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[H.A.S.C. No. 108–4]



FOR FISCAL YEAR 2004—H.R. 1588







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MARCH 18, 2003





JOEL HEFLEY, Colorado, Chairman
HOWARD P. ''BUCK'' McKEON, California
WALTER B. JONES, North Carolina
JIM RYUN, Kansas
ROBIN HAYES, North Carolina
KEN CALVERT, California
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TOM COLE, Oklahoma
JOHN M. McHUGH, New York

LANE EVANS, Illinois
GENE TAYLOR, Mississippi
VIC SNYDER, Arkansas
ROBERT A. BRADY, Pennsylvania
BARON P. HILL, Indiana
JOHN B. LARSON, Connecticut
SUSAN A. DAVIS, California
RICK LARSEN, Washington

Virginia Johnson, Counsel
Richard Stark, Professional Staff Member
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Diane Bowman, Staff Assistant
Danleigh Halfast, Staff Assistant





    Tuesday, March 18, 2003, Fiscal Year 2004 National Defense Authorization Act—Military Construction Budget Request for Programs of the Office of the Secretary of Defense, the Defense Agencies, and the Active and Reserve Components of the Department of the Army


    Tuesday, March 18, 2003



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    Hefley, Hon. Joel, a Representative from Colorado, Chairman, Readiness Subcommittee
    Ortiz, Hon. Solomon P., a Representative from Texas, Ranking Member, Readiness Subcommittee


    DuBois, Hon. Raymond F., Jr., Deputy Under Secretary of Defense, Installations and Environment
    Fiori, Hon. Mario P., Assistant Secretary of the Army, Installations and Environment
    Lust, Maj. Gen. Larry J., Assistant Chief of Staff for Installation Management, Department of the Army
    Phillips, Maj. Gen. Collis N., Deputy Chief, Army Reserve, Department of the Army
    Vaughn, Brig. Gen. Clyde A., Deputy Director, Army National Guard, Department of the Army


[The Prepared Statements can be viewed in the hard copy.]

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DuBois, Hon. Raymond F.
Fiori, Hon. Mario P.
Lust, Maj. Gen. Larry
Phillips, Maj. Gen. Collis N.
Vaughn, Brig. Gen. Clyde A.


[The Documents can be viewed in the hard copy.]


[The Questions and Answers can be viewed in the hard copy.]

Mrs. Davis
Mr. Forbes
Mr. Hayes
Mr. Ortiz
Mr. Rogers
Mr. Ryun
Mr. Snyder
Mr. Taylor

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House of Representatives,
Readiness Subcommittee,
Committee on Armed Services,
Washington, D.C., Tuesday, March 18, 2003.

    The subcommittee met, pursuant to call, at 4:09 p.m. in room 2118, Rayburn House Office Building, Hon. Joel Hefley (chairman of the subcommittee) presiding.


    Mr. HEFLEY. The subcommittee will come to order.

    Today, the Readiness Subcommittee meets to hear testimony from the Department of the Defense (DOD) and the Department of the Army regarding the fiscal year 2004 budget request for military construction and family housing.

    I want to welcome our witnesses, and look forward to their testimony.

    Two years ago, witnesses from the Department of Defense testified before the subcommittee that the ''fiscal year 2002 budget initiates an aggressive program to renew our facilities.'' It may be that at that time the witness believed that what he said would come to fruition. The sad truth, however, is that it has not unfolded in such a manner at all.
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    This year, the subcommittee has received a military construction and family housing budget request that continues the underfunding of real property maintenance and new construction—this has been the hallmark of the Department's stewardship of these programs for many years. While I have no doubt that each of the witnesses here today would like to be able to testify that all military construction and family housing requirements are met by this budget, the reality is that these requirements will be unmet again this year. Certainly, there are a variety of priorities that must be balanced in the national security arena. However, the trend is disappointing and once again requires congressional attention.

    I would point out that this year's budget request is 14 percent smaller than last year's authorized level of nearly $10.5 billion. Again this year, the Department is requesting merely $9 billion for those important programs. The lack of adequate funding is highlighted by the fact that this year's DOD recapitalization rate is unimproved over last year, and in many of the services the rate deteriorates rather than improves. Clearly, the Department appears to be holding military construction investment in abeyance pending the next round of base realignment and closure (BRAC) in 2005. The funding projection charts across DOD show that only after the next BRAC in the 2006 to 2009 time period do real increases in infrastructure investment begin. I think that the budget projections in these years underestimate the likely costs we will face in new construction, modernization, and environmental remediation with any BRAC-related activities.

    I do want to applaud the improvements in the adequacy of bachelor and family housing through the service's prudent investment and privatization efforts. Having personally visited with servicemen and women around the country, I know that these quality-of-life improvements are benefitting morale.
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    By the Department's own admission, as much as 68 percent of the service's facilities are rated C–3 and some C–4, an appalling state of readiness that detrimentally affects morale, efficiency, and the prudent management of critical infrastructure. The delay in investment in this infrastructure simply makes the problem more expensive in the outyears.

    As my predecessor, Mr. Saxton, remarked last year, ''this subcommittee will not turn our backs on the need to modernize crumbling infrastructure for several years until the results of base closure are known.'' I am totally committed to very closely scrutinizing the military construction and family housing budget request that has been submitted by the Department of Defense. Our brave servicemen and women deserve safe, habitable, efficient, and well-sustained facilities in which to live and work. We owe it to them to be diligent and prudent in this endeavor.

    I do not doubt the good intentions of those who appear before us to testify today. I do, however, want to impress upon you that I expect you to work with us in improving upon the budget request we have received.

    At this time, I would like to recognize my good friend from Texas, the distinguished ranking member of the Readiness Subcommittee, the Honorable Solomon Ortiz, for any statement he would like to make.

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    Mr. ORTIZ. Thank you, Mr. Chairman.

    I join you in welcoming all our distinguished witnesses today to the Readiness Subcommittee hearing on the fiscal year 2004 budget request for military construction and family housing. I know this important hearing is being held at this hour in the afternoon due to the committee's very, very tight scheduling constraints, so I will try to keep my statement as brief as possible.

    I have reviewed the budget request, and I wish I could say that I am satisfied with the budget that our witnesses will discuss today, but I am not. Just as it did a year ago, the Defense Department is short-changing the military construction and family housing accounts. Last year, for the fiscal year we are now in, 2003, the Department requested just under $9 billion. Congress, on a bipartisan basis, considered the request inadequate and provided about $10.5 billion for military construction and family housing. In response to the September 11th attacks, this funding included about $700 million for one-time-only force protection projects. Still, that means that Congress provided about $9.8 billion for regular military construction and family housing projects for the year 2003. This year's request is again only $9 billion. This is a cut of almost 8 percent from the 2003 level even if the one-time-only force protection projects are not included. I strongly believe that we should be increasing, not cutting, funding for military construction and family housing.

    I think all of the members of this subcommittee will agree the need for military construction and family housing is obvious at virtually every base in this country. About two-thirds of our military facilities are either rated C-3, which means they have serious deficiencies, or C–4, which means that they do not support mission requirements. We cannot solve this problem with more sustainment funding—this is just putting our fingers in the backlog dyke. We need to build more facilities to overcome this problem.
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    I particularly think family housing has to be addressed sooner rather than later. If we are asking our men and women in uniform to risk their lives on the global war on terrorism and in any action we are about to take in Iraq, the least we can do is to make sure their families are not living in inadequate and even unsafe housing.

    I know that our witnesses are not to blame for this problem. They care about our infrastructure and the quality of housing for our military personnel and their families. They do the best they can with the dollars that they are given. But I do not think the Department as a whole should keep underfunding those important accounts until after the 2005 BRAC round. It is not good for readiness, and it is not fair to our men and women in uniform and their families.

    The Department's long-term budget plan for future years, the Future Years Defense Plan (FYDP), thus contained funding increases after 2005, what is known inside the Beltway as outyears. But I think I have been in Congress long enough to know that the outyears always seem to be in the future. We need to start increasing this funding now and not wait for outyears that exist only on paper.

    Mr. Chairman, I am also interested in hearing what witnesses have to say about how the housing privatization ventures are progressing in the work the Department and the services are currently doing to get ready for the 2005 BRAC round. In order to expedite this hearing, Mr. Chairman, I will stop; and hopefully we can continue with our witnesses.

    Mr. Secretary, welcome.

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    Mr. HEFLEY. Thank you very much, Mr. Ortiz.

    We are going to have two panels today; and, again, because of time constraints, we have to be out of this room by 6 o'clock. I would ask the witnesses to limit their testimony to five minutes. There will be plenty of opportunity during questioning, I am sure. I would ask the members to limit your questioning, too, so that your questioning and the answer can be brought within the five-minute time limit so everybody gets an opportunity to ask the questions they would like to.

    Our first panel will be Mr. Raymond DuBois, Deputy Under Secretary of Defense for Installations and Environment, to talk about the budget overview and the defense-wide programs. Then, the second panel will be composed of members of the Department of the Army.

    Mr. DuBois.


    Secretary DUBOIS. Thank you, Mr. Chairman.

    On behalf of Secretary Rumsfeld, I am pleased to appear again before this subcommittee to discuss the President's budget for fiscal year 2004, and specifically the military construction budget.

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    I think, however, it is important to note at the onset of a hearing such as this that, by definition, will focus almost entirely on military construction, the authorization, and appropriation thereof, that we understand what Secretary Rumsfeld has adopted in terms of a different way of approaching and investing in what we call our installation and environment portfolio, or, as is often referred to, as the quality-of-life portfolio.

