Full text of "DEFENSE INDUSTRY VOL 3 NO1"

Volume 3 No. T

January 1967

IN THIS ISSUE

'TANT SECRETARY OF
USE-PUBLIC AFFAIRS

Systems and Project PK1MI3 ............ I

Coalnu'tor'H Weighted Average Shan- Concept ............................ f (

Management Information System* The, Ufublood of Mmmjr<mi(!iit ......... 11

II. S. Air Kom- Ky H tem Program Directors aiul/or Project Ofllccrs ......... 17

IniliiHtria] HccnritylB it NccHsnry? .................................... 32

Air Force Partiviimtion in the Dovploiimi-nt of RAIMfi .................... 3-1

DKPAKTMKNTS
About Pi^uik 1

Calunditr
R and Syiu
tlui Spt-alttu-H UoHtrum
Prot'uroiiH^nt

21
2.1

RloRiTY MANAGEMENT EFFORTS

TO IMPROVE DEPARTMENT OF DEFENSE
RESOURCE MANAGEMENT SYSTEMS

Hoc article, "PlniHiliur-ProRraiimitnH^Judgetlug Systems and Project PKIMK"

f? on page 1.

As I prepare to leave the Department of Defense, ! waul in take
this opportunity to express my appreciation to all tho members nf

industry -both management and labor who have supported (ho

Dvfniiw hul-HNtri/ JtiiUrUn.

In the fii'Ht issuo (if the 1'it.llr.khi, whieh appeared two years aj>;o
this month, I stated that tho publication was aimed at serving your
noods and that wo would look to you to help us n'uido its future
course. Your response has indned been tfraMl'yinK witli tho result
Unit our industry readership has expanded from 1,100 at the out-
sot to over it, 000 copies with this issue.

I hope, that in tho years ahead your aivoplunro and support of tho
HitUf'Un will continue, and that throufvh this parlnership Iho value
of tho publication to tho defense industry will lit* steadily nnhaiieod.

Navy League To Sponsor Briefings and
Exposition at Annual Meeting Feb. 840

"Oroans TlnliiniUid" in tlio thomo of tho 'IOh'7 Soa-Air-Spuro
sition and BriofuiKs, uponsorod by tho Navy Umjvno of tbo Unitod
Statos, and tho District of Columbia Council's lOlb Animal
Soapowor Symposium to 1m h(dd wmr.umwHy at tho Shoi-aton I 'ark
liotol, Wa-shiiui'ton, D.C., Vob. K 40.

Industry and Covonmumt will oxhibit tint prosonl and rnlurn in
tho tochnicul rosoardi and dovolopmont Hold rolatod to tho Navy/
Marino Corps mission in soa, air and HIW<U Ujmnwonlal ivos of lint
Naval Material Command will jyivo prosontations rolloi-.tinn' Ilio
Navy's latost thinking.

Industrial firms participating in tho oxposition bavo Hchodnlod 'II',
technical brieftn^H to ho proHoutod in tlio Exhibit Hall livo tiling
each morning and throo times oaiih aftornoon. Thoro will bo no
registration foo for military and Cnvornnwnt porsonnol attorulinj'.'
the indiiHtry briofniKH. AtUnidoos at tho morninjr briolinp;:i will In*
ffuests at a oomplomontary hmohooa to bo hold each day. SlmlUc
Inmos will operate daily between the Ponlajton, Main Navy Itnild-
n\K niKl tho Sheraton Park Hotel. Ken- additional information

concerning tho industry technical bri(!linj?;s contact: (Commander
Ilolmprimrd, Oflico of tho (Jhiaf of Information. Dopurtniont. of tho
Navy, Washington, ]).(/., (Area Code 202) OXford n H7IU.

For rcKiHtration information contact: District of Columbia Coun-
cil, IfiaO K St. NW, WoahinffUm, D.C, 20000, (Area Code 201!)
200-7020.

liy Mm Dcparln
of Dt'Tdimt)

lion. Uobi'rl H. McNamuru

Sci'i'i'liiry of I

Hun, Oyriifi U. Vaiico

Deputy Hi-ri'^lnry <tt' I
Him. Arthur Sylvcslcr

AftHlHlmil Hfi'i-ohify of I
(I'uhllr AffiilrH)

Col. Jiii-1 H. HIi'iihoiiH, IIHA
Dirrclnr for Cmuiminily li<

Cnl. lldwiii C. Cilmini, 1FHA

I.idmr (

I'Mitor., ...... UMr. M. W. Hnulfm'

AHHIH-, Keillor .......... Minn (!vcltiii

AHHOC. Mdltor,. .......... Mr. Hick I,

Kdlloriitl AnH)ntnnt

Ntii'innii M. Worm, JO

Tlit! lit-/- hulnntrii I
in imhlitilu'il iniiiithly liy uu< 1)
& I.idmr Diviiilon, l
Coniminiity Ki'Iailuiui,
AnnlnUint, Mi'iT^tary ol' nnlVimi
lir All'uirn). Him uf fiiiMlfi for 11
Uiin jiutilicuilnn vvnn ii|)|)riivi<u
Dinrlur nf l.ln- Huri'ini nf Ilir :

Ttu 1 ]Hii')K>im uf Ilir //((//
In IHTVM an a inrani! nf rointmil
lii'lu'i'i-ii Mm l)i'|Mivtini'iil, of 1
I [Ml] i) nni! [| ; i itulluii'i'/i'il it
anil ili'fi<iii;t- cinitnicLnr;! timl

IllllllMI'UH illllTI-ll^l. It will IK 1

u jritidi- lu induMlry coni-fnii]
Hut |mlirii>!i. )iniKrani!i unil |i
unit will iii'i'lc In (itlnililiitc Mini
mi'ialii'l'ii of Ihc (K'Ti'iiiii 1 !hiltl;i|,t

in iinlvini-; Mil'
in fiilhtlitiK

non.

Mali-t'lid In Mm llu!I,-<n>
li'i'li'il In [iii|i|ily |n>rtJncnl iiiii'l
lulu nf hiti'iv'ii to Ihi 1 liutiincj
tniinity. MiiKK<''itioiin from 1)
n'lircH'-iititllvi'H frit 1 tupii'H In

I'lTlt ill flll.lM'1' iK'lllt 1 !! lllldtlllt

In tin' Uiinincint it

Tho llullfllin i (Hutriliuti'd
chai'K'* i*arh rnnii(,h tti n^iri'Wl
nf liKltiiiti'y unit to aKi'iirlt'H of
imi'tnH'iit nf llMfcnuf, Army, Nf
Air Kiit-tv. Hi-iiut l HtM for ni|(it'H

It!' IllhllfJiNCll (o HIM HUKillt'JIH J4
Um. OAS!)(PA), H'mNl

'pliMii.', oxfnrtl
nf tint iiit
fjvcly witliiml
, MmUon (>( the

PPBK stands for Planning-Pro-
graTnminfV-UudgotiiiK- Systems. These
words have no pervaded (Jovermmmt
in the last year thut tlj letters usi-d
by themselves have come l;o suggest
u magical panacea for all managn-
ment ill.s. This is unfortunate. When
'* 11 basically good idea | H translated into
it "lm///." word, it often siill'ers from
distortion and misinterpretation. Tf it
fails to solve all problems or live up
to its inflated hilling, it i.s abruptly
discarded. Usually a critic is readily
available to pnmmmn! Um epitaph--'l
told you it wouldn't work in the, first
placn.

Tin- purpose of thlK article is to
plnno 1'1'HS In perspective hy briefly
describing it H historical antecedents iii
POO; outlining the process aw it was
^ implemented and refined from l!)(il
to liKifi; and, most importantly, de-
scribing tilt! changes which are 'being
made In it in DOT) under the collec-
tive name of Project PHI MM.

C ,, , , ,

O Control by Legislature. Tho framurs
b t of the ComitiU'Unn were aware that
ll1 " Hritlnl' iament in HiHH had

liiitoric right of the
to ruin mies in time of peace
ding l.o,$,iin own good pleasure.
Motivated by the conviction that the
American executive should lm similarly
deprived of the power to raise and
the mile power to regulate Hoots and
armies, the founding fathers expressly
provided in Article 1, Section H of
the Constitution that Congress shall
have the power to "provide for the
common defense," "raise and support
armies," "provide and maintain a
navy," and to make all laws
to execute these powers.

Thin "control by legislature" over
a single War Department Heoim;d ap-
propriate for thn small permanent
military establishment contemplated
in 17H7. But by 179H the incursions
of the barbary pirates had forced
Congress to consider the construction
of a fleet and thn managerial difflenl-
ttos connected with this enterprise 1ml
in part to thn establishment in 1798

Defense Industry Bulletin

l.Cdr. Htevea La/.nrus, USN

of tlni Deiiartinent of the Navy,

Throughout tin; l!)th ceatury Con-
ffi'fiHH continued to assort its ])rimiicy
in military affairs through its control
of the purse. The President had no
statutory authority to act on hudgot-
ary matters and, although the Secre-
tary of the Treasury received depart-
ment estimates, he was required to
transmit them to Con^re.ss without
revision,

Tho century, however, had al.so Keen
a tremendous national expansion, und
with tl! acquisition of territory, the
increase in population, and the growth
of industry had come a linger and in-
creasingly more complex military es-
tablishment.

". . . Predecessors of the so-called
technical and staff services of the
Army hecame (irmly established as
statutory institutions in their own
ritfht and created major problems of
coordination and command within the
War Department itself. A similar
trend toward a prolifioration of spe-
cialties 'ml itself in the Navy,

LCdr. Steven I.H'/aniH, SC, USN, IH
Special AHttiKlnnt to the Afuttalnnl
Kecrulnry of Dofcnac (Comiitrollor).
Urn nnvnl duties have Includod tours
in USS Dccnlur DD836 and an Itudffct
and Control Officer on the stuff of the
Commander, Cruiser-Destroyer Force.
U. S. Atlantic Klcet. He wan graduated
from Dartmouth College in 1952 and
from the Harvard University Graduate
School of Uusiness Administration in
1905 where he was selected as n Halter
Scholar.

culminating in 1842 with the estab-
lishment of the "Hureaus which crcmtod
the same kind of problems within that
Department. . . ." l

This organizational form accommo-
dated neatly to the legislative tend-
ency to control by means of hundreds
of discrete and separate appropria-
tions. As recipients of spodfic appro-
priations, thn heads of special activi-
ties achieved an almost autonomous
status. The content of such appropri-
ations was frequently established
through a process of personal nego-
tiation between the chief of a human
and influential memliCM's of the Con-
gressional committees handling the
appropriations.

Strengthening the Executive. It WUH
tht! .failure of those organ fgatinnnl
structures and management practice
during wartime that prompted re-
form. This managerial difficulties en-
countered during the Spanish Ameri-
can War led to Secretary of War
Root's recommendations of 1903
which, among other things, resulted
in tiie creation of the Olllc of tin-
Army Chief of Staff. The vast in-
crease in oxpenditurm during World
War T made it evident that hudgetnry
reforms wore necessary ami Congress
responded by enacting thti Iludgot and
Accounting Act of 1021 which concen-
trated thn responsibility for prepara-
tion and transmittal of the cxeeutivo
budget in the hands of the President.
By strengthening the executive, tho
legislative branch was inevitably ac-
quiescing to thn curtailment of HH
own power.

Throughout the li)20's and 1980'H
tho movement toward a unified de-
fense establishment grow stronger
and, as Charles Hitch comments, thn
experience of World War II finally
overcame the last opposition. It wan
also plain that Congress could no
longer oxercisn effective stewardship
over the defense establishmont by par-
celing out hundreds of discrete ap-
propriations anil hy couiiHoling inde-
pendently with dozens of snparato

'Hitch, Charles, "//. Rowan Oailhcr
Lc.cLurea in fiyntemn Sciences," Hf(iS t

military officials. Massive, world-wide,
total war demanded integrated and
coordinated planning, finding and
execution,

Although it was a major step in tin;
right direction, the National Security
Act of 1947 proved not quite equal to
these tasks and was, therefore,
strengthened and amended in 1949.
Title IV was added to the Act creat-
ing the Office of the Assistant Secre-
tary of Defense (Comptroller) and
providing for uniform budget and fis-
cal procedures throughout the Depart
ment. The position of Comptroller
was held by W. H. McNeil for 10
years (1949-1959), a record for lon-
gevity at such a level. McNeil's skill
and energy, coupled with his tenure,
enabled him to build selectively upon
the recommendations of the first and
second Hoover Commissions to lay the
foundation for modern financial man-
agement in DOD.

The Process from 1%I to 1(165.

Relating Coats to Missions. McNeil
accomplished much to bring order out
of chaos in the DOD management
control process, and the reorganiza-
tions of 1953 and 1958 further
strengthened the position of the Sec-
retary of Defense. The problem, how-
ever, was already moving beyond the
new systems and structure. The De-
fense budget was gradually rising to-
ward its current level, new weapon
systems were becoming unimaginably
expensive, and the quest for a ra-
tional method of making choices and
balancing forces was becoming im-
perative.

Congress chafed at its inability to
know what it was paying for. Ohio
Congressman Clarence Brown, com-
menting on the 1952 Appropriation
Bill, said, "... I spoaV as one of
those who is not at all certain just
what this Bill provides or what all
the items in it mean. . . ." a By 1959,
Congressman George Mahon, then
Chairman of the House Defense
Appropriations Subcommitton, was
stressing the importance of looking at
the Defense program and budget in
terms of major military missions, and
asking the Secretary of Defense "for
more useful information and for a
practical means of relating costs to
missions, , . ."

Congress was not alone in recog-
nizing these needs. Arthur Smithies,

Wolodeioj, Edward A,, "The Uncom-
mon Defense and Congrats" 1848-loas,

a noted economist, said in 1957, ". . .
Neither the Congress, nor the Presi-
dent, nor I suspect the Secretary of
Defense and the Service secretaries
have the information needed to relate
the financial figures in the budget to
any meaningful concept of military
effectiveness. , , ," 3

In presenting the Army budget in
1900, General Maxwell Taylor (In-
scribed a mission-oriented budget in
terms of six programs, and suggested
horizontal cross-Service review. Per
haps the most articulate observer was
Charles Hitch, Chief Economist of the
Rand Corporation, who crystallized
the problem in a book entitled, "The
Economics of Defense in the Nuclear
Age."

Hitch examined the method of bud-
get formulation, known as the "budget
ceiling" approach, which entailed a
process of squeezing Service budget
requests to make their total fit within
an initial overall limitation estab-
lished by the Bureau of the Ihidget
acting for the President. Ho found
that "its consequences were precisely
what could have been predicted:

"1. Bach service tmided to exercise
its own priorities:

"a. Favoring its own uniiuio mis-
sions to the detriment of joint mis-
sions;

"b. Striving to lay the ground work
for an increased share of the budget
in future! years by I'.oncmitratiiitf on
alluring new weapon systems; and

"c. Protecting the over-all HIM of
its own forces even at the cost of

"AMVA'.ms 1

, Ant/. ISM.

readiness. . . .

"2. Because attention was foriiKd
on only the next fiscal year, the sorv
ices had every incentive to propo.n
large numbers of 'now starts,' the ful
cost dimensions of which would mil;
become apparent in subset [eun
years, . . .

"It. Almost complete separation ln<
twoon hiultfotiiiK 1 ami military plan
muff.

"a. Those critically important fum;
tions were porTormi'd liy two dill'eren
tfroupN of people. . . ,

"b. Budget control wns oxerrinn
by the Kecrotary of Defence, bill, plan
ning remained eHsontially in Urn HITV
ices. . . .

"c, Whereas the phmniiifv hnri/.oi
extended four or morn years into l.ln
future, the luidgot wan projected mil;
ono year abend. . . .

"d. I'tnnniiiK wan done in (crmi
of ... outputs; ImdffCtinjv ... it
terms of inputs!. , , ,

"o. Hudgetinfv. however crtnli-ly
faced up to Mitral realities; the plan
niiiff was fiscally unreal Istie, am
therefore of little help lo Uie dccinion
maker. . . .

"f. Military ro(|iiiremont!i lendcf
to lio Htatod in aluioluto ti'Mtin, wllhnul
reference to thoir coot.'!." 4

4 f fitch, (.'Ini.rlcn ./,, "/VriWiiH Hfttkint)
fur /><!//.')<'," lin-kt'lcii: mini, /i/i. if/,.,
Sfi, /''or fitrt lift' fUitritittiinn nf lli'i\(
mine -jittintii, ni-c Itnuiil /Viii'iV/,- (i-di*
lor), "I'ri>!irnm
Atialynin mid

mtnit," (IninhridiiH; Hn)'t<nr<l
/'IVHII, HUM, )>i>, til Illi.

FIVE YEAR DEFENSE PROGRAM^

New

I. Strategic Forcon
II. General FiirpoHC FOI-CCH

III. Specialized Activities

(Include* MAP)

IV. Airlift am! Scnltfl

V. Guard and Koaervc Forces
VI. Kescarcli and Development

VII, IjOtfislJCH

VIII, Personnel Support
IX. Administration

Old
Strategic OltoiiHlvc I

ContliioiUiil Air & MltmUu
Defi'iiHe Forces

Gonei-al I'urjioHe Forccw

Alrllfl/Kenlift Forces
Reserve ami (tiuml Forci'M

General .Support

Hellred Pay

Military Aanifitniu'c
ni^^fl 81 " 1 " 011 f chnn K 8 ' HCC D01) 1'iibllcnllon, "A Primer on Project
Pit ME," Nov. 1006, pp. 34-35, available from the Office of A(,. SccreUry
of Defense (Comptroller), Room 3IJ857, The PcnluRon, Washin B ton I) ('

Figure 1,

January 1967

Now Guidance. In liMU, President
Kennedy abandoned the budget-ceiling
approach us fat' as Defense wan con-
cerned. Ho gave liiii now Mecrotary of
Defense, Kohert McNamara, two gen-
iiral instructions:

Develop the military force Ktruc-
turn necessary to support our foreign
policy without regard to arbitrary
budget ceilings.

a Procure and operate (his force at
the lowest possible cost.

Charles Hitch became McNamarn's
Assistant Korretary of Defense
(Comptroller) ami dearly stated what
watt required to translate l.lii.s guid-
linn 1 into action:

"We need an economically realistic
I'u l,u re program so that long-load deci-
sions on program components will
have a reasonable chance of turning
out to lie right. To develop such a
program, il; is essential lhal. the deci-
sion makers have before them the
total cost implication.-) of alternatives
- -not only total in the iien.se of cut-
ting across appropriation categories,
but ahio in the :temie of being pro-
jected forward over a live-year pe-
riod," n

Hitch, aided by some able systems
designers, developed such a median-
ism- the Five-Year Defense Program

in the phenomenal lime of tihimt six
mnnfhs. He also eslahlished l\vo new
organisational elements a program-
ming division to anperintend the Kive-
Year Defense Program, and a systems
analysis division to conduct analytic
comparisons of alternative inpuhi to
that program,

1*P11H. Tim mechuniMni was a three-

phase opei-iition : plamiiiiR--pi'OKTam-
infi;. The (irst phase
ff and requirements determina-
tiim--wiin to bo a year-round
operation initiated by the Joint Stra-
tegic Objectives Plan proposed by the
Joint ChiefH oi' .Staff, It was to' con-
nist of military economic .studies
which would compare atternutive
methodH of accomplishing national -se-
curity objectives to determine the one
that contrilmtos the most for a tfiven
font or achieves a j-'iven objective for
the leant cost. Today these are com-
monly called (lost-efVeetivenoMs studies
or .systems analyses,

The neconil phase -the program-
miiiK system.- -inteKnite<l combinations
of men, equipment and in.stallation.s
into program elements whose elTec-
tiveness could he nH^asured n.s a whole
and related to national security objec-
tives Tlie H-fiH bomber force with all
its resources wan one such elemmit.
The elenuMits were aKKre^ated into
the major missions of the Defense
Department. Kadi atftfregation had a
common set of purposes and could, for
decision maltiiiK, he treated as a
whole, In liHifi, then? were nine such
ajtfVi'eatioiiH or programs (I ( 'it;ure 1).

A mechanism whidi allowi^il fin-
con linuoiiH U])dat(! and change was
jirovided, and dala were projected for
eijcht years in the case of military
force!!, and for five yearii in all other
ca.'fi'H. This immense amount of data
under continuoiii! change reijuired
compuli'vi'/atioii in order to remain
manajvenble. The availability of mod-
ern data prnceiiHinjv equipment made
feanihle what olherwiiif! would have
hc'en an impo.sHihle task,

The budget proeeHH was not HUH-

I'KOOKAM STKUCTIIRi;

ir Gonoral IMirposfi l-'orcos

MANAGKMKNT SYSTEM

Cniisor Doslroyi.T l ; o rc.es

23401 (MX Destroyers
1 __

Chid of Naviil Operations

Coiimiandur-ln-Chiof, Atlantic Heel

Cruslor Destroyer Force, Atlantic Fleet

Individual
Destroyer

JU
Figure 2.

ceptablo to rapid alteration and,
therefore, remained structured in
terms of object classes, va.st acc.iimu-
hitions of inputs such as military per
sonnol, prociiremcnt, etc. It was nec-
essary to translate tin- projTiim into
1 mil get terms by means of a "torque
conversion" or matrix whidi broke
the program into various appropria-
tions categories. The accountinp; sys-
tems of DOD were also aliened with
the budget structure, and thus prog-
ress reporting related to the program
had to he accomplished by means of
special studies and separate; reports.
The programming system had filled a
vital planning need but, as yet, was
unable to serve the needs of field
managers,

.In 1!)(ir>, Kohert N. Anthony boiiiune
Assistant Secretary of Defence
(Comptroller). It was to he Anthony's
task to build upon the foundation of
the programming system and create
within DOD a management control
ny.st.om which would serve the needs
of nmnngev.s at all levels from the
Congressman to the corporal.

Project PHIMIO,

ProgroHH AgaiiiHt Plan. In 1055, the
second Hoover Commission on Organi-
zation of tlie Executive Hrandi of the
(lOVernment made a series of recom-
mendations for changeH in accounting
and budgeting procedures. Among
these were suggestions that operating
budgets he cost based and that flov-
ornment accounting lie kept on the
accrual basis to show currently, com-
pletely and clearly all resources and
liabilities, and the costs of operntiomi.
These particular recommendations
were adopted and enacted in l!H>(i an
Public LawRflU.

As late an IIK15, Charles Hitch had
reflected that ". . . Ideally, I up-
poso, the program should he eontod in
terms oJ! accrued expenditure, whidi
in closnHt to the concept of rcsourcoa
conHUined. However, the accounting
difllcultieH appeared HO overwhelming
that we did not attempt that ap-
proach. . . ." n

Finally, President Johnson attired
tlmt the pace of the Joint Financial
Management Improvement Program
be accelerated, and in a Hpedal memo-
randum nuked each agency to ". . . HOG
that the Agency'n managers tire given
tlie basic tooln they need responsi-
bility centered cost-baaed operating
budgets nnd financial roportH. . . ."

6 ffitc!i, op, cit.

Defense Industry Bulletin

Operating Costs. Anthony began by
defining the problem in order to re-
duce it to manageable proportions. He
identified two essential different types
of cost investment costs and operat-
ing costs used in DOD management.
Investment costs related to items such
as ships, planes and facilities which
maintained their identity during their
cycle of use and were financed by
means of "continuing" appropriations.
These were planned for and managed
on an individual item basis. They
were treated consistently in both pro-
grams and budget and, thus, no sig-
nificant changes were contemplated in
their case,

.Full attention was then focused on
operating costs the costs of the la
bor, materials and services required
to operate the Defense establishments.

The first goal was to achieve a cor-
respondence in terms of operating
costs among program, budget, ac-
counting system, and reporting sys-
tem. Such consistency would eliminate
the necessity for the unrewarding
process of "torque conversion," would
lay the groundwork for budget sub-
mission to Congress in mission-
oriented terms, and would create
within the accounting system the ca-
pability for progress reporting back
against the program.

In order to do this, a single entity
would have to serve as the basic unit,
or building block, of both program
and management system. This was
achieved by revising the content of
the Five Year Defense Program and
defining program elements very care-
fully. The revised program structure
is shown in Figure 1. The synchroni-
zation is demonstrated in Figure 2.

The second goal was to charge an
organization with 100 percent of the
measurable expenses that it incurred,
and to account thereafter in terms of
expenses. Such an accounting would
yield hard, actual and total cost data
to the planners working on revisions
to the program and, simultaneously,
would display to the manager the full
cost of his activity. It would, addi-
tionally, show the Congressman what
his operating appropriations were
buying. Finally, it would give mana-
gers throughout DOD the ability to
determine the real costs of specific
missions, to measure actual perfor-
mance against planned performance,
and to relate resources consumed to
work done.

While rough approximations of

these relationships could have been
made in the past using statistical pro-
rations and special studies, what was
now proposed was to derive them rou-
tinely and accurately by means of a
disciplined debit and credit accounting
system.

Basically, four steps were necessary
to accomplish this goal:
o Revise the accounts structure,
e Charge military personnel costs
to organization units.

Purify the appropriation defini-
tions so as to include only items of an
expense nature in the operating ap-
propriation.

Extend the use of working capi-
tal mechanism to encompass alt items
of an expense nature.

The Four Changes. A uniform ac-
count structure has been developed
and will provide a common basis for
the Military Departments and De-
fense Agencies to report expenses. It
is only a skeleton and each DOD com-
ponent has developed, or is develop-

ing, amplifying systems to meet its
own management needs. The basic! ac-
counting structure ties directly 3uu:k
to the Five Year Defense Program as
shown in Figure 3.

Functional categories will strrvu UN;
purposes of functional mamifi'isrn n*l
aggregate to program element. Ex-
pense elements will repluce object
classes as the basic module in the
accounting system. There will also In-
subsidiary cost systems svush as om>
for wholesale supply depots which will
subdivide functional categories inlet
subfunctional breakdowns. Riu-h
breakdowns will supplement, Imt not
replace, accounting by expense ol<!-
ment.

Military personnel costs will bn
charged to tho using activity by
means of a standard cost. Thin -will
havo the effect of costing at fclm usnv
level the largest single category of
operating resources not now HO
charged. It is hoped that DOD will bo

(Continued on 1'nyc .'!.!)

Program 37H Logistics

i i i i

7 1 Supply

7 11 General Support

FUNCTIONAL CATEGORIES**

Mission Operations

Supply Operations

Maintenance of Moterid

Property Dtsposcil

Medical Operations

Overseas Dependent Education

Pcrsonnol Support

Base Services

Operation of Utilities

Maintenance of Real Pr<>|ii!rty

Minor Construction

Oilier Engineering Support

Administration

7 11 01 02 X* Inventory Control
Points

Functional Category

Expens

e Elem

Subsidiary Cost

System

ELEMENTS OF EXPENSE**

Military Personnel

Military Trainees

Military Unassirjnecl

Civilian Personnel

Travel of Personnel

Transportation of Tilings

Utilities and Rents

Communications

Purchased EqulpnicntMafntutianef!

Printing and Reproduction

Other Purchased Services

Aircraft POL

Ship POL

Other Supplies

Equipment

Other Expense

Service Credits

^ponent identified --. Ami y, Navy, Air Force, etc.

Figure 3.

January 1967

Robert 1). Lyons

A novel procurement management
concept known as tin; Contractor's
Weighted Average Shim- (CWAS) IH
incorporated in Defense Procurement
Circular No, fi(), dated Dec. HO, il'HKJ.
This concept seeks to foster and rely
upon the use of high-risk contracts to
V motivate prudent management deci-
sions in the inciirreiico of costs, H is
si management teclmi<|uo which en-
ables the Government to identify and
distinguish between high-risk and
low-risk procurement environments hy
contractor!)' pmlH centers in a logical
way, thus allowing a more discreet
application of scarce resources. Tint
underlying philosophy, objectives, me-
chanics and mime of the benefits an-
ticipated for hoth Government and
industry will he discussed in thin ar-
ticle.

' DOI) lias made remarkable progress

in the pant live yc-ar:i in creating a
new procurement environment within
the defense industry complex. During
this period the hunlen of risk ban
heen substantially sliil'ling from Urn
Government to defense contractors
Hi rough refinement in procurement
technique;! and the utilization of more
linn Hxed-prico and incentive con-
tracts, resulting in a dramatic reduc-
tion in the use of eosL-plus-n-fixed-roe
(CPKI' 1 ) conlractn from IKJ.fl percent
of our procurement dollars In KY
I !)(!,! to !.!) pnirent in FY !!)(i(t.

f During the era of high OI'I'T con-

tracting, many administrative, cotil:
and audit conlrols wove, impo-sod on
iiiduntry iiince thin form of contract-
ing did not provide sufliciont motiva-
tion for prudent cost management on
the part of nmtrartoru, An DOD
moved further and further into the
now procurement environment, how-
ever, it became inerea.'iingly apparent
to many managers Unit our adminis-
trative practices were not attuned to
the now nituation, Thus, while encour-
aging contractor*! on the one hand to

PT agree, tit higher-rink contracts, wo, on
the. other hand, continued to do husi-
ne.sH in much tho same old way. Now
that there is an im-rame in the use. of
higher-risk contracts, it in eonmdered
feasible, and duHirablo to measure the.

cost risk motivations imposed on in-
dividual contractors as evidenced by
the mix of contracts heing performed
in a profit center and, whenever prac-
tical, to eliminate administrative con-
trols and reasonableness overhead au-
dits on those contractors who attain
a verifiable "weighted average sham"
of risk which meets a prescribed
threshold. Thin concept is based on
the premise that good management by
hiduntry properly motivated to cost
consciousness can accomplish much
more effective control of costs than
can detailed review, control and over-
head audit hy Government personnel.
Wo believe that we can rely with con-
fidence on the decisions of manage-
ment in those profit centers which
meet our prescribed "high-risk"
standards,

The objectives of CWAS, as set
forth in Defense Procurement Circu-
lar No. RO, are:

To furnish a measure of an indi-
vidual contractor's risk motivation, as

Kobcr!. I). Lyons in Director for Pro-
curement MntittKcincnt in lite Ofllee of
the Assistant Hecrctnry of Defense
(IiiHtatlatioas & LoKislios). Prior to
uHHiiming thin position in 1902, he
Nerved IIH AHHJHliuit Director for Pro-
curement and Production with the Air
Force LotfiHticn Command. Mr. Kyons
is n graduate of Harvard University
inul holds a Masters Degree in Busi-
ness Administration.

provided by types of contracts, to con-
duct his business prudently and with
maximum economy..

To offer additional inducement to
a contractor to accept higher ri.sk type
contracts.

To minimize the extent of Gov-
ernment control, including controls
exercised through IX)]) prime con-
tracts and subcontracts thereunder,
thereby reducing Government costs.

To provide a simple, uniform pro-
cedure for determining a con tractor's
assumption of cost risk that pan lie
applied equitably to all defense, con-
tractors who desire to participate hy
voluntarily .submitting pertinent data.

To provide a means for directing
audit and other DOD nuinagtHiinnt ef-
forts to those' areas whore they are
most needed because of a greater de-
gree of Government risk.

To provide a basis for determin-
ing that indirect costs, incurred dur-
ing the applicable period by a con-
tractor whose CWAS rating is above
a pro-determined threshold, arc; rea-
sonable and, therefore, reimbursable
if otherwise allowable and allocable.

The CWAS concept consists of two
basic elements:

The computation of a CWAS rat-
ing, i.e., the contractor's average
share in cost risk. Karh contractor
will have his own OVVAS rating 'for
each profit center, and those with
more than one profit center will alno
compute a corporate CWAS rating.

The establishment of a threshold
which will delineate the procurement
environment and allow more discrimi-
nation in tlti! use of DOD and contrac-
tor resources. The established thresh-
old will apply to till qualifying con-
tractors.

Defense procurement regulations
contain many references equating con-
tractor responsibility and costs of per-
formance to types of contract**. A con-
tractor having all his husinoim with
the Government on a CPPP basis is
essentially different, in tornis of moti-
vation for cost control, from one hav-
ing only competitive fixed-price busi
ness. Based on this premise, the
technique for structuring CWAS is
relatively simple, namely, measure
the contractor's risk by applying
simple weights to the typo of.
contracts being pm'formod in oach
profit ccmtor and the corporation as a
whole. Thus w<; assign a nova percent
weight to the GPPF contracts at ono
nnd oC the spectrum and .1,00 piu'cont
to compntitivo. flxcd-pricR contracts

Defense Industry Bulletin

and commercial business at the other
end, and weight those by costs in-
curred, (Cost of .sales may be substi-
tuted when appropriate.) Other types
of contracts are scaled in between.
Reasonable men could argue for slight
variations but, in our judgment, the
factors assigned to types of contracts
are appropriate.
Application of CWAS.

The CWAS technique will be avail-
able to all contractors on a voluntary
basis.

A contractor or subcontractor, de-
siring to participate, may do so by
determining his own CWAS rating
and submitting data for verification.
The Armed Services Procurement
Regulation (ASPR) provides for vali-
dation of a CWAS rating by the De-
fense Contract Audit Agency, or an
independent public accountant, and
approval by the administrative con-
tracting officer.

CWAS may be withdrawn pursuant
to a finding of fraud, misrepresenta-
tion, or other abuse on the approval
by the head of the procuring activity,
and it may be denied under any cir-
cumstances l>y a decision at the Secre-
tarial level.

Each Defense Contract Administra-
tion Services Region (DCASR) will
maintain a register of CWAS ratings
in its area and a master register will
be maintained in Washington.

Procedure for Determining CWAS.

CWAS will lie determined by the
following method :

* Determine the total dollar costs
incurred for commercial work and for
the various Government specific types

Type of Contract

Percentage
Factor

Letter Contracts, Time and
Material, Labor Hour,
Cost Only, CPFF Zero

Cost Sharing Share Line

Cost Plus Incentive Fee 16

Fixed Price Redetermi-

nable (Retroactive) 60

Fixed Price Incentive

(Successive Target) 56

Fixed Price Incentive Per

(Firm Target) Formula*

Fixed Price Redetermi-
nable (Prospective) 80

Fixed Price with Escala-
tion Non-competitive-... 80

Firm Fixed Price
Non-competitive 80

Fixed Price with Escala-
tion Competitive 100

Firm Fixed Price
Competitive 100

Commercial 100

*Varies depending on ceiling and
share line. A typical fixed-price incen-
tive contract with a 118 percent ceil-
ing and a 30 percent share would bear
a factor of 65 percent.

CWAS Computation.

A simplified example of a CWAS
computation is shown in Figure 1.

Based on this procedure, at some
point on the spectrum from zero to
100, we can draw a line and be satis-
fied that we have identified and sepa-
rated one meaningful procurement
environment from the other. This lino
is referred to as the "threshold" and
it is this threshold which will enable
us to better utilize our management

resources in the future to relate the
degree of control with the need to
control. When the threshold was de-
veloped, it was considered that n
sound threshold would require the fol-
lowing characteristics:

It would be low enough to have
a significant impact in reduction of
Government workload.

It would be high enough to assure
that contractor motivation could rea-
sonably be relied upon.

As a result of a comprehomMvo
study of 568 separate profit eentw'H
with approximately $20 billion in
Government contracts) (nidudmtf Nn-
tional Aeronautics and Space Admin-
istration, Atomic Energy Commission,
etc.) and other rationale, an initial
threshold of 65, with a discretion
band (CWAS subject to Government,
approval) in the range (if 50 to (M,
has been adopted. The OWA.S thres-
hold may bo viewed graphically mi
shown in Figure 2.

A contractor having a 60 percent
CWAS rating can bn said to have mm
of his own overhead dollars involved
with each Government overhead dollar
expended. This rationale can be rolled
upon to stimulate prudent contractor
management of overhead expendi-
tures. At (16 percent, a contractor HUH
two dollars at issue for every Govern-
ment dollar, in which crimi thorn in a
strong presumption of prudent man-
agement influence. Thus the election
of the 05 percent CWAS thruHlioW
was purposely directed toward inf.
tinting tho CWAS projrrnm on a con-
servative basis, A large percentage nf
smaller ami intermediate companion
can bo expected to qualify initially.

ended.

Multiply these costs incurred by
the approved percentage factor for
the respective contract types. This
becomes the contractor's "dollar cost

Type of Contract
Time and Material

Prior Year's
Costs Incurred

$ 50,000

Percentage
Factor

Contractor's
Dollar Kink

risk."

Cost Plus Fixed Fee

200,000

us Contractor dol-

Cost Plus Incentive Fee

300,000

45,000

ipective types

Fixed Price

'ilt by

Incentive (118

percent Ceiling, 30

ercent Share)

200,000

(15

130,000

'ixed Price,

., -. ~ .. Jiu iuutl , e .
Approved Percentage Factors

Commercial

100,000
150,000

100
100

100,000
150,000

The percentage factors to be used

$1,000,000

$425,000

in determining the contractor's dollar

$425,000 + |1,000,000 =

42,5 CWAS rating

cost risk by type of contract are as

follows ; ' '

T^J_ .

' "

January 1967

while a smaller percentage of the
large profit centers may qualify. The
threshold, of course, can be adjusted
with experience.

It should be emphasized that CWAS
is based on risk as expressed by the
preferred types of contracts author-
ized by ASPR. CWAS also recognizes
the force of price competition by as-
signing a 100 percent factor to fixed-
price competitive contracts as against
an 80 percent factor for fixed-price
non-competitive negotiated contracts.
Further, before CWAS becomes op-
erable, 35 points or more of the over-
all rating must be derived from com-
petitive firm fixed-price contracts and
commercial sales.

"We believe that the moat beneficial
results of CWAS will derive initially
in providing a basis for determining
the reasonableness of certain indirect
costs. These are, for the most part,
those for which we have previously
set limitations because of our preoc-
cupation with the CPFP environment.
However, it will he useful for other
items, the reasonableness of which are
difficult to judge as, for example, sal-
aries and fringe benefits. It should be
dearly understood that CWAS applies
only to indirect costs and audits will
atill be performed, when appropriate,
to assure that costs have, in fact, been
properly incurred and are lodged in
the proper accounts and are allocable.
In short, CWAS is a test of reason-
ableness for certain specified indirect
costs. It should result in eliminating
uncertainties and inequities, and per-
mit a more consistent and uniform
approach in the future to the treat-
ment of certain portions of overhead.

It should also be emphasized that
CWAS is applied to a profit center as
a whole, not to individual contracts
within a profit center. This is essen-
tial since the indirect expenses of a
profit center are allocated to all work
in the profit center and can only be

controlled effectively by an overall
control. Indirect expenses generally
are not controllable on a contract-by-
contract basis. CWAS is either appli-
cable to all contracts or none in a
given profit center. CWAS in this re-
spect can be described as a workload
management technique; it should per-
mit us to redirect our efforts toward
those contractors engaged primarily
in low-risk contracts.

A now ASPR paragraph 15-201.3
(b) provides direction for the appli-
cation of CWAS as a test of reason-
ableness of certain indirect contract
costs. The applicability of CWAS to
selected costs is provided in changes
to paragraph 15-205. Those cost prin-
ciples, which are designated "defer,"
are currently under consideration for
revision by the ASPR Committee, The
application or non-application of
CWAS to such costs will be provided
subsequently when these revisions are
approved for printing. Pending such
determination, CWAS shall not be
used as the sole test of reasonableness
in connection with such deferred costs.
In the event the reasonableness of a
CWAS-dcsignated cost is prodeter-
minded by advance agreement, such
agreement will govern allowability for
the remainder of the term of the
agreement.

This concept will also he applied to
relaxation of certain administrative
controls hut this will represent a long-
term effort. There are proposals pres-
ently before the ASPR Committee to
make CWAS applicable to indirect
overtime, review of contractors' pro-
curement systems, and consent to sub-
contracting. WG have concluded, how-
over, after lengthy study and some
selected tests on "disengagement" con-
ducted by the Air Force, that the
problem of over-control and, hence,
indiscreet use of Government person-
nel and money is sourced principally
in administrative documents other

65
50

CWAS Applicable
Discretion Band

CWAS Not Applicable

Figure 2.

than the ASPR. We think CWAS can
be of assistance particularly in those
areas where controls or marginally
effective Government reviews are
typically applied across the board
without adjustment to give recogni-
tion to the contractor's business en-
vironment. Without something like
CWAS, we really don't have any prac-
tical way to direct the efforts of our
own professionals to the Government's
best advantage, nor do we have a
means of insuring consistent treat-
ment as between different contractors.
Accordingly, under the aegis of a
revised DOD Directive 5126.34, dated
July 27, I960, we are planning to ini
tiate a Contract Administration Re-
view Program in calendar year 1967
to encompass both the National Plant
Cognisance plants and the DCASR's.
The Military Departments and the
Defense Supply Agency are now coor-
dinating proposals for this effort and
a DOD program manual has neon pre-
pared for internal and uniform guid-
ance for these professional review
teams.

The manual incorporates the CWAS
concept, but the application has boon
somewhat modified. We intend to
differentiate between high-risk, inter-
mediate and low-risk procurement en-
vironments. This is roadily determin-
uble in a National Plant and can be
accomplished on a sampling basis in
the DCASR's. We will use this con-
cept to query why various controls,
reviews and procedures have been es-
tablished for differing procurement
situations. If a review team finds, for
example, that controls designed for a
low-risk procurement situation are
also being applied to high-risk con-
tractors, it will make strong recom-
mendations for disengagement and
better utilization of our resources,
Hence CWAS, in this context, pro-
vides us with a very useful device for
the first time in determining why we
should or should not be doing certain
things in our field administration. We
look for evolutionary improvement in
this important management area.

We are confident that industry will
cooperate in the CWAS program and
that DOD personnel will continue to
identify other procurement and con-
tract administration areas that may
be candidates for this concept. CWAS
should eventually be iiseful as a
guideline in other DOD functional en-
deavors as it is better understood for
it is a work management technique
inherently related to risk.

Defense Industry Bulletin

Stewart Collins

Directorate for Audit Systems

Office of Asst. SeiM'otary of Defense (Comptroller)

In ;i briefing given to key officials
of the Office of the Secretary of De-
fense on Nov. 2, 1966, representatives
of the General Accounting Office
(GAO) encouraged the Defense De-
partment to take leadership in a pro-
gram for improving and formalizing
contractor estimating systems, GAO's
interest in contractor estimating sys-
tems arose from a survey of the De-
fense Contract Audit Agency which
has responsibility, under the Armed
Services Procurement Regulation, to
establish and manage a program to
review contractor estimating systems.
The tabulation in the chart below,

taken from one of several charts ex-
hibited during the briefing, typifies
the conditions found by the GAO in
its survey regarding estimating sys-
tems, Some contractors had fairly well
developed systems, while others had
little or no written guidance or meth-
ods for estimating 1 .

The GAO position was that any
contractor should, as a matter of
sound business practice, have a good
estimating system. In essence, GAO
officials stated that estimating systems
would help the contractor manage the
preparation of his proposals, and that
DOD should place more emphasis on

determining how well tho contractor la
doing' this rather than reviewing the
contractor's proposals in morn detail
than would otherwise be nturtiWHary.

Some of tho points made duriiitf' tlm
briefing were:

o Because of tho financial .italte in-
dustry has in tho outcome of HH con-
tracts, top management, as well an
tho stockholder^ should linvn a vital
interest in n well developed oatinisilJiiR
system for preparation of price pro-
posals.

e Whore the osLimatinj? procoHH in
poorly design (i (I or described, l>Mi Iho
contractor and DOI) should lict ron-
corned about what (vovormt the quiilily
of tho cost and priding ilnta f'mind hi
tho proposals.

* Proper management nliould pro-
vide that all important procedure*! jind
methods be reduced to writing and
periodically tested to assure. roinpH-
anee and effect ivonoHH, and tlial mini-
agemont polieie.1 are lii-hifr carried out
at all levels (if the organi'/atfon.
Although interpretative inn! mi~

ANALYSIS OF CONTRACTORS' WRITTEN ESTIMATING SYSTEMS

1 Company has policy statement.
Pinpoints responsibility for:

Origination of estimates.

Review of estimates.

Approval of estimates.
Provides for coordination and

communication of informa-
tion between departments.
Contains guidance for estimat-
ing cost and pricing data.

Requires management approval
for significant deviations.

Contractor A
Yea

Yea
Yes
Yes
Yea

Describes the step-by-step prepara-
tion of the proposal, identifies which
internal organization is responsible
for performing each step, discloses tho
source of the data, and shows the
various review and approval points.
The steps, of which there are 147, in-
clude guidance for the following:

Preparation of bill of material.

Segregating of make-and-buy

items.

Obtaining and reviewing quota-

tions.

Prices for common hardware

Establishment of labor operations.

Establishment of labor standards.

Basis for determining labor ad-

justment factors.
Development of overhead and
rates.

Contractor II

Yes

Very generalized
Very ft-enoraliy.od
Very generalized
Yen

Little guidance, <-,g.,
tho solo guidance for
estimated of mate-
rial IH to ufHi firm
price quotations "mi
appropriate."

YOH

January 19A7

ministrative problems under Public
,t Law 87-653 will probably continue
for some time in the future, a well de-
veloped estimating system should re-
duce these problems. For example,
estimating; systems can increase the
level of acceptance of proposals and
help the contractor determine when,
under his record-keeping system, he
can assume full responsibility for the
currency of his cost and pricing data.
Well developed estimating sys-
tems would help the contractor arrive
at the lowest possible price he can
quote in a competitive situation. In
view of the DOD trend toward obtain-
ing more competition, this would en-
hance the contractor's ability to ob-
tain work under competitive condi-
tions.

With respect to review and nego-
tiation of prices, the lack of accept-
able estimating: systems can result in
numerous unnecessary questions by
the auditor, technical personnel and
negotiators, the resolution of which
both frustrates and lengthens the re-
view and negotiation process. Accept-
able estimating systems would tend to
reduce these questions and the amount
and length of audit. This shortening
of the procurement process would, in
turn, help to minimize the need for
updating of proposals.

The contractor's estimating proc-
esses need not be explained on each
and every proposal. Instead, compre-
hensive reviews of estimating systems,
which arc fully integrated with re-

views of individual proposals, would
be a more practical way of reviewing
the contractor's estimating process.

The resultant improvement in
data in pricing proposals could help
to reduce the number and depth of
post-award audits by both DOD and
GAO.

It was emphasized that an improved
estimating system should not be con-
sidered as a substitute for a proper
audit or for compliance with the re-
quirements of Public Law 87-653.

Formal estimating systems, it was
pointed out, would not, as some con-
tractors have contended, reduce flexi-
bility or the exercise of judgment in
submitting proposals to the Govern-
ment. On the contrary, the estimating
system could be flexible enough to fit
the type of procurement and actually
give management a better basis upon
which to make judgments. Further, it
was noted that no one uniform method
of estimating was contemplated and
that each contractor could have com-
plete freedom to develop his estimat-
ing- system in such a manner as to
meet certain minimum standards of
acceptability, taking into considera-
tion such things as the nature and size
of his business, type of organization,
and method of record keeping.

GAO recognized that improved esti -
mating systems would not solve all
procurement and audit problems, but
they would make life a little easier
for everyone concerned.

Organizational Changes Effected in OASD (I&L)

Changes in the organizational struc-
ture of the Office of the Assistant
Secretary of Defense (Installations
and Logistics) OASD(I&L) became
effective Dec. 19, coinciding with the
departure of Robert C. Moot, Deputy
Assistant Secretary of Defense (Log-
istics Services). Mr. Moot has been
appointed Deputy Assistant Adminis-
trator of the Small Business Admin-
istration.

The transportation and warehous-
ing, telecommunications, cost reduc-
tion, and food service areas of OASD
(I&L), which were under the direction
of Mr. Moot, will be assigned to
Deputy Assistant Secretary Paul H.
Riley, Mr. Riley will also assume re-
sponsibility for technical data and
standardization and will continue to
be responsible for supply management

Defense Industry Bulletin

activities.

Deputy Assistant Secretary Glenn
V. Gibson will assume responsibility
for contract support services, former-
ly under Mr. Moot, as well as direc-
tion of all administrative activities
for the Assistant Secretary. Mr.
Gibson will continue to be responsible
for international programs functions.

Major General A. T. Stanwix-Hay,
who has served as the Special Assist-
ant Secretary, has been designated a
Deputy Assistant Secretary with re-
sponsibility for the functions of the
weapons analysis and readiness com-
ponent of OASD(IL), previously
under the supervision of Mr. Riley.

Eckarcl Bennewitz, former Director
of Weapons Analysis and Readiness,
has been assigned as the Special As-
sistant to the Assistant Secretary.

PROJECT HINDSIGHT
AN INTERIM REPORT

The first interim report on the find-
ings of Project Hindsight, a two-and-
one-half-year study of the utilization
of results from research in science and
technology, has been issued by the Di-
rector of Defense Research and Engi-
neering.

Authorized contractors may obtain
the Project Hindsight interim report
(Order No. AD 642-400) without
charge from the Defense Documenta-
tion Center, Cameron Station, Alex-
andria, Va, 22314. It can also be pur-
chased from the Clearinghouse for
Federal Scientific and Technical In-
formation, Department of Commerce,
Springfield, Va., $1 per copy.

Project Hindsight, as the name im-
plies, is a retrospective study of recent
scientific and technological advances
which have been used by DOD in
weapon system developments. The
study is directed toward gaining a
more objective understanding of DOD
utilization of science and technology.
Specifically, it is intended to determine
procedures through which productivity
of DOD's research and exploratory
development programs may be im-
proved.

Data for the Project Hindsight in-
terim report was complied by teams
of in-house scientists and engineers
working with defense contractors who
volunteered their assistance. Available
detailed information supports the fol-
lowing general conclusions;

Successful engineering design of
advanced weapon systems primarily
consists of skillfully selecting and in-
tegrating many elements from diverse
technologies so as to produce the high
performance demanded.

At least in the systems studied,
the contribution from post-1945 re-
search efforts in science and technol-
ogy were greatest when those efforts
were oriented toward defense needs.

t Production of scientific and tech-
nical Information utilized in weapon
systems has been substantially more
efficient when research efforts were
funded and managed by DOD or de-
fense contractors for DOD purposes,
than when funded and managed by the
non-defense sector of Government or
industry without specific concern for
defense needs,

For the systems studied, approxi-
mately two-thirds of the Innovations
essential to the successful develop-
ment of those systems were available
at the time engineering design was
initiated.

The DOD investment in science
and technology has had a demonstra-
bly large payoff in terms of the resul-
tant weapon system cost effectiveness.

DEPARTMENT OF DEFENSE

The President has announced the
resignation of Arthur Sylvester, Ami.
Secretary of Defense (Public Affairs),
to be effective Feb. 3. In making the
announcement, the President stilted
that he intended to nominate Phil (i.
Colliding, now Dey, Asst. Secretary of
Defense (Public Affairs), HH Mr. Syl-
vester's successor,

Gordon H. Tyler, who IIAH haon serv-
ing as AHut. Dir. of Procurement
(Policy Review) of the National
Aeronautics and Space Administration,
lias been selected for tlie position of
Executive Secretary of the Defense
Industry Advisory Council.

Maj. Gen Autrcy J. Maromi, USA,

has been designated Den. Ansl. Secre-
tary of Defense (Reserve Affairs), Of-
fice of Aflat. Secretary of DnfoiiH
(Manpower).

Col. Richard M. Scott, USAF, hns
been assigned as the Principal Military
Asst, to the Asst, Rtscrfitnry (if DH-
fenae (Atomic Energy).

Col. James S. DoiitfhiH, USA. IIIIH
hns been assigned to the lltmlncitH &
Labor Div., Directorate for Cnnumin-
ity Relations, Office of Asst, Hccitstnry
of Defense (Public Affairs).

William A. Ynnmi lum I'' 1 ' 111
Chii.f of Urn Kin- 1 rind MiirnM-.-ni.i:
Div., of tli Army Mnbility l'!i|iii|'i;''-
Conimnnd'H KiurliK--'' !';'> 'vl.,V- I .--
vdopment I^ilx.rator!^', l'"rl IMv.-li.
Vn,

W Curl IT Hull I"" 1 ll|lf '" I 11 '"' 11 " 1 ' 1 ' 1

10 ll'lB JKM.IHi'11 f (!|li " f ' Kl ' !ll<l 'I;'' ,'"

Dovdoinnmil Pn'i'i'n' ..... "' " |1K 'V
Armv MnMllly l':|uip>m-ul * ..h.nniml.
rr K^u-iuvli * n,'Y.-l,.|.i.'.ii
. Hi-lvulv. \a.

. Aiwl. )n'i n-rmi ..... I
(! ,,mnmiHlnft.lH'll.M. Anny Kli-.-li-m-
Proving (rrmind, Furl llii'i.'InirM, An.".
Cnl. Chi'HtiT A. Hull Jr.. Ita-. l.t-.-im-
Die., Army Mlci-lnmir I'M-vI

The following 1 asHi^mnonU hnvn
been made by the OofciiBo Supply
Agency:

Col. Cloyd L. Ahney, USAF, lllr.,
Procurement & Production, Ilisfi'mw
Industrial Supply Center, Plilludclphlu,
Pa,; Col. JiuncH 11. Knot, USAF, Oil'.,
Commodity Procurement & Prmhic-
tion, Defense Fuel Supply <, 'enter,
Alexandria, Va.; Cnl. I'Yancin P. Fit*/,-
gerald, USAF, Dir., Prociiroiwint &
Production, Dcftmso fiowmil Supply
Center, Richmond, Va.j Col. Kcnncfli
A. Young, USAF, Dip., Technical Op-
erations, Defense CoiiMtructiiin Supply
Center, Columbus, Ohio; Col, Robert
H. Lmld, USAF, Comimmdor, Dufoiwfl
Depot, Gffdcn, Utah,

Col. Fred Cnplo Jr., USAF, linn
boon named Chief, Material Maniitfct-
mont Div., and Col. John W, KoliorlH,
USAF, hns boon named Chlof, Air-
borne Systems Div., of the DcCoimti
Communications Agency Planning
Group.

DEPARTMENT OF THE ARMY
11U '"-'- Tr., hft

MH M. Koolti'ii,

Col. Clliil'h'H S. .liililimm Jr., Inn l-t-.-rt
liplM.ildi'd ClilH', Krvl.-w X' A nuh .!'.
Div., Phiiiii & Pruiiniiii' 1 lh "' ( l"' 1 ''.
Onii-i' of LlH' Clili-f <f U'-"''i".li A P"
llt'tll.. Di'puilnifnt "f !tn i AntiV,

Tlic futlmvini; ln
kt\v putilii willi (In-

liani Minlun, lirp. t'lti"' "I
OjicraUniui, mill Cnl, R -I. Ili
Dir, uf ( NiiiiniiiiiiriiliiMi;; Kni-r

ihil.ii'!! mi !MP, r."iniii!iu.!.-t,

Antiy Wril|iini!i I'Miiininntl, H'"'^

"\Vtl>

Col, Paul It. Sht'lDHil will
Don. Div. KtiKiiifi'i, l.nv.r
nhmippi Viillcy Hiv,, AIHIV f
Miiffiiii'i't'n, iiiul .Si'cirtiH'.v, Mj
Hivi'i 1 ('iniindiwltiii, with lii-itil
at Vic

Tlic

IHHUI iniulc hy Hits Anny ,Mtr=-j!.- (*t-nf
inand, Hrdnloiu 1 Ai^'inil, lluntnil!i\
Alii.:

Col. Jnlni T. O'Krt-fi'. lijw. Hl Af>5(
ant to tin? C(iinnimn|!nH I;-IH-I! cf M *
Amiy Minnih' C..nmi;uif|; Cul, Jtnnt
N. Lothroi), 1'mj.Tt Mmm^,-?, HW
Wi'iipon HyHlcni; 1,1. (!. |-:*| Kuittl.
Pnijcrt MiniHKi'i', iVi'^hii.M Mmni^
HyHtom; I,t, ('id. Arthur .. I miKr
Jr.. Projdct ManiiKcr, hVij/rnibl Ilwih^
tic MlHHllo HyuU'in; niM M, r,|, HllHrrl

W. I'llWl'll, IH'VV |||-||1|1V !M ){ tM'

t-rifi'dl. Um! (-..mUt
tcrlfitR f, IlwltHrs |ii r

of Hit! Anny Mlimilr r^

cui-oinitnt A l'nnlurtli)ii

vlcn Col. KiiKi'tu- J. MHH

DEPARTMENT OF THE NAV

Thi' fnllnwinir ii-r.iKlDiii'iit'i |i|
i'i-ii nimli- nl "i 11 '' -' Wivni Nlitiiya

dipt. H. W. MI'h.- Jr., 1'jHiln, f,
llii-i-r; Caul. c;. It, .Iniif't. 1'luuii.
lliri'i 1 ; C)i|il. .'. A. 'i'"l. ' 'i-u-.l i u.-i;

DEPARTMENT OF THE
AIR FORCE

t'til. Wiild i H, i iilinfri in !,,o t.s

IlilfiK'il I'll "f UK' Tlt:ili II! 1*

JMI.III MI. .'<liH f : f'.il. M.ivi.t V Mill
Tut .liitii-pti I, t mu|il.L-|t *..*<- It

,. .I;;,!-', I .', I'. 1- t-'\ ' 1' il I IM.illJ'

HIC. ;:ju< i- :;\ ;\--n-.~ Pi 1 . 1 . A h I'M

C<i1 \ (in -i 'I li Ilittl-i, n **- Is

r'tii-f, ltt>!'5 !*- - '-ii-j' !'i'. , A-=t I -I

1 )i( ,'i'!li,-'J *'.|t t ,ti 111..! I'-.l,''^ ' 'Oil

\Viii- M IVM..I-"., ,U II. nM-

I'll] Vl-rili'tt li I Mf !!''! I -v: 1 r , } t
if'"'! n-- 1, 5^ AM* 1-"- ? ,'1l(

riiiin.tiM.', I'M"'! 1 1- ' '-'' if "t 1 ^'%tl f 'i

TRATCOM
Will Movt* to Arixorut

by
lUdm. T. J. Rudden, USN

No longer does a top manager have
to make decisions based on intuition
or ancient history. Now a wealth of
projection techniques and automated
data processing systems bring real
time information to his finger tips.
He can now be the leader of his or-
ganization and make decisions based
on timely, accurate and reliable infor-
mation. The purpose of this article is
to show how the Headquarters, Naval
Material Command (NAVMAT) uti-
lizes management information systems
to manage its business.

