively to implement their Grow the Force initiatives and have submitted a military construction 

budget request for an additional $2.9 billion in fiscal year 2009. General Casey has 

recently indicated that he would like to accelerate the stationing of additional Brigade Combat Teams. Are the Defense agencies and specifically the Defense Health 

Program properly synchronized with the Services to obtain timely, full-spectrum capabilities? 

Secretary ARNY. The Army and Marine Corps are currently working very closely 

with the Defense Agencies to determine the impact of Growing the Forces on Defense-Wide MILCON requirements. They are currently developing estimates and 

will determine how and when to incorporate these requirements into the Future 

Years Defense Program (FYDP). The full extent of these impacts will be known in 

February 2009 when the Fiscal Year 2010 budget is submitted. 

Mr. ORTIZ. The Department has submitted a fiscal year 2009 military construction 

budget request of $862 million to support a Ballistic Missile Defense European Capability to provide a defense of Europe against a limited intermediate and longrange ballistic missile attack from the Middle East. How close are we to having an 

agreement with our European allies to host these capabilities? Considering the current support of our European allies in this effort, is a European missile capability 

a prudent investment? 

Secretary ARNY. The Department is proceeding with formal bi-lateral negotiations 

with the governments of Poland and the Czech Republic on establishing European 

missile defense sites. We are very pleased with the progress we have made in negotiations with both Poland and the Czech Republic, and are confident that we will 

be able to conclude these negotiations soon. 

The Department’s European theater strategy objectives include ensuring that the 

U.S., its citizens and interests, including friends and allies, are secure from attack; 

that U.S. forces in Europe can conduct a range of military operations successfully; 

that strategic access and freedom of action are secure; that transnational terrorist 

entities are defeated and the environment is unfavorable to terrorism; that security 

conditions are conducive to a favorable international order; that strong alliances and 

partnerships effectively contend with common challenges; and that transformation 

evolves. The Department’s European Missile Defense program remains a priority 

within the Department and is integral to our transformation. 

Mr. ORTIZ. The BRAC 2005 process requires the Department of Defense to complete associated realignments and closures by September 2011. Because of a $1.1 

billion decrement to the BRAC 2005 account by the Consolidated Appropriations Act 

of 2008, the Navy and the Air Force have both indicated that they will not be able 

to complete their realignments on time. Considering the current BRAC 2005 appropriation, is the Department still tracking to complete the BRAC 2005 process by 

Sept. 2011? Does the Department need additional flexibility in schedule to accomplish the BRAC 2005 timeline? 

Secretary ARNY. The Department is still tracking to complete the BRAC 2005 

process by September 15, 2011. If the $939 million reduction to the BRAC account 

is not restored, or even if it is restored late in the process, we will have to work 

creatively to meet the statutory deadline. This could involve eliminating non-mission construction (gyms, child development centers, medical clinics); shifting Operation and Maintenance (O&M) funding to the last implementation years (furnishings and personnel moves); and/or introducing the potential for delaying some 

recommendations (e.g., reserve center consolidations). 

Mr. ORTIZ. DOD has indicated full funding for sustainment is their goal. OSD has 

proposed 90% funding of the sustainment account. Does OSD believe that the 

sustainment model accurately forecast sustainment requirements? Considering the 

long term detrimental effects of not fully funding sustainment, what is the risk associated with accelerated deterioration? 

Secretary ARNY. Yes, DOD believes that the Facilities Sustainment Model accurately forecasts sustainment requirements for our inventory of facilities. The requirements are based on commercial benchmarks to the extent that appropriate 
184 

benchmarks are available. The risk of not fully funding sustainment is potentially 

higher repair costs in the long term. 

Mr. ORTIZ. DOD initially reported that they would complete the utility privatiza- tion effort by 2000. After spending $248 million on the program and privatizing 94 

of the 1,499 systems, DOD intends to complete additional evaluation of the remaining projects by 2010. What additional tools does OSD need to support completing 

a first round of utility privatization evaluations? In retrospect, should this program 

been initially authorized? Is OSD confident in completion of the first round of privatization projects by 2010? 

Secretary ARNY. As of December 2007, the Department has privatized a total of 

519 utility systems, 150 of which have been under the Utilities Privatization Authority. Utilities Privatization is an important tool for managing the Department’s 

$72 billion utility infrastructure. DOD is committed to utilizing private sector innovations, efficiencies, and financing, when economical, to improve utility systems supporting military operations, to improve the quality of life, and to sustain aging utility infrastructure and keep pace with future requirements. Various administrative 

and budgetary challenges have led to extending the program beyond 2010. The current schedule projects completion of the program by 2015. 

