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US House Armed Services Committee





APRIL 26, 2001





            Mister Chairman and members of the Committee. Thank you for the opportunity to discuss the state of our Navy facilities and infrastructure, and the impacts of their condition on Fleet readiness. I am Rear Admiral David Pruett, Director, Civil Engineering Readiness Division, on the Chief of Naval Operations' (CNO) staff. It is my job to ensure that the Navy's investment in facilities and infrastructure result in Fleet readiness both now and in the future. The CNO priorities of Manpower, Current Readiness, Future Readiness, Quality of Service, and Alignment have played a significant role in shaping the Navy's strategies for future investment in facilities and infrastructure. My objective today is to provide you with some insights into the Navy facilities management program and some of the challenges we face as we balance current and future readiness.

During my comments today, I will discuss the status of many programs. For FY 2002, the President's budget includes funding to cover our most pressing priorities. I should note, however, that the programs I will discuss, and the associated funding levels may change as a result of the Secretary's strategy review that will guide future decisions on military spending. The Administration will determine final 2002 and out year funding levels only when the review is complete. I ask that you consider my comments in that light.

Let me add that the President's priority on military housing is most welcome. My comments later in this testimony on housing do not reflect the impact of the additional funding the President has proposed for housing. At this time, we do not know how much of this funding will be allocated to the U.S. Navy.

The Challenges Facing the Navy's Infrastructure

Current Condition of Navy Facilities 

                 The Navy owns more than 160,000 facilities valued in excess of $125 billion dollars. The Navy infrastructure includes operational, training, maintenance, administration, housing, Research, Development, Test, and Evaluation, supply, and medical facilities, as well as utilities systems. The Navy's infrastructure is old, and its age and condition are having a negative impact on readiness. Forty-three percent of our infrastructure was constructed before 1950. The average age of Navy facilities is 45 years. Navy reported 67% of its facility categories in a C3 condition in the FY00 Installation Readiness Report (IRR) submitted to Congress by the Secretary of Defense in February 2001. Include in this number was one reported C4 condition in the utilities and grounds category for the Commander-in-Chief Atlantic Fleet (CINCLANTFLT). A C3 condition code is used to identify facilities that marginally meet mission demands with major difficulty. A C4 condition code identifies facilities that do not meet the vital demands of the mission category. Our desired state is C2 for our facilities (meets mission demands with some minor deficiencies that have a limited impact on mission capability) or C1 (meets mission demands with minor deficiencies that have a negligible impact on mission capability). For example, on the latest IRR, eight of our nine Installation Management Claimants gave a rating of C3 to the category of Operations and Training, which includes our waterfront and airfield facilities as well as our fleet training infrastructure. CINCPACFLT rated the overall condition of their facilities C3 across all facility categories. Thus, the assessment of our senior operational commanders is that their facilities can only marginally meet their mission requirements. Our current backlog of critical deficiencies remains at an unacceptable level of $2.6 billion. The critical backlog represents those deficiencies that result in significant negative impact to environmental, safety, quality-of-life or mission related requirements. We have not funded maintenance and repair at levels necessary to significantly reduce this critical backlog. The bottom line here is that our old, deteriorating infrastructure is negatively impacting readiness.

Psychology of Deficiency

The way ahead is a challenging one, complicated by the age and condition of our facilities; our inventory of historic properties; and the location of our facilities in coastal, high cost areas. Our resourcing dilemmas are further complicated by the unique composition of the Navy, requiring us to maintain two infrastructures, one afloat and the other ashore. Our challenge is to maximize the effectiveness and efficiency of facility maintenance and repair funding. The Vice Chief of Naval Operations, in his March 21, 2001 testimony on Readiness to the House Committee on Appropriations, alluded to the past Navy practice of understating requirements. He further stated, "that practice has infected our fleet with a psychology of deficiency, a phrase that means the de facto acceptance of sustained resource shortages as a normal condition." Like the fleet, our infrastructure and facilities have been infected by this psychology of deficiency. To address this issue, we have looked to industry standards to establish benchmarks for similar Navy facilities and infrastructure. Several independent industry studies have recommended an acceptable range for maintenance and repair funding of 2-4% of current plant value, with the private sector funding at closer to 3.5%. The Navy, with an investment of only 1.6% over the past 10 years, is clearly well below industry standards. Our Navy personnel are so used to operating and living in inadequate facilities, that many have come to accept this as the norm. In addition to the psychology of deficiency, the Navy faces other significant challenges that are not captured in industry standards. One of these challenges is the relatively large number of historic properties that the Navy owns and the unique maintenance and repair requirements associated with them.