The business of the Naval Material
Command (NMC) is to provide mate-
rial support (ships, weapons, aircraft,
etc.) to the operating forces of the
Navy and the Marine Corps. These
forces comprise the world's largest
and most powerful Navy with about
1,000,000 sailors and marines, more
than 900 ships of all types with no
two precisely identical, and about
8,400 aircraft of 235 different types.
Our missions require a highly mobile,
world-wide, changing mix of weapons
and equipment which can be tailored
to meet any situation such as existed
at Lebanon, the Cuban Crisis, and now
in Vietnam with a long-range flow of
material support 7,000 miles across
the Pacific.

Some of our weapon systems, such
as a ship, have a long life and high
investment. Some carriers on the Viet-
nam station are now in their third
war and older than most of their
crew. These long-life systems must
keep up with advances in technology
to be responsive to new and changing
requirements. A major fleet unit like
a carrier has in it more material,
more different kinds of things from
more different places than any land
vehicle, any aircraft, any rocket, any
guided or ballistic missile, any arti-
ficial satellite, any space vehicle, or
any other vehicle made by man. As
just one example, the attack car-
rier U.S.S. Forrcstal is about five city
blocks long. It has more than four
acres of deck. It is abo\it as high,
from keel to the top of a mast, as a
25-story building. It displaces about
78,000 tons fully loaded. It took 62,-
500 tons of steel, 200,000 rivets and
2,400 miles of welding. Yet, it is a

high-yield investment in national se-
curity. It is highly mobile, an "instant
air base" almost anywhere we need
one with a speed in excess of 30
knots. It can launch 32 planes in four
minutes with no question of national
sovereignty or land base rights.

Navy material requirements are
unique. We must operate not only on
and under the sea but also over the
beach and in related land operations,
and also in air and space.

Our business of support to the op-
erating forces is big business. NMC
spends between $10 and $11 billion
per year which is about $20,000
every minute, around the clock,
around the calendar. This is about
two-thirds of the total Navy budget
and about 12 percent of the total Fed-
eral budget. Out of every $100 paid
in Federal taxes, $12 goes to NMC,
The supply inventory for our forces
is over $9 billion, while the inventory
of real estate (four and one-half mil-
lion acres) and property and facilities
is about $33.6 billion.

The management information en-
vironment includes the Navy's setting

RAdm. Thomas J. Rudden Jr., USN,
is Deputy Chief of Naval Material
(Programs and Financial Manage-
ment). He has served with the Naval
Material Command since 1964, first as
Deputy Commander, Antisubmarine
Warfare Systems Project. Later he
was given responsibility for develop-
ing the organizational structure and
concepts of operations of the Naval
Ordnance Systems Command. He is n
graduate of the U. S. Naval Academy,
class of 1939.

in the framework of the Federal Gov-
ernment and the information require-
ments of the President, Bureau of
the Budget, Defense Department, Sec-
retary of the Navy and Executive.
Assistants, and other executive de-
partments and agencies whose work
affects the Navy including the Con-
gress and the General Accounting
Office. In addition state and local gov-
ernments, trust territories and foreign
countries have information require-
ments which must be met. A multitude
of laws and regulations also generate
information requirements, Manage-
ment information systems must pro-
vide for these requirements.

The Management Organization and
Philosophy.

The Chief of Naval Mal<M'Uil
(CNM) commands and manager fiix
systems commands (Ships, Air, Sup-
ply, Facilities and Engineering, Onl-
nance, and Electronics) and managoi'n
of twelve projects, such as the Anti-
submarine Warfare Systems ProjoH;
and the Fleet Ballistic Missile System
Project (Polaris and Poseiden) to
mention two well known projects, Fur-
ther, in this complex there are about
560 field activities (laboratories, nhip-
yards, depots, etc.) and about 370,000
military and civilian personnel in
the headquarters and in the field.

The systems commands have tln>
technical and engineering expertim 1
of the Navy, They provide tin-
technical support to projects in-
cluding some they have ostablinhed
which are of lesser scope than the C!NM
projects. A problem in this connection
is to preserve these technical resoim^u
and not disperse them among project
managers. It is necessary to strike
the best balance between the ucicdn
of the project and the capabititie.i of
the commands.

In a very real sense, NMC can he
equated to a corporate complex. Tlin
six systems commands are the tech-
nical managers for the work for wliidJi
they are responsible, Viewed in thin
manner, the CNM and his staff (NAV
MAT) act as corporate hoatlquarterH
and, as such, manages the mamiffOi'H,
NAVMAT is a management and con-
trol organization. In this role it tlen
together the systems commands by :

Allocating resources to them--
resources management of manpower,
real property, weapons, services, mil-
terials, supplies and funds.

Defense Industry Bulletin

A ifiiiir ti);it planning and pro-
comprehcn-

. .

* S-tnujs: KU;I!:I and objectives for
:,'Mr a;' a ivln.lf.

.i't.ui'hi'di/ing ;ind testing the
.,!' 'ju;i< y of ii]i])a.ift?nir'iit systems.

.V-Hti'inir tlm rout rat ting and
[.;-, ^ ijr-'ni'-nt iiulidr-s ar developed
,-iTL'i ;|jpl!>.i anvj.,s the board.

Ifi-tirint.! 1 that dm>lopment pro-

.t'jsi!, r n:>'''i our iiH'd.e.

Striking the best balance between
".}",-' )!>'!; <>f sy.s terns commands and

ter incentives, and that it shifts risks
from the Navy to the contractor, as
it should do.

NMC Management Information Sys-
tems.

logistical programs

In ,unnn:iry, the CN.M controls the
';.:i!::tL-:<-ni.-m operations which govern
t'r." t.vhnioaf functions. Ho does this,
!> i'.!t-,-iJ!y, by policy enunciation and
"Nfru-c.--m.--nt, KS fa billing defined ccn-
f-r-* <.f authority and responsibility,
thrush planning, and by acquiring
s.-'>-"i information for decisions.

T XAVMAT headquarters man-
r.t,'.-nifiit structure is lean with a staff
<>f .l.v^ deputy chiefs (Planning and
rinanrial Management, Procurement,
I^u-Ionmont, Logistic Support, and
" ni * Organization). The
functions of planning,
iff, directing, controlling and
ing are carried out in detail
t-y th<^ fi VP deputies. Their titles are
'^[iarmtory of their functions. They

!fn rat V n ,* hc CNM '"Basement

t>iinV,,-ophy that the role of the top

'""uto create an environment
all subordinate levels of

can work moat effectively
"to leave lower-level matters at
<.'**-i -level management. This "hands-

Lilir/V'Tu'! 1 ' )MIos Phy is also

1 ' .1 to the administration of manv

'"mrac t.s with industry. V

Everything that a manager docs
ultimately comes down to decision
making, and the science of manage-
ment is the art of organizing facts
for the decision -making- process.

In the management business facts
are like ammunition to the infantry
and like gasoline to the aviator. With-
out facts operation is not possible and
the organization and the assimilation
of facts is the area where the good
manager exercises his greatest ar-
tistry.

The major leap forward in man-
agement technology has been in the
business of assembly and retrieval
of facts. The old-time managers used
to keep everything in their heads, but
no more. The complexities of manag-
ing NMC requires formally organized
management information systems
both automated and manual, which are
geared to providing managers at nil
levels:

Information that will help thorn
assure that resources are obtained and
used effectively and efficiently in the
accomplishment of their objectives

Data to support program pro-
posals and requests for funds

A means of assuring that stat-
utes, agreements with Congressional
committees, and other require^ nfc
originating outside the BOD re.at ,g
to resources are complied with

e Information that in iionwfuii'y 1
formulate objectives and plnnn, moni-
tor their execution, and isolul.' pi- |,.
1cm areas with a factual \n\n\u f,,,,
corrective action. The (aw of (In- (. x .
ception applies Intro, namely, roncm.
trato on thosn arniM and facdl.4 \vliid]
are above or bolow planned perform.
ance.

NMC now han 200 aulomalrd data
processing ninnaRemi'iil. in formal Inn
syHtcma with 2,BOO rcporhi and
larger number of manual iiyiilrirm t\l
headquarters to diinblo it:i inainiKiu'.'i
at all levels to carry out. (In-ir r-'iijMin-
sibiHtioK. Data pi-ont.'wtinir IUIM been
contralixcd at the lirMidijiiarliM-ji li'vH
in the NMC Support Activity. Tin-ill

are 300 iicnjile in iho Data I'ro f^r... r

Group and 1!) coinpiilcrii. An <
of a managnniont infoj-inatlun
handled by thin group in ih,< M<:ON
(Military Conntrudtion) Kyn|i'in of |.] ]( .
Naval Facilitin.s Kim-iiin'rln,.' (:,.
round. This Hy.stein collccl.'i rcui| ;1 for
new construction, rcllni'lji work in

plfico, reflects ral nniporly lm lory,

and provides input into Uu'. Inhrriitcd

Development of formal dutn nyn^im
hns buon a lnw anil (tvohKiomn-y |inii'.
OSH within thn Hyutrnia <?i>initiaiMlii nnd
Project inanafforofllciuH. Initially in nm i-
al .systems, Bupportnd by Inrfrn'rlci-lnil
orgnnixation^ lualiitiifn.'d tlm niMl^itd
flnanclul rn,r,| t , n,ml,,,d tn ,, t .
orate our varioun ocjrnnl/utlonu. H y .,-
toras wore dollop,,,! in mi| , |lnr , , lf
flpjiciflc AuHitimm and op,ra,l ,,i Jipl ,

, 0l V^ mi ""W' nu 'l-''''"tr.,.

no.,

notj (io fte

.... must know, and w e
^'_'ow in detaa am , , n we

ha r J ^ n ^^ f free

t t ] t at ' mU a , tes *
inat U Provides for het-

January 1967

(1 the oarly use of computers reduced the
clerical task anil provide! more i n f or .
mat.on faster. Tin, management proc-
ess, lH.WOV.M-, required the redaction

of voluminous reports to meaningful
summaries for uso i n the dncislon-
making process. Again, this was p nr .
formed by manual clerical effort

Within the last livo years the intro-
; h "* I( ' of more rnflll(M , , ommit(M .
Hardware and software has brought
about data system development pro-
<!* "in entire -span of management
"'Ports in support of a ,mrUci,Ir
function. I,, Hmil(! cases integrated
<Iata systems have been developed
producing management reports for
several functional areas and utili/i,,,,
"igle point of entry (automatic feed-
ImHO of data from functional areas
to <-ontrali'/od information proeossing
Speeilic oxaTnples am the- Industrial
Naval Air Kl.al.ion at Manila and
the Itoston Naval Shipyard (develop-
ing Management Information System
for Shipyards). The complexity of
now weapon systems has generated
the need for tremendous improvements
In system techniques and ability to
"'andlc the increasing volume of asso-
ciated data and management informa-
tion.

The Department of the Navy's plun
for introduction of automatic data
processing equipment, us outlined ini-
tially in H10C3NAV Ii.Htriuiti.ni P10-
1fl2.7 of Ajirll IB, ijjfio, ,, Il(1 ll(lft|]
Nmoly followed in tho mochani/ation
"I data NyntoiH within thn NIVTO
Htiiirnfl (-nwMKiB) of this plan nill,l
for

9 Tho evaluation of our initial
autonmtto data pronoHHiiifl; n(|uipm 0n t
iiiHtallafcionn; nxtnnion of early rjf.
[inrinn,;,. developed to all levels f a '<-
tivitieH.

* An awiinimiHH of the full potential
"f automatic data procoHHing.

* A Hhift of application emphasis
t<> the areas of planning proKram-
mhiK, HdiedulinK, nte., in addition to
tlui (loinmoii u(! Htomniinp from re-
duction of clerical nffortfi.

* A Hhift in emphasis to more con-
tntlly developed programs in the de-
"iffn of moi-e optimum maiuiffomnnt
information syntom H utili/.iiiK oporn-
titins research techniques

* A maturity of hardware (third
ffoneration computers with improved
input-output capabilities).

* Thn development of an overall
Navy plan to Urinj? about the eom-

c transition of all resource* to a

full complement of information sys-
tems and hardware-.

Because of complexities in data
ml m onnat.on systems ( i cs l gl] Jiml
LHe |,,ffh COHt8 invo | vw|( th(J NMC

not uchievoil all objective, of Sta ff e
fi (JOMB). However, P ro R ,,,e fn
systems dosi,, aml lmr(lwju , c ^

a I, / ml r tca that co ">Plote

ach. vomo.it of Stase B objeotivL is
feasible.

.1 lie requirements brought about bv
niph-xities of modern weapon sys-
tems have fi-enerated the aood for u
KTeater decision response capability at
each management level, The ouputs of
nuliVKlual information sy H tnis dnvcl-
f>l>ed by eompmients of the NMC nerve
intennediati> decision levels and ciil-
minato in nianaKement-by-exception
''(""tin ( .- con.lucted through a com-
plex of management cenl: ( >rH. The
CNM j-oviWH the (-ffnctivonnHs of tbe

Manaffonumt Information Center
(MIC) through information provided
manually by the complex of miters
mippm-thitf end]! niajor maaafrement
level. Similarly, the commands anil
project manaffors nwittw tlm eft'ec-
tivmioHM of thir programs in man-
iilfonndit information cenU^r.s and, in
addition, screen written reports, corre-
spondence and other information
Mows,

The Management Information Center.

Defense Industry Bulletin

Tho information system currently
.supporting the ONM is determined by
requirements generated for the weekly
meetings in the GNM MIC. These
niecttings are chaired by the CNM and
attended by the senior representatives
of the first oi-holon line components
of NMC. The Special Assistant to
tho .Secretary of the Navy and/or a
representative of the Office of
Management Information are also
in attendance. Tho format of these
meetings cycles a status report from
wieh of the major first echelon line
components each month. In addition,
the Management Information Divi-
sion provides a series of koy indica-
tors on the overall status of the NMC
to alert the CNM to possible danger
HiRiiH. The information base that sup-
ports the center is built on existing
information sources of the project
managers and commands. Some of
this information comes from mechan-
ised systems but tho majority is tho
result of manual efforts.
The MIC itself has a capability for

vicwgraph and slide projection, Iflmm

movies, conventional or closed circuit
TV reception, conventional charts dis-
played on sliding panels or in perma-
nent position and u ] arff c magnetic
map for world-wide location of NMC
interests. The slide capability provides
for random access of fifiO displays.
Figure 1 shows the NMC MIC.

At the MIC the goal is "instant"
management information. No matter
what questions arise, or what infor-
mation is needed, there is usually
enough expertise and enough experi-
ence on hand to answer questions or
pi-ovide information on the spot. Them
is no delay in the decision-making
process while research is done, facts
and figures chocked, etc. Thorn is an
instant exchange of management ideas
and instant consideration of multi-
ples and complex interfaces among
and between the headquarters of the
NMC, systems commanders and proj-
ect managers involving overlaps, non-
'""taels, conflicting requirements or
imoritios, etc. Instant; management
l<:iHion making is based on sound
m formation and good communication
with all pertinent factors considered
There are no study groups, lengthy
exchange of memoranda or buck-pass-
ing. There is no procrastination.
Everyone knows exactly who is in
marge, who bus principal action, col-
lateral actions, whoa, where, why,
how, etc. People in specialised amis
get exposed to the "big picture" and
how they fit in at these meetings. If
our now A~7A aircraft requires ao mo -
thmg special in the way of facilities
construction or equipment, the respon-
sible people know about it immedi-
ately. There are no "surprises," and
there is better integration and bettor
coordination. Tho CNM management
problem is a totally interrelated and
interdependent end product, namely,
the material support of the operating
foi'ces.

Specific guidance has been provided
to those who present management re-
ports to the CNM in NAVMAT Noticn
50fiO of April I, lOflfl as follows:

Management reports made to tho
CNM should address any activity,
event, or condition which has the po-
tential or has already increased total
program cost, delayed operational
availability, delayed significant mile-
stones, or degraded performance.

Clearly defined plans, schedules
and objectives should be the basis for
portraying progress, for evaluation

of accomplishment, and for uncover-
ing current or potential problems.

In portraying 1 information, the
principle! of management by exception
should be followed. UmiecoHiiiiry de-
tail (clutter) should be avoided by the
use of summary information when-
ever it accurately reflects the iletJiiled
facts.

Where comprehensive coverage i
being offered or required, selected
visual aids should provide a means of
addressing each of the bash: manage-
ment variables, i.e., performance, cost
and schedule,

Originals or reproductions of
graphic aids of .subordinate manage-
ment information renter or focal
points are encouraged for use in Hie
CNM MTC to the maximum extent.

Kach systems eoininaader, deputy
chief of naval material and project
manager should eontimie lo strive for
consistency in information presented
and uniformity of methods and lech"
niquen of presentation*!.

Basic to the whole concept of per-
formanco prosimtation and appraisal
during management reports is I In;
continuing comparison of actual per-
formance with the relevant plan,
schedule, or objective.

Many of the reports made in the
NMC MIC art! repented in the .Secre-
tary of the Navy's MIC ami the Chiof
of Naval Operations MIC. Tim deci-
sion as to which reports tiliouhl 1m
presented are made during Mm
Wednesday meeting of the CNM MIC.

The CNM has an established ;ichr'd-
ule of management information meet-
ings, lie has a daily stall 1 meeting
except Wednesday, with hid deputy
chiefs who report briefly on major
problems and siKiiiflcmit upnnnfiiK
actloiiR. Guidance in K iven by the
CNM with particular emphasis on
actions expected that day. Mi K r j.
day, the CNM holds H meeting with
the System Commanders Policy Conn-
oil, a separate meeting with Mm
Project Managers Policy Council and
usually with the .Secretary nf Ui<.
Navy. In addition, he meets frw|umly
with the Deputy Chief of Naval
Operations for Logistics when they
iron out problems between tho umir
and producer sides of the
house.

Niivy'n

Frequent meetings with industry
round out the maimgemont infoi-inn-
tion available to the CNM, Th part-
newhlp with industry is indispoiwiblo
to accomplishing the NMC minsion of

material nu\>\nn i- " i

Mnnttgi'iiicnt Inforiiinlioii S.vnlriiin
Plans

We i-mmiil "land ullll i "ii" H'' 1 ' 1
,if mmmgeini'iit iiifiinnnlinii, \Vi-nni.1
coiiUnue tn pn-!in llit> ntntf uf Hi.' ;n(
in maiiii|'.vnn'iil inftinnaitnii r-y .1- "> 1;
)icii'ncc:i. An In

I lie I\lllllH|',i'H"'"l Infnnnitliiiii lM\i i"M

of NAVMAT fur lliix pun'"- 1 ' ; lltf '

devi'lopiiif,' nn Advanrrd Mini:U!(-n-ti1

Infnriiialion Syiih'in, M">t nminip-

men) dala iiynli-iiii: w-nil,- ni Un- ];i ,. ; , (

Illinlwai'e iilnri' h-v<-l. I-'rw. if :tnv, ,,..,,,,,

fi ..... linn HlWlhvly a' tin- \--\'-\ "f
.'ilratepjr iiiaiiunritn'iil il.'i-hiini inn!
injv. Wi' aiv liyliif: ID l>ui!t -.\ l.'f
level niiiiinjji'iiii'iit in I'm unit inn i , .!- n>
Among ilii tci'liniitui- 1 will I"'- ^:in:ii!.t
tin] i of nlliTiiiiiU'r 1 ', niii.ii'tltiv !i*ui
dei-tnidii lonlr. If wr in-- -.nn . ,-fui, -.'.
can foreciiiil mir pinlilrni'i \V. * .-,n
nee tin-in nuiiini; ln-IWr tli'-v in.- ")>

|l>p (if 11:1, l'.l!::iillly \V.' 'rt|.Hl!i( '''(I! Uii:;

mi "Marly Wfu'tiini 1 . ''ni'f ' ';*)n^i* >
Avojiliun't'" Sy.'ili'in.

Tiled' i;i ii !.|'i'j(lt' tn'.'.i f.. -.!i|.}> >i!
(lie CNM itll'l III;. tlrjUltii' i V,i!h ;l!,
Advaili'i'd Miinni^'iiii'iil lof'*! titssf "in
Synli'in. Thin nf-d wit'= Mi|i(t..] i. .| !,

* it

iiiK and iliriTiinj...

lt i.|,MUM ,,. lt

NM(- iiyfitt'imt,

It Will, HlfH-fn
''"'"'"'Ill'd Wllh !l '

Infnnimilon |ir<>ilurt'
K'W liy (he <(H'ni

under I'niili'iirl f<n ||n> t'NV>

Irat'lor'ii limliticn I'.'iiriin).'.

pl'DVeini'iit wii'i iLi-crii'iiuy iHiit j'.-i it.;.., .?,,,-,.

and lilsifi'it Illi'i.,- pi Jnri|iti-t. iih'l v, :!},- !.-..;,,!

llienl ; ,, isj ,.. ,.

* The iiViilnn iim:>t |it-.t ".^i-^; i. M, ,- ; . , i

to the niTimtpll'-lHiii'oi ><( th" >i>>.:> .;>,-. ;>!..;, i

of Ihi' CNM. , ,.'.

* II. liilliil Id- piiimnih v^-fi'Uis-iij! Hii-:.
i |i

.JMif III!' I'N'M Ul1 tlto ^.Uii.it (i.-..^! o.-

V A

UM. CNM MIR

The publications listed below may
be obtained at the following ad-
dresses:

Government Printing Office
Publications

U.S. Government Printing Office
Washington, B.C. 20402

Research Reports

Authorized DOD contractors and
grantees may obtain these docu-
ments without charge from:

Defense Documentation Center
Cameron Station
Alexandria, Va. 22314

Others may purchase these docu-
ments at the price indicated from:

Clearinghouse for Federal and

Scientific Information
Department of Commerce
Springfield. Va. 22161

Government Printing Office
Publications

MILSTRIP, MILitary STandard Re-
quisitioning and Issue Procedures,
Change 13, Aug. 1, 1966. Contains
changes to MILSTRIP. 1966, 172 p.
Catalog No. D 7.6/4:M 59/ch.l3. $1.25.

UDT&E, Research, Development,
Testing, and Evaluation at the U.S.
Naval Oceanographic Office, 1960-li)66.
Covers the objective of the major proj-
ects within the program, some of the
achievements obtained since 19G9, the
program's current status, and future
plans. Technical detail has, for the
most part, been avoided in the inter-
est of providing material which would
be of interest to the general reader
as well as to the professional ocean-
ographer. Catalog No. D203.2:R31 600.

Technology in Education. Contains
testimony presented to the Subcom-
mittee on Economic Progress of the
Joint Economic Committee, U.S. Con-
gress, regarding ways in which our
industrial know-how is being adapted
to the requirements of education. 273
p. Catalog No. Y 4. EC 7:Ed 8. 65$!.

Research Reports

Research on Exhaust Gas Effects on
Heat Exchangers, United Aircraft,
for the Air Force, July 1966, 144 p.
Order No. AD-637 952. $4.

Determination of Parts per Billion
Iron in Hydrocarbon Jet Fuels. Mon-
santo Research Corp., Dayton, Ohio,
for the Air Force, April 1966, 21 p.
Order No. AD-G36 604. $1.

Defense Industry Bulletin

Physical and Chemical Properties of
JP-4 Jet Fuel for 1965. University of
Dayton Research Institute, for the Air
Force, Sept. 1966, 114 p. Order No.
AD-640 937. $4.

Iffnition and Combustion of Solid
Propellents. University of Utah, for
the Air Force, Sept. 1906, 94 p. Order
No. AD-637 496. $3.

Compilation of Abstracts, 2nd
AFOSR Combined Contractors Meet-
ing on Combustion Dynamics Re-
search. United Aircraft, Sunnyvale,
Calif., and the Stanford Research In-
stitute, for the Air Force, Oct. 1966,
82 p. Order No. AD-G40 468. $3.

Investigation of the Autoxidation of
Petroleum Fuels. Aberdeen Proving
Grounds, Md., June 1966, 26 p. Order
No. AD-641 270. $2.

Thermal Stability of Hydrocarbon
Fuels. Phillips Petroleum Co., Bart-
lesville, Okla., for the Air Force, Sept,
1966, 270 p. Order No. AD-641 419. $6.

Physiological Methods in Astronau-
tics. Translated from Russian by the
Foreign Technology Div., Wright-
Patterson AFB. Ohio, Aug. 1966, 303
p. Order No. AD-641 113. $7.

Aerospace Engineering 1966: The
Proceedings of a Conference Held at
the University of Maryland, March 15,
1966. Dept. of Aerospace Engineering,
University of Maryland, for the Air
Force, Sept. 1966, 160 p. Order No.
AD-641 434. $5.

Storage Stability of Civil Defense
Shelter Rations. University of Georgia,
for the Army, Oct. 1966, 77 p. Order
No. AD-640 823. $3.

Static ami Dynamic Properties of
Fire-Resistant Wooden Structural Ele-
ments. Naval Civil Engineering Lab-
oratory, Port Hueneme, Calif., Oct.
1966, 70 p. Order No. AD-641 168. $3.

Crcosoted Woot! in a Marine Envir-
onment A Summary Report. Naval
Civil Engineering Laboratory, Port
Hueneme, Calif., Sept. 1966, 33 p.
Order No. AD-639 922. $2.

High Lift Surface Design Proce-
dures Experimental Verification, Vol.

I, Summary and Evaluation. Northrop
Corp., Norair Div., Hawthorne, Calif.,
for the Navy. May 1966, 76 p. Order
No. AD-639 255. $3, Same title, Vol.

II, Theoretical Design & Analysis. 126
p. Order No. AD-639 289. $4. Same
title, Vol. Ill, Wind Tunnel Tests. 194
p. Order No, AD-639 191. $7.

An Experimental Parameter Study
of the Fluid Force and Moment Re-
sponse of Two Typical Ship Roll Sta-
bilization Tanks. Southwest Research
Institute, San Antonio, Tex., for the
Navy, 60 p. Order No. AD-634 730. $3.

Rectilinear Fluid Flow Generator of
Oscillating Tync. Rensselaer Poly-
technic Institute, Troy, N.Y., for the

Navy, Aug. 1966, 21 p. Order No. AD-.
637 552. $1.

Collection and Analysis of Seismic
Wave Propagation Data. University of
Michigan, for the Advanced Research
Projects Agency, Washington, D. 0.
Aug. 1966, 103 p. Order No. AD-CMO
212. $4.

Fictitious Data Generator for An-
alytical Acrotriangulation. Raytheon
Co., for the Army. Oct. 1966,' 83 n.
Order No. AD-640 799. $3,

Protective Coatings for Magnesium.
Naval Ordnance Laboratory, Whitr
Oak, Md., Sept. 1966, 43 p. Order N<,
AD-641 177. $2.

A Study of Electrotleposition o f
Organic Coatings for Possible Military
Usage. Aberdeen Proving Ground, M<L,
Oct. 1966, 26 p. Order No. AD-641 914.
$2.

Effect of Photodegradation of At-
tenuated Total Reflectance Spectra of
Organic Coatings. Naval Civil Enffl-
neoring Laboratory, Port Hucncmi!,
Calif., Oct. 1966, 32 p. Order No. AD.
640 733. $2.

Inorganic Coatings for Spring Ap-
plications. Springfield Armory, MUHH.,
Oct. 1906, 53 p. Order No. AD-MI)
322. $3.

Testing of Chemical Films for
Establishment of Revised Qualified
Products List Under Specification
MIL-C-5541A. Naval Air Engineering
Center, Philadelphia, Pa., June 10(fli,
19 p. Order No. AD-637 GOG. $1.

Reactivation of Chromnted Conver-
sion Coatings for Maximum Paint Ad-
hesion. Naval Air Engineering Gen tor,
Philadelphia, Pa., Sept. 1960, 10 p.
Order No. AD-640 901. $1.

Determination of Pnrta per Billion
Iron in Hydrocarbon Jet Fuels. Mon-
santo Research Corp., Dayton, Ohio,
for the Air Force, April I960. 21 p.
Order No. AD-636 604. $1.

Physical and Chemical Proportion of
JP-4 Jet Fuel for 1965. University of
Dayton Research Institute, Dayton,
Ohio, for the Air Force, Sept, 190(1,
114 p. Order No. AD-640 937, $4,

Ignition and Combustion of Solid
Propellants. University of Utah, for
the Air Force, Sept. 1966, 94 p. Or-
der No. AD-637 496. $3.

Compilation of Abstracts, 2nd AF-
OSR Combined Contractors Meeting
on Combustion Dynamics Research.
United Aircraft Corp., Sunnyvale,
Calif., and Stanford Research IiiBfcl-
tute, for the Air Force, Aug. 1000,
82 p. Order No. AD-640 468. $3.

Investigation of the Autoxidation of
Petroleum Fuels. Aberdeen Proving
Ground, Md., June 1966, 26 p. Order
No. AD-641 270. $2.

Thermal Stability of Hydrocarbon
Fuels. Phillips Petroleum Co., Bai-tloa-
ville, Okla., for the Air Force, Sept.

106(5, 270 p. Order No. AD-641 419.
56.

A Unified Approach to Energetics
Research. Vol. I. Tyco Laboratories,
Walthnm, Mass., for the Air Force,
Sept. 190(5, 386 p. Order No. AD-638
362. 57. Volume II (same title). 305 p.
Order No. AD-B38 363. 7.

Study of Surface Properties of
Atomicafly-Clean Metals and Semi-
conductors. Brown University, for tho
Army, Oct. 1966, 58 p. Order No. AD-
fiS9 345. $3.

Evaporated and Rccrysiallized CdS
Layers, University of Delaware, for
the Navy, Sept. ISHifi, G3 p. Order No.
AD-637 725. $3.

Hot Electron Emitter. Hewlett-
Packard Co., Palo Alto, Calif., for the
Air Force, July 1966, 99 p. Order No.
AD-639 568. $3.

Investigation of Solid State Devices
and Materials. Northeastern Univer-
sity, for the Air Force, July 1966, 34
p. Order No. AD-635 287. ?2.

Transistor Quality Statistics in a
Pulsed loni/iiiR Radiation Environ-
ment. Hughes Aircraft Co., Fullerton,
Calif., for the Navy, Sept. 19G6, 84 p.
Order No. AD-638 862. $3.

The Relations Between Electrical
N oise and Dislocations in Silicon.
Carnegie Institute of Technology, for
the Navy, July 1966, 46 p. Order No.
AD-636 520. $2.

Damping Capacity of Materials, Vol.
I. Battelle Memorial Institute, Colum-
bus, Ohio, for the Army, Oct. 1966,
391 p. Order No. AD-640 465. $7. Vol.
II (same title). 394 p. Order No. AD-
640 689. 7.

Crack Initiation in Fatigue of
Metals. University of Texas, for the

The Adsorption of Carbon Dioxide
on Carbon Solids. Part I Graphite
and Diamond at D C. Naval Research
Laboratory, July 1966, 18 p. Order No.
AD-G39 659. $1.

High Temperature Gas Refractom-
eter. Block Engineering-, Inc., Cam-
bridge, Mass., for the Air Force, July
19(56, 36 p. Order No. AD-637 235. $2.

Proceedings of the Fourth Sympo-
sium on Remote Sensing of Environ-
ment. University of Michigan, for the
Navy and Air Force, June 1966, 908 p.
Order No. AD-638 919. $8.75.

Proceedings of the 19th Annual
Symposium on Frequency Control.

Army Electronics Command, Fort
Monmouth, N.J., 1965, 681 p. Order
No. AD-471 229. $9.80.

Research on Thermionic Electron
Emitting Systems. Varian Associates,
Palo Alto, Calif., for the Navy, 1966,
100 p. Order No. AD-640 184. $4.

Research for Development of Epi-
taxial Techniques for use in Fabrica-
tion of Silicon Carbide Devices.
Motorola, Inc., Phoenix, Ariz., for the
Air Force, May 1966, 65 p. Order No.
AD-635 136. $6.

An Experimental Evaluation of a
Driver Simulator for Safety Training.
George Washington University, for
the Army, June 1966, 36 p. Order No.
AD-636 166, $2.

Research on Exhaust Gas Effects on
Heat Exchangers. United Aircraft
Corp., for the Air Force, July 1966,
144 p. Order No. AD-637 952. $4.

Reorganization
Effected at APGC

The Air Proving Ground Gen lor
(APGC), Egliii AFT?, Flu., has
shuffled its organizational structure
to enable the center to imoro nfTtictivr-
ly and efficiently accomplish its un-
signed mission.

lAIl APGC tost inamitfomcMit activi-
ties have been connoti dated umlm- Hit-
Deputy for Test, Col. R. I,. Blm-hly.
The Deputy for Test hu.s hutm form-
ally termed the Dnuty for Tent Op-
erations.

In addition, tho for mm- Deputy fur
Effectiveness Tost orgjim/.nttnji' him
become the Air Force Weupoiw I'lf-
fectiveness Test (APWET) Director-
ate assigned to this Deputy for Trul
Operations.

The APWET Directorate, hnmlr-il
by Col. R. R. Moulton, conduct* pre-
dictive analysis, duKigiiH tunls, pro-
vides technical suptirviHion of u-jil
conduct, annlyzcH tha roHulUuit drill*
and reports on AFWKT protfinumi.
The physical testa urn cuvnVil out ami
supported by othor Deputy for 'IVst
Operations directorate- th lOlnctnin-
ics Test, MunitloiiH Tost, Aircnil'l und
Missile Test, and the Tnt .O|)nrl!onn
Directorates.

APGC is respoiiHtlik; for Air Korro
weapons efToctivenoHH tiuitmg, nli-c-
tronic warfare tenting iirm-mmlonr
munitions testing, and vortieid nrohit
oportitions.

Vanadium Alloy Studies. ITT Re-
search Institute, Chicago, 111., for the
a /&/ u e 1966 ' 35 P- Orde >' No. AD-

O(J4 Oii (, IjiD,

Computer Routines to Read Natural
lext with Complex Formats. Rand
Corp Santa Monica, Calif., for the

Studies in Speech Analysis and Syn-
te' 8 ' J^SJ*, / Michigan, for the

On-Line Interactive Displays in An-
Plication to Linguistic Analysis and
information Processing and Retrieval.
Systems Development Corp., Santa
Monica, Calif., for the Advanced Re-
search Projects Agency, Sept. 1966,
22 p. Order No. AD-640 647. $1.

m e ( CUr o y J n the Computer Environ-
ment. System Development Corp.,
Santa Monica, Calif., for the Air

The effect of Context on Recall and
Recognition of Long Verbal Series. Air
Force .Systems Command, Dec fcion
Sciences Laboratory, J une 1966, 22 p
Order No. AD-640 801. $1. P

? in . Visui I Displays:

Management Information Syttoms

(Continued from Page 14)

mation contained in each of these re-
flect three or more basic levels of
summarization: total program status
at the highest summary level; status
of each major program at the highest
summary level; status of each major
supporting task at the highest sum-
mary level; etc., to the lowest com-
mon denominator of the work break-
down of the program which tho
management system provides.

The Management Information Sys-
tems Plan is the framework for di-
recting and coordinating the informa-
tion systems development program. It
will also be the five-year systems im-
provement plan for NMC. Systems
improvements by components of the
NMC will be coordinated by the Man-
agement Information Division to en-
sure consolidation of an integrated
data base to support the overall
objective and the information and re-
porting requirements of the CNM. The
1967 Management Information Sys-
tems Plan (FY 1968) will be the sec-

ond cycle of planning and Hinting in-
formation requirements. ThH Hliilud
requirements become* the foundation
mid authority for automotive ilutu
processing equipment, projrrnm clum^o
proposals, nnd funds in tho hiuhrnl Ln
implement new systems.

The Management Information Divi-
sion, through use of tha annual Man-
agement Information HyntoinH Plan
and an improved invnntory of tlatu
systems, subsystems, and aydtnmB com-
ponents, will guide tho evolution of
new systems within tho conijponontH
of NMC in order to provide for Iho
most optimum balance balwomi infor-
mation to support ouch inniin^omonL
level and costs associated with mich
systems.

Tho full benefits of tho NMC r-
organissation of May 1, I960, havo not
yet been realized nor havo all tho
basic management phlloaophloa boon
fulfilled. However, the goals nnd con-
cepts have been formed and steady
progress has been made. The ncuda of
our operating forces shall bo motJ

January 1967

Addresses for officers listed below are:

ASD: Aeronautical Systems Division
Air Force Systems Command
Wright- Patterson AFB, Ohio 45433
Phone: (613) 263-7111

BSD: Ballistic Systems Division

Air Force Systems Command
Norton AFB, Calif. 92409
Phone: (714) 382-4207

ESD: Electronic Systems Division
Air Force Systems Command
L. G. Hanscom Field, Mass. 01731
Phone: (617) 274-6100

BSD;

129A

140A

226A

311A

S1SA

SWA

S19A

Space Systems Division
Air Force System Command
Air Force Unit Post Office
Los Angeles, Calif. 90045
Phone: 643 plus extension

Program No.
and Title

System Program Director
and/or Project Officer

AERONAUTICAL PROGRAMS

FB-lll Maj. Gen. J. L. Zoeckler

ASD
Ext. 53268

AGM-69A Col. Joseph Green

(SRAM) ASD

Ext, 55811

AIM 7 D, E Mr. M. B. Rutstein

(Sparrow) ASD

Ext. 56281

AGM-12C Lt. Col. William Monday

(Bullpup B) ASD

Ext. 62116

AGM-45A Lt. Col. William Monday

(Shrike) ASD

Ext. 52115

AGM-62A Lt. Col. William Monday

(Walleye) ASD

Ext. 62116

AGM-68A Lt. Col. Ward E. Protsman

(Maverick) ASD

Ext. 54568

Program No.
and Title

321A A.GM-12B

(Bullpup A)

324A/B F/RF-HIA

(TFX)

324K F-111K

326 A/ F-4C

327 A KF-4C

3 37 A A-7

400H/K HC-130H/

C-130IC

4 10 A C-6A

420A/B F-5A/B

448Q TJH-1F (AF)

463L Materials
Handling

470L C-141

482A HH-53B

486B CH-SC/HH-SE

System Program Director
and/or Project Officer

Lt. Col. William Monday
ASD

Ext. 52115

Maj. Gen. J. L. Zoeckler

ASD

Ext. 63268

Maj. Gen. J. L. Zoecltler

ASD

Ext. 5326S

Col. Charles CLemence

ASD

Ext. G4G57

Col. J. D. Hails

ASD

Ext. G7809

Mr. Kay Carlson

ASD

Ext. 64010

Col. G. M. Townseml

ASD

Ext. 64801

Col. Mark Treat

ASD

Ext. G335G

(Vacant)

ASD

Ext. 65323

Col. D. W. Ewing

ASD

Ext. 62793

Col. D. W. E\vmg

ASD

Ext. 62793

Lt. Col. F. L. Kosher

ASD

Ext. 62793

Lt. Col. F. L. Mosher

ASD

Ext. 58480

Defense Industry Bulletin

Program No. System Program Director

Program No. System Program

and Title and/or Project Officer

and Title and/or Project

BALLISTIC PROGRAMS 484L

Soft Talk Col. It, L. Bell

ESD

133A/R Minuteman Brig. Gen. A. W. Cruikshank

Ext. 78-640

BSD

Ext, 6014 484N

Pacific Area Col. G. B. Hilton

Communications ESD

G'2 1 A

ABRES Brig. Gen. Kenneth W. Shultz

System Ext. 78-680

BSD

Ext. 7068 48GL

Mediterranean Col. G. B, Hilton

Communication E SD

System Ext. 78-080

ELECTRONIC PROGRAMS 487L

Survivable Low Col. J. T. Tyler

407L

Tactical Air Col. Spencer Hunn
Control System ESD

Frequency Com- ESD
munications Ext. 78-783/4/5

Ext. 75-4954 489L

Northern Area Col. G. B. Hilton

416M

BUIC Col. F. L. Ayres

Communications ESD

ESD

Ext, 78-080

' x ' 490L

DCS Automatic Col. G. U. Hilton

418L

Ryukyu Air Col. F. L. Ayres

Switch Voice ESD

Defense System ESD

Ext. 78-080

Ext. 4101

491L

AUTOSEVOCOM Col. R. L. Roll

433L

Weather Obs & Lt. Col. Robert L. Houghton

ESD

Forecast ESD

Ext. 78-640

436L

North Atlantic Lt. Col. Joe Maher 492L

US STRICOM Col. D. W. Howry

Comm System ESD

Command & KSD

78-680

Control System Ext. fi!J37

439L

Sea Coastal Col. G. B. Hilton 493L

Secure Voice Col. R. L. Bell

Cable System ESD

SW Network ESD

(Seedtree) Ext. 78-680

Ext. 78-640

440L

Scatter OTH Col. Herbert Dotson A n A j
Radar ESD

ERGS Col. J. T. Tyler

Ext. 2817

ESD

Ext. 78-783

441A

AN/FPS 95 Col. Herbert Dotson

Radar ESD 4Q CL

USAF G/A Col. R. U Boll

Ext. 2817

Program ESD

468L

European WB Col. G. B. Hilton

Ext. 78-040

Transmission ESD 4931,
Media Improve- Ext. 78-680

Space Track Col, Tom 0, Wour

171 C1T1

inent Program

ESD

Ext. 2078

473L

HQ USAF Col. R. L. Edge

Command and ESD

FRELOC- Mr. George MouHon

Control System Ext. 5364

FASTRACE ESD

474L

BMEWS Col. Tom 0. Wear

Ext, 78-670

ESD 497L

Col. R. L. Bell

Ext. 2678

ESD

474N

SLBM Col. Tom 0. Wear

Ext. 78-640

ESD

Ext. 2678 4 " L

AI1 *S Col. L. G. Blais

481A

Airborne Data Lt. Col. Barker
Automation ESD

ASD
Ext. 64804

Ext. 85-4727

482L

Emergency Col. Spencer Hunn
Mission Support ESD 1l(l vr
MITRE "

RECONNAISSANCE PROGRAMS

RC-13GA Maj. Luther Jonoa

Ext. 4954/4966

ASD

119P

428A

466L

G23A

G24A

1G1A

102A

107C

110A

1S1C

201W

202A

208A

221A

Program No.
and Title

RC-135C

TIPI

ELCO

System Program Director
and/or Project Officer

Lt. Col. Clyde Bensey

ASD

Ext. 63053

Col. R. R. Frederick

ASD

Ext. 55116

Col. H. P. Dotson, Jr.

ESD

Ext. 2817

SPACE PROGRAMS

Largo Solid Pro-
pellent Motors

Titan III
Space Booster

Col. Norman Kcefer

SSD

Ext. 31106

Col. W. R. Talinferro
SSD

Ext. 30734

OTHER PROGRAMS

B~52

B-68

Titan II

XB-70

AGM-28/
TERCOM

F-106 MOD
10001 (MA-I
AWCIS Solid
State Computer)

ASG-18/
AIM-47A

AIM 4B, C, D
(Falcon)

AIM 9B, D
(Sidewinder)

303G F-104G (MAP)

3 06 A F-105D/P

Lt. Col. E. W. Geniesse
ASD

Ext. 55654

Lt. Col. E. W. Geniesse

ASD

Ext. 55664

Col. Quentin J. Goss

BSD

Ext. G804

Mr. John P. McCollom

ASD

Ext. 52230

Maj. W. S. Paul

ASD

Ext. BS604

Mr. Dale Little
ASD

Ext. 54247

Col. B. N. Bellis

ASD
Ext. 54784

Mr. E. C. Rado

ASD

Ext. 53800

Mr. M. B. Rutstein

ASD

Ext. 54556

Maj. D. S. Kromer

ASD

Ext. 52326

Lt. Col. F. L. Cunha

ASD

Ext. 55237

332A

334A

420L

424L

430A

478A

479A

G29A

632A

653A

680A

Program No.
and Title

AGM-76A

YF-12

T-38

T-37B/C

429L BQM-34A

Interim TIPI

VTOL Utll Trans
(XC-142)

Nike-Zeus
Target

628A Agena D

Standard Atlas

631B Gemini (GLV)

MOL

X-15

START

683A Vela Satellite

SR71

Scout

System Program Direi
and/or Project Offici

Col. B. N. Bellis

ASD

Ext. 54734

Col. B. N. Bellis

ASD

Ext. 64734

Col. Mark Treat

ASD

Ext. 53356

Lt. Danny R. Preble
ASD

Ext. 65068

Mr. Ray Dearbaugh

ASD

Ext. 34800

Maj. J. W. St. John

ASD

Ext. 53324

Lt. Col. William Can-
ASD

Ext. 53641

Col. J. A. Urban
BSD

Ext. 4029

Lt. Col. Cecil E. Riddle

SSD

Ext. G43-2228

Col. Leo W. Sullivan

SSD

Ext. 643-1032

Col. Robert R. Hull

SSD

Ext. G43-03G6

Col. William Brady

SSD

Ext. G43-0900

Mr. Robert Clodfelter

ASD

Ext. 53805

Col. Curtis L. Scoville

SSD

Ext. 32822

Col. S. H. Sherrill

SSD

Ext. 643-3184

Col. B, N. Bellis
ASD

Ext. 54734

Lt Col. Joe D. Johnston

SSD

Ext. 643-0024

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Januory

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SPEAKERS CALENDAR

DEPARTMENT OF THE ARMY

Lt. Gen. William P. Cassidy, Chief
of Engineers, at Annual Meeting of
Philadelphia Post, Society of Ameri-
mn Military Engineers, Philadelphia,
PH., Jan. 25.

iR. Gen. Harry G. Woodbury, Dep.
\Jn: r Civil Works, Office of the Chief
M Engineers, at Nebraska Watershed
Workshop, University of Nebraska,
Lincoln, Neb., Jan. 25.
^ Gen. Harold K. Johnson, Chief of
r^J' * University of Arkansas
liLHG Commissioning Exercise, Fay-
ittevillt;. Ark., Jan. 29.

DEPARTMENT OF THE NAVY

Cnpt. L. II. Mclson, Asst. Chief for
Research, Office of Naval Research,
it Naval Academy Assn. Meeting.
few York, N.Y., Feb. 21.

Aclm. David L. McDonald, Chief of
*Jval Operations, at Naval Academy

Assn. Meeting, New York, N.Y.,
March 17.

DEPARTMENT OF THE
AIR FORCE

Brig. Gen. J. S. Bleymaicr, Com-
mander, Air Force Western Test
Range, at University of Southern Cali-
fornia, Los Angeles, Calif., Jan. 27; at
R. M. Greene & Associates, Los
Angeles, Calif., Feb. 5; at American
Society for Quality Control Meeting,
Vandenberg AFB, Calif., April 27,

Gen. J. P. McConnell, Chief of Staff,
at 2fith Anniversary of Griffiss AFB,
N.Y., Feb. 1; at Air Force Ball, Now
York, N.Y., Feb. 21; at Air Force
Assn. Meeting, San Francisco, Calif.,
March 15-17; at 25th Anniversary of
Tinker AFB, Okla., April 28.

Brig. Gen. P. R. Stoncy, Vice Com-
mander, Air Force Communications
Service, at Armed Forces Communi-
cations and Electronic Assn. Meeting,

Feb. 3; at Collins Radio Technical
Assn. Meeting, Cedar Rapids, Iowa
April 11; at Armed Forces Communi-
cations and Electronic Assn. Meeting,
Maxwell AFB, Ala., April 18.

Hon. Harold Brown, Secretary oi
the Air Force, at Air Force Ball, New
York, NY., Feb. 21; Air Force
Assn. Meeting 1 , San Francisco, Calif.,
March 15-17.

Lt. Gen. R. L. Bohannon, Surgeon
General of the Air Force, at Air Force
Ball, New York, N.Y., Feb. 21,

Maj. Gen. R, W. Manas, Judge Advo-
cate General, at Student Bar Assn.
Meeting, St. Louis, Mo., Feb. 23.

Gen. B. K. Holloway, Vice Chief oi
Staff, at Society of USAF Flight Sur-
geons Meeting, Washington, D.C.,
April 13.

Lt. Gen. T. P. Gcrrtty, Dep. Chief of

Staff, Systems & Logistics, at Na-
tional Society of American Value
Engineers Meeting, Chicago, 111., April
25.

Contracts Awarded by Air Force
for VTOL Flight Control System

The Air Force has awarded con-
I'acta totaling more than $6 million to
forth American Aviation, Inc., Los
Angeles, Calif., and Lqckheod-Gcorgia
Jo., Marietta, Ga., as part of an over-
11 vortical takeoff and landing
VTOL) integrated flight control pro-
rmn designed to advance technology
i Air Force VTOL aircraft develop-
icnt,

The contracts were awarded by the
uir Force Flight Dynamics Labora-
ny, Wright-Patterson AFB, Ohio, a
nit of the Air Force Systems Com-
mnd's Research and Technology
Kvislon.

North American Aviation was
warded $5,671,000 in a contract call-
\K for the development and demon-
nation of a VTOL integrated flight
system. Work covered in the contract,
to be performed over a 39-month
period, includes advanced development
of a total integrated flight control
technology, including equipment, and
the conducting of flight tests necessary
to verify the technology,

A letter contract for $975,000 was
awarded to Lockheed-Georgia for
modifications of the XV-4A "Hum-
Defense Industry Bulletin

mingbii-d" VTOL aircraft to a new
type system with direct lift and di-
verted thrust jet engines. The aircraft
will he redesignated the XV-4B.

Work oh the XV-4 modification
project is scheduled to begin immedi-
ately with the first flight of the air-
craft set for late 1967. After a five-
month test program by Lockheed and
acceptance by the Air Force, the air-
craft will be delivered to North Amer-
ican for employment in an intensive
research and development program to
develop and demonstrate handling
qualities and control design criteria
for VTOL aircraft.

The VTOL flight control program,
including extensive simulation and

flight tests by the Flight Dynamics
Laboratory, is a link in the research
and development program aimed to-
ward eventual deployment of VTOL
and V/STOL (Vertical and Short
Takeoff and Landing) aircraft.

The program is under the direction
of the Flight Dynamics Laboratory's
V/TOL Technology Division, and is
headed by Richard E, ColelouRh, Dep-
uty for Development and Integration.

Air Force Increases
Reserve AME Units

The Continental Air Command
(GAG) has announced an increase of
Air Force Reserve Aeromedical Evac-
uation (AME) units from 11 to 24
effective Jan. 1, 1967.

The increase is part of a major re-
organisation of the Air Force Reserve
AMR structure which involves the ac-
tivation of 16 flights and the inactiva-
tion of three groups and two squad-
rons; nine other existing units will
be reorganized. All 24 AME units will
be assigned to Air Force Reserve
Military Airlift Groups, and most will
be collocated with their parent group.

Reorganization will provide the
Military Airlift Command (MAG)
with an expanded capability to per-
form its world-wide acromedical evac-
uation of the ill and wounded through
selective callup of trained Air Force
Reserve AME units.

In peacetime, Air Force Reserve
AME units will train on regular MAC
routes. The forthcoming increase in
Air Force Reserve AME locations will
expand CAC's capability to provide the
Reserve portion of the total MAC re-
quirement in the event of a pro-
longed national emergency.

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Address by Maj. Gen. Walter E.
Lotz Jr., Chief of Communications-
Electronics, Office of the Chief of
Staff, U. S. Army, to the Washington
Chapter, Armed forces Communica-
tions and Electronics Assn., Washing-
ton, D.C., Dec. 1, i960.

Mnj. Gen. Walter E. Lotz Jr., USA

COMMUNICATIONS IN A

COUNTERINSURGENCY

ENVIRONMENT

I have been on tho job here for 00
clays and I can state that the Array's
communications-electronics challenge
and potential from a soldier's, engi-
neer's, scientist's, or industrialist's
viewpoint have never been greater,

The tremendous awareness and
interest of the role and significance
of communications-electronics on the
part of tho Chief of Staff and the
Secretary of tho Army, and their per-
sonal support, make it eminently clear
that I have a real job ahead of me to
live up to their demands and expecta-
tions, In this regard, both the Army
and myself will need your continuing
help and support.

It is inevitable that people return-
ing from Vietnam appear to be pre-
occupied with, if not just plain in-
sistent on, talking about the situation
there and how it affected their jobs.

Brace yourselves because I am no ex-
ception. I will describe the communi-
cations situation in Vietnam both
from the context of the unique charac-
teristics of operations and communica-
tions, and from what we might do to
better prepare for counterinsurgency
in other underdeveloped countries.

It is painful to admit, but let us
face it, too often our communications
concepts, doctrine, and even systems,
have a way of reflecting the situation
which occurred in tho last previous
major conflict or war. When you
couple this normal bias with the long
lead-time for development of require-
ments, the conduct of research and de-
velopment, and the acquisition and
installation of communications-elec-
tronics hardware in the field, it is ap-
parent why we have so much "un-
doing" to go through as well as
"doing."

Some of our most cherished ideas
and concepts of communications-
electronics were jolted in Vietnam.

Ono of these was our well estab-
lished concept of differentiating be-
tween strategic and tactical communi-
cations; another was the viewpoint
that each of our Military Services had
to own or have organic to their com-
mand the communications which
served their command and control,
operational, and supporting activities.
Finally, the view that the military
communicator would fulfill only the
military needs, and somebody else
would look after the communications
needs of the civilian government, com-
mercial and industrial organizations,
the population, and tho press was de-
stroyed. I might add here, as a side-
light, that experience in South Amer-
ica jibes with these lessons learned in
Vietnam.

War in Vietnam is being fought, as
most counterinsurgency actions are
today, in a truly underdeveloped
country. From the communicators'
viewpoint, there are no developed
telecommunications or telephone sys-
tems of the type to which we are
accustomed serving governmental and
commercial needs. Little use is made
of cable and wire, outside of the popu-

lated and protected areas, because
wire lines and cables can be and
have been cut by the guerrilla
forces. In the war in Europe, and
even in Korea, our military forces
were able to reconstruct and utilize
buried cables along with other rem-
nants of the communications infra-
structure. This is not possible in
Vietnam. In Vietnam, the U. S. mili-
tary has had to build a main-line tele-
phone and telegraph trunking system
with local distribution, virtually from
scratch.

In the conventional concept of mili-
tary communications, we visualize a
front of operations with communica-
tion circuits radiating from headquar-
ters, bases and depots in secure rear
areas to combat units on the front
lines.

In this concept, headquarters dis-
place to maintain control of the com-
bat elements as the tide of war prog-
resses. In ground combat operations
in the Republic of Vietnam there is
no classical front or rear, nor any
totally secure area. Combat is con-
ducted from time to time in all parts
of the country. There are no sanctu-
aries free from the activities of the
Viet Cong and no communication in-
stallation is free from the threat of
attack. Nor in this war do we sec the
displacement of major headquarters.
Large headquarters, airfields, supply
depots and base camps of major units
remain in fixed localities. Thus the
long-haul communications system link-
ing the major terminal points is geo-
graphically fixed; it remains static
and need not have the capability of
moving 1 periodically. From time to
time, brigades, battalions and smaller
units move out from their base camps
to conduct search-and-destroy mis-
sions. To accommodate this, the fixed
communications system is extended by
mobile tactical equipment, which pro-
vide what are called "tactical taila,"
connecting the combat units to the
fixed communication system.

The fixed long-haul communications
network in Southeast Asia including
Thailand, designated the Integrated
Wideband Communications System

Defense Industry Bulletin

(1WCS), is a distinct departure from
conventional communications systems.
I,ft us examine why.

First, while the U. S, ground com-
bat troop complement in Vietnam cor-
ro>pomts generally to a field army,
thin army is dispersed over a territory
70CI miles long and varying in width
from 40 to 100 miles, Conventional
military planning provides a field
army communications system that
covers an area about 200 by 180 miles,
Second, in conventional military
planning, we visualize a strategic com-
munications system which extends our
world-wide communications into com-
bat theaters as far forward as the
headquarters of field armies. In Viet-
nam, the HVCS, which is integrated
with the world-wide system, extends
to divisions, brigades and even smaller
units. Therefore, it is both strategic
and tactical. The significance of this
point is more than just conceptual.
Our strategic communications equip-
ments are engineered to fixed plant
commercial standards, while our tac-
tical systems have been designed
around engineering: parameters which
most convenient for employing
mobile equipments providing

are
highly

relatively few circuits per path.
_ In the conventional system we can
interface the strategic and tactical
systems at a single entry point at the
headquarters of a fle]d amv md
he-fore, tolerate the introduction of
"to. face ecnnpmentso that the stra -

In addition, the government of
South Vietnam mimt look luridly In
the U. S, forces for dnlinilrd cirruil !i
for air traffic control, public iciiVly,
radio broadcast.! ri)V. niilmmf mieni
tions and many similar ai'livihVs mid
for comnion-UKfM 1 , Itnig-lincM IcN-plnnir
service. You can KCC, Ilicn, thai
TWOS is a eomliinaUmi uf n nn'M
command control ny;;li'iii mul u
AT&T loiig-linr.s nynlcrii for Sun!
Vietnam, In vw\v of (hi:t, I am ;;<ir
that you can iniaj|irir> the wide vjinH
of terminal equipim-iil'i wlifcli nn
intercoimectnd hy thin uy.'di'in.

This miHliiry-(>ntfil>linl'd, !>. lim-;
system in significant in <ifcn nnd i;
still growing. Tim hndthnnc, m- prJ
inary trunking linlc.4, lutn.llr n-t many
as 240 voice chaniwlH. Thr | u (,,] ,
ber of terminaMo-tei-mitnil ciivui|.; in

the IWCS will rvpiilmilly rx,- | / ti Of).

The estnWtolimmil of mieh a ;; ,v,i|n lh
requires moro Umn eMnineorfn,.; ,
curement and liml-nJIiil.fdr,. Ahmml nil
the circuit pnthn li-nvi-nii" IMIMIMV
controlled lorritmy. |(,.l liy , lUt , it , IM(|
interconnect points lonntnl mil>i!t|.> 1( f
secure base- area,. , m mt flrnl I,,. m - ni .

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both simple and portable, using- en-
tirely voice operation.

