<DOC>
[106th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:72364.wais]
[H.A.S.C. No. 106-40]
HEARINGS
ON
NATIONAL DEFENSE AUTHORIZATION ACT
FOR FISCAL YEAR 2001--H.R. 4205
AND
OVERSIGHT OF PREVIOUSLY AUTHORIZED PROGRAMS
BEFORE THE
COMMITTEE ON ARMED SERVICES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
SECOND SESSION
__________
MILITARY READINESS SUBCOMMITTEE HEARINGS
ON
TITLE III--OPERATION AND MAINTENANCE
__________
JOINTLY WITH
COMMITTEE ON GOVERNMENT REFORM
SUBCOMMITTEE ON THE CIVIL SERVICE
MARCH 9, 2000
Serial No. 106-164
__________
HEARINGS HELD
FEBRUARY 29, MARCH 1 AND MARCH 9, 2000
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__________
U.S. GOVERNMENT PRINTING OFFICE
64-887 WASHINGTON : 2001
MILITARY READINESS SUBCOMMITTEE
HERBERT H. BATEMAN, Virginia, Chairman
SAXBY CHAMBLISS, Georgia SOLOMON P. ORTIZ, Texas
WALTER B. JONES, Jr., North NORMAN SISISKY, Virginia
Carolina JOHN M. SPRATT, Jr., South
BOB RILEY, Alabama Carolina
DUNCAN HUNTER, California OWEN PICKETT, Virginia
JAMES V. HANSEN, Utah ROBERT A. UNDERWOOD, Guam
CURT WELDON, Pennsylvania ROD R. BLAGOJEVICH, Illinois
TILLIE K. FOWLER, Florida ADAM SMITH, Washington
JAMES TALENT, Missouri JAMES H. MALONEY, Connecticut
TERRY EVERETT, Alabama MIKE McINTYRE, North Carolina
JIM GIBBONS, Nevada CIRO D. RODRIGUEZ, Texas
DONALD SHERWOOD, Pennsylvania
Peter M. Steffes, Professional Staff Member
Joseph F. Boessen, Professional Staff Member
Mary Ellen Fraser, Counsel
Thomas E. Hawley, Professional Staff Member
Diane W. Bowman, Staff Assistant
------
COMMITTEE ON GOVERNMENT REFORM
Subcommittee on the Civil Service
JOE SCARBOROUGH, Florida, Chairman
ASA HUTCHINSON, Arkansas ELIJAH E. CUMMINGS, Maryland
CONSTANCE A. MORELLA, Maryland ELEANOR HOLMES NORTON, Washington,
JOHN L. MICA, Florida DC
DAN MILLER, Florida THOMAS H. ALLEN, Maine
Ex Officio
DAN BURTON, Indiana HENRY A. WAXMAN, California
Garry Ewing, Staff Director
Susan Waren, Professional Staff Member
Bethany Jenkins, Clerk
Tania Shand, Minority Professional Staff Member
(ii)
C O N T E N T S
----------
CHRONOLOGICAL LIST OF HEARINGS
2000
Page
Hearings:
Tuesday, February 29, 2000, Fiscal Year 2001 National Defense
Authorization Act--Adequacy of the Fiscal Year 2001 Budget
Request to Meet Readiness Needs................................ 1
Wednesday, March 1, 2000, Fiscal Year 2001 National Defense
Authorization Act--Real Property Maintenance and Infrastructure
Sustainment Funding............................................ 151
Thursday, March 9, 2000, Fiscal Year 2001 National Defense
Authorization Act--Civilian Personnel Readiness, joint with the
Committee on Government Reform, Subcommittee on the Civil
Service........................................................ 279
Appendixes:
Tuesday, February 29, 2000....................................... 33
Wednesday, March 1, 2000......................................... 191
Thursday, March 9, 2000.......................................... 319
----------
TUESDAY, FEBRUARY 29, 2000
FISCAL YEAR 2001 NATIONAL DEFENSE AUTHORIZATION ACT--ADEQUACY OF THE
FISCAL YEAR 2001 BUDGET REQUEST TO MEET READINESS NEEDS
STATEMENTS PRESENTED BY MEMBERS OF CONGRESS
Bateman, Hon. Herbert H., a Representative from Virginia,
Chairman, Military Readiness Subcommittee...................... 1
Ortiz, Hon. Solomon P., a Representative from Texas, Ranking
Member, Military Readiness Subcommittee........................ 3
WITNESSES
Dake, Gen. Terrence R., Assistant Commandant of the Marine Corps,
U.S. Marine Corps.............................................. 11
Keane, Gen. John M., Vice Chief of Staff, U.S. Army.............. 4
Lyles, Gen. Lester L., Vice Chief of Staff, U.S. Air Force....... 7
Pilling, Adm. Donald L., U.S. Navy, Vice Chief of Naval
Operations..................................................... 6
APPENDIX
Prepared Statements:
Dake, Gen. Terrence R........................................ 76
Keane, Gen. John M........................................... 37
Lyles, Gen. Lester L......................................... 66
Pilling, Adm. Donald L....................................... 47
Rabkin, Norman J., Director, National Security Preparedness,
National Security and International Affairs Division, U.S.
General Accounting Office.................................. 88
Documents Submitted for the Record:
Active Fixed Wing............................................ 103
Active Rotary Wing........................................... 103
Questions and Answers Submitted for the Record:
Mr. Bateman.................................................. 107
Mrs. Fowler.................................................. 150
----------
WEDNESDAY, MARCH 1, 2000
FISCAL YEAR 2001 NATIONAL DEFENSE AUTHORIZATION ACT--REAL PROPERTY
MAINTENANCE AND INFRASTRUCTURE SUSTAINMENT FUNDING
STATEMENTS PRESENTED BY MEMBERS OF CONGRESS
Bateman, Hon. Herbert H., a Representative from Virginia,
Chairman, Military Readiness Subcommittee...................... 151
Ortiz, Hon. Solomon P., a Representative from Texas, Ranking
Member, Military Readiness Subcommittee........................ 156
WITNESSES
Curtin, Neal P., Associate Director, National Security
Preparedness Issues, National Security and International
Affairs Division; accompanied by Brenda S. Farrell, Assistant
Director, National Security Preparedness Issues, National
Security and International Affairs Division.................... 152
Mashburn, Maj. Gen. Harold, Jr., Director of Facilities and
Services Division, Office of the Deputy Chief of Staff for
Installations and Logistics, U.S. Marine Corps................. 175
Robbins, Maj. Gen. Earnest O., II, the Civil Engineer, U.S. Air
Force.......................................................... 173
Smith, Rear Adm. Louis M., Commander, Naval Facilities
Engineering Command, U.S. Navy................................. 172
Van Antwerp, Maj. Gen. Robert L., Jr., Assistant Chief of Staff
for Installation Management, U.S. Army......................... 170
Yim, Hon. Randall A., Deputy Under Secretary of Defense for
Installations.................................................. 163
APPENDIX
Prepared Statements:
Chan, Kwai-Cheung, Director, Special Studies and Evaluations,
National Security and International Affairs Division, U.S.
General Accounting Office.................................. 252
Curtin, Neal P............................................... 198
Mashburn, Maj. Gen. Harold, Jr............................... 244
Ortiz, Hon. Solomon P........................................ 195
Robbins, Maj. Gen. Earnest O., II............................ 235
Smith, Rear Adm. Louis M..................................... 228
Van Antwerp, Maj. Gen. Robert L., Jr......................... 221
Yim, Hon. Randall A.......................................... 205
Documents Submitted for the Record:
[There were no Documents submitted for the Record.]
Questions and Answers Submitted for the Record:
Mr. Bateman.................................................. 269
Mr. Hansen................................................... 277
Mr. Ortiz.................................................... 277
----------
THURSDAY, MARCH 9, 2000
FISCAL YEAR 2001 NATIONAL DEFENSE AUTHORIZATION ACT--CIVILIAN PERSONNEL
READINESS
STATEMENTS PRESENTED BY MEMBERS OF CONGRESS
Bateman, Hon. Herbert H., a Representative from Virginia,
Chairman, Military Readiness Subcommittee...................... 279
Cummings, Hon. Elijah E., Jr., a Representative from Maryland,
Ranking Member, the Civil Service Subcommittee................. 284
Ortiz, Hon. Solomon P., a Representative from Texas, Ranking
Member, Military Readiness Subcommittee........................ 282
WITNESSES
Cipolla, Frank, Director, Center for Human Resources Management,
National Academy of Public Administration; Michael Brostek,
Associate Director, Federal Management and Workforce Issues,
General Accounting Office; accompanied by Barry Holman,
Associate Director, Defense Management Issues, General
Accounting Office.............................................. 285
Disney, Dr. Diane M., Deputy Assistant Secretary of Defense for
Civilian Personnel Policy; David L. Snyder, Deputy Assistant
Secretary of the Army (Civilian Personnel Policy); Betty S.
Welch, Deputy Assistant Secretary of the Navy for Civilian
Personnel; Mary Lou Keener, Deputy Assistant Secretary of the
Air Force for Force Management and Personnel; and David O.
Cooke, Director of Administration and Management, Office of the
Secretary of Defense........................................... 299
Mica, Hon. John L., a Representative from Florida................ 280
APPENDIX
Prepared Statements:
Brostek, Michael............................................. 341
Cipolla, Frank............................................... 326
Cooke, David O............................................... 415
Disney, Hon. Diane M......................................... 358
Holman, Barry................................................ 341
Keener, Hon. Mary Lou........................................ 400
Scarborough, Hon. Joe, a Representative from Florida,
Chairman, the Civil Service Subcommittee................... 323
Snyder, Hon. David L......................................... 378
Welch, Hon. Betty S.......................................... 391
Documents Submitted for the Record:
[There were no Documents submitted for the Record.]
Questions and Answers Submitted for the Record:
Mr. Bateman.................................................. 431
Mr. Chambliss................................................ 449
Mr. Underwood................................................ 450
106th CONGRESS
2d Session
H. R. 4205
To authorize appropriations for fiscal year 2001 for military
activities of the Department of Defense and for military
construction, to prescribe military personnel strengths for fiscal
year 2001, and for other purposes.
__________
IN THE HOUSE OF REPRESENTATIVES
April 6, 2000
Mr. Spence (for himself and Mr. Skelton) (both by request) introduced
the following bill; which was referred to the Committee on Armed
Services
__________
A BILL
To authorize appropriations for fiscal year 2001 for military
activities of the Department of Defense and for military
construction, to prescribe military personnel strengths for
fiscal year 2001, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``National Defense Authorization Act for
Fiscal Year 2001''.
* * * * * * *
TITLE III--OPERATION AND MAINTENANCE
Subtitle A--Authorization of Appropriations
SEC. 301. OPERATION AND MAINTENANCE FUNDING.
Funds are hereby authorized to be appropriated for fiscal year 2001
for the use of the Armed Forces of the United States and other
activities and agencies of the Department of Defense, for expenses, not
otherwise provided for, for operation and maintenance, in amounts as
follows:
(1) For the Army, $19,123,731,000.
(2) For the Navy, $23,300,154,000.
(3) For the Marine Corps, $2,705,658,000.
(4) For the Air Force, $22,346,977,000.
(5) For the Defense-wide activities, $11,920,069,000.
(6) For the Army Reserve, $1,521,418,000.
(7) For the Naval Reserve, $960,946,000.
(8) For the Marine Corps Reserve, $133,959,000.
(9) For the Air Force Reserve, $1,885,859,000.
(10) For the Army National Guard, $3,182,335,000.
(11) For the Air National Guard, $3,446,375,000.
(12) For the Defense Inspector General, $144,245,000.
(13) For the United States Court of Appeals for the Armed
Forces, $8,574,000.
(14) For Environmental Restoration, Army, $389,932,000.
(15) For Environmental Restoration, Navy, $294,038,000.
(16) For Environmental Restoration, Air Force, $376,300,000.
(17) For Environmental Restoration, Defense-wide,
$23,412,000.
(18) For Environmental Restoration, Formerly Used Defense
Sites, $186,499,000.
(19) For Overseas Humanitarian, Disaster, and Civic Aid
programs, $64,900,000.
(20) For Drug Interdiction and Counter-drug Activities,
Defense-wide, $836,300,000.
(21) For the Kaho'olawe Island Conveyance, Remediation, and
Environmental Restoration Trust Fund, $25,000,000.
(22) For the Defense Health Program, $11,244,543,000.
(23) For Cooperative Threat Reduction programs, $458,400,000.
(24) For Overseas Contingency Operations Transfer Fund,
$4,100,577,000.
SEC. 302. WORKING CAPITAL FUNDS.
Funds are hereby authorized to be appropriated for fiscal year 2001
for the use of the Armed Forces of the United States and other
activities and agencies of the Department of Defense for providing
capital for working capital and revolving funds in amounts as follows:
(1) For the Defense Working Capital Funds, $916,276,000.
(2) For the National Defense Sealift Fund, $388,158,000.
SEC. 303. ARMED FORCES RETIREMENT HOME.
There is hereby authorized to be appropriated for fiscal year 2001
from the Armed Forces Retirement Home Trust Fund the sum of $69,832,000
for the operation of the Armed Forces Retirement Home, including the
United States Soldiers' and Airmen's Home and the Naval Home.
SEC. 304. TRANSFERS FROM THE NATIONAL DEFENSE STOCKPILE TRANSACTION
FUND.
(a) Transfer Authority.--To the extent provided in appropriations
Acts not more than $150,000,000 is authorized to be transferred from
the National Defense Stockpile Transaction Fund to operation and
maintenance accounts for fiscal year 2001 in amounts as follows:
(1) For the Army, $50,000,000.
(2) For the Navy, $50,000,000.
(3) For the Air Force, $50,000,000.
(b) Treatment of Transfers.--Amounts transferred under this section--
(1) shall be merged with, and be available for the same
purposes and the same period as, the amounts in the accounts to
which transferred; and
(2) may not be expended for an item that has been denied
authorization of appropriations by Congress.
Subtitle B--Environmental Provisions
SEC. 311. REIMBURSEMENT FOR CERTAIN COSTS IN CONNECTION WITH THE FORMER
NANSEMOND ORDNANCE DEPOT SITE, IN SUFFOLK,
VIRGINIA.
(a) Authority To Reimburse EPA.--The Secretary of Defense may pay not
more than $98,210.00, using funds described in subsection (b), to the
Former Nansemond Ordnance Depot Site Special Account within the
Hazardous Substance Superfund established by section 9507 of the
Internal Revenue Code of 1986 (26 U.S.C. 9507) to reimburse the
Environmental Protection Agency for costs incurred by the agency in
overseeing a time critical removal action (TCRA) under CERCLA being
performed by DoD under the Defense Environmental Restoration Program
(10 U.S.C. 2701) for ordnance and explosive safety hazards at the
Former Nansemond Ordnance Depot Site in Suffolk, Virginia, pursuant to
an Interagency Agreement, entered into by the Department of the Army
and the Environmental Protection Agency on January 3, 2000.
(b) Source of Funds.--Any payment under subsection (a) shall be made
using amounts authorized to be appropriated by section 301 to
Environmental Restoration, Formerly Used Defense Sites.
(c) CERCLA Defined.--In this section, the term ``CERCLA'' means the
Comprehensive Environmental Response, Compensation and Liability Act of
1980 (42 U.S.C. 9601 et seq.).
SEC. 312. PAYMENT OF FINES OR PENALTIES IMPOSED FOR ENVIRONMENTAL
VIOLATIONS.
The Secretary of the Military Department concerned may pay from funds
otherwise available for such purposes not more than the following
amounts at the locations and for the purposes indicated below:
(1) For the Department of the Army:
(A) $993,000 for Walter Reed Army Medical Center,
Washington, D.C., under the Resource Conservation and
Recovery Act, in satisfaction of a fine imposed by
Environmental Protection Agency Region 3, for a
Supplemental Environmental Project.
(B) $377,250 for Fort Campbell, Kentucky, under the
Resource Conservation and Recovery Act, in satisfaction
of a fine imposed by Environmental Protection Agency
Region 4, for a Supplemental Environmental Project.
(C) $20,701 for Fort Gordon, Georgia, under the
Resource Conservation and Recovery Act, in satisfaction
of a fine imposed by the State of Georgia, for a
Supplemental Environmental Project.
(D) $78,500 for Pueblo Chemical Depot, Colorado,
under the Resource Conservation and Recovery Act, in
satisfaction of a fine imposed by the State of
Colorado, for Supplemental Environmental Projects.
(E) $20,000 for Deseret Chemical Depot, Utah, under
the Resource Conservation and Recovery Act, in
satisfaction of a fine imposed by the State of Utah,
for a Supplemental Environmental Project.
(2) For the Department of the Navy:
(A) $108,800 for Allegany Ballistics Laboratory, West
Virginia, under the Resource Conservation and Recovery
Act, to the West Virginia Division of Environmental
Protection to pay a cash penalty.
(B) $5,000 for Naval Air Station, Corpus Christi,
Texas, under the Clean Air Act, to Environmental
Protection Agency Region 6, to pay a cash penalty.
Subtitle C--Other Matters
SEC. 321. REIMBURSEMENT BY CIVIL AIR CARRIERS FOR SUPPORT PROVIDED AT
JOHNSTON ATOLL.
(a) In General.--Chapter 949 of title 10, United States Code, is
amended by adding at the end the following new section:
``Sec. 9783. Reimbursement by civil air carriers for support provided
at Johnston Atoll
``(a) Authority of the Secretary.--Subject to subsection (b), the
Secretary of the Air Force may issue regulations requiring payment by
civil air carriers for support provided to them at Johnston Atoll.
``(b) Types of Charges.--Any regulations issued under subsection
(a)--
``(1) may charge, but not exceed, the actual costs, including
indirect costs, of support provided by the United States to the
civil air carrier;
``(2) may only include charges for support requested by the
civil air carrier or required to accommodate the civil air
carrier's use of Johnston Atoll; and
``(3) shall provide that charges under them shall be in lieu
of any otherwise collectable landing fees.
``(c) Support Defined.--In this section, the term ``support''
includes the costs of construction, repairs, services, or supplies,
including, but not limited to, fuel, fire rescue, use of facilities,
improvements required to accommodate use by civil air carriers, police,
safety, housing, food, air traffic control, and suspension of military
operations on the island (including operations at the Johnston Atoll
Chemical Agent Demilitarization System).
``(d) Disposition of Payments.--Notwithstanding any other provision
of law, amounts collected from a civil air carrier under this section
shall be credited to the appropriations under which the costs
associated with the support were incurred. Amounts so credited shall be
available for obligation for the same period as the appropriation to
which credited.
``(e) Pay-As-You-Go Scoring.--From the cash proceeds resulting from
services provided to civil air carriers at Johnston Atoll under the
authorities provided by this section, for which the Air Force does not
have existing authority to retain, up to the following amounts shall be
transferred to Miscellaneous Receipts in the Treasury:
``(1) In FY 2001, $219,000;
``(2) In FY 2002, $219,000;
``(3) In FY 2003, $219,000;
``(4) In FY 2001, $219,000; and
``(5) In FY 2001, $219,000.''.
(b) Clerical Amendments.--The table of sections at the beginning of
chapter 949, United States Code, is amended by adding at the end the
following new item:
``9783. Reimbursement by civil air carriers for support provided at
Johnston Atoll.''.
SEC. 322. USE OF EXCESS TITANIUM SPONGE IN THE NATIONAL DEFENSE
STOCKPILE FOR MANUFACTURING DEPARTMENT OF DEFENSE
EQUIPMENT.
(a) Transfer Authorized.--Upon the request of the Secretary of a
Military Department or the Director of a Defense Agency, the Secretary
of Defense may transfer excess titanium sponge from the stocks of the
National Defense Stockpile for use in manufacturing defense equipment.
(b) Non-Reimbursable.--Transfer under this section shall be without a
requirement to reimburse the National Defense Stockpile Transaction
Fund. The recipient Military Department shall pay all transportation
and related costs incurred in connection with the transfer.
(c) Relationship to Other Disposal Authority.--The quantity of
titanium sponge transferred under this section may not exceed the
amount identified as excess in section 3304 of the National Defense
Authorization Act for Fiscal Year 1998 (Public Law 105-85, 111 Stat.
2057). Transfers to the Secretary of the Army pursuant to section 3305
of the National Defense Authorization Act for Fiscal Year 1996 (Public
Law 104-106, 110 Stat. 630) take precedence over transfers under this
section.
SEC. 323. CLARIFICATION AND EXTENSION OF PILOT PROGRAM FOR ACCEPTANCE
AND USE OF LANDING FEES CHARGED FOR USE OF DOMESTIC
MILITARY AIRFIELDS BY CIVIL AIRCRAFT.
Section 377 of the Strom Thurmond National Defense Authorization Act
for Fiscal Year 1999, Public Law 105-261, is amended as follows:
(1) in subsection (a)--
(A) by striking ``1999 and 2000'' and inserting
``2001, 2002, and 2003''; and
(B) by striking the last sentence of such subsection
and inserting ``Authority to carry out a pilot program
under this section shall terminate September 30,
2003.'';
(2) by amending subsection (b) to read as follows:
``(b) Landing Fees Defined.--For purposes of this section, the term
`landing fees' shall mean any fee established under or in accordance
with regulations of the military department concerned, whether
prescribed by fee schedule or imposed under a joint-use agreement, to
recover costs for civil aircraft use of the department's airfields in
the United States, its territories and possessions.'';
(3) in subsection (c), by striking ``Amounts received for a
fiscal year in payment of landing fees imposed'' and inserting
``Landing fees collected.''; and
(4) in subsection (d)--
(A) by striking ``March 31, 2000'', and inserting
``March 31, 2003,''; and
(B) by striking ``December 31, 1999'' and inserting
``December 31, 2002.''.
SEC. 324. ECONOMIC DISTRIBUTION OF DISTILLED SPIRITS.
Subsection 2488(c) of title 10, United States Code, is amended--
(1) by striking paragraph (2); and
(2) by redesignating paragraph (3) as paragraph (2).
* * * * * * *
FISCAL YEAR 2001 NATIONAL DEFENSE AUTHORIZATION ACT--ADEQUACY OF THE
FISCAL YEAR 2001 BUDGET REQUEST TO MEET READINESS NEEDS
----------
House of Representatives,
Committee on Armed Services,
Military Readiness Subcommittee,
Washington, DC, Tuesday, February 29, 2000.
The subcommittee met, pursuant to notice, at 2:04 p.m., in
room 2212, Rayburn House Office Building, Hon. Herbert H.
Bateman (chairman of the subcommittee), presiding.
OPENING STATEMENT OF HON. HERBERT H. BATEMAN, A REPRESENTATIVE
FROM VIRGINIA, CHAIRMAN, MILITARY READINESS SUBCOMMITTEE
Mr. Bateman. The subcommittee will come to order. This
afternoon, the Subcommittee on Military Readiness is meeting to
get a better understanding of current readiness of the military
services, and to get an assessment of the current and next
year's budget requests to adequately sustain acceptable levels
of readiness.
We have asked the vice chiefs of staff from each of the
four military services to give us their views on these issues.
The vice chief of staff of each of the military departments is
charged with overseeing the day-to-day operations of their
respective services.
Over the past five years, the Subcommittee on Military
Readiness has taken issue with the shortages in the
Administration's budget proposal in several areas that the
subcommittee believes are critical to maintaining readiness in
the military services.
These areas include base operations support, real property
maintenance, depot maintenance, ship repairs and overhauls,
operational tempo, quality of life improvements, and mobility
enhancement funds. Between 1994 and 2000, this committee
recommended over $10 billion in additional funding to the
Administration's requests in just these areas.
However, this significant additional attention has not
corrected the continual shortfalls in these accounts. One of
the reasons for these shortfalls has been continued unscheduled
and unbudgeted deployments which have caused severe strain on
personnel and equipment. I am glad to see that, at last this
year, funding for all of our current operations has been
included.
However, I see on the horizon some contingencies that just
may pop up and which aren't included and which again can have a
very, very detrimental affect on your planning and execution of
the budget that we authorized and for which funds are
appropriate.
Another reason is the high cost to maintain equipment that
is well past its designed usage with little relief in sight.
After an initial look at the budget proposal for fiscal
year 2001, it would appear that for the first time in many
years, there is growth in the readiness accounts. This is good
news, but this growth is primarily a reflection of a
significant increase in the price of fuel and for normal
inflation.
Setting aside these growth factors, there is very little
new money to arrest and turn around the declining readiness
problems that are plaguing our military. In addition, the
budget before us projects that readiness funding levels will
decrease by nearly $2 billion in fiscal year 2002.
As they have done in previous years, the chiefs of the
military services provided the committee with their lists of
unfunded priorities for fiscal year 2001 that total $15.5
billion and estimated that the unfunded shortfall in the next
five years to be at $84.2 billion.
Even after this committee's addition to the budget request
of $3.2 billion last year to reduce the readiness unfunded
priorities of the military services, the list continues to
grow.
Although the fiscal year 2001 budget request does contain
increases in other important areas such as procurement and
military personnel, the allusion that the level of funding for
readiness meets all of the services requirements is overstated.
It is beyond my understanding how improvements to military
readiness can be met with only inflationary increases,
decreases in funding in the coming years, and ever-increasing
unfunded requirements that are many billions short in several
critical areas.
Another area that has concerned me and many members of the
subcommittee is what the services do with the funds Congress
authorizes and appropriates. A recent General Accounting Office
(GAO) report notes that over a five-year period from 1994 to
1998, the Department of Defense (DOD) changed funding in
various operation & management (O&M) accounts by almost $43
billion compared with the amounts of money the Congress
originally designated for those accounts.
Article One, Section Eight of the Constitution requires
that Congress provide for the military. I and the members of
the committee take this responsibility very seriously. I
understand that operational needs of the military require the
movement of funds during the year of execution, but movements
of this magnitude outside of the normal legislative process are
clearly not acceptable.
Also unacceptable is the continual under-execution of funds
provided by Congress. As an example, during this same five-year
period, the Navy it is said under-executed its ship depot
maintenance account by over $1.2 billion. The Air Force under-
executed its primary combat forces account by $988 million.
And the Army, in only two years--1997 and 1998--under-
executed its combat divisions account by $580 million. These
three specific service accounts are considered by DOD to be the
most directly related to readiness and have been designated by
Congress as high priority readiness-related accounts. It is my
intention to find out why these critical readiness accounts are
consistently under-spent.
What we would like to hear from our witnesses today is what
has been done with the significant amounts of additional
funding provided by Congress to fix readiness, what are the
reasons why we are not there yet, and what it will take to not
only arrest the decline in readiness, but to provide a
permanent, sustainable course of action to return readiness to
acceptable levels.
We would also like to hear from our witnesses on their
assessment of current readiness and the risks involved in
maintaining readiness in the current and projected budget
levels.
Because we owe it to the American taxpayer and our military
men and women to ensure that there is sound stewardship over
the resources that are entrusted to the Department of Defense,
the hearing today is especially important. The issues we will
discuss today have the potential of affecting military
readiness now and in the future.
Our witnesses today will be--and we are very pleased and
honored to have them with us--General John M. Keane, Vice Chief
of Staff, U.S. Army; Admiral Donald L. Pilling, Vice Chief of
Naval Operations, U.S. Navy; General Lester L. Lyles, Vice
Chief of Staff, U.S. Air Force; and General Terrence Dake,
Assistant Commandant, U.S. Marine Corps.
Prior to hearing from our witnesses, I will now yield to
the ranking Democratic member of the subcommittee, Mr. Ortiz,
for any comments he may choose to make.
STATEMENT OF HON. SOLOMON P. ORTIZ, A REPRESENTATIVE FROM
TEXAS, RANKING MEMBER, MILITARY READINESS SUBCOMMITTEE
Mr. Ortiz. Thank you, Mr. Chairman. I join you in welcoming
our distinguished witnesses, the vice chiefs of staff and the
assistant commandant of the U.S. Marine Corps, to this hearing
today. I thank them for their service to this great nation, and
I look forward to their assessments of the readiness posture
and funding issues.
As we start the second session of the 106th Congress, I
also want to thank you, Mr. Chairman, for your dedicated and
impartial leadership of the readiness subcommittee. I am
certain that I state for my colleagues in saying how much we
appreciate your sincere interest in improving the readiness,
Mr. Chairman, of our military forces, and the impartial manner
you have been leading the activities of the subcommittee.
It is very instructive for me to reflect back on my tenure
on the readiness subcommittee; and I feel compelled, in this,
our first readiness subcommittee hearing of the century, to
take a little time to share some of my thoughts and concerns.
First, I remain impressed with the outstanding performance
of our uniformed personnel and dedicated civilian personnel.
They have performed diligently under some very trying
circumstances. Even under the stress of high operating tempo
(OPTEMPO) and the uncertainty of outsourcing and privatization
initiatives, they have continued to perform more with less.
They deserve all the accolades that we give them.
I am disappointed, though, that we must continue in this
century to fight to improve the overall readiness posture of
the force. Making real and sustainable progress in getting rid
of the repair and the spare parts problem, or making a dent in
the real property maintenance backlog, appears to be
impossible.
Like you, Mr. Chairman, I am concerned about where did all
of this money go. Does the department really consider the
readiness account a slush fund? What is going to be the result
of them doing all of the so-called DOD efficiency initiatives
and the Congressional acts to the budget request?
Notwithstanding all of the new and innovative maintenance
concepts and the out-sourcing initiative, we are still
struggling with the same issues--a prudently maintained
infrastructure and a marginally acceptable level of force
readiness.
To make matters worse, the marginally acceptable equipment
readiness comes on the backs of already over-worked personnel.
As we try to understand the adequacy of this budget submission,
I hope each of you will address budget assumptions and
considerations that continue to puzzle me, and that is how to
incorporate savings from future outsourcing initiatives in the
current budget, and what would be the impact of not achieving
the savings as identified?
I also think it would be helpful to share with the
subcommittee your experience with achieving the savings that
have been projected so far. I would like to know how the
services budget for the conduct of the value self-sourcing
studies? Have any of you conducted any studies on the impact of
the outsourcing initiatives? On the retention and productivity
of the civilian work force? Have the initiatives made a
difference in attracting the quality and quantity of new
workers needed to take care of our aging work force concerns?
Mr. Chairman, the answers to those questions are critical
for our understanding of the Administration's budget request. I
am not convinced that the Department has a thorough
understanding of the cost or consequences that are associated
with some of these reform initiatives. I ask these questions
today because the hearing schedule does not permit a separate
outsourcing hearing session before we mark up the bill. I do
believe that any answers they provide us today would be very
instructive.
Again, I welcome our distinguished witnesses here today,
and I look forward to their testimony and responses to the
questions. Thank you, Mr. Chairman.
Mr. Bateman. Thank you, Mr. Ortiz, and now General Keane,
and our other witnesses, we have your written statements. They
will be made part of the record in their entirety; and General
Keane, if you would like to proceed, followed by Admiral
Pilling and by General Lyles and then General Dake, we will be
happy to hear from you.
STATEMENT OF GEN. JOHN M. KEANE, VICE CHIEF OF STAFF, U.S. ARMY
General Keane. Mr. Chairman, thank you. Chairman Bateman,
Congressman Ortiz, distinguished members of the readiness
committee, I'm honored to be here today with my fellow vice-
chiefs, and thank you for the opportunity to appear before you
to discuss the President's 2001 budget request and its impact
on Army readiness.
I also will submit this brief opening statement; and as we
indicated, the much longer version for the record. I just want
to take this opportunity to thank all the members of the
committee for your support for Army readiness. During the past
five years, you have contributed $741 million to Army readiness
over the President's budget request.
What that has translated to us is improved readiness that
has bolstered our depot maintenance, training in OPTEMPO, and
also our ammunition management programs, which support the
entire Army.
As Chairman Bateman indicated, over the last ten years,
they have really been very busy years for us since the end of
the cold war. It has simply been one of the busiest times in
the last, 20th century; and throughout this period, our Army
has focused on its primary mission--that is, to train and win
its nation's wars. Our number one priority has been, and will
continue to be, maintaining a trained and ready Army. By
trained and ready in Army language, we mean C-1, and
traditionally we have been a C-1 Army; but frankly, we are not
a C-1 Army today. That is not to say that we cannot accomplish
all that the nation expects of us, but the farther we move away
from the C-1 standard, the greater the risk involved, and the
greater the price we pay in the long term.
You began the reversal of our readiness decline last year.
We thank you for that support, and we need your support to
continue that momentum. The President's budget request provides
the required resources to meet our most compelling readiness
requirements. The budget allows us to fund our ground OPTEMPO
accounts at 100 percent of validated requirements for the
active component, the National Guard, and the Reserves, and our
air OPTEMPO at nearly 100 percent as well.
It is, however, a budget with little flexibility. We have
had to make some tough choices with this budget, and there are
some areas specifically in real property maintenance in depot
maintenance accounts that we are not able to be as proactive as
we would like. Real Property Maintenance (RPM) remains under-
funded for all three of our components in 2001.
The budget formed 69 percent of the requirements for the
active component, 63 percent for the National Guard, and 75
percent for the Army Reserve. These RPM shortfalls will likely
increase the risk of higher future costs due to deferred
maintenance and renovation of older facilities.
Depot maintenance support receives a slight boost in 2001,
but overall depot operations are still only funded at 80
percent of the requirements for the active component and 77
percent for the Reserve component. The shortfall could force us
to defer maintenance and upgrades for some of our major combat
systems, thereby increasing the likelihood of reduced
operational readiness rates and affecting, certainly, the
availability of our equipment for training.
Let me say that last October, General Shinseki and
Secretary Caldera announced the Army's vision for the future, a
vision which involves no less than the complete transformation
of our Army into a force that is more strategically responsive
and dominant across the full spectrum of our operations.
That force will have stretch goals to deploy a combat
brigade in 96 hours, a division in 120 hours, and five
divisions within 30 days. This budget request allows us to
begin the movement toward that transformation. We have embarked
on a journey to make the most dramatic changes to our Army
since World War II, to make the Army more responsive today and
to shape our capabilities for tomorrow.
With your help, we intend to do three primary things with
this budget: to protect the readiness of the Army, number one;
and number two, to provide a quality of life experience for our
soldiers and their families; and number three, to begin the
transformation of our Army.
To accomplish all of that, we have submitted our portion of
the President's budget, and we have also identified $5.4
billion in unfunded requirements that would be tracked from
those three goals.
We appreciate your continued support and your
consideration. Mr. Chairman, thank you for the invitation to
appear today. I look forward to your questions.
[The prepared statement of General Keane can be found in
the Appendix on page 37.]
Mr. Bateman. Thank you, General Keane, and Admiral Pilling.
STATEMENT OF ADM. DONALD L. PILLING, U.S. NAVY, VICE CHIEF OF
NAVAL OPERATIONS
Admiral Pilling. Thank you, Mr. Chairman, distinguished
members of the committee, thank you for the opportunity to
discuss the Navy's operations and maintenance budget with you
today.
Today's Navy is the most capable and the most ready in the
world. Over 45 percent of the fleet is under way today, either
deployed or engaged in training for deployment. The men and
women of three carrier battle groups and three amphibious ready
groups are en route to or on station in the Mediterranean Sea,
in the Arabian Gulf. Another battle group and amphibious group
are operating in the Western Pacific. These Naval forces are
maintaining our forward presence and are ready for combat
operations if the nation needs them. This is the core of what
our O&M budget buys.
With your permission, I would like to talk about three
specific items: personnel, current readiness, and then
recapitalization.
Our readiness depends on our ability to attract and retain
high quality motivated and trained sailors, even as the
nation's strong economy imposes significant challenges in
recruiting and retention. Last year's focus on recruiting with
the assistance of this committee resulted in the Navy meeting
its fiscal year 1999 recruiting goal. It will take at least
this much effort and money to sustain success in recruiting
this year.
Retention of sailors once we recruit them continues to be a
problem. Although we are seeing some improvement as a result of
the recent pay and bonus improvements, retention rates in all
categories remain below our steady state targets. Those gains
that we have been able to make in recruiting and retention have
improved readiness. The number of gapped at-sea billets has
declined from a high of over 18,000 in 1998 to roughly 9,200
today.
Today the readiness of our deployed forces continues to be
satisfactory. This is validated by the impressive performance
of our fleet units in Operations ALLIED FORCE and SOUTHERN
WATCH. Our non-deployed readiness has always by design been
lower than that of our deployed forces, because the Navy
operates on a cycle of readiness that peaks as a ship or a
squadron departs for deployment.
The strain of high OPTEMPO, frequent deployments, and aging
ships and aircraft is seen in the progressive decline of our
forces' readiness in between their deployments. O&M funding
shortfalls today, when they occur, have a greater and more
rapid impact on non-deployed forces than in the past.
In the area of aviation, we have repriced the Flying Owl
program within operations and maintenance to better reflect the
increase in costs associated with sustaining our aging
aircraft.
Aircraft depot maintenance funding is sufficient to ensure
that deployed squadrons have 100 percent of the necessary
aircraft, while non-deployed have at least 90 percent. Also as
a result of lessons learned in Kosovo, fiscal year 2001
includes $23 million in funding for spare parts and equipment
necessary to establish one additional EA6-B squadron.
In the area of ship operations, our operations and
maintenance funds are adequate to achieve our ship OPTEMPO
goals of 50.5 underway days per quarter for deployed ships, and
28 underway days per quarter for non-deployed ships. We are
concerned with funding for ship depot maintenance as our fleet
commanders are telling us that we have underestimated what it
will take to properly support planned availabilities.
The reductions that we had to take in our O&M appropriation
as a result of the fiscal year 2000 rescission of .52 percent
were targeted at real property maintenance to protect the
critical fleet flying hour and maintenance accounts. This $120
million reduction will have a serious impact on the readiness
of our shore facilities.
Looking to the future, increasing our investment to support
the recapitalization and modernization of our Navy is essential
to maintaining operational readiness. Adequate readiness can
only be sustained in the future with a modernization and
recapitalization program that delivers sufficient numbers of
technologically superior platforms and systems to the fleet.
I remain concerned that we are falling behind in this
effort. We need to invest now with a focused and expanded
program to maintain superiority through the first half of the
21st century.
Balancing the fiscal and operational needs of today with
the defense requirements of tomorrow is a challenging task. We
cannot accomplish this alone. We need your continued support.
Mr. Chairman, again, I would like to thank you and this
committee for all you have done for the Navy, and I look
forward to working with you in the future; and I will be happy
to answer any questions the committee might have.
[The prepared statement of Admiral Pilling can be found in
the Appendix on page 47.]
Mr. Bateman. Thank you very much, Admiral Pilling, and now
we are pleased to hear from General Lyles.
STATEMENT OF GEN. LESTER L. LYLES, VICE CHIEF OF STAFF, U.S.
AIR FORCE
General Lyles. Mr. Chairman, good afternoon. I want to also
thank you and Mr. Ortiz and the rest of the members of the
committee for your very strong support to all of the services,
and particularly to the U.S. Air Force.
I would like to just make a few brief comments relative to
the readiness posture for the U.S. Air Force and the many
challenges that we face today and certainly into the future.
1999 was another banner year for the Air Force. Our forces
were deployed throughout the world in various contingencies,
starting at the beginning of the year in DESERT FOX over the
skies of Iraq, to ALLIED FORCE, to the continued operations of
Operations NORTHERN WATCH and SOUTHERN WATCH, and the
humanitarian operations both here and abroad.
We showed in Kosovo, as an example, that your Air Force,
our Air Force, was ready when the nation called, as it is today
literally across the world. Today we have some 90,000 airmen
who are stationed throughout the world and the United States.
We have some 250 aircraft that are permanently stationed across
the world in various contingencies, and we have been successful
in all the different missions that the country has called upon
for the U.S. Air Force.
Yet, in spite of those successes, we still have faced many,
many challenges, and those challenges in some respects, Mr.
Chairman, reflect the balanced budget that we tried to put
together and reflect in the President's budget. The challenges
are in the area of people, readiness, infrastructure, and
modernization; and if you don't mind, I will just briefly make
a comment about the first three--people, readiness and
infrastructure.
We have increased the funding for our readiness posture,
particularly for spares support for all of our various programs
and all of our supporting activities. We increased the funding
in 1999, beginning in 1999 to address the shortfalls that we
had over the past years. We continue that increase in funding
in the year 2000, and the President's budget for 2001 reflects
a continuation of that particular posture.
I am optimistic that the sustained funding for readiness
will allow us to turn around the readiness decline that we have
experienced over the last several years, but we have not yet
reached that particular goal. All the indicators, the leading
indicators are very, very positive, but they have not yet
reflected in what's happening out in the field, and what is
happening in the troops that are deployed.
Overall readiness of our major operation units are down 26
percent since 1996, and 11 percent in the last year alone.
Today only 68 percent of our combat units are reporting
readiness in the top two categories, C-1 and C-2. That's far
short of our goal of 92 percent. Overall for the U.S. Air
Force, both combat forces and support forces, 82 percent of our
forces are at the C-1 and C-2 level, but again, it doesn't
reach the goal of 92 percent.
We are taking a number of steps, Mr. Chairman, to try to
reverse this readiness decline. The first, as I indicated
before, is to readily remedy the issue relative to parts
shortage. We have funded spares at 100 percent in fiscal year
2000, and we reflect that again in the President's budget for
2001.
We have taken process initiatives and contract initiatives
to reduce vendor lead time to make sure we can get the new
components that we are procuring out to the field and out to
our depots as rapidly as we possibly can. We are making
upgrades and improvements in reliability to literally all of
our platforms. We have some 279 initiatives totaling $2.8
billion across a fighter--impacting the F-16 and F-16 engines
particularly--the C-5 program, the C-130 program, KC-135
program, and many, many others.
We are also taking steps to make sure we are addressing the
concern for our people, and particularly the expeditionary
nature that the Air Force finds itself involved in. Our
Expeditionary Air Force (EAF) concept that we initiated
formally beginning this past fall is proceeding very, very
well. We are in the initial steps of our EAF concept, but the
Commanders in Chief (CINCs) are very, very supportive and so
far very, very pleased with everything we are trying to do to
support them while giving a better definition to the
expeditionary nature of the U.S. Air Force.
We think, Mr. Chairman, that we have the right fixes, and
that we are going to turn the mission capability rates around;
but we have not reset yet, and our indicators though positive,
have not shown the results out into the field, and we will
continue the emphasis in this particular area.
In the area of people, because of the pace of our
operations around the world, we are now, today, 40 percent
fewer than we were ten years ago, but yet 400 percent increase
in OPTEMPO for our people. Our airmen are working harder than
ever before, and the strain is beginning to show.
Mr. Chairman, thanks to you, this particular committee, and
the rest of the Congress, we are beginning to take the positive
steps to help our people, and particularly those in the field.
You have improved the pay and benefits for our airmen last
year, and for their families; and we thank you graciously for
all the things that you have done to help them in that
particular area.
The compensation package will be a very, very strong
benefit toward us being able to support our people with the
quality of life that they deserve; and as I mentioned before,
our expeditionary Air Force is providing both the
predictability and the stability to our airmen that they need
to accomplish their mission.
Mr. Chairman, another factor in readiness, the very, very
complex readiness equation, is the issue of recruiting and
retaining good people, and retention and recruitment for the
U.S. Air Force. We are facing the toughest environment that we
have had in decades. Our robust civilian economy and the low
propensity to enlist for all of our people around the United
States have made this a major, major challenge for us,
something we have never faced before in the U.S. Air Force.
In spite of an increase of 600 people last year above what
we have normally recruited, we still missed our recruiting
goals by about 1700 people last year, even with the higher goal
that we established for ourselves. We're already this year, so
far, some 1700 still short for the numbers we need in fiscal
year 2000.
We are taking actions to try and remedy that particular
situation, but enlistment and retention go hand in hand. Our
enlistment and retention remains a major concern for us. We are
missing our goals in all of our categories for first term
enlistments, second term enlistments, and career enlistments.
We have taken a number of steps to encourage our young
people to enlist, and to stay in the U.S. Air Force, and to
make it a career. We have added re-enlistment bonuses; some 73
percent of the Air Force skills now receive a re-enlistment
bonus. That's up from 34 percent in fiscal year 1997.
We have a full court press to improve our recruiting skills
and recruiting manpower. We are the lowest service in terms of
the numbers of recruiters out there in the field, and we're
trying to change that for the U.S. Air Force for now and the
future. We're going to be increasing the number of recruiters
by some 850 by April of 2001 to bring our number of recruiters
up to about 2,000. Today we are about 900 or so.
We have also increased TV advertising for the first time
for the U.S. Air Force. Our numbers in fiscal year 1999 were up
to about $70 million; and for 2000 and 2001, we're going to be
at about $65 million to begin advertising and telling the story
for the U.S. Air Force, and again, enticing people to want to
recruit and come into the U.S. Air Force.
And finally, we have expanded incentives so that initial
enlisted bonuses are offered for now 100 skills in the U.S. Air
Force. That's up from a low of only four skills just a couple
of years ago.
Finally, in the area of infrastructure, we are making
strides to try and stay balanced in terms of our infrastructure
funding. We are nowhere near the numbers we need to keep the
infrastructure where it should be, and to make improvements in
that area that need to be addressed.
Infrastructure is sort of the Peter that ends up the one we
rob to pay for Paul, and all the other different areas that we
have in our affordability equation for the U.S. Air Force. As a
result of this, our RPM backlog is growing to about the tune of
$4.3 billion. We are at the level now where all we can do is
maintain RPM at literally one percent. That's enough for
preventive maintenance only, and it limits us to repairs only
as we address our shortfalls.
MILCON levels are steady from where they were last year,
but they are one-third of what our validated needs are; and in
the area of military family housing, we're taking steps to
address the military family housing plan that we presented to
Congress last year. This plan was applauded by Congress, but we
need to make sure we have the funds in the out-years to address
all the different things we need to make that plan a reality.
The bottom line, Mr. Chairman, is that readiness is very,
very fragile for the U.S. Air Force. While, like the other
services, we would never, ever stop short of accomplishing the
mission, we will be doing it at higher risk if we can't address
some of these issues that I just outlined to you; and we are
trying to make sure in our balanced budget that we are trying
to address each one of those areas.
Let me close, Mr. Chairman, by just making a comment. I
know you just recently returned from a trip to Europe with some
of the members of this committee and other Members of Congress,
and you had an opportunity to address and see and talk to
really the secret, if you will, for the success of the U.S. Air
Force, indeed for the other services, and that's our troops out
in the field.
They are dedicated. They are proud. They are doing
everything they can to support the mission and to support this
country. Their morale is very high in spite of the challenges
that are ahead of us, and they fully appreciate everything that
the Congress has been trying to do for them.
What we owe to them is literally the very best in quality
of life, in equipment, and support and modernized weapon
systems that is possible, given all of our budget constraints.
Mr. Chairman, I thank you for the opportunity to talk to
you, and I look forward to answering any of your questions.
Thank you.
[The prepared statement of General Lyles can be found in
the Appendix on page 66.]
Mr. Bateman. Thank you, General Lyles.
General Dake.
STATEMENT OF GEN. TERRENCE R. DAKE, ASSISTANT COMMANDANT OF THE
MARINE CORPS, U.S. MARINE CORPS
General Dake. Thank you, Mr. Chairman, Mr. Ortiz. Thank you
for allowing me to come before this great committee and speak
to you about your Marine Corps.
The help that this committee and the Congress gave the
Marine Corps this past year was very much appreciated. It
represented a turn in what had been a long decline in the
funding for the Marine Corps in many ways. There is more to be
done, and we look forward to working with this committee and
Members of the Congress to take on that future load.
The Marine Corps is ready. We are a force in readiness, as
you have directed us to be. We balance that readiness across
four pillars, and it is a balancing act as we do that. The
first pillar is our people, the Marines and their families.
Today the Commanding General of the Marine Corps Recruiting
Command told me that we would make our recruiting goals for the
56th month in row, and we did by the end of this day. This is a
leap year, and I have to say we are glad we have an additional
day in February in which to make those goals, because
recruiting continues to be a very tough business, and one in
which we are engaged heavily throughout the Corps, from top to
bottom.
We believe also that the things which this committee was
instrumental in doing such as retirement, fixing the pay table
reforms, the pay raises, and as I travel around the Corps, it
means a great deal to Marines and their families; and if there
is something remaining to be done in that area, they would tell
you that Tricare or medical care is of a concern to them, and
I'm sure you have heard those same things in your travels.
The second pillar of our readiness is our legacy of
equipment. You spoke about it earlier, Mr. Ortiz, when you
spoke about older equipment that is aging and taking longer to
repair; and we do so and maintain the readiness on the backs of
our Marines. It takes us longer, but it also costs us more to
repair that same equipment. On many occasions, the parts that
we need to repair it are no longer made by any contractor, and
it takes them time to retool and then time for all of those
parts to improve our readiness.
But having said that, our readiness has improved. We are 92
percent on the ground for Marine ground equipment readiness;
and we have arrested the decline in the aviation side,
particularly on our helicopter aviation, so we remain a force
in readiness on those counts.
We look for ways in which we can find an economy of force,
if you will, to take care of the legacy of equipment, such
things as remanufacturing. We will remanufacture our Light
Armored Vehicles (LAV's). We will remanufacture some of our
trucks. We will buy new trucks as well as the second version of
the HMMWVs. We are looking for ways in which we can make it
easier to maintain and buy in a cost-effective way to bridge
the gap to modernization in those accounts.
The third pillar is infrastructure. This, too, is where we
have taken money and put it into our readiness accounts so that
we can meet the mandate of the Congress to be a force in
readiness. We have some good news. Each year we have put more
than $50 million into our BOQs; and by 2004, there will be no
Marine that will live in either a squad bay type of barracks,
nor use a gang head. Those are good news items.
We have arrested the decline in backlog of managed real
property which was headed to be a billion dollars by 2003. That
is now arresting steadily. However, it still remains at $685
million of backlog in repair which we have insufficient funds
to work off in that period.
We also look at our family housing. We will have all of the
family housing that needs to be refurbished and repaired; it
will be completed by 2010. That's one of the things that we are
looking to increase as we work our infrastructure over the next
year.
The one infrastructure item which we would like to take on
with the Congress this year, and that is the funding for the
procurement for the Blount Island command. Blount Island is a
port off of the East Coast. It's in Florida and is in fact is
used to refurbish and repair our equipment. It's on our
maritime pre-positioning. This is the equipment that gives us
the sustainability for real time as we put Marines, wherever
they are around the world, into combat or operations, they will
use the equipment aboard those ships.
In a longer context for the nation, Blount Island
represents the busiest port during DESERT SHIELD and DESERT
STORM. It loaded more ships out than any other East Coast port.
We believe it is not only a Marine Corps asset; but a national
asset, and we enjoin you to work with us to take on the
procurement of that particular command.
Our final pillar is modernization. Modernization is really
long-term readiness. It is really the final answer to the
legacy systems and how you combat the readiness degradation
that they represent.
We are looking at long-term readiness; our premier program
on the ground sides is our Advanced Amphibious Assault Vehicle
(AAAV). On the air side is the MV-22 and Joint Strike Fighter,
and those continue. We are also looking to do things in the
mandate, or the common knowledge is fix artillery. We are
looking for the Lightweight 155 as a program which is our
modernization of artillery and others as we have outlined in
our plans.
In war fighting areas, the Commandant has brought back the
Marine Expeditionary Brigade. In conversations and meetings
with the Chief of Naval Operations (CNO) and the commandant
sponsoring Navy/Marine Corps leadership, we have come away with
the Marine Expeditionary Brigade. This is what I call the
middleweight fighter. It bridges the gap between our Marine
Expedition- ary Unit (MEU) Special Operations Command (SOC)
which is about battalion level force, and our Operational
Maneuver from the Sea (OMFTS), which are a division level
force.
The Marine Expeditionary Brigade comes with its own ground,
its air, and its sustainability for 30 days. It is a potent
force that the Commandant is bringing back.
We have many good things that we are working on this year,
much to the credit of this committee and the Congress, that we
have had funding beyond what we have seen in the past. However,
there is more to go.
I look forward to working with the Congress on that, and I
look forward to your questions. Thank you.
[The prepared statement of General Dake can be found in the
Appendix on page 76.]
Mr. Bateman. Thank you very much, General Dake. Thank you
all. The last Quarterly Readiness Report that the committee has
received was the period ending September 30th of last year. We
have now had another quarter ending December the 31st. Has that
Quarterly Readiness Report been completed and in your hands?
General Keane. Yes, sir, it has been completed, and I was
told it was leaving the building either yesterday or today; and
clearly we can do better at providing that report to you. We
truly understand that.
Mr. Bateman. I have been anxiously awaiting it, and I don't
understand why we would have to wait that long; and I am almost
embarrassed to have to ask when are we going to receive it, so
please expedite that.
General Keane. Well, the Army, just to be up front with
you, our portion of that, we have been late seven out of the
last ten quarters, and we are going to fix it. After that
conversation I had with you in your office, we intend to do
something about it.
Mr. Bateman. All right, thank you, General. Your statements
and the written versions that I reviewed last evening are all
replete with shortfalls in many accounts, none perhaps as
significant as your real property maintenance accounts. Did I
hear for the Air Force that there's a $4 billion backlog of
real property maintenance?
General Lyles. When you look in the aggregate, Mr.
Chairman, that's the true number. That reflects decline or lack
of funding for real property maintenance or RPM over the last
four or five years, and what we project for the future. The
funding we had last year, the funding we have in the budget
this year keeps us at, or gets us to a one percent real
property maintenance level, if you will. It allows us to do
emergency repairs to sustain things, but it doesn't allow us to
make the kind of major changes you need to literally turn that
situation around.
We will not allow people to sit in leaky buildings, as an
example, but we won't be able to fix the roof completely, or to
replace the roof, and those are the kinds of things that we're
going to be facing with that kind of funding level.
Mr. Bateman. I have difficulty understanding why people
aren't yelling and screaming and banging their fists on the
table if you've got those kinds of problems; and they continue
to be unfunded year after year after year. It appalls me to
have senior military leaders leave my office with almost a tone
of gee whiz, this is getting so much better, I'm going to get
69 percent of requirements in this budget.
I don't think 69 percent of identified requirements is
acceptable, and I hope you are going to help the committee with
the Administration and with the American people to understand
that you have vital needs which are being unfunded; and we
cannot do this for you unless you help us. The way you can help
us is being very forthcoming and high profile in asserting that
the need is there.
I'm going to suspend before I get more frustrated, and
recognize Mr. Ortiz.
Mr. Ortiz. Thank you, Mr. Chairman. I have a couple of
questions for General Keane. Maybe he can help me. Do you know
for the Army to recapitalize its air and ground fleet, it would
appear logical that the Army would also need to recapitalize
its repair and maintenance depots for recapitalization work
that they place.
What are the Army's plans to recapitalize the
infrastructure, equipment and facilities at Corpus Christi Army
Depot in order to recapitalize the Army aviation fleet? Maybe
you can give me a little--
General Keane. Mr. Congressman, you know that we do have a
recapitalization effort with development of our Long Bow Apache
helicopter, and some improvements we'll be making to the CH-47;
and quite frankly, we are looking very hard at elimination of
the AH-1 Cobra and the UH-1 because they are Vietnam era
aircraft as well.
In reference to your question about depots, and
specifically Corpus Christi, the depots are funded out of the
Army working capital fund, and their RPM, if you will, or
recapitalization effort, comes from the rates that they're
charging in terms of the repair and maintenance that are
conducted at those facilities.
And those are competitively established, as you know, so
that is where the monies come from to do repair and maintenance
in those facilities. Let me just be up front with you. We have
absolutely no intention of letting that depot decay so that the
infrastructure falls down around it; and then the Army says
this is too tough, we've got to walk away from it. That's not
our intent.
Our intent is to make certain that that facility continues
to function, and that the facility is adequate to meet the
needs of those great people that work in that facility.
Mr. Ortiz. You know, and I think if I--and correct me if
I'm wrong--it would take about $400 million to repair all those
Apaches that have to be repaired. Is that cost now, is that
going to be included in your supplemental to make up the cost
that it took? I don't think that the money that was spent was
in the budget.
General Keane. That's correct, the money is not in the
budget. The money is in the supplemental; and it is also
identified as unfunded requirements, part of the $5.4 billion
that we have as an unfunded requirement.
Mr. Ortiz. I had some other questions, but let me also pass
to some of the other members, and I will come back around for
the next round.
Mr. Bateman. Mr. Hansen.
Mr. Hansen. Thank you, Mr. Chairman. Mr. Chairman, I hope
you realize that General Lyles will be the commander of Air
Materiel Command in a short time. It used to be the commanding
officer of Ogden Air Logistics Center (ALC), and
congratulations to General Lyles because I don't know a more
capable fellow to do it, or officer.
You know, General Lyles, if I may ask you, or any of the
other folks who are there, you know, some of the extreme
environmental groups have filed a federal lawsuit that would
prohibit any over-flights under 2,000 feet; and they have
wisely done it in Washington, D.C. because there is a certain
judge here that goes along with them about on everything, if I
may say so.
Tell me what effect, if they are granted that until a
National Environmental Protection Agency (NEPA) or
Environmental Impact Statement (EIS) statement is done, and the
length of time of those--and I'm sensitive to this as Chairman
on the Committee on Public Lands--it would take a long time and
cost big, big bucks--what effect would that have on readiness
if they were successful? What if the judge grants them that?
General Lyles. Well, Congressman Hansen, as you well know,
one of the major elements to readiness is training, proper
training for our people, particularly to prepare them to go in
harm's way situations, as an example. We depend on the ranges
that we have, all the ranges--test ranges, development ranges,
training ranges--to be the element that allows us to train our
forces to go to any sort of scenario they may have to face.
If we are faced with the situation where we can't provide
adequate flying at the right kind of levels, elevations to do
the proper training, that would tremendously, tremendously
impact our ability to support readiness factors for our forces.
The ranges are getting fewer and fewer as it is, and the
numbers and the encroachment sort of threats are becoming more
and more of a viable concern to all of us, and we are trying to
do everything we can to protect and make sure we keep them at
least where they are today, if not the ability to expand them
in the future.
Mr. Hansen. Admiral, I guess you would have some of those
same concerns with the Navy air?
Admiral Pilling. Yes, sir. I mean, we have requirements for
our pilots to be able to do low level flights as part of the
training syllabus.
Mr. Hansen. I am sure the Marines are dragging your wheels
through the grass all the time, aren't you? Isn't that part of
your work?
General Dake. That's an important part of what we do. We
would be really hard-pressed for readiness if we could not do
those types of training.
Mr. Hansen. You will support us if this committee sees fit
to do something to remedy that problem, I would hope.
General Lyles. That's correct, yes, sir.
Mr. Hansen. General Lyles, let me ask you one more, if I
could. As you know, Secretary Peters has issued a waiver for
50/50 legislation which may be necessary to support the
transition of workloads from the closing of Kelly and Kelly
Logistics Center (KLC). I will discuss this as according to
ALC; however, after closer investigation, I'm somewhat
concerned that some of the folks in the Air Force don't see it
the same way the secretary sees it, and with any problem the
Air Force may have complying with the 50/50 is not with the
transition workload, but rather part of the much deeper
problem.
In fact, in an Air Force Materiel Command letter signed
only two weeks ago, it states, ``these bridge contracts may
represent a sense of a much larger problem and should not be
the only justification to support the air waiver with 50
percent limitation.''
It goes on to say the problem is much larger and extends
beyond fiscal year 2000. The letter identifies the much greater
problem as ``the general trend to move logistic support to the
private sector and increasing costs of contract and interim
logistic support.''
Now, I know you are not the commander there yet, General,
and this doesn't fall on your watch; but I am just kind of
curious, can you kind of tell the committee whether the Air
Force problem of complying with the 50/50 law is indeed much
deeper and long term than is indicated by this recent waiver
request?
General Lyles. Congressman Hansen, I think the answer and
the comments that you have heard from Secretary Peters are
really the corporate and right strategy for the U.S. Air Force.
That is, we believe in 50/50. We are going to do everything we
can to make sure we don't violate the law. I just became aware
of that letter that you referred to just today, and we need to
go back to make sure that all of our people understand that
this is something that we are serious about, and we are going
to already have initiated the sort of processes to make sure we
look at any sort of activity that can potentially move workload
and give us a situation where we knowingly, or even
unknowingly, violate the law.
The bridge contracts were a situation, I think everybody
understands, we were somewhat forced into that situation
because of the readiness posture, in part. We literally
underestimated what it would take to move the workload from
Kelly and also from Sacramento. The bridge contracts allowed us
to remedy that situation and help our readiness.
We cannot allow any systemic sort of processes out there to
take the workload away from us and violate the 50/50, so we
will be watching that very, very closely. I know who signed
that letter, and I will be talking to that individual very
soon.
Mr. Hansen. Thank you, Mr. Chairman. May I ask another
question?
Mr. Bateman. Certainly.
Mr. Hansen. Thank you, Mr. Chairman. Admiral, a great
concern in my mind--and I guess it is because of my visits to
Puerto Rico as Chairman of the Public Lands and Parks
Committee--is this problem in Vieques. Do you have another
place, General, where you train with live fire in coordinated
areas on the East Coast?
Admiral Pilling. Where we can do all of the combined
training?
Mr. Hansen. All of the combined training.
Admiral Pilling. No, sir, there is no place that we know of
on the East Coast. We have a commission to study this by the
Center for Naval Analysis to look at alternatives if we have to
leave Vieques as a result of the referendum the states place
next year.
Mr. Hansen. Is it a true statement, then, that you are
sending out people that really haven't passed the final test,
so to speak, in your carrier battle groups and your Marine
people? Would that be a correct statement?
Admiral Pilling. They are--we have three destroyers that
have just deployed, the battle group that is on its way into
the Mediterranean. They are on their way up to Cape Wrath in
Scotland to try and finish up the naval surface fire support
that they couldn't do at Vieques. They are up there now. They
are at 15-foot seas, and it doesn't look like it's going to be
a very easy task for them to get qualified up there, so we are
not getting the training we need.
Mr. Hansen. No disrespect to the kind of agreement that you
folks are working out with the folks in Puerto Rico, but
there's 48 states that we do live firing in right now, and I
would feel it would be a terrible precedent if we have to now
take a vote on live firing on where you can and cannot do it as
if it would follow along with the suggestion that has been put
forth.
I was down there at one time as Chairman of Public Lands
and Parks, and a large developer said I can't see a place in
the Caribbean that would be greater than this to put in
beautiful beaches and all that type of thing.
I hope those folks down there don't get the idea that they
are headed that way. I personally feel that this is a grave
mistake on the part of the Administration, and it should be put
back just as it was prior to that time, and I further think the
Justice Department is making a terrible mistake when you've got
people that are trespassing in an area that they don't go out
there and tell them they can't disobey the law. I mean, that
would happen any other place.
General Lyles knows, just west of the Ogden Air Logistics
Center, we have an area called the Utaques Training Range. It
is huge. It's one of the biggest ones around, clear air space
to 58,000 feet. Now recently some of the environmental people
are saying well, we ought to go out there and camp there, they
won't throw us off.
They did that, and they just about closed down Hill Air
Force Base, because what could we do? I can't believe, Mr.
Chairman, and I say it respectfully, that this Administration
is not going down there and making people obey the law. I
further can't believe that they are going to the point that
they are going to say fine, you can vote on it, and if you vote
to let us bomb you, we will give you $40 million.
Well, my goodness, the island itself is probably 200 to
$300 million, and frankly, I think this committee or the
committee ought to do something that is more dynamic to put
this situation back as it was prior to this political fiasco we
have gotten into.
Thank you, Mr. Chairman. Is that clear enough? [Laughter.]
Mr. Bateman. I would take issue with the gentleman in one
respect. You said you would respectfully disagree. I am not
even into--
Mr. Hansen. Did I say respectfully? I apologize.
Mr. Bateman. I am not even respectful in my disagreement
with the ridiculous position that this Administration has taken
and the incredible mess that we've gotten ourselves into vis-a-
vis Vieques. It is as bad as, I believe, we are giving them $40
million if they vote to let us bomb them, and then we will give
them $50 million more. There is no other place that is under
the sovereignty of the United States of America where our
national security needs require a local referendum of voters
before our national security interest can be pursued and
protected.
I think it is outrageous, just as the gentleman from Utah
did, but we will pass on now to Mr. Pickett.
Mr. Pickett. Thank you, Mr. Chairman. Gentlemen, welcome.
Good to have you here today. The quality of life issue for our
people is very important, because it has a lot to do with
retention and recruiting. I know we talked a lot about several
things, of housing and health care, and the resale system and
things of that sort.
One thing that hasn't gotten much attention in recent years
I think is the DOD's school system for the military families
that are stationed overseas, and how do you all believe that
this is working, and what kind of feedback are you getting from
the military people whose children are attending these schools
overseas?
General Keane. I'll lead off, if you would like. We have
had feedback on the DOD school system. It runs a spectrum. Our
soldiers and families in Korea feel the school system is
adequate. Our soldiers and families in Europe have challenges
with the school system. The staffing, they indicate, is not
what it should be. They also indicate that some of the
facilities that they are having to send their children in are
decaying and are not the kind of adequate facilities that you
would want to send American children to school in.
The CINC in the European command, I don't want to speak for
him, but I will tell you that he came forward as far as the
joint requirements oversight council and solicited support from
the services for the DOD school system and identified to the
services some of the problems that I just enumerated to you.
General Lyles. Mr. Pickett, let me speak from the Air
Force's perspective. I think the schools and the quality of
schools is a very, very important mission for quality life for
our people overseas, and it is an area that our commanders over
there are trying to address, and address in a very aggressive
manner.
We are very, very pleased that our two commanders, primary
commanders overseas, former General Johnny Jumper, used to be
the commander of the U.S. Air Forces in Europe, and General Pat
Gambol in the Pacific, both had taken strong initiatives to try
to define a school improvement program. That's not the formal
title, but that's essentially what it's all about.
It contains essentially four dimensions. Making sure that
we have the right kind of technologies in our schools so that
they can be up to date and get the right kind of information
and teaching quality to our students; to make sure that the
teacher ratio, the teacher-to-student ratio, is appropriate--we
want it to be no worse than 18 to 1, which is sort of a
national standard; it has been a lot worse in the past--to make
sure we have proper accountability for the teachers, that they
are properly certified, and to make sure that we are watching
this and watching literally on almost a daily basis. They have
made great strides as a result of this sort of school
improvement program, and we now are going to make sure that we
continue to support it and start monitoring and maxing funds to
support that every year as part of our program.
Admiral Pilling. As you know, the Navy presence overseas,
permanent presence overseas, isn't very great; but in referring
to the JR review that General Keane mentioned, the staff sort
of used several methods to look at the schools, particularly in
Europe, because that was where the CINC, the CINC over there,
was complaining about.
On the matrix of scores on tests and costs per student, the
DOD schools overseas were better than the average in the United
States. They were not as good as Fairfax County, and so that
was where the rub is. The CINC clearly would like them to be as
good as we find as a relatively well-off part of this country.
Mr. Pickett. Thank you very much. I don't know if you want
to add anything.
General Dake. I would only add that in Okinawa, where the
preponderance of Marines are forward deployed, the DOD schools
are very important to us. My children went to each of those, a
boy and a girl, and they graduated from these schools, so it's
important, and high quality at least in the Pacific. We don't
have the experience with the European schools.
Mr. Pickett. I know that there have been some comments
about the backlog and the maintenance of real property, and
there appears to be a continuation of a backlog in having
available enough spare parts; and there is also, there appears
to be a backlog in the depot maintenance in all of the
services, but I would like to ask each of you, if you were able
to get more funding for your respective services, where would
be your first priority for funding in the year 2001?
And I say that in looking at this three-year comparison I
see here, it looks like it has been pretty nearly a flat level
funding over the past three years. I don't see how you are
making it when you take into account the inflation, even though
the inflation is perceived to be modest. I don't know how you
all can make it from year to year on the same dollar amount.
But could you tell me what your first priority would be if
you get more funding?
General Keane. Yes, sir. Our first priority overall would
be in the readiness account, to buy back one, to bring up Base
Operations (BASOP's) up to 100 percent although it is funded
higher than this year than it has been in the past, our RPM and
also our depot maintenance account.
We are losing in the RPM business, frankly. The industry
standard I think, as everyone knows, is about three percent to
recapitalize, and the Army is somewhere around one percent, and
we can't keep up with it is frankly the issue. I know
Congressman Bateman mentioned 69 percent. That's the Army
number.
Believe me, we would like to make that number higher, but
given the other things that we must do as well, and try to
balance an Army budget with the programs that we have to fund
is a tough choice.
So our only answer, to be quite frank about it, is you have
to increase our top one hit. We can't get there within this
budget.
Mr. Pickett. Admiral Pilling.
Admiral Pilling. Probably our first priority would be
increasing the sources for recruiting and retention; but of the
three categories that you mentioned, I think spares in
particular, aviation spares, would be at the top of the list.
Second would be depot maintenance, and the third priority for
us would be real property maintenance.
The first two are much more closely tied to deployed
readiness because as you know, we put our emphasis on
readiness.
General Lyles. Congressman Pickett, I guess our response
would be very much in line with the under-funded priority list.
