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' DEPARTMENT OF DEFENSE APPROPRIATIONS

FOR 1997

HEARINGS

BEFORE A

SUBCOMMITTEE OP THE

COMMITTEE ON APPROPRIATIONS
1^^/ HOUSE OF REPRESENTATIVES

ONE HUNDRED FOURTH CONGRESS

SECOND SESSION

SUBCOMMITTEE ON NATIONAL SECURITY

Florida, Chairman

JOHN P. MURTHA, Pennsylvania
NORMAN D. DICKS, Washington
CHARLES WILSON, Texas
W. G. (BILL) HEFNER, North CaroUna
MARTIN OLAV SABO, Minnesota

C. W. BILL YOUNG,

JOSEPH M. McDADE, Pennsylvania

JERRY LEWIS, California

JO&SKEEN, New Mexico

DAVID L. HOBSON, Ohio

HENRY BONILLA, Texas

GEORGE R. NETHERCUTT, Jr., Washington

ERNEST J. ISTOOK, Jr., Oklahoma

NOTE: Under Committee Rules, Mr. Livingston, as Chairman of the Full Committee, and Mr. Obey, as Ranking
Minority Member of the Full Committee, are authorized to sit as Members of all Subcommittees.

Kevin M. Roper, John G. Plashal, David F. Kilian, Alicia Jones, Juliet Pacquing, Greg-
ory J. Walters, Patricl\ Ryan, Doug Gregory, Paul W. Juola, Tina Jonas, and Steven
D. Ndcon, Staff Assistants; Stacy A. Trimble, Administrative Aide

PART 4

Page

Army Acquisition Programs 1

Navy and Marine Corps Acquisition Programs Ill

Air Force Acquisition Programs 267

Research, Development, Test and Evaulation, Defense-
Wide:

Ballistic Missile Defense Organization 385

Printed for the use of the Committee

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DEPARTMENT OF DEFENSE APPROPRIATIONS

FOR 1997

HEARINGS

BEFORE A

SUBCOMMITTEE OF THE

COMMITTEE ON APPROPRIATIONS
HOUSE OF REPRESENTATIVES

ONE HUNDRED FOURTH CONGRESS

SECOND SESSION

SUBCOMMITTEE ON NATIONAL SECURITY

C. W. BELL YOUNG, Florida, Chairman

JOSEPH M. McDADE, Pennsylvania JOHN P. MURTHA, Pennsylvania

JERRY LEWIS, California NORMAN D. DICKS, Washington

JOE SKEEN, New Mexico CHARLES WILSON, Texas

DAVID L. HOBSON, Ohio W. G. (BILL) HEFNER, North CaroUna

HENRY BONILLA, Texas MARTIN OLAV SABO, Minnesota

GEORGE R. NETHERCUTT, Jr., Washington

ERNEST J. ISTOOK, Jr., Oklahoma

NOTE: Under Committee Rules, Mr. Livingston, as Chairman of the Full Committee, and Mr. Obey, as Ranking
Minority Member of the Full Committee, are authorized to sit as Members of all Subcommittees.

Kevin M. Roper, John G. Plashal, David F. Kilian, Alicia Jones, Juliet Pacquing, Greg-
ory J. Walters, Patricia Ryan, Doug Gregory, Paul W. Juola, Tina Jonas, and Steven
D. Ndcon, Staff Assistants; Stacy A. Tkoabue, Administrative Aide

PART 4

Page

Army Acquisition Programs 1

Navy and Marine Corps Acquisition Programs Ill

Air Force Acquisition Programs 267

Research, Development, Test and Evaulation, Defense-
Wide:

Ballistic Missile Defense Organization 385

Printed for the use of the Committee on Appropriations

U.S. GOVERNMENT PRINTING OFFICE
68-323 WASHINGTON : 2002

COMMITTEE ON APPROPRIATIONS
BOB LIVINGSTON, Louisiana, Chairman

JOSEPH M. McDADE, Pennsylvania

JOHN T. MYERS, Indiana

C. W. BILL YOUNG, Florida

RALPH REGULA, Ohio

JERRY LEWIS, California

JOHN EDWARD PORTER, Illinois

HAROLD ROGERS, Kentucky

JOE SKEEN, New Mexico

FRANK R. WOLF, Virginia

TOM Delay, Texas

JIM KOLBE, Arizona

BARBARA F. VUCANOVICH, Nevada

JIM LIGHTFOOT, Iowa

RON PACKARD, California

SONNY CALLAHAN, Alabama

JAMES T. WALSH, New York

CHARLES H. TAYLOR, North Carolina

DAVID L. HOBSON, Ohio

ERNEST J. ISTOOK, Jr., Oklahoma

HENRY BONILLA, Texas

JOE KNOLLENBERG, Michigan

DAN MILLER, Florida

JAY DICKEY, Arkansas

JACK KINGSTON, Georgia

FRANK RIGGS, Califomis

MIKE PARKER, Mississippi

RODNEY P. FRELINGHUYSEN, New Jersey

ROGER F. WICKER, Mississippi

MICHAEL P. FORBES, New York

GEORGE R. NETHERCUTT, Jr., Washington

JIM BUNN, Oregon

MARK W. NEUMANN, Wisconsin

DAVID R. OBEY, Wisconsin

SIDNEY R. YATES, Illinois

LOUIS STOKES, Ohio

TOM BEVILL, Alabama

JOHN P. MURTHA, Pennsylvania

CHARLES WILSON, Texas

NORMAN D. DICKS, Washington

MARTIN OLAV SABO, Minnesota

JULL\N C. DIXON, California

VIC FAZIO, California

W. G. (BILL) HEFNER, North Carolina

STENY H. HOYER, Maryland

RICHARD J. DURBEN, Illinois

RONALD D. COLEMAN, Texas

ALAN B. MOLLOHAN, West Virginia

JIM CHAPMAN, Texas

MARCY KAPTUR, Ohio

DAVID E. SKAGGS, Colorado

NANCY PELOSI, California

PETER J. VISCLOSKY, Indiana

THOMAS M. FOGLIETTA, Pennsylvania

ESTEBAN EDWARD TORRES, California

NITA M. LOWEY, New York

RAY THORNTON, Arkansas

JOSE E. SERRANO, New York

James W. Dyer, Clerk and Staff Director

DEPARTMENT OF DEFENSE APPROPRIATIONS

FOR 1997

Thursday, March 28, 1996.
ARMY ACQUISITION PROGRAMS
WITNESSES

HON. GILBERT F. DECKER, ASSISTANT SECRETARY OF THE ARMY, RE-
SEARCH, DEVELOPMENT AND ACQUISITION

LIEUTENANT GENERAL RONALD V. HITE, MILITARY DEPUTY TO THE
ASSISTANT SECRETARY OF THE ARMY FOR RESEARCH, DEVELOP-
MENT AND ACQUISITION

LIEUTENANT GENERAL OTTO J. GUENTHER, DIRECTOR OF INFORMA-
TION SYSTEMS FOR COMMAND, CONTROL, COMMUNICATIONS AND
COMPUTERS

MAJOR GENERAL EDWARD G. ANDERSON HI, ASSISTANT DEPUTY
CHIEF OF STAFF FOR OPERATIONS AND PLANS FOR FORCE DEVEL-
OPMENT

Introduction

Mr. Young. The Committee will come to order.

This afternoon the Committee will conduct a hearing on Army
acquisition programs. We are pleased to welcome Mr. Gilbert F.
Decker, Lieutenant General Ron Hite, and Major General Edward
Anderson. It is a pleasure to have you here today. Mr. Decker,
General Hite and General Anderson testified before our Committee
last year.

The Army's fiscal year 1997 budget request is $10.6 billion for
modernization and long-term research and development. The
Army's fiscal year 1997 budget request is $1.7 billion, or 13 percent
less, than the fiscal year 1996 amount. The reduction in the Army
modernization account has been made in order to maintain near-
term readiness. The declining acquisition budget has forced the
Army to defer or terminate many modernization programs, such as
the Comanche and Armored Gun System. Additionally, rather than
procure new systems, the Army funds less expensive upgrade pro-
grams, such as the Abrams tank. Based on the fiscal year 1997
President's budget, for the immediate future, our soldiers will be
flying 40 year old cargo helicopters, driving 30 year old trucks, and
using war reserve ammunition for training.

We agree with the concerns of the Joint Chiefs of Staff that mod-
ernization accounts are not adequately funded. The fiscal year 1997
President's request will not field critical modernization capabilities
until well into the next century, thus creating severe long-term
readiness deficiencies.

(1)

The Committee is concerned about the state of the Army mod-
ernization programs, and we hope to address the following areas
this afternoon.

First, will the lack of modernization funding result in an Army
that does not have the equipment, in both quantity and quality, to
meet operational requirements?

Second, are we procuring items in such low quantities and
stretching out development programs for so long that we are in-
creasing the cost of Army programs and making it even more dif-
ficult to buy the equipment needed to support Army missions?
Would additional funds allow the Army to procure items at a better
price and field systems currently in development faster?

Third, do the long-term costs associated with maintaining and
operating old weapon systems exceed the cost of developing and
fielding new systems? Can we save money by accelerating the re-
tirement of older systems and fielding modern weapons systems
which require less manpower to operate and maintain?

And finally, how does the Army's modernization program main-
tain critical capabilities in the defense industry?

Gentleman, as in the past we welcome your statements today.
We look forward to working with you to provide the Army with
whatever is needed to accomplish the mission and to give the sol-
diers protection.

Your statements in full will be placed in the record, and we
would ask that you present your statement in any way that you
like. We are looking forward to seeing some of the show and tell
things you brought for us today.

Mr. Murtha.

Mr. Murtha. No, thank you.

Mr. Young. We are ready to proceed. Who will start?

Summary Statement of Mr. Decker

Mr. Decker. I sincerely want to thank you, Mr. Chairman and
other Members of the Committee, for the opportunity to testify on
the Army Research, Development and Acquisition Budget for fiscal
year 1997 and other aspects of the Army modernization program.

I am serious; we sincerely appreciate this opportunity. I think it
is fair to say that you folks wouldn't be on this Committee if you
didn't have an abiding concern and interest in national security,
and we are here to be as candid and to aid you in any way we can
through testimony and questions.

We appreciate your help and guidance from last year and your
generous support of Army modernization from last year.

General Hite and I have prepared a detailed written statement
for the record. Copies have been provided to you, and I offer that
statement officially for the record at this time.

America's Army is the premier land force in the world. We clear-
ly continue to see an increasing role for land forces. In the 40 years
between 1950 and 1989, the Army participated in 10 deplojanents,
not counting forward-deployed forces, 10 deployments across the
entire spectrum of peace and combat.

In the 6 years since 1990, post Wall coming down, we have par-
ticipated in 25 deployments across the spectrum of peace and com-
bat. Our soldiers are prepared to go anywhere at any time to up-

hold the Nation's interests. I think we are again proving this with
the soldiers serving in Bosnia. The Army soldiers on the ground
have been and seem to continue to be the force of choice for what
we face.

ARMY MODERNIZATION AND FORCE XXI

Again this year, fiscal year 1997, the Army was faced with tough
budget choices as we worked to balance readiness of current forces,
quality of life in support of current forces, and modernization
needs. I am sure you realize, as well as we do, that severely con-
strained modernization resources have extended fielding times,
have delayed modernization of the total force, have delayed deploy-
ing a next generation of systems, and from a business standpoint,
have resulted in some inefficient programs.

So, given this environment, where are we going in the future?
We have set in motion a series of initiatives to arrive at the 21st
Century with the requisite capabilities, and overall, including mod-
ernization; this is FORCE XXI. It is a process and a product de-
signed to look at both the operational and institutional Army, its
tactics, doctrine, and procedures, and in particular, at leveraging
information technologies to enhance the capabilities of the quality
force we have today.

FORCE XXI is America's evolving Army of the 21st Century, and
it is a process of continuous learning and transformation. Overall,
the Army has been at this for five years, and we have had a very
focused effort over the last three. I believe our Army war fighting
experiments are starting to show increased effectiveness with these
new concepts. We clearly recognize that today's modernization be-
comes tomorrow's readiness.

To help ourselves, we are trying to take aggressive actions to re-
duce our infrastructure cost. We are looking for efficiencies across
the entire Army. These efforts have the personal interest and are
being personally led by the Chief and the Vice Chief, and with your
help and that leadership, I think we can continue to reform the ac-
quisition process, from the program manager in the field, all the
way to my office. We have to make significant portions of savings
from these initiatives. We believe we are, and we are programming
them into future modernization accounts.

The Army today is the eighth largest Army in the world, based
on the data we have. Thank God, it is the first best. It is the first
best due to quality people, superb training, and best technology ca-
pability and technology overmatch. I think it must remain that
way. We cannot afford to become the eighth largest and the eighth
best.

WEAPON SYSTEMS AND SYSTEMS UPGRADES

Today, our soldiers have the best war fighting equipment in the
world. There is a lot of life left in many of our platforms. These sys-
tems were world class when fielded and they still are, so our near-
term strategy is to leverage previous investments through tech-
nology insertion and upgrades.

In addition, this year's budget continues to fund a limited but
critical number of new weapon systems both in development and
in procurement that complement our technology upgrade programs.

Examples of those systems are the Sense and Destroy Armor or
SADARM Munition program, the Army Tactical Missile System,
Brilliant Anti-Tank — BAT Armor program, the Crusader Advanced
Field Artillery system, the Javelin missile, the critical appliques for
Brigade 21 to digitize the battlefield, and Comanche, our number
one development program.

Sir, we are striving to make the most efficient use of the dollars
given us to modernize the Army.

SOLDIER ENHANCEMENT PROGAM — LAND WARRIOR

This concludes my opening remarks. If you would permit me, be-
fore we start the question and answer portion of the hearing, I
would like to present a short video on today's Army and its mod-
ernization program. I believe it will give you a glimpse of what we
are doing with the appropriations you have provided.

[Clerk's note. — The Committee proceeded to view a video.]

Mr. Decker. As you see from the video, there is stress on the
importance of the individual soldier. We believe that is becoming
increasingly important. We have been reasonably well funded and
are continuing to work hard to improve the technology for the indi-
vidual soldier. I think we are succeeding and would like to present
a short demonstration for you of the 21st Century soldier we are
working on.

General Hite. Mr. Chairman and Members of the Committee
this is a great American soldier. Private John Taylor, who is on his
way to the 75th Rangers at Fort Benning. He has been a part of
the Army his entire life.

His father is a retired noncommissioned officer. He is wearing
today the Army's first integrated soldier system, modular,
tailorable to each mission and this is the first time we have been
able to link the individual soldier with the digitized battlefield.

Let me explain some of the aspects of his equipment starting
with his helmet. It is 15 percent lighter than the current helmet,
gives the same protection. He has a flip-down eyepiece which is
connected to his computer system which enables him to be a for-
ward artillery observer utilizing a laser on his weapon system auto-
matically to receive preformatted messages, to send messages, to
navigate utilizing a Global Positioning System — GPS and receive
other types of information that our soldiers in the past would have
had to receive verbally.

He also, for the first time, can speak to other members in his
squad by talking into his microphone. He is wearing a vest which
also provides the same level of protection that we have in the older
vests, but is 15 percent lighter. By putting a ceramic plate in the
vest, we can give the soldiers protection from kinetic energy
rounds.

You can see the system has been designed with the wires and the
antennas for the computers and the radios inside the backpack. It
also has a device like you have on some of your cars which can ad-
just the comfort level of the pack.

When a soldier is carrying 75 pounds, it enables him to adjust
it to get the right placement for the right kind of weight. This is
a squad leader version, which enables him not only to talk to indi-
vidual members of his squad but also to his platoon sergeant and

platoon leader. The antenna for the GPS and other radio is built
into the packpack for ease of maintenance and also increased sur-
vivability.

We have two radios utilizing small credit-card-sized commercial
items right off the shelf We have a 486 computer in the backpack
which allows him to receive a heads-up display and the information
that is processed through that heads-up display. It operates on two
batteries giving him 24 hours of operation.

The batteries have an integral tester that can tell the soldier if
the batteries are getting weak; the system is modular. He can carry
up to 55 pounds on his back with the pack. The pack is fully config-
ured, with his sustaining packs on the sides, his assault; in the
middle pack and another pack for his personal items; so depending
on the mission, he can pull these off and slide individual compo-
nents onto the system.

He has a modular weapon. This is a M16A2 rifle with four rails
on it, which enable him to configure this weapon system to the mis-
sion he is going to go on. He can have a thermal sight, a day cam-
era, a laser range finder, and other items on the system that he
can put on and utilize to see through the heads-up display, day or
night.

Explain how you use your weapon.

Private Taylor. Technology that represents the requirements for
the Land Warrior system; I am wearing a helmet with equal pro-
tection to a Kevlar helmet, but at a 15 percent reduction in weight.
I can view digital map information and troop locations with a day-
light video camera. I can send and receive messages.

This is the modular weapon system designed to mount various
types of weapons and sights. Today it is equipped with a daylight
camera, thermal weapon sight, and range finder. What you see now
is the daylight camera. The daylight camera was designed to allow
the soldier to send a still video picture back to the commander.

This is the thermal weapon sight. The thermal weapon sight was
designed to allow the soldier to engage targets day or night in any
weather condition. The range of this is compatible with the max-
imum range of the weapon.

As the General said, it is mission tailorable so you can mount
other weapons and sights. If everything did fail, I could still fire
my weapon effectively, still complete my mission, and take care of
my troops. This enhances the soldier's fighting capabilities and al-
lows the soldier to be better equipped and provides less casualties
to the unit.

Mr. Dicks. Have you trained using that rifle?

Private Taylor. The first early operational experiment will be
this November, so I haven't trained with all this equipment yet.
This is in prototype form.

Mr. Dicks. Where is this prototype being developed?

Private Taylor. The Hughes Aircraft Company is developing the
prototype, sir. It is a Motorola team.

Mr. Decker. We have a Program Manager, Colonel Meadows. He
is managing the program on behalf of the Army.

General Anderson. What you see is what technology can do for
us. We need to find out what it can do for the soldier, and we are
doing that as part of the Task Force XXI experiment that is going

to be conducted at Fort Hood in the Army advanced warfighting ex-
periment. It is absolutely critical to know if this stuff really works.
We don't know yet, but we are going to find out.

Mr. Dicks. This will be November of 1996?

General ANDERSON. Yes, sir. They will start in November of
1996. The exercise at the National Training Center, the NTC, will
be conducted in the February-March time frame with a full-up bri-
gade. We will have a light battalion that will be equipped with this
equipment, as well as, a whole brigade that will be totally modern-
ized.

General HiTE. As new technology comes on in the next 2 to 3
years, we can insert that technology into the system, if we have de-
signed it to accept that technology. One of the things, with this sys-
tems mounted, you can take this weapon and stick it around the
corner and fire without exposing your head. This system improves
the soldier's lethality and survivability and how comfortable he is
when you are slogging through the mud and the rain.

Mr. Dicks. The Marine Corps up here is having a little problem
with it.

Mr. MURTHA. Keep in mind the confusion and noise of combat.
I just can't imagine that with all the jostling and falling down and
running — we tried just a simple experiment with the earphones. It
was impossible to use them. It looks to me like you are going to
have the Second Lieutenant back looking at the picture rather than
out in front of the troops. I am all for new technology but I will
tell you, from my experience, it is going to be awful hard to adapt
this to the real situation, as far as I can see. I know we want to
experiment and it might work well on the parade ground but

General Hite. We have had the Marines testing this in terms of
the prototype, running it through obstacle courses and they are giv-
ing it good marks. I tested the earpiece when I was a Second Lieu-
tenant. We have come a long way since those days.

General Anderson. In the old process, we would have just
bought that stuff. By experimenting, we are going to find out ex-
actly what you said, and if it doesn't work, we are not going to buy
it.

Mr. Hefner. Is that a new weapon or is that an existing weapon
that you put this equipment on?

General HiTE. That is an M-16. We put four rails on it.

Mr. Hefner. The prototype is the stuff

Mr. Decker. The electronics and things.

General Hite. This is night sight. We put rails on it. The day
camera is a prototype.

Mr. Young. When Private Taylor puts on that prototype, if he
has it in the inventory, that is his weapon; if he puts it around the
comer so that he could see without being detected, what does he
see and where; through the eyepiece?

Private Taylor. Everything that you have been able to see on
the screen is what I see on the eyepiece, the thermal weapon sight.
The computer and you can see the daylight vision camera and
whatever sights are made available by the system, sir.

General GuENTHER. It is designed to be interfaceable with our
standard combat net radio so that he can push that picture back

anywhere that we need to have it. That might be of value when
we have folks out on the point.

Mr. MURTHA. We could use it in the Pentagon directing the traf-
fic.

Mr. Young. Keep us advised on how it works.

Mr. Dicks. How does the night vision piece work? Does that
bother you?

Private TAYLOR. No, sir. You are talking about my ability to walk
and such?

Mr. Dicks. Right.

Private TAYLOR. It is just like looking at you normally. You have
to look at the eyepiece with one eye concentrated on it in order to
do that.

Mr. Dicks. Do you wear glasses normally?

Private Taylor. No, sir. These are ballistic protection eyewear,
which will prevent things getting into your eyes, lasers or frag-
mentation. This hasn't given me any trouble. I have it either over
the left or right eye. My buddies who have tested out other stuff
haven't had trouble with it.

Mr. McDade. What are your major concerns about counter-
measures, threats to the soldier?

General Hite. It would be very difficult to put a countermeasure
against this because of the size of the optics. It doesn't present that
kind of a picture. Unless you had a big thing like a Stingray, it
would not cause problems.

Mr. McDade. You have no concerns about countermeasures?

General Hite. We do.

Mr. McDade. What are the major concerns?

General HiTE. It would be something that puts out a high energy
laser on the battlefield.

Mr. McDade. Is that the only one?

General HiTE. Yes, sir.

Mr. McDade. So apart from the question that was raised about
the soldier's ability to perform, that is the only thing you see over
the horizon.

Thank you, Mr. Chairman.

Mr. Young. Thank you. We appreciate your being here and
showing this new equipment. Let us know how you feel about it
after you get to train with it. Thank you very much.

Mr. Decker. One last comment, and then I will close the opening
remarks.

That is an exceptionally bright young man. He is a real soldier,
but he is not atypical. We have a superb bunch of soldiers today,
and it is our duty to try to equip them with the right things.

That concludes our opening presentation. I would like to intro-
duce other members of the team. You have been introduced to Gen-
eral Hite and General Anderson. I have Lieutenant General Otto
Guenther, Deputy Chief of Staff, Command, Control, Communica-
tions and Computers, to address all our command and control
issues; and Dr. Fenner Milton, the Deputy Assistant Secretary for
Research and Technology. They are the ones that will probably
field most of the questions if we don't know the answer at the front
table.

With that, we will be happy to entertain questions.

[The joint statement of Mr. Decker and Lt. General Hite follows:]

RECORD VERSION

STATEMENT BY

THE HONORABLE GILBERT F. DECKER

ASSISTANT SECRETARY OF THE ARMY FOR

RESEARCH, DEVELOPMENT AND ACQUISITION

AND

LIEUTENANT GENERAL RONALD V. HITE

MILITARY DEPUTY TO THE

ASSISTANT SECRETARY OF THE ARMY FOR

RESEARCH, DEVELOPMENT AND ACQUISITION

BEFORE THE

SUBCOMMITTEE ON NATIONAL SECURITY

COMMITTEE ON APPROPRIATIONS

UNITED STATES HOUSE OF REPRESENTATIVES

SECOND SESSION, 104TH CONGRESS

ON ARMY ACQUISITION, FISCAL YEAR 1997
28 MARCH 1996

NOT FOR PUBLICATION
UNTIL RELEASED
BY THE HOUSE
APPROPRIATIONS
COMMITTEE

INTRODUCTION

Mr. Chairman and Members of the Committee, thank you
for the opportunity to appear before you to discuss the
proposed Fiscal Year 1997 (FY97) Research, Development and
Acquisition (RDA) budget for the United States Army. It is
our privilege to represent the Army leadership, the civilian
and military members of the Army acquisition work force,
and, most importantly, America's soldiers. Our brave men
and women operate with great skill and precision the most
technologically advanced weaponry on the face of this earth.
Today's soldier is well-equipped. Tomorrow's soldier
deserves no less.

America's Army is the premier land force in the world.
Our well-trained, well-equipped, and ready force would not
have been possible without the help and support from Members
of this Committee. As representatives of the
American people, you have strongly supported our programs
and helped to guide them to fruition. The Army has been a
careful steward of the resources provided, but our success
would not have been possible without your advice and
support .

It is imperative that we maintain the Army's
technological advantage on the battlefield. Modernization
is essential as we transition today's Army into a 21st
century Army -- Force XXI. Continuous modernization is one
of the keys to dominance on the future battlefield and the
key to readiness for unexpected challenges of the 21st
century.

There is concern throughout the Army about the funding
for modernization and long-term research and development.
In FY97, our RDA budget request totals $10.6 billion. Our
procurement request is $6.4 billion, 16.3 percent of the
Department of Defense (DoD) procurement budget request of
$38.9 billion and 10.6 percent of the Army's total budget
request of $60.1 billion. In FY97, our Research,

Development, Test and Evaluation (RDT&E) request of $4.3
billion totals 12.4 percent of DoD's RDT&E budget request of
$34.7 billion and 7.2 percent of the Army's total budget
request .

The FY97 budget request will fund our highest priority
programs. Our current strategy is to buy a limited number
of new weapons, while extending the lives, improving the
performance, and adding new capabilities to our existing
systems. But ultimately, the Army will reach the point
where additional technological improvements of today's
systems will provide only marginal benefits. We must look
now at new types of systems and capabilities for our 21st
century force.

It is our belief that a stable investment in
modernization will ensure the long-term readiness of the
force. Today's modernization program is tomorrow's
readiness. As we complete downsizing and restructuring the
force, a renewed emphasis on the Army modernization account
is essential. Our actions through the Future Years Defense
Program (FYDP) will influence the readiness of the force for
the next decade and beyond.

THE ARMY MODERNIZATION PLAN AND FORCE XXI

Throughout history, America's Army has been the force
of choice to fight and win our nation's wars. This fact has
not changed in the 1990' s, and it will not change in the
21st century. As we approach the 21st century, the Army is
transitioning from a "threat-based force" to a
"capabilities-based force." Since 1989, the Army has seen a
300 percent increase in operational deployments. Missions
other than traditional warfare have taken on new importance
and have led to more soldiers being deployed on more varied
types of missions than ever before. Whether we are doing
disaster relief operations in Florida or Bangladesh,
supporting democracy in Haiti, peacekeeping in Bosnia, or
fighting drug traffickers in Columbia and Peru, all these
missions have one thing in common. They require the
presence of well-trained, well-led, and well-equipped
soldiers on the ground.

There are numerous danger zones and the Army must
provide potential solutions to the problems faced by our
ground commanders and their troops. Because of the
magnitude and urgency of the mine problem in Bosnia, for
example, the Army has established a Countermine Task Force
to accelerate the fielding of equipment to improve our
capability to detect, avoid, clear, or neutralize landmines.
The objectives is to move technologies from the laboratory
to the soldier in Bosnia quickly. The Task Force is also
establishing the strategy for future countermine technology
efforts .

The changed world environment presents us with new and
difficult challenges, the largest being the resource
constrained environment in which we operate. Nevertheless,
we cannot afford to take a time out from progress. The Army
is redesigning itself to meet the new world order. With
Force XXI, we are changing today's Army into a 21st century
Army. Equipping Force XXI will be a tough challenge, but we
have a plan. The Army modernization plan is a living,
working document. It focuses our efforts to meet the
challenges of the post-Cold War world and to maintain the
capabilities necessary to protect our nation's interest and
to achieve land force dominance over potential adversaries.

The smaller our Army becomes, the more modern and
technologically overmatching it must be. If we do not
dominate our enemies in the future as we do now, we may
still win -- but at the price of far more American
casualties, and with the risk of a far longer campaign that
will burden our resources and our citizens. The Army
modernization strategy focuses our modernization efforts on
five objectives where we must preserve our nation's
technological overmatch. These five objectives are:
Project and Sua tain the Force; Protect the Force; Win the
Information War; Conduct Preciaion Strike; and Dominate the
Maneuver Battle.

Project and Suatain the Force

Although we have a global mission, the Army is now
largely based in the continental United States (CONUS) .
When called upon, we must project our power into trouble
spots where often our forces can expect to be the first
troops on the ground. The capability to deploy highly

lethal combat forces rapidly and sustain them from bases
both here at home and from our remaining bases overseas is
fundamental to our success in any mission. The Army's
strategic mobility is based on a critical triad of pre-
positioned equipment and supplies, strategic sealift, and
strategic airlift.

Following are descriptions of systems and systems
upgrades in development or in procurement that will help to
ensure that we Project and Sustain the Force.

A key ingredient to many of our "project" initiatives
is the modernization of our installations' information
infrastructure. Much of that infrastructure contains World
War II telephone lines, outdated telephone switches, and
inadequate local area networks. Without upgrades, this
outdated infrastructure will not support a power projection
strategy which calls for the deployment of minimum support
forces. Under this concept, the forward deployed force must
have reliable communications with its home base
installation (s) . These installations must have a modern
information infrastructure to handle the large amounts of
data needed to ensure the life blood of the forward elements
--a constant flow of personnel, goods, and services. The
Army has synchronized various separate efforts into a
cohesive program that we call Power Projection Command,
Control, Communications, and Computers Infrastructure
(PPC4I) . This program will upgrade installation telephone
lines and switches and install local area networks and
global network gateways to facilitate transactions with the
deployed force. The installation information infrastructure
is critical to the exchange of data among the deployed
force, stay-behind elements, and the industrial base for
resupply, replacements, and repairs. This infrastructure is
also vital to maintaining a high state of readiness prior to
deployment, preparation for deployment, and speedy return of
the force.

Sustaining the power projection Army throughout the
length of the mission will be enhanced by initiatives such
as the Army's Total Distribution Program, which is designed
to track the quantity, location, and condition of assets
anywhere at any time and control the distribution of
material within a theater of operations. Using primarily

off-the-shelf commercial capabilities, this system will give
us asset visibility throughout the force and its support
system.

Tactical Wheeled Vehicles (TWV) are a critical element
of the Army's operational effectiveness and are essential to
projecting and sustaining the force. Today's modern, mobile
Army doesn't run on its stomach; it runs on its trucks.
Among our most important TWV programs is the Family of
Medium Tactical Vehicles (FMTV) . The Army is currently
negotiating a contract modification to extend production
under the current contractor. A family of diesel powered
trucks in the 2-1/2-ton and 5-ton payload capacity, built on
a common chassis, FMTV will perform line haul, local haul,
unit mobility, unit resupply and other missions in combat,
combat support, and combat service support units. The Army
approved full-rate production in August 1995. What you do
not see in the budget submission is our 2-1/2-ton truck
Extended Service Program (ESP) . We have an ongoing, multi-
year contract that funds this program from the National
Guard and Reserve equipment account. Through ESP, we take
our old 2-1/2-ton trucks, remanuf acture them, and add state-
of-the-art components. The improved vehicles meet current
safety and emission standards and have improved mobility,
reliability, and operability. After remanuf acture and
technology insertion, these vehicles are fielded to the
Reserve components. The High Mobility Multipurpose Wheeled
Vehicle (HMMWV) , a Tri-Service program, is a diesel-powered,
four-wheel drive tactical vehicle. In FY97, the Army will
purchase a HMMWV up-armored scout variant and a heavy
variant. In FY97, we intend to procure 1,126 vehicles.

In previous years, we made very painful decisions
regarding our combat service support area. Several programs
were decremented to pay higher priority bills, but the Army
needs generators, trucks, and similar equipment. Our
current fleet of 2 1/2 ton trucks is older than the soldiers
who drive them. We have got to fund these programs at a
minimally acceptable level, which we have attempted to do in
our FY97 budget request .

Procurement of the Black Hawk helicopter will continue
in FY97 with a new five year contract for an additional 172
aircraft. These new UH-60Ls will go to "first to fight"
units, and the "A" models they replace will be used for

other priority needs such as Medical Evacuation (Medevac) .
Black Hawk procurement through FYOl will bring the fleet to
1,622, almost 80 percent of the Army's requirement for 2,042
aircraft .

Force Provider (FP) is a soldier rest and refit
facility for use in operations with limited or no supporting
infrastructure such as our current peacekeeping mission in
Bosnia. FP is a complete tent city with kitchens, showers,
latrines, and laundries that is packaged in containers for
ease of deployability . In FY97, the Army will procure two
FP modules, each to support 550 soldiers.

Protect the Force

Protecting our soldiers has always been important to
us, but the lethality of modern weaponry and the
availability of theater ballistic and cruise missiles to
even third world nations causes us to reemphasize the
protection of our forces. We need air defense, particularly
defense against theater ballistic missiles, cruise missiles,
and unmanned aerial vehicles (UAVs) , to protect critical
bases, ports, maneuver forces, and political
targets/population centers. Realizing there is no 100
percent effective defense, we must maintain the capability
for our soldiers to operate protected in a nuclear,
chemical, or biological warfare environment. Finally, the
potential for fratricide exists in any military operation.
Accurate situational awareness is essential to reduce
fratricide .

Following are descriptions of systems and systems
upgrades now in development or in procurement that will help
to ensure that we Protect the Force.

In the low altitude forward area air defense, the
Stinger procurement request for FY97 will provide for
continued retrofit of this missile to the Block I
configuration. This improvement will extend its life and
help overcome some of the inherent deficiencies of the
currently fielded Stinger, until the Army can move forward
with Stinger Block II. RDT&E funds for Stinger Block I will
provide continued, essential phased improvements to the
software. The Army has also funded critical RDT&E efforts

on the Stinger Block II program to continue developing
technology for the 2.75" focal plane array seeker, the
smallest seeker in the world.

In FY97, funds will provide for the continued
procurement of training devices for the Avenger system, and
also for termination costs associated with the last year of
its multi-year contract. Avenger is a surface-to-air
missile/gun weapon system mounted on the HMMWV to counter
hostile cruise missiles, UAVs, and fixed-wing aircraft and
helicopters .

The proliferation of short range ballistic missiles in
the world today poses a direct, immediate threat to many of
our allies and to some U.S. forces deployed abroad in
defense of our national interests. Over time, the
proliferation of longer range missiles will pose a greater
threat to the United States -- both to our forces stationed
here and to our civilian population. The Department of
Defense (DoD) missile defense strategy first prevents and
reduces the threat through nonproliferation and arms control
regimes, then deters the threat with counter-proliferation
activity and retaliatory forces. Missile defense is the
final leg in this strategy. The most current threat
analysis indicates that the short, theater range missile
threat is here now. This threat analysis predicts that
quantities of longer range missiles and third world missiles
capable of striking the U.S. only grow or begin to appear
over a longer period of time.

This understanding of threat timelines combined with
the relatively large amounts of resources being applied to
Ballistic Missile Defense (BMD) caused the Joint Requirement
Oversight Council (JROC) and the Office of the Secretary
Defense (OSD) to examine missile defense programs. BMD
review results have not altered priorities. Theater Missile
Defense (TMD) is still the highest priority -- first with
systems that defend against short-range missiles deployed
now. Foremost among these is the Army's Patriot Advanced
Capability 3, or PAC-3. Longer range TMD follows, and the
risk assumed by delaying the Army's Theater High Altitude
Area Defense (THAAD) was determined to be reasonable. The
next priority is National Missile Defense (NMD) , which would
defend the U.S. against Inter-Continental Ballistic Missile
(ICBM) attack.

Army efforts are key in all areas. We've already built
and deployed more than 100 Patriot Guidance Enhanced
Missiles (GEM) to improve PAC-2 performance by a factor of
four over our capability in Operation Desert Storm. Three
of our Patriot battalions are ready to fight with it now.
We're also fielding the Joint Tactical Ground Station
(JTAGS) data link that brings space based sensor data
directly to our theaters and improves the accuracy of
existing defenses.

The PAC-3 program provides even better enhancements
with a whole new hit-to-kill lethality and broader area
coverage. The BMD review added additional resources to PAC-
3 and the comparable Navy system, to compensate for delays
they have both suffered and to make sure they could be
fielded as soon as possible. Neither system is funding
constrained. Patriot is fielded with U.S. forces and
deployed in CONUS, Europe, Southwest Asia, and South Korea.
There are extensive Patriot foreign sales and current
foreign interest in the PAC-3 program, which will be fielded
first to U.S. forces in FY99.

The Medium Extended Air Defense System (MEADS, formerly
the Corps SAM system) will defend ground maneuver forces
against multiple and simultaneous attacks by short-range
ballistic missiles, low radar cross-section cruise missiles,
and other air-breathing threats. It provides immediate
deployment of a minimum battle element for early entry
operations with as few as two C-141 sorties; has mobility to
move rapidly and protect maneuver forces during offensive
and defensive operations conducted across large land masses;
and uses distributed architecture and modular components for
advanced survivability, employment flexibility, and
firepower. It will also significantly reduce manpower and
logistics requirements.

Last summer, senior military commanders, including the
Chairman of the Joint Chiefs of Staff, the Army Chief of
Staff and the Commander-in-Chief (CINC) of the Pacific
Command all communicated to Congress their strong support
for this program to counter maneuver force vulnerability to
a growing missile threat. MEADS fills a critical need in
both the Army and the U.S. Marine Corps (USMC) .

We are not alone in this effort. We will soon sign a
quadrilateral Memorandum of Understanding with our German,
French, and Italian allies to cooperatively develop MEADS.
The U.S. will provide 50 percent of the funding and receive
50 percent of the work for our industry. In October, the
Army selected two U.S. contractors to proceed into the
International Teaming and Project Definition and Validation
phase of the program during which the concept will be
finalized for full development and production. First Unit
Equipped (FUE) is projected for FY05.

Aerostats are tethered lighter-than-air platforms that
carry sophisticated sensor packages to provide over-the-
horizon surveillance and precision tracking for lower tier
systems such as Patriot, MEADS, and Navy Standard Missile 2
(SM2) . The Army Space and Strategic Defense Command (SSDC)
has taken the DoD lead and formed a Joint Aerostat Project
Management Office for Cruise Missile Defense in Huntsville,
Alabama. Project management is headed by an Army colonel
with Air Force and Navy deputies. The effort builds on this
year's highly successful Mountain Top Experiment which also
involved the Army, Air Force, and Navy.

This effort is similar to another highly successful
acquisition the Army undertook in the eighties. Concerned
with a growing short-range missile threat, the Army then
took the initiative and began to build on the highly capable
Patriot Air Defense system for TBM defense. The result was
a Patriot PAC-2 system able to fight TBM's in Operation
Desert Storm. Without this 1980 's effort by the Army, the
nation would not have had any TBM defenses in the Gulf War.

Today, there is similar concern over the cruise missile
threat. This Aerostat effort parallels the work done in the
1980 's to give Patriot a TBM capability, and will yield two
Aerostat-based operational sensor units by FY02, along with
a residual capability for two Patriot battalions to be
deployed with them and defeat over the horizon, low
observable threats to our forces.

The BMD review validated THAAD as an essential part of
our missile defense plans and determined it to be the most
mature of our upper tier systems. Without it, near leak
proof defense required to defend critical military assets
and civilian populations, especially those inland, cannot be

achieved. The program successfully completed a Milestone 1
Defense Acquisition Board (DAB) in 1992, is currently
undergoing Demonstration/Validation (DEM/VAL) flight
testing, and has JROC validated requirements. THAAD
hardware and software was engineered to work together as a
system from the very beginning. It has demonstrated overall
system performance and maturity during extensive ground
testing in hardware -in- the -loop facilities and during system
testing at White Sands Missile Range in New Mexico. THAAD
is a completely integrated hit-to-kill system including
missiles, launchers, radars and battle management systems.
The BMD review decided to delay THAAD because threat
timelines are not as fast as once believed. It also
emphasized keeping the User Operational Evaluation System
(UOES) schedule for reacting to national need by 1998 with
two radars, four launchers, two battle management systems
and, by 1999, 40 UOES missiles. Our analysis currently
indicates that THAAD will have an objective warfighting
capability by FY06.

The Army has been the nation's NMD technical leader for
nearly 40 years. The OSD BMD review decided to shift NMD
efforts from a technology readiness program to a deployment
readiness program. This program is comprised of a three-
year development phase after which acquisition could be
accomplished quickly (within three years of a future
deployment decision) if a threat warrants. Army efforts
interface with existing and planned CINC Battle Management/
Command, Control, and Communications (BMC3) and Integrated
Tactical Warning and Attack Assessment (ITW/AA) assets
including the Defense Support Program (DSP) , Early Warning
Radars (EWRs) , and the Space-Based Infrared System (SBIRS) ,
when it becomes operational. When deployed, these NMD
systems will detect, track, discriminate, and intercept
threat targets in their midcourse phase of flight and will
provide effective protection of all 50 states against
quantitatively-limited threats. The Ground Based
Interceptor (GBI) provides non-nuclear, hit-to-kill
intercepts of strategic reentry vehicles at very long
ranges. Although the detailed configuration is not yet
final, the Army's approach consists of the Exoatmospheric
Kill Vehicle (EKV) on a dedicated booster for which the Army
recommends a very capable, commercial, low-maintenance solid
rocket booster that a Ballistic Missile Defense Organization
(BMDO) "Tiger Team" determined can be procured with

acquisition reform techniques for no more cost than that
incurred in retrofitting Minuteman missiles. The NMD Ground
Based Radar (GBR) acquires, tracks, and discriminates
strategic reentry vehicles in their midcourse phase of
flight and performs engagement kill assessment. It
leverages the investment in the TMD-GBR for THAAD using the
same solid-state radar technology and large portions of
common software.

The first EKV sensor flight test is scheduled for late
FY96 and intercept testing will begin in FYSS. The EKV on a
surrogate booster, GBR, and BMC3 elements will be integrated
in a systems test at the Kwajalein Missile Test Range in
FY99. The Army is an executing agent of the ground-based
portions of the NMD program with BMDO funding and guidance.

In other areas of protecting the force, we will
continue engineering efforts to lower the production cost of
the Army's anti-fratricide system, the Battlefield Combat
Identification System (BCIS) , in FY97 as well as consider
promising alternatives being pursued by different allies.
BCIS is a millimeter wave, ground-to-ground, point of
engagement system that provides through the sight,
day/night, all weather positive identification of BCIS-
equipped U.S., allied, and coalition platforms. Shooters
query potential targets at ranges that can extend beyond
five kilometers. Friendly platforms targeted by friendly
shooters generate automatic electronic responses in less
than a second. BCIS is resistant to electronic
countermeasures, active exploitation, and deception. We are
currently building 68 BCIS systems for Brigade Task Force
XXI. There, BCIS will be tested as a stand alone system and
as an input to the situational awareness of heavy forces to
determine its value on the digital battlefield. In
addition, BCIS will be evaluated along with four other
systems in a four party exercise in 1997 (United States,
United Kingdom, France, and Germany) .

In FY97, OSD will continue to improve the Joint
Chemical Biological Defense Program. The Army, as executive
agent of the program, has aggressively developed a
management structure that serves to coordinate and integrate
Service RDA in this critical area. The Joint management
structure is developing a program to eliminate duplication
and provide the total force with improved chemical and

biological protection in the future. Service participaticv
in this process has been enthusiastic and highly
constructive. The FY97 budget request will continue
procurement of protective masks; allow initial procurements
of the Biological Integrated Detection System (BIDS) and
protective shelter systems, a mobile medical treatment
facility; and continue upgrades to the Nuclear, Biological,
and Chemical (NBC) Reconnaissance System. Because of the
continued emphasis on biological defense, the Army's first
biological detection company will be activated in September
1996.

The soldier is our most precious asset. We continue to
place great importance on enhancing the battlefield
capabilities of the individual soldier. Soldier
Modernization consists of the Warrior programs- -Land
Warrior, Crew Warrior, and Air Warrior; other support areas
such as rations, organizational clothing, and individual
equipment; and the Soldier Enhancement Program. Land
Warrior is the Army's premier program for modernizing the
dismounted soldier. It consists of an integrated and
modular soldier fighting system that includes the soldier's
computer, radios. Global Positioning System (GPS), heads-up
display, modular weapon system, thermal weapon sight, video
capture, improved ballistic protection, advanced load
carrying equipment, laser rangefinder, and combat ID
compatibility. Currently in Engineering and Manufacturing
Development (EMD) , Land Warrior has been combined with the
Generation II Soldier Advanced Technology Demonstration at
the direction of Congress. A single, consolidated system is
scheduled for fielding in FYOO and thereafter components
will be upgraded through technology insertion. Other
important areas of Soldier Modernization, including
rations, organizational clothing, and equipment are in
various stages of development or fielding in FY97. The
Soldier Enhancement Program fields individual soldier items
in less than 36 months. This quick fix program provides the
Army the ability to impact our short-term missions.

In the Information Age, protecting the information used
on the digital battlefield is just as important as
protecting our soldiers against the lethality of modern
weapons. Having an adversary get into one of our data bases
and manipulate or destroy the information in the system,
will have a serious adverse affect on our forces and weapon

systems. To protect our data networks and command and
control systems, the Army has written Command and Control
(C2) Protect Plans. These plans address the protection of
information needed by our warfighting commanders at every
level of command from the foxhole to the National Command
Authorities. Their implementation will increase the
Commanders' confidence in the integrity and confidentiality
of the information processed and transmitted throughout the
command and control infrastructure, and will help assure the
Commanders that the communications networks will be
available when needed. The implementation of the plans will
also increase the awareness of attacks launched against Army
Information Systems and help focus our reaction to these
attacks. To implement the plans, we must purchase various
security devices which prevent the exploitation of
information through interception, minimize the hazards of
processing and handling large volumes of highly classified
printed cryptographic tapes and material, and resolve the
problem of secure interfaces between strategic and tactical
systems and links to commercial networks. FY97 development
requirements have been identified, with limited prototype
purchasing requested, and procurement funding planned in
subsequent years .

Win the Information War

Information is power. On the battlefield, information
is deadly power. A key factor in modern warfare is the
ability to collect, process, disseminate, and use
information about the enemy while preventing him from
obtaining similar information about our forces. In short,
we must destroy, disrupt, and control enemy information
sources and distribution while ensuring our commanders get
accurate and relevant data in time to use it. The goal is
to provide Force XXI the operational advantages of
information dominance. Targeting and incapacitating the
information systems of adversaries, while protecting our
own, will allow deep and simultaneous attacks and lead to
overmatching force and decisive victory. Equipping our
battlefield systems to transmit, receive, and display
digital data, is fundamental to winning the information war.

Following are descriptions of systems and systems
upgrades in development or in procurement that will help to
ensure that we Win the Information War.

The Army's primary development system to ensure that
our soldiers have the information advantage in the
Information Age is the RAH-66 Comanche armed reconnaissance
helicopter, currently in DEM/VAL. Last January, Comanche
flew for the first time, a very successful flight. In FY97,
we will continue flight test of prototype number 1, complete
manufacture of prototype number 2, and continue development
of the mission equipment package and the T801 engine.
Comanche has the potential to make a major contribution to
winning the information war, but it will also make
significant contributions to the other four modernization
objectives as well. During Operation Desert Storm, our
ground commanders never got the near real-time battlefield
information they needed to make the best tactical, timely
decisions on the employment of battlefield forces.
Comanche, if fielded, along with the Joint Surveillance and
Target Radar System (Joint STARS) and UAVs , will help
correct this most critical deficiency with greatly improved
night/adverse weather reconnaissance and target acquisition,
deep reconnaissance without detection, survivability, and
deployability .

Let me briefly list the capabilities of this
revolutionary helicopter under the remaining modernization
objectives. (1) The Comanche's capabilities in extended
range operations, low observability, target recognition,
digitized communications, and armed reconnaissance as well
as its ability to quickly respond to a "mission divert"
makes it a superior vehicle for deep "precision strike"
missions against time sensitive targets -- especially
targets so dangerous they must be confirmed killed or
reengaged. (2) Comanche provides strategic agility to
"project and sustain" (rapid inter/intra-theater
deployability) with technical superiority that gives the
maneuver commander a decisive force on the battlefield
worldwide. Its self -deployment range of 1,260 nautical
miles is sufficient to self-deploy from CONUS to Europe,
Africa, and the Middle East, and it will require
significantly less maintenance support than today's
helicopters. (3) Comanche will "dominate maneuver" in its
cavalry role by quality armed reconnaissance, developing the
situation, providing security, maneuvering rapidly across
the battlefield to the critical places and synchronizing
other scout reconnaissance assets and weapon systems on the

digitized battlefield. Designed for rapid rearm, refuel,
and repair, the Comanche will increase the operational
tempo. (4) The Comanche will reduce the potential for
fratricide and "protect the force" through its advanced
electro-optical sensors, aided target recognition and
sensor/weapons integration. Its night/adverse weather air
defense capabilities are unmatched as is its capability to
conduct armed reconnaissance and provide early warnings in
all conditions to include day/night/adverse weather. It is
clear that Comanche is tailor-made for the new world order.
Early Operational Capability (EOC) unit fielding is
scheduled for FY02 with six aircraft.

The Army Battle Command System (ABCS) is essential to
realizing the Joint interoperability goal of the Command,
Control, Communications, Computers, and Intelligence {C4I)
for the Warrior concept . Procurement of common hardware and
control nodes for ABCS continues in FY97. Under the ABCS
umbrella, research and development (R&D) continues on the
evolutionary acquisition of the Army Tactical Command and
Control S'.stem (ATCCS) which is key to providing commanders
in the Ar-y's corps and divisions data to synchronize and
direct their forces more effectively.

The ATCCS consists of interoperable automation systems
supporting the five Battlefield Functional Areas (BFAs) :
Maneuver Control System (MCS) supporting the Maneuver BFA;
Advanced Field Artillery Tactical Data System (AFATDS)
supporting Fire Support; Forv;ard Area Air Defense Command
and Control (FAADC2) supporting Air Defense; All Source
Analysis System (ASAS) supporting Intelligence/Electronic
Warfare; and Combat Service Support Control System (CSSCS)
supporting the Combat Service Support BFA. These systems
assist the force commanders in processing information within
the BFAs, planning and controlling operations, and
exchanging information horizontally across the BFAs and
vertically from battalion to Echelons Above Corps (EAC) .

ASAS continues to be a good news story. The program is
implementing Common Operating Environment (COE) , Force XXI,
and Modern Integrated Database (MIDB) additional
requirements above and beyond the Operational Requirements
Document. This has resulted in a restructure of
functionality and performance. The program manager for
Intelligence Fusion is accomplishing all of this with no

additional funding. ASAS is deployed in Bosnia to support
the U.S. Army Special Operations Command in Brindisi, Italy,
the multinational brigade (Finnish, Russian, and American
forces), 1st Armored Division, and V Corps.

AFATDS, the automated fire support command, control,
and communications system will be the first totally
automated fire support system and is interoperable with
existing field artillery systems, the Airborne Target
Handover System/Improved Data Module, other ABCS nodes, and
selected allied fire support systems. AFATDS has been
approved for full-rate production and fielding.

CSSCS is currently in EMD, with Low Rate Initial
Production (LRIP) authority granted by the Army Systems
Acquisition Review Council (ASARC) in February 1995. CSSCS
is an active participant in Brigade Task Force XXI and other
ongoing Army Warfighter Experiments (AWE) and is scheduled
for an Initial Operational Test and Evaluation (lOT&E),
Phase II at Fort Hood, Texas, from September to November
1996. The MCS program will conduct a System Segment
Acceptance Test (SSAT) /Customer Test (CT) in FY96 and an
lOT&E in FY97.

All ATCCS systems will be provided to the 4th Infantry
Division (4 ID) , designated as the Experimental Force (EXFOR)
for Task Force XXI . In support of the lower echelon command
and control and digitization of the battlefield, the Force
XXI Battle Command Brigade and Below (FBCB2) Applique
Program will equip and train a brigade size force during
FY97 for the AWE entitled Brigade Task Force XXI. Appliqu^
sets are being acquired for field exercises to provide
command and control capabilities to platforms that either
have no embedded command and control capabilities or where
existing capabilities are inadequate to meet user needs.

The Army has adopted a technical architecture with open
standards that will enable complete interoperability across
all platforms on the battlefield. The Army is the first
Service to do so. Our technical architecture is based on
widely accepted commercial standards and the Defense
Information Systems Agency's Technical Architecture for
Information Management, and is composed of four elements:
information processing, data transport, and information
standards, as well as a human -computer interface framework.

This architecture is applicable to all strategic, tactical,
and sustaining base information, communications, and
embedded C4I systems. By implementing these well-defined,
widely-known, and consensus-based standards, the Army can
leverage marketplace investments and assure a migration path
into the future. The Army technical architecture has been
selected as the baseline for a Joint technical architecture
to be developed by OSD.

The Command and Control Vehicle (C2V) will enter LRIP
in FY97. FUE is planned for FY99. The C2V will be a fully
tracked, lightly armored vehicle that will ensure a mobile,
responsive, and survivable command and control capability
for armored forces. It is a battalion-through-corps-level
command and control platform which supports operations on
the move and integrates the ABCS components.

In support of higher level command and control, the
Army Global Command and Control System (AGCCS) will migrate
from the current Worldwide Military Command and Control
System support infrastructures to the AGCCS single Common
Operating Environment (COE) . Each of the ATCCS/ABCS
tactical command and control systems will continue
development and implementation of the COE software into
their systems.

The CONUS-based power projection Army is dependent on
military satellite communications to ensure the flow of
critical command and control information to forces deployed
anywhere in the world. To satisfy this critical command and
control communications requirement, the Enhanced Manpack UHF
Terminal (EMUT) program continues in procurement in FY97.
The EMUT provides single channel. Demand Assigned Multiple
Access (DAMA) , secure tactical UHF satellite communications
to corps, divisions, and special operations forces to
support command and control during power projection and
early entry operations. The need for this capability was
shown to be critical during Operation Desert Shield/Desert
Storm. It also satisfies the Joint Chiefs of Staff mandate
to be DAMA and Advanced Narrowband Secure Voice capable,
features which provide for more efficient and effective use
of the limited UHF spectrum resources. Operating in the UHF
frequency band offers the warfighter capabilities for
enroute communications/communications on the move, wider
area earth coverage, and greater overhead foliage and

adverse weather penetration, capabilities which are not
possible in other frequency bands. The Army is the lead
Service, responsible for the procurement of EMUTs for all
Services and Agencies in order to meet the Joint Staff
mandate to have Joint interoperability in DAMA and digital
secure voice communications after FY96.

In FY97, as DoD Executive Agent for the Defense
Satellite Communications System (DSCS) , the Army will
continue to modernize the current large fixed satellite
ground terminals infrastructure. This modernization effort
will improve ground terminal reliability to its original
specification; reduce power consumption; and introduce semi-
automation of manpower intensive functions (first introduced
when DSCS terminals were installed in the late 1970s and
early 1980s) . While this modernization was initiated in
1990 for sustainment purposes, it is now supporting the
current Army downsizing and reduced funding. These ground
terminals will continue to support the high operational
availability required for CONUS-based power projection Army
and other Service deployed forces. In addition, these
modernized terminals will carry out their mission at lower
operation and maintenance costs. The FY97 R&D funds will
complete the development of the medium data rate unit for
the Universal Modem (UM) and procurement funds will initiate
the UM acquisition. The UM will be the replacement for the
1980 deployed AN/USC-28 anti-jam modem that is installed in
more than 100 DSCS locations and is becoming very difficult
to maintain because of the unavailability of replacement
parts. In addition, FY97 RtD will complete the DSCS
Integrated Management System (DIMS) development and start
the effort for the replacement BATSON equipment that
provides the anti-jam command link that is essential for
commanding the DSCS satellites in all environments,
including jamming. R&D funds will continue to support the
Integrated Test Facility at Fort Monmouth, New Jersey, which
is a critical element in support of the DSCS program and a
major factor contributing to the Army's ability to
participate in the development of the future DoD Space
Architecture. Finally, FY97 procurement funds will initiate
hardware acquisition for the large fixed terminal family,
the AN/GSC-52S, the last DSCS terminals to be modernized.

Currently, DSCS provides critical information transfer
to our deployed warfighters at all echelons, as well as,
high data rate secure information transfer in support of
intelligence operations, electronic warfare, and smart
weapons. As the Military-Strategic/Tactical Relay (MILSTAR)
system comes on line (to support a CINC and his Division
warfighters) , the DSCS future mission will be the
information super highway between the sustaining base
(CONUS) and the deployed war fighter at EAC.

The MILSTAR system remains one of our most critical
command and control programs for the deployed Army
warfighter at Echelons Corps and Below. MILSTAR will
provide a worldwide, secure, jam-resistant communications
capability that is urgently needed to prosecute warfighting
missions horizontally and vertically at Corps and Division
levels for special users. The Air Force launched the first
two MILSTAR I Development Flight Satellites in February 1994
and November 1995, and continues to develop the MILSTAR II
satellite, an essential element of the Army's assured
communications connectivity to our deployed warfighters.
The Army's MILSTAR terminal program will acquire two types
of mobile tactical terminals for Army and other Service
needs. The Low Data Rate Man-portable Terminal Program
awarded the full scale production contract in February 1996
for more than 300 terminals to meet Joint Service needs.
The medium data rate HMMWV-mounted terminal program awarded
the LRIP contract in February 1996 and terminal deliveries
are scheduled in phase with launch of the first MILSTAR II
satellite in FY99. Each of these two awards was made under
the full provisions of our acquisition reform initiatives,
resulting in savings of almost 60 percent when compared to
the original budget estimates.

A key element of any digitization architecture is
reliable and secure digital data links between fighting
systems and commanders. The combat proven Single Channel
Ground and Airborne Radio System (SINCGARS) , with both voice
and data channels, is an important link in any digitization
scheme .

Conduct Precision Strike

The Force XXI commander must have rapidly deployable
capability to conduct deep attacks against enemy maneuver
formations, logistical centers, and command and control
nodes. To successfully attack targets with precision at
extended ranges requires the capability to see deep, to find
designated high-payoff targets, and then transmit that
information/intelligence in near-real time to firing units
employing advanced weapons and munitions systems to destroy
those targets. To accomplish this, the Army must have
modern artillery, attack helicopters, missile systems with
adequate range and firepower, effective munitions, and
superb Reconnaissance, Surveillance, and Target Acquisition
systems among which are included reconnaissance helicopters
such as Comanche and a family of modern UAVs .

Following are descriptions of systems and systems
upgrades in development or in procurement that are key to
Conduct Precision Strikes.

Crusader, formerly the Advanced Field Artillery System
(AFAS) and the Future Armored Resupply Vehicle (FARV) , is
currently in DEM/VAL. It is the Army's top priority, next
generation ground combat system, providing leap-ahead
indirect fire cannon and artillery resupply systems for
armored forces. Crusader will provide improved capabilities
in range, rate-of -f ire, time-on- target , accuracy,
survivability, mobility, and ammunition handling speed with
reduced manpower and logistics burdens. Crusader will use
an advanced design armament system and is the "technology
carrier" for other future armored systems -- employing
robotics, advanced fire control computing techniques, self-
protection features, and signature control. FUE is
scheduled for FY05.

In FY97, the Army Tactical Missile System (ATACMS)
Block lA, the extended range version of the combat proven
ATACMS Block I, will begin full -rate production. ATACMS
Block I will end production this year with fielding
completed in July 1997. Last February, the Army
successfully fired the first production representative model
of the Block lA missile. Launched from McGregor Range in
Fort Bliss, Texas, the missile flew approximately 175
kilometers to a target site on White Sands Missile Range in

New Mexico. The test was highly successful and met all
planned objectives. Flight tests continue this spring
leading to an LRIP decision in May.

In July 1995, the Army awarded the contract for the
continued development of the ATACMS Block II missile.
ATACMS Block II will provide the means to attack and destroy
moving and stationary threat targets at long-ranges with
high precision. In combat, the system delays and disrupts
enemy forces in the deep battle, thereby interrupting threat
force planning for operations in the close battle area.
During FY97, ATACMS Block II development continues with
conduct of the critical design review, an engineering
development test flight, and integration activities
associated with the BAT, Brilliant Anti-Armor Submunition.

Continuing in EMD in FY97, BAT completes contractor
development testing in preparation for integrated flight
tests with the Block II missile. The BAT, a self -guided
submunition, uses both acoustic and infrared seekers to
locate and attack moving armored combat vehicles without
human interaction. BAT submunitions, carried deep into
enemy territory by ATACMS Block II missiles and dispensed
over areas of high-payoff targets, autonomously detect,
attack, and destroy individual targets. The FUE date for
ATACMS Block II with BAT is FYOl.

The BAT Pre -Planned Product Improvement (P3I) DEM/VAL
continues in FY97 with captive flight testing of the two
competing multi-mode seeker concepts. The BAT P3I, through
seeker and warhead improvements, adds cold sitting armor,
heavy multiple launch rocket systems, and surface-to-surface
missile transporter erector launchers to the BAT target set.
ATACMS Block II and IIA are the delivery vehicles for BAT
P3I. The .extended range ATACMS Block IIA missile begins
development in FY98 .

The ATACMS/BAT programs are currently undergoing a
joint Army/industry initiative to reduce the overall cost.
The President's budget request already incorporates
initiatives from Phase I of the effort. These low risk
initiatives resulted in a cost avoidance to the Army of $381
million. Higher risk initiatives in Phase II of the effort

are still being evaluated. These initiatives include multi-
year contracting and reinvestment strategies and have the
potential to save $565 million for the Army through FY08.

Sense and Destroy Armor (SADARM) continues in LRIP. A
product improvement program is scheduled to begin in FY97.
The product -improved submunition is expected to yield a 30
percent increase in effectiveness. SADARM is a fire-and-
forget, sensor-fuzed submunition designed to detect and
destroy lightly armored vehicles, primarily self-propelled
artillery. It is scheduled for fielding in FY99.

The Extended Range Multiple Launch Rocket System (ER-
MLRS) is scheduled to begin LRIP in the fourth quarter of
FY96 with FUE scheduled for FY98. The extended range rocket
increases the range capability to 45(+) kilometers as
compared to the current basic tactical rocket range of 30
kilometers. The program includes the addition of a low-
level wind measuring device on the M270 launcher to enhance
accuracy and effectiveness, and incorporates a self-destruct
fuze on the submunitions to increase safety for friendly
maneuver forces.

The Army is also continuing development of the MLRS
Improved Launcher Mechanical System (ILMS) and Improved Fire
Control System (IFCS) in FY97. These modifications have
been linked to provide a one time major upgrade to all MLRS
launchers starting in FY98. These modifications include an
embedded GPS, upgraded fire control computer, improved
launcher load module drive system, and improved built-in
test equipment. These upgrades will increase crew/launcher
survivability, reduce operation and sustainment costs, and
mitigate component parts obsolescence.

Joint STARS is supported in FY97 to complete the
Limited Production of Medium and Light models of the Ground
Station Modules (GSM) while continuing with P3I to migrate
the system to a single Common Ground Station for use by all
Services. The Joint STARS system has been a major
contributor to the International Forces (IFOR) peacekeeping
operation in Bosnia. Once again, the system has proven that
its near-real time information collection capabilities play
a critical role in total intelligence production and

dissemination during peacetime and will provide the
commanders superior targeting and battle management
capabilities in future combat operations.

The FY97 annual buy of additional Paladins will allow
the Army to provide this howitzer to all cannon active
component artillery battalions and also to begin fielding to
the 14 National Guard battalions. The Paladin overcomes
many operational limitations and outdated technology of the
current M109 howitzer and provides longer range fires and
substantially improved survivability through "shoot and
scoot" techniques. This program is a true representation of
government and industry cooperation.

Army forces require modern munitions and the assurance
that munitions expended in a conflict can be replenished in
a timely manner. Army forces also require a steady supply
of training ammunition to ensure soldiers are constantly
ready to answer when called on to support our nation. The
FY97 request fully resources the Army's requirements for
training ammunition with a modest drawdown of war reserves,
and continues an affordable build-up of modern munitions.

This nation requires a viable munitions industrial base
to ensure ammunition supplies in peacetime and the
capability to replenish ammunition stocks after a conflict.
This industrial base is difficult to maintain in today's
peacetime, resource constrained environment. The Army
continues to work with industry to develop affordable and
more efficient courses of action that provide for future
needs .

The Army also requires an effective munitions logistics
base to support operations in peace and war. The FY97
request contains resources to support a necessary
demilitarization program which frees storage for serviceable
munitions while helping to reduce storage sites in support
of the Base Realignment and Closure (BRAC) '95 program.

Dominate the Manmuver Battle

Decisive operations require controlling vital land
areas and the destruction of the enemy's land combat
capability. The Army must always maintain a substantial
overmatching capability in maneuver forces. It is in the

maneuver battle that the risk to our soldiers is highest.
Advanced weapon systems and technology will continue to
proliferate around the world. To ensure swift, decisive
victory with minimum casualties, the Army combined arms team
must be able to outthink, outmaneuver, and outshoot its
adversaries day or night, in any weather.

Following are descriptions of systems and systems
upgrades in development or in procurement that will help to
ensure that we Dominate the Maneuver Battle.

The Army is pursuing a technology insertion approach to
modernization by integrating digital and advanced infrared
sensors into Abrams tanks and Bradley Fighting Vehicles and
modifying the AH-64 Apache helicopter to the Longbow
configuration with a leap-ahead day/night/adverse weather
target acquisition radar, f ire-and-forget HELLFIRE missiles,
and advanced digital processors and communications. These
upgrades are all compatible and will allow these systems to
exchange friendly and enemy position data directly from
video display to video display. In addition, all can link
with scout helicopters and artillery fire direction centers,
and transmit data directly to C2V and to ABCS components.
This powerful linkage of combat systems allows the commander
to provide a common view of the battle to all elements,
speeds -up the tempo of maneuver, and reduces the potential
for fratricide. It allows us to "dominate the maneuver
battle" by dominating the information battle.

Javelin provides our soldiers a man-portable, highly
lethal system against conventional or reactive armor threat.
It features f ire-and-forget technology with a range in
excess of 2,000 meters in adverse weather, day or night, and
weighs less than 50 pounds. The Army, in cooperation with
its Joint Venture partners (Texas Instruments/Lockheed-
Martin) , continues an aggressive cost reduction program that
will significantly reduce the total cost of the Javelin
program by an estimated $1.4 billion. Savings will be
achieved by reducing Javelin production from 14 to 11 years,
taking the savings, and reinvesting them into the program.
The program begins its full -rate multi-year production
contract in FY97. A recent program budget decision to
provide additional procurement money from FY99-01 will
accelerate production duration from 11 to eight years which
should result in additional savings.

The Improved Target Acquisition System (ITAS) for the
TOW (Tube -Launched, Optically-Tracked, Wire-Guided) missile
will complete EMD and enter LRIP late in FY96 . Because of
funding constraints, FY97 procurement funding has been
combined with FY98 funding to maximize production
efficiencies. ITAS will improve the target detection,
recognition, and engagement capability of the HMMWV mounted
and ground launched TOW missile by incorporating a Second
Generation Forward Looking Infrared (FLIR) capability, a
laser range finder, and aided target tracking features.
This program is the pathfinder for Second Generation FLIR
systems and is the foundation for the IBAS (Improved Bradley
Acquisition System) . The high degree of commonality among
Second Generation FLIR systems provides a strong production
base and reduced logistics costs.

We continue to upgrade older Ml tanks to the M1A2
configuration. To date, more than 130 Mis have completed
the upgrade process, and we have fielded 85 to operational
units. We also are continuing the Bradley A3 upgrade
program, and are working to bring this system on line more
quickly. Longbow Apache continues in production in FY97 .
Currently, the Army is negotiating a five year multi-year
contract as recommended by Congress. Once fielded, Longbow
Apache's all weather target acquisition system will provide
first-ever long-range detection and automated
classification, prioritization, and target hand-over for the
modernized Apache team and the other combat and command and
control systems linked to it. For the first time ever, a
coordinated, rapid fire, precision strike capability will be
available to the maneuver force commander on a 24 -hour basis
in day/night/adverse weather conditions. Longbow HELLFIRE
will continue in LRIP in FY97. The Army, in coordination
with its Joint Venture partners (Lockheed-
Mart in/West inghouse) , has in-place an aggressive cost
reduction plan that will reduce the production program from
10 to eight years while reducing the total procurement cost
by a projected $860 million. The addition of the fire-and-
forget Longbow HELLFIRE to our missile inventoiry will
significantly enhance the survivability of our Apache
helicopter fleet and provide the battlefield commander
flexibility across a wide-range of mission scenarios.

The Grizzly, formerly the Breacher, program will
continue in EMD in FY97. Efforts will focus on design
refinement and prototype modifications. The system is based
on the Ml Abrams chassis and is equipped with a full-width
mine clearing blade and a power-driven excavating arm to
support maneuver force mobility through minefields, rubble,
tank ditches, wire, and other obstructions. The Army
currently has no system with these capabilities. Its
importance cannot be overstated because the Grizzly will
provide the combined arms team with an integrated, counter-
mine and counter-obstacle capability in a single, survivable
vehicle .

In FY97, the Line-of -Sight Antitank (LOSAT) program
remains in the technology demonstration phase to continue to
mature the Kinetic Energy Missile (KEM) and Advanced Fire
Control System. Numerous studies and analyses have
suggested that the KEM's overwhelming lethality can help
satisfy the critical anti-armor needs of our early entry
forces .

The Army is committed to a Follow-on to TOW (FOTT)
program, formerly called Advanced Missile System-Heavy (AMS-
H) , to address TOW stockpile depletion and provide the force
increased range, survivability, and lethality to overmatch
current, emerging, and postulated threats. Results from the
Army's Anti-Armor Requirements and Resource Analysis clearly
demonstrate that the FOTT missile gives the ground-based
early entry forces and TOW-equipped Bradleys greatly
improved lethality while making the entire force more
survivable. The Army continues to fund critical efforts
leading toward an engineering and manufacturing start in
FY98. Requested funding in FY97 will support modeling,
information flow to potential bidders and government test
facilities as an opportunity for potential bidders to
demonstrate the technical merits of their proposed hardware
concepts .

Although the Army has no plans for continued TOW
missile production, funding has been requested in FY97 to
continue repairs to the missiles for increased effectiveness
in cold weather; provide for support for deliveries of
missiles procured in FY95; and initiate production line
shutdown.

The Multi- Purpose Individual Munition/Short Range
Assault Weapon (MPIM/SRAW) is the dismounted soldier's
lightweight, shoulder-fired weapon for short-range/urban
terrain combat. This weapon will have the capability to
accurately fire at targets up to 500 meters distance, from
enclosures or in a prone position, and thereby increase
survivability. The robust warhead has the capability to
defeat modern armored personnel carriers and incapacitate
personnel in reinforced masonry buildings and inside
bunkers. The Army and the USMC are partners in this
cooperative development program which has reduced
development and procurement costs. The Army's MPIM/SRAW
program uses the same launcher and flight module as the
USMC's Predator anti-tank program. This cooperative efforts
will reduce development and procurement costs for both
Services. FY97 funding continues EMD for the MPIM/SRAW
program.

BATTLEFIELD DIGITIZATION

The creation of the digitized battlefield is critical
to the Army's efforts to maintain a modern, but smaller,
force capable of decisive victory -- Army XXI. In order to
field Army XXI, we must employ digital information
technology across the battlefield at all levels. Digital
information systems provide the capability for a geometric
increase in the amount of information gathered and the speed
with which that information can be analyzed, tailored, and
provided to the warfighters at appropriate levels of
command .

Simply moving information around the battlefield is not
the answer. The ultimate objective must be improved
situational awareness to ensure integrated operations
through all echelons within the Army and at both the Joint
and Combined levels of warfare. Clearly, when a commander
can rapidly see where his forces are, what condition they
are in, make decisions and issue orders; he can concentrate
combat power at the time and place on the battlefield to
dominate the maneuver battle.

The Army has made significant progress over the last
year towards developing and fielding a digitized
experimental force, the EXFOR! An Army Digitization Master
Plan guides the Army Digitization Office's efforts to

provide information technology to redesign the Army by the
year 2000. During the last year, the Army has conducted two
key experiments with digital information systems: one with
mechanized troops at Fort Knox, Kentucky, and one with light
infantry at both Fort Drum, New York, and the Joint
Readiness Training Center at Fort Polk, Louisiana. We
gained great insights into the value of digitization for
enhancing mission planning, decision making, execution, and
increasing tempo on the battlefield. The Army has developed
and approved the Army technical architecture, which is
"building code" for Army command and control systems. As
mentioned earlier, the Army's technical architecture is
being used as a start point for development of a DoD/Joint
technical architecture. This will greatly enhance
integration among the Services.

At the brigade and below level, we are experimenting
with an applique to bring digitization quickly into the
Army. The prototype applique sets are currently being
installed on EXFOR systems at Fort Hood, Texas, in
preparation for the kickoff of the brigade level AWE. The
applique, along with programs to upgrade digital systems on
the M1A2 Abrams Main Battle Tank and the M2A3 Bradley
Fighting Vehicle to an open architecture, will lead to a
seamless digital communications architecture from the
tactical to the strategic level and set the stage for a
successful development of Army XXI.

Emerging systems such as Joint STARS, Comanche, and
Crusader will enhance the digital systems as they are
fielded. They will be brought on line under the rules of
the architectures in place and be more cost effective as a
result. The future battlefield will link the force at every
level and across the globe. Space and sea information will
be gathered and analyzed with the ground force information
and tailored for every level of operations from the corps
commander to the squad leader. Commanders will be able to
"see" the logistical status of their units in real time.
Digitization will speed the tempo of the battle and increase
lethality and survivability of all friendly formations.

ARMY SCIENCE AND TECHNOLOGY STRATEGY

To ensure that the Army science and technology (S&T)
program is consistent with National Security, Defense, and
U.S. Airmy requirements, the Army Science and Technology
Master Plan (ASTMP) is prepared annually. This strategic
plan for the S&T program is based on the Army leadership's
vision of the future Army, as constrained by realistic
funding limits. It serves as "top down" guidance from the
Headquarters, Department of the Army, to all Army S&T
organizations, and it provides a vital link from the Defense
S&T Strategy and Defense Technology Area Plan to the Army
major commands, major subordinate commands, and
laboratories. We are vigorously supporting the five S&T
management principles articulated in DoD's S&T Strategy:

1. Transition technology to address warfighting needs;

2 . Reduce cost ;

3. Strengthen the commercial-military industrial base;

4. Promote basic research; and

5. Assure quality.

The Army S&T vision is to:

• Provide demonstrations of affordable weapons system
concepts that meet the warfighter needs by being
responsive to diverse, new-era threats and the
requirement for force projection.

• Provide a world-class network of government and
private S&T capabilities that can maintain land
warfare technology superiority, exploit rapid
advances in information technology, and provide the
Army with a smart buyer capability.

• Encourage reduced cost to the material acquisition
process through the early retirement of technical
risk and requirement uncertainty and through support
for acquisition reform.

The Army's S&T program is designed to provide the
technology to support the Army's vision for the future.
Force XXI, and to provide opportunities to reduce casualties
across the spectrum of possible conflict.

The Army S&T Agenda to support this vision is to:

• Comply with the Defense S&T Strategy and Army Force
XXI vision.

• Conduct "world-class," relevant research.

• Strengthen the requirements process through:

- System of systems demos

- Advanced Technology Demonstrations (ATDs) and
Advanced Concept Technology Demonstrations

(ACTDs)

- Synchronization of S&T with Training and
Doctrine Command (TRADOC) AWEs and DoD
Joint Warfighting Experiments (JWEs)

- The Advanced Concepts and Technology II (ACT II)
program.

• Provide affordable options with a focus on system
upgrades .

• Improve technology transition -- the coupling of S&T
to development programs.

• Improve technology transfer and "spin on" by forming
partnerships with academia and industry.

• Stabilize S&T priorities and funding.

• Improve program execution and oversight.

• Attract, develop, and retain quality scientists and
engineers .

• Downsize the infrastructure.

RESOURCING THE STRATEGY

The Army strives to maintain stable funding for the
Army's 6.1, 6.2, and 6.3 programs, consistent with the long-
term nature of basic and applied research. However, because
we must protect readiness and the quality of life of today's
force the FY97 budget request is 2.2 percent lower (4.4
percent lower considering inflation) than the FY96 request
and 8.3 percent lower (10.3 percent lower considering
inflation) than the FY96 appropriation. Today's
modernization investment decisions will determine the legacy
we leave future commanders and their troops and will
determine the readiness of Force XXI to deal with agrarian,
industrial, and/or Information-Age enemies in the future.

In the basic research category (6.1), the Army
maintains a strong peer-reviewed scientific base through
which the underpinnings of land warfare technology can be
further developed. Peer reviewers include many of this
nation's leading scientists and engineers from the National
Academy of Sciences, National Academy of Engineering,
Institute of Medicine, and the Army Science Board. In
addition to conducting in-house research. Army scientists
monitor developments in academia and industry and evaluate
the many proposals received for 6.1 funds.

The applied research category (6.2) focuses on specific
military needs and develops the concepts and components to
enable a variety of weapons system applications. We are
vigorously pursuing the following three high priority
technologies cited in the Defense S&T Strategy: information
technology; modeling and simulation; and sensors.

The final S&T program funding category-- advanced
technology development (6 . 3) --provides the path for the
rapid insertion of new technologies into Army systems, be
they new systems or product improvements. In the 6.3
category, components are integrated and experimental systems
are demonstrated to prove the feasibility and military
utility of the approach selected. It is the 6.3 program
that funds our ATDs and ACTDs. In recent years the Army has
increased its commitment to system of systems demonstrations
which seek to identify the lowest cost approach to
accomplish a particular mission. These programs have
central oversight and often include a number of separate
ATDs . With supplementary OSD funding for leave behind
equipment, many of these have now been converted into ACTDs.

Advanced Technology DemonatratioBB (ATDs)

ATDs are characterized by the following: large-scale
both in resources and complexity; the operator /user involved
from planning to final documentation; tested in a real
and/or synthetic operational environment; finite schedule,
typically five years or less; cost, schedule, and objective
performance baselined in an ATD Plan approved by the Deputy
Assistant Secretary for Research and Technology; and exit
criteria agreed upon by the warfighter and ATD manager at

program inception before the technology in question will
transition to development. Active participation by the
user, as well as the developer, is required throughout the
demonstration. A simulation plan and at least one
demonstration at a TRADOC Battle Lab is required. This
enables the user to develop more informed requirements and
the materiel developer to reduce risk prior to the
initiation of full-scale system or upgrade development.
ATDs seek to demonstrate the potential for enhanced military
operational capability and/or cost effectiveness. ATDs are
developing and demonstrating critical technologies ranging
from digitization for the dismounted warrior to integrated
survivability for future rotorcraft and armored vehicles.

Since the Army first approved ATD programs in FY90, we
will have completed a total of 19 by the end of FY96 and
transitioned a variety of technologies into development or
other Army uses. Examples range from the first soldier-
based communications capability now being manifest in the
Land Warrior EMD program, to the technology underpinning
distributed interactive simulation, to our first ever
capability to remotely detect mine fields and clear off-
route mines. Additionally, many of our ATDs have helped the
Army enlarge its dominant battlespace knowledge through
better sensor-to-shooter linkages, target recognition, and
sensor fusion.

Advanced Concept Technology Demonatrationa (ACTDa)

ACTDs are jointly planned by the warfighter and
acquisition communities. They allow operational forces to
experiment in the field and in simulation with new
technology and concepts to determine potential improvements
in doctrine, training, leadership, organizations, tactics
and warfighting concepts. A CINC sponsor is required.
Following successful demonstration with the sponsor, the
capability is rapidly prototyped and left for up to two
years with the CINC, thus giving him an interim, stay-behind
capability pending formal acquisition decision. The Army
has four approved ACTDs :

1. The Precision/Rapid Counter - Multiple Rocket Launcher
ACTD is developing and demonstrating a system-of -systems
concept that integrates surveillance, target acquisition,
command, control, communications, weapons delivery, and

combat assessment functions for counter battery
operations against a mobile threat that can hide in
caves. Successful experiments have already been
conducted at Fort Hood using the Army's Integration and
Evaluation Center near Fort Belvoir, Virginia, to
coordinate the combination of simulation and live
exercise. Later this year there will be a demonstration
in Korea of a much improved counterfire capability
against simulated enemy long-range, multiple rocket
artillery operating from heavily fortified and protected
positions in mountainous terrain. Emerging technologies
will be integrated with advanced concepts and doctrine to
ensure timely and responsive target acquisition and
streamlined command and control to destroy enemy multiple
rocket launchers swiftly, thereby protecting our troops
in South Korea.

The Rapid Force Projection Initiative (RFPI) ACTD is
demonstrating technologies, concepts, and tactics to
permit our lift-constrained early entry forces to defeat
heavier forces without compromising their deployability .
RFPI employs a "Hunter/Stand-off Killer" approach which
relies on forward deployed sensors connected to
lightweight, precision, indirect fire weapon systems to
attack an enemy armored force beyond direct fire range.
Several stand-off killers will be evaluated, including
the High Mobility Artillery Rocket System (HIMARS) and
guidance for the MLRS, guided mortar rounds, smart mines,
and the Enhanced Fiber-Optic Guided Missile (EFOG-M) .
Simulations by TRADOC and government contractors have
shown high potential for the RFPI approach to improving
the survivability, lethality, and deployability of our
"first to fight" forces. A major field exercise to
validate the hunter/stand-off killer concept for light
forces is scheduled for FY98.

The Joint Countermine ACTD is a joint effort by the Army,
USMC, and Navy to demonstrate improved technology,
concepts, doctrine, tactics, and organizations to counter
the mine threat from the sea, across the beach, and
inland. The Army has the lead for the detection and
neutralization of the landmine threat. The emphasis is on
remote detection and neutralization, both by vehicle
mounted and dismounted approaches .

The Joint Combat Identification ACTD is an Army lead,
all-service effort to demonstrate a jor'.nt, integrated
air-to-ground and ground-to-ground combat identification

ability. The ACTD will quantify the contributions of
identification techniques and improved battlefield
situation awareness to reduce fratricide and increase
combat effectiveness. Specific technologies included in
the ACTD are: a BCIS pod for fixed wing and rotary wing
aircraft for point-of -engagement friend identification;
enhanced forward air controller capability with
integrated BCIS and Situation Awareness Data Link (SADL) ;
modified SINCGARS System Improvement Program (SIP) radios
that will provide automatic target location query for
friend identification; and situation awareness data from
the digitized battlefield delivered to the gunner's
sight .

SCIENCE AND TECHNOLOGY OBJECTIVES

To better focus our scarce S&T resources on the
customer's highest priority needs, the Army has established
a set of 200 Science and Technology Objectives (STO) . Each
STO states a specific, measurable, major technology
advancement to be achieved by a specific fiscal year. It
must be consistent with the funding available in the current
year budget and the Program Objective Memorandum (POM) .
Only major, measurable, and foreseeable objectives are
designated as STOs . Not every worthwhile, funded technology
program is cited as a STO because the Army must reserve some
program flexibility for the laboratory or Research,
Development and Engineering Center (RDEC) director to seize
opportunities within his or her organization, based upon the
organization's local talents and resources.

As is the case with ACTDs and ATDs, STOs are used by
the Army S&T community to focus the program, practice
management by objectives, and provide feedback to our
scientists and engineers regarding their productivity and
customer satisfaction. STOs are reviewed and approved
annually.

TECHNOLOGY TRANSFER

The Army continuously monitors new developments in the
commercial sector looking for military applications. This
"spin-on" of technology is of growing importance to the Army
S&T program -- not only from the domestic R&D programs but
also from development overseas. The Army has two

commercially focused programs to leverage technology for
application to Army platforms: the National Automotive
Center and the National Rotorcraft Technology Center. Both
of these centers involve a small in-house staff monitoring
contractual R&D efforts .

Because of our tight resources, it is important that we
work with other government research agencies such as the
Defense Advanced Research Projects Agency (DARPA) to fully
leverage our research and development (R&D) efforts. To
this end, we have a number of efforts in conjunction with
DARPA to meet real warfighting needs. These include:

- Advanced seeker technology;

- Infrared Focal Plane Arrays;

- Aerostats (missile defense) ;

- Battlefield Awareness and Data Dissemination ACTD,
which will be jointly tested in the Task Force XXI
Brigade ;

- Counter Sniper;

- Advanced sensors such as synthetic radar mapping;

- Small arms protection for the individual warfighter;
and

- Helmet mounted displays.

Other Army initiatives strengthening technology
transfer include:

o Cooperative R&D: It is Army policy to actively
market technology that can benefit the public and private
sectors as long as the technology clearly has applicability
to Army needs, and to respond quickly to requests for
technical assistance. The mechanisms for accomplishing this
are Cooperative R&D Agreements (CRDAs) , the Construction
Productivity Advanced Research (CPAR) program, Patent
Licensing Agreements (PLiAs) , and technical outreach
programs. The cumulative Army totals from 1988 to 1996 are
690 CRDAs, 71 CPAR agreements, and 55 PLAs . Of these 816
agreements, 487 were still active as of 1 March 1996. The
Army has more cooperative agreements than all the remainder
of DoD combined.

o SBIR Programs: The Small Business Innovation
Research (SBIR) Program was established in 1982 by Congress.
The Army is a key participant in this DoD-wide program to

stimulate technology innovation in small businesses to meet
Federal R&D needs. The FY95 Army funding for this program,
which has had some remarkable successes, was $90 million,
which includes $4.6 million for the Small Business
Technology Transfer (STTR) program. Our estimated FY96
program is $86 million, including $6 million for STTR.

o University Research Centers: The policy is to
further Army basic research objectives by leveraging
research programs in our world-class academic institutions.
To accomplish this, the Army Research Office in Research
Triangle Park, North Carolina, sponsors research through the
Army Center of Excellence Program and through the Defense
University Research Initiative. Through these programs the
Army focuses active research participation with more than 20
American universities.

o Advanced Concepts and Technology II (ACT II)
program: The ACT II program, begun by Congress in FY94,
continues to fund competitively selected proposals from
industry to demonstrate promising technology, prototypes,
and nondevelopmental items of keen interest to all the
TRADOC Battle Labs. The program provides seed money (a
maximum of $1.5 million) for one year, proof -of -principle
demonstrations of relatively mature/high-payoff concepts
proposed by non-Army sources. In 1994, ACT II funded a
total of 28 projects, and in 1995 we supported an additional
35 efforts. We expect to initiate another 24 new starts in
1996 for evaluation by the TRADOC Battle Labs.

PROJECT RELIANCE

In November 1991, all three Service Acquisition
Executives directed full implementation of Project Reliance
in their respective Services. In November 1995, Dr. Anita
K. Jones, the Director of Defense Research and Engineering,
joined the Services and Defense Agencies in the Reliance
process. She formed the Reliance Executive Committee to
strengthen Reliance's role in the DoD strategic planning
process and continue to improve Service/Agency S&T
coordination. Implementation of Defense S&T Reliance also
responds to (and provides inputs for) a number of important
management functions and planning processes including the

budget planning process and development of technology
investment plans through the Defense Technology Area Plan,
and updates of the Defense S&T Strategy.

The goals of Defense S&T Reliance are to:

• Enhance S&T;

• Ensure critical mass of resources to develop "world-
class" products;

• Reduce redundant capabilities and eliminate
unwarranted duplication;

• Gain efficiency through collocation and
consolidation of in-house work, where appropriate;
and

• Preserve the Services' mission-essential, Title 10
capabilities.

Managing technology development is a dynamic process,
and the S&T activities of the Services and Agencies are not
islands unto themselves. The notion of "leveraging" is
based on a simple fact: The Services' individual S&T
accounts cannot fund all the R&D activities that any one
Service needs.

INFRASTRUCTURE

Laboratories and RDECs are the key organizations
responsible for technical leadership, scientific
advancement, and support for the acquisition process.
Working at a diversified set of physical resources, ranging
from solid-state physics laboratories to outdoor
experimental ranges, these personnel conduct research,
develop technology, act as "smart buyers," and provide
systems engineering support to fielded systems for the total
Army.

The Army is consolidating laboratory and R&D center
facilities, eliminating aging and technologically obsolete
facilities, and leveraging relevant facilities of
contractors and the other military services. From FY89 to
FY99 the Army will close seven sites out of 31 labs and
RDECs through BRAC decisions and reduce our in-house

lab/center by 28 percent. Our in-house facility investments
are focusing on those unique capabilities that truly must be
owned by the Army itself.

Converting the Army Research Laboratory to an open,
federated laboratory system is a major initiative that has
caught the imagination and strong support of government,
industry, and university researchers and leaders. The Army
awarded three cooperative agreements in January 1996,
establishing Federated Laboratories: Advanced Sensors,
Advanced Displays, and Telecommunications. Partners include
Lockheed Sanders, Rockwell International Corporation, and
Bell Communications. Besides these industrial partners,
each consortium as a minimum consists of at least two
academic institutions, one of which is an Historically Black
College or University or Minority Institution. The
partnerships will focus on basic research using facilities
that already exist in the government, in industry, and in
universities. The Army Research Laboratory is in the
process of developing the definitive plans to be
collaboratively executed over the next 12 months. Following
the lead of the Senate Authorization Committee, the Army
will await clear evidence of success with these partnerships
before proposing to expand this initiative. Meanwhile, the
Army need for software and simulation technology will be
pursued through more traditional means.

Highly motivated, competent, well- trained people are
essential to the success of the Army SiT strategy. Keeping
the in-house work force technically competent in a rapidly
changing environment is a high priority objective for the
future. The Reinvention Laboratory initiative allows
revised procurement rules and personnel initiatives which
will assist in meeting the challenge. Allowing Army
scientists and engineers to perform more research at the
bench has long been recognized as the number one recruitment
and retention factor. Letting them share that bench with
the best in class from industry and academia via the open,
federated laboratory initiative will clearly strengthen the
smaller Army laboratory system of the future.

ACQUISITION REFORM

Acquisition reform is absolutely critical to our
modernization program and the future readiness of the force.
In our resource constrained environment, we must acquire our
weapon systems and equipment, supplies, and services far
more efficiently than in the past. Each year, the Army
places more than $32 billion on contract. By creating
efficiencies within our own operation, we will provide badly
needed savings to reinvest in modernization and other high
priority needs.

The Army is making steady progress. We have been
working hard to get as much of acquisition streamlining
reform and better business processes into the procurement
and acquisition system from all fronts as quickly as
possible. Much has been accomplished, including the
elimination of military specifications, the adoption of
commercial and performance standards, and reduced internal
management. We are reaching the point where this needs to
be viewed as continuous process improvement rather than
radical reform. We need to constantly improve and
streamline the acquisition system.

The Army S&T program is contributing in several ways.
Our ACTDs will contribute by getting small quantities of new
equipment quickly to our operational forces for a two year
period, directly providing a limited go-to-war capability.
SScT support of our AWEs is helping the Army evaluate non-
developmental and commercial technology solutions. Finally,
closer coupling with the Program Executive Officer (PEO)
organizations and more robust risk reduction within the S&T
domain is permitting a combined Milestone I and II for
selected programs with a transition directly from S&T to
EMD. The elimination of DEM/VAL phase results in
significant savings in time and cost.

Comanche is a model program for acquisition reform
initiatives. We have eliminated all non-essential military
specifications and streamlined the test plans. The Army
decided to build only two early flight test models, formerly
called the DEM/VAL phase, and immediately proceed, using the
same two early flight models, to EMD. Essentially, we
combine DEM/VAL and EMD into one phase. With success there,
we will buy six pre-production models. These will go to our

troops in the field as Early Operational Capability (EOC)
systems. Upon completion of that evaluation, we will do a
limited lOT&E and move right into LRIP. The cost savings
are significant.

How can we do this? There are two reasons. One,
entrepreneurial management in the Army and industry knows
that we don't need to create a superfluous trail of
paperwork and associated expense. Second, modern,
simulation-based computer-aided design techniques. This
allows the entire aircraft to be designed right down to the
last nut and bolt and tested through simulation. Then, when
the Army releases the build to parts the first time, the
rework and scrap rate is minimal. The first helicopter in
the air is very close to the final production model.

We have identified substantial savings as the result of
acquisition reforms applied to missile systems. The Army
conducted an intense cost reduction study before entering
production on the Javelin. We used all of the streamlining
methods, including an Integrated Product Team. The net
result was a savings over the number of missiles we plan to
buy of $1.4 billion or roughly 12 percent of this $12
billion program. Similar savings are being realized in the
Longbow HELLFIRE and ATAO^IS/BAT programs. As I mentioned
earlier, we also have realized remarkable savings in our
ground terminals for the MILSTAR satellites.

We have also significantly streamlined acquisition
operations. The Army Materiel Command (AMC) has reduced the
time it takes to award a contract by 29 percent and the time
it takes to deliver a product by 38 percent. We are
aggressively expanding the use of credit cards with a goal
that they be used for 80 percent of all purchases under
$2,500.

The Congress has assisted us considerably in these
endeavors, notably by passage of the Federal Acquisition
Streamlining Act of 1994 and the Federal Acquisition Reform
Act of 1995, enacted as part of the National Defense
Authorization Act for FY96.

In terms of process, we are doing our very best to
energize, educate, and solicit "buy in" from our acquisition
entities in the field. The managers and their staffs in the

field are where the action really happens, and we are
empowering our work force to practice acquisition reform
initiatives. One of our primary vehicles is the Army
Roadshow series. There has been highly active involvement
by all senior leaders in the Army. With Roadshow IV, we
traveled to 10 sites throughout the United States with
three -day seminar/workshops to train our personnel on
performance specifications and best value source selection.
We also trained with industry. Roadshow V began in March at
the Army Missile Command in Huntsville, Alabama. This is
the first of 13 sessions planned in 1996. This series has
been so successful that our sister Services have adopted the
Roadshow format and content .

The Army is presently reengineering our Acquisition
Corps, both military and civilian. Our vision is to develop
a small, premier professional corps of acquisition leaders,
willing to serve where needed, and committed to developing,
integrating, acquiring, and fielding systems critical to
decisive victory for the 21st century. Congress has
provided a tool to help accomplish this goal. The
Acquisition Work Force Personnel Demonstration Program in
Section 4308 of last year's Defense Authorization Act
provides the authority to suspend personnel laws and
regulations governing the acquisition work force that may
impede our acquisition mission and to replace them with
reengineered processes of our own design. This authority
will prove immensely valuable in instituting a cultural
change and will allow us to evaluate improvements in
personnel policy designed to enhance the quality,
professionalism, and effectiveness of our acquisition work
force .

To the extent that we can eliminate superfluous,
defense-unique processes and standards in our acquisition,
we will truly be able to buy more from the total industrial
base of the country, not just from defense-unique industry.
This has huge potential advantages. One, technology in most
areas is now led by commercial industry, not by the
government. This is particularly true in electronic
components, computer architecture, information systems and
software, telecommunications, and automotive technology, all
of which are critical in every Army system. Two, we can
leverage off the R&D base of commercial industry and buy

items already developed, thereby devoting more of our RDT&E
dollars to unique defense technologies. We are already well
along in these endeavors.

Secretary of Defense Perry has highlighted the success
of the Army's acquisition reform efforts on the Secure
Mobile Anti-Jam Reliable Tactical-Terminal (SMART-T) . By
introducing competition during development; reform
initiatives such as reduced data requirements and failure
free warranty; Jointness; and stable funding; the program
cost was reduced from an early estimate of $790 million to a
FY96 contract award for less than $250 million. Another
acquisition streamlining success is the Near Term Digital
Radio (NTDR) , which we are currently testing. The recent
contract provided radios for test and experimentation at
one-quarter the cost of other digital radios. What is of
great interest here is the radio's open architecture, which
allows us the flexibility to insert new information
technology as it becomes available.

There are many other examples. Our Special Forces in
Bosnia were in need of light cold weather clothing. In the
interest of time, we went strictly commercial off-the-shelf.
In less than six weeks, 1,200 sets of four layers of
clothing were delivered to Fort Bragg, North Carolina, at a
cost of $187 per set. This represented a 64 percent savings
over a 1994 market survey on the cost of lighter cold
weather clothing. In addition, these sets were 16 percent
lighter with 45 percent less bulk than the Army's existing
extended cold weather clothing system.

CONCLUSION

As we complete the drawdown of our armed forces, we are
devoting a larger share of our limited defense resources to
readiness and quality of life programs for our men and women
in uniform. Money for modernization is tight. Our concern
is for the future readiness of the force. Today's
modernization is tomorrow's readiness.

As we look to the turn of the century, we must increase
our investment in modernization, and the Army's current plan
does as we go from $10.6 billion in FY97, to over $12
billion in FY99, and nearly $15 billion in FYOl. It is our
solemn responsibility to ensuring that our men and women are

well -equipped and have the decisive advantage they need to
deter or win decisively in future conflicts. Today's
soldier is well -equipped. Tomorrow's soldier deserves no
less.

With your support, we will continue to provide our
soldiers with world-class equipment. Thank you for your
attention this morning, and thank you for helping to keep
America's Army the premier land force in the world.

UNFUNDED REQUIREMENTS

Mr. Young. Thank you very much.

I would Hke to suggest that, as we did in the fiscal year 1996
process, we will be working with you beyond this hearing to iden-
tify requirements that the Army has that may not be addressed in
the budget request.

Last year we made a scroll that reached across the room with
many items identified that were not in the budget, and you never
read about them in the newspapers, but they were important to
keep the Army moving. That will be an ongoing effort so that when
we finish, we hope they hopefully will have provided you with ev-
erything you need.

Mr. McDade.

FISCAL YEAR 1997 BUDGET REQUEST FOR MODERNIZATION

Mr. McDade. Thank you, Mr. Chairman. Thank you all for an
impressive briefing. I have always heard the Army was the biggest
user of electronics on the battlefield. I guess you are going to in-
crease reliance on electronics as you go along.

Mr. Decker. Information technology and the electronics as the
foundation of it is very vital to us.

Mr. McDade. Is there enough emphasis in the fiscal year 1997
budget on modernization?

Mr. Decker. Yes, sir. This probably will sound like a broken
record, but the theme and the guidance and the main thrust of the
entire Defense Department and the service departments now, dur-
ing the drawdown and stabilization of forces from their former
sizes to their envisioned size, during the turbulence, has been to
maintain the readiness of the current force. That means training
and OPTEMPO and all the things that go into this drawdown,
keeping the forces ready to deploy at any time, be they Army,
Navy, Air Force, or Marines.

A close second emphasis has been the quality of life issues that
most of us believe do relate closely to readiness. Low morale means
low readiness, no matter how much you train. The Army of today
demographically is substantially different than the Army of 15, 20,
25 years ago. It is an all-volunteer force.

We don't have many druggies or bad actors in the Army. We get
quality people, very responsible and very bright. All that come in
are high school graduates or better, and they are more responsible
people. They are willing to go the distance, but we have a higher
rate of marriages, less divorces, and all the things that used to be
the typical Hollywood version of the G.I. have changed. Therefore,
quality of life becomes a real issue, and morale and family issues
have risen to great importance. That is a very serious issue.

In trying to package that within the overall budget pie, that
seems to be the guidance we have. For the time being, we have sort
of taken a modernization pause. I think we have maintained readi-
ness. I think our existing deployments show that. Our quality of
life issues are reasonably stable, although thin in some areas, but
there is no question that modernization has been the billpayer, and
we are on the ragged edge.

It is the kind of thing you won't see show up this year or next
year. But in the future, if we can't get modernization stabilized,
there will be a time in the not-too-distant future where the equip-
ment and technology overmatch piece of readiness is going to be in
question. So we are on the ragged edge, sir.

Mr. McDade. It really looks as though you are under last year's
budget by 14 percent or something like that.

Mr. Decker. That is right.

UNFUNDED REQUIREMENTS

Mr. McDade. The question we have to face is whether or not you
are putting enough effort to make sure near-term readiness isn't
sacrificed at the expense of long-term capabilities. Modernization
has always been key.

Let me ask, are your top modernization programs fully funded in
fiscal year 1997?

Mr. Decker. In terms of executability

Mr. McDade. Fully funded.

Mr. Decker. I am not quarreling with you, sir, but when you say
fully funded

Mr. McDade. I mean fully funded. If you have a problem with
the phraseology, give me your definition.

Mr. Decker. Okay. In procurement programs they are funded at
the rate we expect to buy them, so the modernization programs
that we do have in the budget for procurement, they are fully fund-
ed at the rate we are programmed to procure them. We don't have
anything where we will deliver nothing.

Mr. McDade. Does that rate represent the maximum efficient
rate?

Mr. Decker. No, sir.

Mr. McDade. What kind of phrase would you apply?

Mr. Decker. An inefficient procurement rate, meaning that we
will end up in the aggregate — in many of our programs over a pe-
riod of time, when we buy out the objective quantity we need for
the force we will have spent more per unit than we would have
with more efficient production rates.

Mr. McDade. How do you do that?

Mr. Decker. Let me have General Hite respond.

General Hite. Sir, in the best of all worlds, our modernization
account this year is $10.6 billion. Thanks to your help last year,
we were able to raise it from $10 billion up to a little over $12 bil-
lion. To have a healthy, robust modernization program that gives
maximum efficiency to the production programs and R&D pro-
grams, bring systems on-line so we can deploy them in the field,
we are looking at $15 billion to $20 billion a year.

Mr. McDade. So your shortfall is about $5 billion?

General Hite. Yes, sir.

Mr. McDade. Recite the top five and how much they are under-
funded.

General HiTE. We have that information and could provide it to
you.

Mr. McDade. Get your top five and tell me how much they are
underfunded.

General Hite. Combat vehicles, over $700 million; aviation,
about $1.4 billion; intelligence and electronic warfare, $103 million;
and missiles, about $1 billion; FORCE XXI soldier, which is at the
top of our list, $206 million. That is some of the things you just
saw.

Soldier enhancements are about $400 million; ammunition, $255
million; combat support combat service support, $714 million; and
command, control, communications, and computers, a little over $1
billion; and some other items around $300 million.

Mr. McDade. Would that represent the total $5 billion figure we
had?

General Hite. Yes, sir, it totals up to $6 biUion.

Mr. Dicks. That is the shortfall?

General HiTE. That is to give a robust modernization program in
the best of all worlds at maximum efficiency.

Mr. McDade. To do it in the most cost-effective way and meet
the needs?

Mr. Decker. Yes, sir.

LONG TERM READINESS ISSUES

Mr. McDade. I heard you say you are taking a pause, and I un-
derstand your position. What I am trying to inquire about is
whether or not you are concerned or, again, if anybody would like
to continue, because we are all on the same team, whether or not
you have specific concerns that you can cite today about long-term
readiness as a result of the budget deficiencies?

Mr. Decker. That is a tough one, but I will try to give you what
I believe is an accurate perspective of it. We discuss this quite a
bit among ourselves with the Chief and the other leadership. I
think in general, we see things the same way.

I think it is fair to say that right now, March of 1996, if we took
the equipment we have, we still probably have substantial tech-
nology overmatch. But maybe around the turn of the century, if we
don't see some increase of our two or three critical development
programs and our procurement programs, we will have part of the
force equipped with the things we are procuring and part of it
equipped with equipment that will be five or six years older and
won't have the new features on it, such as the M1A2 tank, such
as the upgrades to Bradley, such as a shortage of Black Hawk heli-
copters.

I am dealing in things that we can buy today that we are not
buying in efficient rates even though they are a little better. The
Comanche is a tough one. We will execute it. It is planned to be
first unit-equipped in late 2005 or early 2006. We could see sub-
stantial savings if that got into the field early. Kiowa Warrior is
an excellent helicopter for what it was designed to do, it was con-
verted from a commercial aircraft, but it will be old and aged and
probably is not upgradable anymore. So are all of our mechaniza-
tion programs. And lastly, and far from leastly, is what I have been
devoted to is our tactical wheeled vehicle trucks program.

We are buying at a very inefficient rate, would be buying at a
terribly inefficient rate if not for the help you gave us last year.
These are some of the big holes. Our combat vehicles, they will be

older, and they will be a mixed fleet about the turn of the century.
I think we will see possible declines in our readiness.

COST REDUCTION EFFORTS

Mr. McDade. That is very helpful for us to know. We are hear-
ing the number of $5 billion to get up to snuff in the fiscal year.
What is the cost of proceeding on a plan that funds that at a less
than efficient rate? Can you put a dollar number on that for me?

Mr. Decker. I would like to take that for the record. We have
program-by-program analyses that say if we bought out in three
years versus six, what is the delta. I don't recall off the top of my
head. It is several billions of dollars.

General Hite. I can give you some examples. There are several
programs that we look at that are in about the 10 or 15 percent
range of efficiencies. A good example is the Javelin missile pro-
gram, which, when we put it together, it was a 14 year program.
Thanks to your help and the other committees', we were able to
bring that program down to 11 years, and save a tremendous
amount of money. Secretary Decker instituted a cost reduction pro-
gram which brought the cost and the cost savings of that program
down about $1.4 billion over the 11 years.

The Office of the Secretary of Defense just plussed us up in that
program over the next four or five years. We went from 14 to 11
years. Now we are going down to eight years. That will give you
additional cost savings of buying out those 26,000 or 27,000 Jave-
lins for the Army and 5,000 or 6,000 for the Marine Corps.

Mr. McDade. What is the dollar saving by going to eight years?

General Hite. I don't have it, but we can get it.

[The information follows:!

Program Budget Decision memorandum 104C, dated 13 February 1996, increase
Javelin procurement funding by $993 million in fiscal years 1999 through 2001. The
additional funding shortened the production period from 11 to 8 years. The program
savings are $181.5 million. In addition, the JaveUn program returns $1,130 billion
to the Army in fiscal years 2002 through 2004.

General Hite. Longbow Apache, we have saved just under a bil-
lion dollars on Longbow Apache through cost reduction efforts, plus
you allowed us this fiscal year to start a multiyear contract on the
Longbow Apache program, a tremendous savings with the cost re-
duction, allowing us to buy those on a multiyear basis.

Mr. Decker. The multiyear, and shortening the program, I don't
remember the dollars, but it is about a 20 percent savings.

General Hite. With the Longbow Hellfire missile. We have all
kinds of examples.

Mr. Decker. We will get you a summary for the record as well
as specific examples.

Mr. McDade. Thank you very much.

[The information follows:]

The Longbow Hellfire missile program is currently operating under an Office of
the Secretary of Defense-approved cost reduction program (CRP) plan. Mr. Noel
Longuemare, Principle Deputy Under Secretary of Defense (Acquisition & Tech-
nology), approved the CRP on 2 December 1994.

The Longbow Hellfire CRP saves the Army $862 million, reducing the procure-
ment program from $3,111 billion to $2,249 billion, or about 28 percent. The pro-
curement objective did not change. We accomplished this in several ways:

— Reduced the procurement schedule from 10 years to eight years and increased
the maximum production rate from 1,500 missiles per year to 2,200 missiles per
year.

Reduced government in-house costs.

— Initiated hardware producibility enhancements to reduce production costs of
certain hardware items. Some of these include the missile's radar transceiver, an-
tenna, inertial measurement system, exciter, and the use of application-specific inte-
grated circuits.

Industry (Lockheed Martin and Northrop Grumman) has committed to consolida-
tion and procurement initiatives.

— Programmed for a five year multiyear procurement beginning in fiscal year
1999.

These program savings have already been returned to the Army.

Mr. Young. Let me make sure I understood your answer on the
savings in the multiyear. Did you say 20 percent?

Mr. Decker. No, 20 percent between the multiyear and buyout
of the program four years early by increasing yearly production
rates. That together is about a 20 percent savings of what we had
estimated. I forget the exact dollars, but it is a lot of money.

Mr. Young. Mr. Murtha.

LIQUID PROPELLANT DECISION

Mr. Murtha. Did you announce your liquid propellant decision
yet?

Mr. Decker. Certainly de facto. I know that the Army, with Sec-
retary Perry's okay, has sent the letter signed by myself and the
Vice Chief to the prime contractor. The answer is yes.

research AND DEVELOPMENT PROJECT CANCELLATIONS

Mr. Murtha. How many programs do we start and then have to
cancel? For instance, obviously just like the battlefield enhance-
ment kit that you are talking about, you may not be able to follow
it through. How many programs does the Army start, and how
much money do you put in these programs, and how much does in-
dustry put? Is this a 50/50 thing; is this all government money? For
instance, the liquid propellant; is that all government money?

Mr. Decker. Yes, sir. That goes back before my time. I am sure
some of the industry probably put independent research and devel-
opment funds into pursuing it. In terms of the fundamental R&D
including the cost of developing it to its current state, it has all
been government contract.

Mr. Murtha. Was this true also of the enhanced battlefield suit?

Mr. Decker. For the most part. In terms of funding the program
and bringing it to the state of configuration so we can test it, that
is government contract money.

One of the things that we have tried to do, which is a little twist
on your question, sir, is in acquisition reform. Where we are really
saying don't automatically go to specially designed parts and even
subsystems if you can find something off the shelf that will work.
There are some pieces of that system, the modules, that came right
off the shelf. We tested them, they worked, so that part of the sys-
tem didn't require development. And yet the development for those
systems was done by the commercial marketplace.

Mr. Murtha. If you would answer for the record how many re-
search projects you started in the last two years and had to cancel;
not necessarily started, but have been involved with and had to

cancel and how much money that involved. I am interested in what
percentage of projects that we are cancelling and the amount of re-
search money we are spending on it. I know it has to be done, but
I am interested in the amount.
[The information follows:]

There have been six Army programs that have been cancelled during the past two
years. The program name and amount of Army Research, Development, Test and
Evaluation (RDTE) funds expended are as follows;

[Dollars in Millions]

Program:

RDTE Funds

Armored Gun System i$325

X-ROD 135

Shortstop 15

Advanced Airborne Radiac System 4.22

Ridged Wall Shelter (2 projects) 1.71

1 $280 sunk, $45 termination.

Liquid Propellant (LP) was mentioned in the testimony as one of the projects the
Army cancelled. The Liquid Propellant development effort remained in the techbase
after it was deemed too risky to weaponize in time to meet the Crusader schedule.
Liquid Propellant development was never canceled and is stiU in the techbase. The
total dollar amount was $409.5 miUion which includes $331.7 million for the Regen-
erative LP Gun (RLPG) technology and $77.8 million for Liquid Propellant.

Mr. Decker. When you reach the state where you decide to de-
velop or procure off the shelf a system for fielding, that is the point
that I believe your question has total legitimacy. We have decided
to develop it and field it, we have made that decision, you budget
us, we put a program together, and we do it. So it is out of the re-
search stage. It is really in the design and get-ready-to-do-it stage.
It is pretty tough to cancel one after that for a bunch of reasons.

We have small percentages of those that get cancelled. They are
going to get a little bigger on occasion as budgets keep coming
down. It is relatively small, but they are usually fairly dramatic
when they happen.

INFORMATION SECURITY

Mr. MURTHA. This morning I brought up unclassified information
security. In talking to you before the hearing, you indicated that
you have done research on it, and hopefully you expect to imple-
ment some security provisions down the road.

When you showed this enhanced battlefield uniform and you
talked about the digitized battle scenario, I am wondering what
kinds of security you are building into that, because obviously al-
most every enemy has been able to overcome obstacles quicker
than we thought. They quieted the submarines faster than we
thought, developed atomic bombs faster than we thought — it would
be devastating if we had a digitized battlefield and depended on it,
and then they could break the security. What kind of security are
you building into that as you go through the completion of that sys-
tem?

Mr. Decker. A quick overview answer, and then General Guen-
ther will continue in more detail.

The operational architecture for the Army maneuver units where
we are building the tactical internet that is often referred to, we
are going to dp it at a brigade level for the experiment about a year

from now. The radio links that exist in any RF internet will have
bulk encryption. In other words, at the device, on the soldier's back
and whatever, and maybe within the squad, you just won't worry
about it, because you don't have too much of a threat at that level.
Nobody is going to be hacking at that level.

Maybe you think I am wrong, but I don't think so. Where traffic
has passed that could be accessible perhaps to someone trying to
get in and dink around with the data on the net, there is informa-
tion security by tactic of encryption. We have done that on a bulk
basis between the nodes of the net, and within the local net; within
the subnets, you don't have much of a problem.

Mr. MURTHA. We broke the ultra code during World War II, and
they didn't recognize it. Is this a system that cannot be broken?

Mr. Decker. The perishability of information, and the fact that
keys can change often for all practical purposes in the encrjrption
system we have today, are damned tough to break.

Let me turn that over to Otto Guenther, and let him make sure
I don't stray off into something I am not qualified to talk about.

General Guenther. First, to answer the last question, when we
look at our offensive capabilities, we are at the same time looking
at our defensive capabilities. We make sure COMSEC equipment,
as it stands today, protects our capabilities. The basic tactical back-
bone is a secure backbone.

In addition to that, relevant to our prehearing discussion on un-
secured things that are now going to go into battlefield and go back
to a base operations where we are going to process there, and also
in an unclassified mode, NSA has a capability for multilevel secu-
rity called fast lane. We are examining that so when we work with
unsecure and secure in the same environment, we will have a
multilevel encryption device to be able to do that. We will be doing
in-line encryption to secure lines and will have the necessary fire
walls to stop penetrations of unsecure lines. We are architecturally
making sure that we can handle securing both secure and unsecure
communications capabilities.

Mr. Murtha. When you say "making sure," we don't have that
capability now, do we? Our logistics capability is not secure now?

General Guenther. It is unsecure because we have not had a
NSA multilevel security device available. Now that one has become
available, we will be putting money in to buy that. By 2000, the
DOD and all services will move from the old TCCs to a user-oper-
ated message terminal capability, what we call part of the Defense
Message System. That system will be secured with the same kinds
of devices, and we will be closing down those behind-the-wall TCCs.

General Anderson. In the experimentation that we described
that is going to happen at Fort Hood, one of the things that we in-
tend to do, as we try to digitize the battlefield, is to deploy our own
electronic warfare systems in a mode which will capture the data
so that we can do the analysis to determine are we developing a
vulnerability as we develop capability.

You might be interested, the radio that you saw on the back of
that soldier was a secure radio.

Mr. Decker. That is the one that goes to the next higher ech-
elon.

General Guenther. That will have the same capability that our
larger SINCGARS have.

COMMAND, CONTROL, AND COMMUNICATIONS ISSUES

Mr. MURTHA. The great asset for individual soldiers is their indi-
viduality and their ability to make decisions. Are we dictating
against this? We are sending a signal back to someone else that
has the capability to talk to them, I keep hearing better and better
communications further and further back.

I remember General Wall used to fly down if he saw a fire fight
and get involved in it; the worst thing that could have happened,
in my estimation. Are we starting to take away that individual in-
centive which has made the American soldier so great? Is that
what we are working towards by letting the command decisions be
centralized?

General Anderson. That could very easily happen but there is
a great sensitivity that we do not get away from that. One of the
greatest strengths of the United States Army is its leaders, just as
you say. So as a part of this we have to look at it in the context
of what do we do to our leader development program to make sure
that we don't do that.

The key thing is as all this information that is out there, one of
the biggest challenges is getting the information to the commander,
not to the Command Port or staff where he has to go back there
and get the information. We have to get the information to him
where he is at the front.

Mr. MuRTHA. I worry that you give him so much information,
like we have so much intelligence information available we can't di-
gest it all, and consequently you can't make a decision or we make
the wrong decision. I think it is something you have to watch very
closely as you move along.

THEATER HIGH ALTITUDE AREA DEFENSE SYSTEM (THAAD)

I wanted to ask about THAAD. How long is it going to delay the
program when you cut back on the money for THAAD?

Mr. Decker. The overall program had called for a late 1998 de-
livery of a UOES system, a user operational evaluation system.
That is a full-up prototype system that will have 40 missiles. That
will be used for training and test and everjrthing.

It will be a real unit. That system is deployable if needed in a
crisis. That date did not change if we keep the program on sched-
ule and execute; in terms of funding that date did not change.
What did change was moving from the UOES configuration to start
first production to go to a true first equipped and that delays that
point 2 to 4 years.

Mr. DiCKS.What is UOES?

Mr. Decker. User Operational Evaluation System. It is an early
capability. It will be a ftill firing

General Anderson. Sir, there will be two firing batteries, a bat-
talion.

Mr. Decker. And 40 missiles. That is deployable. That will give
us substantial capability. To begin to outfit the fleet in terms of the
date of so-called first unit equipped, that date will slip 2 to 4 years.

General Anderson. It is from 2002 to as late as 2006.

Mr. Decker. So there was a delay in the full-up production that
begins to equip the force. But we have an early capability on the
schedule. That did not affect that.

Mr. MURTHA. Is this just something to keep the commander quiet
out there in Korea? Because when we were there this was some-
thing that he felt was so important to the security of his forces. Or
is this really

Mr. Decker. No. The baseline program plan before the restruc-
turing you are referring to had the UOES system in there at that
date. It would have been available then for early emergency deploy-
ment. It is needed, in any case, to train the unit and to get the unit
structured and to finalize the Table of Organization and Equip-
ment, TO&E's, and those kinds of things. That was in the program
and stayed there and always was advertised as part of getting the
full scale production for first unit equipped as an emergency early
capability, and we could not accelerate that.

Mr. Dicks. Is that going to go to Korea?

Mr. Decker. No. We will keep it here, but can be deployed if
something warms up. It will be at Fort Bliss. The troops will be
trained shortly after the delivery of the missiles and equipment for
the UOES. Those troops will be ready to go in an emergency.

General ANDERSON. When we ultimately field the full-up system,
we intend to employ at least one battery in Southwest Asia and one
battery in North East Asia.

Mr. Hefner. Mr. Chairman, I have to go to another meeting. I
have some questions for the record. Could I submit them?

Mr. Young. Without objection that is fine. Mr. Dicks.

COMANCHE HELICOPTER

Mr. Dicks. I appreciate your presentation. You mentioned on Co-
manche that by accelerating it you thought that could save a con-
siderable amount of money. Could you tell us how much?

Mr. Decker. If you accelerated it purely from time value of
money and production rates out in the future over the life cycle,
and we usually use either 15 or 20 years for our life-cycle cost esti-
mate, you would probably save about $3 billion.

Mr. Dicks. If you moved it from 2006 to 2003?

Mr. Decker. Right. That creates funding problems relative to
other shortages. The program, in its current form is not sick. It is
well-executed. The first hover flight was conducted not long ago,
perfect flight. The first full-up bore-holes-in-the-sky flight will be
next month.

All the parameters of the program are being met. Costs are
under control. So according to the current program plan, it is in ex-
tremely good shape.

The Boeing-Sikorsky team is a superb contractor team. We have
good management. The Department of Defense — DoD is behind it.
We are in good execution shape, and so there is not a problem. And
we can execute through first unit equipped in late 2005, early
2006, according to that schedule. So we are satisfied, we do not
have a sick program, but it could be made more efficient and could
get units equipped earlier with increased funding, but that could
short us in other places.

Mr. Dicks. Comanche is a scout helicopter; right?

Mr. Decker. It is an armed reconnaissance helicopter. One of the
roles of an armed reconnaissance machine is scout duties. But
scouts sometimes are unarmed as well. I want to make sure that
is understood.

Yes, scout is one of the listed missions under the rubric of armed
aerial reconnaissance. There are other dimensions beyond the scout
mission.

Mr. Dicks. Could Comanche replace Longbow?

Mr. Decker. No. The two have different roles. We have been
looking at that issue. I am not dodging your question, but permit
me a moment.

Apache, the new Longbow, was designed to be a heavy-attack
helicopter. And it is beefed up with heavy armament. The new
Longbow fire control system and Longbow missile is a deadly weap-
on. It has substantially heavy armament. It was not designed to go
out in harm's way all by itself but with a team to conduct attack
operations in conjunction with ground maneuver forces. The Co-
manche was designed to go out for armed recon so the Apache
would only be used in the armed reconnaissance role if that was
the only thing available.

Conversely, the Comanche is being designed with hooks in it to
where you can add the Longbow, and it does have in its bomb bay,
when it comes out, room to put eight Hellfire missiles. The Apache
holds 16, so Comanche would have half the pay load but would be
capable in terms of the unique mission of performing in an armed
attack role. It just has a little less of a weapons capacity.

Mr. Dicks. And it would have the advantage of being stealthier?

Mr. Decker. In that role, it is not so stealthy because you add
the radar, the bomb bay comes out and you have weapons hanging
out and that destroys your cross section to a degree. But you would
not be needing it so much in the stealth role. You would be oper-
ating in the role of heavy attack with other maneuver forces and
would be careful not to expose yourself.

M829A2 KINETIC ENERGY TANK ROUND

Mr. Dicks. What are you going to do with the M829A2 KE
round? How are we going to produce those? You have had two com-
panies there, Olin and Alliant Tech. What is the future of this pro-
gram?

Mr. Decker. I am going to — I have to confess, I have as hard a
time understanding our ammunition program as you do. However,
I have General Hite and General Arbuckle here who really under-
stand ammunition.

General Arbuckle. You are referring to the multiyear buy which
is completed in 1998. Currently, we have no plans to continue that.

Mr. Dicks. Will you have enough rounds at that point to meet
your requirements?

General Arbuckle. I will have to go back and take a look at
that.

[The information follows:]

Yes, the Army will have enough 120mm kinetic energy tank rounds at the end
of the multiyear buy. This stock level is met by using the primary round, the
M829A2, and a suitable substitute, the M829AL

General Arbuckle. Right now that is the current plan.

Mr. Dicks. My information is that you are going to be woefully
inadequate in meeting your stockage levels on that. Get us that for
the record.

Mr. Decker. Well. Fair question.

[The information follows:]

The Army Ammunition Functional Area Assessment for fiscal year 1996 (FAA
FY96) shows an adequate stockage level for 120mm kinetic energy tank rounds.
This stock level is met with primary round, the M829A2, and a suitable substitute,
the M829A1. If the question is restricted solely to the M829A2, then our planned
procurement meets the Army modernization strategy goals.

THEATER MISSILE DEFENSE

Mr. Dicks. On the theater missile defense now, basically what
you are going to do is you are going to have the PAC 3 for low alti-
tude, or short range and then you are going to have the system,
the standard 2 system on the aegis cruisers; is that correct?

Mr. Decker. You are talking about the Navy Lower Tier.

Mr. Dicks. So that is going to be the basic architecture?

Mr. Decker. That is a standard missile variant. I don't know
enough about the details. The kill vehicle may be different than the
standard missile, but it is a standard missile booster, is my under-
standing.

Mr. Dicks. The reason for this decision is everything was kind
of moving to the right and you wanted to get the PAC 3 out there
and buy enough in sufficient quantity, the alteration in the whole
theater missile defense?

Mr. Decker. The whole ball of wax. Maybe not quite in that
sense.

The last 3 months or so of last year, meaning calendar 1995,
leading up into January of this year, the JROC, Admiral Owens'
Joint Requirements Oversight Committee in conjunction with Dr.
Kaminski, who is our dotted-line boss on the acquisition chain, did
a series of studies and trade-offs because they were concerned that
if ever3^hing we were doing in missile defense that was leading to
a production bill tried to get produced, we had an enormous bow
wave. If we needed it, we needed it, but they said let's look at that
hard.

Those were hard studies, and there were a lot of differences of
opinion, but they ended up being driven by the best threat profiles
we could get. I believe they are pretty good. They show, in terms
of adversaries we might face on the tactical battlefield, where the-
ater missile defense would come about; the vast majority of the
missiles are the medium- and short-range SCUD class, et cetera.
Those can be dealt with very efficiently by the class of missile rep-
resented by PAC 3 ERINT, and, I presume, if exposed where they
can detect them by the Navy Lower Tier. That is the real threat
that exists in astounding quantities today.

The longer-range missiles that have higher velocities and need
more extended range are quite a few years away from coming in
in any bulk. So the decision was made to make sure we were fully
funded and were fixed in the Lower Tier systems to get them exe-
cuted on time and on schedule and deployed, and to defer the
Upper Tier systems, THAAD being one, in the sense I have said.
I think that is a prudent decision being driven by threat profiles

/;8-m no 1

and threat decisions. I wasn't happy about it, but I beUeve it is ra-
tional.

UNMANNED AERIAL VEHICLES

Mr. Dicks. What are you going to do with those other Hunters?
I understand you have cancelled the program. Why can't we use
those seven Hunters that are down at Fort Hood.

Mr. Decker. There is one system and I forget how many air-
frames exist on Hunter that are deployed with the Third Corps at
Fort Hood, eight air vehicles. They are being used by the troops for
training and are deployable if we need to. There is one system in
training at Fort Huachuca where they train people with it, and
there are three in storage.

Mr. Dicks. We have got these things. I think the more exposure
that the troops get to them, to not use them after we have paid for
them — I understand even though there were problems, that re-
cently the soldiers say they are pretty good.

Mr. Decker. The prioritization decisions that were decided by
the JROC and approved by OSD on the unmanned aerial vehicle,
UAV, programs were requirements-driven decisions not broken pro-
gram decisions. We have had some management problems in that
program and so has the contractor.

We made some changes and those were being fixed and the sys-
tem is in pretty good shape now programmatically. So we didn't kill
a sick program in the classic sense. Sometimes you have to do that.

The prioritization of the JROC that was the biggest priority,
which we are just now coming up on, is the tactical maneuver unit,
division and below for the Army, and similar for the Navy, was un-
filled, and that is priority one. There was a full belief that the sort
of core-level requirement, the intermediate to deep-cell requirement
could be met by Predator, which is deployed now and would prob-
ably be less expensive in the long run, and the long-range stuff
would be met by an Upper Tier system.

So that was a requirements architecture decision. They just said
if we are going to do that, we probably shouldn't incur the O&S
and fielding costs of the other three Hunter systems. That is an ar-
guable decision, but that was the rationale for it, sir.

Mr. Dicks. Thank you.

Mr. Young. Mr. Wilson.

FISCAL YEAR 1997 BUDGET REQUEST FOR MODERNIZATION

Mr. Wilson. I would like to tell General Hite in particular, and
everybody there, that I was in Bosnia 3 weeks ago. It was cold and
muddy, and there was snow on the ground, and it was raining, and
I just want to put in a good word for the Provide Shelter Force that
was there and recommend it; it would probably be too hard to have
too many of those in future peacekeeping actions.

The other thing I want to say, and this frustrates everybody, I
believe that what you said. General Hite, was that if you got all
the money in the request, that you would still be about $5 billion —
to Mr. McDade's question I believe, that if you got all the money
in the request you would still be $5 billion short on a robust mod-
ernization program?

General HiTE. That is correct.

Mr. Wilson. Our frustration is that if we put in that $5 biUion,
the press would immediately say that we had put in $5 billion
more than the Defense Department wanted. We go through that all
the time. We went through that with this last $7 billion.

Mr. Dicks. That has never slowed you down, though.

Mr. Wilson. It sure hasn't, and I hope when I depart this Com-
mittee that it will still not slow the Committee down. But that is
a — that is probably true of the other services, but we know you
need that other $5 billion, but if we give it to you, they will all say
that we are providing $5 billion more than the Pentagon wants. I
wish there was a way

Mr. Young. And the President will threaten to veto it because
of that.

Mr. Skeen.

Mr. Skeen. There is a vote pending.

Mr. Young. After we reach this vote, Mr. Murtha and I will have
to be excused to attend the Conference Committee. Maybe we can
finish up by the time we have to go vote. If not, the rest of you
can come back.

HIGH ENERGY LASER SYSTEM TEST FACILITY (HELSTF)

Mr. Skeen. I have an extensive problem. Mr. Decker, I have con-
stantly maintained a strong interest in the development and ad-
vancement of the Nation's directed-energy laser technology base. At
White Sands Missile Range, the High-Energy Laser System Test
Facility known as HELSTF performs its work under the auspices
of the U.S. Army. Despite the strong support that we have had in
Congress, there seems to be a continued attempt by the Army to
close this program out year after year.

In light of some of the successful tests that have been run out
there year after year, we still have resistance to keeping HELSTF
going. Early this year, I brought this item to the attention of Sec-
retary Perry and Dr. Hamre, and I appreciate their efforts in re-
leasing the funds to operate HELSTF for the current fiscal year.
What is the trouble between us and the Army?

Mr. Decker. That is a fair question, sir.

Mr. Skeen. It was unfairly presented, but

Mr. Decker. No.

Mr. Skeen. We would like to know what is going on.

Mr. Decker. It is our perspective that to get to a point in the
tactical arena as opposed to maybe the space arena, that is the
only thing I am dealing with, that if you look at the things re-
quired to eventually perhaps get to weaponization and all the
things for a directed energy system that would be aimed at destroy-
ing the platform you are shooting at as opposed to countermeasures
against its electronics or something, that is a long-term proposition.

The experiments conducted were carefully controlled, and clearly
showed that laser can generate the high power needed at the
ranges, the close tactical ranges to do that. But to bring it to
weaponization is an expensive, long-term proposition.

The second thing is in terms of stepping back and looking at the
ways one might neutralize the threat that comes in at those
ranges, we think there are — even if that weapon system were suc-
cessful— there are better ways to counter that threat. So we haven't

felt that even with success, relatively close-range tactical, high-
power laser weapons with a shoot-down mission were a high payoff
item. You don't agree with us, and I respect you for that.

Mr. Skeen. I think it is an honest disagreement. We are inter-
ested in space but also the tactical aspect. What puzzles me is the
Army is not interested, is not allocating the funds or moving the
funds around, wants to kill HELSTF off, one of the best tactical
demonstrations presented at White Sands Missile Range.

Mr. Decker. We might have a disagreement on that. This is a
laboratory demonstration. That is not an effective weapons system.

Mr. Skeen. This isn't a laboratory. This is a tactical demonstra-
tion. I think it has been done repeatedly, and still we have resist-
ance. I don't know whether it is because of favoring one system
over another.

I know there is a lot of technical jargon involved, and I appre-
ciate that, but I would like to sit down with some of you folks and
get to the base question of what is the matter. You have one of the
best test areas in the United States for the tactical, as well as,
space orientation of the system, and every time we allocate funds
from the military side of it, the Army disappears. I would like to
know where the pea is under the coconut.

Mr. Decker. I can't find it either. We have an honest disagree-
ment on the efficacy of high-powered lasers any time in the re-
motely near-term as an effective short-range weapons system. I re-
alize we have a disagreement.

Mr. Skeen. We do. I would like to get it hammered out. I don't
want to badger you folks, you have plenty to do besides somebody
nipping at your heels around here, but — this has been a very frus-
trating thing because it has gone on year after year. If you are
going to close it down, I would like to see good reasons for doing
it, because I don't see it at the present time.

Mr. Decker. I agree. We are agreeing to disagree in this in-
stance.

Mr. Skeen. We ought to get together.

Mr. Decker. I agree. I know some of our folks are doing an inter-
nal study about the long-range future of high-powered lasers as
weapons in the tactical environment. That is an in-house study.
Usually in-house studies are one-sided, to be honest.

Mr. Skeen. You don't mean they are prejudicial?

Mr. Decker. Possibly. I think after we see the results of that and
assess if it is a well-balanced study, we will be in a good position
to have a discussion with you and your staff. If I don't feel it is
balanced and presenting all the facts, I will ask the Army Science
Board to take a hard look at our strategy and are we going doing
the right thing.

Mr. Skeen. I would like to do it in combination rather than us
asking you to do something and getting no response whatever, and
it suddenly disappears. I would rather have an open confrontation
and jaw it out.

Mr. Decker. I agree. There is nothing, to my knowledge, in the
Federal Advisory Committee Act, that would prevent the Science
Board people from talking to your staff to gather data. We will
make this an open process; I am as frustrated as you are.

Mr. Skeen. Let's quit being frustrated and we will get together
and get this thing resolved.

Mr. Decker. We will take that as an action, and I will keep you
posted on it.

Mr. Skeen. I appreciate it. Don't let the money keep dis-
appearing.

Mr. Young. General, we have to record our votes here. Mr.
McDade will return and Mr. Murtha and I will have to attend the
conference meeting.

Mr. Dicks, go ahead.

RESERVE COMPONENT AUTOMATION SYSTEM (RCAS)

Mr. Dicks. Knowing that General Guenther is here, I wanted to
ask a question about RCAS and where we are on that program and
whether we can get an update.

Mr. Decker. I will give you 2 seconds and let him give you the
nitty-gritty. RCAS has been restructured. I think the teamwork
and the cooperation and the desire to succeed in that program be-
tween the Active Army acquisition chain and the National Guard
is the best it has ever been.

Mr. Dicks. I am glad to hear that, because there was a lot of sus-
picion that the active guys were going to sandbag the Guard. I am
glad that it didn't happen.

Mr. Decker. It didn't. There may be previous events not related
to RCAS over history that lend credence to that suspicion, but
since I have been here and General Guenther has been in his job
and General Baca has been Chief of the National Guard, we put
our heads together and said this program has to be fixed. We won't
be able to mobilize if we don't get this program fixed. We don't
know who is where.

General Guenther, General Baca, and myself, personally spent
time on it, we put program management assistance in, transferred
them to the Guard, and I truly believe that program is fixed and
we are going to deliver a good system.

General Guenther. The contract was restructured and let the
end of January of 1996. We are doing everything. It was restruc-
tured and the contract was relet with the prime. The prime is
doing very well. Users are heavily involved to make sure we are
not buying anything we don't want.

We will go for a major fielding decision at the DoD level on that.
I don't see a shortfall right now. We constantly answer questions
but everything we said we were going to do as a team, we have ac-
complished. We have even integrated the program team between
reserves. National Guard and Active duty people so that we are to-
tally in the program together. We have hired acquisition-qualified
people to oversee it from the government side.