    It is more than military construction and family housing. It is also things such as utilities and energy management. It is safety and occupational health funding. It is environmental funding, cleanup and conservation programs. It also includes contributions from other appropriations accounts, such as the military personnel account, the working capital funds, the operation and maintenance (O&M) account, the research and development (R&D) account, host nations support, and nonappropriated funds.

    Now, with this definition in mind, that is to say, a broader definition than is normally accorded to the military construction or the installations and environment (I&E) portfolio, the fiscal year 2004 budget request in support of the total Department of Defense installations and environment portfolio is in actuality nearly $20 billion. If you add base operations support, which is an enormous number in and of itself, yes, out of the O&M account, you are closer to $40 billion. In short, one should not judge the quality-of-life investments solely on military construction (MILCON) appropriations.

    Now, one of the cornerstones of that portfolio is, as has been mentioned before, our investments in housing, housing for our military families. We all remember that President Bush and Secretary Rumsfeld identified military housing as a top priority in the beginning of this Administration. To that end, we employ a three-pronged approach: one, increased basic allowance for housing; two, increased housing privatization; and, three, sustained military construction for housing.
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    The fiscal year 2004 budget request includes necessary funding to continue lowering out-of-pocket housing costs for our military families living off base from 7.5 percent in 2003 to 3.5 percent in 2004; and, by 2005, the typical member living in the private sector will have zero out-of-pocket expenses.

    We believe our housing privatization efforts have gained traction and are achieving success. Privatization awards in fiscal years 2003 and 2004, the cumulative total will achieve about 102,000 units privatized by the end of 2004.

    Now, military construction is extremely important. It is another tool for resolving inadequate military housing, and in this budget we are requesting $4 billion in new budget authority for family housing construction and operations and maintenance. This funding will enable us to continue O&M and modernizing the Department's family housing and helping to meet our goal of eliminating all inadequate housing by 2007, which, as you know, is a three-year-earlier objective than previously planned.

    Now, we are also focusing on improving the work environment and, thus, the readiness of our military through proper facilities sustainment and recapitalization. Full sustainment improves performance, reduces life-cycle costs, and maximizes the return on our capital investments. We must repair and replace facilities before they have become deteriorated. If we do not do that, repairing and replacing those facilities once they have become deteriorated is much more expensive. We are requesting $6.4 billion for sustainment in the O&M appropriation, not the MILCON appropriation, funding sustainment at 94 percent of the standard commercial benchmarks.
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    But sustainment, as you have pointed out, Mr. Chairman, alone is not enough. Well-sustained facilities eventually wear out and become obsolete. We have a number of facilities in that condition. So we must restore and modernize them. Some of this recapitalization is critical and cannot wait. Our request of $3.4 billion for restoration and modernization maintains our commitment to improving the work environment, while weighing the requirements against other Departmental priorities. The Future Year Defense Plan—the 5-year defense plan funds restoration and modernization to achieve a 67-year recapitalization rate by our goal of 2008.

    We discussed in a previous hearing, the environmental programs that we are working on, and our request of $3.8 billion will continue our efforts in environmental compliance and stewardship.

    As I indicated, the Readiness and Range Preservation Initiative, which we have discussed before this subcommittee at some length, is crucial we believe to sustaining our training ranges and our testing ranges. We again ask for your consideration for the other provisions in the Readiness and Range Preservation Initiative which were not adopted last year, and we believe that the modest legislative reforms are needed.

    Mr. Chairman, your opening statement and certainly that of Congressman Ortiz represent a very clear articulation of the complexities and challenges we face. There are competing priorities. But as managers of the DOD I&E portfolio, myself, Dr. Fiori, H.T. Johnson, and Nelson Gibbs, it is a—shall we say, a battle that we fight every day. We are champions of that I&E portfolio, but there are competing priorities. We do look forward to working with you, and we do need your help to address this challenge.
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    Thank you, sir.

    Mr. HEFLEY. Thank you very much.

    [The prepared statement of Secretary DuBois can be viewed in the hard copy.]

    Mr. HEFLEY. Solomon, with your permission, I would like to call on a couple of people who sat through most of the previous hearing and didn't ask a question to see if they would like to ask.

    Mr. Forbes.

    Mr. FORBES. Thank you, Mr. Chairman.

    Mr. DuBois, thank you for your testimony. I noticed on your written statement you had mentioned that obsolete facilities pose risk to mission effectiveness, safety, quality of life, productivity, workforce, and cost efficiencies. Can you tell me—I take it from that that you have made a determination that we have obsolete facilities that exist out there. Is that correct?

    Secretary DUBOIS. Obsolescence comes in varying forms. But you are correct, Congressman, there are obsolete facilities out there, especially when you are introducing new weapons systems to our inventory.
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    One can say that a hangar built for a particular aircraft that entered our inventory 30 or 40 years ago is not the hangar that we need today. Is that hangar still useful? Yes. Is it obsolete? It is only insofar as one says it has to be used for the F–22, a new aircraft yet to enter the inventory.

    Mr. FORBES. Have you created a definition of obsolescence that you use as a benchmark to try to determine what obsolete facilities are?

    Secretary DUBOIS. As I indicated, the hangar is a good example. Pier space—if pier space for a new ship is not long enough, not high enough, it could be deemed to be obsolete. These are the—I am trying to think of some other examples. But those are the two that come to mind.

    Yes, there are obsolete facilities. Class A office space that might have been used in the 1950s or the 1960s and properly sustained is still Class A office space today. But, as we are seeing in the Pentagon, a building that is over 50 years old, it is in essence obsolete, but it is still useful. Therefore, with your appropriation—your authorization and appropriation, we are rebuilding from scratch the Pentagon in five wedge sections. Yes, it is a multi-billion dollar operation but one that had to be done. Not just in terms of safety. There were no water—fire devices in the ceilings, for instance. The new communications that we use in the Defense Department, all of that needs to be laid into the new parts of the Pentagon.

    Was it obsolete? Yes. Was it useful? Yes. Are we going to have a modern building with another 50-year life when we are finished? Yes.
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    Mr. FORBES. Again, not to push the point, but just for clarity on my part, do you have a definition of what an obsolete facility is that you either can give me now or tender to me at a later time just so I have it clear in my mind?

    Secretary DUBOIS. If there is a definition in the DOD directive, I will certainly send it to you.

    [The information referred to can be viewed in the hard copy.]

    Mr. FORBES. Okay.

    The second thing is, sometimes obsolescence may be like obscenity, we know it when we see it. Can you give me the names of any facilities that you deemed to be obsolete so that I just have a touchstone that I can measure that by as well, if you have a listing of that?

    Secretary DUBOIS. As I indicated, perhaps the best known symbol of the world for the Department of Defense is the Pentagon. The Pentagon is obsolete. It continues to be useful, however. The Secretary of Defense still operates there. But one-fifth of that is building is now no longer obsolete.

    There was a time when the Congress and the Executive Branch discussed getting out of the Pentagon altogether and building an entirely new command center for the Secretary of Defense and the Joint Chiefs. It was deemed, however, better use of the property to upgrade it, rebuild it. So, today one could say four-fifths of the Pentagon is essentially obsolete. One-fifth is, however, not, because it has been totally rebuilt.
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    Mr. FORBES. Thank you, Mr. Chairman.

    Mr. HEFLEY. Mr. Marshall.

    Mr. MARSHALL. I will wait until later in the questioning. Thank you, Mr. Chairman.

    Mr. HEFLEY. Okay.

    Mr. Ortiz.

    Mr. ORTIZ. You know, while a base closure round is authorized for 2005, actual base closing will not occur for, I guess, several years after that. Military construction funding is projected to increase to $15.5 billion in fiscal year 2006. However, $3 million of that increase is intended for BRAC implementation, and only $2 billion is considered new funding.

    Why are the actual projected increases in military constructions so low, and how large do you expect the BRAC round to be? When can DOD expect to see savings rather than the cost associated with the pending BRAC round? And how would you explain the large reduction in the fiscal year 2002 BRAC-related environmental remediation program? Does this demonstrate a lack of commitment to protecting the environment on the part of the Department?

    These are questions that my constituents also ask, you know. Of course, we are able to look at the budgets years before they do, but maybe you can enlighten me on some of these questions that I just asked, Mr. Secretary.
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    Secretary DUBOIS. Mr. Ortiz, the relationship between military construction requests and BRAC certainly stand out there in stark relief to other aspects of the defense budget.

    I think I want to begin by answering your very important question by answering one that perhaps is a subtext to your question; and that is, I have often been asked whether or not we have deferred projects by virtue of BRAC or by virtue of the impending BRAC. The answer is no. No projects were deferred because of the impending BRAC. There is no list of deferred projects, and we have not instituted a so-called military construction pause.

    Now, the projected increases in military construction, the budget request and I think the associated FYDP is, in our view, consistent with our plan to achieve that 67-year recapitalization rate that I spoke to by fiscal 2008.

    Now, you asked another important question: How large do you expect the BRAC to be? I testified two years ago during the cycle whereby we—the President asked and the Congress approved a BRAC authorization, another BRAC authorization, that there had been a report in 1998 which indicated that there was excess capacity in the Department of Defense—excess capacity, not excess installations—of some 20 to 25 percent. Will the BRAC 2005 reduce the excess capacity by 20 to 25 percent? We don't know that until we get to the other end of this process which is two years out.

    I think that it is true that both the Secretary of Defense and I have indicated that we believe through joint utilization of basing, by virtue of the fact that there is excess capacity, that we can achieve something in the range of reduction of that amount.
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    Now, there is another issue that exists today that did not exist two years ago when I testified on this issue. That is, the Secretary has made it very clear that when we look at the worldwide responsibilities that we have and our warfighting plans, we have a 21st century warfighting set of obligations and responsibilities, and we have arguably a Cold War legacy infrastructure, especially overseas. It is absolutely true, as many of you have reminded me, that until such time as the Secretary of Defense and the Joint Chiefs and the combatant commanders assess their needs overseas, we cannot truly make intelligent decisions about domestic BRAC, that is to say, realignment of the installations in the U.S. and its territories.

