```

[Senate Hearing 114-609]
[From the U.S. Government Publishing Office]

 
     MILITARY CONSTRUCTION, VETERANS AFFAIRS, AND RELATED AGENCIES 
                  APPROPRIATIONS FOR FISCAL YEAR 2016

                              ----------                              

                       WEDNESDAY, APRIL 15, 2015

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.

    The subcommittee met at 10:33 a.m., in room SD-124, Dirksen 
Senate Office Building, Hon. Mark Kirk (chairman) presiding.
    Present: Senators Kirk, Murkowski, Tester, and Schatz.

                         DEPARTMENT OF DEFENSE

                         Joint Chiefs of Staff

                          U.S. Pacific Command

STATEMENT OF MAJOR GENERAL MICHAEL G. DANA, USMC, 
            DIRECTOR FOR STRATEGIC PLANNING AND POLICY 
            (J5)

                 OPENING STATEMENT OF SENATOR MARK KIRK

    Senator Kirk. Our witnesses are Major General Clark and 
Major General Dana, and from the Defense Health Agency (DHA), 
Mr. Marshall, and from the Missile Defense Agency (MDA), 
General Todorov. Thank you all for being here.
    We are going to be hearing from the military departments, 
the Navy, the Air Force, the Combatant Commanders, to make sure 
we get down to what projects are doing actually for the 
national defense.
    We will go with the early bird rule and alternating sides, 
and I will defer to Mr. Tester for any opening statement you 
might have.

                    STATEMENT OF SENATOR JON TESTER

    Senator Tester. Thank you, Chairman Kirk. I want to welcome 
the witnesses today and thank all of them for appearing before 
this subcommittee and for their service to this country.
    Today's hearing brings together some of our Nation's most 
critical defense capabilities. This includes Special Operations 
Command (SOCOM) and our special operators at the forefront of 
defending our Nation. Pacific Command (PACOM), the Combatant 
Command, at the heart of the 21st century defense policies and 
geopolitics, and DHA and MDA, the defense agencies charged with 
the sacred duty of keeping our servicemen and women healthy in 
protecting our shores and those of our allies from the threat 
of missile attack.
    Military construction (MILCON) is a key component to 
readiness. The facilities that we invest in today form the 
framework of our strategy for tomorrow. It follows that poorly 
planned investments not only waste taxpayer dollars but also 
threaten U.S. strategic interests and the ability of our war 
fighters to protect this Nation.
    Forward thinking, properly planned and resourced 
infrastructure investment is particularly relevant for the key 
commands and missions represented by the witnesses before us 
today. This is especially true in weighing the requirement for 
MILCON investments in the United States versus overseas.
    Given the budget pressures that the Department of Defense 
(DOD) is currently facing, it is imperative to ensure that the 
Continental United States (CONUS) MILCON requirements are not 
short-changed and accommodate overseas MILCON investment. Host 
nation support plays a key role in leveraging our investments 
in overseas MILCON.
    Thus, we must make sure that our allies are paying their 
fair share of the MILCON bill for overseas initiatives that 
benefit both the United States and those allies.
    I look forward to your testimony. I hope you can assure 
this subcommittee that the very substantial fiscal year 2016 
MILCON funding that you are requesting is based on rigorous 
planning and long-term strategy, not only to meet the near term 
requirements but also future strategic needs.
    Thank you all for being here today. I look forward to your 
testimony and look forward to the questions that will follow. 
Thank you, Mr. Chairman.
    Senator Kirk. Thank you. We are going to turn to our four 
witnesses. The MILCON request is about $8.4 billion. I want 
everybody to focus on how your request directly supports the 
national defense, to talk about bricks and mortar and strategic 
goals for the United States. I want to make sure you focus on 
your area of responsibility (AOR) and look at what is necessary 
to do.
    Over to you, General.

        SUMMARY STATEMENT OF MAJOR GENERAL MICHAEL G. DANA, USMC

    General Dana. Mike Dana. I am the PACOM J5. Thanks for the 
opportunity, sir, to be here today. My boss is in the building 
today also, so you have two folks from PACOM.
    Sir, on the way over here I was talking to the team in the 
van. I wanted to share with you that I have six uncles that 
served in World War II, three in the Pacific, two in the 
European theater, then my Uncle Joe is at Brooklyn Navy Yard, 
but he did his time. Those three uncles served in combat in the 
Pacific.
    That generation put in place for us a security framework in 
the Pacific that is still in existence today, at terrible cost; 
111,606 servicemen were killed in the Pacific in World War II. 
When you look at the GDP that was consumed during World War II 
in 1944, 43 percent of GDP was committed to the fight.
    The point of this is this investment that we are making in 
MILCON now and through the future, through 2030, through 2032, 
keeps the security framework in place that has had great 
dividends to the United States and for the region.
    I have been a marine for 33 years. I first went to the 
Pacific in the mid-1980s. I spent a lot of time in my current 
job in the Pacific. It is just amazing the economic growth and 
the quality of life and how things have improved in places like 
the Philippines, Indonesia, Malaysia, and Singapore. For all 
these areas it is absolutely critical that we maintain our 
presence.
    The main theme I have for you today is the 29 projects, the 
$1 billion in investment in the Pacific is going to pay 
dividends, and it pays dividends in the following ways: it 
provides us a forward presence. We have forces in the Pacific 
forward deployed that can do the following things: key 
engagements, training exercises, building partner capacity.
    The forces from the United States are very important. It is 
great to have these forward position forces where we can 
interact with allies and partners and future partners to 
achieve the U.S. strategy and the PACOM strategy for the 
Pacific, which is peace, security, stability, and prosperity in 
the region. When we are there, it matters, and our allies and 
partners like us being there.
    You talked about costs, and I think what is most striking 
if you look at the top four projects, MILCON projects that are 
ongoing, and the Secretary of Defense mentioned this in his 
speech, if you look at Camp Humphreys and the Anjeong-ri 
relocation in Korea, if you look at Iwakuni, where they 
literally moved mountains, literally, then the Futenma 
Replacement Facility and the Okinawa consolidation, Guam-CNMI, 
as we take that from now, sir, to 2028 when we have full 
operating capability in Guam, in that time span, $37 billion 
bill, that is a lot of money, but the good news is our Korean 
and Japanese allies are paying $30 billion of that bill. I wish 
I could find a bank to give me that kind of return on 
investment.
    We greatly appreciate the investment. I look forward to 
your questions, and thanks for the time today.
    [The statement follows:]
          Prepared Statement of Major General Michael G. Dana
    Chairman Kirk, Senator Tester, and distinguished members, thank you 
for the opportunity to address the subcommittee. I am Major General 
Michael Dana, USPACOM J5, Director for Strategic Planning and Policy. 
In concert with ADM Locklear's testimony provided to the House 
Appropriations Defense Subcommittee, I am prepared to discuss how 
USPACOM fiscal year 2016 military construction (MILCON) requirements 
support National strategic objectives.
                                strategy
    USPACOM Strategy reflects our contribution to U.S. efforts to 
rebalance in the region. In accordance with national guidance, our 
desired end state is that the Indo-Asia-Pacific is secure and 
prosperous, underpinned by U.S. leadership and a rules-based 
international order. To this end, we will strengthen alliances and 
partnerships, maintain an assured presence in the region, and 
effectively communicate our intent and resolve to safeguard U.S. 
national interests. Proceeding from a hierarchy of national level 
planning guidance, the strategy provides the Commander's vision for 
resourcing in light of national level emphasis on the Indo-Asia-
Pacific.
    Through supporting the development of strong regional institutions 
and partnerships capable of supporting common solutions, we will 
attempt to shape China's behavior as its regional and global influence 
grows. In addition, we will encourage the outlook of key external 
powers to promote cooperation with the United States in the region by 
strengthening U.S. and regional partner capacity to meet emerging 
challenges. By supporting democratic development through the promotion 
of good governance, human rights, and inclusive participation, USPACOM 
will pursue denuclearization and reduce the risk of weapons of mass 
destruction proliferation from North Korea.
                               background
    The U.S. Pacific Command (USPACOM) area of responsibility (AOR) 
encompasses approximately half the earth's surface and more than half 
of its population. The 36 nations that comprise the Asia-Pacific 
include: two of the three largest economies and five of the smallest; 
the most populous nation; the largest democracy; the largest Muslim-
majority nation; and the smallest republic in the world. The region is 
a vital driver of the global economy and includes the world's busiest 
international sea lanes and nine of the ten largest ports. By any 
meaningful measure, the Indo-Asia-Pacific is also the most militarized 
region in the world, with seven of the world's ten largest standing 
militaries and five of the world's declared nuclear nations. Under 
these circumstances, the strategic complexity facing the region is 
unique.
