[Senate Hearing 113-465, Part 3]
[From the U.S. Government Publishing Office]
S. Hrg. 113-465, Pt. 3
DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
2015 AND THE FUTURE YEARS DEFENSE PROGRAM
=======================================================================
HEARINGS
before the
COMMITTEE ON ARMED SERVICES
UNITED STATES SENATE
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
ON
S. 2410
TO AUTHORIZE APPROPRIATIONS FOR FISCAL YEAR 2015 FOR MILITARY
ACTIVITIES OF THE DEPARTMENT OF DEFENSE, FOR MILITARY CONSTRUCTION, AND
FOR DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY, TO PRESCRIBE
MILITARY PERSONNEL STRENGTHS FOR SUCH FISCAL YEAR, AND FOR OTHER
PURPOSES
----------
PART 3
READINESS AND MANAGEMENT SUPPORT
----------
FEBRUARY 26; MARCH 26; APRIL 2, 2014
Printed for the use of the Committee on Armed Services
DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
2015 AND THE FUTURE YEARS DEFENSE PROGRAM--Part 3 READINESS AND
MANAGEMENT SUPPORT
S. Hrg. 113-465 Pt. 3
DEPARTMENT OF DEFENSE AUTHORIZATION FOR APPROPRIATIONS FOR FISCAL YEAR
2015 AND THE FUTURE YEARS DEFENSE PROGRAM
=======================================================================
HEARINGS
before the
COMMITTEE ON ARMED SERVICES
UNITED STATES SENATE
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
ON
S. 2410
TO AUTHORIZE APPROPRIATIONS FOR FISCAL YEAR 2015 FOR MILITARY
ACTIVITIES OF THE DEPARTMENT OF DEFENSE, FOR MILITARY CONSTRUCTION, AND
FOR DEFENSE ACTIVITIES OF THE DEPARTMENT OF ENERGY, TO PRESCRIBE
MILITARY PERSONNEL STRENGTHS FOR SUCH FISCAL YEAR, AND FOR OTHER
PURPOSES
__________
PART 3
READINESS AND MANAGEMENT SUPPORT
__________
FEBRUARY 26; MARCH 26; APRIL 2, 2014
__________
Printed for the use of the Committee on Armed Services
Available via the World Wide Web: http://www.fdsys.gov/
______
U.S. GOVERNMENT PUBLISHING OFFICE
91-188 PDF WASHINGTON : 2015
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Publishing
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800;
DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC,
Washington, DC 20402-0001
COMMITTEE ON ARMED SERVICES
CARL LEVIN, Michigan, Chairman
JACK REED, Rhode Island JAMES M. INHOFE, Oklahoma
BILL NELSON, Florida JOHN McCAIN, Arizona
CLAIRE McCASKILL, Missouri JEFF SESSIONS, Alabama
MARK UDALL, Colorado SAXBY CHAMBLISS, Georgia
KAY R. HAGAN, North Carolina ROGER F. WICKER, Mississippi
JOE MANCHIN III, West Virginia KELLY AYOTTE, New Hampshire
JEANNE SHAHEEN, New Hampshire DEB FISCHER, Nebraska
KIRSTEN E. GILLIBRAND, New York LINDSEY GRAHAM, South Carolina
RICHARD BLUMENTHAL, Connecticut DAVID VITTER, Louisiana
JOE DONNELLY, Indiana ROY BLUNT, Missouri
MAZIE K. HIRONO, Hawaii MIKE LEE, Utah
TIM KAINE, Virginia TED CRUZ, Texas
ANGUS KING, Maine
Peter K. Levine, Staff Director
John A. Bonsell, Minority Staff Director
______
Subcommittee on Readiness and Management Support
JEANNE SHAHEEN, New Hampshire, Chairwoman
CLAIRE McCASKILL, Missouri KELLY AYOTTE, New Hampshire
MARK UDALL, Colorado SAXBY CHAMBLISS, Georgia
JOE MANCHIN III, West Virginia DEB FISCHER, Nebraska
JOE DONNELLY, Indiana ROY BLUNT, Missouri
MAZIE K. HIRONO, Hawaii MIKE LEE, Utah
TIM KAINE, Virginia TED CRUZ, Texas
(ii)
C O N T E N T S
----------
february 26, 2014
Page
Department of Defense Information Technology Acquisition
Processes, Business Transformation, and Management Practices... 1
McFarland, Hon. Katrina G., Assistant Secretary of Defense for
Acquisition, Department of Defense............................. 6
Scheid, Kevin J., Acting Deputy Chief Management Officer,
Department of Defense.......................................... 11
Takai, Teresa M., Chief Information Officer, Department of
Defense........................................................ 16
Powner, David A., Director, Information Technology and Management
Issues, Government Accountability Office....................... 22
Questions for the Record......................................... 52
march 26, 2014
Current Readiness of U.S. Forces................................. 61
Campbell, GEN John F., USA, Vice Chief of Staff, U.S. Army....... 64
Paxton, Gen. John M., Jr., USMC, Assistant Commandant, U.S.
Marine Corps................................................... 74
Spencer, Gen. Larry O., USAF, Vice Chief of Staff, U.S. Air Force 83
Cullom, VADM Philip H., USN, Deputy Chief of Naval Operations,
Fleet Readiness and Logistics, U.S. Navy....................... 88
Questions for the Record......................................... 119
april 2, 2014
Military Construction, Environmental, Energy, and Base Closure
Programs....................................................... 145
Burke, Hon. Sharon E., Assistant Secretary of Defense for
Operational Energy Plans and Programs.......................... 149
Conger, John C., Acting Deputy Under Secretary of Defense for
Installations and Environment.................................. 160
Hammack, Hon. Katherine G., Assistant Secretary of the Army for
Installations, Energy, and Environment......................... 176
McGinn, Hon. Dennis V., Assistant Secretary of the Navy for
Energy, Installations, and Environment......................... 186
Ferguson, Kathleen I., Acting Assistant Secretary of the Air
Force for Installations, Environment, and Logistics............ 193
Questions for the Record......................................... 242
(iii)
DEPARTMENT OF DEFENSE AUTHORIZATION OF APPROPRIATIONS FOR
FISCAL YEAR 2015 AND THE FUTURE YEARS DEFENSE PROGRAM
----------
WEDNESDAY, FEBRUARY 26, 2014
U.S. Senate,
Subcommittee on Readiness
and Management Support,
Committee on Armed Services,
Washington, DC.
DEPARTMENT OF DEFENSE INFORMATION TECHNOLOGY ACQUISITION PROCESSES,
BUSINESS TRANSFORMATION, AND MANAGEMENT PRACTICES
The subcommittee met, pursuant to notice, at 2:34 p.m. in
room SR-232A, Russell Senate Office Building, Senator Jeanne
Shaheen (chairwoman of the subcommittee) presiding.
Committee members present: Senators Shaheen, McCaskill,
Donnelly, and Ayotte.
OPENING STATEMENT OF SENATOR JEANNE SHAHEEN, CHAIRWOMAN
Senator Shaheen. Good afternoon. Sorry to keep you all
waiting.
At this time, I would like to call the subcommittee hearing
to order.
I want to begin by acknowledging my colleague from New
Hampshire and ranking member, Senator Ayotte. It has been great
to have a chance to work with her in this subcommittee, just as
we do in New Hampshire. We are always pleased to be here
representing New Hampshire on the subcommittee.
During the hearing today, we are going to be receiving
testimony regarding information technology (IT) acquisition,
business transformation, and management practices. This is the
first hearing of the Readiness and Management Support
Subcommittee. I think we are beginning with an issue that is
critical as we look at the many other issues we will be
addressing in the Department of Defense (DOD) this year.
The challenge of procuring IT systems in a timely and cost-
effective manner is not something that is unique to DOD.
Unfortunately, the stories of billions of dollars that are lost
without any useful product as the result of that spending have
appeared throughout the Federal Government, and while we
recognize that this issue is not unique to DOD, it is clearly
the biggest department within the Federal Government, and we
have seen these issues appear, unfortunately, over a period of
years.
In fiscal year 2012, DOD IT acquisition investments totaled
$32 billion, a sum which reflects DOD's growing need for
sophisticated and reliable IT infrastructure. However, the $32
billion is expended across DOD under the supervision of
multiple officials with what is often too little involvement of
the operational users and those who must defend IT systems
against cyber threats.
The Government Accountability Office (GAO) will soon
release a report on acquisition of major IT systems in DOD, and
though the report is still in draft form, the results that we
have seen are disturbing. Of the 15 programs GAO reviewed, 7
experienced growth in their cost estimates, ranging as high as
2,233 percent, 12 programs experienced schedule slippage,
ranging from a few months to 6 years, and only 3 programs met
their system performance targets.
Among the programs assessed were some that could have an
impact on DOD's ability to meet the statutory goal of achieving
an auditable statement of budgetary resources by the end of
fiscal year 2014 and an auditable financial statement by the
end of fiscal year 2017 which, as I am sure you all know, is a
major priority for this subcommittee and for the Senate Armed
Services Committee (SASC) as a whole.
We must find ways to lower costs and improve inefficiency,
while also improving our resiliency to cyber attack. A major
piece of that challenge will be reforming our cumbersome
acquisition process. Our current systems, which are better
suited for weapons systems than IT, often produce systems
already outdated once deployed. A new rapid approach with
proper oversight which capitalizes on the knowledgeable IT
workforce is necessary to correct these deficiencies.
As you all know, this is not the first time the SASC has
tackled this issue. Section 804 of the National Defense
Authorization Act (NDAA) for Fiscal Year 2010 directed the
Secretary of Defense to streamline and improve effectiveness of
our current processes. The subcommittee remains interested in
section 804 and we look forward to hearing from you all how DOD
intends to move forward.
Another area of interest to the subcommittee is DOD's
ongoing data center and server consolidation on cloud
migration. This initiative, called the Joint Information
Environment (JIE), is extremely ambitious and complex, and yet
it seems to lack formal management structures and processes. We
look forward to hearing more about how the JIE is expected to
unfold.
With those opening remarks, and I have a longer statement
that I will submit for the record. I would like to welcome our
four witnesses this afternoon. Testifying today, we have the
Assistant Secretary of Defense for Acquisition, Katrina G.
McFarland; the Acting Deputy Chief Management Officer (DCMO),
Kevin J. Scheid; the Chief Information Officer (CIO), Teresa M.
Takai; and in addition to these representatives from DOD, we
welcome the Director of Information Technology and Management
Issues from GAO, David A. Powner. Thank you for being here.
Now I would like to turn to Ranking Member Senator Ayotte
for her statement. Thank you.
[The prepared statement of Senator Shaheen follows:]
Prepared Statement by Senator Jeanne Shaheen
Good afternoon. At this time, I would like to call the subcommittee
hearing to order.
I would like to begin by acknowledging what a pleasure it has been
to work with my colleague from New Hampshire, Senator Ayotte and her
staff. We continue to work in a time-honored bipartisan fashion on this
subcommittee and I sincerely appreciate that we have been able to reach
agreement on so many issues.
I look forward to another productive year.
During our hearing today, we will receive testimony regarding
information technology (IT) acquisition, business transformation, and
management practices. This is the first hearing the Readiness and
Management Support Subcommittee has convened in this session, and we
are beginning with an issue of immediate importance, which is why I am
pleased to begin the subcommittee's work on the National Defense
Authorization Act (NDAA) for Fiscal Year 2015 before delivery of the
President's budget. This is a complicated topic requiring creative,
outside-the-box thinking, as well as the experience and knowledge of
professionals throughout the Department of Defense (DOD) in order to
find the most efficient, cost-effective way forward.
I would like to welcome our four witnesses this afternoon.
Testifying, we have Assistant Secretary of Defense for Acquisition,
Katrina McFarland; Acting Deputy Chief Management Officer, Kevin
Scheid; and Chief Information Officer, Teresa Takai. In addition to
these representatives from DOD, we welcome David Powner of the
Government Accountability Office (GAO).
IT acquisition investments totaled $32 billion in fiscal year 2012,
a sum which reflects DOD's reliance on sound IT infrastructure.
However, this $32 billion is expended across DOD under the supervision
of multiple officials, with too little involvement of the operational
users and those who must defend information systems against cyber
threats.
The Office of the Secretary of Defense organizational review
conducted by former Secretary of the Air Force Mike Donley recommended
major changes in the duties and responsibilities of the Deputy Chief
Management Officer and the Chief Information Officer. The Senate Armed
Services Committee also recommended major realignments affecting these
officials in the Senate version of the NDAA. Neither set of
recommendations were enacted into law. We hope to learn more about the
rationale for the administration's proposals today.
The Bipartisan Budget Act provided some temporary relief to DOD,
but sequestration is still very much a real threat. We must find ways
to lower costs and improve inefficiencies, such as eliminating sub-
optimal data centers and networks, which lead to unnecessarily high
costs. Cybersecurity vulnerabilities must be addressed before a major
cyber attack causes catastrophic damage. The IT infrastructure must
increase interoperability to improve information sharing. The slow,
cumbersome acquisition process, better suited for weapon systems than
IT, results in systems already outdated once deployed. A new, rapid
approach with proper oversight and which capitalizes on the
knowledgeable IT workforce is necessary to correct these deficiencies.
This is not the first time the Senate Armed Services Committee has
tackled this issue. Section 804 of the NDAA for Fiscal Year 2010
directed the Secretary of Defense to ``develop and implement an
alternative acquisition process for the rapid acquisition of IT
systems.'' The legislation also required the new process to include
``early and continual involvement of the user; multiple, rapidly
executed increments or releases of capability; early, successive
prototyping to support an evolutionary approach; and a modular, open-
systems approach.''
This subcommittee remains interested in the section 804 reforms.
DOD delivered a report to Congress on December 9, 2010, outlining its
plan for implementation; however, DOD has fallen short of full
implementation. We are interested in hearing from our witnesses why and
in what ways this reform mandate has so far failed, where we have
successfully improved the process of acquiring IT, and how DOD intends
to proceed in the future.
The committee has also passed legislation addressing the insider
threat problem, supply chain risk management and software assurance
against cyber threats, and the unique requirements for managing the
rapid but disciplined acquisition of cyber tools and capabilities.
We expect that future reform efforts will capture and build upon
the work done in the NDAAs since 2010. We have read Mr. Powner's recent
report titled ``Information Technology: Leveraging Best Practices to
Help Ensure Successful Major Acquisitions.'' It appears that many of
the best practices he identifies track with the requirements of section
804.
Another GAO report also merits attention: ``Major Automated
Information Systems: Selected Defense Programs Need to Implement Key
Acquisition Practices.'' This report is still in draft but its initial
findings are significant. GAO's assessment of 15 programs found that 7
experienced growth in their cost estimates, ranging as high as 2,233
percent, 12 programs experienced schedule slippage, ranging from a few
months to 6 years, and only 3 programs met their system performance
targets.
Among the programs assessed were some that could have an impact on
DOD's ability to meet the statutory goal of achieving an auditable
Statement of Budgetary Resources (SBR) by the end of fiscal year 2014,
and an auditable financial statement by the end of fiscal year 2017. On
the positive side, we note that the Marine Corps achieved an important
initial milestone, an unqualified opinion on the current year of their
budget statement. However, clearly so much more remains to be done.
The most recent Financial Improvement and Audit Readiness Plan
Status Report states that most but not all of DOD will meet the 2014
goal. We would appreciate an update on which areas are most in danger
of failing to achieve an auditable SBR and what has been done to ensure
that as much of DOD succeeds as possible.
Section 2866 of the NDAA for Fiscal Year 2012 imposed a moratorium
within DOD on the acquisition or upgrade of data servers, server farms,
and data centers. It required the implementation of a plan developed by
the DOD Chief Information Officer to achieve reductions in the size of
data centers and in the energy consumed to power and cool data centers
along with increases in server virtualization and utilization rates.
That plan also called for migrating from 700 data centers to fewer than
100, while reducing the number of network operations centers from 65 to
25. The NDAA for Fiscal Year 2013 required DOD to inventory all the
applications it is running, eliminate redundancies, and rationalize its
licenses. Progress here is critical to cost reduction.
Section 2866 also directed DOD to transition to commercial cloud
services wherever possible to take advantage of cost and efficiency
advantages of commercial cloud providers, consistent with security
constraints. The committee will closely monitor the progress of DOD's
pilots and associated policy development regarding the use of
commercial cloud capabilities.
The ongoing data center and server consolidation, and cloud
migration, are only elements of a far larger effort to transform DOD's
entire telecommunications network. This initiative, called the Joint
Information Environment (JIE) is an extremely ambitious and complex
undertaking, and yet DOD has chosen to not make it a program with a
program manager, requirements, milestones, schedules, and the like. It
affects every command, every Service and DOD agency.
The Defense Information Systems Agency advertises the JIE programs
as delivering:
`` . . . the largest restructuring of IT management in the
history of the DOD. The end state is a secure, joint
information environment comprised of shared IT infrastructure,
enterprise services, and a single security architecture. JIE
will enable DOD to achieve full-spectrum superiority, improve
mission effectiveness, increase security, and realize IT
efficiencies.''
The apparent lack of formal management structures and processes for
this enterprise-wide initiative is striking and demands attention. We
look forward to our witnesses' explanations.
Thank you to our witnesses, I look forward to hearing your
testimony. I now invite the ranking member, Senator Ayotte, to make her
statement.
STATEMENT OF SENATOR KELLY AYOTTE
Senator Ayotte. Thank you, and I want to thank Chairwoman
Shaheen. It is an honor to serve with you on the Readiness and
Management Support Subcommittee and also to serve New Hampshire
in the U.S. Senate with you. We have been able to work in a
bipartisan fashion on issues that not only impact our State,
but also issues that impact the country in this important
subcommittee, and certainly today's topic is no exception to
that.
Within the existing problems associated with acquisition
reform, one area of growing concern is how DOD acquires IT. I
will also say that this is not a unique problem across the
Government. I also serve on the Senate Homeland Security and
Governmental Affairs Committee, and this is an issue that has
been replete within that agency as well.
But getting this right is not just important from an
acquisition process point of view, but it is also critical
because IT can be used as a vital tool to help DOD become more
efficient to serve as a better steward of taxpayers' dollars
overall.
One of the most glaring examples of problems with IT
acquisition was the termination of the Air Force's
Expeditionary Combat Support System (ECSS). After 7 years and
over $1 billion, this program was terminated in 2012 after it
was determined that it would require another billion dollars to
salvage, and even then, only a fraction of the program's
requirements could be met.
This is an example. We need to understand what went wrong
and how we are going to prevent these types of situations going
forward, particularly with the challenges we face with limited
defense dollars.
Equally disturbing as the cancellation of the ECSS, it
places in doubt the Air Force's ability to conduct the
Statement of Budgetary Resources by the end of this fiscal year
which has been a concern with the SASC as a whole. This is an
incredibly important issue that we do not plan to let go, and I
hope that you do not either.
However, I do appreciate that addressing problems related
to IT acquisition appear to be on the minds of the authors of
the recently reissued DOD Instruction (DODI) 5000.02, which
articulates the defense acquisition process. It appears that
many of the guiding principles set forth in the report mandated
by section 804 of the NDAA for Fiscal Year 2010, which I know
we are going to spend a substantial amount of time on today,
were incorporated into the new DODI.
Despite this, I remain concerned by the GAO reports
indicating that a number of DOD's IT acquisition programs have
not been correctly categorized on the Government's Web site
called the IT Dashboard, which tracks the progress of such
programs.
Another important part of this hearing will be
understanding whether DOD categorizes IT programs differently,
how we can ensure that the Government's Web site employs a
standardized metric for purposes of organization and
transparency.
As my colleagues know, I am also very interested in
ensuring that DOD is ready to be audited because this will help
ensure that we can better scrutinize spending to identify and
eliminate waste and duplication before it happens. It is very
important in the critical juncture we find ourselves at right
now with DOD to be able to distinguish between necessary
defense budget cuts and cuts that would harm our troops and
damage our military's readiness, which is the foundation and
purpose of this subcommittee.
In that spirit, Assistant Secretary McFarland, based on
your position as the Assistant Secretary of Defense for
Acquisition, I also look forward to addressing some of the
broader acquisition challenges that DOD faces beyond the IT
issues, but I certainly think that they relate to the IT
issues.
For example, from 2007 to 2013, the Air Force wasted about
$6.8 billion on 12 major acquisition programs; I have a list
with me of those programs. There is no doubt that the Services,
including the Air Force, are confronting difficult budget
challenges. It is really hard when we see billions of dollars
wasted on programs, and yet we see proposals where the Services
are making proposals to cut very important programs to our men
and women in uniform.
One of those programs I have been quite outspoken about is
the Air Force proposing the premature retirement of the A-10s
in an effort to save $3.5 billion over the Future Years Defense
Program, which Secretary Hagel publicly confirmed this week. I
believe that this is a serious mistake and that we will lose
the ability to have close air support (CAS). Chief of Staff of
the Army General Odierno said it is the best CAS platform we
have today. I believe that we risk our troops not having the
re-attack times and capacity that the A-10 provides, well
before we will have the F-35 variant that has purported to take
up this mission in the future. We will have a gap that I
believe is not good for our troops and could put them in
danger.
That is why I want to put this in perspective. When we look
at $6.8 billion in wasted money and then we talk about having
to cancel important air platforms like the A-10, that perform
such an important function for our men and women in uniform and
particularly those on the ground, that is why acquisition
reform, I know to all of you matters, and why getting it right
is critical in terms of making sure that our taxpayers' dollars
are used wisely, but most importantly, that the men and women
in uniform who serve us every day are able to have the support
that they need, the equipment that they need, and the training
that they deserve in serving our country.
I appreciate your being here today and I look forward to
this important discussion. I want to thank the chairwoman again
for holding this hearing.
Senator Shaheen. Thank you very much, Senator Ayotte.
I would ask, Ms. McFarland, if you would go first, followed
by Mr. Scheid, Ms. Takai, and Mr. Powner.
STATEMENT OF HON. KATRINA G. McFARLAND, ASSISTANT SECRETARY OF
DEFENSE FOR ACQUISITION, DEPARTMENT OF DEFENSE
Ms. McFarland. Thank you, Chairwoman Shaheen, Ranking
Member Ayotte, and distinguished members of the subcommittee,
for this opportunity to discuss IT acquisition.
I would like to submit my full testimony for the record and
will summarize it in the time I have.
I am honored to represent DOD, along with my colleagues
from CIO, DCMO, and GAO. My focus will be on IT acquisition
policy, people, and the oversight of Major Defense Acquisition
Programs and Major Automated Information Systems (MAIS).
IT represents a considerable portion of all acquisition
programs within DOD. DOD manages two fundamental types of
software programs: national security systems and defense
business systems.
National security systems are generally information systems
which involve intelligence activities, cryptological
activities, command and control of military forces, and systems
that are an integral part of weapons or weapons systems.
Defense business systems are information systems which
include financial systems, management information systems, and
IT and cybersecurity infrastructure used to support our
business activities.
Section 804, as Senator Ayotte, the ranking member,
mentioned of the NDAA for Fiscal Year 2010 directed that DOD
develop and implement a new acquisition process for IT systems
based on the 2009 Defense Science Board (DSB) report. The
recommendations were to condense timelines by increasing
collaboration and improve processes to deliver right
capabilities to the warfighter in operationally relevant
timelines.
To do this, one must start with a defined requirement or
capability. The Chairman of the Joint Chiefs of Staff has
modified DOD's Joint Capability Integration and Development
System, which develops our requirements, by introducing the IT
Box concept to support more rapid acquisition timelines.
On approval of a requirement formulated in an initial
capabilities document or a capabilities development document,
requirements management is delegated to an appropriate body in
a sponsor's organization. The organization is not required to
come back for requirements changes unless they exceed the
parameters of the IT Box.
In addition to the IT Box introduction, DOD has introduced
the interim DOD directive operation of the defense acquisition
system, also referenced by the ranking member, issued this
fiscal year. It includes guidance to adopt a modular, open
systems methodology with heavy emphasis on design for change in
order to adapt to the changing circumstances consistent with
the agile commercial methodologies. It describes acquisition
models where across each model, the policy addresses the
realization that IT capabilities may evolve, so desired
capabilities can be traded off against cost and initial
operational capability to deliver the best product to the field
in a timely manner.
In accordance with section 933 of the NDAA for Fiscal Year
2011, DOD developed a strategy for the rapid acquisition of
cyber tools, applications, and capabilities for the U.S. Cyber
Command (CYBERCOM) and other military cyber operation
components by chartering the Cyber Investment Management Board
that unites IT policy and operational requirements with
identifying gaps both in resources and in capabilities.
Now, I would like to address DOD's most important asset,
our people. Finding the expertise and skill sets required to
develop and acquire capabilities for IT systems and cyber space
operations is challenging. The talent pool is small. Industry
and Government seek it, and it rarely meets the level of
expertise across all areas. DOD is working on many fronts to
address these challenges. For example, with the assistance of
the Defense Acquisition Workforce Development Fund, DOD has
established a functional area for IT acquisition to support
training in the Defense Acquisition University.
DOD is working to simplify the process of IT acquisition.
There is an ongoing legislative review between DOD and
Congress. There is an effort to develop a cybersecurity
guidebook for the program manager that assists them in
understanding what cybersecurity activities are necessary to
conduct at each point of the acquisition lifecycle. The Program
Assessment Root Cause Analysis Directorate contributes to our
understanding of the root causes for the IT program failures in
order to prevent them from reoccurring.
Finally, there is an effort to help our program management
by having our cybersecurity test and evaluation procedures
include early development test and evaluation involvement for
all of our test activities.
I would like to conclude with the following key points.
DOD will continue its efforts to operate as affordably,
efficiently, and effectively as possible. We are evolving our
approach to acquisition for IT and recognize the distinct
challenges that come with it. We are taking a disciplined and
proactive step to improve our IT processes and compensate for
them.
Thank you for your ongoing support of our men and women in
uniform. I know you share my desire to ensure that they have
the resources necessary to meet and accomplish their mission.
[The prepared statement of Ms. McFarland follows:]
Prepared Statement by Hon. Katrina McFarland
Thank you for the opportunity to address the Subcommittee on
Readiness and Management Support of the Senate Armed Services
Committee. I am honored to represent the Department of Defense (DOD)
along with my colleagues. The DOD partnership among my office, the
Office of the Deputy Chief Management Officer (DCMO), and Chief
Information Officer (CIO), manages the DOD IT Enterprise in the areas
of acquisition, policy, and the Defense Business Systems (DBS). I will
focus my discussion on Information Technology (IT) acquisition policy,
people, and oversight of the Acquisition of Major Defense Acquisition
Programs and Major Automated Information Systems (MAIS) over which the
Under Secretary of Defense (USD) for Acquisition, Technology, and
Logistics (AT&L), as Defense Acquisition Executive, has Milestone
Decision Authority. Ms. Takai will discuss her responsibility for
overall IT Policy and as the Enterprise IT sponsor. Mr. Scheid will
discuss his responsibility for the Defense Business Architecture and
Defense Business Council/Investment Review Board oversight. At the
Office of the Secretary of Defense (OSD) level, we oversee the planning
and execution of the Services' acquisition programs and establish
acquisition, logistics, maintenance, and sustainment support policies.
background
Section 804 of the National Defense Authorization Act (NDAA) for
Fiscal Year 2010 directed the DOD to develop and implement a new
acquisition process for IT systems based on the recommendations of
Chapter 6 of the March 2009 Defense Science Board Report. IT represents
a considerable portion of all acquisition programs within DOD. To help
manage IT, DOD manages two fundamental types of software programs,
National Security Systems (NSS) and DBS. NSS as defined in 44 U.S.C.
3541, are telecommunications or information systems operated by or on
behalf of the Federal Government, the function, operation, or use of
which involves intelligence activities, cryptologic activities related
to national security, command and control of military forces, equipment
that is an integral part of a weapon or weapons system, or, is critical
to the direct fulfillment of military or intelligence missions. NSS
includes a category of software programs called embedded software--
software that operates and controls our weapon system platforms.
DBS, as defined in 10 U.S.C. 2222, are information systems, other
than a NSS, operated by, for, or on behalf of the DOD, including
financial systems, management information systems, financial data
feeder systems, and the IT and cybersecurity infrastructure used to
support business activities, such as contracting, pay and personnel
management systems, some logistics systems, financial planning and
budgeting, installations management, and human resource management.
Because NSS tend to be broader in scope with significant
interoperability needs and requirements, we use different policies and
procedures to acquire these two product categories.
it requirement process implementation
To acquire IT, one must start with defined requirements (or
capabilities). DOD has worked to condense timelines, increase
collaboration between communities, and improve processes to deliver the
right capabilities to the warfighter in operationally relevant
timelines. The Chairman of the Joint Chiefs has modified DOD's Joint
Capability Integration and Development System by instituting a major
change for Information System (IS) requirements development which
introduces the ``Information Technology (IT) Box,'' enabling the
delegation of authorities to specifically support the more rapid
timelines necessary for IT capabilities through the Defense Acquisition
System processes. The four sides of the ``IT Box'' include the
organization that will provide oversight and management of the product;
the capabilities required; the cost for application and system
development; and the costs for sustainment and operations. Under this
construct, upon approval of an IS-Initial Capabilities Document (ICD)
or IS-Capabilities Development Document (CDD) by the Joint Requirements
Oversight Council (JROC), requirements management is delegated by the
JROC to an appropriate body in the sponsor's organization. The
delegation of authorities and defined parameters enable faster
timelines for IT programs, because the organization is not required to
return to the JROC for requirements approval unless the IT Box
parameters are exceeded by prescribed thresholds. The organization that
requirements approval is delegated to for an IS-ICD or IS-CDD must
return to the JROC to provide periodic updates.
An example of DOD's recent use of the ``IT Box'' was through
tailoring an IT acquisition that supports the Combatant Commanders with
mission planning tools through an automated and enterprise capability
called the `Integrated Strategic Planning and Analysis Network (ISPAN)
Increment 2' program. The Vice Chairman Joint Chiefs of Staff delegated
JROC responsibility for ISPAN non-key performance parameters to a
Combatant Command (United States Strategic Command). In concert, on
March 10, 2010, the USD(AT&L) approved ISPAN acquisition tailoring that
included shorter development periods with multiple capability releases,
early and continual user involvement, and a modular open-systems
approach using successive prototyping efforts, consistent with section
804 of the NDAA for Fiscal Year 2010.
In January 2013, the Air Force completed a report after the ISPAN
program had successfully delivered its increment 2 of capabilities and
highlighted significant improvement in acquisition cycle-time as well
as speed in decisionmaking compared to an earlier increment. For
example:
Time between Milestone B and Initial Operational
Capability: ISPAN Inc. 2-15 months; ISPAN Block 1-60+ months.
This demonstrates the value of close coordination between the
requirements and acquisition process for the delivery of IT
capabilities.
defense acquisition system implementation of it
On November 26, 2013, the Deputy Secretary of Defense issued an
interim Department of Defense Instruction 5000.02 to implement a number
of statutes and regulations that have come into existence since the
last version was published in 2008. This new acquisition policy
includes guidance to address the challenges associated with the
different types of IT acquisition programs, such as guidance to address
the fundamental challenge with DBSs where a suite of integrated
applications referred to as Enterprise Resource Planning (ERP) business
management software is acquired. For ERPs, positive outcomes are
dependent upon understanding the needed process changes prior to
starting implementation. Consistent with section 804 of the NDAA for
Fiscal Year 2010, it includes guidance to adopt a modular, open-systems
methodology with heavy emphasis on ``design for change'' in order to
adapt to changing circumstances consistent with commercial agile
methodologies. Finally, the new acquisition policy addresses hybrid
models where significant software development is the predominant
activity for a major weapon system, or in situations that combine
hardware development as the basic structure with a software intensive
development occurring simultaneously. Across each model, the policy
addresses the realization that information technology capabilities may
evolve so ``desired capabilities'' can be traded-off against cost and
initial operational capability to deliver the best product to the field
in a timely manner.
section 933 implementation
Following section 804 was section 933 in the NDAA for Fiscal Year
2011 which required DOD to develop a strategy for the rapid acquisition
of cyber tools, applications, and capabilities for U.S. Cyber Command
(CYBERCOM) and other cyber operations components of the military. It
specifically requested an orderly process for determining and approving
operational requirements; a well-defined, repeatable, transparent, and
disciplined process for developing capabilities in accordance with the
acquisition guidance and policy; allocation of facilities and other
resources to thoroughly test capabilities in development, before
deployment; and operational use to validate performance and take into
account collateral damage, and to promote interoperability, share
innovation, and avoid unproductive duplication in cyber operational
capabilities. In response to section 933, DOD chartered the Cyber
Investment Management Board (CIMB). The goal of the CIMB is to unite IT
policy and operational requirements and identify gaps and resources to
enable the rapid acquisition and development of cyber capabilities. The
CIMB is aligning existing processes and implementing new processes to:
enable rapid cyber acquisition and balance investments
based on operational need;
align and synchronize requirements, testing and
evaluation;
facilitate oversight and improve insight of DOD cyber
activities and investments; and
enable integration and transparency among key process
owners.
The CIMB is tri-chaired by the USD(AT&L), the Vice Chairman of the
Joint Chiefs of Staff, and the Under Secretary of Defense for Policy.
The CIMB membership includes the OSD Principal Staff Assistants to
include the DOD CIO, the Services, the Defense Information Systems
Agency, National Security Agency, U.S. Strategic Command, and CYBERCOM.
Since March 2012, the CIMB addressed topics ranging from exploring the
cyber portfolios within the science and technology base, National
Security Agency, and CYBERCOM; as well as offensive and defensive
cyberspace operations, defend the nation, cyber situational awareness
and a holistic assessment of the cyber investment portfolio. DOD has
achieved an understanding of cyber investment and mission alignment
enabling future effective strategic management of total cost of
ownership and return on investment.
Another DOD initiative stemming from section 933 is the Cyber
Acquisition Process Pilot Plan. The plan was approved by the USD(AT&L)
on July 29, 2013 and was designed to test and refine the proposed
requirements, acquisition, test and evaluation processes. The goal is
to select two to five capabilities and facilitate, observe and analyze
as they progress through the acquisition process in order to understand
where existing and dependent processes need better alignment or
changes. The intended output is to refine and validate the rapid
acquisition processes prior to implementation across the DOD. As you
are aware, one of the tenants in DOD's Better Buying Power initiative
is continual process improvement. We find ourselves sustaining changes
through this process by starting with a subset of programs measuring
the success of the initiatives as we execute, and introducing these
changes to a larger set as they demonstrate success or reassessing the
changes if they don't.
it people
IT has many challenges, of which cyber capabilities add complexity.
Finding the expertise and skill sets required to develop and acquire
capabilities for IT systems for cyberspace operations is challenging.
For example, one challenge found in the cyber acquisition domain is
that many cyber capabilities are not acquired or developed under a
traditional acquisition program of record structure because of the
funding level of the cyber development efforts. In many cases, a
program manager does not exist. The talents we require span information
assurance, information technology, operations, and in the case of DBSs,
enterprise management. The talent pool is small and rarely meets the
level of expertise across the necessary areas; those who possess the
required skills are in extremely high demand. Industry faces similar
challenges; DOD, other Federal organizations, and industry are all
seeking the same skillsets increasing the challenge to recruit talent
and retain talent.
We are working to address these IT workforce issues. With the
assistance of the Defense Acquisition Workforce Development Fund, we
have established a functional area for IT acquisition that is working
the appropriate IT acquisition training into the Defense Acquisition
University training curriculum, as an example. The USD(AT&L) chairs the
Acquisition Workforce Senior Steering Board that is attended by the
Service acquisition executives, the Service defense acquisition career
managers, the Defense Acquisition University, and the functional career
area leads. It focuses on the immediate workforce needs, challenges,
and staffing levels.
We are working to simplify the process of acquisition through a
legislative review in coordination with Representative Thornberry, Vice
Chairman of the House Armed Services Committee. Additionally, there is
also a joint effort for AT&L and the DOD CIO to develop a cybersecurity
guidebook for program managers. This guidebook is being developed to
provide program managers clear and concise guidance on what
cybersecurity activities should be conducted at each point in the
acquisition lifecycle, while emphasizing early integration of
cybersecurity requirements. The purpose is to help program managers
ensure cybersecurity is considered in the design of a new capability
instead of later on in the process when it may be too costly or take
too long to implement it correctly. The Program Assessment Root Cause
Analysis directorate works in my organization, which contributes to our
understanding of the root cause of IT program failures in order to
prevent them from re-occurring. Again, with the help of the Defense
Acquisition Workforce Development Fund funding, we will bring back
lessons learned to the Defense Acquisition University to ensure we
train our people on effective program management, engineering,
logistics, contracting, et cetera.
Another effort to help program managers is adjusting our
cybersecurity test and evaluation (T&E) procedures to include early
developmental T&E involvement in test planning and execution. The goal
is to improve the resiliency of military capabilities before beginning
production and deployment. Early discovery of system vulnerabilities
can facilitate remediation to reduce the impact on cost, schedule, and
performance.
One example of this is regression testing, which is a term for
tests to ensure that software changes in one part of a system do not
break or alter working functionality in another. Every software system
requires regression testing. The Director for Operational Testing and
Evaluation (DOT&E) is now examining regression test procedures as part
of its suitability evaluations. DOT&E has also begun helping some
programs convert to automated (vice manual) regression testing so as to
gauge the extent of the problem DOD faces. In the last 2 years they
have been able to help the Defense Logistics Agency implement automated
regression testing for the Enterprise Business System.
conclusion
I would like to conclude with the following key points. The DOD is
evolving its approach to IT acquisition. We are off to a good start
with the interim DODI 5000.02 which provides program structures and
procedures tailored to the dominant characteristics of the product
being acquired and to unique program circumstances, including
operational urgency and risk factors. We will continue to work with the
DOD CIO to implement IT Policy, and the DCMO to execute to the Business
Enterprise Architecture. DOD recognizes the distinct challenges
associated with acquiring IT capabilities and we are taking disciplined
and proactive steps to improve our processes to compensate for them.
Senator Shaheen. Mr. Scheid.
STATEMENT OF KEVIN J. SCHEID, ACTING DEPUTY CHIEF MANAGEMENT
OFFICER, DEPARTMENT OF DEFENSE
Mr. Scheid. Good afternoon and thank you. Senator Shaheen,
Senator Ayotte, and members of the subcommittee, my name is
Kevin Scheid and I am the Acting DCMO of DOD. As the DCMO, I am
the Secretary's and the Deputy Secretary's principal official
for providing management oversight across DOD's military
components, agencies, offices, and organizations. I report to
the Deputy Secretary who is also the Chief Management Officer
(CMO) of DOD.
Thank you for the opportunity to provide this update on the
management of DOD's business operations.
As you are aware, DOD's basic mission is to hire, train,
and equip soldiers, sailors, airmen, and marines, deploy them
abroad to fight and win the Nation's wars, care for the wounded
and their families, redeploy those troops home safely, and
retrograde and refit the equipment capabilities to be ready and
win the next fight.
DOD performs this mission through various business areas or
functional areas such as human resources, logistics,
acquisition, financial management, installations, and security.
These are the building blocks of the defense business
enterprise.
For DOD to be successful in performing these functions, my
office works with DOD's senior leaders in defining the
functional areas, establishing clear business goals and
objectives, guiding DOD in establishing and aligning its
processes, ensuring those processes are enabled by modern,
interoperable business systems, and establishing meaningful
outcome-oriented performance measures.
I am relatively new in this position, having recently
returned from an assignment at NATO as the Chief Operating
Officer (COO) and the Deputy General Manager of a large NATO
agency. On November 25, the Secretary designated me as the
acting DCMO at the time of Ms. Beth McGrath's retirement.
There have been significant changes made since Ms. McGrath
last testified before the subcommittee. The most important of
these changes was Secretary Hagel's December 4 decision to
strengthen management in DOD by directing a series of
consolidations and realignments within the Office of the
Secretary of Defense (OSD). My office will be consolidating
with the Office of the Director of Administration and
Management, a relatively small office of about 36 employees,
and the Office of the Assistant Secretary of Defense for
Intelligence Oversight, an office of about 9 or 10 employees.
In addition, the defense field activity of Washington
Headquarter Services and the Pentagon Force Protection Agency
will be realigned under the DCMO's office.
Further, the Secretary directed the transfer of oversight
responsibilities for the technical aspects of defense business
systems from my office to the Office of the CIO. This change
would realign responsibility and accountability for business
systems in DOD while requiring my office to continue leading
the development of requirements for those systems.
These reforms may require changes to section 2222 of title
10 and we are reviewing if that is necessary at this time.
The Secretary's goal in strengthening the DCMO's office in
this way through these consolidations is best captured, I
think, in the following quote from Secretary Hagel: ``This
consolidation enables the role of the Deputy CMO as the
Principal Staff Assistant and Advisor to the Secretary and
Deputy Secretary of Defense for full spectrum oversight on both
the OSD and DOD levels of management administration,
coordination, and collaboration across DOD components and
business functions, performance improvement, and regulatory
compliance.''
DOD is in the midst of implementing the Secretary's
direction, and all of DOD's witnesses here today are working
closely together on a path forward.
While the details are still being developed, I am confident
that the focus on management and oversight will help advance
DOD's progress in the business operations. As we execute these
consolidations, DOD continues to make progress in the
selection, acquisition, and control of IT systems.
Building on the principles contained in DOD's response to
section 804 of the NDAA for Fiscal Year 2010, important steps
have been taken. Under Assistant Secretary McFarland's lead,
lessons from the section 804 report have been incorporated in
DOD's overarching acquisition policies. Under the CIO, Ms.
Takai's lead, there have been lessons learned incorporated into
the JIE. Under my predecessor's lead, Ms. McGrath, we have
incorporated or embedded lessons learned in the business
mission areas of what we call the Integrated Business Framework
(IBF) for DOD.
This framework, overseen by the Defense Business Council
that I currently chair, has driven quantifiable improvements in
DOD's business environment. Over the past 2 years, and we have
only been through two cycles of this, we have improved the
alignment of our strategies, enhanced data available for
decisionmaking, and rationalized our business systems
environment by reducing funds certifications by over $1 billion
and retiring 60 legacy systems. We have only gone through two
cycles, as I mentioned, and it is early, but this process is
yielding some important results.
Before I close, and in response to a topic that you
specifically raised in your letter and mentioned in your
opening comments, I would like to briefly discuss DOD's
progress towards its audit readiness goals.
Bringing this very large Department together, applying
consistent business practices, and ensuring good internal
controls is difficult, as I am sure you can appreciate. But our
efforts are making progress, exhibited most recently by the
Marine Corps' achievement of an unqualified favorable audit of
its current year appropriation. Secretary Hagel is committed to
audit readiness, as is DOD as a whole. My office continues to
work with the Comptroller to implement the DOD plan to achieve
audit readiness. DOD has resources, governance strategy, and
senior leader commitment needed for success. While it is too
soon to know for sure, we expect most budget statements to be
audit ready by the goal of September 2014.
In closing, I would like to reemphasize that the Secretary
is strongly committed to strengthening DOD's management, and
the steps he directed in December are taking shape and leading
to his vision of stronger business processes, a simplified
business environment, and greater oversight. Strengthening
DOD's management is a high priority for the Secretary, as well
as this subcommittee and the SASC. We appreciate the
committee's support and guidance in meeting these priorities
over the years. Together, our collective efforts are improving
the support to our soldiers, sailors, airmen, and marines,
while realizing greater efficiency and effectiveness for the
American taxpayers. We are committed to continuing these
efforts.
Thank you for the opportunity to testify. I would be glad
to take questions.
[The prepared statement of Mr. Scheid follows:]
Prepared Statement by Mr. Kevin J. Scheid
Introduction
Senator Shaheen, Senator Ayotte, and members of the subcommittee, I
appreciate the opportunity to testify before you to provide an update
on our oversight of management in the Department of Defense (DOD). DOD
has always taken its duty to be a good steward of taxpayer dollars very
seriously and the efficient and effective management of DOD is key to
accomplishing this. As the DOD's Acting Deputy Chief Management Officer
(CMO), I am the Secretary and Deputy Secretary of Defense's primary
agent for providing effective management across DOD's many
organizations and establishing a simplified business environment that
is fiscally responsible. The main focus of my office is to work with
DOD's senior leaders across the enterprise to define clear business
goals, create meaningful performance measures, align activities via
repeatable processes, ensure that these processes are supported by
modern, interoperable defense business systems, and support the
Secretary of Defense's direction to implement institutional reforms, as
well as simplify DOD's business environment and lower its cost.
While I have only been part of the Office of the Deputy CMO for
about 6 months and in the Acting Deputy CMO position since November 25,
2013, much progress has been made since my predecessor, the Honorable
Elizabeth McGrath, last testified before you. I look forward to being
able to share some of this progress with you today.
secretary's organizational review
The responsibilities of the Office of the Deputy CMO were recently
enhanced when, on December 4, 2013, Secretary Hagel announced a series
of organizational realignments within the Office of the Secretary of
Defense (OSD). While the Secretary's announcement included numerous
elements, one of his primary goals was to strengthen and elevate the
role of the Office of the Deputy CMO to provide, both within OSD and
across DOD, full spectrum oversight of management, administration,
coordination across DOD Components and business functions, performance
improvement, and regulatory compliance. This will be accomplished
through the consolidation of the Office of the Director of
Administration and Management, Washington Headquarters Service, the
Pentagon Force Protection Agency, and a few additional organizations
into the Office of the Deputy CMO structure.
Another of the Secretary's primary goals was to strengthen the
Office of the DOD Chief Information Officer (CIO) to address the
growing information technology (IT) and cyber challenges, improve
oversight of IT resources, and further enable successful implementation
of the Joint Information Environment. This will be accomplished through
the transfer of oversight responsibility for the technical aspects of
defense business systems from the Office of the Deputy CMO to the
Office of the CIO.
DOD is in the midst of implementing the Secretary's direction and
the Offices of the Deputy CMO, DOD CIO, and the Under Secretary of
Defense (Acquisition, Technology, and Logistics) (USD(AT&L)) are
working closely together to ensure the optimal alignment of
responsibility and accountability for business processes and business
systems approval and acquisition. While certain details continue to be
finalized, I am confident that the renewed focus on management and
oversight will help advance DOD's progress in its business operations
and IT functions. I look forward to being able to share additional
details about these organizational realignments, including any possible
legislative changes, with the committee if and when the Secretary
approves such changes.
integrated business framework
In 2012, aided by changes to DOD's investment management process
for defense business systems contained in section 901 of the National
Defense Authorization Act (NDAA) for Fiscal Year 2012, the Deputy CMO
established a new governance body, the Defense Business Council, to
consolidate previously dispersed responsibilities and implement a new
overarching management approach, the Integrated Business Framework.
This framework is intended to align all levels of our management
strategies and processes and use multiple statutory and policy levers,
including investment management responsibilities, to drive positive
outcomes in DOD's business operations. The framework is also aligned
with the guiding principles established in the DOD's Strategic
Management Plan and enables DOD business leaders to instill a cost
culture, institutionalize end-to-end business processes, align business
operations, and modernize and rationalize business systems.
The Integrated Business Framework is progressing. Over the past 2
years we have:
Aligned the Strategic Management Plan and DOD's Annual
Performance Plan with the National Security Strategy and
Quadrennial Defense Review;
Established, for the first time, functional strategies
for each of our lines of business (financial management, human
resources, etc.) that are aligned with the Strategic Management
Plan and lay out the strategic vision, goals, priorities,
outcomes, measures, and any mandatory enterprise initiatives
for a given functional area;
Established, for the first time, a portfolio based
approach for reviewing all defense business system spending.
The mechanism for achieving this, Organizational Execution
Plans developed by the DOD components (the military
departments, defense agencies, et cetera), include details on
the component's proposed business system investments, their
alignment with DOD's functional strategies and their adherence
to Business Process Reengineering and Business Enterprise
Architecture requirements;
Aligned and improved budget and systems data, which
has improved the visibility of our defense business systems
inventory and enabled DOD business leaders to make more
informed investment decisions;
Established the Defense Business Council as the
requirements validation body for defense business systems,
thereby aligning strategy with investments;
Created and implemented criteria for evaluating
defense business systems spending, which resulted in not
certifying obligation requests totaling $617 million, or 9
percent of the total requested amount for fiscal year 2014.
During the two investment certification cycles since the NDAA
for Fiscal Year 2012 was enacted, the Defense Business Council
has not certified over $1 billion in requests; and
Retired more than 60 defense business systems as
legacy systems and taken steps to eliminate them from future
budgets.
defense business systems and it acquisition reform
Over the years, DOD has had many challenges with the development,
deployment, and oversight of defense business systems. The Office of
the Deputy CMO and its predecessor organizations have played a variety
of roles in trying to address this problem from both an acquisition and
an investment management perspective.
Through its hiring of recognized industry experts on large-scale IT
projects and its implementation of enterprise IT solutions, the
business mission area has learned many lessons about DOD's ability to
agilely acquire defense business system capabilities. A primary lesson
was that defense business systems required a unique approach that in
many cases is different from the traditional DOD model for weapons
system acquisition. Consequently, DOD began development of a tailored
acquisition process for defense business systems known as the Business
Capability Lifecycle.
Shortly after the Deputy CMO was established, the then-Deputy
Secretary of Defense asked this new office to lead DOD's response to
section 804 of the NDAA for Fiscal Year 2010, which directed DOD to
develop and implement a new acquisition process for IT systems based,
to the extent determined by the Secretary, on the recommendations of a
2009 Defense Science Board Report on IT Acquisition Reform. The intent
was to initially focus on defense business systems and leverage
progress made and lessons learned to address the full set of
recommendations from the Defense Science Board Report. The broad themes
contained in the 804 Report were developed in collaboration across DOD
and with industry. They were sweeping in their scope and, if fully
implemented, would likely require legislative changes to fully
implement. In conjunction with the publication of the 804 Report, a
task force was established, chaired by the Deputy Secretary and run by
the Deputy CMO. Working groups established under the task force
developed more detailed recommendations for implementation of the 804
Report's themes. Eventually, responsibility for the way ahead on policy
implementation shifted to USD(AT&L), and they have taken important
steps forward, such as incorporating aspects of the Business Capability
Lifecycle into the latest release of DOD's acquisition guidance, DODI
5000.02.
Since publication of the 804 Report, the Office of the Deputy CMO
has focused on further implementing the principles of the report in two
primary ways for defense business systems. First, until December 2013,
when USD(AT&L) rescinded its delegation of Milestone Decision Authority
to the Deputy CMO for certain large defense business system
acquisitions, the Deputy CMO used this delegated authority to conduct
frequent oversight of these programs and cap spending authority in line
with the recommendations of the report. Second, the Deputy CMO has
embedded, where practicable, the principles of the 804 Report, into the
execution of the Integrated Business Framework and revised investment
management process as described above. The use of these principles,
which include using portfolios to help govern defense business systems,
use of the Defense Business Council to review problem statements of new
business system investments prior to approving initiation, and review
of the business process reengineering conducted on the processes
systems support, is beginning to pay dividends.
conclusion
DOD is committed to improving the management and acquisition of IT
systems, as well as our overarching business operations. These issues
receive significant management attention and are a key part of our
broader strategy to build better business processes that will create
lasting results for our men and women in uniform, as well as the
American taxpayer. I appreciate the opportunity to discuss the
Secretary's plans to strengthen management in DOD and I look forward to
continuing our work with this committee in the months and years ahead.
I would be glad to take your questions.
Senator Shaheen. Thank you.
Ms. Takai.
STATEMENT OF TERESA M. TAKAI, CHIEF INFORMATION OFFICER,
DEPARTMENT OF DEFENSE
Ms. Takai. Thank you, Madam Chairwoman. Thank you so much
for inviting us this afternoon. I appreciate this opportunity
to testify before the subcommittee on topics that are of great
importance to all of us, and certainly in my world.
I provided a written statement that covers the scope of
everything that the CIO does, and rather than trying to go into
all of that, because I know we are very focused in a particular
area, I would like to mainly focus my remarks on the JIE, if I
could.
We wanted to be able to describe to you this key initiative
to ensure that DOD has access to information on secure
information networks--and I will come back to that because that
really is pivotal in what we are doing--and also the tools
necessary to execute our warfighting and business support
missions.
I want to say right away that the efforts we are taking
regarding the IT infrastructure is in direct support of the IT
acquisition process and also in support of the business
transformation efforts. It is really about being able to
provide the technology that is necessary for the business
systems to accomplish what they need, but also standardization
to assist with the IT acquisition process in that important
area.
I think our mission success depends upon the ability of our
military leaders and civilians to act decisively based on the
most timely and accurate information. Recognizing that
information is a strategic asset pushes us to undertake a very
ambitious effort to realign and restructure how our networks,
hardware, and software housed in data centers is constructed,
operated, acquired, and defended. This is done in order to
provide better information access to our users, improve our
ability to defend not only the networks and the data, but also
make it responsive to our changing technological and
operational factors.
This effort, called JIE, is intended to enable and empower
our military's decisionmaking and our most important asset, our
people, by providing warfighters and our mission partners a
shared IT infrastructure that consists of federated networks
with common configurations, management, and a common set of
enterprise services with a single security architecture. I know
that is a mouthful but it does describe what we are intending.
The ultimate benefit of the JIE is to the commander in the
field. It allows for more innovative integration of ITs,
operations, and cybersecurity; its related tempo is more
appropriate to our fast-paced operational conditions.
Some of the other benefits are, as I mentioned, a single
security architecture that enables our cyber operators at every
level to see the status of the networks for operations and
security, and provide standard resilience and cyber maneuver
options for cyber forces. The complexity of our networks today
makes it very difficult for our cyber operators to see who is
on our network and be able to defend our networks as we would
like them to.
As you mentioned, the consolidation of our data centers,
which also includes our operation centers and our help desks,
will enable users and systems to have timely and secure access
to the data and services needed to accomplish their assigned
missions regardless of their location.
Finally, a consistent DOD-wide IT architecture that defines
our enterprise standards and supports fielding of DOD
capabilities in support of information sharing, as well as the
sustainment and integration of legacy systems, will be an
important part of the way that we not only acquire systems, but
the way we operate and sustain.
DOD plans on utilizing the Services' existing programs'
initiatives and mainly our technical refresh dollars to deploy
and migrate to JIE standards utilizing specific implementation
guidance. Simply stated, JIE will help improve our ability to
field capability faster and more efficiently, and allow us to
be better stewards of taxpayers' resources.
Now, in line with this, it is also important that we take
actions necessary to increase visibility into our IT budgets
and spending patterns, and strengthen our analysis of IT
investments as part of our overall governance and oversight
processes. I am working very closely with my colleagues here to
identify ways to leverage DOD's three core processes: our
requirements, budgeting, and acquisition, to address the
systemic conditions resulting in our current stovepiped IT
infrastructure. This is critical if we are to achieve the
agility and responsiveness from IT that our warfighters demand.
Working closely not only with my colleagues here but the
Comptroller and the Cost Assessment and Program Evaluation
Office, we will deliver the flexible, agile acquisition
processes that Ms. McFarland spoke of that really meet our
requirements and budgeting processes to institutionalize the
agility and flexibility necessary for this domain.
Finally, maintaining information dominance for our
warfighters is critical to our national security. The efforts
outlined above will ensure that DOD's information capabilities
provide better mission effectiveness and security, and are
delivered in a manner that makes the most efficient use of our
financial resources.
I very much appreciate your interest and your staff's
interest in our efforts. I look forward to your questions.
[The prepared statement of Ms. Takai follows:]
Prepared Statement by Ms. Teresa M. Takai
introduction
Good afternoon Madam Chairwoman and distinguished members of the
subcommittee. Thank you for this opportunity to testify before the
subcommittee today on information technology (IT) acquisition
processes, business transformation, and the Department of Defense (DOD)
management practices. I am Teri Takai, DOD's Chief Information Officer
(CIO). My office is responsible for ensuring DOD has access to the
information, the communication networks, and the decision support tools
needed to successfully execute our warfighting and business support
missions. Our mission is to ensure that these capabilities can be
depended upon in the face of threats by a capable adversary in all
conditions from peace to war, and particularly in the face of ever-
increasing cyber threats. My focus in accomplishing these
responsibilities is to ensure the effectiveness, reliability, security,
and efficiency of DOD's IT capabilities for the warfighter, and ensure
we are able to take advantage of future technology innovations to
support DOD's missions.
I would like to give you a broad overview of DOD's IT landscape;
summarize recent directions from the Secretary of Defense to strengthen
the DOD CIO; and describe the Joint Information Environment (JIE),
DOD's multiyear effort to restructure much of the underlying network,
computing, and cyber security of DOD so as to make us more agile in
deploying new decision support capabilities, make us better able to
mount cyber defense of our core DOD missions, and make us more
efficient and better stewards of taxpayer resources. I will also
briefly describe some of the activities underway in my office related
to my responsibilities for overseeing Positioning, Navigation, and
Timing (PNT) and spectrum.
overview of dod's information technology
DOD's fiscal year 2014 IT budget request was $39.6 billion and
included funding for a broad variety of IT, ranging from command and
control systems, commercial satellite communications, and tactical
radios to desktop computers, server computing, enterprise services like
collaboration and electronic mail, and DOD business systems. These
investments support mission critical operations that must be delivered
both on the battlefield and in an office environment. They also provide
capabilities that enable the Commander in Chief to communicate with and
direct the military, and that support command and control,
intelligence, logistics, medical and other warfighting and business
support functions throughout DOD. Included in the overall IT budget are
DOD's cybersecurity activities and efforts. These are designed to
ensure that essential DOD missions work well in the face of cyber
attacks. These cybersecurity efforts continue to receive the highest-
level attention and support of DOD.
secretary of defense organizational review
Recently Secretary of Defense Hagel issued direction to strengthen
the role of the DOD CIO. Specifically he affirmed the importance of my
office as an Office of the Secretary of Defense Principal Staff
Assistant with the responsibilities listed above. As well, he directed
actions to add functions, expand authorities, and restore stature to
the DOD CIO, with a priority focus on advancing the JIE as a special
interest item for the Secretary. The Secretary also directed my office
to improve visibility, oversight, and governance of IT resources. He
reaffirmed the critical importance of addressing the challenges posed
by cybersecurity.
My office has completed the development of a plan of action and
milestones to implement the Secretary's direction. We are taking
actions necessary to increase visibility into IT budgets and spending
patterns, and are strengthening our analysis of IT investments and
evolving our processes for IT governance and oversight. We are working
closely with the DOD's Deputy Chief Management Officer (DCMO) and with
the DOD Under Secretary of Defense (Acquisition, Technology, and
Logistics) (USD(AT&L)) to strengthen the oversight and management of IT
Business Systems.
information technology acquisition
Consistent with the Secretary's direction, my office is working
closely with others in DOD to identify ways to adapt our existing
processes to ensure adaptability to technological advances and ability
to defend the network against emerging cybersecurity threats. In
particular, we are examining how best to leverage DOD's three core
processes--requirements, budgeting, and acquisition--to address the
systemic conditions resulting in DOD's stove-piped IT infrastructure.
This is critical if we are to achieve the agility and responsiveness
from IT systems that warfighters both demand and deserve, and improve
our ability to defend against cyber attacks. My office is working
closely with the offices of the DCMO, USD(AT&L), the Comptroller, the
Director of Cost Assessment and Program Evaluation and others to
develop a flexible, agile acquisition process that also addresses the
DOD's requirements and budgeting processes to institutionalize the
agility and flexibility necessary in cyberspace, while ensuring
compliance with enterprise standards.
joint information environment
Mission success depends upon the ability of our military commanders
and civilian leaders to act decisively based on the most timely and
accurate data and information. Recognizing that information is a
strategic asset, DOD is undertaking an ambitious effort to re-align and
restructure how our many IT networks are constructed, operated and
defended in order to provide better information access to the user,
improve our ability to not only defend the networks and the data, but
make it responsive to constantly changing technological and operational
factors. The challenge is amplified because capable adversaries are
extremely active in seeking to penetrate DOD systems, compromise
command and control, to steal or destroy sensitive and strategic
information, and to gain an upper hand on U.S. forces and warfighting
capability. Consequently, DOD is pursuing the alignment of existing
vast IT networks into JIE. First and foremost, JIE will improve mission
effectiveness. It is intended to enable and empower our military's
decisive edge--our people--by providing warfighters and our mission
partners a shared IT infrastructure consisting of federated networks
with common configurations and management, and a common set of
enterprise services, within a single security architecture.
The JIE will change the way we assemble, configure, and use new and
legacy information technologies. It will consist of enterprise level
network operations centers that will reduce the complexity and
ambiguity of seeing and controlling the numerous networks within DOD; a
set of core data centers--significantly reducing the current number of
DOD data centers while ensuring the information is secured and
available where needed; and standard, single security architecture that
will reduce the number of organizationally owned firewalls, unique
routing algorithms, and inefficient routing of information that
currently exists today. Together with the single, authoritative
identity management and access control, emerging cloud capability,
mobile computing devices and data-focused applications, and common IT
enterprise services, JIE will provide the information environment to
flexibly create, store, disseminate, and access data, applications, and
other computing services when and where needed. It will better protect
the integrity of information from unauthorized access while increasing
the ability to respond to security breaches across the system as a
whole.
The ultimate beneficiary of JIE is the commander in the field,
allowing for more innovative integration of information technologies,
operations, and cyber security at a tempo more appropriate to today's
fast-paced operational conditions. Specific benefits include:
A standardized information and security architecture
across software, servers, the network, mobile and fixed user
computing, and identity and access control systems. Users and
systems will be able to trust their connection from end to end
with the assurance that the information and systems involved in
a mission are correct and working even during a cyber attack.
The JIE architecture will enable cyber operators at every level
to see the status of the networks for operations and security
and will provide standard resilience and cyber maneuver options
for all cyber forces. This will minimize complexity for a
synchronized cyber response, maximize operational efficiencies,
and reduce risk. Most importantly, unlike the one size fits all
networks DOD has now, the JIE will provide mission commanders
more freedom to take operational risk with the networks since
the risks can be contained to the decision support and systems
specifically needed for that mission.
Consolidation of data centers, operations centers, and
help desks will enable users and systems to have timely and
secure access to the data and services needed to accomplish
their assigned missions, regardless of their location.
A consistent DOD-wide IT architecture that defines
enterprise standards and supports effective fielding of DOD
capabilities in support of information sharing, as well as
sustainment and integration of legacy systems.
DOD plans on utilizing the Services' existing programs,
initiatives, and technical refresh to deploy or migrate to JIE
standards utilizing specific implementation guidance.
Data Center Consolidation
An important aspect within JIE is the active consolidation of DOD's
numerous data centers. These efforts are consistent with and support
the Federal Data Center Consolidation Initiative being led by the
Federal CIO. DOD has established four classes of data centers to assist
in the development and execution of our data center consolidation
strategy. These four types of data centers are:
Core Data Center (CDC)--delivers enterprise services
and provides primary migration point for systems and
applications; these are our most important data centers,
strategically located to provide speed of access to global
information requirements;
Installation Processing Node--provides local services
to DOD installations and hosting systems not suited for CDCs,
these will be located at the installation level, and will
consolidate the duplicative data centers at the installations;
Special Purpose Processing Node--provides compute and
storage for fixed infrastructure or facilities, such as test
ranges, labs, medical diagnostic equipment, and machine shops;
and
Tactical/Mobile Processing Node--provides support to
the deployed warfighter at the tactical edge; these unique
``data centers'' directly support the warfighter in a
disadvantaged or tactical environment, but connect back into
the Generating Force information sources and core data centers.
DOD's data center consolidation efforts have been aided by section
2867 of P.L. 112-81, which was originally sponsored by the Senate Armed
Services Committee. We have made significant progress in our data
center consolidation, and have closed 277 data centers as of the first
quarter pf fiscal year 2014.
Cloud Computing
Cloud Computing is becoming a critical component of the JIE and
DOD's IT modernization efforts and will enable users the access to data
anywhere, anytime on any approved device. One key objective is to drive
the delivery and adoption of a secure, dependable, resilient multi-
provider enterprise cloud computing environment that will enhance
mission effectiveness and improve IT efficiencies. Cloud services will
enhance warfighter mobility by providing secure access to mission data
and enterprise services regardless of where the user is located and
what device he or she uses.
My office continues to investigate new ways to leverage commercial
cloud computing innovations and efficiencies to improve DOD. The nature
of DOD's mission, and the risk to national security if DOD information
were to be compromised, requires the careful evaluation of commercial
cloud services, especially in areas of cybersecurity, continuity of
operations, and resilience. To improve our cybersecurity posture with
regards to commercial cloud computing, we are participating in the
Federal Risk Authorization and Management Program and updating our own
cybersecurity policies.
There are two key components of DOD's cloud strategy. The first
component is the establishment of a private enterprise cloud
infrastructure that supports the full range of DOD activities in
unclassified and classified environments. The second is DOD's adoption
of commercial cloud services that can meet DOD's cybersecurity needs
while providing capabilities that are at least as effective and
efficient as those provided internally.
Enterprise Services
As previously noted, enterprise services are those global
applications that can be used by many, if not all users within DOD.
They are a key element of achieving more effective operations and
improved security across DOD. An example of this is Defense Enterprise
Email, which is an enterprise messaging tool, built by consolidating
existing disparate email servers into a global capable server and
operated by the Defense Information Systems Agency (DISA) on a fee-for-
service basis. The result is a common DOD enterprise email and contact
address list and consolidated email service.
The enterprise directory service is being incorporated by many
organizations in order to provide baseline authoritative enterprise
identity data that is shareable across the enterprise via an automated
synchronization service. Defense Enterprise Email is currently used by
DISA, the U.S. Army, the Joint Staff, the Office of the Secretary of
Defense, Defense Manpower Data Center, Office of Naval Research, Navy
Recruiting Command, HQ Air Force, Air Force District Washington, U.S.
European Command, U.S. Southern Command, U.S. Transportation Command,
U.S. Africa Command, and U.S. Forces Japan. As of February 2014, there
are 1.6 million enterprise email users on DOD's unclassified network
and 150,000 users on the DOD Secret network, and continued adoption and
consolidation to this capability is expected in the future.
cybersecurity
Cybersecurity is one of the highest priorities of the
administration and DOD. The primary cybersecurity goal of my office is
ensuring that essential DOD missions are dependable and resilient in
the face of cyber exploits and attacks by a capable adversary. This is
also a primary concern driving the other improvement efforts,
particularly JIE. This focus on mission assurance, rather than on
computer or system security, is one of the primary changes in DOD's
cybersecurity approach. This approach enables us to move from an
approach of bolting on cyber security solutions to one where resilient,
mission assurance, and cyber security characteristics will be built
into the total information environment.
JIE gives certain operational commanders more freedom to take
operational cyber security risks. We accomplish this by using ``risk
zones'' in the design of the JIE computing and networks; these zones
help keep the risks assumed by a particular mission from spilling over
into other missions. This is also a significant change from today's DOD
networks which impose more operational constraints on commanders. Other
primary cybersecurity goals include improved safe sharing with whatever
partners a mission requires, and a continued need to keep a secret.
Through refinement of the JIE concept, including the JIE single
security architecture, we have concluded that all of these cyber
security goals can be achieved, and DOD will have better joint
warfighting decision support, better operational and acquisition
agility, and better efficiency.
Like other IT efforts, cybersecurity is a team sport within DOD,
and these efforts span many organizations. In particular, I work
closely with others in the Office of the Secretary of Defense, U.S.
Cyber Command, the Military Departments, and Defense Agencies to ensure
cybersecurity issues are being addressed.
Single Security Architecture
A key priority in the last year has been the development of a
unifying, joint cybersecurity approach for the design of the JIE. This
is the JIE Single Security Architecture (SSA). Although many of the
DOD's cyber security initiatives are common across all DOD
organizations, each Military Service has had the ability to make
important decisions about how to design computing and networks and
about how to structure cyber defenses. This has led to several
challenges, such as diversity in the cybersecurity protections of the
DOD that does not provide a common level of protection for joint
missions (because the IT for these missions is designed and operated by
many organizations), and sometimes interferes with the collaborative
attack detection, diagnosis, and reaction so necessary in a complex
organization like DOD. Finally, the challenge caused by this diversity
can interfere with a joint commander's ability to share information
with external mission partners.
To solve these problems, the SSA provides for a common approach to
the structure and defense of computing and the networks across all DOD
organizations. This engineering of the cyber security approach ``end-
to-end'' will significantly improve DOD's ability to resist cyber-
attacks; to dampen the spread of successful attacks; and to detect,
diagnose, and react to attacks in ways that are optimized for joint
missions. Owing to the standardization and cyber data sharing of JIE,
cyber defenders will have broad visibility into the computing and
networks, and via secure remote management and automation, they will be
able to much more quickly construct and execute defensive actions. In
addition, the risk containment zones the SSA defines in the server
computing and the network will enable joint commanders to better
contain cyber risk to mission while sharing as broadly with external
partners as a mission requires. It will also make development of new
decision support capabilities simpler and easier since many program
offices will not need to worry about most cybersecurity protections,
but will instead be able to build software applications on top of the
standard protections and situational awareness capabilities provided by
JIE.
The DOD CIO published a new Strategy for Defending Networks,
Systems, and Data in October 2013. The strategy identifies strategic
imperatives to ensure the protection, integrity, and assurance of DOD
cyber assets. It is focused in four key areas: establishing a Resilient
Cyber Defense Posture; Transform Cyber Defense Operations; Enhance
Cyber Situational Awareness; and Assure Survivability against Highly
Sophisticated Cyber Attacks. In the near term, we will be finalizing
the Implementation Plan for the strategy. To ensure success going
forward, we will collaborate closely with others in DOD.
information technology and cyber workforce development
A critical component of readiness is a workforce that is trained
and equipped. DOD is in the process of implementing a comprehensive
strategy to transform its legacy IT and information assurance
personnel, as well as critical personnel in non-traditional IT
occupations, into a cohesive cyberspace workforce which includes a
strong cybersecurity workforce component. The DOD Cyberspace Workforce
Strategy is focused on recruiting, training, and retaining the
necessary workforce to build and operate our networks as well as defend
U.S. national interests in cyberspace. The workforce must be properly
sized and properly trained, and there must be career progression that
encourages growth and development of broad ranging skillsets, such as
building a defensible architecture, acquiring secure technologies,
securely operating systems and networks, analyzing cyber threats, and
planning cyberspace operations. We are working across DOD to realize
competitive hiring and retention initiatives, and institute robust
training and education programs, to achieve a world class, mission
ready cyberspace workforce.
Space-based PNT provides crucial capability to military, civil, and
commercial users worldwide. We are working to better integrate the
services of the Global Positioning Systemas the primary means of
delivering PNT which provides our Nation and allies the ability to
precisely navigate anywhere in the world. Our PNT architecture provides
our Nation and allies precise target location, the ability to strike
with a minimum of collateral damage, navigation capabilities that
support logistics, command and control, friendly force tracking, and
precise timing. This latter feature is critical to encryption,
synchronization, and integration of data networks within the
communications and cyber enterprises. With this understanding, we are
working, as a high priority, several infrastructure upgrades to protect
this critical piece of cyber terrain.
Spectrum has become increasingly important not only to DOD's
missions, but to consumers and the economy of the Nation as a whole.
The use of the electromagnetic spectrum continues to be a critical
enabler of our warfighting capabilities and DOD's cyber operations.
Defense leadership is cognizant and sensitive to the unprecedented
spectrum demands resulting from DOD's increasing reliance on spectrum-
dependent technologies and the rapid modernization of commercial mobile
devices. Fully recognizing the linkages between national security and
economic prosperity, the DOD is fully committed to the President's 500
MHz initiative to make spectrum available for commercial broadband use,
the implementation of more effective and efficient use of this finite
radio-frequency spectrum and the development of solutions to meet these
goals while ensuring national security and other Federal capabilities
are preserved.
To that end, DOD has developed a plan that will make 25MHz of
spectrum available to commercial industry on a shared basis, thus
achieving a balance between expanding wireless and broadband
capabilities for the Nation and the need for access to support
warfighting capabilities in support of our national security.
conclusion
Maintaining information dominance for the warfighter is critical to
our national security. The efforts outlined above will ensure that
DOD's information capabilities provide better mission effectiveness and
security, and are delivered in a manner that makes the most efficient
use of financial resources. I ask that you strongly support, authorize,
and fund DOD's key cybersecurity and information technology
modernization programs. I want to thank you for your interest.
Senator Shaheen. Thank you very much.
Mr. Powner.
STATEMENT OF DAVID A. POWNER, DIRECTOR, INFORMATION TECHNOLOGY
AND MANAGEMENT ISSUES, GOVERNMENT ACCOUNTABILITY OFFICE
Mr. Powner. Chairwoman Shaheen, Ranking Member Ayotte, and
members of the subcommittee, I appreciate the opportunity to
testify this afternoon on improving IT acquisition at DOD.
Of the $82 billion the Federal Government spends on IT
annually, DOD spends almost half of this, $40 billion. Of that,
about $25 billion is spent on legacy systems. Therefore, it is
important that DOD not only acquires new systems, on time and
within budget, but that it also efficiently manages existing
systems.
Regarding systems acquisitions, too often we hear of failed
projects like ECSS. These complex projects, though, can be
delivered successfully when there is appropriate transparency,
accountability, oversight, and program management.
Starting with transparency, the IT Dashboard was put in
place to highlight the status and CIO assessments of
approximately 700 major IT investments across 27 departments.
This public dissemination of each project's status is to allow
the Office of Management and Budget (OMB) and Congress to hold
agencies accountable for results and performance. Many agencies
have accurate information on the Dashboard, and that
information is used to tackle troubled projects. DOD does not.
DOD reports 93 IT investments on the Dashboard--81 are in green
status, meaning low risk, 12 are in yellow status, meaning
medium risk, and there are no projects rated as high risk, or
red.
Chairwoman Shaheen, there are many problems here. First,
some of these projects should be red, based on the review that
you currently mentioned in your opening statement. Second, the
data is not always current since CIO ratings have not been
updated since September 2012. Third, there are major
investments that are not even listed on the Dashboard.
Given the amount DOD spends annually on IT and its not-so-
stellar track record, Congress absolutely needs a clear picture
of what these investments are and how they are performing.
Therefore, DOD needs to ensure that all projects are on the
Dashboard and accurately updated.
Once this transparency is improved, key IT executives need
to be accountable, along with the appropriate business leaders
responsible for these projects.
We have seen successful oversight performed by using a
tiered portfolio-based governance structure, meaning that not
all DOD major investments need to be overseen exactly the same
way. Some of the 93 investments can be delegated below the CIO
level. Most should be overseen by the CIO, and some of DOD's
major priorities likely demand oversight above the CIO level.
Turning to program management, we recently issued a report
that showcases successful IT acquisitions. One of those
projects was the Defense Information Systems Agency's (DISA)
global combat support system. Several best practices increased
the likelihood that IT acquisitions will be delivered on time
and within budget. This starts with getting the requirements
right by involving the right users and prioritizing those
requirements. A big takeaway from these successful stories was
that each of these successful investments was an increment of a
larger project. Tackling projects in increments is a best
practice.
We have ongoing work that is currently looking at agencies,
including DOD, and how they are tackling these large
investments in more manageable pieces. That report will be
issued in the spring and will show that DOD is not acquiring
systems in small enough increments.
Turning now to operational systems, OMB started a data
center consolidation effort in 2010 to address the Government's
low server utilization rates estimated on average at 10 to 15
percent, far below the industry standard of 60 percent. This
effort was to result in $3 billion in savings across all
departments. DOD has done a really good job when it comes to
data centers, Chairwoman Shaheen. They have identified 2,000
centers, to date. They have closed over 250 centers, and they
have reported $875 million in savings. They have also reported
to us in the current review that their savings alone could
match OMB's government-wide goal of $3 billion by the end of
2015.
OMB recently expanded the data center consolidation effort
into a larger initiative to eliminate additional duplicative
spending in administrative and business systems. As part of
this, DOD identified 26 opportunities where duplication existed
in areas like enterprise software, security infrastructure, and
network operations. DOD estimates that these 26 opportunities,
which include their data center consolidation efforts, could
result in savings that exceed $5 billion. Given the magnitude
of DOD's potential savings associated with duplicative systems
and data center consolidation, it is essential that they have
support for and track these savings, and not use poor systems
or processes as an excuse for not realizing billions in
savings.
In summary, by tackling duplicative IT systems and
consolidating data centers, DOD can save over $5 billion
through 2015 alone. Systems acquisition performance can be
greatly improved by reporting accurately and timely on the IT
Dashboard, improving governance, acquiring incrementally, and
following program management best practices.
This concludes my statement. I would be pleased to respond
to questions.
[The prepared statement of Mr. Powner follows:]
Prepared Statement by Mr. David A. Powner
Chairwoman Shaheen, Ranking Member Ayotte, and members of the
subcommittee: I am pleased to be here today to discuss how best
practices and major information technology (IT) reform initiatives can
help the Department of Defense (DOD) better acquire and manage IT
investments. As reported to the Office of Management and Budget (OMB),
Federal agencies plan to spend at least $82 billion on IT in fiscal
year 2014. Of this amount, DOD plans to spend about $39.6 billion, or
48 percent of the government's total IT spending. Given the size of the
department's investments and the criticality of many of these systems
to the security and defense of the Nation, it is important that DOD
successfully acquire them--that is, ensure that they are acquired on
time and within budget, and that they deliver expected benefits and
results.
However, as we have previously reported and testified, Federal IT
projects too frequently fail and incur cost overruns and schedule
slippages while contributing little to mission-related outcomes.\1\
During the past several years, we have issued multiple reports and
testimonies on best practices for major acquisitions and Federal
initiatives to acquire and improve the management of IT investments.\2\
In those reports, we made numerous recommendations to Federal agencies
and OMB to further enhance the management and oversight of IT programs.
Further, we highlighted several examples of DOD investments that failed
to, or only partially delivered results within planned cost and
schedule estimates.
---------------------------------------------------------------------------
\1\ See, for example, Government Accountability Office (GAO),
Information Technology: OMB and Agencies Need to More Effectively
Implement Major Initiatives to Save Billions of Dollars, GAO-13-796T
(Washington, DC: July 25, 2013); Secure Border Initiative: DHS Needs to
Reconsider Its Proposed Investment in Key Technology Program, GAO-10-
340 (Washington, DC: May 5, 2010); and Polar-Orbiting Environmental
Satellites: With Costs Increasing and Data Continuity at Risk,
Improvements Needed in Tri-agency Decisionmaking, GAO-09-564
(Washington, DC: June 17, 2009).
\2\ See, for example, GAO, Information Technology: Leveraging Best
Practices to Help Ensure Successful Major Acquisitions, GAO-14-183T
(Washington, DC: Nov. 13, 2013); Information Technology: Additional
Executive Review Sessions Needed to Address Troubled Projects, GAO-13-
524 (Washington, DC: June 13, 2013); Data Center Consolidation:
Strengthened Oversight Needed to Achieve Billions of Dollars in
Savings, GAO-13-627T (Washington, DC: May 14, 2013); Data Center
Consolidation: Strengthened Oversight Needed to Achieve Cost Savings
Goal, GAO-13-378 (Washington, DC: Apr. 23, 2013); Information
Technology Dashboard: Opportunities Exist to Improve Transparency and
Oversight of Investment Risk at Select Agencies, GAO-13-98 (Washington,
DC: Oct. 16, 2012); Data Center Consolidation: Agencies Making Progress
on Efforts, but Inventories and Plans Need to Be Completed, GAO-12-742
(Washington, DC: July 19, 2012); Information Technology: Critical
Factors Underlying Successful Major Acquisitions, GAO-12-7 (Washington,
DC: Oct. 21, 2011); Information Technology: Continued Attention Needed
to Accurately Report Federal Spending and Improve Management, GAO-11-
831T (Washington, DC: July 14, 2011); and Information Technology:
Investment Oversight and Management Have Improved but Continued
Attention Is Needed, GAO-11-454T (Washington, DC: Mar. 17, 2011).
---------------------------------------------------------------------------
As discussed with subcommittee staff, I am testifying today on how
best practices and major IT reform initiatives can help DOD better
acquire and manage IT investments. Accordingly, my testimony
specifically focuses on the critical success factors of major IT
acquisitions and their importance to improving IT investment oversight
and management. I will also address several initiatives put into place
by OMB to address the transparency of IT investments and to review
troubled and duplicative existing projects. All work on which this
testimony is based was performed in accordance with generally accepted
government auditing standards or all sections of GAO's Quality
Assurance Framework that were relevant to our objectives. Those
standards and the framework require that we plan and perform our audits
and engagements to obtain sufficient, appropriate evidence to provide a
reasonable basis for our findings and conclusions based on our audit
objectives; the framework also requires that we discuss any limitations
in our work. We believe that the information, data, and evidence
obtained and the analysis conducted provide a reasonable basis for our
findings and conclusions based on our objectives. A more detailed
discussion of the objectives, scope, and methodology of this work is
included in each of the reports on which this testimony is based.\3\
---------------------------------------------------------------------------
\3\ GAO-13-524; GAO, Information Technology Reform: Progress Made;
More Needs to Be Done to Complete Actions and Measure Results, GAO-12-
461 (Washington, DC: Apr. 26, 2012); IT Dashboard: Accuracy Has
Improved, and Additional Efforts Are Under Way to Better Inform
Decision Making, GAO-12-210 (Washington, DC: Nov. 7, 2011); GAO-12-7;
Information Technology: OMB Has Made Improvements to Its Dashboard, but
Further Work Is Needed by Agencies and OMB to Ensure Data Accuracy,
GAO-11-262 (Washington, DC: Mar. 15, 2011); and Information Technology:
OMB's Dashboard has Increased Transparency and Oversight, but
Improvements Needed, GAO-10-701 (Washington, DC: July 16, 2010).
---------------------------------------------------------------------------
background
IT should enable government to better serve the American people.
However, despite spending hundreds of billions on IT since 2000, the
Federal Government has experienced failed IT projects and has achieved
little of the productivity improvements that private industry has
realized from IT. Too often, Federal IT projects run over budget,
behind schedule, or fail to deliver results. In combating this problem,
proper oversight is critical.
Both OMB and Federal agencies have key roles and responsibilities
for overseeing IT investment management and OMB is responsible for
working with agencies to ensure investments are appropriately planned
and justified. However, as we have described in numerous reports,\4\
although a variety of best practices exist to guide their successful
acquisition, Federal IT projects too frequently incur cost overruns and
schedule slippages while contributing little to mission-related
outcomes.
---------------------------------------------------------------------------
\4\ See, for example, GAO, FEMA: Action Needed to Improve
Administration of the National Flood Insurance Program, GAO-11-297
(Washington, DC: June 9, 2011); GAO-10-340; Secure Border Initiative:
DHS Needs to Address Testing and Performance Limitations That Place Key
Technology Program at Risk, GAO-10-158 (Washington, DC: Jan. 29, 2010);
and GAO-09-564.
---------------------------------------------------------------------------
Agencies have reported that poor-performing projects have often
used a ``big-bang'' approach--that is, projects that are broadly scoped
and aim to deliver capability several years after initiation. For
example, in 2009 the Defense Science Board reported that DOD's
acquisition process for IT systems was too long, ineffective, and did
not accommodate the rapid evolution of IT.\5\ The board reported that
the average time to deliver an initial program capability for a major
IT system acquisition at DOD was over 7 years.
---------------------------------------------------------------------------
\5\ Defense Science Board, Report of the Defense Science Board Task
Force on Department of Defense Policies and Procedures for the
Acquisition of Information Technology (Washington, DC: March 2009).
---------------------------------------------------------------------------
As previously mentioned, and as seen in figure 1, Defense accounts
for 48 percent of the fiscal year 2014 Federal Government's IT budget.
Of the department's $39.6 billion IT budget, approximately 14
percent is to be spent on classified systems. Of the remaining $34
billion, about one-quarter is to be spent on acquiring new investments,
and the rest is to be spent operating and maintaining existing or
legacy systems. This is illustrated in figure 2.
Further, over the past several years, we have reported that overlap
and fragmentation among government programs or activities could be
harbingers of unnecessary duplication.\6\ Thus, the reduction or
elimination of duplication, overlap, or fragmentation could potentially
save billions of tax dollars annually and help agencies provide more
efficient and effective services.
---------------------------------------------------------------------------
\6\ GAO, 2013 Annual Report: Actions Needed to Reduce
Fragmentation, Overlap, and Duplication and Achieve Other Financial
Benefits, GAO-13-279SP (Washington, DC: Apr. 9, 2013), Annual Report:
Opportunities to Reduce Duplication, Overlap and Fragmentation, Achieve
Savings, and Enhance Revenue, GAO-12-342SP (Washington, DC: Feb. 28,
2012), and Opportunities to Reduce Potential Duplication in Government
Programs, Save Tax Dollars, and Enhance Revenue, GAO-11-318SP
(Washington, DC: Mar. 1, 2011).
---------------------------------------------------------------------------
OMB Has Launched Major Initiatives for Overseeing Investments
OMB has implemented a series of initiatives to improve the
oversight of underperforming investments, more effectively manage IT,
and address duplicative investments. These efforts include the
following:
IT Dashboard. Given the importance of transparency,
oversight, and management of the government's IT investments,
in June 2009 OMB established a public website, referred to as
the IT Dashboard, that provides detailed information on
approximately 700 major IT investments at 27 Federal agencies,
including ratings of their performance against cost and
schedule targets. The public dissemination of this information
is intended to allow OMB, other oversight bodies including
Congress, and the general public to hold agencies accountable
for results and performance. Among other things, agencies are
to submit Chief Information Officer (CIO) ratings, which,
according to OMB's instructions, should reflect the level of
risk facing an investment on a scale from 1 (high risk) to 5
(low risk) relative to that investment's ability to accomplish
its goals. Ultimately, CIO ratings are assigned colors for
presentation on the Dashboard, according to the five-point
rating scale, as illustrated in table 1.
TechStat reviews. In January 2010, the Federal CIO
began leading TechStat sessions--face-to-face meetings to
terminate or turnaround IT investments that are failing or are
not producing results. These meetings involve OMB and agency
leadership and are intended to increase accountability and
transparency and improve performance. Subsequently, OMB
empowered agency CIOs to hold their own TechStat sessions
within their respective agencies. According to the former
Federal CIO, the efforts of OMB and Federal agencies to improve
management and oversight of IT investments have resulted in
almost $4 billion in savings.
Federal Data Center Consolidation Initiative.
Concerned about the growing number of Federal data centers, in
February 2010 the Federal CIO established the Federal Data
Center Consolidation Initiative. This initiative's four high-
level goals are to promote the use of ``green IT'' \7\ by
reducing the overall energy and real estate footprint of
government data centers; reduce the cost of data center
hardware, software, and operations; increase the overall IT
security posture of the government; and shift IT investments to
more efficient computing platforms and technologies. OMB
believes that this initiative has the potential to provide
about $3 billion in savings by the end of 2015.
---------------------------------------------------------------------------
\7\ ``Green IT'' refers to environmentally sound computing
practices that can include a variety of efforts, such as using energy
efficient data centers, purchasing computers that meet certain
environmental standards, and recycling obsolete electronics.
---------------------------------------------------------------------------
PortfolioStat. In order to eliminate duplication, move
to shared services, and improve portfolio management processes,
in March 2012 OMB launched the PortfolioStat initiative.
Specifically, PortfolioStat requires agencies to conduct an
annual agencywide IT portfolio review to, among other things,
reduce commodity IT \8\ spending and demonstrate how their IT
investments align with the agency's mission and business
functions.\9\ PortfolioStat is designed to assist agencies in
assessing the current maturity of their IT investment
management process, making decisions on eliminating duplicative
investments, and moving to shared solutions in order to
maximize the return on IT investments across the portfolio. OMB
believes that the PortfolioStat effort has the potential to
save the government $2.5 billion over the next 3 years by, for
example, consolidating duplicative systems.
---------------------------------------------------------------------------
\8\ According to OMB, commodity IT includes services such as IT
infrastructure (data centers, networks, desktop computers and mobile
devices); enterprise IT systems (e-mail, collaboration tools, identity
and access management, security, and web infrastructure); and business
systems (finance, human resources, and other administrative functions).
\9\ OMB, Implementing PortfolioStat, Memorandum, M-12-10
(Washington DC: Mar. 30, 2012).
---------------------------------------------------------------------------
opportunities exist to improve defense's acquisition and management of
major it investments
Given the magnitude of DOD's annual IT budget, which was $39.6
billion in fiscal year 2014, it is important that the department
leverage all available opportunities to ensure that its IT investments
are acquired in the most effective manner possible. To do so, the
department can rely on IT acquisition best practices, and initiatives
such as OMB's IT Dashboard, and OMB-mandated TechStat sessions.
Best Practices Are Intended to Help Ensure Successful Major
Acquisitions
In 2011, we identified seven successful investment acquisitions and
nine common factors critical to their success, and noted that the
factors support OMB's objective of improving the management of (1)
large-scale IT acquisitions across the Federal Government, and (2) wide
dissemination of these factors could complement OMB's efforts.\10\
Specifically, we reported that Federal agency officials identified
seven successful investment acquisitions, in that they best achieved
their respective cost, schedule, scope, and performance goals.\11\
Notably, all of these were smaller increments, phases, or releases of
larger projects. For example, the DOD investment in our sample, Defense
Global Combat Support System-Joint (Increment 7), was a smaller portion
of an ongoing investment. The common factors critical to the success of
three or more of the seven investments are generally consistent with
those developed by private industry and are identified in table 2.
---------------------------------------------------------------------------
\10\ GAO-12-7.
\11\ The seven investments were: (1) Commerce's Decennial Response
Integration System; (2) Defense's Defense Global Combat Support System-
Joint (Increment 7); (3) Department of Energy's Manufacturing
Operations Management Project; (4) DHS's Western Hemisphere Travel
Initiative; (5) Department of Transportation's Integrated Terminal
Weather System; (6) Internal Revenue Service's Customer Account Data
Engine 2; and (7) Veterans Affairs Occupational Health Recordkeeping
System.
---------------------------------------------------------------------------
Regarding DOD's Global Combat Support System-Joint (Increment 7),
officials cited six factors that were critical to this investment's
success. Among others, officials noted that senior department
executives supported the program, end users and stakeholders were
involved in the development of requirements which were then
prioritized, and government and contractor staff were consistent and
stable.
IT Dashboard Can Improve the Transparency Into and Oversight of Defense
IT Investments
The IT Dashboard serves an important role in allowing OMB and other
oversight bodies to hold agencies accountable for results and
performance. However, we reported in October 2012 that opportunities
existed to improve transparency and oversight of investment risk at
selected agencies, including DOD.\12\ Specifically, we found that among
the agencies we reviewed, DOD was unique in that its CIO ratings on the
Dashboard reflected additional considerations beyond OMB's
instructions. For example, briefing slides prepared for DOD's 2011 CIO
rating exercise identified the need to ``balance'' CIO ratings, and
advised that yellow or red ratings could lead to an OMB review. That
report further noted that DOD did not rate any of its investments as
either high or moderately high risk and that in selected cases, these
ratings did not appropriately reflect significant cost, schedule, and
performance issues reported by GAO and others.
---------------------------------------------------------------------------
\12\ GAO-13-98.
---------------------------------------------------------------------------
We also highlighted three DOD investments that experienced
significant performance problems and were part of a GAO high-risk area
(business systems modernization); however, they were all rated low risk
or moderately low risk by the DOD CIO. For example, in early 2012, we
reported that Air Force's Defense Enterprise Accounting and Management
System faced a 2-year deployment delay and an estimated cost increase
of about $500 million from an original life-cycle cost estimate of $1.1
billion (an increase of approximately 45 percent), and that assessments
by DOD users had identified operational problems with the system, such
as data accuracy issues, an inability to generate auditable financial
reports, and the need for manual workarounds.\13\ In July 2012, the DOD
Inspector General reported that the system's schedule delays were
likely to diminish the cost savings it was to provide, and would
jeopardize the department's goals for attaining an auditable financial
statement. DOD's CIO rated the Dense Enterprise Accounting and
Management System low risk or moderately low risk from July 2009
through March 2012.
---------------------------------------------------------------------------
\13\ GAO, DOD Financial Management: Reported Status of Department
of Defense's Enterprise Resource Planning Systems, GAO-12-565R
(Washington, DC: Mar. 30, 2012) and DOD Financial Management:
Implementation Weaknesses in Army and Air Force Business Systems Could
Jeopardize DOD's Auditability Goals, GAO-12-134 (Washington, DC: Feb.
28, 2012).
---------------------------------------------------------------------------
Moreover, DOD did not apply its own risk management guidance to the
ratings, which reduces their value for investment management and
oversight. Therefore, we recommended that DOD ensure that its CIO
ratings reflect available investment performance assessments and its
risk management guidance. DOD concurred with our recommendation.
Nonetheless, the Dashboard currently shows that for DOD's 93 major
investments, 81 are low or moderately low risk (green), 12 are medium
risk (yellow), and none are moderately high or high risk (red).
TechStat Reviews Can Help Highlight and Evaluate Poorly Performing
Investments
TechStat reviews were initiated by OMB to enable the Federal
Government to intervene to turnaround, halt, or terminate IT projects
that are failing or are not producing results. In 2013, we reported
that OMB and selected agencies had held multiple TechStats, but that
additional OMB oversight was needed to ensure that these meetings were
having the appropriate impact on underperforming projects and that
resulting cost savings were valid.\14\ We noted that OMB and selected
agencies had tracked and reported positive results from TechStats, with
most resulting in improved governance. Agencies also reported projects
with accelerated delivery, reduced scope, or termination. We also found
that OMB reported in 2011 that Federal agencies achieved almost $4
billion in life-cycle cost savings as a result of TechStat sessions.