The contractor has taken a lot of initiatives to make sure they
are doing the right things. Top level management and the con-
tractor are heavily involved. We are working towards a software
qualification level by the contractor — if you are familiar with the
SEI, or Software Engineering Institute, model Boeing is working
towards achieving a high quality level, and we have put a stipula-
tion in the contract to move them to a software level two at least.

Hopefully, they will get to three. Other parts of Boeing are al-
ready at that, so we know it can be achieved. We don't expect to
ever go back to where we were before.

Mr. Dicks. Had some of the units been equipped with some sys-
tem?

General GuENTHER. We put the old systems in. About 2,000 of
those were fielded.

Mr. Decker. These are the work stations.

General GuENTHER. The original type. It wasn't a client server
P.O. operation. Our new capability will be a much more up-to-date
architecture, more interfaceable across the entire Army. We are
very comfortable with where we are in the program right now.

IMPROVED RECOVERY VEHICLE FUNDING

Mr. Dicks. Thank you very much on that subject.

I had an interest 2 years ago in the Improved Recovery Vehicle.
I note that we are going to buy more M-1 tanks, but what are we
doing about the Improved Recovery Vehicle?

General Hite. Sir, we are procuring the Improved Recovery Vehi-
cle. However it is at a low rate. You plussed us up last year. The
money that you gave us last year is still in OSD withhold. I have
asked that it be released so we can increase that buy.

I think you gave us enough to add 12 more vehicles to the buy.
We are not fielding it at the same rate that we have been deploying
the M1A2 tank because of different production rates. We are pro-
ducing about 120 MlA2's a year and we are in the neighborhood
of 15 to 25 IRVs a year. So we are producing but we are producing
at a very slow rate.

Mr. Dicks. That is because of the overall budgetary problems?

General HiTE. Yes, sir; strictly affordability.

ABRAMS TANK (M1A2) TESTING ISSUES

Mr. Dicks. DOD's Director of Operational Test and Evaluation
reported that the M1A2 was not safe to operate because of
uncommanded gun and turret movement and inadvertent machine
gunfire. Retesting in October 1995 not only confirmed the previous
but also discovered that various electronic components of the tanks
got so hot that the crew had to wear gloves to keep from burning
themselves.

What is the cause and the solution for uncommanded gun and
turret movement, inadvertent machine gunfire and the tempera-
ture of the electronic components?

General HiTE. We have isolated the root causes of those failures.
The uncommanded turret and gun movements, we have resolved
that. It was a software and a hardware problem. We are fixing it
by changes to the software in addition of a new gunner's handle
that prevents that from happening. That is currently being retro-
fitted into the vehicles at Fort Hood and being cut into the produc-
tion line at Lima, Ohio, at the tank plant.

The machine gun incident, we think was isolated because we
have those machine guns deployed throughout the Army. Once you
chamber a round you can brush your finger against the trigger and
cause that to go off. We had at least one incident. Just because we
had that incident, we put a trigger guard on there so the com-

mander, when he has gloves on, doesn't inadvertently knock
against it and have it discharge.

We think that program is well under way. Once we finish the
retrofits out in the field and at Fort Hood, we can take the safety
restrictions off the operations that are currently there. So that is
progressing very well.

Mr. Dicks. What about the electronic components?

General HiTE. The over heating is a problem. We have two fixes
for that. One, we have an interim fix which we take the microcli-
matic cooling system, which is used to air condition the soldiers in
the tank, we have redirected that air flow to reduce the tempera-
ture.

Tankers have to wear gloves, which protect them in case of a fire
inside the tank, so that prevents them from getting burned or hav-
ing a problem with hot-to-touch equipment. The problem you have
is mostly in the maintenance area when the maintainers get in and
touch this hot equipment. So we have that retrofit in process to fix
that, plus we have a long-term fix in development which increases
the cooling capacity within the tank and reduces the temperature
of the various components. We should be able to implement that
in a couple 3 years.

CHINOOK HELICOPTER (CH-47) LIFE EXTENSION PROGRAM

Mr. Dicks. The Chinook helicopter is approaching 40 years of
age. Last year, Congress provided $4 million to assess the feasi-
bility of a service life extension program for the Chinook. What
modifications must be made to the Chinook to keep it operational
until 2020?

General Anderson. Sir, we see two programs that are necessary
to do that. One is called the improved cargo helicopter that does
some improvements to the airframe itself as well as some digi-
talization and other things that will sustain the airframe beyond
the 20 years age. We need to do engine replacements, upgrading
the engines to the 714 engine. We have those programs identified
and resources required to implement those programs. We were un-
able to fund them due to affordability, unfortunately.

Mr. Dicks. How much would be necessary this year to do some-
thing about this? Answer that for the record.

[The information follows:]

We need $22.7 million of Research, Development, Test and Evaluation (RDT&E)
funding in fiscal year 1997. These funds will be used to start the Improved Cargo
Helicopter (ICH) program, reduce program risk, start aircraft production one year
earlier, and allow the Army to realize operations and support cost savings sooner.
Particular emphasis is being placed on maturing the electronic architecture at the
earUest possible date. The breakdown of funds is as follows: $4.0 million for flight
deck Systems Integration Laboratory (SIL) work, $1.5 million for flight demonstra-
tions of Digital Data Bus and installation and flight demonstration of the ICH elec-
tronic architecture, $2.0 million flight trials to develop cargo heUcopter handling
qualities, $5.5 million for flight tests on the Cooperative Research and Development
Agreement (CRDA) aircraft and evaluation of potential technologies identified in the
ICH Trade-Oflf-Determination (TOD) studies, $5.5 million for phase two of a four
phase program to develop a low maintenance rotor hub identified in the ICH Trade-
Off-Analysis (TOA) as a high pay-off technology, and $4.2 million for development
of ICH Government Request for Proposal and Industrial Responses.

KIOWA WARRIOR HELICOPTER (OH-58)

Mr. Dicks. The Kiowa Warrior— is this the OH-58?

Mr. Decker. Yes, sir.

Mr. Dicks. As I understand it, you are not requesting funds in
fiscal year 1997 for that helicopter?

Mr. Decker. That is true, but at the time the 1997 budget went
in, the final rescission list for 1996 hadn't cleared the White House
and come over here. I understand that it put the 1996 plus-up for
Kiowa Warrior on there and that poses a problem for us.

Mr. Dicks. Is there a military requirement for additional Kiowa
Warriors?

Mr. Decker. Yes, sir.

General ANDERSON. We have a requirement for 507 and cur-
rently have funded 382.

Mr. Dicks. That is even with the downsized Army?

General ANDERSON. That is correct.

Mr. Dicks. What is the impact if the $140 million is rescinded?

General HiTE. Sir, we intended to use those dollars to improve
the actual helicopter itself throughout the fleet, the crash-
worthiness of it, and the other was to procure some helicopters to
put into the National Guard.

Mr. Dicks. As I understand it, the Army has determined that
this helicopter must be retrofitted with crashworthy seats and air-
bags in order to protect the crew?

General Hite. That is correct.

Mr. Dicks. The Army would also like to replace the current en-
gine with one that will achieve more reliable operational and full
mission performance?

General HiTE. That is correct, sir.

Mr. Dicks. The Army also believes that the new engine will re-
sult in substantial operations and support cost savings?

General Hite. That is correct, sir. The R-3 engine, sir.

Mr. Dicks. For the record, what is the cost of retrofitting the hel-
icopter with new safety seats and airbags and a new engine?

I am told that funds are not provided to do these things in 1997.

[The information follows:!

In fiscal year 1997 the funds required for the Safety Enhancements (Seats, Air
Bags and the Inflatable Body and Head Restraint System is $31.5 million. The new
engine is $37 miUion. The program profile for the total fleet of 383 helicopters is
as follows:

[In millions of dollars]

FY97

FY98

FY99

FYOO

FYOl

Total

Safety

Engines

$31.5

$11
37

00
$34

00
$20

00
$02

$42.5
130.0

172.5

General HiTE. And we would need a plus-up of approximately
$36 million in 1997 to start the effort. For the safety enhance-
ments, it is a total of $46 million through fiscal year 1998 and for
the R-3 model engine, it is a total of $145 million through the year
2001.

DEMILITARIZATION OF CHEMICAL MUNITIONS

Mr. Dicks. Okay. One final question. The Army has responsi-
bility for destroying all chemical-warfare-related material. The
budget and environmental regulations and community concerns all
determine if the chemical demilitarization program will remain on
schedule. Do you believe that you will meet the mandated date for
chemical demilitarization?

Mr. Decker. If you are speaking of the current date specified in
the law of 2004, it is going to be close. We have a program that
is well baselined; and if the permitting and regulatory processes re-
main on schedule, we can meet the 2004 date.

If the treaty gets ratified and the law were amended for the trea-
ty provisions — the law says that the treaty enters into force 180
days after the 65th nation signs the treaty. If the treaty is ratified
for example on 1 January 1997, then that says we have until 2007
to destroy the chemical stockpile.

One thing that we work hard at that is somewhat out of our con-
trol is the regulatory permitting process. We are working that real-
ly hard, but we have to have essentially three levels of regulatory
approval. It is focused at the States level in the States where we
have these stockpiles. It is the Environmental Protection Agency,
EPA, State and somewhat local.

We can't turn over the first shovel of dirt to build a facility until
we get the permit to build. Then you have an extensive process
after the facility is built to perform testing using surrogate agent
prior to getting the permit to conduct agent trial burns. The envi-
ronmental permitting process is turning into a substantially
lengthy procedure and that is the big variable in the program.
From a programmatic view, if those permits stay on schedule we
can meet the 2004 date.

ARMORED COMBAT EARTH MOVER (ACE)

Mr. Dicks. I thought I saw in the film the armored combat earth
mover, ACE. Was it in there?

General Anderson. I don't remember if it is or not.

Mr. Dicks. Whatever happened to it?

General Anderson. If we were to get additional dollars we would
want to buy out that program.

Mr. McDade. Careful now. General.

Mr. Decker. You did see it. There was one part where they were
shoveling some dirt around.

Mr. Dicks. How has it done?

General Anderson. It is doing fine. We have had to make some
modifications to it but it is doing fine. There is an effort to procure
the rest for the rest of the active Army.

Mr. Dicks. How many have you procured so far?

General Anderson. I think we have procured seven divisions
worth. I could get that for the record.

[The information follows:]

The Army has procured a total of 482 Armored Combat Earthmovers (448 Depart-
ment of Army funded, 34 Army National Guard Dedicated Procurement Program
funded). The equipment has been fielded to 5 of the 6 Active Divisions, 66 each; 1
Corps Mechanized Engineer Battalion, 19 each; 1 Armored Cavalry Engineer Com-
pany, 6 each; 1 Heavy Brigade Engineer Company, 6 each; Prepositioned Afloat

(Army War Reserve-3), 21 each; Army War Reserve-5 (Kuwait), 21 each. The Experi-
mental Forces 4th Infantry Division will soon have 13 on hand in a transfer from
the National Training Center. The balance are in the National Training Center,
Prepositioned (5 each). National Guard units (40 by May 96), Fort Leonard Wood
training facilities (19 each) or at Army Materiel Command (2 each).

Mr. Dicks. Tell us what it is and what the remaining require-
ment is. Thank you.

Mr. McDade. Gentlemen, thank you for your testimony.

We have additional questions we will be giving you to submit an-
swers for the record.

Mr. Dicks. We appreciate your candor.

The Committee will recess until 10 o'clock Tuesday.

[Clerk's note. — Questions submitted by Mr. Skeen and the an-
swers thereto follow:]

Nautilus/Tactical High Energy Laser (THEL)

Question. I'm sure you are aware that the THEL ranked second out of 140 con-
cepts examined in the Army's Mobile Strike Force 2010 planning. The THEL has
also been ranked as the highest science and technology priority of the Army's depth
and simultaneous attack battle lab. Why does the Army continue to resist Nautilus
and THEL in light of these impressive achievements?

Answer. The Army is interested in the technologies being demonstrated by Nau-
tilus and the capabilities that a THEL would bring to the battlefield. As you are
aware, however, the Army modernization budget is tightly constrained and makes
new program starts very difficult. Recently, the Commander of the United States
Army Air Defense Artillery School, Major General Costello requested proponency for
the THEL and a Training and Doctrine Command (TRADOC) decision is pending.

Question. As you know, the nation of Israel is a joint partner in the Nautilus and
THEL program. They have put up a sizable financial commitment to this program
($20 million) for their share of this effort. The US Army and the Israeli Ministry
of Defense have a signed memorandum of understanding on this matter. Why does
the Army continue to resist Israeli efforts to jointly develop this program?

Answer. Nautilus is being conducted under an existing memorandum of under-
standing, in which the Israeli Ministry' of Defense (IMOD) has provided a total of
$0.6 million in a specific foreign military sales (FMS) case in fiscal year 1995. An
additional $1.7 million for Fiscal Year 1996 in support of Nautilus is enroute to the
United States Security Assistance Command. The IMOD sizable financial commit-
ment is contingent upon a negotiated memorandum of agreement (MOA) for a
THEL demonstrator development program, that requires a large US cost share. The
Army has identified fiscal year 1997 ftinding needed to implement the demonstrator
program and support the MOA.

Question. In light of these achievements, does the Army plan to place HELSTF,
Nautilus and THEL in the fiscsd year 1998 Program Objective Memorandum
(POM)?

Answer. At present we believe that we will be able to support low level Nautilus
and THEL efforts in POM 98-03, but a final determination will rest on Army-wide
priorities reconciliation. We also expect to be able to continue and maintain the
HELSTF testing facility.

Question. Can the Army effectively use ftinds above the fiscal year 1997 Army re-
quest to implement the recommendation of the Army's Mobile Strike Force 2010
plans?

Answer. Yes. A $60 million fiscal year 1997 plus-up could be used to support the
development of a full weapon power THEL demonstrator and advanced THEL re-
lated critical component technology demonstrations. Of this amount, $45 million
would be used to build the demonstrator, combined with an Israeli contribution of
$20 million. The remaining $15 million could be used to fund advanced THEL con-
cept critical component technology demonstrations supporting the development of an
objective THEL weapon configuration.

Anti-Satellite (ASAT) Demonstration Test

Question. As you know. Congress recently removed the restriction that was pre-
viously in effect which prevented the use of the High Energy Laser Systems Test
Facility (HELSTF) from using a laser to test against an object in space. Does the

Army have any plans in place to perform such a test, which was deemed essential
in prior years?

Answer. The Army does not currently have a plan to demonstrate the HELSTF
capabilities, but is working on a concept for a possible demonstration in Calendar
Year 1996. Technical issues in the areas of command and control, target selection
and tracking are currently being examined. Once these issues are addressed. Army
and Department of Defense officials will be briefed on the HELSTF space control
demonstration concept. The initial round of briefings is expected to begin during
May 1996.

Question. Do you believe such a test would provide benefits in developing a pro-
gram to assist the Army and other battlefield commanders who are concerned about
the threats to our soldiers from Low Earth Orbit (LEO) satellites by our opponents
throughout the world?

Answer. The space control negation capability of the HELSTF is limited at the
present time by the facility architecture and the nature of LEO satellites and associ-
ated orbits. A successful demonstration of current capabilities would provide an ex-
istent, but limited capability to combatant commanders. A successful demonstration
would further provide a technical baseline from which to improve the HELSTF as-
sets to produce a fiiUy operational ASAT capability.

Joint Standoff Land Mine Detection System

Question. As you know, I have a continued interest in the development of the
Joint Standoff Land Mine Detection system, which is scheduled for testing in my
congressional district at New Mexico Tech's explosive test center. What is the cur-
rent status of the Army's obligation of the funds allocated by Congress and approved
by the President for tlus program?

Answer. In fiscal year 1996, the Congress appropriated $3.0 million for a Congres-
sional special interest program in Ground Penetrating Radar technology. Of the $3.0
million appropriated for Ground Penetrating Radar technology, $118 thousand was
this project's share of the general Congressional reductions applied against the
RDT&E, Army appropriation by Public Law 104-61 and by the recent revised eco-
nomic assumptions. Additionally, reductions which were proportionally distributed
to each program for other critical reprogrammings reduced the project by $32 thou-
sand. The remaining $2.85 million was released to the Army's Communications-
Electronics Command (CECOM) Night Vision and Electronic Sensors Directorate for
execution.

To this date, $691 thousand of the $2.85 million has been awarded for develop-
mental efforts in ground penetrating radar technology. An additional $358 thousand
has been awarded to the Socorro Test Range in New Mexico to support ground pene-
trating radar testing. The Army will internally use $253 thousand for technical and
management support for this effort. The Army will award the remaining $1,548 mil-
lion following the evaluation of proposals on technical merit for additional ground
penetrating radar development.

Question. It was my understanding that the $3.4 million for this program was re-
leased to the Army by the Department of Defense Comptroller and that the Army
taxed 2/3 of these funds before passing the remainder to the Army officials respon-
sible for this program. Is this true? Please explain the financial train of this project
and note any Army taxations of this project for the record.

Answer. In fiscal year 1996, the Congress appropriated $3.0 million for a Congres-
sional special interest program in Ground Penetrating Radar technology. Of the $3.0
million appropriated for Ground Penetrating Radar technology, $118 thousand was
this project's share of the general Congressional reductions applied against the Re-
search, Development, Test and Evaluation, Army appropriation by Public Law 104-
61 and by the recent revised economic assumptions. Additionally, reductions which
were proportionally distributed to each program for other critical reprogrammings
reduced the project by $32 thousand. A total of $2.85 million, therefore, is available
to the Army's Communications-Electronics Command (CECOM) Night Vision and
Electronic Sensors Directorate to execute this program. The Army is executing this
$2.85 million for ground penetrating radar technology, including concept develop-
ment and testing.

Question. Does the Army support investments in technologies which can detect
land mines and reduce casualties to U.S. soldiers?

Answer. Yes, the Army does support investments in technologies which can detect
land mines, thereby reducing casualties to U.S. soldiers. This is evidenced by the
increased planned fiinding projected in the Army's fiscal year 1998-2003 Program
Objective Memorandum for the Army's Science and Technology countermine pro-
gram. The deployment of North American Treaty Organization forces to Bosnia has

demonstrated that during peacekeeping missions convoys have a critical need to be
able to avoid landmines while performing their mission (i.e., traveling at speed). The
Army S&T countermine program is currently investigating standoff vehicular
mounted mine detector sensor suites that would, when integrated onto the lead ve-
hicle of a convoy, provide in-stride detection of landmines. The Army countermine
program is also investigating technologies to provide aerial reconnaissance for mine
detection, improved hand held mine detectors that will be capable of detecting non-
metallic mines, an in-stride vehicular mine detection and neutralization capability
plus the neutralization of smart mines.

[Clerk's note. — End of questions submitted by Mr. Skeen. Ques-
tions submitted by Mr. Hobson and the answers thereto follow:]

Tactical Vehicles

Question. Through the courtesy of the Chairman and this Committee, more money
was added to the fiscal year 1996 Defense Appropriations bill for trucks than for
the B-2 stealth bomber. However, trucks are not glamorous so this fact was not
publicized. Nevertheless, whenever I ask soldiers or commanders what they need
most, the answer is trucks.

The budget includes $521.5 million for procurement of tactical trucks. This in-
cludes $96.8 million for HMMWV, $233.1 milhon for the FMTV, and $163.3 miUion
for the family of heavy tactical vehicles. I understand that only about half of the
heavy truck funding actually buys trucks; the remainder is for flatracks and cargo
lift containers. What impact will this level of funding have on the industrial base
for heavy trucks?

Answer. The fiscal year 1997 budget for Heavy Tactical Vehicles is $163.3 million.
Of the $163.3 milhon, $77.4 million is for 5,897 PLS flatracks and 413 PLS Con-
tainer Handling Devices (CHD) and $85.9 million for Heavy Equipment Transporter
System (HETS). CHD is used to move containers on PLS without a flatrack. The
$85.9 million for HETS procures 188 systems.

The minimum sustaining rate (MSR) for Oshkosh Truck Corporation (OTC) is two
PLS trucks per day or the equivalent. The equivalent of one PLS truck is 1.25 HET
Tractor or 1.3 HEMTT. OTC military MSR is a combination of Army, Army Reserve,
National Guard, foreign military sales (FMS) and direct sales. The 188 HETS pro-
vides approximately 75 days of production. The shortfall is addressed in the Army
1-N hst (unfunded requirement) HEMTT wreckers (priority-68, $33.0 milhon, 126
wreckers). Palletized Load System trucks (priority-85, $50.0 million, 167 PLS
trucks) and HETS (priority 177, $40.0 million, 80 HETS).

Question. On the Army's "1 to N" list of unfunded modernization priorities, what
additional funding is proposed for trucks? Please tell us the item, funding level, ra-
tionale and priority.

Answer. The truck funding priorities on the "1 to N" list are as follows: Priority
11, High Mobility Multipurpose Wheeled Vehicle (HMMV^^), $41 milhon. Funds
plant to minimum sustaining rate; Priority 68, Heavy Expanded Mobile Tactical
Truck (HEMTT), $33 million. Buys 126 wreckers— fills Force Package I shortfalls;
Priority 85, Palletized Load System (PLS), $50 million. Buys 185 PLS, continues
production line and fills shortages in Artillery Units; Priority 113, Family of Me-
dium Tactical Vehicles, $5 million. Funds special kits to relieve gaining units from
funding burden; Priority 177, Heavy Equipment Transporter System (HETS), $40
million. Buys 80 HETS for activation of an International Standards Organization
(ISO) Handling Container Company (ICHO); Priority 298, Family of Heavy Tactical
Vehicles (FHTV)/Container Lift Kit (CLK), $5.5 million. Funds CLK that com-
pliments PLS; Priority 305, HEMITT Extended Service Program (ESP), $3 million.
Research and Development (R&D) funding to begin HEMTT ESP in fiscal year 1997;
Priority 306, 5-Ton Truck ESP, $6 million, R&D ftinding to harmonize Army 5-Ton
effort with that of the Marine Corps; Priority 311, HMMWV ESP, $1 milhon. Con-
tinues funding R&D work started in fiscal year 1996 that leads to the ESP of 9,500
vehicles for Force Package I.

Question. What has been the Army's experience with the tactical truck fleet in
Bosnia? Have there been any problems or surprises?

Answer. The performance of the tactical truck fleet has been pretty much as ex-
pected. The High Mobility Multipurpose Wheeled Vehicle (HMMWV) has once again
been a star performer. We have deployed an uparmored version that we did not
have for Operation Desert Storm. The two new heavy trucks in the Army's fleet:
the Heavy Equipment Transporter System (HETS) and the Palletized Load System
(PLS) have also received rave reviews. The newer five-ton trucks are also per-

forming well as are the HEMTTs. There have been no major problems with these
vehicles.

Question. The Palletized Load System (PLS) was developed and procured to haul
ammunition. I understand that it is being put to many other uses in Bosnia. Is this
true?

Answer. Yes, it is true.

Question. Can you give some examples?

Answer. The PLS is being used to transport 20 foot containers. Its mobility makes
it an ideal vehicle for the type of terrain in Bosnia. Eight PLS trucks have been
provided to the 1st Armored Division's Main Support Battalion to increase their ca-
pability. PLS is not currently authorized to the main support battalion.

Question. Do you expect that the Bosnia experience will result in additional PLS
missions and requirements?

Answer. It is difficult to tell at this time. The Army's Training and Doctrine Com-
mand is studying other uses of PLS. Our fiscal year 1997 budget submit contains
$10.3 million to procure Container Handling Devices (CHD) for the PLS. This item
of equipment will enhance the PLS's ability to load, unload and transport con-
tainers. At the present time containers must be placed on PLS flatracks in order
to be transported. We tested prototypes in Exercise Bright Star. They worked quite
well.

Question. Are other changes in truck requirements Ukely to result from recent ex-
perience in Bosnia, Haiti, Somalia, and Panama?

Answer. We do not expect major changes in Army truck requirements, as such.
The course for Army truck modernization was set by the 1980 Fleet Study, the 1983
Master Plan, the 1989 Modernization Plan and continued through the current 1995
Modernization Plan. The Army recognized the need for greater mobility, improved
cargo handling and vehicle survivability through these plans. The Army's Invest-
ment Strategy recognized that a combination of buy new and remanufacture is re-
quired to meet these goals. The fielding of the HMMWV and its continued evolution
is the fix to the light fleet problems. The Heavy Expanded Mobility Tactical Truck
(HEMTT), PLS and new HETS are the fix to the heavy fleet. The FamUy of Medium
Tactical Vehicles (FMTV), currently in production, is the program that will mod-
ernize the medium fleet, which is the last fleet to be modernized. The Army's Train-
ing and Doctrine Command is currently studjdng adding enhancements to the cur-
rent fleets such as ability to accept armor protection kits and various electronic ap-
plique.

Question. What are the Army's plans for providing armor protection for trucks in
Bosnia or elsewhere? How much will this cost and where will the funds be found?
What is the schedule and procurement strategy for each type of truck?

Answer. The Army is working on six initiatives to provide enhanced crew protec-
tion for tactical wheeled vehicles: 1) Accelerated production of 462 Up Armored High
MobiUty Multipurpose Wheeled Vehicles (HMMWV) (M1114), 2) 182 Armor Kits for
HMMWVs, 3) 166 Armor Kits for 5-Ton Trucks, 4) 132 Armor Kits for Heavy Ex-
panded Mobile Tactical Trucks (HEMTT), 5) 54 Armor Kits for Palletized Load Sys-
tem (PLS), and 6) 3,000 Protective BalUstic Blankets (PBB). These eff"orts are being
led by USA Tank Automotive and Armaments Command's (TACOM) TACOM's Re-
search, Development and Evaluation Center (TARDEC) along with Program Execu-
tive Officer— Tactical Wheeled Vehicles (PEO-TWV). The kits applied to the vehi-
cles are designed to provide increased protection from land mines, small arms fire
and horizontal antipersonnel mines. In addition, there are a total of 108 Ml 109
Uparmor HMMWVs in Bosnia and the Army plans to send an additional 30 from
Haiti. After deprocessing and upgrading, the additional 30 should be available for
issue in the June/July 1996 timeframe. All funding for these efforts came from cur-
rent or prior year dollars on existing truck lines.

The cost of accelerating the production of 462 Ml 114s is $24 million. Included in
this cost is the purchase of 72 additional Ml 114s, facilitization of the armoring
plant, additional labor and material costs and fielding support. Operation Joint En-
deavor (OJE) required the Army to purchase 72 more than the 390 M1114s planned.

In addition to the M 1114s, the Army is purchasing 182 armor kits for O'Gara
Hess & Eisenhardt (OGE) for installation on M1097 HMMWVs. Fourteen have been
shipped for installation in Europe. The remainder will be applied at OGE with deliv-
eries beginning in early May of this year. The cost of the kits is $6.8 million.

The 5-Ton Truck Armor Kits were fabricated at Rock Island Arsenal (RIA), Rock
Island, Illinois. All 166 kits are built and 114 have been shipped to Germisheim,
Federal Republic of Germany for application. The cost of the kits is $5.5 million.

The kits for the HEMTTs were developed by Simula Corporation of Tucson, Ari-
zona. Blasting testing has been successfully completed and vehicles are finishing up

endurance testing at Yuma Proving Ground (YPG), Arizona. Deliveries to Europe
begin in April. The cost of the kits is $7.2 million.

The PLS kits are being developed by TARDEC and built by RIA. The 54 kits will
cost $2.1 million. The Army expects to begin production in mid-May.

The PBB requirements are broken out as follows: 1,500 for HMMWVs, 750 for
M939s (5-Ton truck), 500 for M35A2s (2.5 Ton truck), 200 for HEMTTs and 50 for
PLS. The PBB provides protection from mine fragments up to 17 grains traveling
at 3,000 feet per second. The PBB contract was awarded to Protective Materials
Corporation (PMC) of Miami Lakes, Florida in March for $4.7 million. Shipments
to Europe began on 17 April.

The transportation, application and fielding costs are estimated to be $2 million
and will be paid out of the various field lines.

Question. Last year. Congress added $110 million to your budget for the Family
of Medium Tactical Vehicles (FMTV), anticipating a three year (1996, 1997, 1998)
renegotiated contract to replace the last year (1996) of the previous (current)
multiyear contract. What is the status of the contract renegotiation and when will
they be complete?

Answer. Our plan is to complete the ongoing negotiations for a fair and reason-
able price by June 1996.

Question. What is the status of deliveries under the current contract, and how do
the deliveries compare to the original contract schedule?

Answer. Initial fieldings began on January 30, 1996 and are continuing at this
time primarily at Fort Bragg. The contractor is slightly behind the delivery schedule
incorporated in the last contract modification.

Question. Is the Army fully satisfied with the progress of the FMTV manufacturer
to resolve problems and produce satisfactory trucks on schedule?

Answer. The contractor is currently retrofitting trucks to include all changes
which resulted from the test phase of the program. The retrofit effort will be com-
pleted in May 1996. The manufacturer has made considerable progress and is now
delivering a sufficient volume of vehicles for final inspection.

Question. What is the Army's strategy for the next FMTV procurement? What is
the schedule and milestones for implementing the strategy?

Answer. The Army Plans to award the follow-on production contract in last
FY1998 or early FY1999. The key milestone is the receipt of the Technical Data
Package (TDP) which is due in July 1997.

Comanche' Helicopter

Question. Last year the Committee added $100 million for the Comanche to puU
forward the critical technologies in that program. Many of us want to get this vital
new system in the hands of the troops for field testing sooner rather than later. We
want to pull the initial operating capability (IOC) forward from the planned year
2006. Would additional Comanche funds provide additional value for the Army
again this year?

Answer. Yes additional funds will provide additional value for the Army this year.
Since, however, the Comanche Program is fiilly executable at the current fiscal year
1997 funding level, the Army would like to first deal with other higher priority near
term requirements.

The $289 million FY1997 President's Budget request will provide for continued
engineering development of the aircraft system, continued digitization design (pri-
marily Electro Optic Sensor System (EOSS)), envelope expansion through prototype
1 flight test, growth engine development and testing, and manufacture of prototype
#2.

A plus up of approximately $200 million in Fyi997 would be used to: (1) possess
operationally deployable Comanche EOC aircraft in FY2002/2003 (as were the F-
117s during operation "Just Cause"); (2) respond to recent JROC initiatives; (3) inte-
grate technology from Comanche to other systems (Horizontal Technology Integra-
tion); and (4) enter #2 prototype flight testing a year earlier.

[Escalated million $J

FY98

FY99

FYOO

FYOl

Research, Development, Test & Evaluation (RDTE)

445

370

270
240

Procurement

360

Question. What critical technologies would benefit from additional resources?

Answer. As specified above, the technologies involved in the targeting, pilotage &
communication systems, as well as manufacture of prototypes would be accelerated
with any FY 1997 plus for Comanche.

Question. I understand the Army has made the force planning decision that the
Comanche will be the light attack helicopter for the Army in the ftiture. Doesn't this
make an earlier test, evaluation, and field more important than ever?

Answer. The Comanche is already scheduled to displace 232 Apaches that have
been utilized as scouts in the attack helicopter battalion starting in fiscal year 2015.
A version of the Comanche could be produced to replace the Apache as the attack
hehcopter in the Army and, as the "21st century attack helicopter," meet the needs
for attack helicopters in our sister Services.

Question. What additional funding is necessary in fiscal year 1997 to keep open
the options of a fiscal year 2003 IOC rather than a fiscal year 2006 one?

Answer. The Comanche Program is fully executable at the current fiscal year
1997 funding level. The $289 million President's Budget request will provide for con-
tinued engineering development of the aircraft system, continued digitization design
(primarily EOSS), envelope expansion through prototype #1 flight test, growth en-
gine development and testing, and manufacture of prototype #2.

Given that Comanche is executable and will provide a fieldable system by fiscal
year 2006 the Army would prefer to first deal with higher priority requirements.
However, a plus up of approximately $200 million in fiscal year 1997 would be used
to: (1) possess operationally deployable Comanche EOC aircraft in fiscal year 2002/
2003 (as were the F-117s during operation "Just Cause"); (2) respond to recent
JROC initiatives; (3) integrate technology from Comanche to other systems (Hori-
zontal Technology Integration); (4) enter #2 prototype flight testing a year earlier,
and (5) continue to postiire program for a fiscal year 2003 IOC.

An acceleration of the program to a fiscal year 2003 IOC would also be very ex-
pensive in the near term. Additional funds required in the remainder of the current
future years defense program are:

[Escalated million $]

FY98

FY99

FYOO

FYOl

Research Development Test & Evaluation (RDTE)

445

370

270
240

Procurement

360

Question. What additional funding would be necessary in fiscal year 1997 to pro-
vide aircraft for a National Training Center (NTC) type demonstration in fiscal year
1999.

Answer. An increase in fiscal year 1997 and 1998 is required to provide aircraft
for an NTC type demonstration in fiscal year 1999. It would require approximately
$200 million more in fiscal year 1997 and 1998 to assure the acceleration necessary
to support a fiscal year 1999 demonstration. The fiscal year 1997 amount is the
same $200 million necessary to continue to posture the program for a 2003 IOC.

Black Hawk Helicopter

Question. The fiscal year 1997 budget request includes 36 UH-60 Black Hawks —
28 for the Army and 8 Search and Rescue HH-60Gs for the Air Force. The Black
Hawk program is currently in the last year of its fourth multi-year contract. In the
fiscal year 1996 Defense Appropriations bill. Congress directed that the Army enter
into a new multi-year contract for at least 36 Black Hawks a year. What is the cur-
rent status of that negotiations for the new multi-year contract?

Answer. In fiscal year 1996, Congress funded advanced procurement for 36 air-
craft to be bought in fiscal year 1997. The Program Manager is currently analyzing
Sikorsky's proposal for a new multi-year procurement for 36 Black Hawks/year. The
proposal will be officially deUvered by the end of April. This will be negotiated in
the next few months. The contract award for this procurement is not scheduled until
December 1996, after receipt of the necessary fiscal year 1997 funds.

Question. Last year, when the Army testified before this Committee, the Army
stated that at the conclusion of the multi-year buy in fiscal year 1996, the Army
would still have a substantial shortfall of Black Hawks. What is the total current
requirement for Black Hawks for the Army as well as the Army National Guard?

Answer. The current Army requirement aircraft including the Army National
Guard for Black Hawk is based on Total Army Analysis 03 issued in January, 1996.
This requirement is for 2043 aircraft. At the completion of Multi-year V in fiscal
year 2001 the Army will have procured a total of 1622 aircraft leaving a shortfall
of 421 aircraft.

Use of Foreign Equipment by U.S. Soldiers

Question. I have received complaints from people who say that news coverage of
activities in Bosnia show United States soldiers using Swedish, German, and French
vehicles/equipment. American troops should use American equipment. What is our
policy?

Answer. The deployment of United States Forces to various areas of operations
throughout the world requires tailored equipment packages. No deployment is the
same. Many factors are considered by operational planners for each contingency. It
is Army doctrine to deploy with approved equipment, procured through Army logis-
tics systems. Soldiers deploy with their Common Table of Allowance 50 equipment
(i.e., load carrying equipment, sleeping bags, and other individual field equipment),
and their Table of Organization and Equipment items such as major combat system
(e.g., tanks, personnel carriers, howitzers, etc.), radios, and weapons. These items
are never substituted.

Many factors affect combat support systems such as transportation and soldier
comfort.

a. The availability of air frames may limit the number of available United States
trucks, buses, messing facilities, and other large cubic measure support systems ini-
tially.

b. Host nation agreements negotiated by the State Department and the Com-
mander-in-Chief in the Area of Operation may affect the use of local, readily avail-
able supplies and support items.

c. The Competition in Contracting Act does not permit us to exclude foreign na-
tionals from competing for Department of Defense Acquisitions. The Buy American
Act has been substantially waived for North Atlantic Treaty Organization allies and
other signatories to the Trade Agreements Act.

d. Contractor support to operations, such as that provided by Brown and Root,
may use locally leased/procured equipment and supplies until major end items (e.g.,
Force Provider systems) arrive.

[Clerk's note. — End of questions submitted by Mr. Hobson.
Questions submitted by Mr. Nethercutt and the answers thereto
follow:]

Bradley Fighting Vehicle Armor Tiles

Question. Mr. Decker, one of the Army' priorities for additional funding is reactive
armor tiles for Bradley Fighting Vehicles. Could you say a few words, either now
or for the record, about what kind of protection this offers the troops and crew in-
side the Bradley? How much money would be required to finish this upgrade pro-
gram?

Answer. 2nd Generation (GEN), Bradley armor tiles are designed primarily to
protect Bradley crews and troops against hand-held, anti-tank, chemical-energy mu-
nitions (i.e., high explosive anti-tank — "HEAT"). The tiles also mitigate against
some large caliber HEAT threats. The exact specifications and protection levels are
classified. The Army requirement is for 178 sets of Bradley armor tiles. Currently,
68 sets of 2nd GEN tiles are on contract. The Army would require $35.5 million in
fiscal year 97 to buyout the remaining 110 sets of Bradley armor tiles. This will sat-
isfy the 178 set requirement and establish a domestic production base.

Helicopter Crash Safety

Question. On March 19, a Marine CH-46 helicopter with 12 Marines on board
crashed near Yuma. Luckily, all 12 Marines escaped serious injury, but this raises
the issue of helicopter safety. Mr. Decker how safe are passengers on Army Heli-
copters? Are there any passenger safety enhancements not currently funded in the
Army budget that you would like to make if additional funds are available?

Answer. We would like to begin the Safety Enhancement and Engine programs
for the Kiowa Warrior OH-58D helicopter as described below. The program is iden-
tified as a fiscal year 1998-2003 Program Objective Memorandum issue. The pro-
gram includes retrofitting Crash Worth Seats, Air Bags and the Inflatable Body and
Head Restraint System (IBAHRS) for the entire fleet of 383 helicopters. A new R-
3 model engine, which is planned for retrofit, includes a Full Authority Digital En-
gine Control (FADEC) for the entire fleet. The total cost for the Safety and Engine
programs is $172.5 million. The installation of this equipment will result in elimi-
nating injuries in 90 percent of the crashes that would otherwise be unsurvivable.

Comanche Helicopter

Question. One program that is very important to modernizing the Army's heU-
copter fleet and overall fighting ability is the Comanche development program,
which is currently scheduled for initial operating capability (IOC) in 2006. What ad-
ditional funding for this program would be necessary in fiscal year 1997 to keep
open the option of reaching IOC in fiscal year 2003 instead of fiscal year 2006?

Answer. The Comanche Program is fully executable at the current fiscal year
1997 funding level. The $289 million fiscal year 1997 President's Budget request
will provide for continued engineering development of the aircraft system, continued
digitization design (primarily electro optic sensor system (EOSS)), envelope expan-
sion through prototype #1 flight test, growth engine development and testing, and
manufacture of prototype #2.

Given that the Comanche program is executable and will provide a fieldable sys-
tem by fiscal year 2006, the Army would prefer to first deal with higher priority
requirements. However, a plus up of approximately $200 million in fiscal year 1997
would be used to: (1) possess operationally deployable Comanche EOC aircraft in
FYF02/03 (as were the F-117s during operation "Just Cause"); (2) respond to recent
JROC initiatives; (3) integrate technology from Comanche to other systems (Hori-
zontal Technology Integration); (4) enter #2 prototj^e flight testing a year earlier,
and (5) continue to posture the program for fiscal year 2003 IOC.

An acceleration of the program to a fiscal year 2003 IOC woiild also be very ex-
pensive in the near term. Additional funds required in the remainder of the current
fiiture year defense program are:

[Escalated million $]

FY98

FY99

FYOO

FYOl

Research, Development, Test & Evaluation (RDTE)

445

370

270
240

Procurement

360

Question. What additional funding would be necessary in fiscal year 1997 to pro-
vide aircraft for a National Training Center (NTC) tjrpe demonstration in fiscal year
1999?

Answer. An increase in fiscal year 1997 and fiscal year 1998 is required to provide
aircraft for an NTC type demonstration in fiscal year 1999. It would require ap-
proximately $200 million more in fiscal year 1997 and fiscal year 1998 to assure
the acceleration necessary to support an fiscal year 1999 demonstration. The fiscal
year 1997 amount is the same $200 million necessary to continue to posture the pro-
gram for an fiscal year 2003 IOC.

[Clerk's note. — End of questions submitted by Mr. Nethercutt.
Questions submitted by Mr. Murtha and the answers thereto fol-
low:]

Bradley Fighting Vehicle Modifications

Question. The budget includes $134.4 million for Bradley Fighting Vehicle Modi-
fications, funded under the "Bradley Base Sustainment". In the past this program
has supported the conversion of the oldest Bradley AO to the more modem Bradley
A2. In fiscal year 1997, we understand that the funding begins the conversion of
Bradley A2 vehicles and the A3 configuration. Is this correct?

Answer. Yes. Fiscal year 1997 is the first year of the A3 Low Rate Initial Produc-
tion (LRIP).

Question. Last year the Committee expressed its belief that the AO conversion pro-
gram should continue and directed the Army to submit a program/funding profile
to continue this program. The plan was supposed to be submitted with the 1997
budget. What is the status?

Answer. The Bradley AO to A2 report was in final staffing when the Bradley Pro-
gram Office received a $1.1 billion plus-up in a Program Budget Decision for fiscal
years 1999-2001. Thus, the report required revision. The Army has approved the
report. It is being delivered to the appropriate Committees.

Question. What has been the Army's experience to date with the AO conversion
program?

Answer. To date, the program has been very successful. The program calls for 454
AO vehicles be converted to the A2 configuration. The program is funded through
fiscal year 1996.

Question. The Committee directed that the fiscal year 1996 and any future pro-
gram for Bradley AO conversion be executed as currently structured. Is the Army
niUy complying with these instructions?

Answer. The Army is executing the conversion program as currently structured
with 105 AO to A2 conversions in fiscal year 1996.

Question. What would it cost to maintain a reasonable AO conversion program in
fiscal year 1997? How many conversions would this fund?

Answer. In fiscal year 1997, $169 million is required to maintain a reasonable AO
conversion program. This would fund 101 AO to A2 conversions. However, the Army
has no requirement to continue AO upgrades beyond the current fiscal year 1996
buy.

Question. What is the status of the Bradley A3 program? What is the Army's ac-
quisition strategy for this program?

Answer. The A3 program is currently in the Engineering and Manufacturing De-
velopment (EMD) phase. The first prototype delivery is scheduled for August 1996.
A total of eight EMD prototype Bradley A3s are being manufactured. These proto-
types will be used to support technical, operational and live fire testing activities
in fiscal years 1997-1999. The Army's Acquisition Strategy is to produce a total of
1602 vehicles. These will support four variants: (1) Infantry Fighting Vehicle (IFV),
(2) Cavalry Fighting Vehicle (CFV), (3) Bradley Stinger (Linebacker), and (4) Brad-
ley Fire Support Vehicle (BFIST). Commencing in fiscal year 1997, there are three
years of Low Rate Initial Production (LRIP). The first 27 LRIP vehicles will support
Initial Operational Testing and Evaluation (lOT&E). An LRIP In Process Review
(IPR) is scheduled for 3rd Quarter, fiscal year 1997 with a sole source contract
award to United Defense Limited Partnership (UDLP). The Army has increased pro-
curement funding for fiscal years 1999-200 1 to synchronize Bradley A3 fielding with
the Abrams M1A2 SEP tank program.

[Clerk's note. — End of the questions submitted by Mr. Murtha.
Questions submitted by Mr. Dicks and the answers thereto follow:]

Comanche Helicopter

Question. What benefit would accelerated production of Comanche have in terms
of allowing the Army to learn how to fight and employ Comanche on the battlefield?

Answer. The major benefit is allowing our soldiers time to evaluate the Comanche
in the field environment, feeding user input back into the Comanche in the field en-
vironment, feeding user input back into the design process, and improving the Co-
manche's warfighting design. Early demonstration of the warfighting capabilities
that Comanche brings to the battlefield allows the Army to improve the supporting
communications networks of other systems to leverage the overwhelming capability
Comanche brings to the battlefield.

Question. What additional ftinding do you need in fiscal year 1997 to allow Co-
manche to proceed to an Initial Operational Capability (IOC) of 2003 instead of
2006?

Answer. A plus-up of approximately $200 million in fiscal year 1997 will posture
the program for restoration of an fiscal year 2003 IOC. With additional outyears
funding, the fiscal year 2003 IOC program would ultimately result in $3 billion sav-
ings over the current program. The effective use of fiscal year 1997 funds are not
contingent upon additional funding in the outyears. A restoration of the program to
an fiscal year 2003 IOC would also require additional funds in the remainder of the
current future years defense program (FYDP) and beyond. The Army has considered
this option. However, due to current funding constraints and near-term operational
requirements, the Army has chosen to continue with the fiscal year 2006 IOC pro-
gram. Increases in the FYDP required for restoration of the fiscal year 2006 IOC

[In millions of dollars]

FY 98

FY 99

FY 00

FY 01

Research, Development, Test and Evaluation

445

370

270
240

Procurement

360

Question. Since you plan to retire both the Cobra and the OH-58 fleets, why not
accelerate production of Comanche to provide for a smoother transition?

Answer. Acceleration of Comanche production would provide a smoother transi-
tion to retire the obsolete Vietnam era aircraft (OH-58 and AH-1). These aircraft
are survival, able to fight at night on a modern battlefield, nor compatible with the

Apache. Neither has the power to operate in many areas of the world, and can not
be upgraded with the latest technology. Comanche fixes the Army's tactical armed
reconnaissance deficiency and provides attack aircraft; in support of the light divi-
sions for the 21st Century.

However, due to current funding constraints and near-term operational require-
ments, the Army has chosen to continue with the fiscal year 2006 IOC program.

Question. Will Comanche be capable of assuming future attack missions not only
for the Army, but for other services as well?

Answer. Comanche's survivability (particularly low observable), increased Oper-
ating Tempo, computational targeting speed, ability to identify friend or foe, integra-
tion with long range indirect fire weapon systems, and joint digital communications
provide the necessary warfighting effectiveness and lethality demands of a future
Joint Battlefield attack helicopter.

Question. Are the commercial practices being used in the Comanche development
important? Have they saved money?

Answer. Commercial practices are playing a key role in Comanche development.
Military Standard components, especially hermetically sealed electronics, will not be
affordable, and in some cases not available during development and production.
Through the use of commercially developed Plastic Encapsulated Microcircuits
(PEM's) in those applications normally requiring MIL STD parts, the Comanche
program will save approximately $292 million. In addition, the Comanche is incor-
porating commercial high reliability industrial parts within the inertial navigation
system, which should result in an additional significant cost reduction for the pro-
gram. Comanche is also utilizing a commercially developed ISO-9000 quality system
which allows the use of established procedures in an atmosphere that emphasizes
product conformance to requirements and continuous improvement. Savings will be
realized through a more efficient contractor system with reduced government over-
sight. In addition, this quality application will provide access to a larger vendor base
resulting in increased competition and significantly lowered prices.

M829A2 Kinetic Energy Tank Round

Question. The Army acquisition strategy for the research, development and acqui-
sition of tank ammunition was established to insure the long-term viability of the
two U.S. prime producers of 120 millimeter (mm) tank ammunition — Olin Ordnance
and Alliant Techsystems. To preserve the industrial base for the two tank combat
rounds, Kinetic (KE) and high-explosive anti tank (HEAT) developmental contracts
were awarded to the two companies — KE to Olin Ordnance and HEAT to Alliant
Techsystems. To insure competition, the 120mm tank training ammunition is a com-
petitively split procurement (historically 60/40).

The Army negotiated a multiyear (4-year) contract with Olin Ordnance for the
production of the M829A2 KE round and the Administration's budget provides $79.7
million in fiscal year 1997 and an equal amount in fiscal year 1998. However, we
understand that after fiscal year 1998, production of the M829A2 stops and the KE
production line will go cold. If this is so, what are the Army's plans to maintain
the industrial base for tank rounds after 1998?

Answer. The Army is reviewing alternatives to keep the production base viable
when the tank multiyear buy ends. The Army's main concern at the end of the
multiyear buy is the production facility for the penetrator rod. The Army Ammuni-
tion Functional Area Assessment for fiscal year 1996 (FAA fiscal year 1996) has
noted that the penetrator rod production capabiUty is a matter for concern.

Question. Even with the four or five years of production of the M829A2, is it not
true that the Army's desired stockage levels for this round are still woefully inad-
equate?

Answer. The Army FAA fiscal year 1996 shows an adequate stockage level for
120mm kinetic energy tank founds. This stock level is met with the primary round,
the M829A2, and a suitable substitute, the M829A1. If the question is solely con-
fined to the M829A2, then our planned procurement meets the Army modernization
strategy goals.

Question. General Sullivan testified last year that the threat to U.S. tanks from
potential adversaries with access to Russian advanced armor and munitions is grow-
ing and that developments in active add-on armor protection systems have reduced
the effectiveness of U.S. kinetic (KE) rounds.

With this threat continuing to grow, what are the plans for developing a follow-
on round to the M829A2?

Answer. The Army Project manager for Tank Main Armament Systems is devel-
oping the M829E3 120 millimeter tank round as a follow-on round.

[Clerk's note. — End of questions submitted by Mr. Dicks. Ques-
tions submitted by Mr. Hefner and the answers thereto follow:]

Joint Surveillance and Target Attack Radar ( JSTARS) Ground Station

Module (GSM)

Question. We understand that you have deployed the JSTARS system to support
the U.S. and AlUed Forces' Bosnia Peace Keeping Operation. How is the system per-
forming?

Answer. The GSM's have been extremely effective in providing JSTARS data, cor-
related with Signals Intelligence data received through the Commander's Tactical
Terminal (CTT). We are very pleased with the support provided and comments re-
ceived from the Air and Ground Component Commanders. The JSTARS system is
deployed as part of the Implementation Force (IFOR) in support of operation Joint
Endeavor. We have a combined Army and Air Force Provisional Squadron based at
Rhein Main Airbase, Germany, which serves as the Squadron and aircraft's main
operating base with 13 Ground Station Modules (GSM) deployed with the ground
and air component commanders in Bosnia and supporting locations. The GSMs con-
tinue to provide intelligence through the CTT when the JSTARS aircraft is not on
station. We were able to field the Light GSM's much earlier than planned based
upon the increased emphasis and funding provided by Congress in 1993.

Question. We understand that the Army has recently awarded the contract for the
Common Ground Station (CGS) module. What additional capabiUties will this pro-
vide the tactical commander and will this include additional sensors such as the
Predator UAV, ASARS II and ARL?

Answer. We have awarded a competitive contract for the Common Ground Station
to an industry team led by Motorola which will greatly enhance the capabilities of
the JSTARS GSM. The CGS design incorporates the latest in commercial technology
and employs an open system architecture that will ensure rapid insertion of tech-
nology into the system. The CGS design will allow additional sensor products to be
received and correlated with current products. Motorola has demonstrated links to
the Predator UAV and is also working with Hughes on the ASARS HE and Cali-
fornia Microwave, the Airborne Reconnaissance Low (ARL) contractor, to have a di-
rect downlink into the CGS.

Question. Last year you announced the decision to withdraw the last of the OV-
1 Mohawks from the Army inventory by the end of this year. How is that effort com-
ing and how do you plan on providing intelligence and warning support to the Com-
mander in Chief (CINC), United States Forces Korea (USFK)?

Answer. Mohawk withdrawal is proceeding on schedule. Additionally, the Army
is working with Motorola under the CGS contract to include the capability to
downlink sensor data from the ASARS HE and the Airborne Reconnaissance Low
(ARL) directly into the GSM's deployed in Korea. We expect to have this effort com-
pleted and deployed within the next 6 months.

Question. Last year the Department of Defense provided a demo of the JSTARS
capability to North Atlantic Treaty Organization (NATO) Defense Ministers aboard
the USS MT WHITNEY. How did this effort go and what are we doing to promote
the JSTARS system as the candidate for the Alliance Ground Surveillance (AGS)
mission?

Answer. Last October, at the USS MT WHITNEY demo, we demonstrated the
ability to downlink JSTARS data from the E-8 aircraft to the deployed Rapid Reac-
tion Force Command element aboard the USS MT WHITNEY. The demo went ex-
tremely well. Since that time, we have deployed a prototype CGS to the SHAPE
Technical Center at the Hague. This system, supported by Motorola, is assisting
NATO to identify and develop the various technical interface requirements between
JSTARS and the NATO command and control system.

Question. This year we provided funds and direction to prociu"e GSM's in support
of the USMC operational requirements. How is this effort progressing?

Answer. The Army is ready, willing and able to procure the GSM's for the US Ma-
rine Corps. The Army is working closely with Marine Corps to develop their pro-
curement plan. As soon as the plan is finalized, the Army will execute the procure-
ment.

[Clerk's note. — End of questions submitted by Mr. Hefner.
Questions submitted by Mr, Sabo and the answers thereto follow:]

Tank Automotive Research, Development and Engineering Center (TARDEC)

Question. In fiscal year 1995, Congress appropriated $6 million in research and
development funds for Phase I of a two-phase program to upgrade the tank and ve-
hicle simulation laboratory at the Army's Tank Automotive Research, Development
and Engineering Center in Warren, Michigan. It is my understanding that the Army
has awarded the Phase I contract and that work is underway for the first phase
of the facility upgrade, which will add a computer-generated virtual imagery system,
a ride-motion simulator and upgrade the existing new station (turret) motion base
simulator. The second phase is intended to upgrade the lab's hydraulic capacity to
enable simultaneous testing on multiple stations, and to add a central computer sys-
tem and a heavy vehicle durability simulator. The report accompanying the fiscal
year 1996 Defense Appropriations Act advised the Army to provide adequate funds
for Phase II of the program in the fiscal year 1997 budget request. However, the
Army did not do so. I would appreciate an explanation of the Army's decision not
to fund Phase II in the fiscal year 1997 budget^request. If the reason funding could
not be recommended this year was due to budgetary constraints, I would like to
know whether the Army still considers this to be an important project to pursue.

Answer. In fiscal year 1995 Congress provided $6.0 million only for upgrading the
U.S. Army TARDEC Physical Simulation Laboratory. The report stated that the up-
grades were to include increased power supply, newer digital control systems, and
improved visual displays, in order to make the laboratory more efficient and effec-
tive. The Army supported this effort as a single year, one time effort and scoped
the contractual effort within the $6.0 million provided by Congress. The fiscal year

1995 report language did not refer to a second phase and the Army did not envision
a Phase II effort for this program. Due to the current constrained resources and rel-
ative priority of this project, the Army has not provided any additional funding for
this effort. The Army believes that the funds already provided by Congress have sig-
nificantly increased the Simulation Laboratories capabilities and a follow on effort
is not required.

Question. As originally envisioned. Phase II was expected to cost $6 million. Is
this still a valid estimate of the cost of completing the Phase II upgrade of the
TARDEC lab?

Answer. The Army has not envisioned a Phase II effort for this program.

[Clerk's note. — End of questions submitted by Mr. Sabo. Ques-
tions submitted by Mr. Young and the answers thereto follow^:]

HuEY UH-l Service Life Extension Program (SLEP)

Question. In the fiscal year 1994 budget process. Congress appropriated $15 mil-
lion to the Army with direction to begin a Huey helicopter SLEP for the Army Na-
tional Guard. To date there is still no Huey SLEP and the Army has reprogrammed
$9.9 million of the original $15 million. Please tell the Committee when you plan
to comply vidth our direction and how do you intend to proceed?

Answer. Congress appropriated a $15 milHon plus-up to the fiscal year 1994 budg-
et in order to initiate a UH-l SLEP program. However, because there was no valid
requirements document for a UH-l SLEP, the Army — vrith Congressional support —
reprogrammed $9.9 million of this plus-up to fund digitization requirements for the
OH-58D Kiowa Warrior. The remaining $5.1 million is currently on withhold at the
Office of the Secretary of Defense.

Although there is still no valid requirements document for a UH-l SLEP, a re-
quirement does exist for 131 Light UtiUty Hehcopters (LUH). These aircraft will be
used to conduct missions that do not require UH-60 Black Hawk capabilities. While
it is the Army's intent to ultimately satisfy the LUH requirement with the UH-60
as part of its modernization effort, the UH-l was considered as an interim alter-
native based on current budget constraints. Congressionally directed Army studies
of the LUH and UH-l SLEP recommended that if the UH-l were selected for the
LUH role, a minimum SLEP consisting of upgraded avionics and wiring be consid-
ered for the 131 LUH aircraft. While the Army believes that an avionics and wiring
upgrade may be justifiable, there is currently not a requirement for the performance
improvements gained from the integration of a new engine.

Question. The Army National Guard has committed $10 million of its fiscal year

1996 Directed Procurement Program funding to begin the Huey SLEP. This pro-
gram will be initiated in order to provide modernized Huey helicopters to meet the
Guard's LUH mission. The Committee recognizes that the Guard will need Army
help to begin this vitally needed program. How do you plan to help and when can
we expect to see some progress?

Answer. The UH-1 helicopter, as it exists today, is supportable and safe to fly
through 2010. However, as stated above, the Army believes that a wiring and avi-
onics upgrade for the 131 LUH aircraft may be justifiable.

Unfunded Requirements

Question. Last year, the Army identified critical modernization shortfalls to the
Committee. As a resvdt, the Committee was able to provide additional funding to
relieve modernization deficiencies. Once again, we hope that you will continue to co-
operate with us as we review the fiscaJ year 1997 budget request. If additional funds
were made available in fiscal year 1997, how would you allocate the funds? For each
of the programs you have identified, what would be the benefit of providing the ad-
ditional funds?

Answer. The Army has compiled a prioritized list of unfunded requirements,
known as the 1-N list. It details how additional funds would be spent and what
benefit these additional fiinds would provide for each of the requirements listed.
Topping the list is Force XXI initiatives with funds going to conduct operational
prototyping; Force XXI Digitization, with funds to be applied to Advanced
Warfighting Experiment (AWE's); Digital Appliques and Multiple Integrated Laser
Engagement System (MILES) simulation systems; and Army Battle Command Sys-
tem (ABCS), among others; and Research, Development, Test and Evaluation Base
Operations (BASEOPS), with money to be used to fund BASEOPS and Real Prop-
erty Maintenance (RPM) at 85 percent.

Question. Could you achieve savings if Congress provided additional funds to pro-
cure items at an accelerated rate? If so, which procurement items would you accel-
erate? What would be the near-term and long-term savings of the accelerated pro-
curement?

Answer. We have developed a 1-N list which prioritizes our requirements for ad-
ditional funding. Also, we are currently conducting a study of long and short term
savings that would be achieved through acceleration or buy-out of systems on that
list. Preliminary indications from this study are that substantial savings can be
achieved on some systems such as the Bradley program, where it is estimated that
increasing the fiscal year 1997 low rate initial production (LRIP) rate will conserve
$22.2 million in the outyears as a result of near-term economies of scale. On the
Stinger program, additionail funding of $22.8 milUon in fiscal year 1997 would allow
buy out of Block I modifications for all platforms in Force Package 1 and 2 and also
double the retrofit rate to 1,300 missiles per year. This would result in a $3 million
overall savings on the Stinger. On the CH-47 program, fiscal year 1997 funding in
the amount of $52.4 million will assist in accelerating the CH-47D engine conver-
sion effort and will achieve a per year savings of $1.3 million for the first 25 air-
craft. Under the Improved Recover Vehicle program, a fiscal year 1997 plus-up of
$99.9 million would resvdt in a 15 percent unit cost reduction, a $2 million cost
avoidance and a $72 thousand per year operation and supplies savings. Similar sav-
ings for plus-ups on other 1-N Listed programs are becoming apparent and details
will be provided to you when we have completed our study.

Comanche Helicopter

Question. Would there be cost savings if the Comanche program were accelerated
from fiscal year 2006 to fiscal 2003?

Answer. Yes.

Question. If so, how much would you expect to save?

Answer. Restoration of Comanche IOC to fiscal year 2003 would result in an ac-
quisition savings of $3 billion savings over the current program. It is also estimated
that $1 billion of operational and support costs would be avoided each year for a
Comanche fleet versus the older generation Vietnam era aircraft.

Question. What would be the benefit of accelerating the Comanche program from
2006 to 2003?

Answer. It accelerates the Army's only solution to its tactical armed reconnais-
sance deficiency and provides attack aircraft in support of the light divisions for the
21st Century by replacing the obsolete Vietnam era aircraft (OH-58 and AH-1).
These aircraft cannot fight at night on a modern battlefield, are not survivable nor
compatible with the Apache, do not have the power to operate in many areas of the
world, and can not be upgraded with the latest technology.

The Comanche is the centerpiece for Army Aviation modernization and the tac-
tical digitized battlefield. Comanche is the only weapon system with the required
technologies to ensure success on the 21st century battlefield. "Comanche makes
Force XXI a reality."

Question. Critics of the Comanche program have stated that the Longbow Apache
can satisfy the role of the Comanche. Although the Apache Longbow is a lethal high
performance helicopter, it will be 20 years old when the Comanche is fielded. Could
the Comanche helicopter replace the Apache Longbow at the end of its life expect-
ancy?

Answer. Yes. The Comanche is already scheduled to displace 232 Apaches that
have been utilized as scouts in the attack helicopter battalion starting in fiscal year
2015. A version of the Comanche could be produced to replace the Apache as the
attack helicopter in the Army and, as the "21st century attack helicopter," meet the
needs for attack helicopters in our sister Services.

Question. What would be the Comanche's limitations in the attack role?

Answer. Comanche in the heavy division attack helicopter battalion would carry
two Hellfire missiles less than the Apache. Comanche can carry 14 Hellfire missiles
and Apache can carry 16. Scenarios requiring rapid target servicing are minimally
effected by a reduction of two missiles per aircraft. Comanche's survivability, in-
creased operational tempo, computational targeting speed, ability to identify friend
or foe, and integration with long range indirect fire weapon systems and joint attack
assets provides the necessary warfighting effectiveness to more than compensate for
the reduction of two missiles per aircraft payload.

Question. Comanche's production costs have been one area of concern. If Apache
Longbow helicopters were replaced with Comanche, how many additional Coman-
che's would the Army procure? What do you estimate the cost of each Comanche
would be as a result of the increased buy?

Answer. The number of Comanches purchased to replace the Apache as an attack
helicopter would be dependent upon future requirements and force structure. Pro-
jecting the current force structure would mean the Comanche would replace the
Apache in approximately 25 attack helicopter battalions. This would require a min-
imum of 758 additional Comanches added to the current Commanche Army Acquisi-
tion Objective of 1292 Comanche aircraft. The additional 758 aircraft would be
bought after fiscal year 2020 at 72 aircraft per year. The current estimated Unit
Flyaway cost for 1292 Comanches is $13.6 million in constant fiscal year 1996 dol-
lars. The Unit Flyaway estimate for 2050 aircraft (1292 + 758) at a maximum pro-
duction rate of 72 aircraft per year would be a reduction to $12.6 million per aircraft
for an overall reduction of $1 million per aircraft. This reduction assumes the cur-
rent projected production rate of 72 aircraft per year would continue for the addi-
tional aircraft. Should this rate increase for the additional quantities, the unit cost
would be reduced further.

Apache Longbow Helicopter

Question. The Apache is the Army's attack helicopter. Originally fielded in the
1980's the Army is currently modifying a limited number of existing Apache heli-
copters to the Apache Longbow. With its improved radar and weapon systems, the
Longbow Apache will have improved targeting, survivability and maintainability.

In fiscal year 1996, the Congress provided an additional $82 million to begin a
multi-year contract for the Apache Longbow helicopter. According to the Army the
multi-year contract and the additional funds would allow the Army to procure 240
helicopters and save $3 million per helicopter.

The Army is currently negotiating a five year multi-year contract for 232 Apache
aircraft, 8 aircraft less than the Army was planning to procure. The Army states
the number of aircraft has gone down because inflation cuts that were taken during
the budget build. If the contract has not been negotiated for a fixed price and the
cuts were inflation savings, why did the number of aircraft go down?

Answer. The Army is currently negotiating for 240 aircraft, however, the Army
believes that with available funds, negotiations could result in a lower quantity. The
Acquisition Decision Memorandum from the Milestone III production decision di-
rected a quantity of at lease 232 aircraft. The estimated number of aircraft went
down from 240 to 232 because the original McDonnell Douglas aircraft proposal did
not leave sufficient allowance for efforts not covered in this proposal, for example,
government system program management, government furnished equipment, train-
ing devices, and Fire Control Radar.

Question. When will negotiations be complete?

Answer. The Army anticipates the contract will be awarded not later than May
31, 1996.

Question. What are the estimated savings achieved by the multi-year based on the
fiscal year 1997 budget?

Answer. A recent cost comparison between a single year program for 232 aircraft
and a multi -year program for 232 aircraft reveal a savings of $134 million, plus a
cost avoidance of $505 million due to accelerated production quantities.

Question. Is the multi-year adequately funded in the fiscal year 1997 budget? If
not, why?

Answer. Yes, however, the total program has been reduced due to impacts of infla-
tion adjustments. Training devices were unfunded so that at least 232 AH-64Ds
could be procured by the Army during the multi-year period. This created an
unfinanced requirement of $53.0 million in fiscal year 1997 to provide for the short-
fall in the training device program to support Longbow Apache fielding. To procure
the entire 240 AH-64Ds, $75 million for eight additional aircraft would be required.
Fiscal year 1998 through fiscal year 2003 ftinding shortfalls are being addressed in-
ternally within the Army.

Question. Apache helicopters will be over 20 years old in the year 2000. Only a
limited number of Apache's will be upgraded to the Longbow Apache model. How
many Apache helicopters will be in the Army inventory in 2000?

Answer. All 758 AH-64A aircraft will be upgraded to the AH-64D without radar
configuration, 227 will also have the radar. Of the 758 Apaches the Army will have
at the end of 2000, 130 will be of Longbow configuration, 30 will be undergoing re-
manufacture into the Longbow configuration, and 598 will still be in the AH-64A
configuration. Remanufacture of AH-64A aircraft into the AH-64D configuration
will be complete in 2009.

Question. What is the operational life expectancy of the Apache?

Answer. The operational life of the AH-64A was 4500 hours based on original de-
sign estimates. However, recent tear down analysis of the Army's "Lead the Fleet"
AH-64A Apache, which flew 4500 hours, determined that the airframe is suitable
for continued flight and resulted in Apache being changed to an "on condition" air-
frame. Airframe evaluations, similar to those performed on the Army's previous gen-
eration helicopters, will be conducted by Corpus Christi Army Depot's airframe eval-
uation teams on an annual basis. This "on condition" program will assure the con-
tinued safe operation of the AH-64 series of aircraft. Airframes not suitable for con-
tinued flight will be returned to the depot for overhaul or disposal as required. Re-
manufacture into the AH-64D configuration does not zero the airframe flight hours,
however, a number of airframe upgrades are planned which will result in the AH-
64D Longbow Apache continuing service well into the 21st Century.

Question. What will be the average age of the Apache helicopter in 2000? Please
provide the average age by model type. ,

Answer. The AH-64A model aircraft will average 12 years with an estimated 1500
flight hours per airframe. The AH-64D model will average 1.4 years of age in 2000.

Question. The Longbow Apache modification is not a service life extension pro-
gram. What additional modifications would have to be made if you wanted to extend
the Ufe of the Apache?

Answer. The Army has not studied a service life extension program for the
Apache. A study would have to be completed before this question could be accurately
answered.

Question. If the Army wanted to begin a service life extension for Apache, when
should it begin? How much would it cost?

Answer. The Army has not studied a service life extension program for the
Apache. A study would have to be completed before this question could be accurately
answered.

Army Missile Programs

Question. The Army's missile procurement request for fiscal year 1997 is $766
million, $73 million or nine percent less than the amount appropriated in fiscal year
1996. Many of the missile programs do not appear to be fully funded.

The Army is requesting approval for a 3-year multiyear contract for Javelin start-
ing in fiscal year 1997. Is this multi-year program fully fianded in your budget sub-
mit? If not, what additional fiands, in what years, are required to properly fund a
multi-year at the budgeted quantities?

Answer. The multi-year was fully fiinded under the old production profile. How-
ever, the Office of the Secretary of Defense increased the fiscal year 1999 Javelin
program by $146 million in February of this year so it was too late for the Army
to obtain the needed fiscal year 1997 Economic Order Quantity (EOQ) funding
through the normal budgeting process. The Army originally planned to self-fund
EOQ from existing funds under the old production profile. The funding increase in
fiscal year 1999 provided for the procurement of 2582 additional missiles and addi-
tional 137 Command Launch Units and associated training devices. Due to these

increased quantities the Army needs $34 million EOQ in fiscal year 1997; otherwise
the Army will have to procure less quantities in the multi-year to self-fund the
EOQ. The plus-up benefits the Army since Javelin's fiscal year 1999 budget can be
reduced by $36 million. Other benefits to EOQ funding are: allows subcontractors
to procure materials in more economical quantities, accelerates production to a more
efficient rate, decreases support costs due to more efficient production timeframe,
and maximizes the benefits of multiyear contracting.

Question. The Committee has learned that the Army is considering adopting a
multi-year strategy for the Hellfire II and Army Tactical Missile System (ATACMS)
Block LA programs. What is the Army's current position on multi-year for these pro-
grams? What is the savings, in terms of dollars and percentages, compared to the
budgeted annual buy? Would additional fiscal year 1997 funding be required? How
much? For what?

Answer. The Army is very interested in initiating multi-year procurements for
Hellfire II and ATACMS Block lA. The Army recently received an additional $499
million across the fiscal year 1997-01 Program Objective Memorandum from the Of-
fice of the Secretary of Defense to continue Hellfire II procurement. To take the best
advantage of these funds, the Army would like to begin a four-year multi-year pro-
curement (MYP) in fiscal year 1998. An annual buy from fiscal year 1998 through
2001 will cost about $405 million and procure 5,769 Hellfire II missiles. A four-year
MYP during the same years will procure the same number of missiles and cost
about $357.9 million, a savings of $47.1 million or about 12 percent. This is done
with an additional $12.7 million in fiscal year 1997 to purchase economic order
quantity (EOQ) items.

A four-year MYP beginning in fiscal year 1998 is also cost effective for ATACMS
Block lA. Additional procurement funding of $69 million in fiscal year 1997 for EOQ
items would allow the Army to exercise the MYP without increasing planned out-
year funding levels. An annual buy from fiscal year 1998 through fiscal year 2002
wdll cost about $550 million and procure 633 ATACMS Block lA missiles. A four-
year MYP from fiscal year 1998 through 2001 will procure the same number of mis-
siles and cost about $487 million (including EOQ funding), a savings of $63 million
or over 11 percent. These additional EOQ requirements are on the Army's unfiinded
1-N hst.

Question. The Improved Target Acquisition System (ITAS) provides an upgraded
target acquisition, fire control, and man/machine interface for HMMWV mounted
TOW missiles. In the fiscal year 1997 column of last year's budget, the Army
planned to procure 21 systems in what was going to be program's first year for full
rate production. The Army has now deferred this procurement to fiscal year 1998.
What prompted the decision to defer the fiscal year 1997 systems?

Answer. Program Budget Decision (PBD) 104 deleted $32.1 million in fiscal year
1997 and added it back in fiscal year 1998, effectively combining fiscal year 1997
and fiscal year 1998 procurements in fiscal year 1998. The Office of the Secretary
of Defense based this decision on their perception that the execution of the fiscal
year 1995 Research, Development, Test and Evaluation program was below the nor-
mal pattern expected for a program of this nature, thereby increasing the potential
for the award of the 1996 Low Rate Initial Production (LRIP), (scheduled in late
fiscal year 1996) to slip into fiscal year 1997. In addition, they perceived the low
quantities funded in fiscal year 1996, fiscal year 1997 and fiscal year 1998 as being
inefficient.

Question. How does this decision impact the fiscal year 1996 LRIP buy of 19 sys-
tems?

Answer. In addition to hardware procurement, fiscal year 1997 budget included
funding to support the annualized cost of deliveries and Production Qualification
Testing (PQT). These costs of $4.8 million must now be funded with fiscal year 1996
funds and could reduce the quantity by up to six to eight units. ITAS is currently
on the Army's 1-N List for congressional plus up of 26.0 million in fiscal year 1997.
Question. Last year, the Committee provided an additional $43 million for accel-
eration of the (Extended Range-Multiple Launch Rocket System) procurement.
What are the Department of the Army's plans for using these fiinds?

Answer. The $43 million will be used to fund the ER-MLRS Low Rate Initial pro-
duction (LRIP). The ER-MLRS LRIP Decision Review is scheduled for May 21, 1996
to gain approval to proceed with low rate production.

Question. Does the Army's budget continue the acceleration with increased pro-
curement in fiscal year 1997?

Answer. No. The Army submitted the fiscal year fiscal year 1997 budget to the
Office of the Secretary of Defense (OSD) in June 1995. The fiscal year 1997 budget
submission was prior to Congress approving the fiscal year 1996 plus-up of $43 mil-
lion for ER-MLRS procurement. The fiscal year 1997 President's Budget provides

$24.4 million for procuring 852 rockets. To preclude a production dip in fiscal year
1997, the Army requests an additional $17 million. The request for the additional
$17 million in fiscal year 1997 for ER-MLRS procurement is No. 225 on the Army's
1-N Economic Investment Opportunities Priority List.

Question. The Stinger Block I upgrade provides a number of improvements includ-
ing increased infrared countermeasure (IRCM) and improved lethality. Mr. Sec-
retary, is the Stinger Block I upgrade being procured at an economic rate in fiscal
year 1997 and out?

Answer. No. The fiscal year 1997 and fiscal year 1998 production rate is at the
minimum economic rate of 650 missiles per year. Economic rate is 1300 missiles per
year. An additional $7.0 million fiscal year 1997 will allow the production rate to
double to 1300 missiles/year resulting in a $3 million savings for the additional 650
Block I upgrades and increasing total Stinger upgrades fielded to the soldier. Both
the Stinger Block I upgrade and platform mods are No. 7 on the Army's 1 to N list.
For $15.8 million, the Army could have platform mods for force package 1 and 2.
The Block I missle is compatible with all current and planned platforms, i.e.
Manpads, Avenger, BSFV-E, OH-58D, and AH-64/D; however, in order to utilize
the accuracy and performance improvements contained in the Block I missile, Read
Only Memory (ROM) modules in the gripstocks and circuit cards in the platforms
need to be replaced. The new module is a Electronic Erasable Programmable Read
Only Memory (EEPROM). Block I retrofit eliminates super-elevation, improves accu-
racy, enhances night capability, and extends service life of the Stinger
Reprogrammble Microprocessor (RMP) missile. Through replacement of the missile
battery in this retrofit program, the Army also extends the service life of the missile
another 10 years.

Question. What is the minimum economic rate?

Answer. The minimum economic rate is 650 missiles per year.

Crusader Program

Question. The Crusader is the Army's next generation field artillery system. The
Crusader system includes a self-propelled howitzer and an armored resupply vehi-
cle. The Crusader will have greater firepower range and will be lighter than the cur-
rent Paladin system. These capabilities will result in increased survivabiUty,
lethality, mobility, and operationEil capability.

Much of the Crusader's increased lethality was based on the development of a liq-
uid propellant gun. However, on March 19, the Army announced its decision to
change the armament system for the Crusader from liquid propellant to a soUd pro-
pellant.

The Crusader program is in the demonstration and validation phase of develop-
ment. Why did you decide to terminate the liquid propellant gun so late in the de-
velopment program?

Answer. We have learned a great deal about the characteristics of liquid propel-
lant (LP) and the regenerative liquid propellant gun (RLPG) since we made the deci-
sion in 1991 to develop them for Crusader. The technology did not mature as
planned. The armament maturation efforts during demonstration and validation re-
vealed that, in order to meet Key Operational Performance Parameters(KPPs), the
risks became unacceptable. The Army Science Board confirmed this in their find-
ings. During the October 1995 through March 1996 timeframe, the Army Science
Board evaluated the feasibility of the Crusader with an LP-based armament system.
The board concluded that although an LP-based Crusader is "doable", the develop-
ment program would entail significant cost, schedule and technical risks. Addition-
ally, the board determined that the RLPG/LP would require additional technology
base efforts to address the critical challenges of controlling pressure oscillations and
spiking, automatic ignition, and material compatibility. Finally, the propellant
change was also driven by diminished operational differences between the liquid
and solid propellant airmament systems. In particular, a solid propellant-based Cru-
sader will provide 90 to 98 percent of the operational effectiveness of an LP-based
Crusader.

Question. Material incompatibility, ballistic control and ignition control were the
key problems with the liquid propellant gun. Is the Army planning on conducting
more research in this area? Why or why not?

Answer. After reviewing the potential operational benefits and the status of liquid
propellant (LP) technology, we decided to continue work on LP in the technology
base. Over the next eighteen months, we plan to focus on the technology issues
(pressure oscillation and spiking, autoignition, material compatibility and modeling)
identified by the Army Science Board in its recent assessment of LP and the regen-

erative liquid propellant gun (RLPG). By the end of fiscal year 1999, we will deter-
mine if any practical applications for LP exist in the future.

Question. The Army Science Board stated that liquid propellant was "doable."
Since liquid propellant will offer a significant advantage over solid propellant, does
it make any sense to delay the fielding of Crusader until liquid propellant problems
can be resolved? Why?

Answer. Crusader is needed now! The year 2005 represents the earliest that Cru-
sader can be fielded. Crusader is absolutely essential to counter the risks to our
forces attributed to deficiencies in the current self-propelled howitzer fleet resulting
from the threat cannon systems proliferated worldwide. The Crusader Mission
Needs Statement (MNS), dated 1989, identifies the need for a more capable how-
itzer to overmatch threat cannon artillery systems in range, rate-of-fire, mobility,
effectiveness and efficiency. The need for a new howitzer was dramatically illus-
trated during Desert Storm when "the commander of the Army's VII Corps observed
that the M109 proved to be a liability because it was slower than the Bradley or
Abrams systems" (General Accounting Office, 1992 Desert Storm Performance As-
sessment). Our current self-propelled artillery is outgunned by robust and improving
threat cannon artillery systems today. Crusader is the only system that will be able
to meet all the deficiencies identified in the 1989 MNS. Its range, rate-of-fire, accu-
racy, mobility and multiple round simultaneous impact, when coupled with digital
linkage and global positioning provides the required revolutionary, "leap-ahead" ca-
pability in the field artillery. Crusader will provide the maneuver commander levels
of lethality and responsiveness never before available through fire support. Our
troops will be at risk until Crusader is fielded in 2005, 16 years after the need for
a new howitzer system was identified.

Question. What effect does the change to a soUd propellant have on the Crusader's
development cost and schedule?

Answer. The solid propellant Crusader program meets the existing Crusader Ac-
quisition Program Baseline without modification. This means that program costs
may increase by no more than 10 percent and schedule may slip no longer than six
months. Current, preliminary estimates indicate that the demonstration and valida-
tion phase of the program will require about $70 million in additional funds while
meeting the existing schedule. The engineering and manufacturing development and
production phases of the program should cost less with the soUd propellant Cru-
sader.

Question. Is the solid propellant Crusader program a high, medium or low risk
program?

Answer. The overall program risk is medium. Unlike the liquid propellant and re-
generative liquid propellant gun, solutions to the solid propellant armament risk
areas do not require technological breakthroughs. The solid propellant armament
risk areas include: tube wear life, laser window durability, and breech sealing — all
are engineering efforts. Risk mitigation plans retire the solid propellant armament
risk areas during the demonstration and validation phase of development.

Question. Will the Crusader with the solid propellant gun meet all of the Army
requirements? If not, which will it not be able to meet and how will they be met?

Answer. The solid propellant Crusader will meet all of the Key Operational Per-
formance Parameters (I^CPs) — range, rate-of-fire, resupply and mobility. The solid
propellant Crusader only partially meets the multiple round simultaneous impact
(MRSI) requirement. This shortfall can be offset by completing development and
fielding of the XM982 projectile. With the XM982, Crusader can meet all user re-
quirements. A comparison of the abihty of a liquid propellant (LP) or solid propel-
lant (SP) Crusader to meet critical requirements follows:

CRITICAL REQUIREMENTS

Parameters

Paladin PzH
(1)

2000

'12

60+2

KPP'S:

Other:

40 KM Max Range

10 Rds/min Rate Of Fire ...
12 Minute Howitzer Rearm

67 KPH Highway Speed

39 KPH X-Counti7 Speed ...

60 Round Capacity

3 Man Crew

CRITICAL REQUIREMENTS-

-Contir

lued

Paladin
(1)

PzH
2000

Crusader

SP LP

4 to 8 Rds MRSI (8-36 Km)

No
22

60-62

2 8_25 2 6-44

20 Second Response Time

15 15

55 Ton Combat Loaded Weight ....

55-60 65-72

'30 minutes, based on military judgement

^Kilometers

Note: Kilometers/hour (KPH), Kilometer (KM), Improved Paladin (Paladin (I)), Rounds/minute (rds/min). Panzer Howitzer 2000 (PzH 2000)

Question. What would be the cost of upgrading the Paladin with a more powerful
engine and a new solid propellant gun?

Answer. The Paladin falls short of achieving Crusader's mobility requirement
(that is, the Paladin cannot keep pace with the supported maneuver force). Postu-
lated Paladin product improvements exacerbate the situation by increasing system
weight. Incremental mobility upgrades are possible, but these upgrades do little
more than offset performance losses resulting from increased system weight. Even
so, these incremental upgrades would require significant effort — a typical incre-
mental mobility modification might require the following powerpack, track and sus-
pension improvements.

• Redesign engine exhaust.

• Modify engine cooling system; add aftercooler.

• Increase injector output.

• Add engine oil cooler.

• Install new (18 inch) track.

• Develop/install new drive sprockets, idler/roadwheel spindles and hubs to ac-
commodate new track.

• Modify final drives and roadarms to accommodate new track.

• Add hydropneumatic suspension units.

• Modify the hull structure to accommodate track, suspension and cooUng
changes.

• Add track skirts (potential safety issue).

Upgrading the Paladin with a new engine requires a much more significant up-
grade than outlined above. First, there is no suitable engine readily available for
integration into the Paladin chassis. The Army's Tank and Automotive Command
has identified two engine alternatives, a turbine and a diesel, but both require con-
siderable development (3-4 years) at a considerable development cost ($300-400
million). The Paladin chassis, hull structure and related automotive components are
not sized for an engine with the requisite horsepower and would all require virtually
total redesign. The net effect of this approach is development of a new Paladin chas-
sis sized to meet Crusader mobility requirements. The life cycle cost of this ap-
proach approximates that of the Crusader itself (approximately $10.4 billion versus
$11.8 bilUon for the Crusader's self-propelled howitzer) without providing the sys-
tem benefits of the Crusader.

In short, the Paladin chassis cannot realistically be upgraded in an incremental
fashion to approach Crusader mobility requirements. The Paladin can be upgraded
with a new chassis to meet Crusader mobility requirements, but the cost approaches
that of the Crusader itself.

In similar fashion, the Paladin armament can be upgraded with a new solid pro-
pellant gun — this alternative was evaluated as the improved Paladin option in the
Crusader Milestone I Cost and Operational Effectiveness Analysis (COEA) with un-
acceptable results. Achieving the needed lethahty requires much more than a new
gun. Delivering the requisite volume of timely, accurate fire involves a total system
solution that includes fiilly automated ammunition handling (projectile, propellant
and ignition), automated gun drives and automated fire control. In addition, the sys-
tem must have sufficient storage capacity and resupply capability packaged in a
chassis capable of surviving and moving on the battlefield. Making these upgrades
to the Paladin would require a total redesign and rebuild of the Paladin turret,
chassis and crew compartment. The net effect of these chassis and turret upgrades
would be a new design analogous to Crusader.

Question. Will the Crusader gun be recompeted because the liquid propellant seg-
ment of the program has been terminated? If so, what is the impact on the program
cost and schedule?

Answer. The prime contractor has been given maximum flexibility to determine
the most cost effective approach for acquiring all components and subsystems. The
prime contractor (United Defense Limited Partnership) is investigating competition

for the armament subsystem and components. He issued a "sources sought" an-
nouncement in the Commerce Business Daily with the intent of determining poten-
tial competitors for the armament subsystem and components. The solid propellant
Crusader program will meet the existing Crusader Acquisition Program Baseline for
both cost and schedule.

Armored Gun System (AGS)

Question. The Armored Gun System (AGS) is a lightweight armored vehicle for
early entry forces. Because of its light weight, an AGS can be transported on a C-
130 and air dropped. In January, the Army issued a partial stop-work order to the
contractor and is planning on terminating the program this year. The fiscal year
1997 budget request does not include funds to continue the AGS program. Mr. Deck-
er, in your statement last year, you described the AGS as "a very high priority be-
cause it will provide a rapidly transportable, air droppable, and protected, large cal-
iber, direct fire system for the light forces. It is very important that we keep this
program on track." Why has your position changed from last year?

Answer. The Army has been dealing with an affordability problem which seeks
to balance near- term readiness, quality of life and future readiness while our overall
Research, Development and Acquisition (RDA) accounts have been shrinking. The
Army places first priority in maintaining trained and ready soldiers. As buying
power continues to decline. Army resources from outside of modernization are not
available to recapitalize. One of the internal solutions for recapitalization into a
widely recognized, anemic modernization program, while not disrupting the critical
balance between near-term readiness and quality of life, was to terminate a major
program, in this case AGS, and reinvest into more critical modernization needs. It
is important to understand that we only took the action we did because we have
alternative means of accomplishing the same mission for which AGS was designed.

Question. It is our understanding that the decision to terminate AGS is budget
driven. Savings incurred by canceling the AGS will be used to fund other high pri-
ority Army programs. To date, how much has been spent on the AGS program?

Answer. To date, including fiscal year 1996 funds obligated so far this year, ap-
proximately $281 million has been spent on the AGS program.

Question. Fiscal year 1997 would have been the first year of production funds.
What were you planning on doing in 1997 before the program was terminated?

Answer. The first year of production funds would have been fiscal year 1996, not
fiscal year 1997. The ftinds in fiscal year 1996 would have funded the procurement
of Low Rate Initial Production (LRIP) (26 vehicles) for the program. Additionally,
the LRIP contract, awarded with fiscad year 1996 funds, would have had an option
for procurement of an additional 42 vehicles using 1997 funds for the first year of
full rate production.

Question. How much is the Army saving by canceling the AGS?

Answer. The Army will be able to reinvest approximately $1.5 billion.

Question. What other high priority programs will be fiinded with the "savings"
from the AGS program?

Answer. Primary areas in which AGS resources are being reinvested are:

• Force XXI

• Soldier enhancements (AN/PVS-7 optical systems, thermal weapon sight, Land
Warrior, and small arms)

• Mobility (Family of Medium Tactical Vehicles, HMMWV Roll On Roll Off facil-
ity)

• Acceleration of key systems (Bradley Stinger Fighting Vehicle, Longbow
Hellfire, M113A3, Stinger Block 1)

Question. The AGS was to satisfy the Army's requirement for direct fire support
to early entry forces. How will the Army ensure that its quick reaction forces will
not lose their capability to jump into battle with armored firepower to support
them?

Answer. The near term solution is for the Army to have selected armored forces
(Abrams tanks and Bradley Fighting Vehicles) on alert prepared for immediate de-
ployment by C-17 in order to provide the armored firepower to support quick reac-
tion forces. The Army is also accelerating an anti-armor program (Javelin) to ad-
dress this shortfall.

Question. Based on the fiscal year 1997 budget request, when will the AGS "alter-
natives" be fielded? What is the cost for each of these programs? Are they ade-
quately funded in the budget? If not, what are the shortfalls?

Answer. The alternatives that the Army is considering consist of a combination
of currently fielded systems (Abrams tanks and Bradley Fighting Vehicles) and ac-
celeration of the Javelin program. The Abrams tank and Bradley Fighting Vehicle

System are cvirrently fielded and upgrades of these systems are adequately funded.
The Javelin's First Unit Equipped (FUE) date is June 1996 (75th Infantry Ranger
Regiment). The total procurement cost for the Javelin program is approximately
$2.65 billion and it is funded in the budget. Low Rate Initial Production (LRIP III)
contract award for Javelin occurred in Feb 96. Full Rate Production is scheduled
to occur in fiscal year 1997.

Question. What AGS capabilities can not be satisfied with your proposed alter-
natives?

Answer. All AGS capabilities can be met by currently fielded forces (Abrams tanks
and Bradley Fighting Vehicles), soon-to-be-fielded Javelin; and potentially E^-FOG-
M, to mitigate risk. Additionally, the recent decision to procure 120 C-17 aircraft
increases the capability to put armored forces into an airhead more rapidly.

Question. The AGS was designed to replace the Sheridan. When are you planning
on retiring the Sheridan from the active force?

Answer. The Army has not officially designated a retirement date for the Sheri-
dan. However, funds to operate and support the Sheridan will end in September
1996.

Army Ammunition Programs

Question. Last year, the Congress provided $1.1 billion for the procurement of am-
munition. This represented an increase of $315 milUon to the fiscal year 1996 Presi-
dent's budget in order to adequately modernize the ammunition inventory and pre-
serve the industrial base. The Army's fiscal year 1997 budget request for the pro-
curement of ammunition is $853 milUon.

Does the fiscal year 1997 President's budget adequately fund the Army's require-
ment for ammunition and sustain the capabilities of the industrial base? If not,
what are the shortfalls?

Answer. The fiscal year 1997 President's budget represents the best balance of
ammunition procurement, consistent with Army priorities and funding constraints.
It provides adequate funding for a one hundred percent training program with con-
tinued use of war reserve stockpile munitions in training, a modest modernization
program, a limited industrial base program, and an adequate demilitarization pro-
gram. The Army has identified several high priority items on which it could spend
additional funding if provided in fiscal year 1997. These items include the following:

War Reserve Modernization items provide overmatch capabilities to Army fighting
systems. Requested funds procure additional items against valid war reserve re-
quirements.

In millions of dollars

Cartridge (Ctg), 25 millimeters (mm) M919 $40.0

Ctg Mortar, 60mm, Illumination M721 7.0

Volcano, M87 35.0

155mm, Ext Range HE, M795 55.0

120mm Tank, M829A2 12.0

120mm Tank, M830A1 45.0

Selective Light Weight Munition (SLAM) 3.0

War Reserve Drawdown The Army draws down stocks of war reserve ammunition
to support training. These funds replace stocks to required levels.

In millions of dollars

Ctg 9mm, Ball $1.4

Ctg 30mm, HEDP, M789 15.0

Ctg Mortar, 60mm HE, M720 12.5

Training Distribution Pipeline items are training unique (items not usable in com-
bat) which are stocked to ensure uninterrupted flow of training by filling the dis-
tribution system (pipeline). Funding for the actual consumption of training unique
items is fully supported in the President's Budget.

In millions of dollars

Ctg 5.56mm Blank M200, F/SAW $1.3

Ctg 7.62mm Ball, M80, M13 2.1

Ctg 20mm TP, M220 3

Ctg 25mm TP-T, M793 10.0

Ctg Tank 120mm TP-T, M831A1 2.4

Ctg Tank 120mm TPCSDS-T, M865 3.2

Ammunition Industrial Base:

Production Base 25.0

ARMS Initiative 58.0

Flexible Manufacturing 7.0

In millions of dollars

Research and Development (Mantech) 4.0

Procurement Army Ammunition 3.0

Total funding shortfall 340.2

Question. The Army's annual consumption of training ammunition is approxi-
mately $900 million a year. The fiscal year 1997 budget requests $853 million for
both war reserve and training ammunition. As a result, the Army must use war re-
serve ammunition to support training requirements. Does this concern you?

Answer. This does not concern me so long as we: maintain the capability to re-
place the war reserve assets consumed; and, can do so with minimum risk to our
combat needs. Future budget plans are structured to reduce this training support
from war reserve ammunition.

Question. The Army is responsible for the storage and maintenance of all conven-
tional ammunition. In the past, the Army has budgeted $300 million for this activ-
ity. The Army is requesting $185 million in fiscal year 1997 for the care and mainte-
nance of ammunition.

Does the fiscal year 1997 adequately fund the activities required to maintain and
care for ammunition?

Answer. No. The full Stockpile Management requirement, verified by the Army's
April 1996 Ammunition Functional Area Assessment for fiscal year 1996 (FAA
FY96) is $314.5 million for fiscal year 1997 in current year dollars. The $185 million
level does not adequately fund the activities required to maintain and care for am-
munition. The Army is reviewing solutions to this funding shortfall within it's inter-
nal funding prerogatives.

Question. If not what are the shortfalls?

Answer. Shortfalls are in virtually every category of stockpile management. They
are as follows:

1. Receipts, Issues, and Second Destination Transportation is funded at 28 per-
cent.

2. Re warehousing (critical to Base Realignment And Closure and Depot Tiering)
is totally unfunded.

3. Inventory is funded at 30 percent of the requirement.

4. Surveillance and safety inspections is funded at 45 percent of the requirement.

5. Other Supply Depot Operations is funded at 47 percent of the requirement.

6. Maintenance is funded at 15 percent of the requirement.

7. Headquarters, Plant Government Staff and Ammo Defense Center Personnel
requirement (Pay of People) is fianded at 90 percent of the requirement.

The total shortfall, in fiscal year 1997 current year dollars is $136.3 million.

Question. What do you believe is the correct level of funding required to maintain
stored ammunition?

Answer. The current required funding level for fiscal year 1997 is $314.5 million.
The Army is reviewing solutions to this funding shortfall within it's interned funding
prerogatives.

Question. The Congress provided $45 million for the Armament Retooling and
Manufacturing Support (ARMS) program. The fiscal year 1997, budget proposes that
those funds be rescinded.

Please describe the ARMS program. What are the objectives?

Answer. The ARMS program reuses idle ammunition industrial capacity at the 16
active and inactive facilities through commercialization. Its key objective is to re-
duce operating costs at the 6 active facilities and maintenance costs at the 10 inac-
tive facilities. This ensures preservation of the Army's industrial readiness by reten-
tion of critical munitions skills through job creation; lower operating overhead cost
and minimizing facility maintenance costs thus decreasing unit costs;

Question. If Congress does not approve the rescission, how would you execute the
fiscal year 1996 funds?

Answer. Depending on the results of ongoing reviews of the ARMS program, the
Army would expand the program to the remaining five facilities and continue its
implementation at several key facilities providing the best return on investment.

Question. In fiscal year 1993, Congress provided $200 million for Armament Re-
tooling Manufacturing Support. What were the funds used for? Did the funds reduce
the operating costs of ammunition facilities? If so, by how much?

Answer. These funds (reduced to $100 million in fiscal year 1995) were used to
first develop strategic reuse plans at all 16 facilities and marketing plans at the 11
participating facilities. The majority of the funds were used to modify facilities
which attracted commercial tenants. The Army has already saved $7 million in
maintenance costs at participating facilities. At Radford Army Ammunition Plant
operating costs will be reduced by six and one half percent through overhead alloca-
tion.

Tactical Vehicles

Question. In fiscal year 1996, Congress appropriated $431 million for Army tac-
tical vehicles, a $300 million increase over the President's budget request. Congress
provided the additional funds to alleviate critical shortfalls in the Army's tactical
vehicle fleet. This year the Army is requesting $516 million.

Last year, the Army submitted its Tactical Vehicle Investment Strategy which de-
termined that annual funding levels of $600 to $800 million were required to replace
old trucks and maintain those that are currently in the fleet. Not only were Army
requirements a major concern, but Congress realized that maintaining the unique
capabilities in the industrial base were also critical. Does the fiscal year 1997 budg-
et satisfy Army tactical vehicle requirements? If not, what are the shortfalls? Does
the budget request sustain the industrial base? If not, what is the impact? If addi-
tional funds were made available, could you use them for your tactical vehicle pro-
grams? If so, how would you allocate the extra funds?

Answer. The fiscal year 1997 budget does not satisfy the Army's total tactical ve-
hicle requirements. We need additional funding for such programs as High Mobility
Multipurpose Wheeled Vehicles (HMMWV), Heavy Equipment Transporter System
(HETS), Heavy Expanded Mobility Tactical Trucks (HEMTT), PaUetized Load Sys-
tem (PLS), and Extended Service Programs (ESP). With respect to the industrial
base, the Army reUes primarily on the private sector, commercial industrial base for
tactical wheeled vehicle production. The major components of Army wheeled vehi-
cles are commercial-off-the-shelf or non-developmental items. The fiscal year 1997
budget does help sustain this commercial industrial base, however, the main source
of sustainment is the private sector. If additional funds were made available, the
Army would use the funds to procure HMMWVs ($41 miUion), HETs ($40 miUion),
HEMTTs ($33 million), PLS trucks ($50 miUion), and RDTE for ESP for HMMWV
($1 miUion), ESP for medium trucks ($6 million) and ESP for HEMTT (3 mUUon).

Question. In fiscal year 1996, the Congress appropriated an additional $300 mil-
lion for the Army's tactical vehicle program. Have those fiinds been released to the
Army for execution? If not, have you requested the funds? What is the impact if the
funds are not released?

Answer. The procurement dollars have all been released. All the plus up Re-
search, Development, Test and Evaluation (RDT&E) dollars are still on OSD with-
hold. The Army requested that the RDT&E funds be released on 23 January 1996.
In addition, on 26 March 1996 the Army asked that the 5-Ton truck remanufacture
plus up funds ($1.5 million) be released immediately to support Source Selection
Evaluation Board costs.

If the 5 -Ton truck funds are not released the Army will not be able to participate
with the United States Marine Corps (USMC) in a joint program.

The High Mobility Multipurpose Wheeled Vehicles Extended Service Program dol-
lars are needed to harmonize Army requirements with those of the USMC and to
prepare the necessary reports required the Defense Committees. If the funds are not
received the program will slip a year.

If the heavy truck funds are not received, the Army will not pursue many of the
promising and innovative uses of the water trailer heater/chiller system; the study
of alternate uses of Palletized Load System (PLS) flatrack; the PLS Universal Power
Interface Kit which expands the systems capabUities; the Heavy Expanded Mobile
Tactical Truck (HEMTT)— Load Handling System (LHS) which makes the HEMTT
a lighter PLS and a Forward Repair System which explores the feasibility of a put-
ting maintenance shop on a heavy tactical vehicle.

Question. The Army determined that given the current budget environment, the
costs of replacing all of the older trucks in its inventory was prohibitive. Therefore,
the Army decided that a mix of new trucks and a Service Life Extension Program
(SLEP) for its older trucks made sense from both a requirements and budget stand-
point. The National Guard, Reserves and Marine Corps have already begun SLEP's
for their older vehicles. The Army has not requested funds for a SLEP. What fund-
ing is required for an Army medium truck service live extension program? Does the
Army have a funded service life extension program for its medium trucks? Why not?
What is the Army's plan for a SLEP program? What are the current operation and
support costs for the medium truck program? What are the projected operation and
support costs for a medium truck SLEP fleet?

Answer. The Army classifies both 2.5 Ton and 5-Ton vehicles as medium trucks.
We have an ongoing SLEP program for two and one half ton trucks. Continued sup-
port from Congress for the Reserve's and National Guard's National Guard and Re-
serve Equipment (NGRE) requests will fund this effort. For the 5-Ton program the
Army needs $6 million in Research, Development, Test and Evaluation (RDTE) to
continue its participation in the joint program with the Marine Corps. The Future

Years Defense Program (FYDP) submitted with the President's Budget contains
funding for a High Mobility Multipurpose Wheeled Vehicles (HMMWV), a 2.5 Ton
truck and a 5-Ton truck SLEP program beginning in fiscal year 1999 and a line
haul truck SLEP program starting in fiscal year 2000. In response to House Appro-
priations National Security Subcommittee Report 104-208 dated 27 July 1995, the
Army will submit a comprehensive report on all Services' SLEP requirements to the
Defense Committees prior to the conclusion of the budget process. Currently some
representative per annum operation and support (O&S), costs for our medium fleet
are as follows: M35A2 (2.5 Ton) $8.1 thousand, Light Medium Tactical Vehicle (2.5
Ton) $1.7 thousand, M809 (5-Ton) $10.8 thousand, M939 (5-Ton) $6 thousand and
Medium Tactical Vehicle (5-Ton) $2.5 thousand. Please note that these are O&S
costs and include military labor as opposed to Operation and Maintenance costs
which do not. For the 2.5 Ton SLEP truck the estimated O&S costs are $2.1 thou-
sand and for the Army version of the 5-Ton SLEP truck the estimated costs are $2.9
thousand.

Question. It is our understanding that some of the fiscal year 1996 funds appro-
priated for tactical vehicle production were diverted for Bosnia causing a two month
break in High Mobility Multipurpose Wheeled Vehicle (HMMWV) production. Are
you planning on reprogramming funds to continue production?

Answer. Approximately $39 million was diverted from the HMMWV and other
truck lines to meet urgent needs for United States Forces deployed to Bosnia. It is
the program manager's position that the diversion wiU not cause a break in produc-
tion. The dollars diverted for Bosnia exceed the Army's below threshold reprogram-
ming capabiUties.

Question. Medium Tactical Vehicles are 2.5 and 5-ton trucks used for transporting
cargo, dumping, towing and other support activities. The Army is currently pro-
curing the Family of Medium Tactical Vehicles (FMTV) to replace trucks that have
been in the fleet for 20 years. Although replacing the medium trucks is one of the
Army's priority programs, based on the current procurement schedule, it will take
the Army 30 years to complete the fielding of the FMTV. Are you satisfied with a
30 year truck program? Why?

Answer. No, we would Hke to procure medium trucks at a faster rate to modernize
the medium fleet. This would enable the Army to reduce the Operation & Support
(O&S) cost burden of the medium truck fleet.

Question. Is the procurement program based on fielding requirements or budget
constraints?

Answer. The Army would hke to modernize the medium truck fleet at a faster
rate but affordability constraints have prevented the Army from doing so. The cur-
rent FMTV program is based upon current budget constraints.

Question. Last year, the Family of Medium Tactical Vehicles (FMTV) program
was riddled with technical and budget problems. It is our understanding that con-
tractor is currently retrofitting manufactured trucks to correct problems that sur-
faced during testing. What additional testing needs to be done on the FMTV?

Answer: No additional contractual testing is required. The Army plans to com-
plete a comparison test on quarterly basis to verify and assure continued production
quality. That is a normal Army policy.

Question. Have all of the technical problems been resolved?

Answer. Yes.

Question. What is the cost of the retrofit program?

Answer. The final cost of the retrofit program has not been determined.

Question. Who is responsible for the retrofit cost?

Answer. The contractor is solely responsible.

Question. The original Family of Medium Tactical Vehicles (FMTV) program was
a five year multiyear procurement program. The original contract required that the
contractor deUver 10,000 trucks by the end of fiscal year 1996. Due to funding and
technical problems, the contract is currently being renegotiated and stretched out
by three years. How many trucks have been manufactured?

Answer. Steward & Stevenson has built 3,085 trucks so far under the current con-
tract.

Question. How many trucks has the Army accepted?

Answer. As of 15 April, the Army has conditionally accepted more than 2,500
trucks and more than 500 trucks have been physically shipped from the plant.

Question. How many trucks have been funded to date?

Answer. 7,319 trucks are currently on contract.

Question. Will the new contract require 10,000 trucks? If not, why and how many
will be manufactured?

68-323 02-4

Answer. The Army plans for a rebuy contract beginning in late fiscal year 1998
or early fiscal year 1999. Chir goal is to ftind at least 15,000 trucks for the rebuy
contract subject to availabihty of funds.

Question. It is oxir understanding that the contractor has suggested that as a re-
sult of the program stretch out, the unit cost per truck will increase by 35 percent.
Are additional costs incurred as a result of the three year stretch out?

Answer. Yes, we are stretching the final contract year over a three year period.

Question. What are the additional costs and who is responsible?

Answer. We are currently negotiating with Stewart & Stevenson to define the cost
of the stretch out. The final result is unknown at this time. Costs which will be jus-
tifiable include facihties cost, inflation, and unit component costs.

Question. If the unit cost of the truck increases, can the Army still afford to pro-
cure 10,000 trucks. If not how many will the Army procure?

Answer. The Army will procure the contractually required 10,843 vehicles under
the contract.

Question. If the contractor is unwilling to negotiate a "fair deal" could you termi-
nate the contract and recompete the production contract in fiscal year 1996? If not,
why not?

Answer. No. We could not recompete at this time because we will not have a com-
plete Technical Data Package (TDP) until mid 1997. Our plan is to complete the
ongoing negotiations for a fair and reasonable price for the stretch out by June
1996. If we are unsuccessfiil in negotiating a "fair deal" we review our options at
that time.

Question. What would be the termination costs?

Answer. The ceihng cost to terminate the contract is $31.8 million. There would
also be a potential for additional contractor claims for work performed.

Question. What would be the impact on the fielding schedule?

Answer. We would have a two to three year gap in fielding as a minimum.

Question. When the current contract is completed, the Army must compete the
next production contract. How will you insure that you implement the lessons
learned from the Family of Medium Tactical Vehicles (FMTV) experience?

Answer. For the FMTV rebuy, we will compete a proven design with a Technical
Data Package (TDP).

Question. Will past performance be a factor in the competition?

Answer. Yes.

MILSTAR Program

Question. MILSTAR is a communications system which provides the warfighter
with survivable, jam-resistant, world wide communications in all levels of conflict.
The MILSTAR system consists of a satellite constellation, a mission control seg-
ment, and receive terminal segment. The Air Force has the responsibility for fund-
ing and managing the space and mission control segments. Each service is respon-
sible for procuring the required receive terminal segments. The Air Force has not
requested fiinds in the fiscal year 1997 budget for the mission control segment of
MILSTAR. Does this concern you? If so, why?

Answer. Yes, this issue does concern the Army. The funds in question would sup-
port the Automated Communications Management System (ACMS) element of
MILSTAR's mission control segment. The Army understands the funds were in the
Air Force budget, and were cut as part of an Office of the Secretary of Defense budg-
et decision (Program Budget Decision 604). We also understand the Air Force is cur-
rently working with the Congress on an amended fiscal year 1997 budget request
trying to reinstate these funds for fiscal year 1997. Without fiscal year 1997 funds,
the ACMS will be delayed from fiscal year 1999 to fiscal year 2001. The Air Force
is on schedule with satellite launches that will provide the medium data rate (MDR)
capabihty for primary support of the Army. The Army has awai-ded a contract for
the SMAJRT-T (Secure, Mobile, Anti-Jam, ReUable, Tactical Terminal) ground termi-
nals for our warfighting forces that will use the MDR satellites. The ACMS will sup-
port the planning and efficient management of the MDR payload resources. We wQl
be able to employ the satelUte and terminal capabilities without ACMS, but the
users will be unable to fiiUy utilize the flexitjility and responsiveness of the
MILSTAR system. Army users will be unable to directly task the satellite constella-
tion, repoint payload antennas, or change network configurations. We prefer that
our forces be provided with all elements of the MILSTAR system — to include the
critical ACMS control element — on a concurrent schedule. With the ACMS delay,
the ability of Army warfighters to operate the system efficiently and with great ease
will be significantly hampered. We will work with the Air Force to ensure this capa-
bility gets a higher flinding priority due to its impact on Army operations.

Landmines

Question. The Congress has been concerned over the development and fielding of
countermine systems. To date, most of the funding has been in basic development
and very few of the development programs have transitioned into production pro-
grams. What countermine systems are the Army currently developing? Based on the
fiscal year 1997 budget request when will those technologies be fielded?

Answer. The Army's Countermine program is an ongoing program designed to
meet the user requirements to maintain combat maneuver unit's mobility by detect-
ing minefields and then provide a means to breach and mark the minefields. The
most pressing need is for airborne, vehicle and handheld standoff detection of mine-
fields. As reflected in the fiscal year 1997 President's Budget, current development
programs are as follows: Airborne Standoff Minefield Detection system (ASTAMIDS)
(an airborne detection system) will reach the field in 2001. Ground Standoff Mine-
field Detection System (GSTAMIDS) (a vehicle mounted detection system) will be
available in 2005, while the Handheld Standoff Minefield Detection System
(HSTAMIDS) (an advanced hand held detector) will be available in 2001. The explo-
sive breaching system (ESMB) arrives in 2002.

Question. Currently, the Army is conducting a joint Countermine Advanced Con-
cept Technology Demonstration (ACTD) with the Navy and Marine Corps. Briefly
describe the ACTD. How will you field technologies that are successfully dem-
onstrated in the ACTD?

Answer. The Joint Countermine ACTD employs a system of systems approach to
demonstrate a seamless sea to land warfare countermine operational capability. Two
demonstrations (Demo I and Demo II) will be conducted by the user, USACOM, dur-
ing the ACTD to demonstrate clandestine reconnaissance for minefields, breaching
and clearing of minefields, with emphasis on in-stride detection and neutralization
of mines and obstacles. These demonstrations will leverage several ATDs and devel-
opment programs to provide demonstration hardware, thereby providing an early
user operational evaluation of these items. Additionally, the demonstration hard-
ware will remain with the user for a period of two years at the conclusion of Demo
II for further operational assessment and feedback to the development programs.
Other key components of the ACTD include development of a joint countermine
operational simulation that will be used for operational planning and testing plus
C4I integration between the services for seamless transfer of tactical countermine
information. The ACTD will provide early operational evaluation that can effect the
final procurement configuration or influence future system P3I.

Question. What are the current deficiencies in the current countermine programs?
Does the fiscal year 1997 budget provide funding to address these deficiencies?

Answer. The mine detection problem is extremely difficult, particularly with re-
gard to achieving sufficiently high probabilities of detection and manageable false
alarm rates for mines with little or no metal content. Additionally, it is highly desir-
able to be able to detect mines from a standoff position without placing soldier's
lives in jeopardy. The Airborne Standoff Minefield Detection System (ASTAMIDS)
is being developed to provide the maneuver commander with the capability to locate
threat minefields before they are upon them. This gives him the option to breach
or bypass the minefield while he stUl has the time to muster his breaching assets.
The Ground Standoff Mine Detection System (GSTAMIDS) is being developed to
pennit detection of mines on roads from a remote controlled platform. This system
will be capable of much higher rates of advance and sweep widths than dismounted
troops using handheld detectors. For those mine detection operations where a vehi-
cle platform is not suitable, the Handheld Standoff Mine Detection system
(HSTAMIDS) is being developed to provide soldiers with the capability to locate
mines with a suite of sensors. Under the right conditions this will include detection
of the mines from a standoff of up to three meters. Through the use of multiple sen-
sors, detection of mines with little or no metallic content will be achieved.

Along with standoff detection, standoff neutralization of a growing number of
more sophisticated threat mines is required. The Explosive Standoff Minefield
Breaching System (ESMB) is intended to provide a capabiHty to counter blast hard-
ened mines by attacking the main explosive charge in the mine. While the Army's
fiscal year 1997 budget addresses these deficiencies, additional fiscal year 1997 in-
vestment opportunities would be applied as follows:

(1) Ground Standoff Minefield Detection System (GSTAMIDS): A vehicular
mounted metallic/non-metallic mine detection system. One of the ATD candidate
systems just completed hmited demonstrations at Fort A.P. liill and Socorro, NM,
with promising results. $5 million would allow the Army to accelerate the start of
development from fiscal year 1998 to fiscal year 1997.

(2) Handheld Standoff Minefield Detection System (HSTAMIDS): A handheld me-
tallic/non-metaUic mine detector to replace the AN PSS 12 (metallic mine detector).
$13 million would provide risk reduction through a competitive acquisition strategy
in the DEIVITVAL phase of the program.

(3) Armor Battalion Countermine Set (BCS) System: $1.5 million would support
development of 10 specific system improvements identified by the Armor School.

(4) Assault Breach Minefield System (ABMS): A combat vehicle mounted mine-
field breach marking system to satisfy the requirement not met by Clear Lane Mar-
keting System (CLAMS). $1 million would support final integration and evaluation
of an NDI marking system, on an Ml Tank, leading to type classification.

(5) Off'-Route Smart Mine Clearance (ORSMC): A low observable, tele-operated ve-
hicle to neutralize smart side & top attack and anti-helo mines linked to a C2 sys-
tem to report cleared avenues of approach. $4.5 million is required to initiate this
program.

The development programs described above are key to a warfighting countermine
capability however, the deployment of NATO forces to Bosnia has demonstrated that
during peacekeeping missions convoys have a critical need to be able to avoid land-
mines while performing their mission (i.e., traveling at speed). The Army S&T pro-
gram is currently investigating standoff vehicular mounted mine detector sensor
suites that would, when integrated onto the lead vehicle of a convoy, provide in-
stride detection of landmines. Five million dollars of additional funding would per-
mit the assessment of additional GPR techniques (Program Element (PE) 06027 12A/
AH24) and permit the acceleration of the Mine Hunter-Killer program which other-
wise would not start until fiscal year 1998. The Mine Hunter-Killer program (PE
0603606A/D608) will provide the in-stride mine detection and neutralization so
clearly needed by our convoys.

Question. How are you ensuring that countermine programs which are currently
funded in research and development will be fielded?

Answer. FXilly funded programs (Research, Development, Test and Evaluation
(RDTE) and Procurement) are planned, programmed and budgeted around prom-
ising technologies that address user needs. Research and Development (R&D) pro-
grams that satisfy warfighting capabilities will be funded within Army affordability
constraints. The following is a Ust of countermine development programs reflected
in the fiscal year 1997 President's Budget and planned for in the fiscal year 1998-
2003 POM (including development and production): Airborne Standoff Minefield De-
tection system (ASTAMIDS) (an airborne detection system) will reach the field in
2001. Ground Standoff Minefield Detection System (GSTAMIDS) (a vehicle mounted
detection system) will be available in 2005, while the Handheld Standoff Minefield
Detection System (HSTAMIDS) (an advanced hand held detector) will be available
in 2001. The explosive breaching system (ESMB) arrives in 2002.

These programs reflect either past successful transitions from Army S&T pro-
grams to developmental efforts or reflect future planned transitions. The
ASTAMIDS was successfully transitioned in fiscal year 1993. The HSTAMIDS
transitioned this year, following the successful completion of the Close In Man-port-
able Mine Detector (CIMMD) in fiscal year 1995. The GSTAMIDS will follow the
future transition of the on-going Vehicle Mounted Mine Detector ATD, scheduled for
completion in fiscal year 1998.

Battlefield Digitization

Question. The Army is creating the "digital battlefield" that will give it the ability
to maintain a modern, but smaller force capable of decisive victory. The Army is de-
veloping digital information systems that will allow the Army to gather, transfer
and analyze data in order to have improved situational awareness.

The Army is requesting $110 million in fiscal year 1997 for digitization. What wUl
the fiscal year 1997 funds provide?

Answer. Fiscal year 1997 fiinds provide for development of the Force XXI Battle
Command, Brigade and Below (FBCB2) software version 2.X and applique hardware
upgrades for the Force Development Test and Evaluation which is planned for fiscal
year 1998. These upgrades will be a result of the Task Force XXI (TF XXI) Ad-
vanced Warfighting Experiment (AWE) during fiscal year 1997. Additionally the
funds provide for simulation, training, maintenance, analysis and execution of the
Division XXI AWE. The 1st Cavalry Division M1A2 digital integration is also in-
cluded.

Question. The General Accounting Office criticized the Army's digitization effort
because they felt there were no specific, measurable goals. What is the criteria that
will be used to measure the "success" of the digitization experiments?

Answer. To assess the digitization portion of these experiments, the Army has de-
veloped a number of criteria which are outhned in the FBCB2 Experimentation
Master Plan. The issues and criteria, called Operational Performance Objectives,
contained in the Experimentation Master Plan, drive the measures of effectiveness
and measures of performance that will be evaluated during TF XXI field experi-
ments, and modeling and simulation efforts. These evaluations will support the
Milestone I/II decision for the Applique and FBCB2 software projected for late fiscal
year 1997. Efforts are underway to determine appropriate performance thresholds
for Applique and FBCB2 software that should be obtained during TF XXI events,
and to identify Milestone II requirements. Following TF XXI, these requirements
will be formalized as Critical Operational Issues and Criteria, and approved with
a formal Test and Evaluation Master Plan. Accordingly, between Milestone II and
III, formal testing (Force Development Test and Evaluation and Initial Operational
Test and Evaluation) of the Applique and FBCB2 software will confirm that ap-

f)roved requirements are met. However, overall success during the AWEs is not sole-
y dependent on the success of digitization. The AWEs actually have a much broader
scope and several other "non-digitization" items are being evaluated.

Question. How is the Army determining if the equipment used by the units in the
experiment is reUable and interoperable? How will the Army determine which sys-
tems it will procvire for its soldiers?

Answer. To reduce the risks associated with the evaluation, the lessons learned
from the National Training Center (NTC) rotation 94-07 have been incorporated
into the planning for the TF XXI Advanced Warfighting Experiment (AWE). The
appUque and tactical internet will be experimented with before reaching the NTC
through smaller exercises at Fort Hood, during the nine month train-up period, and
the Electronic Proving Grounds. Interoperability with other digital systems will be
examined through the Digital Integrated Laboratory (DIL) at Fort Monmouth before
providing the system to soldiers. New instrumentation has been developed by the
operational and technical test communities to capture the information needed to as-
sess functional performance of the applique and tactical internet. Electro-magnetic
interference/Electro-magnetic compatibility testing will take place to evaluate poten-
tial interference problems in the field. Safety assessments are being conducted to
ensure appliques can function under battlefield conditions. A "good idea cut off date"
(1 June 95) and an "everything in place date" (1 June 96) have been established
to preclude last minute substitutions of hardware and software to allow the train-
up to occur without the distraction of substituting "a better idea" at the last minute.

The Army estabUshed a user jury process in July 95 to reduce the risk of devel-
oping software by periodically evaluating the current status of the developmental
software code. DIL and the user representatives at Fort Knox and the 4th Infantry
Division are able to assess these software products and provide user feedback. This
hands-on assessment is a continuous, iterative process that include user inputs from
the Experimental Force, the Battlefield Operating Systems subject matter experts,
and other services.

The Army experimental approach should result in lower "total acquisition" costs
than traditional methods. Using commercial products, early inclusion of field experi-
ence and experiments, extensive simulation and modeling, with all potential plat-
forms will facilitate technical/acquisition decisions with lower risks. The experimen-
tation and evaluation process will help determine the proper type, number, and mix
of hardware and software to provide efficient command and control throughout the
force.

Evaluations wiU support the applique software Milestone I/II decision projected
for late fiscal year 1997. Between Milestone II and Milestone III, formal testing
(Force Development Test and Evaluation and Initial Operational Test Evaluation)
of the applique and software wiU confirm that approved requirements derived from
the Brigade Task Force are met.

Question. A battalion level digitization experiment was conducted in 1994. Would
you categorize that experiment as a "success?" Why?

Answer. Yes, the experiment was a success. The Army accomplished the primary
purpose of that exercise, which was to provide insights for the Army's training and
doctrine strategies and materiel acquisitions by identifying the impacts of
digitization. Many valuable lessons and insights were gained from the experiment.
It verified the Army leadership's beUef that the best way to experiment with
warfighting hypotheses and concepts is in the tactically competitive environment of
the Combat Training Centers. It provided insights on how the Army could train and
experiment at the same time while also providing insights into materiel require-
ments definition, doctrinal impacts and training challenges. The experiment also
produced significant insights that helped to shape the Army's follow-on experiments.
It did, however, experience some challenges associated with software maturity.

100

interoperability, and training. Procediires and processes are now in place to ensure
these shortcomings do not recur in the Task Force XXI (TF XXI) AWE.

Question. Although the digitized "blue" force did not perform better than the non-
digitized "blue" force against the "red" force the Army has decided to proceed to the
larger brigade-level experiment. The results of this experiment were due to the im-
maturity of the digitization software, interoperability shortfalls, and lack of train-
ing. Do you believe that the training and current technologies are mature enough
to warrant a larger experiment?

Answer. Yes, the technology the Army is emplo5dng is essentially off-the-shelf, not
new technology (the use and integration of these technologies is new). As far as
training, the Army learned much from the initial digital experiment and therefore
has scheduled a nine month train-up and experimentation period for the Experi-
mental Force (EXFOR) prior to their rotation to the National Training Center. The
two major AWEs in 1995 (Focused Dispatch and Warrior Focus), provided valuable
insights into digitization for both heavy and light forces. Valuable lessons learned
and tactics, techniques and procedures have been captured and provided to our Ex-
perimental Force, the 4th Infantry Division at Fort Hood, to incorporate into TF XXI
AWE.

Question. Why not conduct a smaller, less expensive experiment until it can be
determined that the software, interoperability and training issues are resolved?

Answer. The Army has conducted smaller experiments during the Focused Dis-
patch and Warrior Focus AWEs. TF XXI actually begins in mid 1996 with a series
of mini-experiments complete with data collection plans. These begin at platoon
level, and expand in scope through company and battaUon level, before reaching the
brigade task force level in late 1996.

The smaller number of prototypes associated with conventional concept explo-
ration are insufficient for battalion, brigade, and division level experimentation with
21st Century doctrine or for the development of Information Age tactics, techniques,
and procedures (TTP). Only through large scale experimentation can the Army de-
termine broad implications of digitization, weigh the costs and benefits of the var-
ious prototype systems, and determine funding priorities for its digitization and
modernization programs.

Question. The Army digitization plan has numerous risks. How would you rate
the following risks (high, medium, or low): technical; cost; schedule?

Answer. In general, I would say the technical and schedule risks are medium, and
the cost risk is low. The biggest technical risk is the technical integration associated
with the 'Tactical Internet". For the first time, the Army will be integrating many
disparate communications devices, command and control systems, routers, gateways
ana computing devices into a seamless "internet" analogous to the commercial inter-
net. This is a formidable task. The only real schedule risk at this juncture is the
'Tactical Internet". This is a result of the risk associated with successful integration
of the "Tactical Internet" components before commencement of the experiment. As
far as cost risks, we have learned much since the General Accounting Office (GAO)
report and the current cost estimate is below the previous assessment.

Question. What are you doing to minimize the risks?

Answer. The Army has a detailed approach to risk reduction which emphasizes
progressively more comprehensive evaluations and includes the widespread use of
commercial off-the-shelf technologies and components ciu-rently in daily use in the
world-wide Internet. In addition to extensive modeling and simulation of tactical
internet components and network configuration, the Army is conducting integration
testing of those components at the contractor facilities. Laboratory testing of compo-
nents, routers for example, and Command and Control (C2) systems will be con-
ducted via the Army InteroperabiUty Network culminating in a certification of each
component and system. Field testing of a sample of each component and system will
be completed at the Army Electronic Proving Grounds prior to hand-off to the
EXFOR. An extensive troop train-up program which includes the use of technical
personnel to assist with equipment and technical issues will ensure the users are
properly prepared for field use of the digitization technologies. The Army is ensuring
the TF X5Q awe is sufficiently instrumented so that data gathered can support rig-
orous performance analysis of the tactical internet under field conditions prior to
further commitment of Army resources.

Question. The estimated cost of total digitization development effort will be almost
$400 million. Does the Army budget sustain the digitization experiment in the out-
years?

Answer. The Army has budgeted funds to conduct the Task Force and Division
advanced warfighting experiments and to sustain the equipment throughout the
process. Funds are earmarked to transition the FBCB2 program into the formal ac-
quisition phase, including an FDTE and lOTE, following the milestone II decision.

101

Question. Current estimates to "digitize" a ten division Army run as high as $4
billion. Given the Army's constrained modernization budget, can you afford to
"digitize" the force?

Answer. Digitization is one of the Army's top priorities. The Army has budgeted
for applique development and procurement because of its great potential as a force
multiplier across the battlefield operating systems. The current estimate to provide
the applique and associated software to the ten division Army is approximately $2
billion.

Command, Control and Communications Issues

Question. The Army's Force XXI is dependent on interoperable information sys-
tems. Key to the Army's digitized battlefield is reliable, secure communications links
and interoperable strategic and tactical information systems. Last year, the Con-
gress provided additional funds to accelerate the procurement of tactical commu-
nication systems. These funds allowed the Army to alleviate shortfalls and procure
higher quantities at lower prices. If additional funds were made available, which
programs could be accelerated in fiscal year 1997? What would be the benefit of ac-
celerating those programs?

Answer. The following programs would be accelerated and with benefit:

(1) Single Channel Ground and Airborne Radio System (SINCGARS) (Ground) $30
million; Other Procurement, Army (OPA 2); An additional $30 million would replace
minimum funds required to complete fielding of SINCGARS System Improvement
Program (SIP) to critical Force Package (FP) III, active component. Will save a po-
tential 40-50 percent unit cost increase that would occur if these radios were pro-
cured in fiscal year 1999 and accelerates fielding by two years.

(2) SINCGARS (Airborne) $13.3 million OPA 2; An additional $13.3 miUion will
Procure remainder of retrofit kits (675) and provides for aircraft recurring, non-re-
curring and application costs.

(3) SINCGARS Frequency Hopping Multiplexer (FH MUX) $28.7 million OPA 2;
An additional $28.7 million accelerates the program and procures 927 FH MUX, re-
quired to complete Force Package (FP) 1 and FP2 requirements (2350 FH MUX).

(4) Tactical Defense Message System (DMS); An additional $1.9 million OPA 2
will provide integration of DMS into Enhanced Switch Operation Program (ESOP)
and Integrated System Control (ISYSCON).

(5) Integrated System Control (ISYSCON) $9.9 miUion OPA 2; An additional $9.9
million will fund acquisition/fielding of Version 2 configuration mandated by adjust-
ments to requirements document.

Question. Please describe the limitations of your current command, control and
communications systems. What items are you currently procuring that will over-
come your shortfalls?

Answer. Prior to the advent of the Army Tactical Command and Control System
(ATCCS) the individual Battlefield Functional Areas (BFAs) executed their com-
mand and control functions using stubby pencils and calculators on map boards and
with resulting volumes of paper and extensive time required in preparation of oper-
ation plans, operation orders, etc. There was no synergy or common sharing of infor-
mation during the development of plans. Information in developing real time intel-
ligence was buried and unavailable. Those BFAs that had a computer system took
several 5-ton trucks to haul them around the battlefield. Systems developed by indi-
vidual commands or BFAs could not interoperate with other systems similarly de-
veloped.

ATCCS is designed to overcome these and other shortfalls by providing a seamless
command and control system that provides a common picture of the battlefield to
the commander. It is based on a Department of Defense (DoD) Common Operating
Environment, commercial open systems architecture, and a common hardware plat-
form and common software (to prevent duplication of effort and provide maximum
commonaUty). The ATCCS is being developed incrementally with initial software ca-
pability packages followed by approximately yearly issues of the software until the
users' objective requirements are met. The common hardware being used will re-
ceive technical insertions/upgrades to keep pace with the swift commercial develop-
ment of computer technology.

ATCCS is also part of the Army Battle Command System which covers command
and control from the sustaining base to the foxhole and is interoperable horizontally
within the BFAs and vertically with the Army Global Command and Control System
(AGCCS).

Current Army communications systems were, to a large extent, designed and
fielded to support non-distal applications such as voice and to a much lesser extent,
Limited data communications. The digitized battlefield requires more efficient and

102

effective data communications capabilities to support the requirements of the
warfighters. To meet this need the Army is upgrading the capabihties of its legacy
systems (Single Channel Ground and Airborne Radio System (SINCGARS), Mobile
Subscriber Equipment (MSE), and Enhanced Postioning Location Reporting System
(EPLRS) to better meet the requirements of the digitized battlefield. Specifically the
SINCGARS System Improvement Program (SIP), the EPLRS Very High-Speed Inte-
grated Circuit (VHSIC) program and upgrades to MSE Tactical Packet Network are
all targeted to improve their data handling capability and capacity. Additionally, the
Army has initiated the Near-Term Digital Radio (NTDR) program as the "data haul-
er" for high capacity through-put requirements that exceed the capabilities of the
improved legacy programs.

Question. The Army Tactical Command and Control System (ATCCS) is made up
of five interoperable automation systems which support the commander by pro-
viding data used to direct their forces more effectively. ATCCS development began
in the 1980's. To date, only one system has been fielded. What is the status of the
ATCCS program?

Answer. Four of the five ATCCS systems are currently being fielded. The fifth will
initiate fielding in fiscal year 1998. The status of the five programs is as follows:

(1) Advanced Field Artillery Tactical Data System (AFATDS) completed a success-
ful Initied Operational Test & Evaluation (lOTE) in September 1995. They are pres-
ently fielding to III Corps units and will continue fielding in fiscal year 1997 to the
total Army.

(2) All Source Analysis System (ASAS). Twelve Block I systems have been fielded.
Six ASAS-Extended systems and modules have been fielded and thirteen more will
be fielded during fiscal year 1997. ASAS Block II is under evolutionary development
and capability package one will be completed during fiscal yeau* 1996.

(3) Combat Service Support Control System (CSSCS) will complete a Low Rate
Initial Production (LRIP) fielding to III Corps during fiscal year 1996. They will
begin fielding to Force Package (FP)1 units in fiscal year 1997.

(4) Forward Area Air Defense Command and Control (FAADC2) completed a suc-
cessful Initial Operational Test and Evaluation (lOTE) for its heavy version in Jan
95. They are fielding to 4th Infantry Division (4ID) (Task Force (TF) XXI), 1st Cav-
alry Division (1 CAV), and 3rd Infantry Division (3ID) (24th Mechanized Division
24MX)) during fiscal year 1996 and will continue fielding in fiscal year 1997.

(5) Maneuver Control System (MCS) Block III will undergo an lOTE starting Oct
96 and will begin fielding in fiscal year 1998. The Common Hardware Software
(CHS)-2 equipment to support the lOTE and Task Force (TF) XXI has been pro-
cured and we are already proving equipment to III Corps, 1 CAV, and 4ID. The pro-
gram is on track for support to both the lOTE and TF XXI. MCS is the last of the
ATCCS systems to undergo a Milestone III in fiscal year 1997.

Question. ATCCS is an essential part of the digitization experiment that will be
conducted in 1997. Do you believe that the system will be fielded in time for the
experiment? Why?

Answer. ATCCS is an essential part of the digitization experiment and yes, aU
of the systems will be available for the experiment. They include:

(1) AFATDS has completed lOTE and is fielding now to 4ID (TF XXI) and train-
ing is underway.

(2) ASAS has already provided an initial delivery of ASAS capability to 4ID (TF
XXI) in February 1996 with subsequent deliveries in April 1996 and final delivery
in June 1996.

(3) CSSCS has already fielded the CSSCS to 4ID. Additional required capability
for TF XXI will be provided to 4ID (TF XXI) by June 1, 1996.

(4) FAADC2 has already provided workstations for training and the final capa-
bility will be fielded from mid-May to mid- June to 4ID (TF XXI).

(5) MCS is training 4ID (TF XXI) with experimental "beta" software and is receiv-
ing user feedback. Final software will be provided in June 1996 (System Segment
Acceptance test was completed this month). The CHS-2 handware has been ordered
and will be delivered by June 1, 1996 (delivers start in April 1996).

Science and Technology

Question. The Army's science and technology program emphasizes four areas:
technology insertion through upgrades on existing platforms; support of the Joint
Chiefs of Staff (JCS) future warfighting requirements and the Force XXI
warfighting experiments; evaluating the impact of advance technologies on doctrine,
training, organization, leadership development, and materiel; and a top level ap-
proved Science and Technology Master Plan. What are the Army's top science and
technology programs?

103

Answer. Army Science and Technology (S&T) programs are prioritized in three
categories: near-term warfighting capabihties, future systems, and technology. Near-
term priorities include Countermine (standoff mine detection and support for Bos-
nia); Combat identification (ground-to-ground and air-to-ground); Digitization and
Command, Control, and Communications (C3) extension in current and future Army
systems; Rapid Battlefield Visualization including quick terrain imaging and map
overlays for expanded situational awareness; Enhanced Early Entry Force capability
in the form of acoustic sensors, hunter/sensor vehicles, fiber optic guided missile on
the High Mobility Multipurpose Wheeled Vehicle, and a digital tactical operations
center. These near-term efforts include technology insertion and support of (JCS)
and Force XXI capabiUty objectives.

Technology for future systems has two priority foci: advanced components for the
Land Warrior development program including full digitization, and guided muni-
tions to reduce logistics and collateral damage and serve as a force multipUer.

Lastly, we have two technology priorities, the Federated Labs at the Army Re-
search Laboratory (which includes the electric gun) and Infectious Disease Research.

Question. Does the budget adequately fund the Army's priority science and tech-
nology programs? If not, what are the shortfalls?

Answer. The priority programs I mentioned are adequately funded to achieve
their objectives in a reasonable time period. They could, however, benefit from addi-
tional fiscal year 1997 funding to accelerate development or to provide more robust
testing regimen. For example, the Guided Multiple Launch Rocket System (MLRS)
program, with an additional $5 million, could be accelerated for an earUer transition
into Engineering and Manufacturing Development (EMD). This would permit incor-
poration of the low cost guidance and control package into more MLRS production
units. The Countermine program would benefit from an increase of $5 million to ex-
pand its efforts on mine hunter-killer technology for Bosnia-type operations.