Mr. ORTIZ. DOD is on track to privatize 87% of the family housing units including 

188,000 units by 2010. Considering that 36% of the awarded privatization projects 

have occupancy rates below expectations, are the housing private partners going to 

be able to continue the long term investment and financial solvency to continue this 

program? What are the challenges that need to be corrected? Compared with the 

larger outlays required in our personnel accounts to support Family Housing Privatization, is the overall Family Housing program saving money or has it just moved 

money from a discretionary account to a mandatory funding account? Does privatization mask the overall cost afforded to General/Flag Officer quarters? 

Secretary ARNY. We are currently projecting to privatize over 194,000 units by FY 

2010. Of the 87 awarded projects our average occupancy rate is about 90 percent. 

While there are some exceptions, due to construction related issues and general 

market conditions, only the projects owned by American Eagle are in financial jeopardy. Comparing occupancy numbers to pro forma provides insufficient information 

as to the projects’ financial health, particularly while the projects are in their initial 

development period (80 percent of projects). Also, to ease concerns about our private 

partners, we recently conducted a financial analysis of the private housing partners 

and found them all to continue to be financially healthy and solvent. We have every 

reason to believe that the private partners will be able to continue the long-term 

investment needed to maintain the financial solvency of this program. 

While we have recently identified the Government Accountability Office (GAO) 

eight Military Housing Privatization Initiative (MHPI) projects (five Air Force, one 

Army, two Navy) that are behind schedule, or have encountered difficulties (construction/renovation schedules not met due to financial problems, or environmental/ 

construction issues), we see no major structural challenges in the MHPI program 

that need to be corrected by governmental action. The remaining 79 awarded military housing privatization projects are significantly further ahead in terms of revitalized housing than where they would be under a government military construction 

approach. We need to allow the private sector to work through challenges with their 

projects and not intervene. 

Life cycle cost analyses performed on all 87 projects show the cost of privatization 

(including the projected Basic Allowance for Housing payments) are typically lower 

than government ownership, usually in the 10–15 percent range. The Government 

Accountability Office reviewed DOD’s cost analysis methodology exhaustively in 

2001 and agreed privatization was less costly over the life of the projects, based on 

‘‘should costs’’ for government ownership vice actual budgeted costs. Privatization 

does not mask the overall cost afforded to General/Flag Officer quarters (GFOQs). 

In fact, spending on GFOQs is likely more constrained since such spending directly 

reduces funds available for housing lower ranking military members. 

Mr. ORTIZ. Are the three primary Environmental Impact Statements covering 

mid-frequency active sonar use in the Navy’s training ranges still on track to be 

completed by January 2009? Should the environmental compliance process encounter delays, what will be the impact on the Navy’s readiness and how is the Navy 

prepared to respond? 

Secretary PENN. The Hawaii Range Complex EIS remains on schedule for completion in June 2008, and the Southern California Range Complex and the Atlantic 

Fleet Active Sonar Training EISs remain on schedule for completion in January 

2009. We have worked closely and continually with relevant federal and state regulators to ensure that these completion dates are met, and all associated environmental compliance documentation will be issued before January 2009. Delays in 
185 

these documents will likely delay critical training until the documentation is in 

place. Should this occur, the Navy will respond based on circumstances at that time. 

Mr. ORTIZ. The Marine Corps has requested $1.2 billion in the budget request for 

2009 to support an end strength increase of 27,000 marines. Will infrastructure be 

built in time to support the arrival of the new 27,000 Marines? What alternatives 

is the Marine Corps pursuing to accommodate growth? 

Secretary PENN. Infrastructure will not be built in time to support the arrival of 

the new 27,000 Marines. Due to the long lead time necessary for securing funds and 

construction of permanent facilities, units may be in interim facility solutions for 2– 

4 years after unit standup. Temporary facility solutions include a combination of 

utilization of existing facilities, slowing down planned building demolition for use 

in the short term, and use of temporary facilities (trailers, sprung shelters and preengineered buildings). 

Mr. ORTIZ. The Navy has been aggressive in using privatization authority to support this program. They have awarded a project for San Diego and are processing 

additional requests for Norfolk and Jacksonville. How can the Navy ensure filly occupancy of privatized bachelor quarters? What is the termination liability associated 

with this effort? Does the Navy expect to request expanded authority beyond the 

current pilot projects? 

Secretary PENN. The Navy has awarded two pilot Unaccompanied Housing Privatization (UHP) pilot projects to-date. The projects are at San Diego, awarded December 2006, and Hampton Roads, VA, awarded December 2007. A concept for the third 

authorized pilot project is being developed for the Jacksonville/Mayport, Florida 

area. The Navy is investigating the expanded use of privatization authorities to 

meet the projected need for housing single Sailors. 

