DEPARTMENT OF DEFENSE APPROPRIATION BILL, 1982

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• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP89M00610R000100040004-8
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• Document Page Count: 317
• Document Creation Date: December 20, 2016
• Document Release Date: March 2, 2007
• Sequence Number: 4
• Publication Date: November 16, 1981
• Content Type: REGULATION

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97TH CONGRESS l
1st Session I
HOUSE OF REPRESENTATIVES {
DEPARTMENT OF DEFENSE
APPROPRIATION BILL, 1982
REPORT
No. 97-333
REPORT
OF THE
COMMITTEE ON APPROPRIATIONS
together with
ADDITIONAL VIEWS
[To accompany H.R. 4995]
NOVEMBER 16, 1981.-Committed to the Committee of the Whole House
on the State of the Union and ordered to be printed
U.S. GOVERNMENT PRINTING OFFICE
89-0060 WASHINGTON : 1981
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97TH CONGRESS HOUSE OF REPRESENTATIVES ( REPORT
1st Session J t No. 97-333
DEPARTMENT OF DEFENSE APPROPRIATION BILL, 1982
NOVEMBER 16, 1981.-Committed to the Committee of the Whole House on the State
of the Union and ordered to be printed
Mr. ADDABBO, from the Committee on Appropriations,
submitted the following
REPORT
together with
ADDITIONAL VIEWS
[To accompany H.R. 4995]
The Committee on Appropriations submits the following report
in explanation of the accompanying bill making appropriations for
the Department of Defense, and for other purposes, for the fiscal
year ending September 30, 1982.
APPROPRIATIONS AND ESTIMATES
Appropriations for most military functions of the Department of
Defense are provided for in the accompanying bill for the fiscal
year 1982. This bill does not provide for military assistance, mili-
tary construction, military family housing, or civil defense, which
requirements are considered in connection with other appropri-
ation bills.
The new budget (obligational) authority enacted for the fiscal
year 1981, the Presidents budget estimates, as amended by House
Documents 97-29, 97-61, 97-94, 97-101 and Senate Document 97-8,
and amounts recommended by the Committee for the fiscal year
1982 appear in summary form in the following table beginning on
page 2:
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 SUMMARY OF COMMITTEE RECOMMENDATIONS
The revised budget estimates for fiscal year 1982 for those activi-
ties of the Department of Defense and related agencies carried in
the accompanying bill total $200,878,234,000. The amounts recom-
mended by the Committee in the accompanying bill total
$196,607,809,000 in new obligational authority and $73,900,000 in
transfers from other accounts for a total funding availability of
$196,681,709,000. The total obligational authority recommended is
$4,196,525,000 less than the budget estimates and is $25,026,944,000
more than the sums made available for the same purposes for
fiscal year 1981. The $196.7 billion recommended is the largest sum
ever included in one bill for military purposes in the history of
the country.
The magnitude of the increase in Defense funding is even greater
than that indicated by the above amounts because a large supple-
mental request and appropriation for fiscal year 1981 which was
enacted late in the fiscal year substantially increased the base. The
regular annual Department of Defense Appropriation Bill for
Fiscal Year 1981 provided $159.7 billion. Thus, the fiscal year 1982
Defense Appropriation Bill as reported by the House is $37.0 billion
higher than the similar bill enacted into law last year. The fiscal
year 1981 Supplemental included $11.6 billion in addition to the
$159.7 billion. Of that amount, $6.9 billion was for Defense pro-
grams and $4.7 billion was for pay raise costs. The inclusion of
such pay raise costs in a supplemental bill is customary but the
appropriation of substantial sums for program purposes is not. The
program funds in the supplemental may be included along with the
increase proposed in, fiscal year 1982 in order to more fully under-
stand the recent increase in Defense funding levels of some $44.0
billion. It is anticipated that similar pay increase supplemental
requests will be made for fiscal year 1982. To the extent that they
are, the difference between the fiscal year 1981 and fiscal year 1982
funding availability for the Defense Department will be increased.
The Committee encountered considerable difficulty in processing
the annual Defense Appropriation Bill. There was a substantial
amendment increasing the Defense budget in April. There were
other smaller amendments and in October there was submitted a
substantial decrease in defense funding estimates. The impact of a
major ($7.6 billion) decrease after the beginning of the new fiscal
year had an adverse impact on the ability of the Committee to
report the bill at the time it desired to do so. The same amendment
had an adverse effect on the completion of the already tardy
annual authorization bill. Once again, the authorization bill. had
not been enacted at the time of the Committee mark-up on the
appropriation bill. This, of course, makes the work of the Commit-
tee extremely difficult.
The Committee again recommends $750 million in general trans-
fer authority to the Department of Defense. Recognizing that there
are changing Defense requirements and circumstances during the
year, the Committee has found that the provision of such general
transfer authority gives the Department the ability to react in a
timely way to unforseen program changes. As has been true in the
past, these transfers are to be handled through the regular repro-
gramming process.
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5
INFLATIONARY IMPACT STATEMENT
The bill reported will provide $196,607,809,000. this is an increase
of $25,026,944,000 over the amount appropriated for similar pur-
poses for fiscal year 1981. It is also $4,195,525,000 below the budget
request for fiscal year 1982.
The appropriation as proposed by the Committee should not
cause inflation to as great an extent than would enactment of the
budgeted amount. The real growth in Defense spending will have
little inflationary effect in comparison to the forecasted $3,312
billion gross national product for 1982.
This statement is made pursuant to Clause 2(A)(4), rule XI of the
House of Representatives.
TRANSFER OF FUNDS
Pursuant to clause 1(b), rule X of the House of Representatives,
the following is submitted describing the transfer of funds provided
in the accompanying bill.
The Committee recommends transfers of prior year unobligated
balances to fiscal year 1982 totaling $73,900,000. These transfers
are made from funds appropriated in fiscal years 1979 and 1981
and are no longer required for the purposes for which appropriated
as a result of Department of Defense decisions, Congressional
denial of reprogramming requests, or Committee recommendations.
The Committee recommends a transfer of $15,100,000 from the
fiscal year 1979 Shipbuilding and conversion, Navy appropriation.
This transfer is from unobligated balances in the Trident subma-
rine program.
The Committee recommends a transfer of $58,000,000 from the
fiscal year 1981 Shipbuilding and conversion, Navy appropriation.
This transfer is from unobligated balances in the maritime preposi-
tioning ship programs.
The Committee recommends a transfer of $800,000 from the
fiscal year 1981 Other procurement, Air Force appropriation. This
transfer is explained in the classified annex to this report.
The following table shows the titles and appropriations affected
by the transfers:
Shipbuilding and conversion, Navy .......................... $73,100,000 Shipbuilding and conversion, Navy, 1979/83......... $15,100,000
Shipbuilding and conversion, Navy, 1981/85......... 58,000,000
Other procurement, Air Force .................................. 800,000 Other procurement, Air Force, 1981/83................. 800,000
COMPARISON WITH BUDGET RESOLUTION
In accordance with Section 308(a)(1)(A) of the Congressional
Budget Act of 1974 (Public Law 93-344), the following table pro-
vides comparisons between the new budget authority target set
forth in the First Concurrent Resolution of the budget, as allocated
by the Committee on Appropriations under Section 302 of the Act,
and the budget authority contained in the accompanying bill:
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 National defense:
Thousands
Resolution target ...........................................................................................
$214,223,000
Committee bill ...............................................................................................
196,607,809
Difference .......................................................................................................
17,615,191
The Appropriations Committee Sec. 302 allocation assumed a
budget authority target for fiscal year 1982 Defense bills of
$214,223,000,000. Included in this figure is $5.5 billion set aside for
the 1982 pay supplemental next spring. The budget authority pro-
vided in this bill of $196,607,809,000 will not utilize any of the
funds set aside for the pay supplemental.
FIVE-YEAR PROJECTION OF OUTLAYS
In accordance with Section 309(a)(1)(B) of the Congressional
Budget Act of 1974 (Public Law 93-344), the following table con-
tains 5-year projections of the outlays associated with the budget
authority provided in the accompanying bill.
Thousands
Budget Authority .................................................................................................:. $194,607,809
Outlays:
1982
..............................................................................................:...................
120,160,644
1983
..................................................................................................................
40,461,027
1984
..................................................................................................................
21,551,187
1985
..................................................................................................................
6,904,656
1986 and beyond ............................................................................................
7,530,295
ASSISTANCE TO STATES AND LOCAL GOVERNMENTS
In accordance with Section 308(a)(1)(C) of the Congressional
Budget Act of 1974 (Public Law "93-344), no new budget authority
or outlays are . provided by the accompanying bill for financial
assistance to state and local governments.
The fiscal year 1982 budget will support Active Army forces of 16
divisions, 5 separate brigades, 1 combat brigade-air cavalry, and 3
armored cavalry regiments, and Reserve forces of 8 divisions, 21
separate brigades and 4 roundout brigades to active divisions, and 4
armored cavalry regiments. A summary of the major Active Forces
for fiscal years 1980, 1981 and projected for 1982 follows:
Divisions:
Airborne ..................................................................................................................
Infantry ...................................................................................................................
Mechanized .............................................................................................................
Armored ..................................................................................................................
Air Assault ..............................................................................................................
Total ...................................................................................................................
Nondivisional Combat Units:
Armored cavalry regiments .....................................................................................
Brigades ..................................................................................................................
Combat brigade air cavalry .....................................................................................
Active duty military personnel: End strength (thousands) ...............................................
1
4
6.
4
1
1
4
6
4.
1
1
4
6
4
1
16
16
16
3
3
3
5
5
5
1
1
1
= 776.5
781.1
780.0
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DEPARTMENT OF THE NAVY
The proposed budget will support a total hip force of 561 ships
at the end of fiscal year 1982 compared to 542 at the end of fiscal
year 1981 and 553 at the end of fiscal year 1980. The active aircraft
inventory (Navy and Marine Corps) of 5480 is slightly reduced from
fiscal year 1981. The forces include 13 aircraft carriers, 195 surface
combatants and 66 amphibious warfare ships at 'the end-`of fiscal
year 1982 as well as 2103 Navy and Marine Corps tactical 'aircraft
and 399 ASW aircraft. Ships which will join the fleet during fiscal
year 1982 include two TRIDENT nuclear submarines, six nuclear
attack submarines, two DD 993 (Iranian) class destroyers, nine
guided missile frigates, five hydrofoil patrol missile combatants, a
"Nimitz Class" nuclear powered carrier, two fleet oilers-and a
destroyer tender.
Aircraft carrier type:
Multipurpose carriers ........................... 13 ................................ 12 ................................ 13 ..............................
Surface combatant type:
Cruisers ............................................... 26 ................................ 27 ................................ 27 ..............................
Destroyers ........................................... 80 16 ................ 82 9 ................ 84 5 ..............
Frigates ............................................... 11 ............................... 79 ................................ 84 4 ..............
Submarine type:
Attack submarine ................................
FBM submarine ...................................
Diesel submarine .................................
Auxiliary submarine .............................
Patrol combatant type ..............................
Amphibious warfare type ..........................
Mine warfare type ....................................
Mobile logistics type ................................
Support type ............................................
74 ................................
40 ................................
5 ................................
1 ................................
3 ................................
63 3 ................
3 22 ...............
58 2 14
20 6 12
Total ........................................... 457 49
Total ship operation forces ......................... 553
83 ................................ 92 ..............................
35 ................................ 34 ..............................
5 ................................ 5 ..............................
1 ............................... I ..............................
1 ................................ 6 ..............................
59 6 ................ 60 6 ..............
3 22 ................ 3 22 ..............
61 2 15 61 ................ 14
21 6 13 22 6 12
26 469 45 28 492 43 26
542 ................................ 561 ..............
Submarine launched ballistic missile launchers .................................. 640 544 520
Aircraft inventory (active) ................................................................. 5,360 5,507 5,480
Tactical aircraft (USN and USMC) .................................................... 2,121 2,104 2,103
ASW aircraft (fixed and rotary wing) ............................................... 396 397 399
Marine Amphibious Forces ................................................................. 3 3 3
Active duty military personnel ............................................................ 715,622 731,056 746,800
Navy ......................................................................................... 527,153 540,456 554,700
Marine Corps ........................................................................... 188,469 190,600 192,100
Reserve component strength (average) ............................................ 120,515 123,249 125,200
Navy ........................................................................................ 86,874 87,400 87,600
Marine Corps ............................................................................. 33,641 35,849 37,600
 8
DEPARTMENT OF THE AIR FORCE
For end fiscal year 1982, the Air Force budget provides an active
force structure of 78 tactical fighter and attack squadrons, orga-
nized into 26 combat wings, 6 air defense interceptor squadrons,
and 24 strategic bomber squadrons, including both B-52s and FB-
111s. Also supported in this budget are 31 airlift squadrons. The
Minuteman and Titan ICBM force will be 1,053 launchers. Signifi-
cant increases-in personnel occurred as shown below.
A summary of major Air Forces as proposed in the President's
Budget as amended follows:
1980
1981
1982
USAF TAC Ftr & Attack Squadrons ..................................................................................
79
78
78
Air Defense Interceptor Squadrons' ................................................................................
6
6
6
Strategic Bomber Squadrons ............................................................................................
25
25
24
ICBM Launchers ...............................................................................................................
1,054
1,054
1,053
USAF Airlift Squadrons .....................................................................................................
31
31
31
Aircarft Inventory Active 2 ..............................................................................................
9,268
9,408
9,412
Active Duty Military .........................................................................................................
558,000
564,500
586,800
Reserve Components Personnel ........................................................... .............
152,219
155,187
163,019
ANG .................................................................................................................................
94,000
95,844
99,054
AFR ..................................................................................................................................
58,219
59,343
63,965
Includes one squadron in Iceland.
1 Includes Active Air Force, Air National Guard, and Air Force Reserve.
UNEXPENDED AND UNOBLIGATED BALANCES
The following tables compare the unexpended and unobligated
balances for the military functions of the Department of Defense
over the past 20 years for both the entire Defense Budget and for
the accounts covered by this bill. The unobligated balances associ-
ated with the accounts are projected in the budget to increase
between end fiscal year 1980 and end fiscal year 1982 from $17.8
billion to $29.0 billion. The unexpended balances at the end of
fiscal year 1980 and the end of 1982 are projected to increase from
$79.7 billion to $134.6 billion.
UNOBLIGATED BALANCES, FISCAL YEARS 1961-82
[In millions of dollars]
Total unobligated
balance
Pertaining to
appropriations in the
basic DoD
appropriation bill
At the end of fiscal year:
167
7
483
6
1961 ...........................................................................................................................
,
,
1962........... ............ ....... ........... ....................... .......... ........ ........ .........................
7,120
6,584
1963 ...........................................................................................................................
9,170
8,150
.........................
1964 .................................................................................................
9,961
9,008
1965 ........................................................................................................
11,029
10.103
1966 ...........................................................................................................................
13,854
11,830
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UNOBLIGATED BALANCES, FISCAL YEARS 1961-82-Continued
[In millions of dollars]
Pertaining to
Total unobligated appropriations in the
balance ' basic DoD
appropriation bill
1967
......................................................................................................:....................
13,725
12,244
1968
...........................................................................................................................
13,494
11,666
1969
...........................................................................................................................
13,669
12,022
1970
...........................................................................................................................
13,565
11,966
1971
...........................................................................................................................
11,463
9,689
1972
...........................................................................................................................
10,203
8,319
1973
...........................................................................................................................
10,911
9,009
1974
...........................................................................................................................
13,393
11,131
1975
...........................................................................................................................
15,375
12,795
1976
...........................................................................................................................
18,655
15,697
1977
...........................................................................................................................
17,651
15,613
1978
...........................................................................................................................
18,531
16,772
1979
...........................................................................................................................
17,862
16,158
1980
.................................................................................................
19
369
17
750
..........................
1981 estimate ............................................................................................................
,
23,085
,
21,270
1982 estimate ............................................................................................................
31,598
29,035
Basic and military construction bills.
Note.-Unobligated balances for revolving funds and trust funds are excluded from this table.
UNEXPENDED BALANCES, FISCAL YEARS 1961-82
[In millions of dollars]
At the end of fiscal year:
Pertaining to
Total unexpended appropriations in the
balance ' basic DOD
appropriation bill
1961 ...........................................................................................................................
26,922
25,204
1962 ...........................................................................................................................
27,301
25,765
1963 ...........................................................................................................................
27,737
25,955
1964 ...........................................................................................................................
27,560
25,805
1965 ...........................................................................................................................
29,989
28,194
1966 ...........................................................................................................................
38,540
35,441
1967 ...........................................................................................................................
42,541
39,937
1968 ...........................................................................................................................
43,225
40,111
1969 ...........................................................................................................................
40,957
38,157
1970 ...........................................................................................................................
37,394
35,755
1971 ...........................................................................................................................
33,814
30,953
1972 ...........................................................................................................................
33,829
30,614
1973 ...........................................................................................................................
37,143
33,462
1974 ...........................................................................................................................
40,569
36,522
1975 ...........................................................................................................................
40,515
35,977
1976 ...........................................................................................................................
47,539
42,964
1977 ...........................................................................................................................
58,616
53,785
1978 ...........................................................................................................................
69,125
64,632
1979 ........................................................................................................................... ?
77,423
72,619
1980 ...........................................................................................................................
84,118
79,658
1981 estimate ............................................................................................................
102,998
97
489
1982 estimate ............................................................................................................
139,305
,
134,623
I Basic and military construction bills.
Note: Unexpended balances for revolving funds, trust funds, and unfunded contract authority are excluded from this table.
As shown above, an estimated $97.5 billion balance of unexpend-
ed funds was carried into fiscal year 1982 pertaining to the appro-
priation accounts provided for in the accompanying bill. Of this
amount, about $76.2 billion (unliquidated obligations) represents
legally binding documents calling for ultimate cash payment such
 as contracts for ship, aircraft, or missile construction. (Such major
weapons systems are normally funded even though deliveries may
not occur for 2 or 3 years, or 5 years in the case of capital ships.)
Approximately $21.3 billion of the carryover (unobligated) bal-
ances represents amounts which are made available to fund ap-
proved programs, but which are not yet obligated in the technical
legal sense. By and large these funds are committed to the pro-
grams for which initially appropriated awaiting the completion of
the contracting or other legal prerequisites of obligation.
CHANGES IN APPLICATION OF EXISTING LAW
Pursuant to Clause 3 of Rule XXI of the House of Representa-
tives, the following statements are submitted describing the effect
of provisions which directly or indirectly change the application of
existing law. Regarding the Defense Appropriation Bill, the Com-
mittee set forth its interpretation of this rule in House Report No.
94-517. That report pointed out that numerous portions of the bill
are technically "legislation" but these provisions have been en-
acted virtually unchanged for many years. For the benefit of the
Members of the House, the Committee is restating the position
taken in House Report No. 94-517:
There have been several interpretations of the new rule
and specifically the phrase, "directly or indirectly changes
the application of existing law." Numerous portions of this
bill, which have been virtually unchanged for many years,
are technically "legislation". To read the new rule as re-
quiring that each of these items be described in the report
would result in a catalogue of items not significantly more
informative than the bill itself. This list would be almost
the same, year in and year out. In such a listing new items
would be lost among the reenacted provisions and the
elimination of long standing items would not be mentioned
at all, even though the effect would be significant.
The proper interpretation, which the committee believes
to be more in accordance with the understanding of the
intent of the new rule, requires a description of that "legis-
lation" in the fiscal year 1976 bill which is different from
the existing currently effective language of the fiscal year
1975 act and hence "changes the application of existing
law." This has been the practice of the Appropriations
Committee for many years and appears to be the type of
reporting to which the sponsor was referring in his floor
statement:
"The Committee on Appropriations regularly puts such
a statement in the Committee on Appropriations bill re-
ports, and it does not strike me this is going to constitute
an undue burden."
This method will provide Congress with a clear state-
ment every time any change occurs which might be consid-
ered legislation by inclusion of a new provision, or a sig-
nificant change in a legislative provision in the previous
appropriations act.
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Those changes in the fiscal year 1982 bill, which might be inter-
preted as changing existing law, are as follows:
APPROPRIATION LANGUAGE
1. The proviso has been deleted from the account "National Board
for the Promotion of Rifle Practice, Army." This allows the paid
subsistence and travel allowance for personnel participating in
national rifle matches to revert back to the existing law which
provides for a total -of $1.50 per day for subsistence and five cents a
mile for travel.
2. Words have been added to Other procurement, Army, which
would permit the purchase of vehicles for physical security not-
withstanding the price limitations applicable to passenger carrying
vehicles. These vehicles are restricted to 14 at a cost not to exceed
$100,000 per vehicle.
3. Section 708 has been revised (A) to permit the Department of
Defense to make payments for depot maintenance contracts for
twelve months beginning at any time during the fiscal year; (B) to
permit payment of unusual cost overruns incident to ship overhaul,
maintenance, and repair for ships inducted into industrial fund
activities or contracted for in prior fiscal year provided that the
Secretary of Defense notify the Congress prior to obligation of any
such payment; and (C) to permit payments from annual appropri-
ations to industrial fund activities and/or under contract for
changes in scope of ship overhaul, maintenance, and repair after
expiration of such appropriations, for such work either inducted
into the industrial fund activities or contracted for in that fiscal
year.
4. Section 723 has been revised to prohibit the military clothing
sales stores from selling optional uniform items obtained from
foreign firms.
5. A proviso has been added to Section 741 which would permit
personnel who have separate health insurance which would pay 75
percent of nonemergency inpatient health care to utilize CHAM-
PUS for the other 25 percent instead of seeking .a waiver for not
utilizing military medical facilities if within a 40 mile radius of the
patient's residence.
6. A section contained in last year's bill which prohibited the
implementation of the Competitive Rate Program for transporta-
tion of household goods to and from Alaska and Hawaii was de-
leted.
7. Section 752 has been amended to allow funds appropriated for
the CIA Reserve to remain available until September 30, 1983.
8. Section 757 has been revised to prohibit federal funding of
abortion except where the life of the mother would be endangered
if the fetus were carried to term.
9. The budget proposed new language which would prevent
paying for an increased salary based upon a teacher having ob-
tained an educational level of fifteen additional hours of education
beyond a bachelor's degree. This language is included as Section
769.
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12
1O.:The budget dget proposed new language which~would imposeja~4.8
percent pay cap on the teachers in the system during the school
year 1981-1982. This language is included as Section 770.
11. The budget proposed new language which would prevent an
adjustment in teachers' pay in excess of 4.8 percent for August and
September 1981. The language as amended to , include August
through December is included as Section 771..
12. Section 772 has been added to insure the. full participation of
the Appropriations Committees in decisions to initiate multiyear
contracts for major weapons systems.
13. Section 773 has been added to eliminate the loopholes in the .
language contained in the FY 1981 supplemental act which pre-
cludes funds appropriated from being available to reimburse de-
fense contractors for the cost of commercial insurance which would
cover the cost of correcting the contractors' own defects in materi-
als and workmanship incident to the normal course of construction.
14. Section 774 has been added to permit full reimbursement of
subsistence expenses to enlisted personnel in a travel status while
prohibiting double payment for the same expenses.
15. Section 775 has been added which would round military
retirement service credit to the nearest month for any portion of a
year in excess of six months.
16. Section 776 has been added which would limit rental reim-
bursement to the General Services Administration to 50 percent of
the Standard Level User Charge.
17. Section 777 has been added which would exclude the 5.2,
percent active duty catch-up raise from the base for calculating
military retired pay.
18. Section 778 has been added to limit the pay of guard and
reserve-technicians to $50,112 annually. This is the same level at
which all other government employees are capped.
19. Section :.779 has been added which would require the Depart-
ment of Defense to notify the Appropriations Committees before
they waive RDT&E or other costs related to a foreign military sale.
20. Section'! 780 has been added to prohibit an employee who has
been working in Alaska or Hawaii and who is transferred or reas-
signed to the United States from continuing to receive the higher
Alaska or Hawaii pay rate for two additional years.
21. Section ' 781 has been added to prohibit giving foreign nation-
als priority over United States citizens living in a foreign country
in filling vacant positions.
22. Section' 782 has been added to insure two additional division
sets of Army equipment will not be placed ' in storage in Europe.
23. Section 783 has been added to prohibit the operation of the
Army Medical Intelligence and Information Agency after Septem-
ber 1, .1982.
24. Section 784 has been added to insure that the status quo is
maintained with respect to the Department of Defense dependents
school system pending Congressional action on the proposal to
repeal the transfer of the system to the Department of Education.
The provision would prohibit funding of the activities of the Advi-
sory Council on Dependents' Education.
25. Section 785 has been added to insure that the Secretary of
Defense is charged to administer the funds provided for operation
of section 6 schools.
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26. Section 786 has been added to allow wage board employees in
the Wichita, Kansas, area to have their wages fully updated after
the current wage survey is completed. There is some indication
that due to a previously incomplete wage survey, rates paid to,
government employees in this area are somewhat below prevailing
rates.
27. Section 787 has been added to permit the Department of,
Defense to lease no more than six aircraft as suitable replacements
for the C-140 aircraft.
28. Section 788 has been added to prohibit the transfer of any
ri article of military equipment or data related to the manufacture of
such equipment to a foreign country prior to the approval in writ-
ing by the Secretary of the service concerned.
29. Section 789 has been added to restrict funds made available
for the Single Manager for Conventional Ammunition to be used
only for implementation of phase II under a reissued Department
of Defense Directive 5160.65, after January 1, 1982.
30. Section, 790 has been added to prohibit the purchase of ad-
ministrative motor vehicles that are manufactured outside the
United States or Canada unless the contractor was selected
through competitive bidding without a price differential.
31. Section 791 has been added to require notification of Appropri-
ations Committee for any transfer of funds between Department of
Defense and Central Intelligence Agency for activities different from
that previously justified to the Congress.
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 TITLE I
MILITARY PERSONNEL
ESTIMATES AND APPROPRIATION SUMMARY
Virtually every activity of the Department of Defense and mili-
tary services requires both military and civilian personnel as well
as support funding. Therefore, many of the actions taken in the
military personnel appropriations affect the operation and mainte-
nance appropriations and vice versa. In most instances, the interre-
lationships between the two appropriations are identified where
applicable.
Appropriations made under this title finance the programs iden-
tified briefly below:
Pay and Allowances.-Funds are provided for the pay and allow-
ances of active duty officers and enlisted personnel, and cadets at
the military academies. Pay and allowances include basic pay;
incentive pay, special pay to physicians, dentists, veterinarians,
divers, and others; basic allowances for quarters and subsistence;
station allowances overseas; uniform and clothing allowances; sepa-
ration payments; social security contributions; and enlistment and
reelistment bonuses.
Subsistence of Enlisted Personnel.-Funds are provided for the
feeding of enlisted personnel, including both the basic allowance
for subsistence and subsistence-in-kind.
Permanent Change of Station Travel.-Funds provide for perma-
nent change of station travel for military personnel, either as
individuals or as organized units, including transportation; per
diem allowances; travel of dependents; transportation of household
goods; port handling charges; dislocation allowances; nontemporary
storage of household goods; minor supplies and services incident to
organizational movement; expenses of separation travel; temporary
duty directly related to permanent change of station; and junior
enlisted travel entitlements.
Other Military Personnel Costs.-Funds are also provided for
other military personnel costs which include apprehension of mili-
tary deserters, interest on personal savings deposits, Servicemen's
Group Life Insurance and death gratuities.
The accompanying bill provides $37,447,290,000 for military per-
sonnel costs in fiscal year 1982 a decrease of $1,212,470,000 from
the budget estimate of $38,659,760,000. The amount recommended
for fiscal year 1982 is $575,090,000 more than the $36,872,200,000
appropriated in fiscal year 1981 including the fiscal year 1981
supplemental appropriations but excluding projected supplemental
requests for fiscal year 1982.
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15
PERMANENT CHANGE OF STATION (PCS)
WASTE, FRAUD AND ABUSE
In fiscal year 1982, the Department of Defense will spend ap-
proximately $3 billion on movement of military personnel and
their household goods from one duty assignment to another. With a
projected force of 2.1 million military personnel, the Committee
estimates that on average the Department will move two out of
every three of these personnel on a permanent change of station
move during the course of the year. This excludes changes in
assignments at a given installation and includes only those person-
nel that must pack up their household goods and families and
move from one station to another.
The Federal Government spends almost $4 billion a year on
travel. Of that amount, 65 percent will be spent by the Department
of Defense of which approximately 30 percent is for personnel
permanent change of station costs alone. According to a letter
dated July 30, 1981, sent by the President to the heads of executive
departments and agencies, "although most of this travel is required
to carry out agency programs, instances of mismanagement and
wasteful spending have continued to surface over the years." The
Committee estimates that the management changes directed by the
President will save $40 million in fiscal year 1982 and has there-
fore included a reduction in that amount.
The Committee believes that the President's estimated $40 mil-
lion in savings is much less than is feasible through better manage-
ment procedures. For example, the Department of Defense's own
audit services document that-
Carriers suspended for poor performance are still awarded
contracts;
Erroneous and duplicate obligations are made on the books;
Claims for reimbursement are not always made against non-
performing carriers;
Shipments are not weighed by DOD personnel as called for
in their own regulations;
There is poor utilization of Government facilities for storing
household goods at a time when additional storage facilities
are being procured through commercial markets;
Personnel are sent back to the United States from overseas
tours with only one or two months left before leaving the
service; and
Realignment of personal property shipping offices would pro-
duce substantial savings through elimination of duplication.
The Committee estimates that correction of these clear manage-
ment deficiencies would produce enormous savings. However, the
Committee is only making an additional token reduction of $15
million in fiscal year 1982 as a first increment of savings that is
expected to accrue.
The Department of Defense submits the budget to Congress ap-
proximately nine months before the beginning of the fiscal year. As
a result, the budget contains a number of projections that may or
may not be entirely accurate. In the case of permanent change of
station costs, the numbers included in the fiscal year 1982 budget
for fuel and carrier rates will be less than projected. As a result, an
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 additional $40.7 million in savings is available and a reduction is
recommended in that amount.
Every year the Committee inquires during hearings on military
personnel PCS requirements as to the true need to have two out of
every three military personnel make permanent duty changes
every year. The problem is compounded in these hearings by the
very fact that so many of the Generals and Admirals appear one
year at the Committee's hearings only to be replaced by someone
different the following year. The Committee has calculated that
this movement of personnel is so pervasive that 41 percent of the
Department of Defense's Generals and Admirals move from one
town to another every year even when excluding from this total
those that move as a part of their retirement from military service.
Moreover, internal Navy documents state that fleet morale could
be drastically improved and a ten percent savings could be pro-
duced by implementing an aggressive program called "Home Port-
ing" whereby the Navy makes a commitment to return sailors for
their periodic shore duty to the same town. The Committee is
therefore deleting a total of $74.5 million from the Permanent
Change of Station request and directing that the Department im-
plement during fiscal year 1982 a plan to reduce the number of
PCS moves by at least two percent with a goal of reducing the
number of moves eventually by five percent.
The Committee believes that the total of all of the above reduc-
tions of $170.2 million is reasonable in view of the $3 billion re-
quest and the potential for vast savings through reduced moves
and improved management as documented by the Department of
Defense itself.
Less than four months ago, the PCS mileage reimbursement
approximately doubled, increasing from 70 to 13? per mile. The
Department of Defense is now requesting that it be increased to
160 per mile at an additional cost of $46.3 million in fiscal year
1982 alone.
The Committee has reviewed the justification for DoD's increase
of 16? per mile and has concluded that 130 remains the maximum
amount necessary to fully reimburse military personnel for incre-
mental expenses incurred in operating their personal vehicles
while undergoing a permanent change of station move. In fact,
much of the supporting material that the Committee has received
from the Pentagon is misleading in terms of what is a fair reim-
bursement level. Contrary to information provided by DoD:
According to the American Automobile Association, the cost
to operate a six cylinder vehicle is only 8.2~ per mile..
Civilian government employees undergoing a permanent
change of station move are reimbursed at a rate which begins
at only 80 per mile.
Internal Revenue Service estimates 9~ per mile as a fair
expense for charitable or medical expenses.
IRS estimates that business activity deductions range from
110 to 204 per mile.
The proposal by the Department would permit such expenses as
insurance and interest on car loans to be included as an "operating
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expense" incurred while undergoing a change of station move. This
is clearly not the case since these expenses would be incurred
whether the military member changes duty stations or not. In most
cases, even licenses and taxes will not change since most military
members do not change their home of record nor licensing of
automobiles when undergoing a permanent change of station move.
Finally, the argument for allowing full depreciation on a mileage
basis is not fully justified since the AAA documentation supplied
by the Department of Defense assumes all people undergoing a
permanent change of station move are driving brand new cars.
The Committee is therefore deleting the $46.3 million requested
in the budget and directing that the reimbursement rate is to be no
more than 130 per mile. The Committee also directs that the
Department establishes a formula which will equitably reimburse
military personnel with full recovery of all gas and oil, mainte-
nance, tires, an equitable portion of license and taxes, and an
equitable portion of depreciation not to exceed 50 percent of the
full amount of depreciation which would be allowed if all personnel
were driving brand new cars.
The Army has agreed that the budget request for Temporary
Lodging Allowance is overstated by $14.0 million. The Committee
has, therefore, included a reduction in that amount.
WASTE, FRAUD, AND ABUSE
Since the founding of the Republic one of the major benefits to
military personnel has been the Government's commitment to pro-
vide an adequate level of subsistence for the troops. Historically
this has taken the form of food-in-kind, but in more recent years
due to changes in both life styles and military requirements there
has been a shift to cash payments in lieu of food for many military
personnel. In fiscal year 1982 (including the recent military pay
increase), the Committee estimates $2.6 billion will be spent for all
types of subsistence support for military personnel. As a basis for
comparison, it would take roughly all of the receipts to the Treas-
ury for taxes on either tobacco or airports and airways just to fund
the military subsistence program for the year.
Because of the size of this program and the reductions made to
other agriculture and food subsidy programs for fiscal year 1982, it
is incumbent upon the Department of Defense to insure that the
military subsistence program is properly managed at all levels of
the Department of Defense. It was therefore with great concern
that the Committee reviewed 17 different Department of Defense
audit reports published within the last year and a half that docu-
ment a total of at least $100 million in subsistence that is lost
through waste, fraud and abuse. These audits document thievery,
poor control of mess passes, poor mess hall head counting, foreign
national personnel not being charged for food eaten, excessive sub-
sistence stockage, free issuance of flight meals to unentitled person-
nel, excessive number of dining facility attendents, and inadequate
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 dining facility cash control procedures. The Committee is con-
cerned not only over the exceedingly poor management, but also
over the clear lack of strong enforcement procedures rectifying
these instances of documented poor management and even illegal-
ities by Department of Defense personnel and contractors. The
Committee expects strong enforcement measures to be implement-
ed, and directs the Department to submit a report no later than
April 30, 1982 which lays out a clearly defined plan to reduce the
number of instances of waste, fraud and abuse in the subsistence
area and also the number of arrests and prosecutions under way as
a result of strong enforcement measures.
Traditionally, the year during which military personnel receive
large pay raises there is a decrease in military mess hall attend-
ance as personnel decide to (and are more able to) eat out on the
local economy. In addition, a strong dollar overseas traditionally
represents a decrease in mess hall attendance since a stronger
dollar translates into a real increase in income for military person-
nel assigned to foreign installations. Nevertheless, the Department
of Defense has not budgeted properly to reflect this decrease in
mess hall attendance which will most certainly occur during fiscal
year 1982 resulting in a significant overstatement of the budget
request.
Every year thousands of military personnel eat in dining halls of
other services. This occurs commonly through joint use of facilities
as well as military personnel of one service traveling to an installa-
tion of another for business purposes. Despite the fact that a
member of, say, the Air Force eating at an Army installation
would be eating the same portions side by side with his fellow
enlisted personnel from the Army, the Army has budgeted more
funds for feeding the member of a different service than they have
for their own personnel. Under questioning by the Committee the
Army admitted that it costs no more to feed a member of a differ-
ent service in one of its mess halls than it does to feed one of its
own members and therefore the budget submission for this particu-
lar item of subsistence is overstated.
Two years ago the Committee made an extensive review of DoD's
subsistence budgeting procedures and concluded that the current
system is illogical at best since actual consumption plays no part in
the budget estimate. In the fiscal year 1980 report on the Defense
budget request, the Committee reached the following conclusions:
Enlisted military personnel are entitled by law to re-
ceive a nutritionally adequate ration as part of their over-
all compensation package. To implement this entitlement,
the Department of Defense provides each dining facility
manager a dollar credit to be used to order the necessary
subsistence items based upon the number of meals served.
It appears that the present system works in reverse to
what sound economic principles would dictate. For exam-
ple, a dining hall may be allowed a $3.25 ceiling per day to
buy food per person. If that ceiling is not reached, the
dining facilities receive the money anyway and must find
ways to spend it.
To establish this fixed ceiling amount, called a Basic
Daily Food Allowance (BDFA), DoD has a list of 53 key
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food components that are priced monthly. If the price of
boneless grilled steak beef is increased by 5 cents, the
allowance would be increased on a per person basis from,
say, $3.25 to $3.30 a day. If the price went down 5 cents, it
would be decreased accordingly. The fallacy with this
system, however, is that there is no incentive to substitute
less costly items when there is an increase in another
item-for example, substitution of ham or fish for beef
until there is a future price realignment. This is what an
individual would do typically in a supermarket. DoD does
not do that, but instead budgets for the full price increase
and does not take into account substitution of cheaper, but
equally nutritious, items.
The Committee has also learned that when an individu-
al dining facility manager prepares meals and orders the
necessary food, the BDFA (which provides the basis for the
entire subsistence budget request) plays absolutely no part
in his food planning decision. Moreover, some overseas
activities are not even authorized to purchase some of the
BDFA items used in preparing budget requests.
The Committee believes that the lack of use of substitu-
tion in the subsistence budgeting process, as well as the
lack of relationship between program execution and pro-
gram budgeting leads to a higher food bill.
As a result of the documented waste, fraud, and abuse; the
misestimation in some of the categories of the budget justification
material; as well as a lack of a logical and coherent budgeting
procedure; the Committee is deleting $100 million in savings that is
possible through correction of these problems without adversely
impacting on the subsistence entitlement. The Committee is also
directing the Department of Defense to present a plan no later
than March 31, 1982 to the Committee which provides a mecha-
nism for the budget submissions for fiscal years 1983 and beyond to
be based upon a fixed and firm relationship between dollars re-
quested and the final distribution of those dollars in terms of
actual consumption.
DEFENSE ENROLLMENT ELIGIBILITY REPORTING SYSTEM (DEERS)
~- The revised fiscal year 1982 budget request for the DEERS pro-
gram includes $15,109,000 of operation and maintenance funds and
$1,021,000 of other procurement funds, for a total of $16,130,000.
Since 1979 the Committee and the Senate Appropriations Commit-
tee have encouraged a schedule which would speed up implementa-
tion of the DEERS system in view of the wide-spread and docu-
mented abuse of eligibility in DoD food service and medical facili-
ties.
The Defense Enrollment Eligibility Reporting System has recent-
ly completed its second year of implementation. As of September
30, 1981, the eligibility data base being created contained over 6
million beneficiaries, about 4 million sponsors and 2 million de-
pendents. With funds made available for the fiscal years 1981 and
1982, the Committee is hopeful that total enrollment will be accom-
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plished during fiscal year 1982 for CONUS based eligible benefici-
aries.
NEW IDENTIFICATION CARD IMPLEMENTATION PLAN
During fiscal year 1982 the Department of Defense will be con-
ducting a six-month pilot program (prototype test) of a new ID card
in selected military installations in North Carolina and Virginia.
The fiscal year 1982 request includes $12.1 million for implementa-
tion of the new ID card program. The Committee recommends that
the Secretary insure that this new ID card system is tied to the
Defense Enrollment Eligibility Reporting System for eligibility ver-
ification and checking purposes and that DEERS and the new ID
card are closely interfaced to insure desired efficiencies and econo-
mies. It is expected that these two integrated systems will enhance
the Department of Defense's ability to plan for and manage re-
sources for the different benefit programs and, simultaneously,
curb the fraudulent use of these benefits by ineligible persons. The
Committee recommends that budgeting for the DEERS system and
the new ID card system be maintained as separate accounts.
Various reports made available by the General Accounting Office
and the Defense Audit Agency have identified gross abuses in the
current identification system and have recommended issuance of a
tamper-proof card with emphasis placed on improving control and
the accountability measures. GAO and the Defense Audit Agency
have identified large losses in areas such as food service ($100
million) and medical care ($50 to $60 million) per year. To stop
losses in these and possibly other areas, a more secure ID card with
a ready means for validation of entitlements is absolutely essential.
This system should interface with the Defense Enrollment Eligibil-
ity Data Base -to determine medical eligibility, it should interface
with food service, the service pay system, and other systems that
require using verification of eligibility of benefits such as commis-
saries, exchanges, military clubs and messes. It is obvious that the
cost of implementing this new identification system will be offset
by a reduction of losses through the use of invalid cards to obtain
services, goods, and privileges from commissaries, exchanges, and
medical facilities.
CAREER BASIC ALLOWANCE FOR SUBSISTENCE (BAS)
The Department of Defense has proposed a new program for
fiscal year 1982 called Career BAS which would provide cash in-
stead of subsistence-in-kind to all E-5 and above not otherwise
entitled to a cash payment. This would clearly begin a reversal of
the traditional thrust of military compensation which has been
that quarters and subsistence are entitlemel, is-in-kind and to the
extent that these cannot be provided a cazh allowance is paid
instead. The Department proposal in essence makes cash,in lieu of
subsistence-in-kind the entitlement for all enlisted personnel E-5
and above.
In requesting Committee approval of this program the Depart-
ment has stated that providing free food instead of an allowance is
a "penalty" which is "essentially a reduction of basic compensa-
tion." This justification continued that "these personnel, who
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occupy troop housing, have received only a small portion of the
recently enacted compensation benefits." The Committee does not
understand how pay raises of up to 30 percent in only a twelve
month period can be interpreted as a small portion of the increased
compensation benefits. Furthermore, it is difficult to understand
how providing high quality free food can be considered a reduction
in compensation. The Committee is also very concerned over the
fact that if Career BAS is implemented, fewer NCO's will be eating
in the dining halls which will further erode the interaction be-
tween NCO's and junior enlisted personnel. The Committee be-
lieves that there is already a vacuum of leadership in the middle
enlisted ranks and that such a step would further erode unit integ-
rity. The Committee is therefore deleting the full $34.8 million for
this, new program.
The Army budget justification material reflects real growth of
$2.7 million for troop issue subsistence. In view of the President's
budget admendments of September 1981, there is no growth in the
strength of the Army and therefore no basis for real growth in
troop issue subsistence. Moreover, when the Committee inquired as
to the need for real growth in this area the Army responded with a
justification that indicated the money would clearly not be going
for the purposes for which requested anyway. The Committee is
therefore deleting the entire $2.7 million in real growth.
In fiscal year 1982, the Army and Marine Corps reflect a phase-
in of the Meal, Ready to Eat (MRE) ration and the phase-down of
the Meal, Combat, Individual (MCI) Ration. The price of the MRE
is roughly twice the cost of the MCI without substantial differences
in the calories, fat content, etc. According to the information pro-
vid'ed by the Department the price is nearly doubling for the new
ration because the thermostabilizing retort technology used in
MRE production is extremely advanced and does not have a broad
production base in the American food processing industry to date.
However, the Committee was also advised that U.S. commercial
manufacturers will be switching to this technology in two to five
years.
Because there is no clear or compelling need to begin procure-
ment of the MRE in fiscal year 1982, the Committee is reducing
the budget by $3.5 million and directing the Department to slow
the procurement of this new ration until the technology is availa-
ble in the American food processing industry at which time the
price should be roughly comparable to the old MCI.
The military compensation system provides a cash allowance to
officers in lieu of providing subsistence-in-kind while enlisted per-
sonnel may receive either subsistence-in-kind or a cash allowance
when subsistence-in-kind is not available. For fiscal year 1982 the
subsistence allowance for officers is only $94 per month while
enlisted personnel who do not have subsistence-in-kind available to
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them will receive $153 per month. Because enlisted personnel re-
ceive substantially higher subsistence allowance payments than
officers, the Committee has not objected in previous years to the
practice of paying officers both their basic allowance for subsist-
ence and that portion of the per diem allowance designated for food
when traveling on government business.
Because of what was perceived in some quarters to be a "per
diem inequity", the Uniformed Services Pay Act of 1981 extended
to enlisted personnel the same entitlement to receive both a sub-
sistence allowance and the food portion of per diem simultaneously.
The Committee does not believe that this "inequity" is a real one
but is rather attributable to the confusing complexity of military
pay and allowances which permits enlisted personnel to be paid
over 60 percent more for subsistence than an officer. Because en-
listed personnel receive either subsistence-in-kind or a large cash
payment, the Committee does not believe it is equitable in any
sense of the word to pay that portion of the per diem allowance for
food in full-in essence fully compensating enlisted personnel twice
for the same food expense. As a result, the Committee is including
a general provision in the bill which would limit enlisted personnel
traveling under government orders to either the subsistence allow-
ance or that portion of the per diem specified for food, which ever
is greater. The Committee believes that this will insure the per
diem payment is equitable for enlisted personnel in terms of the
expenses incurred for food. The Committee has continued for offi-
cers the traditional payment of that food portion of per diem in
addition to the subsistence allowance since officer subsistence al-
lowance payments are substantially less than those of enlisted
personnel.
The Army request overstates the requirement to support Korean
personnel assigned to duty with the U.S. Eighth. Army. The Com-
mittee is therefore deleting $100,000.
SKILL QUALIFICATION TEST (SQT)
For several years the Committee has made reductions to the
Army Skill Qualification Test because of repeated findings by the
General Accounting Office and Army auditors that the test does
not measure what it was intended to measure, that personnel have
consistently high failure rates, and that unit commanders make
poor utilization of test results for planning training.
Based upon an ongoing review of this program by the GAO, the
Committee has reluctantly concluded that the SQT is completely
ineffective and has therefore deleted the entire $40.0 million in-
cluded in the budget. While the concept of using an objective test
to support personnel decisions is sound, the SQT has clearly proved
not to be the proper test. The Committee .believes that any such
test can only be one of several tools available to the experienced
NCO and unit commander to plan meaningful unit training and to
make decisions on individual promotions and assignments. The
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Army should review the policies of the other services in this area
before proposing a replacement for the SQT to ensure that. a new
test is designed to complement, not replace, the judgment of the
NCO's and commanders in the field.
DUPLICATE LEADERSHIP TRAINING
Based upon an extensive review by the Defense Audit Service,
the Committee believes that all three military departments to some
extent provide duplicate leadership training. For example, the
Army sends soldiers to NCO Academies too early before eligibility
to promotion to NCO rank. Many, therefore, leave the service after
receiving this training long before they are even in a position to
need it. The Air Force sends personnel to out of town locations for
training even though the course is offered at the individual's home
base. The Navy sends some individuals to both local courses and
centralized formal courses which are nearly identical.
.The Committee therefore believes that a reduction of $9.7 million
in fiscal year 1982 is possible to improve management of leadership
training without reducing this important effort.
RESERVE OFFICER'S TRAINING CORP (ROTC) PAYBACK
In a report published by the Department of Defense it is revealed
that over the past several years the military services have recruit-
ed sufficient numbers of qualified students into the ROTC program
but have been unable to retain them. As the report indicates,
attrition is excessive particularly after the sophomore year for
four-year scholarship students. The Defense Department has indi-
cated that almost one-half of all ROTC attrition occurs then, and
two-thirds of it is voluntary. In other words, ROTC scholarship
students decide to leave the program before they enter their junior
year and incur an obligation to serve in the armed forces.
When students in their junior or senior years drop ROTC, they
are breaching a contract and a specific remedy is available to the
federal government in terms of ordering the student to active duty
as an enlisted person. However, in recent years the Department of
Defense has been reluctant to use this option with the stated
reason that "it singles out ROTC students by involuntarily requir-
ing them to serve on active duty as enlisted in an otherwise volun-
teer force." The Committee believes that ROTC students have
indeed volunteered since they have been accepting federal subsidies
for their education. The Department is therefore directed to order
to active duty as an enlisted person every obligated ROTC student
who withdraws. The Secretary of Defense, of course, should retain
the authority to waive the involuntary ordering of ROTC students
to active duty for clear cases of physical or mental disability, moral
unfitness, and so forth. Although ROTC students who drop out are
under no obligation to reimburse the Government for expenses
incurred, the Secretary of Defense should take into consideration if
the student has made a voluntary payback to the Treasury of the
United States for the ROTC costs incurred.
The Committee is also concerned that college students take ad-
vantage of ROTC scholarships for their freshman and sophomore
years and voluntarily drop out before beginning the junior year
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and incurring an obligation to serve. The Committee is therefore
directing that beginning with the 1982 fall collegiate term, all
freshman and sophomore ROTC scholarship recipients must ex-
ecute an agreement with the Department of Defense to join a
guard or reserve unit with the stipulation that participation in
drills is waived while serving in the ROTC program. In the event
that a freshman or sophomore scholarship recipient voluntarily t
drops out, the Secretary of Defense is directed to make arrange-
ments for that individual to begin drilling with a guard or reserve
unit near to that individual.
In fiscal year 1982 the Army plans to add one week to the basic
and, one station unit training programs. While the Committee sup-
ports the Army's efforts to improve its individual training of sol-
diers prior to assignment to units, the Committee is concerned that
the Army is not applying sufficient manpower resources to make
the increase in training effective. For example, for the initial entry
training program the General Accounting Office reports that the
Army training program had approximately 1,000 fewer instructors
assigned than was required even prior to the week extension in
training. For fiscal year 1982, the first year of the extension, the
Army has only approved an increase of 888 additional staff while
the General Accounting Office indicates that 1,200 additional staff
are required for the program. In other words, the Army is adding
insufficient staff to support the training even at the old level,
shortchanging the training program by nearly 1,400 instructors
and support personnel.
The Committee is also concerned that the GAO has reported that
Fort Knox data showed that trainers had to operate at about 74
percent strength of the E-6's and E-7's required. At Fort Leonard
Wood there was only a 58 percent fill in infantry training posi-
tions. Moreover, the GAO has reported to the Committee that
during a recent test, drill sergeants in the basic training brigade at
Fort Knox were not able to pass the end of course test given to new
recruits.
The Committee believes that improving the Army's readiness is
substantially dependent upon improving the quality of its training.
This, however, cannot be accomplished without dedicating the nec-
essary manpower resources to the training establishment. The
Committee is therefore requesting that the Army report back to
the Committee by March 31, 1982 the steps being taken to fully
man the training establishment to the required level in accordance
with the new extended syllabus.
NAVY TRAINING BACKLOG
The average number of Navy enlisted personnel awaiting entry
into "A Preparatory" and "A" schools increased to a level of more
than 5,000 in fiscal year 1981. Some of these personnel are waiting
8 weeks or more to start courses which begin weekly. The Navy
has estimated that it is only necessary to have a maximum pipe-
line of 2,951 Navy students awaiting instruction at any time.
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Recently, the Navy has implemented several measures intended
to reduce this backlog including (a) manning 229 authorized in-
structor billets in those courses with extensive student backlogs, (b)
authorizing an additional $11.1 million in fiscal year 1982 to hire
civilian instructors for some "A Preparatory" and "A" school
courses, and (c) reducing the input into the "A" schools by not
3 classifying into backlogged courses recruits who were not enlisted
with school guarantees.
It is uncertain whether these measures and many others being
considered by the Training Command Manning Task Force-spe-
cifically set up to address the backlog problem-will achieve the
Navy's objective of reducing the backlog to 2,951 by July 1982. For
example, the Navy's current commitment given to instructor man-
ning has not been formalized to guarantee 100 percent manning
through July 1982 and thereafter. Also, there is no assurance that
the current Commitment will extend to related training billets such
as school support and the integrated training battalions which
commanding officers often use interchangeably. In addition, school
throughput in excess of 100 percent of the fiscal year 1982 training
plan is needed to reduce the backlog and a commitment to exceed
the plan has not been approved. Finally, consideration to reducing
input to the fiscal year 1982 training plan for courses with an
extensive backlog has not been a Navy option for addressing the
backlog problem.
The Committee believes that a long-range commitment by the
Navy toward manning the schools at 100 percent is required. This
would include manning not only instructor billets but also the
related training billets such as school support and the integrated
training battalions.
The Navy is requested to report to the Committee by April 30,
1982 as to the progress being made in reducing the substantial
backlog.
The Navy is requesting an increase of $600,000 for continued
development and implementation of an executive development pro-
gram for senior executive service personnel. This growth is in
addition to several hundred thousand dollars of growth provided
last year for this effort. In response to the Committee's request for
additional justification it was stated that "while there is a rich and
varied degree of executive and management development and
training throughout the department, it is uneven in quality be-
cause commands have operated in a policy vacuum." The Commit-
tee does not understand the need for this funding or the occurrence
of a "policy vacuum" since in recent years the Navy has estab-
lished a new Deputy Assistant Secretary for Civilian Personnel
Policy with several supporting offices. In addition, the Chief of
Naval Operations has on his staff a branch entitled "Personnel
Development" with additional supporting staff below it whose re-
sponsibility it is to provide . overall policy in this area for the
Department of the Navy as a whole. The Committee is deleting the
$600,000 growth requested and suggesting that if such a "policy
vacuum" exists, the Navy may wish to disestablish these offices
and use the savings for additional training support.
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AIR FORCE ACADEMY FOOTBALL STADIUM PA SYSTEM
The budget requested $100,000 for upgrading the PA sound
system at Falcon Stadium at the Air Force Academy "because
some spectators complained that they have difficulty hearing while
others complain that it is too loud." The Committee is deleting the
requested increase of $100,000 and recommending that the millions
of dollars in gate receipts available from the football games be used
for this effort.
ARMY CONTINUING EDUCATION SYSTEM
In fiscal year 1982 the Army is requesting $128 million for the
Army Continuing Education System (ACES). Since 1979, the fund-
ing requested has doubled, but the number of soldiers being sup-
,ported has only increased by three percent. Moreover, the Army
has been increasingly recruiting personnel in the higher mental
categories with high school diplomas which should lessen the need
for additional counselors and basic high school training programs.
The Committee is therefore recommending a reduction of $16 mil-
lion which will still provide substantial growth over the fiscal year
1981 level of $97 million.
Last year the fiscal year 1981 justification material indicated
that $2.1 million requested for Navy training was for costs to be
incurred on a one-time basis in fiscal year 1981. In reviewing the
fiscal year 1982 request, there is no reduction reflected to offset the
one time fiscal year 1981 cost which will no longer be incurred. The
Committee is therefore recommending a reduction of $2.1 million
in fiscal year 1982 to reflect the offset which should have been
budgeted.
ARMY "LIFE COPING SKILLS"
The Army is requesting an increase of $8.6 million in fiscal year
1982 for what is termed "life coping skills". According to the Army
these "skills" which must be taught include dealing with others,
civic responsibilities, coping with personal problems, and so forth.
The Committee has deleted the entire $8.6 million since it is not
clear as to how these funds will be specifically used to improve
military readiness, especially in light of the fact that the majority
of the funds appear to be for developing a curriculum rather than
to meet specific needs of military personnel.
The Committee traditionally includes a general provision in the
Appropriations Bill specifying a maximum amount (in most cases
75 percent) that the Department of Defense can pay for tuition
assistance for off duty education programs. In addition, this gener-
al provision requires that all officers undergoing such training
must agree to continue on active duty for a specified amount of
time after completion of the training. According to audit reports by
the Defense Audit Service and the Air Force Audit Agency, both
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the Navy and the Air Force are not fully complying with the intent
of this general provision.
The Committee is therefore recommending a reduction of $2.0
million which will be saved by proper application of the restric-
tions of the general provision contained again in this year's bill.
The Navy and the Air Force are reminded that the general provi-
sion applies to all appropriations contained in this act regardless of
which program elements the funding may be included within. To
the extent that exceptions are deemed necessary, the appropriate
request should be made during the budget cycle.
As a result of a decrease in the number of accessions planned for
Navy recruit training since the budget was submitted last winter,
the Committee is recommending a reduction of $400,000 for support
costs which will not now be incurred.
The Committee has fully supported the Army's efforts to provide
dynamic leadership training for non-commissioned officers. Howev-
er, in the fiscal year 1982 budget request the Army is showing
substantial real growth for NCO academies in Europe at a time
when the Army is attempting to level off the NCO manning in
Europe in order to man more fully the units in the United States.
The Committee is therefore deleting $.8 million from the $3.6 mil-
lion in growth requested in the fiscal year 1982 budget request
based upon a lack of documented requirement for new NCO's in
Europe.
The Navy has requested funds in the fiscal year 1982 budget to
pay for tuition, books, fees, and pay and allowances for students
attending their senior year of college majoring in a science or
engineering curriculum. Because this program appeared to be simi-
lar to an ROTC program but was not included within the ROTC
budget line or within the ceiling on ROTC scholarships, the Com-
mittee requested additional details on this program. The Navy
responded that, in fact, the effort was of dubious legality. The
Committee is therefore deleting $5.5 million from the Navy request
for this bogus ROTC program for which funds are not required.
The Air Force Audit Agency documented excess manning at four
different weapons training sites located in the Mediterranean area.
In March 1981, the Air Force agreed with the audit findings and
deleted 126 military positions with an eventual reduction of as
many as 350. Since the reductions occurred after the submission of
the fiscal year 1982 budget the Air Force has requested funds to
support at least 126 man years that are no longer required. The
Committee is therefore recommending a reduction of $2.5 million
from the budgeted levels.
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The Navy requested $200,000 for litigation cost as a result of
claims filed against the government for certain training devices.
The law suit has recently been settled out of court and the Chief of
Navy Education and Training will not require the $200,000 as
requested in the budget submission. The budget has therefore been
reduced by $200,000.
MILITARY PAY ACCOUNTING WASTE, FRAUD, AND ABUSE
In fiscal year 1982, nearly $60 billion will be spent in the mili-
tary personnel accounts. Even minor aberrations in the accounting
procedures can produce significant amounts of waste. For example,
the Committee has reviewed eight recent audit reports which docu-
ment millions of dollars being wasted due to poor management of
military personnel and retired pay accounts. Moreover, the Depart-
ment of Defense generally agrees with the findings by the General
Accounting Office and the various defense audit agencies. A few
examples of the typical problems are as follows:
Inadequate debt collection procedures
Divorced personnel. continue to collect allowances at "with
dependent" rates even though they are not entitled
A member paid by a sister service is sometimes paid twice
because the member's parent service is not notified that pay-
ment was made
Military retirees entitled to either DoD retired paychecks or
VA entitlements sometimes receive both payments
Paychecks written for personnel who have deceased as well
as invalid paychecks are not properly controlled to assure
timely destruction.
The Committee believes that even minor improvements in the
pay accounting procedures within the Department of Defense for
military personnel will save a minimum of $60 million in fiscal
year 1982 and a reduction has been included in that amount.
MILITARY COMPENSATION "DRAG-ALONGS"
Every October 1 the Department of Defense automatically in-
creases several discretionary allowances without making any spe-
cific judgement that the increase is required. For example, the
normal procedure with selective reenlistment bonuses or any of
several continuation pays would be to increase the amount of the
bonus by exactly the percentage of the pay raise.
While the Committee supports the use of bonuses to target com-
pensation, the practice of automatically increasing these several
allowances is done without any review. The automatic increase can
be very expensive for little return. For example, except for the
continuing resolution restriction, the Department of Defense would
have automatically increased the amount of selective reenlistment
bonuses being paid by nearly $100 million without making any
specific judgement that the increase was required in order to sus-
tain retention of each shortage skill at the level necessary.
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The Committee is therefore directing that the practice of auto-
matically increasing the discretionary "drag-alongs" is prohibited.
This will specifically apply to all non-entitlement pay and allow-
ances such as bonuses and continuation pays. The Department
may, of course, continue to increase and decrease these bonuses
within the authorities granted by the Congress as long as the basis
for the increase is a thorough and specific review which indicates
that each individual change is necessary. To the extent that this
discretionary authority is exercised, the Committee anticipates it
would be evenly spaced throughout the course of the year rather
than automatically occurring at the beginning of every fiscal year,
and vary from one skill to another. It is stipulated, however, that
items that are reimbursement for expenses incurred such as cloth-
ing maintenance may continue to be increased at the beginning of
every fiscal year, but the increase should be in accordance with the
requirement for increased expense reimbursements and not neces-
sary automatically tied to the military pay increase.
Last year the Committee directed the Air Force to develop a
compensation statement to better inform military personnel of the
full value of the military compensation package. The Air Force has
completed development on a compensation statement which meets
the Committee's intent. It is the Committee's understanding that
the Air Force is in the process of implementing the compensation
statement presently. The Committee is directing that now that the
Air Force has prepared a suitable document that the other services
follow suit during fiscal year 1982 so that all military personnel in
the Department of Defense receive such a statement. The process
should be institutionalized so that every member receives a state-
ment at least once a year during the course of his military service.
Prior to fiscal year 1979, the Department of Defense paid reen-
listment bonuses in equal yearly installments over the entire
period of the reenlistment. However, in fiscal year 1979 the Depart-
ment requested sufficient funds to begin making lump sum pay-
ments. Although the Committee directed DoD to continue the in-
stallment method rather than switching to lump sum payments,
the Conference on the fiscal year 1979 Defense Appropriations Bill
agreed to allow the Department of Defense to try the lump sum
method.
The Committee originally expressed several concerns over
switching to the lump sum method. For example, giving all the
money up front creates difficulties in recoupment if the individual
leaves the military early. In addition, if the bonus is given all at
once, it creates a "what have you done for me lately' syndrome
after the first year of reenlistment when the individual no longer
receives extra pay but is serving an extended obligation tour. And
finally, although DoD believed that a 16 percent savings would be
achieved by using the lump sum method, there has been no data to
support this contention and, in fact, the cost of reenlistment bo-
nuses has gone up exactly 300 percent in only three years. The
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Committee is therefore making a reduction of $397.9 million in
order to change the basis of award for reenlistment bonuses from
lump sum back to the pre-1979 installment method. It should be
clear to the Department that this reduction in funding makes no
change in the number of bonuses that can be awarded, just in the
method of payment.
As a partial offset for the reduction discussed above, the Commit-
tee is increasing the Marine Corps reenlistment bonus request by
$5 million for additional bonuses to be paid on the installment
method.
The Department of Defense is requesting $26 million and author-
ity to pay a cost of living allowance (COLA) to personnel living on
base in barracks overseas. The Congress has said no twice before
on this new program and the reasons for this denial are even
stronger this year than in previous years. For example, DoD wants
this new allowance on top of a pay raise of as much as 17 percent
in fiscal year 1982. Moreover, the purchasing power of the dollar
overseas is up dramatically from that of a year ago when the
Department of Defense based the justification for the barracks
COLA on the "devalued" dollar.
The Committee still questions the need to pay a barracks COLA
to individuals who are provided free food, free housing, free medi-
cal care, and recreation and exchange prices equal to or less than
the United States. This justification becomes even stronger in light
of the fact that the barracks COLA that the Department wishes to
pay would include extra funds for doing such items as laundry and
dry cleaning off base. The Committee seriously questions whether a
military person living in a barracks with a laundry facility in his
own building will transport his dirty laundry off base rather than
use the more convenient and cheaper on-base facilities. In addition,
the Committee questions whether there is a need to provide a
transportation subsidy for personnel living and working on base in
the same magnitude that is given for those individuals who must
live off base and commute perhaps by public transportation on base
to work.
The Committee is therefore deleting the entire request of $26.0
million in fiscal year 1982 and for the third time denying the
request for barracks cost of living allowance.
PER DIEM, TRAVEL, AND TRANSPORTATION ALLOWANCE COMMITTEE
Prior to July 1, 1947, uniformed administration of travel and
transportation allowances for members of the uniformed services
was rare. From July 1947 to May 1950, an informal Per Diem
Committee Board met periodically to evaluate needed changes in
these pay and allowance areas. Since 1950, these decisions have
been made by the Per Diem, Travel and Transportation Allowance
Committee which has seen its charter grow substantially from
travel and transportation questions to a whole range of pay and
allowance issues.
The Committee is concerned that with the responsibility for in-
terpretation of pay and allowance statutes being farmed out to the
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Per Diem Committee, DOD officials are somehow absolved of the
responsibility for poor decisions that may be made The Committee
has become increasingly aware in the last several"-years that the
Per Diem Committee has made decisions that in some instances
are not fiscally sound and in other instances are admittedly illegal.
- The Committee has reluctantly concluded that after 30 years the
Per Diem, Travel and Transportation Allowance Committee has
outlived its usefulness. The Committee has no choice but to direct
that none of the funds contained in this bill may be used to support
such a committee structure and that in fact the committee no
longer exists.
In recognition, however, that some mechanism must exist to
continue the continuity and uniformity of military pay and allow-
ances, the Committee is not deleting the funding for the staff
which has worked for the Per Diem Committee. Rather the entire
23 full time and 18 part time staff should be transferred directly to
the office of the Assistant Secretary of Defense for Manpower,
Reserve Affairs, and Logistics who is the highest ranking military
manpower and compensation official in the Department of Defense.
The Committee is also directing that henceforth every decision that
would in the past have been referred to the Per Diem, Travel and
Transportation Allowance Committee will now be made by the
Assistant Secretary of Defense for Manpower or at a level no lower
than one of his immediate Deputy Assistant Secretaries. If the
Assistant Secretary of Defense for Manpower Reserve Affairs and
Logistics chooses to delegate this authority, the Committee expects
to be notified of the individual designated to make these decisions
in order that the responsibility may be clearly fixed in a specific
position. Furthermore, the Committee expects the Department to
issue a quarterly report itemizing all decisions made which would
affect military pay and allowances or expense reimbursements in
any form and the amount of financial impact that is anticipated as
a result of each decision. The first such report shall be forwarded
to the Committee for the first quarter of fiscal year 1982 no later
then January 31, 1982. The Committee anticipates that the Assist-
ant Secretary of Defense or the Deputy Assistant so designated by
him shall continue to work closely with the uniformed services not
within the Department of Defense in order to insure consistency in
pay and allowance decisions..
INCIDENTAL EXPENSE REIMBURSEMENTS
Prior to December 1979, the Joint Travel Regulations provided
that military personnel travelling overseas when government quar-
ters and messing were available would receive $2.50 per day to
cover incidential expenses. To the extent that quarters and food
are not provided, additional per diem was authorized. On December
12, 1979, the Per Diem, Travel and Transportation Allowance Com-
mittee decreed under Joint Determination number 40-79 that the
amount awarded for incidental expenses would be 8 percent of the
overseas per diem rate in effect for the locality surrounding the
military installation involved. This decision was made despite ob-
jections by some of the military services.
The Committee has reviewed this recommendation and agrees
with those who object to it. There appears to be little logic in
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linking the incidental expense rate for a U.S. military installation
to the per diem rate outside of that military installation since the
incidental expenses are designed to cover those costs incurred for
laundry,-- Haircuts, dry cleaning, and personal hygiene purchases
made!generally at the on-base commissary or exchange. Since all of
these purchases are geared to U.S. prices, it is immaterial whether
the per diem rate outside the local installation is high or low.
Consequently the Committee is specifically reversing Joint Deter-
mination number 40-79 and directing the Department to calculate
what is a fair reimbursement for incidental expenses incurred and
insure that military personnel are provided this equitable reim-
bursement without regard to a fixed percentage calculation against
the local per diem rate. The Committee believes that separating
the incidental expense calculation from the local per diem will save
an estimated $10 million in fiscal year 1982 and appropriate reduc-
tions have been made to the proper accounts.
In the early 1960's, the Congress authorized foreign duty pay for
enlisted personnel of up to $22.50 per month for assignment to
certain overseas duty areas. Twenty years ago military pay was
low and in many of these foreign areas living was difficult at best.
Military pay is no longer low with enlisted personnel receiving
pay raises within the past twelve months of as much as 30 percent.
Furthermore, a review by the Committee shows that the Depart-
ment of Defense is awarding foreign duty pay to such "arduous"
assignments as Puerto Rico, England, Spain, Virgin Islands, Fin-
land, and Germany. With the strength of the dollar overseas, the
high U.S. military pay levels, and the vast improvements and
amenities available for overseas living since the early 1960's, the
Committee believes that the Department can substantally cut back
on the number of personnel awarded foreign duty pay so that only
those personnel assigned to truly rigorous areas such as Diego
Garcia or a remote and isolated communications site would remain
eligible. By limiting the payments to these hardship areas, the
Committee believes that a reduction of $25.0 million is possible in
fiscal year 1982.
NAVY AND MARINE CORPS BAQ MISMANAGEMENT
Two years ago the Committee criticized the Navy's practice of
improperly paying basic allowance for quarters when in fact ade-
quate quarters were available to house those not meeting the crite-
ria for living off station. The Committee directed the Navy at that
time to correct the problems in this area and insure that empty
housing is fully utilized.
This year, two years later, the Committee has reviewed five new
audit reports that show both the Navy and the Marine Corps are
paying basic allowance for quarters for sailors and marines to live
on the economy when suitable military housing is still available.
This year, however, the Committee has found that the Navy man-
agement has actually deteriorated since there are several instances
of personnel living in government quarters also drawing the basic
allowance for quarters to which they are not entitled. For example,
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the Navy Audit Service has documented cases where individuals
have received BAQ even though they have been living in govern-
ment quarters for up to 24 months. The Committee is therefore
directing the Navy and the Marine Corps to take aggressive action
to correct these chronic problems. A reduction totaling $52.5 mil-
lion is recommended out of the total of $1.4 billion for Navy and
Marine Corps BAQ.
The Navy Audit Service documented that the Department of
Navy has consistently requested more funding than required for
the Military Personnel Navy appropriation for fiscal years 1977,
1978, and 1979. In response to this audit finding the Navy stated
that it had taken correct action and that no such problem would
exist in the year 1981. The Committee has reviewed the Navy's
management of the military personnel appropriation during fiscal
year 1981 and finds that in fact the same overbudgeting in certain
areas occurred. The Committee estimates that the fiscal year 1981
amount overbudgeted in the same pay items documented by the
audit service totals $58.5 million. Since the fiscal year 1982 budget
request is substantially based upon the fiscal year 1981 experience,
the Committee is recommending a reduction of $58.5 million from
the current request.
The variable housing allowance is designed to compensate mili-
tary personnel for the difference between the actual housing costs
on the one hand and the amount received for reimbursement in
the basic allowance for quarters on the other. The budget submis-
sion for fiscal year 1982 by then-President Carter assumed that the
basic allowance for quarters increase would be only 9.1 percent.
However, as a result of the Uniformed Services Pay Act of 1981,
the actual increase in BAQ was 14.3 percent. Therefore, the Com-
mittee estimates that the variable housing allowance request is
overstated by some $39.1 million and a reduction is recommended
in that amount.
ARMY PROFICIENCY PAY
The Army has requested a new program totaling $44.1 million in
fiscal year 1982 for proficiency pay. This new effort is composed of
two programs: combat arms proficiency pay totaling $26.8 million,
and skill shortage proficiency pay of $17.3 million.
As a result of feedback from field commanders, the Army has
backed off of the proposal to pay a combat arms proficiency pay
because of the difficulty that would be involved in proper adminis-
tration. The Committee is therefore deleting the $26.8 million.
The Committee agrees with the Army's proposal to pay new skill
shortage proficiency pay. However, the skills and pay grades pro-
posed to receive this new pay indicate that the full amount is not
necessary. Therefore, the Committee is approving $11.4 million of
the request and specifying that the new skill shortage proficiency
pay should be limited to Career E-5 through E-9's in skills manned
at less than 95 percent of the required levels.
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In the Uniformed Services Pay Act of 1981, an increase of up to
30 percent in monthly flight pay was authorized. Since this is an
entitlement and no additional funds have been included in the
fiscal year 1982 budget, the Committee is recommending an in-
crease of $57.3 million to finance this Congressional initiative.