                            forward presence
    Fundamental to USPACOM's mission is the ability to deter aggression 
and prevail in crisis. USPACOM maintains forward-deployed ready forces 
as credible deterrents, to support and defend national security 
interests, while providing assurance and protection to allies and 
partners. Assured forward presence is supported through posturing the 
right capabilities (forces) at the right locations (footprints) with 
the right host nation access (agreements) to ensure forward deployed 
forces can support National objectives. USPACOM strives to maintain a 
force posture that effectively communicates U.S. intent and resolve, 
safeguards U.S. national interests, strengthens alliances and 
partnerships, maintains a politically sustainable presence in the 
region, prevents conflict, and if necessary, is able to respond rapidly 
and effectively across the full range of military capabilities.
                                 milcon
    USPACOM comprises over 21 percent of the entire joint force, to 
include approximately 100,000 servicemembers, not including dependents, 
forward deployed to Japan, Korea, and Guam. The size and scope of the 
forward deployed forces and the emergent security environment require 
recapitalization and capability improvement in the AOR. To that end, 
the fiscal year 2016 MILCON projects largely reflect requirements that 
support the fielding of new capabilities in the AOR, to include the 
Joint Strike Fighter, CV-22, C-130J, and the F-22. Additional 
investments support resiliency initiatives and infrastructure 
recapitalization on Guam and Hawaii, critical munitions throughput 
recapitalization in California (MOTCO), and quality of life investments 
for our force's dependents in Korea and Japan.
                       host nation contributions
    The Department appreciates the significant host nation investment 
made by key partners and allies as we look to expand our access and 
operations in the USPACOM AOR, providing mutual benefit to our 
partners' and our interests. Our strategy seeks to provide the correct 
level of capital investment to support established posture initiatives 
and commitments, including efforts in Korea (Yongson Relocation Plan 
(YRP) and Land Partnership Plan (LPP)) and Japan (Okinawa Consolidation 
(OKICON) and the Defense Policy Review Initiative (DPRI)). In support 
of these initiatives, the Government of Japan has committed up to $3.1 
billion to help realign U.S. Marines from Okinawa to Guam and other 
locations and $4.5 billion to expand the airfield and associated 
facilities at Marine Corps Air Station Iwakuni. In addition to these 
specific programs, Korea and Japan maintain robust Host Nation Funded 
Construction (HNFC) programs which play vital roles in supporting U.S. 
presence and enduring capabilities in the region.
    Our legacy installations in Northeast Asia date from the cold war 
and are showing their age. During these times of austere budgets, the 
services struggle to maintain infrastructure Sustainment, Restoration, 
and Modernization (SRM) accounts at appropriate levels. As we look to 
the future, we do not anticipate creating large footprint U.S. 
installations throughout the theater. Rather, by working in concert 
with our partners in the region, we can deploy capabilities through 
agreed upon locations requiring only modest levels of infrastructure 
improvement.
                               conclusion
    It has been over 3 years since the President announced the U.S. 
Rebalance to the Asia-Pacific. The Rebalance is focused on modernizing 
and strengthening treaty alliances and partnerships through cooperative 
agreements, building partner capacity, and increasing regional 
cooperation, interoperability, and security capabilities. Through 
assured forward presence, the Department will continue to maintain its 
momentum and commitment to the Rebalance while simultaneously achieving 
objectives defined in national level planning guidance. Thank you for 
your continued support to USPACOM and our men and women, and their 
families, who live and work in the Indo-Asia-Pacific.

    Senator Kirk. Thank you, General.

                    U.S. Special Operations Command

STATEMENT OF MAJOR GENERAL STEPHEN A. CLARK, USAF, 
            DIRECTOR OF FORCE STRUCTURE, REQUIREMENTS, 
            RESOURCES, AND STRATEGIC ASSESSMENTS (J8)
    General Clark. Good morning, Chairman Kirk, Ranking Member 
Tester, and distinguished members of the subcommittee, on 
behalf of General Votel and the entire Special Operations 
Command (SOCOM) family, thank you for the opportunity to 
discuss our fiscal year 2016 military construction program 
through the lens of operational impacts and imperatives.
    Over 11,000 Special Operations Forces (SOF) stations were 
operating in over 80 countries on any given day in support of 
the geographical command requirements. In some areas, they 
comprise large to medium formations and in others small or 
single individuals. They may be discrete or directly enabling a 
conventional unit or partner nation across the range of 
military activities.
    Building this skilled and specialized force is a demanding 
and time-intensive process. Every day our forces put forth an 
extraordinary level of effort and personal sacrifice while 
enduring grueling physical and mental demands to meet mission 
requirements. These are mature, educated, and highly trained 
individuals for whom our Nation expects exceptional outcomes.
    In order to ensure these exceptional outcomes, they depend 
on exceptional facilities to maximize their organizational, 
educational, operational training, and equipment requirements.
    One of our SOF truths is that humans are more important 
than hardware. This axiom reminds us that it is our people who 
make the decisions, our people who execute the mission, and our 
people who live with the consequences. Our MILCON program is 
focused on those same people, their mission, and their success.
    We do this not only through the design and capabilities 
within facilities, but also pay close attention to their 
functional alignment, location, and relationship to each other. 
This functional alignment maximizes facility utilization, 
increases training time available, increases training impact, 
and increases time available with family between deployments.
    It ensures the force is rapidly deployable and is a robust 
sustainment base from which to draw on. Upon return, they have 
a solid foundation for recovery, reset, and redeployment.
    In short, we devise our MILCON to maximize the readiness of 
the available force.
    The second SOF truth is that most special operations 
require non-SOF support. MILCON is no different. Most special 
operations units are tented units on Service-run installations.
    Our MILCON program is geared to support SOF capabilities, 
operations, maintenance, training, and storage, while we rely 
on the services to support service-common functions such as 
base operating support, family housing, dormitories, dining 
facilities, chapels, utility infrastructure, and facilities' 
sustainment, restoration, and modernization.
    The services have been exceptional partners both on and off 
the battlefield, and we appreciate their continued support.
    Ladies and gentlemen, our SOF warriors and their families 
have benefitted greatly from the support of this committee, the 
Congress, and the American public. It is our honor to 
demonstrate how we guard the trust they have placed in us.
    Thank you for your time, and I look forward to your 
questions.
    [The statement follows:]
          Prepared Statement of Major General Stephen A. Clark
    Chairman Kirk, Ranking Member Tester and distinguished members of 
the subcommittee, I am truly honored to appear before you as the 
Director of Force Structure, Requirements, Resources, and Strategic 
Assessment of United States Special Operations Command (USSOCOM). On 
behalf of General Votel and the entire Special Operations Forces (SOF) 
Community, we appreciate the opportunity to present our Military 
Construction (MILCON) Posture and thank you for your unwavering 
support. We will constantly strive to earn a high level of trust by 
maintaining an open and honest dialog and by remaining accountable 
stewards of U.S. tax dollars. I will describe USSOCOM's posture in the 
context of our Commander's Five SOF Priorities and provide a summary 
overview of our military construction program.
    USSOCOM synchronizes the planning of world-wide special operations 
and provides SOF to Geographic Combatant Commands (GCC) to support 
persistent, networked, and distributed operations to protect and 
advance our Nation's interests. SOF commanders and staff's plan and 
lead a full range of lethal and non-lethal special operations missions 
in complex and ambiguous environments. Also, SOF personnel serve as key 
members of joint, interagency, and international teams.
                          five sof priorities
    In order to strengthen SOF posture and capabilities, General Votel 
established five priorities for USSOCOM: These five priorities require 
facilities to meet the operational demands of the SOF warrior and our 
MILCON program supports these requirements:

  --Ensure SOF readiness by developing the right people, skills, and 
        capabilities to meet current and future requirements.
  --Help our Nation win in today's challenging environment and 
        contribute to keeping the nation safe.
  --Continue to build relationships with our partners through sustained 
        security cooperation, expanded communication architectures and 
        liaison activities.
  --Prepare for the future by investing in SOF that are able to win in 
        an increasingly complex world.
  --Preserve our force and families providing for their short- and 
        long-term well-being. People are our most important asset; 
        military, civilian and families.

    USSOCOM's MILCON program is appropriately sequenced and 
synchronized to support these five priorities.
                            milcon projects
    USSOCOM invests in MILCON to effectively support SOF operations, 
training, maintenance, and storage facility requirements. This 
concerted effort addresses MILCON requirements attributable to new 
capabilities and missions, force structure growth, and inherited 
antiquated infrastructure.
    USSOCOM evaluated 278 prioritized MILCON requirements, valued at 
more than $5 billion, as part of the annual review of its MILCON 
program. This includes 60 legacy requirements related to the 
recapitalization and modernization of facilities that pre-date the 
standup of USSOCOM. As a result of this evaluation, the Command 
selected 120 prioritized projects valued at $2.5 billion for inclusion 
in its fiscal year 2016 President's Budget Future Years Defense 
Program. USSOCOM remains committed to sustaining an appropriate level 
of MILCON investment in 2016 and beyond to address the critical 
infrastructure needs of SOF operators worldwide.