    To that end, the Secretary of Defense, in discussions with the combatant commanders and the Joint Chiefs and the service secretaries, has agreed that 2003 and 2004 MILCON projects, those that were authorized and appropriated in 2003 and those which we have submitted with the President's budget in 2004, arguably on the basis of plans that were developed two and a half and three years ago, might need to be changed. In that regard, we will ask for a budget amendment prior to your markup, which I believe is in the month of May. This is a very important issue, and I know how the timing is very critical. That is an immediate problem or an immediate challenge.

    The longer term challenge, which many of you have, as I said, reminded me of is, what should our overseas basing structure look like in the 10-plus-year-out category? Because only then can we determine what should be the domestic infrastructure. It may turn out that what had been anticipated two years ago or three years ago is not what will be the end result in the spring of 2005 when the Secretary of Defense reports to the BRAC Commission.

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    Mr. ORTIZ. I have been able to see the deficiencies in housing and the workplace, the depots and—but if we continue to contract out all these jobs, of course we are going to have excess capacity. I hope that is not the case, that we contract out as many jobs as possible. Then, of course, when I see that one contractor is assigned to every 10 military personnel, this worries me.

    I hope that some day we will be able to see how much we have saved.

    I know there are a lot of other members that need to ask questions, and I thank you for now, and I hope that maybe I can include some questions for the record, Mr. Chairman.

    Mr. HEFLEY. Surely.

    Mr. ORTIZ. Thank you, Mr. Secretary.

    Secretary DUBOIS. Thank you.

    Mr. HEFLEY. Mr. Hayes.

    Mr. HAYES. Thank you for being here, Mr. DuBois.

    You are doing a great job at Fort Bragg and other posts with the Residential Community Initiative (RCI) and privatized housing. As a result of that, good things are happening, better housing.
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    An unanticipated problem is, in the case of Fort Bragg, our DOD school. We cannot, we must not use MILCON money to solve that problem. Eight hundred and forty-two new students will be introduced on the base because of the initiative. How are we going to provide the schooling, which is vitally important, without taking the money from the MILCON budget?

    Secretary DUBOIS. Mr. Hayes, I don't want to avoid your question, but I will answer it this way,in two parts:

    One, Dr. Fiori follows me; and, as Assistant Secretary of the Army, he is much better versed in the particulars of schooling at Fort Bragg than I am. But I will say this, the authorization for RCI or the authorization for military family housing privatization does not prevent using the privatization process to provide, where necessary, construction of schools. This is an important aspect. If the Army decides that that is the best way to provide for more classrooms for the—by virtue of the introduction of more children on that post, they will come to that conclusion.

    I do not, as Deputy Under Secretary for Installations and Environment, play in, as it were, that particular sandbox. That belongs to Dr. Chu, the Under Secretary of Defense for Personnel and Readiness. But I am aware of the concerns. The Army has voiced them to me. I have tried to become a broker between the Army and Dr. Chu in this regard.

    But I will say this, I visited over 90 military installations since I was sworn in on this job now almost 2 years, I guess. There are three things of interest to every military family. In fact, they are the same three things that are of interest to every American family: health care, housing, and schools. I try to find out every time I visit an installation what the state of play is in those three arenas.
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    Mr. HAYES. Thank you, sir.

    Dr. Fiori has been very helpful, and he is looking, he is looking hard; and I am confident he is going to come up with it.

    The other question is, it has been a very aggressive A–76 privatization study procedure, an awful lot of things going on around the country as it relates to additional requirements on our bases. Fort Bragg is processing Guard and Reserve folks, deployments, all these kinds of things.

    Update the panel or update the committee here on your thoughts of how effectively are we pursuing the A–76 procedure and do we need to reorient our thinking while we have the pressures coming from the Middle East right now and take some of that stress off of our folks at Fort Bragg and similar installations?

    Secretary DUBOIS. This does have a relationship to Congressman Ortiz's question, and it is a complex question.

    Let us face facts, I believe this subcommittee is going to address the A–76 circular revisions that have come out of the commercial activities panel. Pete Aldrich, the Under Secretary for Acquisition, I think is testifying to that end. But there are two things that I think are important to recognize.

    After 9/11, the Secretary of Defense stated in a memorandum—and I am not sure whether he signed it or Pete Aldrich; nonetheless, it is on behalf of the Secretary of Defense—that there was an A–76 project under way or about to be under way that, in the opinion of the installation commander, would negatively impact his ability to perform his mission as the operations tempo (OPTEMPO) increased. He would be given an opportunity to stand down in that regard. So there is a way, if there is a military mission degradation impact, to address that.
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    Number two, as I indicated, the commercial activities panel has concluded and reported what revisions, by virtue of the fact there were people in the private sector who didn't like the A–76 process, there were people in the public sector who didn't like it. Now I think that we have come to some changes that will address some of the most critical concerns. That report is, I believe, out; and I believe that there will be a hearing specifically on it with David Walker, the Comptroller General; Angela Styles from the Office of Management and Budget; and Pete Aldrich from the Department of Defense.

    Mr. HAYES. Thank you, sir. Keep an eye on your accounts and make sure that we have real savings in wave one and two before we wave over to three, and keep the pressures off the guys. Let them do what they need to do. Thanks.

    Mr. HEFLEY. Mr. Taylor.

    Mr. TAYLOR. Secretary DuBois, thank you for being here with us today.

    I am curious, using the example of the F–18, E and F, and the need for our new East Coast base, have you budgeted how much it is going to cost to replace Cecil Field? This ties in with your comments about maybe we ought to take a look and see whether or not these troops are coming back from Korea before we make some decisions. Because that clearly was a case where someone was not looking ahead. Keeping in mind that the Joint Strike Fighter follows after that, what are we going to spend to replace the bases that have already been closed?

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    Secretary DUBOIS. Mr. Taylor, of course the closure of Cecil Field happened—I don't know whether it was the 1993 or 1995 round. I can't address whether that is a decision that the Navy would like to walk back or not.

    We do have new basing requirements for the F–18, FA–18 Es and Fs. We will have new basing requirements or basing requirements for the F–22 and the Joint Strike Fighter.

    You are absolutely right if the implication of your question is, as we go through a BRAC process, keeping in mind which current bases can handle them, which current bases need to be expanded, which bases will the F–16 and F–15 depart the inventory to be replaced by these new aircraft? These are Navy and Air Force particular military operational questions that will be addressed within those services in the BRAC process.

    But if the implication of your question is, must we consider where new aircraft, new types of aircraft will go, you are absolutely correct. I cannot, however, address the issue of Cecil Field and why it was recommended or not.

    Mr. TAYLOR. For the record, I would very much like the Navy's estimate of what it is going to cost to build the new east coast base; and I am talking about everything from the family housing, barracks, runways, everything associated with a base that—in fact, building a base from scratch to make up for the one that was given away.

    Secretary DUBOIS. I will discuss this tomorrow with H.T. Johnson.
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    [The information referred to can be viewed in the hard copy.]

    Mr. TAYLOR. Secretary DuBois, the second thing that—and I am sorry my colleague, Mr. Abercrombie, isn't here—several representatives of the Administration talked about excess capacity and yet I have yet to see a representative of the Administration identify one base by name that they consider excess, would you be willing to do that today, sir?

    Secretary DUBOIS. No, Mr. Taylor. I think it is important to recognize and in the discussions that have occurred over the last two years that the only way that we can honor Congress' method—Congress' methodology for base realignment and closure is to be as comprehensive as possible to address all installations equally.

    There is no question that some installations—and each one of you can name them—are installations that probably will not be BRAC'd. My father went to one of them. But the fact of the matter remains we do not know what the true rationalization can be if, for instance, there was some kind of a list that was set on the table and not to be addressed from the beginning, especially from the point of view, were there to be such a list, would those installations, for instance, not be receiving installations?

    I think it is important, as I have been asked when I travel around the country by mayors and governors and city councilmen and so forth. The issue is, can your installation be a receiving installation? What are its capacities to grow?

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    I don't know the answer to that question at this time. My successor or the Secretary of Defense in the spring of 2005 will make those recommendations to a BRAC Commission. But I think it is important that we look at all bases equally, that all bases are required to submit their data, if you will, a data call so that no base is put in jeopardy unnecessarily. All bases are on the table.

    Mr. TAYLOR. Your remarks about the potential return of troops from Korea led me to believe that you might be willing to accept a postponement. But my other thought——

    Secretary DUBOIS. Postponement of what? I am sorry?

    Mr. TAYLOR. Postponement of a BRAC process, or should we go forward with it? And if we are going to go forward with it, what would be your reaction to possibly setting a deadline for the BRAC list to be published on October 1st of 2004?

    Secretary DUBOIS. The Secretary of Defense and others have made comments about the possibility of realignment of forces on the Korean peninsula. I think he has also indicated publicly that any realignment of those forces is going to be a process not done quickly, on the one hand.

    On the other hand, the Secretary recognizes that if he does not address force structure overseas and infrastructure overseas at some point in the next year and therefore intelligently inform the domestic BRAC process in the 2004 calendar year, which is the 12-month period I suspect most of the heavy lifting will be done, i.e., can he, the Secretary of Defense and the Joint Chiefs, have some definition around what our overseas presence and our overseas basing strategy ought to be in the 10-plus year out category sometime in this fall?
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    I think he can. He has indicated to me that I am to work with the combatant commanders and the Joint Chiefs in the military departments to come to some definition with respect to overseas basing.