AVIATION BONUS
The Uniformed Services Pay Act of 1981 terminates the aviation
bonus for the Air Force effective October 1, 1981. The Committee is
therefore deleting the entire $47 million requested by the Air Force
in fiscal year 1982 for payment of this no longer authorized bonus.
The pay act of 1981 also terminates the Navy and Marine Corps
aviation bonus effective at the end of fiscal year 1982. Since the
pay act also makes all Marine and Navy aviators who do not
execute an agreement for the aviation bonus eligible for the 30
percent increase in flight pay, the Committee believes that it will
not be necessary for the Department of the Navy to continue to
pay this aviation bonus throughout the entire fiscal year. A reduc-
tion of $26 million is therefore made and the Navy and Marine
Corps are directed to phase out the aviation bonus effective March
31, 1982.
MARINE CORPS FLIGHT AND SEA PAY RATE ERRORS
The Marine Corps has acknowledged that incorrect rates were
used to prepare the FY 1982 request for non-crew flight pay and
officer sea pay. The Committee is recommending deletion of
$400,000 based upon a recalculation using the correct rates.
PAY LONGEVITY OVERSTATEMENT
Both the Army and the Air Force budget submissions originally
projected that the average pay grade for military personnel would
be higher than now appears to be the case. The Committee has
therefore deleted a total of $20.6 million.
CURRENCY CHANGES
Due to the continued strength of the U.S. dollar overseas, the
Committee estimates that the military personnel request is over-
stated by $20.8 million and a total reduction is recommended in
that amount to the Army, Navy, and Marine Corps accounts. No
reduction is recommended to the Air Force since $34 million was
already deleted for currency changes in the September 1981 budget
amendment.
ARMY BASIC ALLOWANCE FOR QUARTERS (BAQ)
The Army has acknowledged that the budget request is overstat-
ed by $5.8 million for basic allowance for quarters. A reduction is
included in that amount.
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ARMY MEDICAL PAY
Public Law 96-284 permits the Army to pay up to a total of $4.3
million in fiscal year 1982 for doctor incentive pay. After reviewing
the Army's request, the Committee has concluded that the Army
does not know how many doctors they want to pay, which skills
will receive the pay, or what the average payments will be. It is
apparent that the Army simply budgeted the maximum amount
possible without a specific plan to document the request. The Com-
mittee recognizes, however, that there will of course be certain
skills that warrant this special pay. In the absence of a specific
plan, the Committee is recommending deletion of $2.3 million from
the Army's request which can be restored via a supplemental or
reprogramming once the Army can justify the full amount.
UNIFORMED SERVICES PAY ACT OF 1981
The Uniformed Services Pay Act of 1981 included several discre-
tionary increases for which no funds were included in the budget
request by the Department of Defense. Since the Department has
not had adequate opportunity to justify the cost of the items to the
Appropriations Committees or how the discretionary authorities
would be exercised, the Committee is requesting that the Depart-
pent request funds either through a supplemental or through a
reprogramming request and present a plan for approval by the
House and Senate Appropriations Committees prior to implementa-
tion.
PROPOSED REDUCTION TO THE SEVENTH DIVISION
In a budget amendment to the fiscal year 1982 request, the
Department had proposed reducing the Seventh Infantry Division
at Fort Ord, California temporarily to active cadre status in fiscal
year 1983 and then reinstating it to active status in fiscal year
1986. The Committee strongly opposes this recommendation. Al-
though there may be merit in proposing that the Army reduce the
number of divisions in its force structure while maintaining its
strength at current levels as well as merit in proposing closure of
entire bases, there is little merit in the present proposal since none
of the economies and efficiencies would accrue while most of the
disadvantages and diseconomies would result.
Although the Committee opposes any direct or indirect reduction
in the status of the seventh division or any other Army division
that might be proposed for temporary reduction to cadre status,
the Committee requests that the Army review its current division
and base structures and report to the Committee by March 31, 1982
the advisability of reducing the number of active Army divisions
while maintaining the strength at current or perhaps even in-
creased levels in order to "flesh out" the Army and improve its
combat capability.
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DRUG AND ALCOHOL ABUSE
For the past three years, approximately $267,000,000 has been
devoted to the alcohol and drug abuse prevention program. The
request for fiscal year 1982 is approximately $100,000,000. The
Department employs about 3,900 persons full time and about three
times that number part time. The expenditure of these resources
impacts adversely on readiness. There is no question that alcohol
and drug abuse increases the cost of maintaining readiness.
The Committee is deeply concerned about the alcohol and drug
abuse problems in the military services. The hearings revealed that
more than 130,000 members of the armed services are dependent
on alcohol or illegal drugs, and that over one-third of the military
personnel reported they had used some type of drug for nonmedical
purpose during 1980. It has been reported that 19 percent of the
junior enlisted personnel report that, on some occasion they have
been "high while working."
The Committee recognizes that there is no easy solution to this
problem in the Department of Defense or in the country as a
whole. Although it appears that DOD is awakening to the extent of
the problem, clearly more needs to be done. At a minimum the
Department should consider:
-An aggressive media campaign in military communities, espe-
cially those served by American Forces Radio and Television.
-Awarding less than honorable discharges to abusers who refuse
rehabilitation
-Increased use of urinalysis kits
-Increased use of military working dogs
-Increased narcotics agent manning
-Submission of proposed legislation to authorize X-ray of mail
as well as other initiatives to stop trafficking.
RECRUITING AND ADVERTISING
In fiscal year 1982, the Department of Defense budget calls for
spending approximately ,$1.3 billion for military recruiting and
advertising. This represents an increase of 55 percent during the
last two years alone. More specifically, the number of male non-
prior service recruits required in FY 1982 decreases by 7 percent
DOD-wide, but the level of funding requested increases by 24 per-
cent in just one year. The Committee believes this increase is
unwarranted since:
-All services met or exceeded their recruiting goals in FY 1981
in terms of both quality and quantity;
-The President has declared the U.S. to be in a recession which
will influence many young men to join the military;
-Unemployment is presently at 8 percent and projected to
remain at high levels;
-The Congress recently passed a pay raise as high as 17 percent
which makes military service much more attractice;
-The supply of 18-year-old males is presently at near-record
levels;
-There is a substantially reduced need for unskilled recruits
due to ' the greatly improved retention of skilled NCO's and
Petty Officers;
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-The Army has not reorganized their recruiting command as
they agreed to do two years ago.
The Committee therefore believes that a reduction totalling $110
million is possible in FY 1982 with no adverse impact on the
recruiting effort. The Committee is offsetting this decrease, howev-
er, by $10 million for the Army to reflect the increase in bonus
ceiling that is now available for recruiting as a result of the Uni-
formed Services Pay Act of 1981.
PHYSICIAN ASSISTANTS
The fiscal year 1982 Defense Authorization Bill directs that the
appropriate rank for physician assistants in the Air Force is a
Commissioned Officer. The Committee believes that if the physi-
cian assistant is to be a true health care professional and to func-
tion as an extender of physician services, there should be minimum
professional standards established for these personnel. Therefore,
the Committee is directing that prior to any physician assistant
receiving a commission in the Department of Defense he should (a)
possess at a minimum a bachelors degree in a science field directly
related to medicine, (b) graduate from a training program approved
by the appropriate national medical boards, and (c) be certified by
the appropriate national certification authority. Additionally, the
Committee is continuing the restriction that commissioned physi-
cian assistants may not be promoted to a rank higher than 0-4 in
order to prevent establishment of a bureaucracy for physician as-
sistants which would ultimately lead to physician assistants becom-
ing Colonels and Generals and out-ranking their physician counter-
parts.
The Committee is also directing that no later than March 31,
1982, the Department of Defense report to the Committee on any
additional standards recommended for commissioning and include
comments from appropriate physician assistant professional organi-
zations such as the various state societies of physician assistants
and the American Academy of Physician Assistants.
ASSIGNMENT OF MILITARY VETERINARIANS
In fiscal year 1980 the Committee directed the disestablishment
of the Air Force Veterinary Corps and designation of the Army as
executive agent for all veterinary responsibilities. Although the
Department has taken these steps specified, there appears to be a
substantial lack of cooperation between the Army and the Air
Force in terms of proper utilization of the remaining veterinarians.
For example, although the Army now is responsible for performing
all Department of Defense veterinary functions, it is short of veter-
inarians because it has not asked for those Air Force officers
possessing veterinarian skills to be made available to meet the DoD
wide requirement. On the other hand, the Air Force insists that
they no longer have authorized positions for veterinarians and
have not volunteered to make the veterinarians in the Air Force
available to the Army to meet the DoD requirements.
The Committee does not understand the difficulty in the two
services cooperating in executing defense responsibilities for veteri-
nary activities. The Committee is directing the Office of Secretary
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38
of Defense to insure that proper utilization is made of veteri-
narians currently in the Air Force during the transition period.
The Committee is also directing that no officer in the military
force should receive veterinary special pay even if the individual
has a Doctor of Veterinary Medicine degree unless that person is
assigned to a position specifically requiring a DVM degree and that
the director of the Army Veterinary Corps as the chief veterinary
official in the Department of Defense can certify to the Committee
if the need arises that each individual receiving the pay is indeed
performing a function that is required to meet the Army's veteri-
nary mission.
SHIP RETIREMENTS
The September 1982 budget amendment retired 17 Navy ships
earlier than planned. However, no manpower savings were includ-
ed to reflect the reduced requirement. Excluding those ships re-
stored elsewhere in this report, the Committee estimates that $6.0
million will not be required due to the impact of early ship retire-
ments.
MILITARY BANDS
In fiscal year 1982 the Department of Defense proposes to field
102 separate military bands requiring 5,300 personnel and $102
million (including the military and civilian pay raises). Although
the number of bands has remained level, the request represents an
increase of 210 personnel over the fiscal year 1980 level. The Com-
mittee is denying this proposed growth and deleting savings of $1.0
million.
NAVY EXCHANGE MILITARY PERSONNEL
The House Armed Services Committee has recommended that
the Navy reduce the number of military personnel assigned to its
exchanges. It is estimated that as many as 100 officers and 235
enlisted personnel are involved in this effort. The Committee be-
lieves that $3.8 million can be saved in fiscal year 1982 by replac-
ing up to half of these military personnel with non-appropriated
fund civilian personnel.
GUARD AND RESERVE FORCES
ARMY GUARD AND RESERVE EQUIPMENT TRANSFER
For the past several years the Committee has held detailed hear-
ings which highlight the tremendous shortage of equipment availa-
ble to the Army Guard and Reserve both for training and for
deployment under virtually any scenario. Two years ago the Com-
mittee directed the Army to begin budgeting for sufficient equip-
ment to modernize the Army Guard and Reserve. Last year when
the budget for fiscal year 1981 was submitted no such program was
included. The Committee then added $50 million for this purpose
and directed the Army to continue with this effort and include a
program in the fiscal year 1982 budget submission for moderniza-
tion. Unfortunately the Committee's direction has not been heeded.
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It is obvious from reviewing this year's submission in detail that no
such program has been initiated by the Secretary of Defense or the
Secretary of the Army. The Department was placed on notice in
last year's report on the fiscal year 1981 budget that "The Commit-
tee hopes that sufficient funds will be included in the budget
request when submitted next January (for the fiscal year 1982
budget) and that it would not be necessary, as was done with the
Navy Reserve program last year, to seek funds from within the
Department's request in order to finance this priority effort."
The Committee believes that two years is sufficient time for the
Department to initiate a comprehensive program for equiping the
Army Guard and Reserve. The program is of sufficient priority
that the Committee does not believe the Department should delay
yet another year, especially in view of the lack of cooperation that
has been evident on this issue. The Committee is therefore making
a series of reductions totaling $250 million to every major appropri-
ation contained in the Defense Department request. The Commit-
tee has reallocated this funding amount as follow: $100 million to
Operation and Maintenance and $150 million to Procurement, the
amounts to be equally divided between the Army Guard and Re-
serve. Within the $150 million designated for Procurement, $10.5
million is specifically included in the Aircraft Procurement, Army
appropration for C-12's which . the Committee directs to be dedi-
cated to the Guard. The Committee strongly urges the Department
to comply with the direction of the Committee to begin a vigorous
program of equipment modernization for the Army Guard and
Reserve. The funds added should be for items which will enhance
readiness and training in the near term. It is expected that the
Army will identify via a prior approval reprogramming a specific
plan as to what equipment will be purchased with these funds.
Prior Committee approval is not required for purchase of the
C-12's.
The Committee believes that one of the reasons for inaction in
this area is a lack of personnel dedicated to monitoring the devel-
opment of requirements for the Army Guard and Reserve as well
as the absence of a system for tracking the procurement and as-
signment of this equipment to the target unit. The Committee is
therefore directing that within the funds available to the Depart-
ment of the Army, additional personnel be dedicated to this effort.
The Committee will expect the Army to be able to testify next year
to the equipment requirement, the amounts contained in the
budget specifically to meet this requirement, the specific units to
be receiving the equipment, and what sort of a tracking system is
in place to be able to insure in future years under the Committee's
C' questioning as to the final dispensation of the equipment pur-
chased for the Army Guard and Reserve.
NAVAL RESERVE STRENGTH
The fiscal year 1982 budget submission requested only 87,600
Naval Reservists although the Navy Manpower Mobilization
System study has determined that the need is for over 114,000.
Last year the Committee recognized the necessity for gradually
building the Naval Reserve program toward this higher figure and
funded the Reserve personnel appropriation for a strength level of
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
92,000 personnel. The Department of Defense refused to increase
the Naval Reserve strength by realigning the funds elsewhere.
The Committee is increasing the FY 1982 request by $20.0 mil-
lion and establishing a minimum level for the Navy Reserve at
94,000 personnel. The Department is directed to expend the funds
for the purpose for which appropriated. In the event that the Navy wishes to reduce the strength below the appropriated 94,000 per-
sonnel level, the Committee reminds the Department of Defense
that the appropriate mechanism is through an appropriation rescis-
sion request.
Last year, the report on the FY 1981 Defense bill stated that "it
is the intent of the Committee that all personnel funding for TAR'S
(Training and Administration of Reserves), both officer and enlist-
ed, be included in the RPN appropriation request." In testimony
before this Committee, the Deputy Assistant Secretary of Defense
for Reserve Affairs stated that the "Tar manpower is included in
the reserve manpower authorization and funded in the Reserve
Personnel, Navy appropriation beginning in FY 1983." It is the
intent of the Committee that DOD follow through in FY 1983 on
this commitment.
GUARD AND RESERVE DRILL ATTENDANCE
After an extensive study by the Committee's Investigative staff
on the practice of paying Guard and Reserve personnel for drills
not attended, the Committee concluded last year that "the Con-
gress has no assurance that DoD has properly justified the level at
which appropriated funds should be made available for drill attend-
ance." As a result, the Committee deleted $13.7 million in FY 1981
to reflect this overstated request and included direction for the
Department of Defense to take aggressive action to halt this prac-
tice.
Based upon eight new audits by various Defense audit agencies,
the Committee has concluded that the Guard and Reserve compo-
nents have still not corrected this payroll problem. The Committee
believes that the Department is paying people who are not present
at drills. One audit documented that one out of forty names on
Marine Corps Reserve rosters certified to receive pay never even
attended drills. Based upon the information available to the Com=
mittee, there is no reason to believe that the other Reserve and
Guard components are substantially better than the Marine Corps
Reserve.
While the Appropriations Committee has traditionally been a
supporter of a strong Guard and Reserve force, this support does
not extend to pay practices which border on outright fraud. The
Committee is directing the Department to aggressively pursue cor-
rective procedures, including the prosecution of personnel who
accept pay for time not actually worked. It is the Committee's
belief that millions of dollars are wasted each year because the
Department refuses to crack down on these fraudulent practices.
The Committee is, therefore, deleting $34.5 million from the pay
account for the Guard and Reserve components, and directing that
a report be submitted to the Committee no later than April 30,
1982 on enforcement measures taken and the number of personnel
prosecuted.
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EQUIVALENT TRAINING SESSIONS
In the fiscal year 1979 bill, the Committee included a general
provision directing that reservists be permitted no more than four
make-up sessions per year for missed drills. The Committee has
reviewed several reports that indicate that the Navy Reserve is not
complying with either the spirit or letter of the general provision
that is continued into the fiscal year 1982 Defense Appropriations
Bill. The Chief of Naval Operations in response to the Naval Audit
Service stated that "it is reasonable to assume that the House
Appropriations Committee will advise if it does not agree." The
that the findings of the
N
h
avy
e
Committee is hereby advising t
Naval Audit Service are correct and should be implemented imme-
diately. The Department of Defense is also requested to review this
area and insure that action is taken by all Guard and Reserve
components to comply with the Committee's direction.
ARMY GUARD KEY PERSONNEL UPGRADE PROGRAM (KPUP)
The Army Guard has begun implementation of the Key Person-
nel Upgrade Program (KPUP) to provide additional training oppor
tunities for key leaders from Army Guard units. The program
permits NCO's and Officers to train alongside their active duty
counterparts during operational exercises at times separate from
their own unit's training program. In addition, Guard personnel
may be called to active duty to function in an acting capacity
during the absence of key active duty personnel. The Committee
believes that this program should be expanded and is adding $3.0
million to the fiscal year 1982 request for this -effort.
3679 VIOLATION BY THE NAVY RESERVE
The Reserve Personnel, Navy appropriation for fiscal year 1979
incurred a violation of Section 3679 of the Revised Statutes. The
Navy has indicated that additional obligational authority is re-
quired in order to pay the outstanding bills for services rendered.
The Committee is therefore providing authority to transfer up to
$100,000 from the fiscal year 1982 appropriation in order to liqui-
date these obligations. The Committee, however, estimates that
this amount will only be sufficient to cover the additional charge
through this next summer. It is the Committee's intention to hold
a separate hearing on the 3679 violation in order that the Depart-
ment may fully document corrective action taken to ensure that
procedures are in effect to prevent further instances of fiscal mis-
management.
GUARD AND RESERVE VARIABLE HOUSING ALLOWANCE CALCULATION
Section 403 of Title 37 provides that a member of a guard or
reserve component entitled to a basic allowance for quarters is also
entitled to receive variable housing allowance if the housing costs
in that area are substantially in excess of the BAQ provided. The
Committee believes that the implementing regulation by the De-
partment of Defense is unnecessarily cumbersome and confusing.
f9r
For example, a
two weeks of training may well fly to everalldifferent tair bases in
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004---8
42
accordance with his training. Under current Department of De-
fense regulations the variable housing allowance will be calculated
independently for each of the several air bases visited even if for
only as short a time as one day. The Committee believes that it
would be both more logical and more equitable to the individual
involved if the regulation covering implementation of guard and
reserve variable housing allowance was based on the location of the
unit or organization to which the member is permanently assigned
and where the housing costs are actually incurred.
AIR GUARD 105TH TASG SQUADRON
Subsequent to the submission of the fiscal year 1982 budget to
the Congress, the state of New York and the Air Force agreed to
the transfer of the 105th Tactical Air Support Group (TASG) from
Westchester Oounty Airport to vastly superior facilities at Stewart
Airport. In addition to approximately $28 million of military con-
struction that the Air Force has agreed to budget for over the next
two years, the state of New York has - agreed to provide $6 million
in construction funding for the Air National Guard unit upon
transfer to Stewart. Because of the severe problem with the local
community at Westchester and the first-rate facilities at Stewart,
the Committee is adding $500,000 above the budget request and
directing the Air Force to expeditiously move the 105th TASG to
Stewart during fiscal year 1982. In addition, the Air Force is direct-
ed to report by April 30, 1982 as to the potential for converting the
105th to an airlift or fighter mission as the O-2's currently as-
signed are phased out.
As discussed elsewhere in this report, the Marine Corps Reserve
has also selected Stewart Airport as a home for an additional KC-
130 tanker squadron. The Committee is directing the Air Guard to
ensure that the transfer of the 105th to Stewart is accomplished in
such a fashion as to be compatible with the needs of a Marine
Corps Reserve KC-130 tanker squadron in future years.
GUARD AND RESERVE TECHNICIAN CONVERSION PROGRAM
The Committee conducted an extensive hearing on the Guard
and Reserve technician conversion program and includes the fol-
lowing direction to the Department.
Each reserve component will be free to determine the
appropriate mix of fulltime military and. military techni-
cians.
Fulltime military and military technicians will have a
mobilization assignment with the unit they support and be
mobilized and deployed with that unit.
Military technicians will, when directed by competent
authority, travel on military aircraft on official business
whether traveling in a military or civilian capacity.
Military technicians will occupy government quarters
based on military grade when in a travel status.
DoD will take steps, including submission of any neces-
sary legislative proposals, to clarify the authority of the
states over military technicians serving in the National
Guard not on active duty in a federal status.
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As a policy, similar skills within a reserve component
will be standardized as either military technicians or full-
time military.
INVOLUNTARY INDIVIDUAL READY RESERVE TRAINING
In a letter dated June 9, 1981, the Assistant Secretary of Defense
uested that the
re
ti
i
L
q
cs
s
og
for Manpower, Reserve Affairs, and
Committee remove its prohibition against exercising the authority
contained in 10 USC 270 allowing members of the reserve compo-
nents to be ordered involuntarily to annual training. The Commit-
tee directed that this practice be halted in 1975 in House Report
94-517.
The Committee has reviewed the Department's recent request
and agrees that it is increasingly important for members of the
Individual Ready Reserve to be already trained for deployment.
Therefore, the Committee removes the restriction on involuntary
participation in military training for IRR members for those per-
sonnel required in the first 30 days of mobilization possessing skills
that require periodic refresher training to remain current.
FEDERAL EMERGENCY MANAGEMENT AGENCY (FEMA)
With the establishment of the Federal Emergency Management
Agency (FEMA) in 1979, the Civil Defense function formerly per-
formed by the DoD was assigned to that new Agency. Included in
the programs and resources transferred to FEMA were individual
Reservists and Reserve units that support the Civil Defense effort.
In fiscal year 1981, FEMA assumed the responsibility, and did in
fact provide funding for these Reserve units. However, the Commit-
tee has learned that FEMA consciously did not budget for the
resources necessary to support the fiscal year 1982 program. While
the Department of Defense has taken the position that it is the
responsibility of FEMA to provide funding for this program, an
offset in the Defense budget of $1.6 million has been offered by the
Department of Defense in order to leave sufficient room in the
budget ceiling for the addition of funds to FEMA. The Committee
is, therefore, deleting the $1.6 million from the Defense budget
request since FEMA is pursuing the resources through their own
budgetary process.
AIR GUARD SKILL RETRAINING
? The Air National Guard has budgeted an insufficient amount,to
provide for retraining military personnel who possess skills in plen-
tiful supply into shortage skill areas. The Committee is adding $2.0
million to the request for this needed retraining program. Howev-
er, the Committee is stipulating that the Air Guard should not use
as a source of personnel those skills which are already filled to less
than 95% of the requirement.
AIR FORCE RESERVE TECHNICIAN TRANSFER
As a result of the flexibility given to each Reserve component to
establish its own technician conversion schedule, the Air Force
Reserve has requested that the Committee transfer $4.6 million
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44
from the Military Personnel account into the Operation and Main-
tenance account. This adjustment is reflected in the appropriation
summaries.
IMPROVED RESERVE COMPONENT STRENGTH LEVELS
Based upon information provided to the Committee, it appears
that the Army Reserve and the Air Guard will exceed their budget-
ed strength levels. The Committee encourages recruiting and reten-
tion of qualified personnel for the Guard and Reserve components
and is adding a total of $22.0 million above the budget to support
this increase in projected strengths.
DETAIL OF APPROPRIATION ADJUSTMENTS
MILITARY PERSONNEL, ARMY
Appropriations, fiscal year 1981 ............................................................. $12,148,300,000
Estimate, fiscal year 1982 .................
...................................................... 12,631,700,000
Recommended in the bill ......................................................................... 12,278,300,000
Change ........................................................................................................
-353,400,000
The Committee recommends an appropriation of $12,278,300,000
for Military Personnel, Army. This amount is a decrease of
$353,400,000 from the budget estimate of $12,631,700,000. The
amount appropriated for fiscal year 1981 is $12,148,300,000. The
amount recommended herein for fiscal year 1982 is an increase of
$130,000,000 over the prior year. Pay raise costs are not included in
the fiscal year 1982 estimate.
Specific adjustments addressed elsewhere are summarized below:
Duplicate Leadership Training ... .................................................................. -$7,200,000
Subsistence Waste, Fraud, and Abuse .............................................................. -40,000,000
New Rations ........................................................................
Installment Reenlistment Bonus ..................... """"""""..""""... -1,500,000
................................................ -96,000,000
Barracks Cost of Living Allowance ................................................................... -6,000,000
Foreign Duty Pay ..............
................................................................................... -9,300,000
Career Basic Allowance for Subsistence .......................................................... -14,400,000
Proficiency Pay ............................. ............................................... -32,700,000
Medical Pay ........................
Permanent hange of Station (PCS) Mileage .... .............. -13,900,000
Permanent Change of Station Waste, Fraud and Abuse .............................. -5,500,000
Presidentially Directed PCS Savings ................................................................ -14,500,000
PCS Rate and Fuel Reductions .............................. -22300000
Reduced Number of PCS Moves ........................................................................ -20,000,000
Temporary Lodging Allowance ................................................ 14,000,000
Army Guard and Reserve ip """" .................. -
Recruiting and Advertising .............................................................. -17,700,000
g ................................................................................ -10,000,000
Military Bands .......................................
.............................................................. -400,000
Currency Changes ..................
Military Pay Accounting Waste, Fraud, and Abuse ...................................... -16,500,000
Variable Housing Allowance (VHA) ................................................................. -9,900,000
Basic Allowance for Quarters .................................
KATUSA Rate Error ............... ......... .-100,000
000
Pay Longevity Overstatement ............................................................................ -7,800,00
0
New Enlistment Bonus Ceiling ............... .
Medical Intelligence and Information ......."""....""""""..... +10,200,000
Fli ht Pa Agency ............................................... -200,000
g y .............................................................................................................. +12,600,000
MILITARY PERSONNEL, NAVY
Appropriations, fiscal year 1981 ............................................................. $8,893,095,000
Estimate, fiscal year 1982 ........................................................................ 9,340,090,000
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Recommended in the bill ......................................................................... 8,807,520,000
Change ........................................................................................................ -532,570,000
The Committee recommends an appropriation of $8,807,520,000
for Military Personnel, Navy. This amount is a decrease of
$532,570,000 from the budget estimate of $9,340,090,000. The
amount appropriated for fiscal year 1981 is $8,893,095,000. The
amount recommended herein for fiscal year 1982 is a decrease of
$85,575,000 below the prior year. Pay raise costs are not included
in the fiscal year 1982 estimate.
Specific adjustments addressed elsewhere are summarized below:
Duplicate Leadership Training .......................................................................... -$1,100,000
Bogus ROTC Program ........................................................................................ -4,000,000
Subsistence Waste, Fraud, and Abuse .............................................................. -30,000,000
Installment Reenlistment Bonus .......................................................................- 205,600,000
Aviation Bonus ...................................................................................................... -20,000,000
Flight Pay ............................................................................................................. + 3,500,000
Barracks Cost of Living Allowance ................................................................... -2,700,000
Foreign Duty Pay ................................................................................................. -4,100,000
Career Basic Allowance for Subsistence .......................................................... -9,700,000
Permanent Change of Station (PCS) Mileage ................................................. -15,500,000
Permanent Change of Station Waste, Fraud, and Abuse ............................. -3,500,000
Presidentially Directed PCS Savings ................................................................ -9,500,000
PCS Rate and Fuel Reductions .......................................................................... -18,400,000
Reduced Number of PCS Moves ........................................................................ -13,000,000
PCS Homeporting ................................................................................................. -19,500,000
Army Guard and Reserve Equipment .............................................................. -13,300,000
Recruiting and Advertising ................................................................................ -11,000,000
Ship Retirement .................................................................................................... - 6,000,000
Military Bands ..................................................................................................... -100,000
Exchange Military Personnel ............................................................................. -3,800,000
Currency Changes ................................................................................................ -7,700,000
Military Pay Accounting Waste, Fraud, and abuse ...................................... -13,500,000
Variable Housing Allowance (VHA) ................................................................. -13,300,000
Overbudgeting ....................................................................................................... - 58,500,000
Basic Allowance for Quarters ............................................................................ -47,400,000
CINCUSNAVEUR ................................................................................................ -2,000,000
Overeaters Anonymous ....................................................................................... -100,000
Audiovisual ............................................................................................................ -2,700,000
TENCAP Office ..................................................................................................... -70,000
MILITARY PERSONNEL, MARINE CORPS
Appropriations, fiscal year 1981 ............................................................. $2,633,300,000
Estimate, fiscal year 1982 ........................................................................ 2,807,870,000
Recommended in the bill ......................................................................... 2,703,970,000
Change ................................. ,...................................................................... - -103,900,000
The Committee recommends an appropriation of $2,703,970,000
for Military Personnel, Marine Corps. This amount is a decrease of
$103,900,000 from the budget estimate of $2,807,870,000. The
amount appropriated for fiscal year 1981 is $2,633,300,000. The
amount recommended herein for fiscal year 1982 is an increase of
$70,670,000 over the prior year. Pay raise costs are not included in
the fiscal year 1982 estimate.
Specific adjustments addressed elsewhere are summarized below:
Subsistence Waste, Fraud, and Abuse ..............................................................-$10,000,000
New Rations .......................................................................................................... -2,500,000
Installment Reenlistment Bonus ....................................................................... -36,800,000
Aviation Bonus ...................................................................................................... -6,000,000
Flight Pay .............................................................................................................. +2,000,000
Barracks Cost of Living Allowance ................................................................... -9,300,000
Foreign Duty Pay ................................................................................................. -3,300,000
Career Basic Allowance for Subsistence .......................................................... -2,900,000
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Permanent Change of Station (PSC) Mileage ................................................. -7,900,000
Permanent Change of Station Waste, Fraud, and Abuse ............................. -1,100,000
Presidentially Directed PCS Savings .............................................................. -2,900,000
Reduced Number of PCS Moves ........................................................................ -4,000,000
Army Guard and Reserve Equipment .............................................................. -3,900,000
Recruiting and Advertising ................................................................................ -2,000,000
Military Bands ...................................................................................................... -100,000
Currency Changes ............................................................................................... -2,100,000
Military Pay Accounting Waste, Fraud, and Abuse ...................................... -6,500,000
Variable Housing Allowance (VHA) ................................................................. -3,400,000
Basic Allowance for Quarters ............................................................................ -5,100,000
Additional Reenlistment Bonuses ..................................................................... +5,000,000
Flight and Sea Pay Rate Errors ........................................................................ -400 000
Audiovisual ............................................................................................................ -700,000
MILITARY PERSONNEL, AIR FORCE
Appropriations, fiscal year 1981 ............................................................. $10,001,821,000
Estimate, fiscal year 1982 ........................................................................ 10,440,820,000
Recommended in the bill ......................................................................... 10,209,920,000
Change ........................................................................................................ -230,900,000
The Committee recommends an appropriation of $10,209,920,000
for Military Personnel, Air Force. This amount is a decrease of
$230,900,000 from the budget estimate of $10,440,820,000. The
amount appropriated for fiscal year 1981 is $10,001,821,000. The
amount recommended herein for fiscal year 1982 is an increase of
$208,099,000 over the prior year. Pay raise costs are not included in
the fiscal year 1982 estimate.
Specific adjustments addressed elsewhere are summarized below:
Weapons Training Sites ..................................................................................... -$2,500,000
Subsistence Waste, Fraud, and Abuse .............................................................. -15,000,000
Installment Reenlistment Bonus ....................................................................... -62,000,000
Aviation Bonus ...................................................................................................... -47,000,000
Flight Pay .............................................................................................................. +32,200,000
Barracks Cost of Living Allowance ................................................................... -8,000,000
Foreign Duty Pay ................................................................................................. -8,300,000
Career Basic Allowance for Subsistence .......................................................... -7,800,000
Permanent Change of Station (PCS) Mileage ................................................. -9,000,000
Permanent Change of Station Waste, Fraud, and Abuse ............................. -4,900,000
Presidentially Directed PCS Savings ................................................................ -13,100,000
Reduced Number of PCS Moves ........................................................................ -18,000,000
Army Guard and Reserve Equipment .............................................................. -14,600,000
Recruiting and Advertising ................................................................................ -12,000,000
Military Bands ...................................................................................................... -100,000
Military Pay Accounting Waste, Fraud, and Abuse ...................................... -10,500,000
Variable Housing Allowance (VHA) ................................................................. -12,500,000
Pay Longevity Overstatement ............................................................................ -12,800,000
Audiovisual ............................................................................................................ -4,500,000
PARCS .................................................................................................................... -500,000
RESERVE PERSONNEL, ARMY
Appropriations, fiscal year 1981 ........................................................................ $869,300,000
Estimate, fiscal year 1982 .................................................................................... 955,200,000
Recommended in the bill .................................................................................... 962,500,000
Change .................................................................................................................... +7,300,000
The Committee recommends an appropriation of $962,500,000 for
Reserve Personnel, Army. This amount is an increase of $7,300,000
from the budget estimate of $955,200,000. The amount appropriated
for fiscal year 1981 is $869,300,000. The amount recommended
herein for fiscal year 1982 is an increase of $93,200,000 over the
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prior year. Pay raise costs are not included in the fiscal year 1982,
estimate.
Specific adjustments addressed elsewhere are summarized below:
Subsistence Waste, Fraud, and Abuse .............................................................. -$1,600,000
Drill Attendance ................................................................................................... -9,600,000
FEMA Transfer ..................................................................................................... -700,000
Strength Improvements ...................................................................................... + 18,400,000
Flight Pay .............................................................................................................. +800,000
Appropriations, fiscal year 1981 ........................................................................ $318,758,000
Estimate, fiscal year 1982 ................................................................................... 329,020,000
Recommended in the bill .................................................................................... 346,420,000
Change .................................................................................................................... + 17,400,000
The Committee recommends an appropriation of $346,420,000 for
Reserve Personnel, Navy. This amount is an increase of $17,400,000
from the budget estimate of $329,020,000. The amount appropriated
for fiscal year 1981 is $318,758,000. The amount recommended
herein for fiscal year 1982 is an increase of $27,662,000 over the
prior year. Pay raise costs are not included in the fiscal year 1982
estimate.
Specific adjustments addressed elsewhere are summarized below:
Subsistence Waste, Fraud, and Abuse .............................................................. -$400,000
Drill Attendance ................................................................................................... -3,300,000
Flight Pay .............................................................................................................. + 1,100,000
94,000 Strength Level .......................................................................................... +20,000,000
Appropriations, fiscal year 1981 ........................................................................ $120,357,000
Estimate, fiscal year 1982 ................................................................................... 138,920,000
Recommended in the bill .................................................................................... 138,120,000
Change .................................................................................................................... -800,000
The Committee recommends an appropriation of $138,120,000 for
Reserve Personnel, Marine Corps. This amount is a decrease of
$800,000 from the budget estimate of $138,920,000. The amount
appropriated for fiscal year 1981 is $120,357,000. The amount rec-
ommended herein for fiscal year 1982 is an increase of $17,763,000
over the prior year. Pay raise costs are not included in the fiscal
year 1982 estimate.
Specific adjustments addressed elsewhere are summarized below:
Subsistence Waste, Fraud, and Abuse .............................................................. -$200,000
Drill Attendance ................................................................................................... -1,400,000
Flight Pay .............................................................................................................. + 800,000
71 RESERVE PERSONNEL, AIR FORCE
Appropriations, fiscal year 1981 ........................................................................ $277,360,000
Estimate, fiscal year 1982 ................................................................................... 298,848,000
Recommended in the bill .................................................................................... 291,548,000
Change .................................................................................................................... -7,300,000
The Committee recommends an appropriation of $291,548,000 for
Reserve Personnel, Air Force. This amount is a decrease of
$7,300,000 from the budget estimate of $298,848,000. The amount
appropriated for fiscal year 1981 is $277,360,000. The amount rec-
ommended herein for fiscal year 1982 is an increase of $14,188,000
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48
.over the prior year. Pay raise costs are not included in the fiscal
year 1982 estimate.
Specific adjustments addressed elsewhere are summarized below:
Subsistence Waste, Fraud, and Abuse .............................................................. -$300,000
Drill Attendance ................................................................................................... -3,000,000
FEMA Transfer ..................................................................................................... -900,000
Technicians ............................................................................................................ -4,600,000
Flight Pay .............................................................................................................. + 1,500,000
NATIONAL GUARD PERSONNEL, ARMY
Appropriations, fiscal year 1981 ............................................................. $1,168,200,000
Estimate, fiscal year 1982 ........................................................................ 1,299,100,000
Recommended in the bill ......................................................................... 1,287,600,000
Change ........................................................................................................ -11,500,000
The Committee recommends an appropriation of $1,287,600,000
for National Guard Personnel, Army. This amount is a decrease of
$11,500,000 from the budget estimate of $1,299,100,000. The amount
appropriated for fiscal year 1981 is $1,168,200,000. The amount
recommended herein for fiscal year 1982 is an increase of
$119,400,000 over the prior year. Pay raise costs are not included in
the fiscal year 1982 estimate.
Specific adjustments addressed elsewhere are summarized below:
Subsistence Waste, Fraud, and Abuse .............................................................. -$2,000,000
Drill Attendance ................................................................................................... -13,000,000
Key Personnel Upgrade Program ..................................................................... +3,000,000
Flight Pay .............................................................................................................. + 500,000
Appropriations, fiscal year 1981 ........................................................................ $386,209,000
Estimated, fiscal year 1982 ................................................................................. 418,192,000
Recommended in the bill ...............................................:.................................... 421,392,000
Change .................................................................................................................... +3,200,000
The Committee recommends an appropriation of $421,392,000 for
National Guard Personnel, Air Force. This amount is an increase
of $3,200,000 from the budget estimate of $418,192,000. The amount
appropriated for fiscal year 1981 is $386,209,000. The amount rec-
ommended herein for fiscal year 1982 is an increase of $35,183,000
over the prior year. Pay raise costs are not included in the fiscal
year 1982 estimate.
Specific adjustments addressed elsewhere are summarized below:
Subsistence Waste, Fraud, and Abuse .............................................................. -$500,000
Drill Attendance ..................................................................................................: -4,200,000
Skill Retraining .................................................................................................... +2,000,000
Strength Improvements ...................................................................................... +3,600,000
Flight Pay .............................................................................................................. +2,300,000
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TITLE II
RETIRED MILITARY PERSONNEL
RETIRED PAY, DEFENSE
ESTIMATES AND APPROPRIATION SUMMARY
The Committee is recommending an appropriation of
$14,931,815,000 for Retired Pay, Defense, a reduction of $50,000,000
from the amount requested for fiscal year 1982. The recommended
amount represents an increase of $1,044,015,000 over the fiscal year
1981 appropriation due primarily to projected increases in the Con-
sumer Price Index and also due to the addition of retiring military
and surviving annuitants to the rolls.
Costs associated with military retired pay and benefits fall into
four major categories: (1) pay of military personnel on the retired
lists of the Army, Navy, Marine Corps, and Air Force; (2) military
individuals receiving disability retirement payments on the basis of
either permanent disability or temporary disability; (3) retainer
pay for regular enlisted personnel of the Navy and Marine Corps
Fleet Reserves; and (4) payments to eligible survivors under the
terms of the Survivor Benefit Plan or its predecessor, the Retired
Serviceman's Family Protection Plan.
IMPACT OF ACTIVE DUTY "CATCH-UP" RAISE ON RETIRED PAY
Under the terms of the Budget Impoundment and Control Act,
the Uniformed Services Pay Act of 1981 was referred to the Appro-
priations Committee for consideration. In the report published by
the Committee, full support was given to a special "catch-up" pay
raise for military personnel on 1 October 1981. Although the pay
raise ranged to as high as 17%, on average it was close to the
14.3% requested by the present administration. Included within
the 14.3% pay raise was 9.1% that was requested by the adminis-
tration as the normal impact of inflation and wage increases in the
private sector over the course of 1981. , That portion of the raise
above 9.1%, i.e., 5.2%, is solely dedicated to providing a "catch-up"
for active duty military personnel.
While fully supporting the pay raise for active duty and reserve
personnel, it appears that the Congress has overlooked the poten-
tial multi-billion dollar impact of the catch-up pay raise on mili-
tary retired pay costs. For example, an individual can work only
one day at the new higher pay rates, then retire and have the base
for his retired pay calculations increased by 14.3% for the entire
length of his retirement. The Congress has already gone on record
last year approving a phase-in of the high-three retirement system
already in effect for civil servants in order to prevent exactly this
action from taking place.
The Committee believes it is appropriate to exclude the 5.2%
"catch-up" raise from the calculation for military retirement bene-
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fits for military personnel who retire on or after January 1, 1982
and a general provision has been included in the bill to that end.
The Committee, however, does anticipate phasing in the impact of
the "catch-up" raise over the next three years by allowing 2% each
year to be added to the retirement base. For example, beginning in
FY 1983 only 3.2% of the "catch-up" raise would be excluded from
the retired pay base for calculations and in fiscal year 1984 only
1.2% would be excluded. In FY 1985 no exclusion would be made.
Although it is estimated that this will save many millions of dol-
lars over the next several years, no specific dollar reduction has
been made in the military retired pay account during FY 1982 due
to the phase-in one-quarter of the way through the year.
The Committee also urges the Department of Defense to press
forward with implementation of an accrual accounting system for
retired pay in order that the costs of retired pay be fully visible in
the manpower planning process.
According to existing statutes, a member of the military who
retires with even one day more than six months service is credited
for a full year. For example, an individual retiring with 23 years 6
months and one day of good service for retirement purposes is
credited as if he had completed 24 full years of service. The Com-
mittee is including a general provision in the bill which will round
the service credit to the nearest month for any portion of a year in
excess of six months- rather than rounding to the nearest full year.
This action is in line with recommendations by the' Defense Man-
power Commission and the Congressional Budget Office. It is esti-
mated that modest savings will accrue in future years.
As a result of changes enacted in the Budget Reconciliation Act
to the Survivors Benefit Plan, the funding for the Retired Pay,
Defense account can be reduced by $37.0 million.
Appropriations, fiscal year 1981 ............................................................. $13,887,800,000
Estimate, fiscal year 1982 ........................................................................ 14,981,815,000
Recommended in the bill ......................................................................... 14,931,815,000
Change ........................................................................................................ -50,000,000
The Committee recommends an appropriation of $14,931,815,000
for Retired Pay, Defense. This amount is a decrease of $50,000,000'
from the budget estimate of $14,981,815,000. The amount appropri-
ated for fiscal year 1981 is $13,887,800,000. The amount recom-
mended herein for fiscal year 1982 is an increase of $1,044,015,000
over the prior year.
Specific adjustments addressed elsewhere are summarized below.
Military Pay Accounting Waste, Fraud, and Abuse ......................................-$13,000,000
Budget Reconciliation Act Adjustment ............................................................ -37,000,000
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TITLE III
OPERATION AND MAINTENANCE
ESTIMATES AND APPROPRIATION SUMMARY
The budget estimate for operation and maintenance for fiscal
year 1982 is $62,590,121,000 in new obligational authority. This
amount compares to a fiscal year 1981 including supplemental
appropriations of $55,980,234,000 in new obligational authority.
The accompanying bill recommends $61,208,685,000 in new obli-
gational authority. The amount recommended represents a de-
crease of $1,381,436,000 in new obligational authority from the
fiscal year 1981 request as amended and is $5,228,451,000 above the
total obligational authority provided in fiscal year 1981.
These appropriations finance the costs of operating and main-
taining the Armed Forces, including the Reserve components and
related support activities of the Department of Defense, except
military personnel costs. Included are amounts for pay of civilians,
contract services for maintenance of equipment and facilities, fuel,
supplies, and repair parts for weapons and equipment. Financial
requirements are influenced by many factors, including force levels
such as the number of aircraft squadrons, Army or Marine Corps
divisions, installations, military strength and deployments, rates of
operational activity, and quantity and complexity of major equip-
ment (aircraft, ships, missiles, tanks, et cetera) in operation.
The 1982 budget reflects a substantial increase to protect and
enhance Defense readiness capabilities.
Funds to operate the Active Forces and their support are con-
tained in five operation and maintenance appropriations, one for
each of the four services and one for Defense agencies. The pro-
grams covered under this heading are described below:
Strategic forces. -Strategic offensive forces include more than
400 manned B-52 and FB-111 bombers and 1,052 ICBM's operated
by the Air Force as well as the Navy's submarine missile fleet,
which deploys 568 Polaris, Poseidon, and Trident missiles. Two
Trident submarines are scheduled to enter the fleet in 1982.
Strategic defensive forces consist of interceptor fighter aircraft
and various warning, command, and control systems also operated
by the Air Force.
General purpose forces.-These forces, primarily conventional in
nature, provide the bulk of the flexible combat capability upon
which our national security and our overall defense posture
depend. A portion of these forces are deployed to Europe in support
of NATO commitments, eastern Asian, and the western Pacific.
Naval forces operate in the Atlantic, Pacific, and Indian Oceans.
Army land forces consist of infantry, mechanized, armored, air-
borne, air agsault divisions, and supporting force elements, along
with a number of units for combat support. Modernization of
combat units, including delivery of the XM-1 tank will continue.
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Testing of new concepts for lighter, more deployable combat units
has been initiated and will continue in 1982.
Naval forces include aircraft carriers, submarines, amphibious
forces, antisubmarine forces, and anti-air warfare forces. Twenty-
four ships are scheduled to be introduced into the fleet in 1982: five
nuclear attack submarines, two destroyers, five hydrofoil patrol
missile combatants, eight guided missile frigates, two fleet oilers,
one destroyer tender, and one nuclear aircraft carrier. Overage and
obsolete vessels will be inactivated.
Tactical air forces consist of the Air Force tactical air wings,
Navy land and carrier based antisubmarine and fighter/attack air
wings, and Marine air wings. Force missions include air superior-
ity, interdiction bombing, close air support, antisubmarine patrol,
reconnaissance, and special operations. The Navy will continue to
deploy the F-14 to replace F-4's in the fleet air defense role. The
Air Force will continue to fill out their 26-wing structure with
continued delivery of the F-15, F-16, and A-10 aircraft.
Marine Corps land forces, including combat and supporting
units, are designed to conduct amphibious assault operations and
other missions with the close support of Marine aviation.
Intelligence and communications.-This program comprises the
centrally directed Defense intelligence and security function, the
major portion of the consolidated telecommunications program
(CTP), the National Military Command System, and other special
activities which are related to and support the missions of the
combat forces in the strategic, general purpose, and airlift/sealift
programs. Included in the CTP portion are the Defense Communi-
cations System (DCS), common user transmission and switching
systems, as well as non-DCS communications. Funds to support
intelligence, security, and communications activities are contained
in the various appropriations of each of the military services, and,
in the Defense agencies are Navy oceanographic and weather pro-
grams, Air Force weather, air rescue and recovery, and air traffic
control programs.
Airlift and sealift.-This program provides air, land, and sea
transportation services for all the Armed Forces in peacetime as
well as quick reaction strategic mobility and logistical support in
wartime. The major commands in this program are the Air Force
Military Aiflift Command, the Navy Military Sealift Command,
and the Army Military Traffic Management Command. These are
primarily industrially funded operations with costs reimbursed by
the users. The operation and maintenance appropriations directly
provide for certain administrative and base service support ex-
penses for each of these industrially funded activities.
Central supply and maintenance.-This program includes funds
for specialized supply and maintenance activities. It provides re-
sources for the determination of inventory levels, procurement of
supplies, distribution, depot-level maintenance, and transportation
of military material. These functions are managed by the military
services and conducted at various locations worldwide.
In addition, the Defense Logistics Agency provides common
supply and services support to the military services within the
continental United States and manages bulk petroleum worldwide.
The Agency is the Defense manager for standby industrial plant
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equipment, the surplus property disposal program, and the Federal
catalog program. It is also responsible for providing contract ad-
ministration services, administration of Defense materiel utiliza-
tion programs and coordinated procurement programs.
Training, medical, and other general personnel activities.-In
1982 the military services plan on acquiring approximately 340,000
new accessions into the Active Forces.
These new accessions must then be trained in basic military
skills and in many occupational skills. Training requirements are
also influenced by the total strength of the services, and by the
introduction of new equipment and weapons. Education of prospec-
tive officers is accomplished primarily by the three service acade-
mies and by Reserve Officer Training Corps units at universities
and colleges. The services plan to operate 162 hospitals to provide
medical care for active and retired military personnel and their
dependents. This program finances a medical program at civilian
facilities for personnel in areas where service hospitals are not
accessible. In addition, this activity provides the resources neces-
sary to operate the Uniformed Services University of the Health
Sciences.
Administration and associated activities. -This program includes
the costs of departmental administration, major field command
headquarters, and general support activities such as finance and
audit. Reimbursement to the General Services Administration for
space occupied is also included in this program.
Support of other nations.-This program includes military assist-
ance missions, advisory groups for foreign nations, and the U.S.
share of NATO costs, plus support of U.S. organizations related to
international military headquarters.
Reserve Forces.-The operation and maintenance appropriations
also include funds in a separate appropriation for each Reserve
Component. These funds are used to equip, train, operate and
maintain the Reserve Components of the Department of Defense.
The budget request as amended by the Committee includes some
major increases designed to improve Reserve forces capabilities and
readiness.
NON-PROGRAMMATIC REDUCTIONS, OPERATING ACCOUNTS AND
REPROGRAMMING PROCEDURES
Over the past several years, a phrase has crept into the vocabu-
lary of Department of Defense officials with regard to reductions in
funding ordered by this Committee. That phrase is "non-program-
matic cuts."
The phrase is intended to convey the impression that cuts levied
by this Committee against a specified program or activity cannot,
in fact, be taken against that activity. The result has been a
Department policy that the cut will be taken elsewhere, usually
against training or real property maintenance and in direct con-
flict with the clear intent of the cut.
One "fact sheet" circulated by DoD in connection with the con-
sideration of this bill stated that a proposed $39 million reduction
in a $640 million allowance item could not be taken, but that DoD
would instead be forced to reduce manpower by 8,000 personnel.
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The Committee has grown increasingly intolerant of this ap-
proach by the Department to Congressional action and hereby
serves notice that this practice is to end.
In order to help insure the Department's compliance with the
above direction the Committee has attempted, with the help of
defense department personnel, to allocate the operating appropri-
ation reductions and additions to the summarized program element
aggregate structure used as the basis for the Military Services and
Defense agencies budget submissions. This summarized program
element aggregate listing has been printed in conjunction with
each of the operation and maintenance appropriations. The reduc-
tion and additions in funding allocated by this Committee, if even-
tually adopted by the Congress, will be levied against the specific
program or activity impacted.
The Committee expects to be notified of any changes larger than
$5.0 million (plus or minus) that occur as a result of reallocation of
resources between these program element aggregates. The Commit-
tee does not want a specific accounting system established for this
purpose or a single accountant or other bookkeeper added to the
employment roles. It is desired, however, that the Committee be
notified in writing whenever the headquarters budget offices of the
military services or the offices of the Secretary of Defense and
Comptroller Defense agencies become aware of a change which
exceeds $5.0 million. The Committee also expects to be notified
whenever a military service believes there are overriding reasons
why a reduction approved by the Congress cannot be made as
levied and explained in this report. The Committee expects to
receive few of this latter type notification.
FUEL AND ENERGY
The Department of Defense Budget Request includes $10.5 billion
for consumption of fuel. The following table provides an overview
of the request by title:
Fiscal year 1980 Fiscal year 1981 Fiscal year 1982
Barrels Barrels Barrels
(mil- Cost (mil- Cost (mil- Cost
lions) lions) lions)
0. & M .................................................................................................... 134.9 5,817 142.1 7,082 147.2 8,123
Industrial funds' ..................................................................................... 34.5 1,498 36.9 1,745 39.2 2,055
R.D.T. & E ............................................................................................... 2.4 104 2.2 105 2.2 117
Total ................................................................................................ 171.8 7,419 181.2 8,932 188.6 10,295
Mostly funded in 0. & M.
In addition to the amounts above, the FY 1982 Budget includes
$124.2 million in the Family Housing account, which is considered
in another bill.
The Budget request reflects a composite cost estimate per barrel
of $55.86 or $1.33 per gallon. At the time the FY 1982 budget was
submitted, the DoD estimate for FY 1981 was $51.24 or $1.22 per
gallon. The Committee reduced the FY 1981 request by three cents
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per gallon thereby providing funding in FY 1981 at $49.98 per
barrel.
Since the Committee action, the Department has experienced a
softening of fuel prices. For the first 10 months of the year fuel
costs averaged about $47.00 per barrel, almost $3 per barrel less
than estimated. If that average prevails for all of FY 1981, the total
costs of fuel will be approximately $543 million less than estimat-
ed. This excess is not used to fund programs not approved by the
Congress. Instead, it is retained as a cash balance in the DoD Stock
Fund.
All DoD fuel purchases are made through the Stock Fund. The
Stock Fund "sells" the fuel to the "customers," at a stabilized
price, i.e., the price approved by the Congress in the budget. As
indicated in the table above, most of the customers are funded in
the Operation and Maintenance accounts. Under the stabilized
price concept, the difference between DoD costs and the stabilized
price are reflected in the stock fund as a gain or* loss, with a
corresponding increase or decrease in cash. Prices in future years
are established so as to take into account the results of previous
years, and the cash position of the Stock Fund. Generally, prices
are set so as to have a 15 day cash position during the year. The
FY 1982 stock fuel price of $1.33 per gallon included 3 cents per
gallon to increase Stock Fund cash.
Based on the 10 months experience in FY 1981 and current fuel
costs of $47 per barrel, the FY 1982 estimates appear overstated.
The Committee has adjusted the DoD request by 9 cents a gallon:
This will fund a "composite" barrel of fuel at $52 in FY year 1982,
an increase of 10% over the current level.
The Committee recognized the uncertainties inherent in estimat-
ing fuel prices. However, the procedures previously approved by
this Committee will insure that readiness related programs will not
be affected by this reduction. The Department has already stabi-
lized its fuel products at the price included in the budget. Changing
prices at this late date would disrupt orderly execution of the
program. We expect the Department to continue to execute at the
published prices. This should generate cash in the Stock Fund. The
Stock Fund should be in a position to provide a refund to the
customer accounts in the amounts reduced by the Committee. The
price provided for in the bill ($52 per composite barrel) should be
sufficient to cover expected fuel price increases in FY 1982. There
is, however, always the possibility that the world oil markets could
be unexpectedly upset or that OPEC will be able to force a higher
price. If the cost of fuel exceeds the $52 per barrel cost and the
Stock Fund has not generated the cash to provide the refund
included in the Committee estimate, DoD can invoke R.S. 3732 to
cover the difference.
In discussing this procedure with DoD representatives, the Com-
mittee became aware of a potential cash problem in the Stock
Fund, unrelated to fuel costs. Because of the significant increases
taking place in force levels, activity and the other increases in
customer funding, the Stock Fund managers are projecting sizable
increases in inventory requirements. DoD would normally utilize
the cash generated by the overpricing of fuel to compensate for this
requirement. However, while recognizing that DoD has the respon-
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sibility and authority to manage the overall cash in the Stock Fund
to avoid disruption of Stock Fund procurement, we do not believe
that the sizable buildup in Stock Fund inventories should be ac-
complished through the pricing mechanism. Instead, DoD should
request direct appropriations into the Stock Fund. Since the Com-
mittee has not had an opportunity to review these new require-
ments, we are not in a position to provide the appropriations in
this bill. The Committee expects DoD to request direct appropri-
ations to the Stock Fund in FY 1983. Meanwhile the Department is
encouraged to provide advance payment on FY 1982 orders to
alleviate the cash problem during the current fiscal year.
The Committee action takes into account the September Revision
which reduced the amount in the budget for fuel by $128 million.
The following tables provide more information on the FY 1982
proposed fuel procurement and the Committee adjustments:
ESTIMATED SAVINGS ASSOCIATED WITH REVISED FUEL COST
ESTIMATES
Millions
Operation and Maintenance, Army .............................................................................. $19
Operation and Maintenance, Navy .............................................................................. 181
Operation and Maintenance, Marine Corps ............................................................... 4
Operation and Maintenance, Air Force ....................................................................... 233
Operation and Maintenance, Navy Reserve ............................................................... 11
Operation and Maintenance, Air Force Reserve ....................................................... 10
Operation and Maintenance, Air National Guard .................................................... 32
R.D.T. & E. Army ............................................................................................................. 3
R.D.T. & E. Air Force ...................................................................................................... 3
R.D.T. & E. Navy-(Industrial Fund Payment) ......................................................... 3
Total ........................................................................................................................ 499
FUEL (SUMMARY CONSUMPTION AND COST DATA)
Fiscal year
1980
Fiscal year
1981
Fiscal year
1982
Fuel Consumption (Mil. BBLS):
0&M .......................................................................................................................
134.9
142.1
147.2
Industrial Funds ......................................................................................................
34.5
36.9
39.2
RDT&E ....................................................................................................................
2.4
2.2
2.2
Family Housing .......................................................................................................
2.2
2.2
2.2
Total ..................................................................................................................
174.0
183.4
190.8
Fuel Cost ($ Mil.):
O&M ........................................................................................................................
5,816.9
7,082.4
8,182.7
Industrial Funds .......................................................................................................
1,397.9
1,745.0
2,055.3
RDT&E .....................................................................................................................
104.1
104.5
117.0
Family Housing .......................................................................................................
108.6
111.1
124.2
FUEL (CONSUMPTION AND COST BY PRODUCT)
Consumption (By product) (Mil. BBLS):
AIGAS .....................................................................
.7
.7
.7
.8
.6 .7
Sp Fuels 1 ..............................................................
.5
.5
.5
.5
.6 .6
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FUEL (CONSUMPTION AND COST BY PRODUCT) -Continued
Leaded ....................................................................
2.4
2.6
2.5
2.7
2.5
2.7
Unleaded .................................................................
2.0
2.6
2.2
2.8
2.3
2.9
JP-4 .......................................................................
3.4
96.6
73.4
95.9
77.8
101.9
JP-5 ......................................................................:
76.7
17.5
17.8
18.8
18.3
19.3
JP-8 .......................................................................
11.8
2.4
2.2
3.5
3.0
4.4
Distillate ..................................................................
2.9
39.8
36.6
45.1
36.2
45.1
Residual ..................................................................
34.5
11.0
6.0
13.4
6.0
13.3
Sp Fuels 2 ..............................................................
.1
.1
.1
.1
.1
.1
Cost (By Product ($ Mil.):
AVGAS .....................................................................
32.7
36.6
42.2
45.4
38.4
41.8
Sp Fuels 1 ..............................................................
27.4
29.3
32.0
32.0
38.7
38.1
Leaded ....................................................................
119.8
128.7
132.0
141.8
136.6
146.9
Unleaded .................................................................
106.6
138.3
119.7
152.3
128.6
163.1
JP-4 .......................................................................
2,897.8
3,815.6
3,577.3
4,670.0
4,247.8
5,563.0
JP-5 .......................................................................
708.8
740.6
951.9
1,000.2
1,093.8
1,148.3
JP-8 .......................................................................
124.0
170.7
127.0
198.2
185.3
274.9
Distillate ..................................................................
1,643.3
1,989.6
1,875.4
2,310.0
2,080.7
2,594.2
Residual ..................................................................
151.3
373.0
219.6
488.0
225.7
501.0
S~ Fuels 2 ..............................................................
5.2
5.2
5.3
5.3
7.3
7.3
Total ...................................................................
5,816.9
7,427.6
7,082.4
9,043.2
8,182.9
10,479.2
FUEL (COMPOSITE PRICE BY APPROPRIATION CATEGORY)
Composite price:
ON ................................................................................................
1.03
43.12
1.19
49.83
1.32
55.58
Industrial Fund ................................................................................
.97
40.57
1.13
47.26
1.25
52.50
RDT&E ............................................................................................
1.04
43.81
1.15
48.39
1.27
53.53
Family Housing ...............................................................................
1.19
49.99
1.22
51.26
1.37
57.52
Total ......................................................................................
1.02
42.84
1.19
49.89
1.33
55.86
Fiscal year 1980 Fiscal year 1981 Fiscal year 1982 Price recommended in
the bill
AVGAS ......................................................
1.14
47.88
1.41
59.22
1.50
63.00
1.43
60.06
Leaded .....................................................
1.20
50.40
1.26
52.92
1.32
55.44
1.26
52.92
Unleaded ..................................................
1.25
52.50
1.29
54.18
1.35
56.70
1.29
54.18
JP-4 ........................................................
.94
39.48
1.16
48.72
1.30
54.60
1.23
51.66
JP-5 ........................................................
1.01
42.42
1.27
53.34
1.42
59.64
1.35
56.70
JP-8 ........................................................
1.67
70.14
1.35
56.70
1.49
62.58
1.42
59.64
Distillate ...................................................
1.19
49.98
1.22
51.24
1.37
57.54
1.30
54.60
Residual ...................................................
.81
34.02
.87
36.54
.90
37.80
.87
36.54
Spec Fuel 1 ..............................................
1.29
54.81
1.47
61.90
1.67
70.14
1.60
67.20
Spec Fuel 2 ..............................................
1.35
56.70
1.57
65.94
1.74
73.08
1.67
70.14
Composite .................................................
1.02
42.84
1.19
49.89
1.33
55.86
1.26
52.92.
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JCS EXERCISES
The Reagan Administration Budget contained major increases
for Joint Chiefs of Staff directed and coordinated exercises. The
original budget proposal was to increase the program from the $180
million level in fiscal year 1980 to $485.3 million in fiscal year
1982. The Committee's review of this estimate determined that it
would be exceedingly difficult to conduct an exercise program of
this size in fiscal year 1982 in lieu of the major increases in other
(non-JCS directed and coordinated) exercises also scheduled. In
fact, the original plan was so large that the Military Airlift Com-
mand could not fly the entire program and still conduct necessary
training and support of the overseas air logistics system. The origi-
nal plan called for 62,000 C-141 equivalent flying hours of which
the MAC was programmed to fly 45,000 with the balance being
flown by commercial aviation. Because of the capability problem
and the problem of finding suitable host nations in which to con-
duct some of these exercises, the administration recommended a
$79.4 million reduction in September. The Committee has increased
this reduction by $33 million, $18.0 million in the Army O&M
appropriation and $15.0 million in the Air Force appropriation. In
addition, the bill as reported by the Committee transfers the trans-
portation related funds from the individual military service appro-
priations to the JCS (Defense Agency) appropriation where they
can be managed, supported, and defended by the Joint Chief of
Staff.
THRUST MANAGEMENT/THRUST COMPUTING
In January 1981, the Committee asked the General Accounting
Office to follow-up on previous efforts by the Defense Audit Service
on the use of thrust/power management for jet aircraft. A prelimi-
nary report from the General Accounting Office dated October 27,
1981 (B-204813) dealt primarily with one particular system for
measuring installed engine thrust. The analysis shows that accu-
rate measurement in setting of thrust for installed jet engines is of
vital importance not only for aircraft readiness and safety but also
for operation and maintenance cost reductions. The Air Force has
conducted extensive tests that will measure thrust of installed J85-
5 engines but has not implemented a program to do so. The Navy
has not performed any test to determine whether its aircraft jet
engines might benefit from a similar system. Engines trimed to
minimum required installed thrusts operate at lower temperatures,
which increases engine life and improves operational readiness.
Also, safety of flights can be enhanced, particularly on take-off,
when a mechanic has the ability to readily check and set installed
engines to required thrusts.
The Air Force has recently experienced major problems in at-
tempting to deal with the thrust management problem on its high-
est technology aircraft engine (the F-100) installed in F-15 aircraft.
Engine durability has been much lower than expected and the Air
Force responded by making a parts-saving decision to down-rate
the F-100 that would produce 96 percent, plus or minus 2 percent
of rated thrust. Unfortunately, the Air Force has no simple way to
measure the thrust of installed engines and the procedures are
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difficult. Because of the inability to measure installed thrust, it has
been estimated by the Air Force that as many as 15 percent of the
F-15 aircraft are operating below the detuned performance levels
with some aircraft 15 percent below these levels. At this point
aircraft safety could become a factor.
Based upon extensive testing of the system designed for the J85-
5 engine, the Air Force estimates that it could save about $4.7
million annually in hot section parts and probably an equal
amount in fuel savings. In addition safety can be enhanced by
insuring that no aircraft are operating significantly below perform-
ance standards.
Although the Air Force has decided to implement the thrust
computing system for its J85-5 engines no funds for this effort
were requested in the fiscal year 1982 budget. If funds are not
made available soon, the system may never be implemented be-
cause the contractor has already waited two years while the Air
Force made up its mind on the system. The GAO states that if
funding is not provided, "the Air Force will lose millions of dollars
already invested in the program in addition to the millions in
projected savings, but more importantly, failure to implement the
system may reduce aircraft readiness." In view of this situation the
Committee has added $9 million to the aircraft modification pro-
gram to complete the J-85-5 thrust computing work.
The GAO will continue its work in reviewing thrust manage-
ment, thrust computing and engine monitoring systems for the
Committee.
CIVILIAN PERSONNEL
The budget for the Department of Defense proposes a moderate
increase in civilian personnel end strength numbers. This is in
contrast to a steady decline throughout the decade of the 1970's.
The Committee believes that the civilian personnel ceilings have
served as a deterrent to the effective and economical execution of
the Defense budget. Because of the ceilings, the Department has
had to depend on consultant contractors to perform technical engi-
neering and management support services. Efforts in shipyards,
depots, and repair facilities appear to be adequately funded but
undermanned because of the personnel ceiling.
The responsibility for lower than adequate Defense personnel
levels rests with the Administation. The two percent latitude in
civilian personnel hiring provided by the Congress would easily
allow the Defense Department to man all of its requirements. The
Administration, through the OMB, continues to impose artificial
ceiling constraints on programs that the Congress has fully funded.
An increase of from ten to twenty thousand (10,000-20,000) spaces
would allow the Department to perform its mission with no in-
crease in funding and with a corresponding decrease in consulting
contracts.
Keeping in mind the Administration's policy of increased De-
fense readiness, the Committee urges that civilian personnel ceil-
ings for the Department of Defense be eliminated. Otherwise the
logic of major funding increases for defense provided in this bill
make little sense. Obviously, the amounts requested by the Admin-
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istration in 1982 exceeded the work level that could be executed
because of the civilian personnel limitation 'in many areas.
The following table provides a summary of civilian employment
in the DOD by appropriation:
Army:
O&M, Army .............................................................................................................
183,128
183,992
189,825
O&M, Army National Guard .....................................................................................
25,284
22,971
22,827
0&M, Army Reserve ................................................................................................
12,330
12,636
12,668
RDT&E .....................................................................................................................
19,898
19,665
19,358
Army Industrial Fund ..............................................................................................
62,622
64,749
64,816
NBPRP ....................................................................................................................
14
17
17
Military Construction, Army .....................................................................................
6,893
7,098
7,137
Military Construction, Army Reserve .......................................................................
113
121
121
Military Family Housing ..........................................................................................
1,160
1,129
1,126
MAP ........................................................................................................................
353
364
364
Total, Army direct hire .......................................................................................
311,795
312,742
318,259
Total, Army indirect hire ....................................................................................
48,713
57,891
63,057
Total, Army end strength ...................................................................................
360,508
370,633
381,316
Navy/Marine Corps:
O&M, Navy .............................................................................................................
113,829
116,653
111,090
O&M, Marine Corps .................................................................................................
15,111
15,135
15,005
O&M, Navy Reserve ................................................................................................
2,682
2,740
2,924
O&M, Marine Corps reserve ....................................................................................
142
144
201
RDT&E .....................................................................................................................
2,315
2,484
2,523
Military Construction, Navy .....................................................................................
2,634
2,575
2,627
Navy Industrial Fund ............................................................................................... ?
159,684
165,371
166,257
Marine Corps Industrial Fund ..................................................................................
1,335
1,318
1,318
Laundry Service, Naval Academy ............................................................................
89
82
42
Military Assistance Executive ..................................................................................
163
169
170
Total, Navy/MC direct hire .................................................................................
297,984
306,671
302,157
Total, Navy/MC indirect hire ..............................................................................
10,727
10,838
10,832
Total, Navy/MC end strength .............................................................................
308,711
317,509
312,989
Air Force:
O&M, Air Force .......................................................................................................
138,015
138,232
139,352
O&M, Air Force Reserve ..........................................................................................
10,681
10,957
11,589
O&M, Air National Guard ........................................................................................
23,529
23,212
23,536
RDT&E .................................................................................................:...................
18,628
18,827
18,844
Air Force Industrial Fund ........................................................................................
40,085
39,350
40,903
Total, Air Force direct hire .................................................................................
230,938
230,578
234,224
Total, Air Force indirect hire ..............................................................................
13,404
13,256
13,129
Total, Air Force end strength .............................................................................
244,342
243,834
247,353
Defense Agencies:
O&M, Defense Agencies ..........................................................................................
72,656
17,426
78,423
Court of Military Appeals ........................................................................................
39
49
49
RDT&E ....................................................................................................................
719
806
799
Defense Industrial Fund ..........................................................................................
1,611
1,638
1,602
MAP ........................................................................................................................
77
90
87
Total, Defense Agencies direct hire ....................................................................
75,102
80,009
80,960
Total, Defense Agencies indirect hire .................................................................
1,719
1,915
1,882
Total, Defense Agencies end strength ................................................................
76,821
81,924
82,842
Total, direct hire .................................................................................................
915,819
930,000
935,600
Total, indirect hire ..............................................................................................
74,563
83,900
88,900
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By appropriation category-operation and maintenance:
Direct Hire ..............................................................................................................
597,529
604,246
607,548
Indirect Hire..! .........................................................................................................
72,566
81,644
86,174
Subtotal O&M .........................................................................................................
670,095
685,890
693,722
Industrial and Management Fund ............................................................................
265,997
273,259
276,097
Research, Development, Test & Evaluation .............................................................
41,562
41,786
41,528
Military Construction ...............................................................................................
12,124
12,335
12,525
Military Assistance ..................................................................................................
604
630
628
Total ...................................................................................................................
990,382
1,013,900
1,024,500
FEDERAL EMPLOYEE INJURY COMPENSATION SYSTEM
In past years, the Committee has expressed its concern over the
escalating cost of the federal employees compensation program and
expressed a need for corrective action by the legislative and execu-
tive branches. In fiscal year 1979, the Committee placed a general
provision in the bill for the first time which limited payments that
the DoD can make to the Department of Labor for the federal
employee compensation fund at $170.6 million in lieu of the $182.1
million requested at that time. Each year the Committee has con-
tinued such a limitation awaiting improvements in administrative
procedures. There are indications that the Department of Labor
has tightened up these requirements and has made some steps in
reducing the numbers of personnel on the disability compensation
roles. In June 1981, the Secretary of Labor transmitted to the
Congress a number of proposals to lower costs of the program. The
draft bill, "The Federal Employee's Reemployment Compensation
Amendments of 1981," is designed to assure that federal workers,
disabled as result of their employment are returned to gainful
work as soon as possible. This legislation is designed to: (1) alter
the compensation rate for disability to 80 percent of spendable
income which is defined as gross pay less standard tax deductions;
(2) establish a seven work day waiting period before a claimant
with a traumatic injury could receive compensation benefits in
order to promote the return to work of employees with less serious
disabilities; (3) authorize agencies to advance compensation to em-
ployees when there is medical information pointing to serious dis-
ability; (4) make mandatory the cut-off of disability benefits of an
employee who unjustifiably fails to accept rehabilitation; and (6)
authorize employing agencies to withhold from the pay of an em-
ployee who has returned to work the amount of compensation
overpayments made, if any, in order to help assure that such
amounts are collected.
Since the Committee's policy of recent years has been to reduce
the amount paid by the DoD into the employee compensation fund
to an amount equal to the average cost increase of the direct labor
for that year in order to encourage passage of legislation similar to
that described above, the Committee is once again proposing to
limit DoD's payment. The Committee is recommending a payment
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of $206.1 million to the fund in lieu of the $229.5 million requested.