In counterinsurgency operations,
;his village anil hamlet radio network
nay or may not he the responsibility
>f military forces.

Some of you may be familiar with
;hc networks in Vietnam. If S o, you
mow that our U. S. Agency for
nterimtional Development, and not
he Defense Department, provides this
ystom. You may also know that this
.etwork is neither operated nor main-
ained by the Armed Forces.
_ Here is an area where the poten-
ial of our great American electronic
achnology has not yet been brought
> bear fully on the problem. More
fTective and more adequate radio sets
in he designed and produced in largo
Liuntities to assist in the underde-
Jloped countries. I throw this prob-
m to you as a specific challenge.
Next, insurgency thrives best within
ie rural localities where the citizen
out of contact with his government,
i fact, in Vietnam until recent
iars the average rice farmer and
iherman were not too keenly aware
, or interested in, the central gov-
nment. Newspapers, motion pictures
id radio broadcasts wore not n sig-
flcant part of their lives. They were
Tiost out of touch with the govern-
int. We, in fully developed dome-
stic nations, know well that the ro-
onsivoness of the government to the
nds of the populace depends upon
:fve participation in the govern-
nt'B processes. This requires mass
nmunications media from the gov-
iment to the people. In Vietnam
lio broadcasting, newspapers, leaf-
is and other media have been de-
oped and are being used ; however,
a year a new medium was intro-
:od with initial results that exceed
expectations,

"ho Defense Department, the State
aai-tmont, the Agency for Interna-
ml Development, and the U. S. In-
matlon Agency, in a joint effort,
iated television broadcasting in the
a. immediately surrounding Saigon
Feb. 7, 1966. Initially, the broad-
; originated from U. S. Navy Con-
tatlon aircraft equipped to trans-

on two channels simultaneously
n program material prepared in
ance on video tape and 16mm
(scope films. Standard American
mercial receivers were procured
distributed. Since then the system
been improved. About six weeks

ago, on Oct. 25, a permanently in-
stalled high-power television facility
commenced operation in the Saigon
area. In addition, eight mobile trailer-
mounted vehicles for the U. S. Armed
Forces will be in operation to cover
areas in the southern delta, northward
along the coast, and in the central
highlands. The U. S. Government will
assist the government of Vietnam in
building three additional stations to
be located at Can Tho, Qui Nhon, and
Da Nang or Hue.

The fundamental aim of this U. S.-
assisted program is to "reach the
Vietnamese people." Programs to
bring the isolated people into the gov-
ernmental family are of no use unless
the program in understood. Without a
means of quickly communicating with
the multiplicity of hamlets und vil-
lages that exist, the government must
either resort to roving teams of in-
structors or abandon the areas to the
control of others.

The introduction of television into
Vietnam was a bold step. Lessons
learned there will bo most valuable in
approaching this again in other parts
of the world.

First, what are some of the ad-
vantages of this step; secondly, what
arts the payoffs; and, last, what are
.some of the typical problems faced
when introducing the latest form of
mass audio-visual communications into
underdeveloped areas?

The Vietnamese are people with a
high sense of tradition and a diverse
culture which employs the dramatic
arts extensively. TV as a vehicle to
provide classical Vietnamese plays,
dramas and operas in their native
language was a natural. The problem
of illiteracy was overcome in that the
people did not need to read to under-
stand the message being- put across.
Tho times for television broadcasting
were selected so that the working peo-
ple would bo reached in their homos
during the early evening hours. Pro-
gram material included news, educa-
tional programs and entertainment.

The introduction of TV was some-
thing that the entire Vietnamese
family could enjoy. Their social struc-
ture, which, of course, is Oriental in
nature, depends upon the close ties of
the family and its maintenance of cul-
ture, pride and desire for freedom.
TV can capitalize on these basic levels,
motivations and social orders.

It can be tentatively concluded that
TV may be introduced in an underde-

anse Industry Bulletin

veloped country with a high ex-
pectancy of success. Its value as a
means of educating, informing and
entertaining the people in remote
areas can only be limited by your
imagination. It could be a powerful
tool for stabilising governments dur-
ing periods of social readjustment.

Such an experiment in Vietnam
was not without problems. It is here
that the greatest challenge to Ameri-
can ingenuity and industry is pre-
sented.

The standard commercial receivers
are too complex for an uneducated
individual in rural locations to op-
erate, much less repair or maintain.
The associated problem of antennas
in fringe areas, the delicate tuning of
channels, adjustment of the picture
tube, fragility, and English -language
markings all added difficulties at the
outset. I am sure that there are solu-
tions to all these problems. I visualize
that a need exists for a mass-produced
set, marked with the indigenous lan-
guage of the people for whom it is
intended, with simplified channel tun-
ing, rugpdized, designed for battery
or multiple frequency and voltage
operation, anil provided with more
powerful audio amplifiers (say 2E
watt) to accommodate outside speak-
ers for community viewing, Another
problem exists in the area of training
indigenous technicians, engineering
and studio personnel. The lack of a
broad technological base in many
countries inhibits the training of per-
sonnel to the U. S. standards of tech-
nical proficiency,

WP. have already witnessed the
dramatic introduction of this medium
of mass communication into Vietnam,
We recognize its potential as an aid
in countering communist-inspired In-
surgency operations a capability to
quickly and expertly apply production
and technical Itnow-how in serving tho
needs of other countries,

Hero is a new dimension of commu-
nications-electronics to help win the
wars of insurgency and, more im-
portant, to help sustain peaceful
social, political and economic develop-
ment,

The lessons we are learning in
Vietnam are significant in planning
our future course in communkations-
electronics.

We have learned that our conven-
tional concepts of military communi-
cations systems must be extensively
altered in wars of counter insurgency.

Hrwvcr. the great American know-
ri'V.v in <'k'< i tronics equipment .md mass
fin'ihinimi h;is responded magnifi-
r.-ntly t'> the Miviromncnt in South-
><;\-.t APKI. V.'r- must now capitalize on
ihh tn i iji' i ii<l<>iis American resource in
firinjriiig poace to the world and main-
taining it.

This jri iin opportunity and a chal-
!<TiK'' \vJucli all of us welcome I am

Ailttrfw by RAdm, J. D. Arnold,
l. r S\\ f>ri>. Chief of Naval Material
(Lorn'itic Siii/port) at Ninth Annual
X<iiy-in<lu.-itry Conference on Mate-
rial He liability, Washington, D.C.,

OC.L !>>;, isdfi.

HAdm. J. D. Arnold, USN

Systems Effectiveness
and Combat Readiness

If our fighting fleet is to have the
stamina which marks the champion,
considerations of logistics support
and human factors engineering must
be far more closely combined with
engineering considerations than has
usually been the case in the past.

One of Mahan's axioms is that
effectiveness in battle depends in largo
part on proper logistics support.
Every sailor knows instinctively that
you can fight only as long as tho
essential material is on hand. "Essen-
tial material" means mainly "Bullets,
Beans, and Black Oil." It also means
"gear that works,"

Before the war I served as senior
flight test pilot in Hawaii. One old
chief petty officer who worked with
me said something I will always re-
member. He pretty well combined
Mahan's thought with the basic con-
cepts of systems effectiveness. He
was talking about the R-1820 engine,
which was one of the moat powerful
aircraft engines the Navy had in
those days. "I like those engines"
he said. "They don't break, and when
they do they are easy to fix."

I'm afraid that if the Chief wore
still with us he would have a few
other things to say. When I left tho
Pacific Fleet in September, I carried
away the conviction that too many of
our basic tools of sea power do broak,
and break too often, and when they
break they arc too hard to fix In
today's language they lack reliability ar '
and maintainability.

Let's deal in specifics; survival
radios, for example.

Th ese are the miniature radios
Pilots use to call for help i,, survival
situates. They are the most i.n-

Tim Navy JIUH !ip OI]

Improving the effectiveness of war-
faro systems is probably the most

srs .- rr=isri5 r 5

the last hope of a man who may die
orj* captured if his radio doesn't

I happ ened to be inspecting the
section at North Island when

ness o

the fleet today. So individuals in
industry and the Navy are a
basically working toward the same
goal: a more effective fleet

After a continued attack over the
t several years, the efforts of s
terns effectiveness engineers
the country are , cumulatively,

n^ the evels of systems
fleet require*

a shipment of these little radios
nved. Because I know that there
*""* - too many

worthwhile

copter sonars.
operating 1 anU

for moro than a tlcnulr. You
think that liy now wn would hji ve
waterproof, fl<!xihl rnblr for lower-
ing the .sonar from the- hchVnptrr jm,,
the water. Woll, tht* raliln i'ji Il( i \ili](i_
Nanio a radio or an nvionirji |uii:]{.
age, and I'll tin mn n nyutt>n\ that
doesn't pc'H'orm IJH it should.

Small nyfitiMiui im'ii't tin* only
troublesome OMOH. 1 HIH ulmul t nt\m\\
a Tew airnlanos, hut I wnnl, f[ \<> |, c
undorntooil that I urn not critic
the airphun! nmmifarturiT, or at
not him alone. Our pirnliliniiii, gen-
erally, arn in tint black hojicn which
rid(> in.sidi! tint airplani'ii. Tin- MH^IIUM
in the airphmr.s, Lin; nn'i'luuiN-nl ninl
hydraulic HystnniH, the- pljuuvi (linn-
solves am Hiipni'l) pr-rNhichi of Uii>
American ahvrafl. Imhiulry. n'n (| lo
gadgets liiHfd( rudaru and oiln>r I-|I T -
tvonic Hynt<miH that CHINU* (he ironliln,
Most of you Itimw that tin* K I!A
early wurninjf nhvnifi, (hi- A li ut-
tack plain- ami t)n> KA fif! ,-rcun.
naissanco aircraft luul NOVITI- )'i-linhIIN
ty prohlcnm when thny Unit en
Hervico. Thn mcai] Hum ]u>l,vv(>(-n
ure of thoir primury jM-n-un-n,
link.s, (!(>iiipiit((t'.N anil ruiliirii
niHUHin-ci] En inimilnn. Them' pi
wm-0 bought l.y tho Navy (u 1.,.
fineHt and most advamccd niarlifm
their lyp H in (,(- W0 rhl. An, I

pact of Llii' 1ii,,.-. '
nay Mint HiHr pi-r-
11 'Iciit; hiLH hnprttvH
Lcr ttuni H W ii!* only
montliK ajfo. AfhT dTff ninju)-

. Ann , - - '" ">" A Ct ami

1,400 minor OIKKI, with nil HIM) ili,,<
chniiffBH imply about rmdlKurutton
control and HpiiroH mippin-i, || tl > (Irt'l

they fh-Ht rocoivcHl th plan'r...'"^."' "in
general, poi-Joj-manco Iti N.,rv|r t . ,, x .

-i niCU, Nllptil'IOV WOflpdllM.

Butonch of Ihown plan..,,. ,;,
other Oral line ah-craft (h,a,
Jhmk of, ndiinvnH thc , ne . ( ,,
formance^at tho pri,-,. o f an

At on
Ron tract ^miii.i imu u . nj

Wflh

full- I

but only
I'm ff lnil to
rormancn ( U

, Vl ,

, H
.

The real point is that overall ef-
-' fectivenoss of these planes was de-
graded and their battle readiness re-
duced because a disciplined approach
to systems effectiveness was not ap-
plied to them early enough or strongly
enough,

I do not want to seem excessively
critical, and it is true that the Navy-
industry team generally produces
quality systems. But most of these
systems perform well only because
the most limited resource the Navy
has, sailor-hours, or more precisely,
perhaps, maintenance talent and time,
are lavished upon them.

A number of life cycle cost studies
recently showed that maintenance and
operational costs throughout the life
of a typical system ran from six
to 70 times the original cost of
the item. Two-thirds of the mainte-
nance costs were for technical talent
brainpower. Maintainability and re-
pairability are certainly areas of sys-
tems effectiveness which must be
brought under control promptly.

As an example of what I'm driving
at, two A-4's that we know about
were lost because of faulty design for
maintainability. In each case, a main-
tenance man had dropped a nut into
the fuel cell. Why?

Installation of a fuel pump on
an A-4C requires removal of the
engine a 16-manhour job. It then
takes two men four hours to remove
the fuel pump. The last nut is re-
moved by use of a special tool and
by feel.

In spite of warnings following loss
of the first aircraft, a -second was
lost a month later for the same
reason. Those of us who are con-
corned about maintenance wish some
maintenance engineer had looked at
tins installation early in the game.
The A.-4 is an execeptionally well de-
signed and reliable machine, but a
revised installation method or a screen
ovor the fuel pump inlet might have
saved two at least two A-4's.

I wish maintenance didn't require
so many special tools. A mechanic on
n carrier is always working in close
quarters, aircraft are packed tightly
together, lighting is barely adequate,
and the special equipment is usually
at the other end of the hangar bay.
Pressure to get the planes back into
the air is always present. As a result,
a certain number of nuts are going
to be dropped. But no more, I hope,
into fuel pumps.

Defense Industry Bulletin

All of us here today are managers
of one sort or another, and it is the
business of managers to deal with ex-
ceptional situations, to be concerned
with problems, to correct difficulties
and to set things right. If we did not
believe that there is much to be set
right, we wouldn't be here. And we
might as well recognize, collectively,
that it is upon this group, and very
few others like it, that the ultimate
responsibility rests for delivering- to
the operating forces of the Navy and
the Marine Corps the effective sys-
tems they need. There is challenge
a plenty for all who manage technical
warfare systems.

One of the principal mechanisms
which binds managers together in the
business of creating weapon systems
is the contract. Well-engineered sys-
tems (those which don't break and
are easy to fix when they do) result,
in part, from a firm meeting of the
minds between the 'Navy and industry,
between buyer and seller.

A contract is a legally enforceable
agreement, and it is a good bit more.
Members of the Navy-industry team
have varying points of viewcomple-
mentary and interdependent points of
view, differing but not necessarily
conflicting perspectiveson the real
meaning of a contract.

Considering a contract not only as
an agreement, but also as a vehicle
for increasing say, systems effective-
ness, let us examine three separate
points of view: those of the project
engineer, the contracting officer, and
the businessman.

A good many of the project engi-
neers I have known tend to think of
a development or production contract
as an administrative tool ; a tool
which helps get done what they want
done. The basic concern of the en-
gineer focuses on the technical excel-
lence of the end product. To him
costs and enforceable agreements are
important, but I think that primarily
most project engineers regard a con-
tract as one more milestone on the
long road linking concept formulation
with successful deployment, at sea, of
the final product.

I won't try to describe the view-
point of the "typical businessman,"
if there is such a soul, except to say
that I have heard many successful
bidders talk of their contracts as be-
ing filled simultaneously with promise
and with peril, with certainty and

with risk, and with obligation as well
as opportunity.

The contracting officers take still
a different perspective. Some, the
minority, feel tliat contracting is
simply a straightforward legal func-
tion, ^ completely separate from the
technical characteristics of the items
contracted for. This type of contract-
ing officer says, "Write down your
technical requirements, forward them
with a procurement request, and I will
prepare a legal contract." To him
systems effectiveness is a legal result
of including standard military specifi-
cations in the contract.

A more imaginative officer would
talk a broader view. He might say to
the project engineer, "I'll tell you how
to get more bang for your buck, more
rubble for your ruble. "We will work
together during the development
period. We'll work up a first-rate ad-
vance procurement plan. I'll show you
how you can design 'procurability' in-
to your system."

This fellow recognized the value of
planning, during the development
process, for eventual procurement. He
will probably attempt to plan well
enough so the item can be procured
through a fixed-priced contract. He
may work out a multi-year buy, or
some other type of imaginative ap-
proach.

t Still a third contracting officer
might take an even wider perspective
on fiia ability to influence the ef-
fectiveness of the system to be con-
tracted for. "Write your specifications
in such a way that we cnn offer in-
centives: payment for better perform-
ance, higher reliability, superior main-
tainability," he will urge.

This individual is really talking
about Incentive contracting which has
only begun to be exploited as a
mechanism for rewarding businessmen
who produce systems of superior
effectiveness.

More and more in the near-term
future, the most astute contracting
officers will lean toward incentive con-
tracting where this form of contract
makes sense. But they can do this
only as readily as the engineers help
them design and pin down, with audit
accuracy, the value to the Government
of increased systems effectiveness.

I positively foresee that the con-
tracting pendulum will swing toward
more incentive contracts during the
next few years. To an increasing de-

<:r> - in tli>> futinv, ini'f-ntivp contracts

u'iii r'-uard or j)<;jialize these who

'iiM or don't huild effect iv<; systems.

Tt,<-iv i,-: no question in my mind

tfi/it th>' main improvements in ef-

f'vmvn* 1 ?! in (lie near-term future

v/ilJ rf-ult fnmi increased emphasis

(i! itH.~ntivi> contracting. Every sign

]> lint.-; that way.

In the last four years, cost-plus-
iru'.-ntiv<:-fef.' (CPIF) contracts, as a
penvr-ntai-e of DOD contract dollars,
hiivt- doubled. This year about one
procuri'mc-nt <lo!lar in twelve will
-.'hang,' hands under a CPIF contract.
During the same period of time, the
value of fixed-price-incentive (FPI)
contracts has increased by one-third.
Thte year, one DOD purchase dollar
in MX will he awarded on a PPI
Contract.

At this moment almost ?800 million
is being offered in incentives for su-
pr-rior contractor performance in the
nhiphuilding program. Some 46 ships
art? involved. One of the principal in-
c<-ntiv,- features is that standardiza-
tion of equipment within the ships
pumps, valves, motors and the like
i-S for the first time, a goal to be
nought by the contractor and rewarded
by the Government. This can be done
krau.-'f! a number of skilled people for
tho Naval Ship Systems Command
proved positively that the Government
would receive more than ?800 million
worth of value if the pumps and
valves were similar, not different.

Multiple incentives in contracting
are relatively new, hut will become
more and more common during the
next few year,. Incentives for cost,
schedule and performance improve-
ments are likely to be offered when-
ever the Government can measure
^ L?^! nflble y. the worth

trade-offs between the various ele-
ments of life cycle costs, and
to fundamental questions of cost
effectiveness.

This area is full of pitfalls. What
is the true value of standardization,
improved safety levels, improved crew
member efficiency? How do you
handle change orders without jeopar-
dizing; the contractor's opportunity
for reward?

How much value do you jilnec o
meeting; major milratoni'H, nrnl ho-
much on mucthiK' flu- final Hi']jvr
schedule? All thoKo and nmny ollio
questions havo to IK- immvitrtul, HQ
only by tlus military siiU- of Uiu (vim
but also by industry.

Certainly inc(!iitiv<! coiitrnrt.;*, nm
especially multiple iiin>ntivn con
tracts, will Uav an
on systems) ofi

of the improvement,

hard C on f
hard one

% qUeSti ns ' ""> a
answer (at least with

l! ^ U ' u
should the

. _.fAr ittrttaA i i " ^~* fc% * i *"<niL;c

lor increased systems effectiveness

Examinati

Defense Department Cited for
Support of Sheltered Workshops

_ The Defense Department has been
cited by Harold Russell, Chairman of
the President's Committee on Employ-
ment of the Handicapped, for its
support and cooperation in encourag-
ing defense business participation in
the sheltered workshops program.

The commendation was presented
,T Asslatant Secretary of Defense
(Installations and Logistics) Paul R
Jgnatiua during ceremonies at the
Pentagon on Dec. 20.

i n $,?P' B pr ? ram to help workshops
includes a directory listing the pro-
ductive capabilities of over 200 work
shops i which has been distributed to
nit S? procu *' eme t officers through-
out the country. Secretary Ignatius

has Htntod that priwurrrmml oJMrliili
m tho Military Dopm-lini'Mln ami ihi<
Defense Supply Afrrm-y slimilil run-
sidor mcludinfr \vorliulmpn im hliMfiV
lists for ifamiH Duty t < t in iinx
addition, a ln/]nt, cari'vinjr
ondoriwmmit of tlin workshop ]m>Ki-ani
and muioimiiii prlmu riinlnii-torn in

compete for HiilitiniitriH-lM" i>i nl fnrfi.'il
to every prime contract nwnnlctl Ijy
tho Defonso Dnpurlmcul.

Also, wovlcHhop ilinvtm-ii un- tnv>.
vide(l BcliocluloH of locally ,,,i,ni: ( niv ( l
JJOD jn-ocuj-ninnnt clliiiru fiu iFiitl Ihi-y
cnn attontl thoo hold in Uiclr v|-
emity.

Projeet PRIME

(Continued from Paffe 4)

permitted to employ a single appro-
priation for each DOD component for
all operating costs combining the ex-
isting appropriations for military per-
sonnel and operations and mainte-
nance. Such an amalgamation would
greatly facilitate the budgeting and
accounting for operating costs. But
even if two separate appropriations
are maintained, DOD will still com-
bine them for internal purposes and
convert for external reporting pur-
poses at the headquarters level. The
Navy is already receiving reports
which reflect full costs including costs
3f military personnel of all units of
both the Atlantic and Pacific Fleets.
The third change is the purification
sf appropriations so that all expense
.terns are associated with the operati-
ng appropriations and none with the
procurement or construction appro-
bation. Primarily, this involves
ihifting many items of spare parts
md similar consumables from con-
inning appropriations to operations,
t also involves moving a few capital
toms from operations appropriations
D continuing appropriations. Once this
3 fully accomplished, all expenses,
ml only expenses, will be included
:i the operating appropriation. DOD
natniction 7040.6, "Definition of Ex-
onses and Investment Costs," dated
opt, 1, 1966, carefully spells out the
i-iteria governing this purification,
'he care with which the instruction
-as developed is demonstrated by the
ict that it consumed five months of
:oady effort, went through 13 sepa-
ito revisions, and was analyzed in
tree separate DOD-wide reviews.
The final action necessary to
ihieve the goal of charging 100 per-
>nt of measurable expenses to oper-
ing activities is the extension of
orking capital to cover all items in
o operating appropriation. Such an
tension allows the association of
sts with the using activity at time
use. Under the former system, pur
ases were often made and the ap-
opriation charged by a central or-
.nization long before and far from
e time and place of use. Centrally
ocurod fuel or aviation spare parts
e examples of this. Such material
is them furnished "free" to the ulti-
ite user. Since these expenses were
t charged to him, the user had lit-
motivation to give them the land
management attention he gave to

ffense Industry Bulletin

items which actually cost him money.
Working capital solves this problem
by permitting costs to be held in sus-
pense from the time of purchase until
the time of issue for consumption. At
the time of issue for consumption,
they are charged to the user.

Working capital is not a new con-
cept. Many supply items are cur-
rently held in stock funds, and many
services in industrial funds. Stock
funds will be extended to include all
consumable material, at both whole-
sale and retail levels, and industrial
funds will be expanded to include
those wholesale service activities not
now under them. Finally, working
capital accounts within the operating
appropriation will be established for
local services, such as maintenance
and the motor pool. The realities of a
combat environment will he recog-
nized by charging for operating re-
sources at the time of movement to
the theater.

Effect on the Budget. The budget
process will change radically as a con-
sequence of Project PRIME. The FY
19C8 budget will be converted to ex-
pense terms prior to July 1, 1967,
when the new system becomes effec-
tive. FY 19G9 will see a full-scale
combined program/budget submission
and review in expense terms by pro-
gram elements and organisation units
within DOD, Congress, of course, will
retain the option of receiving it on
this basis.

Outlook for the Future. Project
PRIME moans that the manager's
flexibility in deciding on what re-
sources to use should be increased. He
should bo encouraged to think about,
for example, the best balance between
military personnel, civilian personnel
and contract personnel, or the opti-
mum degree of mechanization, in a
wide variety of situations. With the
financial segregations that now exist,
managers have little incentive for in-
vestigating such alternatives.

It means also that there should be
a tendency on the part of top man-
agement to move in the direction of
control of aggregates and away from
control by bits and pieces. It would
be expected that, as time goes on,
there will be less emphasis on indi-
vidual items of expense less detailed
control of manpower and less detailed
consumption rules for example and
more emphasis on expenses as a
whole.

Finally, the system should motivate
managers to be more concerned about

the efficient use of resources. Of
course, efficiency is only one criterion
for judging a manager, and attention
to efficiency must never be permitted
to overshadow the criterion of effec-
tiveness, whicb means getting the job
done, and done well. But managers
do need to know how efficiently their
subordinates are performing their as-
signed missions, and the new system
will help them learn this. Moreover,
as performance measurement criteria
change to incorporate this additional
information, the motivation will he
increased for managers to be con-
cerned with the wise use of resources,
thereby reducing the need for exhor-
tation, inspection, specified con-
straints, and other devices that are
now used as a substitute for a built-in
motivation.

Conclusion.

When Project PRIME "goes live" on
July 1, 1967, it will not function as a
perfect and complete invention. The
system faces many modifications and
probably years of refinement. While
the first programming system directly
affected a few hundred people work-
ing in the Pentagon, Project PRIME
will affect thousands throughout the
entire Defense establishment. The ex-
tent of the job to be done in education
alone is staggering.

Nevertheless, Project PRIME will
achieve one fundamental goal of
PPBS. It takes off from a meaningful
structure for planning and makes pos-
sible realistic appraisal of the degree
to which the performance lias fulfilled
the plan.

The environment never stands still
and the Defense management control
process in the United States is con-
stantly seeking to overtake a con-
tinually changing problem. Project
PRIME may represent a large enough
step to overcome this situation for a
white and, thus, gain some time for
beleaguered Defense managers. It will,
at least, restore to the legislature visi-
bility with respect to Defense matters
that some believe has been seriously
eroded over ISO years, and will mate-
rially assist In the proper discharge
of its constitutional responsibilities,

PPBS is no panacea. It is a good
idea, a part of an evolutionary stream
of ideas. It requires refinement and
Innovation if it is to remain useful in
coping with a dynamic environment
moving at an accelerating pace.

by
Cant. Frank Larson, USN

Occasionally we hear the complaint
that security controls create bottle-
necks for industry, however, more and
more businessmen today arc recogniz-
ing that security procedures within
their operation are as much a part of
their businesses as budgeting, plan-
ning, production, or auditing.

Why are industrial security controls
necessary? For this simple reason: to
deter espionage against industrial ca-
pacity of the United States. In analyz-
ing the espionage threat there is often
a tendency to go to extremes. There
are those who would magnify all as-
pects of the threat and so become
prophets of gloom. Others would dis-
count the capabilities of hostile espio-
nage and magnify their internal
difficulties. However, it is always more
dangerous to underrate than to over-
rate an enemy. For instance, U.S. ex-
perts predicted in 1946 that the Soviet
Union would not have an atomic bomb
before 1960. The world was shocked
when the Russians exploded their first
bomb in 1949, eleven years in advance
of the predicted date. Our scientists
made this estimate, based on the lead
time needed to develop a workable de-
vice for this nation. This 11-year pole
vault in technology can be attributed
an part to the Communist's success in
espionage successful in that they
were able to steal vital elements of in-
formation that reduced the lead time
they needed to develop this bomb and
at the same time avoid the errors and
trials that we encountered before
success was achieved. We need only
look at today's newspapers to recojr-
mze that the hostile threat of espit
nage directed toward the United
States appears to have increased
rather than diminished. We must be
prepared to meet this hostile threat.

indicating the degree of importance to
our national defense, is applied to the
idea. The next step is to research and
develop the idea, i.e., take it from the
idea stage and place it into a tangible
form such as a drawing, specification,
or proposal. Industry most frequently
is designated as the research and de-
velopment agency. From this stage the
project goes into testing of a proto-
type or model. Testing is done either
by industry or by the Government. In
any event, through these three stages
of what we call lead time, industry is
entrusted with vital defense informa-
tion.

The next stage is production. In the
production stage, protection of infor-
mation by industry must be afforded
and must extend in many instances
through the stage of delivering the
product into the ultimate possessor's
hands. When the product is in tho
hands of tho Government, we feel that
the secret has been kept. However, in-
dustry is still afforded access to tho
information by virtuo of continued
production of the system, or tho
necessity to maintain or perhaps
modify it. The period from the concep-
tion of an idea to the ronlmition of
the end product in the possession of

uf " / ! early understand the
Relationship of industrial security to
the process of manufacture of defense
products, it is necessary to break down
the process of production. First there
a the idea. This is the beginning of
ead time. Lead time is defined Us the

fame span beginning W hen any defense
pioject, program, or system originates
an idea .in the mind of someone either
"iL rJ ntlle ,^--mentan e d

tho Government may IK; wooilcH, moiifhn
and even yours. Tlu'oii^hnul tins
period of lead time, niiiny people In
industry, as well UN in (Jovurmiiont,
will be afl'ordtid IU;COHH Lo tlio damni-
fied information involved.

Tho will ohjoctivo of tin* iiidmilnnl

security program i.s to maintain th<>
security of daHHilioi) hi formal inn
throng-bout its lift!, from ibi birth ux
an idea until such timo an Mir proper
author! tint! in Oovornnii'Mt doturi)imn
that it can be dodaHwifiod.

How <Jo wo achiovo thin tdijcolivo?
One mrthod illicit 1m {Mm|)oralimi,
which implies tho dunl effort of IndUH-
try anil (lovornnuinl. If industry duos
its part mid finvrrnniont oan'N'ti nut
its obligations throtiKhmit, tin- poritnl
of production, .security onii bti iniijti-
tained.

The Pofonno IrMliiMtrinl HticurUy
Program in tho ({ovoriinicnt.'fi (crli-
niquo for protecting clnnMilli'd ilcrciiMr
information ontniHtod to ilcfi'iimi nui-
tractors. Tho toHinimio in not frlh fin-
industry in tho "Induittruil Hocin-iLy
Manual for Saforvimrdhi};' Climiiilln]
Inforniatinn" (AttucihtiuMil hi IH>
Form 441)- 'I'll' 1 manual ifi t!io Imok if
rulos for rjirryini 1 ; out, it micciflc Hcrin 1 -
ity agrooniiMit tiiKiiml by tin- <!nvorn-
mont and tho dofonm* I'mitriH-tor, Tin.
retiuinmiontH of tUo inanual HIT holli
realistic mid practical hiivlnjr ovolvH
from many yoarn of f'X|)orioiin> in
countorinf.;: oHpiimnj^* activity.

Once the idea iMee med' b
to our defense that its Comoro
rmse would affect adversely 0^"
taon.1 defense interest, a classification

na , -.., USN, is the
* ^ 0fRcc of Jndustrlal Se-
cunty, Defense Contract Admlnistra-
Uon Services, Defense Supply Agency.

Chief of the Field Management Divi-
In this position he had rcsponsi-
"^"nagement of tho mlll-
in

country.

across the

Whilo it nu'fvht appoav Uini itoniHIy
rnquirnmontH havo boon oxniindi'd in
tho latoHt edition of tbo nianuril, (In
principlon <if tho original dofunx^i
havo not chnngod, Hponidcit ax lo loch
niquosi havo boon not I'orlh mid WIM
plos of forinH and oilier Kiiiilunn
havo boon published to m ini>it; Oio mil-
tractor in cluing a bottur j<ili in nafo-
ffuarding vital information calruHlcil
to him.

A Himplo formula, which <>\plaiiiH
how tho program workn, in thitt:
a clearance" phm "nood-tn-kninv"
pqiuiln iu!<!(!HJt." In cOVct thin roMnulii
indicittoH that boforn an iudividuni to
authorized lu-ccfiii to (;IanHiflod tlofViiw
information, ho mut huv tui npprri-
prmto comi>any and povftomiul wwiirity
clearnnco equal to, or hlffhor thuii. tint
degrcfl of clarification of tlio liifornin.
tion to which lie require wwnn Jlciico
we come to tlio second pnrfc of Uio for-
mula which In equally Important: ft
need-to-know tho inforinnUon in ordin-
to oceompliBh an ofHdnl ohjwtlvo. One
without thn othor of UIOKK two olfl-
monte indicntoH that tho powm Is
unautliorixGcI. If unauthorised he? cun-
not legally ho afTordod ncroHH to clns-
fllficcl clofcnHR information.

Wo feel that our efforts in WPn .
ment arc only partially nuccesHful if

we merely set forth requirements. The
J: major portion of the mission must be
accomplished by industry industry
must implement the program in indus-
try. We assist, advise and monitor tho
individual contractor to insure that
the program ho lias in effect meets the
requirements of his security agree-
ment with the Government.

Within the Industrial Security
Manual are set forth all tho specifics
that are needed in order to maintain a
successful program within ;i contrac-
tor's facility. It takes an organ i/ation
in order to set forth the requirements,
render advice and assistance, and then
monitor those requirements as indus-
try implements them. This organisa-
tion is the Office of liuluHtrlal Security
under the Deputy for Contract Ad-
ministration Services of the Defense
Supply Agency (DMA) at Cameron
Station, Alexandria, Va.

There are three divisions in thin
office:

_ The Programs and Systems Divi-
sion establishes policy and procedure
the Industrial Security Regulation,
which controls the Government's re-
quirements; tho Industrial Security
Mtinual, which establishes industry re-
quirements; tho Cryptographic Sup-
plement to that manual for these con-
tractors who will require access (.<>
cryptographic information; tlie Indus-
trial Security Operating Manual for
Government field personnel; and other
publications, such as industrial secur-
ity letters to contractors and indus-
trial security bulletins to Government
agencies.

Tho Field Management Division
maintains operational control over the
Offices of Industrial Security in the II
Defense Contract Administration
Services Regions to assuro a uniform
application of tho program nationwide.

Tho Internntionnl Programs Divi-
sion is a now clement within the
Industrial Security Program. Its es-
tablishment wna necessitated by tho
Initiation of sales of U.S. defense
hardware to allied nations. When clas-
sified information becomes involved in
doing business with foreign contrac-
tors, tho International Programs Divi-
sion nets OB a catalyst between tho
United States and foreign govern-
ments and their contractors. In addi-
tion, when foreign governments or
contractors desire to place foreign
classified jobs in U.S. industry, it is
tho mission of the International Pro-
grams Division to assure that their
classified information is protected.

In addition to tho contra! Office of
Industrial Security nt DSA headquar-
ters and tho 11 regional offices
across the nation, a central Defense
industrial Security Clearance Office
(DISCO) was established to process
security clearances of industrial em-

ployees. DISCO was established in
Columbus, Ohio, in March 1965, It was
the result of a consolidation of Army
Navy and Air Force industrial security
offices. It is to this office that contrac-
tors, once they have a facility security
clearance, direct their requests for em-
ployee clearance's. Files of all contrac-
tor employees' clearances totaling over
a million and a half, which the De-
fense Department has issued to date
are maintained in this office. Tho files'
also contain a central record of all
cleared U.S. defense contractors.
totalling nearly 15,000 facilities.

Each Defense Contract Administra-
tion Services Region has an Office of
Industrial Security which functions as
tho cognizant .security office for all
defense contractors in its geographical
area. It is from thin office that clear-
ances of facilities are issued and it is
here that contractors' programs for
this protection of classified defense
information are monitored.

It might nppuar that the mmsion of
tho Office of Industrial Security is well
under control; that there arc no
further requirements. But improve-
ments are coming.

Compute, for example, constitute
a TICW technology in tho processing of
classified defense information and rec-
ord keeping. Contractors and the Gov-
ernment; are developing new standards
for insuring security of the informa-
tion processed by those machines. We
are attempting to speed up our clear-
ance actionn for company employees
as well (in for new facilities.

We arc constantly striving to im-
prove the quality of our security hi-
HpcetioiiH. An industrial security rep-
resentative in tho field docs a disserv-
ice to industry when he does not point
out whore it is deficient. We are
satisfied that industry will do an ade-
quate job if it knows what to do, in
givtm advice as to how to accomplish
it, and Is periodically monitored to
assure that the application of proce-
dures is current. This confidence to
date has not been misplaced.

Much progress 1ms boon made in the
approximately two years that consoli-
dated industrial security has been in
operation. Industry is implementing
the program. In fact, the majority of
all cleared defense contractors main-
tain nt least an adequate industrial
security program today. In instances
whore deficiencies exist, contractors
Imvcs taken the most expeditious ac-
tion to correct thorn, thereby improv-
ing their programs,

Tho Government security team is
exerting the maximum effort to pro-
vent hostile espionage. Success of the
program depends on Industry's efforts
to carry it out.

Contractors Cited
for Zero Defects

The highest honor in the Zero De-
tects Program an Air Force prime
contractor can receive has been ac-
corded to eight defense firms in recog-
nition of outstanding records in the
neld of industrial zero defects durintr
tho past 18 months.

Presented for the first time, the Air
I'orco Craftsmanship Awards went to
throe divisions of the Radio Corpora-
tion of America the Astro-Electron-
ics Div., Princeton, N.J.; Communica-

Mis.sile & Surface Radar Div., Moores-

tovvn, N,J.

Other contractors who received
awards are tho General Electric Co..
PUght Propulsion Div., West Lynn
Mass.; General Electric Co., Evcndale
facility, Cincinnati, Ohio; Lockheed
Missile & Space Co., Sunnyvale, Calif.;
Aerojet Goneral Corp.. Sacramento,
^alil.; and Douglas Aircraft Co., Mis-
Div., ~"

To win the Craftsmanship Award
each firm showed performance records
lor at least 18 mouths clearly reflect-
ing achievements against pro-set
goals. Contract administration person-
nel with cither the Air Force Systems
Command's Air Force Contract Man-
agement Div., Los Angeles, Calif., or
the Defense Contract Administration
Services validated the performance
data and determined the adequacy and
realism of tho goals.

A select number of employees from
tho eight firms are being given
Craftsmanship Award pins and their
names are inscribed on an accompany-
ing scroll. In addition, Zero Defects
banners go with the award and are
lining formally presented to the em-
ployees as a group.

Defense Industry Bulletin

Army Pilot
Training Increased

The U.S. Army is planning to tem-
porarily increase its monthly training
quota of pilots from 410 to 010 and
Pinna to expand existing facilities to
handle the increased training load.

All primary helicopter training is
now conducted at Fort Woltors. fex.,

which will be expanded to handle ad-
ditional trainees.

To provide additional training facil-
t S> Panned close-out of Hunter
AFB, Ga., will be extended beyond
next July and will be used in conjunc-
tion with the Army's nearby post at
Fort Stewart, Ga.

Advanced /light training and transi-
tion training are now carried out at
the Army Aviation Center, Fort
Wicker, Ala. Various tests and devel-
opment activities are also performed
there.

During the last few years we have
witnessed an increase in activity in
DOD directed toward improving man-
agement in the weapons acquisition
process. Some of this activity has re-
sulted in the issuance of DOD direc-
tives and manuals to which the Serv-
ices and industry have heen required
to respond. The most notable of these
have been: DOD/NASA PERT Cost
Guide; DOD Directive 7041.1, "Cost
and Economic Information System
(CETS);" and DOD Directive 3200.9,
"Contract Definition."

More recently, the Defense com-
munity has been exposed to some new
nomenclature in the form of Resource
Management Systems, Assets Man-
agement Systems, Selected Acquisi-
tions Information and Management
System (SAIMS), Cost Information
Reports (CIR), Contract Funds Status
Report (CFSR), and a Performance
Measurement System.

Simultaneously, the Air Force has
also been engaged in an extensive
effort to improve its overall manage-
ment capability in this area. Manuals
on configuration management and
management of contractor data and
reports are products of this general
effort.

Still another project being under-
taken by the Air Force Systems Com-
mand (AFSC) has been directed
toward improving the command's
capability to develop credible cost
estimates and strengthening the com-
mand's program cost control capa-
bility. Some of the results of this
effort have been the AFSC Cost Infor-
mation System (CIS) and Cost Ac-
complishment System.

This apparent proliferation of man-
agement systems, with their attendant
reporting requirements, is undoubtedly
the most talked about and least under-
stood effort currently under way in
DOD. The purpose of this article is to
place these various efforts in proper
context and to describe the Air Force
approach for an improved financial
management system which satisfies
the DOD concepts and objectives.

The DOD Framework,

During the past several months, the
Assistant Secretary of Defehge
(Comptroller) has made several public
pronouncements concerning Resource
Management Systems. He has defined
Resource Management Systems as "all

U. Col. liana If. DrienHimok, USAF
Asst. to Dci>. for System Maimg('in<'iil
Office of Asst. Secretary of the Air Force (Financial

the systems that aid DOD manage-
ment in their task of assuring that
resources are obtained and used both
effectively and efficiently in the ac-
complishment of DOD objectives."
The systems which are included within
this definition are:

Programming and BudRetiiij? SVH-
tcm concerned with the process of
planning for resources to meet stated
objectives and justifying these nneAti
to Congress.

Operating Management System-

directed toward the management oT
resources applied directly to and in
support of the operating commands
in DOD.

o Inventory Management 8yHte.ni

concerned with the process of plan-
ning and control of the myriad of
items which flow through DOD'n gi-
gantic supply systems.

Acquisitions Information and
Management System concerned with
the management of weapon and sup-
port systems acquisition process.

The last two system arena Inven-
tory Management System and Acqul-

Hition.s MiniafveiiH'Ml. .Syiilem rirc coin
hinod under tin; hriutiniv nf AiiiiiUi
Management. Thm in frrnplnVtilly (ire
.sented in Fifi'im! 1.

The first tlirno nroiiw an- pvhimrilj
cnncmied with DOD in-liomio nun mo-
ment funotioim; however, lh fmii'lli
'"on ....... AwjiiLsititniH Informal icui mid

Management Kyntcin ...... ciMjiiln-ii Hn;;r

involvement with inthintry. A murn
complete discuwuon i>T thin ami in (he
wal objective of thin article.

Selected ArqiiiHltloiiH Infoi ntullim nml
Management .Syntem (SAIMS).

Tinder the hemlinjv nf
Information ami MimMj-'fi ,

there oxinl; nevonil HiihnyMl^mit, cneli of
which r<H|uii'(!H Hoinc inU'rchanjrc he-
twttnn DO]) nni | jn.liuilry. Tin-re
nro haJiirally two utcjrrlt>it nf mifi-

with "deletion" nrciuijiltlnnii anil om>
directed at "other" acijuiniU.niii, ['].
firm cntttffory luut li<>e,i nnni( ( j Melrrletl
A(!(]uitiitionH rnfwi'iiuiMon mid Ainu-
t SyHtnin (MAIMS), KAIMH I,
mi th(i ttynlmn corner ..... I

RESOURCE MAHA6EMENT SYSTEMS

ASSETS MANAGEMENT SYSTEMS

PROGRAMMING

&
BUDGETING

OPERATIONS

MANAGEMENT

SYSTEM

INVENTORY

MANAGEMENT

SYSTEM

ACQUISITION
INFORMATION

AND

MANAGEMENT
SYSTEM

January 1967

the management of the acquisition of
r selected capital assets. This is the
process of acquiring: weapon and sup-
port systems of the quality and
configuration needed by DOD, on
schedule and at lowest cost. The re-
lationship of the components of
SAIMS within the overall Resource
Management Systems effort is illus-
trated hy the diagram shown in Fig-
ure 2.

The SAIMS concept can be consid-
ered as a reorientation and consolida-
tion within a single DOD framework
of several components that have been
undergoing development for some
time. Referring to Figure 2:

Items two, three and four, prior
to reorientation, were the basic parts
of the DOD Cost and Economic Infor-
mation System (CEIS).

Hems three and four were in-
cluded as basic components of the
AFSC Cost Information System
(CIS). CIS, initially outlined in AFSC
Letter 173-2, Oct. 1, 1965, was essen-
tially an integration of several con-
tractor cost reports (similar to the
CIR and CFSR then under develop-
ment) and four in-house reports The
approved DOD reports for CIR and
CFSR have now replaced their AFSC
counterparts in the CIS, as planned,
thus insuring that no overlapping or
duplicate reporting requirements exist.

Items five and six are treated in
the current draft specification on
Schedule and Cost Planning and Con-
trol, originated by the Office of the
Secretary of Defense (OSD), and em-

body the same concepts contained in
a similar specification currently in use
by the Aii' Force.

Economic Information System (EIS).

The Economic Information System
reports arc concerned with plant-wide
information as well as program-
oriented information. EIS is designed
to collect the data necessary for
analysis of the economic impact of de-
fense spending by geographical area
and industry. It requires reporting on
many programs and includes data on
commercial as well as Government
sales.

Contract Funds Status Report (CFSR).

The Contract Funds Status Report
was developed to provide information
about contract funding -requirements
by fiscal year for specific programs to
assist the program director in:

B Updating and forecasting con-
tract fund requirements.

Planning and decision making on
changes in fund requirements.

Developing fund requirements
and budget estimates in support of ap-
proved programs.

Where specifically designated in
contracts, this report will supersede
use of the familiar DD Form 1097 and
other similar funds status reports.

Cost Information Reports (CIR).

The Cost Information Reports have

been approved by the Bureau of the

RESOURCE MANAGEMENT SYSTEMS

ASSETS MANAGEA1ENT SYSTEMS

PROGRAMMING

OPERATIONS

INVENTORY

ACQUISITION
INFORMATION

MANAGEMENT

AND

BUDGETING

SYSTEM

MANAGEMENT

SYSTEM

SAIMS

OTHER
CAPITAL
ACQUISmONSj

ECONOMIC
INFORMATION
SYSTEM 2

COST
INFORMATION
REPORTS 3

CONTRACT
FUNDS STATUS
REPORT 4

PERFORMANCE MEASURE/

COST

SCHEDULE

TEI

Budget. There has been a general
orientation effort explaining CIR to
industry sponsored by the Office of the
Assistant Secretary of Defense
(Comptroller). Since DOD documents
on CIR are now available, it will not
be discussed in any detail in this
article. However, n order to clarify
how CIR fits into the overall SAIMS
effort, some general comments are re-
quired concerning what CIR is, and is
not.

^ CIR was developed primarily to pro-
vide information on actual costs, in-
curred as well as estimated costs, to
complete programs throughout the
acquisition cycle of a program in a
consistent manner. The data will be
used in support of cost estimating,
programming, budgeting and, where
applicable, procurement activities. Ad-
ditionally, this same information wilt
be used as input to a data bank for use
in developing- cost estimating relation-
ships and cost estimates for future
programs. The mechanism for con-
trolling the use of CIR reports is the
CIR Data Plan, indicating the items
to be covered by the report and the
level of detail. A CIR Data Plan must
be submitted for each weapon/support
.system where CIR is to be imple-
mented. The plan must be reviewed
and approved by the OSD CIR Data
Plan Review Committee prior to im-
plementation.

It should be understood, however,
that CIR and the requirements for
CIR Data Plan approval wil 1 '
way be construed to prescribe

Figure 2.

Defense Industry Bulletin

iletail, but does spell out criteria, gen-
rral characteristics and desired report-
in jj requirements. Where effective
management control systems are in
uso by contractors, there is no intent
to change thorn. Rather the approach
is to interlock the Government report-
ing requirements directly with con-
tractors' internal systems.

Having discussed how the various
systems and components fit into the
overall Resource Management Systems
framework, the next area that re-
quires some explanation is the current
Air Force efforts to respond to the
overall DOD framework and, more
specifically, the DOD SAIMS develop-
ment program.

The Air Force Approach to an
Integrated System.

In the past, Government manage-
ment systems have frequently ad-
dressed only fragments of the total
management information problem.
Typically, too little thought has been
given to the relationship of the sub-
systems or components to overall
information requirements. This kind
of approach has often resulted in over-
lapping 01- duplicate requirements,
omissions, confusion and, in the end,
ineffective systems.

While we are still addressing the
overall information problem by its
components, we are now doing so with
the total system design well in mind.
Additionally, we are providing the
flexibility to add the other related
components as they are developed,

The Air Force has recognized that
what is really new in the design of
management systems within DOD is
uniformity of approach to provide the
information needed without a dispro-
portionate diversion of resources by
the Services and industry. While all
areas of reporting are continually
being review*, particular emphasis
ha* been placed in the area of

Umwl nia " affement ^formation.
Under the guidance and direction pro-
Mded by the Assistant Secretary of
the Air Force (Financial Manage
men , the Air Force has been wo? 1-

1 Jr lopaflnancial management
"joimation reporting structure which

k n if afl ^ .'T' nee " * " nt
kinds of financial data, yet minimizes
the volume and variety of
by relatl^ them to

addition, the financial data is directly
related to schedule and technical per-
formance information.

Since the focal point for systems
management is the System Program
Office (SPO) , and since the Air Force
point of contact with industry is also
the SPO, the logical place to integrate
any management system requirejnents
into a meaningful product is at the
SPO level. The approach being taken
provides the overall framework within
which the SPO can more effectively
exercise its business management re-
sponsibilities and can also be more
responsive to higher echelon require-
ments. There are three key areas
which tie this approach together into
a single meaningful system:

An integrated financial manage-
ment reporting system which provides
useable summary data for all echelonn
of the Air Force.

A specification for program plan-
ning and control which outlines the
criteria that an acceptable system
must meet.

An integrated work breakdown
structure which requires both Ail-
Force and industry participation in
order to identify all elements with
which the contract is concerned.

Structure.

Them aro currently nine major pro-
grams in the DOD program budKfit
structure. 1'Iach of the jM'ognmis is
separated into elements and for (uioh
of the program elements the cn.sl nite-
gorios of rtisearc!) ami doveliipnwnt
investment, and operating co'itu m-n
considered. However, in SAIMS
we are concerned primarily with Uin
research and development uml invcnt-
meat costs of the major program (>l<-
ments. To illustrate the foivjjoiiift;
Program IV, Airlift, contiumi, IIH Q
program element, the (T-ftA. Tln' IH a
major support system \vli it'll in n 3
selected ac!<]iil.4ition and IUKI l^mi
designated for nmnaj.vemenl, (iinphimlH,
The prinmry maiutKOincaL doni-
ment within DOD for <;onitmniinilJnjr
what the currently approved [iliiii IH
for any #iven proj-'ram element, in (hi?
Five Year Defense Program (KYDP).
Thn Services are re^iiirrd (o document
their requirnmenU in mijiport of (hn
Five Year Program and any HHUIK.IH
that may hn made to it. Thin in nor-
mally accomplished by Hut SPO tniinff
inputs from all con trim torn and (fov- .
crnnifliit ngoiK-fRH concerned with (tin
program. Th1 information h< roniioli-
dated, analy^od and HiihinlUed Hiiiuifrh
channelH to OS1) us a I'rnffrinn

FINANCIAL MANAGEMENT REPORTING STRUCTURE

" ........ IIIIIUIIIIMIII,

FINANCIAL I f v ,.
PLAN 5 YEAR

PLAN

nciiiiiiiiii,,iiMiiiiiii,iiiiiiii

CONTRACT FUNDS
STATUS REPORT

CONTRACT
COST DATA
SUMMARY

Figur

January 1967

ItR(|H(!Kt (TOR). If the change in ap-
proved, thi! Five Yi-ar Program is
amended anil funds are madi- avail-
ble, or deleted, l.o cover t,h<> revised
program.

Cimtract l''iiinlH SlahiH Kciiurt (CFSU).

Tn the Air Koivr, thn reporting
documi'iil.H suhmiUi'd by industry to
the HI'O, outlining conlract funds re-
<]iiircmiuit!i, have been tin- !)I) Komi
|0!)7, . (loiiti'iii'lor I'mancial K<>i|uire-
nie.abi 1-jHl.inmti' (CKUI'!), and local
foi-iiiii. Tin; (Hllcr (if A;i,'il;i|ant. Secri---
lary of Di'lViiHc (<!umpt roller) in rur-
nmtly developing a ( lout racl. Finnic
KliduK Report (<!KSIt) fur Ihi'.; pur-
(HIM. Thin ivpoit, whi'ii n-(|iic;;(ci| |,y
Urn Hl'O, will replace tin- IH) |<'orni
1097 and all :mnila r fund.'i i;latu!i rc
porbi in current u:it>.

Tint (M-'MJt I:; designed tn provide
Hindu informalion by (hint I yi-ar. Thid
ri'piu't cnahli'H (hi- Air I'lircr | |, ro ,
vide OSI) U'ifb a num. di'lailnl
atialyitin of total fuml iTi|uin-in t -iihi
atld idcaUllrs Ifn- bji;;in mi U'hii'h )hr
Klv Vein- Pron'ram rnliniali-ii wen-
made, i.ti., whrlhi'r fiilur.'
nicnUt arc on run
idcatilli'd, or incrcly

llnwt'Vrr, Ihi' projcfl lull nl' fund re-
(]iiin'ini'nt!i for fuhn'c ycam tncaan
very littln nnl.. !1; i it can !>< .'.upimi ir ( |
hy actual nutl. ..xpi-rli'iin- and mxrir
nicmtiiri' of |)i'i-fiM-iiianc.. iiKiiinnt lh.-
i ri'(|iiin'jiii'iH)i In did.', The re
ulrui-tiiiv iilinwitiK lliiii Kind
of a ntlulioiuihip In -iliovvn in Klj-im- II.

'I'lll! ('uiltl'IK'L (!ii!t

..Hff,, c ,| t ( ,
total .-ontract

COHt data for
broken out b

. cos

primarily ,| n fl lffllod to co]kct
,. t data r,,r a.m]y a i 8 in BUp .

bud^t i. rani(!H |; R aiul PGR , S

' "''ma cost data aro i nput to a cost
<ltii bank for developing cost oti-
matln K "'iHtionshipa an.i OH t oati-
'H IW futui-f! B

m. and nii K i,,o, which constitute
idctint puii ( ,r Uio costs of a
'"I'll nylcm, furtlK-r barkup h rc-
].', Uitmn

may l,n

lii 1m Hubmittiid alontf with
Hut Conlpai't Cont Duta Summary.

In tbojic canes wbcro Ui HyHtm is
''n^'i'injr pi'odurtion, a Tro^i'dHH Cuvvn
Itcpurl. may abio lm i*i|unHted for tho
si'lcclcd IiI-vahH- items cited above.
'I'lH'Hi- i-rjiorlM, wliidi provide a dif.
fi-rcnl, ivrunpinir of tin; wwl data, crvn
n mhlilioini] hiLfltup informiitioti in
]i|mrt nf I'CIIt's, budget rc(|iiirc-
iii'MilH, future i-HtlmnlcH, ek. Cost data
frum lli.>;ii> rcjiortH ttlmi provide input
lo tin- ila!.a Irnnkfi.

'I'll' 1 vi'iioi-fs ilrm-rilii-il in the forn-
KU|IIK pi'itvliN- banically the H umn in-
l'"i-inalioii mont inujor nuitradtors
liavi- pivviimnly HuhinitU'd to tho Air
Foivc as a rciiuin'moat of Urn Con-
li'tii'ltn 1 Ctiiit Study,

ThuiiH rcportmlo not fiatisfy the pro-
Ki'iim director's innnaKMnKnk infovtmi-
lion n'i|iiirf'mi'iit:i, howtivor.

A MaimKi'iiionl: Summary l{(!port nt
tumw lypu in m[iiii-(!(l on H monthly
liatihi l.o prdvlilf! mi uHNiwmnnnl of tho

FIHAHCIAl HAHAGEHEHT REPORIIHG SIRUCTURE

1J IUWIS I riHAl DOLIARS
MAIIIS HK'llHT I DtF/NOTDLF

PtHFOHMANCl

SIIMMflHV

I..--M *.*,* \ , , .,, ,, t ,,_

CONlftACr
COS! DATA

suwmny

COS!

SCIKOIfU

fUNCTIONAL
COS I HOUR

COST

JfJIOHMAIION

JIEPORF

Figure -I.

contractor's performance to date
against contract requirements. It
should answer tho questions: What is
the value of work accomplished to
'late? This report should be derived
from the contractor's internal plan-
ning and control system. It should
contain traceable information from
the contract line items through the
contractor's internal control systems
and be capable of flagging potential
problems in sufficient time to permit
corrective action. This same report
will also assist in tho analysis of fund
requirements.

The Management Summary Report
should bn Mupported by narrative prob-
lem analysis and/or variance analysis
reports designed to provide an aasess-
mtjnt of actual and potential problem
iireas (whether they be co.st, tichedule,
or technical) which impact on contract
performance.

The reporting structure, shown in
Figure 4, has been developed hi such
a way that the reports are interre-
lated, serve tho SPO'u financial man-
agement reporting requiromonts, pro-
vide the information required for
higher level budgeting, prnffriunmlnK
and PCU procedures, and satisfy the
RAIMK objective. Particularly impor-
tant ij{ the fact that alt of tho reports
are derived from tho same ImnU: con-
tractor data. However, Cor tho re-
ported information to have real value,
the data must not only bo derived di-
rectly from the contractor's systems,
it numt also represent the way the
work is actually accomplished and the
cowls are actually accumulated.

Criteria for Evaluating a Contractor's
System A Specification

In pant years a number of tech-
niques have been developed within
DOD specifically designed to provide
some measure of contractor perform-
ance, particularly in the area of costs
and schedule.

While the basic concepts and objec-
tives of moat of the techniques de-
veloped were very similar, they
usually resulted in additional reports
being levied on tho contractor.

Those techniques, like PERT COST,
were often indiscriminately imple-
mented sometimes on top of perfectly
valid existing contractor systems and
the end result was a redundant report-
ing; system developed solely to satisfy
the specific technique.

Industry Bulletin

evolve as configuration elements
(CE's) are identified. Eventually, all
the CE's and deliverable end items
must be contained somewhere in the
WBS. This evolutionary phenomenon
is shown in Figure 7.

A WBS, at the summary level, ap-
plied at the beginning of the program
life cycle will serve as a common
thread throughout the life of the pro-
gram. Initially, it serves as a basis
for the preparation of Requests for
Proposal, specification tree, con-
tractor responses, and contract line
items. It becomes the basis for con-
figuration management, end item iden-

tification, CIR data plans and program
documentation. AH the program
evolves, it becomes the basis for iden-
tifying consistent reporting categories
and for tracking actual performance
against the plan.

For a WBS to be responsive to all
of the reporting requirements for a
given program, the designated report-
ing structure must be developed in
such a way that H can accommodate
the way the Air Force contracts for
and manages the program. This can be
accomplished whore contract line items
are structured in such a way that they
represent natural aggregations of <te-

EVOLUTIONARY DEVELOPMENT OF THE WORK BREAKDOWN STRUCTURE

[CONCEPTUAL

SYSTEM SYSTEM SYSTEM

SYSTEM TSYSfEM

Figure 7.

