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ANTI-TERRORISM/FORCE PROTECTION MISSION

Question. In the fiscal year 2003 appropriation, the Air Force received additional funding to address anti-terrorism/force protection issues. The Air Force budget request for fiscal year 2004 does not sustain the 2003 level of funding.

Please explain how the active and Reserve forces have been or are involved in anti-terrorism/force protection missions this year.

Answer. Our Total Force has been integrated to provide seamless force protection at all our installations: Active, Guard, and Reserve. The Air Reserve Component (ARC) has made huge contributions to our success in Operations ENDURING FREEDOM, NOBLE EAGLE and IRAQI FREEDOM. Through enhanced physical security measures, counterintelligence, and intelligence activities, ARC forces have implemented and continue to implement heightened levels of protection for our vital resources, key infrastructure and our most valuable asset: our people.

Question. What is the number of Reserve forces currently mobilized for Operation Noble Eagle to fill those requirements?

Answer. The total number of Air Reserve Component personnel mobilized in support of Operation Noble Eagle (ONE):

Air National Guard

Air Force Reserve
Total

8,193

2,236

10,429

Of this total for ONE support, approximately 40 percent (4,300+) of the personnel are considered to be working in traditional force protection/anti-terrorism specialties (i.e., physical security, counterintelligence, and intelligence).

Question. The Committee understands that the Air Force lacks the required number of Security Forces to provide the appropriate level of security for your facilities worldwide. Please explain why the Army National Guard is supplying soldiers to support the Air Force's security requirements.

Answer. This is an example of two Services working together in a spirit of cooperation to meet a significant and enduring threat facing our Armed Forces. With the increased requirements driven by the events of 9/11, the subsequent Global War on Terrorism, and the progressive demobilization of Air Reserve Component forces, the Air Force lacked sufficient resources to provide full dimensional protection to its resources. In this case, the Army had the expertise and the available personnel necessary to help the Air Force secure its resources until such time as the Air Force can implement long-term manpower and technology solutions to mitigate vulnerabilities. This is a fit that makes sense and it supports our strong foundation for joint operations. "One Team, One Fight.”

Question. What is the number of Reserve personnel mobilized, and the length of time they will be providing security forces?

Answer. The total number of Air Reserve Component (ARC) personnel mobilized is approximately 36,000. Security forces personnel currently mobilized worldwide are approximately 5,400. ARC security forces currently mobilized will continue to serve in a mobilized status until April 2004 or until an individual has served 24 months, whichever is earlier. The Air Force is proactively managing personnel usage, and began systematic demobilization in September 2002, in an effort to minimize impacts on individuals while still meeting mission requirements. If required by events, any new ARC mobilizations will be accomplished to satisfy primarily overseas requirements and only if the necessary force protection capability cannot be obtained from the volunteer pool (i.e., ARC members that are volunteering to serve on extended man-days).

Question. What is the incremental personnel and O&M costs associated with this mission for the Army? Describe the funding agreement between the Air Force and the Army.

Answer. Personnel costs are $620.4 million and O&M are $257 million. The funding agreement is that the Air Force will pay all costs associated with mobilization of these Army members.

EQUIPMENT OPERATION COSTS

Question. Mr. Secretary, one of the recurring challenges that you face in managing your Operation and Maintenance account is the rising cost of operating your equipment. In a February 2003 report, the General Accounting Office found that the military services pay little attention to operating and support costs and readiness during development, when there is the greatest opportunity to affect those costs positively. Rather the services focus on technical achievement, featuring immature technologies during development and fielding.

Is this an accurate assessment, and if it is, what do you propose as process improvements to gain control of total ownership costs of our military equipment?

Answer. The processes highlighted in the February 2003 General Accounting Office report, for the most part, have been or will be changed or modified. The Air Force is aggressively attacking sustainment costs for both new and aging systems. For example, there is a renewed emphasis within the Air Force on the Systems Engineering (SE) effort devoted to system development. SE training has been improved through the creation of the Center of Excellence for System Engineering at the Air Force Institute of Technology. Program managers are required to look for ways to incentivize contractors to perform robust SE to reduce sustainment costs. In fact, the status of all key SE processes/practices have been or will be a salient topic of discussion at all periodic program reviews. The above notwithstanding, the Air Force's new collaborative requirement processes simultaneously focus upon all lifecycle issues. Operators, acquirers and sustainers are brought together to jointly identify and agree upon requirements from program inception. In an attempt to reduce unknown factors that drive up Operations and Maintenance costs, emerging technologies are being further matured in the laboratory setting before being placed into program development. Similarly, immature technologies are being fully vetted based upon the need for such a technology. Contrary to past practices, immature technologies will only be inserted in a system when there is a need to counter a known threat that cannot be accomplished in any other manner. In addition to the above, the Product Support Management Plan (PSMP), along with the Reduction in Total Ownership Cost (R-TOC) plans, are required as part of the particular acquisition strategy. A key factor in the PSMP is the emphasis on life-cycle sustainment cost. This plan will ensure the system will meet the using command's requirement and provide best value. Finally, the Air Force began a massive training effort to teach the "big picture" of innovation, collaboration, and cost implications to all acquisition team members. The plan is to train each individual involved in the acquisition process (some 12,000 persons) by fiscal year 2007.

