Headquarters U.S. Air ForceFly – Fight – Win

Ms Kathleen Ferguson

Deputy Assistant Secretary of the Air Force

Installations

Association of Defense Communities Brief

Our Air Force….Our Future

1

Fly – Fight – Win

Meeting real-world requirements Doing right by our people

Reducing excessBeing more efficient

Squeezing costsSetting priorities and sticking to them

Making tough choices

DoD Priorities

2

“…we launched a comprehensive effort to reduce the department’s overhead expenditures. The goal was, and is, to sustain the U.S. military’s size and strength over the long term by reinvesting those

efficiency savings in force structure and other key combat capabilities.”

Robert M. Gates, Secretary of Defense Statement on Department Budget and Efficiencies, January 06, 2011

Fly – Fight – Win

Continue to Strengthen the Nuclear Enterprise

Partner with the Joint and Coalition Team to Win Today’s Fight

Develop and Care for Airmen and Their Families

Modernize Our Air, Space and Cyberspace Inventories, Organizations and Training

Recapture Acquisition Excellence

Air Force Priorities

3

“…our approach has been, and remains, to ensure we balance investments across our core functions, and focus on the combat and enabling capabilities necessary for joint and coalition warfighting at any

point across the potential spectrum of conflict.”

Michael B. Donley, Secretary of the Air Force“State of the Air Force”, September 13, 2010

…by reducing overhead and support functions and shifting resources to warfighter and readiness programs

Fly – Fight – Win 4

Efficiencies and Enhancements

Efficiencies• Reduce Overhead/Support Functions

• Numbered Air Force/Air Operations Center Consolidations• Weapon System Sustainment• Reduce Energy Consumption• Information Technology• Reduce Personnel Overhead

• Streamline Logistics• CAF Flying Training Review• Program Management Administration/Knowledge-Based

Contractors • Facility Sustainment Restoration and Modernization

• Buy More Efficiently • Evolutionary Acquisition for Space Efficiency • Evolved Expendable Launch Vehicle

Enhancements• Force Structure, Modernization, Readiness

• Long Range Strike Family of Systems • Normalize MC-12W• Sustained Procurement of Reapers• Economical Production of EELV• F-15 Radar Modernization• F-35 Simulators• Recapitalizing MC-130H/W• Improving B-52 Computer Infrastructure

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - • Increased Cost of Operations

• Pay and Allowances• Weapon System Sustainment Requirements

Growth• Fuels

Reduce Excess Overhead Costs and Apply Savings to Force Structure, Modernization, and Readiness

Efficiencies FY12 FYDP

AF Initiated $3.4B $33.3B

Dept Wide Total $2.8B $10.0B

Dept Wide (Blue) $1.5B $7.8B

Dept Wide (Non-Blue) $1.3B $2.2B

Total $6.2B $43.3B

Fly – Fight – Win

The Air Force Budget

FY11 PB FY12 PB

$170.8B $166.3B

MILPERS

O&M

MILCON, BRAC & MFH

RDT&E

Procurement

$119.6BBlue

Baseline

$119.0BBlue

Baseline

5

Numbers may not add due to rounding

Fly – Fight – Win

FY12 PB Request – Blue $

6

Numbers may not add due to rounding

O&M$45.3B -- 38%

MILCON, BRAC & MFH$2.0B -- 2%

RDT&E$19B -- 16%

MILPERS$30.2B -- 25%

PROCUREMENT$22.5B -- 19%

MILPERS

O&M

MILCON, BRAC & MFH

RDT&E

PROCUREMENT

NON-BLUE

OCO

Excludes Non-blue and OCO

$166.3B

Day-to-Day Ops63%

Fly – Fight – Win

Military Construction, BRAC & Military Family Housing

99 87

Numbers may not add due to rounding

Supporting Weapon System Beddown While Meeting COCOM Needs & Taking Care of Airmen

($B)FY11

PBFY12

PB DeltaMilitary Construction 1.3 1.4 0.1BRAC 0.3 0.1 (0.2)Military Family Housing 0.6 0.5 (0.1)Total $2.2 $2.0 ($0.2)

• MILCON: $97M increase over FY11 PB

• Eight projects focusing on replacing lowest quality & BMT recruit dorms

• Projects for initial beddown of F-35 (Nellis, Luke) & F-22 (Hill & Hickam); aircraft realignment beddown projects for B-52 (Minot), F-16 (Holloman)

• Ten facility/infrastructure improvement projects supporting commanders’ most critical needs

• Supports COCOMS highest priorities: STRATCOM HQs, TRANSCOM air freight terminal (Guam), CENTCOM dorm complex (QATAR); three joint base barracks projects

• Continues Global Posture emphasis – three Guam Strike/aircraft maintenance projects

• BRAC focus now environmental clean-up for 28 Legacy BRAC closures and 6 2005 BRAC closures

• MFH: Improves 1,300 units in Japan & United Kingdom; maintains/oversees owned, leased & privatized units; will privatize 100% of CONUS, Hawaii, & Alaska homes

Fly – Fight – Win

• Focuses resources on new / emerging requirements and funds on-going missions• Implements Secretary of Defense Efficiencies Initiatives moving support into mission• Continues increasing Irregular Warfare capability for today’s fight – builds on progress made in

FY11 to reach 65 CAPs by end of FY13• Supports 1.2M flying hours; sustains fleet of over 5.5K aircraft

• Continues to optimize flying hour program through simultaneous submission of OCO and baseline budget – balances peacetime training and contingency operations

• Weapon System Sustainment supports aircraft availability – funded at 65% (84% w/ OCO)• Pay and benefits for 182K civilian personnel – no pay raise in FY11 or FY12