As with Navy family housing privatization projects, the Navy UHP projects do not 

include any occupancy guarantees. We believe there is sufficient demand for the 

housing. Occupancy at our first two pilot projects exceeds 95 percent. In the unlikely 

event that Navy unaccompanied personnel do not sufficiently occupy the properties, 

there is a priority of DOD and non DOD prospective tenants to whom the housing 

could be rented. This tiered market concept is also similar to that employed in family housing privatization projects. 

For its UHP projects, the Navy uses the same business approach, featuring investments in business entities (e.g., limited liability companies) as employed for its 

family housing projects. If a UHP project fails due to default, the Navy has no outstanding financial obligations or commitments. If the Project Company defaults with 

respect to its construction and operation obligations set forth in the Ground Lease, 

the Navy (subject to certain cure rights accorded the Trustee and the Bondholder 

Representative) has the ultimate right to terminate the Ground Lease, in which 

event the Project Company must surrender, for no consideration, the land, improvements and personal property constituting the project to the Navy. 

The Navy has not included a request for the expansion of the barracks privatization authority, beyond the initial three pilot projects, in this year’s budget submission. Given our experience with the pilot authority to date, we believe that the privatization authorities can be a useful and effective tool in improving housing for our 

single Sailors, especially as a complement to the Homeport Ashore program, and 

would like to see the authority expanded beyond its pilot status. 

Mr. ORTIZ. Government of Japan and SECDEF have concluded an agreement that 

detailed the financing of $10.27 billion required to support the relocation of 8,000 

marines from Okinawa to Guam. Has the Department programmed sufficient funding to meet the agreement timelines? Is the Government of Japan moving concurrently with the Department’s time lines? Considering the historic construction limitations at Guam, can Guam support a sustained $3 billion/year construction effort? 

Considering the large construction workforce necessary to support, what living conditions will be employed and where will the workforce originate? 

Secretary PENN. On April 23, 2006, Secretary of Defense Rumsfeld and Japanese 

Minister of Defense Nukaga reached an agreement for sharing the development 

costs of Marine forces relocating from Okinawa to Guam. Key elements of the Guam 

cost-sharing agreement include: 1) the U.S. will relocate approximately 8,000 USMC 

personnel, plus dependents from Okinawa to Guam and 2) Japan will provide up 

to $6.09 billion of cost-sharing consisting of $2.8 billion in direct payments and 

$3.29 billion of equity investments and loans to special purpose entities that will 

provide housing and utilities necessary to support the Marine units. The U.S. share 

of the Guam development costs is estimated at $4.2B. Yes, the Department has programmed sufficient funding to meet the agreement timeline. The Department has 

programmed $2.5B in the PB–09 FYDP, which ends in FY13. The next budget will 

extend the FYDP to FY15. The Government of Japan is moving concurrently with 

the DOD timeline. Representatives from the Department of Navy and the Govern-
186 

ment of Japan are meeting regularly to discuss the details for implementing the 

agreement and establish funding requirements to commence construction in 2010. 

Although construction on Guam at the peak of the realignment will be significantly higher than previously achieved levels on Guam, several initiatives are underway to facilitate demands on Guam’s infrastructure and the workforce. The Departments of Interior, State and Labor are working to establish training programs 

to equip the local workforce with the required skills. Nonetheless, a significant portion of the construction labor must be provided by a non-Alien workforce holding 

Hii (b) Visas. To meet this workforce requirement, Congressional action is needed 

to provide a waiver on the cap of required Hii (b) Visas. 

An Interagency Task Force, co-chaired by the Department of the Navy and the 

Department of Interior, is identifying Guam’s critical infrastructure needs directly 

related to the success of the construction program. Through the Interagency Task 

Force, the Government of Guam, the Port Authority and Maritime Administration 

are making progress towards significantly upgrading and expanding the commercial 

port. We are working with the Federal Highways Administration in addressing 

Guam’s roads. DOD is also pursuing industry best practices through Industry Forums, including innovative ideas for housing and caring for workers from off-island. 

Mr. ORTIZ. The Marine Corps continues to request temporary space in budget request for fiscal year 2009 to support end strength growth. Temporary, relocatable 

space represents the least cost effective alternative in facility management. What 

is the Marine Corps’ plan to discourage future use of relocatable spaces? How does 

the Marine Corps intend to address the existing relocatable, temporary space at various Army installations? 

Secretary PENN. The target date for achieving the 202,000 Marine Corps endstrength is Fiscal Year 2011. Due to the long lead time for permanent facilities, 

units maybe in temporary facility solutions for 2-4 years after unit standup. The 

Marine Corps agrees that the use of temporary and relocatable facilities is not an 

ideal solution. However, temporary and relocatable structures must be used by the 

Marine Corps until permanent construction can be funded, built and occupied. The 

use of temporary relocatables will vary by requirement and location. When 

relocatables are no longer needed, leased relocatables will be removed from the site 

by the lessor and purchased relocatables will be disposed of by the installation. 

