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[H.A.S.C. No. 107–5]



FOR FISCAL YEAR 2002—H.R. ????







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MARCH 23, 2001


For sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov  Phone: (202) 512-1800  Fax: (202) 512-2250
Mail: Stop SSOP, Washington, DC 20402-0001



CURT WELDON, Pennsylvania, Chairman
WALTER B. JONES, North Carolina
BOB RILEY, Alabama
HOWARD P. ''BUCK'' McKEON, California
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J.C. WATTS, Jr., Oklahoma
DON SHERWOOD, Pennsylvania

LANE EVANS, Illinois
JAMES H. MALONEY, Connecticut
MIKE McINTYRE, North Carolina
ROBERT A. BRADY, Pennsylvania
BARON P. HILL, Indiana
SUSAN A. DAVIS, California

Peter M. Steffes, Professional Staff Member
Joseph F. Boessen, Professional Staff Member
Diane W. Bowman, Staff Assistant



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    Friday, March 23, 2001, Fiscal Year 2002 National Defense Authorization Act—Current and Future Viability of Depot-Maintenance Repair

    Friday, March 23, 2001

FRIDAY, MARCH 23, 2001


    Ortiz, Hon. Solomon P., a Representative from Texas, Ranking Member, Military Readiness Subcommittee
    Weldon, Hon. Curt, a Representative from Pennsylvania, Chairman, Military Readiness Subcommittee


    Bergren, Maj. Gen. Scott C., Commander, Ogden Air Logistics Center, Air Force Materiel Command, U.S. Air Force

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    Cerney, Col. Robert W., Commander of the Maintenance Center, Albany, GA, U.S. Marine Corps

    Chenoweth, Capt. Emory L., Commanding Officer, North Island Naval Aviation Depot, San Diego, CA, U.S. Navy

    Coburn, Gen. John G., Commander, Army Materiel Command, U.S. Army

    Dockens, Col. Thomas M., Commander, Corpus Christi Army Depot, U.S. Army

    Dubois, Ray, on Behalf of the Secretary of Defense

    Dyer, Vice Adm. Joseph W., Commander, Naval Air Systems Command, U.S. Navy

    English, Col. Robert W., III, Commander, Letterkenny Army Depot, U.S. Army

    Haines, Maj. Gen. Dennis, Commander, Warner Robins Air Logistics Center, Air Force Materiel Command, U.S. Air Force

    Hart, Col. Fred L., Jr., Commander, Red River Army Depot, U.S. Army

    Hayes, Col. Aaron, Commander, Anniston Army Depot, U.S. Army

    Jackson, Col. Gilda A., Commanding Officer, Naval Aviation Depot, Cherry Point, NC, U.S. Marine Corps
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    Johnson, Maj. Gen. Charles L., II, Commander, Oklahoma City Air Logistics Center, Air Force Materiel Command, U.S. Air Force

    Lee, Maj. Gen. Paul M., Jr., Commander, Marine Corps Materiel Command, U.S. Marine Corps

    Lyles, Lt. Gen. Lester L., Commander, Air Force Material Command, U.S. Air Force

    Rivers, Col. Ervin, Commander of the Maintenance Center, Barstow, CA, U.S. Marine Corps

    Roum, Capt. Christopher J., Commanding Officer, Naval Aviation Depot, Jacksonville, FL, U.S. Navy

    Warren, David R., Director, Defense Capabilities and Management, General Accounting Office, Accompanied by John Brosnan and Julia Denman

    Weidenthal, Col. Kurt, II, Commander, Tobyhanna Army Depot, U.S. Army


[The Prepared Statements submitted can be viewed in the hard copy.]
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Bergren, Maj. Gen. Scott C.

Cerney, Col. Robert W.

Chenoweth, Capt. Emory L.

Coburn, Gen. John G.

Dockens, Col. Thomas M.

Dyer, Vice Adm. Joseph W.

English, Col. Robert W., III

Haines, Maj. Gen. Dennis

Hart, Col. Fred L., Jr.

Hayes, Col. Aaron

Jackson, Col. Gilda A.

Johnson, Maj. Gen. Charles L., II

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Lee, Maj. Gen. Paul M., Jr.

Lyles, Lt. Gen. Lester L.

Rivers, Col. Ervin

Roum, Capt. Christopher J.

Warren, David R.

Weidenthal, Col. Kurt, II

[The Documents submitted can be viewed in the hard copy.]
Audit Report of January 12, 2001 from the Office of the Inspector General, Department of Defense

Audit Report of March 5, 2001 from the Office of the Inspector General, Department of Defense

Charts of the Air Force's Plan to Accomplish Depot Maintenance on Fielded Weapon Systems

Letter to Hon. Bob Stump and U.S. Army Materiel Command's Report on the Implementation Plan for AMC Apprenticeship Program

Mission Capable Rates in Decline, Chart provided by Congressman Duncan Hunter

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[The Questions and Answers are pending.]


House of Representatives,
Committee on Armed Services,
Military Readiness Subcommittee,
Washington, DC, Friday, March 23, 2001.

    The subcommittee met, pursuant to notice, at 9:00 a.m., at the Pre-Shop Analysis Building, Corpus Christi Army Depot, Corpus Christi, Texas, Hon. Curt Weldon (chairman of the subcommittee) presiding.


    Mr. WELDON. The subcommittee will come to order.

    Today the Subcommittee on Military Readiness continues with its series of field hearings. I am proud to say this is our first field hearing on the issue of our depots aimed at getting us out of Washington and meeting with the men and women of the armed forces where they work and live to hear firsthand about their concerns on the state of our military and our readiness.
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    I am personally very pleased to accept the invitation of the gentleman from Texas, my good friend. We are here because of my good friend, Solomon Ortiz. He and I have been long-term friends in the Congress. Eight years ago, or nine years ago, he was the Chairman of the Oceanography Committee and I was his ranking member. I am a little happier in our current position, but Solomon is one of my best friends in the Congress. He said, when I took over this committee, Chairman Weldon, you have to come down and listen to the depots. You have to understand the complexities of what is happening, and you have to be willing to give them the consideration of the concerns that they will express to you, and that is why we are here.

    I have not been directly involved in depot issues over the past several sessions of Congress, in fact, I have chaired the Research and Development Committee, so I am here to learn.

    We have an outstanding group of Members of Congress with us, and this is a tribute to both Solomon and to the depot system. Let me introduce them. I will ask my good friend and colleague to speak in a moment, the ranking member from this district, Solomon Ortiz, who is also a senior member of the Natural Resources Committee.

    We are joined by another full committee chair. Congressman Hansen is a senior member of the Armed Services Committee; and he is the full committee chair of the Natural Resources in the Congress, and he is from the state of Utah.

    We also are joined by our good friend Saxby Chambliss, who not only being a senior member of the committee from the great state of Georgia, he is a member of the Agriculture Committee; and he is a member of the Intelligence Committee. He also chairs a special task force on the Intelligence Committee dealing with terrorism.
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    Also from the great state of Texas, we have our good friend Silvestre Reyes who represents the El Paso area. Silvestre is an active Member of our Congress and our committee. He is also a member of the Veterans Affairs Committee, the Intelligence Committee and he is the Chairman of the Hispanic Caucus representing all of the Hispanic interests in the Congress.

    Also from Texas, we are pleased to have Mr. Ciro Rodriguez, a solid member of our Armed Services Committee and a member of the Veterans Affairs Committee.

    Our seventh Member who is here with us is another Texan, Congressman Max Sandlin, who is from the eastern part of your state, is a member of the Transportation Committee and the Financial Services Committee.

    And to show you just how special you folks in Corpus Christi are and how special our depots are around the country, the Secretary of Defense sent one of his top policy advisors, the Deputy Secretary of Defense and Special Assistant to Secretary Rumsfeld. This is very unusual to have someone of this stature travel with a Congressional delegation for a field hearing. I am going to ask him to speak before we break for lunch. We are very pleased and honored to have with us Ray DuBois. Ray, would you please stand and be acknowledged. Thank you for being here.

    [Mr. DuBois stands.]

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    Mr. WELDON. So you can see this is a special event and one that we think helps to set the right tone for our deliberations this year.

    The past several years have been very difficult for our military. In fact, a combination of factors has caused major problems for us. We have seen a major dramatic reduction in our defense allocations of resources. In fact, I like to compare defense spending today to what it was in a previous time; and I will not pick the tenure of Ronald Reagan. When John Kennedy was the President, a time of relative peace, the percentage of federal revenues spent on the military was 52 cents of every dollar going to Washington, nine percent of our country's GNP. This year's defense budget is 15 cents of the federal budget, 15 cents; and as a percentage of our gross national product, it is two and one-half percent. From 52 cents to 15 cents, from nine percent of GNP to two and one-half percent of GNP. When John Kennedy was the President, we had a draft. We did not have the families, we did not have the housing, education and quality of life issues that we have in today's all-volunteer military services. When John Kennedy was the President we did not have a line item called environmental mitigation. That is $11 billion this year that will not go to fund depots. It will not go to build helicopters or planes, but rather is going to environmental concerns around the country. So a much larger portion of the smaller amount of money today is in fact going to the quality of life for our troops. But while we have reduced defense spending, there has been another dramatic change and that is the use of our troops.

    Let me give you another comparison. If you take the period of time from the end of World War II until 1991, from the administration of Harry Truman to the administration of George Bush, Senior, all of those presidents combined deployed our troops 10 times in 40 years. In the last nine years, our troops have been involved in 35 major deployments. Ten deployments in 40 years, 35 deployments in nine years. While the defense budget is going down, the use of our troops has increased dramatically. None of those deployments were budgeted for, none of those deployments were paid for in advance. All of those deployments, the cost of those deployments, had to come out of that rapidly decreasing defense budget. So as a result, some very illogical decisions were made, taxing accounts, cutting back on R&D, limiting the ability to replace and modernize our equipment. As a result, we are here today in the midst of what some would call a train wreck. A train wreck of not enough resources to meet the demands that are being placed on our services. And those of you who serve in our depots understand the impact that you have felt—the battles between privatization and keeping the depots healthy; the battles between new systems; the attempts to save dollars. That is the background for today's hearing.
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    It is critically important that we come down and listen to those people who have to make the tough decisions. We have been studying the issue of depot level maintenance and repair for the last several months in this new Congress. There is no shortage of background information and hearing records. This comes as no surprise for those you who have been active on this issue. For myself and others who have not been that involved, it amazed me to review the level of effort measured in the number of times there have been briefings and hearings back in Washington, and by the number of legislative provisions passed by Congress over the years that have been enacted to reach some agreement with the Department of Defense (DOD) on how to manage our public depots. Now I do not have any military maintenance depots or any major defense industries in my district, so I come to this issue completely unbiased and willing to learn.

    As many of you are aware, Congress, the Department of Defense and the private sector continue to struggle over the proper role of the military's maintenance depots. Three changes since the end of the Cold War are largely responsible for this conflict and for forcing us to reassess our traditional view of public depots.

    First, due to the large scale downsizing of U.S. military forces, there is much less depot work resulting in significant under-utilization of existing depots. As an example, since 1987 the active duty military has been reduced by more than 800,000 personnel. Since 1990 the active duty Army has shrunk from 18 to 10 divisions. Since 1988 the Navy has reduced its ships from 565 to 316. Since 1990 the Air Force has reduced its fighter wings from 36 to 20, active and Reserve. And since 1988 the U.S. military has closed more than 900 facilities around the world and 97 major bases in the U.S., including the Philadelphia Navy Yard, 30 minutes from my home.

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    Second, new weapons systems today are more efficient and less maintenance intensive than the systems they replace, requiring much less heavy depot maintenance and causing further under-utilization of our depots. We must continue to make progress in ensuring that each new generation of combat systems makes lower maintenance costs a critical design priority.

    Finally, substantial reductions in the production of new weapons systems have caused the private sector to experience similar under-utilization issues leading to a desire to look for new sources of work. It is important to note that under-utilization of both public and private facilities presents difficult challenges to both depots and depot users. Under-utilization makes planning and managing workforces extremely difficult for depot users. Under-utilization raises costs and delays service time lines. With the end of the Cold War, Congress continued to recognize that maintaining an organic capability to perform maintenance on military equipment is absolutely essential to our national security. This goal has been made increasingly difficult by the reduction of depot maintenance infrastructure by over 50 percent and by sharp reductions in maintenance budgets, while at the same time significantly increasing equipment utilization and design life. DOD has been struggling to find ways to make equipment maintenance more affordable while maintaining traditional organic depot capabilities.

    There are some in Congress who believe that the Department would just as well close the public depots and contract out all maintenance and repair requirements. As a result, over the past several years, Congress has legislated repeatedly to guide DOD's operation of maintenance depots. Most of this legislation is motivated by a perception that the public depots and their importance as our nation's organic maintenance capability are at risk. Unfortunately, DOD has done little to change this perception. Mending this relationship must be a priority in the years to come. It should come as no surprise that dramatic cutbacks in the production of new weapons systems has led the private sector to pursue other opportunities for business. I believe that there must be a recognition that the private sector is also faced with legitimate under-utilization problems; in fact, our defense industrial base is at risk. Let me give you an example.
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    Last year, after I talked to all of our major defense contractors in America, I realized one very startling fact, if you combine and add up all the capitalization available to all of the major private defense companies in America, it is less than one-half of the total capital available to Home Depot. That is a sad fact in America, folks, that our defense industrial base has available capital less then one-half of that available to Home Depot. Investors are now wary about investing in military contractors and that is a problem we have to deal with. The point here is that all sides on this issue bring valid concerns to the debate, and since our national security is so dependent on a viable cost-effective military equipment maintenance program, I am convinced we need to move beyond the current terms of the debate.

    The DOD, the Congress and the private sector must sit down together and arrive at a workable solution. In this process, Congress must realize that changes must be made to ensure the long-term vitality of the entire maintenance infrastructure, both public and private. DOD must acknowledge and reestablish as a priority the national security requirement that public depots must be adequately supported to retain a current and future viable organic source of repair and maintenance that is essential. And the private sector must consider new and innovative approaches to the problem, including teaming arrangements with public depots.

    In the end, the readiness of U.S. combat forces must be the primary consideration in any policy that maintains the equipment and weapons systems used by American service members. We must do everything possible to ensure that when we send our fighting forces into harm's way, it is with the best designed and best maintained equipment in the world. Although, I do not have a dog in this fight, there is a lot of fight in this dog to do whatever is necessary to ensure the readiness of our armed forces. You have been out there where the rubber meets the road making sure America is ready and we will not let you down.
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    I would now like to recognize the subcommittee's Ranking Democrat, one of the most revered members of Congress, respected by both Democrats and Republicans; because in the end, I may be a Republican and Solomon may be a Democrat, in the 15 years I have been in Congress, on every vote, every vote, all of those votes involving national security, Solomon Ortiz has placed the men and women of our military at the top of his list of priorities. In some cases he has opposed his party leadership; in many cases he opposed his party's President and our most recent President. I am pleased to call him my friend and I can tell the good people of this region you have an outstanding Member of Congress who is an outstanding representative of how our parliament should work and how our Congress should work in this country. So I give you my good friend and Ranking Democrat, Solomon Ortiz.


    Mr. ORTIZ. Mr. Chairman, I want to thank you for your friendship. I want to thank you for an eloquent statement that you presented this morning, and I want to say thank you and to give you my sincere appreciation for you agreeing to conduct a depot field hearing this session. This is something that most of us, in fact, all of us who are sitting on this dias—I have been a member of Congress for 19 years and we have been requesting two things, an A–76 hearing and a depot hearing. I can tell the audience and I can those of you sitting here that there is excitement, that we see that there is a light at the end of the tunnel because of the great leadership of my friend. We have traveled to distant places to look after the welfare of our soldiers, men and women; the state of the readiness of the troops. Let me say one thing, you could not find a better leader than Curt Weldon. Mr. Chairman, thank you for joining us today and for bringing the subcommittee here today.
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    I want to welcome all of our visitors to this hearing today. Let me take time now to express my continuing appreciation to the employees of the Corpus Christi Army Depot for your dedication and support to this great nation. We cannot forget the fact that we could not be successful here without the strong support from the community and for their support. So for that, we say thank you.

    If some of you are curious about why so many people are here representing so many different activities and organizations, let me give you a quick overview. First, this is the first depot field hearing that we have had and that we have been able to conduct since I have been in Congress. Also, any way you cut it, depot-level maintenance is a major enterprise in the Department. It entails repair, rebuilding and major overhaul of weapons systems such as tanks, ships and aircraft, parts assembled. It also includes limited manufacturing of parts, technical support, modifications, software maintenance, testing and reclamation. Approximately 65,000 employees, ranging from trained technician and skilled artisans to engineers and top-level managers, are currently carrying out depot maintenance. The military services operate 19 major facilities and use over 1300 commercial firms to support a $14 to $16 billion yearly depot-level maintenance requirements. Why is it that we have such an enterprise? Simply because there is a need to provide flexible, timely and cost-effective depot-level maintenance support to sustain our military readiness.

    Those of us who have been working on this matter over the years are very much aware of the many problems and challenges associated with trying to maintain a viable depot-level maintenance capability. Those challenges run the gamut from dealing with an aging workforce, availability of repair parts, a crumbling infrastructure that has been neglected, depot policies that make it difficult to invest in advanced production technology, uncertainty regarding how the Department intends to execute depot-level maintenance for future systems and worker stress brought on by the continuing emphasis on outsourcing and A–76 studies. All of these challenges impact not only on our ability to maintain Legacy systems today, but will also dictate our capability to provide responsive depot-level maintenance in the future.
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    There are a lot of elements to be considered in depot-level maintenance policies and requirements. I remain concerned that the Department might not be placing necessary emphasis on the matter—on this matter and will miss the opportunity to ensure that the depots will be able to perform when required. Mr. Chairman, this is just not about getting money into the operation and management (O&M) account. It is about the need for the Department to develop policies and procedures and an integrated investment strategy to ensure the presence of a viable depot-level maintenance capability essential to contributing to our national defense.

    Again, Mr. Chairman, as we start this meeting today, when I talk to the members of the committee, there is hope, there is excitement, and I know that under your leadership these next two years are going to be exciting. Thank you and all the Members for joining us at this hearing.

    Thank you, Mr. Chairman.

    Mr. WELDON. Thank you, Mr. Ortiz.

    Mr. Ortiz and Mr. Hansen have chaired the Depot Caucus in the Congress focusing Member interest on this issue; and I have to acknowledge their leadership in this area over the past several sessions.

    The way we will work today, we will have two panels before lunch. We will break at 12:00. So we have to conclude the first two panels by noon. Before we break at lunch, I am going to invite the representative of the Secretary of Defense to come up to the dias and make some comments in response to the first part of our hearing. We will take a tour of the depot following lunch and then we will come back and we will have—I will not call it the meat of our testimony hearing, but certainly it is a major part of what we want to hear. We want to hear from the depot leadership. We want to hear from those individuals who are out there performing the impossible tasks. We expect to conclude the hearing sometime around 3:00, perhaps later. Some of our colleagues do have to leave early, they have flights.
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    This is an historic occasion; to get seven Members of Congress to travel to one site for a hearing is very unusual. So if you see a Member peel off, it is not because they do not have an interest, it is because they gave up other assignments and other commitments to be here today for at least a portion of this hearing. I want to publicly thank all of my colleagues for being here today.

    With that, our first witness is the very distinguished Director of Defense Management Issues for the General Accounting Office. He's an outstanding worker. He appears before the Congress on a significant number of occasions, and the work that he does gives us an independent analysis as to the problems that we identify within the Department of Defense. You might want to get a copy of what he is releasing today, which is the Defense Maintenance Sustaining Readiness Support Capabilities Requires a Comprehensive Plan, which is a summary—a more in-depth summary of the highlighted version which will be presented to us by David Warren.

    We are going to try to operate under the five-minute rule, but I would say to distinguished director, we are very pleased to have you here. You may want to introduce the colleagues that you have with you.

    Thank you.


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    Mr. WARREN. Thank you, Mr. Chairman.

    I have with me today Julia Denman and John Brosnan; both have worked on this issue extensively. John is with our Office of General Counsel.

    Mr. Chairman and members of the subcommittee, I am pleased to be here today to discuss major weaknesses and challenges in DOD's depot maintenance program. My testimony will focus on three areas, the changes since 1987, key management weaknesses and key actions the Department needs to take to improve its depot maintenance activities.

    The period from 1987 to 2001 has brought major challenges to the Department of Defense, and as you mentioned, the Cold War drove those changes. Over a period of a decade DOD has a smaller depot maintenance structure, less modern equipment and significantly fewer personnel.

    Now there were three inter-related issues that drove those actions. First was the base realignment and closure process, which reduced military depots from 38 to 19 depots we have today. While the services have implemented some initiatives to improve the efficiency of the remaining depot facilities, they generally have not invested in the depot plant and equipment to establish new capability and advanced technologies.

    Second, the Department has implemented a policy to change—a policy change to place increasing emphasis on defense contractors for the performance of depot maintenance. Contractors' share of depot maintenance since 1987 has increased by 90 percent, while the military depot's share of funding has declined by six percent. Further, the military depot production hours are down 64 percent during this period; and this policy shift has been mostly directed towards new and upgraded systems.
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    Third, as you have mentioned, depot maintenance personnel have been reduced by about 59 percent, from 156,000 in 1987 to about 64,000 persons today.

    As these changes were occurring, our work was showing that DOD was not effectively managing the restructuring of its depot maintenance activities in a number of key areas. For example, the savings projected by shifting depot maintenance work to the private sector is uncertain. The studies that supported the policy shift estimated 20 to 30 percent savings by using contractors; however, the savings projections were based on looking at commercial activity competitions which were very dissimilar to the depot maintenance activities. The activities involve relatively simple tasks that did not require large investments or highly skilled and trained workforce. Further a highly competitive marketplace does not exist for depot maintenance workload and this was one of the primary prerequisites for savings cited by the studies.

    At this time, there are also ongoing pilot tests to look at the cost effectiveness of new logistic support and depot maintenance activities. However, a recent work shows that while these studies are very well intended, baseline measures have not been put in place to determine whether these will ultimately be cost effective as well.

    Concerning policy issues related to core activities, we have noted weaknesses in the implementation of source of repair policies which could impact on the retention of core logistics capabilities. Each service has developed its own procedures and assumptions for computing core maintenance requirements. Further DOD's depot maintenance core policy does not incorporate future requirements to ensure that core capability can be established in a timely manner for new and upgraded weapons systems. For example, in fiscal year 2000, about nine percent of the Marine Corps' depot workload was associated with the family of five-ton trucks. This workload has been identified as core workload, however the five-ton truck replacement vehicle has not been designated as core workload.
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    The Department also lacks a long-term depot maintenance plan that links future requirements with the resources needed to establish required capability, including infrastructure, information systems, trained personnel and equipment. Regarding recapitalization, only limited investments were made in depot maintenance facilities during the 1990s. The situation contributed to the general deterioration and less modern conditions and capabilities that we see at depot maintenance facilities today.

    In the area of meeting various legislative requirements, I want to make a few comments about the 50/50 requirement. The 50/50 requirement is likely to be the most problematic for the Air Force. The Air Force exceeded the 50/50 limitation in the year 2000 and is likely to breach it again in the year 2001, and our best estimate at this point is they will also breach it in future years. While the Air Force is working on this issue, an effective plan to resolve the 50/50 problem has not yet been developed.

    In closing, DOD is at an important point with respect to its military depot systems, as you mentioned in your opening statement. We believe that the Department needs to develop a strategic maintenance plan that sets forth the roles that will be played, and as you said, by the public and private sectors, and identifies the resources needed to establish required capability, including such areas as infrastructure, information systems, trained personnel and plant equipment. Further, the plan needs to identify performance measures associated with the desired readiness and cost effectiveness outcomes for the maintenance activities. Without such an approach, it is unclear whether future public/private sector maintenance capabilities will meet the Department's readiness and sustainability needs in a cost effective manner.

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    I would also add that I think it is extremely important that we are holding this hearing today, because as you mentioned, this issue has been looked at over a period of years and it is one that has been characterized by many promises being made on both sides in order to improve the situation. However, I am sorry to report that there has not been a great deal of follow-through and I think that Congressional oversight is desperately needed to bring the parties, as you said, together to resolve this issue in a way that is fair to both sides.

    Thank you, Mr. Chairman. I will be happy to take questions.

    [The prepared statement of Mr. Warren can be found in the Appendix.]

    Mr. WELDON. Well thank you, Mr. Warren, for your statement, and thank you especially for this report. I would encourage everyone in the room, or anyone across the country that has an interest in this issue of strategic maintenance, to get a copy of the GAO's analysis. Certainly the bottom-line statement that you put forth here today is that we do not now have a comprehensive plan. We are operating on what appears to be a hit or miss situation where decisions are being made that are not always done in the most logical manner possible. You have given us specific recommendations that should be included in the parameters of the plan. I can tell you, we will take those seriously and use those as we begin our deliberations in this session of the Congress.

    I want to save the bulk of my questioning time for my colleagues and I will follow up at the end with whatever questions I have. So my good friend, Mr. Ortiz, I will turn to you first.

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    Mr. ORTIZ. Thank you, Mr. Chairman.

    We really appreciate, Mr. Warren, your very frank detailed testimony this morning. You say there is uncertainty about future capabilities of the depot system; and these, of course, are very important national industry assets that we have. How did the Department get into this situation, one? What do you think needs to be done about this problem? Of course, this committee has endeavored over the years to ensure the future viability of the military depot system. We are always looking for suggestions on what else can be done, like the Chairman just asked. Can you give any suggestions to us this morning, sir?