DELIVERABLE END ITEMS - III VALUE HEMS - MAJOR SUBCONTRACTORS
CONFIGURATION MANAGEMENT ENO HEMS

CONTRACTORS' INTERNAL

PLANNING AND CONTROL SYSTEMS

(BASED ON WAY WORK ACTUALLY PERFORMED)

ST COLLECTION CENTERS

AIRCRAFT BREAKDOWN STRUCTURE

NAUTICAL
VEHICLE

TRAINING

ADVANCE
BUY

Xtt

AGE

SYSTEMS SYSTEMS DATA
TEST ;NGINEERINC
ROT6E RDTSE

XM m mi

SITE

WEAPON
SYSTEM

flNTEGRATlW
& 10

LASSEMBLY_J

JPHOPULSION
1 20

OTHER

;

NSTMLED
EQUIP
301

KNG
0?

IACE

[3M

ATA
B7

AERO
VEH
101

TUNG
102

AGE!
[UMJ

DATA ENGINE TUNG JAOE DAW
10? 201 202 ZM 207

Figure 8,

tfeme Industry Bulletin

liverable contract end items. These arc
the same end items for which perform-
ance specifications are written and
against which schedules arc developed
and costs are monitored.

AFSC is currently preparing a
manual standardising 1 the preparation
of work statements which requires
just such a correlation. Contract defi-
nition procedures also support this
kind of an approach. Moreover, sev-
eral Air Force projects are already
following this approach so that the
feasibility has been demonstrated.

Much of the confusion surrounding
the development of WHS's IK caused
by rigid application of "total system"
structures for each contract in a pro-
gram. This is not the way wo man tig*
our business, however. An example of
the current CIR WBS for aircraft Js
as follows:

Total Aircraft System:

Air Vehicle
Air frame

Propulsion

Engine

Navigation-Electronic System
Aerospace Ground Equipment
Training-
Data

Etc.

In actual cnsos, tho Air Forces con-
tracts with a prime contractor to build
the air vehicle. Historically, contracts
are written separately for propulsion.
Normally, wo also contract woparntcly
for many electronics .subsystems (nav-
igation, communications, flm control,
reconnaissance, etc.) and each of thorn
separate contracts include appropriate
aerospace ground equipment, training
and data requirements. H should 1m
quite obvious tlmt the CIR WBS, de-
veloped to satisfy total system coat
analysis purposes, must he modified
somewhat if it la to bo rcsponnlvo to
the SPO's total responsibility in man-
aging tho program. This can bo effec-
tively (lotio, however, by n I 0ff lcnl
arrangement of the total program
structure and some uniformity in iden-
tifying contract line items of the many
contracts.

A simple coding; arrangement pro-
vides a way of summarising totnl pro-
gram costs, broken out by selected
categories. Schedule and technical in-
formation can be related in the same
way.

Figure 8 represents an aircraft

For various reasons reports gener-
ally wen. 1 not tied into the contractor's
actual operating systems. Conse-
quently, the reports, generated solely
to satisfy Government reporting re-
quirements, did not really reflect the
tnie status of the program being re-
ported on.

We have now come to realize that
any valid measurement of contractor
performance must derive directly from
the contractor's internal planning and
control system. Further, where valid
planning and control systems exist, we
should use them and not try to im-
pose another system OH top of them.
The evolution of this approach is
shown in Figure 5.

The Air Force approach to a solu-
tion of this problem is to stop impos-
ing rigid techniques and, instead, to
outline the basic criteria which a con-
tractor's internal planning and control
system must meet to satisfy our re-
quirements. These criteria, which are
based on the way a well managed con-
tractor conducts his business, are em-
bodied in a specification. The major
point here is that the contractor is
being given the basic criteria that his
internal system must meet, and not
the mechanical detail of an externally
designed and rigidly imposed system.
Since many management functions
must be served by information derived
from a contractor's management con-
trol system, and a contractor's flexi-
bility in deciding how most effectively
to manage his activities is to be pre-
served, a specification approach is
considered essential. In general, the
specification requires that the contrac-
tor operate one integrated planning
and control system to support both his
internal management of the program
and for reporting cost and schedule
information to the Government. This
information can then be progressively
summarized for higher levels of man-
agement, A joint evaluation team as-
sures the mutual understanding and
acceptance of the system in meeting
the needs of both contractor and Air
Force management.

We think that this is a practical
approach and, as a matter of fact,
have several major contractors cur-
rently operating under this concept,

Integrated Work Breakdown Structure
(WBS).

A planning and control system meet-
ing the Air Force specification will be
based on an integrated work break-

down structure (WBS) which pro-
vides the framework within which the
work required to accomplish contract
objectives is identified and scheduled,
and within which the cost of this work
is planned and controlled.

As shown on Figure 6, the upper
levels of the WBS are provided by the
Air Force and constitute the structure
for summary reporting of cost, sched-
ule and related technical information
to the Government. Further expansion
of the WES below the specified re-
porting level is the responsibility of
the contractor. A general guideline to
follow here is that the WBS must re-
flect the way in which the work is
accomplished.

The lower levels of the WBS will
vary from project to project depend-
ing on the contractor's organization,
design complexity, technical risk, con-
figuration management aspects, repro-
curement requirements, etc.

The Office of the Director of De-
fense Research and Engineering;
(DDR&E) is currently engaged in a
project to develop uniform work
breakdown structures, at the summary
level. By limiting 1 the selection of uni-
form elements of the WBS to the up-
per levels (the top three-) and specify-
ing guidelines for extension below HUB
point, uniform summary structure
essential for management rojiorthitf
and decision milking are provided.
At the same time flexibility of UK;
content of tho lower levels, required
to accommodate varying contractor
operations, is preserved.

One point not clearly understood by
many is that the complete WHS doeu
not automatically emerge at the begin-
ning of the program. Its development
evolves through the definition phiiKr,
or its equivalent, and normally !H not
totally defined until well into the de-
velopment phase. WHS elements will

OOD/NASA PERT COST
GUIDE

PERT COST
IMPLEMENTATION

RECOMMENDED
APPROACH

WORK

BREAKDOWN

STflllCTLIRE

PACKAGES
13 MONTHS
1100,0001

Figure 5.

INTEGRATED WORK BREAKDOWN STRUCTURE

CONTRACTOR -

CONTRACT TASKS-

CONTRACT END ITEMS,

SYSTEMS.

MAJOR SUB-CO'NTft

HI -VALUE

OUTLINE CRITERIA
HIE CONTRACTOR'S INKHNAL
SYSTEM MUSI MEE1 TO
COVT fttquiREMENES

Figure 6.

January 1967

(CK's) are identified. Kventually, nil oVnraeiital inn. AH (lie p,.,,,,

the ('K':i iirnl deliveral>lc end ileins evolves, it, becomes the ba.si:; fur j

muni. In' ' l" I somewhere in (he 1 ifyiii); compiler]!, report inf.; eal,iv<

WHS. Tliiii evolutionary phe ncnmi and fur Iracluiifv acl.ual

A WHS, at Ilie [luminary level, up. ],', WHS to be rcmmimivo (,,

* : : '
""<> .

''>V'<i-. I M

uii '

.:.,!,,,

n v i>i >, in i in- tminiiim ,v u-vei, uji I 1 (ll a VV no IO lie VC!i|)()]|iilVl' (i II l ' IN en r

ilic.l al Ihe bee.inniniv of the pn.r.nmi of (he report iniv requirement f, ir '' ni '""al standiirdiy 1 ;!!. . ^i '"'''I' 111 '""!?

H 1 i I I I " . . T k **'"l-ilrll( k ll1 l *ltHfc11liJJ

iln cycle will iiiTvr as a cor u K iven pnir.nun, tin- th'sifvnated n.p,,,.( Worlt l.'iten, ( , nts ,. . ' (l " n

hreatl Ilinilll'll'iUt the life of Hie urn in,,- iih-nrhir.. i.ui>:< 1 .,..!.,' , . " J 11 "!, jtneli , .". wllu '' 1 Vetmini-t

lluvad llininrh.mt Ihe life of the pro j,, K nlrurluiv inust le" .leveion'ed'"^ Jll!it ' mit ' l] '' onrt'eVr WnK ' h n ' t!llir( ' !i

r.ri". lnililly. il MTV,, a, a ),.<! such a way that il, can acnnn modale - liliutl '"'<"'<'.ln, ," K ^'"'^"-t - H.-ll-

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rrnpnsijil, iipeciticalimi tree, coti and nmniLueii (he pnumiin. 'I'l,;., ,,.,,, ,

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EVOLUTIONARY DEVELOPMENT OF THE WORK BREAKDOWN STRUCTURE

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tlt'iilt-i-, IMiilimiinil, Vu.

<mi ''^^V"". 1 "' 11 " 1111 '^ 111 "' Cmi - 91,117,-
l>8. .WO,Kfifl ImUluii ,,f iipn|Nxy|.honii 3iy.lv.v-

,,,,'.- , l) ;' r , <1 " 11 " I'l-'i-Boinu-l HiiiMioct Con-
ti-r, l'liilndi'l|ililri. 1'n.

iii',1?, H ^ rvl<>l! '"' (; "-' N(!W VoH( City. N.V.
*B.(!14, 11. 2l 1 o 1 (lflO | (n ll>m of Jl'--4 jUi
ruol Dufdiiiu. liuiil HuiMily Center, Alox-
ninli'iii, Vn,
Hinrlnir lli'fliilnff Cu.. New Yin-1* t!](.v, N.Y

,..

nil?. Dofeii
aiiili'lti, Vn.

Hui.|n.i-L (Junior, Alox-

,,,
I ,IIH ,,r , i',,,i j, tt fhlL .|, \ i

M"f l n H !lV, t) l ! f ( '' ! l()tl . A lox ni id r In, Vn.

, ,. - -- .-

I-nol || mid unnolhii. In IPO (Ju-

to vru-liiiiH InntfillntltHin in Arlwmii,
I'lilironija, Nt'viuln. Onwun mill \VanhliiK-
t<m. l)i'fnii ( . iMiol Htimily Center, Aloxiin-

Itulibor l-'nltrlrntorn, (irnnlnvllle, W. Vn.
Sa.-MH.HHd. JHia.ilflO nninimiitli! miiLtr, ..... ( -ti.
I't'i ..... 'L' I'i'i'HiKdifl Kiinintrt Ccnlor. I'lillu-
ili'lpliln, 1'n,

lljllii Mfit. Co., Coimiiffii, Tenn, $l,(IHH,4IKi.
fl,n(M) ifiii lltu'i-it. T)i.fi>niU! Periiininvl Hun-
imrt renlcr, I'lilliuli'h.liln, I'n.
I'linioiT Unjr (In,, Kiiiiiiiiii (!tly, Mn. aa.(t7i..
1)11(1. HI,I)OI1.(I(I(1 iHilyiiroiiylvno nniullinKH.
I t-fiintH! (imir<nil Hin.pl.v (Jcntor, UlchntHinl,
Vn,

ChnHo Itiitf Co., Nxv- York (!H,y, N.Y. Sl.-
i!H(1 lltlll. R 0011,1101) iK.lvun.iiliyleno imiiitlmifH.
1 vft'iiHi' (n'linnil Hinnily (it-Titri 1 , HkJiiiiom!,
Vn.

Stniilfor (^liemknt <;o. f New Ym-k Clly, N,Y
S1.1HII.I17I). l!K7,fi01 xnlliiiiH .if nlrcrnfL tur-
diio .'iiHliit' liilirlenllnit nil. ItofmnitR I-'ucl
SiiPlily (li'iHi'i-. Alpxnndrln, Vn.
Hoynl l.tilirlrnntH Co., Hniioviir, N,J. Jl.-
IIDDIIIIO ;!H7,fi()l Knllonn of nlrcrnfl tiirhino
rimliM' lulirlcftlliiit (ill. DeffriNc Kuol Huimlv
lii'titi'r. Alcxniidrin, Vn.
f)lln Mlnvnlor Co,, Iflrvoliunl, Oliln. $1.072,-
.U7. illll irniiiiHiie-iwwenid fork Hfi
I cfennt. (Smicnil Sii]i|ily Climlcr.
Vn.

ARMY

1 fi!' y M;,'!" m(lH t'nt-iictl(ni Co., OklnlimiiJi
tUiy, Okln. (a.HiiS.GlS. Worlc (in the Koy-
hlimo ProJiirt (in tlie Arknnniiii Illvor.
iMiKlnwir Illsil., '1'nlHii, Ohln,
Km nli ford Amount. PliElnilnlphtn, ]'., IIIIH
nwrirdrd tlin fnllmvlni: conLniclfl for inetnl
1 xir tii fur 20mm rmidilKoti:

(inllon Amen, Cnlliin. Ohio. $I,H01,(1(10 ;

I>rcmfl I'roilitcU (Jorp., aiili-nipi. III.

Sa,-Ill,-I7ri; Nnwnl, rnc., Wnllluim, Mnna.

Ilr<1<lllcllt - Bl 8

" 'i! M !!l sr . f'fl"Hlniet!on Co,, I.

. ,, . ,

Cnllf. Sl.BGfl^OO. Uiinslruclton ot ft SM-baif
Army Kiitinitnl nt I-'ort Irwln, Unrfllow,
(>n\it, KiiKlncer Dial., Lou Aiiffdeo, Onllf.

Defonso Industry Bulletin

Kollnmn Infliruinonl Cor|i., ,

N.Y. t2.14a.OUO. DoiiHtcr nititcinbllca nnil
nintnl imrtH for 7fi nnd ICfinun nlicllu.
IlrldKttimrt, Conn. I'roeurcment Dclnch-
mom. New Yiirk Oily, N.Y.
(,'cnernl Time Corp., LnSnlle. III. J8,000,7GO.
l-UKta for lOBmm yrojeclllos. LfiSnllo.
I-rnnkfonl Araonnl, Pliflndoljililn, Pn.

Eureka Williams Co., Bloomington. 111. $1,-
96-1.539, Metal parts for mechanical time
fuzes. HloominKton. Ammunition Procure-
ment & Supply Agency, Joliel, III.

Lilcs Construction Co., Montgomery, Aln.
33,248,299. Rehabilitation of barracks and
facilities at Fort Polk, Ln. Engineer Dial,,
Fort Worth, Tex.

5 Federal Laboratories, Snltabure, Pn. 31,-
453.332. Hand Krenndeg. Salisbury. Edge*
wooiil Arsenal, Md.

General Time Corp., LnSnlle, 111. 1,242.331,
2. 75-inch rocket fuzea. LaSfllle. Ammuni-
tion Procurement & Supply Anency, Joliet,

Harvey Aluminum, Torrance, Calif. $4,-
524,240. 20mm cartridge components.
Torrance. Frankford Arsenal. Philadelphia,
Pn.

Mohawk Rubber Co., Akron, Ohio. $2,465,-
671. I iieumatlc tires for I'/j-ton, fi-ton
and 12-ton vehicles. Akron. Army Tank
Automotive Center, Warren. Mich.

Mansfield Tire & Rubber Co., Mansfield,
Ohio, 31,417,758. Pnuematic tires for l"/-
ton, 5-ton and 12-ton vehiclea. Mansfield.
Army Tank Automotive Center, Warren,
Mich.

fi SoLile Construction Co., Pcnsacoln, Pin. $1,.
865,093. Work on the Cross Florida Oar^e
Canal Project. Eureka, Fin. Engineer
T>ist,. Jacksonville, Fla.

~i'* a i r ^< AIum , inum , Sales, Torrance, Calif.
83.171,439. Classified items. Milan, Tenn.
Ammunition Procurement & Supply AECII-
ey, Joliet, III.

Belt Aerospace Corp., Fort Worth Tex
32,417.184. Door assemblies for UH-I air-
craft, fort Worth. Army Aviation Ma-
teriel Command. St. Louis, Mo.
8 Firestone Tire & Rubber Co., Akron, Ohio.
Shoe assemblies for armored

Ml r A" lllty , tnlclis - Highland Pnrk,
Mich. General Purpose Vehicle Project
Manager, Warren, Mich.

Goodyear Tire & Rubber Co. Akron Ohio
blW- "v 000 -"" ^P-lty "ollat
I <.& ^ flas , e ? bli <"> tor petrole ,m.
Pm?!nl , n arkl A ? h ' A* Mobility

& RuIlb K Co.. Akron. Ohio.
hoe assemb es for tank rornv

W ' ynallcs ' Chest

waukee Wh. uJbS^ i" 1 " 1 ""'
mand, St. Louis, Mo y E(|ui me t Com-

vt n,aa..

. uri&n fc a "
Command, Rock lalnnd Jl my

General Motors, Detroit, Midi. |l,fi27,-17fl.
Diesel t'lijtinuii, six cylinder, V-lyii, l!lll-
horseimww, for Urn IVi-mmm 1 ! (iarricr
Tank Recovery Vehicle nnil Ilnwk I.imili-r.
Detroit. Army Tank AiiluiniiUvt 1 (Vnliir,
Warren, Mich.

H General Motorw, D^tn.it, Midi. $',!, 0-1 fi, 1)0-1,
Work on PhnHi; III Development of (In-
U,S,-F.H,(1. Main Hntltcp Tank I'roj.'.-t,
Warren, Midi, Army Tnnk Aiidiinoliv. 1
Center, Warren, Mich.

--Pcnland Pnncr Convcrtlntt Cnrji., Ilnnowr.
Pa, $2,040,001). Flln-r i.iiimipiiKhin ron-
talnei'ii for KlCinim piludln. Ilniiitvi'i-. Am-
munition Procurement A .Supply Awi'in'V,
Joliet, III.

United Ammunition Conlnincr, hu 1 ., 1'liiln-
delphia, Pa. $l,()77,Kr>(). Fih.'i' iimininiKliHi
container., for Ifirunin nlii'lK I'lillnilflpliln.
Ammunidon Pi-ocuri'iinMil. & Hiniiilv AHI>II-
f.y, Joliet, III.

Pace Curp., Momiihlii, Tcnn. $1,75(1,7!^.
Flares. C!nmiliM|, Ark. AniiiiiinKlun I'm-
ciircmenl & Supply AiKsiu-y, JnliH. Ml.
AVCO Corn., Klchmoinl, Ind, S1,III'.!.'.!HI1.
Fu/us for a.7fi-liili riit;kt'iii. IM.'liiiiniid.
Ammunition PrncurciTiiinl & Hii|ipl,v Atft'ti-
cy, Joliet, III.
Canadian Cinnmpri'liil Corp., Ollawn. tliui-

adn, $2,llllll,f>3n. Utilily lioll.>op(<>i' ,'IIK!

I.oiiitmnill, Qiii-liiifi. Army Avliilliui MIII>-
ricl (Command, Hi. r,oulii, Mo,
Moloroln, Inc., Cliinum, I||, S;!,.[(ir,,|ll)(i.
Metal imrlH f.n> arllllrry atiiiuimll (mi nln-lln.
1'illt <!rovi! VilliiKi.', Ill, Ainiiiuiiillou 1'np-
ciiromont & Supply AKoni'y, ,l.i|li>|, Ml,
Raymond Kniriiu'eriiiii I.iiliiiral.irlvji, Mid-

MIddloton. Harry Dianioiui Laiiiinil.n'y!
wnnhinj[luii, !!.(!,

15 Nnrrls IndiiHlrkn, Vi-rnipn, (Inllf, 3-1,111111, ,
113, MiiUil cnnhiU'ivi fur mill.' iiyiitcpim
Hnickton, M.iiin. niid Vi-rmin. f^nllf, Ain-

muiiition Pr<inirt.rn(!til & Hupply AH y,

Joliel, 111,

(W7,1]|>!l. Mttil faiilHli.i'ii fp,r nilln- nyn\ ,,.,','pl"
Orliiiido. Ainmiinlllon l'r.n'iir.'iin<nl &
hupiily AKonity, Jnl|.>(., 111.

""'"'" llnlMm.irr. Mil,

"' 1 ' ( 'HV. N.Y.

Hinn.ly '

i ji fi - mmiiiinn I

.i* UI ! I>ly Ammoy. Jollol, III

?Gr' H nn(i N 1 ' llm ' !llcr ll801 l"on H tIH~i

Co., New 1B _^Xi iW,; ,,f rmy

'" " 7 "

;

Cninuliiin ('inuiii'r.'lnl C.IMI,. niiin,, i'
.uln. ?l.lMJ,iiii'i .\minm, M.,,. V , ','"
Mnnlrml. I'nmnh.. !', n ,,l (, r ,|' A " '
l'lilhul,.||,hta. I'M. ' A)1 M

I'uhirilil t'Jfi'l P tiiltrn Cm H . I ,,,, r l ,

in,,. NY s,.,,,.,,/, :!.,:, 1 'r;;;:,,..:.s
l

W Anirllriiu M-UB A Itfiil'li (

Nnlliinnl l'nl"M t-:icilrlc. H|..i>t,dii|.|,,ii III

?'<.n;!,r,in,. n ..... i, ..., ......... . ..... i :.

Ml,-,, IU..,.mhMl ..... Am ....... tit.,, .,' , '

ini-nl A !iii|i|i|x' Aircni-v. .1.,||,.! |||

'., Vil,, I'n 3l,Vi|:i ; 'ii \\,
x .- '

,.. ^.M

Ai.liMnuil.' Klmt'iKli' I'..,. W.,,,1, i.,,,,,, i,,
*IJiiiU.!iV. Ii.'i. ...... I ...... .,( flll . ' ;

1'AIIX r.iMlr.n.-m N..HI, l.nl,,., AnlvK \"
' ...... '"' ' 1 -.mn.J. I-' MMmnmihlVj

l'nr ( iillllil1llH> tlllxiln I JMllllrrlq. \V,,,,til,!,,

'" "' <-- i .''f.'". *" ..... v, i,,,,. r :

Hun.l I Mi,n.....H,<
Ariii,, ,\i,,, v (..,]

MniHiii-iilti. N..I.
I'lly .if .ltiiU-,.iit

KiiKl.i.-.T lll'.i , .lm'l,.M,mtll<-, f'ln,
Mlltp llr,i,lf,, r .| A r,,. Mln.,,1. d,,. ,,,.
JJfl. \Vnik .. H,,- ,|, | V) i'i- fit. 11 I),.,,,, ft
- '

." ", ,.pi) ..).

M . r'i", 1 "" 1 ' !ir '"' f "" 1 AMIIV Avlnil.,i|
Mim-rli-1 I ..iiiiiuut<l, !i( l.iiuia Mi>

tijmrt' 111111=1 fn, ;-.. ..... ifu, t, n . Miinli,,),,!!

(h-l..-rl I';.; !... V,.,l,.t l','..|r..| Mnni-.i.-!-;
Wiu-r ..... Mli-l t ,

mi'r'ViT V"^' A " I ""V FI "' Ii"'.. '|MT
II, N.1, ( ,n fil M,i M,-,,,! ,,,, ,.>

li.M f,,r ni 1 1ll.- iv it ..... .mini,,.!, client Mill

ln*'IIM-Mlrtll |l,-! n ,-)||,,,, ( |, M,, H Vnit. I'th',

Hrmr B

i^' 111 ,
i"i i

nni'M

' , 1 ' " ..... lo """iMlra (,' ).M M.-fV

""'"Mllll ..... , A..*!,,-!,,, I',,-,, '",,.

liwlirii..!.!. N..w V,.,l I'ltv. K v

.'i,. T ' l '"'""' ie - I >"!!. T,-v li.iHii/.'Mn,
"-rml.ll,, f.. r lllo vwi-M.. I..,,,,!,, tinr.

l I.I. h'V AllUI)lllUH>.h J't.-.-IIM-IMfHl A

J!iijp|"lv Airni.'v, ,l,.||^i, ui,

'/HiV''! 1 -!"'^"" 1 ', 11 ."' '-'"'M^l"*. T.... ll.fifin..
i 11 "- I. 1 ..... -o-nl-ltri, f,-r |) ln VA'i.lli l,..ml.
.i."^'"^' Atin.!....!!)..,, rnvMirrtiPiil &
'ini'i'ly Aitt'ii.-v. J (1 ||,i, 111,

i TO l ' 1 l ll ' llll ' ( "- N^'w It'-I.H!,. M.V, II..

I,,;?.' 1 ';. H " *".'"""i'r a {, Hi,. vr,"tk

iihtii A .i"" 1 ', 1 "' J'* 1 A'''"t"l ...... l'n..-iiri..

I'"" 1 * ' ...... Iv AH.-.H. j t ,M,,[, in,

iVv^'MV'^^^M'? "' Awl. Hnnl^n
<-HV. N.Y 3l,ifl]f,,lltll |.' n |,r)r n ili,n (pf

;;: /';;",'', lii 'r, h '-'^"AI ...U" ,,r
A'iiM^

l -, m

l -, m .

wri i HIH ViM? 1 "" 1 '. 1 '' "- 1 """. wwh.

I iV. ' ? M - 1fl ! 1 .'n-llflr.1 n,,u vchlrlM,

"' '"' A M |.,,,,llv. r,lrr.

Jttfttmru 10A7

2.1 General MntorN, Iiidinnnnollti, Ind. $4,200,-
GHO. Trrinmniiiiiloit nH:iemlille!i. IinliunapullH,
Army Tank Automotive Hunter, Warnm,
Midi.

--(Jcneral MntiifH, Detroit, Mich, Jill, 040,050.
Metal imilst for Hllimm projectile)!. Kt.
Limit), Ammunil.lon Procurement & Supply
Aitenr.y, Jollel, III,

--It, C. Can Co. Ilimilwodd, Mo, $l.;iO!),4r>H.
torimm miimiinitii)ii ronliilneni. ilir/.c] wood.
Ammunition Procurement Hi Humily AKCII-
c.y, .Idli.it. III.

.(icncrul Molorii, Detroit, Mle.h. 81,0^5,101).
Dli-iii'l enirjncii for irifmim howllv.eni
Detroit. Army Tnnk Automotive Center^
Wiirren, Mich.

Altwa-Dmvney Count rurl Ion Co., Mlhvnu-
lu-c, Win. Sfi.rt'.rSi.ailfi. Work mi a vehicle
mwemldy huildinir. lit Kennedy Kpnce Center,
Merretl. Inland, Fin, Canaveral I'lmtlucer
Dinl.. Merrill Inlniid. Kin.
I.evlnnon Hteel Cn., I'lllnlmrith, pa. $;i,HOI),-
Olifi. Mi'lnl parhi for lorirnm iirojec.lileii.
H n, vii. Pit. Ammunition Procurement &
Mii|i|ily Ajfoney, Juliet, 111.

Si 7 Odoni Coniilriirtlon Co,, Nmthvllle, Tcnn.
S'.l.tlHI.HIH, Work on Kentucky Hiitliwny
Nu. IT, at. Hie Can- l-'orli Uenervulr Pro|ec,t.
llii/.urli, Ky. Kniilncer Dint., Louliwlllrj
Ky,

Ciilt'ii Inc., Ilnrlford, Conn. SO,tl()H,75ll.
XMIMK1 mill MIO rlfleii (n.nilmm), Hart-
ford. Armv Weaponn Ciunmand, Itock
Inland, III.

Cermna Alrcrnft Co.. Wli-lilln, Kim. SH.ir.il,-
8W1. Honilin wllli dliipcniicrn and imlpplnit
and iiloraite ciuiliilm-ni, Wlcliltn. Ammuni-
tion Proeurcmeni & Mupply Anenry, Jollel,

Tiiflintrnl OiiernlloiiH, Inc., HurlliiKlon
Muiiit. $:i,;i01.40U. l.um mini monthii of
lU'ienlillc and l>>cliulenl etrorl. in nii]>port. of
ill mlii'it, minlynlii and evnllmllonii for Hie
Cornlml Develonmi'iil Command, For! llel-
volr, Vn. Frill llelvolr, Nnrlliwcul. Pnicure-
Tiienl. AKcncy, tlakland, Calif.

HH Arvln Indiinlrlen, ('olumluin, Ind. Sl,(H;i,7HI.
Itndlo iieln. Coliinibiin. Army I'ilrrl ninlcii
Coiiiiiiniiil, Philudcl|ilila, I'n.

Conllnental Molorw, Muuknf.on.Mldi. S1,-
Illli.lliiV, Mulll-fiiel cmdneii for fi-ton trucku.
Mnnkemm, Pro.li^cl Muniurer, (joiio-iil I'nr-
pine Vehlclcii, Wnrren, Mich.

(IcHNitn Alrcrnft Cn.. Wichita. Knn. $|.',!0i! ( .
701. llomli illiipciiin-ni mid contalnerii for

dliipeiui(<r i>i|iilpi it, Wlchllu, Proi'nremenl

Delachmenl, Clilrnico. Ml.

ItetnliiKliin Arinii ('o., IlrlilHciun't, Conn,

$40,;!iHl.'.!(IH, Mliicellmicnini nmall arum am-
tiuinllioii. liidcpi>iideiice. Mo. Ammunltlnn
Prin'iiremiml A Mnpply Agency, ,|olli>l, III.

I)ny A /.Imtncrninn, Inc., Plillndelphla, Pn.
$4,1141/10'.!. Mlui'elliini'omi iimmnnltldn cnm-
iidiii'iiln. 'I'l'sitrkntin. Ti-x. AniTitunltlfni
Proeurcmeni, A Mnpply Aitcncy, .Iidlel, 111.

> Thlnltol Cliemlrnl Corii., Hrliitol, Pn. S',11!,-
UHlpHOH, AiiiiemldlnK. IniuHiitr run I unrliinn
of iinliKuicc Itemii. Mnnilmll, Tex. Animnnl-
tliin Prornrenienl. tti Hnnply AKt'niry, .lollct,

Hnrvey Aliimlnimt Hiilt-n, Torntnoe, Cnllf.

$11.147,400. I.njulliiit, iiMiiemlilliiK and jinck-
Imr of mlnct-lhincdiiii medium cnlllirr iun-
miinlllon mid conuionentii. Milan, Tcnii.
Ammunition Prot'iireni<<nt & Hupply
.Toilet, 111.

20'--

Feiloi'iil Cnrlrldjffi Corp.. Mhuu'itiiollM.
Minn. (V.ttO'J,411, I'niiliiiill.in of 7,02mni
null iimmiinUInn mill for tnn'i'titlnri arid
niiihitornuicc itcllvlllcii. MlnncnnollH. Am-
in mi It Inn I'ninuvmcnl & Hnpiily Awcticy,
Jnltcl. HI,

Airport MncMnlnjr Corn., Mnrlln, 'JViin.
$l,H03.7itO. Motril parlii fr lUtl-lm-li rm-lt-
O!H. Ilnlciii (Illy, Ti-nri. AmmunUlixi 1'rn-
iinromont & Hinnily Aiiuncy, Juliet, III,
Amoricnn Mtg. (,'o. of Tex., Vwt Worl.1i,
'IVx. $1,072,0(10. Omniiimcma tor a,70-ln^li
rockidH, Kurt Wnrlli. AniiniinlUnii Vn^
cnrtimcnl A Huinily Aitcncy, JoHel, III.
I'olnn Inilimtrlaii, Hiinllniildii, W. Vn. !!,-
2!lli.(lfla. IVrlHcojti'fl. ihmtlrtitlon. Krnnkfnnl
Arnonul, I'lilliulnl|ililn, 1'n.

Honeywell, Inc., Hnpkltui, Minn. |H.2fl[i.2R2,
Fneeii. Now IlrltrlKon, Minn. AmnuintLton
rraimramciiL & Hiuipty AK<ini-y, Jotlct, III.
IIMC Imtiisirinln, Inc., Ooodycnr, Aria.
1 1, 03 R, 0(10, Hinnko RronndoM. Oooilyonr.
Kilgowofdl At-iionnl, Md.
Tcxnii Inittrument, Inc., Dnllnn, Tox, $7,.
000.000. CliiNHlflcd electronic equipment.
Dnllnn, Army Klcclronlun Commnnu, Fort
Monmoulli, N,J,

Anllumy Co., Btrciitor, III. 14,000,931. IfiO
illoHvl OUR I no driven, fork lift trudin.
Strontcr. Army Mnliillty MimliimcnL Com-
munil, St. LotiiH, Mo.

OIInmlltDii Wntcli Co., Lancnator, Pn, $G,-
l(m,443. lUrimm oiirtrldKu fuzua. Lancnnler,
I'l-nnkftiril Aiwmnl, I'hilaiU'lphia, Pa.

Mnrlin Mnrlfittn, Orlando, Fin, $5,130,1)01).
Coiilliiinitloii <if imlnnl.nu] unninoorlnK HUD-
jiurt for ttie I'crnhiiiB wuiiimn tiysteni. Or-
lundo. Army MlnHilu Coininiind, llei! H (.om!
AriHiiiul, HuntHvillu, Alii.

Unythrim Cn., Norwonil, Mann, SU I 1J22 1 00(),
40H tidijiiliiiiii! iilitniil tionvwtoi-rt with ropuii-
jinrlti mid 4DU tijli-iihiino lilitmil cniivertui'B,
Iciiii chnnniH mid wltli a difforcnl cnlilfl fis-
Hi'inldy, mid willi i-dnciirrutit roimir purls
mill nni-lllin-y ilornii. North DlKlitmi, Mnim.
Army Klccli-orilim C.immiuid, l l hllniU>l|>hla.
I 'a,

- Pncluird Hell KlootronlrH f!orp., Nowbiirv
I'ark, Cullf. Sl.nfill.omi. 472 triuiHiiorulor tra't
ntii. Ni.'wlniry Turk. Kinilhwcot Pnipiiiv-
mnl, Aitciuiy, I'ntmdi'iin, Calif.

Falrrhlld Hlllrr Corp., Iluminitown, Md.
S,t,41.i,H;t(l, 'rniniimiiiHlonii for H-aa lidi.
ci>]ilcni. Ilum-nildwii. Army Avlallon Ma-
li'rlid (.onimmid, Kt. I,iiln, Mo.

-LTV Klrrtrn HyHtvnm, flrcunvlllt!, K.C. $1,-
fi!)7,HW. 1)t!V(!]iipini'iit, prolnlyidiiK anil
nmnnfmiUirliiK f mndilliration ldt fur an
Avhinli-ii llHrolU Prujc.i't fur II-l, (1 and H
(Ixcd-wltiK iilrrrafl. (iri>i>nvlll<>. Army Avi-
ulldii MaU'i-li-l Ciimmuml, HI. I,OII!H, Mo.
Iliilli'd Aircraft, t'rotl & Wliltncy I>lv.,
I'.nnl. llnrlford, (limn. SH.On-l, 0(111, Kuttlni'
Ki'iicrnl.mi for (ill- fi-IA nlrrrafl, Kant, Ilnrt-
fni'd. Army Avlallon Miilnrii'l Oommiiml,
SI, I,DII|M, Mo.

Hulled Alrrrnft. Hlltorjiliy DIv., Rlrnlfnrd,
(limn. SI, 1117,01111. (ill 5.1A trmiHiiilHHlon
iiiiHrinlilii'ii mid tmilii rotor inicmblltiii. Klrat-
furil. Army Avialiim Miilcrli-l C!ommiiml,
HI, liiuiln, Mo.

Unllod Alrcrufl, Hnmlltoii Hlnndanl IMv.,
Wliidmir l.o.dui, Ci.iin. Sl.fi-IH.aHH. Pm-
IH-Ucni fur (IV I MnliawU ulrcraft, SI!, 155!!,.
fi'Att. ()V 1 in-dpi>lli>r i-onlrolii. Wlndmir
l.i'idm, Army Avlal.lon Mnlcrli>l Cdininand,
SI. Iiimiii, Mo.

Niillimal d'yuHuni Co., Buffalo, N.Y. S10,-
K<l4,lltMI. U.'iicMviiHim of fm>ll!H<>ti for uro-
ilnrtlim of orilmnn-c lli'inii at Mm Kntumn
Army Ammunlllim Plmit. PartuniH, Kan.
AmmimlllnTi Pnicun>in(!i)l & Hitpiily
Airt'iii-y, Ji.lli'l, III,

- Ilnlfiva Wiilcli Cn.. Jiickiidii Tlididitu, N.Y.
Sl.lllO.rilHI. ]-',\ wn {, t\w Hlmm nidrlar.
ilncktiim Hckhln. Ammnuil.lon I'nifliirc-
iili'iil ,1 Hii|.|ily Altcncy, Jolli'l, III.

-Htpwnr I -Warner (Virii., (llili-iinn, III.

Sl.ll'.SK.lir.B. Mini- tu'M-a. (IhlniKO. Aminii-
nlllun Proi'iiri'incnt ft Supply Ajti'iii'y,
,ioll,-(, 111,
1'ariiuT'n ('lit'iiilrnl ANHnclntoii, Inc., Tytu-r,

'I 1 , 3I..|OK,7H1. tlunpiirt itt-rvici-H for DIP

maim fact urc of <<xplimlvi'ii. ('hallammua,
'I'l'iin. Ammunlllim 1'roi'iircmcnt & Hnnply
Ancm-y. Jollcl, 111.

(icnrrnl Motnrn, I)i>lroll, Mich. $1,870,001).
Id'ni'l ivnUnti of mipimrl nlllltli'ii at. the
Army Ammimltlmi Phinl, Hi, I.nnln, Mo,
Anitminilloii Prdciircmciil. & Hnpnly
AHCI.CV, ,h,l|cl, 111.

Hrrrnlt-H, Inc., Wllmtimton, Del, $.|,r>:t7.70ft.
MlncclliincoiiM iirimcllnntu anil cxploidvcH,
mitl fur opiinillim mid malntcniini'i! acllvl-
tli'ii nt ihi! Army Ammunition Plant. Itad-
fdnl, Vn. AmmunlUnn Procnrcm trill & .Sup-
ply AHt'rii'.v. Jolk'l. Ill,

Clmintirrlntn Corp., Hi^rnnKm, 1'n. $f5,OHO,-
flflH. nrnnin proji'ct llcii. Army Ammiinitlnn
Plant, Hcranldii. l'n, Aminunl|.loii Proniro-
mt'iit ft Hnpnly Aitcncy, .lollct, 111.

Allnritle Itcoenrrh ('orp., Aloxiindrln, Va.
Jl,0:i4,;iH(). Mt'lnl i-nrtn for mlno canlHtoni.
Aloxaiulrlu, Ammunition T'rociivnmenl &
Mnpply Am'iiry, Jotlcl, 111.

Dnniivmi ConHlniction ('o,, Hi, I'ntil, Minn.

S7.1HH.IHr,. Mclttl imrtn for IRfinim jtrojc-
tlli'it. 81. Paul. Amnninlllnn I'roriinimcnl
A Hnpplv AKi'm-y, .Toilet, III.
(iBiiirnl Motorx, Ddtnill, Mtnh. (Q,r,27,0n2.
-1,400 four-dour, nlx-piiHHoiiKM', commcrctril
Hcilnnn. WilinlnKtnn, Ui'l. Army Tank Auto-
mollvir Cniittr, Wnrrcn, Mich.
(Jcnrrnl Motors, Dclrull, Mich. tl,B30,720
1,088 commercial Htntlnn wnitnttH. DcLroll.
Army Tank Automotive Center, Wnrrcn,
Mich.

NAVY

1 Vncnllno C()mnny of Am or I en, Old Buy-
brook, Conn. * 1,0011,!! -10. Work on prc-
prodiicllnn, production nnd eiiKlnccrlnn
tertlliiK for qmillty control of flonobiioyn not!
imdorwntcr Huunil fliRnnls. Houth HHstol,
Mninc. Nnvnl Air Syatemu Command,

12-

-Lockheed Aircraft Corn., Hnrbnnk, Cnlif.
Sl.ORi.TiOO. Modi fixation of government
uwnud SI'-SJH aircraft. Ilurbimk. Navitl
Air SyHlemii Coniiniind.

-Western Electric, New York City, N.V,
St, 000,000. MR 1 Mod O wonpoiiH direction
ei[iii]tmeiit. llurlltiKton, N.C. Navnl Ord-
nniici; HyHleiiiH Command,

-SliaRlt Corp.. Hedro Woolley, Wa.ih. Sl,-
Uni.lillO. Wiacht'H to be owed aboard fnut
combul Hiippnrt HhijM, PiiRet Sound Nnvnl
Klilpynrd, Dre.niL-i'ton, WrtHli,

-(larrclt Corp., AlKcNenrcli Dlv., Phoenix,
A )!/. Sll,i;2n,;!2il. T7G-C-10/12 cmdnoii for
OV-lOA ulrcrnfl. Phoenix. Nnval Air
KyHleniH Command,

-Lockheed Alrcmft Corp., Itnrbnnk, Calif.
$7,;iHO,00. Limtc Iciidtlme ultort and mate-
rimH to Hiip]irl I'T 07 prociiroiiiont of I 1 -
Hit nirtii'itft. Ilurbnnk. Nnvnl Air HyiitemEi
Cnmmnnd.

--Merando, Inc., WiiHliliiKlun, D.O. $1,R18,-
1100. ConiilructUin of n ntnllon liofipitnl nnil
dontal e.linlc at the Nnval Air Training
Center, Palnxent Illver, Md. Chesnuunhc
1)1 v., Nnval FiiclHtlou Knulneorlnjr Com-
miind,

-WeHlprn Rlpctrie. Now York Clt.y, N.Y.
?l,01il ( H03. Sonar ecuilpmont for Hiili-
mnrinen. llnrlliiitlon, N.C. Navnl Shin
H.VHleni.s (!nniiiiinid.

-North American Avlntirm, Cfiliimlnni, Olilo,
1,700,000. Condor mlmdlcH. Coliiinhiia.
Nnval Air KyHte.niH Command.

-United Alrcrnft, Kant Ilitvtford, Conn. ?!,-
:i5l!,000. JOO-P-t! onuiniHi for alrcrnft. Knnt
Hartford. Nnval Air Synluniii Ccimmand.

-United Alrrrnft, Kant Hartford, Cnnn, $1,-
li;i5,Hir, Model ,T7f)-P-i;iH eiiKlneH for ilm
Air Force. Knot Hiulfuril, Navnl Air Hy-
ICIHH ('ommand,

.lolniH HopklrtH [InlvcrRJty, Applied Pliyslrn
l-nhoralory, Silver Spring, Md. $1,040,000,
Work on ilie Itumblelice pnij^ct. Bllve'r
Hprlnjt. Naval Ordnanco Hyitlumii Com-
mand.

tieneral DynamlcM, Pomona, Calif. $3,420,-
01)0, Cnldaiu'i}, control and ordnanco nee-
(lonii for Type I iitnndui-d tnliiHllesi. Pomona.
Nnvnl Ordnance* SytiUmiti Coinmnnd,

-Mnnnnntn Ucnenrfli Corp., HI. I,ouln, Mo.
SI!, 000,1101), lUwiurh on hluli ii(!i'formanc

ilpoilile malerililn. HI. I.dltlH. OflU'R of

Naval liciiearcli, WniihliiKloii, !),(',

Niitlonal Co., Melroiie, Mnnn. $7,Rr>7,!127.
llndlii IniitHniltlcrii for nhorn cnmtnunlcei-
tlomi. Mfdrone, Navy PnrclmiiliiK Olllr.u,
Wu.ihinnl.iii, 1),C.

AAI Corp., HnHlmor*. Md. SH.OOl.iUl.
Miiinlle InindllnK nyHte.rivi to tie IIHIM) nlniard
fiuit eomlinl nuppnrl tihlnii. Oocltcyiivllli*,
Md. PiiKiit Hound Nnvnl Hhlnyurd, Ilmmor-
ton, Wnnh.

-llnolnff Co., Henllle, Wnnh. $1,120,000. H-i-
ni'ui'i'li on lhi> ntrciiii rurrniilcm rcniiUhm of
liiiih nlrennlli inolnlii. Heatllo. Oftlco f
Naval Itciiearcli, Wanhiimlon, D.C.
llewletl-I'acldird Co., Itoeliville. Md. $1,-
(i'M.Hilll, OiicllloiicoiiPH. Colorndo K]i)'lmtii,
Cido. Nnval Hliin HynU.'inii Ciminiund.
Hnldis In -Llinn- Hamilton Corp., Phlln-
delidtln, Pn. S1.1!'(i7,HOO,' Hlili* propolleni.
Phllndelphla. Naval Htilp Hyntc.niH Com-
nmtid.
United Alrcrnft, Norxvalk, Conn. J2,0rt7,-

me.nt for fiuhrnnrinen. Norwnlk. Navl
Khlp Kytitomn Com m nnd.

-United Alrcrnft, Want Ilnrtford, Conn. $t,-
7riH,HO!!. Overlnuil omilimiont for J-7H nlr-
crnft onitlnon. JOriHt Ilnrlfonl. Navy Avia-
tion Hnpnly Olllco, IMilladolphla, Pn.

-WcnlhiKlioiiKc Mlcctrlc, PlttHlmrKh, Pn. $!,-
1211,000. Nnvy nucleiir-]tro]inlnlon coinpoii-
enlH./ Pllliiliurnh. Nnvnl Hhl|i SyHleniB
Com m mid.

-Northrop Corp., Ncwlmry Park, Cnllf. $1,-
ODfi.mfi, MlJM-nOA norial tiu-Kotn. Now-
bnry Park. Nnvnl Air aytitwnH Rommnnd.

-Hermllo Powder Co., flaiiitim, Cnllf. $!>,-
005.044. Aircraft pantduito (InroH. Snugiift.
Navy Shlpri PnrlH Control Conldr, Me-
chnnlc.Hlnirit, Pn,

-Mnrtln-Mnrli;Iln Corp., IlnHlmoro, Mil.
(1,2215,404, Synloms onnlm.'erliipf nnd nvl-
onlcn (tcnlffn for nn ncc.cloriUed P-2 ak-crnft
proRrnm. llnltlmoro. Nnvy Air Develop-
ment Center, JolniHvllle, Pn,

-HnnclUne Corn., Little Neck, N.Y. $2,37*,-
7fi7, Air droppnWo acouatle dovlccii. Ltltlo
Nock, Nnvy Air Dvc!opmont Center,
Jolmsvlllo, Pn.

-8orry RninI Corp., CireiiL Heck, N.Y.
?2,aOO,GH4. KiiKlncerlnit effort to perform
n development proitrnm on Ilio Terrier
rntlnr net, nnd nnclllnry eaiilpmonl, Orcnt
Neck. Nnvnl Ordnnnco SystoniB Commnnd,

Defense Industry Bulletin

AVCO Corp., Stratford, Conn. $1,307,513.
Spare parts for A4E aircraft. Stratford.
Navy Aviation Sin, ply Office. Philadelphia,
Pn.

13 United Aircraft, Pratt & Whitney Aircraft
Div., Enst Hartford, Conn. 522,40-1.965.
J52-P-8A engines. Enst Hartford. Naval
Air Systems Command.

Curtis-Wright Corp., Wood-Hi dgc, N.J. $8,-
18<I,GI)1. Spare parts for aircraft engines.
Wood-Ridge. Navy Aviation Supply Office,
Philadelphia, Pn.

M Willamette Iron & Steel Co., Portland,
Ore. 32,431,000. Overhaul of the oiler USS
Cacajion (AQ-52). Portland, Industrial
Manager, 13th Naval Dist.
Newport News Shipbuilding & Drydock Co.,
Newport News, Vn. $1,000,000. Overhaul
nnd refueling of the ballistic missile sub-
marine USS Lafayette (SSBN-GIG). New-
port News. Naval Ship Systems Command.
Aerojet General Corp., Sacramento, Calif.
52,908,456. Manufacture of Sparrow mis-
siles. Sacramento. Nnval Ordnance Sta-
tions, Indian Hend, Md.
General Dynamics, Pomona, Calif. $1,414,-
ROu. Study program on an antisubmarine
warfare ship integrated combat system.
Pomona. Naval Ship Systems Command.
IB Blass Antenna Electronics Corp., Lonir
Island City, N.Y. $1,060,000. Work on
phased array radar aboard naval shlpH.
Long Island City. Naval Ship Systenm
Command,

General Dynamics, Pomona, Calif. $3,fiOO,-
000. Research nnd development on the
Standard Arm Missile, Pomonn. Naval
Air Systems Command.

Grumman Aircraft Engineering Corp.,
Uethpase, L.I., N.'Y. 55,207,000. TC-40
aircraft. Bethpnsc. Naval Air Systems
Command.

Hughes Tool Co., Culver City, Calif. SV
734,863. 20mm gun pods, Culver City.
Navnl Ail- Systems Command,
General Electric, Schencctady, N.Y. ?!,-
123,000. Refurbishment of nuclear propul-
sion components. Schenectady, N.Y. Nnval
Ship Systems Command.
J.A. Jones Construction Co., Memphis!
Tenn 53,820.000. Construction nf an en-
listed mens barracks at the Naval Air
btation, Memphis, Tenn. Southeast Div.,
Naval Facilities Engineering Command.
16 Boeing Co., Morton, Pa, S7,GSO,000. CH-
46U helicopters. Morton. Naval Air Sys-
tems Command.

Bromfleld Corp United Shipbuilding Div.,

fcnst Boston, Mass. $l,fiOO,SM. Topside

2,1

11!

University of Alatilin, Cnlleire, Alanka. SL-
210,000, Sorvincsi in onnm-i'limi wild Itir
operation of tlio Ariilii 1 llcncarch liiiliurn-
tory. College. Oillc<> of Nnval K<vii>nn'li,

Tracor, Inc., Aimtin, Tex. Sli,V:i:!.7'.!.|. 'IVHi-
nicnl aorvicoH nnd riiiriiici'rinir hMiiliiliirii'i 1
for OKI Sonar Syittciuii i'roji-cl Ollli'i- nf tin-
Nnval .Ship Sy^li'inn ('(inunniiil. WaidiliiK-
lon, D.C. Nitvnl Hliip Hynli'iiin (liniiiniiini,
Sea Land Servirv.i, Iilr., l';li/nb''lh. N,,l.
S7.fiOO.000, Wrifkly irontniiu'i- i-nntu pifrvicr-
from tin! wi'jii coiiHt (o lbi> I'liltljipinr
Islands cointiicriiiliur April 1, I!)(i7. Mllilnry
Sen Tninnpiirliitidii Hi'rvlt'i 1 .
Williams & IliirrnivH, HHmonl. Cnltf. Sl,-
iri2,000, Ci>iu<(rii<-tiini (if nil oMhv hnlhlliijr
al. (lie Navii! Hlution, 'ri-i'iiiiuri< Iriliinil, .'!nri
Ki-nnciHi'd, Calif. Wi-sili-i-n Hlv.. Navnl r'n-
riiilicn Ktiitlni'criiiir (''Hiiiiiiinil,
--Ilniveniily of California, llrrMi-V, dnllf,
S1,KIK,(H)(I. AildillKiinl r.vir/ii,-li cm ll p|..

Oillc-e of" Navnl Ki-nciin-li,
7--McD(innp|| Aircraft, HI. I In. Mn. jjl.llfiii.-

001). Winit i lion iiiiMi'inhlli'i. for

alrcrafl. SI, I, unlit. Navy AvIiiMmi Hi

Ollhv, I'htlnil.'lplija, I'D.
- WiinllillHl(iM Aliiniltuini C!., Itiilli 'i>

$;<,I17II,OK1. AM;! jinll.'M uml mill :\<

blfi'.s for Hie KAT iiriijirnin, l-inti'd

Ala. Navnl Air i'lnitltn'i'i'liiK C.'iiloc, 1

di'lphia, Pn.
--TRW, Inc., Iti<floiu|(i ll<.|i,-h, (liillf. si

Ml). Kyiilimi niiulvHlii nf llit< AMW nyn

proitrain. Iti'dnnild Ht'iich.
--United Alrrraft, Hlrnlfiinl, Cinin,

000. Ili'licr.iil.'i'ii. Hlnitfiinl. Nnvnl

Syitloinn (lomiinuiil,
-Franklin IiiNtlluli>, I'liilnili'lpbla. I'u, S(i ..

,'tOO.Oim. AddHlonal mirairli, shi.lv Mml'ln-

Arlinitimi, Vn. ()llln> of Nnvnl Hi^nin-h!''

-Trradwell Ciiri)., New Yorlt Cll.v, N V

Sa.OHO.mid. tlsyitiTi (irnt-rnldni. Nrw V)irtt

Uly. Nnval fillip Hyuh-liiii (tn.niiiiind,

-TpxnH liiMtriimMilN, Itiillaii, 'IVx. SI.VlV.HIil,

.11 riiK- Kiininiicr mill cimln.) uci-Mntm, anil

{tola of wliutit nnd linn. Dnllnn, Ntivnl Air

|.'| n . Ji,fl!!.4itn

AIR FORCE

Air

1 .1,, '' EnH t Boston. Supervisor of Shln-
juildlngs, 1st Naval Dist.

'loa'tJ ' A ( n onatl 'j t . ctioT1 ' of ""xl4st Patrol an ,

., CambridRe, Mass. $2,000.000. Tae-
enBineeriiiB support for the Polaris

-Marlln Marietta, Orlnni
At'nt r.A-l nihiull,. !,! [i(|

Navy AvIiiHim Supply (l!llVrVS'hlli!Kl,'lii;

"BiR? rr r R M ml l ' wv '\ " |1| " ( " 1 - '''""" >4 M R >-

wln'ir imiVllh !!,'(' 'f'!,''' Slirir!'"'"!' M""'

llrintol. Naval Air Hyuti-mii I'limmnmi

Jif/'mi!! 1 ''y"'""'''". I'liinniin. Calif, SI .

mljMJU, IrMMJllf Hll(] I'llI'l'hulM if tl i

' W " rl ' H

Ciirrrll Cnrn T.,r, ...... ,., Cnllf, j.j .,., ....

PMHlllHI.ill ,>f ,',!..,. ,,, ,, '/ -I".

r.-rf1 I.,,, An,:,.!,., il! t |,|, ;'.'..
Miili'ii.-l Ar.-n. lAI'l.Ci 'I'll.),..,. Al.'n In , '
'"I'''' ...... i Alnn.ft. S,,,,v I- r If ^ "'

"!iv,-nin. I-:,!,,!..,.,-. int ..... MI ..";. v "-

"' ...... " <n ;1 |,m. Mu ,,yvnU. ;i ' .' ^i'' 1 ""

nu ( ARu:). i.,,, A,,,...,;.,, V- tr " J ..... '""

'' 1 ''^'^

Ci'llrrill Mnlurn, lll.lin ........ ||., | hl | j,, .,,,,

ll'M, Mmliii.-Mllitn f,f I'nnu.liii,, i;'|; '.I,',;

t|r ar | i:i,-,trh. I',,,

9 Rndiation, Inc., Melbotirno, Fla

En8t

delphia, pi

Con "

craft. Woocl. *
Offlw. Philarteln ?

SSS IS
in CH-4G and
vy Avmtion

on P-

*$ii

., " B " >'-

AvlMan Supply

..... -no.

hi.-

MrC|Hli,p,

i f.r I'
ni., Al,
AMI . r

, .

, ji.'J' ..... 'l'"" M "' "'
'""" l

'iM, N |(, J;'II.
'"' rn.ll.. ,HrV, t , ,
'" Wnrni-r tti.h.

MARINE CORPS

^
,*,,, AMI.

m ..

Air Syatems Command ' SBl Nftvnl

p^-a^Vov.a.i.

IftchinonlB and Vli, ,,, 1. llil '"' wfl 'li l-
nunriora. M "p/ne '" ftlini8nl11 - Il(1 ""'

if. U R

OOPIM.

, Mnrln"

-I.nrkliccil MiimlloH & Hpnco (; Hutiiiyvulo
Unhf. sa.lHHI.Ufttt. I'ro.lnrll.m nf A m

Jllll.l'l! VCjlllllc!!. .SlIllllVVIlll' Himi'l' Mvi.l ,.,,,L,

IMv,, (AKH(l), Lou AIIITI..II. Cnlir.
-l)<mjr.l(in AJrcrnft, Kuntu Mimltin, Otillf. $2,-

Kunln Mimli-ii. M|niirc Hyuli'mii I)iv"'
(AKSC). I.HH AIIK..IWI, (;- lv "

Hfili.iail. Hciii'iiri'l. .mil (li'voloiiinunt 'nfM'.i
imniuimi.(l iiiun-,. i,. ( .|,,i,i1njty urnitrnm
AWUPIII. Mi.ru:,. Hyiilotiipi Dlv., (AKHCl I ...i
Atifti'li'ii, Cnllf. "

n i- - "<M<

n.-m'li, (lullf SH.Kfirutll). H l:l i ( , lm .], rm.l .1,-
vHniim.'iil. t>[ mi immiimii'il nimn> l.Tl.iml-
n.cy I'niKHim, Itcjlnn,!,, It,,,,,.!,. sn,,,:,- Syii-
i.Tim IHv., (AKSC). !,n,i Aiiin-lt-H. IJnlif

'"' ".Mm? A ' riTn 1 rl ""' l-'iiHcrhin. (lulir. fiH,.
..00 ,1 Mill. >,>v.'l,,| ,.,.( mxl prmlmiUmi of
'"M'l <;nnlr.,l (>i...riil|<iim (!,. !,.,' f,, r (I,,.
l/f, hyiilifm, iMillvrhm. F.Wlrnnl,- Mv-
MluHi * A|l ' l| >. I- li. Hun. ...... u FIH.I.

111 *Mm"Yi7 rl ?.'" /^'r"" Wnn.MU.liw. N,J.
SUM.1,-14/. I'niiliii'llon nf nh.imm unif ,.yl!n-
.W iiim.<Mihli.Ni fnr It .infill nlivnifl ...lulu-M.

K-'/ftu^'v...^^;: .Hi M ..... '""

m!',!"' r ,'!' M" 1 ", 1 " 11 ' fMiiiiiimimiiti, iini. $n,.tNir.-

III1I. 1 n.ili.rllni, nf T (ill liirlin|'n<|< .'t.rln.-u
iiil rHiUn nmlnnn.i.l. iT.ilinimiinllM. A,T, -

a/'^n 1 ,!'"';"'','" 1 ' f'"" |ljl M "" ( "- <!'H'. ?7.-
(.(.Min. I'm, biHI,,,, ,,f f ul .l Illnll ,-,

MINI r.H- I.' .(! iilivrnn. Kl Mnulo. ( K ,l,. ,
AIi-^Mnh-rM An-.., (AFI.C). Mill Al'l"

Hyjrntilii lOl^rhh- I'l-inlnrlK, M<mnliili. Vli-w
C..Hr Sl!.l,llll,(im.. i;,-nl, tP nn,i nf ,!,,,, H^
iiilliiiyiilr-iini ..in! ininllllriillon Mr, f,, r ,j| .
MlMill.-.nnn pnlimll,., M,,,uiliiliivlfw ..nil
^'V! J?! ll ' k , Mn ""- "i'lH"!!'' My..!..!,... |>| v
(AI-M1), Nnrlnii Al-'ll. Hiillf.