Historic Properties

 The Navy Chief of Civil Engineers, RADM Michael Johnson, provided testimony on Navy historic properties before the House Appropriations Committee (Military Construction Subcommittee) on March 15, 2001. As noted in this testimony, the Navy is required to treat a facility as historic as it reaches fifty years of age until such time that a determination is made that it is not eligible for listing on the National Register. Although the following facts are included in the House hearing on Historic Properties, they merit repeating for the benefit of this subcommittee in describing the facility repair and replacement "bow wave" headed toward the Navy within the next five years. There are approximately 8,400 buildings and structures in the Navy that are either listed on the National Historic Register or are eligible for listing. This includes 408 listed and 255 eligible family housing units, representing approximately 1% of the total Navy family housing inventory. Over the next five years, almost 1,900 additional non-housing facilities and 6,000 family housing units will become fifty years old and cross the threshold for initial consideration as historic facilities. Our challenge is to balance our shore infrastructure readiness requirements with continuing to be prudent stewards of the Navy and nation's historic resources.

We manage historic facilities in much the same manner as our other properties; however, they pose particular challenges because of their intrinsic historic and cultural value. We must improve our accounting practices to capture the costs of historic preservation. I will outline a Navy initiative to address this through improved planning and budgeting practices later in this testimony. Separating costs associated with needed renovations on old, deteriorated structures, or normal day-to-day mission costs, from those required as a result of our compliance with the National Historic Preservation Act of 1966 continues to be a major challenge. Two conditions contribute to higher overall maintenance costs for historic housing units: one, they are generally significantly larger than the average military housing unit, and two; they are more likely to contain hazardous materials than contemporary quarters.

Impacts of Facility Condition on Current Readiness

        Maintenance and repair of historic facilities is just one of many facilities and infrastructure issues being addressed by the Navy. The deteriorated condition of many operational facilities is hurting our readiness as a Navy. Some specific examples of how facility conditions are impacting readiness include:

     Last October, a 10-pound chunk of concrete fell 50 feet from the overhead in Hangar 340 at Naval Air Station North Island CA, hitting a heavy lift hoist below. Fortunately, no personnel or aircraft were in the area at the time of the incident. Hangar 340 was built in 1941 with a dual arch roof to house dirigibles. The last major renovation of the hangar occurred in 1975. For the past 6 months, helicopter maintenance normally performed in Hangar 340 has been forced outside in the elements. Three tension fabric structures have been purchased and erected in the parking areas at a cost of $470,000 to do continue critical repairs that must be performed indoors. Covered walkways have been erected inside the hangar at a cost of $80,000 to allow access to admin spaces inside. A repair project to remove the spralling concrete overhead and repair it with an epoxy compound has been issued at a cost of $939,000. By the end of May 2001, we will have spent $1.5 million for repairs associated with this incident and had our aircraft mechanics working outdoors for 8 months. Then we will move back into the same 60-year old hangar.


     Inadequate shore power capacity has begun to erode readiness at the Naval Station Norfolk VA, waterfront. Because of this lack of capacity, several piers required temporary power substations (referred to as Mobile Utilities Support Equipment (MUSE) by the Navy) on-site to provide the needed power. During a three-week span in February, two submarines moored at Pier 23 suffered significant casualties to their shipboard shore power cables because of problems with power being generated by the MUSE units stationed on the pier. These incidents resulted in over $100,000 of damage to submarine equipment, and required that our submarine Sailors stand 24-hour, 7-day/week watches on the MUSE units.   

     Structural deterioration of a carrier berth at Naval Station Norfolk, VA has restricted access to emergency vehicles and limited the weight of cranes that can be used on the piers. Further deterioration will prohibit use of the pier for berthing ships. The limitation on crane size has resulted in more labor-intensive methods of ship loading, like using the old "bucket brigade" of Sailors passing items hand-to-hand, Sailor-to-Sailor. This archaic material handling practice has increased ship load time while reducing readiness and crew morale.


     The Expeditionary Warfare and Naval Leadership School at Naval Amphibious Base Coronado, CA continues to experience a variety of systems failures on a daily and weekly basis. Over the past year, eight major sewage backups, twelve minor electrical fires and an inoperable ventilation system have plagued a facility in which over 15,500 future Navy leaders are trained each year. Total maintenance and repair cost for this facility in FY00 was $75,900. Industry standards indicate that the Navy should be spending $237,000 annually just to sustain this facility in its current condition.