    In fiscal year 2016, the USSOCOM MILCON request is $504 million 
consisting of $457 million in major construction for 19 projects in 
seven States, one overseas location, and one unspecified Continental 
United States (CONUS) location, $32 million for planning and design; 
and $15 million for unspecified minor construction. The $457 million of 
major construction provides $315.4 million for operations facilities, 
$62.3 million for maintenance facilities, and $79 million for training 
facilities required to support the missions, objectives, and priorities 
of USSOCOM.
                                closing
    We look forward to working with Congress as we prepare our SOF 
operators for the complex situations they face on a daily basis. Your 
oversight, support, and partnership will ultimately help us provide 
better service to our Nation. Thank you for the opportunity to appear 
before you today and for your continued support of USSOCOM.

                         Missile Defense Agency

STATEMENT OF BRIGADIER GENERAL KENNETH E. TODOROV, 
            USAF, DEPUTY DIRECTOR
    General Todorov. Good morning, Chairman Kirk, Ranking 
Member Tester, distinguished members of the subcommittee. I am 
Brigadier General Ken Todorov. I am the Deputy Director at the 
Missile Defense Agency, and it is an honor to be here today to 
testify before you.
    The fiscal year 2016 missile defense program will continue 
to support the warfighter and needs of the Combatant Commands 
with the development and deployment of interceptors, sensors, 
and the command, control, battle management and communications 
systems for the Integrated Ballistic Missile Defense System.
    The Missile Defense Agency requests $169.15 million for 
military construction in fiscal year 2016. This request 
supports the construction of an Aegis Ashore Missile Defense 
System complex in Redzikowo, Poland, which is part of phase 3 
of the European Phased Adaptive Approach (EPAA). This site is 
on track to be operational by the end of calendar year 2018.
    The Aegis Ashore complex will be equipped with the next 
version of the Baseline 9 Weapon System, including BMD 5.1 
software, and have the capability to launch Standard Missile-3 
Block IA, IB, and IIAs. These upgrades will significantly 
increase our battle space to provide improved defensive 
coverage against medium and intermediate-range threats.
    In coordination with the United States European Command 
(EUCOM), we continue to have positive interactions with the 
Polish Government regarding the land use implementing 
arrangement and spectrum approvals, and anticipate agreement to 
meet the construction time line. Construction at Redzikowo is 
expected to begin in April 2016.
    Design of the entire Aegis Ashore Missile Defense complex 
is in the final stage of review and incorporates many lessons 
learned from experiences in constructing similar facilities in 
Romania.
    For example, we developed better designs for placing the 
HEMP shielding and HEMP electrical enclosures. Following the 
Department's Better Buying Power 3.0 Memo to achieve greater 
efficiency and productivity in defense spending, the Design-
Bid-Build project will include firm fixed price with incentive 
fee to promote better project schedule formulation and 
increased oversight of subcontractors, especially foreign 
companies less accustomed to working with the U.S. MILCON 
process.
    Based on lessons learned from Romania, the U.S. Army Corps 
of Engineers is also implementing a more robust management team 
to oversee the technical complexity associated with the 
construction to support the Aegis Ashore Weapon System.
    In accordance with the Department of Defense and Office of 
Management and Budget guidance, MDA is requesting this 
subcommittee provide full MILCON funding in fiscal year 2016 
for the Poland Aegis Ashore site. Full funding will provide a 
full commitment of resources for an on time project delivery of 
phase 3 of the European Phased Adaptive Approach by the end of 
2018.
    Mr. Chairman, the Aegis Ashore project in Poland and all of 
those that this committee has supported in the past, including 
the long range discriminating radar, have enormous strategic 
implications for the defense of our Nation and of our allies, 
friends, and partners.
    We are grateful for your continued support of these vital 
projects. I look forward to answering your questions today.
    [The statement follows:]
       Prepared Statement of Brigadier General Kenneth E. Todorov
    Chairman Kirk, Ranking Member Tester, distinguished members of the 
subcommittee, I appreciate this opportunity to testify before you 
today.
    The Missile Defense Agency is developing and deploying defenses for 
our Nation, forward-deployed forces, allies, and international partners 
against increasingly capable ballistic missiles. The fiscal year 2016 
missile defense program will continue to support the warfighter and 
needs of the combatant commands with the development and deployment of 
interceptors, sensors, and the command, control, battle management and 
communications system for the integrated Ballistic Missile Defense 
System. Our program plan for fiscal year 2016 will improve and expand 
homeland and regional missile defenses and invest in advanced 
technology development and future capabilities to counter the 
increasingly complex threat.
    The Missile Defense Agency requests $169.15 million for military 
construction in fiscal year 2016. MDA has five on-going military 
construction efforts supporting the deployment of Ballistic Missile 
Defense System assets.
    Working with our Japanese partners, the second AN/TPY-2 radar at 
Kyogomisaki, Japan was delivered for operational use in December 2014. 
MILCON efforts culminated in February 2015 to complete the support 
facilities. Together with the Shariki AN/TPY-2 radar in the north, the 
new radar will enhance the ability to defend our forward deployed 
forces, Japan, and the U.S. homeland from ballistic missile attack by 
providing improved tracking coverage for launches out of North Korea.
   construction of the ground based interceptor in-flight interceptor
    Communication System Data Terminal (IDT) complex at Fort Drum, New 
York is nearing completion and systems equipment is being installed and 
tested. The capability will give the United States an enhanced homeland 
defense capability. The east coast IDT will enable communication with 
GBIs launched from Fort Greely, Alaska and Vandenberg Air Force Base in 
California over longer distances and improve defenses for the eastern 
United States.
    We completed the 100 percent design of the Missile Field #1 
Mechanical Electrical Building at Fort Greely, Alaska. Construction is 
restarting this month after a winter hiatus. Construction of this High-
altitude Electro-Magnetic Pulse (HEMP) and blast protected building 
includes upgrading of utility lines supporting the missile silos, 
enhanced protection of associated utilities, and the upgrading of 
security infrastructure to protect System Security Level-A assets. The 
project, which supports the emplacement of an additional 14 Ground 
Based Interceptors at Fort Greely to provide a more robust home defense 
capability, is on track for completion by May 2016.
    In collaboration with the U.S. Air Force, we will continue missile 
defense upgrades of the Early Warning Radar in Clear, Alaska to enhance 
the homeland defense capability. Upgraded Early Warning Radars provide 
long-range early warning and precise threat missile tracking data to 
the Ballistic Missile Defense System. We expect to complete the Clear 
radar construction project in January 2016 and complete the radar 
equipment upgrades in 2017.
    Finally, we are on track to complete the construction of the Aegis 
Ashore site in Deveselu, Romania as part of Phase 2 of the European 
Phased Adaptive Approach (EPAA) in defense of our European NATO allies. 
Once the site is operational, it will include the upgraded Aegis 
Baseline 9 weapon system and will have the ability to launch both 
Standard Missile-3 Block IA and IB variants. The site will enhance a 
more robust regional ballistic missile defense against short- and 
medium-range ballistic missiles. Required military construction, 
installation, integration and testing activities will be complete for 
technical capability declaration in calendar year 2015. We are on track 
to turn over Aegis Ashore Romania to the Navy in August of this year.
    Our fiscal year 2016 military construction request supports the 
construction of the Aegis Ashore site in Poland. We will continue to 
support the defense of our deployed forces and NATO European allies 
through the construction of an Aegis Ashore Missile Defense System 
Complex in Redzikowo, Poland, which is part of EPAA Phase 3, and will 
be operational by the end of calendar year 2018. The Aegis Ashore 
complex will be equipped with the next version of the Baseline 9 Weapon 
System, including Ballistic Missile Defense (BMD) 5.1, and have the 
added capability to launch SM-3 Block IIAs. These upgrades will 
significantly increase our battle space to provide improved defensive 
coverage against medium- and intermediate-range threats. In 
coordination with EUCOM, we continue to have positive interactions with 
the Polish Government regarding the land use implementing arrangement 
and spectrum approvals, and anticipate agreement to meet the 
construction timeline. Construction at Redzikowo is expected to begin 
in April 2016.
    The Aegis Ashore deckhouse, which houses the weapon system, will be 
a duplication of the site in Romania. Design of the entire Aegis Ashore 
Missile Defense Complex is in the final stage of review and 
incorporates many lessons learned from experiences in constructing 
similar facilities in Romania. For example, we developed better designs 
for placing the HEMP shielding and HEMP electrical enclosures, which 
will better protect the site. Following the Department's Better Buying 
Power 3.0 memo to achieve greater efficiency and productivity in 
defense spending, the Design-Bid-Build project will include firm fixed 
price with incentive fee to promote better project schedule formulation 
and increased oversight of subcontractors, especially foreign companies 
not well versed in the U.S. MILCON process. The U.S. Army Corps of 
Engineers is also implementing a more robust management team to oversee 
the technical complexity associated with the construction to support 
the Aegis Ashore weapon system. In addition, MDA is requesting full 
funding in fiscal year 2016 to provide contract flexibility and full 
commitment of resources for on-time project delivery in Poland by the 
end of 2018.