Sn^'r 1 ! 1 ! li '!; ll ", ( '"" Itlplninhnni. 'IVx. J|i.,
Ml n-M. l-nnln.'llnM nml |i m t,,||,u| tlll ,, f
ilKli-friNiiK.ih.v p.liurlc Hhlfliit

''"' 1 '''" " 1 ' 1 ""''"

vliJ'li 1 , 1 .!! 11 < 1 i lllll l r " I V : " rtl ;' t! i'iw'ii, N..r. ?n.-

M:t,(H)l!. I'r.i.hu.M.iii nf nlrlinrn.' Illirht iv.
''ii'iln,, hii.lniMii.i.1,1. <!,,M W ..|]. A.-VniiNii-

'''- (Al " !ini ' w --'" ; -"'-

. , (

i.ttliii'llnrt .f i

nil. I'M. *M(in.n.

,- ..... , I'lllulmnd.
"

v,i.-iim ) v ,, (ArM(l
jyi-liili|.l'r;||,.|-,M,|, AK1I, Hill... IAI '"' 1 '

' u'"!.!? 1 1 hln ' l l l ' l > ' < 1 ! T ," 1 "''"- l '"f. SI.IMO.OIHI,

Ovorliniil niHl inntlll1nill.in ..f .1 'IV ulivr.if
'iiKliii-.i, Oniiirl... l))!,li'n Air Mm..rl..|
Arm, lAI'-Ml). Mill Ai-'ll. Hn.li,

KHX 1 "/ 1 ,""",'!" 1 "," ','"" ( J r " r ...... M"n- 81.-

HH.I.HM, l'r.iitii,iHr,ti nf .-nnuMmrnli. f, lr

tinivy iiln-rHn r..rriiliiii I.ITHM. (Jri.ri.m
AiT.mi.imml Mynt,.|,,H ll|v.. (Al'MI!
Wrlidit.l'i ..... ninn AI-'II, Ohio. >
fym-rnl I'rrrliiliiti, Wi.ynn. N.J. *l,im:i.n:!fr.
VV.irk nil nlr llltvlinillni. <'*jiil]'MH'!it nOnlxil
' ..... Iviiiiri' iilrnti-Kli- mrcrwrn. WIIVIH-.
w' 1 ,".".'", 1 . 1 "" 1 Vi"m.i IHv.. (AI.'M 11
WrlKlll.l'nMfi't ..... Al'll. Oliln. '" ll ".

'nlrrlilhl rnmrrit ^ hixlnmi*>iit (rorti.,
Hy "..in. N.Y. l!l.|!r,.aiH). lVM.lm.ilnn ,,f ,,':
( '"ft I iinii'rmi. HyoniiH, Arntnttiitlnil Hvn-
I^MIv., (AI-WI). Wrl B h|.|',.,.rVnii AFII.

*'lU' f lmm Ulr m m \' VvlMl11 ."' Annlw-Itii, Cnllf.
Jl.l/fUUMI. Wdi-lt .>ti )>.ii|iir nydL-iiiM n-lnti-.I
I't iiilvniu-.-il nirnl<-Kl(! nlrcnift. ArmhHm.
Am-otiiuitti'l Mynt..|iin IMv., lAFHC)
WrlKlii-I'nilitrrtun AKlt, Ohio.
"flnwwpll. Int.. Mm,klitH. Minn. II.4BO..
I (I. 1'r.iilm-ttini nf liniil mini- fn/;c... H.rn.
1(111(1. A.'t-.iiiiiiilli'nl Hyntciitn IMv.. lAKHd).
WrlKlil-I'nii.THnn AFIt, 01.1... """'

iifl lilarlrlr, Ullcn, N.V, W.non.ftoo.
I rniliu'llitn nf rni]i|.niii.|.|ii tw nfrlmrno clw-
Iriiiili- (lynifiH,,. Ktli-n. Acn.iHiiitd'nl Hvit-
'AKHOt, WrlHlH.l'*ll-min AFII.

.. A lnll 1 11 ' Ti'lHfl, Ohln. (1,-
iAM (Ivi'Mm.il nml roi.iijr nf nli-to-
Kn.iiHil m unllttii. TnlHit. Oklnhointi Mlty Air
Mnt.-HH Arcn. (AI-'U!). Tinker AFII. llkli.
ii fl iii A'""'"" Aviminn. Annhelm. (iiiHf.
* ,imi,fi^r. Ovt-rlmiil nil'l n-imtr nf nlMn-
Kintiml mlflN UCT. AnntiHrn, Oklnlmmn (!(ly
Air MiU,.rl.-l Arp (AKIXI), Tinker AK,

, Vn.

I 11 ,""", 1 ? ll(t miH(trn, (tntnimvlllt!. Vn.

A r MnUTk'l Arcn, (AFUI), Hill A!-'H.

"Jlcndlx florp., Ann Arlmr, Mich. $3.000,1100

nii'a ilm!"!,^ 1 , ""A"" u " 1( ' p K m 'P-J' coniniH-
"ii.iu.niiui Hyutuin. Ann Avbor. Klcntronifi

nrn. . .

Sl.HlH,.)nr.. Pi-oitmihim ..f vnilm- !!i[iil], m(m t
Ii"'n ^ ' I1( - lp ''- ''"'" AKn. Wnrnvr
Al''l!"'(: A Mutliri " 1 An ' a - fAKUl). ll|,|n n

f/w'Vh 1 ' ''' 0< ' l !' l( '' Wwit Lynn, Mm.ii. (IS,.
i.' 1 ,' ' r '! l ' ll< ' li "i' f T-fiH i,Kh l( .H f(.r
liclli-Didtft-H. VVful I.yun. AftfiiiiiitiUfluI Hyii-
li-rim Dlv., (AKKC), Wrlirht-I'nHurwiii AKlt,
Oliln.

M.I.T.. (!nmljrlilir<! MIUIH. S2,'180,(IKfi. Himii'
rt'm-ni'vh In i.iU'MiK' niiiitn>ii (l.-Lln. C, ml -
lin.lif,.. Air Fnm. Om,-,. of HHnnt.llln It,-
iH'invli, WiitililMKlnti !),(!

'ni?i r i? r 'li (: r l>.. Vim Niiyn, (!nHr. ?],-
fil)0.mi. SnjH-fpHinti' mn.M (lllitl.t (,,;,(. ,..
itnitn. Viiti Nnyn. Hyiiioinn l'inKln<><>rinjr

I'AVW^ w";"!'',' 1 ',, & '''""'"'"1'Hf.V Dlv.,
fAl-M,), Wrlrlil-I'iiUi'i-Him AI-'II, Ohio.

llii 1 ?.;^" 11 ;? V ' h " ll( - Ci'-.-uvlll... Tex. Sr..-
I..HIKm, Itr.i.-i.rcli u.,,1 (Irvd.ipm.'Ml. f.>r
"; iHlln.ll.it. of (M;i;i]t Hlrrmf). ,;,.,..
yill... Acriu ..... dun] MyiMoiiui 1)I V ,. (AKHC)
Wrli;lH.|'i.ll..i.miH AFH, Ohln. ''

7 ?".',!? A nl ,! H ." 'I'"""" """vcr, Colo. $1,.
H Ml !. Mnilllh-Hllon Kil:, fnr Nnvv in 1
Air ].i,,v<. A 1 ni.,.1,.,. nln-rnfl. l)..| W i-r.

'.'nVniV 81 "".'." 1 "?' W '""" ll '"l "i"". (lHf. SH,-
...W.ttlK. I'rmhii-tJim nf i'l..,-lr.iril ...... nlr-

|u;;iil f;;r K -in m,,| r 4K ,,l m , in . W ,1-

A. . li-. , x'M',', l ","'" (: "- v Ah ' MiiDTlnl
Ji '.i (AI ,l (;| ' ll " li< " 1 Al1 '". "hlii.
1,1 C "J i ,m',l!!'n rl11 , Illfll '"" ( '. ('Illinium,

M ,'i, s 'T'""";, "i";! 1 " 11 "" " r "'" "..r.-nn,

MHiiln liifnrnnil!, lt i Cr>nli>r f.u- KV 111(17

. iinniiiiii. Kyjij..!!.,. i.:,, ([ i, ..... e[nK (!nn ;

w , A l< "' lllllll "lfV Iv.. (AKMC

WrlHlil.l'nUt.nn.n Al.'ll, Ohl.i. "' lnl ''-

Itni'liiK (In., Wlclillii, Knn. Sl.filil ,|117 II-
r.:! lUiihllllv iiniti.ii'iiliill.n. ami llliilil nmirul
"7, 1 ..... ' ''vnli.nll.m, Wl.-hll,.. ()] ( |nli<imn
A HI A , l ) ' ld | llrll< "'''' ! Ar "" lAFI.H). Tliikt-r

rrifrj''.' 1 . 1 ., tt s?*i, , ( '" ni - K"i-"<"WH, M.!.

S1,(IH,.M!). M..l!lli-rttlmi .,f C i:!;i nhrnin
MiiKr-nilmvii. Wni-iir-i- Itolilin. All' Muh-rM
Arm. lAM.t:), KnUfrni Al-'H, (jn.

f,',!7,"" l ",, Alr , l ' r " fl r "- WM.Hn, Kan. S-J.mill,-
MHO I'r.iil.inl,,,, ,f u .1 nirvmn. ,.,,

'I.m'tdiriMt Alroriifl, Jnniulm, N.Y, SMUl! -
i ; .4. IniiiMTtl ..... .ml n>|iiili' ...... . llllu . y nf

k', V ',', '?'"'' ' -'"'""Ifi. Miii'i'iiini.iilii Air
Mi.l,.|.|,.l An-n. (AFI.Cl, M.-CMInn AFIl.

Mr.ni.iiir.il Cnrii., Vim Nnyn. Cjillf. j;i .
Mill.Oim. Amilvlli'iil i.t.il rxiit'i'Iriuiiiliil iini.
jiniiti In iirnvl.1i' ..... l.n.ilntTV il|>|'H('ulil.' In

iv|i,-ninnl.. UAM.IKT .>ii|il ...... . Vim Niiy

jlviih-nipi Kimln..fi- licnnii. K.^imn-li tiu.l

' ''''''V',' l? 5 ^, ( , lv - 'AI'W!). Wrli,hi,l'im.'r-
"I'll Al'll, Oliln,

liitrrrtnllnnnl Ti>lp|ilnittt A TptcKfnnli Corn..
1'nmniii.i. N..1. Stl.HfiO II7II. t<riuhir(Ii)n nf
ilitFi'iin.' jiinrj.il m>nirtlv ciiiiimiiiiti'iillmiii
H|i.l|.i|i,...l I'dnm,!,,,. |.;| fll ., ,.),.,, Hrittl , ni||
IHv,, (Al'HC), L, C. Iliuitt.'..)!! FJcl.l, Mmiii.

Jlf.*''" ll , 1 M (' <'"" Monrnvln. Onllf. U.nttl..

IIOII, I'rmliinlni, ,,f htult iilildi,),. nlivrn/l
rjiiiirnipi. Mi.i.rnvtii. Ai>nmuiitfi<n1 [lyl.-nin
v., (Al'HC). WrlKl.l-I'nitomon AFIl,
Ohi.i,

Red Ball Express
Completes Firsfr Year

p Tli "Red Ball Mxpriiss," a Hpoclnl
Air_ jt'orcii airlifl of priority comhut
voliiclii nml nircrnfl |.arU to SoutlitiiiHt
AHIU, hiiN carri.nl almost MOO tons
of vital rurtfo to niilitiiry units in
VHitnam .since it.4 lirnt nij?ht
. 'I'ln! initial Kwl Hall (light took o/T
fi'inn Lravis AV'H, Oalif., for .Silicon
on Her. 8, |j)<}5. It currlwl only five
ii "" '

,, ,

lM, n\ n \\K with itn n>K"Iar loud.
Dun UK L]u> year a ono-day nu-ord WIIH
rcai'liinl wliiMi 571 pirn's, woij|liinr u
total .if lOfi I.OIIH, lift '1'ravin.

Named Cor a surface supply Mm,
HVHl^m which umtd tnuiltH to haul i'oo.l,
<'<liiipinci]t and ammunition to thn
li'onl, lint's of I'Uiropi- iluriaj;- WorlcJ
Wnr II, today's Military Airlift
Umimaml (MAC) opomtioii hauln
jnlv prinnty part;) to Intnp combat vc-

In UK HfHt year MA(! n,p,,rt H it H
Ivnd Hall KxprusH Ini.-i carried an avcr-
aiV of nion- than 2fi tons per day to
Southeast A.sia. Tin- ovnrall totul of
i , ; {(i.i (ons wa.s movc.l in (Jim mi.smons.
I li" Hiol Hall iiiivrafl, ronHLiUitwl
iijwiut. liv<> |TC((iit of th<> total MAC
iiirhlt to Southeast Asia duriiiiv thin
period.

AVCOM Assumes
Test Activities

Support reiipoiiMihilitieH for the
Army Aviation Tent Activity (ATA)
lit KdwardH A KM, Calif., have Iteen
reasiiifvned from the Army Tent Eval-
uation Coimnitnd to the Army Avin-
1.1'Hi Cnnnnand (AVCOM), St. I.miin.
Mn.

_ In addition, AVCOM has heen aw-
HiKntid respoiiiiihilities Tor tlin Army
element of the Lri-tmrvliT V/KTOT,
team at Kdwanhi wliich is imw en-
KfiKi'd in letitiiifv the r.infV-Temro-
Voufvlit XC 14 U nu'Ko aircraft,

ATA originally WIIH nHtnhlmhed in
lillill , KiiliHwiiiontly it WIIH aiuiiK-ned to
tlm lent and Kvaluation (limimnnd,
Alierdeen, Md., with the I'corjiani'/a-
tion of Army leehnical He.rvires
the early

DEFENSE PRIME CONTRACT AWARDS
TO SMALL BUSINESS

AmmmlH hi ThniiHundH

July-Ocl. IfllHi July-Get, liir.5

from All F
from Small

Percent .Small

Kirms

]y.r>

20.fi

OFFICE OF THE SECRETARY OF DEFENSE
WASHINGTON, D. C. 203O1

POSTAGE AND FEES PAID

OFFICIAL BUSINESS

Air Force Flight Control Research
May Extend Aircraft Life Span

The U. S. Air Force has contracted for a six million dollar
research program to develop an automatic flight control system that
could double the useful lifetime of both present and future large,
flexible aircraft such as the B-52, XB-70 and C-5A.

Called LAMS (Load Alleviation and Mode Stabilization), the pro-
gram is beingconducted by The Boeing Co.'s Wichita Kan. division

AFR OM r -1 I 1 ?^ ?P* mics Laboratory, Wright-Patterson
A* B, Ohio, a unit of the Air Force Systems Command's Research

Robert P. " '

COI ! tro1 , System being soufi ' ht - already proved feasible

d^IT^ if 1 ' f "'^ dampen stSral
and reduce or alleviate stresses from wind ensk inrl
maneuvering loads which cause metal fatigue in aircraft
The program's goal is to extend aircraft life bv 70 to 100 n P it

19$.

Army-Air Force Study
Combat Hazard

Project WTCST (WoaporiM MX
haust Study), a joint Army am
Air Force projoct, IN IH^IH'HJV (i
prevent a potential in-ohlcic
which could afluct liolicoptm
crews in com bat ovoi- Viotiuim,
CrcwK evaluating: tho AniiyVi
newer, more hoavily nrmorl heli-
copters, havo c:<miplaiiH'(f nf
nausea and dmimiHH nftor iiilijil-
inj? thick coacontratioiiH uf gun-
powder and miHHilo jiropollant
fumes croated during firinpr !<(
The Air Forco llocknt I'rupul-
aion Laboratory a I; I'Mwanlji
AFB, Calif., has ixmmod willi
the Army Acromoclical R(\M<!ai'c!i
Unit at Fort Ruckor, Ala,, lo
examine the oxluuint A*IIH<H pru-
duced by various typo.s of nuini-
tions and to detormino Ihoir
exact chemical compOHi'tion and
decree of toxicity.

Utilizing the sumo (Kniipmoni
and techniques used to ovahiatr-
rocket fuels, Project WJ'JST ^n^i-
neers are conducting tostw wiim
both gunpowder and misHilo pro-
pellants are burned undor lalw>-
ratory conditions. Tests will also
be conducted under Held condl-

f .

.eoprwni sensOT does not

loading applied the ri^KnS?-? l ^S of motion "
^ boo ^henose^i^T 1 ^^ to the computers.
et the aircraft, e B ~ 52 me asures wind gusts

on the test aircraft i s valued at $2,500,000.

tions.

lest data gathered bv Hn>
Rocket Propulsion Labomtm-VY
are relayed to the Aw my At -f
niechcal Research Unff ^
other information from in~!

Approach t<> the FY 1%K~72 Program niul FY 1%7-GK IhidKotR,
Ccncnil PurpoHCS I-'orct-H. \n\KV, 1 4 Airlift and Si-alifl KOITI-H, im^ 2(i
Developmunt, pugi! 29 B Othor Major I'rojiraniH, IMIK lii)

niict

Financial tables relating to the Defense Department budj>;ol; for
FY 1968, prepared by the Office of the Assistant Secretary of De-
fense (Comptroller), are published in this issue on pases 41 to fil.

The tables cover the following: areas:

1. Budget Summary.

2. Summary of the FY 1967 Supplemental.

3. Financial Summary.

4. Direct Budget Plan [Total Obligatipnal Authority O'OA)],
New Oblig-ational Authority and Expenditures, FY IWifi- 68,

5. Direct Budget Plan (TOA), New Obligationnl Authority and
Expenditures, FY 1966-68, by Functional Title and Service,'

6. Estimated Obligations and Amounts Available for OblijvHliion,
General Fund Appropriations, FY 1906-1968.

7. Estimated Expenditures and Amounts Available for Kxiit'ndi-
ture, FY 1966-1968.

8. Order of Magnitude Data on Comparative New Obliiraliomil
Authority by Functional Title, FY 1954-1968.

9. Order of Magnitude Data on Comparative lOxiwiuIiturcH liv
Functional Title, FY 1954-1968.

10. Financial Summary of FY 1967 Budget, Appropriations
Enacted and Supplemental Proposed,

11. Net additions to the FY 1967 Procurement Proi-ram for
Southeast Asia.

12. Major Procurement Item Quantities, FY 1967 and 196B Pro-

Ity tint

Hun. Itnlirrl ,H. MrNnmiiru

Nm-olary of
linn. Cyritu H. \'itnn

Urpiily Hm'Hiiry of l>r!Ymi
linn. I'hil C, Cmildin,-

AHNlMdint Hi-fi-fliiry nf Di-fniM

(I'uhlir Airlr,i)

<;!. Jorl M. Hn-plH'iin, (IHA

IHrrrlnr fur ( 'mminiil,v

t'ol. Kdnln (', (.'Union, USA
riih-f, Hie, in,-, M ,t

13. Military and Civilian Personnel, Yearend Numbor.

.l.Cdr. I-; W. ^^ l I^<,r l UlH^
AHK.M-. l|||r .......... Mi <Vrll| a i'oll.,1,

1 ' 1 "" 1 ; M'-. t'K Uhilcc

AnHlnlan(

Nnriunu R Wiirrii, JO), UHN

DOD Procurement Conferences Set

Invitll * Ioil f <'

Tint /Wnii> hntiitttru

ill iml) ifilif. liinntltly l,y idr nww

A, I.nhnr Hiviiiiim, Dlnrturatit for
Uimnuiilty Hi'liitiiiiiii. OKlni of (hi,

Mr Airnii'ii). !li! nf fnmlii f,,,. ,.(
Iliiii iMililit'itlluii wini fi|i|ii'ttvfil tiy lim
niriTlnr of Din llliivim nf Mm Hiiilmtl.

Hi"' iiurjhxiK ,f |||,.

to iU'l'Vt' iin ji iin-iili:i nf <
linLwi'i'ii ih.. l).-|mrliin-ii(, nf |ii>ri>niifl
Mini il-i mithini.'.cit uj^riiriiij!
mnl

and Requests foi A IUUUSHI .^pwovm in\ . -

have repreaentativeVninflnHn f J- U1) , primc wmtnictora will
P es ^tative s available to discuss subcontract opportunity.

Schedule, location and contacts are as follows-
April 7, New Orleans, La.
Contact; Kenneth A. Languth

7n U R M ? Re ^ai'ch Institute

708 Maritime Building

New Orleans, La. 70130
April 20-21, Orlando, Fla.
Contact: Don Rathel

April 27, Indianapolis, Ind.

Contact: Crawford Parker

E x J!i? v Vic S President

in ^

jiMli.'i,.,! nr.iHriunfi JUH| ]ro|n-| !1 ,
will tJi-.-lt tn Mlrimldh. tlmiurfil. by
liuliiNlry

t.f

l/i
inuiiiiy.

i'My
lint i-riniln^ii^iiiH of thn

In thn Hulktin in -

ii ft.1-
1 ' (mlu "

from

H ' flWtt
H<

wllhottt
^iitHllvci.
nf tint ])

V " ml

HllOUld

Irfitar

. BKHI8.

int " K(ln ' W*lilHKn, n.O.
, tfllf.pli,, , (203) OX?nnl R.270II.

Indianapolis, Ind. 46204

(.Kflilor'ti Note; Thin issue of tin;
Defeiwe IndiiHlry Unllelin in debated
alumni entirely lit Secretary of De-
fense. Robert S. McNamarti't) alatement
an Jan. 23, H)H7, before a joint reu-
nion of lite Senate Armed Services
Committee anil the tit-naif Subcom-
mittee nn Department of Defense
Appropriations tin I fir />'}' liifitl~72
Defense Proftraw ami the, ISfiS Defense

While space limitations permit only
an abbreviated treatment, of the state-
ment, an attempt has been made to
excerpt those portions which are. of
special interest, to defense iinlnsti'if.
1/ninf/ lite method established in pre-
vious years, pantfirapli markings have
been deleted from the original text
for the sake of clarity.

The, statement of the Secretary nf
Defense on the /'T /llt',7 Supplemental
for Southeast Asia will be carried in
next month's issue of the Bulletin.;!

Last year when I appeared he Corn
thin Committee in support of thn FY
1007-71 program and thn l''Y 1007
Budget I said:

"With regard t.o the prepara-
tion of the FY 11107-71 program
and the FY 1000 .Supplemental
and the FY 1007 Budget, we have
had to make a somewhat arbi-
trary nHHUtnption regarding thn
duration of the conflict in South-
east Asia. Sincro we have no way
of knowing how long it will ac-
tually last, or how it will evolve,
wo have budgeted for combat op-
erations through tho end of ,Tuno
1907, Thin moans that if it later
appears that thn conflict will con-
tinue beyond that date, or if it
xhould expand beyond the level
awmmed in our present pinna, wo
will com back to thn Congress
r with nn additional FY 1007
request."

Throughout thn spring ond summer
of last year in my appearances before
various ConffroHslonal Committees, I

roit(>nit(iil thn fact that thn FY JOG7
BudKut wan Iwsod on thn arbitrary
iiHHumption Unit thn conrtiist would nnd
by Juim IOC?, and that additional
fumlH would be ntquirt'd if tho ron-
Ilidt contimuid. , . .

What wn worn trying to do wan to
avoid tin; ov(!rfundiiiR- which oocurnid
duriiiK th Korean War when thn l)e-
fixmo Department requeued far movo
funds than were actually needed. l''or
example, the Defense Deiiartincint re-
queHted a total of about $]<M billion
for the three Rncal yonrs 105.1 -fill;
thn CniiHTe.ifi appropriated a total of
$lfi(! billlum; the amount actually ex-
pended was .$102 billion; and thn un-
exiinnded balances I-OHO from $10.7
hillion at the nnd of FY li)50 to $02
billion by the end of FY 10fi8. It took
about live yenr.s to work tins unex-
pended balance down to about ijWH
billion; and we were able to nupport
a Defence program of about $fiO bil-
lion a year during FY :U)(t2-(M with
about ?;i() billion of unexpended 1ml-

Although we ntill Iiave no way of
knowing when the conflict will end,

Secretary of Defense
Itohcrt S. McNanmra

it is jinrffictly clear that we mu.st take
whatever measures are imce.'wary to
ensure our ability to .support our
foiveH in the ovmit the conflict doew
continue l)eyond June ,'), HHi7. In-
deed, when it Iwcame npjiarmit lust
summer that this was likely to be
the ea.sn, wn continued tlm buildup of
our military personnel .sLreiiH'Ui be-
yond the level anticipated in the FY
I!)(I7 Budget and took action to ensure
that deliveries of lonf? lead time items
would continue beyond June HO, Ii)fi7,
without interruption. The Congress
was informed of tluise actions through
the veprogrannning [jrocesfi and re-
lated heariiiKH.

Hut, while it was clnar tsven hint
summer that additional funds would
he required for FY 1007 if the con-
lllc.t in Southeast Ama wero to con-
tinue, the timing and the amount of
the additional request posed a prob-
lem. With regard to timing, we hud
essentially two alternatives: request
an amendment to the FY 11)07 liudget
in tho .summer of !%(!, while it was
still before the Congress; or wait un-
til early the following year and re-
quest a Supplemental appropriation.
Kadi of these alternatives had certain
advantages and disadvantages. . . .

The major disadvantage of waiting
for a Supplemental has boon tho nend
to reprogram, on a rather large scale,
available FY 10(17 fuiidn to mecit our
mo.st urgent longer lead time procure-
ment requirements, pending the avail-
ability of the additional fundH. We
reeognixn that this extensive repro-
gramming ban placed an extra burden
not only on the Defense Department
but on thn Armed Services Committees
and tho Defense Approprlalionn Sub-
committees as well. Some of theno
reprogramming actions required tho
prior approval of this and other In-
terested Commitwis; all of them have
been reported to the Committees con-
cerned. However, in order to facilitate
your consideration of the FY 1907
Supplemental request wo have pro-

Defense Industry Bulletin

;i rrcajiituhtion nf all of the

j-pi-'Uri'iin-'rit program adjust-

;nTf^:inf,' that fiscal year, which

N 1 -..'., v.ilh a year and a half of
: .' it f\j-!'j'ii-iny in Southeast Asia
':.! i! a-, ] f."]jVvc that we have a
: h l"'t!'-r uinli-nilaniiirig of our fu-
,r< rv-i'iirt'iiif-nt.'!. In October 1965,
-,''-. !';.- r'Y l l Ji\7 Hudget was heing
, - l"|"-it, '.v<- vv.-iv in the midst of an
j.-li-i',.- 1-uiMup in South Vietnam;
-.;- th'-ri that \vp moved over
,<>"> in-'ii 10,001) miles in less than
" 'i:iy-. The fuhirr- was impossible
j'n.hM with accuracy. In contrast,
o, f,|... r lOfii], at the time of the
I'.'.r.jiion of the FY 1908 program,
,i!-l 1' ok nhf-ad to the time when
" f-nv.i in Southoast Asia could be
" Ml tolr-vM off

!"' f.v can m\v project our re-
!V!>i->nts for th<> nmflict in South-
'.. A-ia with far jrroat.-r confidence
n ''i.-t y.'ar. \vi: have changed our
' ^i'l-rorteh in preparing the FY
~ .Siipplr-iiH-rital as well as the FY
* ^uiig.-t. Sufficient funds are be-
r-(fi]h^tf- t l in iioth the FY 1907
Ml'-iti'-rital and the FY 1908 Bud-
t" pr..tn-t the production load
''i iiH furnhat essential items un-
> l!"'9 funds w.uld become avail-
Thus if it later appears
ndii't will continue bevond

or,l w additional
for deHv, ry after D

,, and k,,p the production lines
;v,tho ut interruption.

tlie caw of tactical aircraft

' lv " a ro(lucUo11 Iead

of the Southeast Asia conflict, or un-
foreseen emergencies elsewhere in the
world, the FY 19G7 Supplemental and
FY 1908 Budget should be sufficient
to cover our requirements until FY
1909 funds become available, even if
the conflict continues beyond June 30,
1968,

Because of the large demands of
the Southeast Asia conflict, I have
deleted from both the FY 1907 Sup-
plemental and the FY 1968 Budget,
procurement funds which are required
simply for the replacement of items
already in the inventory with later
models, except for tactical aircraft
and helicopters and where the newer
item is being procured to replace con-
sumption. This type of marginal
modernization can be safely deferred
to a later time.

With regard to military construc-
tion, we have included funds in the
FY 19C8 Budget for military family
housing and other categories of "non-
combat" facilities, e.g., replacement of
old barracks, BOQ's, maintenance
shops, administration and school
buildings, etc. We deferred these types
of construction programs in FY 1966
and 1967 in order to reduce our de-
mand on an economy already laboring
under inflationary pressures. Now
that these pressures appear to be
subsiding, we should be prepared to
assume the orderly modernization and
expansion of our physical plant, which
represents an investment, in terms of
acquis!tion cost, of well over $36 bn _
lion. The rate at which we do so will
(spend upon economic developments
'luring the next 12 to 18 months. In
S"'' ,T e ?W ** Please the

requests of tho Servicuu am) Dffrmc

Ag-ciicioH by a 1 unit $^'l.;t billion, xvliilt

at the sjimo limn j>rmvi<liiiK fur fill

essential military refill ri'iruiiitn. W*

am requesting Cor l'y I1KS7 a lulsi] o[

72.8 billion in nnw ohliRjUiunn] ;iu-

thority, of whidi .flli.tt trillion i;i in (fin

special SuppUminntal for SmiOn-nut

Asia. For FY lEIfiK \v<t urt* n'ijiir:;tlnK

a total of $7fi.8 billion in new <i!)1l K ii-

tional an thority. Kxjic>Militinv>{ JMV

now ((Htimatod at; $tf7.EJK hiNdm fur

FY 1007 (.flO.Hri billion ulmw tln nrJff-

iiml budfixit tiHtimiiln) aml$7:i.l l.ill[. i;i

for FY 19(58.

Impact of the Defense Pro
gram on the Balance
of Payments

During tht! pa.st y-iir
that tho United Rlat.-M him h.^n Vnnk-
ing in its oflortH to <>liinliml<! tlu- Inm-
blosorm- dnnelt In it.t Intoriint i<mnl
balancos of payments \vmi imv>i|ril.
Ry 1905, the overall "Hiiuhfily" .Ir-fVil
was -slightly nvor $].!) billion, ili.wn
mibstiintially from lltn $:i.K lilllimi
lovel of tho pr<;vimiN year, nti.l .-
were hoping for a rurtlit-r mipnnv.
ment in 1900. Howow-r, w nnv .-x-
poet that whim final ,[utu an- nvnilul.J.v
for that year, tlmy will idiuw Unit .MI
a liquidity ImHin tlin <lrflri1 ivjrf
roughly tho HUMIO an tlm yi-ar iwf int i.
: chief factoi-H in thin (Irvfldimu-al
fi some dotnrforntinn on Hi,. ir m l<-
accounts .stemming r r ,,, M || H , ,,,,,,(,,
domofltic economic nxpniittfui) .lurjii^
the period ami M K h,H- D..f,.,i (l o ,*.
pemhtui-os abroad.

, . " JIIOL. j tsieas
balance of the FY 1966 military con-
struction program (about $666 mil- n T" ltllow ' for '"""-V y.w th..
lion), nnt f). Q r, , j. J I1Jl DoiiavtiYintif r Tir ,

and then move forward

, i

Dopnrtmont of nofoiwo IUIH luron

""Pact of it,

on tlm TT.H | H ,|

and

nmi

period

C0mbnfc

H t [ t tMlt \.

^ ,

PY liw "

to reduce
and the

turns in face of substantial increases
in foreign prices and wages and in
tliu pay oC U.S. Defense Department
personnel. For example, in Kuropo the
cost of living went up about :IO ]u>r-
cont und wage rates ro.se morn than
DO percent. However, during PY 1HOO
the requirements of the Southeast
Asia conflict, together with a modest
though, hopefully, temporary decline
in military sales receipts, combined
to raise tin; net adver.se balance to
$2.1 hillion.

The major factor underlying thin
rise, of course, has boon the war in
Vietnam. Military expenditures
abroad are clo.sely related to the si/e
of our deployments overseas. Helwcen
.Time li)()li and June 190<i, the total
number of U.S. military personnel in
South Vietnam roue from 5!), !)()(! to
2(17,500, an increase of 207,000. In
addition, it wan necessary to under-
take very large construction and logis-
ticH efforts in support of operations In
Southeast Asia, hoth of which added
to the payments deficit. Them! addi-
tional foreign exchange costs wore not
unexpected (once the dimensions of
our commitment there became appar-
ent), and I reported (.<> you a year
ago that the conflict might raise such
costsi several hundred million dollars
above pre-buildup levels; indeed, we
now entinmle that there were approx-
imately $500 million of jau-h additional
expenditures in FY I1MHI.

Wo recognized thin threat to our
balance of payment from the begin-
ning and we have lalcen extraordinary
measures to minimi/e its impact.
Nevertheless, we miint ex[)ect that
the higher Southeast Asia deploy-

ments planned over the next year and
a half will inevitably cause our over-
seas spending to rise still higher in
the months ahead. Indeed, it now ap-
pears that Vietnam-related foreign
exchange costs in PY 1907 will run
over $1 hillion higher than the pre-
buildup year of FY 1065.

In previous years I have described
in Honiti detail the Defense! Depart-
ment's actions to limit the balance! of
payments effects of our overseas pro-
grams, including:

The prom [it withdrawal of U.S.
forces from overseas areas whenever
changes in circumstances, our own
capabilities, or tho.se of our allies per-
mit such action,

A continuing review of the re-
quirement for and the efncient utilisa-
tion of overseas installations with a
view to eliminating or consolidating
these facilities in order to reduce their
costs to a minimum.

a Acceptance of up to 50 percent
cost penalties (in some cases more)
in order to favor procurement of U.S.-
produeed goods and .services over
tho.se of foreign countries. Through
FY I90IJ, nearly $300 million of such
procurement was diverted to U. S.
sources.

The virtual cessation of new olT-
Hhnrn procurement for the Military
Assistance Program. In PY 1900, ex-
penditures for such procurement wore
lens than a third the FY liW.'t level.

Kfl'orl.s to encouraKe Defense De-
partment personnel to reduce their
overseas spending and, conversely, to
hicreitHe their personal savings.

Sharp curbs on the H!KO of U.S.

Billions

Plscnl Years)

tiXPENDITimiOH

1901

1902

1003

li)04

1905

190(1

U.S. Voreen and their .Sup-

port (Kxcl Incr in KKA

Kxp over FY 01)
Military Assistance

$2.5

$2.4
.3

$2.3
.2

$2.4
.2

Other (AI'XJ, etc.)

"L.

Total

$11.1

$3.0

$2.8

$2.0

UKCKfPTS

- .9

- 1.4

- 1.2

1.3

- 1.2

NI.'!T ADVKKSK

BALANCE (I'lxcl

Incr In SKA Kxn

over PY 01)

$2.8

$2.1

$1.0

$l.fi

$1.2

$1 4

Increase in SliJA Exp

over PY (11)

NET ADVRKSK

HALANCK

$2.8

$2.1

$1.7

$1.4

$2.1

Fig lire 1

headquarters staffs abroad and on the
number of foreign national employees.
With the escalation of the conflict
in Southeast Asia, a number of spe-
cial measures have been added. For
example, in the area of personal
spending, disbursement procedures
wen; modified to make it easier for a
serviceman to leave bis pay "on the
books" or increase tin; size of the
allotment -sent home. A most promis-
ing step was the enactment by the
Congress last August of the Uniform
Service Savings Deposit Program
which authori'/.e.H interest rates of up
to 10 percent to encourage savings by
servicemen overseas. We have initi-
ated a vigorous educational program
to complement this new savings op-
portunity and the results to date have
been most encouraging. Total deposits
under this legislation in tho first three
months (September-November 1000)
totaled $211.4 million.

In the construction area, special
procedures have been put into effect
to minimi/e the balance of payments
costs of our large building program
in .Southeast Asia, again with grati-
fying results to date. For example,
during PY 190(5, only about one-firth
of the $H72 million paid our principal
contractor in Vietnam entered the
balance of payments. The rest in effect
was "returned" to tho United Stnte.s
to buy American goods and Hervicesi,
including transportation on U.S. (lag
vessels. Most important, thin was ac-
complished without impeding in any
way the progress of the construction
work itself.

With respect to military receipts,
the decrease in PY I'lOO can be traced
almost entirely to the phasing of ac-
tual receipts from the Federal "He-
publir of Germany, with whom we
have had an agreement to offset U.S.
military expenditures in that coun-
try. The basic agreement called for
the Germans to make payments in PY
1000-07 of $1,350 million for pur-
chases of U.S. military goods and
services required to meet their de-
fense needs.

With regard to our military Hulcn
program, I have the impression that
our policies and objectives in this area
are not very well understood, either
at home or overseas, For example,
allegations have been made:

That we ar forcing unwanted
arms on countries.

That we are selling: arms to coun-

Defense Industry Bulletin

si-h h:v no legitimate use for from an average annual level of $2 These standards ro fully ronsli

hi \vhiVh c.mlil better use their billion-plus during the 1950's to about tent with the spirit of thr provisio

r.vMiiivo;! to improve the lot $1.5 billion. Since FY 1961, this added to the Poroiprn AtimH(iin<i> A(

,, ,,,.-,,,!,-. downward trend has continued with last year, which caDw for Urn Halo

... ... , n- erant aid declining- both absolutely program to 1><! adinmiuUiritd En wucl

( ,_ im i=,'rtmin;tfpv Sf> HID- B"i>- ""- > ' "

hat !.v indiscriminately selling *it , aitl declininfir . ...

, and relatively. Whereas in FY 1961. a way an to

the arms race "" ii inm-** ,,..... , ,,

there wore two dollars of grant aid arms control und diHarnmninnt

:irii! umit-rinifiinif the jioaee,

That in t.^nui rases our military

,'.! (-Jfurta iiro thwarting the ob-

j.'' i iiv(^ i>f r<iir own economic aid pro-

arms races, .,

\w. rutl

mate that thm counlrmn of tin- nun
communiHt world will have: h'K'lfnmtf
for mili.Htantial .union nti

for every dollar of military sales to incuts and
foreign recipients, by FY li)CO the Ovnr the noxl live
ratio had been reversed. Moreover, I
think it is important to note that, in

fii!i! - l{ - terms of total value, U.S. military

That our military sales efforts exports in the ten-year period, FY O f M(nv military

r, motivate-,! primarily by balance 1962-71, are not expected to be moaa- paat oxpi'rioneo, w.i JHie-vn tlial ,,,;>

urably hig-her than in the decade, FY
1962-61; the big change will bo in the
shift in the way these exports
are financed from grant aid in the
1950's to military sales in the 19-fiO's.
.With this shift in emphasis from
grant aid to sales, it was decided to

Ui'-r.'fY'iv, to review briefly the back- organize the latter on a more formal
gr.nmd ami origin of the present for- hasis within the Department of De-
cign military sales program. fense, indeed, to make it a separate

It has Iwen widely recognized in our l )r S ram - The principal objective of tl -, llK , a

<---untry, at least since the Korean f his forei er" military sales program , mr t, ( ] in n.-iVrim- ])(.n,u'(rui>iil will
JVar that the collective defense of the *r r ' ^^ thc Bftn continue to tal<n nvnry nppc.rhmit v |i,
Free World mjuircd armed allies, and that of the p"t aid program, i.e., promote roojK.ml.ivr InirlMIr'. 'jir
? ,im f Hvhat more belatedly, that the to Pjmote ^ the defensive strength of ranffommitH-.inclu.llnK nx.fimil'lv,. tv-
internal .security of most countries r alll a .^ consistent with H0 arch and dowlop.nont ,/mirl,, un.l
r.- M irw some armed forces. Circum- Derail foreign policy objectives. to emi ,i millM) th(1 | lll|lllPttint ,,, l4li
Manr,, of history, in particular the Encompas.ad within this objective bution which th" , ' n , 1, mm

LTt'Jit V wail-nnfl.l ^nr,^ : !_.. are SfiVfiral HtlP^l'fin nvi-lr., . "im.H *,Hl, MHH..ii (MI),|[NLllt iJUl

"f ijiiymr-nts r.oiisi(ierations, abetted
1-y 111*' d*:-#irp for profits on the part
''f U.S. manufacturers.

A!! rf thf.-ifi allefj'itions are false
and an' l/;i.-.;d on a misunderstanding
'r !:irk of knowledge of the facts in-
><-'hi'.i. I Relieve it would be useful,

of tlies(> i-criuircmimtH <'nn

(!iTtM;tivnly mitt hy punilwHcn friun us,
Ilowiivnr, our ability tti n-nliv,.' Ihis
potnntia! will dopnnd (in mill? ninjoi 1
condition; wo muni foriviiii'o tnu- al-
lies that the U.K. mililury m\]\w JPIM.
grain in not a tin-out l.o lluHr tnn(|
raii^'o nutiontil Intcrc'slH. And, UK I
mentioned previously, \vm iim.-ii Inj
willing, n a nation, in innki- mitfliiry
trade n "two way" ntn-i-L l-'or mir

iy weakened economic condition are Bever al specific goals:
of most countries following World * To further the practice of co-
ttar II, force,! on the United States operative logistics and stamlardiza-

makn in Jurthoriiifv llii' ol>J<'c-tlvi-n of
lloctivd dfjfrmtw.

TurnJiiff npfuln to our Ifil.i>ntnttiiuil

th* rol of major armament supplier tion with our allies by inteirratinir JlU ' n1 '^ n '<f im *=o our lnl.i-rnntt.uil

to the Free World. Accordingly, dur- our supply ayat ems to the maximum ^^ JM ' Hltlm1 ' f()r Ul " ""'' <""

jnt,' the decade of the 1950's, the exte nt feasible and by hehmitr tn .. . ' ,'' l H l" ! ln fe any mlur-

t'n.t^i States had to meet the legiti- "mit proliferation of different rln n ..V,." 1 th " 11<it; " tlv< '''^ l"lnm on (ho

mate armament needs of its friends of equipment. military" account nuiHt iTitL mi tin f.

primarily through a large grant aid To reduce the cosh M i, n n J 51 "?! 1 " In Hlll " n 1 * tlc I t* tH ' 'l ll ^''" "i

program Indeed, of the ?22 billion of allies and ouise ve s of eaSn , Ur '"^ Prn(! " Wl1 JUltl (l(UlIl ' nbl<! limi " 1 '"^

U.S military sports during the collective fo "es ta 'avof S' ff W to how ''> "f w ,-m. or h,m|,|

1950-s. $17 billion were financed by sary and costly dupuS d T^" XIIM I t fr m thl " Wmr '- In ^"'"--

Congr^nal appropriations. ment program" an v r '?" flhould 1>n Ellll<! ltl "'!' '^

By the ,atter p a , t O f the decade, ~ P^lrL ^ ^ ^T V'^i ^ ^ f ^'^

however, many of these countries had duction ru "s. P "PPort nfltnbliflhmont in tl> |HXH-I'HH

beconw prosperous again, enablimr To offset ft t i M .f ,- ,, rolocntln ff fl ' 01 Krnm-n, nlt!iou K h

' ( " ""- g ,favn^! ',, a L'!f t . partlaII > r ' th thfil ' ^11 bo Homo Initial " -

" to produce more of their own ^favorable payments in^n, , , 7" r , ' n """ : uuum "K

" or huy them abroad. At deployments aSd Z? t TJ P ^1* rnlo U n il ^''- '" "'
'me, this rising affluence al- collective defense lerG9t f - a - Bast ' W(1 wi " r '^nLlm.Inu

lowed several of these
build their monetary

,!! li ,T; e L b ! sic stan "* re eatab-

lished to

the

of our

as our Vietnam ilonloymnnlH
largo.

Ijet in

We will
our country to
aid th

its own forces,
any

i Cimmilttftc,

... ,. , ~ JUl ' 1' rnoci- uj nit id it
with the important imtionnl B^-urlly
objectivo wo arc chavff(Ml witli up.
eompHshing, WQ remain k^nnly
of the burden that our

programs placo on tho nniton'H Inter- '*

thin

burden aa light as poaaiblo.'

February 1967

In this section of my statement I
will dicuss tho throe major prog-nuns
which, together, constitute tho foun-
dation of our general nuclear forces,
and civil defense. Because of their
close inter-relationship and, indeed,
their interaction, it in essential tlmt
all three of those programs ho con-
sidered within u single analytical
framework.

* The General Nuclear War
Problem

During tho past HOVOHI! years, in
my annual appearances before thin
committee, I have attempted to ex-
plore with you some of tho moro
fundamentiil characteristics of tho
general nucleur war problem and the
kinds of strategic- forces which it in-
volves. I noted that our general nu-
clear war forces should have two basic
capabilities:

I To deter deliherato nuelour at-

tack upon tho United States nnd its
allies hy maljitaining, continuously,
ft highly reliable ahility to Inflict an
unacceptable degree of damage upon
any single aggressor, or combination
of aggressors, at any time during tho
COUI-HO of a strategic nuclear ex-
change, oven after absorbing a sur-
prise first strike.

Tn the event such a war neverthe-
less occurred, to limit damage to our
population and industrial capacity,

The first capability wo call "As-
sured Destruction" and the second
"Damage Limitation." The strategic

offensive forces the ICDM's, Lhe

submarine-launched ballistic missiles
(SLUM's), and the manned bombers
which we usually associate with tho
first capability, can also contribute to
tho second. Thoy can do no by attack-
ing enemy delivery vehicles on their
basos or launch sitos, provided they
can reach those vehicles beforo thny
nro launched at our cities. Conversely,
tho strategic defensive forces-
manned interceptors, anti-bomhor sur-
r fncc-to-air missiles, anti-ballistic mis-
silo (AHM) which we usually asso-
ciate, with tho second capability can
also contribute to tho first. They can
do so by successfully Intercepting and
destroying tho enemy's offensive

weapons before they reuch our stra-
tegic offensive forces on their bases
and launch sites.

As long as deterrence of a delib-
erate Soviet (or Red Chinese) nuclear
attack upon the United States or its
allies is the overriding objective of
our strategic forces, tho capability for
Assured Destruction must receive tho
first call on all of our resources and
must be provided regardless of the
costs and the difficulties involved.
Damage Limiting programs, no mat-
ter how much we spend on them, can
never substitute for an Assured De-
struction capability in the deterrent
role. It is our ability to destroy an
attacker as a viable 20th Century
nation tlmt provides the deterrent, not
our ability to partially limit damage
to ourselves.

What kind and amount of destruc-
tion we would have to be able to in-
dict on an attacker to provide this
deterrent cannot lie answered pre-
cisely, However, it seems reasonable
to assume that in the case of the So-
viet Union, the destruction of, say,
one-fifth to one-fourth of its popula-
tion and one-half to two-thirds of its
industrial capacity would mean its
elimination as a major power for
many years. Such a level of destruc-
tion would certainly represent intol-
erable punishment to any industrial-
iwd nation and, thus, should serve as
an effective deterrent to the deliberate
initiation of a nuclear attack on the
United States or its allies.

Assured Destruction with regard to
Red China presents a somewhat dif-
ferent problem. China is far from bo-
ing an industrialized nation. However,
what industry it has is heavily con-
centrated in a comparatively few
cities. We estimate, for example, that
a relatively small number of war-
heads detonated over 50 Chinese ur-
ban centers would destroy half of the
urban population (more than 50 mil-
lion people) and moro than one-half
of tho industrial capacity, Moreover,
auch an attack would also destroy
most of tho key governmental; techni-
cal and managerial personnel and a
largo proportion of tho skilled work-
ers, Sinco Rod China's capacity to
attack tho United States with nuclear

weapons will bo very limited, even
during the 1970'a, the ability of even
a very small portion of our strategic
offensive forces to inflict such heavy
damage upon them should serve as an
effective deterrent to tho deliberate
initiation of such an attack on their
part.

Once sufilcient forces have been
procured to give us high confidence,
of achieving our Assured Destruction
objective, we can then consider the
kinds and amounts of forces which
might bo added to reduce damage to
our population and industry in the
event deterrence fails. Hut hero we
must note another important point,
namely, the possible interaction of
our strategic forces programs with
thoso of the Soviet Union. If tho gen-
oral nuclear war policy of tho Soviet
Union also has as its objective tho
deterrence of a U, S. first strike
(which 1 believe to he the case), then
we must assume that any attempt on
our part to reduce damage to our-
selves (to what they would estimate
we might consider an "acceptable
level") would put pressure on them to
strive for an olTHotting improvement
in their deterrent forces. Conversely,
an increase in their Damage Limiting
capability would require us to imiko
greater investments in Assured De-
struction, which, as I will describe
later, is precisely what we now pro-
pose to do.

It is this interaction between our
strategic forces programs and those
of the Soviet Union which leads UH to
bolieve tlmt there is a mutuality of
interests in limiting the deployment
of anti-ballistic missile defense nys-
terns. If our assumption that the So-
viets are also striving to achieve an
Assured Destruction capability is cor-
rect, and I am convinced that it is,
then in all probability all we would
accomplish by deploying ATJM sys-
tems against one another would lie to
increase greatly our respective do-
fenso expenditures, without any gain
in real security for either aide. It
was for this reason that President
Johnson decided to initiate negotia-
tions with tho Soviet Union, designed,
through formal or informal agree-
ment, to limit tho deployment of ABM
systems, while including at the same
time about $1175 million in his FY 1068
Budget to provide for such actions
e.g., protection of our offensive weapon
systems us may bo required if these
discussions prove unsuccessful.

Defense Industry Bulletin

>?ti<;n, it might be use-
.- ar:othr-r fundamental

that the concept of
u';i.;n implies a "sec-
nliiity, i.f\, a strategic
i jHi' 1 and sufficient
i''-trv.y the attacker.
I 1 -! IV .-.i ruction is also
i'.v. they must always
3k offf-nsiivi! forces in

a-; a potential first
ju = t as \vo view their
i'it; for a second strike

U.S. vs Soviet

Intercontinental Strategic

Nuclear Forces

Oct. 1, 1966
U.S." USSU

ICBM'fl" 934

SLBM's (U.E.

Launchers)' 612

Total Intercontinental

Ballistic Missiles d 1,446
Intercontinental

Bombers e 680

The Size and Character of
the Threat

lr. !!<{<>! t-'i as-'f-s. 1 ! the capabilities
>-f fur jf-'-t-f-ral nucloar war forces
-'-"r the ;; f >.\t tft-vcral years, we must
tu'', K;K> account the size and char-
JI-.-VT f the stratfpir forces which the
f'V.H't Union and Red China are
li.v'ly to h;wo during the same period.
At:ain, !,'t me caution that, while we
",T,O rorifonable high confidence in
our o?.tirr,:,t,?3 f ()r tfo c ] ose .i n p er i 0( | f

t' ! .i for tlit? early part of
<watk> are .subject to much
ur.rcrt.nnly. As I pointed out in past
aw-tarancps tefon? ibis Committee,
''iJ-fi hn^-r rang.? projections are, at
'*'>'.. 'ir.ly in forme J estimates, par-
ticularly since they deal in many
M""i wuh a period beyond the pro-
fuction nnj deployment lead times
<.. to' waiwri systems involved.

Jhf - So * ie < Strategic Offensive-
Defensive Forces.

Two significant changes have oc-
curr]_ during th, last year in our
Projections of Sovfot strategic forces.
I**' first is a faster-than-expected
nit* of construction of hard ICBM

rtl!'^ r '*T' f ' 3 moro P s 'tive evi-
. r^t! ^ of a deployment of an anti-
fraliihiic missile defense system
n.nd Moscow. (Both of these d ve

nnmnnl .. *!! ,, 'vui. UV*CJ-

fall considerably short of

340
130

470

166

Intercontinental Ballistic Missiles.
As of now, we have more than three
times the number of intercontinental
ballistic missiles (i.e., ICBM's, and
SLBM's) the Soviets have. Even by
the early 1970's, we still expect to
have a significant lead over the Soviet
Union in terms of numbers and a
very substantial superiority in terms
of overall combat effectiveness. In
this connection, we should bear in
mind that it is not the number of mis-
siles which is important, but rather
the character of the payloads they
carry; the missile is simply the deliv-
ery vehicle. Our superiority in inter-
continental bombers, both in numbers
and combat effectiveness, is even
greater and is expected to remain so
for as far ahead as we can see. There
is still no evidence that the Soviets
intend to deploy a new heavy bomber
in the late 1980'a.

Anti-Ballistic Missile Defense. Wo
have been aware for many years that
the Soviets have been working on an
anti-ballistic missile defense system
just as we have been. After a series
of abortive starts, it now appears
that the Soviets are deploying SUc h a
system (using the "GALOSH" mis-
sile, publicly displayed i n 19 64)
around Moscow. They are also deploy-
ing another type O f defensive system
elsewhere in the Soviet Union, butS
weight of the evidence at this time
tnat this system is not in
primarily f or anti-ballistic

threat, against which we
* Iw fl hedging f or several e

of ft. Soviet c

J Orally in line .vith those T
*"*-uwd here last

ud -

missile defense. However, knowing
what we do about past Soviot predi-
lections for defense HysteniH/ we imiat,
for the time being, plan our forces on
the assumption that they will hnvD
deployed some sort of an AltM Jtyti-
tem around their major oition by tlm
early 1970's. Whether imuto up of
GALOSH only, or a comliinnUmi nf
GALOSH and other typos of iniHsiloii,
a full scale deployment would (Nist
the Soviet Union at Icust $UO to Siifi
billion.

The Red Chinese Nuclear Tlirttal.

Thero has been no battle
in our estimates of the Heel
nuclear threat. Thoir firing of u nu-
clear armed missile over n
of a few hundred mi lew lnnt
falls within the limits of Hint ntl-
mate. . , .

With regard to nn ICHM, w ).,
lieve that thn Hod Chfmwa miclivur
weapons and ballistic miHwilti <lm r i'tujt-
meat programs arc boiiiK purmicrl
with high priority. On thn Imulji of
recent ovidmicn, H n])pnnr posufhlc
that they inny conduct cither a iqiari*
or a loner-ranffo hulliHtic minnlh*
launching before thn <>iul of Uir.V.
However, ifc appears unllkoly that th
Chinese could deploy a NijrnlflcnnL
number of operational ICBMSt before
the mid-1070'fl, or that thown KJUM'n
would hnvo groat reliability, iipi-cil tt {
response, or oubBtanHn! prnterllnji
against attack.

Red China also hnn aomci bonilnvra

which could carry nuclnnr w.-uj,

but most of them hnvo nn ojinratEiuitil
radius of only a few hundred initt'M
It is highly unlikely, on the. l^nl, ,,f
cost alone, that they woultt undca-tuk.-
the development, production mid dp-
Ployment of a now, l onff rn ,, KO
bomber forco. If they C!WHO to do If0(
it would take them a dociulo or mom
before they could deploy it, Accont-
mgly, we have no reason on this
accourit to change our eatimnto Unit ft
significant Red Chinese miclonr Ihwat
to the continental United Stnlcn will
not develop before tho mJ(M070*H

ar* 1

.. aoyw meroonUnontaJ^j ? ur Mrutegio Air Cant'

tS MM - iS'ss ;:;LS~.

Capabilities of the Proposed
Forces for Assured Destruction

The most demanding test of our
Assured Destruction capability is the
ability of our strategic offensive
forces to survive a well coordinated
surprise Soviet first strike directed
against them. Because no one can
know how a general nuclear war be-
tween the United States and the So-
viet Union might occur, prudence
dictates that we design our own stra-
tegic forces on the basis of a greater
threat than we actually expect.

Capability Against the Expected
Threat.

Even if the Soviets in the 1972
period were to assign their entire
available missile force to attacks on
our strategic forces (reserving only
refire missile and bomber-delivered
weapons for urban targets), more
than one-half of the total forces pro-
grammed last year for 1972 would
still survive and remain effective.

Considering the overall size and
character of that force, it is clear
that our strategic missiles alone could
destroy the Soviet Union as a viable
20th Century society, even after ab-
sorbing a well coordinated, surprise
first attack. Indeed, the detonation of
even one-fifth of the total surviving
weapons over Soviet cities would kill
about 30 percent of the total popula-
tion (73 million people) and destroy
about one-half of the industrial capa-
city. By doubling the number of war-
heads delivered, Soviet fatalities and
industrial capacity destroyed would
be increased by considerably less than
one-third. Beyond this point further
increments of warheads delivered
would not appreciably change the re-
sult, because we would have to bring
smaller and smaller cities under at-
tack, each requiring one delivered
warhead.

Although it is not at all certain
that they will do so, we must, as I
noted earlier, base our force planning
on the assumption that the Soviets
will deploy a reasonably effective
ABM defense around their principal
cities; and we must be prepared to
overwhelm it.

We have been hedging against this
possibility for some time, and last
year we toolc a number of actions of
which the following are the most im-
portant:

Defense Industry Bulletin

Accelerated development of the
Poseidon missile.

Approved production and deploy-
ment of Minuteman III.

a Developed penetration aids for
Minuteman.

Now, in the PY 1968 program we
propose to take a number of addi-
tional actions to enhance the future
capabilities of our Assured Destruc-
tion forces, of which the following are
the more important:

Produce and deploy the Poseidon
missile.

Produce and deploy improved
missile penetration aids.

Increase the proportion of Min-
utcman III in the planned force and
provide it with an improved third
stage.

Initiate the development of new
reentry vehicles, specifically designed
for use against targets heavily de-
fended with ABM's.