However, we were unable to validate OMB's reported results because OMB
did not provide artifacts showing that it ensured the results were
valid. Among other things, we recommended that OMB require agencies to
report on how they validated the outcomes. OMB generally agreed with
this recommendation.
---------------------------------------------------------------------------
\14\ GAO-13-524.
---------------------------------------------------------------------------
We also found that as of April 2013, OMB reported conducting 79
TechStats on 55 investments at 23 Federal agencies, including DOD. The
four DOD investments that were reviewed included the Expeditionary
Combat Support System, which received three TechStats. We recently
testified that in December 2012, DOD canceled the Expeditionary Combat
Support System after having spent about a billion dollars and missing
multiple milestones, including failure to achieve deployment within 5
years of obligating funds.\15\ The system was to provide the Air Force
with a single, integrated logistics system that was to control and
account for about $36 billion of inventory. We issued several reports
on this system and found that, among other things, the program was not
fully following best practices for developing reliable schedules and
cost estimates.\16\ Among other things, we had recommended that DOD
ensure that any future system deficiencies identified through
independent assessments be resolved or mitigated prior to further
deployment of the Expeditionary Combat Support System.
---------------------------------------------------------------------------
\15\ GAO-13-796T.
\16\ GAO, DOD Business Transformation: Improved Management
Oversight of Business System Modernization Efforts Needed, GAO-11-53
(Washington, DC: Oct. 7, 2010) and DOD Financial Management:
Implementation Weaknesses in Army and Air Force Business Systems Could
Jeopardize DOD's Auditability Goals, GAO-12-134 (Washington, DC: Feb.
28, 2012).
---------------------------------------------------------------------------
In addition to efficiently acquiring IT investments, it is also
important for DOD to efficiently manage its existing IT systems,
especially since the agency plans to spend about $25 billion in fiscal
year 2014 on these systems. To do so, DOD can rely on Federal
initiatives designed to reduce inefficiencies, redundancy, and
duplication in IT investments, as discussed in the following section.
DOD Could Consolidate Hundreds of Data Centers, Leading to Billions in
Savings
In an effort to consolidate the growing number of Federal data
centers, in 2010, OMB launched a data center consolidation initiative.
As part of this initiative, agencies developed plans to consolidate
data centers; however, these plans were incomplete and did not include
best practices. In addition, although we reported that agencies had
made progress on their data center closures, OMB had not determined
initiative-wide cost savings, and oversight of the initiative was not
being performed in all key areas.\17\ Among other things, we
recommended that agencies complete inventories and plans, with which
most agencies agreed. Finally, as part of ongoing follow-up work, we
determined that agencies closed additional data centers, but that the
number of Federal data centers was significantly higher than previously
estimated by OMB. Specifically, we testified in 2013 that OMB reported
approximately 3,133 data centers in December 2011.\18\ However, as of
July 2013, 22 of the 24 agencies had collectively reported 6,836 data
centers in their inventories, an increase of approximately 3,700. Of
these, DOD reported 1,922 facilities. Since DOD's original goal was to
consolidate from 936 data centers to 392 and to save an estimated $2.2
billion, this increase in inventory opens the possibility of
consolidating even more centers and realizing billions in cost savings.
---------------------------------------------------------------------------
\17\ GAO, Data Center Consolidation: Agencies Need to Complete
Inventories and Plans to Achieve Expected Savings, GAO-11-565
(Washington, DC: Jul. 26, 2011) and Data Center Consolidation: Agencies
Making Progress on Efforts, but Inventories and Plans Need to Be
Completed, GAO-12-742 (Washington, DC: Jul. 19, 2012).
\18\ GAO-13-796T.
---------------------------------------------------------------------------
PortfolioStat Can Be Used to Address Duplicative DOD Investments and
Realize Cost Savings
OMB's PortfolioStat initiative is designed to assist agencies in
assessing the current maturity of their IT portfolio management process
and making decisions on eliminating duplication--which we reported on
in February 2012. Specifically, we found 31 potentially duplicative
investments totaling approximately $1.2 billion at DOD, but that the
department had begun taking actions to address this duplication.\19\
For example, according to Defense officials, four of the Navy
acquisition management investments--two for Naval Sea Systems Command
and two for Space and Naval Warfare Systems Command--would be reviewed
to determine whether these multiple support systems are necessary. In
addition, DOD reported that the Air Force was in the process of
developing a single contract writing system to replace the five
potentially duplicative investments we had identified. Additionally, in
September 2013, we found additional potential duplication within DOD's
health care and dental management investments, totaling over $30
million.\20\ Again, department officials described plans to address
this. The existence of this potential duplication reinforces the need
for the department to continue to take firm actions to address IT
duplication and inefficiencies.
---------------------------------------------------------------------------
\19\ GAO, Information Technology: Departments of Defense and Energy
Need to Address Potentially Duplicative Investments, GAO-12-241
(Washington, DC: Feb 17, 2012).
\20\ GAO, Information Technology: Key Federal Agencies Need to
Address Potentially Duplicative Investments, GAO-13-718 (Washington,
DC: Sep. 12, 2013).
---------------------------------------------------------------------------
We recently reported \21\ and testified \22\ on PortfolioStat,
including DOD's efforts to address duplication through the initiative.
Specifically, we noted that, although OMB had previously stated that
PortfolioStat was expected to result in savings of approximately $2.5
billion through fiscal year 2015, the 26 DOD PortfolioStat initiatives
alone, including data center consolidation, were expected by the
department's CIO to save between $3.2 billion and $5.2 billion through
fiscal year 2015, and to result in efficiencies between $1.3 billion
and $2.2 billion per year beginning in fiscal year 2016. However, DOD
was unable to show support for how all of these savings were
calculated, citing a variety of reasons such as dependence on accurate
reporting by departmental components and the lack of granular
information from accounting systems. While recognizing the challenges
the department faces in obtaining the support for consolidation
opportunities identified by its components, we also noted that
obtaining this information is critical to ensuring that planned savings
and cost avoidance are realized.
---------------------------------------------------------------------------
\21\ GAO, Information Technology: Additional OMB and Agency Actions
Are Needed to Achieve Portfolio Savings, GAO-14-65 (Washington, DC:
Nov. 6, 2013); and GAO-13-378.
\22\ GAO-13-685T and GAO-13-627T.
---------------------------------------------------------------------------
Accordingly, we recommended that DOD take steps to improve its
PortfolioStat implementation. The department concurred with our
recommendation to obtain support for estimated savings, but disagreed
with our recommendation to fully describe the consolidation of
commodity IT spending under the CIO in future OMB reporting. The
department stated that it did not intend to follow OMB's guidance to
consolidate commodity IT spending under the CIO. However, by not
following OMB's guidance, DOD is missing an opportunity to achieve
additional cost savings across the department.
To manage its annual investment of over $39 billion in IT, DOD
needs to leverage best practices, improve transparency of its major
investments, and review troubled projects through TechStat reviews. To
do so, DOD can use the common factors critical to the successful
management of large-scale IT acquisitions, which should result in the
more effective delivery of mission-critical systems. Further, DOD needs
to continue to improve the accuracy of its information on the Dashboard
in order to provide greater transparency and even more attention to the
billions of dollars invested in troubled projects. In addition, more
departmental TechStat reviews are needed to focus management attention
on additional troubled projects and establish clear action items to
turn the projects around or terminate them.
With the possibility of over $5.3 billion in savings from the data
center consolidation and PortfolioStat initiatives, DOD should continue
to identify consolidation opportunities in both data centers and
commodity IT. In addition, better support for the estimates of cost
savings associated with the opportunities identified would increase the
likelihood that these savings will be achieved.
Chairwoman Shaheen, Ranking Member Ayotte, and members of the
subcommittee, this completes my prepared statement. I would be pleased
to respond to any questions that you may have at this time.
gao contact and staff acknowledgments
If you or your staffs have any questions about this testimony,
please contact me at (202) 512-9286 or at [email protected]. Individuals
who made key contributions to this testimony are Dave Hinchman
(Assistant Director), Rebecca Eyler, and Kevin Walsh. (311404)
Senator Shaheen. Thank you all very much both for being
here and for your testimony, and for what I know will be a good
discussion.
I know that Senator Ayotte is going to address some of the
questions that Mr. Powner raised in his testimony. When Mr.
Powner says that none of the projects that are on the
Dashboard--none of those are listed as high risk, is that
because there is a genuine belief that none of them are high
risk? I assume that means at risk of not coming to successful
conclusion. Are you suggesting, Mr. Powner, that those projects
are not working in the way they should when you describe high
risk?
Mr. Powner. I think in order to manage problem projects,
you need to acknowledge you have a problem. So if you look at
our review of the MAIS programs, there are 40 MAIS programs, I
can identify several of those MAIS programs that clearly, I
believe, should be red and should be managed aggressively as
red projects so you get them back on track. They are
overrunning. The schedules are being pushed out. I think if you
acknowledge they are red, you govern those projects differently
if you acknowledge that you have a problem. So that is what we
would like to see. We would like to see more of those projects
as red.
There are 93 major investments. There are a lot of complex
projects there. It is not that they are doing a bad job that
they are red. There are red projects across programs. There are
red projects in the private sector. But you cannot fix the
problems unless you acknowledge you have a problem.
Senator Shaheen. So can I ask if you would respond to that?
Ms. Takai. Let me respond as it relates to the reporting on
the Dashboard, and then Ms. McFarland can speak to some of the
acquisition processes.
First of all, I think I want to make sure that we
acknowledge that there is a challenge for us in actually
getting a clear rating in terms of a red, yellow, and green. I
certainly do not want to walk away from the fact that it is a
very difficult situation for us in terms of being sure that we
have the right categorization and we are communicating that
categorization correctly. So I want to make sure I make that
statement.
Second of all, I think to answer your question, certainly
because of the categorization issues, I would not necessarily
depict our current ratings that are out on the Dashboard as
being 100 percent correct. That is right. We are now working on
trying to do two things: number one, to get a better alignment
of the way that we have been doing the ratings with the way the
ratings have been defined in the OMB Dashboard. That is
something, again because some of the complexities, we have not
done. Ms. McFarland's organization and mine have been working
on a new directive that will better define exactly what the
status is.
The second challenge and a part of doing----
Senator Shaheen. Can I interrupt just a minute?
Ms. Takai. Sure.
Senator Shaheen. Are you in agreement with Mr. Powner that
accurately reflecting the level of risk involved in a project
is helpful in managing it properly?
Ms. Takai. Yes, ma'am. Certainly it is important that we
understand what the challenges are. However, I would add
though, as Mr. Powner said, we do often recognize that our
programs need attention. That is actually one of the big
benefits of our current DOD 5000 process. It really does
highlight where we have issues and where we need to take
action. I think we need to make sure that the actions that we
are taking are accurately reflected in our ratings, so that we
have visibility of the actions we are taking going forward.
Senator Shaheen. Is there something with respect to the way
the ratings are done that make it particularly challenging for
DOD, or will the 5000 process help identify that? What do you
see as changing in order to more effectively be able to rate
the risk involved with those projects?
Ms. Takai. One of the challenges that I will comment on, I
know Ms. McFarland will have a comment as well, is the way we
rate programs and the judgments that we make on programs today
are really driven by the 5000 process. They do not necessarily
fit well with the quarterly reporting process that is part of
what OMB and the OMB Dashboard have. Consequently, it tends to
result in us having the same rating for a longer period of
time. One of the things Ms. McFarland and I are working on is
how to make sure that we have a rating structure that does not
appear to be different from what is being reported in our
milestone decision process in the DOD 5000. That has been one
of our challenges to this point, and I think it is the effort
that her organization and my organization are working together
or to make sure we have better clarity.
Ms. McFarland. Yes. Frankly, what Teri was talking about is
what we are trying to change. When we just changed the 5000
over the last couple of months, released the interim, some of
the things that you have been highlighting, along with the
ranking member, in terms of how to do IT acquisition, is
changing our culture internally on how we look at risk.
The challenge we have right now is that we have a system
called the Defense Acquisition Management Information Research
(DAMIR). It reports based on a very distinct approach from
weapons systems. For us, we focus on cost, schedule, and
performance. Risk is embedded in each, and we have multiple
players who come in, the program manager, the OSD functional
staff, and we all rate on a program. Those two from the
standpoint of IT have to be aligned. Right now there is a
difference in lexicon and how we think. We drafted a first
effort to try to look at how we take and make those risk
factors look the same so we do not report on two metrics and
confuse people even more.
Senator Shaheen. Do you work with the GAO as you are trying
to make some of these alignments to best assess what is going
on?
Ms. Takai. Yes, ma'am. One of the things that we have been
discussing is the way that we are looking at some of the
ratings to make sure that they are aligned with the way the GAO
is looking. Also, OMB is actually looking at those ratings
because it is really a GAO reporting of what is in the OMB
Dashboard. It is very important that we are consistent because
otherwise the other concern I have is that if we are different,
then if you go and look at another agency and you see a rating.
You certainly do not want to hear DOD's ratings are a little
different, which I am sure you hear a lot from us on other
things.
Senator Shaheen. No, we never hear that. [Laughter.]
Ms. Takai. That is an important thing not only from the
standpoint of us being aligned with OMB, but also so there is
consistency of reporting so that when you look at the
reporting, you are getting an accurate picture.
Senator Shaheen. Thank you.
Mr. Powner, did you want to add something to that?
Mr. Powner. I would just add that the interim 5000
guidance, I think, where you could tailor it to different types
of acquisition software, intensive hardware, using an
incremental approach, and the Dashboard were put in place to
change culture and Government. Monthly ratings by a CIO is
something that is a challenge for not only DOD but for others,
but it is a good challenge. If you cannot do it in a month,
strive to do it in a quarter, strive to do in 6 months. That is
better than what we have gotten historically. It was a push,
but I think it is the appropriate push.
I would add that DOD has large acquisition in IT. There are
a lot of IT acquisitions that are large and complex that need
to follow the rigor of a 5000. Other IT can be acquired more
incrementally. You still want rigor, but you do not necessarily
have to have the exact rigor that you have with all the details
in the 5000. Having that flexibility in the current interim
guidance is very good. You hear about agile development or
going incrementally.
We have a report that I know Senator Ayotte is very
involved with for the Senate Homeland Security and Governmental
Affairs Committee, where we are looking at incremental
development across the Federal Government. We took 37
investments at DOD. OMB has some guidance that said everyone
has to do everything in 6 months. One out of 37 at DOD is going
to deliver in 6 months. DOD said that is unrealistic. I agree,
but they said we will strive for 12 to 18 months. We said let
us bump it up to 12 months. Of those 37 investments, only 10,
so about a quarter of the investments, are going to deliver
something in a year. So you still have a lot of projects that
do not deliver anything for years, and that is the mode we need
to get out of in the Government.
Senator Shaheen. Thank you.
Senator Ayotte, we have been talking about the IT
Dashboard.
Senator Ayotte. Thank you. I apologize, I had to leave for
a minute.
On the Dashboard issue, as I read the GAO report, I see
that essentially we can save a pretty substantial amount of
money. Then when I look at it, we are spending $39 billion on
IT systems for DOD in fiscal year 2014. That is a huge amount
of money. I see in your report, I am really fascinated, page 5
where you basically say we have overlap, fragmentation, and we
have unnecessary duplication so that there could be much more
taxpayers' dollars saved if we could get that one issue right.
You have probably already addressed this to some extent, but
what do you think is the number one priority to get at at that
issue, which is an issue rampant across Government? But here,
we are talking about $39 billion just in 1 fiscal year, and
that is a substantial amount of money that can go to other
things.
Mr. Powner. There is that initiative. It is called the
Portfolio Stat that came out of OMB, and I believe DOD is
probably one of the model agencies. They identified 26
initiatives in all these categories that they claim can save
between $3.2 billion and $5.2 billion by 2015. That is right
around the corner, and that is a lot of money.
The number one initiative out of those 26, Ranking Member
Ayotte, is data center consolidation. To date, they have closed
over 250 centers. Now, some of these are small closets and
things like that, but there are some large centers that are
closed. I can give you examples of those. They claim they have
saved $875 million to date. By the end of fiscal year 2015,
$3.1 billion. By the end of 2017, it approaches about $7
billion. It is the model data center consolidation effort, if,
in fact, they carry it through.
I made a comment in my statement about how they need to
track savings. There are always these comments that come up
that we do not have the appropriate accounting systems, ways to
calculate savings, and that kind of stuff. Use a cuff system.
These numbers are so large. That cannot be an excuse for not
tracking those savings. There are over $5 billion that we can
save by the end of 2015. That is a lot of money that you can
reinvest in other systems that are important or something else
that is a priority for DOD.
Senator Ayotte. Secretary McFarland, where are we in terms
of tracking these savings? Or maybe Ms. Takai. Sorry if I am
asking the wrong person.
Ms. Takai. Yes, Senator. We are actually tracking the
savings. We are tracking the data center closures, and we are
tracking the savings on an ongoing basis.
I will just give you an example of an area where NDAA
language that we received actually is helping us. We are
reviewing all data center expenditures, and they have to be
approved by my office. It is not just a question of saving by
closing down a data center, but we are actually eliminating
some of the redundant spending that you just talked about. I
will give you an example.
In the first quarter of this year, Navy achieved a cost
avoidance of $3.4 million by disapproving three requests. They
would not have even known that those dollars were going to be
spent if we did not have a very tight approval process right
now. As you can see, if you just take three requests versus the
number, quite frankly, that come across my desk on a daily
basis, we are going to be achieving the savings.
But I think the other thing I want to mention here is that
in some cases these are cost avoidance, number one. They are
not necessarily savings off the top line. Effectively, we were
stopping spending.
The second thing I would note is that some of these
savings, as we are looking at them, are being included in the
efficiencies numbers that you are already seeing as the
Services are coming in to report on their budget. Perhaps they
are not calling them out directly because they are not thinking
of IT as being a big part of their expenditure. We are tracking
it in a number of different ways.
I will close by saying it is a challenge to track the
savings because the expenditure at DOD is very decentralized
and it is actually done at the point that the equipment is
being purchased or the data center is being equipped. So one of
our challenges is to be able to collect those dollars. But
having said that, the fact that it is a challenge does not mean
that I do not agree that we should be tracking it and that we
should be racking it up.
Senator Ayotte. It seems to me a priority, given the
setting we find ourselves in, because the tracking of it is the
motivation so that we have more accountability. Then we know
that those dollars can be used for other, more viable purposes.
So, Mr. Scheid, I wanted to ask you. When you testified,
you talked about the situation of the audit readiness of DOD. I
think you said that most will be audit ready by 2014. So is the
Air Force still the problem child? Are they the worst offender?
Can you break it down by Services?
Mr. Scheid. I would not characterize it as a problem child
or worst offender. I can go through the Services. In the
testimony, I said while it is too soon to know for sure, we
expect the budget statements to be auditable by September 2014.
The Marine Corps is the pacesetter. They are out in front.
They have already achieved a clean audit of their financial
statements. The Department of the Navy follows right behind.
They are best positioned or at low risk and have a mature
system in place. The Army has installed probably the most
comprehensive and modern automation through its Enterprise
Resource Planning (ERP), and they are trying to leverage the
investments to support the audit. The Air Force is, as you
indicated, still struggling, and attempting to assert audit
readiness with largely legacy systems. They are working through
those legacy systems.
Where we see a great deal of risk or more risk is in what
we call the fourth estate, the fourth estate being the defense
agencies and activities that are not particularly in a Military
Service or attached to a Military Service. There we have, I
think, 44 different entities, and half of them have already had
a clean audit at one point or another. That would be like the
Defense Finance and Accounting Services (DFAS), for example.
But the others are all struggling with legacy systems and
trying to just achieve the readiness.
We work with the Comptroller very closely on this. I co-
chair the Financial Improvements Audit Readiness (FIAR)
Council. As I indicated, I am new to this area, but we are
working with them to ensure that in particular, and this is my
predecessor's work, the systems that support audit readiness
are on track. We have had these authorities to monitor, track,
and work on those systems for a few years and have done work
with the Services to improve that.
On the audit readiness, may I add one comment to the
previous discussion? You indicated $39 billion of investments
across DOD, which is a huge responsibility. About $7 billion of
that are business systems that we have identified. They break
down into about 1,200 individual systems.
My predecessor and the office I am in now have instituted
what we call the IBF to help bring some discipline to this
business space. We align it or arrange it through functional
strategies, which each have functional owners, functions as in
human resources, acquisition, and so forth. Then we organize
these systems into portfolios. The portfolios are reviewed
annually in an investment review board.
This process has helped the team reduce redundancies,
identify where there are redundancies, reduce them, and
identify where we should not be obligating funds. I indicated
in my testimony, I think, we had cost avoidance of about $1
billion through these two cycles, and we have stopped funding
60 legacy systems. Of that $39 billion, the business systems
has had increased scrutiny through this IBF that we have
established and is getting some results. It is early days still
and there is a lot of work ahead, but we are working in that
direction.
I hope, Senator, that answers your question also on the
FIAR.
Senator Ayotte. Yes, thank you. My time is up and I know we
will have a chance for follow-up questions. Thank you.
Senator Shaheen. Thank you.
I would like to point out, relative to the consolidation of
data center discussions, that in addition to the cost savings,
part of that cost savings is significant energy savings, and so
that is another benefit for doing the consolidation.
Senator Donnelly?
Senator Donnelly. Thank you, Madam Chairwoman.
Mr. Powner, we talked about 93 projects on Dashboard.
Secretary McFarland, are there goals and metrics for each of
those 93 projects month-by-month where we are, how we are
doing, and are we on target? Could I pull up a booklet and see
exactly where we are in that project?
Ms. McFarland. I will share this with Teresa.
Of those 93, there is a certain number of them which we
call MAIS, and for them, there are metrics. For the balance, I
will turn it over to Teresa.
Ms. Takai. Yes, sir, there are metrics for all of the
projects that are on Dashboard. We do not necessarily track
month-by-month. We track major milestones for each one of those
projects, and the frequency of the milestones is dependent upon
the size of the project and when they will have met particular
deliverables.
Senator Donnelly. Mr. Powner, do you think we have
sufficient metrics in place on these projects to make sure that
we are on target and on time?
Mr. Powner. I believe DOD has internal metrics. I do not
think where we are at on those metrics is transparent
necessarily on Dashboard because the data is not updated.
The other thing I would add, Senator Donnelly, is that
there are some MAIS projects, nine of them that we are aware
of, that are not on Dashboard. So, for instance, there is Navy
Common Ground System. I do not see that on Dashboard. There is
an Army Tactical Mission Command program. We did a scrub
because we are doing the MAIS work for this committee right
now, and it will be out at the end of the month. So I think
there is a fundamental question. Have we captured all the
investments and then do we actually have the right status of
how they are performing? I think the answer to both those
questions is no.
Senator Donnelly. Let me ask this: in terms of best
practices, I was just sitting here jotting down some names. I
know DOD has concerns about security and stuff. Do folks from
Amazon, Google, GE, Apple, or Microsoft come in and say, ``here
are our best practices''?
Ms. McFarland. Yes, we do. In fact, much of what we have
been doing over the last couple of years to understand best
practices has been through the industry consortiums, to
understand what goes on and how to perform inside of
acquisition better.
Mr. Scheid. The DSB has been helpful in the past. They
worked on the 804 report. Also, the Defense Business Board is
composed of CEOs, COOs, and others that have insights into
these programs. They do projects, studies, and analyses, and we
benefit from that.
Senator Donnelly. This may sound like a little bit of an
offbeat question, but that is okay. Is there a need for all of
this to be focused or located at DOD? Would it be
disadvantageous if it were spread throughout the country or
that we had some computer operations, for instance, in
California, New Hampshire, Indiana, Pennsylvania, or other
places?
Ms. Takai. Actually, a very small, minute part of what we
do is actually focused at DOD. Our data centers are spread
throughout the country, which is actually part of the challenge
of getting them consolidated, quite frankly, sir. Because they
are at each base, post, camp, and station, and that is a bit of
our challenge. The development processes, Ms. McFarland can
speak to this, in fact, are not at DOD. They are most often
near where the major focal point is as it relates to the
business operation that is going to be benefiting from that
system.
Senator Donnelly. Okay.
As we look at the systems going forward, one of the
concerning things is counterfeit electronic parts, electronic
chips, et cetera, and I was wondering what is being done in
that area.
Ms. McFarland. If you are not aware, sir, we actually have
a Federal Acquisition Regulation----
Senator Donnelly. I am.
Ms. McFarland. Okay. We are doing quite a bit of work in
that area. I came originally from the Missile Defense Agency
which really brought to bear a lot of attention on that issue.
For contractor accountability, we are holding them accountable
for providing spare parts or any part that is counterfeit.
Senator Donnelly. Okay. So there is identification on all
of the parts that are going into the process.
Ms. McFarland. That is the requirement.
Senator Donnelly. Thank you, Madam Chairwoman.
Senator Shaheen. Thank you, Senator Donnelly.
Assistant Secretary McFarland, I want to go back to section
804 that Senator Ayotte and I talked about, and you all have
referenced. I am interested in the extent the efforts that are
being undertaken now, with respect to trying to improve our
acquisition programs, to build on what was done with section
804. Can you, or Ms. Takai, talk about the extent to which your
belief, that the reforms requested under section 804 have
actually been implemented and how the current process builds on
that? What was done? What was not done, maybe?
Ms. McFarland. Yes, ma'am. I would say about 75 to 80
percent of what the report to Congress discussed has been
initiated and implemented. ``Implemented'' is not complete. As
you are aware, the system has a slow progress, and many of the
items within section 804 regard the early onset or the
initiation of the program. So we have programs that did not
benefit from those specific initiatives that are very important
to make the products what we want them to be. We will be
continuing to do cleanup in a lot of those areas.
The programs that are coming forward I mentioned in my
written testimony are programs that have shown success. We have
demonstrated that we can reduce by 45 months the timelines for
requirements by using IT Box compared to an earlier increment.
A lot of the programs are now coming forward for our review
that have demonstrated that they are taking a very close and
precise look at what size of an increment they can build and
field.
One of the biggest hurdles that we had over the last few
years was that people did not understand the full complexity of
what they had to build, particularly in business systems where
all of the interfaces and the exchange are very large. The
enterprise exceeds the boundaries of just DOD. We interoperate
with a lot of different agencies and activities. When we look
through the lens of what section 804 put into place, I am
seeing, and I am very cautiously optimistic, that those
implementations will continue forward. They are strengthened in
the new DOD 5000 directive, and we are seeing products and
programs coming forward where we can actually review and
institute them.
On the second note, the Services are also very interested
in this. You have probably paid attention to the news. There is
a lot of activity within the Services that recognize the
challenges in IT and they are putting their own personal focus
on looking through what they have for those investments, where
they are putting their people, and how they construct the
programs. The Air Force just stood up a new board specifically
to do that. We are putting emphasis on it. Can I say we are
complete? No. We have a long way to go. The enterprise is huge.
Senator Shaheen. To make it more concrete for my
understanding, can you describe a particular project that you
think, as a result of the section 804 changes, has
characteristics that you are translating now as you are looking
at the 5000 process and adopting some of those characteristics
or guidelines?
Ms. McFarland. Yes, I can. The integrated pay and personnel
system for the Army came forward originally with a very
complex, big bang theory on how it was going to deliver
capability. After we went through the process with them, they
reduced that sizing of increments to be discrete elements that
show a manageable and deliverable product within each of these
releases. They are short form. They have very distinct
parameters that they can measure and identify and have been
able to control costs that way.
We have many different metrics that we are now putting in
place related to this. One of the questions during program
review I ask is: how many interfaces do you understand and what
is it that your people will have to do to address the change?
Much of what we do, particularly in defense business systems,
is related to the people operating those pieces of gear. It is
like using my kitchen sink for umpteen years and I am very
familiar with it and you just put something in front of me that
I do not understand, it still does everything according to the
written requirement, but it is not familiar. I used to reach
here and now I have to reach there. That is one of the biggest
pieces for the success and failure of these systems.
Another one, just from memory here. We have also rolled in
on top of the section 804, the Better Buying Power initiatives.
Are you familiar with those?
Senator Shaheen. No.
Ms. McFarland. One of the things that we have asked them to
take a look inside of when they execute a program is once you
have established what you think is the appropriate cost for
delivering that, we build that into the independent cost
estimate. We also ask the program managers and their teams to
come in with what efforts they can do to take costs out of the
program. As we look at their execution, they have to show
discrete efforts that demonstrate some actual activity to look
at reducing costs. It can be anything as simple as using a
different contract type because it is more effective when I
incentivize this contractor to deliver that methodology. We
have a huge effort working with our people to change the
culture to make it cost-effective.
Another aspect is simply affordability. We have a lot of
challenges explaining to people what affordability is.
Affordability is not making it cost avoidance or savings.
Affordability is understanding how much you have to spend on
something, staying within that, and understanding the total
ownership cost of something when you deliver it. Even though
you may wish to deliver a capability inside of IT within a
certain period of time, if you cannot afford it, look to find
what you can afford that is meaningful that you can deliver.
Senator Shaheen. What kind of educational development
efforts go along with the kind of program implementation that
you are talking about?
Ms. McFarland. Prior to this position, I was the Defense
Acquisition University's president, and one of the things that
I did, because I had just come off of the team for Mr. Kendall
and Dr. Carter, was trying to change the curriculum in the
university to focus on how to build in cost consciousness.
Oddly enough, this is a trip to the past. When I entered
government service in the 1980s, we had much of what is
considered today the new look at acquisition that is ongoing.
It was post-Cold War thinking; how do I get money out of the
system? We were working on things that I have an excellent book
on called ``Design to Cost,'' for example. Myself and others
were also focused on cost avoidance, and how you look at how to
construct a cost-effective system. We are building that back
into our training curriculum. It is not just for those students
that come through because of the mandatory certification they
have to take. We actually have mission assistance teams and
rapid training teams that reach out to the major systems and
commands to educate them.
In addition, Dr. Carter, when he was the Under Secretary of
Defense for Acquisition, Technology, and Logistics, Mr.
Kendall, myself, and Alan Esteves actually go out to centers of
excellence and centers of mass when it comes to acquisition.
For example, last week I was down at Naval Air Station Patuxent
River talking on a hot topic forum for about 2 hours with about
350 acquisition professionals going through what they have to
think about because it is truly critical thinking. The attitude
of cost has to be thought of when you are doing a very complex
system. In addition to all the demand signals we put on them
for how to do acquisition, they have to also put that
additional equation together.
Senator Shaheen. I am over my time, but since it is just
Senator Ayotte and I, maybe she will not mind if I ask a
follow-up question.
So given all that, the training that people are undergoing,
and the focus, how is it that we can have a contract like the
Air Force had that is $1 billion in and no deliverables?
Ms. McFarland. This is an incredible human endeavor. That
program was started around 2002 and it was done during a period
of time when we were waking up to the huge investment in IT. At
that time, it was the tail end of when we were thinking of
acquisition through the large systems integrator, where we had
decided that it was more useful to put essentially the business
of doing acquisition in industry's hands. In other words, we
had decided that industry could do it better.
Unfortunately, that did not work. There was also a great
deal of perverse incentives in that program. If you had an
opportunity to read the root cause assessment that was
submitted to Senator McCain, it talks about this. If you were
to take the Weapons Systems Acquisition Reform Act, it talks
about six parameters and a seventh called ``other,'' and
effectively it is what could go wrong on a program, and every
one of them was met. Very negative.
There was a lot of accountability across the entire
spectrum of their program. It did not do business process
reengineering. It gave the contractor the responsibility to
develop the requirements and then build to them. In terms of
how you manage constructively and contain constructively
requirements, it was completely set wrong.
Have we learned from that? Oh, yes. There is nothing more
humbling than to see something like that happen and have it go
on as long as it did. Have we rolled it into our business
process engineering lessons? Yes. Have we rolled it into the
school? Yes. Have we a long way to go? Yes.
Senator Shaheen. Thank you.
Senator Ayotte.
Senator Ayotte. Thank you.
In following up to that, we are talking about the ECSS
system, and I wanted to get your impression, Mr. Powner, having
just finished this draft GAO report, the impression of having
heard about this one system. But we know that is not the only
example. I want to just restate this is not an issue that is
unique to DOD in terms of these systems, particularly with
regard to IT systems. I wanted to get any thoughts you had on
this.
Mr. Powner. I think it is great that we are building into
the curriculum, we are looking at lessons learned, and all
those things. But this is where governance plays a factor. You
have an investment board and you have executives who are in
charge of these programs; Mr. Scheid mentioned the IBF. The IBF
is darned good. It is a portfolio-based approach and if you
followed it, less programs would fail.
But someone at some high level on these boards needs to ask
questions. Is the Government defining the requirements and not
the contractor? Are we going with an incremental approach? Are
we validating those requirements? Is the business on board?
Because the business was not on board for ECSS. These are
basic, fundamental questions that do not really have a whole
lot to do with IT. It is more management stuff, and that is
what governance is all about. We see, not only at DOD but
across the Federal Government, poor governance in an executive
level and program offices start doing things at this detailed
level without the appropriate executive oversight. This is an
executive issue. That is why we fully endorse putting the CIO
picture next to each investment on the Dashboard, and if the
CIO is not the appropriate person, put the appropriate person
who is the right executive of that department or agency.
Senator Ayotte. As I understand it, in 2011, the Institute
for Defense Analyses wrote a report titled: ``Assessment of DOD
ERP Business Systems.'' One of the primary findings spoke to
this issue of leadership, that acquisition programs require
that a single accountable leader has the span of control to
define, implement, and execute the end-to-end business process
the IT investment is intended to support.
I think I have asked this in the larger hearing as well.
For a system like ECSS, was there one accountable leader? Was
anyone held accountable for the failures? Because it seems to
me that you have these major systems and how often are saying
you are responsible and then holding people accountable? Can
you speak to that, Secretary McFarland, and how that culture
obviously helps get better results for the taxpayers?
Ms. McFarland. In terms of who and what was held
accountable, obviously the contractor was one of the principal
people held accountable. In terms of us, yes. We reconstructed
that organization. When the program was terminated, the Air
Force took it very seriously, and they are now trying to
reorganize to determine how to execute a follow-on system
because the ECSS's capability is still required.
In terms of how you are setting yourselves up for the
future, it was an integral part of why we made the changes. In
terms of how we are looking at changes since the 2010
implementation of section 804, a lot of those obviously
problematic areas were incorporated into what we are doing in
terms of business process reengineering in terms of governance.
Senator Ayotte. I wanted to follow up, Mr. Scheid, as well
on the audit issue. Certainly on this issue, when you listed
the Services and where they were with regard to the audit
situation, as well as the 44 entities that are outside the
Services, you had the Air Force fourth in terms of the
Services. So how are we going to get the Air Force up to speed
to be audit ready.
Next, I think it would be helpful for this subcommittee to
understand the 44. I know you know them. I do not know them. I
would like to have a list of the 44 that are not in an update.
You said half of them have actually been able to meet an audit
in the past. Which ones do you feel are most at risk?
Understanding that each Service Chief is going to have
responsibility for the Services, certainly the Secretary as a
whole and DOD is responsible for these other entities. I can
understand why they would be even more vulnerable. I think a
report to us on that would be helpful for us to understand, as
we look at this audit issue.
Senator Shaheen. I agree. Perhaps you could provide that to
the subcommittee.
Mr. Scheid. Yes. I will provide the list. Now that I am
thinking about it, some of those 44 may be captured in the
Washington Headquarters Services (WHS). That is that one entity
that works for many offices.
Senator Ayotte. In DOD?
Mr. Scheid. In DOD, yes. They are outside the OSD.
Let me provide that list. They are agencies and activities,
and some of these activities are small and for audit purposes
they are rolled up into other entities like WHS.
But an agency like DFAS is not in a Service. It is outside
and it is in this fourth estate that we call it. They have been
audited. I believe the number of years is 14 years. They are
largely personnel. It is salaries. In terms of meeting the
audit requirements, it is relatively simple as compared to a
large organization with different activities.
[The information referred to follows:]
We maintain a list of 46 Department of Defense entities that fall
outside the Military Services. We informally refer to this grouping as
the ``fourth estate.''
Office of the Secretary of Defense:
1. Office of the Under Secretary of Defense (Acquisition,
Technology, and Logistics) (OUSD(AT&L))
2. Office of the Under Secretary of Defense (Comptroller)
(OUSD(C))
3. Office of the Under Secretary of Defense (Intelligence)
(OUSD(I))
4. Office of the Under Secretary of Defense (Personnel and
Readiness) (OUSD(P&R))
5. Office of the Under Secretary of Defense (Policy) (OUSD(P))
6. Office of the Deputy Chief Management Officer (DCMO)
7. Office of the General Counsel of the Department of Defense
(OGC)
8. Office of the Inspector General of the Department of Defense
(OIG)
9. Director of Cost Assessment and Program Evaluation (D,CAPE)
10. Director of Operational Test and Evaluation (DOT&E)
11. Assistant to the Secretary of Defense for Intelligence
Oversight (ATSD(IO))
12. Assistant Secretary of Defense for Legislative Affairs (ASD
(LA))
13. Assistant to the Secretary of Defense for Public Affairs (ASD
(PA))
14. Department of Defense Chief Information Officer (DoD CIO)
15. Director of Administration and Management (DA&M)
16. Office of the Director of Net Assessment (ONA)
Defense Agencies:
17. Defense Advanced Research Projects Agency (DARPA)
18. Defense Commissary Agency (DeCA)
19. Defense Contract Audit Agency (DCAA)
20. Defense Contract Management Agency (DCMA)
21. Defense Finance and Accounting Service (DFAS)
22. Defense Health Agency (DHA)
23. Defense Information Systems Agency (DISA)
24. Defense Intelligence Agency (DIA)
25. Defense Legal Services Agency (DLSA)
26. Defense Logistics Agency (DLA)
27. Defense Security Cooperation Agency (DSCA)
28. Defense Security Service (DSS)
29. Defense Threat Reduction Agency (DTRA)
30. Missile Defense Agency (MDA)
31. National Geospatial-Intelligence Agency (NGA)
32. National Reconnaissance Office (NRO)
33. National Security Agency/Central Security Service (NSA/CSS)
34. Pentagon Force Protection Agency (PFPA)
Department of Defense Field Agencies:
35. Defense Acquisition University (DAU)
36. Defense Human Resource Activity (DHRA)
37. Defense Media Activity (DMA)
38. Defense Prisoner of War/Missing Personnel Office (DPMO)
39. Defense Technical Information Center (DTIC)
40. Defense Technology Security Administration (DTSA)
41. Department of Defense Consolidated Adjudications Facility (DoD
CAF)
42. Department of Defense Education Activity (DoDEA)
43. Office of Economic Adjustment (OEA)
44. Task Force for Business and Stability Operations (TFBSO)
45. Test Resource Management Center (TRMC)
46. Washington Headquarters Service (WHS)
The Defense Commissary Agency, Defense Contract Audit Agency,
Defense Finance and Accounting Service, and National Reconnaissance
Office received favorable audit opinions for fiscal year 2013. In
addition, the Military Retirement Fund, Medicare-Eligible Retiree
Health Care Fund, and the Defense Health Agency-Contract Resource
Management also received favorable audit opinions. In fiscal year 2012,
the Defense Information Systems Agency and the Office of the Inspector
General received favorable financial audit opinions.
Mr. Scheid. On the status of the Air Force, I would prefer
to take that for the record, if I may.
Senator Ayotte. Sure.
[The information referred to follows:]
The Air Force is working hard to become audit ready. As Comptroller
Hale relayed in his November 2013 Financial Improvement and Audit
Readiness (FIAR) Plan Status Report, we do expect most of the
Department's budget statements to be asserted as audit ready or be
under audit by September 30, 2014. Significant challenges to audit
readiness remain across the Department, while the Air Force is
particularly impacted by the challenge of having to work largely in a
legacy environment. The long-term plan to mitigate legacy system
challenges is the full deployment of Defense Enterprise Accounting
Management System (DEAMS). DEAMS will be fully deployed by 2017.
Further exacerbating the Air Force challenges is the fact that its FIAR
consulting contract was under protest for nearly 8 months, so the 2014
goal for Air Force is particularly challenging.
Although the Air Force is arguably the Service with the most risk,
it is also sprinting to put itself in position. Air Force senior
leaders have committed to doing everything possible to be audit ready
by the end of fiscal year 2014. In order to minimize delays resulting
from the FIAR support contract protest, the Air Force implemented a
rigorous and systematic process for testing key financial controls
throughout the year. Each month, it is testing various controls within
its various business areas. In fiscal year 2013, the Air Force tested
over 10,000 transactions, applying over 57,100 test attributes. It saw
its success rates improve from 40 percent to 90 percent or better on
many of the samples. These overall test results demonstrate the Air
Force is developing controls to sustain audit readiness beyond 2014.
The Air Force has also refined its FIAR execution strategy to focus
on tracing a financial transaction from origination through reporting
for each assessable unit--a ``walkthrough'' of the financial
transaction process. The walkthroughs entail visits to the originating
bases through the major commands and the Defense Finance and Accounting
Service. This allows the Air Force to leverage existing process
documentation and control testing prepared by these command echelons,
saving time and resources. The teams are able to identify and implement
corrective actions and test mitigating or compensating controls early
in the process.
Mr. Scheid. One, because of my lack of experience just
being in the seat for a few months, and two, to make sure you
are not misled in any way by something.
Senator Ayotte. I appreciate it.
I have a specific question about audits. As I understand
it, the NDAA for Fiscal Year 2010 charges the CMO of DOD, in
consultation with the Comptroller, with revising a FIAR plan
which describes that specific actions must be taken to ensure
that the financial statements of DOD are validated and ready
for audit by no later than September 30, 2017.
As I understand it, there is an argument going on right now
in DOD as to whether to include valuations of property as part
of the audit which is required to be completed by 2018. Though
establishing the value of a company's property certainly is
very critical in the private sector, as I understand the
argument within DOD right now, some are arguing that it may be
less necessary to ascertain the value of property owned by DOD.
I am not taking a side. I just want to get your opinion of
what you think. What is your view on this debate? How
significant of an additional undertaking is it to establish the
values of property? How many additional auditors does it take?
Does that take us down every M-16, every rucksack, if this
requirement were lifted? I am not taking a position one way or
the other. I want us to get the best information we can to make
decisions on behalf of the taxpayers. Is this something that
would help you meet your audit deadlines? I just want to hear
the opinions of the group on this, particularly Mr. Scheid, and
obviously if Mr. Powner has any opinion, I would be happy to
have him weigh in as well. Is this a debate that you are aware
of?
Mr. Scheid. No, I am not aware of it. I would be glad to
get more information on it.
Senator Ayotte. Okay.
[The information referred to follows:]
I am not aware of a debate or argument going on within the
Department of Defense (DOD) related to valuations of defense property.
In order to achieve a clean opinion, DOD must adhere to federal
financial accounting standards, which require that capital property be
fairly valued. These current standards mandate that federal agencies
report property and equipment assets at full acquisition cost. DOD
recently published equipment valuation guidance, which provides options
for valuing our assets and costs associated with this effort. The
Comptroller will meet with each of DOD's components to determine which
options work best within their standard business processes.
DOD is committed to meeting its audit goals to include existence
and completeness of all equipment assets. This will provide assurance
of physical stewardship, control of assets, and information that is
most meaningful to the management and our stakeholders. DOD is studying
the cost of making and auditing property and equipment values; however,
those costs are not yet known. We remain committed to becoming audit
ready in a way that is cost effective.
Mr. Scheid. I am aware that in the audit readiness timeline
that I believe has been briefed to the subcommittee and others
by Secretary Hale, that the mission critical asset's existence
and the completeness audit readiness, the critical asset
existence is part of this taking account of the physical
properties, facilities, trucks, everything from aircraft to
fire trucks and so forth.
Senator Ayotte. Sorry to interrupt. I have had some people
ask me if that means we have to get down to every screw. At
least as I understand this debate, there is some consternation
there.
Mr. Scheid. I am not auditor. I am not an accountant. But
there must be a limitation to that, particularly in such a
large organization trying to get to an audit.
Senator Ayotte. We are not trying to ask you to do
something that would be unreasonable. What we want is things
that would be helpful to the taxpayers.
Mr. Scheid. Yes. This is part of the plan. I believe it is
reasonable to expect us to deliver that account.
If there is a debate in DOD, I do not want to speculate on
it or contribute one way or the other to it. I would rather get
you the facts on it.
Senator Ayotte. Okay. I appreciate the follow-up on that.
Thank you.
Mr. Powner. I am not aware of the issue, but I have a
colleague on our financial management team. If I could take
that for the record, we can get back to you on that.
Senator Ayotte. That would be great. Thank you.
[The information referred to follows:]
See answers to Questions for the Record 11-16.
Senator Shaheen. Can I just ask Secretary McFarland or Ms.
Takai, are either of you aware of this issue?
Ms. McFarland. No, but it is fascinating.
Senator Shaheen. Yes, it is.
Ms. Takai. No, I am not aware either.
Senator Shaheen. I want to go back to the issue that you
raised, Ms. Takai, about the JIE because I am not sure that I
quite understand either what this idea is, or what it is
designed to do and how it should work. I wonder if you could
talk a little bit more about that. Is this viewed as an agency-
wide or a DOD-wide effort? Who is in charge of it, and how is
it supposed to work?
Ms. Takai. Perhaps I can start out with just a description,
perhaps in a little bit more detail in terms of what it is.
The effort is really around being able to take the money
that we spend today, because I think as Mr. Scheid said, out of
our $40 billion a year, a fairly large proportion of that is
spent on just maintaining and upgrading our networks, our data
centers, our servers that sit within those centers, as well as
buying a fair amount of services from other companies. Then, of
course, we have software purchases, which is software that
basically runs the computers all the way up to the way we do
email. The line, which gets a little bit fuzzy, is it falls
short of, for instance, an ECSS or an equivalent system or
financial system. What is it that is underneath it that, first,
makes it run and, second, means that you can connect it? That
connection means not only from a computer terminal but also how
do you connect it from a mobile device and some of the newer
technologies coming in? So, I think it is important to set that
context.
The next thing is that our infrastructure is, obviously,
from a multiplicative standpoint, bigger than any industry. I
was talking to some folks from AT&T the other night, and we
concluded that AT&T and their worldwide network was probably
maybe close to the equivalent of the Navy if you think about
the size. So when we talked about the number of data centers, I
think we also have to recognize that we have a U.S. number but
we also have a deployed force and that exacerbates the issue.
The challenge that we have with that is multiple. Today, we
have what I would call fairly loose standards. In other words,
my office puts out standards, but the way that the technologies
are implemented can vary significantly not only from Service to
Service, but because of our size, we are very decentralized.
Each location will actually set up their own computers. They
will set up their own firewalls and so on. All of that, I
think, back to Senator Ayotte's point, is a part of what can
certainly lead to redundancy. It can lead to competing
technologies, and certainly that has multiple ramifications.
Let me just say what the ramifications are. First of all,
it means that when we try to defend our networks, that means
that we have to see when there is an adversary on our network,
and we have to be able to trace back and see where that
adversary has gone. The way we are set up right now, you have
to understand all of our networks to be able to actually do
that, which of course is an impossible task. I think you have
heard General Alexander say, given the way we are operating
today, that is just impossible.
The second thing is, we have different ways of operating
our networks. We have some big operation centers, some small
operation centers, and the same is true of help desks and so
on, which again is redundancy and it also makes it very
difficult to run.
So the effort around JIE, as you mentioned, is not what we
would call a program of record because, again, we are not
suggesting that we need new money for this. We are suggesting
that we need to take the money that we spend today and use that
money to drive towards this standardization, this
communization, this ability to eliminate the redundancy and to
operate in a single way.
The overall responsibility for that program is mine. The
Secretary has designated that I am responsible for working with
not only the Services but all of the component organizations in
order for them to implement the JIE. As you could well imagine,
that is a daunting and challenging task. We are part-way
through that. The data center consolidation is one of our
efforts in doing that. Our defense enterprise email that you
may have heard is another area that we are focused on. But we
have a suite of things in terms of the way we are doing some of
our fairly detailed network configurations and so on that we
are in the process of specifying and rolling out.
The Services have just delivered to me, in fact, at the end
of February their implementation plan because the challenge is
just like all of the issues we have been talking about here. I
can lay out ground rules, but clearly each of the Services has
to have a plan for how they are going to implement because each
of them are in different places in terms of how much they have
standardized. Those plans have come back in and we are
currently in the process of bringing those together.
We also are expecting from all of our components plans to
be completed at the end of March. We are going to actually look
at how we are going to operate that.
Let me give you a couple of concrete examples. We started
with a concept of operations in Europe because Europe, between
our U.S. European Command and U.S. Africa Command, as well as
Navy support, had actually started down a path of doing
consolidation. Through that, we have been able to bring up one
single enterprise operation center, and they are in the process
of shutting down. I do not have the exact number, some number
of centers. This, of course, helps CYBERCOM because they will
be able to work through that operation center, as well as we
have a plan for which of the data centers in Europe will be
closing as part of our data centers and then how it will be
consolidating.
Our second geographic area is U.S. Pacific Command (PACOM).
Admiral Locklear has asked to be the second area. We have a set
of workshops that are scheduled for the end of March/early
April that will take advantage of the work that they have
already started but make sure that the work in PACOM is aligned
with the work that is happening in Europe.
The complexity is that in PACOM we have every Service, and
each Service has their own way of doing networks and data
centers, and so they are going to come together in PACOM to
actually come together on how they will do a joint
implementation.
The real complexity that we have here is that the funding
sources come in from the Services. They each have a specific
way of doing things. But the real benefit, in many ways, of
JIE, which is why it is called ``joint,'' is actually in the
combatant commanders who have to deal with the technologies
coming in from each of the Services, and through the
standardization, the concept is to ensure that we are operating
in a much more uniform way than we are today.
It is a huge effort. I do not want to minimize it at all.
Many major corporations have done this. I can certainly cite
many in Silicon Valley. Hewlett Packard has a major effort in
this area. Oracle has internally. IBM, in fact several years
ago, just went through the same kind of consolidation and
bringing together. My background is State government, and State
government is challenged as well, within their internal
operations with every agency having their own.
Senator Shaheen. Yes, we have experienced that.
Ms. Takai. So if you think about what the challenges were
at the State government level, which I know very well from my
Michigan and California days, then you blow that up. My IT
spend in California was about $5 million, and I had about 110
CIOs that I was trying to bring together. Multiply that by our
numbers here. I think you can see the size. But I think to
Senator Ayotte's point, you can also see the opportunity if we
can continue to move this forward.
I really would come back to the comments that were made by
GAO. This is not going to be a perfect process. It is not going
to be a march that looks really exact and pretty, but it is, to
some extent, to his point we are putting pressure on the
organization to get better.
I will make one last point. If we cannot get to some level
of operating in a much more standardized fashion, it makes it
so much harder, if not impossible, for us to move to new
technologies like the cloud technology. I have often said that
if I replace all of my disparate data centers with disparate
clouds, I am actually not any farther ahead. I am actually in
some ways increasing my complexity because now data centers
that I own and run today, I will either be using a commercial
cloud capability or a different cloud capability. It is really
important that we get the standardization to happen so that
then, to the point, I think, that Mr. Scheid made, we can move
our business systems into cloud technologies. We can get the
efficiencies, but we can also ensure that we have security in
those solutions so that we do not have to be concerned about,
not only the fact that we are getting more efficient, but we do
not want to do that at the sacrifice of security.
Senator Shaheen. That is helpful. Let me see if I can
restate what I understand you to have said about the JIE now.
It is an effort to standardize IT systems throughout DOD so
that they are more efficient and better coordinated. Is that
essentially what it is?
Ms. Takai. That is correct.
Senator Shaheen. It is under your portfolio.
Ms. Takai. That is correct.
Senator Shaheen. You talked about the consolidation. Is
there a list of initiatives as part of that that you hope to
accomplish and a timetable to do that?
Ms. Takai. Yes, ma'am.
Senator Shaheen. Different people are in charge of that.
You said the budget for all of this will come through the
various Services.
Ms. Takai. That is correct.
Senator Shaheen. So I assume that they have bought into
this effort either directly or indirectly.
Ms. Takai. We are working on that now, ma'am.
Senator Shaheen. As you look in the short-term, say, over
the next 2 years, 5 years, and 10 years, what are you hoping to
accomplish within the next 2 years and where do you hope to be
5 years from now?
Ms. Takai. In the next 2 years, we are intending to
implement two or three areas in the network, and certainly we
can provide more detail. I do not want to get too technical in
this discussion, but it is really to standardize the networks
and certain areas of the networks. That is one of the things in
the 2-year period.
We will have a plan to finish on defense enterprise email.
Senator Shaheen. Thank you very much.
Senator Ayotte.
Senator Ayotte. Thank you for working so hard on these
issues. Thank you.
Ms. Takai. Thank you.
So those are a couple things in the 2-year period.
In the 5-year period, I think as we mentioned, we are
projected to close over 800 additional data centers by 2021.
Actually, the rest of the figures that you have asked for are
what I am expecting to get out of these implementation plans
because I have asked each Service to come in. I have to take
each Service's plan and then lay it out by geographic area so
that I do not have conflicts between that. I think once I have
all the implementation plans, I will have a better ability to
tell you when, but I certainly can share with your staff today
what our target numbers are for the categories that we are
looking at. We have that and we are very happy to share that
with you.
Senator Shaheen. How is this effort integrated with the IT
Dashboard and the work that OMB and GAO are tracking?
Mr. Powner. Clearly this effort is integrated with the data
center consolidation effort. I think that is one of the big
parts of JIE. Again, just to reiterate, I think DOD has gotten
off to a great start looking at data center consolidation, but
again, it is just really important that we track those savings
because they have already had significant savings to date. In
some of the centers that I looked at that have been closed,
there is some good stuff going on where you have centers that
had 450 servers and you shut down 440 of them, all but 10.
There are several stories like that. That is where we had
unused capacity.
When we do ask DOD, what is your average server
utilization, they can answer the question. Many agencies
cannot. Frankly, their average server utilization is higher
than most, and they got the most savings. I know they are big,
but there is a good news story here on data center
consolidation. That is the one area on legacy spending I think
needs the most focus and continued focus.
Senator Shaheen. Good. That is encouraging, and it is a
message that we should probably do a better job of trying to
get out.
I think one of the things that has been hard, certainly for
me and I think it is true of some other Members of the Senate
and Congress to understand, is why we have duplicate systems
being built within the Air Force and the Army. I appreciate
that some of that is history and tradition, but I think given
the resource challenges that we are facing in the future, the
effort to be more efficient with those systems is very
important. I very much appreciate what you all are doing to
accomplish that and hope that we can continue to help track
those efforts so that we are better informed, and also so that
we can look at how we can be helpful in that effort.
I think given that we are hoping to be out by 4:30 p.m.,
the one area that I would like to ask about has to do with the
House of Representatives passing the Federal Information
Technology Acquisition Reform Act (FITARA) because it is
legislation that is designed to address some of the IT
challenges that we are facing in the Federal Government. I
wonder if you all could speak to what is in the FITARA
legislation. It is my understanding that DOD already performs
many of the requirements that are in that legislation. We
already have a single Department CIO within DOD and whether
this is legislation that would be helpful in the efforts to
address the IT challenges that you are facing at DOD or whether
you see it as redundant to what is already going on.
Ms. Takai. Yes, ma'am, if I could speak to that. First of
all, we certainly applaud the legislation from the standpoint
of intent. I think again to the comments that Mr. Powner made,
it is important to have transparency. It is important to have
visibility even for us as CIOs in order to be able to better
manage the overall expenditures. Again, we want to make sure
that the intent of the bill, we think, is very good.
Unfortunately, I think a couple of things. It looks to try
to manage that by virtue of additional oversight. I think what
you heard from my colleagues and I today is that we very
strongly feel that it is in the processes that are implemented
and it is in the measurements of how we are actually managing
the process as opposed to an additional oversight. Many of the
areas of oversight that were suggested in the bill are actually
things that we report to OMB on today, and so additional
reporting, I think, is a concern.
Many of the items that were in that bill are actually the
things that the Secretary has tasked us to do already in his
direction that Mr. Scheid spoke of in his reorganization
effort. Obviously, our concern is that if, in fact, those
reporting requirements do not fit, then we could be in a very
difficult situation of an oversight from the OMB Office of CIO,
oversight as a result of this bill, and then oversight as it
relates to the way we are fitting into what the Secretary has
asked us to do.
We are, again, more concerned about the implementation than
the intent. We mentioned to your staff there are some areas
where we believe that we could move forward with the intent,
but do it in a little different way than the level of oversight
that is suggested in the bill.
Senator Shaheen. Mr. Powner, do you share that view of how
the House-passed legislation might affect DOD?
Mr. Powner. Yes. I think you need to be careful on the
reporting. I agree with that because we want to get into good,
solid management and not just reports. There are aspects of the
bill that are very solid-like data center consolidation. There
are separate bills on data center consolidation. The Dashboard
is in there in a small way such as encouraging the movement to
cloud. I think the CIO authority thing is a big issue because
CIOs do not have the appropriate authority across the Federal
Government. There is a fundamental question if you grant them
authority by giving them budget authority, or do you make the
CIOs earn it through having certain responsibilities associated
with Dashboard and the like. That was the intent of Dashboard.
If we get CIOs more engaged on all these major investments,
they will be even more of a player at the table on the
management team.
Again, I think there are aspects of that bill that are very
solid, and I think the question on oversight is basically to
cut right to the chase, what happened. A lot of things that are
in that bill are exactly what Ms. Takai is saying you are
already doing because OMB put in place policies to do that.
There is a fundamental question of whether OMB is doing the
appropriate oversight of those policies. We have some issues
with that. So I think Congress is saying if OMB is not going to
oversee it, then we are going to oversee it.
Bottom line on all this, let us make sure that we better
manage IT acquisitions and have the right transparency and
oversight, whether it is Dashboard or a similar mechanism, and
let us manage the inefficiencies out of the legacy bucket
because DOD spends $25 billion on legacy systems out of an $80
billion spend. That is huge. You can see here that there are a
lot of inefficiencies that we can tackle through duplicate
systems and data center consolidation. That intent of the bill
is spot-on to try to tackle those issues. How do you go about
doing it? There are many ways of doing it. But let us not lose
sight of the big things there.
Senator Shaheen. I appreciate the comments that everybody
has made. Is the reason to pass something like FITARA to
address administrative changes that are going happen when we
have a new Secretary of Defense, when we have a new CIO, when
we have new leadership at DOD, GAO, and OMB? Is there a concern
that the efforts that are underway now will change direction,
will not go to completion? Is that something we should be
concerned about as we are thinking about how to fully implement
some of these efforts?
Ms. Takai. I will speak for DOD, and certainly the other
agencies are in a different situation. But it is really not a
concern at DOD because the functions that the Secretary has
tasked me for are actually incorporated in my ongoing charter
and the charter for my organization. So the next person who
comes into the position will start with a set of
responsibilities. I think that there is a continuity from
there.
I will, though, make the comment, and I do want to follow
up on an item that Mr. Powner spoke of and I think you spoke of
as well, that the strategic relationship between the CIO and
the head of the agency. Mr. Powner spoke about the importance
of not only the CIO ownership but also of the ownership of
senior executives in the organization. I think that is
something that is important to reinforce in anything that we
are looking at because I think we have seen with Clinger-Cohen
that giving the CIO responsibility is great, but it needs to
have that relationship.
Certainly, I can speak for myself that Secretary Hagel has
fully endorsed the JIE. He has issued that as part of his
tasking to us in terms of what we are supposed to do. That kind
of involvement, back to your question about getting everyone
signed up, quite frankly without that, it would be potentially
close to impossible, but having his endorsement and his
involvement in it, as well as our Deputy Assistant Secretary
and our former Deputy Secretary, has been really pivotal for
us. So I think that that is an important part, and I think Mr.
Powner spoke about that. But I would not want to lose that in
this overall dialogue. It is really very critical.
Senator Shaheen. Thank you all very much. I very much
appreciate your testimony and look forward to continuing to
work with you as you make these changes. Thank you very much,
Mr. Powner, for your insights.
We will keep the record of this hearing open until close of
business on Friday for any other questions.
The hearing is adjourned.
[Whereupon, at 4:21 p.m., the subcommittee adjourned.]
[Questions for the record with answers supplied follow:]
Question Submitted by Senator Tim Kaine
information technology workforce efforts
1. Senator Kaine. Secretary McFarland and Ms. Takai, my first bill,
the Troop Talent Act of 2013, provides avenues for Active Duty
servicemembers to receive certifications for the skills they acquire
through their military training as they transition to civilian life. As
you both highlighted in your testimony, the Department of Defense (DOD)
faces significant challenges finding and retaining personnel with
sufficient training and expertise in information technology (IT). What
specific efforts are being taken by DOD to ensure a mission-ready IT
workforce?
Ms. McFarland. Under Secretary of Defense (Acquisition, Technology,
and Logistics) (USD(AT&L) Frank Kendall and DOD Chief Information
Officer (CIO), Teresa Takai, jointly signed the IT Acquisition
Workforce Strategic Plan in April 2012. The partnership aligns the IT
acquisition workforce improvements to the larger and ongoing strategic
efforts to strengthen and improve the entire Defense acquisition
workforce.
A key tenet of Under Secretary Kendall's Better Buying Power 2.0
framework is to improve the professionalism of the total acquisition
workforce; with respect to the IT segment of the total acquisition
workforce, we have been working hard to accomplish that goal.
Certification levels for the IT workforce improved from 39 percent in
fiscal year 2011 to 61 percent in fiscal year 2013. In addition, as
part of rebuilding the total acquisition workforce, DOD has
deliberately increased the size of the IT (acquisition) workforce by 49
percent since fiscal year 2008. Turnover rates have decreased by 2
percent from fiscal year 2011 to fiscal year 2013.
In addition to increasing the size of the workforce and improving
certification rates, DOD has used the Defense Acquisition Workforce
Development Fund (DAWDF) to fund the DOD Information Assurance
Scholarships to create a cadre of cyber-informed IT acquisition
professionals with degrees.
As part of Secretary Kendall and Ms. Takai's partnership to
continuously improve the workforce, they sponsor a standing joint
working group that performs ongoing workforce planning, gap
assessments, training reviews, and initiatives to enhance the IT
workforce managing acquisitions. In 2012, the working group completed a
competency model update and workforce competency assessments. The
results are being used to improve training and planning for the
workforce. Currently, the working group is partnering with the DOD
engineering workforce working group and the Defense Acquisition
University to ensure cyber competencies are integrated into training.
Ms. Takai. Several strategies are in place to aid DOD in recruiting
and retaining a skilled workforce. DOD currently uses a suite of
civilian hiring authorities: the Federal Direct Hire Authority for the
IT Management 2210 series, instituted by the Office of Personnel
Management (OPM), which provides DOD and other Federal agencies some
flexibility in recruiting information security professionals; Expedited
Hiring Authority for the Defense Acquisition Workforce (including IT
acquisition workforce professionals), provided by Congress to DOD
through 2017; and DOD-specific, Cybersecurity Schedule A Hiring
Authority, provided by OPM through December 2014, for select IT and
non-IT civilian job series. These civilian authorities, along with
military and civilian recruiting and retention bonuses, are used to
recruit and retain IT personnel and are essential to maintaining the
health of this community. In addition to these programs, DOD has used
the Information Assurance Scholarship Program for over a decade to
award scholarships in IT/cybersecurity disciplines to almost 600
individuals in exchange for service to DOD.
DOD is currently in the initial stages of migrating its IT/
cybersecurity workforce into a broader cyberspace workforce framework,
which is aligned to the specialty areas established by the National
Initiative for Cybersecurity Education. As part of this migration, DOD
will work to achieve an integrated learning continuum that provides a
variety of academic environments, including traditional classroom
training; virtual training; hands-on laboratories; realistic,
operational exercises using Information Assurance (IA) and cyber
ranges; and postgraduate education opportunities in a variety of IT-
associated disciplines. DOD is leveraging established training and
education venues both internally and externally to maximize
professional development opportunities for its evolving cyberspace
workforce, and determining where gaps exist. One new initiative is our
collaboration with the Joint Staff and the National Defense University
on a cyber-centric Joint Professional Military Education program to
educate military and civilian leaders on key cyberspace tenets.
______
Questions Submitted by Senator Joe Manchin III
military health records
2. Senator Manchin. Secretary McFarland, last year the committee
expressed concerns with the progress made on military electronic health
records. It is my understanding that DOD has created a new acquisition
process to prepare for the next generation of health record systems for
the military. Please outline DOD's new acquisition framework currently
underway, along with your expected timeline, and how this new process
will ensure success and efficiency.
Ms. McFarland. DOD has updated the DOD Instruction (DODI) 5000.02
acquisition policy that replaced the Business Capability Lifecycle
(BCL) Model that was previously used for the modernization of the
military Electronic Health Records (EHR) but ensures rapid, tailored
processes to deliver capabilities in keeping with the BCL concept.
However, the DOD Healthcare Management Systems Modernization (DHMSM)
Program's acquisition strategy remains unchanged. The program's
acquisition strategy was approved on March 17, 2014. The strategy
supports a full and open competitive approach for acquiring a
replacement for the Military Health System legacy systems to include
the DOD's interoperability objectives. The DHMSM acquisition strategy
is consistent with the DODI 5000.02 and capitalizes on the robust and
highly competitive health IT commercial marketplace.
3. Senator Manchin. Secretary McFarland, I understand that you have
held 2 industry days to gauge interest and assess capabilities. Do you
have concerns with industry's capability to deliver the necessary
capabilities required with this system?
Ms. McFarland. Since October 2013, the DHMSM Program Office has
conducted 3 well-attended and highly anticipated Industry Days (October
31, 2013; December 4, 2013; February 19, 2014). The last 2 Industry
Days were hosted at the Ronald Reagan Building and International Trade
Center in Washington, DC, with each attended by over 500 interested
health care professionals representing over 200 companies and
Government organizations.
The intent of these Industry Days is to interact frequently with
interested healthcare companies to gauge and enhance their
understanding of the DHMSM requirement; which includes the replacement
of DOD's EHR system. These Industry Days are strategically aligned with
the release of an iterative set of draft Request for Proposals (RFP)
which provide interested contractors and healthcare providers early and
frequent exposure to the Government's evolving DHMSM requirements.
These early introductions to our ongoing requirements development
efforts, in advance of a final RFP, will serve to greatly enhance
prospective offerors and/or interested parties understanding of the
Government's future requirements while reducing ambiguity. This draft
RFP process also affords industry an opportunity to offer comments,
suggestions, and/or pose questions regarding any element of the RFP.
Additionally, in conjunction and coordination with the draft RFP
release process, the Government has issued a number of targeted
Requests for Information to industry to support the technical and
functional viability determinations regarding industry capablilities in
delivering a commercial EHR platform in fulfillment of DOD objectives.
Finally, extensive market research and product assessments/
demonstrations have been performed by the DHMSM team to ensure
alignment of DOD requirements with market capabilities. The totality of
the aforementioned assessment lends for the programmatic certainty that
the commercial market is more than capable of delivering the requisite
and desired capabilities.
At the end of March, the DHMSM Program Office will release its
second draft RFP and is committed to the continued release of drafts,
and the holding of Industry Days until the Government is satisfied that
industry has the requisite grasp of the DHMSM requirement; and is
capable of accurately bidding to said requirement--the foundation of a
successful competitive acquisition.
______
Questions Submitted by Senator Kelly Ayotte
programs that use an incremental approach
4. Senator Ayotte. Mr. Powner, in your written testimony, you state
that many ``poor-performing projects have often used a `big-bang'
approach--that is, projects that are broadly scoped and aim to deliver
capability several years after initiation.'' By contrast, you noted
when Federal agencies used ``smaller increments, phases, or releases of
larger projects'' they were far more successful. What DOD programs are
using this incremental approach?
Mr. Powner. Congress and the Office of Management and Budget (OMB)
have called for agencies to deliver investments in smaller parts or
increments. In 2010, OMB called for IT investments to deliver
capabilities every 12 months, and since 2012, has required investments
to deliver capabilities every 6 months. The preliminary results of our
ongoing review of selected agencies' implementation of incremental
development indicate that only 1 of 37 selected DOD investments plans
to deliver functionality every 6 months and 10 others plan to deliver
functionality every 12 months. In May 2014, we plan to issue a report
requested by the Chair and Ranking Member of the Senate Committee on
Homeland Security and Governmental Affairs that will contain greater
detail. Once our report is released, we can provide further detail and
brief your staff.
5. Senator Ayotte. Mr. Powner, what programs are not using this
incremental approach?
Mr. Powner. As previously noted, the preliminary results of our
ongoing work on selected DOD investments show that several investments
have not implemented OMB's guidance on incremental development. These
investments likely did not plan to deliver functionality in 6-12 months
because DOD's budget guidance encouraged 12-18 month deliveries.\1\
While DOD's recently issued acquisition framework calls for investments
to use incremental development, it does not specify how frequently
functionality should be delivered.\2\ According to officials at DOD's
Office of the CIO, longer increments better align with DOD's
acquisition framework. While we did not examine DOD's entire portfolio
of IT investments, such guidance increases the likelihood that many of
DOD's other investments are not following an incremental approach. We
would be pleased to provide further detail and brief your staff once
our report is issued in May 2014.
---------------------------------------------------------------------------
\1\ See, for example, Office of the Secretary of DOD, Guidance for
fiscal year 2013 IT Budget Submissions, Aug. 9, 2011.
\2\ Defense Instruction Interim 5000.02, Operation of the Defense
Acquisition System, Nov. 26, 2013.
6. Senator Ayotte. Mr. Powner, how does DOD determine which
approach to use for which program?
Mr. Powner. DOD's acquisition framework includes incremental
approaches to software development, but does not mandate its use or
specify timelines for delivery of functionality. Instead, it offers a
series of basic models which are to be tailored to the unique character
of the product being acquired. All of the models contain requirements
and product definition analysis, risk reduction, development, testing,
production, deployment, and sustainment phases punctuated by major
investment decisions at programmatic and contractual decision points.
proper training of acquisition professionals
7. Senator Ayotte. Secretary McFarland, in November 2012, DOD
launched its Better Buying Power 2.0 initiative. One of the most
important changes from Better Buying Power 1.0 was greater emphasis on
improving and professionalizing the acquisition workforce. Ensuring
that DOD has a ``knowledge[able] and experienced IT workforce'' was
also one the ``guiding principles'' of the 2010 DOD report to Congress
titled, ``A New Approach for Delivering Information Technology
Capabilities in the Department of Defense.'' However, the Omnibus
Appropriations legislation only allocated approximately $51 million for
DOD's Acquisition Workforce Development Fund, whereas section 1705 of
title 10 authorizes the fund at $800 million for fiscal year 2014.
Isn't investing in our acquisition workforce likely to pay for itself
many times over in lower acquisition costs?
Ms. McFarland. Yes. DOD supports Congress' continued and sustained
investments in the defense acquisition workforce through the DAWDF.
Even in the current austere fiscal environment, maintaining a cadre of
highly qualified acquisition workforce is essential to executing
critical missions in support of our Nation's defense. Reducing
investments in the DAWDF and allowing our workforce and their skillsets
to atrophy compromises our ability to effectively execute essential
missions and may lead to long-term acquisition costs. For these
reasons, continued investments in the defense acquisition workforce is
the right strategy to improving acquisition outcomes, increasing buying
power, and ensuring technological superiority for the warfighter.
8. Senator Ayotte. Secretary McFarland, given some of the major
acquisition failures in recent years, is $51 million a sufficient level
of funding to ensure our acquisition workforce is sufficiently trained,
especially in such technical areas as IT acquisition?
Ms. McFarland. No, this level is not sufficient. The DAWDF, created
by this committee, has been a major enabler of acquisition workforce
improvements, including IT. We must sustain these recent workforce
improvements and especially during austere times, we must continue
training and efforts to strengthen the workforce we have. The
President's fiscal year 2015 budget request of $212.9 million, in
combination with other planned funding, is required to sustain and
continue improvements. We appreciate the committee's longstanding
record of support for a highly qualified acquisition workforce.
intellectual property
9. Senator Ayotte. Secretary McFarland and Ms. Takai, one of DOD's
most costly oversights has been the failure to secure data rights of
the systems being acquired. The result is that DOD must pay significant
sums to gain those rights in order to perform maintenance of upgrades
to the system. I understand that the new interim DODI 5000.2,
``Operation of the Defense Acquisition System,'' includes an
Intellectual Property (IP) strategy and a preference for open systems
and architectures. Please explain the importance of the IP strategy and
a preference for open systems and architectures.
Ms. McFarland. IP issues present significant challenges for DOD
programs in a variety of ways. For example, when acquiring commercial
or proprietary technologies, the standard DFARS license rights do not
permit DOD to use detailed technical data or computer software source
code for competitive sustainment activities. In addition, even when DOD
funds technology development that results in license rights sufficient
for competitive sustainment, DOD has often been unable to realize an
appropriate return on that investment by securing the necessary data
deliverables at competitive prices. These adverse effects are
exacerbated further in major system acquisitions involving a complex
mix of DOD-funded and commercial/proprietary technologies that cannot
readily be segregated from one another--resulting in the entire data
package being effectively restricted as if it were all proprietary/
commercial.
Open Systems Architecture (OSA) describes a technical approach to
system design that not only facilitates more effective operational
configurations for systems, but also directly supports more effective
management of the associated IP issues. More specifically, OSA focuses
on modular system design, wherein discrete, functional components are
linked to one another through well-defined interfaces, preferably using
open standards to allow vendors and suppliers to offer competing
solutions for the functional modules in a ``plug-and-play'' paradigm.
This approach to technical design naturally results in the technical
data and computer software code for the modules being more readily
segregable from one another, avoiding or mitigating cases in which a
commercial/proprietary module will restrict the use of a DOD-funded
module.
The IP strategy required by DODI 5000.02 will serve as a
foundational mechanism to help identify and manage IP issues throughout
the entire program life cycle. A key element in this approach is to
take advantage of the inherent benefits of modular design approaches,
such as OSA, to better maintain appropriate distinctions between DOD-
funded technologies and proprietary/commercial technologies. This
allows programs to implement an ``open business model'' approach, to
proactively manage technology investments both from a legal standpoint
(e.g., data rights), as well as a technical/operational standpoint
(e.g., data deliverables, modular components linked through defined
interfaces), ensuring the use of appropriate contractual mechanisms
that will better achieve the programs' business objectives.
In addition, the IP strategy will address one of the most
challenging elements of managing IP issues--the timing. IP rights are
allocated early in the process, when the technology is first developed
or first delivered (e.g., at development or initial production);
however, DOD might not have an operational need to exercise those IP
rights (which requires the appropriate data deliverables) until much
later in the program life cycle (e.g., reprocurement, technical
upgrades, depot level maintenance). Historically, programs have not
been equipped to plan effectively for such downstream needs, electing
instead to delay the acquisition of data deliverables, or additional
data rights to allow competition, until those later life cycle phases
when the specific needs are more well-defined. This approach typically
results in DOD seeking to acquire those data deliverables and/or
license rights in noncompetitive environments.
The IP strategy seeks to eliminate, or at least mitigate, these
barriers to competition by requiring programs to initiate the IP
strategy at the earliest stages in the program, requiring coordination
and consistency with life cycle sustainment planning, and ensuring that
the IP strategy is continuously updated throughout the entire program
life cycle. With this overarching IP strategy in place, our programs
will be better able to implement tactical measures (e.g., contract
requirements, including priced options) to manage IP issues and remove
barriers to downstream competition. DOD is working on a variety of
mechanisms to provide training and guidance for the acquisition
workforce on these considerations.
Ms. Takai. IP issues can be best managed by addressing them as
early in the acquisition process as possible. Within our Enterprise
Software Initiative (ESI), we provide broad terms and conditions as
part of a master software agreement for software acquired through ESI
procurement vehicles. These broad terms and conditions can then be
tailored and expanded to include specific requirements related to the
software acquisition. The IP strategy in DODI 5000.02 is extremely
important in that it will enforce the rigor of addressing IP issues
early in the lifecycle to ensure the appropriate terms and conditions
are established.
OSA is an important aspect of addressing IP issues in that it
relies upon non-proprietary interface standards that preclude the need
to develop unique data exchanges. This requires that developers comply
with the non-proprietary standards in the management of data associated
with a capability thereby not locking DOD into a specific vendor
solution for exchanging data.
past reform
10. Senator Ayotte. Secretary McFarland, Ms. Takai, and Mr. Scheid,
DOD has made numerous efforts in the past to overhaul and improve its
IT architecture, including the establishment of the Business
Transformation Agency (BTA), by then Deputy Secretary of Defense Gordon
England in 2005. Please describe what stumbling blocks these past DOD
efforts encountered and what steps you are taking to eliminate them for
the future.
Ms. McFarland. DOD's report, ``A New Approach for Delivering
Information Technology Capabilities in the Department of Defense'',
from November 2010, identified a number of strategic initiatives that
have been initiated or implemented in the areas of requirements,
acquisition, and portfolio management intended to improve the delivery
of IT capabilities. A summary of the DOD accomplishments in several
areas related to IT acquisition are:
Requirements: For warfighting requirements, DOD
developed and matured the Joint Capability Integration and
Development System IT box. The IT Box represents a major change
for Information Systems (IS) requirements development by
enabling the delegation of authorities to specifically support
the more rapid timelines necessary for IT capabilities through
the Defense Acquisition System process. For business system
requirements, the Chairman of the Joint Chiefs of Staff
delegated requirements validation authority to the Defense
Business Council (DBC) providing DOD with a forum to align
business system requirements with business strategies as well
as laws, regulations, and policies that are unique to acquiring
Defense Business Systems (DBS).
Acquisition: Many of the acquisition-centric
initiatives were included in the interim DODI 5000.02 released
by the Deputy Secretary on November 26, 2013. Significant
5000.02 changes include:
Acquisition Models: The interim DODI 5000.02
explains common models of acquisition in order to
provide program structures and procedures tailored to
the dominant characteristics of the product being
acquired and to unique program circumstances (e.g.,
risk and urgency). The models are: Hardware Intensive
Program, Defense Unique Software Intensive Program,
Incrementally Fielded Software Intensive Program,
Hybrid Program A (Hardware Dominant), Hybrid Program B
(Software Dominant), and an Accelerated Acquisition
Program.
Short Duration Projects: The templates in the
interim DODI 5000.02 aligned to acquisition models and
will enable and encourage shorter duration projects.
Tailoring: The interim DODI 5000.02 includes
guidance to adopt a modular, open-systems methodology
with heavy emphasis on ``design for change'' in order
to adapt to changing circumstances consistent with
commercial agile methodologies.
IT Infrastructure: DOD is moving towards a common IT
infrastructure known as the Joint Information Environment
(JIE). Through the development of common architectures and
standards and smart implementation of JIE, DOD is striving to
improve mission effectiveness, increase cybersecurity, and
realize IT efficiencies. Increment 1 of JIE is focused on
establishment of core data centers operating behind approved
single security architecture under the direction of enterprise
operations centers.
Portfolio Management: DOD has taken initial steps to
organize IT systems into portfolios of capabilities starting
with DBS. Section 901 of the National Defense Authorization Act
(NDAA) for Fiscal Year 2012, codified at title 10, U.S.C.,
section 2222, established DOD's single Investment Review Board
(IRB), known as the DBC to manage DOD business operations
including DBS spending. The DBC is managing a portfolio of
approximately 1,180 DBS with an annual cost of $6.7 billion.
The DBC continues to align planned DBS spending with business
strategies and requirements retiring 60 DBS over the past 2
years and identifying an additional 150 legacy DBS that are
planned to retire over the next 3 years. For fiscal year 2014,
the DBC decided not to certify for obligation requests totaling
$617 million. Additionally, in response to section 933 of the
NDAA for Fiscal Year 2011, DOD established the Cyber Investment
Management Board to integrate processes, align strategies,
assess resource requirements, and rapidly provide acquisition
governance and portfolio management for cyber capabilities.
Ms. Takai. Our existing IT environment consists of ``stovepipes of
excellence'' where we have systems and infrastructure that have been
designed to satisfy specific functions, but not necessarily designed
and built to integrate or interoperate with other systems that do
different functions. This has resulted in network and architectural
complexity that is inefficient and hinders our ability to defend
against cyber attacks.
My office is leading a multi-year effort to restructure much of
DOD's underlying network, computing, and cybersecurity so as to make us
more agile in deploying new decision support capabilities, improve
cybersecurity of our core DOD missions, and make us more efficient and
better stewards of taxpayers' resources. This effort, the JIE, will
improve the agility and responsiveness of our IT systems in support of
our warfighters, and improve our ability to defend against cyber
attacks. We are implementing JIE through and with the Services using
DOD's existing core--requirements, budgeting, and acquisition process.
This effort is based on DOD's leadership understanding that our IT
infrastructure and systems are critical enablers for DOD operations.
The support of both the Secretary of Defense and the Chairman of the
Joint Chiefs of Staff has been, and will continue to be, critical to
the success of this effort.
Mr. Scheid. DOD continues to improve its business operations
through efforts to better modernize, integrate, and govern its business
IT systems. Over time, it became clear that the stumbling blocks to
success in these improvements were related to the need for more
comprehensive systems oversight and establishment of Department-wide
governance. Recognizing these problems, in 2005 DOD created the BTA to
provide oversight and establish governance mechanisms, including the
Defense Business Systems Management Committee. Following enactment of
the NDAA for Fiscal Year 2008, DOD created the position of the Deputy
Chief Management Officer (DCMO), which further increased the oversight
and level of visibility on DOD's business systems and processes.
Changes to the law governing oversight of DBS through enactment of the
NDAA for Fiscal Year 2012 further enhanced the governance of these
systems.
Currently, DOD is considering its next steps forward. As Secretary
Hagel announced in December 2013, he wants to better align
responsibility and accountability for IT systems under the CIO; while
strengthening the role of the DCMO across DOD. These steps are intended
to drive more efficient and effective business practices and make
better use of scarce resources.
proper conduct of the audit
11. Senator Ayotte. Mr. Scheid, section 1003 of the NDAA for Fiscal
Year 2010 charges the Chief Management Officer of DOD, in consultation
with the Comptroller, with devising a Financial Improvement and Audit
Readiness plan which describes the specific actions which must be taken
to ensure that the financial statements of DOD are validated as ready
for audit by no later than September 30, 2017. Currently, there is an
argument within DOD over whether to include valuations of property as
part of the audit which is required to be completed in fiscal year
2018. Though establishing the value of a company's property is critical
in the private sector, some argue it may be less necessary to ascertain
the value of property owned by DOD. They argue that the benefits of
knowing the value of a destroyer, for example, does not warrant the
amount of resources required to establish this value. What are your
views on this debate?
Mr. Scheid. There is no internal DOD argument or debate about
whether or not property, plant, and equipment (PP&E) valuation should
be undertaken. DOD intends to be compliant with the spirit and intent
of the law to be audit ready in order to achieve a clean opinion. To do
that, current Federal financial accounting standards require DOD to
report PP&E assets at full acquisition cost. Given this, DOD has gone
ahead and published equipment valuation guidance, with various options
for valuing assets and costs associated with the audit effort.
Components will determine which options work best within their standard
business processes.
A macro perspective would suggest that providing the value of DOD
assets is prudent. The current value of DOD's PP&E represents more than
71 percent of the PP&E values reported for fiscal year 2012 for the
entire Federal Government. To omit DOD's valuations ignores a large
portion of Federal PP&E.
However, at a department level, it is questionable whether or not
DOD would ever use valuations of its PP&E in future decisionmaking, to
the extent that the practice would yield more worth or benefits than
the cost of carrying out and maintaining these extremely complex
enterprise-wide valuations themselves. DOD is not like the private
sector, where a company's asset value plays an important role in
characterizing its financial position. Further, it is not likely we
would, for example, make operational judgments to send a task force
into action based on the value of task force assets. DOD does believe,
however, that there are certainly other elements of a PP&E audit, such
as existence and completion, that could benefit DOD.
12. Senator Ayotte. Mr. Scheid, would DOD use valuations of
property?
Mr. Scheid. At a department level, it is questionable whether or
not DOD would ever use valuations of its PP&E in future decisionmaking,
to the extent that the practice would yield more worth or benefits than
the cost of carrying out and maintaining these extremely complex
enterprise-wide valuations themselves. DOD is not like the private
sector, where a company's asset value plays an important role in
characterizing its financial position. Further, it is not likely we
would, for example, make operational judgments to send a task force
into action based on the value of task force assets. DOD does believe,
however, that there are certainly other elements of a PP&E audit, such
as existence and completion, that could benefit DOD.
13. Senator Ayotte. Mr. Scheid, how significant of an additional
undertaking is it to establish values for property?
Mr. Scheid. The valuation aspect of auditability will require a
significant investment of time and resources, one that DOD has never
undertaken in full. Participation is not just by auditors, but by many
people across DOD, in every functional area of the Defense business
space, both horizontally and vertically. That said, I recognize how
important this information is in reaching full auditability, as
required by law. DOD is looking into the most cost effective approach
to establishing values and complying with standards.
14. Senator Ayotte. Mr. Scheid, how many additional auditors are
required to establish these valuations?
Mr. Scheid. DOD is studying the cost of making and auditing
property and equipment values. Valuation is only one element in the
audit of PP&E. The valuation effort will require not only auditors but
also program managers, asset owners, and all other stakeholders to be
accountable and determine a reasonable methodology of establishing
values for their assets. This effort will require a significant
investment of time and resources across DOD. The auditors will verify
not only the estimated value, but also the existence of our property,
whether we have inventoried and reported all of our equipment and
property, and whether we own or have the right to use that property.
Given the complexity of this effort, a large number of audit staff will
likely be required to validate the existence of the property and assess
the reasonableness of the valuation methodology developed by DOD.
15. Senator Ayotte. Mr. Scheid, are we talking about every M-16 and
rucksack, or are we talking about larger items, like F-16s and M-1
tanks?
Mr. Scheid. In most cases, we do not need to know the value of
every item of equipment to perform our mission. Our current plan is to
first compute values on our newer, high-value assets using actual costs
or estimating methodologies that are permitted. Older assets will be
valued, if deemed necessary. We do need to know depreciated value and
remaining useful life of an asset as we make decisions that will shape
valuation outcomes, such as disposition of equipment in theater.
16. Senator Ayotte. Mr. Scheid, if this requirement were lifted,
would it allow DOD to achieve key audit deadlines sooner and then to
maintain that audit readiness less expensively?
Mr. Scheid. Lifting the requirement would help but would not
accelerate the target date, as there are other elements and processes
associated with the financial statements that DOD is readying for
audit. Less stringent requirements will certainly help with sustaining
an audit ready environment once achieved.
5000.02 reissuance and the section 804 report
17. Senator Ayotte. Secretary McFarland and Ms. Takai, section 804
of the NDAA for Fiscal Year 2014 required the Secretary of Defense to
develop and implement a new acquisition process for IT systems based
upon the 2009 recommendations of the Defense Science Board (DSB). This
resulted in a report from then Deputy Secretary of Defense, William
Lynn, titled: ``A New Approach for Delivering Information Technology
Capabilities.'' The report listed five Guiding Principles for crafting
a new acquisition system. Those Guiding Principles included:
Deliver Early and Often: on shifting the acquisition
culture from one which focuses on a single delivery of a system
to one which comprises multiple deliveries every 12 to 18
months;
Incremental and Iterative Development and Testing:
which is very similar to ``deliver early and often'' but also
calls for the use of prototyping and moving away from the
deployment of a ``Big Bang'' approach;
Rationalized Requirements: which seek to move away
from customized solutions toward systems using open modular
platforms based on established standards to ensure
interoperability and seamless integration;
Flexible/Tailored Process: specifically an acquisition
process optimized for IT; and
Knowledgeable and Experienced Workforce.
Which of these Guiding Principles were incorporated in the DODI
5000.02 reissuance and which were not?
Ms. McFarland. The interim DODI 5000.02 issued on November 26,
2013, includes a series of models that serve as examples of program
structures tailored to the dominant characteristics of the product
being acquired. One of those models is a very flexible process designed
specifically for Incrementally Fielded Software Programs. As implied by
the title, the model provides capability via a multi-increment
approach. Each increment provides rapid delivery of capability through
several ``limited fieldings'' in lieu of a single full deployment. Each
limited fielding provides the user with mature and fully tested sub-
elements of capability. Several limited fieldings will typically be
necessary to satisfy requirements for an increment and several
increments will be required to achieve the required capability. This
model will apply to many IT programs and particularly to cases where
commercial off-the-shelf software, such as commercial business systems
with multiple modular capabilities, are acquired and adapted for DOD
applications. I believe this model, combined with our continued
commitment to acquire, train, and sustain a first-class acquisition
workforce is consistent with the five Guiding Principles.
Ms. Takai. The interim DODI 5000.02 includes guidance reflecting
each of the five Guiding Principles and is consistent with the intent
of the 2009 DSB recommendation. An overarching theme of the policy is
that acquisition program strategies and oversight should be tailored to
the unique characteristics of the product being acquired. The policy
describes several acquisition models that accommodate a range of IT
from command and control systems to those types of IT systems that
require delivery of capability early and often. Model 3, Incrementally
Fielded Software Intensive Program, specifically addresses the need to
quickly deliver incremental and iterative IT capability that satisfies
DOD's requirements. To meet the increased flexibility of the
acquisition process, it is critical that the acquisition workforce
continues to improve. The interim DODI 5000.02 includes minimum
standards and expectations for the program management office and the
entire acquisition chain of command.
18. Senator Ayotte. Secretary McFarland and Ms. Takai, what more
needs to be done to ensure these Guiding Principles guide DOD
acquisitions?
Ms. McFarland. We believe our acquisition policy is well-designed
and consistent with the Guiding Principles. Our objective is to ensure
that the policies are institutionalized, effectively employed, and
achieve the outcomes expected. We will closely monitor and make
adjustments, when needed.
Ms. Takai. DOD recently issued guidance that establishes a policy
framework consistent with the five Guiding Principles. My office will
work with the office of the USD(AT&L) to ensure this new framework is
incorporated into new IT acquisition programs and adjusted as necessary
to ensure IT acquisitions are successful. Additionally, we will be
working to ensure these concepts are integrated into our workforce
training efforts.
19. Senator Ayotte. Mr. Powner, to what degree do you believe these
Guiding Principles are guiding DOD's IT acquisition processes?
Mr. Powner. While DOD policies reflect its guiding principles, we
have found that DOD's implementation of these principles needs to be
more consistent. For example, as discussed earlier, the preliminary
results of our ongoing work on selected agencies' implementation of
incremental development indicate that DOD was lacking in areas related
to two of these guiding principles (``Deliver Early and Often'' and
``Incremental and Iterative Development and Testing''). Specifically,
only 1 of 37 selected DOD investments was delivering functionality
every 6 months and departmental guidance was not consistent with OMB's
guidance. We would be happy to share further details and brief your
staff once our report is issued in May 2014. Similarly, our work on
DOD's business systems modernization has found that DOD needs a more
strategic approach to managing its human capital, which corresponds to
the ``Knowledgeable and Experienced Workforce'' guiding principle.\3\
---------------------------------------------------------------------------
\3\ GAO, DOD Business Systems Modernization: Further Actions Needed
to Address Challenges and Improve Accountability, GAO-13-557
(Washington, DC: May 17, 2013).
DEPARTMENT OF DEFENSE AUTHORIZATION OF APPROPRIATIONS FOR FISCAL YEAR
2015 AND THE FUTURE YEARS DEFENSE PROGRAM
----------
WEDNESDAY, MARCH 26, 2014
U.S. Senate,
Subcommittee on Readiness
and Management Support,
Committee on Armed Services,
Washington, DC.
CURRENT READINESS OF U.S. FORCES
The subcommittee met, pursuant to notice, at 2:36 p.m. in
room SR-232A, Russell Senate Office Building, Senator Jeanne
Shaheen (chairwoman of the subcommittee) presiding.
Committee members present: Senators Shaheen, Donnelly,
Hirono, and Ayotte.
OPENING STATEMENT OF SENATOR JEANNE SHAHEEN, CHAIRWOMAN
Senator Shaheen. Good afternoon, everyone. I'm going to
call this hearing to order. This is the Subcommittee on
Readiness and Management Support, and thank our witnesses for
being here, and also for your service to the country.
I'm pleased to be joined by my colleague, the ranking
member of the Readiness and Management Support Subcommittee,
and, of course, the other New Hampshire Senator. We sometimes
call this the New Hampshire Subcommittee. [Laughter.]
Senator Ayotte. Exactly. [Laughter.]
Senator Shaheen. Anyway, we are going to try and expedite
opening statements this afternoon, because, as you may have
heard, there are votes that are happening shortly. We want to
get through as much of the testimony as we can before we have
to recess to go vote and then come back. I will submit my
testimony for the record.
[The prepared statement of Senator Shaheen follows:]
Prepared Statement by Senator Jeanne Shaheen
Good afternoon everyone. This hearing will come to order.
We begin this subcommittee's second hearing of the year alongside
my colleague from the Granite State. It is a pleasure to lead this
subcommittee with Senator Ayotte, and I continue to appreciate her
strong bipartisan support.