          Taken individually, each of these problems would appear to be fairly minor in cost and scope. When it is recognized that they are merely symptomatic of the problems with Navy infrastructure, it is clear that the Navy is faced with a major challenge to maintain its facilities and sustain its readiness.


Future Readiness

            The examples provided above relate events occurring today. The age of our infrastructure is also a major concern as we look to the future and plan for the readiness of tomorrow's Navy. At current funding levels, Navy will be hard pressed to stop the deterioration of its facilities and infrastructure. Balancing the recapitalization, maintenance, and repair of our existing facilities inventory with future requirements will pose an even greater challenge for the Navy. This is the same balancing issue that the Navy is grappling with to recapitalize its ship, aircraft, and weapons platforms while maintaining current readiness capability.


Quality of Service              

            The Navy of the future includes new high technology platforms that will require an increasingly knowledgeable and skilled workforce. To attract and retain that caliber of Sailors, we must provide a high level of Quality of Service, defined as a balance between Quality of Life and Quality of Work. Our Sailors need to know that their Quality of Service is second to none. Facilities play an important role in this equation.

            The condition and state of our facilities and infrastructure are directly related to recruitment and retention. As Sailors review their career alternatives, they look outside the gate at the many civilian firms eager to hire them. They compare the working conditions that those firms provide versus that which they have seen in the Navy. To continue to retain our top quality people, we need to win those comparisons. We must furnish our Sailors with work and living spaces equal or better to those found in the private sector and provide them with ample reason to talk about a great Navy experience with friends and family back home. We must demonstrate a commitment to our Sailors by not only providing the weapons systems that give them battlefield superiority, but also a Quality of Service superiority that will be the envy of friends and family. The competition for manpower is a real one; and the condition of our facilities and infrastructure, adequately maintained and recapitalized, can be a key asset in this effort.

Navy Initiatives to Improve Infrastructure Management

Investment Strategies

        Several initiatives are underway to improve the status of our existing facility inventory. Over the past 6 months, we have developed a new investment strategy for Navy facilities that is founded on the Facility Sustainment Model (FSM). The FSM provides an improved and standardized requirement tool that is based on commercial unit cost benchmarks. The FSM is linked to current and projected inventories and determines resource requirements for sustainment, which we define as the Real Property Maintenance (RPM) funds required to keep facilities in good working order once they are brought up to that condition (C2 or higher condition code). The portion of facility investment that exceeds sustainment and improves facility conditions is called restoration and modernization. It includes both RPM and the Military Construction (MCON) program. By linking RPM and MCON together in a complete facility investment strategy, the Navy can prepare a comprehensive and credible analysis of these requirements.  

Readiness Reporting

            The Navy is also adopting a new readiness reporting system, similar to tools already in use by the Army and the Marine Corps, called the Installation Readiness Reporting System (IRRS). IRRS will replace our existing Base Readiness Report (BASEREP), a slow and labor-intensive process that is less quantitative, and does not measure the effects of varying investment levels. IRRS will allow each level in the chain of command to view specific facility investment requirements tied to each C-rating on the Installation Readiness Report. IRRS also includes a facility degradation model that will allow decision makers to know how quickly the readiness of specific facility categories will decline, depending on the level of sustainment and repair and maintenance funding that is projected. This type of analysis capability will allow us to better manage our limited resources.

Demolition Program

            One of the most effective means to ameliorate our RPM shortfall is to reduce our maintenance footprint. The Navy has been emphasizing demolition as part of its RPM program since 1996, when Defense Reform Initiative Directive #36 required the Navy to eliminate 9.9 million square feet of excess and obsolete facilities by the end of FY02. We are well ahead of schedule. We expect to have demolished approximately 10.5 million square feet of property by the end of FY02 through our centralized demolition.  This amount of demolition equates to the same amount of square footage disposed of through BRAC at four Long Beach Ship Yards plus Treasure Island in San Francisco.   

        The Navy is committed to demolishing excess infrastructure and reducing our maintenance burden. We are continuing to fund demolition through the Future Years Defense Plan at the rate of two million square feet per year in a continuing effort to eliminate excess facilities, reduce infrastructure costs, and improve base appearance.