The number one thing on that list is retention and recruiting
initiatives, about $60 million that we are asking for in the
Unfunded Priority List (UPL), mainly because that is such a
major dimension of readiness that you don't usually think
about.
The other major items that are part of the UPL are base
operating support, which is the day-to-day operations of our
installations and facilities, and the RPM, which is another
major dimension for, again, readiness, and third, the
infrastructure guide log that you talked about earlier.
What's not reflected on the top ten for our unfunded
priority list are spares; and the reason why is because with
the help of Congress, we put about a billion dollars over the
last year or so in getting our spares numbers back up, both in
terms of Kosovo supplemental, additional money that the Air
Force and Congress put its spares; and we are now waiting for
the turn-around of the results of the spares increase that we
funded over the last two years.
We put a premium, a higher premium on RPM, base operating
support, and recruiting and retention because of that previous
funding of the spares.
Mr. Pickett. General.
General Dake. We have an unfunded priority list of $1.4
billion in 2001. That's all those four areas that I spoke
about--personnel accounts, and in there I'm talking things from
recruiting through those accounts; our infrastructure, which
has been up there for our readiness, and in many cases, not so
much on O&M that has been a problem, is we have taken it from
accounts and moved it into our readiness accounts to keep our
readiness high.
Modernization is our long-term readiness. We do believe in,
of course, our legacy system, so the $1.4 billion is straight
across those four pillars.
Mr. Pickett. Okay, thank you. Thank you, Mr. Chairman.
Mr. Bateman. Thank you, Mr. Pickett. Mr. Riley.
Mr. Riley. Thank you, Mr. Chairman. Gentlemen, it is good
to see you again. I have one question for General Keane.
General Keane, we are about to make this transformation to a
medium armed vehicle that you and I talked about in my office a
few weeks ago. With the level of procurement the way it is
today, and the shortfall that we have across the board that we
have in all the services today, how do you plan on funding
that, or do you essentially plan to take some some of the
existing equipment that we have out there now, modify it, and
make it into that medium category?
General Keane. Yes, that was a tough question for us. We
clearly, one, we recognize the need, we have to change and get
a more responsive force so that we can move strategically. The
issue is how do you fund it?
We had to take a look at our own equipment infrastructure
and make some tough choices in our modernization program. We
recommended to Congress to kill seven systems over the
following years to give us some of the funding to start this
program up, and also the restructuring of two programs, most
notably the Crusader program and our Forward Scout combat
system.
That was part of the strategy. The other part of the
strategy was to obtain from Department of Defense and the
Administration at least half the dollars to help get us
started, and that contract was established. So that gets us
going in the early years.
And our challenge will still continue to be there; because
while there was savings from those programs that we are
recommending termination for, most of the savings in those
programs does not come until the later years, where the
acquisition of those pieces of equipment lie. Right now, a lot
of those programs are still in R&D, so there is not as much
money there.
In the later years, it starts to pay for itself with the
termination of those systems. So we are in a struggle, to be
quite frank about it, to transform this Army with the kind of
budget numbers that we have; and we had to do some of that,
obviously, out of our own hide to be able to do it, to be very
frank about it. And they were--every single one of those was a
tough choice, because obviously we had a requirement for those
programs or we never would have submitted that request to the
Congress to begin with.
Mr. Riley. Do we have equipment out there that is available
today? And it seems like it just makes sense if you could take
some of the equipment we have today and modify it, bring it
back on line. You could do it not only cheaper, but you could
also do it faster. I don't know that we have the time to make
that deployment or that change in our--
General Keane. That's a good question. We clearly are
looking to design an objective force for the future, and we are
putting that objective force in research and development right
now, and providing some monies to do that, and also with the
help of Defense Advanced Research Projects Agency (DARPA), we
hope to get some technology answers in the 2003 time frame, and
then produce the objective force in 2012.
What we are doing now is trying to acquire some of the
characteristics of that force in the near term with off-the-
shelf technology; but we made a decision ourselves, what we
wanted was a fair and open competition, and we did not want to
predispose ourselves to any of the technologies that exist out
there to include some of those that we have been using
ourselves, like 113 armed personnel carriers that have been in
the Army ever since I have been a part of it.
So the companies that have owned those legacy systems, if
you will, are part of this competition that we intend to take
place in May and June, and also others who have provided other
types of capabilities--for example, real capability solutions--
to achieve this overall capability that we are looking for.
We wanted fair and open competition in an attempt to get
the best available that is out there. That was our thought
process. By doing that, it has taken us a little longer to get
to that major competition; but we think in the long run it will
better serve our soldiers and the American people if we have
that fair and open competition.
Mr. Riley. One more question, Mr. Chairman, if I can, is
that I hope you will look at as we open this up to open and
fair competition, I hope that the depots will be included in
that competition.
One of the things that I particularly hope you will do is
look at the partnering arrangements we have like the AIM-21
program in Aniston where you combine the best of both worlds,
and I think it's very, very effective.
So I would encourage you as you go through this process, to
tell everyone that is going to be participating in this
competition to look at the options of partnering the way we did
in Aniston on the AIM-21. I think it's a wonderful program.
General Keane. Sir, we agree with you, and something that
has not received much notoriety with the transformation
strategy because inside the Army to a large degree and maybe
even outside, we are a platform-center organization; and at
times we can't help ourselves. We just have a tendency to look
at these platforms that we have, and in which new ones we're
trying to acquire, but an important part of the transformation
is a recapitalization of our legacy force, and principally I'm
talking about increased locality for our life force, and
recapitalization of our heavy armored force.
We have made what we think is a critical decision, and that
is to take the Abrams tank back to zero hours and zero miles.
In other words, we would re-do that tank except for its hull,
and obviously it will be digitized as well. We see that tank
being around for the next 20 years, to be quite frank about it,
as well as the supporting systems that are around in support of
the Abrams tank.
So we intend to recapitalize a portion of our heavy armored
force to make certain that we still continue to have that kind
of overlap. If we have to go toe-to-toe with an adversary that
has that kind of capability, we want to make certain that
America has an Army that can defeat anybody else's Army with
that kind of capability.
Mr. Riley. Thank you, General.
Mr. Bateman. Thank you, Mr. Riley. Admiral Pilling, as
recently as Sunday, I was on one of the P-3Cs, land-based P-
3Cs, that you make reference to in your written statement. I
want you to look into something for me.
Admiral Pilling. Sure.
Mr. Bateman. On at least that one, and I don't know whether
it is characteristic of all of them, the toilet in the plane
doesn't function, and there is some work-around substitute for
it, and some of the most enormously skilled and talented people
you have fly on that plane for up to 12-hour flights during
their mission, and some of them are women, and this is a
preposterous result, and even if it ends up with a scandal of
an 800 dollar toilet seat, something needs to be fixed. Would
you look into that for me?
Admiral Pilling. Absolutely, sir.
Mr. Bateman. Mr. Ortiz.
Mr. Ortiz. Thank you. I have a question that maybe Admiral
Pilling and General Dake can assist me. I have been monitoring
the tragic accident that occurred in Vieques; and as we look to
what the proposal has been, you know, when you have a lemon,
all you can do is make lemonade, and this is where we are at
right now.
But what about the $40 million that has been, that is going
to be used for Vieques now? Is that coming out of an Office of
Person- nel Management account? Your overall maintenance
account? Or is that a supplemental? How are you going to work
this $40 mil- lion?
Admiral Pilling. As I understand it, none of those dollars
are in the defense budget. They are all in the budgets of the
other agen- cies, such as Commerce and Transportation, and they
are all fo- cused entirely on infrastructure on the island of
Vieques.
Mr. Ortiz. I see.
That answered my question, Mr. Chairman. I don't have any-
thing further.
Mr. Bateman. Mr. Hansen.
Mr. Hansen. Thank you, Mr. Chairman. Okay, gentlemen, maybe
you can help me on an issue. Yesterday I was out in the west
and was talking to an officer of one of the Reserve units, and
he got into this question of retention and recruitment, and he
said ``I really can't understand this.'' He said ``they have
lowered the tests of mental agility'' or whatever you call
that, and he said ``on physical,'' he said, ``I have these guys
and I am always filling out forms because they can't do''--and
then he listed it, and I can't re- member what it was--what
they had to do in a six-month period, and they had two shots at
it, and if they didn't make it, they were out the door.
It was so many push-ups, had to run two miles and such--I
can't remember all of them--and so we talked about it for a
while, and he said ``what if they had ten shots at it?`` He
said ``I think some of them could have made it.`` But he said
they just had those two, and he said so they can't do three
more push-ups or sit-ups in that length of time, but why do we
cut them out?
He said ``If I gave them more tries, they could probably
make it.`` I was sitting there wondering. I mean, I'm sure
there's got to be lines drawn somewhere, and you have got to
make some things. I remember when I was in boot camp when I was
18 years old; they were pretty strong on some of those things.
We all had to pass that, and it was fine. It was kind of
enjoyable when you are at the peak of your capacity, but some
of these guys don't do those things, especially in the Reserve
units.
I'm just wondering why those--you are lowering one, but you
keep another one high like that with some folks that can't
quite make it.
I'm speaking out of the other side of my mouth--I sound
like a politician here--but I was also talking to an instructor
pilot for hel- icopters for the Army, and he said he had been
instructed to lower the grades that he would normally give so
that he didn't flunk as many guys out.
Now, you've got to help me here. Am I wrong on both of
those counts?
General Keane. Well, Mr. Congressman, I don't know for
sure, to tell you the truth. What I can tell you is certainly
mental agility standards are not being lowered. Second,
physical training stand- ards are very important to an Army, as
you can well imagine. We have to have certain levels of
physical strength and stamina to meet the requisites of the
battlefield, and we clearly administer to our standards--to our
people on a periodic basis physical training tests to ensure
they are meeting those standards; and if they fail it, we give
them a reasonable period of time so that they can pass this
test, and also we give them some counseling to ensure they
understand what is at stake here.
I will be more than happy to take a look at it, what's
taking place with this organization; and maybe we could speak
privately about who the organization is so I can focus in on it
a little bit better.
Mr. Hansen. Excuse me, General. He says he is losing five
percent of his group every year, five percent because they
can't do three more push-ups. You don't agree with that?
General Keane. I can't speak to it. I have no specific
knowledge. I will tell you this, and I'm not going to hide this
from you, we have more challenges with American youth today
than what we used to have in terms of their physical strength
when they come to us. A lot of them are overweight, and a lot
of them do not meet acceptable physical standards, and that's
what basic training is all about; and then we have to maintain
and sustain those standards over time.
For the most part, we are being very, very successful in
doing that. I have to take a look at this thing and focus in on
it to give you a much better answer than what I can here today,
sir.
Mr. Hansen. Are we lowering the standards at all on people
who are flying aircraft or helicopters, these expensive
airplanes we buy?
General Keane. I have no knowledge of that. The only thing
that we did, we did do this, in the last couple of years, we
did cut back on the number of flight hours, flying hours that
it was taking to graduate as a pilot in the Army. We are
corrupting that, and we have discovered that what we wound up
doing for ourselves is burdening the receiving unit, and they
have to compensate by doing some additional individual pilot
training that we reduced in flight school, initial entry flight
school in the Army.
That's the only standard that I'm aware of that we moved
away from, and we are putting that back to where it was. In our
judgment, it was a mistake.
The other I'm not familiar with at all. I am not suggesting
it may not have happened, but I just don't know the facts of
it.
Mr. Hansen. Thank you.
General Lyles. Congressman Hansen, we have not lowered any
standards either from the Air Force, obviously, certainly for
our pilots and the kind of training that they have to go
through. But even though we are strapped for recruiting, we
have also taken a stand that we are not going to reduce the
standards for our enlisted folks coming into the U.S. Air
Force.
We have been challenged as to why our rate of acceptance of
graduates, GEDs, is lower than the other services, but we have
made a conscious decision that we want 98 percent of our people
coming in on enlisted force to have high school diplomas, not
GEDs--only two percent GEDs--and we have decided to stick to
that even though it would give us some marginal increase to our
recruiting numbers if we were to lower it down to 95 percent,
as an example.
We think it's the right thing to do, given the technical
complexity of all the things we are trying to do in the U.S.
Air Force, and we are going to stick by that, at least for the
time being.
Mr. Hansen. General Dake, would you like to respond?
General Dake. Yes, sir, I would like to address a bit what
we call the first term enlisted plan, so if people come in for
a four year enlistment, we are concerned about the number of
them which actually complete their full four years.
We have reduced those who had--we had about 58 percent of
the Marine Corps was in our first term. We are a very young
force. At 8,000 a year, 8,000 people--not each year, but 8,000
in our first term failed to complete it for various reasons. It
could be physical fitness, it could be humanitarian, there
could be a lot of other reasons why people do not make it
through that first term of enlistment.
We think that is very important that we increase that. We
have actually reduced our attrition by 22 percent. We think
that's a combination of things that we have strengthened rather
than reduced standards, that we have strengthened things like
the crucible in our recruit training, that we have looked to
the commanders to be more involved so that if there is a
problem of a Marine in their command, that they personally get
involved to make sure that everything is in fact done, not just
by regulation, but also by that which makes sense to the
readiness of their command.
We believe that 22 percent reduction equates to 1800
Marines which in our recruiters is about two battalions worth
of Marines that we keep now that over the past five years, we
would have been losing by those same rates.
So it is an important thing to have this first term
enlistment, that they complete that; and we believe if you work
hard at it and give command attention, you can make a
difference, and we have done that without lowering any
standards.
Mr. Hansen. Okay.
Admiral Pilling. Let me just comment on the Navy. The only
thing we have changed on entry standards in the last couple of
years was during the drawdown as we were getting smaller, we
required 95 percent of our recruits to have high school
degrees. When we finished the drawdown, we went back to the DOD
standard which we had maintained all through the 1980s of 90
percent high school degree graduates.
And on PT, physical readiness standards, we are changing
our program right now. You take your test every six months, and
if you have three failures in four years, last year we would
have thrown you out. That's three failures in four years, so
it's a year-and-a-half process.
We are going to change that this year to three failures in
four years means you can't reenlist, but you stay until the end
of your enlistment.
Mr. Hansen. Thank you, General. I appreciate that. Thank
you, Mr. Chairman.
Mr. Bateman. General Keane, during the course of the
weekend, I met with a warrant officer in the Army, and if my
recollection of the facts is correct, he was in Kosovo detached
from his unit during the course of a three-year tour in
Germany, but six months of that tour he will spend in Kosovo.
He expressed a concern and a negative factor in whether or
not he would be willing to stay in the service, that he would
expect to go to another short tour, i.e., probably Korea,
because he had a long tour in Germany.
Now, I think if that is anything like accurate, the Army
needs to be refining the way it is looking at its personnel for
purposes of reassignments. If he does a three-year tour in
Germany, six months of which is in the worst of circumstances
in Kosovo, that is not exactly the kind of thing that you then
want to send your guy off onto another hardship tour.
So I hope the Army would be looking at kind of a
reassignment policy, and not perhaps just assuming everybody
who got a tour in Germany is equal to everyone else that has a
tour that was supposed to have been in Germany, but ended up
with part of it being somewhere else.
General Keane. Yes, sir. I thank you for that question, and
by the way, just many thanks for the time you spent with our
troops in Bosnia and I know that you probably don't want any
personal acknowledgement of this, but we truly appreciate the
fact that you were on a patrol of soldiers and that you truly
found out what it is like for them day in and day out.
For our soldiers who were deployed to Germany for a routine
three-year assignment, it is almost a certainty that they will
do six months, at least, and possibly longer, in Bosnia or
Kosovo. It is also probable that they will do another six
months in that three-year assignment as well.
What we are doing in our personnel management is to ensure
that those soldiers, whether it is six months or two six-month
tours, we have a safeguard in place to prevent them from going
to short tour overseas assignments.
I'll be up front with you. About a year and a half ago, we
had some of these problems, and I was the commander of some
people that that was happening to, and we had to put these
safeguards in place to ensure that the system would, that that
would not happen.
So we think we have got that fixed, and it has been fixed
for some time now. So that youngster can be assured he is not
going to go on short term assignments, but he could possibly
face another six month assignment--I don't know how long he has
been in Germany as well--because that's the demands that are
there.
Mr. Bateman. Thank you, General. Let me advise you, the
subcommittee and the panel, that I have to go and make a phone
call, and so I'm going to ask Mr. Riley if he would preside,
and I also want the panel to be aware that I will have some
questions that I want to submit to you for the record, and that
Ms. Fowler, who has had to go to a leadership meeting, if she
doesn't get back, she has some questions which she will be
submitting for the record.
Mr. Riley, if you would.
Mr. Riley [presiding]. Gentlemen, I just have one question,
and this may be an oversimplification. First let me say that
I'm glad we don't have these mental agility and physical
agility tests for Congressmen. If we did, I don't know how well
we would survive.
But when you look today at the reduced level of training
like we have talked about in Vieques, our chiefs come in and
tell us that we are $84 billion short over the next five years,
our OPTEMPO levels are probably the highest they have ever been
in peace time. We have an almost critical manpower shortage in
just about all of the branches.
This is a readiness committee. On a scale of one to ten,
where is our readiness level today?
General Keane. Well, on a scale of one to ten for the Army,
we are somewhere around a seven or eight, I would probably put
it at. When you consider all of what we're talking about in
terms of readiness, you know, we measure readiness in a
readiness report; and we are essentially looking at the numbers
of people we have, the equipment that's there, and the
training.
But in the Army, we would like to argue more that readiness
is clearly more than that. It is some of the other things that
we have discussed here. It is our base ops capability, it's our
RPM strategy, our depot maintenance strategy, as well as the
amount of ammunition that we have. It's what we have in war
reserves that deal with all of those issues.
And personnel readiness, not just the numbers of people,
but the quality of the life experience for our people is a
factor in human readiness that's important in all the services.
So to be quite frank about it, we are challenged in those
other areas, and that's how I would categorize it for the Army.
Admiral Pilling. For the same reason General Keane points
out how difficult it is to put a single number on it, because
the Navy deliberately under-resources non-deployed units so
that all of our forward deployed units at the pointy end of the
spear are C-1, C-2 units; on any given day we might have 40 to
50 percent of our ships and squadrons not ready to go.
So that would say we are somewhere around a five or six on
a sale of ten. The easier way to describe it is in terms of
risk, I think. The risk you have with the non-deployed force,
the force that is in the integral and training cycle, if you
have accepting contingency, that's a high risk contingency to
get finished in the time lines that are laid out in the war
plans.
General Lyles. I have to agree with Admiral Pilling. I
think you need to look at this very, very complex equation in a
lot of different ways. The number that we sort of attest to is
about 6.5 to seven, and that reflects primarily our combat
units and those that are at the C-1 or C-2 level.
But when you look at the definition of C-1 and C-2, it
doesn't mean that we won't accomplish the mission, it means
that the risk will be a little bit higher in accomplishing the
mission, and we might make some trades and things like that to
make sure that those units that are at the pointy end of the
spear can get everything accomplished and do it very, very
successfully.
But the best number we would have to say would be 6-1/2 to
7, and it reflects just those at C-1 and C-2.
General Dake. Sir, the Marine Corps as a force of
readiness, we sacrifice a lot to try to keep that high, so that
our deployed forces are well-trained and equipped when they go.
We have chosen to take risks in the reserve equipments that
they do not have at their home stations. That is where if you
were to look at our ground equipments which the readiness is
high--over 92 percent of those that's in our possession in the
active side.
If we were to go to the Reserve side, that which they have
on their stations would be above 90 percent as well, and that
which is in the depots and waiting for call is where we have
chosen to take some risk, so that is where we would find, if
there were more funding to bring readiness up, it would go to
areas such as that.
But I would also say that we are balanced in the C-1, C-2
category and we are holding costs; and, in fact, you will see
an improvement from the one quarterly report that is referenced
I think at the end of September or the beginning of September,
and the one in December. We have actually had some units that
will in greater number go to C-1 and C-2, so I don't know how
to quite put a number on it for you, sir, but that's our
sacrifice to move toward readiness.
Mr. Riley. Gentlemen, if you can't put a number on it, I
don't know how we ever will up here, and I guess that's what
I'm trying to do. The last two-and-a-half years, we have
constantly talked about all the problems, but until we get to a
point that we can realize on this committee where we are,
because the next question is if we are at fives and sixes and
sevens now, where will be five years from now without a major,
major infusion of capital?
General Dake. Point well taken, sir, about my not putting a
number on it so how can you. I think the answer that I would
pose to that is that as we look at where we took the
billpayers, that's where we would look for the funding in this
case, in 2001 of $1.4 billion to restore us to that which we
believe is what is needed.
Mr. Riley. Well, and I think that's what the chairman was
trying to get to a little earlier. If we are at a six or a
seven now without a major infusion of money within the next
four to five years, where would you say that the Army will be
five years from now if we are at seven now?
General Keane. We'll decline.
Mr. Riley. How much?
General Keane. Probably one or two, I would imagine.
Mr. Riley. So we will be down to fives.
General Keane. Right. And clearly that, that is in the
context of the total readiness complexity that I was talking
about. It goes beyond just a report, and that's what your
struggle is. There is no readiness report that will satisfy
that question which you have asked. This is much more complex
than that report.
Mr. Riley. It is, and I think it's the complexity that
keeps us from doing our job on this committee. There are so
many things out there that we need to simplify this to a term
that we can go out and we can sell it, you can sell it. If we
don't, I think we will continue to go around trying to
arbitrate various provisions, and not look at what is really
required for overall force.
A few weeks ago we heard a report in the full committee
about the train wreck that is coming, and I took the little
book, the little pamphlet they gave us, took it home and read
it. I will be honest with you. It was frightening, and I guess
that's my point. If we were starting at a ten today, or a nine
or a ten, four or five years from now maybe we would be down to
a seven, but if you are telling me we are at fives and sixes
now, and we have got this train wreck coming, especially with
procurement, or the inability to have those procurement levels,
it seems to me like unless we do something very drastic within
the next year or two, you guys are going to have a problem that
you can't, almost cannot control.
General Keane. Congressman Riley, I think you're sensing a
bit of frustration from all of us in some respects in how do we
define this, and how do we define a good quantifiable number.
If you look as an example, I think all of the services are
reflecting today; we're addressing people issues. We're trying
to make sure we're addressing recruiting and retention. That
helps readiness in the future. We are addressing things like
modernization, which is future readiness. We are addressing
readiness itself in terms of spares and things of that nature;
and if we can keep that up, that will help us.
The one area that I think we all are suffering from, and
that we're all concerned about, is infrastructure, and I'll be
honest with you, I'm not quite sure if you're addressing three
of the four, and not addressing the fourth, whether that means
you will continue to go down, or you will level off, or
slightly come up a little bit.
We're not quite sure of the exact science in this, and I
can't give you a good quantifiable number, but I feel positive
that at least three of the areas are being addressed
positively.
Mr. Riley. Let me give you one option. We all know the
level of deployments we have all over the world with every one
of your branches. At what time do we step up and say we can't
continue to have all those deployments all over the world using
up our men and our equipment? At what point do we go out and
ask our allies to take a larger role?
If this Administration is not committed to adequately
funding the troop strength that we have now, when do we, and
how do we, talk to our allies about increasing their share of
the burden?
General Keane. Well, I'll take a stab at it, sir. First of
all, in terms of the basic deployment that we're conducting in
Bosnia and Kosovo, I think you are aware that our allies
participated in both of those deployments as well; and
certainly in Kosovo, for example, the latest deployment the
Army is involved in with our 6,000 soldiers, clearly the sum of
the allied involvement clearly exceeds the Army's
participation.
I think our CINCs and the Chairman and our civilian leaders
work towards that end, to get greater participation in these
operations and deployment that we have around the world, and I
think they have had some success with it. But I wouldn't hide
from you that these deployments really take a toll on us.
I would say this, though. Our soldiers on these deployments
that you visited, and Congressman Bateman and his colleagues
have just returned from, our retention rates during those
deployments go off the charts. The Army actually exceeded its
retention objectives last year by 6,100 soldiers, and we're
doing good this year.
We attribute a portion of that to the satisfaction and
generally sense of self-worth and self-esteem that comes from
doing something that's important and makes a difference in
other people's lives, so those deployments, while they take a
toll on family readiness, there is also something special that
is happening to the individual soldier that's participating.
What we have to do is make certain we are treating those
deployments equitably for our soldiers, and we're not over-
burdening them as well.
The other point I'll make to you is, I wouldn't hide this
from you, I mean, we are looking at the Army in terms of its
size. I mean, do we have the right size Army? Number one, we
have to be able to recruit for the Army, and we do that. And we
are being challenged by that. Last year we came up 6,300 short.
This year we have made our recruiting objective in every single
month to include this month, but we know we are going to be
challenged in the next three months.
We believe we have to recruit for the size of the Army that
we have. We're going to bring all of our war fighting divisions
up to 100 percent strength by doing some things internal to the
Army that we have been unwilling to do in the past.
Those will be tough calls for us, but we're going to take
this readiness from a people perspective off the table and
solve that problem for ourselves; and we do have a study
ongoing in terms of what the size of this Army is based on the
foreseeable future and the operational deployments that we're
facing.
When we've got that answer, we will come back and present
it to you as well as others, to the Administration. Thanks.
General Lyles. Congressman Riley, the Kosovo was a major
lesson learned again for air power, and when I say air power,
I'm not just talking about the U.S. Air Force, I'm talking
about Navy air power, Marine Corps air power.
The United States did the bulk of the missions, obviously,
from the air, and we have proved once again that our modernized
capabilities across the board for the three services are very,
very important for prosecuting successfully and efficiently
that kind of contingency warfare.
We are starting, and have started for some time, to
dialogue with our allies, to urge them to get precision guided
munitions, to urge them to get more stand-off munitions, to
urge them to get the intelligence surveillance, have platforms,
even to urge them to get more airlift capabilities so we don't
have to depend just on the United States to provide those, in
those kinds of contingencies like we saw during Kosovo.
It's an uphill situation for them, obviously, and major
investments that they will have to commit to, but we want to
make sure that we are opening this dialogue and urging them to
be prepared to take on some of these missions in the future.
Mr. Riley. So have you met with any success?
General Lyles. At least they are listening and they're
talking and within their budgets, to date, obviously, nothing
that I could pinpoint, but at least they're talking about it,
and I think to some extent, some of our allies realize that
they were in somewhat of--I won't call it an embarrassing
situation; they wanted to contribute more, and did not have the
sort of platforms, and those I talked to, particularly the
senior airmen in some of those countries, they realize that
they're--they just need to stand up and be accounted for in
some of these areas.
Admiral Pilling. Sir, if I could go back to your issue on
single number characterization of where we are going, I think
the chiefs have told you that if the OPTEMPO remains the same
with the current force structure, and the current environment
for people as far as recruiting and retention, the number is
going to be $84 billion.
Mr. Riley. That's right.
Admiral Pilling. If you're going to try and balance near-
term readiness and far-term readiness. It's $84 billion.
Mr. Riley. And I guess that's my point. There doesn't seem
to be a consensus to try to find that $84 billion. Without that
$84 billion, where will we be four or five years from now?
That's what I'm saying. When I read this report and looked at
our OPTEMPO level, the way it is today, if we don't drastically
reduce that, if we don't make some of these procurements, if we
don't get at least part of that $84 billion, it seems to me
like three or four years from now, our soldiers and our sailors
and our airmen are going to be at extreme risk that I don't
believe that we should put them in.
It is going to be up to you gentlemen to sell this, and
that's what I'm saying. I think sometimes we make it so
complicated and so complex in these hearings when we talk about
each individual thing that is going on, that it's hard to
understand how dramatic this change is going to be unless we do
something relatively soon, and I see no sentiment in the
Administration to make that happen.
And like I said, it is beginning to frighten me. When I
talked to people on Airborne Warning and Control System
Aircraft (AWACs) last year, who had done already back-to-back
six month tours, and he said I'm getting out of this. He said
I've got two kids at home and I will not do it. I joined the
Air Force to fly, and I love it, but I will not be gone from my
children a year and a half at a time.
We've got to make some very critical decisions. We either
cut back our deployments, or we put these young men and women
at an unacceptable level of risk, as far as I'm concerned.
General Dake. Sir, could I mention--
Mr. Riley. Yes, sir.
General Dake. Could I talk about deployments a bit? It is
somewhat different on the part of the Marine Corps insomuch as
we are forward-deployed. It is a cycling thing that we do. We
base our DEPTEMPO on new Special Operations Crafts (SOCs) off
of the East Coast, with 58 percent of the Marine Corps being in
that first term.
They really joined to do something. They joined for some
bit of adventure. We at least are seeing the stressors of
constant deployments within our professional force, the ones
who are beyond their first term, now they are called to go
again and now their families are growing; that's where I think
we must find balance.
There's two types of deployments, the types you do on a
national basis, where you sail off and do the business of the
nation, and the other that we generate ourselves to go to
Twenty-Nine Palms, for example, to train up. Either way, that
Marine is away from his or her family.
We try very hard to try to control the training
deployments. We don't believe that the operational deployments
that we have been given, as long as they stay in an SOC that we
are manned and equipped to do, we can handle that on a
sustained basis.
We have got to control our own deployments for training and
those types of things which are our own self-generating. Now,
deployments outside of those scheduled ones are the ones that
will become increasingly difficult to do.
Mr. Riley. Gentlemen, you have a tremendous task ahead of
you, you really do. The only thing that I would like to leave
you with is just that each one of the branches, each one of you
individually, are going to have to become strong advocates,
strong proponents for additional funding or a reduction in
deployments, because if not, I think that this country faces
some perilous times ahead.
I want to thank you for your candid opinions. Thank you for
the service you give to this country, and thank you for
appearing before this committee.
Thank you very much.
[Whereupon, at 3:45 p.m., the subcommittee was adjourned.]
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A P P E N D I X
February 29, 2000
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February 29, 2000
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QUESTIONS SUBMITTED BY MR. BATEMAN
Under Execution of Funds
Mr. Bateman. Why does the Army consistently request 100 percent
funding for it operating tempo accounts and then consistently
underexecute these available funds?
General Keane. We request full funding for our operating tempo
(OPTEMPO) accounts (the readiness Sub-Activity Groups (SAGs) 111, 112,
113, 114, and 115) because they form the basis of our training
requirements to provide trained and ready forces to meet the National
Military Strategy based upon the Army's Combined Arms Training Strategy
(CATS).
However, our ability to successfully execute this training is
reliant upon the training support and infrastructure available to the
commander. As an example, a unit cannot successfully conduct range
training without the targets to support that event. Targets are not
part of OPTEMPO accounts, but are obviously needed to execute this
training. Commanders need to balance resources to fully support
training. In addition to training concerns, commanders must provide for
a minimum acceptable quality of life for soldiers and families. These
quality of life requirements also compete for scarce resources in
accounts that have not been traditionally funded. When quality of life
and other essential base operations are not funded adequately,
commanders are faced with the tough decision whether to train to 100%
or migrate a small portion of those funds to other accounts. Finally,
when units are deployed for scheduled events, like peace keeping
operations, or unscheduled activities, like disaster relief, they may
lose the opportunity to train on their combat vehicles, further
decreasing the ability to fully execute their OPTEMPO miles.
Future Tank Mile Requirements
Mr. Bateman. Why is actual historical use not factored into the
Army's Training Resource Model when determining future tank mile
requirements?
General Keane. Historical use is factored into the Army's Training
Resource Model in the form of cost factors, and these are used to
determine future tank mile resource requirements. The Cost and Economic
Analysis Center (CEAC) computes a cost per mile based upon a three-year
moving average. Future tank mile requirements are not directly related
to historical miles driven. Requirements are based on the Combined Arms
Training Strategy (CATS), which provides for a mix of live, virtual,
and simulation in training.
Operating Tempo
Mr. Bateman. Where did the Army spend the $400 million intended for
operating tempo in fiscal year 1999?
General Keane. During any fiscal year, there are several things
that can happen to cause execution of a program to differ from the
appropriated amount. First, there are transfers ($102 million) that
result from undistributed congressional adjustments that are spread
across all programs. Second, there are transfers ($126 million) that
result from Headquarters, Department of Army either fixing ``Army-
wide'' bills which result from changes in policy or economic
environment, or funding new requirements that have emerged since the
budget request was submitted. The Army leadership is actively involved
throughout this process and makes the tough choices on the most
pressing requirements. After all the Congressional and HQDA transfers
are applied to the base funding, it is then sent to our Major Commands
(MACOMs) for execution. In the past two years, we have decreased the
amount of the HQDA transfers by over 60%, which in turn provides the
MACOM commanders more flexibility with the funding they are provided.
The commanders in the field must balance priorities during the
course of the fiscal year, often resulting in the further transfer of
OPTEMPO funds. We have always fully funded the OPTEMPO account at the
expense of other readiness accounts, such as Base Operations Support
(BOS) and Real Property Maintenance (RPM). Due to funding constraints,
many of the requirements in these areas remain unfunded, eventually
impacting directly on our soldiers' quality of life. OPTEMPO, BOS, and
RPM are normally the commander's largest accounts and provide the
maximum amount of flexibility. The majority of the transfers that we
make are from one readiness-related account to another, or to support
training ranges, airfield operations, and related activities; all
critical elements in keeping our forces trained and ready. In FY99,
OPTEMPO funds were transferred to the following accounts: RPM ($66
million), BOS ($23 million), and Force Readiness ($52 million).
Finally, we also provide an offset to our contingency based on the
forces we have deployed. The OPTEMPO funding that was programmed for
these units is transferred to our Miscellaneous Activities account to
offset the costs of these operations. In FY99, $23 million was
transferred for this purpose.
Tank Mile Training Readiness
Mr. Bateman. Because Army commanders are not achieving the 800-tank
mile-training goal, how is actual training within a range of 630 to 654
tank miles, from fiscal year 1996 through 1998, affecting readiness
levels?
General Keane. The Army requires the resources that have been
provided to sustain our ability to train as well as conduct that
training. There are numerous factors such as time, personnel,
equipment, ammunition, and available training facilities that affect a
commander's training level evaluation. Reduced training funds do not
necessarily have an immediate impact on training readiness. The impact
is often subtle and cumulative over time, not manifesting itself in
reported readiness until sometime in the future. Missed training
opportunities today cannot be easily made up and will ultimately result
in poorer trained units and leaders who missed critical experience.
Under current reporting procedures, the unit commander determines
the training level for his unit by estimating the number of additional
training days required for the unit to become fully trained on its
mission essential task list (METL). The METL is a list of those
critical wartime tasks the unit must be able to perform to accomplish
its wartime mission. METL proficiency is a function of training
frequency, duration, and intensity. Reducing tank miles affects both
the frequency and duration of unit training events. Additionally, per
Congressional guidance, the Army continues to develop a reporting
system that is more objective in nature.
O&M and RPM Budget Requests
Mr. Bateman. Why is the Army not submitting realistic budget
requests that would fully fund the costs for operating and maintaining
bases and related real property?
General Keane. The Army submits balanced, realistic budget requests
given the top-line constraints, which preclude full funding of all
readiness accounts. The Fiscal Year 2001 budget funds Real Property
Maintenance and Base Operations Support at a critical level to continue
operations with tolerable risk. Critical levels for fiscal year 2001
are 96 percent of total requirements for Base Operations Support and 69
percent for Real Property Maintenance.
Readiness/OPTEMPO Balance
Mr. Bateman. How do Army commanders balance the increased readiness
risk by decreasing the desired operating tempo requirements?
General Keane. The commander is the one best suited to make the
decisions regarding increasing readiness risk by migrating Operations
and Maintenance (O&M) funds used for unit training to other purposes.
This flexibility is provided to the commander to maximize the benefit
from available funding to meet the full spectrum of the unit's training
needs as well as the installation's quality of life needs. The
operating tempo (OPTEMPO) requirements are based on the Combined Arms
Training Strategy (CATS), which provides a menu of tasks that are
associated with events that when executed will result in a combat ready
battalion. Each commander makes an assessment of the status of the unit
and determines what events to conduct and the area and degree of risk
to assume. He/she may shorten or eliminate training events or lessen
their intensity with the view in mind that he/she can make up the
shortfall in the time between notification to deploy and actual
deployment. There are many variables associated with these decisions,
and we rely on the local commander's judgment.
Mr. Bateman. Specifically, how is readiness affected by continually
achieving less in operating tempo goals?
General Keane. Today's Army is capable of fulfilling its current
missions as outlined under the National Military Strategy, within
acceptable ranges of risk. Declining resources, however, has meant that
commanders have, at various times, been compelled to make choices
between quality of life resourcing and training resourcing. Commanders
train their units to the extent of resources actually available. In
some cases, this has meant that their readiness is less than desired,
increasing risk, as reflected in their readiness reports. Increased
risk in readiness does not mean that the U.S. Army would not prevail in
any scenario. Instead, it means the potential loss in national treasure
could be higher.
Mr. Bateman. What units are affected the most? Please be specific.
General Keane. Units that are forced to function outside their
normal METL proficiencies tend to have their readiness affected, since
their activities are not directly related to their warfighting
missions. Their additional missions are not necessarily a component of
their readiness rating. In general, combat support elements seem to be
affected to a greater extent than combat or combat service support
elements, whose missions more closely approximate their METL tasks.
Transfer of Contingency Funds
Mr. Bateman. For fiscal year 1997, the Army transferred over $1.4
billion from the centrally-managed Contingency Account into O&M
subactivities where it was used such as in combat units, tactical
support, and force-related training and special activities. However,
for fiscal year 1998, the Army transfer $1.6 billion from the
centrally-managed Contingency Account into one subactivity for
miscellaneous or additional activities. What are the pros and cons that
the Army has learned by transferring contingency funds into one special
account opposed to several individual subactivities like divisions and
corps combat forces?
General Keane. Accounting for the majority of Army contingency
operations costs in a single, separate subactivity account allows us to
more accurately identify all contingency costs. This includes
incremental costs for direct support of the operation and training
offset costs for training not conducted due to deployment. This also
allows us to clearly identify budget execution by element of resource
and operational phase. The result is also an ability to more accurately
estimate the funding required for subsequent years of an ongoing
contingency, or estimate the cost of an unplanned contingency of a
similar type. We found that transferring funds into several subactivity
accounts made it more difficult to separate contingency costs from
normal baseline training costs.
ARNG Enhanced Brigade Deployment
Mr. Bateman. We've put a lot of resources into the National Guard
enhanced brigades. How many times have they deployed, and why are they
not used more often?
General Keane. During fiscal years 1999 and 2000, six infantry
companies from the 39th (Arkansas) and 41st (Oregon) enhanced separate
brigades were deployed in support of Operation DESERT FOCUS, providing
security for patriot missile batteries in Southwest Asia. Elements of
the 30th (North Carolina), 45th (Oklahoma), 48th (Georgia), 155th
(Mississippi), 116th (Idaho), 76th (Indiana) and 218th (South Carolina)
brigades are currently scheduled to deploy in support of Stabilization
Force (SFOR) rotations 8 thru 12 for operations in Bosnia. Presently
all 15 enhanced separate brigades are fully integrated into existing
warplans. The Army National Guard (ARNG) enhanced separate brigades
have been utilized when the situation required and current planning has
incorporated these capabilities to best support a variety of scenarios.
As the Army begins it's Transformation to a lighter, more responsive,
and more lethal force, ARNG enhanced separate brigades will be called
upon to mitigate risk as Active Component (AC) units transition to
objective organizations.
Mr. Bateman. Do you believe that the purchase of the M-Gator, a
low-cost off-the-shelf piece of equipment, is necessary to the needs of
the Army? If so, why is it not on the budget?
General Keane. The M-Gator would provide the Army, in particular
our light units, with an increased capability to perform their mission.
The Army views the ``Drop Zone Mobility Enhancement System'' as a unit
level procurement and did not fund the system as an Army centrally
managed line item in the procurement budget. However, commanders in the
field may purchase the M-Gator out of their day to day, operating funds
(OMA).
Mr. Bateman. Do you believe that the purchase of the M-Gator will
be included in future budget requests?
General Keane. At this time, there is no plan to include the ``Drop
Zone Mobility Enhancement System'' in future budget requests.
Mr. Bateman. As a light Infantryman, can you comment on the utility
and need for the system in our Light Divisions?
General Keane. The Army's Light Divisions require a high degree of
mobility and must be rapidly deployable. An M-Gator type vehicle, which
is easily deployed, would provide Light Divisions with an increased
lift capability that would assist in the movement of supplies and light
equipment, and the evacuation of casualties.
Unexecuted Accounts
Mr. Bateman. GAO's recent report on O&M fund movements-Defense
Budget: DOD Should Further Improve Visibility and Accountability of O&M
Fund Movements (GAO/NSIAD-00-18, Feb. 9, 2000) found that the Navy has
consistently underexecuted its funding for ship depot maintenance by
about $1.2 billion or 10.5 percent from fiscal year 1994 through 1998.
This subcommittee is encouraged to learn that the Navy obligated most
of its funding in fiscal year 1998 for ship depot maintenance, however,
when viewed over a five year period, the amounts not used for ship
depot maintenance need explaining.
Why did the Navy not use all of its available funding for ship
depot maintenance in light of its ship overhauls and other ship depot
maintenance requirements?
Admiral Pilling. In any year of execution, requirements arise which
must be funded from within available resources. When this occurs, the
Navy must balance this new requirement against currently funded
operations and commitments, including ship depot maintenance, and
decide which programs will be sacrificed to accommodate the higher
priority new program. Also, ship depot maintenance takes it's fair
share of Congressional undistributed reductions which, until fiscal
year 1999, were not reflected in the appropriated amounts and thus
appear to be programmatic decreases by the Navy. Over the five year
period referenced (FY 1994-98), these reductions amounted to almost
$200 million. Last, there are sometimes programmatic decisions made
during the year of execution which lead to funding changes. For
example, the latest QDR directed ship force structure reductions that
led to the cancellation of fiscal year 1998 availabilities for ships
that were to be decommissioned as a result.
Mr. Bateman. Where did the Navy ultimately spend these funds if not
obligated to meet these ship depot maintenance requirements?
Admiral Pilling. As noted above, there are many different programs
that may have higher priority emergent requirements in a given year. In
particular, contingency operations are often not fully financed by the
Overseas Contingency Operations Transfer Fund (OCOTF), necessitating
transfers, usually from maintenance accounts which afford greater
flexibility, to operating accounts.
Flight Training
Mr. Bateman. Concerns have been expressed that funding has been
insufficient in the recent past to train pilots to be combat proficient
in all areas of their aircraft's capabilities, e.g. air-to-air, air to
ground, etc. The FY01 budget funds tactical air flying hours to
maintain primary mission readiness (PMR) at 85% of requirements, that
same as last two years.
Given the sophistication of the systems Navy pilots have to
operate, shouldn't funding and flying hours be increasing?
Admiral Pilling. Whenever there is an increase in the
sophistication of any weapon system there is a need for training to
that capability. The issue is determining, funding, and fielding the
appropriate training system for each increasingly sophisticated task.
In the case of naval aviation the answer is in a proper mix of flight
hours for dedicated training and simulator hours in a device whose
capabilities and fidelity match those of the aircraft. The current
budgeted flight hours will provide the dedicated airborne training
necessary as long as all the other required elements are available.
These are aircraft capable of flight, enough people to fly and maintain
these aircraft, an adequate supply of spare parts on the supply
shelves, as well as the availability of practice weapons and weapon
ranges to fire them. These training hours must not be sacrificed to
sustain an increased forward presence operational tempo, nor can the
funds be used resource other priorities or the result will surely be
decreased training opportunities and declining readiness. The remaining
element of this naval aviation training readiness equation, simulators,
must also be addressed. Given the expense of precision weapons and
their increased range, there are few opportunities to experience live
training. Simulators with the same high degree of sophistication as our
aircraft can provide a significant portion of the fundamental training
requirements leading up to the final exam of actual aircraft weapon
firing. The numbers and sophistication of these simulators must be in
balance with the previously noted elements that comprise the aviation
readiness equation. The answer to your question is in achieving this
balance.
Mr. Bateman. Are you confident that you can maintain aircrew
proficiency, safety, and all other training requirements with this
level of funding?
Admiral Pilling. As discussed above, as long as we keep all the
elements of the aviation readiness equation in balance, the budgeted
hours will accomplish what you describe.
Navy Marine Corps Intranet NMCI
Mr. Bateman. In June of this year, the Navy intends to award a
contract to one prime vendor who will have the responsibility for
purchasing, operating and maintaining all of the Department of the Navy
(DON) computers and video capabilities. The contract is for five years
with three options years. At an estimated $2B per year, this contract
could have a total value of $16B. There are currently no funds
identified in either this year's budget or the budget request for
fiscal year 2001 to pay for this contract.
Why is the initiative, referred to as NMCI, not included in the
fiscal year 2001 Budget request?
Admiral Pilling. All of the Department of the Navy claimants have
traditionally budgeted for their Information Technology (IT) network
and support services in operating accounts and specifically identified
modernization programs which are subsequently reported in their IT
budget extracts. These requirements are based on their unique needs.
NMCI is envisioned as a new approach in contracting for IT services
within the Department of the Navy. It's a firm fixed price,
performance-based services contract. To meet our future strategic
computing and communications capability, IT is a required ``utility''
for our future, bought from the commercial sector just as we buy other
types of utilities (e.g., water, telephone, and electricity). The NMCI
contract has 37 Service Level Agreements (SLA) developed using industry
best practices. Industry will be paid, or penalized, depending on their
ability to satisfy the SLAs at each of our customer's site. By managing
NMCI as an end-to-end capability under a single commercial service
provider, we will be able to provide greater access, interoperability
and security to the communication and data exchange to all of our
Sailors and Marines. The claimants will continue to budget for their
local needs under the NMCI contract. To give the Congress better
insight into where these funds will be coming from to pay the NMCI
bill, we have prepared a 300b-like exhibit and will prepare a 53-like
exhibit for fiscal year 2002 and out.
Mr. Bateman. Does the Navy consider this a major acquisition? Why
or why not?
Admiral Pilling. The Department of the Navy does not consider NMCI
to be a major acquisition. NMCI is a service contract that will provide
IT services much like a utility. The DON and DOD have agreed that a
tailored Oversight Framework is appropriate and signed a memorandum of
agreement (MOA) to this effect on March 8, 2000. The MOA was signed by
the Deputy DOD CIO, Deputy DON CIO, and Deputy Assistant Secretary of
the Navy (C4I). Additionally, in accordance with OMB Circular A-11,
Part III, DOD works with OMB to determine oversight requirements, which
has not yet been accomplished with respect to NMCI.
Mr. Bateman. Does the Navy believe that the NMCI contract must
comply with the Clinger-Cohen Act? If not, why not?
Admiral Pilling. NMCI fully embraces and implements the principles
of the Clinger-Cohen Act (CCA). Under NMCI, we are reengineering the
way we do IT infrastructure planning and execution. Using industry best
practices, we are improving the agency's performance, improving both
our warfighting and warfighting support missions, and making use of
commercial services in our NMCI effort by adopting a seat management
type approach to IT outfitting used by industry. This is consistent
with our DON IT Strategic Planning efforts and with our support of the
DOD Strategic Plan. Also, as part of our NMCI effort, we will be fully
compliant with the Joint Technical Architecture (JTA), our naval
Standards and Architecture plans, and the emerging DOD Global
Information Grid (GIG) efforts. We are taking a common industry
solution based approach built around the Gartner Total Cost of
Ownership model across the Department that will quantify the net
benefits of our approach. We've adopted industry based Service Level
Agreements to measure performance of the NMCI and of the vendor
selected to implement it. We've established a tiered oversight process
of this initiative that includes JCS, USJFCOM, USCINCPAC, DISA, OSD,
and all elements of the Department of Navy.
Mr. Bateman. Has the Navy discussed the budgeting implications of
this initiative with OMB? If not, why not?
Admiral Pilling. Our preliminary discussions with OMB have, to
date, been limited to our approach to Small Business participation. We
are in the process of scheduling NMCI briefings to the OMB senior staff
to discuss all of the other elements of this initiative.
Mr. Bateman. Does the Navy consider the NMCI contract as the
purchase of a capital asset? Why or why not?
Admiral Pilling. The Department of the Navy does not consider this
to be the purchase of a capital asset in accordance with the definition
of capital asset in OMB Circular A-11, Part III. Specifically, the NMCI
concept is that the service provider will own and operate the equipment
and infrastructure to provide IT services, much like a utility. The
contract is a ``services'' contract, not a lease contract.
Mr. Bateman. Does the Navy consider the NMCI contract to be a
capital lease? If not, why not?
Admiral Pilling. No. The Department of the Navy does not consider
the NMCI contract to be a capital lease under the DOD Financial
Management Regulations, Volume 4, Chapter 7, or OMB Circular A-11.
Generally, capital leases are treated as a means to acquire an asset.
The intent of NMCI is to acquire a service, not a capital asset. NMCI
is a multi-year commercial services contract, under which the service
provider will own and operate the equipment and infrastructure similar
to a utility. The DON has no legal interest or title in the property.
Mr. Bateman. Is the Navy fully complying with OMB Circular A-11 for
its NMCI contract? If not, why not?
Admiral Pilling. IT budget reporting requirements are documented in
Part 1, Section 53, ``Information Technology'', and Part , ``Planning,
Budgeting and Acquisition of Capital Assets''. Section 53 provides
guidance for the preparation of Exhibit 53, i.e., IT budget exhibit.
The DON currently reports all IT resources by functional area and major
and non-major IT acquisition program in Exhibit 53 in accordance with
the OSD budget guidance. Contractual vehicles used by IT acquisition
programs to acquire resources are not separately identified, except as
noted below under the discussion of Exhibit 300b. All IT resources
acquired from the NMCI contract will be reported in the future in
Exhibit 53 under the applicable IT acquisition program, as is currently
the case with the resources acquired from the separate, individual
contracts which NMCI will replace.
Part III of OMB Circular A-11 contains guidance for the preparation
of Exhibit 300b. An Exhibit 300b is required for major acquisitions
(paragraph 300.3) only, which for the fiscal year 2001 budget request
OSD and OMB have mutually agreed are the major IT acquisition programs
so designated in OSD (C3I) memo of May 5, 1999 and reported in Exhibit
53 as discussed above. Currently, there are no ``contracts'' designated
as ``major'' for which an Exhibit 300b is required.
However, because of the size of the NMCI effort and its importance
to the Department, we developed and submitted a 300b-like document to
Professional Staff Members from both the HAC and HASC. This action was
completed by the Department of the Navy CIO March 6, 2000.
Mr. Bateman. How many government employees will lose their jobs as
a result of the NMCI contract being awarded?
Admiral Pilling. The Department is currently involved in a
comprehensive evaluation of both the number of civilian jobs that will
be affected by NMCI implementation, and the impact that this change in
jobs will have on our existing civilian workforce.
While the Department of the Navy (DON) does not currently possess
the end-to-end capability that will be provided under NMCI, at the
local level, DON activities do operate IT networks and provide
communication services. In many cases, these local services are
currently provided by the commercial sector. In other cases, these
local functions are performed by military and/or government civilian
personnel. Consequently, while not the intent of NMCI, when DON
transitions to an NMCI contract, network administration and operations,
and communications positions currently performed by in-house personnel
will be displaced.
Information workers are in high demand in both the private and
public sectors. Recruiting and retaining such workers is a continuing
and deepening challenge. Implementation of NMCI will displace some DON
employees who possess highly valued information skills from their
current positions, and we will make a concerted effort to retain these
workers on the Navy Marine Corps team. Civilian employees currently
performing these functions will either have to transition into other
important IT competencies within the Department, such as knowledge
management, legacy systems support, application development, etc., or,
if they want to continue to work in the network operations field, will
have to transition to the private sector.
A clause that addresses a right of first refusal has been included
in the NMCI Request for Proposals (RFP), to allow affected personnel to
be considered for employment with the winning contractor. In addition,
a provision addressing retraining opportunities has been identified as
an option item in the NMCI RFP. Our on-going evaluation will also fully
consider additional options to provide assistance and support to our
valuable employees during this transition process. Our expectation is
that, through our concerted efforts, coupled with both the versatility
of our IT professionals and the shortage of IT expertise nation-wide,
we will be able to minimize the impact on our civilian workforce.
We will keep you informed of our progress, and provide you with the
results of our on-going analysis.
Mr. Bateman. Why is the Navy not conducting a cost comparison under
OMB Circular A-76 for the functions affected by NMCI?
Admiral Pilling. The issue of A-76 applicability was studied in
detail and the Department of the Navy Office of the General Counsel
made a determination that the NMCI encompasses what will become a
recurring Department of the Navy need for services that can be obtained
from a commercial source. Accordingly, the policies and guidance
contained in OMB Circular A-76 and its revised supplemental handbook
are applicable. However, it is the Navy's position that the NMCI may be
acquired without the need to conduct an OMB Circular A-76 cost
comparison because it falls within the exception applicable to ``new
requirements.'' The secure, end-to-end global functional services we
will be procuring under the NMCI contract is not a function currently
performed by Department of the Navy employees or military personnel.
Mr. Bateman. Please identify, specifically, how the Navy will pay
for the NMCI contract this year and in fiscal year 2001.
Admiral Pilling. Every year, the DON CIO submits an Information
Technology (IT) Budget extract to Congress that highlights the
Department's expenditures in IT, across the board. These same funds
will be used by the claimants to procure services from the NMCI
contract.
In fiscal year 2000, approximately $20 million of the Operations
and Maintenance (O&M) monies slated to satisfy our basic IT operations
and service requirements have been identified and put into ready
reserves to support the beginning of the claimant's transition to NMCI
during the last quarter of fiscal year 2000.
Three steps have been taken in our spiral maturity process for
determining our outyear funding for NMCI. The initial reference point
is the Department's $3.46 billion fiscal year 2001 IT Budget
submission. The office of the DON CIO analyzed the claimant's fiscal
year 2001 IT Budget submissions for all programs and support efforts
that appeared to fund any services that would be obviated by NMCI. For
the purpose of this initial evaluation, the DON CIO office erred on the
side of conservatism, excluding many appropriations and all civilian
salaries. This analysis indicates approximately $1.62B of the total
fiscal year 2001 IT Budget could be applicable as the NMCI source of
funding. After completing this analysis, we reviewed the current per
seat cost estimates from the NMCI Business Case Analysis (BCA) that
showed an estimated $1.52B spent by the claimants in these areas. This
data was then compared with known fiscal year 2001 NMCI implementation
plans that reflect our cost projections. Please Note: The projected
FY01 costs of NMCI are the cost for number of seats transitioning to
NMCI in fiscal year 2001. This cost is SOURCE SELECTION SENSITIVE but
was previously provided under protective marking. Please see our
detailed NMCI FY01 Funding Source Review submission dated March 17,
2000.
To ensure the fidelity of the initial answers to the NMCI funding
source review, the Department's Reinvestment in Infrastructure (RII)
Group, a business management review board with senior level
representation from across the claimants, is conducting a detailed,
claimant-by-claimant analysis and bottom up review of their
expenditures and IT budget submissions. Not only are they evaluating
the funding components that made up the $1.62B estimate generated by
the DON CIO, they will evaluate all CIO excluded funding appropriations
and all other cost-of-doing business elements ensuring that all aspects
of funding that might be obviated by NMCI are captured.
To complete the funding source review, the results of the RII
Group's analysis will be compared to the final NMCI contract proposal
costs, after the vendors have completed their due diligence. During due
diligence, the vendors will be visiting Navy and Marine Corps bases and
stations to determine what portions of the Department's existing
infrastructure can be used in their performance solution. Once
determined, the Department will be credited for those investments,
further reducing the NMCI seat costs. This final review will determine
if any additional adjustments might be required in the fiscal year 2001
budget so that they may be addressed with Congress prior to the start
of execution.
Mr. Bateman. Why does the Navy not consider this initiative an
Acquisition Program or Major Automated Information Systems Program as
defined under DOD Regulation 5000.2R?
Admiral Pilling. The Department does not consider NMCI to be either
an Acquisition Program or a Major Automated Information System as
defined by DOD 5000.2-R. NMCI is a contract vehicle for ordering a
prescribed level of performance-based commercial IT services at a fixed
price per seat. These Information Technology services will be
contracted for similar to a ``utility'' and will be funded annually by
the operations and maintenance appropriation. As such, NMCI does not
meet the criteria for designation as an acquisition program.
However, the Department of Defense (DOD) and the Department of the
Navy have agreed that a tailored Oversight Framework is appropriate. We
are jointly implementing the oversight framework agreed to in our March
8, 2000 memorandum of agreement. The PEO (IT) in his concurrent
assignment as the Enterprise Acquisition Manager for Information
Technology (EAMIT) has been assigned responsibility for NMCI.
Mr. Bateman.Does the Department of Defense, including the Office of
the General Counsel, fully agree with the Navy's plans for NMCI and
specifically to the above questions?
Admiral Pilling. The former Deputy Secretary of Defense
(DEPSECDEF), current acting DEPSECDEF, Department of Defense Chief
Information Officer (ASD C3I) and immediate staff, Office of the
Secretary of Defense (Program Assessment and Evaluation), Joint Chiefs
of Staff J6, Joint Forces Command J6, Pacific Command J6, and numerous
OSD personnel have been briefed on our NMCI efforts. We requested and
obtained both ASD C3I and DEPSECDEF's approval to release our RFP to
industry. The Joint and operational staff mentioned above are part of
our contract and technical oversight teams.
In a recent letter to the General Accounting Office, the DOD CIO,
Mr. Arthur Money, was quoted as saying, ``My office fully supports the
goals of the NMCI acquisition. It will establish an enterprise-wide
capability within the Navy providing its service members and employees
end-to-end, secure and assured access to a full range of voice, video
and data services. The NMCI will expand operating capability of naval
forces by eliminating interoperability problems and other impediments
to productivity and speed of command, while at the same time reducing
the security risks and overall costs. As it becomes fully interoperable
and secure, it is positioned to serve as a major component of the
Global Information Grid (GIG).''
As for specific review or agreement of the OSD staff to the answers
to your questions, the OSD C3I staff helped jointly prepare all of the
oversight guidance on NMCI and its designation as a Special Interest
Initiative. They have not reviewed or commented on the Department of
Navy's positions with regard to applicability and interpretation of
various provisions of A-76 or A-11. Likewise, while aware of the
strategic elements of our approach toward financing and personnel
management, OSD has not specifically endorsed them.
The DON Office of General Counsel previously discussed with the DOD
Office of General Counsel DON's position on applicability of A-76 and
other related statutes. Additionally, discussions are being initiated
on the Department's other responses as discussed above. We will keep
you advised of their progress.
Flying Hour Funding Affect on Readiness
Mr. Bateman. Explain movement of funds intended for the Air Force's
flying hour program from fiscal years 1995 through 1998 and what
affect, if any, this has had on readiness. Is movement of funds from
the Air Force's flying hour program continuing for fiscal years 1999
and 2000?
General Lyles. Between FY95 and FY97, the movement of funds from
the Air Force flying hour program was negligible, averaging less than
.4% of the budgeted funding. In FY98, execution of flying training
programs was impacted by declining mission capable rates and high
opstempo due to contingency operations. Contingency deployments
precluded full execution of home-station training sorties and, as a
result, the Air Force did not fly the hours as originally programmed.
Consequently, unobligated flying hour funds were used to relieve
chronic high priority readiness shortfalls, as reported in GAO's 8 July
1999 report: Defense Budget: Observations on the Air Force Flying-Hour
Program. In FY99, we experienced a similar outcome due to increased
commitments in Operations Desert Fox and Allied Force. However, for
FY00 we are currently on course to execute our flying hour funding as
programmed. Many years of high operations tempo, coupled with aging
equipment, the lack of spare parts and engines have impacted our near-
term readiness. The Air Force has experienced a decline in mission
capable rates of approximately 9.9% since FY94. Additionally, low
retention of maintenance personnel has caused a corresponding increase
in non-mission capable for maintenance (NMCM) rates. The Air Force is
addressing these issues through increased funding for spare parts and
numerous retention and recruiting initiatives.
Funding for Primary Combat Forces
Mr. Bateman. Will the Air Force highlight the funding for primary
combat forces and explain to what extent movement of funds has taken
place in this subactivity, particularly in fiscal years 1994 to 1996?
General Lyles. According to the GAO's report, Defense Budget: DOD
Should Further Improve Visibility and Accountability of O&M Fund
Movements (GAO/NSIAD-00-18, Feb. 9, 2000), the Air Force moved the
following funds from the Primary Combat Forces subactivity in fiscal
years 1994 through 1996.
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Constant 1999 dollars in millions
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Fiscal Year Difference between Congressionally designated and obligated Amounts Percent Change
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1994............................................................................................................................................................ 71.7 2.5
1995............................................................................................................................................................ 148.3 4.8
1996............................................................................................................................................................ 217.2 7.9
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
The GAO report addresses Congressionally designated funds which it
defines as the budget request plus or minus any allocated changes made
by the Congress.
In an effort to provide field commanders maximum flexibility to
respond to changing mission requirements, the Air Force does not
generally limit the movement of funds between subactivity groups unless
specifically required to by law. However, limitations are placed on the
high priority readiness activities, and the Air Force does report
funding adjustments in these activities in the annual ``End of Year''
report. The movement of funds reflects the ever-changing situations
faced by our field commanders and, given the substantial lead-time (~2
years) between initial programming and actual execution, these
variances are not surprising.
Funding Source for Real Property
Mr. Bateman. The Air Force reported that it moved $155 million into
its operating forces real property maintenance subactivity but did not
indicate where the funds came from in the fiscal year 1998 high-
priority readiness-related transfer report. The Air Force did state,
however, the funds were needed for repairs to runways, maintenance
hangers, utility systems, roofs and other real property assets.
What was the funding source for the $155 million used for real
property maintenance in fiscal year 1998? Depending on the subactivity
that was the source for this funding, how was effected-subactivity
impacted?
General Lyles. Funding was sourced by field commanders from various
accounts which would suffer the least impact. Specific reporting
systems do not track the specific movement of funds.
Mission Capability Rates
Mr. Bateman. What are your current mission capable rates and what
has been the impact of the last few years decline in these rates?
General Lyles. The current mission capable (MC) rate for total Air
Force (Active, Reserve & Guard) is 74.2% for April 2000. This is a 2.8%
increase from the previous month. Active Air Force MC rate is 77.4% and
the Reserve Component MC rate is 69.7% (both as of April 2000).
[GRAPHIC] [TIFF OMITTED] T4887.070
MC rates for fighter aircraft as a group have increased over the
past 12 months, rising from 74.9% in May 1999 to 77% in April 2000. (A-
l0, F-l5, F-l5E, F-l6, and F-ll7)
Bombers MC rates (B-1 and B-52 combined) have varied over the past
12 months, from a low of 61.4% in Sep. 1999 to a high of 70.6% in the
month of Oct. 1999; the April 2000 rate is 64.8%. The monthly rates
have been slightly higher but fairly consistent with the previous
fiscal year.
Strategic airlifters overall MC rates have decreased over the past
12 months, from 73.7% in May 1999 to 68.4% in April 2000. (C-5, C-17,
and C-141)
Other aircraft, particularly the KC-135, have diminished the
overall AF MC rate. The KC-135 has suffered significant problems with
the stab-trim actuator which grounded much of the fleet during the past
six months, but this situation improved in April 2000.
The annualized MC rate for Total AF is 72.4%. This is a 1.1%
decrease from the FY99 rate of 73.5%. The annual MC rate for the Active
AF is higher at 75.8%; the Reserve Component falls below Total AF with
an MC rate of 67.2%.
IMPACT: Decreased MC rates have driven down sortie generation
capabilities, which in turn, have negatively impacted the ability of
combat forces to maintain their required level of training. It should
be noted that improvements in monthly MC metrics through April provide
leading indication on annual rates. If that trend continues, the annual
rates should begin showing the improvement later this year.
Note: FY00 annual numbers are Oct. 1999 through April 2000. Aggregate
AF figures are based on the following aircraft: A-10, F-15, F-15E, F-
16, F-4 (through FY98), F-111 (through FY97), B-1, B-52, C-5, C-17, C-
141, E-3, C-130, and KC-135.
[GRAPHIC] [TIFF OMITTED] T4887.071
Decline in Aircraft Mission Capable Rates
Mr. Bateman. Is the steady and substantial decline in aircraft
mission capable rates reason for concern? Specifically, are current
mission capable rates for any of your key aircraft, such as the C-5,
lower than the rates that you need to have to meet the demands of your
most demanding contingency missions?
General Lyles. The Air Force needs to maintain a strong global
readiness and warfighting capability to support our national military
strategy. The nature of rapidly responsive aerospace power requires
high levels of readiness. Therefore, our steady and substantial decline
in aircraft mission capable rates is reason for concern.
While the overall strategic fleet has shown a decline in mission
capable rate, the C-5 is of greatest concern. The importance of our C-5
fleet was highlighted during Kosovo operations. Although the C-5s flew
only 34% of our overall intertheater missions, they were critical in
moving over 50% of the outsize equipment along the deployment phase
from CONUS to Europe. According to the Chairman of the Joint Chiefs of
Staff (CJCS), Allied Force was ``the most precise and lowest-
collateral-damage air campaign in history-with no U.S. or allied combat
casualties in 78 days of around-the-clock operations and over 38,000
combat sorties.'' A portion of that success belongs to the C-5's
responsive movement of precision munitions from CONUS into the AOR.
The C-5's readiness remains a significant concern. The C-5, which
is important to every peacetime deployment we undertake today, is even
more critical in an MTW scenario where we are required to move
significantly more unit equipment from CONUS. Based on the Mobility
Requirements Study-Bottom-Up Review Update (MRS-BURU), the C-5 Galaxy
fleet is expected to achieve a 75% MC rate in order to meet warfighting
CINC requirements. Today, the C-5 maintains an MC rate of approximately
61%. Substandard MC rates put wartime scenarios at risk. Moreover, a
substandard MC rate means fewer tails in peacetime to support on-going
daily ops, humanitarian relief efforts, Presidential support missions,
and contingency operations.
The Air Force is putting together a C-5 modernization program that
will work to raise C-5's reliability but even if we succeed, based on
the time required to complete RDT&E and subsequent modifications, we
will not see MC rates rise significantly until 2005, and assuming full
funding for these programs, we will not reach the 75% MC rate until
approximately 2014. Air Mobility Command is examining its current and
forecasted combat power projection shortfalls, using the Mobility
Requirements Study 2005 (MRS-05) scenarios, in its ``Oversize and
Outsize Analysis of Alternatives.'' We are hopeful that the
recommendations from that analysis will suggest an operationally
effective, best-value force mix of C-5 and C-17 aircraft solution to
meet today's and tomorrow's Oversize/Outsize requirements.
[GRAPHIC] [TIFF OMITTED] T4887.072
Unacceptable Aircraft Mission Capability Rates
Mr. Bateman. Which aircraft have potential problems in maintaining
acceptable mission capable rates, and what are the required and actual
mission capable rates of each?
General Lyles. Several airframes as outlined below are experiencing
difficulties in achieving and maintaining acceptable mission capable
rates. This is due to a combination of supply and maintenance issues,
such as lack of skilled maintenance technicians, retention problems,
prior years underfunding, effects of aging aircraft, OPTEMPO, and
technical surprises.
------------------------------------------------------------------------
ACTUAL
AIRCRAFT LEAD MAJCOM MC
GOAL RATE
------------------------------------------------------------------------
B-1............................................ 67% 54.8%
C-5............................................ 75% 58.6%
E-3............................................ 85% 73.4%
KC-135......................................... 85% 66.8%
------------------------------------------------------------------------
Actions to Improve Mission Capable Rates
Mr. Bateman. What action is being taken to improve the mission
capable rates of these aircraft?
General Lyles. The Air Force has implemented several actions to
improve mission capable rates. In particular, we have focused on
improving spare parts support to the warfighter through improved
funding, expedited parts deliveries, partnership with Defense Logistics
Agency (DLA) to improve support and funding for low demand--high cost
aviation assets, and stabilization in the depot transition. Also, we
are improving the supply processes and incorporating those into the
logistics transformation plans.
In FY99, DOD added $904M in cost authority to support increased
sales and to purchase or repair spare parts. The objective was to
restock the shelves with critical spares and reconstitute the fleet
from Kosovo operations. In addition, with the help of Congress in the
FY00 PB, Air Force was able to fully fund the increased consumption of
primary operating stock . . . . spares to support the peacetime flying
hour program. In the case of engine components, typically the most
expensive and hardest to support spares, the Air Force Materiel Command
has implemented innovative contracting methodologies. The General
Electric Engine Corporate Contract (for example) reduces the
acquisition lead-time for its fighter engine components from 400+ days
to 90-150 days. Also, Logistics Transformation efforts are underway to
improve internal processes by increasing accountability/responsibility
for Supply Chain Managers, reducing customer wait time, enhancing total
asset visibility, and improving metrics to track execution.
Anecdotal evidence indicates spares support to the field is
generally improving. Backorders for reparable spare parts have been
reduced 54% from December 1998 to April 2000. The latest monthly (April
2000) Total Not Mission Capable for Supply rate for fighter aircraft is
11.8%, the best seen in 23 months. The Air Force remains cautiously
optimistic that overall MC rates will continue to improve.