    Will that call for the return to the United States of force structure, be it ground, air, or sea? I don't know the answer to that question.

    I did hear earlier today when I testified in the Senate a remark made that the Secretary had made a decision to withdraw from Korea. That is absolutely incorrect. He has not. He did not make that comment. The only comment he made was, does it make sense now to pull back some of our U.S. Army forces, our ground forces, U.S. military ground forces, from close to the demilitarized zone? He didn't talk about them being pulled out of the peninsula.

    Mr. TAYLOR. Mr. Chairman, just a quick follow-up.

    Mr. HEFLEY. Very quick.

    Mr. TAYLOR. I was curious. You did not express your thoughts on whether or not maybe the timetable should be moved up to publishing the BRAC list on October the 1st of 2004.

    Secretary DUBOIS. I don't think that either we will be ready to do so or, quite frankly, Congressman, would it be advisable to do so.

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    Mr. TAYLOR. Would that have something to do with a presidential election in November, 2004?

    Secretary DUBOIS. I leave that up to you, sir.

    Mr. HEFLEY. Ms. Wilson.

    Mrs. WILSON. Thank you, Mr. Chairman.

    Mr. DuBois, you mentioned that this is Congress' BRAC process. I just feel compelled to remind you that the House did not support another round of base realignment closure in the last move through the authorization bill, and there was a reason for that. One of those reasons was the very weak analysis supplied by the Department of Defense that money has been saved during the last five rounds of base realignment and closure.

    I am one that believes that strategy should drive force structure, and force structure should determine basing. And I did not believe and still have not seen good, solid analysis in numbers about the savings, setting aside the problems of rebuilding facilities that maybe people want to reconsider or walk back closure on.

    I also think it is important to remember some of the history here and that this process comes from an effort to take base structure out of the realm of political favoritisms and to try to make sure that it is driven by the needs of the military. So this idea that somehow this is an ugly creation of the Congress doesn't wash.

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    I also would like to ask you a couple of questions. A couple of years ago you came to my office and said that you could not provide estimates of the savings of base realignment closure compared to what was projected to have been saved at the time the proposals were made in the rounds that we have gone through. And I asked several times, not directly to you but to DOD folks, whether you had come up with the estimates, estimates that didn't exclude environmental management costs or caretaker costs; whether you had been able to locate the original cost estimates that were given for closure which DOD couldn't find initially. Do you have any numbers or a spreadsheet for us yet?

    Secretary DUBOIS. I will answer that question, Congresswoman, in two parts.

    Number one, the General Accounting Office (GAO) in a report was quite clear that the estimated savings derived from prior BRACs was legitimate and real, and they even went so far as to say the amounts. We have estimated that annual savings occurring every year now from the four prior BRAC rounds is approximately $7 billion a year. As I said, GAO confirmed that. I thought that I had sent that report to you; and, if I haven't, I certainly will.

    The ''weak analysis,'' to use your term, in our view is not weak. It has been corroborated by outside organizations, that is to say GAO, and I believe the Institute for Defense Analysis also. The issue which is probably the one that is used most often to criticize the Department's analysis and estimates, is the issue of cost for environmental remediation. We have spent to date some $7.5 billion on environmental programs pertaining to BRAC, the majority of which has been spent on cleanup. It is estimated at this time that the cost to complete is somewhere in the vicinity of $4 billion to $4.5 billion.
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    Why does that number not in a nice, neat, linear fashion reduce year by year? In no small measure, Congresswoman, because of the many acres yet to be disposed of. Local competing environmental and economic interests change land use policies that, therefore, change the cost to clean up. There is no doubt, even with the cost to complete that we estimate now of $4.5 billion at an annualized $7 billion a year savings, we are ahead of the game.

    Mrs. WILSON. Mr. DuBois, I am looking at some quotations from—I assume you mean the GAO report of 1998, which, of course, is quite dated now. But I don't see it as unconditionally confirming DOD's analysis. Maybe there are some things I don't understand here.

    And I quote, ''DOD's data systems do not capture all savings associated with BRAC actions, nor has DOD established a separate accounting system to track BRAC savings.''

    It went on to find other significant findings.

    I have one final question that I wanted to ask you. The selection criteria for the 2005 closure or realignment due to be published on December 31st, 2003, there are reports within the legislation that authorize in the next round some guidelines or some general guidance provided by statute; and I think there is some concern that the statute aligns with what DOD is beginning to think of. Is it the Department of Defense's intention to consult with Congress when crafting guidelines to ensure that they align with the statutes before they are published on the 31st of December?

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    Secretary DUBOIS. My understanding, Congresswoman, is that the legislation requires the Secretary of Defense to publish criteria by December of 2003 for public comment and for deliberation and dialogue with the Congress; and, based on that, the criteria may be changed and resubmitted. As you pointed out, the criteria in the legislation has been well defined.

    I have been asked if the criteria will be weighted. Now, the legislation makes it very clear that military value shall be the primary selection criterion; and I haven't heard anything from anyone that would lead me to believe that that ought not be the primary criterion.

    If you are——

    Mrs. WILSON. Mr. DuBois, I need to interrupt, because I see my time is out. But do you intend to informally consult before the 31st? Or will the 31st of December be the first time that members of this committee see your draft?

    Secretary DUBOIS. Speaking for myself—and, obviously, I have got to go to my boss to cover this with him. But I would see it very valuable were I to come and consult with you prior to the publication of that criteria.

    Mrs. WILSON. Thank you, Mr. Chairman.

    Mr. HEFLEY. Mr. Reyes.

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    Mr. REYES. Thank you, Mr. Chairman.

    Welcome, Mr. Secretary. My question deals with an article that appeared in the Washington Post yesterday, it said that Secretary Rumsfeld's order is to freeze new military construction on overseas bases until a top-to-bottom review has been completed. The first question I have about this is, when will this review be completed?

    Secretary DUBOIS. Yes. That article, as is often the case, isn't entirely correct. As I indicated, the Secretary has instructed the two major geographic commanders, combatant commanders, General Jones in Europe and Admiral Fargo in the Pacific Command, and sequentially, if you will, General LaPorte in Korea, to report back to him within 30 days on 2003/2004 MILCON projects that may need to be reprioritized.

    General LaPorte has already contacted me and communicated with me on both 2003 and 2004 in Korea.

    Without getting into details, because the Army is in the process of vetting those reprioritizations, if you will—and that is an important step. But what he, General LaPorte, has suggested is that, instead of building a barracks or a fitness center for the Second Infantry Division at this particular camp, he suggested it be moved to another camp in Korea that he believes will be an enduring base, as opposed to the first one.

    The so-called freeze—and there is not a freeze per se—in Europe, the Secretary of Defense asked General Jones, give me your best estimates on any reprioritizations that are necessary given the changing environment that we live in, given the fact that many of these military construction projects were planned for three years ago and may not be what we ought to do in the next year.
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    So there has not been a freeze per se. The Secretary has asked for this information. We will make judgments in time for your markup; and that is, as I understood, is sometime in May.

    Mr. REYES. Assuming that there are some of these projects that have been authorized and have been funded and the decision has been made not to follow through on them, what happens to that money?

    Secretary DUBOIS. Well, as I indicated, my first read of General LaPorte's report was, instead of not doing certain projects, he wants to move the projects from Camp X to Camp Y. So there may not be, quote, monies left over, end quote. I will or the Secretary of Defense will formally communicate to Congress a reprogramming or a transfer action in military construction terms for those authorized and appropriated MILCON projects in 2003 which will be moved from one place to another, if there are projects that will not be done at all.

    Mr. REYES. Okay. But, Mr. Secretary, if this review is ongoing, and it is already pretty late in the budget cycle year, a lot of these projects that are in this review will, from my perspective, won't be started until very late in the fiscal year. If that is the case, why can't we use that money instead, while you are going through this review, to fund critically needed projects domestically in the United States?

    Congressman Ortiz, Congressman Weldon and I, and I think it was Congressman Schrock, took a tour of about 23, 25 bases in 4 days where we saw horrendous conditions. If there is money out there that you are still reviewing, let us bring it back and fund things like basic training barracks where we saw water leaking through from the showers down into the next level. Those are I think higher priorities if we are going to be undergoing this top-to-bottom review overseas.
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    Secretary DUBOIS. Well, that is why, Mr. Reyes, I wanted to be very clear. There is no freeze.

    For instance, in Europe, projects are moving forward in areas that were not to be—that General Jones already told the Secretary—for instance, Ramstein Air Force Base, no projects have been impacted in Ramstein because the decision was made several weeks ago that projects scheduled and slated for Ramstein would continue forward.

    So there is but a few, a very few that will be impacted in the 2003/2004 budgets. But as I indicated to you, sir, it may very well be that several millions of dollars—question mark—will come back to this committee for your advice and counsel on how it ought to be spent.

    Secretary DUBOIS. Now, when will that happen? As I said, I will try to get to you, I commit to you that those, that information will come to this committee prior to your markup.

    Mr. REYES. Thank you, Mr. Chairman.

    Mr. ORTIZ [presiding]. Mr. Rogers.

    The gentlelady, Mrs. Davis from California, do you have any questions?