Regional Planning

            We must place our scarce RPM resources where they will bring us the best return on our investment. Regional planning is a new initiative implemented by the Chief of Naval Operations to institute comprehensive facilities planning within the regions we have established. This initiative requires the eight Installation Management Claimants to provide a vision, consistent with the Navy's overall vision for the shore establishment, for their specific areas of responsibility and to work closely with their Regional Commanders to identify required facilities and acquisition strategies for achieving this vision. Regional Shore Infrastructure Plans (RSIP) are being developed to determine the requirements for the entire region and then to identify alternatives to satisfy them. The entire inventory of facilities available within a region, as well as those available in adjacent communities, will be examined to determine how we can optimize facility use and satisfy mission requirements. The RSIP will identify land and facility alternatives and recommendations regarding acquisition, use, maintenance, consolidation, and disposal that will facilitate decision making by the Regional Commander and the IMC. We expect these RSIPs to generate projects which, when programmed and executed, will streamline and modernize our shore infrastructure, improve efficiency, and reduce costs of operating the Navy's shore establishment.

Regional Facilities Management

        Regional facilities management is a second tool implemented to assist the Regional Commander. The Navy's shore infrastructure is now managed on a regional basis, rather than by installation, as was the previous practice. This regional approach facilitates the assessment of requirements versus assets on a much broader basis than was possible by managing installations as separate, independent entities. The result is far less sub-optimization and a more collaborative and regionally unified approach to installation management. Regional Commanders now have the authority to make investment decisions for their entire area of responsibility, cutting across installation boundaries.

    Yet another management change has to do with Shore Facilities Programming Boards, which were previously tasked with prioritizing Military Construction projects at the claimant level. They have now been expanded into Shore Installation Programming Boards (SIPB) responsible for prioritizing the entire spectrum of facility investment consisting of Military Construction projects including Family Housing, Real Property Maintenance, and Other Base Operating Support (OBOS) funding.

Cultural Resource Management Plans

To improve maintenance and repair of historic properties and ensure compliance with the National Historic Preservation Act, we are preparing Integrated Cultural Resource Management Plans (ICRMP) at each of our installations. These plans will identify historic structures on the installation and discuss any impacts to the structures caused by activity or development on the installation. In addition, the plans will examine the level of attention our historic structures will require to better enable planning and budgeting of the necessary maintenance funds. We will consult with State Historic Preservation Officials and incorporate their recommendations as appropriate.

Quality of Service Improvements 

            All across our Navy, we are eliminating open bay barracks, communal showers and toilets, and providing our Sailors with new living facilities. However, Admiral Clark, our Chief of Naval Operations, stresses that we have to get the whole Quality of Service equation right--both Quality of Work as well as Quality of Life -- to keep and retain our talented Sailors and to attract new recruits into the Navy. So while we have made some progress on Quality of Life issues in recent years, we still have a long, long way to go to attain the necessary level of Quality of Service.

            We have also made significant strides to improve Navy family housing. Through increases in Basic Allowance for Housing, Military Construction (MILCON), and public-private ventures, the Navy remains on track to eliminate all of its current 23,344 inadequate homes by the year 2010. Public-private venture authority has been instrumental in the Navy's strategy. Navy has made notifications to Congress for projects that will privatize 15% of the housing inventory in the continental United States (CONUS). Another 25% of the inventory has been identified for potential future privatization. PPV may present similar opportunities for moving Sailors ashore from ships into quality bachelor housing.   


            To echo the words of the CNO, the essence of our Navy is the Fleet, and the Fleet must remain the focal point of our efforts. Although I am a Civil Engineer Corps officer, I proudly wear the Surface Warfare insignia as a reminder of my time as a Navy Line Officer. I now support the Fleet in a different manner by providing the shore infrastructure necessary for the operations, training, and housing of naval forces and their families. It is clear to me that the condition of our facilities is impacting Fleet readiness today and will continue to do so for the foreseeable future.

            I am equally concerned over the impact that our deteriorated infrastructure has on our most valuable resource, our Sailors. As stated earlier, Quality of Service is a balanced combination of Quality of Life and Quality of Work. There are many intangibles in this equation. The condition of Navy facilities and infrastructure is, however, very tangible. Our Sailors see and feel the impacts when they are not able to perform critical aircraft maintenance in hangars due to the hazards of falling concrete; when they are standing watch on a cold pier because our waterfront utility systems are failing; when their classes are interrupted due to failing utility systems in our training facilities; and, when their spouses must endure inadequate family housing alone during deployments.

                        Quality facilities and infrastructure are key elements to four of the five CNO priorities and can be directly tied to the Navy vision; Combat Ready Naval Forces. I join the CNO and VCNO in thanking you and asking for your continued support and assistance in enabling the Navy to achieve this vision. Thank you. I am prepared to respond to your questions.


House Armed Services Committee
2120 Rayburn House Office Building
Washington, D.C. 20515

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