Additional funds for risk-mitigating, more robust field testing would substantially
help four of oiu- high priority programs: Ground Combat Identification ($2 milUon);
Objective Individual Combat Weapon ($3 million); Force XXI Land Warrior ($4 mil-
Uon); and Precision Guided Mortar Munition ($5 mUIion). This focus on enhanced
testing during S&T is part of our increased emphasis on technology transition. Oiu*
intent is to unambiguously demonstrate technology maturity to program managers
and the Army test community, and in so doing, permit some technologies to transi-
tion directly into EMD, avoiding the cost of the DemonstrationA^alidation phase.

Theater High Altitude Area Defense (THAAD)

Question. In your statement Mr. Decker, you suggest that: "Over time, the pro-
liferation of longer range missiles wiU pose a greater threat to the United States —
both to our forces stationed here and to our civilian population." In addition, you
suggest that theater missile defense is a "high priority." If this is the case, first that
theater missile defense is a high priority and second that the threat will increase
in the years ahead, why then, does your budget plan show a substantial lack of re-
sources in the outyears for THAAD? Those things seem extremely incongruous. Can
you please explain to me how that will work? Or do we have a less than fiilly funded
Theater Missile Defense program?

Answer. Theater missile defense is a high Army priority. What we and the De-
partment of Defense are trjdng to do is balance our budgets with our priorities.
Longer range theater missile threats are developing, but not at as rapid a pace as
we once believed. We have focused our near-term efforts on Patriot Advanced Capa-
bility-3 and have been able to maintain the THAAD User Operational Evaluation
System (UOES) limited abihty to respond in a national emergency by the end of fis-
cal year 1998. The Ballistic Missile Defense Organization outyear funding of
THAAD will support a very robust objective system capability with First Unit
Equipped Date in 2006. We are examining options to try to puU that date back to
2004.

Question. The Theater High Altitude Area Defense (THAAD) missile defense sys-
tem was recently tested. THAAD was supposed to intercept a target. Unfortunately,
this did not happen. Would you please teU the Committee why this second attempt
to shoot down a missile failed?

Answer. Right now we have contractor and government teams investigating the
specific cause of the failure. What we do know is that the interceptor appeared to
fly normally until shortly after the THAAD interceptor kill vehicle separated from
its booster. We intend to determine the causes of the failure, then perform enough
testing on the ground to convince us that the problem won't recur before we fly
again.

104

Question. The Administration's request for THAAD is $2 billion less than last
year over the Future Years Defense Plan. Would you tell the Committee why the
Army agreed to this significant cut?

Answer. We know that there is a high probability that we will have to fight The-
ater Ballistic Missiles (TBMs) again as we did in the Gulf War. Our task is to get
systems in place to do that effectively before we have to fight again. We have looked
at the threat and found that longer range TBMs are being developed, but at a slow-
er rate than we thought previously. Based on this threat analysis the Joint Require-
ments Oversight Council recommended giving the highest priority to systems that
defeat the most immediate, near term threats, such as Patriot Advanced Capability-
3 (PAC-3) and to implement a Theater Missile Defense funding cap, given their
mission of balancing overall defense priorities. 1 concurred with the decision to em-
phasize PAC-3. The Army supports efforts by the Department of Defense and the
Ballistic Missile Defense Organization to get both PAC-3 and THAAD in the field
as soon as possible within available Department of Defense resources.

Question. Does the Administration's budget request for fiscal year 1997 THAAD
comply with deployment dates as mandated in law?

Answer. The Department of Defense (DOD) has tried very hard to comply with
the First Unit Equipped (FUE) date in the Defense Authorization Act, and believe
actions are consistent with the Act's intent within available resources. The issue is
that we have so many requirements, for this reason, the Joint Requirements Over-
sight Council, given their mission of balancing overall defense priorities, rec-
ommended a Theater Missile Defense (TMD) funding cap. They also recommended
giving the highest priority to systems, such as Patriot Advanced Capability-3 (PAC-
3), that defeat the most immediate, near-term threats. I concurred with the deci-
sions to emphasize PAC-3. Within the DOD TMD funding cap, the Army is doing
everything possible to get both PAC-3 and THAAD in the field as soon as possible.
We have been able to retain the THAAD User Operational Evaluation System avail-
ability in 1998 to support our efforts in a national emergency before the FUE date.
We also want the THAAD FUE date earlier than 2006 and ate exploring our options
for doing that within the available resources of the Department of Defense.

Demilitarization of Chemical Munitions

Question. Currently, chemical munitions are demilitarized through incineration.
Because of environmental concerns, the Congress has requested that the Army
study if other technologies could be used for chemical munitions demiltarization.
What are some of the alternate technologies you are studjdng?

Answer. Based on recommendations from the National Research Council's (NRC)
report on alternative technologies, the Army initiated in August 1994 an aggressive
research and development program to evaluate two alternative technologies to the
reverse assembly/incineration process for potential use for destrojdng the chemical
stockpiles stored at the bulk-only sites located at Aberdeen Proving Ground, Mary-
land and Newport Chemical Activity, Indiana. These technologies are neutralization
and neutralization followed by biodegradation.

In addition, to ensure the Army captvu*ed the latest developments in alternative
technologies, the Army published an announcement in the Commerce Business
Daily, requesting industry to provide concept design packages for non-incineration
technologies which are capable of meeting the chemical demilitaration disposal
schedule for the bulk-only sites. After evaluating twenty-three concept designs,
three promising alternative technologies were identified from industry's response to
the Commerce Business Daily announcement. These technologies are electro-
chemical oxidation; hydrocracking; and molten metal. The NRC is currently evalu-
ating these technologies, as well as the two neutralization processes. The NRC's
evaluation of these technologies will be provided to the Army in a report in August
1996 and presented at a Department of Defense program review in the first quarter
of fiscal year 1997. At that time, a decision will be made whether to continue with
a pilot-scale program with one or more of the technologies.

Question. Are any of these technologies a proven method for demilitarizing chem-
ical munitions?

Answer. No, however, during the NCR's evaluation period, the proponents of the
technologies, including the Army, must perform live agent testing at an approved
chemical surety laboratory. The results of the live agent testing will be included in
the NRC's report to the Army. In addition to the NRC, the U.S. Army Material Sys-
tems Analysis Activity (AMSAA) is serving as an independent evaluator. AMSAA
will evaluate testing results and will provide a report in June 1996, evaluating tech-
nical and economic aspects of all alternative technologies. It should be noted that
these technologies are not a complete replacement for all treatment steps required

105

to perform demilitarization; for instance, energetics are not addressed as part of the
current alternative technology program.

Question. Does the Army plan on using any of the alternative demilitarization
technologies? If so, which ones?

Answer. Providing the NRC's recommendations on the alternative technologies
warrant further evaluation, a decision will be made at a DoD program review in
the first quarter of fiscal year 1997 whether to proceed with an alternative tech-
nology or continue with the baseline incineration technology at Aberdeen Proving
Ground, Maryland or Newport Chemical Activity, Indiana.

Question. Would any additional costs be associated with implementing the use of
another demilitarization technology? If so, how much would it cost?

Answer. There may be some added costs; however, the costs for full development
and pilot-scale testing have not been established at this time as all necessary data
have not yet been processed. This information is being developed and will be pre-
sented at the DoD program review in the first quarter of fiscal year 1997.

Question. Could you achieve savings by implementing an alternative demilitariza-
tion technology? If so, how much?

Answer. The cost for fiill development and pUot-scale testing is being established
as necessary data is being generated. Comparative operational costs as well as cost
avoidance associated with public acceptance are dependent on the technology choice.
A better understanding of cost factors associated with alternative technologies (sav-
ings or growth) are being developed as the evaluation process progresses.

Acquisition Program Issues

Question. Should extra funds be made available for the Defense Department this
year, the Committee would like to know where some investments can be made
which have a potentially high payback. What are the top ten unfunded require-
ments in each Research and Development and procurement account in yovir service?

Answer. The top ten unfunded requirements in the Research and Development
and procurement accounts are identified in the Army's 1-N list, and include funding
for the following programs: Force XXI Initiatives; Force XXI Digitization; Research,
Development, Test and Evaluation Base Operations; Standard Integrated Command
Post System (SICPS); Automated Network Manager (ANM); Combat Service Sup-
port Computer System (CSSCS); Stinger Block I/Platform; Bradley and Bradley
Modifications; and Improved Recovery Vehicle (IRV).

Question. Identify all production programs for which funds are included in the fis-
cal year 1997 budget request where fiscal constraints have prevented acquisition of
sufficient quantities in either fiscal year 1997 and/or the accompanying Future
Years Defense Plan (FYDP) to meet validated military requirements/inventory ob-
jectives.

Answer. The Army is buying in as many quantities as it can afford and for which
it has a requirement, given the resource constraints. But in many cases, it is not
as many as we would like to procure, to meet vaUd military requirements earlier,
and/or to attain economic efficiencies. Production programs for which fiscal con-
straints have prevented acquisition of sufficient quantities in either fiscal year 1997
or accompanying FTDP are identified in the Army 1-N unfunded requirements list.
Examples include: Standard Integrated Command Post System; Bradley A3; the Im-
proved Recovery Vehicle; Standard Army Management Information Systems Tac-
tical Computer Program (STACOMP); Night Vision Devices; Soldier Enhancement
Program — Individual Soldier Radio; Frequency Hopping Miiltiplexer; LightWeight
High Gain X-Band Antenna; Single Channel Ground and Airborne Radio System
(SINCGARS^Air; SINCGARS— Ground; M113 Family of Vehicles; Personnel Elec-
tronic Record Management System; Super High Frequency Tri-Band Advanced
Range-Terminal; Force Provider; Forward Area Air Defense Ground Based Sensor;
Firefinder; and GUARDFIST I.

Question. What initiatives are currently approved in an outyear Program Memo-
randum which could either be done more cheaply and/or be fielded earher by initi-
ating them in fiscal year 1997?

Answer. Initiatives currently approved in an outyear Program Objective Memo-
randum which could be either done more cheaply and/or fielded earlier by initiating
them in fiscal year 1997 are identified in the Army's 1-N List of unfunded require-
ments. Some of the programs identified for early but out in the 1-N Ust are Bradley
modifications (Armor Tiles) and Airborne Reconnaissance Low-Multisensor (ARL-
M). Among the programs identified for investment for economic efficiencies are
Stinger Block I, Improved Recovery Vehicle, the High Mobihty Multipurpose
Wheeled Vehicle (HMMWV), and JaveUn.

106

Question. Indicate program by appropriation account along with an estimated
funding stream for each of the five subsequent fiscal years (assuming a fiscal year
1997 start) along with the potential savings that could be achieved.

Answer. The Army is currently studjdng programs that are candidates for early
buy out or investment for economic efficiencies and preliminary indications are that
significant savings can be realized through early buy outs or investment for eco-
nomic efficiencies. As programs are identified, and specific numbers become avail-
able for funding streams, as well as short and long term potential savings, these
will be forwarded to the Authorization and Appropriations Committees.

Question. Provide a list of Research and Development or procurement programs
or projects for which funding is included in the fiscal year 1997 budget that are
stretched out beyond technically attainable schedules primarily due to lack of fund-
ing in either fiscal year 1997 and/or the outyears.

Answer. There are no research and development and procurement programs or
projects for which funding is included in the fiscal year 1997 budget that are
stretched beyond technically attainable schedules. However, the Arm/s 1-N Ust
contains unfunded requirements that, if funded, would help to procure at a faster
rate to meet valid military requirements earlier and/or obtain greater economic effi-
ciencies.

Question. Indicate all programs for which procurement funding is included in your
fiscal year 1997 budget that would be good candidates for multi-year procurement
funding, assuming additional funding were to be available in fiscal year 1997 and
the outyears. Provide for these programs a comparison of the current acquisition
funding stream compared to a potential multi-year (assuming a fiscal year 1997
start), along with the additional up-front investment that would be required and the
potential savings that would be likely.

Answer. The Army is very interested in initiating multi-year procurement con-
tracts for various programs. A study is ongoing regarding assessing the amount of
short and long term savings to be captured through initiation of multi-year con-
tracts. When the study is finalized, results will be made available to the Authoriza-
tion and Appropriations Committees. Initial findings, however, indicate that the fol-
lowing programs would benefit from a multi-year approach: Hellfire II; Improved
Recovery Vehicle; Black Hawk Helicopter; Army Tactical Missile System (ATACMS);
Block LA Missiles; and Close Combat Tactical Trainer (CCTT). Again, as more spe-
cific information regarding comparisons of funding streams and potential savings
become available, they will be forwarded.

Question. Identify any procurement programs in the fiscal year 1997 budget
where provision of additional procurement ftinds in fiscal year 1997 would have a
very favorable impact on production unit prices.

Answer. We are currently preparing information papers outlining savings. These
papers will be provided to the Authorization and Appropriations Committees as they
are completed. Preliminary indications are that the Army would experience substan-
tial cost savings resulting from a reduction in production unit prices if they were
provided additional funds in fiscal year 1997. Examples of programs that would en-
gender savings through additional funds in fiscal year 1997 are: Stinger Block I Up-
grades; Paladin and Field Artillery Ammunition Support Vehicle (FAASV); Sense
and Destroy Armor (SADARM); Mobile Automated Instrumentation Suite (MAIS);
Avenger Slew-to-Cue; Black Hawk; Bradley Linebacker; Improved Recovery Vehicle
(IRV); Tank Weapons Gunnery Simulation System/Precision Gunnery Systems
(TWGSS/PGS); National Training Center/Opposing Force Surrogate Vehicle (NTC
OSV); 21/2 Ton Extended Service Program (ESP); Ml 13 Family of Vehicles (FOV);
Maneuver Control System (MCS); Single Channel Ground and Airborne Radio Sys-
tem (SINGARS); Digital Topographic Support System (DTSS); Soldier-Support Items
(Portable Bath Unit/12 Head Shower); and Soldier-Support Items (Food Sanitation
Center).

Question. Identify each production program in the fiscal year 1997 budget whose
main rationale is to sustain a minimal industrial base.

Answer. No production program in the fiscal year 1997 budget exists principally
to maintain industrial base capabilities. There are several, however, which have a
strong side benefit of maintaining a domestic industrial base. The Abrams tank up-
grade is the principal example. This multi-year program will provide the Army with
significant additional combat capability and at the same time, maintain critical de-
fense unique suppliers of frontal protection armor and large caliber gun systems.
There are of course non-production facility maintenance programs in the fiscal year
1997 budget to preserve reserve capacity at government owned ammunition plants.
However, no production program exists principally to maintain industrial base capa-
bilities.

107

Question. Please indicate in total and for the top 20 largest weapon systems both
the peacetime operating requirement (separately) for spare parts funded either as
initial spares in procurement accounts or as consumable spares in the Defense Busi-
ness Operations Fund (DBOF), and the percentage of requirement met through the
fiscal year 1997 budgeted level of funding. Project how this would change by the
end of the future year defense plan (FYDP).

Answer. Peacetime requirements for spare parts are 100 percent funded through
the fiscal year 1997 budgeted level and are projected to remain fully funded by the
end of the five-year defense plan (FTDP). Following is the breakout requested. The

Erocurement funding buys initial spares from the Supply Management, Army (SMA)
usiness area (formerly Army Stock Fund) of the Defense Business Operations Fund
(DBOF) to support weapon system fieldings. The DBOF column reflects the SMA
operating cost authority for the purchase of peacetime spares and repair parts from
industry for both replenishment and initial fieldings.

PEACETIME SPARE PARTS
[Fiscal year 1997, in millions of dollars]

Procurement DBOF

funded funded

Total fiscal year 1997 145.1 1044.0

Top 20 Weapon System Breakout

AH-64

UH-60 Helicopter

OH-58D Helicopter

CH-47D Helicopter

RC-12D Reconnaissance Airplane

Ml Tank

M88Tank

Bradley Fighting Vehicle System

M109 Howitzer

Ml 13 Personnel Carrier

Highly Mobile Multipurpose Wheeled Vehicle

Multiple Launch Rocket System

Patriot Missile System

Avenger Missile System

Night Vision Equipment

Mobile Subscriber Equipment

Ground Based Common Sensor

JSTARS Radar System

SINCGARS Radio

M9 Armored Combat Earthmover

12.5

93.6

8.1

49.5

1.7

15.8

12.9

21.3

11.2

9.3

78.9

24.3

9.3

55.7

1.4

35.4

21.4

24.1

1.8

11.4

7.0

67.3

11.0

2.7

19.5

13.6

9.9

9.5

8.8

5.0

1.4

6,0

7.6

Question. Please indicate any potential Foreign Military Sales (FMS) that are
being discussed that could influence production unit prices once consummated not
including those whose impact has been already factored into the production unit
prices portrayed to Congress in the fiscal year 1997 budget.

Answer. Currently there are three near-term potential FMS cases for a total
quantity of 312 Army Tactical Missile System (ATACMS) Block I missiles. If ap-
proved, these sales will provide a more economical production base for the ATACMS
Block LA missile. However, only one of these cases has progressed to the Letter of
Offer and Acceptance (LOA) phase. It is not known if any of the cases will be ap-
proved in time to have an impact on the fiscal year 1997 budget. There is also dis-
cussion in progress for potential FMS of Stinger-Reprogrammable Microprocessor
(RMP) to various countries. Currently there is no excess Army inventory of missiles
available for diversion. Since new missile production of Stinger-RMP has ended,
FMS sales are contingent upon restart and requalification of a production line for
purchasers. There is no production unit price impact for the United States Army
associated with the Block I retrofit program; however, restart of production line
would help maintain a Stinger warm production base. The FMS sales will also lead
to lower Depot Madntenance costs for parts and labor since the prime contractor
workloads are performed at the Hughes Aircraft Plant, Tucson, Arizona.

Question. Please indicate what policy your service uses for major R&D and pro-
duction programs, such as "budget to contract target cost" or "budget to ceiling con-
tract cost" or "budget to most likely cost", and identify which of your major pro-

108

grams in the fiscal year 1997 budget deviate from this poUcy and the attendant ra-
tionale.

Answer. The Army policy is to decentralize program management and empower
Program Managers to use their discretion and available tools to direct their pro-
grams. All of these budget processes are options available to our Program Managers.
Among our program objectives are the reduction of risk as much as possible and the
negotiation of firm fixed-price contracts where appropriate. However, if there is
higher risk involved, a cost-reimbursement contract may be used. For risks greater
that appropriate for a firm fixed-price contract, but less than appropriate for a cost-
reimbursement contract, a fixed-price incentive contract may be used. In this in-
stance, contract target costs and ceiling costs are established and contract profits
will vary according to how close they come to the target, but in no case will the
Army pay more than the ceiling.

Question. Please indicate what policy your service uses to provide a budget within
R&D and production programs for unknown allowances and/or economic change or-
ders, and identify any programs in the fiscal year 1997 budget which deviate from
this policy and the attendant rationale.

Answer. The Army policy is to decentralize program management and empower
Program Managers to use their discretion and available tools to direct their pro-
grams. Program Managers generally utilize their below the threshold reprogram-
ming authority to manage unknown allowances and economic change orders. When
reprogramming is either inadequate or inappropriate, supplemental funding relief
is required or total system buy quantities must be reduced to provide funds for the
unforeseen condition.

Question. Please identify any R&D or production program which has an amount
budgeted in fiscal year 1997 for a contract award fee larger than $10 million. Pro-
vide the amount budgeted for the award fee, the basis on which the amount was
calculated (e.g. 100% fee based on the contract), and the historical performance of
the contractor in terms of percentage of award fee awarded during prior award fee
periods under the contract.

Answer. The only contract which met your criteria was the Crusader Phase I and
II (Demonstration and Validation Phase of the Development of the Crusader). For
fiscal year 1997 the award fee budgeted was $14,700,000 (100% budgeted fee based
on the proposed contract). For the Award Fee Period 07/96-09/96, the award fee
budgeted was $2,500,000 (100% budgeted fee based on the proposed contract). For
the Award Fee Period 01796-06/96, the award fee budgeted was $3,800,000 (100%;
budgeted fee based on the proposed contract).

The only award fee paid to the contractor to date was for the Award Fee Period
12/94-12/95. The contractor received 27% of award fee pool available under the con-
tract.

Question. Please identify all research and development and production programs/
projects for which Congress appropriated funds in fiscal year 1996 which since the
Appropriations Act was enacted have been either terminated or significantly down-
scoped. For each, indicate the status of the fiscal year 1996 and any earlier active
fiscal year funds where funds have been diverted to another purpose.

Answer. The Armored Gun System (AGS) has been terminated subsequent to the
Appropriations Act in fiscal year 1996. In both procurement and research, develop-
ment, test and evaluation (RDT&E) accounts, the AGS dollars have been 100 per-
cent obligated for fiscal year 1995. For fiscal year 1996, no money has been obli-
gated for procurement, and all procurement funds are being held by the Office of
the Secretary of Defense pending approval of Army's proposed reprogramming for
reinvestment in other critical efforts. Remaining funds will be reinvested in other
critical efforts. A significant amount of RDT&E funds have been obligated to date
and the remaining amount will be obligated by June 30 to terminate the AGS effort

Force Provider

Questions. Force Provider sets are deployable modular units which provide a basic
camp for 600 troops — living quarters, showers facilities, laundry facilities, etc. How
many Force Providers sets have been deployed to Bosnia? What feedback are you
getting regarding the usefulness of these units? How many Force Provider sets are
in the Army's inventory? What is the Army's inventory objective for Force Provider?
Are any funds requested in fiscal year 1997 for Force Provider?

Answer. Force Provider is a bare base support system that provides climate-con-
trolled billeting, dining, shower, latrine, laundry, morale, welfare, and recreation
support for 550 soldier per module. Six modules are deployed to the Tuzla Valley
in Bosnia supporting over 5,000 soldiers in three base camps. Soldiers have all re-
marked positively about the system and have highlighted their favorite aspects.

109

Master Sergeant Langerudd, a food service advisor at Steel Castel Base stated, "I
think I died and went to heaven. This is the best field food service equipment I have
seen in my 21 years of service." A soldier in the 4th Aviation Brigade, Comanche
Base stated, "We should have had this in the Desert. This stuff is great, warm tent,
hot shower, even a movie theater. The Army really did it right, this time." Currently
there are 13 Force Provider modules in the Army inventory. The Army's inventory
objective is 36 modules. $11,661 million has been requested in the fiscal year 1997
President's Budget for Force Provider production.

[Clerk's note. — End of questions submitted by Mr. Young.]

Wednesday, March 20, 1996.
NAVY AND MARINE CORPS ACQUISITION PROGRAMS

WITNESSES

HON. JOHN W. DOUGLASS, ASSISTANT SECRETARY OF THE NAVY, RE-
SEARCH, DEVELOPMENT AND ACQUISITION

VICE ADMIRAL T. JOSEPH LOPEZ, USN, DEPUTY CHIEF OF NAVAL OP-
ERATIONS, RESOURCES, WARFARE REQUIREMENTS AND ASSESS-
MENTS

major general jeffrey w. oster, usmc, deputy chief of
staff for programs and resources

admiral john t. hood, program executive officer, theater
air defense

captain phillip m. balisle, deputy director, surface war-
fare/theater air defense, chief of naval operations

Introduction

Mr. Young. The Committee will come to order.

The hearing this afternoon will be executive session, and at ap-
proximately 2 o'clock, depending on how long we go, we will con-
duct a hearing in open session on the Navy and Marine Corps Ac-
quisition programs.

The briefing will be closed for the first half-hour for a classified
briefing by Secretary Douglass for Navy Research Development and
Acquisition. He is accompanied by Vice Admiral Lopez and Major
General Oster.

The briefing will tell us the results of recent tests of Aegis ships
against antiship cruise missile targets using the Cooperative En-
gagement Capability — CEC System. We had an introduction to that
this morning with the Chief of Naval Operations talking a bit
about it but we are excited about the good news that we are hear-
ing. I am not going to make a lengthy opening statement.

Mr. Murtha.

Mr. Murtha. No thank you.

Mr. Young. Mr. Secretary, we are happy to hear from you. We
will be glad to put your statement in the record and you may pro-
ceed as you wish.

Mountain Top Demonstration

Mr. Douglass. I would like to offer our joint statement for the
record. We will start with a classified presentation on the results
of our Mountain Top Advanced Concept Technology Development —
ACTD. The Mountain Top ACTD demonstrated that we can use our
ships and over-the-horizon radar targeting capability to take care
of incoming missile threats.

We would like to follow that with a brief description to the Mem-
bers of some tracking information that we have from our Aegis

(111)

112

ships involving recent Chinese missile shots off the coast of Tai-
wan. After that we will go into open session where I will provide
an overview of the Navy's Research, Development and Acquisition
programs and then we will be ready for your questions.

Mr. Young. That sounds fme.

Mr. Douglass. This is my Program Executive Officer— PEG, Ad-
miral Tim Hood, who is in charge of the Mountain Top Demonstra-
tion, our Theater Ballistic Missile Defense program and a number
of our other programs.

Admiral Hood, if you will proceed with the briefing. Admiral
Hood will walk you through the Mountain Top demonstration.

OBJECTIVE

Admiral HoOD. Just over a month ago we completed the cruise
missile defense ACTD referred to as Mountain Top. The name
Mountain Top comes from Kokee Ridge and Makaha on the Island
of Kauai. With me is Captain Phil Balisle, of the CNO staff.

[Clerk's note. — The charts referred to by Admiral Hood are
printed on page 124 — . Classified charts have been removed.]

(CHART 1) The concept of the ACTD is depicted here. The crit-
ical elements on the mountain consist of an experimental radar
from Lincoln Laboratory with an E-2C aircraft antenna, fire con-
trol tracking and illumination radar from one of our decommis-
sioned ships and cooperative engagement equipment, an Aegis ship
with its Aegis weapon system and Standard Missiles and a Patriot
battery ashore.

The objective was to engage a low-flying cruise missile below the
radar horizon of the firing ship by first detecting and tracking the
target from this surrogate air platform, and passing that radar
data via CEC to the Aegis ship. Then, a fire control solution was
computed and the Standard Missile was launched and guided to its
mid-course via radar, and the missile was transitioned to home on
illumination from this fire control radar at the airborne platform
resulting in engagements well beyond the ship's radar horizon.

FIRING RESULTS

(CHART 2) We conducted four firing exercises, all successful. The

first was a warm-up exercise with the target at altitude.

You see a miss distance of well within the lethal radius of

the Standard Missile. The range of intercept was not spec-
tacular because of the target altitude. We wanted to warm up.

The next three exercises, the target altitude was brought down

to . The ranges at the intercept from the firing ship you see

here are in the . What we could expect from a ship without

this capability or a force without this capability would be engage-
ment ranges in the miles, even with severe ducting not

more than miles. So this is much further than from a ship

acting on its own.

You see another miss within the standard radius of the missile,

and . An example of this first of those scenarios is

shown here.

(CHART 3) The target is launched off of Kauai. The target pro-
ceeds to seaward and starts inbound. It is detected from the Moun-
tain Top site while it is nautical miles from the firing ship,

113

which is here. This Une indicates the ship tracking its outbound
Standard Missile.

Captain Balisle. This is the actual CEC video as seen on the
displays at the site and on board the ship. To set up the geometry,
you see the ship located here, and the surrogate air platform here
on the island.

You will see the target coming in here from the Northwest. This
is the target inbound, detected by the surrogate platform.

It has been detected by the surrogate air platform and relayed

to the ship. The ship launched her Standard Missile at

away. You see that missile homing on the target here, intercepts
at with a telemetry missile with no warhead in place.

VIRTUAL ENGAGEMENTS

Admiral HoOD. I mentioned the Patriot batteries in the initial
setup. They were part of this ACTD. Although they did not fire any
missiles, they utilized this surrogate air platform on the mountain.
They conducted two simultaneous exercises using this setup.

(CHARTS 4 and 5) The Patriot battery does not have the cooper-
ative engagement equipment embedded in it. They used a JTIDS —
Joint Tactical Information Distribution System message format to
take the composite track off the Mountain Top into the Patriot's
battery, used their own radar to up-link that track information to
an aircraft with a captive carry PAC III seeker. The information
from the fire control radar positioned and directed that PAC III
seeker to find the targets.

(CHART 6) Simultaneously using the same JTIDS link down to
the Patriot battery, they conducted a simulation of a PAC III mis-
sile against the target that they were tracking from the Mountain
Top. This was an unqualified success.

It proved the concept to the Army and to all of us that beyond
line of sight engagements are perfectly feasible here. It was the
first successful joint ACTD that we know of in DoD.

ENHANCED SCENARIOS

(CHART 7) It addressed many of the integration issues that we
are going to have to get on with to bring this joint littoral warfare
to reality and will enable all of us to proceed with our development.
After these basic scenarios, we entered a 3-day period of enhanced
scenarios, exploring other aspects of defense using additional serv-
ices, including two additional Aegis cruisers which sailed from the
East Coast, and a U.S. Customs Service P-3 aircraft with E-2C
radar on it to examine advanced tactics joint operations in the lit-
toral. This prepared us for the IOC — Initial Operational Capability
of the cooperative engagement battle group late this year.

(CHART 8) These enhanced scenarios were conducted in a tac-
tical environment in the context of a developing theater with Naval
forces first to arrive on the scene, projection of power ashore and
joint littoral operations with all services involved, including an at-
tempted tactical ballistic missile exercise.

(CHART 9) The participants were USS LAKE ERIE, the Moun-
tain Top surrogate at Kokee site, the Patriot battery, but in addi-
tion now we have the U.S. Customs Service P-3, the Air Force Air-
borne Warning and Control System, AWACS test aircraft, the 2

114

cruisers from the East Coast and a Hawk battery now partici-
pating.

(CHART 10) This is the first of a couple of scenarios. In this par-
ticular case you see the familiar setup here with the target
launched and proceeding outbound. As the target turns inbound
and drops below the radar horizon, all units lost track on him. In
this case, those targets were protected by standoff jammers as they
flew inbound against the two cruisers. These two drones were at-
tacking these two cruisers here.

Captain Balisle. In the actual tape you see that geometry laid
out. Here is ANZIO and CAPE ST. GEORGE. This is the first
cruise missile starting. Neither ANZIO nor CAPE ST. GEORGE
can see any of these missile targets with their own radars. LAKE
ERIE is providing data to ANZIO. The line indicates the engage-
ment assigned against that target. We now see the target break the
horizon here. It is assigned to both ships so either could engage.

The second target inbound likewise could be engaged by either
ship. The intention was for each ship to fire a missile at their re-
spective targets. CAPE ST. GEORGE had a temporary casualty to
a launcher. She notified ANZIO of this, ANZIO immediately flexed
to fire two missiles instead of one, one against each of the inbound
targets.

Neither CAPE ST. GEORGE nor ANZIO had the targets on their

radars throughout the process. The top missile was a with

a telemetry missile.

The bottom engagement was a miss distance against that

cruise missile target with a telemetry missile, demonstrating the
flexibility of CEC, but also today's air defense procedures which
would allow us to flex to a target being engaged by the single ship
instead of the two.

TRACKING AIRCRAFT

(CHART 11) Admiral Hood. In addition to missile firings, we
conducted some track and ID exercises. This is the same setup with
the three Aegis cruisers and the U.S. Customs Service P-3. These
lines connecting these units represent the connectivity of CEC.
Each unit is connected to each other unit in the net. We will focus
on the video on this set of targets down here.

Captain Balisle. All of these aircraft were being tracked for var-
ious test purposes. You see the two groups coming together here.
This group is a section of friendly CAP — Combat Air Patrol air-
craft, two fighters. This group, a section of two opposing fighter air-
craft engaging in the traditional dogfight. As these contacts come
together, they merge so closely that no sensor would be able to dis-
tinguish one aircraft from another, requiring us to reidentify these
aircraft.

This would require us to reidentify these aircraft in the middle
of a fairly heated tactical situation. As you see here, the dotted
lines on each of these aircraft represent the composite track that
all of these sensors netted together through CEC have constructed,
so we know which aircraft, where each is throughout the process.

As I look forward a few seconds in time, you will see the real ef-
fect of this as these aircraft engage in a very intricate air battle
as they are maneuvering about in close quarters. We have tracked

115

each aircraft with cooperative engagement through the entire proc-
ess so that as each exits we know exactly which aircraft is exiting
at what point in time, eliminating the threats of a blue-on-blue en-
gagement and allowing us to be able to synergisticly use missiles
and aircraft.

This is one tracking event. There were several during this Moun-
tain Top enhanced scenario phase, all with the same results.

HAWK ENGAGEMENT

(CHART 12) Admiral Hood. For the power projection portion of
these enhanced scenarios, the Hawk battery conducted missile
firings also. The objective here was to have the cooperative engage-
ment ships, the two Aegis cruisers, detect the target and pass the
composite track back through the Mountain Top and down to the
Hawk battery to conduct the firings. We utilized three different
methods, one of which is an aerostat relay to get that composite
track data into the Hawk battery.

Captain Balisle. This is the actual video of that Hawk engage-
ment where we relay to the illuminator through the aerostat. The
Hawk battery is here. This is the target coming in.

It is a BQM drone towing a towed body which gives us the effects
of a composition two-cruise-missile attack. This is the vertical dis-
play. There is a line here going across which is the altitude of the
cruise missile as it is coming in.

You will see the Hawk missile fired in just a second. This Hawk
missile has just been fired based on an aegis-provided tract via the
network the Admiral described. You see the missile going up to-
ward the target. It is presently headed toward the engagement of
the towed body.

A second Hawk missile just fired now to engage the second cruise
missile or the BQM target. Both missiles were successful engage-
ments with direct hits on the target. So giving us the ability to ex-
tend the Naval footprint from Aegis ships at sea to an overland po-
sition, protection of airfields, the type of thing we would have to
do to get our forces ashore by expanding the footprint inland using
the Aegis ships to provide the cueing.

SHIP self-defense

(CHART 13) Admiral Hood. Finally, this is the familiar setup,
the two firing ships located here. The outbound drones make their
inbound turn and go below the radar horizon. These are self-
screening jammers on board the two inbound drones.

Captain Balisle. Neither ANZIO nor CAPE ST. GEORGE can
see these targets with their own radars. The first target breaks the
LAKE ERIE radar horizon and is immediately assigned to CAPE
ST. GEORGE to engage. The second target breaks the horizon and
is assigned to ANZIO. Something happens. Each of the ships has
launched a missile at their respective target almost simulta-
neously. Then, if you can see this line that just appeared here, this
was unexpected but is quite revealing of the capabilities of coopera-
tive engagement.

Though ANZIO could not see her target through the jamming,
the geometry developed where she could see CAPE ST. GEORGE'S
target. The cooperative system made the assessment that at that

116

moment in time ANZIO was a better data provider and shifted con-
trol to ANZIO. So we have CAPE ST. GEORGE engaging a target
with data from ANZIO; we have ANZIO engaging a target with
data from LAKE ERIE and neither engaged ship can see the target
they are shooting at.

We find a with a telemetry missile on this target and a

■ distance on the other target and that transfer of control oc-
curred while both missiles were in terminal flight with no disrup-
tion to either missile.

AWACS PARTICIPATION

(CHART 14) Admiral Hood. You have seen a track on several of
these with the word AWACS on it. General Fogleman has com-
mitted to testing a CEC unit in an AWACS aircraft. This aircraft
did not have CEC. We did not have time to get it in there. They
both participated via JTIDS and collected a wealth of data that
they are in the process of examining and reducing to plan how they
are going to participate in this.

SUMMARY

(CHART 15) I can summarize in the engagement area. We con-
ducted the first ever beyond the horizon engagement of a cruise
missile from a ship. We established engagement with a Patriot bat-
tery and CEC supported this extension of the battle space ashore
from Naval forces by passing that CEC composition track data to
a Hawk battery.

(CHART 16) In the area of joint operations, we have to develop
tactics along with the technology. What we did was explore and de-
velop several advanced tactics in conjunction with the conduct of
that exercise. This was the first tactically representative JTIDS net
with all the services participating.

We used the aerostat in this case as a relay and a platform for
some sensor experiments, but it does show the flexibility inherent
in a variety of aircraft platforms. Perhaps most important, it col-
lected a wealth of data from all these other units to support the
integration and interoperability studies that this Committee has
supported, certainly over the last couple of years.

(CHART 17) We have rooms full of data, as you can imagine. We
are still poring over it, but I think some initial conclusions are fair-
ly obvious. The battle space is significantly expanded in the littoral
and the extension over land from Naval forces ashore, I think, is
demonstrated as a fully feasible approach. The approach with
JTIDS and CEC architecture operating together is certainly fea-
sible, utilizing fully integrated airborne sensors.

CEC continues to exceed our expectations, just as we found in
the 1994 exercises off Puerto Rico. This exercise provides us the
fire control net, I believe, that will serve as the foundation for our
future theater air defense command and control network. That
completes the Mountain Top portion of the briefing.

Captain Balisle will continue with the missile firings.

117

THEATER MISSILE DEFENSE

Mr. Douglass. If I could pause for a minute and put this in per-
spective, I think it was 14 or 15 years ago I sat in this room as
a young Lieutenant Colonel sitting here behind the Under Sec-
retary of Defense for Research and Engineering when this Com-
mittee began to discuss the potential for ballistic missile defense.

As all of us will recall, we were all a lot younger 15 years ago,
and we were in the height of the Cold War with the Soviet Union.
What we began to see 15 years ago was the potential for American
technology to swing the pendulum, as the pendulum of warfare has
swung throughout history, from a warfare situation dominated by
the offensive, to a warfare situation where defense could play a sig-
nificant role.

Around the time of World War I, defense became preeminent.
That is why we ended up with trench warfare in Europe. World
War II broke that paradigm and offense become predominant
again.

There have been certain weapons that we felt were almost impos-
sible to defend against. Fifteen years ago, when we launched the
Strategic Defense Initiative, it was a vision for the future. You are
beginning to see the technologies that we have invested in during
those 14 years. We are on the verge of being able to reap the bene-
fits of those events. It has been the sustained support of this Com-
mittee and the other Defense Committees in Congress that have al-
lowed us to get to this point. I think when you see a demonstration
like this, the good news is that the Navy is well postured.

We have put all of the various pieces of the puzzle far enough
along that we are on the verge now of being able to solve the prob-
lem today. We are showing you cruise missile defense. You will, I
am sure, later in your hearing cycle get briefings on the Navy
Upper Tier and Lower Tier theater ballistic missile defense.

There are areas of technology where we are now able to move to-
ward a missile defense stance. You will see next an example of
what we can do with an older piece of our technology to track in-
coming tactical ballistic missiles.

The next step will be what can you do about it? We want to be
able to shoot them down, and that is where the Upper and Lower
Tier programs come into play.

SHIP SELF-DEFENSE

Mr. Young. Before we get to that phase of the briefing, Mr. Mur-
tha had questions about Mountain Top.

Mr. MURTHA. I am confused because I remember what you are
talking about. Dave Kilian on our staff gives the Members the cred-
it, but he is the guy that pushed this cruise missile defense. The
Navy wasn't up front with this. They spent a billion dollars and
then they sat down.

You are taking all the credit, Mr. Secretary, but this Committee
pushed it hard. I am not satisfied that we have made the type of
progress that you are talking about. I know it is a difficult problem.
But what number of ships out of the 200 ships we have in the
Navy, what number would be protected against cruise missiles

118

Mr. Douglass. If I sounded like I was trying to take the credit,
I failed in communicating to you. I was pointing out the fact that
I was here 15 years ago when this dream began, I was trying to
give the credit to the Committee.

You are right, there have been times in which the war-fighters
have been slow to see the realization of what can be done with
technology. What I was trying to communicate to you, sir, is that
we have gotten the message and are on the verge of being able to
move forward. You have allowed that to happen.

I can tell you that the leadership of your Navy understands the
potential of this technology. We are committed to move in this di-
rection. The equipment that you saw on top of the mountain is
heavy and big. The next step is to miniaturize that equipment so
we can get it into an airborne platform and put it up over our
ships.

We need to forge ahead on the CEC program so all our ships and
planes can talk to each other and quickly pass the electronic pic-
ture that they can see of incoming targets so everybody can benefit
from it. By using data fusion, we will have a much better picture.
We are not there yet and wouldn't be where we are were it not for
the support of this Committee.

Mr. MuRTHA. So we are talking about a variety of systems

using Aegis in particular, to protect a fleet of ships?

Mr. Douglass. Yes sir, to be able to project this information
ashore and pull information from those platforms.

Mr. MuRTHA. Single ships are still vulnerable .

Mr. Douglass. If a ship is by itself and there is no airplane over-
head to pass him a picture and no other ships around to get a pic-
ture, they are on their own. CEC doesn't do you any good. You
have to use on-board systems.

Mr. MuRTHA. The less sophisticated cruise missile that these for-
eign countries have?

Admiral LoPEZ. All systems can and that is the problem.

But just

Mr. MuRTHA. A warhead of 500 pounds?

Admiral LoPEZ. Yes, sir.

Mr. MuRTHA. It tracks right into the control system of the ship?

Admiral Lopez. Yes, sir, if it has a home on jam or something
like that, sure.

Mr. MuRTHA. so short term, our single ships are we are

overcoming the vulnerability to a fleet of ships, but how long before
we overcome that?

Mr. Douglass. CEC is maturing now.

Captain Balisle. The IOC is 1996 for this system. The OPEVAL
the Operation Evaluation, which will include integration of the air-
craft with the ships, will be in 1998. We have a production program
funded and in place that will start putting CEC on board aircraft
and ships at that time.

The EISENHOWER Battle Group is at sea today with CEC on
board. It is the first prototype system, and we are using them in
a tactical environment today to gain experience with the system
up-front.

Mr. MuRTHA. That is over the horizon ?

119

Captain Balisle. With CEC we will be able to handle a very so-
phisticated target.

Mr. Douglass. The exact degree of is sensitive. I would

like to add, though, again with the support of this Committee, our
individual ships when they are by themselves, can't take advantage
of CEC, but they are not totally defenseless.

This Committee has helped us get various self defense systems
aboard our ships that do give them capability. That capability is
pretty robust against many threats. It is challenging against the
threats. There is the Rolling Airframe Missile, the extended-
capability NATO Sea Sparrow. These do provide our ships a signifi-
cant defense capability when they are off by themselves.

Mr. MuRTHA. You got to see them far enough in advance to bring
your weapon

Mr. Douglas. The further out you can see them, the better you
can cue your defensive systems into a sector where they can get on
them quick and work it.

Admiral LOPEZ. The beauty of the system is it gives us total inte-
gration, sea, air, land. As Phil pointed out, the two ships that shot
couldn't even see the missile. So we have a couple of systems that
we are working on.

We need to give you an off-line brief with the E-2 and the
AWACS together. That will give us the over-the-horizon, view. We
have to change the way we do business in the Navy and the Ma-
rine Corpos to have Aegis with out amphibs and to have systems
that can protect each other, that have CEC and the self-protection
system.

We are working that as a change in our doctrine as to the way
we operate. We see CEC as the breakthrough in order to not only
be able to see beyond the horizon but to shoot without seeing. We

haven't changed anything and yet we are getting that are

phenomenal. We have changed nothing except introducing CEC.

Mr. Douglass. Passing our targeting and cuing information
around so we can use it at the most effective moment.

Mr. MuRTHA. Mr. Kilian is very complimentary.

MEMBER ballistic MISSILE DEFENSE
CHINESE BALLISTIC MISSILES

Mr. Douglass. The next briefing involves this situation we have
seen in the news. We have heard about Chinese missile tests.
(CHART 18)

Captain Balisle. As you know, sir, China set two closure areas
recently, one off Kao-hsiung approximately 25 miles off the cost,
the other off Taipei. When this occurred, .

The Navy made the decision to try to get an Aegis ship into posi-
tion. We had one Aegis cruiser about a day away, the USS BUNK-
ER HILL. She is one of our older cruisers. She has the SPY 1
TBM — Theater Ballistic Missile — tracking patch that we had given
all of the Aegis ships on the contingency that we might get an op-
portunity to do tracking.

Her crew was a fully operational crew trained in air defense but
had done no prior ballistic missile exercises and she had no tech-
nical assistance on board. We gave her the word to position herself

120

and she went to the southern closure area. Right here at the south-
em boundary she took position just before the closure areas went
hot. Ten minutes after they had gone hot the Chinese fired the first
M-9 missile. That was track No. 1 that came from this location.

BUNKER HILL detected that missile in the ascent phase at

nautical miles. The maximum range of a SPY 1 radar is

: miles against air breathing targets. She tracked that missile

through its entire flight, she saw it; heard the impact when it hit
the water on her sonar and positioned it in that manner. She
tracked the here and as well.

The second missile was fired shortly after that. It was launched
towards the foreign closure area. She detected this missile at

nautical miles, tracked it throughout its flight until it went

behind the mountain region of Taiwan, and she lost track at

feet as it went below the mountains.

The third missile launched 7 March. She detected at nau-
tical miles, tracked it throughout its flight, had visual on it and
heard it hit the water on sonar.

The fourth missile was fired 12 March. BUNKER HILL had
repositioned to the west and that fourth track went to the southern
closure area reminiscent of two of the earlier tracks. She detected

that track at nautical miles and tracked the missile

throughout flight. The end result of her tracking was that she had
tracked all four missiles throughout their flight, and had de-
tections on .

THEATER DEFENSE WEAPONS

From a detection capability that is what we were able to do with
the older variants of the SPY radar. We are working go get an en-
gagement capability into the fleet as soon as we can. We are very
new in that development.

First, trying to field the Area system as soon as we can and then
extend that to a theater-wide capability, even though we are new
in that development we can project generically what the capability
of those systems might bring to these actual trajectories.

The dotted line is the type of footprints that the area system
from BUNKER HILL in that position would be able to defend. If
we moved her closer to the coast that footprint could overlay the
mainland of Taiwan.

The dotted line is more reminiscent of what we would have with
a theater-wide or Upper Tier capability. If you lay them on the
tracks of the missiles, the original band would be the engagement
window of an Upper Tier LEAP-tjqje or Lightweight
Extoatmospheric Projectile system. The next band would be the
second engagement and then you would have an area system en-
gagement here.

From this position you would have had the same opportunity

here for an Upper Tier engagement and a here in the flight

of this missile as it goes from ascent to descent. So while these are
projected capabilities at the moment for systems not yet fielded, it
does give a feel at least, for what a Naval force could do against
these kinds of threats. Our choice tactically would be to position
one ship here for the area coverage, another here for the area cov-
erage and then those two ships working in concert would give de-

121

fense and depth against all of these targets with an overlapping en-
velope of coverage.

WEAPON DEVELOPMENT LIMITATION

Mr. Livingston. Excuse me, Mr. Chairman, if I might?

If politics, the Anti-Ballistic Missile — ABM Treaty and funding
were no obstacle, when is the earliest day we could field such a sys-
tem?

Mr. Douglas. That is a tough question, sir. We are on track
right now for the fielding of our Lower Tier system, and I don't
have all these dates memorized. I have only been over there 45
days.

The IOC on Lower Tier is fiscal year 2001. Upper Tier is a more
difficult question, sir, because there are different views about how
mature the technology is, especially on the kill vehicle. We feel that
if that program didn't have some of the restraints that you have
mentioned that we could get an IOC.

Mr. Livingston. I am listening to every word you say. If you will
bear with me a second, you are not listening to every word I said.
I said if politics and money and the ABM Treaty were not at issue,
what is the earliest date — I will insert a new word, you could tech-
nologically develop such a system?

From everything I have heard you say, you have included the
premise that politics is involved and presumably ABM Treaty is in-
volved. What is the technical capability? And if we are just looking
at technical capability? And if we are just looking at technical ca-
pability, what is the earliest date the system could be deployed?

Mr. Douglass. My point is there is a debate about the technical
issues. We think in the neighborhood of 2005, 2006, if the program
were robustly funded.

Mr. Livingston. That is an awful long time. I sat in a couple of
hearings like this maybe 2 years ago and I heard 1998.

Mr. Douglass. I have not been following this in as close prox-
imity as you have, but have been on the edge of it for 14 years.
I have heard many dates over a number of years. Given our best
estimate, we think that is a realistic date of what we could do.

Mr. Livingston. Is that taking into consideration the available
budget and current Administration instructions, or is that — if you
had all the money you needed to go everything to the wall right
now

Mr. Young. We will do that.

Mr. Douglass. If I had all the money in the world, I could accel-
erate the program. But I don't. All the money in the world is a lot
of money, sir.

Mr. Lewis. Mr. Chairman, could I briefly

UPPER TIER PROGRAMS

Mr. Young. I am liable to forget what I was going to ask.

Why did the Administration decide to cut back on the Upper Tier
and THAAD — Theater High Altitude Air Defense — programs, we
were notified of that just a couple of weeks ago.

Mr. Douglass. That decision was made in the Office of the Sec-
retary of Defense, sir, and it was based on their judgment of the
relative investment that they decided to make in this total tech-

122

nology effort and the relative maturity of the candidate systems of-
fered by the Army and the Navy. Those were the principal ingredi-
ents in their decision.

Mr. Young. I thought we had information presented to the Com-
mittee that THAAD was doing very well, that the testing there —
they were almost as excited about that as you are excited about
Mountain Top.

Was that a financial decision, was it determined that there was
not enough money? You make a very good case as to the impor-
tance of the Mountain Top, CEC, but a very good case For Upper
Tier.

Mr. Douglass. Yes, sir. Let me be as frank as I can be.

We are walking a narrow path here trying to fully inform the
Committee of things that we know in which you are interested. I
have an obligation to my President and to my Secretary of Defense
and to my Secretary of the Navy to stay within the bounds of the
Department's program. The decision that came out of the Office of
the Secretary of Defense on what to do in this area is related to
fiscal constraints. Dr. Kaminski personally got deeply involved in
assessing the relative technical maturity of the program.

We are more bullish on Upper Tier than Dr. Kaminski. He in-
vented stealth. He has been a personal friend of mine for 20 years.
I deeply respect his judgment on these things.

When the United States Navy is given direction to do this mis-
sion either by the Congress or by the President or by the Secretary
of Defense, we will do this as quickly as we can within the re-
sources given us. We are dedicated to this mission, we think this
is an important mission, but we have to accept direction. We have
bosses like everybody else sir.

Mr. Young. Let me recognize Mr. Lewis.

CHINESE BALLISTIC MISSILES

Mr. Lewis. The other day we had a very interesting discussion
with Admiral Prueher and General Luck. During that session we
asked some "what if questions. I would like to extend one of those
"what if questions to a not so "what if question.

It was suggested that the Chinese might be interested in testing
our own resolve relative to our commitments to a peaceful reunifi-
cation of China and thereby perhaps having to protect the people
on Taiwan. With that which is available, could we have detected
a M-9 being misfired in a way that would have caused it to hit
Tawain?

Mr. Douglass. You hit me cold, so I will have to give you my
off-the-cuff assessment.

Mr. Lewis. Were we assigned specifically to see if there was such
a misfire?

Mr. Douglass. Not to my knowledge, sir.

Mr. Lewis. If not, why not?

Mr. Douglass. I can't answer that question. I don't know the an-
swer to it. I know we had an opportunity, one of our older ships
was in the vicinity. You know they have to announce under inter-
national law they are going to close it, so we knew they were going
to shoot into that area. We thought it was prudent for us to drive
our ship there and collect the data that we could. We have an

123

international right to do that. The reason we are explaining this
to you today is because we know it is of interest to the Members
and we wanted to tell you what we collected with a rather old piece
of our equipment.

Mr. Lewis. Mr. Secretary, then maybe you could respond, have
your people respond in a different way. Maybe we are testing our
resolve by way of these questions. Were there specific instructions
to try to detect a misfire, and I think you could come back with an
answer for the record.

Mr. Douglass. To the best of my knowledge, no.

Mr. Lewis. If not, I really wonder because we should have been.
If we did have those instructions, would we have had the capability
to take out that missile that was so misfired, and were there in-
structions to do so if it were so misfired?

Mr. Douglass. Misfire? Sir, let me replay this for you because
it is a sensitive question. You mean if the ship commander were
there and he suddenly realized that this missile was going to im-
pact on Tawain was he specifically charged with any responsibility
of notifying anybody or shooting at it? That is your question?

Mr. Lewis. Not so much notifying anybody but rather taking it
out. We are talking about a potential war here.

Admiral Lopez. That is the point. We don't have the system yet,
Lower Tier or Upper Tier. As the Secretary has addressed, we will
get there.

Mr. Douglass. I don't see how he could have taken it out.
Whether he was supposed to notify somebody and say get your
head down, something is coming, I can't answer that.

UPPER TIER PROGRAMS

Mr. Livingston. Some of us are concerned about this, I have to
tell you. This is a real science. About 1982, Orson Welles cut a
tape, it was an hour to hour-and-a-half long tape, summarizing the
predictions of Nostradamus. In the 15th Century Nostradamus said
a guy in a blue hat is going to drop something on New York. Our
projections were that we could have a system deployed by 1997 and
now they are pushed off to 2005, and that concerns me. I don't
know if Nostradamus is science or not or if he is right. I don't want
to find out.

If we have the capability of developing a system immediately, it
is in the interest of any American citizen in or out of the adminis-
tration to delay procurement of these systems? Navy Upper Tier,
in my opinion, today still remains the most viable system that I
have heard about and the most quickly developed. We are capable
of tracking even with old equipment anything that they can throw
at us. It is just a matter of developing the capacity to shoot it
down.

A month ago the Air Force had four shots from a laser in the
desert, apparently; it was in the newspaper. They successfully shot
the thing down. Now, I don't understand if we are able to do that,
why we can't develop a system next year let alone by 2003. I don't
understand the Administration's policy of continuing to put it off
when just last year witnesses came before this Committee and said
that we could actually have a system operational by 1999, and an
IOC by 2001, and now you are telling me 2005, 2006.

124

I am not picking on you. You are new on the job, we love to have
you, are glad you are here. I know you are carrying water. I think
it is senseless if it is a political decision rather than a decision
based on technology. We should be making the decision based on
technology and based on the need to defend American citizens all
around the globe against incoming missiles.

Mr. Douglass. Sir, the only thing that I could comment on as
to what you just said is that it is, in my judgment, not just a polit-
ical decision. It is a question of resources and technology. The good
news is technology is coming, sir; that is obviously what we are
here to tell you. There is mixed judgment on how soon we can have
it for a reasonable cost. That is the judgment at issue here.

Mr. LiviNGTON. If I may

Mr. Douglass. It is not purely political.

Mr. Livingston. I know, but when you start injecting the word
resources, when we are talking about the possibility of nuclear hol-
ocaust or biological holocaust or chemical holocaust or just plain
annihilation of a city or a ship or a battalion, then resources don't
matter.

Look, if we can have eight divisions in the Army and we can
have ships deployed all over the world, we can put two carriers in
the Taiwan Straits, a battalion of people in Bosnia, we can take
over the police force of Haiti, the fact is that it is ludicrous for us
to say we don't have the resources for this problem because this is
the paramount defense problem the United States faces today.

Resouces shouldn't matter. We are talking about $5 or $10 billion
max. Max, I guarantee you. I am Chairman of the Appropriations
Committee. We will get you the money. Deploy it as soon as pos-
sible.

Mr. HOBSON. I wasn't going to ask, but have you got the money?
If you got the money, would you do it?

Mr. Douglass. Sir, the question isn't would, it is could. We could
not deploy an Upper Tier system next year if we had a lot of
money.

Mr. HOBSON. How long?

Mr. Douglass. We don't have an answer for you, sir, if the
money were unconstrained. Right now our best estimate given our
estimate of what resources we think will be available is around
2005, 2006.

This issue does depend on resources and how much ultimately is
a decision that the Congress and the Administration have to come
to grips with. That is done above my pay grade. All I am. saying
to all of you here today, and I hope that you believe me, is that
when I am given the money, I am going to give you the best pro-
gram as soon as I can within the constraints that I am given.

I don't get to say how many dollars are available, sir. I just get
to try to make sense out of this and give you a program that is ef-
fective. I can tell you, if I had all the money in the world, I couldn't
give it to you next year.

Mr. Livingston. Think about what you could do if you had the
money and let's try to speed those dates up.

Thank you.

Mr. Young. This is a very important conversation that Mr. Liv-
ingston opened because these are the type of things that we are

125

concerned about, especially when we see the budget request that is
substantially below the amounts of money that we appropriated
last year.

We will probably be getting into this issue with you again in an
attempt to see what kind of money you are talking about that
would keep the program on course.

We understand from a technology standpoint, you couldn't field
the system next year, but every year that we delay getting started
on it, pushes the out-year IOC further out than any of us would
like to see, I am sure, including you. We will be talking with you
about the amounts of money required and missile defense of all
types is an important concern of every Member of this Committee.

We will terminate this part of the hearing. We will just pause
briefly while we open the doors and allow the general public to
come in for whatever seats are available.

Mr. Douglass. I will try to move very quickly through my pres-
entation, sir.

Mr. Young. We will give them a few minutes to fill up the seats
we have left.

Admiral LoPEZ. One comment on the last chart, if you recall,
there was nothing up North, if we had a ship there or a Patriot
battery they could have shot without ever seeing it if the ship or
battery had CEC. CEC is here and it is working.

Mr. Young. We agree with you on CEC, by the way. This Com-
mittee has been a very strong supporter of CEC.

Admiral LoPEZ. Yes, sir you have. Absolutely.

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Acquisition Hearing
introduction

Mr. Young. The Committee will come to order.

This afternoon in this open session, we will conduct a hearing on
Navy and Marine Corps Acquisition programs.

We are pleased to welcome Mr. John W. Douglass, the Assistant
Secretary of the Navy for Research, Development and Acquisition,
accompanied by Vice Admiral T. Joseph Lopez, United States
Navy, Deputy Chief of Naval Operations for Resources and Warfare
Requirements and Assessments, and Major General J. W. Oster,
Deputy Chief of Staff of the Marine Corps for Programs and Re-
sources.

It is a pleasure to have all of you here today. Admiral Lopez tes-
tified before the committee last year. Secretary Douglass and Gen-
eral Oster, we will place your biographies in the record.

To pick up on a subject that we ended in the classified part of
our hearing today, the Department of the Navy's fiscal year 1997
budget request is $22.8 billion for Navy and Marine Corps procure-
ment and Research and Development — $1.4 billion or about 6 per-
cent lower than the fiscal year 1996 appropriated amount.

The funding in the budget for Navy/Marine Corps modernization
provides for only 40 new aircraft, of which only 28 are combat air-
craft, and 4 combatant ships. These 40 aircraft are the smallest
Navy aircraft acquisition since 1938, and these 4 combatant ships
are the smallest ship acquisition since 1933.

I spoke to Secretary Dalton this morning and quoted to him a
statement by Admiral Owens, then Vice Chairman of the Joint
Chiefs of Staff, where he said that "based on our shipbuilding pro-
grams today that the Administration's current ship construction
plan results in a force structure that turns out to be less than 200
ships." He said, "in the long term we will not have a 300-plus ship
Navy."

We have a number of examples like that. We are concerned
about the Administration's budget request, which is substantially
lower than was actually appropriated for 1996.

You made an excellent case during the closed session about
something that we are seeing coming to fruition today that was
started 15 years ago. And my point is that if we don't start doing
what is necessary for 15 years from now, if we don't start that
today, 15 years from now those responsible for our national defense
are not going to have adequate assets. So we are concerned about
this.

We understand, as you pointed out, that is above your pay grade.
We understand that but we are going to talk a lot about this.

Mr. Murtha, do you have opening comments?

Mr. Murtha. No.

Mr. Young. Mr. Secretary, please proceed. Your prepared state-
ment will appear in the record and we would ask you to summarize
and proceed anyway that you would like.

[Clerk's note. — The charts referred to by Mr. Douglass are in-
cluded with his statement.]

142

Summary Statement of Secretary Douglass

Mr. Douglass. (CHART 1) Let me begin by saying we have the
same numbers you have here, sir. The first chart, shows the same
numbers you quoted about ships and airplanes. We hope that this
is the last year of the procurement decline.

I have served as a staff member in the Congress on the Senate
side. I understand the need to be forthright with the Congress and
to answer your questions as honestly and openly as I can, and I
am dedicated to doing that and will always try to do that. I have
to live within certain constraints and we all understand what those
are.

FISCAL YEAR 1997 BUDGET REQUEST

(CHART 2) This is a pie chart that we all have seen before. The
meaning of this chart is fairly clear, sir. If you look to the ball in
the upper left, you will notice from 1985 down to the present time,
the bill payer has been procurement. We were in the mid-30 per-
cent range of the Navy budget for procurement of new weapon sys-
tems. We are now down in the low 20 percent range.

The other important thing is that although, as you point out, the
budget for fiscal year 1997 is lower than the budget that you ap-
propriated for fiscal year 1996, the percentage mix is almost iden-
tical. We are trying to do our best to keep the proportional mix that
the Congress has directed us to do, sir. That is the point of this
chart.

ACQUISITION REFORM

(CHART 3) I would now like to talk briefly about acquisition re-
form. When I was a member of President Reagan's staff, I had the
honor of being President Reagan's personal representative to the
Packard Commission.

I might add, sir, that I am sorry to say I recently heard that
Dave Packard is ill. We all know what a great American he is and
what great service he has done to our country. If you could drop
him a line, he is getting up in age now and not doing very well,
I am sure he would appreciate it.

I was on that Commission. I have been in the forefront of acqui-
sition reform throughout my career.

As you know, I spent 28 years in the Air Force. I was the Direc-
tor of Acquisition Policy in the Air Force. I was one of the people
that got the Packard Commission started. One of the reasons why
I was probably hired for this job was to make sure we carry on that
tradition.

I have been a close friend of Dr. Perry and Dr. Kaminski over
the years. I can report to you that the United States Navy is doing
well in acquisition reform. They were well launched in their posi-
tions when I arrived, and we are going to keep the pressure on.

There are a couple of bullets on this chart that are very impor-
tant. One of them is Commercial-Off-The-Shelf technology. We
have been able to make dramatic strides by taking advantage of
Commercial-Off-The-Shelf technology in our Navy weapons systems
in recent years.

143

(CHART 4) If you show the next chart — I am leaving out some
important points here in the interest of time, but I just wanted to
show you a couple of items.

If you look at that example of the sonar system we call the SQQ-
89 sonar suite. A few years ago, we were paying $30 million a copy
for that sonar suite. The United States Navy has now got that cost
down to between $3 million and $5 million. We have been able to
do that through competition and adaption of Commercial-Off-The-
Shelf technology.

As you know, one of the technologies that allowed us to do some
of the things we have talked about in the classified session is the
explosion of capability in signal processing. We are trying to get
that commercial technology into Navy systems wherever we can.

Some of these other bullets are important for you to know about.

We won the first-ever DoD Acquisition Excellence Award for the
F/A-18 E/F program which is on track and under cost. I recently
approved the release of the request for proposals on the LPD 17
ship. We were able to have that ship go from over 1,000 military
specifications down to zero. This is a new way of doing business.
We are going to get teams of shipbuilders together to work on this
program. I will tell you a little bit more of what I am doing to stim-
ulate commercial shipbuilding, sir, because that is a key part of the
Navy's future.

AVIATION PROGRAMS

(CHART 5) Air programs. We have 12 F/A-18 E/F airplanes in
our budget this year. That program is on track and under cost. Our
ultimate goal is about a thousand of them to meet the Navy's re-
quirements.

We are pressing ahead with the V-22. The Marines, as you
know, are dedicated to this weapons system. General Krulak has
identified it as one of his top priorities.

Sir, I am spending a considerable amount of time making sure
this program stays on track. This is a complex weapons system.
Our acquisition profile extends over 27 years. We would like to find
some ways to shorten that time and get this bird cheaper. I will
be glad to answer questions on that.

The final bullet is the Joint Strike Fighter. We still call it JAST
on the chart. We need to fix the chart. It is now called the Joint
Strike Fighter.

The important thing that I want to stress to the Committee, sir,
is that we have to keep this program on schedule. The United
States Navy needs a new airplane at sea. This is our new airplane
after the F/A-18 E/F, which is our next generation aircraft. We
can't afford to let that schedule slip to the right. So that means we
have to keep the funding up and keep it on track. I am dedicated
to doing that.

Mr. Dicks. Did you say we are going to buy a thousand of those
airplanes?

Mr. Douglass. A thousand F/A-18 E/Fs is the inventory objec-
tive.

Mr. Dicks. At 12 a year, that would take 85 years under this
program.

Mr. Douglass. On the F/A-18 E/F, no, sir.

144

Mr. Dicks. Thirty a year?

Mr. Douglass. Twelve a year is the initial buy. We get up to 48
a year. God forbid we have to buy them at 12 a year. You are right.
You would be retired. We would all be retired.

Mr. Dicks. I would really be retired by that time.

SHIP ACQUISITION PROGRAMS

Mr. Douglass. (CHART 6) We would all be gone by that time.

Regarding ships, these are the key programs I would like to re-
port to the Committee.

First, as you know, last year we decided to split fund the
SEAWOLF. This year's budget contains the second increment of
funding for the SEAWOLF. When I first went to the Department,
one of the first things I looked at was the cost cap on the
SEAWOLF. We are very, very close to that cost cap. We can't af-
ford to make mistakes on this program, and I am watching it very
carefully.

One of the things I discovered is that the cost cap does not in-
clude costs which were spent years ago when the program was set
up. So there are some costs on the SEAWOLF outside the cap.
That issue may become something people talk about later. But
given the money we were required to stay within, we are maintain-
ing the cap; and we are going to deliver a superb ship.

I lived through some of the problems in the 1970s, and I was
bound and determined when that first SEAWOLF goes to sea she
is going to be a safe ship and she is going to have all the capabili-
ties that the United States Navy needs. I am not letting them take
anything off that ship to stay under the cap. We are going to de-
liver it under the cap, if I have anything to do with it.

New Attack Submarine. As you know, this has been a very con-
troversial program, with many differences between the House and
the Senate. Some Members feel very strongly one way or the other
about this. I was asked by the Conference Report in the Authoriza-
tion Act, to restructure this program or give the Congress a plan
for restructuring it. I have met that requirement.

I will brief the Secretary of Defense tomorrow on the Navy's
plans. I have already briefed Dr. Kaminski. We hope the Secretary
will be able to announce the plan to the Congress on schedule on
March 26, 1996. We hope that the plan that we deliver will meet
with the approval of the Congress. This has been a tough one to
reach consensus on the two Houses of Congress and between cer-
tain Members, but we are giving it our college try. We are going
to introduce competition into the program. I have a plan for intro-
ducing new technology into it which will make this the finest sub-
marine in the world and something we can all be proud of

On the DDG 51s, the issue here, sir, has been a stable program.
One of the first things I have done is to try to stabilize the program
so that we could get some efficiency out of it. We are proposing this
year to combine the fiscal years 1996-1997 buy so we can acquire
six ships in the two buys.

You may recall last year we were given enough money for two
DDGs and told to do the best we can to buy three. By combining
two years I can buy six. This saves $300 million. Sir, I have a plan
which I would like to submit to the Congress later which would

145

propose that we buy the next four years into the future on a stable
profile. If I am allowed to do that, I can save almost $1 billion.
That buys us back a ship.

These are the kinds of innovative acquisition techniques, sir, that
I think will help solve some of the problems that you pointed out
in your opening statement. I can't bring more money to the equa-
tion, but we can spend it more efficiently, and I am doing the best
I can. This is a good example, sir, of our trying to meet the Con-
gress' requirements and also provide a stable program that is the
best that we can deliver to our sailors at the minimum cost to the
taxpayers.

The DDG 51, of course, is the center of our surface fleet; and if
we are successful in this next block buy we will be near the end
of the program. I think we can declare this a really successful pro-
gram.

Next chart, please.

SHIP DEVELOPMENT PROGRAMS

(CHART 7) Here are a couple of exciting things we are doing
here that I hope that the Congress will look upon favorably. The
first is the Smart Ship Program. This is the invention of Admiral
Mike Boorda. He deserves credit for it. It is an idea that was bom
out of much dialogue between the Navy acquisition and the
warfighting communities.

The question here, sir, is identifying major costs over time. The
answer is the cost of operating our ships. If we can get the crew
size down using technology to do things such as damage control, we
can operate equipment with fewer crew, using automation, we can
save a lot of money in the operation of our ships. So the CNO wise-
ly set up this program, and we are pressing ahead with it.

We also have a new class of ships that we will be striking out
on with DARPA, the Defense Advanced Research Projects Agency.
It is the Arsenal Ship. This is going to be designed with cost as an
independent variable for this program. In other words, we are
going out to industry and say, this is how much money we have,
design us a ship that can do these things. That is the total price.
We will pick the best design that fits under that price.

We are going to look for crew manning below 50. We would like
to get down as low as 20, if we could. The Arsenal Ship would carry
between 500 and 1,000 missiles, which would give us a tremendous
strike capability in terms of crisis support to the fleet.

Possibly four or five follow-on ships are planned now; but that
will depend on what we are able to do with this first ship.

CVX is the future carrier. My dad, I am proud to say, sir, was
a Chief Petty Officer in the Navy. I was brought up a Navy brat.
My dad was a Naval Aviation Machinist Mate, so I grew up around
carriers as a kid and know a little about it.

If we get the CVX started now and we do this wisely, we will lay
the keel in 2006 and go to sea in 2013. The ship will be in our in-
ventory until 2065. She will carry over 100,000 sailors in her life.

Aircraft that will fly off" her deck will include the F/A-18 E/F,
JAST, son of JAST and grandson of JAST. So we have to design
the CVX with an open architecture. It has to be a carrier that can
be constantly improved, because her sister ships will most likely be

146

in the inventory to the end of the next century. That means the de-
sign decisions I made today will have to last a hundred years. That
is a pretty awesome responsibility, and we are starting down that
path this year.

SC-21 is our new surface combatant, the follow-on to the DDG
51. There are similar issues here. SC-21 will be the central ship
in the Navy's surface fleet in the future. We are starting the design
process this year.

Next chart, please.

MARINE CORPS PROGRAMS

(CHART 8) This lays out some of the priorities for our Marine
Corps team. As you know, the Secretary of the Navy has taken a
number of very important steps to bring the Marine Corps closer
into the Navy team. They have moved the Commandant into the
Pentagon. We are placing emphasis on their systems wherever we
can. These are some of their most important programs. The Ad-
vanced Amphibious Assault Vehicle is the Marines' number one
ground priority. I am making sure that it stays on schedule. It is
well-funded right now. It is in source selection.

The Light Weight 155 Howitzer is the new gun for the Marines.
This program is also in source selection. There are two inter-
national companies and one American company bidding on it. The
Army wants to join us and buy some at the tail end of the program,
if it works out, and some slight changes are made to it. That is a
success.

We have a good program for remanufacturing the Marine Corps'
primary vehicles, the 5-ton trucks, in cooperation with the Army.
We are going to save money on this, and we are dedicated to seeing
that through in an efficient way.

We are in a very interesting joint program involving Predator-
Short Range Assault Weapon. It is a tank killer for the Marine
Corps. As a matter of fact, if any of the Members want to look at
a Predator we have one in the back of the room. You can pick it
up, and we can tell you a little about it. In the interest of time,
I won't dwell on it. Suffice it to say, this is going to save money
over what we have in the inventory now. We hope it will make our
young Marines more effective tank killers in the future.

MINE AND UNDERSEA WARFARE PROGRAMS

(CHART 9) Moving on to Mine and Undersea Warfare, I get a
lot of questions on this area. I had many questions on this area in
the testimony before the Senate this morning.

As everyone knows, the Navy is moving from emphasis on blue
water warfare to warfighting in the littorals. This makes mine dis-
covery and mine clearing an ever-more-important element of our
program. We are doing a lot in this area. It is another area that
I am spending much of my time on.

ASW — ^Anti-Submarine Warfare fits into the same category. This
is another area where we are using technology to make some very
significant breakthroughs. We have listed on this chart some of the
key portions of that program.

147

Of course, one of the best things we can do in any anti-sub-
marine warfare is to make sure that we start the New Attack Sub-
marine properly.

MISSILE DEFENSE PROGRAMS

(CHART 10) I have one more chart before we open it up for ques-
tions.

We have spent, in the classified portion of this hearing, consider-
able amount of time talking about two of these systems. I won't go
into further detail unless you wish for me to, sir. These are our
centerpiece systems for providing defense both from cruise missiles
and theater ballistic missiles to our fleet and being able to project
that defense ashore. Notwithstanding some of the comments that
have been made, I hope I can convince you that, given whatever
resources I am given, I am going to make this one of my top prior-
ities, and deliver the best I can for the costs.

GLOBAL BROADCAST SERVICE

The last program is the Global Broadcast Service. I don't know
if you had a chance to look at this. This is another success story.

Basically, this system allows us to use little 24-inch antennas
like you see advertised on TV today that can get you 400 channels
of TV. We can put these on our ships. By modifying existing Navy
satellite contracts we can put transponders on planned satellites
that will allow us to significantly, by orders of magnitude, increase
the amount of information we can get out to the fleet.

We are already using this technology in Bosnia on a leased basis.
But the problem is commercial vendors do not beam information to
the middle of the ocean because nobody lives there and nobody
would buy the signal. So we have to provide that coverage. That
is what this program is for — deep ocean areas. We are real proud
of it because we will get significant capability into the fleet for a
fraction of the cost using other systems.

That is a quick summary. I apologize for being so fast, sir, but
I am trying to maximize the amount of time for questions that you
may have.

[The joint statement and charts of Secretary Douglass, Vice Ad-
miral Lopez and Major General Oster follows:]

148

50T FOR PUBLICATION UNTIL RELEA:>2D BY THE
HOUSE APPROPRIATIONS COMMITTEE
NATIONAL SECURITY SUBCOMMITTEE

STATEMENT OF

TEZ HONORABLE JOHN W. DOUGLASS

ASSISTANT SECRETARY OF THE NAVY

(RESEAEIH, DEVELOPMENT AND ACQUISITION)

AND

VICl ADMIRAL T. JOSEPH LOPEZ, USN

DEPTTY CHIEF OF NAVAL OPERATIONS

RESOURCES, VARFARE REQUIREMENTS AND ASSESSMENTS

AND

MAJOR 3ENERAL JEFFREY W. OSTER, USMC
DEPUTY CHIEF OF STAFF
PROGRAMS & RESOURCES

BEFORE THE

SUBCIMMITTEE ON NATIONAL SECURITY

OF THE

HOCSE APPROPRIATIONS COMMITTEE

FY 199* NAVY/MARINE CORPS ACQUISITION

MARCH 20, 1996

NOT FOR PUBLICATION INTIL RELEASED BY THE
HOUSE APPROPRIATIONS COMMITTEE
NATIONAL SECURITY SIHCOMMITTEE

149

HONORABLE JOHN W. DOUGLASS

ASSISTANT SECRETARY OF THE NAVY

(RESEARCH, DEVELOPMENT AND ACQUISITION)

The Honorable John W. Douglass was sworn
in as the Assistant Secretary of the Navy for
Research, Development and Acquisition on
November 1, 1995. As the Assistant Secretary
of the Navy for Research, Development and
Acquisition, Mr. Douglass is the Department's
Acquisition Executive responsible for all
research, development, and procurement of
defense systems satisfying the requirements
of the Navy and Marine Corps. He is also
responsible for all acquisition policy and
procedures within the Department.

Mr. Douglass has extensive acquisition experience within the
Congress, Department of Defense, and Executive Branch. His most
recent assignment was with the Senate Armed Services Committee
where he was Foreign Policy Advisor and Science and Technology
Advisor to Senator Sam Nunn. He also served as the lead minority
staff member. Subcommittee on Defense Acquisition and Technology,
responsible for over $15 billion in Technology Base Programs. He
was the Committee's minority coordinator for all codeword
programs, and minority staff member for Defense Conversion and
Technology Reinvestment Programs.

At the Department of Defense, Mr. Douglass served as the
Deputy, U.S. Military Representative to NATO; the Director of
Plans and Policy and thG Director of Science and Technology,
Office of the Secretary of the Air Force.

Mr. Douglass also served as the Special Assistant to the
Under Secretary of Defense for Acquisition. He managed all
Codeword Acquisition Programs and the codeword budget process for
the Secretary. He was also the Secretary's personal speechwriter
and managed the Secretary's liaison with Congress.

Within the Executive Branch, Mr. Douglass served as the
Director of National Security Programs for the White House. As
Director, he was responsible for formulating National Security
Policy on a broad range of National security issues, and was
former President Reagan's personal representative to the Packard
Commission on Acquisition Reform.

Mr. Douglass completed 28 years of Air Force service as a
Brigadier General. He is a nationally recognized expert in
systems acquisition with extensive experience as a contracting
officer, engineering officer, test and evaluation officer,
program control officer, and research director.

150

Mr. Douglass was born May 2, 1941, in Miami, Florida. He
received his undergraduate degree from the University of Florida
and advanced degrees from Texas Tech University and Fairleigh
Dickenson University, respectively. He has also done
postgraduate work at the Cornell University Center for
International Studies, where he was an Air Force Research Fellow
with the Peace Studies Program.

Mr. Douglass has three children, William Mayer, Laura Noel,
and Alexander Augustine. He and his wife, Susan, live in
Alexandria, Virginia.

Revised 03/05/96

151

Vice Admiral T. Joseph Lopez

Deputy Chief of Naval Operations
(Resources, Warfare Requirements and Assessments)

Vice Admiral Lopez was bom in Powellton, West
Virginia January 20, 1940. He entered the U.S. Navy in
September 1959 and was commissioned in December 1964.
His education includes a Bachelor of Arts (cum laude) in
International Relations and a master of Science in Personnel
Management. After commissioning, he served aboard USS
EUGENE A. GREENE (DD 71 1) and USS WALLACE L. LIND
(DD 703) and attended the U.S. Naval Destroyer School. In
1 969 he was assigned as Commanding Officer of River
Division ONE FIVE THREE in Vietnam, where one of his tasks
was commanding a joint U.S. and Vietnamese naval assault
into Cambodia in May 1970.

Vice Admiral Lopez completed his education at the
Naval Postgraduate School from August 1970 through June
1 973, was ordered to the Armed Forces Staff College, and
began a two year tour as Flag Secretary for Commander
Cruiser Destroyer Group EIGHT in 1974. In October 1977, he
was reassigned as Executive Officer of USS TRUETT (FF
1095) followed by duty at the Naval Military Personnel
Command as the Cruiser-Destroyer Atlantic Placement Officer
in March 1979. Vice Admiral Lopez was subsequently
assigned in June 1 980 as the Special Assistant for Navy Personnel to the Assistant Secretary of the
Navy (Manpower, Reserve Affairs, and Logistics). He assumed command of USS STUMP (DD 978)
in September 1982, completing a Persian Gulf deployment in 1983. He was assigned in November
1984 as Special Assistant to the Chief of Naval Personnel.

Vice Admiral Lopez commanded Destroyer Squadron THIRTY-TWO from February 1 987
through March 1988. In 1988 he served as Executive Assistant to the Chief of Naval
Personnel/Deputy Chief of Naval Operations and in August 1 988 was assigned as the Executive
Assistant to the Vice Chief of Naval Operations. Vice Admiral Lopez served from July 1 989
through July 1 990 as Deputy Director for Current Operations in the Office of the Joint Chiefs of
Staff and as the Senior Military Assistant to the Secretary of Defense from August 1 990 to June
1992. He was promoted to Vice Admiral in July 1992. Vice Admiral Lopez commanded the United
States Sixth Fleet and NATO's Striking and Support Forces Southern Europe from July 1992 to
December 1993. He assumed duties as Deputy Chief of Naval Operations (Resources, Warfare
Requirements & Assessments) in December 1993.

Vice Admiral Lopez wears the Defense Distinguished Service Medal, the Navy Distinguished
Service Medal, three Legions of Merit, the Bronze Star (with Combat "V"), two Meritorious Service
Medals, two Navy Commendations Medals (with Combat "V"), Navy Achievement Medal (with
Combat "V"), Combat Action Ribbon, Presidential Unit Citation and numerous other unit and
campaign awards.

Vice Admiral Lopez is married to the former Vivian Hall of Longacre, West Virginia. They
have a son, Tom, and a daughter, Dominique.

152

UNITED STATES MARINE CORPS

HEADQUARTERS MARINE CORPS, DIVISION OF PUBLIC AFEMRS
WASHINGTON, DC. 20380, (703) 614-4309

MAJOR GENERAL JEFFREY W. OSTER, USMC

Major General Jeffrey W. Osier is the Deputy Chief of Staff for Programs
and Resources, Headquarters Marine Corps, Washington, D.C.

General Oster was bom November 11, 1941 in Milwaukee, Wisconsin.
After graduation with a B.S. degree in geology from the University of
Wisconsin in 1963, he was commissioned a second lieutenant through the
Platoon Leaders Class Program. His professional military education
includes The Basic School (1964) and Amphibious Warfare School (1971)
both at Quantico, Va., and the National War College (1982), Washington,
D.C. He also holds an MBA degree from the University of Wisconsin
(1976).

Designated an infantry officer. General Oster has served at every operational

level in the Fleet Marine Force. Initially he was assigned as a platoon

commander with the 2d Battalion, 3d Marines which deployed to the

Republic of Vietnam in April 196S. Subsequent duties include: assignments

as a Shore Party Team Commander, Battalion Landing Team 3/8 (1966);

Executive Officer, 1st Battalion, 7th Marines (1971); S-3 of the 2d

Battalion, 7th Marines (1972); Regimental Executive Officer, 4th Marines,

3d Marine Division and concurrently as Assistant Camp Commander, Camp Schwab, Okinawa (1981); Regimental

Commander of the 7th Marines, 1st Marine Division (1987); and as the Assistant Division Commander, 3d Marine

Division/Commanding General, 9th Marine Expeditionary Brigade (1989).

Other command tours include assignments as the Commanding Officer, Marine Detachment, USS Enterprise (1968) and
as the Commander, Defense Electronics Supply Center, Defense Logistics Agency, Dayton, Ohio (1990).

General Oster has held the following principal staff assignments: Marine Corps White House Liaison Officer, Office
of the Secretary of the Navy (1967); Marine Officer Instructor, NROTC Unit, University of Wisconsin (1972);
Manpower Programs Officer, Manpower Plans and Policy Division, Headquarters Marine Corps, (1976); Program
Analyst and Program Review Coordinator, Office of the Assistant Secretary of Defense (Program Analysis & Evaluation)
(1979); Secretary of the General Staff, Office of the Chief of Suff, Headquarters Marine Corps (1983); Assistant Chief
of Staff G-3, 1st Marine Division (1986); and Assistant Deputy Chief of Staff for Manpower and Reserve Affairs
(Reserve Affairs), Headquarters Marine Corps (1992).

He assumed his current assignment on July 1, 1993.

General Oster's personal decorations include: the Defense Superior Service Medal with Oak Leaf Cluster; Legion of
Merit; the Meritorious Service Medal; Navy Achievement Medal; and the Combat Action Ribbon.

Major General Oster is married to the former Sherry Christine Holt of San Diego, California. They have two daughters,
Allison and Jennifer.

(Revised Sept 15, 1993 HQMC)

153

Mr. Chairman, distinguished members of the Subccir.iTiictee,

zhank you for this opportunity to appear before yo^ •: o discuss

-he Department of the Navy's fiscal year 1997 RDTS^i: _nd
Procurement budget request .

The events of the past year continue to emphasize the Navy's
and Marine Corps' key role in national security. Forward
deployed Naval forces were involved in over 15 major operations
during 1995- - operations that required immediate and decisive
Tiilitary responses from forward deployed forces in support of
fundamental national interests. From the USS THEODORE ROOSEVELT
;CVN 71), and USS AMERICA {CV 66) Battle Groups quick reaction
Tomahawk and air strikes against Bosnian-Serb aggression to the
daring rescue of Captain Scott O' Grady by the 24th Marine
expeditionary Unit (Special Operations Capable) , Naval forces
continue to fulfill a vital national security role for which they
are uniquely suited. Naval Carrier Battle Groups near Taiwan are
-he latest examples of how forward deployed, flexible, and mobile
aaval forces underscore our nations resolve and global interests.

However, with diminishing resources and steady or increasing
operational demands, the Department's greatest challenge is to
strike the right balance between meeting today's needs and those
jf the future. As the Department sheds its infrastructure in the
effort to "rightsize", actions during the period fiscal years
1994 through 1996 reflected priorities for funding near-term
readiness while the relatively high procurement rates of the
1980 's continued to deliver new and very capable systems. In
fiscal year 1997 and beyond, the trends reflect the beginning of
recapitalization of the Naval forces for the future.

As we begin again to invest in our platforms and weapon
systems, the Department continues our strong commitment to reform
zhe business side of acquisition. Two excellent examples of our
success are the F/A-18E/F, winner of the Department of Defense

154

Acquisition Excellence Award, and the SQQ-89 sonar suite, which
we have reduced from $30 million procurement cost to $5) million
by introducing manufacturing competition, reform in inilitary
specifications and standards, and commercial-off-the-shelf
■equipment .

The following provides more detailed information of our
more significant RDT&E, Aviation, Shipbuilding, Expeditionary
Forces, Mine and Undersea Warfare, C4I, and acquisition reform
programs. These programs reflect the priorities and requirements
established by the warf ighters-- the theater Commanders-in-Chief.

RESEARCH, DEVELOPMENT TEST AND EVALUATION (RDT&E)

Our Research, Development, Test & Evaluation (RDT&E)
programs are directly responsible for our status as the most
powerful and advanced Navy in the world. Some of the most
significant RDT&E projects include the programs that will ensure
our military superpower status well into the 21st Century. They
include: the V-22 Tiltrotor; F/A-18E/F Super Hornet; Joint Strike
Fighter; New Attack Submarine; Arsenal Ship; Tomahawk Baseline
Improvement Program (TBIP) ; Cooperative Engagement Capability
(CEC) ; and Joint Direct Attack Munitions (JDAM) /Joint Stand-Off
Weapon (JSOW) .

The Department of the Navy's RDT&E budget request for fiscal
year 1997 is $7.3 billion, about $1.0 billion less than fiscal
year 1996 due largely to the maturity of programs such as the
F/A-18E/F and the V-22. The fiscal year 1997 budget request is a
continuation of our policy of maintaining a relatively stable
RDT&E program.

The Department continues to place major emphasis on Science
and Technology-- the front end of the research, development, and
acquisition process. A continuing flow of new technology is the

155

cornerstone in protecting our future technological -uperiority
and in support of on-going fleet modernization effcics. The goal
of science and technology is to provide the Navy '■ i ' h more
affordable systems, improve current systems through appropriate
technology insertion, and offer the potential for revolutionary
technological "breakthroughs".

The Department of the Navy budget request for the integrated
Science and Technology program is $1.3 billion which is divided
between: Basic Research programs-- for basic scientific
discoveries; Applied Research programs-- for development of
emerging technologies; and Advanced Technology Development (ATD)
programs-- for developing specific technologies into Naval
programs. Current ATD initiatives include demonstration of a new
supersonic tactical missile, an advanced tactical undersea
acoustic communication system, and a new high capacity projectile
which will increase payload and extend the range of our five- inch
Naval Surface Fire Support gun being developed for the Extended
Range Guided Munition (ERGM) program.

It often takes 15 to 20 years of investment, some of it high
risk, across a broad spectrum of activities to transition
fundamental knowledge gained from basic research into a component
of a modern weapon system. Perhaps only 10% of the investment
will ultimately result in major fielded advances, but when they
occur, these breakthroughs pay warfighting dividends far in
excess of the total investment. Examples of successful Science
and Technology transitions into Naval systems include: Over-the-
Horizon-Radar; Towed Arrays; Environmental Acoustics; Inverse
Synthetic Aperture Radar (ISAR) ; and the Global Positioning
System (GPS) . Examples of emerging technologies that will have
significant war fighting impact include: High Temperature
Superconductivity; Neural Networks; Diamond Thin Films/Coatings;
Smart Structures; and Blood Substitutes.

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Our Manufacturing Technology (MANTECH) progran. is an
important element of our acquisition strategy to . \.,rove
productivity of the industrial base and make our w^^pcn systems
and platforms more affordable. The principal goal of the
Department of the Navy MANTECH programs is to reduce acquisition
costs by developing and utilizing manufacturing technology, cost
containment technology, and life -cycle support (ropv-sir)
technology. In order to make best use of this program, we have
established a MANTECH Steering Committee to tie MANTECH program
initiatives to specific acquisition requirements applicable to
the Navy ' s needs .

NAVAL AVIATION PROGRAMS

The Department of the Navy operates ten active USN carrier
air wings and three active Marine Corps (USMC) airwings. The
fiscal year 1997 Aircraft Procurement budget request of $5.9
billion totals 40 aircraft including 10 AV-8B Harriers
(remanufactured aircraft) , 12 F/A-18E/F Super Hornets, 4 V-22
Ospreys, 2 E-2C Hawkeyes, and 12 T-45 Goshawks. These 40
aircraft represent the smallest aircraft acquisition total since
1938, but are essential to our efforts to recapitalize our
forces .

Fiscal year 1997 marks a critical juncture in Naval aviation
with the initial procurement of two key weapon systems, the
F/A-18E/F and V-22. Each plays a central and dominant role in
the Navy and Marine Corps team's ability to project power from
our forward deployed Carrier and Amphibious Ready Groups . The
development programs for each of these aircraft are on track.

F/A-18E/F SUPER HORNET

The F/A-18E/F is the Navy's number one aviation program and
critical to the future of our carrier airwings. The FA-18E/F

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modernizes the Navy's tactical aviation iJirough the ^^.fordable
and low risk evolution of the F/A-18C/D. The fisc^.'. ^ear 1997
procurement request is $2.15 billion. Tj2 procuriru' .-. cf these
first Low Rate Initial Production (LRIP aircraft will begin the
orderly transition of the F-14 and F/A-1L\/B/C/D :iir i-ntory to
this improved strike fighter aircraft. l^mpared co the F-14 and
earlier model F-18s, the Super Hornet w:.ll immediately and
significantly increase our capability ir. every mi 3.'- ion area. It
provides greater range, greater payload flexibility, increased
capability to return to the carrier with unexpended ordnance, and
a new aerial refueling platform compatibility integral to the
carrier airwing. It also incorporates er^ianced survivability
features, and provides growth potential fir future technology.
This aircraft will make up the majority :f strike fighter assets
for decades, and with the Joint Strike F-rhter (JSF) aircraft,
continue to provide our nation with cred_ile power projection
capability from our forward deployed earner battle groups.

The Engineering and Manufacturing levelopment program is on
track, meeting all performance criteria, md within the
Congressionally mandated $4.88 billion cist cap. The first Super
Hornet flight was completed in November Li95 -- 29 days ahead of
schedule. The first two Super Hornets arrived at NAS Patuxent
River, Maryland, in February 1996 to begi^ flight test
operations .

Total planned procurement for the F A-18E/F is currently
1,000 aircraft. A Navy Program Review will be conducted this
spring to approve long-lead procurement f:r the F/A-IBE/F.

V-22 OSPREY

The V-22 Osprey is designed to replsie the Marine Corps
CH-46E and CH-53D as well as the Special :perations Command
TH-53A, MH-53J, MH-47D, MH-60G, MC-130E, FC-130, HC-130E, and

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HH-60H. The MV-ZI is the Department's highest acq^:.-, •' .i.
priority for Marine Corps aviation and critical u : 'ir
implementation of our Operational Maneuver from tie -a canr-apt.
The total fiscal j-^ar 1997 budget request is $1.13 billion, with
$558.7 million e=:rmarked for procurement of four ;f\' ' . s, and
$576.8 million frr continued RDT&E.

The acquisition of this medium lift tiltrotcr,
vertical/short t5.£aoff and landing (VSTOL) aircraft represents a
revolutionary leaz in our ability to project forces j:;x;m ever the
horizon toward ir:land objectives. The MV-22 will fly
significantly fanner and faster with a greater payload than our
aging fleet of tr.eiium lift CH-46 helicopters. Its ability to
carry 24 combat - 1 laded Marines at a cruising speed of 240 knots
is key to the exeration of maneuver warfare. This combat
multiplier nearly iriples the present day battlespace and will
give commanders lie tactical flexibility to respond, adapt to,
and defeat a wide range of threats. The MV-22 will give us the
ability to maint=m battlefield dominance well into the 21st
Century.

Low rate iniiial production will begin in fiscal year 1997
with an IOC of 21 II. Due to a $1.0 billion per year funding cap
(in fiscal year li94 dollars) , the current acquisition profile
for the MV-22 will complete the projected 425 aircraft
procurement in 2~ years. We hope to be able to accelerate this
acquisition in tii outyears if possible, and are examining the
use of multi-year procurement as a way of accelerating
procurement .

JOINT ADVANCED STxIKE TECHNOLOGY (JAST)

The Joint A—^nced Strike Technology (JAST) program is the
Department of Defenses focal point for defining future strike

159

aircraft and weapon systems for the Navy, Marine Corps, Air
Force, and our allies. The overall DoD fiscal year 1?97 ;judget
request for the JAST program is $583.7 million; the OBpsitxent ' s
share is $239.6 million. The program emphasizes af fordability --
reducing the life cycle cost of the follow-on Joxnt. Strike
Fighter (JSF) development and production programs. The JAST
program merges fully validated and affordable joint operational
requirements with demonstrated cost leveraging technologies and
flying concept demonstration aircraft to lower risks and costs
prior to entering E&MD of the JSF in fiscal year 2001.

JAST is laying the foundation for an affordable family of
strike aircraft which meet or exceed individual Services
requirements. Initial delivery of operational JSF aircraft
variants are anticipated circa 2008. Maintaining the JAST
schedule is vital to the future of Navy/Marine Corps aviation.
As directed by Congress, DARPA's Advanced Short Takeoff /Vertical
Landing concept has been fully integrated into the JAST program.

SHIPBUILDING PROGRAMS

The size of the deployable Battle Force continues to decline
to between 330 and 346 ships by fiscal year 2001. The range
reflects uncertainty over the number of active surface combatants
in service at the end of the FYDP, as described below. The
budget request provides for a deployable active Battle Force of
33 9 ships by the end of fiscal year 1997. This number is below
the Bottom-Up-Review goal of 346. However, when counting Reserve
ships, the end of fiscal year 1997 ship count becomes 357. The
Department continues to review retaining additional frigates to
meet requirements pending delivery of new construction ships.
There are nine ships joining the Battle Force in fiscal year
1997, seven new constructions and two conversions. The seven new
ships entering the fleet include five Aegis ARLEIGH BURKE Class
guided missile destroyers (DDG 51) , one amphibious assault ship

160

(LHD) , and one TRIDENT submarine (SSBN) . The conversions are two
Auxiliary Ammunition ships (T -AE) . The addition of these units
will be offset by the decommissioning of 11 ships m fiscal year
1997. The total fiscal year 1997 budget request for Shipbuilding
& Conversion (SCN) is $4.9 billion for the acquisition of four
ARLEIGH BURKE class guided missile destroyers (DDG-51) and the
conversion of two additional ammunition ships (AE) . The budget
also includes funding for SSN 23, advance procurement funds for
NSSN, and advanced procurement funds for a comprehensive
refueling overhaul for CVN-68. In addition, construction of two
Large Medium Speed Roll-on Roll-off ships (LMSRs) is funded in
the National Defense Sealift Fund. The four new and two
conversion ship procurement in the fiscal year 1997 SCN budget
request represents the Navy's smallest ship acquisition total
since 1933, but is consistent with the minimum procurement
required for our recapitalization plan.

ARLEIGH BURKE (DDG-51) DESTROYER

The latest version of the ARLEIGH BURKE (DDG 51) Class
destroyer -- the Flight IIA -- enhances this multi-mission
surface combatant with state-of-the-art technologies. The Flight
IIA ships carry improved air and self defense capabilities,
increased capacity for vertical launched Tomahawk land attack
cruise missiles, and significantly improved damage control
capabilities. To respond to littoral warfighting requirements,
we are also incorporating an organic LAMPS MKIII capability and a
dual helicopter hangar. The first DDG 51 Flight IIA ship
contract was awarded in fiscal year 1994 .

The fiscal year 1997 budget request includes $3.4 billion
for four DDG 51 Class destroyers. The shipbuilding program in
the Future Years Defense Program procures an average of slightly
less than three DDG 51 's per year. This average will sustain the
minimum force levels required by current guidance and will help

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sustain the surface combatant industrial base.

Four DDG-51 Flight II ships will be delivered .. 1996, each
within budget and on schedule. The current DDG-51 program totals
57 ships.

SEAWOIiF (SSN 21) CLASS SUBMARINE

The SEAWOLF (SSN 21) Class submarine is the most
sophisticated in the world. It is designed to operate
autonomously against the world's most capable submarine and
surface threats. This impressive capability translates directly
into enhanced joint warfighting performance in high threat
littoral areas. These multi-mission combatants will set the
standard for submarine technology well into the next century. In
addition to their robust capabilities to counter enemy submarines
and surface shipping, SEAWOLF Class submarines are ideally suited
for strike, intelligence and warning, reconnaissance and
surveillance, and clandestine missions. These platforms are
capable of integrating seamlessly into a Battle Group
infrastructure or shifting rapidly into a land battle support
role. With an increased number of torpedo tubes and a 3 0%
increase in weapon magazine size over the 688 Class submarines,
the SEAWOLF is exceptionally capable of establishing and
maintaining battlespace dominance.

The SEAWOLF program totals three submarines and will meet
the Congressional cost cap requirement of $7,223 billion. SSN 21
is on track for delivery in the summer of 1996. SSN 22 is
greater than 50% complete, and construction of SSN 23 began in
December 1995. The fiscal year 1997 budget request of $699
million continues funding for the SSN 23 authorized in fiscal
year 1996. The SSN 23 submarine will bridge the gap in submarine
construction until the New Attack Submarine begins construction
in fiscal year 1998.

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NEW ATTACK SUBMARINE

The New Attack Submarine is the Navy's first submarine
designed to satisfy a broad spectrum of regional a^.S ....t.tcval
mission requirements while retaining blue-water undersf-a
battlespace dominance. With added emphasis on exptJi'.lonary
warfare in the littoral environment, it will surpa&y t.he
warfighting and peacetime performance of any current or projected
threat submarine. New Attack Submarine will have iriproved
electromagnetic stealth, sophisticated surveillance capabilities,
and special warfare enhancements. The ship will carry advance-
capability heavy-weight torpedoes; all configurations of land-
attack and anti-ship cruise missiles; and mines in the present
and planned inventory. New Attack Submarine also incorporates
Special Operations Forces capabilities including an integral
lock-out/lock- in chamber, and is designed to host swimmer
delivery vehicles. The torpedo room design will permit rapid
reconfiguration to host special operations personnel and their
equipment .

The New Attack Submarine design also focuses on
af fordability . In addition to the incorporation of leading edge
technology, the New Attack Submarine capitalizes on previous
submarine advances, incorporates commercial off-the-shelf
technologies, introduces simplified, revolutionary design
techniques, and utilizes an enhanced modular construction
approach that will result in significant cost advantages.

While we continue to refine the cost estimates for the New
Attack Submarine program, the overall objective continues to be
the delivery of an affordable yet highly capable platform. Our
fiscal year 1997 budget requests $296 million for the design and
component construction of the first New Attack Submarine in
fiscal year 1998. At the direction of Congress, the Future Years

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Defense Program reflects the procurement of four I't-. A tark
Submarines, two to be constructed by Electric Boat '.ri riser 1
years 1998 and 2000 and two to be constructed by '-o,' .orn Ne^s
Shipbuilding in fiscal years 1999 and 2001. This will ensure the
U.S. maintains a viable submarine construction ani i.cleai
component industrial base. However, as allowed by '^~ Z\scaJ
year 1996 Department of Defense Authorization Act, t^^e funding
required to finance construction of the fiscal yi?ari 19S9 and
2001 submarines, which would include $504 million in fiscal year
1997, is not included in the President's Budget request. As
directed, the Department of Defense will provide Congress with a
plan for development of the New Attack Submarine on March 26,
1996.

21st CENTURY SURFACE COMBATANT (SC 21)

The 21st Century Surface Combatant is the capstone and the
most critical element of our long-term sur£ ..e snip modernization
program. SC 21 will follow the DDG 51 as tlif- n. :^ janeration
combatant ship and will be designed to meet both open ocean and
expeditionary warfare requirements. In January 1995, the Defense
Acquisition Board approved our plan to do conceptual studies for
surface combatants to begin delivery in 2008. We have started
conceptual studies through the most comprehensive and thorough
Cost and Operation Effectiveness Analysis (COEA) to date. In
conducting the SC-21 analysis study, we will look at a broad
range of alternatives, including the possibility of a family of
ships, and make extensive use of modeling and simulation to
reduce cost while optimizing the final design. The fiscal year
1997 budget request includes $12 million for SC-21 Research and
Development .

CVX 78

CVX 78, the development effort of our future carrier, is

164

examining the future requirements for sea-based tacLi^i-i air
platforms and the aircraft carrier that will suppcir^.- c'-cse
platforms well into the 21st Century. The changd -if, i" > -^ has
demonstrated an increased reliance on the aircraft carrier, which
continues to prove itself the perfect instrument ioi oar Nation's
political and military needs. These national asscii 'j ternain
highly mobile, flexible, sustainable and ready tc prnvide combat
power and rapid crisis response through the world';-, littoral
regions. The fiscal year 1997 budget request contains $7.0
million for this important high priority program.

ARSENAL SHIP

The Arsenal Ship is a joint Navy/DARPA demonstration
project. It is conceived as an entirely new concept ship with
massive strike capability with over 500 vertical launch cells and
an integrated combat system featuring cooperative engagement
capability. Included in the goals of this demonstration project
is to keep life-cycle costs very low, with only about 50
crewmembers required to man the ship, in order to minimize
manpower costs. The Arsenal Ship is funded jointly by the Navy
and DARPA RDT&E.

OTHER SHIP PROGRAMS

The budget continues to provide robust funding for various
ship self-defense and battle group defense programs. Ship Self-
Defense System Mark I (SSDS MK-1) , AN/SLQ-32 advanced capability
and initial procurement of the all-up-round Standard Missile
Block IIIB variant, incorporating the Missile Homing Improvement
Program (MHIP) , are requested in fiscal 1997, as are continued
development and procurement of the Cooperative Engagement
Capability (CEO and the Advanced Integrated Electronic Warfare
Systems (AIEWS) . Improvements to the Rolling Airframe Missile
(RAM) , the Close In Weapons System (CIWS) , and the Evolved Sea

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Sparrow Missile (ESSM) , all integral to SSDS MK-1, o;';>±nu?..

Bottom line: our budget continues an all out effor.- • '.- protect

our Sailors and Marines serving aboard ships agai: ..: r.vs-;ile
attack.

The budget request includes procurement of l?.v Vomahawk
Block III TLAMC/D missiles, and remanufacturing fcT older Block
II missiles into the Block III configuration, as wc.lj. as research
and development funding which will allow Low Rate Initial
Production of the Block IV variant of Tomahawk in fiscal year
1998. Additionally, the Tomahawk Baseline Improvement Program
(TBIP) will provide a comprehensive baseline upgrade to improve
system flexibility and responsiveness.

To ensure strategic deterrence, the annual procurement rate
for the TRIDENT II (D-5) missile program continues to be 7
missiles per year across fiscal years 1997-1999 and 12 missiles
in fiscal years 2000 and 2001 pending final decisions on START
II. The MK-48 ADCAP torpedo performance upgrades began in fiscal
year 1995 and continue though the FYDP. The quantity budgeted
for procurement over the FYDP has been reduced from 1,386 to
1,110 kits, reflecting decreased requirements as a result of new
Non-Nuclear Ordnance Requirements.

EXPEDITIOKARY FORCES PROGRAMS

The FY 1997 budget request continues to support the
Operational Maneuver From the Sea concept with continued
modernization and recapitalization of the Marine Corps combat
forces. Marine Corps programs are budgeted under the Research
and Development and the Procurement Marine Corps appropriations.
Marine Corps highest priority programs are the MV-22 tiltrotor
aircraft, the Advanced Amphibious Assault Vehicle (AAAV) , the
Lightweight 155mm (LW155) Howitzer, Medium Tactical Vehicle

166

Remanufacture (MTVR) , and joint C4I connectivity. Tne V-22
begins production in FY 1997 under the Navy Aircr ai:*" trocurement
budget. The AAAV, currently in the Demonstratioi' era '/alidation
phase and funded under the Research and Development budget, is
not expected to begin production until after the turn of the
century. Both the MTVR and the LW155 are in Engineering and
Manufacturing Development .

ADVANCED AMPHIBIOUS ASSAULT VEHICLE (AAAV)

The Advanced Amphibious Assault Vehicle (AAAV) program is
the Marine Corps number one priority ground development program
in fiscal year 1997 and is considered the most critical ground
combat requirement within the Marine Corps. With its ability to
maintain high maneuverability, speed, and firepower during
waterborne assaults, the AAAV will dramatically improve our
forcible entry capability. For the first time, Marines will be
able to directly link maneuver of ships with the landing force
maneuver ashore, fully complementing the MV-22's capabilities and
allowing the full potential of Operational Maneuver From the Sea
to be realized. The Advanced Amphibious Assault Vehicle will
carry 18 combat equipped Marines at three times the water speed
and increased armored protection than the older Amphibious
Assault Vehicles which will soon be reaching the end of their
service life.

The fiscal year 1997 budget request of $40.1 million
reflects the first year of additional funding across the
development program in response to congressional interest in
accelerating the AAAV IOC to fiscal year 2006.

LIGHTWEIGHT 155 HOWITZER (LW155)

The Lightweight 155 Howitzer (LW155) program is second only

167

to the AAAV in terms of weapons development priority. ' c\ the
Marine Corps. The light weight design of the LWlbb ri.-tl'edlv
improves the tactical and strategic mobility of ar^. ^'^-Vy i. ■ 3.
The LW155 is a joint Army/Marine Corps acquisition progratr. wi_h
the Marine Corps as the lead service. Prototype e-i a^T.o t . -^'-n lave
been completed and, based on successes in the opev:itLC;vil
assessments, the program entered into the Engines rir.g and
Manufacturing Development phase in February 1996

The fiscal year 1997 budget request of $11.2 million
supports an IOC for the LW155 in 2002. The Request for Proposal
will be issued later this spring. Following a shoot-off later
this year, a design will be selected for completing development
and testing.

MEDIUM TACTICAL VEHICLE REMANUFACTURE (MTVR)

Funding is included in the fiscal year 1997 budget request
for the Medium Tactical Vehicle Remanufacture (MT." rogram.
This remanufacturing program extends the life ^nd increases the
capability of our aging 5-ton truck fleet. Tf'e MTVR an
exceptional acquisition for the Marine Corps ir. t. .- it will cost
30-40% less than a new vehicle replacement, yet will be the most
capable cargo truck in its class in the world; capable of
dramatically improved mobility in off-road conditions and
increased capacity to carry ammunition while towing 155mm
Howitzers. The MTVR program is managed by the Army and
harmonized with the future Army truck remanufacture program. Low
Rate Initial Production of the MTVR is planned in FY 1999.

OTHER EXPEDITIONARY FORCES PROGRAMS

The Predator Short Range Assault Weapon (SRAW) program will
provide a lightweight {<20 lbs) anti-tank weapon to replace the
much less capable AT-4 weapon. This program is a joint effort

168

with the Army for delivery of their Multi-purpose :M::\^Gja.
Munition. The Javelin, a joint-service, medium ran' ^ , a.itl-Lar.k
weapon, which will replace the Dragon system, begii ;aj::.-\L: C.^ips
procurement in fiscal year 1997.

In an effort to ensure connectivity and inter;.;. '^.'.ability en
the battlefield, several communications and electrD'iic.^
initiatives are under way. These include Manpack & ccndary
Imagery Dissemination Systems (SIDS) and the Intelligence
Analysis System (IAS). SIDS provides the capabilit.y to collect,
store, display and transmit imagery in near-real time. IAS
provides finished intelligence data to the commander in near- real
time.

Continuing the efforts to modernize and recapitalize, the
Marine Corps will complete procurement of several radio terminals
in fiscal year 1997. The Single Channel Ground Air Radio
(SINCGARS)- will be used as the primary communication means of
command and control and fire support on the battlefield. The
AN/PSC-5 Enhanced Manpack Terminal Radio will provide long range
single channel communications either line of sight or via
satellite. An upgrade to the AN/TPS-36 Radar and a modernization
to the AN/TPS-59 Radar will commence in fiscal year 1997. These
enhancements will provide increased sensitivity, improved
reliability, and reduced transportation requirements.

The Marine Corps is also pursuing several night vision
equipment initiatives to enhance warrior capability. The
Monocular Night Vision Device provides night observation
capability to small unit leaders and the Scout Sniper Night
Enhancement Device will replace the current sniper scope,
allowing for more accurate firing during day and night
operations.

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MINE AND UNDERSEA WARFARE

MINE WARFARE

The Navy is well on the way toward modemizsr L: n :: ^ur r'.ine
Countermeasures Forces, fulfilling a major deficie.icy _:.T.-.cif ied
during Operation Desert Storm. The Navy's Mine W.irfare ?lan has
been approved by the Chief of Naval Operations and f-.e ::^mandout
of the Marine Corps. It has been endorsed by the Chairr.ar. of Lhe
Joint Chiefs of Staff and is fully funded in the Presiii.-.z ' s
budget request. Top Mine Counter Measure (MCM) progra-; include
the OSPREY Class (MHC-51) coastal mine hunter ships. Thise ships
have a glass reinforced plastic hull for reduced acousri: and
magnetic signatures. This is a 12 ship program divided -etween
two shipbuilders: Intermarine USA of Savannah, Georgia ? ships);
and Avondale Industries of New Orleans, Louisiana (4 szjlzs) .
They are being delivered at a rate of two per year witi: "he final
unit scheduled for delivery in December 1998.

Additional MCM programs such as the Shallow Water i.5sault
Breaching System (SABRE) and the Distributed Explosive Technology
(DET) are being developed to defeat mines in the diffir"_t surf
zone. Organic mine reconnaissance capabilities are bei-iq
developed by accelerating the Remote Minehunting Syster program
for surface ships, and developing the Near Term Mine
Reconnaissance System and the Long Term Mine Reconnaisssrce
System for submarines utilizing Unmanned Underwater Vehizle (UUV)
technology. The Remote Minehunting System will be used .n
upcoming fleet exercises in order to examine the utilir7 of
future systems.

Finally, the 1996 conversion of USS INCHON to a m^re
countermeasures support ship, with the capability of surporting
our airborne and surface Mine Counter Measures (MCM) fcrres, will
give us the only rapid-deployment MCM capability in the vorld.

170

ANTISUBMARINE WARFARE

The Department cc--inues to develop Ant i - Subme / . (= :-.:,xiare
(ASW) systems to imprc-= our ability to conduct ASW in the
littoral/shallow water regions. The Airborne Low }:r-q^ency Sonar
(ALPS) system is an irnrroved "dipping sonar" that will
significantly enhance :ur ability to conduct actd-e prosecution
of subsurface targets. ALPS development is 95% cc "piece and will
be incorporated into ~i^ SH-60R Light Airborne Multi-Purpose
System (LAMPS) helicop-ar. The SH-60R LAMPS remanuf acture
program will also incl_de upgraded acoustic processing to
dramatically improve -is ASW capability of the LAMPS aircraft.

We continue to uprrade our torpedoes for improved shallow
water performance. Thi MK-46 Service Life Extension Program and
MK-50 Block I & II prcrrams will improve the performance of our
existing inventory. The Lightweight Hybrid Torpedo, to be
introduced in fiscal y-rar 2001, will deliver a significant
performance increase ^r shallow water; it will utilize available
components of the MK-4i and MK-50 in addition to extensive use of
Commercial-of f -the-Shelf electronic components. The MK-48 ADCAP
MODS program is updat^zg existing torpedoes with propulsion and
homing systems improveTients for the very difficult shallow water
environment .

The AN/SQQ-89 (v; X Surface Ship ASW Combat System will
integrate COTS into s'.^rzace ASW combat systems and represents
significant cost savinrs over previous Military Standard Systems.
The AN/SQQ-89 is the .--T/J Combat System for all surface
combatants.

The Advanced Deplr;/able System will provide the ability to
rapidly and covertly deploy an underwater surveillance system
designed for use in shallow littoral environments. Surveillance
information will be available to the tactical commander for use

171

iz controlling the tactical situation in any regici^ u,f Jn^-i^st.

C4I PROGRAMS

C4I programs are designing new systems that wjil ex- ;:.;i the
l:LTiited range of High Frequency (HF) and Ultra High Freq .eiicy
CIZ?) communication systems. The new approach is called the
Crzernicus Architecture. It focuses on five mai:) assuif. t ions :

• Modern precision weapons require more, not less,
information.

• The operator should be able to "pull" information from
the outside rather than having it "pushed" to him,
clogging both physical and mental channels.

• Information must be handled in multiple formats (e.g.,
voice, video, data) .

• Pathways for information must move beyond HF and UHF to
include Extremely High Frequency, commercial SATCOM and
other media.

• Technology should be "Commercial Off-the-shelf" adhering
to Open Systems standards.

This new architecture has become the basis on which the
Jciat Maritime Command and Information Strategy (JMCIS) is built
as veil as the joint counterpart Global Command and Control
Syr^em (GCCS) .

COrPERATIVE ENGAGEMENT CAPABILITY (CEC)

As you know, the Secretary of Defense has said that
Corperative Engagement Capability (CEC) is the biggest

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breakthrough in warfare technology since stealth. The CEC
program is designed to link together Battle Group -nt.-^kir
Warfare units and Airborne Early Warning aircraf- .li: a force -
wide ant i- air combat system. CEC provides real-^^me, high
quality, composite data over highly jam resistanr .inVs. From
this data, each cooperating unit can develop its ..■m. fire control
solution for weapon engagements against threats r^ycnd its own
sensor horizon. Engineering discussions are una-.: way for
interfacing CEC as an element within the Army Pamot system and
Air Force Airborne Warning and Control System (Avr-C3) .
Cooperative Engagement has demonstrated the capaz_lity of being a
force multiplier in various warfare areas and has significant
joint warfighting applications. To date, CEC has oeen the major
element in two at-sea demonstrations. Last year lEC was
successfully employed in the Eisenhower Battle Gnup in a series
of tests off the coast of Puerto Rico. Recently CEC was used in
a major joint services demonstration called "Mou — ain Top" off
the coast of Hawaii. Detection data from sensors located several
thousand feet above the sea surface was provided zo an Aegis ship
from which surface-to-air missiles were launched. In all cases,
the target was successfully engaged, thus demonstrating the
ability to improve our reaction time in engaging rruise missiles
over land or water. In addition, this sensor nervork will
enhance our capabilities in the joint Theater Ballistic Missile
Defense effort. '

THEATER BALLISTIC MISSILE DEFENSE

The President has committed the Department :f Defense to
field effective theater ballistic missile defense^. Because of
our mobility and forward presence, we see sea-based systems as
the most promising solution to the ballistic misH^le defense
problem. This has been dramatically demonstrated by the superb
performance of USS BUNKER HILL (CG 52) in operat^:ns near Taiwan.
Rapidly repositioning in response to National Tasiing, that ship

173

successfully detected and tracked the Chinese missi^i; ;-. x^. ls which
landed in the vicinity of Taiwan. Complete tracki'".--' ir.n possible
from the moment the missile rose in its ascent pha... .-,c/e the
horizon of the sensor. This is critically important if we are to
achieve kill at a distance that will avoid harm to uur own
forces .

The Navy, in conjunction with the DoD Ballistic Missile
Defense Office, has conducted analyses to determine the best
approach to sea-based ballistic missile defense. Our conclusions
point to a two tiered system. The lower tier system, which we
are now calling the AREA system, builds on the current Aegis SPY-
1 radar and the Standard Missile/Block IV, with only minimal
modifications to the vertical launcher. By adding this
capability as an additional mission to our Aegis Fleet, we reap
maximum benefit from the $40 billion the American taxpayer has
already invested in these state-of-the-art ships. Also, we take
advantage of the thousands of successful intercepts completed in
the Standard Missile Program.

This year the Navy is continuing work on the upper tier or
exo-atmospheric portion of our two tiered, sea-based approach.
We have termed this the THEATER WIDE system in recognition of its
regional capability. We have conclusively demonstrated the
concept of modifying an endo- atmospheric missile for exo-
atmospheric use, employing a Terrier missile with a Lightweight
Exo- Atmospheric Projectile (LEAP) vehicle as the kill mechanism.
Several kill vehicle concepts are being evaluated, including
Army, ARPA, and contractor systems. At the same time, we
anticipate we can greatly enhance the value of the Cooperative
Engagement Capability by making available joint services sensor
detection data.

174

GLOBAL BROADCAST SERVICE (GBS)

The Global Broadcast Service (GBS) program allows us to la.-.a
advantage of commercial Direct Broadcast TV technology to
increase (the amount of information we can get to the field. Ths
ability to use very small dish antennas- -18 to 24 inches m
diameter- -will let us get information to small, mobile users
nearly world-wide for the first time. As an interim measure, all
the services will benefit from the Navy's Ultra High Frequency

(UHF) Follow-On (UFO) satellites currently in production to cez
this capability in orbit in 1998. We are using the last three
UFO satellites as hosts and integrating the GBS capability to add
approximately 100 million bits per second communications
capability nearly world-wide. The first satellite, UFO-8, is
planned to cover the Pacific. Initial Operational Capability

(IOC) is April 1998. We appreciate the Committee's support on
our reprogramming report .

While this does not answer all of our communications needs,
it is a revolutionary step in getting critical information such
as imagery, weather and tasking orders to the warfighters in near
real-time. It will also enhance quality-of -life by providing the
capability to provide television broadcasts to ships at sea. Tha
high capacity one-way transmission capability will free up
capacity on other, critical two-way systems. The interim
capability on UFO satellites will allow us to refine our
operation,al concept and requirements to aid in the DOD Space
Architect's work in defining what the future, objective
.architecture should be.

ACQUISITION REFORM

The Department of the Navy is leading the way in acquisitici
reform, creating cultural change from the top to the bottom of
the acquisition community. A fundamental revision of SECNAVINST

175

5000.2 acquisition instruction is currently underway ....^ch
institutionalizes our new way of doing business. r'l? new
instruction streamlines the acquisition prziess by ■■. p-.t^-ij
unnecessary regulation, delegating decisic- authority to the
lowest possible organizational level, eli-- -ating t.' essancial
military specifications and standards where -ommei-c^al
specifications will do, and encouraging maximum use n-f
Commercial-off-the-shelf (COTS) equipment. High ;.-!; ihe list of
acquisition reform priorities is managing programs with an eye
toward total life cycle costs. This incl_;es desiyning platform
systems using an open system architecture --d allowing for
follow-on technology insertion.

The Department has already moved to irrlement the strategies
permitted under the new instruction. The ? A-18E/F Acquisition
Excellence Award and SQQ-89 sonar suite prrrrams were cited
earlier in my testimony as positive examplaii of the new Navy
acquisition process. Other examples incluia the AN/SQS-53A EC-16
sonar, winner of the 1995 "Heroes of Reinvezzion Hammer Award".
This sonar replaces the antiquated AN/SQS-rIA Sonar subsystems
with "ruggedized" modern commercial electrcz_zs. The new system
reduces life cycle costs by over $100 milliin, system weight by
25,000 pounds, Program Manager requiremen:;^ oy 500 manhours,
sparing requirements by over 80%, and operaiional downtime by
over 75%. Furthermore, this system took y-ir. 28 months from
program approval to successful sea trials. The Air Combat
Electronics Program (ARC 210) showed similar results as the
winner of the "Secretary of Defense Superior Management Award".
The ARC 210 Integrated Product Team implerr.erred several
innovative acquisition management practices which resulted in
five years of declining ceiling prices and :o5 million in
savings .

The Navys strong and continuous commizTient to acquisition
reform resulted in the establishment of the Acquisition Reform

176

Office in January 19SE This office is responsibiv _ c driving
the acquisition reform agenda, including deve iopme .'■ -f the
Acquisition Center of Ijccellence. The Center wil? nuain a
virtual library of inf:rmation available to all Program Executive
Officers and Program Xanagers for use in developir<j acquisition
strategies, obtaining .p-to-date acquisition inforr.;ation,
reviewing lessons leaned, and testing world-clasf? acquisition
ideas, to support enhEJiced productivity and reduced costs.

CONCLUSION

In summary, Mr. Z:airman, in the 14 7 days I have been in
this job, I have met jimdreds of people in the Navy acquisition
community, in and out :f government, who work hard every day to
make acquisition success a routine occurrence. My guiding
principles are to commuiicate fully and openly with the Congress,
industry, our war figiiners, and our acquisition professionals, to
do everything in my p^ver, use whatever leverage my office can
muster, to make sure i^ir Sailors and Marines are provided with
the best equipment possible for the lowest investment possible.
My highest priorities ire to bring stability to our acquisition
programs-- this alone zould save billions of dollars; strengthen
our industrial base-- ve are the greatest maritime power in the
world and I see no re£.;on why we should not have the greatest
maritime industry in z-zb world; and ensure that our children and
grandchildren who ser— = in the Navy and Marine Corps of the
future, defending America, have what they need to prevail. We
believe that the Depar-rment of the Navy's budget request for
fiscal year 1997 supprr-s a rightsized, recapitalized and ready
Navy-Marine Corps teair We appreciate the support provided by
the Congress and look forward to working together toward a secure
future for our Nation.

177

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187

Mr. Young. Mr. Secretary, thank you very much. We appreciate
the detail that you went into not only in this session but in the ear-
lier session.

Mr. Murtha, do you have questions?

Mr. Murtha. I just wanted to say I didn't notice that tie before,
Mr. Secretary, but I see, even though you were in the Air Force for
28 years, that they have got you properly indoctrinated now that
you are in the position you are in.

I see Admiral Lopez. I know he always enjoys his tour out in the
field, but I can't understand why Captain Worley is here. He just
keeps telling me how it was to go out in the field, but he is back —
like yesterday. Has he ever been gone?

Captain Worley. I was gone two years, Mr. Murtha.

Mr. Murtha. All right. We are glad to have you back.

Mr. Douglass. Thank you, sir.

UNFUNDED REQUIREMENTS

Mr. Young. Mr. Secretary, we would like to have the same coop-
erative arrangement with you that we had last year. Last year, we
were not satisfied with the budget request; and we asked all the
services to identify for us requirements that you have that were not
included in the budget request.

I think we did a pretty good job of providing a lot of resources
for some of those items. Contrary to some of the criticisms directed
to us, we didn't add a lot of political add-ons. What we did when
we added, we just went up the list that you provided of unfunded
requirements.

We would like to do the same this year. We would like to see
what other requirements you have, over and above what you have
in the budget request that are not funded, and see what we can
do to help solve those.

Mr. Murtha. Will the Chairman yield?

Mr. Young. Yes, sir.

ADVANCED AMPHIBIOUS ASSAULT VEHICLE

Mr. Murtha. You said one thing was on target, but I understand
the AAAV or Advanced Amphibious Assault Vehicle actually was
pushed back a couple years. Isn't that accurate?

Mr. Douglass. Yes, sir. Some time ago, there was a substantial
amount of money taken out of that program which delayed the
schedule a couple years.

Mr. Murtha. Wasn't it this past year, 1995? Wasn't that when
the money was taken out?

Mr. Douglass. I think it was in the Fall of 1994 sir. Since we
are now working on the fiscal year 1997 budget, that was a couple
years ago.

Mr. Murtha. So this — you say it is on schedule. It is actually on
schedule, the new schedule; but additional money would put it back
on the track that we originally had it on, is that correct? Is that
accurate?

Mr. Douglass. Yes, sir, that is accurate. We could accelerate the
AAAV and regain most of the original schedule. You always lose
some when you slow down for a couple years, but this program is
an example of one we should push ahead on.

188

INTER-COOLED RECUPERATIVE ENGINE PROGRAM

Mr. MURTHA. It is what the Chairman is saying. It is certainly
important. On the ICR, can you give us a report on that?

Mr. Douglass. Yes, sir. That is the Inter-cooled Recuperative
Engine Program. This is a research and development program
which essentially would increase the efficiency of our ship engines
by about 30 percent.

The program got off to a rocky start because we were given the
money by Congress to test it. We started to test it, and the engine
itself did not fail, but the recuperator — the device that essentially
takes exhaust and sends it back into the intake manifold to heat
the incoming air failed. So the contractor had to start over again
and build a better recuperator. They have done that. It is up and
running again.

These tests are being conducted between us and the British. It
is a joint program. It is being done in England. Admiral Lopez sent
some people over there a couple weeks ago. We are beginning to
see dramatic results from it. I am upbeat on that, and I am hopeful
we can complete the tests successfully. If so, this engine could be-
come the baseline engine for some of those ships that I told you
about that we are designing for the future.

Mr. MuRTHA. I am pleased to hear that. We had a real problem.
We had heard all the bad reports, and we took a chance. The
Chairman particularly took a chance in accepting this as an add-
on, and we are pleased it is going well and that it is working out.

Mr. Douglass. Thank you, sir. We are glad you took the chance.

UNFUNDED REQUIREMENTS

Mr. Young. Back on the question of unfunded requirements. You
gave us what I thought was a very exciting summary of how you
actually saved money by moving some of the programs up by mak-
ing them happen quicker than the normal schedule.

Could you give us — do it for the record if you would — an example
of where we — how much we might be able to save on a number of
specific requirements that are not funded at the present time in
the budget? Give us an idea of how we can save through multi year
contracting or accelerating procurement or whatever you would rec-
ommend that we do if we do fund some of the unfunded require-
ments.

Mr. Douglass. I would be pleased to do that.

[The information follows:]

The main unfunded fiscal year 1997 Navy procurement priorities include advance
procurement funding for the New Attack Submarine, LPD-17 procurement, DDG-
51s, and AV-8B aircraft. Fiscal year 1997 increases can generate savings in the re-
maining fiscal year 1998 to 2001 FYDP years due to either increased quantities,
higher learning ciu-ves, or earUer completion of total program buys. While specific
dollar savings values would depend on such things as contract re-negotiations, ad-
justments in fiscal year 1998-2001 buy rates, and other decisions that would have
to be made as part of the fiscal year 1998 budget development process, examples
of potential savings are as follows.

Provision of additional fiscal year 1997 funds for the New Attack Submarine
(NSSN) authorized in fiscal year 1999 would allow the Navy to fully transfer the
NSSN design to Newport News Shipbuilding. Also, long-lead time nuclear and non-
nuclear propulsion components woiild be available in time to support optimal "in
yard" dates. Both actions would reduce construction costs.

189

If funding for a follow-on LPD-17 is added to fiscal year 1997, cost benefits would
extend to the fiscal year 1998 ship, reducing the estimated end cost by approxi-
mately $23 million.

For the AV-8B aircraft, additional fiscal year 1997 funds would remove the pro-
curement of the last two aircraft from fiscal year 2001 saving $77 million in that
year.

Providing advanced procurement funding in fiscal year 1997 for either a third
DDG-51 in fiscal year 1998 or for a 12-ship multi-year procurement package would
help reduce the SCN bow wave beyond the FYDP by approximately $1.0 biUion. Pro-
curing the additional Advanced Pi-ocurement in fiscal year 1997 would also reduce
the average unit cost for each DDG.

Mr. Young. We have been told that what we did last year saved
considerable amounts of money in procurement. If that is true — we
believe it to be the case — we are giving the American taxpayer a
lot better deal than he or she would have gotten otherwise. That
is a part of our responsibility as well, to look after the taxpayer.
So if you would do that — and you don't have to list everything, but
give us good examples of where we could be helpful and what the
cost effect might be.

Mr. Douglass. Yes, sir. I will be glad to submit it for the record,
sir.

Mr. Young. Mr. Dicks.

Mr. MURTHA. Would you yield just a minute?

Mr. Dicks. Yes, of course.

V-22 AIRCRAFT PROGRAM

Mr. MuRTHA. On the V-22, a cost question. Secretary Cheney ac-
tually tried to get rid of the program. He was concerned about the
cost of the program. I understand the first airplane came off pretty
high-cost. What was the cost of the first airplane and what will we
get it down to eventually?

Mr. Douglass. Sir, we are just now getting the cost proposals in
for the first four low-rate initial production airplanes. So we only
have cost estimates there for those first four. I have the figures
here, but

Mr. MuRTHA. $110 million apiece, is that right?

Mr. Douglass. That sounds in the ball park for our estimate for
the first ones, but the devil's always in the details. When you
throw the numbers out on short notice, you know, I don't know
whether you include support equipment or stripped down.

Mr. MuRTHA. I realize the initial airplanes are going to cost
more, but what I am interested in is what are we going to get it
down to? What we were hearing is it would cost about $40 million.
We know we have got to replace the old helicopters, but are we
going to be able to get it down to $40 million per copy? That is the
question.

Mr. Douglass. We will be able to get the price down substan-
tially if we buy in quantity. What is our goal to get it down to Gren-
eral, do you have it?

General Oster. The recurring unit flyaway is under $40 million,
$38.8 million. That is for 200 units.

Mr. MuRTHA. Are there any constraints that either this Com-
mittee or any other Committee put on you as far as how many you
can buy? It runs in my mind there was some constraint that might
hinder you in getting the price down. Is there any constraint?

190

Mr. Douglass. To my knowledge, none have been placed on the
program by the Congress. There was a constraint placed on it some
years ago by the Office of the Secretary of Defense, and we are try-
ing to stay under those constraints. This is no news to anyone, sir,
that the present profile is to buy this over 27 years. If we could
find a way to buy it quicker, we could substantially reduce the cost
of the program.

Mr. MURTHA. I think we need to know for the record what those
constraints are, and we also need to know what rate you need to
buy them at to get the price down to the $38 million that General
Oster is talking about.

This is obviously a program we know desperately needs to be out
in the field. I talked to a number of pilots who are telling me that
these helicopters — they are having a tough time getting

Mr. Douglass. We will provide for the record what we could do
at various funding profiles.

[The information follows:]

Under the current $1 billion per year funding cap established by the Office of the
Secretary of Defense for the V-22, procxu"ement profile stretches over 27 years. If
procurement were accelerated, we could replace the aging Marine Corps medium Uft
assets earUer and save several billion dollars over the life of the program. Potential
savings at different procurement rates is the subject of reports soon to be submitted
to Congress by the Secretary of Defense in response to language in the House and
Senate reports which accompanied the National Defense Authorization Act for Fis-
cal Year 1996.

In response to the question concerning when we will reach our unit flyaway cost
goal, we anticipate reaching the $38.8 nullion (fiscal year 1994 dollars) government
estimate for the average unit flyaway cost at the 200th unit. The 200th unit will
be procured in the fiscal year 2007 buy and deUvered in fiscal year 2009.

Mr. Douglass. I might add that it would be my intention to rec-
ommend to the Committee, not this year and maybe even not next
year but maybe two years downstream, that we try to get this pro-
gram on some t3rpe of multiple-year profile so we could take advan-
tage of the economies of scale.

In order for us to do that, sir, there would have to be a consensus
on what rate we want to buy them. It won't do us any good to get
a contract for a certain rate if there is not a meeting of the minds
between the Administration and Congress. This program is clearly
going to be a candidate for multiple-year procurement. I can save
money by buying them quicker or using innovative techniques like
multiple-year procurement.

We will be glad to advise the Committee of what the options are.
Right now, it is important to recall that we are just beginning pro-
duction. We need to see what we get for our money on those first
four airplanes. So some of these "go-quicker" decisions are a year
or so away.

Mr. Young. Yes. Mr. Dicks.

joint strike fighter aircraft

Mr. Dicks. Mr. Secretary, I want to welcome you and your col-
leagues here today. Tell us — we had a little discussion about the
Joint Strike Fighter. Tell us about this airplane, where we are and
why you think it is such an important plane for the Navy and the
Marine Corps and Air Force.

191

Mr. Douglass. Well, sir, every time I think of the Joint Strike
Fighter I remember when we started out buying airplanes years
ago. I can't remember which President questioned the Army when
they said they would like to buy three or four of the Wright Broth-
ers' airplanes. The President said, why don't they just buy one and
let those guys take turns flying it?

As we know, that was the beginning. It is now as if we have gone
full circle. Because, if you look at the history of aviation, you would
find that, over the years, we have had a robust history of each of
the services having numerous fighter and attack designs going on
at the same time. We are now at a point in history where we can't
afford to do that anymore.

What we have here in the Joint Strike Fighter is a very, very co-
operative program between the Department of the Navy and the
Department of the Air Force to provide for a basic design which
will produce an airplane that meets Marine Corps, Navy and Air
Force requirements. It is particularly important to the Navy and
the Marine Corps to keep this program on schedule.

As you know, some years ago the Navy had a program called the
A- 12; and it was canceled for various reasons. So we have reexam-
ined Naval aviation.

Mr. Dicks. How much are we going to squander on the A-12?
Was it several billion, $3 billion, and we got nothing?

Mr. Douglass. Sir, I don't know. It may be a couple billion. That
happened a long time before my tenure; and, as you know, that
case is still under litigation.

Mr. Dicks. I think it is a great example of why you don't cancel
these programs, why you try to make it work and get something
for your money. When you start over, you wind up wasting billions
of taxpayer dollars.

Mr. Douglass. Yes, sir. I did not mean to bring that up in a pro-
vocative sense.

Mr. Dicks. I did.

Mr. Douglass. We want to get on with the Joint Strike Fighter
program. It is a very important program to the Navy and Marine
Corps team. Maintaining program schedule is the thing I want to
stress.

I am comfortable with the design as it progresses. We have three
design teams that have given us innovative designs. From a cost
savings standpoint, the three designs will be 80 percent common.
There is hope we can achieve that. This will save us billions of dol-
lars in operating costs if the three services can have 80 percent
commonality on a parts count on those weapons systems.