    Mrs. DAVIS OF CALIFORNIA. Thank you, Mr. Chairman. Thank you very much for being here, Mr. Secretary. You mentioned at the beginning of your comments that we are working hard to basically wipe out out-of-pocket expenses. Are you also including those out-of-pocket expenses in high cost areas?
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    Secretary DUBOIS. Yes, ma'am. Basic allowance for housing (BAH) is adjusted region by region, locale by locale. The overall out-of-pocket expenses should be driven to zero by 2005, 7.5 percent, 2003, 3.5 percent 2004, zero 2005. We also, on a periodic basis, reevaluate real estate and lease costs area by area. Your area, not only is it expensive, it is arguably one of the largest in military family populations in the country, and therefore of great interest and focus to all of—especially the Navy and the Marine Corps. But they do not hesitate to suggest to me or Dr. Chu, the Under Secretary of Personnel, that adjustments need to be made.

    Mrs. DAVIS OF CALIFORNIA. They absolutely do need to be made. I think one area that we have discussed briefly is public-private ventures, and that is a way to begin to address that problem. And we have started down that road. I wanted to just mention to you that there are some unintended consequences as a result of that. We faced it with schools because of public-private ventures. The funds were basically put on their wages and then it looked as if the children were no longer eligible for free and reduced lunches. It also impacts Social Security benefits for some people who particularly have children with special needs. I just wanted to mention that. We have worked on the reduced lunch issue, but the other one is still out there and really does impact a lot of our families, so I would like to have your help and support.

    Secretary DUBOIS. I have been made aware of this. As I indicated, it is not in my lane, per se, but the peculiarities that attach to RCI or housing privatization projects as they impact the individual military wage earner, both in a tax code way as well as an allotment and allocation way, are byzantine sometimes and I am flummoxed as to how we allow these things to happen. But again, Dr. Chu is very well aware of this and I am sure you have communicated with him and I continue to ask him as the housing guy how he is fixing it.
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    Mrs. DAVIS OF CALIFORNIA. All right. Thank you, and we actually were able to work part of it but not all of it. It is still out there. In looking at the public-private ventures as well, I think there is certainly land available for these public-private ventures. Do you see any real downside to them? Are you confident that this is the best way to proceed right now? And why is it then that we are not doing more of them?

    Secretary DUBOIS. When the Congress gave us authority to do housing privatization, it was new and different. No one had ever done it before. As in cases such as this, you start slowly. You have to learn the ins and the outs. I remember Congressman Dave Hobson when he was chairman of the MILCON Appropriations Subcommittee, a week didn't go by when I didn't get a phone call about a particular project because three years ago we were again learning our way. There is no question, if you look at the curve of how many houses we are going to privatize, family housing units we will privatize—when Secretary Rumsfeld became Secretary in January of 2001, there were less than 6,000. At the end of 2004 there will be 102,000. That curve, the calculus has gone fairly steep. I do remember watching on the TV, the testimony of the Joint Chiefs on housing related issues, and I apologize, I don't remember whether it was this House or the other body. But the Chief of Naval Operations, Vern Clark, made a very interesting and telling observation. He said, and it is true that the Navy has the least percentage of family housing. It is important for Navy families to own their house. He wants to encourage home ownership, a part of the American dream. That sentence, that comment, what it really means to me is we should not repair or rebuild or provide military housing on military installations where the local community and local economy can support either through rent or through purchase housing for military families. As an economist I can tell you I think I would rather see the private sector provide housing, the local economy provide housing and, where it makes sense, have privatization on post.
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    Mrs. DAVIS OF CALIFORNIA. I appreciate that. Obviously, in San Diego the housing issue is a real concern, and I would also love for our military families to take part in the American dream. But on the other hand, I know how difficult that is for them. And in many cases what happens of course is that their transportation costs and their quality of life go down measurably because they are in their cars for several hours a day.

    Secretary DUBOIS. I suspect that is an aspect of southern California that is visited upon other places in the country, too.

    Mrs. DAVIS OF CALIFORNIA. Yes. Thank you. Thank you very much.

    Mr. HEFLEY [presiding]. Mr. Franks.

    Mr. FRANKS. Thank you, Mr. Chairman. Mr. DuBois, you mentioned earlier, if I understood correctly, that somewhere in this process there was some legislation related to the ranges connected to certain bases. Can you elaborate on that just a little and help me understand what that is and where it is in the process?

    Secretary DUBOIS. The Readiness and Range Preservation Initiative which the Administration introduced for Congress' deliberation last year is being reintroduced this year in the Defense Authorization Act. Last year Congress adopted one of the five—excuse me, one of the six so-called controversial provisions, the Migratory Bird Treaty Act Amendment and we are very grateful that you did. The other five provisions pertain to the Endangered Species Act, the Marine Mammal Protection Act and the three so-called media statutes, Resource Conservation and Recovery Act, Comprehensive Environmental Response, Compensation, and Liability Act and Clean Air Act, are also part of the legislative proposals now on the Hill. We stand ready to testify before this committee as well as the other committee of jurisdiction in this regard. In the case of the House of Representatives it is the House Resources Committee and the House Energy and Commerce Committee, and we have been in contact with Chairman Pombo and Chairman Tauzin to set up those hearings. We hope, and we believe that what we asked for last year and the minor adjustments to what we asked for last year are every bit as important this year as they were last, and we hope that the Congress will address and embrace them. And as I indicated this morning, I indicated on the Senate side and today of course in front of this subcommittee, as I have already testified before this subcommittee, these are issues that directly impact readiness in our military and there is no greater obligation in terms of the Secretary's portfolio than to provide realistic live fire combat training to our military folks who have volunteered to serve in uniform and protect us.
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    Mr. FRANKS. Thank you, Mr. DuBois. Can you tell me, is that legislation slated to come before this committee at all?

    Secretary DUBOIS. Yes, sir. It is in the Defense Authorization Act proposal, which is already before the Armed Services Committees of the House and the Senate. And as I indicated, I have testified a few times on this and look forward to testifying a few more times, as well as, I might add, the folks who were on the panel before me. Four vice chiefs are going to testify or have testified before the Senate on this very issue. I must say they are a compelling group when they talk about it because they are all combat veterans. I served in United States Army in Vietnam in 1968 and 1969, and there is no question in my mind that it would be a travesty if the first time our soldiers, sailors, airmen and Marines were to meet the enemy and hear the whiz of a bullet over their head it were to come in combat and not in training.

    Mr. FRANKS. Well, thank you, Mr. DuBois. In my case we have the Goldwater Range. It is a very critical element of the viability of Luke Air Force Base, and so that is the rationale for my questions.

    Secretary DUBOIS. A crown jewel, I might add.

    Mr. FRANKS. Thank you, sir. I hope you will tell everybody you know. I want to ask you one last question. I am going to try and put them all together. Just for those of us to gain some overall perspective, can you tell me the total number of bases that could potentially come into the BRAC process, just their jurisdiction and, second, how many bases did we close last time? And is there any notion in the world of how many we might close this next round?
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    Secretary DUBOIS. I think that in the last four rounds of BRAC, some 97, I believe the number is 97, major installations were closed or realigned downward, on top of which there were 200-plus small, minor installations that were realigned or closed. There is, as I indicated, no set number. I could not even possibly hazard a guess, nor would I at this moment. It is entirely premature to do so. I think that it is safe to say that if it turns out, and this is the other part of the legislation that requires the Secretary in February of 2004 to report to you all and certify the fact that a BRAC is needed, certify the fact that there is still excess capacity in the system, certify the fact that there will be impacts, positive and negative, but at that point, even then, February of 2004, it would be premature for the Secretary to indicate that by definition, therefore, 14 will close, 28 will be realigned.

    Mr. FRANKS. Thank you, sir. The last question, just for perspective, what is the total number of the military bases that we have that could even be considered by BRAC? Just the total number of bases.

    Secretary DUBOIS. If memory serves me, there are 398 major installations in the U.S. and its territories. And there are probably, if you are going to count National Guard Armories, hundreds and hundreds and hundreds more than that. But my recollection is there are 398 major installations or test and training ranges. I count, for instance, the Barry Goldwater range in that 398, for instance. Twenty-Nine Palms in California is counted, even though it is not an installation. It is a major piece of real property assets, a major real property asset, in the case of Twenty-Nine Palms, the Marine Corps, the Department of the Navy. Overseas I believe we probably have another 60 or so major installations.

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    I often asked when I came on board two years ago, define for me what major means. Well, it was, does it have plant replacement value in excess of a billion dollars? Is that a right—I know some installations that are considered major and important that don't have plant replacement value of that, but I consider them major and important.

    Mr. FRANKS. Thank you, Mr. DuBois.

    Mr. HEFLEY. Last questioner. Mr. Snyder.

    Dr. SNYDER. Thank you, Mr. Chairman. In my short time here today, Mr. Secretary, I have heard several pronunciations of your name once again. What is your preferred pronunciation?

    Secretary DUBOIS. Notwithstanding the French that has been taking hits of late, my French heritage and my grandfather was Lionel Pierre DuBois, and I pronounce it as he did. DuBois.

    Mr. HEFLEY. Would you mind changing your name?

    Secretary DUBOIS. I think I could be just as effective, Mr. Chairman.

    Dr. SNYDER. Just a couple of questions. In the last several months, I guess even longer than that, as we have had call-ups and forces have been moving around because of the buildup in the area around Iraq, have you received any anecdotal reports from troops that have been moved into temporary facilities that they have been inadequate?
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    Secretary DUBOIS. In Southwest Asia?

    Dr. SNYDER. No, here in the continental United States (CONUS).

    Secretary DUBOIS. In CONUS that they have moved into——

    Dr. SNYDER. Barracks temporarily and they have——

    Secretary DUBOIS. That are inadequate in the United States?

    Dr. SNYDER. Yeah.

    Secretary DUBOIS. Oh, there is no question that there are inadequate barracks, inadequate housing in the United States. There were, I think, in 2001.