We are joined this afternoon by a few familiar faces from last
year's readiness hearing: General John F. Campbell, USA, Vice Chief of
Staff of the Army; General John M. Paxton, Jr., USMC, Assistant
Commandant of the Marine Corps; General Larry O. Spencer, USAF, Vice
Chief of Staff of the Air Force; and Vice Admiral Philip H. Cullom,
USN, Deputy Chief of Naval Operations (CNO) for Fleet Readiness and
Logistics of the Navy. Gentlemen, I sincerely thank all of you for your
dedicated and continued service to our country.
Today, our Nation continues to face a broad range of threats. Last
year's Bipartisan Budget Act did not fix our force readiness problem.
It only temporarily stopped the hemorrhaging of readiness.
Today, all of our Services are making tough choices as they
struggle to meet their operational requirements while also addressing
growing equipment and infrastructure maintenance backlogs. For example,
the Navy's backlog of fleet and infrastructure maintenance requirements
are growing exponentially. More than half of nondeployed Marine Corps
units report degraded readiness in their ability to execute core
missions. More than half of the Air Force's fighter squadrons are not
prepared to support contingency requirements. And our Army can only
provide a limited number of units trained for high-end, complex
operations. The pain of sequestration is felt not only in our Active
components, but in our National Guard and Reserve units as well.
So, today, I am interested in hearing from today's witnesses if the
fiscal year 2015 budget request begins to restore any quantifiable
balance caused by sequestration and what, if any, capabilities and
strategic we risk losing by failing to confront sequestration in future
years.
I want to thank Admiral Cullom and the Navy for last year's
Shipyard Modernization Plan, which identified over $4.2 billion in
facilities maintenance backlog. Yet, I remain concerned that it will
take an estimated 17 years to complete the plan. And 3.4 percent for
the Navy's capital investment program is frankly unacceptable, when at
least 6 percent is required by law. While I understand our near-term
readiness priorities often force additional risk to be taken in other
areas, I continue to be concerned that the long-term viability of our
domestic military installations remains in jeopardy.
Despite these challenges, I remain confident that we still possess
the strongest joint force in the world. We are fortunate to have four
men that exemplify those virtues here with us today. Gentlemen, I thank
you again for taking the time to join us and I look forward to an
informative dialogue. We will include your full statements for the
record, so please summarize your written statements so we can have more
time for a discussion.
Senator Shaheen. I would like to say at the start of the
hearing, that we are all very saddened by the tragic events 2
days ago at Naval Station Norfolk. It reminds us all of our
collective responsibility to keep our shipyards and
installations safe. I know there's an investigation going on,
but, as we await the outcome of that, we certainly are all
thinking about the families, the victims, and the shipmates who
are affected by this tragedy, and our prayers go with them. I
hope, Vice Admiral Cullom, that you will convey that to the
Navy.
I turn it over to my ranking member to see if she would
like to make any comments.
STATEMENT OF SENATOR KELLY AYOTTE
Senator Ayotte. Yes. First of all, I want to thank the
chairwoman.
I also want to pass along my condolences to those who have
suffered at the Naval Station at Norfolk.
I just want to thank you all for being here. This is a very
important time for us, with what's happening around the world
and with the challenges we face for our military.
I will be submitting my statement for the record.
[The prepared statement of Senator Ayotte follows:]
Prepared Statement by Senator Kelly Ayotte
Thank you very much, Madam Chairwoman, I join you in welcoming our
distinguished panel of witnesses and thank you for holding this
important hearing.
General Campbell, thank you for meeting with me yesterday. I want
to thank you for your continued service and for the service of your
entire family.
At a time when our country confronts increasing--not decreasing--
threats, I cannot think of a more important hearing topic than the
readiness of U.S. forces.
A small percentage of our fellow citizens voluntarily step forward
to wear the uniform and protect our country. Congress has a sacred
responsibility to make sure that those who have agreed to serve have
the best possible training and equipment so that they can accomplish
their missions, protect our country, and return home safely.
When Congress fails to provide proper training and equipment, we
risk being confronted with two unacceptable options: deploying troops
into harm's way who are unprepared or failing to respond in a crisis
when our national security interests require action. The first choice
is immoral, and the second is dangerous.
To avoid such horrible choices, we must have a defense budget that
is based on our national security interests and the threats to those
interests. When we fail to match our defense budget with the national
security realities around us, the gap between the military our Nation
has and the military our Nation needs grows.
Unfortunately, I worry that is exactly where we are today.
a more dangerous world
Any objective analysis of the global security environment
demonstrates that the world is becoming more--not less--dangerous.
In Iran, we see the world's worst state sponsor of terrorism,
implementing a shrewd strategy to undermine hard-won international
sanctions in return for only slowing its pursuit of a nuclear weapons
capability from a run to a walk. Meanwhile, the Iranian regime
continues to support Hezbollah and Hamas, while developing an
intercontinental ballistic missile capability that could strike the
United States in the coming years.
In Syria, the conflict rages on with tens of thousands dead and no
end in sight. The longer the fighting continues, the more foreign
Islamist terrorists come to Syria, the more the conflict destabilizes
the region, and the more the conflict there generates threats to our
Homeland.
Al Qaeda-affiliated groups and other terrorist groups--such as al
Qaeda in the Arabian Peninsula, Boko Haram, and Ansar al-Sharia--far
from being on the run, represent a continued threat. Terrorist groups
are growing stronger throughout Africa and the broader Middle East.
In North Korea, a young and unpredictable leader continues to
expand the rogue state's nuclear program and develop ballistic missiles
that could threaten the continental United States. Recently, North
Korea--in a highly provocative act--launched two midrange missiles.
Meanwhile, China is utilizing its growing economic wealth to create
a modern military featuring fifth generation fighters, ``carrier
killer'' missiles, and robust cyber capabilities. In fact, Secretary of
Defense Hagel recently testified that with, ``. . . other nations
pursuing comprehensive military modernization, we are entering an era
where American dominance on the seas, in the skies, and in space [not
to mention cyberspace] can no longer be taken for granted.''
decline in readiness
Despite this sobering array of threats to our vital interests, we
are significantly reducing our defense budget.
While the 2-year budget agreement and the fiscal year 2014
appropriation have provided the Pentagon some modest budget relief, the
defense budget is still set to be reduced dramatically in the coming
years.
This mismatch between reality and our defense budget has resulted
in a dangerous decline in readiness across all of the Services and
throughout the geographic combatant commands.
For example, in fiscal year 2013, budget constraints forced the
Army to cancel essential major training exercises for several brigades,
the Navy to cancel multiple ship deployments, and the Air Force to
stand-down dozens of squadrons--including several combat-coded
squadrons.
We talk of a ``rebalance'' to the maritime-dominated Asia-Pacific
region, but inadequate resourcing is forcing the Navy to only build two
Virginia-class submarines a year. As a result, the size of the Navy's
attack submarine fleet is scheduled to shrink significantly over the
next decade and a half.
About half of non-deployed Marine Corps units have reported
degraded readiness due to equipment and personnel shortages.
Not surprisingly, General Scaparrotti, the Commander of all U.S.
Forces in Korea, expressed concerns yesterday about the readiness of
follow-on forces if a major conflict were to begin on the Korean
peninsula.
General Scaparrotti also stated, ``I am concerned about shortfalls
in critical areas including command, control, communications,
computers, intelligence, surveillance, reconnaissance, missile defense,
[and] critical munitions . . . ''
Despite the fact that al Qaeda affiliates are proliferating
throughout much of Africa, General Rodriguez, the Commander of Africa
Command, testified recently that only a small portion of his
intelligence, reconnaissance, and surveillance requirements are being
met.
These are just a few examples demonstrating the consequences of the
mismatch between our defense budget and the threats we face.
conclusion
The best way to keep our country safe and prevent war is to be
ready to fight one. Unfortunately, I fear our country's margin of
safety is shrinking because there is a mismatch between our defense
budget and the threats we face.
I look forward to hearing our witnesses' assessment of the
readiness of their respective Services.
Thank you, Madam Chairwoman.
Senator Ayotte. Most of all, I want to thank each of you
for your leadership during very difficult times and challenging
times, and the sacrifice not only you've made, but also your
families. We look forward to the testimony today.
Senator Shaheen. Thank you.
Joining us this afternoon are: General John F. Campbell,
USA, Vice Chief of Staff of the Army; General John M. Paxton,
Jr., USMC, Assistant Commandant of the Marine Corps; General
Larry O. Spencer, USAF, Vice Chief of Staff for the Air Force;
and Vice Admiral Philip H. Cullom, USN, Deputy CNO for Fleet
Readiness and Logistics of the Navy. I'm sure they sent you
because Senator Ayotte and I were both here, and you know we'll
ask you about the Portsmouth Naval Shipyard. [Laughter.]
Thank you all very much. We'll begin with you, General
Campbell.
STATEMENT OF GEN JOHN F. CAMPBELL, USA, VICE CHIEF OF STAFF,
U.S. ARMY
General Campbell. Ma'am, thank you very much.
I have provided a written statement. I'd ask you take that
for the record. I would like to provide some opening comments,
though.
Chairwoman Shaheen, Ranking Member Ayotte, thank you very
much for the opportunity to come today and discuss the
readiness of your U.S. Army. I appreciate your support and
commitment to our soldiers, our Army civilians, our families,
our wounded warriors, and our veterans.
Today, the Army remains globally engaged with more than
66,000 soldiers deployed, including about 32,000 in Afghanistan
and about 85,000 forward-stationed in over 150 different
countries.
I'd like to start by thanking Congress for passing the
fiscal year 2014 Consolidated Appropriations Act. This measure
provided the Army some relief from previous defense spending
caps, and gives us predictability in fiscal year 2014 and
fiscal year 2015. While the restoration of some funding in
fiscal year 2014 helps the Army restore readiness, it is not
sufficient to fully eliminate the void in core capabilities
created over the past decade of counterinsurgency operations,
and made greater by sequestration. The current level of fiscal
year 2015 funding will allow the Army to sustain the readiness
levels achieved in fiscal year 2014, but will only generate the
minimum readiness required to meet the Defense Strategic
Guidance (DSG). The anticipated sequestration reductions in
fiscal year 2016 and beyond severely degrade manning,
readiness, and modernization efforts, and will not allow us to
execute the DSG.
To really understand our current and future readiness, I
need to quickly provide context with what happened in fiscal
year 2013. Due to fiscal year 2013 Budget Control Act (BCA)
spending caps, the Army canceled seven Combat Training Center
rotations and significantly reduced home-station training,
negatively impacting the readiness and leader development of
over two divisions' worth of soldiers. Additionally, 12 years
of conflict have resulted in an extensive backlog in our
leadership education and training programs due to reductions of
schoolhouse capacity. Those lost opportunities only created a
gap all the way from 2004 to 2011, because we were focused
exclusively on counterinsurgency. In the event of a crisis,
we'll deploy these units at a significantly lower readiness
level, but our soldiers are adaptive and agile, and, over time,
they will accomplish their mission. But, their success will
come with a greater cost of higher casualties.
Further results of sequestration in fiscal year 2013
include the deferment of approximately $716 million of
equipment reset into fiscal years 2014 and 2015. Sequestration
also postponed the reset of nearly 700 vehicles, almost 2,000
weapons, and over 10,000 pieces of communication equipment,
Army pre-positioned stocks, and numerous soldier equipment and
clothing items. The Army was forced to cut routine maintenance
for nondeployed units, thereby creating an additional $73.5
million in deferred maintenance costs that carried over to
fiscal year 2014. All together, sequestration resulted in the
release of nearly 2,600 civilian and contract personnel,
eroding critical trade skills in fields such as engineering.
Affordability is driving the need to reduce the total Army
end strength and force structure. The Army is in the process of
an accelerated drawdown to 490,000 in the Active component,
350,000 in the Army National Guard, and 202,000 in the U.S.
Army Reserve, by the end of fiscal year 2015. By the end of
fiscal year 2017, we will further decrease end strength to
450,000 in the Active, 335,000 in the Army National Guard, and
195,000 in the Reserve component. These cuts are
disproportionally on the Active Army, and they will reverse the
force mix ratio, going from 51 percent Active and 49 percent
Reserve in fiscal year 2012, to 46 percent Active and 54
percent Reserve in fiscal year 2017. We'll have a greater
preponderance in our Reserve component, both our National Guard
and our Reserve.
In conjunction with these rapid end-strength reductions,
the Army is innovatively reorganizing the current operational
force and eliminating excess headquarters infrastructure in
order to provide greater combat power across remaining brigade
combat teams (BCT). The Army will also restructure our aviation
formation to achieve a leaner, more efficient, and capable
force that balances operational capability and flexibility
across the total Army.
As we continue to draw down and restructure over the next 3
to 4 years, the Army will have readiness and modernization
deficiencies. Fiscal realities have caused us to implement
tiered readiness as a bridging strategy. This concept refers to
maintaining different parts of the Army at varying levels of
preparation. Under tiered readiness, only 20 percent of the
total operational force will conduct collective training to a
level necessary to meet our strategic requirements, and we have
accepted risk to the readiness of multifunctional and theater
support brigades, as well as in home-station training,
facilities, equipment sustainment, and modernization. Forces
deployed in Afghanistan will be fully prepared for the security
assistance mission, but not for other contingencies. Forward-
stationed units in the Republic of Korea will remain ready, as
will those dedicated to the Global Response Force.
Uncertain and reduced funding has degraded our installation
readiness and infrastructure. Base operation support levels
remain under-resourced and need to be a future priority as
additional funds become available.
This year and next are critical to deciding the fate of
what is the greatest Army in the world and could have
significant implications on our Nation's security for years to
come. Cuts implemented under the BCA and sequestration have
significantly impaired our readiness.
Further, I'm concerned about the impact to Army base funds
in fiscal year 2015 if the Overseas Contingency Operations
(OCO) budget request is not acted upon by the start of the
fiscal year. Absent approval of OCO funding, we would be
required to support OCO-funded missions with base funds, which
would immediately begin degrading readiness across the total
Army.
As we continue to draw down the Army, I can assure you that
precision, care, and compassion will be hallmarks of our
process. Ultimately, the Army is about people. As we downsize,
we are committed to taking care of those who have sacrificed
for our Nation over the last 12 years of war. Required
reductions will force out many quality, experienced soldiers.
We have created the Soldier for Life Program to assist those
departing and separating from the Army, and a Ready and
Resilient Campaign to ensure that we care for our soldiers and
their families, which ultimately improves our readiness. Our
wounded warriors and our goals to our families remain a top
priority, and we will protect programs that support their
needs.
I thank you again for your steadfast and generous support
of the outstanding men and women of the U.S. Army. Please
accept my written testimony for the record. I look forward to
your questions.
Thank you very much.
[The prepared statement of General Campbell follows:]
Prepared Statement by GEN. John F. Campbell, USA
introduction
Chairwoman Shaheen, Ranking Member Ayotte, distinguished members of
the subcommittee, thank you for the opportunity to appear before you
today to discuss the readiness of your U.S. Army. On behalf of our
Secretary, the Honorable John McHugh, and our Chief of Staff, General
Ray Odierno, I would also like to take this opportunity to thank you
for your support and demonstrated commitment to our soldiers, Army
civilians, families, wounded warriors, and veterans.
We live in a world that is as dangerous and unpredictable as it has
ever been--from continued unrest in the Middle East, to proliferation
of weapons of mass destruction, to the threat of non-state actors and
transnational terrorist organizations. The Army remains engaged in
worldwide contingencies with more than 66,000 U.S. Army soldiers from
all three components--Active, Guard, and Reserve--deployed including
nearly 32,000 in Afghanistan. In addition, about 85,000 soldiers are
forward stationed across the globe in nearly 150 countries. The Army
remains the best trained, equipped, and led land force in the world,
although reduced funding levels are contributing to existing challenges
in Army readiness. Together, we must ensure our force is trained and
ready to prevent conflict, conduct shaping operations for our
geographic combatant commanders, and if necessary, win decisively in a
major combat operation while denying the objectives of--or imposing
unacceptable costs on--an opportunistic aggressor in a second region.
A trained and ready Army must be able to rapidly deploy, fight,
sustain itself, and win decisively against complex state and non-state
threats in austere environments and rugged terrain. Readiness is
measured at both the service and unit level. Service readiness
incorporates installations and the critical ability of the Army to
provide the required capacities (units) with the requisite capabilities
(readiness) to execute the missions required by combatant commands.
Unit readiness is the combination of personnel, materiel and supplies,
equipment, and training, that, when properly balanced, enables
immediate and effective application of military power.
In 2013, sequestration and unanticipated costs in Afghanistan
resulted in declining readiness throughout the Total Army (Active Army,
Army National Guard, and U.S. Army Reserve). It will take time to
recover from the actions we took in 2013 due to sequestration, and a
return to this method of budgeting would increase the risk to our
soldiers by not adequately preparing them to fight our Nation's wars.
We must maintain balance between the three critical areas of end
strength, readiness, and modernization to avoid becoming a hollow Army.
An example of a hollow Army is a large force that lacks adequate
training and modernized equipment, and is therefore not as effective as
a smaller, well-trained force with cutting-edge technology. Yet cutting
too much manpower risks not having sufficient forces to fulfill our
strategic mission and deter our enemies. If we are required to further
reduce Total Army end strength to 420,000 in the Active component,
315,000 in the Army National Guard, and 185,000 in the Army Reserve by
the end of fiscal year 2019, we will be unable to execute the 2012
Defense Strategic Guidance.
We are at a critical juncture for readiness in our Army. In the
past few months we have received relief from sequestration in fiscal
year 2014 and fiscal year 2015, and are implementing a plan that builds
readiness into a contingency response force that can partially mitigate
current strategic and operational risks to combatant commanders. But
with very tight constraints in fiscal year 2015, and potential
sequestration in fiscal year 2016, readiness will quickly erode across
the force. We must have predictable, sustained funding to ensure the
necessary readiness to execute our operational requirements and the
Defense Strategic Guidance.
As we emerge from two wars the force is transitioning from training
for the conflicts in Iraq and Afghanistan to a comprehensive and
realistic decisive action training environment that features regular,
irregular, and insurgent enemy forces. Sequestration in 2013 cancelled
much of the essential training for this conversion, and while the
Bipartisan Budget Act (BBA) gives us some relief and predictability for
fiscal year 2014 and fiscal year 2015, unless Congress comes together
to build on that model and provide additional relief in 2016 and
beyond, we will face sequestration levels again, undermining this
transition.
Equipment modernization is a critical part of Army readiness and
the decreasing budget has forced us to reassess many programs. The
Army's equipment modernization strategy focuses on effectively using
constrained resources for near-term requirements and tailoring our
long-term investments to provide the right capabilities for soldiers in
the future. Because of fiscal constraints, investments will focus on
Science and Technology and incremental improvements to existing
systems, with very few new start programs. If allowed to go into effect
in 2016, sequestration-level spending caps would require a significant
reduction to Army modernization accounts, with the majority of Army
programs being affected. Major weapons programs would be delayed,
impacting the industrial base both in the near and long term.
Finally, it remains an Army priority to care for our soldiers,
civilians, and family members who have sacrificed over the last 12
years of war, and to build a resilient force ready to respond to a
broad range of contingencies. While we will make every effort to
protect soldier and family programs, they will be unavoidably affected
by workforce reductions, cuts to sustainment funding, and challenges
maintaining Army infrastructure.
Our civilian workforce will also undergo a draw down concurrent
with reductions to military end strength. Most have remained with us,
but the impact of furloughs, pay freezes, and our inability to reward
our most productive employees with performance-based bonuses has caused
some of our highest quality civilians to seek employment in the private
sector. We rely on our civilian teammates and these disruptions
negatively affect Army readiness.
The Army's foremost challenge is building rapidly deployable
contingency capabilities in support of the combatant commanders while
simultaneously reducing its size across all components and fulfilling
the existing worldwide demand for forces. We need congressional support
with adequate, predictable funding, and support for a Total Force
solution during drawdown. Readiness must be maintained at acceptable
levels and in balance with modernization and force structure. If it is
not, we put soldiers at risk, and undermine our ability to deter our
adversaries.
support the current fight
Our top priority remains the readiness of units deploying to
Afghanistan and elsewhere. These units will continue to receive the
highest priorities for both Overseas Contingency Operation (OCO) funds
and base budget requirements. The Army retains the capability to
conduct Mission Readiness Exercises (MRE) at the Combat Training
Centers (CTC) necessary to support forces deploying to Afghanistan or
other theaters.
There are six MREs scheduled at the CTCs in fiscal year 2014
specifically focused on Security Force Assistance missions. It is
important that Congress continues to provide sufficient OCO funding for
our deploying forces.
Retrograde of equipment from Afghanistan continues on pace and we
are responsibly executing our duty to recover this materiel, but need
sustained support. We identify the best, most modern equipment to
recover and Reset for future contingencies. In February 2013, we had
$28 billion worth of Army equipment in Afghanistan. Currently,
approximately $15.5 billion worth of materiel remains in place, of
which we plan to retain $10.2 billion. The Army will divest through
foreign military sales utilizing Excess Defense Article transfers, or
demilitarization of approximately $5 billion worth of equipment.
A fully funded Army Reset program is critical to ensuring that
equipment worn and damaged by prolonged conflict in harsh environments
is recovered and restored for future Army requirements. We estimate the
need for just over $6 billion to reset the remaining equipment from
both conflicts. We have been consistent in our requests for OCO funds
for at least 3 years after the last equipment is withdrawn from
Afghanistan. The Army will need congressional support to complete this
task that we believe is so important to responsibly ensuring future
readiness.
current readiness
The Army can currently provide only a limited number of available
and ready brigade combat teams (BCT) trained for decisive action
proficiency, which will steadily increase through fiscal year 2014 and
the beginning of fiscal year 2015. While the Army's base budget
decreased over the past 2 fiscal years, the Army's responsibilities
under the Defense Strategic Guidance plus commitments to combatant
commanders have not receded in commensurate amounts. While the
restoration of some funding in fiscal year 2014 has helped arrest the
decline in unit readiness, it has not been sufficient to fill the void
in core capabilities created over the past decade of counterinsurgency
operations and by sequestration. We will begin to rebuild readiness
during fiscal year 2014 and fiscal year 2015 by continuing to focus
resources on critical unit level training at the CTCs. However, this
will come at the expense of home station training, installation
support, and the reset of equipment for the Total Army.
In order to achieve the most efficient readiness levels within our
funding limits, the Army is implementing tiered readiness as a bridging
strategy until more resources are made available. Under this strategy,
only 20 percent of the total operational forces will conduct collective
training to a level required to meet our strategic mission, with 80
percent remaining at lower readiness levels. Unless National Guard and
Reserve Forces are preparing for deployment, they will largely be
funded for readiness at the individual, crew, and squad level. Forward
stationed units in the Republic of Korea will remain ready, as will
those dedicated to the Global Response Force. Forces deploying to
Afghanistan will be fully trained for their security assistance mission
but not for other contingencies. The Army is also concentrating
resources on a contingency force of select Infantry, Armored, and
Stryker BCTs, an aviation task force, and required enabling forces to
meet potential unforeseen small scale operational requirements. The BBA
improves the Army's ability to increase collective training in fiscal
year 2014 and fiscal year 2015, but readiness will still take time to
build.
training and professional military education (pme)
Training across the Total Army serves two main purposes: preparing
units to support combatant commands worldwide and developing leaders
who can adapt to the complex security environment. To meet demands
across the full range of military operations, the Army will shift the
focus of training to rebuilding warfighting core competencies. We are
reinvigorating our CTCs to challenge and certify Army formations in a
comprehensive and realistic Decisive Action/Unified Land Operations
training environment that features regular, irregular, and insurgent
enemy forces. We will conduct tough, realistic multi-echelon home-
station training using a mix of live, virtual, and constructed methods
to efficiently and effectively build soldier, leader, and unit
competencies over time.
From 2004 to 2011, all CTC rotations were focused on building
readiness for assigned missions in a counterinsurgency environment.
This shift impacted 5,500 company commanders, 2,700 field grade
officers, and 1,000 battalion commanders. Recognizing the atrophy in
Direct Action/Unified Land Operations training, the Army returned to
conducting decisive action CTC rotations in 2011, with a plan to cycle
nearly all Active Army BCTs by the end of fiscal year 2015 along with
the requisite amount of Army National Guard BCTs. However, due to
sequestration, the Army canceled seven CTC rotations in 2013 and
significantly reduced home station training, negatively impacting the
readiness and leader development of more than two divisions' worth of
soldiers. Those lost opportunities only added to the gap created from
2004 to 2011.
Even with increased funding accommodated under the BBA, in fiscal
year 2014 alone the Army will not be able to train a sufficient number
of BCTs to adequately rebalance the force. Seventeen BCTs were
originally scheduled to conduct a CTC rotation during fiscal year 2014.
Current funding enables the addition of another 2 BCT rotations, for a
total of 19 for the fiscal year. However, due to the timing of the
additional funding, some BCTs were still unable to conduct a full
training progression before executing a CTC rotation. Without the
benefit of sufficient home station training, and with the years away
from direct action, some BCTs begin the CTC rotation at a low level of
proficiency and cannot maximize this training event.
For example, 2nd Armored BCT of the 4th Infantry Division (2-4)
returned to the National Training Center in 2013 for a direct action/
unified land operations rotation, its first since 2002. In the interim,
2-4 had conducted three MREs in preparation for deployments. The return
to direct action in 2013 revealed that many tank platoon sergeants had
never performed as a member of a tank crew, some company commanders had
never maneuvered their units as a part of a combined arms team, and
field grade officers often had no experience in combined arms maneuver.
The lack of leader experience in these skills prevented two to four
from achieving the maximum readiness that a CTC rotation would normally
provide.
For BCTs that do not conduct a CTC rotation, we are using available
resources to train these formations to the highest possible proficiency
level (roughly battalion-level). The Army will continue to prioritize
unit training at the CTCs and the fiscal year 2015 budget allows for 19
rotations.
Leader development is one of the Army's highest priorities because
the increasingly complex and dangerous global security environment
requires well-trained leaders. The unpredictable nature of human
conflict requires leaders to not only lead in close combat but to
understand the operational and strategic environment, to include its
socio-economic, cultural, and religious underpinnings. Our leaders must
demonstrate the competence, proficiency and professional values
necessary to achieve operational and strategic mission success. We must
continue to educate and develop soldiers and civilians to grow the
intellectual capacity to understand the complex contemporary security
environment to better lead Army, Joint, Interagency, and Multinational
task forces and teams. Therefore, we will reinvest and transform our
institutional educational programs for officers and noncommissioned
officers in order to prepare them for the complex future security
environment.
We are prioritizing our institutional educational programs for
officers and noncommissioned officers. The fiscal year 2015 budget will
provide for leader development by funding 8,900 officers to attend
intermediate level education; 7,500 warrant officers to attend
professional development schools; and 6,100 noncommissioned officers to
attend their required professional military education. Additionally,
the fiscal year 2015 budget increases Army civilian leader development
and funds over 150 officers to attend the School of Advanced Military
Studies. While funding for some joint education has declined, we are
prioritizing quality instruction and instructor development.
regionally aligned forces (raf)
The purpose of regional alignment is to improve the Army
responsiveness in support of the combatant commands while remaining
operationally available to respond to global contingencies. Regional
alignment, therefore, provides combatant commands with mission-ready,
tailored forces and capabilities that are further prepared with
cultural, regional and language focused training. This improves the
ability of these Army forces to work within the physical, cultural, and
social environments and thus increases its overall readiness.
Additionally, RAF keeps leaders and soldiers actively engaged
internationally and acts as a positive retention tool.
In fiscal year 2014 we continue to regionally align our Corps,
Divisions, and BCTs. I Corps, stationed at Joint Base Lewis-McChord,
WA, and assigned to U.S. Pacific Command, provides deployable mission
command capability for contingencies and enhances an already strong
Army presence in the Asia-Pacific region. III Corps, stationed at Fort
Hood, TX, and 1st Armored Division headquarters, stationed at Fort
Bliss, TX, are both aligned with U.S. Central Command. Active Army
division Headquarters (HQ) will be habitually aligned to provide at
least one Joint Force-capable HQ to each combatant command. This is
perhaps the most important capability the Army is providing to
geographic combatant commands, as the Division HQs can access a full
range of capabilities from planning to specific enablers. An example of
this is the 1st Armored Division, who deployed to Jordan as part of the
joint exercise Eager Lion, having already coordinated with Central
Command to understand the worsening crisis in Syria. From there, a
tactical command post remained in Jordan to assist the Jordanians and
other partners with a wide range of activities resulting from the mass
humanitarian crisis to the north.
For fiscal year 2013, several units below division-level were
assigned or allocated to combatant commands. The 48th Infantry BCT,
Georgia Army National Guard, is aligned with U.S. Southern Command and
has deployed teams to several Central and South American countries. The
2d Armored BCT, 1st Infantry Division (2-1), currently allocated to the
U.S. Army Africa Command, is the first brigade task organized to the
RAF mission. Since March 2013, they have conducted 71 missions in 35
countries. For example, 2-1 helped train a Niger infantry battalion
which was selected to participate in the African-led International
Support Mission to Mali. Elements of 2-1 have also recently deployed to
Juba, South Sudan to provide embassy protection.
Maintaining Army readiness in the Pacific is essential to the
execution of the National Security Strategy and demonstrates how
regional engagement supports a ready force. Land forces remain the most
important actors in the region, as the Pacific theater contains 7 of
the world's 10 largest armies. The U.S. Army has 80,000 Active and
Reserve troops assigned to or on the periphery of the region; in terms
of manpower, the Army is the largest contributor to U.S. Pacific
Command. Based on persistent threats of escalation with North Korea,
the Army forces on the peninsula are currently maintaining a higher
readiness posture, which is also an element of the Asia-Pacific
Rebalance Strategy. The Army will maintain 19,500 soldiers in South
Korea--partially including a rotating Combined Arms Battalion and its
enablers--as a key part of the U.S. strategy to fulfill our alliance
commitments and deter an increasingly unstable North Korea.
force structure-end strength and total force policy
Adequate numbers of personnel and properly organized units are
critical to the Army's ability to remain ready and fulfill the Defense
Strategic Guidance. The Army is committed to the Total Force Policy:
the Active Army gives us responsiveness and flexibility; the Army
National Guard and U.S. Army Reserve give us depth and endurance. Our
Army is strongest with the contributions off all three components, in
the right combination.
Shaping the force requires extensive analysis consisting of cost
modeling and war gaming informed by our combat experiences to match
specific timelines and readiness-capability levels. Army senior leaders
are in constant dialogue with the heads of the National Guard and U.S.
Army Reserve to manage reductions to all components. The Army must be
able to implement prudent budgetary decisions in a timely manner to
address funding cuts while producing the best possible force to meet
strategic requirements. Delays in resourcing will require shifting of
readiness funds to personnel accounts, further degrading readiness and
contributing to the creation of a hollow Army.
Under the fiscal year 2015 budget request, the Army will decrease
end strength through fiscal year 2017 to a Total Army of 980,000
soldiers--the Active component will be reduced to 450,000 soldiers, the
Army National Guard to 335,000, and the U.S. Army Reserve to 195,000.
The Army will be able to execute the 2012 Defense Strategic Guidance at
this size and component mix, but it will be at significant risk. This
reduction in end strength represents a 21 percent reduction in the size
of the Active Army, a 5 percent reduction in the Reserve, and 6.4
percent reduction in the National Guard since 2011, when the Army was
at a war-time high on total end strength. These cuts largely impact the
Active component and they will reverse the force mix ratio, going from
a 51 percent Active component and 49 percent Reserve component mix in
fiscal year 2012, to a 46 percent Active component and 54 percent
Reserve component mix in fiscal year 2017.
If sequestration-level cuts are imposed in 2016, the Army will be
required to further reduce the Active component to approximately
420,000 (26 percent), the Army National Guard to 315,000 (12 percent),
and the U.S. Army Reserves to 185,000 (10 percent) in order to meet
savings goals and avoid hollowness. Under these conditions, the Army
will not be able to execute the 2012 Defense Strategic Guidance.
aviation restructure
Aviation is a critically important part of the force and represents
a large percentage of the Army budget. Instead of the across the board
cuts imposed by sequestration in 2013, the Army sought an integrated,
Total Army solution to reducing the costs of aviation, while preserving
our most modern capabilities. With participation from representatives
from all components, the Army developed a plan that will better meet
the operational demands of our combatant commanders, sustain
operational experience, and reduce costs. In the process, the Army
aviation force will become smaller by 800 aircraft.
We will divest three entire fleets of aging and costly aircraft,
and realign and remission remaining modern aircraft to derive the most
capability and capacity from a smaller force. We will consolidate all
AH-64 Apache helicopters in the Active Army, where they will be teamed
with unmanned aircraft systems for armed reconnaissance or continue
their traditional attack role. The Active Army will transfer 111
additional UH-60L Blackhawk helicopters to the Army National Guard and
U.S. Army Reserve. These aircraft will significantly improve
capabilities for support of the homeland mission, such as disaster
response, while sustaining security and support capabilities to civil
authorities in the states and territories. The UH-72 Lakota will
replace the TH-67 as the next generation glass cockpit, dual engine
training helicopter. We will transfer nearly all Active Army UH-72
Lakota helicopters to our training base at Fort Rucker, AL, and will
procure an additional 100 UH-72 Lakotas to support the initial entry
rotary wing training fleet. At current funding levels, this approach
will enable the Army National Guard to retain all of its 212 LUH-72
aircraft for general support requirements as well as ongoing border
security operations. The Active Army's overall helicopter fleet will
decline by about 23 percent, or nearly 700 airframes, and the Army
National Guard's fleet of helicopters will decline by 8 percent, or
just over 100 airframes. The resulting Army aviation restructured force
will retain our most capable and survivable combat power. Finally, this
smaller, less expensive force will significantly increase the Army
aviation capabilities most in demand by our Governors.
Essential Investments: People and Equipment
Soldiers, Families, and Army Civilians
The size and scale of mandatory reductions in end strength may
force the Army to separate many quality, experienced soldiers.
Reenlistment quotas are lower, and Officer Separation Boards and
Selective Early Retirement Boards are taking place for many officers.
These started with Lieutenant Colonels and Colonels, and now we are
looking at senior captains and majors in year groups that were assessed
to support a larger force during the height of the two recent
conflicts. This force reduction in the officer corps causes a loss of
valuable leadership and combat experience and thus degrades readiness.
To ensure we are caring for the needs of those who have served the
Nation, the Chief of Staff of the Army created the Soldier for Life
Program in 2012 to facilitate the successful reintegration of our
soldiers, veterans, and their families into their post-Army careers.
Our veterans are our best ambassadors and critical to sustaining the
All-Volunteer Force.
We will make every effort to protect our most important Family
programs, but budget cuts are ultimately affecting every facet of the
Army. To ensure we maintain our focus on rehabilitating, resetting, and
reshaping the force after 12 years of conflict, we continue to develop
the Ready and Resilient Campaign (R2C). The purpose of R2C is to
establish an enduring cultural change that integrates resilience into
how we build, strengthen, maintain, and assess total fitness,
individual performance, and unit readiness. The Army's culture must
embrace resilience as part of our profession and as a key and critical
component to readiness. The campaign leverages and expands existing
programs, synchronizing efforts to eliminate or reduce harmful and
unhealthy behaviors such as suicide, sexual harassment and assault,
bullying and hazing, substance abuse, and domestic violence. Perhaps
most importantly, the campaign promotes positive, healthy behaviors
while working to eliminate the stigma associated with asking for help.
The Army recently published an update to the R2C order directing the
incorporation of resilience into our holistic assessment of Soldier and
Unit Readiness by establishing a unified system of performance
measurement that will drive actions and culture change.
modernization
The Army's equipment modernization strategy plays a key role in
future force readiness. Equipment modernization must address emerging
threats in an increasingly sophisticated technological environment. The
Army must maintain its ability to contend with such diverse threats as
cyber attacks, electronic warfare, unmanned systems, chemical and
biological agents, and air and missile threats. Yet significant
budgetary constraints have forced the Army to make substantial
reductions in modernization investments. Planned research, development,
and acquisition (RDA) investments in fiscal year 2015 have declined 39
percent since the fiscal year 2012 budget planning cycle. The Army's
Equipment Modernization Strategy calls for a mix of divestiture of
selected legacy systems, incremental upgrades to existing platforms,
selected investment in new capabilities, and prioritized science and
technology investments to mature and develop next-generation
technologies. We have also allocated funding toward building the
skilled workforce needed for future innovation.
In the short-term, the Army remains focused on several efforts. We
are reducing procurement to match force structure reductions. We will
continue to apply business efficiencies such as multiyear contracts,
planning for should-cost, and studies to facilitate smarter investing.
We will tailor capabilities in development to meet requirements under
affordability constraints. We will not transition four programs to the
acquisition phase, to include the Ground Combat Vehicle and the Armed
Aerial Scout. Additionally, we will end 4 programs, restructure 30
programs, and delay 50 programs. A notable restructure includes the
Warfighter Information Network Tactical Increment 3.
Lastly, the divestiture of materiel and equipment, where
appropriate, will reduce maintenance and sustainment costs and maximize
resources. Over the long-term, investing in the right science and
technology and applying affordable upgrades to existing systems should
allow us to keep pace with technological change and improve
capabilities.
army organic industrial base
The Army industrial base consists of commercial and government-
owned organic industrial capability and capacity that must be readily
available to manufacture and repair items during both peacetime and
national emergencies. The Army must maintain the critical maintenance
and manufacturing capacities needed to meet future war-time surge
requirements, as well as industrial skills sets that ensure ready,
effective, and timely materiel repair. During fiscal year 2013, the
Army lost more than 4,000 employees from the organic industrial base
and will continue to lose highly skilled depot and arsenal workers to
other industries due to fiscal uncertainty. Hiring and overtime
restrictions, in addition to furloughs, affected productivity and
increased depot carryover, not to mention the detrimental effect on
worker morale. Yet we must continue to size the organic industrial
workforce and leverage the commercial industrial base appropriately,
while sustaining core depot and arsenal maintenance competencies to
support future contingencies.
The Army is assessing key portfolios and the health of the supply
chain, and has taken specific steps to mitigate impacts. Mitigation
measures include advocacy for Foreign Military Sales (FMS), extended
production in certain programs, and investment in key suppliers on a
case-by-case basis. The FMS program helps maintain a healthy base by
keeping production lines and shipping depots active. For example, we
are advocating the Foreign Military Sale of Chinooks, Apaches, Patriot
missile systems, Excalibur rounds, Guided MRLS, and Javelin Anti-Tank
missiles to our most trusted allies. Additionally, stretching out our
production requirements over multiple years and advocating public-
private partnerships for dual use items helps maintain workloads and
keeps production lines open. For example, we are executing a HMMWV
modernization program for the Army National Guard using a teaming
agreement between Red River Army Depot and AM General.
The Army continually assesses the health of key suppliers. For
example, the A.T. Kearney study on the combat vehicle industrial base
identified two critical areas of the supply base that might require
specific mitigation: Abrams tank transmissions and forward looking
infrared radar (FLIR). To mitigate these specific production gaps we
will procure up to 124 new transmissions and 560 critical sensor
components on the FLIR. Similar studies have identified inspectors who
test and adjust turrets and a small sub-set of welders as critical
skills to combat vehicle manufacturing that must be protected.
Finally, in terms of the organic industrial base, the Army has
initiated Joint Acquisition & Sustainment Reviews to highlight problems
faced by Program Executive Offices and our depots and arsenals. These
periodic reviews led by the Army Materiel Command and Army Acquisition
Executive help us manage the challenges across the materiel enterprise.
where we need support from congress
Congress can help the Army by providing adequate financial support
for ongoing contingencies including Afghanistan and other named
operations, as well as the continued costs after these missions
conclude. The costs associated with Operation Enduring Freedom will
persist for years to come in the form of redeployment, reset, and
rehabilitation. The expense of the transfer of equipment is significant
and reset will continue for 3 years after the last equipment arrives in
the United States. We will, of course, provide the best available care
for our wounded warriors, but this also comes at a cost.
Congress should continue recent efforts to provide the Army a more
sufficient and predictable budget. The responsibility also lies with
the Army to mitigate costs, but functioning under sequestration causes
inefficiency and rapidly undermines readiness. Yet, in 2016, without
congressional intervention, sequestration-level caps will return. We
will do our part to ensure the Army is ready to defend the Nation, but
I ask for Congress' help with a sufficient and predictable budget.
Finally, we need congressional support of a Total Army solution to
drawdown. Troop reductions, reforms, and reorganization are necessary
after 12 years of war to prioritize funding in preparation for future
contingencies. Cuts must come from the Total Force--Active, Reserve,
and National Guard--to maintain the balance among all components to
best execute the Army's strategic mission. Any delay to this process
will force further cuts to modernization and readiness and slow the
process of rebalancing the force. We need congressional support to
achieve a Total Army solution.
conclusion
Throughout our history we have rapidly grown our Army for wars, and
then downsized at war's end. Our Army will be smaller than it was in
2001 and the smallest it has been since before World War II, with less
capacity to deter aggression, reassure allies, defend the homeland, and
decisively defeat adversaries. Invariably, there will be a period of
hollowness and decreased readiness during the downsizing, but the
severity of cuts combined with the unpredictability of the current
budget environment and ongoing worldwide commitments has overly
complicated our challenge of keeping the force in balance. Yet we must
strive to achieve this balance as we cannot predict when our Nation
will chose to employ the Army again. If history is any indicator, the
Army will be needed in the next two decades to fulfill our commitments,
secure the Nation's interests, and defeat aggression that threatens
American citizens or territory. We have also learned, in the desert
passes of North Africa, in the mountains of Korea, and on the streets
of Iraq, that the penalty for improperly managing the readiness of our
forces ultimately falls on the backs of our fighting soldiers. It is
our solemn duty to ensure our Army is prepared to fight when called
upon.
Chairwoman Shaheen, Ranking Member Ayotte, and members of the
subcommittee, I thank you again for your steadfast and generous support
of the outstanding men and women of the U.S. Army, our Army civilians,
families, wounded warriors, and veterans. Army Strong!
Senator Shaheen. Thank you.
I apologize, we have about 3 minutes left for a vote, so I
think we're going to recess for about 10 minutes. Hopefully, we
can get this vote in, and the beginning of the next one, and
we'll back to hear the rest of the testimony.
Thank you. [Recess.]
Let me officially call the hearing back to order. Senator
Ayotte is about a minute behind me. As usual, the votes took a
little longer than expected. I think we're going to continue
with the testimony.
If I could ask, I hate to do this to all of you, having
given General Campbell more time, but if you could limit your
remarks to about 5 minutes, that might help us get through the
testimony quicker.
What we're going to try and do for the next votes is switch
off so that either Senator Ayotte or I are here during those
votes.
General Paxton, if I can ask you to begin.
Thank you.
STATEMENT OF GEN. JOHN M. PAXTON, JR., USMC, ASSISTANT
COMMANDANT, U.S. MARINE CORPS
General Paxton. Thank you, Chairwoman Shaheen. To you and
Ranking Member Ayotte and the rest of the subcommittee, I
appreciate the opportunity to report on the readiness of the
U.S. Marine Corps.
Today, your Corps is committed to continuing to remain our
Nation's force in readiness and a force that's truly capable of
responding to any crisis around the globe at a moment's notice.
As we gather today, there are 30,000 marines forward-deployed
around the world, promoting peace, protecting national
interests, and securing our defense. There are more than 6,000
marines today in Afghanistan, and they continue to make a huge
difference to our Nation, our allies, and the world.
In all, your marines who are forward remain well-trained,
well-equipped, well-led, and at the highest state of readiness.
That readiness was proven many times, but at least twice
significantly in the last year, where the Marine Corps
displayed its agility and responsiveness. First, in November,
in the aftermath of the super-typhoon that struck the
Philippines, and then shortly thereafter, in December, with the
rescue of American citizens over South Sudan in December. In
both of those, it demonstrated the reality and necessity for
maintaining a combat-ready force that's capable of handling
today's crisis today. Such an investment is essential to
maintaining our national security and our prosperity in the
future.
I appreciate the opportunity today to talk about readiness
and our ability to maintain it in the future, and how that is
tied imminently directly to the fiscal realities that our
Nation and our Department of Defense (DOD) face in the budget
crisis.
As our Nation continues to face fiscal uncertainty, we're
making the necessary choices to protect our near-term readiness
and to place the Marine Corps on the best trajectory to meet
all those future defense requirements. I look forward to
elaborating on examples of the choices that we have made and
how they impact our training proficiency, our equipment
maintenance, and our unit readiness, to name a few.
As we navigate the fiscal crisis, and as we talk here
today, I would just remind you that we look at things through
five lenses or five pillars around the Marine Corps. Our first
pillar is to recruit and retain high-quality people. The second
one is to maintain the highest state of unit readiness. The
third one is to meet all the combatant commanders' requirements
for our marines. The fourth one is to ensure that we maintain
appropriate infrastructure investments. The fifth one is to
keep an eye on the future by investing in capabilities that
we'll need to meet tomorrow's challenges.
With that, ma'am, I will curtail the rest of the oral
statement and ask that you take the written statement for the
record. I look forward to your questions.
Thank you, Senator.
[The prepared statement of General Paxton follows:]
Prepared Statement by Gen. John M. Paxton, Jr., USMC
Chairwoman Shaheen, Senator Ayotte, and distinguished members of
the Senate Armed Services Subcommittee on Readiness and Management
Support, I appreciate the opportunity to testify on the current state
of Marine Corps readiness and our fiscal year 2015 budget request for
operations and maintenance. We appreciate congressional support for the
readiness of our force.
Today, the Marine Corps, as it has since 1775, remains the Nation's
crisis response force. Continuing to fulfill this role is our top
priority. We have earned a reputation as the Nation's most forward
deployed, ready, and flexible force. The performance of marines over
the past year underscores the fact that responsiveness and versatility
is in demand as much today as it will be in the future. Marines formed
the leading edge of the U.S. humanitarian response to the disaster in
the Philippines and assisted in the evacuation of U.S. embassy
personnel in Juba, South Sudan, all while engaging in combat operations
in Afghanistan and providing forward presence around the globe.
Currently, there are more than 6,300 Active and Reserve marines
forward deployed in support of Operation Enduring Freedom (OEF) in
Afghanistan, a reduction of over 2,000 marines over the past year. The
transition to advisory and mentoring roles has led to successes for the
Afghan National Security Forces.
Additionally in 2013, the Marine Corps supported all six geographic
combatant commands with task-organized units that conducted over 200
Theater Security Cooperation (TSC) engagements including TSC exercises,
bilateral exercises, and military-to-military engagements with the
armed forces of more than 50 partner nations to build partner capacity.
In short, marines stand ready and able to respond to future incidents
that threaten our Nation's interests regardless of the location or the
nature of the occurrence.
current readiness
The Marine Corps is committed to remaining the Nation's Force in
Readiness, a force truly capable of responding to a crisis anywhere
around the globe at a moment's notice. Readiness is the critical
measure of the Marine Corps' ability to be responsive and capable.
Marines are forward stationed and forward-deployed, protecting the
Nation's security by conducting operations that defeat and deter
adversaries, support partners, and create decision space for our
national-level leaders.
We fully appreciate that our readiness today and the ability to
maintain it in the future are directly related to the fiscal realities
of the Department of Defense's budget. As our Nation continues to face
fiscal uncertainty, we are making hard but necessary choices to protect
near term readiness and place the Marine Corps on the best trajectory
to meet future defense requirements. We are protecting readiness with
the realization that our infrastructure sustainment and modernization
investments will be negatively impacted over the long term as we
prioritize limited resources to ensure a ready force now. Such
tradeoffs portend future increased costs and risks to the long-term
readiness of the Marine Corps.
As America's crisis response force, however, your Corps does not
perceive a choice. We are required to maintain an institutional posture
and mindset that facilitates our ability to deploy ready forces
tonight. Programing for acceptable less-ready unit status is not an
option for the Marine Corps. However, as we continue to face the
possibility of full implementation of the Budget Control Act from
fiscal year 2016 to fiscal year 2021, we may well be forced into
adopting some short term or limited scope variations with selected
less-ready units over the next few years.
Taking these realities into account, the Marine Corps' principal
concerns going forward are the readiness of our nondeployed units and
the reconstitution of the whole-of-force after over a decade of
unprecedented sustained conflict. The Marine Corps can sustain its
current operational requirements on an enduring basis; however, to
maintain the high readiness of our forward deployed units, we globally
source equipment and personnel from our nondeployed units, or bench.
Ultimately, readiness comes at a cost and the high readiness of
deployed forces comes at the expense of our nondeployed units.
Our nondeployed forces' principal unit readiness detractor is the
availability of key items of equipment at the unit level with which to
outfit and train units. Based on steady state operations and emerging
requirements, the Marine Corps has accepted risk to both personnel and
equipment readiness of our nondeployed units in order to fully support
forces forward deployed. Currently, slightly more than 50 percent of
our nondeployed units are experiencing degraded readiness in their
ability to execute core missions. Approximately 62 percent of
nondeployed units have equipment shortfalls and 33 percent are
experiencing personnel shortfalls necessitated by the effort to ensure
that forward deployed units are 100 percent manned and equipped. Such
realities portray the imbalance of readiness across the Marine Corps.
This however cannot be our long-term solution to the whole-of-force
readiness, since our nondeployed operating forces serve as an insurance
policy, providing a timely response to unexpected crises or large-scale
contingencies. If those units are not ready, it could mean a delayed
response to resolve a contingency or to execute an operations plan.
In regards to reconstitution, the Marine Corps is not conducting an
``operational pause'', whereby we will have the luxury of focusing
exclusively on resetting war-torn equipment and reconstituting the
force. The Marine Corps' focus is being ready to respond to unforeseen
crises, source rotational units, and meet the ever-increasing demand
for theater security cooperation, under the ``New Normal.'' It should
be noted that our reconstitution efforts remain almost exclusively
reliant on Overseas Contingency Operations (OCO) funding. Overly steep
reductions, or the outright loss of OCO funding, will significantly
impact the ability to reset equipment thus causing depot backlogs and
subsequently placing readiness at risk.
The risk to the Nation is too great to allow the readiness of the
Marine Corps to be degraded. Fiscal year 2015 funding levels protect
current readiness; however, they do so at the expense of the
infrastructure sustainment and equipment modernization, which are keys
to protecting future readiness. This is a logical choice given the
current fiscal situation, but it is not sustainable over time. Ignoring
the impact of this required trade-off for any sustained period will
adversely affect the force in the long term, and create unacceptable
risk for our national defense.
resetting the force
Reset is a subset of reconstitution and comprises the actions taken
to restore units to a desired level of combat capability commensurate
with the unit's anticipated future missions. After more than a decade
of combat, this requires an unprecedented level of effort. The Marine
Corps is resetting its forces ``in stride'' while fighting the war in
Afghanistan and transitioning to meet Defense Strategic Guidance and
``New Normal'' requirements.
The Marine Corps' Operation Enduring Freedom Ground Equipment Reset
Strategy, released in January 2012, guides the execution of our reset
and divestiture strategy. The reset strategy prioritizes investment and
modernization decisions to develop our force. Last year our reset
liability was estimated at less than $3.2 billion. We continue to make
significant progress on resetting our equipment with the help of joint
partners such as U.S. Transportation Command and the Defense Logistics
Agency. Today, we estimate that our remaining ground equipment reset
liability, from fiscal year 2015 through the end of the reset mission,
is approximately $1 billion. We anticipate further refinements as we
drawdown further and gain a more refined perspective on both the
totality of the costs associated with returning our equipment from
Afghanistan and the detailed costs associated with resetting that gear
after more than 12 years of combat. We will continue to ask for only
the OCO funds we know we need to reset our force from OEF, and I note
that DOD's final fiscal year 2015 OCO request will depend on policy
decisions about our enduring presence in Afghanistan that have not yet
been made.
The Marine Corps is on track to complete redeployment of people,
equipment, and sustainment per the established timeline of the
Commander, International Security Assistance Force. The Retrograde and
Redeployment in support of Reset and Reconstitution Operational Group
(R4OG) is a vital element to the Marine Corps' responsible drawdown
from Afghanistan and the successful execution of the Ground Equipment
Reset Strategy. The R4OG was formed in May 2012 and represents the
largest portion of the Marine Corps' contribution to the U.S. Central
Command Materiel Recovery Element and is tasked with preserving the
operational capacity of combat units by shouldering the load of
clearing the battle space of equipment, supplies, and sustainment
stocks. The R4OG is focused on accountability and efficiency within the
redeployment and retrograde process. To date, the R4OG has retrograded
25,800 Marine Corps equipment items valued at more than $576 million,
repaired more than 2,500 shipping containers, processed more than $230
million of excess/serviceable ammunition, and has facilitated the
retrograde of more than 5 million square feet of aviation matting
(AM2). Overall, since the start of OEF retrograde operations in 2012,
the Marine Corps has retrograded 77 percent of its equipment items;
over 75 percent of the supplies, repair parts, and ammunition; and more
than 98 percent of its AM2 matting at the high point of operations in
Afghanistan.
depot capacity
The bulk of ground equipment reset execution is occurring at our
depot. The continued availability of depot capacity at our Marine Depot
Maintenance Command, consisting of depots at Albany, GA and Barstow, CA
is critical to our ground equipment reset strategy, and our ability to
reconstitute the force by 2017. The Marine Corps' total OEF ground
equipment reset requirement includes approximately 71,000 principal end
items. About 77 percent of those items have begun the reset process,
and just over 40 percent of our total requirements are reset complete.
With support of the fiscal year 2015 baseline and our anticipated OCO
request, we continue on the path to being able to complete the reset of
ground equipment on time, avert backlogs, and return equipment to our
Operational Forces as rapidly as possible.
With regards to Marine aviation, the Bipartisan Budget Act (BBA)
provides the Department of the Navy with funding relief to buy down the
previous backlog of airframes and engines; however a depot backlog
still remains. The Marines Corps' F/A-18A-D depot backlog continues
primarily due to increased turnaround time and reduced throughput for
aircraft undergoing depot maintenance. The Marine Corps currently has
264 F/A-18s in its inventory, 132 of which are currently Out of
Reporting (OOR). Having 132 F/A-18's OOR increases operational risk and
creates significant challenges in managing the inventory. Each F/A-18
squadron requires 12 aircraft per squadron to maintain minimum
deployable combat readiness (C2). Of our 12 squadrons, 5 are deployed
at any given time. The reductions to depot throughput have resulted in
nondeployed squadrons having only 6 aircraft available for training and
operational support. The long-term effect on nondeployed marines F/A-18
squadrons is the inability of the unit to achieve and maintain minimum
deployable combat readiness required for follow-on deployments or
contingency response. Continued support for aviation depots, and F/A-
18A-D sustainment and upgrade initiatives are vital for achieving
aircraft flight line requirements, and ensuring the platform remains
lethal, survivable, and relevant through the transition to the F-35
Joint Strike Fighter (JSF).
The Marine Corps requires continued funding to complete the reset
of equipment still being utilized overseas, to reconstitute home
station equipment, and to modernize the force. Any reduction in the
fiscal year 2015 baseline request, as well as to the anticipated OCO
request, will defer maintenance requirements to out-years, thus
increasing the backlog of equipment requiring service. Sustained
funding reductions such as sequestration cause a ripple effect
eventually leading to a backlog that will adversely affect near- and
long-term readiness. Simply put, training a unit with only half of
their complement of equipment is not possible. When these units are
called on to prepare for deployment, they will begin with a training
deficit that may be insurmountable.
postured for steady state and crisis response
The Marine Corps has a strategic trajectory to reconstitute to a
ready force to meet the Defense Strategic Guidance for both steady
state requirements and crisis response contingencies. The fiscal year
2015 budget contains funding for the Special Purpose Marine Air Ground
Task Force--Crisis Response (SPMAGTF-CR) and Marine Corps Embassy
Security Group expansion that were added in the fiscal year 2014
Omnibus Appropriations Bill. These initiatives will leverage the Corps'
crisis response capability through lighter, more agile, forward-
deployed forces to meet combatant commander and Department of State
demands across the globe. Additionally the rebalance to the Pacific
remains a top priority as reflected by continued resourcing of the Unit
Deployment Program and operational units based in the Pacific region.
As we drawdown the Marine Corps' Active component end-strength from
a wartime high of 202,000 marines, we took the appropriate steps to
redesign a ready force by fiscal year 2017. Our reconstitution efforts
will restore and upgrade our combat capability and seek to ensure our
units are ready for operations across the range of military operations.
Over the past 3 years, we undertook a series of steps to build our
current force plan. In 2010, our Force Structure Review Group utilized
the Defense Strategic Guidance and operational plans to determine that
the optimum size of the Active component Marine Corps should be a force
of 186,800. However under the fiscal year 2012 Defense Strategic
Guidance and constraints of the 2011 Budget Control Act, we estimated
that a force of 182,100 Active component marines could still be
afforded, with the realization that reductions in modernization and
infrastructure support would be difficult but necessary to sustain
optimal readiness levels.
Prior to the Quadrennial Defense Review, we came to the difficult
understanding that, under the threat of continued sequestration or some
variant, an Active-Duty Force of 175,000 marines is what our Nation can
afford, when coupled with very steep cuts to USMC modernization and
infrastructure accounts. This significantly reduced force is a
``redesigned'' Marine Corps capable of meeting steady state
requirements. We will still be able to deter or defeat aggression in
one region, however with significant strain on the force and increased
risk to mission accomplishment everywhere else.
The redesigned force is built to operate utilizing the familiar
Marine Air-Ground Task Force construct, but it places a greater
emphasis on the ``middleweight'' Marine Expeditionary Brigades (MEB)
and their highly versatile and scalable MEB Command Element or
headquarters. These MEB headquarters will be prepared to serve as a
ready crisis response flag-level, JTF capable command element for the
Joint Force. The redesigned force will also persistently deploy
SPMAGTFs and Marine Expeditionary Units (MEU) to provide combatant
commanders ready forces for a broad range of missions.
Essential for augmenting and reinforcing our Active-Duty Force is
our Marine Corps Reserve. As an integral part of our Total Force, our
Reserve marines have, for the past 13 years, been engaged in combat
operations in Iraq and Afghanistan, as well as in regional security
cooperation and crisis prevention activities in support of geographic
combatant commander's requirements. This operational tempo built a
momentum among our Reserve warfighters and a depth of experience
throughout the ranks that is unprecedented in our current Reserve
Force.
Just as we are reshaping our Active Force, so too are we reducing
the end strength of our Reserve Force. Within the fiscal year 2015
budget we plan to achieve a Selected Reserve end strength of 38,500
marines by the end of fiscal year 2017, down from a current end
strength of 39,600. Despite this reduction in end strength, our
Reserves remain well postured to provide operational capability and
capacity to the Active Force during both peacetime steady-state
operations and crisis response contingencies.
Maintaining a high state of readiness within the current and near-
term fiscal climate will be challenging for marines and their
equipment. For example, the desired 186,800 force supported a 1:3
deployment-to-dwell ratio to meet emerging steady state demands. The
redesigned 175,000 force reduces our availability to a 1:2 dwell ratio
for our operational units. This 1:2 ratio is the same operational tempo
we operated under during much of the past decade, while engaged in
combat and stability operations in Iraq and Afghanistan. It is
supportable in the short-term and mid-term, but long-term
sustainability may need to be revisited.
The redesigned force will retain the ability to generate seven
rotational Marine Expeditionary Units, with one deployer from the east
coast, one deployer from the west coast, and one deployer from Okinawa.
Special Purpose Marine Air Ground Task Forces (MAGTF) will respond to
the greater demand for multi-role crisis response forces, as seen in
Libya and South Sudan. The Marine Corps also remains fully committed to
expanding embassy security by adding approximately 1,000 Marine Corps
Embassy Security Guards as requested by Congress.
Lastly, to support the rebalance to the Pacific, we prioritized our
Pacific theater forces activities in the new force structure. Despite
end strength reductions, III Marine Expeditionary Force--our primary
MAGTF in the Pacific--remains virtually unaltered. We also restored
Pacific efforts that were gapped during Operation Enduring Freedom,
including multiple exercises and large elements of the Unit Deployment
Program. A rotational presence in Darwin, Australia also expands
engagement opportunities and regional influence. By 2017 we will have
approximately 22,000 marines operating and forward postured within the
Pacific theater.
five readiness pillars
To achieve institutional readiness, sustain operational
requirements, and be prepared for crisis and contingency response, we
must restore and maintain a balance for our Marine Corps across five
pillars as outlined in previous posture statements and congressional
testimony, these remain:
High Quality People
Unit Readiness
Capacity and Capability to Meet Requirements
Infrastructure Sustainment
Equipment Modernization
High Quality People
The recruiting and retention of high quality people are essential
to maintaining a highly ready and professional force. We require the
right quantities and occupational specialties to fulfill our role as an
expeditionary force in readiness. Critical enablers of recruiting and
retaining a high quality force are appropriate levels of compensation
and benefits; we thank Congress for its focus on this very important
issue. We rely on Congress' continued support for pay and benefits,
incentive pays, and selective reenlistment bonuses to meet future
challenges and shape the All-Volunteer Force to meet emerging defense
strategies.
The Marine Corps is committed to attracting, mentoring, and
retaining the most talented men and women, who bring diverse
backgrounds, cultures, and skills in service to our Nation. The
Nation's changing demographics continue to push diversity to the
forefront as a strategic issue. The Marine Corps is working toward
completion of the first phase of a landmark diversity initiative
centered around four diversity task forces: (1) Leadership, Mentoring,
and Accountability; (2) Culture and Leading Change; (3) Race and
Ethnicity; and (4) Women in the Marine Corps. Recommendations from
these task forces will form the basis of a comprehensive strategy to
manage talent and enable the Marine Corps to improve diversity and
inclusion across the Corps.
Our civilian marines support the mission and daily functions of the
Marine Corps and are an integral part of our total force. They serve
alongside our marines in uniform all around the world. This workforce
is the leanest of all Services, with a ratio of 1 appropriated-funded
civilian to every 10 Active Duty marines (1:10). Additionally, our
civilian labor represents less than 5 percent of the Marine Corps'
total Operations and Maintenance (O&M) budget. More than 95 percent of
our civilians are located outside the Pentagon at our bases, stations,
depots, and installations. Civilian marines provide stability in our
training and programs when our marines rotate between units,
demonstrating that our ``best value'' for the defense dollar applies to
the total force. As we move forward we will continue to keep faith with
our All-Volunteer Force of Federal civilians.
The Marine Corps' Wounded Warrior Regiment (WWR) functions as a
central pillar of our pledge to ``keep faith'' with those who have
served. Whether a marine is wounded in combat, suffering from a chronic
unresolved illness, or injured in a training accident, the WWR remains
committed to providing comprehensive recovery care. For the Marine
Corps, recovery care is not a process. Instead it is the holistic
approach to the well-being entirety of our marines and their families.
Ultimately marines and their families, Congress, and the public at
large can be reassured that the Marine Corps, through the WWR, will
continue recovery care in times of war and relative peace.
Unit Readiness
This pillar upholds the importance of maintaining and shaping the
readiness of the operating forces, to include the necessary O&M funding
to train to core missions and maintain equipment. Our focus is on
training to our core expeditionary and amphibious mission capabilities,
while further restructuring unit and institutional training for
emerging security demands. Marine Expeditionary Force and MEB readiness
continues to improve with larger scale exercises focusing on honing
maneuver and amphibious capabilities not often utilized over the past
decade. We anticipate incremental increases in the core training
readiness of units as marines and equipment flows back from
Afghanistan. The availability and readiness of amphibious and Maritime
Prepositioning Ships and equipment are critical components in building
and maintaining readiness for expeditionary, amphibious operations. We
thank Congress for the continued support to funding the needed
amphibious and maritime prepositioning ships essential to protecting
our Nation's defense and economy.
The fiscal year 2015 budget continues to support the Marine Corps'
Service-level training program by fully funding an Integrated Training
Exercise (ITX) program designed to recover full spectrum readiness. The
ITX provides training for up to 10 infantry battalions, 5 artillery
battalions, 5 logistics battalions, 25 flying squadrons, and additional
aviation support elements. Additionally, high altitude and mountainous
terrain exercises at our training center in Bridgeport, CA, will train
up to 2 infantry battalions with limited flying squadrons and logistics
units, and typically will include joint, coalition, and Special
Operations Forces. Continued funding for Service level training is
imperative as we drawdown from Afghanistan and prepares the whole-of-
force for all manner of crisis and contingencies around the globe.
Capability and Capacity to Meet Requirements
Force-sizing to meet requirements, with the right mix of capacity
and capability, is the essence of this readiness pillar. The confluence
of the ``New Normal'' and possible sequestration-level funding,
challenged the Marine Corps to adopt its future force posture and
generate capabilities adaptable to a variety of operational
requirements. The USMC Future Force Posture Plan improves the forward
deployed Marine force posture and provides more flexibility in
employing the Amphibious Ready Group/Marine Expeditionary Unit for
geographic combatant commanders. Forward presence of marines ashore and
afloat reduces response times and enables the Marine Corps to better
shape the security environment for appropriate crisis response or
follow-on joint force operations. Furthermore, the Future Force Posture
Plan will provide reach-back capability for additional Marine Corps
continental United States-based Crisis Response forces, providing the
national leaders with a myriad of crisis response options, while
gaining efficiencies in meeting requirements. These future force
posture additive capabilities to meet ``New Normal'' missions will in
time improve the readiness and responsiveness of the Marine Corps.
The Marine Corps provides combatant commanders with regionally
focused and trained forces to meet their growing demand for theater
security cooperation engagements. However, this demand continues to
increase beyond the capacity of any single Service. The Navy is
uniquely capable of using the sea and waterways as maneuver space as
well as providing combatant commanders with persistent, self-
sustaining, sea-based forces to meet the full spectrum of security
cooperation requirements. The Navy and Marine Corps are executing a
coordinated and integrated approach as described in the recently signed
Maritime Security Cooperation Policy (MSCP). The MSCP will provide
combatant commanders with maritime-specific solutions to their TSC
objectives.
We have developed a cadre of officers and staff noncomissioned
officers (NCO) with a sophisticated understanding of international
security environments in order to facilitate engagements with partner
nations and assist the Marine Corps on the asymmetric battlefields of
the future. These marines support military operations with an expanding
number of coalition partners in a diverse set of geopolitical
conditions around the world. Our Foreign Area Officers and Staff NCOs
develop professional Language, Regional Expertise, and Cultural (LREC)
knowledge capabilities and insights to help MAGTF, joint, and coalition
commanders understand the complex human environment where marines
deploy. Today's operating environment demands a degree of LREC
capability that requires years, not weeks, of training and education,
as well as a greater understanding of the factors that drive social
change.
Our Corps' future forces will be guided by the principles outlined
in our Capstone Operating Concept: Expeditionary Force 21. This
document is our vision for designing and developing the force that will
continue to fulfill these responsibilities. It is however more than a
vision--it is also an actionable plan and a disciplined process to
shape and guide our capability and capacity decisions while respecting
our country's very real need to regain budgetary discipline. True to
our expeditionary ethos, we will work with a clear-eyed view of what
will be asked of us and seek only what we believe is necessary. Nimble
by organizational design and adaptive by culture, we will rely on open-
mindedness and creativity and make the best of what we have. Through
Expeditionary Force 21 we will chart a course over the next 10 years to
field a Marine Corps that will be the right force in the right place at
the right time.
Infrastructure Sustainment
Readiness also depends on the availability and condition of real
property and infrastructure. Adequately resourcing the sustainment of
Marine Corps bases and stations is essential to safeguarding unit
readiness as they provide the means by which units conduct training to
deploy. The need to be better stewards of our installations and
facilities grows as resources become more constrained. The Marine Corps
is depending on the fiscal year 2015 budget to preserve today's
facilities at a condition necessary to support those preparing for
upcoming missions and deployments as well as support their families.
The Marine Corps continues to accept risk in this pillar, reducing
funding for several programs that will affect long-term installation
readiness including military construction (MILCON) and restoration and
modernization projects. During fiscal year 2008 through fiscal year
2014, Congress generously provided the Marine Corps $11.4 billion in
military construction for new facilities to maintain state-of-the-art
aircraft, improved live-fire training ranges, armories, new applied and
academic instruction facilities, physical fitness facilities, child
care centers, barracks, and command and control buildings. We request
Congress' continued support in the protection of these investments and
those of facilities sustainment and demolition, family housing,
environmental management, energy conservation, and essential MILCON
funding to support critical programs, units, and institutions such as
infantry regiments, the JSF, MV-22, and Marine Corps Security Forces
Consolidation. The fiscal year 2015 budget baseline request supports
the Marine Corps investment to sustain facilities and allows us to
budget to 75 percent of the Office of the Secretary of Defense facility
sustainment model, returning to 90 percent in fiscal year 2016 through
fiscal year 2019.
Equipment Modernization
To bolster investments in personnel and unit readiness, the Marine
Corps has accepted the greatest amount of risk in its equipment
modernization budget. The Marine Corps' ground and aviation equipment
must meet the needs of current and emerging security environments. As
the Marine Corps explores options to adjust to changing fiscal
realities, there is a clear imperative to upgrade and modernize legacy
equipment used in OEF and Operation Iraqi Freedom. Aging ground
platforms, such as the nearly 40-year-old Amphibious Assault Vehicle
(AAV), underscore the need for investment in modernization and service-
life extensions to guarantee dominance over future threats. Aging
platforms are becoming simultaneously more expensive to operate and
harder to maintain.
Our modern expeditionary force will require fixed wing aircraft
capable of flexible basing ashore or at sea in support of our Marine
units. The JSF is the best aircraft to provide that support today and
well into the future. Likewise, a core capability of our expeditionary
forces is the ability to project forces ashore from amphibious
platforms and to maneuver once ashore.
The Expeditionary Fighting Vehicle (EFV) was envisioned as a ``leap
ahead'' replacement for our current AAV that would provide high speed,
long-range maneuver capability in both the seaward and landward
portions of the littoral. Three years ago, we cancelled the EFV program
to explore more affordable alternatives for an amphibious combat
vehicle (ACV). We established an Amphibious Capabilities Working Group
that examined current and emerging intelligence, surveillance, and
reconnaissance capabilities, strike capabilities, and their integration
into potential adversaries' approaches to anti-access, area denial. We
noted, with particular concern, the impact of future loitering top-
attack munitions and the proliferation of guided rockets, artillery,
missiles, and mortars.
From this threat assessment, we concluded that we would either need
to expand the scope and duration of our shaping operations, launch our
forces from greater range than the 10-25 nautical miles offshore
previously postulated, or apply some combination of these actions.
Next, as part of the Marine Personnel Carrier (MPC) program we examined
commercial off-the-shelf/non-developmental wheeled combat vehicles and
discovered several important points. First, modern wheeled vehicles
have substantially closed the maneuver performance gap that previously
existed between tracked and wheeled vehicles. These new eight wheeled
vehicles have exceptional cross country performance and some limited
swimming capability.
We concluded that our concepts for operational maneuver from the
sea and ship-to-objective maneuver remain valid, but that we will
execute them by evolving a somewhat different ``toolkit'' than
originally envisioned. The current ACV program has been re-crafted to
reflect a family of systems approach to the military problem--the
necessity to conduct amphibious operations from further offshore while
enhancing protected mobility for the mission on land. It leverages
experience gained in the EFV program, the MPC program, threat analysis,
and combat experience. The ACV program will immediately pursue a medium
weight wheeled armored personnel carrier with acceptable swimming
capability close to shore. Concurrently, risk over the midterm will be
mitigated through a survivability upgrade to a number of our current
self-deploying AAVs to extend their service life through at least 2030.
In concert with the Navy, we will continue to explore capabilities that
better enable us to conduct extended range littoral maneuver from ship
to objective via high speed surface connectors.
Informed by our planning for potential and resultant POM15 budget
decisions, we have the foundation to conservatively adjust our ground
combat and tactical vehicle strategy and yet enhance this core
competency across a wide array of capabilities. We will develop and
procure the Joint Light Tactical Vehicle, while maintaining critical
modification programs for our tank, LAV, and HMMWV fleets, in
conjunction with our assault amphibian modernization efforts. We will
continue to assess our ground vehicle portfolio in order to inform
forthcoming budgetary decisions.
partnered with the navy
We share a rich heritage and maintain a strong partnership with the
U.S. Navy. Sea-based and forward deployed naval forces provide day-to-
day engagement, crisis response, and assured access for the Joint Force
in a contingency. The availability of amphibious shipping is paramount
to our readiness. The Marine Corps' requirement for amphibious warships
continues to be at 38 platforms. However, due to fiscal realities the
Marine Corps and Navy agreed to a fiscally constrained minimum of 33
total amphibious warships to support two MEB assault echelons. The
Navy's inventory to date is 30 total warships. When accounting for
steady-state demand and maintenance requirements we are realizing that
far fewer platforms are readily available for employment. In the near
term, the Navy and Marine Corps are looking at alternative platforms
that can complement the current amphibious inventory.
Partnered with the Navy, we will continue to pursue innovative
concepts for maritime expeditionary operations with platforms such as
the Joint High Speed Vessel, the Mobile Landing Platform, and the
Afloat Forward Staging Base. As new maritime prepositioning force ships
are integrated into the Maritime Prepositioning Ships Squadrons, they
will provide additional operational benefits to the combatant
commanders, such as an over-the-horizon surface connector capability
and better selective access to equipment and supplies.
A critical component in building, training, and maintaining an
expeditionary forward presence is the availability and readiness of
amphibious ships. The combat readiness of our amphibious ships is a
foundational requirement for expeditionary force presence, and when
required, amphibious force projection. The Navy has acknowledged that
low amphibious ship availability and readiness can present a
significant challenge to the training readiness of our Naval
Expeditionary Forces and is addressing maintenance readiness
shortfalls. Since 2010, the average deployment length for a West Coast
and East Coast Amphibious Ready Group/Marine Expeditionary Unit has
been 223 days and 274 days respectively. This high duration of
deployment lengths combined with a high operational tempo, reduced ship
inventory, and deferred/compressed maintenance periods demonstrate the
imperative to maintain planned/scheduled maintenance cycles and to
build adequate inventory. These have a direct impact on the readiness
of the amphibious fleet and on ensuring the ships reach their service
life.
An example of the importance of ship maintenance and availability
occurred during disaster relief efforts in the Philippines in the wake
of Typhoon Haiyan. Although two forward deployed amphibious ships were
able to provide some assistance to Operation Damayn, the larger and
more capable amphibious ships could not leave port due to maintenance;
restricting the amount of supplies and relief that the MEU could
provide.
Continued congressional support for the Navy's shipbuilding and
surface ship-to-shore connector plans is vital to the Nation's ability
to retain and maintain an adequate fleet of modern combat-ready
amphibious ships, which can provide continuous naval expeditionary
presence and project power across the globe whenever and wherever
needed. In September 2013, the Commandant of the Marine Corps, Chief of
Naval Operations, and Commandant of the Coast Guard signed the Maritime
Security Cooperation Policy. This tri-service policy prescribes a
planning framework for Marine Corps, Navy, and Coast Guard
headquarters, regional components, and force providers with the goal of
providing combatant commanders an integrated maritime approach to
security cooperation in support of national security objectives.
Throughout more than a decade of sustained operations ashore in
Iraq, Afghanistan, and elsewhere, we continued to deploy thousands of
marines aboard amphibious warships around the globe. The Navy and
Marine Corps remains postured to provide persistent presence and
engagement, maintaining a constant watch for conflict and regional
unrest. The Navy-Marine Corps relationship has never been better; we
will continue to advance our shared vision as our Nation transitions
from protracted wars ashore and returns its focus to the maritime
domain.
conclusion
On behalf of the Marine Corps and sailors who provide this Nation
with its versatile, reliable, middleweight force in readiness, I thank
Congress for your constant interest in and recognition of our
challenges. We are proud of our reputation for frugality and remain one
of the best values for the defense dollar. In these times of budget
austerity, the Nation continues to hold high expectations of its Marine
Corps, and our stewardship of taxpayer dollars. The Marine Corps will
continue to meet the needs of the combatant commanders as a
strategically mobile force optimized for forward-presence, and crisis
response. Your continued support is requested to provide a balance
across the five readiness pillars, so we can maintain our institutional
readiness and, as you charged more than 60 years ago, ``be most ready
when our Nation is least ready.''
Senator Shaheen. Thanks very much. We will certainly
include the full statement for the record.
General Spencer.
STATEMENT OF GEN. LARRY O. SPENCER, USAF, VICE CHIEF OF STAFF,
U.S. AIR FORCE
General Spencer. Madam Chairwoman, Ranking Member Ayotte,
thank you for the opportunity to share the Air Force's current
readiness posture.
Readiness is critical for your Air Force. The Air Force's
range, speed, and agility enable us to quickly respond to
national missions, and gives our Nation an indispensable
advantage that we must retain as we plan for an uncertain
future. Whether responding to a national security threat or
humanitarian crisis, your Air Force is expected to respond in
hours, not days, from home to anywhere in the globe.
The cornerstone of our success depends on airmen who are
highly-trained, well-equipped, and always ready to defeat any
adversary across the range of operations, from the present day
counterinsurgency environment to a highly contested one.
Decades of sustained combat operations have stressed our force
and decreased our readiness to unacceptable levels. Our airmen
have performed exceptionally well in the counterinsurgency and
counterterrorism fights in the U.S. Central Command (CENTCOM)
area of responsibility, as have all our other joint and
coalition partners. However, our focus on the current fight has
seriously impacted our readiness to effectively operate in
contested environments and against potential adversaries that
have access to ever-increasing levels of advanced warfighting
technology. We will continue to maintain our ability to respond
to today's requirements, but we must also regain and maintain
our ability to effectively operate in the most demanding threat
environments.
The bottom line is that, from a readiness perspective, we
know we are not where we need to be, but our fiscal year 2015
President's budget submission sets the conditions that enable
us to begin the road to recovery in the years ahead. But, we
will need your help to get there.
The Air Force defines ``readiness'' as the ability, at the
squadron level, to provide distinct operational capabilities
within the required timeframe. This means we need to have the
right number of airmen, with the right equipment, trained to
the right skill level, and with the right amount of support,
force structure, weapons, and supplies to successfully
accomplish what the Nation asks us to do. A good readiness plan
depends on an optimum level of health in all of these areas
while also balancing time between critical operational and
training commitments.
Sequestration has cut the Air Force budget by billions of
dollars, so our only option is to reduce our force structure.
We cannot retain more force structure than we can afford to
keep ready. As such, readiness requires more than just flying
hours and exercises. Our plan involves preferred munitions,
developing training environments, both open-air ranges and
virtual simulated environments that accurately replicate the
threats we may face, and modernization efforts that help us
maintain our technological advantage in war. Readiness also
includes facilities and installation support, because, whether
it's Whiteman Air Force Base in Missouri, home of our B-2
fleet, or Kunsan Airbase in Korea, home of the Fighting
Wolfpack, in many cases we literally fight and power-project
from our assigned bases.
Weapon sustainment health is also critical to our readiness
plan. For example, as a former vice director of the Oklahoma
City Air Logistics Center at Tinker Air Force Base, I was able
to see firsthand how our major logistics complexes contribute
to the sustainment and readiness of aircraft such as our B-1,
B-2, B-52, E-3 AWACS, and KC-135, as well as repair and
management of 19 different types of aircraft and missile
engines. Said another way, while adequate flying-hour funding
ensures the aircraft on the ramp are ready to fly, weapon-
system sustainment funding ensures we have adequate numbers of
aircraft on the ramps. Keeping aircraft in the air, satellites
in space, and protecting our network systems require a team
effort and is a synergy of critical skills, tools, and
capabilities that culminate in the ability to deliver combat
power for the Nation.
To be clear, last year's sequestration trigger placed the
Air Force readiness posture at an unacceptable level of risk
that we are still working to recover from. The abrupt and
arbitrary cuts caused the Air Force to stand down 31 Active
component squadrons, 13 of which were combat-coded. Today, less
than 50 percent of those combat squadrons that were stood down
have returned to their pre-sequestration levels of readiness,
which, again, were already less than required. The loss of time
and experience flying, maintaining, supporting, and integrating
those aircraft equated to a loss of critical readiness for our
airmen across our operations, maintenance, logistics, and
support force. If we miss training opportunities or our
squadrons are forced to stand down, it may take months, or even
years, to regenerate that global combat power, and we negate
the responsiveness that is one of air power's inherent
advantages. We desperately need your help to detrigger
sequestration going forward.
Guiding our strategy and budget process were the Air
Force's unique capabilities and the requirements to gain and
maintain readiness for the full spectrum of operations. We
describe full-spectrum operations as operations that span the
range of low-intensity conflict to major regional conflicts
against near-peer adversaries. We appreciate the temporary
relief the Bipartisan Budget Act provides. It puts us on a
gradual path to recovery. But, our analysis indicates it will
not fix the Air Force's readiness during the Future Years
Defense Program (FYDP). Air Force readiness is heavily
influenced by ongoing operations as time and resources are
consumed in supporting current operations, limiting
opportunities to train to the full spectrum of potential
operations.
As demonstrated recently after the conclusion of major
combat operations in Iraq, there will continue to be a high
demand for Air Force capabilities, even in the wake of post-
combat drawdowns of deployed ground forces. If we are not able
to train for the scenarios across the full range of military
operations and continue with critical modernization efforts, we
face unacceptable risk to mission accomplishment and to our
Joint Forces.
To conclude, Madam Chairwoman, today's Air Force provides
America an indispensable hedge against the challenges of an
uncertain future. Properly trained and equipped, your Air Force
can set the conditions for success in any conflict in any
region of the world whenever we're called upon. Sequestration
and the demands of sustained combat operations have decreased
our ability to train across the full spectrum of operations. We
have a plan to slowly fix our readiness, but we need your help
to make sure we can get there. With your support, we can make
the right cuts and provide our airmen with the resources they
need to prepare and to respond when called upon.
Thank you. I look forward to your questions.
[The prepared statement of General Spencer follows:]
Prepared Statement by Gen. Larry O. Spencer, USAF
introduction
America's airmen and Air Force capabilities play a foundational
role in how our military fights and wins wars. The Air Force's agile
response to national missions gives our Nation an indispensable
advantage that we must retain as we plan for an uncertain future.
Whether responding to a national security threat or humanitarian
crisis, your Air Force provides the responsive global capabilities
necessary for the joint force to operate successfully. As our world
becomes more interconnected and networked, Air Force capabilities that
allow Americans to see, reach, and affect a situation anywhere on the
globe within a matter of hours will become even more critical. However,
the current fiscal environment requires the Air Force to make choices
that place readiness into direct competition with modernization. To
best support the national defense requirements, we chose to preserve
the minimum capabilities necessary to sustain current warfighting
efforts while investing in capabilities needed to ensure we stay viable
in a contested battlespace. Moving forward, we aim to maintain a force
ready for the full range of military operations while building an Air
Force capable of executing our five core missions of: (1) air and space
superiority; (2) intelligence, surveillance, and reconnaissance; (3)
rapid global mobility; (4) global strike; and (5) command and control
against a high-end threat in 2023 and beyond.
To prepare for the high-end fight, we need to maintain a ready
force by focusing on the training required to win against a well-
trained, technologically-advanced adversary. In the past, we have
revolutionized warfighting by focusing on technology that produces
game-changing capabilities for the joint force, such as stealth, Global
Positioning System, and remotely piloted aircraft. These technologies,
along with research, development, and test, ensured the Nation's
strategic and asymmetric advantage. The Air Force has always had to
balance between what we can do (capability), how much we have to do it
with (capacity), and how well trained and responsive we need to be
(readiness). To do this, we must be ready across the Total Force. We
will continue to be committed to a Total Force that fully leverages the
strengths of each component. Ultimately, this means we need to have the
right number of airmen, with the right equipment, trained to the right
level, and with the right amount of support and resources to accomplish
what the President tasks us to do and survive.
Over the past 10 years, our airmen have performed exceptionally
well during major combat operations in Iraq, Afghanistan, and in other
conflicts across the globe. However, these operations tend to focus on
missions conducted in a permissive air environment, which left
insufficient time and resources to train our airmen across the full
range of Air Force missions, especially missions conducted in highly
contested, non-permissive environments. While the decline in full-
spectrum readiness started before sequestration, it has been
exacerbated since the law took effect because of the loss of large
force exercises (e.g., Red Flag, Green Flag, etc.) and the cancellation
of advanced mission training opportunities, especially on our military
ranges. To ensure success in the future, we must get back to full-
spectrum readiness by funding critical readiness programs such as
flying hours and weapons system sustainment, while also balancing
deployment tempo and home-station training. This is not going to be a
quick fix and it will take us years to recover. If we are not able to
train for scenarios across the full range of military operations, we
may not get there in time and it may take the joint team longer to win.
readiness
The Air Force delivers global vigilance, global reach, and global
power for America through our five core missions. By integrating
capabilities across these core missions, we bring a unique set of
options to deter war, deliver rapid, life-saving responses to
threatened areas anywhere on the planet, and strike precisely wherever
and whenever the national interest demands. The cornerstone of our
ability to provide airpower to the Nation and contribute our core
missions to the joint team lies in our readiness. Readiness ensures our
military can provide the President with a range of options to deter or
defeat aggression against our Nation, allies, and our collective
interests. To support the 2012 Defense Strategic Guidance, as updated
during deliberations on the 2014 Quadrennial Defense Review, the Air
Force must always be prepared to respond anywhere in the world. The Air
Force defines readiness as the ability at the unit level to provide
distinct operational capabilities within a specified timeframe. It
encompasses personnel requirements, training, flying hours, weapons
system sustainment, facilities, and installation support. A responsive
readiness posture depends on high levels of health in all these areas.
Because protecting future readiness includes modernizing weapons system
and their associated equipment, creating combat readiness in the near-
term is a complex task involving the intersection of personnel,
materiel, and training. This also includes balancing time between
operational and training commitments, executing funding from multiple
sources, informed level of risk, and effectively managing resources to
achieve the desired state of readiness.
Due to end strength and force structure changes, we had to mitigate
the risk associated with a smaller military which requires a more ready
combat force. If we want to sustain current force levels while
personnel and operational costs continue to rise, there will be fewer
resources available to support our installations, maintain current
aircraft fleets, and invest in future capabilities. Combatant
commanders require Air Force support on a 24/7 basis. Many of our
mission sets are high priority missions that cannot be accomplished
adequately or safely at low readiness levels as suggested by a tiered
readiness construct. In support of our national defense strategy,
airmen must be able to quickly respond across the full-spectrum of
operations and shift between theaters of operation. Slipping to a lower
state of readiness that requires a long build up to full combat
effectiveness negates the essential strategic advantages of airpower
and puts joint forces at increased risk.
The President's budget reflects our effort to develop and retain
the capabilities our Nation expects of its Air Force within the
constraints placed upon us. Maintaining the fiscal year 2015
President's budget top line level of funding will provide us with the
flexibility to make strategic resourcing choices to maximize combat
capability from each taxpayer dollar. If we maintain funding at this
level, we can continue a gradual path of readiness recovery while
preserving our future readiness, including munitions inventories,
protecting our top three acquisitions programs, and protecting
investments, such as the new training aircraft system and the next
generation of space systems. The fiscal year 2015 President's budget
includes an Opportunity, Growth, and Security initiative that will help
us reduce risk in high-priority areas, including our readiness posture
by accelerating the modernization of our aging fleets and improving our
installations around the country. Guiding our strategy and budget
process were the requirements that we must remain ready for the full
range of operations and to focus on the unique capabilities the Air
Force provides the joint force against a full-spectrum, high-end threat
now and in the future.
Weapons System Sustainment
Weapons system sustainment (WSS) is a key component of full-
spectrum readiness. Years of combat demands have taken a toll across
many weapons systems, and we continue to see an increase in the costs
of WSS requirements, which are driven by sustainment strategy,
complexity of new systems, operations tempo, force structure changes,
and growth in depot work packages for legacy aircraft. With recent
force structure reductions, we must carefully manage how we allocate
WSS in order to avoid availability shortfalls. Per the Office of the
Secretary of Defense's directive, we plan to fund WSS to 80 percent of
the requirement in fiscal year 2015. This facilitates recovery of $260
million of unaccomplished depot maintenance in fiscal year 2013. If
sequestration continues, it will further hamper our efforts to improve
WSS. Depot delays will result in the grounding of some affected
aircraft. The deferments mean idle production shops, a degradation of
workforce proficiency and productivity, and corresponding future
volatility and operational costs. Analysis shows it can take up to 3
years to recover full restoration of depot workforce productivity and
proficiency. Historically, WSS funding requirements for combat-ready
forces increase at a rate double that of inflation planning factors.
Although service-life extension programs and periodic modification have
allowed our inventory to support 22 years of enabled operations, the
cost of maintenance and sustainment continues to rise. WSS costs still
outpace inflationary growth, and in the current fiscal environment, our
efforts to restore weapons systems to required levels will be a major
challenge. To illustrate the challenges we have with our legacy
aircraft, we can compare our older aircraft to an older car. When you
first buy a new car, maintenance costs are relatively low, especially
if the car is covered with a warranty. However, as the car ages,
maintenance costs rise as more and more components begin to break or
you need to do more preventive maintenance. The same holds true for our
aircraft. The longer we fly our legacy aircraft, the more they will
break and require increased preventative maintenance just like an old
car. We are now nearing a point where it costs more to sustain our
aircraft than it does to replace them. We have tankers that are on
average 52 years old, bombers that are upwards of 30 years old, and
fourth generation fighters that are an average of 25 years old. If we
are not able to perform weapons system sustainment on our aircraft or
modernize them so we can improve upon their speed, range, and
survivability, we risk our technological edge and superiority.
Flying Hour Program and Training Resources
The emphasis on readiness in the Defense Strategic Guidance
reinforced the Air Force focus on the importance of maintaining our
flying hour program as part of our full-spectrum readiness. Just as
with WSS, if sequestration funding levels continue, it will affect our
ability to improve flying and training readiness. The flying hour
program will continue to rely on Overseas Contingency Operations
funding to support Operation Enduring Freedom, aircraft in the U.S.
Central Command area of responsibility, and the redeployment of forces
from Afghanistan. In addition to funding, readiness is influenced by
ongoing operations as time and resources used in supporting current
operations limit our opportunities to train across the full-spectrum of
potential mission sets. For example, the operational and combat demands
over the last decade have eroded our ability to train for missions
involving anti-access/area denial scenarios. To meet combatant
commander requirements, we have had to increase our deployment lengths,
which in turn challenges our reconstitution and training cycles when
our airmen return from a deployment. Because there will continue to be
a high demand for Air Force capabilities in future operations,
balancing these rotational and expeditionary requirements with the
full-spectrum training required to meet the Defense Strategic Guidance
will be a critical element of our strategy in the future.
The fiscal year 2015 President's budget increases flying hours in
the operation and maintenance accounts which will allow the Air Force
to fly at levels needed to begin improving readiness. The additional
funding will help us recover flying hour-related readiness due to the
fiscal year 2013 sequester and reduced flying in the first 3 months of
fiscal year 2014 in order to produce a small readiness increase in
fiscal year 2014 and fiscal year 2015. The fiscal year 2015 President's
budget request supports adding additional hours to the flying hour
program in fiscal year 2016-fiscal year 2019 to return the program back
to the full requirement as much as possible to meet the minimum
training requirements.
To complement full-spectrum training, the Air Force remains
committed to the long-term effort to increase our live, virtual, and
constructive operational training capability and capacity by funding
improvements in these types of training devices and networks.
Adjustments to the flying hour program will continue to evolve as the
fidelity of our devices and simulators improve. Increasing our virtual
capabilities will minimize fuel consumption and aircraft maintenance
costs while ensuring high quality training for our aircrews.
Full-spectrum training also includes the availability and
sustainability of air-to-air and air-to-ground training ranges. Many of
our ranges are venues for large-scale joint and coalition training
events and are critical enablers for concepts like Air-Sea Battle. We
intend to sustain these critical national assets to elevate flying
training effectiveness for the joint team which will in turn improve
individual and unit readiness. The same holds true for our munitions.
The fiscal year 2015 President's budget includes funding that addresses
the shortfalls in our critical munitions programs and realigns funds in
order to accelerate production and reduce unit cost. These investments
also support and maintain our industrial base so we are able to train
the way we intend to fight.
conclusion
The Air Force will continue to serve America's long-term security
interests by giving our Nation unmatched options against the challenges
of an unpredictable future. Your American airmen are proud of the
critical role they play in our Nation's defense. We hire the best
people we can find and we train them better than any other airmen in
the world. My job is to ensure that whenever America calls, our airmen
are ready and capable of fighting and winning our Nation's wars.
Through detailed planning, we aim to improve our near-term readiness
while continuing to build the force so it is ready for the full range
of combat operations against a high-end threat in 2023 and beyond.
The Air Force is a vital element of the best military in the world.
When we are called, we answer, and we win. That is what we do. In the
last several decades, Air Force airpower has been an indispensable
element of deterrence, controlled escalation, and when tasked by the
Nation's senior leadership, destruction of an adversary's military
capability--all accomplished with minimal casualties to U.S.
servicemembers. However, investments in Air Force capabilities and
readiness remain essential to ensuring that the Nation will maintain an
agile, flexible, and ready force. This force must be deliberately
planned and consistently funded in order to be successful. Today's Air
Force provides America an indispensable hedge against the challenges of
a dangerous and uncertain future, providing viable foreign policy
options without requiring a large military commitment on foreign soil.