Funding Contributing to Low Mission Capability Rates
Mr. Bateman. Was insufficient funding a contributing cause of these
lower-than-required mission capable rates and, if so, what requirements
were not funded and what caused the funding shortfall?
General Lyles. Yes, insufficient funding was a contributing factor
to the decline in mission capable rates. Spare parts shortages arose
from funding problems in the 1990s, and are a major contributor to the
Air Force's readiness decline over the past several years. Downsizing
of the Air Force spare parts inventory went too far. Supply systems
were pushed to the limits as Air Force units deployed more often. As a
result the non-mission capable rate attributed directly to supply
shortfalls increased from 8.6% in FY91 to 14% in FY99.
In FY99-01, Congress, DOD, and Air Force took specific actions to
address shortfalls in spare parts funding. This combination of support
fully funded the validated peacetime spare parts requirement. However,
after working through Kosovo lessons learned and completing a thorough
review of the levels required in the Readiness Spares Package (RSP)
kits, there is an FY01 shortfall of $75M, which is included on the Air
Force UPL.
Aircrews not Getting the Right Flying Hours
Mr. Bateman. The subcommittee understands that many of the aircrew
members deployed for contingency operations are getting a lot of flying
hours, but not necessarily the right flying hours.
Is this still the case, or if not, what has been done to correct
this situation?
General Lyles. Home station flying is made up of almost 100 percent
training. On the other hand, flying in support of contingencies is
defined by the contingency air tasking order. Its requirements are by
nature often narrow in scope, repetitive, and offer little opportunity
to train to the full spectrum of normal requirements. The result is
that sometimes aircrews can find themselves needing to accomplish
certain training events even though they have flown as many or more
hours than they would have during the same time at home station. Most
aircraft training events must be accomplished every 45 to 90 days. Many
of these are generic and can be completed while flying in support of
the contingency. Sometimes, however, all training cannot be
accomplished. To relieve this situation, the Air Force has implemented
several initiatives. First and foremost, the implementation of the Air
Expeditionary Force concept provides stability and predictability
necessary to accomplish training and most operational requirements.
This concept provides for aircrew training throughout its 15-month
cycle ensuring that they are trained to meet operational needs during
its 90-day rotation. A spin up period immediately prior to deployment
provides the opportunity to ``front-load'' training. A reconstitution
period following redeployment provides the opportunity to restore all
unit mission areas. Second, at Operation NORTHERN and SOUTHERN WATCH up
to 5 days a month are dedicated to training. Last, in light of the Air
Expeditionary Force, Air Combat Command is re-examining aircrew
training requirements with the intent of aligning training with the AEF
schedule. This initiative is still being developed but promises to
provide insight into better ways of keeping aircrew training on track
during contingencies.
Mr. Bateman. How concerned are you with this shortfall in depot
maintenance funding and will this impact on your ability to meet your
mission requirements and/or future contingency operations?
General Dake. The depot maintenance backlog is currently at a
manageable level and poses no serious threat to near term readiness.
However, a continued rise in backlog will ultimately degrade readiness
as Operating Force Commanders are forced to apply scarce O&M funding
towards maintenance of equipment that cannot be inducted to the Depot
for repair. Funding the depot maintenance shortfall is a proactive
measure which will reduce depot maintenance backlog to a more
acceptable level while allowing Operating Force Commanders the ability
to use their resources according to their financial plan.
Readiness Funding
Mr. Bateman. From your point of view, what readiness critical
requirements are unfunded or underfunded in the fiscal year 2001 budget
requests? What are the near-term and long-term readiness impacts of
this underfunding?
General Keane. We are nearly $1 billion dollars underfunded in
readiness requirements for fiscal year 2001. Our most pressing
underfunded requirements include duty military occupational specialty
qualification and leader development for the Reserve Component, some
Title XI program costs, test and evaluation, training devices and range
modernization, installation information infrastructure modernization,
sustainment systems technical support, and real property maintenance.
These programs have been funded only to essential levels to reduce risk
to a tolerable degree.
In the near-term, we will continue to lag behind in duty military
occupational special qualification, thus creating a wider gap to cross
in funding to attain our required level of service-wide skills
qualification. Testing constraints will delay new equipment fielding.
Our infrastructure will continue to erode and lack essential
connectivity to support training and deployments, and our maintenance
of critical combat systems will be less efficient. Each of these
individual effects will degrade our current operational readiness. In
the long-term, attaining necessary levels of warfighting capability by
the timeframes envisioned by our National Military Strategy will be
placed at greater risk as individual modernization programs (hardware
and equipment) are delayed due to lack of funding.
Admiral Pilling. The Navy's highest priorities as reflected in the
Chief of Naval Operations' Unfunded Requirements List of 9 February
2000 are in the areas of personnel and readiness. These personnel and
readiness priorities are as follows:
1. Personnel End Strength and Recruiting Incentives
77.0M
2. Readiness Aircraft Procurement, Navy APN-6 Spares
174.0M
3. Readiness Fast Combat Support Ship AOE Depot Maintenance
40.0M
4. Readiness Ship Depot Maintenance
142.3M
5. Readiness Real Property Maintenance
136.6M
6. Personnel Career Sea Pay
118.7M
7. Readiness Amphibious Assault Ship LHA Midlife
32.0M
8. Readiness Training Ordnance
26.0M
9. Readiness Laser Guided Bombs and Bomb Kits
20.0M
Any funding that can be appropriated to address these unfunded
areas would be of great benefit to Navy preparedness.
We are meeting our near-term obligations but not funding these
priorities will place the Navy's long-term readiness at risk and
continue to make it increasingly difficult to prepare our deploying
battle groups for deployment. Battle groups that are not deployed or
preparing for deployment are in C-3 or C-4 status and current
underfunding in these critical readiness areas makes it increasingly
difficult to move them through the Inter-Deployment Training Cycle to a
C-2 and ultimately C-1 readiness status.
General Lyles. The increased costs of maintaining our aging
aircraft fleet has forced the Air Force to allocate an additional $300
million into Depot Level Reparables (DLRs) in FY01. These funds would
otherwise have been used for base support and real property maintenance
requirements. Both of these programs directly support quality of life
and our worldwide mission and were already fiscally constrained. In
addition to shortfalls due to aging weapons systems, base support
requirements ($145 million) and Real Property Maintenance ($278 million
for mission critical projects) are further stressing our O&M budget.
Furthermore, during development of the FY01 Budget, the Air Force has
identified 24 programs totaling over $2.8 billion in critical unfunded
requirements in the categories of Readiness, People, Infrastructure,
and Modernization. Each contributes to near-term or long-term readiness
of the Air Force. In addition to DLR costs, our top readiness
shortfalls are engine repair production ($75 million), readiness spares
packages (RSPs) ($62 million), and training munitions ($79 million).
Infrastructure requirements include $1.1 billion for MilCon and $650
million for Military Family Housing. Finally, modernization
requirements total over $400 million for KC-135 re-engining, C-32
communications upgrades and the EELV.
General Dake. As our Commandant, General Jones, has testified, his
focus is on the support of the Operating Forces and, specifically, the
primacy of the Marine Air-Ground Task Force (MAGTF). The readiness of
the MAGTF rests on four pillars: (1) our Marines and their families,
(2) our legacy systems, (3) our infrastructure, and (4) our
modernization effort. These pillars must remain strong in their own
right and in the correct proportion so that the structure of readiness
remains solid now and in the future. Thus, our challenge is to maintain
the individual strength of each pillar, while achieving a proper
balance in our application of resources amongst the pillars. Because of
the need to balance readiness, we were unable to fully fund all of our
requirements.
As General Jones discussed in his 9 February letters to the
Chairman and Ranking Minority Member of the Committee, the Marine
Corps' most critical Fiscal Year 2001 shortfall total approximately
$1.5 billion. These shortfalls are spread across our four readiness
pillars. They include recruiting and retention initiatives, family
housing, barracks and other quality of life projects in support of our
Marines and their families. Critical support for our legacy systems
through depot maintenance, corrosion control, and Operating Forces is
also included. Bridging modernization through updating our existing
ground and aviation platforms continues to be stressed. Concerning our
aging infrastructure, accelerating both family housing and military
construction projects, and devoting more resources to maintenance of
real property is highlighted. Finally, increasing the pace of
modernization for both our ground and aviation equipment is identified
for additional funding.
We have and will continue to maintain our near-term readiness--
mainly through the efforts of our young Marines. But hard work is
becoming overwork as our major ground and aviation weapon systems are
facing block obsolescence. The key to the health of Marine Corps
readiness is the modernization of our equipment and infrastructure.
During the 1990's, in order to maintain near-term readiness, we had to
forgo much of our planned modernization. Because of this, many of our
ground and aviation weapon systems now face block obsolescence.
Adequate infrastructure and modernization has become a near-term
readiness issue. These modernization and infrastructure shortfalls are
reflected in our unfunded priority list. Over $1.0 billion of the $1.5
billion total unfunded priorities is Research and Development or
Procurement funds to upgrade/extend the life of or replace our legacy
systems. An additional $0.3 billion is infrastructure support--Family
Housing, Military Construction and Real Property Maintenance.
Contingency Operations Readiness Impact
Mr. Bateman. The deployment of personnel in support of contingency
operations (CONOPS) has increased over the last few years. This
increased pace of operations has fallen most heavily on small number of
critical units with unique specialties, including special forces,
electronic warfare, and military police. What other types of forces
have been heavily effected by CONOPS?
General Keane. An analysis of Army units indicates that our air
defense artillery, armor, and military intelligence units have also
been affected by CONOPS. The effect of CONOPS on particular types of
Army units is a function of the number of forces available to respond
to requirements. Units with relatively small numbers in the force
structure are subject to greater involvement in support of CONOPS.
Whereas unit types with larger force structure may have the ability to
more evenly distribute deployments over a larger structure. For
example, our Patriot units have recently experienced an increase in
deployment to provide support for CONOPS. The Army has taken steps to
reduce impacts to these units including sourcing of the Kosovo and
Bosnia missions under a single corps to improve deployment
predictability and enhanced readiness.
Pace of Operations
Admiral Pilling. While EA-6B's supporting the electronic warfare
mission cited above, are the platform within the Navy that has been
impacted the most by contingencies in recent years, SAND DECK and EP-3
aircraft are also small communities that have been heavily tasked
during contingency operations.
General Lyles. In general, all our units are suffering from the
effects of the high TEMPO and subsequent downturn in readiness as a
result of our participation in worldwide contingencies over the years.
Those units and career fields that were heavily engaged in Kosovo
operations this past year were particularly hard hit.
There are, however, certain career fields and units that have been
tasked more heavily than others. This is true not only for active duty
units but also some reserve component assets. These include our ``Low
Density/High Demand'' (LD/HD) systems such as our command and control
assets; our intelligence, surveillance, and reconnaissance assets; and
our special operations and rescue assets. Other systems such as
airlifters, tankers, and some specialized fighters have also seen heavy
taskings.
The personnel associated with these systems historically have been
experiencing TEMPO in excess of the Air Force target maximum of 120
days deployed in a 365 day period. These skills include linguists,
intelligence specialists, airborne warning and control personnel,
combat controllers, and para-rescue personnel as well as load masters,
specialized maintenance career fields, and flight engineers. Security
forces personnel, special tactics teams, civil engineers, and
communications specialists have also had a history of high deployment
rates. Currently, in-flight refueling technicians, services personnel,
fire protection specialists, vehicle operators/maintainers, fuels, and
munitions personnel round out the top skill levels reported as having
high TEMPO.
General Dake. Marine Corps readiness has not been significantly
impacted by long-term or prolonged contingency operations. In the past,
our normal forward-deployed forces have met most contingency
requirements, and in terms of unit deployments, the scope of our
deployments have not gone much beyond our normal deployment level. The
Marine Corps averages 23,000 Marines forward deployed at any given
time, and with the exception of a few specialized personnel or high-
demand low-density assets, it has been these Marines that have been
used routinely to respond to contingencies through out the world. The
predictability built into our unit deployments has been essential to
reducing the stress associated with higher operational tempo. Achieving
predictability while complying with National Military Strategy and the
Department of State's Forward Presence Agreements is accomplished
through the execution of our time tested rotational deployment cycles
and our participation in the SECDEF directed Naval Force Presence
Policy.
Readiness of Affected Forces
Mr. Bateman. How has the readiness of these forces been impacted
over the last few years?
General Keane. The overall impact of extended deployments on the
readiness of these units has decreased. This is due in part to our
ability to maintain training proficiency while deployed. As deployment
locations mature, units are provided training opportunities to sustain
warfighting skills.
Reducing contingency operations (CONOPS) deployment time reduces
degradation of warfighting skills. For combat units, readiness reports
indicate a degradation of warfighting skills as they train for and
focus on peacekeeping missions, conduct the mission, and redeploy.
While in a deployed status, units are frequently not afforded adequate
range and training facilities to conduct collective training on
warfighting skills. For example, armor and infantry units do not have
available facilities or time to sustain and conduct crew gunnery
qualifications and unit level maneuvers when deployed in support of
CONOPS. Only upon redeployment can these units execute training plans
on collective warfighting tasks. This trend is not as severe for combat
support and combat service support units because portions of their
wartime tasks may be conducted under the conditions of the CONOPS
mission. Because extended CONOPS require a rotation of units, up to
three units may be involved in the various stages of preparation,
execution of the mission, and retraining of warfighting skills. As
such, the CONOPS impacts on readiness have an affect on up to three
units.
Admiral Pilling. The mission readiness of these units was basically
unaffected by the surge in operating tempo caused by contingency
operations. There were some parts issues caused by the increase over
planned flying hours. If surge operations had continued there would
have likely been impacts to training readiness.
General Lyles. Unpredictability and duration of TEMPO demands have
led to declining retention across the force, but most severely in mid-
career pilots and sergeants with special skills. These increased
peacetime deployments negatively impact wartime training and
participation in exercises. Quality of life issues emerge as stay-at-
home and deploying forces struggle to cope under strain of increased
TEMPO. We are hopeful the Expeditionary Aerospace Force (EAF) concept
will structure the Air Force to respond to increased peacetime demands
of our National Military Strategy and enhance our ability to maintain
wartime readiness for both the near- and long-term.
General Dake. The readiness of our forward-deployed forces has not
been significantly impacted by long-term or prolonged contingency
operations. Most contingency requirements have been responded to by our
normal forward-deployed forces or by rescheduling normal deployments to
a newly required location. The Marine Corps averages 23,000 Marines
forward deployed at any given time and these Marines are used routinely
to respond to contingencies throughout the world. Prolonged
contingencies, such as Somalia, and peacekeeping endeavors have
provided unique training opportunities to Marine Corps forces but come
at the expense of increased operating costs and wear and tear on our
legacy equipment.
Deployment Impact on Personnel Readiness
Mr. Bateman. The deployment of personnel in support of contingency
operations has increased over the last few years. This increased pace
of operations has fallen most heavily on a small number of critical
units with unique specialties, including special forces, electronic
warfare, and military police.
Would you please identify key indicators that would provide the
best measures of deployments' impact on personnel readiness?
General Keane. There are several indicators the Army uses to
evaluate deployment impact on personnel readiness. These indicators
include the number of training days a unit requires after a deployment
to achieve combat readiness, the skill tempo by military occupational
specialty (MOS), and the deployment tempo of high-demand/low-density
units. Additionally, a semi-annual survey of military personnel
provides anecdotal information on the impact of deployments on
soldiers. The results of analyses conducted on the affects of
deployment on retention provide only general conclusions. However,
studies show some level of deployment is acceptable. It increases
morale, unit cohesion, MOS competency, and job satisfaction, all of
which improve personnel readiness. However, when the length and
frequency of deployments increase, it negatively affects the Army's
ability to retain soldiers and man the force and, therefore, negatively
affects readiness.
Admiral Pilling. SORTS, PERSTEMPO, and Retention rates are
indicators that would identify the impact that contingencies have upon
involved units.
General Lyles. People continue to be our most vital resource--they
are the most critical component of readiness. The intense demands we
place on them as the perform the Air Force missions around the world
require highly motivated, highly skilled, professional airmen. However,
we are performing more missions with fewer people. Indeed, today's
active duty force is smaller than at any other time in Air Force
history.
Recruiting and retention of our force are key indicators in the
readiness equation. The negative retention trend exacerbates the high
operations TEMPO problem because it places greater burden on those who
continue to serve. Quality of life issues emerge as stay-at-home and
deploying forces struggle to cope under strain of increased TEMPO.
The EAF concept helps ensure that the nation has trained aerospace
forces, as well as providing our people relief from the high TEMPO in a
turbulent world.
General Dake. The key indicator's that best measure contingency
deployments' impact on personnel readiness would be the unit
commander's assessment rating of his personnel readiness as reported in
the Status of Resources and Training System (SORTS) and the unit's
personnel retention rate. Marine Corps forward-deployed forces maintain
a high personnel readiness rating and traditionally these units have
high retention rates.
Pace of Operations
Mr. Bateman. What are the advantages and disadvantages of changing
the force structure to increase the number of critical units with
unique capabilities, assuming no increase in total force structure?
General Keane. The Army uses the Total Army Analysis (TAA) process
to optimize the force structure to meet its requirements. Since the end
of the Cold War, these requirements have changed and, in some cases,
placed increased demands on certain units with unique capabilities. As
we resource the force structure in preparation to fight two nearly-
simultaneous major theater wars (MTW), we consider the requirements for
these unique units in smaller scale contingencies (SSC) and engagement
operations. We have used the discipline of the TAA process and its
associated force feasibility review to analyze the impacts of
activating, converting, and inactivating units and to prioritize those
force structure changes to ensure we properly execute our core mission
of winning the Nation's wars. Increasing the number of unique units is
an advantage to enabling execution of our engagement and SSC missions,
but we must assess the risk of our ability to execute the MTWs if the
increase to these unique units is made at the expense of our
warfighting units. As we progress through the Army's Transformation, we
will continue to optimize our force structure to maintain the Army's
ability to operate across the full spectrum of requirements.
Admiral Pilling. The challenge is to respond to the dynamic
strategic environment facing our Navy within the framework of a
constrained budget. The fact that we have a shortage of critical units
with unique capabilities today is one indication that the QDR 1997
battle force may not be enough in the future. Fewer ships, aircraft,
and personnel are available today to accomplish the same naval
missions, coincident with a marked increase in crisis response and
contingency requirements--there is no elasticity left in the fleet.
However, undue shifting of resources to react to today's problems
mortgages the future and is not the answer; we must merge both. Our
resource investments must be linked to the strategic organizing
principles derived from the Navy's vision of the future. Fundamentally,
the solution lies in matching our investments for the future--
modernization and recapitalization--to the pace of emerging threats so
that readiness is not sacrificed. Resource allocation must be driven by
strategic vision if we are to build the right Navy for today, and
tomorrow, while staying under the top line.
General Lyles. Assuming no increases in force structure, any
changes to force structure would be to the detriment of other programs.
It does not make sense to decrease other programs to gain these
advantages.
General Dake. The size and composition of the Marine Corps' force
structure is based on the 2 MTW requirement. Without an increase in
force structure, increasing the number of units of a given type will
result in the reduction in the number of units of another type required
to meet the 2 MTW requirement. While affording increased capability in
one area, increasing the number of unique units without an increase in
force structure simultaneously increases risk in another area.
Funding For Training Centers
Mr. Bateman. It is the Subcommittee's understanding that the budget
information contained in these reports (budget year, current year, and
prior year) is available when the President submits the budget request
in early February, yet the committee continually receives O&M
justification material by late February/March timeframe. We are
encouraged to learn that, for the first time, all the services will be
providing these materials on the Internet. Thus, it is expected the
information will be available earlier because printing delays will no
longer be a consideration. Yet it is the end of February and none of
the services have their justification material available on the
Internet. Given that O&Mthe largest appropriation groupin the Defense
budget, what efforts are underway that would allow for details in
justifying this request to be available earlier?
General Keane. The current budgeting schedule and milestones within
the planning, programming, budgeting, and execution system do not allow
for earlier submission of budget justification materials. To facilitate
access to budget justification material, the Department of Defense
requires all unclassified budget justification material be posted on an
access-controlled Internet web site by all submitting organizations.
This allows wider access to the justification material by interested
parties on Capitol Hill.
Admiral Pilling. The Navy has ongoing efforts to streamline and
automate the information provided as justification of our O&M budget
estimates. This has shortened our response time somewhat in the past
year, and promises to produce even more time savings in the future,
allowing us to send justification material to OSD and OMB more quickly
after their budget decisions are finalized.
General Lyles. The Air Force provides O&M budget justification as
required by OSD and OMB. These materials are required within 30 days of
submission of the President's Budget and we will make every effort to
meet or exceed this requirement.
General Dake. We are not aware of any efforts to provide O&M
justification earlier. As a small portion of the overall Department of
Navy budget, we strive to meet the deadlines set by the Secretary of
the Navy to support the official submission of justification materials.
Once the President's Budget is made available to the Congress, we
quickly engage with the Congressional Staff regarding the details of
the O&MMC budget.
Funding for Major Exercises
Mr. Bateman. To what extent are you fully funded for major
exercises, and for the advanced combat unit training levels you desire?
General Keane. Combat training center rotations are the biggest
exercises our units conduct. The National Training Center, the Joint
Readiness Training Center, and the Combined Arms Maneuver Training
Center are the crown jewels of Army collective training. In fiscal year
2001, the training centers' operations are fully funded to conduct
scheduled training rotations. Because of competing requirements, the
Army has taken risk with the recapitalization and modernization of the
combat training centers (CTCs) that support these exercises. The
opposing forces (OPFOR) tracked vehicle fleet of M551 and M60A3 tanks
and M113 armored personnel carriers continues to age, requiring
extensive maintenance costs as these systems quickly approach the end
of the useful lives. The instrumentation systems, built 20 years ago
with 1970's technology, are losing feedback capability and will not
support digital equipment. To continue to garner the maximum training
benefit from the centers, and keep them relevant to current and future
operational environments, we must modernize the training centers'
prepositioned fleets, OPFOR fleets, and instrumentation systems to
provide maximum training benefit for, and feedback to, the rotational
units.
Admiral Pilling. Today, Navy's readiness is adequate to meet all
operational commitments. On any given day, approximately 35% of our
forces are deployed around the world and ready for combat if necessary.
The remainder is at home in various stages of readiness as they prepare
for their next deployment. The Navy trains for a deployed combat ready
presence and completes all required training as part of the Inter-
Deployment Training Cycle. The uncertain future of the availability of
the Vieques training range continues to pose a significant challenge to
our Carrier Battle Groups as they try to find a means to establish
combat proficiencies prior to deployment.
General Lyles. The FY01 President's Budget fully funds the Air
Force requirement for major exercises and advanced combat unit
training, with the following exceptions.
As identified on the FY01 Air Force Unfunded Priority List (UPL),
there is a shortfall of $125M in FY01 for training munitions. These
munitions are critical to train aircrews to 100% of combat ready
requirements. Without this, degraded readiness levels could be
experienced, or WRM munitions might be expended for this training.
Although not on the Air Force FY01 UPL, there is also a shortfall
in the JCS Exercises program. The FY01 President's Budget requested
$37.1M. This supports only 60% to 70% of Theater CINC requirements. The
Appropriation committee marks reduced the $37.1M by $12.2M to $24.9M.
This supports only 40% to 50% of the Theater CINC requirements.
General Dake. The Marine Corps has four major training and exercise
programs. These programs are Combined Arms Exercises (CAXs) at
Twentynine Palms, Ca; Mountain Warfare Training Center (MWTC) courses
at Bridgeport, Ca; Weapons and Tactics Instructor (WTI) courses at
Yuma, Az; and our Marine Expeditionary Unit (Special Operations
Capable) (MEU(SOC)) pre-deployment workups on the east and west coasts
and in Okinawa, Japan. These four programs are essential for us to
provide trained and ready Marine units. As Service priorities, these
programs are fully funded.
Preparation and Conduct of Major Exercises
Mr. Bateman. To what extent have reductions in training ordnance
and declines in mission capable rates affected the preparation for and
conduct of these exercises?
General Keane. Exercises tend not to be impacted by either of these
items as commanders focus available resources on those units preparing
for and executing the exercises. Approximately 65 percent of the annual
Army ammunition budget funds training ammunition to meet historic
execution levels. We have been very successful meeting our C-1
readiness goals with this level of training ammunition support, but the
Army Vision anticipates increased ammunition requirements with
increased training costs. Despite shortages of funding, mission capable
rates have not substantially impacted exercise training or execution.
Admiral Pilling. Navy's deployed readiness remains satisfactory,
but because of our cyclical readiness posture, we expect non-deployed
readiness to be at a lower level. The Navy has leveled the steady
downward trend in readiness, after reaching a high in the 80s. The
enhancements provided in the fiscal year 2000 budget address some of
our most pressing needs. With the help of Congress, we have applied
considerable resources to ameliorating the problem, but it will take
time for the positive effects to be reflected throughout the Fleet and
operating forces.
General Lyles. There have been no major impacts to preparation for
and conduct of exercises due to training ordnance reductions or
declining mission capable rates. The impact of ordnance shortages on
preparation for and conduct of exercises is mitigated because of the
priority commands tend to place on major exercises vice day-to-day
training. Additionally, the Air Force strategy is to use War Reserve
Material munitions when possible to partially fill the training
shortfalls. Although this strategy facilitates higher rates of
training, it is also decreasing our WRM Munitions stockpile and results
in a slight increase in the risks associated with a 2-MTW scenario. As
identified on the FY01 Air Force Unfunded Priority List (UPL), there is
a shortfall of $125M in FY01 for training munitions.
In cases where applicable weapon systems have experienced a decline
in mission capable rates, we are using the same strategy of exercises
taking priority over home station training.
General Dake. Competing priorities for fiscal resources do not
allow us to fund training munitions to the required levels stated in
our aircraft Training and Readiness manuals. The Marine Corps in
conjunction with Naval Aviation is recommending that beginning in FY02
we base line training ordnance funding at 70% of that required by
aircraft T&R manuals. Currently, the fleet trains with those munitions
made available to them and to date has not experienced a degradation in
training readiness significant enough to effect SORTS. Some of the
ordnance used to support training comes from warfighting inventories
which are currently not being adequately replaced to maintain the
inventories at present levels. At this point, the overall affect of
reduced training ordnance and decreased mission capable rates is
subjective and difficult to measure. Our aviators continue to deploy
ready for combat and required training is being accomplished. However,
the quality of training suffers when training munitions are funded at
less than optimum levels.
Training Center Requirements
Mr. Bateman. The committee is aware that individuals and units
arriving at the major training centers are not adequately trained to
compete with resident opposing forces when they initially arrive at the
training centers. To what extent have you had to lower the training
center requirements for newly arriving individuals such as pilots?
General Keane. The Army appreciates the committee's support of our
combat training centers. The CTCs remain the Army's crown jewels for
training our leaders and soldiers in executing their wartime mission
essential tasks. The centers achieve this enhanced training readiness
through strict adherence to doctrinal training standards. Units arrive
at the CTCs at different levels of training readiness due to
operational mission requirements or limited home station training.
Based on these differences, the CTCs, in coordination with the division
commander of the training unit, establish training conditions for the
unit in order to ensure the soldiers and units receive the best
possible training experience. This condition setting allows soldiers
and units to achieve significant improvement in their training
readiness. If soldiers or units are at risk because of training
weaknesses, then conditions are created to allow the soldier or unit to
safely conduct the training.
Admiral Pilling. Navy's deployed readiness remains satisfactory,
but because of the cyclical nature of our deployments, we expect non-
deployed readiness to be at a lower level. As reflected in recent Navy
``Bathtub'' graphs, the post-deployment Air Wing Readiness rating drop
off is occurring earlier in the readiness cycle and is falling deeper.
As a result, Air Wings remain at lower readiness levels longer during
the Inter Deployment Training Cycle. This lower level of readiness
requires a steeper ramp-up prior to deployment. At the Naval Aviation
Strike Warfare Center, Fallon, this equates to pilots arriving for
training less prepared than in the past. Additionally, training
requirements have increased over the past as the threat, systems,
weapons and tactics have become more complex and the opportunities to
train with required systems have decreased.
General Lyles. The Air Force continues to produce quality combat
pilots who have the skills needed to perform the Air Force's flying
missions; evidence their success in Operations Allied Force and Shining
Hope. During Allied Force our sustained combat operations equaled that
of a major theater war, as the Air Force flew the majority of the
NATO's 38,000 combat sorties. We provided over 900 personnel and flew
more that 700 airlift sorties in support of Shinning Hope, providing
civil engineering, logistics, and security for many thousands of the
more than 1.3 million displaced Kosovars.
However, maintaining a mission ready aircrew force has become
increasingly more difficult for several reasons. Operations tempo
(OPTEMPO) has increased fourfold since 1990. Additionally, a strong
economy continues to draw large numbers of pilots from the military to
the airlines. The challenges have been significant from the maintenance
perspective as well. The effects of increased OPTEMPO, low retention of
maintenance technicians, aging aircraft and equipment, and lack of
spare parts end engines have combined to cause decreased aircraft
mission capable rates.
Implementation of the AEF is but one example of our efforts to
improve the quality of life of our Air Force people. Our airmen are
well trained, motivated and ready to serve. As a result of outstanding
support from the Administration and Congress we've taken a number of
steps to improve retention. Pay table reform and enhanced bonuses for
pilots and other critical specialties will all go a long way toward
closing the wage gap between our airmen and their civilian
counterparts. To offset the pilot shortage, the Air Force has doubled
its pilot production since the mid-90's. In FY99-01, Congress, DOD, and
the Air Force took specific actions to address our shortfalls in spare
parts funding. In the Air Force FY00 and 01 President's Budget, we
fully funded the spare parts validated requirement.
As laid out in the Air Force's FY01 budget program and beyond, a
balanced and integrated approach that focuses on four fundamentals--
people, readiness, modernization, and infrastructure--is key to the Air
Force maintaining a quality aircrew force whose size and readiness
enable it to accomplish the mission today and tomorrow. Continued
congressional support will facilitate the essential readiness and other
improvements the Air Force needs to continue to produce quality combat
pilots, and remain the world's preeminent aerospace force.
General Dake. The Marine Corps has not had to lower training center
requirements for newly arrived units or pilots. Our training program is
not designed, nor do we expect, to have combat units or pilots arrive
fully trained when they arrive at our training center.
At our principal training center in Twenty-nine Palms, we conduct
10 Combined Arms Exercises (CAX) a year.
The CAX Program is the centerpiece of the Marine Corps' live-fire
unit training. It uses a building block approach which sequentially
trains and integrates all combat systems into a full combined arms
live-fire evolution. The mission of the CAX program is to train a
Marine Air Ground Task Force (MAGTF), centered around a reinforced
rifle battalion (the Ground Combat Element or GCE). Emphasis is on
planning the integration of fire support and mechanized maneuver in a
desert environment, and then executing the plan with the full array of
ground and air weapons live-fire. As the premier expeditionary and
live-fire combined arms and maneuver training program in the United
States, participating CAX units enjoy many unique training
opportunities not duplicated anywhere else.
Commanders receive approximately three days of instruction focused
on the tactical skills necessary to successfully employ combined arms
in a mechanized desert environment. These classes emphasize such skills
as fire support coordination and engagement area building.
The first week of CAX focuses on company level training at the 400
series ranges. Individual Marines receive intensive, professional
instruction and rehearsed live-fire practical application of fire-and-
movement techniques and fortified positions clearing procedures. As
individuals, fireteams, and squads perfect their live-fire skills under
the close, personal observation of experienced, tactical instructors/
evaluators, the training progresses into platoon and company level
live-fire combined arms attacks.
The second week of CAX focuses on mounted (helicopter and assault
amphibian vehicle (AAV)) tactics. The training then logically evolves
into battalion level combined arms evolutions which synergistically
bring together all elements of the MAGTF in offensive and defensive
scenarios. Detailed after-action reviews (AARs) follow each evolution
to reinforce the positive and negative lessons learned at all levels.
The CAX program culminates in the third week with a three day final
exercise (FINEX) designed to increase the Marines' understanding of the
effects of both his weapon system and those that will support him on
the battlefield. This FINEX is a live-fire exercise that does not
include force on force training.
Training
Mr. Bateman. The Chairman of the Joint Chiefs of Staff's (CJCS)
joint training exercise program continues to require a large
commitmentin funding, personnel, and resources. How do we keep cost
down while conducting the necessary training? Are you adequately funded
to participate in these exercise? What operations tempo (OPTEMPO)
concerns do you have with the current level of Joint Chiefs of Staff
exercises?
General Keane. Army funding in support of the CJCS exercises
program has been significantly reduced during the last few years.
Starting in fiscal year 1999, Army funding for CJCS exercises has been
reduced 30 percent ($58.2 million to $40.9 million). Funding
constraints have required the Army to reduce participation in CJCS
exercises in recent years. Unified commands and Army component commands
analyze every training event in CJCS exercises to ensure that Army
forces receive the maximum training value for resources expended.
The 30 percent reduction in Army funding for CJCS exercises which
was implemented in fiscal year 1999 still allowed the Army to support
the Commanders in Chief (CINC's) critical joint training requirements.
Because of additional Congressional reductions in Army support to CJCS
exercises in fiscal year 2000 ($10 million), the Army is not adequately
funded to support the CINC's critical joint exercise requirements. It
has been necessary to reduce Army participation in CJCS exercises due
to Congressional funding reductions.
We are very concerned with OPTEMPO and will continue to make every
effort to keep it at an acceptable level. While CJCS exercises increase
Army OPTEMPO, the primary contributors to increased OPTEMPO levels are
operational commitments in Kuwait, Bosnia, Kosovo and the other force
presence requirements.
Admiral Pilling. The significance of declining readiness among non-
deployed forces is that these units constitute critical follow-on
forces that are expected to rapidly deploy in the event of a Major
Theater War (MTW). The deeper the ``bathtub'' becomes, the greater the
risk to being able to respond with combat-ready, follow-on forces. The
Chairman of the Joint Chiefs of Staff recently assessed higher risk for
accomplishing a two MTW scenario. This, in part, was due to the
readiness degradation observed among Navy's non-deployed forces.
JCS Training Program
General Lyles. We keep cost down while conducting the necessary
training by restructuring, realigning, consolidating, and elimination.
Restructuring involves changing the forces involved in the
exercise. This may involve changes in the numbers and/or types of
forces participating, as well as their employment locations. For
example, United States Air Forces, Europe participated in some
exercises by flying from home station instead of deploying to another
location.
Realigning can be accomplished by changing deployment, employment,
or redeployment dates. This can have significant advantages by
enhancing joint training through participation in multiple exercises
while decreasing deployment or redeployment times for the forces
involved and utilizing air mobility assets more efficiently. This may
involve a slightly longer time away from home for the forces involved
but reduces the number of man-days and potentially eliminates the
requirements for a second or third deployment.
Consolidating allows the CINCs and the Air Force to combine
exercises to meet multiple objectives. This works well when different
CINCs can use the same overarching exercise to execute one or more
exercises. For instance, TRANSCOM executed TURBO CHALLENGE in
conjunction with PACOM's RSO&I. Combining exercises in this manner
allows the Air Force to have personnel accomplish several different
training objectives during a single deployment.
Due to our current fiscal constraints, we are not able to
adequately fund 100% participation in these exercises. Although not on
the Air Force FY01 Unfunded Priority List (UPL), there is a shortfall
in the JCS Exercises program. The FY01 President's Budget (PB)
requested $37.1M. This supports only 60% to 70% of Theater CINC
requirements. The FY01 Appropriation Committee marks reduced the PB
request of $37.1M by $12.2M to $24.9M. This supports only 40% to 50% of
the Theater CINC requirements. For example, USAFE program has been
funded at approximately 63% of the total requirements since FY96.
Wholesale exercise cancellation has been averted by the selective
reduction of participation and by operating from home stations,
reducing readiness values of the exercises. A reduction in FY01 may
force USAFE to curtail or cancel current planned events in support of
several joint and combined exercises at the expense of readiness and
engagement in Europe and Africa. In addition, USAFE's capability to
work and fly with other allied nations and to stand up JTFs for real
world operations will suffer.
Overall, the effects on OPSTEMPO from the exercise program is only
a small part of total OPSTEMPO and PERSTEMPO. JCS exercises account for
1.4% of the time personnel are on temporary duty (TDY) while
contingencies account for 22.7% of personnel TDY time.
General Dake. The Marine Corps places a high priority on joint
training and exercises. Joint and Service exercises are complementary
forms of required Service combat proficiency training and not mutually
exclusive. Joint exercises allow the Marine Corps to demonstrate its
ability to rapidly project forces globally, and also enhance
interoperability with other Services, allies and coalition partners.
The key to funding, planning, and conducting Service and joint
exercises is to ensure we maintain the proper balance between them.
Our Marine Force commanders strive to meet the requirements of
multiple commanders. Unlike other Service component commands which
characteristically support only one geographic combatant command, each
Marine Force supports three combatant commanders' exercise and
engagement programs: The Commander, U.S. Marine Corps Forces Atlantic
(COMMARFORLANT) supports U.S. Joint Forces Command, U.S. European
Command, and U.S. Southern Command, and the Commander, U.S. Marine
Corps Forces Pacific (COMMARFORPAC) supports U.S. Pacific Command, U.S.
Central Command, and the sub-unified command, U.S. Forces Korea.
KEEPING JOINT TRAINING COSTS DOWN WHILE CONDUCTING NECESSARY TRAINING:
The best way to keep joint training costs down is to ensure that we
are conducting only necessary joint training. From a Service
perspective, ``necessary joint training'' is based on joint warfighting
requirements. These requirements should be the driving factors behind
all Joint Training System (JTS) events. To be ``requirements-based,''
exercises should be scheduled and conducted by forces needing to meet
those joint training requirements. Once a force successfully performs
all its required tasks, it is then considered trained and ready for
joint operations. Any joint training for that force after it meets all
its joint training requirements is redundant.
A major challenge to ``keeping joint training costs down while
conducting necessary training'' is that all joint exercises are not
based on the joint warfighting training requirements for the forces
involved. Combatant commanders also view joint exercises as theater
engagement opportunities. Service components are tasked by their
combatant commanders to participate in exercises beyond those required
for their training in order to support other Service components,
staffs, and theater engagement events. From the perspectives of the
force provider and the actual participating forces, an exercise is an
exercise and the same costs are there whether it's warfighting
requirements based or engagement requirements based.
JCS EXERCISE FUNDING:
In recent years, JCS exercise funding has decreased, with
decrements coming in the year of execution, while joint exercise and
engagement requirements have increased. Marine Forces have been placed
in a dilemma that challenges their Service-joint exercise balance:
either justify to one or more combatant commanders why their respective
exercises won't be supported, or fully support all the exercises by
taking operation and maintenance (O&M) funds from their Service
programs. The funding for Service participation in JCS exercises has
not kept pace with the increased joint exercise and engagement
activities required by the combatant commanders.
OPTEMPO CONCERNS:
We have OPTEMPO concerns with the increasing number of joint
exercise and engagement activities for our finite number of operational
units.
Our Marine Forces' staffs are also challenged by the hectic
``commander-staff-tempo'' to meet the planning and administrative
requirements of these multiple exercise programs. One typical joint
exercise usually features several conferences for concept development
and initial, mid, and final planning. Besides these temporary
additional duty (TAD) requirements, the commander and his staff must
also train to respond to real-world contingencies in any of their
respective combatant commands' theatres. Contingency support in one
theatre often does NOT eliminate simultaneous exercise support in
another supported theatre.
Personnel Training
Mr. Bateman. In your personal opinion, are the personnel within
your respective commands receiving the required training to develop the
necessaryskills to perform all of the tasks that will be assigned to
them?
General Keane. I am confident in our training doctrine and our
leaders' abilities to apply it in their training programs to produce
trained and ready units. The primary objective of our training strategy
is to produce soldiers, leaders, and units trained to a specific Army
standard. Army training is adequately resourced to execute the combined
arms training strategies to achieve a standard of readiness that
supports execution of the National Military Strategy. The combined arms
training strategy is an overarching concept that provides training
strategies for America's Army. They are task-based, two-year training
management programs that use proponent-developed strategies to support
unit training. Combined arms training strategies will continually
evolve and be refined as units apply these strategies in developing
their training and resource requirements.
Admiral Pilling. As part of an effort to reduce the workload on our
sailors, we issued a directive that reduced the number of inspections
and assist visits imposed on the Fleet during the Inter-Deployment
Training Cycle by 25%. By consolidating training evolutions and
eliminating redundancy, where it made sense, we have achieved greater
efficiency. The additional time given back to the commanding officers
allows them to conduct unit training and at the same time improve the
quality of life of Sailors.
General Lyles. Our forces are well trained today to perform their
missions. The Kosovo operation showed that we have the best-trained
force in the world even with the many stresses on our personnel and
readiness training. However, the 400% increase in the number of
deployed forces since the end of the cold war is straining the ability
of the Air Force to continue to meet its training requirements and
readiness. High operations tempo, aging equipment, and the cumulative
effect of too few dollars raises concerns about future readiness. To
ensure the Air Force can maintain its quality of training and readiness
in the future will require a decrease in tempo by increasing the force
structure and/or reducing our commitments.
General Dake. Yes. We have developed Occupational Field training
tracks which allow all Marines to accomplish tasks/missions appropriate
for their rank and experience level.
Funding for Training Centers
Mr. Bateman. In your personal opinion, are the training centers in
your commands adequately funded and do they have all the necessary
equipment to perform their training?
General Keane. In fiscal year 2001, the training centers'
operations are adequately funded to conduct scheduled training
rotations. The recapitalization and modernization of the centers,
however, are not adequately funded. The opposing forces (OPFOR) tracked
vehicle fleet of M551 and M60A3 tanks and M113 armored personnel
carriers continues to age, requiring extensive maintenance costs as
these systems quickly approach the end of the useful lives. The
instrumentation systems, built 20 years ago with 1970's technology, are
losing feedback capability and will not support digital equipment. To
continue to garner the maximum training benefit from the centers, and
keep them relevant to current and future operational environments, we
must modernize the training centers' pre-positioned fleets, OPFOR
fleets, and instrumentation systems to provide maximum training benefit
for and feedback to the rotational units.
The training centers are given high priority due to initial entry
training requirements, but there are still significant unfunded needs
for life cycle replacement of organizational clothing and individual
equipment, training aids and devices, conduct of field training
exercises, barracks maintenance, and garrison support. Additional
funding is needed to support new training for a digital force while
continuing to train analog systems. Likewise, leader development and
self-development programs require additional funding to keep pace with
Army Transformation and digitization of the force.
Funding for repair parts, range modernization, combat training
center (CTC) modernization, replacement of furniture, and maintenance
and upgrade of simulators is much lower than required. Requirements for
training aids, devices, simulators and simulations (TADSS) at training
bases have either been filled, partially filled, not filled, or are in
need of upgrades due to tactical system change, refurbishing due to
equipment age, or lack of repair parts. This includes modernization of
the CTCs.
Constrained resources either in the training mission area or in
program manager programs contribute to shortfalls in total quantities
of TADSS being fielded to the training base or to the lack of upgrading
or refurbishing the TADSS currently fielded.
Additionally, changing force structure and the fielding of new
systems have aggravated the situation at training bases due to the
requirement to keep old TADSS needed to train old systems still in the
Active and/or Reserve components. Additionally, inadequate TADSS levels
and TADSS configured with obsolete systems reduce the ability to train
on all required tasks, provide adequate hands-on time, and causes
increased TADSS usage to meet the training load.
Admiral Pilling. Training centers have a finite number of aircraft
available for training and compete with deploying Carrier Air Wings for
parts and maintenance personnel to support these aircraft. As an
example, the Navy Strike and Air Warfare Center (NSAWC) has an adequate
number of older variant F-14s/F-18s to accomplish their training
mission. However, these older aircraft are inherently less capable and
require increased maintenance support to maintain a Ready For Training
status. Further, parts support is provided at a lower level of priority
than for deploying Carrier Air Wing aircraft, and aircraft maintenance
is accomplished within the constricts of a civilian contract rather
than by Navy assets.
In order to achieve the NSAWC mission, we augment NSAWC aircraft
(on a limited, ad-hoc basis) with aircraft from a Reserve Composite
Squadron (VFC-13). As a longer term solution, we are working with the
Air Force to upgrade the quality of the adversary aircraft.
General Lyles. The Air Force strives to procure and utilize
training equipment and simulators used by Technical Training Centers
that is the same or similar to what is used in the field. There are
significant deficiencies. The 10 Mar. 00 Air Force Inspection Agency
``Eagle Look'' report on Aircraft Maintenance Training Devices
Management identified 25% of 223 training devices as not being current
with the weapon system they support; therefore, they could not be used
for training. When new operational systems are fielded today, training
equipment needed to support the system is procured at the same time as
the operational system. This was not true for past legacy systems. For
example, some Space Operations training for legacy systems are
conducted using outdated, homegrown systems unlike what is used in the
field. This will continue until the entire legacy system can be
replaced.
A primary concern is the sustainment of training equipment once it
has been procured. Adequate funding is not always readily available to
maintain training equipment that matches the field. Your continued
support and assistance will help us continue to match training and
field equipment.
General Dake. Yes, The funding posture for 29 Palms is a total of
approximately $60M in fiscal year 2001. Maintenance of Real Property
(MRP) and Base Operations Support (BOS) make up over 70% of this
funding. The Enhanced Equipment Allowance Pool (EEAP) makes up 17%.
Funding is sufficient to cover maintenance and personnel requirements.
The funding posture is similar to the rest of the Marine Corps in that
funding is not robust, but adequate to support the mission without
degrading readiness.
Training Equipment
Mr. Bateman. In your personal opinion, is the equipment that the
training centers within your respective commands train with the same or
similar to the equipment that trainees will be assigned to upon
completion of training?
General Keane. Equipment at the training centers is similar to
equipment in the field but I would caveat that training modernization,
to include the combat training centers, is not keeping pace with force
modernization. In many cases, our training base receives equipment
years after a trainee's arrives at their follow on unit.
Some soldiers are being ``trained down'' to outdated automation
systems rather than ``trained up'' to the latest systems already in the
field because the available equipment will not accept the upgraded
software. This necessitates additional training time at the soldiers
gaining unit to bridge the gap.
Admiral Pilling. The Navy trains and deploys onboard the same ships
and aircraft they train with during the Inter-Deployment Training
Cycle. Every effort is made at our fleet training commands to provide a
training environment similar to at sea conditions.
Equipment Similar that Trainees will be Assigned
General Lyles. For the most part, training equipment and simulators
used by Technical Training Centers are the same or similar to what is
used in the field. However, there are significant deficiencies. The 10
Mar. 00 Air Force Inspection Agency ``Eagle Look'' report on Aircraft
Maintenance Training Devices Management identified 25 percent of 223
training devices as not being current with the weapon system they
support; therefore, they could not be used for training. When new
operational systems are fielded today, training equipment needed to
support the system is procured at the same time as the operational
system. This was not true for past legacy systems. For example, some
Space Operations training for legacy systems are conducted using
outdated, homegrown systems unlike what is used in the field. This
continues until the entire legacy system can be replaced.
Technical training's biggest problem is sustaining training
equipment once it has been procured. Just recently, AETC was able to
replace outdated 386 computers at Keesler AFB, where communication/
computer training is conducted, with state-of-the-art computers.
Unfortunately, adequate funding is not always provided for technology
refresh efforts needed to keep training equipment current, matching
what is used in the field. While funding has been provided for
hardware, no funding has been programmed for interactive courseware
development-training modernization that is critical in ensuring
students arrive mission-ready to their first duty stations. Sustaining
training equipment due to rapidly changing technology is difficult to
fund in today's fiscally constrained environment.
For Airlift/Tanker, Fighter, SOF, and Air Battle Manager flying
training most equipment is the same or similar to equipment used in the
field. C-130s training at Little Rock is performed exclusively on C-
130Es, while the operational fleet consists of various models (E, H1,
H2 and H3). Since C-130Es represent only about 43% of the total C-130
fleet, most operational units must accomplish some difference training
on their assigned model aircraft. This training varies from model to
model. E-to-H1 training may require only a short top-off course,
whereas E-to-H3 training is much more extensive. The new C-130J (and
the future C-130X) are different enough from the current fleet and each
other to require their own unique training systems. The C-5, C-17, and
C-141 fleet at Altus is representative of the operational fleet.
However, unlike the C-17 and C-141, the C-5s's cargo compartment
trainer is inadequate (a metal platform with metal poles defining the
width and breadth of the cargo compartment only). Load masters depart
Altus as unqualified loadmasters. At their home they require an average
of 120 days to achieve full mission ready status, to include survival
school, thus driving a bill for operational units and impacting their
C-ratings. The KC-135R fleet at Altus is not compatible with the KC-
135E training some AFRC/ANG crews receive. The R-model and E-model have
different engines, engine instrumentation, electrical systems, and
auxiliary power units. Crews go to a follow-on difference course (2
weeks) to fly the E-model after training at Altus. In addition, while
the front-end crew on KC-135R models fly in a full-visual color display
environment with up-to-date avionics, the boom operators (who deliver
the fuel--aircraft's primary mission) train on 1960s circa technology,
two dimensional ``pong-like'' screens with circa 1950s/1960s technology
simulated communications and life support equipment. The result is some
negative learning and added flying required for boom operator students.
[Booms do not drive sortie generation, pilot students do.] Neither AETC
nor AMC were able to secure funding in the Program Objective Memorandum
(POM) for an upgraded simulator although both commands supported it. F-
16s at Luke AFB are Block 25 and 42. No operational units have these
blocks of aircraft. Even though Block 25/30 and Block 40/42 aircraft
are similar, there are enough differences to impact training, since
AETC aircraft are frequently not upgraded to the level of the aircraft
in the field. NVG training is still being worked as an issue, and the
Block 50 HARM Targeting System is a very different weapon system and
mission that will require academic training at Luke followed by flight
training once operational. Training equipment for the F-22 is being
procured as part of the acquisition process and will, therefore, be the
same as fielded aircraft. For Special Operations Forces, the MC-130H
Talon II is the same version for both training at Kirtland and in the
field. However, for the MH-53, training is accomplished using an older
J-model while the field uses the M-model which has an improved
navigation and electronic warfare suite. Students trained in the J-
model require additional training and certification at their
operational units in the MH-53M. Additionally, in the MC-130, Kirtland
trains crews in the MC-130P (Combat Shadow), an AFSOC version of the
HC-130. The Combat Shadow has improved navigation systems, but an older
version radar than the ACC field units. For HH-60 training, the same
version helicopter is used, but without the Integrated FLIR (Forward
Looking Infrared) system that allows enhanced crew capabilities for
night/low visibility conditions. For AFSPC and AMC future crewmembers
the UH-1N is the same version for training at Kirtland and in the
field. The training equipment used for Air Battle Managers is the same
or similar to equipment used operationally.
General Dake. The equipment at our Formal Training Schoolhouses is
the same or similar to that which our Marines will use when they reach
the Marine Operating Forces.
Levels of Training
Mr. Bateman. In your personal opinion, are you, within your
respective services able to accomplish the level of training required
by the organizations that trainees are assigned?
General Keane. Yes. The principal goal of initial entry training
units is to develop soldiers of character who are competent in their
warfighting and technical skills, possess warrior spirit, successfully
contribute to their first units, and successfully complete their first
enlistment. We maintain a dialogue with the gaining units to gauge the
quality of our product. We balance unit requirements with our ability
to deliver trained soldiers within the limits of time, money, and
available resources. There are sometimes resource constraints that do
not allow us to expose soldiers to every piece of equipment they may
encounter at their first unit, but we deliver soldiers with the
fundamental skills that provide the basis from which units can further
develop them into seasoned veterans.
Admiral Pilling. The Navy's primary combat training is conducted
during the Inter-Deployment Training Cycle. Our ships and aircraft
undergo maintenance and sharpen warfighting skills and proficiencies
that have migrated to a basic level due to crew turnover and a lack of
opportunity to train while in maintenance periods. Advanced training
allows us to deploy combat ready troops. The Navy has found that the
cyclical posture makes the most effective use of constrained resources.
However, this efficiency means that funding shortfalls, when they
occur, have a greater and more rapid impact today than in the past.
General Lyles. Our forces are well trained today to perform their
missions. The Kosovo operation showed that we have the best-trained
force in the world even with the many stresses on our personnel and
readiness training. However, the 400% increase in the number of
deployed forces since the end of the cold war is straining the ability
of the Air Force to continue to meet its training requirements and
readiness. High operations tempo, aging equipment, and the cumulative
effect of too few dollars raises concerns about future readiness. To
ensure the Air Force can maintain its quality of training and readiness
in the future will require a decrease in tempo by increasing the force
structure and/or reducing our commitments.
General Dake. There are no readiness impacts that I am aware of
that can be traced back to shortfalls in the institutional training
base.
Adequacy of Training
Mr. Bateman. Forces engaged in peace operations often lack the
opportunity to fully train in their warfighting skills. What efforts
are being taken to provide adequate training when these forces return
to regular units?
General Keane. Since the end of the Cold War, the Army has
significantly increased its role in peace operations. We have deployed
countless soldiers and units across the globe to perform humanitarian
and combat tasks. In every deployment, the Army has captured the
lessons learned, integrated them into our training base, and trained
them at our combat training centers. Last year, General Shinseki
mandated that units would execute a deployment exercise as part of
their battle command training program warfighter exercise.
Additionally, the Combat Maneuver Training Center and Joint Readiness
Training Center execute mission rehearsal exercises for units selected
for deployment to Bosnia or Kosovo. This training prepares soldiers and
units to handle the arduous tasks associated with peace operations, as
well as maintain combat readiness. We have found that it takes roughly
a year to return these soldiers and units to a high readiness state
once they re-deploy to home station. This readiness is achieved through
annual training requirements for weapons, individual soldiers, and unit
training.
Admiral Pilling. The Navy prepares itself during the Inter-
Deployment Training Cycle to conduct a broad spectrum of operations.
Whether we are flying air strikes over Kosovo, or maintaining a forward
presence in the Gulf our forces are ready to conduct combat missions
from the sea.
General Lyles. Returning units enter a `Pause' period followed by a
`Normal Training and Exercise' (NTE) period, in accordance with AEF
procedures. The length of time required to regain pre-deployment skill
levels is dependent on the length of the previous deployment, the
experience level of the crews, as well as the types of missions and
aircraft flown. Weighing these factors, the retraining time is
scheduled based on the extent the unit was deployed and the personnel
and operations tempo they maintained. The Pause and NTE time frame, for
other factors (training, equipment, deferred maintenance, and
manpower), is also very dependent on the specifics of each unit/
capability.
Genera Dake. Whenever a unit or detachment is deployed apart from
the parent unit for a period of time, leaders and commanders at all
levels make an assessment of the subordinate units' capability to
execute its warfighting missions upon return. If a unit's warfighting
capability has been degraded, then leaders and commanders will design
an accelerated training program to assist the unit in regaining
proficiency in individual mission essential tasks and overall unit
capability. For units at home station, the training will involve
exercises and training events in and around the home station that
address warfighting deficiencies. Additionally, units may be scheduled
to participate in a Combined Arms Exercise at Twenty-nine Palms,
California, or a unit may be scheduled to enhance individual and unit
skills at the Mountain Warfare Training Center in Bridgeport,
California.
Units forward deployed, both Marine Expeditionary Units (Special
Operations Capable) (MEU(SOC))s, as well as infantry battalions,
artillery batteries, and fixed wing and rotary wing squadrons deploying
as part of the Marine Corps Unit Deployment Program (UDP), have an
aggressive schedule of events during their deployment that normally
includes large scale exercises involving some degree of sustainment
training. For example, from April through September 1999, 26 MEU(SOC)
participated in Operation SHINING HOPE, providing security to Albanian
refugees fleeing Kosovo; Operation NOBLE ANVIL/ALLIED FORCE, NATO's
bombing of Kosovo; and Operation JOINT GUARDIAN, NATO peace enforcement
of Kosovo. While conducting port visits following these operations, 26
MEU(SOC) was tasked to provide support to Operation AVID RESPONSE,
earthquake relief operations in Izmit, Turkey. Following the
termination of U.S. support to Operation AVID RESPONSE, 26 MEU(SOC)
immediately went into preparation for two significant bilateral
training exercises designed to work on improving relation with the
participating nations, while also providing valuable sustainment
training for the Marines and sailors of 26 MEU(SOC). Units
participating in the Unit Deployment Program are also scheduled to
participate in exercises that take place in the Pacific theater. The
Foal Eagle and Balikatan series of exercises are two examples of these
exercises, which provide excellent individual and unit sustainment
training opportunities.
Mr. Bateman. Given the high pace operations, a smaller force
structure and constrained resources, can you say unequivocally that
today our forces are receiving the same quality training and training
experience and are obtaining levels of proficiency across the spectrum
of skill, requirements as five or ten years ago?
Admiral Pilling. Carrier Battle Groups today, in general, are
deploying at a level of readiness below where they were a decade ago.
While nearly every unit in the past decade has deployed combat-ready,
that degree of readiness has diminished over time. It is important to
note that Defense Planning Guidance specifies a range of readiness each
unit must be within before entering their theater of operations. Over
the past decade, Navy has remained within this range.
Quality Training
General Lyles. Today we operate throughout the world with a 40%
smaller force structure and with two-thirds fewer overseas bases than
only a decade ago. As a result, almost 40% of the deployable active air
force are operating outside the U.S. from 12 overseas bases and 16
forward operating locations. Deployments have become a way of life for
our airmen.
The Expeditionary Aerospace Force (EAF) concept represents a
transformation from Cold War operations, changing how we organize,
train, equip and sustain our forces to meet the challenges of today's
global security environment. Organized around 10 EAF's employed in
pairs for 90 days over a 15-month cycle, the EAF concept provides
better trained aerospace forces to the CINC's while adding
predictability and stability to the lives of our airmen.
The combination of several years of constant high operations tempo,
aging aircraft and years of underfunding our spares account have taken
a toll on readiness and understandably raises concern for the future.
Recent operations in Kosovo though, reinforced the fact we have the
best-trained force in the world. Our fiscal year 2001 budget program is
based on sustaining our decisive fighting force through a balanced
program that addresses today's readiness while fostering innovative
solutions to the challenges of the future. We continually scrutinize
the state of our overall readiness and with the help of Congress are
taking positive steps to correct deficiencies. To ensure the Air Force
can maintain its quality of training, proficiency and readiness in the
future will require the continued support of the Administration and
Congress.
General Dake. The readiness of our Operating Forces is the highest
priority for the Marine Corps. It was ten years ago and remains so
today. Not only does the training standards we hold ourselves to remain
high, but we have strengthened the way we make and transform Marines.
We recruit the highest quality men and women. We retained our proven,
tough, demanding recruit training program and enhanced it to ensure our
Marines are ready to prevail in the future. Following recruit training,
these new Marines come under the Cohesion program, which carries them
as a team through their military occupational specialty training into
the Operating Forces, resulting in more cohesive units. This
transformation process is sustained through the reinforcement of core
values and by holding Marines strictly accountable throughout their
careers. Our quality training and transformation process provides
stronger, smarter, and more capable Marines who have the maturity and
flexibility to meet the challenges of the 21st Century battlefield. We
cannot use the term ``unequivocally'' because the yardsticks to measure
``now'' and ``ten years ago'' are not available because both technology
and the type and size of the anticipated adversary have changed.
However, we can say that in many cases Marines are receiving better
training than they were. For example: Technology infusion at the Marine
Corps Communication Electronics School has reduced the time to train,
improved retention and decreased attrition in Basic Electronics
training. The Training Development System, implemented in the last
year, requires entry-level training to focus on core requirements and a
distribution of follow-on training. This results in providing more
Military Occupational Specialty qualified, trained Marines to the
Operating Forces than in the past. To some degree, austerity has forced
us to find ways to do things smarter, cheaper, and in many ways better.
Mr. Bateman. What has been the impact on readiness of these
diversions of funds from training accounts? How do you make up for
training that did not occur?
Admiral Pilling. The Navy has seen a slight decline in training
levels as reported in the Status Of Resources and Training System over
the past ten years. That said, today's Navy is the most capable in the
world and continues to demonstrate forward-deployed readiness in
meeting America's security obligations across the globe. It is
important to note that Defense Planning Guidance specifies a range of
readiness each unit must be within before entering their theater of
operations. Over the past decade, Navy has remained within this range.
General Lyles. The Air Force maintains a delicate balance between
mission and support areas. Decentralized execution of funding provided
to our Commanders gives them the flexibility to balance mission and
support requirements. We are not aware of any impact to readiness due
to funding transfers.
General Dake. Diversions in funds have affected the preparation for
exercises. Training exercises are tremendous builders of combat
readiness due to the synergies of combining realistic, combat-scenario
operations and logistics in high tempo. Individual and small-unit
preparation training in advance of the exercises must be performed
without, or with less than optimal resources. To gain training
synergies during the exercises, equipment must be ready and capable.
Individual and small-unit training in advance is often sacrificed
immediately prior to exercises in deference to performing remedial
maintenance on the equipment so that the unit is ready for the
exercise. While we can never make up for training that did not occur,
commanders make every concession to try to tailor their units's
training schedules so that the participants can ramp up steeply but
safely to training standards. Our training centers accommodate the
commander's needs to the greatest feasible extent. Recognizing that we
can never make up for lost training, we find that we can't afford to
train every Marine in every task that might be expected of him or her.
Using the axiom of the student now becoming the instructor, we assure
that specialized skills are resident in enough Marines that we can
collectively meet all requirements without excessive expenditure or
unacceptable personnel tempo.
Mr. Bateman. Would it not be better to adequately fund the accounts
that habitually are underfunded and therefore, provide enough funds for
training so training doesn't need to be cancelled?
Admiral Pilling. Navy's overall readiness trend continues to be
satisfactory. Deployed readiness remains high, but because of our
cyclical readiness posture, we expect non-deployed readiness to be at a
lower level of readiness. This is a direct result of units entering the
Inter-Deployment Training Cycle, where ships and aircraft undergo
maintenance and warfighting skills and proficiencies migrate to a basic
level due to crew turnover and a lack of opportunity to train while in
maintenance periods. We have found that this cyclical posture makes the
most efficient and effective use of constrained resources. However,
this efficiency means that funding shortfalls, when they occur, have a
greater and more rapid impact today than in the past.
General Lyles. The Air Force budget submission represents a
balanced program of priorities within current funding constraints. Our
budget request reflects the Air Force's top priorities and our Unfunded
Priority List (UPL) prioritizes those requirements that could not be
funded in the budget.
General Dake. Yes, habitually underfunded accounts eventually
become regarded as ``bill payers'' and as a result the quality of their
intended purpose is eroded. Cancellation of training is a serious
matter. The scheduling and timing required to get the right person to
the right training is often subject to opportunity in a high Op-tempo
environment. Cancellation therefore often equates to a training
opportunity lost and a capability never attained.
Spare Parts
Mr. Bateman. The committee is aware that spare parts are scarce and
mission capable rates have suffered as a result in all the services.
What is your sense of the adequacy of spare parts in your major
operational units?
Admiral Pilling. Spares availability for major operational units is
for the most part sufficient, though there are pockets of concern that
need to be resolved. The most challenging area is aviation spares
allowances in support of non-deployed units. Spare parts levels on
deployed units are adequate to support the current operational tempo,
but achieving and maintaining deployed unit spare part support has
meant diverting assets from non-deployed units. A recent study of the
Navy's capacity to surge multiple aircraft carrier battle groups
confirmed that a great deal of aviation spare parts pooling and
diversion from shore sites would be necessary to support some wartime
scenarios. The majority of the support problems result from imbalances
among the appropriated and working capital fund accounts provided for
spare parts as described below in question 35. During the last Program
Objective Memorandum (POM) and Budget cycle, the Navy began a concerted
series of actions to address these spares support problems. In
particular, the Navy has addressed shortfalls with the Aircraft
Procurement, Navy, Budget Activity 6 (APN-6) account that is used to
fund planeside spare parts on ships and at naval air stations. Due to
lead times involved with the procurement of technologically complex
aircraft spare parts, these actions will take time to manifest
themselves in the form of improved readiness.
Spare Parts--Adequacy
General Lyles. Anecdotal evidence indicates spares support to the
field is generally improving. Backorders for reparable spare parts have
been reduced 54% from December 1998 to June 2000. Deliveries are ahead
of schedule for the FY99 add of $382M in Obligation Authority for ``bow
wave'' requirements to restock shelves. In addition, the get well
program for engines is making slow, but steady progress; there are
currently only 6 of 26 engine types Air Force wide not meeting War
Reserve Engine (WRE) requirements. Along with Air Force efforts to
improve reparable spare parts availability, we have partnered with the
Defense Logistics Agency to execute the Aviation Investment initiative
for consumables. DLA is investing $500M over a four-year period to
increase support levels for aviation and engine related parts; 53% of
this is targeted for Air Force weapon systems.
The latest monthly (May 2000) Total Not Mission Capable for Supply
(TNMCS) rate for Air Combat Command fighter aircraft is 11.4%, the best
seen in 24 months. The overall Air Force TNMCS rate decreased
(improved) from 16.1% in Sep. 1999 to 13.4% in May 2000. The Air Force
remains cautiously optimistic that the supply rate will continue to
improve. However, future years' full funding is needed to sustain
improvements in supply availability. In addition, aging aircraft, high-
demand aircraft issues, and depot workload transition difficulties
continue to pose challenges for the supply system.
General Dake. We are optimistic that recent additional funding for
spare parts of equipment in our major operational ground units will be
adequate in the short term. Additionally, the introduction of new
systems to the operating forces will help sustain ground equipment
readiness rates.
Our major aviation operational units sense of adequacy of spare
parts can only be viewed in relation to all measurements as outlined in
the graphs and text below. Not Mission Capable Supply (NMCS) represents
the percent of time that an aircraft is down for parts. This
measurement provides an indication that there is a parts problem. In
summary, on the fixed wing side, the adequacy of spare parts has been a
problem due to problems with the AV8B engine. The removal, inspection
and repair of these engines resulted in unanticipated demand for spare
parts. Increasing the availability and safety of the AV8B aircraft has
been the subject of the Harrier Action Review Panel (HARP). On the
rotary side, the adequacy of spare parts has increased as we are
overcoming problems with CH53, Gearbox assemblies, Swash plates and
Rotor Compressors and CH-46 Transmissions. Details are as follows:
On the Fixed Wing side we have experienced a slight decreasing
trend in readiness, from 74.5 percent in FY90 to 71.7 percent in FY00.
This decline can be attributed to a noticeable increase, from 11.1
percent in FY90 to 16.7 percent in FY00, in the percentage of time that
an aircraft is down for parts. This is illustrated on the graph below
as Not Mission Capable Supply (NMCS). Issues with the AV8B Engine have
caused a significant increase in NMCS time and a resulting decrease in
Mission Capable rates.
[The information referred to can be found in the Appendix on page
103.]
On the Rotary Wing side we have experienced a continued increasing
trend in readiness, from 64.8 percent in FY90 to 76.3 percent in FY00.
This rise in Mission Capability (MC) results from a significant
decrease, from 23.3 percent in FY90 to 12.8 percent in FY00, in the
percentage of time that an aircraft is down for parts. This is
illustrated on the graph below as Not Mission Capable Supply (NMCS).
The decrease in readiness that occurred in fiscal years 1996 and 1997
was as a result of problems with CH53, Gearbox assemblies, Swash plates
and Rotor Compressors and CH-46 Transmissions. The focused effort to
resolve these issues has resulted in the steady upward trend in
readiness since FY96.
[The information referred to can be found in the Appendix on page
103.]
Mr. Bateman. What do you think the principle reasons are for spare
parts shortages?
Admiral Pilling. A combination of factors in recent years, has led
to a decline in available aircraft spare parts. The primary reason for
spare parts shortfalls has been the increased age of aircraft, coupled
with the upward demand for material to maintain these aging aircraft.
We are seeing trends where components are failing more often and
repairs to these components are more complex and longer to repair. In a
growing number of cases we are experiencing failure of items which had
never been forecasted to fail. This growing demand level continues to
squeeze the spares budgets and is exacerbated by the shortage of
adequate funding within Naval Air Systems Command (NAVAIR) to support
program related logistics/program related engineering. These two
efforts are central to the process where engineers keep ahead of
reliability problems and develop engineering fixes to maintenance
problems.
A second major cause for spares shortfalls has been the imbalance
between the three inter-related funding streams which support aviation
spares levels. Frankly, the significance of maintaining the balance of
these funds had not been determined until this past Program Objective
Memorandum (POM) cycle. The specific accounts in questions are:
<bullet> Aircraft Procurement, Navy-Budget Activity 6 (APN-6)--APN-6 is
used to procure planeside spares commensurate with procurement of new
aircraft and modification of existing aircraft. Allowances are computed
via a readiness based spares analysis, a process which ties the spares
package for an aircraft to the readiness that each part provides to the
overall availability of the aircraft to perform its mission. Since
these planeside spares allowances are computed with a readiness based
model, any APN-6 shortage will directly reduce the available spares,
and will directly negatively impact readiness.