Mr. ORTIZ. The Navy has indicated that they will not be able to complete BRAC 2005 by September 2011 without a restoration of $140 million that was eliminated 

in the Consolidated Appropriations Act of 2008. What are the effects associated with 

limited or late BRAC 2005 funding? With available funding, will Navy be able to 

complete the BRAC 2005 process by September 2011? 

Secretary PENN. Limited or late restoral of Navy’s share of the FY08 BRAC cut ($143 million) will delay the award of two BRAC construction projects for a total 

of $97 million (Investigative Agencies Consolidation, Quantico VA; Reserve Center, 

Fort Lewis, WA) and delay move-related expenditures in the amount of $46 million 

(O&M) from FY08 to FY09. These delays will add uncertainty and hardships in the 

careers and families affected by the move, and delay achieving management efficiencies and savings that were the basis for the BRAC decisions. The available appropriations are insufficient and jeopardize DoN’s ability to accomplish BRAC by 

the Sep 15, 2011 statutory deadline. 

Mr. ORTIZ. The fiscal year 2009 budget request contains $1.0 billion, approximately $400 million less than appropriated in fiscal year 2008. The Army has more 

construction at one installation than the entire Air Force, Air National Guard and 

Air Reserve military construction combined. This decline in infrastructure investment is causing significant inefficiencies locally and accelerating degradation of assigned aviation assets. Examples include: new aviation assets are arriving without 

hangars and other support infrastructure (Elmendorf AFB (AK) F–22s arrive with 

no completed infrastructure to support); trainers remain in warehouses until the appropriate supporting infrastructure is programmed and built. Why did Air Force not 

program infrastructure in time to support valuable aviation assets? 

Secretary ANDERSON. The fiscal year 2009 budget request supports the Secretary 

of the Air Force and Air Force Chief of Staff priorities to Win Today’s Fight, Take 

Care of Our People, and Prepare for Tomorrow’s Challenges. In order to recapitalize 

and modernize our aging aircraft fleet, the Air Force accepted short-term risk in infrastructure to fund higher priority Secretary of the Air Force and Air Force Chief 

of Staff programs. Although sometimes inefficient, using operations and maintenance readiness and infrastructure funds was considered when deciding to defer 

military construction, yet still meet critical mission needs. 

Mr. ORTIZ. The Air Force has proposed to allocate a significant portion of their 

military construction account toward new aviation assets, consequently, driving up 

the overall recapitalization rate to 109 years (DOD goal is 67 years). Why did Air 
187 

Force elect to take risk in the facility accounts and delay critical restoration and 

modernization activities? What is the long term effect of a delay in funding restoration and modernization activities? 

Secretary ANDERSON. We recognize the Air Force recapitalization rate (110 years 

w/ BRAC; 188 years w/o BRAC) cannot be sustained without degradation to our installation weapon-system capability. Modernizing our aging fleet is the Air Force’s 

toughest challenge; the Air Force elected to take risk in facility accounts in order 

to recapitalize and modernize weapon systems. The Air Force increased Restoration 

and Modernization operations and maintenance funding by $168M in the FY09 

budget request compared to the FY08 budget request. Although not enough to fund 

the $9.3B backlog of Restoration and Modernization projects, the increase in funding 

helps mitigate the risk to infrastructure and facilities. In addition the AF funded 

facility sustainment at 90% of the OSD requirement model; this sustainment funding level is intended to keep good facilities in operational condition to meet mission 

needs. 

The long-term effect of a delay in funding restoration and modernization activities 

is difficult to ascertain. Since Air Force installations are weapons systems and provide power projection platforms, we cannot continue to take the same levels of risk 

in the infrastructure accounts and provide the required level of facility support 

needed to accomplish our world-wide combat mission. 

Mr. ORTIZ. The Air Force has indicated that they will not be able to complete 

BRAC 2005 by September 2011 without a restoration of $235 million that was cut 

in the Consolidated Appropriations Act of 2008. 

Secretary ANDERSON. The $939 million Omnibus reduction to the Department of 

Defense BRAC 2005 account must be restored. If left unfunded, the reduction will 

result in the Air Force receiving $235 million less than required in Fiscal Year 2008. 

The Air Force will experience delays and disruptions in construction and the movement of our people and assets. Delays will impact our ability to meet mandated 

completion deadlines. 

To implement BRAC 2005 and implement the Commission’s recommendations, the 

Air Force uses a continuous process to identify, analyze, refine, coordinate, and validate requirements. Although the Air Force has not cut any projects due to this reduction, it has deferred BRAC MILCON projects, O&M requirements, and planning 

and design. Those deferments are based on today’s planned award dates. The Air 

Force may further adjust its strategy and the deferral list in order to maintain the 

needed flexibility to execute its program. 