This is an increase of approximately 7 percent from the $192.8
million provided in FY 1981. Section 735 of the bill contains this
limitation.
CIVILIAN PERSONNEL PROGRAM EVALUATION
In January 1981, the Defense Audit Service completed a review
of DoD civilian personnel program evaluation systems. In accord-
ance with a 1969 Office of Personnel Management directive, each
of the military departments established a civilian personnel pro-
gram evaluation function. The civilian personnel program evalua-
tion systems established by each military department differ sub-
stantially in organization, structure, staffing and methods of pro-
viding oversight of civilian personnel activities to higher levels of
management. The auditors found that none of the military depart-
ments routinely provided the results of individual on-sight reviews
to the Office of the Assistant Secretary of Defense (Manpower,
Reserve Affairs and Logistics) for DoD-wide assessment. In general,
it was found that the value of these reviews in terms of the policy
evaluation and development process was marginal. Considering the
$3.5 million annual cost the Committee recommends that such
efforts be cut back. It is difficult to understand how the reviews
can have much impact in changing federal government civilian
personnel policy if their results are not provided to higher manage-
ment levels in a meaningful format for assessment and eventual
transmittal to the Office of Personnel Management. Accordingly a
reduction of $1.6 million is recommended in the bill.
REEMPLOYMENT TRAVEL BENEFITS
In 1954, Congress passed Public Law 83-737 (5 U.S.C. 5728 (a)).
This law provides that the government will pay round trip ex-
penses for employees and their immediate families from their post
of duty outside the continental United States to their places of
residence at the time of employment for transfer to such posts, so
that these.employees can take leave. Employees recruited in the
United States for duty in Hawaii, Alaska, Puerto Rico or the
territories and possessions are eligible for the annual vacation
leave travel. The largest portion of the cost of this travel is for
personnel recruited within the continental United States who are
employed in Hawaii.
According to the Defense Audit . Service, 814 eligible employees
have been in Hawaii an average of 12 years and as long as 38
continuous years. The current estimated total cost for all areas for
all government agencies is in excess of $2.5 million annually.
The bill contains a general provision which will limit the number
of such trips to one per eligible employee during his employment in
the affected areas. The Department of Defense, the General Serv-
ices Administration and the Office of Personnel Management sup-
port changes in the law which will restrict such travel. Employees
would retain their entitlement for transportation back to the conti-
nental United States if their employment were terminated. They
will also have the benefit of one free vacation trip during the tour
at an "overseas" location.
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SUPPLY AND OTHER LOGISTICS ACTIVITIES
The DoD has placed most of its priorities and funds in areas of
R&D and the procurement of weapons systems. The logistical sup-
port for those weapons systems on-line or coming into the inven-
tory has been sorely neglected for many years. The Appropriations
Committee has practically begged DoD in years past to submit
adequate budgets for operating spares. This problem has been rec-
ognized and successfully dealt with in the last two Defense budgets.
The logistics segment of DoD's readiness posture while receiving
lower funding priority does receive more than its share of "man-
agement systems." DoD employs legions of accountants and com-
puter programmers to track funds passed between and among var-
ious DoD activities. The complexity of the systems created by these
accountants and computer programmers boggles the mind. Stock
funds (at least 20 separate systems), numerous industrial funds,
vast systems of property accountability, and control have turned
combat commanders into clerks who read and respond to volumi-
nous products produced by the accountants and programmers. In
spite of this effort, the Investigative Staff found that the 82nd
Airborne Division, the Army's premier combat outfit, frequently
failed to submit requisitions for material they needed (material
which was readily available at Army depots) due to the fact that
they did not have sufficient Army O&M funds to procure the item
from the Army stock fund!
Each military service has its own supply capability, supplement-
ed by the Defense Logistics Agency and the General Services Ad-
ministration. Duplication, overlapping, and even waste abounds in
this area, and attempts by OSD to make improvements in supply
management and reduce costs have met with great resistance on
the part of the military services. As a consequence, the DoD is
saddled with myriad inefficient and costly supply systems.
The following section of the report addresses supply and other
logistics activities in more detail. Included are discussions of spare
parts provisioning, positioning of spares, inventory control proce-
dures, procurement of non-standard/non-stocked items, consumable
item management, loss and theft of equipment government fur-
nished material, etc. The Committee has allocated a general reduc-
tion of $54.2 million to the various O&M appropriations. There is of
course the potential for saving hundreds of millions of dollars
annually if the shortcomings, mismanagement and waste docu-
mented on the following pages could be eliminated.
SPARE PARTS PROVISIONING
The military services maintain inventories in order to furnish
requested material within specified leadtimes and to meet surge
mobilization requirements when an emergency requires it. With
needed inventories on hand at depots, the customers (using organi-
zations) do not have to wait for their needs to be satisfied by a
manufacturer. Since the inventory manager's mission is to satisfy
the customer's request in a timely manner, he must place orders
with the manufacturers and receive the material in advance of
customer's requests. To do this, the inventory manager must be
able to forecast customer's future needs or requests.
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The most accurate method of forecasting these requirements is to
know which items in what quantities have failed or were needed in
the past-historical evidence or prior experience. As long as the
same systems remain in use and perform like functions or missions
in similar environments, requirements to support them in the
future will statistically approximate prior experience.
When new weapon systems are brought into the military serv-
ices, spare parts must be procured and placed at the various orga-
nizational levels to support those systems during their initial de-
ployment. The range and quantities of the new spare parts in most
instances are determined on the basis of engineering or other
technical estimates, since past requirements experience is not
available. This process is known as initial provisioning.
Failure to complete provisioning review
DoD directives state that after an item has been used in an
operational environment for 2 years, the use of estimated factors is
prohibited. They also state each responsible organization will main-
tain a 2-year history of part numbers, and stocked and nonstocked
item requisitions received by the inventory control managers for
the purpose of identifying for review and possible stockage of those
items which subsequently meet DoD stockage criteria on the basis
of actual demand.
In the Army, this subsequent determination of the range and
quantities of items to be included in the inventory for support of
additional systems operationally introduced is supposed to be based
on a "post provisioning review." This review is to be conducted 12
to 18 months after initial deployment of a weapons system which
begins the Demand Development Period (DDP). It is to be a valida-
tion of the adequacy and validity of selection of the range and
quantity of spare parts made in the initial provisioning. Further-
more, this review requires that revisions to the initial provisioning
be made as expeditiously as practicable.
In general, the military services have not been determining their
requirements for spare parts subsequent to initial provisioning-on
actual failure/demand rates. The military services should be using
actual data for computing requirements at 24 months of experience
after initial deployment and thereafter.
The Army's Blackhawk helicopter was first fielded in October
1978; however, the Army indicated its DDP would run from No-
vember 1979 to January 1982. The Army has been using contractor
support and has received very little operational demand data for
the spare parts needed to support this system. The Navy plans to
assume supply support responsibilities from the contractor for the
F/A-18 aircraft in October 1982 and only then will it begin its
DDP. This is approximately 21/z years after the first aircraft
became operational. -
As a result, actual operational demands will not be used com-
pletely to compute requirements for spares to support these Army
and Navy systems for approximately 4 years after their initial
deployment. These years are arrived at by computing the -time
frame from the date of first delivery (to a unit for operational -use)
to 2 years after the service planned date of beginning its DDP. The
rationale for using actual operational data as soon as possible is
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65
evident from the failure rates experienced by the Air Force for the
F-16.
In its March 19, 1980, report on Repair Parts Provisioning at the
Army Missile Command (MICOM), the Army Audit Agency dis-
closed that provisioning reviews were not being made to determine
whether the kinds and quantities of repair parts supplied to sup-
port past deployments of the end items were correct or should be
revised for use in future deployments. Army Regulation 710-1 pro-
vides that when the extent of failures, as shown by the number of
demands for a part, varies from the initial failure factor used for
initial provisioning estimates, a review should be made to deter-
mine the causes and adjust the estimates to be used in the future.
Army Audit stated significant differences existed between estimat-
ed and actual failure rate for over 15,000 repair parts. Further-
more, the Army Audit Agency found 23 of 100 highly demanded
repair parts were not even listed on the support list allocation
cards. These cards identify the items and quantities estimated to be
needed for support during the initial deployment period.
The report stated, because most failure factors were not reviewed
and updated as required, there was no assurance the range and
quantity of repair parts and components to be provided on future
deployments of the same weapon systems would be corrected.
OSD has stated that present policy allows for the transition to
use of actual experience in the requirements computation and this
transition should be made as soon as possible, with a maximum
allowable time of 2 years. Discussions with DOD officials indicate
although this is the stated policy, OSD has no management con-
trols, other than internal or GAO audits, to effectively ensure the
policy is carried out as intended.
CANNIBALIZATION AND "HANGAR QUEENS" DOD SOLUTION TO
SPARE PARTS PROVISIONING FAILURES
Cannibalization is a short term fix. It is extremely expensive in
terms of man-hours, because the part must be removed and re-
placed twice instead of just once. Because a good part may be
damaged during removal, the overall spares requirement generated
by cannibalization will be more than one-for-one in the long run.
"Hangar queen" is the term applied to a piece of equipment that
is deadlined and then "plundered" of its parts to make another
piece of equipment operational. Any aircraft deadlined more than
21 days because of the lack of spares is designated a "hangar
queen.
The services are concerned over cannibalization and "hangar
queens." The pressure of maintaining a high readiness posture and
the failure of the logistics system to provide critically needed
spares, has forced cannibalization combat units. It is a very expen-
sive proposition when seven aircraft, costing $20 million each are
on "static display" due to lack of spare parts (some costing as little
as $5).
This results in the following situations:
At one A-10 base 60 percent of the parts used to repair
grounded aircraft were obtained by cannibalization.
Of 151 parts on order for the A-10s TF-34 engine 75 of the
orders were the result of cannibalization.
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66
The F-15 aircraft still experiences very high cannabilization
and higher hangar queen rates only through intensive "man-
,agement" have the rates been kept from going even higher.
A lack of spare parts for helicopter engines, in part because
the manufacturer is overcommitted to producing M-1 tank
engines has reduced the operational readiness of Army helicop-
ters in Europe.
The F-16 is experiencing a cannibalization rate of 1.5 per-
cent per 100 sorties and maintenance personnel estimate that
it will reach 30 per 100 sorties.
Ten percent of F-111's are hangar queens.
The M-730 tracked vehicle for the CHAPARRAL missile
system which has been in the Army inventory in large number
for over a decade has serious parts shortages. It is not uncom-
mon to tow the M-730 into field positions.
Even less sophisticated standard commercial items such as
the Dodge (M-880) pickup truck cannot be maintained.
The Army accepted from a contractor a circuit card for the
HAWK system that was unreliable and placed the so called
improved HAWK at a zero operational ready rate for a period
of time.
POSITIONING SPARE PARTS
The Air Force Logistics Command (AFLC) has not positioned its
spare parts inventories at the air logistics centers which could best
service customers while still minimizing distribution cost. Most of
this inventory is first stored at an air logistics center with item
management responsibility, and then shipped long distances to
using activities located at or near air logistics centers. The Air
Force can save up to $28.7 million on inventory investment costs
and $1.8 million yearly in handling, transportation, and inventory
holding costs by storing spare parts at the air logistics center
located nearest the ultimate user. The Air Force reports limited
progress in correcting this situation.
A serious lack of spare parts has degraded the operational readi-
ness status of DOD's weapon systems. This tragic state has resulted
from the military services' mismanagement of the provisioning,
procurement, and budgetary processes. The military services must
shoulder the blame themselves. Their failures to (1) conduct the
required post provisioning reviews, (2) respond to documented pro-
visioning and procurement abuses, and (3) develop accurate re-
quirements for spare parts, have jeopardized the readiness of front-
line weapon systems.
While many DOD officials point to a declining industrial base as
the cause of the shortage of spare parts, the DOD provisioning
procedures are also a major cause for this situation.
The production of new weapon systems is primary, the support of
existing systems is secondary. Replenishment of spares takes a
"back seat" to getting new weapon systems deployed to field units.
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67
INVENTORY CONTROL PROCEDURES AND PRACTICES
Validation of Outstanding Requisitions
DOD and the military services have established procedures for
reconciliation and validation of outstanding requisitions. The pur-
pose is to identify requisitions for supplies and materials no longer
needed. These procedures are inconsistent, overlapping, and dupli-
cative and they have not been effective. As a result, requisitions for
material no longer required have not been cancelled and, converse-
ly, valid requisitions have been erroneously cancelled-seriously
delaying the receipt of needed supplies by combat units.
Over the years, numerous GAO, DOD, and military service audit
reports have demonstrated the inadequacy of the reconciliation
validation procedures, particularly the lack of understanding of the
concept of the reconciliation/validation process and the perfunc-
tory performance by personnel involved. The reports demonstrated
the resulting procurement or stockage of unneeded materials worth
hundreds of millions of dollars through the failure to promptly
cancel requisitions for unneeded materials.
Many of the findings of the earlier reports will be reiterated in
two reports soon to-be issued by GAO and the Army Audit Agency
(AAA). A synopsis of these findings follows.
-Requisitioning activities do not always furnish listings or cards
of outstanding requisitions to the end-user.
-When listings or cards were furnished to the end-user, they are
not always returned and the requisitioning activity does not
followup.
-Review for continuing need of an item by the requisitioner is
perfunctory.
-End-users do not always report receipt of materials requisi-
tioned.
-End-users do not request cancellation of requisitions filled by
other means such as lateral transfer from another organiza-
tion, substitution, repair, etc.
-Cancellations attributed to the reconciliation/validation proc-
esses are overstated because-
many (67 percent) of the cancellation reported resulted
from normal day-to-day operations rather than the reconcili-
ation/validation processes,
y, the Army, unlike other military services, included requisi-
tions for major end items in its reconciliation/validation
processes (these accounted for only a small percentage of the
number of cancellations but a large percentage of the dollar
value of cancellations) and these requisitions should not be
included,
rejected requisitions are counted as cancellations although
they were usually corrected and put in subsequently as new
requisitions, and
cancellations are included in the reported statistics al-
though the material had been received and were duplicates
of previous normal day-to-day operations cancellations.
-Cancellations, particularly automatic cancellations for nonre-
sponse, are frequently reinstituted in a subsequent period.
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68
-Requisitioners requested cancellation without regard to the
dollar value of the requisition or supply status of the material
although the ICP will not cancel a requisition if (1) there is a
record of a transportation release at the depot and the dollar
value is less than $25 or (2) the item is backordered for direct
delivery procurement and the dollar value is less than $50.
The Committee's Investigative Staff observed similar findings
during its review. As described above, the . impression is clearly
drawn of a harrassed stock clerk, repetitively shuffling through his
dog-eared files to satisfy the requirements of the various reconcili-
ation and/or validation processes to the extent that normal day-to-
day requisitioning and cancellation are not accomplished promptly,
if at all. These processes are inconsistent, overlapping, and duplica-
tive in that the ages of requisitions, types of requisitions, sources of
supply, and cycles vary.
The Investigative Staff concludes that (1) time and effort is de-
voted to procedures which provide little more than a records-to-
records check between the wholesale and retail supply levels, (2)
reported savings resulting from the procedures are exaggerated
and misleading, and (3) standardizing and strengthening of proce-
dures under a single monthly "bottom-up" process offers the best
chance for a viable user validation program. The various inconsist-
ent, overlapping, duplicative, and time-consuming efforts for top-
down, bottom-up, and other periodic reconciliation/validation proc-
esses should be eliminated in favor of a single standardized valida-
tion process. The reconciliation function should be accomplished in
a time frame which takes into account the capabilities and needs of
all the parties involved. Most importantly, specific procedures and
training should be provided to personnel involved in the process.
The Committee urges the Department to get on with the process of
standardizing the supply validation process in the interests of
saving money and at the same time improving supply support.
MATERIAL RETURN PROGRAM
The Department of Defense has a standard program for manag-
ing material eligible to be returned to the wholesale supply system
that has been in effect for about two years. While the new system
is an improvement in that it .provides wholesale managers with
better visibility of retail stock, the Defense auditors determined
that significant savings could be achieved if wholesale managers
did not instruct activities holding the stock to ship it, including
excess material, to a supply depot but instead directly to a custom-
er who had a back ordered requisition for the material. There is a
need'to build into this system changes which preclude unnecessary
handling of material excess to one activity but required at another
activity.
The auditors estimate that correcting this problem can save at
least $5.8 million annually in unnecessary shipping and handling
costs. In addition they identified another $2.6 million in savings to
be achieved simply by instructing military activities to retain in
storage material which they report as excess to that. activity and
which is also excess to the wholesale management requirements.
There is also 'a tendency to throw good things away (disposal
actions) and buy the same thing at the same time. DOD and Air
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Force auditors reported that the Air Force has a policy which
permits wholesale managers to authorize disposal of material when
wholesale assets exceeded the wholesale approved force acquisition
objective, without consideration of the wholesale retention level.
This policy was contrary to DOD instructions. It was estimated
that the Air Force made some 98,000 unauthorized disposal actions
annually. The Defense auditor concluded "that as many as 122,000
disposals of defected material, worth at least $2.4 million, were
authorized annually which may be required to support operational
equipment."
The Air Force can save at least $1.0 million annually by shipping
items in need of repair directly to the repair center (either ALC or
a contractor facility) rather then returning material to the logistic
center with management responsibility for the item. The Air Force
is in the process of attempting to correct this problem.
EXCESS MATERIAL AND SUPPLIES RETAINED AT NAVY INDUSTRIAL
ACTIVITIES
Navy industrially funded activities (shipyards, aircraft repair
facilities, weapons stations, etc.) continue to retain material and
supplies far in excess of amounts permitted by the Navy controller
manual. Despite repeated findings by the Navy Audit Service these
activities continue to expand their shop stores or materials and
supply accounts in excess of inflationary increases. Causing the
Navy-wide total to grow from $249.2 million at the end of fiscal
year 1979 to $304 million at the end of fiscal year 1980.
Material inventories maintained at the Navy Air Rework Facili-
ty, Cherry Point, North Carolina, have consistently been above
that authorized to meet the production demands of the facility.
Navy auditors reported this situation in February 1978. Subsequent
to that report, the inventory has increased 58 percent in value to
$10.3 million at the time of the next audit and excesses on hand at
that time were $6.6 million or 64 percent of the Cherry Point
NARF's total inventory. Despite statements that the unneeded ma-
terial inventory would be reduced, it in fact grew to $11.2 million
by the end of fiscal year 1980. The Navy could not tell the Commit-
tee how much of these excesses had been returned to the supply
system and how much was sent to property disposal.
In fact, accounting for supplies at least in the aircraft portion of
the Navy industrial system has deteriorated despite the introduc-
tion of an elaborate Industrial Material Management System. This
system records material transactions and accounting data and con-
trols inventory range and depth based on accepted Economic Order
Quantity Inventory Control Principles. This system costs about one
million dollars annually to operate.
The Committee estimates that one time savings of $30 to $40
million are possible through proper management of material inven-
tories at Navy Industrial Activities.
NON-STANDARD/NON-STOCKED ITEMS
In addressing the matter of invalid requests for non-standard/
non-stocked items through the supply system, last years Committee
report (No. 96-1317) stated that: `Based upon these findings, the
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70
Committee directs that the DLA place in effect a challenge system
on these requisitions until such time as the customers (military
services) have a valid requisition rate for nonstandard/nonstocked
items which exceeds 90 percent for at least 18 months." DoD has
done nothing to comply with the Committee's direction on this
matter.
Recently the Committee Surveys and Investigations Staff re-
viewed procedures for requesting these types of items by interview-
ing numerous DoD officials at Inventory Control Points and at the
working level, and determined that if nonstandard and nonstocked
requisitions are "challenged" for validity from the Inventory Con-
trol Point back to the requisitioner, savings in unnecessary pro-
curement could exceed $140 million annually.
The Defense Audit Service (DAS) found in June 1979 the Defense
Logistics Agency's procedures did not provide for the special valida-
tion of requisitions for nonstandard and nonstocked items. A statis-
tical sampling of these requisitions showed that, if questioned,
about 23 percent of the requisitions would be cancelled because the
requirements were invalid. The. Defense Electronics Supply Center
DAS found that $5.6 million could be saved annually by suspending
requisitions pending the validation of nonstandard and nonstocked
requirements. The failure to cancel the invalid requisitions for
nonstandard and nonstocked items results in a virtual loss of the
money spent to buy them. These items are not authorized for
stockage; thus, they cannot be returned and, as a result, they are
probably disposed of in new condition when they are received.
The Services have failed to respond to the Committee direction to
challenge these requisitions because they believe new procedures
will (1) increase workload, (2) increase message traffic, (3) delay
support, (4) possibly evolve into wholesale validations and cancella-
tion of requisitions if users do not respond, and (5), savings are
questionable.
The Committee's Investigation staff has reviewed this matter
again and found that a nonstandard, nonstocked requisition chal-
lenge process can be effective. For example, the Army's Missile
Command supply center has a procedure to challenge requisitions
for nonstocked items coded Issue Priority Group III (routine replen-
ishment). Nonresponse to the challenge within 30 days results in
cancellation by the supply center. During the past two quarters,
230 such requisitions were challenged, of which 5 were validated by
the requisitioner, 5 were requested to be cancelled, and 220 were
cancelled for nonresponse.
The Investigative Staff found Defense Logistics Agency supply
centers had filled about 540,000 requisitions for nonstandard and
nonstocked items with a standard price of about $185 million
during the first half of FY 1981, or an annual rate of about $370
million. These figures exclude requisitions-considered to be inap-
propriate to be subjected to a challenge process-for fuels, subsist-
ence, and Military Assistance Programs.
Projection of the 19 percent, (requisitions validated for cancella-
tion) discussed above, means that about $70 million of nonstandard
and nonstocked items may be procured by DLA during FY 1981
even though the-items are no longer needed by the requisitioner.
The Investigative Staff believes this figure could be doubled to $140
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million if requisitions for such items managed by the military
services and GSA were included.
In view of the above finding, the Committee is repeating the
directions made last year to establish a system to challenge such
requisitions until there is a long term indication that at least 90
percent of requests for non-standard/non-stocked items are valid
and cannot be filled by a substitute stocked item. Automatic can-
cellation after a 30 day failure in responding to the challenge
should also be instituted.
CONSUMABLE ITEM MANAGEMENT
Each of the services and the Defense Logistics Agency (DLA)
operate separate facilities required to receive, store, and issue the
material for which it has wholesale management responsibilities.
There exists a multiplicity of managers performing essentially du-
plicative functions for the same types of consumable material.
Each manager has developed his own management philosophy,
policies, procedures, and data systems, resulting in significant
waste, particularly in the areas of manpower and supporting facili-
ties costs. Additionally, the consolidation of procurement require-
ments for classes of consumable items rarely occurs. Thus, the
possibility for substantial savings, which could be achieved by ap-
plying DLA's much higher level of price competition, is lost. Spe-
cifically, during FY 1979 the military services awarded 25 percent
of their procurement dollars competitively compared with 68 per-
cent achieved by DLA centers. An analysis by the Defense Logistics
Analysis Office (DLAO) reveals that, "For each 1 percent that DLA
improves competition beyond the level achieved by the Services an
annual savings of $12.7 million will result."
In December 1978, the Office of the Secretary of Defense pro-
posed the transfer of consumables from the military services to
DLA in order to achieve total potential savings of $200 to $300
million. The proposal provided data which demonstrated that
DLA's management of consumables will improve DOD's overall
logistics readiness and reduce costs. The Committee supported this
effort.
The Army, Air Force, and to a lesser extent the Navy, are
opposed to the consolidation of consumables under DLA for reasons
that can be classified as parochial and sometimes emotional.
Further Savings in Item Management Transfer Can Be Achieved
A further review by the Committee's Investigations Staff indi-
cates that the transfer of the remaining 1.3 million consumable
items from the services to DLA could realistically result in annual
saving of $200-$300 million. These savings will be achieved through
the reduction of personnel and facilities as well as more stream-
lined, efficient, and economic procurement practices. In addition to
these "direct" savings other major indirect savings could occur if
all consumable items were transferred to DLA making it no longer
necessary for the military services to each operate separate stock
funds.
The largest potential area for savings clearly lies in achieving
more efficient and economic procurement procedures. A review of
FY 1979 procurement data reveals that the military services
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awarded only 25,percent of their procurement dollars competitively
for consumable items compared with 68 percent achieved by the
DLA centers for the same type of items.
The Defense Analysis Office presented the following data to sup-
port the competitive procurement difference between the military
services and DLA centers for items subject to transfer.
Percent
Fiscal year
1979 total Competitive Non- competitive
competitive
DLA .................................................................................................................. $1,398.6 $948.4 $450.2 67.8
Services ............................................................................................................ 7,570.9 1,918.9 ' 5,652.0 25.3
DLA has an aggressive program for "breaking" sole-source pro-
curements. The objective of the program is to review currently
noncompetitive purchased items, to find or develop additional tech-
nical data, and to interest new sources to bid on their solicitations
in order to expand competitive procurement.
The analysis of the results of this program at three DLA centers
shows the following:
DLA PROCUREMENT EVALUATION DOLLAR SAVINGS, FISCAL YEAR 1978
Cost before DLA Cost after DlA Savings
evaluation evaluation
Percent
savings
DISC (172 cases) ................................................................................... $3,834 $1,563 $2,271 59.2
DESC (48 cases) .................................................................................... 2,636 1,502 1,134 43.0
DCSC (283 cases) .................................................................................. 6,804 4,204 2,600 38.2
Total (503 cases) ............................................................................... 13,274 7,269 6,005 45.2
During FY 1980 the military services made $3.748 billion in
wholesale stock fund purchases. Assuming the DLAO competitive
percentage for the services is still valid (25 percent), then approxi-
mately $2.811 billion of these purchases were made noncompetitive-
ly. If these consumable items are transferred to DLA and DLA
applies its procurement evaluation effort to these items, the poten-
tial for savings is $1:270 billion ($2.811 billion times 0.452), or for
each 1 percent that competition increases beyond the level current-
ly being achieved by the services, an annual savings of $12.7 mil-
lion will result ($1.27 billion divided by 100).
The military services could possibly achieve some of these sav-
ings under the current distribution of consumable items. However,
there are several factors which mitigate against pursuing this
course. First, the Investigative Staff, in numerous discussions with
military service procurement officers, perceived that these officers
are primarily interested in receiving a quality product, when they
need it, from a contractor who causes few, if any, problems. Cost-
effectiveness and the pursuit of competition are less important
considerations in their procurement philosophy, analysis, and pro-
cedures. Second, each of the services and DLA are procuring the
same type items from various contractors around the country.
There is no single source of information to determine the total
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DOD requirements for a particular type of item. The Investigative
Staff is working with the Defense Contract Administration Service
(DCAS) to develop the magnitude of this situation.
The Military Services' Objections
While the reasons for effecting the consolidation of consumables
at DLA appear to be overwhelming, the Army, the Air Force, and
to a lesser extent the Navy, are opposed to this proposal. Their
concerns lie in three major areas: readiness (supply support), item
complexity, and the validity of the economic analysis. Each of these
objectives is analyzed in some detail in the Committee's staff report
on this matter. (See pages 60-66). The material is too voluminous to
repeat here. The data presented shows that to a major extent the
military services objections to any further transfer of consumable
items are a parochial attempt to retain control over supply system
manpower assets which can be better utilized by the Defense Logis-
tics Agency.
The services can interminably rebut, or disagree with any eco-
nomic analysis performed by any organization regardless of qualifi-
cations. It is virtually impossible to perform the finite analysis the
services will continue to insist on. The Investigative Staff feels that
there is sufficient data and evidence upon which to make a decision
on this matter. There are a number of management considerations
that deserve attention and emphasis in accomplishing the proposal
to transfer management of 1.3 million consumable items from the
military services to DLA. However, in view of the magnitude of the
estimated annual savings in direct costs of between $63 million and
$124 million, and in view of the Secretary of Defense legal respon-
sibility to, "take appropriate action (including transfer, reassign-
ment, consolidation or abolition of any function, power or duty) to
provide more effective, efficient, and economical administration
and operation and to eliminate duplication in the Department of
Defense;" it appears that the proposed realignment of management
for all consumable items should be directed for implementation
without further delay. The Committee notes that the Deputy Secre-
tary of Defense has directed the process of item management trans-
fer to begin in a limited way with 200,000 items.
LOSS AND THEFT OF EQUIPMENT
DOD makes adjustments to its inventories valued at billions of
i6 dollars each year. These adjustments have been noted in numerous
reports by GAO and the various DOD audit agencies. The losses
have generally been attributed to (1) weakness in supply manage-
ment of equipment under control of the services, (2) highly inaccu-
rate financial inventory report data, (3) the use of tens of thou-
sands of codes involved in processing transactions through supply
and financial records, (4) high turnover rate for personnel involved
in complex supply and financial systems, (5) physical inventory
adjustments, (6) losses in transit, and (7) reported theft.
The Investigative Staff directed its attention to the procedures
used by DOD to control or account for cargo/items which enter, the
Defense logistics pipeline. These procedures were found to be con-
fusing, conflicting, and poorly coordinated. As a result, millions of
dollars of Defense cargo is routinely reported as "missing" and
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74
little, if any, effort is made to resolve these discrepancies. Addition-
ally, the Investigative Staff has obtained strong evidence that the
confusing nature of the DOD cargo accountability procedures is
causing many activities to ignore the reporting procedures and
thus, the extent of the total losses cannot be fully determined.
ARMY
The U.S. Army Material Development and Readiness Command
(DARCOM), the largest inventory manager in the Army, reported
the average value of its inventory during fiscal year 1980 to be
nearly $15.9 billion. During the same period inventory adjustments
showed a net loss of $24.6 million out of about $950.8 million of
adjustments, .$463.1 million in gains and $487.7 million in losses.
NAVY
The Navy has a long and continuing problem of financial control
over its inventories. Since 1966, the Navy Audit Service has issued
more than 80 reports showing that the Navy's financial inventory
report data is highly inaccurate due to numerous different types of
problems and/or errors that occur in both the financial and supply
system records. In its most recent report of February 2, 1979, the
Navy Auditor General stated the Navy financial inventory report
showed an inventory of $13 billion as of the end of fiscal year 1979.
During the same year a total of $29.3 billion inventory gain and
loss adjustments were noted in the financial inventory report.
AIR FORCE
The Air Force Logistics Command (AFLC) had sales from stock
and industrial funds of $8.74 billion during fiscal year 1980. During
the same period, AFLC made 170,756 inventory adjustments with a
total gross value of $194 million. Of this amount $92 million was
for inventory increase and $102 million was for inventory de-
crease-a net decrease of $10 million.
MARINES
Out of a total inventory of over $2.7 billion, the Marine Corps
made a total of $87.7 million in physical inventory adjustments
resulting in a net gain of over $8.8 million during fiscal year 1980.
During the same period accounting adjustments totaled $165.3 mil-
lion for a het gain of over $9.4 million.
DEFENSE LOGISTICS AGENCY
The Defense Logistics Agency (DLA) had sales of nearly $10.8
billion during fiscal year 1980. During the same period, DLA had
physical inventory adjustments of $222.8 million, which included
117.1 million in gains and $105.7 million in losses, for a net gain
of $11.4 million. These adjustments are the result of differences
between stock records and book balances, adjustments made to
vouchers and 'inspection reports, and differences in transfer docu-
ments..
In fiscal years 1978 and 1979 the Defense Personnel Support
Center, major DOD supply center of DLA lost control of hundreds
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of millions of dollars in stock funds. The center made adjustments
of about $566 million in an attempt to correct its financial records
but the validity of most of these adjustments could not be deter-
mined because of inadequate documentation.
These accounts were certified as correct by officials at the center
ite their knowledge of the center's financial problems.
des
p
During the course of its review the Investigative Staff noted a
number of significant instances where Government property was
stolen, unaccounted for, or misappropriated. The Surveys and In-
vestigations Staff Report pages 17-18 list some examples of theft.
Audit reports and the semi-annual Report to the Congress on
Audit, Inspection and Investigative Organizations contain many
more.
It is clear that some DOD procedures used for the accountability
of its property are confusing, contradictory, and poorly coordinated.
Even the author of one of the primary property accountability
regulations found his and the related regulations to be confusing.
The Investigative Staff found that this confusion extended from the
Inventory Control Points down to and including individual combat
support units in Europe.
In order to improve this situation, DOD must take aggressive
action to remedy this situation. A thorough review must be made
of all the regulations relating to the control and use of Government
property. These regulations must be revised and adhere, as a mini-
mum, to the following characteristics:
Simplicity-they must be written in such a manner that
even the lowest graded soldier or civilian employee can under-
stand them since it is at this level that these procedures must
be implemented.
Clarity-the procedures must be stated in such a way that
they are clearly understood with little or no confusion as to
what items should be reported and what activity should re-
ceive the report.
Fully Coordinated-these procedures concerning the control
and use of Government property must be fully coordinated so
one regulation does not contradict or negate instructions stated
in a related procedure. Ideally, DOD should issue one instruc-
tion which would cover all elements of transportation, inven-
tory control, and financial accountability for all DOD property.
Command Supported-the old axiom that "people do well
those items which the boss checks" certainly applies here.
onl
y
Commanders at every level must show concern for the security
and accountability of DOD's property. Incentives must be built
into the accountability system so that the supply, transporta-
tion, and financial clerks will want to report discrepancies.
LACK OF CONTROL OF GOVERNMENT FURNISHED MATERIALS
Despite a Congressional instruction, the military services contin-
ue to be negligent in their control of Government furnished materi-
al (GFM) and are providing equipment worth millions of dollars
yearly to contractors whose inventory controls are inadequate to
provide the proper records and control of its use. The services have
not yet established procedures as mandated by Congress and, as a
result, have not gained visibility of the amount of GFM that con-
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tractors possess. This lack of visibility has resulted in widespread
over-requisitioning, uneconomical requisitioning, unauthorized use
of GFM and lack of proper inventory controls of GFM causing a
loss of millions of dollars to DOD.
The DAR allows the Government to furnish material to contrac-
tors when it is determined to be in the best interest of the Govern-
ment by reason of economy, standardization, the increased produc-
tion, or other appropriate circumstances. This most commonly
occurs in Maintenance and Overhaul (M&O) contracts.
Contractors can acquire GFM from the DOD supply system by
requisition or transfer. The official accountable records for the
property are maintained by the contractor as a part of their prop-
erty control systems. A Government property administrator is re-
quired to conduct periodic tests of the contractor's property control
systems as a technique to assure that adequate inventory- controls
are used by the contractor to protect the interests of the Govern-
ment.
During the past several years numerous audits and studies have.
identified a number of deficiencies including:
(1) unauthorized requisitioning of supplies by contractors
from Government supply sources,
(2) over-requisitioning of material,
(3) lack of accountability of GFM shipments,
(4) excessive number of requisitions,
(5) abuse of priority designators,
(6) unreasonable issues of Government owned material,
(7) GFM being used on commercial, work,
(8) inadequacies in material control,
(9) no records of issues,
(10) lack of cost effectiveness in the use and acquisition of
GFM, and
(11) excessive spares on hand at contractor plant, when air-
craft were not operational because of the unavailability of
these spares.
A recent GAO report found that while the Navy was providing
billions of dollars of GFM to contractors for use in constructing,
overhauling, and repairing Navy ships, the Navy did not know the
amount of GFM in their contractor's possession because there were
no overall financial or other management systems to account for
these materials.
GFM Dollars Cannot be Easily Identified
An Air Force audit identified an overhaul contractor who was
not preparing the documents required to account for GFM. Thus,
Air Force item managers were neither aware of nor had visibility
of those assets. As a result of the. audit, $316,000 of excess GFM
was identified and used to fill requirements on other commercial
contracts.
The audit also identified $950,000 of excess GFM charged to one
contractor but in possession of another contractor. GFM was issued
as initial spares for a maintenance program which did not materi-
alize. Although the item managers were aware of GFM, they did
not know it could have been used to satisfy other demands.
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The Investigative Staff requested from three major Army com-
mands the amount of GFM that had been provided to contractors
on active M&O contracts. While these commands had contracts
worth billions of dollars, only one could provide an exact dollar
amount of GFM issued, the other two commands stated that they
would have to go to the individual contractors to obtain the figures.
DOD and the Services Slow to React With Appropriate Controls
The Committee has addressed the problem of the lack of control
over GFM which was allowing contractors to utilize and requisition
? GFM in an uneconomical, wasteful, and fraudulent manner in
previous reports. The Committee's FY 1979 report requested DOD
to resolve the problem by allowing the contractors' use of the DOD
supply system with the understanding that they (the contractors)
would pay cash on the delivery of GFM when received from the
supply system. DOD deferred, citing legal barriers to selling GFM
to contractors. These impediments were removed in FY 1980 DOD
Appropriations Act (P.L. 96-154, Sec. 767, December 12, 1979). DOD
then proceeded to develop a test program to measure the effective-
ness of selling GFM to contractors. This pilot program has devel-
oped snags since it was difficult to find contractors to participate.
Five out of six contractors solicited by a Navy ICP refused to
participate in the test program. Additionally, the services stalled in
their development of the program. As of June 1981, only one con-
tract had been signed by the Navy, with several others in the
negotiation stage. The Army has only selected one system for the
pilot program and is not yet near signing a contract. The first
results of the pilot program will not be available until 1982, with
final results available in 1985.
DOD has issued new instructions (DODI 4140.48, dated March 3,
1981) to control the access to GFM by maintenance contractors.
These instructions require DOD components authorizing the use of
GFM by a minimum of two contractors to establish a Management
Control Activity (MCA) which is tasked to (1) maintain control over
all contractor access to DOD's supply systems, (2) establish guide-
lines to validate contractors' requests, (3) maintain a contract, req-
uisition, and shipment status file, and (4) provide a status report to
DOD on all contractors' GFM requests. This regulation, which took
effect 120 days from date of issue, requires semiannual reports for
the periods ending June 30 and December 31. However, the Investi-
gative Staff has found that the major commands have not yet
received the DOD instructions. This, of course, will delay imple-
mentation and the subsequent reporting. Moreover, as officials of
one Army command stated, the DODI (4140.48) cannot be fully
implemented until changes are made to four other regulations.
The DOD approach that is being undertaken seems to be similar
to previously proposed systems that were rejected by OMB because
they greatly increased government paperwork at a time when the
Federal Government is attempting to reduce paperwork. The basic
idea behind the Committee's approach from the start was to sell
the material at a sufficiently high cost to recover the government's
investment and thereby reduce `management" systems.
While DOD and its components have finally responded to Con-
gressional urging to establish controls over contractors' use of
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GFM, it will still be sometime before. the new regulations are
actually implemented and an even longer time before the results of
the pilot program of selling GFM to contractors are known. Too
many years have passed since the GFM problem was made known
to DOD and many items of GFM have been improperly requisi-
tioned by contractors during this period.
MANAGING GOVERNMENT FURNISHED SPECIAL TOOLING
Millions of dollars of special tooling (with no foreseeable use or
need) are being stored at contractors' plants.
During the productive life of many major acquisitions and even
beyond that time, substantive contractor and Government manpow-
er is used in the administrative accountability of special tooling, its
storage, and disposal, costing the Government many millions of
dollars. For example:.
One contractor plant visited by the Investigative Staff has
over $30 million in special tooling lying idle which could be
excessed or otherwise disposed of.
Another contractor charges the Navy almost $100,000 a year
to store special tooling for which there is no apparent need.
A recent study revealed that for five out-of-production air-
craft programs, storage and control costs exceeded $750,000 for
unneeded special tooling. About 37 percent of the tooling was
unneeded.
Another major aviation contractor still retains special tool-
ing, at Government expense, for a dormant aviation program
based on the possibility a foreign military sales program cus-
tomer might need a part.
One Air Force logistics center wants to keep the. special
tooling for the F-4 to build spare parts that have not yet
failed.
Special tooling is a necessary element of DoD contracting for
weapon systems. The contracting official has the responsibility of
deciding whether to acquire or not to acquire title. In either case,
the Government pays for the tooling either directly or indirectly.
However, acquiring title to special tooling results in extra adminis-.
trative costs. Since tooling may become obsolete, the contracting
official should consider each piece carefully. Stability of design, the
proposed manufacturing technique, and anticipated future require-
ment should be evaluated to insure that the huge administrative
costs justify the storage and accountability of these items during
periods of nonuse. Once a program is over, DoD should insure that
prompt disposal of the special tooling is made to prevent unneces-
sary accumulation of administrative costs for its storage and ac-
countability.
INDUSTRIAL PLANT EQUIPMENT
Industrial plant equipment is that part of DoD-owned plant
equipment with an acquisition cost of $1,000 or more; used for the
purpose of cutting, abrading, grinding,. shaping, forming, joining,
testing, measuring, heating, treating, or otherwise altering the
physical, electrical: or chemical properties of materials, compo-
nents, or end items entailed in manufacturing, maintenance,
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supply, processing, assembly, or research and development oper-
ations.
The House Committee on Armed Services in its report number
29, dated December 31, 1980, noted there has been a serious decline
in the Nation's defense industrial capacity that places our national
security in jeopardy. In preparing the report, the Committee panel
held 13 days of hearings, including 4 days of field hearings, and
took testimony from 34 witnesses. These witnesses included repre-
sentatives of (1) defense prime contractors and subcontractors, (2)
associations, (3) the military, (4) the General Accounting Office
(GAO), (5) the Department of Commerce, (6) the Federal Emergency
Management Agency (FEMA), (7) DOD, and (8) the Congress. Wit-
ness after witness testified before the panel that an erosion of U.S.
industrial capability is occurring that, coupled with America's
mushrooming dependence on foreign sources for minerals, is en-
dangering our defense posture at its very foundations.
Section 2 of P.L. 93-155, the Defense Industrial Reserve Act,
states, "In enacting this Act, it is the intent of Congress (1) to
provide a comprehensive and continuous program for the future
safety and for the defense of the United States by providing ade-
quate measures whereby an essential nucleus of Government-
owned plants and Industrial Reserve of machine tools and other
industrial manufacturing equipment may be assured for immediate
use to supply the needs of the armed forces in time of National
Emergency or anticipation thereof."
Out of approximately 20,000 items of Industrial Plant Equipment
in general reserve, which has an acquisition value of about $362
million, only about 20 percent of the items are in known "operable
ready" for "immediate use" condition. Senior officials advised the
Investigative Staff the reasons the equipment was not ready for
immediate use were because (1) funding has not been available and
(2) Defense Logistics Agency maintenance policy limits mainte-
nance almost totally to items being shipped to users. Efforts to
improve the situation were made by DIPEC in March 1980 with a
proposed 5-year program to test, inspect, and repair IPE in the
general reserve. According to DIPEC officials, the cost of this pro-
gram would be about $16 million, however, the proposal was not
approved by DLA.
The policy of only providing maintenance to IPE items being
shipped to users is inconsistent with the intent of Congress that
equipment be ready for immediate use. Failure to have about
16,000 items of industrial plant and equipment items valued at
about $290 million ready for immediate use can result in (1) con-
tractors obtaining other equipment and passing these costs to the
Government, and (2) delaying contract performance on those con-
tracts where Government owned equipment can be used. The Com-
mittee added $2.0 million to the bill to start reordering this equip-
ment for immediate use.
PROCUREMENT PRACTICES AT THE DEFENSE PERSONNEL SUPPORT
CENTER
On April 30, 1980, the Defense Audit Service completed a review
of procurement practices related to clothing and textile purchases
made by the Defense Personnel Support Center. This review shows
H.Rept. 97-33-1--- 6
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that there is room for major improvement in the procurement and ?
contract administration procedures at the center. The auditors
found that:
-The DPSC lack adequate procedures and controls for billing
foreign military sales customers. About $9.9 million was identi-
fied by the auditors as lost.
-The center awarded at least $14.9 million in contract awards
which were not needed and was awarded solely for the purpose
of "buying a round" 8(a) set-aside awards because the center
lacks confidence that the small business receiving the contract
could perform.
-Internal controls and procedures for small purchases of non-
stock clothing items were not adequate. In some cases, require-
ments were split to avoid the limitations of the defense acquisi-
tion regulation and suppliers were listed as unsuccessful bid-
ders even though they had not been solicited. (Previous audits
at the DPSC contain similar findings.) The center could save
an estimated $7.0 million if it provided as government fur-
nished material textiles to clothing manufacturers.
-At least $5.5 million could be saved if DLA stopped making
purchases as frequently as it does. DLA pays a higher unit
price because of small quantity buys. An additional $1.8 mil-
lion is wasted because of the unnecessary administrative
charges.
MISMANAGEMENT OF STOCK FUNDS AT THE DEFENSE PERSONNEL
SUPPORT CENTER
The Defense Personnel Support Center, a major Defense supply
center, lost control of hundreds of millions of dollars in stock funds.
The Center could not accurately determine amounts paid and
amounts of unliquidated obligations. In an attempt to correct its
records, the Center made financial adjustments of about $566 mil-
lion during fiscal 1978 and 1979. However, the validity of most of
these adjustments could not be determined because they were not
supported by adequate documentation.
The chaotic condition of the Center's funds control systems and
records prevented it from systematically detecting fraudulent con-
tract payments of $794,101 which were processed. The fraud was
detected only because of a clerical error.
The Center's problems were compounded when erroneous ac-
count balances were certified as correct. The balances were certi-
fied by Center and Defense Logistics Agency officials even though
both were aware of the Center's serious funds control problems. In
addition, full disclosure was not made in financial statements of
either the Center's funds control problems or the large amount of
adjustments made without adequate supporting documentation.
The certifications were accepted and relied upon by Defense offi-
cials in preparing consolidated annual reports to the President and
the Congress on the Condition and operations of all Department of
Defense working capital funds.
According to the GAO the DPSC lost control of hundreds of
millions of dollars worth of stock fund money because of the "funds
control system had a. complete breakdown." DLA has recognized
the seriousness of the problem and has developed a proposed plan
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to correct the financial system at this inventory control point. The
DLA has informed the Committee that it intends to correct the
financial records and have in place an effective accounting system
by June of 1982. The Committee expects an interim report from the
DLA.
The Committee expects that the DLA will be able to submit an
unqualified certification of its stock fund balances prior to the end
of fiscal year 1982. If it appears that such a certification cannot be
made, the Committee expects to be notified as soon as this determi-
nation is made.
PRECIOUS METAL RECOVERY
In early 1976, DoD assigned the responsibility to the Defense
Supply Agency for developing, in coordination with the military
services, a system of standard codes for identifying items that
contain precious metals and the quantities of precious metals con-
tained therein. The Air Force auditors stated that "In air logistics
center maintenance shops, we identified 227 items that contain
gold or silver." However, air logistics center personnel had identi-
fied the precious metal content of only 41 of these items in techni-
cal orders. The auditors went on to state that about 37,000 items in
the Air Force are believed to contain precious metals. The Air
Force has finally begun the process of coding items that contain
precious metals which was required back in 1976.
Air Force auditors also found that the Air Force was as a general
rule purchasing gold and silver needed for Air Force contracts on
the open market rather than using the material available to the
government which had been recovered. The auditors estimate that
on 6 contracts reviewed the Air Force could have saved over $3.6
million. In responding to a Committee question on this matter the
Air Force indicated that the situation was being resolved in so far
as gold was concerned but did not address the open market pur-
chase of silver.
Since 1979, DoD has been contracting for the recovery of precious
metals from end items rather than using in-house facilities to
recover the metals. This was done because a cost study indicated it
would be less expensive to contract for recovery of precious metals.
However, as the following examples demonstrate, the recovery rate
of precious metals recovered under contracts is substantially lower
than the rate of recovery when accomplished in-house.
-The last two batches of B2 battery plates processed by Defense
were for 24,288 lbs. of plates with 202,951.96 troy ounces of
silver recovered (a 57.3 percent recovery rate) and 40,344 lbs.
with 361,826.98 troy ounces recovered (a 61.5 percent recovery
rate). Under contract recovery, 67,033 lbs. of plates resulted in
only 444,808.15 troy ounces (a 46 percent recovery rate) while
Defense had expected to receive 557,199.08 troy ounces, a dif-
ference of over 112,000 troy ounces.
-From 1972-1978, Defense processed film ash for silver recov-
ery. From 1972-1976 the yield was 7,474 troy ounces of silver
per ton of film ash and from 1976-1978, the yield was 5,737
troy ounces per ton. Two contracts have been used for film ash
with yields of 1,865 troy ounces per ton and 1,405 troy ounces
per ton.
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DoD is directed to investigate the reasons for the wide variances
in recovery rates and report the finding to the Committee.
The Army and the Navy have been selling precious metals-
bearing items to foreign military sales customers charging them
only the stock funded price of the item even though it may have
been purchased before and contains previous metals. The Army's
DARCOM was selling batteries to foreign customers at 850 a piece
when the silver content of that battery was worth at least $10. The
Army has already found that batteries containing at least 100,000
troy ounces of silver at the stock fund price instead of a price
approaching their real value.
The Navy's system for managing the FMS sales was so poor that
it is virtually impossible to track. Also a Navy facility (Navy Un-
derwater System Center, Newport, R.I.) recently "lost" 100,000 or
more ounces of silver in batteries. These 19 batteries contained
4,000 silver zinc cells. Each battery was so large that it could be
moved only by forklift truck but all 19 batteries disappeared. No
battery has been recovered to date.
COMMISSARY STORE OPERATIONS
Last October after nearly a decade of debate on commissaries'
legitimacy and viability the Office of the Secretary of Defense
made a decision to continue operation of separate military service
commissary systems. Prior to this decision the DoD had been seri-
ously studying the feasibility of consolidating commissary store
operations into a single defense activity. In reading this decision
the Department of Defense created an executive board to provide
broad policy guidance on commissary operations and to set goals
and evaluate peformance. It was also indicated that certain man-
agement improvements and cost reductions could : be affected
through decentralized administration, as well as through the cen-
tralization proposals. The decision not to consolidate was made
despite the fact that many studies including a detailed GAO report
entitled "Military Commissaries: Justification as Fringe Benefit
Needed-Consolidation Can Reduce Dependence on Appropri-
ations," strongly supported a consolidated management agency for
the commissary store system.
Operating costs for commissaries as separate line items in the
DoD budget were about $510 million in FY 1981. This represents
the direct cost of operating commissaries. However, the military
services provide extensive uncharged indirect support such as pro-
curement support, real property maintenance, security, fire protec-
tion, etc. This support adds at least another $50 million to the cost
of commissary operations.
The commissary operation budgets for fiscal year 1982 as pre-
sented to the Committee do not include any apparent reductions or
management efficiencies as was expected. The Committee is pro-
posing that each of the commissary systems produce savings of $5
million in their operations during fiscal year 1982. A portion, al-
though by no means all, of this savings is possible through the
testing and implementation of different operating techniques.
The Department of the Navy has repeatedly indicated that it
desires to convert all of its 3,021 commissary personnel employees
from an appropriated fund status to a nonappropriated fund status.
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This would be similar to the conversion which took place for DoD
clothing sales stores when they were combined with the clothing
sales facilities of the post exchanges. The Committee believes that
the Navy should proceed with this proposal as a test case for the
other military services.
One of the biggest problems facing the Department of Defense is
making management improvements in critical supply and mainte-
nance activities within the very tight personnel ceilings which the
Office of Management and Budget has imposed upon the Depart-
ment. The Navy contends that it should be permitted to convert
these 3,000 positions to a nonappropriated fund status and allowed
to retain the overall ceiling points in order to reduce the Navy's
dependence upon contractors for management, engineering, and
logistic services. The Committee completely agrees with the need to
make additional positions available and it is therefore recommend-
ing that the Department of Defense allow the Navy to proceed with
the conversion. The Navy estimates that average pay differential
for these positions is approximately 21 percent. They also estimate
that very few employees, if any, would ever be riffed and that the
entire process can be accommodated through attrition and by the
reassignment of commissary employees to other base supply activi-
ties as positions become available in those functions.
Navy testimony indicated that there would be an annual savings
of $10 to $12 million when the Navy commissary stores were oper-
ated in the military clothing store modus operandi. The Navy
should submit implementing plans to the Committee within 125
days of passage of the Appropriations Act and semi-annual prog-
ress reports should be provided to the Appropriation and Armed
Services Committees, to include the cost of operations and accumu-
lated savings data.
The Committee also believes that the Army should go forward
with its proposal to contract out the entire operation of at least two
commissary stores. This contracting out should be done in accord-
ance with the provision of A-76. Testing the contracting out con-
cept for the operation of an entire commissary will serve as a test
case to determine the potential savings, if any, and potential prob-
lems that are likely to ensue through contracting out commissary
store operations.
As a part of this proposal the Committee is also recommending
that the Air Force test the back to "basics" approach to marketing
and merchandizing of food products. This approach is becoming
more popular in civilian supermarket sales and is often referred to
as a warehouse supermarket. This concept involves providing the
patron with somewhat less in the way of services, fancy displays
and non-food product lines. It is hoped that the Department of
Defense will test this approach at at least two Air Force commis-
saries in a way in which the savings are shared between the
government and the commissary patrons. Hopefully this concept
will be tested in areas where other services also operate nearby
Commissaries to determine if lower prices attract more customers,
or if customers are lost to other commissaries. It will be difficult to
find an adequate pricing incentive since commissary prices only in-
elude a 4-percent surcharge.
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ALCOHOLIC BEVERAGE SALES
The Department of Defense through its so-called CLASS VI
stores sells approximately $400 million worth of alcoholic bever-
ages annually. When the sales of clubs (NCO and Officer) and
exchange beer sales are included the figures are nearly doubled
this amount.
Highlights from the worldwide survey of nonmedical drug use
and alcohol use among military personnel show that most military
personnel (83 percent) drank at least occasionally. As expected,
beer was the most commonly consumed beverage; it was drunk by
73 percent of all military personnel at least once within the "past
30 days" of the survey, and hard liquor (including mixed drinks)
was consumed by about one-half of the respondents (50 percent)
within the "past 30 days". In general, the highest prevalence of
drinking any alcohol was recorded by senior officers, followed by
junior officers and junior enlisted personnel, senior enlisted person-
nel and warrant officers. The survey showed that 28 percent of the
El-E5's and about 5 percent of E6-E9's reported heavy drinking of
hard liquor.
It is estimated that seven percent of military personnel world-
wide were alcohol dependent during the past year. One out of four
military personnel reported some work impairment because of alco-
hol use during the last year. Approximately 13,000 military person-
nel received alcohol treatment in residential treatment facilities,
while approximately 33,000 personnel received alcohol treatment in
nonresidential military facilities.
The military services operate 69 residential facilities and 441
nonresidential facilities for treatment of alcoholics.
In view of the above statistics and the fact that alcoholic bever-
ages as sold through the CLASS VI store system are priced consid-
erably below local prevailing market prices the Committee is rec-
ommending that the Department of Defense immediately increase
the price of these beverages by 10 percent. This will yield an
annual increase in revenue of about $40 million which can be made
available to support morale, welfare and recreations activities.
Since fiscal year 1982 will probably be one quarter completed prior
to passage of the Defense Appropriations Bill the Committee has
estimated fiscal year 1982 savings at $20.0 million. The additional
receipts can be used to offset a portion of the appropriated fund
support to non-appropriated fund activities.
SOFT DRINK PROCUREMENT -
On April 15, 1981, the Defense Audit Service issued an audit
report on the procurement of soft drinks by the military exchange
system. It is estimated that the Army Air Force exchange system
purchases over $20 million worth of soft drinks annually and that
inclusion of the Marine Corps and Navy systems plus procurement
for vending machines would bring the total in excess of $40 mil-
lion.
Prices paid for two leading soft drinks producers led ' the auditors
to believe that certain soft-drink franchises had questionable pric-
ing practices. The audit shows many cases of "follow-the-leader"
pricing patterns, identical pricing and unusually high pricing of
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soft drinks. Also, soft drinks purchased for resale usually were
priced higher than soft drinks purchased for vending operations,
even though the suppliers furnished and serviced the vending ma-
chines. The Department of Defense is in the process of taking steps
to monitor its soft-drink purchases and seek the lowest possible
prices throughout new competitive procurement practices. The
* Committee has reason to believe that this will produce additional
"profits" in excess of $3 million in fiscal year 1982 which can be
applied as a contribution to the welfare, morale and recreation
fund.
BASE OPERATIONS
The Department of Defense is expected to spend about $9.5 bil-
lion, excluding the repair and maintenance of real property, on
base operations support in FY 1982. Base operations support funds
activities of an installation support nature, such as administrative
services, facility engineering services, vehicle operation and main-
tenance, security and police activities, laundry and dry cleaning,
audio visual, printing and reproduction, safety and legal services
and various community support services such as morale and recre-
ation activities, housing functions etc. The cost of base operation
support increases by $916.9 million in FY 1982 over FY 1981. Price
growth accounts for about $470 million leaving real program
growth of about $446 million.
The following table provides the estimated cost for base oper-
ations support. The FY 1982 column does not include the cost of
civilian personnel pay raises which will be added in a supplemental
request next spring. Also excluded from the cost estimates are the
pay and allowances of the 121,700 military personnel who work in
base support activities. There are approximately 183,800 civilians
so employed in FY 1982.
BASE OPERATION SUPPORT 1
[In millions of dollars]
1980
actual
1981
estimate
1982
estimate
Operation and Maintenance, Army ...............................................................................................
2,854.8
3,467.2
3,920.2
Operation and Maintenance, Army Reserve ..................................................................................
104.8
115.9
125.9
Operation and Maintenance, Army National Guard .......................................................................
30.7
34.4
43.7
Operation and Maintenance, Navy ................................................................................................
1,523.0
1,748.4
1,865.9
Operation and Maintenance, Navy Reserve ..................................................................................
75.9
91.3
105.3
Operation and Maintenance, Marine Corps ...................................................................................
318.5
375.0
410.3
Operation and Maintenance, Marine Corps Reserve ......................................................................
5.4
7.0
8.5
Operation and Maintenance, Air Force .........................................................................................
2,194.7
2,469.3
2,701.7
Operation and Maintenance, Air Force Reserve ............................................................................
37.1
38.9
46.7
Operation and Maintenance, Air National Guard ...........................................................................
52.6
63.9
82.5
Operation and Maintenance, Defense agencies .............................................................................
134.3
158.2
175.7
Total ........................................................................................................................................
7,331.8
8,569.5
9,486.4
Excludes real property maintenance, repair, and minor construction.
The bill as reported by the Committee recommends a number of
adjustments to various base operation support activities. Some of
these adjustments are financial in nature.
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Absorption of Fiscal Year 1981 Pay Raise Supplemental Costs
The pay raise supplemental for FY 1981 as originally submitted
by the Carter Administration forced the military services and other
DoD activities to absorb a portion of the pay raise. The Reagan
Administration amended this supplemental request to include
funds for all pay raises. The Congress fully financed the FY 1981
pay raises and provided an additional $500.0 million to offset the
effects of inflation on the operation and maintenance appropri-
ations.
In preparing the FY 1982 justification material some military
services, particularly the Air Force, justified certain add-ons in the
base operations program as necessary to offset or serve as a resto-
ration to the reductions which they were forced to make in FY
1981 to finance the pay raise. Since in the end it was not necessary
to finance the pay raise from within the 1981 funds previously
appropriated, in that the Congress eventually appropriated addi-
tional funds, there is no need to restore reductions that never took
place. Accordingly, the bill as recommended by the Committee
reduces the Air Force request by $87.0 million, the Navy Reserve
request by $9.1 million and the Air National Guard request by $2.7
million.
Overseas Military Banking Program
The Department of Defense provides banking services at 181
locations overseas for its military dispersing officers, nonappro-
priated fund activities and military and civilian personnel. Prior to
FY 1978, the program was managed by the Treasury and funded by
Treasury compensating balances. In 1975 the Congress took steps
to place management and funding of the program with the Depart-
ment benefitting from the program. Since placement of this pro-
gram in DoD there has been a tendency to budget more funds than
the program requires. For example a total of $22 million in O&M
resources was requested in the FY 1981 budget. During execution
of that budget, the O&M program was reduced to $17.0 million and
subsequently further reduced to $12 million. This was made possi-
ble by a drop in estimated net cost due to higher earnings resulting
from continued high money-market interest rates and favorable
foreign exchange rate fluxuations and advoidance of lease costs by
purchasing 30 automated teller machines in Germany. DoD pro-
curement funds were used for this purpose.
The various service budgets for FY 1982 include a total of $25
million for this purpose. The Defense Department now indicates
that $22.0 million will be adequate to finance the program. It is
highly likely that additional reductions could be made but the
Committee limited the reduction to $3.0 million. Additional adjust-
ments can be made in conjunction with the FY 1982 pay raise next
spring, if warranted.
Occupational Safety and Health Administration and Environmen-
tal Programs
The Department of Defense budget request for fiscal year 1982
contained some major program increases for activities related to
health and occupational safety and the environment. Included in
the budget was implementation of a hazardous material manage-
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ment program. Also included were funds for ecology base-line sur-
veys, preparation of new and updating old environmental impact
studies. In reporting the bill the Committee deleted all real growth
for these efforts, leaving the programs at their FY 1981 level plus
inflation. Only the Navy proposed deletion of funds designated to
improve compliance with these federal regulations during the Sep-
tember amendment. In view of the Administration's announced
intention to review these programs and issue new guidelines in the
near future it seems prudent to defer their expansion at this time.
Accordingly, reductions of $4.0 million to the Army request,
$800,000 to the Marine Corps request, $3.5 million to the Air Force
request, $1.4 million to the Army Reserve request, $1.6 million to
the Army National Guard request and $1.5 million to the Air
National Guard request have been made in the bill.
Using Productivity Measurement in Managing Base Operations
Information provided by the General Accounting Office indicates
that there is a significant disparity between what DoD work meas-
urement and other management systems designed to measure pro-
ductivity of base operating employees are suppose to do what is
actually being accomplished. The Committee regularly receives re-
ports which indicate that integrated facility management systems
and automated work managment systems are not working as they
are supposed to because management does not pay enough atten-
tion to them. For example, the Army implemented a work manage-
ment system which is described in DA pamphlet 420-6. It is doubt-
ful if a single Army installation is using the prescribed system as
intended.
The military services have made only marginal progress in using
engineered performance standards or work measurement standards
for real property maintenance even though the Committee has
been urging adoption of such system for years. The Navy attempts
to apply engineered performance standards to about 75 percent of
its real property maintenance work. The Army attempts to apply
such standards to about 86 percent of its work and the Air Force
doesn't even use engineered work standards.
Unbalanced Bidding On Multiple Line Type Requirements Con-
tracts
Multiple line type requirement contracts for real property main-
A& tenance are those in which the contracts list kinds of work to be
performed and then request a price based on an undefinite quanti-
ty of the work to be performed. For example, a roofing contract is
offered with an estimate number of square foot but the bid is
? submitted on a cost per square foot. The actual amount of roofing
to be done remains open and can vary greatly. Thus if a contractor
has just a little "inside" information he is able to bid those projects
he actually expects to be done very high and those which will not
be done, even though they are part of the contract, very low. He
thus establishes himself as the low bidder, even though the charges
for work actually performed are excessively high.
Also, various DoD auditors constantly find contracts where the
amount of lawn to be watered, cut or fertilized is considerably less
than the amount listed in the contract. The same situation appears
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with respect to obtaining contracts on the installations of carpet-
ing, painting etc. Better management of such contracts would save
millions of dollars.
Consolidation of Military Base Support Activities
For years the General Accounting Office has been issuing reports
recommending consolidation of various inter and intra military
service base support activities. The most recent report was issued
in September 1980 and is entitled "Consolidating Military Base
Support Services Could Save Billions". While the Department of
Defense continues to give lip service to this program very little, if
any, progress has been made. The bill as reported by the Commit-
tee sets an objective of saving $8.0 million in the Army, $2.0
million in the Navy through such consolidations. A similar type
reduction is made to the Air Force estimates since the Air Force
failed to reflect a savings of $4.4 million for support of the U.S. Air
Force Base at Kadena on Okinawa. The Navy is providing the Air
Force with an additional $4.4 million in FY 1982 because under the
previous arrangement the Air Force provided base operations sup-
port to the Navy on a nonreimbursable basis. Base operation sup-
port will be continued to be provided by the Air Force but Navy
will pay for the support in FY 1982 thus in effect saving the Air
Force $4.4 million.
The FY 1982 budget does nothing to push aside long standing
military department parochial interest and move in the direction
of consolidating military base suppport activities. Despite the fact
that the Comptroller General sent the Secretary of Defense a
memorandum on January 21, 1981, which urges "the establishment
by directive of the Secretary of Defense, of an authoritative single
manager, or project director, to effect optimum base support econo-
mies can, we believe, produce several hundred million dollars in
savings annually. It is one of the most obvious ... and one of the
easiest ... sources of true economy which the new Secretary of
Defense can achieve". In responding to a question on this matter
the Defense Department stated that regional consolidations such as
Regional Medical Centers and Real Property Maintenance Activi-
ties are being considered, nothing of a definite nature has been
submitted to the Congress.
An example of the lack of cooperation between the military
services is the family housing situation in Hawaii and at Wheeler
Air Force Base in particular. Family housing units at Wheeler
exceed Air Force requirements and more then 220 members living
at Wheeler make an approximate 30 mile daily round trip to their
jobs at Hickham Air Force base and Camp Smith. Concurrently
more than 700 Army members travel in the opposite direction. This
is due to the fact that the Army is by far the principal user of
Wheeler Air Force Base. The Air Force base is adjacent to Scofield
Barracks home of the Army's 25th Infantry Division and the Army
uses the Air Base to house over 200 aircraft. While the Air Force
has only 10 small observation aircraft bedded down there. In addi-
tion about 115 Army service members could be assigned to Wheeler
housing occupied by ineligible Air Force personnel. This situation
has existed for years.
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Passing ownership of Wheeler from the Air Force to the Army
would enhance response time, contribute to energy conservation
program goals and reduce housing costs to say nothing of improv-
ing the readiness of the 25th division. Instead of making some
decisions on this matter, the Department of Defense hired a con-
tractor to further study this situation. The Committee has received
no further information from the Department of Defense on the
matter although the final report from the contractor was to be
delivered to the Defense Service Support Program Office on April
23, 1981.
STANDARD LEVEL USER CHARGES (SLUG)
The Department of Defense reimburses the General Services Ad-
ministration for space and services by payment of a standard level
user charge (SLUC). The General Services Administration then
uses this income to finance activities of the Public Buildings Serv-
ice which provides space and services for federal agencies in a
landlord-tenant relationship. The space provided by the General
Services Administration may be in federally constructed buildings
or through leases with commercial firms.
In fiscal year 1982, the Department of Defense is requesting
$173.6 million for the SLUC reimbursements to GSA. The Commit-
tee believes that the Department of Defense pays what appears to
be excessive amounts of SLUC rents for space in GSA control
buildings. For example, the GSA charges rent for buildings that
DoD built with monies appropriated to DoD for military construc-
tion, not by the Public Buildings Service. In essence the military
budget has reflected payment for the same building twice.
The General Services Administration is also generally delinquent
in notifying the services of increases of rental rates so that the
budget submitted to the Congress for any fiscal year would be
substantially understated from what would actually be required by
the Department of Defense for reimbursements to GSA. For exam-
ple, GSA raised the rental rates by 65 percent in fiscal year 1981
alone after the budget was submitted to the Congress.
It appears that GSA uses the inflated reimbursements from the
Department of Defense to construct new space for civilian agencies
while DoD generally must ask the Congress directly for its own
appropriation for construction. In other words, it appears that the
Department of Defense is subsidizing the construction and space
requirements of civilian agencies of the government since the De-
partment of Defense rarely has facilities constructed for it by GSA.
Finally, the Committee has reviewed the annual position of the
reimbursements of the General Services Administration and found
that the receipts from SLUC rental from Federal Agencies exceeds
the cost to GSA by some $400 million. As a result, the Committee
is including a general provision in the Defense Bill limiting the
reimbursements to GSA for space provided to only 50 percent of
the budgeted levels. The Committee estimates that this would save
$86.7 million in fiscal year 1982 and still leave GSA with a surplus
in excess of $300 million. It is the Committee's intent that the same
level of space be provided by GSA as requested in the fiscal year
1982 budget, but that the General Services Administration be reim-
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bursed at a rate no more than 50 percent of the rates that were in
effect on October 1, 1982.
NATIONAL CAPITAL REGION. TRANSPORTATION CONSOLIDATION
Last year the Committee reviewed the Navy's National Capital
Region Transportation Consolidation. Program and concluded that
the effort was producing better transportation service at a substan-
tially reduced cost. Language was included in the report on the
fiscal year 1981 Defense Appropriations Bill encouraging continued
initiatives along these lines including cross service consolidation.
After additional review, the Committee believes that further con-
solidations in this area are not only feasible but desirable and is
therefore directing that a centralized national capital region motor
pool be established patterned after that created by the Department
of the Navy. No dollar reduction is made this year because the
Committee believes that the savings the first year of consolidation
will be required for procurement of communication equipment for
the vehicles. The Committee specifically is directing consolidation
into one central pool in order to prevent each service from dupli-
cating the computer and management overhead that currently
exists within the Department of the Navy. The Committee also
requests that the Department review the feasibility of centralizing
the transportation efforts in other geographic areas of substantial
defense presence in future years using the national capital region
consolidation as a model.
The Navy Audit Service has recently recommended that the
national capital region facilities. and services staff consider consoli-
dating the maintenance and operation of general purpose transpor-
tation equipment in the national capital region. The audit indicates
that although the Navy agreed with the concept, no action had
been taken to implement the findings. The Committee directs that
the Navy immediately begin consolidation of general purpose
transportation equipment in the National capital region.
Army
Other base operations adjustments to the Army, Operation and
Maintenance request include a reduction of $10 million to a pro-
gram which the Army lables "quality of life." One particular por-
tion of this program referred to as community support has in-
creased from $105 million in FY 1980 to $175 million in the amend-
ed budget despite the fact that the Army's end strength has re-
mained essentially unchanged during this time period.
The base operations budget of the Army, Pacific forces, includes
an increase of $8.2 million for what is referred to as "pay back" to
Korea for resources previously withdrawn as a result of the Presi-
dent's intent to reduce U.S. forces stationed on the Asian main-
land." The Congress did not accept the proposed phase down of
U.S. troops in Korea and added money above the budget request
each year in order to support continuence of U.S. forces in Korea.
Basically the Army argues that it needs funds greater than those
originally withdrawn as a result of a "bare bones" funding policies
during the early planning stages of the Korean redeployment and
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because of higher inflation. The Committee did not provide the
additional $8.2 million requested since the FY 1981 Supplemental
included a significant amount to improve living conditions of U.S.
Army forces in Korea and it is not evident that the Army sus-
tained a real decrease in "living standards" in Korea as a result of
the attempt to withdraw U.S. forces.
Finally the Committee made an adjustment of $1.6 million to the
base operating request for Rocky Mountain Arsenal in Colorado.
The Committee has been urging the Army to close this facility once
the 888 chemical Weteye Bombs were removed from the facility.
This represents a minor adjustment to the $16.9 million in FY 1981
budget and the $15.8 FY 1982 request. This reduction will help to
bring this facility on a glide slope towards closure in FY 1984 or
1985.
Air Force
The original Carter Administration budget proposed the phase
out of 18 Dew line radars in FY 1982. This reduction in Dew line
radars was estimated to save $19.4 million. The Air Force did not
like the decision as made by the Office of the Secretary of Defense
and found offsetting funds and restored the reduction prior to
submitting the original Carter Administration budget. The Reagan
Administration March supplemental provided an addition of $19.4
million to continue operation of these radars. Since the Air Force
never reduced its planned funding of the Dew line system in the
first place there is not need to provide an additional $19.4 for base
operating support for these systems.
