4 March 2013
The Arnold Community Council (ACC) has been a long-time advocate of policy change in lieu of requests for budget authority to solve problems at Arnold AFB, Tennessee. Such an approach can save precious federal tax dollars by eliminating unintended, negative consequences of legislation or regulation. The
ACC and its sister organizations have had some limited success using this approach. Because of looming, large potential budget cuts, the need for such policy change and subsequent administrative flexibility is more important than ever. Therefore, this year, the ACC and its sister organizations are advocating a more powerful and effective way to implement their policy change recommendations. Specifically, we are asking those U.S. Representatives whose districts are home to major range and test centers to join the recently chartered Congressional Range and Test Center Caucus (CRTCC). Consequently, the ACC will be advocating for five initiatives this year: 1) The population of the CRTCC; 2) The opportunity to accept new missions at Arnold AFB – (a) specifically supporting a quick lease of AEDC land to a major defense contractor and (b) providing a home for the 2013 NDAA directed hypersonic initiative; 3)
Statutory flexibility in dealing with federal budget cuts; 4) Regulatory relief to improve the productivity of our National Assets at DoD ranges and test centers; and 5) International Trafficking in
Arms Regulation (ITAR) Streamlining. Each of these issues will be discussed in greater detail in the following pages.

In 2012, Major Range and Test Facility Base (MRTFB) community support groups visiting D.C. asked
Congressional Representatives why they do not hold hearings on the health and status of MRTFBs when they are so critical to maintaining U.S. military’s technical and operational superiority. It was noted that
Congress regularly inquires about the health and status of DoD depots, major programs and MWR. In
2012, the Arnold AFB Community Council (ACC) broached the potential for an MRTFB Caucus with congressional and senior DoD representatives. The expressed purpose of the proposed caucus was to educate members of Congress on the strategic value of ranges and test centers, show the unusually high return on investment captured by those facilities and support their operations. The proposed caucus was favorably supported by congressional and senior DoD officials. On January 22, 2013, the
Congressional Range and Test Center Caucus (CRTCC) was established. Congressmen Black (R-TN) and
Kilmer (D-WA) are the co-chairs.
The goals of the CRTCC are to: 1) Support stable budget authority/flexibility for long-term investment in major range and test facility base infrastructure; 2) Provide regulatory relief for greater flexibility in supporting government and commercial customers; and 3) Ensure understanding of the importance of
MRTBs in the reduction of cost and risk in developing, fielding and maintaining DoD weapon systems.
Historically, senior decision makers have not had significant visibility into the major role that MRTBs have in reducing the cost of fielding DoD systems. This Caucus can help correct that deficiency through the review of MRTB capabilities to support congressionally directed programs and initiatives. We ask that every House of Representatives Member whose district supports an MRTFB join the caucus as soon as they are aware of its existence. Attached is a background briefing on the CRTCC.

In early February, the State of Tennessee’s Department of Economic and Community Development
(ECD) put out a request for interested parties to identify 100 acres of property for commercial development by a defense contractor that could be buffered by an additional 300-500 acres of undevelopable land. The State of Tennessee received three responses including the lease of 152 acres of AEDC property that had already been designated for commercial lease and development under USAF
Solicitation Number AFRPA-12-R-0002-01, Enhanced Use Lease for Arnold AFB, TN.
The defense contractor (who wishes to remain unidentified) has indicated interest in the AEDC property if they could center the 152-acre parcel a little further from a subdivision near the border of AEDC and either have the surrounding 400 acres be designated undevelopable by the AF or lease the 500 acres with the 100 acre industrial area centered therein. The facility would bring approximately 200-300 high tech jobs to the area, with the state picking up the tab for utility extension and site drainage modifications through its FastTrack Program with an 18-20 % match by Coffee County and/or the City of
Manchester. Roadway extension from SR 55 to the site would be paid for by the Tennessee
Department of Transportation’s (TDOT’s) State Industrial Access (SIA) Program.
In the past, there have been two separate transfers of excess AEDC Reservation property to local government entities that have resulted in huge economic benefit to the region with a resulting benefit to the AEDC operation through improved educational, transportation, healthcare, and cultural infrastructure. The first was the sale of 125 acres bordering on the City of Tullahoma to the City of
Tullahoma in 1975 for use in the development of an industrial park. The second was the sale of 795 acres, which was separated from the AEDC Reservation by the construction of Interstate Highway 24, to
Coffee County in 1977 – also for the development of an industrial park. Today, there are 446 employees in the Tullahoma Industrial Park and 2021 in the Coffee County Interstate Park. Obviously, this is an economic impact to the region that is similar to the AEDC primary mission’s economic impact and brings diversity to the region’s employment base.
The defense contractor project currently interested in AEDC is an excellent opportunity for AEDC to bring additional high tech jobs to the area while providing reimbursable dollars to the AF. The interested defense contractor wants to be able to finalize a lease by mid June 2013. This would be an aggressive schedule for the AF to support. It would only be able to be completed if fast tracking could be supported by SAF/IE and the Chief. Request that support be identified as soon as possible.