Our initial analysis of the reduction indicates the Air Force will be required to 

accept risk in the following areas: 

- Military Construction (MILCON): Will defer 21 projects, to include one 

housing project, valued at $126.4M (15% of total BRAC MILCON). All 

deferred projects have estimated award date after 1 June 08 

- Planning and design (P&D): Will defer $5.2M in requirements (28% of 

total P&D) 

- Operations and Maintenance (O&M): Will defer $97.8M in requirements 

(36% of total O&M) 

If the reduction is restored sometime during this fiscal year, we will figure out 

a way to get back on track. If it is permanently lost, we will be hard broke; delays 

in accomplishing the FY08 requirements will have ripple effects impacting mission 

readiness and our ability to meet the mandated BRAC 2005 completion deadline of 

September 2011. 

Mr. ORTIZ. The Army has programmed $11.2 billion for the Grow the Army initiative and has proposed $4.2 billion in fiscal year 2009 military construction to support their end strength growth. Considering the intent to accelerate the Grow the 

Force initiative, will all of the supporting infrastructure be available to directly support the arrival of the growth? 

Secretary PROSCH.The Army Military Construction budget request was carefully 

built to synchronize delivery of permanent construction on a timeline that meets the 

effective dates for activation of the six Grow the Army Brigade Combat Teams. $4.1 

billion of our overall fiscal year 2009 Military Construction budget request supports 

the Growth initiative for a 74,200 Soldier increase. This will fund unit bed-down 

and operational requirements (barracks, maintenance, unit administration, dining 

facilities, classrooms, and command and control headquarters), quality of life facilities (child development centers, housing, physical fitness, and physical fitness centers), and training ranges. A full and timely funding stream is essential to supporting Army growth. 
188 

Mr. ORTIZ. The Army has been particularly impacted by a reduction of $560 million in the Consolidated Appropriations Act of 2008. What impact will the delay in 

BRAC 2005 finding affect the restationing of forces? Is Army tracking to complete 

the implementation of BRAC 2005 by September 2011? 

Secretary PROSCH.We need your help in supporting the remaining requirements for BRAC 2005. If the $560 million decrement is not restored this year, the Army 

will not meet all of its requirements in accordance with BRAC Law. BRAC is an 

integral component of our stationing plan and our complex Military Construction 

program is interdependent with BRAC. Delays or cuts to either of these interrelated 

programs put our ability to grow and restore balance at risk. We are at a crucial 

juncture in the BRAC program. To successfully execute BRAC, we carefully synchronized 1,300 actions. Without full and timely funding, 31 of 90 FY 2008 BRACdirected projects will not be completed, including 10 Armed Forces Reserve Centers, 

9 training and readiness projects, and 12 quality of life projects. 

Mr. ORTIZ. The Army has reported that it has a 5,000,000 acre training deficit 

across multiple installations. How does the Army intend to address the existing deficit in training space? 

Secretary PROSCH. The Army currently operates at an overall training land deficit 

of 2 million acres in the Continental United States. The training land shortfall is 

expected to more than double by 2011 to nearly 5 million acres as a result of several 

factors. These include fundamental changes in the way the Army organizes, trains, 

and equips our Soldiers as a result of the new missions and enemies we face. In 

addition, over 41,000 Soldiers are being relocated from overseas back to the United 

States as part of the Global Defense Posture Realignment, which transfers a large 

training land requirement on top of an existing installation footprint. We are also 

Growing the Army by over 74,000 Soldiers. All of these trends have significantly increased Army training land requirements. 

The Army is always working to mitigate this shortfall through a variety of means. 

The Army pursues focused management to maximize existing land holdings, 

buffering through partnerships, and utilization using other Federal lands, where 

possible. However, all of these mitigation measures, including training on other federally owned lands, cannot eliminate the training land deficit. Therefore, one of the 

options that must remain available to the Army is the acquisition of land where it 

is feasible and fiscally prudent. 

The Army’s policy is to purchase land only where; large land holdings exist, it is 

cost effective, minimal environmental issues exist, land is contiguous to existing 

training land, and population density is low. 

Last, live and realistic training remains the cornerstone of Army mission readiness, and virtual and computer-aided simulations, while important, cannot replace 

certain kinds of real-life training experiences. The Army has a responsibility to develop combat-ready Soldiers. To meet this obligation, we must not only provide the 

right equipment, but also the right training. Fundamentally, we must train the way 

we fight. 

Mr. ORTIZ. The Army has reported that it has 10,000,000 square feet of 

relocatable space to support end strength growth. What is the Army’s plan to discourage future use of relocatable spaces? How does the Army intend to address the 

10,000,000 square feet of existing relocatable, temporary space at various Army installations? 

Secretary PROSCH.The Army will use relocatable buildings only as a last resort 

when no other solutions are available to provide urgently needed interim facilities 

to meet peak surge missions or pending completion of regularly programmed military construction projects. 