    Dr. SNYDER. No, I understand. But what I mean is, you know, I got a letter from somebody about a base not even in my district that they just wanted me to know that people were called up and sent temporarily to a district and they were just appalled by where they were having to stay for a week or two. I was just wondering if you all were hearing those reports.

    Secretary DUBOIS. No. As you know, I wear several hats and one of them is the Director of Administration and Management for the Secretary of Defense and, as such, I am the Mayor of the Pentagon. We have a battalion of Military Police from around the country that come and secure our 208-acre reservation. They have been put up in a barracks at Fort Myer that was clearly inadequate and we have tried, using O&M dollars, to improve them, improve those barracks, because the roof leaked and the washing machines didn't work and the water fountains were broken. But this was a barracks that had been slated not to be used and to be demolished. But we had no choice. It was either tents or trying to fix up this place, and we fixed it up.
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    Dr. SNYDER. Yeah. That is the kind of thing I had heard, too.

    Secretary DUBOIS. We have heard some of these situations and my three colleagues in the services, the assistant service secretaries, one of whom is with us today, Dr. Fiori, jumps on situations like that.

    Dr. SNYDER. In your written statement you discuss BRAC. There has been some discussion today. You use the figure, I believe, in your written statement that we have heard for several years, that there is 20 to 25 percent excess capacity. I have never been sure exactly how that has been calculated. Now that you have been on the job for, you know, two and a half years or so, are you still comfortable with that or is that just a general ballpark figure that we have that has become kind of mythical or is that a reasonable estimate?

    Secretary DUBOIS. The Secretary and I have had this discussion because I said to him one day, boss, I think it is a very clumsy number. And he agreed with me. And he said, how did we get to that number? It goes back to this GAO report which did an analysis of capacity by category, pier space, apron space, runway, hangars, and you took the amount of force structure, people and equipment and weapon systems and platforms and the amount of infrastructure and you mapped it together according to categories. And as we all know, the analysts can get very precise and create a mosaic that yields a percentage. I don't think it is accurate. It is clumsy, and that is what I was trying to indicate, too. It does not directly relate, will not directly relate to a closure or realignment percentage when it is all over and done with. I don't think it will.

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    Dr. SNYDER. Right. Great. Thank you, Mr. Secretary. Thank you, Mr. Chairman.

    Mr. HEFLEY. Thank you. We are going to have to bring this panel to a close. Ray, let me say though, don't make the assumption you are going to get another round of base closures in 2005. You probably will, but don't make that assumption. There are efforts being made to see that that does not happen, that it be postponed.

    Also, don't make the assumption that you are going to get it, if do you get it, under generally the same kind of conditions that we had under the last rounds. And one of the suggestions that you pass off and most of the people over there pass off is the idea of taking to the table the things that you know you are not going to close. I might start with the Air Force Academy and West Point and Annapolis. You know you are not going to close them, Fort Irwin, Pendleton you know you are not going to close them. Get those darn things off the table. I cannot believe that the brain trusts at the Pentagon are sitting over there in blissful ignorance not knowing what we have to have and what we don't have to have. There are a certain number and maybe it is a percentage. Maybe you could say a third of the bases that you have, 300 maybe, you could say 100 of these bases we absolutely can't do without and we are not going to let some committee determine for us that they are going to be closed and we will have another Cecil Field incident.

    I just say that for you to think about, first of all making the case that we need another round of base closure because that is going to come up repeatedly this year and, second, being open-minded to think of suggestions about tweaking the process to maybe make it work better. I think those of us that have been through the other rounds think there may be some ways that could make it less painful.
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    Mr. ABERCROMBIE. Mr. Chairman, before you close could I make a correction? Mr. Rumsfeld didn't say how did we get to that number? He said, how did we get to that number?

    Secretary DUBOIS. Mr. Abercrombie, you do it so much better than I.

    Mr. HEFLEY. Thank you very much, Mr. DuBois. Our second panel will be made up of the Honorable Mario Fiori, Assistant Secretary for the Army for Installations and Environment, Major General Larry Lust, Assistant Chief of Staff for Installation Management, Brigadier General Clyde A. Vaughn, Deputy Director, Army National Guard, and Major General Collis N. Phillips, Deputy Chief of the Army Reserve. And gentlemen, we will start when you get settled.

    Deputy Under Secretary Fiori.


    Secretary FIORI. Good afternoon, Mr. Chairman and members of the committee. I always enjoy following Ray DuBois. He takes all the hard questions that we have, and we have some of the other things to tell you about. We are really pleased to be before you to discuss the Army's fiscal year 2004 military construction budget. We have provided detailed written statements for the record and would appreciate an opportunity to comment briefly on the highlights of our program.
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    The Army's overall 2004 budget request supports the Army vision, transformation, readiness, and people. It implements a strategic guidance to transform to full spectrum force while ensuring warfighting readiness. It reflects a balanced base program that will allow the Army to remain trained and ready through fiscal year 2004, while ensuring that we fulfill our critical role in the war on terrorism.

    Our military construction budget request is $3.2 billion and we will fund our highest priority facility and family housing requirements. When we developed this year's budget, difficult decisions were made to optimize our resources in response to the global situation. The Army budget provides the best balance among all of our programs, including military construction.

    Transformation is one facet of the Army vision. The Army is fundamentally changing the way we fight and creating a force more responsive to the strategic requirements of the nation. Our 2004 budget includes facilities to support both the Active and Reserve components in this transition.

    First, we are transforming installation management. On October 1, 2002 the Army placed the management of Army installations under the Installation Management Agency. The Installation Management Agency is a new field operating agency reporting to General Lust. It is a top-down regional alignment which creates a corporate structure with the sole focus on efficient and effective management of all our installations. It frees our mission commanders to concentrate on transformation and readiness.

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    Second, in support of transformation, our budget contains $329 million for 17 projects at 4 installations, an additional $85 million for 31 Army National Guard projects, facilities requests that cover the spectrum needed for effective operations and training, including ammunition supply point upgrades, mobilization facilities, training land acquisition, maintenance facilities, ranges, information system facilities, barracks, and family housing. The National Guard Army Division Redesign Study facilities include readiness centers, maintenance shops, and training fire stations.

    The second facet of the Army vision is readiness. Army installations are our nation's power projection platforms, and they provide critical support to the Army and joint operations. We have requested funding for key projects that specifically focus on readiness and include firing ranges, live firing ranges, maintenance, test, deployment facilities, Army National Guard readiness and Army Reserve centers. These critically needed projects constitute $266 million of our budget.

    The third facet of the Army division is people. The Army continues its major campaign to modernize barracks to provide enlisted permanent party soldiers with quality living environments. With the approval of our 2004 budget, 79 percent of our barracks requirements for permanent party soldiers will be funded. Additionally, we are including physical fitness centers and dining facilities to support soldier fitness and well-being. According adequate and affordable housing continues to be a major concern to soldiers and their families.

    With the approval of the 2004 budget, out-of-pocket expenses, as Mr. DuBois had mentioned, because of the increase in BAH will be three and a half percent and by 2005 will be zero percent. This year's budget expands family housing privatization and it increases improvements to existing housing. It supports our goal to have contracts in place by 2007 that will provide adequate housing to all on-base military families. These projects include almost 72,000 homes, more than 80 percent of our inventory in the United States.
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    In closing, Mr. Chairman, I sincerely thank you for the opportunity to outline our program. As I have visited Army installations, I have witnessed progress that has already been made and I attribute much of the success directly to the long-standing support of this committee and your staff. We look forward to working with you as we transform our Army installations, and I would like now to turn it over to Major General Lust for his comments, sir.

    [The prepared statement of Secretary Fiori can be viewed in the hard copy.]

    Mr. HEFLEY. General.


    General LUST. Mr. Chairman and members of the committee, it is a privilege for me to be here today to talk to you about the Army's fiscal year 2004 military construction, family housing, base realignment and closure programs. I am here today representing the men and women who serve in our Army and protect our nation every day. If these soldiers and family members could be here today, I am sure they would thank you, as I do, for the strong support for our military construction programs, especially in the areas of barracks and family housing.

    As Dr. Fiori has mentioned, our budget request of $3.2 billion in military construction supports the Army vision for people through barracks and family housing, ranges of our training and maintenance and deployment facilities, and transformation with projects for the Stryker brigade combat team. This budget meets our most critical requirement and ensures the Army is prepared to respond to our nation's call today and in the future.
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    The evolving strategic and operational environment our nation faces requires the transformation of this great Army. The transformation will impact all aspects of the Army, to include how we manage our installations. For example, as Dr. Fiori has mentioned, we have created the Installation Management Agency. Instead of 14 different headquarters involved, we now manage our installations through a single headquarters, which allows for a cooperative approach to management and improving the well-being of our soldiers, families and civilians worldwide. In addition to the new management structures, we are providing new facilities to meet the needs of the Stryker brigade combat teams. As in past years, this budget request is a balance between the Active and the Reserve components in the areas of military construction, sustainment restoration and modernization and base support operations. In addition, this request is balanced with the Army's other programs and its overarching priorities of people, readiness, and transformation.

    I, like Dr. Fiori, look forward to working with each of you in making sure that our Army is prepared to respond to our nation's call today and in the future.

    Sir, I will be followed by Brigadier General Clyde Vaughn, Director Deputy of the Army National Guard.

    [The prepared statement of General Lust can be found in the hard copy.]

    Mr. HEFLEY. General.

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    General VAUGHN. Mr. Chairman, distinguished members of this committee, I appreciate this opportunity to present our military construction budget request for fiscal year 2004. This year's request for $168 million will build or improve 35 Army National Guard facilities. It is focused on the Army's vision, to the commitment of transformation, readiness and people and incorporates these areas into our fiscal year 2004 military construction program.