    Mr. WARREN. Yes, sir. First, I would say in terms of how we got to where we are, it was a very complex situation during the 1990s. There was a great deal of downsizing. Policy changes were attempting to be implemented for very good reasons. However, I think in total what failed to happen was a proper balance between the desire to make increased use of contractor capabilities to do depot maintenance activities, a perfectly reasonable goal; but at the same time, the balance was not there to say how do we sustain our existing organic capabilities. As a result, as I mentioned, the balance shifted during the 1990s to increased—particularly the new and upgraded workloads going to private sector contractors for performance. What that meant for the depots is that they were in essence starved in getting the new technologies, new equipment, new facilities that they needed to sustain themselves in the same way to be a viable capability out into the future.

    So I think it is more—as I said, it is a planning and policy issue as I see it. They need to better frame a policy that meets both of the objectives. The Department continually has stated that that is where they want to be, that they want to have a viable depot system. However, when you look in practice, what has occurred, that just has not happened. So there is an inconsistency between the stated policy and the actual implementation that has left the depots largely doing—in terms of the work they are performing, it is on the older systems that are within the Department. Now that is not total; but, in general, that is the predominant workload that is there now.
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    Mr. ORTIZ. But you know what really worries me is that we went through downsizing which was one of the reasons why we created these problems, and now we have not been able to straighten the problems, but now we are talking about another downsizing. We are talking about another base closure commission in the year 2003, maybe sooner, 2005; and if we have not been able to fix the problem that base closure brought in downsizing, what do we expect if we have another downsizing?

    Mr. WARREN. I think before that downsizing will occur, we will have to see the results of the strategic reviews that are being made at the Department. I mean that is obviously critical. Then that has to be linked with those strategic reviews. That would have to be linked with the capabilities that are required in the depot structure.

    Right now, in a general statement, I think, with some exceptions, excess capacity within the depot system is not the problem it was certainly in 1987 and I would say probably not in 1995. I really think the issue goes back to what workloads and how are these workloads going to be distributed in such a way that there is in essence equal capability to perform some of our key maintenance activities both in the public and in the private sector. What is happening now is, you are moving towards a disparity between that. In other words, if you continue on the path that we have seen over the last particularly six to seven years, you are going to have a highly technical, capable private sector capability for new systems and upgraded systems and a less capable public depot system. So you are going to have this imbalance between the two capabilities. It seems to me, as I understand it, what we are striving for is a balanced capability that meets the needs of the Department of Defense from a readiness and sustainability standpoint and meets the needs not only of the public and the private sector as well.
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    The other suggestion that I would give in this regard—and as I said, I think a strategic plan is key to that, and that is what is missing. Let me give you an example of what is occurring now in the planning area. The overall logistics strategic plan hardly mentions depot maintenance. There is an architecture effort underway to come up with a logistics architecture of the entire Department of Defense. That is based on 30 pilots within each of the—spread among the various military services. Those—then in addition to that, there are transformation plans within each of the individual services. Then in addition to that, there are strategic plans within each of the existing services. It is very difficult for anyone to rationalize how you bring together all of those different documents that are out there and then say where will this lead us. So I think right now the whole planning effort, while very robust, is in a state of disarray.

    Mr. ORTIZ. Last question because I would like some of the other Members to ask, but one short question. Was it your agency that conducted a study about the need of the Army to add 28,000 more military personnel? I saw something like that not too long ago. Do you recall?

    Mr. WARREN. To add to the Army force structure?

    Mr. ORTIZ. For the Army, yes, sir.

    Mr. WARREN. I am not familiar with that.

    Mr. ORTIZ. I read something—
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    Mr. WARREN. We will get—

    Mr. ORTIZ. I read something about the necessity for the military because of all of the deployments—and I am talking about the Army, the need to increase the Army by 28,000 people, and here we are about downsizing again. I think that before the Administration, or anybody, introduces a bill about downsizing or base closure, we need to take a complete overview of what the needs are, otherwise this will be a never-ending problem that we will never be able to rightly address. Would you like to respond?

    Mr. WARREN. We will check on that study and provide it to the staff.

    Mr. WELDON. Thank you, Mr. Ortiz.

    Our friend and colleague, Mr. Hansen.

    Mr. HANSEN. Thank you, Mr. Chairman. I appreciate the opportunity of being here today. I hope folks realize that when Curt Weldon sinks his teeth into something, he does it all the way. He was past chairman of the R&D Subcommittee. I don't think there was a person that knew more about research and development than Curt. It is always a great pleasure to be here with my good friend Solomon, who I have worked with for a long time.

    Mr. Chairman and Mr. Warren, in my 20 years in Congress, if someone had told me there would be such a change in the way we look at the military and the way things have changed in the world, I would not have believed it 20 years ago. From Ronald Reagan saying Mr. Gorbachev take down the wall to base closings, to the many things that we have seen change, it is unbelievable to me that that has happened. In the last eight years many of us have been concerned about the many deployments, morale, modernization, quality of life and things such as that.
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    I would have never believed 20 years ago when I used to run around and look at things like the then special access B–2 and all of that kind of thing, that there would ever be the merger that we have seen in the military industrial complex. Then out of that, it kind of bothers me just a little bit—I use one of the committees I was on back in 1981 was Post Office. Everybody wanted to take over, like UPS and Fed Ex. They all wanted to take over the post office business, but do you know what they wanted, they wanted first class mail, nobody wanted revenue foregone. Is that an analogy at all? I am not asking that yet. But as I look at now what is happening in the military, people are finding themselves in the situation, everyone wants the modern stuff, the F–22, the B–2, the B–22, stuff like that. I have not seen anybody come into my office asking to do work on the B–52 or the F–4 or some of that older stuff. I think that is something we ought to look at.

    Then I just want to mention one thing before I get to this question. Years ago, as many of my colleagues may remember, after the demise of the Soviet Union, if there was a demise, we had the colonels, admirals, generals of the old Soviet Union in our hearing room 2118 of the Rayburn Building. We started real early and we went real late, and we all talked about how we were going to defeat them and how they were going to defeat us. I found that very interesting at that particular time. You know, the thing that came out of that that they were doing that we were not doing, they were doing inter-servicing. I do not know if you looked at that at all. But I look at my friend here, General Lyles, when he was Commander of Hill Air Force Base, he got a piece of action with the FA–18 from the Navy. That was not inter-servicing, that was brutal. I say that respectfully, General. It got down to the idea of what they demanded and what they did not want and what they did want.

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    I remember the last thing Colin Powell said to the committee. He said, I wish I had done—when he was Chief of Staff, he said I wish I had done more inter-servicing.

    The Department of Defense has pursued a policy of increased reliance on private sector support for weapons systems. What is your experience in looking at the interim contractors' support, contractors' logistic support and prime vendors' support agreements in terms of cost, growth and competition? Are we saving anything or are we just setting ourselves up for even greater costs in the future as these contracts become more expensive and less competitive?

    I would also like you—maybe you did not even look at this. But I would like you to hit that inter-servicing just a wee bit, if you would.

    Mr. WARREN. First of all, inter-servicing was something that we recommended in our reports that should be done. In the 1995 round, the Department took that to heart, developed some teams to try to look at that issue, but I am sorry to report that ultimately that effort broke down and that there were no actions taken in that regard. It broke down not only in the depot maintenance area, but also in the R&D world. So we clearly are on record as saying if there, in fact, would be another Base Realignment and Closure (BRAC), that would be one of the first things that we would recommend that should be done and should be looked at.

    I am sorry, on the second—your second point on reliance—

    Mr. HANSEN. The second point was—

    Mr. WARREN. Oh, the cost; yes, sir.
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    Mr. HANSEN. Yes.

    Mr. WARREN. Yes, sir.

    Mr. HANSEN. The idea of saving anything.

    Mr. WARREN. Yes, we have been attempting to look at that, but where we have been stymied is—what we are finding is that there is not good baseline cost data to determine what the costs were when we went into this particular arrangement versus what we are getting today. And this is a very complex issue, as you know.

    One of the things that really has to be worked on in this area is how do you make best use of your private sector capabilities when you are in largely a sole source environment. And that I think is the danger that has to be addressed as you move into, in essence, a shared reliance on the public and private sector for these capabilities to repair our most important equipment and weapons systems.

    So bottom line is we are having a hard time getting cost data that we can bring up to you and definitively say this is costing more or costing less. Ms. Denman has been working in detail on this and if she could just make a couple of comments, I would appreciate it.

    Ms. DENMAN. I can say that in an attempt to look at the cost-effectiveness of some of the long term arrangements within the Air Force, we have looked at 35 different systems that have been supported using contractor logistic support. What we found is that there was no baseline data and no information that either the Department of Defense or we could use to determine how much cost growth there was since the program was started and the decision was made to go contractor.
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    What we did see was a lot of cost growth, but of course, there was also some program growth, so it is very difficult to do an apples-to-apples comparison. Of the 35 systems we looked at, there were two on which there was information that we could make an analytical assessment, the C–17 and the B–2. It was very difficult to make an assessment on the C–17 because the Department did not implement the same sort of support arrangement that it made the cost estimates on some years ago.

    On the B–2, we did in fact see that there has been cost growth of 123 percent over a five-year period on the program depot maintenance for the B–2. We saw cost growth in a lot of the other areas that would suggest that it is very difficult to contain costs in this sole source environment.

    We also looked—have in the past looked and reported to the Congress on the closure and privatization of the Air Force's depot at Newark, Ohio where there was considerable cost growth; and, in fact, we said there was about a 17 percent increase in cost over the costs that the Air Force was paying when the facility was a public depot. And that took a great deal of analysis to get to that point. We tried to look at some of the other privatized facilities and the baseline data was not available. We know that the customers are paying more costs for the services that those facilities provide, but it is difficult to assess whether it is more once you add in some of the services that were not provided before by the depot.

    So the bottom line is there is not a lot of data but yet the Department is moving into a program under the assumption that there are huge savings, and so our point would be that they should be looking at some of these pilot programs and trying to assess whether or not there are real savings there. We have a second problem with those because no baseline data was established. They may achieve some savings, but the question is are they savings because of the implementation of support by the private sector as opposed to the public sector.
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    Mr. HANSEN. Mr. Chairman, may I have one quick question?

    Mr. WELDON. Yes.

    Mr. HANSEN. Maybe a quick answer.

    On the Resource Committee, we find that as we lose competition, whether it be in fossil fuels, natural gas, timber, grazing, that sometimes people have a tendency to get into a market, make it look awfully good for a few years, create a monopoly and then we have skyrocketing costs on it, which is then passed on to the public.

    In my many years in this committee and as I see the downsizing of our industrial complex, have you seen that possibility coming up or is there any red flags out there that would give you concern that that may occur as we see this downsizing and the type of monopoly coming about?

    Mr. WARREN. I mean obviously I agree that clearly is a danger; and going back to our initial recommendation of a strategic plan, I think one of the things that that plan clearly needs to do is to give some serious thought as to how do you manage in, in essence, a sole source or limited competition environment, again, with the goal to bring both sectors, public and private sectors into this process, which you need good management principles, approaches in order to guard against the very thing that you are talking about. I would be hopeful that that could be done, but to this point, that is something that a great deal of work has not been put on.
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    I would add there is one additional area that is related to this and very important to what is going on. One of the things that is occurring in the acquisition of new systems, we are not seeing a whole lot of technical data being procured along with the systems. That makes it then very difficult for the government to go back at a later point in time if they decide to recompete or to develop those parts within their own capabilities; they do not have the technical data to do it.

    So that is an example of one thing that somehow to be built into this new contracting approach.

    John—the general counsel may want to—he has worked—

    Mr. BROSNAN. Well, you know, they have the authority to buy it, the problem is the word buy, and it can be relatively expensive. And I think some of the concern has been, as far as the Department is concerned, is to procure these weapon systems for as low prices as they can; there is always a concern about cost growth, and I think the companies are obviously aware of that and so consequently, it has been a difficult thing for them, because when you spend a lot of money on data in order to do organic repair, if you ultimately do not do that, you spent a lot of money and not used it. So it is a tricky issue for them.

    Mr. HANSEN. Well, thank you, and I thank you, Mr. Chairman.

    Mr. WELDON. Thank you, Mr. Hansen.

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    Mr. Ortiz—I am sorry, Mr. Reyes.

    Mr. REYES. Thank you, Mr. Chairman.

    I guess I have—one question that troubles me is the observation that you are making that we are in a state of disarray in the context of what we are looking at and how we are working through this issue. And part of what is hard for—at least for this Member to follow through, is a process that appears to be very convoluted and very conflictive in the context of how we try to get data to evaluate, how we try to get empirical data to have any kind of ability to make comparative analysis. The only question I have is that you are in that business and if you are as confused as, you know, somebody that does not do that for a living, where do we go from here? How do we right this process that is slowly, I think, sinking a whole system and the worst part of this whole issue is that we are dealing with our national security, as far as I am concerned.

    Mr. WARREN. I had an opportunity to read some of the statements of the witnesses that are going to follow, and I was very encouraged by the fact that they are all pointing to the need to address these issues. So I mean, my point is that clearly the starting point is that there needs to be an overall effort within the Department to bring together all of the various initiatives that are out there working to address this problem. In other words, I truly believe people are working in a good faith effort within—at the OSD level and in the services, to say hey, we have to do something about this, but I think what would help that is if there was again a strategic look at this that could be driven down through the services so that there was agreement about how we were going to proceed, what the tough problems are, what policy issues we have to address and how we are going to resource that, so it can actually get done.
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    So I mean, I think that is the number one thing, let us take a step back, look at where all our planning efforts are going, see how we can bring them into a single effort that will truly take us forward with the best use of the limited resources we have.

    Mr. REYES. If I can follow up.

    There is—I mean this is not anything that has happened in the last year or so, I mean there has been plenty of time, I think, to do something along the lines that you are suggesting. What has created this haphazard environment, in your opinion?

    Mr. WARREN. Well, I think—and the Chairman mentioned in his opening statement—this has been more of a confrontational process than a collaborative process and I think that is what we need to move away from, as opposed to saying we are just going to move forward, we are going to do this, knowing full well that the Congress has a number of concerns, there will be hearings, as you have said, over the past five to six years, certain legislative actions will be taken, initiatives will be stopped or at least slowed down; and so I think this idea of coming together more collaboratively, all the stakeholders, the private sector, the public sector, the Congress, and working toward solving a very important issue. And that is what has been missing, it has been more of a chess game than say a relay race.

    Mr. REYES. Thank you, Mr. Chairman.

    Mr. WELDON. Thank you, Mr. Reyes.

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    Mr. Chambliss.

    Mr. CHAMBLISS. Thank you, Mr. Chairman. Let me add my accolades towards my colleague, the Chairman. I have had the pleasure of serving for the last six years on the R&D Subcommittee under his leadership and he has provided strong leadership in the Congress and particularly on the Armed Services Committee; and I promise you, we are going to raise the profile of this issue to the level which it deserves, under Mr. Weldon's leadership. He is that kind of leader and my friend, Mr. Ortiz, who is my very dear personal friend and colleague, I want to thank you and the folks in Corpus Christi for being such great hosts to us. You all were very generous to us last night and we are glad to be here. The only thing is we did not have grits on the menu this morning, but we are going to work on that.

    Mr. WELDON. What are grits?

    Mr. CHAMBLISS. I always have to explain these to my Yankee friends. [Laughter.]

    Mr. CHAMBLISS. Mr. Warren, also let me pay you a compliment. You have done great work on this issue and you have issued many strong reports on the depot issue, some of which we agree with, some of which we have disagreed, but you have been fair; and I particularly want to commend Ms. Denman. She has been a real war horse on this issue and has done a great job of delving into what the real facts are, and often I know it is difficult to find out what those real facts are because it is a moving target.

    The issue of core is at the heart of the depot issue and I know you all have experienced the same difficulty and frustration that we on the committee have in trying to get, particularly in my case, the Air Force, to come up with a definition of core. And I will have to tell you that today, and now that I am in my six and a half years of serving in Congress, I cannot tell you what the definition of core from the Air Force perspective is.
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    But the one thing that I do know is that you have stated in your report an accurate statement when you say that there has been an increase in private resources going into maintenance capability and a decrease in public resources going into maintenance capabilities. Have you seen a likewise change in the core capabilities or the core assets from an Air Force perspective during that same period of time? And I will particularly refer to changes in the C–5, for example, or other airlift mobility aircraft or in the case of the Marine Corps, the five-ton vehicle.

    Mr. WARREN. Yeah, I think the change—it is not so much a change, it is not—it is what is not coming in. The change is that if we go back into the 1980s, let us say, you were seeing new capabilities coming into the depots as new weapons systems were being introduced as a result of that build up and as a result of upgrades to weapons systems.

    What you have seen during the 1990s is that those same new capabilities, although there has been clearly a reduced procurement and acquisition budget, those same capabilities are not appearing in the depots in the way that they did in the 1980s. So it is not so much—it is what is not coming versus, you know, what is there now.

    Julia, if you would like to expand on it.

    Ms. DENMAN. There has been a reduction in the core capability in the Air Force, a fairly significant reduction since it first started producing core; and that reduction is because the Air Force is the only service that does not compute core on a systems basis, but rather on a commodity basis. So the Air Force might say, for example, with regard to strategic lift, that its core capability can be maintained by having aircraft such as the C–141; and that it does not need to have airframe capability for the C–17. So the question is does capability that you have in a depot for an older system allow you to provide the maintenance and overhaul that might be required in an emergency situation? One might look at the C–5, which was transferred by the Air Force from San Antonio to Warner Robins; and as I recall, it took about two years to make that transition. So if having capability over a two-year period is good enough, then having core on one aircraft and not the other might be—it is really definitional in terms; but the reduction has been, I think, from about 27 million to 18 million in core in the Air Force.
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    Mr. CHAMBLISS. Well, in the Air Force, we have got basically the C–5, the C–130, the C–141 and the C–17, which are our major airlift weapons systems and the C–5 has always been a core asset. The 130 has always been a core asset. The 141 has always been a core asset. Then we get into the C–5 competition and just prior to that, all of a sudden they designate it as a non-core asset so that we can bid it for competition. Now either you need that asset to transport troops around or you do not need it. The 141 has always been core, it is being replaced by the C–17, which all of a sudden there is no determination on whether it is a core asset or not. There is just a real moving target; and I am going to give General Lyles, as he knows, an opportunity to talk a little bit about this, but I want to make sure that we highlight it in your portion of the testimony also.

    And moving further along that and what you just said, Mr. Warren, with respect to the moving of assets, new weapons systems into the depots, into the public depots, is it not correct that the problem we have got with 50/50 is because we have not moved new weapons systems into the public depots?

    Mr. WARREN. In summary, yes, but it would not always necessarily have to be the entire weapons system, but what has to be brought in, as Julia was describing, these capabilities that would allow you to repair that system should there be a contingency, should there be an emergency. And that is what is not there. You need new test equipment for new avionics, technology is changing, you need that new training for your staff. Those are the things that are not coming in.

    So if the bell were to ring and they said okay, we are going to use you now, the people would say we just cannot do it because we do not have the things that we need, we do not have the training.
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    So I think that is the issue, as we understand it.

    Mr. CHAMBLISS. What I am hearing is that the Air Force has a three-depot strategy for the long term, but they have not made the commitment to ensure that the capability to do the work on new weapons systems is there.

    Mr. WARREN. Those are the questions we are raising. And again, as you said, it is complex and it is unclear, but yeah, that is the issue.

    Ms. DENMAN. If I might, sir, for example, the last time we looked at a database the Air Force maintains to look at current systems that are undergoing source of repair, about 75 percent of those decisions were to go to the private sector. As I understand, the Air Force recently had a meeting to try to identify some systems that had previously been identified to go to the private sector that might be transitioned organic to help with the 50/50 situations; and weapons systems were not identified because they were either said to be commercial equipment, non developmental items, or they were already identified for long term contractor support.

    So the problem in essence is if you have—cannot identify systems to transition that are already out there, what about those that are new, and the indication is that all the new and upgraded systems are going to the private sector.

    Mr. CHAMBLISS. Have you all seen any indication in any study that you have done over the last 10, 12, 15 years, however long you have been involved in studying this depot maintenance issue, and particularly the privatization issue, have you seen any indication where there have been positive savings by the transferring of work from the public sector to the private sector?
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    Mr. WARREN. I think in fairness, we are just starting; we have a detailed piece of work underway on that. I would really like to hold on that until we can come back to you with that detailed work. We just do not have much.

    Ms. DENMAN. I cannot give you dollar savings. What I can say though in reference to Chairman Weldon's comment in the beginning, where you would get savings is if you have a facility that the private sector is doing production and they also come into that facility and do some maintenance, which clearly frequently happens when you have a system that is just phasing into the inventory because you do not have that many pieces of equipment to repair. So they would be taking some of the overhead costs of that production facility and splitting it among additional repair items that are being brought in. And that is an acceptable transitional situation. The problem becomes as you get more things that need to—commodities that need to be repaired, you really lose the ability to use that. And there is a significant difference between manufacturing capability and repair capability when it is optimized.

    Mr. ORTIZ. Will the gentleman yield?

    Mr. CHAMBLISS. Sure.

    Mr. ORTIZ. How many of the 73 percent that you are talking about meet the criteria that you are talking about?

    Ms. DENMAN. I am sorry, sir?

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    Mr. ORTIZ. Seventy three percent goes out, right? But you say that there is a facility that is already in existence, maybe this is where they can save money. But how many places like that of the 73 percent are there?

    Ms. DENMAN. I am sorry, sir, I do not understand the question.

    Mr. ORTIZ. You stated that 73 percent goes out to the private sector and you said that there is a facility that might be, an existing facility, available and this is the areas where you save money, right?

    Ms. DENMAN. Oh, what I was saying, sir, is when those systems are being manufactured, that if in the initial phases of operational support, if they bring the repair into the manufacturing facility, they are reducing the overhead.

    Mr. ORTIZ. Because the depot is not—

    Ms. DENMAN. Well, the depot does not have the capability to do it; it is a new system and capability has not been established in a depot. Clearly a depot could gain that capability.

    Mr. ORTIZ. If we had the capability.

    Ms. DENMAN. If it had the capability.

    Mr. ORTIZ. And this is the core of the problem.
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    Mr. WARREN. Absolutely.

    Ms. DENMAN. Right.

    Mr. ORTIZ. For many years we made sure that the depots did not have the capability so that most of the work can go to the private sector.

    Ms. DENMAN. Well, generally speaking, you would not establish capability in a depot until you made the decision that the repair would be done in the depot, because it is an expensive undertaking to do that.

    Mr. WARREN. Let me say that I think that is one of the key things that we need to look at from a policy planning standpoint, how do we—that is the old paradigm, how do we move into this new paradigm and come up with a way to provide those capabilities, in essence, to both sectors. Now I do not have the answer to that, but it is clearly something we need to look at if we want to move forward with joint capabilities, public and private sector that can meet not only the needs that we have for our older systems, but also the needs we have for our newer systems.

    So that is a central issue that needs to be looked at.

    Mr. ORTIZ. I thank the gentleman for yielding.

    Mr. CHAMBLISS. If I can just close with one quick question, I think it will require a short answer and that is going back to my original question on have we actually saved money by going to the private sector, the one Air Force facility that does come to mind that I think you do have the numbers on is Newark; and is it not, in fact, the case that at that one facility, we know that when we privatized Newark, it cost the Air Force money?
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    Mr. WARREN. Yes, sir, that is correct. We have reported that, yes, sir.

    Mr. CHAMBLISS. Thank you.

    Mr. WELDON. Thank you, Mr. Chambliss.

    Mr. Rodriguez.

    Mr. RODRIGUEZ. Thank you, Mr. Chairman, let me start by first of all indicating that I am real pleased to be here. I know that when I first got elected on a special election, it was a 45-day hard working election as you all know; and I arrived in Washington two days after the election, I got sworn in, that same day I showed up in the Armed Services Committee and there was three tiers of people that I saw up there and they were trying to find a chair to sit me somewhere down there, but it was always good to look up on the top chair and see that Texan, Solomon Ortiz, up there, so a friendly face out there. I was not sure where Republicans or Democrats sat, but I knew Solomon, so I was real pleased to see him up there. So I am real pleased to be here in Corpus.

    Mr. Warren, let me first of all congratulate you and thank you for your testimony and your report. And I wanted to kind of also—you have talked a little bit about this whole process; number one, you have also indicated the need for additional data, the fact that you still cannot make a distinction. You talked about a situation that is confrontational, which I agree with you. I know the—and one of the things that is still out there is the private sector comes to us and says we are not competing on a level field, the public sector comes up here and says we are not competing on a level field. So we are hearing it from both sides in terms of—yet still not comparing apples and apples, and I gather GAO is having the same difficulty in being able to determine that.
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    We talk about the questions regarding core work and I know that the 50/50 is an arbitrary figure and it is something that we tried to define and I would just like to think that the way we define things is those things that are critical and necessary, those skills that need to continue to be there no matter what, in case we find ourselves in a bind, that we need to have those skilled workers to be able to produce things.

    And I want to throw another little caveat. I know we are going to have General Coburn and I do not want to—and I know in his testimony he is going to—he has provided the fact, and I have heard it before, because every single federal agency from the State Department to the Department of Defense is expecting to almost have one-third of its people retiring. We expect, according to the data on just the Army, I think the General said that of the blue collar workers, 63 percent by 2005 are going to be looking at some retirement, that the average age is about 49. So when we look in terms of developing those skills, we have got a more serious problem just in terms of even the private and public sector. I wanted to see, I know from a gap perspective how you can come to grips with that and you talk about one of the difficulties that exist and that is making sure that we have the expertise, making sure that they begin to work together. I know that the whole concept of teaming and working cooperatively, maybe the private sector in the depot in conjunction with the public sector and how they can come together because I know that that has not, you know, jelled yet.

    So I was going to ask you for your comments in those areas.

    Mr. WARREN. We have—the General Accounting Office has identified human capital as a high risk area across the entire federal government, so you are exactly right. And it goes to the aging workforce, the downsizing and the way that has been approached. In the depot specifically, our data shows that about 50 percent of the current personnel are going to be eligible to retire in the next five years. So it is a tremendous problem.
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    Again, there are no easy answers here, but what we have suggested again is a strategic approach to looking at this; and I would tie it back into what I talked about the strategic plan, before you can decide what you want your workforce to look like, you need to have a clear vision of what that workforce is going to be. And I would maintain that that still has not been clearly articulated and it is central to starting to solve this problem.