The DoD’s new defense strategic guidance emphasizes the importance of projecting power despite antiaccess/area denial (A2/AD) challenges. In addition to rebalancing focus towards the Asia-Pacific region, the guidance states that the U.S. military “will invest as required to ensure its ability to operate effectively in A2/AD environments”. The wide expanses of distances in the Asia-Pacific region, the growing A2/AD threat which requires greater stand-off distances, and the increasing need in modern warfare for fast response times for time-critical targeting are all challenges to meeting the guidance.
They all point to the need for the Department to invest in high-speed weapon and platform technologies, including hypersonic flight. The ability to protect critical manned and unmanned platforms, the ability to maintain existing air supremacy, and the ability to reach out and quickly destroy both fixed and mobile targets will all require vehicle flight speeds that fall within the hypersonic regime, defined herein as a speed equal to or in excess of Mach 5. Speed is the attribute that will enable the capability, but it is currently unavailable due to the immaturity of hypersonic technologies.
Congress, in its National Defense Authorization Act for Fiscal Year 2013, notes that the state of the
Nation’s hypersonic ground test and evaluation facilities and workforce have not received adequate attention over the years facing both threats of divesture as well as gradual decay, and is concerned that the broad developmental hypersonic RDT&E community needs renewed attention. At present, activities to support development of hypersonic capabilities are scattered across various agencies, as well as across the development spectrum. The AF, Army, Navy and OSD all have funded activities, and are overseen by the Joint Technology Office for Hypersonics (JTOH). Within these agencies, the management is further scattered across the research, development, and test and evaluation (T&E) communities. The overall scattered efforts of hypersonic development is not presently exhibited to the same extent in the area of test and evaluation, especially ground testing. With only a few exceptions, the nation’s significant hypersonic ground-test capabilities are a part of the Air Force’s Arnold
Engineering Development Complex (AEDC).
ACC Proposed Solution: Create a Hypersonic Ground Test Center of Excellence (CoE) to manage and coordinate hypersonic ground testing, lead the development of advanced hypersonic ground test capabilities and assure that the expertise of the hypersonic ground test workforce is developed and sustained. Given the existing ground test facilities and accompanying workforce, AEDC should be the location for the CoE. The University of Tennessee Space Institute (UTSI), in close proximity to AEDC, would support the CoE by providing a focused STEM educational program on High Speed Systems (see attached description of UTSI initiative) to assure that the expertise to achieve the Nation’s hypersonic goals are met. Congress should direct DoD to designate AEDC as the Hypersonic Ground Test Center of
Excellence.

The University of Tennessee, in close coordination with other UT campuses, is proposing to establish a focused educational program composed of graduate educations leading to special Certification, M.Sc. and Ph.D. degrees in Aerospace and Mechanical Engineering with Hypersonic (systems) concentration, in teaming with AEDC to support their quest to maintain their leadership as a center for Hypersonic testing and evaluation, which is an area of national priority and importance. The program will also include targeted STEM education and training courses in support of T&E and S&T and in partnership with participating DOD facilities. This program will establish partnerships with DOD and relevant industry in an effort towards developing the state of the art High Speed Systems (HSS) Testing and
Evaluation (T&E) and Science and Technology (S&T) Know-How, incorporating the latest physical and computational modeling technologies and capabilities. This proposed effort involves developing modular and portable academic educational programs that will be available at select locations throughout the nation, to maximize the educational and training experiences available to interested parties. This program will incorporate critical leading edge sciences, technologies, testing, analysis/evaluation. Due to the security and sensitivity of some of the instructional materials, including physical, models, facilities and numerical modeling resources all persons involved in the HSS/STEM program will be required to be US citizens, possibly with additional qualifications agreed and negotiated by sponsors and collaborating parties. Participation will be limited to US citizens, who would be qualified and interested to become current or future government employees.