    Thank you, Mr. Chairman. I look forward to answering the 
subcommittee's questions.

                         Defense Health Agency

STATEMENT OF JOSEPH B. MARSHALL, JR., SES, DIRECTOR, 
            BUSINESS SUPPORT DIRECTORATE
    Mr. Marshall. Good morning, Chairman Kirk, Ranking Member 
Tester, and distinguished members of the subcommittee. Thank 
you for the opportunity to present the President's budget 
request for fiscal year 2016 medical MILCON. I am Joe Marshall 
from the Defense Health Agency.
    The Defense Health Agency is fully committed to providing 
the facilities necessary to enable safe, reliable, responsive, 
and efficient healthcare in support of the Army, Air Force, and 
Navy Surgeon Generals.
    Our 2016 medical MILCON budget aligns with our national 
security and defense strategies and considers military health 
system, combatant commands, and service imperatives through a 
structured MILCON prioritization process.
    Our 2016 budget request of $678 million funds seven 
projects to include Rhine Ordnance Barracks Hospital 
replacement in Germany and the Fort Bliss Hospital replacement 
in Texas, both of these are key strategic healthcare delivery 
platforms supporting the services' warfighting requirements.
    We are targeting MILCON funds to support enduring readiness 
platforms, forward deployed missions supporting COCOMs, and 
optimization of healthcare delivery at installations state-side 
and overseas.
    We appreciate the subcommittee's continued commitment to 
the military health system and to the deserving men and women 
in our care. I look forward to answering your questions.
    [The statement follows:]
             Prepared Statement of Joseph B. Marshall, Jr.
    Chairman Kirk, Ranking Member Tester and distinguished members of 
the subcommittee, thank you for the opportunity to present and discuss 
medical military construction (MILCON) submission in the President's 
fiscal year 2016 budget request for the Department of Defense Medical 
MILCON program.
    I will focus on the fiscal year 2016 budget request in terms of 
strategic alignment, but also briefly discuss the European 
Infrastructure Consolidation effort and important projects already 
underway. This fiscal year 2016 budget request of $678 million is the 
lowest since fiscal year 2009 with the exception of fiscal year 2015. 
It funds seven projects, to include Rhine Ordnance Barracks Hospital 
Replacement, Germany and the Fort Bliss Hospital Replacement, Texas, 
both key strategic healthcare delivery platforms supporting the 
services warfighter requirements. We are targeting medical MILCON funds 
to support enduring readiness platforms; forward deployed missions 
supporting Combatant Commands (COCOMs), Asia-Pacific rebalance, and 
optimization of healthcare delivery market performance at enduring 
installations stateside and overseas.
                          strategic alignment
    Our fiscal year 2016 Medical MILCON budget request supports the 
2015 National Security Strategy, and the Military Health System 
Quadruple Aim of: increased readiness, better health, better care, at 
lower cost. We are committed to sustaining the medical readiness of our 
force, the clinical skills of our medics, and the world-class treatment 
and rehabilitation for those who fight our Nation's battles today, 
yesterday and tomorrow, along with their families. This budget request 
also supports our Military Health System strategy to enhance DOD and 
our Nation's security by providing health support for the full range of 
military operations and maximizing the health of all those entrusted to 
our care. This strategic guidance is paramount during our annual 
prioritization of MILCON requirements through a structured Capital 
Investment Decision Making process that considers COCOM and Service 
requirements from an enterprise perspective.
                    fiscal year 2016 budget request
    The fiscal year 2016 budget request includes $673 million for seven 
projects to upgrade our military treatment facilities. They include 
$124 million for a behavioral health/dental clinic addition at 
Schofield Barracks, Hawaii (COCOM/optimize market performance/Asia-
Pacific rebalance); $122 million for replacement of a medical/dental 
clinic at Marine Corps Air Station Kaneohe Bay, Hawaii (COCOM/optimize 
market performance/Asia-Pacific rebalance); $85 million for the fifth 
increment of the Rhine Ordnance Barracks Hospital Replacement, Germany 
(strategic treatment/evacuation hub supporting U.S. European Command 
(USEUCOM), U.S. Central Command (USCENTCOM), U.S. Africa Command 
(USAFRICOM) and U.S. Special Operations Command (USSOCOM)); $239 
million for the seventh, and last increment of the Fort Bliss Hospital 
Replacement, Texas (enduring power projection/readiness platform); $62 
million for the fourth phase of the Ambulatory Care Center at Joint 
Base San Antonio, Texas (eliminate obsolete excess square footage); $34 
million for the medical/dental Clinic addition at Spangdahlem Air Base, 
Germany (COCOM, supports force structure realignment due to closure of 
Bitburg); and $7 million for the replacement of the Satellite Pharmacy 
at Wright-Paterson AFB, Ohio (optimize market performance).
    These projects are crucial to ensuring we can deliver the quality 
healthcare our service members and their families deserve when 
stationed stateside and during overseas deployments.
                 european infrastructure consolidation
    Over the last 2 years, the Department conducted a comprehensive 
review of the infrastructure requirements necessary to support U.S. 
forces and their missions in and around Europe. While this European 
Infrastructure Consolidation effort resulted in 26 recommendations that 
will result in more than $500 million in annual recurring savings once 
all actions are fully implemented, the medical infrastructure in the 
USEUCOM theater remained mostly unchanged due to the need to maintain 
current inpatient services to support service missions and to provide a 
U.S. standard of care to assigned servicemembers and their families. 
This analysis further solidified Kaiserslautern Military Community as 
an enduring hub and the long term critical need for the Rhine Ordnance 
Barracks Medical Center Replacement project as long as potential 
conflicts in USEUCOM, USCENTCOM, USAFRICOM or USSOCOM areas of 
operation remain. We thank Congress for their continued support of this 
important strategic requirement.
                    important projects in the works
    The Department is fortunate to have benefitted from continued 
support from Congress for military medical construction over the last 8 
years. Over 50 projects are currently under construction ($6 billion), 
to include major replacement facilities at Ft. Hood, Texas; Ft. Bliss, 
Texas; Ft. Riley, Kansas; Rhine Ordnance Barracks, Germany; USARMIID, 
Ft. Detrick, Maryland; and Institute of Chemical Defense, Aberdeen, 
Maryland. Completed hospitals include Ft. Benning, Georgia; Camp 
Pendleton, California; Ft. Belvoir, Virginia; and Guam. The Military 
Health System has also benefitted from a strong collaborative 
relationship with its Design/Construction agents (U.S. Army Corps of 
Engineers and Navy Naval Facilities Engineering Command), which has 
resulted in over 90 percent of projects being completed within cost.
                               conclusion
    Thank you for the opportunity to present the fiscal year 2016 
budget request for the medical MILCON program. As I have outlined 
above, our request is lower than in the years prior to the Budget 
Control Act limitations but still allows us to address urgent 
requirements. We are focused on providing infrastructure to support an 
integrated world-class Military Health Care system that is safe, 
reliable, responsive, and efficient. We appreciate Congress' continued 
support for our enterprise and look forward to working with you as you 
consider the fiscal year 2016 budget.

    Senator Kirk. Mr. Marshall, let me begin by asking a 
question, that you have a very different philosophy and 
corporate culture in building hospitals than the VA. This 
subcommittee is really wrestling with the incredible overrun at 
the Denver VA Hospital.
    Is there something the taxpayer could get, the overlap 
between how you build a defense medical facility? I wonder if 
we could have you act as a consultant to the VA? Would you be 
open to that?
    Mr. Marshall. Yes, Mr. Chairman, we would be happy to help 
in any way possible on that. I can tell you again we are not 
familiar with our VA colleagues' challenges, we are familiar 
with our own challenges. We consider medical MILCON as a shared 
service. We are full partners with the services in figuring out 
how do we structure the medical MILCON going forward.
    We take a very serious and hard look at our facilities on 
an ongoing basis so that when they require replacement, we are 
aware of that, and we have a planning horizon for those 
projects coming up. We then do some detailed analysis of the 
market to see what DOD should be doing in that market, whatever 
the DOD needs for readiness and so forth, and then we structure 
that into our planning effort.
    We prioritize these projects because we know there is never 
enough money to build all the things that we would like. We 
then prioritize those through our leadership so we have full 
engagement, considering operational requirements and needs, and 
then we become heavy partners with our construction agents in 
the U.S. Army Corps of Engineers and the Naval Facilities 
Command, and we work carefully and closely with them as we 
structure these projects so we do not have missteps or 
misalignments, which as we all know can occur in construction.
    We then follow this project carefully through execution, 
watching the change orders, managing carefully. Again, we take 
seriously our responsibility from the Congress to manage to the 
budget totals and to manage to the schedule.
    As we all know, things occur in those realms, so management 
is actively required. We work these projects to conclusion and 
into transition and into service, and we do this on a 
continuing basis. It is a cradle-to-grave approach for us.
    We would be delighted to help our VA colleagues in any way.