I will discuss each of these actions
in greater detail later in connection
with our other proposals for the stra-
tegic forces. But for now, let me point
out that the net effect of these actions
would be to increase greatly the over-
all effectiveness of our Assured De-
struction force against the Soviet
Union by mid-1972. Even if the Mos-
cow-type ABM defense were deployed
at other cities as well, the proposed
U.S. missile force alone could inflict
about 3G percent (86 million) fatali-
ties on the Soviet Union in 1972
after absorbing a surprise attack.

As I noted earlier, a relatively
small number of warheads detonated
over fifty cities would destroy half
of Red China's urban population and
more than one-half of her industry,

Thus the strategic missile forces
proposed for the FY 1968-72 period
would, by themselves, give us an As-
sured Destruction capability against
both the Soviet Union and Red China,
simultaneously.

Capability Against "Higlier-Tlmn-
Expccted Threats."

As I indicated last year, our As-
sured Destruction capability is of
such crucial importance to our secur-
ity that wo must be prepared to cope
with Soviet strategic threats which
are greater than those projected- in
the latest intelligence estimates.

The most severe threat we must
consider in planning our Assured De-
struction forces is an extensive, effec-
tive Soviet ABM deployment com-

bined with a deployment of a
substantial ICBM force with a hard-
target kill capability. Such a Soviet
offensive force might pose a threat
to our Minuteman missiles. An exten-
sive, effective Soviet ABM system
might then be able to intercept and
destroy a significant portion of our
residual missile warhead a, including
those carried by submarine-launched
missiles. (The Soviet offensive and
defensive threats assumed horc are
both substantially higher than ex-
pected.)

To hedge against the possibility of
such a threat to our land-based mis-
sile forces, we have authorized the de-
velopment and production of the
Poseidon. Should still additional of-
fensive power be required, and such a
requirement is not now clear, we are
considering the development and de-
ployment of a new Advanced ICBM,
designed to reduce vulnerability to
such a Soviet threat. The deployment
of the Nike-X as a defense for our
Minuteman force would offer a par-
tial substitute for tile possible further
expansion of our offensive forces,

But again I want to emphasize that
wo don't know whether the Soviet
Union will develop and deploy the
kind of forces assumed hero. Even
against this highor-than- expected
throat, and even without n Nili-X
defense of Minuteman, our proposed
strategic missile and bomber forces
could still inflict dO percent or morn
fatalities on the Soviet population
throughout the time period involved.

More extreme throats tiro highly
unlikely. In any event, the changes
we are now proposing in our strate-
gic offensive forces would make it
dangerous and expensive for the So-
viet Union to movo in tho direction
of more extreme threats to our As-
sured Destruction capability. If wo
assume, as I believe we should, that
the Soviets would want to reduce tho
vulnerability of their own offensive
forces against the possibility of a
first strike by our very accurate
forces in the FY 1072-78 period, they
must further disperse and harden
their strategic missiles, which is cx~
nctly what they appear to be doing
now. To do so is expensive and for
the same budget outlay results in re-
duced missile paylonds. Not to do so
would leave the Soviet force highly
vulnerable. Thus wo can, in planning
our forces, foreclose any seemingly
"easy" and "cheap" paths to their

*;;. ,.:):' lit of a statisfaetory As-
i :--: [i-. ; !ructi'>n capability and a
i!:'.f,-.":"ry I'^iiisagt 1 Limiting capu-

>; . at \!'.<- .-litiu- lini'?.

\\'-. --,! c.j'jr-'?, cannot preclude the
ill?.;. u::i'. th? .Soviet Union may

r, ,,->- it- .-.tr.-it.-pir forces budget at
; ,- ti,-i;i' in thi 1 future. That is why
> I'.r- n.j-.v uiiiJcrtaking a very com-
..Kr>'h" .-tudy nf a new strategic
:--;;.' y,-.'.t'm. And that is why we
- r.i.t jir-duiiini? the possible future
r. -;rj' n iii'!i of iiev; Poseidon subma-
- * r tho d'"-fH}?>> of our presently
,''-.;,. -i Mir.ut'-man silos with Nike-

V/fii!-' 1 l-diiiv* we should place
r -lv.-.- in a iH!.-itioii to move for-
f'l r>rornj'i!y on all of those options
ht>'-r that should become necessary,

!<'<] not rommit ourselves to them

Capabilities of the Proposed
Forces for Damage Limitation

TV- principal issue in this area of
th -Str;it<'gic Forces Program con-
o-rn.-i the .if.ployment of an ABM de-
fwvM* Kjvtrn, i.e., Nike-X. There are
thit;- ^(jtuewJmt overlapping but dis-
tuift major nurposes for which we
nii^hi want to deploy such a system at
this time:

To protect our cities (and their
Wuhtinn and industry) against a
Souvt missile attack.

^ To protect our cities against a
&<! Cliinew missile attack in the
tnid-lIhO's.

To hf-lp protect our land-based
.nratPBic offensive forces (i.e., Min-
tt-iiiaii) against a Soviet missile at-
rark.

After -studying the subject exhaus-
, nn(! aft(;r hearing the views
of ur princij,al military and civilian
ativisoM, we concluded that we should
not initiate an ABM deployment at

wiVT *% an> ' f these Ilur P ses -
weholieve that:

' The Soviet Union would be
f'>r ( | to react to n U.S. ABM de-
Ploymmt by increasing its offensive
nucl,ar fo e 8t j,, further ^ M

-ult -hat the risk of a Soviet nJ
^far attack on the United States
W not be further decreased ; and

such an attack can be prevented if it
is understood by the Soviets that we
possess strategic nuclear forces so
powerful as to be capable of absorb-
ing a Soviet first strike and surviving
with sufficient strength to impose
unacceptable damage on them. We
have such power today. We must
maintain it in the future, adjusting
our forces to offset actual or potential
changes in theirs.

There is nothing we have seen in
either our own or the Soviet Union's
technology which would lead us to
believe we cannot do this. From the
beginning of the Nike-Zeus project
in 1955 through the end of this cur-
rent fiscal year, we will have invested
a total of about $4 billion on ballistic
missile defense research including
Nike-Zeus, Nike-X and Project De-
fender. And, during the last five or
six years, we have spent about $1.2
billion on the development of penetra-
tion aids to help ensure that our mis-
siles could penetrate the enemy's de-
fenses. As a result of these efforts,
we have the technology already in
hand to counter any offensive or de-
fensive force changes the Soviet
Union might'undertake in the forsee-
able future.

We believe the Soviet Union has es-
sentially the same -requirement for a
deterrent or Assured Destruction
force as the United States. Therefore,
deployment by the United States of
an ABM defense which would degrade
the destruction capability of the So-
viet's offensive force to an unaccept-
able level would lead to expansion of
that force. This would leave us no
better off than we were before.

With respect to protection of tho
United States against a possible Red
Chinese nuclear attack, the lead time
required for China to develop a sig-
If cant I?BH force is great er than
that required for deployment of our
defense-therefore the Chinese throat
m itself would not dictate the produc-
^^ABM sy stem at this time.

"on of our land-based ^traSc
offensive forces against the k tad I of

ta^*-fc attaci:
e able 1

Assured Destruction, tho third major
purpose for which wo mny wiml to
deploy an ABM dnfcmso (i.e., the; pro-
tection of Minuteman). Now, 7 woutii
like to discuss the other two

Deployment of Nilcc-X for Ocfenw f
Our Cities AgnhiHl a Siiviel Atfjick,

What is involved here IK an analy-
sis of tho contribution tlm Nik<< -X
system might make to Uio lU'friuw of
our cities under two aji.sunijitLoiiti:

That tho SoviotH do not iraH tit
such a deployment.

That tins Soviets do rent; I In i\\\
attempt to prenorvo thdr "Amunvil
Destruction" capability.

As you know, tin- major oh-merit^
of tlio Nikn-X HVKtoin are bflii^ de-
veloped in mich a wuy an to |)cnnU a
variety of deployments; Iwn lmv<*
been selected for tlm purpmu'H of thin
analysis. Tho first, which I will i-itll
"Posture A," rep rose; ntM a li^ht If. S.
defense affniiiflt a Soviet nubile at-
tack on our citie.H. H COMMHU of un
area defense of the entire cmiUm-ninl
United States, providing rrilundmiL
(overlapping) tiovovnK" of kny tnrcct
areas; and, in nddtUnn, a rchitivrly ,
low-don.sity Sprint doroiiMo of n IIUIH- '
bor of the lurgost cltlow tit pim-lifc
some ]>rotectlon affniimt tlmtio \vur-
honds which jrot through llm nn-n
defenao. Thn mtcoiul duploynn'iit,
which I call "Posturo II," in n hriivif-r
doronsn agiiinHt a Soviet iiliiii'h. With
tho (mint! nrnn eovenuvo, it provJdi'H n
hifflior-doiiHlty Sprint diifanm* fn-
twice the nuinbor of citiew.

Shown on the Flfrurn I am tlio pom-
ponontH and the contH (which, if pn-.t
experience JH any ff uldc, may 1m ninli<r.
stated by fiO to 100 pniwnt for llio
ayfitomfl as a whole)" of Ponlure A [uhl -

PosUH'O B. *a

"Even before tlio syalnma bt'eamr
oparafumal, preaaHrcH would mnnnt
for tlunr expansion at n tnat nf utiH
additional biUiom. Thr. UHHratrrtctt
or relatively unprotected, arena n/ th*
United Statea would claim (hat flu-ir
} j x rf? Wcr < ! beinff diverted, [n ;nv-
tect New York and Wanking'tun \vltflf.
"ley were left naked. And
"""'''' ' 'U that mt-.

threat (the,

a mttfh

; , *? * nme

be applied to our

attack. Wo

' f] .
deployed with the

too Uni tof

expenditure on tho order
bilhon over a 10-yew

February

The Multi-function Array Radar
(MAR) is a very powerful phased-
array radar which can perform all the
defense functions involved in engag-
ing a large, sophisticated attack: cen-
tral control and battle management,
long-range search, acquisition of the
target, discrimination of warheads
from decoys or "spoofing" devices,
precision tracking of the target, and
control of the defense interceptor mis-
siles.

The TACMAR Radar is a scaled
down, slightly less complex and less
powerful version of the MAR, which
can perform all the basic defense func-
tions in a smaller, less sophisticated
attack.

The Perimeter Acquisition Radar
(PAR) is a phased-array radar re-
quired for the very long-range search
and acquisition functions involved in
area defense. To achieve the full
potential of the extended range Spar-
tan, the target must be picked up at
much greater distances in order to
compute its trajectory before the
Spartan is fired.

The Missile Site Radar (MSR) is a
much smaller, phased-array radar
needed to control the Sprint and Spar-
tan interceptor missiles during an en-
gagement. It can also perform the
functions of the TACMAR but on a
considerably reduced scale. Actually, a
number of different sizes are being
studied. This "modular" approach will
permit us to tailor the capacity of the
radar to the particular needs of each
defended area.

The Spartan is a three-stage missile
with a nuclear warhead capable of in-
tercepting incoming objects at rela-
tively long range above the atmos-
phere.

The Sprint is a shorter range, high-
acceleration interceptor missile de-
signed to make intercepts at lower
altitudes.

The technical principles involved in
the radars are now fairly well estab-
lished. One research and development
MAR-type has been constructed at the
White Sands Missile Range. A con-
tract has been let for the power
plant of a second MAR-type radar,
which is to be constructed on Kwaja-
lein Atoll. The Missile Site Radar is
well along- in development and the
construction of one of these radars
on Kwajalein Atoll has also begun.

Testing of the Sprint missile was
started at White Sands in November
1965 and the tempo of testing will
steadily " increase during the current
year. The Spartan is still on the draw-
ing boards. It represents a very sub-
stantial redesign of the original Zeus
and we. will not know until it is flight
tested how well it will perform.

Facilities for testing both the Sprint
and the Spartan will bo constructed
on Kwajalein Atoll. These, together
with the TACMAR and MSR and
the proprnms for the computers, will
give us all of the major elements of
the Nike-X system which are essential
to test its overall performance against
reentry vehicles fired from Vandcn-
berg AFB, Calif. (We feel we know
enough aboiit the PAR technology to

POSTURE A

POSTURE B

Invest. Coat

Invest. Cost

Radars

($ Billion)

MAR

TACMAR

PAR

MSR

Invest. Cost
Missiles

$ 6.5

$12.6

Spartan

Sprint

Invest. Cost

$ 2.4

$ 4.8

DOD Invest. Cost
AEG Invest, Cost

$ 8.9

1.0

$17.4
2.0

Total Invest. Cost
(excluding R&D)

$ 9.9

$19.4

Annual Operating Cost

$ 0.38

$ 0.72

No. of Cities w/Term. Def:

Figure 1

be able to use the mechanically steered
radars already on Kwajalein as simu-
lators.) The system will be tested in
stages, starting with the MSR and
Sprint, then the Spartan missile and
the TACMAR radar. A large number
of test shots will be launched from
the west coast af the United States
to Kwajalein to test the system thor-
oughly as a whole. The most impor-
tant objective of this effort is to de-
termine proper system integration and
computer programming, since the in-
dividual components of the system will
have already been tested.

But even after this elaborate test
program is completed, some technical
uncertainties will still remain unre-
solved; this is to be expected in a
system designed for such a highly
complex mission. Moreover, we have
learned from bitter experience that
even when the development problems
have been solved, a system can run
into trouble in production or when it
is put into operation. All too often the
development prototype cannot be pro-
duced in quantity without extensive
re-engineering. Production delays are
encountered and costs begin, to spiral.
Sometimes these problems are not dis-
covered until the new system actually
enters the inventory and 1ms to
function in an operational environ-
ment. . . .

In this connection, it is worth not-
ing that had wo produced and de-
ployed the Nike-Zeus system proposed
by the Army in 1959 at an estimated
cost of $13 to $14 billion, most of it
would have hud to be torn out and
replaced, almost before it became op-
erational, by the new missilua and
radars of the Nike-X system. My the
same token, other technological de-
velopments in offensive forces over
the next seven years may make
obsolete or drastically degrade the
Nike-X system as presently en-
visioned. We can predict with cer-
tainty that there will be substantial
additional costs for updating any sys-
tem we might consider installing- at
this time ag-ainsfc the Soviet missile
threat.

The deployment of a Nikc-X system
would also require some improvement
in our defense against manned
bomber attack in order to preclude
the Soviets from undercutting the
Nike-X defense; and we would want
to expand and accelerate the fallout
shelter program. The investment cost
(including research and development)

Defense Industry Bulletin

. r' ;'" ;V-;r,fT i-= estimated at nbout

*[ ' -..! i?:M Mtlio-i sitd would provide

f r . -li-.tll f,, r ,Y of F-lll or F-12

,; >ti''t ;:!-- and airborne wam-

v :,-] r,,;;tn-.l aircraft (AWACS).

I,- ^j,.i':,;-i i";iSif' ! Jt shelter program

. ,: i v-.'-t a?/ 'Lit 3>i)Ci million more

;;>,", u\{- is';.' M..' ,iiv now producing.

V. 1 .' .. ;i!<i a!-') ne:il --'Jriif of our anti-

-iihritfin-' Carfare (ASW) forces for

[> .it-.-iiii-t Sf.-.ict ini^ik' .submarines,

! :t ' ar.- :i--.? \vt elt'itr whether these

ASV,' f,.n -. '.v-Mjlfi actually have to be

ir,;r<',L-.--( v-n-r '.he currently planned

: v< :-. In any cvont, tho "cuiTent"

s ;:!j-;i%-s uf th! 1 investmc'.Lt cost of

tl<>< t.>t;i] Iiair.iiffe Limiting package

".iiM amount to at least $12,2 bit-

li.'r; f-.r I'V.-tun:: A and at least $21,7

l'ii:i -r, f.;r F"'.iture fi.

Tc tpst th'> contribution that each
=.-f the.it: N'ik'?-X deployments might
rrjiko to uur IX'iruage Limiting objec-
ii-.o,-:, \ve have projected both the U.S.
ami Sr-.vict strati-'gic nuclear forces
ta^siirnitig no ivaction by the Soviets
t<> th'f r.S. AUM deployment) to the
time v.-ht-n Pomire It, the header de-
faw, could be fully in place.

Tiv fiitalities which these Soviet
f-:Ti',\* could inflict upon the United
.Si.it.-.-; (with and without a U.S. ABM
<!i-fen,-v) and the fatalities which the
'.'. K. forces could inflict on the Soviet
I'nion ('with n Soviet ABM defense)
aiv .%v,vn in the Figure 2.

Tho firrit rase, ".Soviets Strike First,
I'. S. Retaliates," is the threat against
v.-nK-b our strategic forces must be
(!(>< igned. The second case, "U.S.
Strike First, Soviets Retaliate," is
th-' case that would determine the size
anil character of the Soviet reaction to
changes m our strategic forces, if
they wish, as they clearly do, to main-
tain an Assured Destruction capa-
bility against us.

These calculations indicate that
without N'ike-X and the other Damage
I-imilinK programs discussed earlier
t.i. fatalities from a Soviet first
Rtnkc could total about 120 million-
" after absorbing that attack, we

Billion fatalities. Assuming
" do not "act to our deploy-
" ABM defense against
!S a "lost unrealistic
'. Posture A might

an
ture B to about 30 million,

Although the fatality estimate,
r both tbe Soviet Union

(he United States reflect some varia-
tions in the performance of their re-
spective ABM systems, they are still
based on the assumption that these
systems will work at relatively high
levels of effectiveness. If these ABM
systems tlo not perform as well as our
technical people postulate, fatalities
on both sides could be considerably
higher than shown in Figure 2,
or the costs would be considerably
higher if major improvements or ad-
ditions had to be made in the systems
to bring them up to tlie postulated
level of performance.

If the Soviets are determined to
maintain an Assured Destruction
capability against us and they believe
that our deployment of an ABM de-
fense would reduce our fatalities in
the "U.S. Strikes First, Soviets Re-
taliate" case to the levels shown in
Figure 2, they would have no alter-
native but to increase the second
strike damage potential of their offen-
sive forces. They could do so. in
several different ways. Shown in the
table below are the relative costs to
the Soviet Union of responding to a
U.S. ABM deployment in one of these
possible ways:

Level of U.S.

Fatalities Which

Soviets Believe

Will Provide

Deterrence 11

(Millions)

Cost to the Soviets
of Offsetting
U.S. Cost to
Deploy an ABM

$1 Soviet cost to
$4 U.S. cost

$1 Soviet cost to
2 U.S. cost

$1 Soviet cost to
$1 U,S, cost

U. S. fatalities if United States
fc first and Soviets retaliate

60.
90.

If the Soviets chose to respond hi
that way to our ARM deployment,
the results would be as shown hi Fig-
ure 8,

In short, the Sovinta have it within
their technical ami economic capacity
to offset any furthor Damage Uiiiit-
ing measures we mijrlit iindcrlAfcc,
provided they arcs determined to
maintain their deterrent aKiiinnt iia.
It is the virtual certainly Unit the
Soviets will act to mtimUlri lliolr
deterrent which cants suck fjrtivci
doubts on the advisability of our
deploying tlic Niku-X syHlcni Cor Hie
protection of our cilie.s nKiiinwt Hie
kind of heavy, HopIiUtlcnlwl mfwiilc
attack they could launch hi (he 1070'*.
In all probability, nil we would nc-
compliHh would be to incrciiHi- Rrcutly
both their defense expenditures mul
ours without any gain in rcnl wcurltjr
to either aide.

Defense Against tho Hod CliliiFNp
Nuclear Threat.

With regard to the Hcd Cliinose
nuclear threat, an austere AHM de-
fense might off or u hitfh dtw (if
protection to the nation nKtihiNL a
missile attack, at leant through tlio '
1970'a. The total investment coat of
uch n program might amount to $;i.fi
billion, including Uio cst of tho
nnchmr warheads.

Tho effectiveness of this dcsploymont
in reducing U. S. fntnlllloH from n
Kcd Chinese attack in the li)70'u Is
shown in tho table bolow:

Chinese Strike Kim I
(Operational Inventory)

U.S. Fatalities X MisHilcH 3X
(in millions)

Without ADM 5 10

With ABM 0-|- l

U.S. Programs

Approved

Posture A

Posture B

'Fatality figures s

they do not include

No. Strate9ic xcan9 " m

NO SOVIET REACTION TO U.S. ABM DEPLOYMENT)

S PIrst ' tLS ' Stl ' ikcH Plrt.

Soviets UctnMnlc'
gtpat _

? 120 + 100 70

f 120+ 30 70

12t> " f " 20 70

n2S7f fc ^ lcntl i s from blast *
sultm ff from flro atoaTna, disease, and

ion of everyday life.

irfl in flli'r. i_1_l i ,

ssysss to sraa11

-SiK'^S^^S-^'>e s b

' i-

Figure 2

Februory T967

This austere defense could probably
preclude damage in the 1970's almost
entirely. As the Chinese force grows
to the level it might achieve by 1980-
85, additions and improvements might
be required, but relatively modest
additional outlays could probably limit
the Chinese damage potential to low
levels well beyond 1986,

It is not clear that we need an ABM
defense against China. In any event,
the lead time for deployment of a
significant Chinese offensive force is
longer than that required for U.S.
ABM deployment; therefore, the de-
cision for the latter need not be made
now.

In the light of the foregoing anal-
ysis, we propose:

To pursue with uncliminished
vigor the development, test and
evaluation of the Nike-X system (for
which purpose a total of about $440
million has been included in the PY
1968 Budget), but to take no action
now to deploy the system,

To initiate negotiations with the
Soviet Union designed, through for-
mal or informal agreement, to limit
the deployment of ABM systems.

To reconsider the deployment de-
cision in the event those discussions
prove unsuccessful; aproxhnately $37B
million has been included in the FY
1968 Budget to provide for such
actions as may be required at that
time, e.g., the production of Nike-X
for the defense of our offensive
weapon systems.

I would now like to turn to our spe-
cific proposals for the Strategic
Forces in the FY 1968-72 period.

Strategic Offensive Forces

The force structure proposed for
the FY 1968-72 period is shown in
the classified table furnished to the
Committee.

Missile Forces,

Last year I told this Committee
that:

"The U.S. response to a Soviet
deployment of an ABM defense
would be the incorporation of
appropriate penetration aids in
our strategic missiles. Against
area defense interceptors, pene-
tration aids can be provided for
U.S. missiles (so that an Assured
Destruction capability is main-
tained) at a cost to us of less
than 10 percent of the cost of an
ABM defense to the Soviets. The
lead time for the Soviets to mount
an ABM defense is greater than
the time for us to produce and
deploy penetration aids, provided
we take timely action to develop
them and can move forward
promptly to produce them, and
this we are doing. The decision
actually to deploy new penetra-
tion aids can be made later this
year. If the Soviets did attempt
a large ABM defense we would
still be able to produce and
install the necessary penetration
aids before the Soviets could
achieve an extensive deployment.
". . . against a combined Soviet
expanded strategic missile/ABM
threat, the most efficient alterna-
tive available to us would be to
develop Poseidon (with the new
penetration aids) and retrofit it
into Polaris boats. To hedge
against the possibility of such a
threat, we now propose to accel-
erate the development of the
Poseidon missile (which was
initiated last year). The timing of
a decision to produce and deploy
the missile would depend upon
how this threat actually evolved."

This is essentially the program we

now propose to pursue.

Number of Fatalities in an All-Out Strategic Exchange (in millions)
(ASSUMES SOVIET REACTION TO U.S. ABM DEPLOYMENT)

Soviets Strike First,

U.S. Retaliates

U.S. Programs U.S. Fat. Sov. Fat.
Approved 120 120+

(no response)

Posture A 120 120+

PoBture B 120 120+

U.S. Strikes First,

Soviets Retaliate

U.S. Fat. Sov. Fat.

100 70

90
90

70
70

Figure 3

Minuteman. Last year we had
planned a Minuteman force which
would ultimately have consisted of a
mix of 1,000 Minuteman IPs and
Minuteman Ill's, with all the Minute-
man Ps phased out. Now, in order to
increase the capability of this force
against a possible strong Soviet ABM
defense, we propose to increase the
proportion of Minuteman Ill's in the
force and equip them with a new im-
proved third stage which will increase
the payload of each missile. This in-
creased payload will enable the
Minuteman III to carry more penetra-
tion aids to counter an ABM defense.
The total cost of this program is esti-
mated at $400 million, but it will cost
the Soviet Union many times more in
ABM defenses if they try to offset it.

We also propose to step up the
schedule for re-equipping the Minute-
man IPs with an improved reentry
vehicle and to procure penetration
aid packages for all Minuteman II and
Til missiles. Engineering development
was started on these penetration aid
packages last year. The total cost of
this program is estimated at $31R
million, of which $100 million was
provided through FY 1967, $125 mil-
lion is required in FY 1968, and an-
other $90 million in subsequent years.

Eventually, it will probably be-
come necessary to replace the earliest
Minuteman II missiles because of
their age. At that time we could odd
more Minutoman Ill's if that should
appear desirable. Meanwhile, I ba-
lieve we should initiate the develop-
ment of a new improved reentry
vehicle for the Minuteman III, and
funds for this purpose have been in-
cluded in the budget request.

Polaris-Poseidon. By the end of the
current fiscal year, 30 of the planned
41-ship Polaris force will have be-
come operational. The last two Polaris
submarines will be deployed by
September 1967, , , ,

I also believe it would be prudent at
this time to commit the Poseidon mis-
sile to production and deployment. , . .
In order to hold a minimum the num-
ber of submarines which would have
to be withdrawn from the operational
fleet, we propose to spread the
Poseidon retrofit program over a
period of years on a schedule tied to
the regular overhaul cycle,

, . . The total incremental coat of
developing Poseidon, and producing:

Defense Industry Bulletin

and deploying the proposed force In

estimated at $3.8 billion. A total of
about $900 million in included in the
FY 1868 Budget for Poseidon. (Tim
decision to deploy Poseidon will pro-
duce an offsetting Having of about
$200 million in the Polaris program,)
Funds have also been included In
the budget for the development of cer-
tain desired improvements for HID
Polaris missile.

Titan II. Tim Titan II force, con-
sisting of 54 missiles deployed in hard
silos, presently makes a unique con-
tribution to our strategic oll'i'imive
capabilities, . , , However, with the.
deployment of Minuteman III and,
latei-, of the Poseidon, this capability
of the Titan II will no longer lie
unique. The Minuteman HI from the,
continental United States and Hie
Poseidon from forward undersea Iwii-
tions will be able to reach all the Im-
portant targets in the Hoviet Union,

. . . Accordingly, we now propom-
to end procurement of new Titan
boosters for testing and operational
reliability demonstration with (he KV
1060 buy, and, instead, nun hnmnVni
already in the Inventory for them*
purposes in the future. Willi almul
six follow-on tests per year, tin- fm-ce
of M TITAN missiles Iminchen,
can he maintained for a number i.f
yours.

New Strategic MlftHllc
Although we believe the
missile programs now proposed will
bfi adequate to meet the threat, oven
if the Soviet Union were to carry mil
H full scale deployment of an A MM
system and d ( . V elop more Directive
ICBM'H, we are malting a very com-
prehensive study of a new long-range-
missile nystem, To shorten the Ira.l
time on nny option selected us a mm 1 1
of this study, we have IncUidoil fundu
In the I-T 1008 Dudget for contract
definition should mich a d-clslon be-
come warranted.

Strategic Bomber Poteen.

will be phased out as

Since the now FB-lU'a with tb
SHAM air-to-surface mlsalla will IM

entering the bomber force during I-'V
l.i)(i!) 71 anil tin- H MC/H'ii i-rin !
nun'ntained in u unit able n|ieniliniinl
condition well into the HlVd'n, itn-iv
iii no pressing need to decide "ii ltn<
|)l'0tlll<:tioii and deployment of ;i in'w
bomber in Hie I'V IIH1H Ilinle,. t,
('learly, the flnit order nf Uh.iin^i! in
the ntralenic olVennive I'nn-e:; pr.ini'ani
at thin time In Urn provinjim of
penetration niiln and other improve
nientii for our presently plnnm-il
strategic mk'iile t'.tnv, ami (b* jno
iliicliim and lieplnymenl nf the tn-\v
1'oseidon. . , , Nevei'llielej.^, \M> jilnii
to continue worl; nn (In- i-nclii.-,

utinlien, for which u total nf ;!i; mil
lion i.H prof'ninuni'd fur I-'V Ulii.'i,

I.a;il. year I .-.ni.l [)utt we phmur'.i
to keep the Ilnuiid Mnj; iiiir.^it.-L m Ui<'
opi'i'iiliumil inventory llir..ti f ;b I-'V
l!)70, |ihiitiiiiK Hieir iMimb.-r <l..v.n m
filep with (he jilmtie nut nf |h>- II ,V.:i '
1' it. We now prnpo.-ii' to ]ilin-ii> mil |!u'
nlder Hnillul ling "A" | ( y ,, tu j |,'y jii,;;]

n'lniiilnir uiily Ih, "It" ' mM >. , , , ' ,,.,!,",'',!] 'Tl!!'"' ^\

The SHAM prnfinim U iin,-biui, : ,',| j',,.,1 v ,.. a
O"'" that which I JIIVM-IM..,! |,,, ; t ' ' (

year. While we Mill ,lo u,.| ,,| l(lt , A " > " U ''"""'' '"' 1 h ''^" !

( My H1MM .m lit.- II w; us,, v... '"" <l ""'" ! ' ll '" i '' v '' [i "'"""'

ill 1 ' 1 nuiUiinin}; the i|v,'l,i[.nn'iil .>!'' (li- ^ in 1 " lt '' > v " l > "^ .">K-nii:it.t;
ni'fciciary avlnnii'ii In |i, T i n it . ;( |.-|t i( '." ''" "'""' I ' i! *' 1 "'i'-"'

:\nil ih.- n-Hi.ustiUK HUH;

itupt-HV.'.i Aiiii in AIM r;

Uul mi. I inf.-K-.lti-. .-;!, -.--, u 11hl i
UH fllY.'iu., Aii-Jt-.it..- Wm

Stratoglc Dofonsivo Forcoi

lrnt<'Klc d.-f.-nnive f.nvri n,,,
f (l ,' tin, l-'V limn VI! ju<Hm!
m the

Ill

.f lit

Hit I'

l' dm Con.niitt,.,.. The CU-II fltt|< " "
Proitn.ni f,,r KY j{in)i j rt "'"' r ; l( "'K

f,,r.'
AVV

III

t>(
Ar:S

"howii

Hurvelllanco, \VarnlnK mu! C

TliH |>n>Krati)H H)IMWII un.h-r Hil,
(1 "'K urc, with twn exn-pH,,,,,, tt M -
'">>" OH limn* I im-m-nled ( Hht y ,.., r
Aflllvntlnn ,,f ]m!( ; m , 4(M , n( |
ti-8 will H lip Ko.n.whal from tl,

Tim
*'V-r,

S, \V

in ArmlnK ..,, tho
of Uio proRi-ftm. Tim iiHtty will
up by Urn U-m,,orry (
on of two of thn rtUlC ]|
and la O f Urn mnmml

(hrr^

[,,

f')K

1967

avionics, We hope that by the end of
this year sufficient data will be avail-
able to demonstrate the feasibility of
the AWACS. Only then will we he in
a position to make a decision on the
interceptor force. Accordingly, we
propose to continue development work
on both the F-12 and the F-lll types
of interceptors and on the fire control
and missile systems, and $20 million
is included in the FY 1968 Budget
for this purpose, Although no addi-
tional funds are requested for work
on the AWACS airframe, another
$10 million is included in the FY
1968 Budget to continue work on
overland radar technology,

Surfacc-to-Air Missiles

The Nike Hercules and Hawk mis-
sile forces are the same as planned a
year ago except that we now intend
to replace eventually some of the
present Hawk missiles with the new
Improved Hawk which is now in
development.

In addition to the Improved Hawk,
which is designed primarily for the
field forces, we also have in advanced
development a new surface-to-air mis-
sile called the SAM-D. While this
system is also primarily oriented
toward air defense of the field forces,
it also has a potential application for
continental air defense. This effort,
thus far, has hecn directed mainly to
development of the required com-
ponents or "building blocks" and a
deployment decision at this time
would he premature. Additional funds
have been included in the FY 1968
Budget to continue development.

Ballistic Missile Warning.

The numbers of Ballistic Missile
Early Warning Systems (BMEWS)
and Ovor-the-Horizon ( OTH) radar
sites are the same as shown last
year. . , .

We are also continuing work on
"back scatter" Over-the-Horizon
radars. . . .

An interim capability to detect sea
launched ballistic missiles (SLBM's)
is being phased in during FY 1968.
The SLBM detection system will in-
clude modified SAGE and SPACE-
TKACK radars.

Anti-Satellite Defense.

As described in previous years, we
have a capability to intercept and
destroy hostile satellites within
certain ranges. This capability will
be maintained through FY 1968.

Civil Defense

The Civil Defense program pro-
posed for FY 1968 is essentially the
same in content and objectives as
that approved for the current year.

The funds requested would carry

forward the Civil Defense program
at about the same level as the cur-
rent fiscal year. A financial summary
of the program, estimated to cost
$111 million in FY 1968, appears in
Figure 4.

Financial Summary

The Strategic Forces programs I
have outlined will require Total Ob-
ligational Authority of $8.1 billion in
FY 1968. A comparison with prior
years is shown below:

FINANCIAL SUMMARY OF CIVIL DEFENSE

(TOA*, in $ Millions)
(Fiscal Years)

Shelter Survey
Shelter Improvement
Shelter Development

Marking & Stocking
Shelter Use
Warning

Command, Control &
Communications

Emergency Operations

Support

Financial Assistance
Information Activities
Management
Research Development
Training & Education

TOTALS**

Identified
Marked
Stocked

1962

68.4

.3
90.3

1963
9.3

1.4

32.7

6.8 4.1
22.9" 3.1

16.8

18.9

3.9

12.4

19.0

2.6

10.1
27.5

3.4
13.6
11.0

9.2

252.3 125.4

1964

7.1

1.7
24.2

6.5

6.7
23.7

2.0

13.9

10.0

12.9

110.C

1905
10.6
1.4
3.6
2.3
4.5
2.7

1066

17.7

.5'

5.1

1.1

2.7

8.4 11.6

6.0
25.6

1.4

14.3

10.0

10.7

101.5

6.6
23.9

1.7
12.0
10.0
11.6

1967

18.4

5.0

1.5
2,3

3.9

6,5
27.0

2.3
12.6
10.0
11.7

1968

18.0

3.7'

4.8

3.8

9.7
30.0

2.5
13.2
10.0
11.6

105,1 102.1 111.0

SHELTER SPACES"
(Millions, Cumulative)

103.7 121.4 135.6

42.8 63.8 7G.9

9.7 23.8 33.8

152.1
85.3

41.3

162.0 170.0

97.0 112.0
49,0 56.0

" Includes $2,3 million carryover from OCDM for construction of a Re-
gional Center; $13.4 million returned to Treasury not used by GSA in
Federal building construction.

b Includes Packaged Ventilation Kits.

Includes Architect and Engineer advisory services on design techniques.

11 Shelter spaces resulting from the currently approved program; FY 63-66
are actual, FY 67-68 are estimated.

Only public shelters having 50 or more space are eligible for marking
and stocking,
Total Obligational Authority.

**Totals may not add due to rounding.

Figure 4

1962

1963

1964

1965

1966

1967

1968

Act.

Eat.

Prop.

Strategic Forces

11.2

10.6

9.8

7.1

6.8

7.1

8.1

Defense Industry Bulletin

Tlu> On.rral Purpose Forces in-
cluilo most of the Army's combat and
i:umb:U support units, virtually all
Nitvy units (except for the Polaris
forces), all Marine Corps units, and
tlu? tactical units of the Air Force.
Tlu-jifi nrt? UK: forcns upon which we
rely for all military actions short of
tfenoral nuclear war, i.e., limited war
ami countei'in.surgency operations.

Requirements for General
Purpose Forces

Over the last few years I have pre-
sented to the Committee in consider-
able detail our analysis of the
limited war problem and our require-
ments for General Purpose Forces.
I have pointed out that our strategic
nudear capability is designed to deter
attack at hut one end of the spectrum
of aggression and that we must,
therefore, have other forms of mili-
tary power, both to deter lesser
aggressions and to defeat .them if
deterrence fails. We need these other
forms of military power, not so much
for the defense of our own territory
as for the support of our commit-
ments to other nations under the
.various collective defense arrange-
ments we have entered into since the
end of World War II. These include
the Rio Pact in the Western Hemi-
sphere, NATO in Europe, SEATO
and ANZUS in the Far East, and
the bilateral mutual defense agree-
ments with Korea, Japan, the Re-
public of China and the Philippines.
All of these mutual defense treaty
commitments, involving a total of
some 40-odd sovereign nations, stem
from the great policy decision, made
at the end of the Second World War,
to base our security on the collective
defense of the Free World. . , .

In fact even without these treaty
obligations, I suspect that our coun-
try's action would not have differed
significantly in the more than two
decades which have elapsed since the
end of World War II. ... We must
remember that we twice came to the
assistance of our friends in Western
Europe without any prior treaty
commitments; we did so because we
deemed it vita! to our own security.
We came to the assistance of South

Korea and we are now assisting
South Vietnamfor the same reason.
So it is not the treaties themselves
that cause our greater involvement
in the affairs of the rest of the world,
but rather what we deem to be our
own vital national security interests
over the longer run. . . .

While the distinction, between Gen-
eral Nuclear War Forces and Limited
War Forces is somewhat arbitrary
in that all of our forces would be
employed in a general war, and cer-
tain elements of our strategic forces
in a limited war (e.g., the B-52's
against the Viet Cong forces in
Vietnam), it is primarily the limited
war mission which shapes the size
and character of the General Purpose
Forces. Because we cannot predict in
detail the actual contingencies we
may have to face, we must build
into our forces a capability to deal
with a very wide range of situations.
This accounts for the great diversi-
fication in the kinds of units, capa-
bilities, weapons, equipment, supplies
and training which must be provided
and seriously complicates the task
of determining specific requirements.
Nevertheless, our continuing study
of these requirements has reaffirmed
my conclusion that the General Pur-
pose Forces which I presented here a
year ago are about the right order
of magnitude. This conclusion takes
into account the contributions to
collective defense which our allies
can be expected to make, as well as
our own going capability to concen-
trate our military power rapidly in a
distant threatened area. . . .

Although our General Purpose
Forces are primarily designed for
non-nuclear warfare, we do not pre-
clude the use of nuclear weapons
oven in limited wars. However, as I
have pointed out in previous years,
the employment of such weapons in
a limited war would not necessarily
be to our advantage in every case,
and it would present some extremely
difficult and complex problems. . . .

A careful review of our General
Purpose Force requirements, includ-
ing the temporary augmentations for
Southeast Asia, indicates a need in
FY 1968 for a total land force of
about 31 Mi division force equivalents.
By "division force" I mean the divi-

sion itself, plus all of its supporting
forces, . . . The Army will have W%
active division equivalents; and the
Marine Corps, four. . , .

With regard to tactical airpowcr
wo now have a total of about 4,800
fighter, attack and reconnaissance
aircraft which constitute the unit
equipment of the combat squadrons
of both the active and reserve forces
of the Air Force, Navy and Marine
Corps. . . .

The non-aviation naval forces me
more difficult to summarize in thin
manner and I will discuss them in
detail later in the context with the
Navy General Purpose Forces,

As I have pointed out on mmicrmus
occasions in the past, it is not enough
that our forces be of the right sine
and composition; they must also bvt
provided with the weapons, equip-
ment, ammunition and supplies
needed to sustain thorn in combat.
And, since most combat operation*!
will usually involve all the ServicoH,
the logistics, objectives, which pre-
scribe in broad terms the equipping
and stockage standards to he fol-
lowed, must be aa uniform as possllih*
throughout the Department. These
objectives, together with the forces
to be supported and our contingency
deployment plans, determine the con-
tent (and costs) of the annual pro-
curement programs.

Of course, the specific procurement
programs to achieve these logistic
objectives must realistically tola;
account of the state of the production
base, especially for ammunition, The
purpose of our war reserve Inven-
tories is to provide our forces with
sufficient supplies to conduct HUH-
tained combat until production cun
be raised sufficiently to offset comlml
consumption. In peacetime, therefore,
when production rates arc tailored
to low levels of consumption mid
attrition, it is important to have
large stocks on hand, equal or nearly
equal to the calculated war reserve
objectives. However, once our forces
have been committed to combat and
production has been built up to ofFnet
current consumption, as is now the
case in the current conflict, it is not
necessary (indeed, it would he im-
prudent) to rebuild those stocks to
their pro-combat inventory levels
before the conflict ends. It is not
necessary because our present ex-
panded production base will bo ablo
to provide for all expected Southeast
Asia consumption as well as any

February 1967

other contingency or contingencies
which might arise. It would be im-
prudent because we know from
experience that when the conflict
ends, we either would have to shut
down the lines abruptly, with all of
the resultant adverse consequences
for our economy, or we would have
to acquire unwanted surpluses,

Accordingly, we have planned our
FY 1967-68 procurement program in
such a way that if the war should
Gtid suddenly, we can taper off pro-
duction gradually, using the excess
production capacity to rebuild our
inventories to the desired pre-combat
levels, At the present production
rates, this could be achieved very
quickly. For items which are not
currently in expanded production for
Southeast: Asian operations, or for
new items just entering the inven-
tory, we will, of course, continue to
procure toward our logistics objec-
tives with the goal of achieving them,
wherever feasible and desirable, with
tho FY 19G8 buy.

Capabilities of the
Programmed Forces

As I noted earlier, our General
Purpose Forces requirements are
derived from analyses of contingen-
cies, including the support of our
allies around the world. Accordingly,
our General Purpose Forces capabili-
ties must be assessed in conjunction
with the capabilities of these allied
forcds, Although wo have consider-
able knowledge of the force plans of
our allies, we cannot be sure how they
will change with the passage of:
time. This creates some uncertainty
about the specific requirements for
U.S. forces in the more distant years
of the five-year programming period,
for which we must make allowances
in our force planning. . . .

Army General Purpose
Forces

Tho Department of Defense for
many years, and under several
Administrations, has been striving
to make the "One Army" concept a
reality as well as a slogan. You may
recall that when I appeared before
the Congressional Committee in
May 1961 in support of President
Kennedy's recommendations on the
realignment of the Army reserve
components, I noted that "they must

be so organized, trained, and equipped
as to permit their rapid integration
into the active Army." Since that
time we have not only been working
on the question of how the reserve
components should be organized but
also on how the reserve and active
Army structures could best be
meshed together. This latter question
requires not only a comprehensive
analysis of the total Army force
requirement but also a very careful
and detailed analysis of which ele-
ments of the total structure should
bo provided in the active forces and
which in the reserve forces.

Fundamental to this type of analy-
sis is the concept of a "division
force," Although the combat division
has long been the most widely used
standard for measuring the strength
of the land forces, it accounts for
only about one-third of the combat
and support units required to sustain
the division in combat over an ex-
tended period of time. ... A "ready"
division without "ready" support ele-
ments would be incapable of combat.
The division force concept ensures
that our planning explicitly recog-
nises this relationship (indeed, inter-
dependence) between the division and
its major support elements, since it
requires us to identify these elements
in detail.

As a first approach to the problem,
we have grouped all of the organised
(TO&E) units of the division force
into thrqe categories:

o The division itself.

The initial support increment
(TSI), i.e., the non-divisional combat
ami combat support units which are
required to support the division in
the initial combat phase.

The sustaining support incre-
ment (SSI), i.e., the additional non-
divisional units including the combat,
combat support, and service support
needed by the division for sustained
combat operations beyond the initial
phase,

By structuring the division force
in this way, we can .see more clearly
the relationship of the divisions them-
selves to tho other Army units shown
on the classified table provided to the
Committee. . . .

In addition, the division force con-
cept helps us to:

Relate standards of unit readi-
ness, manning levels, etc., directly to
the time phased unit deployment
schedules, which underlie our con-
tingency planning.

Detennine more precisely which
units must be provided in the active
forces and which could be provided in
the reserve components.

Tailor forces for particular mis-
sions, operational environments, and
tempos of activity.

Understand better the relation-
ship between support functions (sup-
ply, maintenance, transportation, etc.)
and combat functions (maneuver and
fire power), thereby enabling us
to achieve a better allocation of
resources among them.

* Calculate more precisely the per-
sonnel and materiel requirements of
each unit.

While the concept still needs con-
siderable development before all of
the foregoing advantages can be fully
realized, it has already proved of
significant value in our force plan-
ning. . . .

Army Force Structure.

The integrated active-reserve Army
force structure proposed for the FY
1968-72 period is grouped under
three main headings division and
brigade forces, major supporting
forces, and combat and support
battalions.

Division and Brigade Forces. Be-
cause of the temporary Vietnam
augmentations to the active Army,
the force structure we are proposing
at the end of FY 1968 is the equiva-
lent of 27 Va division forces in the
active and reserve structure combined
(18% active and nine reserve com-
ponents), . . .

You may recall that funds were
included in the FY 1967 Budget to
initiate procurement of long-lead-
time items for the conversion of a
second division to the airmobile con-
figuration, if experience proved this
desirable. The existing airmobile
division, the 1st Cavalry, proved its
worth in Vietnam and I have, there-
fore, tentatively approved the con-
version of an airborne division to an
airmobile configuration. The actual
timing of this action is subject to
the preparation of a detailed conver-
sion plan by the Army and the JCS,
but for planning purposes we have
scheduled it for early FY 1969. . . .

Major Supporting Forces, This
grouping covers the major supporting
forces, most of which represent the
initial or sustaining support for the
division and brigade forces. In FY
1969 (when an airborne division is

Defense Industry Bulletin

converted to airmobile), the Army
will keep ii portion of the airborne
assets to form a now permanent air-
borne brigade, thereby establishing
the brigade total at seven. . . .

Combat and Support Battalions.

. . . We now propose to make a .small
increase in the number of maneuver
battalions. , . .

With respect to artillery battalions,
the demands of the conflict in South-
east Asia together with our continu-
ing study of the peacetime force
requirements have caused us to make
a number of changes in the structure.
First, we now plan to increase the
number of artillery battalions in the
active forces. Second, our experience
in Vietnam has shown that the mix
of separate artillery battalions could
contain more heavy 8" howitzers and
175mm gun battalions. Accordingly,
a significant portion of the increase
in artillery battalions will be of these
types.

The number of engineer combat
battalions in the active forces has
been temporarily increased in order
to meet Southeast Asia needs. . . .

The buildup of aviation units in
the Army will continue through FY
1968. . . .

... We now plan to initiate in FY
1968 a new development program de-
signed to ensure that the Nike-Hercules
can continue to operate effectively in
the 1970's. This new program, together
with the Hawk Improvement Pro-
gram, will provide a hedge against
possible slippage in the development
of the SAM-D which is tentatively
planned as a replacement for both
Hercules and Hawk.

Last year we had tentatively
planned to start procurement of the
Improved Hawk in FY 1968.
However, the project has encountered
some development problems and the
program has slipped. Meanwhile, we
will go ahead with production prep-
arations, using the funds provided in
FY 1967 and those requested in FY
1968 for production engineering and
production prototype missiles,

Three types of operational gun/
Chaparral battalions are being
formed; a fully self-propelled bat-
talion for the armored and mechan-
ized divisions; a modified self-pro-
pelled version (including one towed
gun battery which can be airlifted)
for the infantry division; and an all-

towed version for the airmobile and
airborne divisions. . . .

Army Procurement.

The revised FY 1967 Army pro-
curement program now totals $5,863
million, of which $2,130 million is
included in the Supplemental. The
1968 program totals $5,881 million. . . .

. . , The FY 1967 program now totals
$1,202 million for 2,097 aircraft, of
which $533 million is included in the,
Supplemental request. The FY 19(38
program includes $769 million for
1,479 aircraft. The aircraft to be pro-
cured include the UH-1B/D (Iro-
quois) tactical utility transport heli-
copter, the AH~ 1G (Cobra) armed
helicopter, the CH-47 (Chinook)
transport helicopter, the OH-6A ob-
servation helicopter, the CH-54A
heavy lift helicopter, the U-21A ad-
ministrative support aircraft, the 0V-
1C (Mohawk) fixed-wing observation
aircraft, as well as a large number of
training helicopters.

Funds are also requested for the
procurement of long-lead-time com-
ponents for the AH-56A Ad-
vanced Aerial Fire Support System
(AAFSS) to permit early initiation
of production, when development
warrants such a decision,

Army missile procurement (includ-
ing spares) will total $561 million in
FY 1967 and $769 million in FY
1968. The FY 19G8 program provides
for ground support equipment for the
Quick Reaction Alert Pershing bat-
talions deployed in Europe; Lance
missiles and related ground support
equipment; initial procurement of the
TOW missile system; a largo quan-
tity of Shillelagh missiles; Redeye
and Chaparral air defense missiles;
and ground support and training
equipment for the Hawk missile sys-
tem.

The revised FY 1967 program for
weapons and combat vehicles totals

$1589 million ($83 million in the Sup-
plemental request), and $654 million
is included in the FY 1968 Budget
request. These funds will provide for
completion of the planned procure-
ment of the M-199 (IIS-820) 20mm
gun; substantial quantities of the
20mm Vulcan air defense gun ami
the fi.fifinim rifle; and additional
81mm mortars and self-propelled
155mm howitzers. The funds re-
quested will also provide for procure-
ment of the M-1578 light recovery
vehicle, tin; General Sheridan armored!
reconnaissance and airborne assault
vehicle, the MH8 armored personnel
carrier, thn 81mm and 107mm self-
propelled mortars, the M-577 com-
mand post carrier and the M--548
cargo carrior. We have also included
funds for M-fiO'w wit!) the :l05mm
gun, M-fiO'a with the Sbilblaffh/
152mm gun, the armored vehicle
bridge, and the combat engineer
vehicle, all of which use the M-GO
chassis,

... In FY 1968, advance production
engineering for the Main Battle Tank
will requirn $11 million. Additional
funds will be required for the U.S.
share of thn development costs.

The revised FY 1967 program for
trucks and other non-eoinhal vohMea
total $(Utf million <$lfi4 in tho
Supplemental request). For FY IflfiB,
$4Hfl million in requested for a vnrioty
of these vehicles. Included in tlm FY
1968 program are Vi-ton, IVt-ton
(M715), IH'u-ton and 5-ton Iruckn of
till typos. . . .

For co7ii muni cations and electronics
proiiuremont, the revised FY 1 007
program provides $617 million ($303
million in the Supplemental request)
and the FY 1908 request totals $fiGO
million.

For ammunition the Army's revitratl
FY 1967 program includes $1,JMU
million ($584 million in the Supple-
mental request). For FY 19fi8, $2,224

U. S. Army UH-1G

U. 8. Army Lance Missile

February 1967

million is requested. Ammunition
procurement will continue to increase
in FY liHW in order to moot the
projected needs of Southeast Asia.
A mong the miijor items art; : small
arms ammunition (fi.fifinim, 7. (>2mm,
and HO caliber); '10mm ammunition;
81 nun, IdCmim, lOUnini, :l.fi2mm,
IBfmnn, und 4.2 inch cartridges; nnd
2.7fi inch rockets.

The revised FY !!M!7 program
for other support equipment (road
graders, tractors, etc.) totals fjifiUH
million ($2*17 million in the Supple-
mental request) utid if'l.'i? million is
requested for FY 1SK1K. Tint revised
FY lil()7 program for production
bami support, totals $272 million,
(If 220 million in tho Supplemental
request) nnd ijiStH millioa in requested
for FY UMiH.

Navy General Purpose Forces

Tint Navy (Jcnerul Purpose Forces
proposed for Urn FY liMW 72 period
urn jiliown nn the classified tahlo
provided to th(t Committee. Kxcept
for tlit! Vietnamese-related forces, the
major changes from UK; program
planned lant year concern the anti-
submarine warfare forces, tho guided
missile shipn, tint nmphlliious ships
and tho minesweepers. Thorn in,
however, ono (ti'iierul problem in thiH
until which deiierven special tnentlini,
and llint in the doloronn wtate of the
American iihipbuildintv indiiMtry.

It han lii'citme increiuiinKly nppar-
ent in recent yearn that our nhiji-
huildliiK inthnitry, hoth public and
private, lui.'i fallen Tar behind itn
c'tmipetitoi'ii in other comitrioji. Not
only dotiH it coat twice iui much to
build a tihip In Unit country, it ahio
tul>n twice an lontf. . . .

ThiH in a utartlinK development in
view of tint fact Unit the United
H talon IM tint mo.st liiffhly indutitvial-

i/,od nation in tho world. Tt is oven
more startliiijf when wo realixo that
the modernization of tho Europeiin
aad Japanese yards has been achieved
by applying-, on :i ma.ssivo .scale, U.S.
automobile and aircraft manufactur-
ing tudinology to tihipbuilding. . . ,

Unroi'tunately, public diKcu.sHion of
tins shiphuildiiiK in'blom in this
country luui h(t<Mi focused on what is
actually the minor part its relation-
ship to tho Merchant Marine problem.
I can well understand why tho
American V\HJ* Line operators should
wish to sever the pi-emmi intorlork-
inK relationship between the Mer-
chant Marine and tint shipbuilding
industry; they could buy whips
abroad at half the prico and (vet
(lolivery in iibnut half the time. But
while thin divorce niiH'ht HO!VO the
]irobl(tm of the Merchant Marine, it
would not .solve the pvobhtm of the
Defense nepartment. The U.S. Mer-
chant Marino provides only it few
hundred million dollars of work per
year to the shipbuilding imlu.stry ;
Navy work amounts to between $2
and $2.5 billion a your, Thus tho
Itefeii.se Department, nwl tlm tnx-
liayor, bus a stake in tho American
.shipbuilding iadnntry which KOHH far
beyond the immediate problems con-
cerning the Merchant Marine.

Obviously, the more fundamental
solution is to revitalize tin; American
shipbuilding industry. Although we
may never he able to overcome com-
pletely the wiitfn rate differential,
there is no reason why tint American
shipbuilding industry should not he,
in a technological sen.se, an good as
the best liny other country hun to
oll'or. We have tho technology and
the nmnufacturhig "know how,"
what we need to do is to find some
way in which they can be applied to
the American shipbuilding industry
and siome way to finance tho rola-

U. S. Army OV-1 Mohawk

USS Enterprise CVA (N) 05

tively large investments that would
be required.

With regard to Navy work, th<>
Defense Department has already em-
burked on such a program. Wherever
feasible, we are grouping our annual
shipbuilding program into multi-year
procurement. . , .

Of perhaps greater significance
over the longer run is the new
procurement package approach, of
which the Fust Deployment Logistics
(FDL) ship is an outstanding exam-
ple. Under this approach, tho ship-
builder is asked to bid on the entire
package design, development and
I'oastriiction of a relatively large
number of ships to he delivered over
a period of yearn, much like UK;
package approach to aircraft pro-
curement. Several new programH of
this type are contemplated, and I will
discuss these in context with our
proposals for the Navy General
Purpose Forces in the FY liWH-72
period,

Attack Carrier Forces.

Last year, I described to the Com-
mittee a new plan under which we
would maintain nn active fleet of .If)
attiick curriers and 12 air wing
equivalents, instead of the l!{ carriers
and 111 air wings we were planning
on In-fore. We made this change
because of new force structure prom-
iiutu to provide significantly more
usable com but power than tlm one
previously planned and at no in-
crease! in cost. However, u force of
IT) carriers and 12 air wing equiva-
lents would require some change in
tho present modi! of operation. Car-
riers would normally deploy in peace-
time with less than the maximum
complement of aircraft and additional
aircraft would be down to the car-
riers when und as needed. la elTect,
we would he treating the attack cur-
rim- as a forward floating nir bust,
deploying the nircraft as tho situa-
tion requires, much as wo do in the
present carrier operations oil" Viet-
nam. It is this kind of operational
flexibility Unit enables thn attack
curriiH'H to make a unique contribu-
tion to our overall tactical air cajm-
bilitios.

Although tho adjustment of thn air
wings to tho new force structure in
scheduled to begin In FY 1068 and
bo completed by FY 1071, tho total
number of combat aircraft assigned
to the attack cnvrittr force will re-

Defense Industry Bulletin

main virtually unchanged. You may
recall that two years ago, in a deci-
sion unrelated to the number of
carrier wing.s, we decided to increase
the number of light attack aircraft
per squadron, and the number of light
attack Kfjiiadrons per Forrestal-class
carrier. In terms of aircraft assigned,
these increases, together with the
replacement of Essex-class carriers
with the much larger ForrestaPs and
Enterprise's will just about offset the
reduction to 12 equivalent air wings.
In other words, each equivalent air
wing will have about 25 percent more
aircraft than the present average air
wing.

Ships, The attack carrier force at
the end of the currant fiscal year
will consist of one nuclear-powered
carrier, the Enterprise, and seven
Forrestal-, two Midway- and five
Essex-class. In FY I960, the last of
the conventionally powered attack
carriers now under construction, the
John F. Kennedy, will join the Fleet,
followed in FY 1972 by the second of
the nuclear-powered carriers,

As I stated last year, if we are to
retain a force of 15 carriers, two
more will have to he provided. One is
scheduled for FY 1969 and one in a
later year ; both will he nuclear
powered. Fifty million dollars is
included in the FY 1968 Budget for
long lead time components for the
FY 1909 carrier. When these ships
are delivered to the Fleet, the remain-
ing Essex-class carriers will be
retired from the CVA force, which
would then consist of four nuclear
powered, eight Forrestal- and three
Midway-class carriers, for a total of
15.

Carrier Aircraft. No major change
is contemplated in the composition of
the aircraft complement of the attack
carrier forces from that projected
a year ago. The decline in the num-
ber of fighter aircraft after FY 1967
reflects two factors the previously
mentioned reduction from 15 to 12
air wing equivalents beginning in FY
1968 and the substitution of the more
capable F-111B for other fighter air-
craft on a less than one for one
basis. . , ,

In contrast to the fighters, the
number of attack aircraft will have
increased substantially by the time
the transition to the 12 equivalent
air wings is complete. At that point,

the attack aircraft force will consist
of A-G's and the new A-7's. . . .

Inasmuch as the A-3 heavy air-
craft are no longer required for the.
strategic mission, they are now being;
used as tankers to extend the range
of "shorter-legged" Navy aircraft. . . .