As budgets tighten, inadequate direct budget authority exists to maintain test facilities and infrastructure in a fully operational state for the current customer base. The Center/Complex
Commanders should have increased flexibility from Statutory and Air Force Instructions to better accomplish their missions. This flexibility includes:
1.
Test Center/Complex Commanders should execute their authority cited in Paragraph
7.52.2.1.2 of AFI 65-601 Vol 1, as of 16 Aug 2012.
2.
Provide waivers to below threshold reprogramming limitations.
3.
Relief from 80/20 obligation rule (Oct-Jul/Aug-Sep)
AFI 65-601 Volume I, as of 16 Aug 2012, prescribes the funding responsibilities for Air Force Major Range and Test Facility Base (MRTFB) activities. The facilities affected by this AFI are:
45th Space Wing (Air Force Space Command Eastern Range), Patrick AFB
30th Space Wing (Air Force Space Command Western Range), Vandenberg AFB
Arnold Engineering Development Center (now Complex) (AEDC), Arnold AFB
Air Force Flight Test Center (AFFTC) (now AF Test Center (AFTC)), Edwards AFB
Utah Test and Training Range (UTTR), at Hill AFB
46 th (now 96 th ) Test Wing, Eglin AFB – Includes 46 th (now 96 th ) Test Group (Holloman AFB)
Nevada Test and Training Range (NTTR) at Nellis AFB
The AFI prescribes standard methodologies for application of Direct Budget Authority (DBA) and
Reimbursable Budget Authority (RBA). It states: Effective beginning 1 October 2005 (FY 2006), and in accordance with Section 232 of the FY 2003 National Defense Authorization Act (NDAA), the institutional and overhead costs of facilities or resources within Major Range and Test Facility Base (MRTFB) program areas are to be funded through the major test and evaluation type/related budget (DBA) accounts. RBA is typically used for Direct Costs: Those costs that are directly attributable to the use of the facility or resource for testing under a particular program, over and above the institutional (appropriated) and overhead (indirect) costs with respect to the facility or resource. This is the standard cost application across the MRTFB.
The AFI provides additional flexibility allowing the Commander to charge additional costs, as defined below:
7.52.2.1.2. By mutual agreement, investments in new or existing T&E facilities may be funded, in whole or in part, by one or more DoD customers of a MRTFB activity. This agreement must

delineate responsibilities for funding, staffing, operating, and maintaining the facility and must be approved by all parties prior to obligation of any funds for the project.
This paragraph is not actively used by AF Test Center/Complex Commanders and their test management team as the financial management community cites the difficulty in passing audits if commanders use this “flexible approach”. Additionally, the financial community stands on another paragraph in this AFI restricting charging to “single use facility customers”. The financial community’s position should not
hinder the commander’s ability to discuss investment in test facilities with customers. Paragraph
7.52.2.1.2 above provides flexibility, across the customer base, for one or more to fund any costs if they agreed to and documented before any funds are obligated. This policy is clear: The Test
Center/Complex commander, and his test management team, should use this approach when customers need the work and DBA is insufficient to cover all the costs.
Recommendation 1: Test Center/Complex Commanders should execute their authority cited in
Paragraph 7.52.2.1.2 of AFI 65-601 Vol 1, as of 16 Aug 2012.
Similarly, the funding to the AF MRTFB’s is spread over a large number of Program Element Codes (PECs) with use of each so restrictive it impacts the Commanders’ ability to best execute their mission.
Consistent with the new AF Vision: ‘The World’s Greatest Air Force: Powered by Airmen, Fueled by
Innovation’, the Commanders’ will likely increase the use of the authority Below Threshold
Reprogramming (BTR) activity allowing up to $10M in RDT&E funds, $15M in O&M and $20M in
Production Funds from PEC to PEC at their installations for the most important missions per DoD
Financial Management Regulation Volume 3, Chapter 6: Reprogramming of DoD Appropriated Funds.
Congress can help the Commander’s by temporarily doubling the BTR thresholds for RDT&E, O&M and
Production funds to $20M in RDT&E, $30M in O&M and $40M in Production PECs, respectively. Local
Commanders and their Comptrollers have the greatest insight into their missions and need this flexibility to achieve the best stewardship of their missions as a result of drastic budget challenges. This will increase the burden to the finance community but will serve the mission more effectively.
Recommendation 2: Congress temporarily increase the Below Threshold Reprogramming (BTR) authority to $20M in RDT&E, $30M in O&M and $40M in Production PECs for flexibility in financial execution during these tough financial times.
Obligation rules requiring 80% of all current year funds to be obligated by Jul will be very difficult with this year’s budget challenges. Commanders will need to hold more management reserve to execute their mission with limited funds. Historically, commanders are penalized with budget reductions if they can’t obligate funds within this window.
Recommendation 3: Comptrollers and Congress provide commanders relief from the 80/20 Obligation rule.