FACILITIES SUSTAINMENT, RESTORATION AND MODERNIZATION

Question. Mr. Secretary, the Department of Defense has established standards for Facilities Sustainment, Restoration and Modernization. Sustainment is to be funded at a minimum of 93% of requirement. The restoration and modernization goal is to correct C3 and C4 conditions by 2010.

Has the Air Force funded sustainment of facilities at the DoD desired level of 93% or above?

Answer. Yes. We are funding sustainment at 95 percent of the requirement. Question. Has the Air Force established a restoration and modernization funding plan that will achieve elimination of C3 and C4 ratings by 2010?

Answer. Our goal (based on the fiscal year 2004 Defense Planning Guidance) is to restore the readiness of existing facilities to at least C-2 status, on average, by the end of fiscal year 2010. Based on current funding projections, it is realistic that we will meet this goal.

We are concurrently targeting our investment to eliminate all C-3 and C-4 rated facility classes. Based on current funding projects (and extending them beyond fiscal year 2009... our farthest-reaching funding projection), we expect to eliminate all C-3 and C-4 rated facility classes by 2014.

Question. The fiscal year 2003 appropriation included increased funding in base operations and Facilities Sustainment, Restoration and Modernization to address anti-terrorism and force protection concerns.

Did the Air Force sustain the higher level of funding for antiterrorism/force protection in the fiscal year 2004 request?

Answer. Thanks to the help of this committee, we were able to address a large portion of our facility-related anti-terrorism/force protection requirements in our fiscal year 2003 program. With the fiscal year 2003 enacted budget, the Air Force is investing more than $450 million in anti-terrorism/force protection facility requirements. Of this amount, more than $200 million is being invested through our military construction program.

For fiscal year 2004, we have requested nearly $20 million for anti-terrorism/force protection-specific projects (ie., perimeter fencing, entry access gates) and antiterrorism/force protection design requirements embedded into other construction

projects.

In addition to this investment, we still have anti-terrorism/force protection requirements programmed in our future years defense plan. Specifically, the Air Force has identified approximately $100 million in requirements for fiscal years 20052009. These projects either enhance existing anti-terrorism and force protection

measures or eliminate inefficiencies caused by existing workarounds. They include, for example, fencing, entrance gates, and vehicle inspection stations.

Question. What is your assessment of Air Force progress in identifying and addressing anti-terrorism and force protection concerns?

Answer. The Air Force is making excellent progress in identifying and addressing anti-terrorism and force protection concerns. As part of annual vulnerability assessments required by Air Force Instruction 10-245, we assess each installation to ensure new projects are constructed in compliance with DoD antiterrorism standards. Similarly, existing facilities are assessed in the context of the installation vulnerability assessment.

In addition to the $450 million being invested in fiscal year 2003 and the $20 million programmed for fiscal year 2004, we have identified approximately $100 million in the future years defense plan (fiscal years 2005-2009) for anti-terrorism and force protection military construction projects. Projects in the future years defense plan either enhance existing anti-terrorism and force protection measures or eliminate inefficiencies caused by existing work-arounds. The projects include fencing, entrance gates, and vehicle inspection stations.

DEPOT MAINTENANCE

Question. Historically, the Air Force has been able to fund depot maintenance at an average level of about 93%. For fiscal year 2004, you increased depot maintenance funding by $226 million, but the percent of requirement achieved is only 79%, because costs grew by $486 million. Depot Maintenance for Air Force reserve component equipment is also funded at about the same level.

The Air Force's top unfunded requirement for fiscal year 2004 is $516 million for depot maintenance which would raise the funded level to 92% of requirement. Please discuss the surge in Air Force depot maintenance costs, and the expected outcome if Air Force depot maintenance is funded at only 79%.