    Senator Kirk. Mr. Tester, I think we may have to look at 
the subcommittee possibly mandating that mission to address the 
Denver problem. As I understand, the Denver problem was the 
medical staff got to put in change orders in the construction, 
which I understand DHA does not allow, that you have 
experienced construction people who just manage it and lock 
down the change order process, which could lead to incredible 
overruns.
    We may need to consider you having some oversight for the 
VA construction process. I think that would be more competently 
run.
    Mr. Marshall. Yes, Mr. Chairman. Thank you for the 
question. You certainly cannot build hospitals without input 
from clinicians, so there is certainly a time in the process 
you want that input, you need that input. We find you structure 
that early on, but then you have to structure any such 
subsequent changes in the process so you keep control over 
costs and schedule. But again, glad to help, Mr. Chairman.

                             MDA--REDZIKOWO

    Senator Kirk. Thank you. General Todorov, on Redzikowo, it 
is my top priority for this subcommittee. I have one question 
for you. If President Putin calls and orders our President to 
pull the plug on this project in Poland, what would you do?
    General Todorov. Mr. Chairman, I can tell you it is a top 
priority, Redzikowo, for the Missile Defense Agency as well. I 
think this project will go a long way to maintaining our 
commitments to our friends and partners in the region and 
defending all of Europe and NATO from principally a ballistic 
missile threat, frankly, a robust ballistic missile threat from 
Iran.
    The Iranians have the most robust arsenals of short and 
middle range missiles that threaten the continent. We see the 
Redzikowo project as integral to maintaining defense of the 
region and our commitments to our friends and allies in the 
world.
    Sir, I would assure you that this project is of the utmost 
importance to the Missile Defense Agency.
    Senator Kirk. Do you not need the Standard Missile-2 Bravo 
to reach an Iranian projectile that is potentially on a flight 
path towards New York at that altitude?
    General Todorov. Sir, the site in Poland will be equipped, 
as I mentioned, with the 1 Alpha, 1 Bravo, and 2 Alpha 
missiles. We see it really as a regional defense system and not 
having a capability to defend our U.S. homeland. Of course, we 
have the Ground-Based Midcourse Defense System in place, which 
is another large initiative that we are focused on that defends 
our homeland from an intercontinental ballistic missile threat.
    Senator Kirk. Thank you.
    General Todorov. Yes, sir.
    Senator Kirk. Mr. Tester for questions.
    Senator Tester. Thank you, Mr. Chairman. I am going to 
follow up on the chairman's questions with you, Mr. Marshall, 
very quickly. You are building two world-class facilities, one 
in Fort Bliss and the other, Rhine Ordnance Barracks in 
Germany. We are going to leave the Germany one aside because 
there are different challenges there.
    How long have you been working on the hospital in Fort 
Bliss? Since when, 2012?
    Mr. Marshall. Yes, sir.
    Senator Tester. Do you have the number originally what that 
hospital would cost, what it was originally projected at?
    Mr. Marshall. I have a current number of $907 million 
total.
    Senator Tester. Has that figure changed from 2012?
    Mr. Marshall. I cannot say. I can take that for the record, 
if you would like.
    Senator Tester. I would love to get it. It is not to hang 
you guys out. I just want to find out if you typically start 
with one number and end up with another number.
    [The information follows:]

    The Fort Bliss hospital replacement project was originally 
estimated to cost $966,000,000 in February 2010, at the time of the 
fiscal year 2011 President's budget submission. The current estimate to 
complete construction of this project is $906,570,000. Hospital 
construction is scheduled to complete in May 2017, 4 years after 
contract award.

    Senator Tester. At what percent of design do you award a 
contract?
    Mr. Marshall. Usually, that is 35 percent, sir.
    Senator Tester. Thirty percent design, you award the 
contract. Following up on what Senator Kirk said, you take in 
the medical professionals' advice early on in design, and they 
are not allowed to do change orders; is that correct?
    Mr. Marshall. We are not insensitive to change but we try 
to manage that input so that it does not become disruptive with 
either costs or schedule.
    Senator Tester. Okay. How do you mitigate cost overruns?
    Mr. Marshall. We track the cost performance, we follow that 
closely. Again, we have a track history over time of how 
projects have executed in new construction. If we see a project 
that is coming on in terms of costs that is hot and heavy, if 
you will, then we engage in an active discussion or proactive 
discussion to say what is going on here and what is driving 
this.
    Senator Tester. A lot of the time, cost overruns are 
created by change orders. How do you handle change orders?
    Mr. Marshall. We have a process on the ground of managing 
the change orders. We have a product delivery team, a manager 
on-site and customer representatives, so we have an active 
dialogue about those change orders.
    Senator Tester. Who is building this hospital? Is it 
somebody from the private sector or is it RED HORSE? Who is 
doing it? Is it the Army Corps of Engineers?
    Mr. Marshall. It is the Corps of Engineers, sir.
    Senator Tester. You have a standardized process when it 
comes to building hospitals in the United States?
    Mr. Marshall. We have a standardized process for working 
the prioritization of those projects, our construction agents 
have a pretty thorough process for how they go about building 
the hospitals.
    Senator Tester. Good. If you could get back to me on what 
the original cost projections were and where you are at right 
now in 2015 for Fort Bliss.
    Mr. Marshall. Yes, sir.
    [The information follows:]

    The Fort Bliss hospital replacement project was originally 
estimated to cost $966,000,000 in February 2010, at the time of the 
fiscal year 2011 President's budget submission. The current estimate to 
complete construction of this project is $906,570,000. Hospital 
construction is scheduled to complete in May 2017, 4 years after 
contract award.

    Senator Tester. That would be great if you could. This is a 
question for the entire panel. I think a concern for all of us 
who serve on this subcommittee is to make sure that we meet 
your needs and we are not wasting money.
    I would hope that was also what you were looking at, making 
sure we do what we need to, make sure we are taking care of 
things in the short and long term, because of a number of 
things, sequestration and other things, we do not want to waste 
any money.
    Could you briefly discuss, with emphasis on briefly, how 
the projects within this fiscal year 2016 budget contribute to 
what you want to accomplish? Your enduring mission 
requirements, your broader strategic aims. We will just go left 
to right, starting with you, General Todorov.

                   HOW PROJECTS CONTRIBUTE TO MISSION

    General Todorov. Sir, as stated, the project in Redzikowo, 
Poland is integral to the defense of our interests, not only in 
the region but I would say globally.
    It follows closely on the heels of a very similar project 
that we are completing now in Romania.
    Senator Tester. Are they patterned after one another?
    General Todorov. Yes, sir. Absolutely, they are. To your 
point on efficiency and making sure we are spending these 
precious resources appropriately, I would say we have learned a 
lot of lessons from the work we have done----
    Senator Tester. In Romania.
    General Todorov. In Romania; yes, sir. We are on track to 
deliver that capability, EPAA phase 2 in Romania, by this 
calendar year. That is when we stated we were going to do it.
    Senator Tester. It will be operational by the end of this 
year?
    General Todorov. Yes, sir. We will deliver that capability 
by the end of this year. We have learned an awful lot from that 
initiative in Romania that we are then going to translate to 
the project in Poland. I think we are confident that we will be 
even more efficient with the construction in Redzikowo.
    Again, to your point, this project has enormous strategic 
impact for the Nation.
    Senator Tester. Yes, I got you. No disagreement here. I 
just think we need to make sure we are pinching every penny we 
can but doing it right.
    General Todorov. We agree.
    Senator Tester. General Clark.
    General Clark. Yes, sir. We have allocated an annual level 
of effort of about $500 million each year of the future years 
defense plan (FYDP). That comes out of our baseline dollars. 
Internal to that, we have taken about 280 projects which are 
derived from commander requirements, so our component 
commanders put in their requirements based upon either a new 
mission, for structure growth, or recapitalization of older 
facilities that we inherited when SOCOM stood up.
    Under those 280, we have been able to place about 120 into 
the FYDP, 19 of which are in fiscal year 2016. What I would 
offer is 100 percent of those projects, every one of those goes 
into readiness of the force, and the focus is principally to 
co-locate facilities better, to maximize operational training 
time and operational planning time. Those are spread across all 
of the components.
    Senator Tester. Okay. Thank you. Quickly, Major General 
Dana.
    General Dana. Sir, if I could, just real quick. I had my 
team look at force posture in the Pacific in the 1980s on 
194,000 personnel with a concentration in Northeast Asia, fixed 
bases in Korea, Japan, Philippines, Alaska, and Hawaii.
    Where we are going now at PACOM, sir, is not bases but 
access to places. As we look at that infrastructure, what I 
call the older bases that need modernization and upkeep, and as 
you look at this year, we have nine projects in Hawaii, 
barracks and things like that that need to be rejuvenated, 
eight in Guam, same conditions, seven in Japan, three in 
Alaska, one in California, Maco Pier, critical for things we 
would need in a fight.
    The good news story this year, sir, is these investments 
are set in conditions to modernize our bases, allow us to 
project power, and then later as we are shifting to Australia, 
the Philippines, and other areas where we can get areas to 
train and work with allies and partners.