    Once that is done, then you can lay in a strategic plan for your public depots and related into your private sector to say okay, here is our mission, here is our vision, now we are going to align our people to match up with that, then we are going to go out and seek the talent that matches up with that vision, that matches up with the processes we have in place. We are going to hire, we are going to come in and develop incentives where we need to develop incentives, put forward—some of those may even come to Congress in terms of if we need some special authorities to do some things to implement a rational human capital strategy and then put in a performance-based culture where everyone in that depot system understands what the mission is, what the vision is and they are working towards achieving that.

    Again, I cannot emphasize strongly enough, I think that is what is missing now and again, it goes back to it has been more of just simply a survival issue and how do we, for lack of a better word, fight over the various workloads as opposed to a strategic view of how do we provide readiness and sustainability to the military forces from both sides. So if we can get to that, I think it would be a giant step forward.

    Mr. RODRIGUEZ. I think that is one of the key areas because as we move forward, what you have indicated is that if the private sector has a contract, those people are going to be somewhat the ones that are a little more skilled or knowledgeable about that particular work. And so for them to compete with the depot is going to be very difficult or create a burden or a little more problem in terms of cost, because there is another added cost and that is of training that is needed. And so somehow we have got to come to grips with that and I want one more time to follow up on it. In defining core, would it be appropriate to look at both the private sector work that is already being done in the depot, as considered part of the core work, or should it, you know, be something that should not?
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    Mr. WARREN. If I could let Mr. Brosnan comment on that, please.

    Mr. BROSNAN. The way the core statute is written, you would have to—the core work has to be performed by government employees and it has got to also be done on government facilities, so there is definitely a dichotomy right in the statute there.

    Mr. RODRIGUEZ. So if we know that 50 percent are going to be retiring in the next five years, 50 percent, that is half of all the people out there, we have got a problem. We have got a real problem and part of it is budgetary—and going into the questions that I had, how much of those would be statutory problems that we have to deal with? Any recommendations in that area?

    Mr. BROSNAN. Well, one of the things that Mr. Warren was talking about, the confrontational attitude that has prevailed in this problem over the last decade or so, I think a good illustration of that is somebody to take a look at Chapter 146, which is the section of Title 10 that deals with this area as well as outsourcing in general, and I think it reflects the conflict between Congress, to a certain degree, and a department as to how these things should be allocated, how these things should be done.

    The way it is set up now, it is fairly rigid in some areas like the 50/50. Core allows a lot more discretion on the part of the Department, but as the testimony here, or your statements, indicate that there does not seem to be a consensus on that. I would think that if we—if the parties could get together a bit on this, maybe another thing that would be appropriate is for everybody to take a look at that chapter and to see what things could be changed in order to make this process a little easier, as I think some of the difficulties actually are caused by the section itself, by the chapter.
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    Mr. RODRIGUEZ. Thank you very much.

    Mr. WELDON. Thank you very much, Mr. Rodriguez.

    Mr. Sandlin.

    Mr. SANDLIN. Thank you, Mr. Chairman. And we do appreciate you conducting this hearing in Texas, and we appreciate Mr. Ortiz for including us here. It is a very important issue for many of us and we appreciate our guests today.

    Thank you for this excellent report, I found it very useful. Many of us view our public depots as a very critical and necessary part of national defense and I was particularly interested in your comments on page 2 and page 11 of your testimony where you indicated that contractors' share of depot maintenance funding has increased by 90 percent while the military depot share of funding has declined by six percent, although workload production data is not available for contract work, which I found to be very interesting. The military depots' production hours are down 64 percent during this period.

    Since competition and efficiency seem to be the issue de jour, in assessing the long term viability of our depots, I am concerned about our ability to modernize those facilities and still be competitive; and since both modernization and competitiveness are important, what would you recommend as a policy to address that concern?

    Mr. WARREN. Again, I think there is a variety of things that need to be done, but for example, one key thing goes back to the technical data, there has to be some way that we can work out in the contracting process that will make that technical data available to both public and private sector so that in the future if there is, in fact, a need to bring that workload into a private facility, it can be done without great cost to the government and with ease to those managers that would have to deal with it. I think that is a very important area in that regard.
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    Mr. BROSNAN. I have a comment on that. The issue of technical data in the contracting area has been a contentious one for years and while I certainly agree with what Mr. Warren said, the difficulty is that you are talking about proprietary information that a contractor has developed along with as he is developing his weapon system and it is something that under—certainly under the best of circumstances, they are going to want compensation for. It is a product of their inventiveness, and it is going to be a difficult problem to run up. But there is no question that more attention should be paid to it and a judgment made as to whether or not it is worth the cost.

    Mr. WARREN. But for example, for the Apache helicopter and the Long Bow, we have purchased—the government—very little technical data; and as a result, whenever a problem occurs that requires—and a contractor is not available, with diminishing contractor base to provide a part, the government in essence is stuck in terms of what it does. It has to go back and re-engineer for example, and those things are very inefficient. So John and I are really agreeing here; what I am saying is that has got to be part of the contracting strategy and somehow that has not been focused on as we have made this policy shift.

    Mr. SANDLIN. Why—I am just interested, why was the workload production data not available for contract work?

    Ms. DENMAN. The contractors' report dollars and they are responsible for providing a service. They do not provide information regarding the number of hours that it takes them to do an amount of work. Therefore, there is not accounting of the number of hours that are required.
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    Mr. SANDLIN. Well, that makes sense on the comparison, although then it makes it very difficult to compare efficiencies between the public and private and what is happening in the bidding because you do not—you are comparing apples to oranges, correct?

    Ms. DENMAN. Yes, sir, it does. There is less data available about contractor provided services.

    Mr. SANDLIN. I wonder why that is? We know, do we not?

    Mr. Chambliss question about the 50/50 split and my understanding is that DOD has previous requested elimination of 10 USC 2466 requiring that split. What do you think the wisdom is of that request and that policy?

    Mr. WARREN. Well, I think it goes back to the issue that we have been talking about, core obviously. The Department believes, I think, that they could do less core work in the public depots and so therefore, the 50/50 in essence gets in their way of doing that. However, the Congress has repeatedly asked for a clear definition of core workload and to this point in time, I do not think there has been a satisfactory answer to that from both sides. So we have been at this confrontational—in this confrontational process and so that is really at the heart of what is going on there.

    Mr. CHAMBLISS. Will the gentleman yield?

    Mr. SANDLIN. Yes, sir.
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    Mr. CHAMBLISS. It is obvious, they do want to eliminate 50/50, and if you eliminate 50/50, then they do not have to give us a definition of core. Is that not fair, Mr. Warren?

    Mr. WARREN. Yes, sir.

    Mr. SANDLIN. I noticed in your testimony, you referred to management weaknesses in the area of recapitalization. Could you comment a little bit on that?

    Mr. WARREN. In general, what we have seen there is a very small investment in recapitalization of the facilities. Most of the money that has been spent during the 1990s was to update and purchase old equipment or replace old equipment. Again, going back to the point we discussed, very little new equipment comes in. I think this is very important for everybody to understand, is that the majority of new equipment and capability that comes into the depots comes through the acquisition process. It does not come through, in essence, the military materiel commands (MC). It does not come that way, it does not come through O&M dollars. It comes through your acquisition process and to the extent the acquisition process does not feed those new capabilities into the depots, the depots are in a very difficult situation.

    And again, this is another area where there needs to be, I think, a great deal more collaboration. The managers of the depots are basically left with managing facilities and capabilities that they have in essence no control over the amount of new items that are coming in. Again, it is one of those areas where more work needs to be done. They need to kind of get out of the silos, work together and say we have got a common goal, let us get this done.
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    Mr. SANDLIN. Just a couple more questions and I will be complete. I tell people I am a Baptist and a lawyer, so I can talk until the Second Coming. But I will try to move quickly.

    I appreciated additionally the comments by Mr. Chambliss on whether or not any savings have been realized as a result of privatization or closures. My information that I have previously gotten indicates that while we can substantiate tremendous costs involved in privatization and closing, that we do not have any firm information on any sort of savings. Now before we even consider or talk about or let escape from our mouth the word BRAC, do you not think it is important that we have a complete set of data on the alleged savings?

    And I also would like to comment that I think it is important that we remember in accounting and in the Congress that we are not in a for-profit mode, we are talking about national defense. And it is not always something about just saving money, it is about protecting the country. And I think it is kind of ridiculous to talk about BRAC or closures or cutbacks when we do not even know what these alleged savings were from years ago.

    Could you comment on that?

    Mr. WARREN. We have looked at that quite a bit and there are a couple of important points. Number one, clearly, there is a significant up front investment in making the closures. However, our work has shown that after that investment is taken care of, there are opportunities to save substantial amounts of money. Where we have had difficulty from an accounting sense is to go in and give you really a precise number. However, we do feel confident that there are savings coming out of the base closure process.
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    But early on in 1988, for example, we were going to sell all these things and we were going to make money and that was going to be enough to take care of the investment costs. And then we migrated over time to not selling anything and giving everything away. And so it took a long time and it is still taking a long time to pay those costs.

    But I would be remiss if I did not say that there are savings there. There is another point on that, that there is a cost that they do not capture and that is once a facility is closed, there are costs that go away in the budget that would have had to have been there to maintain that facility had it stayed open. Those are not counted at all in the savings equation.

    Mr. SANDLIN. What you are saying though in your accounting procedures, when you are figuring these savings, that you are anticipating the sale of equipment, the transfer of property and income, but in fact what has happened as a practical matter has been that equipment has been either given away or disposed of in some other way or sold at greatly reduced prices. So your accounting, while it looks good on paper, has not really worked out in practice; is that not true?

    Mr. WARREN. Not as it has evolved, that is accurate, sir.

    Mr. SANDLIN. And you also do not figure out a dollar value, do you—maybe you do—but a dollar value of the expertise of the employees. For example, at Red River Army Depot in Bowie County, the average tenure there is about 23 years. There is a money value there, and there is a national defense value there that is hard to compute as compared to a private contractor that has someone that comes in and has been working six months. And you do not put a money value in your savings on that change, do you?
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    Mr. WARREN. No, sir, we have not, but that is a real—that is certainly a qualitative factor.

    Mr. SANDLIN. And you would agree that is just as important as the value of some property that you are transferring off or giving away.

    Mr. WARREN. It is clearly important that we not lose the essential capabilities that we have to do the work that we need to do; yes, sir.

    Mr. SANDLIN. In fact, the employees are probably absolutely the most important asset of these depots, would you not say?

    Mr. WARREN. Yes, sir.

    Mr. SANDLIN. Thank you. No further questions, thank you, Mr. Chairman.

    Mr. WELDON. Thank you, Mr. Sandlin.

    Mr. Warren, I want to thank you and your colleagues for appearing today. Your testimony, and more importantly your work, is extremely helpful to us. And with that, we would acknowledge your statement, which will be a part of the record; and we will now call up our second panel.

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    While our second panel is coming up—and these are the key leaders of the various services who oversee the various commands; and we have a distinguished group of military leaders that are here with us, four of them. I would like to take a moment and talk to the audience about the hearing process and why we are doing this.

    How many are here for the first time at a Congressional hearing? How many have never been to a Congressional hearing before?

    [Show of hands.]

    Mr. WELDON. Let me just explain to you, you might wonder what is going on here and how is this organized. As you know, we have three separate branches of government—the Executive Branch, which comes under the President, the Commander in Chief, and is responsible for requesting money for an annual budget. The President does not have the power to levy taxes nor set the parameters on the programs or the dollars allocated for the programs. Only the Congress can do that. The purpose of the hearing is to give the Congress the ability to question the Administration and to start off by bringing in an outside independent group—in this case, it was the General Accounting Office. Mr. Warren represents the General Accounting Office, so he is tasked frequently by the Congress to look at our Pentagon, look at the way it is operating and to independently assess whether or not that operation is being conducted in the proper manner. We bring the GAO into a hearing like this, and their job is to offer us an independent review.

    The second panel today are the leaders of the military who are responsible for the oversight of material and systems and maintenance.
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    The third panel will be basically those who are out there running our depots and they are from around the country and their job is to do the day-to-day operations.

    Now you might ask the question, well what about the workers, where are they? Well, the people that you are seeing in these next two panels oversee the workers, but I want to assure you that we are also very much concerned about the perception of the work force.

    At a panel that I chaired last week, in fact, I had the President nationally of AFGE testify—the American Federation of Government Employees. As you know, most or all of our depots are unionized and we think it is very important that the union leadership have a chance to represent the workers and the perceptions and the substance of what is happening to them. And while we have no witnesses from the unions testifying today, we do have at least three union leaders here, maybe more. I want to acknowledge the three, ask them to stand, and let them know that we invite their input. They can give us written statements. I can tell you your Congressman is very much in tune with the work force, and let you know that we are very sensitive to the position of the workers.

    First of all, from AFGE, we have Joe Gonzales. Joe, if you could rise so we can acknowledge you. Thank you, Joe.

    From the International Association of Machinists (IAM), we have Juan Gonzales. Juan, if you could rise. Thank you, Juan.

    And from the National Federation of Federal Employees (NFFE), we have Robert Livengood. Robert, if you could rise. We thank you.
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    Are there other union leaders here that I did not acknowledge?

    [No response.]

    Mr. WELDON. We want to thank you for your presence, you are a very important part of this process. We do listen to you. I would just, while I have the opportunity, request of you to do one thing, and that is to ask your internationals to work with us in concert to deal with the issue of declining defense dollars. In fact, over the past ten years, you have lost one million of your card carrying colleagues, who have lost their jobs because of cuts in defense and aerospace industry functions. And if we are going to win this battle, we have got to employ the labor movement to not just tell us what is wrong with the way we are operating, but to get proactively involved with their families and their members to make sure that Members of Congress across the country are supporting the resources necessary to run an effective military. And so the unions can play a very vital role in that, and so I would request of you to assist us. We thank you for being here, you are an important part of the hearing process.

    With that, we will go to our second panel. I cannot tell you what an extremely distinguished group of leaders this is. These are America's heroes. These individuals have distinguished careers in a number of different command assignments where they have worked tirelessly on behalf of the men and women who serve this country and on a number of missions that the Commander in Chief has asked them to perform during their lifetimes.

    We are extremely pleased to have them. From the Army we have General John Coburn, who is the Commander of Army Materiel Command, a four-star general. We are very honored to have you here, General Coburn.
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    From the Air Force, one of my long time friends and associates, former Director of the Ballistic Missile Defense Organization and now the Commander of Air Force Materiel Command, General Les Lyles. General, it is good to have you here.

    From the Navy, we have Commander Vice Admiral Joe Dyer. Joe is an outstanding leader in the Navy and we are pleased to have him here as the Commander of Naval Air Systems Command.

    And from the Marine Corps, an equally respected leader, Major General Paul Lee, who is the Commanding General of the Marine Corps Materiel Command.

    So we have before us the four key people who act on behalf of the Commander in Chief and the service chiefs in running the day-to-day operations relative to our materiel and our support maintenance operations.

    So gentlemen, it is a pleasure to have you here. Your statements will be entered without objection as a part of the record. We would ask you to try to limit your comments so we have time for questioning, and General Coburn, we will start with you.


    General COBURN. Good morning, Mr. Chairman and other distinguished members of the committee. I thank you for the opportunity to address depot maintenance issues with you this morning and I welcome you to Corpus Christi Army Depot, a center of excellence for helicopter repair.
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    I would like to start by thanking each of you for the continued support that you give to America's Army. Your Army is unquestionably the most powerful Army in the world today and is fully prepared to fight and win the nation's wars largely because of your support and your Army thanks you for that.

    My message to you today is a three-part message. The first part of the message is that war fighting is all about risk; and, in my judgment, we must always have a viable organic capability for core systems that assures immediate response and flexibility in the event of conflict. Our depots provide that capability and thus help mitigate risk.

    Put another way, we cannot assume that required capabilities may be there. Rather, we must assure that the capabilities we need are there. Thus, I believe that our depots are a national asset, that they are essential for war fighting and that they are essential for national security.

    The second part of the message is that we must continually modernize our depots in a way that promotes efficiency, allows them to compete and maximizes partnering with industry. This modernization includes industrial equipment and tools to be sure, but it also applies to our aging facilities where we have continuously deferred revitalization in favor of near-term readiness, which causes the problem, of course, to compound with each passing year.

    Meanwhile, our commanders can only fix those things that are broken. They fix those things that are critical deficiencies, such as broken water lines, sewer lines, heat and electrical failures. With current funding levels, it will take your Army many years to revitalize our infrastructure.
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    The third part of the message is that we are in a war for people, a war that has many aspects; and in that regard, I think it is significant to note that our DOD civilians are special. They, like those of us in uniform, raise their right hand, swear to support and defend the Constitution of the United States just like we do. They love their country just like we do. Many of them serve in the Reserves. Many of their fathers and mothers worked in our depots; in fact, many of their grandfathers and grandmothers worked in our depots. So we have a highly dedicated workforce, and I would suggest to you that we have a very flexible and multi-skilled workforce as well because the challenges in the depot maintenance environment in the last several years have forced us to develop employees that can do more than one job. However, they are also an aging workforce. Here at Corpus Christi Army Depot, for example, we have more employees over 70 than we do under 30. In fact, I don't think we have any under 30. Thus, we have to develop and support programs that allow for both recruitment and retention and we must restore the faith our workforce has in us that has been eroded over the last decade because of the depot maintenance environment.

    So that is the message I have for you this morning. It is a message that you are already aware of for the most part; it is a message loaded with challenges, but you can be sure that your Army, to include your depots, with your help, will not fail the American people and we will be ready to face whatever challenges our nation may face.

    Again, thanks, Mr. Chairman, for allowing me to appear before you today and I look forward to your questions.

    Mr. WELDON. Thank you, General.
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    General Lyles.

    [The prepared statement of General Coburn can be found in the Appendix.]


    General LYLES. Mr. Chairman, members of the committee, let me also thank you for inviting us down here to participate in this hearing, this very unique and very, very appropriate hearing. I want to thank the Chairman, certainly thank Mr. Ortiz for agreeing to do this at this particular venue, and thank General Coburn for being one of our hosts here today.

    I would be remiss if I did not also pay thanks to each one of the members of this committee, all of whom I have worked with in different capacities in the past, to thank you for your continuing support to the men and women of the Armed Forces. We could not do the things we are doing today without your continuing support, and we mean that from the bottom of our hearts.

    Mr. Chairman, I cannot emphasize strongly enough or emphasize with enough enthusiasm what the organic depots mean to the United States Air Force. They are important to our war fighters, they are important to our readiness, they are important to everything that we do. Our depots exist to provide a rapid response source of repair, to provide overhaul, to provide modification capability of all of our war time task systems. They are a risk mitigator, as mentioned by General Coburn. We have the same sort of venue and respect for that, against the uncertainty of war and contingency operations, against technical surprises, against the loss of commercial support and certainly against diminishing manufacturing sources. For us in the Air Force, our recent experience in the air war over Serbia, Operation Allied Force, really points to us what the value of the depots are.
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    As you well know, while we are in the process of closing two of our depots, San Antonio Air Logistics Center (ALC) and the Sacramento Air Logistics Center, all of our ALCs surge their operations by accelerating aircraft overhauls and producing over 60,000 additional parts to support their war effort.

    During Kosovo, our men and women in our depots worked 500,000 extra hours to provide support to our war fighters. Ninety three percent of our parts, thanks to the depots, were provided to our forward bases in just three and a half days and our weapons systems averaged 92 percent average mission capability rate, which is the very highest we have seen in the last 10 or 15 years. They did that because of the depots.

    Our air war over Serbia one year report, which just recently came out, concluded, and I quote, ''The air war proved our logistics systems work and they work very, very well.''

    Mr. Chairman, recognizing the importance of sustaining our organic depots, we are just not realizing this for those who are here today. This is not just my report, it is not just my assessment, it is the assessment of the entire leadership of the United States Air Force. As a result of that, our Secretary of the Air Force, our Chief of Staff for the Air Force have personally chaired, on an annual basis for the last three years, a major review of all of our depot activities. These major planning sessions have been very, very important to the support and the needs of our depot.

    The conclusions reached at those sessions is that the depot organics maintenance is necessary and it is a core competency for the United States Air Force. All of us believe in that and all of us are trying to make sure we support that in everything we do to support our depots. In recognition of this fact and coming out of those strategic sessions that we have held the last three years, the Chief of Staff and the Secretary have issued a policy letter that defines what the depots mean to the United States Air Force. Let me just quote one statement from that policy. ''The Air Force depot strategy ensures that we possess an organic core capability that is sized to support the war planning scenarios for the United States Air Force.''
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    Notwithstanding this declaration of the importance of the depots, for the last 10 years we have gone through a very trying period. We have had significant challenges in our Air Force depot community and those challenges have been very, very severe to us. The greatest challenge has been to minimize the readiness impacts as a result of closing 40 percent of our organic capability. The depot closures coming out of the BRAC round in 1995 have been tremendous, but we have managed to contain those and managed to address the needs of our war fighters in spite of that downsizing.

    We have tried not to have any impacts on readiness. We have not always been successful in that; but we think we are doing the right kinds of things, and I am happy to report we are just at the very end of the complete transfer of workload from the two depots that have closed to the three depots that remain.

    Mr. Chairman, as you know, and certainly as this committee knows, we in the United States Air Force have had difficulty in meeting the 50 percent mandate coming from Congress in our depot structure. We were not able to do that in fiscal year 2000, and we are not optimistic that we will be able to meet the 50 percent limit for the year 2001. There have been many causes for this, not the least of which is adjusting to the workload transfers that have come out of the BRAC closures, bridge contracts, acquisition strategies; a wide variety of things have taken place that have led us to this particular posture. I think now we are trying to ensure that we have the right sort of strategy and the right sort of processes to address this particular problem, and I am confident that we will be able to address this problem starting in fiscal year 2002.

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    We are currently re-evaluating the condition of the existing infrastructure in all of our depots. We are looking at the resources that are necessary to do the workload to support our war fighters and we are looking at the problems that have caused us to miss the 50 percent mandate—50/50 mandate.

    The result of this evaluation will be both a short and a long term strategic plan for the United States Air Force's depots. We have just completed the short term plan, we are in the process of staffing that right now; and that plan is to look specifically at the efficiencies and the productivity necessary in our depots to ensure that we can support our near term current war fighter requirements. The long term strategy is literally focused on building a modern and a robust depot structure to meet the needs of the United States Air Force and to meet the needs of our war fighters.

    The implementation of both of these strategies are going to require commitments on the part of the Air Force in terms of dollars. And I can tell you now that with all the other bills we have on the plate, we know we are going to need the continued support of Congress to be able to do everything that we know we have to do.

    Mr. Chairman, one other challenge is very similar to one described by General Coburn. It deals with our experience resources of our people. We need to ensure that we are doing everything we can to support them. We have had shortfalls and we have had drawdowns, and we know that we are facing a crisis, as I define it, in making sure that we have the right kind of people with the right kind of skills to do the job that is necessary in each one of our depots. We have been working on this issue across the board in Air Force Materiel Command. It is not just affecting the depots, it affects every part of our activities. And workforce shaping, which is what we describe it, is a major initiative that we have been addressing both internal to the Air Force, internal to the Department of Defense and with the support of Congress, to try to address the problem.
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    Things such as recruitment bonuses, special salary rates, streamlined hiring practices are areas that we need to address and we need your help to make sure we can solve this problem. We have gotten great support from the Congress over the last year in addressing this area. We have had legislation provided from Congress, from all sectors, to try to help address the problem and to make sure that we are doing the right kind of thing to support our people. But we are going to continue to need your support as we go along through the outyears.

    Mr. Chairman, in closing, we have experienced some major changes in our depot structures within Air Force Materiel Command, but there is one truth that remains and that truth is that our depots are an essential portion of our core competency for the United States Air Force. And we are doing everything we can to make sure we remember that and we protect that resource and we do not back away from it.

    We are dedicated to improving the efficiency at our depots. We are dedicated to reducing the cost of operations; we are dedicated to modernizing our core infrastructure and to ensuring that we have a highly trained and a technically capable workforce. And if we follow the strategic road maps that we are laying out for ourselves, if we can do that even though we know there are going to be resources required to make that happen, I personally believe that we will be successful in protecting this valuable capability.

    And as we work through the strategic development, we know we are going to need your help as we have had in the past; and I look forward to working with you to make sure that we do the right thing for our depots, the right thing for our people in the Air Force and certainly the right things for this great capability.
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    Mr. Chairman, I thank you for this opportunity. I look forward to your questions and look forward to working with you to solve this particular problem.

    Mr. WELDON. Thank you, General Lyles.

    Admiral Dyer.

    [The prepared statement of General Lyles can be found in the Appendix.]


    Admiral DYER. Thank you, Mr. Chairman and distinguished Members. I too am proud and privileged to be here with you today. My family, however, is from northern Georgia and from North Carolina, so I am not only considerably less eloquent than the two general officers that preceded me, I am a good bit slower.

    So I will tell you by way of extension from General Coburn's remarks that in the United States Navy, we view the depots critical to our war fighting capability. It is a strongly held opinion that not only extends to war fighting on those occasions when we are called to do so, but extends also to safety and to logistics and engineering management. It is the depots where we go when we have to have answers of balancing operational imperatives, logistics needs and critical safety of flight.

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    Several years ago, our Navy undertook positive steps to develop an industrial strategy of defining core requirements and eliminating excess capability. We closed three of our six depots, as you are aware.