    The majority of our project requests supports the continuation of the Army Division Redesign Study (ADRS). ADRS addresses an Army issue of a combat support and combat service support force shortfall. The Army National Guard, in support of the Army's need, is reorganizing selected combat units toward this end.

    Our transformation to the combat support and combat service support force units creates a new need for facilities. The request of $84.9 million for these 31 projects in 14 states will support the construction of readiness centers, organizational maintenance shops, training fire stations and one working animal building. Also included is an Armed Forces Reserve Center jointly shared with the Marine Corps Reserve. These projects support all areas in the Army's vision.

    While challenging, the Army National Guard does its best to revitalize our structures. We have included 4 revitalization projects at the cost of $55.3 million in this year's MILCON request. Three of these projects are part of the Army facilities strategy, which used a focused approach to improve conditions of certain facilities types. These projects include the readiness center, consolidated maintenance facility, and an Army aviation support facility.
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    The military education facility is the fourth revitalization project request. This facility supports trained soldiers in eight States. The projects will provide an up-to-date environment that will save training dollars. These projects are about people and readiness, training our soldiers, providing for their well-being, and maintaining and sustaining their facilities and equipment to be ready for our nation's call and state emergencies.

    Mr. Chairman, the Army National Guard is proud of its history of accomplishments and service to our nation, the states and territories. With this budget request we can continue to provide those services and remain a cornerstone of our nation's defense.

    In closing, I thank this committee for your time and this opportunity to testify on behalf of the great men and women of the Army National Guard. I will be followed by Major General Collis N. Phillips, Deputy Chief of the Army Reserve.

    [The prepared statement of General Vaughn can be viewed in the hard copy.]

    Mr. HEFLEY. General Phillips.


    General PHILLIPS. Mr. Chairman and distinguished members of the committee, it is a privilege to appear before you to represent the men and women of the Army Reserve, a force that provides the Army with invaluable capabilities in defending our nation's interests. It is an honor to present the Army Reserve's military construction budget request for fiscal year 2004.
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    The Army Reserve military construction program focuses on our number one priority, readiness. Our fiscal year 2004 budget asks for $68.4 million, which includes construction of 4 projects, that ensure the Army Reserve continues to be a highly trained deployable force that stands ready to respond whenever and wherever called upon. These projects consist of three Army Reserve centers with training, maintenance and storage buildings and one maintenance and storage facility.

    The Army Reserve supports joint construction initiatives. We are currently completing construction of two joint projects. We are also actively planning three projects with components of the Naval Reserve, Marine Corps Reserve and the Army National Guard.

    I want to highlight three success stories. The first is transformation of installation management; second, the real property exchange program; and, third, the readiness function of the Army Reserve centers.

    First, under the leadership of the Secretary of the Army to transform installation management, we are pleased to say that the Army Reserve is fully integrated in the new Installation Management Agency. This integration of staff allows the Army Reserve to use the same corporate structure and standards as the Active components to more efficiently apply our limited resources in the management of Reserve centers and provide an equal level of service to all of our soldiers and their families.

    Second, the Real Property Exchange Program has allowed the Army Reserve to receive new modern facilities in exchange for old obsolete Reserve centers located in high density population or expensive commercial property areas. This is a win-win situation for taxpayers, as there is no expenditure of military construction dollars and developers can revitalize inner cities or downtown districts, therefore increasing tax revenues for local municipalities.
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    Third, Army Reserve centers are multifunctional facilities that provide the support to the Army vision, people readiness, and transformation. Army Reserve centers fully support our warfighting needs, provide the initial projection of Army Reserve forces, and serve soldiers and families as a lifeline of support during peace and war.

    Army Reserve centers are located in the hometowns of the American people across the country. The visibility of Army Reserve centers requires that we continue to be good stewards of the taxpayers' dollars and apply those resources to Reserve centers with the highest priorities. The Army Reserve wants the American public to know that the Army Reserve is a good return on their tax dollars.

    Mr. Chairman, the fiscal year 2004 budget is a balanced program that permits us to execute our essential construction programs. This request is part of the total Army budget request that is strategically balanced to support the current war effort, the readiness of the force and the well-being of our personnel. We are grateful to the Congress and the nation for the support you have given and continue to give to America's Army Reserve as well as the nation's most valuable resource, our soldiers.

    This concludes my statement, and I would turn the hearing back over to Dr. Fiori so that we can answer any questions from the committee.

    [The prepared statement of General Phillips can be viewed in the hard copy.]

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    Mr. HEFLEY. Thank you very much. All of you. Neil, you didn't get a chance the last time. I will start with you.

    Mr. ABERCROMBIE. Thank you very much. Secretary Fiori, I want to thank you for your sensitivity and your responsiveness with respect to circumstances we have had to deal with in Hawaii. It is a long way away from the mainland. We have some unique situations and circumstances there that require someone who is willing to act on the premise that one size doesn't necessarily fit all, and I want to compliment you for that and thank you for it.

    With respect to a question that both the chairman, myself and other members have had to deal with over the years, when we were not only contemplating but acting on the premise that there would be year-by-year authorizations and appropriations, essentially cash financing of our MILCON projects, even more particularly with respect to housing, with respect to quality of life issues, there was an argument made that to try and put in some kind of a provision, language provision either in the authorization bill, the appropriation bill or both, concerning local hiring, concerning local firms being considered, construction firms, supply, distributions and so on. Also there would be an argument, well, you can't do that. You have to open this up for bidding to everybody. And more often than not, in many instances, very large corporations could come in, they could do the bidding, they could take the chances, they could troll, if you wish, for jobs, and some of the smaller companies, corporations and so on couldn't ever compete with that. The best they could hope to do is to try to come in as a subcontractor, something like that. So that played itself out over and over again over the years.

    The problem comes now, and I think there is a significant change as a result of the work that the chairman did in particular, that I want to compliment, of opening up the MILCON process, particularly where quality of life issues like housing was concerned, opening up the private-public partnerships, opening it up to new financing regimes, opening up to new and experimental and innovative ways of trying to fund long-term commitments to rehabilitation of houses, building of houses, management of housing. Again, in particular as a result of that innovative work that the chairman was in great measure responsible for, we now have the possibility of catching up and perhaps even surpassing our targets with respect to the housing that otherwise never would have had a chance to be completed. I am sure you would agree, because the simple process of trying to get through the amount that was needed, the amount of housing that was needed and the funding that would be available on a year-by-year project by project basis simply wasn't possible. So now we are in a situation where we are moving slowly, but most assuredly surely towards long-term financing, housing development, developers very, very interested in getting into it. It is not just the Army. There is the Navy, there is all kinds—we have this Ford Island project that we are stumbling towards a conclusion with out in Hawaii. But we are also coming into long-term contracts and the reason for my long preamble, Mr. Chairman, is that it is one thing when you are dealing year by year. I was just saying to Mr. Reyes here that, you know, if you didn't quite get your folks working on a project this year, well, there is always next year. And we, you know, we had our chance and we would scramble and see if we couldn't get our folks working. But when you come up with something, or when one comes up with something like a 50-year contract, boy, let me tell you. It scares people because they think what happens if the contract goes to some mega company who then has us at its mercy, in effect because they are going to be doing the building, the rehabilitating, the management, the landscaping, you name it, the every day management, those kinds of things.
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    My question is—maybe it is an observation that will become a question—is it appropriate when you have such long-term contracts for us to put some language in the authorization and appropriation bills that local folks are going to get the work, that local companies in our constituencies are going to be able to get the work, are going to have to be taken into account, where there is going to have to be a local bill provision?

    Well, I had to go through that, Mr. Fiori, because this is an issue that is of burning importance to our constituents. You start thinking about a 50-year commitment. Your commanders aren't going to be there 50 years. But in a place like Hawaii I can tell you we don't get to get on a bus or a car and drive to the next county or go to the next state to get a job. We are out there. So this question I think becomes—can you folks consider whether or not we can have some kind of a local bill of consideration when you have these long-term contracts out for the rehabilitation and development?

    Secretary FIORI. I would be glad to try to address the problem, your question sir. I really work very closely with our small business person, Mrs. Tracy Spencer, and we work closely together in all our projects, every time I have gone into Hawaii to do RCI I have Tracy come with me. As you know, we have had the success in the other programs that are over 70 percent of our money that is used for housing. Both the construction, the rehabilitation, and the maintenance of them stays in the local community. We have these long-term 50-year contracts. We need them obviously to get the capital that we need, to get started on building these houses out and by the year 10 of any one of these contracts, which I think is the longest—I have one contract I think that I have to go out that far—we will have either rehabilitated or rebuilt, well, rehabilitated, rebuilt or built new homes on every one of the installations from the time we transferred the property to the contractor. The concern about 50 years that is a long thing to predict in any case.
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    The system is designed where the mega-companies can't really dictate to us. We have protections in here where that garrison commander as long as he is there, as long as he has people available to use those facilities, and that will become almost voluntary. By the way, the contractor will have to fight for his profits and his money once we get into the steady state in about year 10. He is, by definition, and I would say almost that you have an advantage over most other places because we are in Hawaii, that we are going to use mostly Hawaiian labor force and in fact, as you know, one of the competitors for your contract in Hawaii is a major Hawaiian company, but not a small business.

    Mr. ABERCROMBIE. Well, it goes beyond small business. A big business in Hawaii doesn't even approach what is on the mainland.

    Secretary FIORI. I don't think we need additional legislation to include small business. I think we have plenty of regulations right now that tell us that we must and we do. With all sincerity and intent and I think in my 10 years now in government service in different places we have very much concentrated on making sure the opportunities are there for the small businessmen.