I think there is good technical evidence that we will be able to
meet the various technical requirements of the three services. I
rate this as a very high priority for the Navy and the Marine
Corps, sir, and my colleagues are welcome to comment.

Mr. Dicks. General, what do you say?

General Oster. We consider the Joint Strike Fighter is key to
our neck-down strategy as we move into the next century. We see
Marines flying only the Joint Strike Fighter, STOVL version. We
would neck-down from the F/A-18 C/D and AV-8Bs to a single
t5rpe-model-series. Of course, from our perspective, the faster we
get there the better it will be for all of us.

192

Mr. Dicks. Right. So delay is the big enemy here.

General OSTER. Yes, sir.

Mr. Dicks. Admiral, do you want to add anything?

Admiral Lopez. Yes, sir. Our requirement is probably more so-
phisticated than any in the sense that we need a first-day surviv-
able aircraft that we can get in and get out of the battle zone. We
are probably going to require fewer than the other two services. We
are obviously most interested in the life-cycle savings generated by
multiple service buys as well as the commonality factor. We are
looking at, hopefully, more than 30 percent life-cycle savings.

Mr. Dicks. Good. And I understand we are looking at $30 mil-
lion, is that correct? Somewhere in that range?

Admiral LOPEZ. Yes.

Mr. Douglass. Unit cost, yes, sir. Somewhere in that range.

Mr. Dicks. That would break the curve a little bit in terms of
these planes getting more and more expensive. This would, hope-
fully, be less expensive because of the quantity buy.

Mr. Douglass. With a lot of emphasis on affordability.

Mr. Dicks. Is the Air Force okay on this? We worry about the
jointness of this. Can we keep it together?

Mr. Douglass. My estimate is they are because they desperately
need replacements for the F-16.

As you know, we have a very innovative management approach
for this program, Mr. Dicks. I used to be Service Acquisition Execu-
tive on this, and the program manager was an Air Force general.
It was recently changed, and Mr. Money in the Air Force is the
Service Acquisition Executive, and we have a Navy admiral as the
program manager.

I stay in very close contact with this program. As you know prob-
ably, it is in source selection this spring and summer. I will be an
adviser to the Secretary of the Air Force who will be the source se-
lection authority for the neck-down.

Mr. Dicks. So you will be down to two teams.

Mr. Douglass. That is my understanding.

Mr. Dicks. And you are going to build the airplanes?

Mr. Douglass. Yes.

Mr. Dicks. You are going to build prototypes

Mr. Douglass. That is my understanding.

Mr. Dicks. Like we did with the F-22?

Mr. Douglass. Yes, sir.

Mr. Dicks. That is why it takes so long. Then you are going to
have a competition between the two companies.

Mr. Douglass. Yes, sir, and pick the best.

Mr. Dicks. When will that be decided?

Mr. Douglass. I don't have the dates.

Mr. Dicks. Is that 3 or 4 years down the road?

Mr. Douglass. Four years, I think. Planned contract award after
the down select decision is in fiscal year 2001.

Mr. Dicks. Okay.

Mr. Douglass. Three years.

Mr. Dicks. I want to compliment you. I think this is a great pro-
gram. This would replace the F/A-18, right, eventually?

Mr. Douglass. Eventually. The F/A-18 C/D, yes. The older
versions.

193

Mr. Dicks. And you have the Es and Fs and the Harrier.
General OSTER. F/A-18 C/D's and the Harrier.
Mr. Dicks. For the Air Force it is the F-16.
Mr. Douglass. The F-16 replacement, yes, sir.

AIRCRAFT carriers

Mr. Dicks. Let me ask you this question. We discussed this
morning a little on the nuclear carrier issue. It was suggested this
morning that we might be looking — since we are going to look at
everything, we might be looking at a nonnuclear variant. With all
due respect, I would find that Admiral Rickover would of course
roll over in his grave if he thought we were going to do that. But,
you know, there is so much, in terms of just operational capability
you get from a nuclear-powered ship, it is hard for me to conceive
of going back to a nonnuclear carrier.

Is the reason — is this being driven by, somebody driving the
Navy in this direction, do you know?

Mr. Douglass. No, sir.

Mr. Dicks. Is staff up here on the Hill pushing for this or some-
thing?

Mr. Douglass. No, in all honesty, I have to answer you in the
following way.

Mr. Dicks. Off the record.

[Discussion off the record.]

Mr. Dicks. Back on the record.

Mr. Douglass. Back on the record.

I don't remember if you were in the room when I mentioned this
during my summary, sir, but the keel will be laid for the next class
of carriers in 2006 if we stay on schedule. She will go to sea in
2013 and will last for 50 years. Her sister ships could last until the
end of the next century. So we are handling the CVX design with
an open architecture in mind.

Mr. Dicks. I think that is correct, but I am hard pressed to con-
ceive of not using nuclear power.

Mr. Douglass. It is

Mr. Dicks. Unless there is something better.

Mr. Douglass. It would be a paradigm shift for us but we have
to start looking at all systems. Just think, this will carry the F/A-
18, E/F, the Joint Strike Fighter, the son of Joint Strike Fighter
and probably the grandson of Joint Strike Fighter. If you added up
all the RDT&E costs of designing the fighters that will fly off this
ship, they would probably be in the neighborhood of $100 billion
just to design the airplanes that fly off this ship.

Plus, think of the cost of all the weapons and so on. Over 100,000
sailors will sail on her. I have about a billion-and-a-half dollars
planned in the Navy budget to design this ship properly. That is
a big design challenge, a billion-and-a-half dollars to carry out
things that are that expensive and dear to the future of our fleet
and our Nation.

So I don't want to exclude anything at this point. I think it is
best to approach this with an open-mind. I think your sense that
nuclear power is fundamental to a lot of the operational capabili-
ties of the Navy is not off the mark. We don't want to rule out any-
thing— suppose this ICR engine turns out to be gangbusters or sup-

194

pose there is some other break through. For example, one of the
things I showed the Senate today was this Httle thing here, this
is called a Power Electronic Building Block.

We are going through a revolution in how we deal with electrical
power distribution that is roughly equivalent to the revolution
when we went from vacuum tubes to transistors, and you know
what we are able to do in micro-miniaturization. So we may de-
velop a power source that would drive an electric-drive ship just as
efficiently as nuclear power that we have not even thought of yet.

We should keep this in the back of our minds and not close any
doors yet. I think your instincts are very good.

Mr. Dicks. I am not saying I would not oppose something that
was not nuclear powered, but the ability to operate without having
to have a replenishment ship there is an advantage, especially in
this era. We saw just in the episode with China the importance of
being able to have those carriers move around quickly. If you got
to get refueled that really restricts and limits what you can do with
those carriers.

So I am glad you are going to spend some time and effort looking
at these carriers. Survivability I hope will be part of that discus-
sion, too.

Mr. Douglass. I understand.

D5 MISSILE

Mr. Dicks. On the question of the D5 missile, is the plan now
to back-fit the D5 on all 14 Tridents?

Mr. Douglass. Admiral Lopez.

Admiral LoPEZ. That is true, sir.

Mr. Dicks. You haven't really made a decision about 18 to 14
yet?

Admiral Lopez. No, we can't until all the negotiations are done.
So we need to make that decision in the next couple years but right
now we are moving towards at least 14 D5 ships.

Mr. Douglass. One of the important issues. Congressman Dicks,
is we need to keep the industrial base that supports the D5 missile
functional. We are spending considerable management time and
money to be sure we can do that.

NEW ATTACK SUBMARINE

Mr. Dicks. Tell me now, most of the activities last year on the
New Attack Submarine was before the Authorizing Committees.
Can you tell us — ^you mentioned this plan that will be announced —
can you tell us just where we are headed on the New Attack Sub-
marine in terms of the companies involved £ind how we are going
to proceed on this?

Mr. Douglass. I can give you a general outline, sir. I would just
say the final decisions are not in concrete yet. We were asked to
do two things: we were asked to develop a plan for competition,
and we were asked to develop a technology plan for improving the
technology in the New Attack Submarine.

The plan that will come over to Congress contains solid rec-
ommendations in both of these areas.

I think it is fair to say the Navy is committed to the competition,
and for the first time in the history of the Navy that I know of,

195

I have a signed agreement between the two yards as to how the
competition will unfold.

I think it is important because probably none of us in this room
will be here when that competition goes forward. We hope to sign
the agreement on Thursday or Friday this week and that will lay
down the ground rules for the competition.

The amount of new technology to go into the program and who
does that technology is a more complex issue. There are sharply di-
vided views. I have generally recommended to the Secretary a plan
that has some very specific improvements that we could make to
the boat in future years involving a technology program that will
constantly improve that boat as time goes by.

I would say this, sir, and this is something I hope the Congress
is aware of, if we want to keep the submarine industrial base alive
in this country we have to have people that can build and design
submarines. You can't just have the builders. You must have the
designers, too, because if you get rid of the designers, when you get
to the end of this class of submarine, that is the end of the road
for this country. I don't think that would be the right decision to
make. So my plan is for product improvement of that submarine
as the years go by. It is an affordable way that gives us the best
submarine force in the world for a reasonable cost.

Now, the details have to be worked out with the Secretary, and
there are some "who does what to whom" decisions. To ensure this
plan had merit, I had an independent panel come in and look at
what was needed. It was not just a panel of Navy people. There
were retired Navy people on this panel, also academians from the
best colleges who are aware of submarine technology. The panel
also had a retired Air Force person and retired Army person to get
other people's views of how to manage the technology. They gave
me a solid report that indicated we are on the right track.

I can make that report available to the Congress.

[The information follows:]

The Submarine Technology Assessment Panel Final Report, dated March 15,
1996, has been provided separately to the Committee.

TOMAHAWK MISSILE

Mr. Dicks. The industrial base issues are very important. Sub-
contractors, components, all we do, including the nuclear side of
the equation are important.

You talked about the arsenal ship, and 500 to 1,000 missiles.

What kind of missiles. Harpoon, are you talking about

Mr. Douglass. I would envision a mix of missiles.

Mr. Dicks. How much do those missiles cost?

Mr. Douglass. That varies, depending on the missile at hand.

Mr. Dicks. Could you give me a range?

Mr. Douglass. Joe, how much are Tomahawks? Joe has all the
unit costs on a sheet here.

Mr. Dicks. We are trying to get it to $600,000, but it is $1.2 mil-
lion.

Admiral Lopez. Tomahawk, sir, we have gotten it down to a little
over $700,000.

If we do the Tomahawk Baseline Improvement Program, that
will increase the price by $200,000 or $300,000 a copy.

196
Mr. Dicks. What is the price of the missile, is it-

Mr. Douglass. It has a family of warheads, unitary, submuni-
tion, and so on.

Mr. Dicks. What is the warhead, 500 pounds?

Admiral Lopez. No it is bigger than that, sir.

Mr. Dicks. Bigger?

Admiral Lopez. Yes, sir.

Mr. Dicks. That is classified?

Admiral LOPEZ. May I give it to you later?

Mr. Dicks. That is fme.

Mr. Douglass. We might have other missiles on board, less ex-
pensive missiles. We are looking at missiles that are in the Army
inventory. We are looking at Standard Missiles for fleet defense.

This ship could be a formidable platform, Mr. Dicks, to help de-
fend the fleet as well as project power ashore. So the mix of mis-
siles would be something that we would determine as we go along
in the program.

SMART SHIP

Mr. Dicks. You had a ship right before that, called the new —
what was it? I had not heard about it.

Mr. Douglass. Smart Ship.

Mr. Dicks. Yes.

Mr. Douglass. The Smart Ship uses an existing cruiser in the
fleet.

Mr. Dicks. A cruiser.

Mr. Douglass. Yes, sir. We will see what we can do by injecting
technology into the ship to get the crew size down. For example,
on a modem commercial ship, they don't have people in the engine
room 24 hours a day. The person on the watch topside looks at the
dials like you look at the dials in your car. There is nobody down
in the engine room unless they have a problem. Then they send
somebody down there to fix it.

We still keep crew members standing watch on Navy ships in en-
gine rooms. We now have the instruments to do otherwise, so we
could reduce our manning. We have multiple watches for security
reasons. Using technology, we could begin to lower the number of
crew members that are aboard the ship.

I was thinking about bringing today, but didn't in view of our
limited time, a new piece of computer-assisted training gear that
we use to train sailors how to do damage control. It is a console
just like the damage control console on a ship. Our young sailors
interact with the computer to help them learn damage control.
That saves us a lot of money. If we could get the damage control
manning requirements down, that is savings. These result in solid
out-year operating cost savings. We can take that savings and put
it back into the shortfalls of acquisition dollars that Chairman
Young spoke of earlier in the hearing.

roll-on/roll-off ships

Mr. Dicks. Talking about hard, tough decisions, you talked this
morning about shipyards and the importance of the shipyards to
the Navy. Obviously, we are getting down to just a handful of ship-
yards left in thjs country.

197

We started down the road on the issue of improving our seaHft
and we are going to use domestic yards. The problem I see here
is that the cost factor in those commercial ships, the RO-ROs is
apparently 3 times what it costs for the conversions; is that cor-
rect?

Mr. Douglass. You mean to build new ships?

Mr. Dicks. To build a brand new ship.

Mr. Douglass. I don't remember the exact ratio.

Mr. Dicks. It is pretty substantial.

Mr. Douglass. Well, it depends on what kind of a specification
you have. It is substantial. I wouldn't want to shy away from that,
but we had a lot of problems with the early conversions and they
cost more than we thought they were going to.

Mr. MURTHA. Substantially more. The life-cycle costs were actu-
ally less for the new ships; is that accurate?

Mr. Douglass. Probably so, Mr. Murtha.

Mr. Murtha. That is what they said this morning.

Mr. Dicks. What do you think we can produce a new RO-RO for;
$100 million?

Mr. Douglass. No.

Mr. Dicks. $200 milhon.

Mr. Douglass. You are getting close.

Mr. Dicks. $300 million.

Mr. Douglass. When you get to $250 million, you are getting
close.

Mr. Dicks. What does the conversion cost?

Mr. Douglass. It depends on many factors.

Mr. Dicks. Give me the last two or three we have done.

Mr. Douglass. I think $100 or $110 million.

Mr. Dicks. To do a complete conversion?

Mr. Douglass. Yes, sir.

Mr. Dicks. Does that include acquisition cost of the ship.

Mr. Douglass. Yes, sir.

Mr. Dicks. So the whole deal, to buy it and fix it up is $110 mil-
lion?

Mr. Douglass. For example, the prepositioning ships we are get-
ting ready to buy for the Marines. We were given last year $110
million and told to buy the best we could. We are pretty confident
we can get a conversion done — at least one done.

I have proposed an innovative approach to buy a second ship. We
have asked the shipbuilders to give us a bid for two, so if it were
only a little more than $110 million, say, another $75 million, or
so, Congress might want to fund it.

Mr. Dicks. The program is now 12 new ones and 5 conversions;
is that the program?

Admiral LoPEZ. Fourteen and five.

Mr. Douglass. Fourteen new ones, five conversions.

Mr. Dicks. One shipyard will do all 14?

Mr. Douglass. No, they are being done in two yards, Newport
News is building some, NASCO is building some. We have two
yards actively building the new ones now.

Mr. Dicks. Is this an essential part of your idea of trying to help
the commercial shipyards?

198

Mr. Douglass. Sir, those ships are being built to meet solid JCS-
validated requirements for getting our forces overseas.

Mr. Dicks. I wasn't suggesting it was not done for

Mr. Douglass. Of course, it is helpful to the shipbuilding indus-
try. I think I may have mentioned to you a couple weeks ago when
you and I were chatting about a classified program with the ship-
building industry.

Mr. Dicks. Right.

Mr. Douglass. I am doing a number of other things to try to
stimulate commercial shipbuilding in the United States. I am a
solid supporter of DARPA's MARITECH program. I have gone
around and continue to go around to cruise lines to try to get them
to build their ships in America. I think it is not a good thing that
85 percent of the people in the world that go on cruises are Ameri-
cans and none of those ships are built in the United States.

I think we need to build more coastrl infrastructure. I have been
stationed all over the United States, and my mom and dad always
lived in Florida. When my dad retired from the Navy, I got tired
of driving down 1-95 to visit. You can go anywhere in Europe, up
and down the coast from the Continent to Africa on ferries. We
don't have anything like that in the United States. That kind of a
coastal infrastructure is what we need in this country. I am an ad-
vocate of it and I am not ashamed to be an advocate of it.

Mr. Dicks. If we could do it, fine, the problem is we have not
been able to compete with the Koreans, Japanese and Germans,
they can produce them at much less cost.

Mr. Douglass. If we fund MARITECH and work with our ship-
builders, Americans can compete. I am convinced they can. I am
going to do everything I can to stimulate commercial shipbuilding
because every commercial ship built in this country lowers costs for
the United States Navy.

Mr. Dicks. I have been advised by the staff that my 5 minutes
has expired.

Mr. Douglass. I think we are in agreement on this.

Mr. Young. Mr. Murtha.

Ship Conversion

Mr. Murtha. This morning Secretary Dalton said one thing,
sounded like Admiral Boorda said something else on the conver-
sions, now we are not sure you are not saying even something else.

Mr. Douglass. I hope not.

Mr. Murtha. We need to — I have always thought conversions
were the fastest and cheapest way to do it, but lately, I have been
hearing that the new ship construction is not only important to the
shipyards, both are, but actually it is cheaper over the long-term.
We need to know that for the record, which is cheaper and long-
term life-cycle.

[The information follows:!

The decision to proceed with either new construction or conversion cannot be gen-
eralized. It very much depends on the specific details of the requirements and the
exact characteristics of the ships that industry chooses to propose to be converted.
For example, the requirements for Maritime Prepositioning Ships (MPS) for the Ma-
rine Corps are less demanding than those for the Sealift LMSR Program to support
the Army. Therefore, it is potentially easier to acquire a satisfactory MPS capabiUty

199

by conversions. Eight of the thirteen existing MPS ships were acquired by conver-
sion.

The LMSR conversions cost approximately the same as new construction and this
was anticipated at the time of award. The conversions, including the delays in-
curred, will still deliver approximately 15-20 months sooner than new construction.
The earlier delivery was the main factor in the Army and JCS desire to include con-
versions in the Strategic Sealift Program.

Mr. Dicks. Mr. Murtha, would you yield on that point for a sec-
ond?

Are there other conversion potentials out there? In other words,
I think part of the discussion is whether there are other potential
RO-ROs that could be converted if we decided to go that direction.

Mr. Douglass. You mean, are there ships available that we
could get?

Mr. Dicks. Yes.

Mr. Douglass. I am pretty sure there are. There are a lot of
ships on the world market. But, Congressman Murtha, the answer
to your question depends on where in time you make the judgment.

What happened on the RO-RO ship and the Army Large Me-
dium Speed RoU-on/RoU-ofF LMSRs was that in the beginning, the
Navy felt that new construction was the best way to go. There were
many people who felt that conversion was cheaper, would get it for
you quicker, and that debate went on for a while. Finally, people
said to the Navy, read our lips, go do the conversions. We said aye,
aye, sir, and we were behind when we started.

Frankly, my assessment is that the people that were in charge
in those days made some mistakes, and we got our specifications
messed up. We also went to our contractors in a hurry and we
didn't get the best business deals in the world. We had some re-
quests for equitable adjustments, overruns, and so on. When we got
the ships, we were in such a hurry that we opened them up, we
said, my God, there are a lot more changes here than we thought.
So that was a difficult problem.

Now, if you compare that experience to the much better man-
aged, smoother new construction, which came after we got our
bearings and started doing it right, those new ships were not that
much more expensive than the early conversions.

But if you choose the ship properly and you have reasonable
modification specifications, it is almost always quicker and some-
what cheaper to convert something than to start from scratch.

Conversions however, don't do that much for the American ship-
building base, and if the differential is small, sir, I would be an ad-
vocate for new construction in America.

That may not be somebody else's view, but that is my personal
view because I think we need to build more ships in the United
States.

Mr. Murtha. Thank you.

Mr. Young. Mr. Secretary, thank you for that. We really want
your personal view, not what somebody told you to tell us. So we
thank you for that.

Mr. Douglass. I will probably get in trouble, but that is what
you get from me.

Mr. Young. I don't think so. We have a lot of other questions,
as you might expect. We would like to submit them to you in writ-
ing and ask you to answer them and be as thorough as possible.

200

Tomorrow morning, at 10:00 o'clock, the committee will convene
in closed session, special access, a meeting with the Director of
Central Intelligence, Mr. John Deutch.

If there is nothing further, thank you very much for being here.
Admiral Lopez and General Oster, we thank you for being here.
The Committee is adjourned.

[Clerk's note. — Questions submitted by Mr. Hobson and the an-
swers thereto follow:]

Vertical Launch ASROC (VLA)

Question. The Navy continues to express concern about the growing Third World
submarine threat as well as increased Russian submarine activity and capability.
Yet the Navy has not requested funds for continued production of the Vertical
Launch ASROC missiles. Isn't this the Navy's only immediate response missile with
a conventional payload for protection of our deployed battle groups?

Answer. Yes, it is the ordy ASW missile. However, there are sufficient quantities
in inventory to meet our objective.

Question. The Navy indicated last year when we appropriated funds to continue
production that the program had high military value and they had a requirement
for missiles. However, fijnds were not requested due to the fiscal constraints. Are
we facing the same situation this year?

Answer. The current inventory plus the quantities already under procurement
will meet projected inventory requirements through fiscal year 2005, based on the
Navy's NNOR (Non Nuclear Ordnance Requirements). The Navy will continue to as-
sess the future need for VLA missiles and give it due consideration with the other
competing priorities.

Question. The Chief of Naval Operations stressed the need for antisubmarine war-
fare (ASW) assets to maintain sea control capability. What is your requirement for
VLA missiles through the turn of the century to meet your inventory shortfall?

Answer. The current inventory plus the quantities already under prociu-ement
will meet projected inventory requirements through fiscal year 2005, based on the
Navy's NNOR (Non Nuclear Ordnance Requirements). The Navy will continue to as-
sess the future need for VLA missiles and give it due consideration with the other
competing priorities.

[Clerk's note. — End of questions submitted by Mr Hobson.
Questions submitted by Mr. Bonilla and the answers thereto fol-
low:]

Predator Program

Question. How does the government plan to establish a validated technical data
package for the purposes of reprocurement without a Low Rate Initial Production
(LRIP) to prove out production processes and develop accurate cost data as required
by DODI 5000.2?

Answer. The Predator program includes an LRIP in EMD to validate the design,
as well as a low rate ramp-up in production to prove out manufacturing processes.
The Predator LRIP is minimized and tailored in accordance with acquisition reform
and complies with the guidance provided in Department of Defense Regulation
5000.2-R of March 15, 1996. The Predator EMD LRIP consists of the manufacture
of 103 production representative articles for operational tests. The current con-
tractor is required to conduct a Production Readiness Review (PRR) to demonstrate
that the weapon design is stable prior to receiving government authorization to com-
mence the LRIP. During the build of the LRIP, the contractor is also required to
conduct a Physical Configuration Audit (PCA) to validate the reprocurement Tech-
nical Data Package. Prior to and throughout LRIP, the contractor is required to sub-
mit progress curve reports which capture actual costs incurred during the EMD
build. This data along with independent "should cost" assessments will be used to
develop accurate unit cost projections for the production phase.

Question. How does this acquisition approach conform with the precepts of acqui-
sition reform to:

Avoid duplication of cost of multiple manufacturers for low rate production quan-
tities?

Maintain performing contractors as long as they achieve cost and performance ob-
jectives?

201

Incentivize contractors to invest in production?

Support earliest fielding of needed system?

Answer. The Predator strategy is in keeping with acquisition reform by estab-
lishing an up-front, long range teaming relationship with a sing:le source, thereby
avoiding the duplication of cost. The acquisition approach is consistent with DODD
5000.1 of March 15, 1996 which states "Competition provides major incentives to in-
dustry to enhance the application of advanced technology and life cycle cost advan-
tages to defense programs as well as a mechanism to obtain an advantageous price."
The results of a Predator Sources Sought Survey indicate a capable and interested
industrial base with existing production capacity and missile manufacturing experi-
ence. A competitive strategy is the "best business" approach for the program and
provides the strongest incentive for the current contractor to invest and optimize
current performance. The Acquisition strategy, with its up-front teaming and grad-
ual ramp-up to full rate production, supports the fielding needs of the Marine Corps
and mitigates the risk of not meeting schedule delivery requirements.

Question. How is the Memorandum of Agreement (MOA) with the Army to be sup-
ported if the MPIM/SRAW program is with one contractor while Predator production
might be awarded to a different source? Why are the Army and the Marine Corps
on such divergent production paths? How can the Predator special tooling/special
test equipment support the Army MPIM/SRAW EMD program with one contractor,
if another source is awarded the Predator production? How is duplication of cost to
be avoided?

Answer. The U.S. Army has endorsed the Predator strategy as the best business
approach and beneficial to both programs. The programs have taken very similar
paths. Both have secured sole source EMD contracts with the same contractor, al-
beit at different times. The two programs are in series vice parallel stages of devel-
opment. Predator has a competitive procurement strategy for production and the
Aim.y anticipates following the USMC to avoid duplication of costs where appro-
priate. The strategy has no impact on the "joint effort" MOA.

Question. Has the current contractor been asked to commit to aggressive but rea-
sonable production unit prices using cost as an independent variable (CAIV) to
achieve cost objectives while limiting government risk for this limited quantity buy?

Answer. CAIV has been a part of this program since its inception and will con-
tinue to be an implementation aspect of the strategy for production. CAIV is an im-
plementation tool independent of the contract method chosen. It was implemented
in the beginning of this program when the majority of the material costs were deter-
mined. Cost and weight were the principle factors considered during the program's
extensive risk reduction phase that bridged Demonstration and Validation and En-
gineering Manufacturing and Development. The Predator strategy wiU require the
production contractor to commit to aggressive production unit prices using CATV to
achieve cost objectives and limit government risk. Ensuring a "best value" competi-
tion in the production phase is the last opportunity and best business approach to
effect the product cost.

[Clerk's note. — End of questions submitted by Mr. Bonilla.
Questions submitted by Mr. Young and the answers thereto follow:]

Modernization Shortfall

Question. The Navy's fiscal year 1997 budget requests $22.8 biUion for Navy and
Marine Corps procurement, shipbuilding, and R&D. This is $1.4 billion — about 6
percent — lower than the fiscal year 1996 appropriated amount. The funding provides
for only 40 new aircraft (of which only 28 are combat aircraft), 531 missiles, and
4 combatant ships. These 40 aircraft are the are the smallest Navy aircraft acquisi-
tion since 1938, and these 4 combatant ships are the smallest acqmsition since
1933. Mr. Douglass, is the Navy's fiscal year 1997 modernization budget adequate?

Navy Answer. We feel the Department of the Navy's request of $22.8 biUion for
procurement in the fiscal year 1997 budget is the right level, given our commitment
to providing the resources necessary to maintain readiness in the near term.
Throughout the FYDP however, we wiU have to request increases in procurement
and modernization accounts to ensure we don't put future readiness at risk.

Marine Corps Answer. Maintaining the Marine Corps' ability to immediately re-
spond with ready, capable forces today and in the future involves risks and requires
the most judicious application of scarce resources. Today we are meeting all commit-
ments with ready, well-trained and highly motivated forces. The fiscal year 1997
budget fully supports 216,000 active and reserve end strength and associated train-
ing which is essential to meeting operational requirements. Fxulher, we continue to
devote additional funding to improve the Quality of Life of our Marines and their

202

families, including improved housing, and morale, welfare and recreation activities,
all of which are important aspects affecting readiness.

Sustaining today's steadily increasing demands for ready forces with equally
steadily decreasing defense resources has forced difficult choices. While we have
been able to preserve current capabilities, this has been at the expense of invest-
ments needed for the next century. Marine Corps investment funding in modernized
equipment for our ground forces is projected to improve in the outyears, but remains
at historic low levels. We realize that if we are to remain the Nation's expeditionary
force-in-readiness in the next century, these resource deficiencies must be ade-
quately addressed. We hope to improve this situation in future budget submissions.

Question. What is the risk to the future readiness of the Navy and Marine Corps
of such low prociirement rates of weapons?

Navy Answer. Weapons procurement over the FYDP reflects a change to fewer,
but more effective munitions. Additionally, in some cases we have munitions inven-
tories left from cold war planning that are greater than called for in current plan-
ning scenarios. Our annual readiness assessment compares the mix of munitions
with requirements, and makes trade-offs between new procurement "preferred" mu-
nitions and current inventories that can serve as substitutes. There are some muni-
tions in our procurement plan that we will acquire slower than we would like, but
we have substitutes for these weapons needed to ensure that readiness remains
high in the near term.

As with ship and aircraft procurement, we need to stay mindful of weapons mod-
ernization requirements to ensure we take advantage of advances in technology and
effectiveness. This may mean an increase in weapons procurement funding in the
outyears.

Marine Corps Answer. This budget does project major weapons systems procure-
ment to improve, albeit in the outyears. For Marine Corps interest programs, that
includes procurement of LPD-17, and V-22, as well as projected enhanced levels of
Procurement Marine Corps to support our ground forces. However, I remain con-
cerned about the pace of modernization. Given topline constraints, these were
choices we were forced to make in the near term to ensure a fully funded, ready
force today.

Question. What major requirements are not funded in the fiscal year 1997 budget?

Navy Answer. The major requirements not funded in the fiscal year 1997 budget
are those priorities which would speed recapitalization of our Navy through funding
of already approved programs.

The table below summarizes these priorities:

Fiscal
Program year 1997 Notes

TY$M

New SSN AP (FY99 NSSN) 504 Funds nuclear/non-nuclear AP for fiscal year 1999 NSSN authorized in fiscal

year 1996 Authorization Bill.

LPD-17 ship 825 Procures the 2nd ship of the class in fiscal year 1997.

DDG-51 {3 DDGS-FY98) 750 Establishes stable production rate at 3 ships/year by funding in fiscal year

1997 AP for 3 fiscal year 1998 ships.
CVN-77 1,050 Adv proc. for CVN-77; add'l funds required to procure CVN-77 ($4,305 mil-
lion aircraft in fiscal year 1997).
F/A-18C (6 a/c) 185 Restores last 6 of 24 aircraft lost due to affordability; Senate fiscal year

1996 action funded 24 aircraft: Conference and final APPN Act bought 18

Will replace older F/A-18As,
CEC (accel jnt effort) 55 Provides funding to accelerate CEC integration on joint systems (AWACS/Pa-

triot/THAAD/Hawk).

Restore AV-8B (10 to 12) 68 Restores 2 aircraft lost due to affordability.

Restore E-2C (2 to 4) 155 Restores 2 aircraft lost due to affordability

EA-6B Band 9/10 jammer 40 Inserts high-priority programs for critical national missions fiscal year 1996

Appropriations Act provides 60; request buys remaining 60 sets
USQ113 (comm jammer) 75 Fiscal year 1996 Appropriations Act provides 30; request buys remaining 90

sets
Turbine Engine Blade Contain- 40 Procures Turbine Engine Blade Containment Systems for 120 aircraft (reli-

ment. ability mod)

Center Wing Sections 50 Procures 10 Center Wing Sections for replacement (safety/reliability mod)

EA-6B Total 205

TLAtVl Procurment 32 Incr qty (113 to 157; max contract quantity) for Surf BIk IIIC; Increase total

inv fiscal year 1999 to 2851 (shipfill = 5849)
Recert/Reman 55 Recerts all (334 msis, Surf/Sub IICs) due fiscal year 1997 (incr of 230); also

reman 45 BIk IIC-IIIC (approx Ind Cap)

203

Fiscal
Program year 1997

TY$M

Total 87

JSOW (Baseline) 71 Increase (+200) quantity to 300 in fiscal year 1997 (max LRIP); IOC fiscal

year 1998
SCN Inflation Offset (SSN-23) ... 105 Restore inflation adjustment wtiicti impacted program

CVX 52 Accelerate critical catapult technology; fund early Industry involvement to

address reduced manning and maint tecti

Total 4.112

These items are not funded in the current budget request due to the critical re-
quirement to protect near term readiness.

Marine Corps Answer. Because of top-line constraints, many of our programs are
not as optimally financed as I'd hke. If development of the AAAV and buy additional
V-22 aircraft and remanufactured AV-8Bs, and MPF (E) ships. I would accelerate
the pace of ground equipment modernization with emphasis on enhanced training
devices, communications upgrades and mobility enhancements; and I would invest
additional funds in my Warfighting Lab, the critical engine for taking the Marine
Corps into the 21st century. I would enhance the quality of life of the individual
Marine by acquiring additional individual equipment such as cold weather gear and
bivy sacks, and I would place additional resources in recruiting and advertising in
order to ensure we continue to recruit quality Marines. Finally, I am very much con-
cerned by the level of investment in our bases and stations, both in the form of
maintenance of real property and military construction.

Question. Are your top modernization programs fully funded in fiscal year 1997?
Are they optimally funded in the accompanying fiscal years of the Future Years De-
fense Plan?

Answer. New procurement, as well as capability upgrades to current systems and
platforms, are critical. Programs such as the USS Arleigh Burke-class destroyer, the
LPD-17 amphibious assault ship, the Osprey (MV-22) tUt rotor aircraft, and the
Super Hornet fighter/attack aircraft (F/A-18 E/F are key components of Navy future
readiness and need continued Congressional support. The Cooperative Engagement
Capability, successfully demonstrated last year, also provides an opportunity to tie
an entire theater of currently existing systems together for targeting.

The following additional modernization items that are not funded in the fiscal
year 1997 budget come from a larger list of priorities which would speed recapital-
ization of our Navy through funding of already approved programs.

The table below summarizes these top four programs:

Fiscal
Prograrr year 1997 Notes

TYSM

New SSN AP (fiscal year 1999 504 Funds nuclear/non-nuclear AP for fiscal year 1999 NSSN autfiorized in 1996

NSSN). Authorization Bill

LPD-17 ship 825 Procures the 2nd ship of the class in fiscal year 1997

DDG-51 (3 DDGs-fiscal year 750 Establishes stable production rate at 3 ships/year by funding in fiscal year

1998, 1997 AP for fiscal year 1998 ships

CVN-77 1,050 Adv proc. for CVN-77; add'l funds required to procure CVN-77 ($4,035 mil-
lion fiscal year 1997)

These program additions are not funded in the current budget request due to
higher requirements for protecting near term readiness. The fiscal 1997 SCN budget
request already fully funds 4 new construction DDG-51s in fiscal 1997. The budget
request also contains fiscal year 1997 advanced procurement for the fiscal year 1998
New SSN lead ship. The budget does not contain any fiscal year 1997 fiinds for an
LPD-17. The addition of SCN funding for these program efforts in fiscal 1997 would
help relieve some of the overall affordability pressure on the SCN account over the
fiscal year 1998-2001 FYDP.

The fiscal year 1997 Aircraft Procurement, Navy (APN) budget request does not
include any ftinds for F/A-18Cs. Currently, fiscal 1996 is the last year of F/A-18C/
D procurement, with line close out costs requested for fiscal year 1998. The F/A-
18 program transitions to procurement of F/A-18E/Fs across the FYDP, with the
first 12 aircraft requested in fiscal year 1997.

204

Marine Corps Answer. (1) V-22; (2) AAAV; (3) MPF(E); and (4) While not specifi-
cally modernization, the Commandant's Warfighting Lab will have a great impact
on how we train, equip, and fight well into the next century.

In the case of V-22 and the AAAV, these programs are fully funded in this budget
but I am concerned about the pace of acquisition of the V-22, an airplane urgently
needed to replace our aging CH-46 fleet. I am also concerned about the pace of de-
velopment of the AAAV. In both cases, topline constraints have forced less than op-
timal acquisition and development rates, respectively.

In the case of MPF(E), while a requirement exists for three ships, no flexibility
existed in the topline to allow us to budget for the remaining two ships.

Because the Warfighting Lab is a relatively new initiative, we did not have the
opportunity to address it in this budget. We are currently working internally to do
what we can and will address this requirement in fiscal year 1998.

Question: What are the main industrial base problem areas in the Navy?

Answer: The Navy has not identified any specific problem areas with the indus-
trial base. However, through the Navy's active participation in the Joint Group on
Industrial Base (JGIB), we are examining potential concerns with the other Service
Components and the DoD organization responsible for industrial base policy in the
Office of the Secretary of Defense.

Additional Funding

Question. Last year, the Navy was very candid about identifying your top un-
funded requirements to the Committee and working with us to provide additional
fiinding for many of them. I hope that you will continue that cooperation with us.
Would you describe the top unfunded Navy and Marine Corps priorities and why
the fiscal year 1997 budget is not sufficient in these areas?

Navy answer. The major items unfunded in the fiscal year 1997 Navy budget are
for extra funds to speed recapitalization of our Navy through funding of already ap-
proved programs.

The table below summarizes these priorities:

Program

Fiscal year
1997 TY$M

Notes

New SSN AP (Fiscal year 1999 NSSN) ....

LPD-17 ship

DDG-51 (3 DDGs— Fiscal year 1998) ....

CVN-77

F/A-18C l6 a/c)

CEC (accel jnt effort)

Restore AV-8B (10 to 12)

Restore E-2C (2 to 4)

EA-6B

Band 9/10 jammer

USQ113 (comm jammer)

Turbine Engine Blade Containment
Center Wing Sections.

EA-6B Total

TLAM;

Procurement

Recert/Reman

Total

JSOW (Baseline)

SCN Infl Offset (SSN-23)

504

825
750

1,050

185

155

205

105

Funds nuclear/non-nuclear AP for fiscal year 1999 NSSN author-
ized in fiscal year 1996 Auth Bill.

Procures the 2nd ship of the class in fiscal year 1997.

Establishes stable production rate at 3 ships/year by funding in
fiscal year 1997 AP for 3 fiscal year 1998 ships

Adv. proc. for CVN-77; add'l funds required to procure CVN-77
($4,305 million in fiscal year 1997.

Restores last 6 of 24 aircraft lost due to affordability; Senate fis-
cal year 1996 action funded 24 aircraft; Conference and final
APPN Act bought 18. W\\\ replace older F/A-18As.

Provides funding to accelerate CEC integration on joint systems
(AWACS/Patriot/THAAD/Hawk).

Restores 2 aircraft lost due to affordability.

Inserts high-priority programs for critical national missions.

Fiscal year 1996 APPN Act provides 60: request buys remaining
60 sets.

Fiscal year 1996 APPN Act provides 30; request buys remaining
90 sets.

Procures 10 Center Wing Sections for replacement (safety/reli-
ability mod).

Increase quantity (113 to 157; max contract quantity) for Surf BIk
IIIC; increase total in fiscal year 1999 to 2851 (shipfill=5849).
55 Recerts all (334 msis, Surf/Sub IICs) due fiscal year 1997 (incr
of 230); also reman 45 BIk IIC-IIIC (approx Ind Cap)

Increase (-1-200) quantity to 300 in fiscal year 1997 (max LRIP);

IOC: fiscal year 1998.
Restore inflation adj which impacted program.

205

D „ Fiscal year

Program jgg^ p^j„

CVX 52 Accelerate critical catapult technology; fund early Industry in-

volvement to address reduced manning and maint tech.

Total 4,112

These items are not funded in the current budget request due to the critical re-
quirement to protect near term readiness.

Marine Corps answer. This budget fully funds readiness but, as was the case last
year, today's readiness has been funded at the expense of investment in terms of
major aviation and ground equipment, as well as investment in real property main-
tenance and military construction at our bases and stations.

Marine Corps investment funding in modernized equipment for our ground forces
is projected to improve in the outyears but remains at historic low levels. If addi-
tional funds were available, I would accelerate the pace of ground equipment mod-
ernization with emphasis on enhanced training devices, communications upgrades,
and mobility enhancements; and I would invest additional funds in my Warfighting
Lab, the critical engine for taking the Marine Corps into the 21st century.

I am also concerned with the pace of investment in recapitalization, particularly
the V-22. If additional funds were provided, I would buy additional V-22 aircraft,
remanufacttu-ed AV-8Bs, and MPF (E) ships, and I would accelerate development
of the AAAV.

I would like to enhance the quaUty of life of the individual Marine by acquiring
additional individual equipment such as cold weather gear and bivy sacks, and I
would place additional resources in recruiting and advertising in order to ensure we
continue to recruit quality Marines.

Finally, I am very much concerned by the level of investment in our bases and
stations, both in the form of maintenance of real property and military construction.
Investment in real property maintenance and military construction is critical in
order to avoid further deterioration of facilities.

In sum, we have fully financed readiness but remain concerned about under-
financed investment. If we are to remain the Nation's expeditionary force-in-readi-
ness in the next century, these resource deficiencies must be adequately addressed.

Question. What are the potential savings if Congress were to provide additional
funding in fiscal year 1997 for these items, either by buying them earlier than now
planned or on production unit costs? Please put the costs and savings in the record.

Navy answer. Savings could accrue in the remaining 1998 to 2001 FYDP years
because of increased quantities, higher learning curves, or earlier completion of total
program buys. Potential adds to such program as TLAM and JSOW, however would
only serve to help reduce inventory shortfalls in these weapons rather than allow
outyear budget savings. Specific dollar savings values would depend on such things
as contract re-negotiations, adjustments in fiscal year 1998-2001 buy rates, and
other decisions that would have to be made as part of POM-98.

Examples of potential savings are as follows. Provision of additional fiscal year
1997 funds for the New Attack Submarine (NSSN) authorized in fiscal year 1999
would allow the Navy to fully transfer the NSSN design to Newport News Ship-
building. Also, long lead time nuclear and non-nuclear propulsion components would
be available in time to support optimal required "in-yard" dates. Both actions would
reduce constructions costs.

If funding for a follow-on LPD-17 is added to fiscal year 1997, cost benefits would
extend to the fiscal year 1998 ship, reducing the estimated end cost by approxi-
mately $23 million.

For the AV-8B aircraft, additional fiscal year 1997 funds would remove the pro-
curement of the last two aircraft from fiscal year 2001 saving $99 million in that
year.

Providing advanced procurement funding in fiscal year 1997 for an additional
third DDG— 51 in fiscal year 1998 would accelerate procvu"ement and help reduce the
SCN bow wave beyond the FYDP by approximately $1.2 biUion. Procuring the addi-
tional ship in fiscal year 1998 would reduce the average unit cost by $124 mUlion
($997 million vice $1,121 million).

206

Marine Corps answers. Efficiencies can be gained in the following programs either
by procuring them earlier than planned or on production unit costs, if additional
funds were provided in fiscal year 1997.

[In millions of dollars]

I, Amount re- FYDP savings in

"^^ quested fiscal year 97$

Procurement Marine Corps:

Javelin $20.0 $6.6

MILES 2000 49.0 7.8

AN/rPQ-36 Radar 3,8 0.8

Team Portable COMINT Sys 3 4 2.0

Total ,........; 76 2 17 2

Research & Development:

AAAV* 20.0 20.0

Aviation:

AV-8B 56 0 44.4

V-22** ,. 302.0 32.0

Total 358.0 76.4

•Accelerates program 4 montfis. Savings begin to accrue In FY 2003.

**For fiscal year 1997 an increase in initial buy from 4 to 6 aircraft is appropriate. A procurement rate of 24 or 36 MV-22s per year
could save the taxpayer as much as $5 to $8 billion (using inflation indices as reflected in the fiscal year 1996 budget), or as much as
$4.4 to $5.4 billion (using the lower inflation indices as reflected in the fiscal year 1997 budget). This procurement rate would allow for
completion of delivery of the MV-22 to the fleet 11 years earlier than the current procurement plan. We will pursue this improved profile in
future budget submissions.

Ship Force Structure

Question. The Bottom-up Review set a goal of 346 ships for a deployable battle
force of Navy ships. The new 1997 budget request provides for only 339 active ships.
Admiral Lopez, given the Navy's recent experience in a number of operations other
than w£ir, is the Bottom-up Review number of 346 ships an accurate statement of
your requirement to adequately support future "presence" and warfighting missions?

Answer, Naval force structure has taken approximately a 35 percent reduction
since 1989 and continues towards the long-term goal of a 330-346 ship force. This
force has been tailored to support peacetime forward presence as well as to support
the ability to fight and win two nearly simultaneous major regional conflicts. Within
fiscal constraints, the current planned force, validated by the Bottom-up Review,
supports this strategy. There is no plan to alter this force barring any radical
change to the world geo-political environment and corresponding U.S. strategy.

Question. How bad is the shortfall between the Department of Defense's projected
shipbuilding budget and its estimate for building the new ships planned during the
nejct decade, based on the Bottom Up Review number of 346 ships?

Answer. The Navy will have to build more ships per year than we are currently
building. An increase in average annual new ship construction to almost 10 ships
per year is required early in the next century to maintain a Bottom Up Review force
level of 330 to 346 ships. Current building rates are basically half this required
level.

Question. To support a 350 ship Navy of ships whose service life is about 35 years
requires an average construction of about 10 ships per year. The fiscal year 1997
budget averages about 5 ships per year for the foreseeable future, resulting in a
force structure of only about 200 ships. So, how do you plan to maintain a 350 ship
Navy?

Answer. Fiscal year 1996 Congressional action assisted the Navy in moving some
ship procurement forward. The challenge for POM-98 is to build towards the aver-
age annual new ship construction procurement rate of about 10 ships per year re-
quired early in the next century. OPNAV's current estimate for such a long-term
shipbuilding program indicates an average annual total SCN requirement of about
$11.3 billion in constant fiscal year 1995 dollars. This contrasts to the current fiscal
years 1997-2001 SCN program average of $6.2 billion in constant fiscal year 1995
dollars per year in the fiscal year 1997 President's Budget. Closing this gap is the
challenge.

Question. Describe how the Administration's new budget and accompanying out-
year plan implements the Bottom Up Review requirements for:

• a 45-55 attack submarine force;

• an 80 AEGIS ship force; and

207

• a 14 Trident submarine force backfitted with the D-5 missile.

Answer. As discussed above, SCN increases are required above current budget
and FYDP levels to support a Bottom Up Review force level of 330 to 346 ships.
The current fiscal year 1997-2001 SCN plan contains a 4 New SSNs (to facihtate
competition between Electric Boat and Newport News per Congressional direction),
and 15 AEGIS DDG-51 surface combatants (including 4 in fiscal year 1997 also at
the direction of Congress). However, the funding reqmred to finance construction of
the fiscal year 1999 and fiscal year 2001 submarines, which would include $504 mil-
lion in fiscal year 1997, is not accommodated in the President's budget. The current
budget supports backfit of 2 C-4 Trident submarines in fiscal year 2000 and fiscal
year 2001 with plans for two additional submarine backfits planned for beyond fis-
cal year 2001.

Question. Explain why the Navy is planning to now retain FFG 7 frigates beyond
their planned decommissioning dates.

Answer. Due to the number of contingency operations in recent years, the Navy
needs to retain the additional surface combatants in order to remain vdthin
OPTEMPO/PERSTEMPO goals. We want to remain true to our word to our people
and limit deployment lengths to six months. By retaining the most capable FFGs,
they Navy will not only be streamlining this ship class, but over the long term, it
will retain higher numbers of fiiUy capable surface combatants.

In addition to our plan for FFGr-7 frigates, we are considering, as part of POM-
98 deliberations, the need to retain one additional TACAIR squadron beginning in
fiscal year 1997 to ensure we stay within our OPTEMPO/PERSTEMPO goals.

Modernization of Ships

Question. The General Accounting Office reports that a recent Navy study re-
viewed the actual ship service lives of its cruisers, destroyers, and frigates since the
end of World War II. The study found that estimated service lives historically have
been unattainable and, without modernization, ships will be retired well before their
estimated service lives. The study concluded that to maximize service life, ships
must be modernized more frequently. Secretary Dalton, what are the expected serv-
ice lives of the major classes of ships currently in the force, and what is the basis
for these estimates?

Answer. The attached table shows the expected service lives of Navy ship classes.

[Clerk's note. — Classified table has been removed.]

Question. What are the Navy's modernization plans for its higher capability multi-
mission ships such as CG-47 cruisers and DDG-51 destroyers?

Answer. 'The Navy's current modernization plan for the CG 47 class is as follows:

• Baseline 1 (CG 47-51): maintain in current configuration through the balance
of their service life.

• Baseline 2 (CG 52-58): Current POM 98 issue supports upgrade to support
JTIDS and accommodate TBMD, and CEC capabilities.

• Baseline 3 (CG 59-64): upgrades to support JTIDS, and accommodate TBMD,
and CEC are currently underway. The first installation will commence on CG 61
in the 3rd quarter this fiscal year. The 2nd installation is planned for fiscal yeeir
1997, and the final 4 are planned in Fiscal Year 1999.

• Baseline 4 (CG 65-73): minor upgrades are planned and budgeted for all these
ships over the next 4 years. These upgrades will support JTIDS, TBMD and CEC
capabilities.

• Baseline 2, 3, and 4 ships, once they receive these upgrades and the AEGIS
Combat System computer programs are developed in conjunction with the JTIDS,
TBMD, and CEC upgrades, wdll be the most capable surface warfare ships in the
fleet.

The Navy's current modernization plan for the DDG 51 class is as follows:

• Baseline 4 (DDG 51-67), minor upgrades are planned and budgeted for all these
ships over the next 4 years. These upgrades will support JTIDS, TBMD and CEC
capabilities.

• Baseline 5, 6 and 7 (DDG 68-107) are arriving in the fleet with the most cur-
rent capabilities. A few of the early Baseline 5 DDG's will require some equipment
upgrades which are budgeted and planned for installation over the next 4 years.
Baseline 7 is currently planned to introduce COTS based advanced processing and
open architecture.

Question. What are the projected costs for these future modernization's, and over
what period will they need to be conducted?

Answer. Our program proposes to fund installation of TBMD/CEC and JTIDS on
AEGIS cruisers and destroyers with Baseline 2, 3, 4, and 5 Combat systems (CG
52-73 and DDG 51-78). Modernization funded in prior years is underway. Our

208

plans call for modernization to continue without lapse to ensure we field the most
effective combatants and maximize service life. Projected costs for this program are:

[In millions of dollars]

Fiscal year:

1998 25.6

1999 63.4

2000 42.0

2001 50.2

Question. If modernization is conducted more frequently to maximize ship service
lives for new, higher capability ships how does this affect the Navy's projected an-
nual new-start constructions for surface combatants necessary to maintain future
force levels?

Answer. Ship modernization is designed to update ship systems — the combat sys-
tem, mechanical and other installed equipment. Our modernization efforts are fo-
cused on keeping critical installed systems technologically up to date and capable
of meeting the evolving threat. However, regardless of how often ship systems are
modernized, the overall maximum service life of the ship itself will remain roughly
30 to 40 years. We can, and do, keep our capabilities up to date via modernization,
but the only way to ensure we maintain adequate numbers of ships to support ovir
commitments is by building new ships.

Sealift Ship Costs

Question. The Navy has 17 LMSR (Large Medium Speed RoU-on/RoU-off) sealift
ships under contract to support Army military operations. Of these, 5 are conver-
sions of used commercial ships and 12 are new construction. The Navy recently dis-
closed a $131 million cost overrun on the conversion ship contracts.

Mr. Douglass, please describe the problem on the LMSR ship conversion con-
tracts?

Answer. The Sealift conversion contracts were awarded in July 1993 with three
ships to National Steel and Shipbuiling (NASSCO) in San Diego, CA, and two to
Newport News Shipbuilding (NNS) in Newport News, VA. The original conversion
contracts had an 18 month deUvery schedule. Contract deliveries have been ex-
tended 15-22 months with both government and contractor responsibility.

The government was responsible for an initial schedule delay of approximately
seven months for two primary causes. First, the U.S. Coast Guard revised and sig-
nificantly increased the fire fighting system requirements to account for the haz-
ardous cargo load. Second, the government furnished class standard equipment de-
tail design information was delivered later than required by the shipyards. This was
caused by accelerating the ship contract awards to support Army and JCS required
delivery dates as well as strong interest in getting work into the industrial base.

The 8-15 months of contractor responsible delays resulted from underestimating
the complexity and difficulty of the design and production effort, inefficient produc-
tion, and a slow start up at both Newport News and NASSCO. NASSCO production
inefficiencies were predominately driven by work arounds due to parts shortages,
and inefficiencies in steel ripout, modification work, and steel fabrication and as-
sembly. NNS had similar production inefficiencies as well as additional significant
detail design and production challenges involving strengthening of the double bot-
toms and stem structures which NNS did not anticipate. These delays are reflected
by the increased cost on the contract sharelines and are the cause of the cost
growth.

Question. The Navy originally recommended that all ships be of new construction,
rather than performing conversion of commercial ships to military specifications.
The Army — in a big hurry at the time — urged conversions to save time and money.
Please compare the cost and time involved in the conversion contracts compared to
the ships in the new construction program. In retrospect, was the Navy right?

Answer. To clarify a point, both conversion and new construction ships are de-
signed and constructed to the same commercial standards. In satisf5dng a military
mission, some systems grow beyond what has been experienced by commercial
ships. For example, the fire fighting system is extremely large due to the amount
of hazardous military cargo. The estimated cost differences at contract award be-
tween an aU new construction program and a program with a mix of new construc-
tion and conversions was very small in favor of conversions. The Navy favored all
new construction because the estimates were considered more predictable and the
all new program provides better support across the entire industrial base. Conver-
sions were included because of the promise of providing the military capability at
a significantly earlier date. This was driven by Army and JCS requirements.

209

The present cost estimates of the five conversions are approximately the same as
the first five new construction ships. The conversions, although somewhat less capa-
ble, vvdll still deliver approximately 15-20 months earlier than a new construction
alternative.

Question. How -will the Navy finance the $131 million overrun?

Answer. The total budget cost growth of $131 million is being included in the fis-
cal year 1998 budget development process and will be included in a future budget
submit to support funding requirements, most likely fiscal year 1998. The funds are
not required at this time to maintain full progress in the program.

Question. Explain the Navy's plan to borrow funds from the LMSR new construc-
tion program in current fiscal years, and how this would affect the full funding of
those ships.

Answer. The LMSRs are fiinded in the National Defense Sealift Fund, a revolving
fund account. In keeping with the established regulations for revolving fund ac-
counts, the existing funds are being applied against current obligations and to cover
expected expenditures under contract. To accommodate the cash flow outlays, new
construction the Consolidated Shipboards/Shorebased Allowance List (COSAL) and
Major Shore Based Spare parts procurement actions will be deferred during fiscal
year 1996 and initiated incrementally in fiscal year 1997 for the new construction
ships which will start delivery in fiscal year 1998.

Question. Describe Newport News Shipbuilding performance on the LMSR con-
tracts. What are the implications for its ability to successfully perform as a second
source on future Navy submarine construction programs?

Answer. Both conversion shipyards underestimated the complexity and difficulty
of the design and production effort, even though they selected the ships, surveyed
the ships, and performed all the preliminary and contract design studies. They also
had a slower than required start-up and had production inefficiencies predominately
driven by work arounds due to parts shortages, and inefficiencies in steel ripout,
modification work, and steel fabrication and assembly. NNS had additional signifi-
cant detail design and production challenges involving strengthening of the double
bottoms and stem structures which, because of the slow start-up, NNS did not an-
ticipate. Therefore, NNS has had the longer delays. It is believed that the difficul-
ties that NNS has with the Sealifl; conversions have no reflection on its ability to
perform submarine work. These commercial ship conversions were performed by a
different workforce and management structure than would be used for submarines.
The ability of NNS to efficiently design and construct submarines is well docu-
mented.

Marine Prepositioning Ship Enhancement

Question. The Marine Corps desires 3 Maritime Prepositioning Ships to support
operations. Congress provided $110 million in fiscal year 1995 to purchase one ship
and authority in fiscal year 1996 to reprogram up to $110 million more for a second
ship. General Oster, what is the requirement for Marine Prepositioning ships? Are
any of these ships in your budget, and if not why?

Navy Answer. The current Maritime Prepositioning Force requirement is for three
squadrons, each supporting a Marine Expeditionary Brigade. We have modernized
the equipment carried aboard (l£u-ger HMMWV's replace "jeeps", Ml tanks replace
older models) and more space is required to maintain the fighting force. We also
need to add an Expeditionary Airfield and Fleet Hospital to each squadron. The Ma-
rine Corps requirement is to add one ship per squadron. These ships are not in the
budget request due to higher funding priorities.

Marine Corps Answer. The requirement for Maritime Prepositioning Ships is 16
ships. Currently, 13 ships are in-service and are organized into three Maritime
Prepositioining Squadrons (MPSRONs). These MPSRONs are strategically posi-
tioned in the Pacific Ocean, Indian Ocean and the Mediterranean Sea. Each
MPSRON contains equipment and supplies to support a Marine Air-Ground Task
Force (MAGTF) of 17,341 Marines.

The Maritime Prepositioning Force Enhancement (MPF(E)) program will add one
ship to each of our three MPSRONs and will provide the warfighting CINC with
the following capabilities: an Expeditionary Airfield, a Fleet Hospital, a Naval Mo-
bile Construction Battalion, MARFOR command element equipment augmentation
and additional sustainment.

Martime propositioning operations are global in nature naval in character and
suitable for employment in a variety of circumstances. Maritime prepositioning pro-
vides employment flexibility and increases the national capability to respond rapidly
to crises. The forward positioning of MPSRONs is an integral part of global naval
presence.

210

Question. What is your acquisition strategy for the $110 million appropriated in
fiscal year 1995?

Navy Answer. The Navy is actively pursuing this acquisition with a three phase
procurement. Phase I is for multiple design contracts. The Request for Proposals
was released in November 1995 and Phase I contract award will occur in April 1996.
Phase II is the award of a detailed design and conversion contract planned for later
this summer. Phase III is an option for five years of operation.

Industry, consisting of ship owners, operators and builders, will develop the ship
designs to ensure maximum utiUzation of standard commercial design and construc-
tion practices and use of proven commercial components and equipment that aire
non-developmental items. The acquisition includes the lead ship and one option ship
and is limited to conversions of existing ships consistent with current authorized
and the appropriated funding. Our studies show that the $110 million in funding
is marginal to provide the capability we need.

Marine Corps Answer. The Defense Appropriations Act for fiscal year 1995 pro-
vided $110 million to acquire and convert the first MPF(E) ship. Acquisition of the
first ship, through an accelerated, streamlined acquisition process, is underway. The
Congressional requirement is to acquire and convert. The acquisition strategy adopt-
ed by the Program Manager, Naval Sea Systems Command, is "design-to-cost" in
order to acquire the most capable ship within current funding constraints.

Question. Does the Marine Corps plan to buy used ships for conversion or to pur-
chase new ships?

Navy Answer. New ships would allow the Department to acquire modem capa-
bility for the long term and to support the industrial base. However, the current
funding limitations, the desire to acquire the capability as soon as possible, and the
wording of the Fiscal Year 1995 Defense Appropriations Act support the conversion
of existing ships.

Marine Answer. The MPF (E) requirement is for 3 ships, one per Squadron. The
acquisition of the first of these ships is underway. Conversion is the most expedi-
tious and affordable method and is, in fact, the only option workable at the $110
million appropriated level. New procurement would require significant additional
funding and would probably delay building by 3 or 4 years.

Question. The Navy has 17 Large Medium-Speed Roll-on/RoU-off (LMSR) ships
under contract in the Sealift Fund to support the Army, of which 5 are conversions
of commercial ships and 12 are new construction. The Navy recently disclosed cost
overruns in the conversion contracts which makes these ships cost about as much
and take about as long to get as new construction ships — yet they are generally less
capable and have a shorter service life. Given this experience, why would the Ma-
rine Corps settle for anything other than new construction for its MPS sealift ships?

Navy Answer. The Department's goal is to fulfill the existing warfighting shortfall
as quickly as possible within existing funding. The fiscal year 1995 Defense Appro-
priations Act provided funding of only $110 million and specified doing conversions.

The requirements for MPS are less demanding than those for the LMSR; therefore
it is easier to acquire a satisfactory MPS capability by conversion. Eight of the 13
existing MPS ships were acquired by conversion.

The LMSR conversions cost approximately the same as new construction, and this
was considered at the time of award. The conversions, including the delays incurred,
will still deliver approximately 15-20 months sooner than new construction. The
Army and JCS desire for earlier delivery was the main factor for including conver-
sions in the Strategic Sealift Program.

The total program cost of a new construction LMSR is approximately $300 mil-
lion. Under ideal conditions, the Department would prefer new construction ships.

Marine Answer. Cost overruns are a concern in any acquisition program. With the
available funding, we believe conversion remains the most expeditious and afford-
able method to support our MPF (E) requirement. New construction for the MPF
(E) program requires additional funding.

Question. How does an Army LMSR differ from what the Marines desire in an
MPS ship?

Navy Answer. The LMSRs being acquired for the Army have approximately three
times the Roll-on/Roll-off square footage of deck area and travel 7 knots faster than
the 17 knots minimum requirements for an MPS ship. LMSRs inefficiently store
most of the containers on the Roll-on/Roll-off decks whereas the MPS require effi-
cient commercial ship style cell guide stowage of up to 1000 containers. The current
LMSRs generally exceed the minimum requirements for an MPS ship.

Marine Answer. An LMSR is designed to carry vehicles. MPS ships carry both ve-
hicles and containers. MPS ships also have a ship-to-shore bulk ftiel and water
transfer capability, which is not present in an LMSR, as well as the ability to off-
load instream and alongside in port. The capability to load and offload both vehicles

211

and containers, as well as bulk Liquids, provides operational flexibility for Marine
Air-Ground Task Forces during crises.

Question. Could the Marine Corps convert a new construction LMSR into a usable
configuration for its MPS requirement?

Navy Answer. It appears possible to modify the LMSR design to fulfill the MPS
requirement although the Navy has not conducted detailed studies for this option.
The LMSRs are larger and the conversion would be focused on modifying the for-
ward cargo hold from RoU-on/Roll-off to install container cell guides to enable the
efficient storage and load/ofQoad of containers.

New MPS ships based on the existing LMSR production lines would not be avail-
able as quickly without disrupting the LMSR delivery schedules. New MPS ships,
based on LMSRs, would also cost significantly more than the $110 million currently
available.

Marine Corps Answer. New construction LMSRs are designed specifically to sup-
port Army requirements. Conversion to meet Marine Corps requirements would re-
quire significant re-design and modification in order to achieve a more balanced load
of combat power and sustainment and the flexibility required for the full spectrum
of amphibious operations.

Sealift Support Equipment

Question. The Navy is acquiring 19 Large Medium Speed Roll-On/RoU-OfT (LMSR)
ships to support Army military operations at a total cost of $6 billion. The Army
recently pubUshed a modernization plan which states "There is currently no on-
hand capability, nor programmed procurement, for roU-on-roU-off discharge facili-
ties." Is Department of Defense (DoD) in the position where it is bujdng $6 biUion
of sealift ships yet it wiU not have the proper ancillary equipment needed to unload
them?

Answer. Subsequent to the publication of the Army Modernization Plan, we have
been working to correct the cargo handling and deployment problem identified. By
reprogramming, the Army is able to fund one roll-on-roU-off discharge facility in fis-
cal year 1996. Funding has been identified to procure additional roll-on-roU-off dis-
charge facilities beginning in fiscal year 1999. As you know, the Congress deleted
$13.3 million, without prejudice, from the fiscal year 1995 President's budget for
roll-on-roU-off discharge faciUties. The loss of the fiscal year 1995 funding has de-
layed the Army's ability to meet this critical need.

Question. Understanding that in the Pentagon, this is considered an Army prob-
lem, how big a problem is this?

Answer. This is an Army problem. The Army must have the ability to discharge
the preposition afloat ships and conduct Logistics-Over-The-Shore (LOTS) oper-
ations. The roU-on-roll-off discharge facilities are used when the Army must off-load
ships in areas where ports are restricted or where there are no ports. Under such
conditions it will take 42 days to discharge the brigade afloat. With the discharge
facility it will take six days. We cannot count on having use of excellent port facili-
ties in the fiiture as we had in Desert Storm in Saudi Arabia. Ports, such as those
in Somalia, are more Likely. In those cases, the discharge faciUties are critical for
force projection.

Question. What is the DoD doing to address this shortfall?

Answer. The Army has identified fiscal year 1996 funding and has also funding
procurement of roU-on-roU-off discharge facilities in the Program Objective Memo-
randum process that is currently being worked within the Army. However, because
of affordability, the first year of funding is fiscal year 1999.

Question. If Congress were interested in fixing this problem, so that the 19 LMSR
ships may be optimally utilized once delivered, how much additional funding would
be required? Could the Navy execute this program within its Sealift fund? Is the
Navy opposed to executing this program within the Sealift fund, if sufficient finan-
cial resources are made available?

Answer. The near term shortfall for RoU-On/RoU-Off discharge facilities as re-
ported by the Army is for nine systems, three of which are required to support the
19 LMSRs. These Army systems are based on current technology and are capable
of operating in sea state 2 and reportedly cost $5 million each. The JCS and CINCS
have requested both the Army and the Navy to develop systems capable of operating
in heavier seas of sea state 3. This system would require development and is cur-
rently estimated to cost $50 million to develop a prototype.

The National Defense Sealift Fund (NDSF), as currently structured in law, can
acquire only ships. There are no excess funds currently available in the NDSF. The
NDSF is authorized to perform research and development of sealift systems and if
funded could be used to develop the prototype sea state 3 Roll-On/Roll-Off discharge

212

facility. If the law were modified and funds were provided, the Navy could acquire
this system.

Submarine Modernization

Question. The modernization of Navy submarines, to include completion of the
third SEAWOLF submarine and construction of the New Attack SuDmarine, was
very controversial last year. The Congress challenged the Administration's sole
source acquisition plan for the New Attack Submarine, and reqviired that 2 ship-
yards be in the program instead of just one. The Navy's fiscal year 1997 budget con-
tains $35 million that would facilitate the 2 yard strategy, but omits the $504 mil-
lion that would be needed to actually fund a competitive second ship. Mr. Douglass,
please describe the Navy's revised plan for competitive acquisition of the New At-
tack Submarine, compared to your original plan a year ago.

Answer. The Navy is restructuring the New Attack Submarine program to comply
with the competition requirements in fiscal year 1996 legislation. The Navy envi-
sions this to be a long term competition, similar to that being used in the DDG 51
program.

To support construction of a New Attack Submarine at Newport News in fiscal
year 1999, and to ensvire that competition for future submarines is effective, the
Navy is taking the following actions:

Obligating $10 million from fiscal year 1996 RDT&E,N funding for New Attack
Submarine design related work at Newport News;

Initiating design transfer actions with about $9 million from fiscal year 1996
SCN;

Procuring the first increment of long lead components to support building a fiscal
year 1999 submarine at Newport News; and

Programming $35 million in fiscal year 1997 to continue the design transfer to
Newport News.

The introduction of a second shipbuilder in fiscal year 1999 and long term com-
petition require a higher building rate earUer than the Navy had planned for in this
program. It wiU be difficult for the Navy to fund the submarine construction plan
required by the Fiscal Year 1996 National Defense Authorization Act in the context
of other modernization priorities.

Question. How much more does your revised plan cost, compared to the Adminis-
tration's Bottom-Up Review strategy of building 30 ships sole source at Electric
Boat?

Answer. Implementing the four submarine plan in the Fiscal Year 1996 National
Defense Authorization Act will require an additional $3.8 billion in SCN funding
through fiscal year 2001, of which $504 million would be needed in fiscal year 1997.
Substantial additional RDT&E funding will also be needed to accelerate the inser-
tion of appropriate new technologies into the four submarines. Introduction of com-
petition will initially increase program costs, but provide the potential for long-term
savings.

Question. The Navy seems to be agreeing with the Congress on a competitive
strategy. Do you, in retrospect, think that the Administration's Bottom-Up Review
was wrong? Or is the Navy just agreeing with the Congress to be "politically cor-
rect?"

Answer. The original submarine building plan represented in the Fiscal Year 1996
and Fiscal Year 1997 President's Budget request is an affordable plan that builds
capable nuclear attack submarines which meet JCS mission requirements. This
building plan also preserves the option for competition when submarine building
rates increase in the future by maintaining two nuclear capable shipbuilders.

The Navy is restructuring the New Attack Submarine program to support the
competition requirements in fiscal year 1996 legislation. The introduction of a sec-
ond shipbuilder in fiscal year 1999 and competition outlined in the Fiscal Year 1996
National Defense Authorization Act calls for a higher building rate earlier than the
Navy had planned for in this program. It will be difficult to afford the plan directed
by the Congress in the context of other modernization priorities.

Question. If there were no constraints on you, what would be your recommenda-
tion today as the best way to proceed with the New Attack Submarine program?

Answer. The Navy would proceed with construction of the lead New Attack Sub-
marine in fiscal year 1998 at Electric Boat Corporation and build the second ship
at Newport News Shipbuilding in fiscal year 1999. Future nuclear attack sub-
marines would be competitively procured as required by the Fiscal Year 1996 Na-
tional Defense Authorization Act.

The Navy would increase core technology investment to ensure that promising
new technologies are matured and incorporated in future nuclear attack sub-

213

mairines. The Navy's preliminary estimate is that an additional investment of $60
million per year in RDT&E,N might be required. Additionally, the Navy would fund
the technologies identified in the Secretary of Defense Report on Nuclear Attack
Submarine Procurement and Submarine Technology that increase the margin of
submarine acoustic superiority and improve affordability and producibility. Accel-
erating these technologies for incorporation on submarines as early as fiscal year
1998 would require an investment of an additional $377 million in RDT&E from fis-
cal year 1997 through fiscal year 2003.

Question. The House National Security Committee desires that the Navy not com-
mit to production of 30 New Attack Submarines at this time, but rather commit to
construction of just 4 prototypes (2 from Electric Boat and 2 from Newport News)
that will be used to determine the "objective" submarine configuration for serial pro-
duction. Would you say this is the Navy's plan?

Answer. No. As previously stated by the Navy and recently confirmed by an inde-
pendent submarine technology assessment panel, there are no technologies that re-
quire or justify the expense of building ftiU-scale prototype ships. Advances in com-
puter modeling/simulation and land based testing preclude the need, in most cases,
for expensive ftill-scale prototyping of ships for at-sea testing.

The New Attack Submarine design provides flexibility for affordable insertion of
appropriate new technology to respond to changing missions, threats and resources.
Innovations such as open systems architectxire electronics and the modular isolated
deck structure, permit affordable incorporation of new technology as it becomes
available. Because of its flexible design, the New Attack Submarine itself has the
capability to serve as a test bed for prototype equipment.

The experience of the SSN 688 class evolution has demonstrated that significant
improvements can be made wdthout dedicated prototypes. For example, improve-
ments made to the SSN 688 class include incorporation:
— Vertical launch tubes;
— Full under-ice capability;

—HARPOON and TOMAHAWK missiles and MK 48 ADCAP torpedoes;
— Over-the-horizon targeting upgrades to the ship's fire control systems;
— Advanced Sonar Systems;
— Long life, quiet reactor plant;
— Quieted propulsion plant.
Question. Where do you agree and where do you differ in the Navy's current New
Attack Submarine Program compared to the guidance from last year's Authorization
conference?

Answer. The Navy fully supports competitive acquisition of New Attack Sub-
marines and is restructuring the program to support the competition requirements
in fiscal year 1996 legislation. The Navy has already brought Newport News into
the New Attack Submarine program and is taking actions now to support building
a New Attack Submarine at Newport News in fiscal year 1999.

The Navy also agrees that an increase in core submarine technology research and
development funding is needed to identify, matiire and incorporate appropriate new
technologies in future nuclear attack submarines. The Secretary of Defense Report
on Nuclear Attack Submarine Procurement and Submarine Technology identifies
technologies that are candidates for insertion in New Attack Submarines.

The Navy does not believe that there are technologies available at this time that
will significantly reduce the acquisition cost of futvire submarines and at the same
time provide more capability.

Question. The fiscal year 1997 budget does not fully fund the balance required for
construction of the third and last SEAWOLF submarine; it defers $105 million of
this cost into fiscal year 1998. What is the rationale for the Navy's strategy in this
regard, and is there an adverse cost impact by spreading the remaining cost over
two fiscal years instead of just one?

Answer. The Department of Defense has assessed the alternatives and determined
that splitting the funding of SSN 23 between fiscal year 1997 and 1998 allows the
Department to meet other high priority fiscal year 1997 requirements.

This profile will not affect the procurement cost of SSN 23 of the SEAWOLF pro-
grams ability to stay within the cost cap. However, adding an additional year to the
fiinding profile does increase SSN 23's risk of termination liability and vulnerability
to additional budget assessments.

AmcRAPT Carrier Modernization

Question. The new DoD "outyear" plan contains about $600 million for long lead
construction of a new aircraft carrier — CVN 77 — even though most of the funds
needed for construction of this ship are unbudgeted. The fiscal year 1997 budget

214

also contains $6 million to begin development of the subsequent aircraft carrier
CVX-78. The Congress provided funds for CVN-75 and CVN-76 as add-ons to the
budget request. Secretary Dalton, what are the Navy's plans for building new air-
craft carriers?

Answer. The attached chart shows a phased replacement plan that maintains the
Navy at a ll-i-l force level. The DoD plan as announced in the BUR, is to build to-
ward a long-term force of 11 active carriers and maintain a 12th unit through the
FYDP for training, reserve, and occassional deplo3Tnents.

215

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216

Question. Will the Navy include in its budget request to Congress all the funds
needed for construction of each of these ships? Given your recent inability to hold
outyear AEGIS shipbuilding requests at a constant rate of 3 ships per year (a ship
costing $650 million), what gives you confidence in your ability to budget for an air-
craft carrier replacement (a ship costing $4 billion)?

Answer. The Navy is addressing carrier recapitalization plans as part of POM-
98. The fiscal year 1998 budget request will address the fiscal requirements and re-
lated other program trade-off decisions that must be faced in order to maintain car-
rier force structure at Bottom Up Review levels. With respect to CVX, the Navy is
investigating what possible new designs are most appropriate and affordable. We
are looking at everything — propulsion, catapult capability, how it will be built, what
kind of future aircraft it will have to carry and support well into the second half
of the 21st century, and how many sorties it must be capable of generating.

Question. Is it true that the Navy has retired all other nuclear powered surface
ships due to the high cost of refueling, operating and maintaining such vessels? If
so, why is CVN-77 planned to be nuclear powered?

Answer. No nuclear powered aircraft carrier has been or is planned to be retired
until well into the next century. Of the nine nuclear powered cruisers which have
served the Navy, five have been inactivated since 1993, and two more are scheduled
for inactivation before the end of the century. The two remaining cruisers are cur-
rently scheduled to continue service until about 2003. The retired cruisers were re-
moved from service due to obsolescence of their combat suite and the high cost of
modernization. Note that the other classes of non-nuclear cruisers with the same
obsolete combat suites have also been retired.

Question. The GAO indicates that the investment-related costs of a nuclear pow-
ered aircraft carrier are about double the costs of a conventionally powered ship,
and that the ship itself is more costly to operate and support. Discuss the pros and
cons of building nuclear rather than conventionally powered aircraft carriers in the
post cold war environment?

Answer. The principal investment cost differential of a nuclear powered aircraft
carrier over a fossil-fiieled carrier is much less than a factor of two. Studies indicate
that the life cycle cost difference between nuclear and conventional powered carriers
of similar capability is less than 15% not including disposal costs. No current non-
nuclear carrier design comparable to NIMITZ Class exists and no non-nuclear car-
rier has been build in more than 30 years. Hence, a comparison of investment cost
for NIMITZ class and a non-nuclear carrier having similar capability is speculative
and highly questionable. A portion of the extra investment cost for a nuclear carrier
is due to the nuclear cores which are bought as part of the investment cost and pro-
vide a propulsion energy supply to operate the ship in excess of 20 years. Nuclear
propulsion provides tactical and strategic advantages in battle and in crisis response
through essentially unlimited high speed endurance and elimination of the tie to a
vulnerable propulsion fuel supply. The up-front investment in nuclear propulsion,
and the cores in particular, captures a built-in 20-i- year energy supply which is
independent of the cost or availability of future oil supplies. This unique capability
has important applications in the post cold-war warfighting environment.

Question. What is the Navy doing to eliminate nuclear power from CVX 78? If it
is desirable to eliminate nuclear power from CVX 78, why has the opportunity been
missed for the next carrier (CVN 77), for which construction funds will not be budg-
eted until after the next century?

Answer. The purpose of the CVX 78 development program is to examine all facets
of technologies which might be applied to future naval aviation platforms to be built
starting in the 2006 time frame. Nuclear propulsion is one of several propulsion con-
cepts being evaluated for potential application in the CVX 78. CVN 77 is planned
in the 2002 shipbuilding program to maintain carrier force level. To avoid the con-
siderable difficulties of creating a single ship class through development of a conven-
tionally-powered NIMITZ type carrier and to preclude prematurely committing the
CVX 78 to evolving technologies, the CVN 77 is being planned as a modified CVN
76 which incorporates as many transitional technologies as possible.

Question. How do conventionally powered escort ships in the battle group con-
strain the mobility of a nuclear powered carrier?

Answer. The additional petroleum fuel capacity of a nuclear powered carrier miti-
gates the impact of not having nuclear powered escorts. Nuclear powered carriers
can and have refueled their escorts enroute, and still arrived on station with sub-
stantially more reserves of aircraft fuel for operations than conventionally powered
carriers.

Question. Do the nation's shipyards have sufficient industrial base capabilities to
begin building a transitional, conventionally powered aircraft carrier in 2002 instead
of a nuclear powered one?

217

Answer. Industrial base capabilities could probably support building a convention-
ally powered aircraft carrier in 2002 if a design were available. However, no current
non-nuclear carrier design comparable to NIMITZ Class exists and no non-nuclear
carrier has been built in more than 30 years. Design work and the attendant sub-
stantial one time funding for such a ship would be required immediately to support
a 2002 ship and might undesirably build a single ship class as there would likely
only be sufficient time to develop a conventional propulsion plant in a NIMITZ class
platform. The CVN 77 is being planned as a modified CVN 76 which incorporates
as many transitional technologies as possible. This plan precludes prematurely com-
mitting the CVX 78 to evolving technologies.

Question. Have conventionally powered aircraft carriers ever failed to accomplish
a mission or achieve a goal because of propulsion plant or sustainability limitations?

Answer. No. However, the Navy understands and considers the limitations of non-
nuclear carriers and consequently avoids assigning them tasks beyond their capa-
bihty.

Question. What is the extra (incremental cost of nuclear propulsion on an aircraft
carrier, and what exact benefit does this provide in the post-cold war warfighting
environment?

Answer. The principal investment cost differential of a nuclear powered aircraft
carrier over a fossil-fueled carrier is much less than a factor of two. Studies indicate
that the life cycle cost difference between nuclear and conventional powered carriers
of similar capability is less than 15%. No current non-nuclear carrier design com-
parable to NIMITZ Class exists and no non-nuclear carrier has been built in more
than 30 years. Hence, a comparison of investment cost for NIMITZ class and a non-
nuclear carrier having similar capability is speculative and highly questionable. A
portion of the extra investment cost for a nuclear carrier is due to the nuclear cores
which are bought as part of the investment cost and provide a propulsion energy
supply to operate the ship in excess of 20 years. Nuclear propulsion provides tactical
and strategic advantages in battle and in crisis response through essentially unlim-
ited high speed endurance and elimination of the tie to a vulnerable propulsion fuel
supply, the up-front investment in nuclear propulsion, and the cores in particular,
captures a built-in 20+ year energy supply which is independent of the cost or avail-
ability of future oil supplies. This unique capability transcends the peuliculars of the
post cold-war warfighting environment.

Question. Given the Navy's recent experience in a number of operations other
than war, is the Bottom Up Review number of 11 active aircraft carriers an accurate
statement of your requirement to adequately support future "presence" and
warfighting missions?

Answer. A force of fifteen (15) carriers is required to meet geographical Com-
mander in Chief warfighting and presence requirements. The Bottom Up review de-
termined that a force of "11 aircraft carriers (active) and 1 aircrafi; carrier (reserve/
training)" could meet Untied States national security and presence requirements,
with an acceptable level of risk.

Question. Under current plans, the older/conventionally powered aircraft carrier
fleet will be retired and be replaced by an all nuclear powered fleet. What are the
implications for homeporting a U.S. aircraft carrier in Japan?

Answer. Current Navy plans provide for maintaining a non-nuclear powered car-
rier in Japan well into the next century. However, U.S. nuclear powered warships
have visited Japan for three decades on a routine basis demonstrating that there
are no technical considerations which would preclude homeporting a nuclear pow-
ered warship in Japan. Also, the Japanese have extensive experience wdth nuclear
power since over 3(3% of their electricity is provided by nuclear power. Accordingly,
the U.S. Navy vidll address this issue when and if it becomes necessary.

Question. Eventually the Navy will decommission a nuclear powered aircraft car-
rier. What is the "ballpark" cost of such a decommissioning and what are the envi-
ronmental costs and considerations?

Answer. With the commitment to nuclear powered carriers in service or under
construction, the requirement for inactivation already exists, but will not occur be-
fore about 2013 for USS ENTERPRISE and about 2025 for the lead ship of the
NIMITZ Class (CVN 68). The lead ship will bear the one time cost to develop and
facilitate inactivation capability for the NIMITZ Class nuclear carriers. A rough
order of magnitude estimate of $807-$942 miUion (fiscal year 1996 dollars) for CVN
68 was provided to GAO in 1993, which includes today's environmental costs and
considerations within which such inactivation is feasible. An extrapolation for CVN
77 in 2055 would be $440 million-$530 million (fiscal year 1996 dollars) considering
the learning curve of nine prior ships and advanced technologies. The estimate
scope includes costs for defueling of reactors, dismantling and disposing of reactor
plants, and recycling the remaining ship.

218

Overhauls of Nuclear Powered Aircraft Carriers

Question. The first of the Nimitz class nuclear powered aircraft carriers will un-
dergo refueling and complex overhaul in fiscal year 1998 for an estimated cost of
$2.2 billion. From that point on, every 3 to 4 years a Nimitz class carrier will re-
quire such an overhaul. Besides the huge costs involved, during fiscal years 1999
through 2001 the nuclear powered force will spend 2 out of 5 quarters in mainte-
nance, compared to the conventionally powered force which will spend 1 out of 10
quarters in maintenance.

How will the funding required for aircraft carrier refuelings impact the Navy's
new construction shipbuilding program for all ship classes?

Answer. Navy has planned for refueling of Nimitz class nuclear powered aircraft
carriers in its ship construction (SCN) appropriation. As such, these refuelings are
an integral part of our long-term plans and we address the costs as part of our over-
all force structure assessment process. As you point out, the $2.2 billion cost for
these refuelings is not cheap. But, the cost is less than half that of a new carrier
and it provides an additional 25 years of service life to the carriers. Furthermore,
nuclear refuelings promote the industrial-base, thus lowering costs for nuclear sub-
marine and carrier procurements.

Question. As discussed earlier, the Navy has a shortfall in its shipbuilding account
simply to build the ships required to sustain the Bottom Up Review force of 346
ships. The Navy also thinks it needs more than 346 ships. Describe what happens
to the shortfall as complex aircraft carrier overhauls enter the picture.

Answer. As discussed above. Navy has planned and programmed for carrier
refueUngs in the SCN account. The Navy has already incorporated the impacts of
these refuelings, so they do not create a snortfall.

Question. When will the Navy reach the point where new carrier construction,
complex overhaul of carriers, and the first deactivations of nuclear powered carriers
begin to overlap?

Answer. The Navy will deactivate the first nuclear powered aircraft carrier, USS
ENTERPRISE, in about 2013, after 52 years of service to our nation. In the years
ahead, the Navy expects to build an aircraft carrier each 4 to 5 years to maintain
to force level in accordance with 11+1 (eleven active plus one conventionally pow-
ered reserve carrier— USS JOHN F. KENNEDY).

The Navy will begin a cost effective refueling overhaul effort on the NIMITZ Class
aircraft carriers in 1998, beginning with the USS NIMITZ. This refueling overhaul
will accomplish two major goals to get the most out of these capital ships of the
Navy. First, we will extend the life of each ship from the originally designed period
of 30 years, to approximately 45+ years. The initial reactor cores in NIMITZ will
have provided 23 years of propulsion at the time of refueling; a substantial invest-
ment return on the originally expected 13 year life. Secondly, we will take this three
year process and simultaneously invest in a modest upgrade to the war fighting and
crew support facilities, helping to keep these aging ships equivalent to their newer
counterparts. This upgrade is similar to that accompUsned lor the CVs in the Serv-
ice Life Extension Program.

The first time that the Navy will have all three events happening simultaneously
will occur some point beyond 2013. The Navy will be working to minimize the con-
current build periods and refueling periods in the years before 2013, recognizing
that some overlap will inevitably occur. The time ail three events could occur is be-
yond 2020 when the next nuclear carrier (USS NIMITZ) reaches the end of her serv-
ice life.

Question. Describe the impact on operating tempo and readiness as the nuclear
powered aircraft carrier force spends a higher proportion of time in maintenance in
future years.

Answer. As the Nimitz class aircraft carriers begin the refueling process in future
years, OPTEMPO and readiness will remain commensurate with toda/s levels.
PERSTEMPO and turnaround ratio will stay within goals.

DDG 51 Aegis Destroyers

Question. The fiscal year 1997 budget requests $3.4 billion for construction of four
DDG-51 Aegis destroyers. Mr. Douglass, the Committee understands that one of
your goals is to get more stability into the Aegis shipbuilding program. Please dis-
cuss your plans.

Answer. The current shipbuilding industrial base is not as healthy as in the past.
For instance, since the early 1980s, nationwide shipbuilding employment has
dropped from 120,000 in 1980 to approximately 60,000 today. For the Aegis DDG
program specifically, the procurement rate has dropped by 45 percent since the pro-
gram began in 1985.

219

As we proceed to develop our long term acquisition strategy, one of our key objec-
tives is to stabilize the shipbuilding industry — and do so in a cost effective manner,
balancing the needs of the Navy and industry.

Our current plan is to develop a two-phased approach to stabilizing the ship-
building industry, as summarized below:

Near-term: For fiscal years 1996 and 1997, award a two-year contract, includ-
ing options, for the procurement of six ships, equedly dividing construction be-
tween Bath Iron Works and Ingalls Shipbuilding;

Long-term: For fiscal year 1998 and out, the Navy is investigating the feasi-
bility of a four-year DDG procurement, with options, for the stable production
of approximately 12 ships, to cover shipbuilding requirements in fiscal years
1998 through 2001.
The above approach will provide stability to the currently fragile shipbuilding in-
dustrial base, which includes both shipbuilders and the hundreds of suppliers that
provide equipment and engineering to support the DDG shipbuilding program.

If implemented, the long-term acquisition strategy is expected to result in ship av-
erage unit cost savings, reduce disruptions from hiring and layoff cycles, level-load
employment, and encourage capital investments; thus improving the performance,
efficiency, and viability of the shipbuilding industrial base.

The House Defense Appropriations Subcommittee directed a report to Congress on
the long-range DDG 51 acquisition strategy, due by February 1, 1996. The lateness
of the report is due to the timing of the fiscal year 1996 Defense Authorization Act,
which required the Navy to rebaseline the fiscal year 1996 and fiscal year 1997 pro-
curement strategy and financing plan. Once this was completed, a detailed analysis
and cost estimate for options being considered based on the request from Congress
was initiated. This effort is nearly complete, and a full report will be provided to
Congress by May 31, 1996.

Question. Explain why the Navy plans to submit a reprogramming request in fis-
cal year 1996 to implement the 4-ship buy for fiscal year 1997. How much is in-
volved, and what will be the source of funds to pay for it?

Answer. The fiscal year 1996 Authorization Act approved 3 DDGs in fiscal year
1996 and 3 DDGs in fiscal year 1997, however the Fiscal Year 1996 Appropriations
Act only provided sufficient funds for two DDGs ($2,169 million) — witn report lan-
guage "for the purchase of three DDG class destroyers"

To satisfy Congressional intent for 6 six DDGs over the two-year period fiscal
years 1996 and 1997, we intend to award contracts based on the following plan:
Fiscal year 1996:

Two ships fiiUy funded at $2,169 million plus $104 million for 3rd DDG ad-
vance procurement. Note: A total of $709 million is required for the 3rd DDG
in fiscal year 1996. This is the incremental cost for the third ship and is not
the unit cost, which is approximately $945 million per ship for the six-ship pro-
curement.
Fiscal year 1997:

Three ships fiilly funded for $2,876 million plus $605 million balance for 3rd
fiscal year 1996 DDG ... for total 4 ships in fiscal year 1997.
A reprogramming request was sent to Congress for $104 million required in fiscal
year 1996 to implement the above plan. These funds are required for advance pro-
curement and engineering to begin the third DDG in fiscal year 1996. The source
of funds planned are from the Standard Missile Block III program.

Question. Does the Navy plan to continue to "allocate" ships between the two ship-
yards involved in this program, rather than competing them?

Answer. Yes. The Navy began an allocation (vice competition) strategy for the
DDG program to avoid pricing strategies from the shipbuilders that were not in the
Department's best interest. For example, the Navy found that allocation provided
a better workload balance between both shipbuilders, and helped in maintaining the
fragile shipbuilding industrial base for this critical defense program. The objective
of allocation was to award contracts to both shipbuilders at a fair price and profit
level, with an emphasis on producing the Navy a destroyer with very high product
performance and quality.

The Navy recently conducted a DDG acquisition study to look at the long-term
acquisition approach for the DDG program, and found that the best strategy — called
Competitive Dual Source Allocation — would provide the right mix of competition (for
profit levels) and allocation (to protect the shipbuilding industrial base).

Congress recognized the benefits of allocation for the DDG program when it di-
rected the Navy in the Fiscal Year 1996 Defense Authorization Act to continue DDG
ship allocation by awarding contracts in fiscal year 1996 and fiscal year 1997 using
the same "pattern and sequence" used in the fiscal year 1994 and fiscal year 1995
allocation procurement.

220

Question. How much excess capacity will exist at the two shipyards under your
current plan? Are two yards still essential to support the Navy shipbuilding plan?

Answer. Excess capacity (or available capacity) depends upon many factors, such
as other (non-DDG) Navy work and commercial shipbuilding business available to
the shipyards. For example, Bath Iron Works has very Uttle excess capacity com-
pared to Ingalls Shipbuilding.

Shipbuilders, however, always attempt — often based on the Navy's shipbuilding
plans — to structure their emplosrment and capital resources to optimize business op-
erations. Therefore, only in terms of large facilities, Uke drydocks or building ways,
in there "excess capacity".

Available capacity is not bad. The Navy benefits when private shipyards have the
capacity to be responsive to our oftentimes changing needs. For example, it is impor-
tant for shipyards to reach rapidly to higher procurement levels; to have the capac-
ity to compete for new shipbuilding programs; and in time-critical circumstances, for
national emergencies to repair battle damage.

In the DDG acquisition study, which was conducted with guidance fi-om a panel
of outside experts from industry and academia; these experts recommended that the
Navy maintain two shipbuilders (Bath Iron Works and Ingalls) to complete the re-
maining DDG program, based on:

National Security: Bath Iron Works and Ingalls are the only two shipbuilders
with experience in building complex surface combatants like the Aegis DDG de-
stroyer;

Future Competition: The Navy needs to maintain at least two shipbuilders that
can compete for futvu-e svirface combatant acquisition programs such as LPD-17,
SC-21, and the Arsenal Ship.

Question. Last year, the Committee tasked the Navy to develop a more long term
acquisition strategy for DDG 51 shipbuilding. What has been done in this regard?
Discuss your preferred strategy of "contracts with annual option; explain how much
more could be saved under a multiyear contract; and explain why the report to Con-
gress is so late, and when it will be submitted.

Answer. The House National Security Appropriations Subcommittee directed a re-
port to Congress on the long-range DDG 51 acquisition strategy, due by February
1, 1996. The lateness of the report is due to the timing of the Fiscal Year 1996 De-
fense Authorization Act, which required the Navy to rebaseline the fiscal year 1996
and fiscal year 1997 procurement strategy and financing plan. Once this was com-
pleted, a detailed analysis and cost estimate for options being considered based on
the request from Congress was initiated. This effort is nearly complete, and a fuU
report will be provided to Congress by May 31, 1996.

Question. Last year, the Navy indicated it needed the Congress to make a "ship
cost adjustment" of $94 million for the 1994 funded ships, which was denied by Con-
gress. What is the status of this overrun? How has the Navy avoided "descoping"
the contract and delivering ships that lack proper equipment?

Answer. Last year for the 1995 Ship Cost Adjustment (SCA), the Navy requested
$28.9 million and $94.1 million in program years fiscal year 1994 and fiscal year
1995, respectively; this request was denied by Congress. The House and Senate De-
fense Appropriations Subcommittees were briefed on the status of the fiscal year
1994 and fiscal year 1995 shortfalls in August and September of 1995. The Navy
also forwarded letters to all four Congressional Defense Committees detailing the
shortfEill and our commitment to fund these requirements — since they resulted in
the deferral of necessary warfighting capabilities and required repair parts.

The items descoped in fiscal year 1994 and fiscal year 1995 were selected based
upon the need to maximize program flexibihty and minimize overall cost impact to
the program. Deferring procurement of these items therefore provided sufficient lead
time to meet equipment deUvery and installation shipbuilding schedules, and would
not — if fianded in the 1995 SCA — result in overall program cost increases.

The current status of the items descoped in fiscal year 1994 and fiscal year 1995
is that savings within the DDG program identified in the 1995 SCA have been used
to procure the most time critical systems on the descope list. Subsequent to last
year's SCA request for funds to buy back the descopes, several significant factors
have impacted this year's assessment, such as reductions in inflatation, lower ship-
building escalation estimates and the plan by OPNAV to replace Phalanx (CIWS)
with the new Enhanced Sea Sparrow Missile (ESSM) system on the fiscal year 1995
ships. While the 1996 SCA is not yet complete, DDG 51 program assets identified
in fiscal year 1994 and fiscal year 1995 almost completely resolve the remaining
descope requirements for these ships. However, there is potential in the 1996 SCA
for increased Estimates at Completion and new scope requirements.

221

LPD 17 Ship Program

Question. Last year, Congress appropriated $974 million for construction of the
first LPD 17 ship, accelerating its production by two years and saving the taxpayer
$828 million over the life of the program. The LPD 17 class of ships is a competitive
program which will allow the Navy to retire 41 current ships and reduce manpower
by 7,800. The Navy plans to buy the second ship in fiscal year 1998. What is the
status of the LPD 17 program, and when do you expect to award a contract for this
lead ship?

Navy Answer. The Department is preparing for a June 1996 Milestone II Defense
Acquisition Board review. A Request for Proposals (RFP) was released on April 8,
1996. Contract award for detail design and construction of the lead ship is antici-
pated in late summer 1996, after the Milestone review.

(Note: The $828 million saving identified in the opening remark only occurs if the
entire profile is accelerated by two years. As a result of Congressioned action to fund
a ship in fiscal year 1996 and resultant funding constraints, the Department of the
Navy moved the last ship, origin£dly planned for fiscal year 2005, up to fiscsd year
1996. This still results in savings of several hundred million dollars.)

Marine Corps Answer. The LPD- 17 Class program is proceeding on schedule. The
Navy is scheduled to award a contract this June for the lead ship.

Question. Will the winner of the competition be awarded all 12 ships of the class?

Answer. The initial contract is for a lead ship with options for up to two follow
ships. Assuming successful execution of the initial contract, it is expected that follow
on production for the remaining ships of the class will be negotiated with the winner
of the original competition.

Question. Why did the Navy not budget for a second LPD 17 ship in fiscal year
1997?

Navy Answer. In the 1960s and early in the 1970s, ships were often budgeted in
the first, second, and subsequent years of a program. This sometimes led to ship-
yards initiating construction before the detail design was sufficiently complete. Our
experience was that completing greater portions of detail design efforts before initi-
ating construction leads to cost avoidance benefits because this avoids remanufac-
turing portions of constructed assemblies that are later revised in subsequent design
efforts. This design and construction experience led to the practice since the 1970s
of pacing a gap year between the lead ship of a class and the first follow ships of
a class. The Navy followed this practice for the LPD 17 program.

There are other techniques to control production and eliminate the costs of re-
manufacturing which did not exist in Navy shipbuilding programs in the 1960's.
Construction of the lead ship will not begin until after a Production Readiness Re-
view with the Full Service Contractor. The date for this review, which will be in-
cluded in the competitive proposals now being prepared, will be based on the con-
tractor's plan for detail design and construction of the lead ship. Phasing the start
of construction of the lead ship. Phasing the start of construction of the lead ship
and the start of construction of follow ships after this Production Readiness Review
will preserve the benefits of completing significant portions of detail design efforts
before initiating construction. Also, modern design tools reflecting the 1990s state
of the art in computer systems and information technology provide for significantly
improved depth of design completion before beginning construction compared to the
manual design processes of the 1960s and 1970s. The application of these modern
design tools in the LPD 17 program reduces any remanufacturing risk compared to
the shipbuilding experience of earlier eras.

Marine Corps Answer. It is traditional to have a gap year after the procurement
of the lead ship to allow the design to mature as the first ship is being constructed.

Question. Last year, before Congress acted, the Navy planned to initiate produc-
tion of LPD 17 in fiscal year 1998. Was there a two fiscal year gap in fian<ing be-
tween the first and second LPD 17 ships in your original plan?

Navy Answer. In the fiscal year 1996 budget plan, the LPD 17 Class lead ship
contract award was planned in fiscal year 1998, followed by a single gap year in
fiscal year 1999, with the first follow ships planned for award in fiscal year 2000.

Marine Corps Answer. The previous procurement plan had LPD-17 being pro-
cured in fiscal year 1998 and LPD- 18 and LPD- 19 being procured in fiscal year
2000.

Question. If Congress were to provide additional funds for a second LPD 17 ship
in fiscal year 1997, could such funds be prudently executed?

What would be the cost savings, and would they be attributable to anything other
than inflation?

When is the earliest (month and year) that funds for a second ship would be obli-
gated if funded in fiscal year 1997?

222

Answer. Funds could be prudently executed in fiscal year 1997 while preserving
the benefits of completing portions of detail design efforts before initiating construc-
tion.

There are programmatic and cost advantages of funding the first LPD 17 follow
ship in fiscal year 1997, while continuing the current plan for a follow ship in fiscal
year 1998. Early in the lead ship detail design, material and equipment selections
will be made for items that have relatively long manufacturing lead times, such as
reduction gears. Procurement of these longer lead time items always proceeds in
parallel with detail design efforts. A second LPD 17 ship in fiscal year 1997, will
allow for the economic ordering of two ship sets of materied and equipment.

This procurement strategy would result in program costs savings. A fiscal year
1997 follow ship would reflect savings associated with an increased production base
and economic order quantities of material and equipment and is estimated to cost
$765.0 million. A fiscal year 1997 ship would reduce the estimated cost of the fiscal
year 1998 ship by approximately $23 million, also due to economies of scale in pro-
duction base efficiency and economic order quantity. There would also be a substan-
tial seven year inflation cost avoidance for a fiscal year 1997 follow ship, because
this follow ship would be accelerated from fiscal year 2004, avoiding an inflation in-
crease of approximately 15 percent in the cost of the ship, a reduction of more than
$100 million. The combined economic and inflation reductions for including an LPD
17 class follow ship in the fiscal year 1997 budget is approximately $125 million.

A contract option for a fiscal year 1997 ship would be awarded in fiscal year 1997
to achieve the programmatic and cost benefits of this procurement strategy. In order
to maintain flexibility with the prospective design, materigd ordering, and produc-
tion plans proposed by the winning Full Service Contractor, the fiscal year 1997 con-
tract option award date would be timed to best meet the contractor's schedule. Simi-
larly, the ship production efforts for a fiscal year 1997 follow ship, with an option
award in fiscal year 1997, would still be timed to the Unkage of the Production
Readiness Review for the lead ship and would be integrated with production sched-
ules for the lead ship and the follow ship planned in fiscal year 1998. Material or-
dering of a fiscal year 1997 ship would reflect economic procurement in conjunction
with the fiscal year 1996 lead ship, and production of a fiscal year 1997 ship would
reflect economic construction sequencing in conjunction with the fiscal year 1996
lead ship and the planned fiscal year 1998 follow ships.

Arsenal Ship

Question. The budget requests $41.4 million to begin a new program called the
Arsenal Ship. The Navy requests $25 million and DARPA requests $16.4 million.
The Arsenal Ship would contain large numbers of precision weapons used to aug-
ment attack by other Navy warships. Mr. Douglass, please explain the Arsenal Ship
requirement and the advantages such a ship would provide to the Navy. How many
ships do you plan to build?

Answer. The basic requirement for the Arsenal Ship is to satisfy joint naval expe-
ditionary force warfighting requirements in regional conflicts by providing the the-
ater commander with massive firepower, long range strike, and flexible targeting
and possible theater defense through the availability of hundreds vertical launch
system (VLS) cells. The objective is to build a ship with massive firepower — able to
carry a combination of precision guided missiles — which increases the capabilities
of joint forces in theater.

With steadily decreasing overseas basing and a shrinking military budget, the
United States must maintain the ability, in concert with allied forces, to execute
timely sustained combat operations across the spectrum of conflict. The advantage
of the Arsenal Ship is that it would provide a sea-based platform for conventional
deterrence and crisis management. It can supply firepower, early, giving unified
Commanders the capability to halt or deter invasion using Tomahawk strike weap-
ons against the full range of potential target sets or using precision guided missiles
equipped with advanced sub munitions for destro3dng enemy forces and armored ve-
hicles in support of ground forces.

To meet this warfare requirement affbrdably, the Arsenal Ship concept and design
must be straightforward and simple, maximizing the use of commercial standards
and off-the-shelf systems and technology. The ship should provide approximately
500 VLS cells, with the capability to launch Navy and other joint weapons to sup-
port the land campaign. The ship would rely on other surface combatants for protec-
tion, yet still have appropriate ship design features for survivability and ship self
defense. Finally, the Arsenal Ship will have low ownership costs, with a crew size
not to exceed 50 personnel. This would be achieved through the use of innovative

223

"Smart Ship" maintenance and operational methods, procedvires, and systems that
are currently being studied to reduce manning on surface ships.

The number of Arsenal ships required is under review at this time, however, ap-
proximately six ships that will operate year-round in forward theaters using rotat-
ing crews would seem to provide a Theater Commander with the flexibility needed
to respond quickly under different scenarios.

Question. What will be the Navy's role and what will be DARPA's role in this pro-
gram?

Answer. The Arsenal Ship will begin as a non-acquisition, demonstration ship pro-
gram, developed under the auspices of a joint Navy/DARPA program office. DARPA
will serve as lead organization during the development and test phase, and the dem-
onstration program will be conducted using DARPA's Section 845 Agreements Au-
thority to allow industry wide latitude in providing the Navy with the most afford-
able and innovative ship designs possible. The Navy will develop the concept of op-
erations, and provide DARPA with technical assistance in areas such as Navy ship
design, C4I, combat systems, and ship systems engineering. The goal is to have the
demonstration Arsened Ship at sea to start testing by the year 2000.

Question. Discuss the acquisition strategy, as well as the cost and performance
goals for this program.

Answer. The acquisition strategy for the Arsenal Ship program is to go to industry
with a broad set of requirements and a concept of operations that describes the
manner in which the Arsenal ship will be employed from an operational point of
view. The approach is to be receptive to a wide variety of ideas and suggestions —
with no preconceived notions of an answer — and ask industry for the best ship de-
sign and systems integration approach to achieve our requirements. We want to get
these ideas from 3-5 industry teams, and then quickly neck down to two, and then
one shipbuilding team to build the first demonstration ship.

Our goal is to award a contract to the final team in fiscal year 1997 or 1998, and
have a ship at sea to conduct tests and trials by the end of 2000. We have set a
cost cap for developing and acquiring the demonstration ship at $520 million. To
minimize cost, we will rely heavily on off-the-shelf systems, industry innovation, and
DARPA's experience in rapid prototyping and development.

Question. Understanding that it is very early in the program, what are "ballpark"
cost estimates or goals for the concept development, engineering/manufacturing, and
production phases of the Arsenal Ship program?

Answer. Our goal is to award a contract to the final team in fiscal year 1997 and
1998, and have a ship at sea to conduct tests and trials by the end of 2000. We
have set a cost cap for developing and acquiring the demonstration ship at $520 mil-
lion. To minimize cost, we will rely heavily on off-the-shelf systems, industry innova-
tion, and DARPA's experience in rapid prototjT)ing and development.

Retirement of FFG-7 Frigate Ships

Question. The Navy now plans to retain FFG-7 frigates beyond their planned de-
commissioning dates on an interim basis. What is the Navy's strategy for retirement
of FFG-7 Class ships?

Answer. The Navy's strategy is to retire first those frigates with lesser capable
systems. We want to retain CORT configures ships and Dual RAST/SQQ-89 capable
ships for the duration of their estimated service lives.

Question. What is the annual cost of continuing to operate these ships?

Answer. The annual, per-hull operating cost for an FFG-7 Class ship is $15.5 mil-
Uon. This includes operating, personnel and maintenance costs.

Question. What is the benefit?

Answer. The FFG-7 Class provides the Navy with large and diverse mission capa-
bilities including ASUW/ASW operations, an excellent heUcopter platform, and con-
voy/battle group escort operations.

Question. How has retention of frigates to date helped the Navy to maintain a
reasonable fleet operational tempo?

Answer. The retention of frigates has helped maintain a reasonable operational
tempo by increasing the number of available assets. The frigates have been key in
maintaining Chief of Naval Operations operation tempo (OPTEMPO) and personal
tempo (PERSTEMPO) goals.

Question. What are the revised retirement dates for these frigates?

Answer. See the following attachment, FFG-7 Class Ship-By-Ship Future Status.

224

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225

Question. What will be the service lives at retirement?

Answer. NRF/RRF designated ships have a 22-25 year service life, Flight % Non-
CORT ships have a 25-28 year service life, and CORT ships have a 30 year service
life.

Question. How does the retention of frigates help the Navy maintain its long-term
surface combatant force objective.

Answer. As indicated in the USD (A&T)'s recent report to the Congress on Nu-
clear Attack Submarine Procurement, the force goal in fiscal year 2001 for surface
combatants could range between 126 and 138 ships depending on future funding
priorities and operational requirements. The long-term surface combatant goal is
currently under review as part of the FY 1998 budget development.

Question. Does the Navy have any plans to retain more than 15 frigates beyond
the current FYDP program?

Answer. Yes. The Navy will retain all CORT (12) and FUght % Non-CORT (11)
FFGs in active status, and will retain 10 FFGs in the reserves. All other FFGs will
be decommissioned, leaving a total FFG 7 Class of 33 ships after fiscal year 2000.

Question. What are Navy plans to build an FFG-7 replacement ship? What are
Ukely features of such a replacement ship? When would construction begin? When
would fielding begin? How many would be needed?

Answer. The FFG-7 class reaches Expected Service Life (ESL) during the period
from 2007 to 2013. The DD-963 and DDG-993 classes reach ESL from 2008 to
2017. Rather than build a one for one replacement for FFG/7s, DD-963s and DDG-
993s, the Navy intends to build a ship or family of ships that will counter threats,
perform required missions and satisfy force structure requirements in both the near
future and through the middle of the next century. The SC-21 is intended to take
into consideration those capabilities that FFG-7 and others bring to the fight as
weU as new requirements for joint operations in the littorals, supporting the land
campaign, theater missile defense, reduced manpower, and improved environmental
compliance.

Providing all the required capabilities in a single ship may prove to be
unaffordable. The SC-21 Cost and Operational Effectiveness Analysis (COEA) will
identify whether a more affordable solution may be a family of ships with com-
plimentary capabilities. In either case, some features will be common. The most
common feature will be netted, distributed sensing. This will provide aU ships in
a battle force with an equal picture of threats and targets. This permits tailored ca-
pability ships tnat operate independently in medium to low threat environment, to
operate as a fuJly capable combatant when in company with other fiilly capable
forces.

Other common features are low observable hull and topside, a multi-function hori-
zon search/illuminator radar, a cooperative engagement capability, a scaleable fiber
optic COTS based distributed processing computation plant, fuel efficient gas tur-
bine engine, an integrated propulsion and ships service power system, improved
processing and display system allowing reduced watchstanding requirements, an in-
tegrated bridge system, a standard monitoring and control system for the engineer-
ing plant, and a reduced crew size due to increased processing power and improved
human-machine interfaces in all new systems.

Construction for the lead ship SC-21 will begin following the projected 2003 detail
design and construction award.

Fielding would begin with delivery of the lead ship in 2008 and Initial Oper-
ational Capability (IOC) in 2009.

The number of SC-21s required depends on the capabiUties of the future systems
employed. The specific force architecture would have to be determined based on the
result of the Cost and Operational Effectiveness Analysis (COEA) that is currently
in progress.

FFG-7 Upgrades

Question. How many FFG-7s that will remain in the active and/or reserve fleet
have NOT received CORT/IADT AAW upgrade which enables the FFG^7 to defend
against anti-ship missiles?

Answer. Of the 33 FFGs scheduled to remain in the active and/or reserve forces
in the long-term, 21 (11 active, 10 NRF) will not have CORT/IADT AAW capabili-
ties.

Question. Does the Fiscal Year 1997 budget, or outyear budgets include funding
for this upgrade?

Answer. No. Additional CORT installations are too cost prohibitive to install
aboard additional FFGs.

226

Question. How dangerous would it be to send the non-upgraded FFG-7s into
harm's way.

Answer. This would depend upon the mission and potential threat of the theater
of operations.

Question. How many countries have an effective anti-ship missile capability which
non-upgraded FFG-7s could not effectively counter?

Answer. .

Question. Provide for the record the per-ship cost of upgrading the FFG-7s which
do not have the CORT/IADT AAW system.

Answer. Including equipment and installation, the CORT/IADT AAW system costs
approximately $25 million per ship.

Ship Self-Defense/Cooperative Engagement

Question. After 37 sailors died on the U.S.S. Stark due to an Iraqi missile attack,
the Committee became very concerned about the disarray, in the Navy's programs
for ship self-defense programs from anti-ship cruise missile attack. To its credit, the
Navy now has a strong set of programs that seem to us to be going "gangbusters".
The best known of these programs — called "cooperative engagement" — has been
called "the biggest breakthrough in warfare technology since stealth" by Defense
Secretary Perry. Testimony to the Committee last year disclosed that 77 nations
have cruise missiles, a majority of which are for attacking ships.

Mr. Douglass, what is the status of Navy ship self-defense acquisition programs?

Answer. With the increasing emphasis on operations in littoral regions, the Navy
has focused ship self defense efforts on providing more robust capability on our am-
phibious force ships. The CNO has estabhshed Capstone Requirements delineating
the required performance levels of ship self defense each ship class must meet. In
response to these requirements and direction from Congress, the Navy is now em-
barked on a proven systems engineering approach to provide all non-Aegis ship
classes with a robust, affordable self defense capability. This approach has allowed
the Navy to identify high payoff improvements in terms of their overall contribution
to ship defense.

Concurrent installations of the Ship Self Defense System (SSDS), the SPS-49
(MPU) radar upgrade, two Rolling Airframe Missile (RAM) systems and upgrades
to the Phalanx Close-in Weapons System (CIWS) will result in an initial operational
capability (IOC) on U.S.S. ASHLAND (LSD 48) later this year. These upgrades are
an indication of the Navy's commitment to provide integrated ship defense up-
grades, particularly to amphibious force ships.

The Navy will continue this systems engineering approach with the LSD 41 class
in the near term and is expanding this approach to the AOE 6, CVN, DD 963, FFG
7, LHA 1, LHD and LPD 17 class ships. The details of this effort, as well as the
plans for each project's contribution to the Navy's overall ship defense strategy, are
included in the 1996 report on Ship Anti-Air Warfare Defense. A draft report was
sent to the Congressional Defense Committees on April 1, 1996. The final report will
be submitted by May 31, 1996.

Question. Describe your plans to expand cooperative engagement into Army and
Marine Corps missile systems (Patriot and Hawk) and Air Force AWACS aircraft.
How much is included in the budget for this purpose, and how will these funds be
used?

Answer. Funds added to the Cooperative Engagement Capability (CEC), program
in fiscal year 1996 featured an increase of $87 million for the program. Included in
this plus-up is language/funding which supports CEC integration development with
the AWACS, Patriot and Hawk Systems. The primary outcome of this initial effort
will be to determine the feasibility and methodology of integrating CEC with these
joint systems.

Specific fiscal year 1996 funding includes the following:
PATRIOT/THAAD: +5.0 million
HAWK: +3.0 miUion
AWACS: +11.0 million

These funds will be transferred to the appropriate services when available. During
fiscal year 1996, these funds will be used primarily to conduct analysis of data col-
lected during the Mountain Top demonstration, and to do modeling and simulation
of CEC with regard to joint systems.

Question. Why don't the other services budget for these costs themselves?

Answer. The Navy has developed CEC and the other services have not yet estab-
lished their requirements for integration with CEC. These initial funds for joint in-
tegration are being used to initiate the integration work from the CEC side. Full

227

scale development and acquisition of hardware and software to allow integration of
the services' systems with CEC will have to be budgeted by those services.

Question. What impact will there be on the cooperative engagement program as
a result of the proposed sale of portions of the radio frequency spectrum by the Fed-
eral Communications Commission, and what is the Navy doing to deal with this
problem?

Answer. The frequency spectrum sale proposed under the Omnibus Budget Rec-
onciliation Act of 1993 will reduce the total number of units that can participate
in the Cooperative Engagement network during CONUS training exercises. While
this will impact our abiUty to train in a realistic fashion, after thoroughly examining
the impact of this sale, we have determined that CEC can still operate satisfactorily
in spite of this 50Mhz reduction. However, our understanding of the potential inter-
ference considerations determined by the commercial receiver selectivity assump-
tions that were used dictates that an additional 75Mhz or greater guard band be
reserved on either side of the reallocated band — a total of over 150Mhz that goes
unused. This clearly appears to be a wastefvil approach. If this guard bank is also
required, the impacts on CEC will be even more substantial in terms of units in-
cluded in any one CEC network. A letter has been sent from the Under Secretary
of Defense for Acquisition & Technology to the Department of Commerce requesting
that commercial systems be designed with sufficient hardening that the large guard
bands mentioned above are not required.

Regardless of the outcome of this particular issue, it is essential that further fre-
quency spectrum sales which would impact this critical system be carefully consid-
ered so as to avoid further degradation of the CEC.

Question. How much is budgeted in fiscal year 1997 for infrared sensor develop-
ment and shipboard integration, which is necessary to detect the heat from fast-fly-
ing anti-ship cruise missiles? Could this development program go any faster? Under
your current plan, when is the earliest that production infrared detection equipment
would be installed in a ship for fleet operations?

Answer. $3.9 million is budgeted in fiscal year 1997 for Infrared Search and Track
(IRST) development. There are no technical barriers to accelerating this program.
It has been constrained by fiinding issues. The IRST development program is cur-
rently being reassessed. The Navy is reviewing alternatives on how to best execute
the program.

Mine Warfare

Question. The Congress has been concerned about the condition of mine warfare
programs for many years, particularly after the USS Samuel B. Roberts hit a mine
in the Persian Gulf. The Navy is working on a new "Near Term Mine Warfare Cam-
paign Plan" which will restructure all its mine warfare programs — with the empha-
sis on getting programs out of the lab and into the field. Admiral Lopez, a flag offi-
cer level Mine Warfare Steering Group recently conducted assessments of gaps and
shortfalls in the Navy's mine w£irfare capabilities. What deficiencies were found?

Answer. Six shortfalls were identified:

1. Surface Mine Countermeasures (SMCM) and

Airborne Mine Countermeasures (AMCM) readiness and sustainability.

2. No Clandestine mine countermeasures MCM reconnaissance capability in the
very shallow water (40 ft to surf zone).

3. Lack of digital MCM resolution contact and environmental data bases.

4. No organic MCM Reconnaissance capability.

5. No C4I/JMCIS connectivity for Explosive Ordnance Disposal (EOD) and AMCM
forces.

6. No Mine warfare focused, quantitative fleet exercise program.
Question. What is the Navy's plan to address these issues?

Answer. The Navy will fully fund the Near Term Mime Warfare Campaign Plan,
which addresses the existing shortfalls.

Question. The Committee understands that the Steering Group identified $67 mil-
hon of unfunded requirements in fiscal years 1996 and 1997. How much of this re-
quirement will be funded internally by the Navy, and how much remains unfunded?

Answer. The Navy will internally fund all of the Near Term Mine Warfare Cam-
paign Plan.

Question. For the record, please list each shortfall identified by the Steering
Group, a brief explanation of why it is a problem, the amount contained and needed
in each fiscal year 1996 and 1997 to address the problem, follow-on investment re-
quired for each item, and the results in terms of capability given to the fleet if any
of these terms were to be fully funded by the Congress in fiscal year 1997.

228

Answer. The following is a list of shortfalls identified by the Steering Group and
a brief explanation of why it is a problem:

(1) Surface, Airborne and EOD MCM Readiness Shortfalls. The highest priority
identified by the Steering Group are the readiness of existing MCM forces. The
Isotta Fraschini (IF) Engine, which provides both propulsion and electrical genera-
tion for the MCM-1 and MHC-51 Class ships, has a well documented reliability
problem associated with its cooling system. The program to correct the IF engine
problem includes installation of engine cooling modifications and was identified as
a shortfall in fiscal year 1996. The MCM-1 Class ships have a backlog of depot
maintenance for the MCM-1 Class combat systems and is identified as a shortfall
for fiscal year 1996. A Joint Maritime Command Information System (JMCIS)-based
tactical decisions aid to enhance MCM mission planning and execution is planned
for installation on the forward deployed MCM-1 Class ships and is identified as a
shortfall in fiscal years 1996 and 1997. The Airborne MCM (AMCM) forces have a
backlog of overhaul maintenance for the MK-105 Influence Sweep engine in fiscal
years 1996 and 1997. Not completing these overhauls prevents the use of the sleds
and directly impacts AMCM mine sweeping missions. A digital upgrade to the AN/
AQS-14 AMCM Minehunting Sonar (AN/AQS-14A) was delivered to meet a portion
of the required inventory requirements in fiscal year 1996. Additional upgrades are
required in fiscal years 1996 and 1997 to complete inventory objective and to allevi-
ate readiness problems associated with supporting more than one t3TJe of AN/AQS-
14.

(2) Very Shallow Water (VSW) MCM Unit. The water region between 40 feet
depth and the craft landing zone represents the most challenging MCM environ-
ment. No organic, clandestine mine reconnaissance capability exists. The VSW
MCM initiative combines the expertise and experience of EOD and special force per-
sonnel with the speciadized MCM equipment into a proof-of-concept Unit to provide
an organic, clandestine mine reconnaissance capability. Shortfalls to meet tJiis ini-
tiative were identified in both fiscal years 1996 and 1997.

(3) MCM-Resolution Route Survey Databases. The Navy currently lacks an MCM-
resolution contact and environmental database for supporting MCM missions. A
plan has been developed to use existing assets and technology, primarily Naval
Oceanographic survey platforms, sensors, supercomputers and mass storage devices,
to provide digital mapping, to catalog mine-like contacts and to formulate mine war-
fare specific environmental database. Shortfalls to meet this initiative were identi-
fied in both fiscal years 1996 and 1997.

(4) Organic Mine Reconnaissance Systems. The Navy currently has no organic
mine reconnaissance capability. Two systems have completed initial development
and will provide a Umited mine reconnaissance capability if delivered to the Fleet,
including the Remote Minehunting System (RMS) contingency system and the
Magic Lantern Deployment Contingency (MLDC). MLDC is completely funded for
fiscal years 1996 and 1997. The funding required for the RMS program supports de-

f)Ioyment of a limited contingency system in fiscal year 1996 and accelerates the de-
ivery of two systems to the Fleet in fiscal year 1997.

(5) MCM C4I Connectivity. EOD and AMCM forces currently lack the C4I up-
grades required to match improvements currently being made in MCM-1 and
MHC-51 Class ships and to put AMCM forces on par with other Nave-wide C4I sys-
tems. The C41 upgrade plan calls for improving EOD and AMCM connectivity with
the following: upgrading EOD mobile communications vans with an Officer in Tac-
tical Command Information Exchange System (OTCIXS) capability, installing Link
11 connectivity in selected AMCM helicopters, and equipping AMCM forces with
Mobile Shore Terminals. Shortfalls for C4I upgrades were identified in both fiscal
years 1996 and 1997.

(6) MIW-Focused, Quantitative Fleet Exercise Program. Mine Warfare forces cur-
rently lack a focused quantitative fleet exercise program and an effective, ongoing
threat mine acquisition and exploitation program. The Mine Warfare Readiness and
Effectiveness (MIREM) program has been developed to oversee foreign threat mine
acquisition and exploitation and address mine warfare across the full spectrum of
Naval forces through the institution of a rigorous, quantitative MIW -focused Fleet
exercise program. Shortfalls to meet this initiative were identified in both fiscal
years 1996 and 1997.

The following table shows the funding required. Sufficient funds exist in the
President's Budget for each effort.

MCM Near-term campaign plan FY96 Req'd rY97 Req'd

MCM Readiness Totals 16.4 5.2

VSW MCM Unit 1.3 0.8

2.6

3.3

7.9

25.7

2.4

0.3

0.5

229

MCM Near-term campaign plan FY96 Req'd FY97 Req'd

Route Survey Support

Organic MCM Systems

MCM C41 Upgrades

MIREM Support

Totals 31.1 36.3

The following table shows the follow-on investment for each item:

Program Follow-on investment in the out-years (FY98-01)

MCM Readiness $45 million is required to sustain SMCM and AMCM readiness initiatives.

VSW MCM Unit $28 million is required to sustain the VSW MCM Unit initiative.

Route Survey Support $18 million is required to sustain the route survey database initiatives.

Organic MCM Systems $160 million is required to meet the RMS Program plan and to support the

MLDC system.

MCM C4I Upgrades $5 million is required to complete the EOD and AMCM C4I upgrades.

MIREM Support $11.8 million is required to sustain the MIREM initiative.

Out of the above follow-on investments, only the AMCM and EOD C4I upgrades
could be executed if the follow-on investment ($5 million) were fully funded in fiscal
year 1997. The results of this funding would be that both the EOD and AMCM
forces, including the MH-53 helicopters and AMCM commanders, would have C4I
connectivity with the MCM commander and the rest of the Fleet.

Question. A March, 1996 GAO report entitled "Budget Realignment Can Improve
Countermine Capabilities" addresses shortfalls in the Navy's mine warfare program.
Is there overlap between the GAO issues and the Steering Group issues?

Answer. Yes, there is significant overlap between the GAO report and the Steer-
ing Group issues. The U.S. Naval Mine Warfare Plan for fiscal year 1996 and 1997
Programs incorporates Concept Based requirements and a functional systems archi-
tecture. The Plan and associated funding has been certified by the Secretary of The
Navy. The Near Term Mine Warfare Campaign Plan addresses the readiness and
sustainability issues in the SMCM forces.

Medium Tactical Vehicle Remanufacturing Program

Question. The Marine Corps has requested $4.2 million for the Medium Tactical
Vehicle Remanufacturing (MTVR) Program. The MTVR program is the insertion of
new technologies into medium trucks that are currently in the Marine Corps inven-
tory. By "remanufacturing" fielded trucks, the Marine Corps will be able to correct
deficiencies in the current fleet.

The fiscal year 1997 funds will aUow two contractors to build 5 prototype trucks
for testing. Based on the prototype test results, the Marine Corps will select the
"best value" truck for production. Please define "best value." Do you believe that al-
lowing only two manufacturers to compete you will get "best value?" Why?

What would be the cost of allowing another contractor to compete?

Answer. "Best value" is defined as selecting the truck that best meets the require-
ments of the Marine Corps as defined by the performance specification at the most
equitable price.

No. We believe "best value" may require three MTVR competitors in the Engineer-
ing and Manufacturing Development (EMD) phase. The Acquisition Strategy for the
MTVR states that we will award EMD contracts to at least two manufacturers. The
current budget profile permits award to only two contractors. However, for an addi-
tional $3.0 million in fiscal year 1997 R&D funding, another manufacturer can be
brought on board. We believe a third manufacturer would ensure that the produc-
tion price remains competitive throughout the EMD phase, particulairly for several
types of independent suspensions. Every $1,000 reduction in the production price of
the independent suspension system results in an $8 million saving in the production
of 8,000 vehicles. Potential unit price reduction of the suspension as a result of in-
creased competition is $10-$20 thousand.

The total cost of having another manufacturer to compete in the EMD phase is
$3.6 miUion.

Question. The Army has requested funds for a new medium truck vehicle. The
Marine Corps budget does not include funds for any of the new medium trucks.
What is the average age of the medium truck in the Marine Corps inventory? What
will be the operational life expectancy of the remanufactured truck? Why is the Ma-

230

tine Corps remanufacturing its old truck rather than procuring the Army's new me-
dium truck? Is it a cost or capabiUty issue?

Answer. The average age of the Marine Corps' medium fleet vehicles will be 17
years in fiscal year 1999 when production starts. In fiscal year 2000 785 trucks will
reach the end of their Economic Useful Life of 20 years. This does not take into ac-
count the accelerated wear accumulated on vehicles as a result of Operations Desert
Shield/Desert Storm.

The operational life expectancy of the remanufactured truck is 22 years.

It is both a cost and capability issue. The Cost and Operational Effectiveness
Analysis (COEA) for the MTVR program identified the MTVR option as "the most
capable option." The COEA also stated that "based on a modification feasibility
study conducted by the Tank Automotive Research Development Engineering Cen-
ter (TARDEC), the significant modifications required for the added capabilities to
meet Marine Corps requirements would take the modified FMTV (new Army me-
dium truck) out of the FMTV family." The two biggest areas where the Army's new
medium truck fall short of meeting Marine Corps requirements are in the areas of
mobility and payload. THe FMTV is rated at 5 tons both off'-road and on-road. The
Marine Corps requirement is for a medium fleet vehicle capable of carrying 12 tons
on-road and 7 tons off-road 70 percent of the time while the mission profile of the
Army is the opposite, 70 percent of the time the FMTV will operate on-road. Finally,
it is important to note that the Marine Corps maintains a single medium truck to
accomplish a wide variety of missions. The Army has at least four vehicle types to
accomplish their medium truck tasks.

Question. Please provide the Marine Corps' truck remanufacture program plan.
The plan should include a production schedule and required funding.

Answer. Milestone I/II Approval — 3 Oct 95; Draft RFP to Industry for Com-
ments— 15 Jun 96; Issue Prototype RFP, Receive and Evaluate Proposals — 15 Mar
96-15 Jun 96; Select EMD Prototype Contractors and Brief Source Selection Results
16 Jun 96-30 Sep 96; Award EMD Prototype Contract 1 Oct 96; Build EMD Proto-
types 2 Oct 96-28 Jun 97; Prototype Developmental Test 8 Jul 97-4 Apr 98; Oper-
ational Assessment 9 Mar 98-8 May 98; LRIP IPR 15 May 98; Issue Production
RFP, Receive and Evaluate Proposals 15 May 98-10 Jan 99; Award Production
(LRIP) Contract 15 Jan 99; Contractor Facilitization and Initiate LRIP 16 Jan 99-
5 Jul 00; First Article Test Vehicles Delivered 20 Jul 00; First Article Test 19 Jul
00-25 Jan 01; Initial Operational Text & Evaluation 29 Sep 00-28 Mar 01; Mile-
stone III Approval 30 Jun 01; and Initiate Full Production — 1 Jul 01.

[Dollars in millions]

nr95 FY96 FY97 FYSS FY99 FYOO FYOl FY02 FY03 FY04

USMCRDT&E 0.14 5.85 M.22 3.24 0.75 07.25 1.25

USMCPMC 158.6 244 251.5 291 316 168

Army RDT&E 2 6 2.8 0.5

ArmyOPA^ 10 20 30 30 30

'An Additional $3.0 million fiscal year 1997 would help ensure the Marine Corps obtains the best value by allowing a third contractor.
^Required Army funding not contained in the fiscal year 1997 budget. Anticipated funding is currently in the fiscal year 1998 Army budget
approval process.

Amphibious Assault Vehicles

Question. The Amphibious Assault Vehicle (AAV) which is currently in the Marine
Corps' inventory was fielded in the 1970's. The AAV is used to transport Marines
from a ship to the beach and is also used as a land fighting vehicle. The current
vehicle is vulnerable to enemy fire because of its slow water speeds and its age
makes it expensive and difficult to maintain. The Marine Corps is developing the
Advanced Amphibious Assault Vehicle (AAAV) which will be fielded in 2()08. The
Marine Corps is considering a major overhaul to extend the life of the AAV.

Last year, then-Deputy Defense Secretary Deutch decreased the budget and de-
layed the fielding of the AAAV. His decision resulted in a two year slip and an in-
crease in the overall cost of the program of approximately $456 million. The Con-
gress provided an additional $6 million in fiscal year 1996 to offset the DoD reduc-
tion. Was the AAAV funding decreased because of technical problems or fiscal con-
straints?

Answer. Fiscal constraints.

Question. Why does the two year slip cost $456 million?

Answer. The extension of the development schedule increased cost due to infla-
tion. While a previous budget cycle decision reduced the AAAV Program $190 mil-

231

lion, recent budget deliberations restored $107 million and bought back nine months
of the schedule.

Question. If additional dollars were provided, could the AAAV program be acceler-
ated? If so, please provide a revised funding and fielding schedule.

Answer. Yes. A revised funding and fielding schedule follows:

FUNDING

[Then-Year dollars in millions]

FY97

pr98

FY99

FYOO FYOl

FY02

FY03

FY04

FY05

FH06

Current ..
Revised ..
Delta

40.11

60.11

60.24

63.88

3.64

104.12

119.09

14.97

92.8 110.38

93.45 142.89

0.65 32.51

138.02
179.9
41.88

160.4

148.4

-12

73,34
66.69
-6.65

42.5

26.7

-158

23.5

-23.5

FIELDING

[Dates in calendar years]

Current baseline

Proposed baseline

Milestone II Apr 01 Dec 00

LRIP Award Jan 04 Jul 03

FRP Decision Apr 06 May 05

I.O.C Jun 06 Dec 05

F.O.C Dec 12 Dec 11

This schedule would accelerate Full Operational Capability by one fiiU year.

Question. The AAV is 20 years old. The Marine Corps is considering a major over-
haul program to extend the life and reduce to operation and support costs of the
AAV. The Marine Corps estimates the cost of the AAV overhaul program is $473
million. Do you believe that the AAV will still be operational in 2008? If not, Why?

Answer. Yes. The AAV will still be operational in 2008.

Question. Please describe the major overhaul program the Marine Corps has con-
sidered for the AAV.

Answer. To date, a major overhaul of the AAV has not been proposed to the Com-
mandant. If and when proposed, the program could consist of the following up-
grades:

1. Installation of U.S. Army Bradley Fighting Vehicle derivative engine at 525hp;

2. Installation of U.S. Army Bradley Fighting Vehicle derivative suspension; and

3. Vehicle rebuild to standard. The RAM/Rebuild effort returns the original vehi-
cle performance which has degraded due to age and weight growth.

Question. When should the overhaul program begin?

Answer. This decision has not been made yet?

Question. Is the AAV overhaul program fiinded in the budget? If not, why?

Answer. Since this program has not been approved, it is not currently funded in
the budget.

Question. The Marine Corps states that the cost of the overhaul program is offset
by the savings from reduced depot level maintenance. What is the annual cost of
maintenance for the AAV? Are those costs expected to rise in the future? What will
be the maintenance costs for the overhauled AAV Program?

Answer. Fiscal year 1996 annual depot maintenance cost for the AAV is $47 mil-
Uon (271 vehicles undergoing IROAN). Current assessment indicates that IROAN
costs wUl increase at an annual rate of about 7% above inflation.

Because there is no overhaul planned, maintenance costs for the overhauled AAV
Program are unknown.

Command, Control and Communications

Question. Current command, control and communications equipment have limita-
tions making it difficult to support Marine Corps operations. Currently, the Marine
Corps is procuring equipment which will provide improved interoperability and bet-
ter long haul communications. Please describe the limitations of your current com-
munications equipment. What items are you currently procuring that overcome your
limitations.

Answer. A. Limitation: Single Channel Radio. About two thirds of tactical units
possess twenty year old single channel VHF radios. These radios are voice radios
with a very limited capability to carry digital data.

232

Currently Procuring. The Marine Corps has already fielded new Single Channel
Ground and Airborne Radio System (SINCGARS) single channel VHF frequency
hopping radios with embedded communications security (COMSEC) to approxi-
mately one third of the tactical forces. Fielding of the remainder of the active forces
will take another year and a half. SINCGARS radios are being procured with the
Inter-Network Controller (INC) this year, an equipment improvement which pro-
vides the radio with a greater data communications capability.

B. Limitation. Satelfite Communications. Existing Ground Mobile Forces (GMF)
satellite terminals are nearing the end of their life cycle, they possess no commercial
sateUite capability, are not anti-jam capable, have no secure order-wire or demand
assigned multiple access (DAMA) capability, and are mounted on 5-ton trucks or
CUCVs with trailers.