    We are using the private sector for non-core-related work, where it makes good business sense. Complemented by our sister service aviation depots, each supporting a unique suite of aircrafts and weapons, our Naval Air (NAVAIR) depots are fully integrated industrial activities offering collocated manufacturing, repair, modification, logistics expertise as well as engineering, as I said before. The three depots that we work day to day are Jacksonville, Florida; Cherry Point, North Carolina; and North Island, California. We also have repair facilities in the Pacific and in Europe.

    We operate under a corporate model and we have been pursuing for a good time the very best business practices to leverage the best of what industry can do and the best of what we can do with organic Navy.

    Together, we provide a virtual, single global provider of top quality, best value industrial practices. Identifying core capabilities and requirements has effectively balanced our workload between public and private sectors. This has brought stability to both sectors, our workforce and the undertakings associated with both today and tomorrow. Our workload balance is currently 55 percent organic, 45 percent commercial and our depots are operating at an operating efficiency of 90 percent capacity.

    We are doing some new things, some things that we are proud of in terms of what we call integrated maintenance concepts. If you would look at the materiel condition of one of our aircraft over time, you would find that it goes into the depot, comes out of the depot and is ridden hard until we cannot stand it any more and we will send it back to the depot and would repeat that process. So you have these wide sawtooths of materiel condition over time.
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    Recognizing that could better husband the materiel conditions of our aircraft as well as improve readiness, we have started out on what we call integrated maintenance concept, which takes depot artisans to active squadrons and breaking up the main packages of depot undertaking over shorter packages over shorter periods of time. It is giving us a much smaller sawtooth and it is also giving us the advantage of having depot artisans shoulder-to-shoulder with our sailors and Marines. We need that because we are facing, like are the other services, real challenges of aging aircraft. Our aircraft in the Navy are 18 years of age and frankly, we ride ours harder in a harder environment—salt spray, et cetera—that ages them quicker.

    Here at this facility, the Commanding Officer has told me that it takes about one-third more work to care and attend for Naval aviation aircraft than it does for the other services because of the sea-based or maritime environment.

    We are seeing about an eight percent increase in the cost of our flying hour program for each year that we age. We are also seeing stress in our vendor and subvendor process and the prioritization that it takes, both public and private, to manage that.

    We are re-engineering, we are streamlining and we are beginning to embrace e-business, all across Naval aviation, From the private sector, we are also bringing in partnerships where, with—and to use the F/A–18E/F, our new strike fighter as an example—we are partnering with McDonnell Douglas and with General Electric to bring work that is contracted to the primes into the aviation depots to do what we each do best. The contractors are better at introducing early technology changes. Likewise, the contractors are better at supply management. We are better at touch labor and we are able to do both. We have the same problem with aging that you have discussed, but we believe that our depots are relevant, we believe that we are balanced, that we are contemporary in terms of state-of-the-art capabilities essential to readiness, essential to war fighting, and we are thankful to have this opportunity to be with you today, Mr. Chairman.
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    Mr. WELDON. Thank you, Admiral Dyer.

    General Lee.

    [The prepared statement of Admiral Dyer can be found in the Appendix.]


    General LEE. Thank you, sir. Good morning, Chairman Weldon and distinguished members of the committee. I appreciate this opportunity to address the issues concerning the status of the Marine Corps' depots now and in the future.

    I would first like to thank each of you for your continued support of your Marine Corps and its depots; and during a recent testimony on the part of our Commandant, he testified that your Marine Corps is ready. I would echo that your Marine Corps is ready, but it is ready because of the depots, their capability. The depots are ready because the Marine Corps has, in part, over the past several years, aggressively developed initiatives that will increase whole system logistics responsiveness, effectiveness and efficiency by applying innovative techniques and adopting better business practices.

    The mission of the Marine Corps depot maintenance program is to maintain optimal strategic depot maintenance capability to support our expeditionary operations. Our depots' job is to repair ground weapon systems, the support equipment that goes with those systems, secondary repairables, and ensure readiness in peace time, sustain our forces in war time and add to the quickness of regeneration and reconstitution of our force.
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    The Marine Corps has two depots, one in Albany, Georgia and the other in Barstow, California. Both are national strategic assets. It provides a ready and skilled reservoir of talent and technical competence. This capability can be readily deployed to provide support to our forward expeditionary forces. Following war time operations, we provide for the regeneration of our maritime pre-position force, our Marine expeditionary forces and the reconstitution of the total Marine Corp to pre-conflict levels of readiness.

    The Marine Corps' multi-commodity maintenance centers perform maintenance on over 260 different items in several commodity areas. The items run the spectrum from circuit cards to the amphibious assault vehicle, from the nine millimeter pistol to the M–198 Howitzer. There are many items in the Marine Corps weapon system and ground support equipment inventory which are unique to the Marine Corps and very few in number, and that complicates this issue of support. The organic depots are the only source of repair for many of these items.

    The increased operational tempo, and as you heard here about aging equipment, and our in our fleet fewer maintenance support personnel in the Marine Corps creates a challenge for the Marine Corps depots to sustain that readiness. This challenge is further compounded because our Marine forces operate in a demanding operational environment that ranges from combat to peacekeeping and humanitarian assistance contingencies. The contingency operations typically take place in the littorals, in a saltwater, maritime environment that greatly increase the required maintenance on our equipment and the cost to repair them. Consequently, the equipment shows up sooner at our depots and often in much worse shape.

    We are faced with this management challenge of near-term readiness, the aging Legacy systems and aging workforce and rising costs in a constrained fiscal environment. In order to deal with this, both of the multi-commodity maintenance centers are simultaneously instituting business process improvements. They both have achieved International Organization for Standardization (ISO) 9002 certification. By the end of fiscal year 2002, initiatives such as manufacturing resource planning, earned value management, activity-based costing and theory of constraints will have been completed in both depots. These initiatives will form the framework for cost, schedule and performance metrics so that we can measure our effectiveness required to achieve the strategic goals of improved repair cycle time, better quality and reduced cost.
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    The second challenge is that while we are doing all of this, is to modernize our depots to accommodate our new weapons systems, our flagship, the advanced amphibious assault vehicle and as well, the medium tactical vehicle remanufacturing (MTVR). That necessitates not only that we modernize the facility, but that we modernize the workforce.

    In summary, the Marine Corps' depot maintenance vision is to continue to support readiness, enhance our responsiveness, increase agility, modernize our people and facilities and strengthen customer trust. The continuing challenges of aging equipment, low density critical items, maintaining core capability and recapitalization and modernizing our depots will be the focus of management's attention and our strategic plans. We recognize that depot maintenance is a force enabler and a pillar of Marine Corps expeditionary capability.

    With the continued support of Congress, combined with the application of better business practices and careful management of our precious resources—financial, personnel and infrastructure—we will continue to ensure that your Marine Corps depots remain capable and ready.

    Thank you for your continuing support and allowing me to present my views on our depot maintenance program, and I look forward to your questions.

    [The prepared statement of General Lee can be found in the Appendix.]

    Mr. WELDON. Thank you, gentlemen for your testimony but also, and more importantly, for your service to our country, we appreciate that.
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    I just have one question because I want to allow the maximum time for my colleagues, and that relates to the testimony that you just heard from the General Accounting Office and I assume what you have read in terms of the written statement. The key bottom line factor that I take out of GAO's summary was that while we have made significant reductions in the facilities and the workforce of our depots, that in fact, according to GAO, we have made relatively little investment; and I am quoting from the report, ''Little investment is being made to modernize repair capabilities and many skilled personnel may soon retire.''

    The GAO goes on to say, and I quote, ''Overall strategic and service plans do not adequately address these challenges, nor paint a clear picture of future maintenance capabilities.'' The report goes on to say that ''A major recommendation of GAO is that a comprehensive defense maintenance strategic plan needs to be developed by the UnderSecretary of Defense for Acquisition, Technology and Logistics, using the defense depot maintenance counsel in consultation with the military services, the Joint Chiefs and the war fighting commands to guide the development of individual depot strategic plans for the services.''

    So my question to each of you is, first of all, do the services have plans that meet the challenges that GAO says you are not meeting? Do you disagree with the GAO? And number two, are you satisfied with the overall strategic plan of the Department of Defense, does it involve coordination of all of you, are you clear in terms of where we are going, or in fact do you agree with GAO that this needs to be an area of renewal on the part of the new Administration?

    General Coburn.

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    General COBURN. Mr. Chairman, I partially agree with the GAO report. Let me address people first. They indeed are right, we have an aging workforce, about 63 percent of the folks in our depots are eligible for retirement in five years. So we certainly would agree with that. But we are doing a lot to help ourselves in that area as well. For example, with your help, Congressman Ortiz' help, we have established a depot apprentice program, 100 folks, three million last year, 2001. We would like to expand that.

    We are doing the same thing at Tobyhanna Army Depot in terms of apprentices for communications electronics. We have two numerous vocational tech programs, if you will, with local colleges, to include one right here at Corpus Christi where we are hiring folks out of Delmar College, 24 I think we have hired, something like that, since last September.

    So my comment in that area would be that the aging workforce, I totally agree with GAO, but we are also doing a lot to help ourselves as well.

    We are not doing as well with modernization, so I would tend to agree with the GAO there. We do have capital improvement plans for each depot, numerous industrial tools, equipment, that sort of thing, but they are not sufficient.

    As to the need for overall strategy, a planning session, I think that that is needed, so I would agree with the GAO there. I think that it is not needed necessarily because we do not know where we are going in each of the services, because I think we do. I think it is needed though because we could learn a lot from each other as we lay out a DOD strategy, if you will, because I think what the services are doing individually is pretty good, but we do need to pull it all together. So that would be my comment.
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    Mr. WELDON. Thank you, General Coburn.

    General Lyles.

    General LYLES. Mr. Chairman, I agree with the GAO report and GAO assessment. While we have been working diligently in trying to address all the major deficiencies they have identified, specifically for the Air Force, we have been doing that for the last couple of years, and working with the GAO to some extent to make sure we are doing that; we recognize we needed to have a strategic plan.

    As I mentioned in my opening comments about developing a short term and a long term road map, that was, in part, to make sure that we in the Air Force had our strategic plan that we know needs to be vetted with and linked with an overall plan, strategy plan for the Department of Defense. As you all well know, there is a strategic review underway within the Department of Defense. We all feel very, very positive about that and we know whatever we do relative to our strategies for the depots has to be linked to that particular effort.

    So I do not disagree with the GAO assessments at all, and in fact, we have been making sure and working diligently on all aspects of their concerns about the Air Force to make sure that we can solve our problems while also working on a long term strategy.

    Mr. WELDON. Thank you, General.

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    Admiral DYER. I can find little to fault in the GAO report. It certainly points out a number of opportunities that we know we must take advantage of.

    I would make the point addressed also by GAO that it is acquisition that is the starting point for where we will go in our depots and it is research, development, test and evaluation, it is procurement and it is full life cycle maintenance that must be considered as a system for us to do this job and to do it right.

    The issue of the aging workforce is an absolute crisis, and I am glad to see GAO add their voice and their energy to helping us try and come to grips with that. It is really the knowledge that will walk with these folks, that is of very, very most concern. And I would tell you that if you look at our culture in Navy depots, and perhaps all, there is an artisan's knowledge that we have not captured and that we will find difficulty and challenge in passing down as well as we can. We are late starting in doing that.

    We are beginning apprentice programs, we are rejuvenating co-op programs; but likewise, as you have heard from others here, less than five percent of our workforce in the Naval Air Systems Command has less than 15 years experience.

    The issue of the infrastructure and the investment in the depots, I think, reflects what you see across the board in terms of the pressure between near term readiness and longer term recapitalization. The Congressional Budget Office report on that subject I think is well done. It does not talk in detail to life cycle support, but by extension it really does address the same stresses, the same challenges and the same spread of resources close to the fire.
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    Mr. WELDON. Thank you, Admiral.

    General Lee.

    General LEE. I found the report to be accurate, I agree with it and I was glad to have it because it did illuminate for me as a Commander of Materiel Command (MATCOM) scenarios that needed Marine Corps attention.

    Some of the specific comments, however, I would say that at least for the Marine Corps, we do have plans in place and have a strategic plan. It is not as robust as I would like it to be, nor as focused on the future as it should be, and we are working on that right now. It is establishing for the first time, which was absent in the past, metrics and you cannot measure success if you do not have something to measure it against. So we are focusing on that.

    Obviously in the two particular areas that you heard addressed by all of the panel members this morning, on our people, a major concern because therein does lie the capability that we are talking about; and if we do not do something very soon about that, in five years we are going to have an emergency on our hands.

    Second, is the modernization of our facilities. Now we have a capitalization plan in place for both of the depots in the Marine Corps. It is not adequate, it does not consider sufficiently and comprehensively all the new weapons systems coming down, and we are going to have to pay particular attention there.

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    The issue of having top-down guidance, having a vision that integrates, a vision that we can all shoot for and develop our own individual plans, I look at that very positively. I support that completely and would welcome the opportunity of working with the other members here to learn from them and to focus on that long term vision.

    Mr. WELDON. Thank you, General; thank each of you.

    Mr. Ortiz.

    Mr. ORTIZ. Thank you, Mr. Chairman.

    I have a question for all of you this morning. My question is how important is the pending fiscal year 2001 budget supplemental decision on your depot system? And you know, I ask this question because sometimes I feel that it is budget driven and not driven by the needs of the services. And sometimes, you know, the Budget Committee gives us so many numbers, they give it to the Armed Services and then we have so much money we can spend. Is this a problem for the budget, it is budget driven instead of services driven?

    General COBURN. Congressman, let me just suggest to you that we do indeed need a supplemental for depot maintenance, but it is more involved than that, because depot maintenance depends on other factors. Depot maintenance depends on spare parts, so you have got to have the spare parts, of course, to do the depot maintenance program. So I think we need a supplemental, I think it is critical.

    The only thing I would add to that is that the timing is critical. We need a supplemental in April if we are going to not start shutting down critical operations. In other words, if we get a supplemental in the last quarter, it does not do us much good. So we need a supplemental and timing is an issue, in my opinion.
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    Mr. ORTIZ. General Lyles.

    General LYLES. Yes, sir, I think I can echo that. I think all of us share that same view. We know we need a supplemental to be able to get through and solve all the bills and issues that we have on the plate for our services—depots, readiness, quality of life for our people, infrastructure, modernization—across the board, we are not able to do everything that we know we need to do. And as we address specifically the short falls in our depots and the need for recapitalization, we have to balance that against all those other parts of the equation and we know that we need to have additional funds to be able to do more in every one of those areas. It is a constant issue that we are all sort of facing and we are trying to make the right decisions to make sure we do not impact the war fighter, first and foremost, but also that we are not mortgaging the future.

    Mr. ORTIZ. Are you working on your supplemental now, or are you waiting? I understand that there is a Defense Department review, but if that review is not finished until July-August, this is not going to help you. So are you prepared to submit the supplemental even if the review is not finished?

    General COBURN. For the Army, Congressman, absolutely. We know exactly what we need in the supplemental, we know what the requirement is, we know it by category. I can tell you depot maintenance is high on the list. There are about 22 areas that we have looked at, so the bottom line is we are not waiting.

    General LYLES. And the answer for us is exactly the same, I could use those same words, just put Air Force in front of it. We developed what we think we need for supplemental, we know specifically where each piece is there. Depot maintenance is very high on that, readiness which is related to depot maintenance and also spare parts is extremely high. We have developed that, we have our input, but we also recognize that it needs to be fitted into the context of the broader strategic review.
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    Mr. ORTIZ. Thank you. Admiral.

    Admiral DYER. Our Chief of Naval Operations has been up visiting with you folks of late expressing his strongly held views on the importance of the supplemental. I would add that seed corn must taste good because we eat so much of it and as we are stressed for resources in this year of execution, we will be back eating more seed corn if we cannot find the additional resources to attend to the needs of Naval service, sir.

    Mr. ORTIZ. Thank you. General.

    General LEE. We as well have been working, have available, as the Commandant has testified and the Assistant Commandant of the Marine Corps, most within the last two weeks, a need for a supplemental. Depot maintenance is high on that list of things that we need in order to continue to sustain readiness and to build the capability that we are talking about for the future. I would say that if the supplemental is made available, it is absolutely critical in the area of depot maintenance that it be sooner rather than later because in order to schedule the work, get the work on line and be able to execute against those dollars that would be provided so that they would make the impact that you want them to make, now and certainly in the near term future, it is very critical, as the General said, that we have it sooner rather than later if it is going to happen.

    Mr. ORTIZ. Is it too early for you to tell us more or less how much you are looking at for your supplemental, or is still a little early for you to tell us?

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    General COBURN. I know exactly what we are looking at and what the figures are. I think though that we need to take that one for the record, based on guidance, but I can tell you we know exactly what the figures are.

    Mr. ORTIZ. Very good.

    General LYLES. We do likewise, Congressman Ortiz, and we would like to provide that for the record, as part of the overall strategic review.

    Mr. ORTIZ. Very good, same answer.

    You are not being hampered by not being able to present a supplemental from anybody up high. I mean you have a responsibility and when that day comes you will present a supplemental to us, am I correct?

    General COBURN. You are absolutely correct, Congressman. In fact, the Vice Chief of Staff, our Vice just testified on this same issue and we are ready, we are working it, we know exactly what we need and we are not being hampered in any way.

    Mr. WELDON. Will the gentleman yield?

    Mr. ORTIZ. I will yield to the Chairman.

    Mr. WELDON. Just to follow up on this. It would be very helpful to us, you are all agreeing to provide it for the record, if you would get that information to us. We understand the Administration is going through their own review process now and we all support that, that is very important. But if we could get those numbers, that will help us make the case to our colleagues that we have a need that has to be addressed sooner rather than later. So that is very important that each of you give us those numbers and I would ask staff to provide those to the Members once they are accumulated. Thank you, Mr. Ortiz.
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    General COBURN. We will be glad to do that.

    [The information referred to can be found in the Appendix.]

    Mr. ORTIZ. I have some other questions, but I would like to yield to my friends, the other Members, but we will have a second round of questions, right?

    General COBURN. Thank you, sir.

    Mr. WELDON. Mr. Hansen.

    Mr. HANSEN. Thank you, Mr. Chairman.

    I do appreciate the strength of your testimonies and what you have said, and especially the feeling that you apparently all have on how important these depots are. I guess we could get into some hair splitting here as to why we have asked for waivers and what has happened on that, we could probably spend the rest of the day debating that.

    I do appreciate General Lyles comments where he defined core in his statement. I think to some people, core is like beauty, it is in the eye of the beholder, and having asked that question for 20 years, I always appreciate the interpretations, but I think that is within the purview that I would go along with.

    I would have to say I am a little concerned, and I talked to Whit Peters about this before he left, but I wonder why the Air Force has not submitted a waiver notification for 2001. I was happy to hear General Lyles say that the core in the Air Force—excuse me—the 50/50 issue would be resolved by the year 2002 and that was encouraging to hear.
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    I am a little curious about the recently shared industry and government seminar that produced a document A–1AA, Reform Number 2001, a Blueprint for Action calling for increasingly outsourcing support activities, including depot maintenance.

    I would like to know if General Lyles would respond and say if that is an official Air Force position.

    General LYLES. Congressman Hansen, it is not. I know the forum by which that was developed, but to be perfectly honest with you, it was not vetted or reviewed by our Secretary of the Air Force or the Chief of Staff of the Air Force or me, for that matter. And one of the issues that we are trying to wrestle with, and I think we are getting arms around it, to help us to better address both the 50/50 legislation and better address the proper support for our depot, is to make sure we have an adequate, enforceable source of repair process as we call it.

    And that process, to be fair and to be proper, needs to have all the stakeholders at the table. The acquisition community, of which I am part of, but do not necessarily control all the programs because of the way we have implemented Goldwater-Nichols. The depot process, the science and technology process, everybody needs to be at the table so that we in the Air Force can make a corporate decision as to where workloads should go and best figure out what is not only best for a program today, but also what is best for the war fighters and for the United States Air Force and our depots in the future. We have not done that very well in the past, we have a new source of repair process that is supposed to ensure that we do a better job of that in the future. But the jury is still out, and I am committed myself to making sure that we do that in the right manner and we make corporate decisions, not just decisions for a single part of the United States Air Force.
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    Mr. HANSEN. I appreciate that answer, and even though it is obvious that Members of Congress always have a parochial interest in their own areas and we are elected to do that, I would hope that each of us would realize that first and foremost, what is right for America and then we will get to the parochial things second.

    Many of us have concluded that a certain amount of core that is balanced is what this whole thing is about.

    I would like to shift to what I talked to GAO about and that was inter-servicing. I honestly think that Chairman Weldon and the full committee is going to have to face that more. I cannot believe the redundancy, the duplication and overlap that I have seen in the military in my 20 years in Congress. I really do not fault you because that is the way it has been done.

    When I was in the Navy during the Korean War, the planes that were flown all came from Grumman and they were just finishing up with the F–8 and they were going into this other thing. Now as you look at an F–15 and an F/A–18, they are interchangeable. One is built on one side of the hangar, one is built on the other side of the hangar. I do not know what it is going to take, but I think there is more money to be saved by doing away with redundancy than any other single thing the committees could do. But it would take kind of a dramatic thing and it would maybe give a lot of people heartburn and pain.

    And I do not mean this disrespectfully, but I know we all have our traditions. When I was in the Navy, I was totally convinced—and probably will be to the day I die—that the Navy won the war in the Pacific in the Second World War. They were the guys doing it and they had me totally converted to that.
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    General Coburn, I say that respectfully.

    Anyway, carrying that on, you get down to the point that somebody is going to have to say who does the best work on helicopters. You should not do away with traditions—who does the best work on engines, who does the best work on landing gear, and the list goes on and on. And actually, I honestly think, Mr. Chairman, we should ask the Joint Chiefs, these gentlemen and others, to give us their written report of where can we do away with some of this huge redundancy that costs so much money.

    Any of you that would like to take a stab at that, I know we are running out of time and my time is probably up, but—


    General LYLES. Congressman Hansen, as you know, I am perhaps a little bit biased on that subject because the two of us, when I was commanding the Ogden Air Logistics Center, went through a situation that was not very pleasant, to be honest with you. We learned from that, and not just we, I think the entire structure learned from that. I cannot say personally how much redundancy there may be, I do not know what the numbers are. I do not even know if it is a huge number, but I suspect there are some and it is going to take all of us working together to make sure that where it is feasible and where it is appropriate, that we eliminate that.

    I am mindful of a comment that Mr. DuBois and I had coming down on the airplane last night; to use his term that we need to make sure we are communicating with each other, cooperating and coordinating in this area, just to make sure that we eliminate duplication where it might exist and we get the best bang for the bucks for our armed forces, wherever they may be.
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    Mr. HANSEN. Anybody else want to take a stab at that?

    Admiral DYER. I will comment if I may. First of all, I comment your excellent read of history. [Laughter.]

    Admiral DYER. And then to say that within Naval Aviation, we view core as not just people and their jobs but also equipment, the technical data, the facilities; again, this full spectrum that is necessary to keep a war fighting system working.

    We have great and better and improving examples of cross servicing, probably none finer than this facility that we are visiting today. Naval helicopters, when we closed our depot in Pensacola, Florida, found their way to Corpus Christi and we are pleased with that product. We are demanding customers, but we are pleased with that product.

    I agree with you, there are efficiencies to be had, but I was told as a young officer that in peace time we pursue efficiencies and in war time we pursue effectiveness. We are 90 percent—at 90 percent capacity in Naval aviation depots today and I will tell you one of the worries I have is if we have to spin up in response to global challenges or regional challenges, how much depth do we have in our depots, not only the Naval ones, but as we look across all of them.

    General COBURN. Well, Congressman, one thing I am not going to comment on is your understanding of history.

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    I agree with what the Admiral said, there is a lot of inter-servicing going on. There is some redundancy to be sure, but we have pretty much decided that Corpus Christi Army Depot is the right place to repair helicopters, as the Admiral said, and so we are doing that.

    If you went to Tobyhanna Army Depot, you would find all kinds of joint programs, so much so that you would think it is a joint depot. If you went to Letterkenny, you would find that tactical missiles are being done for all the services; we have done that a long time ago. If you go to Red River, you will find that we are doing trucks for the Marine Corps and then at a higher level—admittedly we do not do it as well as we should, but we have something called a depot maintenance inter-servicing council where we get together and fight about where work ought to go based on the merits. That does not always work the way it should, so there is some redundancy advantages that we could gain perhaps in that area.

    So I think it is worth looking at, I think that we still have some areas where we could work, but the message I would leave with you is there is a lot being done in the area as well.

    Mr. WELDON. Thank you, Mr. Hansen.

    Mr. Reyes.

    Mr. REYES. Thank you, Mr. Chairman.

    I first want to say thank you for your candor and your frankness in giving us the testimony you have provided us here this morning. I have a couple of questions.
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    The first one deals with our ability to make competitive the workforce that is in the—the civilian workforce that is in the military system, particularly the depots, and I would like for each one of your to comment on your views on modernization. And I say that because as we travel around the country and talk to the people that are doing the work, there is a general feeling of frustration that they are less able to be effective because we have not paid attention to the modernization of the tools. And the irony of that is that we have got multi-million dollar equipment that is being maintained by depots such as this one here and we are not giving them the proper support.

    So if each one of you would comment on that first, I would appreciate that.

    General COBURN. Congressman, you are absolutely right. We have a modernization program for each depot, a capital improvement program for each depot, but it is not near enough. What has happened over the years is we keep deferring modernization, so now we have a backlog, a huge backlog, and we have just got to put the resources into modernization to allow our workforce to be competitive.

    The system kind of works against you to some degree because we have something that we work within called a working capital fund, which is really a revolving fund that makes you operate like a business. So our depot commanders are very careful when they spend money, because when they spend money, large amounts of money, that money is then reflected in their rates. So they run it as a business and we end up with modernization that is lacking.

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    So I totally agree with you, we need to put the resources in it that we need to modernize so our workforce can indeed compete.