<bullet> Operations and Maintenance, Navy (O&M, N)--O&M, N funds are
provided in the Flying Hour Program (FHP) for customers to buy spares
when needed in support of operations and training. Ideally, when a
spare is needed to repair an aircraft, the spare was previously bought
with APN-6 funding and is available on the planeside shelf to complete
the repair. FHP funds are then used to replenish the planeside shelf
stock spares as they are consumed in support of daily operations. There
have been instances in the past, where planeside shelf stock was used
to complete repairs, but replenishment was delayed due to lack of FHP
funding. These replenishment delays naturally result in queuing
problems throughout the entire supply chain and if not stemmed, could
result in a large bow wave of unfunded requirements. There have been
instances where a lack of FHP funding has resulted in deferring
replenishment/repair action from one fiscal year into the next.
<bullet> Navy Working Capital Fund (NWCF) and Defense WCF(DWCF)--
Wholesale supply system spare parts are bought and managed by the Navy
and the Defense Logistics Agency (DLA) through the use of NWCF and DWCF
obligational authority. These wholesale spares are procured and stocked
in order to prevent a potential ``lead-time delay'' from manufacturers,
distributors, and civilian/military repair depots by ensuring
availability when needed. In short, the working capital funds buy the
readiness lead-time for the operators. If the spare is not procured in
advance of Fleet demand, then there is the risk that material will not
be on hand to support operator needs.
The relationship and balance between these accounts (APN-6; FHP
O&M, N; and NWCF/DWCF) is critical to providing readiness through spare
parts support. Under-funding of appropriated accounts (APN-6 and FHP
O&M, N) will have a direct negative impact on wholesale obligational
authority (NWCF/DWCF) resulting in less than adequate spares support
for required Fully Mission Capable rates. The under-funding of the APN-
6 and FHP O&M, N accounts described above have impacted NWCF/DWCF
obligational authority adversely over the past few years. Maintaining
these three funding streams is key to maintaining the overall health of
aviation. All of the factors and relationships described above have
resulted in degradation of spare parts supplies in support of Naval
Aviation.
Last, over the past decade Navy, as well as other services, has
reduced wholesale inventories in response to Department of Defense and
National Performance Review goals. These inventory reductions have
resulted in elimination of intermediate spares levels, more reliance on
agile transportation, and a reduction of obligational authority at a
time when additional funding is required to support the growing spare
requirements for our aging aircraft. Reduction of inventories is not in
itself a bad objective . . . inventory reductions out of the context of
the overall logistics and maintenance process can lead to
inefficiencies and a decrease in aircraft readiness.
General Lyles. The Air Force Materiel Command looked at this and
concluded a primary reason was the constrained spares funding of the
mid 1990's which leaned out inventories. With the help of Congress, the
Air Force is making significant strides to fully fund spares
requirements. However, the funding shortfall is just one part of the
problem. A combination of other factors include increased failures due
to aging weapon systems, technical surprises, poor forecasting,
production shortages and vanishing vendors, aggressive inventory
reductions, degraded consumable item support, and the effects of
workload transfers associated with the BRAC closures. The Air Force is
committed to improving spares support and several initiatives are
underway to attack spares problems on all fronts.
General Dake. As equipment continues to age and is maintained
beyond its planned service life, unplanned failures or spikes in usage
may occur which may necessitate additional repair part funding.
Ultimately, the answer to achieve sustained improvements in our ground
equipment readiness is to continue to modernize and field equipment
with high reliability which will help minimize the demand for
repairable funding.
The principle reason for the spare parts shortage for our fixed
wing aircraft is directly attributed to problems with the AV8B engine
that resulted in over fifty bare firewalls. Improper manufacture of
critical components has made it essential to remove and replace engines
and engine related components. The removal and replacement of these
engines resulted in a surge of unanticipated requirements for parts
that are not normally expected to fail.
The problem with the failed parts was the result of a quality
control process problem that emerged on the Pegasus assembly line.
Although not known to be directly responsible for any of the FY99 Class
A mishaps, these problems are critical and have contributed directly to
the large number of aircraft without engines and the very low
availability across the Harrier fleet.
Historic underfunding of the Reliability Centered Maintenance
concept has also been targeted as a cause of recent aircraft/engine
related readiness problems. Specifically in the Component Improvement
Programs (CIP) and Program Related Logistics (PRL) accounts. These
accounts are critical to long-term engine performance and reliability.
They provide for data collection, trend and cause analysis, corrective
design/engineering and improved component testing. Over the last 5-7
years, as funding has decreased, the number of unanswered Engineering
Investigations has grown and the length of time to field approved
changes has reached an average in excess of 9 years. Program funding
level has been sufficient only to be reactive to mishaps vice
proactively identifying and correcting problems before they lead to
mishaps. The Marine Corps recognized this and in 1997 formed the
Harrier Review Panel to identify the who, what, where and how of
required corrective actions.
Mr. Bateman. The committee is aware that one of the most often used
methods of overcoming parts shortages is to cannibalize parts from a
like type of aircraft and put it on the vehicle or aircraft to make it
operational.
What is your cannibalization policy?
Admiral Pilling. While the Navy does not have a published goal for
cannibalizations, recent fleet surveys have indicated that the current
level of aircraft spare part cannibalizations is adversely affecting
job satisfaction of maintenance personnel and pilots. At a minimum,
Navy would like to see a decline in the total cannibalization rate to
the levels achieved in 1995 & 1996. Some level of cannibalization is
inevitable in order to maintain the deployed squadrons at the highest
levels of readiness. However, the current level of cannibalization is
impacting retention and is therefore unacceptable.
General Lyles. The Air Force cannibalization policy allows a
cannibalization action to occur when a not mission capable (NMC)
condition will prevent the accomplishment of a mission and the required
assets are not immediately available from supply. Prior to a
cannibalization action, a verification is conducted confirming the
required component can not be sourced from on base assets within the
allotted time. In addition, the cannibalization decision authority
considers man-hour availability, impacts, and the risks of damaging
serviceable equipment. Additionally Major Command guidance for
cannibalization actions identifies specific procedures, individual
responsibilities, and documentation requirements.
General Dake. The Marine Corps does not utilize cannibalization to
maintain its ground equipment readiness. However, it can be authorized
on an exception basis when an operational commitment is imminent, and
only when a required part cannot be obtained in a timely basis.
Approval for such a procedure is strictly regulated and controlled.
For Aviation the cannibalization policy as outlined in OPNAV
instruction 4790.2G. is as follows:
a. Ensure an aggressive and effective management program is in
place to control cannibalization of aeronautical equipment. To the
maximum extent possible, ensure selective cannibalization actions are
planned to prevent aircraft from being in a non-flyable status for more
than 30 consecutive days.
b. All cannibalization actions shall be authorized and directed by
Maintenance Control (a division within a squadron).
c. All levels of command are directed to actively pursue
appropriate courses of action to properly manage cannibalization within
their areas of purview. In assessing the effectiveness of this
undertaking, it is imperative management guides, such as supply
material availability, A799 rate, repair turn around time, point of
entry effectiveness, and supply response time be considered in
conjunction with such measurement criteria as cannibalizations per 100
flight hours and cannibalization maintenance man-hours per
cannibalization.
Mr. Bateman. Do you maintain good records of the cannibalizations
that take place?
Admiral Pilling. Records are not centrally maintained for spare
part cannibalizations associated with ships and submarines. Because of
maintenance procedures and on board system redundancy, ship and
submarine spare part cannibalization are infrequent and have only a
very minor, if any, impact on readiness. Cannibalizations of spare
parts among aircraft are much more prevalent in the Navy. Because spare
parts cannibalizations are much more prevalent, accurate centralized
records are maintained and updated real-time in the Naval Aviation
Logistics Command Management Information System (NALCOMIS). Maintenance
personnel input all cannibalization actions in NALCOMIS as they occur.
These cannibalization records are maintained in Naval Aviation
Logistics Data Analysis (NALDA) database. These records can be accessed
electronically on demand at various Navy commands.
General Lyles. Yes, the Air Force policy requires documentation
anytime a cannibalization action is taken. These actions are recorded
in the core automated data system (CAMS). In addition these maintenance
actions are reviewed and validated to ensure accuracy.
General Dake. If cannibalizations are authorized for ground
equipment, strict managerial control practices are adhered to at the
command and maintenance facilities.
For Aviation units all cannibalization actions are required to be
documented as outlined in OPNAV instruction 4790.2G. They are
documented daily and reported via maintenance data systems monthly to
be viewed at all levels of the Chain of Command.
Spare Parts
Mr. Bateman. What are the trends?
Admiral Pilling. The cannibalization trend per 100 flight hours for
the past 10 years appears below. The cannibalization rate in 1999
indicated the first downturn in that metric since 1995. The source of
the information is the Naval Aviation Logistics Data Analysis (NALDA)
database.
------------------------------------------------------------------------
Year Rate
------------------------------------------------------------------------
1990.............................................................. 10.4
1991.............................................................. 10.4
1992.............................................................. 10.2
1993.............................................................. 9.8
1994.............................................................. 9.6
1995.............................................................. 8.4
1996.............................................................. 8.4
1997.............................................................. 9.1
1998.............................................................. 9.3
1999.............................................................. 8.9
------------------------------------------------------------------------
General Lyles. Cannibalization actions per 100 sorties for overall
Air Force have leveled off in recent years but we continue to pursue
spare funding and policy changes to drive further reduction. As the
chart below indicates, FY00 CANNs per 100 sorties were 11.7 (through
May 2000) versus 12.3 for FY99-lowest rates since 1996.
Although CANN rates decreased for most weapon systems, we have
focused on several critical aircraft spare parts issues that remain a
source of CANN activity. The B-1 has experienced about 84 CANNs per 100
sorties since FY97. The C-5 MC rates increased from approximately 45 to
55 percent since FY95. We expect ongoing initiatives to diminish these
rates over the next year.
[GRAPHIC] [TIFF OMITTED] T4887.073
General Dake. There are no outstanding trends for ground equipment.
Cannibalization is the last resort for supply support in the Marine
Corps.
For Aviation units from FY96 until present there has been a 28%
increase in the number of cannibalization actions for fixed-wing
aircraft and a 3% increase for rotary-wing. The increase in
cannibalizations on the fixed wing side is also attributed to the
problems outlined above with the AV8B engine.
Savings From A-76 Studies
Mr. Bateman. The pressures on service budgetsare obvious. One key
of many for success, is the aggressive privatization, or A-76, studies
underway that must create substantial savings. What will happen to your
budget if your A-76 studies yield the savings you projected?
General Keane. If our A-76 studies don't yield the savings
reflected in our budget, installations will have to re-prioritize
requirements to ensure that all salaries and other ``must-fund''
requirements are paid.
Admiral Pilling. The savings have already been taken against
applicable program elements. The A-76 program is an element of the
Navy's Strategic Sourcing initiative. This effort recognizes the
benefits of doing a review of an entire function using business process
efficiency efforts in conjunction with A-76. The net effect of the
Strategic Sourcing effort is providing installation infrastructure with
a greater ability to streamline operations and achieve cost saving
using a variety of approaches. Using an approach that is tailored to
meet the unique requirements of a function provides increased
flexibility to achieve targeted savings. Our experience to date with 44
A-76 studies completed demonstrates the projected savings target is
achievable. After all efforts have been exhausted to achieve
efficiencies (and total projected savings), if a shortfall still exists
then other programs will be reduced, deferred or eliminated. Across the
Future Years Defense Plan (FYDP), the solution would require
transferring resources from other programs or recapitalization accounts
back into base operating support. This is very unpalatable because of
the negative effect it would have on force structure and long-term
readiness.
General Lyles. In the past three years, we have experienced between
35% and 40% savings for Air Force cost comparisons. However, if a
particular A-76 cost comparisons does not provide the expected savings,
any shortfalls will be covered within Air Force Total Obligation
Authority. The Air Force has taken the expected savings into account
and allocated those savings to force modernization priorities through
the outyears. A-76 savings are clearly contributing to the cost
effectiveness of the Air Force.
General Dake. The Marine Corps is continuing to aggressively pursue
the identification of opportunities for potential A-76 competitions. If
these opportunities do not yield the savings identified, the Marine
Corps will continue to search out other areas where Business Process
Reengineering, Regionalization, Activity Based Costing, and other
improvement methodologies may be utilized. We anticipate that we will
make our projected savings even if additional A-76 opportunities are
not forthcoming.
Senior Readiness Oversight Council
Mr. Bateman. a. In your opinion, how effective has the Senior
Readiness Oversight Council (SROC) been since its inception?
b. What significant contributions has the Council made in dealing
with readiness issues?
c. What are some of the tangible items that have emerged from this
process?
d. Since the inception of the JMRR process and the SROC a little
more than a year ago, how have these reviews improved our ability to
assess readiness? What trends have been identified as a result of these
reviews?
General Keane. a. The SROC has been an effective mechanism for
addressing key readiness issues. The monthly meeting of the senior
civilian and military leadership has provided a forum for examining
both near- and far-term readiness. The flexibility of the Office of the
Secretary of Defense in determining agenda items has ensured that
current, relevant topics were discussed.
b. The SROC, together with the Joint Monthly Readiness Review
(JMRR) and the Quarterly Readiness Report to Congress (QRRC), has
provided greater insight into Army readiness at the operational and
strategic levels. In particular, it has given the Army and other
Services the opportunity to communicate issues and trends and to
develop coordinated approaches toward problem resolution.
c. The SROC process has highlighted many of the Army's top
readiness concerns and contributed to addressing these concerns in the
past few years. Tangible results include: increased funding for
recruiting; formation of an integrated process team to review current
chemical-biological defense readiness standards; detailed planning for
Balkans disengagement; and decisions regarding the equipping and
locating of war reserve pre-positioned sets.
d. The JMRR ties together all levels of readiness assessment by
providing a comprehensive analysis of the military's ability to execute
the National Military Strategy. The combatant commanders in chief and
combat support agencies identify readiness deficiencies that are
reported to the SROC each quarter, which results in direct visibility
by senior decision makers. This process has identified several trends
relevant to the Army, i.e., shortages of combat support/combat service
support assets, the need to replace aging equipment, shortages of key
personnel, and shortages of strategic sea and air lift assets.
Admiral Pilling. a. From the Office of the Chief of Naval
Operations perspective, the SROC has been effective in the following
ways:
(1) Visibility of U.S. Navy Readiness issues at the Office of the
Secretary of Defense (OSD) Level.
(2) OSD visibility of joint readiness issues, including those
relating to the U.S. Navy.
(3) Consensus building between Services, Joint Staff and OSD on
implementation of new laws or programs.
b. While it is difficult to identify a readiness issue that was
resolved solely through the Senior Readiness Oversight Council (SROC)
process, it is clear the SROC process ensures senior leadership
visibility on key readiness issues on a monthly basis. As stated above,
the consensus building within the Department of Defense is critical
when dealing with the Planning, Programming, and Budgeting System
process.
c. The key benefit of the Senior Readiness Oversight Council (SROC)
process is the coordination between the Services, Joint Staff and OSD
on issues prior to the briefing. The SROC process allows different
organizations within the Department of Defense to work together on
issues in an efficient and timely manner. Otherwise, issues of
readiness interest could be assigned for group study and be delayed in
committee. While the SROC is not a decision making forum, the
scheduling of a particular readiness issue for the SROC brief
facilitates movement in the decision making process of Service, Joint
Service and Office of the Secretary of Defense leaders.
d. The JMRR process allows visibility of viewpoints of both
operators and planners. At the end of the JMRR Process, operators have
a sense of the relative importance of readiness degradations. The JMRR-
SROC link allows the inclusion of the possible political, budgetary and
fiscal realities. In the end, both processes help military leadership
prioritize the funding and execution of warfighting plans.
For OPNAV, the JMRR and SROC process has been invaluable in
educating the other services and Office of the Secretary of Defense in
the uniqueness of Navy readiness. Navy readiness terms, such as,
Bathtub and Inter-Deployment Training Cycle are now common parlance in
DOD.
General Lyles. a. The SROC brings the senior civilian and military
leadership together in monthly meetings to review significant readiness
topics. Its focus is primarily to provide advice to the Secretary on
matters of broad policy related to readiness. This forum provides the
Air Force and its sister Services the opportunity to communicate our
key concerns to not only keep senior leadership informed but enables
them to take appropriate corrective actions.
b. The SROC is one of several avenues to address both near-term and
long-term readiness issues. Combined with the other forums that include
the JMRR and Quarterly Report to Congress (QRRC) the SROC continues to
help place emphasis on those programs that has garnered significant
gains for the Services over the past two years.
c. The SROC process has highlighted many of our top readiness
concerns and contributed to addressing these concerns over the past few
years. This has resulted in the following: reversed REDUX retirement
plan, efforts to close the pay gap, increases to Depot Program
Equipment Maintenance, increases to Readiness Spares Packages, and $20B
topline increase for the AF for FY00-05.
d. The JMRR and SROC have: highlighted declining unit readiness;
assessed CINCs and Combat Support Agencies ability to integrate and
synchronize units and equipment provided by the Services to meet day-
to-day wartime requirements; and identified appropriate CINC
deficiencies. We have seen a steady improvement in the number of
deficiencies over the past 2 years which is an indicator that the JMRR
and SROC process works.
General Dake. a. In my opinion, the Senior Readiness Oversight
Council has been a highly successful forum for vetting Marine Corps
readiness issues.
b. From a Marine Corps perspective, the council provides visibility
into and assessment of the Marine Corps' unique contribution to the
National Military Strategy. The Council provides a forum to examine
readiness issues and concerns that challenge the services and offers
opportunities for attacking those challenges. Additionally, the council
is a vehicle for the Joint Staff and the Office of the Secretary of
Defense to hear and address Service concerns as they relate to joint or
DOD initiatives, activities, and/or policies.
c. The Marine Corps has been able to bring attention to its top
readiness concerns: recruiting and retaining personnel, the costs of
maintaining legacy equipment, and the need to modernize both our
equipment and infrastructure. For example during the September SROC,
the Marine Corps addressed recent readiness challenges associated with
our AV-8B Harrier community after the Harriers were grounded due to
problems associated with engine production quality, lower readiness
rates, and increased mishap rates. A get-well plan to restore the AV-8B
community's operational health was briefed at the SROC. Subsequent,
SROCs were used to provide updates to the plan as required.
Additionally, the SROC affords the Services the opportunity to voice
their concerns and express their opinions on the potential impacts of
Defense legislation and Joint and/or DOD driven initiatives.
d. The JMRRs and SROCs effectively allow the Marine Corps to assess
its readiness and contributions to joint warfare. In the latest JMRRs,
our personnel readiness was satisfactory as we continued to meet
recruiting goals and put a concerted effort into our retention efforts.
Our ground and aviation equipment readiness remained high, but are a
concern due to the age of this equipment and the rising costs
associated with maintaining it. Aviation training readiness continued
to be a challenge in some units due to maintenance requirements and
aircrew shortages. Training readiness for ground units continued on
track commensurate with unit deployment cycles. Our Maritime
Prepositioning Squadrons continued to maintain a high level of
equipment readiness as the squadrons rotated ships through the Blount
Island facility for their regularly scheduled maintenance cycles.
Department of Defense (DOD) Dependent Schools
Mr. Bateman. More often than we would like, we hear complaints from
parents about DOD schools. But, the news is not all bad-recent news
reports have touted the test scores coming out of DOD schools,
particularly for minority children, as a success story. How does your
service view DOD schools, both overseas and domestic?
General Keane. We believe that the DOD school system delivers
quality education to our soldiers' children in the United States and
abroad, but there are areas that can be improved. Across America, local
school districts need to modernize facilities and upgrade their
instructional technology systems. Likewise, this is also a challenge
for the DOD schools that educate our children. The Army strongly
encourages parental involvement in the schools, which helps to improve
both the system and the results it produces. Some curriculum concerns
voiced by parents relating to materials DOD introduced were
successfully resolved through the school home partnership program.
Admiral Pilling. The Navy views the Department of Defense (DOD)
schools as a key supporter of the installation mission by providing a
high-quality education for the children of our active duty forces in a
drug-free, safe environment. Thus, DOD schools are an important
enhancer of family quality of life on the installation. According to
standardized test scores, students in DOD schools are doing very well
as compared with their counterparts in civilian United States school
districts, especially in terms of minority achievement, and general
satisfaction with many aspects of DOD schools, both overseas and
domestic, is high, according to surveys. While there are always areas
that need improvement, and individual problems at the local level that
need to be resolved, DOD schools, both overseas and domestic, are more
than adequately fulfilling their core mission.
General Lyles. There are 31,000 children enrolled in Air Force
supported schools operated by DOD overseas and in the United States and
its territories. Surveys indicate that concern for the education of
their children is among the most important quality of life issues for
our families. We continue to work very closely with our DOD school
leadership to adequately resource and prioritize for the educational
needs of our children. Significant program improvements have been
achieved in the past year including full day kindergarten programs,
reduced pupil-to-teacher ratios in grades 1-3, and additional manning
for school counselors and psychologists. Our goal is a world class
school system that can serve as a model of excellence.
General Dake. The Marine Corps views both overseas and domestic DOD
schools as supporting the installation mission by providing a quality
education foundation for students in a drug free, crime free
environment, thus enhancing family quality of life.
Mr. Bateman. Are your commanders able to work with school officials
at the local level to resolve issues?
General Keane. Yes. There is a great deal of cooperation between
school officials and the Army installations they serve. The Army has
individuals designated as a school liaison officers who work for local
commanders. The liaisons are responsible for the day-to-day interface
with the military communities and school personnel.
Admiral Pilling. In most cases, relationships between local schools
and installation commanders are strong, but of course these
relationships will naturally vary from one command to the next. Some of
the formalized relationships between commanders and customers and the
school include such things as local councils, school liaison officers
acting as a day-to-day point of contact between school officials and
base commanders, school advisory committees, school adoption programs
and parent-teacher organizations. These contacts enable most issues to
be resolved at the local level. In those cases where a local issue is
reflective of a larger policy concern or legislative remedy, other
forums such as the Dependents Education Council, which consists of
senior representatives from the major commands, serve as avenues for
problem resolution and input to the Department of Defense Education
Activity.
General Lyles. Our parents and commanders are working with school
officials at the community level to forge partnerships toward this end.
We are particularly proud of the active role that parents are taking in
supporting schools. Our commanders are focused on addressing dependent
education issues with school administrators and staff. We will continue
to make improvements in remaining goals including better school system
response to parental concerns, facilities and maintenance, summer
school programs, advanced placement course offerings, staffing of small
schools, and distance learning opportunities. We appreciate the
Congressional support for our dependent schools, which are an essential
element of our ability to attract and retain good people.
General Dake. In most cases, relationships between local schools
and installation commanders are strong, whether they are DOD schools or
are governed by a local education agency. For example, the Joint
Venture in Education Forum brings the state of Hawaii and military
officials together to resolve education issues affecting military
children in the state run school system. Our current relationships with
school officials enable resolution of most issues at the local level.
Mr. Bateman. Considering that military bases are in a partnership
with local communities in places where there are no DOD schools, do you
think local community schools receive enough impact aid money to
provide a decent education for military children? Should DOD provide
more funding to ensure that local schools are properly compensated for
teaching military children, particularly as housing privatization
initiatives place more military children into local schools?
General Keane. Most schools districts do not have enough money to
meet all their needs. Impact aid is a Department of Education function
and the Army would welcome funding increases.
Admiral Pilling. Since this program and its funding are
administered by the Department of Education and given directly to local
school districts, which may each have their own highly localized
funding structures, it is difficult to assess whether each local
community school is receiving enough Impact Aid money to provide a
decent education for military children. However, it is true that the
Impact Aid program, as a whole, has historically not been funded to its
full entitlement and that impacted schooldistricts in a number of
locations struggle to provide a decent education for not only military
children, but for all children attending those schools.This struggle is
often a result of the amount of Impact Aid funding a particular school
district receives, but there may also be other factors unrelated to
Impact Aid at play as well.
Impact Aid is provided not only to school districts impacted by
military children, but also to school districts impacted by other
federal presence, such as for children residing on Indian lands or in
federal low-rent housing projects. Specific Department of Defense
funding to ensure appropriate compensation of local schools for
military family members would be unnecessary if the entire Impact Aid
program was fully funded and all school districts impacted by a
qualifying federal presence received their full entitlement to funds
according to their reported student populations. However, the
Department of Defense has a responsibility to take into account the
impact of its policies and practices on local school districts and to
take steps wherever possible to minimize their effects. For example,
housing privatization initiatives can affect both the amount of Impact
Aid funding support for the local school (where federal ownership of
the land is retained by the federal government, Impact Aid funding
support for local schools is maintained) and also the student
population of the school district (as new housing units are built on
land where previously units did not exist, student population within a
district can increase).
General Lyles. We fully support the Impact Aid Program authorized
by the Congress and administered by the Department of Education. We
believe that this is the most appropriate way to compensate local
communities which are impacted by the presence of military children and
which may be disadvantaged in funding local schools from a normal tax
base perspective. We have conducted no analysis of the adequacy of the
current impact aid funding levels. We would have to defer to local and
State education officials and the Department of Education for an
accurate assessment including the potential impact that housing
privatization may have. At this time, the only impact we foresee with
housing privatization is to increase the number of houses in local
communities that are subject to local taxation, which in turn should
increase the local tax base.
General Dake. The current funding for impact aid appears to be
insufficient to offset the costs incurred by public schools impacted by
Federal entities. For example, Oceanside Unified School District in
California receives on the average $1,040 per military child in impact
aid, while spending $5,670 to educate that child. Analysis of this
nature, by locality could be useful for future decisions.
The Aging Civilian Workforce
Mr. Bateman. Aging workforce: We continue to hear anecdotal stories
about an aging workforce among DOD civilians. The concern is that the
current ``baby boomer'' workforce will retire all at once, leaving
serious gaps of hard to find skill among our civilian workforce. Have
you been briefed on this issue, and does your service have plans to
address it?
General Keane. The Army is fully aware of this issue. In
preparation for the expected losses, we are trying to increase our
entry-level intake to professional, administrative, and technological
occupations through the Army career intern program. The intern program
is designed to prepare employees in these occupations for successful
performance and advancement. In addition, we are now employing more
aggressive and effective recruitment strategies. We are centrally
funding a student career experience program for college juniors and
seniors who may be noncompetitively placed in intern positions. To
compete with private industry, we are offering recruitment bonuses for
engineers, scientists, and computer specialists, as well as accelerated
promotions for engineers, permanent change of station moves for all
interns, and in some cases, advanced in-hire rates of pay. All of these
initiatives will help us grow the leaders of tomorrow, accomplish the
necessary transfer of institutional knowledge, and restore a more
balanced age distribution to our workforce.
Admiral Pilling. As a result of years of downsizing, the Department
of the Navy employs a workforce that is rapidly approaching retirement
age. As the labor shortage intensifies, competition for qualified,
dedicated employees is becoming even more challenging. The Department
of the Navy is committed to improving our efforts and our results in
attracting a workforce that reflects the diversity of our nation and
meets our mission needs.
We are revitalizing our recruiting efforts to ensure that accurate
and effective job information is readily available to a cadre of well-
trained and experienced recruiters. This year, we are conducting
recruiter conferences and training aimed at enhancing our recruitment
efforts at colleges, universities, and career fairs. We have developed
standardized guidelines and materials for use by recruiters, and are
identifying opportunities for sharing resources and best practices. Our
goal is to ensure the Department of the Navy is seen as an employer of
choice by our current workforce and by high quality candidates for our
future jobs.
We are also revitalizing our apprentice programs. During the past
ten years, our apprentice programs slowed down to a trickle. More
recently, the Navy has received additional funding earmarked for
revitalization of the apprentice program.
Finally, we are working with the Center for Naval Analyses to
assess the wellness of our civilian workforce to determine where we are
now, and where we should be heading, to ensure we have the right people
with the right skills in the right jobs to support the Department's
many missions.
General Lyles. Yes, I have been briefed on this issue. The Air
Force does have plans to address it. As a point of clarification, when
we use the terminology ``aging workforce,'' we do not mean
chronological age. We have seen no research to lead us to conclude that
age is a meaningful predictor of knowledge, skills, abilities, or
performance.
Our workforce shaping concept centers on ``the age'' of the
workforce in terms of experience mix and ``the age''' of the skills our
employees possess. First, we are concerned with recruiting and
retaining adequate numbers of quality personnel at all levels of
experience to ensure we have a viable pool of candidates on-board and
available for positions of higher responsibility as today's incumbents
retire. This can be thought of as ``succession planning.'' Second, we
have historically relied on the lateral entry flexibility inherent in
our semi-open civilian personnel system to fill any voids in experience
we may observe. However, the demographics of the United States
professional population as a whole lead us to believe we must begin to
craft a ``grow your own'' policy for sustaining certain segments of our
workforce. Our civilian system needs to evolve toward one which builds
on the best practices of both the current civilian and military
personnel systems. With that as a backdrop, we see an increasing
reliance on workforce analysis and modeling as being critical to
properly framing our policies and programs to meet our needs.
To provide commanders with a state-of-the-art, sustainable civilian
workforce capable of meeting tomorrow's challenges, we have developed a
workforce management strategy which includes the following solutions:
managing our accessions with properly sized force renewal programs;
pursuing legislative initiatives that would help us entice scientists
and engineers from academia and industry to invigorate our research
laboratories; expanding and targeting training and retraining; and
pursuing legislative initiatives for separations management through the
use of buyouts (incentives) for voluntary, targeted force shaping.
General Dake. Yes, I've discussed this issue and the broader issue
of civilian workforce development with the Commandant and his staff. In
fact, the Commandant asked our senior civilian leadership to undertake
a project to revitalize our career development program for civilians
and take a more active role in charting civilian career paths,
providing for skills and leadership development, and planning for
succession. That project is well under way and I believe it will result
in better opportunities for our civilian Marines as well as a more
structured approach to the way we handle workforce planning.
Civilian Personnel Regionalization
Mr. Bateman. Regionalization: DOD and the military services are
completing a civilian personnel regionalization initiative that takes
about two thirds of local base civilian personnel offices and relocates
some of the personnel and most of the support functions to these
distant regions. We have heard some field commanders complain that
service has worsened under this new system. What are your views on this
program?
If you view service as poor under this new system, what should be
done about the situation?
General Keane. The regionalization initiative has caused some
turmoil and changed the way we do business. However, we are now seeing
improvements in the quality and timeliness of service. For example, job
fill time is steadily improving. We are filling a record number of jobs
using fewer personnel specialists. With the development of the Army
Civilian Productivity System (CIVPRO), we now have the ability to
accurately measure fill time. With CIVPRO, we are able to track, down
to the installation level, the average number of calendar days it takes
to fill positions-from the date a recruitment request is received in
personnel, to the date a job offer is accepted. The classification
program has also improved. The backlog has been eliminated and the
classification process is now much more responsive.
The quality and timeliness of service is improving; however, we
believe it is important to consider streamlining command and control of
the entire civilian personnel process to further improve the delivery
of services. In January 1999, a General Accounting Office study found
that there are too many organizational and personnel layers between
customer and service provider. The study also found that standardized
processes and procedures necessary to achieve efficiencies are not
being followed.
A recent Army study reported that splitting civilian personnel
service responsibilities between two separate command elements is not
efficient because the division of work generates differences in policy
application and decreases service consistency. The study recommended
streamlining command and control of regional and installation personnel
centers and unifying installation personnel center command and control
under the Office of the Assistant Secretary of the Army (Manpower and
Reserve Affairs). The Army is interested in exploring the concept of
streamlining command and control of the civilian personnel process.
Admiral Pilling. The Department of the Navy's civilian human
resources community is focused on fully implementing one of the most
ambitious reorganizations of civilian human resources management in the
past 30 years. Looking back, we have made tremendous progress in this
effort. Looking forward, we still have significant room for
improvement.
During the last year, performance standards for our Human Resources
Service Centers were established by the Human Resources Service
Delivery Board of Directors (BOD), which is comprised of Senior
Executive Service and Flag officers representing our largest commands.
When compared to the BOD metrics, we find that performance standards
are consistently being met by six of our eight service centers. We are
actively engaged in helping the remaining two centers to improve
performance to the acceptable level. While any performance shortfall
can be a problem for our field commanders, we are encouraged by the
improved performance of the majority of our service centers, and expect
to see continuous performance improvement in all of our centers in the
immediate future.
Regionalization is working, but is not problem free. Some of our
Human Resources Service Centers (HRSC) have experienced problems
adjusting to the new organizational structure, new standardized
procedures and the tremendous processing workload. We recognize these
problems and are working hard to solve them.
The process of providing regionalized human resources service
delivery was predicated on the availability of new technology (the
Modern System) to be provided by the Department of Defense (DOD).
Deployment of the Modern System has been delayed, and is now scheduled
for completion during calendar year 2000. We are hopeful the Modern
System will significantly improve the quality and timeliness of
civilian human resources services to the Department of the Navy.
It has now been 4 years since we began the DOD-mandated
regionalization of civilian Human Resources (HR) service delivery. We
are accumulating data on performance at each of our service centers,
and see some encouraging trends. To ensure that we continue to pursue
the right path toward excellence in human resources service delivery,
we have embarked on a functionality assessment, which will focus on HR
functions across the Department. We expect to have this process
completed by September 30, 2000.
Regionalization Initiative
General Lyles. Regionalization of civilian personnel services is a
November 1993 Program Decision Memorandum (PDM) directed effort to
regionalize and consolidate civilian personnel processes in exchange
for anticipated resultant manpower savings. A Program Budget Decision
(PBD) required an increase in civilian personnel servicing ratios from
1:60 (one personnelist for each 60 employees) to 1:71, envisioned to be
achieved by regionalizing service. Further, the servicing ratio is
projected to go to 1:88 following modernization of the personnel
information system.
In response to these requirements, workload transition and
realignment of personnel resources to the Air Force Personnel Center
began in August 1996. Regionalization efforts proceeded through January
1999 at which time approximately 48% of the Air Force civilian
workforce was receiving service from the Air Force Personnel Center,
and the Air Force achieved a servicing ratio of approximately 1:68.
However, extensive and ongoing internal assessments, as well as
customer feedback, indicated that levels of service previously provided
had not been maintained.
In order to address customer service concerns, a hiatus from
transitioning further workload to the Air Force Personnel Center was
established in January 1999, and additional personnel resources were
assigned to the center to accommodate the workload already in place. In
addition, customer service functions involving face-to-face contact
with managers and supervisors were returned to local civilian personnel
offices with corresponding personnel resources. These measures resulted
in demonstrable improvements in customer service and the center's
timeliness metrics.
Many challenges remain in order to meet mandated servicing ratios
while providing world class service in a centralized environment. We
are establishing a team specifically dedicated to examining our
civilian personnel policies and practices with a view toward
reengineering them and taking full advantage of economies that can be
gained through the use of technological advances and centralization. We
also continue to review and evaluate the distribution of work and
resources within the Air Force Personnel Center and between that
organization and the local civilian personnel offices in order to
arrive at an optimum operations structure. We are also optimizing our
information management system and making personnel services available
via the worldwide web. We believe that these efforts will help us meet
our customer service obligations as we strive to achieve the DOD-
directed servicing ratios.
General Dake. The concept behind regionalization was based on the
expectation that centralization of personnel processing and other
``back room'' personnel processes could be done with significantly
fewer people and no degradation of service to the customer. Our
experience under regionalization to date has not met that expectation.
In fact, service in such critical areas as filling vacancies in a
timely manner with quality people, paying our civilians properly and on
time, and providing responsive counseling on benefits and retirement
has worsened. In large part, this degradation in service is a function
of reducing the civilian human resources professional workforce before
we had the automated process enhancements in place to make the
remaining staff more effective. The long awaited DOD Modem Defense
Civilian Personnel Data System is still in the testing phase and has
not yet proven capable of delivering everything we expect from it.
We need to take a fresh look at how we deliver civilian human
resources services both at the regional level and local level. If we
find, as I expect we will, some processes were centralized that should
have remained at the local base or station, we need to correct that.
Also, I believe we need to relook at the resource levels for this
function. If our initial cuts were too deep, we should step up and
provide the resource levels we need to make the process effective. Once
we are confident the function is properly resourced, we need to set
challenging measures of effectiveness and hold our civilian human
resources professionals accountable for meeting them. The Department of
Navy has already begun this review in the form of a functionality
assessment of the civilian human resources process. I am hopeful it
will give us the answers we need to give our commanders and civilian
employees the quality service they deserve.
Fuel
Mr. Bateman. The fiscal year 2000 budget assumed significant
savings in fuel costs. As we all know, those assumptions proved wrong
and necessitated a $1.2 billion increaseto all of the O&M accounts for
the coming year. Consequently, each of the services must not only pay
higher costs but the new rates also include a charge to make up for the
too low rate charged last year. What impact are these higher prices
having on your operations and ability to continue to train and maintain
readiness?
General Keane. The increased fuel costs represent decreased buying
power for units, especially those tactical units whose budgets are
under continual pressure from other external forces such as military
airlift costs, which must be reimbursed. Since training has priority,
commanders must decide where to take the funds needed for the
additional fuel costs. The ability to continue to train and maintain
readiness will be achieved by taking risk in other areas.
Fuel, DOD Agencies, And Revolving Funds
Admiral Pilling. When fuel (or any other working capital fund
commodity or service) prices are set by OSD, the Services budgets are
modified to reflect the changed requirements. That is, when fuel prices
increase, our budget is increased to enable us to pay the higher price.
Therefore, our training and other readiness operations are not affected
by changes in fuel prices.
General Lyles. Rates for DLA spare parts are stabilized and will
not change during year of execution. Should rising fuel prices put a
financial strain on DLA, budget rates will be adjusted accordingly.
Transportation (fuel) costs are a small portion of overhead expenses
and therefore not a significant factor in overall spares pricing.
TRANSCOM does not establish rates specifically for spares; each
service's Working Capital Funds (such as the AF Materiel Support
Division) pass a composite rate to TRANSCOM to be incorporated into
overall Transportation Working Capital Fund (TWCF) rates. Although
TRANSCOM's channel costs are higher due to increased FY01 fuel prices,
FY01 TWCF rates are stabilized and the higher costs will be passed to
the customer during budget year vice execution year.
General Dake. Higher prices have had a dual impact. First they have
forced us to look for efficiencies in operating and training. When that
avenue is exhausted, we reduce training in the number of tasks that we
might expect of a Marine rather than reducing the quality of training
across the spectrum. Second, because our sister services are feeling
the same pricing impacts in consolidated and co-located training
environments, they often compensate by reducing support to tenant
units, including Marines. This shifts the cost burden to the tenants,
thereby reducing the amount of funds available for students to attend
the school house.
Effect of Higher Fuel Costs
Mr. Bateman. Have the higher fuel prices affected other
ratescharged in revolving funds the same way, thereby compounding the
effects on strained service budgets?
General Keane. The depot maintenance and ordnance activity groups
in the Army working capital fund projected the cost of fuel during
fiscal year (FY) 2001 to be $2 million more than when the rates were
set in the Fiscal Year 2001 President's Budget. When the cost of fuel
was increased in the budget, funds were added to the customer's
budgets, so that the same amount of training and operations were funded
at the revised price. Revolving fund rates were increased by equivalent
amounts. The total Department of Defense budget was increased by the
amount that fuel costs increased.
Admiral Pilling. Estimated Fiscal Year 2001 Navy Working Capital
Fund fuel costs were projected to increase somewhat over fiscal year
2000 levels, most significantly in the Military Sealift Command
activity group (approximately $29M). Customers were provided additional
funding in order to afford the increased rates.
General Lyles. Fundamentally, the revolving fund concept
accomplishes what it was designed to do and provides the customer
flexibility by absorbing gains/losses throughout the fiscal year. The
working capital fund must break even, not necessarily annually, but
over the long term by recovering losses through future price increases.
Like any functioning system when assumptions do not materialize, you
deal with the consequences. In this instance, the benefit of stabilized
rates and enabling the customer to plan and budget more confidently,
outweighs the time lag problem from stabilized rates to the year of
execution.
General Dake. No, not in the current fiscal year. The revolving
fund both buys and sells fuel at the Defense Logistics Agency's (DLA)
stabilized prices. This ``stabilized rate'' policy serves to protect
appropriated fund customers from unforeseen cost changes such as the
recent fuel price increases.
Effect of Higher Fuel Costs on Spare Parts
Mr. Bateman. Have TRANSCOM and DLA rates for spare parts also risen
as a result of fuel costs rising in the economy?
General Keane. The Department of the Army does not have access to
information to address this issue. The Department of Defense is in the
best position to respond to this concern.
Admiral Pilling. To the best of our knowledge, the Department of
the Navy is not aware of significant cost increases from the United
States Transportation Command (TRANSCOM) or the Defense Logistics
Agency that are specifically identifiable to rising fuel costs. While
it seems plausible that a portion of their rate changes may be fuel
driven, we do not have visibility of the individual cost factors which
were used to build their overall rate change.
General Dake. No, not in the current fiscal year. The revolving
fund budget is based on sales and purchases at stabilized prices. This
``stabilized rate'' policy serves to protect appropriated fund
customers from unforeseen cost changes such as the recent fuel price
increases.
Revolving Fund System
Mr. Bateman. While the revolving fund system stabilizes ratesfor
the year of execution, does this system work well when assumptions do
not pan out and you are in effect stuck for two large bills in the next
year (having to pay this year's high rate and make up for last year's
underpayment)?
General Keane. Department of Defense revolving fund policies and
procedures provide the services alternatives in offsetting execution
year losses. The services can request to spread the required rate
increase over two years to lessen potential program impacts. This gives
the Services some flexibility in offsetting prior year losses. The
system works well in that it protects customers from losing buying
power in the year of execution. Further, through the budget process,
the system facilitates fully funding the customers for budgeted rates.
Admiral Pilling. Stabilized rates play an important role in
preserving approved Department of the Navy (DON) programs by insulating
customers from the adverse effects of changes in costs during
execution. Although there may be significant rate increases in the
future to offset a combination of prior year losses and projected
increases in future Defense Working Capital Fund costs, there is some
benefit to the DON of having the lead-time to prioritize requirements
and realign resources within the budget cycle. If fuel costs were
allowed to fluctuate during execution, the sudden requirement to re-
prioritize requirements and realign resources to fund higher fuel costs
could have a serious, negative impact on DON program and mission
performance.
General Dake. Yes, the current Office of the Secretary of Defense
(OSD) procedures for establishing prices/rates within the working
capital fund business areas and for adjusting customer funding work
well. OSD sets rates/prices at levels required to recover the cost of
products or services provided by a working capital fund business area.
Actual gains or losses realized are reflected in offsetting adjustments
to stabilized rates in subsequent fiscal years. Additionally, during
the budget review process, OSD adjusts customer's appropriated fund
accounts to finance the fluctuations. Thus, the customer doesn't have
to realign funding from other programs during the year of execution to
cover unplanned cost increases. Nor does the customer normally have to
absorb rate/price changes in subsequent years. OSD procedures ensure
customers are adequately funded in the future to cover rate increases/
decreases that result from the unplanned losses and gains.
Mr. Bateman. I was on one of the P-3Cs, land-based P-3Cs, that you
make reference to in your written statement. On at least that one, and
I don't know whether it is characteristic of all of them, the toilet in
the plane doesn't function, and there is some work-around substitute
for it, and some of the most enormously skilled and talented people you
have fly on that plane for up to 12-hour flights during their mission,
and some of them are women, and this is a preposterous result, and even
if it ends up with a scandal of an 800 dollar toilet seat, something
needs to be fixed. Would you look into that for me?
Admiral Pilling. Navy has recognized the need for upgrading toilet
facilities on its P-3C aircraft. A 1994/95 study was conducted with the
requirement that toilet facility options considered be compatible with
both genders, private and secure, usable at all sites, and
environmentally friendly. One option considered from this study
resulted in an Engineering Change Proposal (ECP P-3-423) for
installation of flushable toilets. This ECP was updated recently and
the toilet has now been installed on Customs P-3 aircraft, although due
to cost and length of installation time considerations, it has not been
installed on P-3C aircraft. The study recommended options that were
implemented in 1995 to modify the current P-3C toilet incorporating
privacy and security upgrades. Navy is completing additional reviews of
current Commercial Off the Shelf toilet facility options that may
provide a more cost effective installation, meeting the requirements
above but requiring a less complex and shorter duration installation
than a true flushable toilet. Future modifications will be implemented
to provide suitable facilities for our P-3C aircrews while balancing
cost, satisfaction of flight safety requirements and complexity of
installation considerations.
______
QUESTIONS SUBMITTED BY MRS. FOWLER
Mrs. Fowler. Navy P-3s played a critical role in the Kosovo
campaign, where they performed armed surveillance and reconnaissance,
precision targeting, and strike missions. I recently received the
Navy's brief on this and it was most impressive.
However, the P-3 program remains unsettled today. The Navy was
recently compelled to negotiate a significant restructuring of a major
P-3 maintenance and repair contract, the net result of which will be
the early termination of the Sustained Readiness Program (SRP).
As I understand it, there are currently some 19 P-3 Update III
aircraft that will not now undergo SRP after residing at the
contractor's site for extended periods. These aircraft are in dire need
of depot maintenance. Meanwhile, high OPTEMPO rates have placed a heavy
burden on those P-3s that were not scheduled for SRP. According to my
information, P-3 Commodores on both the East and West Coasts are
wrestling with a severe shortage of flight worthy assets.
The CNO's FY01 Unfunded Requirements List includes funding for
other important P-3 programs, including AIP, but it does not reference
the need for additional O&M dollars for the P-3 community.
Does that reflect the Navy leadership's belief that the FY01 budget
request adequately reflects depot maintenance requirements for the P-3,
or is it just that the final decision on restructuring the SRP program
did not occur until after the CNO's list was completed?
Admiral Pilling. The latter supposition is correct. The
recommendation to discontinue SRP inductions after the 13 P-3s which
were already in process was made in mid-January, 2000 and the stop work
order was not issued until January 21. By this date, staffing for the
CNO's FY01 Unfunded Requirements list was well underway. An agreement
in principle between the Navy and Raytheon was reached in mid-
February--past the February 16, 2000 date of the CNO's report. The
official contract modification was ultimately signed on March 31, 2000.
FISCAL YEAR 2001 NATIONAL DEFENSE AUTHORIZATION ACT--REAL PROPERTY
MAINTENANCE AND INFRASTRUCTURE SUSTAINMENT FUNDING
----------
House of Representatives,
Committee on Armed Services,
Military Readiness Subcommittee,
Washington, DC, Wednesday, March 1, 2000.
The subcommittee met, pursuant to call, at 10:06 a.m., in
room 2118, Rayburn House Office Building, Washington, DC, Hon.
Herbert H. Bateman (chairman of the subcommittee) presiding.
OPENING STATEMENT OF HON. HERBERT H. BATEMAN, A REPRESENTATIVE
FROM VIRGINIA, CHAIRMAN, MILITARY READINESS SUBCOMMITTEE
Mr. Bateman. The subcommittee will please come to order.
And I apologize to our witnesses and to all others that we are
later getting underway than the schedule calls for. My
colleagues have conferences hither there and yon and other, I
am sure, vital business that would deter them from being where
they are supposed to be at this hour. I hope they will be
joining us in great numbers shortly.
I would like to welcome everyone here today to the
Subcommittee on Military Readiness Hearing on Real Property
Maintenance. This is a critical quality of life area with a
funding backlog that continues to grow with no indication that
funding in the future will improve. The committee understands
that the Department of Defense (DOD) does not have a
comprehensive strategy for managing its maintenance and repair
needs. Each military service sets its own standards for
maintaining its property using different methods to assess
property conditions, prioritize repairs, and allocate funds. We
are told that in some cases, bases and major commands within
the services sometimes applied their own assessment criteria
and do so inconsistently.
I must tell you that it baffles me as to how the military
departments can determine their actual needs and make
intelligent decisions about how much money needs to be budgeted
without having a consistent policy. Due to systematic
underfunding, it seems obvious to me that the backlog of
repairs and maintenance can be expected to continue to grow in
future years as has been the case in the past. The transfer of
scarce funds from other readiness accounts will continue to be
necessary.
As an example, records indicate that from fiscal years 1994
through 1999, the services moved $7.1 billion from other
accounts into real property maintenance and base operations
over and above the amount requested and authorized by the
Congress. Although the amount varied between each service,
Department of Defense records show that a portion of this money
was moved from unit training funds, such as flight hours, tank
miles, and steaming days. This, of course, has a direct impact
on readiness. Now, I want to learn from our witnesses what we
can expect in this area in the future.
For the past five years, Congress has been adding money to
the defense budget, only to read in the press that it is pork
that the military didn't ask for and doesn't want. I submit to
you that had we not added over $10 billion to the military
readiness budget during the past several years, the state of
readiness and backlog of real property maintenance would be
much worse than it is.
We are very fortunate to have two panels of witnesses today
who can help us understand the magnitude of the problems in
real property maintenance management and some of the efforts,
hopefully, that are ongoing to improve the situation. The first
panel is made up of General Accounting Office representatives
who are doing research in some of the areas associated with
real property maintenance. I look forward to their testimony to
help us understand the past funding of real property
maintenance, especially the transfers that have been necessary
in this area.
Our second panel is made up of representatives from the
Department of Defense and the four services who work these
problems on a regular basis. The panel can give us insight into
the challenges they face and some idea about how we can all
work toward improving the working and living conditions of our
men and women in the military services. We look forward to
their testimony.
The gentleman from Texas, Mr. Ortiz, and the Ranking Member
of the subcommittee, is detained on some other business and
will be joining us shortly. He has asked that I submit his
written statement for the record.
[The prepared statement of Mr. Ortiz can be found in the
Appendix on page 195.]
Now we will begin with our first panel of witnesses, which
consists of the following General Accounting Office witnesses:
Mr. Neal P. Curtin, Associate Director, and Ms. Brenda S.
Farrell, Assistant Director, National Security Preparedness
Issues, National Security and International Affairs Division of
the General Accounting Office. Mr. Curtin, Ms. Farrell, we
welcome you; and your written statements will be made a part of
the record, and you may proceed in any way you see fit.
STATEMENT OF NEAL P. CURTIN, ASSOCIATE DIRECTOR, NATIONAL
SECURITY PREPAREDNESS ISSUES, NATIONAL SECURITY AND
INTERNATIONAL AFFAIRS DIVISION; ACCOMPANIED BY BRENDA S.
FARRELL, ASSISTANT DIRECTOR, NATIONAL SECURITY PREPAREDNESS
ISSUES, NATIONAL SECURITY AND INTERNATIONAL AFFAIRS DIVISION
Mr. Curtin. Thank you, Mr. Chairman. As you mentioned, we
have submitted our statements for the record and we, actually,
submitted two statements, one that summarizes work that we just
issued yesterday and a report on a movement of funds, and the
other summarizes work we did last year on the overall issue of
the DOD management of the real property maintenance. I thought
what I would do is take a few minutes this morning in my
opening remarks to provide some background and perspective on
those issues and kind of a brief overview of what General
Accounting Office (GAO) has been saying about these issues over
the recent past.
DOD and the military services are responsible for
maintaining more real property than any other entity in the
world. And some numbers that illustrate that, more than 320,000
buildings; those buildings contain about 2.1 billion square
feet of space and include such diverse things as day care
centers, barracks, aircraft hangars, utility generation plants,
supply depots, and such unusual items as piers, and railroad
lines; 1.1 million square yards of pavement for things like
runways and parking areas; tens of thousands of miles of roads
and bridges. All of those items have a plant replacement value,
a total value, that is upwards of $1/2 trillion; that is over
$500 billion.
Most of the funds to operate and maintain those facilities
come out of the operation and maintenance accounts;
specifically, through base operations and real property
maintenance sub-activities. So maybe a couple of definitions
there would be helpful. Real property maintenance funds are
used to maintain and repair all those myriad facilities and
structures. DOD and the services have been spending about $5
billion annually out of this real property maintenance area.
Base operations, on the other hand, funds the services that
provide the basic operation of the installations; things such
as utilities, base communications, snow removal, security, and
morale, welfare and recreation activities. And base operations
funding runs in the range of $12 to $13 billion annually in
recent years.
In a 1997 report, GAO talked a little bit about what has
happened to the DOD facilities since the post-cold war
drawdown. And what we said was that the reduction in forces and
in spending in real dollars in DOD was reduced by 30 percent or
so, been roughly a 30 percent reduction. But DOD facilities
worldwide in terms of the numbers of installations have only
been reduced by about 21 percent. And in fact, in terms of
square feet of installations, the reduction has only been about
10 percent. But during that same time, the real property
maintenance funding was reduced by about 40 percent, a much
greater cut than the space reductions.
So this is part of what has led to the backlog in
maintenance and repair projects that you refer to. In our work
last year, we reported DOD's latest estimate of the backlog. It
had grown from about $8.9 billion in 1992 to $14.6 billion in
1998. And I think it is safe to say that that backlog has
continued to grow since then. Nothing has happened in the last
year-and-a-half that would have reduced that backlog.
In that 1997 report, we recommended that DOD establish more
consistent criteria and facility condition data, as you
mentioned, use those tools to establish a better strategic
approach to facility management and make sure that unneeded and
obsolete facilities were being demolished to save operation and
maintenance funds. At about the same time, and for several
years, we included the defense infrastructure management area
in our GAO high risk series among the government programs that
we consider most vulnerable to fraud, risk, abuse, and
mismanagement. In this case, the reason for including it on the
list is because of the excess capacity and the lack of an
overall facilities management strategy. There really is a risk
of losing the value of those facilities.
In September of last year, then we reported again on real
property management and, again, we cited the inconsistencies
that still existed in the policies and practices among the
different services and, again, the lack of an overall DOD-wide
strategy. In fact, we went so far as to say in that report--and
I will quote from that--without an overall management strategy,
the services real property maintenance is in disarray. We
reported that the services were funding only a portion of the
facilities maintenance requirements, thus allowing the backlog
to continue to grow. And we made several recommendations aimed
at improving the DOD-wide approach and strategy for real
property maintenance. And we understand that DOD has taken
recent action to implement some of those recommendations.
We have been briefed on some of what DOD is doing and,
clearly, they have initiated some promising activities and
approaches. And it is still a little early to make sure they
are going to work; implementation is always the key. It is
easier to start some of these initiatives than to complete
them. But I do feel comfortable in saying that, you know, at
this point, DOD has been responsive to our latest report.
Against that backdrop, the Fiscal Year 2000 Defense
Authorization Act mandated GAO to study various aspects of real
property maintenance and base operations funding. The overall
concern that the conference report expressed is with the impact
of all this on readiness. And specifically, we were asked to
look at four things, and one of them is the movement of funds
by the services into and out of the real property maintenance
and base operation sub-activities after the initial
Congressional action. Second, the impact of the movement of
these funds on unit training and quality of life issues. Third,
the backlog of maintenance and repair and the impact that it
has on readiness. And finally, DOD's management structure and
process for handling facility management.
The report issued yesterday focuses on just the first
aspect of the act, dealing with the movement of funds. And I
think we need to work with the committee and with the Senate
side as well to decide what issues to pursue next and what
priorities are going to be coming out of this hearing and any
action this year.
Regarding the movement of funds, let me just quickly
summarize the report we issued yesterday. During 1994 to 1999,
the period we are asked to look at, the four services--and this
is the active component only--moved about $7.1 billion into
base operations and real property maintenance over and above
the $88.6 billion that Congress originally designated for those
areas. That is about an eight percent increase over that
period. The largest movement of funds was in the early years of
that period, with the Army and Air Force moving the largest
amount and the largest percentage of funds. Almost three-
quarters of the increase was for base operations, with the
remainder going for real property maintenance.
While it is difficult in DOD's system--in fact, you really
can't do it in DOD's system--to directly track where the money
comes from and where the money goes in the operation and
management (O&M) accounts, we did want to try to get a handle
on what was happening during this same period for unit training
because the concern we had is that money was moving from
training into these real property and base operations areas.
And we found kind of a mixed situation there for unit training.
The Army was the only service that consistently had a net
movement of funds out of unit training, and they had movement
into base ops and real property maintenance. From 1997 to 1999,
for example, the Army obligated about $1.1 billion, or about 12
percent less for unit training than Congressionally designated.
The Air Force moved funds out of training in the early years of
our study, 1994 to 1995, but they actually moved greater
amounts into training in the last four years. And the Navy and
Marines consistently moved funds into unit training, about
eight percent above the Congressional designations. So the
picture there is not clear in all the services.
DOD has considerable discretion to move funds among these
sub-activities; and in many cases, Congress is notified of
these movements. And some degree of flexibility is important, I
think, in letting the services adjust to changes that occur
during the year. At the same time, though, it is important that
good, consistent judgments are being made to assure that funds
are going to the most important activities and the most needed
areas. And this is where the overall policy and strategy needs
to come into play. That is where it is important, if you have
that baseline, then you have better assurance that the money is
moving in the right directions.
A couple of comments to conclude here on readiness and the
implications of the movement of these funds for readiness. I
want to reemphasize that we have not drawn any conclusions at
this point about the effect of this movement of funds on
readiness. Moving funds into base ops and real property
maintenance by itself doesn't automatically mean that readiness
is being degraded by that movement for a few reasons. Most of
the funds that we saw moving went into the operating forces
budget activity, which is the main, most closely associated
with readiness, the main activity. And a lot of those funds
would go for things like repair of runways, or repair of
maintenance facilities, that could have a direct positive
impact on readiness and may be very good decisions.
Other funding could improve the quality of life or morale
welfare and recreation activities that would have an indirect,
but still, could have a positive impact on morale and
readiness. Even the movement of funds out of training doesn't
always imply a degrading of readiness, although it is a
concern, certainly. Training efficiencies during the year may
have reduced the need for funds, or some training may have been
cancelled, freeing up funds for other priorities. Those are the
kinds of details that we would really need some extensive study
to get a good handle on, and that is one of the things we need
to talk about for future work.
Let me stop there, and I hope that overview has been
useful, and I would certainly be glad to take any questions.
[The prepared statement of Mr. Curtin can be found in the
Appendix on page 198.]
Mr. Bateman. Thank you, Mr. Curtain. As is apparent, we are
now joined by our distinguished Ranking Member, Mr. Ortiz,
whose statement has been made a part of the record. But if you
have any comments you would like to make, they are welcome at
this time.
STATEMENT OF HON. SOLOMON P. ORTIZ, A REPRESENTATIVE FROM
TEXAS, RANKING MEMBER, MILITARY READINESS SUBCOMMITTEE
Mr. Ortiz. No. I just want to take this opportunity to
welcome the witnesses this morning, and I am sorry I was late.
I had a prior meeting, but I am happy that you are here. And I
hope to learn something from you, and I know that we will.
Thank you, Mr. Chairman.
Mr. Bateman. Thank you, Mr. Ortiz. Ms. Farrell, do you have
any comments that you would like to offer before we begin
questions?
Ms. Farrell. I will be happy to take any questions on our
report that was issued just yesterday and build upon what you
would like to address.
Mr. Bateman. Very good. Well, let me try the generic
approach to the problem we are wrestling with. It is apparent
to me from what you have said, that we just can't sit here and
point fingers, and say you moved lots of money from here to
there without knowing the policy and the rationale that
underlie why you moved the money from here to there.
But it also occurs to me that if there is no Department of
Defense-wide standard or criteria by which each of the services
is held accountable for managing the maintenance of its real
property, we are losing a very important management tool and
coming to grips with how much is vital and how much is
essential to see by some measurable, general criteria or
standard of looking after our public assets that are held by
the Department of Defense.
It also occurs to me that we perhaps need some inventory of
Department of Defense assets, real property assets which have
reached a point where it may be a lot more efficient to provide
the funding to demolish them than it is to continue to maintain
them. And we ought to be, perhaps, developing an inventory of
such facilities in order that we can see that we appropriately
fund it in order that we can achieve over time the savings that
can be put into doing other things that are more important.
The bothersome thing about this is I am hearing you, Mr.
Curtin, say that in some instances we have taken money from
training and put it into real property maintenance. In other
instances, I am hearing you say that we have done the reverse.
And I don't know whether to be mad at somebody for doing one or
mad at somebody for doing two; but don't we need some way that
we can get a handle on where the money is moving and why it is
moving that way if the Congress really is going to play in the
orthodox traditional role in the formulation of a defense
budget, which under the Constitution, it is our essential
responsibility to do?
Mr. Curtin. Yes. The best tool right now to get any kind of
handle on this, and we tried to use it in the work we did this
year, are the high priority readiness reports that the
committee has required DOD to provide. But they are anecdotal
for the most part, and they don't always talk about the impact
on readiness. They will tell you which account money moved from
and which account it moved into, but it is hard to get a good
feel that that was a good judgment, that yes, it moved from an
area that the need was less into an area where the need was
greater.
And that is the best thing that is out there right now, but
it is still inadequate to really do what you are saying, to
really be comfortable that the Department is being a good
steward of these funds and a good steward of the properties.
Brenda, I don't know if you have--
Ms. Farrell. I agree. The value of the priority readiness
reports was evident in the report that we issued a couple of
days ago on the movement of all O&M funds, where we identified
the 43--
Mr. Bateman. Pull the microphone closer, please.
Ms. Farrell. Yes, sir. Can you hear me now, Mr. Chairman?
Mr. Bateman. Yes.
Ms. Farrell. I was saying that I agree with the value of
the high priority readiness reports, and those reports have
been most helpful. And the other report that we issued earlier
this week, looking at the total movement of O&M funds, where we
identified $43 billion that had been moved between the period
of fiscal year 1998--it was 1994 through 1998. Those are for
selected activities. Those are areas that Congress has
designated to be of high priority readiness. Those reports
should continue, but DOD could be encouraged to maybe elaborate
on the detailed explanations for the reasons for those
movements.
Mr. Curtin. And again, if the Department and the services
had a better overall strategy and some overall consistency in
the way they do things, you could feel more comfortable about
the movement of these funds. But right now, I don't have that
comfort level at all.
Mr. Bateman. Is it realistic for the committee to, in the
Defense Authorization Bill, to include a provision directing
the nature and type of some new reporting so that the
Department of Defense, all the services, and the committee
could have a better handle on the policy decisions about
movement of funds?
Mr. Curtin. I am reluctant, I think, to recommend more
reporting from DOD. I think Ms. Farrell's idea of making the
current high priority readiness report more useful would
probably be a good way to go. And again, I think you made a
very good point earlier about the data. And we have said that
in all the work that we have done, that DOD just doesn't have a
good handle on what its facilities inventory is and the
condition of that. That is the starting point. Until you have
that, it is hard to be comfortable that the funds are moving to
the right place, no matter what reporting we do, I guess.
Mr. Bateman. I hate to use the onerous term, reporting,
because we get more reports now than we can read. But I am
interested in data, and strike the word report--
Mr. Curtin. I understand.
Mr. Bateman.--and say, do we need to require in some
uniform methodology data from the Department of Defense and
each of the services in order that they, as well as we, can
look at it to measure the extent to which there is a problem
and how to best get a solution to the problem?
Mr. Curtin. That may be something to look at, Mr. Chairman.
I don't have a good comfort level right now to exactly what the
best data would be for you to get, but we can look at that. I
mean--
Mr. Bateman. I am going to ask you if you would look at it
and give me the benefit of your thinking on it. I have not sat
here and listened this morning, and all of a sudden, had a
blinding flash of rationality that tells me I know exactly how
to fix this problem; but the Secretary and all of the services,
I think we all have got to be looking at a better way that we
can look at a set of data and be able to come to better
management decisions. And so I am earnestly soliciting your
help in doing that. Mr. Ortiz.
Mr. Ortiz. Since Mr. Sisisky has been here waiting longer
than I have, I will yield to Mr. Sisisky.
Mr. Bateman. That is sure generous of the ranking member,
and I am pleased to--
Mr. Sisisky. And I appreciate he didn't mention age either
so that makes me feel a little better today. Isn't the problem
money? Money is the problem. Every time we have a contingency,
something comes down from the Pentagon, cut the base ops 20
percent or 30 percent. Isn't that really the problem?
Mr. Curtin. The services tend to put the money into
operating tempo (OPTEMPO). You are right. And whatever is
leftover tends to go to--
Mr. Sisisky. And then we don't know when they have a
supplemental, whether it goes back in, and I am willing to bet
it doesn't. We have been cutting base ops for so long it is
just beyond belief, you know. How do you get data on it, you
know--you can't. I think that is the real problem. And you
know, we can fence the money. We do it in military
construction. If we appropriate money, authorize money, for
military construction, that is what it is used for. And I don't
think even in the contingencies they can take out of that fund.
And maybe that is what we have to do.
I mean, sometimes we have a problem and we look for
difficult answers to it, but it may be simple answers to it.
But that doesn't solve the problem as I see it now, because we
are so far behind, and getting behind, in real property
maintenance that it is beyond belief. It will never catch up. I
mean, you know, that is why I said, money, everything is money.
As a matter of fact, the Chairman mentioned about destroying
buildings. We did have a fund for that. I know in a shipyard
that I represent, man, we are tearing down buildings as fast as
we can get them--amazing amounts of money being saved. You
don't heat them, you don't have to repair them, you know, all
of these things. That is the way to do it, but fence the money.
If we can find a way to fence the money in there, that they
can't put their hands on it--I don't know how the gentlemen in
uniform can even manage what they do to be very honest with
you, not knowing what is going to happen.
Let me ask you another question. I also notice a trend to
privatize public works in areas. Has that had any effect? Did
you take a look at that to see about the maintenance?
Mr. Curtin. I haven't tried to make that connection, no.
Mr. Sisisky. I may ask the military people whether they
have seen anything on that.
Mr. Curtin. They may have better information on that.
Mr. Sisisky. Because you know, when you have to let a
contractor fix the sewerage, you may say, let it go. We don't
have the money there. But if you have got the people there in
public works, they may fix it, you know. I am just thinking out
loud. But no matter what you do, and no matter what criteria,
and no matter what strategy is taking place, you still have got
to have the money to do it, and it has to be consistent. And
some of these bases are just reeling from the problems of base
ops and other things, because 20 percent cut, on a 20 percent
cut, on a 20 percent cut, and it just goes on and on.
Mr. Curtin. The only caution I would make, the only comment
on that--and I agree, ultimately, you have got to have money to
make this work--but we would sure like to see a better handle
on just what facilities we have, and the condition they are in,
and something more consistent across services, so that money is
going to the right places. If you want to provide additional
money, that is fine, but make sure it goes to repair the
facilities that need it the most. And I am not sure right now
DOD could know that because of the lack of this--
Mr. Sisisky. Well, it isn't just a lack of that, a lack of
accounting system that would--I mean, let us be honest, you
know. I hate to say it out loud, but--
Mr. Curtin. So there is a lot of data problems in DOD.
Mr. Sisisky. Thank you, Mr. Chairman.
Mr. Bateman. Thank you, Mr. Sisisky. And now, Ms. Fowler.
Mrs. Fowler. Thank you, Mr. Chairman. And thank you, Mr.
Curtin, for being here. This is an interesting report, and I
share the concerns that have been expressed already by the
Chairman and Mr. Sisisky, because we go around to these bases,
and we see the facilities and the problems, and money that is
not getting spent where it needs to be, and it is our young
peoples' quality of life that suffers so often. And then we
wonder why we are losing them in the process.
And I noticed in going through your survey, that you
surveyed about 517 bases and major commands, and pointed out
that the major commands only requested funding for about 20
percent of their known real property maintenance needs in
fiscal year 1997, and they were funded at an even lower rate.
Did you determine why these major commands were requesting so
little of their required funding? Is that same practice still
going on today as far as the requests we are getting from the
major commands? And is this indicating that maybe the backlog
is even greater than what they are showing us on paper?
Mr. Curtin. I think--on the first part of your question, I
think the major commands have put their emphasis on OPTEMPO,
and the traditionally funded tank miles, and airplane hours,
and steaming hours, and those get the funding that the services
compute that are needed; and they work from there. And
probably, the lowest priority for funds becomes the real
property maintenance and the base operations. They feel they
can squeeze those, defer as much as possible, and then fund the
OPTEMPO. And I don't see that changing anytime in the future if
it is left to the services.
In terms of the backlog, this backlog of maintenance and
repairs is an interesting area and; clearly, the numbers have
been growing. But again, what I am afraid of is that a lot of
the facilities in that backlog are things that, as Mr. Sisisky
said, really should be torn down. And we have been carrying
them on the books and we have been spending operations and
maintenance money on them. And we can't get a good handle. It
is another area where the services are inconsistent as to how
they define that backlog and what is a critical backlog versus
deferrable types of backlog. They have several different
categories that the services use. And no one that I know of has
been able to state with any comfort level that that number is
any good.
Now, we talked about the 15 billion backlog. That is DOD's
number. I would definitely call that an unaudited number. GAO
has never had a chance to get a good look at that number, but
as you say, the accounting systems, in general, are
problematic. So I don't have much confidence in that number.
Mrs. Fowler. This is what is so distressing, because at a
time when all of us on this subcommittee and on this committee,
really, are trying to get more dollars into our defense budget,
because there are critical things we need, when time and again,
things like this are shown where the Defense Department is not
using good accounting practices, you can't find an audit trail,
where the money is going. You can't document what the needs
are. It makes it very difficult for those of us who are
proponents of trying to get more funding into defense to defend
that. And we somehow--any suggestions you can give us, because
I know that is what the Chairman is looking for, how to hold
the Pentagon's feet to the fire.