    Senator Tester. Got you. Joe.
    Mr. Marshall. Yes, sir. The environment is very important 
as well as having facilities that match the changes in medical 
practice and technology. Schofield Barracks has seen a 24-
percent increase in the number of encounters they had with 
patients. They cannot handle the load. They are pressurizing 
Tripler down the road. We have to keep some balance in the 
system and upgrade Schofield Barracks.
    At Kaneohe Bay in Hawaii, the current facility is over 60 
years old. It is not meeting Marine Corps' readiness 
requirements. Pulling that into the 21st Century is key.
    Rhine Ordnance Barracks remains a strategic hub, and has 
seen tremendous service in the last dozen years, as you well 
know. Fort Bliss is 40-percent undersized and 40 years old. 
They have seen a 100-percent increase in their enrollment since 
2003, so they cannot handle the load. That is why Fort Bliss is 
one of the projects.
    We are finishing up a project in San Antonio for an 
ambulatory care center, so we need to eliminate some obsolete 
square footage and demolish the old hospital down there.
    Senator Tester. Okay.
    Mr. Marshall. There is a project in Germany at Spandahlem, 
the Bitburg closure, as you are aware, has forced some folks 
onto Spandahlem. There are folks working out of old 
dormitories, not a great patient care environment.
    Wright-Patterson has a satellite pharmacy that is 50 
percent too small for their workload and cannot handle changes 
in robotics for pharmacies.
    Senator Tester. Okay. Thank you, all. We will get to 
another round. Thank you for your flexibility, Mr. Chairman.
    Senator Murkowski. Mr. Chairman.
    Senator Kirk. Ms. Murkowski, go ahead.
    Senator Murkowski. Thank you, Mr. Chairman. Gentlemen, 
thank you for your leadership on many issues. I would like to 
start my comments this morning with you, General Dana, relating 
to Guam.
    The President is looking at a $104 million increase for 
Guam. I think we have seen the issue of Guam and the build up 
discussed here in this subcommittee over the years, and it 
seems like it wans, it comes and goes in terms of that level of 
support.
    I think it is important to note there are a number of think 
tanks out there that believe pretty strongly it is time we put 
our money where our mouth is here when it comes to the Pacific 
build up, and that Guam is the place to do just that.
    It is interesting to note that in Alaska we have a very 
sizeable handful of contractors who have figured out how to 
make things happen in places that are remote and high cost, and 
have looked to Guam to be of assistance in that regard.
    In PACOM's judgment, should the committee be less skeptical 
than we have been in past years about the projects in Guam? 
Speak to the justification here for the President's increase by 
$104 million for fiscal year 2016.
    General Dana. Yes, ma'am. I would like to preface my 
comments by saying I have trained in Alaska and really enjoyed 
it.
    Senator Murkowski. Come back any time.
    General Dana. Thank you. Guam is critical to the rebalance, 
ma'am. I will give you some reasons why. As we look at the 
geography of the Pacific, I read a book by General Holcomb who 
was a Commandant back in the 1930s, and the one area he focused 
on was Guam because of its central location in the Pacific. 
When I say central, central to crisis and conflict response, 
3,952 miles west of Hawaii.
    This build up on Guam will allow us to get down to 11,000 
marines in Okinawa, and it is not about the numbers reducing, 
it is more about dispersal of forces. As you look at the anti-
access area, the area denial threat, what we want to do with 
U.S. forces is have resilient forces and have dispersed forces.
    This Guam initiative, and I was just in Guam three weeks 
ago, ma'am, I met with Governor Calvo, and they are all in. As 
you know, the Marine Corps, and I am wearing this uniform, 
there was some pain to that master plan, but I can say with 
confidence--I just took Senator Sullivan around--our numbers 
are good, our requirements are solid, and we know where we are 
going.
    In terms of Guam, what an incredible location, with Apra 
Harbor. Two weeks ago, 16 naval ships, U.S. and Japanese, were 
operating out of there. Anderson Airfield construction, going 
for an air and passenger terminal. Hangars, which are much 
needed. Fuel lines, hardening those also. All these things are 
moving together very nicely and gives us an absolutely critical 
hub.
    Guam is not as expensive as other areas. I got that 
question earlier from a different senator in a meeting earlier 
today. It is just when we look at the Pacific, we want 
resilient and dispersed forces, and we want the ability to 
aggregate forces for crisis and conflict and engage with our 
allies and partners.
    Alaska, we do not want to see the brigade combat teams 
(BCTs) go. Hawaii, we are going to plus them up by 2,700 
marines by 2028. The presence in Guam with 5,000 marines plus 
our air and able forces there.
    Access from Guam, we can radiate out the enhanced defense 
cooperative agreement with the Philippines. We are looking at 
various locations for training and interoperability. The 
Marines' rotational force in Australia soon to be a couple of 
years from now 2,500 and 1,170 right now, plus the Air Force 
rotational presence at Darwin and Tindal.
    This allows us to literally navigate through the entire 
Pacific in the air and maritime domain to make allies and 
partners know that we are there and we are there to stay. Thank 
you.
    Senator Murkowski. Good. You sound very bullish on where we 
are with Guam and what that future holds, as we really build 
out that operational capacity in the Pacific.
    General Dana. I can say from one on one interface with 
Governor Calvo and working this for the past 18 months, ma'am, 
I am very optimistic about Guam. At CNMI, we do have some 
challenges that we are working through, but we are going to get 
there. I spend more time in Guam than I do home.
    Senator Murkowski. I appreciate your efforts on that. In my 
time remaining, I would like to move over to North Korea. We 
were all fixated here these past couple of weeks and focused on 
what is going on with the Iran negotiations. We are also in 
Alaska very keenly aware of our proximity to North Korea.
    Last week, Admiral Gortney suggested that North Korea has 
an operational road mobile missile that can carry nuclear 
weapons to the United States, and then on Friday, the Commander 
of the United States forces in Korea said he thinks North Korea 
is capable of producing a miniaturized nuclear device, which of 
course, is a necessary step towards a nuclear missile 
capability.
    You are sitting there with North Korea in your area of 
responsibility, General Dana, in PACOM. What do you think North 
Korea is up to, and based on what we are seeing, is there 
discussion or assessment about when North Korea would have 
nuclear capability that could land in Alaska? That is what we 
worry about.
    General Dana. Yes, ma'am. I think the intelligence 
community is working through that. What I would say is as we 
look at the entire region, 36 countries, and all the challenges 
we have, we break things down into most dangerous and most 
likely scenarios. For the Peninsula, that is the most 
dangerous, and the weapon systems he could potentially bring to 
bear are a concern.
    I will say in this setting my number one from my boss, the 
number one priority, is working on the family of plans that 
deals with any crisis or contingency on the Peninsula.
    He has told me my two main efforts are force posture, so I 
spent a lot of time in Guam, and tomorrow I am doing defense 
tri-lateral talks with the Japanese and Koreans, with United 
States forces Korea, and that is our number one priority.
    In a different setting, in a closed setting, I could go 
into more detail, but I will take your question for the record, 
ma'am, and complete it.
    Senator Murkowski. I appreciate that. To my chairman, these 
are issues that we have had many, many discussions about. 
General Todorov, I would ask you from the missile defense 
perspective, MDA is obviously responsible for developing and 
fielding the technology to not only protect Alaska but North 
America.
    Based on what we heard last week, are we where we need to 
be in terms of response, or do we need to step up our game 
here? Does the President's budget give us what we need given 
what we are seeing and what we are hearing out of North Korea, 
do we need to be more aggressive here?
    General Todorov. Senator, thanks for that question. It is 
an important topic for the Missile Defense Agency to be sure. 
We are where we need to be today to counter that threat. I 
think the warfighter would say that he has--Admiral Gortney has 
confidence in the Ground-Based Midcourse Defense System today 
to deal with the threat.
    Senator Murkowski. What about tomorrow?
    General Todorov. The threat, we see it evolving, and there 
are many things that are on our plate to continue to outpace 
that threat. Central to all that work frankly, is the long-
range discriminating radar that is part of the budget, part of 
the program in the out-years.
    That speaks really to the two most important things we see 
to continue to outpace that threat you referenced. That is the 
reliability of our Ground-Based Midcourse Defense System, the 
interceptors, the RKV, the ground systems, and frankly the need 
to discriminate an increasingly complex threat that has 
countermeasures, levels of sophistication we have not seen 
before.
    That is the direction we are anticipating the threat to go. 
The program that we have in place, I think, will continue to 
allow us to outpace that threat.
    Senator Murkowski. Do we need to step it up on LRDR?
    General Todorov. Senator, I am sorry.
    Senator Murkowski. Do we need to accelerate where we are 
with the long range discrimination radar?
    General Todorov. I think the program we have in place and 
the time line we have in place is sufficient to deal with the 
threat as the intelligence community continues to inform our 
work. We intend to award that contract some time this year, 
with sort of an initial capability, lights on, if you will, in 
the 2020 timeframe.