    General LYLES. Congressman Reyes, I also agree with that. Our capital purchase program has lagged through the decade of the 1990s. Certainly it is not as robust or aggressive as we have had in past decades. We recognize that and that is another issue that we are addressing in our both short term and long term strategic plan for our depots. And we know that we need to work on that problem, but we also need to work on something I think the GAO pointed out and that is the front end of the process, particularly bringing in new technology to our depots.

    As we go through acquisition strategies for programs, whether it is new programs completely like joint strike fighter or F–22 or whether it is major upgrades to existing programs or modifications, we need to make sure we factor into the acquisition strategy the long term needs of our depots and the long term need of maintenance on the specific system and whether or not we need to bring specific technologies into the depots to have that capability when it is called upon.

    Those are the kinds of things and strategies that we need to do a little differently than we have done in the past. And they are part of the strategies that we are developing for the Air Force depots right now.

    Admiral DYER. Depots do operate like businesses and are confronted perhaps with advantages and disadvantages in so doing. You could pose the question why do poor families go to 7–11 and pay $1.85 for a pound of rice when they could go to the warehouse and buy it for 30 cents a pound. I think the answer is they have only got $1.80.
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    The capital procurement scheme in a working capital fund allows you to invest in the future, but it finds its way to rates; and the tremendous competitive environment focuses a depot commander very tightly and very sharply on controlling rates to be competitive and just like in any business in a downturn environment, there is pressure to manage the cash flows and to neglect the future—we are guilty of that.

    General LEE. I would piggy-back and re-echo what the Admiral just said. It is the day-to-day management keeping those rates down and that drives decisions at the depot level, investment decisions in technology or in modernization every day and in the current time.

    The other issue that arises is just what we have all seen, in an area of constrained resources, as you try to balance current with future, it becomes a management nightmare. What we have to do is make it easier, the idea for our management of our depots and make this—give substance and specific direction on how we can do that, and that has to come from right here, from the Materiel Commands down there with the assistance of whatever policy, etc., that we can get and additional resources. But we have to have the strategy map, we have to take that burden for which they are being judged as businessmen and how they handle that off of their shoulders and direct that these things be done to achieve the balance that is necessary in this constrained environment.

    Mr. REYES. If I can follow up. Is modernization addressed in your request for supplemental?

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    General COBURN. It is in the Army, Congressman.

    General LYLES. Likewise in the Air Force.

    Admiral DYER. I believe it is; yes, sir, but I would add, if I might that when you have the depot commanders with you this afternoon, I would encourage you to ask them about some of their modernization efforts because while they are significantly challenged and while none of us are modernizing the way we would like to, there are some great examples of taking modern electronic tools, stepping out in terms of e-business, finding network connectivity that we believe is going to do for Naval Aviation depots those things that we are seeing in the private sector. So there are some good news stories too and I hope you will have an opportunity to hear some of them this afternoon.

    General LEE. We have identified what we need for modernization; yes, sir.

    Mr. REYES. Thank you, Mr. Chairman.

    Mr. WELDON. Thank you, Mr. Reyes.

    Mr. Chambliss.

    Mr. CHAMBLISS. Thank you, Mr. Chairman.

    I hate to correct a well-decorated Marine Corps General, but General Lee, in New York, it is Albany; in Georgia, it is Al-Benny. [Laughter.]
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    Mr. CHAMBLISS. General Lyles, you made reference to the depot conference, I guess that is what you called it, that you held recently and I believe you said that is the third time we have done that. And I believe you spent a couple of weeks in that conference talking about various depot issues with all of the Air Force personnel involved in this issue. And I am assuming that during that period of time, the issue of core was very much discussed and what is, what is not, what may be, what may not be.

    During the course of that latest depot conference, were there any new determinations of core competencies that were identified by the Air Force?

    General LYLES. Congressman Chambliss, the meeting we held, we call it a depot all site, the last one we held—we do it on an annual basis, the last one was the past September and so we are coming up to another cycle for this calendar year. We did look at every aspect of our depot business, we looked at our response to the GAO report as an example, we looked at our performance in each one of our depots, we looked at the challenges we have relative to our workforce; and we always go back and ask the question again, it is a continuing one, about our definition of core. As you know, and as described earlier, we in the Air Force have sort of base core around commodities as opposed to specific weapons systems. That may be a little bit different from what the other services have done. That commodities based definition has served us well; but I will be perfectly honest with you, it may not fit every scenario and we recognize that. And one of the reasons why we were tasked to address both the short term and long term strategy which will include a re-look at the definition of core, is because of that particular problem and the problem of making the 50/50 legislation.

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    So the short way to answer your question, we did look at it, we did discuss it, we have some same confusion that perhaps others have about that. We know that our commodities based definition may not fit every scenario and so as part of our strategy, we are re-looking at that again in addition to everything else that needs to be addressed.

    Mr. CHAMBLISS. As you know, we have had this discussion before. You know that I have had a real problem in the failure on the part of the Air Force to really address the core definition, particularly with the C–17, so I want to talk specifically.

    As you say, it has been a weapons systems driven definition more so than anybody else, but would you not agree that strategic airlift is a major Air Force competency?

    General LYLES. Absolutely; yes, sir, and support for all the services.

    Mr. CHAMBLISS. And do we have plenty of strategic airlift today?

    General LYLES. We certainly do not.

    Mr. CHAMBLISS. Is not a part of the C–41 depot work considered core?

    General LYLES. When you say a part, the answer to that question is yes, sir.
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    Mr. CHAMBLISS. And it has since the initial operational capability (IOC) of that great airplane that has served us so well.

    General LYLES. That is right. And again, looking at it from a commodity standpoint; yes, sir.

    Mr. CHAMBLISS. And is not the C–17 wartime tasking increasing as it replaces the C–141?

    General LYLES. Congressman; yes, sir, it has and it will continue for the foreseeable future, you are correct.

    Mr. CHAMBLISS. And we are phasing out the 141, bringing on the C–17 to replace it. Was not the C–5 considered a core competency weapons system just prior to the public/private competition?

    General LYLES. I think the answer to that question is yes sir before we defined out core definition in terms of commodity and we did have a weapons system perspective, C–5 was a core workload.

    Mr. CHAMBLISS. And we declared it non-core and it went into the public/private competition. What bothers me about this is if the 141 was core, the C–5 is core and they have been the real work horses along with the 130, which obviously also was core, why are we having a problem saying the C–17 ought to be considered as core?
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    General LYLES. Congressman, your logic is flawless, I certainly cannot argue with that at all and I agree with every one of your statements you made previously and hence, that is another reason why we are going back and re-looking at that as part of our long term strategy.

    The other part, however, I hinted at previously, that we need to address, and in some respects it is part of the cause, and I will emphasize part of the cause, for this dilemma that we are in, is our failure in the past in doing and including the depot needs, maintenance needs, sustainment needs for the future as we develop our acquisition strategy for programs. And again, as being part of the acquisition community for the Air Force, I will not be critical completely of that, but I will say that as we make those decisions, we need to make sure we put all the stakes on the table and we make sure we understand all the implications and make corporate decisions relative to these things and not just look at what is a smart business deal for one weapons system may not be a smart deal overall for the United States Air Force in terms of readiness and in terms of the future of our depots.

    That is part of the picture that we are changing with our new source of repair process and our new involvement in the acquisition strategies so we preclude these sort of situations in the future.

    Mr. CHAMBLISS. Was there any discussion at either the recent off-site depot conferences about the fact that the 1998 defense authorization bill required that a weapons—the core competency of a weapons system be declared within four years or upon the expiration of four years from the date of IOC?
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    General LYLES. The answer is yes, sir.

    Mr. CHAMBLISS. Why have you all dodged us on that? We are a little over a year and a half or right at a year and a half from four years from the IOC of the C–17.

    General LYLES. Again, Congressman, the reason why we are going back and relooking at the definition of our strategy, definition of core and relooking at our acquisition process and how it fits in is because of that and all the other related issues that we find ourselves in relative to our depots.

    Mr. CHAMBLISS. Are we preparing, from an Air Force perspective, to put the appropriate infrastructure and purchase the tech data on the C–17 in the event it is declared a core competent weapons system?

    General LYLES. I think the answer to that question is yes, sir, we should be prepared to do that.

    Mr. CHAMBLISS. Let me ask all four of you, you all said you agreed with the contents of the GAO report. And that GAO report is pretty critical of you all from a depot maintenance standpoint, particularly from an infrastructure standpoint. And I think you can see that is a real concern to every one of us. It just appears that there has been an attitude over the last several years that the best way to handle this issue is to contract it out and we will wait until these guys retire or do not get re-elected, I do not know.
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    But we are concerned about the fact that there is being reporting by GAO that in every branch of the service, we are not preparing our depots for new weapons systems and our depots are going to die if we do not make the commitment to put that infrastructure in place. So General Coburn, if you will start, I would appreciate your comment on that.

    General COBURN. I agree with you, Congressman, we must absolutely do that. We have not made the commitment we need to. I can tell you that one of the reasons for that in the Army is we have not been buying anything.

    You are quite right on the statute. You know, the statute requires that within four years of IOC, we must indeed have a depot maintenance capability so we intend to comply with that. But again, since 1985, the procurement budget has come down about 73 percent, so we are buying relatively little. We have got the Comanche; we will see how that goes.

    But nevertheless, the bottom line in your statement is absolutely correct and we have got to find ways to make sure we insert technology, modernize our infrastructure so that indeed we will be competitive. We have just not done well with that.

    General LYLES. I also agree, Congressman, and I hate to repeat myself, that is the reason why our emphasis and my personal emphasis on being part of our acquisition strategy process at the very front end to make sure we address the corporate needs of the Air Force and address the needs of our organic capabilities which is really what we are trying to protect, as we have shown, demonstrated during Kosovo and many other war time efforts. We want to make sure that everybody is at the table and we address the entire spectrum of our needs before we make a strategy decision on any new weapons system. We have not done that in the past, that is a fallacy that we are correcting and I am insisting, along with others in the Air Force, that we change that posture from now on.
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    Admiral DYER. Sir, it might be worth pausing for just a minute and ask what are the motive forces at play here, why do we see these trends and these pressures that we do.

    I would submit a hypothesis that would need further research to develop, but from having been a program manager as well as a Systems Control (SYSCON) commander, I would tell you that in acquisition when you have real stress on being able to deliver your program with the funds that are available.

    One of the things you can do in near term is to rely upon the developing contractors infrastructure for life cycle support. Now if you are the program manager for that same system later on, you are looking for leverage, more sources, some competition and the depots are dear to you. But near term, you can save money; long term, you need to advantages and the sources offered by a depot. But if you get hungry enough early on, then there is this temptation to not invest in the infrastructure needed to support the system in the life cycle and to make capital investments in the depot.

    General LEE. Your observations, your comments are on target. The Marine Corps has not paid sufficient attention in the last several years to modernization of its depots. That is not to say we have not; and we have some good examples, as the Admiral was talking about with the previous question, that should be raised to the depot commanders when they come forward, that addresses some of the new things that we have done in preparing for the future. However, overall, no.

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    Part of that is institutional I believe, and organizational. For the Marine Corps, it was more than two years ago that we stood up a Materiel Command, that we looked at life cycle management in a different way and put the program manager now to make those right life cycle management decisions with all these kind of considerations being taken into account. That has changed. The whole environment now that they are dealing with and the way that the Marine Corps is going to look at our depots and our investment in the depots of the future, of that I am confident.

    Likewise, we have not had a whole lot of systems either, as the Army, that we have leaped on. A couple that you saw in the report and that is just it, just a very small number. One of them is already out of the barn and we are going to pull that one back in and that is the MTVR, the seven-ton truck which is a core capability and was not registered as a core like the Air Force when you were talking to them awhile ago, sir.

    But I believe that the future is pregnant with opportunities now for us to get on with it. I just hope that we can move with more alacrity than we have in the past, but we are certainly organized now and have the policies in place to make that occur.

    Mr. CHAMBLISS. I appreciate your honesty and I think your analogy, Admiral, is exactly right. And I would just ask that as you go back and discuss this with the chiefs or whoever else you are in discussion with this issue on, particularly those folks at the Pentagon, remind them of the story that my automobile dealer, Eddie Wiggins, says and that is that he will sell anybody a automobile below cost if they will guarantee him the right to maintain that automobile for the life of that vehicle. It just makes common sense that that is the case and we cannot forget that.
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    And Admiral, you are exactly right, I know, and part of it is our fault from a budgetary perspective, but we have got to work together on that and we have got to make sure that we do get those new weapons—those depots capable of handling those new weapons systems.

    Thank you, Mr. Chairman.

    Mr. WELDON. Thank you, Mr. Chambliss.

    Mr. Rodriguez.

    Mr. RODRIGUEZ. Thank you very much, Mr. Chairman.

    I want to go back a little bit to the supplemental and about the need and I want you to all respond to some of the comments, because one of the basic—GAO says that one of the basic problems is that we are going to have 50 percent turnover in the next five years and we all know that. That in itself is a serious problem when we talk about the importance—now we established the apprenticeship program and I think based on the hearing I think we have about 68 people that cost us $3 million. But if we are going to lose 50 percent, and my rough figures are that we have about 65,000 people working, so that mean 32,500 roughly, are going to be leaving the system. And it is pretty highly skilled work that I know must take more than a year—I remember going to Ireland and they told me that for a good glass blower, it took seven years. So I gather it takes more than a year for an apprentice, you know.

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    So to me it is just apparent that we are going to continue to have this problem unless we beef up on the apprenticeship program and seriously add some money in there, because if we are talking about 32,000 people in the next five years, we almost need 65,000 apprentices every single year for the next five years. So I want you to comment on that and if you have any intentions of putting that on the supplemental, because I think that puts us at jeopardy, it puts us in a serious situation because we talk about infrastructure, but that is human development, that is human capability; and I know that when they closed Kelly, the largest base ever to be closed, and at one time we had over 20,000 employees and we are going to be closing and turning over the key this summer, we were working on the C–5, I was just told that the C–5—and this is no problem to Georgia, but we would take about 180 days to take care of it. And now it is taking over 400 days. And these are still federal workers, same workers.

    Mr. CHAMBLISS. We do it right.

    Mr. RODRIGUEZ. These were also federal workers, but they were just Texans and not Georgians. But the thing is that—no, you have got a lot of good Texans that went out there to work with you.

    But the bottom line is that when you transfer and you do a BRAC process, you also lose a lot of the skilled workers. And so I would hope that in the supplemental—and I want each one of you to comment on that—that you have got to be able to come up with some kind of apprentice program that is more than a token figure of what we have been doing, and I hope that you include it on there.

    Can you please comment on that?
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    General LYLES. Congressman Rodriguez, let me comment, if you will. The term that I have used, the term we are using in the Air Force is that we are at a crisis stage, this really is a crisis, and it applies to more than just our depots, the number for the Air Force, for our civilian workforce, and particularly in the science and engineering and technical career fields, roughly 60 percent of our civilians are eligible for retirement within the next five years. If you extend that to eight years, you get it to something like 75 percent are eligible. That does not mean they will actually leave, but they are eligible to retire.

    And so we have been working this very aggressively and we are not just dependent on the supplemental. I do not want to make it seem like we are waiting for somebody to do something for us. We have been trying to work the problem internally and within the Department and within the Air Force across the board and not just waiting on supplemental. We have monies in the Air Force's budget for 2002, for 2003 and out, to address a lot of different things. We are trying to access in more people, we have been sort of a bathtub for the last 10 years or so in hiring civilians. As part of our downsizing, we just did not hire them. We were in a freeze in that regard. We are now trying to jump start the process and bring in interns, bring in apprentices and do that across the board, at our depots, at our development centers, at our test centers, at our laboratories. This is endemic across the entire structure, not just at depots.

    So we are putting money in our own budget to do this. We have some money that we have identified in a supplemental, but I do not want to make it seem like we are waiting for that. We are working on this problem right now and we have gotten great support from the Congress in giving us authorization for Voluntary Early Retirement Authority (VERA) and Voluntary Separation Incentive Pay (VSIP) in the last year or so. That authorization needs to be redone and revised, we need your support there and we need additional help to make sure we are doing and working on a wide variety of different initiatives across the board.
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    General COBURN. Congressman, we have almost the same situation as the Air Force. We are not waiting either. Although we strongly support the apprentice program, we already had other apprentice programs ongoing. For example, at Tobyhanna communications, electronics. We also are relying very heavily on vocational tech input. We are looking also at military retirees and experienced military retirees and what they could bring to the workforce as well. We also took advantage of the buyout legislation which Congress provided for retirees, which has helped us address the problem as well.

    We really for many years, eight, nine, ten years, have not been hiring. We are now starting to hire people, and that in itself is encouraging. But I share your concern and it is about 50 percent across my command but it is more acute in the depots. The depots have a much worse problem, it is about 63 percent there and when they walk out, they walk out with knowledge, they walk out with multi-skills and so we are very, very concerned about it.

    We have got some money in the supplemental, I am trying to remember how much. I do not think it is much, so I will go back and look at that and see where we are, but we share your concern.

    Admiral DYER. I would submit, sir, that the problem perhaps is worse than most folks realize. If you look at, across the Naval Air System Command and across the depots, our average age is right at approaching 48. So is Boeing's. So both in government as well as in the aviation specter across commercial, we are facing this problem together. If I can use, Mr. Chairman, an aviation term, we think this qualifies for helmet fire. It is a real first order challenge.
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    The Chief of Naval Operations has established a civilian personnel task force, which I have the privilege of leading, to come to grips with this all across the Navy. It is a challenge. Can we recruit and win? Yes, we think we can. One reason is that it really is pretty exciting work and we can sell that well and we are doing so.

    I would like to echo General Lyle's comment at VSIP/VERA. It may sound a little bit like a paradox that we would ask you to support helping folks leave at the same time we have a crisis of manning. But we must establish this flow of recruiting new folks in as some older folks leave us and we have to shape the face of that curve because if all these folks were to leave us at one time, we will be making a bad situation worse. Supplemental is important but mostly because if we do not get it in this regard, if we do not get it, it will take money from resources that we are already dedicating, to try and manage this crisis.

    General LEE. Likewise in the Marine Corps, this is an institutional problem. The average age of our civilian workforce across the board is 49 years old, and in the depots it is 47. So yes, we have a crisis that we are going to have to deal with and we are going to have to deal with very quickly, because time is of the essence.

    In direct answer to your question, I am not quite sure if we have it or if there is any money in the Marine Corps' supplemental for the apprenticeship or intern programs. I do know that we pursue those, that we have people that have been identified just recently, because for the longest time we were not feeding those programs because of the downsizing efforts that have been going on in the Marine Corps; but we turned that back on and there are people now coming in at that entry level.
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    One of the things that we have done down in Albany is we have got a partnership with the local technical schools, and we have found that that has been very valuable to us. We became a learning center as well and maybe the choice as they are learning by doing, by coming in to our depots later on when we can open up that valve and begin to bring them on board. So we expose them to that and it has proved to be very valuable for us.

    Additionally, we have pursued, over the last several years, because of the hiring caps, temporary hires; and there is a relatively large pool of them that we have available at both of our depots. So we are trying, again, various strategies to shore up this crisis so that it does not become so critical that we are unable to manage it in the not too distant future.

    Mr. RODRIGUEZ. Thank you very much. But let me specify in the Congress, last time we just voted on those visas to bring in professionals from abroad. There is no way that we—in our military, we have got to make sure that we educate our own people here, make sure we have our own skilled people here and put those resources. The private sector has hit us to bring in people from abroad to fill some of those gaps; but we should not—and it bothers me tremendously that we have had to do that because we have a lot of people here that would want those jobs and those positions. We have just got to be able to have and push forward on that. And I think that our national security is in danger if we do not move as quickly as possible.

    Let me quickly ask one last question, General Lyles, regarding your written testimony, I know you talked about the single investor system and I wanted for you to explain that a little bit more in terms of best buy and how that system—how that would be integrated and what we need to do either legislatively or policy in terms of implementation of that system.
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    General LYLES. Make sure I understand exactly what your question is, sir, Congressman, which system were you referring to?

    Mr. RODRIGUEZ. You mentioned in your written testimony on the single integrated system that you talked about, and I wanted you to talk a little bit more about that in terms of the implications of that and what you might need in order to make that happen.

    General LYLES. What you are referring to, Congressman, is something that we now call sort of enterprise, enterprise leadership, enterprise management. What we are trying to do is to make sure, very much like the issue we are dealing with with the depots, that we are not managing individual programs, stovepipe programs, without considering the system of systems, integrated systems, and how they need to work together and allow us to make sure we are making the right decisions for our weapons systems, whether it is in the development stage, the test stage or the sustainment stage, so we do not have any seams or gaps.

    Let me give you one example. We have seen that we do not necessarily have the capability for all of our airplane platforms—fighters, bombers, tankers, et cetera—to communicate with each other. We have a common communications system and ability to transfer data from one system to another, but individual program directors, as given like the analogy from Admiral Dyer, manage their own systems and they do not necessarily—they are not all necessarily in sync relative to putting that capability in their platforms. We want to make sure that we are managing an enterprise, we are looking at it from a systems-to-systems perspective and integrating our weapons systems to get the best capability for the war fighter. I think that will also help us in the depot realm because we will be looking at things—instead of individual stovepipes, we will be looking at them in terms of a total enterprise and factoring in what we also need to do for the depots. It is a new way of doing business, and we are very excited about the prospects.
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    Mr. RODRIGUEZ. Thank you, gentlemen.

    Mr. WELDON. Thank you, Mr. Rodriguez.

    Mr. Sandlin.

    Mr. SANDLIN. Thank you, Mr. Chairman. And I want to say thank you to General Coburn and General Lyles and Admiral Dyer and General Lee for coming and as we are wrapping up here, wanted to say while we are talking about challenges that we all face in the service, we want to be sure and tell you that we appreciate your service to the country and what you do and the sacrifices that you and those that serve under you have made and the sacrifices of people that work in depots for protecting this great country, relatively young country. And so as we talk about challenges and problems, I certainly want you to know that we appreciate what you do for all of us and I will try to make my comments short.

    I wanted to talk mostly to General Coburn about Red River, since we are a little bit short on time.

    General, do you believe that it is fair to include the required modernization cost when we look at costs and efficiencies? In other words, we are required to modernize government-owned property and then we include those modernization costs when we look at efficiencies. Do you feel that that is a good way to look at it from your standpoint?

    General COBURN. Congressman, that whole question gets to the business of a level playing field and really the playing field is not level in many ways. You know, you go down to Mr. Goodwrench and look at the labor rate per hour and maybe it is $50 an hour and our is maybe $150, but what that belies is that that $150 includes materiel.
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    Mr. SANDLIN. Right.

    General COBURN. So that then becomes not so bad. So I would suggest to you that that particular area, plus a number of other areas, prevent a level playing field on both sides. Industry has the same complaint in different areas. So I would agree that it is not a level playing field.

    Mr. SANDLIN. The GAO report this morning identified management problems and weakness in looking at recapitalization and as I understand recapitalization; there is a two-fold way to look at it, the recapitalization of the facilities concerning modernization that we are talking about and then the recapitalization of Legacy weapons systems such as the Bradley at Red River. Are the recapitalization programs assigned to Red River adequately funded for the present year and the out-year workloads?

    General COBURN. We need additional funding for both recapitalization of infrastructure and for equipment. Both of them, frankly, are particularly acute. It is hard to say which is more important. I would say the equipment piece is, but nevertheless, we need resources on both sides.

    We have let our facilities go for many years for the reasons we have talked about this morning. On the other hand, we have not been doing overhaul of our equipment either. For many years, our Army has done something called inspect and repair only as needed, which means that a vehicle comes in the front door of Red River, gets repaired for the item it failed for, it goes out the back door and two weeks later it goes to Fort Hood and fails for a different component. So we have changed that policy so that now we are doing complete overhaul. What that means though is that that is resource driven and it is particularly important, particularly acute because that is equipment that we are going to fight with if a call comes at 1:00 in the morning.
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    So the answer to your question is we need resources in both areas.

    Mr. SANDLIN. So since that is the equipment we use to fight with, the lack of adequate recapitalization, the lack of adequate funding directly affects your top priority, which is readiness.

    General COBURN. Absolutely. The recapitalization equals readiness. If we get a call at 1:00 in the morning, our soldiers are going to go with what they have got. The more we can modernize it, the more we can overhaul it, bring it back to zero miles, zero hours, and insert the required technology, then presumably the less casualties we will have on the battlefield.

    Mr. SANDLIN. Of course, this gets us somewhat into the comparison of private sector versus or government or public sector employees. The Red River Army Depot, as I understand it, is able to deploy anywhere in the world within 24 hours, is that correct?

    General COBURN. That is correct. I have watched not only Red River, but all our depot employees over the years. I watched them in Vietnam, I watched them in Saudi Arabia. Our greatest asset in terms of employees is to responsiveness and their capability to deploy anywhere in the world, and we do it on a constant basis. We have got them in Kosovo right now. We use teams, we call them flying tiger teams, and others, that go to wherever we need them and that response capability is really at the heart of readiness.

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    Mr. SANDLIN. And we might not have that same response capability if it was privatized. Would you agree with that?

    General COBURN. I would agree with that. As I indicated in my oral statement, our depot employees—in fact, all of our DOD employees raise their right hand and support the Constitution of the United States just like we do. Not to belie contractors in any way; I think that contractors are going to be on the battlefield, I think there needs to be a proper balance. But on the other hand, we have a sunk cost that the taxpayers have already paid for and it seems to me that we ought to optimize that capacity in our depots and I think that is the prudent way to do business.

    Mr. SANDLIN. My good friend, Mr. Chambliss, mentioned earlier that he was concerned about the 50/50 formula, as I am, and I agree with him. And I had mentioned that DOD had previously requested elimination of 10 USC 2466, that requirement. Do you think that is a wise move, a wise policy position, or do you think that that is a false investment, false savings?