The Army is programming military construction projects to build permanent facilities to replace the existing relocatable building inventory. Seventy-three percent 

(73%) of existing relocatables currently have permanent facility projects prioritized 

in the fiscal year 2009-2013 Future Years Defense Program. We will program 

projects for any remaining relocatables requiring permanent facilities during the fiscal year 2010-2015 Military Construction program development. 

Mr. ORTIZ. The Army has proposed no funding for the O&M, Restoration and 

Modernization account for fiscal year 2009 budget request and has applied this 

funding toward new construction requirements. This decision will realize short term 

capital but will lead to accelerated facility degradation. Why has the Department 

eliminated funding for the periodic restoration of facilities? 

Secretary PROSCH. Based upon Army’s significant investment in military construction projects in FY 2009 and investment in facility sustainment (90% of OSD’s Facility Sustainment Model), the Army decided not to put funding in the FY 2009 budget 

for O&M, Restoration and Modernization. The Army believes that this will not lead 

to accelerated facility degradation. 
189 

QUESTIONS SUBMITTED BY MR. ROGERS 

Mr. ROGERS. Does the Army track actual numbers of soldiers, civilians, contractors and their related dependents, particularly their school-aged dependents, on the 

ground? 

Secretary PROSCH. Yes, the Army tracks actual Soldiers and civilians from the Defense Enrollment Eligibility Reporting System (DEERS) annually. The DEERS, part 

of the Defense Manpower Data Center, collects and updates actual population of 

service members and dependents (spouses and children by age group) by location 

during in and out processing. DEERS also includes civilians and contractors from 

the Defense Civilian Personnel System and the Contractor Verification System. The 

Army Stationing and Installation Plan (ASIP) is the Army’s official source of installation populations for resource and support planning. ASIP is updated quarterly and 

documents the composition and location of authorized Army force structure, student 

loads, trainee loads, rotational loads, and actual tenants (other Services, contractors, 

DOD agencies, etc.). ASIP population is available for the current year and six planning years and is consistent with approved and documented Army force structure 

documents. 

Projected school age dependent population is calculated for full-time Army military and civilians using a ratio of .484 [(.48 married) x (1.6 children) x (.63 are 

school age)]. School age dependent population projections for school years 2007-2011 

were published in the ‘‘Department of Defense Update to the Report on Assistance 

to Local Educational Agencies for Defense Dependents Education’’ in March 2008 

based on 31 October 2008 ASIP population. 

Mr. ROGERS. Do individual instillations track the actual numbers of people on the 

ground? 

Secretary PROSCH. Army installations are not required to maintain ‘‘actual’’ population counts due to the volatility of base populations and the workload required to 

maintain what can be daily changes. Individual garrisons may track actual populations, or sub-populations at their own discretion. However, this is not recognized 

by the Army as an official source of population data. 

Mr. ROGERS. We need to develop a way to determine the actual numbers. I would 

like the Army to provide me with the numbers of folks on the ground now—soldiers, 

civilians and any contractors that have school-aged dependents—and a historical 

snapshot of what has been on the ground in those communities in the previous five 

years. I think this will present a better picture of what we need. Thank you for your 

time and service. 

Secretary PROSCH. There is no single database that maintains actual population 

data for military, civilian, contractor, plus dependents. DEERS collects service members and dependents (spouses and children by age group), civilians, and contractors. 

Dependents of civilians and contractors are not included in DEERS. DEERS data 

are available for 2002 to present. The ASIP maintains actual population data for 

contractors based on input from each installation and is available from 2000 to 

present. The Army is working to establish a system to obtain Army, civilian, and 

associated mission support contractor dependent student data as it relates to the 

identified installations, communities, and Local Educational Activities. 

Below are ‘‘actual’’ populations for Army Soldiers (Active and Reserve Component) 

and Army Civilians from the Defense Manpower Data Center reported to Headquarters Department of Army by fiscal year (FY), FY 2008 totals are as of April 

2008. Actual contractors were reported in the ASIP by FY, FY 2008 contractors are 

as of March 2008. 