And we keep being told this year after year, oh, we are
putting these good practices in, we are changing this system.
And it still isn't being done. I looked at this list of some of
the current promising practices that they are trying to do but,
yet, not all of the military services have implemented these;
and they have got a long way to go. So I think what we are
looking for is what can we do to hold their feet to the fire.
We set these accounts, we put the money in, they move it
anyway.
As I said, we get these reports. Reports don't mean a hill
of beans, because they are still going to move it where they
want to move, use it how they want to use it, find ways around
it. Anytime you do a law, there is always a loophole to it. And
so it is very frustrating to us and frustrating to the people
we deal with on a daily basis out on these bases that are
struggling to keep them up. And we say, well, we have sent this
amount of money. Well, they sure aren't seeing it.
So any suggestions I think we can get from GAO on how to
better get a handle on this, and how to get this Defense
Department to be more accountable and more receptive to the
need to do that, because we can't just keep putting the money
in when it can't be accounted for. We want to put it in, but we
want to get it--you know, we have got to show just like any
business in this country, that it is being spent wisely, and
accounted for, and auditable, and we know where it is going. So
thank you for what GAO is doing, and we just appreciate any
further advice and assistance you can give us on this. Thank
you.
Mr. Curtin. Thank you.
Mr. Bateman. Thank you, Ms. Fowler. Before I recognize Mr.
Ortiz, let me try to get something clarified. As I recall what
is in your statement and your testimony is that this is not a
phenomena, that all the money that gets moved around gets moved
from tank miles, steaming hours, flying hours, to real property
maintenance and base operations support. Sometimes that
happens, there are some where that has occurred. But more often
than not, it is the reverse, where real property maintenance
funds go into augmenting operational accounts and doing
operational requirements.
Mr. Curtin. Well, it is interesting the way I think it is
working, as best we can piece it together, is I think in the
budget process and the budget buildup, real property
maintenance and base ops, are getting a fairly low priority and
the OPTEMPO, and tank miles, and things are getting the
priority. But what we saw in terms of movement during the
course of the year is that most of the movement, the net
movement--there are ins and outs during the year--but the net
movement is into--is back into base ops and Real Property
Maintenance (RPM), because it was the lowest priority and was
underfunded to begin with.
And, in fact, you see kind of a pattern where early in the
year money seems to be pulled out of base ops and RPM and used
for training events or special things that come up that need
funding. And then toward the end of the year the money moves
back as the services found out they couldn't execute their full
training program, or contingency money came available during
the course of the year. Money moves back into these RPM and
base maintenance accounts, and that makes it a harder
management problem for the installations and for the commands
as well, because they are never quite sure through the course
of the year how much they can count on.
And a lot of their funding tends to come at the end of the
year, a lot of the increase in funding is towards the end of
the year and they have to make some quick decisions on what
facilities will get the priority. So it is a difficult
management task. I mean, you talk about the frustration of the
installation commanders, there really has to be a high level of
frustration. And we feel that as auditors, we want to get our
hands on some hard numbers. But certainly the installation
people feel it the worst.
Mr. Bateman. Well, I am sure they do, and their frustration
is even more important than my frustration. But I certainly
have a lot of frustration, because I know that during the
period that I have chaired the subcommittee, we start in the
authorization process that we are responsible for primarily,
with we are going to fund what is said to be necessary for
every steaming day, for every tank mile, for every flying hour
that is necessary for training purposes. That has been just an
article of faith in the way we approach putting together the
authorization bill. And yet, that doesn't necessarily mean that
is what happens to it at the end of the day.
Mr. Curtin. No.
Mr. Bateman. Okay. I am sorry to be taking--
Mr. Curtin. On that point, they don't pick on the Army so
much, but the Army, in our data at least, seemed to be the
service with the most movement out of unit training for
whatever reason; and we would like to get behind that a little
bit.
Mr. Bateman. It might be something like Bosnia and Kosovo.
Mr. Curtin. Well, that would do it, yes. That gets your
attention.
Mr. Bateman. Mr. Ortiz.
Mr. Ortiz. Thank you, Mr. Chairman. Now, my question would
be what benefits do you think would result from the presence of
the DOD-wide strategy for addressing the RPM crisis?
Mr. Curtin. Well, I think because the funds are so
limited--and maybe we can find a way to get more money into
that--but with the limited money, we have got to be sure that
money is going to the facilities, and the installations, and
the specific activities within that installation that are the
highest priority based on a lot of factors. I mean, based on
how important they are to the mission and, you know, what kind
of condition they are in.
Without some kind of coherent plan across the department,
you may--see, what we see is buildings being classified one way
in the Army and completely differently in the Navy. And we look
at them, and most experts look at them, they say they are about
the same condition. So where do you put your money? And until
you can come up with something more consistent, you don't have
a good handle on where you should spend that next dollar to
have the best impact on our facilities across the board.
Mr. Ortiz. You know, and maybe this should be a question
for the next panel, is there a central depository where the
different agencies, the services, report as to the building in
each command that should be destroyed or have no useful
purposes? And like Mr. Sisisky just stated, where we can save
money by demolishing those. Do we know what we have around the
different military bases?
Mr. Curtin. Well, I think the next panel can talk about
that in more detail, but as it turns out, that is one area in
which DOD, I think, has gotten its act together a little
better, based partly--maybe I can give some credit to GAO
here--our 1997 report put a lot of emphasis on that, and I
think as a result of that, there is a special fund now and
plan. DOD has a pretty good handle on what they want to
demolish, the numbers of buildings, the number of square feet.
I think they are fairly well into that program now and they
have got a target date. I mean, that is one of the places where
they have tried to get a better handle on it and they are a
little farther along. I feel a little better about that area
now.
Mr. Ortiz. Thank you, Mr. Chairman.
Mr. Bateman. Thank you, Mr. Ortiz.
Mr. Hansen.
Mr. Hansen. Thank you, Mr. Chairman. I really don't have
any questions for the GAO, but I do have some questions for the
next panel. My problem is that I have to go a resource meeting
in a couple minutes. So I would ask that I could submit these
written questions to the Army and the Air Force, which I feel
very strongly about. Would that be--
Mr. Bateman. That certainly would be in order. And I
understand the unfortunate conflicts that we have. But yes, any
questions you may have can be submitted for the record.
Mr. Hansen. Thank you.
Mr. Bateman. Let me mention before we bring forth the next
panel that I have been furnished with figures from the unfunded
priorities list from each of the military services for real
property maintenance for fiscal year 2001. For the Army, this
says $250 million; for the Navy, $136.6 million; for the Marine
Corp, $49 million; and for the Air Force, $437 million; which
totals $873.3 million.
That figure, as large as it is, is woefully less than what
I had been told is the outstanding backlog of real property
maintenance. Is this, at least in part, because one of the Vice
Chiefs of Staff of one of the services said to me almost with
an approving tone, gee, this year's budget funds 69 percent of
our real property maintenance requirements.
Can we have confidence that these figures do, indeed,
represent the only unfunded priorities of each of the services
for real property management? I don't know whether the GAO
panel has any response to that, but it is sort of forewarning
the next panel that we would like to hear from you.
Mr. Curtin. It may also be a rhetorical question, Mr.
Chairman. I don't know how it could represent all the needs.
Mr. Bateman. Does anyone else have a question? Mr. Smith,
any questions of this panel? All right. If not, then thank you
very much for your testimony and for your important work that
you have done for GAO and, especially, for this committee.
Mr. Curtin. Thank you. I look forward to continuing to work
with you.
Mr. Bateman. Our next panel of witnesses consists of Mr.
Randall A. Yim, Deputy Under Secretary of Defense for
Installations; Major General Robert L. Van Antwerp, Jr., Deputy
Chief of Staff for Installations and Housing for the United
States Army; Rear Admiral Louis M. Smith, Commander, Naval
Facilities Engineering Command and Chief of Navy Civil
Engineers; Major General Earnest O. Robbins, II, The Civil
Engineer of the United States Air Force; and Major General
Harold Mashburn, Jr., Assistant Deputy Chief of Staff,
Installations and Logistics for the United States Marine Corps.
Secretary Yim, we would be pleased to hear from you. Your
full statement will be made a part of the record, and you can
proceed in such manner as you choose.
STATEMENT OF HON. RANDALL A. YIM, DEPUTY UNDER SECRETARY OF
DEFENSE FOR INSTALLATIONS
Secretary Yim. Thank you very much, Mr. Chairman. Good
morning, Mr. Chairman, Mr. Ortiz, distinguished members of this
committee. I want to thank you for the strong support of the
military program, to provide it, and the strong support for the
people that are defending our country, both military and
civilian. I also want to, particularly, thank you and my
colleagues at GAO for your recognition of the important role
that installations and infrastructure plays in maintaining
readiness, and of the interrelationship between the many
components of readiness and installation.
Military installations, in our view, are the foundation for
a strong national defense and the platforms from which our
forces successfully execute their very diverse missions. We are
aware we maintain and deploy weapon systems, and where we train
and mobilize for combat; in short, we are the foundation for
the projection of power whenever and wherever needed. But
installations are also where our military and civilian people
live and work and where they become key members of the
communities. And real property maintenance is absolutely the
key for us in maintaining that foundation. We have to maintain
the facilities that they support, not undermine or compromise
our missions or quality of life.
In short, I am really just saying what you already
recognized, that there is a crucial relationship between
readiness, and training, and missions, and weapon systems, and
the quality of life, and the condition of our facilities, and
that we have to recognize these relationships and take the
appropriate steps to maintain and improve the condition of our
facilities. And we are, frankly, talking a bit more than money.
But please don't take my comments wrong, money always helps.
Our great task is to become more cost efficient as well as
enhance the performance of our facilities to support the
military missions.
So not only must we maintain proper funding levels for our
facilities, but we have an obligation to spend that money more
wisely and as efficiently as possible. We are continually faced
with the stark reality of having to balance facility funding
needs with other priorities, such as weapons, recapitalization,
and modernization, research and development, and quality of
life, and other requirements. So we have to not only make the
best use of the funding we do receive as a result of this
difficult balancing process, but we need to find ways to cut
our costs and save money that can be used to support our other
major programs as well as installations.
And when I talk about cutting cost, I am not talking about
blindly cutting cost or blindly closing facilities. I believe
that when we are talking about cutting costs, it is
inextricably tied to finding better ways of doing our business,
because these process improvements are really the key, I think,
to the long-term savings that we hope to achieve. And finding,
however, these process improvements involve change, and this
change can be very difficult for us. But there it is also a
time, as my colleagues in the military will indicate, of great
change in the military. Our services are really substantially
reshaping their force structure and operational constructs to
meet the challenges that they are facing now of asymmetric
threats, of home land defense, of specific targets against non-
traditional areas like our computer information management
systems.
And so, too, must the installations match up, reshape, to
support these mission requirements. We have to be as adaptable
and multi-faceted as the military is going to--we have to adopt
better business practices, we have to become interoperable as
the military is trying to be with our allies. So we cannot
afford, both on a monetary sense and in a mission sense, to be
physically isolated either technologically or physically from
the communities in which we operate. For example, by creating
proprietary systems of installation management that are
incompatible with the rest of the world or commercial off-the-
shelf applications.
We need to recognize this and then take steps to assure
that installations are viewed as integral parts of the new
weapon systems that we are fielding and the training missions
that we require. We can't afford to field these new leap ahead
technology weapon systems but lack the installations or
platforms to support them. We cannot ask our people to perform
these complex new missions without the facilities to house and
train them, and this is precisely the reason why you will see
all of us here in installations playing an important role in
the upcoming Quadrennial Defense Review (QDR) process. We must
prepare ourselves to have an important role in the QDR in May
2001 when it will come out. And as importantly, we have to have
the proper analytic tools available to us to be able to
intelligently participate in the Quadrennial Defense Review.
So one of the things I am talking about is just as we seek
leap-ahead technology for weapons platforms, we have to find
leap-ahead training and knowledge management techniques for our
installation commanders. But to meet these cost efficiency and
performance enhancement goals that we have set, we have to
spend some of our money and intellectual capital on devising
new and interactive ways to learn about these very complex
installation management issues that we face, such as utility
and housing privatization, such as energy deregulation,
outsourcing. And I think that we have pioneered in the military
these wargaming scenarios. Perhaps there is something like
that, that we can also pioneer and just disseminate into
complex installation management techniques out to the field, on
the field commander to rely upon.
Now, we are really committed to reshaping the installation
infrastructure through several related initiatives, and I am
going to briefly touch on a few of them. They include the
privatization of our housing and utility systems. We need to
manage our energy much, much better. We spent $2.2 billion on
energy commodities alone. There is a lot of money to be made
there. We need to outlease some of our underutilized
facilities, not dispose of them, but perhaps make better dual
use of them. We need to competitively source, rely on the
private sector, frankly, for a lot of our noninherently
government functions. And we have to improve the standards of a
lot of our critical facilities like barracks and dormitories.
And of course, we do need additional rounds of base closure.
The Department must be able to pursue all of these initiatives,
because they really complement each other, and no single one
replaced the other one.
Let me talk briefly about Base Realignment and Closure
(BRAC). The argument that we are making for BRAC I think is
relatively straightforward. We are simply wasting money on
maintaining facilities and bases, excess capacity that we
neither use now or have a need of for the future. And while we
can debate the magnitude of the cost savings, there is little
doubt that we have achieved savings during the first four
rounds of BRAC. Our estimates of about $14.5 billion by 2001,
and about $5.7 billion every year thereafter, were actually
called reasonable and credible by the CBO and the GAO.
But I want to emphasize that when we talk about BRAC, we
are talking much more than just a comptroller-driven drill
here. We need the authority to really realign and reshape our
installation structure to meet the rapidly changing force
structure in mission requirements envisioned by the Army, for
example, in vision 2010, or the Air Force in the aerospace
expeditionary force concept.
The 1997 QDR talked about the need for two more rounds of
base closures. Our December 1999 mobilization report that we
submitted to Congress said that we had not closed assets that
we could not reconstitute or really made some--we did not make
fundamentally unsound decisions in the four prior BRAC's.
And most importantly, what we are talking about, if we are
proposing BRAC rounds in 2003 and 2005, we can then take
advantage of installation's role in the 2001 Quadrennial
Defense Review to really have a plan on how the installations
need to match up with the changing force structures and act
accordingly. We are on the path for demolition. We have set
targets by 1993, to demolish over 80 million square feet. We
are more than half-way on that path, and we are actually under
budget right now on the cost of demolition. That is probably
not going to maintain, because we are kind of picking off the
easy stuff to demolish, and it is going to increase a little
bit; but we are going to meet that 80 million square feet. And
as Congressman Sisisky and others have mentioned, it is going
to be a big benefit for us. We just don't need to maintain that
stuff.
We do have to also stretch our RPM dollars by adopting
these best possible business practices, and we have to tap the
best brains, not only in the private sector but also within our
very strong public employees. And so we have to really make a
strategic decision, who is in the best position to supply us
with basic goods and services, not only now but into the
future. And we believe that privatization or competitive
sourcing, the competition aspect is not only the best way to do
that but also the fairest way to do that. That is why we are
aggressively seeking privatization of our utility distribution
systems combined with effort toward better energy management
and getting better deals in the energy commodity market,
particularly with so much deregulation going on throughout the
country.
That is why we are pursuing housing privatization, relying
on experts in the private sector to help us meet a really
critical family housing shortage. We have over 200,000
inadequate family housing units. We just wouldn't be able to
fix that within a reasonable period of time using just MILCON.
We need to leverage against the private capital. We are getting
about an eight-to-one leverage effect, which means we can
improve our family housing condition about eight times as fast
as if we were just relying upon traditional MILCON. I know we
have some examples in Texas in Congressman Ortiz's area.
Let me spend a few minutes--just a minute on housing.
Secretary of Defense Cohen prioritized housing as one of his
two top priorities, improving family housing as one of his two
top priorities this year, along with reforming our healthcare
system. He has proposed a three-part program, increased
reliance on housing privatization, a robust MILCON, where
housing privatization doesn't work, and a substantial increase
in the basic allowance for housing.
Now, the Basic Allowance for Housing (BAH), the basic
allowance for housing rate, will allow more people to
immediately have better quality housing options off-base,
because they can afford to live off-base. It also, because that
is the principal economic driver for housing privatization, it
will stimulate more and better--not only more, but better
housing privatization projects. And hopefully, it will take the
pressure off of our on-base housing requirements where we
maintain old, or outdated, or cost-ineffective facilities,
because we have to meet the housing need.
We are also seeking legislation to make better use of our
underutilized properties by enhancing leasing. We are talking
about trying to really give an incentive at the installation
level. Part of our problem, I think, as GAO correctly points
out, is that a lot of our money for installations gets shifted
around. We need that flexibility, we really do. But if we can
have enhanced leasing opportunities where we make dual use of
facilities, then we can keep that money, be it in kind
contributions or real money at the installation commander
level, without having it go up the chain and then come back to
us. Because frankly, it doesn't come back to us in the same
shape that it went up the chain. That would be a big plus
forward for our installation commanders. And those programs are
described in much more detail in my statement.
Now all of this sounds kind of good, but I want to hit one
other point that is squarely on your criticism, sir, and the
GAO criticisms. We can't really do all this stuff, and we can't
effectively participate in the QDR. We can't advocate for our
positions unless we have--we significantly improve our
analytical tools. To effectively go where we need to go, we
have to know where we are. And I accept, I agree with, your
criticisms, GAO criticisms, that the Department has lacked, the
services have lacked, comprehensive data not only on what we
have, but what we need; and we have migration of funds. There
is no question that those are the facts.
Here are some of the things that we are trying to do to
address these problems. As the first panel indicated, the GAO
issued a report last September on real property management
needs improvement, or in disarray, I think was one of their
conclusions. The Senate Armed Services Committee (SASC)
conducted a hearing in October--excuse me. Both before and
after the hearing, I, personally, with my staff, met with GAO.
We went over their report. After the hearing, we went over the
report. We went and visited the sites identified in the reports
this last winter to get firsthand knowledge of those tools. I
had the pleasure of meeting with Mr. Curtin yesterday to
discuss his report. Some of the things we are going to do, we
have committed to follow-up exercise with him. But more than
that, just kind of talking with people, we are trying to
develop some really basic analytic tools here.
We need to first, as you point out, Mr. Chairman,
accurately inventory what we have. The models that we are
creating to validate our requirements fundamentally depend
upon--this is the concept of garbage in, garbage out--you have
to know what you are sticking into the models before it can
spit out accurate data for us. So we are really trying to
improve the integrity of our real property inventory now. The
services have all submitted preliminary data to us. We are
screening it and scrubbing it. We hope to have a much, much
better handle on exactly what we have within the next coming
months because, simply, it is true; the services do report the
data slightly differently. So we are hoping to get some
consistency in that.
Second, we are devoting a lot of our effort to improving
the RPM requirements determination process to better justify
RPM funding in our constrained fiscal environment. We are the
advocates for installations here. If we cannot really lay on
the table true requirements with the level of precision that
can guide site specific decisions, either in the MILCON or the
RPM budgets, then we are just not effective advocates.
We cannot defend the programs when we go up against the
wrong comptrollers or other programmers and compete for the
limited budget resources. And this has really been one of our
most persistent problems, a lack of sufficient RPM funding
caused, in part, by our own inability to know exactly what we
need, compounded by an inability to effectively compare
requirements across the services. So this is what we are trying
to do, and we know this is not an overnight fix, and this has
been an endemic problem for the Department of Defense and the
services.
We are trying to lay the foundation to really correct this
problem. First, we are making extensive use of an Installation
Policy Board which I chair along with the senior leaders here
of the services, not only on the civilian side, the uniform,
and perhaps more importantly, we have brought the senior
service engineers and then representatives from the financing
and program community. I am very pleased with this board. We
meet every single month. We are treating this board as the
Board of Directors for Installations within the Department of
Defense. It is augmented by outside planning and fiscal policy
experts. We are allowing this board then to do peer review and
auditing of the installation requirements, trying to get some
consistency and standards across the services, and then serve
as an effective forum where we can't solve it at our level,
frame the issue, elevate it up to the senior levels as much as
possible. Every single month we are meeting. I am dragging
these poor gentlemen to these meetings every month, but I think
we have been very effective about that.
Second, we are developing--or the board is supervising the
maturation and the development of three very important
analytical tools for us. First is a facility strategic plan. We
knew that we had to give some thought if we were ever going to
justify to Congress, which has very legitimate concerns about
our request for BRAC. We had to have a strategic plan about how
the installations would fit and match up with the force
structure. We have some discussions about that now. There has
been talk about what type of information do we need, what types
of facilities we need to maintain. We are going to have the
fruits of our labor be fed into the QDR discussions that are
being built up now for May 2001, and we hope to then really
have a strategic aspect of the QDR for facility planning.
Next, we are really supervising in the board the
development of a facility sustainment model using auditable--I
think some of you used that term--auditable data input that
will properly model and identify the funds that will keep our
facilities in good working order. This is really going to
enhance our ability to make estimates of what we really need
and then defend us better in the budget process. And it is
based on validated commercially bench marked maintenance costs
for each type of facility and then, of course, an accurate
inventory of our property.
We have already developed a cost factor handbook that I
would like to introduce for the record, sir, based on private
sector techniques for real property maintenance and
construction. We are in the final validation of our real
property inventories. We hope to have this facility sustainment
model on line for fiscal year 2002 budget programming and
preparation. That means late spring, early summer, actually
have the model up and running.
[The information referred to is retained in the committee
files and can be viewed upon request.]
We really like this. This is, for example, use the
building--a variety of outside factors like the Building Owners
Management Association, a nationally recognized organization
that provides data on maintenance and repair costs. We have
used a lot of commercially bench-marked factors to get a handle
on what we should be spending on maintenance and repair. For
example, outside sources use maybe 2 to 4 percent of the plant
value for maintenance and repair for RPM. We have a goal of
around 2 percent, but we are not really close to that. We are
probably somewhere around 1-1.5 percent. It is hard to really
even estimate what we are spending because we use several
different sources.
And finally, we are overseeing an installation readiness
reporting system for the first time. And your committee was
really the impetus for this. The installation component is
going to be included as part of the overall operational
readiness reporting being submitted by the services and DOD,
roughly, the spring of this year. So we are developing, rolling
up the various services different ways of reporting the status
of readiness of installations. The Army has perhaps the most
developed model on that. We are getting some consistency, and
you will see that from us in the spring.
And let me conclude now. I know I am running over. Let me
conclude with the words, if I could, of Will Rogers. He said
that even if you are on the right track, you are going to get
run over if you stand still. And I believe that we are on the
right track. We have a lot of work to do, though. And I think
that this subcommittee and GAO has really been a catalyst for
us. We are trying not to stay still, but we are trying to move
with some speed and innovation.
One of the innovations, again, if I can give a commercial,
is the leap ahead training management techniques for our
installation commanders and our field leaders. We asked these
guys to be full-fledged city managers in very, very complex
areas with half-day training and two-day training entering--get
us a better deal on the energy deregulation market. People are
studying this for years as they go up against the energy power
managers.
And I think we need to have this leap ahead knowledge
management, knowledge training tools, such as the wargaming
interactive stuff that I have talked about, and I think it is a
function that, I am no longer 20 years old, but I can't imagine
some of the potential that some of the computer based gaming
technology could lead for us. But we would like to see some
devotion of thought to really leap ahead management techniques
so we can disseminate to the field. And then I think that would
be a big benefit for us.
So again, thank you for your continued support of our
program, sir.
[The prepared statement of Secretary Yim can be found in
the Appendix on page 205.]
Mr. Bateman. Thank you very much, Secretary Yim. I want to
tell you I am very impressed with your testimony. What you have
said is a source of considerable comfort to me and, I am sure,
the other members of the subcommittee. It would appear to be
that you are getting about doing the kind of things that we
hoped someone was going to be doing in order to develop the
management and analytical tools that are going to be helpful to
all of us in getting our hands around this very difficult
problem of real property maintenance and base operations
support funding, and making sure that those were taken care of,
and not taken care of at the expense of training and other
programs or vice versa. What you have said is, indeed, very
encouraging.
Let me now ask General Van Antwerp if he would address the
committee.
STATEMENT OF MAJ. GEN. ROBERT L. VAN ANTWERP, JR., ASSISTANT
CHIEF OF STAFF FOR INSTALLATION MANAGEMENT, U.S. ARMY
General Van Antwerp. Thank you, Mr. Chairman, members of
the committee. It is just great to be here with you. This is a
subject that is near and dear to everyone on this panel's
heart. I would like first just to say about Mr. Yim--we kind of
chuckled when he said about the meetings he gathers us for--
this team has been forged by Mr. Yim this year far beyond our
expectations. There is a great trading of ideas, there is some
very innovative things we are doing to try and get a handle on
this, and I just give him the credit; not to make his head feel
bigger, but he is just doing an outstanding job with all of us,
and we in the Army surely appreciate that.
There is no question in our minds that facilities'
condition is a component of readiness in the Army. And as has
been said three of the last five years, the Army migrated money
into the RPM account. And it is a recognition of many factors,
Kosovo and other factors, but it shows you the sense of the
commanders out there in the field. I want to thank you for the
Congressional adds that we have had and the quality of life
enhancement funds that have been very crucial to us and help us
in that. But as Mr. Sisisky says, it is dollars to a great
extent. There is only so much you can do on the initiative
realm before it comes down to dollars.
Of course, I am sure you are all aware of the Army's new
vision to transform itself. A lot of that vision will impact
our installations as we try and project our power quicker. It
means we have to look at our airfields and those power
projection things. We also have to look at how we are training
our force, our new force. Some of the things we see there will
be the need for if we change equipment, and as we transform
equipment, will be for the equipment shops. The other part of
that is probably for more urban type training, mount training.
So we are very much looking at the effect of the transformation
on our facilities.
The Army has a comprehensive strategy. It involves the
active, the Reserve, and the Guard, and it is one--we all have
the same standards. So when you get a report from our
installation status report that says the facilities in the
Guard is rated at C-3, that is on the very same standard as the
facilities in the active force.
From our viewpoint, the Army has about 166,000 facilities.
The average age of those facilities is 44 years old. There is
two factors that really impact: one is the number of facilities
that you have to maintain, and the other factor is the
condition and age kind of lumped in there. As all the services
are doing, we have a very good program for demolition. The Army
feels right now, based on our installation status report we
have 28 percent excess infrastructure. And we have a program,
we have about 150 million square feet.
Back in 1992, there was identified in our status report
that we needed to demolish, that we don't need to maintain and
be putting money into keeping them up. To-date, we have
demolished 68 million square feet. We will take another 10
million down, roughly, in 2001, with what is in the 2001
budget, so we are getting there. When the installations tell
you they could use a lot more--Fort Hood, if you could give
them another 10 million today, they would use it; Fort Bragg,
another 10 million today. They can't get this down fast enough.
The second part, I will just tell you that we are funding
RPM at 69 percent this year, and it is woefully inadequate. We
did make a change from last year with about the same level of
funding in RPM as last year. We dropped ten percentage points,
roughly, in how we are satisfying the requirement. That is
because we understand the requirement much clearer now, and we
made--we bit the bullet and said we are going to make a change
and accurately reflect, based on standards, what is the
backlog. If that backlog had current funding, we hope to be--
and hope isn't a strategy--but that we plan to be by 2005 at 80
percent at the current funding, at 69 percent in 2001. But that
is still woefully low, because 100 percent keeps it just like
it is.
Our unfunded requirement of $250 million that you
addressed, that will get us--if it is sustained, it will get us
to the 90 percent mark by 2005, if it is $250 million addition
every year. That still doesn't get at the big backlog. We have
over a $15 billion backlog in quality. But it will get us so we
are sustaining close to that level of 100 percent. You combine
that with a military construction program that is renovating,
remodeling and upgrading facilities; that and the 90 percent
RPM will get us to a good position.
I just want to conclude by saying that it has to be a
balanced strategy, I think, between RPM and MILCON. And that
strategy has really two pieces: it has the sustainment piece
and it has the modernization piece. And our challenge is to
balance those. What we have done up to this point is go after a
very focused program. We have gone after permanent party
barracks for quality of life of our soldiers, a readiness
issue. We have gone after strategic mobility in order to
upgrade so that we can project our forces from our power
projection platforms.
We do have a future strategy that is in my written
statement. We would be glad to talk further if there are any
questions. And sir, that concludes my statement. And again, it
is great to be with you here today.
[The prepared statement of General Van Antwerp can be found
in the Appendix on page 221.]
Mr. Bateman. Thank you very much, General. And now, Admiral
Smith.
STATEMENT OF REAR ADM. LOUIS M. SMITH, COMMANDER, NAVAL
FACILITIES ENGINEERING COMMAND, U.S. NAVY
Admiral Smith. Good morning, Mr. Chairman, members of the
committee. I am Rear Admiral Lou Smith, the Commander of the
Naval Facilities Engineering Command, and it is a pleasure to
be here before the committee this morning. I would request,
sir, that my written statement be included for the record.
Mr. Bateman. It will be included.
Admiral Smith. Thank you, sir. I do appreciate this
opportunity to be here this morning to talk about real property
maintenance, and I thank you for your ongoing support for this
program within the Navy. I talk a lot in my written testimony
about our efforts to overcome the challenges of maintaining our
aging infrastructure within the limited resources we have. We,
in addition to get more dollars into the program, are trying to
reduce the size of requirement. We do this through our ongoing
efforts for regionalization and consolidation to eliminate
redundancies we have and consolidate where we can.
We, too, have a very aggressive demolition program. It is a
program that was beefed up in fiscal year 1996. The results are
seen around the Navy. We have demolished almost 7 million
square feet already. We hope to get to 10 by 2002. It looks
like now we will demolish another 5.5 million by 2002. And I
would add for Mr. Sisisky that the added serendipity we have
had there is that people are saying how pretty our bases look
now that we have torn down a lot of these--yes, sir. It is
amazing. We are also pursuing privatization in areas. Mr. Yim
mentioned utilities; we are looking at that. We are looking
hard at a lot of other areas, such as housing, that aren't
necessarily inherently governmental, that we could get from the
private sector and, again, reduce our facilities requirement.
Our RPM funding this year is good news for us. If you look
at it, it is an increase from last year. Last year, our asset
protection index, what was mentioned before our percentage of
funding to our plant value, was at 1.6 percent; this year, it
is at 1.8 percent. We are getting closer to that industry
threshold of 2.0 percent. This allows us to do some, what we
call tailored funding, where we will fund our mission critical
infrastructure, such as quality of life, piers, runways,
utilities, and training facilities to a C-2 rating condition.
This will also help us to significantly slow the growth of the
backlog of maintenance and repair in our other facilities.
Ideally, I would hope to strive for C-2 readiness in all of
our facility categories to avoid continuing deterioration, but
the truth is we are a long way away from being there. With our
fixed top line, our RPM program continues to be a balancing
account that is needed by our warfighters to support higher
priority readiness programs and emergent requirements.
Accordingly, we work very closely with Mr. Yim and his staff,
as well as the other services, to develop tools that better
clarify the impact of these RPM reductions.
In fiscal year 1999, our number of mission categories
reporting C-3 or C-4 facilities condition increased for the
first time in five years. Mr. Chairman, I would tell you it is
imperative we need to reverse this trend. Deep down, the Navy
does believe that the measure of our readiness is closely
linked with the quality of our shore facilities. Quality
facilities improve the quality of life for our people, reduce
our cost of ownership, and as always, impact our ability to
train and retain our sailors.
This concludes my opening statement, sir. I would be more
than pleased to answer any questions you or the rest of the
committee may have.
[The prepared statement of Admiral Smith can be found in
the Appendix on page 228.]
Mr. Bateman. Thank you, Admiral Smith. And now, we look
forward to hearing from General Robbins.
STATEMENT OF MAJ. GEN. EARNEST O. ROBBINS, II, THE CIVIL
ENGINEER, U.S. AIR FORCE
General Robbins. Good morning, Mr. Chairman, members of the
committee. I appreciate the opportunity to address the Air
Force's real property maintenance requirements with you this
morning. With your permission, I also will submit my full
testimony for the record.
As you know, we manage our facilities in infrastructure
through two major programs, as was previously pointed out.
First, the real property maintenance, or RPM account, provides
funds to maintain the Air Force infrastructure already in
place. Second, the military construction appropriation allows
the Air Force to replace antiquated facilities and to bed down
new weapons systems. And although the focus of today's hearing
is obviously on the RPM account, success in both of these areas
must be complimentary to allow us to provide the quality
facilities we need to support our missions and our people.
While there are clearly several areas where we have
achieved notable successes as a result of excellent
Congressional support, continued constraints in RPM and MILCON
are beginning to show in degraded facilities and supporting
infrastructure, as you have determined during your visits.
In fiscal year 2001, RPM in the Air Force is funded at what
we in the Air Force call the preventive maintenance level, or
PML. And this will allow us to accomplish only the day-to-day
maintenance required to sustain real property facilities and
infrastructure. It does not provide the resources necessary to
accomplish much of the needed maintenance and repair. And
although the Air Force continues to operate, we are
increasingly required to develop work-arounds which impact Air
Force combat capability and operational efficiencies. Examples
include deteriorated airfield pavements, which require longer
aircraft taxi times, reduced munitions storage capability due
to degraded storage igloos, and increased foreign object damage
risk to aircraft engines.
The Air Force's current level of RPM funding defers most
non-PML maintenance and repair, resulting in a current backlog
of some $4.3 billion. Now, we have developed an RPM metric,
which we call the Facility Investment Metric, or the FIM, to
identify requirements above and beyond those day-to-day
maintenance requirements I have mentioned. The FIM stratifies
facility requirements based not on facility condition, but on
mission impact, and allows us to identify and track our most
critical needs.
We mentioned the inventory earlier. The active Air Force
has about 108,000 buildings; of those, about 58,000 are 40
years old or older, and so we obviously face a challenge in the
day-to-day maintenance and repair that we encounter in the
field. On the demolition front, since 1996, the Air Force has
demolished some 1,700 buildings. And as Dr. Yim indicated, we
are on the right glide slope to meet the DOD guidance to
complete the demolition program.
The scenario I have laid out for you, if we project it out
to continue until fiscal year 2003 when the RPM program funding
finally begins to increase within the Air Force budget, funding
is currently projected to grow from one percent of the plant
replacement value, which it is in the 2001 budget, to just over
1.4 percent by fiscal year 2005. This means our backlog will
not disappear overnight and Air Force operations and readiness
will continue to show increasingly adverse effects. Until then,
the Air Force must limit RPM funding to the preventive
maintenance level so that we can fund higher priority programs
within our current total obligation authority.
There is good news regarding facilities. The Air Force has
benefited over the past four years from Congressional adds to
the RPM account for quality of life enhancements. This effort
has allowed the Air Force to greatly improve conditions in our
dormitories and other traditional quality of life facilities.
And we deeply appreciate your support in this high visibility
and high impact area.
We obviously still have a lot of work to do. The Air Force
currently has over $200 million worth of validated unfunded
dormitory requirements. There also exists nearly $400 million
of other validated unfunded quality of life requirements, such
as child development centers, community centers, fitness
centers, youth centers, and so on. Your support for quality of
life enhancements will continue to have a positive effect on
our airmen in the field.
It is our responsibility to provide policy makers and
decision makers with informed assessments of requirements along
with our best engineering judgments regarding impacts on
readiness and quality of life. We continue to capitalize on the
limited resources at our disposal, and just as importantly, on
the ingenuity and dedication of our officers, enlisted
personnel, civilians, and contractors to operate and maintain
our bases to the best of our ability.
However, tough choices still lie ahead for the Air Force.
As General Ryan stated during his recent testimony before this
committee, the Air Force has identified a priority list that
includes items related to personnel, readiness, modernization,
and a very large need to support our infrastructure.
In conclusion, Mr. Chairman, I want to thank the committee
again for its strong support of Air Force programs and the
benefits they provided the Air Force in terms of readiness,
retention, recruiting, and the quality performance of our
people. I would be happy to address any questions.
[The prepared statement of General Robbins can be found in
the Appendix on page 235.]
Mr. Bateman. Thank you, General Robbins. And now, we look
forward to hearing from General Mashburn.
STATEMENT OF MAJ. GEN. HAROLD MASHBURN, JR., DIRECTOR OF
FACILITIES AND SERVICES DIVISION, OFFICE OF THE DEPUTY CHIEF OF
STAFF FOR INSTALLATIONS AND LOGISTICS, U.S. MARINE CORPS
General Mashburn. Thank you, Mr. Chairman, members of the
committee. I certainly concur with all the comments my
colleagues have made, and I really appreciate the opportunity
to address Marine Corps concerns for real property maintenance.
I think from the discussions we have had today, we understand
what an onerous task this is as far as management.
You have heard General Jones, our Commandant, say that we
have four pillars of readiness: Marines and their families, our
legacy systems, infrastructure, modernization; all of that
coming from the bottom line and the top line--very difficult to
really look at those. However, looking at real property
maintenance, it goes across all pillars, even looking at
maintaining our legacy equipment, our old equipment, it
actually does.
Is it true that we have deferred maintenance to help fund
new timeliness? Certainly, it is, but we have done it during
the budget process, knowingly doing it because of essentials,
not the other way around. I can remember last August when all
the monies came in that perhaps were not being able to be
executed. We went out for a call to the field, what programs
can you execute, installations, by 30 September--$66 million
worth. They were executable because they were ready, and we
were able to execute $29 million in a very short period of
time--just fantastic work by the field.
And actually, if you look at the history over the past
several years, we have been able to execute more in real
property maintenance than was actually anticipated at the
beginning of the fiscal year. We have several goals: the
unfriendly priority list of $49 million was mentioned. That is
required to reach one of our goals, which is to reduce the
backlog of maintenance repair to $106 million by 2010. That is
a goal, and that this why it is on deficiency.
Another goal is the recapitalization rate. Presently, our
recapitalization rate, while industry's is at 50 years, is well
over 100 years. Our goal is modest, 70 years. Real property
maintenance funding request for 2001, we have requested an
increase of $50 million; and it is a substantial increase, but
it funds 90 percent requirement. Last year, we were able to
reduce our backlog in maintenance repair with the programming
request for 2001. We are looking at a $20 million reduction in
backlog maintenance repair; again, looking at sustained funding
increases of perhaps $49 million a year to reach that 2010
goal.
Funding is the key. Is it adequate? It is adequate to
maintain old facilities with sometimes band-aid approaches? We
must sustain increases to reach our goal through 2010. We must
combine it, as my colleagues have said, with strong demolition
plans and a very strong military construction plan.
We are working together with Mr. Yim and the other
services, of course, to really look at how we can orchestrate,
first, the inventory upon which to base our requirements, and
then to really be able to establish our goals for the end
state. As a major concern, when we talk about the four pillars
of readiness, again, maintenance real property transcends all
pillars. It is critical because it is quality of life.
We talk about quality of life. Sometimes we think about
family care centers, family service centers, commissaries,
PX's. Quality of life to Marines means something else: all
about good roads, runways that don't have foreign object damage
to the aircraft, basic infrastructure requirements. That is
quality of life; quality of life that brings back our Marines
alive.
Again, thank you very much, Mr. Chairman, for your support.
I look forward to answering any questions.
[The prepared statement of General Mashburn can be found in
the Appendix on page 244.]
Mr. Bateman. Thank you very much, General Mashburn, and all
of the witnesses who are part of this panel. Secretary Yim, I
want to repeat again how pleased I am to get the indications
from you that there is a very concerted, and I sense, a well-
conceived effort to get your hands around the managerial and
analysis problem that underlies so much of what we have been
talking about today. I want to commend you for that and for all
of the members of the military team who flank you for their
understanding of the wisdom and necessity of doing that.
I want to return to the matter of BRAC and base closures.
And I don't mean this in a vagaritive kind of way, but I think
the perspective--or perception here on the Hill is that we
would be into that process before now except for some loss of
confidence in whether or not the last process in some manner,
at least, allegedly, is perceived to having been politicized.
Leaving that aside, I have no doubt but what we have more
facilities than the downsized armed services require, and that
we need critical analysis and decision making as to what to
keep and what to arrange and rearrange.
But you are talking in terms of two BRAC rounds. Explain to
me, if you would, why you say two instead of one well-conceived
and properly executed round.
Secretary Yim. What we are estimating is about a 23 percent
excess infrastructure, and the thinking is that that is too big
of a bite to take in one round itself. That is quite a bit of
excess infrastructure to take down. What has happened in the
prior BRAC rounds, particularly, in 1993 and 1995, is the
experience has shown that from the 1993 round, and you could
make additional adjustments and tweaks in the subsequent
follow-up round in 1995. And that is what we are envisioning, a
2003 round and a 2005 round, again, to make those tweaks and
adjustments.
It is--and frankly, if you ask us, well, would you take one
round? Yes, we would definitely take one round, and we would
try to do the very best job we could in that one round. Our
analysis is that given the amount of the infrastructure that we
believe needs to be taken down and shifted around--because it
is not just closure, it is realignment, the two would benefit
us more.
Mr. Bateman. I am sure you are aware that the base closure
process is a very, very turbulent and traumatic kind of
phenomena for hundreds of communities throughout America. It is
nonetheless going to be something that at a point in time we
must do. I just have some hesitation as to whether we need to
put them through it twice as opposed to doing it
comprehensively and doing it soundly once. I want to have you
express your views as to why the dual round instead of a single
round.
Secretary Yim. One of the things we are doing also, Mr.
Chairman, is to try to mitigate the impact of it. And with the
help of Congress last year, we were able to--and Congressman
Ortiz and Congressman Rodriguez--enact legislation to allow us
to transfer the assets of our closing military bases to the
communities at no cost for job generation purposes. And that, I
think, has gone a long way to mitigating the impact or economic
dislocation and trauma that the communities go through. But
there is still no question that this is a traumatic process,
just like any of our downsizing efforts, and we understand your
point very well, sir.
Mr. Bateman. Mr. Ortiz.
Mr. Ortiz. Thank you, Mr. Chairman. I appreciate you all
being with us today and the fine work that you have done under
the circumstances. And I know that money happens to be the
problem, of which we don't have enough. But I am going to be
asking some questions for all of the services. And my first
question would be the question that I asked the prior panel,
what benefits do you think will result from the presence of a
DOD-wide strategy for addressing, you know, the RPM crisis, and
how do you assess your service infrastructure recapitalization
program? And then, what are your long-range plans for breaking
the cycle of increasing the RPM backlog? And maybe you can give
us a little input as to what we can expect.
Mr. Bateman. If you would suspend for a moment--Mr. Ortiz,
I find myself in the situation where I made an improvident
commitment to be somewhere at 11:45. So I am going, with the
utmost confidence, proposing you of the responsibility for
presiding over the hearing at the point where I have to leave,
which is going to be in about two minutes.
Mr. Ortiz. That is fine, and I will not let Mr. Sisisky
call for a vote.
Mr. Bateman. Well, I might even be willing to go along with
that.
Secretary Yim. Thank you very much. Yes, we are trying to
get some degree of consistency, but the biggest problem we have
is--and it has been suggested that we have a floor, for
example--is that I believe that we really do need the
programming flexibility. We do see a lot of money being spent
on training in the first part of the year, and then a lot of
money coming in to RPM at the end of the year, as General
Mashburn has indicated. That is actually good for us, because
the only people that really can execute at the end of the year
when money falls out is really the installation guys. So we
really are benefiting from that type of budgeting system.
The problem we face is that people are accused of having
soft requirements within our own systems, our own comptrollers.
The RPM needs, you don't know what you need, you don't really
know what you have. How can you really say that this $10
million is really going to improve readiness? It is very
difficult for us to create algorithms or connections between a
specific mission readiness and a specific dollar devotion to a
particular facility. So people accuse us of having soft
requirements.
That is why it was very important for us to have this
cooperative effort to get to a facility sustainment model that
had commercial bench marks. So what I believe, where we are
headed, is we are not going to get a floor unless it is
mandated. That is not what the services nor the Department is
requesting. However, what we need to do is increase the
visibility of the decisions, either to fund or not to fund, and
that is what we are attempting to do in the facility
sustainment model so we can say to our programmers, okay, we
know that you need this $50 million, but this $50 million would
have done this, and the consequences of not giving us that $50
million this year and only giving us 20 is this. And we hope to
get to that level of granularity in our model.
Mr. Ortiz [presiding]. Any of the services who would like
to respond to my question?
General Van Antwerp. Yes, sir. I would like to just say I
think the facility sustainment model that Mr. Yim is working
with the services; we have had the installation status report
for several years--it is pretty mature at this point, and it is
somewhat akin to that and will fold into that. I think the key
to that is the standards that you have so you know exactly what
the condition is, and what this facility sustainment model and
the installation status report does, it actually--you go out
and you look at a facility. You have a checklist, and when you
are done, you know whether that--you know the sustainment costs
and you know the modernization costs of that facility. So that
is the first part.
And then it gets into how do you break this chain that you
alluded to. I think it is a combination of getting rid of, as
we have already discussed, what we don't need anymore, so we
are not pouring valuable dollars into that. And then the second
part, you have to get this funding up to a level that while you
are trying to sustain, it is not deteriorating at a greater
rate. We are on a downslope right now because of chronic
underfunding. And so we have to get it up to a level that
allows us to--no fooling, not let the stuff we have go down
further.
You combine that with a good program of military
construction and modernization, and you take some of those C-4,
what we would call a C-4, not mission capable facility, and you
either tear it down or build a new one, or you really go in and
modernize it. I think that is how you break it. We know the
cost of that in the Army, to break that in RPM is about $500
million a year. Frankly, if we are going to do that over the
next several years to sustain it, that very high level will
break this trend that we are in right now.
Mr. Ortiz. Admiral.
Admiral Smith. Sir, I would offer that I really would check
into everything that has been said so far. Within the Navy, I
think, it is just a few simple words. The first is to focus
what we have. We are spending money on operational facilities,
quality of life facilities, training facilities, things that we
know we are going to have and we are going to keep. We are
going to get rid of things we don't need anymore, whether that
is by demolition, or by outsourcing, or by privatization. We
are going to consolidate where we can. And I would be remiss if
I talked--and we are going to coordinate that, obviously, with
our MILCON program to recapitalize our plant ashore. But I
would be remiss if I didn't also mention that we are going to
have--if we are going to have the discipline internally to
break this cycle of poverty, we are going to need to educate
our people. And it is not just our base commanders. It is also
the people who live and work in these facilities as well as the
people who fund those, our good friends in the comptroller
business in Washington about not just a metric, but also, what
this does and what the payback is for us.
Our former Commanding Officer (CO), Admiral Boorda, used to
say, quality of life is the last thing that happened to you
today, and we are very sensitive to the fact that if you can
live in a wonderful brand new one-plus-one barracks but, yet,
at your workplace, the roof leaks, you have got an old
typewriter instead of a word processor, that is not going to be
an incentive for you to stay around in the Navy whether you are
a civil servant or an active duty military member. So it is a
multi-faceted approach, but I think we are on top of it and we
are making enormous progress.
Mr. Ortiz. Thank you. Mr. Robbins.
General Robbins. Yes, sir. I would only add on the facility
sustainment model, I think the beauty of it, and its utility to
us as engineers, will be that because it is based on and bench
marked against industry standards, commercial standards, as
opposed to something that perhaps was just dreamed up, if that
is the right term, internal in the Department of Defense--will
allow us to better articulate and justify our requirements
within the various corporate structures of our services, the
Air Force Council, in my case, where we won't be just talking
what civil engineers think we need, but Mr. Yim will have
delivered to us a model that we can point to and say this is
the way the rest of the world, commercial airports,
universities, other government agencies, state governments, et
cetera, approach this very nagging problem that we have. So I
think that is the primary benefit that we see from developing a
new model that we can all abide by across the uniformed
services.
Mr. Ortiz. Thank you very much. General.
General Mashburn. Yes, sir. The only thing I could add is
we must maintain the flexibility that is provided by not
fencing real property maintenance money. For instance, I
mentioned the four pillars of readiness, our legacy systems,
very old equipment. During the course of a year, what happens
if our vehicles' transmissions have a severe breakdown
throughout the fleet--not under warranty--very difficult to
handle unless there is something unfenced. If you have to weigh
repairing the Amphibious Assault Vehicle's (AAV's) versus
repairing an old building, I think the commandant is right in
making a decision as far as warfighting. So I just request that
we be allowed to maintain the flexibility of managing the
program with added emphasis on reporting properly.
Mr. Ortiz. Thank you very much. I now will yield to my good
friend, Mr. Sisisky, for any questions that he must have.
Mr. Sisisky. Thank you. You don't want a fence then. Is
that what you are saying? You want the flexibility to move that
money around. Is that what you just said?
General Mashburn. Yes, sir.
Mr. Sisisky. And you think that is the proper way to do it?
General. Mashburn. I do, sir, with better management tools.
Mr. Sisisky. Thank all of you for being here today. Mr.
Yim, I have never had the pleasure of seeing you before. As
these gentlemen will testify, I was a pretty outspoken member
of the Military Construction Committee, but they wouldn't let
me serve on it this year.
I would just get back for a minute to BRAC, and I know what
the Chairman's--we have talked about it many times, the fear of
two BRAC's. And the fear is not over two BRAC's, the fear is
messing it up. For instance, in 1993, they closed the Naval
Aviation Depot (NADEP) in Norfolk; that is the Air Rework
facility. They closed it, basically, because the captain who
was commanding the place took a gamble on 600 employees--this
is a true story--that they were going to get enough business,
when he should have RIF'd or laid them off, but he didn't do
it, and he readily admitted it. So the cost went up and they
took that picture right at that time and they closed it. Two
years later, they sent it to Jacksonville. Two years later,
they closed Jacksonville, Cecil Field, and sent all the
airplanes to Norfolk. Now, they repair the airplanes in
Jacksonville, and all of them were sitting up in Norfolk, so
they had to fly down to get repaired.
But I can tell you a worse one than that. The Navy, was
it--I forget the name of it, but it had to do with
communications and radio work. It was done at the Norfolk Naval
Shipyard in the annex, St. Julian Annex. So they closed
Charleston in that year. I forget what year it was. They took
all those ships out of Charleston, but they put the
communications system, so now, the only one that benefited was
U.S. Air, because then they had to fly from--you know, so that
is our fear of two, you know, maybe you wouldn't mess up, you
would be more careful in one. But you are going to have enough
trouble just getting one through, so I don't know. But just
prepare yourself for that.
I think that's what they--you know, all this talk about--
all of you talked about the real estate aspect of it. Nobody
mentioned anything about base operations. That thing is
really--am I imagining that that is hurt worse than anything,
all the cuts in that? Is that my imagination or is it just base
commanders complaining? Anybody like to--
General Van Antwerp. I could just for the Army, we are in
2001, this budget funds the base ops at 96 percent to run the
base. So I think it is really more in the RPM--
Mr. Sisisky. Excuse me. Ninety-six percent of what figure?
General Van Antwerp. Of the requirement.
Mr. Sisisky. Of the requirement?
General Van Antwerp. Yes, sir. So that is the--
Mr. Sisisky. While you have got the microphone, you made a
statement about the 90 percent mark in 2005. That is what you
want to get to in real property maintenance?
General Van Antwerp. At least that high. I mean, I will
tell you a--
Mr. Sisisky. Well, let me just tell you what the problem is
in that. You have been snookered, because they are basing that
savings on an illusion that privatization is going to produce
about $5 billion. Now, you prove it to me that it is going to
do $5 billion. I am telling you, your fund is going to be
shrunk if you base it on that. And that is what I worry about.
And a lot of other things that are happening in the Department
of Defense, based on an illusion that it may happen.
I am not sure, Mr. Yim, when you said that the savings are
real, coming off of the BRAC, that we do know that they are
real. I got so upset eight years ago. I put the largest
amendment that has ever happened in this place, a $70 billion
amendment, and guess what it was for--to do away with DBOF
because everybody was dipping their hands in the DBOF fund,
which had to do with the D-builders all around and shortening
those, you know. So you know, I worry, because I have seen it
happen, you know, if we are going to save it in the accounting
system is probably not the best that we will even know.
Public works, now, is that an illusion of mine, too, that
you privatize mostly public works. And is that saving a lot of
money?
Admiral Smith. If I could take that one, sir. I answered
this, of course, as a two-time public works officer and a
former Commanding Officer (CO) of a DBOF-funded activity, I am
sensitive to everything that you were talking about. We, of
course, have a very active Commercial Activities (CA)
outsourcing program, and public works utilities, of course, is
a part of public works, and this is my third round of A-76 in
my career. And I don't think any of them were easy, and this
one isn't any easier either. We have gone back and, of course,
we are in the middle of a lot of studies. We are studying
everything from janitorial services and trash collection up
through, basically, utilities privatization and outsourcing of
vehicles for our fleets.
We are finding savings. We found some substantial savings,
and I would be glad to detail those for you for the record. The
savings, what our friends in the comptroller shops have already
taken from the budgets, that is not always a match, and I think
that is what you were alluding to before, sir; but there is
money to be saved there. There is money for us in the facility
side to save there. Within my clemency at Naval Facility
(NAVFAC), I have 1,200 people who work on managing,
maintaining, operating, and repairing utility systems. I am not
sure I need any of these people. Now, I never say never--I
mean, I never say always, because I know I have got people
doing that on Diego Garcia; and it is hard to get Hawaiian
Electric to hook a line up all the way to Diego Garcia.
But I think the point here is that we not only can save
some money, and that is reason enough to keep doing it, but
also, it does have a ripple effect back into our facility
requirements on base, because where we can outsource utilities,
we don't need a utilities shop on base anymore. Usually, the
local power company or whoever will provide that in their own
facilities off base.
Mr. Sisisky. Well, in the largest Naval installation in the
world, you are doing that right now. I don't know if you
gentlemen know, but down in Norfolk there is one commander of
everything. He is in charge of every base that is around there,
everybody reports to him. But public works, you know what
bothers me; if you have people with sewerage, or anything, and
they do maintenance work, but you save money by letting them
go, and you privatize it so you do it when you have a problem,
then that may be a problem. And that is why I say the savings
may be an illusion to some degree.
Admiral Smith. Yes, sir. And that is always a concern,
again, that you estimate the savings higher than they actually
are. From a provision of service side, I do remember--that is
why I have got all this gray hair--when we first contracted out
things like trash collection, and we had several contractors
default, it is kind of well, what happens once you get rid of
the trash trucks and you can't pick it up yourself.
Mr. Sisisky. I will tell you a better one than that. They
hired a foreign company to fix cranes. I didn't realize fixing
cranes was about $250,000, these huge cranes at the shipyard.
Admiral Smith. Portal cranes, yes, sir.
Mr. Sisisky. So they hired this company, and it was a
foreign company, said they could do it for $50,000. Well, what
they did, they went bankrupt like in nine months. So do you
know what I did? They have got a little thing in military
construction budget, and you probably know, building a railroad
down there. What we are going to do now, and it will pay back
in five years, we are building a railroad to move the cranes
all around the yard and do away with half the cranes. It makes
sense.
Admiral Smith. Yes, sir.
Mr. Sisisky. So you say that it is not an illusion, or is
an illusion, that we are saving money, or you don't know?
Admiral Smith. I would say, sir, it is not an illusion. We
are saving money. It is a question of how much and, again, does
it match the projections.
Mr. Sisisky. I know the one question I really want to ask
all of you, though. When they dip into RPM or base operations
for contingencies, what percentage do you get back? Do you get
it all back, half back? The Marine Corps said they got $6
billion--or $29 million back.
General Van Antwerp. I didn't understand what percentage
that was that he--
Mr. Sisisky. I don't know either. That is why--
General Van Antwerp. From the Army's standpoint, I will
have to get that one for you for the record. We do get some of
it back. There is no question about it. Is it 100 percent? I
would speculate no.
Mr. Sisisky. I don't want you to get in trouble.
General Van Antwerp. I know. Thank you, sir. I appreciate
that.
Admiral Smith. Sir, I would have to say the Navy is
happiest forward deployed around the world, and if we have got
to take money out of RPM, well, there is enough Naval officer
left in me to say, so be it. But I would say--I will take that
also, if I could, that we get most all of it back. We do pretty
well at the end of the year. But again, it is a matter of
priorities. It really is.
Mr. Sisisky. General Robbins.
General Robbins. I think the prudent thing for an engineer
in the Air Force to say would be, since we don't have any money
to start with, we don't have any to lose. Perhaps, the more
politically correct answer would be, it would be hard to say
how much is diverted from RPM to go to contingencies to start
with, as was alluded by one of the panelists earlier. We tend
to be underfunded in the budget process itself. And so to
determine how much we didn't get because a contingency comes
along becomes a pretty difficult accounting problem.
I know of no instance in my previous experience at Air
Combat Command, sir, down at Langley, which you are familiar
with--I don't remember us ever taking money that we already
distributed to the wings and air combat command for RPM,
pulling it back and saying we need to fund contingencies with
this. What really has happened is we have seen a decrease in
the year-end fallout money that comes our way, because it tends
to be used to pay for those contingencies.
We got a good healthy chunk of money after the Kosovo
supplemental. Whether it is distributed, dollar for dollar,
where we would have put that money in the first place or not is
almost impossible to determine.
Mr. Sisisky. All right.
General Mashburn. Yes, sir. I would say it competes very
well. I would not at any time say we could get 100 percent
reimbursement, but it competes very well.
Mr. Sisisky. I do have another question, but I will let my
friend over here ask some questions. I am sorry. Then I will
come back.
Mr. Ortiz. I yield to my good friend and colleague from
Texas, Mr. Rodriguez. Congressman.
Mr. Rodriguez. I know Congressman Sisisky is very shy and
so I want to thank you for yielding to me. I wanted to share
with you, we have in San Antonio, and I am sure throughout the
country, a lot of old bases, like Fort Sam and Randolph, that
have some beautiful structures. And I know the last thing we
want to do is knock some of those down. In fact, in some cases,
the communities would not allow us to do that.
But I wanted to throw out the question in terms of whether
we need to do anything special in terms of historically for
those historical sites that are throughout the country, in
terms of making sure we maintain them appropriately because we
want to do that for historical reasons. Also, in terms of I
realize that a lot of them are still being utilized; and so I
wanted to make sure, you know, I want to get your feedback on
that one.
Second, I wanted to also--I know, Mr. Yim, you mentioned a
little bit in terms of the Brooks project in San Antonio; and I
would want for you maybe to make some comments, because I think
that not all bases are the same, but there are some
opportunities out there--not, you know, despite BRAC, or
whatever, but to also look in terms of some cost-effective
measures in terms of reducing the costs and cost operations.
And I would want for you also to make some comments in that
area.
Secretary Yim. Yes. Thank you. First, on the historic
issues, the historic properties, and this is more than just
historic quarters; we have historic buildings, facilities. What
we are suggesting is in our proposal for enhanced use leasing
of our underutilized facilities, that the historic properties
give a character to our installations and, actually, are often
coveted by the private sector to use for representational
events, conferences. It gives a cachet that is very nice for
the private sector to use; and since we don't use a lot of our
historical facilities to the full extent, that that is perhaps
a vehicle that we could have some dual use, or renting of our
facilities, and then capture the money in our enhanced use
leasing proposal, and then keep it at that installation either
to help maintain that historic property or to fund other real
property maintenance or other infrastructure requirements.
And I think that would--that would give then some
functional significance to the preservation of our historic
properties. If we are just looking at preserving them for their
historical sense without a functional significance, there is
always pressure to demolish them or underutilize them. We would
like to give an economic, functional significance to them in
that manner; and I think that is a good vehicle.
Our data seems to show, and I think many people think it is
much more expensive to maintain historic properties than
others, that is probably not precisely true. It is more a
function of the age rather than their historical character
itself. And then if you also look at the life cycle cost of
them, if we are putting a slate roof, for example, back on an
historic property because that is what the appearance was, it
has a much longer useful life than other types of building
material. So over the cycle, the life cycle, it is about the
same as most of our other facilities. But that is one that we
would like to look at.
The other significance of historic properties is people are
beginning to lose contact with the military and what role the
military plays. And to the extent we can use historic
properties as draws for the general public to come onto our
bases or participate, it gives them a better sense of what the
military is all about, and that fulfills another important goal
for us.
With respect to Brooks, as you know, sir, I am a very big
advocate of Brooks and other projects like Brooks. Brooks is a
project where we are actually asking a partnership in a true
sense between the military installation and the community to
help us with our operating costs. We are talking about concepts
even as innovative as perhaps even leasing the whole--or
conveying the whole property to the community and leasing back
on the assumption that the private sector, taking advantage of
the economies of scale, can be more efficient in management of
installations than we can. And plus, it allows us to fulfill
that other goal I just talked about, integrating the military
function, military life, with the community, and giving people
a better sense of what we do. So I think there is great
potential in Brooks. We were able last year to get legislation
allowing us to proceed. We have some reports back to Congress
on that, in July, on progress for that. But you will see that
my office installation is very, very strongly supportive of
those type of concepts.
I would like to mention one other thing, if I could, too,
on our funding. And to go back to Congressman Sisisky's view,
we do have problems with estimating the savings. And sometimes
our budgets are--the comptrollers take more in assumed savings
than perhaps we really can deliver. I also have to mention that
last year, Congress in the Appropriations Act took $100 million
from us on assumed savings from competitive sourcing. And that
was quite a hit that we took from our own budget lines. So we
would ask your support in helping us maintain our projections.
Mr. Rodriguez. Thank you for those comments. Let me add one
other thing. When you talked about historical sites, I know--
and I would ask that, you know, because I think we have some
unique sites out there. I have the distinction also of having
Fort Ringo that was one of the forts that goes back a long
time--not Bill Ringo, Fort Ringo. And it was turned over to the
school district down there. And it is a beautiful facility
right on the Rio Grande out there in Rio Grande City. And it
used to be called Davis Landing way back in the 1850's, and so
it is a beautiful facility. Yet, you know, and so you see some
of those sites out there. And I think we have an obligation, I
think, to all Americans that we kind of safeguard some of those
sites. And I am not sure, exactly, how to go about that, but I
would hope that maybe in the future we would come up with some
recommendations as to how to do that.
In reference to your comments, also, regarding Brooks, I
think it is a unique opportunity. Not all communities would
want to do that. Fortunately, we do have a community in San
Antonio that is willing to move forward on some of that.
Mainly, because of experiences from the closure of a base that
had 20,000 people there, and that is Kelly. And so I want to
thank you for being here and your comments. Thank you. And I
relinquish the remaining time to my colleague.
Mr. Ortiz. I think that Congressman Sisisky has another
soft question for--
Mr. Sisisky. Well, just following on him, an historical
thing, it is amazing what you can do with buildings today. We
have historical plaques, Civil War plaques, at the Norfolk
Naval Shipyard, and we have modernized those buildings. Now,
they look terrible from--I mean, they are brick, they are not
terrible, but they are old buildings. But you should see what
they have done on the inside. It is unbelievable with
computers, and carpets, and lighting, and everything. We have
also built a very expensive hospital down there, and one of the
buildings, you cannot tear down, so we will make that the
administration building. So you know, there is something.
But what I wanted to ask you, I have told General Van
Antwerp this story, and it has to do with family housing. I was
over in Korea last fall, and I was having lunch with a group of
soldiers. And you know, you go around the table from the state,
I am from Fairfax, Alexandria, Fredericksburg, Richmond, and I
get to this last one, and he says, Congressman, I am from Fort
Lee, Virginia, and my family is living in the house while I am
over here that you helped build. And I will tell you, I have
never had a feeling in my life like that. But it was on base.
And this is what I am asking you. I tried when I was on
military construction to do something simple like the Virginia
Housing and Development Authority, to loan money to sailors,
because the Navy was in a position not to guarantee completely;
but if you are an east coast sailor, you will usually be placed
in Norfolk. If you are a west coast sailor, you would be in San
Diego or Bremerton. So they could buy a house, even the lower
enlisted person with very little interest rate.
But how important do you think--and I know this is true
with the Army. And of course, now, with the new expedition in
the Air Force and Marine Corps, how important is it living on
base in a family atmosphere where a young man or woman knows
that when they are overseas, their family is in a family group.
How would you weigh the importance of that?
General Van Antwerp. Sir, I would say from an Army
standpoint, it is very important. If you just look at the
waiting list of people wanting to move on post, you will find
they are enormous. They can run two years, over two years.
Right now, we house about 25 percent of our people on our
installations, so the majority of people live off the
installation. But there is no question that it is the most
attractive, both probably from a financial standpoint, from a
community security standpoint, from having all of the benefits
of living on post for the activities that are there for youth,
just a lot of pluses why you want to do that.
But we--you know, our deficit on post is huge, if we would
try and bring the percentage up much.
Mr. Ortiz. And if I may, I think that because the military
owns the land, if there is enough land on base, then it would
be cheaper to build--and correct me if I am wrong--than it
would be to, either if it is a joint venture on the outside,
because of the land that is owned. Now, many of the bases might
not have as much land. But maybe you can add that to the
question that Mr. Sisisky just asked.
General Van Antwerp. I would just--in our one housing
privatization that we awarded recently at Fort Carson,
Colorado, part of that contract is to build 800 new sets. Of
that 800 sets, that number was devised in working with the
local population. We are finding that out in the economy, they
can do mostly the two bedrooms. But the three and four bedrooms
for our junior people, what they can't get out on the economy
for what their allowance is, that is what we are going to build
on the installation. And with that land, the little cost of
land, if you have the space, it is a winner. So you are exactly
on target there, sir.
Mr. Ortiz. Admiral.
Admiral Smith. Thank you, sir. First off, to say the Navy
is for the large part coastal and urban, over 80 percent of our
sailors live out in town in the community right now. That
doesn't mean that the socialization that is offered by being on
base and living in the community isn't of value to us,
especially, when our sailors will deploy for six months or
longer at a time. So that is an important thing to us to be
able to provide to our service members.
Within the seven Planning, Programming and Budgeting (PPB)
actions we have ongoing right now, some of them in Texas, we
are also looking at using some of the authorities that the
Virginia Housing Development Authority (VHDA) has in the
Tidewater area. Land fleet had already proposed yet another
pilot project; and they brought that to Washington, and we are
talking to the Navy Secretary and Mr. Yim's staff about perhaps
proposing that forward. I mean, that is not soup yet, but I
think you all will be hearing from us shortly about that
because, again, that is a wonderful agency down there. And our
goal, as always, whether it is married family housing or
bachelor housing, is to try to help more sailors faster.
Mr. Sisisky. I will tell you what made me ask the question
if you really want to know the truth, other than that young man
thrilling me in Korea. We were interviewing dependent wives
after Kosovo. I went down to Norfolk with the President and the
Secretary of Defense. And one of the dependent wives said, you
know, what really worries me--and she said, not in Norfolk,
Virginia, because this is a military town, not in Norfolk,
Virginia; but we are kind of treated like being on welfare all
the time--we are second class citizens. People think we just
get doles out from the government, and she was very sincere.
She was in other places that I have been. She said I just want
to make it plain, that this isn't Norfolk.
And I wonder if that permeates through the system. That is
why I mentioned the on-base housing versus the off-base
housing.
Secretary Yim. I think, Congressman, that I have to give a
slightly different view, too. There is some doubt on the other
side, in fairness to the issue, that particularly with families
now that have working spouses, that if they could afford better
quarters off-base, that they would prefer to live off-base.
There was a recent study, for example, to that effect. Now,
there is always going to be a need, always a need for on-base
housing. We are never going to go completely away from that. We
also are privatizing on-base housing so we can keep it on base
but have the management responsibility shifted to the private
sector, and there is some benefits of doing that.
When we overbuild on-base housing, there is quite a tale
that goes along with it--roads, and support centers, and child
care centers, and schools, et cetera. So there is quite an
associated cost that sometimes also can be shifted to the
community. I think that the increases in the basic allowance
for housing, we are going to see does it really drive down a
lot of the requirements. Is the Rand study correct, are people
going to prefer to live off base? And I think we are going to
see a mix of people still preferring to live on base, but more
and more people actually preferring the off-base alternatives
if they can afford quality quarters.
Mr. Sisisky. If they can buy now. May I--because this is
something that is bothering me, and I haven't been on a
military construction subcommittee to really get in it. I was
in it for a while. Do we have any real estate experts in the
Department of Defense now? I mean, for leasing. Let me tell you
why. I raised cain--I mean, you can't believe--over Southcom's
leasing down in Miami. I could not believe that anything like
that--and then, you know, the government Corps of Engineers did
it, but he doesn't have the expertise to do it. I doubt whether
you gentlemen have the expertise. But there are people that are
skilled, that knowing how to make a deal, you know, and maybe
you are the ones. I don't know.
But do we have anybody, because Mr. Hamre promised me he
was going to get some people in there that really were experts,
because you mentioned privatization on federal land; and you
are getting complicated deals here that are not easy deals,
because you may say you are 100 years behind, but we are going
to catch up through privatization; and it may be costing so
much money that you are really not catching up.