Currently Procuring. Starting in fiscal year 1999, the Marine Corps will begin

Erocuring STAR-T tri-band GMF terminals. These new terminals offer anti-jam and
•AMA capabilities, high mobiUty (HMMWV mounted), and increased data through-
put (four 1.544 Mbps T-1 carriers). In addition, MILSTAR terminals are being pro-
cured in fiscal year 2000.

C. Limitations. Man-packed Satellite Communications. The current AN/PSO-3 is
not DAMA capable.

Currently Procuring. In fiscal year 1996, the Marine Corps began procuring the
AN/PSC-5 man-packed, DAMA capable, single channel UHF Satellite Communica-
tions (SATCOM) radio terminals. The terminals are bought out in fiscal year 1997.
Additionally, remote control units for the terminal will be procured beginning in fis-
cal year 1997 and completing procurement in fiscal year 1998.

D. Limitation. Lack of stendardized tactical LAN and data distribution equip-
ment.

Currently Procuring: The Marine Corps is developing the Tactical Data Network
(TDN) gateways and servers. The TDN begins procurement in fiscal year 1998.

E. Limitation. Lack of a digital technical control capability.

Currently Procviring: The Marine Corps is developing the Digital Technical Con-
trol (DTC) facility. The DTC begins procurement in fiscal year 1998.

F. Limitation. Terrestrial broadband transmission systems. Current single chan-
nel and multichannel radio terminals offer limited bandwidth (information carr3dng)
capacity.

Currently Procuring. The Marine Corps is not procuring any replacements at this
time. However, the Marine Corps is considering fiiture procurement of the Near
Term Digital Radio (NTDR), SPEAKEASY Radio, or the Future Data Radio (FDR)
to meet emerging requirements to pass ever increasing amounts of digital data
around the battlefield.

Question. Do you beUeve that your command, control and communications pro-
grams are adequately funded? If not, what are the critical deficiencies?

Answer. No. Due to fiscal constraints, the Marine Corps' command, control, and
communication programs are not adequately funded. Following is a list of command,
control, and communication programs for which we could execute additional fiscal
year 1997 funding.

Item ($ in millions)

1. JTF Headquarters 17

2. Telecom Upgrade 18.8

3. Combat Operations Center 6.0

4. Intelligence Upgrades 17.3

Amraam Missile

Question. The Navy and Air Force historically have a miserable record of staying
in joint programs through program completion. The joint AMRAAM program — gen-
erally thought of as a well run program until now — is the latest casualty. The Navy
recently dropped 1,166 missiles from its AMRAAM missile inventory objective. The
fiscal year 1997 budget requests only $36 million to procure 37 Navy AMRAAM mis-
siles compared to $131 miUion for 220 missiles projected for 1997 a year ago. Not
surprisingly. Navy AMRAAM per unit costs are up 67 percent, to about $1 miUion
per missile. For F-14s, the Navy plans to rely more on its long range Phoenix mis-
sile instead. Admiral Lopez, the committee understands that in the Gulf War the
Navy logged 30,000 "captive carry" hours for the Phoenix missile and did not fire
a single snot in combat. Is this accurate?

Answer. During the Gulf War Navy aircrews were never cleared to fire the Phoe-
nix missile beyond visual range. The rules of engagement required a positive identi-
fication which prevented F-14 aircrews from firing the AIM-54C Phoenix. The same
restrictions also prevented F/A-18 aircrews from employing AIM-7 Sparrow mis-

233

siles beyond visual range. Navy is correcting this Gulf War lesson learned with on-
going programs. The Iraqi Air Force's lack of will to fight was another factor that
determined the low number of air-to-air kills for Navy and Air Force fighters.

Question. How did AMRAAM perform in the Gulf War?

Answer. Air Force introduced AMRAAM just prior to the outbreak of hostilities.
F-15 and F-16 aircrews had little training in AMRAAM employment doctrine at the
time of its introduction and therefore did not play a role. Navy IOC ("Initial Oper-
ations Capability") was after the Gulf War in September 1993. Since the end of the
Gulf War AMRAAM has had three air-to-air kills (1 in Operation Southern Watch
and 2 in Operation Deny Flight).

Question. Would you say the Navy has all the AMRAAMs it needs? What percent
of Navy's AMRAAM inventory objective wiU have been met through the end of fisceil
year 1996?

Answer. Navy wiU have procured 37 percent of its inventory objective; 834 mis-
siles procured, 137 expended for test and training, net inventory of 697. The inven-
tory objective for AMRAAM is approximately 2200 missiles by fiscal year 2005.

Question. Why is a 67 percent AMRAAM missile unit cost increase acceptable to
the Navy?

Answer. The increase in Total Procurement unit cost from the fiscal year 1996
President's Budget ($616 thousand) to the current fiscal year 1997 President's Budg-
et ($1,039 thousand) is due to a slow down in AMRAAM procurement.

Despite the decrease in number of missiles procured by Navy, Total Recurring
Flyaway (hardware only) unit cost has actually decreased from $424 thousand in the
President's 1996 budget to $361 thousand in the current budget. The number of
missiles sold to Foreign Military Customers has had the net affect of decreasing
AMRAAM unit cost for Navy and Air Force resource sponsors.

Below the line (infrastructure) costs, which are funded at a minimum sustaining
level regardless of the number of missiles procured, have actually decreased from
$37,718,000 in the President's 1996 Budget to $22,731,000 in 1997. An increase in
quantity for fiscal year 1997 woiild therefore not increase infrastructure but would
decrease Total Procurement unit cost.

Question. What is the impact on the Air Force AMRAAM program, in terms of
both per unit and total program cost, due to Navy's sudden withdrawal of 1,166 mis-
siles from the program?

Answer. The impact appears minimal because of the large number of AMRAAM
missiles procured by Foreign MUitary Customers.

Question. Who is responsible for making the decision to curtail the Navy
AMRAAM program?

Answer. It was a Navy corporate decision to slow AMRAAM procurement down
due to affbrdability with other competing programs in the current fiscal environ-
ment.

Question. How many of the 1,166 missiles are related to F-14, and how many to
F-18?

Answer. The decision to slow AMRAAM procurement was not related to aircraft
type. Navy has no plans to integrate the AMRAAM missile onto F-14 aircraft. All
of the 1,166 missiles are related to F-18.

Standard Missile

Question. The Navy's Standard Missile is the backbone of the surface Navy's air
defense system, and is the missile that will be grown into Navy anti-tactical ballistic
missile defenses. The budget requests $198 million to procure 99 missiles. Mr. Doug-
lass, last year Congress appropriated $231 milUon to procure 151 Standard Missiles
for the fleet. The new budget shows that the Navy will spend only $125 million for
17 missiles. What happened to the rest?

Answer. The $231 million appropriated by Congress in fiscal year 1996 was budg-
eted to procure 87 Standard Missile Block IIIB missiles and 64 Standard Missile
Block rV missiles. The Navy was unable to use the appropriated funds for Block
IIIB procurement and requested to continue procurement of 129 Block IIIA missiles
instead. This recommendation was not accepted by the Office of the Secretary of De-
fense and funding was subsequently reduced by a total of $104 million.

Implementing the $104 million reduction exceeded the missile procurement costs,
also reducing the production support. As a result, these support fiinds had to be re-
stored first, thereby reducing the remaining $125 million available for procurement.

Finally, the program lost significant manufacturing "lessons learned" as a result
of these reductions, which caused an increase in unit cost, further reducing the
number of Block IV missiles the Navy was able to procure.

234

The remaining fiind reductions were due to assessment of revised economic as-
sumptions.

Question. Last year the Navy hoped to be further along in development of the new
model (Block IV) missUe than actually occurred. What problems did you run into
in the Block FV development program?

Answer. The Block IV missile successfully completed at sea Development/Initial
Operational Test & Evaluation in October 1994. Low-rate initial production (LRIP)
was approved in the third quarter, fiscal year 1995. The LRIP decision was delayed
until the acquisition strategy was approved which included the formation of the
Standard MissUe Company.

Question. The Committee just received a reprogramming request to accelerate the
AEGIS shipbuilding program which uses fiscal year 1996 STANDARD Missile pro-
duction as the bUlpayer. Admiral Lopez, does the Navy agree that it has excess fis-
cal year 1996 STANDARD Missile funds? If Congress rejected STANDARD Missile
as a reprogramming source, how would the Navy use the funds? Does the fleet de-
sire production of more Block IIIB missiles (the Navy's best Exocet-type cruise mis-
sUe kUlers) untU Block IV is avaUable?

Answer. This shift in funds is part of an extensive realignment in a number of
areas. We need both STANDARD Missiles and acceleration in AEGIS shipbuilding.
The question as written in essence asks me to tell you which of these programs is
most urgent. Given this choice, the addition of a DDG 51 is higher priority. How-
ever, by stating we need an additional DDG 51, 1 am not sajdng we don't need addi-
tional STANDARD MissUes as weU.

If Congress rejects STANDARD Missile as a reprogramming source, the Navy wUl
reassess alternatives and, in all likelihood, increase the funding going to STAND-
ARD MissUe procurement.

Block IIIB modification kits were approved for 2-year Low Rate Initial Production
for fiscal years 1995 and 1996, with all up round procurement expected to begin in
fiscal year 1997. Block IV procurement commenced in fiscal year 1995 and will con-
tinue untU block FVA is ready for production. After reassessing alternatives, the
Navy coiUd procure some combination of STANDARD missiles to best meet the
threat untU aU up round procurement of Blocks IIIB and IVA can start.

V-22 Aircraft

Question. The fiscal year 1997 budget requests $1.2 billion for the V-22 program:
$602 million to initiate production of 4 aircraft and $577 million for continued
RDT&E. What is the status of the V-22 program?

Navy Answer. The last MUestone Review was in September 1994. We have flown
more than 1000 hours on the P\U1 Scale Development (FSD) configuration aircraft
and are in the process of assembling the first Engineering and Manufacturing devel-
opment (E&MD) aircraft. This E&MD aircraft is 500 pounds below the expected
weight, is predicted to have lower drag and higher estimated reliability. First flight
for the E&MD aircraft is scheduled for December 1996.

There are no showstoppers. The next Milestone is a DAB Low Rate Initial Produc-
tion Review planned for mid-fiscal year 1997. We are on track for MV-22 Initial
Operational CapabUity (IOC) in fiscal year 2001 and CV-22 IOC in fiscal year 2005.

Marine Corps Answer. Let me begin my answer by thanking you for your support
during our "tough years." The V-22 program is doing very well. We have now flown
over 1,000 hours and the aircraft is coming in some 500 lbs. under weight, with
lower projected drag and higher projected reliability. With the Joint Requirements
Oversight CouncU approval of oiu* Joint Operational Requirement Document in
April 1995, we are once again a joint program with the Department of the Air Force
and United States Special Operations Command. With the successful acquisition de-
cisions resiUting from the Defense Acquisition Board, culminating in the Defense
Resources Board of September 1994, we now have a commitment to production. We
are funded in the fiscal years 1996 to 2001 period to complete development and
begin Low Rate Initial Production of the V — 22. We are very happy with these de-
velopments and only wdsh it could have happened sooner. Every contingency we
have been involved in since the MV — 22s original desired IOC of 1991 has made
us wish we had already fuIfUled its enhanced survivability, speed, and range capa-
bUities.

Question. Your statement indicates that the current acquisition profile will com-
plete the projected 425 aircraft procurement in 27 years. What can be done to accel-
erate production and fielding of the V-22, and is there a need, for legislation from
the Congress in this regard in fiscal year 1997?

Navy Answer. The current 27 year acquisition profile is not the most efficient. As
requested by Congress, alternative profiles of 24 and 36 aircraft per year, providing

235

up to $5.35 billion in total cost avoidance, are being provided to the Congressional
Defense Committees by OSD.

Increased funding in fiscal year 1997 would allow the Department of the Navy
to procure additional aircraft sooner, resulting in a quicker ramp-up to a more effi-
cient production rate. The E&MD program is currently 61% complete and an in-
creased ramp-up in fiscal year 1997 must be balanced with program status. Al-
though there is no need for legislation, it would leave no doubt concerning the intent
of Congress regarding program acceleration.

We are aggressively looking at ways to get to a more efficient production profile
as part of the fiscal year 1998 budget development process.

Marine Corps Answer. 1 would like to take this opportunity to elaborate. The V-
22 Program as currently structured costs more than it has to, while stretching pro-
ciu*ement over nearly 3 decades. An accelerated production rate would be more effi-
cient and cost less. This urgent operational requirement could be fielded 11 years
sooner to allow retirement of aging, obsolete aircraft.

Currently, the MV-22, the Marine Corps' highest acquisition priority, requires 27
years to complete. The fiscal year 1997 budget has a total of 1.1 billion for the V-
22. That equates to $558.7 million in Aircraft Procurement to buy 4 MV-22s, and
$576.8 million for continued Research, Development Test and Evaluation (RDT&E).
The planned aircraft procurement rate ramps up to 10 MV-22s in fiscal year 2001
for a total of 35 over five years in the Future Years Defense Plan (FYDP, fiscal
years 1996 to 2001).

A procurement rate of 24 or 36 MV-22s per year could save the taxpayer as much
as $6 to $8 billion (using inflation indices as reflected in the fiscal year 1996 budg-
et), or as much as $4.4 to $5.4 billion (using the lower inflation indices as reflected
in the fiscal year 1997 budget). This procurement rate would allow for completion
of delivery of the MV-22 to the fleet 11 years earlier than the current procurement
plan. We will pursue this improved profile in future budget submissions.

Question. Your statement also indicates that the Navy is examining multi-year
procurement of the V-22. What is your plan?

Answer. We recommend waiting until the completion of Operationad Test and
Evaluation and Lot 1 deliveries in fiscal year 200(). Fiscal year 2001 would be the
first year that multi-year procurement would be feasible and prudent.

Question. The fiscal year budget requests $602 million for four aircraft, which ap-
pears to be $150 million each. Understanding that your budget contains one-time,
non-recurring costs that will be amortized over the entire production run, please teU
us the per-unit cost of these first four aircraft;. How does this compare to the ulti-
mate target cost of the V-22 once full rate production is achieved?

Answer. The recurring flyaway cost for each of these first four aircraft is approxi-
mately $112 million (then-year dollars). The remainder is for the procurement of lo-
gistics, support and some non-recurring production costs. The cost should decrease
to approximately $68 million (then-year dollars) per aircraft at full rate production
in fiscal year 2001. The current government estimate of the average unit flyaway
cost over the entire production lot is $38.8 million (fiscal year 1994 constant dol-
lars). The contractor's goal is below $30 million.

Question. How are the contractors performing in terms of cost and schedule?

Answer. In general, the program is slightly behind schedule and slightly over
budget with no impacts to first flight on other critical path items.

Question. The Navy planned to spend $172 million in fiscal years 1996-1997 on
developing a Special Operations Forces — SOF variant of the V-22, but only has $97
million applied to the requirement at this time. Why has the SOF variant been un-
derfunded, and what is the impact in terms of schedule and cost on the CV-22 de-
velopment plan?

Navy Answer. The CV-22 was not underfunded. Late in 1994, the Department
of the Navy committed to funding CV-22 development based on a government cost
estimate of $550 million. At that time, the manner by which some of the CV-22's
requirements were to be met was not clearly defined. The contractor's initial pro-
posal came in significantly higher but after much discussion and review, the pro-
posal had been reduced to approximately $560 million for the configuration required
by USSOCOM to meet its Initial Operating Capability (IOC) requirements. The De-
partment of the Navy will fund thus cost. We also now plan to remanufacture an
MV-22 test aircraft into a production-representative CV-22 test aircraft, instead of
procuring a new aircraft. These plans will have no impact on the start of CV-22
flight testing or CV-22 IOC.

Marine Corps Answer. The V-22 Research, Development, Test & Evaluation
(Navy) ftinding profile includes resources to develop the Marine Corps MV-22 base-
line program, as well as the U.S. Special Operations Command (USSOCOM) CV-
22 variant. In support of this phase of the program, the DoN and USSOCOM are

236

nearing resolution of a program plan that is acceptable to the user, executable with-
in existing resources and that maintains the MV-22 Initial Operational Capability
of fiscal year 2001 and the desired CV-22 Initial Operational Capability of fiscal
year 2005.

F-14 Aircraft

Question. Because plans for F-18E/F replacements for F-14 aircraft have been
firmed up, the Navy performed a "soup to nuts" review of all aspects of the F-14
program. This has resulted in a program restructure that affects when F-14s will
now be retired, how F-14s are deployed on aircraft carriers, and which modifica-
tions to ftxnd. The F-14 community should be commended for its aggressive
self-management that allowed it to fund many of the fleet's top war fighting im-
provements to the F-14 with no increase to its budget. This fiscal year 1997 budget
requests $232 mUlion for F-14 modifications. Admiral Lopez, please describe what
has been done to restructure the F-14 program.

Answer. The F-14 program remains very robust in order to bridge the gap await-
ing the introduction of the F/A-18E/F program. With precision strike capability
planned for 80 F-14As, 67 F-14Bs, and 50 F-14Ds, the Navy will be able to effec-
tively maintain a 50 Strike/Fighter airwing. A total of $650 million has been tar-
geted through the PTDP for F-14 operational and logistical enhancements which in-
clude:

F-14A/B/D FLIR (LANTIRN) System;

F-14B Upgrade;

F-14A/B/D Global Positioning System (GPS);

TARPS Digital Imaging; and

Planned Improvements to Top 10 Readiness Degraders.

Additionally, over the FYDP $350 million (35% of the total F-14 budget) has been
targeted for structural and safety related modifications. This translates to over 20
safety related modifications and 3 major structural safety modification packages in-
work or planned.

Question. Describe the Navy's new plan to retire F-14s sooner than originally
planned, and the new concept of dedicating F/A-18F (2 seat version of the newer
model F/A-18 aircraft to replace F-14s.

Answer. The Navy plans to begin retiring F-14 coincidental with the delivery of
the F/A-18F. Beginning in fiscal year 2001, the 7 F-14A squadrons wiU begin to
retire and will be out of inventory by fiscal year 2004. F-14Bs will begin to retire
in fiscal year 2006 and out of inventory by 2010. F-14Ds will remain until 2010.

Question. Describe the increased war fighting capabilities afforded to the Navy by
mixing F-14B and F-14D models within integrated 12-aircraft squadrons on 5 air-
craft carriers compared to today's approach of having just 2 F-14D squadrons on
2 carriers.

Answer. By fiscal year 1999, the Navy plans to mix F-14B Upgrades and F-14Ds
to form "Super" Tomcat squadrons, with each squadron consisting of eight Bs and
six Ds. The benefit of this plan is that currently there are only enough F-14Ds —
the most capable of the three F-14 models fielding systems like JTIDS, ASPJ, and
the APG— 71 — to man two aircraft carriers. Likewise there are only enough F-14B
Upgrades, also a very capable fighter with many common capabilities to the F-14D,
but with some unique capabilities as well, to man three carriers. By mixing the F-
14Ds and F-14B Upgrades into one squadron, the Navy is able to spread the com-
mon and unique capabilities of both aircraft across five carriers. The major advan-
tage to this plan is that it saves the Navy millions of dollars by not having to add
B Upgrade capabihties to the F-14D and vice versa. This operational concept has
already had limited testing by VX-9 and the results look good. The two areas that
are still under review are (1) logistical; outfitting five carriers with sufficient sup-
port equipment; and, (2) training aircrew and maintenance personnel to support two
models of F-14 aircraft. The fleet is working both of these issues very hard and to
date, have found no show stoppers.

Question. The Committee has long been concerned about reengining underpow-
ered F-14A model engine aircraft. Please explain your views on reengining the F-
14 Fleet. How long do you now plan to have F-14A model aircraft with TF30 en-
gines in the Navy inventory? Discuss recent plans to modify the TF30 engine to in-
clude a breather pressure sensor, and how this is expected to improve safety of oper-
ation of the engine.

Answer. The TF30 engine has always been a problem because of poor stall mar-
gin. The approximate cost of converting the TF30 engines to the FllO is approxi-
mately $23 million per aircraft. An additional cost to bring the aircraft up to pro-
jected fleet F-14B configuration (precision strike/upgrade) is approximately $5 mil-

237

lion per aircraft making the total conversion cost approximately $28 million per £iir-
craft. If started now, first deliveries of the re-engine aircraft would not begin until
fiscal year 1998 at the earliest. With planned retirements of the F-14A aircraft be-
ginning in fiscal year 2001, and fleet requirements of F-14 aircraft decreasing as
a result of the projected introduction of the F/A-18E/F, a TF30 conversion program
is not considered a wise investment. Additionally, the Digital Flight Control System
(DFCS), now planned for first incorporation in F-14A aircraft, will virtually elimi-
nate the departure/out-of-control problems that are often attributable to the poor
performance of the TF30.

Question. Much publicity has been given to recent F-14 crashes. Explain what ac-
tions will be taken by the Navy's acquisition community plans to address this prob-
lem, and specifically recent plans to incorporate a digital flight control system into
the aircraft.

Answer. The F-14 program office has targeted two major safety improvements for
the F-14.

1. DFCS: Since introduction of the F-14 there have been a total of 35 aircraft lost
(34 F-14As and 1 F-14B) due to out-of-control flight mishaps. In addition, carrier
landing line-up problems have been cited as a contributing factor in 8 carrier land-
ing mishaps. In an effort to address the above problems, in July 1992, a Digital
Flight Control System (DFCS) program was initiated with GEC Marconi Avionics,
Inc. (GEC) of Rochester, England as part of a Foreign Comparative Technology
(FCT) demonstration effort. The FCT demonstration program was successfully com-
pleted in December 1995 demonstrating departure resistance, autonomous spin re-
covery, and much improved flying qualities during carrier landings, particularly af-
fecting aircraft safety and boarding rates. Based on this successful demonstration,
the director of Air Warfare (N88), with full support of the Chief of Naval Oper-
ations, directed the Naval Air Systems Command to procure DFCS production hard-
ware as quickly as possible. A sole source production baseline contract was signed
with GEC Marconi March 29, 1996. The total cost of this modification program is
expected to be approximately $83 million, which includes procurement, engineering
integration, and fleet installations for 96 F-14As (includes 16 Reserve aircraft), 81
F-14Bs, and 50 F-14Ds. The first installations will be F-14A aircraft, targeting
those aircraft operating in high risk environments — Air Combat Maneuvering
(ACM) training, pre-deployment work-ups, and deployment aircraft. Installations on
F-14A aircraft will begin June 1998 at a rate of 8 per month with all F-14As com-
plete by June 1999. F-14Bs and F-14Ds will be complete by December of the fol-
lowing ye£ir.

2. F-14 / TF30 Breather Pressure: There have been a number of TF30 engine com-
ponent failures that have resulted in catastrophic engine failure and loss of aircraft.
NAVAIR is currently executing an engineering change to install a new pressure sen-
sor on the engine breather duct — in order to detect a common characteristic of the
known failure methods — and provide the aircrew a caution light in the cockpit. The
aircrew will then be able to retard the affected throttle thereby reducing the pres-
sure within acceptable limits and preventing catastrophic failure. Installations will
begin November 1996 and be complete by the end of fiscal year 1997. In the interim,
inspections for breather pressure malfunctions are performed on deck by mainte-
nance personnel.

Question. Describe the Navy's plan to use the Air Force's LANTIRN night-attack
system on the F-15 to support bombing operations. When will this capability be
available to the fleet?

Answer. LANTIRN gives the F-14 an autonomous designation and targeting capa-
bility, allowing delivery of precision laser-guided conventional and penetrating
weapons, specifically GBU-10 (20001b), -12 (5001bs), -16 (10001b), and the GBU-24
Penetrator (25001bs). The system will be employed against high value, time sen-
sitive targets, varying from strategic enemy operation centers, bridges, critical choke
points, etc. to land combat vehicles. The F-14 will be able to operate day or night
from a high altitude (25Kfl) sanctuary. LANTIRN capability will be installed in 80
F-14As, 81 F-14Bs and 50 F-14Ds. The first systems are scheduled to deploy this
June with VF-103 (F-14B aboard the USS ENTERPRISE Battle Group) and again
this fall with the ROOSEVELT Battle Group. Starting in April 1997, all deploying
Battle Groups will have LANTIRN capable F-14s.

Question. Describe your plan to drop AMRAAM capabilities from the F-14 fleet,
and the warfighting implications of doing so. Describe the condition of the Navy's
wartime stock level of Phoenix missiles that would be now used exclusively in lieu
of AMRAAM, as well as comparing the annual training costs for F-14s using 2 dif-
ferent systems. Will this adversely affect the number of missiles that pilots are al-
lowed to shoot each year during training?

238

Answer. AMRAAM was only planned for the F-14D model. F-14A and B model
aircraft would continue to use the AIM-54C Phoenix missile. On the plus side,
AMRAAM is improved capabilities over the Phoenix. However, AMRAAM integra-
tion proved too costly to justifiy the small warfighting increased by adding it to the
F-14D. The fleet felt that the money saved would be better spent on performance
improvements like ASPJ, night vision devices, and JTIDS. The AIM-54 Phoenix is
an effective long range weapon and is fully supportable through 2010 for all F-14
models. Stajdng with the Phoenix would have no training impact to the fleet.

Question. Describe in detail for the record each modification now planned to be
made to the F-14, with its rationale, expected benefit, projected cost (R&D, procure-
ment, total), and estimated fielding date?

Answer. The four listed programs define the major programs currently being fund-
ed for the F-14. In addition to these programs, over the FYDP approximately $21
million will be used to improve components (Top Ten Readiness Degraders) and ap-
proximately $50 million will be used to improve safety.
F-14 MODERNIZATION ROADMAP;
MODERNIZATION OF THE F-14 TOMCAT;
F-14 FUNDING STATUS APN-5; and
F-14 FUNDING STATUS R&D.

Question. For the record, name each F-14 unfunded fiscal year 1997 requirement
and the savings or operations benefit that would accrue if funded by the Congress?

Answer. The fiscal year 1997 President's Budget requests fiall funding for F-14
programs. The F-14 program's priorities for additional fiscal year 1997 funding, if
available, would be as follows:

$17 million for the F-14 precision strike program. This accelerates F-14 precision
strike LANTIRN pods to support fleet operational tempo eliminating extensive
equipment cross-decking.

$2 million will give the Navy continuous F-14 precision strike capability in the
Bosnia op area following the first LANTIRN deployment with F-14Bs in June 1996.

$23 miUion to incorporate ALE-50 (towed decoy) on all F-14A and F-14B TARPS
configured aircraft.

$10.8 million to increase the number of F-14A ALR-67 radar warning receiver
installations from 6 to 9 aiircraft per squadron.

$6.6 million to increase the number of night vision cockpits/goggles for all F-14
models from 6 to 14 aircraft per squadron.

F-18 AjRCRAFT

Question. The fiscal year 1997 budget requests $2.6 billion for the F/A-18E/F pro-

fram: $2.2 billion to initiate production of 12 new model F/A-18E/F aircraft and
361 million for continued RDT&E. Last year, the Navy conducted the first flight
of the new model F-18 ahead of schedule, under weight, and on budget.

Mr. Douglass, what is the status of the F/A-18E/F program?

Answer. The Airframe and engine contracts are 79% and 83% complete, respec-
tively. The program is on cost, on schedule and performing to specification. For
these reasons last week, I authorized the F/A-18 program manager to acquire long
lead material for the first twelve Low-Rate Initial Production (LRIP) aircraft. These
aircraft will be delivered in 1999 and be used for operational evaluation and later
for training the first F/A-18E/F aircrew. Several weeks ago the F/A-18E/F received
OSD's first every Acquisition Excellence Award.

Question. The program is in transition from development into the production — a
critical time. Is the program ready to proceed into production?

Answer. The program has transitioned to flight test phase at Patuxent River,
Maryland. Recently the Early Operational Assessment (EOA) using the first two
EMD aircraft was successfully completed, I am confident we will be in a position
to award a fiscal year 1997 contract for twelve LRIP I aircraft which will deliver
in fiscal year 1999. Additionally, Production Readiness Reviews at the primes have
been successfully completed and a manufacturing plan is nearing completion with
a strong focus on affordability, producibility and process controiystability.

Question. The budget requests $2.2 billion for production of 12 aircraft, which ap-
pears to be about $180 million per airplane. Understanding that your budget con-
tains one-time non-recurring costs that will be amortized over the entire production
run, please tell us the per-unit cost of these first 12 aircraft. How does this compare
to the ultimate target cost of the F/A-18E/F once full rate production is achieved?

Answer. The unit recurring flyaway cost for the first 12 aircraft in fiscal year
1996 dollars is $130.6 million as planned. The average unit recurring flyaway cost
for the planned procurement of 1000 aircraft is $37.2 million in fiscal year 1990 dol-
lars and $43.4 million in fiscal year 1996 dollars. This compares favorably with the

239

average unit recurring flyaway estimates provided at the May 1992 Defense Acqui-
sition Board, (1000 qty) of $36.5 million in (fiscal year 1990) which equates to $42.1
million in fiscal year 1996 dollars.

Question. What is the status of the F/A-18E/F development program in terms of
cost, schedule, and contractor performance? Does the Navy plan to live within its
$4.88 billion cost cap (in fiscal year 1990 dollars)?

Answer. The program is on cost, on schedule, and delivering to specified perform-
ance. Yes, the Navy plans to live within its $4.88 billion cost cap (in fiscal year 1990
dollars).

Question. Describe the shortfall of F/A-18C/D aircraft that exists, and how this
affects daily operations.

Navy Answers. The F/A-18C inventory is 30 aircraft below that is needed for an
all F/A-18C force to support the CINC's eleven carrier airwing requirement (10 ac-
tive plus 1 reserve) for outfitting 12 aircraft carriers (11 active plus one reserve).
This limits the operational capability {e.g. AMRAAM, night strike) in those air
wings which have F/A-18A's. Designation of eight (of 18) fiscal year 1996 aircraft
as F/A-18D's for the Marine Corps prevented a projected shortfall in fiscal year
2000. The unfunded requirement for F/A-18D's, to meet our force structure needs,
until fielding of the Joint Strike Fighter replacement in fiscal year 2010 is 28 addi-
tional aircraft. Potential shortfalls and solutions beyond the FYDP are being evalu-
ated by the Navy and Marine Corps requirements offices.

Marine Corps Answer. The Department of the Navy's F/A-18C inventory should
remain adequate to support USMC requirements until IOC of the Joint Strike
Fighter (JSF) however, the F/A-18D shortfall will become critical in fiscal year
2004. Current F/A-18D inventory projections are based on peacetime attrition and
full Health of Naval Aviation (HONA) funding which provides the aircraft the capa-
bility to achieve its planned Fatigue Life Expenditure (FLE) of 1.0. Currently below
the required numbers, and underfunded in HONA dollars the F/A-18D primary Air-
craft Authorized (PAA) inventory will be unable to support Fleet Readiness Squad-
rons (FRS) in fiscal year 2004 and will be unable to support the Marine tactical
squadron's Primary Mission Aircraft Authorized (PMAA) in fiscal year 2009. This
trend will exacerbate the currently strained ability of the FRS's to provide Combat
qualified Pilots and Weapons Systems Officers to Fleet Marine Force and Fleet
Navy squadrons and will eventually lead to significant reductions in warfighting ca-
pacity.

Question. If additional funds were provided by Congress in fiscal year 1997, what
would be the advantages in terms of cost savings or operational improvements from
continuing F/A-18C/D production to ensure there was a sufficient Taridge' between
the two models?

Navy Answer. There would be some savings due to economies of scale. Addition-
ally, it would help alleviate the capability shortfall. The replacement of less capable
F/A-18A's with additional F/A-18C's would provide operational improvements by
providing the fleet with capability for JDAM, JSOW, Digital Communications,
Multi-functional Information Distribution Systems (MIDS), and Link 16, while
maintaining our warfighting capability as we wait the introduction of the F/A-18E/
F. Additional domestic quantities would also provide lower total program cost to our
fiscal year 1992 Foreign Military Sales customers.

Marine Corps Answers. The Department of the Navy's F/A-18C inventory is ade-
quate to support USMC requirements until IOC of the Joint Strike Fighter (JSF),
however, the F/A-18D shortfall will become critical in fiscal year 2004. Current F/
A-18D inventory projections are based on peacetime attrition and full HONA fund-
ing, providing the aircraft the capability to achieve it's planned Fatigue Life Ex-
penditure (FLE) of 1.0. Currently below the requirement inventory, and under-
funded in HONA, the F/A-18D inventory will be unable to support pilot training
in Fleet Readiness Squadrons (FRS) and warfighting capability in Marine tactical
squadrons in fiscal year 2004 and will be unable to support just the Marine tactical
squadrons in fiscal year 2009. Procurement of an additional 28 F/A-18D aircraft will
allow the Marine Corps to meet JSF IOC, to maintain its Neckdown Strategy to a
single tacair T/M/S. If Congress provided $255 million for 6 aircraft in fiscal year
1997, the critical shortfall would not occur until approximately fiscal year 2006. Ad-
ditional significant savings occur when procuring the aircraft in fiscal year 1997 and
the current FYDP by precluding payment of line shutdown and restart fees after
the turn of the century.

AV-8B Aircraft

Question. The Navy plans to upgrade 72 Marine Corps' day-attack AV-8B aircraft
to the night-attack configuration at an estimated cost of $2.2 billion. The fiscal year

240

1997 budget requests $336 million for production of 10 aircraft. The General Ac-
counting Office released a report this month entitled "AV-8B Harrier Remanufac-
ture Strategy is Not the Most Cost-Effective Option." What is the status of the AV-
8B program?

Answer. The fiscal year 1997 budget provides for the remanufacture (reman) of
72 aircraft, the first of which were financed in fiscal year 1994. The AV-8B reman
program is on track with 8 aircraft inducted into the Depot at Cherry Point. Reman
aircraft #1 was delivered 5 weeks ahead of schedule with no GFE shortages. Reman
aircraft #2 is currently planned to be delivered approximately 6 weeks ahead of
schedule.

Question. GAO says it would be more cost-effective to build new aircraft than to
remanufactxire existing ones, saving up to $6 million per aircraft. What are your
views?

Answer. GAO analysis compared remanufacture at low production rates using an-
nually contracted procurement with new production at high rates under a multis-
year scenario. The two procurement strategies are not comparable. Had the high
rates and multi-year criteria been applied to remanufacture, GAO's analysis would
have shown remanufacture to be significantly cheaper than new production. Both
department and independent OSD analyses of the cost of remanufacture versus new
have consistently supported the savings to be gained from remanufacture.

Question. GAO ftirther says that the accuracy of the Marines's cost estimates and
overall success of the program are contingent on the Navy's ability to provide com-
ponents to the contractor in a manner that will not cause production delays. GAO
says it is questionable whether the Navy's depot at Cherry Point can meet produc-
tion schedules and cost estimates. Apparently, the first aircraft has taken twice as
many hovu-s as expected to disassemble. What is the problem at the Cherry Point
depot?

Is GAO's contention accurate that "although the depot expects to reduce the dis-
assembly time as it gains experience with the process, the required time will still
exceed the amount originally planned"?

Answer. As a result of the Milestone IV DAB approval not being issued until late
March 1994, the first fiscal year 1994 aircraft was inducted late, and there was in-
sufficient time to process the aircraft as a prototype. However, we believed the risk
of proceeding on a production basis was small and that any problems that might
be encountered coxild be resolved without impacting production schedules. The fact
that REMAN #1 was deUvered ahead of schedule, without GFE shortages sustains
that decision.

While the depot processing cost of the first aircraft was above early program esti-
mates, in fact, based on current estimates, the average unit cost of the NADEP ef-
fort will not be significantly higher than anticipated. Further, the NADEP effort
constitutes less than 3% of the total cost of the remanufacture process, yet contrib-
utes more than 25% of the value of the aircraft. Any minor increase in NADEP proc-
essing costs is more than offset by the tremendous return on investment rep-
resented by the reused components.

Question. Explain why both McDonnell Douglas and the depot have not been able
to provide components in a timely fashion so far, and what has been done by the
Navy to address this problem.

Answer. While there have been instances of the contractor and the depot being
late to contract requirements for some parts and components, the percentage of the
total number of components involved is very small — less than 1%. Most of these are
attributable to the late fiscal year 1994 start date while still preserving the original
aircraft schedule. A few others are attributed to system wide parts shortages that
also affect deployed aircraft, while a select few are the result of purchasing prob-
lems associated with the extremely low annual production rate (4 aircraft). Each of
these issues has been worked on a case-by-case basis to identify both short term
work around to prevent schedule delays and long term corrective action to end the
problem. Very few such problems remain, and nearly all have long term solutions
identified.

Question. Why are APG-65 radar assets for the AV-8B not going to be available
as originally planned?

Answer. Three components of the APG-65 radar for the AV-8B remanufactured
aircraft are provided by the F/A-18 program as a result of the F/A-18 radar up-
grade (RUG) retrofit program. The schedules for RUG retrofit do not match, on a
one for one basis, the production GFE requirements for AV-8B remanufacture —
though the total quantities are sufficient. To cover the schedule mismatches, the
Navy plans to utilize existing spares. However, due to fleet operating demands, suf-
ficient quantities of the correct configuration spares could not be provided without
impacting fleet readiness. To resolve this problem, the Navy is upgrading a quantity

241

of excess older configuration spares to the needed configuration. Therefore, APG-
65 components will be available for AV-8B remanufacture when needed.

Question. A June 1994 DoD Inspector General report suggested that savings of
$150 million are available in the AV-8B remanufacture program through multi-year
procurement. The Navy sent Congress a "business as usual" report last year indi-
cating that you would "take a look at it in 1998". GAO now says that by 1998, half
of the aircraft will be under contract — essentially missing the opportunity to achieve
any real savings from multi-year procurement. Why has the Navy failed to take ad-
vantage of multi-year procurement in this program?

How much would be needed to be added to your budget in fiscal year 1997 for
AV-8B remanufacture to allow multi-year procurement starting in fiscal year 1997,
and what would be the resultant savings from such an action?

Answer. It is generally agreed that multi-year procurement strategies result in
some level of cost savings and that the earlier in a program's history such a step
can be responsibly taken, the greater the savings will be. Approximately $36.6 mil-
lion in fiscal year 1997 would be required to properly fund a multi-year contract for
the current AV-8B procurement profile, which would result in savings of 5-7 per-
cent from the current program.

Question. Last year the Congress provided funds for 4 additional aircraft (total of
8). Has OSD "released" these additional funds to you, and if not, why? What con-
tract inefficiencies or other cost penalties will be incurred by contracting for the fis-
cal year 1996 aircraft in 2 batches rather than one?

Answer. OSD has released the additional funds, and the contract for the addi-
tional aircraft has been let.

The program manager is contracting for a total of 8 aircraft for the fiscal year
1996 production buy. The contractor, at his own risk, protected the long lead-time
requirements for the additional aircraft and contract definitization was delayed
pending final authorization of the additional quantity. Therefore, little additional
cost penalty was incurred.

Question. What impact does the new GAO report have on the Navy's plan and/
or ability to execute the AV-8B remanufacture program?

Answer. Because the GAO report does not compare remanufacture with new pro-
duction under similar constraints — the Navy intends to continue remanufacture as
planned. However, serious consideration of undertaking a multiyear initiative is un-
derway.

E-2C AlKCRAFT

Question. The fiscal year 1997 budget requests $212 million for E-2C aircraft
modernization, of which $147 million is for production of two aircraft and $65 mil-
lion is for R&D. Although the Navy last year was headed for a very stable four-
per-year production profile on this important program, it is now going the wrong
way from a production line effectiveness perspective: four aircraft in 1995, three in
1996, and two in 1997, and four per year projected for fiscal years 1999 through
2001. Mr. Douglass, would you use any of the following words to describe the Ad-
ministration's E]-2C production profile contained in the fiscal year budget: "good,"
"efficient," "cost-effective," "stable," "wise," or "smart?"

Answer. The Navy certainly strives to maximize efficiency and cost effectiveness
in its production programs, but in some cases overall affordability precludes an opti-
mal profile. This has been the case with the E-2C program. We are diligently work-
ing to put the E-2C production profile back on a stable course in fiscal year 1998
and the outyears.

Question. What is the per-unit cost penalty of producing only two aircraft in fiscal
year 1997 compared to the four originally planned last year?

Answer. The per-unit penalty of producing two E-2Cs in fiscal year 1997 vice four
as originally planned is $13.2 million on an aircraft that costs $67.2 million. In
other words, the recurring unit flyaway cost increases from $67.2 million when buy-
ing four aircraft per year to $80.4 million when bujdng only two aircraft. However,
the difference of $107.8 million in total procurement cost from $262.4 million (four
aircraft) to $154.6 million (two aircraft) was needed for other Navy priorities.

Question. Last year Congress appropriated advance procurement funds in fiscal
year 1996 to support four aircraft in 1997. Since only two are now budgeted, how
much of the fiscal year 1996 E-2C advance procurement funds are no longer needed
and how will they be used?

Answer. All of the advanced procurement funding in fiscal year 1996 is required
to meet the per unit cost increase resulting from the production profile reduction
f.'om four or two in fiscal year 1997.

242

Question. Last year Congress added $10 million in R&D to accelerate development
of the E-2 radar modernization program. The Committee understands that in pre-
paring the fiscal year 1997 budget, OSD has not only failed to release the 1996
funds to you but it also cut $10 million from fiscal year 1997 out of the unrelated
computer upgrade program. Given these events, is the Navy better off or worse off
than if Congress had provided no add-on last year?

Assuming that we insist that the fiscal year 1996 funds be spent for the purpose
for which we appropriated them (radar upgrade), what is the impact to the com-
puter upgrade development effort (in terms of cost and schedule) and the ability to
insert the new computer into the E-2C production line in a timely fashion if the
$10 million that OSD cut from fiscal year 1997 is not restored by the Congress?

Answer. The Navy is neither worse off nor better off with the $10 million fiscal
year 1996 plus-up and subsequent reduction of $10 million in fiscal year 1997. The
Mission Computer Upgrade (MCU) and the Cooperative Engagement Capability
(CEC) are the Navy's highest priority E-2C modernization programs with signifi-
cant Congressional interest. The Congressional plus-up in fiscal year 1996 for radar
modernization would initiate a new program start, whereas the fiscal year 1997 re-
duction was from the ongoing MCU program.

The plus-up will allow acceleration of site preparation efforts in fiscal year 1996
for Mountain Top Test Facilities; some but not ^1 of these tasks were planned and
budgeted for in fiscal year 1998. Pending release of these funds, we anticipate that
$6 million could be expended in this fiscal year to meet Radar Modernization Pro-
gram (RMP) requirements. The additional $4 million of fiscal year 1996 funds would
be utilized in fiscal year 1997 to keep MCU and CEC on track as both are required
to perform planned Mountain Top Tests in fiscal year 1997 and fiscal year 1999.
Question. What are the potential costs and savings from multiyear procurement
for E-2C production, should the Navy be able to reach a stable four per year level?
Answer. The previous estimates on potential cost savings from a multiyear pro-
curement 3delded less than ten percent savings when producing four aircraft per
year; however, the up found funding required is high. Over $110 million would be
required in the year prior to production.

Question. Admiral Lopez, please describe what warfighting capabilities the new
E-2C's will bring to the fleet. How do the CINC's and the fleet commanders react
to the 1997 E-2C production profile — does it meet their needs?
Answer. The E-2C Group II provides:
Increased detection range;
Increased track capability;

Increased situational awareness through multicolor displays;
Increased link capability with JTIDS; and
Increased on station time.
The CINC's and fleet commanders desire the earliest possible introduction of an
all Group II fleet to realize the increased operational capabilities and commonality.

P-3 Aircraft

Question. The Committee noted last year that the Administration had a very inef-
ficient program for P-3 aircraft Anti-Surface Warfare upgrades, noting that an in-
crease of 27 percent over 6 years ($172 million) would double the number of aircraft
delivered to the fleet in large part due to significant per unit cost savings. For this
reason, the committee added ftinds to increase the 1996 budget from 7 to 12 modi-
fications. The Administration has not only delayed executing these additional funds
(incurring up to $12 million in unnecessary costs in the process) but it has re-
sponded by cutting fiscal year 1997 to only 1 modification from the 6 planned a year
ago. The Committee is disturbed that last year the Navy forecast $83 million to pro-
vide 6 Anti-Surface Warfare — ASUW aircraft modifications in 1997, compared to the
new budget request of $52 million for just 1 modification: this results in an unwar-
ranted 263 percent unit cost increase from your projected level and 394 percent from
the 1996 appropriated level. Mr. Douglass, it appears that this program would have
been better off if Congress had done nothing last year rather than providing addi-
tional funds. Would you agree?

Answer. No. The current 12/1 profile resulting from the Congressional plus-up
and subsequent Department budgetary actions actually will save the program $2.1
million over the original 7/6 profile. However, the funds are still on OSD hold.

Question. How many years will it take to modernize the P-3 fleet if each mod
costs $50 million when it really should cost just $12 million?

Answer. Actual cost of an AIP Anti-Surface Warfare Improvement Program kit at
a quantity of one in fiscal year 1997 is acknowledged to be high at $19.9 million
compared to the average cost of $12 million. However, the 12/1 profile provides the

243

same quantity as the original 7/6 profile on an accelerated schedule and saves the
program $2.1 million. The minimum executable option of one must be exercised if
we are to maintain the follow-on fiscal year 1998 contract option.

Question. Because OSD has not released the fiscal year funds for 5 additional air-
craft, the Navy must execute the 1996 program in 2 lots instead of 1. How much
wasted cost is involved in this acquisition strategy?

Answer. The purchase of the first seven AlP kits was delayed until March 29,
1996. The Navy has 60 days in which to increase the quantity with no cost penalty.
If the funds for the five additional aircraft modifications are released after May 29,
1996, the strategy would be to exercise seven systems in fiscal year 1996 and six
systems in fiscal year 1997 and the $2.1 million savings would be lost.

Question. Our concern last year was to get this program beyond the minimum
level, to achieve significant unit cost savings, and deliver capability to the fleet
much earlier. Does the Administration's 1997 plan accomplish any of these goals?

Answer. No. The Department recognizes Congressional intent to increase AlP pro-
curement to an economic quantity and introduced the capability to the Fleet earlier,
however, budgetary priorities preclude acceleration of AlP at this time.

Question. Please explain why the P-3C Anti-Surface Warfare Improvement pro-
gram for 146 aircraft; modifications has increased by $121 million since last year
with not even a single increase in aircraft quantity.

Answer. The increase in total program cost has resulted from a decrease in the
projected procurement rate which results in average unit price increases.

Question. How much additional funding would be required in fiscal year 1997 to
restore the P-3C ASUW modification program to 6 aircraft as projected by the Navy
last year?

Answer. An additional $50.0 miUion would be required in fiscal year 1997 to fully
restore the P-3C ASUW modification program to six aircraft; $31.3 million for air-
craft kits and $18.7 million for kit installation and shortfalls in logistics, training,
and the government HabUity for the FPI — Fixed Price Incentive contract resulting
from the fiscal year 1996/1997 adjustments.

Joint Advanced Strike Technology

Question. The fiscal year 1997 budget requests $589 million to continue concept
exploration of the Joint Advanced Strike Technology, which eventually will lead to
the development of the next generation Joint Strike Fighter. This program proposes
to develop a new family of aircraft that could be available for the Air Force, Navy,
and Marine Corps. What is the status of the Joint Strike Fighter program?

Navy Answer. The program is nearing completion of its Concept Development
Phase. This phase focused on: (1) developing designs that take advantage of the
"family of aircraft" concept; and (2) defining the necessary leveraging technology
demonstrations that will lower risk prior to entering E&MD of the Joint Strike
Fighter. The "family of aircraft" concept allows a high level of commonality while
satisfying unique service needs. The program is preparing for contract awards for
the Concept Demonstration Phase which will commence in early fiscal year 1997.

Marine Corps Answer. The program is nearing completion of its Concept Develop-
ment Phase. This phase focused on (1) developing designs that take advantage of
the "family of aircraft" concept and (2) defining the necessary leveraging technology
demonstrations that will lower risk prior to entering Engineering and Manufac-
turing Development of the JSF. The "family of aircraft" concept allows a high level
of commonality while satisfying unique service needs. The program is preparing for
contract awards for the Concept Demonstration Phase which will commence in early
fiscal year 1997.

Question. Discuss plans to "downselect" from 3 industry teams, to include timing
and criteria for this decision.

Navy Answer. The Concept Demonstration Phase commences in early fiscal year
1997 following the competitive downselect from three potential weapon system con-
cept teams to two. Each winning contractor team defines those demonstrations it
believes are crucial for its concept vis-a-vis providing concept assessment and ensur-
ing a low risk technology transition to E&MD. This phase will feature flying concept
demonstrators, concept unique ground and flight demonstrations, and continued re-
finement of the contractors preferred weapon system concepts. Specifically, the two
winning contractor teams will demonstrate commonality and modularity, short take-
off and vertical landing — STOVL hover and transition, and low speed handling
qualities of their concepts.

Marine Corps Answer. The Concept Demonstration Phase commences in early fis-
cal year 1997 following the competitive downselect from three potential weapon sys-
tem concept teams to two. Each winning contractor team defines those demonstra-

244

tions it believes are crucial for its concept vis-a-vis providing concept assessment
and ensuring a low risk technology transition to Engineering and Manufacturing
Development. This phase will feature flying concept demonstrators, concept unique
ground and flight demonstrations, and continued refinement of the contractors' pre-
ferred weapon system concepts. Specifically, the two winning contractor teams will
demonstrate commonality and modularity. Short Take-Off Vertical Landing hover
and transition, and low speed handling quaUties of their concepts.

Question. How much is included in the fiscal year 1997 budget to enter the next
phase of the program, known as "engineering/manufacturing" development, and in
what month does the DoD budget assume E&MD award for purposes of developing
the 1997 budget estimate?

Answer. The President's fiscal year 1997 budget is $660 miUion. The next phase
of the program is the Concept Demonstration Phase, a 51 month effort commencing
in early fiscal year 1997. The fiscal year 1997 President's Budget reflects $461.6 mil-
lion in fiscal year 1997 to initiate that effort. E&MD is planned to begin in the 2nd
quarter fiscal year 2001. The fiscal year 1997 President's Budget reflects $875.3 mil-
lion for E&MD in fiscal year 2001.

Question. Describe the new teaming agreement with Britain, and how their funds
will be used.

Answer. The United Kingdom Royal Navy is committing $200 milhon to the Joint
Strike Fighter Program, extending a collaboration begun under the DARPA
ASTOVL program. UK funds will be allocated against the Concept Flight Dem-
onstration Phase Prime contractors.

Question. What items have you identified as high-risk in the Joint Strike Fighter
program?

Answer. The highest technical risk of the program is the total software integra-
tion of the flight and propulsion systems.

Question. When is the earUest that Joint Strike Fighter will field an aircraft to
replace current aircraft in each service (Navy, Air Force, Marines)?

Answer. First deliveries of operational aircraft are planned in 2008. Specific deliv-
ery schedule has not been finalized.

A- 12 Aircraft Litigation

Question. DoD terminated the A- 12 aircraft (a fighter sized B-2 shaped aircraft)
a few years ago, and has been in court with its contractors ever since. Mr. Douglass,
what is the status of the A- 12 litigation?

Answer. On December 19, 1995, the Court of Federal Claims converted the termi-
nation for default into a termination for convenience. A trial to determine damages
is scheduled to commence sometime in November 1996. No particular date has been
specified yet.

Question. What events he ahead?

Answer. A trial to determine damages is scheduled to commence sometime in No-
vember 1996. No particular date has been specified yet. It is probable that one or
more of the parties to the litigation will seek appellate review at some point in the
future.

Question. When do you expect the A- 12 court proceeding to end?

Answer. It is extremely difficult to predict when the court proceeding might end
because of the uncertainty of: (1) The duration of proceedings in the trial court, (2)
the time required for the preparation of any written decisions by the trial court, (3)
the time for any appeals, and (4) the time for any proceedings on remand after ap-
peal. Conceivably, the litigation may continue at least several more years.

Question. Should a judgment be made against the government, what is the range
of dollar values involved and how would these be paid?

Answer. The range of possible adverse judgment is more than $3 billion. At one
end of the range, the government could receive a refund of a part of the $1,335 bil-
lion of unliquidated progress payments already paid to the Contractor. At the other
end of the range, the Government could be required to pay the contractors in excess
of $2 billion more than it has already paid.

Question. From your vantage point, is the Government getting a "fair shake" in
the current court proceedings?

Answer. Cannot comment on this because the matter is in litigation.

Question. How much funding remains in expired R&D or procurement appropria-
tions today that could be used to pay such a judgment? Should Congress take some
action to extend the availability of these funds, or do you agree with the Navy Gen-
eral Counsel that any costs from the settlement should just be absorbed by the Navy
in fiiture year budgets?

245

Answer. As of November 1995, approximately $975 million of expired funds re-
mained from appropriations that funded the A- 12 program. Expired funds are not
available to pay judgments. In answering this question, I do not want to give the
impression that the Navy thinks or expects that it will owe money on the contracts.
In other words, I do not want to comment on the merits of the litigation. In response
to your question, the Navy's position is that if action to extend the funds and make
them available for a judgment will count against current budget authority, the Navy
would prefer not to count them until the funds are needed to make a payment. If
such action will not affect current budget authority, then it would be prudent to ex-
tend their availability. The Navy General Counsel concurs in this position.

INTERCOOLED RECUPERATIVE (ICR) GaS TURBINE ENGINE

Question. The budget requests $34 million to continue the ICR gas turbine engine
program, which the Committee unsuccessfully recommended be terminated last
year. Last September, the Commander of the Atlantic Fleet (Admiral Flanagan)
wrote to Admiral Lopez on the ICR stating: "The ICR Gas Turbine Program stands
out as a major cost without a realistic prognosis for long term benefit. The sunk
costs do not justify the continued investment in this era of constrained fiscal re-
sources. Technological advancements are such that the ICR will most likely become
obsolete before a return on investment is realized. I do not recommend further sup-
port for the ICR Gas Turbine Engine Program."
How did you answer your 4-star fleet commander?

Answer. Admiral Flanagan was very concerned about the ICR engine because it
had not proven out technically at that time and was not ready for testing. Since
that time I have sent the resource sponsor. Rear Admiral Dan Murphy, to visit Wes-
tinghouse, the lead contractor in the U.S. He has reported to me that Westinghouse
(now Northrop-Grumman) has taken major steps, particularly in management/lead-
ership of the program, to greatly improve the development of the program and sig-
nificantly reduce the long term risk. In addition. Admiral Murphy's deputy. Rear
Admiral Mullen visited the test site in Pyestock, UK, last month and observed a
very successful test of the ICR engine, which demonstrated that the fiiel efficiency
savings of up to 30% are technically feasible. I have received a report of this per-
sonal visit and am confident that the technical difficulties which Admiral Flanagan
was concerned about have been overcome. There is still a great deal to do, however,
I believe the development program is back on track.

Question. Has Admiral Flanagan, speaking in behalf of the fleet, changed his
mind on the merits of the ICR program?

Answer. Admiral Flanagan has not commented further on the ICR program. I
plan to give him an update of the testing program progress and our budget decisions
upon it within the next couple months.

Question. How much has been spent through fiscal year 1996 on ICR engine de-
velopment?

Answer. Through fiscal year 1996, the USN has spent $240.3 million on ICR en-
gine development. Foreign partners (UK and France) and Nunn Amendment ftind-
ing have contributed $34.6 million bringing the total funding on ICR engine develop-
ment through fiscal year 1996 to $274.9 million.

Question: How much more is there to go until production units can be made, in
terms of time and cost?

Answer. Approximately $122.1 million is required through fiscal year 2000 at
which time production units can be built.

Question. Last year, the ICR project reverted from "advanced development" to "ex-
ploratory development" due to poor technical performances. In what category is this
project included in the fiscal year 1997 budget?

Answer. The ICR development program was moved from advanced development
to exploratory development in December 1994 because exploratory development ap-
peared to be a more appropriate fiinding categorization. That assessment was re-
viewed and revised. In the fiscal year 1997 budget, ICR has returned to the ad-
vanced development funding categorization.

Question. What is the Navy's plan to put ICR into production ships? (For the
record, provide: Which ships, how many ships, how many engines per ship, when,
at what total cost and per unit costs.)

Answer. The Navy plans to install two ICR gas turbines on each of the last nine
DDG-51 Class ships beginning with the last ship appropriated in fiscal year 2001.
The President's Budget for the DDG-51 program includes $69.25 million (then year
$) in fiscal year 2001 for ICR introduction. The total to complete is $182 million,
or an average unit cost of $20.2 million per ship.

246

Question. Last year the DDG-51 Selected Acquisition Report (SAR) estimated a
cost of $249 million to install the ICR on just 13 ships, or about $19 million per
ship. What is the current plan and cost for the Aegis fleet?

Answer. The current plan and cost to install ICR on the last nine ships of the
DDG-51 Class is:

Fiscal year

2004

No. of Ships 13 2 3

Cost (Then Year $ in millions) $69.25 $43.15 $33.91 $33.75

Question. What is the Navy's current estimate for annual fuel savings per ship
once ICR is installed?

Answer. The September 1994 CNA study estimated annual fuel savings for a
DDG 51 at 860,000 gallons (20,476 bbl), which equates to about $650,000 based on
a purchase price of fuel of $0.75 per gallon ($31.50 per bbl). The following para-
graphs update this information and provide a description of immediate and future
cost savings based on operational scenarios, current fuel prices, and the delivered
cost of fuel.

A DDG 51 operating at 3000 hours per year as assumed in the reference case of
the CNA study operating on a representative profile with 2 ICR engines and 2
LM2500 engines will use 23,847 barrels per year less than the same ship operating
with 4 LM2500 engines.

In determining the cost savings associated with ftiel savings it is Navy poUcy to
use the cost of diesel fuel marine (DFM) as delivered to a warship in peacetime.
This guidance was promulgated by the Office of the Chief of Naval Operations in
a 1985 letter which gives specific guidance for use in fuel cost studies. NAVSEA pe-
riodically updates the cost of fuel based on this guidance.

The Cost Update of Diesel Fuel Marine incorporates actual historical operating
and support cost expenditures and depreciation of investment cost of ships and fuel
depot facilities on hand. No projection is made for fiature ship types, nor are fUture
fuel costs estimated.

Escort costs are not included in the study.

Based on a recent Cost Update of Diesel Fuel Marine the delivered cost of fuel
is $57.42/bbl. in 1994 doUars. Component costs included in the acquisition cost of
fuel ($32.76/bbl.), storage and handling ($3.66/bbl.), and delivery ($21.00/bbl.). The
resultant DDG fuel savings based on the delivered ftiel cost as defined in CNO guid-
ance is approximately $1,370,000 per ship/yr (1994$). Of this amount, $780,000 per
ship/yr (1994$) is in fuel acquisition cost savings realized immediately, the remain-
der would be realized as resultant reductions in requirements for Navy fuel storage
and handling and delivery are implemented.

Question. Last year, using Navy numbers, the Committee found that it would take
76 years to payback the investment if ICR were installed on Aegis ships (twice the
service life of the ships). Using the same math, are we better off today?

Answer. The Committee's computation was based upon installing only on Aegis
ships. The intent is to utiUze ICR in several classes of snip, and thus the investment
by CNA computations is paid back between the year 2020 and 2025, just over ten
years after the first SC-21 hits the water. The investment payback situation is con-
siderably better than the Committee's computations of last year.

Question. Last year, the engine had a catastrophic failure during testing. What
has been the system's technical performance during the past year?

Answer. The Limited Operation Unit (LOU) recuperator was shipped in December
1995 and commenced testing in February 1996. Engine testing with the new
recuperator has racked up over 120 hours and testing is going well, verifying the
feasibility of up to 30% fuel savings. Engine testing to date with the re-designed
recuperator has included a range of tactical maneuvers including fast accelerations
and deceleration's and a simulated crash-back. Subsequent periodic leak tests of the
recuperator have revealed that these maneuvers caused no degradation to the unit
and it remains intact as delivered to the test site.

University Research

Question. The Navy is the Defense Department's executive agent for university re-
search. The Office of Naval Research (ONR) negotiates and administers DoD re-
search contracts with universities. A few years ago, a major issue at universities
was the overcharging of inappropriate indirect costs to government contracts. Mr.

247

Douglass, where do we stand today on the issue of reform of the Defense Depart-
ment's university research contracts?

Answer. The problem was not with the awarding of research contracts, but with
the overhead rates that were charged to these contracts.

Navy has taken action to strengthen its overhead rate setting procedures by con-
solidating the negotiation function at its headquarters and establishing an expert
negotiation staff.

Question. How many DoD contracts with academic institutions today still have
unresolved prior-year overhead rate issues? What is the dollar- value of the total un-
resolved amount? When do you expect these to be completely resolved?

Answer. Overhead issues on all prior year contracts have been resolved except for
contracts at one university. Those contracts are pending normal business rate nego-
tiation and settlement until an investigation by the Defense Criminal Investigative
Service has been concluded. The unresolved amount is approximately $15.6 million.
The investigation is an open case, and we have no estimate of when it may be con-
cluded.

Question. What is being done to simplify the procedures used to determine indi-
rect overhead rates charged to DoD contracts by universities? Why doesn't the Navy
simply adopt a universal flat fixed rate overhead charge for all its university re-
search contracts? What is the number of people and attendant annual cost of the
government personnel and their related support costs required simply to negotiate,
administer, and audit university overhead charges?

Answer. Navy is using more predetermined rates, on a multi-year basis, where
business conditions permit. Use of multi-year predetermined rates reduces the over-
all audit and negotiation costs to both the Government and universities. DoD's pol-
icy to rely on A-133 audits, prepared by independent public accountants (IPAs), will
also reduce the Government's auditing costs. The Navy has not adopted a universal
flat fixed rate because all universities are not the same and such a rate would not
be equitable for all institutions. University costs vary base on geographical location,
urban vs. suburban campuses, private vs. public funding and type of research per-
formed. Office of Management and Budget (0MB) policy is to reimburse universities
for allowable and allocable costs. Navy endorses this policy. Navy has seven people
assigned to the negotiation of indirect cost rates and audit resolution matters at
universities and non-profit institutions. The Annual operating costs is approxi-
mately $850,000. We are not able to estimate the cost to administer and audit indi-
rect cost rates at universities, since these functions are performed by a variety of
federal agencies and independent public accountants.

Contract Abuse at the Johns Hopkins Lab

Question. An October, 1994 DoD Inspector General report indicated that the Navy
has spent over $6 billion sole-soiirce to Johns Hopkins University since World War
II and that the fee paid to Hopkins' Applied Physics Lab had not been evaluated
since 1962. A new December, 1995 DoD IG report discloses questionable Navy prac-
tices for placing and monitoring task orders and administering contracts at Johns
Hopkins that are valued at $3.2 billion over 8 years, or about $400 million per year.
The report says that the government could not, among other things, determine that
costs were necessary and reasonable, verify what work was ordered, and determine
whether the work performed was within the scope of the contract.

Mr. Douglass, please summarize the problems that the DoD Inspector General
has discovered with the Navy's management of the $3.2 Billion contract at Johns
Hopkins, and what the Navy is doing to fix the problem.

Answer. The $3.2 billion involves two consecutive contracts covering eight years
of Navy and DoD work at Johns Hopkins University (JHU), through 1997. The DoD
Inspector Generad generally recommended greater control in the placement and
monitoring of tasks at JHU to ensure that the work falls within clearly defined es-
sential capabilities, to increase opportunities for competition, and to ensure that
proposed costs are reasonable and adequately monitored. The Navy generally con-
curs with the DoD recommendations and is taking corrective action. Tasks are being
defined more specifically, with more detailed sponsor review of proposed costs.
These procedures have been incorporated into the follow-on contract awarded at Ap-
plied Physics Lab (APL) in November, 1994. A competition feasibility study was con-
ducted which reduced the number of essential capabilities at APL, transitioned most
of the non-Navy work off of the Navy contract, and identified some Navy tasks for
competition. The Navy has incorporated a new fee clause which insures better utili-
zation of fee for Navy's benefit at the Laboratory. Navy is continuing to revise its
procedures to improve the contracting process with JHU.

248

Question. How much does the Navy plan to spend at Johns Hopkins in fiscal year
1997?

Answer. The Navy estimates that $256.6 million of Navy funds will be applied to
Navy tasks at JHU in fiscal year 1997. This figure depends on the program needs
of many separate Navy sponsors and is therefore subject to adjustment since each
sponsor individually funds work to be performed.

Question. How did the Navy implement the $10 million reduction made by this
Committee to your 1996 budget in anticipation of savings due to reform of the Johns
Hopkins contract?

Answer. The $10 million reduction was applied against the funding of the Navy's
RDT&E programs since there is no separate funding line for JHU.

Question. Was the reduction actually applied to this contract as we intended?

Answer. Yes, the reduction was applied as the Committee intended.

Question. What are your plans to introduce competition into this area of the budg-
et and what savings do you expect?

Answer. JHU funding does not have its own line item in the budget. Their tasks
are funded by individual program managers who have their own budget line items
and decide how their work should be performed. The Navy has introduced competi-
tion by establishing a committee of Navy technical experts to review tasking in-
tended for JHU. The committee reviewed applicability of the tasking to the univer-
sity's core competencies and the type of work being performed. The first committee
was established in fiscal year 1995 and it identified $32 million of fiscal year 1996
and fiscal year 1997 funds which could potentially be competed. The affected pro-
gram managers have been notified and their work is not being accepted by my con-
tract agency for execution on the JHU contract. Future reviews are planned to be
held at least one year prior to contract renewal.

Question. How have management improvements been reflected in the 1997 budget
in anticipation of savings?

Answer. Management improvements will assure better assignment of tasks to
JHU and keep the Laboratory's work focused on the approved core technical areas
of greatest benefit to the Navy and other DoD agencies. Work that is best accom-
plished through a competitive process will be competed and may result in future
savings. APL generally will not compete with industry on competitive Request for
Proposals, because its strategic relationship with the Navy and access to proprietary
information can result in conflicts of interest. Although competition may save future
funds, it is too early to project these saving in fisctd year 1997.

AcQuisTioN Program Issues

Question. Should extra funds be made available for the Defense Department this
year, the Committee would like to know where some investments can be made
which have a potentially high payback.

What are the top ten unfunded requirements in each R&D and procurement ac-
count?

Navy Answer. The table summarizes the Department of the Navy's unfunded
R&D and acquisition program requirements. The items on the list are not in priority
order.

Program APPN TYSM Notes

New SSN AP (FY99 NSSN) SCN 504.0 Fund AP for FY99 NSSN authorized in FY96

Add 1 LPD-17 ship SCN 825.0 Procure 2nd ship of the class in FY97

DDG-51 (3 ODGs— FY98) SCN 750.0 Establish stable prod rate ships/yr by fund-

ing FY97 AP for 3rd FY98 ship

CVN-77 SCN 1,050.0 AP funding for CVN77: add'l funds reqd to

proc CVN77 ($4050M in FY99 add'l)

F/A-18C (6 a/c) APN 185.0 Resrores last 6 of 24 a/c lost due to afford-

ability

Arsenal Ship ATD RDTE 141.0 Accelerate ATD platform to FY97

Remote Minehunting System (RMS) RDTE 30.0 Accel delivery (FY98 vice FY99) of 2 devel-

opmental Systems

4BN/4BW RDTE 3.3 Accelate contract by 2 months

GEO (accel joint effort) RDTE 55.0 Accelerate CEC integration on AWACS/Pa-

triot/THAAD/Hawk

TBH/ID ROTE 1400 Inc FY97BMD0 R&D for Navy Upper Tier to

$200 million
Submarine Towed Array Processing Software RDTE 8.0 Adapt SURTASS software algorithms for sub-

marine sonar systems

249

Program APP^

Seawolf Shock Test RDTE

Submarine Advanced Technologies:

(Alt 1) RDTE

(Alt 2)

Compact Low Frequency Active (LFA) Sonar ,, RDTE

Fixed Distribution System RDTE

Resotree AV-8B (10 to 12) APN ..

Restore E-2C (2 ro 4) APN ..

EA-6B

Band 9/10 jammer APN ..

TY$M

USQ13 (comm jammer) APN/RDTE

Turb Eng Blad Contain APN

Ctr Wing Sects

EA-6B Total

TLAM;

Procurement WPN

Recert/Reman OMN/WPN

TLAM Total

JSOW (Baseline) WPN

SSN-23 SON

T^5 APN

TAGS

SCN

NSIPS (Navy Standard Integrated Pers Sys- OMN/OPN

tem).
P-3C ASUW Improvement Program APN

H-53 APN

AH-IW APN

Sonobuoys WPN

P-3 Service Life Assessment Program APN

F/A-18 Generation 111 Targeting FUR RDTE

TACAIR DECM APN/RDTE

34.0 Funds shock test

1580

23.0

202.0

68.0
155.0

40.0

75.0

40.0

50.0

2050

320

55.0

Alt 1 plus adv weps, sensors,
hydrodynamics, controls, comms, self-de-
fense, data fusion, sonar processing and
EW ($60M)

Alt 2 plus advanced coatings, propulsor,
ejection systems ($19M) and adds ($60(^)
for adv tech hydro-dynamics, electnc
drive, ship control, & solid state elec-
tronics. $19M for adv sonar sensors and
processors to enhance first 4 NSSN hulls

Smaller, more reliable LFA transmitter; key
element of ASW cueing

Extend existing FDS-1 field to cover cov-
erage gap w/COS/NDI system

Restores 2 a/c lost due to affordability

Critical national mission

FY96 APPN Act provides 60; add buys re-
maining 60 sets

FY96 APPN Act provides 30; increase buys
remaining 90 sets

Reliability mod: Turb Eng Blade Containment
Sys for 120 a/c

Procures 10 Ctr Wing Sections for replace-
ment (safety/reliability mod)

Incr qty (113 to 157; max contract qty) for

Surf BIk NIC; incr total inv FY99 to 2851

(shipfill = 5849)
Recerts all (334 msis, Surf/SUb IICs) due

FY97 (incr of 230); also reman 45 BIk

IIC-IIIC (approx Ind Cap)

87.0

71.0

Incr (+200) qty to 300 in FY97 (max LRIP);

IOC: FY98

105.0

Fully Funds balance of SSN-23

350.0

Restore 12 a/c, allows T-2 early retire;

avoid SLEP

740

Exercises existing contract option for next T-

AGS ship (currently FY99)

50.0

Program & Software Development

61.0 Increases program to 8 kits & above min.
(6) sustaining rate

15.4 Procures 22 FLIR turrets, completes outfit
for deployed forces

19.4 Completes 21 Night Targeting Sys (NTS) up-
grades & 6 cockpit mods;

26.0 Matches FY96 Congressional plus-up; meets
annual trng usage (+19K)

29.0 Accelerate P-3 Service Life Assessment Pro-
gram (SLAP) schedule. Begin engineering
surveys in FY97.

20.0 R&D start in FY97 providing increased tar-
get magnifications, resolution & laser
spot tracking

16 0 $3M R&D & APN-5 supporting ALR-67(V)3
upgrades for F/A-18 Lot 12+. Accelerate
$13M APN-5 proc of ALQ-126B & ALR-
67(V)2 boxes.

250

Program APPN TY$M Notes

SH-60B/R APN/RDTE 14.2 Funds additional SH-60 Block 0 to Block 1

Kits

Global Broadcast System OPN 14,0 Procure 50 GBS terminals to provide inc.

imagery receive reqmts of JTF

Suface Stiip Torpedo Defense OPN 12.5 Options: (1) Buys 5 Carrier systems (com-

plete carrier buy); (2) Buy 6 Amphib sys-
tems (all big deck amphibs funded); or
(3) Buy 3 Amphib, 2 CLP, & 1 Carrier
system.

Supersonic targets WPN/RDTE 11.0 Convert either SM-2 or MA-31 targets

MCM Force Readiness OPN 35.0 Procurement & installation of new engines

for MCM ships.

Marine Corps Answer. The top unfunded requirements by major category are re-
flected below.

[Dollars in millions]

Amount

Aviation Procurement (APN):

1. V-22 302.0

2. AV-8B 56.0

3. KC-130J 196.0

4. F/A-18D 255.0

5. Simulators 60.0

Ground Procurement (PCM):

1. Joint Task Force Headquarters 1.7

2. Training Devices 58.2

3. Javelin 20.0

4. AN/TPQ-36 Firefinder Radar 3.8

5. Mobility Enhancements 28.3

6. Telecommunications Upgrades 18.8

7. Common End User Computing Equipment (CUECE) 9.8

8. Combat Operations Centers (CoC) 6.0

9. Ammunition 98.0

10. Intelligence Upgrades , 17.3

R&D Items:

1. Advanced Amphibious Assault Vehicle (AAAV) 20.0

2. Commandant's Warfighting Laboratory 40.0

3. Non-Lethal Devices 3.0

4. Medium Tactical Vehicle Remanufacture (MTVR) 3.0

5. Wide-area Mine Clearing 2.5

6. Lightweight 155mm Howitzer 4.0

NDSF: 1. MPF (E) 250.0

Question. Identify all production programs for which funds are included in the fis-
cal year 1997 budget request where fiscal constraints have prevented acquisition of
sufficient quantities in either fiscal year 1997 and/or the accompanying FYDP to
meet validated military requirements/inventory objectives.

Navy Answer. These procurements items are Usted in the above FY 1997 Addi-
tional Congressional R&D and Procurement Program list.

Marine Corps Answer. The following procurement programs are included in the
fiscal year 1997 budget request or the accompanying FYDP. Because of fiscal con-
straints, the pace of acquisition has been limited. If additional funds were available,
the following programs could be accelerated in fiscal year 1997.

[In millions of dollars]

APPN Item Amount

PMC Training Devices 58.2

Javelin 20.0

AN/TPQ-36 Firefinder Radar 3.8

Mobility Enhancements 28.3

Telecommunications Upgrades 18.8

Common End User Computing Equipment (CUECE) 9.8

Ammunition 98.0

Intelligence Systems Upgrades 17.3

251

[In millions of dollars]

APPN

Item

Amount

APN

V-22

302.0

AV-8B

56.0

Simulators

60 0

Question. What initiatives are currently approved in an outyear POM which could
be done either more cheaply and/or be fielded earlier by initiating them in fiscal
year 1997?

Navy Answer. The Department of the Navy is currently working on the build up
of the internal program assessment which has not yet been approved. Additional fis-
cal year 1997 funds may be used for the following list of programs. The items on
the list are not in order of priority.

Program

P-3 Service Life Assessment

F/A-18 Generation III Targeting FUR
TACAIR DECM

SH-60B/R

Global Broadcast System

Surface Ship Torpedo Defense

Supersonic Targets

MCM Force Readiness

JAMCIS

AMRAAM Procurement

TY$M

20.0

13.0

14.2

14.0

12.5

11.0
35.0

12.0

26.0

Accelerate P-3 Service Life Assessment Program schedule. Begin
engineering sun/eys in FY97 vice currently planned FY99.

R&D start in FY97 providing increased target magnification, reso-
lution & laser spot tracking.

$3M R&D supporting ALR-67(V)3 upgrades for F/A-18C/D Lot
12+ and F/A-18E/F. $10 million APN to accelerate procure-
ment of APR-39A(V)2.

Fund SH-60B Block 0 to Block I kits, and SH-60R R&D efforts.
$10 million for an increase of 8 SH-60B Block 0 to Block I
mod kits in APN-5; $4.2 million in R&D for SH-60R critical
design review.

Procure 50 GBS terminals to provide increased imagery receive
requirements of Joint Task Force operations.

Options: (1) Buy 5 carrier systems (complete carrier buy); (2) Buy
6 amphib systems (makes all big deck amphibs funded); or
(3) Buy 3 amphib, 2 CLF and 1 carrier system.

Accelerate conversion of SM-2 or MA-31 targets.

Accelerate pracurement & installation of new engines for MCM
ships.

Accelerate LINK-16 integration in JMCIS ($1.5 million), accelerate
OPN JMCIS/NTCS-A installation for FY97 deploying battlegroups
($6 million) & $4.5 million O&MN support for CTAPS.

Raise AMRAAM procurement buy to 100 missiles per year by ac-
celerating procurement of missiles currently funded in out-
years.

Total

189.7

Marine Corps Answer.

[In millions of dollars)

Fiscal year —

Svgs.
1997-
2001

1997

1998 1999

2000

2001

PMC

MILES 2000:

Current 0

Proposed 49.0

Javelin:

Current 28.2

Proposed 48.2

Ammunition:;

Current 68.9

Proposed 166.9

R&D
AAAV:

Current 40.1

Proposed '. 60.1

106

13.7
0

14.2
0

18.3
0

7.8

77 3

119.2

114.1

100.7

77.3

119.2

114.1

74.1

6.6

110.0

272.6
272.6

351.3
351.3

254.5
254.5

110.0

60.2

140.1
104.1

93.0
93.0

110.4
110.2

60.2

*20.0

252

[In millions of dollars]

Fiscal year—

Svgs.
1997-
2001

1997

1998

1999

2000

2001

Wide Area Mine Clearing:

Current 0.6 3.9 2.1 4.7 4.7

Proposed 3.1 3.9 2.1 4.7 4.7 0

AVN
AV-8B:

Current 304.9 324.2 470.0 446.4 130.1

Proposed 360.9 324.1 4693 442.1 34.8 44.4

Accelerates program 4 months. Savings begin to accrue in FY 2003.

REMANUFACTURE PROGRAM

The program is considered a low risk retrofit of a previous forward fit ECP, with
no change to the aircraft; performance basehne. Once the remanufacture effort is
complete, the inventory will have 100 Radar/Night Attack aircraft. With Multi-year
procurement a 6-7 percent savings in the program could be realized.

Question. Provide a Hst of R&D or production programs or projects for which fund-
ing is included in the fiscal year 1997 budget that are stretched out beyond tech-
nically attainable schedules primarily due to lack of funding in either fiscal year
1997 and/or the outyears.

Answer. The R&D and procurement programs included in the President's fiscal
year 1997 budget request are adequately funded to meet current schedule goals.

Question. Indicate all programs for which procurement funding is included in your
fiscal year 1997 budget that would be good candidates for multi-year procurement
funding, assuming additional funding were to be available in fiscal year 1997 and
the outyears. Provide for these programs a comparison of the current acquisition
funding stream compared to a potential multiyear profile (assuming a fiscal year
1997 start), along with the additional up-fi-ont investment that would be required
and the potential savings that would be Ukely.

Navy Answer. Procurement profiles comparing multi-year vs. traditional ap-
proaches for the AV-8B, T-45 and Standard Missile follow. These multiyear ap-
proaches require additional up-front funding as indicated. However, over the pro-
curement period identified for each program the resultant savings are as follows:
$48.2 miUion for T-45;
$36.6 miUion for AV-8B; and
$29. 1 million for Standard Missile.

253

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256

Marine Corps Answer. The AV-8B Remanufacture program is the only candidate
for mill ti -year procurement dollars. The following profile reflects a four-year multi-
year procurement beginning in fiscal year 1998 and includes advance procurement
costs in fiscal year 1997.

AV-8B REMANUFACTURE PROGRAM

[Dollars in millions]

Fiscal years —

1997 1998 1999 2000 2001

A/C Qty 10 12 16 16 02 56

Current $304.9 $324.2 $470.0 $446.4 $130,1 1,675.6

MYP cost 341.5 347.6 475 9 388 7 85 2 1,638.9

MYP savings -36.6 -23.4 -5.9 57.7 44.9 36.7

Another option to consider is a three-year multi-year procurement. This option
would require additional funding in fiscal year 1997 for acceleration of two aircraft
from fiscal year 2001 to fiscal year 1997 to support the multi-year procurement.

Fiscal year —

Current Total

1997 1998 1999 2000 2001

A/C Qty 10 12 16 16 02 56

Current $304.9 $324.2 $470.0 $446.4 $130 1 $1,675.6

Proposed A/C Qty 12 12 16 16 00 56

MYP cost 376.0 326.2 434.9 427.3 33.0 1,597.4

MYP savings -71.1 -2.0 35.1 19.1 97.1 78.2

An option to consider is one in which the Navy does not budget for termination
liability and the prime contractor agrees to finance economic order quantity require-
ments above the AP level currently contained in the President's Budget. McDonnell
Aircraft has indicated a willingness to do so. Savings would be no less than the
above option and increased funding would not be required in the early years of the
MYP. This option would require Congressional approval to enter into a contract
with an unfijnded liability which may result if the program is prematurely canceled.
Given the existence of statutory limitations on the use of such contracting terms,
PEO(A) has asked ASN(RD&A) whether this option is desirable to pursue.

Question. Identify any procurement programs in the fiscal year 1997 budget
where provision of additional procurement fiinds in fiscal year 1997 would have a
very favorable impact on production unit prices.

Navy Answer. The following programs where provision of additional procurement
fiinds in FY97 would have a favorable impact on production unit prices:

CVN-77

DDG-51

F/A-18E&F

E-2C

AV-8B

JSOW

LPD-17

V-22

T-45

AMRAAM

Marine Corps Answer. In the Procurement, Marine Corps appropriation, there is
one production program where the provision of additional funds would have a very
favorable impact on budgeted unit cost — M870 Trailers ($5.5 million). An additional
$5.5 million for the M870 trailers would reduce unit prices from $57.4 thousand to
$54.6 thousand for the M870 trailer. These savings would enable the Mairine Corps
to purchase more of the AAO.

In my aviation programs, two additional AV-8B aircraft ($56 million) in fiscal
year 1997 vice fiscal year 2001 creates a net savings of $95.3 million due to lower
cost attributed to higher, more efficient production rates and time value of money.
The production unit cost for the aircraft is reduced $1.32 million per aircraft over
the program.

257

Two additional MV-22 aircraft ($302 million) in fiscal year 1997 results in a $32
million cost reduction in the outyears. Production unit cost is reduced $60 thousand
per aircraft over the program.

Question. Identify each production program in the fiscal year 1997 budget whose
main rationale is to sustain a minimal industrial base.

Navy Answer. The Navy has no production programs in the fiscal year 1997 budg-
et whose main rationale is to sustain a minimal industrial base.

Marine Corps Answer. There are no programs whose main rationale is to sustain
a minimal industrial base in the procurement fiscal year 1997 budget request.

Question. Please indicate in total and for the top 20 largest weapons systems both
the peace-time operating requirement and war reserve requirement (separately) for
spare parts funded either as initial spares in procurement accounts or as
consumable spares in Defense Business Operating Fund (DBOF), and the percent-
age of requirement met through the fiscal year 1997 budgeted level of funding.
Project how this would change by the end of the FYDP.

Navy Answer. Peacetime Operating Stocks and War Reserve material for oper-
ating forces are managed in the wholesale supply system and carried in the Defense
Business Operating Fund (DBOF). The spares requirement, expressed by sales, as-
sociated with the Navy's top 20 aviation, ship and submarine weapon systems are
listed in the following table for 1995.

[In millions of dollars]
Weapon System 1995

F/A 18 Aircraft 401.3

F-404 Engine (F/A 18) 244.4

F-14 Aircraft 177.5

P-3 Aircraft 147.9

E-2 Aircraft 94.9

S-3 Aircraft 86.5

H46 Helicopter 80.5

H53 Helicopter 79.4

T56 Engine (P-3/E-2) 70.2

SH-60B Helicopter 68.8

A-6 Aircraft 64.5

T58 Engine (H-46) 57.4

Aviation Support Equipment 55.0

EA6B Aircraft 51.2

TF34 Engine (S-3) 48.4

MK 15 Close-In-Weapons-Systems (CIWS) 46.7

USC-38 EHF Satellite Communications 45.4

F402 Engine (AV-8) 45.3

Nuclear Support 36.0

J52 Engine (A-6, EA-6, A-4) 35.6

Supply System Requirements (SSIR data — 30 Sep 95)

War Reserve 132.8

Total Wholesale Inventory Requirement 11,278.5

The Navy combines peacetime operating support and war reserve requirements
for these and all installed equipments/ components into onboard spare parts allow-
ances for ships and submarines termed Consolidated Shipboard Allowance Lists
(COSAL), and Aviation Consolidated Allowance Lists (AVCAL) to support aircraft
embarked on air capable ships.

The allowances discussed above provide demand based parts support with insur-
ance items to support a set endurance period, nominally 90 days, without resupply.
In support of these allowances, the wholesale system stocks material to support the
consumption and replenishment of that material. The Supply System Requirements
represent the total wholesale supply system requirement in support of the Navy and
includes $132.8 million for war reserve material.

Financed as part of the Defense Business Operating Funds (DBOF) account, the
wholesale supply system provides both outfitting and replenishment spares support
to Navy customers. This investment account fully funds program requirements and
is balanced to Navy's overall requirement. Maintenance of weapons system and
stock replenishment of parts used by operating forces are supported in the OM&N
appropriation through the Flying Hour/Steaming Hour Programs which are simi-
larly balanced to the overall requirement.

Initial spares to support new weapon systems or upgrades to existing systems
being introduced into the operating forces are budgeted and funded as initial spares

258

in Navy's three investment accounts. Through fiscal year 1995, these accounts were
fiilly fiinded. Due to financial limitations, funding in the OPNAVPN accounts have
been constrained to 90% of the requirement and to 85 percent for the Aircraft; Pro-
curement, Navy account.

Marine Corps Answer. The following represents the three weapons systems with
spares and percentage requirements:

[Dollars in millions]

Fiscal years —

P-l Weapon System (over PfDP)

1997

iSni) '558-2°°'

1998-2001
(percent)

40 AN/TPQ-36 Firefinder

0.0

$5.8

0 0.7

0 0.2

100 $5.8

100

22 Javelin

100

23 Pedestal Mounted Stinger

100

Question. Please indicate any potential Foreign Military Sales (FMS) sales that
are being discussed that could influence production unit prices once consummated,
not including those whose impact is already factored into the production unit prices
portrayed to Congress in the fiscal year 1997 budget.

Navy Answer. The following table summarizes potential Navy FMS sales (over
$10 million) ciirrently under negotiation which could lower future U.S. Navy unit
production costs:

Weapon System

Offer provided, not yet ac-
cepted or just signed

Harpoon 2 Sub Japan

29 Surf S. Korea
17 Sub S. Korea
2 Sub Netherlands

AEGIS Weapon System 4 (Spain)

Upgrades (Japan)

F/A-18 8 C/D (Thailand)

Marine Corps Answer. Potential FMS sales are being discussed for the LtWtl55,
JSF ASTOVL, JaveHn, 4BW and the CH53E.

Question. Please indicate what policy your service uses for major R&D and pro-
duction programs, such as "budget to contact target cost" or "budget to ceiling con-
tract cost" or "budget to most likely cost", and identify which of your major pro-
grams in the fiscal year 1997 budget deviate from this policy and the attendant ra-
tionale.

Navy Answer. The Department of the Navy budgeting policy for major R&D and
production programs is to budget to the most likely cost. This budget quality esti-
mate is developed through detailed review and analysis of costs of the engineering
characteristics and requirements associated with the item under development or
production. There are no programs which deviate from this policy.

Marine Corps Answer. The budget policy used by the Marine Corps, including
both R&D and production programs, is to budget to the lowest possible cost. Cur-
rently, we have no items in the fiscal year 1997 budget that have deviated from this
budget policy.

Research and Development, and Production Budgeting Practices

Navy Answer. The Department of the Navy budgeting policy for major R&D and
production programs relative to unknown allowances and/or allowances for engi-
neering change orders is directly related to the maturity of the program in the ac-
quisition process. Maturing productions are afforded a small allowance for emergent
engineering change orders based upon the specific historical acquisition and engi-
neering analysis experience of that program. New start endeavors for which this ex-
perience is absent but for which a reasonable estimate can be determined based
upon the acquisition history of similar programs are afforded a somewhat larger al-
lowance incorporating lessons learned. The fiscal year 1997 budget was prepared in
accordance with this policy.

259

Marine Corps Answer. We do not budget for unknown or unexpected allowances
in R&D and production programs. However, Economic Change Orders (ECOs) are
included in the budget submit if there is a clear indication that an ECO will be re-
quired during the execution of the program.

Navy Answer. For programs under the jurisdiction of the Naval Air Systems Com-
mand the following information is provided:

1. F414 engine contract N00019-92-C-0149. The amount of award fee to be fund-
ed with fiscal year 1997 dollars is $14,490,619. Percent of award fee to be funded
with fiscal year 1997 dollars is 100 percent. Historical performance of contractor in
terms of percent of award fee earned in prior periods under the contract is 91 per-
cent.

2. F/A-18E/F Engineering and Manufacturing Development Contract, N00019-
92-C-0059. The amount of award fee to be funded with fiscal year 1997 dollars is
$28,710,747. Percent of award fee to be funded with fiscal year 1997 dollars is 9.7
percent. The historical performance of contractor in terms of percent of award fee
earned in prior periods under the contract is 91.7 percent.

3. V-22 Engineering and Manufactiiring Development Contract, N00019-93-C-
0006. The amount of award fee to be fiinded with fiscal year 1997 dollars is
$28,128,055. Percent of award fee to be funded with fiscal year 1997 dollars is 18.8
percent. The historical performance of contractor in terms of percent of award fee
earned in prior periods under the contract is 83.54 percent.

Marine Corps Answer. We have no programs in the fiscal year 1997 budget for
which we plan to award contract award fees in excess of $10.0 million.

Question. Please identify all R&D and production programs/projects for which
Congress appropriated funds in fiscal year 1996 which since the Appropriations Act
was enacted have been either terminated or significantly downscoped. For each, in-
dicate the status of the fiscal year 1996 and any earlier active fiscal year funds
where funds have been diverted to another purpose.

Navy Answer. There has not been any significant downscoping of budged pro-
grams or new program terminations since submission of the fiscal year 1996 Presi-
dent's Budget in February 1995. Program adjustments reflected in our current esti-
mates are due to rebalancing of resources consistent with rephasing of requirements
and revision of production and delivery schedules. This does not include the impact
of any fiscal year 1996 Congressional adjustments, a reprogramming or recession
proposal.

Marine Corps Answer. There are no Marine Corps programs, including both R&D
and production programs, that are appropriated fiscal year 1996 funds that have
been terminated or significantly downscoped since the Appropriations Act was en-
acted.

Ammunition

Question. Last year, the Congress provided an additional $100 million to the Ma-
rine Corps for the procurement of ammunition to alleviate critical inventory short-
falls. This year the Marine Corps is requesting $69 million for ammunition, $120
million less than was appropriated in fiscal year 1996.

The Defense Planning Guidance in 1996 changes the methodology for determining
ammunition requirements. It is our understanding that this resulted in significant
inventory shortfalls as compared to the requirement. Does the fiscal year 1997
President's Budget provide adequate fiands to satisfy Marine Corps ammunition re-
quirements? If not, what are the shortfalls?

Answer. The Marine Corps recently conducted a study of ammunition require-
ments for war reserve and training. The study was not completed prior to the fiscal
year 1997 budget submission, but funding was requested for all critical training am-
munition requirements so that current readiness would not be impaired.

Initial analysis of the study indicates the Marine Corps may be able to safely
lower its war reserve ammunition requirements in most categories except for tank
rounds and demolitions. ArtiUery requirements were significantly lower than pre-
viously determined. Some factors which caused requirements to drop included re-
duced threat forces, as calculated by Marine Corps intelligence estimates; different
battle ending conditions and changed weapon-to-targets allocations based on anal-

260

ysis by Marine Corps subject matter experts; and studies which indicated increased
naval gunfire and aviation contributions.

We are currently in the process of revising our requirements from the fiscal year
1996 baseline. These revisions are expected to significantly affect Marine Corps am-
munition requirement, to include small arms. The new training requirements will
incorporate the use of simulators to reduce the requirement for live fire. Simulator
offsets will be the greatest for small arms since our Individual Simulated Marks-
manship Trainers are already being fielded. While the impact of our training re-
quirement revisions will not be quantified for several weeks yet, the most likely war
reserve shortfalls will be in the rounds shown below.

The following items comprise the Marine Corps shortfalls:

[In millions of dollars]

Item Amount
iw ar Reserve*

1. 5" Rockett Motor (J143) 7.0

2. Charge, Assembly Demo (M757) 53.0

3. Charge, Demo Linear HE (M913) 12.0

4. Charge, Demo Linear HE LVT (ML25) 26.0

War Reserve Total 98.0

Future budget submissions will reflect these changed requirements.

Question. Based on Marine Corps' requirements, there is a $43 million shortfall
in training ammunition. What is the impact of the shortfall on training; What is
the impact on war reserve stocks; and for the record please provide Marine Corps
training ammunition shortfalls?

Answer. We are currently in the process of revising our training requirements
from the fiscal 1996 baseline. These revisions are expected to significantly affect
Marine Corps ammunition requirement to include small arms. The new training re-
qxiirements will incorporate the use of simulators to reduce the requirement for live
fire. Simulator offsets will be the greatest for small arms since our Individual Simu-
lated Marksmanship Trainers are already being fielded. The impact will be reflected
in future budget submissions.

Question. It is our understanding that some of the fiscal year 1996 funds appro-
priated to correct ammunition shortfalls have not been released by the OSD Comp-
troller. Is there a military requirement for the additional funds? What is the impact
if the funds are not released to the Marine Corps for execution?

Answer. Yes, there is a military requirement for the funding. The Office of the
Secretary of Defense is currently processing the release of these funds.

Question. As the Single Manager for Conventional Ammunition (SMCA), the Army
has the responsibility to store and maintain ammunition for all of the services. Last
year, the Congress appropriated $300 million for this effort. This year the Army is
requesting $162 million. Are you satisfied with the current service you receive from
the Army for conventional munitions storage and maintenance? If not, why? Does
it concern you that the Army is requesting less money this year than last year's ap-
propriated amount. If yes, why?

Answer. Yes, we are satisfied with the current service received from the Army for
conventional munitions storage and maintenance.

We are deeply concerned with the reduction in funding for supply Depot Oper-
ations (SDO) at the Single Manager. The Army budget request for fiscal year 1997
for ammunition support was a bare minimum that would provide only the basic sup-
port services required by the service's ammunition community. The constrained allo-
cation will have a serious impact on the mission readiness requirements of the serv-
ices. The SMCA has already notified the Marine Corps that a 58% reduction in fis-
cal year 1997 forecasted workload (issues, receipts, retail demilitarization receipts
and all production receipts) will have to be implemented.

The SMCA currently plans on providing only bare minimum support in the area
of surveillance and inventory management/reconciliation. Reductions in these crit-
ical areas will only compound problems and result in the degradation of the quality
and accountability of the Services munitions stockpile. Ultimately this will result in
large increases in out-year funding requirements.

Fiscal Year 1996 Funds

Question. The Congress appropriated an additional $200 million to the Marine
Corps for ground system modernization, command, control and communications, and
ammunition shortfalls. Have the additional funds appropriated for the Marine Corps

261

modernization shortfalls in fiscal year 1996 been released for execution? If not, what
is the status of the funds?

Answer. Of the additional funds appropriated to the Marine Corps for moderniza-
tion shortfalls in fiscal year 1996, the following have been released for execution in
the Procurement, Marine Corps appropriations:

Procurement, Marine Corps:

($ in millions)

1. Commanders Tactical Terminal 12.5

2. Night Vision Equipment 5.0

3. Mod Kits Tracked Vehicles 12.3

4. Manpack Radios and Equipment 3.0

5. Improved Direct Air Support Central 1.0

6. Trailers 5.5

7. Training Devices 39.9

Total 79.2

Question. Please provide for the record a listing of all the fiscal year 1996 appro-
priated funds currently on OSD withhold.

Answer. The following is a list of the Procurement, Marine Corps; Procurement
of Ammunition, Navy and Marine Corps; Research, Development, Test & Evalua-
tion; National Guard and Reserve Equipment; and Aircraft Procurement, Navy
funds that are currently on OSD withhold:

PMC:

($ in millions)

1. Intelligence Support Equipment (JSTARS) 16.5

Total 16.5

PANMC:

1. 7.62mm 10.0

2. .50 Caliber 36.4

3. 81mm HE 6.7

4. 155mm Red Bag 16.0

5. Fuze, ET XM762 10.0

6. Grenades, All Types 0.7

7. Items Less Than $2 million 2.5

Total 82.3

R&D:

1. LW155 4.2

2. AAAV 6.0

3. MTVR 3^

Total 13.7

NGRE:

1. NGRE Misc. Equipment 46.2

APN:

1. AH-IW Aircraft 64.6

The following are the impacts if not funded:

PMC: 1. Intelligence Support Equipment (JSTARS). The current production cycle
is two years for a Ground Support Module (GSM) configuration. The procurement
of two GSM's is necessary to fulfill our JSTARS connectivity requirements. If fund-
ing is delayed, the JSTARS GSM IOC may be delayed beyond fiscal year 1998.

PANMC: 1. Ammunition (all rounds). — OSD is currently in the process of releas-
ing the funds.

R&D: 1. Lightweight 155. — Delayed funding will directly reduce the reliability of
the contractor competition shoot-off" data which is the primary source selection
mechanism for EMD. This has the potential to result in increased life cycle costs
and lengthen EMD. Delayed funding will also adversely impact leveraging Army
science and technology based digitization taking place this year. These digitization
efforts are specifically targeted to assist in preplanned product improvements and
support the Sea Dragon Special Marine Air Ground Task Force participation with
the Army 21st Century Land Warrior tests.

2. AAAV. — If the fiscal year 1996 Congressional increase of $6.0 million is not re-
leased, unbudgeted Congressionally directed efforts cannot be included in current
MTU engine and TRACAVSMR contract negotiations. Award of the Demonstration/
Validation (DemA^al) Phase contract is scheduled for May/ June 1996. Modeling and

262

Simulation tools are required to be available at the time to successfully conduct Cost
as an Independent Variable trade-off studies. Delay in completing the modeling and
simulation efforts will adversely affect the trade on studies in DemA^al and prevent
us from achieving budgeted cost savings as the products of these simulation based
trade studies. In addition, delay in awarding the planned engine development efforts
will increase the risk associated with the engine development program, and may ad-
versely affect the cost of the DemA'^al phase.

3. MTVR. — If funding is delayed, the MTVR prototypes will not be deUvered in
time to begin the scheduled Developmental Test and Evaluation (DT&E) phase of
the MTVR program. This would cause a delay in the approved MTVR program
schedule approved by OSD.

Aircraft Procurement, Navy: 1. AH-IW. — OSD is in the process of releasing funds
for three of the six AH-lWs Congress added in fiscal year 1996 to support the active
and reserve force structure requirements. The remaining three aircraft have been
identified as a source of financing to cover Bosnia costs.

Question. The Congress appropriated additional funds over the President's fiscal
year 1996 budget to satisfy critical shortfall and procure items at more economic
rates. It is our understanding that the DoD Comptroller has decremented fiscal year
1997 programs that were increased in fiscal year 1996. Have any fiscal year pro-
grams been decremented in response to fiscal year 1996 Congressional add-on? If
so, please provide a list of those projects; the impact of the fiscal year 1997 decrease;
and the status of the fiscal year 1996 appropriated funds.

Answer. Yes. The following procurement programs were decremented in fiscal
year 1997 in response to a fiscal year 1996 Congressional add-on:

($ in millions)

1. Mod Kits Tracked Vehicles (11.3)

2. Manpack Radios and Equipment (0.8)

3. Trailers (5.5)

4. Precision Gunnery Training System (5.9)

5. Indoor Simulated Marksmanship Trainer (18.0)

6. Night Vision Equipment (3.1)

Total (44.6)

Impact of the fiscal year 1997 decrease:

1. Mod Kits (Tracked Vehicles). — The fiscal year 1996 Congressional plus up was
to complete upgrades to the tanks that were transferred from the Army and to com-
plete the project on the 64 tanks transferred from the MPS plus-up. These funds
have been obligated on contract to support the upgrade program. The program im-
pacted as a result of the fiscal year 1997 reduction is the Self Cleaning Air Filter
(SCAF). The reduction prevents us from buying out the program.

The Self Cleaning Air Filter (SCAF) improves the reliability and maintainability
of the MlAl Tank by pre-cleaning the air before it enters the turbine engine. Inges-
tion of dust into the engine is the main cause of turbine failure and has resulted
in over $4.5 million in engine repair costs in fiscal year 1995 alone. The upgrading
of all Marine MlAl Tanks with the SCAF is critical to reducing engine repair costs.
Since no new engines are being procured by the Marine Corps or any other service,
the maintainability of the MlAl turbine engine is a primary concern. The collateral
benefit is an increase in mean time between failure of the MlAl Tank. Increased
time between failures directly increases operational readiness as well as decreases
costs.

The reduction of the fiscal year 1997 funding will delay completion of this pro-
gram by at least one year and could delay it as many as three years based on projec-
tions for fiscal years 1998 and 1999 funding levels. Additionally, reduced U.S. and
Foreign Military Sales is expected to increase the costs $10 thousand per unit ($1.5
million Marine total). By far the greatest detriment to the Marine Corps is the in-
creased operational costs to Marine Forces. Without the SCAF, millions in avoidable
repair costs will be incurred.

2. Manpack Radios and Equipment. — The Fiscal Year 1996 Appropriations Act
provided an additional $3.0 million for the purpose of accelerating the procurement
of Manpack Radios. With this plus up, the Marine Corps will buy out the Acquisi-
tion Objective of Manpack Radio terminals. These funds are currently on adminis-
trative withhold, however, the Marine Corps has requested release of those funds.
When these funds are released, they will be obligated in accordance with Congres-
sional language. There are no budgetary adjustments in fiscal year 1997 and
throughout the FYDP which are necessary to utilize this plus up.

3. Trailers. — The Fiscal Year 1996 Appropriations Act provided an additional $5.5
million for the purpose of accelerating the procurement of trailers. With the plus

263

up, the Marine Corps will buy out the Acquisition Objective (AO) of the MlOl Cargo
Trailer. These funds are currently on administrative withhold, however, the Marine
Corps has requested release of those funds. The budget request in fiscal year 1997
is underfinanced. Since there were not enough funds in the MlOl line to sustain
the decrement, the M870 program was assessed the majority of the hit.

The M870 is the medium heavy equipment hauler for the USMC. This semitrailer
is the ONLY line-haul transporter available for the movement of tactical assets uti-
lized in tactical training and wartime operations. The M870 fleet transports equip-
ment such as the Ampnibious Assault Vehicle, Light Armored Vehicle, D-7 Bull-
dozer, Material Handling Equipment (cranes, forklifts) and has also been used to
recover downed aircraft.

Failure to fund the procurement of 84 trailers during fiscal year 1997 will degrade
the ability of units to transport equipment essential to their training and combat
readiness. Procurement of only 20 M870's (59% AO) vice 84 (70% AO) in fiscal year
1997 effectively reduces the ability of the Marine Expeditionary Forces to simulta-
neously transport 2,560 tons of equipment. This is equivalent but not limited to, an
Engineer Support Battalion (bulldozers) of the Force Service Support Group, Mate-
rial Handling Equipment of a Landing Support Battalion (forklifts), aviation support
assets of a Marine Wing Support Squadron or three companies of Light Armored
Assault Vehicles or Amphibious Assault Vehicles of the Marine Division.

The above listed equipment represents a multimillion dollar investment. Failure
to swiftly deploy these combat essential assets with the M870 results in signifi-
cantly degraded combat readiness and an overall poor return on investm nt.

4. PGTS.— The Fiscal Year 1996 Appropriations Act provided an additional $5.9
million for the purpose of accelerating the procurement of PGTS. The plus up for
PGTS will allow us to buy 100% of the Acquisition Objective. These funds are cur-
rently on administrative withhold, however, the Marine Corps has requested release
of those funds. No additional funding is necessary to follow Congress' direction con-
cerning the PGTS program. However, the fiscal year 1997 reduction impacted the
Combat Vehicle Appended Trainer (CVAT) program ($7,438 thousand) that was
planned for fiscal year 1997. As a result of the reduction, the program is being de-
layed.

CVAT provides a deployable, high fidelity, full crew, precision gunnery, networked
tactical trainer for the crew of the Marine Corps family of armored vehicles. The
CVAT uses simulation to train combat vehicle crews in the employment of their ve-
hicle to include driver skills, loader skills, gunnery skills, vehicle commander skills,
and unit tactics. This simulation will complement and enhance training by pro-
viding more realistic performance conditions (moving targets) than what can be at-
tained with currently available resources. This type of training will optimize live fire
training. The loss of funds has delayed this program at least one year. Currently,
there is no full crew training capability, therefore, each year delay has a significant
impact on training for the MlAl, LAV and AAV crews.

5. ISMT. — The Congressional plus up of $34.0 million for training devices acceler-
ated the procurement of 100% of the acquisition objective for the Indoor Simulated
Marksmanship Trainer (ISMT). The ISMT provides basic and sustained marksman-
ship training consisting of qualification range, shoot^no shoot and combat scenarios.
These funds are currently on administrative withhold, however, the we have re-
quested release of those funds. The budget request in fiscal year 1997 is under-
financed. Because there were no fiinds in the ISMT line in fiscal year 1997, the
MILES 2000 program was assessed the majority of the hit. As a result, this program
has been delayed until fiscal year 1998.

The MILES 2000 provides a family of eye safe lasers which simulates the direct
fire characteristics of infantry assault, armor, anti-armor mechanized weapons or
weapons systems and provides the gunner with hit or miss determination. The Ma-
rine Corps originally planned to buy 2 battalion sets (20% of the AO) in fiscal year
1997. Since there are no fiinds available for MILES 2000 in fiscal year 1997, the
entire program will be delayed one year. This delay puts the Marine Corps out of
cycle with the U.S. Army joint contract and causes the U.S. Army to lose economies
of scale estimated to be $2.4 million by the end of Lot II (fiscal year 97 only) produc-
tion. Additionally, this delay would increase the fiscal year 1998 costs to Marine
Corps by $0.6 mUlion.

The MILES 2000 wiU increase combat readiness by 20-25% as a result of pro-
viding increased opportunities to conduct more collective and combined arms train-
ing. The MILES 2000 systems allow for more realistic Force on Force training. This
realism greatly improves the readiness of Marine Units as well as the individual
Marine.

6. Night Vision Equipment. — There was no impact to this program in fiscal year
1997 as a result of the fiscal year 1996 Congressional plus up. The Congressional

264

plus up accelerated the buy out of the 3X magnifier and the fiscal year 1997 budg-
eted fiinds were excess.

Status of the fiscal year 1996 appropriated funds:

1. Mod Kits (Tracked Vehicles). — These fiinds were released for OSD withhold ef-
fective 7 March 1996. 100% of these fiinds have been obligated.

2. Manpack Radios and Equipment. — Fiscal year 1996 Congressional plus up
funds have just been released from OSD withhold. These funds will be obligated
shortly.

3. Trailers. — Fiscal year 1996 Congressional plus up funds have just been released
from OSD withhold. These funds will be obligated shortly.

4. PGTS. — Fiscal year 1996 Congressional plus up funds have just been released
from OSD withhold. These funds will be obligated shortly.

5. ISMT. — Fiscal year 1996 Congressional plus up funds have just been released
from OSD withhold. These funds will be obligated shortly.

6. Night Vision Equipment. — ^These fiinds were released for OSD withhold effec-
tive 29 Feb 1996. 92% of these funds have been obligated. Remaining funds will be
obligated in the near future.

Shallow Water Mine Countermeasures

Question. The Shallow Water Mine Countermeasures program is one of the Ma-
rine Corps initiatives designed to improve critical deficiencies in mine counter-
measures. The development of this technology will allow the Marine Corps to pro-
cure systems which detect, clear and neutralize mines.

Congress appropriated $5.8 million for the Mine Neutralization Program in fiscal
year 1996. This year the Marine Corps is requesting $1 million: What is the current
status of the Mine Neutralization Program? What is the required level of funding
to complete the development of the Mine Neutralization Program? What will the fis-
cal yeair 1997 budget request provide?

Answer. Two programs currently exist in the Mine Countermeasures Sub-project
of Program Element (PE) 0603640M budget line, the Off" Route Smart Mine Clear-
ance (ORSMC) program and the Joint Amphibious Mine Countermeasures (JAMC)
program.

The combined fiscal year 1996 budget for both of these programs is $5.8 million.
The requested budget for PE 0603640M in fiscal year 1997 is $1.0 million. This de-
crease in funding is a result of the natural progression of Science and Technology
programs transitioning to an acquisition program.

The ORSMC program will transition to program element 06036 12M under the
same title name at the end of fiscal year 1996 and the JAMC program will transi-
tion to the same PE at the end of fiscal year 1997. The fiscal year 1997 funding
will finalize the Advanced Technology Demonstration phase of the JAMC program
and position the program for a Milestone I decision in the 1st quarter of fiscal year
1998.

Question. It is our understanding that fiinding for the Marine Neutralization Pro-
gram was reduced during the DoD budget build. Was the funding decreased because
of technical problems or fiscal constraints? Are there any other DoD programs cur-
rently under development that will satisfy the Marine Corps mine neutralization re-
quirement? If so, what are they and when will they be fielded?

Answer. The budget reduction in program element 63612, Marine Corps Mine
Counter Measures, was due to fiscal constraints. Limits on TOA for RDT&E,N have
caused a shortfall in the Marine MCM budget of $2.5 million in fiscal year 1997.
The fiinding shortfall is in the Off-Route Smart Mine clearance line, and represents
our portion of a joint effort with the U.S. Army. This program addresses the emerg-
ing threat of off" route side/top attack mines. It is the only program in either service
that is addressing this requirement.

Marine Helicopter Upgrade Program

Question. In August 1995, the Secretary of the Navy approved a program to up-
grade both Marine Corps' attack and utility helicopters. The upgrade program will
increase the range, speed, payload, and lethality of the helicopter fleet, while at the
same time, decreasing the operations and support costs. The helicopter upgrade pro-
gram is currently in researcn and development and should begin production in fiscal
year 2003.

Answer. The Marine H-1 Upgrade program is currently preparing for a Milestone
II in September of 1996 and is scheduled to begin the Engineering and Manufac-
turing Development phase with contract award in November 1996. Production for
the UH-IN is projected to begin in fiscal year 2002 and the AH-IW in fiscal year
2003.

265

Question. How critical is the upgrade program?

Answer. The program is a high priority for Marine Aviation. This upgrade will
correct existing deficiencies of both aircraft, significantly improve operational capa-
bilities, and improve supportability. The Department of the Navy has determined
this approach to be the most cost effective alternative to our attack and utility heli-
copter requirements until the introduction of a new technology Joint Replacement
Aircraft around 2020.

Question. What is the average age of the attack and utility helicopters in the
fleet?

Answer. The UH-IN was introduced into the Marine Corps in 1971. The average
age of the Marine Corps UH-lNs is 22 years and 5470 flight hours. The AH-IW
was introduced into the Marine Corps in 1986. The average age of the Marine
Corps' AH-lWs is 7 years and 2570 flight hours.

Question. What is the life expectancy of the heUcopters in the fleet?

Answer. Both aircrafl; have a projected service life of 10,000 flight hours. Based
on that life and current usage rates, the Marine Corps' UH-lNs will start being re-
tired in 2007 and the AH-lWs would start being retired in 2027. However, using
projected flight hours and the 10,000 hour service Ufe assumption would result in
the UH-lN fleet operating for 36 years without improvements to the performance
or maintainability of the airframe. This same projection would result in the AH-
IW operating for over 41 years without improvements to performance or maintain-
ability of the airframe. As a result, we feel that upgrading the aircraft now is the
most prudent course of action. The Marine H-1 Upgrade Program remanufactures
both aircrafl, which will zero time the airframes thus restoring their 10,000 flight
hour life. Additionally, the upgrade corrects existing deficiencies to enable both air-
craft to be operationally effective after the turn of the centiuy, and remain support-
able until replaced by a follow-on aircraft.

Question. Based on the fiscal year 1997 budget, when will the heUcopter upgrade
program be complete?

Answer. The Engineering Manufacturing Development phase will begin in Novem-
ber 1996. The UH-IN remanufacture will start in fiscal year 2002 with the last re-
manufacture being procured in fiscal year 2010 and the last delivery in 2012. The
AH-IW remanufacture will start in fiscal year 2003 with the last remanufacture
being procured in fiscal year 2011 and the last delivery in fiscal year 2013.

Question. If additional funds were provided, could the upgrade program begin be-
fore 2003? If so, when, and how much dollars would it require?

Answer. The Department of the Navy has developed an accelerated program that
would allow both aircraft to start Low Rate Initial Production in fiscal year 2001.
That plan would require additional RDT&E (then-year dollars) as follows: $38.3 mil-
lion in fiscal year 1998 and $60.4 million in fiscal year 1999; and additional APN
(then year dollars) as follows $89.9 million in fiscal year 2001; $142.5 million in fis-
cal year 2002; and $23.9 million in fiscal year 2003.

Question. What are the current operations and support costs for the Marine Corps'
utility and attack helicopter fleet? What are the projected costs for the upgraded
fleet?

Answer. The current operations and support costs for the utility and attack heli-
copter fleet in constant fiscal year 1996 dollars is $8,341/flight hour. The projected
operations and support costs for the upgraded utility and attack helicopter fleet in
constant fiscal year 1996 dollars is $8,04iyflight hour, reflecting a $300 per flight
hour savings in projected operations and support costs.

Indoor Simulated Marksmanship Trainer

Question. The Indoor Simulated Marksmanship Trainer is an interactive video
marksmanship simulator which provides enhanced marksmanship skill training for
a variety of hand held weapons. The Congress provided $8 and $24 million in fiscal
years 1995 and 1996 to satisfy Marine Corps training requirements. Because the fis-
cal year 1995 and 1996 funds would buy out the program, the fiscal year 1997 budg-
et request does not provide funds for this program. It is our understanding that both
the fiscal year 1995 and 1996 funds have not been released for execution. Why?
What is the impact if the funds are not released?

Answer. Both the fiscal year 1995 and the fiscal year 1996 funds have just been
released.

[Clerk's note. — End of questions submitted by Mr. Young.]

Wednesday, March 27, 1996.

AIR FORCE ACQUISITION PROGRAMS

witnesses

hon. arthur l. money, assistant secretary of the air force
for acquisition

lieutenant general george k. muellner, principal deputy,
assistant secretary of the air force for acquisition

brigadier general dennis g. haines, director of supply, of-
fice of the deputy chief of staff for logistics

Introduction

Mr. Young. The Committee will come to order. Today the Com-
mittee will conduct an open hearing on fiscal year 1997 Air Force
acquisition programs. The Committee welcomes Mr. Arthur L.
Money, Assistant Secretary of the Air Force for Acquisition, Lieu-
tenant General George K. Muellner, Principal Deputy Assistant
Secretary of the Air Force for Acquisition, and Brigadier General
Dennis Haines, Director of Supply, Deputy Chief of Staff/Logistics,
United States Air Force. Gentlemen, we are pleased to have you
here today.

The Department of the Air Force's fiscal year 1997 budget re-
quests $28.9 billion for procurement, research and development.
This is nominally a 3.3 percent increase over the appropriated
amount for fiscal year 1996, but in effect the same amount as fiscal
years 1995 and 1996 when taking inflation into account. The budg-
et requests funds only 19 new combat aircraft and 1070 missiles.
These amounts represent some of the lowest totals since the Air
Force became an independent service. In fact, it should be noted
that this year's Air Force request for aircraft procurement is lower
than the Navy's.

The Committee would like to investigate the status of several Air
Force acquisition programs today and in doing so would like to
keep some of the following key considerations in mind.

One, are the near, mid, and long-term modernization needs of
the Air Force being adequately funded in the budget we have be-
fore us?

Two, are acquisition programs that are in the budget funded at
rates that make economic sense? It would appear that in several
instances this is not the case. For example, we have in the past
procured F-16s at a rate of 150 per year. By comparison, your fis-
cal year 1997 budget request includes only four. In the case of the
C-130J, your budget requests just one aircraft, a rate that will
modernize the C-130 fleet in 90 years. Also, weapons programs, no-
tably the sensor-fused weapon and Advanced Medium-Range Air-
to-Air Missile, are being procured well below optimum rates.

(267)

268

Three, are we realizing all the savings that we can from the C-
17 multi-year proposal if it is approved by Congress? And finally,

Four, are we on the verge of a long-term readiness problem in
the Air Force because of the Administration's failure to properly
address defense weapon system modernization?

We look forward to a candid dialogue with you today on these
and other questions that we may have after your remarks. At this
point, let me yield to Mr. Murtha for opening remarks.

Mr. Murtha. No opening statement.

Mr. Young. Gentlemen, you may summarize your statements.
Your entire statements will be placed in the record. When you have
completed, Mr. Dicks, who must be at the Intelligence Committee
shortly, will start the first round of questioning.

Mr. Money.

Summary Statement of Mr. Money

Mr. Money. Mr. Chairman and Members of the Committee and
staff, Lt. General Muellner, Brigadier General Haines, and I are
very pleased to have this opportunity to present the Air Force's re-
search, development, test and evaluation, RDT&E, and procure-
ment programs proposed in the President's 1997 budget.

General Haines and I will make some brief opening remarks and
then General Muellner is prepared to address some more in depth
using the charts on my right. We will in fact discuss the specific
programs that are in the fiscal year 1997 President's budget that
are critical to the Air Force vision of Global Reach and Global
Power.

FISCAL YEAR 1997 BUDGET REQUEST

This budget balances investments across the entire range of air
and space capabilities while sustaining our technology base. Ag-
gressive acquisition reform initiatives are encompassed in all areas
of this program. Our reform successes clearly demonstrate that we
can deliver improved capabilities to the joint warfighters better,
faster and cheaper, and this is the theme of the Air Force acquisi-
tion and logistics community.

The Air Force fiscal year 1997 RDT&E and procurement request
is $40 billion or about 55 percent of the Air Force's total budget re-
quest. Of the $40 billion we are spending approximately 75 percent
on science and technology development and procurement of new ca-
pabilities for our warfighters.

ACQUISITION REFORM

We recognize that significant investment is being made to mod-
ernize our warfighters' capabilities, and that is why acquisition re-
form is one of the top priorities, so we can deliver better, faster and
cheaper. Our successes to date prove that we are starting to do
this. To date we have generated approximately $13 billion in real
savings and cost avoidance, allowing us to maintain the moderniza-
tion program in spite of today's fiscal constraints.

We continue to build on this success, but we realize that we have
a long way to go. We have extended reform from the laboratories
through our product centers into our logistics centers, and are

269

working with OSD to identify areas to reform to help us deUver the
new warfighting capabihties. These areas include requirements, fi-
nancial, personnel and logistics processes.

Certainly, your continued support for acquisition reform initia-
tives is appreciated. In the near term we will work together to pro-
vide funding stability to our modernization programs. I can't over
stress that funding stability is absolutely critical to shorten cycle
time and reduce program cost.

Attempts to achieve short-term savings by delaying or slowing
down modernization programs increases program cost. To maintain
our balance between readiness and modernization we must con-
tinue to work together to maintain a stable funding environment.
The results of this will be the most efficient use of the Nation's in-
vestment resources.

In all our reform initiatives, our success is measured in terms of
reduced cycle time, lower costs with a smaller acquisition work-
force. We will continue to share our successes with you. I have
brought a number of acquisition reform success stories. We have
left those for you and your staff. Our reform initiatives have taken
hold and are becoming business as usual in the Air Force.

We are changing the old culture through training, successes and
leadership commitment. Teamwork between Congress, OSD, the
Services, and with industry prove every day that we can deliver
and improve the warfighting capabilities.

SCIENCE AND TECHNOLOGY PROGRAM

I want to briefly discuss the long-range planning in the science
and technology program, both of which are vital to our future mod-
ernization efforts. Developing the right technologies to satisfy the
next generation of warfighters' needs depends on long-range plan-
ning.

The Air Force's science and technology community is an active
and well-established link to our warfighters as we have applied a
strategy-to-task, task-to-need, and need-to-technology approach to
planning. This is accomplished through the Air Force's mission
area planning process and technology area plans. In addition, the
recently released New World Vistas study provides another valu-
able input for our technology investment strategy.

I would like to take another minute or two to talk about the ac-
quisition reform because it is an integral part of the Air Force
today and has already been accounted for in budget requests for
many of the Air Force's key modernization efforts.

Today, we will discuss these efforts and how they have supported
the global mobility, air superiority, precision employment, space su-
periority and information dominance.

To modernize our forces, we have prepared a prioritized, time-
phased plan balancing near-term, mid-term, and long-term needs
for fiscal year 1997 and beyond. The President's budget strikes a
careful time-phased balance between modernization and readiness.

As part of the presentation, we will highlight today the C-17, F-
22, Joint Strike Fighter, Global Positioning System — GPS, Space
Based Infrared System--SBIRS, Airborne Warning and Control
System— AWACS, and JOINT STARS that demonstrate that we
are delivering improved capabilities to the warfighter today while

270

developing the capabilities needed to maintain our superior air and
space capabilities well into the 21st Century. These programs are
just a few examples of the progress we are making in modernizing
our forces.

Many of these programs are the leading edge of acquisition re-
form and have laid the foundation for more far-reaching reform ini-
tiatives.

SUMMARY

In summary, the Air Force is satisfying Global Reach-Global
Power needs better, faster and cheaper. We are building on these
successes and teamwork with you and our partners in DoD and in-
dustry. We will continue to provide the warfighters and American
people with superior, affordable weapon systems. General Haines
will now present his opening remarks.

[The joint statement of Mr. Money and Lieutenant General
Muellner follows:]

271

DEPARTMENT OF THE AIR FORCE

PRESENTATION TO THE COMMITTEE ON APPROPRIATIONS

SUBCOMMITTEE ON NATIONAL SECURITY

UNITED STATES HOUSE OF REPRESENTATIVES

SUBJECT: Fiscal Year 1997 Air Force Acquisition Programs

STATEMENT OF: MR. ARTHUR L. MONEY

Assistant Secretary of the Air Force
For Acquisition

LIEUTENANT GENERAL GEORGE K. MUELLNER
Principal Deputy Assistant Secretary of the Air Force
For Acquisition

MARCH 1996

NOT FOR PUBLICATION UNTIL RELEASED
BY THE COMMITTEE ON APPROPRIATIONS,
UNITED STATES HOUSE OF REPRESENTATIVES

272

Mr. Chairman and Members of the Committee:

Thank you for this opportunity to appear before you and discuss the
Air Force's Research, Development, Test and Evaluation (RDT&E) and
procurement activities as proposed in the President's FY97 budget request.
This budget request represents balanced investments across the entire
range of combat and support capabilities while sustaining the technology
base. It is a time-phased approach coupled with aggressive acquisition
reform initiatives that ensures the Air Force will continue to provide our
nation Global Reach-Global Poiver at an affordable price.

Air power will remain a major tenet of current and future U.S.
national security policy. To that end, we are dedicated to providing
America the most capable and efficient air and space forces possible— today
and in the future. As a direct result, our forces give dominant warfighting
capabilities to the U.S. Commanders-in Chief (CINCs). Specifically, the Air
Force provides the joint force commarider with a broad range of air and
space capabilities, to include: Global Mobility, Air Superiority, Precision
Employment, Space Superiority, and Information Dominance.

Global Reach-Global Poiver focuses the Air Force on core air and space
contributions to the National Milittiry Strategy, helping us prioritize
modernization investments. The Air Force has carefully constructed a time-
phased modernization plan that synchronizes the size and timing of
multiple programs. This is the Air Force acquisition strategy and covers
near-term, mid-term, and long-term efforts. This approach allows us to
modernize without sacrificing readiness. Attempts to achieve short-term
savings by delaying or slowing down modernization programs will lead to
disproportionately large expenditures over the long-term. In addition,
these "delays" also generate "costs" associated with the required actions of
extending the service life and enhancing the capabilities of fielded systems
while waiting for the "delayed programs" to get fielded. Whenever a
program is used as a "source" for funding, there are direct cost and
readiness impacts to the related family of weapons systems and the
Service's ability to meet national security objectives. In addition, non-
progiammatic reductions underrrune program stability necessary to control
costs and maintain affordability. For this reason, funding stability is
critical, permitting us to make the most efficient use of the nation's
investment resources.

GLOBAL MOBILITY

Our CINCs identify strategic lift, air and sea, as DoD's greatest single
deficiency. In response to this need, the C-17 is the Air Force's foremost

273

near-term modernization priority and is a crucial piece of our Airlift
Roadmap.

Our C-141s are rapidly aging, while the demand for airlift has increased.
Based on a comprehensive analysis of strategic and tactical airlift
requirements, aircraft and contractor performance, and cost effectiveness,
the Defense Acquisition Board recommended that we procure 120 C-17s. In
anticipation of Congressional approval, our plan takes advantage of a
stable multi-year procurement contracting environment at high production
rates to offer substantial savings $896M for C-17 acquisition. It allows us to
fill the airlift gap faster and finish the 120 airframe C-17 procurement prior
to the rise in production for the F-22. The DoD wholeheartedly embraces
the C-17 multi-year program.

The C-17 has been flying operationail missions since October 1994,
supporting operations in Southwest Asia, Panama, the Virgin Islands, and
now in Bosnia. Concurrently, our acquisition program has exceeded
expectations with the last 12 aircraft delivered to the Air Force ahead of
schedule. The success of last year's 30-day Reliability, Maintainability, and
Availability Evaluation and support of operational missions is solid proof
of the aircraft's performance.

AIR SUPERIORITY

The F-22 is our most important long-term modernization priority-the
need for air superiority is unquestioned. The F-22 will guarantee air
superiority well into the next century. Its airframe and powerplant provide
a highly maneuverable stealth platform capable of extended supersonic
flight. Revolutionary integrated avionics-on and off-board multi-sensor
collection and data-fusion—will provide F-22 pilots unequaled battlespace
awareness. The unique capabilities of the F-22 will enable the Air Force to
dominate aerial environments— operating at will over hostile or contested
territories, attaining unprecedented first-look, first-shot, first-kill successes,
while protecting the many high-value assets necessary for success in
modem military operations. This capability provides us the freedom of
action to deploy our forces and dominate the battlefield.

We have sized and sequenced the F-22 program to meet critical
warfighting requirements at a cost the nation can afford. When the F-22
enters the fleet, it will replace the early 1970s vintage F-15 with quantum
leaps in technology and combat effectiveness. Furthermore, the F-22 will be
cheaper to operate, require fewer personnel to operate, and require less
airlift to deploy abroad. We have made a substantial long-term investment

274

commitment to achieve these revolutionary improvements. Funding
stability continues to be a major concern for the future of the F-22 program.
Already, during the course of the program, funding reductions have
increased program costs by 2.5 to 3 times over the amovmt of the funds
removed.

Air Force
Fighter Plan

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The next century will bring advances in the numbers and varieties of
threats. While the F-22 will be a potent offensive tool to counter these
threats, the Airborne Laser (ABL) will provide a very potent defensive tool
against Theater Ballistic Missiles (TBMs). Operation DESERT STORM
demonstrated the potential of theater ballistic missiles to serve as an
effective delivery means for Weapons of Mass Destruction (WMD). Our
current approach to counter this threat integrates complementary
capabilities from the different Services to create a multi-tiered defense
consisting of attack operations, boost-phase interceptors, and terminal
defenses. Recognizing ABL's prominent role in the Theater Missile Defense
architecture, we have programmed $700 million in the current Future Years
Defense Program (FYDP). In addition, we will transition the technology
demonstration to a major defense acquisition program. ABL will provide a
boost-phase intercept capability to destroy ballistic missiles over an
aggressor's territory. The prospect of WMD debris falling on an enemy's
own forces or people may serve as a strong deterrent to WMD use.

275

PRECISION EMPLOYMENT

Development of the Joint Strike Fighter, upgrading our conventional
bomber forces, and developing and fielding enhanced munitions
capabilities are all key activities for modernizing the Air Force precision
employment capabilities.

The Joint Strike Fighter 0SF) is one of the Air Force's critical long-term
modernization efforts and has been constructed to leverage the
technological developments of the F-22. The technological advances that
make the F-22 revolutionary-in avionics, composites, engines, and
signature reduction—are the foundation technologies for the JSF. The JSF
program will result in a family of low-cost fighter aircraft capable of
meeting the future multi-role fighter requirements of the Air Force, Navy,
and the Marine Corps and will replace the F-16, F/ A-18 and Harrier. The
affordability and versatility of JSF may also provide the most attractive
alternative to many of our allies and coalition partners as they seek to
modernize their existing fleets of fighter aircraft. The JSF team has
developed a basic framework for international participation and we have
already entered into an agreement with the United Kingdom in which they
will contribute $200 million to share in the development costs of the
concept demonstration. JSF has the potential to become the world's
standard multi-role fighter for the 21st century.

In the near-term, we must continue to sustain the health of our combat
forces until the arrival of our next generation forces. To this end we are
continuing to recapitalize o jr F-15E and F-16 fleets. We cu-e also pursuing
modest modernization upgrades to our fighter forces and purchasing
enhanced conventional munitions, such as Joint Direct Attack Munition
(JDAM) and sensor-fuzed weapons, to improve their effectiveness.

Conventional bomber upgrades and smart munitions improvements
are Air Force mid-term modernization priorities. The B-2 will give
America a credible capability to penetrate advanced defenses and conduct
precision strikes— nuclear and conventional— anywhere in the world. The B-
1 will transition to a conventional role and supplant the B-52 as the
conventional backbone of our bomber fleet. The B-52 will continue to
provide a nuclear hedge and offers long-range precision stand-off
capability.

Bomber upgrade programs are helping us integrate our newest
conventional weapons onto all bombers. These upgrades will give our non-
stealthy B-52s and B-ls multiple target, stand-off, smart munitions strike

276

capabilities as well as increase their survivability. The combination of
completing development of our 20 B-2s plus upgrades to our B-ls and B-52s
provides an affordable approach to maintaining the minimimi overall long-
range strike capability required to "swing" between two Major Regional
Conflicts.

Critical to the effectiveness of our bombers and our fighters is the
continued development and procurement of smart weapons. Stand-off,
smart weapons extend the range, increase the lethality, and improve the
survivability of older and newer aircraft alike. The Joint Stand-off Weapon
gSOW), Joint Air-to-Surface Standoff Missile OASSM), and JDAM provide a
balanced and affordable approach for increasing the versatility and
lethality of Air Force, Navy and Marine Corps aircraft.

Air Force
Weapons Plan

~:sj^'

Air-to-Ground

JDAM will significantly improve our ability to conduct adverse-weather,
round-the-clock operations. JDAM adds an Inertial Navigation System and
GPS-guided nose and tail kit to the MK-84 general purpose and BLU-109
penetrator bombs and also to a 1000 pound bomb. Our recentiy announced
award of JDAM EMD is a milestone in acquisition reform. Through a great
competition, we were able to lower the average unit price of the mod kits
by 55% from the Operational Requirement Document requirement and
increase the warranty from five to twenty years. Using a carrot and stick
approach— guaranteed business and a hands off government approach if
the price holds — second sourcing and more traditional government
oversight if the price rises— we can be confident that we will deliver on our

277

promises. JSOW is a 1000 pound class accurate glide dispenser weapon
which provides us a low cost option for attacking Suppression of Enemy
Air Defenses and soft targets from intermediate stand-off ranges.

Finally, JASSM is a precision long-range stand-off weapon designed to
penetrate and attack targets in high threat areas. Our JASSM acquisition
strategy is based on a number of streamlining initiatives - a streamlined
source selection approach where contractor past performance will play a
major role, industry involvement early and up front, and extensive use of
integrated product teams. JASSM has also been designated a Cost As An
Independent Variable flagship program which calls for continuous
cost/ performance trades throughout the program life cycle by striking a
balance betv\'^een capability and affordabihty. The program is on track to
award two contracts this summer for a 24 month competitive rolling
downselect Program Definition and Risk Reduction similar to JDAM.
Based on this approach, we will focus on delivering an affordable,
producible, and supportable missile design at or under the average unit
procurement price of $700K. After downselect to one contractor, a 32
month Engineering Manufacturing Development will follow to test and
evaluate the JASSM design. It will significantly increase our capability to
hit critical, high value targets in the early stages of a conflict. In parallel
with these weapons, w^e will develop and field reconnaissance platforms,
sensors, and C4I infrastructure with the broad area coverage and
geolocational targeting accuracy necessary to support precision guided
weapons.

SPACE SUPERIORITY

Several modernization programs transcend our time-phased approach.
For instance. Air Force modernization programs reflect the need to provide
the nation continuous, assured access to space. Chir Launch and Satellite
Roadmaps are key to providing the crucial access to space.

Evolved Expendable Launch Vehicle (EELV) will help us maintain this
access to space. EELV is an evolutionary launch system. It is being
designed to deploy a broad range of spacecraft and support increasingly
demanding launch requirements. It is expected to lower the cost of both
military and commercial access to space and ensure the long-term
competitiveness of America's commercial launch industry. Currently we
have four contractors performing Low Cost Concept Validation of their
EELV systems. They offer diverse approaches to EELV and maximizing
utilization of streamlined acquisition concepts. In November of this year
we expect to select two of the four contractors to continue on the path

278

toward our objective of acquiring the most affordable and effective system
for our nation's future spacelift requirements.

Space Based Infrared System (SBIRS) is another key system that will
improve the CINC's ability to defend against theater ballistic missiles. As a
replacement for the Defense Support Program (DSP), SBIRS will enable U.S.
and allied forces to detect targets, such as theater balUstic missiles, sooner
and at lower altitudes, enabling alhed forces to destroy them at longer
ranges. As a result, the warfighter will possess an even greater ability to
neutralize the theater ballistic missile threat. In addition, it will give theater
level commanders increased opportunities to influence operations in real or
near-real time. With SBIRS, space-based cueing will be available for direct
downlink to a variety of offensive systems that can then destroy transport
erector launchers immediately after launch detection. Space-based cueing
will also be available for boost-phase intercept platforms, such as ABL, to
intercept missiles early in flight and to ground and sea-based terminal
defense systems.