Regardless of the future security environment, the Air Force must
retain and maintain its unique ability to provide America with Global
Vigilance, Global Reach, and Global Power.
Senator Shaheen. Thank you.
Vice Admiral Cullom.
STATEMENT OF VADM PHILIP H. CULLOM, USN, DEPUTY CHIEF OF NAVAL
OPERATIONS, FLEET READINESS AND LOGISTICS, U.S. NAVY
Admiral Cullom. Chairwoman Shaheen, Ranking Member Ayotte,
first let me express Admiral Ferguson's appreciation for your
invitation to testify, and pass on his regrets that he was
unable to attend. I appreciate the opportunity to be with you
today to discuss the readiness of our Navy. I'm grateful for
the chance to be at the table with these distinguished leaders
of our Joint Force.
It's my special honor and privilege to represent the
633,000 men and women of the Navy, sailors and civilians, who
deliver a ready Navy every day.
In recent testimony, the CNO and Commandant of the Marine
Corps both emphasized that the most important thing the Navy/
Marine Corps team does for the Nation is to deliver ready,
forward presence. In fiscal year 2013, the Navy worked hard to
preserve readiness during the extended Continuing Resolution
and budget sequestration. This year, we have given priority to
readiness again in how we apply the funding you provided above
the sequestration level. The Navy continues to deliver ready,
certified forces forward, and we will not compromise on that.
It is a fundamental element of our responsibility to our
sailors and their families, and to the combatant commanders.
With the budget you've provided for this year, fiscal year
2014, we're meeting our forward-presence commitment to the
combatant commanders, we are able to execute the depot
maintenance plan for our ships and aircraft, and we have
restored our normal training and readiness progression within
the fleet.
Our maintenance plan continues to execute the reset of
surface ship material condition after a decade of high-tempo
operations, but, because of the need to drydock ships for much
of this work, it must continue for at least 5 more years. To do
all of these things, we accepted increased risk in two of the
mission areas of the DSG due to slowed modernization and
restricted ordnance procurement. We also continue a significant
level of risk to the long-term viability of our shore
infrastructure.
The Navy budget submission for fiscal year 2015 continues
our commitment to the readiness of the force, but also
continues to carry forward the risks I mentioned. To sustain
readiness at this level, we have proposed a phased
modernization plan for 11 Ticonderoga-class cruisers and 3
Whidbey Island-class dock landing ships. This plan ensures the
availability of 11 modernized cruisers through the 2030s, when
they would otherwise be past their service life and require
replacement, all at a time of expected ship construction
funding limitations while building the Ohio-class replacement
strategic deterrence submarines. While we accept some capacity
risk in the near-term, without this approach we face even
greater challenges to sustain the readiness of the fleet as a
whole.
Despite the DSG mission risk and challenges to near-term
capacity, the President's budget provides a way forward to a
ready and capable Navy in 2020. If we must return to
sequestration levels in fiscal year 2016 and beyond, we will
continue to strive to have a ready Navy, but it would require
us to become smaller and less capable. Our soldiers, sailors,
airmen, and marines are the finest we have ever had, and they
go into harm's way every day. Each of us at the table has led
them in forward operations. Navy leadership greatly appreciates
the work of the members of this subcommittee to support our
sailors. We must ensure that we continue to provide them the
right training and capable equipment to meet the challenges
they face today and will face in the future.
I look forward to your questions.
Thank you.
[The prepared statement of Admiral Cullom follows:]
Prepared Statement by VADM Philip H. Cullom, USN
Chairwoman Shaheen, Senator Ayotte, and distinguished members of
the Senate Armed Services Subcommittee on Readiness and Management
Support, I appreciate the opportunity to testify on the current state
of Navy readiness and the resources necessary to provide a ready Navy
in the future as described in our fiscal year 2015 budget request.
Through the uncertainty of the past two years, our decisions continue
to be guided by the three tenets Chief of Naval Operations (CNO)
established when he first took office: Warfighting First, Operate
Forward, and Be Ready. You will see that theme in deeds throughout my
testimony.
Over the past 2 years, sequestration reductions and continuing
resolutions have challenged our ability to operate most efficiently and
to fully deliver the capabilities and readiness required to support the
2012 Defense Strategic Guidance (DSG). However, we have appreciated the
actions of Congress to help rebuild readiness and extend our planning
horizon by supporting increases over sequestration funding levels
through fiscal year 2015 in the Bipartisan Budget Act of 2013 and the
fiscal year 2014 Consolidated Appropriations Act. In applying these
additional funds, Navy has prioritized near- to mid-term readiness. The
fiscal year 2015 Navy budget submission reduces risk in some primary
DSG missions when compared to a sequestration-level scenario, but it
accepts greater risk as compared to 2014 President's budget levels. In
addressing this shortfall, it is important that we make balanced
choices between capability and capacity, cost and risk, across a wide
range of competing priorities. We must balance current and future
readiness to continue to deliver a ready Navy, now and in the future.
My testimony today will focus on the current readiness of the force
and the related strategic risk, force structure management, and the
resource requirements to sustain a ready Navy.
our navy today
At present, 104 ships (36 percent of the Navy) are deployed around
the globe protecting the Nation's interests, including 2 Carrier Strike
Groups and 3 Amphibious Ready Groups with their embarked Marine
Expeditionary Units. We continue our efforts to reassure allies and
strengthen partnerships, with particular emphasis in the Asia-Pacific
region, by leading or participating in more than 170 exercises and 600
training events annually with more than 20 allies and partners in the
Pacific and Indian Oceans. The bilateral Talisman Saber 2013 exercise
featured 10 Royal Australian Navy ships and 14 U.S. Navy ships
including the USS George Washington (CVN 73) Strike Group, the USS
Bonhomme Richard (LHD 6) Amphibious Ready Group, and about 28,000
people. Navy units also played key roles in the multi-national, multi
nongovernment agency effort for Operation Damayan, supporting the
typhoon recovery operations in the Philippines, underscoring yet again
the importance of being ``where it matters, when it matters.'' We are
now preparing for the biennial Rim of the Pacific 2014 exercise this
summer. It will be the largest in its 43 year history, with
participation from 23 nations, including for the first time, the
Chinese People's Liberation Army (Navy).
All Navy units continue to deploy independently certified as
qualified in their required mission areas and capabilities. This will
not change. However, budget uncertainties plague total force readiness.
In fiscal year 2013, we were left with no choice but to curtail or
delay some deployments and our capacity to respond to contingencies was
reduced as training for non-deployed forces was slowed. Additional
funding appropriated by Congress above the sequestration level enabled
the Navy to contribute increased resources to readiness accounts. A
normal training and deployment cycle for ships and air squadrons is
being restored, and additional funding is available for post-deployment
units to improve contingency response capacity. With limited resources,
funding current readiness at the expense of other accounts slows
platform modernization and restricts weapons procurement, and erodes
shore infrastructure.
Additionally, we ended fiscal year 2013 with a significant aviation
depot backlog for the first time in quite a few years (16 airframes and
55 engines). Overtime restrictions and hiring freezes impacted
productivity in both public shipyards and aviation depots. With
workload increases we were already seeing from the growth in
maintenance requirements driven by high operational tempo over the last
several years, costs and maintenance periods increased, resulting in
operational impacts across the Fleet and increased schedule uncertainty
for our sailors and their families.
readiness risk
In his written statement for the full committee hearing on the
fiscal year 2015 Department of the Navy Posture, the CNO addresses in
detail the current and projected level of strategic risk in terms of
the 10 missions of the DSG. Today, I would like to highlight three
areas of readiness-specific risk for consideration:
Balance between readiness funding and force structure,
both current and future. The fiscal year 2015 Navy budget
submission, with anticipated Overseas Contingency Operations
(OCO) funding, provides the operations and maintenance funding
necessary to maintain, train, and operate the proposed
operational Fleet structure and sustain required levels of
readiness. The Navy proposed a phased modernization for 11
Ticonderoga-class cruisers that will add 137 operational ``ship
years'' with fully modernized and relevant ships. A similar
plan is proposed for three Whidbey Island-class LSDs requiring
modernization. We would prefer to maintain routine deployments
with these ships and continue a normal modernization schedule,
but without the associated readiness funding this will create
an imbalance, negatively impacting readiness across the Fleet.
Return to sequestration-level funding in fiscal year
2016 and beyond. Additional force structure adjustments, most
notably inactivation of one nuclear aircraft carrier and one
carrier air wing, would be required to fund adequate readiness
of the remaining force structure if sequestration funding
levels were our fate across the remainder of the Future Years
Defense Program (FYDP). This would result in a smaller and less
capable Navy with insufficient capability and capacity to
execute at least 4 of the 10 primary DSG mission areas.
Continuing to address this challenge on an annual basis without
a realistic FYDP planning horizon sub-optimizes decision-
making, impacts future readiness and safety, risks long-term
gaps in the professional development of our personnel, and
ultimately increases cost.
Continued leverage of OCO funding for readiness. Navy
readiness accounts remain leveraged in OCO as in previous
years, representing future risk to readiness, modernization,
and force structure. Additionally, while surface ship
maintenance reset is appropriately funded with OCO, it will
require continued funding across the FYDP because some work
requires a dry-dock maintenance availability with intervals
that average eight years. I also note that the Department of
Defense's final fiscal year 2015 OCO request will depend on
policy decisions about our enduring presence in Afghanistan
that have not yet been made.
our navy tomorrow
The Navy fiscal year 2015 budget request continues the near- to
mid-term readiness of the Fleet, but risks future readiness from slowed
modernization, restricted weapons procurement, and limited shore
infrastructure sustainment. With continued OCO funding, the budget
request will meet the adjudicated requirements of the fiscal year 2015
Global Force Management Allocation Plan (GFMAP), including at least two
Carrier Strike Groups (CSGs) and two Amphibious Ready Groups (ARGs),
operating forward, fully mission-capable, and certified for deployment.
Compared to a program at the revised BCA caps (e.g., the sequestration
level), the 2015 President's budget improves our ability to conduct the
10 primary missions of the DSG but with increased risk in at least 2
primary mission areas compared to the 2014 President's budget. We
continue to expand forward presence and relieve stress on the rest of
the force through traditional and innovative approaches, including the
use of new platforms like Joint High Speed Vessel and Mobile Landing
Platform, to ensure the Navy/Marine Corps team is where it matters,
when it matters, to achieve the security interests of the Nation.
Maximizing our presence overseas also requires us to maximize
operational efficiencies. Our fiscal year 2015 request includes
investments in energy efficiency that provide our forces with
endurance, range, and flexibility while on station, which results in
our Navy's persistent, distributed presence in theaters of enormous
distance like the Pacific.
Generating the Force
Navy manages force generation using the Fleet Response Plan. This
cyclic process is designed to synchronize periodic deep maintenance and
modernization necessary to the readiness and training of the Fleet to
achieve GFMAP forward presence objectives and provide contingency
response capacity. The reality of the past decade has been the
continuing employment of our contingency response capacity to generate
increased presence, while driving up maintenance requirements and in
turn squeezing the time available to complete required maintenance and
training. In testimony over the last several years, we have described
this practice as unsustainable. In fiscal year 2015, Navy will begin
implementation of the Optimized Fleet Response Plan (O-FRP) to address
these challenges. Designed to stabilize maintenance schedules and
provide sufficient time to maintain and train the force while
continuing to meet operational commitments, O-FRP also aligns
supporting processes and resources to improve readiness outcomes. In
addition, it provides a more predictable schedule for our sailors and
their families.
Ship Operations
The baseline Ship Operations request for fiscal year 2015 provides
for 45 underway operational tempo days per quarter deployed and 20 days
non-deployed, and would support the highest priority presence
requirements of the combatant commanders, including 2.0 global presence
for CSGs, 2.0 ARGs and an acceptable number of deployed submarines.
Navy's OCO request will provide a level of funding that meets the full
adjudicated fiscal year 2015 GFMAP ship presence requirement, higher
operational tempo for deployed forces, and sufficient operating funding
for organizational (individual ship) level maintenance and training.
Air Operations (Flying Hour Program)
The Flying Hour Program funds operations, intermediate and unit-
level maintenance, and training for 10 Navy carrier air wings, 3 Marine
Corps air wings, Fleet Air Support aircraft, training squadrons,
Reserve Forces and various enabling activities. The fiscal year 2015
baseline program provides funding to maintain required levels of
readiness for deployment or surge operations, enabling the Navy and
Marine Corps aviation forces to perform their primary missions by
funding the average T-2.5/T-2.0 USN/USMC training readiness requirement
in the base budget. OCO funding will be requested for higher deployed
operating tempo.
Fleet Training, Training Ranges, and Targets
We are sustaining investments in key training capabilities,
including Fleet Synthetic Training, Threat Simulation Systems, and the
Tactical Combat Training System as well as improving training
capabilities for our surface force sailors. Our request continues
procurement of high speed, maneuverable surface targets to emulate the
anti-access fast assault craft threat, and continues development of the
next generation of aerial targets.
Physical and electronic encroachment on our Navy ranges, operating
areas, and special use air space continue to impact our ability to
conduct training, testing, and evaluation activities. Our fiscal year
2015 budget request continues to mitigate challenges presented by
traditional and emergent encroachment, such as urban expansion,
electromagnetic spectrum and frequency loss, ocean observing systems
deployment, and foreign investment proximate to our installations and
ranges.
Readiness Investments Required to Sustain the Force--Ship and Aircraft
Maintenance
The Navy maintenance budget requests are built upon our proven
sustainment models, continue our ongoing investment in improved
material readiness of our surface combatants, and move forward the
integration of new capabilities into naval aviation.
The fiscal year 2015 budget request funds 80 percent of the ship
maintenance across the force, supporting both depot and intermediate
level maintenance for carriers, submarines, and surface ships. OCO
funding will be requested to execute the full requirement, including
continued reduction of the backlog of maintenance in our surface ships
resulting from the recent years of high operational tempo and deferred
maintenance. The request also funds 80 percent of our aviation depot
maintenance requirement, and supports the transition to new electronic
attack, helicopter, and maritime patrol aircraft.
Navy Expeditionary Combat Forces
Navy expeditionary combat forces support ongoing combat operations
and enduring combatant commander requirements by deploying maritime
security, construction, explosive ordnance disposal, logistics, and
intelligence units to execute missions across the full spectrum of
naval, joint, and combined operations. Our baseline funding request in
fiscal year 2015 represents 42 percent of the enduring requirement,
necessitating supplemental funding to meet the full requirement. As
U.S. force levels in Afghanistan decrease, Navy expeditionary forces
remain instrumental to the retrograde and reset of equipment and
personnel, providing engineering and maneuver support to the joint
ground combat elements. Continued OCO funding for the reset of deployed
equipment will be critical to the long-term readiness of the force.
Readiness Investments Required to Sustain the Force--Shore
Infrastructure
The Navy's shore infrastructure--both in the United States and
overseas--provides essential support to our Fleet. In addition to
supporting operational and combat readiness, it is also a critical
element in the quality of life and quality of work for our sailors,
Navy civilians, and their families. As we have done for several years,
we continue to take risk in the long-term viability of our shore
infrastructure to sustain Fleet readiness under the current top line.
Due to fiscal constraints, the Department of the Navy will not meet the
mandated capital investment of 6 percent across all shipyards and
depots described in 10 U.S.C. 2476 in the fiscal year 2015 baseline
budget. The Navy projects an investment of 3.5 percent in fiscal year
2015. The 2015 President's budget does, however, fund the most critical
deficiencies related to productivity and safety at our naval shipyards.
our navy into the future
As we look to the future, we see continuing need for Navy forces on
station to meet the mission requirements of the combatant commanders.
Global operations continue to assume an increasingly maritime focus.
The Navy chiefly maintains regional stability in the deterrence of
aggression and the assurance of our allies. Our Navy is operating where
it matters, when it matters--and we see no future reduction of these
requirements. As the CNO has testified, a return to revised BCA cap
spending levels in fiscal year 2016 and beyond will lead us to a Navy
that would be insufficient in size and capability to conduct the
missions of the 2012 DSG.
Fortunately, we retain the most critical and foundational element
of the future force, our sailors. They are the highest quality, most
diverse force in our history and continue to make us the finest Navy in
the world. On behalf of all these men and women of the U.S. Navy--
Active, Reserve, and civilian--thank you for your continued support.
Senator Shaheen. Thank you all very much.
You've all referred to the effects of sequestration on
readiness. Can I ask you to talk a little bit more about the
specific capabilities that we will lose and, if we continue
sequestration into fiscal year 2015, what the impact will be on
our ability to do surge capacity? Also, if sequestration
continues beyond that, to what extent are the effects from
those cuts reversible, and at what point do we then have a very
long period in order to reverse damage done by the cuts? I
don't know who would like to go first on that.
General Paxton?
General Paxton. In the case of the Marine Corps, probably
the most immediate example, in terms of a capability that is at
risk and then the time to regenerate, I'd refer to our fixed-
wing aircraft, for example, the F-18s. We have what's called
``out of reporting cycle,'' and that's when we have either
maintenance that needs to be done on the aircraft, or parts and
supplies that are delayed in arriving there. The Commandant was
on record, a year ago, about stating exactly where our ``out of
reporting cycle'' was for the F-18s, and then what he predicted
would be the case with sequestration.
Most of our fixed-wing squadrons have 12 aircraft, give or
take. The prediction was that we would have eight or nine that
would be on the line--it would be three or four off-line, and
that we were at risk of getting down to seven or eight. We
would have four or five aircraft that you could not maintain.
Indeed, even with OCO money, even with some reversions from
cash, we are, this year, many of our squadrons, between six and
seven aircraft that are on the line, and we have five or six
that are ``out of cycle reporting.'' We are up around the 46 or
48 percent mark for ``out of cycle reporting.'' We estimate
that that will continue, at least for the next year.
Those are aircraft that, not only do you not have on the
line, but, at the same time, you have the same number of pilots
there.
Senator Shaheen. Right.
General Paxton. You have the same number of pilots training
on fewer aircraft. You then have to sequence that with night-
illumination cycles to get time flying with goggles. You have
to sequence it with ships' availability, which is a whole
different challenge that Admiral Cullom can talk about, so you
get deck bounces to keep qualified.
In essence, it's a downward spiral. Is it reversible?
Absolutely. If the money were to materialize, if you will, we
could buy the parts and we could perhaps hire some more
civilians, and we could fix the backlog of depot maintenance,
but it would take us months to do it. It wouldn't be days or
weeks; it would be months to do it. With each time, the month
would affect another deployment cycle for, for example, another
Marine Expeditionary Unit (MEU) that goes out.
I'm not sure if that answers your question. It is
reversible, but it would take a while, ma'am.
Senator Shaheen. It's certainly very helpful. If
sequestration played out through the remainder of the years
that the BCA projected, are there capabilities that we just
plain-old lose at the end of that?
General Paxton. I'll go very quickly through that question,
Senator, and then turn it over to General Spencer.
We absolutely would lose capabilities, and the regeneration
time would then be exceptionally long, because in the case of
the Marine Corps, we don't want to mortgage your near-term
readiness. We would continue to source the two MEUs that are
out, east coast and west coast, and the next ones behind them.
The result would be, instead of having a uniformed or maybe a
little bit of a bathtub in readiness, we would be forced, as
some of the other Service Vice Chiefs said, into some degree of
tiered readiness. Then you would have no surge capability
because you would have entire squadrons where there were either
no aircraft or no trained pilots.
Senator Shaheen. Thank you.
General Spencer?
General Spencer. Yes. Madam Chairwoman, just to be clear,
we have the sequestration level, and the President's budget
which is above that. In general, we tried, as best we could, to
put reversible things in between sequestration and the
President's budget. Just in case the sequester stood, we could
reverse those. But, I want to be clear, the sequestration level
cuts are not reversible. Let me give you some specific
examples. I know some of the reductions we've proposed already
might have been controversial, but if we go to the
sequestration level, we will divest the entire KC-10 fleet,
that entire fleet of tankers. We will stand down and divest all
of our Global Hawk Block 40s. We will stand those down. We
will, as you probably know, we were on our way, be at 50 orbits
of Intelligence, Surveillance, and Reconnaissance (ISR) now,
growing to 55. We would have to reduce that to 45 orbits. We
would have to reduce investments in our KC-46 fleet and our F-
35s. We'd have to reduce the number of buys. Same with the MC-
130J, and would go right on down the line. We'd make cuts in
science and technology (S&T), cuts in new engine technology,
stop radar ISR sensors, it would slow our readiness recovery,
and infrastructure. At the sequestration level, we're not
talking about coming back from that. We would have to take out
fleets, significantly impacting our readiness, and there's no
reversibility in there.
General Campbell. Yes, ma'am?
Senator Shaheen. General Campbell?
General Campbell. I'd just add that, for the Army, it's $75
billion over the next 5 years, and, for the Army, it's about
people. We're cutting BCTs and we're cutting end strength. But,
our guidance is to keep a balanced force, so we're mortgaging
the future of all our Services here. We're not able to put the
right money into our S&T. We're not able to put our money into
modernization of equipment. We keep pushing this to the right,
and we just get smaller and smaller.
The other thing that we don't talk a lot about is the
morale, the impact it's going to have on the All-Volunteer
Force as we move forward. I think that's pretty critical as
they see us continue to come down and then not provide them the
right resources to properly train. For the Army, going from
570,000 on the Active down to 490,000, then down to 450,000,
and with full sequestration, we go down to 420,000. The Chief
and Secretary of the Army have said we cannot do the DSG at
420,000. At 450,000, it's at significant risk. We go below
450,000, and that's that redline. But, again, that's the
people, and that's trying to keep it in balance. We can keep
more people, we can keep more force structure, but then we have
zero readiness, we have no modernization. For us, it's a
balance. At the 450,000/335,000 for the Guard, we're at that
redline balance where we need to be.
I'm really worried about the number of people that we have
to bring down. We've been able to go from 570,000 to 490,000
with attrition, for the most part. Going from 490,000 to
450,000 is going to get much harder. This has been on the backs
of these great men and women over the last 12 years, and what
we're going to have to do with involuntary separations is going
to be pretty huge here. I can talk more if you want that.
Senator Shaheen. Thank you.
Admiral Cullom, I'm going to come back to you, but I'm
going to give Senator Ayotte a chance to ask questions first.
Senator Ayotte. Admiral, why don't you answer that, because
it's an important question, in terms of the impact on
sequestration on the Navy, and also about our shipyards.
Senator Shaheen and I are obviously concerned about the attack
submarine fleet, our capacity to keep the right workforce, and
make sure that we actually have the capacity we need. It's so
needed, obviously, not just in the Persian Gulf, but also in
the Asia-Pacific region.
Admiral Cullom. Yes, ma'am. Thanks, Senator, for letting me
respond to that, because we start out as a tiered force from
the very get-go, so we don't have a place to go if we're
looking to be able to get to a lower sequestered level. We
probably need to look no further than what happened as a result
of last year's sequestration. We took two air wings down to a
tactical hard deck. The others were down to minimum hours that
they needed to be able to deploy. There was an impact to the
Fleet Readiness Centers that General Paxton was mentioning.
That left us with work in process that was actually on the
factory floor, if you will, at the end of the year. That's the
first time in a long time, at the end of the year, that we
actually had airframes and engines that were just sitting on
the floor, and the backlog behind it. That is a pretty
significant impact.
Then you go to the impact on the public yards. We saw, and
you see every day up in New Hampshire, the hiring freeze, the
overtime, and the furloughs. That delayed the starts, and it's
extended the availabilities of the ships. There's a real impact
to those things.
If we go to a sequester level, and we stay at that level
for any length of time, we think that limits our options and
the Nation's decision space, because it compels us to go back
and inactivate a carrier strike group, that's both the carrier
and the air wing that goes along with it, because there's
nowhere else to get enough money to be able to do that.
There's a long-term impact as well on surge ability. In
case a contingency comes up, the additional contingency
operational capacity for the carrier strike groups has to be
ready within 30 days.
Additionally, modernization and recapitalization would also
be dramatically reduced; a pretty significant impact.
Just in terms of presence, there was a 10 percent drop in
global presence as a result of the sequester, just the last
time. That was just for 1 year. When you start to extend that
over several years, it has a cumulative effect that is
decidedly not good.
Senator Ayotte. Admiral, we've heard in the past the
testimony about what the size of our fleet would be if we went
down the sequestration road, not only over the FYDP, but over
the full window. Do you have those numbers, both the overall
size of the fleet, as well as the attack submarine fleet? Even
with building two replacements of Virginia-class submarines,
we're only meeting half the combatant commanders' requirements
now.
Admiral Cullom. Yes, ma'am. As the CNO mentioned the other
day, the combatant command demand signal over the request and
the requirement that we have out there is for 450 ships. That's
what it would take to be able to do what they need us to do.
Sequester could take you down to the sustainable force, to the
240-260 range, in that ballpark.
Senator Ayotte. Right.
Admiral Cullom. Of course, ships are aging out; that's one
of the reasons behind the cruiser phased modernization. We
would like to keep as many ships around as we can to handle
contingencies in the future.
Senator Ayotte. I think we all agree. We have to go over
and vote and we're going to come back and continue.
Senator Shaheen. I think we are. We have two more votes, so
rather than trying to run back and forth, we're going to recess
again, go do those two votes, and come back and finish the
hearing.
Senator Ayotte. Great.
Senator Shaheen. Thank you for your patience, everyone.
Senator Ayotte. Thanks. We'll come back. There are
obviously many more questions, given the concerns we have.
[Recess.]
Thank you. Senator Shaheen is on her way back. I'm going to
just continue the questioning that we were on when I left.
I was talking to General Campbell, as well as to General
Paxton. As I understand the force reduction levels that are
proposed for the Army, as well as for the Guard and Reserve,
here's what I'm trying to understand. Even without
sequestration, we're proposing significant reductions, are we
not? There's some plus-up in the proposal that, in addition to
sequestration, as I understand, has been submitted to us by the
administration. With that, we're brought to 420,000 Active,
315,000 Guard, 185,000 Reserve. Is that right?
General Campbell. Ma'am, the 420,000/315,000 is with full
sequestration.
Senator Ayotte. That's with full sequestration.
General Campbell. Yes, ma'am.
Senator Ayotte. Okay. Where are we without full
sequestration?
General Campbell. We're trying to hold at 450,000/345,000.
Senator Ayotte. Okay. That's what I wanted to clarify.
Here's what I need to understand. What risks are we taking
on by doing that? What I mean is, let's say we have one
conflict to respond to. Let's say that, unfortunately, we have
to respond to aggression by North Korea, where none of us wants
to end up in a land war, but let's say we had to go into a land
war. What are we able to do? In other words, even with the
450,000, what are we able to do? With the 420,000, with the
sequestration, what are we able to do? What risks are
associated with that?
I think it's really important for people to understand that
we used to have a theory that we could fight two conflicts,
then we went down to one-and-a-half conflicts. Where does our
posture now leave us, in terms of ground forces, General? Where
is our posture left if we go forward with sequestration? I'd
love to hear from both of you on this point, because,
obviously, the Marine Corps is experiencing reductions, as
well.
General Campbell. Yes, ma'am, thank you for the question.
What I'd tell you is, start worst-case first. At full
sequestration, and General Raymond T. Odierno, USA, the Army
Chief of Staff, testified to this yesterday, the Army
leadership feels we'd really have a hard time to do a prolonged
multi-phased major contingency operation. In the past, as you
talked about, we could do two different places. We've gone to,
really, one, and maybe hold off on the other at 490,000.
Senator Ayotte. Like Iraq and Afghanistan.
General Campbell. Right. We couldn't do that at 420,000.
Senator Ayotte. You cannot do that at 420,000.
General Campbell. No, ma'am. At 490,000, we feel
comfortable that we can complete the DSG. There's a little bit
of risk there. At 450,000, that risk goes much higher. Below
450,000, we don't think we'd be able to do it.
Senator Ayotte. When you describe a 420,000, which is the
sequestration scenario, and you say one major contingency, you
seemed to qualify what we'd be able to do in that one major
contingency. Can you help me understand that?
General Campbell. Depends on what exactly you're dealing
with, for how long, and what mobilization you get you have to
go through.
It took us 2 to 3 years to grow brigades from scratch.
People say it's easy to reverse this. It's not that easy, 2 to
3 years. What Congress gave us with Iraq and Afghanistan was
temporary end strength relief and some wartime allowance; that
really helped us as we grew over the last couple of years.
Remember, we had brigades where we had to drop down to two
maneuver battalions to get the right number of brigades over
into Iraq when we had the surge. We're now trying to make those
brigades back, because we know we need to fight with three
maneuver battalions, plus a reconnaissance piece, and we're
trying to reorganize those brigades back and make them more
capable. Going to 420,000, we would probably not be able to do
that.
Senator Ayotte. Wow.
General Paxton, what would you say with regard to our
ability to fight a conflict? Where would we be left, in terms
of our capacity?
General Paxton. If I may, Senator, build the context first.
We were about 185,000 on September 10, 2001, and we grew to
202,000, and that was with congressional authorization and
funding. We knew we were going to have to come down, that that
was unsustainable, with both conflicts. We had studied this in
great detail. The optimal size for your Marine Corps is
186,800, and we have testified to that. That's a balanced and a
ready Marine Corps.
If full sequestration kicks in, the next level of balance
for us, which we don't like but could do, is 175,000. That's
what we've testified to. At 175,000, we have, for example, 21
infantry battalions. If the balloon goes up, it's a one major
contingency operation force, and we're all in, everybody goes.
Senator Ayotte. Everyone. There's nobody left behind?
General Paxton. No, and it may take time, as General
Campbell said. Some of these are phased arrivals, so some of
our operation plans, and we'd have to answer this in a
classified session.
Some of them will arrive at different times, and we will
use that time to see what extra monies we could get to build
readiness. But, we would be flowing according to that
operational plan and that timeline.
Senator Ayotte. How do we deal with issues like dwell time?
General Paxton. If I can, the 175,000 force is, as we spoke
about 2 weeks ago at a 1:2 dwell.
Senator Ayotte. Okay.
General Paxton. That stays at 1:2.
Senator Ayotte. Good.
General Paxton. 186,800, we could get many units back close
to a 1:3 dwell, which would be optimal.
But, at a BCA force, and all in, that's at a 1:2 dwell,
too. We believe, because of the 1:2 dwell, that our steady-
state demand signal may be one of the most pressing
circumstances, even if a major theater war or major contingency
operation doesn't happen. Because, as we said before, to
sustain aircraft readiness, ship readiness, and people
training, we're going to be pressed to sustain that in the long
haul, Senator.
General Campbell. Yes, ma'am, if I could just add to that.
Senator Ayotte. Yes.
General Campbell. At 420,000, some of the assumptions that
went into the planning to bring it down to even those lower
forces were assumptions such as not rotating. We would not
rotate forces. I think that's a flawed assumption. See what
we've done in Iraq and Afghanistan.
Senator Ayotte. What does that mean, if you don't rotate
forces?
General Campbell. That means they go over and they stay.
Senator Ayotte. What does that do to their morale?
You obviously need to be able to have some dwell time. Not
that you wouldn't have dwell, but they're staying. That's a
huge issue for them.
General Campbell. That was one of the assumptions, yes,
ma'am. The other assumption was, whatever we did would be over
very quickly.
Senator Ayotte. So this is not a sustainable assumption?
General Campbell. Right.
Senator Ayotte. We can ask them, but the damage we would do
to them would be irresponsible.
General Campbell. Right, if you have an assumption that's--
you're going to be gone for X amount of time and come back, as
we've seen over in Iraq and Afghanistan, that's not a very good
assumption, either.
Senator Ayotte. No, it isn't.
General Campbell. I didn't even get into the number of
aircraft that we're going to lose through BCA. Right now, with
the aviation restructure, it would take about 600-plus on the
Active side, about 111 from the Guard side; 4 combat aviation
brigades would go away--1 on the National Guard, 3 on the
Active. The multifunctional brigades, we talk in terms of BCTs
all the time, but BCTs are only 30 percent of the total Army.
There's a lot of other stuff that we do every single day.
The combatant commanders have all the set-the-theater
forces, so 35,000 soldiers every single day do theater
logistics, intelligence, signal, et cetera, for all the
combatant commanders. At some point, we're going to have to go
back to the combatant commanders and say we can't do that. The
world we live in today becomes more dangerous. Many of the
things that we continue to do for emerging crises, like a
Terminal High Altitude Area Defense in Guam or Patriots to
Turkey, are covered underneath our base. That's something we
have to take out of that we don't program for.
Senator Ayotte. Thank you. I appreciate it.
Senator Shaheen. As I understand, the Army budget brief
suggested that units will continue to build progressive
readiness and achieve the highest training and readiness
levels, based on available resources. Am I correct in that,
General?
General Campbell. Yes, ma'am. I talked about tiered
readiness.
Senator Shaheen. Right.
General Campbell. Progressive readiness is really what
we've had the last 12 years with an Army Force Generation
model, where there's predictability, and you went through and,
at certain times, you continue to have time to build up. You
had a Latest Arrival Date, in either Iraq or Afghanistan, and
so you had time to build up to that. All of our units went
through that and progressive modeled both the Active and the
National Guard.
Tiered readiness really focuses on certain units, and
that's where the money has to go to. Everybody going to
Afghanistan, if you're in Korea, if you're the Global Response
Force, you get the resources. Everybody else, you have what you
have, and your training readiness will continue to go lower.
That's the difference.
Senator Shaheen. That's what we're looking at if we're
looking at year upon year of sequestration, is that correct?
General Campbell. Absolutely.
Senator Shaheen. The tiered readiness?
General Campbell. Yes, ma'am.
Senator Shaheen. Can I just ask the other branches if you
are also looking at tiered readiness? General Spencer, you said
you don't have tiered readiness.
General Spencer. That's right, Senator. Without going
classified, based on the timing that the Air Force is required
to show up in the war plans, we cannot do tiered readiness; we
have to be ready to go right now. We couldn't do it.
Senator Shaheen. Is that also true of the Navy, Admiral
Cullom?
Admiral Cullom. Senator, I said that the Navy was in tiered
readiness, and had been for 200 years with ships at sail. When
General Campbell was talking about the progressive readiness,
that is, in essence, what my definition was of tiered
readiness: only the folks that are going out to deploy or those
that are in a surge capacity that are needed to be able to
deploy.
To give you an example, for this year, although we say we
have two carrier strike groups that are out there today, and we
can provide a certain number in surge capability, the reality
is that a good portion of our carriers, and the carrier strike
groups associated with them, will actually be deployed and
underway sometime during that fiscal year. It isn't as if those
carrier strike groups stay at a tiered readiness level that is
perpetually at a certain level and then continues to grade
down. They're always in a cycle of working out for that
deployment and then ultimately deploying. In this case, for
this year, six of nine carrier strike groups will actually be
deployed or operating out at sea and away from American shores.
Senator Shaheen. How about the Marine Corps, General
Paxton?
General Paxton. Senator Shaheen, we do not tier readiness,
either. We have units, obviously, that are in different
readiness cycles, depending on when they came back from
deployment and when they may have to go again. In a BCA force,
though, if we go to a 1:2 dwell and then the balloon goes up,
it's obvious that, at some point, we have to look at something
other than either full readiness or no readiness.
If I may, there are two issues here, and I'll pile onto
what General Campbell said a little while ago. Even in one
major contingency operation, regardless of where that theater
of operation may be, we're all in. The issue then becomes that
there are no combat casualty replacements, there are no extra
logistics. There is no surge capacity to deny, to delay, to
deter anywhere else in the world. We're all in, in that one
fight.
In essence, when we get together in uniform and we talk
about this, we're not presenting national command authority
options, because it's an option of one: everything goes. Then
the units that go, you can't even distinguish on the triangle
whether you want a well-trained, well-equipped, or a well-
maintained unit, because you're going to get what you get.
Senator Shaheen. Admiral Cullom, I want to go back to
follow up on Senator Ayotte's questions about the workforce at
our public shipyards. Obviously, this is a concern for us, with
the Portsmouth Naval Shipyard as part of our State. There's a
graph here, that I think everybody has, that shows the aging
out of our shipyard workforce and depot workforce.
[The chart referred to follows:]
Senator Shaheen. It's a concern that we've been hearing in
Portsmouth, at the Naval Shipyard. There are a lot of people
with a lot of years in, and they're looking at the future, with
continued sequestration and potential furloughs and it's
discouraging people, not only in terms of staying beyond once
they get their years in, but also discouraging our ability to
recruit and retain new workers who are going to be able to
achieve that level of experience.
I had a chance to raise this with Admiral Samuel J.
Locklear III, the Commander of U.S. Pacific Command, earlier
this week, and he talked about the importance of our shipyards,
making sure that we have the readiness we need to function.
I wonder if you can talk about how you view recruiting
people to replace those workers that we're going to be losing,
and how we can continue to retain that level of expertise.
Admiral Cullom. Yes, Madam Chairwoman.
That's a great graph, because what it really shows you is
the reductions in force (RIF) of some junior personnel that we
had on board the shipyards back during the 1990s timeframe.
During that timeframe, those would be the people that, today,
had they stuck around, had they been here, would be our
experienced technicians. Much of what we do today really does
require some pretty high technical ability.
We went from 8 shipyards and, I think, about 70,000 workers
down to 4 shipyards with 21,000 workers. That very clearly
shows you that they all left.
Now, we're faced with a pretty junior workforce. We're
doing a lot of great work in mitigation at the shipyards. The
folks from Naval Sea Systems Command have put significant
investment in the training of personnel and in additional
supervision, to help bring the young workforce that we have
there now, to develop those skill sets, to learn from those
people who have been around, and to bootstrap our way back to
the experience levels that we, in fact, need.
That does imply, and does end up producing, some amount of
other indirect costs to it, but it's necessary if we're going
to provide the technical skill sets that we need with the very
complex platforms and ships that we have today.
Senator Shaheen. I just want to ask one followup to that,
because a number of you have mentioned the effect of morale on
continuing budget cuts and looking at continued furloughs in
areas. To what extent is that going to influence our ability to
continue to recruit good people and retain them at our public
shipyards and depots?
Admiral Cullom. Ma'am, I think there will be a challenge
with that. We are very lucky, very blessed, to have civil
servants that work in the shipyards and amongst all the
commands. Even in the Pentagon, we have civil servants that do
tremendous work, and have a great deal of experience.
Our folks in the shipyard are experiencing challenges. We
ought to be very concerned about whether or not they will be
able to continue to show what I call, ``psychic income.'' It's
what they get because they know they're doing very important
things, that they are producing ships. I'm the beneficiary of
many a ship that was produced up in the yards up there. I have
to tell you, they are well built by craftsmen who care about
knowing that young men and women are going to man-up those
ships and take them to sea and into harm's way. We can't afford
to lose them.
Senator Shaheen. Thank you.
General Campbell, would you like to comment on depots and
whether there's a similar issue?
General Campbell. Yes, ma'am.
The same thing. We have some great civilian employees out
there. We have to build that trust back with them. Most of them
hung with us, despite 205,000 put on furlough, loss of 20
percent of pay for 6 weeks, and not knowing how long that's
going to go on. It also impacted families, because many of the
workers would work in hospitals or clinics that would impact
families, and we had to cut that down. Negative pay on the
morale, no pay raises for the last 3 years, and no incentive
pay impacted that they're leaving to go seek employment in the
private sector. They're very dedicated, but they look to the
future, and they say that we can't tell them the predictability
out there. That's been all of our biggest frustration, to deal
with the unpredictability of the budget issues that we've been
facing for the last couple of years. We did it last year; we
all had to do that. If we have to do that again this year, then
I think that there'll be more of a mass exodus.
Senator Shaheen. Thank you.
Senator Ayotte.
Senator Ayotte. Thank you.
General Campbell, can you tell us what you are going to
have to do with involuntary terminations? Assuming there's no
sequestration with the proposed budget from the administration
and assuming we do have sequestration, what's the scenario
there?
General Campbell. Yes, ma'am. As we've gone from 570,000,
working our way down to 490,000 on the Active side, most of
that we've been able to do with normal attrition. In the end,
and we're probably about 520,000 today, as we get down to
490,000, probably only about 5,000 will be involuntary
separation. But, involuntary separation is really a big
category. It's two-time non-selects for different promotions,
it's people that reach what we call a retention control point.
They've been in at certain rank too long, it's us going back
and being very tough on reenlistments and just saying, you
cannot reenlist. You're qualified, but as we look at everybody
here, you're not as good as this next guy. We have to keep the
very best. There's a qualitative service program, where we take
a look at our senior noncommissioned officers and how much time
they have, and some of those have to go.
Five thousand is really getting down to 490,000. When we go
from 490,000 to 450,000, that number's going to go up
significantly. Talking to our personnel folks, it's probably
going to be in the neighborhood of about 35,000 involuntary
separations that we're going to have to work with. If we go
from 450,000 to 420,000, that number's going to go up more.
We've done colonels and lieutenant colonels this year, with
a selective early retirement. All of those were eligible for
retirement, and we worked through that, some great counseling,
and it was about 150 lieutenant colonels, probably 100
colonels, when we worked through that piece. But, we're now
working on captains and majors, and those numbers will be much
larger. These are young captains that could be company
commanders in Afghanistan today, and they come back and we tell
them thanks for your service. It's going to be very tough.
Senator Ayotte. That is tough. Also, what about employment
for them? You are going to be putting a lot of people out.
General Campbell. Ma'am, we have Soldier for Life, where we
really do work hard on transition.
Senator Ayotte. Right.
General Campbell. A year-plus out, we provide them the
right skill sets to help them get jobs as they get out.
Industry is working with us, a lot of partnerships to do that,
so we're very thankful. We have to pay the unemployment if they
can't get jobs. Last year for the Army, it was above $500
million that we paid in unemployment. It behooves us to
continue to work hard to make sure that we set all of our
soldiers up. They're all going to be better citizens for it,
they're going to provide to the country as they get out,
whether they've served a couple of years or all the way through
retirement. We work very hard on our Soldier for Life program,
and we're appreciative of all the great support that we have
with partnerships out there with business in many of the
communities.
Senator Ayotte. Sure. I think that it's important, but
unless I'm missing something, we're doing this pretty quickly.
It's not the way we would want to do it, right?
General Campbell. Yes, ma'am. I think, from 570,000 to
490,000, we were able to set a time and a ramp that we thought
we could work personnel policies to take care of our soldiers
and their families.
Senator Ayotte. Right.
General Campbell. Now, it is from 490,000 to 450,000, much
quicker.
Senator Ayotte. Yes.
General Campbell. From 450,000 to 420,000 is much quicker,
and it's going to get much harder.
Senator Ayotte. General Paxton, obviously the Marine Corps
is smaller.
General Paxton. We are smaller, ma'am, the exact same
challenges that the Army has, we have there. We do not RIF
right now. We don't have any intention to RIF. We don't see the
need to do that. But, there's a lot of hard work that goes into
how you shape the force, strike the balance between the
sessions, and how many new folks you bring in, and then how you
properly grade-shape the force so you could get equitable
reenlistments, equitable promotions, and equitable
opportunities for command. The ability to predict what the
money would be, the ability to predict what the timeframe would
be, as General Campbell brought up, is really critical. BCA
just accelerates the speed with which you make some of those
decisions.
General Campbell. Ma'am, to add on and put it into context,
keeping it going and continuing to grow for the future, we have
to bring in about 60,000 new soldiers every year. We have to
bring in about 4,000 new officers every year. Despite coming
down, we still have to bring that in, to continue to grow the
right grade structures as we move forward. That's going to
continue to make it tougher, as well.
Senator Ayotte. I don't know if the Air Force and the Navy
want to add anything on this.
General Spencer. Senator, I will. I wanted to go back to,
if I could, the earlier question on the depots, because that's
a really big deal for us with our civilians.
Senator Ayotte. Sure.
General Spencer. We didn't treat our civilians very well
last year. We sequestered them, we carried thousands of
vacancies, and we then furloughed them. They hear rumors. Every
time a cut comes up, why don't you just go cut more civilians
instead of taking the cut there?
Coincidentally, I have two sons; one works in a shipyard in
Newport News, the other works as a computer operator for the
Defense Intelligence Agency. I have to tell you, they both
called me last year, asking, should I get out of DOD? They are
committed to service like I am, and so they want to be a part
of DOD, they wanted to serve their country, but they have
families. Fortunately, they didn't jump ship, if you will, but
they were really worried.
I think we need to be really careful about our civilian
employees. Just in the Air Force, as an example, we have
180,000 civilian employees. Roughly between 4,000 to 5,000 of
those work in the national capital region. I think sometimes
there's a view that all civilians work in staff jobs. Not that
staff jobs are not important, but the vast majority of our
civilians are out turning wrenches, they're out at depots. For
example, at our training like at Laughlin Air Force Base, TX,
they do aircrew training and they train new pilots. Their
entire maintenance of their T-38 fleets are all done by
civilians. When we start talking about cutting civilians or
laying off civilians, that's really direct mission that we're
cutting.
Admiral Cullom. Ma'am, for the Navy, we don't see a need
for a RIF, but, like General Paxton, there are the issues
associated with force-shaping, and then, for us, the
reallocation to be able to fill gaps at sea. We have gaps on
many ships at sea, and we need to reallocate our current force
structure to some of those ships.
Senator Ayotte. I think I'll start with General Campbell,
in particular, and General Paxton about OCO. As I understand
it, after the last piece of equipment leaves Afghanistan,
you're going to need 3 years of OCO funding to reset. Can you
tell me if there is a firm commitment to include this reset
funding in the budget?
You know what I always find fascinating about OCO around
here? Everyone looks at it for everything, to fund every
project. Can you tell me what you're going to need for OCO
funding in the coming years?
General Campbell. Yes, ma'am. The critical piece is what
you just said there. We've been very consistent, since I was a
colonel back in the Pentagon in 2004-2005, when we talked about
having the ability to reset our equipment 2 years after we came
out. It will now take 3 years after the last piece of equipment
comes out to reset all that equipment.
Today, we have about $15 billion worth of equipment in
Afghanistan. We need $10 billion of that back to be able to
reset. There's $5 billion that we can work with the Afghans,
with other countries, that we can divest but we need to get $10
billion of that back.
But we've been very consistent, about 3 years to take care
of all the aircraft and all the ground combat vehicles to come
back in. We do use OCO for the training piece, because
everything going to Afghanistan, we've been able to use OCO.
But last year, when we had the sequestration issues, we had to
take from the base, because of the OCO issue, at about $3.2
billion.
As I talked about in my opening statement, if we can't get
the OCO at a certain point, then we have to go back into the
base, because we're not going to leave our men and women
without what they need in Afghanistan. But that'll impact
readiness in the end.
General Paxton. Senator, we are continuing to move our
gear, which is a recapture, reset, and reconstitution of our
gear. We've brought about 79 percent out of Afghanistan, to
date, but when General Campbell and I testified in front of
both of you last year, it was closer to the 3-year mark for the
Marine Corps. At that time, it was $3.2 billion. But due to a
lot of hard work over the last year, that delta is now down to
about $1.2 billion or $1.3 billion. We're going to need
probably 2-plus years and about $1.2 billion, and hopefully in
OCO monies. That's what we'd like to plan around, to get that
gear reset, ma'am.
Senator Ayotte. Good work on the number.
General Paxton. Thanks.
General Spencer. Senator, if I could add, because reset is
one thing, and we have reset requirements as well, but there's
another part. You may have heard the term ``OCO to base.'' As
some of the other Services, we are coming out of Afghanistan
and Iraq with more bases than we went into it with. There is
this enduring requirement of al-Udeid and al-Dhafra. Those
bases have been coined ``enduring.'' Right now, those bases are
being funded out of OCO. In addition to having to reset the
force, we have to figure out what we're going to do with our
budget to now absorb these enduring bases that remain.
Admiral Cullom. Yes, ma'am, on the Navy side--and I'd
actually divide it into three areas. Our OCO, as you said,
there's a lot of stuff that goes into that, is certainly an
enduring piece for the Navy as well. On the enduring side, ship
maintenance and aviation depot maintenance, there's certainly a
good portion of that that definitely funds enduring things.
CENTCOM facilities like Isa Air Base, Fujairah, or Jebel Ali
are also funded with that.
The reset piece for the Navy, because we've been resetting,
if you will, in stride, we've also been double-pumping our
carrier strike groups. As we've done that, there wasn't the
time to be able to do a lot of the reset. Reset, for us, of 10
years of operations, and, because with the drydocks up there,
there's only so many drydocks, and getting them through that
takes a certain period of time. For us, that's about a 5-year
process because they drydock once every 8 years. That's going
to take us a little bit longer on that reset piece.
Then there's the continuing operations piece. I would
suggest, although Navy is at $9 billion for 2014 in the total
OCO amount, that will certainly come down as we pull out of
Iraq. If we look and think that should go back to where it was
prior to September 11, 2001, the Navy, prior to September 11,
2001, was somewhere a little bit north of about $1 billion a
year for our supplemental monies. It's going to take more than
that, in the kind of continuing operations that we have in this
extraordinarily complicated world, particularly with the
rebalance to the Pacific, as well.
Senator Shaheen. Thank you.
Senator Hirono.
Senator Hirono. Thank you, Madam Chairwoman.
General, I appreciate your thoughts about the importance of
the civilian component to our mission. I agree with you.
Admiral Cullom, the Pearl Harbor Naval Shipyard Apprentice
Program provides an opportunity to train and educate young
people in the workforce, providing for development and
retention of the best and the brightest, ensuring that we
attract and retain the most capable workforce, and provide for
educational and professional development. I have had the
opportunity to attend many of the graduations each year of this
excellent program, and have spoken with the graduates. They
consider the work at the shipyards to be of utmost importance.
It's what they do to serve the country. For a number of them,
it's generational, that their fathers and even their mothers
who are now being trained more and more. This is important
work.
Given that we have been so successful with this program in
the past, what are your thoughts about the future of the
program? Is it right-sized? Does it need to be expanded,
especially as we see the experience level in the shipyards
going down for the foreseeable future?
Admiral Cullom. Yes, ma'am. Thank you for the question and
your thoughts about it, because it certainly is a family
tradition for many families, from generation to generation. In
some cases, it's three or four generations who have been
serving in that way to ensure that we have the kind of ships,
and I would also suggest, the aircraft in our aviation depot
maintenance facilities as well.
The training programs are absolutely essential. They're not
just out there busting rust on the deck of the ship, they're
actually out there doing some pretty complicated repairs and
also, in many cases, helping us do the modernizations that are
pretty essential for the ships to be relevant for far into the
future.
I think we're happy with where the program is right now. I
think there are opportunities for us to look at where that can
be expanded, where it fits within the work that we have to do.
Certainly, as we were just talking about, with reset, there'll
be plenty of work to do.
Senator Hirono. I note in your--is this your chart? Whose
chart is this?
Admiral Cullom. Yes, ma'am.
Senator Hirono. 2014 and beyond will have increasing
experience in your workers, if training and investment are
maintained. Is that a big ``if'' for you, or do you expect that
it's all going to happen?
Admiral Cullom. The training is continuing. We have a
fairly good program for that. As we were just talking about,
the training programs are essential to be able to build that
level back up so that we get beyond just having apprentices
that would get into journeymen, and we really develop that
expertise. We're in the process of doing that, but we're also
recovering from that whole decade between 1990 and 2000, where
we sent many of those junior workers away. In that process, we
lost. I would say we created a notch of experience.
Senator Hirono. Are you saying that we're doing enough and
we're putting enough resources to train the workforce that we
need to keep our shipyards and, basically, our military, our
Navy, going?
Admiral Cullom. Yes, ma'am. I think we are. It's a fine
balance with that, because if you put too much into that, then
you add to the indirect cost associated with that. But clearly
we're trusting the judgment of our shipyard commanders, the
shop personnel, and the shop foremen to ensure that they are
making the case for which training programs are the most
relevant, and we evaluate those all the time. Naval Sea Systems
Command evaluates those for how effective they are and what
they're doing. I think, for right now, we're okay.
Senator Hirono. We know that there's been a pretty big cut
to the military construction funds, and that's important. So
too are resources for restoration, sustainment, and
modernization funds, keeping our shipyards at their peak form
and capabilities. I know that there's pressure everywhere in
the DOD budget; tradeoffs have to be made while managing RIFs.
Admiral, how important are these funds to the shipyards, and
what is your outlook for sustainment, restoration, and
modernization at our shipyards?
Admiral Cullom. Yes, ma'am, you're exactly right. We
recognize that the shipyards are absolutely critical to being
able to maintain our warfighting readiness. To be able to do
that, they have to have the infrastructure in the shape that it
needs to be in, to be able to properly support, so the lights
work, so that the plumbing and the equipment works, and they
can be able to do the repairs.
The budget funds the most critical of the deficiencies
related to productivity and safety, but we are, right now,
working very aggressively to look for opportunities, either
through reprogramming or realignment, to try to be able to get
that funding up to the 6 percent, where it should be.
Senator Hirono. Thank you, Madam Chairwoman.
Senator Shaheen. Thank you.
Senator Donnelly.
Senator Donnelly. Thank you, Madam Chairwoman.
This would be to all of you. I'm concerned about the
persistent issue of suicides among our servicemembers. It's
often considered a personnel issue, but I consider it a
readiness issue as well. As we look at this, I was wondering,
do you also consider this a readiness issue as well as a
personnel issue?
General Campbell. Sir, absolutely, sir. We've been working
very hard with a lot of different programs and partnerships
outside of each post, camp, or station. All the Services have
taken a hard look at this. We're putting behavioral health
providers in and we've raised those numbers at each post, camp,
or station. We've made behavioral health teams at the brigade
level. We did that in Afghanistan and it really helped out.
We're bringing it back to the continental United States. We've
increased behavioral staff by 150 percent, where it was 1,300
in 2003, to over 3,200 in 2013, so we continue to work through
that.
Each post, camp, or station does a holistic look at all
behavioral health, all suicides, everything we put under the
umbrella of ready and resilience. Resilience, for us, is about
providing soldiers, family members, and civilians some of the
skill sets to help them when they face some of those hard
things in life, whether it's relationship issues or financial
issues. By looking at resiliency, it really is tied to
readiness. One suicide is bad. We continue to work through all
those.
It's much tougher for our National Guard and our U.S. Army
Reserve, based on the geographical dispersion, that they have
the availability to get to some of the post, camp, or station,
but they're doing some very innovative things in each of the
States, with partnerships with armories, that kind of thing.
We'll continue with that program.
Senator Donnelly. A recent report that came out indicated
that some of the servicemembers who committed suicide, when
they looked, said there were previous mental health or had
suicidal thoughts before they ever joined. I was wondering if
there's any look at how we can improve or update our screening
process.
General Campbell. Sir, we've been looking at that very
hard. I don't have the numbers here with me that talks about
the number that we think had some sort of behavioral health
issue before they came in, so I will provide that information
for the record.
[The information referred to follows:]
The Army never had the ability to know fully whether or not an
individual had a behavioral health condition or treatment before
joining the Army. During the accessions process, medical records are
reviewed and soldiers are asked if there is any history of behavioral
health care. Certain conditions, when identified, render accession
candidates ineligible for entry into the uniformed services.
There are no civilian data systems that track pre-existing
behavioral health conditions beyond what is self-reported or disclosed
in copies of medical records provided by the applicant. Therefore,
there are soldiers who come into the military with mental health
problems that were either unrecognized or unreported at the time of
accession.
After a suicide, the Army can correlate existing behavioral health
conditions recorded in the military electronic medical record with
other risk factors that were present in the decedent. Suicide event
reporting is detailed, and collateral data are often obtained.
Nonetheless, unless behavior health care obtained prior to entry is
disclosed by servicemembers during treatment or in other forums (such
as direct questioning during accession training), there are no
comprehensive mechanisms to determine if there was a behavioral health
condition or episode of care prior to entry into the Service.
General Campbell. I think, with some medical testing, with
some biomarkers that they've been working here for a couple of
years, there'll be some tests that we can do in the future that
could maybe help identify that a little bit better.
Our screening continues to get better and we are
identifying soldiers at high risk and returning from
deployments and being able to make sure that we cover down to
provide them resources. But we have to switch gears a little
bit and make sure we do that as soldiers come in as well.
Senator Donnelly. I was fortunate. Ranking Member Ayotte
and I were in Israel for just a few days, and when we were
there, we were fortunate to get a briefing from the Israeli
Defense Forces (IDF) suicide prevention team. One of the things
they have done is pushed it pretty far down into the chain of
command to have people who are looking and keeping an eye out.
Basically, instead of up here, it starts down here and works
up. A lot of the leaders right there on the ground are the ones
who are telling people higher up in the chain that this person
is struggling a little bit and we'd love to get him help.
I just recently received a report back from DOD and they
said, we're not seeing that that provides much help. I would
like to say here, that when we talked to the IDF, their numbers
dramatically were reduced, the lower they went into the chain
of command. People who are with them every day could just give
a heads-up to other folks, saying this person's really
suffering a challenge now. If you could take it back to DOD
that they may want to take another look at this?
General Campbell. I don't know who you talked to in DOD,
sir, but I think all of us would tell you, the lower that we
get the better. You have to know everything about that soldier,
where he lives, if he's married, not married, financial issues.
That's all about being good teammates, taking care, and having
a battle buddy. I think all of the Services do that very well,
and we'll continue to look at other ways to make sure we do
that. But if we can set policy and procedures at the four-star
level, it doesn't matter, it has to happen on the ground with
battle buddies taking care of each other, making sure that they
understand if they have an issue, that there's no stigma to
going to get help.
We have folks, like Medal of Honor recipient Ty Carter, who
has come back and has had some issues. His platoon sergeant
grabbed him and said, you need to get some help. He became
suicidal. He got that help, now he's a spokesperson. If
somebody with that type of valor can go forward and say, ``I
need help,'' we have to continue to spread the word. But it
starts at the lowest level.
Senator Donnelly. We really appreciate your help and your
words on this, because having a good teammate, as we work with
DOD on this, to enable us to, as you said, have your battle
buddies be able to give that information, we would appreciate
the chance to work with you so we can try to further educate
some of the other folks who are working on this issue. Thank
you.
In regards to force structure, General Campbell, you and I
were fortunate enough to get a chance to talk a little bit
yesterday, and I know there are proposals that are out there.
The proposals that are out there, how would you characterize
them, in terms of referencing what the force structure looked
like pre-September 11, 2001, to today? Are they going to be
fairly similar, in terms of mix, or how would we look at that?
General Campbell. Sir, I think first of all, it depends on
whether or not we go to full sequestration. If we get help from
Congress not to go to full sequestration, that will really
help.
But, I would tell you it has to be a balance. We're trying
to balance the end strength, the force structure, the
readiness, and the modernization. Prior to September 11, 2001,
the Active Army was at about 483,000 to 484,000; we're going to
down to 490,000, then down to 450,000. The National Guard was
probably at about 350,000, they went up to about 358, they're
going down to 350,000, then maybe 335,000.
It's going to be lower than pre-September 1, 2001. The
world we live in continues to be dangerous, but we are doing
some things to help ourselves out, to remain in balance, to
reorganize the BCTs, both on the Active and the Guard side, and
to make sure we have the most capable brigades that we can
have. But, they're going to be smaller.
Senator Donnelly. Okay.
General Campbell. There are some very tough decisions, as
we go forward, on aviation restructure. We talked a little bit
about that.
Senator Donnelly. Other tough decisions are in areas of
compensation in other areas, as well. As you look at
compensation changing some of the ways it's going to be handled
for the future, if there are compensation changes, do you think
we'll still be able to retain the quality and the people we
need to protect and defend our Nation? That would be for any of
you.
General Campbell. Sir, we talked a little bit about it
earlier, about the morale and the impact. What I think we
really have to do is to make sure we do a holistic look, and we
don't keep piecemealing these soldiers and these families,
where we're going to take some of this, next year we're going
to take this, next we're going to take this. We have to do a
one-time, ``here's what it is,'' because they understand that
we have to get smaller, they understand that they have to pay a
little bit of sacrifice here, but they also understand that
they're part of one-half of 1 percent in this Nation that stood
up and said, ``Send me to protect everybody else.''
Senator Donnelly. Right.
General Campbell. They deserve something special;
everything that we can do for them, we ought to do.
But, what we're really trying to do, I think all the
Services would tell you, is that we're not trying to take away,
we're just trying to slow down the ramp of where we're at on
compensation. We were very blessed over the last 12 years for
what Congress has provided us and all of our soldiers. But, the
cost of a soldier today, both for medical and everything else,
has gone up incredibly. We can't continue on that path and be
status quo without making some very tough decisions, and we
just have to be smart how we go about it.
Senator Donnelly. Senator Ayotte and I were also in
Afghanistan, and, when we were there, the parliamentarians from
their country said to thank all of the members of our military
for everything they've done to try to provide them with a
country where their kids can grow up in peace, where their
families can grow old, and where their country can have a solid
future. I wanted to pass on, from all of those folks, and there
was a number of them, how much they appreciate everything you
have done to give them that chance.
Senator Shaheen. Thank you very much, Senator Donnelly and
Senator Ayotte, for sharing what you heard in Afghanistan.
Gentlemen, I think everyone here would agree that our men
and women who are serving in our military are among the best
and brightest in this country, and we probably have the most
outstanding force we've had, certainly in my lifetime, and
probably in the history of this country. But, there have been
some high-profile scandals recently that I think we need to ask
about as we're talking about the impact on readiness.
Admiral Cullom, there was a recent cheating scandal at the
Navy Nuclear Power School in South Carolina. There was more
scandal in the Air Force. There have been several very high
profile stories about leadership on the part of some of our
leaders serving in the military, and their leadership styles
and questions about bullying and other behaviors. I wonder if
you can talk about what systemic efforts are underway to
address these kinds of challenges, if there are any.
I know that there are investigations underway of both of
the scandals that I mentioned, and I'm not going to ask you to
comment on those, but if you would, talk about what efforts are
being looked at to address some of these challenges.
Admiral?
Admiral Cullom. Yes, ma'am, I'll start out.
With regard to the Nuclear Power School issue, it certainly
has the direct attention of the Navy leadership. Admiral John
M. Richardson, USN, the Director of the Naval Nuclear
Propulsion Program, is certainly very involved in trying to get
to the heart of this. We will follow up with Congress when the
investigation is complete.
The safety of the nuclear powerplants has been something of
paramount importance to us, and we've done, I think, a pretty
good job well over 55 years in doing so. But, that doesn't come
without a constant vigilance that you have to have for what the
appropriate standards are for personal responsibility, for the
rigorous oversight that you have to have for a program like
that, as well as the highly-trained personnel and what you put
into them to instill them with the right standards. The
foundation of the conduct throughout the Navy really is
integrity, on all these issues, but particularly acute in that
area.
I'm a nuclear-trained officer myself, and I can tell you
that I'm pretty confident that the knowledge and the standards
are there. There are a few people that choose not to follow
those. But we have to make sure that we look at and that we
examine. We are in the process of examining that right now to
get to the heart of it.
But, the culture there, as well as the culture throughout,
I think, all of our Services, is that it demands accountability
for these things, that we have to make sure that people
understand what they need to achieve, and what they need to get
to for that.
From the leadership side of the house, the CNO has
instituted a Navy leadership development strategy to strengthen
our profession and to reemphasize those things. That involves
professional ethics, modules that are incorporated through not
only at the flag officer level, but all the way down to newly
commissioned officers. That's certainly one thing we think will
certainly help from the leadership perspective, but it has to
be instilled from the ground all the way up. That's what
generates the trust, the trust that we have for each other as
battle buddies, the trust that, frankly, families have. When
they offer up a young man or woman into the service of their
country, that's what they expect out of the leadership in
charge. They will have that trust and have that sense of
accountability for it, and to ensure that we all operate by the
right standards.
Senator Shaheen. Thank you.
General Spencer.
General Spencer. Senator, we're similar to the Navy. I can
tell you what I do know so far about the cheating scandal. Our
young nuclear officers take periodic tests and some were found
to be cheating on the tests. What was interesting, though, is
we found that they weren't cheating to pass the test, which is
a score of 90, they were cheating to score 100. We're confident
that they know their job, because as soon as we heard about it,
we retested not only them, but all three missile wings, and
they had a pass rate of 96 percent. So we know they can do
their job. They are tested in a simulator periodically. We
watch them do their job. We give no-notice inspections. We know
they can do their job. But there was something there that we're
getting to the bottom of. There is no excuse for cheating,
period, so that's an issue that we're addressing. This sense of
100 versus 90, and why is that so important, it has compelled
us to examine training versus testing. In other words, is it
more important to just miss a question and then someone explain
to you why you missed the question, or, is it more important to
get the question. We're weighing testing versus training.
You may be aware, in terms of ethical behavior, Secretary
of Defense Chuck Hagel is in the process of standing up an
ethical office. All of us already meet every week with the
Secretary of Defense on sexual assault issues, and Secretary
Hagel is having a similar structure for ethical behavior as
well.
Senator Shaheen. I was not aware of that.
Do either of you want to add?
General Campbell. Yes, ma'am, if I could just add to that.
I think for all of us, we talk about the three Cs: Competence,
Character, and Commitment. We really have to continue to work
through that, and trust between soldier to soldier, trust
between soldiers and their leaders, and trust between the
soldier and the American people. In some areas, we've lost a
little bit of that, based on some of the incidents that you
talked about.
I would tell you, though, as I see it, and I work all the
general officer discipline as a Vice Chief, I think all the
Vice Chiefs do that for Active, Guard, and Reserve, the number
is very, very small.
Senator Shaheen. Sure.
General Campbell. High profile makes the paper, and we hold
ourselves to a higher standard. We should. That's what the
American people expect. But it's a very small number. It's not
like a newspaper person has an aha moment and found out
something. We give it to them. We do the investigations. We
give the information to them. It's not like they're doing
investigative reporting to find somebody.
I feel very confident, and I'm still confident, that we
have the very best men and women that come in. But we have to
continue to get better. We're doing 360-degree surveys on
lieutenant colonels, colonels, commanders, and command
sergeants major now, so they get an assessment of how their
peers and their subordinates feel. We do much more on command-
climate surveys at all different levels. General Spencer talked
about Secretary Hagel's meeting on sexual assault. We do that
every single week. The Vice Chiefs go. All the Services are
doing best-practices from each other, to help each other out,
to continue to go.
I think we have to come back and show you that we are
making a difference, and continue to keep the trust of the
American people. I think you know that all of the Services, as
they do their polls every year, are very high in the trust of
the American people.
This is a very small percentage. That doesn't mean it's
good. We have to continue to do everything we can to get
better. But I feel very confident that we're working at this
very hard.
Senator Shaheen. Thank you.
General Paxton, anything you want to add?
General Paxton. As always, General Campbell hit it all,
ma'am. We've increased the 360-degree surveys. We've increased
command-climate surveys. As is always the case, even if you
have great people and good habits, every now and then you just
need to turn the lens inward, and maybe you've focused on some
training, or focused on some deployment, or focused on some
retrograde, and you just need to go back and reinstill some
basics. The Commandant, himself, has done that with his ethics
lecture, his heritage brief, and his reawakening brief. We're
comfortable that we have the right people focused on the right
issues here, ma'am.
Senator Shaheen. Thank you.
Senator Ayotte.
Senator Ayotte. Thank you.
General Spencer, I wanted to ask you about the Special
Victims' Counsel (SVC) program that was being done as a pilot
program in the Air Force, and we really took the lead on that,
and extended it throughout the Services with the recent
legislation we passed to address military sexual assault. This
is something that I think is a very important step forward to
make sure that victims have advocacy for them and within the
system.
I wanted to see, from your perspective, how your program
was going, because it's really the first one that we're going
to now work to extend to the rest of the Services.
General Spencer. Sure. Thanks, Senator. In a word, the SVC
program has been great. We're cautiously optimistic about what
we're finding, but our reporting is up, which we think is good.
In fact, 10 percent of our reports that go up are for those
that had sexual assault before they even came into the
military. We think we're restoring confidence in the system to
report.
One of the big things that we point right at the SVC for is
our restricted or unrestricted rate has gone up 41 percent. A
victim or an alleged victim who works with the SVC is now a lot
more willing to come forward and pursue the case. That's been a
real success story for us.
We've had 681 clients since we started this in January
2013. Ninety-two percent say they were extremely satisfied with
the service, and 98 percent said if they knew of another
victim, they would recommend a SVC. It has worked very well for
us, and we think it's been very successful.
Senator Ayotte. Excellent, because you're going to lead the
way for the rest of the Services as they implement this
program. I'm glad to hear that it's going well in the Air
Force, because, obviously, all of you will be implementing this
program and looking to the Air Force for their experience on
it. I think it's a really important step forward for victims.
I wanted to get back to General Paxton, because I knew
there was something you wanted to add on OCO, and give you that
opportunity if there's something.
General Paxton. Thank you, Senator. I had almost forgotten.
This goes to bridging the point that General Campbell and
General Spencer made when Senator Shaheen was asking earlier.
Out there in an asymmetric world, we obviously want to
organize, train, and equip our people to succeed on the most
dangerous battlefield. In order to do that, the gear that we
have purchased has become more expensive, and there's more of
it. It's roughly costing us five-and-a-half times more to equip
a soldier or a marine today than we did on September 10, 2001,
and three-and-a-half times more to equip the battalion or the
grassroots-level unit, in terms of moving capability, a vehicle
that will withstand an improvised explosive device, that has an
V-shaped hull, Enhanced Small Arms Protective Insert plates for
the individual, enhanced communications gear, optics for the
rifles, night-vision goggles, and things like that.
Number one, that's the cost in OCO to equip them. Then,
number two, as they come back after 12 years of the fight, we
have to figure out what that right balance is, how much of that
we hold, how much of the old stuff we get rid of. Our motor
pools need more room, our armories need more room. We want to
make sure that the good money that you provided for us, and the
sound investment we made on behalf of soldiers, sailors,
airmen, and marines, is actually retained. That's some of the
money that we'll need when we talk about reset. The reset has a
bigger scope, back here in the United States after the war.
Thank you, Senator, for coming back.
Senator Ayotte. Thanks.
General Campbell, there is something that I've been hearing
feedback on. I just want to get some thoughts on. I've been
hearing feedback on the Active Duty reductions: don't like
them. But also, there are reductions proposed in the Guard and
Reserve. When they're deployed, I understand they're the same
cost, however, when they're not deployed, my understanding is
that the cost structure is less for Guard and Reserve.
I think you can make an argument that, even though you're
reducing Active-Duty Forces, you wouldn't necessarily reduce
Guard and Reserve. I wanted to get your response to that issue,
because it keeps coming back to me from leadership of the Guard
and Reserve, to understand why we'd be doing that, in terms of
cost efficiency.
Understand that I think the reductions are too low overall,
so that puts that issue aside for a minute, but I'd like to
hear your thinking on that.
General Campbell. Yes, ma'am, thank you.
The same thinking with our Secretary and with our Chief,
when we had to take a look at cuts, that we would
disproportionately cut the Active first, because we grew the
Active both for Iraq and Afghanistan. The initial round of
cuts, going from 570,000 down to 490,000, we really didn't
touch the National Guard, and not really much on the Reserve.
That was okay, again, as we grew.
But it's not just about costs. There are many elements of
the National Guard that are cheaper, and it's designed that
way. But, once mobilized, as you talked about, they do become
as expensive, or more expensive. The armor brigades and the
aviation piece are more expensive, just based on time to train
and get ready to go.
Again, there's nobody bad here. We need the Total Force. We
need Active, we need Guard, and we need Reserve. We just have
to balance the size of each, and where we go with it.
There are certain pieces of the Guard that have to be at a
certain readiness level all the time, just like the Active,
same thing with the Army Reserve. But we don't need all of them
at the same time as the Active.
I'd go around and talk to soldiers I commanded in Iraq and
Afghanistan. I had National Guard soldiers with me. They would
tell me they loved being in the National Guard. They loved the
predictability, they loved being a citizen soldier. If they
wanted to do it 24/7, they would have stayed on the Active
side. They don't want to do that. They want to have a family,
they want to have their other business.
That's why the Secretary of Defense, years ago, said let's
get this boots-on-the-ground dwell of 1:5. We'll keep the
Active at a 1:3. Many of our units, like our aviation, we could
not get to the 1:3, and many times we were below the 1:2
overall for our aviation.
I'll just very quickly talk about the aviation restructure.
Because of sequestration, if we want to continue to have the
very best aviation capability in the world, on the rotary side,
we can't go status quo. That's why we've made some bold shifts
to try to get rid of some legacy aircraft and continue to
modernize the Black Hawks, Chinooks, and the Apaches that we
have, to move forward. If we don't do that, it's really going
to put us in a bind and cost additional money that we'll have
to take out of readiness.
But, again, the numbers we're going to disproportionally
take out of the Active. But that's okay. We're going to go to
about a 54 percent reliance on the Guard and Reserve, versus
about a 46 percent reliance on the Active, and have more
reliance on the Reserve and the Guard as we go forward.
Senator Ayotte. Thank you.
I wanted to raise something, an experience that I had in
Afghanistan, and particularly wanted to get your take on it,
General Campbell. I heard a lot from our Special Forces and
Army guys on the ground about the A-10, for understandable
reasons, because obviously I've been pretty out there on the A-
10. For example, I had a Special Forces guy come up to me,
saying that the night before, the A-10s really saved their
butts, because they were out with the Afghan national forces in
the lead, and our Special Forces were with them, and the
support that the A-10s provided was critical in that setting
because it was a close-contact setting.
You've commanded in Iraq and Afghanistan. What has been
your experience with the A-10, because the feedback I was
getting repeatedly on the ground from the guys that are really
taking the fire every day for us, was that this airframe is
important. What's been your experience with it?
General Campbell. Yes, ma'am. Commanding the 101st Division
and Regional Command (RC)-East, where we had A-10 capability to
come in and provide that close air support (CAS) to our
soldiers in very bad terrain, what I think the soldiers on the
ground, both the special operators and conventional forces,
would tell you that it is a game-changer. It's ugly and it's
loud.
Senator Ayotte. I know.
General Campbell. But when it comes in, and you hear that
[mimicking A-10 engine noise], it just makes a difference. It
would be a game-changer.
But, I fully understand the very tough choices that the Air
Force has to make, just like the Army, as we go forward. We've
asked the Air Force to provide us the very best CAS. I'm
confident that they will.
Senator Ayotte. Yes. I think we need to understand, though,
that it's not going to be the same for our guys on the ground.
They have a different opinion, in terms of whether our other
airframes can really provide the same kind of protection that
they feel like they're getting from the A-10.
I thank you all. I wanted to ask your experience there,
because I just wanted to share with everyone what I heard from
the guys on the ground. I wasn't even asking about it, but for
some reason, they knew I was involved in this issue.
Thanks.
Senator Shaheen. Thank you.
I only have a couple more questions. One emerging
requirement from combat operations in Iraq and Afghanistan has
been the development of an enhanced performance round (EPR) for
firing so that it could better penetrate both hard and soft
targets. As I understand, that means we had to develop a new
bullet that could actually penetrate in some places where we
had not been able to with lead, and that steel and copper has
been used, rather than lead, in those bullets. I also
understand that one of the benefits is decreasing groundwater
contamination and pollution, which sometimes occurs from those
lead bullets.
I wonder if you can give us any update on how successful
those EPRs are, and whether we expect to continue to use those
kinds of bullets.
General Campbell. Ma'am, I think the soldiers on the
ground, and what I've seen myself, is that the M855 Alpha 1,
the EPR round, is much more effective. We were designing a
bullet that would be lead-free, but this did that, and it also
provides more penetrating power. Guys will tell you, as we sit
there taking shots at that in the past, or they may have taken
a shot, it went right through, it didn't knock that insurgent
down. This does the job. It's making a difference, and it has
saved lives over there.
Senator Shaheen. Okay, thank you.
I assume everybody has similar experience?
Admiral Cullom. Ma'am, on the Navy side, we haven't really
used the new 855 Alpha 1. Our special operators, however, still
use the old 855, and we still have several more years worth of
that inventory left, but certainly understand that the new one
provides greater capability.
Senator Shaheen. Thank you.
My final question has to do with uniforms, because I'm sure
you're all aware that we put language into the National Defense
Authorization Act (NDAA) last year on combat and camouflage
utility uniforms. I understand, in this era of limited
resources, that this is one place where there might be some
savings. I also understand that, as part of the language we put
into the NDAA, we were expecting some implementing guidance to
foster greater collaboration among the Services.
I wonder if you all could speak to what the status of that
guidance is, where we are as we're looking at trying to improve
development and cooperation among the various Services with
respect to combat uniforms.
General Paxton. Thanks, Senator Shaheen. I'll start, and
then pass to my battle buddy.
In the case of the Marine Corps, we have two separate and
distinct uniforms, same pattern, actually patented. We have
shared some of the technology behind those uniforms. The Army,
I think, is the Executive Agent for some of that testing there.
As in everything that we do, there's a high degree of
collaboration whenever and wherever possible, in terms of
technologies and designs, whether it's visibility from infrared
at night, or cold weather, or wet weather, or drying, or
wicking, or things like that. I think we're all committed to
continue working together to get the best technology and the
best capability out there because we want to equip the soldier,
sailor, airman, and marine to survive on the modern
battlefield. I don't think there's any reluctance to share
ideas and things like that.
As you can probably see from the four of us sitting here,
we each have a high degree of culture and a real positive
commitment to keeping those cultures. I really like soldiers,
airmen, and sailors; I just happen to love marines. [Laughter.]
But we're committed to share, and we're committed to reduce
costs, to the best way possible, ma'am.
Senator Shaheen. General Campbell, would you like to add to
that?
General Campbell. Ma'am, I'd agree with General Paxton. The
Army is committed to making sure we provide our soldiers the
very best equipment. That includes the uniforms. We're very
thankful, over the last 12 years, of the ability to adjust and
make changes to uniforms very quickly when we found out that
the Army combat uniform that we went to, probably in the 2004
to 2005 timeframe, was much better than the uniform we had
before that. It worked well for Iraq, it worked for a little
bit in Afghanistan, but we saw up in the mountains in RC-East
that it didn't work, we had to go to a Multicam. We were able
to get the money from Congress to be able to make those changes
and adapt very quickly.
I think we're committed, as all the Services, to make sure
that we're responsible, based on the budget and where we go,
and to work together. We're in testing right now over the next
several months, from March until about October, on a couple of
different types. I think we're sharing that with all of the
Services to make sure we're on the same sheet of music as we go
forward. It makes sense that we have to get better to be more
fiscally responsible. Uniforms is just one of those things
we'll take on.
Senator Shaheen. Should we expect some guidance anytime
soon on this?
General Campbell. I don't think we're going to have the
testing piece for us until probably the end-of-October
timeframe. I'll make sure that our folks are tied in with the
Marine Corps and the other Services.
General Paxton. I think we've worked with the subcommittee,
full committee, and with the full Senate, so we're quite
comfortable with the uniforms we have. We have a commitment out
there that if there are changes in either composition or
material like that, we'll continue to work within the existing
pattern, so we'll minimize the cost and then we'll share those
technologies with other Services. Yes, ma'am.
Senator Shaheen. Good. Everybody is in agreement that
that's the way we ought to be operating?
Admiral Cullom. Yes, ma'am. The collaboration really is
very strong and ongoing, and our Naval Supply Command has
received a great deal of information from the Marine Corps, the
Army, and the Air Force.
Senator Shaheen. Okay, thank you.
Given the hour, I don't have any further questions at this
time. We will leave the record open until the end of business
on Friday for any other questions that may be submitted for the
record.
Again, let me apologize to all of you for the need to
recess this hearing to go vote. I hate to take your time to do
that, so we will try and better schedule this hearing the next
time.
Again, thank you, to all of you, and to the men and women
you represent, for what you do to ensure that this country is
secure.
This hearing is now adjourned.
[Whereupon, at 4:54 p.m., the subcommittee adjourned.]
[Questions for the record with answers supplied follow:]
Questions Submitted by Senator Jeanne Shaheen
naval shipyard infrastructure backlog
1. Senator Shaheen. Admiral Cullom, the facilities maintenance
backlog at Portsmouth Naval Shipyard at the end of fiscal year 2013 was
$686 million. In fiscal year 2015 readiness briefing materials given to
Senate Armed Services Committee staff, it is stated that ``Naval
shipyards are in worse condition than average Navy facilities'' and
that the Naval Shipyard Depot Maintenance Infrastructure Plan issued
last year, as requested by the National Defense Authorization Act
(NDAA) for Fiscal Year 2012, will take 17 years to complete all five
elements across the public shipyards. If sequestration remains in
place, what is the Navy's plan to ensure the shipyard maintenance
backlog is met?
Admiral Cullom. The Navy recognizes the importance of
infrastructure investments to improve mission-essential facilities as
quickly as possible, especially given the critical nature of Naval
Shipyard facilities and requirements for uninterrupted service for
aircraft carrier and submarine depot maintenance.
Whatever funding the Navy is able to commit, within the limits of
funding available at the time, is prioritized to focus on drydock
certification, seismic improvements for personnel safety,
recapitalizing mission essential facilities in the worst condition,
recapitalizing utility systems to improve reliability, and investments
to improve efficiency.
However, the current lack of predictability of future Navy budgets
and competing requirements within that unpredictable environment will
require the Navy to address this on a yearly basis with a view towards
balancing improvements in the material condition of shipyard
infrastructure with the demands resident in operating our forces
forward.
2. Senator Shaheen. Admiral Cullom, what is the effect of not
having adequate funding for the shipyard modernization plan?
Admiral Cullom. Although the current infrastructure condition has
not specifically prevented any naval shipyard from sustained
performance of mission, the risks of a mission-impacting failure
remain.
Given the critical nature of the naval shipyard facilities and the
requirement for uninterrupted service for aircraft carrier and
submarine depot maintenance, Navy would prefer to increase
infrastructure investment to bring mission essential facilities to a
higher condition of readiness. However, fiscal constraints have
compelled us to continue accepting risk in shore infrastructure
investments. Despite these constraints, the President's budget request
for fiscal year 2015 funds the most critical deficiencies related to
productivity and safety at our naval shipyards.
enduring requirements from overseas contingency operations
3. Senator Shaheen. General Campbell, General Paxton, General
Spencer, and Admiral Cullom, we understand that multiple years of
Overseas Contingency Operations (OCO) funding will be required to reset
the Services after combat operations end in Afghanistan. Given the
uncertainty of OCO funding availability in the coming years, what
enduring capabilities and activities are you currently transferring to
base budget requirements, and how would you grade your progress thus
far?
General Campbell. The Army continually reviews our OCO budget/
request for enduring capabilities that should transition to the base
budget and has attempted to allocate base funding for those
capabilities. The fiscal year 2015 funding levels allowed for
transitioning one enduring requirement, the Global Assessment Tool
(GAT). GAT is a $22.3 million program that provides psychological and
physical health self-awareness to all soldiers each year and is key
component to the Army's broader resilience training and development
program, Comprehensive Soldier, and Family Fitness. The Army is unable
to move additional capabilities from OCO to base without creating
unacceptable risk to current base funded programs. For fiscal year
2015, we will continue to request OCO funding for capabilities funded
through OCO that will ultimately migrate into the base.
The Army continues to increase base funding for training and
readiness as a result of the reduction of OCO deployed units. In fiscal
year 2015, a reduction in the number of Brigade Combat Teams (BCT) and
Combat Aviation Brigades drives a base funding increase of $73.0
million and $134.0 million, respectively.
General Paxton. The Marine Corps has made modest gains in its
efforts to fund enduring requirements into the baseline budget, but
will face challenges to migrate the requirements identified above as
sequestration has resulted in reduced top lines for all the Services.
The ability to fund missions with OCO has enabled the Marine Corps to
limit further reductions in operation and maintenance (O&M) and
procurement accounts (infrastructure sustainment and equipment
modernization) in order to support a ready and capable force.
The majority of Marine Corps OCO funding supports the incremental
costs of combat operations, equipment and infrastructure repair,
equipment replacement, military pay for mobilized reservists, deployed
pay and allowances, and end strength above the baseline Active-Duty
Force (182,700 in fiscal year 2015). However, as the Marine Corps
transitions from Operation Enduring Freedom (OEF) in Afghanistan to
steady state operations, including forward presence and crisis
response, some of the activities currently funded via OCO will likely
migrate to the baseline to support enduring missions and requirements.
The Marine Corps currently estimates this amount to be between $200
million and $450 million. This represents approximately 8 to 11 percent
of our total fiscal year 2014 OCO request of $4 billion.
The $700 million realigned from baseline to OCO in fiscal year 2014
by Congress in the 2014 Omnibus Appropriations Act is also an enduring
requirement, and is reflected in the fiscal year 2015 budget as such.
General Spencer. The Air Force currently uses OCO funding for over
$10 billion per year in O&M, primarily for flying hours, weapon system
sustainment (WSS), transportation, and base operating support (BOS) for
the Air Force-funded installations in the U.S. Central Command
(CENTCOM) area of responsibility (AOR). The vast majority of our BOS
costs are for installations outside Afghanistan, and we anticipate
those requirements and costs will be enduring.
In the President's budget for fiscal year 2015, the Air Force
programmed to move between approximately $1 billion and approximately
$1.5 billion per year from OCO to the baseline WSS account, starting in
fiscal year 2016. This will keep us at approximately 80 percent funded,
which is the minimum necessary to maintain readiness. Flying hours,
BOS, and other current OCO requirements have not been addressed in the
President's budget for fiscal year 2015 baseline. If the Air Force has
to revert to Budget Control Act (BCA)-level funding, there is no room
for any OCO to move to the baseline, including the WSS. Under this
scenario, WSS will be funded at well under 80 percent, and readiness
will further degrade.
Admiral Cullom. Navy has been working to transition OCO funded
enduring activities to baseline over the last few years. Enduring
aviation and ship depot maintenance baseline requirements have been
funded to at least 80 percent in baseline since fiscal year 2011 and
fiscal year 2012.
Navy has funded all enduring flying hour operations in baseline for
several years. Increased operating tempo required of our aircraft and
ships in the Middle East continue to be OCO funded. For the foreseeable
future, the combatant command and Joint Staff expect continued
increased flying and ship operations above baseline levels when
deployed to the Middle East.
Since fiscal year 2013, Navy has funded enduring Djibouti BOS costs
in baseline vice OCO.
Navy will require OCO funding for some remaining enduring
requirements. This includes aviation and ship depot maintenance above
80 percent, ship operations to fully support operational requirements,
base support operations for several locations in the Middle East, and
operating support for expeditionary units. Without OCO funding, these
enduring requirements, combined with the increased flying and ship
operations above baseline levels when deployed to the Middle East, will
result in the need for an additional $2.5 billion to $4.0 billion per
year in baseline funding.
The Navy continues to work with the Office of the Secretary of
Defense to identify and plan the possible transition of enduring
requirements from OCO funding to the baseline.
4. Senator Shaheen. General Campbell, General Paxton, General
Spencer, and Admiral Cullom, what impacts will the eventual end of OCO
funding have on the Services' base budgets and overall Service
readiness?
General Campbell. The end of OCO funding will increase demand for
base budget resources, impacting operations world-wide including:
Resolute Support; Operation Spartan Shield; the Integrated Air and
Missile Defense; Horn of Africa; Observant Compass (Africa); and the
Philippines. These overseas presence missions are critical for security
and maintaining relationships with our allies.
The eventual end of OCO funding with no corresponding increase to
the Army's base budget would lead to reduced readiness due to
shortfalls in programs such as depot maintenance and reset. The Army
will require reset funding for 3 years after the last piece of
equipment leaves Afghanistan: Specifically, the Army will require over
$9 billion in reset funding through at least fiscal year 2017. Training
previously funded with OCO for readiness will need to be part of the
base when the OCO-funded deployment offset stops. Increasing pressure
on static or declining toplines will impair our ability to sustain
training readiness and to restore infrastructure and equipping
readiness in future years.
The Army has used OCO funding for these critical requirements and
will require funding in the future to pay these bills. The Army's base
budget topline will need to increase to capture the enduring
requirements.
General Paxton. As the Marine Corps winds down its operations in
Afghanistan, the size of the OCO budget will decrease. We will still
need OCO funds to support enduring activities and to complete the reset
of our equipment for 2 to 3 years after that equipment returns from
Afghanistan. Without an OCO budget for equipment reset, we'll be forced
to take further risk in our equipment modernization, to include depot
maintenance and infrastructure sustainment programs, to maintain near-
term readiness. The result could be some units will not have ready
equipment needed to deploy in 2017.
General Spencer. The impact of no OCO funding depends on
requirements. If all of the requirements--to include flying hours,
transportation, WSS, and BOS--were to go away, we would only need OCO
for a finite reset period of a few years, and after that there would be
minimal impact to terminating OCO funding. However, the Air Force
anticipates a number of enduring requirements, particularly in terms of
continued rotational deployments and sustaining the bases in the
CENTCOM AOR that are not in Afghanistan. If we continue to deploy and
sustain these bases, all of the associated costs (e.g., flying hours,
WSS, BOS) must be funded, either by baseline growth or continued
supplemental funding. Without baseline growth or continued supplemental
funding, we will be forced to fund these requirements out of our O&M
baseline, with likely similar impact as fiscal year 2013 sequestration,
meaning insufficient flying hours to maintain readiness, stood down
flying units, no ready units for emergent requirements, and potentially
not enough ready units for rotational demands, such as theater security
packages in U.S. Pacific Command or CENTCOM.
Admiral Cullom. OCO funding, in addition to our base budget,
continues to play a critical role in maintaining the capability,
capacity, and readiness necessary for the Navy to support our combatant
commanders, in addition to meeting the missions of the Defense
Strategic Guidance (DSG). For over 10 years, OCO funding has allowed
the Navy to operate at a war-time operational tempo throughout the
Middle East. As the land war draws down, Navy is uniquely challenged
because our forces continue to serve and provide presence in the
CENTCOM region as boots-on-the-ground depart. The demand for naval
presence in this theater remains high and is likely to increase
elsewhere as we rebalance to the Pacific region.
If the Navy remains at our current level of operations, it will not
be sustainable within our base budget alone. OCO funding is also
necessary to reset our ships and equipment after a decade of higher
tempo wartime operations. The capital asset nature of our ships makes
longer-term supplemental reset funding more critical to the Navy. In
the current fiscal environment, any transition from OCO into base at
the current base topline, or worse under sequestration levels, would
drive our base down and pressurize already difficult decisions as we
work to balance between force structure, modernization, and readiness.
Without additional supplemental funding, this balance will suffer. For
readiness specifically, we could be forced to delay maintenance
activities for our ships and aircraft, reducing their operational
availability and service life. Training could be reduced, preventing
ships and aircraft from being ready and available for contingency
operations.
5. Senator Shaheen. General Campbell, General Paxton, General
Spencer, and Admiral Cullom, what requirements and activities are you
eliminating that have been paid for with OCO funding over the last
decade?
General Campbell. Over the past 12 years of war, the Army procured
a variety of theater-unique equipment for the warfighter. As the war
winds down, the Army is reviewing various theater-unique equipments and
is in the process of transitioning some to programs of record. However,
many warfighting systems have been or will be eliminated. For example,
current plans are to eliminate the following Mine Resistant Ambush
Protected (MRAP) vehicle variants: FPI Buffalo MRV; FPI Cougar 6x6; BAE
Systems RG-33L; BAE Systems TVS Caiman; GDLS RG-31A2; FPI Cougar 4x4.
In the MRAP Study III, the Army approved the M-ATV, the MaxxPro
Dash ISS, and MaxxPro Plus Ambulance ISS as the three enduring MRAP
vehicle variants.
The Army is eliminating the MRAPs by offering them for sale ``as-
is'' to approved U.S. military allies. The Army is also crunching and
selling as scrap damaged or washed-out MRAPs to eager Afghan buyers.
The Army is also eliminating 55 Joint Improvised Explosive Defeat
Device Office (JIEDDO) force protection systems with an annual
sustainment cost of $328.4 million. Some of the major commercial off-
the-shelf JIEDDO systems eliminated include: Hawkeye ($60 million);
Radiant Falcon ($48 million); Sand Dragon ($45 million); and Gator ($15
million).
Eliminated JIEDDO systems are being done in close parallel with the
drawdown of Afghanistan combat operations.
General Paxton. The majority of Marine Corps OCO funding supports
the incremental costs for combat operations, equipment and
infrastructure repair, equipment replacement, and manpower above the
baseline Active-Duty Force. These costs include deployed operations,
equipment sustainment and reset, mobilized reservists, and other
special pays. These requirements and activities will be reduced or
eliminated commensurate with the drawdown in Afghanistan. As the Marine
Corps transitions from OEF to steady state operations and crisis
response, some of the activities currently funded via OCO will likely
migrate to the baseline to support enduring missions and requirements.
General Spencer. The Air Force does not define OCO requirements so
we are not in a position to eliminate activities funded by OCO. We will
continue to work with appropriate stakeholders to define and meet
combatant commander requirements, provided adequate funding exists.
Admiral Cullom. The following operations are or have been included
in the Navy's OCO funding:
1. Operation Noble Eagle (ONE) 2001 to 2006;
a. A portion of the enduring ONE activities supporting Homeland
security transitioned to Navy's baseline in fiscal year 2006.
2. Operation Iraqi Freedom (OIF) 2003 to 2010;
a. Navy's activities supporting this operation ceased in fiscal
year 2010.
3. Operation New Dawn 2010 to 2011;
a. Navy's activities (e.g., final reset of equipment returning
from theater) supporting this operation ceased in fiscal year 2012.