In recent fiscal years 1978, 1979 and 1980 costs of operating the
Cadin/Pine Tree Radar line have increased significally for the
United States as a result of changing policies with respect to their
operation. The agreement with the Canadian Department of Na-
tional Defence and the Department of Defense basically requires
that the Canadian government provide for the personnel to operate
and maintain these radars while the United States would pick up
the contractual and related support cost. Over the years the
amount of direct military support has declined while contractual
support has increased significantly. The budget for FY 1982 request
an increase from $44.8 million to $52.1 million. The Committee
considers this excessive and has reduced the request by $3.8 mil-
lion. The Department of Defense should consider renegotiation of
this working agreement with the Canadian Department of Defence.
The Air Force budget for FY 1982 proposes the phase-out of two
F-106 squadrons and the phase-in of one F-15 squadron. The Air
Force budget made the appropriate flying hour adjustment but
failed to make a reduced base operating cost adjustment. A reduc-
tion of $2.1 million is recommended.
The General Accounting Office issued a report on July 8, 1981
(MASAD-81-27) on the Air Force's use of contractor operated
supply stores. The General Accounting Office basically concludes
that these contractor operated stores are unmanagable and ;vulner-
able to abuse. These stores were once envisoned as a practicable
and cost effective means for buying vehicle repair parts and civil
engineering supplies, but are now plagued by pricing irregularities,
contract abuses and repeated allegations of fraud. The GAO be-
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lieves that the Secretary of Defense should discontinue the use of
contractor-operated base supply stores. Workable, cost-effective al-
ternatives such as the government-operated store should be used to
reestablish purchasing control.. The Committee agrees with the
GAO position and has included the addition of $3.0 million in the
bill to support the phase-out and conversion to in-house operation
contractor-operated civil engineer supply stores (COCESS) and con-
tractor-operated parts stores (COPARS) as soon as possible. Exist-
ing contracts are not to be renewed.
Study after study during the past ten years has addressed the
need for the Department of Defense to unify and realign its traffic
management functions. The Conferees on the FY 1981 Defense
Appropriations Act recommended that the DoD move expeditiously
in the direction of establishing a unified Military Traffic Manage-
ment Agency or Command. The creation of such a command has
been recommended by the GAO, two studies by the Committee's
Surveys and Investigations Staff and by a recent contractor study.
While the Committee did not have an opportunity to conduct a
detailed hearing on the plan to improve deployment planning and
traffic management, there is every indication that the Department
of Defense is moving in the right direction. On June 29, the Deputy
'Secretary of Defense notified the Committee of his intentions to
reorganize management of the Defense Transportation System to
make it more compatible with the commercial transportation re-
sources on which the Department must rely in peace and war. This
involves the transfer of the Sealift Cargo/Passenger Booking and
Contract Administration functions from the Military Sealift Com-
mand (MSC) to the Military Traffic Management Command
(MTMC). This action, when completed, will establish MTMC as the
single manager for all surface cargo movements from origin in the
U.S. to overseas destination in peace and war.
There is also under development a plan to clearly delineate
passenger movement responsibilities of the Military Airlift Com-
mand and the MTMC and the various installation transportation
officers.
On September 16, 1981, the Deputy Secretary of Defense further
informed the Committee of a decision to consolidate the Military
Sealift Command and the Military Traffic Management Command
into a single agency. This is to be done in conjunction with a plan
to strengthen the Joint Deployment Agency giving it responsibil-
ities for contingency and time-phased deployment planning.
The Committee heartily supports all of the above efforts- and
looks forward to receiving additional information on the proposal
as various aspects are finalized. The proposals presented in sum-
mary fashion by the Department of Defense appear to offer the
potential for reducing logistic support costs while improving the
ability of our deployment and transportation management systems
to react to emergency situations.
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TRANSPORTATION ADJUSTMENTS
The budget request for the Department of Defense includes about
$3.2 billion in the operation and maintenance appropriation for
transportation expenses. Included is all second destination trans-
portation, most first destination transportation funds and funds to
r. operate the LOGAIR/QUICKTRANS commercial contract airlift
systems. This represents an increase of about $1.4 billion from the
fiscal year 1980 level.
The bill as reported by the Committee contains some minor
4 adjustments for transportation activities. The Committee found
that the Air Force request contained about $14.6 million for what
was referred to as "readiness shipments". These shipments of mu-
nitions and lumber are scheduled for the near term pre-positioned
ships. The ships will not be ready to receive the equipment in fiscal
year 1982. The bill also includes a reduction of $14.7 million to the
Army second destination transportation request. The Army did not
justify this portion of the program growth. This reduction is offset
by the transfer of $25 million for first destination transportation of
ammunition from the ammunition procurement account, Army.
PERSONAL SERVICES/CONSULTING TYPE CONTRACTS
On March 31, 1981, the General Accounting Office issued an-
other in a series of reports showing serious and pervasive problems
in DoD's use of consulting services and other management support
service contracts. This report was based on a review of 256 random-
ly selected contract awards valued at about $175.4 million. The
sample was drawn from contracts for (1) consulting services; (2)
management and professional services and special studies and
analysis; and (3) management support services for RDT&E.
In fiscal year 1979, DoD spent about $2.6 billion for these types
of contracts according to the GAO. The contracts range from rela-
tively simple studies to aid in management decisions to contracts
involving complex engineering support for major weapons systems.
No one really knows how much is spent for this type of contract.
A special analysis on Consultants, Studies and Analysis and Man-
agement Support Contracts submitted in conjunction with the
budget shows a total of about $1.6 billion for such contractual
efforts. However, the amount of funds shown on this special analy-
sis have varied greatly in each of the past three years. The $1.6
billion reported by DoD differs from the $2.6 billion estimate of the
GAO or from a $3.2 billion estimate which was reached by analyz-
ing the Commerce Business Daily for a category contract award
called Expert and Consultant Contracts. On the other hand a
review by DoD using the contracting reporting system (DD-350
form) showed that there was only $156 million of such contracts.
The latest GAO reports disclosed many of the same problems
that have been repeated in these annual reports dealing with de-
fense appropriations for the past three years. Much additional
information on this subject is provided in Part 5 of the Committee's
hearings for FY 1982 (pages 575 to 1042). Despite considerable
attention having been focused on this matter in recent years,
misuse of consulting service contracts remains a serious, pervasive
problem which has been documented in these hearings.
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There remains almost a complete absence of competition and
awarding consulting type contracts initially and even when the
initial contract award is made on a competitive basis there is a
tendency to lump task order on top of task order never completing
the contract. It is not at all unusual to find contracts where the
amounts paid under the contract exceed the face value by ten
times or more.
The use of unsolicited proposals remains high. Over 40 percent of
the contracts randomly selected and reviewed by GAO resulted
from unsolicited proposals. Many of the contracts turn out to be a
complete waste because the organizations awarding them never use
the resulting studies.
Last June the GAO issued an overview report on the use of
consulting service contracts to perform work that rightfully should
be done by federal employees. ("Civil Servants and Contract Em-
ployees: Who Should Do What For the Federal Government"
FPCD-81-43). This report discussed several previous GAO audits
that found many agencies using contractors on work which in-
volved basic management decisions. Generally, the agencies, includ-
ing DoD, claim that the contractors are not making final decisions.
However, there remains much concern that contract personnel are
influencing the Department's control of federal programs and poli-
cies.
GAO found that DoD contractors were playing a significant role
in identifying defense needs and, in effect, articulating and per-
forming DoD management functions. The result is that DoD is
weakening its ability to perform in-house work essential to its
mission. Several contracts reviewed by DoD appeared to be pre-
empting DoD's perogatives and directing national defense and in
managing and directing the Armed Services. The Department uses
contractors to:
-Develop plans and organizational responsibilities in the event
of mobilization;
-Review the performance of other contractors;
-Prepare basic contracting documents, evaluate other contrac-
tor's proposals and help negotiate the final contract.
These functions are the responsibility of the Secretary of Defense
and should be delegated only to other federal officials. Many wit-
nesses appearing before the Committee in recent years have re-
peatedly stated that the expertise to perform these government
functions was not available. Personnel ceilings and to a lessor
extent pay ceilings were cited as reasons why the government must
rely so heavily on personal service type contracts.
This same GAO report contains an interesting dichotomy. At the
same time that federal agencies, including the DoD, are using
contractor personnel for work that should be done in-house they
are using government employees to provide commercial services
that contractors could provide in many cases at a lower cost. The
Committee continues to believe that appropriate and proper appli-
cation of the policies contained in OMB circular A-76 would be
effective in freeing positions and thereby having room under cur-
rently existing ceilings to perform government management func-
tions by government employees. Another alternative long support-
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ed by this Committee is to eliminate the civilian personnel ceilings
in their entirety.
The bill as presented by the Committee contains adjustments in
personel service type contracts. In many cases, these adjustments
have been allocated to individual line items within the various
i appropriations contained in the bill.
Included are reductions to programs of the Naval Air, Sea and
Supply systems commands, the Joint Cruise Missile project office,
engineering service support at overseas bases, and various research
and development programs.
EFFICIENCY REVIEW PROGRAM
The Committee is continually interested in promoting efforts to
improve efficiency in the operations of the Department. One par-
ticularly promising initiative toward this goal is the efficiency
review process required under Circular A-76 for activities being
considered for contracting out. Circular A-76 requires that an ac-
tivity being studied for conversion to contract must use the most
efficient possible organization in comparing the cost of each oper-
ation.
The General Accounting Office, in a report issued September 30,
1981, documents that for those activities where efficiency reviews
are conducted, an average 5 percent savings results. However,
about 80 percent of DoD's 15,000 commercial activities are exempt
from the program for various reasons. The Committee believes the
Department should substantially expand the scope of these efficien-
cy reviews to include activities not under consideration for con-
tracting. A conservative estimate of the savings that would result
from these reviews is $50 million. Thus, the Committee recom-
mends a reduction of this level to be allocated among the services
based on their proportion of the Department's commercial activi-
ties. The Committee has tentatively allocated this reduction as
follows:
Million
Army ................................................................................................................................... $12
Navy ................................................................................................................................... 17
Marine Corps .................................................................................................................... 1
Air Force ............................................................................................................................ 14
Defense Agencies .............................................................................................................. 6
FOREIGN MILITARY SALES
On May 21, 1981, the Subcommittee on Defense conducted a
hearing on the Defense Department's continued failure to establish
an adequate accounting and financial management system to elimi-
nate U.S. subsidies to the foreign military sales program. Testimo-
ny was presented by the U.S. General Accounting Office, and the
Defense Security Assistance Agency.
Background
Foreign military sales are authorized by the International Secu-
rity Assistance and Arms Export Control Act of 1976 which amend-
ed and revised the Foreign Military Sales Act of 1968. During the
past decade, a decade in which foreign military sales have grown
from an annual rate of $1 billion to $12 billion, this committee has
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been critical of the Department of Defense's unwillingness and/or
inability to comply with the Arms Export Control Act and related
laws to ensure that the cost of this program is, in fact, borne by
foreign governments and not by the United States Department of
Defense and ultimately by the U.S. taxpayer.
The FMS sales program continues to grow. Even though the
previous Administraton adopted a policy to restrain arms sales,
annual sales and active cases continued to increase in value. As of
June 30, 1979, the Defense Security Assistance Agency was manag-
ing about 15,500 cases valued at $72.5 billion.
B the end of April 1981, this had grown to 16,891 cases valued
at 96.3 billion. Annual sales are currently running at a $15.0
billion level. When dealing with management effort of this size
"minor" mistakes and shortcomings can translate into tens of mil-
lions of lost dollars to the U.S. Treasury.
Foreign military sales accounting and financial management in-
volves more than 40 Defense organizations. The Security Assist-
ance Accounting Center in Denver, Colorado, was established in
November 1976 and is Defense's central foreign military sales bill-
ing and collection organization. The Center is responsible for pro-
viding foreign customers an accounting of what has been done with
their deposits into the foreign military sales trust fund.
The trust fund contains advance payments from foreign govern-
ments as required by the Arms Export Control Act. Each year
between $8 billion and $9 billion is deposited into and disbursed
from the trust fund. The average trust fund balance is about $6
billion. The Center was created to (1) provide a single point in the
Defense Department for foreign countries' inquiries concerning fi-
nancial aspects of sales agreements and (2) assure uniformity in
billing and collecting. The military departments previously were
responsible for these functions, but they have done a poor job, and
their efforts to standardize billing and collecting have failed.
The military departments are responsible for detailed obligation,
expenditure, and cost accounting; for paying contractors; and for
reporting these disbursements as well as other financial informa-
tion to the Center. Each department developed its own system to
account for and report sales transactions. The Center is dependent
upon their input, which is nonstandard, to prepare foreign custom-
er's bills, reimburse the departments' appropriations, and account
for trust fund expenditures.
OVERVIEW OF PROBLEMS IDENTIFIED IN ACCOUNTING FOR FMS
For years, Defense has experienced serious accounting and finan-
cial management problems with regard to the foreign military
sales program. Over the past decade, GAO and Defense internal
audit staffs have issued numerous reports on the Department of
Defense's continued failure to recove hundreds of millions of dol-
lars in costs incurred for foreign military sales and Defense's in-
ability to give foreign governments a proper accounting of how
their money was spent. The military departments and Defense
agencies have not adequately implemented Defense pricing policies
and Defense policymakers have not performed sufficient followup
or monitoring of actual cost. recovery. Further, Defense has not
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developed an adequate centralized accounting and financial man-
agement system for foreign military sales.
Testimony during the hearings showed that corrective action has
been taken by Defense on some of the problems noted in the GAO
and Defense internal audit reports. This action, however, has
usally been slow in coming, narrowly confined, and implemented in
an inconsistent manner. Moreover, Defense's attention to the over-
all problem of inadequate foreign military sales cost recoupment
has been largely limited to policy. formulation with considerable
less impact on program execution.
In April 1981, the Deputy Secretary of Defense alerted the mili-
tary departments and Defense agencies to the need for particular
emphasis on certain financial management areas. A memorandum
by the Deputy Secretary of Defense pointed out that less than full
recovery of costs when billing foreign customers must be borne by
Defense appropriations. In addition, the memorandum recognized
that Congress has reduced Defense appropriations because of past
failures to recover full costs and stressed the need to avoid such
cuts in the future.
Although testimony indicated that some improvements have
been made and management awareness has increased, it also was
apparaent that more must be done.
The Department of Defense still has serious financial manage-
ment problems in accounting for Foreign Miltary Sales. Many mil-
lions of dollars are not being recovered from foreign customers as
required by law. Further, a centralized accounting system has not
been developed, although a study/test program has finally got un-
derway. Many of the more important recommendations made by
GAO and endorsed by this committee to improve accounting sys-
tems for foreign military sales have not been implemented.
Major unresolved problems that continue to plague accounting
and financial management of the foreign military sales program
include the following:
-Defense's foreign military sales policies have not been uniform-
ly implemented because each of the military departments has
a different accounting system. There has been little progress
by Defense in moving toward the development of a centralized
accounting system.
-Personnel ceilings have affected the ability of the military
services to improve their accounting and financial manage-
ment systems for the foreign military sales program.
-Defense needs to estabish and implement pricing policies that
result in full cost recovery.
-Congress is not provided with adequate information to exercise
oversight and control over the waiving of nonrecurring re-
search, development, and production charges on sales to for-
eign customers.
-A huge backlog of unclosed cases because billing data cannot
be matched with delivery data.
CENTRALIZED ACCOUNTING SYSTEM FOR FOREIGN MILITARY SALES
Defense has continued to experience accounting and financial
management problems during the past decade because it lacks an
adequate centralized accounting system. The exising accounting
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systems were not designed to accommodate the phenomenal growth
of the foreign military sales program, and a standard Defense-wide
system was not developed. The inability to properly manage the
finances of the foreign sales program will, in all probability, contin-
ue until a comprehensive centaralized accounting and financial
managment system is developed solely for foreign military sales.
Even then problems will remain, and it will probably be years
before centralization is completed.
Foreign military sales are unique in that funds of another coun-
try are involved. The United States has a fiduciary responsbility
that goes beyond normal Government appropriation and expendi-
ture accounting. By the terms of the Arms Export Control Act, the
cost of the program must be assessed foreign governments, and,
therefore, good accounting, costing, and financial management
sytems are required.
In the past decade, Defense has been criticized by the Congess for
its inability to properly manage the finances of the foreign sales
program. Defense has acted to improve accounting, costing, billing,
and collecting. Several systems, have been developed and are under
development. Nevertheless, serious problems still exist.
The- advantages of developing a comprehensive centralized ac-
counting and financial management system include:
-Uniform accounting and financial reporting, thus eliminating
the reporting of nonstandard accounting data and providing
greater accounting control. Each of the military departments
has a different accounting system for foreign military sales.
-Timely and complete adoption of Defense Department account-
ing policies such as direct cite accounting.
-Improved control over foreign military sales disbursements to
preclude such problems as the Navy's inability to reconcile
$554 million in differences between foreign government cash
balances shown on its records and the balances shown in the
foreign military sales trust fund. Further, as of September
1979, detailed accounting records for foreign military sales cus-
tomers differed by $1.5 billion from trust fund records showing
cash on hand. After considering manual processing delays,
system deficiencies, and identifiable accounting errors, unex-
plained differences were still about $390 million.
-Improved accounting for the program, thus better enabling the
Department to meet its fiduciary responsibility to its foreign
customers. Because. the correct balance of Defense's foreign
military sales trust fund was unknown, Defense did not have
adequate control over foreign military sales accounting. As a
result, it could not provide foreign customers with an accurate
accounting for funds deposited in trust accounts. Also, Defense
could not determine the amount of money available to foreign
customers for purchasing military goods and services.
Better programwide planning because accounting and financial
management will not be fragmented.
Under the central accounting proposal, military departments
will still be responsible for implementing foreign sales agreements.
The centralized accounting system would provide for supporting
systems to be used by the military departments to report certain
needed financial data. The military departments, however, would
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no longer be responsible for accounting and case management of
the program.
In 1979, GAO identified the advantages of developing a compre-
hensive centralized accounting and financial management system.
However, since that time, Defense has allowed each military de-
partment and the Security Assistance Accounting Center to contin-
ue to operate their own financial management and accounting
systems. Because of this need for a centralized accounting system,
Defense has continued to experience problems in identifying costs
incurred to operate the foreign military sales program and has not
been able to provide foreign countries with an accurate accounting
for funds deposited in their trust fund accounts.
Because Defense has not developed an adequate accounting
system, its problems in identifying costs incurred to operate the
foreign military sales program and in providing foreign countries
with an accurate accounting for their funds have continued. To
remedy this serious problem, in May 1979, GAO recommended that
the Congress require Defense to produce a plan for centralizing
accounting and financial management of its foreign military sales
program. This plan was to include obligation and expenditure ac-
counting and disbursing of funds, and was to ensure that all costs
properly chargeable to the program were fully recovered.
This committee, in its fiscal 1980 report, recommended that De-
fense produce a plan for centralizing accounting and financial man-
agement. The plan was to be developed by March 1980.
However, Defense did not develop a plan addressing the commit-
tee's recommendation. Instead, in March 1980, the Department
provided a detailed schedule for completing a centralized disburse-
ment test and providing the findings, conclusions, and recommen-
dations by January 31, 1980. Defense stated that it recognized the
need to improve the financial management of the program, but had
reservations about centralizing the accounting and disbursing.
By June 1980, it became evident that the centralized disburse-
ment test would not result in valid conclusions, primarily because
the number of contracts and cases were considered by Defense to
be inadequate to constitute a valid test. Also, because significant
delays were encountered, the remaining time available for the test
was insufficient. The Defense Audit Service, in September 1980
recommended, and Defense agreed, to expand the test and change
the established milestone dates given to the Committee.
A revised test plan was developed in October 1980. The revised
plan increased the test size and called for completion by September
30, 1981, with a final report to the Congress by December 31, 1981.
However, significant interim milestone dates have been missed. For
example, the transfer of the additional contracts for the test was
not accomplished by the date planned.
The test addresses centralizing disbursement of funds for selected
contracts, and expenditure accounting for contracts. However, the
test does not address problems in obligation accounting, expendi-
ture authority, or case level accounting, and does not ensure that
all costs properly chargeable to the foreign customers are fully
recovered. Although Defense has taken other actions to address its
problems, it has not developed a comprehensive plan for an inte-
grated foreign military sales accounting system.
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DoD efforts to centralize financial management have, in the past,
been primarily limited to billing and collecting. In establishing the
Security Assistance Accounting Center in November 1976, Defense
sought to centralize billing and collecting. Although the Center has
provided standardized billing, collecting, and other financial man-
agement controls, it still depends on the military departments'
accounting systems for its financial information. For the most part,
the Center acts as a clearinghouse operation that reports to foreign
customers only what it is told.
Although one of the Center's primary fiduciary responsibilities is
to advise foreign customers how their money was spent, the Center
has had little, if any, input into the design of the military depart-
ment systems for reporting financial information. As a result, these
systems, which were developed independent of each other, have not
provided accurate or timely financial data. For example:
In June 1977, the Assistant Secretary of Defense (Comptroller)
directed that a new foreign military sales financial reporting
system be adopted. The system, when fully implemented, was
intended to give the Department a better view of and control
over the use of foreign military sales budget authority and to
improve management of the trust fund. Nearly four years after
its implementation was mandated by the Assistant Secretary,
the system has not been fully implemented and actions by the
military services to implement it have varied.
Currently, each service is developing a separate customer order
control system and data base that will not be integrated or
standardized. The Navy is designing * its system, while the
Army and the Air Force have partially implemented their
systems. These systems, if completely implemented, would give
each military department a system to control obligations and
expenditures. However, these developments are a step toward
three separate accounting systems-not one integrated Defense
system at the Security Assistance Accounting Center.
The hearings demonstrated that, as a result of the need for a
centralized accounting case level system accompanied by central-
ized standardized case management, past problems are continuing.
Although there was general agreement on this point, there was
disagreement on the extent of the problems. However, the hearings
made it apparent that, until a centralized accounting system is
developed, problems such as inadequate accounting for trust funds
can be expected to continue.
The proposed DoD approaches are likely to prove unsuccessful
and only waste additional time and money. The Committee once
again reiterates the need for Defense to move expeditiously in the
establishment of a centralized accounting system for FMS sales.
This system need not include centralized disbursing initially, since
there is some information that disbursing against the FMS trust
fund, if limited to a reasonable number of disbursing activities and
reported promptly and accurately to the Security Assistance Ac-
counting Center (SAAC) can be done more economically using ex-
isting disbursing offices. The Committee does not wish to preclude
centralization of FMS disbursing, if it proves necessary in order to
gain effective management control.
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STAFFING LIMITATIONS IMPAIR EFFORTS To IMPROVE ACCOUNTING
AND FINANCIAL MANAGEMENT
One of the most serious constraints on the development of an
adequate accounting system for the foreign military sales program,
has been limitations on staffing. Security Assistance Accounting
Center personnel, although agreeing with the principle of central-
ization, indicated that the Center does not have adequate personnel
or computer capabilities to deisgn and operate the required system.
Additional personnel and resources would probably be needed to
develop and carry out a detailed implementation plan for central-
ization and to assure that any new system provided accurate and
timely data before its adoption. The Arms Export Control Act
requires foreign countries to reimburse Defense for the cost of
administering the foreign sales program. The cost of any additional
personnel or computer equipment needed to administer the pro-
gram will be covered by reimbursements. However, military and
civilian personnel ceilings imposed by the Congress and OMB re-
strict the hiring of additional personnel to administer the foreign
sales program. Defense officials said that personnel ceiling and
restraints on the purchase of computer equipment have affected
their ability to impove their accounting and financial management
systems for the program.
Once a centralized system has been developed and thoroughly
tested, existing personnel positions in the military departments
could be transferred to the central accounting organization, and
duplicate accounting operations could be stopped. The new system
should conform to the accounting principles and standards pre-
scribed by the Comptroller General and should be submitted to him
for approval as required by the Budget and Accounting Procedures
Act of 1950.
Because the additional personnel needed to improve accounting
and financial management of the FMS program would not cost the
U.S. taxpayer any money, personnel ceilings should not be im-
posed. The Committee believes the personnel ceiling should exclude
personnel who spend fifty percent or more of their time on FMS
functions. If there is trouble in gaining OMB approval in removing
FMS management personnel from Deparment of Defense ceiling
limitations, the Committee recommends that the positions be con-
verted to non-appropriated fund status. These positions are in fact
non-appropriated fund because Foreign Governments pay the bill
even though they are not counted as non-appropriated fund em-
ployees.
PRICING PROCEDURES Do NOT RESULT IN FULL COST RECOVERY
During the past decade, DOD has repeatedly failed to recover all
costs of foreign military sales. This failure has resulted in large
subsidies to the sales program-a practice which this committee
has previously gone on record as wanting Defense to avoid. Con-
tinuing weaknesses in pricing procedures and practices have, ac-
cording to over thirty GAO audits, resulted in hundreds of millions
of dollars not being recouped from foreign governments.
Failure to charge the right amount for equipment and spare
parts is the most significant overall problem Defense has experi-
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ence in pricing foreign sales. However, GAO and Defense auditors
have also identified a wide range of other problems regarding the
failure to recover full costs such as those for
-administrative support of the program,
-use of U.S. Government-owned plant and equipment, and
-normal inventory losses.
Some of the more serious deficiencies discussed during the hear-
ings require prompt corrective action by Defense.
Pricing of Secondary Equipment Items and Spare Parts
In 1978, Defense was not charging foreign governments the re-
placement cost of items sold from its inventories as required by
law. Defense's failure to charge the replacement cost resulted from
-pricing policies that were ambiguous, conflcting, and difficult
to apply; and
-an unworkable system of identifying item replacement cost.
A more current review of pricing for stock fund and secondary
items, performed by GAO at the request of Senators Percy and
Hollings, showed that Defense is still not recovering replacement
costs because item prices are established without
-considering the most recent purchase price,
-accumulating inflation factors, and
-consistently and accurately apply Defense policies and proce-
dures.
As a result, Defense is still losing millions of dollars each year
because of underpricing of stock fund and secondary items sold to
foreign customers. Accordingly, the Committee is recommending a
reduction of $16.0 million to the procurement accounts, and $120
million to the stock fund requests. It should be relatively easy for
DOD to recover these funds from the customers since final billing
or case close-out has not been completed. Procedures for repricing
these items can be updated rather quickly.
Recovery of Administrative Support Costs
GAO reports issued in 1977 and 1978 showed that inadequate
methods of accounting for and recovering personnel costs incurred
in administering the foreign military sales program resulted in
millions of dollars of costs not being properly billed to foreign
governments. A followup review by GAO indicates that millions of
dollars are still not being recovered for administrative costs associ-
ated with the foreign purchases of military equipment and services.
In addition, both GAO and the Defense Audit Service have found
that the Defense Security Assistance Agency has adopted the posi-
tion that only those costs that can be proven to vary with fluctu-
ations in the military sales program will be recovered. In the
Committee's opinion, this is a restriction upon the military services
that will not allow them to budget for identifiable expenses. Exam-
ples of identifiable expenses that will not be allowed are:
-Salaries and related expenses for personnel working less than
10 percent of their time on supporting the foreign military
sales program. _
-Pro rata rent or utilities at locations that are not considered to
be 100 percent dedicated to supporting foreign military sales..
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-Other miscellaneous expenses, such as base support personnel,
that could be prorated based on applicable direct man-years of
effort.
An idea of the effect of this restriction can best be conveyed by
quoting a high level Air Force official regarding the Air Force's
fiscal 1981 administrative budget. Commenting on the restriction,
the official said:
This budget estimate was computed by using Defense
Security Assistance Agency's interpretation of "full cost-
ing." However, if we had used. the GAO interpretation, the
estimates would be some 750 man-years or $21 million
higher.
Production Costs Still Not Fully Recovered
Since early 1970, GAO has reported that the costs of using Gov-
ernment-owned assets to produce items sold to foreign governments
were not being recovered. In all, six GAO reports have been issued
disclosing millions of dollars in unrecovered costs. A GAO report,
issued in June 1979, recognized that DoD had made a marked
improvement in its effort to recover in accounting and billing
systems still existed. During fiscal 1979 and early 1980, Defense,
acting on GAO's recommendations, collecting over $52 million in
asset-use and rental charges from foreign governments.
DoD has not solved all of its problems in this area. In September
1980, the Defense Audit Service disclosed that DoD had not billed
foreign customers for nearly $1 million in asset-use charges on
selected foreign military sales cases. These undercharges resulted
because the military services did not ensure that customers were
charged for contractors' use of Government-owned facilities and
plant equipment and because of cost reporting problems.
Normal Inventory Losses Still Not Recovered
In September 1977, August 1978, and May 1979, GAO reported
that Defense appropriations were being used to subsidize the for-
eign military sales program because customers were not assessed a
portion of the cost of normal inventory losses. GAO reported that
the Department of Defense was losing millions of dollars on sales
to foreign governments each year.
Inventory losses are a normal cost of operating the Defense
supply system and include such elements as disposal of excess or
obsolete equipment caused by technological improvements and
errors in estimating needed quantities, damage and deterioration
due to normal wear, shortages and overages discovered in physical
inventories, and pilferage.
The Arms Export Control Act was amended in September 1978 to
expressly require the recovery of these costs on Defense items sold
under cooperative logistics supply support arrangements. However,
more recent audits show the military service still have not imple-
mented this requirement.
In a recent report, GAO recognized that the Arms Export Con-
trol Act does not expressly require that normal inventory losses be.
charged on sales under other than cooperative logistics supply
support arrangements. GAO has long contended that inventory loss
costs should be included on all sales of secondary items. Informa-
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tion developed as part of the followup work requested, indicates
that Defense will lose several million dollars on secondary item
sales each year if a factor for normal inventory losses is not includ-
ed in sales prices of these items.
There is little doubt that noncooperative logistics supply support
arrangement customers benefit from Defense s maintenance of an
inventory system. Allocating indirect costs such as inventory losses
to all customers benefiting from the system which generated those
costs is a standard accounting practice. While the act does not
expressly require that inventory loss costs be recovered on nonco-
operative logistics supply support arrangement sales, it does not
prohibit such charges, and their inclusion would be consistent with
the intent of the act that Defense appropriations not subsidize the
foreign military sales program. It is also pointed out that the
selling price of stock fund items does include a surcharge for
normal inventory loss whether or not the sales are under coopera-
tive logistics supply support arrangements. No specific reduction is
recommended for inventory losses, but this loss has been taken into
consideration in the reduction made for pricing procedures for
secondary and stock funded items.
Need To Monitor Implementation of Pricing Policy
The persistence of pricing problems over several years resulted
in a GAO recommendation in August 1978, which this Committee
supported, that a new or existing organization be given specific
responsibility for ensuring effective and consistent implementation
of foreign military sales pricing policies. The Security Assistance
Accounting Center was told, in September 1978, to periodically
perform quality assurance pricing tests. At the time of the Commit-
tee's hearing (June 1981), this function has not been fully staffed.
The continuing nature of the many pricing problems discussed
during the hearings serves to illustrate the need for one activity to
have specific responsibility for administering pricing policy and
monitoring pricing systems. Until this activity effectively provides
the needed surveillance over the pricing function, problems can be
expected to continue. In view of the Committee's earlier guidance
concerning staffing limitations and personnel ceilings there is no
reason not to provide personnel needed to conduct these pricing
reviews.
WAIVERS OF NONRECURRING COSTS
Congressional oversight and control over the foreign military
sales program is necessary to ensure compliance with congressional
intent that foreign governments not be subsidized through the
program. To carry out this oversight- and control, the Congress
must have adequate information.
One of the most significant problems of this nature reported by
both GAO and Defense auditors is that DoD has not kept the
Congress informed of waivers for non-recurring research, develop-
ment, and production costs. Since 1976, Defense has authorized cost
waivers of over $800 million without being required to report to the
Congress on how the United States benefits from the waivers. The
Arms Export Control Act provides that the President may waive or
reduce charges for non-recurring costs if the sale would significant-
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ly advance U.S. interests in NATO weapons standardization or
foreign procurement in the U.S. under coproduction arrangements.
In 1976, a Defense Audit Service report stated that the Air Force
had not included over $31 million in recoverable non-recurring
production costs on selected sales to foreign countries. Similar prac-
tices continued and in 1978, GAO reported on the need for more
attention to and control of cost waivers under the foreign military
sales program. The report addressed actions taken by DoD to au-
thorize, account for, and report significant costs waived for foreign
military sales and the pricing of these sales. The report showed
that the Congress had not been informed of the amounts being
waived and the specific reasons for granting waivers although this
information would have improved its oversight of the program.
GAO, the Defense Audit Service, and the Army Audit Agency all
have recently issued audit reports on cost waivers and the failure
to recoup the appropriate nonrecurring costs. These reports empha-
size the need for compliance with nonrecurring cost recovery re-
quirements and recommend improvements to protect the interests
of the United States. Although these deficiencies have been contin-
ually reported for the last several years, costs still are either not
computed, not computed correctly, or computed but not billed.
Defense did not concur with the GAO recommendations and has
waived several hundred million dollars in costs since the GAO
report was issued without reporting to the Congress on the
amounts of and justifications for these waivers. As a result, the
Congress is not being provided a complete picture of the costs
excluded from proposed foreign military sales prices. These waived
costs are often significant in relation to the total sales price and
should be disclosed so that the Congress can carry out its oversight
and control responsibility.
A report by the Legislation and National Security Subcommittee
of the House Government Operations Committee disclosed that
foreign governments waiver requests are granted routinely. The
report goes on to state that:
Since DoD is not required to get Congressional approval
before authorizing waivers or to report to Congress the
amount of the waivers, the value of these amounts are not
included in the U.S. financial contributions to NATO.
According to the Director of the Defense Security Assist-
ance Agency, no written criteria for reductions or waivers
of pro rata non-recurring costs exist. DoD has rejected
GAO's recommendations that such criteria be stated pub-
licly and approved by the Congress. Currently, most waiv-
ers are granted on the basis of NATO standardization if a
member of the alliance purchases the U.S. manufactured
weapon systems.
Aside from NATO standardization, the Defense Security
Assistance Agency has granted a waiver when the number
of units purchased by a foreign government is increased
over the original contract. The sale of F-18 aircraft to
Canada resulted in a waiver of $70 million in non-recur-
ring costs and a matching contribution by the Canadian
Government which enabled the Canadian Government to
purchase additional airplanes.
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It also appears that waivers are granted to facilitate the
sale of U.S. weapon systems to other countries. By waiving
non-recurring charges, the unit price of the weapon sys-
tems can be reduced. The Defense Security Assistance
Agency, therefore, often acts as a "salesman" for U.S.
manufacturers and also is in the position of influencing
the unit price of an item, an apparent conflict of interest.
The bill as reported includes a provision (Section 779) which
requires prior notification to the Appropriations Committees when-
ever DoD proposes to wave cost otherwise required to be recovered
under the Arms Export Control Act.
FOREIGN MILITARY SALES, SUMMARY AND CONCLUSIONS
DoD has failed to operate the foreign military sales program at
no cost to the U.S. taxpayers. Although the amount lost is in
dispute, the U.S. 'undoubtedly has absorbed hundreds of millions of
dollars in costs which should have been recovered from foreign
customers. Centralization of foreign military sales accounting and
financial management should, in the long term, be the best alter-
native for solving the accounting and financial management prob-
lems now plaguing the foreign military sales program.
The Committee recognizes that full centralization of accounting
and. financial management for foreign military sales could take-
several years and, in the short -run, require additional staff re-
sources. However, in the long run, this centralization will undoubt-
edly reduce the overall costs of administering this program. As a
result, it is believed that now is the time to move from the study
phase to the implementation phase and that personnel whose time
is primarily funded by foreign customers should be exempted from
personnel ceilings.
DoD pricing policies and practices for foreign military sales of
stock fund and secondary items still do not recover estimated re-
placement costs as required by law. As a result, many millions of
dollars continue to be lost and Defense appropriations continue to
subsidize the foreign military sales program. To comply with this
statutory requirement and the intent of the. Congress that these
sales not be subsidized, DoD must correct the weaknesses in its
pricing policies and practices. The Committee is recommending
certain financial adjustments in the bill as discussed earlier.
Defense should also make a reasonable attempt to collect from
foreign customers the undercharges that resulted from failure to
charge a reasonable approximation of replacement cost.
Action should be taken to attempt to collect undercharges as
expeditiously as possible before the military services make final
billings for contracts on which the undercharges have occurred.
Also, final billings should be adjusted when unauthorized devi-
ations from DoD pricing policies are discovered. The longer it takes
to attempt to collect undercharges, the more difficult it will be to
recover these amounts from foreign governments.
Also evidence presented at the hearing clearly indicates that
Defense may be routinely waiving non-recurring charges without
adequately considering whether the sale would significantly en-
hance U.S. interests in NATO standardization. Although the com-
mittee supports the goal of greater standardization within the
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107
NATO alliance, the Committee believes that this exception to the
general requirement of recovery of all costs associated with foreign
military sales should be more specifically justified. If the laudable
goal of increasing NATO standardization is viewed as an automati-
cally applied marketing tool, the chance exists that Congress may
.f rightfully conclude the U.S. taxpayer is being unfairly burdened by
a program that is not closely managed. The committee believes
that clearly defining and documenting the justification for each
waiver is in our national interest and will sustain the support
needed for this program.
Finally DoD is directed to: (1) move promptly to phase-in central-
ized accounting and financial management of the foreign military
sales program. This centralization should be accomplished by (a)
establishing centralized case level accounting and financial man-
agement for all new sales cases, (b) maintaining current accounting
systems for existing sales cases, (c) taking action to expedite closure
action for existing sales cases, and (d) developing and designing the
new centralized accounting and case managment system in accord-
ance with the Comptroller General's principles and standards; (2)
provide relief from personnel ceilings for individuals who spend
more than 50 percent of their time performing foreign military
sales functions for which Defense is reimbursed by the foreign
customers. This relief will permit Defense to add the necessary
personnel to phase in the centralized accounting and financial
management system for all new foreign military sales cases while
maintaining the present accounting system for existing foreign
military sales cases; (3) assign sufficient staff to the quality assur-
ance unit recently established at the Security Assistance Account-
ing Center to ensure that Defense components adequately and
uniformly implement equitable and effective pricing of stock fund
and secondary items to avoid subsidies to foreign customers; and (4)
report to Appropriations Committee the amounts and justification
for waiving non-recurring production and RDT&E cost of the FMS
program.
PROCUREMENT OF EAST GERMAN TYPEWRITERS
Testimony was received by the Committee concerning the pur-
chase of manual typewriters, to be used by the military services,
from Communist East Germany to the detriment of free-world
manufacturers.
There is no prohibition in the Defense Acquisition Regulation
against purchases of office equipment from East Germany manu-
facturers. Office sized manual typewriters from East Germany are
sold in the United States far below fair market value, at about half
the cost of almost all free-world manufactured manual typewriters.
American importers, wholesalers, and retailers cannot compete
using products of free-world countries when the manufactured
products of a state-controlled economy are allowed into the United
States at half the fair market value.
The Committee recommends to the Department of Defense that
an examination of existing regulations be made, to consider regula-
tions which would correct purchases of this kind, notwithstanding
the Treasury Department's contention that it would not be in our
best interest to disqualify East German manufacturers from bid-
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ding on ordinary commercial items like manual typewriters consid-
ering the excellent balance of trade in favor of the U.S. economy.
FIELD HOSPITAL PROGRAMS
The Army, the Navy, and the Air Force are embarking on major
programs to provide wartime medical care capability behind the
combat zone. The capability is directed to both a NATO and a
rapid deployment force scenario. The cost of this program for the
Navy alone is estimated to be about $700 million. The need for this
capability is not questioned. In fact, it is doubtful whether we could
now provide effective medical care in a war situation involving the
RDF. However, the Committee is concerned that there is lack of
coordination between the services. This situation can cause overlap,
duplication, and the wasteful expenditure of large sums of money.
The concern is highlighted by the appearance that the services are
taking different approaches to providing this capability.
The Committee believes, therefore, that it is premature to ap-
prove procurement funding. There is apprehension with respect to
the procurement of this type of hospital because the Committee
feels that the Services may not have adequately planned for joint
use and support of available medical resources in a NATO/Warsaw
Pact conflict or in a rapid deployment scenario. Facilities and
personnel may not be employed and/or utilized to their maximum
advantage.
The Services are individually responsible for programming funds
and resources to provide peacetime medical support. However, in
wartime, medical facilities should support United States forces
without regard to the parent service of the casualty. The Commit-
tee believes plans should be drawn to ensure that maximum usage
is made of hospitals regardless of Service affiliation. There are
hospitals that the Services have not made plans to expand to
maximum capacity to support wartime efforts. There are physical
plants which could be expanded to 1,000 beds or more in an emer-
gency. It would seem that this would be a better alternative than a
fleet hospital projected to contain 1,000 beds that will cover 60
acres; stored in Oakland, California; and to be flown to a "hot spot"
and then probably wouldn't be fully operational for 30 days. There
appears to be little or no comprehensive planning for the use of
existing facilities (hospitals, schools, or other buildings) that could
be converted into hospitals in a more efficient manner than trying
to deliver plane loads of collapsable type shelters. More considera-
tion should be given to using troop barracks, dependents' quarters,
buildings of opportunity with their related equipment to reduce the
anticipated shortfall in bed capacity.
For these reasons, the Committee recommends reductions of
$87,800,000 in Other Procurement, Navy, and $19,500,000 in Other
Procurement, Air Force.
The Committee also recommends that the DoD create a joint
project office to coordinate the planning and procurement for field
hospitals.
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CONTRACTING-OUT HOSPITAL OPERATIONS
For a number of years the Appropriations Committee has been
urging the Department of Defense to test the contracting out of an
entire military medical facility. In fiscal year 1981 the Committee
appropriated $19.4 million for contracting-out the operation of
three non-tertiary care in-patient medical treatment facilities.
These funds were not used to contract-out hospital operations but
were reprogrammed "to offset higher cost of care provided at PHS
and VA facilities" and higher priority "must pay" requirements.
The fiscal year 1982 estimate for contracting out hospital facili-
ties totaled $29.3 million. The Defense Authorization Bill for 1982
contains a provision prohibiting the contracting-out of an entire
medical facility. The authorizing bill also recommends deletion of
$15 million of the $29.3 million requested for contracting out. The
bill as reported by the Committee deletes the remaining $14.3
million.
Significant administrative foot dragging occurred with respect to
testing contract operations of a military hospital. The Appropri-
ations Committee viewed this approach as a means of challenging
the status-quo to induce efficiencies and economies in the in-house
system. Contracting has been successfully used by city and county
governments and by non-profit institutions. The Surgeons General
saw contracting as a threat to their organizations.
The Committee believes that contracting-out would have helped
the services staff other hospitals where medical personnel short-
ages exist and improved medical care at locations having high
proportions of active duty personnel. The contracted hospitals
could have concentrated on areas of high retired population. Also
there is good reason to believe that expansion of the in-house
system through contracting in certain geographical areas would
reduce the need to issue thousands of non-availability certificates
making personnel eligible to seek medical assistance elsewhere
because the in-house system cannot provide it. The incremental
cost of treating additional persons in already operating but under-
utilized in-house facilities would have been much less than the cost
of CHAMPUS care.
Finally, it was argued that contracting-out would have been det-
rimental to military readiness and war time health care. This
argument assumes that military personnel would not be available
in war time because they would have been replaced by contract
personnel. Certainly, availability of personnel who are already
working for the DoD, even if in a contract status, is more assured
than is the availability of a physician or other health provider
serving CHAMPUS patients in private practice. Contracting hospi-
tal operations, if properly administered, could insure the early
availability of additional health care providers to the military
health care system.
A larger, more efficient in-house military medical program would
reduce dependence on the billion dollar CHAMPUS program that
the surgeons general are quick to complain about. The Committee
is not unmindful of the many complaints directed at the CHAM-
PUS program as well as those directed at in-house military medical
facilities as they are currently operated. Challenging the existing
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system in this way offered an opportunity to make real manage-
ment improvements in the Defense health care system.
CIVILIAN HEALTH AND MEDICAL PROGRAM OF THE UNIFORMED
SERVICES (CHAMPUS)
The revised budget request for the Civilian Health and Medical
Program of the Uniformed Services for fiscal year 1982 is
$938,631,000, an increase of $57,867,000 over the $880,764,000 ap-
propriated for fiscal year 1981. The original January budget esti-
mate was $1,006,535,000.
The Committee is recommending a reduction of $2.5 million of
CHAMPUS funds relating to "study monies". CHAMPUS has pro-
grammed $1,231,600 for studies in fiscal year 1982. Also, the DoD
stated that an additional $2 million of CHAMPUS funds are with-
held annually to finance studies/projects which are initiated by the
Assistant Secretary for Health Affairs. The Committee recom-
mends deletion of the $2 million in CHAMPUS funds, which are
withheld annually to finance studies for the Assistant Secretary of
Defense for Health Affairs. The Committee is recommending that
$1 million of this money be transferred to the Office of the Secre-
tary of Defense where it can be identified and justified as money
for studies. The Department agrees that several projects. funded
with CHAMPUS monies should have been charged to the DoD
studies and analysis program rather than CHAMPUS. The CHAM-
PUS request for fiscal year 1982 includes an estimate of $500,000 to
make a "study to determine factors which influence beneficiary
access to civilian medical care and providers acceptance of CHAM-
PUS." The $500,000 award of a contract that DoD is considering is
a study to determine why more physicians do not participate in
CHAMPUS. This study would, in effect, test physician participa-
tion under outdated procedures. The Department has already
taken action on what many perceive are the two possible factors
affecting physician participation in CHAMPUS: (1) legislation to
make physician reimbursement levels more reflective of current
reasonable charges and (2) CHAMPUS has taken major steps to
simplify claims processing, including adopting the American Medi-
cal Association's claim form and requiring less physician documen-
tation. The provision recommended by the House Armed Services
Committee would correct many of these problems and would result
in improved health care delivery to military families. .
HEALTH CARE PROVIDED IN NON-DEFENSE FACILITIES UBLIC
HEALTH SERVICE HOSPITALS AND CLINICS)
For fiscal year 1982, the Department of Defense `requested funds
totaling $48.9 million to pay for health care provided by Public
Health Service hospitals and clinics. The Services' operation and
maintenance break-out for fiscal year 1982 shows the Army re-
questing $20.4 million, the Navy requesting $19.9 million, and the
Air Force requesting $8.6 million.
The Committee recommends a total appropriation of $32.9 mil-
lion, a reduction of $16,000,000 distributed as follows: a reduction of
$6.7 million for the Department of the Army; a reduction of $6.5
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million for the Department of the Navy, and a reduction of $2.8
million for the Department of the Air Force.
The Committee believes that savings to the DoD will be realized
since many persons using the Public Health facilities will return to
the "in-house" medical system which will only bear the increment-,
al costs, not the full cost of this cost. Obviously, the workload that
these dollars pay for will not entirely disappear.
ABORTION
The Committee concurs with the President's recommendation
concerning federal funding of abortions. The budget amendment
proposal of March 10, 1981, permits the use of Defense funds for
abortions only in cases where the mother's life would be endan-
gered if the fetus were carried to term. The recommended language
is the same as contained in the House-passed version of the fiscal
year 1980 Defense Appropriations Bill.
The language is as follows:
SEC. 757. None of the funds provided by this Act shall be
used to perform abortions except where the life of the
mother would be endangered if the fetus were carried to
term.
CAPITATION BUDGETING
The Department of Defense had been engaged in a program to
test whether a plan to manage medical resources on a population
served basis rather than by using past workload data would result
in improved medical care and efficiency. Under pressure from
rising health care costs that were drawing revenues from other
priority military needs, the military health service system engaged
a private company in 1976 to develop and test a capitation budget-
ing system for its hospitals. In one region, capitation budgeting
followed traditional lines of authority for budget development and
execution (based on past workload data). In the second test region,
a tri-service regional committee developed and executed the
budget.
Based on independent evaluation of the four year capitation
budgeting test, along with comments from the three Services, the
Assistant Secretaries of Defense for Health Affairs, Manpower,
Reserve Affairs, Logistics, and the Comptroller, the Department
concluded: (1) the methodology and regional management aspects
tested did not result in significant improvements over the tradi-
tional budgeting system, and (2) the management flexibilities in-
cluded in the test deserve further study as they indicate potential
for improving operations.
The net result was that the test was terminated at the end of
fiscal year 1981, and that a study of the management flexibilities
will be pursued for possible integration into the existing planning,
programming, budgeting structure. Therefore, the Committee rec-
ommends deletion of the capitation budgeting provision (Sec. 750 of
last year's Defense Appropriation Act).
H.Rept. 97-333 --- 8
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MILITARY GRADUATE MEDICAL EDUCATION PROGRAMS
The number of Army physicians involved in graduate medical
education and training programs continues to increase and re-
mains considerably higher than the Navy and the Air Force. The
total number of Army physicans- engaged in residency education
and training as of March 1979 was 1,068: as of June of this year,
the number had increased by 192, totaling 1,250, or an 18 percent
increase over the March 1979 level. Two years ago the Committee
strongly recommended that the Army reduce its graduate medical
education programs over a period of years. The Office of Secretary
of Defense backed up the Committee on.this matter at that time-
March 1979 but it is apparent that no progress has been made.
In 1979 the Army had approximately 35 percent of their physi-
cians engaged in graduate medical education and teaching pro-
grams, a large portion of these students and instructor physicians
were located at the Army medical centers generally distant from
the active duty and active duty dependent population. Today the
same situation prevails. Information made available to the Com-
mittee by the Army Surgeon General on June 23, 1981 shows a
total of 3,151 military physicians in the continental United States.
Of this total, 1,260 were residents in training. Thus, over 40 per-
cent of the total CONUS Army physicians are in a training status.
The Institute of Medicine stated in its report of July 1981 that
almost 60 percent of active duty Army physicians are assigned to
eight Army medical centers where most of the Graduate Medical
Education is provided. Thus, five percent of Army hospitals employ
or teach 60 percent of Army physicians. Most of these large hospi-
tals (medical centers) are located in large cities and are not near
posts with major troop concentrations. This results in a significant
portion of the patients treated in these centers being retirees, their.
dependents, and other secondary beneficiaries.
The increase in graduate medical education programs is designed
to assist in recruiting and retaining physicians but it has also
caused serious mal-distribution of active duty physicians among the
facilities operated by each military medical department. Some
posts in relatively remote areas are unable to provide essential
medical services for the active duty personnel and dependents pri-
marily because of physician shortage-the shortage being caused, ?
in considerable part, by the large percentage of physicians and
support staff being used to operate Graduate Medical Education
programs in metropolitan areas.
It is obvious that the assignment of 60 percent of Army physi-
at large Graduate Medical Education facilities and major
cians
medical centers has, and still does have an adverse consequence for
the staffing of the military hospitals operated by the Army. It also
drives up the numbers of physicians that must be employed by the
Army.
The Committee continues to believe that closure of one or two of
these facilities would be in the best interest of the Army and the
taxpayer.
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UTILIZATION OF MEDICAL FACILITIES
For several years, the Committee has discussed the subject of low
active duty utilization of medical facilities, particularly Fitzsimons
and Letterman Hospitals. The Department of Defense health offi-
cials have stated that the government is wasting money in some of
these underutilized areas because of political pressure.
Two years ago, the Army Surgeon General testified that "I am
probably the first Army Surgeon General who has ever been will-
ing to say that perhaps some of the Army medical centers are
located in the wrong place, but don't put the padlock on the door
tonight . . ." Two years have passed and there hasn't been any
padlock put on any door. As a matter of fact not one step has been
taken to relocate these resources.
Senate Report No. 97-67, accompanying the Supplemental Ap-
propriations and Rescission Bill, 1981, states that "The Committee
believes the Public Health Service hospital and clinic system no
longer can be justified as a Federal expense . . . . The Committee
is advised by the Administration that occupancy rates of the hospi-
tals have averaged about 67 percent since 1976 compared to nation-
al minimum standards of 80 percent occupancy." Testimony re-
veals that there were over 100 military hospitals that reported
occupancy rates of less than 80 percent or the national minimum
standard. There were over 30 military hospitals below the 67 per-
cent occupancy rate-the rate that was used as a criteria for clos-
ing PHS facilities but not a single military hospital is even being
considered for closure. Certainly, the occupancy rates are inform-
ative only when interpreted in light of the location, mission, size
and to some extent, the supported population, of the health care
facility. Nevertheless, if the Administration's criteria for closing
the Public Health Service hospitals is based on the fact that the
hospitals have averaged about 67 percent occupancy rates since
1976 compared to the national minimum standard of 80 percent
occupancy rates, then it would seem that at least some streamlin-
ing of the military medical facilities could be accomplished. One
way to streamline operations and improve utilization of medical
personnel is to close some of the underutilized military medical
facilities and transfer the manpower and equipment elsewhere to
better serve the active military personnel and their dependents.
ARMY MEDICAL INTELLIGENCE AND INFORMATION AGENCY
The Army Medical Intelligence and Information Agency (MIIA)
is located at Fort Detrick, Maryland, and is principally funded in
the intelligence budget. Additional funding is provided by the
Office of the Surgeon General in Program 8. Also this Agency has
used CHAMPUS funds to conduct operations. The mission of the
MIIA is to produce scientific and technical medical intelligence
studies and reports; administer the exploitation of foreign medical
materiel for the Army; to utilize the medical research and develop-
ment successes of other countries to improve U.S. efforts; and to
develop, manage and control medical data bases. As accomplish-
ments, MIIA claims: production of 120 Health Alert and Threat
Summaries in support of deployed U.S. forces and for contingency
planning; provision of information to medical personnel related to
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expected diseases from Cuban and Vietnamese boat people; provi-
sion of general medical information to the Air Force in support of
VIP. trips to foreign countries; evaluation of dangers to medical
teams designated to go to El Salvador and other politically unsta-
ble areas; and participation in planning for medical support for
RDJTF deployments.
A review of the mission and particularly the past accomplish-
ments of this Agency leads the Committee to seriously question its
need and utility. The Agency appears to duplicate the efforts of
other military and civilian medical hospitals, institutions, agencies,
and medical libraries in the United States. The Agency is not an
intelligence activity but serves as a medical information agency
and as a staff support agency for the Army Surgeon Generals'
Office.
The total direct funding estimate of the Army Medical Intelli-
gence and Information Agency amounts to. $1,214,000 for fiscal year
1982. The Committee recommends a reduction of $485,000 in the
Operation and Maintenance account and the closing of the Army
Medical Intelligence and Information Agency no later than Sep-
tember 1, 1982. To effect this closing by September 1, 1982, the
Committee is recommending the following general provision in the
bill:
SEC. 783. None of the funds provided in this Act shall be
available for operation of the Army Medical Intelligence
and Information Agency after September 1, 1982.
READINESS COMMAND
The Committee considered imposing a reduction to the budget of
the Readiness Command with a view toward disestablishing this
Headquarters. There is reason to believe the roles and missions of
the Command have become unclear since the creation of the Rapid
Deployment Joint Task force.
This concern was heightened when the previous Commander of
the Command testified he intended to recommend abolishing the
headquarters.
The Committee wants to be certain that critical missions would
continue to be carried out should Readiness Command be abolished
or reorganized in a major way. Certain essential transportation =
and communication functions and units come under this headquar-
ters. Precipitous action to dissolve the Command at this time could
well be counter-productive both from a fiscal and organizational
standpoint even though.the record suggests that major changes are
warranted.
Given this misgiving, the Committee recommends full funding
for the Readiness Command headquarters and will pursue the
matter in next year's hearings, hopefully, leading to a Committee
decision in connection with the fiscal year 1983 budget.
The Department of Defense and Readiness Command leaders
should prepare themselves for questioning as to the future require-
ments for this headquarters to include the planning for alternative
command arrangements.
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FORWARD BASING RDF
The Rapid Deployment Force concept has become a permanent
part of our overall doctrine of national defense. Taking this concept
into account, it is our responsibility to make rapid deployment
achievable.. In so doing, we must seriously address the question of
forward basing.
This Subcommittee is concerned that too many uncertain agree-
ments are assumed with countries in question. In order to assure
this Subcommittee of our ability to rapidly deploy our forces, we
strongly suggest that these assumptions be replaced with formal
agreements or appropriate understandings as soon as possible.
EQUAL OPPORTUNITY PROGRAM GROWTH
The Air Force budget request includes an increase of $300,000 to
start a new journal called "Defense Equal Opportunity Manage-
ment Institute Journal". This new publication would be produced
by a civilian firm and would replace the publication called "Reflec-
tions" produced in-house by the Air Force. The Committee believes
that such an important effort as Department of Defense-wide equal
opportunity policies should continue to be done in-house rather
than be farmed out to a civilian firm. Consequently the Committee
is deleting the requested increase of $300,000.
The Navy has requested a real program increase of $400,000 in
fiscal year 1982 in order to advertise, the United States Govern-
ment as an equal opportunity employer. The Committee believes
that it is important to insure that there is a representative number
of minority personnel within the Department of Navy. However,
when the Committee requested specific data to indicate how many
additional minority personnel would be hired or if the advertising
would be targeted to difficult to recruit areas such as scientists or
engineers, the Navy was unable to provide justification. The Com-
mittee is consequently deleting the. $400,000 and suggesting that
prior to requesting funds to increase this effort, the Navy should be
in a positio to provide a comprehensive plan as to the targeted
audiences, the anticipated improvement in recruiting which would
result, and so forth.
AUDIO-VISUAL TRANSFER
In July the Administration submitted a budget amendment to
the Congress which made a reduction of $45.9 million for audio-
visual and related activities. In presenting this amendment all of
the reduction was applied against the operation and maintenance
appropriation even though the procurement and military personnel
appropriations contained significant resources to support audio-
visual activities.
The Air Force and Navy have requested that the Committee
reallocate this reduction in order to make it more equitable and
feasible of accomplishment. The bill makes adjustments to the
audio-visual program which nets to zero.
WORLD WIDE COMMAND AND CONTROL SYSTEM-TRANSFER
The bill as reported by the Committee also reflects the transfer
of $16 million in WWMCCS (World Wide Military Command and
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Control System) from the operation and maintenance Air Force
appropriation to the O&M, Defense Agencies appropriation-$2.5
million; the RDT&E Defense Agencies Appropriation-$8.0 million;
and the Procurement, Defense Agencies appropriation-$5.5 mil-
lion. The above transfer is required for the Defense Communication
Agency to accomplish improvements to the WWMCCS 'information
system and the WWMCCS inter computer network.
OPERATION AND MAINTENANCE, ARMY
Appropriations, fiscal year 1981 ............................................................. ' $13,160,533,000
Estimate, fiscal year 1982 ........................................................................ 15,207,500,000
Recommended in the bill.......................................................................... 14,788,712,000
Change ........................................................................................................ -418,788,000
' In addition, $5,000,000 transferred from other accounts.
The Committee recommends an appropriation of $14,788,712,000
for Operation and Maintenance, Army. This amount is a decrease
of $418,788,000 from the budget estimate of $15,207,500,000. The
amount appropriated for fiscal year 1981 to date is $13,160,533,000.
The amount recommended herein for fiscal year 1982 is an in-
crease of $1,628,179,000 over the prior year. Pay raise costs are not
included in the fiscal year 1982 estimate. -
The Committee's recommended changes to the Army operation
and maintenance budget, as previously discussed or as discussed
elsewhere in the report, have been allocated as reflected in the
following table and the classified annex:
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INDIRECT HIRE FOREIGN NATIONAL EMPLOYEES
The Army budget for FY 1982 includes approximately
$4,573,000,000 to pay civilian personnel. During fiscal years 1981
and 1982 the Army proposes to add about 15,600 more foreign
national employees out of a total addition of 21,200. By far the
largest allocation of these spaces is to replace borrowed military
manpower in order to return a soldier back to his unit. Other
increases in Army civilian personnel strengths involve additions to
depot maintenance, procurement activities, supply and contract
administration. The netted increase to the Army's FY 1982 budget
resulting from the addition of these civilian workers is
approximately $285 million.
The bill as proposed by the Committee deletes 5,000 of the for-
eign national hires and directs that the Army seek ways to hire
U.S. citizens on a non-PCS basis to fill a large portion of the other
5,000 foreign nationals requested for FY 1982. A general provision
is proposed in the bill which would prohibit hiring foreign national
employees in overseas area when a U.S. citizen is available at the
overseas area. This provision is added to insure that the Army can
make maximum use of American citizens (largely dependents of
military personnel) in filling these positions.
POMCUS
The Committee reports of the last two years have expressed some
of the Committee's concerns with respect to the proposals to in-
crease the numbers of division sets of equipment prepositioned in
Europe as a part of the POMCUS program. (See report 96-1317, FY
1981 pages 167-170 and report 96-450, FY 1980 pages 229-231). The
POMCUS approach to reducing response times for U.S. forces to
Europe was first used in conjunction with the 1961 Berlin crisis.
The objective of the POMCUS program is to reduce U.S. deploy-
ment time in response to a Warsaw Pact attack against NATO's
central region. By prepositioning combat and support equipment,
the initial war time movement requirement is reduced since only
the personnel and their personal equipment need be moved by
aircraft.
In the Committee's opinion the proposals to expand the number
of division sets of equipment in storage in Europe from four to six
represents too much of a good thing. The United States has a very
limited number of active Army combat divisions. (Sixteen divisions,
three of which are only partially manned by active personnel).
Considering this nation's worldwide military requirements and the
limited numbers of Army forces available to meet this threat the
addition of more equipment in Europe further reduces already
limited capabilities to deploy elsewhere. The Army is fully aware of
this problem as reflected from the following quotations taken from
the Army white paper which was written to provide a framework
to structure the Army of the 1980's:
The threats to US interests beyond Europe likely to
emerge in the decades ahead will be extraordinarily di-
verse. The increased demand for limited resources world-
wide is likely to undergird confrontations. They include
not only the USSR, but heavily armed Soviet surrogates
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and independent, militarily sophisticated Third World na-
tions. Threats to US security outside of Europe in the
1980s will span an increased spectrum of conflict ranging
from terrorism to insurgency to highly intense convention-
al warfare. Such contingencies could occur in a variety of
militarily demanding environments, from deserts to moun-
tainous regions to tropical rain forests. The requirement
for flexibility is apparent. * * *
Our capabilities to project combat power worldwide must
be improved. We are approaching the upper limits of feasi-
bility in the POMCUS programmed for Europe. Further
improvement must come from improved strategic mobility
(particularly fast sealift) force structure changes, Host
Nation Support, and, where possible, lighter more capable
forces. The stratetgic deployability of the Army's rapid
deployment forces must make a quantum improvement.
There will be no major near term improvement in the
capability of airlift to move heavy forces. We must seek
alternatives such as deployment by fast moving Roll-On
Roll-Off ships, and light, mobile anti-armor capable forces
that can be deployed by air. * * *
Our current program for the rapid reinforcement of
NATO has focused on the early deployment of heavy
forces. However, we must continually examine the utility
of light, rapidly deployable divisions in Central Europe to
achieve a balance of heavy and light forces that will pro-
vide a better overall defense given the terrain variations
and urban sprawl that exists and is projected in much the
region. * * *
Given the limited sustainment capability of most poten-
tial adversaries, the critical phase of the conflict is likely
to take place within the first few weeks as enemy forces
attempt a quick, decisive victory. In most cases where a
sophisticated threat is present, there will be a need for
some anti-armor capability early. The limitations posed by
stratetic airlift argue in favor of further development of
fast sealift and some form of limited prepositioning. A
force element, incorporating new technologies in conjunc-
tion with light infantry, could enhance flexibility and
achieve the early presence necessary to preclude an unop-
posed threat victory and permit US forces to gain the
initiative. This concept would be enhanced by designing
follow on heavy forces that could begin immediate move-
ment on prepositioned Roll-On Roll-Off ships when the
decision to commit forces is made.
The Committee believes that the philosophy expressed in the
above paragraphs from the Army's own white paper is correct.
There is a clear need to retain flexibility with respect to the
deployment of remaining Army divisions, less those already for-
ward deployed or those for which equipment is pre-deployed in
Europe, through the increased use of rapid deployment ships. The
Committee fully supports the budget proposals to provide a near
term roll-on roll-off ship capability to our Armed Forces.
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124
A study by the Congressional Budget Office determined that if
an attack on Western Europe came without warning, or with little
warning, the POMCUS stocks might be vulnerable to destruction
by both ground and air attack because units from the United
States could not arrive soon enough to withdraw the equipment
from storage sites. On the other hand this study showed that if the
attack occurred following a lengthy Warsaw Pact buildup and the
U.S. reacted to that buildup, programs to increase the number of
divisions in POMCUS are less effective then spending equal sums
to modernize the Army more rapidly or to increase the overall size
of the Army.
The reserve forces policy board has also stated that increasing
the POMCUS goal from the original three full division sets to the
currently proposed six division sets means the withdrawal of equip-
ment from the Army guard and reserve or further delays in provid-
ing these reserve components with modern equipment compatible
with that in the active force. Continued drawdowns of reserve
component equipment hampers training and reduces morale in
addition to inhibiting the training: of additional units and replace-
ments in the early months of a national defense emergency. While
the Army has made a commitment not to further drawdown re-
serve component equipment for POMCUS purposes current policy
will have the effect of slowing down the flow of equipment into
reserve components and continue to degrade reserve component
readiness.
The fiscal year 1982 request includes $166.6 million for support
of the POMCUS program. Included in this amount is approximate-
ly $12.5 million for procurement of tool kits and load list items and
for preparation of vehicles to transfer to division set five. The bill
as reported by the Committee deletes this $12.5 million and con-
tains a general provision prohibiting the expenditure of funds for
division sets five and six. The Committee hopes that this action
will put to rest the issue of additional POMCUS sets for Europe
and cause the Department of Defense to move forward expeditious-
ly with programs to improve fast sealift.
The Committee realizes that international relations type argu-
ments will be raised against the Committee's position, including the
"old hat" of not living up to our agreements. The fact remains that
the United States has made a major new commitment to the
NORTHAG region in recent years. This major new commitment
was done without any changes to formal agreements and only the
implied consent of the Congress. Also, the division sites under
construction, principally division site five, are being built with
NATO infrastructure funding and thus the facility could be used
for the storage of war reserve equipment by any of the NATO
allies. Finally, since the decision to "POMCUS" more division sets
in Europe, the United States has incurred major new military
responsibilities in Southwest Asia as a result of the Soviet invasion
of Afghanistan and the revolution in Iran. These responsibilities
can not be met by Army divisions when their equipment is stored
in Europe.
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FORCE MODERNIZATION AND INTRODUCTION OF NEW WEAPON
SYSTEMS
The Army's operation and maintenance request for fiscal year
1982 contains a major increase for introducing new weapon sys-
tems into the Army force structure. The amount requested is $977
million compared with $421 million in FY 1981. The Committee
has considerable doubts as to the accuracy of some of the individu-
al increases proposed within this effort but has provided funding as
requested for all items except one. For example the request does
not reflect slowed deliveries of equipment from procurement. The
bill as reported deletes an increase of $5.9 million. This increase is
for studies and analysis (computer programming, etc.) at the
TRADOC Combat Development Activities Center. This increase
cannot be justified as an item of force modernization.
The Committee will also request the General Accounting Office
to undertake a detailed review of the Army's system for program-
ming, budgeting and accounting for these force modernization ef-
forts. The Army projects the cost of introducing new weapon sys-
tems to increase from the current annual rate of $421 million to
$2.6 billion during the next five years.
RUSTPROOFING VEHICLES IN HAWAII
The budget request includes $4.5 million in FY 1982 and $3.1
million in FY 1981 to repair rust damage to vehicles which have
been stored outside in Hawaii. As of the end of October 1981, no
contract had been awarded even though fiscal year 1981 funds
were available. The budget proposal estimates labor costs on this
contract at $29 an hour. The Committee's alternative would pro-
pose a more reasonable labor rate of $20 an hour. Even if the
contract agreement exceeds the labor cost estimates in the bill,
delays in contract awards make the reduction feasible.
EUROPEAN AMMUNITION PROGRAM
The Army budget request included an increase of $26.9 million
related to the on-going ammunition build-up in Europe. Transpor-
tation funds are not included in this portion of the increase. The
increase was to finance a level of effort in FY 1982 which would be
about 35,000 tons greater than that accomplished in FY 1981.
There has been a continuing problem in overcoming the storage
space shortages caused by safety considerations, environmental
problems and delays in construction. The Army's own figures indi-
cate that it will not have room ready on time to store the ammuni-
tion. The Committee recommends a reduction of $17.1 million to
more closely reflect the storage capacities.
ARMY NATO CONTRIBUTION
The Army has budgeted an increase of $5.9 million in fiscal year
1982 for anticipated increases required in the U.S. contribution to
the NATO military budget. The Army has revised the estimate of
its share of the NATO contribution and a reduction of $3.4 million
is recommended.
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 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
NEW CUMBERLAND ARMY DEPOT
The Committee has not provided funding to transfer personnel
from the helicopter maintenance program at the New Cumberland
Army Depot. The Committee recommends that all such mainte-
nance activity be continued at New Cumberland through fiscal
year 1982.
Appropriations, fiscal year 1981 ............................................................. $34,000,000 1'
Estimate, fiscal year 1982 ........................................................................ 211,300,000
Recommended in the bill .... :.................................................................... 163,300,000
Change ........................................................................................................ -48,000,000
The change in the estimate for the Army stock fund is explained
in the Foreign Military sales section of the report.
OPERATION AND MAINTENANCE, NAVY
Appropriations, fiscal year 1981 ............................................................. 1 $17,728,799,000
Estimate, fiscal year 1982 ........................................................................ 19,611,170,000
Recommended in the bill ......................................................................... 19,258,970,000
Change ........................................................................................................ -352,200,000
' In addition, $135,500,000 transferred from other accounts.
The Committee recommends an appropriation of $19,258,970,000
for Operation and Maintenance, Navy. This amount is a decrease
of $352,200,000 from the budget estimate of $19,611,170,000. The
amount appropriated for fiscal year 1981 to date is $17,728,799,000.
The amount recommended herein for fiscal year 1982 is an in-
crease of $1,530,171,000 over the prior year. Pay raise costs are not
included in the fiscal year 1982 estimate.
The Committee's recommended changes to the Navy operation
and maintenance budget, as previously discussed or as discussed
elsewhere in the report have been allocated is reflected in the
following table and the classified annex:
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Approved For Release 2007/03/03: CIA-RDP89MOO61OR000100040004-8
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
SHIP OPERATIONS
The budget for ship operations includes an addition of $100.0
million to partially offset the reduction of $173.0 million proposed
in the September amendment. The addition was made because the
Committee has doubts if a reduction of this size can realistically be
made in view of the operating tempo in the Persian Gulf area. In
addition testimony by the Chief of Naval Operations indicated that
the Navy would probably have to steam additional hours in re-
sponse to direction from higher authority.
The bill as adjusted by the Committee also reflects a reduction of
about $38.0 million for Navy Strategic Force Operations. This re-
duction is made as a result of continued delays in the operational
deployment of the TRIDENT submarine and failure to adequately
adjust the budget estimates to reflect the phase-out of the ten
Polaris submarines during the past two years.
SCOPE OF EFFORT CHANGES ON SHIP OVERHAULS
As Naval ships became more complex and the average age of
those ships retained in the fleet increased, so did the effort of
estimating a definitive overhaul work package. Frequently, post
induction open and inspection procedures disclose repair require-
ments not previously allowed for. This results in either a reduction
in the original work package for a given ship or a program reduc-
tion elsewhere to accommodate for the increased scope of effort.
Consequently, some years ago the Navy commenced budgeting for a
funding wedge in the subsequent year for scope of effort changes
relative to the initial ship overhaul repair package.
The Committee also attempted to address this problem through
the use of a two year appropriation since multiyear funding of ship
overhauls from an annual appropriation is not proper. Navy indi-
cated that a two year availability which "fenced" ship overhaul
would be unnecessarily restrictive, and the proposal was dropped in
conference.