Population Type FY08 FY07 FY06 FY05 FY04 

Military (Active) 517,780 502,790 482,400 494,290 482,400 

Military (Reserve) 542,590 536,270 555,000 555,000 555,000 

Civilians 207,200 206,390 229,000 223,000 223,000 

Contractors 167,074 165,138 163,351 150,048 142,558 

QUESTIONS SUBMITTED BY MR. LOBIONDO 

Mr. LOBIONDO. Can you explain why the Air National Guard and the Air Force 

Reserve regular MILCON programs have dramatically declined? In FY06, Air Guard 

MILCON was $165 million, decreased to $123 million FY07, and then substantially 

decreased again in FY08 to $85 million. 
190 

Secretary ANDERSON. The Air Force is taking Total Force risk in infrastructure, 

which is balanced across all component programs between BRAC, MILCON, and 

O&M. The ANG and AFRC receive their full share of new mission and current mission funding, which is allocated based on their Plant Replacement Value (PRV). In 

FY06 and FY07, the ANG and AFRC had a larger new mission MILCON requirement in their PB request than in FYO8PB or FYO9PB. As a result, their total 

MILCON funding was larger in FY06/FY07 than in FY08/09. There simply is not 

enough funding within the current Air Force budget to accommodate all requirements. The Air Force budget request carefully balances our facility operations and 

maintenance accounts for sustainment, restoration, and modernization with the 

military construction program to make the most effective use of available funding. 

Mr. LOBIONDO. Likewise, for the Reserves, the MILCON budget has fallen from 

$79 million in FY06 to $44 million in FY07, FY08 down again to $26 million. As 

I review your FY09 MILCON request, I see the Air National Guard’s budget decreased yet again, now four consecutive years in a row, in FY09 to $34 million. For 

FY09, the Reserve’s budget is reduced by 30% from $27 million to $19 million. Is 

the Air Force managing risk on the backs to the Reserve Components? If risk is 

managed across components, why is it the Air Forces Active Duty MILCON budget 

has typically increased across these same years? Is it fair to include BRAC MILCON 

funding as a factor in your allocation process? Doesn’t this skew against the Reserve 

Component, having been impacted by BRAC more so than the AD component? 

Secretary ANDERSON. The Air Force is not managing risk on the backs of the Reserve Components. The Air Force is taking Total Force infrastructure risk across all 

component programs (BRAC, MILCON, and O&M.) 

The Active Force MILCON budget is typically larger than the Reserve component 

because of larger new mission beddowns coupled with a bigger share of Plant Replacement Value (87%) for current mission allocation. 

Since the allocation process did not factor BRAC, the process is not skewed 

against the Reserve Component. The FYO9PB facility recapitalization rate including 

BRAC is Total Force: 110 years (188 years w/o BRAC); ANG: 69 years (140 years 

w/o BRAC), AFRC: 87 years (156 years w/o BRAC); Active Force: 119 years (197 

years without BRAC.) 

QUESTIONS SUBMITTED BY MR. COURTNEY 

Mr. COURTNEY. As you know, much of the housing at Sub Base New London has 

been privatized to GMH Military Housing. In my discussions with the leadership 

of the base, this arrangement appears to be positive and beneficial to the sailors 

and families at the base. I note that on February 12, 2008, GMH announced the 

transfer of the military housing division to a U.S. subsidiary of Balfour Beatty plc, 

a British corporation. Does the Navy have any concerns about moving control of 

military housing to a foreign company and any possible impact to military housing 

or the security of bases such as Sub Base New London? 

Secretary PENN. The Navy does not currently have security concerns about Balfour Beatty plc (a London-based public company traded on the London Stock Exchange) acquiring GMH’s Military Housing Division (inclusive of GMH’s interest in 

the Northeast and Southeast projects). 

Balfour Beatty itself is already the design/builder for the Northeast and Southeast 

projects and has recently been awarded, in a joint venture with Clark Construction, 

a $641 million contract to design and build additions and renovations at the new 

Walter Reed National Military Medical Center in Bethesda, Maryland. 

QUESTIONS SUBMITTED BY MRS. NAPOLITANO 

Mrs. NAPOLITANO. Do you think it was fair that the Air Force stopped the negotiated sale with the City of Norwalk for the Norwalk Tank Farm because the City 

did not want to pay for contamination cause by the Air Force’s lessee, Kinder Morgan? 

Secretary ARNY. The Air Force was not responsible for terminating the negotiated 

sale. This decision was made by the General Services Administration (GSA), DOD’s 

real estate agent. GSA terminated the negotiated sale because of the disparity between the City’s best and final offer and GSA’s appraised fair market value of the 

Norwalk Tank Farm property (Property). Moreover, we are not aware that the City 

was asked or that a term of the negotiated sale included City payment of Kinder 

Morgan Energy Partner’s (KMEP) remediation costs. Based on Air Force discussions 

with KMEP, KMEP has steadfastly maintained a desire to pursue its remedial obli-
191 

gations through to completion rather than have these responsibilities delegated to 

or funded by a third party. 

Mrs. NAPOLITANO. Has a city or government agency ever bought a property 

through the military construction exchange process? 