4. OEF 2001 to present;
a. Navy transitioned Djibouti base support requirements
supporting this operation from OCO to the baseline in fiscal year 2013.
b. Navy continues to support activities for this operation in
the OCO. Once the operation is concluded, it will take several years to
complete the final reset of equipment returning from theater.
Based on the operations funded in the OCO provided above, the
historical Department of the Navy OCO execution from fiscal year 2001
to fiscal year 2014 is provided below:
military ocean terminal concord
6. Senator Shaheen. General Campbell, given its vital strategic
role in the Department of Defense (DOD) pivot to the Pacific region,
how is the Army aligning appropriate resources and ensuring that
strategic facilities like the Military Ocean Terminal Concord (MOTCO)
remain in a condition so it is able to respond to operational demand,
potential contingencies, and operational plans?
General Campbell. The Army's commitment of significant resources to
the Pacific is demonstrated by a number of long-term strategic programs
we are funding and executing. The Army in the Pacific is the largest
overseas command in the Army--with 80,000 soldiers led by a four-star
general. The Army conducts a wide-range of operations and sustainment
projects across the theater in order to support growing U.S. interest
and engagement in the region. In addition to engagement activities, the
Army is rotating additional forces to Korea and critical ballistic
missile defense capabilities to Guam. These forces further increase the
readiness and potency of the Joint Force. This concept is dependent on
the ability to move and sustain multiple rotational units into and out
of the region. Strategic port facilities like MOTCO--and numerous
others like it--are essential to the joint projection and rotation of
forces in the Asia-Pacific region.
MOTCO is a highly visible demonstration of the total Army
commitment to the Asia-Pacific region, but not the only one. In recent
years, the Army has held over 20 large-scale exercises annually with
over a dozen countries. The Army has fully funded a theater engagement
strategy consisting of multiple exercises and participation in well
over 200 military-to-military activities, such as small unit exchanges.
This engagement strategy helps improve readiness and interoperability,
reinforce our alliance commitments, and strengthen collaboration among
partner nations. The success of the Army's engagement strategy and
force commitments is enabled by our ability to sustain our forces in
the region.
______
Questions Submitted by Senator Kelly Ayotte
navy shipyards
7. Senator Ayotte. Admiral Cullom, from a perspective of naval
readiness, how important are the public shipyards and the Federal
employees who work at these yards?
Admiral Cullom. The four public sector naval shipyards (Portsmouth,
Norfolk, Puget Sound, and Pearl Harbor) are vital to Fleet readiness.
The naval shipyards provide organic capability to perform depot and
intermediate-level maintenance, modernization, and emergency repair
work on nuclear-powered aircraft carriers and submarines, and
complement the private sector's capability for conventional surface
ship maintenance. Work performed by the naval shipyards is essential to
meet current operational requirements and achieve the expected platform
service life of surface ships, aircraft carriers, and submarines.
The approximately 29,000 Federal employees in the 4 naval shipyards
are highly-trained artisans, engineers, technicians, and business
professionals. Their indispensable skills are critical to maintaining
the readiness of the Navy's most complex nuclear powered ships and
weapons systems.
prepositioned stocks and the mediterranean
8. Senator Ayotte. General Paxton, 2 years ago I expressed concern
about the Marine Corps' decision to deactivate one of three Maritime
Prepositioning Squadrons (MPS), MPS-1, in the Mediterranean. Because of
readiness concerns related to the Marine Corps' ability to respond to a
contingency in the North Africa region, I introduced an amendment that
was included in the NDAA for Fiscal Year 2012 that restricted any funds
from being used for placing MPS on reduced operating status until: (1)
the Commandant of the Marine Corps provided a report assessing the
impact of this move on military readiness; and (2) the Secretary of
Defense certified that the risks to readiness from such a move are
acceptable. Both you and the Secretary of Defense certified that the
risks were acceptable, partly because of prepositioned stocks in
Norway. MPS-1 has since been deactivated. Meanwhile, instability in
North Africa has not decreased. What is the condition of our
prepositioned stocks in Norway?
General Paxton. The age of the equipment in Marine Corps
Prepositioning Program-Norway (MCPP-N) varies, however, the age and
state of maintenance of equipment-by-equipment type is similar to that
of equipment maintained in the Maritime Prepositioning Force program.
MCPP-N equipment and supplies are stored in stable temperature and
humidity controlled facilities and undergo scheduled inspections and
maintenance services. All equipment and supplies are stored at the
proper level of preservation to ensure operational readiness and
serviceability. Normal modifications, technical instructions, and
retrofits are applied during scheduled maintenance services. Corrective
maintenance is performed by the Norwegian Defense Logistics
Organization on an as-required basis, generally after equipment has
been returned from an exercise. In this regard, MCPP-N benefits from an
experienced, highly trained workforce and near optimal storage
conditions directly attributable to our 50/50 burdensharing agreement
with our Norwegian partners. Marine Corps Logistics Command is
responsible for overall equipment management for the program which
includes, but is not limited to: rotation planning of weapons systems
and equipment; conducting quality assurance inspections; readiness
reporting; meeting accountability requirements; and support of
exercises or crisis response, when required.
9. Senator Ayotte. General Paxton, are the prepositioned stocks in
Norway fully stocked with the equipment needed to support or respond to
contingencies?
General Paxton. Yes. MCPP-N is stocked with equipment and supplies
that support any Marine Air-Ground Task Forces (MAGTF) responding to
crisis response within U.S. European Command (EUCOM) and U.S. Africa
Command (AFRICOM). Over the next several years, MCPP-N will also be
receiving additional equipment capabilities as a part of its
transformation and equipment availability as a result of the
elimination of MPSRON (MPS Squadron)-1, drawdown from combat operations
in support of OEF, and force reductions.
10. Senator Ayotte. General Paxton, is the equipment fully
modernized?
General Paxton. Yes. The equipment and supplies positioned in
Norway are maintained at the highest levels of operational readiness
and routinely modernized through equipment rotation and upgrades as new
equipment is procured for the Marine Corps. In addition, Headquarters
Marine Corps has been executing a transformation plan for equipment
capabilities in Norway designed to enhance the relevance of MCPP-N to
EUCOM and AFRICOM. This transformation includes developing a new force
list and corresponding equipment sets to support that force. The
additional equipment sets include communications and ordnance
capabilities not previously prepositioned in Norway. The end state of
the transformation of MCPP-N equipment sets is to provide a more
balanced capability to support a MAGTF manned specifically to support
crisis response. The Marine Corps plans to complete MCPP-N
transformation in fiscal year 2016.
11. Senator Ayotte. General Paxton, do you believe these
prepositioned stocks adequately mitigate the risk associated with
deactivating MPS-1?
General Paxton. MCPP-N and the MPSRONs are the Marine Corps'
signature capabilities for larger scale contingency and crisis response
that require prepositioned equipment. Both programs share a common
tenet in that they possess the most modern equipment that are kept in
the highest possible state of readiness to ensure rapid force closure
in crisis response across the range of military operations. Though they
share commonality in purpose, they are distinct in their
responsiveness, size, and scope.
First, unlike MCPP-N, MPSRONs are afloat prepositioning assets
which take full advantage of the maritime domain and sea lines of
communication to move equipment and supplies rapidly to a designated
port in support of a contingency. Thus, MPSRONs can close on a crisis
or contingency faster than can be done using MCPP-N due to the inherent
mobility of the MPSRONs. Second, the MPSRONs and MCPP-N have very
different missions and, therefore, support different force structures.
The MPSRONs are each structured and tailored to support a Marine
Expeditionary Brigade (MEB) ( 16,000 marines and sailors) for up to 30
days of major combat operations. MCPP-N, however, is designed to equip
a balanced MAGTF ( 4,700 marines and sailors) while simultaneously
supporting three company-sized elements ( 390 marines and sailors each)
for theater security cooperation missions. Lastly, MPSRONs carry Navy-
specific capabilities not prepositioned in MCPP-N. The Navy equipment
capability sets include: a Naval Mobile Construction Battalion unit
set; a Naval Construction Regiment unit set; a Naval Support Element
equipment set; and a 150-bed Expeditionary Medical Facility. These
capability sets provide specific engineering, logistics over the shore,
and medical capabilities to a MEB. In sum, although there are
commonalities in the equipment found in the MCPP-N program with those
found in our MPSRONs, the two prepositioning programs are not
interchangeable.
12. Senator Ayotte. General Paxton, has the deactivation of MPS-1
led to a slower potential response time to contingencies in North
Africa?
General Paxton. For crises or limited contingencies in the AFRICOM
AOR, the initial response would most likely come from either a forward-
deployed Amphibious Ready Group/Marine Expeditionary Unit (ARG/MEU) or
land-based Special Purpose Marine Air Ground Task Force (SPMAGTF). The
MEU, together with the ARG, remains the most agile, standing MAGTF
capable of conducting amphibious operations, crisis response, limited
contingency operations, to include enabling the introduction of follow-
on forces, and designated special operations in order to support the
theater requirements of the geographic combatant commands. SPMAGTF-
Crisis Response (SPMAGTF-CR) is manned and equipped to self-deploy,
providing a mobile crisis response force with organic command and
control that can respond to missions in a non-permissive environment in
order to protect U.S. citizens, interests, and other designated persons
in the western region of the AFRICOM AOR. The Marine Corps' SPMAGTF-CR
was specifically designed to provide a forward deployed crisis response
capability to the AFRICOM AOR due to amphibious ship capacity
shortfalls to source a standing ARG/MEU presence in the Mediterranean
Sea. Similar to the MEU in its expeditionary nature and forward
deployed posture, SPMAGTF-CR provides rapid response albeit from a
land-based origin.
For any contingency beyond the capabilities of the MEU and SPMAGTF,
however, the deactivation of MPSRON-1 guarantees a slower response time
to North Africa if the circumstances specifically require a similarly
equipped afloat prepositioning asset. The nearest such capability
resides with MPSRON-2 in Diego Garcia. Depending on the circumstances
and the availability of air and sea ports of debarkation, assets from
MCPP-N or home station units in the continental United States may be
used to equip a contingency response force in North Africa. The size
and scope of the prepositioned assets that MPSRON-1 provided coupled
with the ability to discharge cargo instream to an unimproved beach,
however, can only be replicated through the availability of another
MPSRON.
13. Senator Ayotte. General Paxton, if the deactivation of MPS-1
has led to slower response times to contingencies in North Africa, how
much slower?
General Paxton. The Nation's premier crisis and initial contingency
response force remains the forward-deployed MEU embarked aboard ARGs
operating continuously in various geographic combatant command AORs.
For crises or limited contingencies in the AFRICOM AOR, the initial
response would most likely come from either a forward-deployed ARG/MEU
or land-based SPMAGTF. These units provide the President and the
geographic combatant commands with credible deterrence and decision
time across the range of military operations. ARG/MEUs are specifically
organized, trained, and equipped to respond to crisis within 6 hours of
notification and self-sustaining for up to 15 days through organic,
sea-based logistics. Likewise, SPMAGTF-CR remains in a standing alert
posture, able to respond to a crisis or contingency in North Africa
within hours.
For larger contingencies requiring prepositioned equipment, we must
use the response using ships from MPSRON-2 or MPSRON-3 in order to
provide a fair comparison to the capability formerly provided by
MPSRON-1. The response times to North Africa from MPSRON-2 and MPSRON-3
would be approximately 8 days and 18 days greater, respectively, than
that of MPSRON-1. The response times using equipment from MCPP-N would
be approximately 20 to 23 days greater than that of MPSRON-1. MCPP-N
response times include 10 days for sourcing (surge sealift and/or
commercial charter) and movement of ship(s) to Norway, an estimated 7
to 10 days to load ships in Norway, and 9 days transit to the
destination.
army prepositioned stocks
14. Senator Ayotte. General Campbell, what is the condition of Army
prepositioned stocks (APS)?
General Campbell. BCT and Sustainment Brigade sets in APS are all
above 90 percent fill. The European Activity Set, which is a Combined
Arms Battalion located in Germany, is our newest activity set and is
above 99 percent fill. The sustainment munitions uploaded on two APS
container ships is at 94 percent fill. Maintenance rates remain high;
however, funding decreases will impact scheduled maintenance resulting
in corresponding reductions in readiness. Starting in fiscal year 2013,
the Army began leasing a former Defense Logistics Agency warehouse in
Kuwait to provide controlled humidity storage for APS-5 equipment.
Storing APS-5 equipment inside has reduced maintenance requirements for
the equipment by $50 million per year, at $16 million per year for the
lease. The long-term solution is to build 30 Army warehouses in Kuwait
to store APS equipment and discontinue the lease of the current
warehouses. Additional funding beyond post-war reset requirements will
be needed to build the warehouses in Kuwait.
As part of the Army's strategy to improve APS, we are analyzing the
feasibility of placing additional enabler items on the fleet of APS
rolling stock. These enablers would enable APS to meet warfighters'
expectations for movement and maneuver, mission command,
communications, and protection. These enablers include Counter Remote
Controlled Improvised Explosive Device (IED) Electronic Warfare (CREW),
Blue Force Tracker (BFT), Overhead Gunner's Protection Kit (OGPK), and
Beyond Line of Site Radios. The APS program will need additional
funding in order to install and maintain these additional enablers.
15. Senator Ayotte. General Campbell, is the Army full of the
required equipment?
General Campbell. BCT and Sustainment Brigade sets in APS are all
above 90 percent fill. The European Activity Set, our newest activity
set, is at 99 percent fill. The Army is building APS Sustainment
Brigade and Fires Brigade equipment sets in Southwest Asia, which are
both currently at 63 percent fill. Under the President's budget, the
Sustainment Brigade set is expected to be complete by the end of fiscal
year 2015 and the Fires Brigade by the end of fiscal year 2016. Army's
two APS container ships carrying sustainment munitions are at 94
percent fill. Thanks to Congress' support, the APS program is
substantially improving its fill rate. Additional funding is needed to
integrate equipment and enabling systems harvested from OEF to meet
warfighters' expectations for movement and maneuver, mission command,
communications, and protection.
16. Senator Ayotte. General Campbell, is the equipment fully
modernized and well-maintained?
General Campbell. APS are fully modernized. For example, the APS
Armored BCT sets have modernized vehicles--the M1A2 System Enhancement
Package and the M2A3/M3A3 Bradley Fighting Vehicle. The APS BCTs will
be reorganized in October 2015 to include three Maneuver Battalions and
a Brigade Engineer Battalion so they are configured the same as Active
Duty BCTs. Ninety percent of APS rolling stock is fully armored and
outfitted with the latest communication equipment.
APS sets are also maintained at a high level. Army policy directs
APS sets to be maintained at Army Technical Manual 10/20 standards,
which means that all faults have been identified, corrective actions
taken, and preventive services performed on time; all urgent and
limited urgent Modification Work Orders are applied; and all APS
equipment is complete with required basic issue items and components
(on hand or on order). Currently, 94 percent of the APS equipment is
maintained at those standards.
Army has recently made decisions to add to APS equipment harvested
from OEF, specifically MRAPs, MATVs, and MRAP ambulances with associate
Enabling Technologies including OGPK or Crew Remote Operated Weapons
Systems, Internal and External Comms (VIC-3, AN/VRC-92), BFT, Drivers
Vision Enhancer, CREW. Each will be reset to 10/20 standards and
include the most updated Engineering Change Proposals. Vehicles will
begin fielding in the fourth quarter of fiscal year 2014. The APS
program will need additional funding in order to install and maintain
these additional enablers.
army's role in the asia-pacific rebalance
17. Senator Ayotte. General Campbell, what role do you see the Army
playing in the pivot to the Asia-Pacific?
General Campbell. The Army has a longstanding and growing role in
the Asia-Pacific pivot. The Army in the Pacific is the largest overseas
command in the Army--with 80,000 soldiers led by a four-star general.
The Army in the Pacific ``sets the theater'' and plays a critical role
preparing the region for expanded U.S. diplomacy, military engagement,
stability, and security operations. To do so, the Army works hand-in-
hand with the Department of State and specific Country Teams to
leverage relationships with partner nations to enable access and
enhance host-nation support towards U.S. national interests.
The Army also provides many of the sustainment and power projection
support requirements for our sister Services and Joint missions.
Logistically, we secure lines of communication, defend forward
operating bases, and ensure the movement of food, water, fuel, and
other essential engineering services. Operationally, we provide
satellite communication nodes and networks as well as missile defense,
extensive language abilities, and human intelligence capabilities on
the ground. Finally, we foster an expertise in stability operations
through interaction with local and national officials in support of
civil governance functions.
The Army's engagement activities are generally low-cost and have a
limited footprint, yet achieve powerful effects. In recent years, the
Army has held over 20 large-scale exercises with over a dozen
countries. The Army, through our Regionally-Aligned Force model, has a
fully-funded engagement strategy consisting of multiple exercises and
participation in over 200 military-to-military activities, such as
small-unit exchanges. This engagement plan will help to improve Army
and partner readiness and interoperability, reinforce our alliance
commitments, and strengthen collaboration among partner nations. Aside
from exercises, senior U.S. Army general officers meet regularly with
their regional counterparts to build personal relationships over the
long-term. Our willingness to train and prepare together for potential
crises and humanitarian assistance operations fosters credibility,
trust, and confidence in not only U.S. Army capabilities, but also an
expanded U.S. presence and concern in the region.
afghanistan retrograde and equipment reset
18. Senator Ayotte. General Paxton, in your prepared testimony, you
stated that last year, the Marine Corps estimated its reset liability
to be less than $3.5 billion. Today, you said reset liability stands at
about $1 billion. You also stated that since 2012, ``the Marine Corps
has retrograded 77 percent of its equipment items . . . '' How much
does the Marine Corps estimate it will need in OCO funding to
retrograde its remaining equipment?
General Paxton. Approximately 77 percent of equipment has
retrograded from theater, however, only approximately 40 percent has
been reset and returned to the operating forces to support home station
readiness, or redeployed in support of steady state operations. As
such, the Marine Corps will continue to require OCO for the next
several years to complete retrograde and reset requirements after more
than a decade of sustained combat operations. At this time, the Marine
Corps estimates the remaining ground equipment reset liability for
fiscal year 2015 and beyond to be approximately $1.3 billion. In
addition, the Marine Corps estimates the remaining retrograde
requirement for fiscal year 2015 and beyond to be between $150 million
and $250 million based on the anticipated drawdown in Afghanistan and
the available modes of transportation, neither of which can be absorbed
within the baseline funding levels.
19. Senator Ayotte. General Paxton, how does the uncertainty
regarding our troop presence post-2014 affect the Marine Corps'
retrograde plan?
General Paxton. We are currently executing our drawdown plan for
Afghanistan that will see us meeting all our scheduled operational
goals. However, we remain flexible to adequately respond to any
required contingencies or last minute strategic developments as needed,
or until our official end of mission.
20. Senator Ayotte. General Paxton, how much OCO funding do you
estimate will be needed for reset after the Afghan retrograde is
complete?
General Paxton. The Marine Corps has experienced over a decade of
sustained combat operations with much of its ground equipment flowing
directly from OIF to OEF, resulting in an inability to reset until now.
The Marine Corps has undertaken an aggressive depot maintenance reset
strategy to prioritize the repair and redeployment of ground combat
equipment to the Operating Forces as quickly as possible. As a result,
approximately 77 percent of the Marine Corps' total OEF reset
requirement has retrograded from theater, however, only approximately
40 percent has been reset.
Last year, our reset liability was estimated at less than $3.2
billion. The Marine Corps reviews and refines its life-cycle
sustainment strategies and depot maintenance requirements for its
ground equipment annually through a deliberate requirements
determination process. Through this process, we estimate our remaining
reset liability for fiscal year 2015 and beyond to be approximately
$1.3 billion, which cannot be absorbed within our baseline funding
levels. As such, the Marine Corps will continue to require OCO for the
next several years to complete our reset requirements.
21. Senator Ayotte. General Paxton, why is this funding necessary?
General Paxton. The Marine Corps has experienced over a decade of
sustained combat operations with much of its ground equipment flowing
directly from OIF to OEF, resulting in an inability to reset until now.
The Marine Corps has undertaken an aggressive depot maintenance reset
strategy to prioritize the repair and redeployment of ground combat
equipment to the Operating Forces as quickly as possible. As a result,
approximately 77 percent of the Marine Corps' total OEF reset
requirement has retrograded from theater, however, only approximately
40 percent has been reset. As such, the Marine Corps will continue to
require OCO for the next several years to complete our reset
requirements.
22. Senator Ayotte. General Campbell, why does the Army need
continued OCO funding years after the last piece of equipment returns
from Afghanistan?
General Campbell. The Army needs OCO funding for 3 years after the
last piece of equipment returns from Afghanistan so that it can fully
execute the equipment reset program. Army equipment reset is defined as
a set of actions to restore equipment to a desired level of combat
capability commensurate with a unit's future mission. The equipment
reset program is directly tied to equipment readiness. In fiscal year
2013, the Army reset approximately 87,000 pieces of equipment at the
sustainment (depot) level and over 292,000 pieces of equipment (e.g.,
small arms; night vision goggles) at the unit level. Support for reset
has allowed the Army to sustain readiness at over 90 percent for ground
and 75 percent for aviation systems in theater.
Reset funding must be spread over the additional 3-year period
because of the factors that influence reset production. These factors
include: the volume of equipment currently undergoing reset; the pace
of equipment retrograde from theater; the available capacity within the
industrial base; and the repair cycle times of major systems. For
example, due to the previously mentioned factors, the Army cannot
immediately and simultaneously reset all of our returning AH-64
Apaches. Each AH-64 Apache takes approximately 27 months to reset, our
longest repair cycle time.
It is important to note that much of the equipment deployed in
Afghanistan today is the most modern and capable equipment the Army
employs. It is fiscally and operationally prudent for the Army to
retrograde and reset that equipment to fill shortages, increase
equipment on-hand, and help meet the Army's future equipment needs. If
fully funded, we project that our retrograde and reset efforts will
improve Total Army Readiness equipment on-hand from approximately 88
percent to approximately 92 percent across the Active, Army National
Guard, and Reserve Forces. Without reset, we risk access to the full
capabilities of that equipment.
23. Senator Ayotte. General Campbell, what will be the impact on
the Army's readiness if Congress does not provide at least 3 years of
OCO funding for reset?
General Campbell. If Congress does not provide at least 3 years of
OCO funding for reset, some of the Army's most modern and capable
equipment that was used in Afghanistan will not be reset, thereby
negatively impacting equipment serviceability and availability, and our
readiness.
Reset funding is critical to reversing the effects of combat stress
on equipment and has been instrumental in sustaining readiness at over
90 percent for ground and 75 percent for aviation systems. Resetting
the remaining equipment in Afghanistan will improve Total Army
Readiness of equipment on-hand from approximately 88 percent to 92
percent.
Reset funding must be spread over a 3-year period to align with
available industrial base capacity and flow of equipment retrograde.
These factors include: the volume of equipment currently undergoing
reset; the pace of equipment retrograde from theater; the available
capacity within the industrial base; and the repair cycle times of
major systems. For example, due to the previously mentioned factors,
the Army cannot immediately and simultaneously reset all of our
returning AH-64 Apaches. Each AH-64 Apache takes approximately 27
months to reset, our longest repair cycle time.
24. Senator Ayotte. General Campbell, how has the uncertainty
regarding our post-2014 troop levels affected the Army's retrograde
plan?
General Campbell. The base force posture plan for the theater
articulates a responsible drawdown of forces. This plan transitions the
theater over time and has been critical in setting the conditions for
the train, advise, and assist mission being executed in support of
Afghan National Security Forces. From an Army perspective, we are
taking advantage of the drawdown in Afghanistan by shipping equipment
from the theater to fill Service readiness requirements.
Although there is uncertainty, the theater force posture assessment
is that current redeployment and retrograde operations are progressing
on plan. However, the uncertainty is beginning to result in force
structure being retained in theater. This puts additional risk on
retrograde operations in the second half of 2014.
The risk to Second Destination Transportation (SDT) cost is minimal
as SDT is made up of sustainment costs (inbound) and retrograde
(outbound). If there is a zero option (e.g., an unscheduled and
immediate full redeployment of all personnel and equipment) sustainment
costs go down over time, while our retrograde transportation costs
increase due to leveraging multi-modal and direct air methods in order
to increase retrograde velocity.
Post-2014, the CENTCOM Material Retrograde Element is a critical
resource that will facilitate the responsible downsizing and drawdown
in Afghanistan. If not approved and extended past December 2014, we
assume risk with regards to the stewardship of resources and property
accountability.
modernization priorities
25. Senator Ayotte. General Campbell, General Paxton, General
Spencer, and Admiral Cullom, what are your Services' leading
modernization priorities?
General Campbell. First and foremost, the soldier and squad are the
centerpiece of Army equipment modernization, from which we build
outward by enabling them with the network and key equipment. This
principle is reflected in our top modernization programs:
1. Network (Warfighter Information Network-Tactical (WIN-T);
Family of Networked Tactical Radios (formerly the Joint Tactical Radio
System); Joint Battle Command-Platform; Distributed Common Ground
System-Army; Nett Warrior);
2. Armored Multi-Purpose Vehicle;
3. Paladin Integrated Management (PIM);
4. Joint Light Tactical Vehicle (JLTV);
5. Apache; and
6. Blackhawk.
During this period of fiscal constraints, we have accepted greater
risk in our modernization program and have had to delay many programs.
This is one reason the Army supports the President's proposal, the
Opportunity, Growth, and Security Initiative, that would provide an
additional $26 billion for defense programs in fiscal year 2015.
Because of reduced Army budgets, we will not transition four
programs to the acquisition phase, to include the Ground Combat Vehicle
and Armed Aerial Scout. Additionally, we will end 4 programs,
restructure 30 programs, and delay 50 programs. We have fully funded
our priority programs such as the Armored Multi-Purpose Wheeled
Vehicle, PIM, JLTV, Apache, and Blackhawk. The network also remains a
modernization priority. However, investments in the network are not
untouched by resource constraints and, as a result, we will delay
portions of the WIN-T Increment 3 and reduce investments in tactical
radio systems.
General Paxton. The Marine Corps has several critical modernization
priorities in the fiscal year 2015 budget. These priorities are
balanced between our ground and aviation programs to continue to
enhance the flexibility and capability of the MAGTF. Our key ground
programs are the Amphibious Combat Vehicle (ACV), JLTV, and
enhancements to our aging Assault Amphibious Vehicle (AAV) fleet. These
modernization efforts coupled with Navy investments in enhanced surface
connectors are key enablers of the Marine Corps ability to remain an
expeditionary force. Our aviation priorities are the F-35B, MV-22, and
CH-53K. The combination of capabilities that these aviation and ground
programs provide our Service, and our Nation, are critical to the way
that the Marine Corps envisions being employed into the 21st century.
General Spencer. One of the most critical judgments in building the
Air Force plan for 2015 and beyond was how to balance investment in our
current aging fleet against the need to buy equipment that will be
viable against future adversaries. Forced to make tough decisions, we
favored funding new capabilities (recapitalization) over upgrading
legacy equipment (modernization). We cannot afford to bandage old
airplanes as potential adversaries roll new ones off the assembly line.
For example, the backbone of our bomber and tanker fleets, the B-52 and
the KC-135, are from the Eisenhower era, and our fourth generation
fighters average 25 years of age. That is why our top three acquisition
priorities remain the KC-46A aerial tanker, the F-35A Joint Strike
Fighter (JSF), and the Long-Range Strike Bomber (LRS-B).
The KC-46A will begin to replace our aging tanker fleet in 2016,
but even when the program is complete in 2028, we will have replaced
less than half of the current tanker fleet and will still be flying
over 200 KC-135s. Similarly, our average bomber is 32 years old. We
need the range, speed, survivability, and punch that the LRS-B will
provide. Tankers are the lifeblood of our Joint Force's ability to
respond to crises and contingencies, and bombers are essential to
keeping our Air Force viable as a global force. In our fiscal year 2015
budget submission, we have fully funded these programs.
The F-35A is also essential to any future conflict with a high-end
adversary. The very clear bottom line is that a fourth generation
fighter cannot successfully compete with a fifth generation fighter in
combat, nor can it survive and operate inside the advanced, integrated
air defenses that some countries have today, and many more will have in
the future. To defeat those networks, we need the capabilities the F-
35A will bring. In response to tightening fiscal constraints, the Air
Force has deferred four F-35As in the Future Years Defense Program
(FYDP). If the President's projected top-line enhancements are not
realized, and future appropriations are set at sequestration-levels,
the Air Force may lose up to 19 total F-35As within the FYDP.
Moving forward, we cannot afford to mortgage the future of our Air
Force and the defense of our Nation. Recapitalization is not optional--
it is required to execute our core missions against a high-end threat
for decades to come.
Admiral Cullom. In parallel with recapitalization, the fiscal year
2015 budget request continues modernization of in-service platforms.
Key priorities include:
Flights I and II of the Arleigh Burke-class DDG mid-
life upgrades. To increase operational availability and BMD
capacity sooner, we will modernize Flight IIAs beginning in
fiscal year 2017 rather than pursuing an ``oldest-first'' plan.
Whidbey Island-class and Wasp-class LHD mid-life
updates. Nine of 12 LSD mid-lifes are complete. Mid-lifes to
the Wasp-class will complete by fiscal year 2022. The eighth
LHD, USS Makin Island, will be addressed in a subsequent budget
submission.
Phased modernization of 11 Ticonderoga-class cruisers
(CG). To preserve balance and avoid a permanent loss of force
structure and requisite ``ship years,'' modernization of these
11 will be timed to align with the retirements of remaining CGs
such that updated ships replace those retiring on a one-for-one
basis.
Phased modernization of Whidbey Island-class LSDs. Two
of the three always available for tasking.
Service Life Extension Program (SLEP) for the legacy
F/A-18A-D Hornet. With SLEP modifications, this will extend
some aircraft to 10,000 lifetime flight hours, almost 16 years
beyond their originally-designed life.
26. Senator Ayotte. General Campbell, General Paxton, General
Spencer, and Admiral Cullom, does the fiscal year 2015 budget request
adequately resource these priorities?
General Campbell. During this period of fiscal constraints we have
accepted greater risk in our modernization program and have had to
delay many programs. This is one reason the Army supports the
President's proposal for the Opportunity, Growth, and Security
Initiative, that would provide an additional $26 billion for defense
programs in fiscal year 2015.
Because of reduced Army budgets, we will not transition four
programs to the acquisition phase, to include the Ground Combat Vehicle
and Armed Aerial Scout. Additionally, we will end 4 programs,
restructure 30 programs, and delay 50 programs. We have fully funded
our priority programs such as the Armored Multi-Purpose Wheeled
Vehicle, PIM, JLTV, Apache, and Blackhawk. The network also remains a
modernization priority. However, investments in the network are not
untouched by resource constraints and, as a result, we will delay
portions of the WIN-T Increment 3 and reduce investments in tactical
radio systems.
General Paxton. The fiscal year 2015 budget adequately funds the
Marine Corps modernization priorities (ACV, JLTV, AAV, F-35B, MV-22,
and CH-53K). However, to do so we have forgone some important
investments in order to preserve near-term readiness. With the smallest
modernization budget in DOD, the Marine Corps continually seeks to
leverage the investments of other Services, carefully meting out our
modernization resources to those investment areas which are the most
fiscally prudent and those which promise the most operationally
effective payoffs.
Innovative warfighting approaches and can-do leadership are
hallmarks of the Corps, but these cannot overcome the vulnerabilities
created by our rapidly aging fleet of vehicles, systems, and aircraft.
Long-term shortfalls in modernization will have a detrimental impact on
readiness and, at some point, sustaining fleets of severely worn
vehicles becomes inefficient and no longer cost-effective. This
inefficiency reduces available modernization resources from an already
small account, degrading our ability to effectively operate in today's
complex security environment.
General Spencer. In fiscal year 2015, the Air Force must be able to
execute national defense requirements while also recovering from the
impacts of fiscal year 2013 sequestration, adjusting to the fiscal year
2014 Bipartisan Budget Act (BBA) funding levels, and the uncertainty in
the future years planned budget top line for fiscal year 2016 and
beyond. We are working hard to make the right choices that maximize
each taxpayers' dollars and ensure we can meet national security needs
today and in the future.
Admiral Cullom. The fiscal year 2015 budget request funds the
Navy's highest priority modernization requirements. However, delivery
of some capabilities to the Fleet is slowed--particularly air and
missile defense--in balancing current and future readiness funding.
This increases risk in our ability to assure access against a
technologically advanced adversary, compared to the President's budget
for fiscal year 2014. In addition, the readiness outcomes of this
budget request anticipate the ability to redistribute manpower and
reapply near-term savings from the CG and LSD modernization plans.
27. Senator Ayotte. General Campbell, General Paxton, General
Spencer, and Admiral Cullom, how will sequestration in fiscal year 2016
affect your modernization priorities?
General Campbell. The BCA spending limits will impact the Army's
ability to meet our modernization priorities. While our strategic
objectives will remain the same, our ability to meet them will be
severely challenged. Difficult decisions on funding would likely result
in adverse impacts to all weapon system and modernization programs. Any
stoppage or delay of a program lengthens acquisition timelines and
increases cost over the long-term as well as delaying the capability
from arriving to the soldier. Some programs that support key
warfighting capabilities have already endured significant reductions.
Further reductions in these programs could prove to be terminal. The
impacts of previous reductions were offset to some degree by using
unobligated funds. As these and other funds become even more limited
and if further reductions are required, the risk to our modernization
priorities becomes greater. The resulting impact to warfighting
capabilities will diminish the tactical advantage of our soldiers on
the battlefield.
General Paxton. A fully sequestered budget in fiscal year 2016 will
cause the Marine Corps to protect only the ACV and F-35 programs at a
greater cost to other modernization and infrastructure programs. As the
Nation's force in readiness, I must and will protect near-term
readiness. Under sequestration, we will begin to see impacts on
acquisition programs, large and small. For example the CH-53K program
could see a delay in Initial Operating Capability by 1 year and 10
aircraft deferred outside the FYDP.
General Spencer. A sequestration-level budget would result in a
very different Air Force. We are aggressively seeking innovative cost
savings and more efficient and effective ways of accomplishing our
missions, however these initiatives will not be sufficient to reach
sequestration funding levels. To pay the sequestration-level bill, we
will have to sacrifice current tanker and intelligence, surveillance,
and reconnaissance capacity by divesting the KC-10 and the RQ-4 Block
40 fleets, all of our major investment programs will be at risk, and
our readiness recovery will be significantly slowed due to required
cuts in WSS and ranges.
Admiral Cullom. Sequestration-level funding in fiscal year 2016 and
out would have a significant impact on the size of the Navy we could
affordably sustain and would degrade our ability to modernize the
Fleet.
In the President's budget for fiscal year 2015, slowed
modernization results in increased risk to our ability to meet the DSG,
particularly when faced with a technologically advanced adversary.
Sequestration levels of funding in fiscal year 2016 and beyond would
require us to look at further reductions to recapitalization and
modernization in order to maintain some balance regarding readiness of
our forces. This risks having too few ships and aircraft to execute
certain missions in the future or falling behind competitors in terms
of capability and relevance.
world wide threats
28. Senator Ayotte. General Campbell, General Paxton, General
Spencer, and Admiral Cullom, during our hearing earlier this year on
World Wide Threats, Director of National Intelligence Clapper testified
that over his past 50 years in intelligence, he has ``not experienced a
time when we've been beset by more crises and threats around the
globe.'' How would you assess the readiness of the forces to respond to
the full range of diverse threats?
General Campbell. As a result of operations over the past 12 years,
the Army has focused on counterinsurgency operations at the expense of
Direct Action/Unified Land Operations (DA/ULO). The Army began to
rebuild DA/ULO readiness before sequestration, but funding shortages in
fiscal year 2013 stopped it. The increased funding provided to mitigate
the effects of the BCA has slowed the decline in DA/ULO readiness;
however, the Army still lacks the ability to fully generate the
required trained and ready capabilities necessary to achieve the
``Guidance for the Employment of the Force'' end states. The most
demanding combatant commander plans currently require more units than
the Army has immediately ready and available, requiring us to deploy
units that are less capable or that would have to be re-directed from
other steady state missions.
The Army recognizes the need to increase DA/ULO readiness across
the force to respond to the full range of military operations. In 2012,
the Army initiated a plan to aggressively begin building DA/ULO
readiness with multiple combat training center rotations focused on
full spectrum conflict. Unfortunately, because of the impact of the
BCA, the Army cancelled nearly 50 percent of those fiscal year 2013
rotations, and with increased emergent demand for Army forces across
the combatant commands, this has delayed the rate at which we can build
DA/ULO readiness across the force. The Army continues to aggressively
focus on building full spectrum readiness; however, it will take both
time and long-term, consistent funding to return the Army to a
recovering glide path.
General Paxton. The Marine Corps is committed to remaining the
Nation's force-in-readiness, a force capable of responding to a crisis
anywhere around the globe at a moment's notice. The Marine Corps can
sustain its current operational requirements on an enduring basis;
however, the readiness of the non-deployed forces to provide a timely
response to unexpected crises or a large-scale contingency needs to be
improved through our reconstitution and reset efforts. The Marine Corps
has a strategic trajectory to reconstitute to a ready force to meet the
DSG for steady state requirements and crisis response contingencies.
Our reconstitution efforts will restore and upgrade our combat
capability to ensure our units are ready for operations across the
range of military operations. In the face of fiscal uncertainty, we are
protecting near-term readiness at the expense of our infrastructure
sustainment and modernization investments, which will be negatively
impacted over the long-term.
Entering into the Quadrennial Defense Review (QDR), we came to the
conclusion that, under the threat of continued sequestration or some
variant, an Active-Duty Force of 175,000 marines is what our Nation can
afford, along the continued cuts to modernization and infrastructure
accounts. The budget-driven, redesigned 175,000 force is capable of
meeting steady state requirements, crisis response activities, and
deterring or defeating aggression in one region. However, the 175,000
force assumes risk at the high end of the range of military operations
for a major contingency operation (MCO) and for long-term stability
operations. It incurs a 1:2 deployment to dwell ratio and in the event
of a MCO, the Marine Corps would be ``all in''; there would not be a
rotation of forces.
General Spencer. In order to meet the requirements of the 2012 DSG,
most Air Force units must be able to respond in hours or days, not
weeks and months. Thus, the Air Force must maintain a high level of
readiness across the Total Force.
Over the last 12 years, Air Force operations have been focused on
the counterinsurgency/counterterrorism fight in Iraq and Afghanistan.
As these operations take place in a permissive air threat environment,
the full-spectrum readiness of our air superiority and global precision
attack forces to fight in contested and highly-contested environments
has eroded. Continuous deployments with minimal home station dwell time
for training and regeneration has particularly impacted high-demand
assets such as: command and control; intelligence, surveillance, and
reconnaissance; personnel recovery; Special Operations Forces; and the
ability of these Air Force communities to integrate and exercise with
the Joint Force and our foreign partners. As Director Clapper
suggested, we do not anticipate that deployment rates will appreciably
decrease in the post-Afghanistan environment, which will continue to
stress readiness and delay readiness recovery.
In addition to the impact of high deployment rates in permissive
environments, sequestration in fiscal year 2013 further degraded our
readiness. We stood down or curtailed flying in over 30 combat and
training flying squadrons. We returned to flying in July 2013 after a
3-month stand-down, but half of these units still have not recovered to
their pre-sequester (already low) readiness levels.
Overall, our readiness is not what it needs to be, and it must
improve. Aided by the NDAA for Fiscal Year 2014 and the BBA, we have
increased key readiness accounts, such as flying hours, and we expect
to see improvement. However, given the long road to recovery and
anticipated persistent high deployment rates, we expect full recovery
to take up to 10 years.
Admiral Cullom. Navy forces forward stationed or rotationally
deployed are trained and certified as ready to perform to the full
spectrum of their designed mission capabilities. In some cases,
operational demand might preclude time to train in a particular mission
set for a specific unit. When this occurs, the decision to do so is
balanced against risk in anticipated deployed missions and properly
documented for the receiving combatant commander.
Navy capacity to surge additional ready forces for contingency
operations has been degraded by a decade of high-tempo operations,
exacerbated by budget sequestration in fiscal year 2013. This requires
both time and funding to improve, but the Navy's fiscal year 2015
budget request across the FYDP provides a path to deliver sustainable
presence and appropriate contingency operations capacity. A return to
sequestration funding levels in fiscal year 2016 and beyond will
preclude that outcome.
Readiness to respond to developing threats also requires delivery
of new platforms and capabilities, continuing modernization of existing
platforms, and procurement of necessary ordnance. To sustain current
readiness within current funding levels, Navy is taking some risk in
each of these categories, leading to increased risk in two mission
areas of the DSG, particularly against a technologically-advanced
adversary.
29. Senator Ayotte. General Campbell, General Paxton, General
Spencer, and Admiral Cullom, what would you consider to be your
Services' greatest capability gaps?
General Campbell. The Army's critical capability gaps are the
ability to rapidly detect threats and disseminate information, the
ability to survive and maneuver in any operational environment, and the
ability to defeat rapidly advancing aerial threats and precision fires
capabilities.
The centerpiece of all modernization efforts remains the soldier.
The Army has two modernization priorities to enable the soldier to
rapidly detect threats and disseminate information: The WIN-T will
``enable mission command'' while the Distributed Common Ground System-
Army (DCGS-A) will ``enable multi-intelligence source analysis.'' To
permit the soldier to operate in any operational environment, the Army
has established as a priority the Armored Multi-Purpose Vehicle (AMPV),
which will fill a critical capability gap in the available vehicle
inventory for protected mounted maneuver. Finally, to protect the
soldier and the systems that support the soldier, the Army has
established a priority for enhanced aerial threat protection, which
will use systems such as Counter Rocket Artillery and Mortar (CRAM),
Terminal High Altitude Area Defense (THAAD), and Patriot.
The development of these capabilities has increased the average
soldier load, creating the need to develop more efficient energy
generation and power storage capabilities, lighter protective armor,
and fully integrated unmanned ground systems.
Finally, providing standoff detection, characterization, and timely
alert of chemical, biological, and radiological hazards to maneuvering
forces continues as a priority science and technology (S&T) focus.
General Paxton. Our greatest capability gaps are centered around
our ability to move forces ashore during amphibious operations under
tactical scenarios that require greater standoff distances of 12 to 25
miles from ship-to-shore based on the threat. Due to the cancellation
of the Expeditionary Fighting Vehicle, the Corps is struggling to
maintain our current capability, which lacks the required capability to
achieve stand-off distance, while we simultaneously seek a suitable
replacement that can achieve the required distances and also execute
its mission once ashore.
Also, due to the sun-downing of the EA-6B airborne electronic
warfare capability in 2019, the Corps may experience a void in all the
required electronic warfare capabilities until new systems come on line
and a reshuffling of electronic warfare personnel are complete. These
efforts will need to be complete in order to maintain an air/ground
electronic warfare capability suited to expeditionary, joint, or
combined operations across the Marine Corps.
General Spencer. The ability to penetrate, operate, hold targets at
risk, and persist in highly contested environments is our Service's
greatest challenge. The long-term Air Force commitment is to maintain
the world's best air force and sustain the capability to operate
wherever and whenever the Nation requires, including highly contested
airspace. Near-term improvements, acquisitions, and funding critical
readiness programs such as flying hours, WSS, and training ranges will
bolster the Air Force's capability to support our Joint Forces.
Specifically, the Air Force must continue to move forward with force
modernization of key weapon systems and inventory fulfillment of
preferred munitions.
Our legacy, or fourth-generation fighter fleet has secured more
than 20 years of an air superiority advantage, but may lose its ability
to operate as effectively against adversary anti-access/area-denial
(A2/AD) strategies. Air superiority, a prerequisite to modern joint
warfare, and long-range strike capabilities cannot be assumed. New,
more-capable threats and corresponding investment needs are not
theoretical future possibilities. They are here, now. Significant
investment in fifth-generation platforms and preferred munitions is
essential to address these threats. The future success of the Nation's
military and the joint team depends on modernizing our Air Force and
keeping it ready to fight. Weapon systems like the F-22, with
contributions from the F-35, are what will carry America's Air Force
forward to continue to provide air superiority. The LRS-B is a key
piece of the development of our long-range strike family of systems,
the capabilities of which are critical to our ability to carry out our
global strike mission. There are also areas of research and development
which have the potential to sustain and extend America's edge in
aerospace technology, which will be delayed or not fielded given
current resource constraints. Potential examples include ballistic
missile defense and advanced jet engine development.
Admiral Cullom. One of the most important characteristics of our
naval force is that we operate forward where it matters. Some of our
most significant capability gaps are where potential adversaries
develop or invest in A2/AD systems and strategies. The gaps that the
Navy faces from A2/AD threats include:
Mines
Small boat attacks
Anti-ship missiles
Undersea threats from adversary submarines and
torpedoes
Air threats from advanced aircraft and aircraft
targeting systems
Cyber attack capabilities
Denying access to coastal areas and port facilities
The Navy's fiscal year 2015 budget submission prioritizes
developing future capabilities in the above domains to address these
capability gaps. Our development of future capability is bench-marked
to support our rebalance toward the Asia-Pacific region and is guided
in large part by the Air-Sea Battle concept, which implements the Joint
Operational Access Concept. Both these concepts are designed to assure
U.S. forces freedom of action and access to support deterrence,
assurance of our allies and partners, and the ability to respond to
crises. Our investments (detailed in question #30) focus on assuring
access in each domain, often by exploiting the asymmetric capability
advantages of U.S. forces across domains.
30. Senator Ayotte. General Campbell, General Paxton, General
Spencer, and Admiral Cullom, what funding is included in the fiscal
year 2015 budget request to address those capability gaps?
General Campbell. To address the Army's key capability gaps, the
Army is bringing both materiel and non-materiel solutions to the table.
As in Iraq and Afghanistan, we are continuing to bring asymmetric
capabilities in the Army inventory through the rapid and deliberate
introduction of new technologies and strategies. In this vein, the Army
has programmed over $250 million in the fiscal year 2015 budget request
to support our top S&T priority--detecting and defeating IEDs. We are
currently bringing many other selected capabilities, called non-
standard equipment, into program of record status and keeping those key
capabilities present in the force until those programs of record come
on line. The Army will only invest in right capabilities and in the
right quantities. Other emerging threats that do not have currently
achievable technological responses are being addressed through other
S&T efforts. The Army has continually protected this funding, amounting
to approximately $60 million in fiscal year 2015, even with the overall
topline reductions.
Those programs that directly relate to the individual soldier's
lethality, survivability, and connectivity have been prioritized with
the Army requesting over $620 million for fiscal year 2015. Maintaining
the best body armor, improving weapon systems, and networking tactical
units are all funded in the Army's program. Our top priority materiel
programs include the AMPV ($90 million in fiscal year 2015) as well as
enhancing our network operations via the WIN-T ($1.79 billion in fiscal
year 2015) and the DCGS-A ($179.7 million in fiscal year 2015)
programs. Furthermore, existing systems such as unmanned ground systems
are being retained and improved in ongoing programs of record and
through the maintenance of rapidly procured non-standard equipment.
Providing active defense against rocket/mortar fire is being
accomplished with over $40 million programmed for continual development
and improvement of the CRAM system. Continued investment in THAAD and
Patriot, with $920 million programmed in fiscal year 2015, also
contributes to countering increased adversary capabilities.
From the perspective of non-materiel solutions, leader training and
development, to include Department of the Army civilian education
programs, are essential to maintaining the vitality of our Army and we
propose funding of nearly $650 million in fiscal year 2015 to support
these programs. In addition to this leader specific training, we've
funded our domestic Combat Training Centers to support the global force
requirement as well as programming $5 billion in our ground operational
tempo accounts primarily focused on improving unit level training and
readiness targets. Another example of our investment in non-materiel is
the Army's provision of regionally aligned forces to combatant
commanders to ensure the Joint Force ability to project power in
contested environments. We've set aside over $500 million in fiscal
year 2015 for these Phase 0 cooperative security and partnership
building activities to play a significant role in shaping the
operational environment, strengthening relationships, enhancing partner
capacities, enhancing leader development, and ultimately assuring
access for friendly forces. These efforts help enable the Army to
integrate, operate, and project power as part of the Joint Force and
conduct and sustain decisive operations, in austere and contested
operational environments.
General Paxton. We have preserved sufficient funding to continue
incremental development of the replacement for our aging AAV
replacement the ACV. The Marine Corps is also partnering with the Navy
to explore options for improved ship-to-shore connectors and alternate
forms of lift which will greatly enhance our ability to conduct
expeditionary operations from greater stand-off distances.
We are also exploring unmanned aerial vehicle options to replace
the EA-6B's electronic warfare capabilities while also leveraging the
inherent capabilities of the F-35.
General Spencer. The Air Force fiscal year 2015 budget request is
strategy-based, fiscally informed, and sets a course toward full-
spectrum readiness of the force to support the defense strategy.
Furthermore, the fiscal year 2015 request addresses modernization
challenges and keeps the Air Force top three acquisition priorities
(KC-46A aerial tanker, F-35A JSF, and LRS-B) on track. These are
critical programs to ensure the Air Force can operate and win in highly
contested environments worldwide.
Specifically, the fiscal year 2015 research, development, test, and
evaluation budget request includes approximately $800 million for the
KC-46A and $600 million to support development of the F-35A JSF. It
also funds approximately $900 million toward efforts to develop a new
long-range, nuclear capable, penetrating bomber. The fiscal year 2015
procurement portfolio delivers both immediate and future capabilities
through investments across four specific appropriations: aircraft,
missile, ammunition, and other procurement. In fiscal year 2015, the
Air Force request includes $1.5 billion for procurement of 7 KC-46As
and just under $4.3 billion to procure 26 F-35As, including spares,
simulators, and modifications.
The priorities articulated and funded in the fiscal year 2015
budget request balance the Air Force's requirement to support the
current defense strategy in today's fiscally constrained environment.
We will continue making tough trade-offs to preserve our core
capabilities and deliver on our commitment to national defense.
Admiral Cullom. The fiscal year 2015 budget submission improves
capabilities in our ability to counter A2/AD threats and address
vulnerabilities in our capabilities and provides our forces with proven
technologies that limit the adversary's ability to defeat our ability
to project power.
Mine threat: Countering potential enemy ability to use
mines to deny access to naval forces continues to be a
significant emphasis in the near-term. The Navy budget request
funds Littoral Combat Ship Mine Countermeasure (MCM) Mission
Package development to include MH-60S helicopter Airborne Laser
Mine Detection System and Airborne Mine Neutralization System
systems, MCM hull-mounted sonar, and accelerates fielding of
the MK-18 UUV and Seafox mine neutralization system.
Small boat and anti-ship missile threat: Small boats
with explosives and anti-ship missiles remain a potential
threat to our forces in the constrained waters of the Arabian
Gulf. The Navy budget request funds integration of Advanced
Precision Kill Weapon system into our MH-60R helicopters to
counter small boats with explosives or anti-ship missiles. The
Laser Weapons system is also being tested in the Arabian Gulf
onboard USS Ponce and we are investing in development and
testing of near-term modifications to existing weapons on our
larger surface combatants.
Undersea threat: Navy's dominance of the undersea
domain provides U.S. Forces their most significant asymmetric
advantage. Our investments continue to improve our capability
to deny the undersea to adversaries, while exploiting it for
our own operations. The Navy budget request sustains and plans
production of proven Anti-Submarine Warfare platforms including
MH-60R Seahawk helicopters, P-8A Poseidon maritime patrol
aircraft, DDG-51, and Virginia-class nuclear submarines. The
request also funds capabilities such as advanced airborne
sensors for the P-8A Poseidon, accelerates torpedo defense
systems for large surface combatants and aircraft carriers,
improves Navy's Undersea Surveillance system, continues
development of the Large Displacement Unmanned Underwater
Vehicles, and additional payloads for existing submarines. We
also continue to practice and refine warfighting in war games
and real-world exercises including Rim of the Pacific which
practices high-end ballistic missile defense, anti-surface
warfare, and anti-submarine warfare in simulations and live-
fire missile and torpedo events.
Air threat: Air power is a key component of the naval
force, and improving the capability of our Carrier Strike
Groups to project power despite threats to access closes a key
gap. The Navy budget request funds the continued development
and low rate production of the new F-35C Lighting II and
capability improvements such as infrared sensors and weapons
that provide air-to-air capability that are not susceptible to
radio frequency jamming. The request also funds improvements to
further network sensors and weapons in the Navy Integrated Fire
Control Counter Air capability that uses a network between
AEGIS ships and the E-2D aircraft to seamlessly share threat
information. Lastly, the budget funds the development and
testing of the Unmanned Combat Air System Demonstrator.
Electromagnetic Spectrum and Cyber: Future conflicts
will be fought and won in the electromagnetic spectrum and
cyberspace, which are converging to become one continuous
environment. This environment is becoming increasingly
important to defeating threats to access, since through it we
can disrupt adversary sensors, command and control, and weapons
homing. The Navy budget request includes the Next Generation
Jammer, Surface Electronic Warfare Improvement Program (SEWIP)
procurement, accelerates research and development on SEWIP
Block 3, fields new deployable decoys to defeat anti-ship
missiles, and continues procurement of improvements to Navy's
Ships Signal Exploitation Equipment to provide protection from
electronic attack.
Amphibious warfare: The flexibility to come ashore in
unexpected areas or from less predictable directions is an
asymmetric advantage against adversary anti-access efforts. The
Navy budget requests training funds to continue integrated
operations with the Marine Corps; construction of an 11th ``big
deck'' amphibious assault ship (LHA-8), which will bring
enhanced aviation capacity and a traditional well deck to
expand its ability to support the full range of amphibious
operations; improvements to extend the life of USS Peleliu
through fiscal year 2015; and sustaining our ship-to-shore
connector capacity through life extensions and
recapitalization.
31. Senator Ayotte. General Campbell, General Paxton, General
Spencer, and Admiral Cullom, what are the risks if we continue to
consume readiness at the rate you project, without providing the
funding needed to restore it?
General Campbell. To meet contingency plan timelines developed by
the combatant commands, the Army must provide forces that are ready and
capable of immediately deploying for the full range of military
operations.
If we continue to consume readiness at projected rates without
funding to restore it, we will incur the following risks: (1) less
flexibility in the employment of Army forces to meet emergent crises;
(2) the inability to provide the required amount of Army forces on time
to meet major contingencies; and (3) increased casualties for a major
contingency due to the employment of less-ready forces.
General Paxton. The risk is that sustained sequestration would make
the National Defense Strategy unfeasible. A sequester-level budget does
not provide a joint force large enough, ready enough, or modern enough
to meet strategic needs. It would begin making the Marine Corps less
ready in 2017 and beyond. The cost could be in terms of lives.
General Spencer. The reality of the Air Force budget is that
without sufficient readiness funding, we assume greater risk across the
full range of military operations required to support the defense
strategy. Current fiscal constraints pose difficult choices between our
strategy-based modernization/acquisition programs and the need to
simultaneously address our near- and long-term full-spectrum readiness
shortfalls. Without adequate readiness funding, the Air Force cannot
maintain a ready force or even begin reversing our long, downward
readiness trend, which we are currently addressing in fiscal years 2014
to 2015 under the funding provided by the BBA.
The return of BCA funding levels would significantly impact our
ability to adequately resource WSS, depot maintenance, training ranges,
preferred munitions, and large-force exercises. If BCA funding levels
return, readiness will decline across all Air Force core missions and
we will not be able to meet our 2023 readiness goals.
Under BCA funding levels, the Air Force will continue to meet
rotational and combatant commander demand and maintain readiness for
our units in Korea, but will be hard-pressed to do anything above this
with ready forces. Depending on the outcome of future BCA-driven
planning and programming tradeoffs, our units may have to fly at
reduced training rates and the Air Force may again be forced to stand
down units similar to actions taken in fiscal year 2013. This will
result in fewer ready forces available to support the defense strategy.
Admiral Cullom. Navy continues to prioritize near- to mid-term
readiness at the expense of new procurement, modernization, and
ordnance. Driven by the uncertain fiscal environment, this is not a
cost-effective or sustainable position over the long-term. The fiscal
year 2015 budget submission provides a path to properly balance current
and future readiness to meet the mission requirements of the DSG with
some increased risk compared to the fiscal year 2014 request. We will
continue to fund readiness of our forward stationed and rotationally
deploying units. Without the requested funding across the FYDP,
however, the result will be a smaller and less capable Navy that is
unable to meet some DSG primary mission areas.
32. Senator Ayotte. General Campbell, General Paxton, General
Spencer, and Admiral Cullom, is this what General Dempsey refers to
when he says we could be on a path where the ``force is so degraded and
so unready'' that it would be ``immoral to use the force''?
General Campbell. While I cannot speak to precisely what General
Dempsey was referring, I can say that we all believe the American
people rightfully expect that if soldiers are sent into harm's way,
they are properly led, equipped, and trained to accomplish their
mission and return home safely. Realistic, challenging training is
necessary if our Army is to meet these obligations in the face of
committed adversaries.
The current security environment is complex and constantly
evolving. U.S. Forces, particularly land forces, must be able to
contend with both state and non-state actors across the range of
military operations. To succeed in this threat environment and protect
U.S. interests, Army forces train to conduct missions that range from
humanitarian assistance and disaster relief to high intensity combat-
mission sets that require different skills and competencies. Cuts in
readiness funding negatively impact our ability to quickly and
decisively respond to threats and challenges, which can ultimately
result in increased casualties, increased costs, and increased duration
of conflicts.
General Paxton. The risk is that sustained sequestration would make
the National Defense Strategy unfeasible. A sequester-level budget does
not provide a joint force large enough, ready enough, or modern enough
to meet strategic needs. It would begin making the Marine Corps less
ready in 2017 and beyond. The cost could be in terms of lives.
General Spencer. It is our title 10 responsibility and sworn duty
to provide airmen the required training, resources, and equipment so
that they can successfully accomplish their assigned missions with an
acceptable level of risk. However, for more than 20 years, Air Force
readiness has been on a downward trend and funding levels under the BCA
only serve to accelerate this decline. With recent sequestration-driven
cuts, our forces may not be sufficiently equipped, trained, and ready,
which increases risk to the force and risk in our ability to achieve
desired operational and strategic outcomes. The degree of risk depends
on a number of factors--such as the threat environment and our
strategic and operational objectives. Increased risk alters our--and
our adversary's--decision calculus, which can effectively limit
strategic options for the President and combatant commanders.
Ultimately, sequestration has forced us to budget for less than is
required to field sufficient ready forces that can operate across the
full spectrum of military operations.
Admiral Cullom. A return to sequestration-level funding in fiscal
year 2016 and beyond will result in increased risk in the readiness of
our nondeployed forces and reductions in future force structure/
modernization in order to fund readiness of our forward deployed forces
and those preparing to deploy. Nondeployed forces are those we call on
for additional contingency response and their readiness would further
degrade. It is important to recognize that this concern is about more
than just the immediate readiness of the force. It is also about the
long-term professional skills and leadership experience of our people.
Diminished capacity to conduct sustained operational training impacts
our most important advantage over any potential adversary--our highly-
trained and motivated sailors. Additionally, reductions in force
modernization incur long-term risks to Navy's ability to maintain
asymmetric technological advantages.
air force readiness backlog
33. Senator Ayotte. General Spencer, Air Force Secretary Deborah
Lee James testified before the House Armed Services Committee a couple
of weeks ago that under the existing Air Force budget plan, it will
take 10 years to return to full readiness. Is this 10-year plan built
to the President's budget and out-year funding that exceeds the BCA
caps?
General Spencer. Fiscal year 2015 budget request funding levels are
the minimum required to achieve Air Force readiness goals by 2023. The
reality of the Air Force budget is that without sufficient readiness
funding, we assume greater risk across the full range of military
operations required to support the defense strategy. Current fiscal
constraints pose difficult choices between our strategy-based
modernization/acquisition programs and the need to simultaneously
address our near- and long-term full-spectrum readiness shortfalls.
Without adequate readiness funding, the Air Force cannot maintain a
ready force or even begin reversing our long downward readiness trend,
which we are currently addressing in fiscal years 2014 to 2015 under
the funding provided by the BBA.
The return of BCA funding levels would significantly impact our
ability to adequately resource WSS, depot maintenance, training ranges,
preferred munitions, and large-force exercises. If BCA funding levels
return, readiness will decline across all Air Force core missions and
we will not be able to meet our 2023 readiness goals.
Under BCA funding levels, the Air Force will continue to meet
rotational and combatant commander demand and maintain readiness for
our units in Korea, but will be hard-pressed to do anything above this
with ready forces. Depending on the outcome of future BCA-driven
planning and programming tradeoffs, our units may have to fly at
reduced training rates and the Air Force may again be forced to stand
down front line combat units similar to actions taken in fiscal year
2013. This will result in fewer ready forces available to support the
defense strategy. Also, the Air Force will be forced to consider
additional force structure options, such as divesting the KC-10 and
Global Hawk Block 40 fleets and reducing by 10 the number of MQ-9
orbits. BCA-level funding means cuts to our readiness and
recapitalization/modernization accounts and will result in a less
capable, smaller force that's even less ready for tomorrow's fight.
34. Senator Ayotte. General Spencer, what will be the impact if
funding for the next 5 years is limited to caps?
General Spencer. The return of BCA funding levels would
significantly impact our ability to adequately resource WSS, depot
maintenance, training ranges, preferred munitions, and large-force
exercises. If BCA funding levels return, readiness will decline across
all Air Force core missions and we will not be able to meet our 2023
readiness goals.
Under BCA funding levels, the Air Force will continue to meet
rotational and combatant commander demand and maintain readiness for
our units in Korea, but will be hard-pressed to do anything above this
with ready forces. Depending on the outcome of future BCA-driven
planning and programming tradeoffs, our units may have to fly at
reduced training rates and the Air Force may again be forced to stand
down front line combat units similar to actions taken in fiscal year
2013. This will result in fewer ready forces available to support the
defense strategy.
35. Senator Ayotte. General Spencer, does your 10-year plan become
a much larger one?
General Spencer. The return of BCA funding levels will result in
further readiness erosion across all Air Force core missions. BCA
funding levels will force us to make significant tradeoffs and program
cuts among our readiness and recapitalization/modernization accounts,
preventing us from achieving our readiness goals at all, let alone by
2023.
Fiscal year 2015 budget request funding levels are the minimum
required to achieve Air Force readiness goals by 2023. Without adequate
readiness funding, the Air Force cannot maintain a ready force or even
begin reversing our long downward readiness trend, which we are
currently addressing in fiscal years 2014 to 2015 under the funding
provided by the BBA.
36. Senator Ayotte. General Spencer, if your 10-year plan becomes a
much larger one, to what extent?
General Spencer. The return of BCA funding levels will result in
further readiness erosion across all Air Force core missions. BCA
funding levels will force us to make significant tradeoffs and program
cuts among our readiness and recapitalization/modernization accounts,
preventing us from achieving our readiness goals at all, let alone by
2023.
The return of BCA funding levels would significantly impact our
ability to adequately resource WSS, depot maintenance, training ranges,
preferred munitions, and large-force exercises. Depending on the
outcome of future BCA-driven planning and programming tradeoffs, our
units may have to fly at reduced training rates and the Air Force may
again be forced to stand down front line combat units similar to
actions taken in fiscal year 2013. This will result in fewer ready
forces available to support the defense strategy. Also, the Air Force
will be forced to consider additional force structure options, such as
divesting the KC-10 and Global Hawk Block 40 fleets and reducing by 10
the number of MQ-9 orbits.
BCA-level funding means cuts to our readiness and recapitalization/
modernization accounts, resulting in fewer ready forces available to
support the defense strategy and will result in a less capable, smaller
force that's even less ready for tomorrow's fight.
37. Senator Ayotte. General Spencer, what would be the risks of
letting this happen?
General Spencer. BCA-level funding means cuts to our readiness and
recapitalization/modernization accounts, resulting in fewer ready
forces available to support the defense strategy and will result in a
less capable, smaller force that's even less ready for tomorrow's
fight.
Under BCA funding levels, the Air Force will continue to meet
rotational and combatant commander demand and maintain readiness for
our units in Korea, but will be hard-pressed to do anything above this
with ready forces. Depending on the outcome of future BCA-driven
planning and programming tradeoffs, our units may have to fly at
reduced training rates and the Air Force may again be forced to stand
down units similar to actions taken in fiscal year 2013. This will
result in fewer ready forces available to support the defense strategy.
army and air force depots
38. Senator Ayotte. General Campbell, the Army is projecting that
they will have $4.7 billion in depot workload carryover as you enter
fiscal year 2015. Does your fiscal year 2015 budget request allow you
to work down some of this carryover, and how will it impact your
ability to reset Army equipment?
General Campbell. The Army is projecting approximately $4.5 billion
to $4.7 billion in carryover from fiscal year 2014 to fiscal year 2015,
which is down from $5.0 billion in fiscal year 2013. Unplanned new
orders and operational uncertainties may prevent the Army from falling
within this range. However, the Army has sufficient capacity to
continue the downward trend in carryover. Planned fiscal years 2014 and
2015 workload will continue to meet unit readiness objectives for the
reset of Army equipment.
39. Senator Ayotte. General Spencer, what depot challenges is the
Air Force facing?
General Spencer. The greatest challenge facing the Air Force depots
is budget uncertainty. This impacts the workforce, suppliers, and
customers. The uncertainty drives risk in planning for the Air Force
depot customers due to schedule and availability of assets. The budget
uncertainty does not allow the depots to size to the workload early in
the planning process, resulting in staffing uncertainty, impacting
workforce stability, lowering workforce morale, and causing unnecessary
production variance, all of which drives reduced efficiency and
effectiveness at the depots. The budget uncertainty impacts all levels
of suppliers supporting the depots' workload, since Air Force cannot
provide suppliers with a firm forecast of the workload. Many of the
suppliers are small businesses, and the inability of the Air Force to
provide a firm demand forecast increases inefficiency and drives longer
delivery times of material in support of depot production. All of these
challenges will only be exacerbated if sequestration returns in fiscal
year 2016.
cyber readiness reporting
40. Senator Ayotte. General Campbell, General Paxton, General
Spencer, and Admiral Cullom, it has come to our attention that the
readiness reporting for U.S. Cyber Command (CYBERCOM) lacks meaningful
data to fully evaluate the current readiness of our national cyber
forces. With plans to build a total of over 6,000 cyber warriors, do
you agree that improved readiness metrics would benefit each of your
Services as well as CYBERCOM?
General Campbell. Improved readiness metrics will benefit both the
Army and CYBERCOM. CYBERCOM, in coordination with its Service
components, the Joint Staff, and the Services, is currently developing
such detailed metrics that will allow us to measure the unit readiness
of the various teams comprising the cyber mission force. Normal metrics
include the ability of a unit to conduct its mission essential tasks,
measures of personnel, equipment (on-hand and conditions), and
accomplishment of individual and collective training. CYBERCOM is well
along in developing a detailed training and readiness manual that
defines the mission essential tasks of the various team types as well
as the individual and collective training standards. The effort to
determine equipment requirements for the teams is lagging somewhat, but
that process is in development as well. We are confident that the
appropriate metrics will be put in place as we grow and mature this
force.
General Paxton. Our Service component to CYBERCOM, Marine Forces
Cyber Command, has already developed mission essential tasks with
detailed standards for the component headquarters that it reports in
Defense Readiness Reporting System-Marine Corps. CYBERCOM, in
coordination with its Service components, the Joint Staff, and the
Services, is in the process of developing detailed metrics which will
allow us to measure the readiness of the cyber mission force. Normal
metrics include a capability assessment against a defined mission
essential task list, and appropriate measures for personnel, equipment,
and training. CYBERCOM is well along in developing a detailed training
and readiness manual which defines the mission essential tasks of the
various team types as well as the individual and collective training
standards. Determining the equipment requirements for the teams is
lagging somewhat, but is in development as well. We will continue to
work with CYBERCOM to put appropriate readiness metrics in place as we
grow the cyber mission force.
General Spencer. CYBERCOM, in conjunction with the Services,
continues to develop and refine the Cyber Forces concept of operations
and the associated training and readiness manual. Our end state is a
Joint Mission Essential Task (JMET) list with measurable standards, and
we are working with CYBERCOM and the Services to reach that goal.
Toward that end-state, the Service cooperation and contributions
experienced so far are positive and progress is measureable. In the
meantime, the standards that we are using allow us to monitor and
report our cyber mission force build status and readiness reporting
based on the quantitative statistics and commander assessments. Those
measures include an assessment of:
(1) Personnel, Individual Training, and Collective Training
(2) Network Access and Equipment Access
(3) A Capability Assessment
Readiness metrics that are: (a) based on JMETs; (b) inherited
through the Defense Readiness Reporting System; and (c) quantifiable or
measurable in a red, yellow, or green status (90-100 = green, 75-89 =
yellow, etc.), will benefit both the Air Force and CYBERCOM.
Admiral Cullom. Improved readiness metrics would benefit both Navy
and CYBERCOM. Navy is working to enable Navy Cyber Units to assess
cyber-related mission essential tasks in the Defense Readiness
Reporting System-Navy. Upon completion, these unit assessments will be
imported by Defense Readiness Reporting System-Strategic and represent
Navy's input to CYBERCOM's strategic assessment of the overall
readiness of our national cyber forces.
air force munitions
41. Senator Ayotte. General Spencer, are you experiencing any
shortfalls in ammunition for training and operational requirements?
General Spencer. Yes, the Air Force procured fewer practice
munitions than we plan to expend to keep combat crews certified in
fiscal years 2014 and 2015. If funding is not increased, a training
munitions shortfall is expected to occur. Also, the Air Force faces
operational munitions inventory shortages, particularly in preferred
munitions. Correcting this remains a high priority for the Air Force,
but the current fiscal environment has forced us to make tough choices.
42. Senator Ayotte. General Spencer, do you have inventory
shortfalls in precision air-to-air weapons and air-to-ground weapons
such as Advanced Medium-Range Air-to-Air Missiles, Joint Direct Attack
Munitions (JDAM), and High-speed Anti-Radiation Missiles?
General Spencer. Yes, Air Force preferred munitions (AIM-120, AIM-
9X, JDAM, JASSM/ER, SDBI/II, Hellfire) inventories are short of
inventory objectives. Preferred munitions remain a high priority for
the Air Force; however, the current fiscal environment has forced us to
make tough choices.
force structure, end strength, and total force policy
43. Senator Ayotte. General Campbell, I understand regardless of
what happens with sequestration, the Army will be required to further
reduce end strength to 420,000 Active, 315,000 Army National Guard, and
185,000 Army Reserve. In terms of BCTs, at the fiscal year 2019 force
level, this translates to 24 Active BCTs and 22 Army National Guard
BCTs, down from the current 33 Active BCTs and 28 National Guard BCTs.
Would you please articulate the risk associated with reducing Army end
strength to these levels?
General Campbell. In line with the 2014 QDR, the Army is planning
to reduce the force to 450,000 Active component, 335,000 National
Guard, and 195,000 Reserve (a total of 980,000 soldiers) by fiscal year
2017. As the Chief of Staff of the Army has testified, a force at
980,000 is the absolute minimum force size to execute the DSG albeit at
high risk. Achieving an acceptable outcome with this force structure
requires a series of assumptions that history has generally proven to
be inaccurate; specifically, that any combat operation or contingency
is short and relatively bloodless, and that there are no requirements
for a long-term presence of U.S. forces.
If implemented, BCA spending caps can result in an Army end
strength of 920,000 in fiscal year 2019. At these force levels, the
Army would be unable to successfully conduct all components of a major
combat operation under terms acceptable to the United States. As a
result, the very real probability exists that U.S. Forces would be
unable to sustain conflict long enough to mobilize, train, and deploy
additional formations. This will lead to an outcome inconsistent with
DSG goals and objectives.
If the BCA continues, the end result will be an Army unable to
respond quickly or decisively enough to ensure an outcome consistent
with American goals and objectives. Further, any outcome that is
achieved will come at a much higher cost in terms of blood, treasure,
and time.
44. Senator Ayotte. General Campbell, what are the readiness
implications of driving the Army to these levels?
General Campbell. As the Army gets smaller, the readiness of
individual units (i.e. capabilities) is overshadowed by a shortfall in
the quantity of Army forces (i.e. capacities) needed to prosecute the
National Security Objectives specified in the Guidance for the
Employment of the Force. The assumption that a smaller Army with more
highly ready units can execute the National Military Strategy ignores
the historical trends that clearly depict the sustained consumption of
Army readiness that resulted from successive operational deployments to
Iraq, Afghanistan, and elsewhere in support of the combatant
commanders. For example, in 2013 the combined effects of over a decade
of operational requirements, the impacts from the BCA, and the rapid
downsizing of Army end strength, created conditions that led to the
Army only having two fully trained and ready BCTs able to execute
contingency operations with minimal risk.
At the proposed levels of force structure and end strength, the
Army would not have the capacity of ready units to provide decisive
land forces necessary to defeat an adversary while simultaneously
fulfilling required day-to-day National Military Strategy demands
within acceptable levels of risk.
45. Senator Ayotte. General Campbell, what can be done to mitigate
the impact on readiness?
General Campbell. There are three primary factors that impact Army
readiness: strategy; resourcing; and demand for Army forces. Clearly,
Army resourcing levels have been reduced, and are projected to shrink
to a lower level thru the FYDP. Without any change to the Army top line
resourcing levels, to preserve readiness we will either have to modify
our strategy or reduce the daily demand for Army forces.
46. Senator Ayotte. General Paxton, the Marine Corps will be forced
to reduce to an end strength of 175,000 marines and 21 battalions down
from 182,700 marines and 28 battalions. Would you please articulate the
risks and the readiness implications of drawing down the Marine Corps
to these levels?
General Paxton.
The current budget supports the 175,000 force at
moderate risk. At this force level, 20 of our 21 battalions
will be required for a major war, but those battalions would be
adequately trained and ready. We're all in until the war is
over. We will have very little left for crises that could occur
in other parts of the world.
A return to sequestration in fiscal year 2016 with a
175,000 force would equate to high risk. At this lowered
resource level, our units that deploy to combat would not be as
well-trained, and would be slower arriving. This means that it
will take longer to achieve our objectives, and the human cost
will be higher. This is what we mean when we say high risk.
A fully resourced 182,000 force is capable of
supporting the QDR at moderate risk with increases in capacity
and reduced operational tempo. While this force is not our
preferred force of 186,000, it does lower risk by creating
additional fully resourced units. This would require an
additional $3 billion over the FYDP above the President's
budget for fiscal year 2015.
Manning the Marine Corps at 182,000 under the
President's budget for fiscal year 2015 creates a danger of a
hollow force. This is the worst option for us. We'll have more
units than we can train and equip properly.
______
Questions Submitted by Senator Mike Lee
army aviation restructuring
47. Senator Lee. General Campbell, the President's budget proposes
a restructuring of Army aviation that would see all National Guard
Apache helicopters transferred to Active Duty units and Blackhawks
transferred to the National Guard. This would mean that the Army
National Guard will lose its entire Apache attack capability, and the
military will lose the vast experience gained by National Guard Apache
crews and mechanics over this past decade of war. I understand that the
budget cuts mean very hard decisions and sacrifice from all elements of
the force. Are you concerned about this loss of well-trained and
experienced National Guard Apache units?
General Campbell. No, we are not concerned with moving Apaches from
the National Guard. Shrinking budgets, exacerbated by the BCA, drove us
to reevaluate the strategy for Army aviation. Careful analysis resulted
in the reduction of three Active component aviation brigades and the
restructuring of remaining aviation brigades to optimize their
efficiency and utility at Home and abroad. Central to this
restructuring were the complete divestment of the OH-58D helicopter and
the transfer of all AH-64s to the Active component.
Considering all OH-58D and AH-64 battalions in the Total Force, the
Army currently has 37 ``shooting'' battalions. However, following the
divestment of the aged and increasingly costly OH-58D, the Army will
only have enough attack aircraft to man 22 AH-64 battalions. Based on
national security strategy and expected combatant commander demands,
these low-density, high-demand battalions must reside in the Active
component at higher readiness levels and reduced deployment
restrictions. Any change to this plan introduces significant risk to
the Army's capacity to meet mission requirements.
I am also not concerned about losing well-trained and experienced
National Guard Apache crews because under the Army's plan, we will
still be benefitting from their experience in transformed UH-60
Blackhawk battalions. To be sure, not all personnel will remain in the
National Guard; however, those Apache-qualified personnel who
transition to other aircraft will bring their quality and experience to
enhance the capabilities of those platforms and formations. They will
still provide efficient and effective support at Home and abroad, they
will just be doing so in different helicopters.
Ultimately, the Army, including all components, will reduce
structure to meet the constraints of funding. However, the aviation
restructure plan enables the Army to meet the demands abroad and within
the Homeland. Single-role Apache attack helicopters will be best
positioned to respond to requirements abroad. The National Guard will
receive 111 additional UH-60L Blackhawks to augment their capacity to
address Homeland missions while remaining essential for combat
deployments in the assault and medical evacuation roles.
48. Senator Lee. General Campbell, what effect will the loss of
this Guard attack capability have on readiness?
General Campbell. The Aviation Restructure Initiative (ARI)
increases the readiness of the Army, and the transfer of AH-64 Apache
helicopters from the National Guard to the Active component is central
to the plan.
Fiscal constraints forced the Army to reduce structure in the Total
Force. In order to avoid a hollow army by retaining structure at the
expense of readiness, the Army will reduce structure. The ARI adroitly
reduces structure and cost while simultaneously maintaining readiness
and capacity to meet mission demands at Home and abroad. Central to the
plan is the complete divestment of the aged and increasingly costly OH-
58D Kiowa fleet and the transfer of all AH-64 Apaches to the Active
component.
The Army has sufficient amounts of AH-64s to fully equip and man 22
AH-64 battalions. Combatant commander mission demands require all of
those battalions to remain at the highest levels of readiness with the
least amount of deployment restrictions. Only by placing all of those
high-demand, low-density assets in the Active component can the Army
maintain the necessary readiness and deployability dictated by national
security requirements.
In return for transferring AH-64s to the Active component, the
National Guard will receive 111 UH-60L Blackhawk helicopters. These
dual-role aircraft, with reduced training requirements, will increase
National Guard readiness and capacity to address Homeland missions.
Additionally, the National Guard will be increasingly ready and
relevant to contribute to combat missions in the assault and MEDEVAC
roles.
The ARI, particularly the transfer of AH-64s to the Active
component, increases the readiness of the Army to meet mission demands.
Alternate courses of action that include the National Guard retaining
AH-64s markedly decrease readiness and preclude the Army's capacity to
fully address national security requirements.
49. Senator Lee. General Campbell, what does the Army estimate it
will save per year with this aviation restructuring?
General Campbell. The ARI will reduce operations and sustainment
costs by approximately $1.1 billion annually due to the reduction in
overall structure.
Additionally, the ARI avoids approximately $12 billion in imminent
costs. If the Army does not execute ARI, we would be forced to retain
many of our oldest and least capable aircraft while divesting several
hundred modernized airframes. For example, upgrades to the Kiowa
Warrior would cost over $10 billion and replacing the legacy TH-67
training helicopter would add another $1.5 billion. In addition, lower
procurement rates of modernized aircraft would cost the Army
approximately $15 billion. These costs would be unbearable for the Army
under the current budget constraints and would risk creating a hollow
force, with less overall capability and less investment in
modernization.
50. Senator Lee. General Campbell, is the Apache helicopter the
best equipment to fill the Scout role that needs to be filled because
of the Kiowa Warrior's divestment?
General Campbell. Yes, under the current fiscal constraints and
available options the AH-64 Apache helicopter is the best equipment
solution to fill the Scout/reconnaissance role. The Apache, when teamed
with an unmanned aircraft system (UAS), clearly outperformed all other
competitors during the analysis of alternatives. It will allow the Army
to use an existing airframe and capability while simultaneously
reducing overall costs.
51. Senator Lee. General Campbell, what analysis was used to reach
this conclusion?
General Campbell. The analysis of alternatives conducted following
the cancellation of the Armed Reconnaissance Helicopter major
acquisition program determined that the best solution for armed
reconnaissance was a team of AH-64E Apache helicopters and UASs.
The Apache outperformed competition in adverse environmental
performance conditions (high temperature and altitude), and was more
lethal due to sensor capabilities and increased weapons payload. The
Apache also proved itself as being the most responsive (range and speed
capabilities) and survivable, as well as being the most interoperable
with joint platforms.
In the original analysis the AH-64 and UAS manned-unmanned-teaming
solution was not chosen because it was unaffordable to buy and sustain
additional AH-64s; however, the final decision to reduce aviation force
structure is what will allow the Army to employ AH-64s and Shadow UASs
that the Army already owns and sustains to meet the Army's Armed Aerial
Scout requirement. The AH-64 with its Modernized Target Acquisition and
Designation System, teamed with unmanned platforms, is already being
employed with tremendous success across Afghanistan.
air force readiness
52. Senator Lee. General Spencer, the President's budget proposes
to retire the A-10 Warthog in favor of using multirole platforms to
perform its job. What will be the effect on Air Force readiness if the
A-10 is not retired?
General Spencer. Without an approximately $4.2 billion addition to
the Air Force's topline that is necessary to maintain the current A-10
fleet, the Air Force would be forced to shift critical funds out of our
readiness and recapitalization/modernization accounts. Depending on the
outcome of these budget-driven tradeoffs, units may be forced to fly at
reduced training rates, resulting in fewer ready forces to meet the
requirements of the defense strategy. In addition, the Air Force may
again be forced to stand down units similar to actions taken in fiscal
year 2013 and from which (as of April 2014) the Air Force has yet to
fully recover.
If the Air Force is directed to retain the A-10 fleet without a
requisite increase to our budget topline, we will be forced to divert
vital funds out of our readiness and recapitalization/modernization
accounts, resulting in fewer ready forces available to support the
defense strategy and a less capable, smaller force that is even less
ready for tomorrow's fight.
53. Senator Lee. General Spencer, in the face of the decreased
budget that the Air Force has to work with, do you believe that the
work being done at the Air Force depots to maintain and modernize our
current weapons systems becomes more critical to your readiness?
General Spencer. Depot maintenance and contract logistics support
(CLS) are funded via our WSS accounts. WSS is a critical component of
our overall readiness, and our Air Force depots will continue to play a
critical role in maintaining that readiness. WSS directly impacts fleet
availability and the ability of our front line units to generate
aircraft at a rate that can support our flying hour program, and hence,
our ability to train for the full spectrum of operations as called for
in the defense strategy.
Currently, the Air Force is reliant on OCO funds to adequately
resource our WSS accounts, of which depot activities are a significant
part. Should OCO funding not be made available in future budgets and
without an equivalent increase to the Air Force's topline, depot
throughput would be significantly impacted and jeopardize our ability
to meet our 2023 readiness goals.
54. Senator Lee. General Spencer, how can our maintenance and
modernization work be used in a way that increases readiness and saves
money for the Air Force?
General Spencer. Depot maintenance and CLS are funded via our WSS
accounts. WSS is a critical component of our overall readiness. WSS
directly impacts fleet availability and the ability of our front line
units to generate aircraft at a rate that can support our flying hour
program, and hence, our ability to train for the full spectrum of
operations as called for in the defense strategy.
To address the high demand for WSS in a resource constrained
environment, the Secretary of the Air Force directed improvements in
the linkage between resources and readiness. This 5-year initiative
seeks appropriate strategy, process, and programming changes necessary
to improve risk-based decisionmaking relative to WSS costs in support
of readiness requirements. To accomplish this, the Air Force has begun
a cross-functional sustainment enterprise effort to identify and
improve WSS requirement drivers using three broad categories: (1)
reducing costs; (2) improving risk-based decisions while avoiding
material readiness impacts; and (3) balancing costs and performance.
DEPARTMENT OF DEFENSE AUTHORIZATION OF APPROPRIATIONS FOR FISCAL YEAR
2015 AND THE FUTURE YEARS DEFENSE PROGRAM
----------
WEDNESDAY, APRIL 2, 2014
U.S. Senate,
Subcommittee on Readiness
and Management Support,
Committee on Armed Services,
Washington, DC.
MILITARY CONSTRUCTION, ENVIRONMENTAL, ENERGY, AND BASE CLOSURE PROGRAMS
The subcommittee met, pursuant to notice, at 9:36 a.m. in
room SR-232A, Russell Senate Office Building, Senator Jeanne
Shaheen (chairwoman of the subcommittee) presiding.
Committee members present: Senators Shaheen, Donnelly,
Hirono, Kaine, and Ayotte.
OPENING STATEMENT OF SENATOR JEANNE SHAHEEN, CHAIRWOMAN
Senator Shaheen. Good morning, everyone. Let me call the
hearing to order and point out that since we scheduled the
hearing, there is going to be a vote this morning. It is going
to be at 10 a.m. I think it is only one vote. We will recess,
go vote, and then return. I apologize for the interruption. I
think they decided to vote after we scheduled the hearing.
I have an opening statement and I will try and be brief.
Hopefully we can get through Senator Ayotte's comments and at
least half of the panel before we have to leave for the floor
to vote.
Today, the subcommittee meets to hear the testimony on the
Department of Defense (DOD) fiscal year 2015 budget request for
installations, military construction (MILCON), energy, the
environment, and base closure programs.
Testifying this morning we have representatives from each
of the Services and the Office of the Secretary of Defense
(OSD) who are responsible for these programs. We look forward
to your testimony. I want to extend a special welcome back to
our witnesses from the great State of New Hampshire, Mr. Conger
and Ms. Ferguson.
The President's budget request for MILCON and family
housing is $6.56 billion in fiscal year 2015, which is nearly
$4.5 billion, or 40 percent, less than what was requested last
year. In addition, I understand that facilities sustainment,
restoration, and modernization requirements across DOD are
funded at only 65 percent of the requirement necessary to keep
our facilities in good working order. These reductions are no
doubt a reflection of the tough budget choices and the need to
protect funding for readiness and operations to the fullest
extent possible.
However, these reductions also assume a significant amount
of risk and ultimately a higher cost over the longer-term. I
look forward to hearing more from our witnesses about the level
of risk to our military facilities.
I am disappointed that DOD has again requested a base
realignment and closure (BRAC) round in 2017. I do not believe
that DOD has yet adequately explained how the significant cost
growth we saw in the 2005 BRAC round would be avoided this time
around or made sufficient progress in reducing the
infrastructure overseas, particularly in Europe.
Facility and operational energy issues are also a major
focus of today's hearing. In this difficult budget environment,
it is critical that we pursue every possible opportunity for
cost savings. Energy efficiency is not only the cheapest,
easiest way to reduce operating costs; it also has the
potential to continue to improve our warfighting capability and
energy security. I look forward to hearing from each of you
more about this today.
The President's budget request also includes $3.5 billion
for defense environmental programs, down from last year's
request and representing the fifth consecutive year of
decreases in the funding. Despite limited resources, I look
forward to hearing how DOD will continue to balance between
environmental protection and readiness.
Last, I would like to note my strong support for the Air
Force's proposed funding. I am sure I echo Senator Ayotte in
this----
Senator Ayotte. Absolutely.
Senator Shaheen.----for the bed-down of the KC-46A tanker
at Pease Air National Guard Base. We are very proud of the
157th Air Refueling Wing in Pease, and of our National Guard,
and I know that they will continue to provide the exceptional
refueling support that the Air Force needs for decades to come.
Now, before our witnesses provide their opening remarks, I
will turn to Senator Ayotte for her remarks.
STATEMENT OF SENATOR KELLY AYOTTE
Senator Ayotte. Thank you, Madam Chairwoman.
I appreciate the witnesses being here. I want to thank all
of you for your service at a very important time in our
country's history. Of course, yahoo to the New Hampshire people
who are here. It is fantastic.
Our country right now is facing a diverse, complex set of
threats around the world. I appreciate the challenges that you
are facing right now in terms of making sure that our troops
have the training and equipment they need. But, I think, as Mr.
Conger said in his written statement, installations support our
military readiness. This is an important part of readiness as
well and yet, it is often, I think, the first area that DOD has
to turn to and has turned to cut. This year really is no
exception.
The administration is proposing a significant cut to MILCON
and facilities, sustainment, restoration, and modernization
funding. As Senator Shaheen outlined, the fiscal year 2015
request for new construction and family housing is 33 percent
lower than fiscal year 2014 enacted levels and 40 percent lower
than the fiscal year 2014 request. This, as I look at this
proposal, funds only what is required to keep DOD
installations, as well as housing and other facilities, safe,
secure, and operational. Many important decisions on deferring
routine maintenance are being held off, including major
purchases, where we are going to be accepting more risks and
really hoping that we are able to sustain that another year. I
think that is the challenge that we face here. I think,
unfortunately, we have accepted more risks for the past 5 years
and we have many systems that are in poor condition.
I am concerned about the condition of some of the
facilities in which our service men and women operate. DOD has
an increasing number of facilities that are in poor to failing
condition, and this is true across all the Services, the Total
Force, not just Active Duty, but also the Guard and Reserve.
Certainly, I think, this is an important part of the hearing
today about what risks we are taking on with this proposal.
In Senator Shaheen's and my home State of New Hampshire,
the average condition index for assessed Army National Guard
facilities was poor, trending to failing. In fact, since the
mid-1960s, the New Hampshire Army National Guard has only been
able to construct one new readiness center for soldiers. We are
grateful for that, but the New Hampshire Army National Guard's
largest readiness center in Manchester was constructed in 1932.
It is grossly undersized. It does not comply with building code
standards, as well as some of the key health and safety
standards, as well as anti-terrorism force protection
standards.
This, to me, as we think about this, is not just the
investment we are making in the Active Duty, but we know that
in the conflicts we have had in Afghanistan and Iraq, it has
really been our Guard and Reserve who have been operational as
well. These facilities are very important to ensure that our
men and women in uniform, and our Guard and Reserve, are not in
sub-par facilities that really have health and safety issues.
I look forward to better understanding how the Army
determines the MILCON requirements in States as well and
ensures that those requirements are met.
Let me just echo what Senator Shaheen said about the
prioritization of funding for the Air Force investment in the
KC-46, both with development and stationing. I share Senator
Shaheen's views that this is great to see you prioritize this
funding, and obviously we are incredibly proud that the Air
Force chose the Pease Air National Guard Base to be the first
Air National Guard Base to receive the KC-46A next-generation
tanker. Thank you for prioritizing that in this proposal.
For the Navy, at our four public shipyards, I remain
concerned that critical MILCON projects are still being
delayed. That can negatively impact readiness and efficiency.
Certainly, I appreciate some of the advances that we have made
for the Portsmouth Naval Shipyard. But at the Portsmouth Naval
Shipyard, there are two projects that have been tentatively
delayed by a year, the P285 barracks, from fiscal year 2015 to
fiscal year 2016, and the P309 rail project from fiscal year
2016 to fiscal year 2017. These are projects that I am
concerned about. I am also concerned that the public shipyards
may not receive the 6 percent in MILCON funding as required by
the minimal capital investment plan. I look forward to
discussing these issues with our witnesses.
Again, let me just echo the comments of my colleague and
the chairwoman that the administration's proposal for another
BRAC round; I am very concerned about this proposal. It is not
a proposal that I can support. The Government Accountability
Office (GAO), as Senator Shaheen talked about, has done a
number of studies of the 2005 BRAC round which found, among
other things, that BRAC implementation costs grew to about $35
billion, exceeding the initial estimates that were given for
the cost of this BRAC round by $21 billion, or 67 percent.
I certainly understand that DOD will make the case that
this was somehow a unique BRAC round, but I remain concerned
that we are going to be in a position where the costs we put
into this will not be the return that we receive. In addition
to that, I believe that if we look at, for example, the needs
we have right now, one of them being in the Navy, and of our
four public shipyards, that we do not have excess capacity and
we do not have a need for a BRAC round at this point.
With regard to the maintenance, for example, at the
Portsmouth Naval Shipyard of our attack submarine fleet, they
are booked for a number of years, and really the work is there
that needs to be done to ensure that our attack submarine fleet
is prepared.
In addition, with DOD's shift to the Asia-Pacific region,
now more than ever, I would like to hear from the witnesses
where you believe that there is excess capacity, if any, that
would justify a BRAC round at this point.
Finally, I appreciate the work that DOD and each of the
Services are doing to increase energy efficiency and to ensure
that DOD energy programs allow for greater cost efficiency and
mission effectiveness. Thank you for your work there. I think
that is important.
I thank the chairwoman for holding this hearing, and I want
to thank again all the witnesses for your service to our
country during challenging times.
Senator Shaheen. Thank you, Senator Ayotte.
As I previously said, hopefully we can receive as much of
the witnesses' testimony as possible before we go to vote. I
would ask that we take testimony in the following order: the
Honorable Sharon E. Burke, Assistant Secretary of Defense for
Operational Energy Plans and Programs; Mr. John C. Conger,
Acting Deputy Under Secretary of Defense for Installations and
Environment; the Honorable Katherine G. Hammack, Assistant
Secretary of the Army for Installations, Energy, and
Environment; the Honorable Dennis V. McGinn, Assistant
Secretary of the Navy for Energy, Installations, and
Environment; and Ms. Kathleen I. Ferguson, Acting Assistant
Secretary of the Air Force for Installations, Environment, and
Logistics.
Secretary Burke, would you please begin.
STATEMENT OF HON. SHARON E. BURKE, ASSISTANT SECRETARY OF
DEFENSE FOR OPERATIONAL ENERGY PLANS AND PROGRAMS
Ms. Burke. Chairwoman Shaheen and Ranking Member Ayotte,
Senator Hirono, thank you for the opportunity to discuss with
you today the activities of the Office of Operational Energy
Plans and Programs and provide highlights of the President's
fiscal year 2015 budget in this area.