The Committee is now recommending new language in the fiscal
year 1982 Bill, Section 708 (n) and (o), which will allow Navy to
budget for scope of effort changes in the same fiscal year in which
the ship is inducted. The Committee believes this procedure will
alleviate the problem Navy has encountered in maintaining ac-
countability of fiscal year funds used to finance increased scope of
effort changes. These funds will remain unobligated at the end of
the fiscal year and remain available to finance scope of effort
changes. It should be noted that the language is restricted to depot
level maintenance related work on ships. The Office of the Secre-
tary of Defense and the Military Departments should take what-
ever action deemed necessary to assure availability of resources at
end year. The Committee proposes an increase of $58 million in
fiscal year 1982 to cover change order costs related to ship over-
hauls based on an average of such costs identified for the last three
fiscal years.
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
Such costs for other depot maintenance programs should be cov-
ered from unobligated balances available at end year from within
the appropriation which funded the initial repair effort.
Language has also been included which would allow the use of
current year appropriations to cover unusual cost overruns, with
prior congressional approval, associated with depot repair work
inducted in the previous fiscal year.
ADVANCED FUNDING FOR SHIP OVERHAULS
The ship overhaul program includes an estimate of $144.6 mil-
lion in fiscal year 1982 for work to be accomplished prior to actual
induction of the ship into the shipyard for repair and overhaul in
fiscal year 1983. The use of advanced funding has become more and
more prominent in the ship overhaul program as the complexity
and duration of overhauls has increased. Justification of these
funds is on a total basis computed on a factor per ship (there is no
allocation by ship in the justification material). Advanced funding
is provided on the premise that it is necessary to accomplish pre-
induction planning and design effort and long lead time material
procurement in order to minimized actual time the ship is retained
in the shipyard in performance of the overhaul. The Committee
agrees with the concept. However, numerous audit reports have
indicated an impropriety in the application of advanced planning
funds with funds given to the shipyard to accomplish the overhaul
effort. This situation occurs when the advance planning effort is
conducted concurrent with accomplishment of the overhaul and
extends over two fiscal years. Last year the Committee attempted
to address this problem by making ship maintenance funds availa-
ble for two years. This approach was rejected in conference with
the Senate.
The Committee has discussed with the Navy alternative means
of financing; namely, the possibility of using either the industrial
fund or the stock fund to initially purchase long lead time materi-
al. Navy response has repeatedly been in support of maintaining
the current method of funding. However, use of the stock fund has
a two fold benefit. First it moves towards single year financing of
the repair effort and second, by allocating stock fund resources to
the shipyard, material and supplies are held in the stock fund until
issued. Having the stock fund hold the inventory allows for redis-
tribution of material assets, an issue which has also been addressed
in numerous audit reports. The Philadelphia shipyard has been
procuring material via the stock fund for several years, thus there
is no reason to believe that the other shipyards could not operate
in a similar manner.
Reimbursement to the stock fund would be made from funds
made available to the shipyard upon induction of the ship for
overhaul. Advanced funds would then provide for only those efforts
which are either labor intensive or under contract and more con-
trollable. Subsequent to induction of the ship into the shipyard, all
costs including those related to continuing advance planning ef-
forts, will be charged to the project order financing the overhaul.
Navy should take action at that time to lapse all funds initially
allocated for advanced planning efforts which have not been used.
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 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
A reduction of $82.4 million has been made to the request of
$144.6 million for advanced funding based on direction to Navy to
finance the procurement of long lead time material by using the
stock fund. Payment to the stock fund should be included in the
Navy's cost estimate by ship in the fiscal year of induction; identifi-
cation of such amounts included in the overall cost per ship should
be maintained.
"BARTENDER" FOR DIEGO GARCIA
The bill as reported by the Committee deletes $5.0 million of the
$9.5 million contained in the bill for the "Bartender/MARBARGE"
floating support facility in Diego Garcia.
This project was conceived and developed during the first quarter
of 1981. The concept was to provide a self sustaining floating base
maintenance/ repair facility to support the ships of the near term
prepositioned force. This large floating platform was envisioned to
encompass and consolidate the maintenance, administration, and
recreational requirements under one functional area of operation.
As the program began to take shape cost estimates rose sharply.
Reducing the scope of the concept became necessary due to finan-
cial and budgetary constraints. It is now clear that the Navy will
have difficulty in getting under way even a much smaller program.
The Navy has not identified the additional support surface require-
ments for the near term prepositioning fleet and estimates that
bringing this armada of land craft, lighterage, tugs and crew boats
will cost about $2.0 million in FY 1982. The bill includes funds for
this purpose.
TARBATNESS
During consideration of fiscal year 1981 supplemental the Con-
gress provided funds for the Navy to lease the RFA TARBATNESS
and LYNESS from the British Navy. At that time, the Appropri-
ations Committee contended that while there was some urgent
need for the early lease of the LYNESS, the TARBATNESS should
not be leased but should be purchased in FY 1982 because there
was no urgent requirement for its immediate use. The Navy saw fit
to argue otherwise and contended that it needed to place the
TARBATNESS into service immediately. The Committee has since
learned that the Navy intends to place the ship in a ship yard for
modifications in lieu of using the vessel to support the Pacific
Fleet. Accordingly the bill deletes $5.0 million programmed for
operation of this ship.
BERTHING BARGES
In view of the General Accounting Office findings transmitted to
the Committee via letter on June 23, 1981, covering "Navy's berth-
ing facilities for ships undergoing overhaul" has recommended de-
letion of ten berthing barge overhauls from the bill. This deletion
is also in agreement with the Committee's policy to reduce to the
absolute minimum the numbers of personnel assigned to ships
undergoing overhaul. The bill as reported by the committee in-
cludes funds to build four new berthing barges.
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
NAVY AIR OPERATIONS
The bill as reported by the Committee contains a general in-
crease of $25.0 million to partially offset the reductions made in
the September amendment. This increase is partially offset by
reductions of $9.0 million allocated against the S-3A flying hour
budget. This aircraft is experiencing an unbelievably low fully-
mission capable rate and the partially-mission capable rate is not
much better. The Navy contends that the budgeted flying hour
program for this aircraft is well within the capability of the fleet.
This may be correct but it does not alter the fact that much of the
avionics equipment is not working at any given point in time and
therefore any training received is degraded. The bill as proposed by
the Committee provides for a flying rate of approximately 450
hours per year per airplane compared to the request of 553 hours
per year.
TOMAHAWK MISSILE, TECHNICAL SERVICE SUPPORT
The Navy O&M budget contains about $3.4 million for increased
technical support to. the Tomahawk submarine launch cruise mis-
sile program as part of an overall increase of $6.4 million. This
program still has research and development funds and procure-
ment funds available. General practice has in the past been to
continue technical service support and engineering support in the
procurement and RDT&E appropriations until all production has
been completed.
COMMANDER IN CHIEF, U.S. NAVAL FORCES, EUROPE
The Commander-in-Chief, U.S. Naval Forces, Europe (CINCUS-
NAVEUR) has three command roles: (1) under the joint European
Command, he has operational control over forces; namely, the
Sixth Fleet in the Mediterranean and the Mideast Force in the
Persian Gulf (the latter operating under the Pacific Command
since November 1979 where it may remain for some while); (2)
under Commander, Atlantic Fleet, he serves a subordinate role as
Commander, Eastern Atlantic (COMEASTLANT), in which he
operationally controls and logistically supports units operating in
northern European waters; and (3) under the Chief of Naval Oper-
ations, he administratively supports and supervises Navy shore
activities in Europe through a number of subordinate commands.
CINCUSNAVEUR has no role in controlling forces under NATO in
crisis or war, because the Sixth Fleet forces chop to NATO com-
mand headed by a British Admiral.
The Committee Surveys and Investigations staff conducted a de-
tailed review of the CINCUSNAVEUR organization this spring. A
copy of the lengthy classified report is available for reading by
members of Congress, who desire more information on the role of
this headquarters. In a number of alleged Navy-wide personnel
decrements since 1973, particularly applicable to headquarters
management staffs, cuts purportedly were taken in CINCUSNA-
VEUR staffing; however, documents obtained by the Committee
disclose a practice of "stashing" personnel in other commands and
units and ceasing the counting of them against headquarters staff,
thus not actually taking the alleged cuts. A system of allocating
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
personnel under accounting codes unrelated to the actual functions
of the personnel but thereby ambiguously spreading the manpower
authorizations among a variety of designations serves to avoid
revealing the authorizations as actually being in support of CIN-
CUSNAVEUR management. Of 847 personnel authorizations for
FY 1981 in the building housing CINCUSNAVEUR, only 264 are
counted against the headquarters management ceiling.
A new Fleet Command Center is an example of the fragmenta-
tion of personnel and empire building that results. A center for
computerized manipulation and display of data to support the com-
mand and control responsibility of CINCUSNAVEUR in exercises
or an actual crisis already exists (and it has been one of the
separate commands in which personnel authorizations have been
stashed); but a separate new control center is planned for more
elaborate manipulation and display of data so that both centers
will be engaged in overlapping functions (one for "control" and the
other for "command"). The new Fleet Command Center has 74
positions authorized for FY 1982 though the necessary equipment
and construction for them to perform planned duties will not be
available for several years-nine newly graduated ensigns already
have arrived and are being assigned among various sections to
learn about Navy field operations generally. Aside from the prema-
ture transfer in of unneeded manpower, the Investigative Staff has
strong misgivings in funding the new center at all-in the absence
of a command/control role for CINCUSNAVEUR over NATO
forces in crisis. Construction of this new center should be terminat-
ed.
In reviewing individual functions against workloads and man-
ning levels, the Investigative Staff identified 127 positions for FY
1982 (including the aforementioned 74 in the Fleet Command
Center) susceptible of elimination. Considering areas in which time
constraints did not permit indepth job audits and considering the
prior history of concealing alleged cuts not really taken, the Com-
mittee recommends an across-the-board reduction of 150 to 200
positions in the FY 1982 request, with the Navy providing satisfac-
tory documentation that ordered cuts are, in fact, taken. Annual
savings thereby derived would be $2.7 to $3.5 million in salary costs
and at least a like amount in support costs involved in overseas
assignments.
Examination of possible alternative command arrangements
under which functions of CINCUSNAVEUR, still could be per-
formed, disclosed no alternative that would be militarily or eco-
nomically effective. Any attempt to combine CINCUSNAVEUR
with other existing commands, in Europe or at Norfolk, Virginia,
would result in augmented personnel to continue the COMEAST-
LANT functions sited in London, which would more than offset
personnel savings in such combination. Other military and econom-
ic disadvantages weigh against an alternative structure, and no
worthwhile advantage really would be realized by giving a NATO
role to CINCUSNAVEUR under existing command arrangements.
Thus the alternatives, to the extent they exist, are either a sub-
stantial reduction in the bloated manning levels for this headquar-
ters with a view towards further reductions in later years following
a review of this slimmed down organization or alternatives for the
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
total abolishment of CINCUSNAVEUR. The later course of action
is not recommended at this time, but could be pursued if the Navy
fails to take corrective action.
CHIEF OF NAVAL MATERIAL
The request to operate the Chief of Navy Material Headquarters
contains real program growth of $1.5 million. The Committee sees
no reason to enlarge the size of this staff when there is consider-
able disagreement over the need for a Material Headquarters to
oversee the various Navy Systems Commands.
NAVAL ARCTIC RESEARCH LABORATORY
The Congress directed closure of this research laboratory in 1978.
The Navy is still in the process of closing the facility. The fiscal
year 1982 budget includes $2.0 million for operations and $4.3 for
one-time closure costs. It now appears that the Navy will not be
able to accomplish the closure in FY 1982. Therefore, $4.3 has been
deleted from the bill.
There are also indications that better cooperation between the
U.S. Geological Survey which will use some of the buildings and
the Navy could result in operating cost reductions.
CARRIER ACTIVATION STUDY
After the Congress deleted all funds for the activation of the
aircraft carrier Oriskany, the Navy undertook to reprogram funds,
without notifying the Congress, to study carrier reactivations.
Since this matter was clearly a matter of special congressional
interest, a reprogramming was required. Due to the failure to
follow the agreed upon procedures, one reduction of $5 million has
been made to NAVSEA's technical support program which served
as the source of funds.
The Navy Air Systems Command using its Naval Air Logistic
Center has over the years developed an efficient and cost effective
method for contracting aircraft maintenance in support of training
operations. The Naval Education and Training Command now
wants to take over these contracts and use a different contract
procedure which will. place a higher salary cost and overhead
burden on the contractors and increase government labor costs as
well.
Recent studies and the award of the TH-57 helicopter mainte-
nance contract indicate that the change from the existing contrac-
tual concepts to the Chief of Naval Air Training philosophy would
increase contract logistics cost by as much as 40 percent. The
contract for TH-57 maintenance was awarded at $5.2 million-
about $1.2 million less than the budget. In addition, the Navy now
plans to continue military personnel support of the program until
the end of the year. Had the Navy not changed the practice of how
it budgets for such support, the actual cost would have been about
$2.5 million below the budgeted estimates based on alternative
contract proposals. The Committee directs the Navy to return man-
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
agement of these contracts to the Naval Air Systems Command's
Air Logistics Center unless valid reasons can be found for using the
new approach.
LEASESAT
The LEASESAT satellite system is a communications satellite
system for the Navy. It is scheduled to be launched on the shuttle.
The original contract between the Navy and the manufacturer of
the satellite called for payments to begin after the successful oper-
ation of the initial LEASESAT satellite. Due to slippage of the
shuttle, the Committee has no objection to the modification of the
contract, as outlined in the "AIDE MEMOIRE" on this program.
The Committee recommends an increase of $59,000,000 in Oper-
ations and Maintenance, Navy for the LEASESAT program.
NAVAL DATA AUTOMATION COMMAND AND REGIONAL
DATA COMMANDS
In last year's report (96-1317, pages 156-157) the Committee
expressed strong reservations that the Naval Data Automation
Command (NAVDAC) was fulfilling the responsibilities for which it
was established in 1977. As a result, the Committee's Surveys and
Investigations Staff was directed to look into various aspects of
NAVDAC including its effectiveness in managing not only its own
resources (including its regional data processing centers), but the
overall Navy Automatic Data Processing (ADP) program as well.
The Investigative Staff found that NAVDAC has been relatively
ineffectual in carrying out its mission responsibilities from a Navy-
wide standpoint. Internally, i.e., NAVDAC and its subordinate
Navy Regional Data Processing Centers (NARDAC's), there has
been some success in providing ADP service to "customers" in the
geographic areas served by the NARDAC's; however, many users
complained regarding the level and quality of the service.
It appears that. most of the problems in Navy ADP at this time
are beyond NAVDAC's ability to correct. The principal underlying
reason why Navy ADP is relatively uncontrolled is that it is not a
major concern of top level Navy management. Even though
NAVDAC is a command under the Chief of Naval Operations
(CNO), it is too low in the hierarchy. ADP is perceived to be
unimportant in the overall scheme of things to merit the interest
and concern of several CNO staff echelons. As a result, there is no
cohesiveness in the management of ADP. Each Navy organization
operates fairly independently in accordance with the Navy's policy
of decentralized program execution. NAVDAC is unable to gain
control of its Navy-wide mission responsibilities nor is it able to
bring about those actions necessary for it to be completely success-
ful in the ADP service center business.
NAVDAC represents the results of a reorganization effort in-
tended to correct numerous long standing deficiencies in Navy
ADP management. A 1976 internal Navy study and reorganization
plan culminated in the establishment of NAVDAC and six NAR-
DAC's located in San Francisco, San Diego, Pensacola, Jackson-
ville, Norfolk, and Washington, D.C. It was intended that the estab-
lishment of NAVDAC would improve the Navy's ADP posture by
 Approved For. Release 2007/03/03: CIA-RDP89M0061 OR000100040004-8
correcting the problems and shortcomings that were known to exist
throughout the Navy:
Unfortunately, the Committee's Investigative Staff found that
NAVDAC has not fulfilled the goals for which it was established.
Some of the problems that were mentioned frequently in earlier
studies still exist today, with NAVDAC having had little influence
toward their correction. There are several reasons why NAVDAC
has been relatively ineffectual and somewhat controversial to date.
ADP Is NOT A MAJOR CONCERN OF THE Top LEVEL NAVY
MANAGEMENT
NAVDAC has been handicapped by its location in the Navy
organizational hierarchy. Although it is in the CNO chain in com-
mand, it is "buried" at too low a~ level to be effective. Commanded
by a junior two-star admiral who is several flag rank positions
below even the Vice Chief of Naval Operations (VCNO), there is
practically no opportunity for major problems or positive initiatives
to surface at a level where senior level visibility, acceptance, and
support is necessary. As a result, commands with more senior level
support (three- and four-star flag rank) are able to influence the
actions of NAVDAC, irrespective of the merits of the issue. Also, it
was noted that NAVDAC has made practically no inroads on mold-
ing the direction of the Navy as a whole in terms of Navy-wide
standards, procedures, planning, etc. The major claimants, e.g.,
Naval Materiel Command's (NAVMAT's) systems commands, bu-
reaus, etc., were each observed to be abiding by their own policies
and procedures which had been established long before the advent
of NAVDAC. In essence there continues to be little integration of
effort on a Navy-wide ' basis. Even if initiatives are generated in
NAVDAC (which have been minimal), it is doubtful that they
would be embraced and implemented by other Navy organizations.
The low level of NAVDAC in the Navy organization is more than
countered by the higher flag rank commands, particularly in
NAVMAT.
The Committee believes organizational relocation is the key to
improvement of Navy ADP. Unless ADP is elevated in the com-
mand hierarchy, and in terms of its importance in the Navy, there
is little hope for success in further improvement endeavors.
BETTER USE OF CENTRAL DESIGN ACTIVITIES-POTENTIAL FOR
IMPROVED MANAGEMENT AND RESOURCE SAVINGS
One of the mission objectives established for NAVDAC was to
design, develop, implement and maintain standard, multi-activity
and fleet non-tactical data systems, and to provide advice on the
development of standard systems for Navy-wide use.
The Investigative Staff found serious shortcomings in the Navy
meeting the standardization objectives. Although clearly one of the
goals which NAVDAC was to fulfill, after over four years the
results are almost nonexistent. Although NAVDAC has recently
begun to develop some "standard" systems at NARDAC San Diego,
it is believed that there are insufficient resources and top level
management attention devoted to the task. Also, it is doubtful that
the systems would ever be truly implemented Navy-wide because
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
there is no official at the "top" who is likely to "champion" the
standardization effort against expected resistance from those out-
side the NAVDAC community.
Standardization of application systems software would conserve
many man-years of effort throughout the Navy. Although the
major claimants through their Central Design activities (CDA's)
have standardized systems within their functional areas, e.g., Uni-
form Automated Data Processing Systems for Stock Points (supply),
there has been practically no standardization of functional systems
across command lines, e.g., personnel or accounting systems. Some
50 functional applications have been identified as having the poten-
tial for systems development where the system could be imple-
mented at Naval bases and stations throughout the Navy. Yet, at
this time, there is no CDA established for the development of these
"common" Navy systems. As a result, many systems which could
be common to many Naval activities are being replicated through-
out the Navy and wasting ADP personnel resources in the process.
If one CDA were responsible for development and maintenance of
systems which are implementable across Navy lines, many man-
years of effort could be eliminated at Naval activities throughout
the world. This is a most fruitful area for improvement and one in
which NAVDAC has not achieved measurable success.
Another problem regarding standard systems relates to those
.developed by NAVMAT's systems command CDA's for operation at
the NARDAC's, or in some cases, at their own data processing
installations. In this instance, systems which are supposedly stand-
ard for all activities of the command or functional area (e.g.,
supply) actually require the development of many "local unique"
programs (programs used only at one installation) to meet local
needs. A survey taken by NARDAC Jacksonville indicated that
over 200 local unique systems had been developed and are being
maintained by the NARDAC's alone, over and above the systems
developed by the Naval Air Systems Command (NAVAIR) and
Naval Supply Systems Command's (NAVSUP) CDA's for their
users. The Investigative Staff estimated that well over 50 percent
of the NARDAC's systems and programming efforts are devoted to
programming and maintenance of local unique systems to supple-
ment NAVAIR and NAVSUP systems.
The Committee believes that to preclude this waste of manpower
there needs to be greater control exercised over the development of
local unique systems, and secondly, a better understanding by the
command CDA's of local (activity level) needs to preclude the need
for the development of most local uniques. Until the Navy is able
to bring these two factors under control, particularly within
} NAVSUP and NAVAIR, the NARDAC's will be saddled with a
workload of questionable value, while consuming personnel re-
sources needed in other areas.
AUTOMATIC DATA PROCESSING SELECTION OFFICE (ADPSO)-A
CHANGE Is NEEDED
ADPSO, as a subordinate office of NAVDAC, is responsible for
the acquisition of computer hardware, software and services.
ADPSO predates NAVDAC by some 10 years, although as a staff
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function of the Navy Secretariat and later CNO, its responsibilities
were limited to hardware acquisitions.
There has been considerable controversy regarding ADPSO and
its effectiveness, personnel capabilities, organizational location, etc.
The Investigative Staff found morale to be poor and considerable
dissension in the organization. ADPSO personnel feel that there is
inordinate pressure from NAVDAC to bring about actions which
ADPSO personnel believe are counter to their best judgment. Es-
sentially, they feel their prerogative of making objective decisions
has been preempted. Also, contributing to low morale is the inter-
nal organization of ADPSO with its two major functions, procure-
ment and technical (ADP). Both groups feel their function is pre-
dominate in the acquisition process. Consequently, little "meeting
of the minds" exists, and, therefore, the ability to work in harmony
on a given task is impeded.
A second major problem is that communication between ADPSO,
and elements of NAVDAC headquarters is inadequate to allow
both organizations to do the best job in behalf of the Navy organi-
zations which require their services.
ADPSO is also performing work that might be more appropriate-
ly done elsewhere. Contract administration consumes an inordinate
amount. of personnel resources in an organization whose principal
reason for being is ADP acquistion. At one point during the investi-
gation, there were 164 contracts valued at $833 million being ad-
ministered, consuming about 80 percent of the procurement person-
nel resources.
The Committee believes a hard look needs to be taken at
ADPSO, how it is organized, to whom it should report, etc. It is
believed that a more productive arrangement would be to merge
ADPSO with NAVDAC headquarters Code 10 functions of review
and approval of claimant ADPSO requests. The Investigative Staff
suggested that internally, the organization might best be struc-
tured on a team basis whereby each team becomes totally knowl-
edgeable of a major claimant's functions and needs and therefore
able to reduce the time necessary for review and acquisition.
NARDAC's-AN IMPERFECT SOLUTION
The NARDAC's represent a concept that may have been over-
taken by time and technology, i.e, the centralization of data proc-
essing into large service center organizations. Although this con-
cept was an acceptable approach some 10 years ago, some modifica-
tion to the basic idea as exemplified by the present NARDAC's
may be desirable.
NAVDAC as the parent command has expended a great deal of
effort on the NARDAC's. This is undoubtedly a part of the reason
that NAVDAC has had relatively little effect on the Navy as a
whole. It was estimated that over 80 percent of NAVDAC's Code
30, 40, and 50 effort is geared to coordination and management of
the NARDAC's.
The Investigative Staff found considerable dissatisfaction with
the service provided to its customers by the NARDAC's although
some said improvements had occurred over time. The service prob-
lems and the causes cited were numerous, including hardware
failure and inadequate capacity for the workload. Other problems
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such as inadequate management attention to user problems reflect-
ed poorly on the NARDAC's.
The general feeling of dissatisfaction on the part of NARDAC
customers had led to some aberration of the NARDAC concept
including the purchase of service elsewhere, and the establishment,
by NAVAIR, of small computer facilities within its depot mainte-
nance facilities which do some information processing over and
above the service already provided by the NARDAC's.
It is believed that an improvement to the NARDAC situation can
be brought out through one of several initiatives which include
reorienting the NARDAC's as service centers for processing stand-
ard systems. Another would be to return the NARDAC's to the
major user of ADP services where each is currently located. Suffice
it to say, that there are a number of issues to be addressed regard-
ing the NARDAC's which could range anywhere from maintaining
the status quo (temporarily at least) to essentially doing away with
them as currently structured. In actuality, a more appropriate
solution will probably represent a number of practical accommoda-
tions. One accommodation would be to permit major users to have
a single, small or medium scale computer devoted to its processing
needs regardless of whether it is user or NARDAC operated. This
would preclude chaotic disruptions when large multiple user com-
puters are phased out.
The Naval Audit Service in a Special Review numbered S30628
dated May 23, 1980, has also recommended that NAVDAC reevalu-
ate reliance on multiprogramming and large centralized computer
systems, and where appropriate, decentralize work to central site
4 or customer-operated minicomputers. A similar finding is contained
in a regular audit (A31059, dated Feburary 26, 1981) of NAVDAC
operations.
DECENTRALIZED CENTRAL DESIGN ACTIVITIES-A CONTINUING
NEED
An important question in Navy ADP at this time is the role of
central design activities-should they continue to exist with their
present organizational and functional relationships; or shoud they
be subordinate to a single organization such as NAVDAC. At pres-
ent each CDA provides the systems and programming support for
its parent (functional) command, e.g., Naval Sea Systems Com-
mand.
The Investigative Staff concluded that command CDA's such as
the Chief of Naval Education and Training's (CNET) CDA, the
Management Information and Instructional Systems Activity
(MIISA), and NAVSUP's Fleet Material Support Office (FMSO)
should remain under the control of the functional Command. There
appears to be no substantive reason for doing otherwise, and more
importantly, with the CDA under the parent command, responsive-
ness to the function being served is more likely to be achieved if
for no other reason than it is directly in the user's chain of com-
mand.
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SUMMARY AND RECOMMENDATIONS, NAVDAC/NARDAC
In view of the fact that NAVDAC was established to correct a
number of long standing deficiencies in Navy ADP and has been
unable to do so, more decisive action appears necessary.
The fact that the Surveys and Investigations Staff found conclu-
sively that NAVDAC has been unable to gain control of, and
effectively direct and manage ADP in the Navy after more than
four years indicates that the Navy must alter its views on how it
will manage this resource which relates so strongly to the efficient
management and control of other Navy assets and functions.
The Committee believes the recommendations in the April 1981
report of its Surveys and Investigations Staff entitled, "Effective-
ness and Operations of the Naval Data Automation Command" to
be reasonable and well-founded and that they merit most serious
consideration as a means of improving the Navy ADP program.
This is particularly true regarding the relocation of various func-
tions of ADP management at a higher level within CNO as this
appears to be the keystone to the acceptance of other actions
throughout the Navy.
The Committee, therefore, directs the Secretary of the Navy to
evaluate the recommendations contained in the April 1981 report,
and to report back to the Committee by March 30, 1982, on its
action to implement the policies and recommendations contained
therein, or, as to the reasons why the recommended action has not
been taken. Under the circumstances, the Committee sees no need
to increase the level of funding provided NAVDAC/NARDAC's in
FY 1982, and recommends that the $9.1 million budgeted for "pro-
gram growth" be deleted. The Committee also recommends, pend-
ing further justification from the Navy, that the existing customer
payback or charge-back system be retained. This will require that
$6.5 million currently budgeted in the NARDAC "line" be reallo-
cated to the user organization. Finally, the Committee directs that
40 to 50 positions assigned to NAVDAC code 30, 40, and 50 be
financed via the NARDAC charge-back system since their duties
are primarily related to NARDAC operation and use of a charge-
back procedure as required by OMB Circular A-121.
WASHINGTON NAVY YARD
Over the past several years the Appropriations Committee (in-
cluding both the Military Construction and Defense Subcommit-
has been concerned over the growing amount of leased space
tees)
used by the Navy in the greater Washington, D.C. area. One option
which has been proposed to reduce the requirement for leasing is
to convert vacant and unused space at the Washington Navy Yard.
The Navy has testified that over 720,000 square feet of existing
industrial type facilities in the Navy Yard could be rennovated and
used as administrative space. The Committee encourages this ap-
proach especially in view of the exorbitant reimbursements re-
quired by the General Services Administration.
NAVY HEADQUARTERS ADMINISTRATIVE SYSTEMS
The Secretary of the Navy staff support offices have requested
an increase of $600,000 for what sounds like an overly ambitious
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program to tie together all Navy headquarters administrative sys-
tems into one large interactive system. While the Committee fully
supports the increase in productivity that is possible with advances
in word processing, the Navy request states the new system will be
used for appointment scheduling, "to do" lists, calendars, directo-
ries, calculators, etc. The Navy has also suggested that this in-
crease for state of the art administrative systems is necessary
because "the Navy's office workers, principals, and their support
staffs have become paper bound to the point that the movement of
paper has set the pace for decision and policy making." The Com-
mittee is deleting the full $600,000 requested and suggests that the
Navy focus its efforts on reducing the paper work required to
conduct its business.
NAVY OVEREATERS ANONYMOUS
The Navy is requesting an increase of $300,000 to support what
is called Overeaters Anonymous. This additional funding is for
conferences, - counselors, vans to transport personnel to meetings,
pamphlets, media material, etc. In response to the Committee's
inquiry the Navy stated that the current program has resulted in
significant variation from one commanding officer to another as to
the time and attention devoted to physical conditioning and fitness.
As a result of this lack of uniformity the Navy has budgeted a total
of $500,000 in fiscal year 1982 for this Overeaters Anonymous
effort where weight loss will be done through "positive control" of
the individuals at all times. The Committee questions the wisdom
of spending half a million dollars in fiscal year 1982 on this effort
and suggests the Navy concentrate instead on proper command
emphasis of physical conditioning and fitness. A reduction of
$500,000 is therefore included in the budget request.
CIVILIAN "SCARCE SKILLS" SURVEY
The Navy is requesting $100,000 to collect information on the
benefits offered by the private sector for "scarce skill" civilian
employees. The Committee believes that there is no requirement
for this funding since such information is available from the De-
partment of Labor and the Office of Personnel Management. Fur-
thermore, the Navy is not in a position to offer "improved benefits
and changes to the leave system" as stated because civil servants
in DoD are necessarily bound by the same rules and regulations
that apply government wide to civil service. The Committee is
therefore deleting the entire $100,000.
NAVY SEVERANCE PAY
Last year the justification material provided by the Navy indicat-
ed that a one time increase in fiscal year 1981 of $1.5 million was
required for severance pay. The fiscal year 1982 request reflects no
such offsetting reduction. Therefore, the Committee is recommend-
ing deletion of the entire $1.5 million.
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MANPOWER STANDARDS TRAVEL AND MOVE
The Navy Manpower and Material Analysis Center (NAVM-
MAC) is charged with the responsibility of developing shore Navy
manpower standards. Although the Committee continues to urge
the Navy to expedite this process, the current budget request ap-
pears to be overstated. For example, the request reflects an aver- It
age cost for travel and per diem of $2,000 per employee per week
for travel outside the continental United States and $420 per em-
ployee per week inside the continental United States. The Navy
has also requested an increase of $1 million to move the entire .0
NAVMMAC to new quarters because of an increase of only 22
personnel. The Committee believes that this move is unnecessary
since the 22 personnel are temporary only for the period of devel-
oping the additional standards. A total reduction is therefore rec-
ommended of $1.5 million.
Appropriations, fiscal year 1981 ........................................................................ $309,000
Estimate, fiscal year 1982 ................................................................................... 17,435,000
Recommended in the bill .................................................................................... 5,435,000
Change .................................................................................................................... -12,000,000
The change in the estimate for the Navy stock fund is explained
in the Foreign Military Sales sections of the report.
OPERATION AND MAINTENANCE, MARINE CORPS
Appropriations, fiscal year 1981 ............................................................. 1$1,072,206,000
Estimate, fiscal year 1982 ........................................................................ 1,176,940,000
Recommended in the bill ......................................................................... 1,169,240,000
Change ........................................................................................................ -7,700,000
'In addition, $9,700,000 transferred from other accounts.
The Committee recommends an appropriation of $1,169,240,000
for Operation and Maintenance, Marine Corps. This amount is a
decrease of $7,700,000 from the budget estimate of $1,176,940,000.
The amount appropriated for fiscal year 1981 to date is
$1,072,206,000. The amount recommended herein for fiscal year
1982 is an increase of $97,034,000 over the prior year. Pay raise
costs are not included in the fiscal year 1982 estimate.
The Committee's recommended changes to the Marine Corps
operation and maintenance budget, as previously discussed or as
discussed elsewhere in the report, have been allocated as reflected
in the following table:
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AIR NATIONAL GUARD, SUMMARY
The bill as reported by the Committee includes increases of
$500,000 for operation of aircraft and $10.0 million for operating
spares for the Air National Guard. These increases are offset by
decreases of $6.0 million for logistics support activities, $32.0 mil-
lion related to the fuel price adjustment. Other reductions include:
$350,000 for audio visual activities, $2.7 million because projects
which were at one time deferred in 1981 to finance the pay raise
did not have to be deferred, $1.5 million related to OSHA/EPA
requirements, $3.2 million primarily related to the takeover of
Rickenbacher Air Force Base, and a reduction of $3.4 million for
camouflage nets because they cannot be produced by FY 1982.
TRAINING AND READINESS, AIR NATIONAL GUARD
The bill as reported by the Committee includes certain adjust-
ments to improve the readiness of the Air National Guard. Includ-
ed in this category is $7.6 million to modify the J-79 engine used
on Guard F-4 aircraft so that this engine will no longer leave a
visible smoke trail. Another $30.4 million has been added to the
Other Procurement, Air Force appropriation to buy communica-
tions equipment for Air National Guard units supporting the Rapid
Deployment Force. Finally, $10.0 million was added to the bill for
purchase of war reserve spares for high priority Air Guard units. It
was also necessary to delete the request of $3.4 million of camou-
flage nets because of a production backlog. During the September
amendment the Army found it necessary to delete $16.9 million of
the $53.1 million requested for camouflage screens because availa-
bile production capacity could not provide all of the camouflage
nets budgeted for FY 1982.
NATIONAL BOARD FOR THE PROMOTION OF RIFLE
PRACTICE, ARMY
Appropriations, fiscal year 1981 ........................................................................ $845,000
Estimate, fiscal year 1982 ................................................................................... 444,000
Recommended in the bill ................................................................a.................. 845,000
Change .................................................................................................................... +401,000
The Committee recommends an appropriation of $845,000 for
National Board for the Promotion of Rifle Practice, Army. This
amount is an increase of $401,000 from the budget estimate of
$444,000. The amount recommended herein for fiscal year 1982 is
the same as made available for fiscal year 1981. Pay raise costs are
not included in the fiscal year 1982 estimate.
CLAIMS, DEFENSE
Appropriations, fiscal year 1981 ........................................................................ $141,850,000
Estimate, fiscal year 1982 ................................................................................... 195,500,000
Recommended in the bill .................................................................................... 155,700,000
Change .................................................................................................................... -39,800,000
The Committee recommends an appropriation of $155,700,000.
This amount is a decrease of $39,800,000 from the budget estimate
of $195,500,000. The amount recommended herein for fiscal year
1982 is an increase of $13,850,000 over the fiscal year 1981 appro-
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
priation of $141,850,000. Earlier this year, the Department of De-
fense requested in the fiscal year 1981 supplemental the amount of
$41,000,000 to be paid to the Federal Republic of Germany for
maneuver damages. The conferees on the fiscal year 1981 Supple-
mental appropriation did not approve any funds for maneuver
damage claims due to the Department of Defense's failure to un-
dertake negotiations with the NATO allies concerning peacetime
host nations support and related status of forces matters.
The fiscal year 1982 revised request for Claims shows that the
Department of the Army portion of the request is $129,995,000.
Fifty-three percent of the request, or $69.1 million, is being used to
pay maneuver damage claims in the Federal Republic of Germany.
The Committee is recommending an appropriation of $29,300,000
of the $69.1 million being requested for maneuver damages. The
$29,300,000 being recommended for appropriation is a 15 percent
increase to the 1980 base of $25,468,000 to cover inflation. The
fiscal year 1981 program hasn't been finalized.
In past years, the Committee has conducted hearings concerning
claims, particularly damage claims. In the report accompanying
the Defense Appropriation Bill for fiscal year 1980, the Committee
suggested that the time had arrived for the Administration to start
renegotiating claim procedures with foreign governments, particu-
larly the Federal Republic of Germany. These agreements were
written in 1951, when, of course, the dollar was a lot stronger
versus the foreign currencies and the Federal Republic of Germany
was not the economic power it is today. In the fiscal year 1981
Defense Bill, the Congress deleted from the requested $146.8 mil-
lion a total of $21.9 million to pay for maneuver damage claims
incurred by U.S. forces in the Federal Republic of Germany. This
continued the Committee's policy of withholding maneuver damage
claims in order to obtain some leverage in negotiating revised host
nation support agreements for real property maintenance and
troop support in Germany. The recommended reduction of $39.8
million in the fiscal year 1982 request is made for the same rea-
sons.
To date, these reductions have not had an impact on local gov-
ernment jurisdictions in West Germany where most of the pay-
ments eventually go, because the FRG has continued to pay the
claims pending receipt from the U.S. The shortfall in funds has
also not been as large as expected because of the dollars' strength
versus the mark during the past year.
COURT OF MILITARY APPEALS, DEFENSE
Appropriations, fiscal year 1981 ........................................................................ $2,310,000
Estimate, fiscal year 1982 ................................................................................... 2,607,000
Recommended in the bill .................................................................................... 2,607,000
The Committee recommends.an appropriation of $2,607,000 for
the Court of Military Appeals. The amount appropriated for fiscal
year 1981 to date is $2,310,000. The amount recommended herein
for fiscal year 1982 is an increase of $297,000 over the prior year.
Pay raise costs are not included in the fiscal year 1982 estimate.
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ESTIMATES AND APPROPRIATION SUMMARY
The amended fiscal year 1982 Department of Defense procure-
ment budget totals $64,225,904,000. The accompanying bill recom-
mends $63,731,469,000 in total funding consisting of $63,657,569,000
in new budget authority and $73,900,000 in prior year unobligated
funds transferred forward to fiscal year 1982. The total amount
recommended is a decrease of $494,435,000 below the fiscal year 1982
budget estimate and is $15,699,899,000 above the total provided for
fiscal year 1981. The table below summarizes the budget estimates
and the Committee's recommendations: _
TOTAL, AIR FORCE ......... ....... .......... .. ..... 23,222,688 23,883,436 +660,748
TRANSFER FROM OTHER ACCOUNTS .................. --- (800) (+800)
------------ ------
TOTAL NOA ....................................... 64,225,904 63,657,569 -568,335
TRANSFER FROM OTHER ACCOUNTS .................. --- (73,900) (+73,900)
ARMY:
AIRCRAFT ............................................ 1,897,300 1,903,500 +6,200
MISSILES ............................................ 2,210,200 2,131,200 -79,000
WEAPONS. TRACKED COMBAT VEHICLES .................... 3,856,700 3,806,200 -50,500
TOTAL, ARMY ..................................... 13,930,500 13,996,100 +65,600
NAVY:
AIRCRAFT ............................................ 9,244,500 8,946,800 -297,700
WEAPONS ............................................. 3,283,800 3,196,100 -87,700
SHIPS ..................................... .......... 8,475,300 7,748,900 -726,400
TRANSFER FROM OTHER ACCOUNTS ...................... --- (73,100) (+73,100)
MARINE CORPS ........................................ 1,734,916 1,682,556 52,360
__________ ____________ ------------
TOTAL, NAVY ..................................... 26,560,516 25,266,533 -1,293,983
TRANSFER FROM OTHER ACCOUNTS .................. --- (73,100) (+73,100)
------------ ------------ ------------
TOTAL FUNDING AVAILABLE ....................... 26,560,516 25,339,633 -1,220,883
AIR FORCE:
AIRCRAFT ............................................ 13,843,898 13,957,598 +113,700
MISSILES .................. .......................... 4,204,646 4,546,550 +341,904
TRANSFER FROM OTHER ACCOUNTS ...................... --- (800) (+800)
------------ ---------- - ------------
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THE SINGLE MANAGER FOR CONVENTIONAL AMMUNITION
In 1975, the Army was designated as the Department of Defense
Single Manager for Conventional Ammunition. The objective of
this assignment was to coordinate the ammunition programs of all
the services, and improve efficiency and effectiveness.
The Single Manager program was to be implemented in two
phases. The second phase was to begin in October 1979, but as of
the present time no Phase II directive has been issued. The objec-
tive of Phase II is to strengthen the organization so that further
economies and efficiencies may be achieved. The General Account-
ing Office issued a report in November, 1979 suggesting numerous
approaches to strengthening the Single Manager program. The
Committee has been exhorting the Department of Defense for three
years to move quickly and aggressively to implement Phase II. Yet,
our hearings reveal that all efforts to move forward seem to be
characterized by bureaucratic infighting and rivalry between ele-
ments of the Office of the Secretary of Defense (OSD), between
OSD and the services, and among the services themselves. Last
year, Department witnesses testified that a Phase II directive
would be issued by September, 1980. On July 14 of this year, the
Committee was told that a Phase II directive was in the final
review process and was working its way to the Secretary of Defense
for signature. Yet the directive has still not been issued.
After years of delay, the Committee's patience has come to an
end. For this reason, the Committee has included a provision in the
bill which requires that operation of the Single Manager program
shall be only under a reissued Department of Defense directive for
Phase II after January 1, 1982.
THE CARE AND MAINTENANCE OF CONVENTIONAL AMMUNITION
The fiscal year 1982 budget proposed significant increases for the
procurement of ammunition. The Air Force budget goes from $344
million to $1.1 billion, the Marine Corps goes from $81 million to
$326 million, and the Army goes from $1.6 billion to $2.3 billion.
The Committee supports these efforts to enhance our ammunition
asset posture and has made only small adjustments to the budget
in fiscal year 1982. But the procurement of new ammunition items
is only a part of what needs to be done to enhance our ammunition
readiness. We also need to assure that ammunition which is in the
inventory is properly accounted for and maintained. At the request
of this Committee, the General Accounting Office has been review-
ing various aspects of the care and maintenance of conventional
ammunition by the Department of Defense. The Committee used
preliminary results of this review in hearings this year. Based on
these hearings, it is clear that added attention needs to be given by
the Office of the Secretary of Defense, as well as the services, to
this aspect of the ammunition program. For example:
-There are about 500,000 short tons of ammunition which are
considered unserviceable, about 25 percent of the entire inven-
tory.
-The program under which the Army budgets for the care and
maintenance of ammunition has only been about 30 percent
funded in the past.
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-A round a ammunition which we are currently buying at a
cost of about $100 million per year has been suspended from
use because manufacturing defects have caused premature det-
onations. Additional manufacturing inspections will add 13
percent to the cost. The cost of inspecting and reworking the
current stockpile of 1.1 million rounds will exceed $20 million.
-The Army consistently miscodes the condition of its ammuni-
tion inventory so that the number of rounds requiring major
rennovation or rework is significantly understated.
-Long delays-amounting to several years-occur between the
time that ammunition is declared for disposal and it is actually
disposed. Navy ammunition awaiting disposal occupies 2.5 mil-
lion square feet of storage space which could be used for other
purposes. The budget for demilitarization and disposal of am-
munition has been consistently underfunded.
-At a time when we are sending more ammunition to Europe
for war reserves, many storage facilities are deteriorating and
inadequate. There are also inadequate facilities in Europe for
renovating and reworking defective ammunition.
Efforts to redress the inattention of the past appear to be ade-
quately funded in fiscal year 1982. The Committee believes that
budgeted funds for care and maintenance of ammunition should
not be drained off during the year to fund other programs. In
addition, the Department of Defense should be prepared to demon-
strate to the Committee that these programs are fully funded in
fiscal year 1983 and future years.
MULTIYEAR CONTRACTING
BACKGROUND
What is Multiyear Contracting?
Multiyear contracting (MYC) is a management device that has
potential for saving money and for improving the defense industri-
al base. The following sources have been cited for achieving lower
unit costs compared to annual contracting: 1) improved economies
and efficiencies in the production process, 2) economy-of-scale lot
buying, 3) decreased financial costs of borrowing, 4) better utiliza-
tion of industrial facilities, and 5) reduction in the burden of plac-
ing and administering contracts. MYC also offers opportunities to
enhance the industrial base through the often intangible benefits
of firm long term planning. It clearly offers opportunities to shore
up the defense industrial base by attracting subcontractors, ven-
dors, and small suppliers, who under current procurement prac-
tices are leaving the defense field.
Full Funding is a Separate Issue From MYC
This year has seen an unfortunate confusion between MYC and
the full funding policy. Full funding is a separate issue from MYC.
MYC is under consideration now becasue it was virtually "limita-
tioned" out of existence ten years ago after some glaring failures.
Full funding is a fundamental government financing policy that
has been proven since the early 1950's. OMB Circular A-11 pro-
vides that requests for major procurement and construction will
provide for full funding of the entire cost. Exceptions to that provi-
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sion must be submitted to OMB in writing and be approved in
writing. In fiscal year 1979 the Executive sought to expand applica-
tion of the full funding principal through the Federal Government.
Department of Defense witnesses testified before Congress at that
time supporting the President's proposal with a record of positive
experience with full-funding in the Department of Defense.
Under the circumstances any movement from the full funding
policy should involve a full review by both the Executive and the
Congress, something that has not been proposed to the Committee.
Especially with regard to-the MYC the Committee continues to
follow the full funding policy.
One Congress Should Not Bind Another. MYC itself passes on to
future Congresses the responsibility to complete funding to the
conclusion of a MYC in order to achieve the anticipated savings-
costs are pushed forward to the early years of MYC, so that savings
are not accrued till the last stages of the contract. It would be
unfair and unwise to pass on to a future Congress, in addition, the
responsibility to pay for end items which an earlier Congress deter-
mined were necessary for national security. Incremental funding of
MYC would do just that.
Full Funding Adds Discipline to Congressional Decision Making.
Incremental funding would permit massive future year program
funding commitments with no additional cost in the budget year.
Some of the funding proposals made in connection with MYC even
failed to match budget year commitments. Full funding keeps disci-
pline in the process by requiring funding up front at least to match
the real level of commitment for the budget year. Appropriations
recommended by the Committee for MYC cover the costs of end
items ordered for fiscal year 1982 plus the termination liability of
advanced procurement purchases. Reporting requirements for the
MYC justification materials discussed later in this section will
assist congressional decision making on MYC by providing better
information on the true magnitude of future year commitments.
Full Funding Enhances the Benefits of Multiyear Contracting to
the Industrial Base. Incremental funding would cause contractors
some uncertainty about the likelihood of the government following
through on its "commitments" into future years. In this sense
incremental funding would strike at the most attractive quality of
MYC for strengthening the industrial base-and that is its promise
of stability for selected programs. Full funding nails down the
Federal commitment clearly, ensuring better program stability and
a healthier industrial base.
Proposals to Expand Use of Multiyear Contracting
During the early Spring of 1981 a review of the Department of
Defense acquisition policies resulted in thirty-one recommended
changes in procurement policies and practices. On May 1 the
Deputy Secretary of Defense issued a policy memorandum to imple-
ment one of these recommendations, the expanded use of multiyear
contracting for supplies and services in general, and to initiate its
use for major weapons systems. The Fiscal Year 1982 Defense
Authorization Bill contains provisions that will facilitate the imple-
mentation of the Secretary's policy.
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The Department according to its testimony expects the first
really significant uses of MYC in connection with the fiscal year
1983 budget. It intends to integrate MYC into the normal planning
and budgetary process and submit candidates for MYC to Congress
in the normal budget request channels. For the near term the
Department announced it would handle MYC candidates on an
exception basis.
The Chairman of the Defense Appropriations Subcommittee, in
an August 5, 1981 letter to the Secretary of Defense, noting the
importance of the pending proposals for MYC and the rapidly
approaching start of the new fiscal year, urged the Department to
make its selections and submit them to the Committee with com-
plete justifications to facilitate a formal hearing on the subject. On
August 27 the Secretary replied that final proposals would be
submitted to the Committee shortly. The Committee conducted its
last hearing on the Fiscal Year 1982 Budget on October 7, 1981 and
began preparation for mark-up. The third formal version of the
Defense "September" Budget Revision and the justifications for the
MYC proposals were delivered to the Committee on October 9,
1981.
The Committee expects a far more systematic approach to MYC
in the fiscal year 1983 budget cycle. The MYC candidates should be
incorporated in the President's budget proposal for fiscal year 1983,
and MYC justification materials should be delivered to the Com-
mittee concurrently with other procurement justification materials.
THE COMMITTEE URGES CAREFUL IMPLEMENTATION OF MULTIYEAR
CONTRACTING
Nothing is automatic about projected savings by whatever means
and the defense industrial base will be improved only if multiyear
contracts are administered with that purpose. Especially as MYC
applies to major weapons systems, the risks of losing anticipated
savings due to bad estimating, and the real costs due to the long
term loss of flexibility for defense planners implied by the system,
are as real as the possible benefits. On balance the Committee
concurs with the Department's assessment of these positive and
negative factors and encourages the Department to move ahead
with its proposed expansion of MYC. The Committee, however,
urges careful planning and caution especially in the early stages of
the implementation of MYC, especially as it applies to major weap-
ons systems. Some of the reasons for exercising caution are as
follows:
Savings Are Not Automatic
The costs of multiyear contracts are generally relatively higher
in the early stages because anticipated savings frequently result
from economic order purchases made at that time. Savings general-
ly do not accrue until the later stages of the contract as end items
are finally delivered. Substantial savings that might be associated
with a particular MYC then would generally be dependent on its
successful conclusion through all the years for which it was origi-
nally made.
Put another way, cancellation of a MYC half way through its
planned duration could easily result in increased costs rather than
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savings. Further, savings or cost avoidances. associated with MYC
are based on estimates of program costs in future years. The insti-
tutional capability of accurately projecting such costs in the past
has been notoriously lacking. Achievement of the projected savings
now associated with MYC will require that these estimates be
accurate.
Benefits of Multiyear Contracting Have Their Own Price Tag-Loss
of Flexibility and Greater Instability for Remaining Discretion-
(try Defense Programs
MYC necessarily will reduce the flexibility of defense planners
and Congress to capitalize on changing technologies, to accommo-
date understated estimates of inflation in future years, to meet
changing military threats, and to meet future requirements for
deficit reduction in any administration. Routine additions of tech-
nological advancements determined necessary for the improvement
of defense capabilities, which now are routinely made, must be
measured under MYC against the loss in anticipated savings associ-
ated with the contract that would be acceptable under the circum-
stances.
The time honored method of handling understated inflation rates
for future years will have to change. The current practice is to
include a lower number of purchases at higher prices in the budget
request. Under MYC however, the number of items commited to in
the contract would be constant. The extra dollars necessary to
make up the understated inflation rates projected in earlier years
would have to be taken from other systems also included in the
overall five year plan.
Overall the discretionary defense dollar grows smaller as MYC
commitments rise. The effect of this phenomenon on program sta-
bility, an important criteria for selecting candidates for MYC, is
ironic. Placing certain programs under-MYC itself has the effect of
stabilizing those programs. Instability for the remaining discretion-
ary defense programs, however, must rise by the same degree.
For the overall Federal budget about three-quarters of the out-
lays for any given year are mandated under law and can be
changed only with great difficulty. Over half of this discretionary
money remaining now goes for defense. MYC has the effect of
increasing the relatively uncontrollable portion of the budget and
making more difficult short term overall budget retrenchment ef-
forts by any administration for whatever purpose.
Experience With Multiyear Contracting for Major Weapons Systems
Is Lacking
There has been some experience with MYC for relatively small
procurements of standard items and services for which unit price
savings have been realized. But when it comes to major weapons
systems recent experience has been limited to recommendations by
various commissions and institutions-in fact there has been no
real experience over the last decade with multiyear contracts for
procurement of major weapons systems. In the early 1970's such
experience as there was with longer range contracts for major
weapons systems had such bad results that Congress placed a $5
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million cancellation ceiling on MYC-which in effect, prevented its
use for major weapons systems.
The Committee notes the General Accounting Office distinction
that the proposed MYC as it applies to major weapons systems is a
totally different type of multiyear planning and contracting, and
that savings will only result from sophisticated planning and im-
plementation of such plans with skill. Its successful implementa-
tion involves resolution of management problems as much as it
does contracting techniques. The Committee urges that the new
type of MYC initiative be implemented carefully so that once again
the government is not faced with a credibility problem in defense
spending and once again loses the use of a promising management
tool.
COMMITTEE RECOMMENDATION FOR FY 1982 MULTIYEAR CONTRACTING
[In millions of dollars]
Total Included to
start MYC
Change from
Included to budget
start MYC
F-16 ................................................................................ 1,878.4 (249.2) 1,817.6 (249.2) -60.8
Blackhawk ....................................................................... 671.2 (126.0) 545.2 ........................ -126.0
C-2A ................................................................................ 37.0 (5.0) 37.0 (5.0) ......................
TRC-170 Radio ................................................................ 67.2 ........................ 67.2 ..............................................
Total ................................................................... 2,653.8 (380.2) 2,467.0 (254.2) -186.8
The budget proposed to initiate four MYC in FY 1982. The total
request for these programs was $2,653.8 million which included a
total of $380.2 million to initiate the MYC. For the F-16 aircraft
the budget proposed $1,878.4 million, of which $249.2 million was
added to the original budget request to initiate a four year contract
for 480 units with an estimated cost avoidance of $246 million. For
the Black Hawk helicopter the budget proposed $671.2 million, of
which $126 million was included over the original budget request
to initiate a three year contract for 276 units with an estimated
cost avoidance of $65.9 million. For the C-2A aircraft the budget
proposed $37.0 million, of which $5.0 million was included over the
original budget request to initiate a five year contract for 39 units
with an estimated cost avoidance of $58.4 million. For the AN/
TRC-170 Troposcatter Radio and related support the budget pro-
posed $67.2 million for the purchase of 110 units under a four year
contract, with an estimated cost avoidance of $18.7 million. No
additional funds were necessary to implement the MYC. In all
cases the estimated cost avoidance was based on comparisons with
purchases OF annual basis of the same number of units as the
MYC and over the same period of years as the MYC. In all cases
the Department used inflation adjustments in the out years consist-
ent with those provided by the Office of Management and Budget.
The Committee recommends a total of $2,467.0 million for these
programs, reflecting the following adjustments.
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The Black Hawk Helicopter
The Committee recommends $545.2 million for the Black Hawk,
$484.6 million for end item procurement and $60.6 million for
advanced procurement, a deletion of $126 million requested to initi-
ate the MYC for Black Hawk procurement. This action conforms
with the FY 1982 authorization conference levels for the Black
Hawk.
The Committee notes, however, that the funding history for the
Black Hawk has been turbulent, principally due to a record of
significantly understated unit cost estimates. Based on its five year
production record the Black Hawk would not appear to meet two of
the criteria established for selecting MYC candidates, Stability of
Funding, and Confidence in Cost Estimates.
The production schedule for the Black Hawk is scheduled to run
for a number of years, however, leaving ample opportunity to
implement a MYC in a future year if additional production experi-
ence proves to be positive.
F-16 Aircraft
The Committee recommends $1,817.6 million for procurement of
F-16 aircraft under a multiyear contract, $1,270.8 million for end
item procurement and $546.8 million for advanced procurement.
The Committee's recommendation is consistent with authorized
levels for FY 1982, but it is a reduction in the budget request of
$60.8 million. It is assumed by both the authorizing legislation and
the Committee recommendation that a proposed FY 1982 rescission
of funds appropriated in FY 1981 for the F-16 will not be enacted,
and that these funds will be used to entirely off-set. the $60.8
million reduction in new budget authority.
TRC-170 Radio
The Committee recommends $67.2 million for procurement of the
TRC-170 radio under MYC. This amount approves the budget re-
quest, but includes an additional $3.5 million for related support
that the Department indicates is necessary for the radio to be
mission capable.
Explanation of Bill Language on Multiyear Contracting
The Committee earmarks mission capable cost amounts in each
relevant appropriation account to cover those programs for which
purchases are to be made in part by MYC. This language has two
purposes. First, it is intended to prevent the use of funds appropri-
ated for the purpose of initiating a MYC for any other use except 40-
by transfer action in an appropriation act. The "up front" money
associated with MYC will become relatively large over the years-
the Department requested close to $400 million for this purpose for
FY 1982. It is important to establish that failure to., conclude a
MYC or delays in its conclusion cannot result ! ';vindfall of
funds available to the Department for other purposes. The second
purpose is to ensure that deficit reduction and other budget pres-
sures do not impinge on the long range commitments made under
the MYC.
MYC commitments must be insulated, from the annual scramble
for budget year funds, because the savings from MYC do not occur
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till the last stages of the contract. Subjecting ongoing MYC com-
mitments to the annual budget pressures would therefore defeat a
major purpose of this management initiative, and that is to achieve
budget savings.
The Committee also includes general provision language that
emphasizes the need for full involvement of the Congress to initiate
a MYC for procurement of a major weapons system. This bill
language applies only to major weapons systems, and not to MYC
for general operations and maintenance. A "major procurement
program" for the purpose of this section means a program desig-
nated "major" in the major systems list for the Defense System
Acquisition Review Council as maintained by the Executive Secre-
tary of that Council, or a program which breaches the cancellation
ceiling provisions of S-815, the Defense Authorization Act of 1982.
Justification Materials for Multiyear Contracting
The Department listed the following criteria in its justification
materials for selecting MYC candidates:
Benefit to the Government;
Stability of Requirement;
Stability of Funding;
Stable configuration;
Degree of Cost Confidence;
Degree of Contractor Capability.
The Committee feels that these materials can be improved for its
use in, at least, the following ways. First, the materials submitted
made no reference at all to the defense industrial base. The Com-
mittee directs that a full presentation of the benefits that will
accrue to the government be fully addressed, especially as they
affect vendors, small suppliers, and subcontractors, by all accounts
the weakest link in the defense industrial base. These materials
should address efforts made to enhance competition through dual
sourcing and other means. The record should also show how con-
tractors have improved production facilities or instituted training
programs for short supply, highly skilled trades, and the extent to
which the prime contractor will flow down to subcontractors the
benefits of MYC, such as timing of progress payments.
A once a year snapshot of the total levels of future year com-
mitments under MYC is also needed. The following table indicates
how misleading the increased budget year costs necessary to initi-
ate a MYC are as a measure of the total future year commitment
implied by MYC.
FUTURE YEAR COMMITMENT
[In millions of dollars]
Fiscal year
Span of MYC 1982 bud et Total MYC
(years) request or request
MYC
F-16 ........................................................................................................ 4 249.2 2,938.0 7,778.0
Blackhawk ................................................................................................ 3 126.0 998.2 1,606.5
C-2A ........................................................................................................ 5 5.0 686.9 985.2
TRC-170 radio ......................................................................................... 4 ........................ 225.5 236.8
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To have such a complete picture of future year commitments
implied by the MYC, the Committee directs that these materials
include, at least, budget authority and outlays estimated by year
for each candidate for the terms of the respective contracts, and in
addition, the same information for whatever other procurement is
necessary to make the item in question mission capable. The same
information should be presented in an overall presentation for
ongoing MYC for major weapons systems and for all other MYC
proposed or ongoing at that time.
The Committee is also concerned about the quality of cost and
savings estimates used for the development of MYC materials. Use
of 0MB inflation estimates generally results in understated future
year costs. In the case of MYC this fact is particularly disturbing
because these future year cost figures are not being built into
budget plans or projections, but into contracts for procurement of
specific numbers of units. Furthermore, it is used not only in the
MYC itself, but for all the remaining procurement items that make
it mission capable. The Committee therefore directs that the justifi-
cation materials clearly display how changes by degree of 1% in
inflation would impact the cost and savings estimates both for the
MYC and for the items that would make it mission capable. The
Committee also directs that a full statement of cost and savings
estimating methodology be incorporated into the justification mate-
rials. In this regard, some standardized indication of the source of
cost avoidances is necessary, as well as an indication of the kind of
contract on which the estimates are based.
With regard to the criteria for selection the Committee directs
that some explanation of the Department's evaluation of risk be
presented. Merely ranking risk as "high, medium, or low" for these
categories informs nobody of any merits of any candidate for MYC.
The Committee intends with its special treatment of the successful
MYC candidates in appropriations account language to ensure
stable funding. It then must have information that justifies that
level of commitment. Finally, the Committee directs that a draft
outline of justification materials for MYC be submitted by the
Department by the close of calendar year 1981.
AIRCRAFT PROCUREMENT, ARMY
Appropriations, 1981 ................................................................................ $1,193,100,000
New obligational authority, 1982:
Estimate .............................................................................................. 1,897,300,000
Recommended .................................................................................... . 1,903,500,000
Increase ............................................................................................... 6,200,000
This appropriation finances the acquisition of tactical and utility
airplanes and helicopters, including associated electronics, electron-
ic warfare and communications equipment and armament; modifi-
cation of in-service aircraft; ground support equipment; and depot
reparable assemblies, components and repair parts such as spare
engines, transmissions, gear boxes and sensor equipment. It also
funds related training devices, such as combat mission flight simu-
lators, and production base support.
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193
PROGRAM RECOMMENDED
The total amount recommended in the bill will provide the fol-
lowing program for fiscal year 1982:
Change from
Request Recommended request
Quan- Quan- Quan-
Program tity Amount tity Amount tity Amount
FIXED WING
AIRPLANE, C-120 (HURON) ............................... 6 10,500 +6 +10,500
ROTARY
HELICOPTER, ATTACK, AH-1S (COBRA/TOW) ................. --- --- 12 55,000 +12 +55,000
AH-64 ATTACK HELICOPTER ............................... 14 365,000 14 438,400 --- +73,400
4H-64 ATTACK HELICOPTER (AP-CY) ....................... --- 64,400 --- 64,400 --- ---
OH-60A (BLACK HAWK) MULTIYEAR CONTRACT ................ 96 484,600 96 484,600 --- ---
UH-60A (BLACK HAWK) (AP-CY) MULTIYEAR CONTRACT........ - 186,600 --- 60,600 --- -126,000
--- --- ------ ---
TOTAL, AIRCRAFT ..................................... 1,100,600 1,113,500 +12,900
MODIFICATION OF AIRCRAFT
AIRPLANE,SURVEILLANCE,OV-1(MOHANK) .................... --- 18,500 --- 18,500
AIRPLANE, RECON, RC12D (OR PIP MOD) ................... --- 53,600 --- 53,600
AIRPLANE,RECONNAISSANCE, RV-1 (MOD) ................... --- 13,000 --- 13,000
HFLICOPTER, ATTACK AHIS (COBRA-TOW) ................... 65,900 --- 65,900
HELICOPTER, CARGO, CH-47 (CHINOOK) .................... --- 273,100 --- 273,100
AIRPLANE, CARGO, C-12 (NODS/ .......................... --- 800 --- 800
HELICOPTER, ELECTRONIC, EH-I (O-FIX MOP) .............. -- 4,600 --- 4,600
HELICOPTER, OBSERVATION, OH-58 IKIOWA) ................ --- 1,800 --- 1,800
AIRBORNE AVIONICS ..................................... --- 4,200 --- 4,200
HELICOPTER, UTILITY, UH-I (IROQUOIS) .................. --- 14,300 --- 14,300
____________ ------------
OTHER SUPPORT
AVIONICS SUPPORT EQUIPMENT ............................ --- 17,800 --- 17,800
AVIATION NIGHT VISION GOGGLES AN/AVS-6 ................ 260 5,700 260 . 5,700
COMMON GROUND EQUIPMENT ............................... --- 54,100 --- 54,100
INDUSTRIAL FACILITIES ................................. --- 34,800 --- 34,800
'ACFT 9NN .............................................. -'- . 9,000 --- 9,000
WAR CONSUMABLES ....................................... --- 6,800 --- 6,800
------------ ------------
TOTAL, SUPPORT EQUIPMENT AND FACILITIES ............. 128,200 128,200
FOREIGN MILITARY SALES ADJUSTMENT ..................... --- --- --- -4,000 --- -4,000
ARMY GUARD AND RESERVE EQUIPMENT TRANSFER ............. --- --- --- -2,700 --- -2,700
TOTAL, AIRCRAFT PROCUREMENT, ARMY ................... 1,897,300 1,903,500
COMMITTEE RECOMMENDATIONS
AIRCRAFT
C-12D HURON
The Committee recommends $10,500,000 for procurement of 6
C-12D fixed wing utility aircraft. The budget included no funding
for this program.
As noted earlier in this report, the Committee is concerned about
the age and condition of equipment in the inventory of Army
reserve components. Greater priority and attention needs to be
given to bringing reserve component equipment up to Army stand-
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ards. In this regard, the fixed wing aircraft inventory in the Army
National Guard is in need of modernization. For this reason, the
Committee directs that the additional C-12D aircraft funded in this
bill be assigned to Army National Guard.
AH-64 APACHE ADVANCED ATTACK HELICOPTER
The Committee recommends $438.4 million for the AH-64
Apache Advanced Attack Helicopter, an increase of $73.4 million
over the budget of $365.0 million. The total amount recommended
is the amount. included in conference action on the authorization
bill.
AH-1S COBRA-TOW ATTACK HELICOPTER
The Committee recommends $55 million for procurement of 12
AH-1S Cobra-Tow helicopters. These helicopters were not budgeted
by the Army but were included in the final conference action on
the authorization bill. Testimony before the Committee has shown
that there is a shortage of attack helicopters in Army National
Guard. It is the Committee's intention that the additional helicop-
ters go to the Army National Guard. In addition, the recommenda-
tion will assure an active production line for attack helicopters
until the new Apache advanced attack helicopter reaches rate pro-
duction sometime in 1984.
The September amendments to the budget included an additional
$126,000,000 to initiate multi-year procurement of the UH-60
Blackhawk helicopter. The justification material to support this
proposal has only recently been transmitted to the Committee.
Based on an initial review of this material, it appears that many
important questions are not answered. In addition, the Blackhawk
program has had a history of procurement fluctuation and cost
instability. It would appear prudent at this time to postpone multi-
year procurement, without prejudice. Therefore, the Committee
recommends a reduction of $126,000,000. This recommendation is
consistent with authorization conference action and will not affect
the total of 96 helicopters budgeted for procurement in fiscal year.
1982 and funded in the bill. Further comments on multiyear con-
tracting appear earlier in this title of the report.
ARMY GUARD AND RESERVE EQUIPMENT TRANSFER
The Committee recommends a general reduction of $2,700,000 in
this appropriation to support the Army Guard and Reserve Equip-
ment Transfer which is described earlier in this report.
FOREIGN MILITARY SALES ADJUSTMENTS
The Committee recommends a general reduction of $4,000,000 in
this appropriation based on changes in the foreign military sales
program. These changes are discussed earlier in this report.
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MISSILE PROCUREMENT, ARMY
Appropriations, 1981 ................................................................................ $1,544,900,000
New obligational authority, 1982:
Estimate .............................................................................................. 2,210,200,000
Recommended .................................................................................... 2,131,200,000
Decrease .............................................................................................. 79, 000, 000
This appropriation finances the acquisition of surface-to-air, sur-
face-to-surface, and antitank/assault missile systems. Also included
are major components, modifications, targets, test equipment, and
depot reparable spares and repair parts; and production base sup-
port.
PROGRAM RECOMMENDED
The total amount recommended in the bill will provide the fol-
lowing program for fiscal year 1982:
Change from
Recommended request
Quan- Quan- Quan-
Program tity Amount tity Amount tity Amount
SURFACE-TO-AIR MISSILE SYSTEM
CHAPARRAL (MM-72-A/C) ................................ ___
HAWK (MDM-23-B) ....................................... ...
U.S. ROLAND ........................................... ---
PATRIOT (SAM-D) ....................................... 294
STINGER ............................................... 2,544
AIR-TO-SURFACE MISSILE SYSTEM
LASER HELLFIRE SYSTEM ................................. 1,075
ANTI-TANK/ASSAULT MISSILE SYSTEM
TON (BGM-71A), (BTM-71A) .............................. 12,000
PERSHING .............................................. 39
MULTIPLE LAUNCH ROCKET SYSTEM .............. ......... 2.496
MODIFICATION OF MISSILES
MODIFICATIONS
CHAPARRAL MODIFICATIONS ...............................
HAWK MODIFICATIONS ....................................
TON MODIFICATIONS .....................................
DRAGON MODIFICATIONS ..................................
LANCE MODIFICATIONS ...................................
MODIFICATIONS LESS THAN 4900,000 ......................
GRASS BLADE ...........................................
AN/TSQ 73 MODIFICATIONS ...............................
UNDISTRIBUTED REDUCTION ...............................
SUPPORT EQUIPMENT AND FACILITIES
AIR DEFENSE TARGETS ...................................
ITEMS LESS THAN $900,000 (MISSILES) ...................
PRODUCTION BASE SPT ...................................
ARMY GUARD AND RESERVE EQUIPMENT TRANSFER .............
REDUCTION, OFFSETS/INFLATION ..........................
4,300
---
4,300
4,700
---
4,700
---
---
50,000 ---
720,800
244
670,000 -50
223,900
2,544
192,100 ---
96,600
12,000
96,600 ---
191,800
39
191,800 ---
179,300
------------
2,496
179,300 ---
------------
450,000
-50,800
-31,800
---
---
---
-----____---
59,400
---
59,400
79.000
---
79.000
107.500
---
107.500
17,500
---
22,000
---
22,000
1,500
---
1,500
151.000
---
151,000
2.900
---
2.900
---
---
-10,000
------------
------------
440.800
413,300
8,100 --- 8,100
300 --- 300
32,400 --- 32,400
--- --- -3,100
-3,000 --- -3,000
------------
-3,100
2,210,200 2,131,200 -791000
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196
COMMITTEE RECOMMENDATIONS
SURFACE TO AIR MISSILES
U.S. ROLAND
The September budget amendment deleted funds for the Roland
system. In order to obtain some useful capabilities from the hard-
ware funded to date, the Army has proposed to field that hardware
in a configuration compatible with the RDF mission. The Commit-
tee understands that the total cost of this effort will be
$110,000,000, over two years. For funding this specific RDF-related
purpose only, the Committee recommends providing $50,000,000
above the budget.
STINGER
The Army budgeted $223,900,000 for Stinger missile procure-
ment. Army documentation provided to the Committee's Surveys
and Investigations Staff shows that $31,800,000 of the sum was for
the Passive Optical Seeker Technique (POST) version of the mis-
sile. Development of Stinger POST has experienced technical diffi-
culties, causing a 20 month slip in the schedule. This has precluded
a production start in fiscal year 1982, and funds for that purpose
can, therefore, be deferred. The Committee recommends a reduc-
tion of $31,800,000 resulting in a recommended total for Stinger of
$192,100,000.
AUTHORIZATION REDUCTIONS
The Committee recommends the following reductions made by
the authorizing conference:
[In thousands of dollars]
Budget
request
Patriot (SAM-D) .................................................................................................
720,800
-50,800
670,000
Laser Hellfire ........................................................................................................
128,400
-15,000
113,400
Dragon modifications ............................................................................................
17,500
-17,500
0
Undistributed reduction ........................................................................................
0
-10,000
-10,000
Spares and repair parts .......................................................................................
181,800
-800
181,000
ARMY GUARD AND RESERVE EQUIPMENT TRANSFER
The Committee recommends a general reduction of $3,100,000 in
the Missile Procurement, Army account to finance the Army
Guard and Reserve Equipment Transfer as described earlier in this
report.
PROCUREMENT OF WEAPONS AND TRACKED COMBAT
VEHICLES, ARMY
Appropriations, 1981 ................................................................................
$3,378,200
000
New obligational authority, 1982:
Estimate ..............................................................................................
,
3,856,700,000
Recommended ....................................................................................
3,806,200,000
Decrease ..............................................................................................
50,500,000
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This appropriation finances the acquisition of tanks; personnel
and cargo carriers; fighting tracked recovery vehicles; self-pro-
pelled and towed howitzers; machine guns; mortars; modification of
in-service equipment; initial and replenishment spares, repair
parts; and production base support.