Secretary Yim. That is a concern, sir. And I mentioned that
we needed to get better knowledge management tools out in the
field. There is a lot of in-house, it is smart people. And it
is not because they are not smart, it is because they don't
have the experience. This is a very different deal for us, and
this is not a housing construction project. What we are looking
at is a management project over time. The deals don't crash and
burn in the first couple of years because they look like a
standard construction project and we can do that. They will
crash and burn if the financial or cash flows aren't sufficient
to be able to do the repair and replace the roofs in the tenth
year, or the fifteenth year, or the O&M account isn't
sufficiently funded and the guys go bankrupt on us.
A lot of people, a lot of the services are augmenting with
outside real estate experts that have worked this issue for
either public entities or for private sector and bringing on
that expertise and really learning how to do this. That is why
we have had, frankly, a slow pace of housing privatization.
Mr. Sisisky. It has been slow, there is no question about
that.
Secretary Yim. And I think we, justifiably, should be
criticized for it has been slow. We have had some fits and
starts. This is all part of this kind of market research,
because we didn't even really know, frankly, what to ask for
when we went out to the private sector. And I think we are
getting better on that.
Mr. Sisisky. All right. I will let everybody go to lunch.
Mr. Ortiz. Just one more question if nobody else has any
questions. You know, I know that industry has a cost analysis
system, more or less, how much it costs to maintain a square
foot of building. And when you look at that, it may be a newer
facility versus an older facility. Could you give me the
difference, more or less, how much it would cost to maintain a
newer facility and an old facility?
Secretary Yim. I think that I will need to take that one
for the record, because there will be a variety of different
factors. So let me not just give you a cavalier attitude or
answer. We will look at that more closely. That is what we
tried to do with this costing handbook, is to try to get
commercially benchmarked measurements on what it would cost to
maintain both old and new facilities.
Mr. Ortiz. Thanks, Mr. Secretary. General.
General Van Antwerp. Sir, I would just say that right now
in the Army, we are around $3.50 per square foot, but that is
for all the buildings. And as you recognize, if it is a new
building, it could be less. I personally think, based on the
private sector and what we found, it is somewhere in the $5 to
$6 range, $5 to $6 a square foot. It is very dependent on the
type of building, the type of use. A warehouse space is much
less than a child care center, for instance. So it has some
dependence on that. But it is up in the $5 to $6 range, I would
think.
Mr. Ortiz. Thank you. Anybody else? If not, we want to
thank--I am sorry.
General Mashburn. Sir, if I could address Mr. Sisisky's
question concerning base housing and the requirements for
dependents of deploying members; historically, we have found
that we have concentrated so much on the 25 to 30 percent of
our military families who live on base and we greatly neglected
that 70 to 75 percent who lived off. We found that many of our
young Marine families desire to go to their home and be with
their parents and family when our young Marines deploy. So I
think in the entire package of benefits, we really must
concentrate on Basic Allowance for Housing (BAH), medical
benefits, so that when they go home, they feel like they are
still part of the military.
Mr. Ortiz. Thank you, sir. If there is no further
questions--he moves, Mr. Sisisky. I am glad he is my friend.
Let me thank Mr. Secretary and all of you for being here. I
think that this was a very informative hearing this morning. We
want to thank you, and if there is no further business, this
meeting is adjourned.
[Whereupon, at 12:15 p.m., the subcommittee was adjourned.]
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A P P E N D I X
March 1, 2000
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PREPARED STATEMENTS SUBMITTED FOR THE RECORD
March 1, 2000
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QUESTIONS AND ANSWERS SUBMITTED FOR THE RECORD
March 1, 2000
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QUESTIONS SUBMITTED BY MR. BATEMAN
Mr. Bateman. BACKGROUND: GAO noted in its opening statement that
before 1996, base operations and real property maintenance were not
separately identified. Since then, the services have budgeted and
obligated money to each of these areas separately. Real property
maintenance funds are used to maintain and repair buildings,
structures, warehouses, roadways, runways, railway tracks and utility
plants. Base operations funding is used for services such as utilities,
base communications, snow removal, security, and morale, welfare, and
recreations activities.
What brought about this change in the military services' budget
structure in 1996?
Mr. Curtin. A Department of Defense program decision memorandum
dated October 27, 1994, directed the Under Secretary of Defense
(Comptroller) to lead a study to develop alternative budget structures
and reporting methods for the operations and maintenance (O&M)
appropriations. The objective was to determine if changes should be
made to improve visibility into planning, programming, and execution.
DOD considered real property maintenance funded through O&M significant
not only in dollar terms ($5.1 billion in FY 1996) but also in terms of
the quality of life of DOD personnel, and therefore personnel morale
and readiness. Although real property maintenance was separately
identified in the budget structure for the military services budget
estimate submission it was merged with base operations in the
President's budget request. The merger created a base support O&M
program that was nearly 19% of the O&M budget in fiscal year 1996.
Thus, to improve visibility of both real property maintenance and base
operations the study recommended separate identity in the O&M budget
structure for these two areas.
Mr. Bateman. BACKGROUND: GAO noted in its testimony that during
fiscal years 1996 through 1999, the services' reported obligations were
$2.7 billion (4.5 percent) more for base operations and real property
maintenance than the initial congressional designation of $61.2
billion. GAO identified most of the increase as going toward base
operations.
Which service has the greatest concentration of this movement and
has the trend to move funds into base operations decreased or
increased?
Mr. Curtin. During fiscal year 1996 through 1999, of all the
services, the Army had the greatest movement of operation and
maintenance funds, totaling over $1.2 billion, into base operations.
Every year during this period the Army moved funds into base
operations. While the trend varied the Army moved the most funds into
base operations in fiscal year 1996, about $502 million, and the least
funds in fiscal year 1998, about $71 million. However, the Air Force
consistently moved over $900 million to base operations during the same
period. The Air Force moved the greatest amount into base operations in
fiscal year 1999, over $519 million, and the least amount in fiscal
year 1997, over $72 million.
Mr. Bateman. BACKGROUND: GAO noted in its statement that it is not
possible to trace the origins of all funds moved into or out of budget
subactivities, such as unit training. However, GAO goes on to say that
in fiscal years 1997 and 1998 the Army moved about $641 million from
unit training to real property maintenance and base operations.
If this movement is not traceable, how did GAO identify that $641
million was moved from unit training to real property maintenance?
Mr. Curtin. DOD is required to provide detailed data on budget
movements for high-priority readiness-related budget subactivities.
These reports describe movements of funds for some of the subactivities
designated as high-priority by Congress and must include the total
amounts moved into and out of these subactivities and an explanation of
the reasons for the movement. It was through these reports that we were
able to identify the $641 million moved from training to real property
maintenance and base operations by the Army and $35 million moved from
training to real property maintenance and base operations by the Air
Force.
Mr. Bateman. How much of the $641 million went towards real
property maintenance and how much towards base operations?
Mr. Curtin. Of the $641 million the Army moved, $519 million ($112
million in fiscal year 1998, $407 million in fiscal year 1997) was for
base operations while $122 million was for real property maintenance.
Of the $35 million the Air Force moved, all was for real property
maintenance.
Mr. Bateman. BACKGROUND: The GAO conducted a survey of 517 bases
and major commands. The survey pointed out that major commands only
requested funding for approximately 20 percent of the know RPM needs in
fiscal year 1997. These same commands were actually funded at a rate
even lower than the requested 20 percent of need.
Why did the major commands request so little of the required
funding?
Mr. Curtin. As we reported in September 1999, according to DOD
headquarters facility management officials of each service, funding
real property maintenance is not their services' first priority. An
Army official described it as the last of four priorities. The major
commands and bases understand that this is the culture of real property
maintenance and have acted accordingly--as reflected in the data
reported to us by the commands and the bases.
Mr. Bateman. Do you expect that the same practice goes on today?
Mr. Curtin. DOD's 1999 planning guidance does not specify any
funding level or goals for the maintenance of property, other than
stating that the services are to fund maintenance at a level they
consider adequate to execute missions. DOD told us that the 1999
language retreats from guidance provided in 1996, which directed the
services to provide sufficient funding to reverse deterioration of
facilities and to improve their effectiveness.
Mr. Bateman. Does this indicate that perhaps the backlog is, in
fact, greater than what the services or DOD now thinks it to be?
Mr. Curtin. As of October 1999, the services were projecting
increases in their repair backlogs because they planned to fund
maintenance and repair below identified needs over the next several
years. For example, the Air Force has planned no money at all for
repair projects until fiscal year 2003 (although it plans to spend some
funds on emergency minor repairs and other forms of what it terms
preventive maintenance). The services rate the urgency of their
backlogs differently, and in the absence of a single rating system, it
is difficult to determine how urgent these needs truly are. Therefore,
simply providing additional funding will not ensure that the most
important deficiencies are funded first or that buildings with repair
needs exceeding a large percentage of their replacement value are not
demolished instead (saving money in the long run).
Mr. Bateman. BACKGROUND: As a result of the work that GAO and
others have done in researching RPM and the problem of the continued
growth in the backlog in maintenance, the GAO has identified a number
of things that could be done to manage the problem better.
What are the top two or three things that DOD and/or the services
could do to help get control of RPM and the continuous growth of the
backlog?
Mr. Curtin. As we reported in September 1999,<SUP>1</SUP> DOD does
not have a comprehensive strategy for managing its maintenance and
repair needs. Rather, each service sets its own standards for
maintaining infrastructure. Without standard assessment criteria, DOD
cannot compare maintenance costs or facility conditions across the
services. This hampers the development of a sound strategy for managing
the upkeep of the military's infrastructure. Further, the services
cannot ensure that their ratings of facilities' conditions are valid or
reliable either at individual bases or within each of the services
because facility assessors do not apply their service's criteria
consistently. Thus, DOD's strategy should include:
---------------------------------------------------------------------------
\1\ Military Infrastructure: Real Property Management Needs
Improvement (GAO/NSIAD-99-1000, Sept. 7, 1999).
---------------------------------------------------------------------------
<bullet> Uniform standards that set the minimum condition in which
military facilities are to be maintained and standardized condition
assessment criteria;
<bullet> Standard criteria by which the services are to allocate
space for different types of facilities, (e.g. barracks, classrooms,
administrative buildings) and against which RPM funding allocations
will be measured;
<bullet> Standard criteria for inventorying DOD and service
property (except for relatively few service-unique facilities).
Use of Training Funds to Pay for Base Operations and RPM
Mr. Bateman. BACKGROUND: The military services' principal source of
funding for RPM and base operations is their O&M appropriations, and
the Services have flexibility in using those funds. Congress is
concerned about moving funds from unit training to RPM and base ops and
the impact on readiness.
Who decides to use O&M funds, such as those for unit training, to
pay for base operations or real property maintenance and what
procedures are in place to monitor those decisions?
Secretary Yim. Normally, the installation commander or the major
command commander makes the decision to migrate unit training funds to
base operations or real property maintenance (RPM) accounts, or
conversely from base operations and RPM to unit training. These
commanders must balance priorities and requirements during the course
of the fiscal year to ensure continued unit readiness, thus they
require the flexibility to transfer funds between accounts where and
when necessary. These commanders are in the best position to maximize
the benefit from available funding in meeting unit training and
installation mission needs. Congress and DOD have established
guidelines that enable any transfer of funds within readiness accounts
to be tracked at the Service headquarters level. Proposed transfers of
funds between budget activities in excess of $15 million are subject to
Congressional approval. This requires written notification to the
Congress for the cumulative value of transfers in excess of $15 million
into or out of operating tempo subactivity groups (SAGs). A Re-
baselining Report is sent to Congress in February which identifies any
Congressional and Service adjustments (transfers) made in conjunction
with release of the O&M appropriation to the Service Major Commands. A
monthly report is provided by the Defense Finance and Accounting System
(DFAS) to Congress that shows current obligation data and any transfer
of funding between SAGs. Reports are also provided to Congress for any
major reprogramming actions that require approval.
Movement of Funds From Unit Training to Pay for Real Property and Base
Operations
Mr. Bateman. Who decides to use O&M funds, such as those for unit
training, to pay for base operations or real property maintenance and
what procedures are in place to monitor those decisions?
General Van Antwerp. Generally the field troop unit commander, who
is frequently also the installation commander, or the major command
(MACOM) commander, makes the decisions on migrating O&M funds, such as
unit training funds, to other purposes. These commanders must balance
priorities during the course of the fiscal year to ensure continued
unit readiness, thus they require some flexibility to transfer funds
between accounts when necessary. These commanders are in the best
position to maximize the benefit from available funding in meeting unit
training needs and installation mission needs.
Congress and DOD have established guidelines that enable any
transfer of funds within readiness accounts to be tracked at the
Headquarters, Department of the Army (HQDA) level. Tools used include:
<bullet> Restrictions: Proposed transfers of funds between budget
activities in excess of $15 million are subject to Congressional
approval. In addition, transfers in excess of $15 million into or out
of the Operations and Maintenance, Army (OMA) appropriation Depot
Maintenance subactivity group (SAG) are also subject to this rule.
Written notification to Congress for the cumulative value of transfers
in excess of $15 million into or out of operating tempo (OPTEMPO) SAGs
is required. The conventional ammunition account has a statutory floor
of $355 million.
<bullet> Rebaselining Report: Report sent to Congress in February
which identifies any Congressional and HQDA adjustments (transfers)
made in conjunction with release of the OMA appropriation to the
MACOMs.
<bullet> 1002 report: Monthly report provided by Defense Finance
and Accounting System (DFAS) to Congress that provides current
obligation data and shows any transfer of funding between SAGs.
<bullet> 1415s Provided to Congress for the major reprogramming
actions that require approval.
Admiral Smith. O&M funds used for base operating support (BOS) and
real property maintenance (RPM) are managed by Navy claimant commands
per the guidelines of their submitted budgets and funding
authorizations. Within a given budget activity, decisions to move funds
between sub activity groups, including BOS and RPM, are made by the
claimant. However, realignments between budget activities and proposed
increases or decreases to Congressional special interest items require
advance approval from Navy Comptroller staff, which monitors and
controls such actions via internal Navy tracking procedures. In a few
cases, Congressional approval is also required. As funds are moved
between programs, Navy BOS and RPM have historically been used as a
source to augment unit training and operational requirements, rather
than the recipient of such transfers.
General Robbins. The AF maintains a delicate balance between
mission and support areas. In order to maintain this daily balance,
commanders are required to continually evaluate funding required for
mission sustainment and support areas. Additionally, they must be
allowed to ultimately determine when funds budgeted for one purpose are
used for another such as read property maintenance or support of base
operations. Their evaluation is based upon a close and immediate
knowledge of the competing requirements, the current availability of
O&M funding within their units, and the impact on the accounts to be
offset. As the data which comprised the input for the annual
President's Budget is finalized almost a year in advance of actual
appropriation by Congress, it is impossible to forecast with 100
percent accuracy the actual daily requirements to which a local
commander must react. The commander is entrusted with the
responsibility to perform his Air Force mission and is expected to take
actions necessary to get the job done. Given the funding constraints,
the demands placed upon the Air Force, and the age of our equipment and
facilities, funding flexibility in the O&M account is absolutely
essential. Should the financial ability to react to changing
circumstances be further curtailed by more severely constraining our
commanders' ability to react to our ever-changing environment, the
overall mission readiness of the Air Force will be adversely impacted.
General Mashburn. The Marine Corps historically has not moved funds
from unit training to real property maintenance or base operations.
Unit training is as close as the Marine Corps gets to having an
``untouchable program.'' Since operational readiness is the cornerstone
of the Marine Corps' ability to be the nation's ``9-1-1 Force,''
operating forces funding, of which unit training falls under, is a top
priority.
Despite executing unit training programs as budgeted, training is
sometimes not at the level hoped for and readiness is not at 100
percent. The Marine Corps tracks readiness using our Status of
Resources and Training System (SORTS) along with the Global On-line
Marine Edit and Report System (GOMERS). These reports provide a macro-
overview of a unit's personnel manning, equipment and supply fill,
equipment readiness and training as assessed by the unit commander.
Readiness information is then sent to the Pentagon and is accessible at
Headquarters Marine Corps (HQMC).
Last, Headquarters Marine Corps trusts and empowers the fleet
commanders to move funds from one program to another to meet the
operational requirements of their command within threshold limits. The
commanders at Marine Forces Atlantic, Pacific and Reserve are closer to
problems as they arise, and they can identify organic unit trends
before HQMC can. The Marine Corps is very attentive to the needs of its
Operational Commanders, as that is where we interrelate with the CINCs
and execute contingencies, exercises and operations.
Mr. Bateman. How do the services determine what the impact on
readiness will be if they move funds from unit training to real
property maintenance or base operations? More specifically, who tracks
the readiness implications of this movement?
Secretary Yim. Realignments between budget activities and proposed
increases or decreases to Congressional special interest items require
advance approval from the Services' Comptroller staffs, which monitor
and control such actions via internal tracking procedures. The impacts
of these decisions are tracked at the Service headquarters level using
annual readiness and execution reports.
General Van Antwerp. Commanders assess their unit's current
readiness level and make training and resourcing decisions based upon
their unique situation. The commander in the field is in the best
position with the perspective to make these decisions. At a macro
level, readiness is monitored using the Unit Status Report (USR), which
is submitted monthly to Headquarters, Department of the Army (HQDA).
HQDA relies on the commanders' comments on the USR to identify any
problems relating to training, training enablers, real property
maintenance or base operations that would adversely affect readiness.
HQDA works with the major commands to resolve resourcing issues that
impact unit readiness.
Admiral Smith. As noted in the recent March 2000, GAO Report,
Analysis of Real Property Maintenance and Base Operations Fund
Movements, (GAO/NSIAD-00-87, February 29, 2000) the Navy has
consistently moved funds into unit training, increasing them by $1.9
billion from FY94 to FY99. However, as indicated in the response to
question 1 above, realignments between budget activities and proposed
increases or decreases to Congressional special interest items require
advance approval from Navy Comptroller staff, which monitors and
controls such actions via internal Navy tracking procedures. The
impacts of these decisions are tracked at the headquarters level using
our annual readiness and execution reports.
General Robbins. Commanders are required to continuously assess the
readiness of their units, however readiness is more than just flying
training. It encompasses a myriad of activities including maintaining
structurally sound facilities in which to perform maintenance, training
and other support functions. In addition, unit readiness requires
assigned personnel to be fed, housed, paid and otherwise supported so
they can perform their mission. Perhaps the most difficult decision
expected of any commander is to maintain the delicate balance between
unit training and the essential functions supporting that training and
military readiness. The Air Force delegates the authority to move funds
within budget activities to commanders to ensure the decision is made
by the person closest to the problems.
General Mashburn. The Marine Corps historically has not moved funds
from unit training to real property maintenance or base operations.
Unit training programs are as close the Marine Corps gets to having an
``untouchable program.'' Since operational readiness is the cornerstone
of the Marine Corps' ability to be the nation's ``9-1-1 Force,''
operating forces funding, of which unit training falls under, is a top
priority.
Despite executing unit training programs as budgeted, training is
sometimes not at the level hoped for and readiness is not at 100
percent. The Marine Corps tracks readiness using our Status of
Resources and Training System (SORTS) along with the Global On-line
Marine Edit and Report System (GOMERS). These reports provide a macro-
overview of a unit's personnel manning, equipment and supply fill,
equipment readiness and training as assessed by the unit commander.
Readiness information is then sent to the Pentagon and is accessible at
Headquarters Marine Corps (HQMC).
Last, Headquarters Marine Corps trusts and empowers the fleet
commanders to move funds from one program to another to meet the
operational requirements of their command within threshold limits. The
commanders at Marine Forces Atlantic, Pacific and Reserve are closer to
problems as they arise, and they can identify organic unit trends
before HQMC can. The Marine Corps is very attentive to the needs of its
Operational Commanders, as that is where we interrelate with the CINCs
and execute contingencies, exercises and operations.
Funding for Facilities Strategic Plan
Mr. Bateman. BACKGROUND: In a May 1997 GAO Report--Defense
Infrastructure: Demolition of Unneeded Buildings Can Help Avoid
Operation Cost, (GAO/NSIAD-97-125, May 13, 1997)--GAO found that DOD
and the services did not have complete, reliable information on the
costs associated with either maintaining their current facilities
infrastructure or with infrastructure reduction options. Such
information is needed to develop a department-wide strategic plan that
considers difficult infrastructure options to meet the requirements of
the Government Performance and Results Act (Public Law 103-62) which
requires federal agencies to develop agency wide strategic plans.
Further, such information is critical to meet the requirements for more
complete disclosure of the costs, associated with facilities' deferred
maintenance and demolition in financial statements, called for by the
Chief Financial Officers' Act of 1990.
To collaborate, in another GAO Report--Military Infrastructure:
Real Property Management Needs Improvement, (GAO/NSIAD-99-100,
September 7, 1999)--GAO again noted that DOD does not have a
comprehensive strategy for maintaining the services' infrastructure.
Rather, each service sets its own standards for maintaining
infrastructure. As a result, the services differ in the way they rate
property conditions, prioritize repairs, and allocate resources. For
example, a barracks rated ``satisfactory'' by one service may be rated
as ``unsatisfactory'' by another. GAO reported that although DOD funded
development of a strategic maintenance plan in its fiscal year 1999
budget, it shifted the funding to other priorities in early 1999.
What were the other priorities that required the funding planned
for the development of a strategic maintenance plan?
Secretary Yim. The draft DOD Facilities Strategic Plan was not
formally published due to constrained funding in the OSD studies
program. With regard to facility maintenance, specifically, the OSD
studies program did fund the research to support the Facilities
Sustainment Model, which is a major element of the overall strategic
plan.
General Van Antwerp. The draft DOD Facilities Strategic Plan, which
was put together by a cross-Department Working Group two years ago, has
not been formally published due to a need to update the plan and to
constrained funding in the OSD studies program. Before publishing the
plan, it needs to be updated as a result of initiatives we've taken
based on the draft plan and to incorporate recommendations from recent
GAO reports on Real Property Management.
Admiral Smith. The draft DOD Facilities Strategic Plan has not been
formally published due to constrained funding in the OSD studies
program.
General Robbins. The draft DOD Facilities Strategic Plan has not
been published due to constrained funding in the OSD studies program.
However, OSD is pressing ahead with many of the initiatives developed
by the OSD-led planning group. We fully support their efforts on the
Plan.
General Mashburn. The strategic plan was being developed by DOD
with the participation of the services. The draft DOD Facilities
Strategic Plan has not been formally published due to constrained
funding in the OSD studies program. I defer to DOD concerning the other
requirements.
Status of Facilities Strategic Plan
Mr. Bateman. BACKGROUND: In a May 1997 GAO Report--Defense
Infrastructure: Demolition of Unneeded Buildings Can Help Avoid
Operation Cost, (GAO/NSIAD-97-125, May 13, 1997)--GAO found that DOD
and the services did not have complete, reliable information on the
costs associated with either maintaining their current facilities
infrastructure or with infrastructure reduction options. Such
information is needed to develop a department-wide strategic plan that
considers difficult infrastructure options to meet the requirements of
the Government Performance and Results Act (Public Law 103-62) which
requires federal agencies to develop agency wide strategic plans.
Further, such information is critical to meet the requirements for more
complete disclosure of the costs, associated with facilities' deferred
maintenance and demolition in financial statements, called for by the
Chief Financial Officers' Act of 1990.
To collaborate, in another GAO Report--Military Infrastructure:
Real Property Management Needs Improvement, (GAO/NSIAD-99-100,
September 7, 1999)--GAO again noted that DOD does not have a
comprehensive strategy for maintaining the services' infrastructure.
Rather, each service sets its own standards for maintaining
infrastructure. As a result, the services differ in the way they rate
property conditions, prioritize repairs, and allocate resources. For
example, a barracks rated ``satisfactory'' by one service may be rated
as ``unsatisfactory'' by another. GAO reported that although DOD funded
development of a strategic maintenance plan in its fiscal year 1999
budget, it shifted the funding to other priorities in early 1999.
What is the current status of development of a strategic plan?
Secretary Yim. Only formal publishing of the plan is on hold. OSD
and the Services have been actively working over the last two years to
implement several of the initiatives in the draft plan. For example,
the draft plan called for an initiative to ``better define RPM
requirements'' and to ``develop better asset management tools'' which
lead directly to the Facilities Sustainment Model (FSM). The draft plan
also called for things like the Facilities Aging Model, two more rounds
of BRAC, and better utilization (e.g. joint use). While we have not
formally published the plan, we are working to implement the high
priority initiatives, and we have established the Installations Policy
Board (IPB) to oversee it.
General Van Antwerp. The current status is that formal publishing
of the entire plan is on hold. OSD and the Services have been actively
working over the last two years to implement several of the initiatives
in the draft plan--for example, the draft plan called for an initiative
to ``better define RPM requirements'' and to ``develop better asset
management tools''--which leads directly to the Facilities Sustainment
Model (FSM). The draft plan also called for things like the Facilities
Aging Model, two more rounds of BRAC, and better utilization (e.g.
joint use). While we have not formally published the plan, we are
working to implement the high priority initiatives, and we have
established the Installations Policy Board (IPB) to oversee it.
Admiral Smith. The current status is that formal publishing of the
entire plan is on hold but OSD and the Services are working to
implement several of the plan's initiatives, including an initiative to
improve the facilities maintenance and repair programs via the
Facilities Sustainment Model.
General Robbins. The current status is that formal publishing of
the entire plan is on hold. We fully support DOD's efforts and have
been actively supporting several initiatives in the draft plan. For
example, we are pressing ahead on improvements to our Facilities
Sustainment Model (FSM) and the Facilities Aging Model in support for
the plan.
General Mashburn. Formal publishing of the entire plan is on hold.
However, OSD and the Services are working to implement several of the
plan's initiatives, including one to improve facilities maintenance and
repair programs via the Facilities Sustainment Model.
RPM Backlog and Prioritizing RPM Spending
Mr. Bateman. BACKGROUND: In a GAO Report, Defense Infrastructure:
Demolition of Unneeded Buildings Can Help Avoid Operation Costs, (GAO/
NSIAD-97-125), GAO stated that with the post-cold war drawdown, DOD
facilities worldwide, as measured by square feet of space, were reduced
by about 10 percent through BRAC rounds. During that same period, RPM
funding was cut by an estimated 40 percent. This led to a backlog of
M&R projects in the Services. In another GAO Report, Military
Infrastructure: Real Property Management Needs Improvement, (GAO/NSIAD-
99-100, Sep. 7, 1999), DOD estimated that the backlog had grown from
about $8.9 billion in 1992 to $14.6 billion in 1998.
What are the Services' current estimates for the real property
maintenance backlog? How do the services prioritize spending to address
the most pressing or urgent, real property maintenance needs?
Secretary Yim. Backlog by itself is not a total indicator of the
requirement for maintenance and repair funding in any one year since it
does not address the need for annual sustainment funding. The backlog
might be best understood as accumulated repair work (excluding non-
repair work) resulting from constrained maintenance and repair funding
in previous years. With this caveat, the reported numbers are:
Army: $15.4 Billion
Navy: $2.8 Billion (critical backlog only)
Air Force: $4.3 Billion
Marine Corps: $717 Million
The Services generally leave it up to their major commands to
distribute RPM funds to their installations. Their major command and
installation commanders are at the highest level for prioritizing RPM
requirements because they know their facility maintenance and repair
requirements and how best to utilize the scarce RPM funding. Generally,
they prioritize their spending to correct deficiencies that have the
largest impact on mission readiness and that contribute to C3 or C4
ratings on the annual base readiness report.
General Van Antwerp. Sir, I would just say that right now in the
Army, we are around $3.50 psf, but that is for all the buildings. . . .
a new building could be less. . . . based on the private sector . . .
it is somewhere in the $5 to $6 range per square foot. It is very
dependent on the type of building . . .
It does cost more to maintain an older facility vice a newer one.
Based on ``The Whitestone Building Maintenance and Repair Cost
Reference 1999,'' it costs about 60% more to maintain an older
facility. Using facilities sustainment costs from ``Whitestone'', a 2-
story office building that's 1-10 years old would cost an average $1.03
per square foot to sustain (maintain) annually. This price does not
include repairs and operating services such as washing floors and
cutting grass. That same facility, when it is adequately sustained over
its life, would cost an average $1.71 per square foot when it is 41-50
years old. For a 50-room dormitory, it's $2.18 for a newer building
vice $3.50 for an older one. Now that's a powerful argument for
recapitalizing--that means our average 40+ year old physical plant is
costing us 60% more to sustain than it would if we could drive the
average age down toward 10 years or so. If we have a $5 billion RPM
requirement now, we'd have a $3 billion requirement then.
The services generally leave it up to their major commands to
distribute sustainment (RPM) funds to their installations. Their major
command and installation commanders are at the highest level for
prioritizing RPM requirements because they know their facility
maintenance and repair requirements and how best to utilize the scarce
RPM funding. Generally, they prioritize their spending to correct
deficiencies that have the largest impact on mission readiness and that
contribute to C3 or C4 ratings on the annual base readiness report.
Admiral Smith. The Navy's critical RPM backlog at the end of FY99
was $2.8 billion.
Major claimants and regional commanders prioritize their special
projects program to correct deficiencies that have the largest impact
on mission readiness and that contribute, to C3 or C4 ratings on the
annual base readiness report. For deficiencies that are below special
project scope, each installation prioritizes their unfunded critical
deficiencies in their Maintenance Action Plan, which provides the
execution plan for the coming fiscal year.
General Robbins. The Air Force current total force backlog of real
property maintenance is $4.3B (FY01), which is based on those
requirements with the greatest mission impact (Critical and degraded)
which remain unfunded at the end of the fiscal year. Real property
maintenance (RPM) is funded at what we call the Preventive Maintenance
Level (PML) to accomplish only the day-to-day maintenance required to
sustain real property facilities and infrastructure. For affordability
considerations the Air Force calculates its PML funding level at one
percent of our plant replacement value. We also have a tool we call the
Facility Investment Metric (FIM) which stratifies facility requirements
based on mission impact. Installation and Major Command Commanders must
make the difficult decision to fund PML work while deferring FIM
identified projects or fund the most critical FIM projects while
deferring maintenance work.
General Mashburn. The projected real property maintenance backlogs
for the years 2000, 2001 and 2002 are $685 million, $666 million, and
$665 million respectively.
The Marine Corps has two complementary methods for prioritizing
real property needs. First, it provides over half of its real property
maintenance funding directly to the base commander to use on day-to-day
maintenance requirements. These funds pay for salaries, materials and
contracts required to take care of recurring and emergency maintenance,
along with small repair and minor construction contracts. The base
commander is in the best position to select the small projects that
need to be done to keep the base running.
Second, those projects costing over $300,000 are field validated by
representatives from Headquarters Marine Corps. These projects receive
a rating score based on facility type and condition, cost savings and
base priority. Headquarters then prioritizes projects Marine Corps wide
and provides funding on a project by project basis to make sure the
most urgent work is being done.
Finally, the process can now be checked using a mission readiness
rating system. Using this system we can evaluate if the funds are being
applied, at the individual base level, to the areas that show the
lowest mission readiness.
Budget Requests for Operating and Maintaining Bases and Related Real
Property
Mr. Bateman. Why is the Army not submitting realistic budget
requests that would fully fund the costs for operating and maintaining
bases and related real property?
General Van Antwerp. The Army works in a funding constrained
environment. With each funding decision comes risk balanced against the
benefits of funding one action over another. Headquarters, Department
of the Army also recognizes the importance of facility condition on
readiness and the need for more RPM funding. Therefore the Army future
years development program (FYDP), as of President's Budget 2001,
increases RPM over the FYDP for fiscal years 2001 through 2005 by
ramping to 80% of requirement by fiscal year 2005. Because of the
significance of the RPM shortfall, the Army also identified $250
million, ranked number eight in the first band (Readiness) of unfunded
priorities, should additional funds be made available for fiscal year
2001.
Readiness Balance
Mr. Bateman. How do Army commanders balance the increased readiness
risk by decreasing the desired operating tempo requirements?
Specifically, how is readiness affected by continually achieving less
in operating tempo goals? What units are affected the most? Please be
specific.
General Van Antwerp. Army commanders cannot change OPTEMPO
requirements because they are based upon the Combined Arms Training
Strategy (CATS). However, the commander does have the flexibility to
make the decisions on where to take risk in a limited funding
environment. Most of the funds migrated from OPTEMPO are used for unit
training enablers, such as ranges, base operations (BASOPS) and real
property maintenance (RPM). There are other alternatives that
commanders use to manage risk that do not have a short-term adverse
affect on readiness. For example, the commander can defer maintenance
while maintaining the unit's equipment readiness rating. In the long
term, deferred maintenance may be reflected in a lower equipment
readiness rate. In summary, every unit is affected by its individual
circumstances and the commander's decisions based upon the situation
and resources available.
Funding Source for Real Property Maintenance in FY98
Mr. Bateman. BACKGROUND: The Air Force reported that it moved $155
million into its operating forces real property maintenance budget
subactivity but did not indicate where the funds came from in the
fiscal year 1998 high-priority readiness-related transfer report. The
Air Force did state, however, the funds were needed for repairs to
runways, maintenance hangers, utility systems, roofs and other real
property assets.
What was the funding source for the $155 million used for real
property maintenance in fiscal year 1998?
Depending upon the budget subactivity that was the source for this
funding, how was affected-subactivity impacted?
General Robbins. Funding was sourced by field commanders from
various accounts which would suffer the least impact. Specific
reporting systems do not track the specific movement of funds.
______
QUESTIONS SUBMITTED BY MR. ORTIZ
Mr. Ortiz. Just one more question if nobody else has any questions.
You know, I know that industry has a cost analysis system, more or
less, how much it costs to maintain a square foot of building. And when
you look at that, it may be a newer facility versus an older facility.
Could you give me the difference, more or less, how much it would
cost to maintain a newer facility and an older facility?
Secretary Yim. I think that I will need to take that one for the
record, because there will be a variety of different factors. So let me
not just give you a cavalier attitude or answer. We will look at that
more closely. That is what we tried to do with this costing handbook,
is to try to get commercially benchmarked measurements on what it would
cost to maintain both old and new facilities.
General Van Antwerp. Based on standard, commercial cost factors, a
properly maintained building 40-50 years old costs about 60% more to
sustain (via maintenance and repair) than a new building 1-10 years
old. See the table:
ROUTINE MAINTENANCE AND REPAIR COSTS FOR NEW VERSUS OLD BUILDINGS (PER
SQUARE FOOT) <SUP>1</SUP>
------------------------------------------------------------------------
1-10 Years Old 40-50 Years Old
------------------------------------------------------------------------
Office Building (Two Stories)... $1.03............. $1.71
Dormitory (50 Rooms)............ $2.18............. $3.50
------------------------------------------------------------------------
<SUP>1</SUP> Analysis based on ``Whitestone Building Maintenance and Repair Cost
Reference 1999.'' Costs are for the Washington DC area.
______
QUESTIONS SUBMITTED BY MR. HANSEN
Michael Field, Dugway Proving Ground
Mr. Hansen. Everyone agrees Michael Field is critical and
irreplaceable. No one stepped up to pay the costs of keeping it viable.
If someone does not give me a better answer this year, I intend to take
one of two actions, first transferring Michael Field to the Air Force
and directing them to fund it, or directing the closure of Michael
Field as a danger to anyone who might land there. Can you tell me why
we should not take these drastic actions, and if not when the Army and
Air Force will be solving this problem?
General Van Antwerp. Although the Air Force is the major user of
Michael Field, the Army recognizes the need for Michael Field as a
critical port of entry for the delivery of agents to support tri-
service missions for DOD's Chemical and Biological Defense Program.
NASA has also expressed interest in using the airfield. The estimated
cost for repair of the field is $19 million.
Preventive Maintenance Inspections, and Tracking and Prioritizing RPM
Requirements
Mr. Hansen. The Vice Chiefs testified yesterday that they would not
allow troops to sit in buildings that leak, but instead of the roof
being replaced only the area that leaks would be fixed. . . . we
schedule our tactical equipment to be inspected at regular intervals, a
preventive maintenance checks and services to be exact, that is adhered
to without fail. This helped to identify discrepancies before any sort
of catastrophic failure occurs. If we had this same, or similar, system
for infrastructure, I would imagine we would have more success in
fixing problems before they become an emergency--this ``finger in the
dike'' method used now is going to fail . . . can you comment on that
and what it would take to get DOD on a system that allows all services
to track and prioritize RPM requirements?
General Van Antwerp. The Department of Defense has already
investigated the possibility of doing periodic detailed engineering
inspections of facilities and concluded that it is a good idea, but
unaffordable both in dollars and manpower. The Army implemented the
Installation Status Report (ISR) which provides a non-technical
facility user's inspection of the condition of a facility. This report
provides an installation management tool from which the installation
can develop maintenance and repair trends, potential maintenance and
repair projects, and future RPM requirements. Only installation
commanders can prioritize RPM requirements because only they can judge
the severity of their RPM problems and the risks of doing one project
over another. This is why Headquarters, Department of the Army does not
designate or prioritize RPM projects. The ISR does provide a method at
Army level to track the effectiveness of RPM funding by showing
condition trends for facility types, but tracking specific maintenance
and repair projects would be of little management value at Army
headquarters level.
Michael Field
Mr. Hansen. The Air Force on the other hand is the primary user of
the runway which is the primary divert field for all operations on the
southern range of the UTTR. At least once a month an F-16 emergency
diverts to Michael Field. The Air Force contributes nothing to the
maintenance of this critical asset.
In addition to DOD this field is a critical NASA asset and serves
as a Space shuttle divert field and more importantly as the test site
of the first several flights of emerging technologies such as X-33.
Everyone agrees Michael is critical and irreplaceable. No one has
stepped up to pay the costs of keeping it viable. If someone does not
give me a better answer this year, I intend to take one of two actions,
first transferring Michael Field to the Air Force and directing them to
fund it, or directing the closure of Michael Field as a danger to
anyone who might land there. Can any of you tell me why we should not
take these drastic actions, and if not when the Army and Air Force will
be solving this problem?
General Robbins. Michael Army Airfield (MAAF) is an Army facility
and the Army is responsible for maintenance of this airfield. The Air
Force does use the field as an F-16 emergency divert airfield from the
Utah Test and Training Range (UTTR).
The Air Force recognizes that this issue must be addressed. A
meeting was held 18 April 2000 to further discuss options and
responsibilities for repairs at MAAF. Attendees included 388 FW/CCM,
Dugway Proving Ground Commander, Utah ANG Commandant and MAAF's
Commander and airfield manager. The results are currently being staffed
through Air Combat Command. We will provide an update no later than 30
June 2000.
Track and Prioritize RPM Requirements
Mr. Hansen. The Vice Chiefs testified yesterday that they would not
allow troops to sit in building that leak, but instead of the roof
being replaced only the area that leaks would be fixed . . . we
schedule our tactical equipment to be inspected at regular intervals, a
preventive maintenance checks and services schedule to be exact, that
is adhered to without fail. This helps to identify discrepancies before
any sort of catastrophic failure occurs. If we had this same, or
similar, system for infrastructure, I would imagine we would have more
success in fixing problems before they become an emergency--this
``finger in the dike'' method used now is going to fail . . . can you
comment on that and what it would take to get DOD on a system that
allows all services to track and prioritize RPM requirements?
General Robbins. The Air Force is able to track and prioritize its
facility requirements adequately now. Installations are capable of
identifying their day-to-day maintenance requirements. In addition, our
Facility Investment Metric (FIM) is used to stratify the most critical
facility repair and minor construction requirements in terms of mission
impact. Funding the requirements is the challenge. Commanders must make
the difficult decision, within available funding, whether to fund their
day-to-day requirements and defer FIM projects or whether to fund their
most critical FIM requirements while deferring day-to-day maintenance.
We are working with OSD to develop a Facility Sustainment Model,
which will allow us to better identify our facility and infrastructure
funding requirements using current industry practices. Once the model
is fully implemented and our requirement is determined, we will work
the results through the Air Force corporate structure.
FISCAL YEAR 2001 NATIONAL DEFENSE AUTHORIZATION ACT--CIVILIAN PERSONNEL
READINESS
----------
House of Representatives, Committee on Armed
Services, Military Readiness Subcommittee,
joint with the Committee on Government Reform,
the Civil Service Subcommittee, Washington, DC,
Thursday, March 9, 2000.
The subcommittees met, pursuant to notice, at 1:05 p.m., in
room 2118, Rayburn House Office Building, Hon. Herbert H.
Bateman (chairman of the subcommittee on Military Readiness)
presiding.
OPENING STATEMENT OF HON. HERBERT H. BATEMAN, A REPRESENTATIVE
FROM VIRGINIA, CHAIRMAN, MILITARY READINESS SUBCOMMITTEE
Mr. Bateman. The hearing will come to order.
Our colleagues from the Civil Service Subcommittee of the
Government Reform Committee join us today for the first
combined hearing of these two subcommittees, at least within my
memory. I particularly welcome Congressman John Mica of
Florida, who is substituting for Chairman Scarborough, in view
of Chairman Scarborough's illness.
I am also pleased to welcome the Ranking Member, Mr.
Cummings, and the other members of the subcommittee as partners
in our efforts to oversee the Department of Defense's (DOD's)
management of its civilian personnel workforce.
I recognize that many of the civilian personnel provisions
we include each year in our defense authorization bill come
within the jurisdiction of the Civil Service Subcommittee, and
you have always been most cooperative and generous in your
assistance to us. The joint hearing provides our witnesses a
unique opportunity to discuss issues before both committees of
jurisdiction.
One of the primary reasons we scheduled this hearing is to
discuss the effect of the civilian drawdown on the Department
of Defense's civilian workforce and ultimately its effect on
the readiness of our military forces.
Few Americans understand that the Department of Defense has
reduced its civilian workforce by more than 38 percent over the
last 10 years, compared with a 35 percent reduction in active
duty military forces. Many, many skilled workers across the
country and overseas have left Department of Defense employment
permanently.
I am also concerned that these rather dramatic reductions
have occurred in such a way that the department released needed
personnel who possessed essential skills. It is time to examine
our civilian workforce to ensure we will have the people with
the skills we need in the future.
In that regard, I would like our witnesses to provide the
subcommittees an assessment of their current skills inventory
and what additional tools they may need, if any, to properly
align the workforce of their respective service. Additionally,
I would like some assurances that the Department of Defense and
the military services have planned for the future. In other
words, do they have a template for the skills and the workers
needed to support future operations so that younger workers can
begin to be hired and trained now to meet those future needs?
If you do not have a clear vision of where you need to go,
it is difficult for this committee to intelligently address
issues and implement solutions.
In addition, we continue to hear concerns about the
department's aging workforce as an increasing number of workers
are eligible to retire. The question is will you need their
skills when they do retire and do you have someone in the
pipeline to fill those essential positions?
I would expect that some very careful analysis has been
done before you ask our two subcommittees to consider measures
changing long established personnel policies to solve a problem
that so far has not been demonstrated or proven.
Finally, over the years, the department has requested and
received authority to operate a variety of civilian personnel
demonstration projects. I would like to hear what has been
learned from the existing demonstrations. From the reactions we
get back home when base closures are considered or reductions
in force are announced, it is apparent that Federal jobs are
still highly coveted. Therefore, it seems counterintuitive that
we would have difficulty hiring new workers.
That is why I would like to see some careful analysis
behind any request for new authorities, and I would insist that
any new authorities be carefully targeted at skills the
department has demonstrated that it cannot hire. For example,
the Air Force reports having difficulty hiring engineers. The
Army has a different experience. Why is that?
Today, the subcommittees will hear testimony from experts
in workforce shaping issues and from the civilian personnel
policy directors of the department. It is my belief that our
hearing today will assist us in making the necessary decisions
for our civilian workforce in the future.
Before proceeding to our witnesses, let me now recognize
the gentleman from Florida, Mr. Mica, for his opening remarks.
STATEMENT OF HON. JOHN L. MICA, A REPRESENTATIVE FROM FLORIDA
Mr. Mica. Thank you, Mr. Chairman. I appreciate this
opportunity to join you and members of your subcommittee at
this hearing this afternoon. I look forward to working with you
and also the Civil Service Subcommittee chairman, Chairman
Scarborough, who, unfortunately, cannot be with us today
because of his injury.
I am pleased to join also Ranking Members Ortiz and also
Mr. Cummings. Mr. Cummings has also been ranking on the Civil
Service and very active in these issues. It is particularly
important that we have leaders like this as we address the
issues of civilian personnel readiness.
This is a vitally important matter, Mr. Chairman, and I
commend you for initiating this inquiry. As the former chairman
of the Civil Service Subcommittee, I also want to thank you for
the cooperation my staff and I have received from you and your
staff on civilian personnel issues in the past Congresses. I am
confident that the close working relationship will continue, as
evidenced today by this joint hearing.
Today we will examine the state of readiness of the
civilian workforce that supports our servicemen and women. This
hearing is really the beginning of a process that will continue
as our subcommittees work through a variety of civilian
workforce proposals in conjunction with this defense
authorization bill.
I look forward to hearing the witnesses today, all of whom
bring a great deal of expertise on these civil service issues
and civilian defense issues.
Mr. Chairman, there are several matters that I asked the
Department of Defense and others to address as we consider the
readiness issue today and throughout the remainder of this
Congress.
One key issue is the effect of the dramatic reduction in
civilian personnel at the Department of Defense which you
referred to in your opening statement and also that in all of
our military departments. Again, putting that reduction in
perspective, Mr. Chairman, the drop in full-time equivalent
employment at those agencies will account for 73 percent of the
net personnel reduction government wide by the end of fiscal
year 2001.
We need to know, Mr. Chairman, how this drawdown has
affected the ability of our current workforce to support
America's military forces now. If there are critical short-term
problems that must be addressed now, the witnesses should
identify them and provide us with concrete proposals for
dealing with them.
Mr. Chairman, we have heard a lot about the threat of a
hollow military; and this Congress has taken steps to turn that
problem around. America must always have the best fighting
forces in the world. The men and women in our armed forces must
be the best trained and the best equipped. But an inadequate
civilian support system will degrade the performance of even
the best military force in the world. That is why we also need
to be concerned about a hollow support system.
Together with the administration and everyone on both sides
of the aisle, we must determine the optimum mix of skills and
the optimum mix of contractors and employees needed to preserve
our Nation's strength and security.
As we look to the future, Mr. Chairman, it is important
that Congress make certain the Department of Defense and the
military departments are integrating civilian workforce
planning with the military's strategic planning. Until we know
what kind of military missions and forces we must plan for,
neither the Congress nor the administration can reasonably
begin assessing our civilian workforce needs.
I will expect today's witnesses to demonstrate that their
civilian personnel strategies are in fact solidly tied to
anticipated military needs.
I will also expect a clear explanation of why such things
as an older workforce are considered problems and not simply
facts or experienced personnel to deal with. And I also want to
know what agencies are doing and plan to do to train or, where
necessary, re-train their existing employees.
Another key issue that I would like our witnesses to
address is whether today's civilian benefit structure should be
modified to attract highly qualified and motivated individuals.
Do we need more flexible benefits and more portable retirement
systems to help us compete for highly skilled workers,
particularly younger workers who do not necessarily plan to
make their careers with just one employer?
I am pleased to see also the gentleman from Virginia here
that I have worked with in the past in trying to bring us into
the 21st century in that regard. I appreciate his efforts.
Sorry to see him retiring, and you retiring and anyone else who
is retiring that has done such a good job toward these efforts.
So, Mr. Chairman, I look forward to receiving answers to
these questions and working with you in this joint effort
today.
Mr. Bateman. Thank you very much, Mr. Mica.
Now I would like to recognize my good friend and the
Ranking Democratic Member of the Readiness Subcommittee,
Solomon Ortiz of Texas.
STATEMENT OF HON. SOLOMON P. ORTIZ, A REPRESENTATIVE FROM
TEXAS, RANKING MEMBER, MILITARY READINESS SUBCOMMITTEE
Mr. Ortiz. Thank you, Mr. Chairman, for agreeing to hold
this hearing today and, of course, we are happy to have our
colleagues with us.
This is the first civilian personnel readiness hearing we
have conducted in quite some time. It does not mean that we
have not been enacting legislation impacting on the matter
during this time. It is more of a case of the absence of an
opportunity to look at civilian personnel policies and
practices in an integrated manner.
I join you in welcoming all of our witnesses here today. I
also appreciate the opportunity to explore this important issue
with our colleagues on the Civil Service Subcommittee of the
Government Reform Committee.
Mr. Chairman, while there are many civilian personnel
issues that loom before us, I am very much concerned with the
problems and challenges associated with a dwindling and an
aging workforce. I have also heard some of my colleagues
express their concerns about these matters.
During preparation for this hearing, I was reminded that
the United States will reportedly be the last of the developed
nations to experience the aging of its population. By 2025,
nearly 18 percent of all Americans will be over the age of 65.
This aging population not only affects the demands for funds
for non-defense activities, it also impacts on the quantity and
quality of civilian person- nel we will be able to attract and
to retain to meet the department's technical and management
challenges.
I am most familiar with the situation at the Corpus Christi
Army Depot, where today there are no employees under the age of
30. The significance of this fact is that it is easier for a
30-year-old to climb around an airframe in the 60 degree heat
of summer than it is for a 50 to 60-year-old, and I can vouch
for that.
From my study of the Army Materiel Command civilian
personnel status, I found that in six critical career programs,
72 percent of the workforce is over 40 and 35 percent is above
age 50. Today, the average is 48.7. By the year 2004, some 50
percent of the Army Materiel Command's civilian workforce will
be retirement eligible. I think those statistics by themselves
tell us a lot.
Notwithstanding the current trend toward outsourcing
privatization of functions that have traditionally been
performed by Department of Defense (DOD) civilians, the
promised increased reliability of new equipment and the
innovative maintenance and management concepts that we hear
about, I am convinced that there will always be a need for a
core DOD civilian workforce. I am not sure that the department
is in the best posture at this time to prepare for the future
while there is still time.
It is not the same in DOD as it is in some sectors of the
Department of Energy. In the Department of Energy, we are
scrambling to capture the experiences of personnel who work
nuclear weapons issues before they disappear. But the impact
could be the same if we do not take the steps necessary to make
sure that we have in place the right policies and programs to
meet our future civilian workforce requirement.
I know that we have had programs in existence for some
years to attract, train, and retain white collar employees and
the department tells me that those programs have been useful.
But when I inquire about blue collar technical employees, I
find a different story. Some of the skills needed require long
lead times to produce these highly trained technicians we need
to maintain the increasingly complex equipment we are
procuring. Some of the same skills are required to maintain the
legacy equipment that we will retain in the inventory for some
time.
It is my assessment that we just do not have sufficient
programs in place to meet future requirements. It is for that
reason I am proposing that the Department of the Army conduct a
pilot apprentice program at Army depots that will address the
future need for some already known hard-to-find blue collar
technicians.
The Army Materiel Command has provided a detailed listing
of what skills are wanting depot by depot. The outcome of this
program will be useful in assessing strategies designed to
solve this problem in other places in the department.
Mr. Chairman, there are some tasks that I am convinced must
be accomplished sooner rather than later. We need to understand
the potential implications of aging population on national
security. We need to better understand what are our future
workforce requirements so that appropriate policies and plans
can be put in place to address the totality of the problem.
There is a need to understand the impact of the drawdowns on
productivity as well as our ability to attract and retain the
quality and quantity of workers that we need.
We need to understand the linkage between the perceived
problem and the separate bits of legislation we have enacted
and the department's policies and practices. We need to develop
legislation if needed to provide the tools needed to properly
shape the workforce. We need to understand the costs so that we
can ensure that an integrated investment strategy is developed
and in place to guide the implementation of rational and
achievable civilian personnel goals.
This is not a case of mission impossible, and I know it is
not something that can be accomplished without considerable
effort, but it must be done. We must make the investment or we
will not provide for the future workforce capable of meeting
technical and management challenges, all to the detriment of
readiness.
Mr. Chairman, I thank you for your insight and for your
vision and thank you for holding this hearing today.
Thank you, Mr. Chairman.
Mr. Bateman. Thank you, Mr. Ortiz.
And now I am pleased to recognize the Ranking Member of the
Civil Service Subcommittee, Mr. Elijah Cummings of Maryland.
STATEMENT OF HON. ELIJAH E. CUMMINGS, JR., A REPRESENTATIVE
FROM MARYLAND, RANKING MEMBER, THE CIVIL SERVICE SUBCOMMITTEE
Mr. Cummings. Thank you very much, Mr. Chairman, and
Ranking Member Ortiz of the Military Readiness Subcommittee,
and certainly to Mr. Mica and Chairman Scarborough of our Civil
Service Committee. I really do appreciate you scheduling this
hearing.
This hearing sends a message to Federal agencies that it is
important to plan for the future and develop a strategic
approach to manage, train, retain, develop, hire, pay and
evaluate their most valuable assets, its employees.
As Ranking Member of the Civil Service Subcommittee, I am
aware of the impact of downsizing, contracting out, reductions
in force, and an aging workforce can have on employees and the
management of employees. Morale suffers due to limited career
and promotion opportunities; people become insecure about their
jobs and are forced to work longer hours to accomplish the same
amount of work.
When this occurs, not only do employees suffer, but the
agency and its mission do as well. This situation is
exacerbated in the case of the Department of Defense.
In 1996, the General Accounting Office (GAO) reported that
between the years of 1987 and 1995, DOD reduced its civilian
workforce by approximately 25 percent or about 284,000
personnel. GAO noted that by the time DOD finishes its
downsizing plans in fiscal year 2001, DOD would have reduced
its civilian workforce to about 728,300 personnel, almost 35
percent below the 1987 end strength and about 16 percent below
the 1995 end strength.
When the GAO report was issued, DOD reported that civilian
downsizing had not adversely affected military readiness at the
installations visited by GAO. However, DOD did state that if
not managed properly in the future, civilian downsizing could
have an adverse effect on combat units.
I look forward to hearing from DOD as to the current status
of its downsizing efforts, its impact on civilian employees and
its strategic plan to manage its workforce in the future. Any
testimony the witnesses can offer to help us understand this
issue is most appreciated.
Thank you very much.
Mr. Bateman. Thank you, Mr. Cummings.
At this point, I would like to ask unanimous consent to
have Chairman Scarborough's statement made a part of the
record.
[The prepared statement of Mr. Scarborough can be found in
the Appendix on page 323.]
Mr. Bateman. Now I would like to welcome our first panel of
witnesses who are experts in the work shaping issues that we
are principally concerned with today.
The first panel consists of Mr. Frank Cipolla, Director of
the Center for Human Resources Management of the National
Academy of Public Administration; and Mr. Michael Brostek,
Associate Director, Federal Management and Workforce Issues for
the General Accounting Office, who is accompanied by Mr. Barry
Holman, Associate Director, Defense Management Issues, of the
General Accounting Office.
Gentlemen, we welcome you. All of your written statements
will be made a part of the record.
And now, Mr. Cipolla, I will call on you to proceed as you
may choose.
STATEMENTS OF FRANK CIPOLLA, DIRECTOR, CENTER FOR HUMAN
RESOURCES MANAGEMENT, NATIONAL ACADEMY OF PUBLIC
ADMINISTRATION; MICHAEL BROSTEK, ASSOCIATE DIRECTOR, FEDERAL
MANAGEMENT AND WORKFORCE ISSUES, GENERAL ACCOUNTING OFFICE,
ACCOMPANIED BY BARRY HOLMAN, ASSOCIATE DIRECTOR, DEFENSE
MANAGEMENT ISSUES, GENERAL ACCOUNTING OFFICE
Mr. Cipolla. Thank you, Mr. Chairman. We, as you mentioned,
did submit a detailed statement for the record, so at this time
I would like to just give a brief oral summary.
We appreciate the opportunity to appear today to discuss
civilian personnel readiness.
The National Academy of Public Administration is an
independent, non-profit, non-partisan organization chartered by
the Congress to improve governance. We hope to be able to
provide some outside DOD perspectives on this issue, which is
of extreme importance now to most Federal agencies, including
DOD.
I would like to before I proceed acknowledge the presence
today of the newly-appointed president of the National Academy,
someone you know, I know, Mr. Robert O'Neal, who is here in the
audience.
Mr. Bateman. We congratulate the academy on its choice and
I am very, very pleased to see my friend Bob O'Neal again.
Mr. Cipolla. Thank you, sir.
We have been putting a good deal of priority on this
subject of workforce planning and workforce shaping and a good
bit of our re- cent work has included a number of subjects that
are relevant to this hearing.
I have included a listing of several recent studies and
reports on these subjects. I can make those available for the
record, if you wish.
Mr. Bateman. We would be pleased to have them.
Mr. Cipolla. Good. We will do that.
Some background. Civilian personnel readiness is an
important subject, as I mentioned, not just for DOD, but
certainly including DOD. Projecting the role and the
composition of the civilian component of the total force is a
continuing challenge, even more so as agencies look ahead and
attempt to build the workforce from where downsizing and
restructuring left it.
There is no doubt that the task faced by DOD and its
components to assure that the right people are in the right
place at the right time is more daunting than ever. They are
searching for answers to questions about what civilians will be
doing, what is the right civilian-military mix, what are the
competencies or skill sets that will be needed, how will the
skills and knowledge of the current workforce be updated, what
is the best approach to recruiting for scarce skills, and what
needs to be done to retain senior level expertise in key
occupations.
Most Federal agencies are facing these or similar questions
after spending the better part of the last decade trying to
manage downsizing, keeping the adverse impact on people to a
minimum and working to get maximum productivity from the
workforce that is left, all while still adhering to merit
principles that have been the foundation of Federal employment
since 1883.
Federal managers now find themselves in a war for talent,
trying to compete in a tough market and making decisions about
human capital investment. Government and the private sector
alike are discovering that they cannot address these questions
in a rational and defensible way without instituting a
systematic process of workforce planning. Last year, the
academy looked at 17 Federal agencies and found that most of
them were beginning to do that.
I would like to share some of that information along with
primarily some key conclusions about this subject and I will
just state those at this point and then if you have questions,
I would be happy to comment on them. They are detailed in the
prepared statement.
The first of those is that workforce requirements must be
linked to the agency's overall strategic plans. That has
already been said in a number of ways, but we cannot over
stress that point. Agency strategic plans must have a people
component. That needs to be part of the process.
The second point is that workforce planning must include
the collection and analysis of data about the external
environment as well as information about the current workforce.
We have already heard some of those trends that are going to be
shaping and are already shaping the workforce and the workplace
over the next 5 to 10 years: skill shortages, increasing age of
the workforce, increasing retirement eligibility, the workforce
becoming more diverse, technology making possible alternative
work arrangements, and the newer generations of employees
having different values and expectations about work and the
workplace.
The third point is that projections of future workforce
requirements must be expressed in terms of needed skills and
competencies, not just numbers of full-time permanent
employees.
Fourth, decisions on the composition of the future
workforce should consider the use of flexible employment
arrangements. Increasingly, the right people for getting the
job done in the future will be a mix of workers and a mix of
employment arrangements.
Fifth, managers must be given maximum flexibility in
managing work and assigning staff to meet changing mission and
program requirements. The civilian personnel system, to the
extent that it is possible, must accommodate the requirement
for that flexibility.
The sixth point, human capital development and continuous
learning should be viewed as an organizational investment and
given a high strategic priority. Federal agencies need to
transform training programs into an ongoing process of re-
skilling and re-tooling the workforce to acquire and maintain
the competencies needed to keep up with the changes in mission
technology and the content of work itself.
And the seventh and final point relates to retirement
incentives. Retirement incentives should be used selectively to
support restructuring and to retain needed talent in scarce
skill occupations. And we could elaborate on that, but I think
I have completed my time.
I'd be happy to answer any questions you have, sir.
[The prepared statement of Mr. Cipolla can be found in the
Appendix on page 326.]
Mr. Bateman. Thank you very much, Mr. Cipolla.
Now we would be very pleased to hear from Mr. Brostek.
Mr. Brostek. Thank you, Mr. Chairman. I am pleased to be
here to discuss why this is an opportune time to assess human
capital management at the Department of Defense and a self-
assessment checklist that GAO has developed to help agency
leaders focus on improving the management of their workforce.
My observations on DOD's human capital management situation
are based on work we have done at DOD throughout the 1990s that
provide us some perspectives on the issues that have arisen
during downsizing, but do not represent a comprehensive
assessment of workforce planning at the Department of Defense.
However, in summary, several factors suggest that this is
an important time for DOD to assess its human capital
practices. Public and private high performance organizations
recognize that people are their key asset. It is through the
talent and dedicated work of staff that missions get
accomplished. Therefore, sound management calls for continually
reassessing human capital management, especially in a dynamic
environment. And surely DOD is in a dynamic environment.
DOD's civilian workforce, as has been mentioned, is about
36 percent smaller now than it was in 1989 and it is likely to
get smaller. In part, due to these reductions, imbalances exist
in the age distribution of DOD staff. The average age of
civilian staff has been increasing while the proportion of
younger staff who are the pipeline of future talent and
leadership has been dropping.
DOD reform initiatives are also changing the way the
department does business and new business practices affect the
competencies that employees must have. Together, these changes
suggest that DOD faces challenges in ensuring that it will have
the talented workforce that it needs in the next decade.
To help agencies assess their human capital management and
to deal with these challenges, we developed a five-part
assessment framework that we believe can be useful in aligning
human capital management with agencies' missions, goals and
strategies.
I will talk very briefly about each portion of that
framework.
The first part starts with strategic planning because
decisions made today determine whether an agency will have the
workforce that it needs in the future. A workforce cannot be
reshaped overnight. For instance, if an agency's strategic plan
calls for a greater reliance on information technology, there
are implications for the competencies that the workforce will
need.
The actions needed to reshape the workforce such as
training, hiring employees with requisite skills and possibly
separating employees whose skill sets are no longer well
matched to agency needs must be carefully designed and
implemented.
Next, our framework calls for aligning an agency's human
capital policies and practices to support the agency's
strategy. This is where detailed workforce planning is done.
Looking at the strategies for 5 years or more into the future,
the agency defines the knowledge, skills and abilities that
employees will need as well as how many employees will be
needed at that time.
Those knowledge, skills and abilities are then assessed in
the current workforce and projections are done of workforce
attrition due to things like retirement and resignations and
other factors.
Then the gap needs to be assessed between the skills and
abilities and size of the current workforce and the similar
qualities of the workforce in the future.
Once that gap measurement has been made, an agency is
finally prepared to actually develop a plan to transition its
current workforce to that which it is going to need in the
future.
The third part of our framework emphasizes that agencies
must proactively develop their future leadership. The agency
must begin by determining the qualities and characteristics
that are most needed in its future leaders.
Leaders develop over long periods of time and, therefore,
agencies need to identify potential leaders early and provide
them with a variety of professional development and learning
opportunities throughout their careers.
The fourth element of the framework focuses on ensuring
that agencies recruit, develop and retain the employees with
skills necessary to support mission accomplishment. In a sense,
this is the execution of the workforce plan. The workforce plan
identified the types and numbers of employees needed. At this
point, agencies need to go out and identify by targeting the
individuals that have the skills and abilities that are needed
and hiring them and by targeting training to the current
workforce to move their skills and abilities to those that are
required to implement the plan that the agency has adopted for
executing its mission.
Finally, the framework focuses on ensuring that an agency's
human capital practices and policies create a culture in which
high performance is expected and supported. Human capital
practices should enable and motivate employees to achieve high
performance. Achieving high performance may be aided by a
performance management system that links to the extent possible
individual performance expectations and rewards to the success
of the organization itself.
In conclusion, the dynamic changes in DOD over the past
decade and the continuing changes likely this decade underscore
the importance of a well developed, human capital management
strategy to DOD's future mission accomplishment. It is vitally
important to start by looking to the future, determining what
type of workforce will be needed for the future. When this is
done, DOD can develop plans for creating that workforce and
following up with the actions and investments needed so that
when the future arrives, the right employees with the right
skills, training, tools and performance incentives will be on
hand to greet that future.
That concludes my statement, and Mr. Holman and I will be
happy to answer any questions you have.
[The prepared statements of Mr. Brostek and Mr. Holman can
be found in the Appendix on page 341.]
Mr. Bateman. Thank you very much, Mr. Brostek.
Mr. Holman, we would be glad to hear from you if you have
anything you would like to add at this time.
Mr. Holman. No separate, Mr. Chairman, just an observation
that we have done a good body of work over the years, looking
at a variety of defense business practices, outsourcing, depot
maintenance and issues like that and we know that the issue of
civilian personnel impacts from drawdown and readiness, aging
workforce, are issues that are very much out there that are
increasing concerns to people, so we are happy to participate
in this hearing today because I think it is an important issue,
that it does require some planning to deal with.
Mr. Bateman. Thank you, Mr. Holman.
Mr. Brostek, let me ask you this. You have spoken of
workforce plans for the utilization of human capital which I
think is very interesting terminology.
At what levels does this take place? Is this done by
someone in the Office of the Secretary of Defense or is it done
there plus in each of the military departments or is it within
systems commands or major commands within each of the services?
Where does the workforce plan begin and end?
Mr. Brostek. Well, I think it is going to have to occur
throughout an organization the size of DOD. It has, as you
know, a vast number of employees. About 40 percent of the
Federal civilian workforce is in DOD. So I think it is
impractical to expect that all the workforce planning could be
done out of one central location.
On the other hand, the important reference point for all of
the workforce planning that needs to be done is the strategy
that the department adopts for accomplishing its mission of
defending the country and that is a department-wide policy that
needs to be set and then the individual planning that needs to
be done by the various components is in relation to that
strategic plan that was adopted, the approach that the
department wants to follow to carry out its mission.
Mr. Bateman. We will be hearing from Department of Defense
witnesses shortly, but do you have any insights as to what
degree elements of the Department of Defense or the Office of
the Secretary of Defense have become engaged in what you would
call workforce planning?
Mr. Brostek. Well, Mr. Chairman, I have to admit that we
have not done a comprehensive assessment of the department, but
I do have an extract from the Defense Science Board Task Force
report that came out just this past February that suggests that
there is a bit of a gap in workforce planning. If I can just
quote a little piece of this, the report says that ``Today,
there is no overarching framework within which future DOD
workforce is being planned. An overarching strategic vision is
needed that identifies the kind of capabilities that DOD will
need in the future, the best way to provide those capabilities
and the changes in human resources planning and programs that
will be required.''
This is a good statement of what needs to be done, and it
is also apparently a statement that in the opinion of the
Defense Science Board that has yet to be done.
Mr. Bateman. What was the date of that statement?
Mr. Brostek. February 2000.
Mr. Bateman. Thank you.
Mr. Cipolla, in your written statement, you made reference
to a phenomena called telecommuting.
Mr. Cipolla. Yes, sir.
Mr. Bateman. Have you done any particular study as to the
effectiveness and productivity of workers who perform by the
telecommuting phenomena?
Mr. Cipolla. We have and among the reports that I mentioned
earlier there is some coverage of that. Recently, we had in one
agency a review of telecommuting arrangements that were in fact
negotiated with the labor union involved and we participated in
the assessment after the arrangements had been underway for
some time. This was an organization that was essentially an
information technology organization, so the nature of the work
was conducive to this sort of thing and the overall assessment
was that it was working quite well, in the view of both the
employees and the unions and the customers who were in receipt
of the services of the organization. As a generalization, it
varies. And it is an extreme culture challenge in some
organizations and less so in others, and I guess that is the
best way I can describe it.
Mr. Bateman. I have two telecommuting centers in my
district and, of course, most of the people, almost all of
them, are Federal employees. My general understanding is that
it is very, very highly regarded by the Federal employees. I am
more curious to know whether or not Federal workforce managers
are sympathetic to and anxious to have their employees
participate in that manner, but I guess our government
witnesses can cover that.
Mr. Cipolla. Well, frankly, our experience has been that
many managers find it difficult for a lot of the reasons that
you might imagine, all associated with a loss of control in
some form or another.
Mr. Brostek. We did some work on that, if I can intercede
for a minute--
Mr. Bateman. Yes, please.
Mr. Brostek.--about two or three years ago and we found a
pretty similar result in the Federal Government, that there was
a mixed bag among Federal managers. Some were quite supportive,
but others were less supportive. It was around a control issue.
Sometimes it was around whether or not the manager felt that
they could really assess the performance of the individual when
they were not in the office. If the type of work that was done
was not something that could be measured easily, the supervisor
was a little reluctant to let that not occur within his or her
sight.
Mr. Bateman. Thank you.
Mr. Mica.
Mr. Ortiz. I am sorry. Go ahead.
Mr. Ortiz. No problem.
I would like for the witnesses, maybe all of you can give
me some input, but do you think that evidence of an aging
workforce is a condition needing correction, particularly since
most of the jobs eliminated in the Department of Defense were
lower graded positions, or is more analysis needed?
Mr. Cipolla. On the surface, that would appear to be the
conclusion that one would reach. But at the same time, if we
look closely at the skills that we need, which is what this
subject is all about, in an organization now and in the future,
an aging workforce is not necessarily an indication of
something that needs to be corrected. In fact, retaining senior
level expertise in some important occupational groups that are
particularly difficult to recruit for in today's highly
competitive market is something that needs to be included in
strategic workforce planning. In other words, we need a
balance.
Mr. Brostek. I would roughly concur with what Frank has
said. The simple fact that the workforce is aging does not in
itself tells us that there is a major problem. What it does
tell us is that there is a flag here, that some attention needs
to be paid and some analysis done.