Answer. The surge in depot maintenance costs is attributed to several factors such as aging aircraft issues that affect both material consumption and direct labor hours. For example, the depot work package for KC-135E aircraft has doubled in the last 10 years, primarily due to aging aircraft issues. One factor is the corrosion on the engine struts, the point at which the engines attach to the wing. This corrosion must be repaired now or it will continue to worsen, become more expensive to repair over time, and could impact safety of flight/airworthiness of our KC-135E fleet. There are numerous examples like this across all our fleets. If depot maintenance funding remains at 79 percent, the Air Force will defer 42 aircraft and 76 engines. We faced tremendous pressure in this budget and took some risk within depot maintenance, knowing that we will have challenges to work in fiscal year 2004. We are committed to working those challenges.

Question. What will be the impact on your depot maintenance backlog?

Answer. The Air Force will defer 42 aircraft and 76 engines in fiscal year 2004. Additionally, we will defer some level of software, other major end items, and Depot Programmed Equipment Maintenance (DPEM) funded exchangeables maintenance. We know we have challenges in fiscal year 2004 and we are committed to working through those challenges.

SPARES

Question. The Air Force's second highest ranked unfunded item is $412 million for spares. Your budget briefing materials indicate that you increased funding for flying readiness, and that you expect to fly the prescribed program, but that you have accepted some risk in the area of spares.

Please elaborate on the risk you have assumed in budgeting for spares, and how you intend to manage that risk.

Answer. The Air Force took some risk with the flying hour spares funding in fiscal year 2004. Due to the sustained nature of our effort in support of the Global War on Terrorism, the Air Force faces an extraordinary degree of uncertainty regarding the operational profiles we will actually execute in fiscal year 2004. The Global War on Terrorism influenced our maintenance patterns in fiscal year 2002 and its effects have influenced our fiscal year 2004 projected meantime between failure for repair of parts, which helped determine the fiscal year 2004 funded level. However, if the Air Force returns to fiscal year 2001 maintenance patterns, we will address strategies to assure that funding levels support flying hour execution.

OUTSOURCING FUNCTIONS PERFORMED BY MILITARY PERSONNEL

Question. In order to meet OMB's competitive sourcing goal, DoD plans on competing many functions that contain military positions. The military positions are not being eliminated but being moved from commercial functions to war-fighting_functions. Funds, therefore, have to be made available to either pay the new in-house organization or a contractor. The Air Force has estimated that this could cost between $10 to $15 billion dollars over the next five years.

Has DoD budgeted sufficient resources in order to be able to move military positions?

Answer. To our knowledge, DoD has budgeted no resources for this initiative. However, the Air Force identified a first increment for this initiative, $2.4 billion over the Five Year Program (FYP), as our #1 unfunded priority in the fiscal year 2004 POM. Unfortunately, resources have yet to be allocated.

ENCROACHMENT ON TRAINING AREAS

Question. In June 2002, GAO reported that DOD lacks a comprehensive plan to manage encroachment on training ranges. Not withstanding the fact that the Defense Department's data indicates that the military is ready to fight, the GAO documented that encroachment is happening and that DOD has not evaluated to what extent, and at what cost, environmental laws affect the military's ability to train. To what extent has the Air Force separately, or as part of a_DOD_effort, attempted to document the effect of encroachment on the Air Force's ability to train and at what costs?

Answer. The Department of Defense is aggressively working on Range Comprehensive planning to address the impacts of encroachment and the Air Force is a full partner in support of the effort. The Air Force is developing a Resource Capability Model to identify, quantify and assess resource opportunities and degradations, based on mission requirements and identify the operational risk created when air, land, water, and frequency resources are denied or degraded. To date, we have spent approximately $300,000 on this effort.

Question. To what extent does the fiscal year 2004 budget request provide funds to pay for the costs associated with encroachment?

Answer. The Air Force has initiated efforts to begin capturing the fiscal impact of encroachment. However, no direct method currently exists to determine the full cost associated with encroachment mitigation primarily because the costs are embedded within multiple funding sources (installation operations and maintenance accounts, environmental programs, personnel, acquisition, base operating support, and communications and frequency management, etc). For example, the Air Force is spending nearly $38 million in military construction to acquire 417 acres for the only remaining departure corridor for live ordnance at Nellis AFB. Nearly $35 million from the operations and maintenance account will be spent on a 10-year birdof-prey study in New Mexico, Texas, and Arizona.

In consideration of these multiple funding sources, the Air Force is striving to better understand the impact of encroachment on operational readiness by capturing and identifying the cost embedded in these various programs.

PURCHASE CARDS AND TRAVEL CARDS

Question. Over the past two years, the General Accounting Office has published numerous reports detailing difficulties and potential fraud in the military departments having to do with the use of government travel and purchase cards. The GAO reported recently that while more improvement is needed, substantial improvements have been made. In fact, the Air Force has lower charge off rates than the Army and Navy Departments.