PROGRAM RECOMMENDED
The total amount recommended in the bill will provide the fol-
lowing program for fiscal year 1982:
Change from
Request Recommended request
Quan- Quan- Quan-
Program tity Amount tity Amount tity Amount
FIGHTING VEHICLE SYSTEM (AP-CY) ....................... --- 59,100 --- 59,100 ---
FIELD ARTILLERY AMMUNITION SUPPORT VEHICL ............. --- 4.000 --- --'
RECOVERY VEHICLE, MED, FT. MBBA1 .....................? 180 148,000 150 123.700 -30
TAHK:COMBAT,FT, 105MM GUN, %M1 SERIES................. 665 1.348,000 665 1,348.000 ---
TANK, COMBAT ,FT. 105MM GUN, %M1 SERIES (AP-CT( ..... .... --- 212.100 --- 212.100 TRAINING EQUIPMENT FOR XN-1 SERIES TANK ............... --- 30,600 --- 50,600 ---
MODIFICATION OF TRACKED COMBAT VEHICLES
CARRIER, M00. ROLL .................................... --- 20.700 --- 20.700 IMPROUED TON VEHICLE (ITS) (NOD)..,..,.....'.......... --- 24,000 --- 24.000 ---
HOWITZER, HO, SP, FT, 8-IN MIIO SER(MOD) .............. --- 3,900 --- 3,900 ---
TANK,COMBAT,FT,105NM GUN,M605ER(MOD) .................. --- 154,500 --- 154,500 ---
-4,000
-24,300
SUPPORT EQUIPMENT AND FACILITIES
SPARES AND REPAIR PARTS .............................. --- 276,400 --- 276,400
ITEMS LESS THAN $900,000 (TCV-YTCVI ................... --- 900 --- 900
PRODUCTION BASE SUPPORT (TCV-WTCV) .................... --- 94,300 --- 04,300
------------
WEAPONS AND OTHER COMBAT VEHICLES
D IVAD GUN- ........................................... 50 282,000 30 282,000
DIVAS GUN (AP-CY) .................................. ... .-- 53.500 --- 53:500
HOWITZER, NED, TOWED, 155MM, M198 .................... 200 72,200 200 72200
ARMOR MACHINE GUN, 7,62MM M240 ROLL ................... 5,400 26,300 5,400 26:300
SOURD AUTOMATIC WEAPON (SAW) 5.56MM ................... 4,600 14,200 4,600 14,200
RADAR CHRONOGRAPH SET 890 ............................. 120 3.300 120 3,300
MORTAR, 81MM, XM252 ................................... 60 1:900 60 1:900
VEX RAPID FIRE WPM SYS - BUSHMASTER ................... 720 31,300 720 31,300
FIRING PORT WEAPON-IFV ........ ........................ 18,850 19,400 19,850 19,400
MODIFICATION OF WEAPONS AND OTHER COMBAT VEHICLES
HOWITZER, 155NM, M114A2 (MOD) ......................... --- 8,400 --- 8.400
LAUNCHER, SMOKE GRENADE (MODS),.. ..................... --- 4.500 --- 4,500
MODIFICATIONS UNDER $900.000 (WOCV-WTCV) .............. --- 1,000 --- 1,000
SUPPORT EQUIPMENT AND FACILITIES
SPARES AND REPAIR PARTS ............................... --- 511,600 --- 51.600
ITEMS LESS THAN $900,000 (WOLV-WTCV) .................. .-- 3.400 --- 31,400
PRODUCTION BASE SUPPORT (WOCV-WTCV) ................... --- 82,400 --- 82,400
------------ ------------
REDUCTION, OFFSETS/INFLATION ..........................
FOREIGN MILITARY SALES ADJUSTMENT .....................
ARMY GUARD AND RESERVE EQUIPMENT TRANSFER .............
-51.000 --- ---
-71.000 --- -7,000
-51.400 --- -51.400
3,806,200 -50,500
COMMITTEE RECOMMENDATIONS
TRACKED COMBAT VEHICLES
FIGHTING VEHICLE SYSTEM
The budget included $809,800,000 for procurement of 600 fighting
vehicle systems. The authorization conference agreement includes
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$800,000,000 for this program. The Committee recommends a re-
duction of $9,800,000.
The Committee is concerned with the ability of the Army to fund
its wide range of procurement programs within anticipated bud-
gets. Therefore the Committee believes that we should continually
review potential lower cost alternatives to fulfill critical Army 4
missions.
An item of particular interest is the Fighting Vehicle System
program. The program has experienced considerable cost growth.
The Selected Acquisition Reports between June 1977 and June 1981
show a program cost increase from $1.3 billion to $11.8 billion.
While the Committee recognizes the FVS is designed to fulfill
critical Army missions, it notes that no cost effectiveness analysis
of the program has been conducted since 1977, and no major field
comparison of the FVS with potential options has ever been con-
ducted.
Therefore the Committee directs the Army to conduct side by
side field tests of the FVS with a wide range of vehicles that could
wholly or in conjunction with other systems perform the FVS
mission. These systems should include the modified M113 as recom-
mended by the Army Materiel Development and Readiness Com-
mand, the Improved TOW vehicle, the AIFV and commercial light
armored vehicles being developed by the Army and Marine Corps,
as well as any other systems considered appropriate. These tests
should focus on both performance and cost factors and consider
limitations on any system performing more than one function si-
multaneously.
The Army _ will notify the Committee of its planned structure for
the field test and provide test results in time for the Committee's
deliberations on the fiscal year 1983 budget request.
M88A1 RECOVERY VEHICLES
The budget included $148,000,000 for procurement of 180 M88A1
recovery vehicles. The authorization conference action includes
$123,700,000 for procurement of 150 vehicles. In conformance with
this action, the Committee recommends an appropriation of
$123,700,000, a reduction of $24,300,000.
FIELD ARTILLERY AMMUNITION SUPPORT VEHICLE
The budget included $4,000,000 for initial procurement of long
lead items for the Field Artillery Ammunition Support Vehicle.
The authorization conference agreement denies this request. The
Committee, therefore, recommends a reduction of $4,000,000.
ARMY GUARD AND RESERVE EQUIPMENT TRANSFER
The Committee recommends a general reduction of $5,400,000 in
this appropriation to support the Army Guard and Reserve Equip-
ment Transfer which is described earlier in this report.
FOREIGN MILITARY SALES ADJUSTMENTS
The Committee recommends a general reduction of $7,000,000 in
this appropriation based on changes in the foreign military sales
program. These changes are discussed earlier in this report.
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STANDARDIZATION OF HANDGUNS
Since 1978, the Committee has been urging the Department of
Defense to standardize handguns and handgun ammunition. A
study by the Committee's Surveys and Investigations staff that
year found that there were more than 25 different makes, models
and types of handguns in the U.S. military inventories. The
number of different types of ammunition is far greater. This prolif-
eration causes many problems with regard to stocking of spare
parts, maintenance of specifications for each weapon, training of
handgun repair personnel and inventory control.
After years of delay, the Department of Defense has now em-
barked on a program to test and procure 9mm handguns and
ammunition to be used as a standard for all services and the Coast
Guard. Testing of candidate weapons is now under way and a
source selection could be made as early as January, 1982. Procure-
ment of the new standard handgun for the Department of Defense
will begin in fiscal year 1983.
The Committee, of course, desires that sufficient testing be con-
ducted prior to source selection. It does not believe, however, that
there should be any more unnecessary delays in moving forward
with this program. In order to make the intentions of the Commit-
tee and Congress quite clear, the Committee has inserted bill lan-
guage in this appropriation which provides that $1,900,000 shall be
available only for continuation of testing and evaluation of 9mm
handguns without delay.
PROCUREMENT OF AMMUNITION, ARMY
Appropriations, 1981 ................................................................................ $1,558,700,000
New obligational authority, 1982:
Estimate .............................................................................................. 2,282,500,000
Recommended .................................................................................... 2,350,900,000
Increase ............................................................................................... 68,400,000
This appropriation finances the acquisition of ammunition, modi-
fication of inservice stock, and related production base support
including the maintenance, expansion, and modernization of indus-
trial facilities and equipment.
PROGRAM RECOMMENDED
The total amount recommended in the bill will provide the fol-
lowing program for fiscal year 1982:
FISCAL YEAR 1982 PROCUREMENT OF AMMUNITION, ARMY
Committee
recommendation
Ammunition .............................................................................................. $1,975,600,000 $2,088,500,000 +$112,900,000
Production Base Support:
Production Support and Equipment Replacement ............................ 50,600,000 50,600,000
Initial Production Facilities .............................................................. 88,400,000 88,400,000 ..............................
Modernization .................................................................................. 65,400,000 55,900,000 -9,500,000
Expansion ........................................................................................ 37,400,000 43,400,000 +6,000,000
Depot Maintenance Plant Equipment ............................................... 10,300,000 10,300,000 ..............................
Layaway of Facilities ....................................................................... 29,900,000 29,900,000 ..............................
Manufacturing Technology ............................................................... 27,900,000 27,900,000 ..............................
Subtotal, Production Base Support ............................................. 309,900,000 306,400,000 -3,500,000
General Reduction-First Destination Transportation ...................................................... -37,800,000 -37,800,000
General Reduction-Army Guard and Reserve Equipment Trans-
fer .............................................................................................................................. -3,200,000 -3,200,000
Reduction/Offsets, Inflation ............................................................ -3,000,000 -3,000,000 ..............................
Total ........................................................................................... 2,282,500,000 2,350,900,000 +68,400,000
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200
COMMITTEE RECOMMENDATIONS
AMMUNITION
WAR RESERVE AND TRAINING AMMUNITION
The September budget amendment included a net reduction of
$159,000,000 in war reserve and training ammunition in the Pro-
curement of Ammunition, Army, appropriation. The Committee
believes that most of these changes are short-sighted in light of our
overall readiness posture and training requirements. The Commit-
tee, therefore, recommends that the following items be restored to
the level funded in the March amendment to the budget.
5.56 mm Cartridge, Blank... ..........................
......................................................
7.62 mm Cartridge, All types ..............................................................................
25 mm Cartridge .................................................................................................
4.2 inch, Ilium cartridge ......................................................................................
105 mm Cartridge, HEAT-T .................................................................................
105 mm Cartridge, TP-T .....................................................................................
105 mm Cartridge, DS-TP ..................................................................................
105 mm Cartridge, APFSDS T .............................................................................
155 mm Projectile, ADAM ...................................................................................
155 mm Projectile, RAAMS .................................................................................
Mines, Practice and Inert, All types .....................................................................
Demolition Munitions ............................................................................................
2.75 inch, LSFFAR Rocket ...................................................................................
Signals, All types .................................................................................................
Nitroguanadine .....................................................................................................
Production Base Support ......................................................................................
$19,500,000 $24,400,000 +$4,900,000
48,600,000 58,300,000 +9,700,000
126,900,000 130,800,000 +3,900,000
44,800,000 49,400,000 +4,600,000
45,200,000 58,200,000 + 13,000,000
68,500,000 71,200,000 +2,700,000
82,200,000 86,600,000 +4,400,000
72,100,000 70,100,000 -2,000,000
75,600,000 105,300,000 +29,700,000
58,400,000 86,500,000 + 28,100,000
7,000,000 14,000,000 +7,000,000
7,100,000 14,100,000 +7,000,000
83,300,000 114,900,000 + 31,600,000
17,200,000 22,000,000 +4,800,000
13, 500, 000 ............................ -13, 500, 000
309,900,000 306,400,000 -3,500,000
INVENTORY EXCESS AND DELIVERY BACKLOGS
The Committee recommends the following reductions in the
budget estimate, which total $23,000,000, based on the findings of
the General Accounting Office that inventories on hand were satis-
factory or that substantial delivery backlogs exist:
14.5 mm cartridges ............................................................................................. $1,600,000 ............................ -$1,600,000
Point detonating fuzes ......................................................................................... 12,500,000 ............................ -12,500,000
155 mm propelling charges ................................................................................. 74,300,000 $66,500,000 -7,800,000
20 mm cartridges ................................................................................................ 11,800,000 10,700,000 -1,100,000
STEAM TIE-LINE, RADFORD ARMY AMMUNITION PLANT
The Committee recommends a reduction of $9,500,000 for a proj-
ect to construct a steam tie-line to the horseshoe area at Radford
Army Ammunition Plant. The General Accounting Office found
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the economic justification for this project to be questionable and
the Army agreed with this finding.
The Committee recommends an increase of $9,500,000 to cover
increased cost estimates incurred in the construction of the Missis-
sippi Army Ammunition Plant. When combined with the
$10,500,000 in the budget, a total of $20,000,000 is included in the
bill for this project.
FIRST DESTINATION TRANSPORTATION (AMMUNITION)
The Army included in the procurement of ammunition budget
$37,800,000 for first destination transportation. This was done on
the assumption that a stock fund would be established for ammuni-
tion procurement in fiscal year 1982. With the creation of the
Conventional Ammunition Working Capital Fund, funding for first
destination transportation in the procurement appropriation is not
appropriate. A reduction of $37,800,000 is therefore recommended
in the procurement appropriation, as well as a partially offsetting
increase of $25,000,000 in the operation and maintenance appropri-
ation, where greater efficiency will prevail.
ARMY GUARD AND EQUIPMENT TRANSFER
The Committee recommends a general reduction of $3,200,000 in
this appropriation to support the Army Guard and Reserve Equip-
ment Transfer which is described earlier in this report.
OTHER PROCUREMENT, ARMY
Appropriations, 1981 ................................................................................ $2,822,408,000
New obligational authority, 1982:
Estimate .............................................................................................. 3,683,800,000
Recommended .................................................................................... 3,804,300,000
Increase ............................................................................................... 120,500,000
This appropriation finances the acquisition of. (a) tactical and
commercial vehicles including trucks, semi-trailers, and trailers of
all types to provide mobility and utility support to field forces and
the worldwide logistical system; (b) communications and electronics
equipment of all types to provide fixed, semifixed, and mobile
strategic and tactical communications equipment; (c) other support
equipment such as chemical defensive equipment, tactical bridging,
shop sets, construction equipment, floating and rail equipment,
generators and power units, material handling equipment, medical
support equipment, special equipment for user testing, and nonsys-
tem training devices. In each of these activities funds are also
included for modification of in-service equipment, investment
spares and repair parts, and production base support.
PROGRAM RECOMMENDED
The total amount recommended in the bill will provide the fol-
lowing program for fiscal year 1982:
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FISCAL YEAR 1982 OTHER PROCUREMENT, ARMY
Committee
recommendation
Tactical and Support Vehicles ............................................................
$1,029,300,000
$1,019,300,000
Communications and Electronics Equipment .......................................
1,611,700,000
1,577,100,000
Other Support Equipment ......................................... ............:.............
1,046,800,000
1
077
600
000
Guard and Reserve Readiness Equipment .............................................................................
,
,
,
139,500,000
Army Guard and Reserve Equipment Transfer ......................................................................
-5
200
000
Reduction/Offsets, Inflation ................................................................
-4,000,000
,
,
-4,000,000
Total .....................................................................................
3,683,800,000
3,804,300,000
-$10,000,000
-34,600,000
+30,800,000
+139,500,000
-5,200,000
................................
+ 120,500,000
COMMITTEE RECOMMENDATIONS
TACTICAL AND SUPPORT VEHICLES
FIVE- AND TEN-TON TRUCKS
A reduction of $10,000,000 in the $502,300,000 budgeted for pro-
curement of five- and ten-ton trucks is recommended. Multiyear
contracts for these vehicles were signed after the budget was for-
mulated, yielding unit costs below those estimated.
SPECIAL SECURITY VEHICLES
The Committee has included a provision in the appropriation
language which allows the procurement of no more than fourteen
passenger carrying motor vehicles required for security of person-
nel. The cost of these vehicles is limited to a ceiling of $100,000
each. The legislative provision is required because current law
imposes lower limits on the unit cost of passenger carrying motor
vehicles.
COMMUNICATIONS AND ELECTRONICS EQUIPMENT
POSITION LOCATION REPORTING SYSTEM
The Army budgeted $30,500,000 for the initial procurement of
the Position Location Reporting System (PLRS), and $3,100,000 for
initial spares. PLRS is a computer based system which provides
near real time position location, identification, and navigation in-
formation for personnel, aircraft, and vehicles.
The Committee believes that this procurement is premature, and
recommends denial of procurement funding for the following rea-
sons:
1. There is still $35,400,000 in research and development to
be accomplished between 1982 and 1984.
2. There was a six month slip in the start of testing with no
change in the production contract award date or the initial
operational capability. Instead, the development and operation-
al testing program was compressed.
3. The required reliability for user units is 500 hours mean
time between failure. The average that has been achieved in
testing to date is 164.
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4. There are still some technical risks in the programs, such
as ability to track 370 active users, time required to provide
service to 370 users, performance in non-line-of-sight environ-
ment, and performance in EW environment.
5. Major changes are proposed for PLRS, including the
PLRS/JTIDS hybrid. This change is required to make the
system interact with the multitude of other communications
systems on the battlefield.
In addition to the above points, the Committee notes that pro-
curement cost estimates for this program have doubled since last
year. The Army total is now estimated to be $246,000,000. A simi-
lar amount is estimated for the Marine Corps. A Cost and Oper-
ational Effectiveness Analysis in 1978-79 showed that the Global
Positioning System (GPS), was a more cost effective position navi-
gation candidate than PLRS. Another study showed PLRS to be
slightly more cost effective, but it did not use the most recent cost
estimates for PLRS.
The Army and the Marine Corps should seriously re-consider the
cost effectiveness of PLRS in light of the most recent cost increases
and the potential for GPS to satisfy the requirement.
The Committee recommends a reduction of $1,000,000 in the
$5,300,000 budgeted for the Intelligence Data Handling System for
reasons discussed in the classified annex to this report.
NIGHT VISION IMAGE INTENSIFYING DEVICES
In the Fiscal Year 1981 Department of Defense Appropriations
Act (PL 96-527) Congress provided additional funds for the procure-
ment of image intensifying night vision devices. This addition ex-
pressed the deep concern of the Committee with the preserving of a
crucial industrial capability necessary to improve and maintain a
proper state of readiness. The Committee is now concerned that the
Army has revised its night vision programs and has not placed a
sufficient priority on these programs to provide enough funding in
fiscal year 1983 and fiscal year 1984 programs to maintain the
industrial base. In addition to a serious impact on prime tube and
equipment manufacturers, this will also result in serious, perhaps
irreversible, curtailment of the supply of essential electro-optical
components. Some of the suppliers are small businesses unable to,
withstand further volume reductions. These key vendors are few in
number and their technology, in some cases, is unique in the free
world.
Once again, the Committee states to the Army that maintaining
the industrial base in this crucial high technology area is vital to
improved readiness and the country's ability to fight a convention-
al war. Night vision devices provide a critical twenty-four hour
fighting capability to the Army and the means of production must
be maintained.
STANDARD TELEPHONE UNIT II (STU II)
The Committee directs that the funds requested for upgrading
the AUTOSEVOCOM secure voice system be used instead to pro-
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cure Standard Telephone Unit II (STU II) secure telephones. The
Committee has fully funded continued RDT&E of the STU IIM
(Standard Telephone Unit II Modified).
OTHER SUPPORT EQUIPMENT
TRAILER MOUNTED FIELD KITCHENS
The Army budgeted no funds for the procurement of mobile,
trailer mounted field kitchens. The fiscal year 1981 supplemental
included $2,800,000 for procurement of 200 units. The Army has
long sought a rapidly deployable kitchen capability for field troops.
The Army strongly supported this program when procurement was
first budgeted in fiscal year 1978. But now with only a small
portion of its total requirement procured, the support has dimin-
ished. The Committee believes that this procurement should con-
tinue in order to get maximum value out of a current production
line and to enhance the readiness of our troops. An increase of
$3,500,000 is recommended to procure 200 kitchens. The recommen-
dation will fully fund the kitchen units, including the trailers
which have previously been funded as advance procurement.
LIGHTER, AIR CUSHION VEHICLE (LACV-30)
The Army budgeted no funds for procurement of Lighter, Air
Cushion Vehicle (LACV-30). Twelve LACV-30's have been funded
to date, enough to complete the requirements for fielding one
LACV-30 company. A recent Logistics-Over-The Shore (LOTS)
review supported the requirement for a second LACV-30 company.
The Committee recommends an increase of $27,300,000 for procure-
ment of four LACV-30 craft. The recommendation will support the
initial procurement for the second company.
ARMY GUARD AND RESERVE EQUIPMENT TRANSFER
The Committee recommends a general reduction of $5,200,000 in
this appropriation to support the Army Guard and Reserve Equip-
ment Transfer which is described earlier in this report.
GUARD AND RESERVE READINESS EQUIPMENT
The Committee recommends an increase of $139,500,000 for
equipment to enhance the readiness posture of Army reserve com-
ponents. The explanation for this increase, and the criteria for the
use of the recommended funding are found earlier in the report.
AIRCRAFT PROCUREMENT, NAVY
Appropriations, 1981 ................................................................................ $6,254,307,000
New obligational authority, 1982:
Estimate ................................................................:............................. 9, 244, 500, 000
Recommended .................................................................................... 8,946,800,000
Decrease .............................................................................................. 297,700,000
This appropriation provides funds for the procurement of aircraft
and related supporting equipment and programs. Included are
funds for flight simulators and equipments to modify inservice
aircraft to extend their service life, eliminate safety hazards, and
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improve their operational effectiveness. Additionally, spares and
repair parts and ground support equipment for all end items pro-
cured by this appropriation are included. Funds are also provided
for procurement of material and effort for planned 1983 programs
which must be ordered in 1982 due to leadtime considerations.
PROGRAM RECOMMENDED
The total amount recommended in the bill will provide the fol-
lowing program for fiscal year 1982:
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206
[Amounts in thousands of dollars]
from
Request Change
Recommended request
Quan- Quan- Quan-
tity Amount tity Amount tity Amount
COMBAT AIRCRAFT
A-6E (ATTACK) INTRUDER..... . ........... .........
A-6E (ATTACK) INTRUDER (AP-CY) ..... ...... 12 269,900 12 269,900 ---
EA-6B (ELECTRONIC WARFARE) PROWLER .................... 6 7,300 --- 7,300 ---
EA-6B (ELECTRONIC WARFARE) PROWLER (AP-CY)..........., 229.500 6 229,500 --- ___
AV-8B (V/STOL) .......................... .. ............ 16,800 --- 16,800
AV-BB (V/STOL) (pP-CY)..,,,,,, 12 575,200 12 575,200 --- ---
F-14A (FIGHTER) TOMCAT. --- 49,000 --- 37,000 --- -12,000
F-14A (FIGHTER) TOMCAT )AP-C0) ........................ 30 881,700 30 888,700 --- ___
--- 159,100 --- 180,600 --- +21,500
1000
F-18 (FIGHTER) HORNET ................?,,,,,,,?:: ...... 63 1,a190,10
F- (FIGHTER) HORNET (AP-C0(.,......,,,, 63 1,890,100
--- 236,400 --- 149,200 --- -47,200
CH-53E(HELICOPTER)SUPER STALLION ............14 270,600 14 240,300 -
--CH-53E(HELICOPTER)SUPER STALLION )AP-C0) .............. - 2,500 -30.300
SN-60A (ASN HELD) SEAHAWK ............................. 18 585.600 18 558,600
SH-60B (HSW HELO) SEAHAWK (AP-CY) ..................... --- -27,000
P-3C (PATROL) ORION -12 155,300 --- 118:100 --- -37,200
" .. ' ? ? ? ? ? ? ? ? ? ? ? ? . . ? ? . . ~ 12 380,200 1 2 380,200 ---
P-3C (PATROL) ORION (AP-CY) ........................... - - - 841 300 --- 54.300 ---
E-2C ---
(EARLY WARNING) HAWKEYE .......................... 6 226.300 -30,000
E-2C (EARLY WARNING) HAWKEYE (AP-CY) ................. --- 21500 6 226,300
-- --- 20,500 SH-2F (ASW HELD) SEASPRITE ............---
SH-2F (ASW HELO) SEASPRITE (AP-CY) ............... -- 120,000 -- 120,000 ---
.???? --- 20,000 --- ---
20,000 ---
------------ ------------ ------------
6,240,900 6,078,700 -162,200
BA-2 AIRLIFT AIRCRAFT
UC-128 ................................................ 200 --- 200 C
-2 (AP-CY) MULTIYERR CONTRACT ........................ --- 37.000 37.000 ---
TOTAL, AIRLIFT AIRCRAFT ............................. 37,200 37,200
TRAINER AIRCRAFT
T-34C .............................. ................... 60 53,200 60 53,200
TH-57 ....................:............... ............. 30 15,800 30 15,800
------------
TOTAL, TRAINER AIRCRAFT ............................. 69,000 69,000
OTNER AIRCRAFT
EC-1300 (TACAMO) HERCULES .............................
MODIFICATION OF AIRCRAFT
A-3 SERIES ............................................
A_4 SERIES ............................................
A-6 SERIES ............................................
EA-6 SERIES ..........................................
A-7 SERIES..
..........................................
AV-BA.................................................
F-4 SERIES ..................................... ... .....
RF-4 SERIES ...........................................
F-14A .................................................
F-8 SERIES ............................................
F-5 SERIES ............................................
F-I8 MODS .............................................
H-46 SERIES ...........................................
H-53 SERIES ...........................................
H-1 SERIES ............................................
N-2 SERIES ............................................
N-3 SERIES ............................................
EP-3 SERIES ...........................................
P-3 SERIES ............................................
E-2 3 .... SER.I.ES............................... .........................
E......... ........................
T-34 ........................ ............. .............
T-39 ..................................................
C90 SERIES ............................................
..................................................
C-'A
EC-130 SERIES ............ .................. :.........
.
C-130 SERIES ................... .......................
C-135 .................................................
VARIOUS ................................... ..... .......
POWER PLANT CHANGES ...................................
MISC FLT SAFETY/OPER NECESSITY CHANGES ................
COMMON ECM EQUIPMENT ..................................
COMMON AVIONICS CHANGES ...............................
TOTAL, MODIFICATION OF AIRCRAFT .....................
2 74,900 2 74,900
22,800 --- 22,800
47,700 --- 46,500
116,500 --- 111.200
49,900 --- 49,900
98,900 --- 95,100
15,700 --- 13,900
45,000 --- 34,500
26,000 --- 24,500
107,700 --- 34.500
600 --- 600
1,100 --- 1,100
2,800 --- 2,800
47,400 --- 42.400
6,000 --- 6,000
10,600 --- 10,600
7,800 --- 7,900
2,200 --- 2.200
11,500 --- 11,500
104,500 --- 104,500
28,100 --- 26,500
25,000 --- 24,700
300 --- 300
500 --- 500
200 --- 200
200 --- 200
200 --- 200
37:100 --- 37,100
15,100 --- 15,100
16,900 --- 16:900
19,700 --- 19,700
10,200 --- 10,200
1,200 --- 1.200
96,600 --- 96600
1,300 --- 1,300
____________
-1,200
-5,300
-3,800
-11800
-10:500
-1,500
-73,200
------------
-104,200
SPARES AND REPAIR PARTS ............................... ___ 1,529,400 --- 1,518.400 ---
-11,00
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AIRCRAFT SUPPORT EQUIPMENT AND FACILITIES
COMMON GROUND EQUIPMENT ............................... --- 269,100 --- 269.100
AIRCRAFT INDUSTRIAL FACILITIES ........................ --- 26.400 --- 26.400
WAR CONSUMABLES ....................................... --- 3.100 --- 3,100
OTHER PRODUCTION CHARGES ..... ......................... --- 33.200 --- 33.200
----- _____
TOTAL, AIRCRAFT SUPPORT EQUIPMENT AND FACILITIES.... 331,600 331,800
REDUCTION, OFFSETS/INFLATION ........ .................. --- -11,000
ARMY GUARD AND RESERVE EOUI PMEMT TRANSFER ---
CONSULTANTS, STUDIES, AND ANALYSES .................... --- -5,000
FOREIGN MILITARY SALES ADJUSTMENT ..................... --- ---
-12,900 --- -12,900
-10,400 --- -5,400
-2,000 --- -2,000
COMMITTEE RECOMMENDATIONS
COMBAT AIRCRAFT
AV-8B V/STOL AIRCRAFT (HARRIER)
In conformance with the fiscal year 1982 authorization confer-
ence action, the Committee recommends $37,000,000 for AV-8B
V/STOL advance procurement. This represents a reduction of
$12,000,000 from the budget request.
F-14A FIGHTER AIRCRAFT (TOMCAT)
The Committee recommends $180,600,000 for F-14 advance pro-
curement to support the procurement of 27 F-14A aircraft in fiscal
year 1983. This represents an increase of $21,500,000 to the budget
request.
F/A-18 FIGHTER/ATTACK AIRCRAFT (HORNET)
The Navy requested $236,400,000 for F/A-18 advance procure-
ment funds. The Navy's request anticipated a larger fiscal year
1983 procurement than was included in the President's Five-Year
Defense Plan. The Committee, accordingly, recommends
$189,200,000, which represents a reduction of $47,200,000 from the
budget request.
CH-53E HELICOPTER (SUPER STALLION)
The Navy requested $270,600,000 for the procurement of 14 CH-
53E helicopters. The September budget amendment included a re-
quest of $20,300,000 which was to be used primarily for support
items. This request lacks adequate justification. Additionally, the
budget request does not fully reflect the savings associated with
major productivity improvements that are now being evidenced.
Consequently, the Committee recommends $240,300,000 for 14 CH-
53E helicopters which represents a reduction of $30,300,000 from
the budget request.
SH-60B ANTISUBMARINE WARFARE HELICOPTER (SEAHAWK) .
The Navy requested $585,600,000 for the procurement of 18 SH-
60B LAMPS MARK III helicopters. Since the budget i equest does
not fully reflect major savings that will be realized from contractor
productivity improvements, the Committee recommends
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$558,600,000 for 18 SH-60B helicopters which represents a reduc=
tion of $27,000,000 from the budget request.
The Navy also requested $155.300,000 for SH-60B advance pro-
curement. The Committee in reviewing both the Navy's and the
Army's airframe advance procurement request found that the
Army's advance procurement request for a similar airframe was
substantially lower in unit cost. Accordingly, the Committee recom-
mends $118,100,000 for SH-60B advance procurement which repre-
sents a reduction of $37,200,000 from the budget request.
In conformance with the fiscal year 1982 authorization confer-
ence action, the Committee recommends $54,300,000 for P-3C ad-
vance procurement. This represents a reduction of $30,000,000 from
the budget request.
The Committee is directing that the Department of the Navy
begin a program of phased KC-130 procurements to complete the
squadron at Glenview, Illinois and begin a second squadron which
the Marine Corps has indicated would be placed at Stewart Air-
field. The Committee directs the Marine Corps to work with the Air
National Guard to insure maximum utilization of existing space,
maximum utilization of shared space and to the extent possible
minimum new construction costs which will be required in fiscal
1983 and 1984 at Steward. The Committee believes that the pro-
curement of the KC-130's for the Marine Corps Reserves should be
expedited.
The Navy requested $71,000,000 for the F-14 TF30-P-414A
engine modification program. This request would begin the initial
.phase of a major engine modification program which is designed to
improve long term service life, increase reliability/durability, and
address stall reduction problems. The Navy, as a result of this
modification effort, expected to derive significant savings in life
cycle costs. The program, despite the fact that it is in the initial
phase of procurement, has experienced dramatic cost increases. For
example, the original program cost was estimated to be
$568,000,000. The Navy has since advised the Committee that the
current program costs are now estimated to be $850,000,000. Addi-
tionally, the unit cost of the modification kit has doubled. Original-
ly, the unit cost was estimated to be $300,000 as compared to the
current estimate of $600,000.
The Committee is now quite concerned that the Navy may
embark on this very costly modification program, and then subse-
quently decide that performance requirements for the F-14 will
necessitate the reengining of this aircraft with the F-101 engine.
Consequently, the Committee directs the Navy to delay the initi-
ation of the TF-30-P-414A engine modification program, and pro-
ceed with normal depot level overhaul to include installation of
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long-life parts developed from previous engine modification efforts.
With this additional time, the Navy should develop additional per-
formance and cost analyses to determine a specific course of action
to follow. A reduction if $71,000,000 is recommended.
OTHER MODIFICATION PROGRAMS
The following table reflects additional reductions which totals
$33,200,000, to aircraft modification programs recommended by the
Committee because of either schedule slippages or requirements for
additional tests and evaluations. The Committee also notes that
this account has frequently been used as a source of funds for
reprogrammings, thus indicating that in the Navy's view, some
modification programs are of marginal priority.
A-4 ........................................................................... AN/APR-43 ......................................................................... $1,200,000
A-6 ........................................................................... AN/ARC-182........................................................................ 5,300,000
A-7 ........................................................................... AN/ARC-182........................................................................ 2,700,000
AN/APQ-126 and AN/ASN-90 ............................................ 1,100,000
AV-8A ....................................................................... DECM Pod ............................................................................ 1,800,000
F-4 ........................................................................... AN/APR-43 ......................................................................... 5,900,000
AN/ARC-182 ........................................................................ 4,600,000
RF-4 ......................................................................... AN/APR-43 ......................................................................... 1,500,000
F-14A ....................................................................... AN/ARC-182........................................................................ 2,200,000
N-46 ........................................................................ AN/ALQ-157........................................................................ 5,000,000
S-3 ........................................................................... AN/ARC-182........................................................................ 1,600,000
E-2 ........................................................................... AN/ARC-182........................................................................ 300,000
Total .......................................................................................................................................................... 33,200,000
Of the funding provided for the modification of the RF-4B, $12.4
million shall be used to initiate the procurement of the AN/ALQ-
125 Tactical Electronic Reconnaissance System (TERREC).
SPARES AND REPAIR PARTS
The Navy budgeted 1,529,400,000 for aircraft spares and repair
parts. The following table reflects reductions to the Aircraft Pro-
curement, Navy Appropriation, Aircraft Spares and Repair Parts.
These reductions include the spare and repair parts directly relat-
ed to the aircraft modification programs affected by the Commit-
tee's recommended reductions.
Program: Amount
TF-30-P-414A ............................................................................................... $3,300,000
AN/APR-43 ................................................................................................... 1,600,000
AN/ARC-182 ................................................................................................. 2,900,000
AN/ALQ-157 ................................................................................................. 1,300,000
AN/APQ-126 ................................................................................................. 300,000
DECM Pod ...................................................................................................... . 1,600,000
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ARMY GUARD AND RESERVE EQUIPMENT TRANSFER
The Committee recommends a general reduction of $12,900,000
in this appropriation to support the Army Guard and Reserve
Equipment Transfer which is described earlier in this report.
CONSULTANTS, STUDIES AND ANALYSES
The Committee recommends a reduction of $5,400,000, in addi-
tion to the requested reduction of $5,000,000 for Consultants, Stud-
ies and Analyses, for a total reduction of $9,400,000 for this pur-
pose.
FOREIGN MILITARY SALES ADJUSTMENTS
The Committee recommends a reduction of $2,000,000 for Foreign
Military Sales case adjustments which are explained earlier in the
report.
WEAPONS PROCUREMENT, NAVY
Appropriations, 1981 ................................................................................ $2,766,029,000
New obligational authority, 1982:
Estimate .............................................................................................. . 3,283,800,000
Recommended .................................................................................... 3,196,100,000
Decrease .............................................................................................. 87,700,000
This appropriation finances the procurement of strategic and
tactical missiles, target drones, torpedoes, guns, associated support
equipment and the modification of in-service missiles, torpedoes,
and guns.
PROGRAM RECOMMENDED
The total amount recommended in the bill will provide the fol-
lowing program for fiscal year 1982:
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211
Change from
Request Recommended request
Pro ram Quan- Quan- Quan-
ti tity Amount tity Amount City Amount
BALLISTIC MISSILES
UGH-73A (C-3) POSEIDON ................................ ---
18,700
18,700
UOM-9611 (C-4) TRIDENT I ............................... 72
665,105
665,105
it
UGM-96A (C-4), TRIDENT I (AP-CY) ....................... ---
MODIFICATION OF MISSILES
244,795
244,795
UDM-73A (C-3) POSEIDON MODS ........................... ---
SUPPORT EQUIPMENT AND FACILITIES
10,100
---
10,100
SPARES AND REPAIR PARTS ...............................
2,200
---
2,200
MISSILE INDUSTRIAL FACILITIES .........................
1,900
---
1,900
ASTRONAUTICS ..........................................
16,100
---
16,100
------ ----
------------
STRATEGIC MISSILES
958,900
958,900
8111-109 TOMAHABB
210,900
88
210,900
BGM-109 TOMAHAWK (AP-CY) .............................. ---
TACTICAL MISSILES
14,000
---
14,000
AIM/RIM-7 FIN SPARROW ................................. 905
144,700
124,700
-125
AIM-9L/M SIOEWINDER ................................... . 910
49,500
49,500
AIM-54A/C (PHOENI%) ................................... 72
140,000
140,800
---
AIM- 54A/C (PHOEHI%) (AP-CT) ........................... ---
26.200
21,000
---
AGM-84A HARPOON ....................................... 240
232,700
232,700
---
ADM-840 HARPOON (AP-CY) ............................... ---
18,000
AGM-8BA HARM .......................................... 134
107,600
107:600
R1M-66B STANDARD MR .................................... 600
164,800
164.800
RIM-66C STANDARD MR ................................... 120
61,600
61,600
RIM-678 STANDARD ER ................................... 375
215,000
215,000
OTHER MISSILE SUPPORT ................................. ---
3,800
3,800
LASER MAVERICK ........................................ ---
5,000
5.000
AERIAL TARGETS ........................................ ---
MODIFICATION OF MISSILES
67,900
67,900
AIM/RIM-7E/F SPARROW MOD .............................. ---
1,300
---
1,300
AIM-9 SIDEWINDER MOD .................................. ...
20.500
---
20:500
AIM-54A/C PHOENIX MOD ................................. ---
7:800
---
7,800
AGM-84A HARPOON MOD ..... .............................. ---
4.600
---
4,600
RIM-668 STANDARD MR HOD..................................
2,500
---
2,500
RIM-67A STANDARD ER MOD ............................... ---
SUPPORT EQUIPMENT AND FACILITIES
3,000
---
3,000
SPARES AND REPAIR PARTS ............................... ---
32:200
---
32:200
WEAPONS INDUSTRIAL FACILITIES ......................... ---
8.800
---
8,800
FLEET SATELLITE COMMUNICATIONS ........................ ---
65,000
---
65,000
DEFENSE METEOROLOGICAL SATELLITE PROGRAM .............. ---
2,900
---
2,900
------------
---------- -
TOTAL, OTHER MISSILES ...............................
TORPEDOES AND RELATED EQUIPMENT
1,611'100
1,567,900 -43,200
TORPEDO MK-48 ......................................... 144
1331500
144
120.500 --- -13.000
TORPEDO MK-46 ......................................... 288
65,000
288
57,600 --- -7,400
MK-60 CAPTOR ................. ......................... 400
116,900
400
116,900 --- ---
MOBILE TARGET MK-30 ........................... ........ 7
18,700
7
18,700 --- ---
MK-38 MINI MOBILE TARGET .............................. ...
700
---
700 --- ---
ASROC ................................................. ---
3,900
---
3.900 --- ---
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Change from
Request Recommended request
Quan- Quan- Quan-
Program tity Amount tity Amount tity Amount
MOD OF TORPEDOES AND RELATED EQUIP
NOBILE MINE MK-67 .....................................
---
11,100
---
11,100
TORPEDO MK-46 MODS ....................................
---
113,600
---
95,700
TORPEDO MK-48 MODS ....................................
...
15,100
---
15,100
CAPTOR MOOS ...........................................
...
1.600
---
1,600
S Up PORT EQUIPMENT
TORPEDO SUPPORT EQUIPMENT .............................
..
23,500
---
23,500
SPARES AND REPAIR PARTS ...............................
---
13,000
--
13,000
516,600
478,300
OTHER WEAPONS
GUNS AND SUN MOUNTS
MK IS CLOSE IN WEAPONS SYSTEM .........................
50
134,700
50
134,700
MK-75 76MM SUN MOUNT ..................................
1
4,500
1
4,500
MODIFICATION OF GUNS AND GUN MOUNTS
CIWG MODS ..............
___
6,900
---
6,900
5 /54 GUN MOUNT MODS .......................... .... ...
---
12.400
- -
12,400
3/50 GUN MOUNT MODS. ...
---
4,800
---
4.B00
MK 75 76MM GUN MOUNT MOOS .............................
...
1,500
---
1.500
MODS UNDER 4900,000 ...................................
---
1,100
---
1,100
SUPPORT EQUIPMENT
GUN SUPPORT EQUIPMENT .................................
---
600
---
600
SPARES AND REPAIR PARTS ...............................
---
33,700
---
33,700
REDUCTION, OFFSETS/INFLATION ..........................
-3.000 ---
---
ARMY GUARD AND RESERVE EQUIPMENT TRANSFER .............
-4.600 ---
-4.600
CONSULTANTS, STUDIES. AND ANALYSES....................
-600 ---
-600
FOREIGN MILITARY SALES ADJUSTMENT .....................
-1,000 ---
-1,000
COMMITTEE RECOMMENDATIONS
TACTICAL MISSILES
AIM/RIM-7 F/M SPARROW
The Navy budgeted $144,700,000 for procurement of 905 AIM/
RIM-7 F/M Sparrow missiles. This program has recently experi-
enced technical difficulties, leading to suspension of OPEVAL test-
ing, and direction from the Secretary of the Navy to hold produc-
tion rates to a lower level than previously planned. Since fewer
missiles will be produced in fiscal year 1982, the Committee recom-
mends a reduction of $20,000,000. The recommended total for AIM/
RIM-7 F/M Sparrow is $124,700,000.
AIM-54 A/C PHOENIX
The Navy requested $26,200,000 for advanced procurement of
AIM-54 A/C Phoenix missile. The Committee finds this requests to
be overstated by $5,200,000, and recommends a total of $21,000,000
for AIM-54 A/C Phoenix (Advanced Procurement).
AGM-84A HARPOON
The Navy, contrary to previous practice, budgeted advanced pro-
curement funds for AGM-84A Harpoon in the amount of
$18,000,000. Given a history of no requirement for advanced pro-
curement for this missile, the Committee finds this request lacks
adequate justification, and recommends no funds be provided for
AGM-84A Harpoon (Advanced Procurement).
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The Committee is concerned over the rising costs of the AGM-
84A Harpoon missile, and directs that a "Should Cost" study be
conducted to determine whether economies can be effected in pro-
curement.
TORPEDOES AND RELATED EQUIPMENT
The Navy requested $133,500,000 for MK-48 torpedoes. The Navy
in formulating its budget request included $13,000,000 for accept-
ance test and evaluation for fiscal years 1981 and 1982 MK-48
procurements. In light of the fact that these torpedoes will not be
delivered during this fiscal year, the request is considered prema-
ture. The Committee directs that funds for this purpose should be
requested the fiscal year in which the torpedoes will be delivered.
The Committee, therefore, recommends a total of $120,500,000 for
144 MK-48 torpedoes, which represents a decrease of $13,000,000
from the budget request.
The Committee recommends $57,600,000 for 288 MK-46 Neartip
torpedoes, based on the fact that the budget does not fully reflect
the following:
-Major productivity improvements have been evidenced to date.
-The Navy intends to begin "super" proofing.
-There will be reduced costs associated with the large volume
procurement of both the MK-46 torpedoes and Neartip modifi-
cation kits.
The Committee recommendations represent a decrease of
$7,400,000 from the budget request.
MODIFICATION OF TORPEDOES AND RELATED EQUIPMENT
The Navy requested $113,600,000 for 872 Neartip modification
kits. Since the budget request does not fully reflect the improve-
ments in productivity, use of super-proofing techniques, and sav-
ings associated with large volume procurements, the Committee
recommends $95,700,000 for 872 Neartip modification kits. This
represents a reduction of $17,900,000 from the budget request.
ARMY GUARD AND RESERVE EQUIPMENT TRANSFER
The Committee recommends a general reduction of $4,600,000 in
this appropriation to support the Army Guard and Reserve Equip-
ment Transfer which is described earlier in this report.
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214
CONSULTANTS, STUDIES AND ANALYSES
The Committee recommends a reduction of $600,000 for Consult-
ants, Studies and Analyses.
FOREIGN MILITARY SALES ADJUSTMENTS
The Committee recommends a reduction of $1,000,000 for Foreign
Military Sales case adjustments which are explained earlier in the
report.
SHIPBUILDING AND CONVERSION, NAVY
Appropriations, 1981 ................................................................................ 1 $7,697,100,000
New obligational authority, 1982:
Estimate .............................................................................................. 8,475,300,000
Recommended .................................................................................... 7,748,900,000
Decrease .............................................................................................. 726,400,000
Total recommended in the bill ................................................... 27,822,000,000
1 And in addition $73,100,000 in prior year unobligated balances transferred forward to fiscal
year 1982. .
'Includes $7,748,900,000 in new obligational authority and in addition, $73,100,000 in prior
year unobligated balances to be derived by transfer from "Shipbuilding and Conversion, Navy,
1979/1983" and "Shipbuilding and Conversion, Navy, 1981/1985".
This appropriation finances the construction of new ships, the
purchase and the conversion of existing ships, including hull, me-
chanical, and electrical equipment, electronics, guns, torpedo and
missile launching systems, and communication systems.
PROGRAM RECOMMENDED
The total amount recommended in the bill will provide the fol-
lowing programs for fiscal year 1982:
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Change from
Request Recommended request
Quan- Quan- Quan-
tity Amount tity Amount tity Amount
FLEET BALLISTIC MISSILE SHIPS
TRIDENT (NUCLEAR) (AP-CY) .............................
---
330.700
---
230,700
---
-100.000
------------
------------
------------
330,700
230,700
-100,000
OTHER WARSHIPS
CON AIRCRAFT CARRIER (NUCLEAR) (AP-CY) ................
---
658,000
---
475,000
---
-183,000
SSA-688 CLASS SUBMARINE (NUCLEAR) .....................
2
953,100
2
953.100
---
---
SSN-688 CLASS SUBMARINE (NUCLEAR) (AP-CY) .............
...
213,900
---
213,900
---
NEW JERSEY REACT ......................................
1
237,000
I
237,000
---
---
IOWA REACT ............................................
___
88,000
---
88,000
CV SLEP (AP-CY) .......................................
---
100.800
---
81,000
---
-19x800
CG-47 AEGIS CRUISER ...................................
3
2.925.600
3
2,900.600
---
-17,000
CG-47 AEGIS CRUISER (AP-CY) ...........................
---
20,700
------------
---
20,700
____________
---
------------
TOTAL, OTHER WARSHIPS ...............................
5,197,100
4,977,300
-219,800
AMPHIBIOUS SHIPS
LSD-41 LANDING SHIP DOCK ..............................
301,000
---
+301,000
---
---
-34.000
--------
---- _---- _
TOTAL, AMPHIBIOUS SHIPS .............................
34,000
301.000
4267.000
NINE WARFARE + PATROL SHIPS
FFG GUIDED MISSILE FRIGATE ............................
2
747,900
3
926,100
+1
+178,200
ACM MINE COUNTERMEASURES SHIP............' ............
1
99,700
1
99,700
---
---
------
------------
------------
TOTAL, MINE WARFARE + PATROL SNIPS ..................
847,600
1,025,800
+178,200
AUXILIARIES + CRAFT
T-AO ..................................................
1
200,000
1
200,000
---
A0 -OS SURTASS SHIP ...................................
4
156,500
4
156,500
---
---
TALS (ACO) ............................................
1
54,000
1
___
___
_54,000
AND ...................................................
2
160.500
2
135,500
_25,000
FAST LOGISTICS SHIP )T-AKRX) (LONV) . ..................
8
668.400
8
184,000
---
-484,400
T-AFS LYNESS (CONY) ...................................
2
37,000
2
37,000
---
---
SERVICE CRAFT .........................................
---
42.400
---
33,700
---
-8,700
LANDING CRAFT .............:...........................
---
122.800
---
122,800
---
---
OUTFITTING
73,000
---
73,000
---
---
POST DELIVERY .........................................
..-
122,300
---
117,200
---
-5,100
COST GROWTH/ESCALATION ON PRIOR YEAR PROGRAMS.,...,.,,
---
448,000
---
408,000
---
-40,000
GENERAL REDUCTION
---
---
-216.000
---
-216.000
TRANSFER FROM OTHER ACCOUNTS ..........................
---
---
---
(73,100)
---
(+73,100)
__________
_________
___________
_
TOTAL, AUXILIARIES, CRAFT + PY PROS COSTS...........
2,064,900
1,251,700
-833,200
REDUCTION, OFFSETS/INFLATION ..........................
---
-12,000
---.
-12,000
---
---
ARMY GUARD AND RESERVE EQUIPMENT TRANSFER .............
---
---
---
-11,900
---
-11,900
CONSULTANTS, STUDIES, AND ANALYSES ....................
---
-6.700
TOTAL, SHIPBUILDING AND CONVERSION, NAVY r.....,.....
8,475,300
7,748,900
-726,400
TRANSFER FROM OTHER ACCOUNTS ......................
---
---
---
(73,100)
---
(+73,100)
____________
____________
------------
TOTAL FUNDING AVAILABLE ...........................
8,475,300
7,822,000
-653,300
The Navy requested $330,700,000 for TRIDENT advance procure-
ment. The September budget amendment reflected authorization
action which deleted the full funding request for the tenth TRI-
DENT while adding an additional increment of $100,000,000 for
long lead funding. The Committee has strongly supported full fund-
ing practices in the past and, therefore, recommends that the addi-
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tional increment of $100,000,000 be denied. Accordingly, the Com-
mittee recommends $230,700,000 for TRIDENT advance procure-
ment.
The Navy requested $658,000,000 for CVN Aircraft Carrier ad-
vance procurement. The budget request which included funds for
both nuclear and non-nuclear long lead components was based on
the full funding of CVN Aircraft Carrier in fiscal year 1983. Since
the President's Five Year Defense Plan delayed the request for this
aircraft carrier until fiscal year 1984, the Committee denies the
funding request for non-nuclear components and directs that the
funds for these components be requested in fiscal year 1983. There-
fore, the Committee recommends $475,000,000 for CVN Aircraft
Carrier advance procurement, which represents a reduction of
$183,000,000 from the budget request.
The Navy requested $100,800,000 for CV-SLEP advance procure-
ment. Based upon historical first year obligations, the Committee
recommends $81,000,000 for CV-SLEP advance procurement which
represents a reduction of $19,800,000 from the budget request.
The Navy requested $2,925,600,000 for the AEGIS Cruiser pro-
gram. Included in this request is $17,000,000 for the SPS-49 radar
system. Since the AEGIS SPY-1 radar system does not require the
SPS-49 as a back-up system, the Committee denies the funds re-
quested for this system. The Committee, therefore, recommends
$2,908,600,000, which represents a reduction of $17,000,000 from
the budget request.
The Committee recommends $301,000,000 for an LSD-41. This
represents an increase of $301,000,000 to the budget request. The
budget did not request funds for this program.
In conformance with the fiscal year 1982 authorization confer-
ence action, the Committee denies funding advance procurement
for the LSD-41. This reduction represents a decrease of $34,000,000
from the budget request.
The Navy requested $747,900,000 for the FFG-7 Guided Missile
Frigate program. Funds were included in the budget request to
cover increased costs expected to be incurred in association with
end of production for the FFG-7 class of ships. Since the Presi-
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dent's Five Year Defense Plan includes both FFG-7 and FFG var-
iants, the Committee denies this portion of the request which totals
$45,800,000. Additionally, the Committee recommends $224,000,000
for a third FFG-7. The Committee, therefore, recommends a total
of $926,100,000, which represents an increase of $178,200,000 to the
budget request.
AUXILIARIES, CRAFT AND PRIOR YEAR PROGRAMS
y} TALS (SEABEE BARGE CARRIER)
In conformance with the fiscal year 1982 authorization confer-
ence action, the Committee denies funding for the TALS Seabee
Barge Carrier. This reduction represents a decrease of $54,000,000
from the budget request.
The Navy requested $160,500,000 for Salvage Ships (ARS). In
light of the fact that the budget request does not fully reflect the
option prices set forth in the recently negotiated contract for the
fiscal year 1981 funded salvage ship, the Committee recommends
$135,500,000 for salvage ships. This represents a reduction of
$25,000,000 from the budget request.
The Navy requested $668,400,000 for the T-AKRX program. In
conformance with the fiscal year 1982 authorization conference
funding action, the Committee recommends $184,000,000 for this
program.
This reduced level of authorized funding will, of course, severely
impact the timely attainment of a properly configured rapid logis-
tic ship capability. The Committee is extremely concerned that the
Department's continued delays in following this Committee's direc-
tion not only fails to address the immediate requirements for rapid
sealift, but now delays the overall conversion program.
The Committee, accordingly, directs that the Navy, within the
authorization funding limitation, proceed immediately, with the
acquisition of the remaining two ships; the mini-modification of
four T-AKRX ships (SL-7's), which would provide an interim fast
logistic ship capability, and the partial roll-on/roll-off (RO/RO)
conversion of one ship.
Any remaining funds are to be used for procuring long lead
items future SL-7 conversions to the T-AKRX partial RO/RO con-
figuration.
To reiterate, the Committee is deeply concerned about the con-
tinual delay in obtaining this vitally needed capability, and directs
that the Navy proceed forthwith with the aforementioned direc-
tion.
The Committee's reduction reflects a decrease of $484,400,000
from the budget request. The Committee notes that unobligated
fiscal year 1981 T-AKRX funds remain available and should be
used to attain the Committee's directive.
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The Navy requested $42,400,000 for Service Craft. Included in
this request is $8,700,000 for LCM Class Craft. The Committee
denies that portion of the request relating to the LCM Class of
Craft, in light of the Maritime Prepositioning Ship Program's
schedule slippage. The Committee, therefore, recommends
$33,700,000 for Service Craft, which represents a reduction of
$8,700,000 from the budget request.
The Navy requested $122,300,000 for Post Delivery. In light of
the fact that the budget request does not fully reflect changes in
shipbuilding delivery schedules, the Committee recommends
$117,200,000 which represents a reduction of $5,100,000 from the
budget request.
The Navy requested $448,000,000 for cost growth. Included in the
request was $40,000,000 to cover cost growth for a SSN-688 class
submarine which has yet :to be awarded. The Committee believes
the request is premature and thus recommends a total of
$408,000,000 for cost growth which represents a reduction of
$40,000,000 from the budget request.
The Committee recommends a general reduction of $143,000,000
in the fiscal year 1982 request for program managers growth re-
serves which is one of the primary elements comprising individual
shipbuilding line item budget requests. The Committee's reduction
is based upon both historical obligation experience and the Navy's
current estimated obligation rate. The Committee directs that the
Navy closely reexamine its request for growth reserves and allo-
cate this redubtion to budget lines where past experience has
shown these requests to be overstated.
The Committee also recommends a general reduction of
$73,100,000 for auxiliaries, craft, and prior year program costs.
Language has been provided in the bill transferring $58,000,000 in
fiscal year 1981 unobligated balances in the Maritime Pre-position-
ing Ship Program, and $15,100,000 in fiscal year 1979 unobligated
balances in the TRIDENT program to fiscal year 1982 to offset the
reduction.
ARMY GUARD AND RESERVE EQUIPMENT TRANSFER
The Committee recommends a general reduction of $11,900,000
in this appropriation to support the Army Guard and Reserve
Equipment Transfer which is described earlier in this report.
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CONSULTANTS, STUDIES AND ANALYSES
The Committee recommends a reduction of $6,700,000 in addition
to the requested reduction of $7,000,000 for Consultants, Studies
and Analyses for a total reduction of $13,700,000 for this purpose.
PROPOSED CHANGES TO THE SHIPBUILDING AND CONVERSION, NAVY
(SCN) APPROPRIATION
The budget request proposes a lump-sum appropriation for the
SCN appropriation in lieu of the individual program breakout as
provided in prior years. Also, the budget proposes to extend the
availability of this appropriation from five to seven years. The
Committee again denies both of these requests.
PAYMENT OF INSURANCE CLAIMS
The fiscal year 1981 Supplemental Appropriations Bill included
language prohibiting the payment of insurance premiums that
would cover defective workmanship, defective material, and mis-
management, delay and disruption. The Committee has since been
advised by the General Accounting Office that the impact of the
Act's prohibition is somewhat limited. Consequently, the Commit-
tee has included new language in the bill.
OTHER PROCUREMENT, NAVY
Appropriations, 1981 ................................................................................ $3,037,657,000
New obligational authority, 1982:
Estimate .............................................................................................. 3,822,000,000
Recommended .................................................................................... 3,692,177,000
Decrease .............................................................................................. 129,823,000
This appropriation finances the procurement of major equipment
and weapons other than ships, aircraft, missiles, torpedoes, and
guns. Such equipments range from the latest electronic sensors for
updating our naval forces to trucks, training equipment, and spare
parts.
PROGRAM RECOMMENDED
The total amount recommended in the bill will provide the fol-
lowing programs for fiscal year 1982:
Committee
recommendation
Ship support equipment ..................................................................... $697,754,000
Communications and electronics equipment ....................................... 1,190,266,000
Aviation support equipment ................................................................ 585,136,000
Ordance support equipment ................................................................ 855,172,000
Civil engineering support equipment ................................................... 181,136,000
Supply support equipment .................................................................. 74,971,000
Personnel/command support equipment ............................................. 244,565,000
Reduction, offsets/inflation ................................................................ -4,000,000
Consultants, studies, and analyses ..................................................... -3,000,000
First destination transportation ............................................................................................
Audio-visual equipment .........................................................................................................
Army Guard and Reserve equipment transfer .......................................................................
$695,854,000 -$1,900,000
1,210,266,000 +20,000,000
547,036,000 -38,100,000
850,172,000 -5,000,000
116,936,000 -64,200,000
74,971,000 ................................
216,242,000 -28,323,000
-4,000,000 ................................
-4,300,000 -1,300,000
-3,800,000 -3,800,000
-1,800,000 -1,800,000
-5,400,000 -5,400,000
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220
COMMITTEE RECOMMENDATIONS
SHIP SUPPORT EQUIPMENT
ELECTRICALLY SUSPENDED GYRO NAVIGATION
The Committee recommends a reduction of $1,900,000 from the
$16,565,000 budgeted for the electrically suspended gyro navigation
system. The reduction is based on contract savings. The total rec-
ommended for this program is $14,665,000 for procurement of 9
systems.
COMMUNICATIONS AND ELECTRONICS EQUIPMENT
ELECTRONIC WARFARE EQUIPMENT-NAVY RESERVE
The Committee recommends an increase of $20,000,000 for pro-
curement of electronic warfare equipment for the Navy Reserve.
This recommendation is discussed earlier in this report.
AVIATION SUPPORT EQUIPMENT
AN/SSQ-47 SONOBUOY
The Navy budgeted $3,237,000 for procurement of 4,900 AN/
SSQ-47 Sonobuoys. In previous years the limited procurement
quantities have necessitated opening and closing the production
line each year, resulting in production inefficiencies and unneces-
sarily high costs. For an additional $4,900,000 in fiscal year 1982,
the Navy can acquire an additional 9,578 sonobuoys and can com-
plete its total procurement requirement for this sonobuoy. Signifi-
cant savings will occur in future years. For this reason, the Com-
mittee recommends an increase of $4,900,000. The total recom-
mended is $8,137,000.
CONTRACT SAVINGS
The Committee recommends the following reductions based on
contract savings:
AN/SSQ-57 sonobuoy ........................................................................
$2,686,000
$2,186,000
-$500,000
AN/SSQ-77 sonobuoy ........................................................................
33,255,000
20,055,000
-13,200,000
General purpose bombs ......................................................................
36,864,000
30,864,000
-6,000,000
Practice bombs ..................................................................................
30,664,000
27,364,000
-3,300,000
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The Navy budgeted $40,067,000 for LAMPS Mark III shipboard
equipment to initiate the backfitting of 2 destroyers and 2 FFG-7
class frigates, thus making these ships LAMPS Mark III capable.
The Committee has expressed concern with the dramatic increases
in the overall cost of the LAMPS Mark III program. In particular,
the cost of backfitting each of the 68 ships with the LAMPS Mark
III system has risen over 125 percent, and at the same time the
cost to procure and install the shipboard equipment has nearly
doubled. Consequently, the Committee recommends a reduction of
$20,000,000, and directs that the Navy cancel the backfitting of 31
FFG-7's, 4 DD-993's, and 2 CG-47's and the procurement of
LAMPS Mark III shipboard equipment for these ships.
ORDNANCE SUPPORT EQUIPMENT
5"/54 GUN AMMUNITION
The Committee recommends a reduction of $5,000,000 from the
$62,669,000 budgeted for 5"/54 gun ammunition, based on contract
savings. The total recommended for this line is $57,669,000.
CIVIL ENGINEERING AND SUPPORT EQUIPMENT
FLEET HOSPITAL PROGRAM
As discussed earlier in this report under Medical Operations, the
Committee recommends denial of the $87,800,000 budgeted for the
Fleet Hospital program. The recommendation is made in the belief
that a more consistent and unified program needs to be developed
by the Office of the Secretary of Defense which addresses the needs
of all services for field hospitals in the communications zone. Re-
ductions totalling $64,200,000 from the Civil Engineering and Sup-
port Equipment budget activity are as follows:
49
Passenger vehicles ...............................................................................................................................
18
-$2,200,000
Trucks ..................................................................................................................................................
130
-1,600,000
Trailers .................................................................................................................................................
54
-500,000
Lighting and power generating equipment ...........................................................................................
33
-13,200,000
Fire trucks ...........................................................................................................................................
6
-400,000
Combat construction equipment .............................................................................................................................
-45,800,000
Telephone equipment ............................................................................................................................
6
-500,000
COMMAND SUPPORT EQUIPMENT
MEDICAL SUPPORT EQUIPMENT
The Committee recommends a reduction of $23,600,000 from the
$48,959,000 budgeted for medical support equipment. The reduction
is for equipment designated for the Fleet Hospital program. The
reasons for the reduction are explained elsewhere in this report.
The total recommended for medical support equipment is
$25,359,000.
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INTELLIGENCE SUPPORT EQUIPMENT
The Committee recommends a reduction of $1,400,000 from the
$17,687,000 budgeted for intelligence support equipment. The rea-
sons for this reduction are included in the classified annex to this
report.
PRODUCTIVITY ENHANCEMENT
The Navy budgeted $3,323,000 for productivity enhancement
equipment. A recent report by the General Accounting Office, ("In-
centive Programs to Improve Productivity Through Capital Invest-
ments Can Work"), concluded that the Navy had given insufficient
management attention to this program and was failing to adhere to
Congressional guidelines concerning the use of these funds. The
Committee recommends denial of the. $3,323,000 budgeted for this
program. The Committee expects the Navy to support any addition-
al funding for this program with conclusive evidence that it is in
compliance with Congressional direction.
ARMY GUARD AND RESERVE EQUIPMENT TRANSFER
The Committee recommends a general reduction of $5,400,000 in
this appropriation to support the Army Guard and Reserve Equip-
ment Transfer which is described earlier in this report.
. CONSULTANTS, STUDIES, AND ANALYSES
The September budget amendment included a general reduction
of $3,000,000 for consultants, studies, and analyses. The Committee
recommends a total reduction of $4,300,000 for this purpose, an
additional reduction of $1,300,000 below the budget.
FIRST DESTINATION TRANSPORTATION
The Committee recommends a reduction of $3,800,000 which the
Navy budgeted for first destination transportation for ammunition.
Funding for this purpose should be budgeted in operation and
maintenance, and these requirements can be performed within
available funds in fiscal year 1982.
AUDIO VISUAL EQUIPMENT
The Committee recommends a reduction of $1,800,000 for audio
visual equipment for reasons explained earlier in this report.
PROCUREMENT, MARINE CORPS
Appropriations, 1981 ............................................................................................ $506,013,000
New obligational authority, 1982:
Estimate .........................................................................................................1,734,916,000
Recommended ................................................................................................1,682,556,000
Decrease .......................................................................................................... 52,360,000
This appropriation provides the Marine Corps with funds for the
procurement, delivery, and modification of missiles, armament, am-
munition, communication equipment, tracked and wheeled vehi-
cles, and various support equipment.
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PROGRAM RECOMMENDED
The total amount recommended in the bill provide the following
programs for fiscal year 1982:
Budget estimate Committee
recommendation
Ammunition .......................................................................................................... $326,147,000
Weapons and Combat Vehicles ............................................................................. 417,718,000
Guided Missiles .................................................................................................... 216,917,000
Communications and Electronics .......................................................................... 369,438,000
Support Vehicles .......................... ....... ......... ............ ................. ....... ....:............... 148,595,000
Engineering and Other Equipment ........................................................................ 258,085,000
General Reduction, Offsets/Inflation ..................................................................... -1,984,000
Army Guard and Reserve Equipment Transfer ..................................................................................
Total ................................................................................................................ 1,734,916,000
$325,147,000 -$1,000,000
417,718,000 ..........................
208,417,000 -8,500,000
328,978,000 -40,460,000
148,595,000 ..........................
258,085,000 ..........................
-1,984,000 ..........................
-2,400,000 -2,400,000
1,682,556,000 -52,360,000
COMMITTEE RECOMMENDATIONS
AMMUNITION
FIRST DESTINATION TRANSPORTATION
The Marine Corps budgeted $500,000 for first destination trans-
portation. This is improperly funded in the procurement appropri-
ation and the Committee recommends a reduction of $500,000.
ITEMS LESS THAN $900,000
The Marine Corps budgeted $500,000 in this line for procurement
of electronic time fuze setters. Since the electronic time fuze pro-
gram has been cancelled, the Committee recommends a reduction
of $500,000.
GENERAL REDUCTION
The Marine Corps has cancelled its participation in the Cutlass
Spirit program, and the September budget amendment deleted the
$2,916,000 budgeted in fiscal year 1982 for this purpose. However,
$8,500,000 was provided in fiscal year 1981 for this program. The
Committee, therefore, recommends a general reduction of
$8,500,000 in budget authority, which is offset by the use of the
unobligated funds from fiscal year 1981.
POSITION LOCATION AND REPORTING SYSTEM
The Marine Corps budgeted $40,460,000 for initial procurement
of the Position Location Reporting System (PLRS). The Committee
recommends denial of this funding for reasons contained in the
Other Procurement, Army section of this report.
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ARMY GUARD AND RESERVE EQUIPMENT TRANSFER
The Committee recommends a general reduction of $2,400,000 to
support the Army Guard and Reserve Equipment Transfer which is
discussed earlier in this report.
AIRCRAFT PROCUREMENT, AIR FORCE
Appropriations, 1981 ................................................................................ $10,427,428,000
New obligational authority, 1982:
Estimate .............................................................................................. 13,843,898,000
Recommended .................................................................................... 13,957,598,000
Increase ............................................................................................... + 113,700,000
This appropriation provides for procurement of aircraft, and for
modification of inservice aircraft to improve safety and enhance
operational effectiveness. It also provides for investment spares and
repair parts including spare engines, replenishment spares, and
other support equipment to include aerospace ground equipment
and industrial facilities. In addition, funds are provided for the
procurement of flight training simulators to increase combat readi-
ness and to provide for more economical training.
The Committee has approved all authorized requests for a wide
variety of RDT & E and procurement upgrades to tactical aircraft in
areas such as communications, electronic warfare, positioning sys-
tems, etc. However, the Committee notes that the price tag for
these systems is extremely high, and thus the Committee remains
open minded about the 'proper mix" for the future funding of
these many upgrades.
PROGRAM RECOMMENDED
The total amount recommended in the bill will provide the fol-
lowing program for fiscal year 1982:
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Change from
Request Recommended request
Quan- Quan- Quan-
tity Amount tity Amount tity Amount
STRATEGIC OFFENSIVE
LONG RANGE COMBAT AIRCRAFT. .. .. .......................
1,674.000
---
1,574:000
LONG RANGE COMBAT AIRCRAFT (AP-L7) ....................
227:000
---
227000
TACTICAL FORCES
A7K ..................................................
114,700
46
4114,700
A-30 ......................... ............ .. ...........
249:700
209:700
-40,000
A-10 (AP-CT) ..........................................
20000
20000
F-5F ..................................................
16:700
16'700
F-SF CAP-CT) ............ .......... .. ..................
6,300
6,300
F-15A/B/C/D.................. .......... .. .............
1,091:800
980'200
-6
-111,600
F-ISA/B/C/D (AP-CT) .............. ....~..............
100,400
100,400
F-16A/B MULTIYEAR CONTRACT ..................... .......
1,311,600
1'270,800
-60,800
F-16A/B (AP-CY) MULTIYEAR CONTRACT ....................
546,800
546,800
OTHER COMBAT AIRCRAFT
KC-10A (ATCA) .........................................
---
---
4
220,200
+4
4220,200
MC-130X ...............................................
---
---
4
27,000
+4
427,000
E-3A ..................................................
2
170,000
2
170,000
E-3A (AP-CS) ........................ ... .......... .....
---
100,000
---
100,000
------------
____________
________
5.574:300
5.583,800
+49,500
TACTICAL AIRLIFT
C-1300 ........................ ........................
B
109,500
48
1309.500
WIDE BODIED CARGO AIRLIFT .............................
-
50:000
---
+50:000
------------
------------
159,500
A159,500
TRAINER AIRCRAFT
OTHER AIRCRAFT
UH-60A ................................................
6
33,000
6
33,000
TR-IA ....................................... ..........
TR-
GA (AP-CT)
d
104:100
6
3
04,100
.......................... .. .............
--
9,600
---
9,600
____________
------------
TOTAL, OTHER AIRCRAFT ...............................
146,700
146,700
STRATEGIC AIRCRAFT
8-52 ..................................................
438'400
---
500'500
FR-111 ................................................
2,600
---
2'600
F-106 .................................................
35,900
---
20.300
TACTICAL AIRCRAFT
27.600
---
27,600
52.800
---
52,800
F/RF-4 ................................................
118,400
---
125,500
F-5 . ................................................
3,700
---
3,700
F-IS ..................................................
43,900
---
43,900
F-I6 ..................................................
58,100
---
58,100
F-Ill .................................................
39,500
---
39,500
EF-ill ................................................
252,700
---
252,700
AIRLIFT AIRCRAFT
C-5 ....................
___
215:600
---
215.600
C-141 ..................
'--
72600
72.600
TRAINER AIRCRAFT
T-38 ..................................................
---
8.000.
---
8.000
OTHER AIRCRAFT
L-130 .................................................
C-135
96,300
---
96.300
.................................................
E-3
354,000
---
354.000
...................................................
26,800
---
26.800
H-3 AIRCRAFT SYSTEM ...................................
HM-53 AIRCRAFT.........
OV-10 AIRCRAFT SYSTEM..
OTH
108,900
3,500
9.300
3,600
---
---
---
---
100,900
3,500
9,300
3.600
ER AIRCRAFT ........................................
40,100
---
40.100
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Change from
Request Recommended request
Quan- , Quan- Quan-
Program tity Amount tity Amount tity Amount
OTHER MODIFICATIONS
THRUST COMPUTING ......................................
---
---
---
9,000
---
+9,000
CLASSIFIED PROJECTS ...................................
---
49,400
---
49,400
---
---
CIVIL RESERVE AIRLIFT FLEET (CRAF)
CIVIL RESERVE AIRLIFT FLEET (CRAF) ....................
---
47,700
---
47,700
47,700
---
---
________-__
_
-----
________
TOTAL, MODIFICATION OF 1N-SERVICE AIRCRAFT..........
2,109. 400
2,172,000
162,600
SPARES AMD REPAIR PARTS ...............................
---
4,002.300
---
3.896,800
---
-105,700
v..........a
...v........
............
AIRCRAFT SUPPORT EDUIPNEMT AND FACILITIES
COMMON GROUND EQUIPMENT ............... .............
---
404,200
---
404,200
---
INDUSTRIAL FACILITIES .................................
---
93,400
---
93,400
---
-"
BAR CONSUMABLES .......................................
---
83,900
---
83,900
---
---
OTHER PRODUCTION CHARGES ....... .......................