No significant changes have been
made in the combat readiness train-
ing aircraft forces.

ASW and Destroyer Forces.

Three years ago, in recognition of
the unsatisfactory state of our knowl-
edge in antisubmarine warfare, I
requested the Navy to undertake
systematic, long-term studies of all of
the related aspects of the problem.
From these studies has come a much
better understanding of both the
character and extent of the threat
and the capabilities of the forces
required to cope with it. As a result,
it now appears that some additional
changes should be made in our ASW
program. These involve the size of
our ASW carrier forces, and the
substitution of land-based patrol air-
craft for the seaplanes. , . .

ASW Carriers. We now have
eight Essex-class ASW carriers,, one
of which, the Intrepid, is temporarily
operating as an attack carrier in
support of Southeast Asia operations.
Our studies show that compared with
other ASW forces, the CVS ASW
Group is a high-cost system in rela-
tion to its effectiveness; the annual
operation cost of a CVS is about $92
million, including about $17.5 million
for the aircraft complement.

As the newer ASW systems tho
SSN's, the DE's, the P-3 patrol air-
craft, etc, join the Fleet in increas-
ing numbers, the relative value of the
ASW carriers will continue to de-
cline. Accordingly, we now propose
to reduce the force somewhat when
the conflict in Vietnam ends.

The older SH-34 helicopters on
CVS'a have already been replaced by
the new SH-S, and the CVA'a are
now also being provided some of those
helicopters.

The older S-2's will have been
completely replaced by the newer
S-2E's by the end of FY lt)07. While
full scale development and procm-e-
ment of a replacement aircraft should
not be undertaken until the role of
the CVS in the overall ASW effort
of the 1970'n has been clarified mid
until the need for a more sophisti-
cated capability has liccn clearly
demonstrated, we have included funds
for contract definition of a new uir-
craft (VSX) should further study
warrant our going ahead wilh this
program,

In addition to its ASW aircraft,
each CVS is authorised n few A-4'a
in order to provide a limitoU inter-
cept and air defense capability,
Finally we will continue to maintain
eight squadrons of carrier-lmsed
ASW search aircraft and four squad-
rons of ASW helicopters in tlw
Naval Reserve forces for thu four
CVS'K we plan to retuin In the
Reserve fleet.

Attac-k Submarine Forces, Hy (he
end of the current fiscal yi-nr the
submarine force, excluding Pulnrfa,
will number 105 KUlmiartm-.s, ri2 of
which will l)o nuclear powered. We
have continued to encounter diffi-
culty in gnttiiig tho S.SN program
on schedule, principally heciutw] of
the Submarine Safety Program anil
a shortnge of skilled workem. A.H a
result we will have a few less
HSN'H in the force at end FY .1067
than planned last year but wn hopo
to make up most of thto shortfall
next year. In the meantime, we pro-
pose to offset this Rlip;pa#G by (May-
ing tho phnnoout of an equivalent

U.S. Navy F-111B

U. S, Navy A-G

February 1967

number of conventionally powered
submarines.

As I pointed out last year, a force of
about 64 "first class" SSN's would
be needed. , , , Five SSN's were pro-
vided by the Congress in FY 1967,
leaving a total of six SSN's still to
be funded. We now propose to start
three more SSN's in FY 1968 and
three in FY 1969. This program will
give xis a total of 64 first class ISSN's,
plus four other SSN's which could
bo used together with the conven-
tionally powered submarines for
other ASW missions. If our continuing
study of the ASW problem should in-
dicate that additional SSN's are re-
quired, we can add to this program
next year.

Originally, we had intended to
modernize 12 conventionally powered
submarines (Korean War vintage or
later), including provision of im-
proved sonar. Last year, when it
became apparent that these sonars
were not going to be available in
time, we decided to go ahead with the
modernization of the first five sub-
marines without the sonar improve-
ments. It now appears that the new
sonar components will still not be
available for installation in the
remaining seven submarines in FY
1968, Moreover, other modernization
costs have risen to the point where
we now believe that it is no longer
practical to proceed with the pro-
gram. Accordingly, the plan to
modernize these seven submarines in
FY 1908 has been dropped.

In the Submarine Direct Support
category, we propose a phased re-
placement program for our present
submarine rescue ships (ASR's). . . .
Therefore we tentatively propose to

Artist's Concept of U. S. Navy A-7A

construct five new ASR's over the
next few years, These new ASR's
will have catamaran (i.e., twin) hulls
and provide much greater deck
space, including a helicopter plat-
form, and better sea-keeping qualities
than the present ships.. They will be
capable of operating two rescue sub-
mersibles and supporting divers at
great depths for prolonged periods.
We are requesting- $17.7 million for
the ASR in FY 1968.

In addition to the 10 ASR's, which
we plan to maintain throughout the
period, the Submarine Direct Support
force includes six submarine tenders
(AS) and nine auxiliary submarines
(AGSS). Two new submarine tenders
are tentatively scheduled to be con-
structed in future years.

ASW Escorts, The requirement for
ASW escorts can be met by several
different types of ships most of
which are also capable of performing
other missions such as patrol, fire
support and anti-air-warfare. In
planning for our future ASW escort
forces, all ships with an ASW capa-
bility are taken into account. How-
ever, only the destroyer types with-
out a SAM capability are included
under the ASW category; the SAM
ships will be discussed later. . . .

Two years ago we proposed a
phased replacement program for tho
destroyer escort force. In accord with
that plan, $29S million has been
included in the FY 1968 request for
10 more of these ships. . . .

With respect to the years beyond
FY 1968, it now appears that sub-
stantial construction and operating
economies could be achieved with a
newly designed ship (tentatively
designated the DX) employing the
"total package" procurement concept
and a large multi-year buy. It may
also be possible to use the same
approach and the same or a similar
design for a new class of guided
missile ships (tentatively designated
the DXG). Accordingly, we propose
to initiate a new program which
would provide for:

Standardized design and serial
production of a sizable quantity of
identical ships in order to minimize
total procurement cost,

Incentive to the contractor to
design a highly automated ship re-
quiring minimum manning in order
to reduce operating costs.

Standardization in order to re-
duce logistic support costs.

e Possible standardisation/integra-
tion of the DX and DXG in order to
m axim iae f urther advantages of
standardisation and serial construc-
tion (e.g., both ships might have the
same hull and differ only in their
weapon systems, or perhaps their
hulls could have common bow and
stern sections with separate mid-sec-
tions for each type).

Possible use of modular design
concepts so that major components
(e.g., specific weapon systems) could
be installed and removed en bloc,
facilitating both repair and future
modernization.

We have included $30 million in
the FY 1.968 Budget to initiate con-
cept formulation and contract defini-
tion of the DX/DXG. At the conclu-
sion of the contract definition phase
the entire program will be reevalu-
ated in the light of the detailed
designs and cost estimates which
result.

We are also continuing to im-
prove the SQS-23 sonars on most of
the earlier DE's and on a large num-
ber of DD's, guided missile destroyers
(DDG's), and cruisers (CG/CGN's).
. . . About $18 million was pro-
grammed for this purpose in FY
1966, about $11 million in FY 19G7,
and we are requesting another $24
million in FY 1968.

As I described a year ago, we are
taking steps to improve the ASW
capabilities of 13 remaining D-931
class destroyers, all of which are less
than twelve years old. "We are provid-
ing them with ASROC, improved
communications, a new variable
depth sonar (YDS), improved EGM
capabilities, the improvement to the
SQS-23 sonar, a modern ASW com-
bat information center, etc. at a cost
of about $14 million each. Since the
VDS equipment will not be available
this year, the ships are being rewired
now to accept it later when it does
become available, With these improve-
ments, the 13 remaining DD's should
offer comparable, and in some ways
even better, ASW performance than
the new DE's we are building.

Originally, having funded one in
FY 1964, we planned on five of these
DD-931 conversions in FY 1966 and
five this year, with the last three
scheduled for FY 1968. However,

Defense Industry Bulletin

because of equipment procurement
problems, we have rescheduled the
program. Wo have one in conversion
now and plan to start three conver-
sions this year, seven more in FY
IMS, and the last three in FY 1969.

Patrol Aircraft. While we still
plan to maintain a total of 30 squad-
rons of ASW patrol aircraft, we now
propose to phase out the three
remaining squadrons of seaplanes
(SP-f>) and retain, instead, three
squadrons of SP-2 land-based patrol
aircraft. One squadron will be con-
verted this year and the other two
in FY 11)68. This change will permit
us to decommission the three remain-
ing seaplane support ships (AV's)
and thereby save 17 million per year
in operating and indirect costs, with
no reduction in our overall ASW or
surveillance capability. Except for
these three squadrons, all the SP-2's
will be phased out of the active ASW
patrol forces over the next few years
and replaced with 27 squadrons of
the new P-3's. (Ten squadrons of
SP~2's will be retained in the Navy
Reserve.)

Beginning in FY 1968, all new
P-3's will be procured with the
A-NEW avionics system and when
the force buildup is completed
we will have nine squadrons so
equipped. . . .

Multi-Purpose SAM Ships. The

multi-purpose surface-to-air missile
(SAM) ships provide an important
part of the Fleet's anti-air warfare
(AAW) capability. As I described
last year, our current program ob-
jective for the SAM force is 79
ships. ... By the end of FY 1967
the SAM ship force will consist of
70 ships, three of them nuclear pow-
ered.

Last year Congress added funds to
our original budget request for con-
struction of a nuclear-powered frig-
ate. As you know, we did not recom-
mend the inclusion of such a ship in
our FY 1967 program. However, we
have decided to proceed with con-
struction this year, . . .

I am also again recommending the
construction of two guided-missile
destroyers (DDG's).. ..

The new DDG's and DLGN would
have significantly improved AAW
and ASW capabilities compared with
present SAM ships, particularly in

a hostile UCM environment. . . . Tftey
will employ the new Standard
missile and be equipped with the
latest ASW equipment, the Navy
Tactical Data System, and the im-
proved SQS-26 sonar. Provisions
would, of course, be made to incorpor-
ate new systems and technologies as
they become available, and space will
be provided for this. Some $1G7
million is requested for the two
DDG's in FY 1968.

In addition, we are continuing the
SAM Improvement Program, under
which the Standard missile is now
being procured to replace both Tartar
and Terrier. . . .

Last year I mentioned that we were
studying the feasibility of providing
a "close-in" or "point" air defense
capability for other types of combat
ships, We now propose to procure and
install a basic Point Defense Surface
Missile System (PDSMS) on ships
which are not likely to encounter the
more sophisticated forms of air
attack and which do not generally
operate in the company of regular
SAM ships e.g., amphibious assault
ships and destroyer types operating
independently near hostile land areas.
This system makes use of existing
hardware (e.g., Sparrow III missiles)
and can be installed on existing gun
:nount foundations, . . ,

About $14 million has been included
in the FY 1968 Budget for the first
procurement.

Other Combatant Ships.

At end FY 1967, there will be 23
ships in the Small Patrol category.
These ships are used for coastal sur-
veillance and patrol boats (PTF's)
costing $17 million have been added
to the FY 1967 program.

The primary mission of fire sup-
port ships, also included in this cate-
gory, is to provide a heavy concen-
tration of ship-to-shore fire during
amphibious assaults. , . . the. Navy
is presently studying the feasibility of
a new type of landing force support
ship which would combine the firo
support capabilities of the cruiser's
heavy guns and the rocket ship's
saturation fire,

Amphibious Assault Ships.

Last Year I informed the Com-
mittee that while our objectives of
achieving a modernized (20-knot) am-
phibious lift for one and a half Ma-

rine -uxpetutionary I'-orces (.MHJ^', or
division/ wing 1 teams) and sufficient
older ships to provide a slower lift for
another half of a ME'F remained the
same, further study of the composi-
tion of the force had convinced us
that some modification of the future
construction program was desirable.
I also noted that the Navy wn in-
vestigating the possibility of design-
ing a multi-purpose ship which could
combine the features of several dif-
ferent types of amphibious ships and
that one of the reasons wo had re-
scheduled the program wus to pro-
vide time to develop a desie'n for thin
new ship. . . .

. . . Unfortunately, experience has
shown that our currant LPD's are too
small to he truly effective UK a multi-
purpose amphibious ship in the as-
sault role and they cannot by them-
selves serve as a replacement for a
variety of specialized ships. For tilts
purpose we need a bigger assault
ship capable of landing, cither by air
or by sea, n much larger ami more
balanced land force than is now pos-
sible with any existing amphibious
vessel, and this was the typo of shin
I mentioned last year.

Our further study of this proMom
indicates that the development of
such a ship is not only feunSblo but
highly desirable. On the basis of tho
Navy's preliminary design work, this
amphibious assault ship, now cUwiff-
nated the LHA, would bo quite large
(about 40,000 tons, compared with
less than 18,000 tons for the LPD)
and would have both a boat well and
a helicopter deck, , , .

In view of these advantages, we
now propose to substitute LHA's for
a variety of specialized amphibious
ships which we had previously pro-
grammed. The first of these IJIA'a
has been included in the FY 1068
program. As in the case of the C-CA
and tho Fast Deployment Logistics
ships, we plan to use the two-stop
contract definition, total package pro-
curement technique for the LHA's,
and $18 million is included in tho FY
1968 Budget for contract definition,
in. addition to funds for the construc-
tion of the first ship.

,0ne of the goals we hope to achieve
in this program is a considerable- re-
duction in operating costs. To this
end the competing contractors will bo
encouraged to design this ship so that

February 1967

it can be operated by significantly
fewer personnel than previous ships
of this size. . . .

Mine Counter measure Force.

At the end of this fiscal year we
will havo a mine countermeasure
forces of 88 ships, composed of 64
ocean minesweepers (MSO's), 18
coastal minesweepers (MSC's), three
mine countermeasures support ships
(MCS's) , and three other support
.ships.

In order to modernize this force
and improve its mine countermeas-
uro capabilities, we propose to un-
dertake a major rehabilitation pro-
g-rain for all the existing MSO's. . . .
We propose to start the rehabilitation
of nine MSO's in FY 1968, for which
we arc requesting $83 million.

Two years ago, we started a con-
struction program for new MSO's.
Four MSOa were funded in FY 1966,
five more in FY 1967, and we are
requesting $61 million in PY 1968
for the last seven. . . .

Last year we initiated a program
to provide some of the Marine Corps
assault helicopters (CH-53's) with a
secondary mine-sweeping capabil-
ity. . . . Modification of some of these
helicopters to accept the sweep equip-
ment was begun last year, and we
plan to start more in FY 1968. This
program will give our assault forces
a significantly augmented minesweep-

ing capability against less sophisti-
cated mines at a total coats of only
about $12 million.

Logistical, Operational Support, and
Direct Support Ships.

... In order to take advantage of
modern re-supply methods and to
complement the higher speeds of our
latest ships, we have planned a long
range construction program to rebuild
the underway replenishment fleet.
The FY 1968 program includes two
AE's (ammunition ships) and one
AOE (fast combat support ship) at
an estimated cost of $137 million.

Marine Corps Forces.

The major Marine Corps ground
and air units shown on the classified
table provided to the Committee are
essentially the same as those we pro-
jected last year. The temporary units
added to support the Southeast Asia
deployments include a fourth active
division with its associated nine in-
fantry, one tank, one amphibian
tractor, and the equivalent of five
artillery battalions, four Hawk air
defense' batteries, and two light ob-
servation and two medium transport
helicopter squadrons. The permanent
force remains at four divisions/air-
craft wings (3 active and one re-
serve).

The Marine Corps fighter forces
will be maintained at about the cur-
rent level. . . .

Replenishment at Sea

Defense Industry Bulletin

The Tactical Air Control (TAG)
force, which is used' to locate enemy
targets and then direct the attack
aircraft to them, is programmed to
remain at the present level. . . .

In the transport helicopter cate-
gory, we now plan to maintain the
currently augmented active force
level through FY 1969, while simul-
taneously building our Reserve struc-
ture. When the Vietnam conflict ends
the Marine Corps transport heli-
copter force will return to the
planned permanent level. . . .

In the light helicopter and obser-
vation category the total number of
aircraft will be increased significantly
in FY 1968 through the temporary
retention of 0-1's and UH-l's pre-
viously scheduled to phase out after
the new OV-10's are delivered.

Last year we undertook a major
program to increase the fixed-wing
combat readiness training capabilities
of the Marine Corps. This program
will be continued. We also undertook
at that time, on a temporary basis,
a program of combat readiness train-
ing for Marine Corps helicopter
pilots. . . . We now plan to make
the combat crew readiness training
program permanent and to expand
the force level. Later, as the OV-10
enters the operating force, we plan
to add some of these aircraft to the
combat readiness training force.

The numbers of tanker /transport
aircraft and of support aircraft are
essentially unchanged from those
presented last year.

Navy and Marine Corps Reserve
Forces.

The Navy will continue to main-
tain a total of about 50 ships in the
Naval Reserve. ... As more modern
ships become available from the
active forces, older ships will be
phased out.

The Navy also maintains a large
number of ships in the Reserve (or
"mothball") Fleet, in either Cate-
gory B (BRAVO) or Category C
(CHARLIE) according to their phys-
ical condition and readiness status.

As I noted last year, because of
their relatively poor physical condi-
tion many of the CHARLIE ships
would be usable only after extensive
overhaul and modernization. Accord-
ingly the Navy is continuously sur-
veying these ships in order to iden-
tify those which have no further
value. These ships are then scrapped

or ntlu'nviiif" disposed of. As a result,
thi' yha of tho IJeserve Fleet has
hf-t'n proyivHsively reduced.

Tin; N;iv;il and Marine Corps Re-
;;i-rv<> air units are programmed for
.'ibmit 7-JO aircraft at tile end of this
fiscal year, and this number will be
imTfa^ed over the next few years. . . .

\avy-Marinc Corps Aircraft
Procurement.

The Xiivy and Marine Corps air-
oraft procurement program is shown
on the classified table provided to
tht.- Committee. In order to meet the
nxiuiremcnts of the Southeast Asia
conflict and continue the planned
modernization of the force, we pro-
po.-t? f> increase the FY 1967 pro-
gram from the original 620 aircraft
to 1,047, and to buy another 680 air-
craft in FY 1908 instead of the 604
planned a year ago. . . .

With regard to the modernization
'>( the attack carrier fighter forces,
w<? -still plan to initiate F-111B pro-
curement in FY 1968. . .

To provide for combat attrition be-
yond FY 1967 and complete the
equipping of the Marine Corps
nghter squadrons, we have increased
the FY 1967-68 F-4 procurement
programs substantially over the
number previously planned. This will
permit the replacement of the last
Marine Corps F-8 squadron in FY

changes has delayed the award of the
contract and has caused us to reduce
the FY 1967 quantity. Additional
OV-10's will be procured in FY 1968.
For the ASW mission, another in-
crement of the P-3's with A-NEW
will be procured in FY 1968.

To provide for the higher tempo
of operations and future combat at-
trition in Vietnam, we are increas-
ing our procurement of helicopters
in FY 1967, and buying more in FY
1968.

In the Fleet Tactical and Mission
Support category, we have added
some C-130 radio relay aircraft to
the FY 1967 program and canceled
the previously planned C-2A procure-
ment. . . .

The increase in planned pilot pro-
duction from 2,200 to 2,525 per year
will require the procurement of addi-
tional training aircraft. . . .

Accordingly, we have canceled the
previously planned procurement of 72
T-28C's in FY 1966 ami fi8 in FY

1967, and instead we now propose
to procure 36 T-2B's and 94 TA-4's
ia FY 1967, and 90 T-37B's in FY

1968. We have also included in the
FY 1967 program 9 TC-4Cs (a ver-
sion of the Grumman Gulfstream)

navigator bombadier training.

for

Since we plan to retain a number
of * -8 aircraft in both the active
fleet (for the Essex-class CVA's)
and the reserve forces for some time
beyond FY 1968, we have decided to

This will reduce the requirement for
A-6A's now being used for this pur-
pose.

For helicopter training we will be
able to utilize UH-lB'a as they are
released by new OV-10'a phasing into

the force, thus permitting the can-
cellation of the 20 TH-1E planned

..,, ,, L liavK ueciuea to , " ""^ ^ J.J.1-J..U; planned

rework a substantial number of the for P l ' oclll ' e ent in FY 1967 fn ad

latest models, providing them with tiltl0n ' we P lan to buy 40 new in-

now wings and other life-extension ;J*ted light turbine helicopters

inodificat oris Tl, n ,. . . . (LTH' S \ ; i?v ,,/, , *"-"PWIB

-son

modifications. The program was ini-
tiated last spring, using about $17

h ", T Yli f ^iTO million
is included an the revised FY 1967

Budget; another $70 million is re
quested for FY 1968.

Dla'nM* ***** teg Fy we w
Plan to increase substantially the FY

iJb7-68 procurement program en-

a rr aso ' We h - e >

and A-6A' S to the FY 1967

n TV ^ vT, "cucupiers

(LTH's) m FY 1968 to provide the
mcieased trammg capacity mentioned

Other Navy Procurement.

In order to build toward our loir.
istics^obectives and to p rov id e

consumption in
we are

500-lb. bomb. Other important itrins
in the FY 1968 program ;iro tint 2.76-
inch rockets, the fi-inch Xuni rockets,
the 260-lb. bomb, Walleye TV-
guided glide bombs and air-lo-surfaco
anti-radiation missile.s.

For the surface-to-air irrisniln hips
which provide; tho J^luut's nir dcferiwe,
the Navy will prcxmrn only tho miw
Standard missile b^rinmnj? in FV
1968, although (leliverms of Trrricr
and Tartar miKsilut) will continue for
some timo. We arc i-eqnHtliiR ,?Cif
million in FY 1HOK for both tint rni'-
dium range anil Lh<> n>
Standard rnisiiiloH,

. . . Fumla for tho protMimnoiiL of
the final quantity of Talow iniHnih'a
. - are included in tho FY 1U41H
Budget.

With respect to air-to-nir inis.sjlc^
wo am buying both th Ki<l!win<|rr
and the Sparrow IH in I-'Y JOfW. .
We also propDHi' to initiate pilot lin^
production of tho I'hwnlx mtnn\lv in
FY 10fi8.

Tn the ASW v.ntc.Rnry, wtt v ] nn to
continue the procur<>ni(tiit (' A.SIUKI
and SUBKOC in FY (0(J8. . .

Last year I informal tho <lmmFt-
tee that thn DASH ASW droni! ln-K-
coptor was oncountoriiiff lii^lior-tltan-
expcctotl peacetime attrition mid
lower-tlnin-ex-i)(!('tcd pnrfin-iiianci!, fuul
that we would roviow tlu> oittini pen-
gram. AH a result of thw i-(!vinv h \\v
have now decidnd to riidncn (In-
planned deployment of thin HyitUun by
about ono-third. . . . Tliifi
in deployment will permit
iion of tho previously plnninid FY
19R7 procurement.

Improved ASW torpnclo H cnnliiiuo
to be a major prorcquisilo to a nun-.'
effectiva ASW force, and thin cate-
gory of weapons linn conllnuofl to
receive our close attention, ... In iui
attempt to expand the piwiuctfon

""iwjjn;ii U yCiir Hf^fi \Ua 1* "?-< ody inilnnn n 'Cix/ 1 -tr.

$ and A-6A's to the FY 19fi7 $^ million is inrbiflp^i { *i r,

S: a T t A ; 6 , A ' S to thc FY ^ -"rta, ^^XVmLnr

i nci nn . program for FY r dnanee, anH aiv.,,^'*' '

iyt>7-RR 10 ahn,.i. ii_ x ' "' Ammunition ,!

had Planne(l

M -

Marmc Corps in FY 1M7 .

the need f certain design

for
Large quantities of

purpose.

U. S. Marino Corps CH-ffSA

Februnru lox-r

base for the MK-46 and obtain the
cost benefits of competitive procure-
ment, we have opened a second pro-
duction source. Although we have
achieved the cost benefits (the tor-
pedoes bought in FY 1966, for ex-
ample, cost $124.3 million compared
with the budget estimate of $179 mil-
lion), it now seems clear that we will
not achieve the production levels in
FY 1967 originally expected. Accord-
ingly, the FY 1968 procurement is ad-
justed to take tliis slippage into
account.

Funds are also included in the FY
19fi8 Budget for the AN/SSQ-41
(Julie, Jezebel), an improved sono-
buoy capable of employment in either
an active (Julie) or passive (Jezebel)
mode. . . .

Finally, a total of about $125 mil-
lion is included in the FY 19G8
Budget for 8-inch, G-inch and 5-inch
naval gun ammunition to meet the
consumption requirements of South-
east Asia and continue the buildup of
our stocks.

Marine Corps Procurement.

The PY 1967 Marine Corps pro-
curement now totals $541 million, of
which $263 million is included in the
FY 1967 Supplemental. For PY 1968,
a total of $715 million is requested.
Included in the FY 1967 total is
$231 million for munitions and ord-
nance ($114 million in the Supple-
mental); $463 million is included for
this purpose in FY 1968.

The FY 1!)07 Supplemental pro-
vides about $70 million for the pro-
curement of support vehicles such as
M,-, %-, 2%-, and 5-ton trucks, and
$39 million more is included for sup-
port vehicles in FY 1968. For
tracked vehicles, ,$4 million is in-
cluded in the FY 1967 Supplemental
and $5 million in the FY 1968
Budget.

In the communications and elec-
tronics category, which includes such
major items as radars and the
Marine Corps Tactical Data System
(MTDS), we have increased our FY
1967 procurement to $107 million, $20
million of which is included in the
Supplemental request. Another $145
million is included for communica-
tions and electronic equipment in FY
19G8.

Air Force General Purpose
Forces

The Air Force General Purpose
Forces shown on the classified table
provided to the Committee are es-
sentially the same as those presentee]
a year ago, with the exception of
certain changes related to our opera-
tion in Vietnam.

Fighter and Attack,

Our long range force objective in
this category is the same as last
year, namely, 24 wings of F-4's, I?-,
Ill's and A-7's. In the near term,
however, we now propose to make
several changes in the force struc-
ture and procurement programs. For
the most part, these adjustments arc
related to operations in Southeast
Asia, in particular, the changes in
our budget planning assumptions and
the variations from the projected
combat attrition rates reflected in
our force planning last year. And,
in a few cases, the proposed changes
are the result of adjustments in pro-
duction schedules.

The 13-57's that we are using in
South Vietnam will decline in number
through FY 1968, after which they
are scheduled to phase out of active
sei'vicc completely.

With respect to the F-100's, we
had originally planned to phase down
the active force to fewer aircraft by
end FY 19G7. However, attrition has
been lower than forecast and we will

U. S. Air Force P-4C
Defense Industry Bulletin

U. S. Air Force RF-101

have more squadrons in the force at
end FY 1967 than we had previously
planned. . . .

Last year we had planned to hold
a large number of F-102's in the
force through FY 1!K57 and then
phase down considerably in FY 19C8.
However, in order to free F-4's for
deployment to Vietnam, F-102's sched-
uled to pliaso out of the continental
air defense forces were transferred
to the tactical forces in FY 196fi.

Last year we had planned to re-
tain the two I' 1 - 104 squadrons
through FY Ij)fi7. However, we now
plan to have only one .squadron at
end FY .19-67 ami phase this .squadron
out by the end of FY 1908.

The number of: F-lOfi's in tho active
force is projected to decline, and
ultimately these aircraft will bo
phased into the Air National Guard.

The F-4's are experiencing some-
what lower attrition than forecast
last January and this will help the
force to build up faster than
planned. . . .

The F-lll activation schedule is
the same as planned last year, except,
for a small slippage in a few of the?
later squadrons,

Last year, in order to help divers-
ify tho Air Forco tactical fightm-
force, WG proposed tho procurement
of the A-7, a relatively infijcpnnsive
subsonic aircraft with good range,
largo ordnance-carrying capability,
long loiter time, and ffotxl close
ground support features. Our original
deployment schedule called for acti-
vation of the flrwt squadron in FY
1968 with morn to lit; introduced later.
However, this schedule was predicated
on an early decision to proceed with
the deployment of an afterburner
for the Air Force A-7. . . .

Two considerations caused us drat
to delay and then change thin deci-
sion, First, it appeared desirable, if
possible, to find a new engine pro-
duction source rather than add to
the already crowded schedule of one
of our principal , engine manufac-
turers. Second, if a different, more
powerful engine could he used, tho
load-carrying capacity of the A-7
would not have to be penalised by
several hundred pounds of dead
weight which the afterburner would
involve. Such an engine, the Ilolls
Royce'a "Spoy," proved to he obtain-
able from Allison, who will produce
it in the United States under license

from the British firm. The net result

of this decision will be a more capa-
ble aircraft but a delayed delivery
schedule for the first aircraft. How-
ever, a new, faster production sched-
ule will still permit the achievement
of the projected force by the origi-
nally planned date.

Tactical Reconnaissance.

The present long range objective
for the tactical reconnaissance force
remains the same as a year ago.

Because of anticipated Southeast
Asia attrition and higher training re-
quirements, the RF-101 force had
been expected to decline by the end
of the current year and then level
ofT. In order to maintain that level,
we will have to modify additional
F-101's to the RF-101 configuration.
With respect to the RF-4's, the
force will he built up to its full
planned strength, although projected
attrition in Southeast Asia will cause
a slight delay in the scheduled build-
up.

Ultimately, we will probably want
to introduce a more advanced capa-
bility into the tactical reconnaissance
force. To this end we initiated in FY
1966 a development project which
would provide a reconnaissance ver-
sion of the P-lll. This development
provides for the necessary equipment
to be installed in the attack version of
the F-lll w ith minimum modification
to the aircraft. Through FY 1967,
$25 million has been devoted to this
effort and $2 million more is included
m the FY 1968 requested. An addi-
tional substantial sum is included in
our request for the initial procure-
ment.

some modification of the engines and
provision of new ECM gear. A sub-
stantial sum is requested in the FY
1967 Supplemental for these modi-
fications. Later, as advanced elec-
tronic equipment becomes available
(e.g., from the Navy EA-GB pro-
gram), it may be retrofitted into
these aircraft.

Special Air Warfare Forces.

Since its creation in 1962, the
Special Air Warfare (SAW) forces
have grown both in size and in the
range of missions performed. .

In order to meet the requirement
of the Vietnam conflict, we have in-
creased the size of the SAW force.
This increase includes additional
0-2's, AC-47's, C-123's, C-47's, and
A-37's, partially offset by the reduc-
tion of A-l's,

w wan

mination of the size and

of the TAGS force, a imittor wo HOI

have under study.

Combat Readiness TrainUi*?-

As described a year &&<+

to increase the size of tJics

flying training base very Hi'K 11 i f " ( ' arit| 3

over what it has been in r^*<' nt yctu ' ti

Predicated on the assumption Uml

the Southeast Asia conflict would t"" 1

by 30 June 1967, this cxp- w '"", wa *

to have been substantially "d'^vrcl

by the end of FY 1968. !>ft>\Vt ll(>w '

ever, under our roviHO*! Imtlffnt

planning assumption, com 1*1 *" * ""' r>f

the buildup of the training l )liao tn

terms of aircraft would H<> < I fla

until the following' yeai 1 . ,

Tactical Electronic Warfare Support.
With the increasing importance of
electronic warfare, underscored by
our experience in Southeast Asia, we
have decided to establish a separate
Tactical Electronic Warfare Support
(TEWS) force in the Air Force
General Purpose Forces. This force
will be composed of EB-66's con-
verted from the RB/EB-6G aircraft
previously shown in the reconnais-
sance category, and EC-47's (for-
merly RC-47's).

In order to provide sufficient air-
craft for training, maintenance and
advanced attrition, we plan to con-
vert the RB-66's now in the force
and WB-GG's now in storage to the
EB-66 configuration; this will involve

Other Aircraft.

The Tactical Air Control System
(TAGS) provides the command and
control capability for the tactical air
commander in field operations. Cur-
rently, the Air Force is using modi-
fied 0-1 aircraft transferred from the
Army for the Airborne Forward
Air Controller (AFAC) mission in
Southeast Asia. Last year, we had
planned to convert this force com-
pletely to OV-10's by the end of FY
1968. However, during the past year
the requirement for AFAC aircraft
has virtually doubled and, as a re-
sult, the authorized TAGS force has
been increased. In addition, the 0V-
10 program has slipped and we do
not now expect deliveries of that air-
craft to the Air Force to be made
as fast as originally planned. In
order to build up the force as soon
as possible, we have already taken
action to procure an off-the-shelf Ces-
sna aircraft designated the 0-2.
With respect to the longer term, 'it
is too early to make a final deter-

Tactical Missiles.

As I indicated last ynav, *.h(! -
maining Mace B missiles (OIMI H<|Uiul-
ron) deployed in Germany will bo
phased out as Pershinjr iiik** over
the quick reaction alert" (Q.K.A ) roll-.
The remaining Maco II l & Hti|*loye<l
in Okinawa, however, ai'o t**n tuiively
scheduled to remain in tlio ni-tlvi!
force through the program j*jriwJ.

Air National Guard.

A number of changes Imv** linttn
made in the planned equipiiprit of Air
National Guard squadrons, ituml; <if
them related to changes in thr* ntiv
structure. The Guard wl 1 1 i-lni
more F-84's and F-8fi's IOIM^-C in
order to offset delays in thn tvxii infer
of F-100'a and F-106's frcnn Urn
active forces. The Gutivd will luivn
547 tactical fighters at end JW 1007
and this number is scheduled to Inn-
rease modestly in future yoar.

Aircraft Procurement.

The Air Force will procuro n
total of 732 tactical, air control, n.n!
reconnaissance aircraft for tlio l"!rm-
eral Purpose Forces in FY 1<>G7 at n
total cost of $1,847 million. <<>r t hl

U. S. Air Force F-105

U. S. Air Force C-123IJ

Februory

total, 102 aircraft costing $457 mil-
lion are in the PY 1967 Supplemental
request.) For FY 1968, 874 aircraft
costing $2,076 million are requested
for these forces. Both the FY 1967
and FY 1968 programs provide for
combat attrition through the normal
production lead time. Accordingly, if
the Vietnam conflict should end be-
fore that date, both the active and
reserve Air Force structures would
be modernized faster than now proj-
ected.

Last year, we had scheduled pro-
curement of a sizeable number of F-4
aircraft for PY 19G7 and a final
procurement in PY 1968. We now
propose to increase the PY 1967 pro-
gram and buy an even larger
quantity in FY 1968.

With respect to the F-111A, we
now plan to buy somewhat fewer
aircraft in FY 1968 than wo planned
last year so as to be able to in-
clude certain improvements, which
are now being made, in more of the
aircraft. The aircraft deleted from
the FY 1968 program will be added
to the end of the line. . . .

The Air Force's A-7 program has,
as I indicated earlier, slipped sub-
stantially from that projected a year
ago. ... The PY 1966 buy has been
deleted and the FY 1967 buy re-
duced. For FY 1968 we plan to buy
a large number of A-7's, and addi-
tional offsetting 1 upward adjustments
in procurement in subsequent years
should permit us to achieve the
planned force level by the originally
scheduled date. . . .

Last year we had tentatively-
scheduled procurement of 167 0V-
10's for the TAGS force. However,
tho TAGS requirement has grown
sharply during the past year, lead-
ing to the decision to buy the O-2
and this, coupled with a delay in
projected OV-10 deliveries and an in-
crease in the cost of that aircraft,
has caused us to revise our planned
procurement program. Although we
still plan to pin-chase 157 OV-10's
for the TAGS mission, the PY 1967
buy has been reduced and the dif-
ference added to the PY 1968 pro-
gram. Further procurement of the

OV-10 for the Air Force will depend
upon a future decision to use it to
help modernize the Special Air War-
fare Forces.

As previously mentioned, action
has already been initiated to procure
176 0-2A aircraft in FY 1967 for
the TAGS force and SAW force's
program to provide for combat at-
trition replacement. . . .

More A-37 aircraft have been
added to the FY 1967 program and
still more will be procured in PY
1968. We also plan to buy more F-
E's, principally to help modernize the
Vietnamese Air Force.

Finally, to offset projected attrition
of reconnaissance aircraft in South-
east Asia, the FY 1968 quantity of
RF-4 aircraft has been increased
and more will be procured later for
advance peacetime attrition. And, as
previously mentioned, to maintain
the desired level of RF-101 squad-
rons, we will convert a number of
F-101's to the reconnaissance config-
uration in PY 1968.

Other Air Force Procurement.

The Air Force's aircraft non-
nuclear ordnance program for FY

1967 totals $1,739 million, of which
$438 million is included in the Sup-
plemental request. The proposed FY

1968 program totals $1,629 mil-
lion. . . .

"Iron bombs," which are being con-
sumed at high rates in Southeast
Asia, will continue to dominate the
FY 1967-68 procurement programs.
For these two years, $1,400 million
will be spent on these bombs, includ-
ing 250-lb., 500-lb., 750-lb., and 2000-
Ib. bombs; $31 million is for napalm
bombs and $463 million is for 2.75-
ineh rockets and 20mm ammunition.
For certain special purpose ordnance,
$888 million is requested.

Also included in the Air Force's
FY 1967-68 program is $241 million
for TV-guided Walleye's, anti-radia-
tion missiles, and Sparrow air-to-air
missiles.

Theater Air Base Vulnerability.

The theater air base vulnerability
program is designed to minimise the

damage an enemy could do to our
overseas airfields, and the aircraft on
them, in a non-nuclear attack. . . .

This year's request for $26 million
will provide various vulnerability re-
ductions measures (shelters, paving
for dispersal sites, POL facility
hardening, etc.) at a number of
European and Pacific bases. The total
program presently envisioned would
ultimately provide shelter for a sig-
nificant number of aircraft and other
high-value aviation equipment, togeth-
er with the full range of other
vulnerability menKuros at a total
cost of about $.178 million. I urge the
Congress to provide the $26 million
included in our FY 1!>68 request so
that we may get started promptly on
this critical program.

Tactical Exercises

Under normal peacetime conditions,
large scale strategic mobility and
tactical exorcises contribute to the
maintenance of high combat readi-
ness, provide highly visible demon-
strations of our capabilities, help test
new operational concepts and weapon
systems, and permit U.S. and allied
forces to perfect coordination proce-
dures which they would have to use
in wartime. However, with the expan-
sion of combat operations in South-
east Ama during tho past 18 months,
the importance of simulating such
operations has dropped sharply and
in FY 1908, only about $9 million
was used for the larjrer exercises
"directed" or "coordinated" by the
Joint Chiefs of Staff. Therefore, on
tho assumption that tho Vietnam con-
flict will continue tlmmgli FY l!)Gf),
we have budgotett only $27 million
for this purpose, far below tho $100
million plus level of pre-Vietnam
years.

Financial Summary

The General Purpose Forces Pro-
gram outlined above will require total
obligational authority of $3M billion
in FY 1968.

A comparison with prior years is
shown below:

($ Billions, Fiscal Year)

1962

1963

1964

Ifl65

I960

1967

1968

Act.

Act,

Est,

Prop.

Total Obligational Authority 18.0

17.9

18.0

19.1

29. 5

34.8

34.1

Defense Industry Bulletin

Included in this program are the
Military Airlift Command trans-
ports, the Air Force's troop carrier
aircraft assigned to the Tactical
Air Command and the Unified Com-
mands, the transport and troop
carrier aircraft in the Air Force's
reserve components, and the troop
ships, cargo ships, tankers and "for-
ward mobile depot" ships operated by
the Military Sea Transportation
Service.

Although not specifically included
in the Airlift/Sealift Program, those
elements of other major programs
whose missions and capabilities are
closely related to the general require-
ment for lift have also been con-
sidered in determining what forces
should be provided here. These other
elements include such specialized
transportation forces as the carrier-
on-boarcl delivery aircraft of the
Navy and the cargo aircraft of the
Marine Corps.

Within the context of this specific
program, the lift mission consists of
two main tasks: the strategic require-
ment for transport supp ort o f
military operations in overseas areas
and the tactical requirement for
Intra-theater and assault airlift. The
strategic task can be further divided
into the requirement for the initial
rapid military reponse to distant
crises and the longer term require-
ment for continuing support and
re-supply of overseas military opera-
tions. This distinction is very
important because it helps determine
what kind of equipment is needed,
when it must be available, how it
should be organized and deployed, and
who should control it. As you know,
during the past several years, our
principal concern in the airlift/sea-
lift area has been to build up a
quick-reaction capability adequate to
meet our global security commit-
ments. More recently, our experience
m supporting a major military
deployment in Southeast Asia has
-focused our attention on the problems
of providing lift support over the
longer term, and especially under
conditions when it is not feasible to
requisition commercial shipping.

Strategic Movement

All of our studies show that the
length and cost of a war, as well as
the size of the force ultimately re-
quired to terminate it favorably, are
importantly influenced by how fast
we can bring the full weight of our
military power to bear on the situa-
tion.

In previous posture statements I
have discussed at some length the
range of strategies available to us
for meeting the requirement for such
prompt and effective response to
distant military contingencies. Basic-
ally, these choices range from reliance
on large ready forces deployed over-
seas in advance of need, to reliance
on a central reserve of men and
equipment in the United States to be
deployed by airlift and sealift as re-
quired. A strategy which combines
features of both these extremes might
provide for propositioning equipment
and supplies overseas, either on land
or aboard ship, with the men to be air-
lifted in as needed. Although each of
these approaches has its own advan-
tages and disadvantages with respect
to operational flexibility, foreign
exchange costs, total .manpower and
equipment requirements, etc., the
strategy of a mobile central reserve
supported by an adequate lift
capability and balanced preposition-
ing has long been accepted as the
preferred alternative for meeting the
rapid response objective.

During the past several years, the
Defense Department has been em-
barked on a major effort to achieve
the rapid deployment capability
needed to support such a strategy.
. . , Now, we are buying a new trans-
port, the C-5A, which will enable us
to make another major improvement,
both qualitative and quantitative, in
our strategic airlift capacity. Thus,
when our presently planned six
squadrons of C-5A's are all in the
force in PY 1972, our airlift
capacity will be more than ten times
what it was in FY 1961.

Over the years, forward preposi-
tioning of military materiel, especial-
ly heavy and bulky equipment, has
grown in importance, partly because
of the great increase in our ability to

airlift forces and partly because of
the emergence of new prepositioning B
concepts and equipment. The most
important of these concepts has been
the "forward floating depot (PFD)"
in which balanced stocks of equip-
ment and supplies are maintained on
ships stationed overseas within a few
days steaming distance of potential
trouble spots, and thus very quickly
available to "marry up" with air-
lifted forces from the central reserve,
As a first generation "floating depot"
system we planned to use old Victory-
class ships, specially modified for this
purpose. Three of these ships were
actually deployed in FY 1963 and we jj
had planned to add more this year.
However, the requirements of the
conflict in Southeast Asia have now
caused us to defer this deployment
for the time being.

Our future plans call for this first
generation system to be replaced by a
new class of ships, the FDL's, which
are being specifically designed to sup-
port a rapid deployment strategy.
Unlike the relatively slow (16 knots)
and small payload (2,265 short tons)
Victory ships, the PDL's will bo fast,
large payload (8-10,000 short tons) if
ships capable of rapidly delivering
cargo either over-the-beach, using cm-
barked lighters and helicopters, or at
established ports. Because of these
improvements, the FDL's will provide
a wider range of operational flexi-
bility than the Victory's. While we
would probably always want to have
some of them fully loaded and de-
ployed forward, some of them could
also be held partially loaded with
ammunition and supplies but in a
ready status in either U.S. or over-
seas ports where vehicles, helicopters,
etc., tailored to the mission, could be 3
placed on board quickly as the situa-
tion requires. This mode of operation,
which is feasible only because of the
speed and efficiency of the PDL's, '
woukl allow us to meet the desired
rapid deployment schedules without
immobilizing indefinitely large
amounts of high cost equipment,
some of which also requires substan-
tial continuing maintenance. In either
mode of operation, however, the
FDL's would have to be committed to
the rapid deployment mission at all
times and would not be available for '***'
regular point-to-point service. Thus,
while they will make an enormous
contribution to our rapid deployment
capability and will also be highly

February 1967

efficient carriers for resupply after
the initial deployment phase, these
FDL's in themselves do not provide
the answer to the overall sealift
problem,

Indeed, all of our study and
experience shows that the require-
ment for sealift continues to grow
after the initial buildup phase, as
more forces arc deployed and stocks
of consumables have to be replaced.
To meet this larger and longer term
need, we must rely in largo part on
merchant shipping. Based on the
transportation requirements implicit
in our contingency planning for a
number of the most likely limited war
situations, it appears that the equiv-
alent of up to 4GO general cargo ships
(averaging l&.OOO MT capacity, 15
knot speed) might be needed in a
future emergency, over and above
those available in our own Airlift/
Sealift Forces. Simply in terms of
size, the U.S. Flag Merchant Fleet
(active and reserve) is adequate for
such contingencies now, and should
continue to be so in the future. The
real problem, underscored by our
recent experience in supporting our
Southeast Asia deployments, concerns
the availability of these U.S. Flag
merchant ships to the Defense De-
partment on a timely basis.

For the past year and a half, we
have been engaged in a massive sea-
lift of men and supplies to Vietnam.
In the first quarter of FY 1967, the
Military Sea Transportation Service
(MSTS) exceeded its FY 1965
average quarterly shipping rate by
1GB percent. However, only about a
third of the increase was obtained
from the U.S. liner fleet (both sub-
sidized and unsubsidized). These, of
course, were the ship operators who
had been given preference in carry-
ing peacetime Defense cargoes, who
up until recently (when MSTS
introduced competitive bidding) had
collectively negotiated freight rates
with MSTS, and on whom Defense
had traditionally counted for the
"hard core" of its sealift augmenta-
tion in wartime. But, when the heavy
demands for sealift to Southeast
Asia began to develop, most of the
liner operators chose to continue to
ply their normal commercial trade
routes, and in the July- September
1966 period only eight percent of the
subsidized fleet and something: less
than 10 percent of the non-subsidized
liner fleet were under charter to

MSTS. This choice was understand-
able under the circumstances. In a
total war, neither the Government
nor the shipline operators would have
any choice, the ships would be
requisitioned. But in a limited war,
such as Vietnam, the issue is not as
clear; the shipline operators, under-
standably, don't want to lose their
place on the world trade routes and
the Government doesn't want to be
forced to requisition the ships it
needs.

^ Fortunately, in the present situa-
tion, we have been able to obtain the
needed sealift without recourse to
requisitioning, principally through
the use of the unsubsidized tramp
fleet and through reactivations from
the reserve fleet (NDRF). Almost
two-thirds of the increase in Defense
soalift capacity achieved since the
start of the Vietnam buildup has
come from these sources. , . .

While these resources have suc-
cessfully met the needs of the present
emergency, they may not all be
available in another emergency a
decade hence. By 197G, most of the
ships in the' NDRF will he 30-35
years old and will require larger
expenditures for conversion to assure
satisfactory reliability. Moreover, the
unmibsidized tramp/irregular fleet
will probably have disappeared be-
cause its aging: World War II vessels
cannot he replaced at an economical
price. As a result, the Defense De-
partment may in another emergency
be far more dependent on the sub-
sidized berth line operators than it
is today.

The greater requirement for berth
line ships is disturbing not only be-
cause of the problem of responsive-
ness but also because of the coat
implications involved. We know from
past experience (and we cannot real-
istically expect it to be otherwise)
that, unless the operators are assured
a good profit (at prices established
in a tight market), their ships will
not be forthcoming voluntarily in an
emergency. This makes the subsidised
liner fleet a very costly form of sea-
lift for the Defense Department to
hire, just when it needs it most.

Furthermore, U.S. Flag ships are
twice as expensive to operate, even
in normal times, as most foreign flag
ships. And, as I mentioned earlier,
ship construction in U.S. yards costs
about twice as much as that abroad,
To offset these cost differentials, the

U.S. Merchant Marine is subsidizes
by the taxpayer, directly and indi-
rectly, to the tune of nearly three
quarters of a billion dollars a year
on the premise that this shipping IF
required for potential national se-
curity needs. Yet, despite this large
annual subsidy, virtually all our sea-
lift needs since World War II have
been met without requisitioning mer-
chant ships. Moreover, it seems clear
that the most likely requirements for
sealift augmentation in the future will
be associated with limited war situa-
tions like Vietnam, in which recourse
to requisitioning will be as undesir-
able as it seems today.

In summary, from the viewpoint of
the Defense Department, there is a
firm requirement for reliable, respon-
sive sealift augmentation for a wide
range of limited war situations, a re-
quirement which the present sub-
sidized. U.S. liner (lent, for various
reasons, has not met. Various solu-
tions have been suggested, ranging
from a major increase in the sub-
sidized U.S. Flag merchant fleet to
a full scale program of reserve fleet
modernization. I do not propose to
offer a solution at this time; other
agencies of the Government are also
involved. I believe a way can be
found to revitalise both the American
shipbuilding industry and the U.S.
Merchant Marine and make them
both more truly competitive in the
world markets and I believe that
these objectives, along with our mili-
tary requirements, can be met at
costs lower than those our nation is
incurring today.

Airlift

The airlift forces currently planned
through FY 1972 are shown on the
classified table provided to the Com-
mittee. In the active forces, the C-5A
deployment schedule is the same as
that envisioned a year ago with the
first two squadrons scheduled to be-
come operational in FY 1970. The
first operational aircraft were in-
cluded in the current year's procure-
ment program and $423 million is
included in the FY 1968 request for
the next increment. The total G-5A
program cost (including research
and development and facilities con-
struction) is estimated at $3.4 bil-
lion. . . ,

Last year we had tentatively
scheduled the phase-out of the G-183

Defense Industry Bulletin

fleet from the active forces in FY
1971. However, in order to maintain
the squadron integrity of the Military
Airlift Command's force structure,
we now plan to phase out the last
two aqua (Irons of C-133's as the last
two C-5A squadrons become opera-
tional.

We also plan to retain one addi-
tional C-124 squadron (16 UE air-
craft), previously scheduled to be
phased out this year, through FY
1968. . . .

The C-141 force will reach its
planned strength of 14 squadrons in
FY 1968 and is scheduled to hold at
that level throughout the program
period.

Before the end of FY 1967, we
plan to reorganize the existing C-130
fleet within a force structure of 28
squadrons rather than the 31 pre-
viously planned. . . .

As a result of an Army-Air Force
agreement in April 1966, which re-
delineated certain air support mission
responsibilities within the combat
theater, the Army's CV-2 Caribou
transports (redesignated the C-7A)
have now been transferred to Air
Force operation and are, therefore,
accounted for in this program for the
first time.

No major changes are contemplated
in the airlift force structure of the
reserve components from that pro-
posed a year ago. In FY 1968, we
proposed to continue one C-121
squadron and one more C-97 squad-
ron than planned last year. . . .
Eventually, the reserve airlift force
will consist entirely of C-130's. Dur-
ing PY 1968, we propose to continue
the 100 percent manning for the 11
Air Force Reserve C-124 squadrons,
which was inaugurated as a readi-
ness measure in the summer of 1966,

Sectlift

As discussed earlier in this section,
we propose to build a fleet of Fast
Deployment Logistic (FDL) ships.
The Congress approved funds ($67.6
million) for two of these ships in FY

1966, including $10 million in the FY
1966 Supplemental for the initiation
of contract definition. As I explained
a year ago, actual contracts for these
first two ships are being deferred in
order to permit their inclusion in the
"total package" contract We now
plan to award the multi-year contract
late this fiscal year. Funds for five
FDL's are included in the FY 1968
request. . . .

The FDL's we now propose will be
considerably larger, faster and more
efficient ships than those we origi-
nally envisioned. Two years ago, the
preliminary FDL concept called for
a vessel capable of carrying about
5,600 tons of division equipment and
supplies; the ships we are now con-
sidering will be able to carry perhaps
twice that tonnage and at an esti-
mated increase in the cost per ship
of less than 10 percent.

As I noted earlier in the discussion
of the shipbuilding problem, the FDL
program represents the first applica-
tion of the concept formulation and
contract definition process and the
"total package" approach to ship pro-
curement. The first phase of this
approach, "concept formulation," was
completed in July 1966 when three
contractors were awarded definition
contracts. During the first phase of
contract definition, the competing con-
tractors prepared their initial pro-
posals around Army and Navy per-
formance requirements and standards
instead of detailed ship specifications.
Thus, for the first time, the talents
of private industry are being brought
to hear on the initial design of the
ship. During the second phase of the
definition process, which has just bean
completed, the three competing con-
tractors prepared detailed proposals
for their design and a comprehensive
program plan for their production.
As part of these detailed proposals,
each of the contractors has developed
plans for a new shipyard or modern-
ization of an existing one, Any one
of these, in terms of efficiency, would
be far superior to the existing U.S.
yards and in terms of design and

layout would he equal to the beat of
the foreign yards.

We are now in the last stage of
the definition process, i.e., bid evalua-
tion and source selection. , . .

The three Victory-class cargo ships
which had been used as forward
mobile depots since FY 1963 hnvo
been temporarily converted to point-
to-point service in support nf our
current effort in Southeast Asia. Out"
plans now call for retaining those
ships in this role through the end of
FY 1908. Subsequently, with the end
of the Vietnam conflict, wo would ex-
pect to return them to thoir forward
mobile depot role and add morn ships
for this mission. The Victory ship
fleet would be retained until u suf-
ficient number of the more elllcu'nt
FDL's became available in FY 1972.

During FY 1906, MSTS operated
in the nucleus fleet an additional gen-
eral purpose cargo ship to help meet
the increased requirement. 1 ! of our
Southeast Asia operation. Tenta-
tively, we now plan on retaining' this
ship through FY J.968, after which
tho active general purpose cargo fleet
is scheduled to decline. Another minor
change in last year's planned deploy-
ments resulted from the fact that one
roll-on/roll-off ship which hud boon
expected to enter service in May or
June li)(i(i 1ms been delayed.

With respect to special purpose
cargo ships, the temporary Vietnam
augmentations which I described a
your ago have now been extended
through FY l!)<iK. In addition, MSTS
will operate 13 more LST's in FY
1967 than envisioned last year mid 14
more through FY 1968. After FY
19G8, the special purpose cargo fleet Is
tentatively scheduled to return to the
pro-Vietnam level. . . .

Financial Summary

The Airlift and Senlift Forcna I
outlined will require Total Ohlign- i
tional Authority of $1.0 Milton , In
FY 19G8. A comparison with prior
years is shown below:

1962 1963

T * i /MI- *. , Actual Actual
lotal Obligational Authority 11 11

($ Billions, Fiscal Years)
1964 1965 1966
Actual Actual Actual
1.2 1,4 1.7

1967 10B8
Est. Proposed
1.6 1.0

February 1967

Included in this major program are
all the research and development ef-
forts not directly identified with weap-
ons or weapon systems approved for
deployment. We have made a special
effort again this year not only to cull
out marginal projects in the research
and development program, but also to
defer to future years all projects
whose postponement would not have a
serious adverse effect on our future
military capabilities. But even while
wfi have eliminated, reduced and de-
ferred projects in some areas of this
program, we have had to add, in-
crease and accelerate projects in other
areas, to meet new needs growing out
of the conflict in Southeast Asia and
the military situation generally.

Last year I described Project PRO-
VOST (Priority Research and De-
velopment Objectives for Vietnam
Operations Support) which we had
established to ensure that the re-
search and development program re-
lated to limited war situations,
which had been accelerated in prior
years, would be wholly responsive
to the more specific requirements
of our forces in Southeast Asia. As a
result of PROVOST, projects totaling
about $370 million were identified as
having significant potential for Viet-
nam operations and were singled out
for priority funding in FY 1966. Dur-
ing 1 the past year, the test of combat
in Vietnam has revealed a number of
areas where still more effort appears
warranted. These newly identified re-
quirements have been an important
Influence in the formulation of our
FY 1968 request. However, most of
this work should be started promptly,
and thus also concerns the current
year's research and development pro-
gram. While a portion of it has been
financed by reprogramming or use of
emergency funds, we have had to
request an additional $135 million for
research, development, test and evalu-
ation (RDT&E) in the FY 1907 Sup-
plemental.

Broadly speaking, the projects
funded in the Supplemental can lie
grouped into three main categories.
The first is concerned with improving
the ability of our forces to fight at
night. The second is concerned with
reducing our aircraft losses. The third
is concerned with the development of

improved counterin filtration systems.
As described later, the proposed FY
1968 program provides for additional
effort in all of these areas. . , .

Before T turn to the specifics of the
FY 1968 Research and Development
program, there are two general areas
which might usefully be discussed as
entities rather than in terms of the
separate projects which they com-
prise. These are nuclear testing and
test detection, and space development
projects.

Nuclear Testing and Test
Detection

As you know, the Defense Depart-
ment, in cooperation with the Atomic
Energy Commission (AEC), is main-
taining four specific safeguards with
relation to the Test Ban Treaty. For
the Defense Department's portion of
this program, we have budgeted a total
of $255 million for FY 1968, compared
with $224 million in FY 1967 and
about $238 million in FY 1966, as
shown on the classified table provided
to the Committee.

In support of the first safeguard
the underground test program we
have included $49 million in the FY
1968 Budget, compared with the $33
million provided in the FY 1967 pro-
gram. . . .

In support of the second safeguard
maintenance of modern nuclear labora-
tory facilities and programs in theo-
retical and exploratory nuclear tech-
nology our FY 1968 Budget includes
$63 million as compared with the $53
million in FY 1967. . < .

The FY 1968 Budget includes about
$27 million in support of the third
safeguard the maintenance of a
standby atmospheric test capability
about the same as PY 1967. . . ,

In support of the fourth safeguard
the monitoring of Sino-Soviet nu-
clear activities we have included a
total of $116 million in the FY 1968
Budget, compared with $111 million
in FY 1967. We conduct two principal
programs to support this safeguard
the Advanced Research Project
Agency's VELA program and the
Atomic Energy Detection System
(AEDS).

. . . The FY 1968 Budget includes $50
million for VELA activities. . . .

The present Atomic Energy Detec-
tion System (AEDS), designed to de-
tect and identify nuclear detonations,
now represents a facilities investment
of about $85 million. . . .