    In the interim, we have the BMDS capable of handling the 
threat to include things like the sea-based X-band radar, the 
SBX, to include a new radar in Japan, which this committee 
supported and will go a long way to defending our homeland.
    Senator, I would say we think the program in place is 
sufficient, and we have a plan to deal with the threat as it 
evolves.
    Senator Murkowski. I appreciate that, but know this is 
something that we are watching very, very intently. Again, 
there are a lot of signals out there that make us a little bit 
nervous, and some of us perhaps a little more nervous than 
others. We do not want to lose focus of this important 
deterrent.
    Thank you, Mr. Chairman.
    Senator Kirk. Mr. Tester.

                             BURDEN SHARING

    Senator Tester. Thank you, Mr. Chairman. I want to go to 
you, General Dana. In your opening statement, you talked about 
what is going on with Korea and Japan and their contributions 
to the relocation efforts. Of course, we appreciate that.
    I guess the question I have is up to this point, are they 
living up to their end of the agreement?
    General Dana. Sir, they absolutely are in every facet. I 
would say especially in Guam, we actually were a little slow to 
start using those funds to abrogate them towards different 
projects. I am basing this again on 18 months of engagement and 
several trips to each one of those countries and high level 
talks, they are all in, sir.
    Senator Tester. That is good. As plans for the Pacific 
continue to take shape, efforts are underway to seek additional 
cost sharing agreements with our allies--this is a question--
are efforts underway to seek additional cost sharing agreements 
with our allies in order to equitably share the burden?
    General Dana. Yes, sir; they are. I will start with 
Australia. We have the Marines' rotational force at Darwin, and 
we also have the Air Force rotational presence that will be 
there. OSD, the Office of the Secretary of Defense, has done a 
very good job of talks at their level with their counterparts 
in Australia for cost sharing, co-use, construction stance.
    Senator Tester. Who else?
    General Dana. Next, sir, would be the Philippines, with the 
Enhanced Defense Cooperative Agreement (EDCA), looking up to 24 
different locations, really focused on three right now.
    Senator Tester. The Philippines and Australia, have those 
agreements been signed/ratified, whatever you do?
    General Dana. Yes. The Australia agreement, we are 
expecting a signature for some of the fine print I just talked 
about in June, sir. With the EDCAs before the Supreme Court of 
the Philippines, looking for adjudication of that some time 
between June and September.
    Senator Tester. Are there any other countries you are 
working with?
    General Dana. Informally at the Mil-to-Mil level, we are 
spending a lot of time in Singapore, Malaysia. Singapore has 
the littoral combat ships (LCS). We have fighters that rotate 
through there.
    Senator Tester. Good. Could I just ask for a white paper of 
what is in those agreements once they get done so we know? Is 
that a possibility? Can you do that?
    General Dana. Yes, sir. I will talk to the Office of the 
Secretary of Defense to make sure we can get that to you.
    [The information follows:]

    Once our scope of initiatives, consultative, and cost sharing 
implementing arrangements are concluded, OSD would be happy to provide 
you an overview on our way forward with Australia. Similarly, if the 
Philippines Supreme Court upholds the Enhanced Defense Cooperation 
Agreement (EDCA) and our rotational presence plans are finalized, OSD 
will provide an overview of our way forward with the Philippines.

                                OKINAWA

    Senator Tester. That would be good. It is my understanding 
that last month the Governor of Okinawa, and you talked a 
little bit about challenges in Okinawa, sought to suspend work 
on a military airfield in Camp Schwab, and handily won re-
election in November on a promise to block expansion of Camp 
Schwab to accommodate that airfield.
    Can you give me an update on the current status of the 
construction efforts there, and do you expect them to proceed 
in accordance with reassurances from Tokyo?
    General Dana. Sir, I would like to start with that. The 
good news is that Prime Minister Abe and the Central Government 
in Japan are putting a lot of pressure. They are all in. The 
Governor, he has been fighting it. There are protesters. 
Construction is moving forward, not at the pace we would like, 
but we are still on track.
    Sir, for the rotation and what I call the rebalance, we are 
not going to move out of Futenma until the facility is built. 
We have already moved some forces, C130s moved up to Iwakuni 
out of Futenma, so we are operating there until we get the 
replacement facility. It is critical to the rebalance.

                             SOCOM AND BRAC

    Senator Tester. Okay. General Clark, the MILCON request is 
a 21-percent increase over fiscal year 2015, a 21-percent 
increase, that is pretty healthy. I guess the question I have--
your presentation was very good on why you are doing what you 
are doing and what the money is going to be utilized for and 
what your long term vision is.
    I guess the question I have is is the timing right for 
SOCOM to program so much MILCON while concurrently we have the 
Department of Defense calling for another base realignment and 
closure (BRAC) round?
    General Clark. Yes, sir. The delta you see from the enacted 
numbers in 2015 to what we are requesting in 2016, there are a 
couple of pieces to that, and those were some marks that were 
against the program for Preservation of the Force and Family 
that we are working together on with OSD to get some responses 
back to the Congress on with those projects.
    There is also some MILCON that is related to the Pacific 
that we had moved because of waiting on a grant from the 
Japanese Government that has moved from 2015 and now there is a 
portion in 2016 where the runway is done in Kadena and also a 
larger chunk that goes into 2017.
    What we are trying to balance is the increase in force 
structure that we received in 2006 and 2010 from the 
Quadrennial Defense Review (QDR), our force structure has 
increased from 45,000 to 70,000, so taking on those additional 
persons, we had to find places and facilities for them. They 
are currently disaggregated out across the installations they 
are on, they are undersized facilities.
    Yes, we think it is absolutely important that we bring 
those together so we can create a greater operational capacity, 
if we are leveled off at that amount.
    We do believe that we have settled on about a level of 
effort that we would like to achieve of $500 million a year, 
and as we finish off the force structure increase, bringing on 
those facilities, you will start to see a taper come in in 
about fiscal year 2019.
    Senator Tester. How about as it applies to BRAC? As we 
approach potentially another round of BRAC, is that taken into 
consideration when you are talking about your construction?
    General Clark. Sir, not knowing where BRAC will take place, 
the facilities we tend to be on, I do not think those are 
really hard looked at from a risk perspective.
    Senator Tester. At risk; okay. That is what I need to know. 
Thank you. Thank you, Mr. Chairman.
    Senator Kirk. Let me follow up and ask General Clark, I 
could not get a good handle around your expansion of the Bragg 
facility. What does that give the Nation? Can you summarize the 
military capability that you get from the expansion of Bragg?
    General Clark. Senator, if I could ask for a clarification, 
BRAC facility?
    Senator Kirk. Bragg.
    General Clark. Bragg. I apologize, sir. I just had my 50th 
birthday here. I am getting a little hard of hearing.
    Senator Kirk. You see a lot of cubicles and a lot of 
computers. What does it give SOCOM as a capability enhancer?
    General Clark. Yes, sir. Bragg is the home of both the U.S. 
Army Special Operations Command and also Joint Special 
Operations Command.
    Senator Kirk. I was hoping you would tell me the delta, 
what can you do extra with this added facility?
    General Clark. Sir, with the added facility, it is really 
about consolidation of facilities. When we talk about units 
that spend an hour a day per person traveling to and from 
ranges or getting weathered out from ranges, those are some of 
the principal things we are taking a look at. Also, the 
disaggregation across the Fort Bragg installation.
    It is really about time and capacity and capability. I do 
not have an exact figure that I can say----
    Senator Kirk. We are finally getting guys in the same 
building.
    General Clark. Yes, sir, and we are getting them in 
facilities that are sized for what functions we are asking them 
to do. This is a human endeavor, so people's ability to sit 
down and talk to each other face-to-face and to plan and go out 
and train and execute.
    When we are spending say 30 percent of the day doing the 
planning and another 30 percent doing the training and the 
refit, every hour that you can save in that day maximizes their 
opportunity to be ready to go down range, which they are 
principally on an one-to-one dwell, we are trying to get them 
to an one to two dwell. They have been running at this for 
about 13 years, sir.
    Senator Kirk. I was hoping you were going to say they could 
have the total quad of situational awareness and a complex 
evolution of a SOCOM operation.
    General Dana, talk to me about Marines Special Operations 
at Pendleton.
    General Dana. Sir, I have been away from the Marine Corps 
for 18 months. I am sorry. I could not talk to you about that. 
I will take that for the record. Hopefully, I will be back to 
the Marines Corps soon and will be able to talk to you about 
that.
    [The information follows:]

    To date, there have been seven (7) completed MILCON projects at 
Camp Pendleton. They are:

  --Headquarters building for 1st MSOB and 1st MSOSB
  --BEQ and messhall
  --Warehouse and Supply facility
  --Paraloft
  --Academic Facility
  --Supporting facilities (Motor Transport, Armory, etc.)
  --Multi-Purpose Canine kennels/facility

    There is currently one project under construction scheduled to be 
completed in late fiscal year 2015/early fiscal year 2016.