---
1,128,298
---
1,117,398
---
-10,900
00
NATO AEB/C ............................................
___
358,200
---
344,300
---
_13.9
--------- --
------------
------------
TOTAL, AIRCRAFT SUPPORT EQUIPMENT AND FACILITIES....
2,
a~2,043,198~
4,800
REDUCTION, OFFSETS/INFLATION ..........................
---
-17.000
---
--
ARMY GUARD AND RESERVE EQUIPMENT TRANSFER .............
---
-19,400
---
-19.400
FOREIGN MILITARY SALES ADJUSTMENT .....................
---
-8,000
---
-8.000
TOTAL, AIRCRAFT PROCUREMENT. AIR FORCE ..............
... 843,898v
vi13,9
61~vv590
.r.eO613,700
COMMITTEE RECOMMENDATIONS
COMBAT AIRCRAFT
STRATEGIC OFFENSIVE AIRCRAFT
LONG RANGE COMBAT AIRCRAFT
A total of $2,423,000,000 was requested for the B-1B strategic
bomber. This request is divided into four categories. The following
table outlines the request in each category, and the Committee's
recommendations for each.
Fiscal year 1982 Committee
r2 an9P
Weapon System .............................................................................................. $1,674,000,000 $1,574,000,000 -$100,000,000
Advance Procurement ..................................................................................... 227,000,000 227,000,000 ............................
Initial Spares ................................................................................................. 51,000,000 0 -51,000,000
RDT&E ............................................................................................................ 471,000,000 291,900,000 -179,100,000
Total ................................................................................................. 2,423,000,000 2,092,900,000 -330,100,000
The B-lB strategic bomber is projected to become the replace-
ment for the B-52 as a penetrating bomber for the airborne compo-
nent of our strategic nuclear deterrent. It is also planned that this
aircraft will have the capability to launch Air Launched Cruise
Missiles (ALCM's). The Air Force testimony stated that their inven-
tory objective for the B-1B is 100 aircraft.
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The $1,574,000,000 approved for the "weapon system" category is
to initiate procurement of the first two B-1B's. Items to be pro-
cured with these funds include tooling, aircraft parts, vendor piece-
part manufacturing, purchase of rivets and fasteners, etc. In con-
formance with the fiscal year 1982 authorization conference action,
the Committee reduced the request for the "weapon system" cate-
gory by $100,000,000.
The $227,000,000 requested for advanced procurement consists of
raw materials, castings and forgings, major subcontracts for struc-
tures and systems and vendor parts. The Committee has approved
the full amount requested for advanced buys.
$51,000,000 was requested for initial spares. The Committee con-
curs with the authorization conference which felt that this request
was premature, and no funds are included for initial spares for this
aircraft. A reduction of $51,000,000 was recommended in the
"spares and repair parts" line.
Testimony indicated that an additional $2.4 billion of Research,
Development, Testing & Evaluation (RDT&E) remains to be done
on the B-1B. Comments on the request for $471,000,000 for RDT&E
in fiscal year 1982 appear in the RDT&E section of this report.
Details on the Committee's recommendation for the Advanced
Technology Bomber (ATB) appear in a classified letter to the Secre-
tary of Defense.
A total of $1,801,000,000 is approved for procurement of the B-lB
bomber. This figure includes $1,574,000,000 for Weapon System and
$227,000,000 for Advance Procurement.
The A-7K is a two-seat aircraft used by the Air National Guard
for training. The Committee recommends an increase of
$114,700,000 over the budget for six A-7K aircraft, if these funds
are authorized by law. The Committee also recommends an in-
crease of $7,000,000 in the spares and repair parts account, for
initial spares for these six aircraft, if the $7,000,000 is authorized
by law.
A-10 ATTACK AIRCRAFT
The A-10 is a twin turbofan aircraft designed for the close air
support mission. The revised Air Force budget requested
$249,700,000 for 20 A-10 aircraft in fiscal year 1982 and advanced
procurement of $20,000,000 for 20 additional A-10 aircraft to be
funded in fiscal year 1983.
The Committee recommends a total of $229,700,000 for the A-10
program. These funds are to be used for the procurement of 20
aircraft in fiscal year 1982 and advance procurement for 20 aircraft
in fiscal year 1983. The reduction of $40,000,000 will still provide
sufficient funds for the restructured production rate of 20 aircraft
in fiscal year 1982 and 20 aircraft in fiscal year 1983.
The reduction consists of savings realized through the decision to
produce one-seat A-10's rather than 14 two-seat A-10's and the fact
that excess funds are available from the advance procurement
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funds provided in the fiscal year 1981 Defense Appropriation Bill.
The Committee recommends that the Air Force allocate these
excess funds to meet its objective of 20 aircraft in fiscal year.1982
and 20 aircraft in fiscal year 1983. After negotiations are complet-
ed, if additional appropriations are required, a request for repro-
gramming should be submitted.
F-15 ATTACK FIGHTER
The F-15 is a twin engine, single crew, fixed swept wing aircraft
designed specifically for high maneuverability in air-to-air combat.
The budget request included $1,091,800,000 for 42 F-15 fighter
aircraft, and $100,400,000 for advance procurement of 30 additional
F-15's in fiscal year 1983. In conformance with the fiscal year 1982
authorization conference action, the Committee recommends
$980,200,000, a decrease of $111,600,000 for 36 F-15's and $3,000,000
for initial spares for these aircraft. Since the Air Force plans on
revising the production rate of the F-15 downward from 42 in fiscal
year 1982 to 30 aircraft in fiscal year 1983, the adjustment to 36
aircraft in fiscal year 1982 will not have a major impact on the
production plans for this aircraft. The Committee has fully funded
the request of $100,400,000 for advance procurement of 30 F-15's in
fiscal year 1983.
F-16 MULTIMISSION FIGHTER
The F-16 Multimission Fighter is a single seat, fixed wing, high
performance fighter aircraft with excellent close-in air-to-air
combat capabilities and effective air-to-surface capability.
The budget request included $1,878,400,000 for procurment of F-
16 aircraft under a multiyear contract, at a rate of 120 aircraft per
year for four years. The fiscal year 1982 request includes
$1,331,600,000 for 120 F-16 aircraft and $546,800,000 for advance
procurement. The Committee recommends a total of $1,817,600,000,.
a reduction of $60,800,000 from the budget request but consistent
with the authorization conference level for fiscal year 1982. The
Committee's recommendation will not require any changes in this
program as proposed in the budget request. Both the authorizing
legislation and the Committee recommendation assume that the
$60,800,000 reduction will be completely offset by the denial of a
proposed fiscal year 1982 rescission of funds included in the fiscal
year 1981 supplemental for the F-16. Of the total buy of 120 F-16
aircraft, the Committee directs that 20 are to be transferred to Air
National Guard.
Further comments on multiyear contracting appear under a sep-
arate heading by that title earlier in this report.
OTHER COMBAT AIRCRAFT
The KC-10A advanced tanker/cargo aircraft is a DC-10 modified
to provide long range air refueling capability and airlift support.
The Administration's March Amendment to the defense budget
included a request of $437,000,000 for eight KC-10A aircraft. How-
ever, the September Amendment deleted these funds. Considering
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the capability and versatility of these aircraft, and their potential
important role in the Rapid Deployment Force, the Committee
recommends an increase of $220,200,000 for four KC-10A aircraft
and $17,200,000 for initial spares, the authorized amounts.
The MC-130H is a specially configured C-130H transport aircraft
designed to support Air Force special missions. Funds for these
aircraft were included in the Administration's first revision of the
defense budget, but were excluded from the most recent revision.
Given the importance of this program, the Committee recommends
an increase of $27,000,000 to the budget request for four MC-130H
aircraft.
AIRLIFT AIRCRAFT
TACTICAL AIRLIFT
C-130H
The C-130H is a medium size tactical transport aircraft which
has a number of missions including deployment and redeployment
of troops and/or supplies within and between command areas in a
theater of operation, aeromedical evauation, air logistic support
and augmentation of strategic airlift requirements. No funds were
requested for C-130H aircraft. The Committee recommends an in-
crease of $109,500,000 for eight C-130H aircraft and $4,100,000 for
initial spares for these aircraft.
MARINE CORPS RESERVE TANKER REQUIREMENT
The Marine Corps Reserve has documented a requirement for
two KC-130 tanker squadrons (a total of 28 aircraft) but currently
has only one-half of a squardron (seven aircraft) at Glenview, Illi-
nois, as noted, the Committee has funded eight additional C-130
aircraft above the budget request and is specifically directing that
four of the eight be built as KC-130 tankers and delivered to the
Marine Corps Reserve. Additional comments on this matter appear
in the Aircraft Procurement, Navy section of this report.
WIDE-BODIED CARGO AIRLIFT AIRCRAFT
The Committee included no funds in the RDT&E account for the
CX aircraft, which the Air Force had planned on being a future
strategic wide-bodied airlift aircraft. The authorizing legislation
includes $50,000,000 for procurement of wide-bodied aircraft. Con-
sidering the present shortfall of airlift capability for the Rapid
Deployment Force, the Committee has included $50,000,000 for the
immediate procurement of the best existing wide-bodied aircraft for
the strategic airlift mission. Examples of aircraft in this category
include C5's, KC-10's, 747's and other wide-bodied aircraft.
The Committee believes that the acquisition of airlift aircraft is
an urgent requirement and that more aircraft will be placed in the
force earlier through this procedure. In view of the position of
Congress this year and in previous years, the Committee expects
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the Air Force to proceed immediately with the procurement of
wide-bodied cargo aircraft and to abandon the C-X program as a
substitute. Enough studies have been done. Too much time has
already been wasted. Further delay on the part of the Air Force in
this important area is unacceptable.
MODIFICATION OF IN-SERVICE AIRCRAFT
B-52D RETIREMENT
The September amendment included a recommendation to begin
retirement of B-52D aircraft. The amendment included a recom-
mendation to delete $62,100,000 from the B52-D modification pro-
gram. Considering that these aircraft have recently been reskinned
and recently received modifications to update their inertial guid-
ance systems, and considering the capability of these aircraft to
deliver significant numbers of conventional bombs, the Committee
believes that the retirement of these aircraft is imprudent and
recommends an increase of $62,100,000 to keep them in the active
force. An increase of $18,900,000 is also included in the "operation
and maintenance" account, for the continued operation of these
aircraft.
F-106 MODIFICATIONS
A total of $35,600,000 was requested for modification of the F-106
aircraft. In conformance with the action taken by the authorization
conference, the Committee recommends a reduction of $15,300,000
for this program. A total of $20,300,000 is approved for this pro-
gram.
F/B F-4 MODIFICATION
A total of $118,400,000 was requested for modification of F/B F-4
aircraft. The Committee recommends an increase of $7,100,000 for
procurement of smoke modification kits for F/B F-4 aircraft.
KC-135 REENGINING
In order to meet its global aerial refueling responsibilities, which
have doubled and continue to grow since the introduction of the
Boeing KC-135 aerial tanker, the Air Force intends to retain its 23-
year-old KC-135 fleet beyond the year 2000. Powered by a first
generation turbojet engine the KC-135 is performance limited, fuel
inefficient, unreliable, and difficult to maintain. Currently, the 645
KC-135's utilize one-eighth of all Air Force fuel consumed and
their J-57 engines have been reworked and overhauled so many
times that they can no longer be economically repaired. The pri-
mary performance limitation is that a J-57 powered KC-135 is
restricted below its maximum designed takeoff gross weight about
80 percent of the time. This limitation greatly effects the aircraft's
range, endurance, and altitude capabilities which further impacts
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the amount of fuel which it can carry and offload to receiver
aircraft. The performance deficiencies and high maintenance costs
relate to the J-57 and not to the airframe, which in itself poses
little limitation to continued use.
The Air Force is currently pursuing at least four separate pro-
grams that in one way or another, are all designed to address these
problems.
The first, called Pacer Grade, involves "extensive component
replacement in order to halt any further decline in the J-57's
already degraded performance and to improve its reliability. This
modification would insure that the engine could be maintained
through the turn of the century. Pacer Grade would improve J-57
reliability and ease of maintenance, but it would only improve fuel
efficiency by 2 percent and aircraft performance not at all. This
option is estimated to cost $1.4 million per aircraft.
The second engine option involves the replacement of the KC-
135's present J-57's with the CFM-56, a high technology, high
bypass ratio turbofan engine. The CFM-56 would provide the air-
craft with a substantial increase in performance and improved fuel
efficiency. For a mission over 2,500 nautical miles radius the CFM-
56 powered tanker could offload 67 percent more fuel than its J-57
counterpart, while incorporating improved takeoff performance as
well as a 25 percent reduction in fuel consumption. Each CFM-56
powered aircraft would save about 180,000 gallons of fuel a year.
The third and newest option is to re-engine the KC-135 with
commercially proven JT-3D turbofan engines. This reliable and
well-matured civilian engine provides the Air Force with a cost-
effective alternative to re-engining the entire fleet with the expen-
sive CFM-56 and/or performing Pacer Grade modifications. This
option recently came to light as a result of the large number of JT-
3D powered Boeing 707 airliners being forced into retirement by
Federal Aviation Administration and Environmental Protection
Agency stringent noise and smoke requirements. Air Force use of
the JT-3D is exempt from these Federal environmental regulatory
requirements and in fact, the JT-3D is more environmentally ac-
ceptable than the present J-57. The JT-3D is similar to the Air
Force's well-proven TF-33 turbofan engines with about 80 percent
of its parts already Federal stock listed. Air Force evaluation. of the
JT-3D indicated that the engine would allow continued use of the
KC-135 through the turn of the century. Air Force officials feel
that at least 200 Boeing 707 JT-3D powered aircraft-enough to re-
engine about one-third of the KC-135's-could be obtained out of
the estimated 400 due to be retired worldwide by 1985.
The fourth option is to continue to relieve the mission of KC-135
and at the same time expand the capability to support growing
TAC or Rapid Deployment Force requirements by continuing the
purchase of the KC-10-most modern of the aerial tankers. While
this portion of the effort received less than enthusiastic support
from the Air Force, the Committee continues to believe it repre-
sents a cost effective investment that will provide a unique tanker/
cargo capability well into the 21st Century.
The Committee also supports both of the efforts to re-engine.
Rapidly increasing tanker requirements, plus the high cost of fuel
make these re-engining efforts essential. In view of the ability to
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re-engine with the JT-3D this year, the Committee recommends
that the Air Force not pursue the Pacer Grade effort.
The JT-3D alternative is seen in some quarters as a threat to the
CFM-56 re-engining program although it need not be because the
number of 707 JT-3D powered aircraft available is not adquate to
re-engine the entire fleet even if the Air Force could obtain nearly
all of the 400 707's due to be retired worldwide by 1985.
The re-engining with JT-3D's could be done now while the KC-
135's are undergoing a "reskinning". This will help to reduce costs
and reduce the period of time that aircraft are not available.
The Committee believes that the Air Force should continue to
pursue the JT-3D effort as well as the CFM-56. Accordingly, the
Committee has set aside in the bill $103.5 million from Aircraft
Procurement, Air Force for KC-135 re-engining. All or a portion of
this amount can come from within the funds requested for KC-135
re-engining. This amount should purchase 40 to 46 kits (used 707
aircraft). An addition of $46.8 million to the operation and mainte-
nance appropriation is made to install up to 36 kits during FY
1982. This equates to 6 per month for the last half of FY 1982
which is .the rate at which the KC-135 is being reskinned. Installa-
tion of some JT-3D engines now will help to insure that eventually
all 625 KC-135's get re-engined. Without this approach many of the
Reserve Component aircraft would not receive replacement engines
until well into the 1990's, if ever.
The Air Force should vigorously pursue the development of the
CFM-56 and commence re-engining the KC-135 with the CFM-56
when that engine is available.
To that end the Air Force will promptly submit to the Commit-
tee an appropriate funding schedule covering the JT-3D re-engin-
ing plan and the long range plan for re-engining with the CFM-56.
THRUST COMPUTING
The Air Force has recently experienced major problems in at-
tempting to deal with the thrust management problem on its high-
est technology aircraft engine (the F-100) installed in F-15 aircraft.
Engine durability has been much lower than expected. Unfortu-
nately, the Air Force has no simple way to measure the thrust of
installed engines.
Although the Air Force has decided to implement the thrust
computing system for its J85-5 engines, no funds for this effort
were requested in the FY 82 budget. The Committee recommends
an increase of $9,000,000 to the aircraft modification program for
this effort. Additional comments on this program appear in the
"Operation and Maintenance" section of this report.
SPARES AND REPAIR PARTS
The total Air Force request for "spares and repair parts" is
$4,002,500,000. During hearings in the past few years the Commit-
tee has heard extensive testimony concerning the severe impact on
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readiness because of the lack of spares and repair parts and thus
has recommended substantial increases for this account in recent
years. The Committee continues to strongly support an adequate
funding level for these items as evidenced by its approval of the
full authorized funding level for spares and repair parts. However,
the Committee notes three items of caution with regard to this
account.
First, hearings and studies on the adequacy of the industrial base
to produce the military hardware projected for procurement in the
expanded defense budget of this and future years, have raised the
point that potential "bottle necks" in the production would most
likely occur at the so-called "subcontractor" level or among the
smaller manufacturing companies. These are the same corpora-
tions which produce the vast majority of spares and repair parts.
Considering the rapid increase in the funding level for Air Force
Spares and Repair Parts-from a level of $1,500,000,000 in fiscal
year 1981 to approximately $4,000,000,000 in fiscal year 1982-the
Committee is concerned that the Air Force may start "tapping" the
spares and repair parts account as a source of funds for reprogram-
ming because of a potentially slow spendout rate of the appropri-
ated funds due to a shortage of industrial capacity. The Committee
would "take issue" if this account was recommended as a source of
funds for reprogramming.
Secondly, the Committee notes that according to DOD's own
audit report, substantial savings could be made-up to 25%-if
spares and repair parts were procured directly from subcontractors
rather than through the "prime" contractors. The Committee be-
lieves that, considering the very large sums involved in the pro-
curement of spares and repair parts, the direct purchase of these
items from the subcontractors should be vigorously pursued.
Third, the Committee notes that having an adequate supply of
spares and repair parts in not simply a matter of funds. For
example, the General Accounting Office, at the Committee's direc-
tion, is conducting an analysis of the spares and repair parts prob-
lems of the F-15 at Langley Air Force Base in Virginia. The GAO
auditors' preliminary conclusions of 45 of the most common spares
and repair parts revealed a wide variety of problems not related to
inadequate funding. Examples of the problems of some of these 45
parts follows:
Description of'the problems affecting some of the 45 parts analyzed
Part and stock number
Converter programmer
1280-01-042-3952
Strap assembly
1560-01-070-5016
Rudder actuator
1650-01-065-7768
Servocylinder
1650-00-477-4043
Problem(s)
Extensive modification of this item has
removed items from the repair pipe-
line.
The contractor did not have sufficient
capacity to meet requirements for both
new production aircraft and replenish-
ment spares.
The manufacturer of this item went out
of business and there has been a delay
in finding a new manufacturer.
This item began failing faster than ex-
pected. At the same time, the produc-
tion lead time increased significantly
and a modification program began.
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Limit switch
5930-01-038-3875
Flaired tube sleeve
4730-00-427-8692 PT
Turbine case assembly
2840-01-045-3879 PT
Exhaust nozzle '
2915-01-035-0276 PT
Hydromechanical sensor
2915-01-081-9055 PT
Lubricating tank assembly
2840-01-022-5422 PT
Demand for this item unexpectedly
jumped from 20 per month to about 50
per month. Also, the depot experi-
enced a shortage of subcomponent
repair parts needed to repair the item.
A subcomponent part unexpectedly
began to fail. As a result, too few of
these subcomponents were in the in-
ventory to meet the demand.
A harness assembly for the camera body
originally coded repairable was found
to be unrepairable. Also, more items
are failing than anticipated.
The manufacturer of this item did not
renew its contract and there has been
difficulty in finding another suitable
manufacturer.
Records showed assets were available.
However, the depot lost the assets and
a special inventory failed to locate
them.
The item failure rate is greater than
forecasted and the item manager did
not buy enough assets ' to support the
higher demand for this long lead time
item.
The item is experiencing high failure
and malfunction problems. Also the
item contains cobalt which the manu-
facturer cannot get in a timely
manner to support production of this
item.
Item manager records showed sufficient
assets on hand. However, the depot
could not find any assets in its inven-
tory..
Item contains waspaloy (an alloy , con-
taining cobalt). Manufacturer cannot
get timely delivery of this material
from suppliers and therefore has diffi-
culty in meeting production schedules.
Demand was higher than initially antici-
pated by the item manager. Also, this
is a long lead time item (27 months).
Demand was higher than anticipated on
this long lead time item (25 months).
The item manager had not bought suf-
ficient assets initially to supply the ex-
perienced demand.
Technical order inspections of this item
resulted in extensive condemnations.
The item manager had not bought
enough assets to cover the unpredicted
high demand.
Premature failure of this item signifi-
cantly increased demand. This is a
long lead time item (23 months). Also,
due to a design deficiency, the item is
under going a redesign/modification.
The depot and some field activities misi-
dentified some assets. Therefore even
though assets were available, the
depot's records incorrectly showed that
no assets were available.
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Support arm Item experienced a design deficiency re-
2840-00-365-2026 PT sulting in premature failures with de-
mands increasing from 61 to about 364
per year. The item is undergoing modi-
fication to fix the problem. Thus, there
has been only limited procurement of
old item.
Exhaust bracket Item experienced premature failure with
2840-01-056-2695 PT resulting significant increase in
demand. Also, item contains titanium
which is in short supply and lengthens
production lead time.
Straight pin Design deficiency caused high failure
5315-01-003-9753 rate. Item was modified and produc-
tion of a new item was affected by
difficulty in getting material for the
modified item.
The Committee has made the following adjustments in the
."spares and repair parts" account:
Initial spares:
Bl-B ..................................................................................................... -$51,000,000
C-130H ................................................................................................ +4,100,000
F-15 ...................................................................................................... -3,000,000
A7-K .................................................................................................... +7,000,000
KC-10 .................................................................................................. +17,200,000
Undistributed Reduction ......................................................................... -80,000,000
Total ................................................................................................. -105,700,000
The increase of $7,000,000 for initial spares for the A7-K, be-
comes available only if these funds are authorized by law.
The undistributed reduction of $80,000,000 is in conformance
with the action taken by the authorization conference. A total of
$3,896,800,000 is recommended for spares and repair parts. Addi-
tional comments on spares and repair parts appears in the oper-
ation and maintenance section of this report.
AIRCRAFT SUPPORT EQUIPMENT AND FACILITIES
OTHER PRODUCTION CHARGES
The Committee recommends a reduction of $10,900,000 for
"Other Production Charges". The recommended reduction is a net
number consisting of changes in three classified programs.
(1) Tactical improvements (classified) ................................................... -$27,700,000
(2) Classified program ............................................................................... -8,100,000
(3) Classified program ............................................................................... +24,900,000
Net subtotal .................................................................................... -10,900,000
These programs are discussed in the classified annex to this
report and in a classified letter to the Secretary of Defense.
NATO AEW/C
The budget included a request of $358,200,000 for the United
States' contribution to the NATO Airborne Warning and Control
System (AWACS) for fiscal year 1982. The Committee recommends
a reduction of $13,900,000 for this program, in conformance with
the action taken by the authorization conference. Because of the
strength of the dollar, and the impact of that strength on exchange
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rates, the reduction will have no impact on the level of effort
planned for this program.
GENERAL REDUCTIONS
ARMY GUARD AND RESERVE EQUIPMENT TRANSFER
The Committee recommends a general reduction of $19,400,000
in the Aircraft Procurement, Air Force account to finance the
Army Guard and Reserve Equipment Transfer as described earlier
in this report.
FOREIGN MILITARY SALES ADJUSTMENTS
The Committee recommends a general reduction of $8,000,000 in
this appropriation based on changes in the foreign military sales
program. These changes are discussed earlier in the report.
MISSILE PROCUREMENT, AIR FORCE
Appropriations, 1981 ................................................................................ $3,346,786,000
New obligational authority, 1982:
Estimate .............................................................................................. 4,204,646,000
Recommended ..................................................................................... 4,546,550,000
Increase ............................................................................................... +341,904,000
This appropriation provides for procurement, installation,' and
checkout of strategic ballistic and other missiles, modification of
inservice missiles, and initial and replenishment spare and repair
parts for missile systems. It also provides for operational space
systems, boosters, payloads, drones, associated ground support
equipment, nonrecurring maintenance of industrial facilities, ma-
chine tool modernization, and special programs support.
PROGRAM RECOMMENDED
The total amount recommended in the bill will provide the fol-
lowing program for fiscal year 1982:
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STRATEGIC
LGM-30F/G MINUTEMAN II/III ............................ --- 34,326 --- 34,326
FORCE MODERNIZATION
ICBM C3 INTEGRATION .............~.......... ..~..~.....
MK-12A REENTRY VEHICLE .............. ..................
STRATEGIC
AIR LAUNCH CRUISE MISSILE .............................
AIR LAUNCH CRUISE MISSILE CAP-CS) ........ .............
GRD LAUNCH CRUISE MISSILE ...... ..................... ..
GRD LAUNCH CRUISE MISSILE IAP-CS ) ................. ....
TACTICAL
AIM-7F/M SPARROW ...................................... 1,560 227:041 1,344 195:541 -216 -31.500
AIM-9L/M SIDEWINDER ................................... 1.800 132,467 1:100 132,467 --- ---
AON-650 MAVERICK ...................................... 490 232.240 490 232:240 --- ---
AGM- BSA HARM ....................................... ... 136 89,100 136 89,100 --- ---
RAPIER ................................................ --- 110,086 --- 139,286 --- +29,200
TARGET DRONES
TARGET DRONES .........................................
TOTAL, OTHER MISSILES ...............................
MODIFICATION OF IN-SERVICE MISSILES
CLASS IV
CLASS IV ..............................................
CLASS V
LOM-30F/G MINUTEMAN II/III ............................
UPDATE
AIM-7E SPARROW ........... :............... .............
SPACE PROGRAMS
SPACEDORNE EQUIP (COMSEC) .............................
GL ORAL POSITIONING ...................................
SPACE LAUNCH SUPPORT ..................................
5ATELLITE DATA SYSTEM .... .......................... ...
SATELLITE DATA SYSTEM (AP-CT) .........................
DEF METEOROLOGICAL SAT PROS ...........................
DEFENSE SUPPORT PROGRAM ...............................
DEFENSE SATELLITE COMM SYSTEM .........................
.......................................
SPACE BOOSTERS,
5 FACE BOOSTERS (RF-CY) ................................
SPACE SHUTTLE .........................................
588:675
1,184
299,440
29,802
Change from
Request Recommended request
54,436 --- 54:436 --- ---
--- --- 44600 --- 444,600
---------- ------ ------------
88,762 133,362 444,600
588,675
1,184
299:440
29,802
19,461 --- 19,461
73:596 --- -
33,575 --- 33.575
20.649 --- 20.649
21,271 --- 21,271
36,066 --- 36,866
230,254 --- 242.254
129,964 --- 129,964
77,523 --- 77.523
35.744 --- 35,744
212,365 --- 212,365
-5.000
5,900
SPECIAL PROGRAMS
FOREST GREEN .......................................... --- 2,070 --- 2,070 ___ ___
IONOS ................................................. ___ 16:435 "'- 16:435 ---
SPEC IAL PROGRAMS ...................................... --- 757.772 --- 757x772 --- -
SPECIAL UPDATE PROGRAMS ............................... --- 441,266 --- 791.286 --- 4350,000
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238
COMMITTEE RECOMMENDATIONS
BALLISTIC MISSILES
MK-12A REENTRY VEHICLE
No funds were requested for procurement of additional MK-12A
Reentry Vehicles. The. Committee believes that this is an impor-
tant program for the continual upgrade of the Minuteman Missile
system and has provided $44,600,000 for continued procurement of
MK-12A reentry vehicles.
AIM-7M SPARROW
For reasons explained in the Weapons Procurement, Navy sec-
tion of this report, the Committee recommends a reduction of
$31,500,000. The recommended total for AIM-7M Sparrow is
$195,541,000.
RAPIER AIR DEFENSE SYSTEM
Last year, the Air Force entered into an agreement with the
United Kingdom to procure the RAPIER Air Defense System. The
program was structured to allow procurement at the best economi-
cal rate. The Air Force has proposed to reduce the funding origi-
nally planned for FY 1982, thereby stretching the program and
increasing its cost. The Committee concludes that this approach is
wasteful, and directs the Air Force proceed as originally planned.
The Committee recommends adding $38,200,000 for RAPIER. Of
this sum: $23,000,000 restores the reduction proposed by the Air
Force from the Missile Procurement account; $6,200,000 restores
the proposed reduction from the Other Procurement account in the
September budget amendment and places it in the Missile Procure-
ment account; and $9,000,000 restores the proposed reduction in
the Missile Spares and Repair Parts account. The net result of
these actions is a recommended total amount for RAPIER of
$139,286,000, and $9,000,000 for RAPIER spares and repair parts.
OTHER SUPPORT
SPACE PROGRAMS
GLOBAL POSITIONING SYSTEM (GPS)
The Global Positioning System (GPS) program has as its objec- s
tive the development and deployment of an 18 satellite "constella-
tion" which would provide users with continuous positioning and
navigation information, thus increasing force effectiveness through
enhancement of accuracy and capabilities of weapons delivery. The
majority of the funds requested for this program are in RDT&E,
and comments on this request appear in the RDT&E section of the
report. In conformance with the action taken by the authorization
conference, the Committee has included no procurement funds for
this program, and recommends a reduction of $73,596,000.
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A total of $230,254,000 was budgeted for the Defense Support
Program under a multi-year incrementally-funded concept. The
Committee does not support the program as budgeted in fiscal year
1982 because (a) production is not based on a fully-funded basis; (b)
there is significant research and development required between
fiscal years 1982 and 1986; (c) there is some technical and schedule
risk in the development portion of the program; (d) there is no
urgency that production be initiated during fiscal year 1982; (e)
there is too much concurrency in the program as budgeted by the
Air Force; (f) the proposed contract is fixed-price incentive, rather
than firm fixed-price, thereby providing no assurance the total
estimated savings can be achieved; (g) there are already cost in-
creases recently identified on other phases of the program with a
similar degree of concurrency; and (h) the proposed production
program does not meet the DOD criteria for a multi-year procure-
ment program. Consequently, the Committee recommends
$242,000,000, an increase of $12,000,000 above the budget, to pro-
cure long leadtime items for the total proposed production pro-
gram. The Committee will consider a restructured production pro-
gram under a fully-funded multi-year procurement concept begin-
ning in fiscal year 1983.
Of the total funds approved in this bill for the Defense Satellite
Communications System III program, $15,000,000 may be expended
on the development of multi-channel transponders for the Defense
Satellite Communications System III program.
SPECIAL UPDATE PROGRAM
The Committee recommends an increase of $350,000,000 for a
classified program. Details on this program are discussed in a
classified letter to the Secretary of Defense.
ARMY GUARD AND RESERVE EQUIPMENT TRANSFER
The Committee recommends a general reduction of $5,900,000 in
the Missile Procurement, Air Force account to finance Army
Guard and Reserve Equipment Transfer as described earlier in the
report.
$60,916,000 was requested for Modification of In-Service Missiles
(CLASS IV). The Committee recommends a reduction of $26,900,000
for this program. The recommendation consists of a reduction of
$4,400,000 for modifications, not related to safety, of Titan missiles,
and a reduction of $22,500,000 derived from unobligated funds from
fiscal year 1981 for the MESP program.
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The Committee recommends an increase of $35,000,000 for the
Minuteman Extended Survivable Power program. Considering the
central role that the Minuteman missile force will continue to
fulfill in maintaining a viable strategic nuclear deterrent force, the
Committee believes it would be imprudent not to proceed with this -z
program and thus has recommended the increase.
As mentioned in the previous comments on the Rapier missile,
$9,000,000 has been added to the budget request for spare parts for
the missile.
OTHER PROCUREMENT, AIR FORCE
Appropriations, 1981 ................................................................................ $3,149,578,000
New obligational authority, 1982:
Estimate .............................................................................................. 5,174,144, 000
Recommended .................................................................................... 5,379,288,000
Increase ............................................................................................... 205,144,000
Recommended in the bill ......................................................................... 15,380,088,000
' Includes $5,379,288,000 in new obligational authority and in addition $800,000 in prior year
unobligated balances to be derived by transfer from "Other Procurement, Air Force, 1981/1983".
This appropriation provides for the procurement of weapon sys-
tems and equipment other than aircraft and missiles. Included are
munitions, other weapons, vehicles, electronic and telecommunica-
tions systems for command and control of operational forces, and
ground support equipment for weapons systems and supporting
structure.
PROGRAM RECOMMENDED
The total amount recommended in the bill will provide the fol-
lowing program for fiscal year 1982:
Budget Estimate Recommendation Change
Munitions and Associated Equipment ............................................................... $1,114,699,000 $1,101,277,000 -$13,422,000
Vechicular Equipment ....................................................................................... 337,002,000 335,902,000 -1,100,000
Electronics and Telecommunications Equipment ............................................... 1,123,601,000 1,151,501,000 + 27,900,000
Other Base Maintenance and Support Equipment ............................................. 2,604,842,000 2,808,088,000 + 203,246,000
Reduction, Inflation/Offsets .............................................................................. -6,000,000 -6,000,000 ............................
Army Guard and Reserve Equipment Transfer .............................................................................. -7,200,000 -7,200,000
Foreign Military Sales Adjustments ....................................................................................................... -1,000,000 -1,000,000
Audio Visual Equipment .......................................................................................................................... -3,280,000 -3,280,000
Total ................................................................................................... 5,174,144,000 5,379,288,000 +205,144,000
Transfer from other accounts ....................................................................................................... (800,000) (+800,000)
Total funding available ....................................................................... 5,174,144,000 5,380,088,000 +205,944,000
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241
COMMITTEE RECOMMENDATIONS
MUNITIONS AND ASSOCIATED EQUIPMENT
FMU-112 FUZE
The Air Force budgeted $9,422,000 for the FMU-112 fuze which
is used on general purpose bombs with laser guidance kits or
retarding devices. It will be replaced as early as 1983 by a joint
Navy/Air Force FMU-139 common bomb fuze. The FMU-139 fuze
will be competitively procured and is estimated to cost less than
half the FMU-112. The Air Force has given only lukewarm support
to the FMU-139 program, for which the Navy is the lead agency. It
is expected that this situation will continue as long as the FMU-
112 is available as an alternative. There are adequate supplies of
other fuzes which can be used until the FMU-139 is available. In
addition, there are 1,254 FMU-112 fuzes already on order which
will be delivered beginning in February 1982. A $9,422,000 reduc-
tion is recommended and the Air Force is directed to give its full
support to the FMU-139 fuze development and procurement pro-
gram.
.38 CALIBER AMMUNITION
The Committee recommends a reduction of $1,900,000 in the
$7,195,000 budgeted for .38 caliber ammunition. The reduction is
based on contract savings resulting from a different procurement
strategy than originally planned. The reduction was identified in a
report from the General Accounting Office.
FIRST DESTINATION TRANSPORTATION
The Air Force improperly budgeted $2,100,000 for first destina-
tion transportation for ammunition in the procurement appropri-
ation rather than Operation and Maintenance. A reduction of
$2,100,000 is recommended.
25K AIRCRAFT LOADER
The Committee recommends a reduction of $1,100,000 in the
$8,462,000 budgeted for 25K aircraft loader vehicles. The reduction
is based on contract savings.
ELECTRONICS AND TELECOMMUNICATIONS EQUIPMENT
STRATEGIC AIR COMMAND INFORMATION NETWORK (SACDIN)
SACDIN (Strategic Air Command Information Network) will pro-
vide SAC with an improved data communications capability. The
budget includes $54,268,000 for SACDIN including $29,500,000 in
RDT&E and $24,768,000 in procurement. The Committee recom-
mends fully funding RDT&E for the program, but recommends a
small reduction of $2,500,000 in the procurement account for the
program.
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SACDIN is scheduled to utilize the AUTODIN II common user
network. In light of the misgivings, expresed by various DoD offi-
cials with regard to the future of the AUTODIN II system, the
Committee believes a small reduction in this program is warranted,
pending the outcome of the future of AUTODIN II.
In past agreements the Air Force had assured the Committee
that program costs would be $146,000,000 in 1977 dollars. The Air
Force now states that costs will be $178,000,000 in 1977 dollars-an
overrun of 22% in constant dollars. The Committee is dismayed
that, following frequent assurances from the Air Force that the
program could be developed and procured within cost, significant
cost overruns are occurring in yet another Air Force program.
RDF, AIR GUARD, COMMUNICATIONS EQUIPMENT
The Committee recommends an increase of $30,400,000 above the
budget for RDF, Air Guard, communications equipment. This rec-
ommendation is explained elsewhere in this report.
The Committee directs that the funds requested for upgrading
the AUTOSEVOCOM secure voice system be used instead to pro-
cure Standard Telephone Unit II (STU II) secure telephones. The
Committee has fully funded continued RDT&E of the STU IIM
(Standard Telephone Unit II Modified).
OTHER BASE MAINTENANCE AND SUPPORT EQUIPMENT
BASE MECHANIZATION EQUIPMENT
The Air Force budgeted $13,330,000 for base mechanization
equipment. Last year a similar amount was provided, but the Air
Force cancelled or postponed requirements for projects totalling
$6,700,000. This appears to indicate that the Air Force is not pro-
viding sufficient management attention to this program. A
$5,000,000 reduction is recommended, which will provide a total
program of $8,330,000 in fiscal year 1982.
DEPOT PLANT AND MATERIAL HANDLING EQUIPMENT
The Air Force budgeted $23,025,000 for procurement of depot
plant and materials handling equipment costing less than $900,000,
an increase of $4,220,000 over the $18,805,000 provided last year. A
reduction of $3,000,000 is recommended, based on the belief that
the Air Force should make greater efforts to use excess govern-
ment-owned equipment at contractor facilities and equipment
available through DIPEC. Furthermore, the Committee has learned
that the Department is giving consideration to a different funding
mechanism for procurement of this equipment, involving the use of
surcharges on depot repair work.
MEDICAL!DENTAL EQUIPMENT
Included in the $46,794,000 budgeted by the Air Force for medi-
cal/dental equipment was $19,500,000 for field hospitals. As men-
tioned previously under Other Procurement, Navy there is poten-
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tial for overlap and duplication as all three services begin major
procurement programs for field hospitals. Therefore, the
$19,500,000 is denied. The Committee exhorts the Department of
Defense to move quickly to develop a unified and coherent program
to procure this essential capability. The total recommended for
medical/dental equipment is $27,294,000.
The Committee recommends a reduction of $19,254,000 from the
amount budgeted for selected activities for reasons discussed in the
classified annex to this report.
The Committee recommends an increase of $250,000,000 in the
amount budgeted for the special update program for reasons dis-
cussed in a classified letter to the Secretary of Defense.
FOREIGN MILITARY SALES ADJUSTMENTS
The Committee recommends a general reduction of $1,000,000 in
this appropriation based on changes in the foreign military sales
program. These changes are discussed earlier in this report.
AUDIO VISUAL EQUIPMENT
The Committee recommends a general reduction of $3,280,000 for
audio visual equipment for reasons discussed earlier in this report
under Operation and Maintenance.
ARMY GUARD AND RESERVE EQUIPMENT TRANSFER
The Committee recommends a general reduction of $7,200,000 in
this appropriation to support the Army Guard and Reserve Equip-
ment Transfer which is discussed elsewhere in this report.
PROCUREMENT, DEFENSE AGENCIES
Appropriations, 1981 ................................................................................ $321,464,000
New obligational authority, 1982:
Estimate .............................................................................................. 512,200,000
Recommended .................................................................................... 511,500,000
Decrease ................................................................:............................. 700,000
This appropriation provides for procurement of capital equip-
ment for the Defense Communications Agency, the Defense Logis-
tics Agency, and other agencies of the Department of Defense. The
1982 program includes procurement of automatic data processing
equipment, mechanized materials handling systems, general and
special purpose vehicular equipment, communications equipment,
and many other things.
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244
COMMITTEE RECOMMENDATIONS
CLASSIFIED PROGRAMS
The Committee recommends a reduction of $5,000,000 in classi-
fied programs for reasons discussed in the classified annex to this
report.
REALLOCATION OF WWMCCS RESOURCES
The Committee recommends an increase of $5,500,000 for World
Wide Military Command and Control System equipment. This rec-
ommendation is discussed earlier in this report.
ARMY GUARD AND RESERVE EQUIPMENT TRANSFER
The Committee recommends a general reduction of $1,200,000 in
this appropriation to support the Army Guard and Reserve Equip-
ment Transfer for reasons discussed earlier in this report.
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TITLE V
RESEARCH, DEVELOPMENT, TEST AND EVALUATION
ESTIMATES AND APPROPRIATION SUMMARY
The fiscal year 1982 Department of Defense research, develop-
ment, test and evaluation budget totaled $20,319,388,000. The ac-
companying bill recommends a total program of $19,262,204,000 in
new obligational authority. The total amount recommended is
$2,731,540,000 above the total program provided in fiscal year 1981.
The table below summarizes the budget estimates and the Commit-
tee's recommendations:
Research, development, test and evaluation, Army ............................ $3,768,500,000
Research, development, test and evaluation, Navy ............................. 5,885,488,000
Research, development, test and evaluation, Air Force ...................... 8,823,400,000
Research, development, test and evaluation, Defense Agencies......... 1,789,000,000
Director of Test and Evaluation, Defense ........................................... 53,000,000
Total, title V, new budget (obligational) authority,
research, development, test and evaluation ................. 20,319,388,000
$3,577,119,000 -$191,381,000
5,517,671,000 -367,817,000
8,501,210,000 -322,190,000
1,613,204,000 -175,796,000
53,000,000 ................................
REMOTELY PILOTED VEHICLES
Both the Army and the Air Force have been pursuing develop-
ment of remotely piloted vehicles (RPV's). This technology holds
promise to provide low cost platforms able to perform a variety of
missions, including air defense suppression, ground target acquisi-
tion and designation, and surveillance. An April 1981 report by
GAO holds that RPV technology, despite opportunities for saving
lives and money, has been given only limited use by DoD and has
not been adequately funded. Despite this promise, both services
have proposed taking actions which the Committee finds unjusti-
fied. The Army wishes to cut in half its original FY 1982 request
for funding of RPV technology. The Air Force, following withdraw-
al by West Germany from the joint USAF/German LOCUST pro-
gram because of funding constraints, proposes not to fund LOCUST
beyond FY 1982. The Committee believes that RPV technology
should be vigorously pursued, and adequately funded, to ensure
that opportunities for early fielding can be provided.
JOINT TACTICAL COMMUNICATIONS PROGRAM (TRI-TAC) .
The TRI-TAC program provides tactical communications equip-
ment for all branches of the Armed Services. Eventually, a
"family" of equipment, consisting of a wide variety of types of
equipment, will be deployed in the TRI-TAC program. A total of
(245)
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$352,851,000 is requested for the TRI-TAC program. These funds
are requested in various accounts-Procurement, RDT&E, Military
Personnel-for the program.
Over the years the Committee has supported the program, but
has voiced its misgivings about the soaring costs, the long delay in
actual deployment of equipment, and the emphasis on high tech-
nology within the program. This program has been under develop-
ment since 1971. The so-called "Tick-39" switches which are the
"heart" of the TRI-TAC system are reportedly performing well.
However, the Committee notes that they are very expensive.
The Committee has made a number of relatively minor reduc-
tions in various RDT&E accounts for this program. The Committee
encourages DoD and the TRI-TAC program officials to consider
alternative capabilities available or soon to be available, to satisfy
the requirements that would assure a more timely fielding of the
system as RDT&E continues on this program.
It has been and remains the Committee's position that only joint
trainer aircraft will be developed in the future. The services are
reminded that Air Force requirements must be specifically consid-
ered and addressed in the Navy's VTXTS program. Active involve-
ment, not simply written MOU's, are necessary to carry out the
intent of this Committee directive.
The conduct of medical research and development by the mili-
tary departments is a vital activity, and one which the Committee
fully supports. In the past, the Committee has several times ex-
pressed concern that certain aspects of the program appear dupli-
cative or unrelated to operational problems. In order to address
these concerns, the Committee took three actions: DoD was direct-
ed to study and report on the possible consolidation of medical
R&D activities; the Surveys and Investigations Staff conducted a
separate review of these activities; hearings were held on medical
activities. The results of these efforts have been carefully reviewed.
They show that defense medical researchers are an extraordinarily
talented and devoted group of persons whose individual efforts are
a source of national strength, and that their individual contribu-
tions could have even greater collective impact if top level adminis-
tration were improved. The Committee desires that Defense coritin-
ue to receive the medical research efforts it needs to solve oper-
ational problems, and that those efforts be managed as efficiently
as possible to assure stability and continued high. productivity of
this important program.
The DoD report concludes that consolidation of all Defense medi-
cal R&D into a single DoD agency is unwarranted, that designation
of lead agencies for the various areas of medical research would be
difficult and that a new management committee, the ASBREM,
will resolve all issues of consolidation, coordination and program
integration between the Services. The Committee agrees that the
ASBREM is a useful approach, one whose time has long since
come. However, while the ASBREM will be useful in providing
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additional centralized management guidance to the medical R&D
program, it does not go far enough, soon enough. The ASBREM
should be seen as an interim device leading to broader consolida-
tion of those Defense medical research efforts, where such consoli-
dation is logical and constructive.
There appear to be more similarities than differences in the
Services' needs for medical research and development, especially in
the areas of infectious disease, combat casualty care and dental
health. This is attested to by the Air Force's long dependence on its
sister services for research in these areas. The Committee believes
that Defense will benefit from a greater degree of consolidation in
these areas than is represented by the ASBREM approach, and
that such consolidation can be accomplished gradually so as to be
non-disruptive of ongoing programs. Service concerns with main-
taining a cadre of scientists in consolidated areas can be met by
assigning members of one Service to the laboratories of the lead
Service as appropriate. Defense should proceed as rapidly as possi-
ble to institute the lead agency concept in medical research man-
agement. This concept has worked in chemical and biological de-
fense research, DoD food research and munitions research. It is
applicable to medical R&D as well.
Infectious disease is an area with which the Committee has
previously expressed concern, and one which DoD has asked
ASBREM to explore. The Committee believes no further explora-
tion is necessary. The requirements for infectious disease research
are common among all three Services. The Army program is pre-
dominant and highly productive, having world-wide recognition in
drug and vaccine development. The Committee directs that the
Army be designated lead agency for infectious disease research, in
parallel with its designation in medical biological warfare defense,
a closely related area. Army and Navy should begin immediately to
transfer management of Navy infectious disease research resources
to the Army. To assist this transfer, certain small funding adjust-
ments have been recommended at appropriate places in the budget.
A report on this matter should be submitted with the FY 1983
budget.
The Committee also believes that further study of Defense dental
research is unwarranted. At present, the entire Army dental re-
search program, and a portion of the Navy's, is directed at repair
of combat maxillofacial injury. This work is clearly part of the
larger combat casualty care program. The Committee directs that
the Army be designated the lead agency for combat dentistry re-
search and development; the Army and Navy should begin immedi-
ately to transfer associated resources to Army control. Conversely,
the Navy program contains a substantial proportion of research
devoted to dental disease and dental emergency. The Navy should
be made responsible for all Defense research in this area. To assist
these transfers, certain small funding adjustments have been rec-
ommended at appropriate places in the budget. A DoD report on
dental research should be submitted with the FY 1983 budget
presenting Service plans for these two areas.
Completion of consolidation actions in infectious disease research
and dental research by the end of FY 1984 is directed.
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The Naval Biosciences Laboratory (NBL) appears to the Commit-
tee to be a facility in search of a mission. The Surveys and Investi-
gations Staff reports that neither OSD nor the Navy have exercised
decisive management of this laboratory, and that its value to the
DoD effort is questionable. The Committee is informed that the
Navy recently began the process of reorienting and restaffing the
facility with the intention of making NBL responsive to operation-
al needs. Accordingly, the Committee is recommending no adverse
action at this time, but will carefully review the status of NBL
during examination of the FY 1983 budget.
As in past years, the Departments and Agencies requested funds
for Defense Research Sciences which represent unreasonably large
increases over the amounts provided for the previous year. The
Committee has recommended reductions at the appropriate places
in the budget. In addition, a total of $8,000,000 is recommended for
transfer to Defense Research Sciences, Army from several Navy
accounts, as follows:
Defense Research Sciences, Navy ...................................................................... $4,400,000
Biomedical Technology ........................................................................................ 900,000
Medical Development (Adv) ................................................................................ 2,600,000
Medical Development (Eng) ................................................................................ 100,000
The transferred sum will allow implementation of the consolida-
tion actions discussed above in Medical Research and Development.
For reasons explained in the Operations and Maintenance sec-
tion of this report, the Committee recommends reductions of
$3,000,000 each in the RDT&E budgets of the Army, the Navy, and
the Air Force.
For reasons explained in the Operations and Maintenance sec-
tion of this report, the Committee recommends reductions of
$1,200,000 in the Navy RDT&E budget, and $4,190,000 in the Air
Force RDT&E budget.
ARMY GUARD AND RESERVE EQUIPMENT TRANSFERS
For reasons explained in the Military Personnel section of this
report, the Committee recommends the following reduction in
RDT&E budgets:
Army ....................................................................................................................... -$5,300,000
Navy ........................................................................................................................ -8,200,000
Air Force ................................................................................................................ -12,400,000
Defense Agencies .................................................................................................. -2,500,000
RESEARCH, DEVELOPMENT, TEST AND EVALUATION, ARMY
Appropriation, 1981 .................................................................................. $3,127,774,000
New Obligation Authority, 1982:
Estimate .............................................................................................. 3,768,500,000
Recommended .................................................................................... 3,577,119,000
Reduction ............................................................................................ 191,381,000
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The Committee recommends an appropriation of $3,577,119,000
for the Research, Development, Test and Evaluation activities of
the Army in fiscal year 1982. The recommendation is a reduction of
$191,381,000 below the budget estimate, and is $449,345,000 more
than the appropriation provided in fiscal year 1981.
The Committee recommends the following changes in the budget
estimate, in accordance with changes recommended by the authori-
zation conference:
BudNet Couittee Change from
Reouest Recommended Reouest
---------------------------------------------------------------------------------------------
ENVIRONMENTAL QUALITY TECH ............................
8.481
7,500
-981
HOE AVIATION AND NAVIGATION EQUIPMENT .................
5,092
2,348
-2,744
TERMINALLY GUIDED PROJECTILES .........................
---
2,000
+2,000
DEMILITARIZATION CONCEPTS .............................
11,921
9,500
-2.421
BALLISTIC MSL DEF SYS TECH ............................
353,685
336,685
-17,000
JOINT SERVICE SMALL ARMS PROGRAM (JSSAF) ..............
3,529
5,500
41,971
ADVANCED MULTI-PURPOSE ARMORED SYSTEM .................
20,805
8,000
-12,805
TACTICAL AUTOMATION ...................................
22,008
21,000
-1,008
DIV AIR DEFENSE COMD/CNTRL ............................
10,134
9,200
-934
STANDOFF TARGET ACQUISITION SYSTEM ....................
69,776
---
-69,7761
NAVSTAR GLOBAL POS SYS (USER EQ) ......................
21,002
---
-21,002
The budget request included amounts for a number of programs
which exceeded by unjustifiably large percentages the amounts
provided for fiscal year 1981. The Committee accordingly recom-
mends the following reductions:
Budget
request
Reduction
Recommend-
ed
Aircraft Weapons Technology .....................................................................................................
2,290
-290
2,000
High Energy Laser ......................................................................................................................
24,956
-3,500
21,456
Ballistics Technology ..................................................................................................................
23,912
-2,000
21,912
Chem/Bio Defense/Gen Inv .......................................................................................................
22,970
-2,970
20,000
System Health Hazards ..............................................................................................................
15,529
-1,529
14,000
Materials Scale Up .....................................................................................................................
5,426
-1,426
4,000
Combat Feeding, Clothing, Equipment ........................................................................................
3,536
-1,000
2,536
CHEMICAL MUNITIONS/ CHEMICAL COMBAT SUPPORT
The Army requested $20,528,000 for Chemical Munitions/Chemi-
cal Combat Support, a sum nearly four times that provided for
fiscal year 1981. The Committee supports the modernization of
chemical and biological warfare capabilities, both offensive and
defensive. There is some concern that very large funding increases
may not be able to be absorbed in these programs as effectively
and efficiently as is desirable. The Committee recommends a reduc-
tion of $2,000,000, resulting in a recommended total of $18,528,000.
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The Army request included $130,000 for work on ring laser gyros,
which is duplicative of research already conducted, and which the
Committee therefore denies. The recommended total for Aircraft
Avionics Technology is $5,977,000.
The Committee recommends adding $2,500,000 above the budget
for research and development in small arms. The recommended
total for Small Caliber and Fire Control Technology is $11,016,000.
The Committee denies $167,000 requested for research on a food
system for ground mode of the MX, and recommends a total of
$5,569,000 for Joint Service Food Systems Technology.
The Army requests of $7,773,000 for Synthetic Flight Simulators,
and $8,333,000 for Training Systems included funds to accelerate
development of a simulator for the AH-64. This work is clearly
premature. The Committee recommends a reduction of $4,027,000,
leaving a total of $3,746,000 for Synthetic Flight Simulators and a
reduction of $5,253,000, leaving a total of $3,080,000 for Synthetic
Flight Training Systems.
ADVANCED DEVELOPMENT OF AUTOMATIC TEST EQUIPMENT/SYSTEMS
The Army proposed reducing this program $9,000,000 from the
original fiscal year 1982 budget submitted in March. The Commit-
tee believes that development of automatic test equipment should
be a priority effort, given the growing complexity of Army systems,
and that the proposed decrease is unwise. The Committee recom-
mends providing $14,355,000 for Advanced Development of Auto-
matic Test Equipment/Systems, the originally budgeted amount.
For Electric Power Sources, the Army budgeted, and the Com-
mittee recommends, the authorized amount of $5,085,000. However,,
the Committee is concerned that an important new technology, the
free piston Stirling engine, has not been funded in this program.
This-technology has the potential to provided a quiet, low cost
method of producing electric power for the tactical forces in the
field. The Committee directs that $2,000,000 of the total amount
provided be devoted to work on the free piston Stirling engine, and
invites the Army to submit a reprogramming action expeditiously
for whatever additional funds are required to adequately support
this initiative.
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The Army requested funds for research in recruiting. It appears
that the Army is meeting its recruiting goals, and that less empha-
sis is needed on recruiting and more on retention. The Committee
recommends a total of $3,614,000 for Manpower and Personnel, a
reduction of $1,000,000 from the budget request.
The Army continues to pursue two ECCM technologies in the
Single Channel Ground/Airborne Radio Sub-System, despite ample
evidence that only one of them will meet the threat. The Commit-
tee recommends a total of $12,225,000 for SINCGARS, a reduction
of $3,000,000 from the budget request.
AIRDROP EQUIPMENT DEVELOPMENT
The Army requested $200,000 for a project related to the CX
program, which has not been authorized. The Committee recom-
mends a total of $2,926,000 for Airdrop Equipment Development, a
reduction of $200,000 from the budget request.
The Army budgeted $10,312,000 for Aircraft Weapons, the bulk
of which was for advanced development of radar and fire control
for attack helicopters. The technology being pursued appears to
duplicate work in other on-going millimeter wave programs. The
Committee suggests that this project be deferred pending transfer
of more mature technology from these other programs. The Com-
mittee recommends a reduction of $9,800,000, resulting in a recom-
mended total for Aircraft Weapons of $512,000.
For reasons discussed in the classified annex to this report, the
Committee recommends a total of $30,547,000 for Joint Tactical
Fusion Program, a reduction of $8,000,000 from the budget request.
The budget request included $3,183,000 for a system which the
Army has subsequently determined will not be ready to enter
engineering development in fiscal year 1982. The Committee rec-
ommends a reduction of that amount, providing a total of
$4,963,000 for Landmine Warfare.
For reasons discussed at the beginning of the RDT&E section of
this report, the Committee disagrees with the reductions related to
RPV's which the Army proposed in its latest revision to the fiscal
year 1982 budget. The Committee recommends that this program
be funded at its originally budgeted level. The recommended total
for Remotely Piloted Vehicles is $73,348,000.
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AN/MLQ-33
The Army requested funds for continued development of AN/
MLQ-33, a system the Army does not intend to procure, and one
which its own internal studies show has no value. The Committee
directs immediate termination of AN/MLQ-33, and recommends
providing $2,295,000 for termination costs.
The Army requested $14,869,000 for Maneuver Control System.
The Committee is concerned that the Army is proposing to do more
paper studies, and analyses of system architectures. The evidence
strongly indicates that solid, practical experience and knowledge
are being gained from operational field tests in Europe using the
TCT and TCS equipments. It appears to the Committee that more
practical experience, and less paper study, is what the Army needs
to solve its maneuver control problems. The Committee recom-
mends a total of $11,000,000 for Maneuver Control System, and
directs that $10,000,000 of that sum be used to purchase additional
TCT and TCS equipment so that field testing and data gathering
can be expanded, and that $1,000,000 of that sum be used for
developing and monitoring these field tests.
DARCOM MAJOR RANGE/TEST FACILITIES
The Army budgeted $292,109,000 for DARCOM Major Range/
Test Facilities, an increase of 35 percent over the $217,397,000
provided last year. It does not appear that the volume of new work
to be done has increased greatly over last year. At the same time,
the Committee agrees that the Army should continue to reduce the
backlog of unfinished work and to modernize its facilities. For this
reason, a substantial increase over fiscal year 1981 funding is rec-
ommended. The recommended total for DARCOM Major Range/
Test Facilities is $270,000,000.
The Army request included $7,800,000 for laboratory equipment
upgrades, which the Committee believes can be effected over a two
year period, rather than one. Accordingly, the Committee recom-
mends a total of $63,915,000 for Program-Wide Activities, a reduc-
tion of $3,900,000 from the budget request.
For reasons explained at the beginning of the RDT&E section of
this report, the Committee recommends a total of $43,107,000 for
Joint Tactical Communications, a reduction of $5,000,000 from the
budget request.
The Committee denies $180,000 requested for work on a MOUT
weapon, and directs the Army to use the SMAW weapon under
development by the Marine Corps. The Committee is determined
that needless and costly duplication of this sort shall be eliminated.
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The Committee agrees with concerns expressed by GAO concern-
ing development of components for an improved TACFIRE system.
The Committee directs the Army to perform cost-benefit studies of
using existing equipments, including TCT/TCS and Marine Corps
MIFASS components, as alternatives to developing new compo-
nents.
The Committee directs the Army to make known its plans before
any major new efforts are undertaken in the development of nucle-
ar warheads.
The Committee directs the Army to inform it of further actions
it intends to take which have the purpose of ensuring close coordi-
nation and joint planning of Army/USDA food and nutrition re-
search.
Last year the Committee requested a study of the feasibility and
requirement for a helicopter escape system. The Army has in-
formed the Committee that it has work of higher priority to be
done, and will not accomplish the requested study until December
1982. The Committee directs that a final report be issued not later
than June 30, 1982.
The following schedule shows the budget estimate, the recom-
mended appropriation, and the change from the budget estimate
(in thousands of dollars) for fiscal year 1982:
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Budget Committee Change from
Request Recommended Request
--------------------------------------------------------------- -----------------------------
IN-HOUSE LAB INDEPENDENT RESEARCH .....................
21,560
21,560
---
DEFENSE RESEARCH SCIENCES .............................
161,811
152,405
-9,406
MATERIALS .............................................
10,482
10,482
---
ATMOSPHERIC INVESTIGATIONS ............................
5,547
5,547
---
FUZE/NUCLEAR WPNS EFFECTS/FLUIDICS ....................
5,240
5,240
---
AIRCRAFT WEAPONS TECHNOLOGY ...........................
2,290
2,000
-290
AIRCRAFT AVIONICS TECHNOLOGY ..........................
6,107
5,977
-130
AERONAUTICAL TECHNOLOGY ...............................
18,086
18,086
---
AIRDROP TECHNOLOGY ....................................
1,543
1,543
---
MISSILE TECHNOLOGY ....................................
30,134
30,134
---
HIGH ENERGY LASER TECHNOLOGY ..........................
24,956
21,456
-3,500
TANK AND AUTOMOTIVE TECHNOLOGY ........................
14,685
14,685
---
SMALL CAL AND FIRE CNTRL TECHNOLOGY ...................
8,516
11,016
42,500
BALLISTICS TECHNOLOGY .................................
23,912
21,912
-2,000
CHEMICAL MUNITIONS/CHEMICAL CMBT SPT ..................
20,528
18,528
-2,000
COMMUNICATIONS TECH ...................................
7,567
7,567
---
CMBT SURV TARGET ACO/ID ...............................
2,217
2,217
---
NIL ENVIRONMENTAL CRITERIA DEV ........................
2,763
2,763
---
ELECTRICAL AND ELECTRONIC DEVICES .....................
15,298
15,298
---
CHEM BIOLOGICAL DEF/GEN INVEST ........................
22,970
20,000
-2,970
MAPPING - GEODESY .....................................
5,758
5,758
---
NIGHT VISION INVESTIGATIONS ...........................
13,190
13,190
---
HUMAN FACTORS ENGR IN SYS DEV .........................
8.568
8.568
HUMAN PERFORMANCE EFFECT/SIMULATION ...................
3,380
3,380
---
MOBILITY AND WEAPONS EFFECTS TECH .....................
6,275
6,275
---
ENVIRONMENTAL QUALITY TECH ............................
8,481
7.500
-981
MANPOWER/PERSONNEL/TRAINING ...........................
5,937
5,937
CLOTHING EQUIP AND SHELTER TECH .......................
5,586
5,586
JT SVC FOOD SYS TECH ..................................
5,736
5,569
COMPUTER AND INFORMATION SCIENCE ......................
1,797
1,797
NON-SYSTEM TRAINING DEVICES ...........................
2,665
2,665
COLD REGIONS ENGINEERING TECHNOLOGY ...................
5,451
5,451
MILITARY FACILITIES ENGINEERING TECHNOLOGY ............
3,402
3,402
MOBILITY EQUIPMENT TECHNOLOGY .........................
10,189
10,189
NED DEFENSE AGAINST CHEM AGENTS .......................
23,252
23,252
TACTICAL ADP TECH .....................................
8,053
8,053
MILITARY DISEASE HAZARDS TECH .........................
17,156
17,156
COMBAT CASUALTY CARE TECH .............................
6,764
6,764
COMBAT MAXILLOFACIAL INJURY ...........................
1,476
1,476
SYSTEMS HEALTH HAZARD PREVENT TECH ....................
15,529
14,000
ENERGY TECH APPL FOR MILITARY FACIL ...................
1.479
1.479
CLASSIFIED PROGRAMS ...................................
29,726
29,546
-180
------------
------------
------------
MATERIALS SCALE-UP .....................................
5.426
4,000
-1,426
FUELS AND LUBRICANTS ..................................
1,308
1,308
---
AIRCRAFT POWER PLANTS AND PROPULSION ..................
2,969
2,969
- --
AIRCRAFT WEAPONS ......................................
10,312
512
-9,800
AIRCRAFT AVIONICS EQUIPMENT ...........................
2,320
2.320
---
AIR MOBILITY SUPPORT ..................................
1,810
1,810
ROTARY WING CONTROLS/ROTORS/STRUCTURES ................
28,520
28,520
---
SYNTHETIC FLIGHT SIMULATORS ...........................
7,773
3,746
-4,027
AIRDROP EQUIP AND TECHNIQUES ..........................
2,702
2,702
---
HOE AVIATION'AND NAVIGATION EQUIPMENT... ..............
5,092
2,348
-2,744
TERMINALLY GUIDED PROJECTILES .........................
---
2,000
42,000
MSL/ROCKET COMPONENTS .................................
311
311
---
ADVANCED LAND MOB SYSTEMS CONCEPTS ....................
9,242
9,242
---
LANDMINE WARFARE/BARRIER DEV ..........................
10,799
10,799
---
COMBAT VEHICLE PROPULSION SYS .........................
12,935
12,935
---
CMBT VEH TURRET AND CHASSIS SUBSYS ....................
ELECTRIC POWER SOURCE
7,876
7,876
---
S ................................
NIGHT VISION ADVANCED DEVELOPMENT .....................
5,085
35,715
5,085
35,715
---
---
REMOTELY PILOTED VEHICLES/DRONES ......................
4,514
4,514
---
MANPOWER AND PERSONNEL ................................
4,614
3,614
-1,000
COMBAT
MEDICAL MATERIAL ...............................
190
190
- -
COMBAT
ENGINEERING SYSTEMS ............................
269
269
---
HUMAN
FACTORS IN TNG/DEER EFFECT ......................
3,118
3.118
---
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ADV ELECTRONIC DEVICES DEV ............................ 2,239 2,239 ---
EDUCATION AND TRAINING ................................ 9,382 9,382 ---
TRAIMING SIMULATION ................................... 2,217 2,217 ---
SOLDIER SUPPORT/SURVIVABILITY ......................... 3,140 3,140 ---
ADV DEV OF AUTOMATIC TEST EQ/SYS ...................... 5,355 14,355 +9,000
TECHNICAL VULNERABILITY ............................... . 12,938 12,938 ---
DRUG AND VACCINE DEVELOPMENT .......................... 5,087 5,087 MEDICAL DEFENSE AGAINST CHEM WARFARE ................. 2+941 2+941 ---
DEMILITARIZATION CONCEPTS ............................. 11+9:1 9+500 -2,421
------------ ------------ -----------
TOTAL, ADVANCED TECHNOLOGY DEVELOPMENT .............. 218,120 207,702 -10,418
BMD ADVANCED TECHNOLOGY ............................... 126,883 126,883 ---
BALLISTIC MSL DEF SYS TECH ............................ 353+685 336,685 -17,000
------------ ------------ ------------
TOTAL, STRATEGIC PROGRAMS ........................... 480,568 463,568 -17,000
JOINT SURVIVABILITY INVESTIGATIONS .................... 931 931 ---
SURF-TO-SURF MSL ROCKET SYS ........................... 2+997 2,997 ---
CORPS SUPPORT WEAPON SYSTEM ........................... 10,762 10,762 ---
JOINT SERVICE SMALL ARMS PROGRAM (JSSAP) .............. 3,529 5,500 +1,971
LETHAL CHEMICAL MUNITIONS CONCEPTS .................... 8,182 8,182---
LANDMINE/BARRIER SYS .................................. 6,066 6,066 ---
COMBAT SUPPORT MUNITIONS .............................. 3,157 3,157 ---
FIELD ARTILLERY AMMO DEV .............................. 24,722 24,722 FIELD ARTILLERY CANNON SYSTEMS ........................ 2,037 2,037 ---
ARMORED CMBT SPT VEHICLE FAMILY ....................... 101 101 ---
ADVANCED MULTI-PURPOSE ARMORED SYSTEM ................. 20,805 8,000 -12,805
PHYSICAL SECURITY ..................................... 3,822 3,822 ---
IDENTIFICATION-FRIEND OR FOE DEV ...................... 9,496 9,496 ACFT SURV/EW SELF-PROTECTION .......................... 12,197 12,197 - --
JOINT TACTICAL INFO DISTRIBUTION SYSTEMS .............. 18,722 18,722 ---
CHEMICAL DEFENSE MATERIEL CONCEPTS .................... 20,084 20,084 ---
TACTICAL AUTOMATION ................................... 22,008 21,000 -1,008
COMBAT SUPPORT EQUIPMENT .............................. 6,720 6,720 ---
DIV AIR DEFENSE COMD/CNTRL ............................ 10,134 9,200 -934
SINGLE CHANNEL GRD/ABA RADIO SUB-SYS .................. 15,225 12,225 -3,000
AIRCRAFT WEAPONS ...................................... 3,504 3,504 ---
AIR MOBILITY SUPPORT EQUIPMENT ........................ 2,310 2,310 ----
UH-60A BLACKHAWK ...................................... 6,158 6,158 ---
ADVANCED ATTACK HELICOPTER ............................ 92,162 92,162 ---
COBRA TOW ............................................. 19,676 19,676 ---
SYNTHETIC FLIGHT TRAINING SYSTEMS ..................... 8,333 3,080 -5,253
AIRDROP EQUIP DEVELOPMENT ............................. 3,126 2.926 -200
ARMY HELICOPTER IMPROVEMENT FROG ...................... 38,617 38,617 ---
SURVEILLANCE SYSTEM ................................... 3,921 3,921 STINGER ............................................... 16,171 16,171 - -
PATRIOT (SAM-D) ....................................... 57,991 57,991 ---
HELIBORNE MISSILE-HELLFIRE ............................ 24,300 24,300 PERSHING II ........................................... 151,052 151,052 ---
GRASS BLADE ........................................... 29,919 29,919 GENERAL SUPPORT ROCKET SYS ............................ 38,291 38,25'1 DIVISION AIR DEFENSE GUN .............................. 30,042 30,042 JOINT TACTICAL FUSION PROGRAM ......................... 38,547 30,547 -8,000
INFANTRY SUPPORT WEAPONS .............................. 11,740 11,740 ---
ARMY SMALL ARMS PROGRAM ............................... 393 393 ---
COMBAT SUPPORT SYSTEMS ................................ 3,045 3-045 ---
LETHAL CHEMICAL MUNITIONS ............................. 2,175 2,175 ---
COUNTERMINE AND BARRIERS .............................. 2,981 2,981 ---
FIGHTING VEHICLE SYS .................................. 103,671 103,671 ---
LANDMINE WARFARE ...................................... 8,146 4,963 -3,183
TANK SYSTEMS .......................................... 28,495 28,495 COPPERHEAD ............................................ 3,303 3,303
HIGH MOBILITY MULTI-PURPOSE VEHICLE ................... 3,021 3,021 ---
FIRE INTERGRAYION SPT TEAM VEH ........................ 9,628 9,628 INDIRECT FIRE TRAINING MUNITIONS ...................... 1,341 1.341 TANK GUN COOPERATIVE DEVELOPMENT ...................... 82+978 82,978 ---
FLD ARTY AMMUNITION ................................... 1,461 1,461 105MM TANK AMMUNITION ................................. 5,210 5,210 ---
COMM ENGINEERING DEV .................................. 8.891 8,891 ---
JOINT TACTICAL INFO DISTRIBUTION SYSTEMS .............. 15,902 15,902 ---
UNATTENDED GROUND SENSORS ............................. 6,948 6,948 ---
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
MODULAR INTEGRATED COMM AND NAVIGATION SYS ............
17.643
17,643
RADIOLOGICAL DEFENSE EQUIPMENT .........................
308
308
- -
IDENTIFICATION-FRIEND OR FOE EQ .......................
2,424
2.424
---
NIGHT VISION DEVICES ..................................
5.140
5.340
---
ACFT 5URV/EN SELF-PROTECTION SYS ......................
TACTICAL C3 SYSTEMS ENGINEERING .......................
14,448
8,128
14,448
8,128
---
COMBAT FEEDING, CLOTHING AND EQUIPMENT ................
3,536
2.536
-1,000
TACTICAL ELECTRICAL PO HER SOURCES .....................
1.544
1,544
GENERAL COMBAT SUPPORT ................................
8,018
8,018
---
PHYSICAL SECURITY .....................................
5,777
5,777
---
BIOLOGICAL DEFENSE MATERIEL ...........:...............
1,036
1,036
CHEMICAL DEFENSE MATERIEL .............................
COMMAND AND CONTROL ...................................
REMOTELY PILOTED VEHICLES .............................
37,807
15,008
36,384
37,807
15,008
73.348
+36,964
AUTOMATIC TEST SUPPORT SYSTEMS ........................
4.998
4,998
---
STANDOFF TARGET ACQUISITION SYSTEM ....................
69,776
---
-69,776
JT INTEROPERABILITY TAC COMD/CNTRL ....................