You have my statement for the record, so I will not repeat
it here today.
I am honored to join all of my colleagues from OSD and
military departments. I know that you have a range of very
important installation issues to discuss today as you just made
clear. But, I thought it might be helpful to start with just a
short overview of how we all fit together when it comes to
energy.
DOD is, of course, the country's single largest consumer of
energy at a cost of about $20 billion a year. We all have
various roles and missions relating to that energy use, but we
also have a common narrative that unites us and that is by
design. Last year, then-Deputy Secretary of Defense Ashton
Carter directed DOD's senior leaders to come up with that
common narrative, one to guide the full range of defense energy
activities, including operational and facilities energy, and
the energy-related elements of mission assurance.
In the intervening months, we have all worked together to
write that narrative, which we hope to formalize soon. But I
believe it is very fair to say that the basic principles
already guide our activities and have for some time, and so I
can give you a preview of what is in that policy.
The policy states that DOD will enhance military
capability, improve energy security, and mitigate costs in its
use and management of energy. We will do so by improving the
energy performance of our weapons, installations, and military
forces, by diversifying and expanding our energy supplies and
sources, including renewable energy and alternative fuels, by
analyzing the requirements and the risks related to our energy
use, and finally by promoting innovation for our equipment and
education and training for our personnel. The bottom line is
that DOD values energy as a mission-essential resource and one
that can actually shape the mission as well.
As DOD's lead official for operational energy, or the
energy required to train, move, and sustain forces and
platforms for military operations, I am delighted to tell you
that the President's fiscal year 2015 budget request advances
the goals of that common narrative. Energy, and liquid fuel in
particular, is the lifeblood of military operations. It powers
our vehicles, our ships, our aircraft, and the generators that,
in turn, provide electricity to a range of systems.
It can also be a vulnerability on the battlefield, and our
adversaries in Afghanistan have targeted our supply lines at
times. While we have had no operationally significant
disruption of those fuel supplies, the opportunity costs,
including in lives lost, has been higher than it has to be.
This has potential to be an even bigger concern as DOD
rebalances to the Asia-Pacific region where full-spectrum
operations and vast distances create even greater logistical
challenges. Also, potential adversaries or range of adversaries
are growing the capabilities to constrain or deny logistics,
including with more precise weapons.
The overall demand for operational energy today and in the
future varies from year to year. It depends on our missions and
on our operations tempo, but in fiscal year 2015, DOD estimates
it will consume 96 million barrels of liquid fuel at a cost of
approximately $15 billion.
In fiscal year 2015, we will also invest $1.7 billion in
initiatives to improve how we consume that energy for military
operations and about $9 billion over the Future Years Defense
Program (FYDP). More than 90 percent of that investment will go
to improve the energy performance of our weapons and our
military forces. That includes procurement of equipment, such
as the Army's efficient generator program. It includes major
innovation efforts, such as engine programs for fighter
aircraft and helicopters. Seven percent of that overall
investment will go to diversifying and securing our supplies of
operational energy, and that includes, for example, the Marine
Corps program to procure tactical solar generation and solar
battery charging systems.
Underlying all of these investments are efforts to develop
better analytical tools for the whole force development
process. These will inform our strategy development, our plans,
our requirements, and the acquisition process. This has been a
key focus of my office since our inception. We are about 4
years old now. We are a new office, and it has been an
important area of activity for us. We have seen, in that short
period of time, a great deal of progress in this area with
energy and energy logistics increasingly incorporated into all
of those processes, including major war games, and there is now
a mandatory key performance parameter for energy in the
requirements process that the Chairman of the Joint Chiefs
enforces.
In addition to this focus on future force development, my
office will continue to promote operational energy innovation,
including through our own investment fund. We will continue to
study and analyze how global energy dynamics affect national
security and shape the defense mission. We will continue to
analyze how climate change will affect our operational
missions. Finally, we will continue to look for ways to support
deployed forces with operational energy solutions, from rapid
fielding of new technologies, to adapting war plans, to
incorporating energy into international partnerships, and we
are gathering and applying the lessons learned in Afghanistan.
Thank you for your time today. I look forward to your
questions.
[The prepared statement of Ms. Burke follows:]
Prepared Statement by Hon. Sharon Burke
introduction
Chairwoman Shaheen, Ranking Member Ayotte, and distinguished
members of the subcommittee, thank you for the opportunity to discuss
my office in the Department of Defense (DOD), Operational Energy Plans
and Programs (OEPP). Today, the Department faces continued operational
energy challenges as our defense posture adjusts to meet the rapidly-
changing global security environment. The dynamic global energy
landscape adds to our strategic challenges and opportunities. I will
provide some perspective on those issues, along with an update of our
progress and some information on the President's fiscal year 2015
budget request as it relates to operational energy.
mission of oepp
Established in 2010, my office's primary purpose is to strengthen
the energy security of U.S. military operations. Specifically, the
office's mission is to help the Military Services and combatant
commands improve military capabilities, cut costs, and lower
operational and strategic risk through better energy planning,
management, and innovation. By statute, operational energy is defined
as the energy required for training, moving, and sustaining military
forces and weapons platforms for military operations. In June 2011, the
Department released ``Energy for the Warfighter: The Department of
Defense Operational Energy Strategy,'' which set the overall direction
for energy use in the Department: to assure reliable supplies of energy
for 21st century military operations. It outlines three ways to meet
that goal: reducing the demand for energy; expanding and securing the
supply of energy; and building energy security into the future force.
These goals are especially important as we build a military force
that is prepared and postured for a complex, global security
environment, ``capable of simultaneously defending the homeland;
conducting sustained, distributed counterterrorist operations; and in
multiple regions, deterring aggression and assuring allies through
forward presence and engagement,'' as the Secretary of Defense called
for in the 2014 Quadrennial Defense Review (QDR). The QDR also directly
connects energy to capability, noting that, ``Energy improvements
enhance range, endurance, and agility, particularly in the future
security environment where logistics may be constrained.'' To these
ends, OEPP has achieved considerable progress by supporting current
operations and energy innovation, building operational energy
considerations into the future force, and promoting institutional
change within the Department.
changing energy landscape
DOD's efforts to transform our own energy use are occurring as the
global energy landscape rapidly changes. Here at home, the significant
surge of domestic oil and gas production is fundamentally altering the
balance of the energy markets we have known for the past 40 years. The
U.S. is expected to become the world's largest producer of natural gas;
around the country, massive terminals built to import natural gas are
now rapidly being converted to export it.\1\ Oil imports have been
reduced by about 2.5 million barrels a day in just the last 5 years \2\
while U.S. production is expected to increase by a further 3 million
barrels per day by the end of the decade.\3\ The United States now
exports around 3 million barrels per day of refined product, an
increase of more than 2 million barrels per day since 2005.\4\
---------------------------------------------------------------------------
\1\ http://www.eia.gov/todayinenergy/detail.cfm?id=13251
\2\ http://www.eia.gov/dnav/pet/hist/
LeafHandler.ashx?n=pet&s=wcrimus2&f=w
\3\ http://www.eia.gov/forecasts/aeo/er/early--production.cfm, EIA
Annual Energy Outlook, Early Release Overview, ``U.S. production of
crude oil (including lease condensate) in the AEO2014 Reference case
increases from 6.5 MM bbl/d in 2012 to 9.6 MM bbl/d in 2019.''
\4\ http://www.eia.gov/dnav/pet/hist/
LeafHandler.ashx?n=PET&s=MTPEXUS2&f=M, EIA data on U.S. exports of
finished petroleum products indicates monthly U.S. exports of finished
petroleum products in November 2013 was 3 million bbls/d compared to
811,000 bbls/d in November 2005.
---------------------------------------------------------------------------
This rebalance is significantly altering the flow of the global
energy trade. Energy shipments from West Africa that used to cross the
Atlantic are now headed to Europe or through the Indian Ocean en route
to Asia. Permits to export natural gas are now being approved and by
the end of the decade we can expect U.S. natural gas to be available
for markets in Europe and Asia. It is not just the supply patterns that
are changing. Energy demand in the developed world has leveled off. The
majority of the growth in the world's energy consumption over the next
decade will come from the developing world with China, India, and other
non-Organization for Economic Co-operation and Development countries
increasing their energy consumption 50 percent in the next 20 years.\5\
---------------------------------------------------------------------------
\5\ http://www.eia.gov/forecasts/ieo/world.cfm-According to EIA,
non OECD countries consumption will rise from 307 quadrillion BTUs in
2013 to 460 by 2030.
---------------------------------------------------------------------------
As imports from regions which have previously exported to the
United States are re-directed to new customers, our economic,
political, and military relationships with those countries will evolve
as well. As the Department considers base access, security cooperation,
and partnerships, we must be cognizant of these changing underlying
economic forces.
We also see how the appearance of new energy resources is
influencing the Department's strategic direction. Last year, Secretary
of Defense Chuck Hagel unveiled DOD's first-ever Arctic Strategy and
addressed the driving force behind it--global climate change. According
to the U.S. Navy's Task Force Climate Change, ``average Arctic
temperatures have increased at almost twice the global average rate''
in the past 100 years, and ``in 2012, Arctic sea ice reached its
smallest extent in recorded history, 1.3 million square miles.'' The
changes in that region have opened up new areas to energy development
and shipping. As the Arctic region becomes more accessible to other
nations, expanded capabilities and capacity may be required to increase
U.S. engagement in this region.
Changes in the climate, driven by global energy use, will affect
military operations elsewhere as well. Specifically, as the 2014 QDR
found, climate change can act as threat multiplier, as heat waves,
drought, downpours, floods, and severe storms may significantly add to
the associated challenges of instability, hunger, poverty, and even
conflict. At the installation level, climate risks may disrupt
training, testing, and direct support to ongoing operations. In fact,
the National Intelligence Council estimates over 30 U.S. military
installations face elevated risks from rising sea levels. In the cases
of severe weather events, demands on the Department for humanitarian
assistance or disaster response--both within the United States and
abroad--may increase as the climate changes.
However, even with all these changes, some constants remain. First,
it is important to point out that most of the Department's operations
occur outside the United States, and we will continue to buy energy
overseas to simplify our supply chains, limit costs, and increase
flexibility for the warfighter. Second, a large proportion of global
energy will continue to flow through a relatively small number of
chokepoints. Today, nearly a fifth of all oil and nearly 25 percent of
globally traded liquefied natural gas transit the Strait of Hormuz.
Current and planned pipelines across the Arabian Peninsula and around
the Strait would provide only limited relief in the event of a blockage
and would do little to cushion any global price spike. The Strait of
Hormuz will continue to pose an outsize risk to global prices for the
foreseeable future--and to prices at the pump here at home.
Indeed, the Middle East will remain a major source of oil for
nations across the globe, particularly our allies in Asia. Even so, the
2014 QDR states that ``competition for resources, including energy and
water, will worsen tensions in the coming years and could escalate
regional confrontations into broader conflicts--particularly in fragile
states,'' in the Middle East. As long as petroleum powers our
transportation sector, we may experience the economic consequences of
price volatility from events in any oil-producing region. At the United
Nations General Assembly this past September, the President made clear
that the United States will continue to ensure the free flow of energy
from the Middle East to the world, even as the United States is
steadily reduces our dependence on imported oil. It is important to
remember that even as the United States is able to meet more of our
energy needs ourselves, the price for oil and petroleum products will
still be set by a global market.
the defense energy challenge--today and tomorrow
As a critical enabler for military operations, the Department
consumes significant amounts of energy executing missions around the
globe. While only accounting for approximately 1.3 percent of U.S. oil
and petroleum consumption in fiscal year 2013, the Department is the
single largest energy user in the Nation. In fiscal year 2013, the
Department consumed almost 90 million barrels of liquid fuel at a cost
of $14.8 billion, with more than 60 percent of that outside of the
United States. In fiscal year 2014, the Department estimates it will
consume nearly 105 million barrels of liquid fuels at a cost of $16
billion. In fiscal year 2015, the Department estimates it will consume
96 million barrels of liquid fuel at a cost of approximately $15
billion.
The Department's demand for operational energy varies according to
the missions assigned to the Department, as well as the equipment used
in to execute those missions. Including training, exercises, and the
full range of military operations, the Department uses operational
energy to maintain readiness and deploy, employ and sustain forces
around the globe. Year over year, operations tempo reflects unexpected
demands (i.e., post-9/11 operations, humanitarian relief missions) as
well as changes in the magnitude of other ongoing operations like
Afghanistan.
In Afghanistan, the Department used more than 9 million barrels of
liquid fuels to support Operation Enduring Freedom in fiscal year 2013.
In addition to the fuel provided to vehicles and aircraft, the demand
for electricity on the battlefield has steadily increased over years of
sustained combat operations. Combat outposts and forward operating
bases are the hubs for our troops--to project power from, fight from,
and live in. However, they consume tremendous amounts of energy and
have, therefore, been a steady focus of recent efficiency efforts.
The reliance on diesel generators to supply battlefield and
contingency base electrical power produces an unintended consequence--a
growing energy sustainment burden that must be sourced, in many cases,
from great distances. Unfortunately, that logistics effort consumes
fuel as well. The two main fuel distribution routes into Afghanistan
present daunting challenges that range from the political effort needed
to sustain them, to long distance transport on unimproved roads with
multiple choke points and poor weather conditions which can slow
movement to a trickle, and the threat of attack from insurgents or
thieves. Each of these challenges adds time, manpower, and cost to the
supply process. Once the fuel reaches larger distribution points inside
Afghanistan, it still needs to be deployed to a nationwide network of
bases and outposts. Given the terrain and the threat, aerial
distribution of supplies, including fuel, is often used to sustain
coalition efforts across Afghanistan. Delivering all of this fuel takes
a toll on aircraft, vehicles, and personnel. Looking further back in
the supply chain, DOD has depended on political support from countries
that allow our energy supplies to flow into Afghanistan through
northern or southern transportation routes, which can be disrupted at
any time.
The growing requirement for troop-borne capability has launched
another sustainment burden--portable batteries--which represents a
serious logistical challenge for the warfighter as our troops are
increasingly overburdened platforms themselves. They carry gear which
sends and receives data from remotely powered aircraft and far-away
command posts, and integrates the information into intelligence
collection, surveillance, and targeting like never before. Soldiers and
marines have scopes, sights, and radios that give them unsurpassed
awareness and accuracy. But, this capability requires a steady supply
of power, and for dismounted operations that means batteries, and lots
of them. Consider an Army estimate that an average troop on a 3-day
patrol may carry up to 23 batteries weighing nearly 14 pounds. While
these batteries support important capabilities, the trend of increasing
weight is unsustainable from both re-supply and soldier loading
perspectives. Battery resupply requirements can greatly diminish a
patrol's combat radius, and soldier-carried weight already impedes
mobility on the battlefield and presents a significant risk of
musculoskeletal injuries.
These fuel and battery requirements also place a significant
logistics burden on planners, troops, equipment, and supply lines.
Reducing the demand for energy on the battlefield has a direct effect
on reducing the energy logistics burden and freeing up manpower and
equipment resources previously engaged in logistics tasks to
operational commanders for use in generating combat power.
As we draw down forces from ongoing operations in Afghanistan and
adapt to a changing security environment, the Department's use of
energy will continue to be of great importance. Generally speaking, our
future operating environment will include a range of threats--from
homemade improvised explosive devices and suicide bombers to GPS-guided
mines and missiles, computer viruses, and electronic warfare--that may
not only characterize actual combat, but also situations short of war.
At the same time, the lessons of the last 12 years have not been lost
on our potential adversaries, who are increasingly developing or
acquiring capabilities that threaten our ability to project and sustain
this power. These asymmetric and ``anti-access/area-denial''
capabilities will likely target those U.S. capabilities that may be
more susceptible to disruption, such as logistics, energy, and command
and control.
More specifically, the President and the Secretary have emphasized
that we shift our strategic focus to the Asia Pacific, a region whose
security and prosperity is indispensable to our own. Promoting our
interests in the area--and much of that will focus on non-military
tools--means long distances, far from our own shores. For example,
intra-theater lift in Afghanistan requires a fraction of the fuel that
will be required for intra-theater lift in the Pacific. A cargo plane
flying from Bagram to Kandahar burns around 3,000 gallons of fuel, but
that same aircraft will burn around 11,500 gallons of fuel flying from
Guam to Seoul and over 16,000 gallons flying from Guam to Singapore. In
this environment, demands for fuel, electricity, and energy logistics--
aerial refuelers and oilers, for instance--can become a limiting factor
for military operations. Not only will we need extended range and
endurance to operate--whether for today's relief missions in the
Philippines or for other military missions--but we also will need to be
interoperable with our allies and partners from an energy and logistics
perspective to effectively carry out coalition operations. In fact,
energy can be a positive tool for cooperating with emerging partners to
help support U.S. presence and operations with U.S. forces.
reducing demand
Increasing combat effectiveness in current operations through
reductions in fuel demand has been a significant DOD focus since OEPP's
establishment in 2010. To quote the former International Security
Assistance Force/U.S. Forces--Afghanistan Commander General John Allen,
``Operational energy equates exactly to operational capability.'' \6\
We aspire to achieve the most ``mission per gallon'' by reducing the
demand for energy and decreasing the logistics effort necessary to
support the warfighters. The Department has made progress, particularly
at the tactical edge where fuel logistics cost the most and resupply
risks are the greatest. However, DOD's fuel demand still accounts for a
large percentage of the overall logistics burden and many opportunities
remain to build a more efficient future force. In general, this is a
huge incentive for improving our materiel capabilities and is reflected
in $1.7 billion in fiscal year 2015 and $8.3 billion across the Future
Years Defense Program that the Services have budgeted for operational
energy initiatives and efficiency improvements. That equates to 91
percent of the operational energy (OE)-related budget invested in
reducing the demand for energy.
---------------------------------------------------------------------------
\6\ ISAF/USFOR-A memo, ``Supporting the Mission with Operational
Energy,'' 11 Dec 2011
---------------------------------------------------------------------------
Let me sketch out some key activities to highlight the OEPP's
efforts in partnership with the combatant commanders.
U.S. Central Command
The Operational Energy Division (OED) within the Joint Program
Integration Office at U.S. Forces-Afghanistan (USFOR-A) was established
in 2011 with a mandate to improve operational capabilities and
warfighter effectiveness by reducing our forces' reliance on liquid
fuels. Staffed with technical experts, the OED continues to develop and
implement materiel and non-materiel energy solutions to reduce
dependence on petroleum fuels and increase operational effectiveness.
OED coordinates directly with OEPP, and we maintain a close
relationship to address operational energy issues and initiatives in
theater. In 2012, OEPP and OED combined efforts with the Army's Program
Manager--Mobile Electric Power (PM-MEP) to answer an Operational Needs
Statement with $110 million worth of advanced, energy efficient power
generation and distribution equipment. OED and OEPP also collaborated
to fund and support an operational demonstration of an advanced
tactical microgrid to gather data for future microgrid technology
development.
This past year, OED also provided significant support to Operation
Dynamo. Improvements in energy efficiency produce the greatest leverage
at the extreme tactical edge, since the risks and costs to provision
fuel there are so great and potentially so disruptive to the
operational mission. In a tactical environment, electrical demand has
usually been met by multiple diesel powered generators, sized for peak
loads but often operating far from peak capacity and efficiency. The
consequence of poor generator loading is significant fuel waste,
increased maintenance effort, and decreased reliability. In an attempt
to address those issues, PM-MEP, in coordination with USFOR-A OED,
recently completed Operation Dynamo I and II, which assessed the
electrical supply and demand footprint at 67 forward operating
locations. Mission-specific advisory teams developed more efficient
power generation and distribution plans, replaced older equipment with
more than 500 fuel efficient Advanced Medium Mobile Power System
generators and 430 Improved Environmental Control Units, updated
distribution systems to improve reliability and safety, and trained
local soldiers to operate and maintain the equipment properly. This
effort spotlights the value of operational energy advisors teamed with
expert technicians and military standard equipment and their ability to
become a significant combat force multiplier for operational
commanders. Building on the success of its predecessors, Operation
Dynamo III is underway now to oversee the right sizing of power assets
during the drawdown in Afghanistan to ensure as we reduce our forces we
continue to apply the lessons we have learned.
U.S. Pacific Command
OEPP has embraced emergent energy challenges in the Pacific and
partnered with U.S. Pacific Command (PACOM) and other key stakeholders
to understand and address them.
The vast expanse of the oceans and seas that comprise PACOM's Area
of Responsibility put a premium on the ability of maritime forces to
foster relations with partner nations, protect commercial and military
shipping, and execute offensive operations on and from the sea. The
Navy is exploring many technologies, such as Hybrid Electric Drive,
stern flaps, and improvements to marine-growth reducing hull and
propeller coatings, to reduce fuel consumption. The Naval Postgraduate
School-developed Replenishment at Sea Planner is great example of an
inexpensive, in-house software solution to reduce our logistics burden.
It is intended to optimize logistical transit plans and the fuel
necessary for both warships and military sealift logistics vessels to
prepare for and execute underway replenishment. This software tool is
already in use in Fifth and Seventh Fleets and is expected to save
millions of dollars in fuel costs each year.
OEPP remains engaged in the Department's ongoing efforts to improve
liquid fuel delivery ashore in areas where little to no distribution
infrastructure exists. I attended the Joint Logistics Over-The-Shore
demonstration in Korea in April 2013. This recurring, combined U.S./
Republic of Korea event exercises our ability to deliver fuel,
supplies, and equipment from ships at sea to encampments ashore where
sufficient maritime port facilities do not exist. We have impressive
over-the-shore fuel distribution capabilities, and yet they may be
stressed in some scenarios. I am pleased that the Navy has programmed
$34 million between fiscal year 2013-2017 to fund a replacement for an
aging Offshore Petroleum Discharge System ship the USS Petersburg,
while the Army develops the next generation of Inland Petroleum
Distribution System. Each Service needs to continue to ensure that this
capability can meet current and future challenges.
As the DOD operational energy strategy has evolved, OEPP and the
combatant commanders have expanded our efforts beyond improving only US
force capabilities. Teaming with partner nations to improve fuel
efficiency and reduce energy demand across our combined forces benefits
global cooperation and our combined security in the region. To that
end, my office is currently exploring options within the Asia-Pacific
region to identify and assess low-cost, high-payoff operational energy-
related security cooperation opportunities that could contribute to
broader U.S. and Asia-Pacific partner policy objectives. The results
are intended to inform future guidance to other combatant commands,
PACOM planning guidance, and to build partnership capacity activities
for PACOM, the Joint Staff, the Office of the Secretary of Defense
(OSD), and interagency partners. Additionally, ongoing contingency
basing energy technology demonstrations and experimentation events
during joint and combined exercises, such as Crimson Viper in Thailand
and Balikatan in the Philippines, are improving our own capabilities
and those of key partner nations through focused military-to-military
engagements.
U.S. Africa Command
In the U.S. Africa Command (AFRICOM) area of responsibility, OEPP
is mentoring a growing and effective headquarters staff effort to
incorporate operational energy across their operations and theater
security cooperation activities. The staff recently assigned its first
dedicated operational energy advisor and, in addition, continues to
benefit from a Department of Energy (DOE) employee serving as a liaison
to advise the commander on energy issues. Additionally, my office
supported the establishment of the governance structure for the
command's Interagency Energy Security and Environment Working Group
which considers operational energy equities in operations and
exercises.
As the United States increases its focus on the African continent,
the Department is similarly stepping up its efforts to support the
combatant commander across a range of operational energy issues. The
austere operating environment is compounded by the lack of
infrastructure which introduces a challenging sustainment picture. The
Army's Rapid Equipping Force recently conducted an energy assessment of
remote and urban locations supporting U.S. forces across the Trans-
Sahara region to help them increase electrical power generation,
improve electrical safety, and increase drinking water production and
safety. The Naval Facilities Engineering Command, in coordination with
the National Renewable Energy Laboratory, completed an energy
assessment at Camp Lemonnier, Djibouti. Camp Lemonnier, though an
enduring site, contains some equipment more typical of contingency
locations, so OEPP collaborated with the Office of the Deputy Under
Secretary of Defense for Installations and Environment on energy issues
at the Camp by identifying peak electrical load requirements and
analyzing the energy demand impact of several new environmental control
system configurations. In addition, my office recently partnered with
the U.S. Agency for International Development to exchange information,
establish a working forum, and begin leveraging DOD lessons learned in
Afghanistan to assist the Power Africa initiative in its mission to
improve power distribution to rural villages and towns.
In general, as part of my office's focus on contingency basing, we
recently helped identify measures in U.S. Central Command, U.S.
Southern Command, and AFRICOM to reduce fuel demand in contingency
plans and to determine the potential operational value of that fuel
demand reduction. Employing improved power generation equipment and
shelter construction standards, and future fuel efficiency improvements
to aerial resupply vehicles, will help operational commanders optimize
in-theater fuel resupply plans as part of larger contingency planning
efforts.
Operational Energy Capability Improvement Fund
My office is also supporting longer-term innovation and change via
the Operational Energy Capability Improvement Fund (OECIF). The OECIF
began in fiscal year 2012 with the goal of funding innovation that will
improve the operational energy performance of our forces while creating
institutional change within the Department. It promotes partnering and
joint programs and encourages Service teaming. The programs started in
fiscal year 2012 have concentrated on reducing the energy load of our
expeditionary outposts. For example, there is a joint Army/Air Force
program developing ways to improve the energy efficiency of soft
shelters (i.e. tents), which has demonstrated improved tents and camp
architectures in Kuwait, resulting in a 50 percent reduction in power
consumption. Another program demonstrated a 54 percent reduction of the
energy needed to cool hard shelters (i.e. containerized living units)
used in Djibouti, Africa. In fiscal year 2012, OECIF also started a
program to demonstrate and evaluate load reduction technologies for
expeditionary outposts in tropical environments--something particularly
suited to our shift to the Pacific environment--by participating in
exercises in Thailand, the Philippines, and elsewhere By combining
upgraded environmental control units (ECUs) with light emitting diode
lighting and hybrid automatic/manual controls, energy savings as high
as 80 percent over earlier technologies have been demonstrated. The
OECIF is also supporting the development of technology for more
efficient ECUs, which heat and cool our deployed shelters and consume a
great deal of energy, including through a partnership between the Navy
and the DOE's Advanced Research Projects Agency for Energy.
The OECIF programs begun during fiscal year 2013 emphasized
establishing organizations aimed at involving a wide variety of
organizations in solving our operational energy problems. OEPP
encouraged the use of innovative business methods, such as consortia,
to involve small businesses and non-traditional defense contractors.
For example, one of these programs, led by the Army, is focused on
energy for our dismounted warfighters. Our soldiers and marines benefit
from the world's most technologically advanced weaponry; however, this
equipment can require that a warfighter carry around 14 pounds of
batteries on lengthy patrols. The Army-led OECIF program is meant to
comprehensively address this problem through developing better system
engineering techniques and technologies to improve both the energy
demand and supply in order to reduce the weight burden. Other programs
begun in fiscal year 2013 are developing standards for tactical
microgrids to promote their interoperability and adoption, developing
planning methods and control technologies for designing and running
more efficient expeditionary outposts, and engineering surface coatings
to reduce aircraft drag.
Most recently, for fiscal year 2014, OECIF is pursuing new programs
to develop the analytic methods and tools necessary to support the
thorough analysis and consideration of operational energy issues
throughout DOD's various planning and management processes. The basic
idea is to give decision makers within the Department better ways to
factor operational energy into their decisions. This focus was partly
driven by our experience in the last few years and partly by
observations we made during our budget certification process, where we
found shortcomings in the ability of the Department to consider energy
in its decisions. We are using the OECIF to help solve it, which is
consistent with its goal of creating institutional change.
increase/assure supply
Another element of our strategy is diversifying and securing
military energy supplies to improve the ability of our forces to get
the energy they require to perform their missions.
Alternative Energy and Fuels
The Department's operational energy investments are focused on
meeting warfighter needs, including by diversifying the Department's
supply options. One focus is on energy that can be generated or
procured locally near deployments to lessen the burden on supply lines.
The Services are evaluating, and, where appropriate, deploying tactical
solar technologies to generate electricity on contingency bases or to
recharge batteries to increase patrol range and mission duration. OEPP
is assisting in these efforts by coordinating information sharing
amongst the Services and between the Services and DOE, which has broad
technical expertise in civilian solar technologies. Additionally, the
Department is funding research in deployable waste-to-energy systems
that could reduce the volume of waste requiring disposal and create and
generate energy on contingency bases. Other technologies in which the
Department is investing include hydrogen-powered and solar-powered
unmanned aerial vehicles, which have the potential to achieve much
longer mission durations than those powered by traditional petroleum-
based products.
Another component of the Department's operational energy strategy
is alternative fuels. As the Nation's largest consumer of energy, the
Department recognizes that our military will need alternatives to
petroleum to diversify sources of supply. Over the long term, the
Department will need fuels derived from various feedstocks that are
cost-competitive, widely available around the world, and compatible
with existing equipment and storage infrastructure, as our existing
fleet of ships, planes, and combat vehicles will be with us for decades
to come. So the Department is investing around 2 percent of its
operational energy funding over the next 5 years on alternative fuels.
The Services are focusing the majority of their alternative fuels
efforts on certifying aircraft, ships, tactical vehicles, and support
equipment to use these emerging fuels, as they have been doing since
2006. These initiatives improve the flexibility of military operations
by ensuring that our equipment can operate on a wide range of fuels
when they are cost competitive and commercially available.
To create clear guidelines on the Department's alternative fuels
investments both now and in the future, on July 5, 2012, the Department
of Defense Alternative Fuels Policy for Operational Platforms was
released, pursuant to Section 314 of the National Defense Authorization
Act of 2012. The policy establishes coordinated, Department-wide rules
to guide and streamline its investments in the development and use of
alternative fuels. The policy states that the Department's primary
alternative fuels goal is to ensure operational military readiness,
improve battlespace effectiveness, and further flexibility of military
operations through the ability to use multiple, reliable fuel sources.
All Department investments in this area are reviewed during the
Department's annual operational energy budget certification process.
To date, the Department has only purchased test quantities of
biofuels for testing and certification purposes. These test fuels are
often more expensive than commercially-available petroleum fuels
because they tend to be produced at small, not-yet-commercial scale
facilities using novel conversion technologies. However, the policy
formalized what was already the practice for all the Military Services:
that the Department will not make bulk purchases of alternative drop-in
replacement fuels unless they are cost competitive with petroleum
products. With this policy in place, the Department will continue to
steward its alternative fuels investments towards the ultimate goal of
enhancing the long-term readiness and capability of our joint force.
Because the Department does have long-lived platforms designed to
use liquid fuels, there is a long-term defense interest in fuels
diversification. The Department also supports a larger national goal to
promote the development of low-carbon, renewable fuels. The Defense
Production Act (DPA) advanced drop-in biofuels production project, led
by the OSD Manufacturing and Industrial Base Policy Office, is a DOD
partnership with the private sector and the Departments of Energy and
Agriculture, which have the lead roles for the Federal Government for
biofuel feedstocks and production. This project works to accelerate the
development of cost-competitive advanced alternative fuels for both the
military and commercial transportation sectors. The fiscal year 2012
DPA funding for Phase 1 was awarded to four companies in May/June 2013
and is being used for competitive commercial-scale integrated
biorefinery design efforts. Awards totaled $20.5 million, which was
matched by $23.5 million in private sector funds. Reviews of Phase 2
proposals will begin in April 2014.
Securing Our Energy Supplies
There is rising concern about risks to the U.S. electric grid that
powers most DOD bases, ranging from cyber-attacks to hurricanes. The
risks and vulnerabilities of the U.S. electric grid and overseas
electricity supplies supporting DOD facilities are not well
characterized. Today, military operations can include warfighters
conducting missions remotely from domestic facilities; the disruption
of electric power in one location could adversely affect the outcome of
a battle thousands of miles away. In the event of a major domestic
outage, as with Hurricane Sandy, the lack of adequate power could
create tension between Defense support for civilians and the
Department's own needs.
We recognize the need for better information and coordination on
risks to the grid and are exploring the Department's role in building
resiliency into the system. To that end, OEPP and other lead offices in
the OSD, in partnership with the Department of Homeland Security's
Office of Infrastructure Protection, led an interagency, scenario-based
workshop to gain a better understanding of how the Department would
respond to a prolonged and widespread power outage in the National
Capital Region that affected military bases and missions in the area.
We continue to engage in discussions with utility service providers,
Federal agencies and other DOD entities to address this challenge.
In addition to electrical power concerns we are also looking at the
security of our liquid fuel supply. OEPP is currently examining
logistical challenges generated by the vast distances and extensive
operating areas present in the Asia-Pacific theater. My office is
working with the Defense Logistics Agency and the Joint Staff in
studying nodes and transportation links to support modifications to the
Global Petroleum Distribution System.
Building Energy Security into the Future Force
The Department continues to make strides in improving energy
security for the future force. We have invested a significant amount
into the development and deployment of operational energy initiatives
to increase the combat effectiveness of our warfighters. Programs of
note include the:
Adaptive Engine Technology Development (AETD)
program--AETD is focused on developing a ``sixth-generation''
fighter engine which could provide better fuel-burn rates. At
the core of the program is a move to a design with three
streams of air, allowing more flexibility for the engine to
operate efficiently under varying conditions. AETD's goal is to
provide 25 percent greater fuel efficiency which will increase
range and endurance of fighter aircraft and decrease the
requirement for tanker aircraft to support AETD-equipped
aircraft. This year, the Department announced a follow on
program, the Advanced Engine Technology Program, to carry the
engine through technology maturity risk reduction.
Improved Turbine Engine Program (ITEP) program--This
program provides an improved engine for the Apache and
Blackhawk helicopter fleets to replace the current T-700
engine. ITEP will improve operational effectiveness by giving
commanders an improved aviation fleet with longer loiter time,
increased altitude limits, increased payload, and lower fuel
and maintenance costs. The Army expects a 25 percent fuel
reduction from current engine consumption levels.
Hybrid Electric Drive (HED) program--The Navy will
begin installing HEDs in Arleigh Burke-class (DDG 51)
destroyers in 2016. HED is an electric motor attached to the
main reduction gear of DDG-51-class ships that allows for an
electric propulsion mode resulting in improved fuel economy.
Installation of an HED on a single ship has the potential to
save over 5,000 barrels of fuel per year, which equates to
approximately a 7 percent reduction from current usage or 11
additional underway days, each year, and provides our
commanders at sea improved operational flexibility.
Medium Tactical Vehicle Replacement (MTVR)--This
effort includes developing and demonstrating a fuel efficiency
improvement of 15 percent over the existing MTVR while
maintaining affordability, mobility, and survivability.
Additionally, within this program, the Marine Corps funded the
procurement of prototypes of the On-Board Vehicle Power sources
to reduce fuel requirements at idle, which is the majority of
the vehicle drive cycle.
We have worked with the Joint Staff and the Services to implement
the Energy Key Performance Parameter or energy Key Support Attribute
across all acquisition categories. This includes Acquisition Category I
programs such as the Armored Multipurpose Vehicle, Joint Light Tactical
Vehicle, DDG-51 Flight III, and the Air Missile Defense Radar, along
with smaller acquisition programs such as the MTVR, Prime Power Mobile
Production System, and the Force Provider-Expeditionary Program.
In regards to shaping the requirement and acquisition systems, the
Department is working to conduct operational energy analysis earlier;
that will provide a greater opportunity to consider the tradeoffs and
options among a more energy secure force, more effective or efficient
equipment, or a more capable logistics force. The Joint Staff, the
Service Energy Offices, and my office have worked together to make
operational energy an integral part of the Services' Title X War Games,
such as the Army's Unified Quest/Deep Futures II and the Navy's Naval
Global 14, which will occur later this year. We are developing a tool
to provide the war gamers timely feedback about attacks on our
logistics and energy supplies. We are also working together to ensure
operational energy supportability analysis is conducted during the
Services' concept development, which provides a realistic energy
distribution and allows simulated enemy forces to interdict our energy
supplies, to more closely approximate real world conditions.
Moving forward, we must continue to fund analysis to identify which
capabilities and missions to target for operational energy
improvements. We have found that engaging earlier, well before
Milestone A, will give us the greatest opportunity to provide greater
capabilities through operational energy improvements.
institutionalizing operational energy in policy
In the long term, the Department must build operational energy
considerations into the regular rhythm of how the Department operates.
To begin with, the Secretary of Defense signed the Operational Energy
Strategy Implementation Plan in March 2012 and identified seven
targets:
1. Measure operational energy consumption;
2. Improve energy performance and efficiency in current operations
and training;
3. Promote operational energy innovation;
4. Improve operational energy security at fixed installations;
5. Promote the development of alternative fuels;
6. Incorporate energy security considerations into requirements
and acquisition; and,
7. Adapt policy, doctrine, professional military education, and
Combatant Command activities to include operational energy.
The Department is making great progress implementing the strategy;
further details are available in our Operational Energy Annual Report
to Congress and budget certification reports, which are available on
the OEPP website (http://energy.defense.gov/).
More recently, in June 2013, the Deputy Secretary of Defense issued
``Deputy's Management Action Group Guidance for a Comprehensive Defense
Energy Policy.'' This guidance highlighted how changes in the
Department's use of energy are needed to enhance military capability,
improve energy security, and mitigate costs, and initiated the
development an overarching DOD energy policy, to be completed this
year. When complete, the policy will adapt core business processes--
including requirements, acquisition, planning, programming, budgeting,
mission assurance, operations, and training--to improve the
Department's use and management of energy.
The Department also issued other policies over the past year to
support the operational energy mission. In January 2013, the Under
Secretary of Defense for Acquisition, Technology, and Logistics
released DOD Directive 3000.10, ``Contingency Basing Outside the United
States.'' In addition to outlining Department policy related to
interoperability, construction standards, and other areas, the
Directive specified the role of operational energy and identified a
smaller logistics footprint as enabling more effective and capable
contingency bases.
In addition to the strategy, guidance, and policy set forth by my
office and that of OSD, the Military Services have followed with their
own initiatives. In the past year, the Army and the Air Force have
updated their own energy strategies while the Marine Corps issued
guidance for improving the incorporation of energy into their
acquisition programs. Similarly, the Navy has moved out, leading the
Department with efficiency upgrades to their legacy aircraft and
propulsion innovations in their ships.
conclusion
In November 2013, Secretary Hagel stated, ``DOD invests in energy
efficiency, new technologies, and renewable energy sources at our
installations and all of our operations because it makes us a stronger
fighting force and helps us carry out our security mission.''
Our vision to better manage the Department's use of energy will
continue to improve military capability across all missions. As we
adapt to threats and geopolitics shaped by energy, now is the time to
drive long-term innovation and energy improvements into our core
business processes, force structure, and planning to ensure we have the
military we need to succeed in the future.
Going forward, the Department is committed to addressing how energy
shapes our capabilities and operations as well as how it affects what
the missions of the Department are. This past year, the Department has
made great strides in reforming core business processes and decision-
making, supporting current operations, and applying energy
considerations to the development of the future force. All that said,
institutional change within the Department is difficult, time consuming
and not for the faint of heart; we appreciate this committee's
continued support of OEPP.
Senator Shaheen. Thank you.
Mr. Conger.
STATEMENT OF JOHN C. CONGER, ACTING DEPUTY UNDER SECRETARY OF
DEFENSE FOR INSTALLATIONS AND ENVIRONMENT
Mr. Conger. Good morning. Chairwoman Shaheen, Ranking
Member Ayotte, distinguished members of the subcommittee, I
appreciate the opportunity to appear before you to discuss
DOD's fiscal year 2015 budget request for installations and
environment.
The testimony I have submitted for the record describes the
$6.6 billion that we are requesting for MILCON and family
housing, the $8 billion more that we are requesting for
sustaining and restoring our facilities, and the $3.5 billion
that we are seeking for environmental compliance and cleanup.
Because infrastructure generally has a long, useful life
and its associated degradation is not as immediate, DOD
components are taking more risk in the MILCON program in order
to decrease risk in other operational and training budgets.
In addition, reducing MILCON reduces investment risk, as we
contemplate the uncertain allocation of force structure cuts
and the possibility of a new round of BRAC.
The MILCON request alone, as was indicated earlier, is a 40
percent reduction from what we requested last year, and the
facilities sustainment request is only 65 percent of the
modeled requirement.
The budget challenges facing DOD are deep and they extend
for many years. We continue to believe that an important way to
ease this pressure is with base closure, allowing us to avoid
paying upkeep for unneeded infrastructure and making those
funds available for readiness and modernization of the forces.
That said, I know the high cost of BRAC 2005 has left a bad
taste in many Senators' mouths. We have long talked about the
emphasis in 2005 on transformation rather than efficiency. But
that answer did not satisfy Congress' concern about the $35
billion cost, and it certainly did not explain why we were not
going to end up with more of the same if another round were
authorized.
I was not satisfied either, and I tasked my staff to review
each of the recommendations from BRAC 2005. What we found was
that we actually ended up conducting two parallel BRAC rounds.
One was about transformation. The recommendations were
expensive, and they did not pay back. But there were some moves
that you could only do during a BRAC round. Looking at nearly
half of the last round's recommendations that either did not
pay back at all or are paid back in 7 years or more, we found
that this transformation BRAC cost $29 billion out of the $35
billion and resulted in only $1 billion in recurring savings.
In other words, the reason we were doing those moves was not to
save money.
That said, the other half of the recommendations was
focused on saving money. They had payback of less than 7 years.
They ended up costing a total of $6 billion out of that $35
billion and yielded recurring savings of $3 billion a year.
This efficiency BRAC proves that when we are trying to save
money, we do.
That is the kind of round we are seeking to conduct now. It
is fair to say that DOD needs to save money now.
During the hearing with Secretary of Defense Chuck Hagel,
Madam Chairwoman, you specifically asked about the European
infrastructure consolidation effort. Many members have said
that we should close bases overseas before we do a BRAC. So, we
have embarked on a BRAC-like process in Europe. However, we are
not looking in that process to bring forces back to the United
States. It will not take any pressure away from the need for a
BRAC round. The analysis has taken longer than expected, but we
are nearing the finish line and anticipate completing our
report this spring. We have affirmed several recommendations
already and have offered classified briefings to subcommittee
staff. In fact, we have scheduled an update with this
subcommittee staff next week.
Finally, Madam Chairwoman, I understand that you wanted to
spend some time focused on DOD's energy programs. I applaud
your focus on energy efficiency. I agree completely with the
statement you have made in the past that the cheapest energy is
the energy we do not use.
Let me make three quick points on facilities energy before
I yield back.
First, many of our energy efficiency projects and most of
our renewable ones are funded by third parties, minimizing our
upfront costs and resulting in long-term cost reduction.
Second, for those projects that we do fund ourselves, we
are focused on the business case and ensuring good payback.
These are smart investments.
Third, one of the risks that is associated with reduced
levels of facilities sustainment funding is reduced energy
performance. Put simply, a hole in the roof or a malfunctioning
high ventilation and air conditioning system has a significant
effect on a building's energy efficiency. To paraphrase your
quote, the most expensive energy is the energy we waste. That
is what you get if you underfund maintenance.
Thanks for the opportunity to testify. I look forward to
your questions.
[The prepared statement of Mr. Conger follows:]
Prepared Statement by Mr. John Conger
introduction
Chairwoman Shaheen, Ranking Member Ayotte, and distinguished
members of the subcommittee: Thank you for the opportunity to present
the President's fiscal year 2015 budget request for the Department of
Defense (DOD) programs supporting installations, facilities energy, and
the environment.
First, let me thank you for your support for our installation
mission. DOD operates an enormous real property portfolio encompassing
over 562,000 buildings and structures on 523 bases, posts, camps,
stations, yards, and centers. The replacement cost of the Department's
installations is $850 billion, excluding the cost of the 27 million
acres of land that our installations occupy. Our installations remain
critical components of our ability to fight and win wars. Our
warfighters cannot do their job without bases from which to fight, on
which to train, or in which to live when they are not deployed. The
bottom line is that installations support our military readiness.
In addition, I would like to express my thanks to Congress for an
fiscal year 2014 budget that allowed us to avoid a catastrophic budget
year. The funding levels for the facilities accounts and the relative
timeliness of the budget compared to fiscal year 2013 allowed us to
recover from the disproportionate burden that facilities sustainment
and base operations bore last year. While this will still be a
challenging budget year, the funding levels and the certainty achieved
by striking a budget deal and taking sequestration off the table for
the year will allow us to manage our resources and conduct our
operations more effectively.
Still, the fiscal year 2015 budget request reflects the assumption
that Budget Control Act funding levels are likely to continue. The
recent budget deal provided more assistance to fiscal year 2014 than
fiscal year 2015, and in order to meet the overall budget numbers, we
had to scale back programs across the Department, to include military
construction (MILCON). As such, the fiscal year 2015 request for MILCON
and family housing is $6.6 billion, a 40.4 percent decrease from the
fiscal year 2014 request. Because infrastructure, generally, has a long
useful life, and its associated degradation is not as immediate, the
DOD components are taking more risk in the MILCON program in order to
decrease risk in other operational and training budgets. In addition,
reducing MILCON reduces investment risk as we contemplate the uncertain
allocation of force structure cuts and the possibility of a new round
of Base Realignment and Closure (BRAC).
Tighter budgets have driven the Services to take more risk in their
Facilities Sustainment accounts. While continuing to assume risk in
these accounts over time will result in increased repair requirements
and decreased energy efficiency, we are accepting near term risk in
facility maintenance while the Department adjusts to the new funding
profile.
To address this and other shortfalls driven by the funding caps,
the President's budget includes the Opportunity, Growth and Security
Initiative. This initiative would provide an additional $26 billion for
the Defense Department in fiscal year 2015, including substantial
investments in military construction and facilities sustainment.
Finally, we persist in our request for another BRAC round, though
given Congress' rejection of our previous request in 2015 and the time
it takes to execute the BRAC process, we are now asking for a round in
2017. We maintain that the Department has well documented excess
capacity and is on a path for even more as we reduce our force
structure. As Secretary Hagel indicated, we cannot afford to spend
money on infrastructure we don't need while we continue to take risk in
military readiness accounts.
My testimony will outline the fiscal year 2015 budget request and
highlight a handful of top priority issues--namely, the
administration's request for BRAC authority, our progress on the
European Infrastructure Consolidation analysis, new developments on the
Pacific realignment, an overview of our facility energy programs, and a
discussion of the steps DOD is taking to mitigate the risk posed by
climate change.
fiscal year 2015 budget request--military construction and family
housing
The President's fiscal year 2015 budget requests $6.6 billion for
the MILCON and Family Housing Appropriation--a decrease of
approximately $4.5 billion from the fiscal year 2014 budget request.
This decrease primarily reflects the declining budget environment
resulting from the Budget Control Act and the recent budget agreement.
In light of the sharp reductions in the construction budget, the DOD
components focused principally on sustaining warfighting and readiness
postures. As I noted in the introduction, infrastructure degradation is
not immediate, so DOD components are taking more risk in the MILCON
program in order to decrease risk in other operational and training
budgets.
This funding will still enable the Department to respond to
warfighter requirements and mission readiness. However, the reduced
budget will have an impact on routine operations and quality of life as
projects to improve aging workplaces are deferred. In addition to new
construction needed to bed-down forces returning from overseas bases,
this funding will be used to restore and modernize enduring facilities,
acquire new facilities where needed, and eliminate those that are
excess or obsolete. The fiscal year 2015 MILCON request ($4.9 billion)
includes projects in support of the strategic shift to the Asia-
Pacific, projects needed to support the realignment of forces, a few
projects to improve and update facilities used by the Guard and Reserve
Forces, and although at a reduced level, it includes some projects to
take care of our people and their families, such as unaccompanied
personnel housing, medical treatment facilities, and schools.
Military Construction
We are requesting $5.1 billion for ``pure'' MILCON--i.e., exclusive
of BRAC and Family Housing--the lowest amount in 10 years. This request
addresses routine requirements for construction at enduring
installations stateside and overseas, and for specific programs such as
the NATO Security Investment Program and the Energy Conservation
Investment Program. In addition, we are targeting MILCON funds in three
key areas:
First and foremost, our MILCON request supports the Department's
operational missions. MILCON is key to implementing initiatives such as
the Asia-Pacific rebalance, the Army's Brigade Combat Team
reorganization, maritime homeland defense, and cyber mission
effectiveness. Our fiscal year 2015 budget request includes $84 million
for the final increment of the Kitsap Explosives Handling Wharf-II,
$120 million for a cyber warfare training facility, $255 million for
KC-46A mission facilities; and, $51 million for Guam relocation support
facilities. The budget request also includes $180 million for the
fourth increment of the U.S. Strategic Command Headquarters Replacement
facility at Offutt Air Force Base, Nebraska; $166 million for the
second increment of the U.S. Cyber Command Joint Operations Facility at
Fort Meade, Maryland; $92.2 million for the first phase of a Joint
Intelligence Analysis Complex Consolidation at RAF Croughton, United
Kingdom; and $411 million to address Special Forces Operations
requirements.
Second, our fiscal year 2015 budget request includes $394 million
to replace or modernize seven DOD Education Activity (DODEA) schools
that are in poor or failing physical condition. These projects, six of
which are at enduring locations overseas, support the Department's plan
to replace or recapitalize more than half of DODEA's schools over the
next several years, but at a slower pace to improve execution. The
recapitalized or renovated facilities, intended to be models of
sustainability, will provide a modern teaching environment for the
children of our military members.
Third, the fiscal year 2015 budget request includes $486 million
for five projects to upgrade our medical treatment and research
facilities, including $260 million for the fourth increment of funding
to replace the Landstuhl Regional Medical Center at the Rhine Ordnance
Barracks in Germany. Recapitalizing this facility is critical because
it not only supports our wounded warriors but also serves as the
primary DOD European referral center for high acuity specialty and
surgical care. It is also our only theater level medical asset
providing comprehensive services to the extraordinary large
Kaiserslautern military community. Our budget focuses on medical
infrastructure projects that are crucial to ensure that we can deliver
the quality healthcare our servicemembers and their families deserve,
especially during overseas deployments.
Family and Unaccompanied Housing
A principal priority of the Department is to support military
personnel and their families and improve their quality of life by
ensuring access to suitable, affordable housing. Servicemembers are
engaged in the front lines of protecting our national security and they
deserve the best possible living and working conditions. Sustaining the
quality of life of our people is crucial to recruitment, retention,
readiness, and morale.
Our fiscal year 2015 budget request includes $1.2 billion for
construction, operation, and maintenance of government-owned and leased
family housing worldwide, oversight of privatized housing, and services
to assist military members in renting or buying private sector housing.
Most government-owned family housing is on bases in foreign countries,
since the Department has privatized almost all of its family housing in
the United States. The requested funding will ensure that U.S. military
personnel and their families continue to have suitable housing choices.
DOD also continues to encourage the modernization of Unaccompanied
Personnel Housing (UPH) to improve privacy and provide greater
amenities. In recent years, we have heavily invested in UPH to support
initiatives such as BRAC, global restationing, force structure
modernization, and Homeport Ashore--a Navy program to move Sailors from
their ships to shore-based housing when they are at their homeport. The
fiscal year 2015 MILCON budget request includes $150 million for five
construction and renovation projects that will improve living
conditions for trainees and unaccompanied personnel.
The Military Services completed the initial Military Housing
Privatization Initiative award phase before the end of fiscal year
2013. The Air Force awarded the final 3 projects to complete its
program, bringing the total privatized inventory to about 205,000
homes. The new challenge will be to manage the government's interests
in these privatized projects to ensure they continue to provide quality
housing for 50 years.
Facilities Sustainment and Recapitalization
In addition to new construction, the Department invests significant
funds in maintenance and repair of our existing facilities. Sustainment
represents the Department's single most important investment in the
condition of its facilities. It includes regularly scheduled
maintenance and repair or replacement of facility components--the
periodic, predictable investments an owner should make across the
service life of a facility to slow its deterioration, optimize the
owner's investment, and save resources over the long term. Proper
sustainment retards deterioration, maintains safety, and preserves
performance over the life of a facility, and helps improve the
productivity and quality of life of our personnel.
The accounts that fund these activities have taken significant cuts
in recent years. In fiscal year 2013, DOD budget request included $8.5
billion of Operations and Maintenance (O&M) funding for sustainment of
our real property. This amount represents 82 percent of the requirement
based on the Facilities Sustainment Model (FSM). Due to sequestration
reductions, by the end of fiscal year 2013, the Department had only
obligated $6.7 billion for sustainment, which equates to 65 percent of
the modeled requirement. The Department's fiscal year 2014 budget
request for sustainment included just $7.9 billion of O&M funds (78
percent of the modeled requirement) and Congress appropriated only $7.3
billion, or 74 percent of the modeled requirement, for this purpose.
For fiscal year 2015, the Department's budget request includes $6.4
billion for sustainment and $1.6 billion for recapitalization. The
combined level of sustainment and recapitalization funding ($8 billion)
reflects a 23.6 percent decrease from the fiscal year 2014 President's
budget request ($10.5 billion). While the Department's goal is to fund
sustainment at 90 percent of modeled requirements, the funding level
noted above supports an average DOD-wide sustainment funding level of
65 percent of the FSM requirement. Due to budget challenges, the
Military Services have taken risk in maintaining and recapitalizing
existing facilities. The Services have budgeted facility sustainment
between 63 and 77 percent of the DOD-modeled requirement, with the
Marine Corps taking the least risk by budgeting sustainment at 77
percent and the Army assuming the greatest risk by budgeting
sustainment at 63 percent. Continued decreases in sustainment coupled
with inadequate investment in recapitalization of existing facilities
will present the Department with larger bills in the out-years to
restore or replace facilities that deteriorate prematurely due to
underfunding their sustainment.
Facility Investment Policy Initiatives
Military Construction Premium
Last year, the Department completed a study to quantify elements of
the MILCON process that increases construction costs compared to
similar construction efforts in the private sector. We are now
conducting additional analysis in two areas where military cost
premiums were high.
First, we are taking a close look at anti-terrorism standards for
construction. With current policy that prescribes significant minimum
anti-terrorism construction standards, many construction projects must
absorb excessive and disproportionate requirements, which in turn drive
up costs. On December 7, 2012, the Deputy Secretary of Defense issued
policy for DOD to adopt the Federal Interagency Security Committee
security standards for off-base DOD-leased space consistent with other
Federal agencies. In addition, the Department is evaluating revisions
to DOD requirements for building antiterrorism protection on our
installations, which currently calls for the same minimum standards for
nearly all on-base buildings. We are working to establish a process
whereby risk and appropriate antiterrorism mitigation would be
determined for each new project, similar to the policy we adopted for
off-base leased facilities. For example, this risk assessment would
take into account whether a building was well within a secure
perimeter.
Second, we are undertaking a study to better understand the life-
cycle cost impacts of our design practices in each of seven major
building systems by comparing facilities designed for an extended
service life (40 years or more) to those designed for the typical
commercial practice of 20 to 25 years. We intend this study to inform
decisions on design-life requirements in our technical standards. We
believe our existing standards reduce life-cycle costs even where there
appears to be an increase of initial costs; however, it is important to
review them for improvement and/or validation.
Facility Condition Standards
We have been working for some time to develop a policy that relates
the condition of facilities to requirements for recapitalization. While
straightforward on its surface, it has turned out to be far more
complex than originally thought, requiring underlying policy
adjustments to enable the implementation of a policy on facility
investment related to facility condition standards.
For example, each of the Military Services uses slightly different
processes to measure the Facility Condition Index (FCI), a functional
indicator used across the Federal Government to assess facility
condition, expressed in terms of the relationship between what it would
cost to repair a facility to a like-new condition and what it would
cost to replace that facility (e.g., an FCI of 90 percent means that
the cost to restore a facility is 10 percent of the cost to replace
it). In order to increase the reliability of DOD's FCI data and to
ensure the figures for each Service were comparable, the Department
issued policy and implementation guidelines in September 2013 that
reinvigorate and standardize our facility condition assessment and
reporting processes, to include using a common inspection tool and
ensuring qualified professionals conduct the inspections.
With standardized and reliable FCI data, we will be in a better
position to develop a facility investment strategy based on the
condition of the Department's real property portfolio, either as an
aggregate portfolio or by looking at individual assets. Generally, we
would like to maintain an average portfolio FCI of Fair (80 percent,
formerly referred to as Q2), and we are seeking to replace, repair,
excess, or demolish buildings that are in such bad shape that they are
rated as Failing (FCI less than 60 percent, formerly the Q4
designation). Today, our average FCI for all DOD facilities is 86
percent, and we have more than 17,000 buildings that are rated as
Failing across the enterprise. Taking risk by underfunding sustainment
will drive these figures in the wrong direction, and we will need a
strategy to improve the condition of our real property inventory in the
coming years.
Payment in Kind Projects
In 2013, the Senate Armed Service Committee released a report that
focused on host nation funded construction in Germany, South Korea, and
Japan. The report raised several concerns regarding the selection and
prioritization of DOD construction projects using host nation funds,
particularly those funds provided to the Department as in-kind
contributions. As a result, the National Defense Authorization Act for
Fiscal Year 2014 requires that the Department obtain advance
authorization for construction projects funded through payment-in-kind
from host nations. While we disagree with the provision because it is
overly restrictive, we understand Congressional concerns and will work
with you to ensure we not only comply with this restriction but keep
you better informed about all projects funded with host nation
contributions.
fiscal year 2015 budget request--environmental programs
The Department has long made it a priority to protect the
environment on our installations, not only to preserve irreplaceable
resources for future generations, but to ensure that we have the land,
water, and airspace we need to sustain military readiness. To achieve
this objective, the Department has made a commitment to continuous
improvement, pursuit of greater efficiency, and adoption of new
technology. In the President's fiscal year 2015 budget, we are
requesting $3.5 billion to continue the legacy of excellence in our
environmental programs.
The table below outlines the entirety of the DOD's environmental
program, but I would like to highlight a few key elements where we are
demonstrating significant progress--specifically, our environmental
restoration program, our efforts to leverage technology to reduce the
cost of cleanup, and the Readiness and Environmental Protection
Integration (REPI) program.
Environmental Restoration
We are requesting $1.4 billion to continue cleanup efforts at
remaining Installation Restoration Program (IRP)--focused on cleanup of
hazardous substances, pollutants, and contaminants) and Military
Munitions Response Program (MMRP)--focused on the removal of unexploded
ordinance and discarded munitions) sites. This includes $1.1 billion
for ``Environmental Restoration,'' which encompasses active
installations and Formerly Used Defense Sites (FUDS) locations and $264
million for ``BRAC Environmental.'' DOD is making steady progress,
moving sites through the cleanup process towards achieving program
goals. The fiscal year 2015 cleanup request is reduced by 21.1 percent.
The reduction for the Environmental Restoration request is primarily
due to budgetary reductions for the Army, who will still meet our
restoration goals despite the lower funding. The reductions in the BRAC
funding request will be augmented with unobligated balances from the
consolidated BRAC account.
By the end of 2013, the Department, in cooperation with State
agencies and the Environmental Protection Agency, completed cleanup
activities at 79 percent of Active and BRAC IRP and MMRP sites, and
FUDS IRP sites, and is now monitoring the results. During fiscal year
2013 alone, the Department completed cleanup at over 800 sites. Of the
more than 38,000 restoration sites, almost 30,000 are now in monitoring
status or cleanup completed. We are currently on track to exceed our
program goals--anticipating complete cleanup at 96 percent of Active
and BRAC IRP and MMRP sites, and FUDS IRP sites, by the end of 2021.
Our focus remains on continuous improvement in the restoration
program: minimizing overhead; adopting new technologies to reduce cost
and accelerate cleanup; and refining and standardizing our cost
estimating. All of these initiatives help ensure that we make the best
use of our available resources to complete cleanup.
Note in particular that we are cleaning up sites on our active
installations in parallel with those on bases closed in previous BRAC
rounds--cleanup is not something that DOD pursues only when a base is
closed. In fact, the significant progress we have made over the last 20
years cleaning up contaminated sites on active DOD installations is
expected to reduce the residual environmental liability in the
disposition of our property made excess through BRAC or other reasons.
Environmental Technology
A key part of DOD's approach to meeting its environmental
obligations and improving its performance is its pursuit of advances in
science and technology. The Department has a long record of success
when it comes to developing innovative environmental technologies and
getting them transferred out of the laboratory and into actual use on
our remediation sites, installations, ranges, depots, and other
industrial facilities. These same technologies are also now widely used
at non-Defense sites helping the Nation as a whole.
While the fiscal year 2015 budget request for Environmental
Technology overall is $172 million, our core efforts are conducted and
coordinated through two key programs--the Strategic Environmental
Research and Development Program (SERDP)--focused on basic research)
and the Environmental Security Technology Certification Program
(ESTCP)--which validates more mature technologies to transition them to
widespread use). The fiscal year 2015 budget request includes $57.8
million for SERDP and $26.5 million for ESTCP for environmental
technology demonstrations. (The budget request for ESTCP includes an
additional $25.0 million for energy technology demonstrations.)
These programs have already achieved demonstrable results and have
the potential to reduce the environmental liability and costs of the
Department--developing new ways of treating groundwater contamination,
reducing the life-cycle costs of multiple weapons systems, and
improving natural resource management.
Most recently, SERDP and ESTCP have developed technology that
allows us to discriminate between hazardous unexploded ordnance and
harmless scrap metal without digging up an object. This technology
promises to reduce the liability of the MMRP program by billions of
dollars and accelerate the current cleanup timelines for munitions
sites--without it; we experience a 99.99 percent false positive rate
and are compelled to dig up hundreds of thousands of harmless objects
on every MMRP site. The rigorous testing program for this technology
has experienced some delays due to sequestration and is now expected to
be complete in 2015. Even as the technical demonstrations are ongoing,
the Department has been pursuing an aggressive agenda to transition the
technology to everyday use. We are proceeding deliberately and
extremely successfully with a testing and outreach program designed to
validate the technology while ensuring cleanup contractors, State and
Federal regulators, and local communities are comfortable with the new
approach. We are already beginning to use this new tool at a few
locations, but hope to achieve more widespread use within the next few
years.
Looking ahead, our environmental technology investments are focused
on the Department's evolving requirements. We will work on the
challenges of contaminated groundwater sites that will not meet
Department goals for completion because no good technical solutions
exist; invest in technologies to address munitions in the underwater
environment; develop the science and tools needed to meet the
Department's obligations to assess and adapt to climate change; and
continue the important work of reducing future liability and life-cycle
costs by eliminating toxic and hazardous materials from our production
and maintenance processes.
Environmental Conservation and Compatible Development
In order to maintain access to the land, water, and airspace needed
to support our mission needs, the Department continues to manage
successfully the natural resources entrusted to us--including
protection of the many threatened and endangered species found on our
lands. DOD manages over 28 million acres containing some 420 federally
listed threatened or endangered species, more than 520 species-at-risk,
and many high-quality habitats. A surprising number of these species
are found only on military lands--including more than 10 listed species
and at least 75 species-at-risk. That is 9 times more species per acre
than the Bureau of Land Management, 6 times more per acre than the
United States Fish and Wildlife Service (USFWS), 4.5 times more per
acre than Forest Service, and 3.5 times more per acre than the National
Park Service.
The fiscal year 2015 budget request for Conservation is $381
million. The Department invests so much to manage not only its
imperiled species but all its natural resources, in order to sustain
the high quality lands our service personnel need to train and to
maximize our flexibility when using those lands. Species endangerment
and habitat degradations can have direct mission-restriction impacts.
That is one reason we work hard to prevent species from becoming
listed, or from impacting our ability to test and train if they do
become listed.
As a result of multiple law suits, the USFWS has entered into
court-approved agreements to make decisions on 250 species that are
``candidates'' for listing as threatened or endangered under the
Endangered Species Act by 2016. The Department has already analyzed the
250 species and 37 of them, if listed and critical habitat was
designated on DOD lands, have the potential to impact military
readiness at locations such as Yakima Training Center and Joint Base
Lewis-McChord (JBLM). To minimize the potential impacts, these
installations have already begun to appropriately manage these species
and to consult with USFWS. USFWS and DOD have long worked
collaboratively to minimize any critical habitat designation on DOD
lands and to ensure that listed species conservation is consistent with
military readiness needs.
Our focus has been on getting ahead of any future listings. I have
tasked the Military Departments to get management plans in place now to
avoid critical habitat designations.
While we make investments across our enterprise focused on
threatened or endangered species, wetland protection, or protection of
other natural, cultural, and historical resources, I wanted to
highlight one particularly successful and innovative program--the REPI
Program. Included within the $381 million for Conservation, $43.6
million is directed to the REPI Program. The REPI Program is a cost-
effective tool to protect the Nation's existing training, testing, and
operational capabilities at a time of decreasing resources. In 11 years
of the program, REPI partnerships have protected more than 314,000
acres of land around 72 installations in 27 States. This land
protection has resulted in tangible benefits to testing, training, and
operations, also made a significant contribution to biodiversity and
endangered species recovery actions.
Under REPI, DOD partners with conservation organizations and State
and local governments to preserve buffer land near installations and
ranges. Preserving these areas allows DOD to avoid much more costly
alternatives, such as workarounds, segmentation, or investments to
replace existing test and training capability, while securing habitat
off of our installations and taking pressure off of the base to
restrict activities. REPI supports the warfighter and protects the
taxpayer because it multiplies the Department's investments with its
unique cost-sharing agreements. Even in these difficult economic times
for States, local governments, and private land trusts, REPI partners
continue to directly leverage the Department's investments one-to-one.
In other words, we are securing these buffers around our installations
for half-price.
In addition, DOD, along with the Departments of the Interior and
Agriculture, announced the Sentinel Landscapes Partnership to protect
critical DOD missions, working lands, and environmentally sensitive
habitat. The Sentinel Landscapes Partnership further strengthens
interagency coordination, and provides taxpayers with the greatest
leverage of their funds to advance the mutually-beneficial land
protection goals of each agency. The pilot Sentinel Landscape project
at JBLM helped USFWS avoid listing a butterfly species in Washington,
Oregon, and California, citing the ``high level of protection against
further losses of habitat or populations'' from JBLM's REPI investment
on private prairie lands in the region. These actions allow significant
maneuver areas to remain available and unconstrained for active and
intense military use at JBLM.
highlighted issues
In addition to the budget request, there are several legislative
requests and other initiatives that have received interest from
Congress. In the sections that follow, I highlight five specific items
of interest: (1) BRAC; (2) European Infrastructure Consolidation; (3)
Relocation of Marines to Guam; (4) DOD Facilities Energy Programs; and
(5) DOD's Response to Climate Change.
1. BRAC
For the third year in a row, the administration is requesting BRAC
authority from Congress. This year, we are requesting authority to
conduct a BRAC round in 2017.
The Department is facing a serious problem created by the tension
of declining budgets, reductions in force structure, and limited
flexibility to adapt our infrastructure accordingly. We need to find a
way to strike the right balance, so infrastructure does not drain
resources from the warfighter. Our goal is therefore a BRAC focused on
efficiency and savings, and it is a goal we believe is eminently
achievable.
We believe the opportunity for greater efficiencies is clear, based
on three basic facts:
In 2004, DOD conducted a capacity assessment that
indicated it had 24 percent aggregate excess capacity;
BRAC 2005, the Department reduced only 3.4 percent of
its infrastructure, as measured in Plant Replacement Value--far
short of the aggregate excess indicated in the 2004 study; and
Force structure reductions--particularly Army
personnel (from 570,000 to 450,000 or lower), Marine Corps
personnel (from 202,000 to 182,000 or lower) and Air Force
force structure (reduced by 500 aircraft)--subsequent to that
analysis point to the presence of additional excess.
Historically, savings from BRAC have been substantial. The first
four rounds of BRAC (1988, 1991, 1993, and 1995) are producing a total
of about $8 billion and BRAC 2005 is producing an additional $4 billion
in annual, recurring savings. This $12 billion total represents the
savings that the Department realizes each and every year as a result of
the avoided costs for base operating support, personnel, and leasing
costs that BRAC actions have made possible.
A considerable proportion of the opposition to a new BRAC round is
the cost of BRAC 2005--specifically, the $35 billion it cost compared
to the original projection (which was $21 billion). The Government
Accountability Office has validated the $4 billion in recurring savings
associated with the round, so its savings is not in question. When
congressional members say the last round did not save money, what they
really mean is that it cost too much, the cost growth was unacceptable,
and the payback was too slow.
Simply put, we cannot afford another $35 billion BRAC round.
However, it turns out the key factor that drove the cost of the last
BRAC round was the willingness of the Department, the BRAC Commission,
and Congress to accept recommendations that were not designed to save
money.
To the casual observer, this makes no sense. BRAC has been sold as
a method of efficiency--a tool to save money. That is true to an
extent, but the law effectively prevents the Department from shifting
its functions around from base to base without BRAC, and in the last
round that is exactly what was done. The reality is that there were
really two parallel BRAC rounds conducted in 2005: one focused on
Transformation and one focused on Efficiency.
Last year, we conducted an analysis of the payback from BRAC 2005
recommendations. We found that nearly half of the recommendations from
the last round were focused on taking advantage of transformational
opportunities that were available only under BRAC--to move forces and
functions where they made sense, even if doing so would not save much
money. In BRAC 2005, 33 of the 222 recommendations had no recurring
savings and 70 recommendations took over 7 years to pay back. They were
pursued because the realignment itself was important, not the savings.
This ``Transformation BRAC'' cost just over $29 billion and
resulted in a small proportion of the savings from the last round, but
it allowed the Department to redistribute its forces in ways that are
otherwise extraordinarily difficult outside of a BRAC round. It was an
opportunity that the Department seized and Congress supported while
budgets were high. For example, in our consolidations of hospitals in
the National Capital Region and San Antonio areas, we decided to make
the hospitals world class in line with direction from Congress. This
approach was the right approach because it was an approach focused on
healing our wounded and taking care of our men and women according to
the latest health care standards. We could have implemented the
recommendations for a much lower cost by putting two people in a room
and using standard designs, but we did not. Similarly, we chose to
transform the Army's Reserve and Guard facilities by building new Armed
Force Reserve Centers.
The remaining recommendations made under BRAC 2005 paid back in
less than 7 years, even after experiencing cost growth. This
``Efficiency BRAC'' cost only $6 billion (out of $35 billion) with an
annual payback of $3 billion (out of $4 billion). This part of BRAC
2005 paid for itself speedily and will rack up savings for the
Department in perpetuity. It was very similar to previous BRAC rounds
and very similar to what we envision for a future BRAC round. In
today's environment, a $6 billion investment that yields a $3 billion
annual payback would be extraordinarily welcome. In today's
environment, we need an Efficiency BRAC.
In addition to being a proven process that yields significant
savings, BRAC has other advantages. The BRAC process is comprehensive
and thorough. Examining all installations and conducting thorough
capacity and military value analyses using certified data enable
rationalization of our infrastructure in alignment with the strategic
imperatives detailed in the 20-year force structure plan. The merits of
such an approach are twofold. First, a comprehensive analysis ensures
that the Department considers a broad spectrum of approaches beyond the
existing configuration to increase military value and align with our
strategy. Second, the process is auditable and logical which enables
independent review by the Commission and affected communities. In its
2013 report, the Government Accountability Office stated: ``We have
reported that DOD's process for conducting its BRAC 2005 analysis was
generally logical, reasoned and well documented and we continue to
believe the process remains fundamentally sound.''
Additionally, and of primary importance, is the BRAC requirement
for an ``All or None'' review by the President and Congress, which
prevents either from picking and choosing among the Commission's
recommendations. Together with the provision for an independent
commission, this all-or-none element is what insulates BRAC from
politics, removing both partisan and parochial influence, and
demonstrating that all installations were treated equally and fairly.
It is worth noting that the process validates the importance of those
bases that remain and are then deserving of continued investment of
scarce taxpayer resources.
The Department's legal obligation to close and realign
installations as recommended by the Commission by a date certain,
ensures that all actions will be carried out instead of being endlessly
reconsidered. That certainty also facilitates economic reuse planning
by impacted communities.
Finally, after closure, the Department has a sophisticated and
collaborative process to transition the property for reuse. The closure
of a local installation can cause upheaval in the surrounding
community. Therefore, it is important to note that there are advantages
to communities under BRAC that are not provided under existing disposal
authorities, to include involvement in the land disposal process,
availability to acquire property for job creation purposes,
environmental review concentrating on the community's planned uses to
the extent practicable, and the availability of more extensive
community redevelopment/reuse assistance from the Office of Economic
Adjustment. Land disposal outside of BRAC is done on a parcel-by-parcel
basis with no mechanism for taking local planned uses into account.
Additionally, without BRAC conveyance authorities, there is no special
property disposal preference for the local community--by law, the local
community has to stand in line for the property behind other Federal
agencies, the homeless, and potential public benefit recipients.
2. European Infrastructure Consolidation
The Department has been reducing its European footprint since the
end of the Cold War. Generally, infrastructure reductions have been
proportional to force structure reductions, but we haven't taken a
holistic, joint review of our European infrastructure like we have with
BRAC and our domestic bases. In response to our recent requests for
BRAC, Congress made it clear that it wanted DOD to do so.
In January 2013, the Secretary of Defense directed the Department
to conduct a comprehensive review of its European infrastructure in an
effort to create long-term savings by eliminating excess
infrastructure, recapitalizing astutely to create excess for
elimination, and leveraging announced force reductions to close sites
or consolidate operations. Under this comprehensive effort, dubbed the
European Infrastructure Consolidation (EIC) process, we are analyzing
infrastructure relative to the requirements of a defined force
structure while emphasizing military value, joint utilization, and
obligations to our allies.
The Department does not conduct this degree of comprehensive
analyses of its infrastructure on a regular basis, so the learning
curve has been steep. We initially hoped to complete our European
infrastructure review and have recommendations by the end of 2013, but
the learning curve, furloughs, and other resource constraints have
caused delays. The Services did, however, identify and are in the
process of implementing a number of ``quick wins'' in Europe--small
scale, non-controversial closures and realignments that require no
MILCON funding, can be implemented quickly, and produce near term
savings. We are also analyzing a variety of major actions to determine
operational impacts and positive business case results. The analysis
includes the three Military Departments and four joint work groups to
look at the potential for cross-Service solutions. We expect to
complete the analysis in the spring, and I would be happy to brief the
committee in a classified forum on those scenarios we are analyzing.
However, I wanted to highlight one opportunity that is mature enough to
share today.
Scenario: Consolidate intelligence activities to RAF Croughton
One of the efforts that we consider the prototype of the EIC
process is the consolidation of intelligence activities from RAF
Alconbury and RAF Molesworth to RAF Croughton. This is a mature
scenario with a good business case that the EIC Senior Steering Group
reviewed and endorsed early in our analytical process. The
consolidation's funding was programmed and the first project is part of
the fiscal year 2015 request, offering Congress an opportunity to
signal support for consolidation in Europe in this year's bill.
Under this effort, the Department plans to construct a total of
$317 million in new facilities at RAF Croughton, consolidating the six
intelligence organizations currently operating at RAF Molesworth and
providing corresponding support facilities to accommodate the incoming
personnel. The current facilities supporting U.S. and partner nation
intelligence analysis, engagement, and training mission at RAF
Molesworth are inadequate to support current analysis requirements and
require substantial Sustainment, Restoration, and Modernization (SRM)
funding. Support facilities (including schools, housing, fitness
center, etc.) for RAF Molesworth are located 13 miles away at RAF
Alconbury, approximately a 25 minute commute.
The existing mission facilities at RAF Molesworth include 21 widely
dispersed and degraded buildings, providing only 60 percent of the
space authorized by the Unified Facilities Criteria. Total intelligence
personnel number approximately 1,250. The dispersed layout inhibits
intelligence collaboration, while overcrowding contributes to safety
concerns and unhealthy working environment. Short-term repairs and
temporary facilities are used to keep intelligence work areas and
systems functional. The Defense Intelligence Agency (DIA) has spent $30
million in SRM and Under Secretary of Defense for Intelligence and DIA
have spent $60 million for leased modular facilities that require
recapitalization every 7 years--this is not a cost-effective situation.
The consolidation of intelligence missions at RAF Croughton creates
an opportunity for annual recurring savings of $75 million; a reduction
in Restoration and Modernization funding required to alleviate $191
million of SRM backlog; avoidance of $65 million for a DODEA Europe
project at RAF Alconbury; and, reduction of nearly 350 total personnel
(military, civilian, and local foreign nationals). These figures
demonstrate a relatively rapid payback of our upfront investment.
The first phase of the construction is a $92 million project in
this year's funding request.
3. Rebasing of Marines from Okinawa to Guam
One of the most significant and contentious rebasing actions
proposed in recent years is the movement of thousands of U.S. marines
from Okinawa to Guam. The establishment of an operational U.S. Marine
Corps capability in Guam is an essential component of the rebalance to
the Asia Pacific region. It is an important step in achieving our goal
of a more geographically distributed, operationally resilient, and
politically sustainable force posture in the region.
The original agreement established in the May 2006 U.S.-Japan
Realignment ``Roadmap'' included the relocation of approximately 8,600
marines and 9,000 dependents from Okinawa to Guam; construction of the
``Futenma Replacement Facility (FRF)'' on Okinawa, and consolidation of
the remaining forces there by 2014. Under this agreement, Japan agreed
to a cost-sharing arrangement to fund up to $6.1 billion ($2.8 billion
in cash contributions) of the estimated total cost of $10.3 billion
(fiscal year 2008 dollars)--later revised to approximately $19.0
billion. Construction was to occur over a 7 year period after the 2010
Record of Decision and the population was going to peak at
approximately 79,000 in 2014. The plan received significant opposition
in Congress, which raised reasonable questions about the affordability
of this approach.
In 2012, the United States and Japan decided to adjust our
longstanding agreement to station U.S. Marines on Guam from a garrison
( 8,600) to a rotational force ( 5,000 marines/1,300 dependents) with
less marines relocating from Okinawa ( 11,500 will remain). The revised
agreement also de-links the movement of marines to Guam from Japan's
progress on the FRF. The preliminary estimate for the revised agreement
totaled $8.6 billion with Japan providing up to $3.1 billion (fiscal
year 2012 dollars) in cash contributions. There is no longer a date
certain for completion and construction is projected to take 13 years
after the 2015 Record of Decision (contingent on affordability).
In order to implement this plan, the Department is pursuing a
Supplemental Environmental Impact Statement document that reflects
these adjustments, and we expect a Record of Decision in spring of
2015. That document will reflect the significantly reduced strain that
will be imposed on Guam as a result of a much smaller--and much
slower--transition. While the document has not been finalized, it is
reasonable to expect a smaller requirement for mitigation as well.
The Department appreciates the fiscal year 2014 authorization and
appropriation of $85 million for construction of an aircraft hangar for
the Marine Corps at the North Ramp of Andersen Air Force Base and is
requesting $50.7 million for construction of Ground Support Equipment
shops and Marine Wing Support Squadron Facilities at Andersen's North
Ramp. Congress' continued support for cautious progress on this effort
will be seen by Japan as an indication of our commitment to the
realignment.
Although the United States and Japan separated the requirement of
tangible progress on the construction of the FRF before the movement of
marines to Guam could commence, it is important to note that on
December 26, 2013, the Governor of Okinawa approved the landfill permit
request to build the FRF at Camp Schwab-Henoko Bay.
Finally, the National Defense Authorization Act for Fiscal Year
2014 and the Consolidated Appropriations Act for Fiscal Year 2014
included $106.4 million for the Guam civilian water and wastewater
program and $13 million for a Guam public health laboratory. DOD, in
collaboration with numerous Federal agencies, validated the need for
this funding and has begun the planning and design of specific
projects. The President's fiscal year 2015 budget requests an
additional $80.6 million to continue improving Guam's civilian water
and wastewater infrastructure and remedy deficiencies that impact the
public health of DOD personnel. These projects are beyond the financial
capability of Guam to correct, and will provide safer sustainable water
resources and capacity critical not only for the more than 16,000 DOD
personnel currently based on Guam and for future DOD growth and the
increased civilian population induced by the military realignment, as
well as for current residents of the Territory.
4. Facilities Energy Programs
Congress has demonstrated significant interest in the Department's
energy programs in recent years. My portfolio includes the Facilities
Energy segment of the DOD energy portfolio--the electricity, natural
gas, and other energy used to support our fixed installations.
Operational Energy--predominantly fuel for conducting training and
operations of aircraft, ships, ground vehicles, and even tactical
generators--is overseen by the Assistant Secretary of Defense for
Operational Energy Plans and Programs. The Department's facility energy
costs represent approximately $4 billion annually and comprise roughly
half of the Base Operations accounts at our installations; while its
operational energy costs are significantly more than $15 billion
annually.
Below, I discuss three key pillars of our Facilities Energy
program: (1) Energy Efficiency and Demand Reduction; (2) Expand Energy
Production; and (3) Leverage Advanced Technology.
Energy Efficiency and Demand Reduction
The Department's fiscal year 2015 budget request includes
approximately $500 million for investments in conservation and energy
efficiency, most of which will be directed to existing buildings. The
majority ($350 million) is in the Military Components' operations and
maintenance accounts, to be used for sustainment and recapitalization
projects. Such projects typically involve retrofits to incorporate
improved lighting, high-efficiency HVAC systems, double-pane windows,
energy management control systems, and new roofs. The remainder ($150
million) is for the Energy Conservation Investment Program (ECIP), a
flexible MILCON account used to implement energy and water efficiency
projects. In addition to Savings-to-Investment Ratio (SIR) and Simple
Payback, ECIP projects are evaluated on several other criteria, the
Department will revise its ECIP guidance for the fiscal year 2016
program to ensure greater weighting of financial payback factors for
ECIP project evaluation. In addition, we will limit projects to only
those with a positive payback (i.e. SIR >1.0) and ensure the overall
program has an SIR greater than 2.0.
The Military component investments include activities that would be
considered regular maintenance and budgeted within the Facilities
Sustainment, Restoration, and Maintenance accounts. The significant
reductions in that account will not only result in fewer energy
projects, but failing to perform proper maintenance on our buildings
will without question have a negative impact on our energy usage. In
plain terms, upgrades to air conditioning systems will not reduce
energy usage as projected if the roof is leaking or the windows are
broken. Sequestration and BCA budget cuts to the Department's
facilities energy program have negatively impacted the DOD's ability to
meet mandated energy intensity reduction goals. The DOD projects the
Department will catch up and begin meeting its energy intensity
reduction goals in fiscal year 2018.
To offset appropriated funding reductions, the Services have
increased their focus on third-party financing tools, such as Energy
Savings Performance Contracts and Utility Energy Service Contracts, to
improve the energy efficiency of their existing buildings. (With these
tools private energy firms make upgrades to our buildings and are only
paid back out of reduced utility costs.) While such performance-based
contracts have long been part of the Department's energy strategy,
within the last 2 years the Department has significantly increased our
throughput in response to the President's Performance Contracting
Challenge, issued in December 2011.
In addition to retrofitting existing buildings, we continue to
drive efficiency in our new construction. We are implementing a new
construction standard for high-performance, sustainable buildings
issued by my office last year, which will govern all new construction,
major renovations, and leased space acquisition. This new standard,
which incorporates the most cost effective elements of commercial
standards like ASHRAE 189.1, will accelerate DOD's move toward
efficient, sustainable facilities that cost less to own and operate,
leave a smaller environmental footprint, and improve employee
productivity.
Collection of accurate, real-time facility energy information
remains a priority. In April 2013, I issued an Advanced Utilities
Metering policy which sets an aggressive goal for deploying advanced
meters throughout the Department to automatically and accurately
measure electricity, natural gas, water, and steam use. This policy
requires advanced meters be installed to capture 60 percent of the
Department's electricity and natural gas use (with a goal of 85
percent) by fiscal year 2020. It also requires advanced meters
installed on water-intensive facilities and facilities connected to
district steam systems by fiscal year 2020. This will provide data
essential for effectively managing building energy use, identifying
water and steam leaks, and analyzing energy savings opportunities. In
addition, this policy requires meters to be connected to an advanced
metering system to automatically collect, analyze, and distribute
energy data. Further, my office continues to lead the development of an
Enterprise Energy Information Management system that will collect
facility energy and project data in a systematic and timely way, giving
energy professionals at all levels of the Department the advanced
analytical tools that will allow us to both improve existing operations
and identify cost-effective investments.
Expand Energy Production on DOD Installations
DOD is actively developing projects to increase the supply of
renewable and other distributed (on-site) sources of energy on our
installations. Not only does on-site energy help to make our bases more
energy resilient, but the projects we are pursuing will generally
result in lower costs.
There are particular authorities for renewable energy--particularly
the ability to sign power purchase agreements of up to 30 years--that
not only provide incentive for private firms to fund the projects
themselves, but also can provide a good enough business case that they
are able to offer DOD lower energy rates than are being paid currently.
In addition, both Congress and the President have established renewable
energy goals that motivate us to pay closer attention to these
opportunities.
As a result, the Military Services have stepped up their efforts to
develop robust renewable energy programs with a goal to deploy a total
of 3 gigawatts of renewable energy by 2025.
Within the last 3 years, the Department has more than doubled the
number of renewable energy projects in operation with approximately 700
megawatts in place today. The Military Departments are planning for a
number of renewable energy projects over the next 6 years that will
provide an additional 900 megawatts of renewable energy, enough to
power 200,000 American homes. The majority of these projects are solar
projects. Army projects currently underway include Fort Drum, NY (28 MW
Biomass), and Fort Detrick, MD (15 MW Solar PV); recent Navy projects
include Naval Air Weapons Station China Lake, CA (13.8 MW Solar PV) and
the Air Force recently completed a solar project at Davis-Monthan Air
Force Base (16.4 MW Solar PV).
Within my portfolio, I also manage the DOD Siting Clearinghouse,
which reviews energy projects under development on and in the vicinity
of our installations to ensure there is no unacceptable risk to
military mission that cannot be mitigated. From calendar year 2012 to
2013, the Department experienced a 17 percent increase in mission
compatibility evaluations conducted on energy sources and electrical
power transmission systems submitted under the provisions of Section
358 of the Ike Skelton National Defense Authorization Act for Fiscal
Year 2011. While 96 percent of these 2,084 project evaluations
identified no adverse mission impact, the DOD Siting Clearinghouse is
overseeing detailed mitigation discussions on a small number of
projects that would otherwise have impacts. In these discussions, we
attempt to identify solutions that allow projects to proceed without
unacceptably impacting military operations, test, or readiness.
Leverage Advanced Technology
DOD's Installation Energy Test Bed Program consists of 76 active
and 24 completed projects conducted to demonstrate new energy
technologies in a real-world integrated building environment so as to
reduce risk, overcome barriers to deployment, and facilitate widespread
commercialization. DOD partners with DOE and reaches out directly to
the private sector to identify energy technologies that meet DOD's
needs. The fiscal year 2015 budget request includes $21 million for the
Test Bed under the ESTCP.
The Test Bed operates in five broad areas: advanced microgrid and
storage technologies; advanced component technologies to improve
building energy efficiency, such as advanced lighting controls, high
performance cooling systems, and technologies for waste heat recovery;
advanced building energy management and control technologies; tools and
processes for design, assessment and decision-making on energy use and
management; and on-site energy generation, including waste-to-energy
and building integrated systems. The rigorous Installation Energy Test
Bed Program provides an opportunity for domestic manufacturers to
demonstrate the technical and economic feasibility of implementing
their innovative products. These demonstrations provide the credible
evidence needed by investors to commercialize emerging technologies to
serve the DOD and broader markets. Several completed projects
demonstrated energy savings of 20-70 percent for lighting and HVAC
systems, cost-effective solar generation without tax subsidies, and the
need to properly scale waste-to-energy systems.
5. Climate Change Adaptation
The issue of climate change has received increasing attention in
recent months--especially given the release last year of the
President's Climate Action Plan and Executive Order 13653, Preparing
the United States for the Impacts of Climate Change--and I wanted to
take a moment to discuss the Department's approach to addressing this
issue.
It is important to understand that DOD looks at climate change
impacts through the lens of its mission. Using that perspective and
focusing on mission impacts, the changes to the global climate affect
national security in two broad categories.
First, climate change shapes the operating environment and the
missions that DOD must undertake: retreating Arctic ice creates new
shipping lanes and an expansion of the Navy's operating area across the
northern pole; increased storm intensity will lead to increased demands
for humanitarian assistance or disaster response; and changes in
availability of food and water will serve as an instability accelerant
in regions that aren't sufficiently resilient to adapt to those
changes.
In short, climate change will mean more demands on a military that
is already stretched thin.
Second, climate change affects the execution of missions we have
today. Sea-level rise results in degradation or loss of coastal areas
and infrastructure, as well as more frequent flooding and expanding
intrusion of storm surge across our coastal bases. Facilities and
transportation infrastructure are already impacted by thawing
permafrost around our Alaskan installations. The changing environment
increases the threat to the 420 endangered species that live on our
installations, leading to increased probability of training and
operating restrictions. Increased high-heat days impose limitations on
what training and testing activities our personnel can perform.
Decreasing water supplies and increased numbers of wildfires in the
Southwest may jeopardize future operations at critical ranges.
Our warfighters cannot do their jobs without bases from which to
fight, on which to train, or in which to live when they are not
deployed. When climate effects make our critical facilities unusable,
that is an unacceptable impact.
As was made clear in my discussion of energy above, even those
activities that reduce greenhouse gas emissions are justified by the
benefits they bring to our mission capability. Increasing energy
efficiency of our combat systems allows greater performance and lowers
requirements for vulnerable supply lines. Our investments in facility
energy efficiency help to reduce our $4 billion annual facilities
energy bill, or at least slow its increase. In the future, this on-base
renewable energy generation promises the opportunity to increase energy
security and insulate our operations from the vulnerable electric grid.
The result will be fewer greenhouse gas emissions, but that is a co-
benefit. We are focused on the mission benefits of managing our energy
portfolio.
Even without knowing precisely how the climate will change, we can
see that the forecast is for more sea level rise; more flooding and
storm surge on the coasts; continuing Arctic ice melt and permafrost
thaw; more drought and wildfire in the American Southwest; and more
intense storms around the world. DOD is accustomed to preparing for
contingencies and mitigating risk, and we can take prudent steps today
to mitigate the risks associated with these forecasts. These range from
the strategic (DOD's new Arctic Strategy) to the mundane (ensuring
backup power and computer servers are not in basements where facilities
are facing increased flood risk). In 2013, DOD released the Climate
Change Adaptation Roadmap, which highlights a wide range of climate
impacts that affect DOD, and highlights our decision to incorporate
consideration of climate change risks into our existing policies rather
than to create climate change stovepipes within the Department.
Along these lines, we have updated policies on master planning our
installations to minimize construction in low lying areas; emphasized
smart planning in floodplains and water-scarce regions; and revised
guidance on natural resources management to ensure we are accounting
for climate shifts as we protect endangered species on our
installations.
In addition, we are conducting studies of our coastal installations
to assess their vulnerability to extreme weather events and other
climate effects--an analysis that should be complete by July--and we
will subsequently review the vulnerabilities of our inland bases. We
are conducting research on the effects of thawing permafrost on our
Alaskan infrastructure, where we've already seen significant damage to
foundations and road infrastructure. In the southwest, we've seen
initial studies that indicate critical installations could run out of
water within 2 decades. Not only do we need to begin reducing this risk
today, but we need to comprehensively review our installation footprint
to identify similarly vulnerable installations.
In recent years, extreme weather events such as Hurricane Sandy and
derechos have caused power outages, damage from floods, high winds, and
storm surges. Climate change increases the likelihood of such events,
and the DOD must be prepared for, and have the ability to recover from,
utility interruptions that impact mission assurance on our
installations, an ability we characterize as power resilience. In fact,
the policy directing this already exists and we have embarked on an
effort to review installation-level compliance with policies that
require identifying critical loads, ensuring back-up power is in place,
maintaining back-up generators, and storing an appropriate amount of
emergency fuel.
The bottom line is that we are dealing with climate change by
taking prudent and measured steps to reduce the risk to our ability to
conduct missions. We consider climate change an important national
security consideration and one that will affect the Department's
ability to operate in the decades to come.
conclusion
Thank you for the opportunity to present the President's fiscal
year 2015 budget request for DOD programs supporting installations,
facilities energy, and the environment. As you can see, our budget
constraints have required us to accept risk across the portfolio, but
it is risk we are already managing and believe we can manage with this
budget.
We appreciate Congress' continued support for our enterprise and
look forward to working with you as you consider the fiscal year 2015
budget.
Senator Shaheen. Thank you very much.
Secretary Hammack.
STATEMENT OF HON. KATHERINE G. HAMMACK, ASSISTANT SECRETARY OF
THE ARMY FOR INSTALLATIONS, ENERGY, AND ENVIRONMENT
Ms. Hammack. Thank you, Chairwoman Shaheen, Ranking Member
Ayotte, and members of this subcommittee. On behalf of
soldiers, families, and civilians of the U.S. Army, thank you
for the opportunity to discuss our fiscal year 2015 MILCON
budget.
For fiscal year 2015, the Army is asking for $1.3 billion,
which covers MILCON, family housing, and the Army's share of
the DOD base closure account. This represents a 39 percent
reduction from fiscal year 2014. It is part of the overall $13
billion Army budget which includes installation, energy,
environmental programs, facilities sustainment, restoration and
modernization, and our base operations support.