Secretary ARNY. Yes, the Army has exchanged Reserve Component property with 

this type of entity on several occasions. Examples include: the City of Oakland, California; the East Bay Municipal Utility District, Oakland, California; the Port of 

Oakland, California; the City of Houston, Texas; the University of Texas; the City 

of Beachwood, Ohio; Minnesota Department of Transportation; Kalamazoo, Michigan Airport Authority; Oklahoma City, Oklahoma; South Fayette School District, 

McDonald, Pennsylvania; City of Caven Point, New Jersey; and the Chicago Airport 

Authority, Illinois. All of the Military Departments are currently considering this 

type of exchange with government entities where appropriate. 

Mrs. NAPOLITANO. In the late 1980s, the Air Force informed the Norwalk City 

Council, of which I then was a member, that they were going to fully remediate the 

Tank Farm property and transfer it to the City of Norwalk if no other federal agency wanted it. Why has the Air Force reneged on this promise? 

Secretary ANDERSON. The Air Force has not reneged on its promises. Under federal real property disposal authorities applicable to the Air Force, after determining 

no further Department of Defense (DOD) need for the Tank Farm Property (Property), the Air Force turned the Property over to the General Services Administration 

(GSA). By law, GSA must act as DOD’s property disposal agent. GSA, in turn, determined no further federal need for the property and commenced a negotiated sale 

with the City of Norwalk. After two years of negotiations, the City and GSA were 

unable to reach agreement on price. GSA determined the City’s best and final offer 

to be well below the property’s fair market value using an appraisal prepared by 

a competent, professional appraiser. The significant disparity led GSA to terminate 

the negotiated sale. Thereafter, the Air Force regained control of the property and 

commenced its own disposal process. The City voluntarily declined to participate in 

this process despite repeated invitations and encouragement by the Air Force to do 

so. 

The Air Force commenced remediation of the property in 1995. It has worked 

steadfastly since the time under the auspices of the California Regional Water Quality Control Board (RWQCB), Los Angeles District. It has made significant progress 

and site close out is anticipated by 2011. The decision to privatize clean-up or contractually obligate the purchaser/developer to assume the Air Force’s remediation 

obligations changes nothing in terms of the final outcome. The property will be remediated and the Air Force remains obligated in the event of developer default. 

Based on its experience with privatized remediation, the Air Force believes developer completion of remediation will occur faster than the timeline contemplated by 

the Air Force. This will facilitate redevelopment and reuse of the property—a goal 

supported by the city. 

Kinder Morgan Energy Partners (KMEP) has likewise diligently pursued remediation of its portion of the property and the contamination caused by its activities/ 

facilities. Going forward, KMEP will retain responsibility for its remediation obligations, also under the auspices of the RWQCB, through to completion in 2012. The 

Air Force intends to enter into an environmental agreement with KMEP, stipulating 

KMEP’s continued obligations. However, in the unlikely event of default, the Air 

Force retains the ultimate responsibility to complete the work. 

Mrs. NAPOLITANO. What experience does the Air Force have with disposing of contaminated properties through the military construction exchange process? Why does 

the Air Force persist in pursuing a real property exchange when a city expressed 

great interest in procuring the property? What experience does the Air Force have 

with disposing of properties that contain contamination cause by an Air Force lessee? 

Secretary ANDERSON. A Real Property Exchange (RPX) is the only disposal method available to the Air Force which allows the Air Force to receive consideration in 

the form of military construction (MILCON). A RPX allows the Air Force to exchange the Norwalk Defense Fuel Support Point property (Property) for construction 

of needed facilities at March Air Reserve Base (March ARB). 

The city is not precluded from bidding to acquire the property under the RPX disposal process. In fact, the structure of an Air Force-City transaction under the RPX 

process would be identical to what the city attempted to negotiate with GSA—city 

alignment with a developer and developer payment of the consideration. An RPX 

transaction has the added advantage of direct deed transfer to the developer without need for the city to first acquire ownership of the property as required by a negotiated sale. 
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Broken down into its constituent parts, an RPX is basically the disposal of property and the construction of MILCON. The Air Force has extensive experience in 

both. 

The Air Force also has considerable expertise in disposing of contaminated properties and ‘‘privatizing’’ the clean-up via the Base Realignment and Closure (BRAC) 

and active duty processes. Examples of transactions where the developer assumed 

the Air Force’s and/or its lessee’s remedial obligations include the National Imagery 

and Mapping Agency (NIMA) disposal in St. Louis, MO (chemical contaminants in 

soil, sediment, surface water and ground water); the former Lowry AFB disposal in 

Denver, CO (solvent contamination of water, long term maintenance of landfills, asbestos in soil); the former McClellan AFB disposal in Sacramento, CA (a National 

Priorities Site and DOD’s most contaminated installation; nonclorinated contaminates in shallow soil): and the Escanaba disposal in Escanaba, MI (creosote and petroleum contaminants). The Air Force is currently working with the General Services Administration to dispose of a former Fuel Support Point in Cincinnati, OH and 

terms of sale include purchaser assumption of petroleum related contamination. 

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