  --Range 130 support facilities (shoothouse, range and head/shower)

    One project is in its final design phase and will be awarded for 
construction before the end of fiscal year 2015.

  --Communication-Electronics Maintenance Facility

    Two fiscal year 2016 projects are currently in design and are 
included in USSOCOM's fiscal year 2016 Budget Submission.

  --Combat Service Support facilities
  --Performance Resiliency Training Center

    There are three remaining projects, two in fiscal year 2018 and one 
in fiscal year 2019. The fiscal year 2018/2019 projects are programmed 
in USSOCOM's POM-16 Submission.

  --(Fiscal Year 2018) Company/Team facilities
  --(Fiscal Year 2018) Motor Transport facility expansion
  --(Fiscal Year 2019) Explosive Ordnance Disposal facility

    Upon completion of the fiscal year 2019 project in fiscal year 
2021, a total of 14 MILCON projects will have been completed for MARSOC 
units at Camp Pendleton, California and all known MILCON requirements 
satisfied.

    Senator Kirk. As a Navy guy, I would like to say this to 
all my Marine Corps' friends, thank you for your support for 
the Department of the Navy. You are going to say Defense 
Department, you are part of the Defense Department.
    General Dana. I know who my boss is, sir.

                   MARINE SPECIAL OPERATIONS REGIMENT

    Senator Kirk. Yes. General Clark, tell me about the Marine 
Special Operations Regiment (MARSOC) facility.
    General Clark. Yes, sir. MARSOC is our newest component. We 
have them both on the west coast and also the east coast, at 
Pendleton and down at Lejeune. These are units that are 
continuing to grow. We are bringing on their operational 
battalions and then principally right now in 2016 support 
battalions.
    Again, we are creating two campuses, one on the west coast 
and one on the east coast, at Stone Bay, and trying to 
consolidate them inside their own compound where security is 
that they control, but then also just like we have discussed 
with Bragg, so they can maximize the utilization of the 
facilities they have and increase their combat power.
    We are about halfway through consolidating those compounds. 
If you go down to Lejeune, you will see a fairly significant 
construction going on at Stone Bay. I was down there just a 
couple of weeks ago to see what was going on. It is coming 
along rather nicely, sir. We believe we are on schedule.
    Senator Kirk. Thank you.

                             INCENTIVE FEES

    Senator Tester. I believe, General Todorov, you talked 
about incentive fees? No?
    General Todorov. Sir, referring to sort of some of the 
lessons learned again from Romania that we would structure 
perhaps some of the contract vehicles going forward a little 
differently.
    Senator Kirk. He is going to ask you about the problems he 
had in the high-altitude electromagnetic pulse (HEMP) structure 
in Romania, what key lessons did you learn from that 
construction?
    General Todorov. Yes, sir. I would lump them into three 
broad categories for lessons learned. The HEMP facilities that 
you mentioned, frankly the facilities were built too small for 
the electronic equipment that was going to go inside them. 
There are 24 small Conex box type facilities that harden all 
the sophisticated electronic gear that supports the facility.
    That was frankly on us perhaps, and the Corps of Engineers 
did not structure that contract appropriately. We have since 
learned that lesson. I think we will do it differently for 
Poland. We will not have that problem.
    The other ones really have to do with sort of 
synchronization of the schedule. Again, this is the first time 
we have built a facility like this overseas. We learned a lot 
about the timing of everything, synchronizing everything, so 
that when the contractor was done building a pad, for instance, 
another was ready to come in and put the equipment on top of 
it.
    We are a lot smarter about that. The third broad category, 
sir, I would just say it is in such a remote location, I like 
to say there is not a Home Depot nearby to go out and get parts 
and supplies, so we really learned a lot about the lead time 
required for logistics and supplies to keep the program on 
track.
    That is why the full funding is so vitally important to us.
    Senator Tester. I want to jump back a little bit. The 
contracts you now have do not have incentive fees, but you 
think there may be a plus putting them in in the future?
    General Todorov. Yes, sir. If you will allow me not to 
commit to exactly the type of structure, I think it is 
something our experts that do that for a living are sort of 
taking the lessons from Romania, and we will probably 
restructure some things as we award them for Poland.
    Senator Tester. How about you, General Clark? Are there 
incentive fees in these construction projects, as far as 
timeliness, coming in under budget, those kinds of things?
    General Clark. Yes, sir. I will have to take that for the 
record. I am not that familiar with it.
    Senator Tester. That is fine.
    [The information follows:]

    USSOCOM does not use incentive fees for construction projects. Our 
Military Construction (MILCON) contracts are firm-fixed-price contracts 
without incentive fees and reflect 10 U.S.C. 2858 and Federal 
Acquisition Regulations (FAR) guidance.

    1. 10 U.S.C. 2858 Limitation on the use of funds for expediting a 
construction project: ``Funds appropriated for military construction . 
. . may not be expended for additional costs involved in expediting a 
construction project . . .''

    2. FAR para 16.102: ``Contracts resulting from sealed bidding shall 
be firm-fixed-price contracts.'' USSOCOM, when determining the contract 
type for MILCON projects, also utilizes additional FAR 16.103 guidance 
as follows:

    (a) . . . ``The objective is to negotiate a contract type and price 
. . . that will result in reasonable contractor risk and provide the 
contractor with the greatest incentive for efficient and economical 
performance.''

    (b) ``A firm-fixed-price contract, which best utilizes the basic 
profit motive of business enterprise, shall be used when the risk 
involved is minimal or can be predicted with an acceptable degree of 
certainty.''

    Senator Tester. General Dana? I am just curious. No?
    General Dana. I will have to provide that for the record.
    [The information follows:]

    In USPACOM, none of the Component (Navy, Army, Air Force) 
construction agents currently use incentive fees in their MILCON and 
other construction contracts.
    An exception was made in 2009 when NAVFAC Pacific issued a Global 
Multiple Award Construction Contract (Not to Exceed $900 million) and 
Small Business Multiple Award Construction Contract (Not to Exceed $450 
million) to support projects awarded as a result of the American 
Recovery and Reinvestment Act (ARRA). Both contracts used the award fee 
provision to reward superior quality contractor work.

    Senator Tester. That is fine. What about you, Joe?
    Mr. Marshall. Same for the record. It varies by project.
    [The information follows:]

    DHA's Construction Agents, U.S. Army Corps of Engineers and Naval 
Facilities Engineering Command, do not use incentive fees on our 
contracts.

    Senator Tester. It does vary by project, but there are 
incentive fees out there. I am trying to get to are they based 
upon time, are they based upon coming in under budget, what do 
you base them on. I am not opposed to them, by the way. I am 
not trying to set you up or anything. I think they are 
worthwhile if they are enforced in the right way.
    Mr. Marshall. I think we will have to put that level in the 
record.

                         HOSPITAL CONSTRUCTION

    Senator Tester. That is fine. Joe, very quickly, you talked 
about the rebuild of many of these hospitals. I think the other 
guys had builds, new builds, and moving to different locations. 
When you are talking about building a new hospital, do you ever 
look at the old hospital and say can we rebuild what we have, 
add on to it, move forward? Do you ever do any cost analyses on 
what that might cost and see if that would work as good?
    Mr. Marshall. Yes, sir. That is very much part of the 
analysis that goes into the requirements of what does DOD need, 
what can the market supply, and how do we change up the 
facility.
    I would note for you over the last 8 years, we have touched 
about 44 percent of our hospitals, 23 out of 55 in the Military 
Health System, with MILCON. Ten of those were new builds, the 
other 13 were additions or modernizations.
    Senator Tester. That is good to know. I would assume that 
all of your new builds are built with expansion in mind if you 
need it.
    Mr. Marshall. We build for the capacity----
    Senator Tester. Current capacity, but with the potential 
for expansion or not? You cannot do that with hospitals?
    Mr. Marshall. It depends. We certainly have a large number 
of hospitals that have had extensions or additions added to 
them. As to whether or not we build that into the design up 
front, I will have to take that for the record.
    [The information follows:]

    Military Construction is requested only for justified requirements. 
DHA requires its architects to develop and present alternatives of how 
the project could be economically expanded, up to 20 percent, if 
expansion would be required in the future. The space is not built until 
justified, authorized and appropriated.

    Senator Tester. A hospital is different from a school, but 
I can tell you when I have been involved with school 
construction, we always built it hoping we would never have to 
add on, but if it is there, we do not have to rebuild the whole 
damn structure to add on a few thousand square feet, if you 
know what I mean.
    Mr. Marshall. I do.
    Senator Tester. That is good. I will just close by saying 
thank you all, thanks for your testimony. There may be a few 
written questions we fire off to you for the record and for our 
own benefit. I want to thank you where I started, thank you for 
your service to this country.

                          SUBCOMMITTEE RECESS

    [Whereupon, at 11:30 a.m., Wednesday, April 15, the 
subcommittee was recessed, to reconvene at a time subject to 
the call of the Chair.]
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