Due to the fiscal reductions required by current law and
the end of combat operations in Afghanistan, the Army is
shrinking our Active component end strength to 490,000 by the
end of fiscal year 2015. The 2014 Quadrennial Defense Review
calls for an Army end strength to decline further to around
450,000 or 440,000. As end strength and force structure
decline, we must assess and right-size the supporting
infrastructure to ensure that training and readiness needs are
met. This requires us to achieve a difficult balance between
maintaining infrastructure with force structure.
Last year, the subcommittee asked when we had last
conducted a capacity analysis, so the Army went ahead with a
capacity analysis at a macro level. The magnitude of excess
capacity showed that with an Army of 490,000, excess Army
capacity will range between 12 and 28 percent, depending upon
the facility category group, with an average of 18 percent
excess. Additional end strength reductions below 490,000 will
increase excess capacity.
As Mr. Conger mentioned, we are all participating in the
European infrastructure consolidation review to address excess
capacity in Europe. The Army has been addressing excess
capacity in Europe for many years. But currently we have 10 to
15 percent excess that we are participating with looking to see
whether there is joint opportunities with the other Services.
We are on track to shrink our overseas infrastructure,
overhead, and our operating budgets.
But in the United States, we need BRAC authorization to do
the same. BRAC is a proven means to address excess capacity in
the United States. Prior BRAC rounds are producing $2 billion
in cumulative net savings to the Army each and every year, and
we achieve recurring savings from the BRAC 2005 round of about
$1 billion a year. We have a clear business case for a BRAC
round in 2017. There is a clear path forward for Congress to
agree to a new round of BRAC.
As Mr. Conger mentioned, the BRAC 2005 round could be
considered as two parallel BRAC rounds, transformation BRAC and
efficiency BRAC. The efficiency BRAC round was the component
that produced half of the savings for the Army. The BRAC 2005
selection criteria reflected DOD's stated goal at that time to
achieve transformation, in addition to savings.
We relocated two large brigade combat teams from Europe. In
Europe, the infrastructure was built by the Germans, funded by
the Germans. A lot of our energy costs were paid for by the
Germans. When we relocated them back to the United States, we
had to build that infrastructure here with American taxpayers'
dollars. We had to operate them with American taxpayers'
dollars and pay for energy costs with American taxpayers'
dollars. The transformation BRAC was part of the BRAC strategy
but not intended to achieve savings.
We look forward to working with Congress to shape the
selection criteria for BRAC 2017 to reflect our need for an
efficiency BRAC round. The Army does have a strong commitment
to reducing our costs, especially our energy costs through
energy and water security measures. We have accelerated our
partnerships for energy and water efficiency with the private
sector through energy savings performance contracts (ESPC). We
have also accelerated our partnerships for renewable energy
with the private sector, and we continue to identify ways to
curb the rapid growth in utility costs through evaluation of
new technologies.
Although the Army is reducing our missions in Afghanistan,
we are not shrinking our focus on operational energy
efficiency. Army missions around the globe, whether
humanitarian assistance, disaster relief, or conflict, require
energy as a critical enabler. Investments in more efficient
helicopter engines that Secretary Burke mentioned extend
operational capabilities. Energy efficient expeditionary
shelters reduce ground resupply logistics. The Army operational
energy modernization investments provide efficient, reliable,
and maintainable systems that increase capabilities and
maintain dominance.
Thank you for the opportunity to appear before you today. I
look forward to your questions on our recommended 2015 budget
and our request for a badly needed efficiency BRAC round in
2017.
[The prepared statement of Ms. Hammack follows:]
Prepared Statement by Hon. Katherine G. Hammack
introduction
Chairwoman Shaheen, Ranking Member Ayotte, and members of the
subcommittee, on behalf of the soldiers, families, and civilians of the
U.S. Army, I want to thank you for the opportunity to present the
Army's fiscal year 2015 Military Construction (MILCON) and Army Family
Housing (AFH) budget request.
The President's fiscal year 2015 MILCON budget request supports the
strategic priorities of developing a globally-responsive and
regionally-engaged Army. We ask for the committee's continued
commitment to our soldiers, families, and civilians and support of the
Army's military construction and installations programs.
overview
The Army's fiscal year 2015 President's budget includes $13 billion
for installation energy, environmental programs, facility sustainment,
restoration, and modernization, base operations support, and MILCON.
This funding will enable the Army to sustain, restore, and modernize
facilities to support the Army's priorities. The Installation
Management Community is focused on providing the facilities necessary
to enable a ready and modern Army. As part of the $13 billion, the Army
is requesting $1.3 billion for MILCON, AFH, and Base Closure Accounts
(BCA). The MILCON budget request represents 1 percent of the total Army
budget. Of this $1.3 billion request, $539 million is for the Active
Army, $127 million is for the Army National Guard, $104 million is for
the Army Reserve, $429.6 million is for AFH, and $84 million is for
BCA.
The budget request reflects an overall 39 percent reduction from
fiscal year 2014 in the MILCON accounts as a result of the reductions
in the Army end strength and force structure. The Army reviewed
facility investments necessary to support the force, taking into
consideration the fiscal reality that we are facing as a Nation: the
Budget Control Act of 2011, the Bipartisan Budget Agreement of 2013,
and the department's strategic shift to realign forces toward the Asia/
Pacific theater. This MILCON budget request reflects the focused
investments necessary in training, maintenance, and operations
facilities to enable the future force of the All Volunteer Army in a
constrained fiscal environment.
army force structure
Fiscal reductions required by the current law, along with the end
of ground combat operations in Iraq and Afghanistan, have put the Army
on a path to shrink its Active Duty end strength from its peak of
570,000 to between 440,000 and 450,000. This is a reduction of 120,000
to 130,000 soldiers, or approximately 22 percent from the Active
component. These reductions will affect every installation in the Army.
The Army must retain our adaptability and flexibility to provide
regionally-aligned and mission-tailored forces in support of national
defense requirements. As the first part of the drawdown, the Army is
reducing its Active component from 45 Brigade Combat Teams (BCTs) to 32
by fiscal year 2015. As part of the BCT reduction, the Army will
reorganize Infantry and Armor BCTs by adding a third maneuver
battalion, and additional engineer and fires capability. The Army will
reduce or reorganize numerous non-BCT units as part of the drawdown.
When we evaluated our initial force structure reductions from
570,000 to 490,000 soldiers, we conducted a Programmatic Environmental
Assessment (PEA), which was prepared in accordance with the National
Environmental Policy Act.
The PEA analyzed potential environmental impacts that could result
from the force reductions, including socioeconomic impacts at specified
DOD personnel reduction thresholds. Following publication of the PEA,
the Army conducted approximately 30 community listening sessions at all
Army installations with military and civilian populations of 5,000 or
more. The community listening sessions gave communities an opportunity
to contribute feedback on socioeconomic impacts associated with force
structure downsizing. Since the Army's Active component end-strength
will decline further than 490,000, the Army initiated a supplemental
PEA analysis in February 2014 to analyze additional potential
population loss scenarios. We will host another round of community
listening sessions associated with these deeper reductions.
facility capacity analysis
As the Army reduces and reorganizes over the next 5 to 7 years, the
Army must gauge the current and future installation capacity that will
be required for a ready and resilient Army. The Army has begun
conducting a facility capacity analysis to determine how much excess
capacity will be available at the enterprise level, as the Army
decrements its end strength. The Army is taking steps to ensure we do
not execute MILCON projects that are in excess of documented
requirements based on the Total Army Analysis (TAA) and programmatic
review of all MILCON facility requirements.
While additional efforts are underway to understand changing
facility requirements as our force structure declines, the Army is
conducting some analyses of real property to support an end strength of
490,000 Active component soldiers (and the accompanying force
structure). Preliminary results indicate that the Army will have nearly
18 percent excess capacity, totaling over 167 million square feet of
facilities spread across our worldwide installations. The Army
estimates it costs about $3 per square foot to maintain occupied and/or
underutilized facilities, which could cost the Army over $500 million a
year in unnecessary operations and maintenance. For some facility
category types, such as small unit headquarters facilities (for example
Company Operations Facilities), the Army has facility shortfalls. We
are reviewing our requirements with an eye towards finding practical,
efficient solutions that meet soldier needs and which we as an Army can
afford.
Additional excess capacity will be created if the Active component
shrinks further, necessitating incremental facility capacity analyses.
Excess capacity will range between 12 and 28 percent, depending on
facility category group, with an average of approximately 18 percent.
We are working now to confirm our excess capacity overseas; our current
focus is in the European area of responsibility.
A year ago, the Secretary of Defense directed the conduct of a
European Infrastructure Consolidation (EIC) review for the specific
purpose of reducing ``expenses by eliminating excess capacity in Europe
while ensuring our remaining base structure supports our operational
requirements and strategic needs.'' The Army is fully engaged in the
conduct of this review. We are active participants in the steering
group governing this work and employing the principles of capacity and
military value analysis, developed originally for Base Realignment and
Closure (BRAC), to guide our work. Our target date to complete the DOD
and Army analysis and evaluation is Spring 2014. Current Army Capacity
Analysis reflects 10 to 15 percent of excess capacity in Europe.
The Army's work in this EIC review is wholly consistent with its
commitment to reducing unneeded infrastructure. Consistent with changes
in both the strategic and fiscal environments, we have been working
aggressively to ensure we achieve the difficult balance between the
cost of maintaining our infrastructure and force readiness. Our
strategy is to: (a) consolidate on larger, more capable installations;
(b) divest older and inadequate infrastructure; and (c) invest in the
remaining footprint in order to provide adequate facilities to
accomplish our mission--while meeting the needs of our soldiers and
their families.
The Army has been downsizing our footprint in both Europe and Asia
for many years in the post-Cold War era. Since 2006, Army end strength
in Europe has declined 45 percent, and we are on track to shrink the
supporting infrastructure, overhead, and operating budgets by over 50
percent. Similarly in Korea, the Army decreased the number of soldiers
by about a third (10,000 soldiers) and is on pace to shrink our acreage
and site footprint by about half.
Overseas, the Army has the tools and authorities we need to
identify and reduce excess capacity. Inside the United States, however,
the best and proven way to address excess and shortfalls in facility
requirements in a cost-effective and fair manner is through the BRAC
Commission process.
The Army continues to need additional BRAC authorization to reduce
excess infrastructure effectively. As the Army's end strength and force
structure decline alongside its available funding, hundreds of millions
of dollars will be wasted maintaining underutilized buildings and
infrastructure. Trying to spread a smaller budget over the same number
of installations and facilities will inevitably result in rapid decline
in the overall condition of Army facilities. Without a future round of
BRAC, the Army will be constrained in closing or realigning
installations to reduce overhead. This ``empty space tax'' of about $3
a square foot on our warfighters will simply result in cuts to
capabilities elsewhere in the budget.
As the committee considers the President's request to authorize
another round of BRAC, I urge the members to think about the following
considerations:
First, if Congress fails to authorize another round of BRAC, this
defense drawdown is likely to repeat a very unfortunate historical
pattern of hollowed-out forces dispersed across hollowed-out
installations.
Second, postponing BRAC does not prevent defense communities from
experiencing the consequences of smaller forces and lower off-post
economic activity. The soldiers and families at the installations will
be gone, and their spending power and requirements will go with them.
Third, postponing BRAC means that excess infrastructure and
civilian overhead cannot be properly addressed at sites experiencing
the biggest reductions of workload. Declining budget targets must still
be met. Therefore, without BRAC, communities hosting our highest
military value installations are likely to see greater negative
economic impacts than they would if the Army could close or realign
some installations.
The Army has the authority to close and realign U.S. installations
outside the BRAC process as long as the congressional notification
thresholds detailed in 10 U.S.C. Sec. 2687 are not triggered.
Historically, however, the Army and Congress together have concluded
that using non-BRAC authority to address excess infrastructure is not
as transparent or economically advantageous to local communities.
Local communities, including those where installations have closed,
have benefitted in many ways from the BRAC property disposal
authorities, as described below in the ``Base Closure Account'' section
of this testimony.
facility investment strategy (fis)
As we shape the Army of 2020 and beyond, through a series of
strategic choices, the Installation Management Community looks to
implement the FIS to provide quality, energy-efficient facilities in
support of the Army Leadership priorities.
FIS provides a strategic framework that is synchronized with the
Army Campaign Plan, TAA, and Army Leadership priorities in determining
the appropriate funding to apply in the capital investment of Army
facilities at Army installations and Joint Service bases across the
country. FIS proposes a cost effective and efficient approach to
facility investments that reduces unneeded footprint, saves energy by
preserving efficient facilities, consolidates functions for effective
space utilization, demolishes failing buildings, and uses appropriate
excess facilities as lease alternatives in support of the Army of 2020
and beyond.
FIS uses MILCON funding to replace failing facilities and build out
critical facility shortages. We apply Operations and Maintenance (O&M)
funding to address existing facilities' repair and maintenance. O&M
Restoration and Modernization funding is used to improve existing
facility quality. O&M Sustainment funding is used to maintain existing
facilities. Demolition and disposal funding is used to eliminate
failing excess facilities. Focused investments from MILCON and O&M
funding will support facilities grouped in the following categories:
Redeployment/Force Structure; Barracks; Revitalization; Ranges; and
Training Facilities. The fiscal year 2015 budget request implements the
FIS by building out shortfalls for unmanned aerial vehicle units, the
13th Combat Aviation Brigade, initial entry training barracks, selected
maintenance facilities, and Reserve component facilities. Additional
departmental focus areas are Organic Industrial Base and Energy/
Utilities.
fiscal year 2015 budget request--military construction, army
The fiscal year 2015 Military Construction, Army budget requests an
authorization of $405.3 million and appropriations for $539.4 million.
The appropriations request includes $58 million to fund the third and
final increment of the fiscal year 2013 Cadet Barracks at the U.S.
Military Academy and $76.1 million for planning and design, minor
military construction, and host nation support.
Barracks ($110 million)
Provides 480 training barracks spaces at Fort Jackson, SC, and
funds the previously discussed cadet barracks at the U.S. Military
Academy, which was fully authorized in fiscal year 2013.
Redeployment/Force Structure ($217.7 million)
Invests $124 million to construct unmanned aerial vehicle hangars
at Fort Irwin, CA; Fort Carson, CO; Fort Campbell, KY; and Fort Drum,
NY, to support the activation of Gray Eagle requirements. Fort Carson
will also receive $60 million for an aircraft maintenance hangar to
support the 13th Combat Aviation Brigade. The Military Ocean Terminal,
Concord, CA, will receive $9.9 million to construct an access control
point in support of ammunition shipments. The remaining $23.8 million
will support other redeployment/force structure requirements.
Revitalization ($135.6 million)
The Army is requesting five projects to correct significant
facility deficiencies or facility shortfalls to meet the requirements
of the units and/or organization mission. Projects include a $5.3
million general purpose maintenance shop at the Military Ocean
Terminal, Concord, CA, to alleviate known safety risks; a $96 million
command and control facility complex, including a sensitive
compartmented information facility, at Fort Shafter, HI; a $16 million
rebuild shop addition at Letterkenny Army Depot, PA; a $7.7 million
tactical vehicle hardstand at Joint Base Langley-Eustis, VA; and a
$10.6 million missile magazine at Kadena Air Base, Japan supporting
Patriot missile storage.
military construction, army national guard
The fiscal year 2015 Military Construction, National Guard (MCNG)
budget requests an authorization of $95.6 million and an appropriation
for $126.9 million. The request includes appropriations for $31.3
million in planning and design and minor military construction. The
MCNG program is focused on the MILCON categories of Modularity and
Revitalization.
Modularity ($38 million)
The fiscal year 2015 budget request provides for a readiness center
in Helena, MT. The project is an addition and alteration to the
existing readiness center, which will address critical space shortfalls
created by force structure changes. The project will facilitate unit
operations, enhancing unit readiness.
Revitalization ($57.6 million)
The Army National Guard budget requests four projects to replace
failed or failing facilities as part of the FIS. This category includes
two vehicle maintenance facilities and two readiness centers. The $10.8
million maintenance facility in Valley City, ND, will improve the
safety and efficiency of operations by replacing the existing facility
that provides only 11 percent of the authorized unit space. An unheated
storage facility included in the project will preserve equipment and
increase readiness. The $4.4 million maintenance facility in North Hyde
Park, VT, combines two undersized facilities into one properly-sized
facility. This new building will meet current standards to create a
safe, productive work environment. In Augusta, ME, multiple repurposed
World War II era facilities will be replaced with a $30 million
readiness center. The $12.4 million readiness center project in Havre
De Grace, MD, replaces a facility built in 1922, originally for a race
track clubhouse, and subsequently acquired by the National Guard. The
new readiness centers will meet existing construction standards and
will be configured and sized for the current units. All four projects
will provide modern facilities to enhance the Army National Guard's
operational readiness.
military construction, army reserve
The fiscal year 2015 Military Construction, Army Reserve (MCAR)
budget requests an authorization of $92 million and appropriations for
$104 million. The appropriations request includes $12 million for
planning and design, and minor military construction. The MCAR program
is focused on the MILCON category of Revitalization.
Revitalization ($92 million)
The fiscal year 2015 Army Reserve budget request includes five
projects that build out critical facility shortages and consolidate
multiple failing and inefficient facilities into energy efficient
facilities. The Army Reserve will construct new Reserve Centers in
California, New Jersey, and New York ($71 million) and an addition to
an existing Reserve Center in Colorado ($5 million) that will provide
modern training classrooms, simulations capabilities, and maintenance
platforms that support the Army Force Generation cycle and the ability
of the Army Reserve to provide trained and ready soldiers when called.
The request also includes a Total Army School System Training Center in
Virginia in support of the One Army School System model ($16 million).
army family housing
The Army's fiscal year 2015 AFH budget request of $429.6 million
includes $78.6 million for construction and $351 million for housing
operations worldwide. The AFH inventory includes 16,009 government-
owned homes, 3,277 government-leased homes, and 86,077 privatized-end
state homes. The Army has privatized over 98 percent of on-post housing
assets inside the United States. All Army overseas family housing
quarters are either government-owned or government-leased units.
Operations ($70.5 million)
The Operations account includes four sub-accounts: management,
services, furnishings, and a small miscellaneous account. Within the
management sub-account, Installation Housing Services Offices provide
post housing, non-discriminatory listings of rental and for-sale
housing, rental negotiations and lease review, property inspections,
home buying counseling, landlord-tenant dispute resolution, in-and-out
processing housing assistance, assistance with housing discrimination
complaints, and liaison between the installation and local and state
agencies. In addition, this account supports remote access to housing
information from anywhere in the world with direct information or links
to garrison information such as schools, relocation information,
installation maps, housing floor plans, photo and housing tours,
programs and services, housing wait list information, and housing
entitlements.
Utilities ($82.7 million)
The Utilities account includes the cost of delivering heat, air
conditioning, electricity, water, and wastewater support for owned or
leased (not privatized) Family housing units.
Maintenance and Repair ($65.3 million)
The Maintenance and Repair account supports annual recurring
projects to maintain and revitalize AFH real property assets. and is
the account most affected by budget changes. This funding ensures that
we appropriately maintain the 16,009 housing units so that we do not
adversely impact soldier and family quality of life.
Leasing ($112.5 million)
The Army Leasing program is another way to provide soldiers and
their families with adequate housing. The fiscal year 2015 budget
request includes funding for 895 temporary domestic leases in the
United States, and 2,382 leased units overseas.
Privatization ($20.0 million)
The Privatization account provides operating funds for portfolio
and asset management and government oversight of privatized military
Family housing. The need to provide oversight of the privatization
program and projects is reinforced in the National Defense
Authorization Act (NDAA) for Fiscal Year 2013, which requires more
oversight to monitor compliance, review, and report performance of the
overall privatized housing portfolio and individual projects.
In 1999, the Army began privatizing family housing assets under the
Residential Communities Initiative (RCI). The RCI program continues to
provide quality housing that soldiers and their families and senior
single soldiers can proudly call home. All scheduled installations have
been privatized through RCI. The RCI program met its goal to eliminate
those houses originally identified as inadequate and built new homes
where deficits existed. RCI Family housing is at 44 locations, with a
projected end state of over 86,000 homes--98 percent of the on-post
family housing inventory inside the United States. Initial construction
and renovation investment at these 44 installations is estimated at
$13.2 billion over a 3- to 14-year initial development period (IDP),
which includes an Army contribution of close to $2 billion. All IDPs
are scheduled to be completed by 2019. After all IDPs are completed,
the RCI program is projecting approximately $14 billion in future
development throughout the 44 locations for the next 40 years. From
1999 through 2013, our RCI partners have constructed 31,935 new homes,
and renovated another 25,834 homes.
The Privatized Army Lodging (PAL) program is the Army's primary
means of revitalizing and building new transient lodging facilities and
providing for their long-term sustainment. Operations and Maintenance
account funds are programmed to provide portfolio and asset management
oversight for PAL. The PAL program is a natural extension of the
success achieved through the RCI. The program conveyed existing
transient lodging assets and executes a 50-year lease for the
underlying ground to a qualified developer and hotel operator. To date,
39 installations are privatized under the PAL program, and will
increase to 41 installations by 2016. PAL encompasses all current
lodging operations in the continental United States, Alaska, Hawaii,
and Puerto Rico, with a projected end state of 14,135 hotel rooms.
Construction ($77.3 million)
The Army's fiscal year 2015 Family Housing Construction request is
for $77.3 million for new construction and $1.3 million for planning
and design. The Army will construct 33 single Family homes at Rock
Island Arsenal, IL, to support senior officer and senior
noncommissioned officer and families. These new homes will enable the
Army to begin to address the housing deficit and to reduce dependency
on leased housing. Additionally, the Army will construct 90 apartment-
style quarters at Camp Walker in Daegu, Korea to replace aged and worn
out leased units with on-post construction to consolidate Families.
base closure account
BRAC property disposal remains an Army priority. Putting excess
property back into productive re-use, which can facilitate job
creation, has never been more important than it is today.
The NDAA for Fiscal Year 2013 consolidated the Prior BRAC and BRAC
2005 accounts into a single DOD Base Closure Account (BCA). The Army's
portion of the fiscal year 2015 BCA budget request is for $84 million.
The request includes $30 million for caretaker operations and program
management of remaining properties, and $54 million for environmental
restoration efforts. In fiscal year 2015, the Army will continue
environmental compliance and remediation projects at various BRAC
properties. The funds requested are needed to keep planned
environmental response efforts on track, particularly at legacy BRAC
installations including Fort Ord, CA; Fort McClellan, AL; Fort Wingate,
NM; Pueblo Chemical Depot, CO; and Savanna Army Depot, IL.
Additionally, the funds requested support environmental projects at
several BRAC 2005 installations, including Fort Gillem, GA; Fort
Monmouth, NJ; Fort Monroe, VA; Lone Star Army Ammunition Plant, TX; and
Kansas Army Ammunition Plant, KS. Completing environmental cleanup is
critical to transferring property back to local re-use authorities for
productive re-use and job creation.
In total, the Army has disposed of almost 224,000 acres (75 percent
of the total acreage disposal requirement of 297,000 acres), with
approximately 73,000 acres (25 percent) remaining. The current goal is
for all remaining excess property to be conveyed by 2021. Placing this
property into productive reuse helps communities rebuild the local tax
base, generate revenue, and, most importantly, replace lost jobs.
BRAC-impacted communities have leveraged planning grants and
technical assistance from the DOD Office of Economic Assistance, as
well as BRAC property disposal authorities, to adjust in ways that are
often not possible outside the BRAC process.
The Newport Chemical Depot in Vermillion County, IN, was closed
during the BRAC 2005 round, and successfully completed the property
transfer process for 7,236 acres in a relatively short period of time.
This allowed the surrounding rural community to remain focused on
redevelopment, and reduced the Army's caretaker costs. In 2013, Scott
Pet Products, Inc., a pet supply manufacturer, opened a 50,000-square
foot manufacturing and distribution facility on this closed
installation, and plans to expand there, which will create new jobs.
Newport Pallet Inc. moved into an 80,000-square foot building at the
site in 2010, and the General Machine and Saw Company announced plans
in February 2013 to move into facilities at the re-designated
Vermillion Rise Mega Park.
At Fort Monmouth, NJ, another BRAC 2005 closure site, the Army has
started transferring property to return it to productive re-use.
Construction crews are progressing ahead of schedule on a new 275,000-
square foot facility to expand the capacity of the software data
storage firm, CommVault. This is the first of several planned
expansions by CommVault, with the potential to create over 1,500 jobs.
The Army successfully transferred the old Paterson Army Health Clinic
parcel in September 2013. The Local Redevelopment Authority (LRA) will
sell it to a healthcare provider (AcuteCare). Locally-stated plans will
create up to 200 new jobs, invest approximately $15 million in
renovations, and will enable the LRA to avoid about $1 million in
planned demolition expenses.
energy
The Army is moving forward to address the challenge of energy and
sustainability on our installations. In fiscal year 2015, the
Installation Energy budget total is $1.6 billion and includes $48.5
million from the DOD Defense-wide MILCON appropriation for the Energy
Conservation Investment Program (ECIP), $79 million for Energy Program/
Utilities Modernization program, $1.47 billion for Utilities Services,
and $8 million for installation-related Science and Technology research
and development. The Army conducts financial reviews, business case and
life cycle cost analysis, and return on investment evaluations for all
energy initiatives.
ECIP ($48.5 million)
The Army invests in energy efficiency, on-site small scale energy
production, and grid security through the DOD's appropriation for ECIP.
In fiscal year 2014, the DOD began conducting a project-by-project
competition to determine ECIP funding distribution to the Services. In
fiscal year 2015, the Army requests $48.5 million for 11 projects to
include 7 energy conservation projects, 3 renewable energy projects,
and 1 energy security project.
Energy Program/Utilities Modernization ($79 million)
Reducing consumption and increasing energy efficiency are among the
most cost effective ways to improve installation energy security. The
Army funds many of its energy efficiency improvements through the
Energy Program/Utilities Modernization program account. Included in
this total are funds for energy efficiency projects, the Army's
metering program, modernization of the Army's utilities, energy
security projects, and planning and studies. In addition, this account
funds planning and development of third-party-financed renewable energy
projects at or below grid parity through the Energy Initiatives Task
Force (EITF). The EITF currently has 8 large-scale renewable energy
projects in the acquisition phase with a potential of over 175 MW of
production capacity.
Utilities Services ($1.47 billion)
The Utilities Services account pays all Army utility bills
including the repayment of Utilities Privatization, Energy Savings
Performance Contracts (ESPCs), and Utilities Energy Service Contracts
(UESCs). Through the authority granted by Congress, ESPCs and UESCs
allow the Army to implement energy efficiency improvements through the
use of private capital, repaying the contractor for capital investments
over a number of years out of the energy cost savings. The Army has the
most robust ESPC program in the Federal Government. The ESPC program
has more than 180 Task Orders at over 75 installations, representing
$1.32 billion in private sector investments and over 360 UESC Task
Orders at 45 installations, representing $568 million in utility sector
investments. We have additional ESPC projects in development, totaling
over $400 million in private investment and $100 million in development
for new UESCs. From December 2011 through December 2013, under the
President's Performance Contracting Challenge, the Army executed $498
million in contracts with third-party investment using ESPCs and UESCs,
doubling historical trends.
Installation Science and Technology Research and Development ($8
million)
Installation Science and Technology programs investigate and
evaluate technologies and techniques to ensure sustainable, cost
efficient, and effective facilities to achieve resilient and
sustainable installation and base operations. Facility enhancement
technologies contribute to cost reductions in the Army facility life
cycle process and support installation operations.
environment
The Army's fiscal year 2015 budget requests $1.149 billion for its
Environmental Programs in support of current and future readiness. This
budget supports legally-driven environmental requirements under
applicable Federal and state environmental laws, BRAC authority,
binding agreements, and Executive orders. It also promotes stewardship
of the natural resources that are integral to our capacity to
effectively train our land-based force for combat.
This budget maintains the Army's commitment to acknowledge the past
by restoring Army lands to a usable condition and by preserving
cultural, historic, and Tribal resources. It allows the Army to engage
the present by meeting environmental standards that enable Army
operations and protect our soldiers, families, and communities.
Additionally, it charts the future by allowing the Army to
institutionalize best practices and technologies to ensure future
environmental resiliency.
sustainment/restoration & modernization
This year's sustainment funding is $2.4 billion or 62 percent of
the OSD Facilities Sustainment Model requirement for all the Army
components. Due to this lower level of sustainment funding, we are
accepting a level of risk in degraded facilities due to deferred
maintenance. Our facility inventory is currently valued at $329
billion.
In keeping with the FIS, the Army continues its investment in
facility restoration through the O&M restoration and modernization
account ($358 million). Our focus is to restore trainee barracks,
enable progress toward energy objectives, and provide commanders with
the means of restoring other critical facilities. The Army's demolition
program has been reduced by 36 percent to $22.7 million, which slows
our rate of removal of failing excess facilities. Facilities are an
outward and visible sign of the Army's commitment to providing a
quality of life for our soldiers, families, and civilians that is
consistent with their commitment to our Nation's security.
base operations support
The Army's fiscal year 2015 Base Operations Support (BOS) request
is $8.6 billion and represents a 17 percent reduction compared to
fiscal year 2013 execution. Although this reduction is in accordance
with the BCA, Army's fiscal year 2015 BOS funding will create
challenges to our installations as they seek to provide a sustainable
base for training and quality of life for our military families. The
Army's fiscal year 2015 installation funding strategy continues to
prioritize Life, Health, and Safety programs and services ensuring
soldiers are trained and equipped to meet the demands of our Nation.
The Army remains committed to its family programs and continues to
evaluate these services in order to maintain relevance and
effectiveness. Ensuring the resiliency of our soldiers and families is
the priority of programs such as Army Substance Abuse Program, Soldier
Family Assistance Centers, and Suicide Prevention.
We continue to seek internal efficiencies/tradeoffs as
sequestration is producing real-life consequences on our installations.
Army continues to face challenges meeting day-to-day installation
readiness requirements. Army installations and local communities felt
the effects of sequestration in fiscal year 2013. Our efforts to
balance expectations and stretch funding involve a contract management
review process that enables better visibility for making decisions on
how to terminate/down-scope, modify, or bundle current contracts to
reduce overhead rates and compete for better rates. Without a reduction
in the number of installations, the Army will be forced to sacrifice
quality of life programs at the expense of maintaining excess capacity.
The cumulative effect of funding reductions over the years stress the
overall quality of life on our installations and adjoining communities
as the Army realigns its military and civilian population and reduces
supporting service program contracts across the garrisons.
intergovernmental support agreements
Under the authority provided in the NDAA for Fiscal Year 2013,
section 331 (codified as 10 U.S.C. 2336), the Services may provide,
receive, or share installation support services with their community
counterparts if determined to be in the best interests of the
department. Key elements include the ability to sole source to public
entities; that State or local government wage grades may be used; and
that the Intergovernmental Support Agreements (IGSAs) serve the best
interests of the Department by enhancing mission effectiveness or
creating efficiencies and economies of scale, including by reducing
costs.
The Army developed an overarching strategy and is following its
implementation plan to use the expanded public-public partnership
authority to enter into IGSAs. An execution order was issued to Army
Commands to collect, benchmark, and analyze data for potential IGSAs.
From the information gathered from the Commands, 29 IGSAs have been
proposed. As of December 2013, four proposals are being developed in
conjunction with local communities. Once complete, the agreements will
be submitted to Army headquarters for final approval. These initial
proposals will assist the Army in developing a standardized process for
identifying, evaluating, and approving IGSAs.
conclusion
The Army's fiscal year 2015 installations management budget request
is a balanced program that supports the Army as it transitions from
combat, and supports our soldiers, families, and civilians, while
recognizing the current fiscal conditions.
The Army's end strength and force structure are decreasing. At
490,000 Active component soldiers, we have initial evidence that the
Army will have about 18 percent excess capacity. The Army needs the
right tools to reduce excess capacity. Failure to reduce excess
capacity is tantamount to an ``empty space tax'' diverting hundreds of
millions of dollars per year away from critical training and readiness
functions.
BRAC is a proven and fair means to address excess capacity. BRAC
has produced net savings in every prior round. On a net $13 billion
investment, the 2005 BRAC round is producing a net stream of savings of
$1 billion a year. In this case, BRAC 2005 is producing a non-inflation
adjusted 7.7 percent annual return on investment. That is a successful
investment by any definition. A future round of BRAC is likely to
produce even better returns on investment. We look forward to working
with Congress to determine the criteria for a BRAC 2017 round.
In closing, thank you again for the opportunity to appear before
you today and for your continued support for our soldiers, families,
and civilians.
Senator Shaheen. Thank you, Secretary Hammack.
We have had a slight change of process. Senator Ayotte has
gone to vote. We are going to keep the hearing going, and when
she returns, I will go vote. I am not sure when Senator Hirono
wants to vote, but that way, we can keep the testimony going
and we will not delay everyone as much.
Secretary McGinn.
STATEMENT OF HON. DENNIS V. McGINN, ASSISTANT SECRETARY OF THE
NAVY FOR ENERGY, INSTALLATIONS, AND ENVIRONMENT
Mr. McGinn. Chairwoman Shaheen, Senator Hirono, you have,
in your opening statements, outlined key important issues that
are relevant to our program for fiscal year 2015.
In the interest of time, I would simply like to submit my
written statement for the record. I look forward to answering
your questions about our program that we believe best supports
giving the funding available to the finest expeditionary force
the world has ever known, our Navy and Marine Corps, and their
families and the civilians that support them.
Thank you very much, madam chairwoman.
[The prepared statement of Mr. McGinn follows:]
Prepared Statement by Hon. Dennis V. McGinn
Chairwoman Shaheen, Ranking Member Ayotte, and members of the
subcommittee, I am pleased to appear before you today to provide an
overview of the Department of the Navy's investment in its shore
infrastructure.
the challenge of ``forward presence'' & achieving balanced investments
From our Nation's infancy, the U.S. Navy and Marine Corps Team has
operated far from our shores to protect our vital security and economic
interests. ``Forward presence'' is no less important today than in 1802
when Congress authorized President Jefferson to ``employ such of the
armed vessels of the United States as may be judged requisite . . . for
protecting effectually the commerce and seamen thereof on the Atlantic
ocean, the Mediterranean and adjoining seas.'' The nature of today's
threats, however, is far more lethal and insidious than 200 years ago.
The means and methods available to those who wish us harm range in
sophistication from advanced nuclear and cyber weaponry to improvised
explosive devices detonated by cell phone. Our Navy and Marine Corps
must be manned, trained, and equipped to deter and respond to
belligerent actors wherever, whenever, and however they strike.
Yet the fiscal imperative to reduce the Nation's debt and control
the deficit introduces additional complexity as the Department strives
to strike the right balance of resources, risk, and strategy. The
Navy's President's budget for fiscal year 2015 (PB 2015) supports the
2014 Quadrennial Defense Review, which embodies key elements of the
2012 Defense Strategic Guidance and is informed by the Strategic
Choices and Management Review completed last year. Fortunately, prudent
infrastructure investments made in prior years will enable the
Department to achieve forward presence without undermining the shore
establishment in the near term. We welcome the additional flexibility
Congress provided in the Balanced Budget Act of 2013, but challenges
remain.
investing in our infrastructure
Overview
Our installations provide the backbone of support for our maritime
forces, enabling their forward presence. The Department is requesting
$10.5 billion in various appropriations accounts, a reduction of $1.6
billion from amounts appropriated in fiscal year 2014 to operate,
maintain, and recapitalize our shore infrastructure. Figure 1 provides
a comparison between the fiscal year 2014 enacted budget and the PB
2015 request by appropriation.
While the overall fiscal year 2015 budget request represents an
appreciable reduction from previous years, it demonstrates continued
investment to enhance combatant commanders' capabilities, continue
support for the introduction of new weapons systems and platforms,
maintain servicemember and family quality of life, and recapitalize
aging infrastructure. The fiscal year 2015 budget also manifests the
Department's commitment to energy security by funding cost effective
efforts that will improve our energy infrastructure and reduce our
consumption.
Military Construction
Our fiscal year 2015 President's budget request of just over $1
billion supports several key objectives of 2014 Quadrennial Defense
Review. For instance, the Navy and Marine Corps are investing
approximately $181 million to enhance warfighting capabilities in the
Asia-Pacific region including: facilities that will support current and
future Marine Corps training requirements on Guam ($51 million);
modifications to existing facilities that enables the Marine Corps to
relocate its unmanned aerial vehicle squadron to Marine Corps Base
Hawaii ($51 million); and a submarine training facility at Joint Base
Pearl Harbor-Hickam, HI ($9.7 million).
Additionally, the Navy is investing over $80.3 million in projects
such to support the basing of the new P-8A Poseidon in Washington State
($24.4 million) and Florida ($21.7 million) that will ensure the United
States remains capable of projecting power in anti-access and area
denial environments. The fourth and final increment of the Explosive
Handling Wharf ($83.8 million) at Naval Submarine Base Bangor and the
Transit Protection System at Port Angeles ($20.6 million), both in
Washington State, support the objective of maintaining a safe, secure,
and effective nuclear deterrent. Finally, the Department is investing
$81 million in laboratories and testing facilities to sustain key
streams of innovation and maintain our technological advantage over
potential adversaries.
The Department continues efforts to reduce our energy costs. The
fiscal year 2015 request includes $47 million to decentralize steam
plants at Naval Base San Diego, installing new gas-fired energy
efficient space and domestic water-heating systems for 10 piers and
approximately 45 buildings. Additionally, the Department will benefit
from nearly $55 million in energy and water conservation projects
funded through the Defense-Wide Energy Conservation Investment Program.
These funds will increase sources of cost effective renewable energy
($14.6 million); improve water conservation efforts ($2.4 million); and
increase energy efficiency in many other locations ($30.7 million).
While the Department plans to invest another $271 million of operations
and maintenance funding in shore energy projects; however, the
reduction of $930 million in SRM/O&M and Base Operating Support (Figure
1 above) from the fiscal year 2014 levels--and compounded by the fiscal
year 2013 sequester--will make the statutory energy intensity goals
more difficult to achieve. Moreover, reduced investments in energy
projects now will result in lost opportunity for savings in the future,
higher utility costs and, ultimately, reduced readiness as funds are
diverted to pay these bills.
Facilities Sustainment, Restoration, and Modernization
The Department of Defense uses a Facilities Sustainment Model to
calculate life cycle facility maintenance and repair costs. Using
industry-wide standard costs for various types of buildings and
geographic areas, the model is updated annually. Sustainment funds in
the operation and maintenance accounts are used to maintain facilities
in their current condition. The funds also pay for preventative
maintenance, emergency response to minor repairs, and major repairs or
replacement of facility components (e.g. roofs, and heating and cooling
systems).
The Navy budgeted $1.3 billion (70 percent of the model) in fiscal
year 2015, an increase of $62 million (7 percent) enabled by the
additional topline provided in the Balanced Budget Act of 2013. The
Marine Corps funds sustainment at 75 percent of the model ($498.8
million), dropping below the DOD goal for the first time since the
criteria was established. Both Services will manage the risk to its
shore infrastructure by prioritizing work to address life-safety issues
and mission-critical facilities in poor condition.
Restoration and Modernization provides major upgrades of our
facilities. In fiscal year 2015, the Department of the Navy proposes a
total investment of $1 billion to restore and modernize existing
infrastructure: $427 million in Military Construction projects, $361
million in Operation and Maintenance funds, and $216 million in Working
Capital funds.
investing in our people
Overview
The strength of our Navy-Marine Corps team lies not in advanced
weaponry or faster, stealthier ships and aircraft. Our naval forces
derive their strength from the sailors and marines who fire the weapon,
operate and maintain the machinery, or fly the plane, and from the
families and civilians supporting them. We continue to provide the best
education, training, and training environments available so our forces
can develop professionally and hone their martial skills. Providing
quality of life is a determining factor to recruiting and retaining a
highly professional force. To this end, we strive to give our people
access to high-quality housing, whether government-owned, privatized,
or in the civilian community, that is suitable, affordable, and located
in a safe environment.
Training and Education
Of the $1 billion request for military construction, the Navy and
Marine Corps together have programmed over $301 million in operational
and technical training and academic facilities. For example, the Navy
will construct facilities to support training for the Littoral Combat
Ships homeported at Naval Station Mayport ($20.5 million) and will
continue efforts begun in fiscal year 2014 to accommodate increased
student loading at the Nuclear Power Training Unit in South Carolina
($35.7 million). Finally, the Department will construct a Cyber
Securities Studies Building ($120.1 million) at the U.S. Naval Academy
to develop sophisticated and technically savvy Navy and Marine Corps
officers able to leverage our strategic advantage in the cyber domain.
Unaccompanied Housing
The Navy plans to make $35 million in operations and maintenance-
funded repairs to its bachelor housing inventory, focusing on the
barracks in the worst condition. The Marine Corps completed its program
of substantial investment in unaccompanied housing in support of the
Commandant's Barracks Initiative. Its fiscal year 2015 investment will
provide new berthing facilities at Naval Weapons Station, Yorktown, VA,
enabling the Marine Corps Security Force Regiment and its Fleet
Antiterrorism Security Teams to continue consolidating various elements
that are dispersed within the Hampton Roads area.
Family Housing
The Department continues to rely on the private sector as the
primary source of housing for sailors, marines, and their families.
When suitable, affordable, private housing is not available in the
local community, the Department relies on government-owned, privatized,
or leased housing. The fiscal year 2015 budget request of $370 million
supports Navy and Marine Corps family housing operation, maintenance,
and renovation requirements, including $16 million to revitalize 44
homes at Marine Corps Air Station Iwakuni, Japan. The budget request
also includes $260.2 million that will provide for the daily operation,
maintenance, and utilities expenses necessary to manage its military
family housing inventory.
To date, over 60,000 Navy and Marine Corps family housing units
have been privatized through the Military Housing Privatization
Initiative. As a result, the Department has leveraged its resources to
improve living conditions for the majority of sailors, marines, and
their families. The Department has programmed $27.9 million to provide
oversight and portfolio management for over 63,000 privatized homes to
ensure the Government's interests remain protected and quality housing
continues to be provided to military families. Although the Navy and
Marine Corps have identified several remaining phases associated with
existing projects, no funds are requested in the fiscal year 2015
budget.
managing our footprint
Overview
It is a basic tenet that the Department of Defense should own or
remove from public domain only the minimum amount of land necessary to
meet national security objectives. Coupled with the fiscal imperative
to conserve resources, especially in this era of deficit reduction, the
Department of the Navy has more than enough incentive to reduce its
footprint both at home and abroad.
European Consolidation
The Navy is completing its evaluation of various basing scenarios,
including joint use, at its four primary bases in Europe: Naval Station
Rota, Naval Air Station Sigonella, and the Naval Support Activities in
Naples and Souda Bay These analyses will inform the basis for DOD
recommendations that are expected to be released in spring 2014.
Base Closure and Realignment
With respect to consolidating our domestic infrastructure, the Base
Realignment and Closure (BRAC) process offers the best opportunity to
assess and evaluate opportunities to properly align our domestic
infrastructure with our evolving force structure and laydown, and the
Department of the Navy supports the administration's request to
authorize a single round of BRAC in 2017. Since the first round of BRAC
in 1988, the Navy has closed 186 domestic installations and activities,
including 52 major installations. Figure 2 demonstrates the evolution
of the Department's force structure since 2005:
The Department has programmed $95 million and plans to utilize an
additional $43 million in prior year funds to continue environmental
cleanup, caretaker operations, and property disposal. By the end of
fiscal year 2013, we had disposed 93 percent of our excess property
identified in prior BRAC rounds through a variety of conveyance
mechanisms with less than 14,000 acres remaining. Here are several
examples of what we were able to achieve in the past year.
In May 2013, the Department conveyed 1,917 acres at the former
Naval Station Roosevelt Roads to the Commonwealth of Puerto Rico Local
Redevelopment Authority under an Economic Development Conveyance
bringing the total property transferred to over 8,521 acres. The same
month, the Department also conveyed the 118 acre Federal City West
Property at Naval Support Activity New Orleans to the Algiers
Development District. The remaining 24 acres of the East Bank Property
was conveyed to the City of New Orleans via an Economic Development
Conveyance in October 2013.
In June 2013, the Department completed the Phase I conveyance of
1,380 acres at the former Naval Air Station Alameda to the City of
Alameda under a No-Cost Economic Development Conveyance. This
conveyance is the first significant transfer of property at NAS Alameda
since 2000.
Overall, the Navy continues to reduce its inventory of properties
closed under BRAC. Of the original 131 installations with excess
property, the Navy only has 21 installations remaining with property to
dispose. We anticipate reducing this number by four installations this
year, with the remainder to be disposed as we complete our
environmental remediation efforts.
Under the previous BRAC efforts, the Navy has been able to realize
approximately $4.4 billion in annual recurring savings. BRAC 2005 alone
resulted in approximately $863 million in annual recurring savings.
Although cleanup and disposal challenges from prior BRAC rounds remain,
we continue to work with regulatory agencies and communities to tackle
complex environmental issues and provide creative solutions to support
redevelopment priorities, such as Economic Development Conveyances with
revenue sharing.
Compatible Land Use
The Department of the Navy has an aggressive program to promote
compatible use of land adjacent to our installations and ranges, with
particular focus on limiting incompatible activities that affect Navy
and Marine Corps' ability to operate and train, and protecting
important natural habitats and species. A key element of the program is
Encroachment Partnering, which involves cost-sharing partnerships with
States, local governments, and conservation organizations to acquire
interests in real property adjacent and proximate to our installations
and ranges.
The Department of Defense provides funds through the Readiness and
Environmental Protection Initiative that are used in conjunction with
Navy and Marine Corps O&M funds to leverage acquisitions and
restrictive easements in partnership with States, local governments,
and non-governmental organizations. Figure 3 represents the activity
and funding for restrictive easements the Department acquired in fiscal
year 2013:
Vital to the readiness of our naval forces is unencumbered access
to critical land, water, and air space adjacent to our facilities and
ranges. The Department understands that energy exploration, on land and
off-shore, plays a crucial role in our Nation's security and are
activities not necessarily incompatible with military training.
However, we must continue to actively work to sustain freedom of
maneuver or avoidance of restrictions to tactical action in critical
range space to ensure the ability of naval forces to achieve the
highest value from training and testing. As an active participant in
the DOD Clearinghouse, the Department of the Navy assisted in the
mission compatibility evaluation of 2,075 proposed energy projects
submitted through the Federal Aviation Administration Obstacle
Evaluation process during calendar year 2013. Ninety-six percent
(1,992) of the projects were assessed to have little or no impact on
military operations. As of December 31, 2013, the remaining 4 percent
(84 projects) were either still under review (76) or assessed to have
sufficient adverse impact to military operations and readiness (8) to
warrant establishment of a Mitigation Response Team (MRT). The MRTs
were established to engage in mitigation discussions with the developer
to determine whether agreements can be reached to prevent negative
impacts to military training and readiness.
protecting our environment
Overview
The Department is committed to environmental compliance,
stewardship, and responsible fiscal management that support mission
readiness and sustainability, investing over $1 billion across all
appropriations to achieve our statutory and stewardship goals. The
funding request for fiscal year 2015 is about 8 percent less than
enacted in fiscal year 2014, as shown in Figure 4. Included in this
request are two military construction projects totaling $58 million: a
replacement for the water treatment plant at Marine Corps Air Station,
Cherry Point, NC ($41.6 million) and a collection system that will
capture industrial process water from the dry docks at Puget Sound
Naval Shipyard for treatment prior to discharge ($16.4 million).
The Department continues to be a Federal leader in environmental
management by focusing our resources on achieving specific
environmental goals, achieving efficiencies in our cleanup programs,
proactively managing emerging environmental issues, and integrating
sound environmental policies and lifecycle cost considerations into
weapon systems acquisition to achieve cleaner, safer, more energy-
efficient, and affordable warfighting capabilities.
Conservation and Military Training are Compatible
Last year, the Department of the Navy highlighted our conservation
achievements on the Navy's San Nicolas Island and San Clemente Island
off the coast of California, which have led to the proposed delisting
of the Island Night Lizard by the U.S. Fish & Wildlife Service from the
Federal list of threatened and endangered species. This delisting
reflected our successful recover efforts for these species and will
also reduce the regulatory encumbrances the Navy experiences at San
Clemente Island--the Navy's premier land, air, and sea combination live
fire range. The Navy appreciates congressional approval in 2014 of our
land withdrawal requests, as this provides us the opportunities to
exercise our stewardship skills which provide for critical military
training lands while simultaneously managing those lands for species
recovery.
relocating marines to guam
Overview
Guam remains an essential part of the United States' larger Asia-
Pacific strategy of achieving a more geographically distributed,
operationally resilient, and politically sustainable force posture in
the region.
Moving Forward
The Department appreciates the limited exceptions provided in the
National Defense Authorization Act for Fiscal Year 2014, as well as the
authorization and appropriation of nearly $86 million for construction
of the Marine Corps hangar at the North Ramp of Andersen Air Force
Base. Together, these provisions will enable the Relocation to stay on
track and support current and future Marine Corps training activity in
Guam and the Commonwealth of the Northern Marianas Islands. The scope
of the ongoing Supplemental Environmental Impact Statement, which the
Department expects to release a draft for public comment in spring
2014, includes the live fire training range complex, alternatives for
the location of the main cantonment area, family housing, and
associated infrastructure. Presently, the Department anticipates
signing a record of decision in spring 2015.
The fiscal year 2015 budget request includes funding for two
military construction projects on Guam for a total investment of $51
million: Ground Support Equipment Shops ($21.9 million) and facilities
for the Marine Wing Support Squadron ($28.8 million). Both projects
support current and future operations and were addressed in the Record
of Decision signed in September 2010.
Finally, the United States and Japan are continuously looking for
more efficient and effective ways to achieve the goals of the
Realignment Roadmap. Toward this end, the Governor of Okinawa signed
the landfill permit request to build the Futenma Replacement Facility
(FRF) at Camp Schwab on December 26, 2013. While the United States and
Japan no longer link the requirement of ``tangible progress'' on FRF
construction to the relocation effort, this is another indication of
Japan's commitment to the Roadmap. Both countries remain steadfast in
maintaining and enhancing a robust security alliance, and the United
States remains committed to enhancing the U.S.-Japan Alliance and
strengthening operational capabilities.
fueling our future
Overview
Power and energy are central to our naval forces and our ability to
be in the right place, around the world. It is what we need to get them
there and keep them there. The Navy has a long, proud history of energy
innovation. From sail to coal to oil to nuclear, and now to alternative
fuels, the Navy has led the way.
The Strategic Imperative
Energy is a national security issue and can be, and is, used as a
geostrategic weapon. Even with domestic oil production up, imports
declining, and new oil and gas reserves being discovered, energy is
still a security concern and military vulnerability. DOD is the largest
single institutional consumer of fossil fuels on earth and budgets
about $15 billion each year on fuel. The more we spend on fuel, whether
from increased consumption or increased unit cost, the fewer resources
we have for maintenance and training. But more importantly, the cost of
meeting our high fuel demand can also be measured in the lives of
marines killed or wounded guarding fuel convoys. During the height of
operations in Afghanistan, we were losing 1 marine, killed or wounded,
for every 50 convoys transporting fuel into theater. That is far too
high a price to pay. Burning cleaner fuel, or burning less fuel, is
better for the environment but that is not our primary incentive. We're
pursuing these alternatives because they can make us better
warfighters.
Under a Presidential Directive, the Department of the Navy is
working with the Departments of Energy and Agriculture to help promote
a national biofuel industry. This past year, under the authority in
Title III of the Defense Production Act (DPA), we took an important
step forward, with a DOD DPA award to four companies which committed to
produce 160 million gallons of drop-in, military-compatible biofuels
each year at an average price of well below $4.00 per gallon, a price
that is competitive with what we are paying today for conventional
fuels. DOD policy and my prior commitment has been that we will only
buy operational quantities of biofuels when they are cost competitive.
This initiative moves us far down that road. At full production,
biofuels combined with conventional fuel at a 50/50 blend hold the
promise of being able to cost-effectively provide our fleet with much
of its annual fuel demand, providing real competition in the liquid
fuels market.
We also continue to develop our energy efficiency through research
and development of more efficient propulsion systems, shore-based power
management and smart-grid technology, and conservation measures. For
example, in the past year the Naval Facilities Engineering Command's
Engineering and Expeditionary Warfare Center provided technology
demonstrators at Camp Lemonnier, Djibouti which reduced fuel
consumption 9 percent base wide, even with a 3 percent increase in
energy demand because of an increased population. At Joint Base Pearl
Harbor Hickam a $2.2 million contract for the Daylight Project was
awarded, which will use sunlight to light warehouse spaces and utilize
photo sensors to automatically turn off lights when daylight levels are
sufficient. In aggregate, fiscal year 2013 energy programs in Hawaii
are projected to save the government $4.7 million a year. The Marine
Corps' development of expeditionary power solutions, through the
Experimental Forward Operating Bases has made them better warriors who
are lighter and more agile in the face of today's global threats.
The Navy has a long and successful history of partnering with
industry to promote business sectors and products important to our
Nation's military and economic security. From the development of the
American steel industry to nuclear power, the Navy has helped the
country develop economically while helping sailors benefit from the
cutting edge of technology to defend our Nation. These programs are
about diversifying fuel supplies, stabilizing fuel costs, and reducing
overall energy needs. In achieving these energy goals, we will maximize
our reach and maintain our global presence and make our Navy and Marine
Corps more combat capable.
conclusion
Our Nation's Navy-Marine Corps Team operates globally, having the
ability to project power, effect deterrence, and provide humanitarian
aid whenever and wherever needed to protect the interests of the United
States. As the threats facing our Nation continue to evolve, the fiscal
reality creates its own challenges in striking the right balance. The
Department's fiscal year 2015 request supports critical elements of the
2014 Defense Quadrennial Review by making needed investments in our
infrastructure and people; reducing our world-wide footprint; and
preserving access to training ranges, afloat and ashore.
Thank you for the opportunity to testify before you today, I look
forward to working with you to sustain the warfighting readiness and
quality of life for the most formidable expeditionary fighting force in
the world.
Senator Shaheen. Thank you.
Ms. Ferguson.
STATEMENT OF KATHLEEN I. FERGUSON, ACTING ASSISTANT SECRETARY
OF THE AIR FORCE FOR INSTALLATIONS, ENVIRONMENT, AND LOGISTICS
Ms. Ferguson. Good morning, Chairwoman Shaheen and
distinguished members of the subcommittee. Thank you for the
opportunity to speak to you today about the Air Force's MILCON,
environmental, energy, and base closure programs. On behalf of
the Secretary of the Air Force, Ms. Deborah Lee James, and the
Chief of Staff of the Air Force, General Mark A. Welsh III,
USAF, I would like to thank the subcommittee for your
unwavering support to the Air Force and our airmen.
The current fiscal environment required the Air Force to
make some difficult choices. We attempted to strike the balance
between a ready force today and a modern force tomorrow. To
help achieve the balance, the Air Force took risk in
installations support, MILCON, and facilities sustainment
programs.
In this budget, the Air Force is asking for $1.9 billion in
MILCON, family housing, and BRAC. This reflects a 28 percent
decrease in MILCON. We deferred infrastructure recapitalization
requirements while supporting combatant commander requirements
and weapons system beddowns like the KC-46 and the F-35. This
budget request also distributes MILCON funding equitably
between the Active, Guard, and Reserve components.
The Air Force is the largest single consumer of energy in
the Federal Government, with over $9 billion spent last year to
fly aircraft and power our installations. In fiscal year 2015,
we are requesting over $600 million for energy initiatives to
identify opportunities and invest in solutions. So far, our
efforts have helped us avoid $2.7 billion in total fuel and
electricity costs just last year, compared to baseline years.
At 86 percent, our aviation fuel represents the largest
share of our energy bill. To address this, the Air Force has a
goal to improve aviation energy efficiency of our fleet by 10
percent by 2020. While there are significant upfront costs to
those improvements, there are also significant long-term
savings. For example, we are working to re-engine the KC-135 by
upgrading the engine's high pressure components. This effort
will improve each engine's efficiency, reliability, and
maintainability, and while it costs nearly $100 million, this
investment is expected to save approximately 85 million gallons
worth of fuel through 2046. Additionally, there are maintenance
savings which will start in 2025, and they should save an
additional $3.1 billion.
The Air Force has also reduced its facility energy
intensity by over 22 percent since 2003, and last year resulted
in savings or cost avoidance of $270 million.
Right now, we are working to meet our target to develop
over $400 million in energy efficiency contracts, and these
projects are a win-win. They address our sustainment shortfalls
and implement new technology and obtain funding through third
party financing.
Last year, 8 percent of electricity came from renewable
energy, which was above our goal of 7.5 percent, and we are
continuing to build on our successes. Just recently, we cut the
ribbon on a 16.4 megawatt solar array at Davis-Monthan Air
Force Base in Arizona, the largest of its kind on any DOD
installation.
My closing topic is BRAC, and the bottom line for the Air
Force is we need another round of BRAC and to support the
fiscal year 2015 President's budget request. While the Air
Force has not done a recent capacity analysis, our analysis
from 2004 estimated that we had 24 percent excess
infrastructure capacity. BRAC 2005 directed the Air Force to
close under 1 percent of our plant replacement value. Since
that time, the Air Force has reduced aircraft by more than 500,
our military end strength by nearly 8 percent, and in our
fiscal year 2015 budget request, have asked to reduce force
structure and military personnel even further. Even though we
have not done an updated capacity analysis, we intuitively know
we have excess infrastructure capacity and continue to spend
dollars maintaining that that could be put toward readiness and
modernization.
In conclusion, the Air Force made hard choices to our
budget formulation. We attempted to strike the delicate balance
of a ready force today and a modern force tomorrow, while
adjusting to budgetary reductions. To help achieve that
balance, the Air Force elected to accept risk in installations
support, MILCON, and facilities sustainment. We believe this
risk is prudent and manageable in the short term, but we must
continue the dialogue on right-sizing our installations for a
footprint that is smaller but more capable.
Members of the subcommittee, thank you for your strong
support of the airmen and men and women of the U.S. Air Force,
Active, Guard, Reserve, and civilians.
This concludes my statement. I look forward to your
questions.
[The prepared statement of Ms. Ferguson follows:]
Prepared Statement by Ms. Kathleen I. Ferguson
introduction
The mission of the U.S. Air Force is to fly, fight and win . . . in
air, space and cyberspace. We do so through our six core capabilities
of air and space superiority, global strike, rapid global mobility,
precision engagement, information superiority, and agile combat
support. These capabilities are enabled and reinforced by our global
network of Air Force installations, and managing those installations
involves understanding and balancing mission requirements, risk, market
dynamics, budgets, and the condition of our assets. As such, the health
of our installations, environment, and energy programs directly
contributes to overall Air Force readiness.
installations
Ready installations are an integral part of ensuring a ready Air
Force. We view our installations as foundational platforms comprised of
both built and natural infrastructure which: (1) serve as enablers for
Air Force enduring core missions--we deliver air, space and cyberspace
capabilities from our installations; (2) send a strategic message to
both allies and adversaries--they signal commitment to our friends, and
intent to our foes; (3) foster partnership-building by stationing our
airmen side-by-side with our coalition partners; and (4) enable
worldwide accessibility in times of peace, and when needed for
conflict. Taken together, these strategic imperatives require us to
provide efficiently operated sustainable installations to enable the
Air Force to support the Defense Strategic Guidance.
In our fiscal year 2015 President's budget request, the Air Force
attempted to strike the delicate balance between a ready force for
today with a modern force for tomorrow while also recovering from the
impacts of sequestration and adjusting to budget reductions. To help
achieve that balance the Air Force elected to accept risk in
installation support, military construction (MILCON), and facilities
sustainment. The Air Force funded facilities sustainment at 65 percent
of the Office of the Secretary of Defense's (OSD) Facilities
Sustainment Model; reduced the restoration and modernization account by
33 percent and MILCON by 28 percent from the fiscal year 2014
President's budget. In doing so, we acknowledge near-term facilities
sustainment, restoration & modernization, and MILCON program reductions
will have long term effects on the health of infrastructure. However,
these reductions are critical to maintaining adequate resourcing across
the Future Years Defense Program for some of the Air Force's unique
capabilities.
In total, our fiscal year 2015 President's budget request contains
$3.32 billion for MILCON, facility sustainment, restoration and
modernization, as well as another $328 million for Military Family
Housing operations and maintenance. For sustainment, restoration, and
modernization, we request $2.3 billion; and for MILCON, we request $956
\1\ million, which is $366 million less than our fiscal year 2014
President's budget request. This decrease in MILCON defers
infrastructure recapitalization requirements while supporting combatant
commander requirements, weapon system beddowns, capabilities to execute
the Defense Strategic Guidance, and distributes MILCON funding
equitably between Active, Guard, and Reserve components.
---------------------------------------------------------------------------
\1\ $956 million is the Total Force funding request including
Active, Guard, and Reserve
---------------------------------------------------------------------------
readiness
Our fiscal year 2015 President's budget request includes vital
facility and infrastructure requirements in support of Air Force
readiness and mission preparedness. Examples of this include
investments in projects which strengthen our space posture at Clear Air
Force Station, AK, and support Total Force cyberspace and intelligence,
surveillance, and reconnaissance projects at several locations
including W.K. Kellogg Airport, MI; Willow Grove, PA; and Des Moines
International Airport, IA.
Consistent with Defense Strategic Guidance, the Asia-Pacific
Theater is a key focus area for the Air Force where we will make key
investments to ensure our ability to project power into areas which may
challenge our access and freedom to operate, and continue efforts to
enhance resiliency. Guam remains one of the most vital and accessible
locations in the western Pacific. For the past 8 years, Joint Region
Marianas-Andersen Air Force Base (AFB) has accommodated a continuous
presence of our Nation's premier air assets, and will continue to serve
as the strategic and operational center for military operations in
support of a potential spectrum of crises in the Pacific.
To fully support Pacific Command's strategy, the Air Force is
committed to hardening critical infrastructure, mitigating asset
vulnerabilities, and increasing redundancy, as part of Pacific Airpower
Resiliency. In 2015, we plan to continue the development of the Pacific
Regional Training Center by constructing a combat communications
infrastructure facility, a Red Horse logistics facility, and a
satellite fire station. These facilities will enable mandatory
contingency training and enhance the operational capability to build,
maintain, operate, and recover a 'bare base' at forward-deployed
locations, and foster opportunities for partnership building in this
vitally important area of the world.
modernization
The fiscal year 2015 President's budget request includes key
infrastructure investments to support the beddown of the F-35A and KC-
46A. Our ability to support the beddowns of our new fighter and tanker
aircraft depends on meeting construction timelines for critical
infrastructure--facilities such as aircraft maintenance hangars,
training and operations facilities, and apron and fuels infrastructure.
This year's President's budget request includes $187 million for the
beddown of the KC-46A at three locations. This consists of $34 million
at McConnell AFB, KS, the preferred alternative for Main Operating Base
(MOB) 1, $111 million at Tinker AFB, OK, for KC-46A depot maintenance,
and $42 million at Pease International Tradeport Air National Guard
Base, NH, the preferred alternative for MOB 2. This request also
includes $67 million for the beddown of the F-35A at two locations,
consisting of $40 million at Nellis AFB, NV, and $27 million at Luke
AFB, AZ.
Our fiscal year 2015 program also supports vital combatant
commander priorities, such as continuation of a multi-year effort to
recapitalize the U.S. Strategic Command headquarters facility at Offutt
AFB, NE, construction of the U.S. Cyber Command Joint Operations Center
at Fort Meade, MD, and construction of the U.S. European Command Joint
Intelligence Analysis Center Consolidation (Phase 1) at RAF Croughton,
United Kingdom.
people
During periods of fiscal turmoil, we must never lose sight of our
airmen and their families. Airmen are the source of Air Force airpower.
Regardless of the location, the mission, or the weapon system, our
airmen provide the knowledge, skill, and determination to fly, fight,
and win. There is no better way for us to demonstrate our commitment to
servicemembers and their families than by providing quality housing on
our installations. We are proud to report that as of September 2013,
the Air Force has privatized our military family housing at each of our
stateside installations. To date, the Air Force has awarded 32 projects
at 63 bases for 53,323 end state homes.
The Air Force continues to manage more than 18,000 government-owned
family housing units at overseas installations. We use Military Family
Housing Operations and Maintenance sustainment funds to sustain
adequate units, and MILCON to upgrade and modernize homes older than
20-plus years, to meet the housing requirements of our airmen and their
families, and the joint servicemembers we support overseas.
Similarly, our focused and efficient investment strategy for
dormitories has enabled the Air Force to remain on track to meet the
DOD goal of 90 percent adequate permanent party dorm rooms for
unaccompanied airmen by 2017. The fiscal year 2015 President's budget
request for MILCON includes one dormitory at Hanscom AFB, MA--our
Dormitory Master Plan's top priority. With your support, we will
continue to ensure wise and strategic investment in these quality of
life areas providing modern housing and dormitory communities. More
importantly, your continued support will take care of our most valued
asset, our airmen and their families.
closures and realignments
We do all of this while recognizing that we are carrying
infrastructure that is excess to our needs. This excess infrastructure
and pending future force structure and personnel reductions make it
clear the Air Force needs another round of Base Realignment and Closure
(BRAC).
While we have no recent excess infrastructure capacity analysis
from which to draw, the Department's capacity analysis from 2004
estimated that the Air Force had 24 percent excess infrastructure
capacity. BRAC 2005 directed the Air Force to close only 8 minor
installations and 63 realignments affecting 122 installations. Since
then the Air Force has reduced our force structure by more than 500
aircraft and reduced our Active-Duty military end strength by nearly 8
percent. So, intuitively we know we still have excess infrastructure.
Since the last BRAC round, we have strived to identify new
opportunities and initiatives that enable us to maximize the impact of
every dollar we spend. Our efforts to demolish excess infrastructure,
recapitalize our family housing through privatization, unlock the
fiscal potential value of under-utilized resources through leasing, and
reduce our energy costs have paid considerable dividends.
Since 2006, we have demolished 44.2 million square feet of aging
building space that was excess to our needs and we estimate the
resultant savings at greater than $300 million. We have demolished
antiquated administrative facilities, ill-suited for today's
technological age; we have eliminated aircraft operations and
maintenance facilities that we no longer need based on reductions to
the size of our aircraft fleet; and we have demolished old and energy-
inefficient warehouse facilities no longer needed due to rapidly
evolving supply chains that reduce the need for localized storage.
Despite our best efforts and the innovative programs, the Air Force
continues to spend money maintaining excess infrastructure that would
be better spent recapitalizing and sustaining our weapons systems,
training to improve readiness, and investing in the quality of life
needs of our airmen. Divestiture of excess property on a grander scale
is a must; the Air Force strongly supports DOD's fiscal year 2015
President's budget request for another round of BRAC.
european infrastructure consolidation
The Secretary of Defense directed a capacity analysis to explore
opportunities for reducing long-term expenses through infrastructure
consolidation in Europe, and the Air Force fully supports this effort.
Since 1990, the Air Force has reduced the number of MOBs in Europe from
25 to 6 and reduced the number of aircraft, personnel, and
infrastructure in Europe by almost 75 percent. Currently, the Air Force
is thoroughly evaluating its European infrastructure. Today we operate
from six main operating bases to support our North Atlantic Treaty
Organization commitments and provide throughput and global access for
six unified combatant commands. We removed one A-10 squadron in Europe
in fiscal year 2013, programmed for the reduction in the level of
operations at Lajes Field, Portugal to better match infrastructure
requirements to mission demand, and divested one Air Control Squadron
and two Air Support Operations Squadrons. Through the OSD-led European
Infrastructure Consolidation study, we are using a comprehensive
process to analyze a variety of scenarios.
environmental
Our environmental programs priorities are to: (1) comply with legal
obligations; (2) reduce risk; and (3) continuously improve. The
President's 2015 budget request seeks a total of $919 million for
environmental programs. This is $127 million less than last year and
reflects savings in two broad areas--centralized program management and
innovative acquisition strategies. Through centralized program
management, Air Force has reduced approximately 12 percent of our
overhead and management costs allowing us to eliminate 270 positions.
Further, our environmental programs are designed to provide the
mission-ready people, infrastructure, and natural resources necessary
to meet mission requirements today and tomorrow.
environmental restoration
Our fiscal year 2015 President's budget request seeks $494 million
in Environmental Restoration funding for cleanup of both current
installations and those closed during previous BRAC rounds. We
established our cleanup program in 1984 to clean-up former hazardous
waste disposal sites on these installations. Our focus has been on
completing investigations and getting remedial actions in place, to
reduce unacceptable risk to human health and the environment in a
prioritized manner. Ultimately, we seek to make real property available
for mission use at our non-BRAC installations, or for transfer and
reuse at our BRAC installations. We believe this balanced approach
continues to serve our mission needs, our regulators' requirements, and
our stakeholders' interests well.
With over 7,100 restoration sites at our non-BRAC installations,
and over 5,800 sites at our BRAC installations, the Air Force has made
progress over time in managing this complex program area. In addition
to regulatory and mission requirements, the DOD has committed to
restoration program execution goals to help ensure an acceptable pace
is maintained in program execution. While our BRAC restoration sites
are on-track to meet the next DOD milestone to have 95 percent
remedies-in-place by the end of fiscal year 2014, our non-BRAC
restoration sites are currently projected to fall 19 percent short of
this goal.
In early 2011, we recognized our performance for this goal at our
non-BRAC restoration sites was not acceptable and put into place a new
policy and a new contracting strategy specifically to improve our
performance. Since a large component of our cleanup program relies on
expertise acquired under contracts, this policy made a change to fixed-
price, performance-based contracts that reward increased use of
innovative technologies and cleanup strategies that consider the total
life cycle cost of getting remedies in place and sites cleaned up.
After 2-plus years of focused effort, our new policy and
performance-based contracting strategy has generated substantial
improvements, but work still remains to meet DOD goals for non-BRAC
installation cleanup. With our new approach, we are finding better
solutions and are cleaning up sites faster with lower projected
lifecycle costs. Due to the efficiency and effectiveness of this
approach, we expect our performance and progress to accelerate over the
next year.
We continue to meet Federal, State, and other stakeholder
requirements in implementing this new approach. We have received
positive feedback from many regulators on our intent and means to
finish clean-up more expediently and more efficiently. Our focus is to
return real property for mission use or reuse under BRAC.
environmental quality
Our fiscal year 2015 President's budget request seeks $425 million
in Environmental Quality funding for environmental compliance,
environmental conservation, pollution prevention, and environmental
technology investments. We have programmed for all known, eligible
environmental quality requirements to keep us in compliance with the
law and allow us to continue to be good stewards of the environment.
In our environmental quality programs, we have refocused our
efforts to streamline and more effectively manage our compliance,
conservation, and environmental planning activities. We have instituted
a standardized and centralized requirements development process that
prioritizes all Air Force environmental requirements in a manner that
minimizes risk to airmen, the mission, and the natural infrastructure.
Our environmental quality budget request follows our prioritized list
and ensures the continued availability of land, air, and water
resources at our installations and ranges so we can train and operate
today and into the future.
The Air Force remains committed to a robust environmental
conservation program in fiscal year 2015. Prior appropriations allowed
the Air Force to invest in conservation activities on our training
ranges, providing direct support to mission readiness. The conservation
program in fiscal year 2015 builds on the efforts of past years to
continue habitat and species management for threatened and endangered
species, improve the inventorying and management of Cold War context
and other historic properties, and enhance our consultation activities
with Native American tribes. The fiscal year 2015 President's budget
request also provides for continued cooperation with other agencies,
like the U.S. Fish and Wildlife Service, to maintain current Integrated
Natural Resource Management Plans, and to operate the Wildland Fire
Center to manage risk from wildfires, enhance ecosystem resilience
through application of prescribed fire, and provide key fire-related
information for planning and incident response.
We will maintain our strong performance as good environmental
stewards complying with legal requirements, reducing risk to our
natural infrastructure, and honing our environmental management
practices. Working together with regulatory agencies, other Federal
partners, and industry experts, the Air Force continuously innovates
and adopts best practices to lessen environmental financial liabilities
and the impact of our operations. We do this to maintain the Air
Force's mission-ready posture and meet combatant commander
requirements. With this approach, we seek the sustainable management of
the resources we need to fly, fight, and win into the future.
energy
Energy is a corner stone of the Air Force's ability to maintain
global vigilance, reach, and power which requires a robust energy
security posture. Energy security means ``having assured access to
reliable supplies of energy and the ability to protect and deliver
sufficient energy to meet operational needs.'' To enhance its energy
security, the Air Force is focused on four priorities:
(1) Improve resiliency to ensure the Air Force has the ability to
recover from energy interruptions and sustain the mission,
(2) Reduce demand through operational and logistical efficiencies
and new technologies, without losing mission capabilities,
(3) Assure supply by diversifying the types of energy and securing
the quantities necessary to perform its missions, and
(4) Foster an energy aware culture by increasing our airmen's
understanding of energy and its impact to the mission.
budget impact
The Air Force is the largest single consumer of energy in the
Federal Government. As energy costs increase and budgets decrease,
energy places greater pressure on the Air Force budget. In fiscal year
2013, the Air Force spent approximately $9 billion on fuel and
electricity, with over 85 percent of those costs dedicated to aviation
fuel. That $9 billion represented over 8 percent of the total Air Force
budget, and this is only expected to increase in future years as the
price of energy continues to rise. Every dollar the Air Force does not
need to spend on energy allows the Air Force to invest that dollar into
enhancing a high quality and ready force.
As part of our ongoing effort to achieve our energy vision to
sustain an assured energy advantage, the Air Force is requesting over
$614 million for targeted energy initiatives in fiscal year 2015. This
includes $24.5 million for aviation energy, over $60 million for
facility energy initiatives, and $193.7 million for materiel
acquisition and energy research, development, test, and evaluation
opportunities. Additionally, over $200 million of our facility
sustainment, restoration, and modernization projects will have
additional energy savings as a secondary benefit by updating
inefficient infrastructure and building components. While these energy
improvements are small on a project-by-project basis, collectively they
make a meaningful contribution to reducing the Air Force's energy
consumption and build upon the nearly $855 million the Air Force has
invested for such projects over the last 4 years.
Although sequestration in fiscal year 2013 deferred the spending of
the $216 million energy focus fund until late in the fiscal year, the
Air Force did fund 135 of the planned 220 projects to improve our
facility energy efficiency. The savings from these investments are
expected to begin in fiscal year 2015, and the majority are expected to
payback before or just shortly after the Future Years Defense Program.
However, the delay due to sequestration may cause the Air Force to miss
its 2015 target year energy intensity reduction of 30 percent.
Additionally, sequestration deferred spending on facility audits,
advanced meter and advanced meter reading system installations, and
delayed utilities privatization contract awards.
energy conservation
The Air Force takes a centralized asset management approach in
infrastructure investments, which has led to a reduction in our overall
facility energy intensity by more than 22 percent since fiscal year
2003. However, the 67 percent increase in energy unit costs over that
same period has resulted in a relatively stable amount the Air Force
spent to power its facilities since fiscal year 2006. Nonetheless, our
energy conservation efforts have helped the Air Force cumulatively
avoid over $1.7 billion in facility energy costs since 2003, enabling
the Air Force to use those funds to increase mission effectiveness.
The Energy Conservation Investment Program (ECIP) is a critical
element of the Air Force's strategy to improve the energy performance
of its permanent installations. The Air Force fiscal year 2014 program
includes 12 ECIP projects totaling $35.1 million. The Air Force fiscal
year 2015 program submitted to OSD includes 14 projects totaling $40.8
million. The Air Force is also looking to reduce demand by using
smarter construction methods that maximize energy efficiency and use
environmentally-friendly materials while continuing our initiative to
identify and demolish 20 percent of our old, unnecessary, and high-
energy use facilities by 2020.
By reducing our aviation fuel consumption more than 24 percent
since fiscal year 2006, the Air Force avoided almost $2.5 billion in
aviation fuel costs in fiscal year 2013, compared to fiscal year 2006.
Moving forward, the Air Force is looking towards an efficiency goal to
improve our aviation productivity by 10 percent by fiscal year 2020. At
our installations, the Air Force spent more than $1 billion in fiscal
year 2013 for facility energy. However, without our efforts to reduce
consumption over the last 10 years, our facility energy bill would have
been over $270 million higher last year.
renewable energy
The Air Force is looking to improve its energy security and
diversify its energy supply through the increased use of renewable
energy. In fiscal year 2013, 8 percent of the electrical energy used by
the Air Force was produced from renewable sources, and the amount of
renewable energy used by the Air Force continues to increase every
year. Moving forward, our goal is to develop 1,000 megawatts (MW) of
renewable energy capacity on our installations. By making the most of
private sector knowledge, technology, and financing, we plan to
capitalize on underutilized land on our installations to develop those
projects. Currently, the Air Force has 256 renewable energy projects in
operation across a wide variety of renewable energy sources, including
wind, solar, geothermal, and waste-to-energy projects, increasing
energy production by over 53 percent from 2012 to 2013. This year, we
are planning projects that are expected to provide over 31 MW of
capacity, with another 31-41 MW of capacity planned for fiscal year
2015.
The Air Force is not limiting its efforts to renewable energy
projects, but is also incorporating alternatively fueled ground
vehicles into our fleet. With the support of private and public
stakeholders, the Air Force is currently working to develop an all-
electric vehicle fleet at Los Angeles AFB, CA, the first Federal
facility to replace 100 percent of its general-purpose vehicle fleet
with electric vehicles. Additional vehicles are slated for several
other DOD installations, including Joint Base Andrews--Naval Air
Facility Washington and Joint Base McGuire/Dix/Lakehurst.
third-party financing
While the Air Force has made considerable progress to reduce our
energy consumption and increase our energy diversity, there is still
more to do. The Air Force is pursuing a third-party financing approach
for both renewable and energy conservation projects.
Direct Air Force renewable energy project funding through Air Force
capital sources is rarely cost-effective when compared to commercial
utility rates. To address this, the Air Force is using existing
authorities, such as Enhanced Use Leases and Power Purchase Agreements,
to attract private industry to develop renewable energy projects. We
see tremendous potential for third-party investments to construct on-
base renewable projects.
The Air Force is reinvigorating third-party financing to fund
energy conservation projects through Energy Savings Performance
Contracts (ESPC) and Utility Energy Service Contracts (UESC). Since
fiscal year 2012, the Air Force awarded $94 million in such contracts,
improving our energy conservation with no upfront capital required.
Over the next 2 years, the Air Force anticipates awarding five ESPC and
five UESC projects. These projects will help the Air Force achieve its
goal under the President's Federal Energy Performance Contracting
Challenge.
conclusion
The Air Force made hard strategic choices during formulation of
this budget request. The Air Force attempted to strike the delicate
balance between a ready force for today with a modern force for
tomorrow while also recovering from the impacts of sequestration and
adjusting to budget reductions. To help achieve that balance the Air
Force elected to accept risk in installation support, MILCON, and
facilities sustainment. We believe this risk is prudent and manageable
in the short-term, but we must continue the dialogue on right-sizing
our installations footprint for a smaller, more capable force that sets
the proper course for enabling the Defense Strategy while addressing
our most pressing national security issue--our fiscal environment.
In spite of fiscal challenges, we remain committed to our airmen
and their families. The privatization of housing at our stateside
installations provides our families with modern homes that improve
their quality of life now and into the future. We also maintain our
responsibility to provide dormitory campuses that support the needs of
our unaccompanied airmen.
Finally, we continue to carefully scrutinize every dollar we spend.
Our commitment to continued efficiencies, a properly sized force
structure, and right-sized installations will enable us to ensure
maximum returns on the Nation's investment in her airmen, who provide
our trademark, highly valued airpower capabilities for the joint team.
Senator Shaheen. Thank you very much, Ms. Ferguson. Thank
you all for your testimony.
Everyone, except Secretary McGinn, has mentioned BRAC as
part of their testimony, so I want to begin with that.
I know, Mr. Conger, you did a good job of explaining and
describing the difference between the transformational aspects
of the 2005 round and the savings aspects. But looking at GAO's
report, they pointed out that even in the savings round, that
the costs of the 2005 BRAC changes were 15 percent higher than
were projected.
I wonder if you could respond to that, why those were
higher, and then if you could talk about whether you are
beginning or have developed an estimate for what the
implementation costs would be for another round in 2017 and
when the real savings would actually begin.
Mr. Conger. Sure. First, on cost escalation, there are a
variety of factors that drove those costs up. For the most
part, the costs that increased during the last BRAC round were
driven by additional requirements in MILCON, whether it was
because renovations turned into construction projects or new
requirements were placed on DOD. One of those examples is the
world-class hospitals requirement. It was added during the BRAC
round and literally added billions of dollars of costs to the
implementation. But that said, that is not the only factor.
What the GAO said was that it was more specific than
systemic when it came to those cost escalations. You can
account for the preponderance of the cost increases at a
relatively small number of the recommendations.
We are hopeful. The preponderance was in the transformation
section of the BRAC round. We are hopeful that we can mitigate
and minimize those. But it is a fair point, and we have to keep
our eyes open.
One example is the information technology (IT) costs. IT
costs were higher than anticipated. We have learned a lesson
from that, and our cost projections going forward will
accommodate a larger investment in IT for these
recommendations.
Senator Shaheen. Can I just ask you why were IT costs
higher than anticipated?
Mr. Conger. I do not have the detail at my fingertips, but
I think we did not fully model the costs for IT in that
environment.
Senator Shaheen. Again, to the second part of the question,
have you begun to estimate what implementation costs would be
for another round?
Mr. Conger. We have an estimate and we have programs within
DOD's FYDP. For a BRAC round, if it started in 2017, it would
cost $6 billion to implement. It would cost $2 billion in the
initial years. Keep in mind that as you begin the
implementation of a BRAC round and you get closures early in
the round, savings would appear as well, early in that BRAC
round. By about the third year, savings would outweigh costs.
By the end of the 6 years, we anticipate the cumulative savings
would be about a wash. It would cost about $6 billion, but we
will have already saved $6 billion at that point in time.
This is all based on a projection of an approximately 5
percent reduction in plant replacement value. It is not
specific installations that we are looking at or anything like
that.
Senator Shaheen. I apologize. We are about to run out of
time on this vote. I am going to have to recess the hearing for
a few minutes until Senator Ayotte comes back. [Recess.]
Senator Ayotte [presiding.] Hi, everyone. We are obviously
dividing today and trying to make the most of the time before
us. I appreciate all of your patience.
I wanted to ask all of you what steps you are taking to
prepare to prevent and respond to threats to personnel and
facilities in light of not only the 2009 Fort Hood shooting,
but also last year's shooting at the Washington Navy Yard and
last week's shooting at Naval Station Norfolk. Obviously, our
thoughts and prayers go to all those who have been affected by
those incidents. But I think it raises this idea of insider
threats and how your Services are addressing those threats.
Mr. McGinn. Senator, thank you. That is a very important
question.
Much of the information related to what not only the
Department of the Navy but, indeed, DOD is doing to recognize
and mitigate these threats is contained in a package that was
sent to the committee the week before last. Secretary Hagel and
Secretary Mabus rolled out the results of all of the
investigations that have been conducted in the wake of the Navy
Yard shooting. These include the judge advocate general manual
investigation report that Admiral John Richardson did for the
Secretary of the Navy, and two reports for Secretary Hagel, one
an internal report that was done under the guidance of Mr.
Vickers, and another one that was done by former Admiral Olson
from Special Operations Command and Mr. Stockton, a former
member.
In the package that was sent up is a list of all of the
recommendations, and in the case of the Department of the Navy,
the actions that have been taken. Screening people for
clearance, access, physical security, and anti-terrorism
efforts have already been taken and will be taken in the future
for the ones that have not already been implemented.
I would like to just point out that as tragic as the
shooting was last week in Norfolk, and I was aboard the naval
station when that happened, there was a difference. That was
not an insider threat, but rather someone who was a proven
criminal that got unauthorized access through circumstances
that are being investigated now. The results were tragic.
But I assure you, this has the attention of everybody in
the Department of the Navy, indeed, in talking with my
colleagues in DOD and other Services, to take actions that help
us identify threats and mitigate them.
Senator Ayotte. Does anyone else want to comment on that?
Ms. Hammack. Yes. All the Services are working together on
this, have reviewed the report, and are working jointly to
identify actions to take.
One of the things that Secretary McGinn mentioned is
identifying and deterring potential hostile actors before they
have a chance to act. One of the recommendations in the report
was a continuous evaluation process of security clearances
versus the current 5- to 10-year periodic reevaluation system.
That will help ensure that potential problems are flagged and
dealt with in a more timely manner.
Senator Ayotte. I appreciate that. I also serve on the
Senate Homeland Security and Governmental Affairs Committee,
and Senator Collins, Senator Heitkamp, and I have a bill that
would require periodic random auditing rather than the 5- to
10-year window. When we look at the situation with the Navy
Yard, obviously things can change pretty dramatically over a 5-
to 10-year window, particularly with the history that we saw
there. I hope that DOD will consider taking a look at our
legislation as a tool as well.
I agree with you that we do need to have more regular
vetting of these security clearances for those who have access
to our most sensitive facilities and also, most importantly,
our personnel. But I also think we are in a position where
there needs to be more regular auditing and also with the
contractors that we are working with. I think that is a
significant issue to ensure that to the extent we are working
with contractors, that they are sufficiently accountable to us.
I think that needs to be reviewed as well.
I appreciate that all of you have a priority on that.
Secretary McGinn?
Mr. McGinn. Senator, one other thing related to your other
committee's work. There was an additional report called ``The
120-Day Report'' that was managed by the Office of Management
and Budget and the Office of Personnel Management that would be
very relevant to overall Homeland security. It certainly
affects DOD. We participated very actively in the development
of that report and its recommendations.
But to the point about continuous evaluation and not
letting folks have clearances that just go un-reinvestigated
for a long time--I think we are moving quickly beyond that.
Senator Ayotte. Yes, and I think that Congress will move
quickly on that with you. I appreciate that.
I raised in my opening statement an issue related to the
Portsmouth Naval Shipyard. That is two projects that I
mentioned in the opening statement. One is the P285 barracks
project that has been tentatively delayed from fiscal year 2015
to 2016 and the P309 rail project that has been delayed from
2016 to 2017.
I am hoping, Secretary McGinn, that you can comment on
these projects. I would also like to see a list of delayed
projects that are for public shipyards, but also, obviously,
any comment you have to make on these two particular projects.
Also, on this issue of the 6 percent in MILCON funding as
required by the law, if you could comment on the minimal
capital investment plan. I would like an answer to the question
of whether the Navy plans to comply with section 2476 of title
10 on this 6 percent issue. If you are able to answer that, I
would appreciate it.
Mr. McGinn. On the first point about the projects, I would
like to take that question for the record and give you some
detailed information on that.
[The information referred to follows:]
The naval shipyards are essential to meet operational requirements,
and the Navy is committed to sustaining and recapitalizing shipyard
infrastructure. Yet, fiscal constraints and competing priorities have
caused the Department to delay some Military Construction projects at
the naval shipyards in our 2015 budget request, including P285 for
barracks and P309 for rail improvements at Portsmouth Naval Shipyard.
Mr. McGinn. Regarding the 6 percent, we will do our utmost
in the execution year of 2015 to meet that criteria. We fully
intend to comply with the requirement.
At Portsmouth, as in all of our public shipyards, the
throughput is absolutely critical to getting the kind of
product out there in the fleet. You mentioned submarines in
particular, but new ship construction as well and refitting. We
recognize that we cannot take too much risk too much longer in
any of our infrastructure projects, but especially our
shipyards and aviation depots.
Senator Ayotte. I appreciate that and I look forward to the
more detailed answer.
My time is up, so I would like to turn it over to Senator
Hirono.
Senator Hirono. Thank you very much.
I want to start by saying that I am disappointed in the
overall MILCON reductions, as I am sure all of you are, but I
do understand the need to help shore up our operations and
readiness accounts.
That said, Mr. McGinn, you just mentioned that you do have
a concern about the MILCON cuts to our shipyards, and of
course, we have Pearl Harbor in Hawaii. I hope that the risks
taken on by delaying some of these projects will be mitigated
as additional MILCON funds become available through other
efficiencies or sources. One of the opportunities to increase
these available resources is to attain energy savings, and all
of you have talked about that.
My question is to Ms. Burke. At the end of your testimony,
you state that ``institutional change within DOD, which is the
biggest energy user, is difficult, timeconsuming, and not for
the faint of heart.'' Recognizing that your office was only
established in 2010, would you say that DOD has learned from
the operational energy challenges it has had to address over
the last decade? Is the memory of the impact of energy price
spikes, in-theater threats to fuel convoys, and other
constraints placed on DOD by its energy needs being fully
internalized and included in the future planning to the degree
that it should be? If so, how? Can you describe briefly what
everybody is doing to make sure that energy savings is very
much a part of the decisionmaking within DOD?
Ms. Burke. Thank you, Senator Hirono. You have been a great
champion of energy security, so we have appreciated your
support.
One of the reasons in my written statement that I said that
this kind of institutional change is so difficult is because
you cannot just buy something to fix it. You have to get into
the whole process of how we plan for the future and incorporate
energy as a consideration.
When it comes to operational energy, the number one
consideration is always going to be capability, which is what
we need to do in order to get the mission done. That is where
we are looking to press for innovation and for change, to make
sure we have the energy we need and that we are using the very
best options to get the mission done. We want more range. We
want more endurance. We want a lighter footprint in terms of
our logistics and our supportability. Those are all things
that, as we have seen in Iraq and Afghanistan, are important
both in terms of the volume of fuel we are putting on the
battlefield but also the fuel at the last tactical mile where
it is not a lot of volume, but it is the hardest fuel to get to
the warfighter.
Our number one goal is to improve the mission and the
capabilities when it comes to operational energy. We often
achieve savings in the process, but it is not the number one
goal. The number one goal is to support the warfighter.
Yes, I think we have learned those lessons, but
incorporating them is not an easy prospect because you have to
get into how we conduct war games, how we conduct requirements
generation, and how we plan with our operational planning and
with our scenario planning. All those things are improved. All
these people at the table have put a great deal of time and
effort to changing the processes, and we will see a change in
the demand signal for a more efficient force and a force that
takes advantage of a greater range of technologies.
Senator Hirono. For the other members of the panel, would
you say that in the Army, Air Force, and Navy that energy needs
and the efficiencies that we should attain are being
internalized?
Ms. Hammack. From the Army's standpoint, I would say they
are being internalized.
What is challenging to many is they see the energy costs on
our installations as one of those almost uncontrollable
budgets. One base that I was at last week said that their
energy consumption had declined 37 percent in the last 6 years,
but over the same time period, their energy costs went up 57
percent. They are working very hard on efficiency, and that is
helping to curb some of the rapid growth in energy costs. That
is why we have such a focus on renewable energy because that
helps dampen some of the costs that are driven by dramatic
increases in fossil fuel.
But in operational energy, that is one of the areas that
our soldiers are seeing immediate returns. There is a forward
operating base that we worked with in Afghanistan, that was
getting an aerial resupply every 3 days. That meant every 3
days, they had to stop fighting. They had to secure a drop zone
to pick up fuel. With energy efficiency and operational
efficiency, we brought it to one air drop every 10 days. That
is direct impact on mission, as Secretary Burke mentioned, and
that is what helps institutionalize energy measures. It has a
direct return to mission capability.
Senator Hirono. I would say that probably the energy costs
in the installations are very obvious, and there are things
that all of you are doing to decrease those costs, and you are
probably doing that in partnership with the private sector. To
the extent that you are dependent on the grids that are already
there, you are doing work in that area also. I know that you
are all nodding your heads. I assume that all of you are doing
similar kinds of things to attain energy efficiencies.
I have a continuing concern about DOD's ongoing commitment
to energy efficiency. Climate change is here. There was a
recent report that acknowledged climate change and the impacts
on energy costs. For all of you, and particularly for Secretary
Burke, how important is research and development (R&D) in the
energy side of things?
Ms. Burke. R&D and test and evaluation is a very important
part of the investment that we make. Certainly, my office has a
specific fund that we manage for those purposes and we look at
where the gaps in funding are that we can help address. Those
investments are looking across the board for everything from
better engine and propulsion systems technologies to better
materials. We are looking at materials that reduce drag on
aircraft, for example. We have test and evaluation investments
for alternative fuels, of which I know you are very aware. We
have investments in R&D across the board that are really
important for our future capabilities in this area. Our Under
Secretary for Acquisitions, Technology, and Logistics has gone
to great lengths to protect those investments.
Mr. McGinn. Senator, we think, all of us, in three
different dimensions related to energy efficiency or
alternative energies. We certainly talk about the technology,
and that seems to start the conversation. But equally important
are partnerships, partnerships among our Services, partnerships
in the Federal Government, for example, the Navy's partnership
with the Departments of Agriculture and Energy for our biofuels
program, and especially partnerships for energy efficiency with
the private sector, third party financing, ESPCs, and utility
energy savings contracts. We want to use all of these
partnerships to further our goals.
The last area, and perhaps in some ways the most important,
is culture. We all have very aggressive programs to educate and
increase the awareness at every level, every member of DOD
about energy and how it directly relates, as Ms. Burke pointed
out in her statement, to warfighting capability and operational
efficiency.
Senator Hirono. Thank you. My time is up. Thank you, Madam
Chairwoman.