    General COBURN. Well, Congressman, I have been around so long that I remember 60/40 and so we went through the 60/40 drill and then we decided okay, 50/50 might be a better rule, provide more flexibility. My feeling is that 50/50 is okay. It provides us the flexibility we need and as a rule, I think that serves us well. You know, as you get into the discussion of the core requirement, for example, it becomes somewhat moot because what you do is you say look, I have to comply with the law and so 50 percent of the dollars appropriated for depot maintenance are going to go into the depots and then what you do is make sure that they indeed are core work and for core systems. So I think that 50/50 gives us the flexibility we need.
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    Mr. SANDLIN. Certainly you would not expect that less than 50 percent would be adequate for our public depots, would you?

    General COBURN. Well, I do not—I am not in favor of changing it. I think the 50/50 is okay. You have got to ask yourself why—what purpose are you trying to accomplish if you change it and if you go back to the business of core, what was not discussed was that the way core really works is you start with the Joint Chiefs of Staff (JCS) planning scenario and you say okay, what are the essential weapons systems needed to support that scenario and then from that, you get your mix of the work and skills and capabilities required in your depots, and that is your core requirement. And so I think that 50/50 is fine where it is at.

    Mr. SANDLIN. I noticed in the GAO report that when they were talking about the management weaknesses in DOD they said their management weakness is in policy, planning recapitalization, human capital issues, financial management, performance of maintenance programs and meeting legislative requirements. So I do not know what DOD was strong in, but it could not have been many things, not much left.

    And then I go over and I look at the reduction and downsizing, reduction in civilian workforce and notice that while readiness is, of course, the Army and the rest of our services' primary goal, we have reduced depot maintenance personnel by 59 percent but we have managed to increase the financial management personnel.

    Does it not seem to you that that is a skewed reasoning on how we are handling that particular issue, taking into account GAO has already said DOD is very weak in their human capital issues and management and everything else under the sun.
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    General COBURN. Well, I missed that in the GAO testimony. I do not quite know how to respond to that except to say that we certainly have reduced our depot maintenance personnel. I do not know how much we have plussed up our financial folks, but it would seem to me that we might be out of balance if we plussed them up a significant number.

    Mr. SANDLIN. Mr. Chairman, that is my last question, but I would like to say to the panel members and to others here that at Red River, we have certainly enjoyed a fantastic relationship with General Coburn and we appreciate his attention to the employees. And I can say that as I go through that plant and talk to both management and the workers, they have very positive and glowing things to say about you and they feel that you are really concerned, not only about the depot but also about the specific employees there and we appreciate that.

    General COBURN. Thank you, I appreciate it.

    Mr. WELDON. I thank our colleague for his questions. I thank all of our witnesses for their outstanding testimony.

    We are going to have one additional speaker before we break for lunch, but again, I want to thank our witnesses. Your formal statements will be entered into the record, as I mentioned earlier. We would also ask that you respond to written questions that we will submit also for the record from staff.

    And let me just say before I introduce our last speaker that we invite all of our witnesses and their staffs to a luncheon with the Members. We want to extend that invitation also to the three union presidents who are here with us, so we can interact with the leaders of the workers. We will be convening at 1:00 for a tour of the Army depot here, it will be a walking tour, you are welcome to join us. The media is welcome to join us in that. At 1:30 we will reconvene the hearing for a very exciting opportunity to listen to those that are actually running our depots and get down into the actual operational problems and challenges.
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    Before we break for lunch, it is my distinct pleasure to divert from the normal practice of a Congressional hearing, which is the opportunity for the Legislative Branch to question the Executive Branch, and to welcome someone from the Executive Branch at the highest level, to address the assembled body here.

    Our distinguished guest who traveled down with us is the Deputy Secretary of Defense, works directly for Secretary Rumsfeld. It is unusual that someone of this stature comes to a hearing, especially a field hearing, but he is here to learn, to absorb, and I think perhaps that he would like to make some appropriate comments on behalf of the Secretary; and so it gives me a great deal of pleasure to welcome Ray DuBois and Ray, the floor is yours.


    Mr. DUBOIS. Thank you very much, Mr. Chairman.

    On behalf of Donald Rumsfeld, the Secretary of Defense and Paul Wolfowitz, the Deputy Secretary of Defense—Mr. Wolfowitz is. We are very appreciative for your kind invitation to be a witness too with your distinguished colleagues, Mr. Ortiz—I guess he has stepped out for a moment—our gracious host and Mr. Hansen, Mr. Chambliss, Mr. Reyes, Mr. Rodriguez and Mr. Sandlin.

    This is an important, if not crucial field hearing here at this fine Army depot at Corpus Christi. Some of you may be wondering why I am sitting at this table and not that table. It may be a reflection of the enhanced civility in Washington, D.C. in the government, because you see, if I sat at that table, I would have to answer questions. By sitting, with the kindness of our Chairman, at this table, I can receive the collective wisdom and report back to the Secretary, but not necessarily have to answer questions. But I will say this, I hope that you will invite me back at an appropriate time to share with you the Secretary's views on these very important issues.
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    Twenty-four years ago, I left the Department of Defense as the Deputy Under Secretary of the Army. I spent the last 24 years in the private sector. Maybe Secretary Rumsfeld was right the other day, that some of us needed a second chance to do it right. Nonetheless, today we are addressing the same issues that we addressed 25 years ago, issues critical to our defense industrial base and the appropriate role of the department, the military departments, Department of Defense, the Congress and the private sector, to include the representatives of our labor unions, with whom I met prior to the hearing today. To develop the future structure and the management strategy of our depot system is a complicated and time-consuming process, but we must remember that readiness, as the Chairman has pointed out, remains our primary consideration. As the ranking Member, Congressman Ortiz indicated, and I agree wholeheartedly with him, an intense study must be undertaken to assess the entire infrastructure of the Department of Defense in pursuit of the national security goals outlined by our President in his recent address to the Joint Session of Congress. But that study will not be done in a vacuum or by folks with green eyeshades and stubby pencils, but rather it will be done with operational readiness and effective and efficient and industrial activities as our objectives.

    Such a study, however, cannot be done without valid statistical analysis and consistent definitions among all services. It also must be done with the involvement of the Congress and the men and women who work in our military depot system, because the result must be, as has been mentioned here today, a comprehensive depot maintenance strategy.

    But let there be no misunderstanding, and as this hearing takes place beneath our precious national banner and the flags of all the states of the union, we have an overall infrastructure in the Department of Defense which is unbalanced, unmodernized and its footprint and makeup has not—repeat, not—been driven by a comprehensive defense strategy, which in turn ought to drive the required force structure and systems and, of course, the correct budget imperatives to include a supplemental, its possible size and scope and timing to be determined by the Secretary.
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    This President and this Secretary are committed to just that process and not in a confrontational, but indeed a collaborative way. As your former Governor and now our President has said on many occasions in Spanish, together we can do this.

    In closing, let me thank the men and women of the Naval Air Station, Corpus Christi, and for those of us who cherish the chance to hunt the wily quail here in south Texas, let me again on behalf of the Secretary of Defense thank all of you who have joined us today in what the Chairman referred to and I will put in my own words, this is an essential exercise in our democracy, what you are witnessing today.

    Thank you very much.

    Mr. WELDON. Thank you very much, Ray. The hearing stands in recess.

    [Luncheon recess.]

    Mr. WELDON. The committee will reconvene. I apologize for the lateness, but we wanted to do a tour of the depot here and I can tell you for those folks that are from the area, we were overwhelmed in a very positive way with what we saw. So all of you who are involved with this depot really can be proud of the job that you are doing, and I guess most importantly the attitude of the workforce that we encountered—from the fellow who has been here 38 years to the 40 year old woman who just started seven months ago, the attitude is pretty much the same; and I am sure that is kind of representative of what we are going to hear from our other depots. I am pleased with these odds, we have a lot of officers here, but we have two from Pennsylvania, so the odds are good for us in Pennsylvania. But we want to hear from all of you and look forward to your testimony.
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    Before we begin, I want to introduce Charlotte Flowers, who is the President of AFGE, Anniston—Charlotte, are you here? Would you please stand up and take a bow? Thank you for joining us. I am sorry I did not recognize you before, but we appreciate you coming by the hearing.

    And I also want to take special time to thank those who made this hearing I think one of—I have been in Congress 15 years—one of the finest hearings I have attended. Logistics here are impeccable. I mean this is better than we have in Washington, Solomon. From the arrangements of the facility to the tour arrangements, the logistics, the weather. You really deserve a lot of credit, so Colonel Dockens, Depot Commander; Blaine Withens, Deputy to the Commander; Laney Jobe, Chief of Staff; Lynn Phillips, Administrative Officer and Lois Consequetes, Protocol Officer, you all deserve significant credit and we will not forget you. I am sure Solomon will remind us of your good work when it comes to authorization and appropriation time.

    So with that, we will begin the second half of our session. We are very pleased to have Colonel Mitch Dockens, Commander, Corpus Christi Army Depot, U.S. Army; Major General Scott Bergren, Commander, Ogden Air Logistics Center, U.S. Air Force; Colonel Gilda Jackson, Commander, Cherry Point Naval Aviation Depot, U.S. Marine Corps; Colonel Aaron Hayes, Commander, Anniston Army Depot; Major General Dennis Haines, Commander, Warner-Robins Air Logistics Center; Colonel Robert Cerney, Commander, Maintenance Center, Al-benny, Georgia? That is really weird. I am from the north, Al-benny is weird, but Al-benny, Georgia. Colonel Fred Hart, Commander, Red River Army Depot; Captain Chris Roum, Commander, Jacksonville Naval Aviation Depot—is that correct, Chris? Thank you. Major General Charles Johnson, II, Commander, Tinker Air Logistics Center; Colonel Kurt Weidenthal, Commander, Tobyhanna Army Depot; Captain Emory Chenoweth, Commander, North Island Naval Aviation Depot; Colonel Ervin Rivers, Commander, Maintenance Center, Barstow, California; and finally, Colonel Robert English, Commander, Letterkenny Army Depot.
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    We are pleased to have you. Your statements will all be entered into the record. Because of the amount, we would encourage you to hit your highlights. Here is your chance to tell Congress what you want us to know about. You do not have to worry about those above you, because we are asking you to be honest with us, so tell it like it is, give us an earful and let us know what we should be doing to better respond to your concerns.

    We will go right down the line and I will start with Colonel Dockens, it is all yours.


    Colonel DOCKENS. Good afternoon, Mr. Chairman and members of the Readiness Subcommittee. Again, welcome to the Depot and south Texas. I am Colonel Mitch Dockens, the 19th Commander of Corpus Christi Army Depot, better known as CCAD. We are the Army's only rotary wing aviation maintenance depot and our nation's organic source of repair and return to service for the Department of Defense rotary wing aviation fleet.

    Displayed to you left front is the U–860 Army Blackhawk, the AH–1 Whiskey Marine Cobra, SH–60 Navy Seahawk and the HH–60 Air Force Pavehawk, signifying CCAD is truly a joint aviation depot.

    Maintaining readiness is not only our top priority here at CCAD but a way of life for our patriotic and dedicated workforce. CCAD's record of recent and past accomplishments speaks for itself. Just recently in the wake of safety in flight messages that grounded our Chinook and Apache aircraft fleets, it was the workforce at CCAD that responded by rolling up their sleeves and providing an immediate flexible response unmatched anywhere else in the public or private sector. CCAD fixed the problem, got the aircraft up and flying and proved once again why this depot is a national treasure.
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    CCAD also has a mission to recapitalize the Army's Legacy aviation fleet. Recap is the cornerstone of Army transformation; and three of the five top systems, the Blackhawk, Apache and Chinook helicopters will have their recap work performed here at CCAD.

    However, we have our challenges. You have already heard that today. The CCAD workforce is aging and we need an infusion of new blood to fill our ranks and turn the wrenches. The depot's buildings are old and the test and diagnostic equipment is not keeping pace with industry. We cannot recapitalize the Army's aviation assets without also recapitalizing the facility and our workforce. To remain viable, CCAD must partner with industry and we must have a facility that complements effective partnering efforts. Where it makes sense, partnering is the way of the future. We have in place today several partnering arrangements that complement both CCAD and industry capabilities.

    As you have witnessed from your visit today, CCAD has an innovative and dynamic workforce and the total support of our three labor unions. They are all heroes and for many CCAD is not their first venue of service to our nation. In your many travels, I promise that you will not find workers more committed to making America a safe and better place than here at Corpus Christi Army Depot.

    Thank you for being here today and I look forward to your questions.

    Mr. WELDON. Thank you, Colonel.

    General Bergren.
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    [The prepared statement of Colonel Dockens can be found in the Appendix.]


    General BERGREN. Good afternoon, Mr. Chairman, and members of the Readiness Subcommittee. It is a pleasure to be here today with you. We appreciate the tremendous support of this subcommittee for our mission and for the men and women who are working hard to sustain our capabilities in the field.

    As we are emerging from years of significant change with its associated challenges, we are very excited about the future and we believe that our vision of innovation and excellence has positioned us to support our war fighters' needs for years to come.

    The Ogden Air Logistics Center has a long history of providing needed support to our nation's Air Force. During the past two decades, Ogden's workload and workforce have expanded and contracted in response to force structure and mission assignment changes. Our workforce has evolved into an exceptionally skilled team; and we are currently maintaining aging aircraft scheduled to leave our inventory, but which now have renewed life spans projected decades into the future. The parts, the systems, the equipment and processes needed to maintain these aircraft represent challenges that we are very eager to meet and at the same time, we are the center for industrial and technical excellence for some of the most technologically advanced systems and processes in the Air Force. We are exploring new applications for such emerging technologies as composite material manufacture and repair and advanced information systems, and we continually seek to find ways to apply these technologies to current processes.
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    The Ogden Air Logistics Center was the first depot to enter into a public/private partnership for depot maintenance workload. And while we are dedicated to maintaining our organic core workloads, we are also eager to partner with industry and to leverage our unique capabilities with those in the commercial world to ensure that our support to the war fighter is efficient, is effective and is timely.

    We successfully completed one of the largest workload transitions in Air Force history when we assumed program management and depot maintenance responsibility for multiple programs from closing and realigning depots. And of course, with workload growth comes new and exciting challenges. New missions and workloads assigned to Ogden through BRAC and the competition, have been placed into our existing facilities by reducing footprints and streamlining our processes. Some of the workloads have increased significantly since the transfer and so are straining our capability and our capacity. Our depot maintenance MILCON plan is critical to support our customers' requirements.

    We are working diligently to face our workforce challenges. For example, the average age of our workforce is 46 years old and 12 percent will be eligible for retirement by the end of the year 2001. Utah is enjoying a robust economy which makes it more difficult to hire highly trained personnel; but in response, we are aggressively recruiting at colleges and technical schools to offset our maturing workforce and we are hopeful that this challenge will soon be behind us. A new, flexible civilian hiring authority would be helpful in allowing us to prepare for our anticipated shortfalls.

    As we work these many challenges, we are grateful for the support of your subcommittee, which has always so generously been provided.
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    I would like to thank you again for the opportunity to meet with you today and I look forward to your questions.

    Mr. WELDON. Thank you, General.

    Colonel Jackson.

    [The prepared statement of General Bergren can be found in the Appendix.]


    Colonel JACKSON. Good afternoon, Mr. Chairman and distinguished members of the committee.

    Thank you for the opportunity to appear before you today to reinforce what the depot at Cherry Point does, which is to support our war fighting fleet with depot level maintenance, engineering and logistics for a broad range of aviation-related systems. In addition, our existence contributes to the educational, technological and economic bases of the local communities.

    The Cherry Point Depot's model is service to the fleet. This is what we have promised to deliver to the American taxpayer. There are several challenges that our depot faces in accomplishing this mission. Among these are aging aviation equipment that is closely correlated to the materiel support issues and the aging workforce.
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    Depot maintenance for the Navy and the Marine Corps' aging aircraft have been navigating into uncharted waters in recent years. The Marine Corps' primary troop transport platform, the CH–53 Echo averages 32 years of age or older than many of the pilots that fly it today. In addition, the diminishing vendor base and the vertical integration of private sector defense firms have impacted our abilities to obtain materiel.

    Mr. Ortiz, Mr. Hansen and Mr. Reyes, in the years since your personal involvement in America's fighting forces, components are failing and aircraft structures have to be replaced at a much higher rate. Fixing old is not the same as buying new. The depot has stepped up its in-house manufacturing efforts. This capability is one way that I can assure critical parts are available for our aircraft lines. I will not default on my commitment to provide our military forces with the best product available at the best value. But to do this, I must have adequate and economical materiel and supplies to fix our aging fleet aircraft. I need a steady diet of workload. A dependable and steady intake of defense work ensures cost efficiencies and technical competence in peace time and is in keeping with the public laws governing the operation of maintenance depots. Additionally, this assures our contribution to military readiness. For example, the depot does a mix of work associated with aviation engines and components. Our work ebbs and flows based on such factors as customer demand, budget, aging aircraft and the accessibility of carcasses and parts. Each of these factors influence what our artisans are able to produce.

    Because I cannot stake our future on any one workload segment, I must aggressively seek out every source of workload. This is what our depot brings to you, a well-equipped and maintained facility and plant, an aggressive personnel program that embraces training and recruitment to augment an aging workforce and to stay ahead of technology. I also bring a long-term commitment to support program managers in the fleet that private firms may not offer.
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    I highlight our recent achievements such as ISO 9002 registration for all our processes and organizations. Successful public/private industry partnerships and the inculcation of leading edge business philosophies, practices and innovation.

    Mr. Chairman, thank you again for the opportunity to discuss with your committee some of these issues and challenges facing our Naval Aviation Depot (NADP). On behalf of the dedicated Marines, sailors and civilian marines of NADP Cherry Point, I thank you for your support and interest in our endeavors to serve fleet needs.

    Mr. WELDON. Thank you, Colonel Jackson.

    Colonel Hayes.

    [The prepared statement of Colonel Jackson can be found in the Appendix.]


    Colonel HAYES. Mr. Chairman, committee members, good afternoon. I am grateful for the opportunity to appear before you to talk about Anniston Army Depot and the important contribution it makes to our national defense.

    Anniston Army Depot is vital to the nation's military readiness. We support many Army programs and other important programs for our sister services and allies through foreign military sales. The systems that we repair, rebuild and modify contribute significantly to the ability of our forces to deploy and generate the necessary fire power and tactical mobility needed to ensure victory.
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    This year, our workforce will execute 2.2 million manhours of maintenance workload. Included in those 2.2 million manhours are over 400 programs, divided into end items and major assemblies. We will work programs with quantities as low as one and as high as 8500. It is a very complex enterprise that becomes more challenging each year. We also have a role in the production of the interim armored vehicle and the new Abrams crusader common engine.

    Most of the workload is done on the installation but we have an extensive effort in supporting units in the field throughout the world and at their home stations. Anniston Army Depot is no stranger to forward deployments that support the Army's power projection role. As we celebrated the 10th anniversary of Desert Shield/Desert Storm, we were reminded of the contributions that over 300 of our employees made in southwest Asia.

    One of our significant challenges to future operations is workforce revitalization. The current average age of depot employees is 48, with an average of 21 years of service. We believe we can partially meet the challenge with the current local labor market and through greater use of trainee programs such as apprenticeships and cooperative education.

    Our facilities are old. As we recapitalize our weapons systems to ensure that they are conflict ready, we must also modernize the infrastructure used to support these systems. Improved facilities are essential to improving the quality of life of our employees. Depot maintenance is often hot, dirty and dangerous; and to the extent possible, we must improve the working conditions and make the workforce more comfortable and safer in the execution of their duties. Employee recruitment opportunities will be affected by working conditions at Anniston Army Depot, especially as prospective employees compare our conditions to those at the automotive manufacturing facilities in Alabama.
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    In conclusion, I again state that Anniston Army Depot is vital to the nation's military readiness and the Army's transformation to the 21st century. The depot's workforce is there during times of crisis and it is there every day taking on the hard jobs. Depot maintenance is a sophisticated business that has served the nation well, but we must modernize our systems, our processes and facilities, and I thank the committee for this opportunity to appear before you.

    Mr. WELDON. We thank you, Colonel.


    [The prepared statement of Colonel Hayes can be found in the Appendix.]


    General HAINES. Good afternoon, Mr. Chairman and members of the committee.

    I appreciate the opportunity to be here and testify in front of you this afternoon on some critical issues that affect our depots. I am also proud to be representing the 24,000 men and women who work at Robins every day and particularly the 13,000 that work in Warner-Robins Air Logistics Center.
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    Robins is the designated center of excellence for air mobility aircraft, so in that capacity, we repair the C–130, 141 and the C–5 and we are responsible for strategic lift. In that role, we not only do depot maintenance, but we provide life cycle management, engineering, modernization; and so we have the whole integrated weapons system management complex. We also provide management and maintenance for common avionics, electronic warfare, test equipment, F–15 fighter aircraft, vehicles, test equipment and more.

    I believe the long-term viability of our depot is not centered on core and 50/50, although those are very important principles, but what really depends on the future of our depots is the efficiency and effectiveness of our operations. In this light, my people are focusing on the basics—quality, timeliness and cost. And we are adopting lean principles throughout our operations. The results are gratifying. C–5 aircraft delivering in June will be delivering in one-third less flow days than those delivering a year ago. The same for the C–141.

    In the F–15 wing shop, we have streamlined the operation and cut five and a half flow days out of that operation while simultaneously moving 30 personnel off that function into another workload in another shop.

    In avionics, we achieved as much as a 63 percent productivity gain in electronic warfare with no increase in personnel.

    We are writing flexible spares contracts focused on response times with longer term arrangements for successful and proven performers. Our goal is to improve supply effectiveness ten percent this year, and we are making progress toward our goal.
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    Let me digress one second. Much of the debate this morning and at the heart of this depot debate is one issue and that is the perception that our organic depots are inefficient, that they cost too much and that that inefficiency and cost is causing us to degrade the modernization and the readiness of our force. Let me offer something to you that as I looked for ways to measure our effectiveness, what I did is went back to some competitions we had in the 1997–1998 time frame that are now complete and I wanted to see how the depots did in those competitions. And here it is. For the APG–63 radar, a $6.8 million competition, the depot bid was $2 million less than the nearest commercial competitor and we delivered on cost, on schedule.

    The C–141 center wingbox done at Robins, we saved $33 million over the next lowest competitive bid.

    For the ARC–186, $230,000 on a $3.7 million contract.

    So the issue is not who is more effective, private industry or public depot. The issue is competition. While we are improving our processes, there are issues which do hinder our programs.

    During the last decade, we deferred significant amounts of facility maintenance and repair. We can defer that repair no longer. While our overall capacity to do our work is sufficient, there are specific bottlenecks that must be addressed. Our most serious bottleneck is the lack of a large aircraft corrosion control facility. We have that facility in the Palm to address that need.

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    We must also replace worn out test equipment in our avionics and electronic warfare repair areas, and we programmed that in the working capital fund.

    During our strategic planning session, we assessed our ability to maintain our core capability over the next 20 years and we found that while current workloads are more than sufficient to effectively use our current capacity, this is a short term phenomenon. As the C–141 retires and the number of Air Force F–15s draw down, our overall airframe work enters a long and steady decline. As that occurs, my organic capability on strategic airlift is dramatically reduced; and unless we get new core designations such as the C–17, we will be seriously under our core requirement.

    As the technology repair center for airborne electronics and electronic counter measures, we are also faced with a multitude of challenges. First, the technology changes at an incredible rate and we continually face the challenge of replacing obsolete and out of date equipment and spare parts. Many of these components and spare parts were fielded 20 years ago and industry simply is not in the business of manufacturing those components, so we do that ourselves.

    Second, with fewer new aircraft entering the inventory and the improved reliability of the modernized avionics equipment, I anticipate the overall workload in this area will decline. This decreases the total volume needed for core but it creates a requirement that we equip and train our workforce to take on these new technologies. There is a danger that this will not happen. As new systems coming down the line have been designated as either commercial off-the-shelf (COTS) or contract supported for life and those assignments are not being given to or at least even considered for organic repair.

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    In software, the overall workload trend is up as systems become more and more software intensive. However, just as in the area of hardware, the organic share is increasingly comprised of older systems. The software expertise, especially in the electronic counter measures, takes time to mature and I am concerned that our core competencies in this area will atrophy without the assignment of new technology.

    In summary, we continue to define and evolve sound business practices. Our key thrusts are flexibility and responsiveness. We must be prepared to rapidly respond to changing conditions and threats and we must do it economically and effectively. We have moved from an era of large inventories, repaired in large batches to a pool system of repair on demand. We have continued the depot repair enhancement program for component repairs initiated as part of the overall Air Force move toward lean logistics, and we are continuing the evolution to the latest concepts of lean practiced in the private sector.

    Our aircraft repair enhancement program has applied similar concepts of lean to our airframe and aircraft repair shops. We are developing a workforce with the skills and training to rapidly respond to the ebbs and flows in work, and we are implementing a variety of contracting approaches with vendors to improve the supply of critical parts for our depot shops.

    I am proud of the way our people of Robins are stepping up to today's challenge. We are continuing a tradition of innovative thinking that has enabled us to meet Air Force logistics challenges for the past 60 years. We are proud of that tradition and we will continue to support the Air Force just as we always have, with sound planning, creative approaches and dedicated people. The depth and breadth of capabilities at Robins and our sister depots constitute a unique and critical war fighting support capability, one that is both responsive and efficient. Our personnel are focused on one thing, that is giving our war fighters the support they need.
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    Thank you and I look forward to your questions.

    Mr. WELDON. Thank you, General.


    [The prepared statement of General Haines can be found in the Appendix.]


    Colonel CERNEY. Chairman Weldon, distinguished members of the committee, it is my privilege to address you from a depot commander's perspective. I will focus my comments on the Marine Corps Maintenance Center, Albany, Georgia.

    The Maintenance Center is a working capital-funded business employing a multi-commodity maintenance concept. Our goal is to provide the Commandant of the Marine Corps with timely maintenance services and the agility required to support a wide range of rapid response missions on a global scale.