• Holds end-strength at FY10 levels – with limited exceptions• * Transfers 1.8K positions to RDTE

• Ensures day-to-day operations at 80 major installations -- facilities sustainment funded at 80%• Includes operations at 2 space lift ranges – Patrick AFB and Vandenberg AFB

Operation & Maintenance

($B)FY11

PBFY12

PB DeltaCivilian Pay 11.7 11.1* 0.6Flying Operations 16.0 16.6 0.6Mobility Forces 1.1 1.2 0.1Space/Other Combat Forces 6.1 6.0 (0.1)Training & Recruiting 1.2 1.2 (0.0)Logistics Ops & AF Wide Support 2.6 2.3 (0.3)Installation Support & FSRM 7.1 6.9 (0.2)Total $45.8 $45.3 ($0.5)

99 88Reinvesting Efficiencies to Enhance Warfighter Capabilities

Numbers may not add due to rounding

Fly – Fight – Win

The Future:Managing Our Assets w/ Integrated Approach

9

Real Property as a Foundation - Adopted industry best practices - Space Optimization –CBRE/JJL - Streamlined demolition process - Enhanced Use Leasing

CE and Infrastructure Energy Strat Plans

Streamlined Work and Project Mgt - Activity Management Plan Concept - IT supports new business processes - Facility Condition Index/Mission Dependency Index to prioritize assets

Global Energy Stewards - Renewable Energy Sources - Metering - Alternate Fuels - Enhanced Use Leasing - Improve Infrastructure/UP

Centers of Expertise & Strategic Sourcing - Centralized MILCON /MFH/ERA - Facility Energy Center - O&M Reach back & Readiness services - Strategic Sourcing Division at AFCESA

NextGen IT: FOC 2012 -Centralized IT Mgt- Enterprise database- Transparent data- Enterprise architecture- BEA compliant

Fly – Fight – Win

20/20 by 2020Reduction Goals

20/20 by 2020 Goals 20% net reduction in AF physical plant by 2020 20% reduction in operating cost for remaining portfolio

by 2020 FY06 20/20 by 2020 baseline = 401 MSF

Net reduction goal = 80 MSF 20/20 by 2020 in perspective

80 Major installations in AF Average installation size = 4.8 MSF

Langley 5.3 MSF Hurlburt Field 4.3 MSF

Net SF reduction equivalent to ~16

installations to be spread across entire AF

10

Fly – Fight – Win

Housing Privatization: Goal is 100 %

Awarded/Under Const: 28,799 units

ACC II (Davis-Monthan, Holloman), AETC Group I (Altus,

Luke, Tyndall, Sheppard), AETC Group II (Columbus, Goodfellow, Laughlin, Maxwell, Randolph, Vance), AFSPC Tri-Group (Peterson, Los Angeles, Schriever), AMC East (Andrews, MacDill), BLB (Barksdale, Langley, Bolling), Hickam I & II, Hill, McGuire/Fort Dix, Nellis, Offutt, Robins II, Vandenberg, USAFA, AMC West (Tinker, Travis, Fairchild), McChord (w/ Ft Lewis – Army lead), Falcon Group (Patrick, Moody, Little Rock, Hanscom), Lackland II

In Concept Development: 16,586 units Wright-Patterson II Western Group: FE Warren / Malmstrom / Whiteman / Beale Southern Group: Shaw / Arnold / Charleston / Keesler Northern Group: Minot / Mountain Home / Cavalier / Grand

Forks / Ellsworth / Cannon Continental Group: Seymour Johnson / Hurlburt / Eglin /

McConnell / Edwards / Eielson Joint Base Elmendorf-Richardson ACC III: Second phases Dyess/Moody

Privatization Status to Date

Closed37,851units

(27 projects / 44 bases)

Inadequates Eliminated through Award

35,153

Demolition Complete 18,938

Construction Complete 15,520

Renovations Complete 8,189

% Privatized 69%

In Acquisition16,586 units

(7 projects / 24 bases)

69%

100%

Completed Projects: 9,052 units

Buckley, Dyess I, Elmendorf I & II, Kirtland, Lackland I, Robins I, Wright-Patterson I, Dover, Scott

Fly – Fight – Win

Enhanced Use Lease

12

Current Project Pipeline Values

Category Project Type Value

Energy

Solar $ 242.0M

Coal $ 118.0M

Waste-to-Energy $ 82.0M

Cogeneration $ 40.0M

Real Estate

Mixed Use $ 166.1M

Industrial $ 48.1M

R&D $ 64.0M

Hospitality $ 22.0M

Medical $ 1.5M

Real Estate$301.3M38%

Energy$482.0M62%

A:Current Pipeline ~$.78B

Targeted Project Strategy Values

Target Approach Example

Focused on hot market, high revenue, and vastly available land bases with high EUL success to date to generate surge of revenue

AFMC: Edwards, Hill (Solar, Geothermal)

B:Mid-term~$3.6B

Portfolio Expansion Strategy Values

Innovation Strategies Description

Focused ExecutionDiversity portfolio with right mix of projects

Reinvestment and Cost Avoidance Dividends

Re-invest EUL proceeds into installation requirements generating cost avoidance and cost savings measures

New Assets

Natural Infrastructure and resources, equipment with excess capacity, available real property

New Execution ModelsMAJCOM IDIQs, PPA/EUL, Fence to Fence EUL, Performance-driven support (RESS)

New Technologies Nuclear, cogeneration, algae

Energy30%

Traditional Real Estate

10%

Innovation60%

C: Long-term~$3.7B

Fly – Fight – Win

QUESTIONS?