The situation in DOD is that the proportion of the
workforce that is below age 31 has dropped fairly dramatically
from about 17 percent in 1989 to around 6.5 percent now. That
may be an adequate number, but I think it is something that
needs to be investigated to ensure that the people who are
needed to be the future leaders and talent of the organization
are being grown.
We also have had some similar conclusions to what Mr.
Cipolla was saying about the folks who are toward the end of
their career. Sometimes it is to the advantage of the agency to
offer various inducements to get people to stay a bit longer;
and we do know that a thing called phased retirement is
becoming more popular in the workforce of the country at large,
where sometimes we offer people the opportunity to come back on
a part-time basis 2 or 3 days a week or something like that, to
stay in the workforce and to keep that institutional knowledge
that was gained over a long career available to the
organization.
Mr. Holman. I would agree with what has been said, just
echo, I think, the key word is balance in terms of requisite
skills, grade, allowance for succession planning as we see the
larger portion of the workforce seeming to be grouped in the
40s and 50s, closer to the 50s, and nearing retirement in the
next few years. So it is a requirement for orderly succession
planning and balance in that workforce.
Mr. Ortiz. And I just have one more question because I
would like for the other Members to also ask questions.
Mr. Cipolla, in your research, are you finding evidence of
a general shortage of technical workers in the United States?
If that is so, given the operation of the law of supply and
demand, the skilled workers will be able to shift from job to
job almost at will.
Would it not make more sense for the Department of Defense
to contract for these workers as needed, rather than trying to
rewrite civil service law to provide extraordinary authorities
likely necessary to be able to maintain a large permanent
staff?
Mr. Cipolla. Well, the premise that you stated, as you
stated it, I would have to agree with. First of all, the
shortage does exist. There is no sign that it is going to abate
in the near future. The market is going to become even more
competitive for scientific, technological and particularly
people who have skills in information technology.
What you have described is actually happening, to the point
that if you looked at the numbers of the information technology
workforce across government agencies, you would find that we
have now reached the point that there are more contract
employees than there are civil service employees.
That in itself is not bad, but it raises all kinds of
questions about our ability to manage that kind of a mix.
Mr. Ortiz. Thank you, Mr. Chairman.
Mr. Bateman. Thank you, Mr. Ortiz.
Now, Mr. Mica.
Mr. Mica. Thank you.
Just a follow-up to that, Mr. Cipolla. I am not in the
military side of this, I have watched it from the civilian
side, but you do not have to be a military analyst to see that
we have a change in the world situation and that we are now
doing employments in sort of peaks and valleys.
How do you maintain a minimal civilian force and then be in
a position to meet these peaks unless you go to contracting?
Mr. Cipolla. Well, I am sure our colleagues from DOD are
going to talk about the strategic sourcing process which is
aimed at identifying that core workforce or those core sets of
competencies that are needed. The problem is that they need to
be continually updated and there needs to be a systematic
process that reassesses those determinations in the light of
what is going on in the environment.
Mr. Mica. Well, you have not answered my question.
With the active military, we have a Reserve force and we
call them up. With civilians, you have a core, then what is the
model to meet the peaks and valleys of the civilian workforce
if it is not full-time employees or contractors? How do you
approach this and be prepared all the time? What are the
recommendations before we hear from the other folks.
Mr. Cipolla. I do not know that there is a model that can
be applied, a quantitative model that can be applied, across a
whole agency or even a major part of it.
What has to drive the determination about what the right
mix is an assessment of what is needed in terms of the core
work, what are the competencies that are required. If we cannot
get them from internally within the department's workforce, we
cannot compete in the market, then maybe the best response is
to contract. But I do not know of any overriding model.
Mike, maybe GAO--
Mr. Brostek. I would agree that one of the likely sources
for dealing with considerable workload fluctuations is
contracting. It is certainly a legitimate source to turn to.
Agencies also have the ability to do some term hiring for
employees, bringing them in for--I believe it is up to a 3-year
period of time, as Federal employees to work on short-term
projects. That can also be another mechanism for dealing with a
fluctuating workload situation and might be a situation that is
desirable to use if you want to be creating government policy,
doing inherently governmental functions, which you would not
normally want to; you would not ever really want to contract
out.
If I could jump back for just a second to Mr. Ortiz's point
which is relevant to your question, too, Mr. Mica, to the
extent we do rely more and more on a contract workforce and we
use them as the reservoir of talent for dealing with workload
fluctuations, we have to be very careful to have reserved in
the Federal Government sufficient oversight capacity to monitor
the cost and the quality of the contract services that we are
being provided because if we do not have a sufficient reservoir
of capacity to monitor the cost and quality, we can suffer some
pretty unfortunate consequences even through the contracting
process.
Mr. Mica. One more final question, if I may, Mr. Chairman.
Mr. Bateman. Certainly.
Mr. Mica. We spent somewhere in the neighborhood, I think,
of $4 billion on buyouts since 1993. They came in and we did
all kinds of buyouts and I became concerned; Mr. Cummings and I
held hearings on this, about what was going on. Did we go
overboard in the buyout area? Are we now suffering from going
beyond what we should have with the buyouts or was it a
balanced approach?
Mr. Cipolla.
Mr. Cipolla. That is a difficult question. Did we go
overboard? It has to consider the requirements and the targets
that agencies were expected to accomplish.
Unfortunately, at least in the early stages, buyouts were
being used to avoid restructuring, rather than to support
restructuring. And, of course, our recommendation is that that
whole process be turned around. To the extent that we can
identify what the projected organization should be doing and
structure it accordingly, if we need buyouts, to either protect
needed skills or to eliminate those that we do not need, then
that is a more appropriate use, but the Department of Defense
did not have those kinds of options, especially in the early--
nor did any agency--in the early stages.
Mr. Brostek. We did, as you know, for you, Mr. Mica, a fair
body of work on the downsizing as it was occurring and we did
find that early on in the downsizing period, not necessarily
just through buyouts but through all the techniques that were
used, that there was kind of a rush to meet the target and
there was inadequate planning to assure that when the target
was met that the reduced workforce, that those who were left
had the knowledge, skills and abilities necessary to perform
the mission of the agency well.
Through legislation that you were involved with, as I
recall, there was a requirement that agencies begin doing
better workforce planning before they were able to offer any
buyouts; and when we investigated agencies after that
legislation passed, we did see some improvement in the
targeting of the incentives for separations and thus a better
balance in the workforce as the downsizing continued.
Nevertheless, with what we saw early on in the downsizing
period and the lack of hiring for a number of years during the
1990s, we are likely to still have some imbalances in the
skills and abilities of the workforce.
Mr. Mica. Thank you.
Thank you, Mr. Chairman.
Mr. Bateman. Thank you, Mr. Mica.
Now Mr. Cummings.
Mr. Cummings. Mr. Brostek, just following up on what you
just talked about, do you think there is enough authority now
to be able to maintain that balance?
In other words, if you have one area where you really need
people, say, for example, technology and then you have this
other area that just hypothetically is more toward the manual
labor side and now the technology has just taken over, is there
enough authority to be able to, for example, have a buyout
situation for the manual labor folk and keep the other folk
without, you know, the skilled computer folks, without running
into problems? Because it seems like that is what you would
almost have to do.
Mr. Brostek. As I understand it, there is not a blanket
authority that exists now for agencies to use buyouts to
restructure or reshape their workforce.
As a general practice, when agencies have buyout or early
out authority, it is generally connected with a reduction in
full-time equivalents (FTEs), someone leaves with a buyout and
the agency loses one position to fill.
There have been a number of instances in which Congress has
granted exceptions to that, specific legislation that was
crafted for a specific situation in which an agency was given
the ability to offer a buyout to restructure its workforce
along the lines of what you are talking about. Whether or not a
blanket authority is needed, we have not really assessed that,
but we certainly think it would be important for agencies to
kind of make a fact-based case for why they need that, even if
there was a blanket authority, before they started using the
buyouts again.
Mr. Cummings. In my district, a private company, Domino
Sugar, I guess about 8 or 9 years ago moved to computerize
itself. It is now about 90 percent computerized and they
literally cut their workforce almost in half. And they are able
now to produce sugar--when you even throw in inflation--at the
same cost that it was in 1960. That is amazing. So the question
becomes when they did that, though, they went through an
intense retraining and so now you have these guys that used to
be toting these big bags of sugar sitting up in an air
conditioned booth hitting buttons. And, you know, it was just
so interesting and they are making more money; they are doing
fine; but I was just wondering, how much emphasis do we put on
retraining of the personnel that are there?
I think, you know, that kind of thing is good for morale,
when people feel that they can now do something that they could
not do before. It also bodes well for upward mobility. All of
those kinds of things, I think, go to morale and I think that
that is something that we all have to be concerned about with
regard to employees in the Federal Government and I was just
wondering where are we on those kind of things.
Mr. Brostek. Well, I think both Mr. Cipolla and I indicated
in our statements that training and retraining of the workforce
as the techniques used for carrying out the mission change is a
very important part of workforce planning and the execution of
workforce planning.
We do not have a very good grasp on what the training
situation is in the executive branch. There is not any central
reporting of training expenditures. We do have anecdotal
evidence that during downsizing training was one of the areas
that tended to be cut and cut fairly severely. So it is a
possibility that this is an area in which additional
investments will be needed.
Mr. Cummings. Now, Mr. Cipolla, you talked about flexible
employment arrangements. What do you mean by that?
Mr. Cipolla. Well, anything other than the traditional 8 to
5 or 5-day-a week, 40-hour work week; different tour
arrangements, even different--the telecommuting that we talked
about earlier. That term would include contracting, it would
include the contingent or the supplemental workforce, the
temporary people that we would add, even from an employment
agency, to meet a current need that we would not meet over the
long term.
In government, in most agencies, over the years, we have
tended to think of a full-time permanent employee as the only
way we fill a position. We fill it the same way it was vacated,
as opposed to looking at different options among those that I
mentioned for getting the work done.
Mr. Cummings. Do we have--I mean, what elements will we
have to have, say, an agency will have to have for
telecommuting to be effective and for you to have--apparently
it works in certain kinds of private industry and I guess the
question becomes just how do we make it work, say, for Federal
Government or the various agencies within the government?
Mr. Cipolla. It essentially has to be--at least this is our
experience--a local matter and one in which employees and
managers can work out to their satisfaction--if there are
unions recognized, they should be involved, employees need to
be involved as early as possible in any proposal involving
telecommuting and there may even need to be training for
managers on the advantages and disadvantages of going to a
telecommuting arrangement. But it basically starts as a local
process where you cannot communicate too much about what the
intent is.
Mr. Cummings. All right. I do not have anything else. Thank
you.
Mr. Bateman. Thank you, Mr. Cummings.
Now Mr. Underwood.
Mr. Underwood. Thank you, Mr. Chairman, and thank both of
you for having this hearing.
I want to ask a couple of questions, not so much in the
framework that is offered to us here as managing human capital,
but just more or less what happens to these human beings as a
result of these so-called cost saving measures.
In particular in the community I represent, A-76, which has
just been devastating because it is not only the largest A-76
effort, it really has altered the dynamics of Federal
employment and all the kinds of issues that have been brought
out here ranging from no more interest in Federal employment to
the aging to the problems associated with priority placement,
what you do with an isolated community in which the only other
option that people have is to seek employment in the Federal
system 5,000, 6,000 miles away.
So the questions that I wanted to raise were in terms of
the thinking behind the kinds of protections or offers that we
give to Federal employees who are experiencing these job cuts
and they include early retirement and the buyouts and perhaps
some attention to mobility; the two questions I have related to
that and then I have yet another question is what kind of
thinking have either of you gentlemen given to what kinds of
additional programs or protections can be provided or offered
to the Federal employees who are experiencing this; and,
second, has either one of you studied what has happened to
people who exercised the right of first refusal, what
experiences do they undergo because the people who are--this
right of first refusal has been touted as a way to provide some
worker protection and in this particular instance that we are
just undergoing these 3 months, people are being offered--
people who used to make $28,000 a year are now being offered
$17,000 a year and so. I rather doubt that, one, we have yet to
see in the Armed Services Committee the savings that allegedly
come from that and, second, we certainly see the cuts into the
pay that are given to these Federal employees.
So could you address the issue of what kind of general
thinking is there on the issue of incentives or protections and
also what happens to the right of first refusal?
Mr. Holman. Mr. Underwood, we have not done any systematic
look at the right of first refusal. We know that certainly is
there and it is an opportunity for Federal workers who are
affected by the A-76 process to accept employment with the
winning contractor when the contractor wins the competition.
Anecdotally, I can say to you I have heard stories of
communities where the affected workers got equal if not better.
I have also heard stories of other communities where perhaps
workers may end up getting less benefits. But nothing overall
that would say what the overall trend is.
I do know of one situation that is currently underway with
the Army's logistics modernization effort. That effort offered
employees a pretty good package, a soft landing, to accept
employment with the winning contractor; and I think the verdict
is still out as to how many of those employees will, in fact,
take that offer.
One of the things you run into at this day and time with
the aging of the workforce, you have so many workers within 5
or 6 years of being eligible for retirement and while they may
have a good safety net or a package to go to with that winning
contractor, they are not quite willing yet to forego obtaining
the retirement benefits they could get under civil service. So
that is an issue that is out there that looms that affects a
lot of people; but overall, I cannot say we have detailed
information on acceptance or rejection of the right of first
refusal.
Mr. Underwood. I think that certainly suggests itself for
potential study and certainly a more systematic inquiry.
What about the issue of having additional incentives or
protections? Is there any other ideas that have been generated?
Mr. Brostek. We have not really done any investigation of
what in addition to what is currently available might be
needed.
Mr. Underwood. Okay. The issue of core competencies has
been raised, trying to identify that core workforce, and the
term ``inherently governmental'' is used to describe which
employees or which kinds of activities you are going to keep on
civil service activities with civil service employees.
Has, in your experience, the term ``inherently
governmental'' been applied or understood evenly or have there
been efforts to kind of make the definition elastic or contract
whenever someone thinks that it is convenient to do so?
Mr. Cipolla. Sir, I believe that is likely a rhetorical
question.
Mr. Underwood. No, I am interested--well, I am not
interested in a rhetorical answer. Maybe you can just give me
some facts so that I can ask another rhetorical question.
Mr. Cipolla. Our experience from talking with people in
agencies, not only in DOD but across government, is that it is
difficult to reach a consistent view of what is inherently
governmental, as well as have people articulate a consistent
process. And I cannot add anything to that. That basically is--
Mr. Underwood. Well, so then it is not inherent.
Mr. Holman. Mr. Underwood, I think the work that we have
done on the A-76 issue indicates to us that that is very much a
subjective term. It does vary across agencies. In fact, we are
doing some work now looking at the DOD's application of their
DA-20 process as well as the FAIR act and I think it is safe to
say you do see some inconsistencies between the services. I
think it is going to be an evolutionary process as greater
attention is given to looking at individual functions and
trying to determine whether they do involve work that should be
done in house or potentially subject to competition and
contracting out. But there is very much an element of
subjectivity involved.
Mr. Underwood. Well, thank you for those comments and
obviously for it to be an evolutionary process means that a lot
of people get nicked in that process of evolution.
More importantly, as I pointed out to you, Mr. Chairman,
ordinance activities are not even seen as inherently
governmental in the contracting out on this particular A-76
study and it is not even seen as an issue of readiness; and
this is a great source of disappointment to me and is a point
of contention in the implementation of this particular A-76
issue that I am referring to and I certainly would ask other
members of the committee to help me sort this out.
Thank you.
Mr. Bateman. Thank you, Mr. Underwood.
Mr. Ortiz has a question.
Mr. Ortiz. This goes back to when you were talking about
the necessity of having some type of balance, the contract
workers versus the civilian portion. Let me tell you of an
experience I had last week or even before that.
As you well know, some of the Apaches were grounded, could
not fly, they needed to be refurbished and that is very key to
our readiness, Mr. Chairman.
They went to a private company and they told them we need
to work on 700 Apache helicopters. The answer was we can get
started in May of this year and maybe finish by late 2001.
Well, they went to the civil service workers. They are finished
with the work before the other company could get started.
I do believe very strongly that there has to be a balance.
The gentleman went down and says when he came to me, I am
supposed to supply these helicopters when we go to war and we
were not in any position to do so. And he went down just to
thank them because the company, without having to name a name
could not do it; but the civil service workers could do it a
year before the other company could get started. So I think
that the balance, Mr. Chairman, is very, very important. I just
wanted to make this point and maybe you can add something to it
or maybe you have some experiences such as this.
Mr. Cipolla. That is an excellent point and there are as
many anecdotes of that sort on one side of the issue as there
are on the other side, which points up the need for the
validity of the process and even more importantly for having an
objective that tries to achieve as much balance as possible.
Mr. Bateman. All right. Anything further?
Mr. Cummings or Mr. Ortiz.
[No response.]
Mr. Bateman. Gentlemen, we thank you very much for
appearing before us today and giving us the benefit of your
thinking on these matters and we are in your debt.
And with that, we will excuse the first panel and ask the
second panel if they would come up and be seated.
Our second panel this afternoon consists of the following
witnesses: Dr. Diane M. Disney, Deputy Assistant Secretary of
Defense for Civilian Personnel Policy; Mr. David L. Snyder,
Deputy Assistant Secretary of the Army for Civilian Personnel
Policy; Ms. Betty S. Welch, Deputy Assistant Secretary of the
Navy for Civilian Personnel; Ms. Mary Lou Keener, Deputy
Assistant Secretary of the Air Force for Force Management and
Personnel; and Mr. David O. Cooke, Director of Administration
and Management, Office of the Secretary of Defense.
Dr. Disney, we have your full statement, and it will be
made part of the record, and now you may proceed as you choose.
STATEMENTS OF DR. DIANE M. DISNEY, DEPUTY ASSISTANT SECRETARY
OF DEFENSE FOR CIVILIAN PERSONNEL POLICY; DAVID L. SNYDER,
DEPUTY ASSISTANT SECRETARY OF THE ARMY (CIVILIAN PERSONNEL
POLICY); BETTY S. WELCH, DEPUTY ASSISTANT SECRETARY OF THE NAVY
FOR CIVILIAN PERSONNEL; MARY LOU KEENER, DEPUTY ASSISTANT
SECRETARY OF THE AIR FORCE FOR FORCE MANAGEMENT AND PERSONNEL;
AND DAVID O. COOKE, DIRECTOR OF ADMINISTRATION AND MANAGEMENT,
OFFICE OF THE SECRETARY OF DEFENSE
Secretary Disney. Thank you, sir.
Mr. Chairman, members of the subcommittees, I am pleased to
be here today to discuss the matters affecting the civilian
workforce within the Department of Defense.
Over 10 consecutive years of downsizing have brought
significant changes in DOD's workforce, as has already been
pointed out. As fiscal year 1989 ended, DOD employed about 1.15
million people. A decade later, the number had declined to some
732,000, a drop of over 36 percent. Plans call for another 11
percent drop from that number by the end of fiscal year 2005.
What does all of this mean?
First, there has been a 4-year increase in the average age.
Further, the number of employees younger than 31 has dropped by
76 percent. A third of current workers are aged 51 or older, as
accessions have fallen from some 65,000 a year to about 20,000.
This poses problems in the transfer of institutional knowledge.
Second, we are seeing increasing levels of
professionalization. While there has been a decline in all
major areas, the sharpest drops have been in clerical and blue-
collar jobs. The share in professional, technical and
administrative jobs has risen.
Third, today's workforce is more highly educated than in
the past and that is because today's jobs require more
education and training than did earlier ones. Accompanying
these changes has been an increase in typical grade level and
in average costs.
We clearly have a workforce that is very different from
that of a decade ago.
We have worked hard to minimize the trauma associated with
the drawdown. Indeed, we have held layoffs to less than 9
percent of total separations. Foremost among our internal
efforts has been our Priority Placement Program. Tied closely
to that have been the Voluntary Early Retirement Authority
(VERA) and the Voluntary Separation Incentive Payment (VSIP)
better known as the buyout. We are very grateful for your
support with both of these and in related areas as well.
We also owe credit for workforce stability to our labor/
management partnerships which have improved relationships,
increased productivity and reduced costs.
Unfortunate byproducts of the drawdown include the
declining rate of promotions and certain areas of skills
imbalance. Another challenge has been to develop leaders for a
world of broader responsibilities, more complex missions and
fewer resources. That is why we created the award winning
Defense Leadership and Management Program. This systematic
investment in potential civilian leaders will show dividends
far into the future.
Despite the pressures of change, defense civilians have
continued to dedicate themselves fully to the department's
mission. Outside pressures, though, are taking their toll.
Because of the robust American economy, the civil service
simply cannot match some private sectors' starting salaries.
While we use the workforce shaping tools I mentioned
earlier, we ask for your continuing assistance as we enter the
serious right-sizing phase. First we are continuing to develop
tools for force shaping. These would provide the flexibility to
meet critical mission needs and correct skill imbalances.
For example, some units have downsized and reengineered to
where they have the right number of employees, but might not
have the right mix of skills. We are looking to modifications
of VERA and VSIP in this regard.
We are also seeking to extend the authority for employees
to participate voluntarily in reductions in force. Another
request will be to restructure the restriction on degree
training. To permit us to be more competitive in the labor
market, the department is developing a proposal for an
alternative hiring system.
You have also expressed interest in our personnel system
regionalization and systems modernization. We now have 22
regional personnel centers. We have eliminated 10 non-
interoperable data systems. Our new data management system has
been successfully deployed to sites in the Army, Navy and the
Air Force. After milestone 3 approval later this month, full
deployment begins and these efforts will save the department
over $220 million a year.
That concludes my remarks. Thank you again for this
opportunity to discuss issues related to our valuable civilian
workforce, and I will be pleased to answer your questions.
[The prepared statement of Secretary Disney can be found in
the Appendix on page 358.]
Mr. Bateman. Thank you very much, Dr. Disney.
Now we will be happy to hear from Mr. Snyder, Deputy
Assistant Secretary of the Army for Civilian Personnel Policy.
Mr. Snyder.
Secretary Snyder. Thank you, Mr. Chairman. I also have more
detailed remarks, and I will just summarize those.
Mr. Bateman. All of the witnesses' prepared statements will
be made a part of the record.
Secretary Snyder. Mr. Chairman and distinguished
subcommittee members, thank you for the opportunity to testify
on Army civilian workforce issues and also for your commitment
to policies and programs that maintain the high quality of the
Federal service.
My statement will discuss the Army's experience with the
civilian drawdown, strength projections and related issues.
During the 10-year period that ended 30 September 1999, the
Army reduced its total appropriated fund strength by more than
42 percent. When only military functions are included, our
civilian strength declined by more than 44 percent during the
above period. We are programmed to reach an end strength of a
little over 209,000 by 2005. This will be a 48 percent
reduction from the fiscal year 1989 level.
We have experienced similar demographic changes to those of
DOD as a whole, including a shift toward a greater proportion
of the workforce in professional occupations and higher
educational levels.
The age and tenure of Army civilians has increased
significantly during the drawdown and 30 percent of our
professional, administrative and technical workforce will be
eligible for optional retirement in 2003, 62 percent in 2010.
To counter the losses we expect, it is critical that we
significantly increase our civilian recruitment and entry
levels, particularly in the professional, administrative and
technical occupations. The Army has an intern program, and that
is one of the means and methods that we use to access those who
will become our future civilian leaders. We centrally fund our
intern program, but it has declined steadily over the years
during the drawdown. In 1989, we had a total of 3,800 civilian
interns. We will have 950 in fiscal year 2001.
We anticipate greater difficulty in filling journeymen
level and leadership vacancies with highly qualified and well
trained employees. Given the tight labor market, recruitment
competition among employers is intense and the Army, as well as
other Federal agencies, are at a competitive disadvantage
because of certain requirements and restrictions of the Federal
personnel system.
We are participating with the Office of the Secretary of
Defense (OSD) and the other components in a development of the
DOD alternative system that Dr. Disney referred to. We also
have been participating in regionalization and it has been a
challenge. We have aggressively addressed the needs of our
customers and we will continue to do so, but it has not been
easy.
Now, one final thing on the Army civilian workforce. It has
been and will continue to be a major contributor to military
readiness, performing a wide range of future functions
essential to the Army's mission. Over 43,000 civilians of the
Army are forward stationed around the globe. Army civilians
have provided direct support to operations such as Desert
Storm, Haiti and those in the Balkans. And because of this
dedication by our Army civilians to this important work, I am
especially pleased to have the opportunity to present the
Army's views on matters affecting our civilian workforce.
This concludes my remarks. I will be pleased to answer any
questions.
[The prepared statement of Secretary Snyder can be found in
the Appendix on page 378.]
Mr. Bateman. Thank you, Mr. Snyder.
And now we will be pleased to hear from Ms. Welch, the
Deputy Assistant Secretary of the Navy for Civilian Personnel.
Ms. Welch.
Secretary Welch. Thank you, Chairman.
Members of the subcommittees, I am also pleased to be here
today to provide testimony about the civilian workforce of the
Department of the Navy.
This afternoon I will talk to you about the impact of 10
years' worth of civilian workforce downsizing, where we are now
and some of our plans for the future.
Today, as a result of downsizing and reduced hiring, our
civilian workforce is 44 percent smaller than it was 10 years
ago. We achieved this reduction and minimized the impact on our
civilian workforce by using all of the tools available to us,
including the DOD priority placement program, outplacement
services and the separation incentive pay authorized by
Congress in 1993. Before the incentive pay, 56 percent of our
separations were involuntary. With incentive pay, that number
dropped to 17 percent.
Downsizing left us with a more senior workforce. Ten years
ago, only 16 percent of our workforce was eligible for
retirement. Today, that figure is closer to 34 percent. This
situation is even more troubling when you realize that 47
percent of our engineers, 55 percent of our scientists and 64
percent of our contract specialists will be eligible for
retirement in the next 5 years.
The average age of our non-supervisory blue collar
employees is 47. In the next 5 years, 53 percent of them will
be eligible for retirement. This means we have an older
workforce closer to retirement without an adequate number of
replacements in the pipeline.
To prepare for the future and to ensure we have a diverse
and highly skilled civilian workforce, we recognize the need
for attracting, retaining and developing employees ready to
meet the Navy's mission. For the professional and
administrative workforce, we are supporting our commands in
establishing and coordinating a recruiting effort to attract
highly qualified individuals. On the blue collar side, the
Department of the Navy has a long and illustrious history of
hiring and training the best deck plate workforce in the world.
During the past 10 years, as we have closed several of our
shipyards and aviation depots, our apprentice programs slowed
to a trickle. Today, our systems commanders and the Atlantic
and Pacific fleet commanders who are responsible for the
department's depot level workforce consider the apprentice
program a vital part of their efforts to prepare for the
workforce of tomorrow. Thanks to the additional funding
received in fiscal year 1999 and fiscal year 2000, our
apprentice programs are now being revived.
The well being and development of our current workforce is
also an important part of our future. Our focus is in three
areas: workforce development, quality of work life and
workplace dispute resolution.
First, we are committed to our workforce through programs
such as the DOD leadership and management program, the
Department of the Navy's civilian leadership development
program and continuous learning initiatives for our employees.
Second, we are continuing to encourage our commands and
activities to use flexible work arrangements such as job
sharing, part-time employment, alternative work schedules and
satellite work locations suitable to local needs.
And, finally, we are focusing on workplace dispute
resolution, an issue of extreme importance to our employees and
managers. In 1997, we launched a reengineering project to look
at our equal employment opportunity program. The No. 1 problem
cited by both managers and employees was the costly, lengthy
divisive process used to resolve equal employment opportunity
(EEO) complaints.
With that in mind, we put together a pilot EEO complaint
process that deals with these issues and provides a less
contentious forum for resolving workplace disputes. We are
extremely pleased with the results to date. Our employees at
the pilot sites are choosing to take a more active role in
early resolution of their disputes. More of the complaints are
being resolved informally, and the processing time and costs
have been significantly decreased. Based on our positive
experience, we are expanding the pilots to several more
activities this year.
This concludes my remarks. Thank you for the opportunity to
address you, and I would be pleased to answer any questions you
may have for me.
[The prepared statement of Secretary Welch can be found in
the Appendix on page 391.]
Mr. Bateman. Thank you, Ms. Welch. I neglected to mention
that a part of your title is Secretary of the Navy for Civilian
Personnel and Equal Employment Opportunity, so I can understand
why you highlighted that.
Now we will hear from Ms. Mary Lou Keener, Deputy Assistant
Secretary of the Air Force for Force Management and Personnel.
Ms. Keener.
Secretary Keener. Mr. Chairman and members of the
subcommittees, I am pleased to join Dr. Disney and other panel
members in testifying on these very important issues. It is a
privilege to represent the Air Force civilian workforce whose
daily contributions ensure the readiness of our force.
The Air Force cannot rely on just one element of our force
for readiness. It takes all of our people, military, civilian,
Guard and Reserve, their integrated contributions and the
synergy and flexibility they create to ensure that we are the
preeminent expeditionary aerospace force in the world.
We appreciate the support that the Congress has provided to
address military recruiting and retention issues. Our
challenges in the civilian workforce are no less serious.
My written testimony addresses these challenges in more
detail, but I would like to spend the majority of my time this
afternoon and focus my comments on how we in the Air Force plan
to address these challenges.
I would like to tell you that we do have a plan to meet
these challenges. We have a civilian workforce shaping plan
that we feel is specifically geared to satisfy our future Air
Force mission requirements. And with your help, we are prepared
to begin to execute this plan.
In my written testimony on page 5, there is a colored bar
graph, and this graph depicts for you where we anticipate that
our civilian workforce needs to be by the year 2005. That graph
also outlines for you the three major elements of our workforce
shaping plan that will, we feel, assist us to reach our
objectives. That plan consists of three major elements. Those
major elements, as you can see, are first of all force renewal,
force skills, development skills, accuracy and separation
management.
In the area of accession planning, force renewal is a
priority for us and it is particularly critical in the depots.
The depot maintenance community has experienced a decade long
hiring restriction freeze and Base Realignment and Closure
(BRAC) actions that have resulted in a severe imbalance in
skills and levels of experience.
In the next few years, we will lose more employees,
particularly in the blue collar occupations, due to years of
service and we need to undertake aggressive hiring efforts.
In the area of force development, the Air Force will invest
in training and retraining our current employees to keep them
up to date in this rapidly changing environment, but we also
need the ability to achieve that third prong of our plan which
is to stimulate and manage separations in our workforce.
The voluntary early retirement and voluntary separation
incentive programs that you provided us with, and for which we
are very grateful, have been very valuable tools to rapidly
draw down the force; but we need the ability to offer targeted,
voluntary incentives that are not tied to reduction in force
and can be used with more precision in shaping the workforce
that is needed to meet our mission requirements.
In closing, the Air Force believes that it takes all
elements of our total force working together in a seamless
manner to sustain readiness. With your help and the tools
necessary to execute our workforce shaping plan, we will
sustain the best force mix and the best talent to do our job.
We appreciate the opportunity to address these critical
issues regarding the civilian component of our force, and I
will be happy to answer any questions of the panel.
[The prepared statement of Secretary Keener can be found in
the Appendix on page 400.]
Mr. Bateman. Thank you, Ms. Keener.
Now we will be pleased to hear from Mr. David O. Cooke, who
is Director of Administration and Management of the Office of
the Secretary of Defense.
Mr. Cooke.
Mr. Cooke. Thank you, Mr. Chairman. I am here representing
what we call the Fourth Estate. Perhaps I had better define
that. The Fourth Estate is the Department of Defense which is
not in the Departments of Army, Navy and Air Force.
You know, it is really--
Mr. Bateman. Mr. Cooke, if you would, pull that microphone
a little closer to you.
Mr. Cooke. I will indeed.
The Fourth Estate is composed of defense agencies, defense
field activities, and several other defense organizations, not
as alike as peas in the pod. Some of these defense agency field
activities are very small, some of them represent substantial
size, Defense Logistics Agency, for example, or the Defense
Finance and Accounting Agency.
The problems in the Fourth Estate, though, are essentially
those described by my colleagues, Dr. Disney and so forth. We
appreciate the opportunity to be heard on these problems. I can
only observe that the Fourth Estate as a group is
overwhelmingly civilian, more so than the military departments.
It is more heavily white collar and it is more heavily female
in composition.
Now, there is a tendency to think that all members of the
Fourth Estate are alike and that is simply not true in terms of
organization, mission, reporting assignments and so forth. For
example, there are some, I think, misconceptions that
Washington Headquarters Services is just OSD by another name,
but Washington Headquarters Services is an operating function.
It supports, for example, all administrative space, General
Services Administration (GSA) space, in the National Capital
Region. I have a small outfit in Washington Headquarters
Services which is responsible for absentee voting worldwide. We
are doing some very interesting things, by the way, and seeing
whether we can eventually have voting by the Internet.
The Fourth Estate has grown over the years, largely by
taking functions which were fragmented among the military
departments and pulling them together into a defense agency or
a defense field activity, but nonetheless we have maintained
our share of reductions along with the military departments.
OSD itself, for example, has come down by 33 percent and so
there are significant reductions.
We certainly need the things that Dr. Disney talked about
to shape the workforce. We support them and I am, of course,
available to answer any questions you may have.
Thank you.
[The prepared statement of Mr. Cooke can be found in the
Appendix on page 415.]
Mr. Bateman. Thank you, Mr. Cooke, and I thank all of the
witnesses for being here with us today and providing us with
their testimony.
I am intrigued as to some of the statistics. I do not
remember them all, I did not write them all down, but we have a
DOD wide percentage reduction in civilian personnel. We have
different percentages for each of the services.
Could you review for me what the percentage reduction has
been since, say, 1989 or whatever date is more convenient so
that we have an idea as to the relative size of the downsizing
in each of your agencies?
Secretary Disney. For the department as a whole, the
reduction has been from 1.15 million to roughly 732,000, which
is roughly 36 percent.
Mr. Bateman. And for the Army, that figure is?
Secretary Snyder. Mr. Chairman, the Army has gone from
406,000 civilians at the end of September 1989 to approximately
today about 220,000. That is roughly 42 percent.
Mr. Bateman. And, Ms. Welch, the Navy.
Secretary Welch. The Navy, sir, in September 1989 we were
at about 130,000; December 1999, 184,700 or about 44 percent
smaller.
Mr. Bateman. And, let us see. Mr. Cooke, in your Fourth
Estate?
Mr. Cooke. I would like provide it for the record. You do
not want all 14 defense agencies and seven--
Mr. Bateman. Yes. You do not have--
Mr. Cooke. Overall, there is a substantial reduction, but
that number will be sort of meaningless because some of our
larger agencies have taken much larger percentages than some of
the smaller ones and so forth.
Secretary Disney. Mr. Chairman, if I could?
Mr. Bateman. Yes. Certainly.
Secretary Disney. I would like to take this question for
the record because even though we know the numbers, there are
differences in whether everyone is talking about military and
civil functions. So in order to make certain that we are giving
you consistent numbers, I would like to be able to provide the
data for you.
Mr. Bateman. That would be very helpful if you would, Dr.
Disney.
Secretary Disney. I will do that.
Mr. Bateman. Ms. Keener, I did not give you a chance to
answer. Excuse me.
Secretary Keener. Mr. Chairman, in fiscal year 1989, the
Air Force stood at 260,000 members. At the end of fiscal year
1999, we were at 165,000 for a decrease of about 37 percent.
Mr. Bateman. Okay. There are further reductions in the
civilian personnel force contemplated. What is that number?
Secretary Disney. Yes, sir. Another 11 percent from the
fiscal 1999 levels between now and the end of 2005.
Mr. Bateman. Who determined that that number should be 11
percent as opposed to 15 percent or 5 percent?
Secretary Disney. That is part of our normal budgeting
process, sir.
Mr. Bateman. But it is a figure developed by the Department
of Defense?
Secretary Disney. A department wide effort. Yes.
Mr. Bateman. Not something that we in the Congress said you
shall reduce by that number?
Secretary Disney. Well, there are some instances where the
Congress indicates that we should take cuts of a certain
magnitude either number or percentage, as in headquarters and
as in the acquisition corps.
Mr. Bateman. My colleague Mr. Hunter is very prone to be
very outspoken on those categories of personnel.
Secretary Disney. Yes, sir.
Mr. Bateman. Do you have any observations you would like to
make on that subject?
Secretary Disney. On Mr. Hunter or on reductions?
[Laughter.]
Mr. Bateman. I am sure we would all praise Mr. Hunter, but
on the question of the reductions and whether they are
manageable.
Secretary Disney. Yes, sir. The department would find it
much easier to manage if there were not constraints on specific
percentages in specific areas. That would make it perhaps
easier to manage to meet the full competency needs for
readiness as we have indicated earlier.
Mr. Bateman. You have spoken in terms of the number of
people and the dramatic increase in the number of people
eligible for retirement. Do you contemplate a need for
incentives for people not to retire?
Secretary Disney. No, sir. We already have retention
options that are available to us.
Mr. Bateman. So you have some tools to encourage selected
skills that are in short supply to remain in the workforce,
even though they are eligible for retirement.
Secretary Disney. Yes. And we find that a great many people
who are retirement eligible do not in fact retire.
Mr. Bateman. I have done that for a while myself.
Secretary Disney. And we have an example right here at the
table.
Mr. Bateman. Okay.
Mr. Mica.
Mr. Mica. Thank you.
I am wondering if you have looked at ways to create
incentives to stay since it costs so much to train new people;
since people are living longer and working longer, is there
anything that you have recommended in your legislative package
or personnel changes and procedures as incentives to stay?
Secretary Disney. No, sir.
Secretary Keener. I would add, Mr. Mica, that in the Air
Force, we have recently executed a 10 percent across the board
retention bonus for our Reserve pilots, so that is one
initiative that we have just executed.
Mr. Mica. Well, it seems like it would, you know, in an
area that is highly technical if you can get these folks to
stay on and encourage them--they are going to probably retire,
get some retirement benefits and go do the same thing somewhere
else, which does not make a whole lot of sense.
Secretary Disney. Well, sir, we do have the retention
allowances and we are making every effort to make certain that
managers across the department are more aware of these so that
they can, in fact, be used in areas of skills need.
Mr. Mica. Well, that is, you know, an incentive program.
How about has anyone broached the possibility of adding a month
on every year in the future toward retirement, we keep them
around a little bit longer? What is it to retire now, like 20--
well, I guess you can retire just about any time.
Secretary Disney. You can take early retirement after 25
years of work at any age, but there is, of course, a reduction
in the amount that you would get.
Mr. Mica. What about 25 years and add a month every year?
Secretary Disney. That is a very interesting concept.
Mr. Mica. Like we are doing with Social Security. Has
anybody proposed any changes in what we have had?
Secretary Disney. Yes, sir. There is one option that has
been proposed, that has been discussed within the department
and that is one that we call phased retirement. That stems from
the belief that people are reluctant to retire sometimes for
fear of loss of income or fear of loss of sanity. And we have
tried to devise a way to address both of those concerns, which
would allow an individual to go from full employment to 75
percent time, but be able to draw perhaps on some of the
retirement income so that the income loss would not be a
problem.
The second year it would be a 50/50 arrangement and then
the person would leave. That would provide a rational way of an
individual moving out but also of bringing somebody in and
having an orderly transfer of institutional knowledge.
Now, that is just one idea that has been discussed.
Mr. Mica. Well, it sounds like you have a heap of people
that are getting ready or will be eligible to retire and some
very strategic, high cost, difficult to replace or train or
acquire, in a job market that is becoming increasingly tight
and smaller numbers; so I think we ought to be looking at
something where we could retain--have some incentives. You
know, I would love to have these people greet me at Wal-Mart;
but I think that their talents could be better utilized in some
of these positions.
I am surprised that the military and civilian employment
really has not looked at more incentives to retain good folks
and reward them for staying or revised a schedule that was set
up.
Mr. Bateman is going to be around and live a long, long
time past his retirement.
Mr. Bateman. I think the sanity might be a problem.
[Laughter.]
Mr. Mica. But he will be looking for something to do.
Of course, we have our own retirement plan that is put in
effect by voters, too. It is a little bit different situation.
But seriously, it seems to me that we are sort of missing the
lick and that a lot of the civilian people are realizing this,
that people work longer, they can contribute longer; we should
not push them out and then bring in someone at a higher cost,
so they have a longer productivity and make some incentives
available.
Secretary Disney. Yes, sir. This is an issue I agree with
you more and more on every passing year.
Mr. Mica. Particularly at your age, you should.
Secretary Disney. Bless your heart. [Laughter.]
We would be more than delighted to work with you and your
staff on exploring options.
Mr. Mica. You have in the past and I appreciate that. Thank
you.
Thank you, Mr. Chairman.
Mr. Bateman. Mr. Ortiz.
Mr. Ortiz. Thank you.
For Ms. Welch, I have a question.
How important was it for the Navy Apprenticeship Program
funding to be outside the working capital fund earmarked? In
other words, what would happen if the funding were to be
rescinded?
Secretary Welch. First, I think we need to thank you for
giving us those funds, and it would be very important to us to
continue to have those funds outside of the working capital
fund. As you know, that was part of the reason for the
degradation in the apprenticeship program to start with and so
the continued budget support is most appreciated and is being
used very, very well.
Mr. Ortiz. Very good.
And then for Mr. Snyder, what tools does the Army have in
place to ensure that it retains the necessary technical skills
in its industrial facility when there are across-the-board
reductions ordered? And this is because of prior experiences
that we had. At the Army depot, you know, what they did, we
said we must downsize, we downsized; but we never took into
consideration who was going to be relieved of their duties, who
was going to be out, and then we found ourselves that some of
the technical skills that we had were gone. So do we have
something in place that will help us maintain those skills?
Secretary Snyder. That is a two-part answer, Mr. Ortiz, and
the first part is when activities downsize, they take a look
organizationally and, as a general rule, they do not take out
of the workforce skills that they need. That is one of the
fundamentals of the way that we run reductions within the
Federal Government as a whole.
Now, on the other side, where we come around in terms of
accessions, we have what I call--and I referred to it in my
statement--an intern program which is for the Army career
program's engineers and scientists, and it is basically a white
collar program. It is basically a white collar program that
while we have those people in that program they are insulated
from reduction in force. In other words, they will not be
touched by a reduction in force. We are now working with the
Army Materiel Command to try to size, and we are working on the
requirement to try to get to an appropriate size what an
apprentice program should be because we just recently heard
from General Coburn who says this is one of his largest needs
and so we are trying to get the right size on that requirement
even today. And we expect to have it finished some time in the
spring.
Mr. Ortiz. Thank you.
Thank you, Mr. Chairman.
Mr. Bateman. Thank you, Mr. Ortiz.
Let me ask, if I might, if each of you could address
whether or not in the phraseology of Mr. Brostek, the
Department of Defense as a whole and the military components
are in the course of or have developed a workforce plan. Do all
of you have one or are you in the process of developing one in
the context of the testimony of Mr. Cipolla and Mr. Brostek?
Secretary Disney. Yes, sir. The Department of Defense
historically has not approached the planning for the civilian
sector as it has for the military because there are inherent
differences between the two. The military has age restrictions,
it has an up or out system, it has a mix of floors and ceilings
and other kinds of things that make the planning there much
more rigid. The civilian sector, though, has no mandatory
retirement age and rather than up or out, it is much more of an
up and stay kind of model.
For the past 6 years, we have been paying a great deal of
attention as a department and as individual components to
workforce planning. For example, every 3 months, 3 to 4 months,
we bring all of the components in the functional areas together
to assess where we were on a great range of demographic
characteristics, successions, eligibility for retirement and so
forth in 1989 and where we are now. We look at the difference.
We have built a micro simulation model that permits us to make
projections of where we will be 5 years or so into the future,
so we look at where we are likely to be if there are no changes
in policies or programs.
If we are not satisfied that we are headed in the right
direction, we use those forums to develop legislative proposals
or internal programs to change the way we operate. It is that
process that has enabled us to come forward with our
legislative proposals.
Data analysis--let me talk a little bit more about that. We
have commissioned some very special studies to help us in this
regard. In one case, Rand Corp. is working with us and the
Joint Staff on a study called future worker, future warrior,
where we look at all the military and civilian positions we
have now and compare them to all other positions. We had a
cadre of occupational analysts from a number of areas look at
them across five different dimensions as to how likely they
were to change in the future and where our need was to be. What
we wanted to do was to determine the mix of competencies
necessary in 2010 so that we could begin changing our programs
and influencing high schools and colleges to change theirs to
enable us to yield the right mix from which we could select in
the future.
In addition, we have done any number of studies related to
the impact of A-76 and other kinds of things, so we have built
a body of research that enables us to meet the first important
prong of workforce planning which is the database.
The second thing we have done on a department wide basis is
increase our investment in education and training. We mentioned
the DLAMP program. We have also been working with the
acquisition technology and logistics community to identify the
key two dozen competencies to be needed in the future so we can
restructure the Defense Acquisition University to yield what we
will want in the future.
We have been doing a similar thing with the intelligence
community. So there are more examples, but those will suffice
for now.
And the third is to develop a managed approach to
accessions and separations.
So when we put the three of them together, we can say we
have a strategy for the department as a whole and then this
cascades down to specific plans with somewhat varying details
in each of the components.
Mr. Bateman. In light of Dr. Disney's very meaningful
statement, does any other witness have anything they would like
to add?
Mr. Snyder.
Secretary Snyder. Yes, Mr. Chairman. The Army has a system
that is known as Total Army Analysis and I am sure Mr. Hawley
has probably been associated with that in the past, but the
term Total Army Analysis up until last year was not total
because it did not include the civilian part of the workforce.
And so what we have done in the Army, what we did in the Army
last year was we started the process to include the whole
civilian workforce in Total Army Analysis and the TAA process
goes out into the out years to--I think it is to about 2010, if
not a little bit sooner. But what we have done with that is we
use a very sophisticated projection model on the civilian
workforce side, which, as Dr. Disney says, will do a very good
and accurate job of projecting where we will be absent any
policy changes.
We then take our functional chiefs and our career program
managers to take a look at the 80,000 or so high level
civilians--we have to take a look at their career fields and
add into that what they know and believe will come as a result
of technology changes and whatever.
At the end of that, we end up with a much more precise
slice of what we believe the civilian workforce will look like.
Is it 100 percent accurate right now? No, but it is a lot
better than what we used to use.
Mr. Bateman. Thank you, Mr. Snyder.
Anyone else?
Secretary Keener. Yes, sir. I would just like to add that I
did briefly describe our plan in my opening statement, but I
wanted to add that last month, in February, we executed a
civilian workforce shaping summit here in Washington. We
brought stakeholders in from all over the country and
encouraged them to think out of the box. That is why I was
interested in Mr. Mica's comments earlier because these people
were encouraged to think about the kinds of things that you
were talking about that might aid us in our workforce shaping.
Also, I would like to mention that the Air Force Materiel
Command (AFMC) is our largest employer of civilians, and they
have been engaged in an in-depth study over the last year to
try to come up with a plan to right size the civilian force at
AFMC and specifically look at the depot force in that command.
Mr. Bateman. Thank you very much.
Anyone else?
Yes, Ms. Welch.
Secretary Welch. The Navy, as you probably well know, is
much more decentralized than our fellow components here. Over
the last 2 years, we have been working with our highest ranking
civilian executives looking at how to shape our workforce for
the future because it is a major concern to us.
Mr. Bateman. Thank you.
Mr. Cooke.
Well, apparently--are we in recess or do we have votes?
Mr. Cummings, we will call on you as we clarify whether or
not this is a recess of the House or whether it is votes.
Mr. Cummings. Very well. Thank you very much, Mr. Chairman.
What are you doing with regard to colleges? Just a little
earlier, we talked about training and somebody on the panel
before you all talked about how so often when the budget is cut
a lot of times training dollars go out or are reduced and I
just believe in training because I think any time you can give
people an opportunity to become better and to make more money
at what they are already doing in the field that they are
already in, I think it is really good.
So I was wondering, No. 1, do you all find that to be the
case? What kind of training opportunities are there available
as you try to restructure it and make the workforce consistent
with your needs?
Secretary Disney. We are making a very concerted effort
within the Department of Defense to dedicate more dollars to
education and training but also to use the dollars that we have
more effectively, and that cuts across every level of education
and training.
Mr. Cummings. So do you use colleges? I mean, in other
words--
Secretary Disney. We have in our Defense Leadership and
Management program, we are offering courses that we do in
conjunction with institutions of higher education. We also are
proposing some legislation this year that would eliminate the
restriction against paying for degrees. That is a barrier to us
in some areas because while it is perfectly legal for us to pay
for individual courses and have those courses perhaps lead to a
degree, that is not necessarily the same thing as enrolling
someone in a degree program for a definite purpose. We would
like the flexibility to be able to do the latter because that
is better career management.
Mr. Cummings. That legislation, would it have--I mean, what
kind of teeth does it have, if any, to make sure that the
person once they get the degree, you know, sticks in that job
that we are preparing them to do? I mean, is there a certain
period of time?
Secretary Disney. There is a requirement for staying three
times the length of the education or training. Yes, sir.
Mr. Cummings. So where is that now?
Secretary Disney. That is in our legislative package,
working its way through the process.
Mr. Cooke. Let me tell you a program we run in OSD that
does very well. We have authority, as we all do, to bring in
interns for the summer, from colleges or what not. We decided
to bring in faculty members from the historically black
colleges and universities for two reasons: one, they would be a
little more mature and we might get some better contributions
from them during the summer and, two, they would go back to
their campuses and talk up OSD and WHS as being not bad places
to work and it has done reasonably well over the years.
Mr. Cummings. Very good.
Mr. Bateman. I suspect the committee ought to recess now in
order to go and vote, but we will return, if the witnesses will
be patient with us, as soon as we can take care of two votes.
[Recess.]
Mr. Bateman. The hearing will resume and I will recognize
Mr. Underwood for any questions he may have.
Mr. Underwood. Thank you. Thank you very much, Mr.
Chairman, and thank you for your testimony. I have read briefly
through some of it and I had a conversation with you just now,
Dr. Disney, and perhaps just for the record, I asked a question
with the earlier panel about some thinking about how to better
provide assistance to workers who are undergoing a dramatic
work transition through no fault of their own and what are some
of the ideas behind that.
Any kind of new innovative ideas other than the current
existing system and what about the issue of how we deal with
the term ``inherently governmental,'' which is kind of
certainly a sore spot because it varies from agency to agency,
I am sure; but particularly with regards to the Department of
Defense.
Secretary Disney. Yes, sir. ``Inherently governmental'' is
a term that can vary, the definition of which can vary from
agency to agency. As we were talking, what is inherently
governmental in the Department of Agriculture may well not be
in the Department of Defense. And I think they're working about
as many definitions of that as there are agencies at this
particular moment. But we are going through a process within
DOD to try to make certain that there is unanimity within the
department as to what this means.
Also with the department we have been very concerned about
trying to manage the downsizing humanely, not just efficiently,
and that is why we have continued to invest in our Priority
Placement Program, which is the model placement program, I
think, in the country. This enables someone who is about to
lose his or her job for no personal fault at all to find new
employment within the department.
The individual registers, perhaps as long as 2 years in
advance of a reduction in force, and is retained on the roster
as long as the year after that in order to provide an
opportunity for them to turn up a position for which the person
is well qualified.
The individual registers in areas of competence and then
geographic areas of preference. And if there is a position that
comes up, that person has that job unless it can be
demonstrated that he or she is not qualified.
This has served us very well. Since its founding, it has
found new jobs within the department for 161,000 people. Since
our drawdown began, it has found new jobs for some 75,000
within DOD.
At the height of BRAC, it was finding them at the rate of
1,000 a month. Now that rate has declined because we have fewer
positions into which to put people.
In the situation of Guam, we know that over 200 people were
found new jobs within priority placement and others have
received new offers. We also instituted a special program
called the expanded buyout program that enabled us to pay
buyouts in other areas and then relocate someone into that
empty position. An additional 40 have been able to continue
their employment through that.
So when we add the ones who have received VSIP and VERA, we
see that about 500 of the individuals who were facing
dislocation through no fault of their own have either found
their way into retirement more easily than would otherwise have
been the case or have retained their employment. The others are
still registered, so there are options that are still
available.
Mr. Underwood. Okay. On the issue of ``inherently
governmental,'' in our discussion and certainly in this
committee we have heard it before, those activities which are
directly related to warfighting and preparation for
warfighting, and what strikes me as odd in the particular case
of Guam is that we have taken ordnance handling, which I would
assume almost anyone would readily admit is preparation for
warfighting; it has been contracted out, has been subjected to
outsourcing.
It occurs to me that that is quite a stretch and also if
the main motivation is saving money and you have a case like a
community like Guam, which is many, many thousands of miles
away, when you reduce the inherent and the core capacity to
respond to military activities out there as has already been
the case with lots of people leaving, the time in the future
when there may be a bump up or a need to raise the level of
activity again, it is actually going to be far more costly
because people are going to have to be brought in; and if it is
done by the contractor, the contractor is going to put that
into whatever additional funding, any modification for their
contract; or if it is going to be civil service, then obviously
you have a case where you are going to have a lot of people who
are ``stateside hire'' and they are going to be entitled to
many, many more benefits.
And it just seems to me that even though it is very
difficult to make the case here because they are all civil
service employees; but in this particular instance there was--
you have what is a forward deployed situation being dealt with
as if it was another military installation, you know, with the
usual economic environment and usual numbers of people that are
available for various kinds of jobs.
But on some of these jobs that are very, very specialized,
the capacity is gone and they are now thousands of miles
somewhere else.
Secretary Disney. Sir, I am afraid I am not totally
familiar with all the details of the reasoning for the
contracting study and for that I would have to defer to Ms.
Welch of the Navy, if she would care to comment.
Mr. Underwood. Ms. Welch.
Secretary Welch. I cannot comment any further either as to
why that contracting out study was done, but I would be happy
to find out and get that information back to you if there is
anything further we can add.
Mr. Bateman. If you would, supply that for the committee's
record for the hearing. We are going to keep the record of the
hearing open in the event there are other Members who have
questions and have not had a chance to pose them or if staff
might have some questions that they feel like we would be
benefited from.
Also, for the record, Dr. Disney, you were going to furnish
us with the numbers on the drawdown of the various departments
and agencies within the Department of Defense. Would it be
unduly burdensome to also give to us the number of new contract
employees, non-governmental employees, that are now on the
payroll and the cost of those people?
Secretary Disney. Well, sir, there is no requirement that
that information be collected, so consequently there is no
database on the employees of the contractors. The database that
we have on contracts does not include it anywhere.
Mr. Bateman. So you have no basis to determine how many
people are now doing services for the U.S. Government under
contract relative to the number of civil service employees who
have gone away?
Secretary Disney. That is correct.
Mr. Bateman. Okay.
Mr. Chambliss.
Mr. Chambliss. Thank you, Mr. Chairman.
Ms. Keener, as you correctly note in your written
testimony, we are in an increased era of contracting out and
privatization as the military and in particular the Air Force
outsources new weapons systems.
What impact does that have on the workforce's ability to
sustain the systems that are assigned to the government and
what is being done to ensure that the government retains the
skills to ensure a ready and controlled maintenance capability?
Secretary Keener. First, Mr. Chambliss, it is our intent to
fully comply with the 50/50 rule, the ratio, and right now we
are right at that level, so we do not intend to ever go beyond
the rule and contract out to a greater degree, more than 50
percent of that workforce, particularly in depots which I think
you are referring to.
On the issue--the second part of your question, what do we
intend to do to guarantee that we have a good balance of skills
and be able to sustain the force, in my oral statement I
described the strategic civilian workforce shaping plan that
the Air Force has developed and in that statement I describe
the three-prong process that we intend to utilize to do exactly
what you have asked.
First of all, we are going to deal with accession planning
and that deals with force renewal, which will be particularly
important in the area of helping us to bring in new entry level
employees in the blue collar area.
The second aspect of our plan deals with training and
retraining and that will help us to provide a better balance of
the skill mix that we have in our force.
And, last, we talked about the importance of separation
management as a part of that plan; and that will assist us to
expand our VERA/VSIP authority so that we will be able to use
that as a real management tool, rather than just as a reduction
in force tool, and selectively be able to narrowly focus those
individuals that we want to offer buyouts to.
Mr. Chambliss. The Air Force has previously testified about
difficulty in hiring skilled personnel during surge times. Can
you talk a little bit about what impediments they do face and
what we are talking about doing to overcome those impediments?
Secretary Keener. In certain areas, specifically, in high
tech areas, information technology, those particular areas that
we really need skilled people for, it is particularly difficult
to find those people and to bring them into the workforce, but
we are doing everything that we can to utilize initiatives in
the area of force renewal to be able to attract these people to
the Air Force. We recognize that there are severe impediments
out there. We are dealing with a very robust economy. But some
of the specific initiatives that are in both Dr. Disney's
testimony and in my testimony we are targeting to help us to
bring in a new entry level force.
Mr. Chambliss. Well, realizing that we are in a little bit
different economy from what we were in in 1991 and 1992, when
we were last required to really surge, are we looking ahead to
the potential impediments that may be there and do we feel
confident in the event of a near-term conflict we are going to
be able to reach out and fill that surge capacity problem?
Secretary Keener. Yes, sir. I think we do. And the plan, as
I described it in my statement, projects--this plan is really
based on what we perceive to be our mission requirements in the
year 2005. So this plan is not just a plan to try to bring in
people that we need, this is a real plan that is geared to what
our mission requirements will be and that will actually help us
to achieve that state of readiness that we know we need to be
at.
Mr. Chambliss. Dr. Disney, I have heard complaints over the
last several years, 6 years, from quite a number of my
constituents who work at Robins Air Force Base about the lack
of increases in the wage grade pay scale compared to other
areas of the State.
Can you explain why a worker, say an electrician, at Robins
Air Force Base, might be paid at a certain level while a worker
doing the same job in Atlanta, which is less than 100 miles
away, might be paid at a higher rate or a worker doing the same
job at another government agency in Warner Robins would be paid
at a higher rate?
And also why have the general schedule employees received
pay increases equal to twice the amount of the wage grade
people over the last 14 years?
Secretary Disney. Yes, sir. The general schedule and the
blue collar workers find their wages set in different ways. For
the general schedule, the wages are set on a national level,
with the increases set nationally; and a portion of the
national increase is set aside for locality adjustments. A very
small portion of that. But what it means is that the core wage
of a GS worker in Washington, DC, is the same as that in Macon,
is the same as that in Portland, OR.
The Federal wage system employees, on the other hand, find
their wages based upon prevailing wages in the geographic area
in which they are located, generally the commuting area. These
wage areas are determined through the work of the Federal
Prevailing Rate Advisory Committee, which is advisory to the
Office of Personnel Management.
That consists of both union representatives and civil
service agency representatives. The wage surveys are conducted
by people in my organization in conjunction with their labor
counterparts; and that is where the information comes from,
from surveys of the area that get used to establish what those
rates are.
Mr. Chambliss. Yes, well, I understand that, but I mean,
you have--for example, in our depot, you have specialized jobs
that there are not many jobs like that in the area immediately
surrounding the depot. But there are those same jobs at
Lockheed, for example, and in Atlanta, which is, like I say,
less than 100 miles away and certainly within--we have folks
that commute every day back and forth to Lockheed and from
Atlanta down to the depot, and the wage rate in the Atlanta
area is not used at the depot. It is not in our prevailing wage
schedule.
Why would that be the case when there is nobody else in
that category within the local area there?
Secretary Disney. Well, sir, I do not have all the details
on that, but I would be more than happy to find them out and to
provide information for the record for you.
Mr. Chambliss. All right. If you would, please.
Secretary Disney. Yes, sir.
Mr. Chambliss. Thank you, Mr. Chairman.
Mr. Bateman. Thank you, Mr. Chambliss.
Dr. Disney, I was just handed the conference report on the
National Defense Authorization Act for Fiscal Year 2000 and I
do not want you to bother with it today, but on page 60,
section 343, it says ``Report on use of employees of non-
federal entities to provide services to the Department of
Defense.''
I think I know the answer, but the law calls on the
Secretary of Defense to provide a report and give information.
It has some caveats in it, to the extent practical. I think
your answer is going to be it is not practical, but get us a
formal response to why we do not have the report and why you
cannot, if that is the case, provide the report.
Secretary Disney. Yes, sir. We will do that.
Mr. Bateman. Okay. Well, I believe that is certainly more
than enough time for you all at the witness table today. We do
appreciate your being here and your testimony. If you would be
so kind, we may have further questions that you can submit
answers to for the record; and we adjourn with our thanks to
the witnesses.
[Whereupon, at 3:22 p.m., the subcommittees were
adjourned.]
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A P P E N D I X
March 9, 2000
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PREPARED STATEMENTS SUBMITTED FOR THE RECORD
March 9, 2000
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QUESTIONS AND ANSWERS SUBMITTED FOR THE RECORD
March 9, 2000
=======================================================================
QUESTIONS SUBMITTED BY MR. BATEMAN
Mr. Bateman. In your research, are you finding evidence of a
general shortage of technical workers in the U.S.? Wouldn't it make
sense for the Department of Defense to contract for these workers as
needed, rather than . . . maintaining a large permanent staff?
Mr. Cipolla. There is currently a shortage of technical workers in
many areas and it will get worse. The labor force is expected to grow
by only 11% from 1996 to 2006, at the same time that demand increases
by 19%. According to Watson Wyatt Worldwide, an increased demand for
labor combined with the decline in the number of workers ages 24 to 45
will create a 30% shortfall of workers in this group over the next
decade.
Many of the 20 million new jobs that will be created in the next
five years will be hard to fill due to a shortage of workers with
analytical and technical skills. The federal government will be
affected more than other sectors of the economy since knowledge workers
account for a higher proportion of its workforce. According to the
federal Chief Information Officers Council, from now until 2006, there
will be a need to hire 4,600 workers to fill new IT jobs and 32,315
more to replace workers lost by attrition.
Much of the demand for technical workers in federal agencies can be
met by contracting. However, several important factors must be taken
into account if contracting is to be a viable alternative. First is the
determination whether the work to be done is inherently governmental as
indicated by A-76 and FAIR Act reviews.
If the work is not inherently governmental and it is determined to
seek competitive sourcing, the challenge for agencies is to ensure that
the private contractor selected has the capability required. Private
companies are in the same ``war for talent'' as the federal government
and may have difficulty hiring and retaining the required expertise in
some areas. Companies may have to pay more for scarce talent,
potentially increasing the cost of contracting work requiring high tech
skills.
Finally, decisions about whether to use contractors should be made
on a case by case basis. Key considerations include contractor
expertise, evaluation of the quality of work done previously, and what
process must be used to hire a contractor. There are clear benefits to
be derived from the competitive sourcing process itself such as formal
work statements and performance criteria. However, there are also
intangible factors which should be considered--the effect on morale,
career opportunities, and mission identity for the existing workforce.
Mr. Bateman. Is there an example of a firm or better yet, a
government agency which is adept at workforce shaping? What model
should DOD emulate?
Mr. Cipolla. One of the best examples of successful workforce
shaping is offered by the National Imagery and Mapping Agency (NIMA).
The NIMA, formerly known as the Defense Mapping Agency, has a history
of good workload planning and good strategic planning overall. In the
late 1980's, NIMA's annual customer surveys showed that projected
workloads during the next five years would be increasing. At the same
time, NIMA was in the process of automating the map-making process to
achieve cost savings. Since it couldn't afford to modernize all its
production facilities, NIMA decided to close several of them. Another
consequence of automation was that many of the skills possessed by the
workforce became obsolete.
In response to these developments, NIMA implemented a proactive
workforce shaping program. Employees received extensive retraining in
the technical areas needed to support the new technology. Targeted
buyouts were offered to occupations or groups of jobs that would no
longer be needed. All employees in the facilities to be closed were
offered a similar job in another facility. As a result of adopting
these policies, NIMA was able to keep the number of reductions-in-force
to a minimum.
The NIMA experience illustrates how workforce shaping can be used
to improve an agency's ability to achieve its mission, while treating
employees fairly and protecting their rights.
Mr. Brostek. As we said in our statement before the Subcommittee,
federal agencies--DOD included--can and must define the kind of
workforce they will need in the coming years, develop plans for
creating that workforce, and follow up with actions and investments
needed so that when the future arrives, the right employees--with the
right skills, training, tools, structures, and performance incentives--
will be on hand to meet it.<SUP>1</SUP> We noted that during
downsizing, DOD's approach to civilian force reductions was less
oriented toward shaping the makeup of the workforce than was the
approach it used to manage its military downsizing. We also noted that
during our work on the early phases of DOD downsizing, some DOD
officials voiced concerns about what was perceived to be a lack of
attention to identifying and maintaining a balanced basic level of
skills needed to maintain in-house capabilities as part of the defense
industrial base.<SUP>2</SUP>
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\1\ Human Capital: Strategic Approach Should Guide DOD Civilian
Workforce Management (GAO/T-GGD/NSIAD-120, Mar. 9, 2000).
\2\ Defense Force Management: Expanded Focus in Monitoring Civilian
Force Reductions Is Needed (GAO/T-NSIAD-92-19, Mar. 18, 1992) and
Defense Force Management: Challenges Facing DOD as It Continues to
Downsize Its Civilian Work Force (GAO/NSIAD-93-123, Feb. 12, 1993).
---------------------------------------------------------------------------
Our work has not focused on identifying agencies that could be
construed as models or provide ``best practices'' for workforce
shaping, and so we cannot point to a specific organization that DOD
should emulate. However, our recent report on human capital approaches
at nine leading private-sector organizations underscored the importance
these organizations place on strategic human capital management as
fundamental to strategic business management.<SUP>3</SUP> The ten human
capital principles we drew from these organizations included several
that are relevant to workforce shaping, including the need to identify
the competencies needed to achieve high performance of missions and
goals and to build and sustain the organization's talent pool through
appropriate recruiting, hiring, development, and retention policies.
---------------------------------------------------------------------------
\3\ Human Capital: Key Principles From Nine Private Sector
Organizations (GAO/GGD-00-28, Jan. 31, 2000).
---------------------------------------------------------------------------
Our testimony before the Subcommittee stressed the importance, not
just for DOD, but for all federal departments and agencies, of taking a
strategic approach to human capital management. We currently have work
under way on the extent to which federal agencies have pursued
workforce planning, and can say that while most of the agencies we have
examined recognize the importance of workforce planning, their efforts
are generally fairly recent and vary considerably. Our work at the
Environmental Protection Agency, the Social Security Administration,
and the National Aeronautics and Space Administration reflects some of
the variation we have found among agencies' workforce planning efforts
and some of the concerns we have identified.<SUP>4</SUP>
---------------------------------------------------------------------------
\4\ Human Capital: Observations on EPA's Efforts to Implement a
Workforce Planning Strategy (GAO/T-RCED-00-129, Mar. 23, 2000); SSA
Customer Service: Broad Service Delivery Plan Needed to Address Future
Challenges (GAO/T-HEHS/AIMD-00-75, Feb. 10, 2000); and Space Shuttle:
Human Capital Challenges Require Management Attention (GAO/T-NSIAD-00-
133, Mar. 22, 2000).
---------------------------------------------------------------------------
As we noted in our testimony before the Subcommittee, we have
developed a five-part self-assessment framework we believe can be
useful in assessing and better aligning federal agencies' human capital
management systems with their missions, goals, and other needs and
circumstances.<SUP>5</SUP> As agencies make progress in taking a more
strategic and businesslike approach to their human capital management,
we will be pleased to share with you any agency experiences we
encounter that may serve to inform DOD's human capital efforts and your
oversight of DOD civilian workforce readiness.
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\5\ Human Capital: A Self-Assessment Checklist for Agency Leaders
(GAO/GGD-99-179, Sept. 1999).
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Secretary Disney and Mr. Cooke. To pursue topics of special
interest, we conduct or commission targeted studies, such as RAND
Corporation's rigorous examination of changing occupational
requirements. Preliminary findings from that research indicate that DOD
must cope with the following broad themes in the future:
<bullet> Employees with an enhanced service orientation;
<bullet> Greater emphasis on the need for workers to stay current
with emerging technologies;
<bullet> Increased need for advanced technical skills; and
<bullet> The need for better problem-solving skills among all
workers.
In addition, the Department gathers workforce shaping data from
special forums (as the one on technology leadership) and analytic
projects (such as that on the future acquisition workforce). These are
supplemented by studies conducted by the National Academy for Public
Administration and other research organizations.
In general, our workforce appears well matched with the functions
that must be performed to support military missions around the world.
However, changes in mission and in technology inevitably alter our
requirements for civilian personnel and create spot surpluses in some
occupations at some sites. Looking across all occupations, we are
concerned that the civilian drawdown has left us too few of the younger
workers needed to maintain the vitality of the workforce and to ensure
an orderly transition of leadership as our older workers retire.
Therefore, we appreciate the help received from Congress in providing
tools that allow us to manage and shape our workforce to meet today's
demands without resorting to costly and disruptive reductions in force.
Secretary Snyder. Army has a mechanism in place to examine its
civilian work force requirements to support the total force out to its
farthest planning horizon, currently about 2020. This initiative is
called Civilian Personnel Management System XXI (CPMS XXI). CPMS XXI
begins with an examination of future needs in terms of skills,
experience, type of employee (e.g., permanent, temporary and
contractor) and, where possible, numbers of employees.