4.
As budgets become increasingly tight, it becomes more important for federally funded operations to be more efficient. Over the past several years AEDC has found many ways to increase its efficiency and produce more customer output per labor hour. More recently, labor hours needed to produce reports to satisfy new federal regulatory requirements have increased by $350K per year. This trend severely undermines efforts to increase customer output per labor hour. The outlook for future expenses to cover newer regulations is even more onerous.
While the intent of federal statutes is usually positive the unintended consequences on local job markets can be stifling. At AEDC, several federal statutes have had precisely the opposite effect of their sponsors’ desires. For example, the International Trafficking in Arms Regulation (ITAR) is supposed to prevent critical defense technologies from being exported overseas. In the international wind tunnel business, when this is enforced at AEDC, it has had the effect of exporting both American technologies and jobs overseas. Initiative 5 provides details for a streamlined ITAR process. Similarly, the Sarbanes-
Oxley Act (SOX) is supposed to protect investors from falsified financial condition reporting by senior officials in publically traded companies. Applying SOX at AEDC to a government owned, contractor augmented complex is completely unnecessary.
Similar unintended, negative consequences are demonstrable at AEDC for the Americans with
Disabilities Act, Family Member Leave Act and Service Contract Act. The leadership at AEDC firmly believes it could comply with the spirit and intent of these statutes in an efficient and effective manner, if given relief from strict interpretation. Since it would be impractical to ask for individual relief from each statute, AEDC proposes a solution for which it is well suited and would benefit the Nation as a whole.
Because AEDC is exceptionally unique as an intersection of federal, commercial, research, test and technology development efforts that are already extraordinarily well protected physically, virtually and functionally, it is in a position to act as a federal government reinvention laboratory with regard to finding the best ways of implementing federal statutory requirements. AEDC proposes to offer its people, processes and programs as a Beta site for testing new best practices regarding regulatory compliance. As a Beta site, AEDC would be responsible for finding the most efficient ways of implementing regulations while complying with their intent. It is proposed that Congress authorize
AEDC as such a Beta site for a period of seven years to assess productivity gains. Developing yearly reports to assess productivity gains would be the purview of AEDC, but annual progress reports to the
Department of the Air Force would be mandatory. Upon successful implementation of the program, its concepts could be used at other ranges and test centers.

5.
It is the intent of Congress to facilitate the retention of world-class aerospace test ranges and facilities in the United States, and to continue the effort of streamlining and rewriting ITAR and EAR (Export
Administrative Regulation). Specifically, Congress recognizes that the long range objective of identifying
Arnold Engineering Development Complex (AEDC) as a facility with “government program exemption” for ITAR procedures will serve US interests.
The intent of this designation as a “government program exemption” is to have AEDC serve as a pilot national aerospace test facility to explore the potential for increased international test work that would result from the rapid application of streamlined ITAR procedures being developed by inter-agency representatives under the leadership of the U.S. State Department. The means to accomplish this would be through a two-step approach.
The first step is for DDTC to permit the AEDC support contractor to submit a DSP-5 (or DSP-85 for classified work) license application as an exception to ITAR 124.1(a) for defense services and technical data, which normally requires the use of an agreement, without having to request permission from
DDTC prior to each license application. Since licenses are normally approved within 16 – 18 days rather than the 4 to 6 months required for agreements, this approach will significantly improve AEDC’s ability to work with international parties. Additionally, implementation of this step is very simple. DDTC only needs to change its current policy to permit AEDC to become a pilot program that could eventually have immense benefit to National security and the mission of our entire Department of Defense.
After a few years of validating the concept outlined in Step 1, then DDTC would implement the second step by granting AEDC a “government program exemption” authority as principle test bed and beta site for piloting, validating and accelerating ITAR and related streamlining initiatives for potential application to other Government programs and agencies. Ultimately, the Department of State would put implementing language in their regulations that allows for “government program exemptions.” AEDC was specifically chartered by the Congress of the United States to support and accelerate military and civilian domestic aerospace development which the “government program exemption” accomplishes.
Under the “government program exemption”’ AEDC would provide a notice to DDTC of each project being performed under the exemption.
This legislation will lead to increased use and improvement of American aerospace test facilities and services by international firms as well as increased use by domestic firms leading international aerospace development programs. Greater international use of American aerospace test facilities will increase the sharing of costs to maintain test ranges and infrastructure, and ultimately lead to reduced costs associated with testing at U.S. facilities, most of which are operated and maintained by the
Department of Defense and NASA. AEDC would report progress on achieving the intent of the legislation bi-annually.