About $68 million was provided in
the FY 1964-67 budgets for this effort
and $16 million is included in the FY
1968 request. An additional $46 million
will be needed in PY 1968 for the
EDT&E and operating costs of the
system.

Space Development Projects

While the various elements of the
Defense Department's space effort are
spread, on a functional basis, through-
out the program and budget struc-
tures, I believe this effort can be more
meaningfully discussed as a separate
entity.

The Defense Department's program
is, of course, wholly integrated into
the larger National Space Program,
expenditures for which now total over
$7 billion a year. The Defense portion
is designed to maximize the utilisation
of space technologies and environ-
ments for defense purposes, e.g., to
apply space technologies and capabili-
ties to our strategic and tactical
weapon systems to increase their effec-
tiveness, to exploit the new potentials
in information systems made possible
by satellite -based communications and
sensors, and to explore the usefulness
of manned space systems for defense
purposes. . . .

In total, about $1,998 million of our
FY 1968 Budget request is for the
space prog-ram, $328 million more than
in FY 1967.

Spacecraft Mission Projects.

By far the largest project in this
category is the Manned Orbiting
Laboratory (MOL), for which we are
requesting $431 million in FY 1968. . . .

A total of $83 million is requested
in FY 1968 to continue work on De-
fense Satellite Communications pro-
grams and to procure, operate and
maintain satellite communications
equipment. . . .

Of the $83 million requested for
Satellite Communications programs in
FY 1968, about $17 million is for the
development, procurement and opera-
tion of Army ground terminals; $13
million is for Navy shipboard ter-
minals; and $49 million is for A"-'
Force space subsystems, airborne tor-

Defense Industry Bulletin

nmial:- 1 , launch vehicles, and the costs
<>f iir.M'urim,' and hiunching new satel-
lite, (11 addition, 3 million is for the
Di'fcnsf* Communications Agency for
overall sj-Ktenis engineering and man-
aftt'mi'iit direction.

I have already discussed the
next itr-rn, "Nuclear Tost Detection
(VKF.A)," in connection with the Test
Han Treaty safeguards. The FY 1968
nml^ot includes about $8 million for

W> are requesting 18 million for
the Navy's satellite navigational sys-
t.--m

R^onrch and development funding
for tlie anti-satellite system program
lias hoe-n completed. The funds re-
quested for FY 1968 will provide for
the normal operating costs of the sys-
tem.

The funds requested for space
"Gendcay" will support programs by
each of the Services as well as the
Department of Defense's participation
in the National Geodetic Satellite
Program

for the sensors) and other navigation
components, which will then be flight
tested.

The "Large Solid Propellant Motor"
project was undertaken to create the
technology base required for the de-
velopment of missile or launch vehicle
engines up to 156 inches in diameter.
Funds already provided will be suf-
ficient to complete the remaining' tasks,
i.e., demonstrations of a low cost noz-
zle, an advanced thrust vector control
system, and a self-eject launch con-
cept.

The next item, "Advanced Liquid
Rocket Technology" comprises three
projects: advanced storable liquid
rocket technology; high performance,
cryogenic liquid rocket technology;
and maneuverable space rocket tech-
nology. , . .

tions of the costs of a witlo range of

space-related activities. . . ,

Research

Vehicle, Engine and Component
Developments.

The Titan III family of space
boosters has begun to enter the op-
erational inventory. The first Titan
"IB (Agena configuration) was
launched last July and production is
now proceeding. The Tital me has
bwn in the flight test phase since
Jne 1965 and is being used to launch

Si i ? , n? efenM Co ""ication a
Satellite, VELA, Tactical Communica-
tions Satellite, and multiple engineer-
ing payloads.

The funds requested for "Agena D
mil continue work being initiated this
year to increase the capability of the

im A f "? D for the ^ier
satellite payloads now projected.

The funds requested for "SnacV

craft Technology and Advanced Re .

entry Tests (START)'" will complete

the present phase of this program.!?

ine funds requested for "Advanced

Space Guidance" will support an n

omg program of sMdies, expe

and equipment Development in

areas as long-term accuracy and

Ability of inertia, guidance c

nente. horizon sensors and star and

andmark trackers, and on-board

ernnnation of astronomical data

autonomous navigation. The FY 19 fiR

program includes procurement of an

mertial reference unit (which will

SerVe M " hrtnmwntaHan standard

Other Defense Activities Supporting
the Space Program.

The Ground Support category shown
on the classified table supplied the
Committee is that portion of tho costs
of the missile range, test instrumen-
tation, and satellite detection and
tracking systems which is charged to
space activities. The largest item in
this category is the $132 million for
the Eastern Test Range.

... The FY 1968 request includes
834 million for support of SPACE-
TRACK and $5 million more for
bPASUR, for a total of $39 million.
( Ine $57 million requested for the
Satellite Control Facility" is for op-
eration, maintenance and modification
of the military space vehicle support
network which provides satellite track-
ing, command and data handling, as
required by the major Defense space
programs. ...

The last two categories on the table
Supporting Research and

,, fi'^J. u, UUI1HL1-

the overhead of the military space
Program and consi st of prorated por!

Last year I discussed in
detail tho problems involved in
nixing and managing 1 a Hescarch pro
gram consisting- of morally thousand*
of individual tasks and projoclii, inns!
of which require* relatively wrnilll
amounts of money for thoir mijiporl.
I pointed out that bnt-auHR of tho liir^c
number and rolattvoly smnll dnlliu 1
value of thosn projiicta, wts lirui lo
manage the program from my ofllcn
on^a 'level of ffort" basin, with (In-
objfictive of advancing our IcriowlmlKo
in a balanced imunutr acromi th en-
tire spectrum of 8cinnn and trdi-
nology pertinent to tlui Doff'tinn cIT.ul.
To facilitatn the mnnaR-dituint of Iho
program ami to mmiro Mutt U in
always responsive- to dmiWH in our
fields of intoroHt, I noted Umt wn lnul
organized tho overall offort prJiimrlly
in terms of dtacfpHncR, i.n., iiiiiLcrtiild,
gfineral i)hysics, chemintry, ncoaiiOK-
raphy, etc., and that thn efTort in rurli
discipline was allocatnd itmnnir tln>
components of the Dnimrtmimt on (1m
basis of thoir jtriniary fl<.h| H r,f
interest and compntoncy. . . .

Shown on Figuro 1 in tlin HOHRHIT]!
program proposed for li'Y .1!J(!H, (-oin-
pared with prior yearn. You will notf
that thoro is a Hharj) i-oducitioii in HIM
amount of funds allociitod to MutnrhilH
Roseareh and to a lessor rxtrnt for
In-Houso laboratory Indonnndnnt Up.
search. In both CIWOB, ilu- .miountH of
unobligated and uncxpoiuK'd tmuh
exceed tho levels dictatod by p.-u.loat
managomoiii. Accordingly, thn nmnunC
of new funds requested for FY j^fiR
lias been reduced below the ncLual
program levels which will !, nbmit
the same as in FY 1967.

Manned Orbiting Laboratory

U.S. Air Force Titan IIIC

February 1967

Included in the FY 1968 request for
research is $27 million for the Defense
Department's share of the national
program for developing "New Centers
of Excellence in Science and Tech-
nology". This program, previously
referred to as the "University Pro-
gram" and now called THEMIS, is in
addition to our regular contract/grant
arrangements with institutions of
higher learning and is not a substitute
for them. Rather, the new program is
designed to create, eventually, about
100 new departmental centers of
superior scientific and engineering
competence at universities which are,
at present, poorly supported. Pat-
terned after the Joint Services Elec-
tronics Program, from which signifi-
cant technical advances like the laser
evolved, this new effort holds great
promise of yielding a similar "pay-
off" in the future.

We have initiated Project THEMIS
this year at a level of .$18 million, and
have supplied interested colleges and
universities with detailed information
on our requirements. . . . Additional
centers will be started in FY 1968.

Exploratory Development

Exploratory development is directed
toward the expansion of technological
knowledge and its exploitation in the
form of materials, components and
devices which it is hoped will have
some useful application to new mili-
tary weapons and equipment. Hero
the emphasis is on invention and on
exploring the feasibility of various
approaches to the solution of .specific
problems, up to the point of demon-
strating feasibility with a "bread
board" device and even, in some cases,
prototype components and subsystems.

SUMMARY OF THE RESEARCH PROGRAM

Fiscal Years

(TOA, $

Millions)*

1962 1963 1964

1965

1966

1967

1968

Engineering Sciences

Electronics

Materials

Mechanics

Energy Conversion

Sub-Total

111

116

119

102

Physical Sciences

General Physics

Nuclear Physics

Chemistry

Mathematical Sciences

Sub-Total

Environmental Sciences

Terrestrial

Atmospheric

Astronomy-Astrophysics

Oceanography

Sub-Total

Biological & Medical Sciences

Behavioral & Social Sciences

Nuclear Weapons Effects Research

In-House Independent Lab. Res.

University Program (THEMIS)

Other Support

Total Research

339 351 346

383 391

416

409

* Amounts will not necessarily add to

totals due to rounding,

Figure 1.

Defense Industry Bulletin

Along with research, exploratory de-
velopment forms the technological pool
from which future equipment will be
designed.

The more than 800 individual ex-
ploratory development projects repre-
sent about 15 percent of the cost of
the entire RDT&E prog-ram, with the
average project requiring ahout $1.3
million annually. About 40 percent of
exploratory development work is con-
ducted by our "In-house" laboratories,
50 percent is contracted to industry,
mid the remaining 10 percent is per-
formed by educational and non-profit
institutions. A recent study of the
origin of weapon system performance
improvements has shown that almost
all have resulted from Defense sup-
ported technological advances and very
little from other sources.

As shown on the classified table; pro-
vided to the Committee, wo are re-
questing' a total of $988 million for
exploratory development in FY 1968,
$Gf> million less than the revised esti-
mates for FY 1967.

Army.

For the Army's exploratory de-
velopment program, fpfilfi million is ro-
qucKted for FY 1908, somewhat leas
than the level planned for FY 10(17.

In the areas of electronics and
communications,, the development ef-
fort includes: small rugged Held
operated digital data processing
equipment; communications equipment
having increased traffic handling and
improved anti- jamming capabilities;
devices for rapid, positive and auto-
matic recognition and identification
among 1 friendly surface units and be-
tween them and their supporting air
units; new sensors for airborne and
ground surveillance and target acqui-
sition of enemy units on the battle-
field; communication sets and variable
time fuzes; night vision devices ;
improved solid state, thermionic and
frequency control components common
to a variety of equipments; etc.
Efforts in the ordnance category in-
clude work on weapon systems for
Army helicopters, the improvement of
missile components, and development
of conventional ammunition, weapons
and explosives.

In the materials category, the- Army
is concerned with the development of
new metals, ceramics, plastics and
composite materials which cnn im-
prove its firepower, mobility, armor
and communications, with particular

IXf-f.' Vote??. , . . SAM-D is now in
contract definition phase which will
In; cf))ji|ili;tp(I this spring. We will then
have to dceMf whether to proceed <li-
ivc'My with development of an into-
Ki';it''<i .^y.-tf-rn suitable for direct
npc-rjitinnal (iojiloymont, to limit de-
velopment to a prototype system for
fallibility dtmonsti-atioii, or to return
in cotKvjit formulation. The second
option wc.uM provide additional time
tn incorporate still more advanced
technology arid lead to demonstration
t<-?tH. Thi- first option would lead to
full ?pmce tests. The funds requested
will support any option. The major
rcniaininK task is to integrate into a
working model a number of compo-
nents, the feasibility of which has
already been verified on an individual
basis. The SAM-D program is closely
related to the Navy's Advanced Sur-
facc-to-Air Missile .System Program
and the development of the respective
subsystems and components is being
fully coordinated by the two Services.
The ?fi million of "DOD Satellite
Communication, Ground" covers the
Army's portion of the Defense Satel-
lite Communications programs, which
were discussed earlier.
H The $20 million requested for
"Nike-X Advanced Developments"
will finance development of those ad-
vanced components whose lead times
would not permit their incorporation
m an early deployment of the system
This work fills the gap between the
engineering development effort and
the development of completely new
hardware for possible use later.

The $5 million requested for "Anti-
tank Weapons" will provide for the
evaluation of new anti-tank missile
concepts. Present efforts arc directed
towawl identifying those system

characteristics which together seem to
offer the best chance of achieving an
effective low cost anti-tank weapon.
The funds requested for the "Lieht-

we,ght Howitzer- W ili support the de-
velopment of a 155mm self-propelled
^apon. Development of the system is
tame coordmated within NATO, with
U* Umted States, France, Ger'njy
and _ Canada all participating in de .
"Sning the ammunition.

"Limited War Uboratoiy/'lop
fl million is requested in FY
968 ls the Anny's quick reaction
^arch and development facility for
countermsurgency operations. . . .

The "Therapeutic Developments"
program was initiated in calendar
year 19fi5 in response to the drug--
resistant falciparum malaria which
was causing such a serious problem
for our forces in Southeast Asia. The
$11 million requested will continue the
development and testing of new anti-
malarial drugs. . . .

The next item, $12 million for
"Power System Converters," consists
of four major categories of projects
directed toward the development of
engines, transmissions, final drives,
and related coinponents for combat
and tactical vehicles. These categories
are: power conversion for track and
wheel vehicles; multi-fuel, variable
compression engines; spark ignition
engines; and rotary combined cycle
power systems.

The funding requested for "Night
Vision" reflects the increasing im-
portance of night operations in mod-
ern warfare. Among the many types
of equipment now under development
are starlight scopes, small portable
radars and special gog-gles.

The last item on the Army's list,
"Airborne Surveillance and Target
Acquisition," is also in large part con-
cerned with the problems of night
operations. One of the major efforts in
this program is aimed at providing a
better night reconnaissance capability.

Navy.

The first item on the Navy's list,
"V/STOL Development," represents
the Navy's current participation in
the tri-Service V/STOL program pre-
viously described.

The next item, "Airborne Electronic
Warfare Equipment," for which funds
are requested, i s a multi-project
effort aimed at developing active (jam-
ming) and passive (signal intercep-

tion) electronic warfare equipment i
quired by the Navy,

The "Advanced Surfaco-to-Air Mi
sile System (ASMS)" is tho now nut
mated integrated air defense HVKL
being developed as a jiossiljlfi ropltir
mcnt for the Torrier-Turtar-'l'iih
(3-T) systems. ... AH inontioiidit pre-
viously, we are seeking in this d<wHo|
inent to maximize! thn us of the U-eJ
nology, component;; and Nulwy.4l.vi>
developed for tho Army's HAM-1) K yi
tern. As a result, tho ASMS pro],' nil
must lag behind tho HAM-1) duvrloj
ment by about one year. With (h
completion of SAM-U contrm-l dt-Ihii
Won in this fiscal year, wci will In- iilil
to decide which elements should h
used on both HyHtnniw. Thin will ultciv
us to initiate ASMS contriicl di-fniiLioi
by lato FY 19fi8.

The funds rcqucHtad for tlm "Ad-
vanced Point Dnfmimt Sui-fnct! Minnilt
System (Advanced P1XSMS)" pronnur
will support the dnvnlnpmont o(' 11 re-
placemont for thn lln.sic Point M.-fi'iiM'
System (modified Sparrow III) now
being deployed. . . . Thin dcvHuimu-nt
is being closely coordinultMl wJLh thn
Army's Advanced Forward Arii Air
Defense System (APAADK) pru
to maximize tho common nun nf
nology and comptmnnt.1. 'J'h twuli n--
questod will supporl; conli-iHrt dclhit-
tion of tho Advanced PDSMS iu ]-'Y
1068,

The funds requested for "Advncc4l
ARM Technoloffy" will Hiipporl ]m*~
liminary dovclopniont wurk on ad-
vanced anti-radiation minnilofi.

The funds requnntnri for Lho 'T.unil-
ing Force Support W<mpon (I.KSW)"
will comploto foaHihillty tustln^ of tbf
Army Lanco missile adapted to n MINI-
borne role for support of mnpliiliiniiM
assault opcrationa. , , .

Tho "Augmented Thrust 1'ropul-
won" program, for which fundu nro

Starlight acone developed for
night viewing.

February 1967

requested in FY 1968, seeks to ad-
vance propulsion technologies for both
strategic and tactical missiles in order
to increase payload and/or range.

Grouped under "Astronautics" are
several Navy programs, which I de-
scribed earlier, relating to satellite
communications and the potential use
of navigation satellites by the tactical
forces. We are requesting a total of
$6 million for these programs in FY
1968.

The next group of items under Navy
advanced developments are con-
cerned with antisubmarine warfare
(ASW) and the deep submergence
program. The PY 1968 Budget in-
cludes a total of $356 million for ASW
RDT&E, $126 million in advanced
developments.

The first item, "Advanced Undersea
Surveillance", includes three ASW
surveillance projects.

The next two items involve the
development of new sonars. The first,
the "Advanced Submarine Sonar"
program, consists of three efforts: a
new submarine sonar, investigations
in submarine acoustic communications,
and the testing of a sonar for deep-
diving auxiliary submarines. The
"Advanced Surface Sonar" program
provides for the development of a pas-
sive/active sonar to detect, localize,
classify and track submarines (PAD
LOG). . . .

The next item, $42 million for the
"Deep Submergence Program", is one
of the more important efforts in terms
of its potential impact on future Navy
programs. This program consists of
threo separate but closely interrelated
projects.; the Deep Submergence Sys-
tem Project (DSSP), Deep Research
Vehicles (DRV), and Deep Ocean
Technology (DOT)

No further funding is requested for
the "Combined Gas Turbine Propul-

sion" program, pending further study
of the results achieved to date.

The "Active PLANAR Array Sonar"
is concerned with the development of
an experimental integrated ship sonar
system. . , .

The "ASW/Ship Integrated Com-
bat System" consists of two efforts:
ASW Command and Control, and

ASW Integrated Combat System
(ICS). . . .

The next item, $13 million for "Re-
actor Propulsion Plants," will consist
of three concurrent efforts in FY
1968: the development of a "natural
circulation" power plant, a small com-
batant ship reactor, and a more pow-
erful reactor for use in aircraft car-
riers. . . .

The "Advanced Surface Craft" con-
sists of advanced development projects
for three different types of surface
ships, for which a total of $1.0 million
is requested in FY 1968. The first
effort, "Surface Effect Craft" (e.g.,
air cushion vehicles and captured air
bubble ships), is to acquire the tech-
nology and design capability needed
to build large high-speed "surface
effects" ships. ... In the second effort,
"Hydrofoil Craft", we have built a
110-ton, 45-knot patrol craft (PCH)
and have a 300-ton, DO-knot hydrofoil
auxiliary ship (AGEH) over 90 per-
cent complete. . . . The third effort,
"Landing Craft", is concerned with
the development and test of high speed
amphibious and assault landing craft
concepts. . , ,

Air Force,

The first five items on the Air Force
list of advanced developments are all
part of the V/STOL technology pro-
gram which was discussed earlier.

Last year, we programmed $3 mil-
lion for PY 1967 to support prelim-
inary work on a new "V/STOL
Assault Transport." We have recon-

Deep Submergence Rescue Vehicle

Navy Patrol Air Cushion Vehicle

sidered the requirement for this type
of aircraft and decided that it is pre-
mature to settle now on a specific
design. Therefore, the project has
been renamed "Light Inter- theater
Transport" and will be concerned with
the development of a new aircraft to
replace eventually the CV-2 (Cari-
bou) and similar small transports.
The $2 million requested in FY 1968
will be used for preliminary study of
possible designs including V/STOL
aircraft.

The FY 1967 funds for "V/STOL
Aircraft Technology" will, as previ-
ously described, support contract
definition of a new V/STOL fighter
aircraft, a project jointly financed
witli the Federal Republic of Germany.

No further funding- is required for
the next item, "Lightweight Turbo-
jet," which was principally concerned
with demonstrating light turbine en-
gines for V/STOL aircraft.

The $3 million requested for "Trl-
Sorvicc V/STOL" development will
continue operational testing of the
XC-142A aircraft, as I noted earlier.

The next item, $20 million for
"V/STOL Engine Development," will
provide for the continued work on two
engines, a direct-lift engine and a
lift/cruise engine or for forward pro-
pulsion. . . .

The next two items, "Ovcrlaml
Radar" and "AWACS," were men-
tioned previously in connection with
their potential application to future
continental defense against liomber
attack. . . . The funds requested for
the "Overland Radnr" program in FY
1968 will support continued flight test-
ing of radar techniques for detecting
and tracking airborne targets over
land in the presence of severe ground
clutter and provide for development
of components for still more advanced
radars for future generation air early
warning systems. No additional fund-
ing is requested for AWACS in FY
1968 inasmuch as the radar evaluation
is not yet far enough along to warrant
going forward With contract defini-
tion during FY 1968. However, funds
will be available to support continued
concept formulation of the "AWACS"
system and contract definition if prog-
ress on the program indicates this an
the logical next step.

The next item, "Advanced Avionics,"
is concerned with improving the night
and bad weather attack capabilities
of tactical aircraft. Work will be con-

Defense Industry Bulletin

ctf'd on visual sensors, weapons de-
livery subsystems, navigation equip-
ment (doppler, inertia], loran), and an
integrated nidome- radar for rccon-
n;ii-.-;uice fighters. . . .

Tin; funds requested for "Penetra-
tion Aids for Tactical Fighters" will
support continued work on devices and
tt-chnnnies for existing tactical air-
craft to tMiable them to operate suc-
nwfully in hostile radar-con trolled
Kim and surface- to-air missile environ-
ments. . . .

The funds requested for "Tactical
Air-to- Ground Missile (Maverick)"
would support contract definition and
initiation of engineering development
in FV 10fi8 of a new TV-guided air-
to-surface missile.

For "Conventional Weapons" de-
velopment, 5 million is requested in
FV 1968. These funds will finance a
number of projects designed to dem-
onstrate the technical feasibility of
advanced conventional munitions and
air delivery systems, various carriage
and release mechanisms, fuzing tech-
nology, etc.

The S8 million requested for "Flight
Vehicle Subsystems" in FY 1968 will
support advanced development effort
in t\vo areas vital to future aircraft
design. The first project consists of
collecting and analyzing air turbulence
data with the objective of improving
the design of aircraft structures and
control equipment. The second project
is concerned with demonstrating the
ability of current flight control tech-
nology to reduce the effects of wind
gusts, aircraft maneuvers, etc., par-
ticularly in low-level flight, in order
to increase structural life and crew
efficiency.

The $8 million for "Advanced ASM
Technology" will support a program
designed to provide a technical foun-
dation for new and improved tactical
air-to-surface missile guidance sys-
tems. The largest single project in-
volves a new approach to the all-
weather guidance problem.

The ?3 million requested for the
"X-15 Research Aircraft" program
will complete in FY 1968 all of the
Defense Department sponsored experi-
ments now planned. Subsequently,
NASA will assume full responsibility
for funding the X-15 test program.

The next item, "AMSA" will re-
quire ?26 million in FY 1968 (The
J11.8 million added by the Congress
for FY 1967 will be applied to the

FY 1968 program). In FY 1968, we
plan to carry on development of an
engine that could be used in this and
other advanced aircraft. Additional
funds will be required for system
integration of the avionics and to
allow the airframe contractors to
accommodate their designs to the en-
gine development.

The 8 million requested for "Ad-
vanced Filaments and Composites"
will support further work in develop-
ing new high strength, lightweight
materials for use in aerospace struc-
tural and propulsion systems, . . .

The next item, "Advanced ICBM
Technology," has now been reoriented
from a "general" technology effort to
the specific support of projects most
likely to aid in the selection of sub-
systems for the possible new ICBM
discussed earlier.

No additional funding in FY 1968
is requested for the next item, "Stel-
lar Inertial Guidance." The PACE II,
a highly precise inertial navigator de-
veloped with prior year funds, is now
in its evaluation phase which is ex-
pected to extend into FY 1968. After
review of these test results, future
follow-on efforts will be determined.

A number of the other Air Force
advanced development items are space
projects which I discussed earlier.

Engineering Development

This category includes those projects
being engineered for Service use, but
which have not yet been approved for
production and deployment.
Army.

A total of $422 million has been
included in the FY 1968 Budget to
continue development of the Nike-X
on a high priority basis, as discussed
in Strategic Forces section of this
statement.

One of the Army's major research
and development program objectives
is to have a number of ground force
weapon systems in various stages of
development at all times. The next
item, "Firepower Other Than Mis-
siles," for which $49 million is re-
quested, constitutes the bulk of the
Army's effort in this area and is di-
vided into three main categories: "In-
dividual and Supporting Weapons;"
'Field Artillery Weapons, Munitions
and Equipment;" and "Nuclear Muni-
tions."

The largest project in the first cate-

gory is the Medium Anti-tank Weapc
(MAAW), a shoulder-fired 14.5-1
missile (28 Ibs. including taunchci
with a shaped charge warhead. . .
Other projects in the Individual an
Supporting Weapons category indue
a series of new ordnance
devices which are being ei
response to Southeast Asia rcquiri
mcnts and a new Vehicle Rapid Fii
Weapon System, to replace tho Cal. B
machine gun and tho interim HS-82
20mm cannon.

Tho "Field Artillery Weapons, Mv
nitions, and Equipment" categor
encompasses tho development o
sophisticated conventional mu n ition
and the resolution of anmiunitio
problems associated with Southcan
Asia.

Tho "Nuclear Munitions" cutcR-or;
covers the development of Army sup
plied components for nuclear projec
tiles and atomic demolition rmmitiom
Present efforts are being dircietcul to
ward an advanced firing device fo:
demolition munitionH, and fuxe.i ant
cases for an improved 155nun artlUorj
round.

The "Aircraft Suppressive Pin
Support System" project, for whirl
$14 million is requested in "PY If) 08
is concerned with the dovolopmonl
and adaptation of weapon nul>Hyntomf
for Army aircraft. . . .

"Other Airmobility Project*!," feu
which $6 million is requested, include
work on aircraft engines, liftlitweffihl
aircraft armor and aerial delivery
equipment.

Tho next item, $9 million for "Sur-
face Mobility," comprises three ef-
forts: "Wheeled Vehicles," "Tracked
Special Vehicles" and "Marine Crnft."
The major project in the flrat cute-
gory will he the initiation of (mfrfnenv-
ing development for the now lU-lon
XM-706 truck as an ultimate replace-
ment for the current M-37 truck in
rear areas. The major project in tho
second category will be a now armored
reconnaissance vehicle capable of op-
erations in adverse terrain and the
"Mechanized Infantry Combat Ve-
hicle-70," a replacement for the cur-
rent personnel carrier. The third
category includes work on shallow
draft boats, a beach discharge lighter,
etc,

The $14 million for "Combat Sur-
veillance and Target Acquisition" pro-
vides for a number of projects. Tho
largest is the TACFIRE system in

February 1967

which automatic data processing and
display techniques will be used to
improve the accuracy, response time
and overall effectiveness of field ar-
tillery firepower. Contract definition
will begin this year, with initiation
of engineering development scheduled
to take place next fall. Other projects
include: improved sensors for the de-
tection and location of enemy person-
nelj vehicles and weapons on the
battlefield; airborne sensors for visual
target location ; a forward-looking
infrared set for helicopters; image
interpretation and photo processing
equipment, etc.

The $21 million for "Communica-
tions and Electronics" provides for a
broad based program to improve the
Army's communication, avionics and
electronic warfare equipment. . . .

Navy.

The first item on the Navy's list
of engineering developments is the
"Medium Range Air-to-Surface Mis-
sile (Condor)", . . .

The funds requested for the "Ad-
vanced Sparrow" will substantially
complete this development.

The next item, "Three-T Systems
Improvements," consists of the en-
gineering work necessary to support
the updating of the three T missiles
(Tartar, Terrier, Talos) through the
development of replacement compo-
nents designed to increase the per-
formance of these systems. The $7
million requested for FY 1968 will
support development of improved
components for the Talos system's
radar.

The $8 million requested for "Un-
guided/Con volitional Air Launched
Weapons" will support engineering
development of a number of munitions
projects: Snakeye II, a second gen-
eration retarded bomb ; Fireye, an
improved fire bomb using new napalm
mixes and improved igniters; a hyper-
velocity tactical aerial rocket ; an
improved 20mm general purpose pro-
jectile, etc.

The next item for which we aro re-
questing funds in FY 1968, "Multi-
Mission Tactical Fighter (VFAX),"
is for concept formulation of an ad-
vanced fighter aircraft. . . . Since both
the Navy and the Air Force may re-
quire such a fighter, we are examining
the feasibility of a joint development
program. Both Services would use a
power plant employing the lift/cruise
engine technology.

The next five items on the list are
all related to undersea warfare
(USW), and total $76 million for FY
1968.

The largest single dollar item in
FY 1968 will be the "ASW Aircraft
Development (VSX)". ... The fund-
ing level proposed will support
continued concept formulation and de-
velopment of long lead time compo-
nents of this system in FY 1908.

The next item, the "MK-48 Tor-
pedo," is designed for use by both sub-
marines and surface ships. . . . The
MK-48 is already under contract,

The funds requested for the "Direc-
tional Jezebel" will complete tho
development funding of a sonobuoy
capable of providing the bearing of a
target directly to ASW aircraft.

The "Other Undersea Warfare
Projects" for which $19 million is re-
quested, include, for example, a ship-
board periscope detection radar, the
development of antenna systems inte-
grated into the submarine's super-
structure, etc.

The "Carrier Based Airborne Tac-
tical Control System (CBATCS)" is
designed to provide a major per-
formance improvement over the pres-
ent system now carried by the
E~2A. . . .

The $1 4 million requested for
"Marine Corps Developments", will
support a number of projects on elec-
tronic systems, weapons and vehicles
for the Marine Corps. Included in this
program are the Marine Corps' por-
tion of joint-service research projects
such as the medium and heavy assault
anti-tank weapons (MAAW and
TOW), which were mentioned earlier
in connection with the Army's re-
search and development program. An-
other project is the development of a
new landing force assault amphibian
vehicle, with equally good heavy surf
capabilities but better land per-
formance than present vehicles. In the
area of electronics, the overall objec-
tive is more reliable and lighter-weight
equipment, e.g., a new lightwelg-ht
battlefield mortar locator being de-
veloped jointly with the Army. Other
projects include an automated system
for integrating air support activities
into the Marine Corps' tactical data
system; improved nuclear, biological
and chemical hazard detection equip-
ment; and a semi-automatic electronic
switching facility for use by tactical
units in Southeast Asia-type environ-

ments all of which are being de-
veloped jointly with one or more other
Services.

Air Force.

Many of the Air Force's engineer-
ing developments have already been
discussed in connection with other
programs.

The XB-70 test program has been
continued following the accident last
Juno, using the one remaining air-
craft. . . . We believe that all of the
truly important objectives of this test
program can ho accomplished with
presently available funds and no
further financing is requested for FY
1068.

Development funding for the next
item, the "J-58 Engine," was com-
pleted in the FY 1907 Budget.

The $20 million shown for the next
item, "Interceptor/Fire Control Sys-
tem/Missile," will support redesign
and engineering work on tho AWG-9
Fire Control System and the AIM-47
Folding Fin Missile, provide funds for
the reconfiguration of the YF-12 test
aircraft for use as a test hod for these
systems, and continue studies on the
possible nse of tho P-lll or F-12
airfranics as a basis for the next gen-
eration of interceptor aircraft. (The
fire control system nnd missile system
work would be applicable to either.)

The next item, "F-4 Improvements,"
reflects the cost of developing the
internal 20mm nose gun for the F-4E.
This gun is currently undergoing test-
ing and no additional funds aro re-
quested for FY 1908.

The $33 million requested for
"MARK II Avionics" will substan-
tially complete tho funding of this
follow-on to the F-lllA's current avi-
onics suit. ... A modified version of
the MARK II will be incorporated in
the FB-111.

The funds requested for the "Ad-
vanced Tactical Fighter (PX)," will
support continued concept formulation
studies on a new air superiority air-
craft for possible introduction into
the force in the mid-1970's. . . .

We are. requesting funds for "Ad-
vanced Ballistic Missile Reentry Sys-
tems," which comprises a wide variety
of efforts to provide new reentry ve-
hicle technology for our strategic
missiles and to improve our defense
penetration techniques.

The $8 million requested for "Nike
Targets" will provide launch site sup-

Defense Industry Bulletin

p-irt at Vnmlpnberff AFB for ABM
t;irgi-t.; launched into the Kwajalein
:in .% mill for outrun Air Force niodi-
fmiti-'jn ilf;\vlo|mic-rit work on the tar-

Th" funds roquestcd for the next
ivtr, "Advanced ICRM," would, as
n-.'Titirmt'ii in the discussion of our
.Stnit'.-'i-'ic Forces, permit initiation of
iT.fitnict ik-finition for a new strategic
infill! ?y.st in FY 1968, if that
[.'ivtvoij to lie desirable. . . .

Tlhi funds requested for the "Ad-
vor.-' 1 Wc-nthcr Aerial Delivery Sys-
tem" will further develop components
t{f':-ipnfi(i to give airlift aircraft the
capability to navigate to, and air drop
pwumf-1 anil materiel at, specific
locations in had weather or at night
without pxternal ground based as-

Thfl rr-maining engineering develop-
ment iU'ms on the Air Force list have
all lir-en discussed in connection with
the Department's space-related proj-
ect?.

Management and Support

Army.

The FY 1968 Budget includes $90
million for the support of the White
Sands Missile Range. Tost programs
are conducted at this range for all the
Services and NASA. Among the spe-
cific projects are the Air Force's Ad-
vanced Ballistic Reentry System
(ABRES), the Navy's new Anti-
Radiation Missile (based on the
Standard SAM Missile), the Army's
Lance, as well as NASA's Aerohee
project. A major effort at this facility
is the range instrumentation program,
now in its third year, which will re-
fine the data collected on the range,
improve the data reduction capa-

bility, and augment the range commu-
nication system.

We are also requesting 44 million
for the Kwajalein Test Site, operated
by the Army. . . .

The $229 million requested for Gen-
eral Support covers the costs of all
Army research and development in-
stallations and activities other than
White Sands and Kwajalein. . . .

Xavy.

The Pacific Missile Range, for which
$68 million is requested in FY 1968,
is responsible for range scheduling-,
communications, weather and meteoro-
logical services, and data reduction in
support of assigned missile and space
launch operations in the Pacific. . . .

The Atlantic Undersea Test Evalua-
tion Center (AUTEC), located in a
deep-sea canyon off the Bahamas, will
consist of three separate test ranges
for weapons, sonars and acoustic sys-
tems. The weapons range became
operational October 1966; the acoustic
and sonar ranges are scheduled for
completion during FY 1967 and FY
1970 respectively. For AUTEC, $18
million is requested in FY 1968.

General Support for other Navy
research and development laboratories
and test facilities not chargeable to
specific programs will require $310
million in FY 1968.

Air Force.

For the Eastern Test Range, $219
million is requested in FY 1968,
approximately $13 million less than
for the current fiscal year. , . . Future
test activities will involve greater
accuracies, larger payloads, and more
complex reentry vehicles as well as
more sophisticated missions. To meet
these more demanding requirements,
the funds included in the FY 1968
request will provide a capability for
collecting improved trajectory evalua-

tion data on new frequencies, Tho
program will also provide for the op-
eration of eight specially instrumented
C-135 aircraft to support the activi-
ties associated with the Apollo pro-
grams.

About $89 million is requested for
FY 1968 to support tho Air Force
Western Test Range which consists
of a complex of range-instrumentation
networks supporting Air Force, Niwy
and NASA launches from Vnnden-
berg- AFH, Point Arguello and Point
MugfU, The program also provides for
the operation of five Apollo .support
ships.

General Support, including "T>o-
velopment Support," will require $fi57
million in FY 1968. This item carries
the major support of tho Air Force
Systems Command and its nation-wido
complex of research, development nnd
test installations, tho construction of
additional research and development
facilities, and other support pro pr ram Ft.
It includes about $85 million for tho
cost of services provided under eon-
tract by organizations such AB RAND,
Aerospace Corporation, and tho Lin-
coln Laboratory.

Emergency Fund

For tho Department o Dofrinm
Emergency Fund, wo are recninatJng
the appropriation of $125 million uml
transfer authority of $150 million, the
same as the amounts provided for
FY 1967.

Financial Summary

Tho Research and Davclopnwii t
Program, including tho develop men 1,
of systems approved for deployment,
will require about $8.0 billion in New J
Obligational Authority for FY 1008,
A comparison with prior yoara Js
shown below:

R&D except systems approved
for deployment

R&D systems approved for de-
ployment

Total R&D

Less: Support from other ap-
propriations

Total RDT&E (TOA)

1,688: Financing Adjustment

lotalRDT&E (NOA)

1962
Act.
4.4

2.6

6.9
-.6

6.3

-.9

6.4

1963
Act.
5.2

2.5

7,7
-.6

7.1
-.1
7.0

(Billions of Dollars)
1964 1965 1966

Act. Act. Act.

6.1

5.4
2.8

7.7
-.6

7,1
-i

7.0

1.9

7.0
-.6

6.5
6.5

5.S
2.2

7.5
-.6

6.9
-.2
6.7

1967

1968

Est.

Proposed

6.4

5.8

2.3

2.4

7.7

8.2

-.5

-.7

7.2

7.5

7.2

'" i

Y.3

1 1

February 1967

In last year's reorganization of the
Five-Year Defense Program structure,
we established four new major pro-
grama which, for purposes of this
presentation, have been grouped to-
gether in this section,

Specialized Activities

Specialized Activities comprise those
elements of the Defense Program
which are directly related to the mis-
sions of the combat forces in the
Strategic, General Purpose and Air-
Hft/Sealift Forces Programs, but
which for purposes of management
are more logically handled within the
context of homogeneous functional
groupings of similar or complemen-
tary activities.

National Military Command System.

The National Military Command
System (NMCS) is the primary sub-
system of the World-wide Military
Command and Control System. , . .

The NMCS comprises the National
Military Command Center (NMCC)
at the Pentagon, the Alternate Na-
tional Military Command Center
(ANMCC), the National Emergency
Command Post Afloat (NECPA), the
National Emergency Airborne Com-
mand Post (NEACP), and the vari-
ous communications networks linking
these command facilities, the unified
and specified commands and Service
headquarters.

As part of our continuing effort to
improve the NMCS, we have ex-
panded the automatic data processing
capability at the NMCC to handle
the increased workload related to
Southeast Asia operations and to pro-
vide support for the newly created
Strategic Mobility staff in the Office
of the Joint Chiefs of Staff. The FY
1968 Budget request provides funds
for the further improvement of the
data processing system, the informa-
tion displays, and the related facilities
and equipment. . . .

Communications.

The communications category in-
cludes both the Defense Communica-
tions System (DCS) and certain non-
DOS communications operated by the
Military departments, . . .

Other Specialized Activities.

The Specialized Activities pro-
gram also includes the overseas ad-
ministration and grant aid portions
of the Military Assistance Program,
and such other mission-related activi-
ties as weather service, oceanography,
aerospace rescue and recovery, etc.

Because the Military Assistance Pro-
gram is not included in the legisla-
tion being considered at this time, only
the last category of activities will be
discussed here.

Weather Service. The Air Force
and Naval Weather Services collect,
analyze, predict and disseminate, glo-
bally, meteorological and geophysical
information for the support of mili-
tary operations, NASA's space pro-
gram (including manned space vehicle
reentries and recoveries), research
and development missile test firing's,
and they conduct hurricane and
typhoon tracking and forecasting, and
collect nuclear debris air samples for
the AEC in connection with the test
ban treaty safeguards, . . .

Oceanography. This categoiy com-
prises the activities of the Navy's
Oceanographic Office, Defense support,
of the National Oceanographic Data
Center and their related research air-
craft and survey ships. . . . During- the
coining fiscal year, the Navy will sig-
nificantly expand its oceanographic
effort. For example, in the "broad
ocean survey" program the range of
data collected will he greatly in-
creased.

At the end of FY 1966, nine ocean-
ographic research and survey ships
(three manned by Navy crews and six
operated by MSTS) and two environ-
mental production research airci-aft
were employed in the program. Seven
of these are converted World War II
ships but the other two are new ocean-
ographic survey ships (AGS's) which
entered the force during- FY 196G. In
FY 1967 two more new ships ocean-
ographic research vessels (AGOR's)
will be commissioned, increasing: the
force to 11 ships and making: possible
an expansion of the program. The
AGS funded in FY 1967 should enter
service in FY 1969. No new ships are
being requested in FY 1968 for this
"operational" progi'am, although two
oceanographic research ships are in-
cluded in the budget for the Research
and Development program with which
this survey effort is closely integrated.

Air Rescue and Recovery. The air
rescue and recovery program com-
prises the Air Force Aerospace Rescue
and Recovery Service (ARRS), cer T
tain specialized forces of the Navy,
and certain assigned forces of the
Army and Marine Corps. . . .

... To provide increased air crew
recovery capability in Southeast Asia,
additional ARRS helicopters will be
procured in FY 1967 and FY 1968.

Traffic Control, Approach and
Landing System. The Traffic Control,
Approach and Landing System (TRA-
C'ALS) element encompasses those
"common system" air traffic control
facilities not provided by the Federal
Aviation Agency. . . .

There are two prominent current
programs. The first, the AIMS Pro-
gram, is concerned with the addition
of the Air Traffic Control Radar Bea-
con System, which provides positive
identification and location of aircraft
to all air traffic control radar facili-
ties. The second is concerned with the
replacement of current VHF and
UHF air-ground-air communications
systems in order to meet the more
stringent requirement of 60 kilocycle
spacing between channels in accord-
ance with our agreements with other
members of the International Civil
Aviation Organization.

Nuclear Weapons Operations. This
element covers the activities of the
Defense Atomic Support Agoncy
(DASA) which provides specialized
staff assistance to the Secretary of
Defense and the Joint Chiefs of
Staff; operational, logistical and train-
ing- support for the Military Services;
liaison with the Atomic Energy Com-
mission on weapons development and
the planning and conduct of weapons
effects tests; and management for thn
national atomic weapons stockpile.
The nuclear weapons effects tests,
themselves, as well as nuclear weap-
ons research, are included in the Re-
search and Development program and
were discussed earlier. DASA's con-
struction program for FY 1968 in-
cludes further shoreline protection
work at Johnston Island.

Logistic Support

Logistic support comprises a wide
variety of activities which cannot be
readily allocated to other major pro-
grams or program elements. Included
under this heading are the costs of
moving passengers and carriers, the
Military Sea Transportation Service,
the Military Airlift Command and
contract airlift; purchasing;, storing
and inspecting materiel; those parts
of the industrial preparedness pro-
gram (e.g., the provision of new in-
dustrial facilities and the maintenance
of reserve facilities and equipment)
not identified with elements of other
major programs; and the major over-
haul and rebuild activities for items
which are returned to a common stock
and cannot, therefore, be related di-
rectly to specific military forces or
weapon systems.

Defense Industry Bulletin

Personnel Support

Thfi Personnel Support Program
comprises the training, medical and
other activities associated with per-
rfirinol, except for thoso portions of
such activities which are integral ele-
ments of another program. . . .

Training.

Tho Defense Department's training
establishment constitutes a vast and
varied system, including at least 83
major military installations, designed
to meet not only peacetime needs for
militarily trained manpower, but also
to provide the potential for rapidly
expanding this force in periods of
mobilization. Our total capital invest-
ment in these facilities exceeds $4.8
billion and annual operating costs run
over $1.5 billion. On the average,
nearly one-fifth of the active force is
assigned to these centers at all times,
either as part of the permanent train-
ing staff or as trainees. The rising
cost of training in the FY 1966-68
period directly reflects the rapid
buildup in the size of the military
establishment.

Recruit Training. Recruit training
(i.e., "basic" or "boot camp" train-
ing) is given every new enlisted serv-
iceman to facilitate the transition
from civilian life, to inculcate neces-
sary standards of conduct and disci-
pline, to provide initial weapons
training, to ensure adequate physical
conditioning and to foster motivation
and Service esprit. In total, recruit
training loads are expected to decline
slightly in FY 1968, following the
rapid rise in FY 1966-67. We now
estimate that about 920,000 men will
enter basic training next year com-
pared to about 995,000 now estimated
for FY 1967. . . .

The FY 1908 request includes funds
for two major expansions of basic
training facilities. Tho Air Force
Plans to add 5,400 additional barracks
spaces at its Lackland Military Train-
ing Center in Texas and about $17
million will be needed for this nur-
pose in FY 1968. Construction of a
third Navy Recruit Training Center

Tvn - S f , the former Orl ando
A*B m Florida (which was previ-
ously transferred to the Navy for use
as a training devices center in 1964)
was initially funded in the FY 1967
Budget and $21 million more is re-
quested in FY 1968.

Technical Training. The Military
Services tram enlisted personnel for

about 1,600 separately identifiable oc-
cupational specialties. . . .

Professional Training. Professional
training encompasses primarily post-
graduate level education in military
and civilian schools, including medi-
cal training.

Among the military schools are the
several Service command and staff
colleges, the Service war colleges and
the joint Service colleges. Each year,
over 4,000 students, including foreign
military officers and U, S, Government
civilians, are educated at these insti-
tutions. . . .

Flight Training. Flight training ia
the most expensive type of instruction
given by the Defense Department, in
large part because of the very heavy
investments required in trainer air-
craft and facilities. Three factors
have now combined to compound our
flight training problem; the large
numbers of World War II-trained pil-
ots who are now coming to the close
of their flying careers; the rotation
requirements of the Vietnam conflict;
and the rapidly increasing size of the
Army's aviation program, To meet
these increased pilot requirements,
the FY 1968 Budget includes funds to
increase the number of pilots being
trained by the Services to an annual
rate of approximately 13,500. Actual
pilot production will not reach the
higher authorized levels in FY 1968,
however, since it takes up to 18
months to train a pilot. , . .

In the Air Force, the planned an-
nual output of pilots has heen in-
creased to 3,492 compared with 2,966
in FY 1967 (including jet pilots
trained for the Military Assistance
Program). To help handle this in-
creased training load, a ninth under-
graduate pilot training operation will
bo opened at Randolph AFB,

The new planned Navy annual pilot
production rate is about 2,625 pilots
(including 100 for the Military As-
sistance Program and U. S. Coast
Guard), compared with about 2,200
previously in FY 1967. Of the 2,426
earmarked for the Navy and Marine
Corps, about 946 will be trained for
jet aircraft, 830 for propeller aircraft
and 650 for helicopters.

The Army's planned pilot produc-
tion has been increased to 7,500 pilots
per year (including 180 for the Mili-
tary Assistance Program), compared

w:h about 3,700 in the original FY
1967 Budget. About 90 percent of the
new Army pilots will be trained for
helicopters, up from about 60 percent
FY 1966. The Army will oornmTs-

sion about 75 percent of its new pilot
as warrant officers since their posl
tions do not involve command n;npon
sibilities. To help hand In the large
training loads in FY 19G8, Hunte
AFB in Georgia (which wu-s Hchcd
uled to close in July 1907) hna beei
assigned to the Army and the jircKon
flight training program at Fort Wol
tors will be expanded,

To support the larger flight train
ing programs, the revised FY 100'
Budget and PY 1968 Hmljrrt re
quests provide 682 trnimr aircrnf
for tlie Army, 2G9 for the Navy, ant
4C8 for the Air Force.

Service Academies. AH you fcnow
wo have been incrnsing tint lovnl t>J
enrollment at tho Military Acnilcin)
over the past few yonra townnl i\t\
ultimate goal of over 4,000, In P\
1908, enrollment will a vertigo aboul
3,300 cadets. To help nccomniodnt*
the larger student body, tho FY 1&08
Budget includes funds for a now OS-
classroom academic building nt West
Point and for personnel facilition and
utilities.

Enrollment at tho Naval .Acudomy
(currently tho lar^oHt of tint tliroo
Service academies) in FY 1BOH will
remain constant at about 4,100, Con-
struction funds, totaling $U million,
arc requested for tho inoderiii/.ution
of an academic building at AimufioU*,
and for additional pornoimnl facilities,
Tho Air Force Academy, wli Ich
has also beon gradually Imildinfr u|t
tho size of its student body to nn ulti-
mate level of 4,000, will reach a totnl
of 3,100 cadets in FY 1008. In luMJ-
tlon, a Cadet Pilot Indoctrination Pro-
gram, designed to cncouragi* nil
physically qualified cudolH to connUlcr
flight training upon jrmduiilion, will
bo instituted. . . . About $n million is
included in tho FY 1008 Huclwt for
construction of medical, training- ami
other facilities at the Air Forco Aewl-
emy in PY 1968.

Medical Services.

Medical Services include those costs
for medical and dental services not
directly associated with military units
in our other major programs, the
costs of medical care for military de-
pendents at non-military facilities,
the costs of providing- veterinary Hflrv-
ices, and the cost of operating- various
health service activities such EIA the
Armed Forces Institute of Path-
ology. . . .

The FY 1968 construction program
for medical facilities totals $101 mil- '
lionthe largest over. It includes 27
new hospitals or additions to existing
hospitals, together with a largo num-
ber of other medical facilities,
*******

February 1967

Department of Defense
BUDGET SUMMARY

(Millions of Dollars)

TV 1SC7

FY 19G6

Basic

Supple-
men tnls

Total

FY 1DG8

Total Obligation Authority:

Military Personnel

Operation & Maintenance

Subtotal Operating

Procurement

Research, Devel., Test & Eval. ~

Military Construction

Family Housing

Civil Defense

Special Foreign Currency Prog.

Total Military Functions

Military Assistance

17,047

15,378

32,426

22,595

6,946

2,545

682

105

18,731

16,712

34,443

18,080

7,042

533

519

102

1,704

3,562

6,206

G.30G

13&

624

20,485

19,274

3D.709

24,386

7,177

1,158

530

102

22,025

19,154

41,179

24,013

7,523

2,144

823

111

65,299

1,163

60,727
888

12,342

73.06&

888

75,808
G21

Total TOA

Less financing adjustments

Plus NOA for Revolving Funds

New Obligation Authority

Expenditures

66,462
-2,929

61,614
-1,676

12,342
63C

73,950
~l,67fi

585

76,429

-1,400

241

63,533

50,939

12,877

72,81'C

75,270

55,377

58,300

9,650

67,950

73,100

QASDf Comptroller) Jnnunry 24, 1007

TABLE 2

Department of Defense
SUMMARY OF THE FY 1967 SUPPLEMENTALS

(MIllloiiB of

Southeast Asia

Military Personnel

Operations and Maintenance

Subtotal Operating

Procurement :

Ammunition 677

Aircraft :

Combat attrition 1,525

Training and other 439

Spares 996

Other aircraft equipment 775

Total Aircraft 3,715

Vehicles 506

Electronics and communications 581

All other procurement 840

Total change in procurement program 6,317

Financing adjustments 11

NOA for Procurement

Research and development for limited war

Construction for Southeast Asia

Increase in Stock Funds

Subtotal SEA

Other

Pay increase already voted, military 340

civilian 179

Medicare and Homeowners Assistance, already voted 82

Subtotal amounts already voted

Total New Obligational Authority requested

1,364
3,311

4,675

0,806
If) 5
624
536

12,276

001

12,877

OASD<Comptrollor) Jnnun.ry 24, 1807

Defense Industry Bulletin

TABLE 3

Department of Defense

FINANCIAL SUMMARY

(Billions of Dollars)

1D07

1602 1062
19GI Orig- Final
inal

1 903

1004

1QGB

10G6

Enncted
or SEA Total
nuth." Suppl.

IQflS

11.2

10.5

9.3

7.1

6.8

6.7 .4 7.1

8 1

18.0

17.9

18.0

19.1

29.5

26,8 7.6 84.3

34 4

3.0

3.7

3.9

4.2

4.7

4.7 .2 4.9

5 3

Airlift and Sealift Forces

1.1

1.2

1.4

1.7

11 .4 15

I (1

1.8

1.7

1.9

2.0

24 2 2 fi

Research and Development

4.4

5.2

5.4

5.1

5.3

53 1 54

3.8

3.7

3.8

4.0

6 3

4.8

6.0

6 8

5 7

1 2

1 3

1 K

Military Assistance Program

1.8

1.6

1.2

1 3

1 2

Gross Total Oblig. Authority

61.1

51.7

61 5

51 4

fifi fi

Less Unfunded Retirement Pay

-.3

-.2

-.2 .1 -.8

-.2

Net Total Oblig. Authority

46,1 44 9 EO 6

61 3

Working Capital

.424

Other Financing Adjustments

-2.6 -1.0 .8

New Obligational Authority

43.1 43.7 49 4

Total Expenditures

44 7 44 7 48 9

Expenditures as % of GNP

G8.9 9.1 68.

73.1

8.0

9,0

TOA by Department and Agency
Army

Civil Defense

12.7

19.1

18.5 5.1 23,6

24,7

Navy _

.1 .1

Air Force

15.1

14.9

15.3

20.0

18.6 3.5 22.0

22.4

Defense Agencies

21.0

20.6

20.1

24.3

22.6 3.0 2G.G

26.0

Defense Family Housing 11

1.3

1.4 .1 1.6

2.0

Military Assistance Program

.6 ___ .f>

1,8

1.2

.9 ___ .9

Gross Total Oblig. Authority
Memo: Increase in pay included above:
Military

61.1

61.7

51.5

51.4

*66.6

62.4 11.8 74.2

7G.6

Civilian _

1.1

1.6

2.4

3.4 ___ HA

3.fl

Increased Payments to Retired
"~~~innel

1.0 ___ 1.0

1.1

, .6

1.0 _ 1.0

1.2

t l
46.1 47.3 47.8

.5
48.9

1.8
G6.1

2.8
59.6

4.0
66.6

6.4 ___ 6.4
71.4 __ 71.4

C.O
74 J

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January 24, 1967

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* FY 1968 inclcdes amoacts proposed

MDiiaiy pe-sosnei 5
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NOTE: FY 1957 KOA incudes amon

increase; $71,000,000 for Medi

Defence Industry Bulletin

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Departeent of the Army
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t
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Total Mil. Functions & Mil

Fiscal Year 1967

Department of the Armv
Department of the Navy
Department of the Air Force
Defense Ageneies/OSD
Civil Defense

Total Military Functions _.
Military Assistance

Total Mil Functions & Mil.

Fiscal Year 1988.

Department of the Army
Department of the Navy _ .
Department of the Air Force _

.ueiense -Agencies/ UQ.U _
Civil Defense ,

Total Milltarv Functions _

Military Assistance

Total Mil. Functions & MiL

Notes: (1) The total available for cHig:
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(2) In addition to oolig&ns, t

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Dofanse Industry Bulletin

TABLE 7 Department of Defense

ESTIMATED EXPENDITURES AND AMOUNTS AVAILABLE FOR EXPENDITURES

Fiscal Years 1966-1968

(Millions of Dollars)

Item

New
obliga-
tional
authority

Total
available
for
expendi-
ture

Expendi-
tures

Unexpended
balance
curried
foi-wiml

Unexpended
1m 1m ico
ns % at
avutlnlila

Fiscal Year 1966 Actual

17,492

23,781
34,128
32,419

5,134
211

14,832
16,026
20,131
3,335
86

8,941
18,074
12,31fi
1,700

119

37,6
52.0
37.9
34.2
50.8

18,486

22,655

_ .- _ 3,770

_ - 107

62,510

96,673

2,799

54,409
968

41,21!)
1,831

<t;i.o
flfi.d

1,023

63,533

98,472

32,037
38,884
36,571
5,532
220

56,377

21,108
18,978
22,694
4,174
97

48,041

10,930
19,907
1:1,977

1,31)8
123

4H.7

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24.5
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Fiscal Years 19G7 Estimated

22,989

Department of the Navv _ _

20,709

Department of the Air Force _ ..

24,263

Defense Agencies/OSD

3,972

Civil Defense

101

Total Military Functions

72,034

113,244
2,613

G6.950
1,000

40,294
1,0 1H

40.H
01.7

Military Assistance

782

Total Mil. Functions & Mil. Assist.

72,816

115,856

84,568
41,047
38,862
6,225

07,950

23,372
20,429
24,077

47,906

11,186
20,618
14,785

US
60.2

38.0

4.7

Fiscal Year 1968 Estimated
Department of the Army

23 629

Department of the Navy

21 134

Department of the Air Force

24 801

Defense Agencies/OSD

Civil Defense _

Proposed legislation

Total Military Functions

74 ("7 A

2^209

72,300

48,068

63.7

Military Assistance __

Total Mil. Functions & Mil. Assist.

75 270

123,176

73,100

50,076

40.0

(2) In addition U, ,p*dl ta . the mexpm ^ balan ce .arried forwm,, wa 9 ,-^cod in F Y 1000 by ?G 4 m im.n of balance,, w | tM W .

OASD (Comptroller)
January 24, 1007

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Operation & Maintenance

Defense Industry Bulletin

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3 . "1 H

Functional classification
Military Personnel
Active Forces
Eeserve Forces
Retired Pay
Total
Operation and Maintenance

i ' !

1 '

IS 1 -g -a .

n i^'a H l> nt "

J 1 'f!l rH O C u

! 1 rM a H- 3 i S R Cu ;
i | <3 M CH 4^ hi *U r

^ llf-gH &|g fc 1 Ij

laaStTfrtrtfi i ~ H Hw o " PH.;

Military Assistance _

& Military Assistance __

Ltepartment or Agency
Department of the Army _
Department of the Navy
Department of the Air Force __
Defense Agencies/OSD
Civil Defense

Total MfKfaw !?,,,>,. '

Military Assistance

& Military Assistance

* Less than 3.5 million.
Amount included in entry for "Ordnanw
*> FY 19SS indnd aiaoBaia proposed for
Militar? Personnel S23 1
Orws-ttiMj 4 M*int*BnM 37 S

February I9fi7

TABLE 10

Department of Defense
FINANCIAL SUMMARY OF FY 1967 BUDGET

Appropriations Enacted and Supplemental^ Proposed
(Thousands of Dollars)

Appropria-
tion B
enacted

Transfers

and
adjiiat-
menta

Military "Medicare"
and nnd
civilian "Horneown-ora
pay Assistance"
Supple- Supple-
mental men till

S.B.A.
Supple-
mental

Total

Milita 1 )*)/ Personnel
Military Personnel, Army

6,164,400

4,164

78 500