Senator Shaheen. Thank you.
Senator Kaine.
Senator Kaine. Thank you, Madam Chairwoman.
I appreciate the witnesses being here. I was coming from
another hearing, and I am going to apologize because I suspect
I will repeat a little bit of what might have been asked
before.
Secretary McGinn, in particular, I want to talk about the
incident at the shipyard last week. I think Senator Ayotte may
have talked with you about it as well.
It was a horrible thing, this Petty Officer Mayo in
Norfolk. It really rocked the community there, and I know it
rocked the entire DOD world. In the aftermath of the shooting
last fall at the Navy Yard here, it raised a lot of questions
about the issuance of these Transportation Worker
Identification Credential (TWIC) access permits, but more
broadly, are we doing what we need to do.
If you could, address this TWIC issue and how this
individual was able to get one of these identifications with a
criminal record, to the extent that you can talk about details.
I am sure there is an investigation that is ongoing. But then
talk more generally about what you are doing to try to make
sure that our installations are as secure as possible.
Mr. McGinn. Yes, Senator. The Secretary of Defense and the
Secretary of the Navy, Ray Mabus, released the results of three
investigative reports the week before last. They were
precipitated by the tragedy that happened on September 16 here
in the Washington Navy Yard. The package that was sent to the
committee includes all of those investigative reports, which
have a long list of actions that have been taken or are
underway to increase our security on bases, whether that is
physical security or the clearances to help diminish the threat
from insider threats, for example.
Last Monday, I was at Naval Base Norfolk when that tragedy
occurred, and as you rightly point out, Petty Officer Mayo, the
sailor who was killed, was absolutely a hero. He saved a
shipmate's life.
We are looking at that with a great deal of scrutiny,
trying to see if there were lessons learned from the Washington
Navy Yard shooting that could have or should have been applied.
We think that there is a significant difference. This was an
outside threat who, by the way, was unarmed, entered an
unauthorized area and ultimately made it to the ship's
quarterdeck. But we will take a strong look, including the type
of documentation he had, this so-called TWIC card, to help him
gain access through the main gate at Naval Base Norfolk.
I will be happy to provide a more detailed response on
exactly what we are doing about that type of transportation
pass that allows some of our trucking agencies to get onboard.
[The information referred to follows:]
The Navy is supporting the Department of Defense (DOD) Physical
Security and Policy Branch review of all security procedures for access
control, including the Transportation Worker Identification Credential
(TWIC). DOD authorized the use of the TWIC primarily for those
transportation personnel who deliver or pick up materials/goods, as
well as mariners who work on our installations. The TWIC is a
Federally-issued ID card and was specifically designed for the purposes
of facilitating physical access to designated secure areas under the
Department of Homeland Security purview. Navy policy requires a
purpose/justification and a government or commercial bill of lading (in
the case of transport) for TWIC holders to be granted access.
Senator Kaine. Secretary McGinn, I do not know if you can
answer this question, and the details might have been in a
press account that I missed, but has it been established
whether this individual received the TWIC card prior to his
criminal conviction and the card was never revoked or whether
he received the TWIC card in spite of having a manslaughter
conviction?
Mr. McGinn. I do not have the answer now, but I will
provide it to you, Senator.
[The information referred to follows:]
The Transportation Worker Identification Credential is administered
by the Transportation Security Administration (TSA), not the Department
of the Navy. I believe any inquiries regarding TSA vetting procedures
and protocols or details regarding any individual card holder are best
answered by the TSA.
Senator Kaine. Thank you.
When I was Governor, there was the horrific shooting at
Virginia Tech University and we engaged in a significant
investigation, and we found all kinds of problems. Some were
system problems. Some were errors in judgment. Some were
funding problems. We were underfunding certain kinds of
community mental health services, and that was one of the
factors that led to this horrible shooting. I am sure there is
a whole series of things both with the Navy Yard and perhaps
with this Norfolk Naval Station incident, maybe some human
error, maybe some systems improvements, or maybe some funding
issues.
I know this subcommittee and the Seapower Subcommittee I
just came from are very worried about sequester going forward
and how it affects everything that we do. We were able to work
to find some sequester relief in 2014 and 2015 in connection
with the 2-year budget. The White House and DOD, from 2016
going forward, has asked for sequester relief, not sequester
elimination. Madam Chairwoman, I am impressed with the fact
that as they have come to us and asked us for sequester relief,
they basically said we will absorb more than 50 percent of the
sequester cuts over the entire length of the sequester. Give us
relief so that we can eliminate about 45 percent of the
sequester cuts, which seems like a very reasonable request to
me, maybe a little too reasonable, but very reasonable. You are
trying to work with the will of Congress to try to deal with
the deficit in this strategy.
It is my hope that we are not, but, I frankly think we are,
tightening the belt in ways that will come back to bite us in a
lot of different ways. I do not know if security is one of
those ways, but everything costs money, and if we are trying to
foolishly save here or there, I just worry that we have
instances like this, or all kinds of other things that go
wrong, that would not go wrong if we were taking a more
strategic approach. That is an editorial comment, not a
question.
I look forward to getting the answer about this particular
instance. I was not aware that you were there on that day. You
know how seriously the Hampton Roads community----
Mr. McGinn. Yes, sir. Senator, I talked directly with
Admiral Bill Gortney, the Commander of Fleet Forces Command;
Admiral Dixon Smith, Regional Commander, and they are all
extremely focused on getting every answer we possibly can
related to that tragedy.
Senator Kaine. Thank you. Thank you, Mr. Secretary.
I have a question on R&D to follow up a little bit from
Senator Hirono's questions. We have a lot of DOD R&D facilities
and labs in Virginia. We have the highway sign planted right in
the heart of Arlington. This is where the Defense Advanced
Research Projects Agency first created ARPANET, which is the
foundation of the Internet on which so much of the global
economy now depends.
Our research capacity depends upon people, but it also
depends upon having the infrastructure we need to do the R&D.
Please talk a little bit about R&D challenges in the DOD right
now. The civilian R&D has been hit very hard in sequester
through the National Institutes of Health and other civilian
R&D. How much have you been able to shelter or protect the R&D
priorities of DOD in this tough environment?
Ms. Burke. Senator, thanks for the question.
I can really only speak for the R&D that I have oversight
of, but we certainly will take the question for the record back
to our colleague, Al Shaffer, who oversees all research and
engineering for DOD.
[The information referred to follows:]
The Department of Defense (DOD) must protect the future. Although
the science and technology (S&T) budget has been relatively flat since
2005, the fiscal year 2015 budget request represents a strong S&T
investment, but shifts priorities to the Defense Advanced Research
Projects Agency and key capability areas like anti-access/aerial
denial. The S&T program has developed a number of key emerging
technologies, with advances in future capabilities, such as Directed
Energy where we are deploying a high energy laser on the USS Ponce in
the summer of 2014, and a new class of turbine engines that offers the
promise of a 25 percent reduction in fuel use. S&T investments have
also led to the development of new classes of high performance radars,
as well as rapid development of unmanned aerial and autonomous systems.
DOD must make sound investments in the next generation of technologies
to maintain our military and technological superiority.
Ms. Burke. Mr. Conger and I are certainly aware that Under
Secretary Kendall has put a very high priority on protecting
those investments. It is our seed corn and we have to do that.
For energy, we are seeing a consistent investment in R&D in
this area. There has been some reduction, but it is consistent
with the reduction in the overall budget.
In my own funds that I manage, for R&D they have been
consistent and we have been able to protect those investments.
Again, those are aimed at military capabilities and some of
them for the short term, for the fight. We think they are very
important investments, and we have been able to keep them
consistent.
Senator Kaine. Thank you, Madam Chairwoman.
Senator Shaheen. Thank you.
Secretary McGinn, as you are sharing the reports of the
Navy shooting, if you could share those with the subcommittee,
we will make sure that everybody receives them as well.
Mr. McGinn. I will, Senator.
Senator Shaheen. Thank you.
Senator Donnelly.
Senator Donnelly. Thank you, Madam Chairwoman, and thanks
to all the witnesses.
Mr. Conger, as you look forward, how are facilities that
promote the mental well-being of our servicemembers and
military families being prioritized as installation funding
changes?
Mr. Conger. You are speaking specifically about the subset
of health facilities that deal with mental health?
Senator Donnelly. Yes, sir.
Mr. Conger. In fairness, I should probably take that for
the record if we are talking about the construction or
maintenance. From a health care perspective, in the programs
managed by the Defense Health Agency, we have done our best to
maintain the maintenance accounts that are associated with
those specific facilities. Where DOD, as a whole, has taken
significant risk in facility maintenance, in our health
facilities, we have maintained those accounts.
[The information referred to follows:]
As a general rule the mental health facilities within the
Department of Defense (DOD) are included as a functional component
housed in the medical treatment facility or in limited cases, stand-
alone facilities. In all cases, DOD prioritizes military construction
projects based upon the strategic priorities of the Military Health
System. All potential projects received by DOD are processed through
the ``Demand Signal'' process, which takes into consideration
enterprise priorities, clinical and business case analyses, as well as
a number of other criteria facilitating the appropriate prioritization
of a potential facility project.
Mr. Conger. From a construction perspective, there have
been reductions in health care, hospitals, and clinics, just
the same as across the board.
Senator Donnelly. As you make MILCON and other installation
management decisions, do you take the access to readily
accessible mental health services into account for men and
women as you make those decisions as to how easy it is to
obtain those services?
Mr. Conger. Let me take that for the record simply because
there are so many individual processes within DOD where things
are prioritized, that there is not an overarching governance to
make sure that these particular kinds of facilities get this
particular amount of money.
[The information referred to follows:]
The Department of Defense is continually seeking opportunities to
increase availability of and access to mental health services for our
servicemembers. Decisions involve consideration of both facility and
functional factors that will facilitate quick and effective delivery of
the services needed. For example, Embedded Behavioral Health Teams have
been used to align mental health resources with operational units in
order to improve access to care, continuity of care, communication
between mental health and line leaders, mission readiness, and safety
of servicemembers. Decisions regarding facilities for these teams
ensure they are collocated with the supported operational unit and are
within walking distance for those seeking services. Mental health
providers are also being placed within Patient-Centered Medical Homes,
which further expands the range of locations for receiving mental
health care as well as improves access and convenience.
Senator Donnelly. Okay.
Ms. Burke, I apologize. I had to vote. I got here as quick
as I could. You may have already answered this. Can you tell
us, as you look, what percentage of the energy used overall is
now American energy or that it came from this country?
Ms. Burke. Senator, DOD uses about $20 billion a year worth
of energy. Three-quarters of that is for military operations,
and one-quarter of that is to support facilities.
For the facilities, which my colleagues are the experts on,
we are generally on the commercial grid. We are generally
relying on civilian commercial infrastructure for that energy.
For military operations, it is almost all petroleum fuels,
and we have a tactical and operational imperative to buy it as
close as we can to where we operate. Approximately 60 percent
of that fuel we purchased overseas where our operations were
taking place. It really depends on where we are operating.
Senator Donnelly. Okay. As you move forward, what are the
most cutting-edge areas you have for our own facilities and for
other things, obviously, other than the imperatives of having
to purchase fuel where you are when you are in military
actions? For our facilities, what are some of the things we can
look forward to over the next 5 years?
Ms. Burke. I will let my colleague answer for facilities.
Mr. Conger. We have a R&D program specifically focused on
facilities and energy efficiency, on micro-grids, and on
various ways of production. There is a long list of projects. I
think that you will see fruition in building efficiency.
Certainly we have a lot of micro-grid programs going on right
now, but they are each testing a different facet of the overall
picture. These are research programs not necessarily designed
to end up in a project.
But we do have a small amount of money in an energy test
bed that we are taking technologies and programs that are pre-
commercial but that have not gotten the data to push them over
the edge into viability where they might be able to be
purchased by the entire Department. I can get you a list of
what those projects are.
[The information referred to follows:]
The following table provides the Environmental Security Technology
Certification Installation Energy Test Bed projects:
Senator Donnelly. That would be great.
Secretary McGinn, I am from Indiana. We have Naval Surface
Warfare Center (NSWC) Crane, with over 3,000 Navy employees; 67
percent of them are scientists, engineers, or technicians doing
some of the most cutting-edge work. We were wondering, as we
look forward to improve the infrastructure there, if you know
of those MILCON plans or if you can get to us the
infrastructure improvement plan that we have moving forward?
Mr. McGinn. Senator, I look forward to actually visiting
NSWC Crane in about 3 weeks. I am going to go out there to your
great State and visit NSWC Crane to see some of those
facilities.
Senator Donnelly. Do you need a ride from the airport, sir?
[Laughter.]
Mr. McGinn. No, sir. I am also going to go to Purdue
University and see some of the good research they are doing on
biofuels up there. I will take a close look at what is going on
and what is needed.
NSWC Crane has some world-class capabilities in battery
technology, everything from watch-sized batteries to batteries
in intercontinental ballistic missiles. That is critical. We
want to keep that viable.
Senator Donnelly. Thank you.
Secretary Hammack, one thing, in looking at how things are
being done, is the different standards of liability protection
for hazardous waste risks at former Army facilities, for
instance, in cases where they are closed by a BRAC, there is
help with hazardous waste. If not a BRAC, often not. If the
only substantive difference is how the facility was closed, how
do you make those determinations and why the difference in
treatment?
Ms. Hammack. I appreciate your highlighting one of the
benefits of BRAC in the base closure operations.
Senator Donnelly. You will not have that happen too often,
ma'am. [Laughter.]
Ms. Hammack. I want to take advantage of it for the record
here, sir, and I appreciate that.
The BRAC program does give additional protections for both
base transfer and base closures in dealing with environmental
liabilities. For bases that were closed prior to that, it is
difficult, if not impossible, to go backwards in giving
protections once a base has been closed and already
transferred. At the time of transfer, there are terms and
conditions of that transfer. There are terms and conditions
that are agreed upon by all parties that we work forward on.
I understand there is some legislation that is looking at
grandfathering things backwards called the Base Redevelopment
and Identification Correct Act. I have not had a chance to
thoroughly review that. We will review it and take a look at
it. But I think using BRAC as a closure mechanism by some of
the prior year mechanisms in the early 1980s does highlight
benefits to the community.
Senator Donnelly. Thank you, Madam Chairwoman.
Senator Shaheen. Thank you.
I am glad Senator Donnelly got us back to BRAC because I
want to pick up on the line of questioning that we were
discussing before I had to go vote.
Mr. Conger, I think one of the things you were talking
about was the fact that some of the construction requirements
had changed. You mentioned hospitals, in particular. GAO has
said DOD did not include some of those MILCON requirements that
were needed to implement the recommendations as envisioned and,
therefore, the additional requirements increased costs. I am
paraphrasing what GAO said.
I still want to go back to the idea of how you are
improving on the ability to accurately assess what the cost of
another BRAC round would be? I think I am accurately quoting
your response to the GAO report where you said that: ``I am
concerned with the report's emphasis on establishing goals,
measurements of effectiveness, and capacity reduction targets,
because it seems to me that that is exactly what we ought to be
doing as we are thinking about how we develop a proposal for
another BRAC round.'' I wonder if you could enlighten me a
little more on how we are looking at assessment. Secretary
Hammack, if you have anything you want to add, feel free to do
that too.
Mr. Conger. There are two things that I think you mentioned
that I would like to touch on, and if anybody else has
amplifying comments.
The reason that we are concerned about goals is because
while we execute a BRAC round to save money, the individual
recommendations have been premised on the idea that they are
focused, first and foremost, on military value. We do not want
to reduce military value through these actions. The intent is
to amplify it. We specifically do not want to have a
requirement set out at the beginning of a BRAC round that says
you have to close this many bases. That is what I am concerned
about. You do not want to get down to a point on the list of
items under consideration and say these are the ones that I
would do if it made sense, but I need 10 more bases to close in
order to meet my targets. We do not want something like that,
and that is my concern with the GAO.
Senator Shaheen. That makes sense to me, but it still makes
sense that there should be goals for cost savings in a BRAC
round. Also, those goals might include not just cost savings,
but also what kind of value we want to maintain for the
operations that we want to continue. It is the whole metrics
piece, how we model those assessments, the extent to which we
are comfortable with what is in them, the accuracy of them, and
that Congress is aware of how we are doing this, so that we can
avoid what happened in 2005 from happening again.
Mr. Conger. You are asking how we measure the effectiveness
of a BRAC round, I think.
Senator Shaheen. No, I am asking a little bit of a
different question, and that is, how do we anticipate the costs
and the effectiveness of a BRAC round?
Mr. Conger. Let me talk to costs.
Senator Shaheen. Okay.
Mr. Conger. I think if you look at the specific
recommendations in 2005 that had the most cost associated with
them, they were the actions that were characterized as
transformational. I know that word gets thrown around a lot, so
let me play that out a little bit more.
If you consolidate all of the criminal investigative
services at one particular location down at Quantico, that is
more of a transformational thing rather than being done for the
sake of savings. If you colocate the various Services' health
functions in one building, that is more of a transformation,
looking for efficiencies and effectiveness, but not necessarily
in cost savings. Those are the things that had a lot of costs
associated with them but did not necessarily drive savings.
But I think there is a finer point here. If you look at the
previous BRAC rounds where we were driven by closure or driven
by efficiency, the MILCON requirements associated with those
actions were very small. If you look at the 2005 round and you
segregate the closure and efficiency actions from the
transformation actions, there was a relatively small component
of MILCON in those efficiency recommendations, keeping in mind
the fact that the entire cost is not a MILCON cost. There is
operation and maintenance (O&M). You have to move people from
place to place. There are a variety of O&M costs as well. But
the MILCON costs associated with the 2005 BRAC round were an
order of magnitude larger than the MILCON requirements from the
previous round, and that was because of the kinds of
recommendations that were put forward and accepted.
Senator Shaheen. I think it would be helpful to this
subcommittee, and probably to the full committee, to have a
better understanding of how you assess what you are trying to
achieve through another BRAC round.
Secretary Hammack, do you want to respond?
Ms. Hammack. Yes, I would like to.
One of the things that we are doing in the European
infrastructure consolidation process is looking at a very
methodical process. First, determine the military value and
rank the military value of each site. Second, look at the
capacity analysis from every type of building that is located
on that base, such as headquarters buildings, barracks, motor
pools, et cetera. Where do you have excess capacity? Third, do
a scenario analysis. What are the various scenarios? What could
you move where to consolidate, and what is that cost?
In prior rounds, a budget has been set. As Mr. Conger spoke
of, you set a $6 billion budget, and as you are looking at all
the different scenarios, you evaluate those that have the best
return on investment to return the best military value to take
up as much capacity as you can. It can be a very analytical,
mathematical process. Yet, military value of the locations is a
priority to ensure that we are appropriately positioned.
From the Army's standpoint, if you look at BRAC 2005, the
cost to the Army was $13 billion. Of that, $2 billion was
efficiency BRAC. Of that $2 billion, we are getting $574
million in savings every year, and that is about a 3.4-year
return on investment. I think that is a good deal. I think that
is the efficiency BRAC.
That is what I want to see from the Army's standpoint in
the next round. Give me a budget and we will do the military
value. We will do the capacity analysis. We will run some
scenarios and we will identify those scenarios with the best
efficiency that we can return to this Nation.
In the BRAC process, it is all with congressional
oversight. You will appoint a BRAC commission that will take a
look at all the details here before it comes to Congress for a
vote. I think it can be very clear. I think it can be very
transparent. It can be very focused on efficiencies. We want to
work with you to identify the characteristics of the next round
of BRAC because we need it in order to work within the budgets
that this Nation is asking of us.
Senator Shaheen. My time is up, but I just want to get a
clarification. I assume the excess capacity analysis that you
are doing now is going to be part of the European
infrastructure consolidation review.
Ms. Hammack. Yes, it already is. We have already finished
our capacity analysis in Europe on a site-by-site basis, and it
shows us a range of 10 to 15 percent excess capacity in Europe.
We are running through the scenario analysis right now to
determine what have the best returns on investments.
Senator Shaheen. Because I think, given the request from
this subcommittee and the full committee about getting that
report, and I know you addressed it in your comments, Mr.
Conger, but that is the kind of information that is very
helpful as you are asking us to make decisions about another
BRAC round.
So my time has ended. Senator Kaine?
Senator Kaine. Thank you, Madam Chairwoman. I am going to
follow up for 1 minute on this same topic, really more to say
what I do not necessarily like about BRAC, being a former
Governor.
I can see why DOD likes the BRAC process. I can see why it
was established.
Being Lieutenant Governor and Governor during the 2005 BRAC
round, my objections are not the cost savings issue. My primary
objection is a process one.
DOD makes budgetary recommendations to us about everything,
what weapons systems to buy, what weapons systems not to buy,
whether to have one uniform, whether to have multiple. You make
recommendations to us about everything and you do not need
external panels except in rare instances to make
recommendations to us.
I would prefer that the base decision be like everything
else and that DOD make recommendations to us. Then we would
kick them around up here and we would not agree with all of
them. We would probably agree with two-thirds of them, just
like we do about weapons systems. Maybe 50 percent. Maybe not
two-thirds.
But you are the experts in a way that we are not, and we
rely on your expertise.
My observation about a BRAC process: when a BRAC process
starts, every community in the country that has a military
asset, whether the asset is actually in jeopardy or not, has to
lawyer up and lobbyist up, and they start to spend tons of
money to make this big effort to protect what they have, even
communities whose assets really are not in jeopardy. I saw a
community in Virginia that says we do not think this is in
jeopardy. There is important stuff that goes on here. But if we
do not hire all the lawyers and lobbyists and make this big
effort and then we end up on the short end of the stick, people
will say you are a dope, you should have done this.
I think there is an enormous wasted energy in a BRAC
process for communities needing to come together and make this
massive case, even when there is really no likelihood there is
ultimately going to be a recommendation that would change the
status of the installation.
My preference would be that DOD come to us with
recommendations about installations like they do anything else,
and then we debate them and kick them around. I know you are
going to bring the European consolidation study to us, and I
gather that because those are external bases, those are not
subject to the same requirements of congressional approval.
Yet, when that report comes, if Members of Congress do not like
a piece of it, they will probably put in some kind of
legislation to say yes, but do not do that one thing that you
mentioned. By legislation, we can always overturn a
recommendation even if there is not a requirement of approval.
As we think about the way to deal with these installation
questions, I would like DOD to give us their professional
recommendation about installations, recognizing that Congress
would kick them around, recognizing that local politics and
everything else would create headwinds and crosswinds. But that
is the same as in every other line item in the budget.
Mr. Conger. Right. BRAC was not created for no reason. BRAC
was created because before BRAC, there was a lot of politics in
these decisions, and there were accusations of partisanship in
which bases ended up closing. This enforced a process that was
deliberate, that was analytical, that treated all bases
equally, and set forth a way that was defensible and auditable
for DOD to determine the ones to keep. These are the places of
highest military value, and I would like to fill those in even
if it is more empty.
In an environment where we are not able to do that, then
you are probably going to end up with folks looking at the
places that have more capacity even if they are of higher
military value. That is a concern. You end up with actions that
are more subject to litigation, especially since BRAC takes the
place of some of the National Environmental Policy Act process.
What you will end up with is rather than less lawyering up, you
will end up with far more lawyering up if you do not have BRAC.
Senator Shaheen. Sadly, Senator Kaine, everybody is not as
reasonable as you and me. [Laughter.]
Senator Kaine. Thank you, Madam Chairwoman.
Senator Shaheen. Thank you.
Secretary Hagel, in his remarks to the press when the
budget was released, said that he was mindful that Congress has
not agreed to BRAC requests in the last 2 years. ``If Congress
continues to block these requests, even as they slash the
overall budget, we will have to consider every tool at our
disposal to further reduce infrastructure.''
Mr. Conger, what tools was Secretary Hagel referring to?
What are you considering in terms of using them in the absence
of any authorization for a BRAC round in 2017?
Mr. Conger. Clearly he was listening to Senator Kaine
saying to do things outside of the BRAC process. [Laughter.]
The Secretary has amplified his comments subsequent to that
and noted that there is an authority that Congress provided DOD
in 10 U.S.C. 2687. It has a process for how one would take base
closure and realignment actions independent of a BRAC round.
The Secretary has also said he would much rather do this
through a BRAC process. It is apolitical. It is analytical. It
is transparent. It is the preferred way of doing business, and
it makes the most sense to DOD. That is why we asked for BRAC
authority.
Senator Shaheen. I assume that DOD does not have an
interest in getting into a back and forth with Congress over
taking action that Congress has not authorized in a way that
would produce a backlash in Congress.
Mr. Conger. Of course not. We will only use authorities
that Congress has provided. Moreover, even if we are using
existing authorities, DOD often has consultations with Congress
in advance of actually using those authorities. The MILCON
statutes are replete with examples of notification requirements
where we come up and have that conversation, and if the
committees advise against taking a particular action, that we
accede to the will of the committees. Those kinds of things are
there already.
I do not think you are witnessing a desire to have a back
and forth with Congress per se, but you are recognizing a
degree of frustration and a recognition, as has been
demonstrated by the witnesses up here, that we are paying for
facilities and bases that are essentially waste. You do not
want to do that. You do not want to tax the warfighter in order
to pay for facilities that you do not need and for bases that
you do not need. If you have a way to save money and are able
to plow that money back into readiness, we really would like to
do that.
Senator Shaheen. I think that is the interest on the part
of all of us here, but if we do not have information on which
to assess what is being proposed, it is really hard. All we
have is past history, and past history, at least the 2005 past
history, is not a very good example of what we would want to
accomplish in the future. I am just saying to all of you the
more you can provide information for us about how you assess
what you are looking at in the 2017, if you are coming up with
a 2017 proposal, how you get to savings, and what you are
trying to achieve before we get to the BRAC process, I think
the better audience you are going to have for what you are
trying to do.
Ms. Hammack. I understand that, but the BRAC process is
where we bring you those ideas. That is what the BRAC process
is, and that is where we do the site-by-site capacity analysis
and the site-by-site military value and put it together as part
of an analytical process with the ground rules defined in the
BRAC authorization.
Senator Shaheen. I get that, but I am not going to go home
to my constituents in New Hampshire and say I have authorized
something when I do not have a good idea of where I think the
outcome of that might be. I think I probably represent most of
the Members of Congress when I say that.
I understand what you are saying in terms of the BRAC
process itself, but I am saying something a little bit
different. I think for us to have reports like the European
consolidation review as you are coming to us to say this is
what we want to do is really helpful. Last year we heard we
were going to get that before you came back with another budget
request. We still do not have it. We have beaten this dead
horse, I think, already. But I am just trying to convey my
frustration about not having the information that I think is
helpful in making a decision.
Ms. Hammack. But one of the things to understand that you
are authorizing in the BRAC process is you are authorizing the
analysis. You have to vote on the recommendations. You are
authorizing the analysis.
Senator Shaheen. Right.
Ms. Hammack. One of the things in section 2687 that Mr.
Conger talked about is that any bases closed under 2687 would
be submitted as part of a budget. You did not see any as part
of the 2015 fiscal year budget, but if we do not get
authorizations for a BRAC 2017, you might see some bases listed
in the budget request for 2016 because at this point in time, I
do not have the money to run the bases the way they should be
run, and it is not appropriate due diligence on my part to
continue in this manner. If I cannot run the buildings
appropriately, if I cannot appropriately support soldiers, then
I am going to have to do something to ensure that I am not
spreading an ever-thin budget across a base that I cannot
afford.
Senator Shaheen. Listen, I get that. I have been opposed to
the cuts from sequestration that are putting additional
pressure on DOD. But as long as we have GAO coming back with
reports that raise questions about how the BRAC rounds are
being done, I think they need to be answered.
Ms. Hammack. But I would just say look at the prior year
rounds. Look at all the prior efficiency BRACs that were duly
noted as efficiency BRACs that are returning the investments
stated, that did not exceed the budgets. Anytime any BRAC
project exceeded budget, we came back to Congress and said this
project is going to increase in cost because of the following
reasons and got approval from Congress for that incremental
cost. Everything was done in an open and transparent manner.
All prior BRAC rounds are delivering the expected savings. For
the Army, the efficiency savings expected from this BRAC round
in 2005 are delivering savings, and those measures that were
not expected to deliver savings are not.
Mr. Conger. If I could strike a conciliatory note. Your
staff has asked us a series of questions about the BRAC 2005
round, and we have done our best to get that information. I
think we still have a couple extra things to provide. We will
continue to provide that information.
We actually have a fairly good story here. There is a good
justification, even inside of the 2005 efficiency actions that
we have identified, to justify the fact that a future round can
be done with a mind to efficiency and can be done with minimal
cost increases. We think we can manage this process and we
think there are a lot of good examples that demonstrate that.
Senator Shaheen. We look forward to getting that
information.
Senator Kaine, do you have any more questions?
Senator Kaine. No, thank you.
Senator Shaheen. I want to go to energy, something we can
all agree on hopefully. I think one of the best stories that is
untold is the work that is being done in the military to save
energy and to produce new research that is going to benefit
everybody in the private sector, as well in terms of energy
savings. I wonder if we could explore that issue a little bit
more.
I have a specific question because my understanding is that
there was some confusion around questions at the full hearing
and the renewable energy projects that are valued at $7 billion
a year as part of the President's performance contracting
challenge. Secretary Hammack, can you explain what the
contractual agreement is on that direct funding? Because my
understanding is that people, when the topic was raised,
assumed that that $7 billion was money that was going to be
paid through DOD's budget, and my understanding is it is
actually an agreement with the private sector. Can you explain
that further?
Ms. Hammack. Absolutely. Thank you, Senator Shaheen.
The multiple award task order contracts (MATOC) for $7
billion is what is generating questions, and that is solely
focused on renewable energy. It is not an energy efficiency or
performance contracting.
Awards were made under MATOC to a total of 48 companies, of
which 20 are small businesses. The award recipients are
qualified through this process to compete for future task
orders. They did not get a contract that we are going to commit
to buy anything. This was a prequalification. It is like
developing a short list of contractors. We are going to issue
task orders to bid for power purchase arrangements, and the
power purchase arrangements are anywhere from 20- to 30-year
contracts to buy the energy generated from renewable energy.
If you look at the next 30 years, the Army's bill for
facility energy is projected to be $40 billion. Our objective
and our mandate from Congress is 25 percent of our energy to
come from renewable energy. If you take 25 percent of $40
billion, that gets you about $10 billion. We put a contract
ceiling in for $7 billion. When we contract to buy energy from
someone, it might be a 30-year contract to buy energy at this
price with this acceleration for this time period, and that is
considered the value of that power purchase agreement.
I understand that it is confusing, and I hope I have been
able to clarify it, that it is not money that we are coming to
you to ask for. It is money paid out of our utilities account
to buy electricity.
Senator Shaheen. Good.
Mr. Conger, do you want to clarify that more?
Mr. Conger. Could I amplify one point in there that is very
important? As people hear about us buying renewable energy,
when we do these arrangements with third party entities to
develop renewable energy and bring a utility function onto our
base, generally we are paying either the same amount or less,
and more often than not, it is less than we would normally pay
for our electric bill. In essence, what you are looking at
represents a reduction in costs over the life of these
projects.
Senator Shaheen. Ms. Ferguson, one of the things you talked
about was the 10 percent savings, I think I understood you
correctly, to fuel use that you were hoping to achieve in
actual usage. I assume mostly for flying planes. I do not know
to what extent you are sharing or there is collaboration
between the Air Force and the Department of the Navy in terms
of the energy work that is being done by the Navy. But my
understanding is that most of the development in fuel savings
on the Navy side was to develop drop-in fuels that did not
require any changes in engines. Is that right, Secretary
McGinn?
Mr. McGinn. Yes, it is.
Senator Shaheen. Is that what you are looking at? Because I
understood you to say something a little different.
Ms. Ferguson. We are actually looking at how we operate the
aircraft and how we can do that more efficiently. One of the
things we are looking at is how many tons of cargo we can move
per gallon of fuel. Right now, we are doing 9.5 percent more
cargo tons moved at 8.6 percent less fuel. We are doing this in
a variety of ways.
One of the things we have done is updating the KC-135
landing weight restriction. We have an energy analysis task
force that is made up of reservists across the United States
and in the area of responsibility, and they are looking for
opportunities to save money with operational efficiencies. We
save $1.2 million annually through decreased fuel dumping. In
the past, the aircraft had to have a certain amount of fuel
left in their bowels before they could land, and they would
dump the fuel if they had too much. Now we have adjusted that
so they are able to save that and not dump that fuel. That is
one of the things that we are looking at to save.
Senator Shaheen. To what extent are you collaborating with
what the Navy is doing as you are looking at these efforts?
Ms. Ferguson. All the Services collaborate together on
energy initiatives under Ms. Burke's leadership through the
Defense Operational Energy Review Board. We are collaborating.
The three deputy assistant secretaries for energy meet together
quite frequently, and so all this information is shared across
all the Services.
Mr. McGinn. We look for good ideas wherever we can find
them, including with the Air Force. [Laughter.]
We similarly are looking at this forward thinking about key
performance parameters to buy things that have better military
capability but operate with less energy.
But importantly, because our force structure that we own is
where we could really make and save a lot of money on energy,
it is how we use them. For example, Ms. Ferguson mentioned
load-outs of aircraft and policies that relate to how much fuel
you need to have to land. We are doing similar things. We are
trying to look at eliminating what we call hot refueling, where
a jet that lands goes through to the flight line and shuts down
right away, and then we will bring a truck in which is better
than sitting in fuel skids or fuel pits where the engines are
running and you are filling it up with fuel.
We are looking at the right balance of actual flight time
and simulators to maintain the same levels of training and
readiness, to do it without as much expenditure of fuel, but
always with the idea that combat readiness comes first and
energy comes later. But we are making great strides. We have an
air energy conservation program that we are launching in 10
days that is similar to what we have done with our surface
ships over the past year.
Senator Shaheen. Secretary Burke, are we on track to reach
the fuel savings targets that we are hoping to reach? How are
those spread out across each branch of the military? How do you
determine what those targets should be?
Ms. Burke. Senator, each of the Services have their own
targets. At a departmental level, we have not set targets, and
here is the reason why. This is really about operational
effectiveness, and we have wanted to get that metric right. If
you say, for example, that at a departmental level, we are just
going to reduce our consumption by 10 percent but then we have
to go somewhere, your target is going to become irrelevant. We
have been working very hard with all the people here and lots
of others in the operational community to develop logistics
supportability metrics. In other words, what you need to be
able to do, what is the planning scenario or the operational
plan, do you have the energy you need, and do you have the
logistics you need to support that plan? If not, it helps us
put a value on the innovation or the changes in doctrine that
you need to make in order to support the plan. That is the
metric that we are aiming for that will measure military
effectiveness.
As for whether we are hitting the targets, yes and no. Our
top line goal is to make sure that our forces have what they
need, wherever they are for whatever purpose.
As we look at the future, one of the ways we know we have
to get there is by improving our efficiency. We are very much
in tune with your own priorities. We have to improve our
performance and we have to get that volume of fuel off the
battlefield.
Our analysis suggests that right now we are on track to
increase our overall fuel consumption by 2025 by about 10
percent. If we continue with all the initiatives----
Senator Shaheen. To increase or reduce?
Ms. Burke. Increase. Because of all the new systems coming
in that have been in the pipeline for some time, they are
fabulous capabilities, they consume more fuel, generally
speaking. If all the initiatives that the people here at the
table have been championing go in, we will cut that by 6
percent, but it is still an increase.
This again points back to our need to get into the planning
process and make sure that we are putting a value on what this
means for us when we actually have to go to war to have this
kind of energy demand. That is where we are really putting the
effort. We should see that pay off over time, but right now, we
have a lot of things in the pipeline. We are not where we want
to be, but we are heading in the right direction and we are
developing the kinds of measurements that will be meaningful in
this space.
Senator Shaheen. I think it was you, Secretary McGinn, who
talked about changing the culture in terms of energy use. I
wonder if you could speak to that, and perhaps you could also,
Secretary Burke, talk about how we are trying to change the
culture of energy use within the military.
Mr. McGinn. To illustrate what I am talking about, Senator,
all of our fleet commanders have changed the expression ``save
energy when you can'' to ``save energy unless you cannot'' to
drive home that message that energy equals warfighting
readiness.
I was in Norfolk last week working with Admiral Gortney and
his team of operators on our energy education and awareness
annual event. I was out in San Diego in February doing the same
thing with Admiral Harris from Pacific Fleet. We had divisions
in air, surface, subsurface, infrastructure, and installation
support where they are doing nothing but swapping best
practices. We are measuring a lot better than we ever have in
the past in terms of individual performance. We are trying to
introduce more and more competition, which is something that
has done great things in all of the military Services, into
this idea of getting the same or better combat readiness out of
every gallon of liquid fuel or kilowatt hour of electricity.
Senator Shaheen. I have had the opportunity to tour the
Portsmouth Naval Shipyard and see the energy savings there, and
it is really very impressive, and to be part of one of your
award ceremonies where you recognized various units for their
savings.
Mr. McGinn. We are very proud of Portsmouth. In fact, we
want to do more. That is a case where the culture has already
changed and folks are looking for even more ways to save
energy.
Ms. Burke. Senator, to also field the question, I would say
it is two things from the Secretary of Defense's point of view.
It is not so much to change the culture, but to find the parts
of the culture that you can harness and where it makes sense
for people. I will tell you a story that I think illustrates
what I mean by that.
The Marine Corps, when they were first putting some of
their experimental forward operating bases into play where they
were introducing some of these new energy efficiency and
renewable energy measures, were bringing it to Twentynine Palms
to marines who were in training. The marine in charge at the
time of this went to these guys and he said: you have solar
panels on the outside of your tent and geothermal heat exchange
in the floor. You have more efficient lights, more efficient
tents, and a more efficient generator. If you stay below that
red line on this meter, you will not turn on your generator. Do
what you have to do for your lights and your computers. If you
go above the red line, that is fine, but the generator will
come on. You will hear it, you will smell it, and you will also
have to get resupplied. But if you stay below that red line,
you will not have to get resupplied. These marines said they
got it, and they stayed below the line.
They had all been deployed, or most of them had, and they
know what it means when they are in a forward base where they
do not have to have the noise and the fumes of a generator
right next to their tent. They also do not have to put a person
on it to refuel it, and they are also lowering the risk to
their fellow marines or to our partners in the private sector
who have to bring them the fuel through a battlefield. If you
tell them what it is for and what it gets them in warfighting
terms, and then you give them the tools, it is in their culture
to understand that.
The challenge is really to us. Where I think as an
official, I see the most need for a culture change, though, is
back in DOD in the way that we run our business processes. It
is really the same challenge. The burden is on all of us to
explain why this is beneficial for the mission. Once we do
that, we are finding that people do incorporate these changes,
but it is hard. As I said, there are no shortcuts on that.
Sometimes, it is a one person at a time conversion. But we are
all working hard on that.
Senator Shaheen. I did a hearing in Norfolk a couple of
years ago with demonstrations of various technologies that were
being implemented out in the field in Afghanistan. I remember
very clearly when I asked the Marine Corps colonel how people
had responded to the technology. He said their immediate
reaction was that it was a piece of crap, but then they
realized how much it improved their mission, and then they
embraced it. I think it is a great lesson.
To what extent are we anticipating maintaining the
technology and the improvements that we made and integrating
that into the continued operation so that it is sustainable? Is
that part of what we are planning for as well?
Ms. Burke. Absolutely. I think both the Marine Corps and
the Army have made great strides in incorporating some of the
improvements they have put into play in Afghanistan into
programs of record. That is a great step forward. But we are
also all putting a lot of effort on capturing the lessons
learned and making sure that we not just document them and have
a report, but that we are translating it into changes and into
actual change requests. That is a really important effort for
us now. But we have also already seen the Services
incorporating these changes.
I think the Army in particular has done some things in
Afghanistan with an effort called Operation Dynamo. At these
little outposts where it is hardest to deliver fuel, they have
returned 40 to 60 percent fuel savings at times. Those are
things that they are incorporating into their program of
record. So the next time someone orders that kind of base, it
is already incorporated.
Senator Shaheen. Great.
Someone mentioned, it may have been you, Secretary Hammack,
energy service companies (ESCO) and the use of ESCOs. I wonder,
Secretary Burke, if maybe you can speak to all of the branches,
whether we are incorporating those opportunities to use
performance contracts in what we are doing and whether there
are any impediments to doing that.
Mr. Conger. It is more of a facilities thing. We are. The
President has an initiative that is emphasizing performance
contracts across the Federal enterprise. He had a goal of
achieving $2 billion over the past 2 years of ESPCs. We in DOD
have more than half of that goal.
Let me actually take the opportunity to brag on the Army a
little bit. They have been particularly aggressive,
particularly efficient, and I will let Secretary Hammack talk
to it in particular, but they have an innovative way that they
are pursuing these.
Senator Shaheen. Can I also ask you, before we go to
Secretary Hammack, to what extent have you had challenges with
the accounting of how we deal with the costs of those
performance contracts? The reason I ask is because this has
been an issue with Federal agencies because of the way the
Congressional Budget Office (CBO) scores the ESCOs. Has that
been an issue for all of you and how have you gotten around
that?
Mr. Conger. Let me defer to Secretary Hammack to start.
Ms. Hammack. We have not found that to be an issue to us.
Right now, as Mr. Conger mentioned, we are doing about 25
percent of the ESPCs in the Federal Government. It is something
that we have had a very focused effort on and a focused team.
But we do realize that there are upper limits to what you can
do with an ESCO because it is paid for out of your utility
budget. Your utility budget is something you pay every year. It
is like your mortgage. If we all had cash, we would buy our
house, and we know that your long-term 30-year price point is
lower if you bought it all upfront yourself. But an ESPC brings
in those experts to bring in the technologies and the
strategies. There is a measurement and verification process to
ensure that you are achieving those savings and you pay them
back out of the savings.
Senator Shaheen. Is there an outline for what you are
allowed to use within DOD? I am trying to figure out how CBO
does not have a problem with you all using them, but they have
a problem when the Department of Energy is using them or the
Department of Homeland Security or somebody else.
Mr. Conger. To best answer your question, we will probably
want to take it for the record and find out what the specific
issue is.
[The information referred to follows:]
The authority for Federal agencies to enter into Energy Savings
Performance Contracts (ESPC) is established by 42 U.S.C. section 8287.
Further guidance for Department of Defense is provided by 10 U.S.C.
section 2913. All Federal agencies are authorized to use ESPCs to
finance energy saving measures. If a Federal agency uses the ESPC
authority to include renewable energy which requires a power purchase
agreement (e.g. larger than rooftop solar), the term in which the
Federal agency can purchase the energy produced is for up to 10 years.
Senator Shaheen. I will be happy to see that.
Mr. McGinn. Senator, I would just like to add that we have
implemented an energy return on investment model that we are
working with the ESCOs. We are saying here are the criteria
that we are using to decide the terms and conditions of an
ESPC. We are educating them so that they can aim at meeting
those criteria when they make proposals. But also we are asking
them what is wrong about this model. Are there other things
that we should be considering that you have learned from your
business case analysis in private sector transactions similar
with a university, municipality, or a light industrial park
where they have brought their considerable technological and
financial wherewithal to bear to reduce those energy costs? We
are finding that this dialogue with the ESCOs is absolutely
essential to meeting those goals and really exceeding them.
Senator Shaheen. I am a big proponent, having seen it work
as Governor when we did buildings in New Hampshire. I think it
is a great way to provide savings and something that I think we
ought to be doing across the Federal Government and trying to
figure out why CBO is viewing this in a different way when it
comes to other Federal agencies.
In terms of performance incentives, it is my understanding,
Secretary McGinn, that you have presented an award to some
folks for actual savings and that that helps to incentivize
crews. For example, I was given the example of the USS Peleliu
that saved $5.3 million in fuel compared to ships in the same
class. Can you talk about how incentivizing that comparison is
helpful?
Mr. McGinn. I mentioned earlier that I had been in Norfolk
last week and I was in San Diego in February with the fleet
commanders and their chains of command to present awards like
the one to the Peleliu. We actually recognized a whole variety
of different types of ships, the absolute best performers with
cash awards. The only stipulation is that cash has to be used
for increasing their energy savings and energy efficiency. We
also recognized individual commanding officers and senior
enlisted folks with certificates to illustrate the point that
we really value the kinds of practices that these ships have
used to achieve those energy savings. We do this in a formal
way on an annual basis for all of our fleet concentration
areas, but it is an ongoing process with the fleets to make
sure that everybody gets it and they are availing themselves of
the lessons learned.
Senator Shaheen. How do we codify the goals for energy
savings in a way that means that they continue, if leadership
changes or if there are other issues that come up, so that we
can continue to produce these kinds of savings?
Mr. McGinn. At the highest levels in our precepts that are
assigned for selection for various promotion boards, Secretary
Mabus has put in energy and energy awareness, energy savings as
one of the criteria that should be considered by the promotion
board. It is discussed in fitness reports and evaluations. In
every way possible, we are emphasizing this idea that we are
all about warfighting readiness. There is a bright connection,
inextricable connection, between warfighting readiness and
energy. Therefore, if you want to be a warfighter, you have to
be an energy warfighter as well.
Senator Shaheen. Are the Army and Air Force doing similar
kinds of efforts to codify the goals into what you are doing in
the future?
Ms. Hammack. Yes. The Army just updated our officer
evaluation reports and we have a similar metrics in it.
But one of the things we have also done is every month we
issue a report and it shows who the largest energy consumers
are and the percent change. We have found that showing where
you stack up on the chart is one method of promoting
efficiencies, and you do not want to be the one who is the
biggest consumer with the highest growth rate.
Ms. Ferguson. I would say the Air Force does this a lot
through our Air Force governance process for energy, and that
is overseen by the Vice Chief of Staff of the Air Force and the
Under Secretary of the Air Force, so at the highest levels.
Each one of the major commands sits on that, and we track each
one of the metrics, whether it is the industrial energy,
facilities energy, or operational energy.
To get back to the earlier question, we also do provide
some financial awards, particularly Air Mobility Command, to
both individuals and to units for saving fuel, operational
fuel.
To brag just a little bit on the Air Force, we have won 21
Federal energy management level awards since 2010. A lot of Air
Force folks have been recognized at a national level for the
good work they have done in energy initiatives.
Senator Shaheen. What have you found to be most effective
in terms of encouraging energy savings? Has it been the cash
awards? Has it been the comparison to how you stack up against
other units or other operations? What is the most effective?
Ms. Ferguson. I do not know if I could say what the most
effective is, but I think all of them have great benefits. I
think the folks like to get recognized for the great work that
they are doing, no matter how we do it.
Mr. McGinn. I would say probably competition, that
professional pride in your unit and your individual performance
that is a real driver. The cash awards are nice, but they are
not as important as that professional pride and competition.
Ms. Hammack. I will echo the competition. The competition
seems to be one of the biggest drivers. You want to be a
winner, and so highlighting those who are winners and showing
where you rack and stack can help motivate individuals.
Senator Shaheen. Thank you all very much. I have no further
questions.
We will leave the record open until close of business on
Friday.
The hearing is adjourned.
[Whereupon, at 11:39 a.m., the subcommittee adjourned.]
[Questions for the record with answers supplied follow:]
Questions Submitted by Senator Jeanne Shaheen
funding for army laboratories
1. Senator Shaheen. Ms. Hammack, it appears that the fiscal year
2015 military construction (MILCON) request does not include funding
for U.S. Army laboratories. While I understand that current budget
pressures have forced significant cuts to the MILCON account, I am
concerned that the underfunding of laboratory facilities has been a
long-term trend that has resulted in degraded capabilities, putting
them at a significant disadvantage relative to private sector
facilities. Do you share this concern?
Ms. Hammack. Yes, I share your concern with the state of our
laboratory infrastructure. While we have not requested MILCON funding
for laboratories in this year's request, the laboratories have been
able to use recent authorities granted to them by Congress to maintain
their capabilities.
2. Senator Shaheen. Ms. Hammack, is there any relief programmed in
the Future Years Defense Program (FYDP)?
Ms. Hammack. While the Army is committed to laboratory
revitalization, there are no MILCON projects for laboratories in the
current FYDP.
cost sharing
3. Senator Shaheen. Ms. Hammack, would there be value in developing
usable mechanisms by which the Army can share in the costs of building
and maintaining new research infrastructure with other Services, other
Federal or State/local agencies or the private sector?
Ms. Hammack. Yes. Having clearly defined and usable mechanisms to
share the capital and maintenance costs would benefit the Army.
Currently, mechanisms exist to share in the costs of building and
maintenance of new research infrastructure with other military
Services. For example, projects can be conjunctively funded by two
MILCON appropriations (two Services or a Service and a Defense-wide
appropriation). However, this process is cumbersome and requires
considerable congressional engagement. To avoid over-complication, the
two appropriation owners will generally coordinate to determine the
best Service to execute the entire project and then coordinate with the
Office of the Secretary of Defense (OSD) to transfer funding across
appropriations to fund the project.
______
Questions Submitted by Senator Tim Kaine
naval facilities security and unauthorized access
4. Senator Kaine. Secretary McGinn, I want to offer my condolences
to the Navy on the loss of a sailor, Petty Officer 2nd Class Mark A.
Mayo, at Naval Station Norfolk last week on March 24. I know the Navy
is conducting an investigation into the incident, but I am pleased to
hear that the Navy is now conducting additional screening measures at
installations. Along with the steps the Navy has already taken to
address the concerns of facility security and unauthorized access at
installations as well as planned actions, was the Transportation Worker
Identification Credential (TWIC) card for the perpetrator issued before
or after he was convicted with the manslaughter charge?
Mr. McGinn. The TWIC is administered by the Transportation Security
Administration (TSA) not the Department of the Navy. Inquiries
regarding TSA vetting procedures, protocols, or details regarding any
individual card holder should be provided to the Department of Homeland
Security (DHS) or TSA.
5. Senator Kaine. Secretary McGinn, if the conviction came before
issuance of the TWIC card, why was the credential still issued to the
individual and how can such cases be prevented in the future?
Mr. McGinn. The safety of our people and resources are our highest
priorities. The TWIC is administered by the TSA not the Department of
the Navy. Inquiries regarding TSA vetting procedures, protocols, or
details regarding any individual card holder should be provided to DHS
or TSA.
6. Senator Kaine. Secretary McGinn, if the conviction came after
issuance of the TWIC card, what measures can be put in place to cross-
check such individuals who are later involved in serious crimes?
Mr. McGinn. The safety of our people and resources are our highest
priorities. The TWIC is administered by the TSA not the Department of
the Navy. Inquiries regarding TSA vetting procedures, protocols, or
details regarding any individual card holder should be provided to DHS
or TSA.
______
Questions Submitted by Senator Kelly Ayotte
delayed projects at public shipyards
7. Senator Ayotte. Secretary McGinn, could you please give me a
list of delayed projects at our four public shipyards?
Mr. McGinn. There are two MILCON projects for naval shipyards that
were programmed in our 2014 budget request for fiscal year 2015, but
are now delayed to later in our FYDP. These projects are:
1. P285 Addition to Building 373 Barracks at Portsmouth Naval
Shipyard.
2. P401 Regional Ship Maintenance Support Facility to support
depot-level work performed by Puget Sound Naval Shipyard.
kc-46 beddown
8. Senator Ayotte. Ms. Ferguson, this year's budget prioritizes Air
Force investments in the KC-46A, both development as well as the
beddown. On May 22, 2013, the Air Force selected the first three bases
that will host the KC-46A tanker. Across the FYDP, would you please
review the MILCON funding amounts and timelines that the Department of
Defense (DOD) is requesting for the KC-46A beddown at McConnell, Pease,
and Altus?
Ms. Ferguson. The Air Force has completed the Environmental Impact
Statement (EIS) for the KC-46A Formal Training Unit (FTU) and Main
Operating Base (MOB) 1, and a final decision on the beddown locations
was made and announced as Altus for the FTU and McConnell for the first
MOB on April 22, 2014.
The final basing decision for MOB 2, the first Air National Guard
(ANG) location is expected early summer. Please see the tentative KC-
46A delivery schedule below for FTU, MOB 1, and MOB 2.
Note: Depot planning is geared towards making sure everything is in
place to support aircraft C-checks that are scheduled to begin in
fiscal year 2018.
Please also see the attached spreadsheet for information on
proposed MILCON projects pending Air Force final decisions.
9. Senator Ayotte. Ms. Ferguson, are there any outstanding issues
that this subcommittee needs to be aware of regarding the beddown of
the KC-46A at this time?
Ms. Ferguson. MILCON in support of the KC-46A FTU and first MOB is
on track to be awarded in June 2014. Further, the Air Force is on
schedule to announce the final basing decision for the second MOB this
summer. Pending support for MILCON in the fiscal year 2015 President's
budget request, and resolution of fair market valuation and a plan by
the City of Oklahoma City for the acquisition of real estate adjacent
to Tinker Air Force Base, OK (in support of KC-46A depot beddown),
there are no outstanding issues regarding KC-46A beddown the
subcommittee should be aware of.
east coast missile defense site
10. Senator Ayotte. Mr. Conger, section 239 of the National Defense
Authorization Act (NDAA) for Fiscal Year 2014 requires the Secretary of
Defense to provide the congressional defense committees with a detailed
briefing on the current status of efforts and plans for an East Coast
Missile Defense site not later than 180 days after the completion of
the site evaluation study. In January of this year, DOD announced four
sites to include an EIS for potential missile defense sites. What is
the current status of the EIS at each of the four announced sites?
Mr. Conger. The Missile Defense Agency (MDA) initiated the EIS for
the Continental United States Interceptor Site (CIS) (i.e. East Coast
Missile Defense Site) in January 2014. The EIS is expected to take
approximately 24 months. MDA conducted initial meetings with each of
the announced installation's environmental staff and State and Federal
regulators. Additionally, MDA is in the final stages of planning/
coordinating the necessary environmental surveys required for each
specific installation. MDA plans to submit the notice of intent in
June/July and conduct public scoping meetings in the July/August
timeframe.
11. Senator Ayotte. Mr. Conger, are there any issues that this
subcommittee needs to be aware of that would impact meeting timelines
directed by law?
Mr. Conger. No, there are no issues that would impact meeting
timelines directed by law. As required by the NDAA for Fiscal Year
2014, section 239, Vice Admiral Syring will update the congressional
professional staff members in July/August 2014.
base realignment and closure costs and savings
12. Senator Ayotte. Mr. Conger, Secretary Burke, Secretary Hammack,
Secretary McGinn, and Ms. Ferguson, are each of the Services still
paying environmental cleanup expenses from past Base Realignment and
Closure (BRAC) rounds?
Mr. Conger and Ms. Burke. Yes, each military Service is still
paying environmental cleanup expenses from past BRAC rounds. Through
the end of fiscal year 2013, the military Services have completed
cleanup at 83 percent of BRAC sites and they are on track to exceed
DOD's goal to complete cleanup at 90 percent and 95 percent of sites by
the end of fiscal year 2018 and fiscal year 2021, respectively. Most of
the remaining expenses are for operating cleanup systems and conducting
long-term management (e.g., environmental monitoring, review of site
conditions) to ensure continued protection of human health and the
environment, once active cleanup is complete.
Ms. Hammack. Yes, the Army continues to pay for environmental
cleanup expenses from past BRAC rounds.
Mr. McGinn. Yes, the Navy is still paying environmental cleanup
expenses from past BRAC rounds.
Ms. Ferguson. Yes, there are ongoing environmental cleanup expenses
from all five BRAC rounds.
13. Senator Ayotte. Mr. Conger, Secretary Burke, Secretary Hammack,
Secretary McGinn, and Ms. Ferguson, how much in fiscal year 2015 do
each of the Services propose spending on previous BRAC rounds?
Mr. Conger and Ms. Burke. DOD is planning to spend $355 million in
fiscal year 2015 at BRAC installations: $93 million at Army BRAC
installations, $154 million at Navy BRAC installations, $106 million at
Air Force BRAC installations, and $2 million at Defense-wide
installations.
Ms. Hammack. The Army has requested $84.4 million in fiscal year
2015 for environmental and caretaker activities for the following
previous BRAC rounds: BRAC 1988 $12.4 million; BRAC 1991 $4.3 million;
BRAC 1993 $1.8 million; BRAC 1995 $21.1 million; and BRAC 2005 $44.8
million.
In addition to the expenditures programmed in the fiscal year 2015
budget request, the Army is taking advantage of the flexibility
provided by the consolidation of the BRAC accounts to accelerate
environmental cleanup. The Army plans to expend unobligated prior-year
balances during execution of its fiscal years 2014 and 2015 BRAC
program which will bring the total combined fiscal years 2014 and 2015
obligations to approximately $680 million. These projected obligations
will help to significantly reduce the remaining BRAC environmental
cleanup liability currently estimated at $1.2 billion.
Mr. McGinn. The Navy's BRAC fiscal year 2015 $138 million budget
request will be spent on BRAC rounds II through V.
Ms. Ferguson. The Air Force's fiscal year 2015 President's budget
request, including environmental and operation and maintenance, is in
the amount of $92 million.
14. Senator Ayotte. Mr. Conger, Secretary Burke, Secretary Hammack,
Secretary McGinn, and Ms. Ferguson, what are the earliest BRAC rounds
from which each of the Services are still incurring expenses?
Mr. Conger and Ms. Burke. 1988 is the earliest BRAC round from
which the military Services are incurring expenses. The military
Services are making good progress completing cleanup at BRAC sites, and
they are on track to exceed DOD's goal to complete cleanup at 90
percent and 95 percent of sites by the end of fiscal year 2018 and
fiscal year 2021, respectively.
Ms. Hammack. The earliest BRAC round for which the Army is still
incurring expenses is BRAC 1988.
Mr. McGinn. The Navy still has environmental liabilities for one
base from BRAC round I; however, all BRAC round I property has been
transferred.
Ms. Ferguson. The Air Force is still incurring expenses from round
1 (BRAC 88) at the following former installations: Chanute Air Force
Base, IL; George Air Force Base, CA; and Norton Air Force Base, CA.
15. Senator Ayotte. Mr. Conger, Secretary Burke, Secretary Hammack,
Secretary McGinn, and Ms. Ferguson, how much would the proposed BRAC
round in 2017 cost?
Mr. Conger and Ms. Burke. A 2017 BRAC round should be similar to
the 1993 and 1995 rounds. Based on a notional 4 to 5 percent reduction
in plant replacement value and using the average of actual costs and
savings from previous rounds (BRAC 1993/1995 data) as the basis, DOD
estimates that over the 6-year implementation (2018-2023) period,
cumulative costs would be $5.8 billion, slightly more than the
cumulative savings of $5.7 billion, therefore it would be a wash during
the timeframe. Our projection is that we can achieve recurring savings
(after implementation) on the order of $2 billion/year with another
round.
Ms. Hammack. The Department proposes a fiscal year 2017 BRAC round
to accomplish reductions in civilian workforce levels and garner future
multiyear savings. This proposal results in a budget of $1.6 billion
through fiscal year 2019, but generates multiyear savings starting in
fiscal year 2020.
Mr. McGinn. OSD anticipates a 2017 BRAC round would be similar to
the 1993 and 1995 rounds. Based on a notional 4 to 5 percent reduction
in plant replacement value and using the average of actual costs and
savings from previous rounds (BRAC 1993/1995 data) as the basis, DOD
estimates that over the 6-year implementation (2018-2023) period,
cumulative costs would be $5.8 billion, slightly more than the
cumulative savings of $5.7 billion, therefore it would pay for itself
during the implementation period. The Department of the Navy welcomes
the opportunity to conduct the analysis and determine what savings we
may achieve through an additional round of BRAC.
Ms. Ferguson. The Air Force's portion of the overall cost for a
BRAC round in 2017 would depend on OSD criteria for evaluation and the
resulting recommendations. The Air Force has not done any analysis to
date to calculate costs.
16. Senator Ayotte. Mr. Conger, Secretary Burke, Secretary Hammack,
Secretary McGinn, and Ms. Ferguson, the Government Accountability
Office (GAO) found in 2012 that BRAC 2005 implementation costs grew to
about $35 billion--exceeding the initial 2005 estimate of 67 percent.
Given this discrepancy between the original cost estimates and the
actual costs from the 2005 BRAC round, how confident can we be
regarding cost estimates for a new BRAC round?
Mr. Conger and Ms. Burke. As we have indicated previously, GAO's
2012 report found that most of the cost increase could be tied to only
14 of the 182 recommendations. Those increases were largely due to
deliberate and subsequent decisions to expand the originally-envisioned
scope of construction and recapitalization to address deficiencies in
our enduring facilities or to expand the capabilities they provide as
opposed to issues of accuracy. Second, BRAC 2005 occurred during a time
of growth (both personnel and resources) and as such, contributed to
scope increases. Third, we will incorporate our own lessons learned and
the findings of GAO to improve our cost estimating, particularly for
areas such as information technology.
Ms. Hammack. There are good reasons to be confident that a future
BRAC round would not experience similar cost growth analyzed in GAO's
2012 report. GAO found that most of the cost increase (72 percent) tied
to only 14 of the 182 recommendations. The Army was the main lead on 6
of those 14. The cost increases were largely due to deliberate and
subsequent decisions to expand the originally-envisioned scope of
construction and recapitalization to address deficiencies in enduring
facilities and/or expand the capabilities provided as opposed to issues
of accuracy.
Another reason I am confident: BRAC 2005 was an anomaly in several
important ways. There were four major factors that drove most of the
Army's cost increases, all of which would be absent in a future BRAC
round.
Factor #1: BRAC 2005 was a transformational BRAC conducted while
fighting two wars. This was an anomaly because prior BRAC rounds
occurred as the Cold War ended. The Army used the BRAC 2005 process to
transform how we train and organize our modular Brigade Combat Teams.
For example, we created a Maneuver Center of Excellence at Fort Benning
that combined the Armor and Infantry Schools, creating new and better
capability. Similarly, at Fort Lee, VA, we created a Combat Service
Support Center of Excellence. Those were two of the six Army-led BRAC
recommendations that generated much of the cost increase evaluated by
GAO. The Senate Armed Services Committee reviewed every project during
its annual budget oversight and authorization process.
Factor #2: BRAC 2005 was implemented while Army end strength and
force structure were increasing. This was an anomaly because all prior
BRAC rounds occurred while end strength and force structure were
decreasing. A future BRAC round would similarly occur while end
strength and force structure are decreasing.
Factor #3: BRAC 2005 accommodated the return of tens of thousands
of soldiers from overseas, back to the United States. This was an
anomaly because a future BRAC round would have no expectation that
large numbers of forces stationed in Europe would return to the United
States. The Army had existing facilities in Europe and Korea, but
needed to construct new facilities here at home.
Factor #4: The BRAC 2005 process produced two types of
recommendations--efficiency and transformation. The Army saves $1
billion a year in annual recurring savings from the BRAC 2005 process
and began realizing those savings when the BRAC process concluded in
September 2011. For the Army, BRAC 2005 efficiency recommendations cost
about $2 billion to implement and save about $575 million each year. A
future BRAC would be an efficiency BRAC round, which would likely yield
similar returns on investment.
Mr. McGinn. GAO's 2012 report found that most of the cost increase
could be tied to only 14 of the total 182 DOD recommendations. Those
increases were largely due to deliberate and subsequent decisions to
expand the originally-envisioned scope of construction and
recapitalization to address deficiencies in enduring facilities or to
expand the capabilities they provide. Second, BRAC 2005 occurred during
a time of growth (both personnel and resources) and as such contributed
to scope increases. Finally, lessons learned and the findings of GAO
will inform our analysis and cost estimating processes in a future
round of BRAC.
Ms. Ferguson. The Air Force cannot speculate on how accurate future
estimates may be; however, it is important to note that the Air Force
completed all of its BRAC 2005 actions on schedule and within the
estimated total costs and achieved savings, both during the 6-year
implementation period and annually thereafter.
17. Senator Ayotte. Mr. Conger, when do you expect to reach the
aggregate break-even point for the 2005 BRAC round? In other words,
when will the aggregate savings exceed the costs?
Mr. Conger. Accumulated savings will exceed one-time implementation
costs in 2018.
military construction and sustainment funding for the national guard
and reserve
18. Senator Ayotte. Secretary Hammack, a major concern for the
subcommittee has been the underfunding of the infrastructure needs of
our National Guard and Reserve components. Over 46 percent of Army
Guard Readiness Centers are 50-years-old and older, and many are not
suitable to put soldiers in. The decrease in facility investment will
lead to lasting negative impacts on the National Guard's ability to
effectively serve the Nation and its communities during crises. How
would you assess the overall infrastructure readiness of the Army
National Guard and Reserve units?
Ms. Hammack. The Army has concerns regarding all Army facilities
including those of the Army National Guard (ARNG) and Army Reserve.
Projected funding levels present challenges to adequately support a
modern force with modern equipment.
In the short term, in order to meet the mission, the Army will rely
more on sustainment, restoration and modernization funding to balance
the lower MILCON levels. The Army will also closely monitor potential
life/health/safety issues caused by facility degradation and utilize
mitigation strategies.
To ensure the Reserve components are being funded at appropriate
levels with limited resources, the Army implemented an integrated
Facility Investment Strategy (FIS) for MILCON funding distribution
between the components. This distribution is based on models of record
that provide facility condition and requirement data using business
rules that are replicable and transparent. In addition, the Army has
recognized readiness centers and vehicle maintenance shops as focus
areas in its facility investment strategy.
The ARNG is in the final phase of developing its Readiness Center
Transformation Master Plan (RCTMP), which will provide a comprehensive
capital investment strategy for both MILCON and restoration and
modernization for every State. The Army anticipates the study will
identify many opportunities for consolidation and divesture dependent
upon the mission, demographics, and facility condition.
19. Senator Ayotte. Secretary Hammack, how does the Army prioritize
its MILCON and facility sustainment funding across the Active, National
Guard, and Reserve Forces?
Ms. Hammack. As we shape the Army of 2020 and beyond through a
series of strategic choices, the Army Senior Leadership implements an
integrated FIS in support of Total Army priorities and requirements
across all components. The Army FIS uses MILCON funding to focus on the
highest need to replace failing facilities and build out critical
facility shortages. As a result, MILCON funding is spread across the
Active, National Guard, and Army Reserve appropriations according to a
parity formula that is based on facility requirements and condition.
Prioritization of MILCON is also based on facility requirements in
support of Army Senior Leader Initiatives required for equipment
fielding, force structure updates, and readiness. Examples of these
needs include the activation of the 13th Combat Aviation Brigade,
establishment of the Army Cyber Command, elimination of inadequate
training barracks, and new facilities for the Gray Eagle Unmanned
Aerial System in the United States (the system was initially fielded
directly to combat). MILCON prioritization across all components is
additionally focused on the extent to which a project addresses
obsolete, failed, or failing facilities, alleviates critical space
deficits on an installation or site, eliminates leased facilities, and
provides for demolition of older facilities balanced with new
construction.
Sustainment funding level is equally distributed across the Active,
National Guard, and Army Reserve in accordance with the OSD Facilities
Sustainment Model (FSM). It is the Army's intent to fund sustainment at
the same percentage across the components. Although our goal is 90
percent of FSM requirements, the Army and all Services have taken risk
and resourced sustainment at lower levels due to budget reductions in
support of our Nation's deficit reduction goal. Components target the
allocated sustainment in support of life, health, and safety projects
to protect the quality of life of our soldiers, then focus funding
towards the sustainment projects with the highest return on investment
based on facility requirements, conditions, and mission need.
20. Senator Ayotte. Ms. Ferguson, how is the Air Force handling the
underfunding of the infrastructure needs of our National Guard and
Reserve Forces and installations?
Ms. Ferguson. In our fiscal year 2015 President's budget request,
the Air Force--both Active and Reserve components--attempted to strike
the delicate balance of a ready force today and a modern force
tomorrow, while also recovering from the impacts of sequestration and
adjusting to budget reductions.
To help achieve that ready and modern force balance, the Air Force
elected to accept risk in installation support, MILCON, and facilities
sustainment. Major commands, the National Guard Bureau, and Air Force
Reserve Command played a significant role in determining the amount of
risk we could assume. Ultimately, the Air Force funded facilities
sustainment at 65 percent of the OSD's FSM; reduced restoration and
modernization account by 33 percent, and MILCON by 28 percent, from the
fiscal year 2014 President's budget. The decrease in MILCON defers
current mission infrastructure recapitalization requirements while
supporting higher priority new mission MILCON, including combatant
commander requirements, weapon system beddowns, and capabilities to
execute the Defense Strategic Guidance. In the future, as new weapon
system requirements are fielded across the total force, MILCON
recapitalizing current infrastructure will continue to be difficult to
resource. We acknowledge near-term facilities sustainment, restoration
and modernization, and MILCON program reductions will have long-term
effects on the health of infrastructure. To overcome the underfunding
of infrastructure, we will continue to employ centralized asset
management principles to target our severely limited resources against
mission-critical, worst-first requirements. However, in the MILCON
account, the Reserve component received at, or above, their fair-share
of available funding.
national guard bureau's readiness center transformation study
21. Senator Ayotte. Mr. Conger, I understand that the National
Guard Bureau is conducting a Readiness Center Transformation Study for
all States, territories, and the District of Columbia, to determine the
costs of replacing, modernizing, or restoring aging infrastructure,
while closing unacceptable facilities, as needed. In December 2013, the
National Guard Bureau submitted an interim report to DOD for review.
When will this report be delivered to Congress?
Mr. Conger. The Army National Guard is on track to deliver the
final report of the RCTMP in December 2014.
22. Senator Ayotte. Mr. Conger, Secretary Burke, Secretary Hammack,
and Ms. Ferguson, will DOD use this study to address infrastructure
shortfalls in the National Guard and Reserve Forces?
Mr. Conger and Ms. Burke. DOD will use the report to help inform
Reserve center investment decisions. However, as in most investment
decisions, there are many factors that must be considered as we build
our long-term facility recapitalization priorities.
Ms. Hammack. Yes, DOD will use the RCTMP to inform investment
decisions for the ARNG infrastructure in a myriad of scenarios
including BRAC. The study only addresses National Guard Readiness
Centers, not Army Reserve facilities.
In August 2010, Senate Report 111-201 requested a study be
conducted on ARNG readiness centers followed by a report on findings.
In response to the study, the ARNG is now in the final phase of
developing a RCTMP as a part of its final report. This plan will
provide a comprehensive capital investment strategy for both MILCON and
restoration and modernization for every State. The study is identifying
many opportunities for consolidation and divesture where it makes sense
for the mission, demographics, and facility condition. The investment
strategy is prioritized to ensure optimal mission and response
effectiveness. The final report is scheduled for completion in December
2014.
The RCTMP can be used to inform facility condition of Guard
readiness centers. The initial trends from the study indicate an
average facility condition slipping from amber to red, and a 40 percent
space shortfall. It also indicates roughly 32 percent of the readiness
centers are located in areas not supported by demographics or mission
requirements.
The RCTMP will provide a valuable investment plan for both MILCON
and facilities sustainment restoration and modernization, because it
utilizes a risk-based prioritized strategy developed from robust
methodology, consistent criteria, and creditable data.
Ms. Ferguson. Senate Report 111-201, accompanying the NDAA for
Fiscal Year 2011, directs the Secretary of the Army to report to the
Senate Armed Services Committee no later than February 1, 2011, on the
results and recommendations of an independent study which shall review:
(1) Standards for facility size, configuration, and equipment for
the range of missions and training supported by readiness centers;
(2) An assessment of each readiness center to objectively measure
and determine the current facility condition and capability to support
authorized manpower, unit training, and operations;
(3) An assessment of supporting facilities and functions to
include equipment storage, classrooms, force protection, utilities,
maintenance, administration, and proximity of support and training
facilities;
(4) Recommendations for the placement of new readiness centers,
the relocation of existing readiness centers, or a change in the
mission of units assigned to readiness centers to ideally position the
ARNG in current or projected population centers;
(5) Recommendations for enhanced use of readiness centers to
facilitate ARNG family support programs during deployments;
(6) An analysis of the feasibility, potential costs, and benefits
of shared use of ARNG readiness centers with other local, State, or
Federal agencies to improve response to local emergencies as well as
the community support provided by readiness centers; and
(7) An investment strategy and proposed funding amounts in a
prioritized project list to correct the most critical facility
shortfalls across the inventory of ARNG readiness centers.
The study was directed to the Secretary of the Army, and conducted
by the ARNG to address ARNG readiness center requirements; the Air
Force has thus not used it to assess or address ANG or Air Force
Reserve missions or facility requirements.
payment-in-kind
23. Senator Ayotte. Mr. Conger, the NDAA for Fiscal Year 2014
contained language that requires all future MILCON projects funded
using in-kind payments pursuant to a bilateral agreement with partner
nations be submitted to Congress for prior authorization. This language
was included in the bill due to concerns about how DOD selects and
prioritizes host nation funded construction projects. In your written
statement, you said you disagreed with the provision because it was
overly restrictive. However, this subcommittee's review of certain
costs associated with U.S. military presence in Germany and the Asia-
Pacific region identified a number of concerns regarding the spending
and oversight of foreign government payments, particularly in-kind
payments used for MILCON projects. What actions has DOD taken to comply
with the new restrictions and to improve oversight?
Mr. Conger. DOD adheres to the relevant statutes pertaining to in-
kind payments. To implement changes in the NDAA for Fiscal Year 2014
regarding in-kind payments, we are drafting policy that will clarify
the definition of in-kind payments, and the processes the military
departments and combatant commands will follow to recommend projects
that will use the in-kind payments, to include required notifications
to Congress. In order to improve the existing oversight and
transparency of this program, we intend on providing Congress with an
annual report that provides a list of construction projects provided by
a host nation as compensation for the residual value of U.S. funded
improvements returned to that host nation (i.e., in-kind payments) and
host nation support provided in the form of direct construction rather
than a cash contribution for the explicit purpose of defraying some, or
all, of DOD's costs to station, maintain, and train military forces in
their country (i.e., Japan and Korea). Additionally, my staff has
expanded its review of the documentation supporting both the in-kind
payments and voluntary contributions by host nations and will begin
conducting scheduled program management reviews and establishing
consistent investment policies.
rebasing of marines from okinawa to guam
24. Senator Ayotte. Mr. Conger and Secretary McGinn, one of the
most significant rebasing actions DOD is undertaking is the relocation
of thousands of marines from Okinawa to Guam, Australia, Iwakuni,
Hawaii, and the continental United States. This movement is a key part
of our combat capability in the Asia-Pacific region. What are the
current dates each of the movements should be complete?
Mr. Conger. Guam: With congressional support and subject to several
assumptions, our current projection is to have the first Marine Corps
units start moving to Guam in 2021, establish an initial Marine Air
Ground Task Force (MAGTF) capability by 2022/2023, and relocate the
final Marine Corps units from Okinawa to Guam by 2026.
Hawaii: The Marine Corps plans to increase its presence in Hawaii
by approximately 900 personnel (not including dependents) to
accommodate numerous changes to the Marine Corps Aviation Plan by
fiscal year 2018. The relocation of approximately 2,700 marines from
Okinawa to Hawaii--planned to arrive beginning in 2027--is currently in
the very early stages of planning.
Australia: In April 2014, the Marine Corps began the execution of
the first Phase 2 deployment, an infantry battalion supported by a CH-
53E detachment of four aircraft and a small logistics detachment, as
part of Marine Rotational Force-Darwin. The prerequisites to move
through phases are: (1) Bilateral approval; (2) Facilities
availability; and (3) Marine Corps unit and equipment sourcing
solution. Phase 3 (a Battalion Landing Team with aviation and logistics
elements) is in the early stages of planning and discussions, and will
build capability over time, progressing to the Phase 4, 2,500-personnel
MAGTF.
Iwakuni: The Marine Corps recently held the grand opening of new
aircraft hangars and facilities at MCAS Iwakuni in support of the VMGR-
152 (KC-130 aircraft) move from MCAS Futenma this summer, as part of
the ongoing construction focused on rebuilding 77 percent of the
station under the Defense Policy Review Initiative.
Okinawa: The Okinawa Consolidation Plan was unveiled on April 5,
2013, and contained projected completion dates for land returns. The
Government of Japan (GoJ) derived these dates from joint timelines for
construction and development and reflect a GoJ assessment of their own
legal requirements and construction capabilities. The dates represent
an optimistic best-case scenario and ministers welcomed the progress on
land returns in the October 2013 U.S.-Japan Security Consultative
Committee, also referred to as the 2+2 talks. To date, the Marine Corps
has completed agreements that are over a year ahead of schedule. Per
bilateral agreement, the Marine Corps must complete unilateral Okinawa
consolidation master plans by December 2015 and obtain bilateral
agreement prior to April 2016.
The April 2012 Security Consultative Committee Joint Statement
states that the Marine Corps will not turn over MCAS Futenma until the
air facility at Camp Schwab is complete and operative; the completion
of which is a primary driver for the closure of MCAS Futenma. Following
the December 27, 2013, approval of the landfill permit at Henoko Bay,
the GoJ continued their commitment with the recent Ministry of Defense
announcement of the awarding of eight contracts totaling $14.4 million
using JFY 2013 funds for survey and design work for the landfill.
Internal analysis indicates that the Marine Corps Air Facility at Camp
Schwab will be operational in 10 years. The GoJ is looking into ways to
shorten the timeline.
Mr. McGinn. Guam: In accordance with section 102(2)(c) of the
National Environmental Policy Act (NEPA), the Department of the Navy is
preparing a ``Supplemental Environmental Impact Statement (SEIS) for
the Guam and Commonwealth of the Northern Mariana Islands Military
Relocation (2012 Roadmap Adjustments).'' The SEIS evaluates potential
alternatives for construction and operation of a main cantonment area,
including family housing, and a Live-Fire Training Range Complex
(LFTRC) to support the relocation of a substantially reduced number of
marines than previously analyzed in the 2010 EIS. Construction projects
at the main cantonment and the LFTRC cannot commence until after the
Record of Decision for the SEIS is executed in 2015; however, the
Marine Corps is authorized by exception to move forward on projects
that support current and future training and are unencumbered by the
SEIS (specifically; Andersen Air Force Base North Ramp, Andersen South
and Apra Harbor locations). With congressional support and subject to
several assumptions, our current projection is to have the first Marine
Corps units start moving to Guam in 2021, establish an initial MAGTF
capability by 2022/2023, and relocate the final Marine Corps units from
Okinawa to Guam by 2026.
Hawaii: The Marine Corps plans to increase its presence in Hawaii
by approximately 900 personnel (not including dependents) to
accommodate numerous changes to the Marine Corps Aviation Plan by
fiscal year 2018. To accommodate the training, readiness, and quality
of life requirements for these additional units, the Marine Corps has
so far received nearly $300 million in MILCON funding from Congress in
fiscal year 2013/2014 and has requested $53 million in fiscal year
2015. Additional projects are currently being developed and reviewed.
The relocation of approximately 2,700 marines from Okinawa to Hawaii--
planned to arrive beginning in 2027--is currently in the very early
stages of planning. Several initial studies have been completed; these
will inform future NEPA analysis and are essential before accurate and
budget-quality cost estimates and a master plan for the relocation to
Hawaii can be completed. The environmental review process is currently
planned to begin in 2019 and will identify and address issues of local
concern, such as compatible land uses, off-base infrastructure
improvements, traffic impacts, natural and cultural resources impacts,
and necessary school upgrades. Final basing decisions and construction
cannot occur until after an EIS and Record of Decision have been
completed.
Australia: In April 2014, the Marine Corps began the execution of
the first Phase 2 deployment, an infantry battalion supported by a CH-
53E detachment of four aircraft and a small logistics detachment, as
part of Marine Rotational Force-Darwin. The prerequisites to move
through phases are: (1) Bilateral approval; (2) Facilities
availability; and (3) Marine Corps unit and equipment sourcing
solution. Phase 3 (a Battalion Landing Team with aviation and logistics
elements) is in early stages of planning and discussions, and will
build capability over time, progressing to the Phase 4, 2,500-personnel
MAGTF.
Iwakuni: The Marine Corps recently held the grand opening of new
aircraft hangars and facilities at MCAS Iwakuni in support of the VMGR-
152 (KC-130 aircraft) move from MCAS Futenma this summer, as part of
the ongoing construction focused on rebuilding 77 percent of the
station under the Defense Policy Review Initiative.
Okinawa: The Okinawa Consolidation Plan was unveiled on April 5,
2013, and contained projected completion dates for land returns. The
GoJ derived these dates from joint timelines for construction and
development and reflect a GoJ assessment of their own legal
requirements and construction capabilities. The dates represent an
optimistic best-case scenario and ministers welcomed the progress on
land returns in the October 2013 U.S.-Japan Security Consultative
Committee, also referred to as the 2+2 talks. To date, the Marine Corps
has completed joint committee agreements on four areas eligible for
immediate return: (1) Camp Kinser North Access Road has been
transferred to Urasoe City; (2) West Futenma Housing Area of Camp
Foster is in the process of being returned; (3) A bilateral referral is
being executed for a portion of the warehouse area within the Camp
Foster Facilities Engineering Compound; and (4) Camp Kinser area near
gate 5 is in the process of being returned. All of these agreements are
over a year ahead of schedule. The Shirahi River area has also been
identified as an additional area available for immediate return and is
under coordination. Per bilateral agreement, the Marine Corps must
complete unilateral Okinawa consolidation master plans by December 2015
and obtain bilateral agreement prior to April 2016.
The April 2012 Security Consultative Committee Joint Statement
states that the Marine Corps will not turn over MCAS Futenma until the
air facility at Camp Schwab is complete and operative; the completion
of which is a primary driver for the closure of MCAS Futenma. Following
the December 27, 2013, approval of the landfill permit at Henoko Bay,
the GoJ continued their commitment with the recent Ministry of Defense
announcement of the awarding of eight contracts totaling $14.4 million
using JFY 2013 funds for survey and design work for the landfill.
Although the Governor of Okinawa requested that flight operations at
MCAS Futenma cease in 5 years, the current U.S. Marine Corps and U.S.
Forces-Japan internal analysis indicates that the Marine Corps Air
Facility at Camp Schwab will be operational in 10 years. The GoJ is
looking into ways to shorten the timeline.
25. Senator Ayotte. Mr. Conger and Secretary McGinn, what are the
final estimated force sizes at each of these locations?
Mr. Conger. The Marine Corps' Distributed Laydown is a key part of
the rebalance strategy for the Asia-Pacific region and provides U.S.
Pacific Command (PACOM) with agile and responsive MAGTFs in four
geographical regions across the Pacific: Japan, Guam, Hawaii, and
Australia, and supports the Secretary of Defense's requirement for
22,500 marines to remain west of the International Date Line.
Japan: While our presence on Okinawa will gradually be reduced to
approximately 10,000 personnel, Okinawa will continue to be the
mainstay of our forward deployed Marine Corps forces in the Asia-
Pacific region. It is a cornerstone of our Distributed Laydown. In
addition to Okinawa, there will be approximately 3,500 marines in
Iwakuni. Per the terms of our mutual defense treaty, Japan will
continue to provide facilities on Okinawa and mainland Japan for our
use.
Guam: The approximately 5,000 person 3rd Marine Expeditionary
Brigade will consist of its Command Element, a Ground Combat Element
comprised of the 4th Marine Regiment (headquarters, two infantry
battalions, and combat support attachments), a robust Air Combat
Element, and a Combat Service Support Element tailored to its needs.
This Marine Expeditionary Brigade-sized MAGTF will be able to support
the PACOM commander's needs from engagement to crisis response.
Australia: In April 2014, the Marine Corps began the execution of
the first Phase 2 deployment, an infantry battalion supported by a CH-
53E detachment of four aircraft and a small logistics detachment, as
part of Marine Rotational Force-Darwin. The intent in the coming years
is to establish a rotational presence of up to a 2,500 person MAGTF in
the Northern Territory.
Hawaii: The relocation of approximately 2,700 marines from Okinawa
to Hawaii--planned to arrive beginning in 2027--will bring the total
forces in Hawaii to approximately 8,800.
Mr. McGinn. The Marine Corps' Distributed Laydown is a key part of
the rebalance strategy for the Asia-Pacific region and provides PACOM
with agile and responsive MAGTFs in four geographical regions across
the Pacific; Japan, Guam, Hawaii, and Australia, and supports the
Secretary of Defense's requirement for 22,500 marines to remain west of
the International Date Line.
Japan: While our presence on Okinawa will gradually be reduced to
approximately 10,000 personnel, Okinawa will continue to be the
mainstay of our forward deployed Marine Corps forces in the Asia-
Pacific region, and a cornerstone of our Distributed Laydown, which in
addition to Okinawa, there will be approximately 3,500 in Iwakuni. Per
the terms of our mutual defense treaty with Japan, they will continue
to provide facilities on Okinawa and mainland Japan for our use.
Guam: Once the realignment of forces in Okinawa is complete, the
approximately 5,000 personnel 3rd Marine Expeditionary Brigade will
consist of its Command Element, a Ground Combat Element comprised of
the 4th Marine Regiment (headquarters, two infantry battalions, and
combat support attachments), a robust Air Combat Element, and a Combat
Service Support Element tailored to its needs. This Marine
Expeditionary Brigade-sized MAGTF will be able to support the PACOM
commander's needs from engagement to crisis response.
Australia: In April 2014, the Marine Corps began the execution of
the first Phase 2 deployment, an infantry battalion supported by a CH-
53E detachment of four aircraft and a small logistics detachment, as
part of Marine Rotational Force-Darwin. The intent in the coming years
is to establish a rotational presence of up to a 2,500 person MAGTF in
the Northern Territory.
Hawaii: The relocation of approximately 2,700 marines from Okinawa
to Hawaii--planned to arrive beginning in 2027--will bring the total
forces in Hawaii to approximately 8,800.
26. Senator Ayotte. Mr. Conger and Secretary McGinn, do we have a
final estimated cost to the U.S. Government for this overall
relocation?
Mr. Conger. No. The Department of the Navy is using a $12.1 billion
cost estimate as a planning figure to cover MILCON, major categories
including family housing, equipment, furnishings, environmental
mitigation, and non-military infrastructure. With the exception of a
limited number of near-term projects for which we have budget level
detail, the current estimate is conservative and programmatic.
As the Department of the Navy proceeds with preparation of the SEIS
for Guam, we will continue to refine the cost estimate and remain
committed to providing Congress with comprehensive costing and detailed
planning information. The current Distributed Laydown plan envisions
that the Hawaii relocation will commence after the Guam build out, and
therefore the plans for the scope and costs for Hawaii have less
fidelity than that for Guam.
Mr. McGinn. I am confident in the reliability of the current $12.1
billion cost estimate as a planning figure and that the Marine Corps
employed the appropriate approach and methodology for determining the
estimate for the Distributed Laydown. We are using the $12.1 billion
cost estimate as a planning figure to cover MILCON, family housing,
equipment, furnishings, environmental mitigation, and non-military
infrastructure. With the exception of a limited number of near-term
projects for which we have budget level detail, the current estimate is
conservative and programmatic. The estimate also does not include any
potential costs for strategic lift or for the relocation of marines to
Australia. Cost-share negotiations with the Government of Australia are
currently ongoing. The State Department, with DOD in support, is
currently leading negotiations with the Australian Government for an
access agreement. These negotiations--which will address cost sharing
principles--are in the initial stages.
As we proceed with preparation of the SEIS for Guam, we will
continue to refine the cost estimate and remain committed to providing
Congress with comprehensive costing and detailed planning information
as it becomes available. The current Distributed Laydown plan envisions
that the Hawaii relocation will commence after the Guam build out, and
therefore the plans for the scope and costs for Hawaii have less
fidelity than that for Guam.
27. Senator Ayotte. Mr. Conger and Secretary McGinn, are there any
issues this subcommittee needs to be aware of at this time?
Mr. Conger. The realignment of marines to Guam is a priority for
DOD and a central element of the administration's rebalance to the
Asia-Pacific region. The establishment of a LFTRC is essential to
maintaining training and readiness of Marine Corps personnel relocating
to Guam. The Department of the Navy and the Fish and Wildlife Service
recently identified a legal obstacle under the National Wildlife Refuge
System Administration Act as it pertains to the LFTRC's surface danger
zone which would overlay a portion of the Ritidian Unit of the Guam
National Wildlife Refuge. The surface danger zone is necessary to
operate the LFTRC.
Congresswoman Bordallo has proposed legislation that would support
the establishment of a LFTRC at Andersen Air Force Base-Northwest
Field, which is our preferred alternative for the LFTRC in the recently
released Draft SEIS. This legislation resolves the legal issue and is
essential to enabling and ensuring agreement between the Navy and the
Fish and Wildlife Service.
Mr. McGinn. Yes, Congresswoman Bordallo has proposed legislation
that would support the establishment of a LFTRC at Andersen Air Force
Base-Northwest Field, which is our preferred alternative for the LFTRC
in the recently released Draft SEIS. The bill is H.R. 4402, ``The Guam
Military Readiness and Training Act of 2014.'' Establishment of the
LFTRC is essential to maintaining training and readiness of Marine
Corps personnel on Guam as required by section 5063, title 10, U.S.C.
We continue to work with the Fish and Wildlife Service to resolve the
legal issues under the National Wildlife Refuge System Administration
Act which the bill seeks to address.
overseas basing
28. Senator Ayotte. Mr. Conger, what is the current status of the
Secretary of Defense's directed review of our European infrastructure?
Mr. Conger. We plan to have completed our analyses and have
recommendations ready for the Secretary of Defense's review in late
spring. We have provided briefs to your staffs in a classified forum on
our progress to date.
29. Senator Ayotte. Mr. Conger, is that review taking into account
recent developments with respect to Russia and Ukraine?
Mr. Conger. Our review is based on a defined force structure
provided by the Joint Staff and does not involve any changes to that
force structure or associated capabilities. However, operational and
policy military considerations and inputs are informed by current
events. In fact, the results of our efforts will enhance our presence
in Europe by more efficiently supporting our existing force structure.
30. Senator Ayotte. Mr. Conger, what is included in the analyses of
basing requirements?
Mr. Conger. We are comprehensively evaluating our infrastructure
relative to the requirements of a defined force structure while
emphasizing military value, joint utilization, elimination of excess
capacity, and obligations to our allies.
31. Senator Ayotte. Mr. Conger, is DOD assessing all combatant
command areas of responsibility?
Mr. Conger. Over the course of this past year, DOD has conducted
analysis that included the elimination, consolidation, and realignment
of combatant commands. DOD determined that based on the current global
security environment, the current structure of six geographic commands
and three functional commands remains the most effective construct.
However, DOD continues to look for opportunities to cut costs--
including modifications in our organization constructs--that will not
also risk attaining our national security objectives.
facilities sustainment and recapitalization
32. Senator Ayotte. Mr. Conger, you stated in your testimony that
``sustainment represents the Department's single most important
investment in the conditions of its facilities . . . Proper sustainment
retards deterioration, maintains safety, and preserves performance over
the life of a facility, and helps improve the productivity and quality
of life of our personnel.'' But I understand that we funded sustainment
of our facilities at 65 percent of the requirement in fiscal year 2013,
74 percent in fiscal year 2014, and are planning to fund sustainment at
65 percent in fiscal year 2015. How much more risk--more delays and
cuts--can the infrastructure absorb?
Mr. Conger. We don't really know, because many factors can impact
risk and produce negative outcomes. Until the Budget Control Act
impacts are normalized, DOD will continue to take risks in its
infrastructure. DOD will continue to monitor key indicators of failure
and prioritize funding to preclude the most detrimental outcomes.
However, lesser impacts to quality of life and operational efficiency
will accumulate that will degrade morale, increase operational costs,
and eventually impact mission effectiveness. Given that most facilities
have long service lives and degrade at a relatively slow pace, it can
take years for the degradation to manifest into mission impacts. This
is not the optimal means to manage such a large facility inventory, but
until the DOD budget stabilizes, we will continue to see small(er)
facility investments.
33. Senator Ayotte. Mr. Conger, what are the signs of a failing
infrastructure and are we starting to see some of those signs?
Mr. Conger. DOD is seeing signs of failing facilities. In 2007, DOD
adopted the Federal Real Property Council's, ``Guidance for Real
Property Inventory Reporting,'' which uses a Facility Condition Index
to measure an asset's health. The Facility Condition Index is a ratio
of repair needs to plant replacement value; results are presented as a
percentage where higher values mean better conditions. As of September
2013, there were 30,000 assets rated in a failed status, 8 percent of
the inventory. We anticipate this will grow over time at current
sustainment and restoration and modernization funding levels.
34. Senator Ayotte. Mr. Conger, what is the plan to dig us out of
the hole we are putting ourselves into?
Mr. Conger. DOD is putting in place policy and guidance that will
help better track the condition of our immense facility inventory so we
can invest in the facilities that have the most impact on our missions.
In order to reverse the impact of declining facility budgets, DOD's
plan is to eliminate the unneeded infrastructure through a new BRAC
round, which we requested in this year's budget request. Keeping only
those facilities that are needed to support mission requirements will
reduce the requirement to sustain and recapitalize infrastructure. We
need Congress' support in achieving that part of our plan. Second, DOD
contends that Congress could also assist in reversing the decline in
infrastructure investment by permanently fixing the impact of
sequestration. While the Bipartisan Budget Agreement helped in
restoring some of the training and maintenance shortfalls, the out-year
budget levels under sequestration will continue to put considerable
stress on our infrastructure spending. Until a more stable level of
funding is available, DOD will continue to prioritize available funding
that preserves a safe living and working environment for our personnel
and families.