A strategic planning process is in place which guides users through
steps beginning with mission and vision, into an environmental scan of
the future world based on assumptions about the future gathered from
other planning documents, eventually reaching a set of actions to move
us to the desired future state. The functional managers of the 22 Army
career programs, which comprise the majority of our workforce in
professional, administrative, and technical occupations, are completing
their first strategic plans. We are going to post the best plans on the
internet to aid others.
Prior to beginning their strategic planning, functional
representatives examined the work force trends for their respective
career programs in order to understand how the programs and policies of
the past have shaped the force. Metrics examined included age, years of
service, gender, race and national origin, education level, grade and
retirement eligibility. We looked at overall strength, accessions and
losses. While the numbers varied considerably by skill, a few trends
were universal. Principal among these was aging--a direct result of the
strategy of accomplishing downsizing through a combination of natural
and assisted attrition and reduced hiring. Aging, however, is only a
symptom. The underlying problem is the growing number of retirement-
eligible employees with limited in-house replacements.
Another issue that surfaced during this process is the degree to
which we must compete for skills with the private sector. In many
cases, government does not provide a competitive salary; in others, the
government wage structure restricts upward mobility in ways the private
sector does not.
Other initiatives affecting the workforce complicate CPMS XXI
analyses. The Quadrennial Defense Review directed further downsizing.
The Defense Reform Initiative Directive 20 (DRID 20) and the Federal
Activities Inventory Reform (FAIR) Act designate functions for review
for possible contracting out. Functional Area Assessments (FAA) have
suggested military positions in the institutional Army that can be
moved to the warfighting Army. While all of these are fine initiatives,
they must be managed carefully to avoid breaking the civilian force in
terms of continuity of capabilities to meet future missions.
Concurrent with these analyses, Army is taking steps to assure the
results are included in the Army's formal planning processes. We are
examining the occupational relationships between the warfighting Army
and the supporting civilian workforce. These correlations resemble the
allocation rules familiar to the analysts who build the warfighting
force.
Secretary Welch. In 1998, the Department of the Navy began looking
across our total workforce to assess future competency and skill
requirements. A Workforce Planning Group was created and career field
sponsors identified who would analyze current capabilities, define
future requirements, and identify plans and strategies for acquiring,
developing, maintaining, and leveraging the Department's future
workforce.
The Workforce Planning Group's efforts have been absorbed into a
more broadly drawn corporate workforce planning initiative. Under the
precepts of the Revolution in Business Affairs, the DON has established
a flag-level group of military and civilian executives who are looking
at baseline data and establishing methodologies to determine the total
force requirements in the DON over the next several years.
Secretary Keener. We have developed workforce policy assessment
models to help us analyze the probable effects of changes in our force
management practices. These projection models allow us to age the
workforce under a variety of assumptions (such as different levels of
grade, experience, and sources of hiring; varied retention rates; or
diverse end strength projections) to see how the long-term shape of the
force will react. Our career field managers use these tools to
determine their desired force renewal and development programs. Our
corporate succession planning efforts sit on a firm analytical
foundation, and we apply these types of analytical tools to all aspects
of human capital needs assessments.
Headquarters, Air Force Materiel Command (AFMC), the largest
employer of civilians in the Air Force, recently concluded a two-year
study to identify the workforce they need to meet their missions in the
future. They are responsible for designing, developing, acquiring, and
maintaining today's (and tomorrow's) weapon systems and platforms.
AFMC's ``2005 Force Shaping Study'' decomposed the Command into
Business Areas, Centers, and Functional Areas and incorporated senior
leadership's direction to identify the workforce skills, skill levels,
and demographics desired and needed to meet their missions. Skills mix
considered developmental, journeyman, and managerial positions and they
also considered alternative component mixes, i.e. organic full-time in-
house, versus contract support, versus contingent employees. This was a
very broad and complex effort, and we expect the results will be used
to optimize of force management policies and programs to best obtain
and sustain a skilled and proficient workforce.
Our workforce assessment shows workforce imbalances characterized
into two areas: experience imbalances and skills imbalances. By
experience imbalances, we refer to the situation we see across the
service today where we have a solid group of mid- and senior-level
employees with a great deal of knowledge and experience, but an
inadequate pool of developmental trainees coming through the pipeline.
Today's trainees are tomorrow's journeymen and managers. Without the
proper mix of experience levels, we anticipate force management
challenges in the future as today's incumbents begin to retire. While
their retirements may give us increasing opportunities to refresh the
workforce, they also mean loss of a great deal of institutional
knowledge. Our best case scenario would be significant intake of
developmental trainees now, while we still retain our experienced
employees who can train and mentor the new folks. This intake would
have to take the form of end strength growth, else we are faced with
the dilemma where we have a group of new hires with no one around to
mentor them.
We also project skills imbalances--i.e., if we were to remove our
hands from the force management controls, we would expect to have ``too
many'' of one specialty and not enough of another. This situation will
be addressed through restructuring, targeted hiring, and some re-
skilling. This is one area where a voluntary force shaping incentive
program, without linkage to end strength reductions and RIF, would
help. The significant negative aspects of RIF-driven organizational
restructuring would thereby be avoided, and allow us to develop a
smoother transition to skills rebalancing. Authority to offer degree-
granting educational opportunities to our civilian workforce would also
help us meet our strategic vision of the future workforce.
Mr. Bateman. What specific plans does DOD have in place or are
expected to be put into place to mitigate the imbalances? What
challenges and obstacles do you face in being able to deal with the
aging workforce issue and any related workforce imbalances?
Secretary Disney and Mr. Cooke. DOD has a number of strategies to
mitigate current and anticipated workforce imbalances. The first is the
reshaping of the workforce to ensure that we have the right skills
match and more balanced age cohorts. The current Voluntary Early
Retirement Authority (VERA) and Voluntary Separation Incentive Payment
(VSIP) enable us to offer these incentives to persons in positions that
are no longer needed at specific locations, as well as to those
eligible for retirement but needing encouragement to leave so that we
can retain newly hired employees. However, the current authority may be
used only in conjunction with reduction in force. Legislative relief
could permit us to target those areas where we have skills that are
surplus or no longer needed. Offering VERA/VSIP to those employees
would permit us to use the resulting attrition to hire individuals with
the needed skills.
We are encouraging the Defense Components to renew the workforce by
hiring interns to bring new capabilities and skills. With the added
emphasis on interns, we hope to reverse the trend that has resulted in
a 76 percent decrease since 1989 in DOD employees who are under 31
years of age. Simultaneously we want to provide more comprehensive
career paths so those talented individuals remain in the workforce. In
addition, we have developed the Defense Leadership and Management
Program (DLAMP) to enhance our current civilian workforce and help
ensure that we have the right people with the right skills in our
demanding jobs.
Among the challenges we face in our efforts to renew the workforce
are the difficulty of attracting top talent due to negative perceptions
of government employment; a robust private job market that is actively
recruiting; competition from other Federal Agencies with more flexible
compensation plans; and the severe, continuing downsizing, which has
drained the capability of many organizations to absorb untrained people
and still perform their mission.
Secretary Snyder. Under CPMS XXI, Army is continually reviewing
programs and policies to balance the force. We recognize that differing
parts of the force (in terms of mission role and occupational
groupings) can be expected to behave in different ways over Army's
planning horizon. Our intention is to identify a Civilian Objective
Force (COF) that gives us enough information as to grade, skill, and
geographic location to recruit and sustain the most effective
workforce. As I stated in my previous answer, the analyses necessary to
identify the COF are complicated by other on-going initiatives that
will affect future Army civilian workforce requirements.
Secretary Welch. The DON is pursuing a variety of approaches to
reinvigorate our recruitment and development programs with the goal of
replenishing the supply of employees in the pipeline. We are
establishing a coordinated recruitment program through which we will
train and support a cadre of recruiters who will represent the
Department at job and career fairs and conduct college recruitment at
campuses across the country.
Beyond this identification of a need to rebuild the entry and mid-
level workforce, it would be premature for the DON to develop specific
strategies to deal with and respond to specific workforce imbalances
while our review of the workforce is incomplete. In general, we view
the aging of our workforce to be reflective of the age distribution in
the population as a whole, and therefore to be expected in the
workplace.
Secretary Keener. The Air Force has an approved workforce shaping
strategy. The three key elements include force renewal, force
development (education and training), and separation management. New
accession strategies, such as greater investment in interns and other
developmental trainees, will provide stability to our long-term
sustainment efforts. A collaborative process is underway to determine
the proper size of our force renewal programs. Also, changing local
hiring practices will accelerate workforce re-balancing. Skills
currency, particularly in our highly technical occupations, demands
attention. Skills proficiency is being emphasized through professional
continuing education, training, and retraining programs. Leadership
development programs will ensure a cadre of senior executives with the
breath of experience and Air Force culture needed to achieve corporate
goals.
The Air Force civilian workforce is out of balance due to the way
we reduced our civilian workforce. Reductions in the civilian workforce
were achieved through a combination of loss programs and constrained
accessions. Loss programs included early retirements (Voluntary Early
Retirement Authority or VERA) and incentives (Voluntary Separation
Incentive Program or VSIP) to trim the more senior year groups and to
minimize involuntary actions (Reduction In Force or RIF) which are so
devastating to our force, both organizationally and individually.
We limited the number of new hires, or constrained accessions, as
the overall force has reduced over the last ten years. This has led to
problems in sustaining the force of tomorrow. We will not have enough
mid-level managers and administrators in the future from which to
select tomorrow's Senior Executives.
[GRAPHIC] [TIFF OMITTED] T4887.258
This chart shows a future problem in sustaining the civilian force
and a serious future gap in Air Force civilian leadership. The chart
compares the 1989 baseline population (dotted area in the background)
with our objective profiles for FY05 (the solid line). The retirement
status is depicted in the stovepipes. When considering the drawdown we
currently have planned in the Future Years Defense Program (FYDP), we
show a deficit of employees in the lower years of service (YOS), what
we refer to as a ``bathtub.'' There is also a surplus in the more
senior groups, our long-term sustainment requirements.
The mid-career population with 8 to 24 YOS is well above the line.
While most are not eligible for any retirement, those that are
(approximately 30%) may be induced to accept an ``early'' retirement
(VERA) with an incentive payment (VSIP) payment of up to $25,000. Any
losses generated from this group would be used not to reduce the end
strength, but will be redistributed to the more junior workforce, one
with lower average YOS and pay steps. Additionally, we plan to provide
professional continuing education to get and keep the workforce current
and proficient in whatever skill set needed to perform their
occupation.
Mr. Bateman. Your legislative proposals include at least three
authorities to hire scientific and engineering personnel and three
authorities to provide college degree training. To what degree are
these proposals integrated into your overall plan for staffing future
DOD organizations?
Secretary Disney and Mr. Cooke. Many of the positions DOD requires
in the science and engineering fields are also required by the private
sector. Given the greater compensation and benefits flexibility outside
the Federal Government, this competition creates special problems, as
DOD is committed to revitalizing its laboratory and acquisition
communities. Further, in DOD as a whole, advanced technology, contract
oversight, and a more complex mission have generated the need for more
advanced education and technical skills.
Our ability to compete with private industry benefit packages would
be enhanced if DOD could more broadly offer academic degree training to
our current and future workforce. Most high-technology firms consider
education to be a business-essential benefit. We need to level the
playing field, as well as to support continuous learning programs.
Because higher-level DOD positions are filled overwhelmingly by
people who have spent some time within the Department, it is essential
that DOD invest in its civilian cadre. Also, the Defense Science
Board's Task Force on Human Resource Strategy has recommended that DOD
expand efforts to recruit and develop interns on specific occupational
tracks and at higher levels (Presidential Management Interns). In
addition, the Defense Science Board recommended creation of an early
leader development program, which we are pursuing. In brief, then the
proposals mentioned in the question are vital to meeting our future
staffing needs.
Secretary Snyder. We believe that legislative proposals that would
change aspects of our civilian personnel system ought to be the product
of a fully coordinated and integrated approach.
Secretary Welch. The legislative proposals for recruiting and
hiring scientific and engineering personnel and the degree training
initiative are integral to the DON's future staffing plans. We are
building the groundwork of a recruiting program which will rely heavily
on increased appointment and rating/ranking flexibilities.
Secretary Keener. The legislative proposals to hire scientific and
engineering personnel would provide the flexibility to continually
refresh the technical skills of the research and development workforce.
In the ideal, the research and development function would be comprised
of a core of civil servants to provide continuity coupled with
collaborators--consisting of military officers, temporary and term
government employees, academia, and industry--for agility and fresh
ideas. We need to be able to tap private companies and academia for
eminent scientists and engineers and be competitive in pay and
benefits. Collaborators from academia and the private sector would work
projects for up to six years. Legislation similar to the Defense
Research Projects Agency (DARPA) authority (FY99 National Defense
Authorization Act, Section 1101) and the proposed Commercial Personnel
Transfer Program (DOD 106-014) would enable the Air Force to achieve
this staffing model.
With regard to college degree training, under current law, agencies
must prove that an occupation is in shortage as a result of recruitment
or retention problems before degrees can be funded. This law severely
limits our ability to offer professional development to employees who
demonstrate the potential for future advancement. By linking the
investment in education to a deliberate program of employee
development, we can better shape our staffing needs for the future.
Mr. Bateman. To a large degree, agencies chafe under civil service
procedures that are designed to enforce hiring on the basis of merit.
All to often, those procedures take time. In your experience do you
lose employees to the private sector because of this delay? What skills
are those you are most likely to lose?
Secretary Disney and Mr. Cooke. We do not have data on how many
people we lose due to the lengthy hiring process, nor do we have data
available on the number and types of people who decline job offers.
However, in some cases where timely offers are critical (recent college
graduates, unemployed personnel, shortage occupations), we know that we
lose applicants to faster bidders. Feedback from managers in this issue
is strongly supported by a recent report published by the Merit Systems
Protection Board.
Secretary Snyder. It is true that many applicants become
discouraged or lose interest when faced with the federal hiring
process. This is particularly true of applicants for entry level
positions--typically recent college graduates who are pursuing a
variety of career options. For example, a vacancy announcement
soliciting applicants for an entry level career intern position may be
open for 30 days. The most aggressive and highest quality candidates
are actively ``surfing the web'' for employment opportunities and
usually apply within a few days of the opening date of the
announcement. By the time the announcement closes and applicants are
rated and referred for consideration, the early applicants already may
have accepted job offers from other employers.
The skills that we are most likely to lose because of procedural
delays are those skills most in demand in the private sector--
information technology, engineering, scientific, and medical. It is
precisely because applicants with these skills are in such demand that
their loss due to procedural delays causes us so much damage. We
believe the Federal Government needs a modernized, streamlined hiring
system that enables us to compete with private industry for the best
candidates while maintaining merit principles.
Secretary Welch. The DON fully supports adherence to merit
principles and has not found the broad concept of merit to be an
unnecessary or dominant constraint to hiring. And while we have no
specific data on whether or how many potential hires we lose to the
private sector, we continue to receive reports from our field
activities and commands that the inability to make immediate job offers
and the lack of competitive starting salaries causes us to lose a
number of our first-choice candidates to the private sector. For this
reason we strongly support DOD legislative and regulatory initiatives
aimed at improving the hiring process to alleviate some of the more
protracted procedures currently being used.
Secretary Keener Hiring in the Federal Government on the basis of
merit is a statutory requirement under civil service law (5 U.S.C.
2301(b)). It is hard to find fault with principles that require the
selection of employees on the basis of merit after fair and open
competition and the equitable treatment of applicants without
discrimination. However, it is true that the civil service regulatory
procedures that implement these principles can complicate and lengthen
the hiring process. Good candidates, especially in the scientific and
technical fields, can be lost to the private sector because of their
ability to respond more quickly.
Due to the extremely tight labor market, we expect to continue
experiencing recruiting difficulties for scientific and technical
personnel (e.g., scientists, engineers, information technology, and
acquisition). Private-sector high technology firms can make a promising
graduate an offer and even a counteroffer on the same day. Due to the
Federal public notice; requirements, rating and ranking procedures, and
application of veterans' preference, it is difficult for DOD recruiters
to be as responsive. As a fix, DOD continues to work with the Office of
Personnel Management and other Federal agencies to seek ways to
simplify the processes that will allow us to become more competitive
with the private sector. The Office of Personnel Management delegation
of examining authority to the executive agencies has streamlined the
hiring process and improved our ability to quickly respond to
applicants. Additionally, the DOD demonstration projects have a number
of streamlining procedures, to include category ranking and scholastic
achievement appointments, which are being tested for possible future
government-wide adoption. We are also optimistic that the recently
proposed Executive Order for the Federal Career Intern Program will
increase our ability to compete with private industry for recent
college graduates. We will continue to push for legislative change, as
appropriate, to further streamline the Federal hiring process but still
comply with merit systems principles and veterans' preference law.
Mr. Bateman. Isn't there some danger in tossing out merit
principles and allowing managers relatively unfettered authority to
hire? Couldn't we be accused of allowing managers to bypass well-
established merit principles? In your experience, does new flexibility
lead to some tension with merit principles?
Secretary Disney and Mr. Cooke. DOD strongly supports the merit
principles. Our effort to streamline the hiring process in no way
represents a degradation of merit system principles. Instead, our
initiatives reflect the new hiring patterns emerging in a vastly
different job market and society. Selection should reflect
consideration of merit principles, resulting in hiring the best person
for any given position and reflecting the diversity inherent in
American society. What we are proposing is a re-evaluation of the
policies, procedures, and processes that surround the implementation of
the merit principles.
Our belief is that the complexity of Federal processes and
procedures often complicates the selection of the best and brightest.
We believe we can support and maintain merit principles, while making
hiring less cumbersome and time consuming.
Secretary Snyder. The Army strongly supports the merit system
principles set forth in title 5, United States Code, Chapter 23 and we
propose no changes to them. We are, however, concerned about some
strictures of law that often prevent us from hiring the best available
candidates. The ``rule of three'' limits selecting officials' choices
to the top three candidates on a certificate of eligibles when we use
examining procedures that allow us to accept applications from outside
the workforce. In its August 1999 report ``The Role of Delegated
Examining Units: Hiring New Employees in a Decentralized Civil
Service,'' the Merit Systems Protection Board--MSPB--recommended that
the rule of three be modified to allow managers to consider a greater
number of qualified candidates. We strongly support the MSPB
recommendation and believe that its implementation would strengthen,
rather than weaken, the merit principles.
The Army doesn't believe it is necessary to jettison merit
principles in order to modernize and streamline hiring processes. We
need to take a fresh look at what we really mean by ``merit.''
Selections based on real merit do not result from, and cannot be
equated to, adherence to all the bureaucratic procedures we must comply
with under today's ``merit system.'' It's time to throw away the old
system, one that has become an impediment to accomplishing the agency's
mission, and replace it with a mechanism that allows agencies to
compete effectively with the private sector for the best and brightest
candidates.
The Army has pursued a number of civil service reform initiatives
in prior years to simplify and streamline hiring processes. Our most
recent initiative involves decreasing the number of appointment
authorities and allowing non-competitive conversion of temporary and
term employees to permanent status, reassignment of qualified employees
from excepted to competitive service without competition, and similar
actions. I forwarded this initiative to OSD in August 1999 with a
recommendation that we continue to pursue broad legislative reform of
appointment authorities. Again, we believe that these reforms will not
weaken existing merit principles.
Secretary Welch. The DON sees no conflict or tension in allowing
agency managers to exercise judgment and to apply flexibilities aimed
at making the hiring process more responsive. The DON Human Resources
Management community ensures that managers are aware of the merit
principles and their obligation to observe these principles in the
hiring and promotion processes. The goal of a merit-based system is to
ensure that the best-qualified candidates are hired and promoted. The
goal of the proposed flexibilities is to ensure that the best-qualified
candidates are hired and promoted more efficiently.
Secretary Keener. We believe merit systems principles are
fundamental to Federal employment. As Federal employers, we must
provide our country's citizens an employment system that provides fair
and open competition and equitable treatment without discrimination.
However, in a tight labor market, it is true these requirements can
impact our ability to effectively compete with private industry,
especially for scientific and technical personnel. We believe there are
means available in the current system to shorten the employment
pipeline in order to make us more competitive. Demonstration project
procedures are being tested to further streamline the hiring process
and still satisfy merit systems principles. As long as the minimum
public notice requirements are met, best-qualified candidates are
identified, and veterans' preference applied, the basic merit systems
principles are satisfied. We have not advocated any new flexibility
that would eliminate these basic requirements. Consequently, we are not
aware of any proposed flexibility that will create tension with the
basic merit principles.
Mr. Bateman. The Merit Systems Protection Board recently reported
(Competing for Federal Jobs: Job Search Experiences of New Hires, Feb.
2000) that the average age of new hires government wide was about 35 in
1998. MSPB said this average age held steady across most occupational
categories. Is this similar to the average age of new hires in DOD? If
so, please explain why the average age is 35. Also, do you see mid-
thirties as a desirable age for employees?
Secretary Disney and Mr. Cooke. Across DOD in FY 1999, the average
age of new employees hired with permanent appointments was 36.5 years,
somewhat less than in FY 1998 but more than the 34.2 year average in FY
1989. The hiring of former military members, who often have unique
skills and experience, accounts in part for the average age of DOD's
new permanent employees being in the mid-30's. Ultimately, it is the
nature of the jobs to be filled that determines the educational and
experience requirements, and in some instances these can be correlated
with age. However, DOD does not regard any age as automatically
appropriate for all jobs. The paramount consideration is matching
education, experience, and talent with requirements.
Secretary Snyder. To preclude any misunderstanding, let me make it
clear that we don't see quality as a function of age. The important
thing is to hire talented people, regardless of how old they are. The
average age of accessions into the Army in FY99 was 33, somewhat lower
than the average 35 years of age reported Federal-wide by MSPB. In many
instances we find that the Army is not the employer of choice, given
our limited incentives to attract younger applicants. Private industry
typically offers higher salaries and extended benefits packages for
entry level jobs in occupations that are highly competitive in the
labor market. In some fields within Army, the nature of the work is
changing with the move toward contracting out government functions to
private industry. The jobs remaining in the government are becoming
more concerned with contractor oversight, requiring more advanced
qualifications and extended experience not found with younger
applicants. In this instance, the contractors are more inclined to hire
younger, entry level employees in many of the contracted out jobs while
the Army hires more experienced employees to oversee the contract. We
plan to continue our efforts to develop attractive entry level
employment packages to entice younger applicants, but must also balance
that with the need for more experienced employees.
Secretary Welch. The current average age of new hires in the DON is
32. In 1989, the average age was 29. We have no specific information to
explain the increase, but believe it could be a normal result of the
outsourcing and downsizing of the entry and developmental level work
over the past 10 years and the resulting increase in the grade level of
the residual work force. Higher level work results in higher grades,
requiring a higher level of experience usually gained by an older
workforce. We have not determined whether mid-thirties is a desirable
average entry age for employees.
Secretary Keener. Within the Air Force, the average age for new
accessions in FY99 for administrative and professional jobs at all
grade levels was 40 and 38, respectively. The average age for other
employment categories was slightly lower. We have seen a slight aging
trend in all employment categories over the past ten years. During
FY99, the average age for new accessions at the GS-07 and 09 levels was
35 and 41, respectively. Ten years ago the average age for new
accessions at the GS-07 and 09 levels was 31 and 38, respectively. The
average age for our newly hired centrally managed interns at the GS-07
level for FY99 was 32.
There are a number of regulatory and statutory factors that affect
the average age of new accessions. These include statutory veterans'
preference and the regulatory priority placement programs that provide
employment priority for employees being adversely affected by
reduction-in-force. Further, as an open employment system, we have the
capability to hire employees at any grade level, from trainee to full-
performance. During the past ten years, we have seen a shift toward a
more senior force that is directly related to hiring more experienced
resources to make up for large reductions in overall size of the
workforce. Our workforce is out of balance and we have initiated
corrective action. As part of our civilian workforce sustainment
efforts, we are establishing and funding more centrally managed interns
and also are encouraging supervisors to restructure positions to allow
for a steady intake of developmental trainees with new ideas and state-
of-the-art skills. We do not view any particular average age (e.g., 35)
as being desirable. Primarily, we are striving for a more balanced
workforce that includes employees at both the trainee and full-
performance levels.
Mr. Bateman. What proportion of job offers in DOD go to recent
college graduates vice older workers being selected off of priority
placement program lists, or the hiring of retired military personnel?
Stated another way, is the hiring that is taking place today
contributing to or helping to alleviate the aging workforce issue?
Secretary Disney and Mr. Cooke. In FY 1999, DOD hired 23,000 new
employees on permanent appointments. By contrast, about 4,000 existing
employees were matched with vacancies through the Priority Placement
Program (PPP). We anticipate that the ratio of outside hires to
internal PPP placements will increase in the future due to two factors:
(1) Our budget calls for a slowing of the drawdown in the coming years,
thus allowing us to hire more new workers; (2) The imminent completion
of the last Base Realignment and Closure round should decrease the
number of displaced workers needing help through the PPP.
Since our new hires are, on average, about nine years younger than
those already in our employ, the recruiting we have been able to do has
prevented workforce aging from progressing more than it has. About one-
third of our permanent civilian accessions in FY 1999 were 30 years of
age or younger. By comparison, about one in eight was a military
retiree.
Secretary Snyder. The Department of the Army does not maintain data
on job offers made to applicants and, therefore, I cannot say how many
offers today are being made to recent college graduates, older workers
on priority placement lists, or to military retirees. The data
maintained on civilian accessions show that current Army hiring is not
contributing to the aging workforce issue. In 1996 and 1999, for
example, approximately 50 percent of new hires were below the age of
35.
If one looks at hiring data for the 1980s, one finds that the
percentage of new hires below the age of 35 was higher than it is now.
For example, the percentage of new hires under 35 was approximately 66
percent in 1985 and 64 percent in 1987. The decrease in proportion of
new hires under 35 over the last decade or so can be attributed to two
facts; that the population as a whole is aging and that a shift in the
composition of the Army civilian workforce has sharply reduced the
number and proportion of clerical and lower level administrative
support jobs, which are typically occupied by employees with a lower
average age than other occupational categories.
As I stated in my previous answer, the Army does not believe the
quality of employee performance is a function of age. The aging of the
workforce is of concern to us only in terms of whether an adequate
number of well qualified individuals will be available to succeed the
large numbers of employees whom we expect to retire in the near future.
Secretary Welch. We have not made a comparison of hiring data
against the date of college degrees, so a determination of the
proportion of these hires is not possible at this time. However, the
data show that approximately 26% of our new hires have at least a 4-
year degree and that the average grade at which they are hired is 9.9
versus 7.9 in 1989.
Secretary Keener. According to Air Force statistics, approximately
21% of our new accessions do not have prior Federal civilian or
military experience. We do not have data that reflects what percentage
of these new hires are recent college graduates. Fifteen percent of our
new accessions were employees placed from other DOD components through
the DOD Priority Placement Program and 19% were retired military.
Consequently, based on regulatory and statutory factors, as well as
management decisions to select employees at the full-performance level,
we now have a workforce that is out of balance. However, we are taking
the appropriate action to hire a larger percentage of new employees at
the developmental level, including recent college graduates with the
needed state-of-the-art skills.
Mr. Bateman. Are there certain occupational specialties or areas
where the aging workforce issue is a greater factor than in others? If
so, what are they, and what are your plans to deal with the issue?
Secretary Disney and Mr. Cooke. Having a regular inflow of new
college graduates is most obviously crucial in our science and
engineering and information technology occupations where the body of
knowledge is changing most rapidly. As stated earlier, DOD needs to be
competitive with private industry benefit packages to include advanced
academic degree training as well as expanding use of recruitment and
retention bonuses.
Secretary Snyder. Yes, we are more concerned about the aging
workforce in occupational specialties in which the average age is above
that for most of our other occupations and there are few or no external
sources of well qualified employees. Our two career programs for
ammunition management and many of the members of our training career
program are examples, although the number of employees needed for the
ammunition management function is not large. Due to the nature of
ammunition management work, the Army has ``grown'' the individuals with
the necessary knowledge and experience through an internal, intensively
managed career development process. As we believe that performance of
the ammunition management function is likely to remain mostly in-house,
we need to develop in-house replacements for those whom we expect to
retire soon. Similarly, because many of the employees in our training
career program need qualifications similar to the branch qualification
required of Army officers to perform their jobs effectively, we plan to
continue ``growing'' replacements in-house.
Secretary Welch. As stated in both written and oral statements
before the Readiness Subcommittee and the Civil Service Subcommittee,
the DON is particularly concerned about the data on aging as it applies
to the core work of the Department. In the next five years, 47 percent
of our engineers, 55 percent of our scientists, 70 percent of our
computer specialists, and 64 percent of our contract specialists will
be eligible for retirement. These data are exacerbated by the data on
hiring over the past few years with the resulting impact on the
availability of employees in the replacement pipeline in these career
fields. In response to these data, the DON has initiated a renewed
recruitment program, which will provide training, materials, and
coordination focused on both college-level and career/job fair
recruiting opportunities.
Secretary Keener. While nearly all career fields are showing
similar aging trends, we are particularly concerned with those
specialties where skills currency is of critical importance. For
example, our engineering, information technology, and acquisition
occupations are susceptible to skills obsolescence due to rapidly
changing technology.
We have initiated legislative proposals to expand the use of early
retirement authority and buyouts to include force shaping.
Additionally, we have implemented the force shaping strategy and
conducted a Civilian Workforce Shaping Summit to develop additional
legislative and policy proposals. Our objective is to achieve a
sustainable/competitive career civilian workforce, with the right
balance of skills and experience to contribute to Air Force mission
accomplishment now and in the future.
Mr. Bateman. With the emphasis on outsourcing in DOD, to what
extent have DOD components made an effort to identify a minimum level
of DOD civilian employees needed to perform inherently governmental
functions and ensure adequate institutional knowledge is retained in-
house to provide appropriate monitoring of contract awards.
Secretary Disney and Mr. Cooke. As part of its competitive sourcing
program, the Department conducts an annual review of its manpower to
determine which military and civilian positions within the Department
are inherently governmental, subject to competition under OMB Circular
A-76, and exempt from competition. When identifying inherently
governmental work, DOD Components assess what manpower is necessary to
ensure that DOD decision-making officials maintain sufficient
oversight, control, and accountability over government programs and
operations. This includes manpower that is needed to protect public
interests by ensuring that decision-makers play an active, informed
role when awarding, administering, and terminating contracts, ordering
changes in contract performance or contract quantities, taking action
based on evaluations of contract performance, and accepting or
rejecting contractor products or services.
Secretary Snyder. Within the Department of the Army, the issue of
identifying inherently Governmental functions has been viewed as a
functional determination that is largely a separate issue from that of
identifying the minimum level of civilian employees needed within a
function. Accordingly, the decisions as to what functions are or are
not inherently Governmental have been framed more with a view to the
nature of the function itself--is this a function that can be performed
in the private sector rather than focusing on the current way
contractor oversight duties are delegated within the function. On the
other hand, the very different question of identifying the minimum
level of civilian employees needed for adequate monitoring of contracts
within the Department is a policy matter still under review and is very
much constrained and affected by how the Department is currently
organized to perform any given function. Using this standard, about 95
percent of the functions performed by civilian employees within the
Department of the Army have been determined to be not inherently
Governmental, and about half of these non-inherently Governmental
functions have been exempted from private sector performance to retain
core capabilities on National Security or other grounds (such as
maintaining adequate oversight of contracts). The Army recently
adjudicated 127 challenges to the Federal Activities Inventory Reform
Act list of non-inherently Governmental functions and made the
rationale for its decisions public at the following web site: http://
www.asamra.army.pentagon.mil/fair.
Secretary Welch. The DON has not completed its study and analysis
of future workforce requirements.
Secretary Keener. All functional activities within DOD have
conducted intense position-by-position reviews utilizing guidance
issued under Defense Reform Initiative Directive (DRID) #20, Review of
Inherently Governmental Functions. This review directed the components
to determine which functions and positions are inherently governmental;
commercial activities exempt from OMB Circular A-76 competition; and
commercial activities that should be competed. The review was completed
in Oct. 98 and resulted in the coding of all positions in the Air
Force.
The Air Force will continue to annually review its entire manpower
inventory in an effort to properly identify inherently governmental
functions and commercial activities. This annual review will ensure an
iterative approach to capture any changes based on today's dynamic
environment. Regarding retention of in-house capabilities to properly
monitor awarded contracts, functional area staff and managers are
retained to ensure compliance with the terms of the contract.
In addition, the Air Force has developed a Strategic Sourcing
gameplan as an option for use in conjunction with A-76 studies.
Strategic Sourcing is a program that allows for a variety of options to
achieve downsizing goals. While A-76 remains the foundation, such
approaches as reengineering, adoption of best business practices,
privatization, and divestitures may also be considered. While it
appears most savings can be achieved through the competitive sourcing
process, this initiative expands our options.
Mr. Bateman. Among the tools available to agencies that face
recruitment and retention challenges are recruitment bonuses and
retention allowances. Despite the media articles indicating that
agencies are having difficulty attracting and retaining employee, we
understand that agencies very seldom use either of these tools. How
extensively does DOD use these tools? If they are seldom used, please
explain why. Also, if they are seldom used, do you believe that
agencies should use them before seeking any additional tools from the
congress to address recruitment and retention issues?
Secretary Disney and Mr. Cooke. As the table below indicated, the
Department of Defense has increased its use of recruitment bonuses,
relocation bonuses, and retention allowances. From Fiscal Year (FY)
1994 through FY 1999, the number of recruitment bonuses, relocation
bonuses, and retention allowances increased 411 percent, 139 percent,
and 463 percent, respectively. For the same period, the total value of
these bonuses and allowances increased 201 percent, 166 percent, and
426 percent, respectively, though the average amounts did decline for
recruitment bonuses and retention allowances.
BONUSES AND ALLOWANCES PAID TO DOD CIVILIAN EMPLOYEES FY 1994 THROUGH FY 1999
--------------------------------------------------------------------------------------------------------------------------------------------------------
Recruitment Bonuses Relocation Bonuses Retention Allowances
-----------------------------------------------------------------------------------------------------------------------
Number Avg. Amount Number Avg. Amount Number Avg. Amount
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY 1994......................... 114............... $10,477........... 52.............. $10,107........... 385............. $8,904
FY 1995......................... 89.............. 9,862.......... 35.............. 7,712.......... 486............. 9,276
FY 1996......................... 96.............. 10,373........... 67.............. 10,216........... 675............. 9,812
FY 1997......................... 137............... 7,132.......... 73.............. 11,159........... 957............. 9,570
FY 1998......................... 177............... 7,800.......... 72.............. 9,416.......... 1180.............. 9,069
FY 1999......................... 582............... 6,172.......... 124............... 11,256........... 2168.............. 8,315
--------------------------------------------------------------------------------------------------------------------------------------------------------
There has been a significant increase in the number and value of
these incentives since the General Accounting Office reviewed retention
allowances in December 1995. The Department is making effective use of
these tools in appropriate situations, and supports legislative changes
that would increase agency flexibility in this area. It is important to
note that because these bonuses and allowances are not increases to
basic pay, they provide an effective solution only when an increase to
basic pay is not warranted.
Secretary Snyder. The Department of Army's database indicates the
use of recruitment bonuses is on the rise. During FY 1998 only 94
recruitment bonuses were authorized; however, there were 227
recruitment bonuses authorized for FY 1999.
Our prior limited use of recruitment bonuses is not really
surprising. Given that the Department of Defense was still undergoing
downsizing in FY98, extensive use of recruitment bonuses would have
been unexpected. Now, with downsizing leveling off, the use of
recruitment bonuses appears to be on the rise.
Several activities have indicated that, although they authorized 25
percent recruitment bonuses for specific positions, the candidates did
not accept the positions. We find it regrettable that we sometimes
cannot compete with private industry--even when offering bonuses. We
are aware that OPM is developing a proposal to amend title 5, United
States Code, to make certain pay flexibilities easier to use and more
helpful in recruiting and retaining employees. One of the flexibilities
in its proposal would allow larger recruitment bonuses based on the
length of the new employees' service commitment. The Department of Army
strongly endorses this proposal, as it will better enable us to compete
with private industry.
Currently activities interested in providing recruitment bonuses to
eligible applicants have to pay the bonuses in lump sums. This is
costly for the activity as the bonuses can be up to 25 percent of
employees' salary. To provide greater flexibility on payments of
recruitment bonuses, OPM has proposed a change to its regulations to
allow recruitment bonuses to be paid by various methods--as an initial
lump sum, in installments, as a final lump sum upon the completion of
the full service period, or in a combination of the above payments.
This proposal will offer relief as the costs can be spread across
fiscal years. In addition, the proposal will allow greater flexibility
in structuring payments that offer the employee greater incentive to
complete the full service stipulated in the agreement.
With regard to retention allowances, their usage remains low within
the Department of the Army, with about 250 authorized for FY 1999. One
reason for low usage may be criteria limiting eligibility. Although
Army received several inquiries regarding retention allowance
eligibility, it was determined the employees did not meet the DOD
requirements. Another concern is some of our activities are competing
with other Federal agencies for experienced personnel, such as in the
case of Army Air Traffic Controllers at Fort Rucker, Alabama being
hired by the Federal Aviation Administration (FAA). The FAA is no
longer paid under title 5 which has increased their salaries
approximately 10 to 15 percent above General Schedule rates. OPM is
proposing a change that would allow agencies to pay a retention bonus
to an employee who is likely to leave his or her job for another
Federal position. This change would greatly enhance Army's ability to
retain critical employees.
The Department of Army heartily endorses OPM's proposals regarding
the pay flexibilities for recruitment and retention of employees. If
these proposals are enacted, we should see more usage of these bonuses
and allowances. These changes would expand agency flexibility to offer
the bonuses and could forestall the need for a request to Congress for
additional tools to address recruitment and retention issues.
Secretary Welch. The DON fully supports the use of recruitment
bonuses and retention and relocation allowances as tools to meet
current and future staffing needs. We recognize, however, that these
authorities are not being fully utilized across the Department.
During FY99, DON commands and activities paid 292 recruitment
bonuses (total accessions 12,324), 57 relocation bonuses, and 262
retention bonuses (total separations 18,994). we are currently working
with our commands and activities to determine why the usage data are so
low, and to identify ways in which these and other incentives and
flexibilities can be more completely integrated into the staffing
process. Funding is almost certainly an issue.
Secretary Keener. Although these authorities have been used
conservatively since their creation in the Federal Employees Pay
Comparability Act of 1990, the Air Force has increasingly used these
tools over the last few years, as has the rest of the Federal
Government. In FY99, a group retention allowance of 10% was approved by
the DOD for Air Force reserve pilots, and was being paid to nearly 600
pilots during that fiscal year. Additionally, they have also been paid
in the first half of FY00 to critically skilled employees in certain
locations, such as computer specialists. In all, for the first two
quarters of FY00, 142 retention allowances (new in FY00), 54
recruitment bonuses, and 12 relocation bonuses have been paid.
The most frequently heard reason for the bonuses' seldom use is
their cost. Payment of a lump-sum bonus does incur a substantial up-
front cost, as opposed to other compensation-related tools such as
special salary rates, which are paid out over time as part of an
individual's basic salary. The cost of bonuses adds a potential burden
to already overstretched budgets since they are not separately funded,
but must be taken out of available operating budgets. If these bonuses
are used, they must compete with civilian pay requirements and other
essential programs for funding.
Agencies should be authorized to use the recruitment and retention
tools that they consider most effective in targeting individuals or
groups, and should not be required to use the bonuses before seeking
other tools from the Congress. For example, since the bonuses are not
credited in computing other benefits such as retirement annuities, they
may not be an attractive incentive to work for the Federal Government
for some experienced, highly skilled candidates. For this reason, we
believe that a variety of tools should be made available to federal
managers for recruitment and retention purposes.
Mr. Bateman. Civilian employees are often deployed with the
military forces today. Do you have the tools you need to manage a
deployed civilian workforce?
Secretary Disney and Mr. Cooke. We have a number of special
provisions that apply to our deployed civilians. Examples of
legislative and policy initiatives that have been effected on behalf of
these employees include the following:
<bullet> Leave restoration: Under recent legislation, there is now
automatic restoration of excess annual leave for employees who are
unable to schedule or use leave while in a combat zone.
<bullet> Special Danger Pay Allowance: At DOD's request, the
Department of State (DOS) has authorized Federal civilian employees
accompanying US military forces the same flat rate ($150 per month) as
military personnel receive when they are authorized imminent danger
pay. This flat rate only applies in areas where danger pay is not
authorized elsewhere by DOS regulation.
<bullet> Medical Support: Under DOD policy, deployed civilians are
authorized the same medical treatment as their military counterparts in
the theater of operations.
<bullet> Casualty Assistance: Casualty assistance is provided to
family members of civilians who become casualties during operational
missions.
<bullet> Mail: When free mail is authorized for military, civilians
are also entitled to free mail while in the theater of operation.
<bullet> Recognition: We recently presented the first Armed Forces
Civilian Service Medals to civilians deployed in Bosnia and Hungary.
During Operation DESERT SHELD/STORM, fewer than 3 percent of our
deployed forces were civilians. Today, 7 percent to 13 percent of our
forces deployed worldwide are civilians. Further, the increased
reliance on civilians in support of military operations will continue
in the downsizing environment. Therefore, we will continue to seek ways
of addressing the unique needs of our deployed civilian personnel. To
that end, we have created a Department-wide Working Group expressly to
identify the needs of deployed civilians and propose necessary policy
and legislative changes.
Secretary Snyder. Generally speaking, we do have the tools to
manage a deployed civilian workforce. However, as a result of Operation
Desert Storm, Army commands expressed the need to provide certain
benefits for deployed civilians, not only to assure fair treatment but
also to provide added incentives for civilians to volunteer for
deployment. The Army supports initiatives in two areas that require
improvement.
First, we need to provide emergency-essential Army civilians the
opportunity to maintain adequate life insurance protection when
assigned to a combat zone. Federal Employee Group Life Insurance
(FEGLI) policies do not contain a ``war clause.'' Basic life insurance
and any optional insurance coverage the employee has elected are paid
even under wartime conditions. Participation in the FEGLI program is
voluntary. Some employees who decline this coverage (usually offered at
the time of hiring) may have private insurance policies that contain a
``war clause.'' If they are later designated emergency-essential and
deployed, their families may not have adequate life insurance
protection. Legislation is not required for OPM to grant emergency-
essential civilians a FEGLI ``open season'' enrollment period. However,
the Army seeks statutory language to provide the greatest possible
assurance that employees designated emergency-essential will have the
opportunity to enroll in FEGLI or to increase their FEGLI coverage. To
eliminate any doubt about FEGLI coverage in wartime conditions, the
Army supports a legislative proposal precluding any loss or reduction
of FEGLI benefits that might arise during deployment.
Second, we need to improve income tax and estate tax treatment for
civilians assigned to a combat zone and extend to the survivors of such
employees income tax and estate tax treatment equivalent to that
afforded the survivors of service members. Specifically, Army seeks the
following for civilians assigned to a combat zone: non-applicability of
Federal income tax in the year in which the employee dies in a combat
zone or from wounds, disease, or injury suffered in a combat zone; and
exemption from certain estate taxes, consistent with the exemption for
service members, if the employee's death is related to deployment to a
combat zone.
Secretary Welch. This issue is not applicable to the Navy or Marine
Corps.
Secretary Keener. A limited number of Air Force civilians have
deployed to several operations, thus contributing directly to
readiness. Over 200 civilians deployed in support of Desert Shield/
Storm and over 40 deployed to support our efforts in Kosovo. Today, we
have civilian members deployed supporting Operations Northern and
Southern Watch as well as Red Flag Exercises. Non-deployed civilian
members also directly contribute to our readiness by maintaining
operations in garrison or standing available to support our many reach-
back operations. In addition, thousands of Air Force civilians make
major contributions to readiness through technology advances in our
research laboratories, and force support and maintenance and repair in
our Air Logistic Centers and depots. The synergy and flexibility
created by all our Air Force people--our ``Total Force--is what makes
us the world's preeminent Expeditionary Aerospace Force.
From a practical standpoint, fiscal and operational costs limit the
desirability of deploying civilians. Home station commanders have to
weigh the additional cost of deploying civilians on their operating
budgets. Overtime pay (time and a half basic pay) causes the most
concern, since in most deployments, civilians must be paid overtime for
hours they work over eight hours a day or forty hours a week. These
expenses can become substantial and are paid by the commander to whom
the civilian is permanently assigned. Also, since the majority of
deployments utilize volunteers, the number of civilians involved is
relatively small. From the deployed commander perspective, the non-
combatant status of deployed civilians is a limiting factor.
Accordingly, we are evaluating ways to reduce the necessity to deploy
noncombatants through improved systems which enhances ``reachback''
capability to provide services to deployed members.
For deployed civilians, we need such tools as giving deployed
civilians a limited open season for Federal Employee Government Life
Insurance (FEGLI). It is a good tool to help deployed civilians like
the one already approved in the FY00 National Defense Authorization Act
for automatically carrying over annual leave.
Mr. Bateman. Should deployed civilian employees enjoy the same
Federal tax relief as those in uniform do, or should that privilege
remain unique to the military? Has there ever been an American conflict
in which civilian employees were provided Federal tax relief?
Secretary Disney and Mr. Cooke. To our knowledge, civilian
employees have never enjoyed this privilege. We are currently reviewing
a proposal to provide limited tax relief to civilian employees in a
combat zone, but no decision has been reached.
Secretary Snyder. In general, no, deployed civilian employees
should not enjoy the same federal tax relief as those in uniform.
Although many deployed civilians share many of the same risks and
hardships as their military counterparts, an analysis of the financial
benefits reflects that a typical deployed civilian's compensation--even
without a monthly tax exclusion like that afforded deployed military
members--is currently comparable to, if not slightly higher than, the
compensation for a typical deployed military member of comparable
grade. In addition to the opportunity to earn a substantial amount of
overtime pay, civilians receive, under applicable circumstances, a
number of allowances and differentials, e.g., danger pay (up to 25% of
base pay) and post differential (up to 25% of base pay depending on the
country of deployment). To my knowledge, Federal civilian employees
have never been provided tax relief as a result of being deployed.
As I stated in my previous answer, however, the Army does support
extending to civilian employees assigned to a combat zone the same tax
treatment relative to survivor benefits that is afforded deployed
military members.
Secretary Welch. This issue is not applicable to the Navy or Marine
Corps, however we would support an initiative on this issue.
Secretary Keener. In comparing civilian pay, benefits, and
allowances, deployed civilian employees' tax exemptions are comparable
overall to their military counterparts. While deployed in a temporary
duty status, federal civilian employees continue to receive their
locality pay as part of their basic pay (taxable) from their permanent
duty location in addition to being compensated for temporary duty such
as per diem, travel, and lodging (non-taxable). Additionally, they may
receive danger pay (upon being in a combat zone more than four hours
which equates up to 25% of their pay) and may receive post differential
(upon being in a combat zone beyond 42 calendar days which equates to
up to 25% of their pay), depending on the location of the deployment,
which are both taxable. Military members receive a smaller combat pay
allowance, so exempting their base pay from taxes makes the situation
more equitable in comparison to civilian employees. Further, if
civilians are permanently moved to an overseas area on a permanent
change of station move, they do receive additional non-taxable
allowances such as quarters allowances and cost-of-living allowances
(while losing their locality pay).
There has not been an American conflict in which civilian employees
were provided federal tax relief.
Mr. Bateman. DOD policy limits assignments overseas to five years.
The reason behind the policy is to encourage developmental assignments
overseas and broaden the experience of the civilian workforce. This
reasoning is sound, but I am not so sure that the Department is really
operating a coherent program. We continually receive correspondence
from high performing employees overseas being forced to return, and
never hear from those in the US being blocked from overseas
assignments. Why have a policy that creates discontent, uproots good
employees, and has no apparent organized program behind it?
Secretary Disney and Mr. Cooke. Since 1966, the Department of
Defense (DOD) has had a policy of limiting civilian tours in foreign
areas to five years or less. The rotation policy is broadly written to
reflect DOD's worldwide responsibility. It intentionally grants the
Military Departments the flexibility to implement the policy to meet
their changing mission requirements at each foreign location. While the
policy's rationale has remained essentially the same as when first
issued, the emphasis has shifted somewhat over time as overseas
activities have undergone significant changes in mission.
The rotation policy allows for continuous assessment of civilian
workforce requirements and promotes the efficiency of worldwide
operations. Within the overseas workforce, there is also a continual
change in the skills that are needed as new missions emerge. The limit
on foreign area tours gives management the flexibility necessary to
adjust the skills mix to meet the new requirements. In addition, a
foreign-area assignment provides employees with desirable international
experience that is essential to career development, particularly at the
mid- and senior levels. Employees who return from overseas tours bring
a healthy new perspective to their organizations in the United States.
Creating vacancies through the five-year limitation is necessary to
allow this rotation to continue.
Equally as important, the employment of military spouses and family
members on our military installations is critical to their quality of
life in foreign areas where employment on the local economy may be
restricted. We believe that there is a direct connection between family
employment opportunities and retention of our career military members.
The rotation policy also ensures a continuing supply of vacant jobs for
our military spouses and family members.
In sum, then, we believe that the rotation policy greatly benefits
the Department and its overall workforce.
Secretary Snyder. The Department of the Army (DA) recognizes that
the current Department of Defense (DOD) policy on overseas rotation
means that some employees will return to the United States before they
wish to do so. We support the DOD policy. In applying it, we recognize
the need for variations that overseas commanders must respond to, based
on critical mission requirements in the overseas environment. Our
policy on overseas rotation provides the overseas commanders with the
flexibility to extend or deny extension of overseas tours in order to
maintain a high level of expertise in the civilian workforce.
With the continued reductions in civilian employment and closing of
Army installations in overseas areas, the Army must retain its ability
to limit employment in foreign areas as a means of managing overseas
staffing levels and providing developmental opportunities for career
employees. Our program provides Army employees return rights to the
Army positions held prior to going overseas. We also assist employees
who do not have return rights, with registration and placement through
the DOD Priority Placement Program.
Secretary Welch. The DON fully supports the 5-year overseas
rotational policy and believes that it should be equitably applied.
Provisions exist in the regulations for exceptions under unusual
circumstances, and the DON has endorsed these exceptions when they were
supported by the mission needs of the Department.
Secretary Keener. In Mar. 97, the Office of the Assistant Secretary
of Defense for Civilian Personnel Policy (OASD[CPP]) drafted a
memorandum in which the five-year limitation on foreign employment
established in Apr. 66 was reaffirmed. Since that time, the Air Force
has taken a less permissive view on extending employees beyond the
five-year limitation. The purpose of the overseas rotation program is
to provide opportunities for civilians to gain overseas experience, to
provide employment opportunities for family members, and to continue
the influx of new ideas and skills to the foreign area. Adherence to
the DOD rotation policy also provides for a systematic return of
employees upon completion of their overseas tours. Essentially, it
enables a greater number of Air Force employees to gain valuable,
career-enhancing experience in the overseas area. Although we continue
to believe the five-year rotation policy is fundamentally sound, there
may be ways to improve the basic policy and its execution. At a recent
Overseas Human Resource Management Conference, a recommendation was
made to form a Department of Defense working group to assess the
corporate and operational costs of managing the foreign area employment
limitation.
Mr. Bateman. Please discuss the overall expected attrition rate in
the DOD civilian workforce and what level of attrition is acceptable or
desirable. Of course, acceptable or desirable attrition rates might
vary by occupation. In your reply, please include data you may have
available on how DOD's attrition rate for key occupational categories
compares to attrition in private sector competitors for talented
employees.
Secretary Disney and Mr. Cooke. During FY 1999, about 7.6 percent
of DOD's civilian employees with permanent appointments left DOD
through retirement, resignation, transfer to other Federal agencies,
and other types of separations. This compares to a rate of 7.3 percent
in the previous fiscal year, and 7.5 percent in FY 1997. We expect
separation rates to rise modestly in the next few years as our older
workers reach retirement age, but we do not project a dramatic exodus
in any single year.
We consider these overall rates to be in the acceptable range. As
the drawdown of the civilian workforce slows in the next few years,
such loss rates should, in general, create sufficient vacancies to
allow DOD significant opportunities for workforce renewal through new
hiring. However, as stated elsewhere, spot surpluses will continue to
occur in certain occupations at certain sites. To deal with these, we
have requested additional force-shaping tools.
The table below contains loss rates for selected occupational
groups in DOD for FY 1999. We do not have comparable data for the
private sector, although available evidence indicates that separation
rates are much higher outside government.
SEPARATION RATES FOR DOD CIVILIAN EMPLOYEES WITH PERMANENT APPOINTMENTS
IN FY 1999 BY SELECTED OCCUPATION GROUP
------------------------------------------------------------------------
Percent
------------------------------------------------------------------------
Engineers................................. 5.3
Logistics management...................... 6.9
Central management........................ 7.2
Production workers........................ 7.4
Miscellaneous technicians................. 8.5
Financial management...................... 6.3
Data system management.................... 9.7
Secretarial............................... 8.0
------------------------------------------------------------------------
Secretary Snyder. The Army currently intensively manages
approximately 84,000 civilian employees in 22 separate career programs.
The overall turnover rate for these employees is about 7% to 8% per
year, a rate that has remained essentially constant during the
drawdown. We do not have comparable data for the private sector.
The Army is studying the degree of turnover variation by occupation
group in terms of the kinds of workers employed (i.e., demographic,
skill, and educational background), economic conditions, and Army's
future civilian workforce needs. The total turnover rate in an
occupational group can be assessed as either acceptable or unacceptable
only when the desired future of that group has been discerned. Once
that is accomplished, we can forecast the number of new hires or losses
needed to reach an identified target end strength level.
Secretary Welch. Within the DON we find attrition rates to be
relatively stable in the professional series. For example, during FY99,
attrition rates for mathematicians (6.2%), Physical Scientists (6.7%),
Engineers (5.9%) and Biologists (8.5%) were relatively low. We have no
private sector data to use as a comparison.
Secretary Keener. The attrition rate for our core white-collar
specialties has grown from 6% in 1996 to nearly 8% last year. The
government-wide attrition rate is approximately 7%. Our aging workforce
leads us to expect higher turnover in the future as employees reach
retirement. This is a ``good news/bad news'' situation: ``good'' in
that it will give us greater opportunities for bringing in new, fresh
talent; ``bad'' in that we will be losing valuable, skilled, and
experienced employees.
Our aggregate succession planning models show normal loss rates
between 6% and 6-1/2% are in the range where we have a reasonable
balance between force renewal and retention of experienced employees.
However, we need, and are in the process of building, better
forecasting models to help determine what the desired attrition rates
should be for each career field.
Mr. Bateman. Could you review for me what the percentage reduction
in your Fourth Estate has been since, 1989 or whatever date is more
convenient so that we have an idea as to the relative size of the
downsizing? Could you furnish us with the numbers on the drawdown of
the various departments and agencies within the Department of Defense.
Secretary Disney. The ``Fourth Estate'' has been changing in size
and scope over the past three decades. Changes in its civilian
employment over the past decade are particularly illustrative of this
fact. In September 1989, the Fourth Estate had 99,000 employees. It
reached its peak in September 1994, with 155,000 employees and has
steadily declined since, with 122,000 employees as of February 2000.
These changes stemmed primarily from the establishment of Defense
Agencies and DOD Field Activities as the Department revamped its
service and support structure to improve the quality and effectiveness
of products and service delivery. This effort effectively transferred
people and functions from the Military Departments and across
Components to achieve unity of effort, centralized oversight, and
economies of scale. As illustrated by the numbers provided separately,
this process did not generate growth in the DOD workforce. Rather, the
consolidation itself usually recognized significant savings in
personnel or other resources.
Information on changes in civilian employment for all DOD is
displayed in the table below.
DRAWDOWN IN CIVILIAN EMPLOYMENT IN DOD (ROUNDED)
----------------------------------------------------------------------------------------------------------------
September 1989 February 2000 Change Percent change
----------------------------------------------------------------------------------------------------------------
Military functions.............. 1,117,000......... 704,000........... 413,000........... -37
US citizens................... 999,000........ 652,000........... 347,000........... -35
Foreign nationals............. 118,000........ 52,000........... 66,000........... -56
Civil functions................. 31,000........ 24,000........... 7,000........... -23
Total......................... 1,148,000......... 728,000........... 420,000........... -37
----------------------------------------------------------------------------------------------------------------
AMC Proposed Apprenticeship Program
Mr. Bateman. The Army Materiel Command has expressed some concern
about the aging of skilled workers in the depots and has suggested that
an apprenticeship program is necessary to train skilled workers for the
future. What's your view? If you agree that such a program is
necessary, please provide supporting analysis.
Secretary Snyder. Headquarters, Department of the Army completed a
preliminary analysis of AMC's depot maintenance job families to
determine whether an apprenticeship program would be of value. Our
preliminary findings and HQ AMC analysis support the need for a
structured apprenticeship program in certain blue collar occupations.
However, before we can arrive at a final conclusion, we need to
determine the required endstrength for these apprenticeship occupations
in future years so that we can accurately assess the number of
apprentices needed to maintain a steady state and compensate for the
impact of increased retirements. My staff is currently working with HQ
AMC to complete the analysis.
Mr. Bateman. What has the Navy learned from the China Lake
demonstration project?
Secretary Welch. Navy's China Lake project opened the doors to new
ways of hiring, paying, and rewarding employees. It was the first
demonstration project within the Federal Government, and it allowed
managers and employees to discuss salaries and the employer to offer
salaries commensurate with employee skills, at or above normal starting
salary rates. China Lake established pay banding to permit and
facilitate flexibility in pay setting commensurate with performance.
As a result of the China Lake project, which is now a permanent
Alternative Personnel System, the Department of the Navy (DON) is
supporting a Department of Defense (DOD) strategy that will result in
increasing flexibility in the hiring process, extending pay banding
beyond the demonstration project sites, and empowering managers to
reward good performance and to deal effectively with poor performance.
While the emphasis of the China Lake project was on hiring and
developing of scientific and technical employees, the principal lessons
were more generic in nature. Simplified hiring and appointing processes
through such initiatives as category ranking and reduction in the
number of appointing authorities and contribution based performance
rating systems can be applied across the board.
Mr. Bateman. The Navy's shipyard apprenticeship program is
frequently mentioned as a model. Please describe the program, why it
was begun, and the results so far.
Secretary Welch. The Navy's apprenticeship program is a Department
of Labor-approved hiring and training program. It provides the tools
and methods needed to identify candidates with potential to perform
deck plate maintenance work, and integrates a program of formal post-
high school education with on-the-job training and mentoring to provide
a source of fully qualified blue collar employees.
The Navy began its apprentice program more than 80 years ago to
respond to a need for shipbuilding and maintenance skills, which could
not be fully or timely met by the private sector. The Navy was the
preeminent employer of the type of skilled trades and crafts workers
found at a shipyard, including shipfitters, welders, machinists,
electricians, and pipefitters.
Apprentices are hired based on their potential ability to learn and
perform trades and crafts work. Typically, apprentices enroll in a
community college-based program of general education including courses
in mathematics, drafting and blueprint reading, and materials science.
They also attend formal classes at the job site where they learn
specific job skills they will need in their selected trade. The
remainder of their time is spent performing work under the guidance of
journey-level workers.
During the last 10 years, as we closed shipyards and depots, our
apprentice programs slowed down considerably, virtually emptying the
pipeline for future workforce requirements. Now, thanks to increases in
funding for FY99 and FY00, the Navy has been able to reenergize its
apprentice programs to meet identified current and future needs.
Apprentice programs at the shipyards in Pearl Harbor, Portsmouth, Puget
Sound, and Norfolk are operating vigorously. During fiscal years 1999
and 2000, 227 new apprentices were hired at Portsmouth and Pearl
Harbor. Currently, each of the shipyards projects hiring from 100 to
150 additional apprentices in a wide range of blue collar trades.
Our Systems Commands and the Atlantic and Pacific Fleet Commanders,
who are responsible for the Department's depot-level workforce,
consider the apprentice program an integral part of their efforts to
prepare for the workforce of tomorrow. We believe that the proven
methods of the Navy's apprenticeship programs can be applied in any
depot-level maintenance program.
Mr. Bateman. Among the tools available to agencies that face
recruitment and retention challenges are recruitment bonuses and
retention allowances. Despite the media articles indicating that
agencies are having difficulty attracting and retaining employees, we
understand that agencies very seldom use either of these tools. How
extensively does DOD use these tools? If they are seldom used, please
explain why. Also, if they are seldom used, do you believe that
agencies should use them before seeking any additional tools from the
Congress to address recruitment and retention issues?
Mr. Cooke. Recruitment, Retention, and Relocations bonuses
(hereafter referred to as 3R's) are used within the Fourth Estate, with
varying degrees of frequency from agency to agency. Some agencies have
attached recruitment bonuses to intern programs as an entry-level
employment incentive. Others have used the retention allowance as a
tool to retain much needed corporate knowledge and technical skills.
Other agencies regularly offer relocation bonuses in critical skill
areas of senior management. For the most part, we are able to recruit
the people we need within the present salary structure (base pay plus
locality). As resources become scarcer, we expect the use of the 3R's
provisions to increase. We do endorse the concept of using the
provisions available to us before requesting additional legislation to
address recruitment and retention issues--except in cases of request
for direct hire authority. In these instances, it may not be the salary
that hinders the recruitment of new employees, but the extensive steps
involved in merit principles that we must apply, that prevents us from
competing with the quick selections and job offers that private
industry can make.
______
QUESTIONS SUBMITTED BY MR. CHAMBLISS
Mr. Chambliss. Why is a worker at Robins Air Force Base paid at a
certain level but a worker in Atlanta, less than 100 miles away, might
be paid at a higher rate?
Secretary Disney. Although the methodology for conducting wage
surveys and developing area wage schedules is uniform throughout the
system, no two Federal prevailing wage rate schedules are identical.
Our experience in conducting locality wage surveys has shown that these
differences, for the most part, are attributable to differences in the
kind and size of private industrial employers located within each wage
area and differences in the level of wages paid for various occupations
by each private employer. Thus, the Federal prevailing rate schedules
for different areas can reflect significant differences in levels of
pay.
Mr. Chambliss. Why might a worker doing the same job at another
government agency at Robins AFB be paid at a higher rate?
Secretary Disney. Federal Wage Systems (FWS) employees doing the
same job in the same location could be paid different rates for various
reasons. For example, the employees could be at different grades or at
different steps in the same grade. Some employees may be being paid
from the Wage Leader or Wage Supervisor pay scale, or be entitled to
grade or pay retention. All Department of Defense (DOD) FWS employees
(not leaders or supervisors) working in Warner Robins will be paid at
the same rate if they are at the same grade and step. There may be some
differences in rates paid to other-than-DOD FWS employees because the
DOD rates are based on local private industry rates.
Mr. Chambliss. Why have general schedule employees received pay
increases equal to twice the amount of the wage grade people over the
last 14 years?
Secretary Disney. Answering this question requires differentiating
the systems and then addressing the misunderstanding about pay rates.
Pay rates for General Schedule and Federal Wage System (FWS)
employees are based on two distinctly different systems. The General
Schedule is a worldwide schedule with 32 locality pay schedules
applicable to the 48 contiguous states. FWS pay schedules are based on
local prevailing rates developed by joint labor-management surveys
conducted in 132 local areas. Congress restricts increases in FWS
schedules to the amount of the increase in the General Schedule plus
locality payments.
General Schedule employees have not received pay increases equal to
twice the FWS increases over the last 14 years. The following table
shows the General Schedule (including locality pay) increases versus
FWS increases from 1986 through 1999.
OVERALL INCREASES FOR GENERAL SCHEDULE EMPLOYEES VERSUS FEDERAL WAGE SYSTEM EMPLOYEES IN ATLANTA AND MACON,
GEORGIA (INCREASES EXPRESSED AS A PERCENT)
----------------------------------------------------------------------------------------------------------------
Nationwide
General Schedule FWS Macon Non-
Year* (including FWS Atlanta FWS Macon DOD DOD
locality)
----------------------------------------------------------------------------------------------------------------
1986............................ 0 0 0 0
1987............................ 3.0 2.95 2.93 2.95
1988............................ 2.0 1.95 1.95 1.95
1989............................ 4.1 4.05 3.39 4.05
1990............................ 3.6 3.56 3.56 3.56
1991............................ 4.1 4.07 2.74 -4.28
1992............................ 4.2 4.15 3.60 3.70
1993............................ 3.7 3.29 3.34 3.00
1994............................ 2.2 2.33 1.12 1.06
1995............................ 2.6 2.95 3.04 1.39
1996............................ 2.4 2.46 2.47 1.85
1997............................ 3.0 2.63 3.07 3.06
1998............................ 2.8 2.53 2.84 2.61
1999............................ 3.6 3.40 3.62 3.62
Average......................... 2.95 2.88 2.69 2.04
----------------------------------------------------------------------------------------------------------------
* Calendar Year for GS and Fiscal Year for FWS.
Over the last 14 years, General Schedule employees' pay increased
an average of 2.95 percent compared to 2.88 percent for FWS employees
in Atlanta, 2.69 percent for those in Macon working for DOD, and 2.04
percent for those in Macon working for agencies other than DOD. Since
1995 DOD FWS rates in Macon have been increasing faster than the Macon
(Non-DOD) or Atlanta FWS rates.
Mr. Chambliss. Some specialized government jobs in the Macon,
Georgia, wage area are not found in the private sector locally but may
be found in another area, such as Atlanta. The data in Atlanta are not
used in the prevailing wage schedule in Macon. Why would that be the
case when there is nobody else in that category within the local area?
Secretary Disney. Atlanta and Macon, Georgia, are separate wage
areas, with the local prevailing rates in each area being used to
establish our FWS schedules. Both the General Schedule and the FWS
schedules are applied to a wide variety of positions. Since the General
Schedule is national in scope, jobs from across the entire nation are
used in defining the schedule. Because the FWS schedules for Atlanta
and Macon are each based on local wages, those occupations prevalent in
each area are used to establish the schedule for that area. It is not
unusual to find specialized jobs at a Federal activity where there are
no local private sector counterparts. The FWS schedules do not address
specific occupations but establish specific rates for each grade and
step for all covered occupations.
______
QUESTIONS SUBMITTED BY MR. UNDERWOOD
Mr. Underwood. How would we better provide assistance to workers
who are undergoing a dramatic work transition through no fault of their
own and what about the issue of how we deal with the term ``inherently
govermental?'' Also, would you please provide your comments on the
ordnance handing on Guam being outsourced, the A-76 study performed,
and the problems associated with having to bring people in to perform
the work.
Secretary Welch. The ordnance handling function was included as
part of the Base Operating Support (BOS) multi-function A-76 study that
was awarded to Raytheon on April 7, 2000. Because of the success we've
had with contractor operated functions at Naval Magazine Lualualei,
Hawaii, we believe we will achieve similar success at Naval Magazine
Guam. The decision to include this function was closely scrutinized to
ensure its suitability for contracting. A contingency is included in
the contract to handle surge requirements similar to language contained
in the contract for Naval Magazine Lualualei, Hawaii. The contractor is
paid based on tonnage handled, and must be able to respond to workload
fluctuations including significant surges.
Congressman Underwood's concern that the contractor may find it
difficult to hire qualified, on-island workers for surge workload may
be accurate. However, this is a performance contract and the contractor
may have to hire employees from off-island to meet performance
requirements. The Department of the Navy does not monitor the details
of how or from where the contractor recruits its employees. Instead, we
closely monitor the performance of the contracted work to ensure
compliance with standards of operation and adequacy of results.
Mr. Underwood. Are you able to hire the skills you need to support
the military services?
Mr. Cooke. The Fourth Estate is an amalgam of independent agencies,
each with its own personnel authorities, diverse mission, function,
reporting channels, operational requirements, culture, values, and
workforce composition. However, within this diverse workforce, there is
agreement that the job categories that are in high demand and that are
difficult to recruit are in the areas of Information Technology,
Electronics Engineering, Telecommunications, Acquisition, Accountants,
Logistics, Personnel Management and Clerical/Administrative support
positions.
Of the job categories mentioned, Information Technology is the
field where we are experiencing and will continue to have the most
difficulty in recruiting. The demand for IT expertise is very high
among many federal agencies and the private sector. The Fourth Estate
has a number of different programs and options available to meet those
highly dynamic and changing IT needs. Included in our efforts to
maximize our recruitment of IT professionals are newly developed intern
programs at the high school and college levels, vigorous recruitment
efforts for IT professionals, telecommuting pilot programs, and agency
marketing. Some of our Fourth Estate agencies are designing
developmental career programs to develop multi-functional employees,
allowing the current workforce to develop new skills needed to keep up
with changing technology. Indications are that increased use of the
3R's provisions as a recruitment and retention tool is expected. We
anticipate that such programs will serve as an incentive to large
numbers of new and current employees and provide an opportunity for
them to achieve their career goals within the agencies.
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