During the last eight months of SBIRS Pre- Engineering Manufacturing
Development, the Air Force with Army, Navy, unified and theater
commanders, as well as other agencies, (and contractor participation)
reviewed the cost-driving requirements for SBIRS, performed
cost/ performance tradeoffs, and performed detailed military utility versus
cost analyses of specific tactical parameters. Not only were individuals
from these organizations involved on an almost daily basis, but there were
periodic senior reviews to ensure that the process stayed on-track. By
including cost of the system's driving requirements when setting detailed
performance specifications, we have established a well balanced, affordable
SBIRS requirement set. Additionally, praise from our contractor teams has
been high because it allows them to understand the rational for
requirements, and to suggest areas for significant savings with small
changes in the requirements. The added stabUity from having a fully
mature set of requirements prior to full scale development will be
considerable. We believe this apprrach to cost as an independent variable
will result in a significantly better acquisition system when applied to
future systems development.

Advanced capabilities to track missile systems after booster burnout,
through midcourse and reentry phases of flight are being developed in the
low earth orbit component of SBIRS known as the Space cmd Missile
Tracking System (SMTS) Flight Demonstration System (FDS). SMTS FDS is
a proof of concept designed to demonstrate key technologies on orbit,
crucial advances in the integration of complex, highly interactive

279

subsystems into a single, low cost platform and ground segment operations
concepts for the command and control of a large distributed constellation of
satellites.

SMTS FDS has some significant challenges ahead in the areas of long life,
low orbit satellite design, and commcind and control of complex,
distributed satellites. The ultimate goal is to field a highly capable and
affordable system to revolutionize our warfighters' capabilities in missile
warning, missile defense, technical intelligence and battlespace
characterization.

Full scale deployment, in accordance with the Under Secretary of
Defense (Acquisition and Technology) approved program baseline, was
planned to begin in FY06 with a constellation of satellites on orbit by FY08.
The Air Force, in coordination with the other services and DoD agencies, is
developing a new strategy to accelerate that deployment in response to
Congressional direction in the FY96 Defense Authorization Bill. The plan
being prepared for high level DoD review meets the Congressional
mandate to begin launching an operational low earth orbit system in FY02
and achieve initial operational capability by FY03. The next few years are
crucial and adequate funding and program stability are a must to maintain
momentum for this accelerated deployment! Cooperation and support at
the highest levels of DoD and Congress are necessary if we are to
accomplish the requirements enacted into law.

INFORMATION DOMINANCE

To win future conflicts quickly and decisively, we need to gain and
maintain absolute information dominance over our adversaries. The
critical objective is to operate inside the cycle time of an adversary's
decision process. Whoever has the ability to gather, understand and
control information, and deny the same to an opponent can quickly attain
this advantage! Our defensive information warfare efforts aim to do just
that by identifying system vulnerabilities, threats and risks and
implementing appropriate countermeasures. If we can analyze, act cind
assess faster than an opponent, we will win.

Ntunerous improvements to our information dominance capabilities are
underway. The Joint Surveillance Target Attack Radar System, or Joint
STARS, which will reach Irutial Operational Capability next year, will
provide commanders an unprecedented awareness of the ground battle
situation, much like AWACS does in the air arena today. In Operation Joint
Endeavor, Joint STARS, while still a developmental platform, has proven

280

its worth in supporting the United Nations Implementation Force with
accurate, real-time situational awareness of ground activity. As for the
Airborne Warning and Control System (AWACS), we have initiated a
major program which will extend its life well into the next century.
AWACS will continue to be a primary force multiplier for our airborne
assets due to the proactive capabilities provided through this life extension.
In partnership with our NATO allies, we continue to upgrade AWACS in
harmony with our own efforts. We also hope that within the next year
NATO will select Joint STARS as its Alliance Ground Surveillance system
tmd provide a core battle management capability complemented by other
countries' ground and airborne systems.

Our reconnaissance force structure is also undergoing significant
additions and upgrades. Unmanned Air Vehicles hold great promise as
long endurance, low cost, attritable systems. They will augment our
reliable and survivable U-2, RC-135 and space-based assets to expand our
information dominance of the battlefield. Equally important, we are
fielding an interoperable Command, Control, Communications, Computers
and Intelligence (C4I) infrastructure of deployable ground stations, data
links, satellite communication and real time exploitation capabilities which
will make intelligence data from our reconnaissance forces available to war
fighting commanders with unprecedented timeliness.

Several programs are underway which will significamtly improve the
ability of our C4I systems to command and control forces and exploit
perishable intelligence data. The ascendancy of the Theater Battle
Management Core Systems and Air Force Mission Support System as the
primary support tools for the Joint Forces Air Component Commander
0FACC) means air forces wiU have seamless information flow from the
commander to the cockpit. These programs will fully support the
philosophy and implementation of DoD's Global Command and Control
System (GCCS), and in fact will be key pieces of the GCCS architecture.
Exchange of data between several of these systems is enhanced by the Joint
Tactical Information Distribution System (JTIDS), which enables
command and control systems to share a common picture of the air
situation.

Another mission that will never cease to exist is the protection of air
sovereignty over North America. The bilateral program with Canada to
upgrade the Region and Sector Operations Control Centers (^SOCC)
will ensure the success of this preeminent task.

281

Of course a large part of this capability to provide global information
depends on our space based infrastructure. The Air Force continues to
launch and operate 90% of DoD's space assets including Milstar, the most
recent addition to our space-based Command, Control, Communications,
Computers, Intelligence, Surveillance and Reconnaissance capability.
Milstar's worldwide, anti-jam, scintillation-resistant, low probability of
intercept-and-detection communication features are critical to the
interconnection of theater and national systems. The ability to He together
the near-real-time collection, distribution and C2 features associated with
theater assets through a robust nulsatcom capability will provide us with a
significant combat edge. Specifically, the Air Force provides the joint force
commanders with a broad range of air and space capabilities that allows us
to take advantage of enhanced battlefield awareness..

SCIENCE AND TECHNOLOGY

Our ability to put leading edge technologies in the hands of our
warfighters has been one key to the success of our national security strategy
for more than four decades. We consistently invest in cutting edge
technologies that exploit the inherent operating advantages of air and space
and the modernization programs we are pursuing today will determine the
nature and capability of our forces well into the next century. Thus, our
Science and Technology (S&T) prowess remains the fulcrum of our future
readiness.

We are continuing to aggressively fund our S&T Program with a balance
that addresses both near-term and far-term warfighting needs. We are
focusing our S&T efforts on technologies that will produce weapon systems
that are both sustainable and affordable. Not only are we exploring and
developing technologies within the Air Force, but we also have joint service
and international cooperative S&T efforts underway that will make
significant contributions to joint warfighting. We have teamed developers
with warfighters to ensure the focus of our technology efforts is matched to
real and identifiable user needs. The Congress has consistently supported
our efforts to field technologically superior weapon systems. These
programs are about America's security, about deterring war, about winning
decisively if war is forced upon us, and about minimizing casualties and
collateral damage.

LEAN, AGILE ACQUISITION

A key challenge to our Global Reach-Global Power vision is keeping pace
with meteoric advances in essential warfighting technologies. Acquisition
processes designed under Cold War rules can no longer respond quickly
enough to exploit radical shifts in design, much less technological

282

breakthroughs. To take advantage of increasingly dynamic opportunities,
the Air Force is building a lean, agile acquisition system.

Adopting and implementing new processes is an important first step
and requires overcoming embedded barriers to change to include statutory
and regvilatory constraints, cultural biases, and fear of the unknown. These
barriers are being overcome through dedicated, innovative leadership. The
actions we take today will form the foundation for the lean, agile
acquisition system of the future.

ACQUISITION REFORM

Eleven Lightning Bolt Acquisition Reform Initiatives have fueled an
acquisition renaissance within the Air Force, building trust, empowering
people, and strengthening teamwork (including teamwork with industry).
Individually, each initiative has helped tear down specific barriers to
progress. Together, they have created a momentum ensuring the Air Force
provides timely, ciffordable, and advanced systems to meet the needs of our
warfighters. Our reforms have eliminated obsolete and redundant
acquisition policies, provided streamlined processes and resulted in timely
delivery of systems that meet the warfighters' requirements at a cost the
nation can afford. Programs such as JDAM, PACER CRAG and Peace
Shield are already showing results.

We have accelerated the JDAM program, giving the warfighters this
crucial, advanced system one year early and completing production five
years early. We have also increased JDAM's warranty from five to twenty
years, reduced the average unit price by two-thirds, and saved $2.9 billion.

On PACER CRAG, a program that includes modifications and additions
to the KC-135 aircraft's GPS, radar, and compass, we are able to reduce the
KC-135 cockpit crew from three to two and also significantly enhance KC-
135 reliability and maintainability. Our PACER CRAG team has reduced
reporting requirements, eliminated unnecessary military standards and
specifications and saved approximately $90 million which we then applied
to other Air Force programs.

The Peace Shield program, an advance command, control, cuid
communication system for the Kingdom of Saudi Arabia, is another
acquisition reform success story. It enabled a program that began behind
schedule to deliver a completed system six months ahead of schedule and
million under the Letter of Agreement. It also enabled Peace Shield to

283

reduce its System Program Office (SPO) size from 325 to 105 and save over
$25 million in SPO operating costs.

We have made substantial progress in reforming our acquisition
practices and culture and generated neeu-ly $13 billion of cost avoidance and
savings over the FYDP. Our challenge for the future is to build on this
success. Lasting reform is the result of improving both our business
practices and our acquisition culture — to make today's "acquisition
reform" tomorrov/s "business as usual." Our efforts to date mark only the
beginning of the process and we are to continually looking for acquisition
practices we can improve. The Air Force Acquisition leadership is
committed to continuing our crusade to make acquisition better, faster, and
cheaper.

THE NET RESULT

Our Global Reach-Global Power modernization plan enables us to keep
providing our nation responsive force options across the spectrum of
conflict. We have made tough decisions, weighing technological
advantages agaii\st affordability and have carefully sequenced our
programs to balance year-to-year eiffordability concerns, readiness, amd
technical feasibility. We have structured our programs for stability and this
stability is vital to producing the best systems at the lowest possible cost.
We have worked to do this in partnership with the Congress, sharing the
bad news, the good news, and providing periodic updates on the issues.
We appreciate the sustained support of this Committee and of the Congress
as a whole for the Air Force modernization program. The FY97 budget
request provides the balance necessary to ensure U.S. commitments are
continued, both now and in the future. We ask for your continued support.

284

Summary Statement of General Haines

General Haines. Mr. Chairman, members of the Committee and
staff, I am pleased to present the Air Force's Other Procurement,
Air Force, OPAF appropriation request for the fiscal year 1997
President's budget. The Committee has been supportive in prior
years and we thank you for the additional funding you provided for
Other Procurement last year. I have very brief comments and a
written statement for the record.

FISCAL YEAR 1997 BUDGET REQUEST

The other Procurement appropriation funds several thousand
different items essential to base infrastructure and to support our
combat forces. It procures such diverse items as night vision gog-
gles, medical equipment, generators, and ground processing termi-
nals for many of our satellites. The appropriation includes four
budget programs: One, Vehicles; two, Communications and Elec-
tronics Equipment; three. Other Base Maintenance and Support
Equipment; and four. Spares for the three equipment programs.

The fiscal year 1997 Other Procurement, Air Force equipment
budget supports our Global Reach-Global Power commitments. It
reflects a careful balance between sustainment and modernization.

ACQUISITION REFORM

We have benefited from the acquisition reform initiatives men-
tioned by Mr. Money. Programs such as SMART-Ts — Secure, Mo-
bile, Anti-Jam, Reliable Tactical Terminals — the new
MILSATCOM — Military Satellite Communications ground termi-
nals, and the Contingency Theater Automated Planning System,
CTAPS are prime examples to provide reliable, high technology
systems rapidly and at lower costs.

Investments in modem equipment increase support capability,
like the 60K aircraft loader which significantly improves our ability
to load and unload cargo from commercial and military aircraft.
This budget request also provides for affordable replacement pro-
grams to sustain our forces both for major regional conflicts or op-
erations other than war. In certain cases, however, we have as-
sumed moderate risk in that selected replacement programs have
been deferred.

MODERNIZATION

While focusing on major weapon systems modernization needs,
we must not forget that we also need the less glamorous, lower cost
equipment items needed to support them. Today, time permitting,
I will discuss in more detail four major programs. These programs
provide essential support equipment and infrastructure our
warfighters need while employing their major weapon systems.

To maintain our balance between readiness and modernization,
we must work together to maintain stabilized funding so we can
better prioritize and schedule replacements. Our warfighters de-
serve and our peacekeepers deserve supportable well-maintained
equipment. I am prepared to discuss this program at the end of the
brief. Thank you.

[The statement of General Haines follows:!

285

DEPARTMENT OF THE AIR FORCE

PRESENTATION TO THE COMMITTEE ON
APPROPRIATIONS

SUBCOMMITTEE ON NATIONAL SECURITY

UNITED STATES HOUSE OF REPRESENTATIVES

SUBJECT: Other Procurement, Air Force

STATEMENT OF: BRIGADIER GENERAL DENNIS HAINES
Director of Supply
Deputy Chief of Staff /Logistics
Headquarters, United States Air Force

MARCH 1996

NOT FOR PUBLICATION UNTIL RELEASED
BY THE COMMITTEE ON APPROPRIATIONS
UNITED STATES HOUSE OF REPRESENTATIVES

286

MR. CHAIRMAN AND MEMBERS OF THE COMMITTEE:

It is an honor to appear with the Service Acquisition
Executive to present the sustainment portion of the Air Force FY 1997
procurement appropriations budget request. The procurement request
includes funding for spares, equipment, ammunition, and modifications.
The Air Force request sustains the total force - Active, Air National
Guard (ANG), and Air Force Reserves (AFR). It is designed to support a
force structure capable of fighting and winning two almost simultaneous
major regional conflicts or conducting military operations other than
war.

Procurement of sustainment items are included in Aircraft,
Missile, and Other (OPAF) Procurement Appropriations. My directorate
is the manager for OPAF which procures equipment essential to conduct
peacetime operations and maintain combat readiness. I will discuss the
four budget programs contained in OPAF: Vehicular Equipment,
Electronics and Telecommunications Equipment, Other Base
Maintenance and Support Equipment, and Spares and Repair Parts.
The following table compares the FY 1997 OPAF request to the FY 1996
appropriation ($ in millions).

Vehicular Equipment
Electronics & Telecommunications
Other Base Maintenance & Support

Equipment

Other
Spares and Repair Parts
TOTAL

I will describe major procurements in the four OPAF budget programs.
VEmCULAR EQUIPMENT

Vehicles play an integral role in the execution of the Air
Force's day-to-day mission, whether it's a fire truck supporting
flightline operations or a pickup truck delivering repair parts to an
aircraft maintenance activity. They are a force multiplier and essential
to the efficient accomplishment of daily operations. Approximately 300
vehicles have been deployed to support Joint Endeavor, ranging fi-om
aircraft cargo loaders to runway sweepers and snow plows.

Air Force vehicle authorizations have been reduced by over
30% or 48,000 vehicles since 1989, consistent with the overall force
structure reduction. In spite of this reduction, the Air Force has been
unable to fully fund the replacement account since FY 1986. We now
are short 2,360 vehicles, and have an additional 37,675 that exceed age
and mileage criteria. FY 1997 fiinding procures 3,580 vehicles. Nine

FY 96

FY 97

DELTA

144

130

-14

728

710

-18

5350

5122

-228

377

395

4973

4727

-246

-25

6284

5999

-285

287

hundred and ninety-seven of these are alternatively fueled, compressed
natural gas or electric, which exceeds our requirements for compliance
with the Energy Policy Act of 1992. One of the major items in this
request is $40.3 million for 37 60K aircraft cargo loaders which begin
entering the Air Force inventory this year. The 60K loader is designed
to be compatible with both military and coramercial aircraft. It will
reach the high cargo bays of modern wide-body cargo aircraft such as the
KC-10 and B747 and will greatly increase our air cargo throughput
capability. Also included in the FY 1997 budget request is $1.6 million
to modify 68 25K loaders to give them the high-reach capability for wide-
bodied commercial aircraft.

The majority of the vehicles being requested in FY 1997
(2,708 for $58.0M) are of the cargo-utility type; pickup trucks, stepvans,
truck tractors and trailers. They comprise the backbone of the logistical
support provided to the operational mission. Another 263 vehicles with
a procurement value of $15.3 million are special purpose vehicles
consisting of flighthne tow tractors, aircraft serving vehicles and
specialized maintenance trucks. The FY 1997 budget request also
includes $12.3 million for 506 passenger carrying vehicles such as
sedans, station wagons and buses. Included in this figure are 199 law
enforcement sedans.

ELECTRONICS & TELECOMMUNICATIONS EQUIPMENT

This program acquires Command, Control, Communications,
and Computer (C4) systems and equipment in support of Air Force, DoD,
and other federal agency operations. Equipment procxired is used in
only ground applications and includes a wide range of items from
flightline security sensors to highly technical command, control, tracking
and telemetry equipment needed to support the Eastern and Western
missile and testing ranges.

The equipment funded in this account provides vital
infrastructure enabling space systems to perform their vital role in the
Air Force mission of defending the United States through control and
exploitation of air and space. Space systems provide the ability to
observe the whole theater; to rapidly assess threats and opportunities; to
identify targets and to navigate precisely to those targets. These space-
based systems rely on ground stations to collect, process and relay vital
information to decision makers.

The FY 1997 request contains $16.1 million for continued
modernization of the Air Force Satellite Control Network (AFSCN).
This is a national asset tasked to support the research, development,
test, evaluation and operation of satellite systems. AFSCN supports
these requirements through satellite command and control, tracking,
and the collection and dissemination of real-time telemetry.

The Eastern Range (ER) centered at Patrick AFB, Florida
and the Western Range (WR) centered at Vandenberg AFB, California
provide tracking, telemetry, communications, command/control and

288

range safety support capabilities necessary to safely and successfully
conduct civil, commercial, and national security space launch operations,
ballistic missile test and evaluation (T & E), and a variety of
aeronautical and guided weapons T & E. The FY 1997 request of $102.4
million continues a major DoD initiative. Range Standardization and
Automation (RSA), to completely overhaul and modernize both ranges.
The result will be a range system re configurable fi'om one major
operation to another in less than 4 hours versus the current 2-3 days,
and will reduce operating and logistics costs. An on-going Improvement
and Modernization program at both ranges will sustain existing systems
until RSA is implemented.

The Air Force portion of the joint military service satellite
communications system begins procurement of Secure, Mobile Anti-Jam
Reliable Tactical Terminals (SMART-Ts) used to support Air Mobility
Command and US Strategic Command communications requirements
and continues funding for Single Channel Anti-Jam Man-Portable
(SCAMP) tactical terminals to be used by four major Air Force
commands. Additionally, FY 1997 funds continue procurement of Ultra
High Frequency (UHF) and Super High Frequency (SHF) ground
terminal equipment. We are requesting $52.2 million for the military
satellite communications system.

Modern interoperable, jam-resistant, secure Command,
Control and Commimications (C3) equipment is essential to effective
combat operations. Major FY 1997 budget requests for these programs
include $21.7 million for the Theater Command and Control Systems
Improvements (TACSI) program. This continues pre-planned product
improvement (P3I) efforts for mobile command and control centers and
procures additional Air Force Mission Support Systems (AFMSS).
AFMSS fuses all required sortie generation data and allows pilots to
transport all required mission planning information to the aircraft in the
form of a single tape cartridge.

Theater Battle Management Command and Control program
request of $48.0 million will prociire state-of-the-art equipment that
provides automation of C2 functions for combat forcies. Two major
efforts are continued: Contingency Theater Automated Planning System
(CTAPS) and Wing Command and Control System (WCCS). CTAPS
provides the Air Tasking Order planning and execution capability and
WCCS provides a composite picture of wing resources to facilitate sortie
generation and reporting.

The Air Force has requirements for a large variety of Base
Communication Electronic Systems which cover all facets of base
operations. These systems make up the infrastructure that is the
foundation of support for all Air Force combat operations.

The Automatic Data Processing Equipment (ADPE) line acts
as an umbrella program for Air Force-wide ADPE acquisitions or
equipment additions to government-owned computer systems. Programs
in this line will improve quality and productivity of day-to-day functions,
and increase war fighting capability by improving weapon system

289

management and operations. One significant item in the FY 1997
request of $17.8 million is continued funding for the DoD
Regionalization of Civilian Personnel Support which will allow the Air
Force to regionalize civilian support operations by streamlining and
automating personnel administration and management.

We have requested $125.7 million for Base Information
Infrastructure which fiilfiUs the Air Force's portion of the
National/Defense Information Infrastructure requirements. There are
two reasons for the growth in this line. First it reflects the Air Force
commitment to bring Air Force bases into the modern era of information
technology and provide for the needed connectivity of operational
systems vital to our war fighting mission; and second, it moves $21.3
million of Air National Guard funding, originally transferred to the Air
Force O&M account under a revised DoD expense/investment poUcy,
back into the OPAF appropriation for central management of these
funds.

In addition, this budget program funds logistics support and
training which includes equipment for various types of logistics support
and training missions at Air Force installations.

Communications-Electronics and Space Modifications are
also fiinded in this budget program to modernize and upgrade existing
communications-electronics and Air Force Space Command's ground
station equipment. These modifications correct reliability and
maintainability deficiencies and provide required operational
enhancements. The FY 1997 request is for $37.6 million.

This concludes the Electronics and Telecommunications
budget activity. I will now cover Other Base Maintenance and Support
Equipment.

OTHER BASE MAPJTENANCE AND SUPPORT EQUIPMENT

This is a very diverse budget program. Equipment procured
ranges from high-tech test and calibration equipment to low cost air
cargo pallets and nets. The majority of the funding is for critical
infrastructure and personnel supi>ort items needed to equip and operate
the total force.

A key item in the FY97 budget is test equipment. As we
place ever greater reUance on high technology weapon systems to
partially offset force reductions, maintainers must have the equipment
needed to insure our weapon systems fiinction to their maximiun
capabilities. We are requesting $27.7 miUion for this equipment.

Within the Personal Safety and Rescue category are night
vision goggles, fire fighters' life support equipment, life preservers and
anti-exposure suits as examples. We are requesting $12.4 million to
procure 489 night vision goggles, 963 breathing devices which meet
National Fire Protection Association Standards, and 493 salt water
activated, parachute release systems that will ensure aircrew safety if
forced to eject over water.

290

In our Base Industrial category, which supports base level
maintenance functions, are items like welders, lathes, and drilling
machines used in the repair and maintenance of aircraft engines . While
past investments have improved support, much of the equipment
exceeds its life expectancy. Our $5.7 million request for replacement
equipment costing less than $2 million will ensure a more efFective
repair process and improve readiness and sustainability. Also requested
in this category is $8.9 million for automated material handling
equipment to maximize productivity in weapon system component
storage and processing at 18 of our bases.

Generators and power plants are budgeted in the Electrical
Equipment category. In FY 1997, we require $4 million to replace 13
obsolete mobile electric power generators that supply critical primary
and backup power to maintenance and support facilities.

The $66.6 million requested in the Base Support area
includes medical and dental war reserve equipment, air base operability
equipment (ABO), pallets and nets, aircraft fuel storage and refueling
equipment, photographic, and bare base mobility equipment. As you are
aware since the establishment of the Defense Health Program in FY
1993, services budget only for war reserve equipment for which we
request $15.3 million to procure chemical and biological hardening for
our air transportable hospitals and related projects.

Air Base Operations and Mobility have unique functions.
The goal of ABO is to improve survivability from hostile actions, and
restore operational capabilities. The FY 1997 request of $4.9 million
will procure nine deployable pavement repair systems for contingency
operations and 15 deployable fire protection systems for hot pit aircraft
refueling. Mobility equipment, better known as Bare Base Harvest
Falcon/Harvest Eagle, provides deployable infrastructure equipment
designed and sized to provide housing, aircraft maintenance, and
airfield support. This equipment continues to be extensively used in
support of Military Operations Other Than War. To keep the system
viable we need $21.3 miUion in FY 1997.

The Special Projects category has the largest dollar value;
however, only two areas are equipment-related; the Technical
Surveillance Countermeasures Equipment (TSCE) and First Destination
Transportation (FDT). TSCE is used by the Air Force Office of Special
Investigators to conduct counterintelligence and law enforcement duties.
FDT is considered a must- pay bill. It funds the movement of Air Force
purchased property from the manufacturer to the location of first use or
storage. FDT funding supports all procurement appropriations. The FY
1997 requirement for TSCE is $1.06 million and $12.4 million for FDT.

SPARES AND REPAIR PARTS

This budget program aggregates OPAF spares and repair
parts and includes both initial and replenishment spares. The majority
of the funding is for Electronics and Telecommunications requirements

291

and is essential to support fielding of newly acquired systems and
equipment. Funding for spares is programmatic and in balance with the
equipment program. .

This concludes my prepared statement, Mr. Chairman. 1
would like to thank you and the members of your committee for your
time and support.

292

Mr. Young. General, thank you very much. General Muellner,
you have a presentation, sir.

Summary Statement of General Muellner

General Muellner. Yes, sir. We are going to go through the pro-
grams to encourage questions and since Congressman Dicks has to
leave, I would ask if there are specific programs you would like us
to talk to. We would be glad to do that.

INTEGRATING AIRCRAFT WITH SMART WEAPONS

Mr. Dicks. The thing I am most concerned about is getting these
weapon systems, these new precision-guided weapon systems like
wind-corrected munition dispenser. Joint Standoff Weapon — JSOW,
JDAM, Joint Direct Attack Munition on the bombers.

When you look at this program, and I think some of which is
classified, but it is taking a while to get these bombers equipped
with these precision-guided munitions and with JTIDS — Joint Tac-
tical Information Distribution System, and the other communica-
tions systems that are going to be necessary to fully take advan-
tage of their capabilities. I would start with the wind-corrected mu-
nitions dispenser, WCMD. How are we doing on that one?

General Muellner. The program is executing very well. Limita-
tions as far as getting it on the bomber force, let me start with the
B-1 as an example. In order to get the WCMD, which is the guid-
ance kit, we need the computer upgrade on the airplane and we
also need the smart buses; the 1760 data buses. Those will not be
available until the turn of the century time frame. That is what is
driving it, that and the munitipn availability are the two drivers
that lay out the time-phased program that you are alluding to. So
it is not just a case of weapons availability.

In the case of the B-1, it is getting the smart bus so we can com-
municate with the weapons. These are INS/GPS, Inertial Measure-
ment Unit/Global Positioning Systems, weapons. We also need GPS
on the airplane coming out in the first phase, and the computer up-
grades, which comes in the latter phase of that program.

Mr. Dicks. What are the problems with the B-52s?

General Muellner. In the case of the B-52s, the first phasing
will come with the availability of the weapons for the B-52. In the
case of the B-52, that will be available in the 1999 time frame to
go on the B-52, so we don't have the same limitations that we do
with the B-1 force.

Mr. Dicks. Because B-52s are not stealthy, you can only use this
after you have gained air superiority.

General Muellner. That is correct.

Mr. Dicks. It seems to me the crucial airplane to get this on is
the B-2. Is there even a plan today to put the wind-corrected muni-
tion dispenser on the B-2?

General Muellner. Yes, sir. That plan, though, is downstream.
We are going to put the sensor-fused weapon on which is the dumb
munition. The modification on that airplane to get the integration
for this, we will put it downstream in the turn of the century time
frame.

293

WIND-CORRECTED MUNITION DISPENSER

Mr. Dicks. The wind-corrected munition dispenser, as I under-
stand, can put three weapons, this is against a mobile division, you
could have a sensor-fused weapon is one, the combined effects mu-
nition, number two, and the gator mine, three different weapons
that can be dispensed through the wind-corrected munition dis-
penser. So if you were ever going to use B-2's against advancing
armor, you have to have that on in order to be able to do it. Sensor-
fused weapon is okay, but as I understand it, you can operate from
35,000 feet or some higher altitude.

General Muellner. The advantage of the WCMD is it takes care
of the wind so you don't have the error and you can put the same
weapons on the targets.

Mr. Dicks. My concern is, one, to get JDAM on the B-2 so you
can attack fixed targets. You have 16 weapons to attack fixed tar-
gets at $13,000 versus the cost of a standoff missile which is some-
where between $600,000 and $1.2 million per weapon. Then you
must have wind-corrected munition dispenser for advancing armor
and then for relocatables, JSOW. Where does JSOW come into
this? ■

General Muellner. That is in the 1999 time frame.

joint direct attack munitions

Mr. Dicks. I am very interested in this. I want to get with you
and go through this. I think you have done a great job on JDAM.
I think this is one system that we ought to get as quickly as we
can because the cost is so low. There is a major difference between
these weapons in terms of cost.

General Muellner. Absolutely, sir. WCMD is on the same track
as the JDAM.

Mr. Dicks. Are there any problems with the wind-corrected mu-
nition dispenser?

General Muellner. No. It is lagging the JDAM just because of
when we started it, but it is progressing in the same way. We look
like we are going to achieve the same sort of cost benefits on the
WCMD as with the JDAM.

JOINT AIR-TO-SURFACE STANDOFF MISSILE

Mr. Dicks. What about JASSM, the new longer range standoff?

General Muellner. We will have a Request for Proposal — RFP
on the streets within this month. We will have a down select to two
contractors in the June time frame. We will look at whether we
will marry that program up with a similar program the U.K. has.
We expect to have an agreement in place with them, if there is
commonality of contractors. We are selecting two. If one of those
happens to be on the British short list we could go with a joint pro-
gram. We are still going to carry through two contractors in order
to achieve the same competitive cost saving initiatives that we got
from JDAM.

Mr. Dicks. Three years?

General Muellner. Actually, two years. We will carry two con-
tractors for 24 months at which point we will down select to one
for a 32 month Engineering and Manufacturing Development,

294

EMD. The first integration is on the B-52 and the F-16, followed
by the B-1 and then the B-2.

Mr. Dicks. I think all of that is providing tremendous additional
capability to our existing aircraft. I knew that losing TSSAM, Tri-
Service Standoff Attack Missile was a big problem, but as you look
at the new threat from SA-10 tjqje surface-to-air missiles these
things become crucially important.

General Muellner. Yes, sir. The numbers earlier, which were
TSSAM numbers for that standoff, in the $1.2 million range — these
are going to be down in the $400,000 to $700,000, a round configu-
ration. The users have done an excellent job of trading off various
performance requirements to maintain affordability.

GLOBAL POSITIONING SATELLITE TARGETING SYSTEM/GROUND ATTACK
MUNITIONS (GATS/GAM)

Mr. Dicks. We gave you the money to put GATS/GAM on the B-
2 congressional initiative, and we are going to be presenting ideas
to try to see if we can't accelerate some of this. If you have these
platforms and can't get this capability on you are missing a real
opportunity.

General Muellner. GATS/GAM has been a real success story.

Mr. Money. We will get back to you with the details, Congress-
man.

[The information follows:]

The GPS-Aided Targeting System/GPS-Aided Munition (GATS/GAM) is a real suc-
cess story. GAM was put on contract in May 1995 following congressional direction.
The first GATS combined with GAM B-2 release was accomplished on November
2, 1995. So far, the GATS/GAM combination has performed within the 20 ft CEP—
Circular Error Probability requirement. We are currently executing the final weap-
on accuracy drops and will be complete in June 1996. The B-2 wiU be GATS and
GAM capable with the delivery of our first Block 20 aircraft and the first shipset
of weapons in June 1996. The full complement of 128 GAMs wiU be delivered by
March 1997.

Mr. Young. General, back to you.

C-17 MULTI-YEAR PROCUREMENT

(Chart No. 1) General Muellner. Sir, if .T could, I will go back
and start with the global reach area. The main area of emphasis
here I will talk about the C-17 program since there are a lot of
questions on this area. I will not talk about any of the others, but
if anybody would like, I can talk to the C-130 program at that
time.

(Charts 2 and 3) The key area with C-17 is indeed the move to-
wards multi-year. We moved from a competition between the C-17
and the nondevelopmental aircraft to a selection of a C-17 that
was then directed to pursue a multi-year program. The end result
of that is that with the addition of that last $896 million of savings
from the multi-year activity, we have saved $5.3 billion in that pro-
gram since it was restructured. So the competition, from NDAA,
the acquisition streamlining and then the multi-year brings consid-
erable savings that we can then plow back into our other mod-
ernization efforts.

Mr. Young. While you are talking about the C-17, we have ex-
pressed some concerns about this multi-year proposal in that it is
a 7-year multi-year contract and the savings that are projected are

295

about 5 percent. Our experience with multi-year contracts has been
a lot better than that.

In fact, the same contractor that is dealing with the C-17 did a
multi-year contract for us on the KC-10 and that was only a 5-year
multi-year, and we got about a 10 percent savings. Now we are
talking about a 7-year multi-year with only a 5 percent savings.
For those of us that look at the simple facts of dollars and cents,
we wonder why we can't get a little better deal? If we are going
for a 7-year multi-year, why can't we get up to the 10 percent sav-
ings that we get normally from a multi-year contract?

COST OF c-17 PROGRAM

(Chart No. 4) General MUELLNER. In reality we got to this point
by over the last two years here working that contractor very hard
to take cost and therefore price out of that program.

As you see, we went in a "should cost" of about $23.5 billion for
the remaining program. By working cost, by working acquisition re-
form, by tough negotiations with that contractor we drove that
down to $18.3 billion, so a considerable savings of $4.4 billion.
Then by going to the max affordable rate there is another benefit
of $1.2 billion going to that rate profile that we are talking about.
So this additional 5 percent is on top of 18 months to 2 years of
very, very tough negotiations with that contractor in order to drive
cost out of the program, and as a result of that to lower the price.

Mr. Young. During that period of negotiations was multi-year
ever a factor?

General Muellner. It was not a factor in these negotiations. It
became a factor as a result of the Defense Acquisition Board, DAB
decision that directed us last November to pursue multi-year op-
tions for either a max affordable rate or an 8 per year buy.

Mr. Young. I just always assumed that the Air Force always ne-
gotiated the best deal they could on any acquisition program and
then got additional savings for multi-year. What is different?

General Muellner. The difference is that this is a negotiated
contract, not just a cost estimate. We got to this point through very
tough negotiations with the contractor. This is not a government
cost estimate, or for that matter just a contractor. This is a nego-
tiated price.

Mr. Money. By going to multi-year, an additional $896 million
comes in.

Mr. Young. I understand that.

Mr. MURTHA. Will the gentleman yield? The baseline is from
what point? For instance, I remember when the program was start-
ed, the C-17 was going to cost an awful lot less. Wliat is the base-
line we are starting from here? It is like the old schedule; we are
right on schedule, but the schedule has been changed two or three
times.

General Muellner. Unit cost is an example of something we can
better identify with. We went from a $338 million an airplane for
the first 40 C-17s down to one that at this point in time is $173
million a copy for the next 80 C-17s.

Mr. MuRTHA. I am talking about the earlier estimates of this air-
plane in its conception period were substantially less than the $330
million per copy, if I remember.

296

General MuELLNER. I don't know what they were, sir.

Mr. MURTHA. The baseHne figure, then, that you are starting at,
whatever year that is, for the last 80 or 90 airplanes, is how much
per copy?

General Muellner. This number is the $338 million number
that we then bring down to the $173 million as you go through this
flow.

Mr. MuRTHA. It comes down from how much per airplane to how
much?

General Muellner. $338 million to $173 million. If you don't
have the multi-year it is $183 million.

Mr. Young. General, this Committee has always supported the
C-17 and this Committee has also been out front in urging the use
of multi-year contracting as a cost saver. So we have no problem
there. But we are concerned about the fact that we are only getting
a 5 percent reduction here when we normally get 10 percent.

It is our understanding that the contractor's first offer to the Air
Force was a 7-year multi-year with a 5 percent savings and it
sounds like the Air Force did not go back with an alternate or a
counteroffer, that you just took the contractor's first bid.

General Muellner. The negotiation process that occurred be-
tween here and there included all kinds of negotiations of offers
and counteroffers between McDonnell Douglas and the Govern-
ment. That was an 18-month effort to negotiate a fixed price con-
tract, and that is what we were tasked to take to the DAB, by the
way, which we did.

Mr. Young. When I asked the question if multi-year was a factor
during those negotiations, you said, no, it was not.

General Muellner. That is correct. We negotiated the best price
we could based upon legally what we could do. We didn't have the
authority to negotiate a multi-year agreement.

Mr. Young. Just let me ask one more question on this, and I
apologize for the interruption.

General Muellner. That is the reason these charts are here.

Mr. Young. We have looked at the possibility of a 6 year multi-
year as opposed to 7. Our staff convinces us that you could buy
those C-17s in a 6-year period and save another $330 million.

C-17 FUNDING REQUIREMENTS

(Chart No. 5) General Muellner. Absolutely. Here is the profile
I just described. The direction we had when we worked this profile
with the contractor was that we needed to stay within and under
the strategic airlift line. That was a direction from the Office of the
Secretary of Defense. So this was a constraint we had. The profile
that you are talking about violated that constraint, which is the
reason we didn't negotiate it.

Mr. Money. The blue area under the curve is what represented
the final negotiation, if we have the authority to go ahead with a
multi-year. So that is where that savings is. And all that was with-
in that envelope of the strategic airlift wedge. What you are asking
for will show here.

General Muellner. The profile will indeed save you an addi-
tional $330 million through this and has positive net present value.
The problem was that it required extra money in the front years

297

that we did not have within the strategic airUft Une. And that is
the reason this was not brought forward as one of the alternatives.

Mr. Young. When we got to the regular questioning period that
was going to be my first question. We agree with the Chiefs that
the President's procurement budget is not adequate. As we did last
year with a very strong spirit of cooperation between this Com-
mittee and the Air Force, we were able to add funding for your re-
quirements that were not funded in the budget.

Now, why wouldn't this fit in — we plan to do the same thing
again this year, by the way, because we think the President's budg-
et is inadequate when you are dealing with modernization and
near-term, and mid-term and long-term readiness. This might very
well fit into the category of unfunded requirements that would
have the effect of saving money for the taxpayer.

General Muellner. It will do that. It requires funds in both
1997 and 1998 over and above what is currently budgeted in order
to close on that particular profile, which is the one you referenced.

Mr. Young. Can you tell us what the additional funding require-
ment would be for 1997 and 1998?

General Muellner. It is roughly $300 to $350 million per year.

[The information follows:]

The fiscal year 1997 President's Budget fully funds the 7 year Multi-Year Procure-
ment. Any other procurement profile, for example, an annual buy or a 6 year Multi-
Year Procurement, would require additional funding. A six year Multi-Year Procure-
ment which procures 10 aircraft; in fiscal year 1997 and 12 aircraft in fiscal year
1998, could be funded in two ways:

—$402 million in fiscal year 1997 and $438 million in fiscal year 1998
— $893 million in fiscal year 1997, with a budget reduction of $53 million in
fiscal year 1998

Mr. Young. We would actually save one of those years by doing
this. The $331 million savings would take care of one of those fiscal
year increases?

General Muellner. No, sir. This $331 million, unfortunately, is
not recouped until the execution of the program, because what you
are doing with these accelerations is you are deleting the last year
of acquisition. You are rolling those five airplanes that bring you
up to 120, you are rolling those forward in production. So you are
avoiding costs in the outyears and your recovery is in the outyears.
It takes up-front investment to make that happen.

Mr. Young. The up-front investment would be recouped over the
life of the program to the tune of $33 1 million?

General Muellner. You are right. This approach clearly has a
positive net present value of doing that.

Mr. Young. In terms of a good friend of mine who once said that
is more than $100 a week. Go back to your charts.

(Chart No. 6) General Muellner. That is why these charts are
here.

Mr. Money. Depending on what alternative solution we are look-
ing at, we are talking an additional $250 to $400 million needed
in 1997, and $300 to $400 million needed in 1998. So that would
be the impact of rolling it forward depending on if you go 1, 2, 2,
or 2, 3.

General Muellner. That is the red area that you saw in the pre-
vious chart.

298

Mr. Money. I want to reiterate the original multi-year came be-
cause of the other constraints to stay within the funding profile
that we have in the top down.

F-22 AIRCRAFT PROGRAM

(Chart No. 7) General Muellner. I am going to move into the
air superiority area to talk about the F-22, and we understood
there were questions in the area of the airborne laser.

The F-22 is on track for first flight. It will fly May of next year.
The fuselage components, nose components, tail components are all
coming together at the three assembly facilities. They will go into
final assembly tooling this August at Marietta, Georgia. We have
five engines operating now of the test engines. We will have two
more by the end of May.

(Chart No. 8) The big thing that the F-22 brings us from the
standpoint of air superiority is the fact that when you gain the
stealth and supercruise, it gives you tremendous survivability to
operate across enemy territories. Coupled with the integrated avi-
onics, it gives situational awareness, the first look, first shot and
first kill. It also gives us capability in the case of the F-22 to em-
ploy the 1,000-pound JDAMs on the early days of a conflict should
the joint force commander want to do that. It will carry two 1,000-
pound weapons plus air-to-air weapons internally. Again, this pro-
gram is well on track.

(Chart No. 9) I want to cover two key areas that continually
come up on the F-22. One is, there has been a lot of discussion in
the press as to what the unit cost is on the F-22. You see numbers
ranging up to $160 million a copy. The flyaway cost, which is kind
of the sticker cost when you buy it, which includes the airplane,
necessary hardware and software et cetera, is $71 million. This is
in constant year 1996 dollars.

If you include in that all of the support equipment, training
equipment, factory support, et cetera, that will take it up, and that
is what is normally called unit procurement costs. That takes it up
to $87 million. Just for reference purposes, an F-15E today, a simi-
lar number here is about $53 million. Then if you just take the
total program cost and divide it by the number of airplanes we are
buying, that takes it up to what is normally called program acqui-
sition unit cost. Then you get $136 million a copy.

If you then inflate those in the outyears, inflating that $136 mil-
lion, that gets you up to that $160 million number. The number to
compare with in the case of other airplanes, F-15s, 16s, what have
you, is unit flyaway cost in constant year dollars. These numbers
have been held constant. The only changes have been here as a re-
sult of inflation changes.

(Chart No. 10) The other issue that is discussed frequently is the
issue of concurrency. Concurrency is the amount of overlap be-
tween your development and test program and when you start com-
mitting low-rate production investment. On the plus side if you
have a lot of concurrency, you get things to the field quicker, it
makes for a more efficient production as far as contractors starting
up production lines and being able to continue to deliver and not
having to stop.

299

The negative side is that with too much, you run the risk if you
identify a problem you have to go back and retrofit the earUer com-
ponents. Very Uttle concurrency, i.e., no overlap. You run into a
problem if it is a very long program with a decreasing vendor base
where your vendor produces a number of parts for you and you
don't come back for a number of years, and as a result they are
doing something else and you have considerable start-up costs. So
you run the risk of an increase in costs. You also run the risk of
obsolescent components where the industry has changed so much
in that time frame it is difficult to produce.

We had the Defense Science Board look at this, and their rec-
ommendation is as shown here. This program is less concurrent
than similar fighter programs and is certainly consistent with it in
the worst case. They also said we had a good risk mitigation plan
in place. It is an events-driven decision process. So until we verify
certain elements here we are not investing downstream.

Mr. Money. I think a number to remember is we will have deliv-
ered three aircraft by the time all the development testing is done,
and there will be roughly 40 in the production line.

AIRBORNE LASER PROGRAM

(Chart No. 11) General MUELLNER. The airborne laser is another
key program approaching a Demonstration Evaluation, DEM-VAL
phase. It is designed to counter theater ballistic missiles. Its main
benefit over ground, and for that matter other air-launched sys-
tems, is its speed of delivery. It delivers at the speed of light and
as a result of that, it allows us to close on enemy Scuds or other
missiles while they are over enemy territory. It is the only theater
missile defense concept that we are bringing forward that actually
has intercepts over the enemy's heads. As a result of that, there
is great benefit if you are countering area weapons or weapons of
mass destruction.

That particular program right now is in a competitive phase with
two contractor teams. The key technology facilitating this weapon
is adaptive optics that have been developed, and become a boon for
various observatories around the world. The optics allow us to cor-
rect and compensate for disturbances in the atmosphere.

The other part is evolutionary steps forward laser technology. We
already have components in airborne tests. We will move to build-
ing a demonstrator aircraft that will demonstrate all this before we
will go forward. The objective program here is to field a single
squadron of seven aircraft that would provide the orbits in a given
theater to protect you from theater missiles.

(Chart No. 12) I will talk about precision employment; i.e., air-
to-ground for a moment. The main — the F-22 fills in this role also,
but I will primarily talk about the F-16, F-15 and the joint strike
fighter and then get into the bombers.

F-15E AIRCRAFT PROGRAM

(Chart No. 13) In the case of the F-15E, our near-term objectives
here are to continue our acquisition of attrition reserve aircraft.
With your help we got six of those last year. This year we have
four in the budget and the Chief would like to move towards two
more. We need a total of 18 to balance out the force structure. F-

300

15E will be with us for a long time. It is with a well-performing
airplane, and the F-15E fleet was procured without any attrition
reserve aircraft. As a result of that, we need the attrition reserve.
Two things that we would like to do to this weapon system. One
is improve its survivability by giving protection against older Sur-
face to Air Missile, SAMS, if you will, the low band systems, which
is what this ALQ-35 will do. The other one is to give it connectivity
with the F-16, which is the standardized connectivity that we are
going to have between all of our joint forces.

F-16 AIRCRAFT PROGRAM

(Chart No. 14) The F-16, here we are talking about sustainment
airplanes. The primary closure on that is to give it connectivity
with the link 16 or the Multifunctional Information Distribution
System, MIDS is a joint program with the Navy and our allies.

JOINT STRIKE FIGHTER

(Chart No. 15) The Joint Strike Fighter is the airplane that will
replace the F-16 and become more the workforce of the Air Force
inventory in the outyears. The F-16 is our dominant player now.
It is structurally aging out and around 2010 will very dramatically
age out of the inventory. So we need this airplane on board. This
is a joint program with the Departments of the Navy, both the
Navy and the Marine Corps, and I might add the Royal Navy is
on board also. They brought a couple hundred million dollars to the
development side.

The key features of this, you see the three different competing
contractors offerings right now: Lockheed Martin, Boeing, and a
team from McDonnell Douglas, Northrop Grumman and BAE. The
Joint Strike Fighter will have enhanced survivability, range and
reduced logistics footprint, but the focus on this is affordability.
From the beginning that has been the mainstream of this program,
to produce an airplane that we could buy in the quantities we need
to fill out our force structures.

(Chart No. 16) The key elements of this program is the three
Services needs will be produced off a single production line. You
will have upwards of 80 percent commonality between the various
service products, although each will have unusual characteristics
and systems to support the specific needs of that service, for in-
stance, landing on a carrier or doing the vertical Harrier type activ-
ity. The Air Force mission is the lowest risk of all these, so as a
result of that, we are very optimistic that from these three com-
peting teams we are going to get a good product out of it.

The key element of the Air Force product is unit cost, and unit
flyaway cost is down in the $28 million a copy range or lower, de-
pending on which of the contractor teams you are talking about. So
this program seems to be moving along very well.

(Chart No. 17) The schedule for that program, we actually have
a Request for Proposal, RFP, on the streets right now. We are
going to go from three contractor teams to two contractor teams,
each of whom will build flying prototypes, and then we will down
select in the 2001 time frame to a single contractor that will build
the EMD production airplanes.

301

B-l AIRCRAFT PROGRAM

(Chart No. 18) I will talk a little bit about the B-l. We talked
to some of the issues with weapons integration. The two key ele-
ments on upgrading the B-l, we finally got smart. We got the Gov-
ernment out of the business of being the integrator on the B-l
after many years, and we have a single contractor, Rockwell, that
does integration of all systems on to the airplane.

We talked about the conventional weapons upgrades. Also in-
cluded is a defensive systems upgrade -which is a multiphased pro-
gram that past the turn of the century will give it good surviv-
ability on a conventional battlefield.

B-2 AIRCRAFT PROGRAM

(Chart No. 19) In the case of the B-2, we talked about some of
the weapons integration already. As you know, we are delivering
this airplane in three blocks. The ones we have out there are now
block 10 aircraft. Eventually they will be retrofit back to the block
30 configuration about the turn of the century time frame for all
21 of the aircraft.

There was a request made to take the 490 plus million dollars
that was in the budget last year and use that to take the test air-
plane that previously was not going to be retrofit to production con-
figuration, retrofit that so we will actually end up with 21 aircraft
in the inventory. That will come out in the block 30 configuration
at about the turn of the century.

JOINT DIRECT ATTACK MUNITION

(Charts 20 and 21) We have talked about the weapons, JDAM;
I am not going to talk much more about it. That is a weapon we
expected to cost in excess of $40,000 a round. The first round is
going to cost $18,000 and by the time we get done with this, our
average rounds are going to cost $14,000. So JDAM is a real suc-
cess story by going to commercial processes by allowing the con-
tractors to use commercial interfaces with the Government.

JASSM PROGRAM

(Chart No. 22) JASSM is the next one that is following in that
line. We will go from actually five contractors down to two contrac-
tors here the end of June of this year. We will actually get into a
competitive DEM-VAL program.

(Chart No. 23) This is a layout of what our outyear strategy is,
if you will, for filling our various needs for precision weapons. In
the short range we talked about with Congressman Dicks, the
wind-corrected munition dispenser is important. In the precision
range, we have upgrades to the JDAM to provide acccuracy, and
laser-guided bombs. You move out in range to where the JASSM
fills our need and the Navy's need for long-range standoff surviv-
ability and precision kill capability.

SPACE PROGRAMS

(Chart No. 24) I will talk a bit about the space side. Key pro-
grams here obviously is our Military Surveillance and Target At-
tack Radar Systems, MILSTAR, on the communications side. I

302

won't talk about GPS, but the GPS program is a real success story
also, taking about $80 million out of it just by going to specific con-
tractors and giving them total responsibility. I will talk about the
space-based IR system, and the Evolved Expendable Launch Vehi-
cle, EELV, which is our new launch vehicle.

(Chart No. 25) These are MILSTAR communications satellites
providing secure survivable communications for our warfighters.
We have two satellites up right now. We are building towards a
larger constellation. The key part of that is by giving a single con-
tractor total system responsibility and holding him accountable, we
are able to save almost $580 million in that program. So there is
real benefit for moving towards this more commercial-like ap-
proach.

(Charts 26 and 27) Space-based IR is the replacement program
for our defense support program, which provides us warning of
missile attack either on the continental United States or in our
overseas deployments as it did during Desert Storm. The replace-
ment program is an architecture that includes four geosynchronous
satellites, two high earth orbiters, and a constellation of up to 24
low-earth orbiters.

We are on schedule. The schedule has us delivering the first of
the replacement satellites just after the time frame we launch our
last Defense Support Program, DSP, which is just after the turn
of the century.

As we were directed by Congress last year, we have accelerated
the low-earth orbiting capability. We have moved that to the left
in order to have that capability out there much earlier than 2006,
in the 2002 time frame. We have a program structured to do that.
We will fly a demonstrator in the 1998 time frame of that capa-
bility.

(Chart No. 28) Finally, I think a program that is really important
to us not only from a military perspective, but commercially, even-
tually is the Evolved Expendable Launch Vehicle. The primary
focus is to drive down the cost of getting into space. It will eventu-
ally replace the Titsm, Delta and Atlas series launch vehicles and
its main objective is to reduce the cost by anywhere from 25 to 50
percent. That program is in a competitive phase now with four con-
tractors. We will go to two here in the November 1996 time frame,
and eventually to one, with the first of the medium launch vehicles
occurring in the 2002 time frame, the first of the heavy launch ve-
hicles in 2005.

AIRBORNE WARNING AND CONTROL SYSTEM (AWACS)

(Charts 29 and 30) I will cover two of the main programs here,
that being the AWACS program and the JOINT STARS program.

In the case of AWACS, we are just finishing the block 30-35 and
the radar sensitivity improvement upgrades which gives us new
computer capability and significantly improved radar to deal with
LO-type targets. We are also driving the system to an open system
architecture so we can bring in more commercial-like products.

The rest of these are things that I think you have seen on our
Chiefs list and the Secretary's list of things we would like to do
that are currently below the line. EXTEND SENTRY is a reliability
and maintainability improvement. And then finally, it is a case of

303

reengining the airplane. The engines on this are getting difficult to
support. They continue to operate fine, but are expensive to sup-
port.

JOINT STARS

(Chart No. 31) In the case of JOINT STARS, this airplane is
about to come back from its second deployment. We had one during
Desert Storm. We just accepted our first production airplane here
last Friday. We were producing two of those, procuring two a year.
We would like to try to accelerate that, and I think the Chief has
identified that as his highest priority because it is very high on the
warfighters' list.

SCIENCE AND TECHNOLOGY

(Chart No. 32) Last is where we are at on the S&T side. We have
a balanced program to the tune of about $1.3 billion a year. We end
up contracting about 80 percent of that oiit to industry and to aca-
demic institutions. Our main focus in the 1997 time frame are in
these six areas here. These are driven by shortfalls we have in, for
instance, aging aircraft, all the way up to things that have been
identified in the area of hypersonics as being very leveraging.

(Charts 33 and 34) New World Vistas, that is a year-long effort
that was run by our Scientific Advisory Board that provides us
great guidance of what technologies we need to push to get to the
21st Century.

It is interesting, that Scientific Advisory Board recommendation
for New World Vistas not only told us what we should be doing to
get there, but also gave us specific guidance of what we should di-
vest of, what we are investing in that is being better done by the
commercial marketplace or will be done by the commercial market-
place. Right now our technology executive officer responsible for
executing the S&T program is meeting in the middle of April, and
will have specific recommendations of what we are going to divest
of and refocus on the higher priority technologies.

(Chart No. 35) Sir, that concludes all the charts. We will be glad
to answer whatever questions you might have.

[Clerk's note. — The charts referred to by General Muellner fol-
low:]

304

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339

Mr. Young. Mr. Murtha.

ACQUISITION REFORM SAVINGS

Mr. MuRTHA. I keep hearing, I guess from the briefer who was
going to school there and from all departments, we are hearing sav-
ings from acquisition reform, Base Realignment and Closure,
BRAC savings and we are hearing stability. But we are not hearing
any numbers. For instance, you keep telling us you have acquisi-
tion savings and you appreciate our cooperation and everything,
but I never see a figure on how much money we are saving. I keep
hearing you talk about how much we are saving, but I never see
any figures. Are there figures that you can show us how much
money you have saved in acquisition reform?

Mr. Money. Yes, sir. There is a package of program by program,
which will talk about how much has been saved by program to
date, but more importantly how much is in cost avoidance in the
future. To date, approximately $13 billion in a cost avoidance sense
has been the result of acquisition reform to date, and that number
is growing daily.

Mr. Murtha. That is just the Air Force?

Mr. Money. Yes, sir.

Mr. Murtha. And BRAC savings?

Mr. Money. I don't know, sir. That is not in my area of responsi-
bility but we will be glad to get that for you.

[The information follows:]

Most of the BRAC savings will resvilt from cost avoidance related to military con-
struction projects required prior to base closures, reductions in military and civilian
personnel as well as base operations and maintenance activities. Air Force cost
avoidance and savings to date have been approximately $3 billion. If we were to net
these savings against the up front cost to close or realign our bases the "net sav-
ings" through fiscal year 1996 would be $726 miUion. This amount would start to
grow more rapidly in future years because we have already incurred most of our
up front costs.

General Muellner. We have left the package with you and your
staff.

ACQUISITION PROGRAM STABILITY

Mr. Murtha. Stability is the other thing. I talked at length with
some people from General Dynamics and they were telling me how
they had been able to improve their systems even with less buys.
In other words, no longer were they focusing on buying the num-
bers; they were focusing on savings on the numbers they are build-
ing and they are being very successful with it. Yet I hear you talk
about stability which they say is the key, and yet we are only get-
ting 5 percent savings in the C-17 program. You gave a figure on
the F-22, $28 million starting out.

General Muellner. That was the Joint Strike Fighter.

Mr. Murtha. That is the kind of figure I saw on the C-17 ini-
tially. It wasn't $28 million. It was like $117 million or something
like that. Then the figures go all over the place. Then you come
back and start at this real high base and tell us how much you
save.

I get concerned when I keep hearing a figure like this. That is
in the record. We can see how much they projected initially, but I

340

wish you would dig out what they said for the C-17 initially when
they first proposed it to Congress, which was 20 years ago, and tell
us what that would cost and see how much you would save fi^om
that figure knowing that was just an initial projection.

Mr. Money. We will be glad to do that and get it back to you.

[The information follows:]

Table 1 depicts the change in the estimated flyaway price of the C-17 aircraft
from 1983 to the present. Unit price has natvirally increased as the quantity and
maximum rate of production have decreased. When expressed in Then Year dollars,
unit price has also increased as the program was stretched out. This trend, however,
was reversed in 1995, with unit price (expressed in constant dollars) decreasing
from the last year in which we had a formal 120-aircraft program estimate (1993),
due to aggressive cost reduction initiatives, competition, and the proposed multiyear
procurement. This price improvement occurred despite a reduction in maximum pro-
duction rate and the addition of performance enhancements in the revised flyaway
estimate.

TABLE 1.— C-17 COST HISTORY— TOTAL PROGRAM

n,„ Flyaway price (BY81$M) unit flyaway .„ m ,,rrr,« Final year of Maximum rate

""'^ —i^,^ ;;;;;;— m^mw "o. of aircraft ^[^ ^^^^^

December 1983 14,288 68.0 144.5 210 98 29

December 1985 13,922 66.3 119.3 210 98 29

December 1989 15,421 73.4 143.8 210 99 29

December 1990 12,595 105.0 209,9 120 99 18

December 1993 14,914 124.3 240.8 120 01 16

December 1994 7,053 176.3 324.0 40 96 8

December 1995 14,270 118.9 244.9 120 03 15

Notes: (I) FY81 base-year dollars are used for consistency of comparison and to eliminate inflation effects. Then Year (TY) dollars are af-
fected by variations in inflation estimates. (2) Decrease In number of aircraft from Dec 89 to Dec 90 reflects decision of DoD Apr 90 Major
Aircraft Review (MAR). (3) Decrease In number of aircraft from Sep 93 to Dec 94 reflects decision of the Nov 93 Defense Acquisition Board
(DAB). (4) Increase in number of aircraft from Dec 94 to Dec 95 reilects decision of the Nov 95 and Jan 96 DABs, including the multi-year
procurement (MYP) proposal.

Source: Selected Acquisition Reports.

The cost reduction measures we have undertaken over the past 2 years have af-
fected the cost of the last 88 aircraft of a 120-aircraft C-17 buy. The procurement
cost of these 88 aircraft was baseUned in early 1995 by a Should Cost Review, while
the Air Force was stiU formally reporting the price of a 40-aircraft program (due
to a cap on the program). With this Should Cost baseline as a reference, we have
achieved over 20 percent savings through acquisition reform and competition, and
almost 7 percent savings from accelerating the procurement rate. With multiyear
procurement, we will achieve an additional 5 percent savings, lowering the average
unit flyaway price for the last 80 C-17s to $173 million (FY96$) or $208 million
(TY$).

Mr. Money. I might add that the $338 million number, that is
no longer an estimate. That is a real number and what we are
going to — the $173 million, we believe, is a very hard number in
that we have firm fixed-price contracts being signed for that num-
ber. That is on the C-17. We further

Mr. MURTHA. I thought you were

Mr. Money. I was responding to your point on the C-17 where
the $338 million number is an actual number today. We have hard
data on that and we are going to $173 million.

Mr. MuRTHA. That is a flyaway number?

Mr. Money. Yes. That is a firm fixed-price number. In the out-
years part of the multi-year we also intend to incentivize the con-
tractor to drive that number even lower.

Mr. MuRTHA. With the F-22, is that figure a firm figure also?

341

General Muellner. We have not signed a contract for F-22 pro-
duction. The $71 million number is the unit flyaway cost prediction
for that airplane in 1996 dollars.

Mr. Money. We haven't completed building one yet so we are a
little early on getting an actual number.

Mr. MURTHA. That is all I have.

UNFUNDED REQUIREMENTS

Mr. Young. Last year the Air Force was very cooperative in help-
ing us identify unfunded requirements. We were able to save con-
siderable money by accelerating some of the programs. Contrary to
a lot of opinion that has been suggested in various debates, these
were not programs that some Member of Congress wanted, but we
actually cooperated with the services to see what their require-
ments were.

We would probably be able to do the same thing this year. So I
would ask you, to provide us a list as you did last year of your un-
funded requirements in the priority of importance to the Air Force,
and some indication of how much we might be able to save if we
were able to accelerate the funding for those programs. That would
be very helpful to us as we prepare our fiscal year 1997 appropria-
tions bill.

[The information follows:]

Our current list of unfunded requirements is based principally on meeting mod-
ernization requirements, not on potential savings. Priority was given to moderniza-
tion programs. For example, funding for F-15E, F-16, 60K Loader and Precision
Gviided Munitions increases the current programs, providing us required capabilities
and begins to remedy projected shortfalls in aircraft and weapons. If provided addi-
tional funds, we would accelerate procurement of systems such as JSTARS and
JPATS (See attached list). Of course, some cost savings associated with inflation are
realized by purchasing these items earlier. In general, however, the emphasis was
on capability rather than cost avoidance.

342

FY97 Plus-up Priorities List ($I\A)

Asol: n Marts

FY97 FY98 FY99 FYOO FY01 Total

JSTARS 460.0 0.0 0.0

Procures two a/c In FY 97 and additional O&M support In FY 01
F-15E 152.9 297.1 0.0

FY 97 includes 2 F-15Es and long lead Items lor 6 F-15Es in FY 98 l*4a.8Ml
F-16 59.4 146.3 151.6

FY 97 Includes 2 F-ies and long lead Items lor 6 F-ISs In FY 98 l«10.0IVII
GPS Space Segment 10.1 20.0 40.9

35.0

35.9

Increases Initial procurement rate for GPS IIF from 2 to 3 in FY97; and 1 to 3 In FY98/00/01

52.8

141.9

403.6

277.0
6.8

0.0

5 AWACS Extend Sentry 72.5 93.0 78.3 107.0

Extends AWACS to 2025. Renovates airframe, avionics and other aircraft systems

6 AWACS ReEngine 109.0 247.0 254.0 266.0

Reenglnes all 33 U.S. AWACS between FY98-03

7 RC- 135 ReEngine 146.2 124.5 133.3 136.1

Completes RC-135 reenglnlng (Z/6/5/5/5 kits per year). Installation complete In FY 02

8 Link 16 73.9 173.1 110.0 56.0

Senior Span; Senser-toshooter/Link 16 on F-16 and F-15E. RJ fleet. B-1 and terminals in Mod Air Ops Center

9 C 130J 408.5 299.2 305.5 404.9 327.7 1.745.8

Procures 6/6/6/6/6 a/e & associated support equipment. Buys ABCCC. WC-130 & EC-130 & tmg assets

10 Precision Guided Muns 114.6 121.1 166.B 188.7 194.3 785 2

Funds SFW/P3I. JA5SM w/ B-1 & B-2 Integration. JDAM bodies & kits. CALCM. GBU-Z8 & ASM- 130

11 60K Loader 23 1 24.3 12.3 9.8 -IB

Procures 20 add'l loaders in FY97 & 15 in FY98. Continues economic procure rate to prog completion

12 Airlift Defensive Sys 22.3 25 1 17.2 0 0 0 0

Completes installation of Airlift Defensive Systems on C-130 aircraft. Inlcuding ANG & AFR

13 JFACCSit AwareSysiJSASI 9.6 2.8 2.8 2.8 2.8

Provides JSAS capability to NAF/CC's atrd selected joint force commanders for battle space awareness

14 JPATS 19.4 11.6 45.5 B6.6 93.2

Buys out JPATS procurement In FY 04 vies FY 09 122/40/60/80/60/60 vs 18/1 8/24/30/36/36)

15 Replacement Vehicle Eqp 140.0 205.0 186.0 195.0 220.0

Six year fix of vehicle program to fin shortages and replace aging mission critical vehicles

16 C-5Mods 2.1 33.6 15.0 -4.9

FurKfs criticsl C-5 mods: engine, aulopHot, tires, APU, GPS. MADARs, SELCAL. etc

17 nc-135(HJ-15/16)Modlflcallon 83.7 0 0 0.0 0.0

Permits simultaneous modification of a/c. Delivery of 2nd a/c accelerated from FY 01 to FY 99

18 Band 1.5 17.0 24.1 108.9 94.4 92.8

Funds ECM Band 1.5 for F-15E fias ACC. PACAF & USAFE commander's support

19 Theater Missile Defense 66.5 69.1 68.7 41.5 0.0

Funds Combat Integra Capaballity. fU medium wave IR Acq. and F-15E TMO Eagle & Sensor Mods

0.0

1.153.0
545.9

412.0

67.9

64.6

20.7

256.3

945.0

45.8

63.7

337.2

245.8

20 Theater Oeployabia Comm 70.3 74.9 81.0

Dccraaaas eirlilt requrramont to meet two MRC objective

21 Base Info Infrastructure 76.5 75.1 77.1

Infrastructure upgrades to 44 bases (FY 97-8; 98-8: 99-10; 00-11; 01-7)

22 Abn Comm Integration/Equippage 12.0 10.0 10.0

Provides comm/ground integration lor CINC support aircraft

88.6

93.2

408.0

343

FY97 Plus-up Priorities List ($M)

At of : 13 MMr 95

Pri TITLE

FY97 FY98 FY99 FYOO FY01 Total

23 PW-220t Engin* 47.0 94.0 95.9 47.9

Mod* older F-16A-D engines (F100-100 to -220EI in PACAF ind USAFE 16 Sgdni)

24 Hounng (Dormsl 192.0 168.0 129.0 100.0

Buy* out permanent party central latrines by FY 98. Kaasler dorms, and begins buying out deficit
26 Information Protection 81.0 67.5 8.5 0.0

Provides Initial base level information protection for unstructured ttireet.

26 Tuition Assistance 9.6 14.2 16.0 16.1

FaHy supports 76% tuitron teirrtfotnseinertt rate

27 Housing (IMFH I 143.5 157.9 149 6 163.0

Eliminates inadequate housing over 20 year period/stops growtti of deferred inx

28 MILCON 155.0 279.0 1690 160.0

Provides funding to correct additional CFA deficiencies

29 OAMA 21.2 45.6 67.3 64.0

Funds secure voice and UHF SATCOM for 73 AF80C and 33 AMC sircralt

30 A- 10 Training Device 9.6 7.8 8.1 0.0

Funds A-10 unit-level low cost simulator capabllty (no sIm currentlyl

31 KC-10/KC-136SimUpgr 63.0 0.0 0 0 0.0

Accelerates upgrade of KC-10/KC-135 visual and motion systems
TOTAL

96.0

675.0

eficit.

0.0

147.0

17.7

72.B

176.4

790.4

137.0

900.0

46.3

234.4

0.0

25.S

0.0

63.0

2.840.3 2.890.9 2.496.0 2.518.0 2.127.5 72.872.7

344

Mr. Money. The Chief of Staff has a prioritized Hst. We will be
glad to furnish that to you.

Mr. Young. We asked him for it this morning. I figure if we ask
you, too, we will be sure to get it.

Mr. Money. You will get two copies.

Mr. Young. Mr. Nethercutt.

AIRBORNE LASER PROGRAM

Mr. Nethercutt. Thank you, Mr. Chairman. I am sorry I am
late. Gentlemen, welcome. To the extent that I am repeating for-
give me. I wanted to talk with you about the airborne laser, how
much is budgeted for developing the airborne laser and what
projects will the funding support? Could you identify that?

General Muellner. The current number, and we will dig out the
exact number, is about $750 million budgeted to support that. That
will take us through the demonstrator phase. So we will actually
produce a flying demonstrator that will demonstrate not only the
optics, the beam control and the laser generation itself, but will
also give us a residual capability to use it in combat operations as
we move forward to build production.

The key technologies that are involved in the program are kind
of threefold. One is the adaptive optics. We have made great ad-
vances in this. I would encourage you if you have the opportunity
to visit Kirtland Air Force Base, there is a range down there called
the Star Fire Range, which demonstrates these optics. These have
been exported to observatories in the U.S. and do unbelievable
things.

The second area is in atmospheric compensation and under-
standing what the anomalies are in the atmosphere. We have a fly-
ing demonstration right now measuring those things.

Third is the laser energy. Generating that amount of laser en-
ergy and then being able to direct it. The beam control and laser
generation are being demonstrated first in ground demonstrations
and then will be demonstrated in this aircraft which is a 747-400
airplane.

Mr. Nethercutt. When will the technology, the beam control
and laser energy technology, be completed or operational? What is
your estimate?

General Muellner. We have specific milestones. The actual air-
borne demonstrations themselves will occur in 2001 and 2002. The
ground demonstrations will actually occur before then.

JOINT STRIKE FIGHTER ENGINES

Mr. Nethercutt. Okay. I want to ask you about Joint Strike
Fighter engines. The language in our report for fiscal year 1996 ex-
pressed some concern about all three contractors using the same
engine for the Joint Strike Fighter. What long-term strategy do you
have? What is your advice with regard to making the engine issue
competitive?

General Muellner. If you would pull out the chart. This is a
personal item of interest with me since I directed that program up
until 6 months ago. From the very beginning we wanted to pursue
a competitive strategy for the engine, but we didn't want the two
contractor teams to be burdened with that. So we used as our

345

model the most successful example of a competitive engine strategy
we have, which was a competition between Pratt and General Elec-
tric for the 100, 110 family. In that case, the Pratt & Whitney F-
100 engine was the leader in the F-15 and later we brought the
General Electric F-110 along to compete with it. The competition
considerably benefited the Government from the standpoint of per-
formance enhancements and also improved costs and warranties.
We have done the same thing with the Joint Strike Fighter JSF
program.

This is the F-119 engine chart. What we have done is we are de-
veloping a General Electric competitive engine which we will enter
against the Pratt & Whitney F-119 engines variant in EMD. Dur-
ing the demonstration phase which starts the latter part of this
year, all three contractors will fly with a F-119 variant, which is
a proven engine on the F-22 program.

In EMD and follow-on production we will continue to compete
that Pratt engine with the General Electric engine. That has been
our strategy from the beginning of this program. The contractors
were the ones that chose the F-119 as the low-risk way of getting
out to this point in time.

Mr. Nethercutt. That makes sense probably. I have taken a
special interest in that fight. It seems like from a capability stand-
point and from a cost standpoint it has tremendous advantages to
us in the future.

General MUELLNER. It is great benefit because of working the
cost hard, keeping focused on that. All three of these contractor
teams have made great strides in very innovative applications of
cost savings technologies.

Mr. Nethercutt. Thank you.

Mr. Young. Thank you very much. Mr. Money and General
Muellner and General Haines, thank you very much for being here
today.

Mr. Money. My staff tells me I misspoke on the F-22. When I
talked about three aircraft being delivered, that is after develop-
mental tests. I wanted to make sure that is on the record so I
didn't mislead you.

Mr. Young. You will have an opportunity to review the record,
of course. That was my last point. I have additional questions that
I would like to submit in writing and ask that you respond to them
for the record.

Thank you for being here. It was a very interesting hearing. At
this time the Committee will be adjourned.

[Clerk's note. — Questions submitted by Mr. Young and the an-
swers thereto follow:]

Modernization shortfalls

Question. The Air Force's fiscal year 1997 budget requests $28.9 billion for Air
Force procurement and R&D. This is nominally a 3.3 percent increase over the fiscal
year 1996 appropriated amount, but in effect virtually the same amount as fiscal
year 1996 and 1995 when taking inflation into account. The ftinding provides for
only 19 new combat aircraft and 1070 missiles. These amounts represent some of
the smallest acquisition totals since the Air Force became an independent service.
In fact the amount of funding the Air Force has requested for aircraft in fiscal year
1997 is less than that requested by the Navy. Mr. Money, is the Air Force's fiscal
year 1997 modernization adequate?

346

Answer. Fiscal year 1997 modernization funding is generally adequate to meet
currently projected requirements and Air Force modernization objectives. We do
have unfunded requirements in fiscal year 1997-2001.

Question. What is the risk to the readiness of the Air Force of such low procvire-
ment rates of Eiircraft and weapons?

Answer. We use a balanced, time-phased approach to modernization which allows
us to modernize without sacrificing current readiness. We view readiness as both
near-term force preparedness and ensuring our forces have the most modem and
capable equipment in the future. However, there is some risk, and we have postured
ourselves to reduce this risk if additional funds become available. In fiscal year 1997
our top ten priorities include the following aircraft and weapon procxirements; two
additional JSTARS aircraft, two additional F-15Es and F-16s, six C-130Js, and ad-
ditional precision guided munitions.

Question. What major requirements are not funded in fiscal year 1997?

Answer. These requirements, identified in the CSAF's fiscal year 1997 Plus-up
Priority List, if funded, would result in increased operational capability. Among the
highest priority of these are:

• Procurement of two more JSTARS

• Procurement of two F-15E and two F-16 aircraft in fiscal year 1997 with long
lead for 6 additional each

• Procxirement of three additional GPS IIF sateUites within fiscal year 1997-2001

• Programs to reengine AWACS aircraft and extend their life through 2025

• Completion of RC-135 reengining by fiscal year 2002

• Procvirement of the Link 16 (sensor-to-shooter)

• Procurement of additional C-130J aircraft

• Additional procurement and integration of Precision Guided Munitions.

In addition, we have recently identified an unfunded priority to procure and in-
stall GPS equipment. This includes interim GPS systems which are handheld units
with appropriate displays for aircraft awaiting permanent installation. For the 89th
Airlift Wing this accelerates GPS and installs flight data recorder/cockpit voice re-
corder on assigned aircraft. Distinguished Visitor, and Operational Support Airlift
aircraft. It also installs traffic alert and collision avoidance system, emergency loca-
tor transmitter, and ground proximity warning system on 89th Airlift Wing assigned
jiircraft to include Distinguished Visitor, and Operational Support Airlift aircraft.
Finally, accelerates GPS on all Air Force passenger carrying aircraft not designated
as 89th Airlift Wing, Distinguished Visitor, and Operational Support AirUft aircraft.

Question. Are your top modernization programs fully funded in fiscal year 1997?
Are they optimally funded in the accompanying years of the future years defense
plan?

Answer. Fiscal year 1997 modernization funding is generally adequate to meet
ciurently projected requirements and modernization objectives. Our top moderniza-
tion priorities are:

• Near term C-17

• Mid-term focus on conventional bomber and smart munitions upgrades

• Long-term priority is fighter modernization, beginning with the F-22

• Space Based Infrared Systems (SBIRS) and Evolved Expendable Launch Vehi-
cle (EELV)

Question. What are the main industrial base problem areas in the Air Force?

Answer. From a readiness standpoint, the industrial base has the abiUty to supply
and equip the force structure for the near future. The Air Force to date has not en-
countered any major industrial base problems.

The U.S. Air Force uses an OSD developed process to determine essential, unique
and endangered capabilities and the best course of action to take should a capability
be at risk.

Selected industry assessments have been conducted to determine jeopardized ca-
pabilities. We are currently working with OSD on assessing the microwave tube in-
dustry and radiation hardened electronics.

From a business standpoint, the reduced DoD requirements cause us to be in-
creasingly dependent on single sources. This has the potential for increasing prices
and lead times. Therefore, we are working with our industrial partners to research
and identify methods to decrease costs and improve industry's flexibiUty and, thus,
shorten lead times.

Additional Funding

Question. Last year the Air Force was candid about identifying your top unfunded
requirements to the Committee and working with us to provide additional funding
for many of theiyi. We hope that you will continue your cooperation with us. Mr.

347

Money, would you please describe the top unfunded Air Force priorities and why
the fiscal year 1997 budget is not sufficient in these areas?
Answer. Oiu- top unfunded requirements are:

• Proctu"ement of two more JSTARS

• Procurement of two F-15E and two F-16 aircraft in fiscal year 1997 with long
lead for 6 additional each

• Procurement of 3 additional GPS IIF satellites within fiscal year 1997-2001

• Programs to reengine AW ACS aircraft and extend their life through 2025

• Completion of RC-135 reengining by fiscal year 2002

• Procurement of the Link 16 (sensor-to-shooter)

• Procurement of additional C-130J aircraft

• Additional procurement and integration of Precision Guided Munitions.

In addition, we have recently identified an unfunded priority to procure and in-
stall GPS equipment. This includes interim GPS systems which are handheld units
with appropriate displays for aircraft awaiting permanent installation. For the 89th
AirUfl Wing this accelerates GPS and installs flight data recorder/cockpit voice re-
corder on assigned aircraft. Distinguished Visitor, and Operational Support Airlift
aircraft. It also installs traffic alert and coUision avoidance system, emergency loca-
tor transmitter, and ground proximity warning system on 89th Airlift Wing assigned
aircraft to include Distinguished Visitor, and Operational Support Airlift aircraft.
Finally, accelerates GPS on all Air Force passenger carrying aircraft not designated
as 89th AirUft Wing, Distinguished Visitor, and Operational Support Airlift aircraft.

Our fiscal year 1997 budget balances time-phased modernization, readiness and
quality of life for our personnel. In order to maintain a balanced program, we could
not afford the items on the fiscal year 1997 Plus-up Priority List and stay within
the Air Force topline. This list places emphasis on modernization programs and be-
gins to remedy projected shortfedls in aircraft and weapons.

Question. What are the potential savings if the Congress were to provide addi-
tional funding in fiscal year 1997 for these items, either by buying them earlier than
now planned or production unit costs? Please provide the costs and savings for the
record.

Answer. Otu* current Ust of unfunded, requirements is based principally on meet-
ing modernization requirements, not on potential savings. For example, fiinding for
F-15E, F-16, 60K Loader and Precision Guided Munitions increases the current
programs, providing us required capabilities and begins to remedy projected short-
falls in aircraft and weapons. However, if additional dollars are provided, we would
fund items on the fiscal year 1997 Plus-up Priorities List which may not result in
direct financial savings (See attached list). Purchasing these items earlier does af-
ford some cost savings associated with inflation. In general, however, the emphasis
was on capabUity rather than cost avoidance.

348

FY97 Plus-up Priorities List ($M)

A»oi:13Mar96

Pri TITLE

FY97 FY98 FY99 FYOO FY01 Total

0.0

JSTARS 450.0 0.0

Procures two a/c in FY 97 and additional O&M support in FY 01
F-15E 1S2.9 297.1 0.0 0.0

FY 97 includas 2 F-ISEs and long lead items for 6 F-ISEs in FY 98 ($48.8M)
F-ie 59.4 146.3 161.6 172.7 1

FY 97 includes 2 F-16s and long lead items for 6 F-IOs In FY 98 ($10.0MI
GPS Space Segment 10.1 20.0 40.9 35.0

Increases initial procurement rate for GPS IIF from 2 to 3 in FY97; and 1 to 3 in FY98/00/01

466.0

52.8

403.6

6.8

0.0

5 AWACS Extend Sentry 72.S 93.0 78.3 107.0

Extends AWACS to 2025. Renovates airframe, avionics and other aircraft systems

6 AWACS ReEngine 109.0 247.0 2S4.0 266.0 277.0 1,153.0

Reengines alt 33 U.S. AWACS between FY98-03

7 RC- 135 ReEngine 145.2 124.5 133.3 136.1

Completes RC-135 reengining (2/6/5/5/5 liits per year). Installation complete in FY 02
Linic 16 73.9 173.1 110.0 55.0

Senior Span: Sensor-to-shooter/Unk 16 on F- 16 and F-15E, RJ fleet, B-1 and terminals in IVIod Air Ops Center
C-130J 408.5 299.2 305.5 404.9 327.7 1.745.8

Procures 6/6/6/6/6 a/c & associated support equipment. Buys ABCCC, WC-130 & EC- 130 & tmg asseu

10 Precision Guided Muns 114.6 121.1 166.5 188.7 194.3 785.2

Funds SFW/P3I. JASSM w/ B-1 & B-2 integration. JDAM bodies & kiu. CALCM. GBU-28 & AGM-130

11 60K Losder 23.1 24.3 12.3 9.8 -1.6

Procures 20 add'l loaders in FY97 & 15 in FY98. Continues sconomic procure rate to prog completion

12 Airiift Defensive Sys 22.3 25.1 17.2 0.0 0.0

Completes installation of Airlift Defensive Systems on C-130 aircraft, inlcuding ANG & APR

13 JFACC Sit Aware Sys IJSASI 9.5 2.8 2.8 2.8 2.8

Provides JSAS capability to NAF/CC's and selected joint force commanders for battle space awareness

14 JPATS 19.4 11.6 45.5 86.6 93.2 256.3

Buys out JPATS procurement In FY 04 vice FY 09 I22/4O/60/60/60/6O vs 18/ 18/24/30/36/36)

15 Replacement Vehicle Eqp 140.0 205.0 185.0 195.0 220.0 946.0

Six year fix of vehicle program to fill shortages and replace aging mission critical vehicles
16C-6Mods 2.1 33.6 15.0 -4.9

Funds critical C-5 mods: engine, autopilot, tires. APU. GPS. MADARs, SELCAL, etc

17 RC-13S(RJ-1 5/1 6) Modification 63-7 0 0 0.0 0.0

Permits simultaneous modification of a/c. Delivery of 2nd a/c accelerated from FY 01 to FY 99

18 Band 1.5 17.0 24.1 108.9 94.4 92.8 337.2

Funds EClVI Band 1.5 for F-1SE has ACC, PACAF & USAFE commander's support

19 Theater Missile Defense 66.5 69.1 68.7 41.5 0.0 245.8

Funds Combat Integra Capabaility. RJ medium wave IR Acq, and F-15E TMD Eagle & Sensor lUods

0.0

545.9

412.0

67.9

64.6

20.7

45.8

63.7

74.9

81.0

20 Theater Deployable Comm 70.3

Decreases airiift requirement to meet two MRC objective

21 Bass Info Infrastructure 76.5 75.1 77.1

Infrastructure upgrades to 44 bases (FY 97-8; 98-8; 99-10; 00-11; 01-7)

22 Abn Comm Integration/Equippage 12.0 10.0 10.0

Provides comm/ground integration for CINC support aircraft

88.6

93.2

408.0

349

FY97 Plus-up Priorities List ($M)

At of : 13 Mar 96

Pri TITLE

FY97 FY98 FY99 FYOO FY01 Total

0.0

23 PW-220E Engbw 47.0 94.0 95.9 47.9

Mods ol<tor F-15A-0 angine* (F100-100 to -220EI in PACAF and USAFE 16 Sqdns)

24 Hounng (Dorms) 192.0 158.0 129.0 100.0 96.0

Buys out pamninont party central latrines by FY 98, Kaaslar dorms, and btgins buying out daficit,

25 Iniomiatkin Protection 81.0 57.5 8.5 0.0 0.0

Provides initial base level information protection for unstructured threat.

26 Tuition Assistance 9.5 14.2 1B.0 16.1 17.7

Ftjiy supports 75% tuition reimbursement rate

27 Housing (MFH) 143.5 157.9 149.6 163.0 176.4

ESminstea inadequate housing over 20 year period/stops growth of deferred mx

28 MILCON 155.0 279.0 169.0 160.0 137.0

Provides funding to correct additional CFA deficiencies

29 DAMA 21.2 45.6 57.3 64.0 46.3

Funds secure voice and UHF SATCOM for 73 AFSOC and 33 AMC aircraft

30 A- 10 Training Device 9.6 7.8 8.1 0.0 0.0

Ftmds A-10 unit-level low cost simulator capability (no sim currendYl

31 KC-10/KC-135 SlmUpgr 63.0 0.0 0.0 0.0 0.0

Accelerates upgrade of KC-10/KC-135 visual and motion systems
TOTAL

284.8
67S.0
147.0
72.5
790.4
900.0
234.4
25.S
63.0

2.840.3 2.890.9 2,496.0 2.518 0 2.127.5 12.872.7

350

Aircraft Force Structure

Question. The Bottom-Up Review sets a requirement of 20 Tactical aircraft wings
for the Air Force to successfully support two major regional conflicts (MRCs). Given
the Air Force's recent operating tempo in contingencies and maintaining no-fly
zones, is the Bottom-Up Review requirement of 20 tactical aircraft wings an accu-
rate depiction of the Au* Force's requirement for operations other than war and to
Support two MRCs?

Answer. Yes, however, the growth in Air Force presence operations (which encom-
pass operations other than war) has not come without costs. Current operating tem-
pos, driven by increased intensity of presence operations are straining resources,
aircraft, and personnel.

Future force structiu-e determination must account for the increased demand
placed on USAF assets and personnel for presence operations.

Question. What is the shortfall between the Department of the Air Force's pro-
jected aircraft procurement budget and the number of aircraft that need to be buflt
to maintain the Bottom-Up Review force structure?

Answer. The Air Force is projecting total shortfalls of 18 F-15E and 120 F-16 air-
craft between fiscal year 1997 and fiscal year 2010. There is procurement funding
for 6 of each in the fiscal year 1996 budget and 4 of each in the fiscal year 1997
budget, leaving remaining F-15E and F-16 shortfalls of 8 and 110, respectively. We
are balancing this priority versus aU other Air Force programs in the fiscal year
1998 POM process and wiU have a decision on fiitvire procurement rates prior to
submitting the fiscal year 1998 President's Budget.

Question. Describe how the Administration's new budget and accompanjdng out
year plan implements the Bottom Up Review requirements for:
—The tactical fighter/strike force (F-15, F-16, and F-22);
— The strategic bomber force (B-1, B-2, and B-52);
— AirUft (C-17, C-5, C-141, C-130);
—Tankers (KC-10, KC-135); and
— C-4I Aircraft (AWACS, JSTARS, RJ-135).

Answer. The tactical fighter/strike force (F-15, F-16, and F-22):

The 1993 Bottom-Up Review (BUR) called for 20 Fighter Wing Equivalents
(FWEs) to support two Major Regional Conflicts (MRCs) by 1999. The Air Force has
already met tWs goal.

As the Air Force modernizes its fighter fleet with F-22s and Joint Strike Fighters
(JSFs), older fighters which have reached their service life limits (such as the F-
15, F-16, and A-10) wiU be gradually retired so as to maintain 20 FEWs. However,
because some of these older aircraft must be retired prior to sufficient numbers of
F-22 and JSF reaching the field the Air Force needs an additional 18 F-15Es and
120 F-16s to sustain the 20 FWE commitment. The Air Force is examining options
to continue procurement of F-15Es and F-16s to meet attrition shortfalls that occur
before F-22s and JSF can be procured in sufficient quantities.

The strategic bomber force (B-1, B-2, and B-52):

The 1993 Bottom-Up Review (BUR) called for 100 heavy bombers for a Major Re-
gional Conflict (MRC) by 1999. The Administration's budget meets this require-
ment— 100 deployable bombers in 1999.

We field 130 deployable bombers by FYO 1—100 to deploy to the first MRC and
30 as a ready force for a second MRC or to provide additional crews and aircraft
for the first MRC. This robust bomber force vnil be fiiUy effective with the integra-
tion of all-weather precision and standoff" weapons.

AirUft (C-17, C-5, C-141, C-130) and Tankers (KC-10, KC-135):

The budget provides adequate force structiu*e for both airlift and air refueUng. C-
17 procurement is on an accelerated profile so C-17s can replace retiring C-141s.
C-130 J acquisition begins the gradual modernization of our theater airlift forces.
Modifications wiU update the C-5, KC-10, and KC-135 fleets to keep them capable
weU into the next century.

C-4I Aircraft (AWACS, JSTARS, RJ-135):

AWACS: .

There are funds in the 1997 budget request for Extend Sentry and Command,
Control, Communications, Computers, IntelUgence, SurveiUance, and Reconnais-
sance (C4ISR) Improvements, but they are not "programs" in the conventional
sense. They are a coUection of individual projects that wiU be accompUshed as indi-
vidual modifications. .

Question. What is the contractor's average profit margin per aircraft over the last
four production lots under the terms of the multiyear proposal?

Answer. The profit terms negotiated as part of the annual fixed-price buyout
strategy for the last 88 aircraft prior to the Nov 95 Defense Acquisition Board recog-

351

nized the risk of pricing prospectively over seven years of production and
incentivized the contractor to provide a lower price to the Government. The profit
rate will be the same under the multi-year procurement as it would be under the
annual contract approach. The target profit rate on the last four production lots fis-
cal year 2000-2003) is 15.7 percent. The contractor's profit may vary fi'om the target
rate depending on its ability to attain reduced C-17 costs to meet the five percent
price discount under the multi-year contract.

Question. What actions need to be taken to preserve the option of a multi-year
contract for the C-17 in the fiscal year 1997 authorization/appropriations process
if approval of a multi-year is not contained in the fiscal year 1996 Omnibus Appro-
priations Bill or if that bill does not become law?

Answer. The C-17 Multi-Year Procurement (MYP) offer from McDonnell Douglas
Corporation (MDC) is good through 1 June 06. We must fiand the Economic Order
Quantity (EOQ) by that time or risk losing the opportunity to affect the fiscal year
1997 aircraft buy with EOQ purchases and producibility enhancements. In addition,
we must have clear direction on how many aircraft to buy in fiscal year 1997 as
advance buy purchases will be well underway by 1 June. Even with this direction,
but no MYP approval, it is likely that the C-17 aircraft and engine contractors
would not continue past 1 June with their current offers unchanged. That is because
it is unknown how this lack of commitment from the Government would affect the
confidence of subcontractors as they negotiate their price discounts with MDC. FuU
commitment to the C-17 MYP by 1 June 96 will allow us to reap the greatest sav-
ings.

B-1 Aircraft Program

Question. Under current Air Force structure plans, the B-1 will serve as the back-
bone of the bomber fleet well into the next century. Mr. Money, during its entire
service in the bomber fleet, the B-1 has been plagued by reUability problems. Last
year, this Committee provided additional funding to begin implementation of reli-
ability and maintainability enhancements as identified in the B-1 Operational
Readiness Assessment (ORA). Describe to the Committee the progress you are mak-
ing in implementing the ORA recommendations.

Answer. The Air Force has made significant progress toward implementing the 10
initiatives identified during the ORA. Headquarters Air Combat Command (HQ
ACC) is in the final analysis of evaluating the consohdation of intermediate-level
avionics maintenance, along with evaluating conversion of certain avionics systems
to a two-levels of maintenance concept. The assignment of backshop maintenance
personnel to a B-IB specialty designator is complete. Flange design changes to the
auxiliary power box, incorporating sleeve rivets to the Idler Gear and a serrated
locknut to the Accessory Drive Gearbox have all been implemented as initial invest-
ment replacement parts. This implementation approach saved the Air Force ap-
proximately $2 million. The microwave signal conditioner recommendation proved to
be too expensive to implement. An alternative solution is being implemented using
new flexible cables to replace Radio Frequency hardlines, and new removable chas-
sis parts are being implemented through preferred replacement parts which allows
intermediate-level repair on avionic test stations. The Central Integrated Test Sys-
tem (CITS) transmitter work around has not been implemented, but is being focused
for implementation during the next CITS block software upgrade. The Stability and
Control Augmentation System (SCAS) controller redesign required the use of a ti-
ll chip which is no longer available for procurement. A software change is being
pursued which is expected to preclude the need for this chip and redesign of the
SCAS controller. The A-990 computer upgrade is pending final study review at San
Antonio Air Logistics Center or SA-ALC. Contract award for an avionic test station
upgrade design is expected by August 1996, and field implementation in late Fiscal
Year 1997 or Fiscal Year 1998. The CITS Expert Parameter System (CEPS) soft-
ware rehost effort has been negotiated and planned contract award is scheduled for
late April 1996 with first unit deliveries planned for approximately February 1997.
In the event there are remaining funds from the $11.2 million for further sustain-
ability improvements, HQ ACC and the Program office are evaluating the following
candidates: (1) CITS/CEPS Enhancements, (2) Radar Interface Test Equipment, (3)
Conversion of Radio Frequency Source (RFS) Auto Station to RFS Auto Test Set,
and (4) Expanded Individual Paramater Report.

Question. Do you see a time in which the B-1 will have a reputation as being a
highly reliable aircraft?

Answer. Yes. The Air Force continues to balance needed capability and systems
upgrades with investments to improve the weapon system's reUability and main-
tainabiUty. The B-lB's Mission Capable (MC) rate continues to improve toward an

A.Q loo n'>

352

overall fleet goal of 75 percent. For the first two months in 1996, the B-lB's weapon
system has achieved a MC rate greater than 70 percent. Significant progress con-
tinues to be made toward filling the B-lB's operational readiness spares package
requirements for each operational unit. The B-IB System Program Office actively
tracks and identifies potential areas for B-IB system reliability and maintainability
enhancements, which will afford improvements in B-IB costs of ownership and mis-
sion readiness. With continued emphasis and adequate funding support in sound re-
Hability and maintainabiUty investment areas, the B-IB will continue to progress
tow£U"a a very reUable aircraft.

Question. What is the present operational availabiUty of the B-1 fleet?

Answer. The Mission Capable (MC) rate for the B-IB fleet, as of 29 Feb 1996 was
70.6 percent. This would equate to an operational availability of approximately 61
aircraft (95 total aircraft minus 9 in depot times a 70.6% MC rate). The present MC
rate is on an upward trend, moving toward a fleet goal of 75 percent.

Question. Another problem that has plagued the B-1 is its notoriously deficient
electronic countermeasures (ECM) capability. What is the current status of the air-
craft's ECM capabihty?

Answer. The B-1 was designed for low-altitude, all weather, nuclear strike oper-
ations. . For these reasons, the Air Force is committed to funding the B-1 De-
fensive System Upgrade Program as a part of the overall conventional upgrade of
the aircraft. The first step is to modify the aircraft to carry the ALE-50 Towed
Decoy. This capability will be available in FY 1999. The aircraft will then be modi-
fied with a more robust situational awareness capability and radar jamming tech-
niques as early as FT 2002. The upgrade will maximize the use of off'-the-shelf tech-
noiogy/non-developmental system solutions. These upgrades will allow the B-1 to
operate in low to medium threat environments.

Qiiestion. What upgrades are fiinded and when will these be installed on the air-
craft?

Answer. Installed is described as Required Assets available (RAA). RAA is defined
as three modified aircraft; with aircrews, maintenance personnel, and associated
support. The following upgrades are fully funded for the B-1 Conventional Mission
Upgrade Program:

CBU 87/89/97 RAA 3QFY96

ALE-50 Towed Decoy RAA 2QFY99

Global Positioning System/Have Quick II RAA IQFYOO

JDAM/1760 Databus RAA 3QFY00

Avionics Computer RAA 1QFY02

WCMD RAA 1QFY02

JSOW RAA2QFY02

The following B-1 upgrade is partially funded: Defensive System Upgrade Pro-
gram (DSUP)— planning for RAA in 1QFY02 but presently funded for 1QFY04

The following B-1 upgrade is not ftinded: JASSM— planning for RAA in 3QFY02.
JASSM B-1 integration is currently on the Air Force (Jhief of Staff" Fiscal Year 1997
Plus-Up list.

Question. Mr. Money, for the past several years, the Air Force has been working
to provide the B-1 with a conventional strike capability — what conventional weap-
ons are oirrently flight qualified on the aircraft?

Answer. The B-1 is currently flight qualified to deliver Mk-82 General Purpose
(GP) 500 pound bombs. Flight test is complete and Cluster Bomb Unit (CBU>-87
Combined Effect Munitions (CEM), CBU-89 Gator Mines and CBU-97 Sensor
Fuzed Weapons (SFW) will be added to the B-l's conventional weapons list in July
of this year.

Question. What precision weapons will be qualified on the aircraft and when?

Answer. Precision weapons are defined as those having accuracies of three meters
or less. Accurate weapons have accuracy of four to thirteen meters. The following
categories of weapons will be qualified on the B-1:

Fiscal year

Precision:

JASSM *2002

Accurate:

JDAM 2000

WCMD 2002

JSOW 2002

* Not presently funded; currently on the Air Force Chief of Staff Fiscal Yearl997 plus-up list.

Question. What are the Air Force's plans for integrating BVUD in the B-1 fleet?

353

Answer. Congress appropriated $15 million in the Fiscal Year 1996 Appropriation
Bill for "efforts to eqiiip the B-1 with precision guided munitions, including the B-
1 virtual umbiHcal demonstration." Air Combat Command (ACC) has stated a re-
quirement to modify two B-1 aircraft and procure 200 tail kits to provide guided
capability to the Mk-82 500 pound bomb.

The Air Force plans to go on contract in September 1996 and expects BVUD capa-
bility by the 4QFY97. There are no Air Force follow-on plans to expand the BVUD
effort beyond ACC's stated reqviirement.

B-2 Aircraft Program

Question. The B-2 is without question the most advanced bomber in the world
today and in the foreseeable future. The Committee again this year will be focused
on insuring that the United States gets the maximum return on the considerable
investment made in developing and fielding this aircraft. Mr. Money, the Adminis-
tration recently announced its decision to convert a B-2 test aircraft into a fully
operational war plane. What major efforts are required in this conversion?

Answer. Major efforts required to upgrade AV-1 to an operational (Block 30) con-
figuration include the following:
— Structural modifications
— Replace weapons bay door drive system
— Replace landing gear
— Fuel system modification

— Install Block 30 avionics and hydromechanical systems
— Block 30 low observable configuration
All but the last effort is unique to AV-1.

Question. Does the conversion require stripping the jiircraft of all test-related wir-
ing and instrumentation?

Answer. All accessible test-related wiring and instrumentation will be removed
when AV-1 is modified to an operational (Block 30) configuration.

Question. How will future upgrades be developed and tested on the B-2 without
this test asset?

Answer. AV-1 was used to evaluate initial B-2 flsdng qualities and to verify the
low observable design. After completing its planned flight tests in 1993, AV-1 was
placed in flyable storage at Palmdale, CA. Although AV-1 was to be retained as a
test asset, its utility would have been Hmited by a lack of an avionics suite and
other configuration differences. The long range plan was to test future upgrades
using an Air Combat Command B-2.

Question. How much is budgeted in fiscal year 1997 for Une-shutdown/cvutail-
ment?

Answer. In Fiscal Yearl997, $23.2 miUion is budgeted in Aircraft Procurement,
Air Force Combat Aircraft, BAOl, for Une-shutdown/curtailment.

Question. It has come to the Committee's attention that $107 million of fiscal year
1991/1992 procurement funding will cancel prior to completion of the contracted
work. What specific efforts are ftinded with the $107 million?

Answer. Due to concurrency, the B-2 Program is deUvering production aircraft
(AV 7-19) with incremental (Block 10/20) capability to Air Combat Command (ACC).
This approach provides the warfighter with B-2s for training and hmited
warfighting capability while final Block 30 capabilities are flight tested. When the
government accepts delivery of Block 10 & 20 aircraft, a portion of the final pay-
ment is withheld until these aircraft are brought up to contract (Block 30) configu-
ration. This effort varies with each aircraft, but a major item common for all Block
30 upgrades is the final low observable configuration. Some of these Block 30 up-
grades will be completed after the accounts that funded these aircraft cancel.

Question. When were these efforts initiated? When will they be complete?

Answer.

Com-

f-^^^ caT;; P'^*^

[Fiscal
year]

Funds

with fis- ?p^,""! block 30
"I year '^ [Fiscal

year]

AV-11 1991

AV-12 1991

AV-13 1991

AV-14 1991

AV-15 1991

AV-16 1991

1998

1999

1998

1999

1998

2000

1998

1999

1998

1999

1998

1999

354

r,,„j. Com-

Funded l""J' plete

with fis- """ block 30

"I year 1 ''"' [Fiscal

year]

AV-17 1992 1999 2000

Seven production B-2s are affected by the canceling funds problem. Each air vehi-
cle was ftilly funded with a specific fiscal year, fiscal year 1991 or fiscal year 1992.
Aircraft Procurement funds are available for eight years for expenditure purposes.
In each case, the Block 30 upgrades are completed after the account cancels.

Question. What are your proposals for addressing the problem of funds cancella-
tion?

Answer. The Air Force has submitted language for the OMNIBUS Bill for Fiscal
Year 1997 requesting appropriation extension for B-2 (Language Relief from Public
Law 101-510). The proposed biU language is as follows:

Appropriation Extension for B-2 Program

"Notwithstanding any other provision of law, funds made available in the fiscal
years 1991 and 1992 Department of Defense Appropriations Acts (PubUc Laws 101-
510 and 102-172) under the heading 'Aircraft Procurement, Air Force' for the B-
2 aircraft program shall remain available for expenditure until September 30, 2002.
For purposes of this section, the term 'B-2 aircraft program' is the most specific
level of budget items identifying funds for B-2 and B-2A in fiscal years 1991 and
1992 Department of Defense Appropriations Acts, the accompanying House and Sen-
ate reports, the conference reports and accompanjdng joint explanatory statements
of the managers of the Committee of the Conference, the related classified annexes,
and the P-1 and R-1 budget justification documents as subsequently modified by
Congressional Action."

Section-By-Section Analysis

The proposed language would, notwithstanding the provisions of section 1552(a)
of title 31, or any other provision of law, authorize 1991 appropriations for the pro-
curement of B-2 bomber aircraft to remain available for expenditures until Sep-
tember 30, 2001 and FY92 appropriations for that purpose to remain available for
expenditures until September 30, 2002.

F-22 Aircraft Program

Question. The F-22 fighter program, designed to replace the F-15C as the next
generation air superiority fighter, has been characterized as the Air Force's number
one long term modernization priority in yoiu- joint statement. What do you charac-
terize as the principle risk areas at this time?

Answer. Currently, there are no aspects of the F-22 program that are character-
ized as high risk. However, the engine and integrated avionics are the two areas
highUghted in the Defense Science Board (DSB) report on "Concurrency and Risk
of the F-22 Program" as having the most uncertainties.

The F119 engine program is on schedule for first flight, with all the development
issues to date resolved and demonstrated in test. There are currently five engines
in test, with over 3000 hours of engine testing. Two additional engines will begin
test in the Apr/May 1996 timeframe. Currently, Initial Flight Release (IFR) is
scheduled for Dec 1996 with Initial Service Release (ISR) in third quarter of Cal-
endar Year 1999.

In Dec 1994, avionics had a very successful hardware Critical Design Review
(CDR). At that time the DSB wrote in their report that "* * * Good progress is
being made in the design, and the program is being carefully managed." The soft-
ware CDRs are ongoing, with the software being built incrementally through the re-
mainder of the Engineering and Manufacturing Development program. Software
testing in the Avionics Integration Lab (AIL) begins in early Calendar Year 1997,
testing in the Flying Test Bed (FTB) begins in Oct 1998, and fiill avionics flight test-
ing begins with A/C 4004 in mid Calendar Year 1999.

Question.When will the Air Force's F-22 derivative study be available to Con-
gress? Will there be any implication for the fiscal year 1997 budget request?

Answer. The F-22 derivative study results will be available to Congress in May
1996. The derivative study lasted for one year and investigated the future viability
of using the F-22 as the basis for an aircraft to fill projected shortfalls in the Lethal

355

Suppression of Enemy Air Defenses (SEAD) and Strategic Attack/Air Interdiction
mission areas. There is no impact to the Fiscal Year 1997 President's Budget.

F-15E AND F-16 Aircraft

Question. Last year this Committee added funding to the fiscal year 1996 budget
request to continue production of both the F-15E and F-16 aircraft at a time the
department proposed to discontinue production of both programs. Now the fiscal
year 1997 budget request contains funding for four F-15E's and four F-16's. We are
heartened that you reached the same conclusion the Committee did one year ago.
Namely that until the fielding of the Joint Strike Fighter, these fleets need to be
recapitalized. What are the total recapitalization requirements for both the F-15E
and F-16 fleets prior to the fielding of the Joint Strike Fighter?

Answer. The total recapitalization requirements are 18 F-15E's and 120 F-16's.
Without these aircraft, total inventory levels will decrease below the number of aiir-
craft needed to support the Bottom Up Review force structure of 20 FWEs. The
shortfalls will occur between fiscal yeeir 1997 and fiscal ye£u- 2010.

Question. Are these planes programmed and budgeted for in the future years de-
fense budget?

Answer. Current (Future Years Defense Plan) funding follows. (Dollars in Mil-
lions.):

Fiscal year

1996 1997

F-15E Procurement $300.7 (6a/c) $185.4 (4a/c)

F-15E Adv Proc 48.5

F-16 Procurement 154.0 (6a/c) 105.5 (4a/c)

F-16 Adv Proc,

The Air Force is exploring various fighter plus-up options for fiscal year 1997 and
fighter procurement options in the fiscal year 1998 POM.

Question. The budget request proposes no funding for advance procurement for
fiscal year 1998 acquisition of these aircraft. If the decision is made to continue pro-
duction in 1998 how do you intend to fund advanced procurement in fiscal year
1997?

Answer. The number two item on the USAF fiscal year 1997 Plus-up Priorities
List requests $104.1 million in fiscal year 1997 for the procurement of two F-15E's
as well as $48.8 million for advance procurement of six F-15E's in fiscal year 1998.
The number three item on the list requests $49.4 million in fiscal year 1997 for the
procurement of two F-16's as well as $10.0 million for advance procurement of six
F-16's in fiscal year 1998.

Joint Strike Fighter Program

Question. What is different about the Joint Strike Fighter (JSF) program that will
allow it to escape the fate of past joint service aircraft development programs?

Answer. Strong support from both military departments is reinforced by the pro-
gram management and reporting structure. There is no "lead Service" for the pro-
gram, and the Navy and Air Force each budget approximately equal shares of an-
nual funding. It is chartered under the signatures of the Secretaries of the Navy
and Air Force and the Deputy Secretary of Defense. The JSF Program is jointly
manned, with the Program Director reporting to the opposite Service Acquisition
Executive. Program location in Washington, D.C., facilitates the crucial constant
interaction with the Services' requirements leadership and the Service Acquisition
Executives of both military departments.

A key aspect of the JSF Program is facilitating joint development of fully vah-
dated and affordable operational requirements. The JSF Program office, working
with the requirements staffs from the Air Force, Navy, Marine Corps, and the
United Kingdom, and teamed with industry, is facilitating requirements definition
efforts. The program's Integrated Product Teams of warfighters and technologists
use the disciplined strategy-to-task process supported by an extensive underpinning
of Modeling, Simulation and Analysis to help the Services evaluate joint strike war-
fare needs and potential solutions to meeting those needs. This process permits de-
velopment of a set of requirements with maximum focus on jointness and consistent
with technology's ability to support them aflfordably. Industry is a full participant
on these terms. This emphasis on early interaction of the warfighter and the devel-
oper ensures cost versus performance trades are made early when they can most

356

influence weapon system cost. The first formal product of the requirements defini-
tion process was the Joint Initial Requirements Document (JIRD), signed by all of
the participating Services and briefed to the Joint Requirements Oversight Council
(JROC) in late summer 1995. The JROC endorsed the JSF process and "family of
aircraft" strategy and emphasized the "great potential towards achieving an afford-
able solution to meet our joint warfighting capability." Completion of the Service's
Joint Operational Requirements Documents (JORD) is anticipated in Fiscal Year
1998.

The JSF Program is good news for the American taxpayers. The joint approach
to the "family of aircraft" concept optimizes commonality (upwards of 80%) while
satisfsdng unique Service needs affordably. JSF EMD savings over individual Serv-
ice EMD programs have been estimated as high as $15 billion.

Question. When will the JSF program field an aircraft to replace the current
Navy, Air Force and Marine Corps aircraft?

Answer. The first operational aircraft delivery is planned in 2008. The Service
which will be the recipient of the first aircraft has not been determined. All three
participating services anticipate a force structure requirements for their variant of
the JSF in this timeframe.

Question. What will happen to the strike aircraft needs of each of the Services
if any of the Service's aircraft variants can't be developed on time and within budget
of the JSF Program?

Answer. The requirements for strike fighter aircraft modernization will not
change if there are setbacks in the development/production of the JSF variants. If
such delays are encountered, investment in less than optimum capitalization efforts
may need to take place.

Question. JSF is focused on affbrdability. Specifically how will this be achieved
and what impact will this have on future aircraft funding needs? What do you deem
as affordable JSF aircraft?

Answer. The program is facilitating the development of fiilly validated and afford-
able operational requirements and proven operational concepts. It is also dem-
onstrating key technologies and manufacturing processes to lower risk prior to start-
ing Engineering and Manufacturing Development (EMD) of the Joint Strike Fighter
(JSF). The program is defining and will demonstrate concepts for a "family of air-
craft" that meets the needs of the Services and optimizes commonality among the
Service variants to minimize Life Cycle Cost (LCC). Industry estimates a 33-55%
reduction in LCC. JSF EMD savings over individual Service EMD programs have
been estimated as high as $15 billion.

The "family of aircraft" concept allows a high level of commonality while satis-
fjdng unique service needs. Concept Development Phase efforts have ratified the
conclusion of the program's competing weapon system contractors that a family of
aircraft can meet tri-service needs, with overall significant LCC savings. The degree
of commonahty varies with individual contractor designs. This approach brings with
it the cost benefits of a common depot, commonly supported logistics tail, and in-
creased joint service interoperability.

The JSF Program is a leader in the area of DoD acquisition streamlining and re-
form and use of "paperless" processes. It encourages the use of commercial stand-
ards and best practices in weapon systems development and teaming with industry
to create a common cost model to improve government and industry understanding
the weapon system LCC. It will minimize the number of contractor deliverables
through on-line access to the contractors' management systems.

The Service's Joint Initial Requirements Document (JIRD) reflects Services' unit
flyaway cost goals of (FY94$): USAF, $28 million; USMC, $30-35 million; and USN,
$31-38 million.

JASSM Program

Question. Last year, the Committee provided an additional $25 million to initiate
the Joint Air to Surface Standoff Missile (JASSM) program, a follow-on to the termi-
nated Tri-Service Standoff Attack Missile (TSSAM) program. Given TSSAM's trou-
bled history of technical problems, cost growth, and schedule slips, the Committee
needs to ensure that the same mistakes will not be made again. What was the total
amount spent on TSSAM?

Answer. The total amount expended was $4.4 billion when the TSSAM program
was terminated. The Northrop Grumman EMD contract accounted for $2.7 billion.
The remaining $1.7 billion was expended for initial development contracts and other
government costs such as test range support, test aircraft, support contracts, travel,
etc.

357

Question. What lessons learned from the TSSAM program are being applied to the
JASSM program?

Answer. A number of processes are in place to ensure TSSAM -developed tech-
nology is available for JASSM and other interested government programs. For in-
stance, all TSSAM technical documentation is in a TSSAM Data Repository at the
Naval Air Weapons Center (China Lake) and available to government agencies and
defense contractors with government sponsorship. Selected TSSAM documentation
is also in JASSM's technical library and available to all potential JASSM bidders.
In addition, selected hardware and some software developed under the TSSAM pro-
gram has been made available to other government programs such as JASSM,
Tomahawk, JDAM, JSOW, and government laboratories. These items include the
missile, missile parts, special tooling and special test equipment and allow the gov-
ernment programs to capitalize on the use of TSSAM technology and avoid unneces-
sary costs.

While TSSAM documentation and hardware is available, JASSM's most signifi-
cant departure from the TSSAM program is the acquisition approach of Cost as an
Independent Variable (CAIV). Instead of mandating a variety of requirements sup-
ported by countless military specifications, the JASSM program has only three Key
Performance Parameters and six Critical Performance Parameters. All other re-
quirements are tradable to obtain a missile below the threshold average unit price
of $700 thousand. These costs and reqmrements were prepared in a partnership
with the five major contractors bidding on JASSM, the warfighters, and the acquisi-
tion community during the past year.

Question. The fiscal year 1997 request includes $160 million for two contractors
to perform pre-EMD efforts. Presumably, further pre-EMD fiinding will be required
in fiscal year 1998 prior to the fourth quarter award of an EMD contract. What is
the total funding required for the two pre-EMD contracts?

Answer. The total funding required for the two pre-EMD contractors and govern-
ment costs is approximately $400 million which covers the 24 months pre-EMD pe-
riod of performance.

Question. Given the substantial investment in TSSAM, why do we still need to
conduct this level of risk reduction prior to initiation of EMD?

Answer. JASSM contractors are required to address JASSM requirements. Al-
though TSSAM technologies are available, the contractors are free to develop their
own design solution. TSSAM technologies have been offered up for use by JASSM
contractors. Several contractors are evaluating the TSSAM engine, warhead, and
thermal batteries. In addition, low cost hybrids of the seeker with autonomous tar-
get recognition systems and navigation sets developed by TSSAM are also available.
The challenge for JASSM contractors is to integrate these technologies into their
particular missile designs to achieve the stringent JASSM affordabihty goals.

The 24 month JASSM pre-EMD focuses on manufacturing development, require-
ment trades, and design verification between two competing contractors to achieve
an affordable missile below the threshold $700 thousand unit cost. Existing systems
(such as JSOW, SLAM-ER) and sub-system designs are being relooked at in light
of critical manufacturing processes to make them more producible and affordable.
This is done by encouraging Manufactimng Development Initiatives (MDI) up front
in system design to include Design for Manufacturing (DFM) and Design for Assem-
bly (DFA). The result of these efforts wiU be a more affordable and producible mis-
sile. We can begin manufacture of production representative missiles much earUer
in the EMD phase which will reduce the development period. Given the difficult his-
tory and cost of cruise missile developments, this 24 month competition provides our
best chance of obtaining the JASSM for under $700 thousand.

Question. The United Kingdom is embarking on a program called CASOM that
is similar to JASSM in terms of both requirements and schedule. Many of the same
contractors are expected to bid for each. What is the potential for a collaborative
development program with the UK? Please discuss the advantages and disadvan-
tages of such an arrangement?

Answer. There are three contractors (Texas Instruments, McDonnell Douglas, and
Hughes) common to both programs. The US and UK have held several meetings to
discuss a potential cooperative program. An agreement was reached that both coun-
tries would proceed with their current acquisition approaches and independently se-
lect their winning contractors). On 15 March 1996 the US and UK completed nego-
tiations on a "contingency" MOU that provides the framework for cooperation if one
of the two JASSM contractors selected by the US is subsequently chosen by the UK
for CASOM. The framework is based on taking advantage of potential synergies
from two parallel national programs should the US and UK chose the same US con-
tractor. The MOU will be ready for US signature when the JASSM source selection

358

is completed in June 1996. The MOU will then be forwarded to the UK for its signa-
ture upon announcement of the CASOM winning contractor in July.

This agreement was reached based on both countries' evaluation of the following
disadvantages and advantages.

— Disadvantages of a single collaborative development program
— Potential major delay to both programs
— UK concerned CASOM schedule (currently evaluating proposals) remains on

track
— UK was in source selection already when US requirements defined
— For the UK to modify its CASOM requirements to accommodate US JASSM
requirements would have given an adverse perception of unfairness to the
four non-US CASOM proposers
— JASSM Request for Proposal released 29 March with pre-EMD contract
award in June
— Some requirement mismatches between the two programs
— US missile length restriction because of B-1, B-2 carriage
— US missile weight restriction because of F-16, F/A-18 carriage
— B-52 and F/A-18 more demanding missile environment
— ^Management approaches different

— CASOM: Firm fixed price contract for EMD + minimum of 300 missiles &

equipment
— JASSM: Cost plus contract (based on TSSAM lessons learned) for pre-EMD,
EMD
— US focus on affordability (average unit cost below $700 thousand) and
producibility incompatible with CASOM off-the-shelf acquisition approach
— 2 of 3 contractors proposing different designs for JASSM than their CASOM

proposal
— Lost competition in development (2 contractors in pre-EMD) to evolve design
for producibility, affordability, and performance
— Advantages of a collaborative development program
— Potential lower EMD costs for JASSM development

— Production cost effect — gaining minimum of 300 Conventionally Armed Stand-
Off MissUe— CASOM missiles to US JASSM buy.

Joint Direct Attack Munition

Question. Last year, the Air Force downselected to one JDAM contractor for the
remaining phase of EMD. The contract was reportedly awarded at significant sav-
ings in the cost of the munition over that projected in last year's budget and associ-
ated Five Year Defense Plan (FYDP). Recent experience with many competitive pro-
grams have shown tremendous cost savings over estimates projected in the budget.
Example include JDAM, JPATS, AMRAi^, Tomahawk, and P-3 just to name a
few. Mr. Money, what does the experience with these programs say about our ability
to develop budget estimates for programs that include strong competition? Is the Air
Force reevaluating its cost models based on this experience?

Answer. The significant savings in the cost of the JDAM contract over that pro-
jected in the budget was primarily due to the implementation of acquisition reform
initiatives. During the JDAM Milestone I timeframe, acquisition reform initiatives
were not considered in the cost estimate. Last year's budget was based on the esti-
mates developed during this Milestone review. Prior to the Milestone II decision,
230 acquisition reform initiatives were proposed by the winning contractor. These
initiatives, such as commercial business practices, teaming arrangements, design for
affordability through the implementation of decreasing part counts and the use of
commercial parts, and design for manufacturing and assembly through commercial
manufacturing processes, were included in the Milestone II life cycle cost estimate.

Program cost estimates are normally developed by way of a detailed analysis of
historical cost data and contractor proposal information. There is a considerable vol-
ume of cost data reflecting the effects of strong competition in existing databases.
However, at present, limited information (or historical cost data) on the cost impacts
of acquisition reform initiatives is available. This area is currently being inves-
tigated via numerous special studies. Also, as actual cost data is collected on acqui-
sition reform programs, cost databases and models will be updated to include the
cost impact of reform initiatives.

Question. The Committee understands that the Department is looking at ways to
incentivize program managers to be more innovative in acquiring weapons systems.
One approach is to "reward" a program manager by reinvesting contract savings in
the program. Was this approach used with the JDAM program?

359

Answer. Yes. Better than expected EMD Phase 1 results, including successful
early testing and better than predicted design maturity, led to a reduction in fund-
ing required to execute EMD Phase 2. These savings were used to accelerate devel-
opment by 15 months, add the B-52 to the test program, and begin production one
year early.

JDAM has also experienced significant savings in procurement costs. The ex-
pected average unit procurement cost now stands at $13,900 ($FY93) compared to
a goal of $42,000 ($FY93 at the 40,000th unit). Both the Air Force and OSD have
approved a strategy that allows JDAM to procure the maximum quantity that the
budget supports. While the total procvu-ement objective remains unchanged, in-
creases in the annual procurement quantities will allow JDAM to complete procure-
ment in 10 years vice 15, thereby forgoing $2.7 bilUon in production costs.

Question. Does such a practice also incentivize program managers to inflate their
budget estimates?

Answer. No. In the current environment of decreasing budgets, a program man-
ager cannot afford to inflate their program budget estimates. In addition, there are
several checks and balances in place within the Air Force and the Office of the Sec-
retary for Defense (OSD) to counter a program manager from inflating their budget
estimates. These include: independent estimates developed by the Air Force (Compo-
nent Cost Analysis) and OSD (Independent Cost Estimate) for major acquisition pro-
grams in preparation for milestone decisions and program reviews; development of
the Program Objective Memorandum; annual Investment Budget Reviews; and the
Program Budget Decision process. We believe these processes ensure the best pos-
sible budget estimates for our programs.

Question. What other methods of incentivizing program managers are being con-
sidered?

Answer. Central to the entire acquisition reform movement is finding ways to
make the acquisition process more streamlined — making the program manager's job
easier — and thus incentivizing him to be more innovative in acquiring new systems.

Probably the most significant step we have taken has been the creation of an at-
mosphere of empowerment, in which the program manager feels that he can be cre-
ative and innovative. In the past, whenever a program manager tried to do some-
thing new and different — regardless of how much sense his proposal made — he had
to run the gauntlet of naysayers; any of whom could prevent him from enacting his
plan. Not only did this stop him, but it also gave a clear message to any other pro-
gram manager who might have been considering a new method.

This stifling environment no longer exists. Program managers today know they
are expected to be innovative. Most of the bureaucratic impediments have been re-
moved.

We are also attempting to incentivize program managers by improving program
stabiUty. With more stabihty, program managers can seek creative new ways to do
things better, faster and cheaper. Financial reform is key to improving program sta-
bility. We currently have several ongoing efforts to improve our financial manage-
ment and other program incentive practices.

Question. What specific acquisition reform initiatives were applied as part of the
JDAM program? Did these initiatives play a larger role in providing cost savings
than the competition?

Answer. Cfommercial exemptions provided by the 1994 Federal Acquisition
Streamlining Act were used to encourage contractors to use commercial practices,
vendors and components. These exemptions allowed the contractor to build the sys-
tem and its key components in factories without the overhead burden associated
with government oversight and unique reporting requirements.

The contractors were also given the freedom to structure the first 18 months'
work so that they would be comfortable with key manufactvuing processes and the
ability of their overall manufacturing approach to yield a low cost, quality product.

The innovative use of "price based negotiation" allowed the use of price rather
than cost as a basis for negotiating and allows the use of rewards and punishment
for a contractor's commitment for price of the first five lots of production.

The program also emphasized aJffordability and the use of cost as an independent
variable to create a design environment that no longer piu-ely focused on perform-
ance. Performance requirements were broadly defined to allow contractors consider-
able latitude in trading performance for cost.

Without a doubt, competition played a very important role in providing cost sav-
ings. However, it was the addition of acquisition reform initiatives that acted as a
catalyst to further intensify the positive effects of competition. It was the synergistic
combination of these two elements that equally led to the reductions in cost we see
today.

360

Joint STARS Program

Question. The Joint STARS program is a joint Air Force and Army program to
develop and field an airborne system that locates and tracks moving and fixed
ground targets. Even though the program is still in development, JSTARS planes
have already been used in Operation Desert Shield/Desert Storm and are currently
supporting Operation Joint Endeavor. General Muellner, please describe the current
deployment of JSTARS aircraft to Bosnia.

Answer. Joint STARS was directed by the Chairman, Joint Chiefs of Staff (CJCS)
in December 1995 to support a 60-day deployment in support of Implementation
Force (IFOR) with two E-8 aircraft and 10-12 Ground Station Modules (GSM). Two
E-8 test aircraft (one E-8A and one E]-8C) and 12 GSMs deployed to Rhein Main,
Germany, in mid-December with GSMs deploying to Forward Operating Locations
shortly after arrival. Air Combat Command (ACC) activated the 4500 Joint STARS
Squadron (Provisional) and began operational missions in support of IFOR on 27
December 1995. In February 1996, CJCS directed the deployment be extended to
the end of March 1996. The E-8s re-deployed to the U.S. on 29 March 1996, having
successfully accomplished 100 consecutive E-8 sorties with GSM connectivity.

Question. What impact is there to the overall JSTARS development program by
sending test aircraft to the Balkans?

Answer. Joint STARS development for the current production baseline is com-
plete. There is no anticipated impact from the deployment on Joint STARS block
upgrade development.

Question. What are some of the lessons learned from this recent deployment and
how are they being incorporated into the base Une program?

Answer. During Joint Endeavor, the user/contractor team was able to identify sys-
tem deficiencies and develop solutions on the spot. In addition, operational testing
was accomplished in conjunction with this deployment program. The Air Force and
Army OT&E Report is due to OSD in June 1996 to support the Milestone III Full
Rate Production decision in August 1996. OSD/DOT&E will evaluate this report.
They may make recommendations on subsequent development in their Beyond Low-
Rate Initial Production (LRIP) Report which will go to Congress this Fall.

Question. The fiscal year 1997 procurement budget request for JSTARS is $559.1
milUon to acquire two aircraft. The JSTARS program is also scheduled to go before
the Defense Acquisition Board (DAB) this August for a full rate production decision.
What are some of the principal program issues that will be considered by the DAB?

Answer. Principal program issues will fall in two major categories: program pro-
curement cost and operational test and evaluation (OT&E) results. Procurement
cost has increased due to increased refiirbishment requirements over and above his-
torical estimates. The Air Force is addressing this issue in the ongoing FY98-03
POM exercise. As for OT&E, the Air Force/ii^my OT&E results will be pubUshed
in June 1996; any issues will be addressed at that time.

Question. It has been reported that the JSTARS program has been experiencing
some cost growth attributed mainly to the system's airframe. What is the size and
nature of this cost growth?

Answer. The Air Force is experiencing cost growth in the procurement program.
The major cost driver for this growth is increased requirements to eliminate corro-
sion from the used 707 airframes. The 1993 estimate to procure, refurbish, stand-
ardize configuration and add miUtarized modifications was $70 million per aircraft.
That estimate is now $96 million per aircraft.

Question. What steps is the Air Force taking to mitigate this situation?

Answer. The Service Acquisition Executive has formed a senior team of industry
and government experts in refiirbishment of aging aircraft to review our processes
and recommend initiatives to accomplish these tasks more efficiently. The Air Force
acquisition/user team is working together to address funding disconnects in the fis-
cal year 1998 POM which will be submitted to OSD in May 1996.

Question. It is the Committee's understanding that due to recent inflation based
funding reductions imposed on the Air Force by OSD it was necessary to defer the
acquisition of one JSTARS aircraft until later in the future years defense program.
Is this accurate?

Answer. The Air Force did defer acquisition of one aircraft from fiscal year 1999
and is currently working to address this disconnect in the fiscal year 1998 POM.

Question. What options are you looking at to pull the acquisition of this airplane
forward?

Answer. The Air Force acquisition/user team is working together to address fund-
ing disconnects in the fiscal year 1998 POM which will be submitted to OSD in May
1996. The goal is to bring procurement of the deferred aircraft back in to the Five
Year Defense Plan.

361

Question. Update the Committee as to the status of the NATO JSTARS program.
What are the pros and cons of United States involvement in this program?

Answer. Currently, NATO is in Phase II of it's program decision process. This
phase consists of an airborne platform decision. Joint STARS is the U.S. candidate
system. There are three other national candidates. The United Kingdom has a fixed
wing platform called the ASTOR. France has a helicopter candidate called the HO-
RIZON. Italy also has a heUcopter candidate called the CRESO. Both the HORIZON
and CRESO are pre-production vehicles and the ASTOR is early in development
planning.

The Embryonic Project Office (EPO), the ad-hoc organization tasked by NATO to
define and recommend an AGS system for NATO, has released a Request For Infor-
mation (RFI) document to each candidate nation. It will include technical, pro-
grammatic, management, schedule and cost information about each candidate sys-
tem in both national configuration and a nationally proposed NATO configuration.
Responses to the RFI are due to the EPO in June 1996.

The U.S. involvement in a NATO Joint STARS program helps facilitate NATO ob-
taining it's own ground surveillance capability. This would also reUeve U.S. Joint
STARS from taskings in the NATO area of responsibility. This asset could also be
used to augment our U.S. fleet. Program cost is a limiting factor. However, cost of
supporting the NATO Joint STARS is less than the procuring additional U.S. owned
Joint STARS to support the European mission.

Questions. What shared fianding commitment would DoD sign up to for fiitvire ac-
quisition of NATO JSTARS aircraft?

Answer. The planning estimates for a NATO Joint STARS system have been
based on the following estimate: 10-18 aircraft and 35-95 ground stations. The cost
estimates are approximately 2.3 billion and 4.5 biUion respectively, based on the low
and high estimates in each category. The total number of assets required are still
being validated at Supreme Headquarters Allied Powers Europe (SHAPE) Head-
quarters. Early indicators reflect NATO's interest in 10 airborne assets. This deci-
sion would impact the toted program cost significantly. As more data is received the
U.S. will be able to narrow the cost information based on that estimate.

A DoD position is currently developed based on a NATO AGS program with 16
NATO nations participating. The U.S. share of the total cost would be 26%. If 16
nations do not participate, the U.S. contribution would be higher.

Airborne Warning and Control Systems (AW ACS)

Question. Included in the budget for this year is funding for two new upgrade pro-
grams: Extend Sentry and C4ISR. Explain to the Committee the purpose of each
of these upgrades.

Answer. There are funds in the 1997 budget request for Extend Sentry and Com-
mand, Control, Communications, Computers, Intelligence, Surveillance, and Recon-
naissance (C4ISR) Improvements, but they are not "programs" in the conventional
sense. They are a collection of individual projects that will be accomplished as indi-
vidual modifications.

Extend Sentry is an aggressive sustainment approach to take the E-3 AWACS
program into the 21st century, decrease aborts, and address Reliability, Maintain-
ability and Availability (RM&A) issues. The AWACS Extend Sentry "program" was
initiated in December 1994, with RDT&E, procurement and O&M funding totaling
$114.1 million over the FYDP. Extend Sentry is not a program per se, but a com-
prehensive list of individual projects (100+) with a common goal of increasing air-
craft availability through reduced maintenance/depot downtime. The focus of Extend
Sentry is on three areas of investment:

— "Must do" items include "show stoppers" that have an adverse effect on Mission
Capable (MC) rates and changes required to comply with environmental laws and
regulations

— "Show-stoppers" are those items that if not fixed will ground aircraft in the next
four to five years
— ^Availability efforts develop alternatives to current supply/support items

— ^Availability issues not corrected will become "Must Do" items in the next four
to five years
— Deficiency items resolve long-standing system operational deficiencies
— Deficiency items highlighted by Desert Shield/Desert Storm and Blackhawk
shootdown

Extend Sentry project list originally was comprised of over 100 individual projects,
many of which require funding in the FYDP. The project list is continually updated
based on user priority and fiinds available and fall into five broad categories:

362

— Surveillance Radar and Identification Friend-or-Foe (IFF)

— Air Vehicle

— Mission Computers and Display Sub-systems

— Communications Group

— Guidance System

— 552nd Air Control Wing (ACW) Infrastruct\ire

Fiscal year 1997 Budget deliberations added $124.9 million (FY97/98/99) to the
AWACS program in response to a CJCS request to improve C4ISR capabilities. The
AW ACS program received funding to support three separate projects;

— Tactical Information Broadcast System (TIBS) capability
— Installation of TIBS capability on AWACS would enhance early threat detection

for aircraft under AWACS control
— Funds contingency capabiUty for only eight (8) AWACS aircraft
— High Frequency (HF) Radio Replacement

— Upgraded HF radio on AWACS will permit participation in HF digital networks
essential to long-range joint air defense
— Link- 16 Upgrade

— Significantly enhances the processing and transmission of AWACS collected
threat information data by upgrading AWACS Link- 16 and operator console ca-
pabilities
— Expands AWACS-to-shooter interoperability

Question. For the record please provide the total costs for modifying the AWACS
fleet with these upgrades.

Answer. Regarding Extend Sentry, the AWACS program includes the following
amounts to initiate the "program" ( 100+individual projects):

1996 1997 1998 1999 2000 2001 Total

3600 29 5 18.3 0.0 0.0 0.0 0.0 47.8

3010 35.9 8.5 5.5 5.4 5 3 51 65.7

3400 0.6 0.0 0.0 0.0 0 0 0.0 0.6

Total 66.0 26.8 5.5 54 5.3 51 114.1

The funding requirement to complete the Extend Sentry effort as currently envi-
sioned (on top of the $114.1 miUion mentioned above) is:

1997 1998 1999 2000 2001 2002 Total

3600 Requirement 29.3 37.5 4.1 13.3 0.0 7.2 91.4

3010 Requirement 36.1 46.4 70.0 90.9 51.0 35.6 330.0

3400 Requirement 7.1 9.1 4 2 2.8 18 2 3 27.3

Total 72.5 93.0 78.3 107.0 52.8 45.1 448.7

It is important to note that, as a collection of individual projects, Extend Sentry
can be implemented on an incremental basis consistent with available funding. HQ
Air Combat Command is addressing a significant portion of the Extend Sentry total
fiinding requirement with a FY 1998 POM initiative

Regarding C4ISR improvements, the AWACS program includes the following
amounts:

1997 1998 1999 Total

3600 21 0 180 10.0 49.0

3010 21.4 33.5 21 0 75.9

Total 42.4 51.5 31.0 124.9

It is important to note that this plus-up completely covers the three projects as
previously described (TIBS capability on 8 aircraft, HF Radio replacement comple-
tion, and Link- 16 Upgrade).

Question. What other AWACS modernization efforts are envisioned at this time?
If additional funding were available could these efforts be pulled forward in the fu-
ture years defense program?

363

Answer. There are a number of matiire and developing technologies vying for pos-
sible integration on AWACS that would require additional funding and direction.
These programs include:

— A potential E— 3 re-engining effort that would substantially improve mission
performance while reducing support costs by increasing engine thrust, increasing
aircraft time on station, significantly increasing engine reliability and maintain-
ability (R&M), reducing aircraft aborts, and reducing engine noise levels. Details on
pulling this effort forward in the FYDP have been provided under separate cover
in support of the CSAF fiscal year 1997 Plus-up Priorities List.