    Mr. ABERCROMBIE. Thank you, Mr. Chairman. But, Mr. Secretary, I want to say again for the record, I am not just talking about small business. I don't mean you personally. Small business as it may be defined by some of these people, let me tell you, is a big business in a hell of a lot of districts and constituencies in this country and it is big business for us. For the mega-companies it doesn't mean anything. But day-to-day, day in and day out our people depend on us. I appreciate what you are saying and I appreciate the time, Mr. Chairman. But I do think we have to devote a little more time to this subject to make sure that our local people are not being frozen out and that local consortium can compete against the mega-companies.
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    Mr. HEFLEY. Mr. Ortiz.

    Mr. ORTIZ. Thank you, Mr. Chairman. Mr. Secretary, I know that the Army, like all the services, is participating in the development of the next BRAC in the year 2005. How is the Army preparing for the 2005 base closure rounds? Are you doing any planning or are you formulating any ideas as to what you are going to do, and in what general categories of installations do you believe the Army has excess capacity and why?

    Secretary FIORI. Well, yes, sir, we are working very closely on the BRAC, and one of the major changes in the whole BRAC process, and that is the one we are consumed in at the moment, has to do with the joint use of facilities. We have developed in the office of the Secretary of Defense (OSD) and very closely with Mr. DuBois, and my three counterparts have worked hard to first work and decide through a process that we have developed and the senior people in the Pentagon, what elements are going to be reviewed jointly. Then the next step is what sub-elements of those major elements are going to be done and the organization for doing that. Our first deliverable to Congress has to be the criteria we are going to evaluate all the facilities that we have. That is the guidance we have right now. And I certainly understand the chairman's opinion that maybe we shouldn't do it to all of them. But the fact is you almost have to do all of them because not all of them are going to be shut down. If they get shut down, there are going to be new facilities put on those places. So almost every one is on the plate in one way or the other.

    I, personally for the Army, have hired Dr. Craig College. He is a highly skilled senior civilian executive who is our Deputy Assistant Secretary and who is going to do all the evaluations for the Army and also be our coordinator with the joint studies in OSD, and that is the extent of what we have done so far. We have not looked at any facilities yet. Our first task is to try to figure out the criteria that we are going to use to evaluate the military readiness as the primary one. What software are we using and what people are we putting together to do the study? I have a relatively small budget for this year and next year.
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    Mr. ORTIZ. One of the things that we have come across is that when they do shut down some facilities, base, there is a lot of these facilities that were not built with appropriated funds. But they used nonappropriated funds, which means that there was funding coming from the soldiers, you know. And many times what we do, we just give those facilities away and that is not taxpayer money. That is money that the soldiers spend and the profits went to make a better quality of life for them. Now, are you consulted once they do have a base closure as to what you are going to do with those facilities that were built with the soldiers' money and not appropriated funding?

    Secretary FIORI. To be honest, I have not looked at the history on how we have disposed of some of those properties. One of the things we have decided on, both individually with Dr. College and also Mr. DuBois, who is using his Deputy, not only are we going to look at a process and a methodology of how to make our recommendations. An important element that I saw missing in the previous four BRACs is what are the end states of all these facilities and how do we dispose of them?

    So we are doing something separately or independent really of the BRAC study on how to dispose of the property, and I will promise you that I will certainly consider the comment you made about the nonappropriated funds. I just haven't given it that much thought, sir.

    Mr. ORTIZ. You should because that is a lot of money. It comes from the soldiers' money, you know, and I don't think that is fair to them. I appreciate all you have done and the work that you will continue to do.

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    Thank you, Mr. Chairman.

    Mr. HEFLEY. Thank you. Mr. Rogers.

    Mr. ROGERS. Thank you, Mr. Chairman. I would ask, with regard to our current state of surge and readiness that we are experiencing, is it your opinion, and I would direct this particularly to General Lust, is it your opinion that our depot structure has been adequate to meet our maintenance and support our maintenance obligations in this current state?

    General LUST. If I recall, we have five maintenance depots and in my previous duty position before I became the current Assistant Chief of Staff for Installation Management, I was the Deputy G–4 (Deputy Chief of Staff, Logistics) for the Army, and in that light it was not a matter of capacity that we had. It was a matter of funding, of being able to push the stuff through in a timely manner and recapitalize the equipment in a manner which you wanted. It wasn't necessarily so much of a capacity of having the right number of depots. It was being able to fund and have the funds with all other competing priorities to in fact be able to induct into the depots those items in the sufficient numbers and quantities that we wanted, to be able to field and recapitalize the system as we desired.

    So the short answer is capacity has not been a problem. It has been the funding, as I recall, sir.

    Mr. ROGERS. Well, I guess I am really interested in your capability to meet our maintenance obligations. We are in a heightened state of readiness as we all know, and it has put a real demand on the infrastructure. We have heard some talk about excess capacity or capability, and I want to know if you are seeing that excess at present with this state of readiness that we are in now. We may in the foreseeable future have to meet this level of readiness, I think, again, we would all agree.
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    General LUST. Again, I go back. It depends on what scenario you want to go against when we have excess capacity. The capacity we have right now that we are again using is the amount of money I would put against to in fact push the stuff through.

    Mr. ROGERS. I am thinking in terms of infrastructure, the depot infrastructure. Is there an excess, in your opinion, of infrastructure given the level of readiness that we are currently in?

    General LUST. Sir, that question is out of my lane. I will take it, get an answer back to you from the G–4 because it has been eight months since I have been there and that could have been changed with the environment they are working with right now, sir.

    [The information referred to can be viewed in the hard copy.]

    Mr. ROGERS. Well, let me ask this question then. I know transformation is real important in your future. How do you see the depot infrastructure that we have now meeting your future goals as far as the transformation of the military?

    General LUST. The transformation? Well, again sir, that question is not an axiom question. That is a question I will have to get answered for the record because that falls in the G–4, in the logistics community plus the Army Material Command community as to whether that meets in the transformation, sir. But will we need depots? Yes, sir, we will need depots. How they will be manned is another question.

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    [The information referred to can be viewed in the hard copy.]

    Mr. ROGERS. I agree we are going to need depots. The point that I am trying to focus on is we are hearing this talk on this committee, from you folks, not just in your branch but in all the branches, about this supposed excess in capacity that we have, we heard the figure 20 to 25 percent earlier, arguably it is an inaccurate figure based on the previous panel. I don't see that kind of excess and I am looking for somebody to show me where, particularly with regard to the depot structure, we have that kind of excess or anything approaching that, particularly given what we are currently experiencing in the form of end strength and what we can for the foreseeable future anticipate having to rise to again the level of end strength. I don't see us in a BRAC, downsizing significantly our depot structure, and then having problems as far as supporting our end strength in the future and this maintenance operation.

    Secretary FIORI. Mr. Rogers, maybe I can help on that because I have been participating quite a bit on the joint studies or the starting up of our joint studies. We believe there is excess capacity. Can we pinpoint it across the OSD? Probably we could give you a lot of apocryphal stories about different places, different places being at 40 percent, 30 percent capacity because they don't need to produce. But the fact is we are going to put under the OSD mantle the review of all our bases that—for all of our depots, shipyards and everything else and hopefully include in that the effects of the civilian part of our supply chain also. So I don't think we could give you a good answer now, except we do believe there is excess capacity. It is just how you divide it up and how you make sense out of it, and we are going to do it across the whole OSD rather than just the Army as in previous times.

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    Mr. ROGERS. Okay. Well, I look forward to receiving that information. I want all y'all to know how much I appreciate y'all and the great job y'all are doing for us. Thank you, Mr. Chairman.

    Mr. HEFLEY. No other questions. Let me say, Mr. Fiori, I don't see any reason you couldn't take off the table those you know that you aren't going to close and still consider them for realignment. I think you could do that as well. You are not going to close Fort Hood. You know you are not going to close Fort Hood. But maybe you in your internal analysis say, but we have 10 percent excess capacity at Fort Hood. We could take some realignment there of some kind. I think you could do that in advance, couldn't you?

    Secretary FIORI. I would suppose, sir.

    Mr. HEFLEY. Yeah. Let me ask the Guard and Reserve a question. Traditionally the pattern is that the Guard and Reserve request is under-requested, particularly the Guard, I suppose because the idea and the tradition has always been Congress loves the Guard. They will take care of them. So we don't request everything that the Guard needs.

    How does your budget compare to that kind of standard this time? Do you think you are getting the kind of requests you need or do you hope that there will be some adds from Members?

    General VAUGHN. Mr. Chairman, obviously right on the mark. This particular request, though, is higher. With the exception of 2002, it is higher than any we have ever had. As you well know, we relied on the add-on piece of this for many, many years. In fact, we weren't even hardly in the business, you know, 1996, 1997, 1998.
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    Mr. HEFLEY. That is true.

    General VAUGHN. If it hadn't been for Congress we wouldn't have been able to do anything. As we look at this we are on a ramp and there is a lot of promise for the outyears, and of course the FYDP piece of that and the structure of that; as we see the need strategically, is it possible to do something different?

    Yes, the capability to do something, you know, to add on that is there. But we are going to have to grow some, especially in the outyears, to execute what we have lined up on our budget. I would just say that I think as an Army that we have been treated a lot better in this particular budget request and it looks a lot better in the outyears. Is it enough? Difficult question.

    Mr. HEFLEY. Well, then I can safely tell members when they come to me that, no, no, you would be offended if we did add-ons.

    Well, thank you very much. We appreciate your testimony very much. It is quite helpful.

    And thank you, committee. It has been a long but a good afternoon.

    The committee stands adjourned.

    [Whereupon, at 5:56 p.m., the subcommittee was adjourned.]
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