What are some of the actions the Air Force has taken in response to purchase and travel card problems as reported by the GAO?

Answer. With respect to the purchase card, the Air Force has issued two policy letters to quickly implement GÃO recommendations, tighten controls and improve oversight. We have already mandated standard training, and we are incorporating the remaining GAO recommendations into the new Air Force Instruction.

The Office of the Under Secretary of Defense, Comptroller has formed a task force with the intention of changing many of the current card policies. Concerning the travel card, significant changes will include: 1. Tightening the credit worthiness of all individuals that receive a travel card. 2. Providing specific disciplinary guidelines for both military and civilian cardholders. 3. Modifying personnel systems to track actions against a delinquent/abusive cardholder. 4. Developing methods to control cards when a cardholder separates or retires. 5. Developing a data mining operation

to identify abuse of any travel card. 6. Implementing mandatory split disbursement for all military travelers. Split-disbursement requires a traveler to have their travel card payment sent directly to the bank by electronic funds transfer when they file their travel voucher.

Question. Have you reduced the number of cards issued?

Answer. Yes. The Air Force has reduced the number of government purchase cards from 77,580 in September 2002 to 49,621 in March 2003. This is a 36 percent reduction in the number of cards. In addition, over the past year Air Force reduced their travel cards by 100,000 or about 20 percent of the cards. Furthermore, we are working with the Office of the Under Secretary of Defense, Comptroller and supporting their efforts to further reduce the number of travel cards.

Question. How do you train your personnel to avoid problems with travel and purchase cards?

Answer. Air Force Instruction (AFI) 64-117 and policy letters mandate training requirements for all purchase cardholders and approving officials. To provide a common training baseline, all cardholders and approving officials are required to take standard training from Defense Acquisition University. Agency/Office Program Coordinators are required to take the GSA Agency/Organization Program Coordinator training. In addition, the Air Force requires both initial and annual refresher training for both cardholders and approving officials. Areas of training include: Responsibilities of cardholder, Bank electronic access program, Federal Acquisition Regulations and associated DoD and Air Force supplements.

Air Force has many different ways of training both the cardholder and our Agency Program Managers (APC's) who are responsible for travel card administration. We have web sites that provide training for both cardholders and APC's. Currently wẹ are mailing out 1,800 new CDs to all APC's that emphasize their job functions and responsibilities. The Air Force holds two conferences each year, one for level three APC managers and another with General Services Administration for all APC's and travel cardholders to get hands-on policy and bank training. We encourage all our bases to take advantage of the bank-sponsored on-base training, where the bank travels to the base and conducts training. It is planned to develop a new training CD once all the new Office of the Under Secretary of Defense, Comptroller travel card policies are completed.

Question. Do you hold supervisors responsible for verifying the appropriateness of credit card use by their subordinates?

Answer. Yes, the Air Force holds the approving officials responsible for the government purchase card usage of the cardholders assigned to them. The approving officials must ensure that all cardholder transactions are for valid government requirements. Regarding the travel card, Air Force commanders own the program. The Assistant Secretary of the Air Force (Financial Management and Comptroller) advised Air Force commanders to monitor charge card use and be mindful of the importance of their continued leadership, careful selection and diligent training of those Air Force members entrusted with charge cards. To assist in verifying the appropriateness of travel card use, agency program coordinators use Bank of America's automated reporting system, EAGLES. EAGLES reports are a tool available to the program coordinators to identify suspicious travel card activity and investigate through regular spot checks. Commanders use this capability through their program coordinators to identify problems early and address them when they are discovered. Question. Secretary Rumsfeld was briefed on the lease proposal by Aldridge and Zakheim on March 10th and requested additional information. Part of that briefing was a review of a new Institute of Defense Analysis (IDA) study which is critical of the lease proposal.

The lease is expected to cost about $17 billion, with another $4 billion needed for the service to purchase the aircraft post-lease.

Mr. Secretary, what can you tell us about Secretary Rumsfeld's consideration of the lease proposal? What were the concerns he raised?

Answer. To clarify the record, I was not present at the above-mentioned meeting that was reported in the media. As far as the costs you mentioned, the Air Force has not released cost information on the lease and cannot release cost information until the Secretary of Defense approves the lease.

The DoD leasing panel has been reviewing the lease proposal since October 2002. Discussions are occurring at the highest levels within the Department of Defense. The Air Force continues to answer all questions raised by the Department on the lease proposal.

Question. What were the issues raised in the Institute of Defense Analysis (IDA) study on the proposed lease?

Answer: To clarify the record, I was not present at the above-mentioned meeting that was reported in the media. As far as the costs you mentioned, the Air Force

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