    Since opening in 1954, the Maintenance Center has maintained a state of the art facility to support our customers. We are environmentally compliant in all areas and continuously plan for future compliance. We are less than 60 days away from taking ownership of the last MILCON project currently planned, that being a new engineering equipment building. This building will replace 20 sunshields, improving the working conditions of our people, our most valuable asset. Additional facility and equipment modernizations currently planned are within capital purchase program authority.
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    The Marine Corps is currently modernizing weapons systems, investing more funds for acquisition and less for Legacy equipment maintenance. As these funds are applied to modernization of the force, customer equipment maintenance orders will decline by 40 percent over the next two years. We have engaged the marketing effort to increase our customer base, but additional customer orders will not significantly materialize for several years.

    To coincide with the workload decline, we must adjust the size and composition of an aging workforce and provide the means for upward mobility. We have sought voluntary early retirement and voluntary separation incentive pay as a means to accelerate reshaping the workforce.

    To further improve our competitive posture, we have worked diligently to implement better business practices for the last three years. On 5 April 2001, the Maintenance Center Albany will receive its ISO 9002 qualification from the Defense Contract Management Agency.

    We have also implemented manufacturing resource planning too, to provide a very disciplined approach to floor scheduling and material control. We are also pursuing the incorporation of theory of constraints into our MRP–2 system to further refine our scheduling ability and reduce repair cycle time.

    In conclusion, improved business practices, decreased unit cost, consistent scheduling and an increased teaming with commercial industry are all keys, elements of a solid depot foundation. We will continue to build on this foundation and look forward to expanded opportunities with industry. We do not intend to compete with industry, but rather partner, team to provide a win-win mutual support while maintaining the capability for surge, mobilization, sustainment and reconstitution of Marine forces.
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    Our most significant challenge is to quickly reshape the workforce to both avoid a reduction in force and maintain a competitive posture.

    Maintenance Center Albany, as a multi-commodity maintenance center, fully supports the Marine Corps rapid response mission and is an integral part of our nation's 911 force readiness.

    Thank you for your continuing support and allowing me to present my perspective on the Marine Corps depot maintenance today.

    I am available to answer your questions concerning the Maintenance Center.

    Mr. WELDON. Thank you, Colonel Cerney.

    Colonel Hart.

    [The prepared statement of Colonel Cerney can be found in the Appendix.]


    Colonel HART. Chairman Weldon, distinguished members of the committee, I am Colonel Fred Hart, Commander of the other Texas depot, Red River Army Depot.

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    I am pleased to appear before the House Subcommittee on Military Readiness and to provide the Subcommittee with information on what I feel is the best depot in the Army, Red River Army Depot. I will present a perspective on some of the issues, challenges facing Red River today, tomorrow and in the future.

    I can, without a doubt, tell you that Red River Army Depot is a strategic national asset with some 60 years of service to our nation, our Army and its soldiers. Red River has always, and continues today, to be a world class readiness platform providing responsive worldwide support to our most important customer, the soldier in the field.

    Because the Red River's dedicated depot support, our Army's readiness rates are good, our soldiers remain trained and ready. At Red River, soldiers and readiness are our top priority.

    Today, Red River is the U.S. Army's depot for Bradley fighting vehicle systems, multiple launch rocket system and DOD's only track and road wheel rebuild facilities. These are our core maintenance competencies. We are also actively engaged in the Army's transformation through support of the Legacy force, recapitalization and technology insertion. I am proud to tell you that Red River's entire production operations has achieved recognition and earned registration under stringent ISO 9002 quality management system. This is a significant accomplishment that places us on a level playing field with industry and significantly enhances our quality and performance.

    Through innovative programs and partnering with industry, we have entered into a tactical wheeled vehicle recapitalization partnership with Oshkosh Truck Corporation on the heavy expanded mobility tactical truck or HEMTT. This is a straight-forward 50/50 split of recapitalization workload and production is already underway.
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    We are also finalizing a similar partnering agreement for a Bradley recapitalization program with United Defense Limited Partnership, or UDLP. This will be a workload share agreement and will include a plan for total depot level capability for the Bradley A–3 no later than fiscal year 2004. This is a real risk mitigator for the Army.

    Looking towards the future, Red River has embarked on a plan to ensure our support to the Army's transformation. We are now working with the National Automotive Center on hybrid electric wheeled vehicles, an area that we believe will be vital to the objective force.

    We also have initiated a partnership with the National Center for Manufacturing Sciences as a means to ensure we stay abreast of the latest and most efficient manufacturing techniques, equipment and processes.

    Currently, I see two key challenges facing Red River. The first is maintaining a viable depot maintenance workload that supports Army transformation and ensures readiness through funding of recapitalization programs. Recapitalization programs are absolutely vital to stable and balanced depot workload. To accomplish this workload, we must maintain a depot industrial base of strategic value and skilled artisans who can deploy with soldiers anywhere in the world within 24 hours to support the war fighter. This ties directly to our second challenge facing Red River; that is, infrastructure and people.

    First, regarding infrastructure, our facilities reflect the wear and tear of many lean years of reduced or delayed facility maintenance. Facility modernization is delayed due to its overall economic impact on depot budget and customer rates. The timely implementation of projects remains an area that must be addressed if we are to keep our depots flexible, capable and competitive well into the 21st century. Our workforce must also be replenished and rejuvenated. The mean age of the depot employee is 49 years and at Red River, 80 percent of them will be eligible for retirement by 2005.
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    A progressive step towards revitalizing our skill base is the Congressionally funded apprenticeship program. That program has provided Red River 12 apprenticeship positions and serves as a much needed influx of new talent and ideas. Apprenticeship and co-op programs will be essential to sustaining a skilled artisan workforce.

    Red River takes great pride in delivering products and services that are on time, within cost and of the highest quality and standard. We do not work for a profit and the taxpayers are our shareholders. We work for the good of the nation and our soldiers who are on point for the nation. When you visit Red River, you will see this soldier everywhere—if you will indulge me a minute. It is our workforce connection to our ultimate customer, the soldier. You will see the fire in the eyes of our workforce when they tell you we build it as if our lives depend on it, theirs do.

    Red River Army Depot, our best, nothing less.

    Gentlemen, I thank you for the opportunity to speak on behalf of the outstanding workers who comprise Red River Army Depot, a workforce that represents Arkansas, Texas, Louisiana and Oklahoma. I will now be more than happy to take your questions. thank you.

    Mr. WELDON. Thank you, Colonel.


    [The prepared statement of Colonel Hart can be found in the Appendix.]
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    Captain ROUM. Thank you for the opportunity to come before you today to discuss some of the issues and challenges facing Naval Aviation Depot, Jacksonville, Florida.

    The Jacksonville team provides a full range of engineering, logistics and depot-level aviation maintenance services for aircraft, aircraft engines and aeronautical components. Naval Aviation Depot Jacksonville exists for one purpose, to maintain a ready and controlled source of critical depot repair capability in support of critical mission requirements during peace time and war.

    We exist in a challenging environment supporting fleet requirements which are driven by worldwide events. This influences our day-to-day business, driving extreme fluctuation to the planning, scheduling and staffing efforts, while we still produce the highest quality, best value products and services. Naval Aviation Depot Jacksonville continually meets this challenge while racking up world class achievements in the maintenance, repair and overhaul community. We are the first government activity to receive ISO 9000 certification of a business unit to the new 2000 standard. We are currently operating a state of the market maintenance repair and overhaul version of manufacturing and resource planning business practices and software in partnership with Western Data Systems. It is being emulated by commercial concerns in the U.S. and other countries.
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    We maintain the ability to go anywhere any time to support our fleet customers and provide services they cannot get anywhere else. A prime recent example was a several month deployment of 18 skilled depot employees to Aviano, Italy to support vital EA–6B prowler operations during the Balkan air campaign.

    Naval Aviation Depot Jacksonville is committed to sustaining this recognized level of performance. Equipment, facilities, workload and people are critical to this effort. While we have adequate equipment and facilities, they must be modernized to keep pace with emerging maintenance technologies. This modernization will minimize our infrastructure cost by reducing maintenance efforts and by providing better utilization of our workforce.

    NADP Jax is not a business; however, like a commercial enterprise, the cost of doing business is spread across our workload base. Our assigned workload is forecasted to decline over the five-year defense plan as Legacy platforms such as the F–14 and older P–3Cs reach the end of their useful lives. Sufficient workload is required to maintain the production efficiencies the fleet now enjoys while continuing to provide products and services at a cost that remains within the operating budgets.

    The baby boomer generation is approaching retirement in significant numbers. The average age of our workforce is nearly 48 years. Skilled artisans, engineers, logisticians and managers are in high demand in the aerospace industry today. Commercial human resource systems are extremely responsive, often filling personnel vacancies within weeks. Federal hiring practices must be equally responsive.

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    Naval Aviation Depot Jacksonville offers a potent capability to the war fighter and enables the Navy to satisfy its statutory obligations for ready and controller source of depot maintenance. That capability needs to be nurtured through adequate investment and modernization and sustainment, responsive practices to attract and retain knowledgeable employees and ample levels of technology relevant workload to stay affordable.

    We bring to the table the best that private industry has to offer, a business mindset about cost control and efficiency, a business-like relationship with our customers inside and outside the Navy and employment of cutting edge business practices and tools. The bottom line, however, we are not about profit or shareholder equity. We are about readiness. That is our sole reason to exist and in the final analysis, it is the only goal we have.

    Mr. Chairman, thank you again for the opportunity to discuss with the subcommittee some of the issues and challenges facing our Naval Aviation Depots.

    Mr. WELDON. Thank you, Captain.

    General Johnson.

    [The prepared statement of Captain Roum can be found in the Appendix.]


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    General JOHNSON. Mr. Chairman and members of the committee, thanks for the opportunity to discuss the challenges that we face in our ALCs today.

    First, I want you to know that Tinker Air Force Base is a national asset and my boss and I, General Lyles, intend to keep it that way.

    Second, the future is bright.

    And third, I am very excited about it.

    Our mission to acquire and sustain the world's best aviation systems in partnership with our war fighters and suppliers ensure America's aerospace power is ready for war contingencies and peacekeeping operations. We do this mission well, as demonstrated by this past decade of operations in Desert Storm, Somalia, Haiti, Bosnia and Kosovo when aerospace power readiness was tested again and again.

    Oklahoma City Air Logistics Center is much more than just a maintenance depot. As an Air Logistics Center, we provide integrated responsive support for aerospace readiness. We do this by providing four key elements of integrated weapons systems support. One is program management, two is engineering, three is supply chain management and the fourth is depot maintenance, for not only the United States Air Force, but also for the United States Navy.

    Our workload grew substantially after San Antonio and Sacramento Air Logistics Centers were selected for closure or realignment. Eleven types of workloads and over 2700 maintenance and weapons system management positions have now successfully transferred to Tinker from these centers. But what is most important about these moves is that this huge complex workload transfer took place without missing a beat in supporting our war fighters.
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    Let me speak briefly about three key challenges we face, and I put them in the categories I simply call three Ws—the workplace, the workforce and the work tools. The last ten years of depot infrastructure drawdown and the constrained budgets have impacted our depots and in time will continue to erode our readiness as our effectiveness and efficiencies decline while operating at maximum capacity. Our Air Force people are working tremendously hard, but that one-two punch of both aging facilities and aging aircraft fleets is taking a toll on efficiency and effectiveness, what I call double-E.

    Tinker's infrastructure is mismatched for today's workload. Many of our aircraft facilities were designed and built for simple, predictable aircraft maintenance in a flow through assembly line process during World War II. The evolution of workloads from smaller airframes to larger, more complex systems resulted in aircraft that today are actually oversized or outsized compared to the original design of the facilities.

    Additionally, our aircraft are aging. You know that. B–52s, KC–135s, E–3s. As such these workloads involve in depth inspection processes, highly technical and lengthy structural repair procedures and state-of-the-art equipment in back shops. Thus, the impacts of aircraft size and aging contribute to declining effectiveness and efficiency and have strained Tinker's facilities beyond their original design.

    Our Air Force Strategic Depot Plan is being developed, which will identify the capabilities necessary to overcome these limiting factors to both efficiency and effectiveness and readiness better to support our aging weapons systems. This will also enable the ALC to accommodate future large aircraft heavy maintenance workload such as potential wide-body type aircraft replacements for our tankers and Airborne Warning and Control System (AWACS).
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    Because Oklahoma City is also an organic jet engine repair and overall facility for the Air Force, other new workloads in the horizon, the Dash-229 engine on the F–15/16, the F–19 on the F–22 and even further in the future years as the joint strike fighter engine. Therefore, I must tell you, renovating and modernizing our workplace will be an essential part of the Air Force Strategic Depot Plan.

    Equally important to our overall plan is our workforce and you have heard many words by all of us on that. An experienced, skilled and educated workforce is a precious commodity that is slipping away as time marches on. One-third or more of our civil service employees become retirement eligible in the next few years, and this will reach 60 percent by the end of this decade. Projected retirements and future workloads will present a tough competitive environment with demand for the right mix of professional skills. These are scientists, engineers, craftsmen, managers and administrators. Workforce shaping is paramount. The challenge will be met by partnering with our local colleges, universities and vocational technology centers to educate, train and recruit these individuals with specialized skills, as well as the leadership traits necessary to lead a workforce. The competition for credentialed employees will be fierce and that is why the alliance that we at Tinker have forged with our education, training and learning institutions in Oklahoma is of strategic importance.

    Congressman Weldon, Mr. Chairman, you hit the nail on the head—how do we balance public depot and private industry industrial bases and keep both of those viable. I must tell you, partnering and dual sourcing with industry as we do today will be the key linchpin to success in the future.

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    Some examples of where partnering is paying off by contractor employees working side by side with us on Tinker Air Force Base is our B–2 software facility, our E–6 Navy supply support and in our own propulsion business area competition teammates, the TF–39 and T–56 engines. Partnering has also helped with our aging workforce problem. Thus partnering and dual sourcing is an important risk reduction factor for the future.

    In addition to the first two Ws, workplace and workforce, we are addressing a third W, work tools.

    Air Force Materiel Command and our ALCs and our industry partners are leveraging technology in ever-expanding applications across all areas of weapons system support and our maintenance activities especially where we are developing information technology systems to begin providing real time financial management information to all levels of our organization. Our program managers are moving into the e-commerce as we electronically pass our requirements to our partners in the aviation industry.

    Having a modern, efficient workplace, a well-trained, skilled workforce and leveraging work tools like information technologies will enable us to effectively and efficiently provide responsive support for aerospace readiness. A key venue of getting our ALC mission accomplished is providing full-up integrated weapon system management. And I might add too that we also are ISO 9000 registered in both aircraft and engines, and this has postured Oklahoma City for the future.

    Looking back over this past dynamic decade of change, one can see from the merger of systems and logistics commands, we have shaped Air Force Materiel Command into a formidable team postured for the next decade and beyond. We face many challenges in providing responsive support for aerospace readiness. As our expeditionary aerospace force continues to mature, Oklahoma City will continue to move forward with our workplace, our workforce and our work tools initiatives to ensure global vigilance, that is our E–3 AWACS and our Navy E–6 Tachomo jets; global reach, our KC–135 tankers; and global power, all of our bombers, B–1, B–2, B–52s as well as our cruise missiles and the jet engines that propel them are respected deterrents of aggression and I will tell you, if called upon, can strike at a moment's notice.
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    Maintaining viable, vibrant air logistics centers that are effective and efficient is paramount and our commitment to that is unshakable.

    Mr. Chairman, thank you very much for the opportunity to speak and look forward to follow-on questions.

    Mr. WELDON. Thank you, General.


    [The prepared statement of General Johnson can be found in the Appendix.]


    Colonel WEIDENTHAL. Chairman Weldon, Congressman Ortiz and distinguished members of the Readiness Subcommittee, I am Colonel Kurt Weidenthal, II, Commander of Tobyhanna Army Depot of the Army's Communications Electronics Command. It is an honor to appear here today to provide the Tobyhanna perspective of depot maintenance and to discuss our number one priority, the readiness of our armed forces.

    Tobyhanna has been the Army's center of excellence for communications and electronics repair, overhaul and fabrication. As a result of base closures and other defense changes, Tobyhanna is now the Defense Department's center of excellence for communications, electronics systems. In this fiscal year, nearly 40 percent of our workload will be performed for other services. So our contribution to readiness across DOD continues to grow. We repair and overhaul hundreds of CE systems from tactical radios, fire-finder radars, night vision devices and missile guidance systems to the Defense Department's strategic satellite communications terminals.
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    Tobyhanna personnel accomplish their mission from our modern physical plant located in the Pocono Mountains of northeastern Pennsylvania. We have been able to make our facilities state of the art in a rapidly changing communications/electronics environment. Complicating this facility, we deploy personnel on temporary travel and with technicians permanently stationed at sites worldwide to deliver timely and effective assistance to our military personnel. Tobyhanna has a diverse product line and equally varied capabilities. Our extensive engineering and fabrication capabilities have made Tobyhanna the leader within DOD for systems integration and system assembly. They enable us to make significant contributions as our Army transforms into a force that is lighter and more mobile, but which retains the lethality of our current heavy forces.

    Using these capabilities, we recently accomplished a quick reaction project to design and install global positioning system base equipment into 70 vehicles in Bosnia. This project provides location reporting capabilities and improved communications for our soldiers performing dangerous border patrols. This effort will help prevent a reoccurrence of the incident when hostile forces in that region captured three of our soldiers a few years ago.

    The communications/electronics systems maintained at Tobyhanna are a force multiplier. We support critical stand-alone systems as well as communications electronics embedded in all other major weapon platforms. To paraphrase a well-recognized commercial, we do not make the M–1 tank or the Blackhawk helicopter, but the communications/electronics systems we maintain make those weapons systems better and more capable to fight and win.

    That is why we are concerned about the recap of our major weapons platforms, which are so vital to a sustained war fighting capability. But we must not forget to recap the embedded components of those platforms such as the communications/electronic subsystems. Without these CE subsystems, the effectiveness of other recap systems such as the M–1 and the Blackhawk will be diminished. We are concerned about these and other impacts on our workload. These concerns include the need for a stable or increasing workload and the continued addition of new systems workload to our core base. These are key factors in maintaining the traditionally low labor rates charged to our customers.
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    Another concern, ironically, is our greatest strength—a talented and productive workforce. The average age of our employees is 49 years and about half of our personnel will reach retirement eligibility within the next five years. A declining workload over the last 10 years, along with low personnel attrition rates, has prevented us from developing our future workforce. We now are addressing these concerns with several initiatives. Since the 1970s, we have used a U.S. Department of Labor certified electronics apprentice program to educate and train the highly skilled technician. We re-introduced this four-year program in 1999 and plan to add classes annually to develop our workforce of the future.

    Last year, we introduced a co-op education program with two local schools, offering associates degrees in electronics. Upon graduation and successful job performance at the depot, these students become eligible for permanent employment at Tobyhanna. Tobyhanna has emerged from more than a decade of unprecedented change and DOD's center for communications/electronics maintenance. With our state of the art facilities, with growing experience and support of DOD services, with a team-directed business focus on productivity, cost and efficiency, with employees who exceed the DOD standard for production direct labor yield, with the benefits derived from a stable workload and with our workforce initiatives, Tobyhanna is poised to continue its tradition of excellence and stands ready to render even greater service to our armed forces now and in the future. We are proud of our quality of work and customer satisfaction.

    It has been my good fortune to serve as Commander of Tobyhanna Army Depot and I greatly appreciate the opportunity to share the Tobyhanna story with you today. I am prepared to answer any question that you may have for me at this time. Thank you.

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    Mr. WELDON. Thank you, Colonel.

    Captain Chenoweth.

    [The prepared statement of Colonel Weidenthal can be found in the Appendix.]


    Captain CHENOWETH. Mr. Chairman, distinguished members of the committee, thank you for the invitation to appear here today and discuss some of the issues and challenges before Naval Aviation Depot North Island.

    The Naval Aviation Depot faces three primary challenges, and they are an aging aircraft, aging workforce and aging brick and mortar. In spite of these challenges, the depot remains clearly focused on its primary mission and that mission is readiness.

    In the successful achievement of our readiness mission, Depot North Island bears many similarities to our private sector colleagues. Like commercial industry, we seek to exercise the best established repair practices, using state of the art information methods and production tooling with a highly skilled workforce. And while it is true that the Naval Aviation Depot at North Island strives to operate in the most businesslike and efficient fashion possible, we differ from commercial industry in at least one vital concern. We do not have a contract with Naval Aviation, we have a covenant. With uniformed sailors and Marines, ours is a shared tradition, a heritage and a special bond of kinship that has existed since Naval Aviation's beginnings at Naval Air Station North Island in 1917.
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    Throughout the Naval Aviation systems team, we consider ourselves full partners with our uniformed fleet operators and maintainers and we share directly in their responsibility for our nation's readiness.

    Working on aging aircraft and their associated components is our specialty. It is a specialty whose complex working principles have been refined over decades of experience. No other enterprise provides such a flexible and innovative support to as diverse a product base as do our organic depots. In sustaining an aging aircraft inventory our engineering, logistics and repair capabilities are uniquely coupled to provide world class support to our war fighters. One example of this locally at North Island is the FA–17 Hornet center barrel replacement, a complex repair process developed by the engineers and artisans of North Island. When commercial enterprise offered that this capability was not feasible, the men and women of North Island accepted the challenge and proved otherwise. To sustain and ensure the future of such organic capabilities, such unique and innovative organic repair capabilities, investments are required in both our technological and our human capital.

    Organic depots must be included in the life cycle support planning of all new platforms and systems. The infusion of new technology and its associated workload are critically important if organic depots are to maximize their readiness contributions through the efficient exercise of relevant repair technologies.

    As concerns our aging workforce, we are competing for workers in an extremely challenging labor market. Our best solution for gaining the workforce of the future is to grow our own next generation of skilled artisans. As we pursue school to work and apprenticeship programs, it is important to recognize that like capital equipment and new repair technologies, these human capital programs are important investments in the future of our organic depots.
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    In closing, Naval Aviation Depot North Island and her sister depots cherish our unique kinship with the uniformed operators and maintainers of Naval and Marine Corps aircraft. Ours is a bond of trust that has been forged over eight decades of service to our country and today, our depots remain efficient enablers of our worldwide deployment of ready Naval forces. It is my distinct honor to serve with and to represent the men and women of Naval Aviation Depot North Island and I will gladly fly any aircraft they have their trademark of craftsmanship impressed upon.

    Mr. Chairman, I thank you for the opportunity and members of the committee, I stand by to answer your questions.

    Mr. WELDON. Thank you, Captain.


    [The prepared statement of Captain Chenoweth can be found in the Appendix.]


    Colonel RIVERS. Mr. Chairman and distinguished members of the committee, it is my privilege to provide testimony on the important matter of depot level maintenance.
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    As depot commanders, you have given us a mission and the mission is to perform depot level maintenance on military equipment in order to ensure the armed forces of the United States are able to meet training, operational, mobilization and emergency requirements without impediment. We are accomplishing the mission.

    Today at Barstow, we have workloads sufficient to maintain core capabilities; however, the forecast for future years indicates a declining trend. Our Materiel Command (MATCOM) headquarters is aware of this negative trend and is developing initiatives to maintain our core levels. They understand, as does this committee, that all good things in depot operations emanate from sufficient workload.

    For our part, the challenge is clear. We must remain customer focused and excel in our competitive priorities of throughput, quality and cost. We are working daily to meet this challenge and today, you have a maintenance center that is the only ground combat maintenance depot located in the western region of the country. We provide multi-commodity service for wheeled vehicles, tracked vehicles, engineer equipment and communications and electronics. The center provides quality support to a variety of customers, both large and small quantity requirements. We are strategically located to support the national training center at Fort Erwin, the Marine Corps Air/Ground Combat Center at Twenty-Nine Palms and Marine forces at Camp Pendleton, Okinawa and Hawaii.

    Some of our process improvements include qualification as an ISO 9000 organization, implementation of better business practices such as the theory of constraints and manufacturing resources planning, establishment of materiel control centers and earned value management. Some of our equipment modernization includes advanced air pollution control system and plastic media blast process, calibration using laser technology, and machining using water jet cutting equipment, bar-coding identification and tracking, image intensifier and night vision diagnostics and repair; and just recently on Wednesday, it was my distinct pleasure to open our $3.4 million test track facility.
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    Competitiveness, modernization and safety are important elements to our continued success. With these in mind, one of our planned procurements includes robotic equipment to make our paint processes more efficient while providing additional health protection to our employees. Programs such as commercial technologies for maintenance activities, man-tech and partnerships with universities such as Penn State are helping us to insert technologies to meet 21st century requirements. Your Maintenance Center at Barstow has 824 innovative, skilled and patriotic professionals dedicated to improving equipment readiness.

    Mr. Chairman, efforts by this committee have helped to maintain and strengthen this national asset. I thank you and the distinguished members of the committee for your support and the opportunity to present testimony on this most important issue. Thank you.

    Mr. WELDON. Thank you, Colonel.

    And finally, Colonel English.

    [The prepared statement of Colonel Rivers can be found in the Appendix.]


    Colonel ENGLISH. Good afternoon, Mr. Chairman and distinguished members of the committee. I am Colonel Bob English, Commander of Letterkenny Army Depot in Chambersburg, Pennsylvania.
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    I thank you for this opportunity to talk to you today about Letterkenny and about depot maintenance issues.

    Readiness is always the Army's top priority and Letterkenny's highly skilled employees, our diversity of equipment and facilities posture us as a world class provider of missile system maintenance readiness for our Army. In the missile business, your first shot had better count and we pledge to those soldiers manning Patriot, Avenge, Tow and other missile systems that they can count on Letterkenny. Quality is the hallmark of our ability to provide maintenance readiness to soldiers. Our depot-wide quality management system has been certified by the Army. This certification, equivalent to the industry ISO 9000 standard, makes us a competitive provider in the marketplace and inspires confidence in our customers.