— The Extended Airborne Global Launch Evaluator (EAGLE) program is a Bal-
Ustic Missile Defense Organization (BMDO) funded prototype demonstration on the
AWACS test aircraft which will be flight tested in fiscal year 1998. EAGLE, a me-
dium wave infrared (IR) sensor and laser ranger, provides precise single-beam radar
cueing information over the Joint Tactical Information Distribution System (JTIDS)
to terminal defense systems Uke Navy Area Defense (NAD), Navy Theater Wide De-
fense (NTWD), and Theater High Altitude Area Defense (THAAD) which in turn in-
creases the defended footprint of each missile battery/ship. In support of attack op-
erations and passive defense, it provides launch and impact point estimates on the-
ater ballistic missiles which aid in locating Transporter Erector Launchers (TELs),
and improved situational awareness for PATRIOT engagement and theater com-
manders command and control.

— Cooperative Engagement Capability (CEC) is a Navy developed wide-band, Une-
of-sight, digital network providing fire control quality data for the purpose of en-
hanced fleet defense that can also potentially provide theater-wide benefits. The Air
Force has developed a comprehensive effort to investigate CEC on AWACS per Con-
gressional direction. Air Force initiation of the effort is awaiting release of the
Navy's $11 million fiscal year 1996 Congressional plus-up. The complete effort in-
cludes hardware/sofl;ware required to fund a protot5rpe, demonstration on the
AWACS test aircraft in the fiscal year 1999-200(5 timefi-ame. Continuation/comple-
tion of the Air Force study/demo effort would require the following FYDP RDT&E
ftinding: fiscal year 1997 — $36.5 million, fiscal 1998 — $20.4 million, and fiscal year
1999--I7.7 million.

Space Based InfraRed System (SBIRS)

Question. The Space Based InfraRed System (SBIRS) is being designed as a re-
placement for the Defense Support Program (DSP) satellite constellation. The Air
Force's SBIRS baseline architecture calls for a deployment decision in 2000 on
whether to launch Space and Missile Tracking System Satellites (SMTS) in low
earth orbit beginning in 2006. The National Defense Authorization Act for fiscal
year 1996 directed the DoD to achieve SMTS initial operating capability in 2003.
To facilitate this SMTS program Acceleration, the Fiscsd Year 1996 Defense Appro-
priations Act increased the Air Force budget request by $135 million. It is the com-
mittee's understanding that DoD has only released $84 million of these additional
fiinds to the Air Force. What is the department's rationale for not releasing the re-
maining $51 million appropriated for SMTS? What effect will the non-release of this
$51 million have on program acceleration?

Answer. The department released $84 million of the $135 million plus up assum-
ing the total amount could not effectively be spent in Fiscal Year 1996. Since that
time, the SMTS Flight Demonstration System (FDS) contract with TRW/Hughes has
experienced significant cost growth.

This cost growth was due partly to delayed direction and funding to TRW/Hughes
for the Long Wave InfraRed sensor (Feb 1996 vice the planned Oct 1995), to tech-
nical problems in the design phase and to delayed long lead parts procurement. De-
layed funding and technical problems on the FDS contract have caused the launch
date for FDS to sUp fi-om 4QFY98 to 1QFY99. Of the $51 milUon, $31 milUon is
needed to pay the cost growth on the FDS contract and ensure a 1QFY99 launch.

The remaining $20 mHlion would be used in Fiscal Year 1996 as follows: $10 mil-
Uon to begin competitive activities for an accelerated deployment of the operational
SBIRS Low component, and $10 million to accelerate key technologies necessary for
the operational system.

Additional delays in the release of the $5 1 million wiU move the FDS launch out
an additional quarter to 2QFY99. Further, additional funds are required in the Fis-
cal Year 1997 PB — Program Baseline, to prevent a launch slip to 3(5FY99.

The acceleration of the operational SBIRS Low component (SMTS) requires an ad-
ditional $134 million in Fiscal Year 1997 and approximately $2 billion over the
FYDP (FY98-03). The additional $2 billion is over and above the current DoD Top
Line.

364

Question. Does the Air Force's fiscal year 1997 budget request support congres-
sional direction for accelerating SMTS? If not, why not?

Answer. No. The Fiscal Year 1997 President's Budget submitted by the Air Force
did not include additional dollars to accelerate the SMTS program. The Fiscal Year
President's Budget was submitted prior to the Congressional language directing a
Fiscal Year 2002 first launch of the operational SBIRS Low component with a Fiscal
Year 2003 IOC.

As a result of the Fiscal Year 1996 Defense Authorization Bill directing the accel-
eration of SMTS, the Air Force has identified to Congressional staff the appropriate
Fiscal Year 1997 plus-up to continue an accelerated SMTS program.

In addition, the Air Force is considering a 1998 POM initiative to add the addi-
tional dollars to the SMTS budget to meet the mandated deplojonent dates. This ini-
tiative requires additional Air Force Total Obligational Authority (TOA).

Question. Does the Air Force have a plan for accelerating SMTS in accordance
with congressional direction?

Answer. Yes. The Air Force has a draft acquisition strategy that has been briefed
to and concvured with by the SMTS Executive Committee (EXCOM). The Air Force,
with DUSD(Space), is coordinating this strategy through OSD for USD(A&T) ap-
proval and authority to proceed. A meeting with USD(A&T) has been scheduled for
3 May 1996.

Question. To what extent would SMTS acceleration effect funding in the future
years defense program?

Answer. The acceleration of the operational SBIRS Low component (SMTS) re-
quires an additional $134 million in Fiscal Year 1997 and approximately $2 billion
over the FYDP (FY98-03). The additional $2 billion is over and above the current
DoD Top Line.

Question. Given congressional direction to accelerate SMTS, have key parameters
and threshold values been established for national missile defense requirements?
Have these reqviirements been fully coordinated with BMDO?

Answer. No, key performance parameter (KPP) values have not yet been estab-
Hshed for national missUe defense (NMD).

The development of KPP values for NMD will be the result of several on going
or planned activities. NMD requirements are being finalized by BMDO through per-
formance trade studies being done as part of a planned late- 1996 release of the
NMD System Reqiiirements Document (SRD). The SRD will allocate NMD system
requirements to the elements, including space surveillance requirements allocated
to SBIRS. Other activities that will influence the development of NMD key param-
eters include the SBIRS High component Pre-EMD effort scheduled for completion
by August 96, the SMTS FUght Demonstration System (FDS) scheduled for launch
in FY99, and the SBIRS Low component competitive DemonstrationA'^alidation ef-
fort scheduled for contract award in August 96.

SBIRS NMD KPPs requirements will be validated by the JROC prior to a decision
to proceed with EMD.

Question. What technical hurdles or programmatic barriers must be overcome to
meet congressional direction for deploying SMTS by 2003?

Answer. The three major hurdles are cost, performance and schedule.

Currently the Air Force and DoD budget does not support a Fiscal Year 2003 IOC
for SBIRS Low. Until sufficient dollars are programmed and funding stability is
achieved, the FDS launch in Fiscal Year 2099 and an operational launch in Fiscal
Year 2002 are in jeopardy.

The key technical issues that need to be resolved with FDS are autonomous acqui-
sition and tracking of target objects, demonstration of the Long-Wave InfraRed sen-
sor to track strategic targets in midcourse fhght, high data rate communications,
and operations of a highly complex, distributed network of satellites.

The acquisition strategy that the Air Force has developed meets the Congres-
sional direction to achieve IOC in Fiscal Year 2003, but it is "success oriented".
Schedule integrity is directly related to funding stability and the level of technical
success experienced during the FDS program.

The acceleration of the operational SBIRS Low component (SMTS) requires an ad-
ditional $134 miUion in Fiscal Year 1997 and approximately $2 billion over the
FYDP (FY98-03). The additional 2 billion is over and above the current DoD Top
Line.

365

Question. How will acceleration of SMTS affect plans for the integrated mission
control station that is intended to serve all space elements of SBIRS and the exist-
ing Defense Support Program (DSP)?

Answer. Accelerating SMTS does not change the SBIRS Master Control Station
(MCS) architecture. The baseline SBIRS architecture describes a common ground
station, the MCS, for each of the space components of SBIRS.

The original acquisition strategy called for a phased approach for integrating
DSP, HEO/GEO and LEO components into the MCS. While the DSP/SBIRS ground
consolidation will be completed in Fiscal Year 1999 and will not be impacted by the
SMTS acceleration, the overlapping HEO/GEO/LEO ground efforts will increase in-
tegration risk.

Question. The Air Force and SBIRS manufactiirers will form a "CEO Stakehold
Board" to provide a high level review of program execution as SBIRS proceeds. Can
the Air Force maintain an arms length relationship with the program contractor
given that both government and contractor officials are members of the CEO Stake-
holder Board and Integrated Product Teams?

Answer. Yes. The SBIRS CEO board and the IPTs are designed to streamline the
acquisition process, improve communications and resolve issues.

CEO Stakeholder Boards and IPTs have been used successfully on programs like
F-22 and C-17. To reinforce the criticality of these milestones, progress payments
are heavily weighted on successful completion of these reviews.

Questions. What is the contractor's responsibility for program cost growth or poor
performance when the government has been a party to key decisions as members
of the CEO Stakeholder Board and Integrated Product Teams?

Answer. Our intent and experience to date show that the CEO Board and IPT
process has facilitated progress and has resulted in real savings to the government
and a weapon system responsive to the warfighter's requirements.

The contractor is still bound by the terms and conditions, and the Statement of
Objectives. Legitimate changes that result from IPT discussions or CEO Board
meetings must still be negotiated by the cognizant Contracting Officer.

MiLSTAR Program

Question. Milstar is a communications system which provides the warfighter with
survivable, jam-resistant, world wide communications in all levels of conflict. The
Milstar system consists of a satellite constellation, a mission control segment, and
receive terminal segment. The Air Force has the responsibility for funding and man-
aging the space and mission control segments. Each service is responsible for pro-
curing the required receive terminal segments. The Air Force has not requested
funds in the fiscal year 1997 budget for the mission control segment of Milstar.
Why?

Answer. The Air Force had prepared the necessary budget documentation for the
Milstar Mission Control Segment, then as a result of significant budget constraints,
we were forced to remove the funds originally budgeted for the development of the
Milstar Automated Communication Management System (ACMS). ACMS is part of
the Mission Control Segment.

Question. What is the impact?

Answer. The impact is that the Milstar Automated Communications Management
System (ACMS) will be delayed 2 years from fiscal year 1999 to fiscal year 2001.
The ACMS, as part of the Milstar Mission Control Segment, performs network plan-
ning and management of Milstar communications resources for the Milstar Oper-
ations Center, the CINCs. Joint Task Force Commanders, and component commu-
nication planners. The fiscal year 1999 delivery of ACMS was to support the first
on-orbit Milstar II medium data rate capable satellite and fielded terminals. Al-
though all services will be affected, the Army's terminal field operators and commu-
nications planners will have the greatest impacts due to their dependency on ACMS
to directly task the Milstar satellite constellation, move antennas, and change their
network configurations. Without ACMS, planning and managing the satellite pay-
load resources will be extremely difficult and the users will be unable to fully utilize
the flexibility and responsiveness of the Milstar system.

Evolved Expendable Launch Vehicle (EELV)

Question. In late 1995 DoD began the development of a new family of expendable
launch vehicles (EELV) to reduce overall cost of space launch to the nation while
maintaining present capabilities. The department plans to spend about $2 billion
through fiscal year 2006 to develop the EELV and expects to reduce launch costs
by 25 percent.

366

The original program baseline allocated the majority of the funds ($1.3 billion) to
the outyears (2002 through 2006) of the program. The fiscal year 1997 budget re-
quest proposes moving about $500 million forward to fiscal years 1999 through
2001. What factors drove the decision to rephase development funding for EELV?

Answer. Four contractors proposed and were awarded Low Cost Concept Valida-
tion (LCCV) development contracts for the Evolved Expendable Launch Vehicle
(EELV). The Request For Proposals (RFP) to which the contractors responded pro-
vided government projected EMD funding requirements from fiscal year 1998-2006
at "1.6 billion (one contract), of which $400-600 million is in fiscal year 1998-2001."
Even though each proposal offered a different EMD funding profile based on concept
unique characteristics, all four proposals indicated a need for more of the total EMD
funding earUer in the EMD phase to support program objectives and milestones.
The government assessment of the contractors' proposals and reassessment of gov-
ernment fiinding requirements indicate that total funding of $1.6 billion for EMD
is still appropriate; however, on the order of $1 billion (vice $400-600 million) of
that funding is needed from fiscal year 1998-2001 to execute the program.

Question. Are there any shortfalls between the programmed budget for EELV and
the contractors' proposed baseUne? Have any test activities been eliminated from
the program to make up for the shortfall?

Answer. There are currently four contractors vdth different funding profiles for
each of their concepts. The programmed budget represents a reasonable government
assessment of fiinding requirements for EELV based on the contractors' proposals;
however, programmed numbers may have shortfalls or surplus to any specific con-
tractor proposal.

The contractors' proposed baseline assumed two medium lift vehicle (MLV) test/
demonstration launches in fiscal year 2000 and one heavy lift vehicle (HLV) test/
demonstration launch in fiscal year 2003. The government has evaluated the cost
and marginal benefit of the two MLV test/demonstration launches and determined
that a single MLV test/demonstration at least 12 months prior to the first oper-
ational launch is adequate to support program objectives at minimal additional risk
to the program.

Question. What are the cost, schedule, and performance risks associated vnth re-
phasing the program funds and ehminating test activity?

Answer. The cost, schedule, and performance risks of the EELV program are
greatly reduced by the combination of the rephasing of approximately $500 million
from the outyears into fiscal year 1998-2001 (added to the $400-600 million identi-
fied in the original RFP for fiscal year 1998-2001) and eliminating one medium
launch vehicle (MLV) tesVdemonstration launch. EMD development activities need
to be accomplished as early as possible in EMD to be able to support the MLV first
operational launch capability in early fiscal year 2002. Each of the design concepts
builds from a modular core system which expand to cover the heavy lift; vehicle
(HLV) capabiHty. This makes it imperative that the initial design development ac-
tivity supporting the MLV operational capability includes consideration of the final
HLV system. The current funding profile supports this concept with acceptable pro-
gram risk.

Question. What is DoD doing to mitigate these risks to assure that the $2 bilUon
development budget will be met and that at least 25 percent savings will be real-
ized?

Answer. The DoD is utilizing competition in the risk reduction phases of the
EELV program (Low Cost Concept Validation and Pre-EMD phases) to get the con-
tractors to refine their design concepts and demonstrate their concept's ability to
meet savings requirements and live within development budget constraints. Con-
tractors are encouraged to trade development costs against recurring costs in the
design of a system to best meet the government's overall program objectives. The
requirement to live within the $2 billion development budget and still maintain
other system requirements has been clearly communicated and in the highly com-

Eetitive environment contractors have been informed that the government wants the
est value. The government has instituted streamlined acquisition principles to en-
sure that the government has adequate insight into the contractors' processes to be
able to adequately identify and mitigate areas of risk. Additionally, EELV imple-
ments Cost As an Independent Variable (CAIV) in which many user requirements
are clearly identified as tradable against cost. When a requirement is shown to be
a cost driver, special attention is given and it is possible that the requirement at
the discretion of the user, could be relaxed if conditions warrant.

Question. How will the DoD ensure program cost savings given that a sole source
contract is planned for EMD and follow-on production contracts?

Answer. Pre-EMD design activities vidll be conducted in a highly competitive envi-
ronment and allow the DoD to ensure they get a best value offer from the respective

367

contractors in their bid for the EMD contract. Many of the activities leading to the
EMD contract allow the government to gain substantial basis for evaluating and ne-
gotiating future production contracts. EELV will develop substantial data for the
government to use in setting its negotiation targets and challenging contractor as-
sertions. Additionally, it is expected that the final EELV contractor will market the
EELV system on the domestic and international commercial markets. Those mar-
kets will be highly competitive commercial markets. Those markets will be highly
competitive and force the contractor to develop a best pricing scheme which will
allow early identification of disparities between the commercial market and govern-
ment negotiated pricing.

Question. What other development or technical challenges is DoD facing on the
program?

Answer. EELV is not a technology development program. It is based on dem-
onstrating and implementing existing technology. By doing so, the program is able
to reduce overall risk and maintain a reasonable development budget. The imple-
mentation of existing technologies in a system-of-systems concept (where launch ve-
hicles, interfaces, infrastructure, and supports systems are all designed to work to-
gether to cover both medium and heavy lift national mission manifest requirements)
allows the program to deliver on its system requirements, including lower life cycle
costs, within a limited development budget. The biggest development and technical
challenge is integrating all the components into the resulting launch system, and
this calls for special attention and emphasis on systems engineering within the
EELV program.

Question. The Moorman report on space launch modernization found that a proc-
ess to bring together defense, intelligence, civil, and commercial launch require-
ments did not exist. The report recommended that a process be institutionalized and
that aU sector's requirements be considered when acquiring a space launch system.
What is DoD doing to ensure that EELV will be capable of launching commercial
satellites?

Answer. EELV will be capable of launching DoD, intelligence, civil, and commer-
cial satellites. The DoD has taken several steps to ensure that the commercial
launch sector requirements are considered in the EELV program. The National
SpaceUft; Reqvdrements Process (NSRP) has been established as a direct out-growth
of the recommendations of the "Moorman report" and will compile requirements
from all U.S. space sectors. DUSD(Space) is responsible for this process. The pro-
gram office has established a Payload Interface Working Group (PIWG) and a
Standard Interface Working Group (SIWG) with commercial participation to ensure
that EELV design characteristics consider the broad spectrum of future government
and commercial requii*ements. The National Mission Model (NMM) process, main-
tained by Air Force Space Command (AFSPC) to document future launch require-
ments, has been expanded to ensure all projected commercial space launch require-
ments are integrated into the overall set of U.S. space launch projections. NMM
meetings are held semi-annually and have representatives from various government
and commercial interests. Finally, commercial viability was considered in the eval-
uation of proposals for the first phase of the EELV program. Commercial viability
will be evaluated again at the downselect for Pre-EMD later this year and will be
evaluated for the EMD phase downselect in 1998.

Question. What action is DoD taking to develop a standard satellite-launch vehicle
interface to enable commercial satelUtes to be launched on EELV?

Answer. The EELV System Program Office sponsors the Payload Interface Work-
ing Group (PIWG) and a Standard Interface Working Group (SIWG) to address de-
velopment and design of the EELV sateUite-launch vehicle interface. Commercial
satellite manufacturers are encouraged to attend and participate in these working
groups. This allows the commercial satellite industry to understand and incorporate
the developing interface characteristics into their future satellite designs and com-
municate any ideas or concerns to the EELV program office and contractors. Even
though EELV does not plan to fund for commercial unique requirements, most sat-
eUites perform the same types of functions and the commercial needs are generally
encompassed within the same set of requirements established by government sat-
ellites. The common reqviirements basis accentuates the need for open, clear, and
frequent communications diuing the evolving design standardization, which is what
the working groups provide.

Airborne Laser Program

Question. What is the program acquisition strategy for the Airborne Laser (ABL)
system?

368

Answer. The Air Force is currently transitioning ABL from an advanced tech-
nology program to a Major Defense Acquisition Program. Two contractor teams, one
led by Boeing Aerospace and one led by Rockwell International, Eire competing in
a 33 month Concept Design phase. In January 1997, the Concept Design phase will
end and the Air Force will downselect to a single contractor team for a seven year
DemonstrationA^aUdation (DemA^al) phase. During Dem/Val, the contractor will
complete design activity, manufacture and test a half-power high energy laser weap-
on system, integrate the laser weapon system onto a Boeing 747 aircraft, and con-
duct ground and flight testing. After initial testing the DemNal aircraft will con-
tinue to be used in the Engineering and Manufacturing Development (EMD) test
program and also provide Air Combat Command a limited operational capability.
During the EMD phase the contractor will manufacture and test a production rep-
resentative, full power, ABL weapon system. These two Research and Development
aircraft will later be modified to the production configuration and, along with five
ABL aircraft manufactured during production, meet Full Operational Capability
(FOC) by fiscal year 2008.

Question. What is cvirrently funded in the future years defense plan for the Air-
borne Laser Program?

Answer. The fiscal year 1997 President's Budget fully funded completion of the
concept design phase and the initial technology demonstrator effort to design, manu-
facture, and test an ABL aircraft;. The budget contains $56.8 million in fiscal year
1997, $96.7 million in fiscal year 1998, $215.4 million in fiscal year 1999, $219.4
million in fiscal year 2000, and $94.4 milhon in fiscal year 2001. Due to the pro-
gram's initial success and its revolutionary warfighting potential, the ABL is
transitioning from an advanced technology demonstration to a Major Defense Acqui-
sition Program. As such, the Air Force's acquisition strategy has changed to fuUy
support Air Combat Command's requirement to field a fleet of seven ABL aircraft
by fiscal year 2008. The funded DemonstrationA^alidation Phase I effort contains
significant contractor risk reduction activities through fiscal year 2001 including:
high energy laser demonstrations, missUe tracking demonstrations, beam control ar-
chitecture development, detailed engineering design, component level fabrication
and test, test aircraft; procurement and modification, aircraft/weapon system inte-
gration, system-level ground testing, and adjunct mission studies.

Question. What would be the total cost of EMD and follow-on production? Is this
funded in the future years defense plan?

Answer. The total cost of Engineering and Manufacturing Development ($.6 bil-
Uon) and Production ($2.7 biUion) is estimated to be $3.3 billion. The $3.3 bflhon
effort buys five production ABL weapon systems, one refurbished DemA'^al and one
refurbished EMD aircraft modified to the production configuration, for a total fleet
of seven aircraft. The ABL program transitions to EMD in fiscal year 2003. There-
fore, EMD and follow-on production are not ftinded in the cvirrent future years de-
fense plan.

Question. Is this affordable given that the Air Force will be procuring the F-22
in the same timeframe?

Answer. The Airborne Laser Program (ABL) is affordable during the same time-
frame as the F-22. It is the Air Force's number one priority for theater missile de-
fense. Along with the F-22, ABL is required for the Air Force to achieve and main-
tain air dominance into the next century.

Question. BMDO discarded this approach to theater missile defense as technically
infeasible. By what rationale does the Air Force believe that this development is not
technically infeasible?

Answer. BMDO did not reject the ABL as technically infeasible. The first BMDO
Boost Phase Intercept Study in 1992 concurred with the existing AF program to de-
velop the ABL. In 1992, after seriously reviewing the underljdng technology base,
BMDO established a technology program focusing on the ability to propagate laser
beams long distances, horizontally through the upper atmosphere and on technology
to allow the laser to be packaged in an aircraft platform. In parallel, BMDO initi-
ated development of the ABL Demonstrator. Subsequently, the technology and de-
velopment effort was transferred to the Air Force.

During the past three years the government's technology program and the ABL
contractors have tremendously increased confidence in the ability to successftxlly
field the ABL weapon system. The lethality mechanism and laser energy require-
ments have been precisely confirmed with full scale lethality tests. Two series of
upper atmospheric, airborne propagation experiments have been conducted to en-
sure atmospheric models being used to design the ABL are in agreement with exper-
imental results. The ability to maintain the aimpoint and to compensate distortion
caused by upper atmospheric turbulence is being systemically demonstrated at Lin-
coln Laboratory's Firepond test facility. Multiple incoherent illuminators have been

369

shown to dramatically reduce the nonuniformity of the beacon on the target. The
government and both contractor teams have developed subscale Chemical Oxygen
Iodine Laser (COIL) devices which operate at the same performance levels that
ABL's modules are required to meet. These lasers are twice as efficient as the
COILs that existed in 1992 and have been run routinely with a thermally managed
closed-cycle fuel system. These recent successes have reduced the chemical fuel mag-
azines weight and allowed integration of the laser weapon system into the airborne
platform. COILs of the required power can be installed in the ABL carried to alti-
tude, and stay on orbit for extended periods of time.

The government's technology and the contractor's risk reduction work have im-
proved the technological feasibility of the ABL dramatically. The Demonstration/
Validation (Dem/Val) program is specifically designed to continue to reduce tech-
nical risk of the ABL. Very early in the ABL DemA^al contract, the contractor is
required to lase a flight-weighted module of his ABL laser at full power. In addition,
a series of active tracking tests against boosting missiles is just beginning at White
Sands Missile Range. These tests will be completed before the Deni/Val Preliminary
Design Review conducted in 1998 and wiU also significantly reduce program risk.

Question. Is the Air Force fully coordinating with BMDO with regard to require-
ments definition and integration with other theater missile defensive systems?

Answer. Yes, most definitely. Within the last year, the ABL program was briefed
to the BMDO director and his deputy several times. The Air Force has been in-
volved in architectvire studies conducted by BMDO since 1992, including the BMDO
Boost Phase Intercept Study and the BMDO Capstone Cost and Operational Effec-
tiveness Analysis (COEA). In addition, BMDO is participating in the ongoing Air
Force ABL COEA. Air Combat Command's ABL, requirements are consistent with
the capstone Joint Operational Requirements Documents for Theater Missile De-
fense and support the joint theater missile defense architecture.

Question. One of the technical problems that must be overcome on the Airborne
Laser Program is "beeun attenuation." That is being able to lock a laser beam stead-
ily on a target for a sufficient period of time to destroythe target. This would sug-
gest that the platform hosting the laser system would need to be inherently stable.
Describe what is being done to overcome the technical problem of "beam attenu-
ation."

Answer. The term "beam attenuation" is a misnomer. "Beam attenuation" refers
to the absorption of the High Energy Laser (HEL) beam in the atmosphere, which
for the ABL wavelength and geometries is less than 10% and therefore is not an
issue. The real challenge for ABL is beam jitter and distortion. ABL beam jitter
comes from two sources.

The first is from the aircraft mechanical and acoustical environment which causes
the mirrors in the optical train to vibrate, thus creating jitter in the outgoing beam.
This potential problem is being aggressively dealt with in the ABL design. Both con-
tractors are biiilding detailed computer models of the vibration sources, vibration
isolation, and vibration stabilization systems. The turret designs are being opti-
mized using wind tunnel tests to minimize the mechanical and acoustical disturb-
ances generated. All of the optical components are mounted on optical supporting
structure which is also mechanically isolated from the aircraft floor. Both contractor
teams have developed inertial stabilization schemes to insure the ABL aircraft pro-
vides a stable platform.

The second source of beam degradation at the target is caused by the effects of
atmospheric turbulence on the laser beam used to track boosting missiles. This is
considered to be the highest technical risk of the ABL program and is being worked
aggressively. High fidelity wave optics simulations, which have been anchored to ex-
perimental propagation data, show that the stability achievable will allow the ABL
to meet its performance requirements. Next year, scaled ground experiments at Lin-
coln Labs will demonstrate the ability to track a missile and produce a stable, at-
mospherically compensated beam at the target. In addition, active tracking will be
demonstrated over the next year against boosting missiles using the Sealite Beam
Director at the White Sands Missile Range. Both test programs are on schedule and
have produced initial results which are encouraging. Both contractors are testing
their fine tracking systems using laboratory brassboards that replicate "real world"
atmospheric jitter.

Question. Would not a mobile ground based laser system be a more stable plat-
form than an airplane as envisioned in the Air Force architecture?

Answer. Mobile ground based laser systems operate at very short ranges and are
only suitable for use in the terminal phase against theater ballistic missiles (TBMs).
The Airborne Laser provides a first tier capability by destroying TBMs early in
boost phase. The system provides a strong deterrent not to launch missiles, particu-
larly those armed with nuclear, biological or chemical warheads, since ABL will de-

370

stroy TBMs early in flight so they fall inside enemy territory. Mobile ground laser
systems are not effective against TBMs in boost phase since they must be positioned
very near enemy TBM launch points (due to the reduced range caused by the effect
atmosphere and clouds have on laser energy). The ABL system overcomes this effect
by flying and destroying boosting TBMs above the clouds and well above most of
the atmosphere. In addition, a ground-based high energy laser system would require
substantial airlift resources and an extended deployment time. The ABL weapon
system will self-deploy worldwide within 14 hours, fully combat ready, and will as-
sume an immediate combat air patrol.

Question. What if any environmental effects are there from employing an airborne
laser system?

Answer. No significant environmental impacts have been identified to date. The
ABL program is proceeding in full compliance with the National Environmental Pol-
icy Act and all other environmental regulatory requirements. Environmental Impact
Statement (EIS) scoping activities were started in September 1994 and have in-
volved all of the appropriate Air Force agencies and both ABL contractor teams.
Public scoping meetings have been held at the potential home bases and testing
ranges. Since environmental and safety concerns are a primary concern in the ABL
design, the contractors have been and will continue to be, an integral part of the
EIS process. The EIS process is ongoing with public hearings scheduled for the early
fall of 1996. The final EIS and Record of Decision is scheduled for May 1997.

Care/Maintenance of Conventional Ammunition

Question. As the Single Manager for Conventional Ammunition, the Army has the
responsibility to store and maintain ammunition for all the services. Last year, the
Congress appropriated $300 million for this effort. This year the Army is requesting
$162 million. Are you satisfied with the current service you receive from the Army
for conventional munitions storage and maintenance? If not, why?

Answer. Our experience Avith the individual Army depots is generally very posi-
tive. Unfortunately, they are only funded to do a small part of their assigned mis-
sion, creating problems with their abiUty to effectively maintain the stockpile and
perform adequate inventory, surveillance, maintenance, and rewarehousing duties.
We have experienced some specific problems with our munitions stored at the Army
depots and are working with the Army to resolve them. However, the funding short-
fall carried forward from year to year is becoming insurmountable and the "get-well"
is being pushed further into the outyears.

Question. Does it concern you that the Army is requesting less money this year
then last year's appropriated amount? If yes, why?

Answer. Yes, we are very concerned with less fianding for depot operations. We
have already experienced degradation problems with our munitions stored at Army
depots and anticipate the situation will continue to deteriorate without sufficient
funding. Decreased fiinding will impact our ability to move munitions in and out
of the Army depots. If sufficient funds for "issues" are not available, we will be un-
able to call forward munitions for theaters' war reserve materiel (WRM) stocks,
training and the Afloat Preposition Fleet cargo modernization initiative. Insufficient
funding for "receipts" will impact on our ability to continue theater modernization
programs to remove non-tasked munitions and replace them with preferred modern
munitions.

Other Procurement, Air Force

Question. General Haines, last year the Committee added substantial funds for
equipment which was necessary but not glamorous or high profile. Much of this type
of^ equipment is included in the "Other Procurement" account of the Air Force. How
well did the "Other Procurement" account do in the fiscal year 1997 budget? I note
that most of the subaccounts are decreased.

Answer. Our request in fiscal year 1997 is eight percent less, in terms of real
growth, than the amount appropriated in this account last year. This is primarily
due to a $25 million decrease in our Spares and Repair Parts budget program, and
a $35 million decrease across the account due to revised economic assumptions. The
reduction to Spares and Repair Parts brings the program in line with historical
spending outlay rates and a change in Air Force spares policy that eliminates the
need for separate types of spares categories. Our request contains a moderate
amount of risk in that replacements for some older equipment items such as vehi-
cles, bare base, and base maintenance and support equipment have been deferred
beyond fiscal year 1997.

Question. Provide for the record the shortfalls in your budget request, ranked in
priority.

371

Answer. The following items are high priority requirements that are either needed
to sustain our data systems, improve our readiness posture, of fill holes in the in-
ventory.

60K Loader — $23.1 million: Accelerates procurement by 20 loaders in fiscal year
1997. Acceleration is critical for meeting Global Reach laydown goals or rapidly de-
ploy combat forces and operate from bare bases. Replaces unreliable 40K Loaders,
which are 15 years beyond service life, and a portion of the Wide Body Elevator
Loaders (WBEL). Provides increased lifting capacity, services a wider variety of air-
craft, is more reliable and more rapidly deployable.

JFACC Situational Awareness System (JSAS) — $9.5 million: Procures 11 systems
in fiscal year 1997. Air Force plan is to procure 5 systems in fiscal year 1996
through below-threshold reprogramming. Provides a situational awareness tool that
shows the Joint Forces Commander an integrated image of where his "eyes and
ears" are looking/listening and what they are seeing/hearing. Result: A fused multi-
source display of air, sea, land and spaces forces focused on dominant battle space
awareness.

Replacement Vehicle Equipment — $140.0 million: Six year fix of vehicle program
will procure 40,000 vehicles to fill shortages and replace aging mission-critical vehi-
cles. Current fiinding supports less than 10% of the annual requirement. Additional
funds support Air Force units world-wide including the ANG and AFRES.

Theater Deployable Comm — $64.2 million: Additional funds will provide a robust
communications network for the Joint Forces Air Component Commander/Air Oper-
ations Center/Tactical air bases to process high volume Theater Battle Management
systems information for theater forces during deplo3Tnents/contingencies. Reduces
airlift and personnel required for deployment of this system by 57% and 29% respec-
tively.

Base Information Infrastructure — $76.5 million: Additional funds complete 44 Air
Force Base's intrabase networks enabling the processing of command and control in-
formation between in-garrison and deployed forces.

Information Protection — $81.0 million: Accelerates procurement of base informa-
tion protection (BIP) tools to guard our bases from unauthorized electronic intru-
sion— hackers, electronic terrorists, and spies. Procurement will allow detection of
intrusion into our command, control, communications and computer systems world-
wide. Part of BII hardware and software protect against hackers, hardware, soft-
ware and training.

Demand Access Multiples Assignment (DAMA) — $21.2 million: Insures avail-
ability of DAMA voice communications to Air Force combat forces and interoper-
ability between commands and services. DAMA allows ultra high frequency satelUte
channel sharing — can increase capacity tenfold. Accelerated funding modifies re-
maining 64% of terminals.

Question. Your prepared statement mentions that the Air Force is "short 2,360
vehicles, and has an additional 37,675 that exceed age and mileage criteria." How
adequately does the fiscal year 1997 budget request address this shortfall? How ade-
quately does the Future Years Defense Program address this shortfall?

Answer. Because of competing priorities within the DoD and the Air Force, the
fiscal year 1997 President's Budget request falls short of addressing the shortfall.
In fact, the shortfall increases from approximately 40,000 vehicles to approximately
45,000 vehicles by the end of the fiscal year 1997 funded delivery period. The short-
fall increases to approximately 55,000 vehicles by fiscal year 2001. An initiative has
been developed for the fiscal 1998 Air Force POM which, if funded as developed,
would reduce the shortfall gradually over a six year period to 15,000 vehicles by fis-
cal year 2004. Ranked third in our shortfall list is a vehicle line for $140 million
which would permit the six year initiative to begin a year earlier.

Question. Last year testimony indicated that many of the Air Force aircraft cargo
loaders were well beyond their "life expectancy" and were breaking down frequently.
The Committee added funds for new generation "60K loaders." Are these 60K load-
ers entering the inventory yet?

Answer. Three loaders have been produced and are currently undergoing first pro-
duction tests at the contractor's facility. A fourth loader is scheduled to be produced
this month. These four Low Rate Initial Production (LRIP) loaders are scheduled
to be accepted and turned over to the Air Force in June 1996. The first two LRIP
loaders will be shipped to Travis AFB, CA for start of Initial Operational Test and
Evaluation and the remaining LRIP loaders will be fielded at major aerial port units
such as Travis, Dover, and Pope Air Force Bases.

Question. How important are they for increasing of the Air Force's air cargo sys-
tem?

Answer. The 60K loaders are essential to meet cargo throughput requirements.
They are necessary to meet deployments in support of the two MRC scenario di-

372

rected by the Defense Planning Guidance. Currently the 40K loader is the backbone
of our aerial port capability and is used mainly at high volume locations. The cur-
rent inventory of 283 40K loaders provides only 75 percent of the number required
to meet a two MRC scenario. In addition, these assets are becoming increasingly un-
reliable due to age (average age is 23 years with 15 percent of the fleet having been
overhauled at least twice) with an average mean time between failure of 10 hours.
The 60K loader will replace the 40K loader as the strategic aerial port workhorse
and more importantly will have the enhanced capability to reach and directly inter-
face with wide-bodied aircraft which the 40K does not possess. Additionally, the 60K
loader will have a six pallet payload versus five for the 40K and will provide, for
the first time, a capability to handle the Army air drop requirement of 60,000
pounds. The Air MobiUty Command estimates the 60K loader will provide the capa-
bility to increase throughput by 1,118 short tons daily.

Question. Is the fiscal year 1997 request for these loaders adequate to meet your
requirements?

Answer. No. We need a total of 318 60K loaders. Sixty loaders were ftinded
through fiscal year 1996, leaving a balance of 258 to be procured across the Future
Years Defense Program. The fiscal year 1997 funding request is for 37 loaders, how-
ever, the contractor has the capacity to produce 57. Accelerating the program by in-
creasing fiscal year 1997 procurement quantities to the contractor's capacity would
require an additional $23. 1 million over and above the fiscal year 1997 request. This
requirement is priority one on the list of Other Procurement shortfalls which will
be provided in response to your earUer question.

Question. As noted in your statement, $102.4 milUon is requested for the Range
Standardization and Automation (RSA) program to overhavd and modernize the
Eastern Test Range at Patrick Air Force Base and the Western Test Range at Van-
denberg Air Force Base. What is the total cost of this upgrade? When will it be com-
plete?

Answer. The total cost of the RSA upgrade for all Air Force appropriations is $877
milUon. The RSA program will be complete in fiscal year 2006. For clarification, the
requested $102.4 million of OPAF procurement funds includes the entire Spacelift
Range System modernization program. RSA ($43.5 million). Eastern Range Im-
provement and Modernization (I&M) ($27.2 milUon), and Western Range I&M
($31.7 million).

Question. What are the major benefits which will accrue from the upgrade?

Answer. There are multiple benefits which will accrue from the upgrade, namely:
(1) Reduced operations costs with fewer operators and maintainers needed due to
consoUdation, remote control and automation; (2) Reduced maintenance costs where-
by total equipment wiU be reduced by up to sixty-five percent, the number of instru-
mentation sites and facilities will be reduced, and reliability and maintainability
will be greatly improved, and (3) Improved functionality and responsiveness of the
ranges with automated range planning and scheduling, computerized range configu-
ration setup, control and certification, and adequate communications to allow cen-
tralized processing. These combined efforts will reduce range turnaround time be-
tween major operations from the current two-three days to less than four hours.

Question. A total of $125.7 million is requested for the "Base Information Infra-
structure" program which will upgrade the communications infi'astructure at many
Air Force locations. The request is up significantly from the current year level of
$58.9 milUon. What is the urgency of proceeding at such a rapid pace in this pro-
gram?

Answer. The Department of Defense directed the Air Force to upgrade the com-
munications infrastructure at sixty percent of our bases (FY 1996-2001) and at one
hundred percent of Air Force bases as soon as possible thereafter to meet the tenets
of the Defense Information Infrastructure and National Information Infrastructure.
Base Information Infrastructure must be in place to support the planned programs
for the warfighter such as the Wing Command and Control System (WCCS) and the
Contingency Theater Automated Planning Systems (CTAPS) as well as for base op-
erating systems such as finance, contracting, weather tracking, and intelligency
gathering. Without an adequate transport capability, communications operations
will either not operate or will operate at less efficient and more costly levels. In-
terim transport capability will be required with inherent installation delays in vital
communications programs, costly logistics tails and interoperability problems.

The sharp increase in fanding can be attributed to two factors: (1) To meet DoD
implementation goals, the Air Force transferred $45.6 million of Air Force Oper-
ations & Maintenance (O&M) funding to OPAF for central management of Base In-
formation Infrastructure upgrades; and (2) $21.2 million of Air National Guard
(ANG) funding which had been moved to O&M under the revised DoD expense/in-

373

vestment policy was transferred back to OPAF for central management of ANG
modernization.

Question. Provide for the record the bases which would be upgraded and include
a brief description of the upgrades:

Answer. A total of 107 bases are scheduled for modernization. In fiscal year 1997
the following bases will receive upgrades:

Langley AFB Virginia

Charleston AFB South Carolina

Travis AFB California

EgUn AFB Florida

Westover AFB Massachusetts

Vandenberg AFB California

Randolph AFB Texas

Seymour Johnson AFB North Carolina

Grand Forks AFB North Dakota

Aviano AB Italy

Pope AFB North Carohna

Homestead AFB Florida

Bases are being upgraded according to an approved Air Force prioritized listing
based on Air Force mission. The upgrades lOr each base are detailed and are mis-
sion specific. However, the major components of the Base Information Infrastructure
program are the information transport system, digital switching system, network
control center and network information protection system.

Acquisition Program Issues

Question. Should extra funds be made available for the Defense Department this
year, the Committee would like to know where some investments can be made
which have potentially high payback. What are the top ten unfunded requirements
in each R&D and procurement account in yoiu" service?

Answer.
R&D

1. GPS Space Segment

2. AWACS Extend Sentry

3. AWACS Reengine

4. Link 16

5. Precision Guided Munitions

6. JFACC Sit Aware System

7. JPATS

8. Band 1.5

9. Theater Missile Defense

Procurement

1. JSTARS

2. F-15E

3. F-16

4. GPS Space Segment

5. AWACS Ext Sentry

6. AWACS Reengine

7. RC-135 Reengine

8. Link 16

9. C130J

10. Precision Guided Munitions.

In addition, we have recently identified an unfunded priority to procure and in-
stall GPS equipment. This includes interim GPS systems which are handheld units
with appropriate displays for aircraft awaiting permanent installation. For the 89th
AirUft Wing this accelerates GPS and installs flight data recorder/cockpit voice re-
corder on assigned aircraft. Distinguished Visitor, and Operational Support Airlift
aircraft. It also installs traffic alert and collision avoidance system, emergency loca-
tor transmitter, and ground proximity warning system on 89th Airlift Wing assigned
aircraft to include Distinguished Visitor, and Operational Support Airlift aircraft.
Finally, accelerates GPS on all Air Force passenger carrying aircraft not designated
as 89th Airlift Wing, Distinguished Visitor, and Operational Support Airlift aircraft.

Question. Identify all production programs for which funds are included in the fis-
cal year 1997 budget request where fiscal constraints have prevented acquisition of
sufficient quantities in either fiscal year 1997 and'or the accompanying FYDP to
meet validated military requirements/inventory objectives.

Answer.

JSTARS; Additional fiscal year 1997 procurement funds is ranked number one on
the CSAFs fiscal year 1997 plus-up list. The initiative to procure 2 additional E-
8C Joint STARS aircraft in fiscal year 1997 would allow the program to be fielded
earUer and cheaper. The initiative would require $450.0 million fiscal 1997 procure-
ment (3010) funding and $16.0 million in fiscal year 2001 operations and mainte-
nance (3400) funding. Fielding of these two aircraft would occur in fiscal year 2001
versus fiscal year 2005.

Estimated Potential Savings, Addition of 2 E-8Cs in fiscal year 1997
Requires $450.0 million ($390.0 million for aircraft, $60.0 million for spares)

374

Flyaway cost, 2 E-8Cs: $480.3 million ($240.15 million per E-8C)
Flyaway cost, 4 E-8Cs: $870.3 million ($217.57 million per E-8C)
Flyaway cost savings: $22.68 million per E-8C, x4=$90.72 million

F-15E Attrition Reserve Aircraft: To meet the 20 Fighter Wing Equivalents (FWE)
Bottom Up Review (BUR) force, the Air Force needs to procvire 12 F-15E attrition
reserve aircraft in addition to the 6 procured in fiscal year 1996. These aircraft must
be procured no later than fiscal year 1998 to take advantage of current foreign mili-
tary sales (FMS) to Israel and Saudi Arabia. Fiscal constraints limited the fiscal
year 1997 PB to 4 aircraft. The fiscal year 1997 Plus-up Priorities List requested
an additional $152.9 million. The Air Force now plans to equip the aircraft with
LANTIRN pods from existing inventory, removing the need for $33 million budgeted
for LANTIRN pods. Therefore, an additional $119.9 miUion $152.9 milHon— $33.0
million would fund 2 additional aircraft ($67.5 million and provide advance procure-
ment funds for the remaining 6 aircraft in fiscal year 1998 ($52.4 miUion). The fiscal
year 1997 PB includes $185.4 million for 4 aircraft, so the total required funding
for 6 aircr?ft in fiscal year 1997 plus advance procurement for 6 aircraft in fisced
year 1998 is $305.3 million.

F-16 Attrition Reserve Aircraft: To meet the 20 FWE BUR force, the Air Force
needs to procure 114 attrition reserve aircraft in addition to the 6 procured in fiscal
year 1996. Fiscal constraints limited the fiscal year 1997 PB to 4 aircraft. An addi-
tional $59.4 million would fund 2 additional aircraft ($49.4 million and provide ad-
vance procurement funds for 6 aircraft in fiscal year 1998 (10.0 million). Total fiscal
year 1997 funding for 6 aircraft plus advance procurement for fiscad year 1998 is
$174.1 miUion.

C-130J: The fiscal year 1997 request includes $71.9 million in funding for one air-
craft and limited support equipment. Combat delivery and certain special mission
C-130Js wiU start reaching service life shortly after the turn of the century and re-
quire a modernization effort to begin now. In addition, USAF continues to realize
a shortfall in support funding for prior year C-130J procurements. An additional
$408.5 milUon fiscal year 1997 would procure an additional five aircraft. This initia-
tive is ranked number nine on the CSAF's fiscal year 1997 plus-up list.

AGM-130: The AGM-130 was programmed for procurement through the FYDP in
previous Air Force budgets, but was eliminated due to past fiscal constraints. Pro-
ciu-ement of this weapon was programmed to end in fiscal year 1995, with the fiscal
year 1996 budget being used for the retrofit of existing weapons with mid-course
guidance and infrared seekers. The fiscal year 1996 Congressional plus-up of $40
million added 100 All-Up-Rounds (AURs) to the programmed AGM-130 buy of 502
AURs. A valid Air Force requirement (non-nuclear Consumables Annual Analyses —
NCAA) exists for over 1,000 AGM-130s. The AGM-130 plus-up option of 100 weap-
ons ($40 milUon) was included on the CSAFs fiscal year 1997 Plus-Up List as pri-
ority #10.

Sensor Fuzed Weapon (SFW): Sensor Fuzed Weapon prociu-ement was limited to
400 weapons due to fiscal constraints. The Air Force requested Congress to add
$21.5 million to SFW procurement as part of its fiscal year 1997 Plus-Up Priorities
List (#10 Precision Guided Munitions). The additional funds will procure an addi-
tional 100 weapons for a total of 500 which is considered the SFW minimum sus-
taining production rate.

60K loader: The fiscal year 1997 request included $40.3 million in funding for 37
loaders to replace the current 40K loader fleet. Over 80% of the existing loaders
have exceeded their service life and need to be replaced as soon as possible. The
Air Force could accelerate their replacement if $23.1 million additional funding was
available in fiscal year 1997 to procure an additional 20 loaders (fiscal year 1997
maximum plant capacity is 57 units). This initiative is ranked number 11 on the
CSAF's plus-up list.

Question. What initiatives are currently approved in an outyear POM which could
either be done more cheaply and/or be fielded earlier by initiating them in fiscal
year 1997? Indicate program by appropriation account along with an estimated
fiinding stream for each of the five subsequent fiscal years (assuming a fiscal year
1997 start) along with the potential savings that could be achieved.

Answer.

JSTARS: The initiative to procure 2 additional E-8C Joint STARS aircraft would
be done more cheaply and be fielded earlier by accomplishing this in fiscal year
1997. The initiative would require $450.0 miUion fiscal year 1997 procurement
(3010) funding and $16.0 million in fiscal year 2001 operations and maintenance
(3400) funding. Fielding of these two aircraft would occur in fiscal year 2001 versus
fiscal year 2005.

Estimated Potential Savings, Addition of 2 E}-8Cs in fiscal year 1997
Requires $450.0 million ($390.0 million for aircraft, $60.0 million for spares)

375

Flyaway cost, 2 E-8Cs: $480.3 million ($240.15 million per E-8C)
Flyaway cost, 4 E-8Cs: $870.3 million ($217.57 million per E-8C)
Flyaway cost savings: $22.68 million per E-8C, x4=$90.72 million
AWACS: The AWACS Extend Sentry effort, currently on the CSAF fiscal year
1997 Plus-up Priorities List, is a candidate for earlier and cheaper "fielding." Extend
Sentry is an aggressive sustainment effort which takes the AWACS program into
the 21st century, decreases aborts, and addresses Reliability, Maintainability and
Availability (RM&A) issues. Extend Sentry is not a program per se, but a com-
prehensive list of individual projects (100+) with a common goal of increasing air-
craft availability through reduced maintenance/depot downtime and addressing
long-standing operational deficiencies. The AWACS Extend Sentry "program" was
initiated in Dec 94, with RDT&E, procurement and O&M funding totaling $114.1
million (funding across FYDP with the majority of the effort in fiscal year 1996/
1997) The Extend Sentry funding breakout, within the overall AWACS Program, is
located in PE 274 17F as shown below:

Total
1996 1997 1998 1999 2000 2001 in mil-
lions

3600

3010

3400

29.5

18.3

0.0

47.8

35.9

8.5

5.4

5.3

5.1

65.7

0.6

0.0

0.6

Total

66.0

26.8 55

54 53

5.1

114.1

As currently envisioned, the funding requirement to complete the Extend Sentry
effort (on top of the $114.1 million mentioned above) breaks out as follows:

1997

1998 1999

2000 2001

2002

Total
in Mil-
lions

3600 Req't 293 37.5 4 1 13 3 0.0 7 2 91 4

3010 Req't 36.1 464 700 90 9 51.0 35.6 330.0

3400 Req't 7 1 91 4 2 2 8 1.8 2.3 27.3

Total 72.5 93.0 78.3 107.0 52.8 45.1 448.7

The savings achieved by any additional fiinds in fiscal year 1997 is difficult to
quantify; however, complete funding of Extend Sentry would provide the AWACS
program with a cumulative savings of 106,000 maintenance man-hours, 61,000 on-
equipment maintenance hours, and 41 Programmed Depot Maintenance (PDM) days
per aircraft annually. In addition, the AWACS fleet would have 145 fewer aircraft
aborts annually. Effectively, Extend Sentry "buys back" 1.5 "equivalent aircraft"
from maintenance and supply, thus providing increased availability to meet CINC
tasking. It is important to note that, as a collection of individual projects. Extend
Sentry can be implemented on an incremental basis consistent with available fund-
ing. Any increase in funding will allow the incremental achievement of program ob-
jectives at an earlier date.

Link-16: The CSAF's fiscal year 1997 Plus-Up List includes Link-16 at number
8. The Air Force is requesting these funds to accelerate Link-16 delivery to the RC-
135 fleet, complete Link-16 installation in the Modular Air Operation Centers
(MAOC), and replace the lost Senior implementation study across all strike aircraft
and begin Line-16 integration on the F-15E. F-16 and B-1 platforms. The following
details the breakout of the fiscal year 1997-00 CSAF Plus-Up Ust for Link-16:

Chiefs List FY1997 FY1998 FY1999 FY2000 Total FY1997

PE 73.9

Senior Span: Proc 35154F 8.0

RC-135: Proc 35154F 8.0

MAOC: Proc 27438F 2.2

RDT&E64226F 13.0

Proc 11126F

F-15E:

RDT&E27134F 29.0

Proc 27134F

173.1

110.0

55.0

412 0

P-l/R-1

3.0

11.0

20.5
12.5

35.0
28.0

2.2

58 5

92.0

38.1

112.0

.. .. 63

13.6
48.0

120

132

33.0

61.0

376

FY1997 FY1998 FY1999 FY2000 Total FY1997

F-16: RDT&E27133F 13.7 50.0 14.0 10.0 87.7 131

•Phasing of RDT&E and Procurement funds in FY1998 and beyond is being investigated to match B-1 block modification schedule.

In addition, potential savings could be achieved through inflation and combining
integration efforts across multiple platforms. The RC-135 procurement and the F-
16 RDT&E are funded outyear requirements. Therefore, savings from inflation on
these dollars would accrue. However, much larger saving will be realized due to the
generic integration effort this accelerated funding would put in place. Combining in-
tegration across multiple platforms, versus the platform specific integration of the
past, has great potential to field systems earlier while reducing costs. However, the
Air Force needs time to develop specific savings.

C-130J: The fiscal year 1997 request includes $71.9 million in funding for one air-
craft and limited support equipment. An additional $408.5 million in fiscal year
1997 would procure an additional five aircraft. The C— 130J Program could a/save
approximately 6% on aircraft unit costs by procuring two aircraft; instead of one and
approximately 9% procuring 5-11 aircraft per year. Required funding for fiscal year
1997 and beyond follows:

Fiscal years—

1997

1998 1999

2000

2001

Total requirement

480.4

416.6 419.5
6 6

523.7
6

441.5

QTY

The above figures include funding to acqmre six aircraft each year. Lockheed Mar-
tin's C-130J proposed unit costs are based on total US Government sales for a given
year. The Air Force may not realize a reduction in the unit cost of the aircraft if
the C-130J procurement rate is not increased. This initiative is ranked number nine
on the CSAF's fiscal year 1997 plus-up list.

AGM-130: The AGM-130 was programmed for procurement through the fiscal
year DP in previous Air Force budgets, but was reduced due to past fiscal con-
straints. The fiscal year 1996 Congressional plus-up of $40 million added 100 All-
Up-Rounds (AURs) to the programmed AGM-130 buy of 502 AURs. A valid Air
Force requirement (Non-nuclear Consumables Annual Analysis — NCAA) exists for
over 1,000 AGM-130s. The AGM-130 plus-up option of 100 weapons ($40 million)
was included on the CSAFs fiscal year 1997 Plus-Up list at #10. An increase of $40
million will not reduce unit costs

60K Loader: The Air Force is piu-suing options in the Fiscal Year 1998 POM to
accelerate 60K loader acquisition; however, final Fiscal Year 1998 POM funding is
not yet approved. Additional 60K loader acceleration can be gained if the program
receives the $23.1 million Fiscal Year 1997 plus-up for 20 units as described in the
question HC-0 1-102 response. Acceleration would reduce our Fiscal Year 2001 re-
quirement but actual dollar savings would be minimal. Savings would primarily be
limited to the inflation on the cost of 20 units.

PW-220E Engine Program.

Appropriation Description: Upgrades FlOO-PW-lOO engines to the PW-22E con-
figuration for F-15A-D aircraft. Provides improved safety, performance, reliability
and operability, reduced maintenance and logistics support and reduced life cycle
cost.

Estimated Funding:

Fiscal years —

1997 1998 1999 2000 2001 Total

PW-220E Engine 47.0 94.0 95.9 47.9 0.0 284.8

This funding would accelerate the start of this program by one year, and complete
it in four instead of the six years as planned in the Fiscal Year 1998 POM.

Estimated Savings: Savings under this accelerated schedule would accrue in two
categories, Acquisition Cost (over the FYDP) and Operations and Support Cost re-
ductions/avoidance over twenty years.

Category Then year $ (millions)

Acquisition (over the FYDP) 55

377

Category Then year $ (millions)

Operations & Support (Life Cycle Costs over 20 years) 199

Total Savings 254

UHF SATCOM DAMA: The UHF SATCOM DAMA program is listed as #29 on
the Chiefs Plus-Up List. The UHF SATCOM DAMA program (within the
MILSATCOM Terminals Program Element) would benefit as follows:

Below is the desired Fiscal Year 1997 Plus-Up List funding with four subsequent
years.

Fiscal years—

1997

1998 1999

2000

2002

Plus-Up Procurement

212

45.6 57.3

64.0

46 3

• Earlier fielding. The estimated funding stream, as compared to the POM initia-
tive outyear funding stream, procures DAMA-capable terminals approximately two
years earlier.

• Comply with mandate sooner. JCS Mandate (MCM-89-94, dated 28 Jul 94) re-
quires all UHF SATCOM to be DAMA-capable by 30 Sep 96, with waivers possible
through 30 Sep 98. The Plus-Up funding stream helps satisfy this requirement soon-
er.

• Inflation cost savings. A $21.2 million plus-up in Fiscal Year 1997 would save
$3.7 million in inflation costs.

• Savings by gaining UHF SATCOM access. JCS estabUshed DAMA techniques
to automatically assign users and time-share the UHF SATCOM channels. How-
ever, a lack of available controller resources still results in routine rejections of valid
requests for service. Commercial service has been used in the past for critical com-
munications that were denied UHF SATCOM. In one instance, costs were $1.5 mil-
lion for three months of service. This funding not only would improve users' access
to UHF SATCOM, but it would also provide lau-ge opportunity costs/savings as well.

• Savings from smooth production run. Fiscal Year 1996 aircraft procurement
budget is $11,344 million for UHF SATCOM portable DAMA terminal upgrades and
there is a gap in Fiscal Year 1997. Increased Fiscal Year 1997 funds would elimi-
nate this gap, thus providing a) continuous production through Fiscal year 1998 and
b) eUminating the cost of an fiscal year 1998 production re-st£ut.

Question. Provide a list of R&D or production programs or projects for which fund-
ing is included in the fiscal year 1997 budget that are stretched out beyond tech-
nically attainable schedules primarily due to lack of funding in either fiscal year

1997 and/or the outyears.
Answer. The following provided:

JSTARS: Additional fiscal year 1997 procurement funds is ranked number one on
the CSAF's fiscal year 1997 plus-up List. The initiative to procure 2 additional E-
8C Joint STARS aircraft in fiscal year 1997 would allow the program to be fielded
earlier and cheaper. The initiative would require $450.0 million fiscal 1997 procure-
ment (3010) funding and $16.0 miUion in fiscal year 2001 operations and mainte-
nance (3400) funding. Fielding of these two aircraft would occur in fiscal year 2001
versus fiscal year 2005.

Estimated Potential Savings, Addition of 2 E-8Cs in fiscal year 1997
Requires $450.0 million ($390.0 million for aircraft, $60.0 miUion for spares)
Flyaway cost, 2 E-8Cs: $480.3 million ($240.15 million per E-8C)
Flyaway cost, 4 E-8Cs: $870.3 million ($217.57 million per E-8C)
Flyaway cost savings: $22.68 milUon per E-8C, x4=$90.72 million
F-15E Attrition Reserve Aircraft: To meet the 20 Fighter Wing Equivalents (FWE)
Bottom Up Review (BUR) force, the Air Force needs to procure 12 F-15E attrition
reserve aircraft in addition to the 6 procured in fiscal year 1996. These aircraft must
be procured no later than fiscal year 1998 to take advantage of current foreign mih-
tary sales (FMS) to Israel and Saudi Arabia. Fiscal constraints limited the fiscal
year 1997 PB to 4 aircraft. The fiscal year 1997 Plus-up Priorities List requested
an additional $152.9 million. The Air Force now plans to equip the aircraft with
NATIRN pods from existing inventory, removing the need for $33 million budgeted
for LANTIRN pods. Therefore, an additional $119.9 million ($152.9 million— $33.0
million would fund 2 additional aircraft ($67.5 million and provide advance procure-
ment funds for the remaining 6 aircraft in fiscal year 1998 ($52.4 million). The fiscal
year 1997PB includes $185.4 million for 4 aircraft, so the total required funding for
6 aircraft in fiscal year 1997 plus advance procurement for 6 aircraft in fiscal year

1998 is $305.5 miUion.

378

GPS Navigation Warfare (NAVWAR): The NAVWAR effort is underway devel-
oping a robust means of protecting our military GPSusers while denying GPS to
hostile forces. A plus-up of $25 million in fiscal year 1997 would accelerate com-
prehensive testing and evaluation of the most promising solutions for ground-based
and space-based protection and denial techniques. The outyear tail associated with
this program is $75 million.

C-130J: The fiscal year 1997 request includes $71.9 million in funding for one air-
craft and limited support equipment. Combat delivery and certain special mission
C-130Js will start reaching service Ufe shortly afl^r the turn of the century and re-
quire a modernization effort to begin now. In addition, USAF continues to realize
a shortfall in support funding for prior year C-130 procurements. An additional
$408.5 million in fiscal year 1997 would procure an additional five aircraft. This ini-
tiative is ranked number nine on the CSAF's fiscal year 1997 plus-up list.

AGM-130: The AGM-130 was programmed for procurement through the FYDP in
previous Air Force budgets, but was eliminated due to past fiscal constraints. Pro-
curement of this weapon was programmed to end in fiscal year 1995, with the fiscal
year 1996 budget being used for the retrofit of existing weapons with mid-course
guidance and infrared seekers, the fiscal year 1996 Congressional plus-up of $40
million added 100 All-Up-Rounds (AURs) to the programmed AGM-130 buy of 502
AURs. A valid Air Force requirement (Non-nuclear Consvunables Annual Analysis-
NCAA) exists for over 1,000 AGM-130s. The AGM-130 plus-up option of 100 weap-
ons ($40 million was included on the CSAFs fiscal year 1997 Plus-Up List at pri-
ority #10.

Sensor Fuzed Weapon (SFW): Sensor Fuzed Weapon procurement was Limited to
400 weapons due to fiscal constraints. The Air Force requested Congress to add
$19.1 million RDT&E and $21.5 miUion to SFW procurement as part of its fiscal
year 1997 Plus-Up Priorities List (#10 Precision Guided Munitions). The additional
funds will continue P3I and procure an additional 100 weapons for a total of 500
which is considered the SFW minimum sustaining production rate.

60K loader. The fiscal year 1997 request included $40.3 million in funding for 37
loaders to replace the current 40K loader fleet, over 80% of the existing loaders have
exceeded their service life and need to be replaced as soon as possible. The Air Force
could accelerate their replacement if $23. 1 miUion additional funding was available
in fiscal year 1997 to procure an additional 20 loaders fiscal year 1997 maximum
plant capacity is 57 units), this initiative is ranked number 11 on the CSAF's plus-
up list.

PW-220E Engine Program:

Appropriation Account: Aircraft procurement, Air Force (3010, BPllOO)

Program Description: Upgrades FlOO-PW-lOO engines to the PW-220E configura-
tion for F-15A-D aircraft, provides improved safety, performance, reliabiUty and
operability, reduced maintenance and logistics support and reduced life cycle cost.

[TY$f

Millions]

Fiscal years —

Total

1997

1998 1999 2000

2001

PW-220E ENG

47.0

94.0 95.9 47.9

284.8

This funding would accelerate the start of this program by one year, and complete
it in four instead of the six years as planned in the fiscal year 1998 POM.

Estimated Savings: Savings under this accelerated schedule would accrue in two
categories. Acquisition Cost (over the FYDP) and Operations and Support Cost re-
ductions/avoidance, over twenty years.

Category Then year $ (millions)

Acquisition (over the FYDP) 55

Operations & Support (Life Costs over 20 years) 199

Total Savings 254

DAMA Program: The DAMA program requires $21.2 million in fiscal year 1997
for the UHF SATCOM Demand Assigned Multiple Access (DAMA) program. This
funding procures UHF SATCOM DAMA-capable airborne terminals and terminal
upgrades for warfighters with critical communications requirements. The outyear
tail associated with this procurement would be $213.2 million.

379

the outyears. Provide for these programs a comparison of the current acquisition
funding stream compared to a potential multi-year profile (assuming a fiscal year
1997 start), along with the additional up-front investment that would be required
and the potential savings that would be likely.

Answer. Although the Air Force does not currently have any programs which jus-
tify multi-year procurement in Fiscal Year 1997, the following programs will be con-
sidered when stable prociu"ement is established:

JSTARS: The Joint STARS program, in support of its August 1996 Defense Acqui-
sition Board (DAB) review, is assessing the costs and benefits of multi-year procure-
ment. This assessment will not be completed until July 1996; hence, we cannot state
whether Joint STARS is a good candidate for multi-year procurement beginning in
Fiscal Year 1997.

C-130J: The currently programmed low procurement rate of two aircraft per year
does not justify a multi-year procurement. However, the procurement rate is likely
to increase in the post FYDP years. At that time, the Air Force would give serious
consideration to a multi-year contract proposal. The C-130J firm fixed price, 5-year
option contract, currently in negotiation, already provides quantity buy price reduc-
tions and the flexibility to accommodate yearly variations in procurement quan-
tities. This tjTJe of option contract has historically allowed the Air Force to procure
C-130s at "most favored customer" prices. It has the added benefit of not incurring
termination liability costs.

F-22 The F-22 does not begin procurement funding until Fiscal Year 1999 with
the first lot buy and does not currently justify a multi-year procurement. However,
the Air Force will consider multi-year procurement at the appropriate time.

F-15 Radar: The F-15 radar currently does not justify a multi-year procurement
but may be a potential candidate in the future.

JPATS: While the potential for a JPATS multi-year procurement is being consid-
ered Fiscal Yeair 1997 would be premature for a start. The first production aircraft
is not delivered until May 1998.

Questions. Identify any procurement programs in the fiscal year 1997 budget
where provision of additional procurement funds in fiscal years 1997 would have a
very favorable impact on production unit prices.
Answer.

JSTARS: Additional fiscal year 1997 procurement funds would have a very favor-
able impact on production unit prices. The initiative to procure 2 additional E-8C
Joint STARS aircraft would be done more cheaply and be fielded earlier by accom-
plishing this in fiscal year 1997. The initiative would require $450.0 million fiscal
year 1997 procurement (3010) ftinding and $16.0 million in fiscal year 2001 oper-
ations and maintenance (3400) funding. Fielding of these two aircraft would occur
in fiscal year 2001 versus fiscal year 2005.

Estimated Potential Savings, Addition of 2 E-8Cs in fiscal year 1997
Requires $450.0 million ($390.0 million for aircraft, $60.0 milUon for spares)
Flyaway cost, 2 E-8Cs: $480.3 million ($240.15 million per E-8C)
Flyaway cost, 4 E-8Cs: $870.3 million ($217.57 miUion per E-8C)
FlaYway cost savings: $22.68 milhon per E-8C, x4=$90.72 million
This is ranked number one on the CSAF's fiscal year 1997 plus-up list.
F-15E Attrition Reserve Aircraft: To meet the 20 Fighter Wing Equivalents (FWE)
Bottom Up Review (BUR) force, the Air Force needs to procure 12 F-15E attrition
reserve aircraft in addition to the 6 procured in fiscal year 1996. These aircraft must
be procured no later than fiscal year 1998 to take advantage of current foreign mili-
tary sales (FMS) to Israel and Saudi Arabia. Buying the additional quantities in
concert with FMS sales saves between $32 million and $38 million per aircraft. An
additional $119.9 million would fund 2 additional aircraft ($67.5 million and provide
advance procurement funds for the remaining 6 aircraft in fiscal year 1998 ($52.4
million).

C-130J: If additional funds are available in fiscal year 1997, the C-130J Program
could save approximately 6% by procuring two aircraft instead of one, 9% procuring
5-11 aircraft, and 13% procuring 12-16 aircraft. Lockheed Martin's C-130J pro-
posed unit costs are based on total U.S. Government sales for a given year. The Air
Force may not realize a reduction in the unit cost of the aircraft if the C-130J pro-
curement rate is not increased. This is ranked number nine on the CSAF's fiscal
year 1997 plus-up list.

Sensor Fuzed Weapon (SFW): The Air Force requested Congress to add $21.6 mil-
lion to SFW procurement as part of its fiscal year 1997 Plus-Up Priorities List (#10
Precision Guided Munitions). The additional funds will procure an additional 100
weapons for a total of 500 which is considered the SFW minimum sustaining pro-
duction rate. The additional fiinds will reduce the average unit cost by 7% for the
fiscal year 1997 buy.

1997

1998

1999

2000

2001

67.1

67.3

109.4

106.2

107.2

64.5

61.1

45.0

25.2

14.9

+16.0

+10.2

+43.4

+85.3

+92.3

(+3)

(+4)

(+22)

(+36)

(+30)

+3.4

+1.4

+2.1

+1.3

+0.9

380

Joint Primary Aircraft Training System (JPATS): Although the planned JPATS
aircraft development and acquisition profile meets military requirements and objec-
tives, savings and decreased beddown times for each training base could be realized
with a more efficient profile. Aircraft Procurement funds are in program element
84740F, New AETC Aircraft. Current fiscal year 1997PB profile:

[TYSmillion]

Fiscal years —

Aircraft Procurement, AF

(Quantity)

RDT&E, AF

Increases over funding contained in the FY97 FYDP are as shown:

Aircraft Procurement, AF

(Quantity)

RDT&E, AF

If the maximum production rate is increased from 36 to 60 aircraft per year, sav-
ings (TY$million) will be reahzed in the amount of $89M for O&M and $151 million
in program cost. This is ranked number 14 on the CSAF's fiscal year 1997 plus-up
Ust. The CSAF plus-up quantities reflect fiscal year 1998-fiscal year 2002. The
funding on the Chiefs plus-up list reflects requirements for fiscal year 1997-fiscal
year 2001. The total quantities for fiscal year 1997-fiscal year 2001 are as follows:
15, 22, 40, 60, 60.

Question. Identify each production program in the fiscal year 1997 budget whose
mail rationale is to sustain a minimal industrial base.

Answer. The Air Force has no production programs in the fiscal yegir 1997 budget
whose main rationale is sustaining a minimal industrial base.

Question. Please indicate in total and for the top 20 largest weapon systems both
the peacetime operating requirement (separately) for spare parts funded either as
initial spares in procvu-ement accounts or as consumable spares in DBOF, and the
percentage of requirements met through the fiscal year 1997 budgeted level of fund-
ing. Project how this would change by the end of the FYDP.

Answer. The following table provides the Air Force obUgation authority require-
ment for fiscal year 1997 for repareble and consumable items managed in the
DBOF. The Air Force is funded at 100% of reqxiirement for 1997 and expects to be
funded at 100% of requirement through the FYDP assuming the achievement of Air
Force Lean Logistics pipeline reductions. If pipeUne savings do not materialize, then
the program would be less than fuUy funded. Note the table lists Air Force top 17
weapon systems, the remaining requirements being against small systems.

[Dollars are in millions]

1997

Reparables

Initial

A-10 3.822 8.124 2.902

B-IB 20.041 4.166 11.150

B-2 25.027 142.000 11.563

B-52 9.384 .632 2.805

C-5 68.063 1.897 13.186

0-17 6.975 111.237 .967

C-130 20.779 2.425 23.535

C-135 56.531 19.071 24.987

C-141 4.991 591 11.701

E-3 13.714 33.109 9.845

E-8 0 000 79 500 .126

F-15 30.580 15.473 14.553

F-16 41.774 8.175 18.062

H-53 1.666 0 .190

H-60 .134 8.145 .056

FlOO Engine 135.688 0 17.558

FUG Engine 46.014 0 0

Other 60.288 85.347 80.812

Total 545,472 519 895 243.998

381

Question. Please indicate any potential FMS sales that are being discussed that
could influence production unit prices once consummated, not including those whose
impact is already factored into the production unit prices portrayed Congress in the
fiscal year 1997 budget.
Answer. Potential FMS sales being discussed:
Austria — Potential AMRAAM buy
Belgium— Additional AMRAAMS
Greece — Additional AMRAAM
Greece — ^Additional HARM

Netherlands — Interested in HARM for 1998 delivery, no request yet
Portugal— Potential AMRAAM buy
Spain — Potential AMRAAM buy

Saudi Arabia— GBU- 15; GBU-24; CBU-87; AIM-9M; Have Quick II radios;
and JTIDS
Thailand— Potential AMRAAM buy
Txu-key- Additional LANTIRN Pod buy (40 pods)

United Kingdom — FMRAAM procurement could lower long-term AMRAAM

prices

Question. Please indicate what policy your service uses for major R&D production

programs, such as "budget to contract target cost" or "budget to ceiling contract

cost" or "budget to most hkely cost", and identify which of your major programs in

the fiscal year 1997 budget deviate from this policy and the attendant rationale.

Answer. The Air Force funds major R&D and Production programs, commonly re-
ferred to as Major Defense Acquisition Programs (MDAPs), to the Program Life
Cycle Cost Estimate (PLCCE). The PLCCE reflects the "most Hkely cost" of the pro-
gram and is the product of a detailed government assessment of the contractor pro-
posed target and ceiling costs, actual cost history on the program (or similar pro-
grams), parametric Cost Estimating Relationships (CERs), and statistically or dis-
cretely derived risk assessments.

The Air Force PLCCE, in accordance with DoD Instruction 5000.2, is "neither op-
timistic nor pessimistic, but based on a careful assessment of risks and reflecting
a realistic appraisal of the level of cost most likely to be realized." The process for
developing the PLCCE involves an Air Force Cost Analysis Group (AFCAIG) evalua-
tion (during the milestone review cycle) of the System Program Directorate's (SPD)
Program Office Estimate and the Air Force Cost Analysis Agency's (AFCAA) inde-
pendent estimate of the high cost, high risk areas of the program. The AFCAIG
evaluation of these estimates forms the basis for the recommended Air Force Service
Cost Position (SCP) which, upon the approval of the Acquisition Executive, becomes
the PLCCE.

PLCCE's are based on a government assessment of program cost, often involving
an independent assessment of the technical and programmatic characteristics that
drive cost. While contractor proposal information or the contract ceiling price may
form a portion of the basis of estimate, actual cost history and various CERs, along
with a government assessment of the technical and programmatic parameters that
drive cost, regularly drives the bulk of the estimate. Consequently, a program's
budget can be greater than the contract ceiling price, not only due to costs outside
of the contract, but also due to the cost and technical risks associated with the pro-
gram.

The Air Force has no major programs in the Fiscal Year 1997 budget that deviate
from this poUcy.

Answer. The Air Force Cost Analysis Improvement Group (AFCAIG) policy on
Risk and Engineering Change Orders (ECOs) is as follows:

When a weapon or automated information system is formally reviewed as part of
the Defense Acquisition Board or Major Automated Information Systems Review
Council process, a Service Cost Position (SCP) is developed by the AFCAIG, based
on a comparison between the program office estimate and component cost analysis
(independent service cost estimate). As part of the SCP development, risk (schedule,
technical, or other) is assessed at each of the work breakdown structure (WBS)
items and appropriate upward adjustments are made to the point estimate for those
items where there is risk. These adjustments vary depending upon the program and
type of risk inherent in the WBS item. Engineering change order (ECO) allowance
is normally estimated based on a percentage of the hardware and software costs
which vary by program. ECO is tailored to the program content, stage of develop-
ment or production, and overall risk inherent in the program under review. In addi-

382

tion, risk and ECO funding are phased so that they are available in the years when
requirements are most likely to occur. The guidance for Air Force cost estimates can
be fund in DoD 5000.4-M (dated Dec 92) and the^ Air Force Supplement to DoD
500. 4-M (dated 31 Jan 94). There are no major programs that deviate from this pol-
icy.

Question. Please identify any R&D or production program which has an amount
budget in fiscal year 1997 for a contract award fee larger than $10 million. Provide
the amount budgeted for the award fee, the basis on which the amount was cal-
culated (e.g. 100% fee based on the contract), and the historical performance of the
contractor in terms of percentage of award fee awarded during prior award fee peri-
ods under the same contract.

Answer.

C-17: $25.0 miUion is budgeted to be available in Fiscal Year 1997 for award fee
on Lot VII Production Contract. This is based on 100% of the maximum negotiated
potential award fee which is on contract. This amount consists of $12.5 million each
for award fee periods ending 31 January 1997 and 31 July 1997. The period of per-
formance for awarding the contractor Lot VII award fee amounts begins in August
1996, thus there is no historical performance on this contract. However, for separate
contract efforts, the following provides a history of recent award decisions on similar
C-17 production contracts.

^^^- ^^^ '^^ n!nS tlV.l^

(in percent) (in percent)

1 1 Nov 93 31 May 94

2 1 Jun 94 31 Dec 94

3 1 Jan 95 31 July 95

4 1 Aug 95 31 Jan 96

N/A

B-1: The Engineering and Manufacturing Development (EMD) for the B-l/Joint
Direct Attack Munition (JDAM) integration project, awarded in March 1995 to Rock-
well International, is a cost plus award fee contract (F33657-94-C-0001). The Fis-
cal Year 1997 award fee budget for this contract is $10.3 million. The budget is
based on 100% of the maximum possible award fee per the negotiated contract. The
historical performance of the contractor is 95% for the period March-September
1995.

Milstar: Total Award Fee pool for fiscal year 1997 is $4.7 million for the Milstar
I contract, and $60.5 milUon for the Milstar II contract, for a total potential award
fee of $65.3 miUion. This budget is based on 100% of the maximum possible award
fee per the negotiated contract. The total award fee pool is allocated according to
the work profile during the periods.

Historical performance:

D»,i-j u„ crf j,t„ r„j j,t„ Milstar I (in Milstar II (in

Period No. Start date End date p^^^^^O p^^^^^,,

1 30 Apr 92 30 Sep 92

2 1 Oct 92 31 Mar 93

3 1 Apr 93 30 Sep 93

4 1 Oct 93 31 Mar 94

5 1 Apr 94 30 Sep 94

6 1 Oct 94 31 Mar 95

7 1 Apr 95 31 Aug 95

N/A

F-22: F-22 award fee budgeted for fiscal year 1997 is based on 9% of the contract
value during fiscal year 1997. Both contracts were initiated on 1 August 1991 and
are Cost Plus Award Fee type contracts.

FY97 award
Contract Number Contractor Title fee pool (in

millions)

F33657-91-C-O006 LASC ATF FSD Program $107

F33657-91-C-0007 P&W F-1 19 EMD Program 13

Historical award fee:

383

Period No. Start date End date '^f^^fj- P^V^j';P^--

1 1 Aug 91 30 Sep 91

2 1 Oct 91 31 Mar 92

3 1 Apr 92 30 Sep 92

4 1 Oct 92 31 Mar 93

5 1 Apr 93 30 Sep 93

6 1 Oct 93 31 Mar 94

7 1 Apr 94 30 Sep 94

8 1 Oct 94 31 Mar 95

9 1 Apr 95 30 Sep 95

Question. Please identify all R&D and production programs/projects for which
Congress appropriated funds in fiscal year 1996 which since the Appropriations Act
was enacted have been either terminated or significantly down-scoped. For each, in-
dicate the status of the fiscal year 1996 and any earlier active fiscal year funds
where funds have been diverted to another purpose.

Answer. The Laser Spot Tracker (LST) for the Block 40 F-16 and the 40K Laser
for the F-15E Operational Flight Program (OFP) scheduled for release in 1998 and
associated flight activities will not be performed. Air Combat Command (ACC) had
previously sourced fiscal year 1997 and fiscal year 1998 Night/Precision Attack
(LANTIRN) RDT&E and Procxirement funds for a "must pay high priority classified
bill. This rendered the LANTIRN program unexecutable. Subsequently, ACC re-
quired additional fiscal year 1996 funds for another portion of the same classified
program. Because LANTIRN was already unexecutable and ACC did not plan to re-
store the fiscal year 1997 funds, it was recommended LANTIRN funds be used to
source the fiscal year 1996 disconnect. ACC later determined the program should
be canceled, and in December 1995, formalized this decision in an AQ staff package
to CSAF.

NIGHT/PRECISION AHACK FUNDING TRACE (PE 0604249F)

Fiscal years —

1995 1996

Funding Appropriated 0 21,672 20,708

Congressional General Reductions (236) (406)

Small Business Innovative Researcti (407) (503)

Omnibus Reprogramming (913)

Reprogramming for Classified Priority Program * (10,600)

Below Threshold Reprogramming (Prior to Cancellation Decision) 1,490 (3,356)

Bosnia Reprogramming (OSD Withhold) (221)

Inflation Savings (OSD Withhold) (216)

USAF W/H for Project Sure Strike (PE 0207133F) * (3,800)

USAF W/H for Podded Reconnaissance System (0207217F) * (2,000)

Subtotal 1,490 16,760 2,962

Obligations 1,470 16,200 905

Expenditures 1,462 5,987 70

•Pending Congressional Approval.

DoD identified the Metal Fatigue Monitoring and Infi-ared Signature Control pro-
grams for termination. Both of these programs

were Congressional adds and are PE 0603 112F. Funding for these programs was not
requested in the Fiscal Year 1996 PB nor was there a plan for program execution.
Funds were subsequently identified as a source for contingency requirements.

The following table identifies the current fiscal year 1996 status of these pro-
grams:

PE Name tZ'H^^ni Current Status

(in millions)

06031 12F Infrared Signature Control Program $2.0 $0.0 Terminated

0603112F Metal Fatigue Monitoring Technology $5.0 $0.0 Terminated

The following programs have also been terminated since the Fiscal Year 1996 Ap-
propriations Act was enacted:
PE 0207 13 IF (A-10 Squadrons):

384

— Modification #3441, Improved Data Modem
— ^All Fiscal Year 1995 and prior funds are obligated
—Fiscal Year 1996 funds ($2.8 million)

— $1.3 million is obligated

— $1.5 million is required for termination costs
— Modification #7093, Regeneration of A-lOs
— No funding in Fiscal Year 1995 or prior years
—Fiscal Year 1996 funds ($22,499 million)

— $.278 million required for changes in economic assumptions

— $4,421 million reduction for Bosnia

— $3 million required for inflation savings

— $5.9 million reprogramming so\irce for Air Force Podded Reconnaissance Pro-

fram requirements
8.9 million reprogrammed to Fiscal Year 1996 A-10 GPS program
PE 0207141 F (F-117 Squadrons):

— Modification #31938, Control Display Unit Replacement
— ^No funding in fiscal year 1995 or prior funds
—Fiscal Year 1996 funds ($2.3 million) moved to F-117 GPS program

The Department of Defense has identified two Air Force Science & Technology
programs which received Congressional adds for down-scoping. These programs are
Suborbital FUght Testing (PE 060331 IF) and MICROSAT (PE 060340 IF).

060331 IF BalUstic Missile Technology

— BPAC 634091, Suborbital Flight Testing
—Fiscal Year 1996 funds ($8,785 milUon)
—$4,734 miUion for Bosnia

— $.113 million for Congressional General Reductions
— $.119 million for Small Business Innovative Research

060340 IF Advanced Spacecraft Technology

—BPAC 633834, MICROSAT
—Fiscal Year 1996 funds ($20.0 miUion)
— $.195 milUon for Bosnia

— $.405 million for Congressional General Reductions
— $.195 million for Small Business Innovative Research
— $3.0 milhon for Inflation Savings
— $12,656 miUion for Jordanian Supplemental

[Clerk's note. — End of questions submitted by Mr. Young.]

Wednesday, April 17, 1996.
BALLISTIC MISSILE DEFENSE ORGANIZATION

witnesses

lieutenant general malcolm r. o'neill, usa, director, bal-
listic missile defense

rear admiral tim hood, usn, program executive officer,
theater air defense

major general john hawley, usaf, director, global power
programs and assistant secretary for acquisitions

colonel dan montgomery, usa, program executive officer,
missile defense

Introduction

Mr. Young. The Committee will come to order.

This morning's hearing is on the DoD's programs in the area of
Ballistic Missile Defense. Our witness is Lieutenant General Mal-
colm R. O'Neill, Director, Ballistic Missile Defense Organization.

I have received information that this may possibly be your last
time to testify before this Committee, as you are considering retire-
ment.

We have always appreciated the time spent with you and the
very forthright manner in which you have dealt with this Com-
mittee. We appreciate your counsel.

General O'Neill. Thank you, sir.

Mr. Young. We will miss you. I would like to point out that we
are particularly anxious to receive your statement this morning,
General, because of the importance of missile defense programs in
our current world situation.

We know, for instance, that today at least 25 countries possess
or may be developing nuclear, chemical, or biological weapons.
More than 15 nations have ballistic missiles, and many of these
countries are seeking or have acquired weapons of mass destruc-
tion. This is not just my opinion.

As you know, just last week Dr. Perry, the Secretary of Defense
held a press conference to release this new report on Proliferation.
This morning's newspaper talks about Iran getting China's help
with nuclear arms. The proliferation issue is especially serious.

Dr. Perry in his report said that since the end of the Cold War,
and I quote, a "threat . . . has increased in intensity, and that
threat is the proliferation of weapons of mass destruction — nuclear
weapons, chemical weapons, biological weapons, proliferating to
countries all over the world."

In the report Dr. Perry said "Aggressors may actually use these
weapons in an attempt to gain a decisive edge in a regional war."
The bottom line is that the threat posed to our country, our allies,
and our military forces in the field is real and growing.

(385)

386

That we confront such a threat is no surprise. We all remember
Operation DESERT STORM when a single Scud missile attack ac-
counted for 28 American deaths, one quarter of the total casualties
inflicted upon our forces in that war. Today, regrettably, 5 years
after that tragic incident in the Gulf, we are still without adequate
missile defense capability.

Last year, this Committee and the Congress worked extremely
hard to provide the DoD the resources to more rapidly address this
problem. As a result, we added half a billion dollars to missile de-
fense programs for fiscal year 1996.

Now we have the President's fiscal year 1997 budget before us
and instead of building on this commitment, we are asked to re-
treat. The President's request for ballistic missile defense is ap-
proximately $600 million less than the 1996 appropriation of $3.4
billion. This request not only fails to support a robust missile de-
fense program; it suggests a lack of commitment to provide an ade-
quate defense of the United States and our forces in the field.

Along with these budget cuts, the President's program proposes
serious delays in several important missile defense systems. For
example, deployment of a Theater High Altitude Area Defense,
THAAD, a centerpiece of theater missile defense, has been pushed
back 4 years until the year 2006. This is despite the fact that last
year Congress directed that this system be deployed by the year
2000.

Last year the Congress decided that the Navy Upper Tier pro-
gram, a theater-wide sea-based missile defense, should be acceler-
ated and deployed in a prototype version by 1999, with initial oper-
ational capability by 2001. The administration's new program, how-
ever, does not commit to deployment of this important system. In-
stead, this system would face a competitive fly-off competition after
the turn of the century.

National missile defense is also elusive in the President's pro-
gram. Although funds are requested for continuing research of this
capability, the administration does not commit to a deployment of
a true, effective national missile defense capability.

The proposed budget for missile defense is particularly inad-
equate in light of testimony our Committee has received within the
last month from our field commanders, the Commanders in Chief —
CINCs. Every single CINC told us that area missile defense is an
urgent war-fighting requirement which is not being met today. Chi-
na's recent use of ballistic missile tests to try to intimidate Taiwan
brings home the real world threat posed by these weapons.

General O'Neill, you have devoted a number of years to missile
defense. I can tell you that this Congress will not accept a program
for ballistic missile defense which basically "treads water" and does
little to advance America's capability to defend its troops and its
citizens.

Today, we want your best professional judgment as to how this
Committee can move these programs ahead sensibly. We look for-
ward to your testimony and would like you especially to comment
on something that you and I have discussed in the past, and that
is the belief throughout America where the vast majority of Ameri-
cans really believe that someone somewhere has the capability to

387

defend the United States against a missile attack, that we are not
just talking about it.

We both know we just don't have that kind of a capability despite
the belief of many that it does exist somewhere secretly maybe, but
it does exist somewhere. We know that it does not.

If I might yield to Mr. Dicks for any opening statement he would
like to make, and then would yield to the Chairman of the Com-
mittee who is here with us this morning.

Remarks of Mr. Dicks

Mr. Dicks. Thank you, Mr. Chairman. I want to compliment
General O'Neill and the outstanding job he has done in charge of
our Ballistic Missile Defense Office. He has been very professional,
has always kept Members of Congress who are interested in this
subject clearly briefed and has always given us his best judgment
on the programs that he has had responsibility for. I think he has
done an outstanding job.

I, too, want to state my concerns particularly with regard to fall-
ing back a little bit in the theater missile defense, TMD, area. As
the Chairman pointed out, we were very vulnerable in the Gulf
War when we had 500,000 troops out there. Had our enemy had
accurate Scud missiles, we would have literally been defenseless
against them.

We had a very hard time detecting where those launches were
being made from. We were unable to go after and target launch ve-
hicles. And secondly, we had very limited capability of defending
ourselves once those launches had occurred.

In my judgment, this is a very serious matter. I share the prior-
ities of the administration. I think we need to do theater missile
defense first and then over a period of time look at a strategy for
national missile defense, and at the same time I still support the
Anti-ballistic Missile, ABM, Agreement and believe that we should
stay with the ABM agreement.

I would only point out that lest the American people get the im-
pression that we are completely defenseless, I have always believed
that the tremendous strategic nuclear forces that this country pos-
sesses does in fact and has always deterred others from considering
an attack against the United States. For many of these rogue coun-
tries that we seem to be concerned about today, if a missile were
launched from there, they would face a devastating response from
our U.S. strategic nuclear weapons, which has been the policy of
this country.

So I believe deterrence works, but that does not, in my judgment,
give us time not to develop a theater missile defense strategy. Not
only do we have to develop it, but we have to procure it and make
it a reality.

I am glad you are here today, and glad that Mr. Murtha has
joined us. This is a very important subject and one that I know will
be a lively topic of discussion during this session of Congress.

Thank you, Mr. Chairman.

Mr. Young. General, before you begin your presentation, I would
like to say that we are very happy to have the Chairman of the
Appropriations Committee here with us this morning. He will not
be able to stay for the entire hearing, so I would like to recognize

388

him at this time for any statement or questions he might have.
Then we will ask you to make your statement.

Remarks of Mr. Livingston

Mr. Livingston. Thank you, Mr. Chairman.

I will defer my questions but would like to make a couple of
points. I concur with your splendid statement and that great state-
ment of Mr. Dicks on all points, especially their commendation of
your service. General. We have enjoyed working with you over the
years.

You have been a great public servant, a great defender of free-
doms and liberties of this Nation and we wish you well when your
time for retirement comes around.

I regret this will be your last appearance here, but I especially
appreciate your steadfast support for a missile defense system for
this nation. It is incredibly important.

I am reminded, Grener^, that the liberals and the pacifists over
the years have always tried to demean our ability, our capability
to intercept missiles. In the 1980s, they said it was impossible.
These were the same people who in the mid-1980s would have fro-
zen the entire world situation in place by putting a defense freeze
on everything that existed. And had they had their way, we
wouldn't have seen the collapse of the Soviet empire because they
would have continued to gobble up innocent nations. But because
we disregarded their foolish attempts and Ronald Reagan prevailed
and we did build up our defense capabilities, we were able to roll
back the Soviet empire, the evil empire, if you will, they collapsed
and we now have a different world altogether.

If not altogether peaceful, it is certainly not as threatening for
a major world catastrophe as it was back then. However, missiles,
nuclear threats, chemical threats, biological threats still exist, if
not on the scale that existed between the two major superpowers
in the early 1980s, it exists in a different capacity.

We have a very troubled world. We have madmen in charge of
countries, one of whom threatened a few short years ago to drop
the big one on New York if he had had the capability.

We see, as the Chairman pointed out just today, that the Chinese
are working in conjunction with the Iranians to develop their capa-
bility to develop missiles presumably of intercontinental character-
istics. We saw in the Washington Post on March 21st of this year,
that Iraq is hiding 6 to 16 Scuds and that the warheads can deliver
germ and nerve agents.

I will read the first paragraph in a column by Jeffery Smith: "A
United Nations commission suspects that Iraq has hidden between
6 and 16 ballistic missiles capable of being fired at Israel, Kuwait
or Saudi Arabia with warheads containing lethal nerve agents or
germ weapons, U.N. and U.S. officials said yesterday."

We note that had we had the capability that I think we possess
today but had we deployed it and accelerated the development of
such systems as Navy Upper and Lower Tier, frankly, our cur-
rently vulnerable fleet that sailed into the Taiwan Straits a few
weeks ago to caution China against precipitous action against Tai-
wan, had they been attacked, currently would not be able to defend

389

themselves, but had they had those systems, they would have been
able to defend themselves and meet that threat head-on.

I think it is just extraordinary that this administration does not
understand the overwhelming belief of the American people, they
take it for granted that we can defend ourselves against a missile
threat, and we cannot. We have the Patriot system which availed
us to some degree in Israel but even then both the Israeli and
American lives were lost during operation DESERT STORM. But,
frankly, we don't have much more than that and we can't intercept
intercontinental ballistic missile systems and presumably cruise
missile systems as well.

So I am appalled that the President's request in 1996 was only
$2.9 billion, the lowest request in 10 years for missile defense. I am
glad that the Congress prevailed and put in $3.4 billion. But now
the administration's request is still below the 1996 request. For fis-
cal year 1997, they are asking for $2.8 billion, which is $600 mil-
lion less than approved for 1996. So the administration is going the
wrong way.

In fact, just today I also read in the paper, apart from the article
that Chairman Young pointed out, that the President apparently is
going to Russia, according to one article that I read in the op-ed
section, and some of his people are going to be taking with them
software that assists the Russians in some sort of upgrade of their
missile delivery and interception capabilities.

When you add that to the fact that the CRAY computer, the
supercomputers have now been released from embargo by the
United States Congress' actions and presidential actions in months
past, this means that the Russians are going to be fully capable of
any sorts of systems that we are. I would ask your comments on
that, and to what degree that poses a threat?

But remember, they are facing an election in just a month or
two, and frankly, we don't know how those elections are going to
come out. There is a good chance that communist leaders may re-
turn to power in Russia and their nationalistic jingoistic appeals to
popular sentiment frightens the heck out of me. If they return to
the Cold War mentality, we have a real problem and we are hand-
ing them the rope to hang us, as Lenin said.

Earth Day is Monday. That is Lenin's birthday. I know that will
inspire everybody.

So, General O'Neill, I just want to thank you very much again
for your service. I have got grave concerns. This administration is
heading in the wrong direction on missile defense. And it is up to
us in Congress in bipartisan fashion to change that direction and
do all in our power to work with the military to see to it that we
not only develop but that we deploy a missile defense system as
quickly as possible, as efficiently, as cheaply, as rapidly, but as ca-
pably, so that we defend American lives be they in the Continental
United States or spread around in uniform or out of uniform with
our Armed Services around the world.

Thank you.

Mr, Young. General O'Neill, we are anxious to hear from you
and look forward to your statement this morning. We would be
happy to place your entire statement in the record, and you may
summarize.

390

Summary Statement of General O'Neill

General O'Neill. Thank you, sir. It is a privilege for me to ap-
pear before you today to present our Ballistic Missile Defense pro-
gram and budget for fiscal year 1997.

Before I begin my opening statement, I want to take an oppor-
tunity to introduce the tri-service team that executes the Joint Bal-
listic Missile Defense program. Rear Admiral Tim Hood is the
Navy's Program Executive Officer for Theater Air Defense. Major
General John Hawley is the Air Force's Director of Global Power
Programs and Assistant Secretary for Acquisitions. Colonel promot-
able Dan Montgomery is the Army's newly appointed Program Ex-
ecutive Officer for Missile Defense. Dan has been on board for less
than a month, so if there are any particularly difficult questions
about the Army elements of the program, I will bring Dan up to
answer those for you. Together we represent the team that will
manage and execute the BMD program. I may turn to one of these
experts later to help me answer a particular question.

Let me first comment on your statement on the need for Ameri-
cans to understand what kinds of defenses we have. I have been
a party to surveys that have been conducted among the American
people. I was at Colorado Springs and have spoken both to General
Homer when he was the Commander in Chief, Space Command —
CINCSPACE, and General Ashy, who is the present CINCSPACE,
and they take statistics, they have a survey that they execute when
visitors come to Cheyenne Mountain, and in the surveys that have
been conducted over the last 10 years, the statistic is about 80 per-
cent of Americans think we have active defense. They think we
have a deterrent, and I am happy to tell them we do have a deter-
rent. But they also think we have active missile defenses, and they
are always surprised and very quizzical as to how we would allow
ourselves not to be capable of defending against a threat that exists
and is widely understood to exist around the world.

I have brought hardware and engineering models with me today
to help illustrate the tremendous progress we continue to make
with our program. While I will refer to these items in my remarks,
I encourage you to join us after the hearing, and we can give you
depth and detail.

PRIORITY TO FIELD IMPROVED DEFENSES

As you are aware. Dr. Kaminski conducted a program review
which established specific guidance for my program over the next
several years. The most significant result of the review was a reaf-
firmation of the Department's fundamental priorities for missile de-
fense, and I think they agree with the present Congress.

The first priority remains defense against theater-class ballistic
missiles, which represent a threat that is here and now. The next
priority is to develop the capability which we just discussed which
could be rapidly deployed to defend against longer-range ballistic
missiles that could threaten the United States. Finally we have a
technology-based program which supports both theater missile de-
fense and national missile defense and provides us some advanced
options to round out our BMD program.

391

I believe the BMD program that results from the program review
is executable, and I support the allocation of BMD resources within
the confines of a ceiling of $2.8 billion for my program. I recognize
that in the Pentagon, while I may advocate the significance of
BMD programs, I am not the expert who can speak for the total
Defense Department program, so I must recede when someone de-
cides that it is more important to provide resources to the Army
or the Navy or the Air Force than to missile defense. I certainly
understand that.

FISCAL YEAR 1997 BUDGET REQUEST

In the following BMD budget requests, theater missile defense
accounts for roughly 74 percent of the 1997 request; national mis-
sile defense, 18 percent; and technology, 8 percent. I want to point
out that our theater missile defense, TMD, procurement budget of
about $300 million in 1997 will put rubber on the ramps, real sys-
tems in the hands of our fighting men and women.

PAC-3 SYSTEM

Our top priority remains fielding improved theater missile de-
fenses. The TMD program continues to focus on three efforts to
bring increasingly capable defenses to the warfighter. The prime
examples of this are deployment of the Patriot PAC-3 system up-
graded by a missile we call the guidance-enhanced missile. This
system has a capability four times, in terms of its defended foot-
print, and significantly greater lethality than that of the PAC-2
that was fielded in DESERT STORM. Today I have brought with
me a component of the PAC-2. It is the integrated composite ped-
estal and bulkhead made out of composite materials, and it is sig-
nificantly lighter than the aluminum or steel pieces that we had
used in the past smd reduces production costs for the PAC-2 mis-
sile.

The U.S. Marine Corps is upgrading the HAWK system. Delivery
of these systems to operational units will continue during the fiscal
year, and that is some of the $100 million that I am talking about
requesting in our procurement. These improve military capability
against short-range missile threats for a modest investment.

EARLY WARNING INFORMATION

Just as important, we have deployed significant improvements to
our ability to provide early warning information of missile launches
against U.S. forces. This early warning information helps more
than just the missile defense people, it helps the people who have
to protect themselves by getting in foxholes and getting under
armor, and protects the people that are going to provide counter-
force capabilities against the launcher systems, the bases from
which these missiles will launch. Last year the Air Force activated
its Attack and Laimch Early Reporting to Theater, or ALERT
squadron, with a BMDO-funded and developed Talon Shield system
technology at Falcon Air Force Base under the control of
CINCSPACE, General Ashy. This system provides the forward de-
ployed CINCs with rapidly processed digital data based upon the

392

Defense Support Program — DSP satellite which notifies them of an
enemy launch.

The joint tactical ground system is also developed by Ballistic
Missile Defense Organization, BMDO, as complementary to the
ALERT ground station for DSP for use in the theater itself. The
Army has deployed two prototypical units, one in Germany and one
in South Korea, and they are operational today. Five will be pro-
duced and fielded in fiscal year 1996 and 1997.

CORE THEATER MISSILE DEFENSE PROGRAMS

Following these near-term improvements, we will continue ef-
forts to develop and acquire a set of core TMD programs. The De-
partment program review established three core programs, the
PAC-3, Navy Area Defense, and the Theater High Altitude Area
Defense, THAAD. The first priority within the program review was
to the Lower Tier programs, PAC-3 and Navy Area Defense. The
Department, in order to protect the dates that were in the author-
ization language as much as they possibly could, actually increased
the investment in both PAC-3 and Navy Area Defense in the pro-
gram review. We will begin PAC-3 deployment and Navy Area De-
fense User Operational Evaluating System deployment in fiscal
years 1999 and 2000 respectively.

The PAC-3 system includes the newly developed ceramic ra-
dome — ^you see how light that is — and the very small attitude con-
trol motors that actually steer the PAC-3 to its target. The large
missile to my left is the engineering model for the Navy Area De-
fense program's Standard Missile II, Block IV A. What you see pro-
truding is the IR sensor, which is an augmentation to the Standard
Missile Block IV.

THEATER HIGH ALTITUDE AREA DEFENSE

During the program review, THAAD was reduced in scope while
maintaining focus on achieving a User Operational Evaluation Sys-
tem, UOES, capability before the end of the decade. Prior to the
program review, THAAD's funding profile was on the order of
about $700 million per year. The Department decided to keep the
UOES portion of the program on track in 1998. The current
THAAD program, however, delays the production of the ramp-up
and the first unit equipped from two to four years.

Today I have a fore-cone to your left, and Major Fuller is picking
it up. It is the fore-cone of the THAAD interceptor, the one flown
on our fourth test flight. It is an example of the advantage of an
overland range where you can actually recover the hardware after
the test and evaluate its performance.

NAVY THEATER-WIDE

With regard to Navy Theater- Wide, it became clear last year that
the Congress was interested in a very aggressive development ef-
fort, $170 million, for this program. As a result, the program re-
view directed execution of a combined effort to both define the opti-
cal interceptor concept and conduct a system technology dem-
onstration.

393

The Department made a substantial increase to the funding pro-
file. While starting at a slow pace, the Department will add about
$600 million through the Future Years Defense Plan to ramp-up to
a significant annual investment in Navy Theater-Wide.

MEDIUM EXTENDED AIR DEFENSE SYSTEM

As a member of an international cooperative program, we will
continue developing the Medium-Extended Air Defense System, or
MEADS, during 1997. MEADS will provide Army, Marine and
NATO coalition forces high levels of protection over 360 degrees of
coverage, a high-mobility system designed to be deployed with for-
ward and maneuvering elements.

NATIONAL MISSILE DEFENSE

In the National Missile Defense area, it is our goal to position
the United States to effectively respond to a strategic ballistic mis-
sile threat as it emerges. Based upon the program review, the
NMD effort has been shifted from a technology readiness to a de-
plojonent readiness program. The Department is sensitive to con-
gressional interest in a shift to a more system-oriented approach
which would provide for the balanced development of all elements
necessary for initial deployment and consideration of those issues,
such as integration, that would be required to initiate as soon as
possible.

Recently Dr. Kaminski designated the NMD program as an Ac-
quisition Category ID program, or Major Defense Acquisition pro-
gram. He also directed me to initiate a joint program office, Araiy,
Navy and Air Force, to manage this program, and the director of
that joint program office will report directly to me. We are focusing
our efforts on a program that is referred to as three plus three, a
three-year development and planning phase, which, if necessary,
could be followed by a three-year system acquisition and deploy-
ment phase.

This program can achieve an initial operational capability in ap-
proximately six years, or by the year 2003. These efforts will allow
us to enhance both the technology base and the demonstrated per-
formance of the system if we need to deploy.

On the table to my left are two contractor engineering models of
the Exoatmospheric Kill Vehicle, EKV. The large metallic one is
the Hughes Aircraft EKV Sensor Pathfinder. The other is Rock-
well's full-scale engineering model. This system weighs about 40
kilograms, about three times the size of the Lightweight
Exoatmospheric Projectile or LEAP vehicle, certainly well within
our capability to get it up high and up to speed.

We have also brought with us the National Missile Defense
Ground-based Radar component called a tray. If you could pick the
tray up, it is the fundamental building block of the solid-state an-
tenna for both national missile defense and theater missile defense.

As I testified last year, the Space Missile Tracking System pro-
vides a vital role for both National Missile Defense and Theater
Missile Defense. The U.S. Air Force is the manager of that pro-
gram, and that system as they develop it will be integrated into
our architecture as soon as it is available to enhance both NMD
and TMD performance.

394

I have brought two important engineering models of key compo-
nents to the Space Missile Tracking System, SMTS, satellite. These
are the acquisition sensor and the tracking sensor, the larger sen-
sor. The one sensor picks up the target, and the larger sensor, the
tracking sensor, provides very accurate information as the target
cools off and passes across 30 percent of the trajectory before it re-
enters the earth's atmosphere. Both these sensors enable the Space
and Missile Tracking System satellite to perform its ballistic mis-
sile detection and tracking role and provide significant adjunct ca-
pabilities through our missile defense systems.

The NMD system that we will demonstrate in 1999 includes a
ground-based interceptor, ground-based radar, early warning sen-
sors, and battle management command, control and communica-
tion. Depending on the threat to which we are responding when a
deployment is required, these elements could be combined in a
treaty-compliant deployment or some other architecture. Deploy-
ment of an initial system for NMD would cost approximately $5 bil-
lion. The intrinsic strength of our concept for initial deployment is
that the architecture has been specifically designed for evolutionary
development of more robust and effective NMD systems over time.
It can grow to counter an increasingly sophisticated threat if re-
quired.

BMD TECHNOLOGY PROGRAM

The final part of the BMD program is our technology effort,
which at one time required the major part of the SDIO — Strategic
Defense Initiative Organization — BMDO funding. As we move for-
ward with our acquisition programs, the demands on our BMD re-
sources have shifted. Right nov/ our technology program represents
approximately 7 percent of our budget.

I am concerned that that has forced us to reduce our technology
program below critical mass. Programs in Theater Missile Defense
and today's NMD program are possible only because significant
past investments were made in BMD technology. I believe the
proper development of technology to meet critical requirements is
essential to maintaining our program's technological edge.

I want to stress that nowhere else in the Department of Defense
are the basic or component BMD technology programs funded.
Therefore, to ensure the continued flow of new solutions to meet
evolving BMD requirements, I encourage the Congress to consider
the BMD advanced technology program as a strategic investment.
I believe this investment is critical to the continued success and vi-
ability of our BMD program.

As an example of some of our important technology work, I have
with me today some of the key elements of the optics associated
with the Space-based Laser. This technology could be tapped to
provide global protection against both theater and strategic
threats. In addition, our technology program developed a compact
laser communication system, which provides high data rate, long-
range, point-to-point satellite communications. This has both mili-
tary and commercial applications. Lastly, I would like to show you
a Hall Effect Ion Thruster, which we purchased from Russia. We
are continuing research on this system to develop a compact inte-

395

grated orbital propulsion system which can be used to reduce fuel
mass for satellites.

The BMD program today is a focused, prudent response to the
real world. We are aggressively working to meet existing and
emerging missile threats, first to our forces overseas as well, as
well as our friends and allies; and secondly, the emerging missile
threat to the United States. I am dedicated to ensuring that we
field improved TMD systems as soon as possible to provide real
protection for our forward-deployed forces, friends, and allies.

SUMMARY

Mr. Chairman, I endorse the Department's national missile de-
fense strategy. The program acknowledges that some potentially
adversarial nations are interested in developing longer-range bal-
listic missiles which could strike the United States. The program
we call three plus three could lead to an effective nationwide NMD
system against a first-generation Third World threat by the year
2003. It also supports an evolving architecture which will enable
deployment of increasingly capable NMD systems as the threat
emerges.

I think it is critical that we work closely together on a bipartisan
basis to form the consensus for national missile defense that the
theater missile defense program has long enjoyed. Such a course is
required if we are to succeed in maintaining program stability and
coherence. The success of NMD depends upon our ability to reach
this consensus.

On a personal note, I have announced my intention to retire.
Therefore, I would like to express at this time my deep apprecia-
tion to the working relationship I have enjoyed with the Members
and staff of this Committee. This Committee has always been, I
think, my favorite Committee to testify before. Regardless of which
party was in the majority, I was always treated with the utmost
professionalism, and I certainly appreciate that. I trust the future
director of BMDO will have the same opportunity to work closely
with you. That experience has been a great honor and a privilege
for me.

Sir, that completes my opening remarks. I am available for your
questions.

[The statement of General O'Neill follows:]

396

Statement By

Lieutenant General Malcolm R. O'Neill, USA

Director

Ballisitic Missile Defense Organization

Department of Defense

Before The Committee on Appropriations

Subcommittee on National Security

House of Representatives

April 17, 1996

Embargoed Until

Release by

Subcommittee on National Security

397

Biography

Office of External Affairs, Ballistic Missile Defense Organization
Washington, D.C. 20301-7100 (703) 695-8743

Lieutenant General Malcolm R. O'Neill
United States Army

Lieutenant General Malcolm R. O'Neill is the Director of the Bal-
listic Missile Defense Organizaiion (BMDO), Department of Defense,
Pentagon, Washington, D.C.

Prior to his appointment as Director, General O'Neill served as
Acting Director BMDO, and Deputy Director of Strategic Defense Ini-
tiative Organization (SDIO). The general also sened as the first Direc-
tor of the Army Acquisition Corps, chanered to ensure a fully qualified
civilian and military acquisition cadre for the Army. He also served as
the Deputy for Program Assessment and International Cooperation,
Office of the Assistant Secretary of the Army (Research, Development,
and Acquisition), assisting in the management and execution of the
Army's major hardware programs. He supervised all cooperative
research and development programs and represented the Army at all
NATO and Four Power international research and development fora.

He is the former Commander, U.S. Army Laboratory Command,
the Army Materiel Command's (AMC) major subordinate command,
managing the Army's seven corporate laboratories, the Adelphi Labora-
tory Center, and six Special Technology offices. Additionally, the gen-
eral served as the AMC Deputy for planning and managing the Army materiel technology base, the Army Research
Office and Field Assistance in Science and Technology program.

General O'Neill was previously Deputy Director for Programs and Systems and Director, Kinetic Energy
Weapons, at SDIO. He was also Chief of Staff for the U.S. Army Missile Command (MICOM). He served as
project manager for the Multiple Launch Rocket System at MICOM as well as the program manager for Strategic
Fire Control Technology in the Defense Advanced Research Projects Agency; and the deputy program manager,
NATO PATRIOT Management Office, Munich, Germany.

General O'Neill received a bachelor of science degree in physics from DePaul University and both a master
of science degree and doctorate in physics from Rice University. His military education includes the Field Artil-
lery Officer Basic Course, the Ordnance Officer Advanced Course, the Army Command and General Staff College,
and the Army War College. .

The general's awards and decorations include the Defense Distinguished Service Medal, the Defense Supe-
rior Service Medal, the Legion of Merit with three oak leaf clusters, the Bronze Star with the "V" device and tluwe
oak leaf clusters, the Meritorious Service Medal, the Air Medal, the Army Commendation Medal and the Purple
Heart with oak leaf cluster He also wears the Combat Infantryman Badge, the Parachutist Badge and the Ranger
Tab.

General O'Neill and his wife, Judy, have two children, Bonnie and John. The general is a native of Chicago,
Illinois.

(Current as of March 1996)

mi^WTinyovn

398

Mr Chairman and Members of the Committee, it is my privilege to appear before you
today to present the Department's Ballistic Missile Defense (BMD) program and budget for Fiscal
Year 1997.

As you are aware, the Department has recently completed the BMD Program Review,
which was conducted by Dr. Paul Kaminski the Under Secretary of Defense for Acquisition and
Technology. The Program Review established specific guidance for the BMD program over the
next several years. The most sigm'ficant result of the review was a reaffirmation of the
Department's fundamental priorities for missile defense The first priority remains defense against
theater-class ballistic missiles, which represent a threat that is here and now This next priority is
to develop the capability to defend against longer-range ballistic missiles that could threaten the
U.S. after the turn of the century. Finally, technology base programs to support both TMD and
NMD round out the Department's BMD program.

Fiscal Year 1997 Program and Budget. The total Fiscal Year 1997 budget request for BMD is
$2,798 billion. The Department is requesting $1 .794 billion for Theater Missile Defense (TMD)
RDT&E, and $268 million for TMD procurement eflForts. The National Missile Defense (NMD)
Deployment Readiness RDT&E program is budgeted for $508 million. Support Technologies
budget request is for $226 million. Table A provides a detailed perspective on funding for Fiscal
Years 1996 and 1997. Of the total BMD budget request for Fiscal Year 1997, TMD accounts for
roughly 74 percent, NMD 18 percent and Technology 8 percent. This is presented on Table B.

As the Committee is aware, BMDO leads the Department of Defense team that executes
the BMD program. My staff and I work closely and cooperatively with the Services as we seek
to develop and acquire BMD systems. In this regard, BMDO interacts with the CFNCs to ensure
that as we develop BMD systems we respond to the specific needs of the warfighter. BMDO

399

works closely with the Service Program Executive Officers (PEOs) to execute key BMD
acquisition programs and put real capability into the hands of our military forces Table C
illustrates the important role the Military Services play in executing various segments of the BMD
program. Using the total Fiscal Year 1997 dollars allocated to the Services and BMDO for BMD
programs, you can see that the Army executes roughly 60 percent of the BMD programs, while
BMDO executes 17 percent, the Navy 16 percent, the Air Force 5 percent, and other Defense
entities 2 percent. The important lesson to draw from these percentages is that the BMD program
is a. joint program that requires well-coordinated management and execution. We strongly
benefit from the Services' technical and programmatic expertise. Meanwhile, BMDO ensures that
BMD programs are advocated during budget debates; prevents duplication of BMD program
efforts across the Services, sponsors joint development of BMD systems, ensures focus on joint
warfighter needs, and concentrates on near-term acquisition programs while judiciously investing
in far term technologies. Of special significance, BMDO is responsible for designing the
appropriate battle management, command, control and communications that will ensure BMD
systems are fully integrated. I am pleased to report that this approach to BMD program
management has succeeded in combining the strengths of the Services and BMDO, which enable
us to develop and acquire improved BMD systems and fiirther develop critical military
technologies.

Lastly, I would like to address a management issue that has been of keen interest to the
Congress since the Fiscal Year 1993 Defense Authorization Act This is especially important in
the context of concerns about the size of overall BMD program management and the proper role
of BMDO as the central manager of the Department's BMD program. Table D illustrates that
BMDO has in fact complied with Congressional direction to maintain a lean management
structure and reduce its use of support service contractors. The chart shows an overall reduction
of 1,075 support service contractors, with a modest increase in government employees to ensure
effective and efficient management of the program This management structure allows BMDO to
perform its responsibilities, as outlined in its charter and Congressional direction

400

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404

Theater Missile Defense: Priority to Field Improved Defenses. The TMD program continues
to focus on three sequential efforts to bring increasingly capable defenses to the warfighter. First,
we have completed our near-term improvements to existing air and missile defense systems to
allow them to defend against short-range tactical ballistic missiles. Prime examples of this activity
are deployments of Patriot PAC-2 Guidance Enhanced Missiles (GEM) and U.S. Marine Corps
HAWK Upgrades. Our tests have shown that a modified TPS-59 radar combined with the
HAWK missile system is effective against short range ballistic missiles. Delivery of the upgraded
systems to operational Marine Corps units will continue during this fiscal year. This program
delivers a real military capability against the short range missile threat for a modest investment.
Last year, we began producing the PAC-2 GEM system for the Army as the principal
improvement to our existing TMD capability until the PAC-3 system begins deployment in Fiscal
Year 1999. The PAC-2 GEM improvements increase the PATRIOT'S defended area and
improves its lethality over its capabilities during Operation Desert Storm. The GEMs improved
seeker performance allows the interceptor to more precisely locate the target missile. Meanwhile,
a faster reacting warhead fiize contributes to a more optimal dispersal of warhead fragments on
the target. Just as important, we have deployed significant improvements to our ability to provide
early warning information of ballistic missile launches to U.S. forces overseas. Last year the Air
Force activated the Attack and Launch Early Reporting to Theater (ALERT) squadron with the
BMDO-developed TALON SHIELD system at Falcon Air Force Base, Colorado. The Joint
Tactical Ground System (JTAGS), also developed by BMDO, is a complementary tactical mobile
DSP ground station for use in the theater. The Army has deployed two prototypical units, one in
Germany and one in South Korea, to support the warfighter. Five of these units will be produced
and fielded in Fiscal Years 1996 and 1997.

Following these and other near-term improvements, the Department will continue efforts
to develop and acquire a set of "core" TMD programs The Department's Program Review
established the TMD lower-tier systems — the PAC-3 and Navy Area Defense programs - as the
first priority to ensure we enhance our defensive capabilities against short- to medium-range
ballistic missiles as quickly as possible. We will do this by building on existing infrastructure and

405

prior investments in ongoing programs; expanding the capabilities of the PATRIOT and
AEGIS/Standard Missile systems; adding fUnds to deal with cost increases and development
delays, exploring a concept for cooperative development with our Allies for a Medium Extended
Air Defense System (MEADS); and improving our Battle Management, Command, Control and
Conununications (BMC3) capability.

Neither the PAC-3 nor the Navy Area Defense programs involve show-stopping technical
challenges at this point Rather, they involve engineering challenges. Nonetheless, the key issue
is a matter of execution of the programs to complete the development and to field these two
systems. Our task is to ensure that we have a robust program to proceed with both these systems
and to field this important capability as early as possible Therefore, the Department increased the
investment in PAC-3 and Navy Area Defense to ensure that they are adequately funded to
guarantee timely delivery to the warfighter. The PAC-3 program was increased by $345 million
and the Navy Area Defense program by $186 million over the Future Years Defense Plan (FYDP)
through 1997-2001 These increases will allow us to begin both PAC-3 deployments and Navy
Area Defense User Operational Evaluation System (UOES) deployments in Fiscal Year 1999
The mix of PAC-3 and Navy Area Defense interceptors eventually acquired to perform the lower-
tier mission will depend upon their relative prices, performance and the status of the missile threat.

Patriot Advanced Capability - 3. The PAC-3 system will represent a significant
upgrade to an existing air and missile defense system to specifically handle stressing theater-class
ballistic missile threats. The PAC-3 system, using hit-to-kill interceptors, will be highly lethal
against ballistic missiles including those with weapons of mass destruction Improvements to the
system will result in increased firepower and lethality; increased battlespace and range, enhanced
battlefield awareness; and improved discrimination performance. These critical enhancements will
be achieved by improvements to the missile, as well as the radar and communications systems.
Operational improvements, such as remote launch operations, will also increase the battlespace
and range of the PAC-3 system. These enhancements will mark a substantial improvement over
our PATRIOT TMD capabilities during Operation Desert Storm.

406

The PAC-3 program is restructured to reduce program risk, adjust for schedule delays,
and improve system performance by extending the engineering and manufacturing development
(EMD) phase of the program by up to ten months; rephasing the missile and radar procurement;
upgrading four launchers per battery with Enhanced Launcher Electronics Systems; and extending
the battery's remote launch capability. The Program Reviev^ also visited the issue of the number
of PAC-3 battalions to be fielded. The original plan was to deploy nine battalions. However, the
review decided to field six battalions, while deferring fully upgrading the three additional
battalions pending the completion of the MEADS program definition/validation phase. PAC-3
low rate initial production (URIP) will begin the first quarter of Fiscal Year 1998, with the First
Unit Equipped (FUE) date planned for the fourth quarter of Fiscal Year 1999.

Navy Area Defense. As the Committee is aware, BMDO and the Navy have been
working cooperatively to develop an enhancement to the AEGIS/Standard Missile air defense
system to provide a tactical ballistic missile defense capability fi-om the sea that is comparable to
the defense provided by PAC-3. This represents a critical TMD capabiUty that can take
advantage of the strength and presence of our naval forces, and build upon the existing
AEGIS/Standard Missile infi-astructure. Naval vessels that are routinely deployed worldwide are
currently in potential threat areas or can be rapidly redirected or repositioned. A Naval TMD
capability can be in place within a region of conflict to provide TMD protection for land-based
assets before hostilities erupt or before land-based defenses can be transported into the theater.
Our Navy Area Defense program focuses on modifications to enable tactical ballistic missile
detection, tracking and engagement with a modified Standard Missile 2, Block IV

We will use the $45 million added by Congress in the Fiscal Year 1996 Defense
Authorization and Appropriations Bills to compensate for system engineering and design efforts
not fully funded in Fiscal Year 1995. The Program Review added $186 million to Navy Area
Defense through the FYDP in order to make it fully executable on a moderate risk profile. These
funds will cover delays in risk reduction flights and adjusted cost estimates for test targets and
lethality efforts. In turn, this wiU minimize the delays in the EMD program and LRIP missile

407

procurement.

Our plan is to field a UOES capability in Fiscal Year 1999 and an FUE in Fiscal Year
2001. Thereafter, operational units will use the legacy UOES system for continued testing and as
a contingency warfighting capability.

Theater High Altitude Area Defense. THAAD is the more mature upper-tier system.
During the Program Review, the THAAD program was adjusted to maintain track on an early
deployment of a UOES capability before the end of the decade. Prior to the Program Review, its
funding profile was on the order of about $700 million per year. However, it adjusted the
program significantly, making outyear adjustments to our investment in the program. The
Department decided to keep the UOES portion of the program on track, which will entail fielding
about 40 THAAD missiles and the GBR by Fiscal Year 1 999. However, the Program Review
restructured the rest of the program for the objective THAAD system, taking about $1 .9 billion
out of the $4,7 billion that was programmed through the FYDP.

The THAAD System is the only core TMD system capable of engaging the full spectrum
of theater-class ballistic missile threats. The THAAD system provides extended coverage for a
greater diversity and dispersion of forces or the capability to protect population centers But the
principal additional capability provided by this important system is the ability to deal with longer
range theater missile threats as they begin to evolve and emerge over time. Using THAAD as an
overlay also reduces the nimiber of missiles that the lower-tier systems must engage. The
THAAD system will provide a unique capability for wide area defense against tactical ballistic
missiles at higher altitudes and more attempted intercepts at longer ranges (a "shoot-look-shoot"
capability) with a lethal hit-to-kill interceptor. This is a mission the PAC-3 and Navy Area
Defense systems cannot perform. The THAAD system consists of the TMD Ground-based Radar
(GBR) surveillance and tracking sensor, interceptors, launchers, and BMC3 .

The initial deployment will be with what the Department calls a "UOES plus" system.

408

essentially an enhanced version of the UOES system, in lieu of the previously planned full-
capability objective system. This improved UOES capability will meet the most critical THAAD
requirements. It will concentrate on militarizing the UOES design and upgrading certain
components, such as the infrared seeker, radar upgrades and BMC3 improvements The resulting
THAAD program delays the production ramp-up and the FUE by over two years

In Fiscal Year 1997, the THAAD program will conclude its demonstration/validation
flight tests These tests are designed to resolve technical issues and demonstrate the system's
capabilities. So far, BMDO and the Army have conducted four flight tests. The next flight test,
which will attempt an intercept of a theater-class ballistic missile target, is scheduled to take place
within the next few days.

Navy Theater-Wide. The Navy Theater Wide system will bring a new, complementary
capability to our other core programs by providing ascent phase coverage where the mobility of
AEGIS ships allows such coverage. In addition, the system will add the same kind of terminal
coverage capability as the THAAD system, providing long range coverage and wide area
protection. As in the case with the lower-tier Navy Area Defense system, the Navy Theater Wide
system will operate free of sovereignty or host nation support issues, free to be deployed instantly
whenever our national interest requires.

The Navy Theater Wide system is the least mature of all our systems, not only of the
upper-tier, but all the TMD systems taken together. Prior to the Department's review, we were
proposing funding this program in our Fiscal Year 1996 and 1997 budgets at a very low level to
mature the key enabling technologies. This was at a level of about $30 million per year. During
the review, however. Congress authorized and appropriated a substantial increase — S170 million
~ to this program. The Program Review decided to spend all the appropriated funds for Fiscal
Year 1996 over two years and not begin a full commitment to the Navy Theater Wide program at
this time. A more deliberate pace was seleaed, which will allow us to proceed to a system-level
intercept flight test using a combination of the AEGIS Weapon System, the Standard Missile and

409

a kinetic kill intercept vehicle.

In parallel, the program is structured to conduct concept definition studies to determine
what is the best configuration with which to proceed. There is much synergism among the
technologies needed for a robust Navy Theater Wide system, including seeker technologies being
developed in the National Missile Defense program. The Program Review determined that the
posture for this program is to conduct a technology demonstration, leveraging maturing
technologies and complete a concept definition study to confirm the interceptor configuration for
the system. In order to accomplish this program approach, the Department made a substantial
increase to the funding profile While starting out at a slow pace, we wiQ add about $600 million
through the FYDP to ramp up to a significant annual investment in Navy Theater Wide

Medium Extended Air Defense System (MEADS). We will continue developing the
MEADS system during Fiscal Year 1997. This system is different from the other lower-tier
missile defense systems we are planning to deploy. For example, while the PAC-3 system is
oriented in a particular threat direction, MEADS provides 360 degrees of coverage It will be a
highly mobile system and designed to be deployed with our forward and maneuvering forces In
this regard, MEADS is designed to respond to an important operational requirement by providing
protection for the combat maneuver force against shorter-range theater-class ballistic missiles,
advanced criiise missiles, and other air-breathing threats as well. This system will replace HAWK,
and also would ultimately replace the PATRIOT system. As I noted earlier, the Department is
deferring fully upgrading three PATRIOT battalions pending a decision on development and
deployment of MEADS.

After the French Ministry of Defense officially stated that they were not in a position to
sign the Memorandum of Understanding, Dr. Kaminsky agreed with, his German and Italian
counterparts that the importance of the program warranted continuing without them,. Therefore,
we are continuing discussions for the first phase of the program. MEADS consolidates and
harmonizes the efforts of NATO allies who had contemplated country-unique systems. The effort

410

to pursue MEADS represents not only a new path for transatlantic armaments cooperation, but
also a growing recognition of the risks to alliance security posed by the proliferation of weapons
of mass destruction and their delivery systems. The cost share for the MEADS program
throughout the Program Definition and Validation (PDV) phase (the U.S. equivalent of
demonstration/validation) probably will change as the result of the French decision. However, at
this point, we do not believe that an increase in the U.S. share will be necessary The Department
added $85 million over the FYDP to fund the U.S. share of the cooperative PDV phase, which
concludes in Fiscal Year 1999. This increase brings our flinding to a rate of about $30 million per
year and fulfills our international commitments at this time. We must make a decision by Fiscal
Year 1998 on the program's future direction.

Two U.S. companies, Lockheed Martin and a joint venture between Hughes Aircraft and
Raytheon, have joined with their European counterparts (Daimler-Benz Aerospace, and Siemans
from Germany, and Alenia from Italy) to form two international teams that will execute the PDV
phase of the program. A single international team will be chosen to pursue Design and
Development (EMD in the U.S.), with an in-service date scheduled for about 2005

Joint TMD Program Element. Joint TMD activities represent programs and tasks that
are vital to the execution of joint BMD programs. These activities have been grouped together
because they provide direct support across BMD acquisition programs which could not be
executed without this important support. Therefore, we introduce greater efficiency into the
programs because they accomplish an effort once which otherwise would have to be separately
accomplished for each Service element. These activities include architecture development and
battle management, command, control, communications, and intelligence; test and evaluation
support, including the development and fabrication of targets; threat analysis and support, model
and simulation support; lethality and phenomenology studies and analysis; and direct interface
with the warfighter. Unfortunately, we did not adequately explain the importance of this key
program element last year and sustained a significant and painful reduction to its budget. This
significantly reduced our ability to support the core TMD acquisition programs. In some

411

instances, critical target development and lethality analysis had to be fiinded by the core programs
themselves. These unexpected expenditures contributed to some of the executability issues
identified by the BMD Program Review.

Therefore, I would like to outline just a few critical activities that are funded in the Joint
TMD account. Interoperability in BMC3I is essential for joint TMD operations. Accordingly,
BMDO takes an aggressive lead to establish an architecture that all the Services can build upon
and is actively pursuing three thrusts to ensure an effective and joint BMC3I for TMD. The three
thrusts are: improving early warning and dissemination, ensuring communications
interoperability, and upgrading command and control centers for TMD functions The primary
goal is to provide the warfighter with an integrated TMD capability by building-in the
interoperability and flexibiUty to satisfy a wide range of threats and scenarios From its joint
perspective, BMDO oversees the various independent weapon systems developments and
provides guidance, standards, equipment and system integration and analysis to integrate the
multitude of sensors, interceptors, and tactical command centers into a joint theater- wide TMD
architecture. While this may not seem to be as exciting as building improved TMD interceptors, it
is absolutely critical to the success of the U.S. TMD system. It is the glue that holds the
architecture together and will ensure that the whole is greater than the sum of its parts.

In addition to BMC3I, the other activities in this program element strongly support the
TMD system and key acquisition programs. For example, BMDO test and evaluation
responsibilities include oversight of major defense acquisition program (MDAP) testing,
sponsoring and conducting TMD family of systems integration and interoperability tests,
development of common targets, and providing for range and ground tests. My organization
sponsors and conducts system integration tests to ensure inter- and intra- Service operability and
interoperability of the TMD family of systems with external systems. In addition, this program
element funds a critical series of interactions with the warfighting CINCs. The CINC's TMD
Assessment program consists of operational exercises, wargames, and Warfare Analysis
Laboratory Exercises (WALEX). Our WALEX programs, for instance, allow senior military

412

leadership insights into TMD operational planning and employment. The CINC TMD
Assessments program enhances two-way communication between BMDO as the developer and
the warfighting CINCs who are the users of TMD systems. These exercises allow the CINCs to
assess their TMD capabilities and shortfalls so they may refine and articulate their TMD
requirements, and improve their current and future TMD operational capabilities. The program
facilitates the development and refinement of TMD doctrine and concepts of operations as part of
the CINCs and Joint Staffs overall theater operations plans. We need to fully fund this important
program element if we are to deliver on our promise of improved TMD systems to the warfighter.

U.S. - Israel Arrow Program. Israel has been involved in U.S. missile defense programs
since 1987, when both countries signed a Memorandum of Understanding on BMD participation
Israel's participation includes architecture studies, technology development and experiments,
examination of boost-phase intercept concepts, and the development of the Arrow interceptor
missile. As the Secretary of Defense has noted recently, the Arrow program advances our shared
objective of working together to develop effective ways to counter the threat posed by ballistic
missiles in the Middle East and elsewhere. An agreement with the Israeli Ministry of Defense to
continue involvement in the development of the Arrow weapon system will be ready for signature
between both our countries in the near future. The Arrow Deployabihty Program, as it is called,
involves a total commitment of $500 million over the next five years, with $300 million
contributed by Israel and $200 million from the United States. This will allow for the integration
of the jointly developed Arrow interceptor with the Israeli developed fire control radar, launch
control center and battle management center. I am particularly pleased to report that on February
20th, the Arrow II missile completed its second successfiil flight test, which will lead soon to the
intercept of a target tactical ballistic missile.

System integration efforts will lead to a UOES-like Arrow system projected for fielding in
Fiscal Year 1998. The U.S. continues to derive valuable data and experience through our
participation in the Arrow program. In particular, we are gaining important experience in
establishing interoperability with U.S. TMD systems and the Arrow weapon system. The

413

agreement we have on participation in the Arrow program will be revisited in three years to
evaluate the synergies between Arrow and U.S. TMD programs and to ensure that worthwhile
benefits continue to flow to the U.S programs. It is important to note that this cooperative
program is also funded within the Joint TMD program element.

Cruise Missile Defense. Many TMD sensors, BMC3, and weapons also have an effective
capability to counter the growing land-attack cruise missile threat. In particular, the lower-tier
PAC-3, Navy Area Defense, and MEADS systems operate in the same battlespace and will have
significant capability against the cruise missile threat. In addition, the NMD BMC3 architecture
will be designed to promote interoperability and evolution to a common BMC3 system for
ballistic and cruise missile defense.

The Department also has a number of initiatives outside the HMD program to improve the
ability of U.S. forces to detect and defeat cruise missiles "in theater" or launched against the
United States These initiatives include advanced technology sensors to detect low observable
cruise missiles, upgrades to existing airborne platforms to improve beyond the horizon detection
capability against cruise missiles; and upgrades to existing missile interceptor systems.

National Missile Defense. The Department's NMD goal is to position the U.S. to effectively
respond to a strategic ballistic missile threat, as it emerges Based upon the Program Review, the
NMD effort has been shifted from a technology readiness to a deployment readiness program.
Following the 1993 Bottom Up Review, the NMD program focused on maturing the most
challenging technical elements - often called the "long poles" - of the NMD system. The
Department is sensitive to Congressional interest in a shift to a more system-oriented approach
which would provide for the balanced development of all elements necessary for the initial
deployment. We are focusing our efforts on a program that is referred to as "3 plus 3" - a three
year development and planning phase which, if necessary, could be followed by a three year
system acquisition and deployment phase.

414

The Depailtment is committed to the development phase - or the first "three" years ~ of
this 3 plus 3 program. During this period BMDO and the Services will develop and begin testing
the elements of an initial NMD system. If, at the end of those three years of NMD development
eflForts, the ballistic missile threat to the United States warrants the deployment of an NMD
system, then in another three years that system could be deployed. Based on this program an
initial operational capability could be achieved in approximately six years, by the year 2003

If, on the other hand, we reach 1999 and the threat does not warrant deployment of an
NMD system, the Department's 3 plus 3 program is designed to preserve the capability to deploy
an NMD system within three years by continuing development of the system elements and
conducting a series of integrated tests. Over time, these efforts would allow us to enhance both
the technology base and the demonstrated systems performance. Therefore, we can make a more
informed deployment decision and, when the threat materializes, be in a positiori to deploy a more
capable NMD system. The system capability would grow through three avenues: incorporating
advanced technology, increasing element performance and adding additional elements We would
continue to improve system effectiveness by incorporating advanced technologies as they mature
in our technology base program. As we continue to test we will identify and incorporate
improved components to the system elements, such as improving the kill vehicle, enhancing its
lethality, or refining the system software. When appropriate, we will add additional elements to
the defense. For example, the Space & Missile Tracking System (SMTS), which is being
developed separately by the U.S. Air Force, would be integrated into our proposed architecture as
soon as it was available to enhance overall NMD performance. As I testified last year, the SMTS
system provides a vital role for both NMD and TMD systems. The low earth orbit SMTS is an
integral part of a potential deployment of an objective NMD system While we are enhancing the
NMD system's capability we will address production and deployment lead-time issues to reduce
the time required to field the system when a deployment decision is made.