    We are a global organization, and our workers know how to perform. We exceeded our performance standards and goals for cost and schedule last year and are on track to do the same this year.

    With all this good news, we still have challenges. The most important component of our capability is people. My workforce is aging, and I need flexibility to hire and train the next generation of workers. We are beginning an apprenticeship program this year, but we must continue to receive your support for this program and follow on programs.

    A key to sizing my workforce is being able to predict my workload. A predictable and stable workload is critical to having the right number and type of skills. A stable workload also gives me the greatest efficiencies from our operation. This spells readiness for soldiers.
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    Our future workload is keyed to Army transformation. Our mission in this is to recapitalize the Patriot, the Army's premier air defense system. We have been at the forefront of the recapitalization effort and have already completed pilot programs on the six components of the Patriot system. We are doing this in a partnership with Raytheon, the original equipment manufacturer. We do the rebuild work at Letterkenny, and Raytheon provides spare parts and performs technical upgrades.

    I see a bright future for Letterkenny with recapitalization and continued partnerships with industry where it makes sense. However, our equipment is rapidly aging and we are falling further and further behind industry in our capability. We need to modernize our equipment to stay competitive and we need help with funding to do that.

    I believe that depot maintenance is a critical and cost-effective resource for ensuring readiness of the force. Our workforce, with their unique skills, constitutes the most valuable resource for maintaining readiness and supporting the needs of the soldier. This workforce, combined with responsible investments in depot infrastructure, will provide our Army with an immediate response capability, multi-mission flexibility and risk mitigation.

    Thanks again for this opportunity to appear before you today and I look forward to your questions.

    [The prepared statement of Colonel English can be found in the Appendix.]

    Mr. WELDON. Thank you, Colonel and thank each of you for your testimony today. Your formal statements, if they differ from your oral statements, will be entered into the record without objection; but most importantly thank you for your service to the country.
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    Let me, first of all, say that I would like to ask you, for the record, each of you, if you would provide, following this hearing at some appropriate time, your specific suggestions about what we in the Congress can do to help you with your apprenticeship and co-op programs, if there are legislative changes that would help you in terms of expediting that process, and also if you could include dollar amounts that would allow you to complete the effort as it meets the needs of your depots.

    I do want to go through real quickly, and I want to ask you a simple question and I am going to follow it up with an unusual statement. I want you to each give me the total amount of employees that work at your facilities—I think I got it from a couple, but I'd like to go right down the list. Give me the total number of employees that are at your depot.

    Colonel DOCKENS. Approximately 2650.

    General BERGREN. Ogden has about 11,000.

    Mr. WELDON. Eleven thousand?

    General BERGREN. That is right, 11,000; yes, sir.

    Colonel JACKSON. Sir, Cherry Point has 3926.

    Colonel HAYES. Anniston has 2395, sir.

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    Mr. WELDON. 2395.

    Colonel HAYES. 2395.

    General HAINES. Sir, the base has 24,000, the center has 13,000, Robins.

    Colonel CERNEY. Maintenance Center has 810, sir.

    Colonel HART. Red River Army Depot has 1274, sir.

    Captain ROUM. NADP Jacksonville has 3652.

    General JOHNSON. Tinker has 24,000 and out of that 14,000 is the ALC.

    Colonel WEIDENTHAL. Tobyhanna Army Depot, sir, has 2700.

    Captain CHENOWETH. North Island, sir, has 3250.

    Colonel RIVERS. As mentioned in the statement, sir, Barstow has 824.

    Colonel ENGLISH. Sir, Letterkenny has 1095 in the maintenance depot and about another 700 government tenants on the installation.
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    Mr. WELDON. Thank you all. The reason I asked that question, we hear you loudly and clearly and you all heard the testimony earlier about the need for modernization and the need for dealing—adequately dealing with the personnel issue. And you all are the experts in that area. And we want to respond, but we have a bigger problem that is driving our situation in Washington that you need to be aware of.

    In every major poll that was taken over the past year, where the American people reflect upon their concerns for the nation, defense was dead last—dead last. The American people, for whatever reason—and I happen to think it was because they have been lulled into a false sense of complacency—the American people are convinced that the military is getting all that it needs, that we do not have to put more resources in. You and I know and the Members up here know that the threats are not only continuing to grow, they are growing in ways you have never seen before. The threats of missile proliferation, the threats of weapons of mass destruction, chemical, biological, nuclear, the threats of cyber-terrorism and the threats of narco drug trafficking, all of which are affecting our homeland. Yet, unfortunately, as you heard in my opening statement, the resources are not coming. And it is not because the Congress nor President Bush do not want to provide the resources, our biggest problem is not logic or what needs to be done, our biggest problem is the American people do not understand. Now does that mean we want to go out and scare the American people? No. It means we have to be frank and honest with the American people.

    Now you, when I have this captive group here, have more of an opportunity to help us do that than perhaps any other single group because you represent, in my estimate, and my math might not be totally correct, over 60,000 people. Every one of your facilities has a union. I am not here to bad-mouth the unions because I am a Republican that works with the unions. But I can tell you I am fed up that the AFL–CIO in Washington keeps calling for lesser defense spending, which has cost us over one million union jobs in the last 10 years. We need to engage the unions locally. The local unions need to be brought in and let them know that they are losing their workers while their dues are going to Washington to advocate smaller defense budgets. That has got to change. And that is not a partisan message. We are here as Democrats and Republicans; but the unions in this country that work at your bases need to be our advocates because when they come to Washington and demand that the Congress respond, those Members that are not here that do not necessarily care about the defense of our country, will listen.
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    So my plea to you today is to go back to your bases and do not just continue to do the good job you are doing, engage your people, engage your people to engage the American people. And that means getting people out there doing the Lions Clubs, the Kiwanis, the Rotary, the Chambers of Commerce, the Women's Clubs, engaging in schools. You all have interactions with college campuses. We spend $10 billion a year of defense money on our college campuses, yet many of them are the hot bed of liberal activism against the defense community. They have to understand that if they want more co-ops and more apprenticeship programs and they want more research contracts, they have got to understand that that requires us to provide more resources for the military.

    So we have got a job to do. Believe me, we want to help you or we would not be here. We want to help you meet the challenges that you have and that is going to require, in the end, more resources. But we cannot expect the President nor the Congress alone to be able to do that heavy lifting when the American people are telling us back in our districts across America you are spending too much on defense, defense does not need more money.

    So what I am asking you to do is to use the assets you have, not to become partisan advocates because you cannot do that, but to simply help us engage the American people. The people that you work with are allowed to write op-eds to the newspaper. They are allowed to write letters to the editor. They are allowed to go out and speak about their job and about the challenges you are facing. They are allowed to help us engage the country.

    So the single biggest thing I can do to ask you to help us is to help us engage. Now this is going to be a constant and recurring message that we take around the country this year. And I do not mean to single out the labor unions, but as a friend of labor, I can tell you I am dismayed; but the national AFL–CIO, it is like they have not cared about the defense of our country. I will give you a specific example. I saved the letter from three years ago when we were discussing, like we are today, putting together an emergency supplemental, that would not just benefit our military but our entire federal government on needs for disasters. The AFL–CIO put out an alert to every Member of Congress and what did it say? We are going to rate your vote on whether or not you take all the money out of the defense budget. So the AFL–CIO was rating every one of my colleagues on whether or not they were going to vote to take all of the costs of that supplemental out of an already decreasing defense budget.
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    Well, I can tell you, a lot of those jobs that were lost were union jobs, union jobs of dues-paying members that worked at your arsenals and dues-paying members that build those helicopters and build those planes and ships; and yet, in the end, the very national organization representing them was attempting to convince us that we should take all of the money and continue to decrease defense spending.

    We have got to turn that around, and it is not going to happen just by being logical and just by being right. Every one of you have made a very logical case for the good job you are doing and the fact that we need to help you more. When we walked around the plant and saw the kind of work that is going on, we could see it in the eyes of the workers, they are happy with what they are doing, and they want to do more. We have to take that Navy from 316 ships, because our current shipbuilding account is taking us down to a 200 ship Navy—200 ships. You want to talk about problems. Tactical aviation—we cannot afford to buy three new tactical air (TACAIR) programs, we do not have the money to buy the FA–18 E/F, the Joint Strike Fighter and the F–22. We do not have enough money to buy the V–22 and the Comanche, we do not have enough money to buy missile defense systems and then also maintain the quality of life.

    So the fundamental challenge for us, and I challenge you, is to help us turn around the American people, to let them know that if they want our troops in Bosnia, Kosovo, Haiti, Somalia, East Temor, Colombia and wherever else they are today, they have got to pay the bill. If you do that, you will get our unequivocal support and help. And each of you can do that in your own way at your own installation.

    So again, I want to thank you and for the specific questions relative to our depots, I will turn to my colleagues.
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    Mr. Ortiz.

    Mr. ORTIZ. Thank you, Mr. Chairman.

    I think that during the past 10–12 years, we have seen many changes. Base closures—at one time most of America could identify with those of you who wear a uniform; but since those bases were closed, a lot of communities do not understand what the military really means to them. Yes, at one time maybe 10, 15, 20 years ago when they had a military base, they could see those of you who are in uniform going to work. Things have changed now and what we are faced with is a competition for all the money that is available in Washington, whether it is building a highway, whether it is veterans' hospitalization plan, whether it is Medicare, whether it is Social Security. And it is a competition. The Chairman is right, I think we have a responsibility to go out and to mold public opinion in favor of the military and we have to do that.

    We are strong because of your dedication and your commitment to this great country, and we hope to remain strong so that we can continue to enjoy the freedoms and liberties that we enjoy today.

    I am proud of the Corpus Christi Army Depot, and I am proud of the depots that you represent as well. Colonel Dockens, I am proud of your leadership; I am proud of your workers, how you have been able to turn things around.

    I just have a couple of questions I am going to ask you. What role does AWPS, the Army Workforce Planning System, you know, play in helping you manage your workload and the size of the workforce, and do you find AWPS a full usable program? And maybe you can enlighten us a little bit on that.
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    Colonel DOCKENS. Yes, sir. The AWPS program helps us immensely; it helps us all the way from the workload centers, as you saw during the tour with Manual Ortiz and the way he manages his work center, all the way up to the depot itself and the way that we manage assets and resources. But the real key is that it shows that the workload is loaded into the system and allows us to be able to look at what we need for resources and also for people—and people being the key. It also shows our higher headquarters what is needed to resource us with workers so that we can do any work that is needed.

    Another key, Mr. Ortiz, is the fact that internally, it allows us to be able to look at the different work centers, as I said earlier, but also to move the workforce around, to be able to react either to a safety of flight or to a declining work center to where one, such as we have right now, the engine section, has more workload. It allows you to be able to look in there and see and plan in advance to be able to move your workforce around.

    Mr. ORTIZ. When your ladies and gentlemen work on your supplemental with your commanders, you know, be sure to let them know exactly what you need because if we do not know what you need, sir, there is no way that we can address the needs that you have. We have to be candid with one another—let us know what you need. We will try to work with you and help you. I am so proud of the work that you do, and I am happy that you all were able to be with us today, and I know some of our colleagues have to leave because they have other commitments throughout their districts today.

    And again, Mr. Chairman, I want to thank you for coming to Corpus Christi, we have a great group of young men and women who have been able to lead in the military and we are proud of them.
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    So we thank you, Mr. Chairman.

    Mr. WELDON. Thank you, Mr. Ortiz.

    Mr. Hansen.

    Mr. HANSEN. Thank you, Mr. Chairman. I thank the Chairman for your courageous statement and I agree with you completely, and also the statement of Mr. Ortiz. It was a very great summation, if I may say so.

    Colonel Hayes, could I just ask you about the obsolete chemical warfare that you have got there at Anniston; where do you stand? You know, I represent an area that has got or did have 43 percent of it and I was just curious where you are standing because I am sure getting a lot of attention on you folks who have that.

    Colonel HAYES. Yes, sir. You know, of course, we are completing construction of a demilitarization facility out there and we are 99 percent complete. In fact, we should have the ribbon cutting ceremony on that in June. We have actually started a systemization of that plant; and it is, in fact, prepared to go on line as scheduled.

    The biggest problem, of course, is our ability to destroy that aging stockpile, and it gets more dangerous every day. So we have to get on with the destruction of that stockpile.

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    Mr. HANSEN. It really has not been too popular with some folks out there, has it?

    Colonel HAYES. Not across the board, sir, but throughout the community, they realize that we have to get rid of those chemical munitions and most of the community does, in fact, support that initiative.

    Mr. HANSEN. We have the same problem. But you know, it is interesting a lot of them do not understand that every time we get rid of one of those things, we have got a big problem off our hands. And I surely commend you for getting that rather tacky job done.

    General Bergren, you have finally got the transition done, have you not, everything from McClellan and Texas, Kelly, that you are going to get, you have got?

    General BERGREN. Yes, sir.

    Mr. HANSEN. Tell me what you expect to do now as one of the remaining ALCs; what's next on the horizon?

    General BERGREN. Well, we still have some areas to clean up on the transition; I think we are going to officially declare it over, but we do have some workload out on bridge contract; we have plans to bring it in now that we are ready to work it. For example, B–1B generators will come to us completely in June and we will be doing that exclusively for the Air Force.
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    We have some exciting things on the horizon that we are working. As I think you know, Congressman, we are the site for composites and low observables. We do all the B–1 flight control work for the Air Force and composites and low observables. We have had Lockheed-Martin visit, they are interested in talking to us about manufacturing parts for the F–22, which as you know, that is very different than repairing parts. They are talking to us about manufacturing parts. We have Boeing coming to see us this coming week to talk about the possibility of partnering some National Missle Defense (NMD) work that they are doing.

    So we have some workloads out there that have great promise. We have the workloads that we have had for so long, those are continuing to grow. In terms of aircraft that we are going to produce, we expect about 340 this year; however, next year, we are expecting that to increase to over 500. We have got a lot of mods; for example, on the A–10, we are doing the hog-up mod, that is the structural bolstering of the wing area so that we can take this airplane, this aging aircraft, out into the 2030, 2040 time frame.

    So we are looking ahead to quite a lot of work at Ogden, sir.

    Mr. HANSEN. Mr. Chairman, I have got to be excused, if that is all right. But I ask that if General Bergren could also be excused. Is that all right?

    Mr. WELDON. Yes.

    Mr. HANSEN. I thank you.

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    Mr. WELDON. First of all, we thank you for being here. As a full committee chair, we know the time constraints you have and we appreciate you spending the day with us.

    Mr. HANSEN. Thank you. It has been very informative.

    Mr. WELDON. With that, I will turn it over to Mr. Chambliss.

    Mr. CHAMBLISS. Thank you very much, Mr. Chairman.

    Mr. Chairman, this has been an unusual hearing in a lot of ways; and one thing that I think should be called to your attention is that we not only have Colonel Cerney, who is the base commander at the Albany Marine Corps Logistics Base (MCLB), but next to him is Colonel Hart from Columbus, Georgia, by way of not Berlin, but Berlin, Georgia.

    So if we just had somebody from, not Cairo, but Cairo, Georgia, we could complete the circle here. [Laughter.]

    Mr. WELDON. And they all eat grits.

    Mr. CHAMBLISS. All of them eat grits.

    I want to be very quick and very direct. General Haines, you have currently got a vacancy of about 350 employees at Robins Air Force Base, which I assume is an indication you are having a difficult time hiring workers right now. Would you explain what your problem is there and what we might do to help you improve that situation?
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    General HAINES. I would be glad to do that, Congressman Chambliss.

    Our major problem at this time is that the wages that we are paying for the technical employees and for the engineers are really not competitive with the market. We have some requests in to get extra specialty pay for engineers; this is over and above the original allocation, and to be able to target a similar request for critical wage grade technical skills. Now the second one will take some legislation because currently that is not allowed by OPM.

    In addition to that, we would love to have merit pay for supervisors to improve employees—to improve performance—and incentive compensation for production employees which would allow us to increase those wages and target those critical specialties.

    Mr. CHAMBLISS. If we could expand the scope of the area surveyed for your wages, would that help cure that problem?

    General HAINES. We have done a lot in that already in that we have had OPM come in, we have expanded the scope of the companies that we would survey; we are also looking at could we expand the actual counties that we survey to cover the full 20 county region surrounding us. We have a little bit—we want to make sure we are doing something smart there because there are a lot of industries that, according to the classification, classify the same as aircraft workers; but they are not, they are in the mills and other things with lower salaries than our aircraft workers and we want to make sure that we are not doing something that will actually make our situation worse rather than better. So we are doing a study now to see what the impact of that increased survey is.
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    If that does not work, then we are going to have to come back and look for some other relief, and maybe even revisit the Monroney Amendment, which will be a unique problem for us. Because we are in the center in a rural community, we have a different problem than other logistic centers at least in our wages, because the wages of the surrounding community are not comparable with the high tech wages you would get in the aircraft industry.

    Mr. CHAMBLISS. If you had the opportunity to compete for the C–17 workload today, would you be able to adequately prepare Robins Air Force Base to compete for that workload?

    General HAINES. We would. The major issue that we are working through right now is getting access to technical data. We found that we did, in fact, preserve rights to that technical data in the initial planning, which somebody was very wise to do that; and although we had some initial problems, it looks like we are working through that problem.

    Mr. CHAMBLISS. Okay.

    General HAINES. I would advocate, however, a partnering approach is what I would prefer to take, where we sit down with Boeing and we really figure out what is the best value to the taxpayer in this arrangement, who provides best value and what should we do in organic facilities, what should we do in contractors. It would save a lot of effort and a lot of expense to both of us.

    Mr. CHAMBLISS. Let me ask any of you that would like to comment on the issue of lack of new weapons systems coming into your depots. Is there anyone who does not see this as a problem? Does everybody agree that lack of new weapon systems coming into the depots is a critical problem?
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    [No response.]

    Mr. CHAMBLISS. Is there anybody who disagrees with the statement that we are not preparing our public depots across the services from a modernization and infrastructure standpoint to handle the maintenance of new weapons systems? Does everybody agree with that?

    [No response.]

    Mr. CHAMBLISS. And that those are critical areas that we need to work on with your bosses to make sure that we try to move in that direction.

    [No response.]

    Mr. CHAMBLISS. Colonel Cerney, I notice in the—and I guess Colonel Rivers, you also, in the GAO report, there is a statement in there that over the next two years there is a projection that the Marine Corps is going to lose 26 percent of its workforce because we are not going to have the work to do. Do you gentlemen see that to be a fact or do you see that we are going to be able to somehow pick up some additional workload over the next couple of years to see that that does not happen?

    Colonel CERNEY. If everything stays status quo right now; yes, sir, that is a very close projection. I believe we can work with MATCOM, with Systems Control (SYSCON) and recover some of that; but at this point in time, I cannot tell you how much, sir.
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    Colonel RIVERS. That is correct, sir. In actuality, when you look at our decrease in workload and then it is tied to our people, we would look at about a 25 percent reduction in that and it is connected to the new weapons systems that are coming in. So we do need to tie a certain amount of our investment to that new workload.

    Mr. CHAMBLISS. Is that decrease in your workforce directly related to competitions that the Marine Corps has lost or is it simply related to the fact that the Marine Corps is not directing workload into the depots?

    Colonel RIVERS. The 25 percent that we look at is related to the decrease in workload that is caused by the projected loss of old workload that we used to have because of new systems that are coming in. For example, we are losing the Assault Amphibious Vehicle (AAV), which is one of our largest weapons systems. We are losing that in 2002; that goes away. So we do not have a new replacement for that, so we have got to now shuffle and get workload in there; but we think that we can do that and identify ways to do that.

    Mr. CHAMBLISS. Colonel.

    Colonel CERNEY. Yes, sir. As far as that goes, that is not due at this point to competition. What you have there is a new system that is being phased in, the old one being phased out. You will go through a natural decrease in workload as a result of that. The long term effect though, from the standpoint of contracted logistic support, that is what will significantly affect us here in the out years.

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    Mr. CHAMBLISS. Mr. Chairman, I think that is all I have.

    Mr. WELDON. Thank you, Mr. Chambliss.

    Mr. Ortiz.

    Mr. ORTIZ. You know, as we listen to your testimony, we know you are not for profit—you are not, so you cannot operate your business like you do a regular business because a regular business does not go to war, you do.

    In order for you to be competitive, we have got to provide a level playing field. So if you are not for profit, it is up to us to see how we can fund you with new equipment; because if we do not do that, then your industrial rate goes up, am I correct? And then you are not competitive. This makes it so hard and this is why, maybe some of the reasons why the new weapons systems you cannot take them, because you do not have the equipment, you do not have the money to buy the equipment. Am I correct when I say that?

    [No response.]

    Mr. ORTIZ. We know we are going to have to be working on a supplemental. If we can start just with Colonel Dockens and move to my left, your right—or the other way around I guess, and give us, if you at this moment have had a chance to see how much money is required from your depot, from your facility, to be able to meet the demands, not for next year, but for this year. If you have any idea, Colonel Dockens.

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    Colonel DOCKENS. Sir, I would like to take that one for the record, if I could.

    Mr. ORTIZ. Colonel.

    Colonel JACKSON. Sir, I would have to do the same thing; I do not have that number readily available.

    Colonel HAYES. Same here, sir, I can provide it for the record.

    [The information referred to can be found in the Appendix.]

    Mr. ORTIZ. And I know it is a little early, because you are working to see how much—I asked the question of General Coburn earlier, but if this study is not finalized, the review by DOD, between now and June or July, will some of you have to shut down? Can you stay open?

    [No response.]

    Mr. ORTIZ. You can. That will not be a problem?

    Colonel HAYES. No, sir.

    Mr. ORTIZ. We need to know because we want to help you. You are going to be okay, Colonel?
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    Colonel DOCKENS. Yes, sir, as of right now, we will be okay. I mean of course, as General Coburn said earlier, the supplemental is important to us and it certainly will help; but as of right now, we will stay open. But again, any help will be greatly appreciated.

    Mr. ORTIZ. Anybody else?

    General HAINES. Yes, sir, if you would allow me to address that—General Haines here in the middle.

    Mr. ORTIZ. Yes.

    General HAINES. Sir, we know that if we do not get a supplemental, that, for example, the Air National Guard will not be able to put in two C–5s into the depot, that we have some depot maintenance work that will not generate, if it generates to us because our customers have the money and we would be able to do it. So for our purposes, it would be if the war fighter is shorted and does not get the supplemental, then we do not get the work, is the way it would work for us.

    Mr. ORTIZ. Thank you. Anybody else?

    [No response.]

    Mr. ORTIZ. If not, Mr. Chairman, thank you so much.
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    Mr. WELDON. Thank you, Mr. Ortiz.

    I do not have specific questions. I would like our two Navy friends to submit for the record to me a response to an inquiry regarding a Navy/Marine Corps IT system and why the depots chose not to involve themselves in the Navy/Marine Corps IT system.

    [The information referred to can be found in the Appendix.]

    I want to thank all of you for being here. For my two friends from Pennsylvania, Colonel Weidenthal and Colonel English, I want to tell you I have heard nothing but positive things about the work you are doing. I will get to both of your installations at some point in time. I will try to get to other installations as I am down here on our first hearing out of the city.

    I want to say to Colonel Jackson, one of our staffers visited your facility and was absolutely overwhelmingly impressed with the facility, but particularly with you. She said that you were well prepared, you had your facts available, you had a command of your job; and that is all we can ask of you, but we want you to know that that has been recognized by us in Washington and we appreciate that leadership role that you are playing.

    Colonel JACKSON. Thank you very much, sir.

    Mr. WELDON. Thank you.

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    And to each of you, I would just say what I said before and I said earlier. We have a big challenge ahead of us. You have a day-to-day challenge and you do it well. You keep our military operational and effective, you protect the lives of our soldiers, sailors, Marines and corpsmen, and women and we appreciate that.

    We want to help you, but we have got a bigger challenge and that is a challenge to engage the American people. You have got 60,000 employees; if you multiply that by two, that is 120,000 people. That is 120,000 families, that is thousands of communities, that is at least 14 states. You can be a key part of helping us sensitize the American people to the challenge ahead of us this year. If we do not do that, we are going to have major problems. It is only going to get worse. We have slipped out every major program I can think of, we should be building 20 or 30, we are building five and that is because we have had to play for all these deployments, none of which were budgeted for. We have had to tax installations and facilities; we have taxed the R&D account lines by 25 percent over the past eight years. It has gotten to a level that is unacceptable but that is not going to turn around because you understand that it is logical for it to turn around. Because this battle is not about logic, it is about being logically correct; but having an electorate, the people that we represent in both Democratic and Republican districts, who are aware of the needs and who support us.

    If you look at the American people, every group you look at supports our military because they are good. They are not good, they are the best. But it is not enough to support them because they are the best, with their words, they have got to understand when you help us in supporting our troops when they go abroad, there is a price to pay and that bill has come due. When we go back to Washington next week, the debate will be on budget cuts, the debate will be on tax relief which all of us support, the debate will be on a prescription drug program for seniors which all of us support, the debate will be on more money for education which all of us support, more teachers, more police. Where is the debate on national defense? You have got to help us turn that around. Working together, we can do that and we will do that.
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    We thank you for your service to America. Mr. Ortiz, thank you for what a great community you have here. We are looking forward to a great time tonight. I promise my constituents back in Pennsylvania I am not going to drink the worm, so do not try to make me drink the worm; I will leave that to you with your experience with Tequila—please do not put that on the record. [Laughter.]

    Mr. WELDON. But to all of you, we say thank you and to the folks down here in Texas, you set the tone for the country and let us hope all of us can live up to the great job that you are doing.

    Thank you and the hearing now stands adjourned.

    [Whereupon, at 3:44 p.m., the hearing was adjourned.]


March 23, 2001

[The Appendix is pending.]