Funding for NMD has been shifted forward in the FYDP with allocations of about an
additional $100 million per year in Fiscal Years 1997 and 1998. This increase, coupled with the

415

additional funds provided by Congress for NMD in Fiscal Year 1996, will allow us to complete a
reasonable, albeit high-risk, development program leading to the demonstration of the NMD
system in an Integrated System Test in 1999.

The NMD system we will demonstrate in 1999 includes four fundamental building blocks
used by all of the proposed NMD architectures: the interceptor; ground-based radar; upgraded
early warning sensors; and battle management, command, control and communications (BM/C3).
Depending on the threat to which we are responding when a deployment is required, these
elements could be combined in a treaty compliant deployment or some other architecture.

The Ground Based Interceptor is the weapon element of NMD. It consists of an
exoatmospheric kill vehicle (EKV) launched by a fixed, land-based booster. We have made
significant progress over the past few years to develop an EKV which can perform hit-to-kill
intercepts of strategic reentry vehicles in the midcourse phase of their trajectory, Rockwell and
Hughes are under contract to develop and test competing EKV designs which will be evaluated in
a series of flights starting later this year. Following intercept flights in 1998, a single contractor
will be selected for the initial system. The EKV flights, which start this year, will be conducted
using the Payload Launch Vehicle as a surrogate for a dedicated booster. Several options are
being examined for the GBI booster, including Minuteman HI, and other modified, oflF-the-shelf,
boosters.

The NMD Ground-based radar is an X-band, phased array radar that leverages heavily off
developments achieved by the THAAD GBR program. By taking advantage of the work already
completed in the TMD arena, BMDO has been able to reduce the expected development cost of
the GBR by approximately $70 million. In 1998 the GBR prototype, developed by Raytheon, will
be fabricated at the U.S. Kwajalein Atoll to begin testing to resolve critical issues related to
discrimination, target object map, kill assessment, and electromechanical scan.

The Upgraded Early Warning Radar (UEWR) program is designed to answer fiindamental

416

questions concerning how UEWRs can contribute to National Missile Defense while completing
the initial development. We have already completed two years of successful demonstrations,
shovi'ing how software modifications can increase the radars' detection range, sensitivity, and
accuracy. Our plan is to award a contract in early 1997 for the design and test of a software
demonstrator. This tool will be used to prepare specifications for the early warning radars'
upgrades necessary if there is a decision to deploy an NMD system before SMTS is available.

The National Missile Defense Battle Management, Command, Control, and
Communications (BMC3) program provides the capability for the designated operational
Commander to plan, coordinate, direct, and control NMD weapons and sensors. The NMD
BMC3 development program uses an open system architecture and the best industry practices for
development of software that will have the capability to support NMD integrated ground and
flight tests. The BMC3 product, which will include cruise missile defense consideration, leverages
off previous NMD developments and the BMC3 systems being developed for the TMD program.

Over the FYDP, the Department has budgeted those funds required for a deployment
readiness effort, or roughly $2.8 billion. Deployment of an initial system would cost
approximately $5 billion more. Our analysis shows that such a deployment would provide an
effective defense against first generation rogue ballistic missile threats to the US. The intrinsic
strength of our concept for an initial deployment is that the architecture has been specifically
designed for evolutionary development of a more robust and effective NMD system over time, it
can grow to counter an increasingly sophisticated threat, if required.

As I mentioned earlier, one of the significant enhancements to the NMD system will occur
when the SMTS becomes available. This system, funded and developed as part of the Space-
based Infrared System (SBIRS) program, provides 360 degree over the horizon sensing
throughout the threat trajectory which greatly increases the system performance against all of the
potential threats.

417

The NMD development program we are planning will continue to comply with all treaty
obligations. As the 3 plus 3 NMD program progresses, we will study many different technologies
and architectures. We will review these options from every perspective including cost,
operational effectiveness, and existing treaty obligations.

Potential Early Deployment Options. The 3 phis 3 concept I have described for NMD has its
genesis in last year's efforts by the BMDO Tiger Team, which investigated how we could
accelerate the development and deployment of an NMD system to respond to more rapidly
emerging threats to the United States. The Tiger Team, estimating time scales of approximately
four years to deployment, described several opportimities and the associated challenges to deploy
an interim NMD capability to deal with rudimentary Third World threats to U.S territory In this
regard, the BMDO Tiger Team was an important and valuable endeavor Nonethdess, it is
important to note that the opportunities they described are "off ramps" from efforts to develop
and deploy an objective and highly capable NMD system, and if not carefully evaluated, could
become technological "cul de sacs." Simply put, near-temi options might not field an initial
systan that could be evolved to a more effective defense The tradeoff we must consider is
between earlier deployment of a less capable system, or later deployments of increasingly effective
defenses for the U.S. homeland. Our 3 plus 3 approach is designed to provide an early
deployment opportunity which can evolve robustly with the threat and operational needs.

As I mentioned earlier, and as a by-product of the Tiger Team exercise, both the Air Force
and Army provided their recommendations on how to develop and deploy an NMD system. The
Air Force and Army, in particular, have proposed alternatives which are very similar to, and with
immediate commitment to deployment could allow earlier maturation than, tte Department's 3
plus 3 program. In either case, a minimum of approximately four years to a capability was
estimated. Consideration of such alternatives to the 3 plus 3 program has strengthened the
commitment to deployment readiness within the Department. When it literally could come down
to the effective defense of the nation against an accidental, unauthorized or limited ballistic missile
attack, it is critical for us to fully assess all the options before us. The Army, Navy and Air Force

418

remain critical members of our team and are vigorously and efBciently developing those portions
of our 3 plus 3 architecture to which they are assigned.

The Army and Air Force proposals are very similar to BMEKD's plans in that they use the
same fundamental building blocks: ground-based interceptors, ground-based radars, upgraded
early warning radars, and BM/C3. The differences come in the specific design of these elements
and the way they are eventually combined architecturally. The Air Force's proposal is based on
the belief that significant benefits can be achieved by leveraging off the deployed Minuteman III
infrastructure. They propose using the Minuteman III booster to launch the kill vehicle, which
could be either the EKV already described or a somewhat simpler kill vehicle which could be
developed by the Air Force. The Minuteman III concept would allow the use of existing launch
silos and some of the existing BM/C3 network, potentially reducing the total cost. To provide the
necessary sensor data, the Air Force proposes to augment the coverage provided by Upgraded
Early Warning Radars.

The Army suggests a commercial booster developed by combining existing "off-the-shelf
booster stages to launch the EKV. These interceptors would be deployed in the existing silos of
the old Safeguard complex near Grand Forks, North Dakota. In order to enhance radar coverage,
the Army proposes also to augment early warning radars and recommends using technology from
the GBR. •

Each of these architectures has merit, but they also have potential shortcomings Early
deployment options are capable of defending against only the most simple ballistic missile threats -
- that is a few warheads atop first generation ICBMs. BMEK) and CINCSPACE are engaged in
the assessment of the existing and future threats, as defined in the National Intelligence Estimate
and the NMD Threat Assessment Report. The joint endeavor with CINCSPACE includes an
aggressive effort to specify the operational requirements, including effectiveness and coverage,
and evaluate them against architectural options and system level developme'? al requirements.
Two major efforts for this evaluation include active Command and Control sit wlations, which

419

combine architectural options, specific threats, and concepts of operations in a simulated real-
world environment; and a cooperative effort in the development of the Battle Management and
Command, Control and Communications (BMC3) element. The NMD architecture will be
specifically tailored to meet the current and emerging threats.

In addition to such operational concerns, alternative architectures still need to be reviewed
fi-om the perspective of our treaty obligations. For instance, the proposals call for the use of
additional early warning radars. One alternative also would use existing Minuteman III assets
(including silos) as the boosters for the NMD kill vehicles. This raises both ABM and START
Treaty issues.

I think it is important for the Congress to be aware of these and other potential
architectures, including both operational concepts and arms control impacts when considering
these alternative architectures. While I acknowledge that there are potential limitations, I still
believe there is strong merit to considering them.

If we identify an emerging ballistic missile threat to the U.S., I would like to have the best
possible deployment options available to the President and Congress. I want to reiterate, when
we address the defense of the American People against even a rudimentary Third World ballistic
missile threat, I want to make sure we have every feasible opportunity to effectively defeat that
threat as soon as possible.

I strongly endorse staying the course with the Department's current NMD strategy, while
continuing to protect our earlier deployment options. I think h is the prudent course of action
Following three more years of system development, we will reach the point where a low risk
decision could be made to deploy an NMD system, if the threat warrants. If not, we will be
prepared to continue development of a system that could still be deployed quickly in response to a
threat but would ensure a more effective defensive system. The 3 plus 3 program is designed with
the flexibility to allow it to be accelerated if the threat warrants and additional resources are

420

applied. As it is currently structured it provides the capability to deploy with an IOC in 2003, the
date Congress desired At this time the specific deployment architecture is not an issue which
must be decided. What is needed is program stability. Completing definition of a system of this
complexity in three years is a challenge - we cannot afford to keep starting over to develop
something new. I urge you to accept our program and to provide sufficient resources to complete
the deployment readiness phase of the 3 plus 3 program. Then, if it is necessary, we will be
prepared to defend all of America against limited missile attacks by 2003.

BMD Technology Program. As we move forward with our acquisition programs, the
programmatic demands on our BMD resources have continued. I am concerned that because of
this we have been forced to reduce our technology program. I would like to remind the
Committee that today's acquisition programs are possible only because significant past
investments in BMD technology made them possible. For instance, development of the "hit-to-
kill" interceptor technology, now adopted by PAC-3 and THAAD, evolved fi-om the SDIO's
Flexible Lightweight Agile Guidance Experiment (FLAGE) technology demonstration program in
the mid-1980's. Technologies making the infi-ared sensors and data processors possible for the
upcoming SMTS satellite system have been developed over the past decade through BMDO-
sponsored research and development. That includes infi^ared detectors, cryogenic coolers, optical
hardware and radiation-hardened microelectronics.

Just as these past technology investments helped enable current TMD acquisition
programs, today's technology investments will prepare us for evolving, proliferating threats
Evolving threats, based on reasonable extrapolations of credible countermeasures, set the pace
and direction of today's advanced technology program. As a result, next generation TMD and
NMD systems will be able to draw fi-om a set of readily available technology solutions.

We have organized the technology program to balance across several variables, including
TMD and NMD applications, and technology development and demonstrations. In this regard,
we have identified the most critical technology requirements for the program and are pursuing

421

them within the constraints of the funding available for the technology program These unique
technology requirements include:

o sensor and seeker component programs to improve the range and resolution of

missile defense sensor systems and interceptor seekers;

o interceptor component programs to develop faster, smarter, more capable

interceptors;

o BMC3 high-data and low-error advanced component technologies needed in

automated decision aids, data fusion, adaptive defense operations, and secure
communications;

o phenomenological research to determine how the threat, environment and

defensive systems will behave and interact during an engagement, and

0 research into advanced concepts, such as directed energy systems, that are capable
of global coverage (i.e., accomplishing both national and multiple-theater missile
defense missions), and that can engage targets in the boost-phase.

1 believe that proper development of technologies to meet these critical requirements is
essential to maintaining our program's technological edge. Nowhere else in the Department are
the basic or component BMD technology programs funded. Therefore, to ensure the continued
flow of new solutions to meet evolving ballistic missile defense requirements and technology
needs, I encourage the Congress to consider the BMD advanced technology program as a
strategic investment. I will make sure the technology program maintains a clear focus and that its
products remain relevant to the BMD mission and are of high quality. I believe this investment is
critical to the continued success and viability of our BMD program.

Conclusion. The BMD program today is a focused, prudent response to the real world. We are
aggressively working to meet existing and emerging ballistic missile threats, first to our forces
overseas, as well as our friends and allies; and secondly, the emerging missile threat to the United
States.

422

I am dedicated to ensuring that we field improved TMD systems as soon as possible to
provide real protection for our men and women as they go into battle to defend our national
security interests. I believe we have made strong progress in developing and acquiring these
improved systems. I am particularly proud that the lower-tier TMD systems will very soon be in
the hands of the warfighter. We have made this progress because of the strong and enduring
Executive-Legislative consensus on Theater Missile Defenses. This consensus is directly
responsible for ensuring consistent program direction and the stable allocation of resources to get
the job done. This support must continue if we are to deliver on our collective promise to give
the warfighter the protection he needs in a worid with proliferating missile threats.

As I have testified today, the Department has structured a deployment readiness program
for NMD that is prudent and flexible That program acknowledges that some potentially
adversarial nations are interested in developing longer range ballistic missiles which could strike
the United States. The 3 plus 3 program could deploy an effective nationwide NMD system
against a first generation Third Worid threat by the year 2003 However, if that threat develops
sooner, we have options which could deploy an emergency NMD system at an earlier date. Given
the uncertainty of the ballistic missile threat to the U.S., it is prudent for the Department to
proceed with the 3 plus 3 program. However, I think it is critical that we work closely together
on a bipartisan basis to form the consensus for NMD that the TMD program has long enjoyed.
Such a course is required if we are to succeed in maintaining program stability and coherence
The success of NMD depends on our ability to reach this consensus.

On a more personal note, as many of you are aware, I have announced my intention to
retire. Therefore, I would like to express my deep appreciation for the wonderfiji working
relationship I have enjoyed with the Members and staff of this Committee. For two reasons I
have persisted in my plans to retire this year. First, for the first time in 33 years, my family has
asked that I slow down just a bit. Lastly, 1 truly feel that this is a propitious time for the program
to make a leadership change. There is now as much detailed understanding of the missile defense
program on this side of the river as there is on the other. The Administration is committed to

423

missile defense, with the only major disagreement with Congress in terms of how much and how
soon, rather than missile defense, yes or no. Of course, there is much more to be done and we
will need your help to make missile defense a reality. I hope the future Director of BMDO has the
opportunity to work closely with you. Mr. Chairman, Mr Murtha and all the Members of this
Committee That experience has been a great honor and privilege for me. Lastly, I want to
express my deep gratitude to the Committee's professional staff; in particular Mr. Dave Kilian and
more recently Ms. Tina Jonas, for their tireless efforts on behalf of the program.

Thank you, Mr. Chairman. I look forward to continuing to work with the Committee, as
well as the entire Congress, to make highly effective and affordable missile defenses a reality. Mr.
Chairman that completes my statement. I look forward to addressing the Committee's questions,

424

Mr. Young. General, as we have said already, we certainly ap-
preciate our relationship with you over the years. It has been very,
very productive and I think no doubt in the best interest of our na-
tional security.

General O'Neill. Thank you.

Mr. Young. I want to yield to Mr. Murtha at this point. I under-
stand he is going to yield to Mr. Dicks for one question.

THEATER HIGH ALTITUDE AREA DEFENSE

Mr. Dicks. I have to go to the Intelligence Committee and appre-
ciate the Chairman and Ranking Member allowing me to ask a
question before I leave. On the question of THAAD, is the decision
by the administration based on the technology not being ready to
go forward or is the technology ready to go forward if we just put
the money behind it? Because I think THAAD is essential to give
us the broader coverage that we need in theater missile defense.

General O'Neill. Sir, I think it was strictly an affordability issue
in THAAD. It is not a technical issue in THAAD. The program re-
view conclusions did not suggest that.

Mr. Dicks. So the program is ready to go if we put the money
in?

General O'Neill. Yes, sir.

Mr. Dicks. Thank you.

Mr. Young. Mr. Murtha.

patriot system

Mr. Murtha. As you know. General, the district I represent lost
more people in the Saudi War than anybody else. We argue that
it was decimated. We thought at the time initially that the Patriot
system was much more effective than it actually turned out to be.
What is your evaluation now of the Patriot system as far as kills?
What was the final outcome of the evaluation of the Saudi war?
What kind of a kill ratio do we have?

General O'Neill. I would be happy to answer that, but I think
Colonel Montgomery, the Army Program Executive Officer — PEO,
can do better. I would like to ask him to answer that question.

Colonel Montgomery. Thank you. General O'Neill.

Mr. Murtha, I was working other programs at the time and I
only recall some of the work that has been going on. But we were
very effective in hitting missiles I think with the Patriot system at
the time, but we weren't as effective as we thought in killing those
targets. In Saudi Arabia, as I recall, we were in excess of 70 per-
cent effective against those targets and in Israel about 40 to 45
percent effective.

Mr. Murtha. In Israel, it was because of inexperienced people
working the missile system, if I remember; isn't that accurate?

Colonel Montgomery. I don't know the answer to that question.
I don't think that is correct.

THEATER HIGH ALTITUDE AREA DEFENSE DELAY

Mr. Murtha. I think that is the reason. The point I am making
is that the threat in Korea is a short-term or long-term threat. This
Committee went over there a couple of years ago at the request of

425

Secretary Perry on very short notice, and we evaluated the situa-
tion. We were very concerned about the capabiHty of North Korea,
the threat of North Korea, and as General Luck said, he didn't see
it as an increased threat. It is just a potential of something hap-
pening there.

I don't see anything that is effective enough to satisfy me that
we should slow down the THAAD system. I think we are making
a serious mistake, because of money, in slowing down that system.
I know in an open hearing we can't talk about some of the danger,
but this is a real threat. This is not just a thought-up threat. This
is an area where there is a real potential and possibility of some-
thing happening. The Patriot just is as good as we have, but it is
not the ultimate system. So I have a great concern about the delay
of this THAAD, and I know the Chairman has a great concern.

And I know we always have to balance the money out, but it just
seems to me that we are as I said when we had Secretary Perry
before the Committee, we are going to have to get out of Okinawa.
He denied it and said we are not going to get out of Okinawa. Just
like the Philippines, everyone told me we weren't going to get out
of the Philippines yet the Speaker of the House of the Philippines
said you are going to have to get out.

The people of Okinawa are saying we have to get out, so that
means we have a further distance to go. It means to reinforce them
we will have to have port facilities, airfields, which are vulnerable
as they can be.

There is no, I think it is a terrible mistake for this THAAD sys-
tem to be delayed. The public thinks we have a system that works.
They thought that we had a system that worked during the Saudi
war. And I would hope that in our deliberations this will be a pri-
ority and we will be able to come up with the money to fund a sys-
tem that will address what I consider a very substantial threat
down the road.

THEATER HIGH ALTITUDE AIR DEFENSE PROGRAM REVIEW

Mr. Young. General, I was going to wait until after my col-
leagues completed their line of questioning, but I do have to ask
one at this point. In view of Mr. Murtha's focusing on THAAD and
in view of the direction by the Congress last year dealing with
THAAD; in the Kaminski review, one of the decisions was to slow
down the THAAD program.

Why was your organization not an official part of that review?

General O'Neill. This was the second review. The first was
called the Bottom-Up Review. This was a program review. It was
felt for both reviews that they should be done independently and
that we the ballistic missile defense proponent would provide
input, but we were basically so deeply involved in the advocacy of
our programs that it was felt that an independent group, it would
be easier for an independent group to assess the merits, the rel-
ative priorities of missile defense versus the other priorities in the
building. That is why we weren't directly a party to the process.

I did in both cases have an individual who sat with the members
of the program review and knew everything that was going on in
the program review. After it was finished and the recommendations
went to Dr. Kaminski, I went and sat with Dr. Kaminski and we

426

went over every one of the recommendations, and I was allowed to
argue my point with regard to each of the recommendations. And
then he listened to me, looked at the recommendation, and there
were many changes made based upon the dialogue that I had with
Dr. Kaminski, and many of those changes I think were very posi-
tive adjuncts to the program review results.

But basically that is the way it was felt it was better to do it.
I think it was reasoned by a lot of people that if I was asked to
review my program I would come back and say it is perfect, don't
change anything. Don't even change a nickel. I think that is a fair
assessment.

We have done a lot of work putting that program together. It
would have been much harder for me to find $2 billion for the pro-
gram than it was for this independent group. They seemed to do
it pretty easily.

Mr. Young. You were there?

General O'Neill. We were there and we argued strongly.

Mr. Young. Was there an3^thing other than cost that brought
about the decision on THAAD?

General O'Neill. To my knowledge, no. Cost was the principal
issue and also the feeling by the members of the program review,
which I think had great intuition — it was a very intelligent thing
that they said.

They said. General O'Neill, what you have done in your program
is you have developed one system in response to Congress. If you
remember the missile defense acts of 1991, Congress told us that
they wanted a significantly improved theater missile defense capa-
bility by the mid-1990's.

Here we were in the mid-1990s and we hadn't achieved that yet.
So what we planned for THAAD was development of two systems;
the development of a system I called User Operational Evaluation
System — UOES. Something you can put in the hands of the troops,
but at the same time, it hasn't been through all of the testing re-
quirements and all of the procurement requirements and things
like that, to be followed by the development of another THAAD sys-
tem which filled all the blocks in terms of reliability, availability,
maintainability.

And what this program review group saw was that I was actually
rebuilding THAAD in Phase 2. And they said why don't you take
the UOES design and merely turn that into a system? Can't you
save a lot of money that way? And we experts looked at them and
said that is a good idea. That is smart. We were trying to make
a quantum jump before we actually had something in the hands of
the troops.

So from that standpoint, I think the program review outsiders
had significantly good intuition and that is a way that we could
have saved some money, and I applaud them for that.

Mr. Young. Mr. Skeen.

THEATER HIGH ALTITUDE AREA DEFENSE — EXTERNAL CUE

Mr. Skeen. Thank you very much, Mr. Chairman.

General, I wish you well on your retirement. It has always been
a pleasure working with you. While we are talking about THAAD,
let's get to the question of multiple cuing. I understand it to be a

427

problem. This is an appropriate forum to talk about it because I
think that is what you were touching on a moment ago.

There seems to be some kind of a barrier in the thinking of the
planners that for some reason there hasn't been a sparkle in their
eye. It is a tactical weapon. Would you comment on that?

General O'Neill. I will be happy to, sir.

At present, I have directed the program manager, Colonel Mont-
gomery, that based upon guidance I have received, that he cannot
write the software to allow external cuing of the THAAD system.
So the THAAD system basically if it were available today, if it were
committed to combat, it would not satisfy the requirements that we
had levied on THAAD. It would not be able to see out far enough
to see the incoming threat.

I have told the compliance review people that I have to initiate
the writing of that software on 1 October 1996. If I don't, the
THAAD program will slip on a day-for-day basis and I will not rec-
ommend that it be deployed until it has the capability to receive
an external cue.

The reason we held up on writing the software was that it was
determined by the legal authorities who reviewed the compliance
process for THAAD, that if THAAD were externally cued, it had a
nontrivial capability in strategic ballistic missile defense mode.
And for that reason, there would have to be a treaty determination
made. And we have been in the process of discussing a way to
demark the TMD systems from NMD systems with our former
treaty partners, the follow-on stage

Mr. Skeen. That brings the treaty in?

General O'Neill. Yes, sir. There has to be a decision made. And
for that reason, we are in discussions right now with the Russians,
the Kazachs, the Ukrainians and the Belorussians on that subject.
That is where we are. I am telling my management that I have to
have relief by 1 October or THAAD is a problem.

Mr. Skeen. I appreciate that response. I hope we can get some-
thing worked out because I think we have an extraordinary oppor-
tunity to make a very versatile

General O'Neill. We have argued strenuously that there is no
reasonable ABM capability afforded by our TMD systems, but
again we have to convince a whole set of people that that is in fact
the case.

HIGH energy laser SYSTEM TEST FACILITY

Mr. Skeen. Speaking of convincing people, as you know, the
High Energy Laser System Test Facility, HELSTF, is at White
Sands Missile Range, in my district.

General O'Neill. Yes, sir.

Mr. Skeen. Every year we go through the business about we are
going to shut HELSTF down and take the funding away. Would
you comment on the track record of this system and this test facil-
ity as far as projects are concerned, and would you also illuminate
the prospect of future projects that will be worthy of testing at
HELSTF?

We have been holding a very unique group of people together. It
is the only in-space technology that I know of that we are working
on. To disband this group would be I think a terrible mistake.

428

General O'Neill. Yes, sir. Well, the High Energy Laser System
Test Facility at White Sands consists of a multi-megawatt chemical
laser and a large pointing tracking system, and it is used to test
high power laser lethality, vulnerability, and survivability. It tests
tracking and pointing and use of the — of a system to acquire tar-
gets at long range using optical sensors.

It was developed by the U.S. Navy. It is now being operated by
the U.S. Army. It has been a tool that we in BMDO have used over
the years. It is not a part of my program primarily because my Di-
rected Energy program looks at a space-based laser.

We are looking at hydrogen fluoride as the laser. HELSTF uses
a deuterium laser. So it is a little bit different than the lasers that
I am working, but it is America's only facility for out-in-the-air
testing of high-powered laser technology. And as we see things
coming in the future, like the use of lasers for tactical defense, the
use of an airborne laser for boost-phase intercept, I think the High
Energy Laser System Test Facility becomes an important consider-
ation, and I would certainly hesitate to turn that facility off until
I knew what the impact was going to be on the National Directed
Energy program.

Mr. Skeen. Rather than having a successful program record, is
money the major problem with the system?

General O'Neill. That is the problem. I would like to add that
this large pointer tracker you can use without the laser. And I have
stood up and said that even if the laser goes away, I want to keep
the pointer tracker system, the tracking system active to support
testing at White Sands of things like Patriot, Navy area defense
and THAAD. You can do that without the high-power laser, but it
is one of the best optical systems in the world. It is a 1.2 meter
telescope, and that is a very large optical telescope.

Mr. Skeen. Thank you.

Thank you, Mr. Chairman,

Mr. Young. Mr. Bonilla.

THEATER HIGH ALTITUDE AREA DEFENSE BATTALION

Mr. Bonilla. Thank you, Mr. Chairman.

Good morning. General. I will be the fourth person then in a row
that is going to talk about THAAD. I believe it is not just impor-
tant to our national security but I have an installation in my dis-
trict, so we keep a close eye on it in Texas.

I was looking at the defense numbers not only through this Com-
mittee but Military Construction or MilCon, and they appropriated
$13 million for THAAD for this year. And I notice the projection
for next year is zero. What is that $13 million for?

General O'Neill. To my knowledge, and I will defer to Colonel
Montgomery if I am wrong, I think that was to provide the capa-
bility at Fort Bliss, McGregor Range, to house the equipment for
this battalion that we are standing up to do the user operation
evaluation system. We have to stand up the skeleton of a unit that
would be able to exercise the THAAD during this Operational Eval-
uation phase.

One of the ideas that we were thinking about when we came up
with the concept of UOES was let the user have the equipment be-
fore you buy a lot of it and let him see if it works, see if it is dan-

429

gerous, see if it does its job, and before you invest billions in the
system, let him do that.

THAAD is the test case for UOES. That THAAD battalion that
we stood up 9 months ago is the tester. It is the real Army soldiers
out there who will be able to tell us early whether the THAAD is
going to work or not. I think what that MilCon was for was for the
facility that they need — partially, I think there is other stuff. But
the largest percentage of the dollars was for the motor pool area —
not the barracks, because that is paid for under Army MilCon, but
the motor pool area, the technical areas that are required to per-
form maintenance and to store the equipment.

Mr. BONILLA. How much would it cost, do you think — sometimes
when things are delayed it costs more later to pick up the pace and
get back on track. Would that be the case with THAAD? If we were
able to figure out how to fully fund what we think is necessary,
would it cost more now since the delays are already in place?

General O'Neill. It might cost slightly more, because with the
direction we received in the program review, certain contracts were
modified. But I don't think — these changes have been made over
the last 2 or 3 months, so it is nothing that we could not recover
from and react in a very positive way to. I don't see it as a big
problem.

MEDIUM EXTENDED AIR DEFENSE SYSTEM

Mr. BONILLA. I have one additional question about MEADS that
is being developed jointly with France, Germany and Italy. I read
an article in "Defense Weekly" that said that France might be pull-
ing out of this program. What impact would that have if France
chooses to do that?

General O'Neill. If the French do not sign the Memorandum of
Understanding, MOU — we haven't gotten a formal agreement for
the four nations to proceed yet. We were expecting that agreement
by 15 April, and the French advised us late last week, and Dr.
Kaminski is still in Europe talking to our allies about this pro-
gram, so he has very current information on the subject.

But what I understand is that the French representative advised
him last week, late last week that France would not be ready to
sign this Memo of Understanding on 15 April, because they are in
the middle of a program review of their own. They are reviewing
their whole defense program.

As a result of that, we are attempting to coordinate with our
other allies, Italy and Germany, to see how we might be able to do
this program with three rather than four participants.

Off the top of my head, if we went to three participants, the U.S.
share would probably have to absorb part of the share the French
were contributing, which was 20 percent of the program. So off the
top of my head, based upon the earlier sharing agreements, it looks
like America would probably take 60 percent instead of 50 percent,
the Germans 25 percent instead of 20 percent, and the Italians 15
percent instead of 10 percent. That is off the top of my head. Noth-
ing has been agreed to and we are still having day-to-day discus-
sions with our allies.

I know the Germans have an urgent requirement. I think the
U.S. Army and U.S. Marine Corps have an urgent requirement. I

430

think the Itahans want to play and I think the French want to play
but they don't want to step into something unless they can commit
their Minister of Defense, or MOD for the duration, and I appre-
ciate that. It would be easy for them to sign up and then drop out,
but they don't want to do that.

I appreciate them taking a long, hard look at this thing, because
once I get my team together, I don't want people dropping by the
wayside. I want them to go for the duration.

Mr. BONILLA. Thank you. General. This is my second year on this
Committee, but I met you last year and I appreciate your appear-
ance here and your hard work, and I wish you luck in your retire-
ment.

Thank you, Mr. Chairman.

Mr. Young. Mr. Nethercutt.

ARROW THEATER MISSILE DEFENSE PROGRAM

Mr. Nethercutt. Thank you, Mr. Chairman. Welcome, General.
I echo Henry's comments about your retirement and being new to
this Committee.

I want to talk with you for a moment about the Arrow Missile
Defense System, the Arrow program. Last year, you testified that
the United States-Israel Arrow program was providing substantial
technical benefits to other theater missile defense efforts of the
United States. I would like to get a sense from you what technical
benefits that program can provide our country and how you think
Arrow is advancing the United States theater missile defense ef-
forts?

General O'Neill. The Arrow program is a success story. It has
been a very profitable venture I think for America. We have a de-
termined ally with a sense of urgency who wants to defend his
country, and I think Israel will be the first in the world to have
national missile defense, and Arrow is the national missile defense
system for Israel.

So when you go to Israel to work with your ally over there and
it winds up being 10 o'clock at night and they are still very ear-
nestly working their slide rule and their computers, don't be sur-
prised, because that is the temper that they put into what they
consider their survival, which is tied directly to Arrow.

So I see a lot of quality in terms of the minds and the hardware
and the efforts going into Arrow. We are the beneficiary in that we
are exposed and have the right to be exposed to ever3d:hing the pro-
gram does.

T mentioned last year that the focal plane was identical with the
advanced focal plane for THAAD, same material, same configura-
tion, same subcontractor. The Israelis tested it first, so we now
have proof from Israeli flight tests that the focal plane works. You
can track the target.

The Israeli Arrow has not intercepted a target yet but they are
going through a step-by-step program, and each test testing their
operational missile has been a success from front to back. Every
step has proceeded exactly the way they planned it and everything
that they asked that missile to do, it did.

The next test is an intercept test. That is the proof of the pud-
ding. It is like taking batting practice and then going into the

431

World Series. Now they are stepping up to the plate in the World
Series and have a clean slate. I am confident and I don't think I
would be more confident in Americans doing that testing than I
would be for the Israelis.

Mr. Nethercutt. Do you sense that Israel is fully committed to
further testing and going step by step? I had heard last year that
maybe Israel was not fully committed.

General O'Neill. Yes, sir. That comment came out last year in
a hearing and I almost fell out of my chair. I would welcome any-
one who doubts the commitment of Israel to Arrow to go over. I am
leaving Friday afternoon. We will be working all day Sunday, all
day Monday, and then I come back Tuesday because it is their Me-
morial Day and that is one day a year when they don't work 12
hours. They are as committed as anyone I have ever seen com-
mitted to any system I have ever worked on, and it is a pleasure
to work side by side with those guys and gals, because they are
just outstanding.

Mr. Nethercutt. I noticed in "Defense News" a month ago that
Under Secretary Kaminski was quoted as saying that BMDO plans
to spend about $500 million in 1997 on national missile defense de-
velopment. But Kaminski said because there is no threat that war-
rants it, the Department of Defense has made a decision not to
commit to deploy a national missile defense system today.

In light of reported veiled threats by China relative to Los Ange-
les, do you share Mr. Kaminski's view?

General O'Neill. Sir, I always defer to the threat document, and
I would commend you to read the National Intelligence Estimate —
NIE which some have distilled in a different way than I have. I see
a threat. I see a threat evolving, I see a threat earlier than 15
years hence.

But I also support fully this strategy of three plus three, because
I can have a system in the field in 2003, which is just about the
time I think we got a serious problem on our hands. So I like the
philosophy of being in a position to have a capability in 2003.

So I think that those who have really read the NIE, and I think
Dr. Kaminski has, that the reason that he supported and pushed
me very hard in this 3-plus-3 program is that he feels the Presi-
dent needs to have an option to have something there in the hole
in 2003. You wouldn't want to do that unless you felt there would
be a threat there at that time.

I think the issue is actually seeing the threat or having such an
uncertainty in what might come that you want to have that insur-
ance policy. I think Dr. Kaminski is committed to having that in-
surance policy. If he sees that threat getting closer to fruition than
it is today, I don't think he would hesitate to support deployment,
and 2003 I think is a reasonable target date.

Mr. Nethercutt. You would support that additional deployment
as the need arose, I take it?

General O'Neill. Certainly.

Mr. Nethercutt. Do you feel that we are adequately protected
at this point? Are we adequately prepared for whatever might come
up between now and 2003, and certainly beyond?

General O'Neill. Again, I don't think we are protected. Nor are
we prepared yet. We have a deterrent and from the time I was a

432

shave-tail lieutenant, I rejected the idea of killing somebody be-
cause he killed somebody else. I would rather fmd a way to defend
myself I would rather put a wall between us than sitting there
with a loaded pistol at somebody's temple. I think this program
that we are projecting right now is an intelligent compromise pro-
gram between those who want to deploy something today and those
who want to wait and see.

I think this in 3 years or as the threat emerges and as we find
out more about what is happening in the Far and Mideast, I think
it is a reasonable compromise program and one that I certainly
support.

Mr. Nethercutt. Is it adequately funded?

General O'Neill. It is adequately funded. But in response to the
question from the House National Security Committee, HNSC, I
told them the risks that you have to accept when you fund a pro-
gram at the level we are. One risk, for example, is we will buy a
single interceptor for tests. So if the man is walking toward the
rocket to assemble the interceptor and he drops it on the floor, I
will have to come to Congress and probably tell them I need a 9-
to 12-month delay in the program.

We have in our programs normally several copies of interceptors
that we would have in the wings. If somebody dropped one, he
could say I dropped that one but I have one on the shelf We don't
have that luxury in this program. We understand that. If we had
additional resources we would reduce the risk, but the program
would be basically the same.

Mr. Nethercutt. How much could we reduce the risk for how
much money? How much more would we need to give you a greater
level of comfort?

General O'Neill. I have been working on the answer to that
question for 2 or 3 weeks. I would prefer to answer that question
for the record because I say something off the top of my head and
it would be wrong.

[The information follows:]

National Missile Defense. The BMD Program Review increased outyear funding
for the NMD Deployment Readiness program by $100 miUion in each of FYs 1997
and 1998. The Department is committed to the development phase of the 3 plus 3
program, essentially the first three years, and this initial increase in resources helps
develop the NMD systems and technologies.

The original version of the FT 1996 Defense Authorization Bill, which was vetoed,
contained guidance to deploy an NMD system by 2003. The funding level authorized
to accompany that program was $720 million. The FY 1996 National Defense Au-
thorization Act did not contain any specific NMD deployment guidance, but retained
the funding level at $720 miUion.

While the Department's 3 plus 3 program requests $508 million for FY 1997, and
projects a similar amount in 1998, additional resources could be used to ensure that
we proceed with the program in a manner that minimizes technical and schedule
risks. An additional $350 raiUion in FY 1997, followed by similar amounts in FYs
1998 and 1999, would achieve a lower-risk 3 plus 3 program. This investment would
prepare us well to deploy an NMD system in the year 2003, if a decision was made
to do so. The increase in funding would reduce program and schedule risks by en-
hancing efforts in five fundamental areas.

[In millions of dollars]

Accelerated New Booster for 1ST in 1999 $100

Additional Hardware to Eliminate Single Point Failures 50

Increased Hardware Testing 120

Continued Competitive Developments 40

433

Increased Deployment Planning/Preparations 40

Total 350

These activities would specifically include the following:

• Accelerate development of a new booster to support an integrated system test
in 1999. The 3 plus 3 program has deferred the development of the booster, which
would launch the Exoatmospheric Kill Vehicle, until late FY 1998. Based on this
start date, the booster would be available to support a 2003 IOC, but would not be
available for use in an integrated system test until after 2000. The additional fund-
ing would allow this activity to be accelerated and started in FY 1997.

• Procure additional hardware to eliminate single point failure modes. Because of
funding limitations, in many cases only a single piece of hardware or a single target
has been planned for purchase. If this hardware fails, test activities may be delayed
while necessary repairs are done. In some of the more serious cases this might delay
the program by many months. The additional funds would allow us to purchase
backup targets and target launch vehicles and establish a prudent "spare parts" ef-
fort in our flight test program.

• Add additional tests. By combining Integrated Flight Tests with hardware in
the loop ground testing and advanced modeling and simulations, it will be possible
to demonstrate the capability of the NMD system. The additional funds would sup-
port procurement of flight and ground test hardware necessary to double the num-
ber of integrated flight tests per year (from one to two), starting in 1999. In addi-
tion, we would accomplish a two interceptor on two target engagement (2 on 2) and
increase our ground testing, modeling and simulation efforts. Increasing the level
of testing and supporting it with increased simulations will increase the confidence
necessary to make a fiiUy informed NMD deployment decision.

• Continue competitive development to reduce risks. The additional resources
would be used to delay the down-selection of the EKV contractor until after at least
one additional flight test was conducted by each of the contractors. The funding
would also allow competition in the target development effort to reduce the cost of
the target necessary for the enhanced test program.

• Deployment planning and preparation activities. The 3 plus 3 strategy requires
that the system developed during the first three years be deployable within 3 years
of a deplo3Tnent decision. To make this possible it is necessary to accomplish much
of the deplojTnent planning before the actual deployment decision is made. Because
they require substantial lead-times, activities such as environmental impact assess-
ments and site design for potential deployment sites must actually be completed be-
fore the decision is made. Development contracts must be modified to incorporate
the necessary production planning and preparation activities and to prepare inte-
grated logistics support necessary to accomplish fielding the system.

Mr. Nethercutt. Thank you very much.

ARROW MISSILE FUNDING

Mr. Young. Mr. Nethercutt raised the issue of Arrow, and the
hearing you referred to prompted me in the mark I presented to
the Committee last year not to include funding for Arrow. I re-
ceived phone calls quickly from the Israeli Ambassador and De-
fense Minister and others, and I asked them to send a letter to the
Committee committing to their financial participation in the pro-
gram as well as their intent as to whether or not they would actu-
ally deploy the system. The letter did get to their financial involve-
ment and to their deploying the system. We did restore the fund-
ing, and I am happy to hear the program is having so much success
now.

General O'Neill. They will go into the field first, and I am very
jealous of that.

missile DEFENSE PROGRAM FUNDING

Mr. Young. The slowing down of THAAD, Upper Tier, PAC-3
and National Missile Defense, the budget request from the Presi-
dent is $100 million less for THAAD than we appropriated last

434

year. It is $142 million less for Navy Upper Tier. It is $238 million
less than we appropriated for National Missile Defense.

What would it take, in your opinion, in order to stay with the
program and the time schedules as suggested by the Congress last
year for fiscal year 1996? How much money would it take to get
back on track over and above the administration request?

General O'Neill. I have been working on the answer to Mr.
Nethercutt's question and that question.

If I may answer that for the record, sir?

Mr. Young. Lower Tier may be over the President's amount.

General O'Neill. Sir, we have determined that the level of fund-
ing that we had projected in the Navy area program as well as in
Patriot was too high-risk a budget. The program review looked at
it in depth and recommended increases of over $300 million over
the FYDP in Patriot and $186 million over the FYDP in Navy area.

One of the things that happened in the Navy area program was
the program had a long start-up. What happened was the two com-
peting contractors decided that they would go into a joint venture
and manage or bid for the follow-on contract for the Navy area de-
fense together as a team. This took several months, up to 6 months
to put the team together, make agreements, go through the anti-
trust people to make sure that there wasn't any law that they were
impinging upon, and that caused a slip to the Navy area program
as a result. That slip, in order to keep the teams together, took
money, and then when the Standard Missile Company was finally
stood up and could execute the program, they needed to come up
to speed, and it took additional resources.

There have been a few fact-of-life technical problems — problems
that were anticipated, but problems that cost a little bit more to
fix, and time turns into dollars — and it took some time to fix the
problems over and above what we had anticipated. So that is the
story of the growth in Navy area defense cost.

We tried to keep the date of fruition of that program as close to
the congressionally mandated date as possible. We are out of sync
with the congressionally mandated dates now by about one year. I
always tell the Congress that that is not a stretch of the program
that was money-driven. That was Mother Nature technology, fact-
of-life driven.

MISSILE DEFENSE PROGRAM SCHEDULE

Mr. Young. General, are the congressional mandates that you
are referring to, are they realistic?

General O'Neill. Sir, I think right now the answer is no. They
are off. I would certainly suggest that the PAC-3 date that Con-
gress asked for of 1998, we can't make that. We can make 1999.

Mr. Young. What is the reason for that?

General O'Neill. The reason for Patriot, sir, was the start up
again of the Patriot effort. The start-up effort took longer than we
had thought. The Patriot had to be redesigned slightly because of
range considerations, and safety considerations.

One of the things we had to do was we had to put positive con-
trol into the Patriot PAC-3 system. The Army user would not ac-
cept a weapon that was uncontrolled, that had the potential that
Patriot had in terms of velocity, range and kill capability. They

435

wanted to have a continuous downlink from the Patriot to the Pa-
triot command and control system so that if they had to destroy the
system, they would for safety reasons. That took time. All in all,
the slip was one year.

Navy area, the Congress asked for 1997 for UOES in 1999 for
the first unit equipped. Those dates are now 2000 and 2001. The
THAAD, the Congress asked for 1998 for UOES and 2000 for the
first unit equipped.

We testified last year that the fastest we could do THAAD was
2002. So the slip that you might call a 6-year slip, to us was really
a 4-year slip in the program review; because now at 2006, that
would be a slip from 2002 to 2006.

But from a congressional standpoint it was 2000 that you asked
for. I would have told you had you asked me that that is very high
risk, it was a risk that I don't think you would want to accept in
getting that piece of hardware to the troops, because it would not
have been through the necessary development and testing.

In terms of the Navy theater-wide the dates that you asked for
1999 for the UOES and 2001 for the first unit equipped. The dates
that we suggested were out in the 2003 to 2005 time frame for
those. So I think a consensus needs to be reached on what are the
achievable dates with the resources that we are going to have for
the programs.

Mr. Young. General, you said that had we asked you would have
given us different advice.

General O'Neill. I think you did ask, and I think I said 2002.

Mr. Young. I just wanted to extend an open invitation, that if
sometime we don't ask a question and you see us going in a direc-
tion that maybe we don't have all the information, please make
sure we have all the information. Because whatever scheduling
mandates or funding that we set, we want to be realistic and work-
able.

General O'Neill. The message I got was to do these things as
fast as you can and try to cut out the bureaucratic delays. We are
trying as much as we can to do that.

Mr. Young. I think we would certainly concur with that.

Mr. Istook.

WIDE AREA SYSTEM CAPABILITIES

Mr. Istook. Thank you, Mr. Chairman. Thank you. General. I
hope I am not duplicating what you may have already discussed.

I would be interested in hearing from you just a basic discussion
of the differences in the capabilities of a system such as THAAD
or Aegis or any others. I have heard from different people who be-
lieve that more focus should be on Aegis as far as its capabilities.
I would appreciate your views. Do they really differ in their capa-
bilities and their potential?

General O'Neill. I would be happy to. I will start with the
Upper Tier systems, THAAD and the Navy theater-wide

Mr. Istook. So I have a clear delineation of where Lower Tier
stops and Upper Tier begins.

General O'Neill. Yes, sir. The Lower Tier systems basically have
footprints that you measure in tens of kilometers. A typical foot-
print for a Lower Tier system is 50 kilometers or so. I cannot give

436

you the exact numbers. They are in fact better than that. Let's say
50 kilometers as a basis.

The footprint for the Upper Tier system start at hundreds of kilo-
meters and can go beyond that. A system like the Navy theater-
wide, if you talk about a footprint, you might measure its footprint
in a particular mode in a thousand kilometers or so footprint.

Let me describe the difference in the two systems. The THAAD
system is a ground-launched system, it is mobile, lightweight, it
has to move with the Marines and Army. It can defend areas nomi-
nally 100 kilometers or more in radius, so it has a significant capa-
bility to defend large areas. And that is why we call it a theater
high altitude area defense system.

Its low end is approximately about 30 kilometers or so altitude-
wise, and it goes up as high as any theater ballistic missile can fly,
several hundred kilometers in altitude. So it has a significantly dif-
ferent altitude regime than a Patriot, which reaches its ceiling at
about that 30 kilometers. The Navy area system also has a ceiling
of about that altitude.

Mr. ISTOOK. The Navy which system?

General O'Neill. The Navy Lower Tier System. The THAAD is
employed in a terminal defense mode; that is it is deployed at the
far end of the trajectory of the threat. It defends a particular area.
It is not possible for the THAAD to move into proximity with the
launcher of the tactical ballistic missile in most scenarios.

I am sure you could come up with a scenario where we had a
THAAD unit and the enemy was trying to hurt a force that was
1,000 kilometers behind the THAAD unit, and then the THAAD
might be able to interpose itself between the two points.

The Navy system called Navy Upper Tier or Navy Theater-wide
is the Upper Tier equivalent of THAAD. However, it is a mobile
system. It doesn't have to be put into a ground configuration. It
doesn't have to be quite as lightweight because it is housed on a
many-thousand-ton ship, and it moves 30 miles an hour, roughly,
as it is doing its job. Depending upon the layout of the battlefield,
the ship can either get close or it can't get close.

Let me take one situation. In the scenario where you have North
Korea threatening Japan, you have a large Sea of Japan which
would allow an Aegis vehicle to either defend in a terminal mode
like THAAD, it could defend in a harbor in Japan as this target
was coming at it, or it could move closer and closer to the North
Korean coast, and as it moved closer and closer to the North Ko-
rean coast it could get into such a proximity that it could actually
hit the enemy missile as it was going up or ascending.

In that way a single ship could defend the whole country behind
it. So we are looking at the potential of this Navy Upper Tier Sys-
tem for some of our major regional contingencies, like the Middle
East threatening Europe, or the Persian Gulf as an intervening
body of water or the Sea of Japan as an intervening body of water
being a natural place in which to do missile defense. And the Navy
is very interested in working with us to develop that capability
that we call Navy Upper Tier.

So when people try to talk to me about the similarities between
THAAD and Navy Upper Tier I generally talk about the dissimilar
later. It is really an apple and an orange.

437

There are technologies that apply to both, but if you wanted to
use, for example, the THAAD as the Navy Upper Tier, then you
might very well have to give up this ascending missile defense mis-
sion. You might only be able to use it in the terminal phase, and
I don't think the user, the warfighter, right now is prepared to give
that up.

I think the warfighter wants to make these systems be all they
can be, THAAD and Navy Upper Tier to be all they can be. So they
are different systems, deployed differently. An advantage you have
with a ship-borne missile defense system is you don't have to have
anybody's approval to stage it in an ally's country.

As you probably recall, it took some time to get everybody com-
fortable about Patriot going into South Korea. The Navy could have
been over the horizon all that time with a missile defense system
that could have provided protection for South Korea without any-
body ever even having to ask. That is an advantage that the Presi-
dent would have with a seaborne system as opposed to a ground-
based system.

ARROW MISSILE CAPABILITIES

Mr. ISTOOK. You mentioned THAAD, Patriot, Aegis, in that sce-
nario, where does the Arrow potentially fit in?

General O'Neill. The Arrow fits somewhere between THAAD
and Patriot, but it is too heavy for us, it is not mobile enough for
us. The Israelis put an arbitrary ceiling on their system because
they wanted to use Israeli technology, not American technology,
and did not want to get into a treaty problem. We saw the require
ment to defend larger areas than an area the size of the State ov
Israel.

Mr. ISTOOK. So if you are talking about the area that could be
defended, and I realize the difference between terminal and getting
something when it is still lifting, if you talked about, in terms of
radius, the areas that those respective systems would defend, with-
out getting into classified information, what would those radii be
for THAAD, Patriot, Arrow, Aegis?

General O'Neill. The radii for THAAD, hundreds of kilometers;
Patriot, tens of kilometers; the Arrow in between.

Mr. ISTOOK. On this, since obviously you have got different areas,
theoretically you could say that if you were positioniDg something,
you might have multiple numbers of THAAD to defend the same
area that one Aegis could defend, but you factor in the capabilities
and the cost differentials. I presume you had some sort of formula
that you employed to try to make that kind of analysis. Could you
expand on that?

General O'Neill. We have analysis with what we call a cost and
operational effectiveness analysis, the applications of sea-based and
ground-based systems. Thus far, the mixes that we have come up
with support the procurement profiles. It basically says you are
buying equal, generally speaking, equal quantities of the sea-based
Upper Tier and the THAAD system.

Mr. ISTOOK. I would like to get some information, if you could
provide it to us, on this cost differential and analysis.

[The information follows:]

438

The Department of Defense requires that prior to a Defense Acquisition Board (DAB)
Milestone decision, Theater Missile Defense (TMD) programs conduct a Cost and Operational
Effectiveness Analysis (COEA). The COEAs focus on the appropriate material design for the
specific mission and the cost effectiveness of different design options. The TMD Baseline
Architecture develops through the combined use of the individual system COEAs and other
analysis. This initial effort describes the systems and the relative mixes that would comprise a
robust TMD program. The Baseline Architecture consists of systems already fielded plus the
TMD programs that have received DAB milestone approval. The Baseline includes the
following systems:

• HAWK (interceptor and TPS-59 radar),

• PATRIOT (PAC-2, PAC-3 interceptors and MPQ-53 radar),

• AEGIS (SM2 Block IV air defense interceptor and AN/SPY- 1 radar),

• THAAD (interceptor and TMD Ground Based Radar),

• Airborne Warning and Control System (AWACS),

• Early Warning Assets:

Defense Support Program (DSP) ,

Joint Tactical Ground Station (JTAGS),

Attack and Launch Early Reporting to Theater (ALERT),

and a Surveillance Radar (TPS-75).

As part of the Program Decision Memorandum issued in August 1994, the Deputy
Secretary of Defense directed a Comprehensive Theater Missile Defense Missions and Programs
Analysis. The central element of this analysis was to be a COEA with BMDO as the designated
lead working with Office of the Secretary of Defense (OSD), the Joint Chiefs of Staff (JCS), and
the Services. The key issue for the Capstone COEA was to refine the mix of systems that formed
the TMD Baseline Architecture and the cost-effectiveness of alternate mixes of systems. The
Capstone COEA architectural findings for Phase I of the analysis were presented in October
1995 to Dr. Paul Kaminski, Under Secretary of Defense for Acquisition and Technology, and
ADM Owens, then Vice Chairman Joint Chief of Staff Phase II of the COEA is on-going and
scheduled for completion by the end of the summer.

The analysis approach in Phase I of the COEA revolved around a detailed evaluation of
the TMD Baseline Architecture. Specifically, the COEA focused on the strengths and limitations

439

of the Baseline architecture in a variety of operational scenarios and the possible need for
additional TMD systems. After determining the strengths and limitations of the Baseline
architecture, the next step was to evaluate the capability of alternative systems to eliminate or
mitigate any identified Baseline limitations.

The Phase I COEA analysis highlighted the need for both land- and sea-based TMD
systems for both lower- and upper-tier defenses. The multi-tier architectures analyzed provide
the most effective and robust defense due to three primary factors:

• Wide area coverage and large battle space;

• The opportunity for multiple engagements which increases the probability of killing a
threat warhead; and

• The complementary coverage each tier provides against a mix of short and longer
range threats.

These architectures can provide low leakage over a broad range of TBMs threats (150 km
to over 1000 km range) with reasonable inventories by permitting many independent shots over a
large battle space. The two-tier Baseline architecture of PATRIOT plus THAAD performed
extremely well in defense of critical assets against TBM attack when deployed at the beginning
of hostilities. In a 2002 Korean scenario, for example, the Baseline architecture showed the
capability to intercept virtually all of the TBMs targeted against the CINC's critical assets.
COEA analysis also showed the Baseline architecture could also intercept virtually all of the
2010 TBM threat in an Iraqi conflict. This exclusively land-based architecture provides
overlapping two tier coverage of all critical areas. However, the success of tlie PATRIOT-
THAAD architecture in the Iraqi scenario is critically dependent on pre-deployment of TMD
assets in the theater, airlift availability to deploy TMD assets, warning time of impending
hostilities, or combinations of these three factors.

The addition of sea-based, airborne, or space-based systems to the Baseline architecture
removed the critical dependence on pre-deployment, warning time, and airlift availability for
Baseline only architectures. Having defensive systems in place at Air Ports of Debarkation
(APODs) and Sea Ports of Debarkation (SPODs) prior to the start of hostilities is very important
to the overall objectives of U.S. military strategy. APODs and SPODs are critical to tlie arrival
of troops in theater and, therefore, are logical targets for early use of TBMs.

Sea-based architectures with upper and lower tiers are also highly effective and reduce
sensitivity to warning time and airlift. However, for some theaters, sea-based TMD architectures
may not offer overlapping protection of inland critical assets. The Capstone COEA analysis of
protection for APODs and SPODs in the Middle East highlights this. In a hypothesized situation
with little warning time for deployment of PATRIOT and/or THAAD, a Navy Area Defense
(lower tier) system could protect coastal assets resulting in the interception of the majority of the
TBMs targeting APODs and SPODs. A Navy Theater Wide (upper tier) system could protect
against longer range TBMs and intercept the majority of the TBMs to APODs and SPODs. An
architecture of both Navy Area Defense and Navy Theater Wide defense could intercept virtually

440

all of the TBMs targeted against APODs and SPODs. Such architectures might have to be
supplemented by land-based lower tier systems, to preserve the multi-tier concept relied upon for
low leakage.

Boost-phase systems, such as Airborne Laser, are useful for theater wide thinning of the
TBM threat, and represent the only active defense solution cigainst advanced submunitions.
However, a solution to the advanced submunitions problem will most likely involve a
combination of active defense, passive defense, and attack operations.

As described above, the Capstone COEA analysis quantified the perfonnance capability
for different mixes of TMD systems. It emphasized the need for multi-tier land- and sea-based
architectures and the desire for a boost phase system against possible advanced submunition
threats. Phase II of the COEA is investigating the optimal mix of missile quantities, cost and
performance trades for upper tier systems, and the effects of integrating all other activities
impacting the TMD architecture (i.e., BMC31, cruise missile defense).

The Phase II analysis of inventory balancing is focusing on refining the number of
missiles required. The current TMD program plan is to procure 1200 PAC-3 missiles, 1500
Navy Area Defense missiles, 1319 THAAD missiles and 650 Navy Theater Wide missiles. Cost
of the systems comprising the different alternatives considered in the Phase I COEA are shown
on the attached cost summary chart.

441

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442

Mr. ISTOOK. Thank you, Mr. Chairman.

NATIONAL INTELLIGENCE ESTIMATE

Mr. Young. General, I reahze that we are in open session at the
present time, but we are touching on the most recent National In-
telligence Estimate on the ballistic missile threat. Tell us to the ex-
tent that you can in an open session, your opinion of that estimate.
I know that there are some former Directors of Central Intel-
ligence— DCI's, Mr. Woolsey for one has been critical of that esti-
mate. Comment, if you would, on how you react to that estimate.

And secondly, I would like to hear your thoughts on specifically
the North Koreans' programs relative to the medium- and long-
range missiles. No Dong missiles. How you see their progression
which adds to our threat as they get better with their missiles.

General O'Neill. I would be happy to.

The NIE I think is an excellent document, but I think it lacks
a little scientific credibility because of the fact that as a scientist —
as least I was trained as a scientist — it is very difficult to give sin-
gle number answers to questions that have a basic uncertainty to
them. And I think the suggestion that came out, and unfortunately,
you can't read — if you read the whole document, you would feel
much better about the credibility of it. But the statement that
there will be no threat to the contiguous 48 for 15 years, strikes
me as unscientific, because there has to be an uncertainty. I can't
even measure the width of this table that accurately.

I can't tell you that accurately that THAAD will be fielded in ex-
actly "X" years because THAAD may have problems in the testing
and slip. So what I was expecting to get, and I am the one who
asked for the NIE, if you recall, in January of 1995, I expected the
NIE to say 15 years, plus or minus something, so that I would be
able to tell my management that most likely it is 15 years. Most
likely we don't have to worry.

However, there is North Korea, there is Iran, there is leakage of
space launch vehicle technology that could cause it to be as early,
as, you know, something else. The thing that made me feel a lot
better was the fact, as I mentioned earlier, that Dr. Kaminski en-
dorsed a program that could deliver a capability in 6 years, not 15
years.

So if Dr. Kaminski himself agreed to a program that we call
three plus three, that could respond 9 years earlier than the more
conservative intelligence estimate says. So I feel a lot more com-
fortable about the impact of the NIE than the actual unclassified
description that has come out of it. I think there is more to it.

One of the areas where you have to look at the uncertainty is in
the case of North Korea, which you mentioned in the second part
of your question. The North Koreans have more ballistic missile of-
fensive technology and development programs going today than the
United States of America. They have a bigger program than we
have.

They are simultaneously in development of three missile sys-
tems, ballistic missile systems. One of those systems clearly has a
range that will either put it in the middle of the Pacific if they
want to shoot at whales, or would put it very close if not on top
of American territory.

443

Mr. Young. Meaning Alaska and Hawaii?

General O'Neill. Yes, sir. So when I was asked by Senator Ste-
vens and Senator Inouye, what kind of a threat would I consider
the Taepo Dong 2, which is that system that is in development, I
said I would consider that a strategic threat. The North Koreans
are not talking about tactical theater warfare and they are not
talking about hitting South Korea. South Korea is 10 feet away.
The only target that is 6,000 or more kilometers away from North
Korea which comes to my mind as being potentially a worry to
them is the United States of America.

So I see this Taepo Dong 2 and I see its maturation as a singular
focus that we should be looking at for the future of missile defense.
I said that to Mr. Stevens, and I said, if I were you, sir, I would
worry about the funding and the support of the three plus three
program more than any other part of my ballistic missile defense
program, including theater missile defense. I don't know what he
is going to do, but I said that.

Mr. Young. Thank you. General.

Are there other questions from other Members?

Mr. Skeen. I have some for the record.

Mr. Young. I have additional questions I would like to submit
in writing and ask you to respond for the record.

Thank you for your many years of devotion to our Nation's secu-
rity. We wish you well in your retirement. Stop by and see us on
occasion.

The Committee will meet again tomorrow morning at 10:00 in
closed session to take up tactical intelligence, and tomorrow after-
noon we will take up National Reconnaissance Office, NRO intel-
ligence.

If there is nothing further. General, thank you very much, and
thank you for bringing all the technology.

The Committee will be adjourned until 10 o'clock tomorrow.

[Clerk's note. — Questions submitted by Mr. Skeen and the an-
swers thereto follow:]

High Energy Laser Systems Test Facility

Question. General, would you comment for the record on your agency's position
on the importance and necessity of the High Energy Laser Systems Test Facility
and provide a listing of projects and proposed projects in the BMDO budget that
would utilize the HELSTF facility in future years? How important is maintaining
the HELSTF laser technology to the Defense Department?

Answer. The High Energy Laser Systems Test Facility (HELSTF) is very impor-
tant to the Defense Department. While the facility is named HELSTF for historicail
reasons, its utility extends beyond laser testing to general sensor and tracking/imag-
ing technology development.

The Ballistic Missile Defense Organization (BMDO) uses the Sea Lite Beam Di-
rector (SLBD) portion of the HELSTF to collect high resolution mid-range infrared
image data during most BMDO-related missile firings conducted at White Sands
Missile Range (WSMR). These data have been very valuable in the development of
those BMDO systems being tested at WSMR. BMDO programs that have used and
will continue to use, the SLBD for data collection purposes include THAAD, PAC
111, Navy Area Defense (Blk IVA), Meirine Corps Hawk, and various target develop-
ment tests.

The Advanced Sensor Technology Program will be conducting a series of experi-
ments and demonstrations at the HELSTF during fiscal years 1996 through 1999.
These include a CO2 polarization experiment, a CO2 Ladar experiment, a passive
sensor test, and a sensor data fusion experiment.

There will be a continuing requirement to accomplish lethality testing using the
HELSTF facility. HELSTF is the only faciUty currently capable of performing test-

444

ing at megawatt-levels. However, at the current directed energy funding levels,
there are no near-term plans to do laser lethality testing.

Nautilus/Tactical High Energy Laser

Question. General, I know you are aware of the joint U.S. -Israeli Nautilus/THEL
(Tactical High Energy Laser) program. Would you comment for the record on the
importance, necessity and benefits of this program?

Answer. The Department of Defense has committed to work with the IsraeU Min-
istry of Defense to structure an advanced concept technology demonstration (ACTD)
to evaluate the effectiveness of a Tactical High Energy Laser (THEL) in negating
the Katyusha rocket threat. The Secretary of Defense has stated that this is an ur-
gent matter for both governments and assigned it the utmost importance. Subject
to well understood operational and environmental constraints, this jointly funded
projected will be the first step in helping Israel defend against the unique threat
posed by Kat5aisha rockets.

Question. General, do you beUeve there are significant terrorist threats that can
be effectively addressed by the development of this program?

Answer. Deployed on Israel's northern border, tnis system could, subject to well
understood operational and environmental constraints, destroy Katy^isha rockets
launched against Israeli border settlements by pro-Iranian terrorists operating in
Lebanon.

ScoRPius Technology Program

Question. General, as you know, I am very interested in the MICROCOSM tech-
nology program known as Scorpius, which I understand has the potential to reduce
target vehicle and super-heavy launch costs. I understand that BMDO is interested
in this technology effort and has identified internal funds for this project. Would you
provide for the record your agency's comments on the technology potential of this
program and a status of BMDO actions to date on this program?

Answer. We have examined the Scorpius technology program in detail and believe
it does indeed have promise for developing the kind of low-cost launch technology
that could be appUcable to both inexpensive target systems that we need to test fu-
ture missile defense systems, as well as a heavy lift launch vehicle needed by the
Space Based Laser program. We are working with the Air Force and NASA to en-
sure maximum synergy between our respective launch technology efforts. We are at-
tempting to identify $1.5 million in fiscal year 1996 to develop a concept design for
a heavy lift launch vehicle and to continue Scorpius hardware development activi-
ties. We are working to ensure sharp traceability between the hardware develop-
ment work and our target and heavy lift requirements.

Question. General, if additional resources were provided above the budget request
for this program in fiscad year 1997, how much would be required to complete the
Scorpius testing program and what would the funds be used for?

Answer. To move the Scorpius program forward in fiscal year 1997 to achieve a
suborbital flight test of the SR-1 vehicle configuration by the end of Fiscal Year
1997 wiU require $7 million in additional funds. Of this amount, $3.5 million would
go to the vehicle contractor for development of the SR-1 vehicle, $1.5 million would
go to pay range costs at White Sands Missile Range and government manpower
costs, and $2.0 milUon would be used for program risk mitigation as well as tech-
nology development for the initial Scorpius orbital booster.

White Sands Missile Range

Question. General, I understand your agency is one of the major customers and
users of White Sands Missile Range. Do you support any infrastructure improve-
ments to the Range's instrumentation systems that would enhance your agency's
testing and evaluation projects and programs?

Answer. BMDO has made significant investments in instrumentation and facility
infrastructure at WSMR in order to enhance this agency's testing and evaluation
capabilities. BMDO has funded improvements to FPS-16 radars and provided recent
upgrades to the Sea Lite Beam Director, which is a highly precise sensor tracking
system located at the High Energy Laser Systems Test Facility (HELSTF). Also in
cooperation with the OSD Central Test and Evaluation Investment Program, we are
developing new optical systems. BMDO is supporting another OSD effort, being led
by WSMR, to develop a mobile Test Range Augmentation and Control System that
will enhance not only WSMR's capability, but also can be transported to remote test
sites to support BMDO testing. BMDO has developed and made available to WSMR
a major sensor fusion and enhanced tracking software package for incorporation into

445

the range instrumentation target acquisition and pointing system. In addition,
BMDO has provided over $80 miUion in facility infrastructure construction and up-
grades to enhance BMDO testing at WSMR. Most significant are the Ground Based
Free-Electron Laser facilities (now used as administrative and training facilities),
installations and upgrades at the HELSTF, various missile assembly and technical
support buildings, and target launch facilities in the northern extension and at Fort
Wingate along with their related instrumentation sites.

Hypersonic Sled Track

Question. General, I know you have a knowledge of and interest in the current
Hypersonic Test Track upgrade program for the current Air Force Sled Track at
Holloman Air Force Base. Do you support this project and believe it should be com-
pleted?

Answer. The Hj^ersonic Test Track upgrade program is of interest to BMDO. The
initial phase of the program provides some additional capability which we would
take advantage of in our test program. However, the capability upgrade proposed
is not of sufficient magnitude for us to fund the upgrade from our program re-
sources. Because our capability requirements exceed anything proposed or feasible
we are rel5dng on hypervelocity gas guns to achieve the velocities of interest.

Question. General, would your agency benefit from this upgrade? If so, describe
which BMDO programs and requirements would be met by the development of a
Hypersonic Test Track using MAGLEV technologies?

Answer. The BMDO lethality program has no defined requirement for the
MAGLEV capability at the HoUoman hypersonic test track. The existing facility can
currently project a full scale test article at a velocity of 2 Km/sec, and the proposed
upgrade will achieve velocities of 3 Km/sec. However, this capability would still be
inadequate to support all the lethality issues associated with full scale testing of
hypersonic intercept kinetic kill vehicles. Existing capabilities at Arnold Engineer-
ing Development Center's Range G achieve velocities exceeding 4 Km/sec, which is
adequate to represent intercepts and address BMDO lethality testing issues.

Remote Optical Beam Steering System

Question. General, I know you have been a supporter of the ROBS technology
testing and evaluation program. Would you provide for the record your comments
on the importance and benefits of this program?

Answer. The Remote Optical Beam Steering (ROBS) system is a unique concept
that has the potential, if fully developed, to provide valuable three dimensional opti-
cal tracking data in real-time. The data will otherwise only be obtainable through
post-flight processing from multiple existing instruments. The technology developed
through this program could also lead to improve, highly mobile instrumentation sys-
tems capable of providing valuable test support when testing at remote locations
where existing instrumentation is lacking.

Question. What is the current funding and program status of the ROB program?

Answer. The fiscal year 1996 budget reductions necessitated discontinuing the
funding for the development of the Remote Optical Beam Steering (ROBS) system.
The instrument, however, will be retained at WSMR, remain intact and be available
for future development and to support BMDO and DoD programs.

Ballistic Missile Defense Organization Policy

Question. General I have a policy question: In your opinion, is stopping weapons
of mass destruction still the primary goal of BMD?

Answer. Stopping ballistic missiles armed with weapons of mass destruction
(WMD) continues to be the primary goal of the BMDO. Defeating missiles equipped
with nuclear, biological or chemical warheads is emphasized because of the destruc-
tive capabilities of these weapons relative to conventional, high explosive warheads.
However, while we consider defeating WMD as our top priority, we are also vitally
concerned with defeating the latter type of weapons as well.

Boost Phase Intercept

Question. Is a boost phase intercept the best form of active defense for stopping
weapons of mass destruction?

446

tion. For example, PAC-3 and Navy Area Defense are terminal defense systems
which have a multi-mission capability against both ballistic and cruise missiles.
However, they are relatively short ranged, and less effective against long range mis-
siles with high closing velocities. The THAAD and Navy Theater Wide systems
greatly expand the warfighter's engagement battlespace, allow multiple shot oppor-
tunities and significantly increase our capabiUty to defeat faster and longer ballistic
missiles. The Boost Phase Intercept (BPl) concepts offer further expansion of the
battlespace, more shot opportunities, added capabihty against longer ranged mis-
siles, and the prospect of causing collateral damage to occur over the aggressor's
own territory. BPI has a high payoff as a BMD mission area, but concepts to per-
form high performance BPI in the TMD and NMD arenas are generally less matvu-e
and therefore somewhat higher risk than terminal defense systems.

The BMDO has adopted a prudent acquisition and development strategy that bal-
ances warfighter needs, system capabilities, and technological maturity against the
threat. Adjustments to the strategy can be made if warranted by circumstances.

Space Based Laser

Question. Will the Space Based Laser have the range to intercept any missile
early in boost and cause the warhead to land on the enemy's own territory?

Answer. The baseline operational Space Based Laser (SBL) system concept can
intercept and negate missiles with ranges greater than about 150 km during their
boost phase. SBL platforms intercept missiles after they have risen above the dens-
est part of the atmosphere (an altitude of about 10 km or 35,000 ft). Missiles with
ranges greater than about 300 km are most susceptible to boost phase interception
due to their longer bum times and higher bvirn out altitudes. The warheads and
debris from these missiles wiU fall short, potentially within the territory of the ag-
gressor. Shorter range missiles will be closer to their burn out velocities at the time
they are intercepted by the SBL platform. Although they will not reach their in-
tended targets, the post-engagement debris may fall beyond the border of the

Question. Does BMDO have any plans to demonstrate SBL lethality at HELSTF?

Answer. Yes, although there is currently no funding in the BMDO Lethality Pro-
gram for laser lethality testing. Lethality is an issue that is continually open, since
the threat may change at any time. We anticipate that there will be a requirement
to perform SBL (or any high energy laser) lethality testing at some time in the fu-
ture, e.g., on a new material for manufacturing balUstic missUes, on a newly-de-
signed missile, at a new laser wavelength, or at new laser brightness levels. The
High Energy Laser Systems Test Facility (HELSTF) is the only faciUty currently ca-
pable of performing testing at megawatt-level.

Lethahty data/criteria are very important for ensuring that a weapon system is
neither over-designed nor under-designed. Lethahty effects are highly non-hnear,
and extrapolating estimates of lethahty from small scale experiments (e.g., low/mod-
erate power lasers focused into small spots to produce a local high-intensity effect)
produces uncertain results.

[Clerk's note. — End of questions submitted by Mr. Skeen. Ques-
tions submitted by Mr. Young and the answers thereto follow:]

Missile Threat Summary

Question. Can you give the Committee a brief summary of the current threat
posed by short and medium range missUes? How and where are U.S. forces and in-
terests threatened?

Answer. .

Question. What threat does North Korea pose at this time? Please explain its mis-
sile development programs. Which missiles are of concern to our forces stationed in
South Korea?

Answer. .

Question. General Luck, the Commander of the U.S. forces in Korea, told us the
other day that he was worried about the potential for conflict between North and
South Korea. Furthermore, in his statement he said:

"Theater missile defense is a * * * key area we must improve our capability.
DPRK (North Korean) missiles threaten all our major ports, air bases, ROK and
U.S. forces, and the population at large. This threat continues to increase as North
Korea pursues deployment of more SCUDs and investment in its more advanced No
Dong missiles."

He went on to say.

447

"We have a battalion of Patriot missiles * * * However, even after upgrading to
the PAC-3 configuration, these missiles cannot cover all our critical locations. De-
plojTnent of an upper tier system is essential."

He concluded by saying that despite budget decisions, he still had an urgent re-
quirement for two Theater High Altitude Area Defense (THAAD) batteries (18
launchers). Do you agree with General Luck's concerns?

Answer. Yes, the requirement for missile defenses in South Korea is immediate
and critical. Based on the threat, the systems available in the near term, and the
funding available for missile defense, the Department decided to stress the fielding
of PAC-3 and Navy Area Defense which address the immediate threat of shorter
range missUes. The plan described in the FY 1997 President's Budget submission re-
flects this philosophy.

Although we have slowed the THAAD program, we sire stiU proceeding at a pru-
dent pace to add wide area defenses and defenses against the longer range theater
missiles as that threat emerges. In spite of slowing THAAD, we retained a User
Operational Evaluation System (UOES) which will provide an earlier upper tier ca-
pability for use in contingencies. While the primary purpose of the THAAD UOES
is for early user involvement in desigri and testing and is not intended to be a
fieldable system, it could be made available for contingency use. We anticipate an
initial THAAD UOES capability by the end of FY1998.

Question. General, if the Congress were to provide additional funding for THAAD,
how quickly could we meet General Luck's requirement? What kind of capability
would he have?

Answer. The current THAAD program was restructured in terms of technical con-
tent and schedvde, as a result of the $2.1 billion reduction in Futtu"e Years Defense
Plan (FYDP) funding. The restructured program sUpped from a First Unit Equipped
(FUE) in Fiscal Year 2002 to a FUE in Fiscal Year 2006. However, the program,
as currently structiu-ed, is executable. Current funding levels will provide a FUE
2nd Quarter Fiscal Year 2006, or 7.5 years after the initial UOES capabiUty is
achieved in 4th Quarter Fiscal Year 1998. No amount of additional resources could
be used to accelerate the FUE date earlier than Fiscal Year 2002. However, BMDO
has investigated options for accelerating THAAD to provide a capability earlier than
2006. The following options present program profiles which could provide a THAAD
FUE in either 2002 or 2004.

A program that delivers in Fiscal Year 2002 would require an additional $223 mil-
Uon in Fiscal Year 1997 and roughly an additional $878 million from Fiscal Year
1998-2001 for a total of $1.1 biUion over the FYDP (97-01). This approach would
also require an additional $243 miUion in Fiscal Year 2002 and $166 million in Fis-
cal Year 2003. The following profile would provide a FUE in Fiscal Year 2002.

[In millions of dollars]

Fiscal Year:

Amount

1997 $705

1998 740

1999 772

2000 801

2001 732

Total (billion) $1.5

Question. Please tell us about the capability of North Korea's Taepo Dong 2 mis-
sile? What is its range? Can it threaten U.S. territory?

Answer. .

Question. We also heard from the Commander in Chief, Pacific (CINCPAC), Admi-
ral Prueher. He told the Committee that wide area theater missile defense systems
were an important priority to the warfighters. What kind of capabUity would Admi-
ral Prueher have if he had either Navy Lower Tier or Navy Upper Tier available
to him in the Pacific? Would it be important in a scenario like the current situation
in the Taiwan Straits?

Answer. The Navy Area Defense (formerly Lower Tier) system is designed to de-
fend against short to medium range theater ballistic missiles in the lower endo-at-
mosphere. The Navy Theater Wide (formerly Upper Tier) system is designed to de-
fend against medium to long range theater ballistic missiles in the exo-atmosphere.
If the national command authorities directed, Naval ships, employing systems as en-
visioned in either the Navy Area or Theater-Wide Defense programs, could defend
Taiwan against TBMs. In such a scenario, Theater Wide equipped ships, engaging
the CSS-6 missile, could protect the entire island of Taiwan, whUe Navy Area
equipped ships could provide defense of coastal areas.

448

However, in other scenarios where the enemy moved missiles away from coastal
areas, Navy Theater Wide and Navy Area would not be as effective.

Question. General Peay, Commander in Chief of Central Commander, also spoke
to us last week and emphasized the need for theater missile defense. He particularly
stressed the need for a "multilayered" missile defense that wovild handle "lower and
upper tier requirements on land and sea." Can you discuss the importance of a mul-
tilayer and multiservice missile defense system? Isn't it better to have several op-
tions during a crisis rather than relying simply upon one or another system? For
instance, could THAAD and Navy Upper Tier systems be used in a complementary
way?

Answer. The importance of a multilayered and multiservice missile defense sys-
tem is the benefit of combining each individual system's capabilities, increasing the
complete defense against any theater ballistic missile. There is no single "best" form
of active defense for stopping missiles armed with weapons of mass destruction.
Each system adds additional protection capability which enhances the performance
of all the other systems. For example, PAC-3 and Navy Area Defense are terminal
defense systems which have a miilti-mission capability against both ballistic and
cruise missiles. They are however relatively short ranged, and less effective against
long range missiles with high closing velocities. The THAAD and Navy Theater
Wide systems greatly expand the warfighter's engagement battlespace, allow mul-
tiple shot opportunities and significantly increase ovu* capability to defeat faster and
longer range ballistic missiles. Consider the following scenario involving THAAD
and Navy Theater Wide used in a complimentary fashion. An event is detected —
the Navy deploys to the key area to provide immediate upper and lower tier defense:
the Army mobilizes, deploys and protects the critical areas; and the Navy widens
its original coverage to protect larger regions.

Question. General O'Neill, even though we are in open session, can you discuss
the findings of the recent National InteUigence Estimate (NIE) on the ballistic mis-
sile threat? Many, including the former DCI, Jim Woolsey, have been critical of its
conclusions. Can you give us your assessment?

Answer. .

Funding Overview

Question. General O'Neill, the President's Budget for fiscal year 1997 provides
$2.8 bilUon for ballistic missile defense. This is approximately $600 million less than
appropriated by Congress in fiscal year 1996. Can you please describe the difference
between the budget which the President has proposed for this year and the program
as passed by the Congress last year? Is there a difference in philosophy?

Answer. "The attached chart outUnes the differences between the budget which the
President has proposed for this year and the program as passed by the Congress
last year.

Both budgets support deployment of lower tier missile defense systems as soon
as possible, and continuing development of more capable theater missile defense
(TMD) systems, which will be deployed in time to meet the evolving theater ballistic
missile threat. Differences in the TMD budgets reflect program reahties and the
need to balance TMD with other defense priorities.

Based on the threat, the systems available in the near term, and the funding
available for missile defense, the Department decided to stress the fielding of PAC-
3 and Navy Area Defense. Both of these lower tier systems principally address the
immediate threat of shorter range missiles. These will be fielded first and the upper
tier will be fielded subsequently. Consequently, the funding for Theater High Alti-
tude Area Defense (THAAD), an upper tier system, is less and the development pace
slower in the current budget proposal.

The Program Review determined that the correct posture for Navy Theater Wide
Defense (formerly Upper Tier) is to conduct a technology demonstration, leveraging
maturing technologies and complete a concept definition study to confirm inter-
ceptor configuration. While starting out at a slower pace, the Department added
about $600 million through the Future Years Defense Plan (FYDP) to ramp up to
a significant annual investment in the program.

449

The Program Review directed the National Missile Defense (NMD) program away
from a technology focus to a "deployment readiness" focus. In making this shift, the
Department reallocated its resources to increase the 1997 NMD funding request by
$100 million over previous plans. This and other adjustments to the POM were
deemed appropriate and necessary to effectively use the funds provided by Congress
in 1996 as a springboard for the development, the first three-year period of olur
"3+3" strategy, of an NMD system which could be deployed with an IOC in 2003
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451

Question. Is it fair to say that the Administration's request does not meet the
Congressional guidance of last year insofar as this year's budget delays the deploy-
ment of several key missile defense systems?

Answer. The Congressional guidance of last year cannot be implemented. The the-
ater missile defense (TMD) component of the ballistic missile defense program can-
not meet the dates specified in Section 234 of PubUc Law 104-106. PAC-3 and Navv
Area Defense are proceeding as quickly as the acquisition process will allow, with
PAC-3 Initial Operational Capabihty (IOC) and Navy Area Defense User Oper-
ational Evaluation System (UOES) estimated for fiscal years 1999 and 2000, respec-
tively. Because of fact-of-life technical difficulties and schedule risks, the dates spec-
ified in public law are not achievable for these two programs.

With the respect to upper tier programs, the fiscal year 1996 Defense Authoriza-
tion Act called for the Department to establish a fiscal year 2000 First Unit
Equipped (FUE) for THAAD. This date is no longer technically feasible. Similarly,
the Department estimates that for Navy Theater Wide, a UOES deployment date
of fiscal year 1999 and FUE of 2001 cannot be achieved.

With regard to NMD, no deplojrment dates were specified in Congressional guid-
ance.

Question. The missile defense review that the Pentagon undertook was ostensibly
intended to rationalize the ballistic missile defense program. General O'Neill, I un-
derstand that you did not participate in the review. Unfortunately, I have to say,
I beUeve the outcome of the review demonstrates how foolish the decision to exclude
you was. It appears that rather than strengthen the missile defense program, the
Administration has weakened it. In fact, it seems clear that much of their effort was
focused upon simply finding budget savings. Is this the case?

Answer. The BMD Program Review was led by the Director, Strategic and Tac-
ticEil Systems, at the direction of the USD(A&T). The review involved all the major
DoD staff agencies, the Services, and the Joint Staff. The BMDO was among the
participants in the review. I think the greatest difficulty facing the reviewers was
attempting to craft a robust BMD program within fiscal guidance. Department
budget constraints and JROC guidance to keep BMD in balance with other priorities
resiilted in a program that is less robust than I would Uke to have seen.

Question. In your opinion, would additional resources be required to administer
the program that was detailed in the Defense Authorization legislation last year?

Answer. None of the Department's TMD programs can meet the dates specified
in the Authorization Act. National Missile Defense could meet Initial Operational
Capabihty (IOC)— in 2003, if the threat warrants.

Question. How much additional funding would be required, in this year and subse-

Suent years, to meet the Congressionally mandated dates for operational capabihty?
rive us examples, by program.

Answer. Theater Missile Defense (TMD). The TMD component of the ballistic mis-
sile defense program cannot meet the dates specified in Section 234 of Public Law
104-106. PAC-3 and Navy Area Defense are proceeding as quickly as the acquisi-
tion process will allow, with PAC-3 Initial Operational Capabihty (IOC) and Navy
Area Defense User Operational Evaluation System (UOES) estimated for fiscal
years 1999 and 2000, respectively. Because of fact-of-life technical difficulties and
schedule risks, the dates specified in pubUc law are not achievable for these two pro-
grams.

With respect to upper tier programs, the fiscal year 1996 Defense Authorization
Act called for the Department to estabUsh a fiscal year 2000 First Unit Equipped
(FUE) for THAAD. This date is no longer technically feasible. Similarly, the Depart-
ment estimates that for Navy Theater Wide, a UOES deployment date of fiscal year
1999 and FUE of 2001 cannot be achieved.

National Missile Defense (NMD). The BMD Program Review increased outyear
funding for the NMD Deployment Readiness program by $100 million in each of fis-
cal year 1997 and 1998. The Department is committed to the development phase
of the 3 plus 3 program, essentially the first three years, and this initial increase
in resources helps develop the NMD systems and technologies.

The original version of the fiscal year 1996 Defense Authorization Bill, which was
vetoed, contained guidance to deploy an NMD system by 2003. The funding level
authorized to accompany that program was $720 million. The fiscal year 1996 Na-
tional Defense Authorization Act did not contain any specific NMD deployment
guidance, but retained the funding level at $720 million.

While the Department's 3 plus 3 program requests $508 miUion for fiscal year
1997, and projects a similar amount in 1998, additional resources could be used to
ensure that we proceed with the program in a manner that minimizes technical and
schedule risks. An additional $350 milhon in fiscal year 1997, followed by similar
amounts in fiscal years 1998 and 1999, would achieve a lower-risk 3 plus 3 program.

452

This investment would prepare us well to deploy an NMD system in the year 2003,
if a decision was made to do so. The increase in funding would reduce program and
schedule risks by enhancing efforts in five fundamental areas.

[In millions of dollars]

Accelerated New Booster for integrated system test in 1999 $100

Additional Hardware to EUminate Single Point Failures 50

Increased Hardware Testing 120

Continued Competitive Developments 40

Increased Deployment Planning/Preparations 40

Total 350

These activities would specifically include the following:

• Accelerate development of a new booster to support an integrated system test
in 1999. The 3 plus 3 program has deferred the development of the booster, which
would launch the Exoatmospheric Kill Vehicle (EKV), until late fiscal year 1998.
Based on this start date, the booster would be available to support a 2003 IOC, but
would not be available for use in an integrated system test until after 2000. The
additional funding would allow this activity to be accelerated and started in fiscal
year 1997.

• Procure additional hardware to eliminate single point failure modes. Because of
fiinding limitations, in many cases only a single piece of hardwEu^e or a single target
has been planned for purchase. If this hardware fails, test activities may be delayed
while necessary repairs are done. In some of the more serious cases this might delay
the program by many months. The additional funds would allow us to purchase
backup targets and target launch vehicles and establish a prudent "spare parts" ef-
fort in our flight test program.

• DeplojTnent planning and preparation activities. The 3 plus 3 strategy requires
that the system developed during the first three years be deployable within 3 years
of a deployment decision. To make this possible it is necessary to accompUsh much
of the deployment planning before the actual deployment decision is made. Because
they require substantial lead-times, activities such as environmental impact assess-
ments and site design for potential deployment sites must actually be completed be-
fore the decision is made. Development contracts must be modified to incorporate
the necessary production planning and preparation activities and to prepare inte-
grated logistics support necessary to accomplish fielding the system.

U.S. Air Force Space & Missile Tracking System. Lastly, in addition to the Bal-
listic Missile Defense Organization (BMDO) budget, I would recommend an increase
to the authorization and appropriation of $134 million for the U.S. Air Force's Space
& Missile Tracking System (SMTS). This increase in resources would allow the De-
partment to perform a fiiU and open competition for the pre-EMD activity. Such a
competition would provide a strong, viable competitor to the current prime con-
tractor to lower system costs while meeting the accelerated schedule. These funds
would also accelerate the technology development necessary to support a first
launch of the Block 1 SMTS in fiscal year 2002.

Additional TMD Program Investment. While not directly tied to the acceleration
of the key TMD systems, as outlined in last year's Authorization Act, the Joint TMD
program element is a critical support area which enhances our ability to deliver
these systems to the field. This program element represents tasks that are vital to
the execution of joint BMD programs. These activities have been grouped together
because they provide direct support across BMD acquisition programs which could
not be executed without this support. As in the case for Targets and Test Range
Support, TMD Technology Risk Reduction Activities, and Modeling and Simulation

453

efforts, increases to the Joint TMD account would reduce risks and sustain the mo-
mentum of the TMD acquisition programs. Therefore, I would recommend an in-
crease of $75 million for Joint TMD and the following allocations:

[In millions of dollars]

Targets and Test Range Support $29

TMD Technology Risk Reduction Activities 22

Modeling and Simulations Activities 10

EAGLE Program 5

BMC3 5

User/CinC Interface 4

Total 75

Advanced Technologies. Funding for BMD advanced technology programs are only
supported through the BMDO's budget. Over the past several years, BMDO's tech-
nology program has been reduced from a level of $1.8 billion in fiscal year 1987 to
this year's request of $226 million. The advanced technology program mnds critical
component technolo^ efforts that support both futxire NMD and TMD systems, and
pursue advanced technology approaches to countering evolving missile threats and
potential countermeasures to our defensive systems.

The fiscal year 1996 Defense Authorization Bills were essentially silent on ad-
vanced technology programs, with the exception of the Space-based Chemical Laser
program. Nonetheless, given the importance of maintaining our technology base, I
would recommend additional resources for this critical area of the BMD program.
Therefore, if an additional $158 miUion was available for advanced technology pro-
grams. I would allocate: $71 million to maintain the Directed Energy (space-based
chemical laser) program focused on developing and integrating critical system tech-
nologies to support ground-tests of flight qualifiable system hardware; $25 million
for the Atmospheric Interceptor Technology (AIT) program to support next genera-
tion kinetic energy kill vehicle development as a potential upgrade to upper tier
TMD systems; and $62 million to sustain critical BMD technologies and maintain
a steady investment in our Government and industrial BMD technology infrastruc-
ture. Within this last category, I would recommend the following allocations:

[In millions of dollars]

Advanced Radar Transmit/Receive (T/R) Modules for GBRs $10

Advanced Interceptor Satellite Communications 10

Advanced Image Processing 10

Sensor Data Fusion 7

Advanced Propulsion Systems & PropeUants 15

Radar Power and Conditioning Technology 10

Total 62

These combined investments in BMD Advanced Technology would be responsive
to Congressional direction with regard to the space-based laser program and would
represent a revitalization of the third — and currentlv weakest— leg of the "three
legged BMD stool" of TMD, NMD and Technology. If the Congress elects to increase
fiinds for the Advanced Technology program in fiscal year 1997, I would recommend
that the program be sustained at least at these levels in the outyears. Such an effort
would allow BMDO to use its technology program to credibly pursue pre-planned
product improvements and advanced capabUity efforts for both NMD and TMD sys-
tems and technologies.

SUMMARY

Total Recommended FY97 Increase: $935 million for BMD programs

BMD Program Breakout

Theater Missile Defense: +$427 million increase

— THAAD: $110 million (PE 060386 IC DemA^'al)

—Navy Theater Wide: $242 million (PE 0603868C DenvVal)

^Joint TMD Program Element: $75 miUion (PE 0603872C DemA^al)
National Missile Defense: +$350 mUlion increase

—3 plus 3 NMD program: $350 million (PE 060387 IC NMD DemA^al)
Advanced Technology: +$158 million increase (PE 0603 173C SPT Tech ATD)

— Directed Energy: $71 million

— ^Atmospheric Interceptor Technology: $25 million

—Critical BMD Tech Base: $62 million

454

In addition to these BMDO budget recommendations, I would recommend an in-
crease of $137 million to the U.S. Air Force budget for the Space & Missile Tracking
System (SMTS). Last year Congress authorized and appropriated an additional $135
million for acceleration of the SMTS program.

Patriot Advanced Capability (PAC-3)

Question. Please describe the funding levels and schedules for each of the "core"
theater defense systems in contrast to the program Congress envisioned. Please tell
us, how much has been budgeted for each program? When are these systems sched-
uled to reach initial and fiill operational capability, etc.?

The Patriot Advanced Capability 3 or PAC-3, which uses hit-to-kill interceptors,
is designed to be highly lethal against theater ballistic missiles — including weapons
of mass destruction. The fiscal year 1997 request for PAC-3 is $597 miUion. This
is $70 million less than the fiscal 1996 appropriated level. General O'Neill, while
the budget adds funds in the out years for PAC-3, is it fair to say that not much
was added in the near term?

Answer. The fiscal year 1997 budget for the PATRIOT program is commensurate
with a lower risk, more deliberate approach to fielding the PAC-3 system. The most
difficult and time consuming near term task is integrating the PAC-3 missile sub-
systems and softwear for the first flight test missiles. The restructured program will
reduce schedule concurrency of engineering and test activities required to develop
the PAC-3 system. These concurrent activities were reduced in fiscal year 1997 to
ensure completion of the missile integration phase of the program. This approach
focuses critical resources on ensuring high quality first flight test missUes, thus
minimizing the cost of potential design refinements that could delay the anticipated
fielding of the system.

Question. Does the increase in funding in the out years mean that we wiU have
an earlier deployment date?

Answer. No, the increased funding in the out years will compensate for the more
deliberate development strategy in the next term. This approach will minimize pro-
gram execution risk by extending the EMD phase of the program by ten months.
Also, system performance will be improved by rephasing the missile and radar pro-
curements; upgrading four launchers per battery with Enhanced Launcher Elec-
tronics Systems; and extending the battery's remote launch capability.

Question. When will we have an initial operational capabiUty (IOC)? Full oper-
ational capability (FOO?

Answer. IOC for a Battalion with PAC-3 missiles is planned for fiscal year 2001.
FOC is planned for fiscal year 2005.

Question. How many missiles will be procured, and when?

Answer. A total procurement of 1200 PAC-3 missiles is planned, with initial pro-
curement in fiscal year 1998. The planned procurement schedule is as follows:

Fiscal year:

Missiles

1998 60

1999 75

2000 190

2001 210

2002 220

2003 225

Total 1,200

Question. Does this fuUy comply with Congressional direction?

Answer. The PAC-3 program will not meet the First Unit Equipped date specified
in the Fiscal Year 1996 National Defense Authorization Act for the "core" TMD pro-
grams due to programmatic changes. The PAC-3 schedule is driven by the time re-
quired to systematically integrate missile subsystems, verify performance, conduct
flight tests, and perform post flight analysis. Historically, extensive time is required
to resolve assembly and processing issues encountered during the first flight test of
a new missile design. Due to the serial nature of assembly, integration, and analysis
of the first missile, there is little opportunity for schedule acceleration in this phase
of the program. Acceleration could only be accomplished through concurrent flight
test activities which would greatly increase programmatic risk due to premature
fabrication of multiple missiles. Tlus in turn would increase the likelihood of associ-
ated overruns when problems inherent in assembly of the first flight test articles
are identified.

455

Question. Is it accurate to say that you have increased money in the long term
but that this will not result in an accelerated deployment date?

Answer. Yes, that is an accurate statement. However, by restructuring the pro-
gram, we believe we have greatly reduced both the overall cost of the system devel-
opment and reduced potential delays that are typically encountered when resolving
technical problems that are inherent in this phase of missile development and flight
testing. The restructured program will increase the probability of deploying the
PAC-3 system as early as possible. Additionally, increasing out year funding will
minimize the schedule impact of this lower risk program.

Theater High Altitude Area Defense (THAAD)

Question. THAAD is a missile defense system that will give our forces signifi-
cantly greater protection than PAC-3; and, it will have the capability to protect
large population centers and ports as well. It will be effective against the full spec-
trum of theater-class missiles and will provide what is known as a "shoot-look-
shoot" capability.

The CINCs have all told us what a high priority theater-wide area missile defense
is. Do you agree with them on the value and importance of this system?

Answer. Yes, the requirement for missile defenses is immediate and critical.
Based on an examination of the nature of the threat, the systems that could be
made available in the near term, and the funding available for missile defense, we
decided to stress the fielding of PATRIOT and Navy Area Defense as quickly as pos-
sible. Both of these lower tier systems principally address the immediate threat of
shorter range missiles. These will be fielded first and the upper tier will be fielded
subsequently. We are developing a User Operational Evaluation System (UOES)
which will provide an earlier upper tier capability for use in contingencies. The pri-
mary purpose of the THAAD UOES is for early user involvement in design and test-
ing of the THAAD system and is not intended to be a fieldable system. Again, it
would only be made available for contingency use should a national security war-
rant. We anticipate an initial THAAD UOES capability by the end of fiscal year
1998.

Question. The Administration's request for THAAD this year is $482 million. This
is approximately $100 miUion less than the 1996 appropriated level, and about $260
million less than planned a year ago. Given the value of this system to the CINCs
and its strong bipartisan support in Congress, it would seem that the budget should
have stayed intact. Can you please tell the Committee why the Administration chose
to reduce funding for one of our most promising theater missile systems?

Answer. Based on the threat, the systems available in the near term, and the
funding available for missile defense, the Department decided to stress the fielding
of PAC-3 and Navy Area Defense. Both of these lower tier systems principally ad-
dress the immediate threat of shorter range missiles. These will be fielded first and
the upper tier will be fielded subsequently.

Question. I understand that this program will have a gap of several years between
the time we have a prototype system ("User Operational Evaluation System") field-
ed and when we will have the First Units Equipped (FUE). What is the reason for
this? Are there specific technical challenges or hurdles that need to be met? Are you
saying that we cannot deploy THAAD faster because of technical difficulties?

Answer. No, the cvurent THAAD program has not been restructured because of
technical difficulties. The THAAD program was restructiu-ed in terms of technical
content and schedule, as a result of the $2.1 bilhon reduction in FYDP fiinding.
However, THAAD is proceeding that at a prudent pace to add wide area defenses
and defenses against the longer range theater missiles as that threat emerges. In
order to have an earUer upper tier capability for use in contingencies, we are devel-
oping a User Operational Evaluation System (UOES). The restructured program
slipped from an FUE in fiscal year 2002 to an FUE in fiscal year 2006. Current
funding levels will provide an FUE in 2nd quarter fiscal year 2006, or 7.5 years
after the initial UOES capability is achieved in 4th quarter fiscal year 1998.

THAAD could be deployed faster if additional resources were added to the pro-
gram in the out years. The following options present program profiles which could
provide a THAAD FUE in either 2002 or 2004.

A program that delivers an FUE in fiscal year 2002 would require an additional
$223 million in fiscal year 1997 and roughly an additional $878 million from fiscal
year 1998-2001 for a total of $1.1 billion over the FYDP (97-01). This approach
would also require an additional $243 million in fiscal year 2002 and $166 million
in fiscal year 2003. The following profile would provide an FUE in fiscal year 2002:

456

[In millions of dollars]

Fiscal year:

Amount

1997 $705

1998 740

1999 772

2000 801

2001 732

Total (in billions) 1.5

Question. How many missiles will be procured, and when?

Answer. A total of 1,273 missiles will be procured starting in fiscal year 1998,
1,233 for production and 40 for UOES:

fiscal year UOES LRIP fRP

1998 14

1999 26

2000

2001

2002 :

2003 36

2004 72

2005 150

2006 180

2007 180

2008 ; 180

2009 219

2010 216

Total 40 108 1,125

Question. Does this fuUy comply with Congressional guidance?

Answer. Current Congressional language requires UOES no later than fiscal year
1998 and FUE in fiscal year 2000. An FUE date in fiscal year 2000 was investigated
by the BMDO and deemed unexecutable. The dates in the fiscal year 1996 Defense
Authorization are not technically nor programmatically feasible and no amount of
additional resources could be used to accelerate the FUE date earlier than fiscal
year 2002.

Question. How much funding would be needed to get this program back on sched-
ule as required by law?

Answer. The FUE requirement specified in the fiscal year 1996 Defense Author-
ization Act is not achievable. The current schedule meets the UOES requirement.

Navy Lower Tier

Question. The Navy Lower Tier system upgrades the Navy's AEGIS Standard
Missile air defense system to enable it to shoot down tactical ballistic missiles. This
is similar to the Army's PAC-3 except that it is sea based and therefore may be
rapidly repositioned. 'The President's Budget request for Navy Lower Tier is $311
million. This is an increase of $11 miUion over the 1996 level. Can you please ex-
plain this increase? Are you planning to accelerate the program? Or, are these "fact-
of-Ufe" adjustments?

Answer. The Navy Area Theater Ballistic Missile Defense program (Navy Lower
Tier) will transition into Engineering and Manufactvuing Development (EMD) at the
end of fiscal year 1996. Funding appropriate for fiscal year 1996 totaled $299 mil-
lion and the funds requested for fiscal year 1997 in the President's Budget total
$311 million. The fiscal year 1997 total requirement includes a recent $6.5 million
increase following a review of target requirements and re-costing of targets through
the future years defense plan (FYDP). Other differences between fiscal year 1996
and fiscal year 1997 relate to the new phase of development the program is enter-
ing. The fiscal year 1997 efforts not performed in fiscal year 1996 include ordering
material for User Operational Effectiveness System missiles and AEGIS upgrades.
These differences contribute to the higher costs in fiscal year 1997.

Question. When will we have an initial operational capability (IOC)? Full oper-
ational capability (FOC)?

Answer. The Navy Area program will be placed into service incrementally. The
User Operator Evaluation System (UOES) computer program will be completed in
fiscal year 1998. The UOES missile will begin delivery in fiscal year 2000. The First

457

Unit Equipped (FUE) with the tactical versions of the AEGIS computer program
and missile will occur in fiscal year 2002, with four operational TBMD-configured
ships. UOES and FUE dates are cited because Navy uses IOC and FOC primarily
to describe logistics rather than operational capabihty.

Question. How many missiles will be procured, and when?

Answer. A total of 1,535 missiles will be deployed starting in fiscal year 2000,
1,500 for production and 35 for UOES:

Fiscal year

Missiles

UOES

Tactical

2000

2001 .

2002

101

2003 .

109

2004

176

2005 .

176

2006

176

2007 .

175

2008

175

2009 .

175

2010

175

Total

1,500

Question. Does this fully comply with Congressional guidance?

Answer. The profile above does not support the Congressional guidance regarding
achieving UOES or FUE. As a result of technical difficulties, several key milestones
for the Navy Area Theater Missile Defense (TMD) program have been delayed. The
Navy Area program is schedule-Umited, meaning that regardless of funding, mile-
stone achievement cannot be restored to earlier target dates because of the time re-
quired to complete technology issues. As a result of this schedule limitation, the ear-
liest the program could deliver would be a User Operational Evaluation System
(UOES) in 4th quarter fiscal year 1999, and First Unit Equipped (FUE) in the 2nd
quarter fiscal year 2001. For that reason, the Navy Area program cannot be deUv-
ered in accordance with the earUer dates specified in Congressional guidance.

Question. Like the Army's THAAD, Navy Upper Tier will have wide area, long
range coverage but it will also be able to be rapidly repositioned in a crisis. Since
it is sea-based, it will allow the U.S. to operate without the problem of host nation
constraints. In addition, Navy Upper Tier will be able to intercept a missile in its
ascent phase as well as its terminal phase. The Administration's 1997 request is $58
million for Navy Upper Tier. This is $142 million less than the 1996 appropriated
level. Can you please explain how Congressional requirements for fielding can be
met with this lower level of ftinding?

Answer. The UOES depIo)rment date of fiscal year 1999 and FUE date of fiscal
year 2001, as outUned in the Defense Authorization BUI, cannot be met. The Pro-
gram Review determined that the correct posture for this program is to conduct a
technology demonstration, leveraging maturing technologies and complete a concept
definition study to confirm interceptor configuration. While starting out at a slower
pace, the Department added about $600 million through the Future Years Defense
Plan (FYDP) to ramp us to a significant annual investment in the program.

Question. Will the Administration obligate all of the fiinds appropriated for fiscal
year 1996? If not, why?

Answer. Although $200 million has been authorized and appropriated for NTW
in fiscal year 1996, because of the substantially lesser amount budgeted in fiscal
year 1997, the Department directed the fiscal year 1996 funding be spent over fiscal
year 1996 and fiscal year 1997 to provide a more level funding of planned efforts.

Question. Does the budget treat Navy Upper Tier as a core program to be devel-
oped?

Answer. The Program Review directed that the Navy Theater Wide program re-
main in the concept exploration/advanced technical demonstration development
phase. The Navy Theater Wide program is not a "core" program.

Question. Is the Administration planning to ever deploy the Upper Tier system?

Answer. The Navy Theater Wide Program will conduct a technology demonstra-
tion, leveraging maturing technologies and complete a concept definition study to
confirm interceptor configuration. While starting out at a slower pace, the Depart-
ment added about $600 million through the Future Years Defense Plan (FYDP) to
ramp up to a significant annual investment in the program. This approach helps

458

the Department achieve a more balanced upper tier program and maintain competi-
tiveness in the development of material solutions for the Navy Theater Wide sys-
tem. In fiscal year 1998, a decision to select a Kinetic Kill Vehicle (KKV) is sched-
uled and in fiscal year 2000 a first flight demonstration is planned for the program.

Question. The Commander in Chief for Central Command, General Peay, empha-
sized the need for multilayered, multiservice theater missile defense systems. In
your opinion, is it militarily more effective to have combined Army and Navy upper
and lower tier defenses than to have just one lower tier and one upper tier system?
Please explain.

Answer. Combined Army and Navy upper and lower tier defenses are more mUi-
tarily effective than one lower and one upper system. The defense provided by a sin-
gle upper and lower tier system is significantly enhanced with the combination of
all four systems. Each system adds additional protection capability which enhances
the performance of all the other systems. PAC-3 provides localized protection. Navy
Area provides mobile localized protection, THAAD has the endo/exo-atmospheric tar-
geting, and Navy Theater Wide provides mobility plus the ascent phase intercept
mission.

Question. I understand the Administration's plan is to have a "shoot-off" between
systems. Is this the best option? Wouldn't it be better to have complementary sys-
tems?

Answer. The "shoot-off" between the Navy and Army upper tier systems has been
changed to a dissimilar competition. The competition will be based on an analysis
performed by a joint system engineering team which will evaluate available tech-
nologies, including LEAP, THAAD, and THAAD derivatives, to optimize the Navy
Theater Wide interceptor configuration. The study will concentrate on compUance
with Service requirements as well as commonaUty and other BMDO Family of Sys-
tems performance specifications.

Medium Extended Air Defense System (Meads)

Question. The Medium Extended Air Defense System (MEADS) would be a mo-
bile, missile defense system that would move with the forces in the field. The Ad-
ministration is requesting $56 million for this program. Additional funding for the
program would be provided by Germany, France and Italy. Can you please explain
this arrangement?

Answer. The Statement of Intent (SOI), signed by the four nations in February
1995, called for the cost and work share ratio to be 50% for the U.S., 20% for Ger-
many, 20% for France, and 10% for Italy. The total PD-V cost will be $124 million
over FYs 1996 through 1999 for the U.S. portion. The management of the program
will be conducted by the NATO MEADS Management Organization (NAMEADSMO)
within the framework of NATO. NAMEADSMO will consist of a Steering Committee
(SO and the NATO MEADS management agency (NAMEADSMA) responsible to
the SC for program execution and planning. In April, 1996, France indicated that
it was not prepared to sign the MOU, and the remaining countries have decided to
continue, even if France withdraws. A trilateral SOI was signed on April 22, 1996.
The MOU signed by the U.S., Italy, and Germany became effective May 28, 1996.
There will not be an increase in the funding requirement needed for this phase.

Two competitive transatlantic industrial teams will execute the PD-V phase.
Lockheed-Martin Integrated Systems, Inc and H&R Company (joint venture be-
tween Hughes Aircraft and Raji;heon Company) were paired with euroMEADS Core
Teams B and A, respectively. EuroMEADS is a European industrial consortium con-
sisting of Alenia, DASA, and Siemens. Contracts to conduct a four month inter-
national teaming phase were awarded by the U.S. Army in May 1996. The $56 mil-
lion in fiscal year 97 will fund the U.S. portion of the two prime contracts for 12
months of the approximate 33 month PD-V effort. During the PD-V, the two inter-
national entities will compete for the Design and Development phase.

Question. What added capability would MEADs provide to theater missile de-
fense?

Answer. MEADS is exceptionally important to the Army mission in that it wiU
provide protection of the maneuver force at two very critical phases of operation.
First, being strategically deployable by C-141 aircraft vice C-5 aircraft;, we will be
able to protect our forces during entry into the theater of operation when they are
highly vulnerable. MEADS will be tactically transportable by C-130 aircraft for de-
ployment where only tactical airfields are available and also transportable by naval
landing craft for over-the-shore deployment by the USMC. Second, MEADS will be
capable of moving with the maneuver forces as they go forward to engage in decisive
operations against enemy forces, providing protection of critical logistics, command
and control, and troop assets.

459

Question. What is your estimate as to the total cost to develop the system? What
would the total U.S. share be?

Answer. The U.S. share of the program cost to develop MEADS approximately is
$1.5 billion.

Arrow Missile Program

Question. As you know this Committee had some concerns last year regarding the
Arrow missile program. A good deal of that concern had to do with poor technical
performance in tests. The Committee was also concerned about the potential ad-
verse effects on U.S. weapons system modernization if the IsraeU government ex-
pected our defense appropriations bill to foot the costs of Arrow missile production.
A few things have changed since last year. First, I understand that we have a
Memorandum of Understanding (MOU) with the Israelis regarding the nature of
our future financial commitment. Second, I iinderstand that there was a recent test
of the missile which was promising. Can you please discuss with us first, the MOU
on U.S. funding and second, the test that was just conducted?

Answer. The MOA signed on March 29, 1966 provided a funding profile commit-
ting the U.S. to $27 million in fiscal year 1996 and $35 million per year from fiscal
year 1997-2001. This represents 36 percent ($202 million) of the total funding ($556
million) with Israel putting in 64 percent.

In February of this year, the IsraeUs conducted the second of two scheduled per-
formance flights of the Arrow II tactical missile. This was a fiiU-up Arrow II with
all components including seeker and warhead. The missile went through a series of
preplanned maneuvers. The primary objectives of this test was to demonstrate the
ability of the Arrow II interceptor to support the first intercept mission planned for
mid 1996. Other objectives included obtaining tactical focal plane array data, valida-
tion of the intercept guidance and control software, verifying uplink performance,
performance of the RF seeker operation and booster motor performance. This test
did not include a target missile.

National Missile Defense System

Question. The National Missile Defense system will provide protection against
long range ballistic missile threats using hit-to-kill technology. The budget request
for 1997 is approximately $508 million for National Missile Defense. This is about
$238 milUon less than the 1996 appropriated level. Can you please teU us what you
will be able to accomplish at this dramatically reduced level?

Answer. The 1996 appropriations for National Defense was increased significantly
from the requested level because of Congressional desire to accelerate the develop-
ment and deplo3anent of a National Missile Defense capability. In response to this
and other considerations, the Department of Defense conducted a major review of
missile defense starting last fall. The end result of this review was a reduction of
the NMD program away from a technolo©^ focus to a "deployment readiness" focus.
In making this shift, the Department reallocated its resources to increase the 1997
NMD funding request by $100 million over what had been previously planned. This
and other adjustments to the Program Objectives Memorandum were deemed appro-
priate and necessary to effectively use the funds provided by Congress in 1996 as
a spring board for the development, the first three-year period of owe "3+3" strategy,
of an NMD system which could be deployed with an IOC in 2003 if the threat war-
rants. The 1997 request is adequate to support the "3+3" development, albeit at a
high risk. Barring unforseen technical difficulties, I expect that we will be prepared
to conduct an integrated system test of the NMD system in 1999 and, if the tnreat
warrants a decision to do so, deploy an effective NMD capability by 2003.

Question. Has the Administration committed itself to a date for deplojrment of a
National Missile Defense System?

Answer. No. The Administration has committed to the NMD Deployment Readi-
ness Program which is being implemented by a "3+3" strategy. This strategy devel-
ops and tests a system over the next 3 years. Allowing a deployment decision to be
made in fiscal year 1999. Deployment of an IOC could occur by 2003 if the threat
warrants.

Question. Last year the Administration caUed its research intensive program a
"technology readiness" program. The problem with that plan was that there was no
commitment to deploy a system. It was all research. This year, the Administration's
plan calls for a "deployment readiness" program. Why don't we simply go ahead, set
a date and get on with it?

Answer. It would be premature to set a firm deployment date at this point in the
NMD development process. While we have made significant technical progress and
believe we have solved most of the technical issues, we have yet to build and test

460

a prototype of the entire NMD system. Under normal DoD acquisition procedirres,
it would usually require about 10 more years before we would be at the point a de-
ployment decision would be made. Recognizing that such a lengthy development was
unacceptable, the Department structured the "3 +3" strategy so that if a threat de-
velops which makes a deplojmaent necessary, we could have an operational capa-
bility by 2003. In order to assure the 2003 IOC, we must complete development and
initial testing of the system by 1999. I believe this is possible but know that the
system that exists in 1999 will not be perfect and will not have been tested as ex-
tensively as we would Uke. Absent that compelling threat, I would recommend the
continued improvement and testing of the system so that when it is deployed it will
be as effective, reliable, and affordable as we can make it. The "3+3" strategy is de-
signed on this principle. We will continue to evolve the NMD capability, introducing
more efficient and affordable technology over time, while always preserving the op-
tion to deploy an operational system within three years.

Question. The North Koreans are developing a long range missile called the Taepo
Dong 2. Can you tell us the range of that missUe? Is that sufficient to threaten the
U.S.?

Answer. .

Question. When could this missile be deployed?

Answer. .

Question. Are we vulnerable to attack if such a long range missile were deployed
before 2003?

Answer. .

Question. Does the Administration plan to deploy an Anti-Ballistic Missile (ABM)
Treaty compliant NMD system? Is that a single-site system? Aren't Alaska and Ha-
waii vulnerable with a single site?

Answer. The Administration has not decided to deploy an NMD system. It has
committed to an NMD Deployment Readiness Program implemented by a "3+3"
strategy. This strategy will accomplish the development of an initial NMD capability
during the first three years which could be deployed to achieve an IOC by the end
of the second three years. The first three-year development will be conducted in
compUance with the ABM Treaty. If a decision is made to deploy, the system could
either comply with existing Treaty limits or perhaps require amendments to the
treaty. This determination would not be made untU a more detailed understanding
of the threat and system requirements was available.

The NMD system under development is designed to be fully functional with a sin-
gle interceptor site, but there are no techniced reasons multiple sites could not be
deployed if necessary.

The single interceptor site architecture could provide protection of Alaska and Ha-
waii against the limited threats that we expect might be developed by rogue na-
tions.

Space Missile Tracking System (SMTS)

Question. The Space and Missile Tracking System (SMTS) will be part of a system
of space-based satelUtes that will significantly improve the CINCs ability to defend
against theater ballistic missiles. SMTS will greatly enhance our missile defense
systems by providing data throughout the flight of an incoming ballistic missile.
How much money has been budgeted in 1997 for SMTS?

Answer. The Air Force's fiscal year 1997 President's Budget includes $113.2 mil-
lion for the SMTS program. SMTS is not in the BMDO program.

Question. How would you describe coordination between BMDO and the Air Force
on this program?

Answer. The working relationship between the Air Force and BMDO on the SMTS
program is generally good. BMDO is a member of the SMTS Executive Committee.

Question. You have a Memorandum of Agreement on this program. Is that work-
ing? Why or why not?

Answer. Recognizing that SMTS provides a critical capability to BMD systems,
the Air Force and BMDO signed a Memorandum Of Agreement (MOA) in September
1995 which requires the Air Force to obtain coordination and concurrence from the
Director, BMDO, on any decision that would impact the funding, schedule, or per-
formance parameters of the SMTS program. There have been some growing pains
associated with the implementation of the MOA. On a few occasions, for example,
changes to the SMTS budget were implemented without the prior coordination or
concurrence of BMDO. On the other hand, the Air Force has consulted BMDO on
program restructuring and involved BMDO in the detailed planning necessary to
meet the accelerated schedule.

Question. Should the program be transferred back to BMDO?

461

Answer. SMTS is a vital component of the objective NMD architecture. As a result
of the Space Based Sensor study in FY 1994 several stovepipe systems from the Air
Force, the intelligence community and BMDO were combined into a single program.
The resulting system is now called the Space Based Infrared System (SBIRS).
SBIRS has four missions: missile warning, missile defense, technical intelligence,
and battlespace characterization. The total set of space-based infrared requirements
are documented in the USSPACECOM Capstone Requirements Document (CRD)
and were validated by the JROC. SBIRS will sjmergize high and low constellations
of satelUtes to maximize requirements satisfaction and cost effectiveness. While I
support this single program approach, I believe the BMDO must play a much more
significant role in defining the SMTS schedule and funding levels to ensure that its
development is coordinated with BMD deployment plans and funding levels rather
than just being subject to Air Force priorities.

Question. Is it true that the Department is refusing to obligate $51 million of the
$250 miUion appropriated last year by Congress? Why is this so? Do you and the
Air Force support release of these funds?

Answer. Of the $250 million appropriated for SMTS last year by Congress, $51
million was rescinded in PBD 719 to pay for Bosnia. The $51 million is needed to
keep the SMTS Flight Demonstration System program on schedule. Without these
funds, and further plus-ups across the FYDP, it will not be possible to meet the FY
2002 SMTS first launch and FY 2003 initial operational capability directed by the
1996 Defense Authorization Act.

Update (7/19/96): The $51 million rescinded in PBD 719 was fully restored. Of this
$51 milUon, $31 miUion is intended for the SMTS baseUne program; $10 million wiU
go to the Competitive Dem/Val effort; and the remaining $10 million will fund the
SMTS share oi BMDO technology development efforts, pending Under Secretary of
Defense (Acquisition & Technology) approval.

Question. Are the Air Force and BMDO committed to deplojdng the SMTS system
as specified in law (first launch in 2002 and initial operational capability in 2003)?
Does the 1997 request support this? How much more fiinding would be required to
ensure that these dates are achieved?

Answer. I fully support the accelerated deployment of the SMTS. The 1997 re-
quest does not support the directed 2002 first launch or 2003 initial operational ca-
pability. To meet these dates, a total of $250 million is required in fiscal year 1997.

Question. Do you agree that SMTS could significantly enhance the performance
capability of U.S. systems?

Answer. Yes. SMTS will provide over-the-horizon precision midcourse track data
on incoming ballistic missiles allowing interceptors to be fired long before the mis-
siles come within radar range. This will increase the interceptor battlespace and
thus the probability of negating the threats. For NMD this early interceptor launch
is critical to providing effective defense of North America against any foreseeable
baUistic missile threats. For TMD this increase in interceptor battlespace can great-
ly improve theater defenses against medium and long range ballistic missile threats.
Additionally, utilizing SMTS data reduces NMD and TMD systems' susceptibility to
countermeasures and adds robustness to the surveillance and tracking aspect of the
defenses.

Question. Can you give us a general idea of the outeome of a recent Executive
Committee EXCOM meeting on this system? Is the Administration reconsidering its
commitment to SMTS?

Answer. The last EXCOM met in March 1996. The EXCOM concurred with the
Air Force plan for acceleration of SMTS to meet the Congressional direction pro-
vided in the fiscal year 1996 Defense Authorization BUI. The EXCOM directed the
Air Force to take the acceleration plan to USD(A&T) for approval to proceed. Cur-
rent plans call for a decision on SMTS deployment in fiscal year 2000, after the
Flight Demonstration Satellite has been flown. The Department has budgeted for
the deployment of SBIRS Low in fiscal year 2006. The additional dollars required
to deploy beginning in fiscal year 2002 are not contained within the DoD top line.

Update (7/19/96): A joint NMD/SBIRS OIPT met on July 12, 1996 and rec-
ommended the following actions to the Under Secretary of Defense (Acquisition &
Technology):

— SMTS to be designated an ACAT ID program under the SBIRS program.

— ^Air Force to present a plan for meeting ACAT ID documentation and reporting

requirements by September 30.
— ^Air Force to fully fund SMTS development, with first launch scheduled for fiscal

year 2006.
— ^Air Force to release $20 million in fiscal year 1996 funding for Competitive Dem/

Val ($10 million) and support for BMDO technology programs ($10 million).

462

Anti-Ballistic Missile Treaty

Question. Would you please update us on the status of the Administration's nego-
tiations with Russia on ABM issues?

Answer. At the May 1995 Moscow summit, Presidents Clinton and Yeltsin issued
a statement of "Joint Principles" governing ABM/TMD demarcation — acknowledging
that deployment of highly effective TMD was both necessary and consistent with the
ABM Treaty. Follow-up discussions between Under Secretary of State Davis and
DFM Mamedov produced an agreed two-part framework for codifying those prin-
ciples. Part I would cover aspects of demarcation on which we agreed — specifically,
that all TMD systems with an interceptor velocity below 3 km/sec would not be sub-
ject to ABM Treaty restrictions, so long as they were not tested against ballistic
missile targets with velocities greater than 5 km/sec or ranges beyond 3500 km.
Part I would be codified in the ABM Treaty's Standing Consultative Commission
(SCO, and would include confidence-building measures (CBMs) designed to provide
assurances that neither side's TMD systems pose a threat to the other side's stra-
tegic nuclear force. Part II, covering higher-velocity systems, would be addressed
subsequently in senior political channels.

After the Davis-Mamedov understanding, however, the Russians linked imple-
mentation of Part I with the conclusion of Part II, threatening to make demarcation
one package. They also insisted that there be no testing, development or deployment
of any faster TMD systems pending Part II agreement — a clearly unacceptable posi-
tion.

At the April Summit, we broke the Part I-Part II linkage and reached agreement
at the head-of-state level that the sides could conclude and implement a Part I ac-
cord without regard to the status of Part II. The U.S. has also made clear to the
Russians that, in the absence of a Part II agreement, compliance determinations for
higher-velocity systems would remain a nationad responsibility. The Part I agree-
ment we hope to sign in the very near future will confirm that all lower-velocity
TMD systems — regardless of their means of external support (including space-based
sensors) — are not subject to ABM Treaty restrictions. Our negotiators returned to
Geneva on 20 May to finalize the agreement.

As of the end of that session on June 24, there is preliminary agreement among
all the sec participants on the texts of two documents: a Memorandum of Under-
Standing on succession and an Agreed Statement relating to demarcation. In addi-
tion, after the Ukraine, Belarus and Kazakstan delegations had departed Geneva,
the United States and Russia reached agreement on the other two documents: regu-
lations governing the multilateral operation of the SCC and an agreement on TMD
confidence-building measures. Consultations with those states will continue, and we
are hopeful that they will soon be able to join the accord reached by the United
States and Russia. Thereafter, the documents will be referred to governments for
internal review and approval prior to beginning the formal process leading to entry
into force.

Question. Does the Administration plan to limit the so-called "core systems" (e.g.
the Army PAC-3 and THAAD, Navy Lower Tier) to certain velocities and ranges?

Answer. There is no plan to limit any of the current "core systems" in either veloc-
ity or range. The Part I demarcation agreement would merely certify that any TMD
system with an interceptor velocity at or below 3 kilometers per second (km/s) would
be unambiguously complaint with the ABM Treaty, provided it was tested only
against ballistic missiles with ranges up to 3500 km and velocities of up to 5 km/
s. The Army PAC-3, THAAD, and the Navy Lower Tier systems all have interceptor
velocities below 3 km/s and there are no plans to test them against targets with
ranges greater than 3500 km or velocities of 5 km/s. These systems would be clearly
treaty complaint.

Question. Would the Navy Upper Tier program be limited under this arrange-
ment?

Answer. The Part I demarcation agreement applies only to TMD systems with in-
terceptor velocities at or below 3 km/s, and will be adopted without prejudice to
higher-velocity systems. Part II negotiations will address higher-velocity systems.
Presuming Part II is concluded along the lines of the Part I agreement being nego-
tiated, there should be no limitations on Navy Theater Wide.

In the absence of a Part II agreement, both sides would continue to make their
own compliance determinations for higher velocity-systems. In April 1995, the DoD
certified compliant a Navy Upper Tier design with a faster interceptor missile. If
the ultimate design of the Theater-Wide system does not change significantly from
that certified in 1995, that compliance determination will continue to apply, and
there would be no limitations on its deployment.

463

Question. What does that do to your efforts to build a program that meets emerg-
ing short, medium and long range missile threats?

Answer. The U.S. will not accept any agreement limiting our ability to field effec-
tive TMD. The demarcation agreement we hope to sign shortly would confirm that
all lower-velocity TMD systems — regardless of their means of external sensor sup-
port (including space-based sensors) — are not subject to ABM Treaty restrictions.
This agreement would cover all five U.S. lower-velocity systems: Patriot, PAC-3,
Corps SAM/MEADS, THAAD, and Navy Lower Tier. The only U.S. TMD system in
development which is projected too be a higher-velocity system is Navy Theater
Wide, which the U.S. has already certified as treaty-compliant (as reported to Con-
gress April 1995). The U.S. has consistently made clear to the Russians that in the
absence of a Part II agreement, compliance determinations for higher-velocity sys-
tems would remain a national responsibility. We also made clear to the Russians
at the April Moscow summit that we will not accept any testing restrictions on Navy
Theater Wide beyond a commitment not to test it against strategic ballistic missile
targets.

[Clerk's note. — End of questions submitted by Mr. Young.]

WITNESSES

Page

Anderson, Maj. Gen. E. G., Ill 1

Balisle, Capt. P. M Ill

Decker, G. F 1

Douglass, J. W Ill

Guenther, Lt. Gen. O. J 1

Haines, Brig. Gen. D. G 267

Hawley, Maj. Gen. John 385

Hite, Lt. Gen. R. V 1

Hood, Adm. J. T Ill

Hood, Rear Adm. Tim 385

Lopez, Vice Adm. T. J Ill

Money, A. L 267

Montgomery, Col. Dan 385

Muellner, Lt. Gen G. K 267

O'Neill, Lt. Gen. M. R 385

Oster, Maj. Gen. J. W Ill

(i)

INDEX

AIR FORCE ACQUISITION PROGRAMS

Page

Acquisition Program Issues 339, 373

Acquisition Reform Savings 339

Airborne Laser Program (ABL) 344, 367

Aircraft Programs:

Airborne Warning and Control Systems (AWACS) 361

B-1 Aircraft Program 351

B-2 Aircraft Program 353

F-15E and F-16 Aircraft 355

F-22 Aircraft Program 354

Force Structure 350

Joint STARS Program 360

Joint Strike Fighter (JSF) Program 355

Engines, Joint Strike Fighter 344

Ammunition, Care/Maintenance of Conventional 370

Evolved Expendable Launch Vehicle (EELV) 365

Funding, Additional 346

Global Positioning Satellite Targeting System/Ground Attack Munitions

(GATS/GAM) 294

Introduction 267

Joint Air-to-Surface Standoff Missile (JASSM) 293, 356

Joint Direct Attack Munition (JDAM) 293, 358

Milstar Program 365

Modernization Shortfalls 345

Other Procurement, Air Force 370

Smart Weapons, Integrating Aircraft with 292

Space Based Infrared System (SBIRS) 363

Statement of Brigadier General Dennis Haines 285

Statement of Mr. Arthur L. Money and Lt. General George K. Muellner,

The Joint 271

Summary Statement of General Haines 284

Acquisition Reform 284

Budget Request, Fiscal Year 1997 284

Modernization 284

Summary Statement of General Muellner 292

Airborne Laser Program 299

Airborne Warning and Control System (AWACS) 302

B-1 Aircraft Program 301

B-2 Aircraift Program 301

C-17 Aircraft Program:

Cost of Program 295

Funding Requirements 296

(iii)

Page

Summary Statement of General Muellner — Continued
C-17 Aircraft Program — Continued

Multiyear Procurement 294

F-15E Aircraft Program 299

F-16 Aircraft Program 300

F-22 Aircraft Program 298

Joint Air-to-Surface Standoff Missile (JASSM) 301

Joint Direct Attack Munition (JDAM) 301

Joint STARS Program 303

Joint Strike Fighter (JSF) 300

Science and Technology 303

Space Programs 301

Summary Statement of Mr. Money 268

Acquisition Reform 268

Budget Request, Fiscal Year 1997 268

Science and Technology Program 269

Summary 270

Unfunded Requirements 341

Wind-Corrected Munition Dispenser (WCMD) 293

ARMY ACQUISITION PROGRAMS

Abrams Tank (M1A2) Testing Issues 68

Acquisition Program Issues 105

Ammunition Programs, Army 92

Anti-Satellite (ASAT) Demonstration Test 72

Armored Combat Earth Mover (ACE) 71

Armored Gun System (AGS) 91

Battlefield Digitization 98

Bradley Fighting Vehicle:

Armor Tiles 1 78

Vehicle Modifications 79

Budget Request for Modernization, Fiscal Year 1997 53, 64

Chemical Munitions, Demilitarization of 71, 104

Command, Control and Communications Issues 60, 101

Cost Reduction Efforts 56

Crusader Program 88

Force Provider Modules 108

Foreign Equipment by U.S. Soldiers, Use of 78

Helicopter Programs:

Apache Longbow HeUcopter 85

Black Hawk Helicopter 77

Chinook Helicopter (CH— 47) Life Extension Program 69

Comanche Helicopter 61, 76, 79, 80, 84

Crash Safety, HeUcopter 78

Huey UH-1 Service Life Extension Program (SLEP) 83

Kiowa Warrior Helicopter (OH-58) 70

High Energy Laser System Test Facihty (HELSTF) 65

Improved Recovery Vehicle Funding 68

Information Security 58

Introduction 1

Joint Standoff Land Mine Detection System 73

Joint Surveillance and Target Attack Radar (JSTARS) Ground Station Mod-
ule (GSM) 82

Landmines 97

Liquid Propellant Decision 57

Page

M829A2 Kinetic Energy Tank Round 62, 81

MILSTAR Program 96

Missile Programs, Army 86

Nautilus/Tactical High Energy Laser (THEL) 72

Readiness Issues, Long Term 55

Research and Development Project Cancellations 57

Reserve Component Automation System (RCAS) 67

Science and Technology 102

Statement of Gilbert F. Decker and Lt. General Ronald V. Hite, The Joint 9

Summary Statement of Secretary Mr. Decker 2

Army Modernization and Force XXI 3

Soldier Enhancement Program-Land Warrior 4

Weapon Systems and Systems Upgrades 3

Tactical Vehicles 74, 94

Tank Automotive Research, Development and Engineering Center (TARDEC) 83

Theater High Altitude Area Defense System (THAAD) 60, 103

Theater Missile Defense (TMD) 63

Unfunded Requirements 53, 54, 83

Unmanned Aerial Vehicles (UAVs) 64

BALLISTIC MISSILE DEFENSE ORGANIZATION

Anti-Ballistic Missile (ABM) Treaty 462

Arrow Theater MissUe Defense Program 430, 459

Capabilities 437

Funding 433

BalUstic Missile Defense Organization Policy 445

Boost Phase Intercept 445

Funding Overview 448

High Energy Laser System Test FaciUty (HELSTF) 427, 443

Hypersonic Sled Trade 445

Introduction 385

Medium Extended Air Defense System (MEADS) 429, 458

Missile Defense Programs:

Funding 433

Schedule 434

Missile Threat Summary 446

National IntelUgence Estimate (NIE) 442

National Missile Defense (NMD) System 459

Nautilus/Tactical High Energy Laser (THEL) 444

Navy Lower Tier Program 456

Patriot Advanced Capability (PAC-3) System 424, 454

Remarks of Mr. Dicks 387

Remarks of Mr. Livingston 388

Remote Optical Beam Steering (ROBS) System 445

Scorpius Technology Program 444

Space Based Laser (SBL) 446

Space Missile Tracking System (SMTS) 460

Statement of Lt. General Malcolm R. O'Neill 396

Summary Statement of General O'Neill 390

Ballistic Missile Defense Technology Program 394

Budget Request, Fiscal year 1997 391

Early Warning Information 391

Medium Extended Air Defense System (MEADS) 393

National Missile Defense (NMD) 393

Page

Summary Statement of General O'Neill — Continued

Navy Theater- Wide 392

Patriot PAC-3 System 391

Priority to Field Improved Defenses 390

Summary 395

Theater High Altitude Area Defense (THAAD) 392

Theater Missile Defense Programs, Core 392

Theater High Altitude Area Defense (THAAD) 424, 455

Battalion 428

External Cue 426

Program Delay 424

Program Review 425

White Sands Missile Range 444

Wide Area System Capabilities 435

NAVY AND MARINE CORPS ACQUISITION PROGRAMS

Acquisition Program Issues 248

Additional Funding 204

Advanced Amphibious Assault Vehicle 187, 230

Aircraft Carriers 193

Modernization 213

Overhauls of Nuclear Powered Aircraft Carriers 218

Aircraft Programs:

A-12 Aircraft Litigation 244

AV-8B Aircraft 239

E-2C Aircraft 241

F-14 Aircraft 236

F-18 Aircraft 238

Joint Strike Fighter Aircraft 190

Marine Helicopter Upgrade Program 264

P-3 Aircraft 242

V-22 Aircraft Program 189, 234

Ammunition 259

Arsenal Ship 222

Ballistic Missile Defense 119

Chinese BalUstic Missiles 119, 122

Theater Defense Weapons 120

Upper Tier Programs 121, 123

Weapon Development Limitations 121

Command, Control, and Communications 231

Contract Abuse at the Johns Hopkins Lab 247

DDG-51 Aegis Destroyers 218

FFG-7 Frigate Ships:

Retirement of 223

Upgrades 225

Fiscal Year 1996 Funds 260

Indoor Simulated Marksmanship Trainer 265

Inter-Cooled Recuperative (ICR) Gas Turbine Engine Program 188, 245

Introduction Ill, 141

Joint Advanced Strike Technology 243

LPD-17 Ship Program 221

Marine Prepositioning Ship Enhancement 209

Medium Tactical Vehicle Remanufacturing Program 229

Mine Warfare 227

Missile Programs:

AMRAAM Missile 232

Vll

Page
Missile Programs — Continued

D-5 Missile 194

Standard Missile 233

Tomahawk Missile 195

Verticle Launch ASROC (VLA) Missile 200

Modernization of Ships 207

Modernization Shortfall 201

Mountain Top Demonstration Ill

Aircraft Tracking 114

AW ACS Participation 116

Enhanced Scenarios 113

Firing Results 112

Hawk Engagement 115

Objective 112

Ship Self-Defense 115, 117

Summary 116

Virtual Engagements 113

New Attack Submarine 194

Predator Program 200

Roll-On/Roll-Off Ships 196

Sealift Ship Costs 208

Sealift Support Equipment 211

Shallow Water Mine Countermeasures 264

Ship Force Structure 206

Ship Self-Defense/Cooperative Engagement 226

Smart Ship 196

Ship Conversion 198

Statement of John W. Douglass, Vice Admiral T. Joseph Lopez, and Major

General Jeffrey W. Oster 148

Submarine Modernization 212

Summary Statement of Secretary Douglass 142

Acquisition Reform 142

Aviation Programs 143

Fiscal Year 1997 Budget Request 142

Global Broadcast System 147

Marine Corps Programs 146

Mine and Undersea Warfare Programs 146

Missile Defense Programs 147

Ship Acquisition Programs 144

Ship Development Programs 145

Theater Missile Defense 117

Unfunded Requirements 187, 188

University Research 246

BOSTON PUBLIC LIBRARY ^^^^

3 9999 05571 198 8

^^V-'

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