29,554
29,554
---
JOINT CB CONTACT POINT AND TEST .......................
1.417
1,417
---
NV ANTI-TANK ASSAULT WPN SYS (TOW) ....................
6,588
6,588
---
ADV FIELD ARTY TAC DATA SYS ...........................
? 5,976
5,976
---
CHAPPARAL .............................................
19,676
19,676
---
SAM HAWK/HAWK IMP FROG ................................
39,558
39,558
---
COMBAT VEHICLE IMPROVE PROG ...........................
. 29,485
29,485
---
AN/TSO-73 MODIFICATIONS ...............................
532
532
- -
FORCE LEVEL I MANEUVER CTRL SYSTEM SIGMA ..............
14,869
11,000
-3,869
JT TACTICAL COMM FROG .................................
48,107
43,107
-5,000
SATCOM GROUND ENVIRONMENT .............................
36,438
36,438
---
EUCOM C3 SYSTEMS ......................................
4,028
4,028
---
CLASSIFIED PROGRAMS ...................................
127,151
114,245
-12,906
TOTAL,
TACTICAL PROGRAMS... .............. .... ...
------------
1,660,700
------------
1,572,701
------------
-87,999
MAPPING
AND GEODESY ...................................
1,044
1,044
---
AIRCRAFT
AVIONICS .....................................
11,537
11,537
---
MAPPING
AND GEODESY ...................................
100
100
---
NAVSTAR
GLOBAL POS SYS (USER EO) ......................
21,002
---
-21,002
STRATEGIC ARMY COMMUNICATIONS .........................
789
789
---
LONG-HAUL COMMUNICATIONS (DCS) ........................
7,483
7,483
---
CLASSIFIED PROGRAMS ...................................
26,344
26,344
---
TOTAL, INTELLIGENCE AND COMMUNICATIONS ..............
------------
68,299
------------
47,297
------------
-21,002
NON-SYSTEM TRAINING DEVICES ...........................
1,384
1,384
ACFT ENGINE COMPONENT IMPROVE PROG ....................
11,644
11,644
NON-SYSTEM TNG DEVICES ENGR ...........................
11,363
11,363
METEOROLOGICAL EQUIPMENT SYSTEMS ......................
2.104
2,104
TRADOC STUDIES AND ANALYSES ...........................
1,547
1,547
AVIATION ENGINEERING FLIGHT ACTIVITY ..................
5.443
5,443
KWA.JALEIN MISSILE RANGE ...............................
140,985
140,985
SUPPORT OF DEVELOPMENT TESTING ........................
36,728
36,728
MATERIAL SYSTEMS ANALYSIS .............................
. 12,458
12,458
SUPPORT OF OPERATIONAL TESTING ........................
42,691
42,691
DEFENSE SYSTEMS MANAGEMENT COLLEGE ....................
203
203
PROGRAM-WIDE ACTIVITIES ...............................
67,815
63,915
INTL COOPERATIVE RESEARCH AND DEV .....................
981
981
TECHNICAL INFO ACTIVITIES .............................
4,632
4,632
DARCOM MAJOR RANGE/TEST FACIL .........................
292,109
270,000
-22,109
DOD MUNITIONS EFFECT/EXPLOSIVE SAFETY STAND ...........
7,103
7.103
---
DOD HIGH ENERGY LASER SYSTEMS TEST FAC ................
40,349
40,349
---
PRODUCTIVITY INVESTMENT FUNDING .......................
3,900
3.900
---
INSTL AUDIOVISUAL SPT (R/D) ...........................
2,280
2,280
---
MGT HO (RESEARCH/DEVELOPMENT) .........................
39.792
39,792
---
CLASSIFIED PROGRAMS....... ....... .........
24.240
24,240
---
TOTAL, DEFENSEWIDE MISSION SUPPORT ..................
------------
749,751
------------
723,742
------------
-26,009
FUEL PRICE ADJUSTMENT .................................
---
-3,000
-3,000
ARMY GUARD AND RESERVE EQUIPMENT TRANSFER .............
---
-5,300
-5,300
REDUCTION, INFLATION/OFFSETS ..........................
-5,000
-5,000
---
TOTAL, RESEARCH, DEVELOPMENT, TEST I EVAL, ARMY.....
3,768,500
3,577,119
-191,381
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257
RESEARCH, DEVELOPMENT, TEST AND EVALUATION, NAVY
Appropriation, 1981 .................................................................................. $4,978,855,000
New Obligational Authority, 1982:
Estimate .............................................................................................. 5,885,488,000
Recommended ...............................................................................................5,517,671,000
Reduction ....................................................................................................... 367,817,000
The Committee recommends an appropriation of $5,517,671,000
in new obligational authority for the Research, Development, Test
d Evaluation activities of the Navy in fiscal year 1982.
an
The recommendation is a reduction of $367,817,000 below the
riation
ro
a
th
th
p
pp
e
an
budget estimate, and $538,816,000 more
provided in fiscal year 1981.
AUTHORIZATION CHANGES
The Committee recommends the following changes in the budget
estimate, in accordance with changes recommended by the authori-
zation conference:
Budget
Reouest
Committee
Recommended
Change from
Reouest
---
AIRCRAFT TECHNOLOGY.???...?...???..?.....,?.?.....,.:.
30,198
25,000
-5,198
-701
ADVANCED AIRCRAFT SUBSYSTEMS .....................?....
5,201
4,500
ELECTRIC DRIVE ............................ ......
550
-
-550
992
-1
ADV ELEX COMPONENTS.......,... ...
1+99
---
+
409
7
UNDER-GRAD JET FLT TNG SYS ........................?,?.
12,409
5,000
,
-
000
ABN ANTI-SUB WARFARE SYS ............................??
2,895
5,895
+3,
60
V!STOL ACFT DEV ..........................?............
14,960
---
_14,9
-11
MEDIUM RANCE A-A SURF MSL ...........................??
19,011
19,000
7
??
RADAR SURVEILLANCE EO.,,...?..?,??,.,?,....?,,.??? ?
2,097
---
-2,09
....
SHIP SYSTEM ENG STANDARD (SEAMOD) .................
1,999
10,000
+8,001
0
SUB TACTICAL WARFARE SYS ...........................-
79,640
49,640
-30,00
!HIP DEVELOPMENT (ADV) .............................-
20,642
11,000
-9,642
5
000
.
SPECIAL TEST SYSTEMS ........................... . .....
45,000
---
-4
,
NAVY AIR COMBAT FIGHTER (F-18) ........................
224,812
190,000
-34,812
SUB TACTICAL WARFARE SYS ..............................
127,057
107+057
-20,000
SHIP DEVELOPMENT (ENG) ................................
91,897
70,000
-21,897
769
CHEMICAL WARFARE WEAPONS ..............................
3,731
7,500
+3,
FIRE CONTROL SYS ELECTRO OPTICS .......................
7,203
24,000
+16,797
FROTO CARRIER OPER TEST/EVAL SITE .....................
4,997
---
-4,997
+
024
F-14A.................................................
11,976
17,000
5,
AMRAAM DUE ............................................
2,396
---
-2,396
SPECIAL WARFARE CRAFT
2+000
+2,000
00
TILT FAN VSTOL TECHNOLOGY .................???.?.??????
---
10,000
+10,0
...,...'..,.... ..................................
AV-8B+ .
___
5+000
+8,000
NAVIGA I'I ON SATELLITE ....................??............
16,841
---
-16,841
... ..........
NAVSTAR GLOBAL POS SYS (USER E0) ..........
34,362
---
-34,362
34,362
GLOBAL POSITIONING SYSTEM .............................
---
34,000
+34,000
AERIAL TARGET SYS DEV .................................
61,989
60,000
-1,989
RDTE INSTRUMENTATION/MATERIAL SPT ...................??
41,579
45,579
+4,000
PROGRAM FUNDING ADJUSTMENTS
The budget request included amounts for a number of programs
which exceeded by unjustifiably large percentages the amounts
provided for fiscal year 1981. The Committee accordingly recom-
mends the following reductions:
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
Surf/Aero Target Surv .......................................................................
35,536
-2,992
32,544
Human Factors/Simulation .................................................................
7,973
-1,195
6,778
Logistics Technology ..........................................................................
14,603
-1,731
12,872
Adv Marine Bio ..................................................................................
4,089
-300
3,789
Training Device Tech ..........................................................................
8,252
- ;Q0
7,552
Acft Surv/Vuln ...................................................................................
10,825
-1,000
9,825
Studies & Anal (MC) .........................................................................
4,049
-549
3,500
Civ Trng/Educ ....................................................................................
1,290
-290
1,000
COMMAND/CONTROL TECHNOLOGY
The Navy budgeted $1,800,000 for continued development of the
S-1 computer. The Committee repeats its guidance of last year that
no more funds will be provided for this project. The Committee
recommends a reduction of $1,800,000 from Command/Control
Technology.
DIRECTED ENERGY TECHNOLOGY
The Committee agrees with concerns expressed by the House
Armed Services Committee that high technology efforts, such as
those in the Navy's Directed Energy program, should remain under
the cognizance of DARPA. The Committee recommends a total of
$3,360,000 for Directed Energy Technology, a reduction of
$3,633,000 from the budget request.
STRATIFIED CHARGE ROTARY COMBUSTION ENGINE
Since 1977, the Marine Corps has been pursuing development of
a stratified charge rotary combustion engine. Because this technol-
ogy offers promise for improved fuel economy and use of a variety
of fuels, the . Committee believes that it should continue to be
pursued. The Committee recommends that $9,500,000 be provided
above the budget for Marine Corps Stratified Charge Rotary Com-
bustion Engine.
TACTICAL C3 COUNTERMEASURES
This program included $500,000 for a Marine Corps project, the
ZUNI Expendable Jammer, which has been cancelled. The Commit-
tee recommends a* reduction of $500,000 for Tactical C3 Counter-
measures.
ARMY/NAVY SAM TECHNOLOGY
The Committee recommends this program be funded at the level
originally contained in the budget, a figure agreed upon jointly by
the Navy and OSD. The Committee recommends a total of
$11,000,000 for Army/Navy SAM Technology.
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 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
ADVANCED DATA COMMAND SYSTEMS
This program, originally cancelled by the Navy for fiscal year
1981 and beyond, is being reinstated after a year's interruption.
The Committee recommends $2,655,000 for Advanced Data Com-
mand Systems, one half the requested amount.
RETRACT SILVER
The Committee recommends that no funds be provided for Re-
tract Silver.
ATTACK SUBMARINE DEVELOPMENT
Of funds requested for Attack Submarine Development, approxi-
mately one half were for conceptual work on a new class SSN, an
effort which the Navy has abandoned. The Committee recommends
a reduction of $5,000,000, which leaves a total of $4,968,000 for
continued work on improvements to the SSN-688 class submarine.
DIESEL ELECTRIC SUBMARINES
The Committee is concerned with the long term prospects for
maintaining needed inventories of attack submarines. The Navy
testified that it desires an attack submarine inventory of between
130 and 140. However, our current inventory of these critically
important weapons is only 90, and in the period between 1989 and
1999, 45 are scheduled for retirement. It appears overly optimistic
to project that the Navy could devote sufficient shipbuilding funds
to replacing these submarines entirely with nuclear powered craft.
Thus the Committee recommends $2,500,000 be added above the
budget for examination of using diesel electric submarines as a
complement to our nuclear attack force. While the Committee
recognizes that for many demanding missions there is no substitute
for nuclear submarines, there may well be missions for which
lower cost diesel vessels are capable, thus freeing nuclear subma-
rines for missions to which they are uniquely suited.
The Committee expects the Navy to make a detailed evaluation
of the offer from the West German HDW firm to provide a diesel
design that could be produced in U.S. shipyards and to examine
other potential design options that are available. The Navy is
requested to provide a report on its evaluation to the Committee no
later than May 1, 1982.
MK-48 ADCAP
The Committee is deeply concerned over the significant cost
increases in the MK-48 ADCAP program. Consequently, the Com-
mittee directs that the Navy conduct a "Should Cost Study" of the
ADCAP program, and present it to the Committee no later than
March 1, 1982. Additionally, the Navy is directed not to obligate or
expend funds provided for the MK-48 ADCAP program until 30
days after the Secretary of the Navy states in writing to the
Committee the costs and schedules of the restructured program, his
satisfaction that these are fixed with reasonable certainty, and his
belief that eventual procurement will be affordable.
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
Concerns have been expressed that reduced funding for the
DDGX will cause program officials to reduce or eliminate efforts
related to modularized design and to data buss multiplexing. These
efforts, of the type embodied in the SSES and Shipboard Multiplex
programs, should remain integral to the DDGX and future ship
designs, and are key in reducing support and overhaul costs. The
Committee desires that the DDGX program maintain these efforts
at approximately the same levels as originally planned, and re-
quests that progress and funding in these areas be specifically
discussed in annual reports on the DDGX.
MARINE CORPS INTELLIGENCE/EW (ADVANCED)
The Marines requested $357,000 for a new battlefield radar, an
effort which should be foregone in favor of pursuing product im-
provements of the AN/PPS-15 jointly with the Army. The Marines
requested $301,000 for a seismic sensor project which has been
delayed two years. The Committee recommends a total of
$2,209,000 for Marine Corps Intelligence/EW (Advanced), a reduc-
tion of $658,000 from the budget request.
MOORED SURVEILLANCE SYSTEM
The Rapid Deployable Surveillance System has experienced tech-
nical difficulties, schedule slippage, and cost growth. The Navy
originally did not fund RDSS in the fiscal year 1982 budget because
it appeared to be unaffordable and lacked sufficient priority. The
Committee recommends a reduction of $6,000,000. The resulting
total of $5,000,000, together with unobligated prior year funds, will
adequately fund the program while the Navy reexamines the
strength of its commitment to this program.
AVIONICS DEVELOPMENT/VAST
The Committee finds that an unjustifiably large amount has
been requested for continued R&D on the AN/AYK-14 computer, a
device which has been operational since 1977. The Committee rec-
ommends a total of $10,357,000 for Avionics Development/VAST, a
reduction of $4,687,000 from the budget request.
The Marines requested $5,229,000 to begin development of a new
transport helicopter to replace the CH-46 and CH-53 A/D. The
Committee is concerned that this program, which the Marines say
could cost as much as $2,400,000,000 to develop, would be unafford-
able. Further, a new production program has been announced for
building CH-53E's to replace existing assets. That program in-
cludes 94 CH-53E's for the Marines, which should provide ade-
quately for their needs. The Committee recommends that no funds
be provided for HXM Helicopter.
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
SHIP DEVELOPMENT (ENGINEERING)
The Committee denies the Navy's request of $22,000,000 for
survey and estimating work on inactive carriers. The Committee
directs that $2,000,000 of the funds provided be used for survey
inspection and cost estimating work associated with possible reacti-
vation of Des Moines class cruisers now in mothballs at the Phila-
delphia Navy Shipyard.
SUBMARINE WARFARE TRAINING DEVICES
The Navy requested $1,831,000 for evaluation of the Submarine
Advanced Reactive Tactical Training System (SMARTTS). The
Committee is concerned that the development cost for this system
has doubled. The Committee recommends that no funds be pro-
vided for SMARTTS, and that any additional evaluation be carried
on within existing funds. The recommended total for Submarine
Warfare Training Devices is $4,553,000.
C2 SURVEILLANCE/RECONN SUPPORT
For reasons explained in the classified annex to this report, the
Committee recommends a reduction of $2,465,000 for C2 Surveil-
lance/Reconn Support.
JOINT TACTICAL COMMUNICATIONS
For reasons discussed at the beginning of the RDT&E section of
this report, the Committee recommends reductions of $750,000 in
Joint Tactical Communications, Marine Corps and $2,000,000 in
Joint Tactical Communications, Navy.
SECURITY/ INVESTIGATIVE ACTIVITIES
The Committee finds, as it did last year, that this Navy request
is for developments which duplicate those pursued by civilian in-
vestigative and law enforcement agencies. The Committee recom-
mends no funds be provided for Security/Investigative Activities.
AIM-7M TEST AND EVALUATION
Technical problems with the AIM-7M have necessitated addition-
al test and evaluation activities. The Committee recommends pro-
viding $5,000,000 above the budget for this purpose.
PRODUCTIVITY ENHANCEMENT
The Navy requested $13,508,000 to begin a new program intend-
ed to increase the productivity of its R&D laboratories. This is a
worthy goal, and one which the Committee supports. However,
until objective criteria are developed and more information is ob-
tained on potential paybacks, the Committee believes that a small-
er pilot program will be adequate. The Committee recommends a
total of $6,508,000 for Productivity Enhancement.
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
CONSULTANTS, ANALYSES, AND STUDIES
For reasons explained earlier in this report, the Committee rec-
ommends a reduction of $48,000,000 from the RDT&E, Navy ac-
count to be applied against consultants, analyses and studies.
GAS TURBINE FUEL EFFICIENCY -
Many Navy vessels are powered by the LM-2500 gas turbine
engine. Because increased fuel efficiency would result in substan-
tial savings in operating costs, the Committee believes that RDT&E
efforts to investigate such a possibility will be a wise investment.
The Committee recommends that $7,000,000 be provided above the
budget for Gas Turbine Fuel Efficiency.
SPECIAL WARFARE CRAFT
The Committee concurs with the recommendation of the Author-
ization Conference that $2,000,000 be added for Research and De-
velopment of a Special Warfare Craft. The Committee agrees that a
requirement exists for the development of a small missile boat
capability and directs the Navy to evaluate two or more design
alternatives.
MEDIUM DEPTH MINE
The Medium Depth Mine is a mine that could be used at depths
between those which current generation shallow and deep water
assets are employed by naval forces. The Navy is currently assess-
ing development acceleration of a Medium Depth Mine as this
capability could enhance the overall ASW environment. The
Captor Deep Water Mine is a moored influence activated antisub-
marine mine whose operational envelope covers submarine targets
at all water depths. The Committee expects the Navy to submit
their analysis on the need to employ a Medium Depth Mine, in-
cluding an evaluation of developing a Captor Mine variant in par-
tially meeting the medium depth requirement. This report should
include disclosure of mission characteristics, as well as any cost
and schedule advantage in developing a Captor Mine variant.
EXTENDING LIFE OF SUBROC
SUBROC is a nuclear depth bomb and is presently the only
antisubmarine stand off weapon carried by U.S. attack submarines.
The new ASW stand off weapon is scheduled to begin replacing
SUBROC by the late 1980s. However, the Navy's acquisition pro-
gram for the ASW stand off weapon was recently restructured and
is currently experiencing cost overruns and anticipated schedule
delays. The Committee is concerned the Navy will not meet its
planned IOC for the ASW stand off weapon and should carefully
consider supplementing the planned service life extension program
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
for SUBROC by ensuring compatibility -of all SSN fire control
systems with the SUBROC system and extending the service life of
the full inventory of the weapon. This expansion will provide a
credible nuclear stand off weapon capability until the new stand
off weapon enters the fleet. The SUBROC life extension action
would significantly lessen any additional military input as a result
of any further delays in the IOC of the new standoff weapon. The
Committee expects a full report on the Navy's extended refurbish-
ment plan, its impact on lessening the gap caused by any delays in
the ASW/SOW program and cost and refurbishment schedule in-
formation.
ASW STAND OFF WEAPON
The ASW Stand Off Weapon SOW System was approved by the
Secretary of Defense in 1980 and is intended to develop a long
range anti-submarine weapon by the late 1980s. Navy testimony
defined an acquisition strategy that implied a competitive identifi-
cation and exploration of alternative design concepts including an
actual live firing during the development and validation phase.
However, the strategy selected by the Navy was not directed at
these expanded objectives and a single contractor was selected for
the development process. The Committee believes this is an alter-
ation in the program's direction and source selection criteria are
not sufficiently justifiable in making a single source award. Fur-
ther, the Committee believes this program as structured currently
has high risk and experience has shown that sole source procure-
ment carries a significant cost penalty. The Committee believes
procurement rates and inventory objectives for the ASW/SOW pro-
gram fully justify. qualification for second source production. The
Committee expects a full report on Navy plans for developing
second source production, including current and projected program
costs, and scheduling data.
The Committee restates its strong support for this program,
which will provide a substantial increase in the antiair warfare
capability of the MK 92 fire control system through the addition of
a new four-faced, x-band phased array radar to the system for use
on the FFG-7 class frigates. The primary aim in this program's
development should be the earliest possible introduction of this
system into the fleet.
To date, the start of this program has been unacceptably delayed.
Therefore, the committee requests that this program be executed
without further delay. Special emphasis should be given to the
early development of the phased array radar. The committee also
requests that the MK 92 upgrade program be assigned a separate
program element.
FLEET TACTICAL COMMUNICATIONS
The budget included a request of funds for a program entitled
Fleet Tactical Communications R. & D. This program provides a
phased approach to provide secure, anti jam voice and data commu-
nications in Navy ships and tactical aircraft. The Committee notes
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
that similar anti jam communications programs are underway in
the Army and the Air Force.
The Committee supports the need for anti jam communications.
However, the Committee has concerns regarding the coordination
of service goals for these programs. Therefore, the Committee will
closely .monitor the Fleet Tactical Communications program and
other such DOD programs to assure that a cost-effective and oper-
ationally-effective approach is taken in reconciling individual serv-
ice goals with joint needs.
A-6 SQUADRONS
The Navy budgeted $9,978,000 for A-6 Squadrons, to be used to
continue development of the All Weather Standoff Attack Control
System (AWSACS). The Committee fully supports this important
system, and does not agree with recent proposals to fund AWSACS
at a lesser amount in fiscal year 1982. The Committee recommends
the budget request, and directs the Navy to use the full appropri-
ated amount for AWSACS.
EXTREMELY LOW FREQUENCY COMMUNICATIONS
The Committee held extensive hearings on strategic communica-
tions, including an examination of recent proposals by the Admin-
istration to revive the Extremely Low Frequency (ELF) Communi-
cations System. The most recent configuration is for a system
significantly less capable than that originally envisioned. The Com-
mittee notes that the Chief of Naval Operations testified earlier in
the year that going forward with ELF was not essential at this
time because no threat has emerged to cause concern over the
survivability of our SSBN force. The Committee also notes testimo-
ny that the proposed system is vulnerable, and cannot be expected,
to survive in wartime. The Committee concludes that ELF is an
outmoded concept in search of a mission and should not be contin-
ued. The Committee recommends no funds for Extremely Low Fre-
quency Communications.
The Committee recommends providing $34,000,000 for 'the NAV-
STAR Global Positioning System in Navy RDT&E, the authorized
amount. This action is consistent with the Committee's recommen-
dation to provide the authorized amount in Air Force RDT&E for
NAVSTAR.
The following schedule shows the budget estimate, the recom-
mended appropriation, and the change from the budget estimate
(in thousands of dollars) for fiscal year 1982:
 Approved For Release 2007/03/03: CIA-RDP89M00610R000100040004-8
Budget Committee Change from
Request Recommended Request
----------------------------------------------------------------------------------------
IN-HOUSE LAB INDEPENDENT RESEARCH ..................... 21,363 21,363 ---
DEFENSE RESEARCH SCIENCES ............................. 260,611 251,572 -9,039
AIRCRAFT TECHNOLOGY ................................... 30,198 25,000 -5,198
MISSILE PROPULSION TECHNOLOGY ......................... 10,042 10,042 ---
STRIKE WARFARE WEAPONRY TECHNOLOGY .................... 21,283 21,283 ---
NUCLEAR PROPULSION TECHNOLOGY ......................... 47,633 47,633 ---
SHIPS/SUBS/BOATS TECH ................................. 40:953 40,953 ---
UNDERSEA WARFARE WEAPONRY TECHNOLOGY................. 23,360 23,360 ---
UNDERSEA TARGET SURVEILLANCE .......................... 38,531 38,531 ---
SURF/AEROSPACE TARGET SURVEIL TECH .................... 35,536 32,544 -2,992
COMMAND/CONTROL TECHNOLOGY ............................ 30,312 29,299 -1,013
COUNTERMEASURES TECHNOLOGY ............................ 27,438 27,438 ---
HIGH ENERGY LASER ..................................... 57,973 57,973 ---
HUMAN FACTORS/SIMULATION TECH ......................... 7:973 6:778 -1:195
BIOMEDICAL TECHNOLOGY ................................. 10,846 9,663 -1,183
OCEAN/ATMOSPHERIC SUPPORT TECHNOLOGY .................. 23,594 23,594 ---
LOGISTICS TECHNOLOGY .................................. 14,603 12,872 -1,731
MATERIALS TECHNOLOGY .................................. 32,428 32,428 ---
ELECTRONIC DEVICE TECHNOLOGY .......................... 25,346 25,346 ---
PERSONNEL SPT TECH .................................... 6,507 6,507 ---
CHEMICAL/BIOLOGICAL DEFENSE TECH ...................... 1,541 1,541 ---
ENERGY AND ENVIRONMENTAL PROTECTION ................... 8,171 8,171 ---
LAB INDEPENDENT EXPLORATORY DEV ....................... 10,187 10,187 ---
DIRECTED ENERGY TECHNOLOGY ............................ 6,993 3,360 -3,633
------------ ------------ ------------
TOTAL. TECHNOLOGY BASE .............................. 793,422 767,438 -25,984
AVIONICS .............................................. 6,851 6,851
ADV HELICOPTER DEV .................................... 4:794 4,794 ---
ENVIRONMENTAL APPLICATIONS ............................ 4,684 4,684 ---
AIRCRAFT PROPULSION ....... ........... 9,748 9,748 ---
AIRBORNE LIFE SUPPORT SYSTEMS ......................... 5,893 5,893 ---
ADVANCED AIRCRAFT SUBSYSTEMS .......................... 5,201 4,500 -701
AIRCRAFT SYSTEMS ...................................... 4,844 4,844 ---
ADV ARM SYS TECH ...................................... 5,969 5,969 ---
ADV AIR LAUNCHED AIR-TO-SUR MSL SYS ................... 4,039 4,039 ---
A/A MSL ADV TECH DEMOS ................................ 4,464 4,464 ---
SHIP PROPULSION SYSTEM ................................ 12,584 12,564 ---
ADV SOFTWARE/COMPUTING TECH ........................... 4,542 4.542 ---
ELECTRIC DRIVE ........................................ 550 --- -550
SURFACE LAUNCHED MUNITIONS ............................ 4,724 4,724 ---
JT SERV EXPLOSIVE ORD BEV ............................. 3,380 3,380 ---
HUMAN FACTORS ENG DEV ................................. 4,150 4,150 ---
OCEANOGRAPHIC INSTRUMENTATION DEV ..................... 3,117 3,117 ---
MEDICAL DEVELOPMENT ................................... 11,644 9.044 -2,600
MANPOWER EFFECTIVENESS ................................ 3,023 3,023 ---
ADVANCED MARINE BIOLOGICAL SYSTEM ..................... 4,089 3,789 -300
ADV ELEV. COMPONENTS ................................... 1,992 --- -1,992
OCEAN ENGINEERING TECH DEVELOPMENTS ................... 11:8,867 11:867 ---
EDUCATION AND TRAINING ................................ 391 3,891 ---
ENVIRONMENTAL PROTECTION .............................. 6:819 6,819 ---
NAVAL SPECIAL WARFARE ................................. 3,052 3:052 ---
NAV TECH INFO PRESENT SYS ............................. 1,316 1:316 ---
MANUFACTURING TECH .................................... 3,660 3,660 ---
MC RDV MANPOWER TRAINING SYS .......................... 1,489 1,489 ---
TRAINING DEVICE TECH .................................. 8,252 7,552 -700
ABN ELECTRO-MAG/OPT SYS ............................... 8,407 8,407 ---
SURF ELECTROMAGNETIC OPTICAL SYS ..................... 3,222 3,222 ---
PROTO MPWR/PERSONNEL SYS .............................. 5,051 5,051 ---
MC DIESEL ROTARY ENGINE ............................... --- 9,500 +9,500
----------- ------------ ------------
TOTAL. ADVANCED TECHNOLOGY DEVELOPMENT .............. 167.308 169,965 +2,657
 Approved For Release 2007/03/03: CIA-R DP89M00610R000.100040004-8
SPACE TECHNOLOGY ...................................... 7,975 7,975 ---
SSBN SUBSYSTEM TECHNOLOGY ............................. 10,150 10,150
STRATEGIC TECHNICAL SUPPORT ........................... 6,082 6,082
FLEET BALLISTIC MISSILE SYSTEM ........................ 70,593 70,593
--
SBN SECURITY TECHNOLOGY PROGRAM ...................... 41,783 41,783
TRIDENT ............................................... 102,760 102,760 -----
-
EXTREMELY LOW FREQUENCY COMM .......................... 34,874 --- -34,874
GRYPHON ............................................... 22,260 22,260
HYDRUS ................................................ 898 898 ---
SPACE SURVEILLANCE ...........555 555 ---
MINIMUM ESSENTIAL EMER COMM NETWORK ................... 3,139 3,139 ?--
------------ ------------ ------------
TOTAL, STRATEGIC PROGRAMS ........................... 540,611 505,737 -34,874
AIRBORNE ASW DETECTION SYS ............................ 2,311
ABN ELECTRONIC WARFARE EQ ............................. 9.987
UNDER-GRAD JET FLT TNG SYS ............................ 12,409
TACAIR IR C/M ......................................... 4,831
HELICOPTER IR C/N ..................................... 5,329
TAC COMD/CNTRL/COMM C/M............................... 6.791
AIRCRAFT ARMAMENT SYS ................................. 6.153
CV TACTICAL SUPPORT CENTER ............................ 4.605
ABN ANTI-SUB WARFARE SYS .............................. 2,895
V/STOL ACFT DEV ....................................... 14,960
ACOUSTIC SEARCH SENSORS ............................... 4,643
AIRBORNE MINE COUNTERMEASURES ......................... 22,476
TACTICAL AIRBORNE RECONNAISSANCE ...................... 6,026
ACFT SURVIVABILITY/VULNERABILITY ...................... 10,825
AH-IT COMP ROTOR BLADE ................................ 2,268
NATO IDENTIFICATION SYS ............................... 2,489
AIR TO GROUND WEAPONS ................................. 8,684
ARMY/NAVY SAM TECH .................................... 13,568
SUB ASW STANDOFF WPN .................................. 50.084
MEDIUM RANGE A-A SURF MSL ............................. 19,011
REACTOR PROPULSION PLANTS ............................. 6,069
ADVANCED MINE COUNTERMEASURES ......................... 41,142
ACOUSTIC COMMUNICATIONS ............................... 2,711
SUBMARINE SONAR DEV ................................... 45,923
NEW SHIP DESIGN ....................................... 8,000
SHIPBOARD SYS COMPONENT DEVELOPMENT ................... 8,362
SHIPBOARD DAMAGE CONTROL .............................. 18,739
ADVANCED IDENTIFICATION TECHNIQUES .................... 3,813
RADAR SURVEILLANCE EO ................................. 2,097
ADVANCED COMMAND DATA SYSTEMS ......................... 5,310
ADVANCED COMMUNICATIONS ............................... 2,661
SURFACE ELEC WARFARE .................................. 3,918
SUBMARINE COMBAT SYS DEV .............................. 40,625
PILOT FISH ............................................ 57.462
ANTI-SUB WARFARE MOBILE TARGETS ....................... 857
OVER-THE-HORIZON TARGETING ............................ 16,603
MY 130 STEEL (NEW SSN MATERIAL) ....................... 1,665
SHIP SYSTEM ENG STANDARD (SEAMOD) ..................... 1,999
RETRACT SILVER ........................................ 63,528
RETRACT AMBER ......................................... 12,960
DIESEL ELEC SUB ....................................... ---
SURFACE ASW ............................................ 9,203
SUBMARINES ............................................ 59,403
SUB TACTICAL WARFARE SYS .............................. 79.640
SHIP DEVELOPMENT (ADV) ................................ 20,642
AMPHIB ASSAULT CRAFT .................................. 7,340
COMBAT SYSTEMS ARCH ................................... 4,366
ATTACK SUBMARINE DEV .................................. 9.968
ADV REACTOR COMPONENTS/SYS bEV ........................ 9,101
SHIPBD PHYSICAL SECURITY .............................. 4.598
SPECIAL TEST SYSTEMS .................................. 45.000
A48/AIG NUCLEAR PROP PLANT ............................ 11,862
D2W NUCLEAR PROP REACTOR .............................. 10,461
COMBAT SYSTEM INTEGRATION ............................. 7,493
MAJOR SURFACE COMBATANTS .............................. 101.000
MINE DEVELOPMENT ...................................... 21,484
ADV ASW TORPEDO ....................................... 106,014
LANDING VEHICLE ASSAULT ............................... 52.333
TAC NUCLEAR WEAPON DEV ................................ 736
MC GRD COMBAT/SPT ARMS SYS ............................ 4,441
OCEAN ENGINEERING SYS DEVELOPMENT ..................... 3.149
ADVANCED LOGISTICS .................................... 12,260
2,311
---
9,987
---
5,000
-7,409
4,831
---
5,329
---
6,291
-500
6.153
---
4,605
---
5.895
+3.000
---
-14,960
4,643
---
22.476
6,026
---
9,825
-1,000
2,268
---
2,489
---
8,600
-84
11,000
-2.568
50,084
---
19,000
-11
6,069
---
41,142
---
2,711
---
45,923
---
8,000
---
8,362
---
18,739
---
3,813
-2,097
2,655
-2,655
2.661
---
3,918
---
40,625
---
57,462
---
857
---
16.603
---
1,665
---
10,000
+8,001
---
-63,528
12.960
---
2,500
+2,500
9,203
---
59,403
---
49,640
-30,000
11,000
-9,642
7,340
---
4,366
---
4.968
-5,000
9,101
---
4,598
---
---
-45.000
11,862
---
10.461
7,493
---
101.000
---
21,484
---
106,014
---
52,333
7--
736
---
4,441
---
3,149
---
12,260
---
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 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
FLEET TAC D/E PROGRAM .................................
4,900
4,900
---
--
COMMAND AND CONTROL SYS ...............................
8,839,
8,830
-
CONTAINER OFFLOAD/TRANSFER SYS ........................
B,05'3
8,053
---
NAVY ENERGY PROGRAM ...................................
18,498
18,498
---
FACILITIES IMPROVEMENT ................................
35697
3,697
---
---
MC COMBAT SERVICES SF'T ................................
,3,122
3,122
MC IOTEL/ELC WARFARE SYS ..............................
2,867
2,209
-658
MC COMD/CNTRL/COMM SYS................................
1,490
1,490
---
ASW SURVEILLANCE (C) ..................................
1,260
1,260
29
---
LRAP ..................................................
14,229
14,2
397
46
---
SPECIAL PROCESSES .....................................
MOORED SURVEIL. SYS ....................................
46,397
11,000
,
5,000
-6,000
AVIONICS DEVELOPMENT/VAST .............................
15,044
10,357
-4,687
AIMS/ATCRBS/MARK XII ..................................
4,444
4,444
---
LT ABN MULTI-PURPOSE SYS MK III .......................
73,778
73,778
257
10
---
VSTOL/HELO DEV ........................................
AV-SD AIRCRAFT ........................................
10,257
227,426
,
227,426
---
ACFT HANDLING/SERVICING EQ ............................
6,952
6,952
---
S-3 WEAPONS SYS IMPROVEMENT ...........................
42,212
42,212
---
AIRBORNE ASW DEV ......................................
22,641
22,641
ACFT IF SIGNATURE SUPPRESSION .........................
P-3 MODERNIZATION FROG ................................
1,400
19,192
398
1,400
19,192
398
---
ADV RADAR WARNING SYS .................................
ADV SELF-PROTECTIVE SYS ...............................
23,884
23,884
---
AIR ELECTRONIC WARFARE ................................
16,991
16,991
---
CH-53E ................................................
11,141
11,141
ACOUSTIC SEARCH SENSORS ...............................
18,691
18,691
---
HSX ASW HELICOPTER (H) ................................
5,229
---
-5,229
NAVY AIR COMBAT FIGHTER (F-18) ........................
224,812
190,000
-34,812
LIFE SUPPORT EQUIP ....................................
10,684
10,684
---
ADV SIGNAL PROCESSOR ..................................
7,151
7,151
AWG-9 UPDATE ..........................................
ACFT ENGINE COMPONENT IMPROVE PROS ....................
AERA AIR DEFENSE ......................................
4,207
84,455
34,446
4,207
84,455
34,446
---
COMBAT SYS ENGR DEV SITE ..............................
PENGUIN COMBAT DEV ....................................
16,156
3,808
16,156
3,808
---
---
ADV MEDIUM RANGE AIR-TO-AIR MSL .......................
5,000
5,000
---
SURFACE LAUNCHED WEAPONRY SYS TECH...,...............
57,386
57,386
---
VERTICAL LAUNCHING SYSTEM .............................
85,685
85,685
---
AIR/AIR MSL SYS ENGR ..................................
30,388
30,388
---
CLOSE-IN WPN SYS (PHALANX) ............................
1,406
1,406
---
HI-SPEED ANTI-RADIATION MSL ...........................
20,992
20,992
99
---
.NATO SEA SPARROW ......................................
1,599
1,5
SURFACE MISSILE WARHEAD DEV ...........................
14,000
14,000
222
1
---
STANDARD MISSILE IMPROVEMENTS .........................
TOMAHAWK CRUISE MSL ...................................
51,222
141,364
5
,
141,364
---
5' ROLLING AIR FRAME MSL ..............................
20,081
20,081
---
688 CLASS VLS .........................................
37,549
37,549
---
SUBMARINE COMMUNICATIONS ..............................
SUBMARINE SONAR DEV ...................................
7,337
41,003
7,337
41,003
---
AIR CONTROL ...........................................
9,694
9,694
--'
SSA INTEGRATED COMM CENTER SYS ........................
3,600
3,600
---
CW COUNTERMEASURES ....................................
7,940
7,940
RADAR SURVEILLANCE EQ .................................
15,434
15,434
----
COMMUNICATIONS SYSTEMS ................................
3,223
3,223
INTELLIGENCE SYSTEMS ..................................
COMBAT INFO CENTER CONVERSION .........................
2,709
9,486
2,709
9,486
SUBMARINE COMBAT SYS DEV ..............................
SURFACE ELEC WARFARE ..................................
30,274
8,547
30,274
8,547
---
SUBMARINES .. ....... .................................
2,042
2,042
SUB TACTICAL WARFARE SYS ..............................
127,057
107,057
-20,000
ACOUSTIC COMMUNICATIONS ...............................
6,249
6,249
SHI F. DEVELOPMENT (ENG) ................................
91,897
70,000
- 21,697
NATO SEA GNAT .........................................
3,010
3,010
SHIPBOARD ELECTRONIC WARFARE IMPROVE ..................
14,655
14,655
---
TAC EMBEDDED COMPUTER FROG ........ .................
17,980
17,980
MINE DEVELOPMENT.. ...........................
7,016
7,016
GUN AMMUNITION IMPROVEMENT ............... .........
2,913
2,913
UNGUIDED CONVL AIR LAUNCHED WFAFONS ...................
24,061
24,061
CHEMICAL WARFARE WEAPONS .. .. ......................
3.731
7,500
+3,769
FIRE CONTROL SYS ELECTRO OPTICS .......................
7,203
24,000
+16,797
JT ARMY/NAVY SEMI-ACTIVE LASER GUIDE PROJ .............
3,216
3,216
GUN SYSTEM IMPROVEMENT PROG ...........................
10,703
10,703
---
JT SERV EXPLOSIVE ORD DEV .............................
2,478
MC GRD COMBAT/SFT ARMS S'TY..
23,402
23,402
F'RO TO CARRIER OPER TEST/ ELI AL SITE .....................
NAVY ENERGY PROGRAM ...................................
4,997
16,503
---
16,503
-4,997
COMMAND AND CONTROL SYS ...............................
10,835
10,835
'--
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
TACTICAL TOWED ARRAY SONAR ............................
16,562
16.562
---
AIR WARFARE TNG DEV...................................
27.924
27,924
---
SURFACE WARFARE TNG DEV ...............................
45,576
45,576
---
SUBMARINE WARFARE TNG DEV .............................
4,384
4,553
-1,831
MC COMBAT SERVICES SPT ................................
3,729
3,729
---
MC INTEL/ELEC WARFARE SYS .............................
1,985
1,985
---
MC COMD/CNTRL/COMM SYS ................................
NAV INTEG/BT
46,526
46,526
-=-
FLD EXPLOIT TOT ACO .......................
INTELLIGENCE ............................ .
1.605
6.070
1,605
6,070
MEDICAL DEVELOPMENTS .................................
2,146
2,046
-100
IT INTEROPERABILITY TAC COND/CNTRL ....................
5,605
5,605
---
JT INTEROPERABILITY TAC COMD/CNTRL ....................
1,249
1,249
---
ELECTROMAGNETIC SPECTRUM MGT ...........................
7,411
7,411
---
MANAGEMENT AND TECHNICAL SUPPORT ......................
TACTICAL ELECTRO SUP
12,606
12.606
---
PORT ..............................
C2 SURVEILLANCE/RECON SPT .............................
8,881
4,160
8,881
1,695
-2,465
A-6 SQUADRONS .........................................
9,978
9,978
---
EARLY WARNING ACFT SQUADRONS ..........................
18,948
18,948
---
AVIATION SPT - ATTACK AIR WINGS .......................
10,983
10,983
---
FLEET TELECOMMUNICATIONS (TAC) ........................
35,060
35,060
---
SUBMARINES ............................................
7,629
7.629
---
MINES/MINE SUPPORT ....................................
2,980
2,980
---
SHIP TOWED ARRAY SURV SYS .............................
6,371
6,371
---
COVER AND DECEPTION PROGRAM ............................
13.320
13,320
---
ELECTRONIC WARFARE SPT PROJECTS .......................
19,370
19.370
---
TACTICAL INFORMA'. ION SYSTEMS ..........................
48,569
40,569
---
ASW COMBAT SYSTEMS INTEGRATION ........................
21.366
21.366
---
SURF SHIP SONAR MODERNIZATION .........................
14,273
14.273
---
AN/SGR-18 IMPROVEMENT .................................
SUBMARINE SILENCING ...................................
6,683
15.913
6,683
15,913
---
MODULAR GUIDED GLIDE WPM IMP ..........................
2,167
2,167
---
F-14A .................................................
11,976
17,000
+5,024
TACTICAL INTELL PROCESSING ............................
3,224
3,224
---
EN COUNTER RESPONSE ...................................
10,628
10.628
---
OPERATIONAL REACTOR DEV ...............................
MARINE CORPS TELECOMMUNICATIONS .......................
2.345
1,713
2.345
1,713
---
MC GRD COMBAT/SPT ARMS SYS ............................
1,635
1.635
---
MC COMBAT SERVICES SPT ................................
368
368
---
MC CONO/CNTRL/COMM SYS ...........................'.....
12,202
12.202
---
AMRAAM OUE ............................................
2.396
---
-2.396
JT TACTICAL COMM PROD ..................................
17,362
16,612
-750
JT TACTICAL COMM PROS .................................
10,678
8.678
-2,000
SATELLITE COMMUNICATIONS ..............................
36,886
36,886
---
SECURITY/INVESTIGATIVE ACTYS ..........................
737
737
---
SPECIAL WARFARE CRAFT .................................
---
2,000
+2.000
GAS TURBINE FUEL EFF IMPROVEMENT ......................
---
7.000
+7.000
TILT FAN VSTOL TECHNOLOGY .............................
---
10,000
+10,000
AV-8B+ ................................................
---
5,000
+5.000
CLASSIFIED PROGRAMS ...................................
113,002
111,002
-2,000
AIM-7M TEST AND EVALUATION ............................
---
5,000
+5,000
------------
----------
-----------
TOTAL, TACTICAL PROGRAMS ............................
3,788,073
3,561,888
-226.185
NAVIGATION SATELLITE ..................................
16,841
---
-16,841
ADV NAVIGATION DEVEL ..................................
2,143
2,143
---
WNHCCS ARCHITECTURE ...................................
1.072
1.072
---
NAVIGATION SYSTEMS ....................................
7,644
7,644
---
NAVSTAR GLOBAL POS SYS (USER ED) ......................
34,362
---
-34,362
C2 SYSTEMS PLANNING/ENGR SPT ..........................
5.163
5,163
---
PATROL COMBATANTS .....................................
INTELLIGENCE SUPPORT CENTER ...........................
292
237
292
237
---
LONG HAUL COMMUNICATIONS (DCS) ........................
1,533
1,533
---
CONSEC EQUIPMENT (C) ..................................
13,596
13.596
---
SPECIAL ACTIVITIES ....................................
CLASSIFIED PROGRAMS ...................................
101,823
10,611
101,823
10,611
---
GLOBAL POSITIONING SYSTEM .............................
---
34.000
+34,000
------------
------------
------------
TOTAL, INTELLIGENCE AND COMMUNICATIONS ..............
195,317
178,114
-17,203
RANGE INSTRUMENTATION SYS DEV .........................
ENVIRONMENTAL SYSTEMS .................................
16.816
481
16,816
481
---
AERIAL TARGET SYS DEV .................................
61,989
60.000
-1.989
TRAINING DEVICES PROTOTYPE DES ........................
10,004
10,004
---
STUDIES AND ANALYSIS SUPPORT (MAR CORPS) ..............
4.049
3,500
-549
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 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
STUDIES AND ANALYSIS SUPPORT (NAVY) ...................
MAR CORPS OP NS ANALYSIS GP-CNA ........................
CENTER FOR NAVAL ANALYSIS (NAVY) ......................
FLEET TACTICAL DEV/EVAL ................................
MAR CORPS OPERATIONAL TEST/EVAL .......................
TECHNICAL INFORMATION SERVICES ........................
LANT UNDERSEA TEST/EVAL CTR ...........................
DEVELOPMENT CENTER SUPPORT ............................
INTERNATIONAL RDT/E ...................................
ANTI-SHIP MSL DEFENSE TEST RANGE ......................
RDTE LAB/FAC MGT SPT ...........
ROTE INSTRUMENTATION/MATERIAL SPT .....................
ROTE SHIP/AIRCRAFT SPY ................................
TEST/EVALUATION SPT ...................................
OPERATIONAL TEST/EVAL CAPABILITY ......................
OCCUPATIONAL SAFETY/HEALTH ADM SPT ....................
RANGE INSTRUMENTATION SHIP SUPPORT ....................
TAC EXPLOITATION OF NATL CAPABILITY ...................
PRODUCTIVITY ENHANCEMENT ..............................
AIRCRAFT EO RIM IMPROVEMENT PROG ......................
LAB FLEET SUPPORT .....................................
ACFT PROPULSION EVAL GENERAL ..........................
ACFT FLIGHT TEST GENERAL ..............................
WEATHER SERVICE .......................................
DEF METEOROLOGICAL SATELLITE PROS .....................
CIVILIAN TRAINING/EDUCATION DEV .......................
TOTAL, DEFENSENIDE MISSION SUPPORT ..................
7,893
7,893
---
2,482
2,482
11,476
11,476
---
19,178
19,178
---
1,205
1,205
---
1,456
1,456
---
36,197
36,197
5,428
5,428
---
1,679
1,679
---
7,059
7,059
---
56,747
56,747
---
41,579
45,579
+4,000
63,308
63,308
---
244,982
244,982
5,776
5,776
---
522
522
---
26,579
26,579
---
248
248
---
13,508
6,508
-7,000
9,331
9,331
---
3,011
3,011
---
2,865
2,865
---
997
997,
---
2,872
2,872
---
1,350
1,350
---
1,290
1,000
-290
------------
------------
662,357
656,529
-5,828
FUEL PRICE ADJUSTMENT .................................
---
-3,000
-3,000
REDUCTION, INFLATION/OFFSETS ..........................
-7,000
-7,000
---
UNDISTRIBUTED REDUCTION ...............................
-211,300
-211,300
---
CONSULTANT SERVICES ...................................
-43,300
-43,300
---
CONSULTANTS. ANALYSES AND STUDIES .....................
---
-48,000
-48,000
AUDIO-VISUAL ADJUSTMENT ...............................
---
-1,200
-1,200
ARMY GUARD AND RESERVE EQUIPMENT TRANSFER .............
---
-8,200
-8,200
TOTAL, RESEARCH, DEVELOPMENT, TEST S EVAL, NAVY .....
5,885,488
5,517.671
-367,817
1 EXCLUDES 43,083.000 FOR SPECIAL FOREIGN CURRENCY.
RESEARCH, DEVELOPMENT, TEST AND EVALUATION-AIR FORCE
Appropriation, 1981 .................................................................................. $7,082,987,000
New Obligational Authority, 1982:
Estimate .............................................................................................. 8,823,400,000
Recommended .................................................................................... 8,501,210,000
Reduction ............................................................................................ 332,190,000
The Committee recommends an appropriation of $8,501,210,000
in new obligational authority for the Research, Development, Test
and Evaluation activities of the Air Force in fiscal year 1982. The
recommendation is a reduction of $322,190,000 below the budget
estimate, and is $1,418,223,000 more than the appropriation pro-
vided in fiscal year 1981.
AUTHORIZATION CHANGES
The Committee recommends the following changes in the budget
estimate, in accordance with changes recommended by the authori-
zation conference:
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Budget Committee Change from
Request Recommended Request
------------------------ ---------------------------------------------------------------------
COUNTER SUAWACS TECHNOLOGY PROG .......................
9,000
---
-9,000
ADVANCED WARNING SYSTEMS ..............................
12,400
10,000
-2,400
SPACE SURVEILLANCE TECHNOLOGY .........................
28,800
23,800
-5,000
B-52 SQUADRONS ........................................
124,500
96,000
-28,500
ADVANCED TACTICAL FIGHTER .............................
10,100
---
-10,100
EF-111A ...............................................
14,200
9,200
-5,000
NIGHT PRECISION ATTACK ................................
59,600
87,600
+28,000
AIR-LAUNCHED ASSAULT BREAKER ..........................
36,100
24,100
-12,000
F-16 SQUADRONS ........................................
42,200
57,500
+15,300
SIMULATOR VALIDATION (SIMVAL) .........................
1,400
---
-1,400
NAVSTAR GPS USER EQUIPMENT ............................
166,100
166,000
-100
DEVELOPMENT PLANNING ..................................
2,200
---
-2,200
ALTERNATE FIGHTER ENGINE ..............................
35,000
35,000
---
ACQUISITION AND COMMAND SUPPORT .......................
259,400
253,000
-6,400
The budget request included amounts for a number of programs
which exceeded by unjustifiably large percentages the amounts
provided for fiscal year 1981. The Committee accordingly recom-
mends the following reductions:
Budget
request
Reduction
Recom-
mended
Geophysics ...................................................................................................................................
34,600
-1,000
33,600
Materials ......................................................................................................................................
43,300
-3,000
40,300
Aerospace Biotech ........................................................................................................................
40,100
-3,000
37,100
Aerospace Avionics .......................................................................................................................
63,700
-4,000
59,700
Training/Simulation ......................................................................................................................
16,000
-2,000
14,000
Adv Weapons ...............................................................................................................................
40,300
-2,000
38,300
Conventional Munitions .................................................................................................................
32,800- .
-1,000
31,800
Comm/Control/Commo .................................................................................................................
67,100
-2,000
65,100
Appl for Info Process ...................................................................................................................
5,900
-1,000
4,900
The Air Forces requested $17,100,000 for Advanced Avionics. Of
the $15,000,000 provided for this program last year, the Air Force
reprogrammed $4,200,000 for other higher priority purposes. It ap-
pears to the Committee that a lesser amount for this program is
required. The Committee recommends a total of $15,000,000 for
Advanced Avionics, a reduction of $2,100,000.
CONVENTIONAL WEAPONS
The Air Force budget request for Conventional Weapons in-
creased by 29 percent between the January and March submittals
without satisfactory explanation. The Committee recommends a
total of $21,300,000 for Conventional Weapons, a reduction of
$2,000,000 from the budget request.
VERY HIGH SPEED INTEGRATED CIRCUITS
The Air Force requested $50,700,000 for Very High Speed Inte-
grated Circuits (VHSIC). The Committee is informed that this im-
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
271
portant program is underfunded and recommends $5,000,000 above
the budget. The Committee is further informed that administrative
delay has been encountered in transfer of funds by the Air Force
needed to support VHSIC. The Committee expects this matter to be
resolved promptly, by reprogramming of existing funds if neces-
sary. The funds which have been appropriated for VHSIC are
expected to be used for VHSIC.
The Committee is growing increasingly concerned over the large
sums being spent on laser technology, and -intends to make detailed
inquiry into these programs in the future. The Committee recom-
mends $70,800,000 for Advanced Radiation Technology, a reduction,
of $10,000,000 from the budget request.
CIVIL/ENVIRONMENTAL ENGINEERING TECHNOLOGY
The Air Force requested $100,000 for a study of the climactic
survivability of windmills which could be used to power the MX.
The Committee recommends a total of $3,900,000 for Civil/Environ-
mental Engineering Technology, a reduction of $100,000 from the
budget request.
The Committee agrees with concerns expressed over providing a
stable. funding profile for the ABRES program. The Committee
recommends a total of $100,000,000 for ABRES, an increase of
$51,000,000 over the budget request.
The Air Force requested $471,000,000 for Long Range Combat
Aircraft (B-1). The Committee's Surveys and Investigations Staff
reports that of the $260,100,000 provided for this program in fiscal
year 1981, $179,100,000 remained unobligated at the end of that
fiscal year. Since the Air Force intends to use these funds for tasks
to be performed in fiscal year 1982, the budget request can be
reduced by a like amount. The Committee recommends a reduction
of $179,100,000 from the budget request, resulting in a recommend-
ed total for Long Range Combat Aircraft (B-1) of $291,900,000.
The Air Force budgeted $1,913,200,000 for MX. Of this amount,
$1,349,000,000 was identified for R&D on the missile and
$564,200,000 for R&D on basing options. Although the administra-
tion has recently announced cancellation of the Multiple Protective
Shelter basing mode, the Committee believes that R&D on basing
modes should go forward. Work on the missile must proceed re-
gardless of the basing mode eventually chosen. Further, funds must
be provided if the search for a viable new basing mode is to
continue. Accordingly, the Committee recommends providing
$1,913,200,000, the budgeted amount.
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
The Committee supports continuing those initiatives intended to
improve the Minuteman force, and to begin development of the
new Trident D-5 missile.
The Air Force requested $14,700,000 for Next Generation Train-
er, an aircraft intended to replace the T-37 primary trainer. A
report submitted by the Air Force which explains why it cannot
use the existing Navy T-34C trainer for this purpose is manifestly
unsatisfactory. The Air Force is on the threshold of completely
revising its training syllabus, and of requesting funds to begin
development of a new Tanker Transport Bomber (TTB) trainer.
9hese considerations were omitted from the T-34C evaluation. The
Committee is determined that a full and fair evaluation shall be
made. The Committee denies the request for funds for Next Gen-
eration Trainer. The Committee directs that an assessment be
made, using available funds, of the T-34C within the new Air Force
training syllabus, and the T-34C's compatibility not only with the
T-38 basic trainer, but also the planned TTB trainer. The Air
Force should consider getting advice and counsel from an independ-
ent organization, such as Program Analysis and Evaluation in
OSD, to avoid future appearances of partiality.
OTHER OPERATIONAL EQUIPMENT
The Air Force requested funds for a project to develop tactical
shelters, although a family of such shelters is already a DoD stand-
ard. The Committee recommends a total of $12,200,000 for Other
Operational Equipment, a reduction of $1,000,000 from the budget
request.
The Air Force proposed deleting $5,200,000 for improving the B-
52D flight simulator. Consistent with its decision to deny Air Force
proposals to retire B-52D's, the Committee directs that improve-
ments to the B-52D flight simulator be continued. The recommend-
ed total for Flight Simulator Development is $16,500,000.
Last year the Committee directed that $4,500,000 of the funds
appropriated for various electronic warfare programs be used to
procure and test the RAPPORT III System.
Subsequently the House and Senate appropriations conferees
agreed that development tests should be made of the RAPPORT III
System in order to provide a full and fair evaluation of the sys-
tem's ability to meet the requirements of U.S. forces. Funds re-
quired to procure test articles and to pay the cost of the tests were
to be derived by reprogramming of available funds. To date the
Department of Defense has not complied with the directions pro-
vided by this Committee and the Senate Appropriations Commit-
tee. .
The Committee is disturbed and displeased that the direction
provided last year has not been undertaken. We reiterate our
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 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
position of last year and stress that the Department of Defense
should proceed without further delay to procure a limited number
of test articles and conduct the necessary tests by reprogramming
within available funds.
TACTICAL COMMAND AND CONTROL MODERNIZATION
The Committee is concerned the Air Force has serious deficien-
cies in its tactical command and control capability which severely
impacts on the tactical command and control mission. These defi-
ciencies have been identified by the Air Force and defined within a
Required Operational Capability (ROC) and an Air Force State-
ment of Need (SON) for an improved Tactical Command and Con-
trol System (TACS). The Air Force has requested funds in FY 1982
to support equipment that has evolved over the past twenty-five
years. The Committee believes the Air Force should expedite meet-
ing the TACS modernization requirement, including full exploita-
tion of other existing service programs in order to maximize sav-
ings and operational capability. The Committee expects a full
report on Air Force TACS modernization plans, including cost and
schedule data relating to reducing acquisition costs.
For reasons explained at the beginning of the RDT&E section of
this report, the Committee recommends a reduction of $3,000,000
for Joint Tactical Communications, resulting in a recommended
total of $25,500,000.
The Air Force requested $35,000,000 for the Alternate Fighter
Engine program. In order to ensure continued competition in high
thrust aircraft engines, the Committee directs that $20,000,000 be
allocated to continue advanced development of the F-101 Deriva-
tive Fighter Engine, and $15,000,000 be allocated for development
work on increasing the thrust of the F-100 engine. The Committee
reommends that $35,000,000 be provided for Alternate Fighter
Engine.
For reasons explained in the classified annex to this report and
in a classified letter to the Secretary of Defense, the Committee
recommends adjustments in the following programs:
Air Launched Cruise Missile ...............................................................
69,000
+35,000
104,000
CONUS 0TH Radar .............................................................................
21,300
-4,000
17,300
Classified, Strategic ............................................................................
34,000
+32,400
66,400
Adv Tac Air Reconn ...........................................................................
3,000
-3,000
0
Tactical Fusion Center ........................................................................
8,300
-3,000
5,300
Classified, Tactical ..............................................................................
95,200
+39,900
135,100
Classified, I&C ....................................................................................
918,733
+16,900
935,633
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
The following schedule shows the budget estimate, the recom-
mended appropriation, and the change from the budget estimate
(in thousands of dollars) for fiscal year 1982:
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
Budget ? Committee Change from
Request Recommended Request'
- - --- - - - - - - -- - - - - - - --
COMMAND/CONTROL/COMMUNICATION ......................... 67,100 65,100 -2,000
PERS UTILIZATION TECH ................................. 5,400 5,400 ---
------------ ------------ ------------
AEROSPACE AVIONICS/VHSI CIRCUITS ...................... 63,700 59,700 -4,000
TRAINING/SIMULATION TECH .............................. 16,000 14,000 -2,000
ROCKET PROPULSION., ................................... 34,200 34,200 ---
ADVANCED WEAPONS ...................................... 40,300 38,300 -2,000
CONVENTIONAL MUNITIONS ................................ 32,800 31,800 -1,000
DEFENSE RESEARCH SCIENCES ............................. 139,500 133,500 -6,000
GEOPHYSICS ............................................ 34,600 33,600 -1,000
MATERIALS ......................?...................... 43,300 40,300 -3,000
AEROSPACE FLIGHT DYNAMICS ............................. 55,300 55.300 ---
AEROSPACE BIOTECHNOLOGY ............................... 40,100 37,100 -3,000
TOTAL, TECHNOLOGY BASE .............................. 637,700 613,700 -24,000
ACFT PROPULSION SUBSYS INTEGRATION .................... 23,100
ADV AVIONICS FOR ACFT ................................. 17,100
FLT VEHICLE TECHNOLOGY ................................ 6,700
RECON SENSORS/PROCESSING TECHNOLOGY ................... 4,100
AEROSPACE STRUCTURES/MATERIALS ............... :........ 19,500
AVIATION TURBINE FUEL TECHNOLOGY ...................... 6,800
ADV TURBINE ENGINE GAS GENERATOR ...................... 33,400
ADVANCED SIMULATOR DEVELOPMENT ........................ 2,200
ADV FIGHTER TECH INTEGRATION .......................... 11,900
LINCOLN LABORATORY .................................... 22.200
ADV MSLE PROPULSION ................................... 7,200
HYPERVELOCITY MISSILE ................................. 8,100
VERY HIGH SPEED INTEGRATED CIRCUITS ................... 50,700
CONVENTIONAL WEAPONS .................................. 23,300
ADVANCED RADIATION TECH ............................... 80,800
CIVIL/ENVIRONMENTAL ENO TECH .......................... 4,000
ADVANCED COMPUTER TECHNOLOGY .......................... 4,800
ELECTRO-OPTICAL WARFARE ............................... 10.300
COUNTER/COUNTERMEASURES ............................... 1,900
INNOVATIONS IN EDUCATION/TRAINING ..................... 2,500
COMD/CNTRL/COMM ADV DEV ............................... 10.200
MODULAR AUTOMATIC TEST EQUIPMENT ...................... 20,300
------------
TOTAL, ADVANCED TECHNOLOGY DEVELOPMENT .............. 371,100
ADV BALLISTIC RE-ENTRY SYS ............................ 49,000
COUNTER SUAWACS TECHNOLOGY PROG ....................... 9,000
ADVANCED TECHNOLOGY CRUISE MISSILE .................... 30,100
MSL SURVEILLANCE TECH ................................. 13,900
ADVANCED WARNING SYSTEMS .............................. 12,400
SPACE SURVEILLANCE TECHNOLOGY ......................... 28,800
SPACE COMMUNICATIONS .................................. 66,400
SATELLITE SYS SURVIVABILITY ........................... 11,100
CONUS OVER-THE-HORIZON RADAR .......................... 4,300
LONG RANGE COMBAT AIRCRAFT ............................ 471,000
M-X ................................................... 1,913,200
AIR LAUNCHED CRUISE MISSILE ........................... 69,000
SPACE DEFENSE SYS ..................................... 1.80.900
SYSTEMS SURVIVABILITY (NUC AFFECTS) .................. 12,100
B-52 SQUADRONS ........................................ 124,500
KC-135 SQUADRONS ...................................... 31,900
MINUTEMAN SQUADRONS ................................... 14,200
POST ATTACK COMD/CNTRL SYS ............................ 9,400
SAC COMMUNICATIONS .................................... 29,500
WWMCCS ADP-NORAD/ADCOM ................................ 2.400
NORAD COC ............................................. 23,600
JOINT SURVEILLANCE SYSTEM ............................. 1,300
SURVEILL RADAR STATIONS/SITES ......................... 4,300
23,100
15.000
6,700
4,100
19.500
6,800
33,400
2,200
11.900
22,200
7,200
8,100
"55,700
21,300
70,800
3,900
4,800
10,300
1,900
2.500
10,200
20,300
+5.000
-2,000
-10,000
-100
361,900 -9,200
100,000 +51,000
-9,000
30,100
13,900
10,000 -2,400
23,800 -5,000
66,400 ---
11.100
4,300
291,900
1,913,200
104,000
180,900
12,100
11.000
14,200
9,400
29,500
2,400
23,600
1,300
4,300
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
CONUS OVER-THE-HORIZON RADAR .......................... 21,300 17,300 -4,000
BALLISTIC MSL EARLY WHO SYSTEM ........................ 12,800 12,800 ---
SPACETRACK ............................................ 8,000 8,000 DEFENSE SUPPORT PROGRAM ............................... 146,300 146,300 ---
INTEG OPERATIONAL NUDETS DETECT SYS ................... 7,000 7,000 ---
SPACE DEFENSE BPS ..................................... 1,100 1,100 MINIMUM ESSENTIAL EMER COMM NETWORK ................... 45,600 45,600 ---
AIR FORCE SAT COMM SYS ................................ 50,100 50,100 ---
SATELLITE DATA SYSTEM ................................. 28,500 28,500 ---
CLASSIFIED PROGRAMS ................................... 34,000 66,400 +32,400
------------ ----------- ------------
TOTAL, STRATEGIC PROGRAMS ........................... 3,467,000 3,357,400 -109,600
------------ ------------ ------------
NEXT GENERATION TRAINER ACFT .......................... 14,700 --- -14,700
ADVANCED TACTICAL FIGHTER ............................. 10,100 --- -10,100
ADO TACTICAL AIR RECONNAISSANCE SYS ................... 3,000 --- -3,000
ACFT NON-NUCLEAR SURVIVABILITY ........................ 1,600 1,600 NIGHT ATTACK PROGRAM .................................. 3,100 3,100 ---
ADVANCED SYSTEM INTEGRATION DEMO ...................... 6,800 6,800 ---
ADV MSL SUBSYSTEMS DEMONSTRATION ...................... 5,900 5,900 ---
ADV MED RANGE A-A MSL ................................. 1,300 1,300 ---
ADO ATTACK WEAPONS .................................... 55,400 55,400 ---
DOD PHYSICAL SECURITY EQ-EXTERIOR ..................... 1,000 1,000 --
ELECTRONIC WARFARE TECHNOLOGY ......................... 11,800 11,800 ---
ADVANCED COMMUNICATIONS TECHNOLOGY .................... 5,300 5,300 ---
ADV DRONE/REMOTELY PILOTED VEH DEV .................... 2,800 2,800 ---
TACTICAL IDENTIFICATION SYSTEM ........................ 8.500 8,500 ---
CHEMICAL WARFARE DEFENSE .............................. 4.000 4,000 ---
PAVE MOVER ............................................ 5.200 5,200 ---
ACFT AVIONICS EQUIPMENT DEVELOPMENT ................... 13,100 13.100 ---
AIRCRAFT EQUIPMENT DEV ................................ 2,200 2,200 ---
ENGINE MODEL DERIVATIVE FROG .......................... 25,100 25,100 ---
INTEGRATED DIGITAL AVIONICS ........................... 2.100 2.100 ---
EF-11IA ............................................... 14,200 9,200 -5,000
NUCLEAR WEAPONS SUPPORT ............................... 1,700 1.700 ---
C-X PROGRAM ........................................... 169,700 --- -169,700
NIGHT PRECISION ATTACK ................................ 59,600 87.600 +28,000
ACFT ENGINE COMPONENT IMPROVE FROG .................... 122,500 122,500 ---
ADV MED RANGE AIR-TO-AIR MSL .......................... 138,600 138,600 ---
TACTICAL FUSION CENTERS ............................... 8,300 5,300 -3,000
ORD LAUNCHED CRUISE MSL ............................... 80,367 80,367 ---
'C/B DEFENSE EQUIPMENT ................................. 8,800 8,800 ---
ARMAMENT ORDNANCE DEVELOPMENT ......................... 25,300 25,300 ---
WIDE-AREA ANTI-ARMOR MUNITION ......................... 20,800 20,800 ---
CLOSE AIR SUPPORT WEAPONS SYSTEM ...................... 14,600 14,600 ---
LOW LEVEL LASER GUIDED BOMB ........................... 8.300 8,300 ---
ADV CONVENTIONAL STAND-OFF MSL ........................ 49.100 49,100 AIR-LAUNCHED ASSAULT BREAKER .......................... 36,100 24,100 -12,000
LIFE SUPPORT SYSTEM ................................... 11.000 11.000 ---
WEATHER SYSTEMS ....................................... 3,800 3,800 ---
OTHER OPERATIONAL EQUIPMENT ........................... 13,200 12,200 -1.000
RECONNAISSANCE EQUIPMENT .............................. 11,400 11.400 ---
DOD PHYSICAL SECURITY EQ-EXTERIOR ..................... 7,900 7,900 ---
TAC C3 COUNTER-MEASURES ............................... 12.100 12,100 ---
ACFT IDENTIFICATION SYSTEMS ........................... 12,200 12,200 ---
SURFACE DEF SUPRESSION ................................ 9,600 9,600 ---
AIRBORNE SELF-PROTECTION JAMMER.. ..................... 54,300 54,300 ---
PROTECTIVE SYSTEMS .................................... 108.900 108,900 ---
TACTICAL PROTECTIVE SYSTEMS ........................... 23,800 23,800 ---
F_R.
APPL FOR INFO PROCESSING T~CN ..............~. . ~. .~. .... ~. -5,96-0 4.900 -1.000
PRECISION LOCATION STRIKE SYSTEM ...................... 81,200 81,200 EXPENDABLE DRONES ..................................... 8.500 8,500 ---
INTELLIGENCE EQUIPMENT ................................ 14,800 14,800 ---
INTRA-THEATRE IMAGING SYSTEM .......................... 500 500 ---
COMBAT HELICOPTER MOD (H-X) ........................... 18.900 18,900 ---
JT TAC INFO DIST SYS .................................. 85,600 85,600 ---
SIDE LOOKING AIRBORNE RADAR (SLAR) .................... 29,200 29,200 ---
JT INTEROPERABILITY TAC COMD/CNTRL .................... 7,500 7,500 ---
F-4 SQUADRONS ......................................... 6.300 6.300 ---
F-111 SQUADRONS ....................................... 2,700 2,700 ---
F-15 SQUADRONS ........................................ 57.100 29.800 -27,300
A-10 SQUADRONS ........................................ 14,000 14.000 ---
F-16 SQUADRONS ........................................ 42,200 57,500 +15.300
TACTICAL AGM MISSILES ...... :.......................... . 4,300 4,300 ---
TACTICAL SURVEILLANCE SYS ............................. 300 300 ---
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
OVERSEAS AIR WEAPON CONT SYS .......................... 2,300 2,300 ---
TACTICAL AIR CONTROL SYSTEM ........................... 1,200 1,200
TAC AIRBORNE COMB /CNTRL SYS ........................... 52,600 52,600 ADV COMM SYS .......................................... 50,600 50,600 ---
TAC AIR INTELL SYS ACTYS .............................. 9,100 9,100 ---
AMRAAM OPER UTILITY EVAL .............................. 3,100 3,100 ---
JT TACTICAL COMM PROG (TRI-TAC) ....................... 28,500 25,500 -3,000
SIMULATOR VALIDATION (SIMVAL) ......................... 1,400 --- -1,400
C-130 AIRLIFT SQUADRONS (IF) .......................... 15,000 15,000 ---
C-5 AIRLIFT SQUADRONS (IF) ............................ 15,600 15,600 ---
CLASSIFIED PROGRAMS ................................... 95,200 135,100 +39,900
----------- ------------ ------------
TOTAL, TACTICAL PROGRAMS ............................ 1,862,767 1,694,767 -168,000
INTELLIGENCE AND COMMUNICATIONS
WWMCCS ARCHITECTURE ................................... 9,000 9,000 ---
NAVSTAR GPS USER EQUIPMENT ............................ 166,100 166,000 -100
AIRCRAFT NAVIGATION SYS VERIF ......................... 1,700 1,700 ---
DEFENSE DISSEMINATION SYSTEMS ......................... 1,700 1,700 ---
JNFRARED PROCESSING + EXPLOITATION .................... 2,400 2,400 ---
MISSILE AND SPACE TECH COLLECTION ..................... 15,700 15,700 ---
FOREST GREEN .......................................... 21,200 21,200 ---
INTEG OPERATIONAL NUDETS DETECT SYS ................... 4,500 4,500 ---
DEF SATELLITE COMM SYS ................................ 40,300 40,300 ---
LONG-HAUL COMMUNICATIONS (DCS) ........................ 8,000 8,000 ---
ELECTROMAG COMPATIBILITY ANAL CTR ..................... 6,900 6,900 ---
COMMUNICATIONS SECURITY ............................... 1,600 1,600 ---
TRAFFIC CNTRL/APPROACH/LANDING SYS .................... 5,300 5,300 ---
CLASSIFIED PROGRAMS ................................... 918,733 935,633 +16,900
----------- ------------ ------------
TOTAL, INTELLIGENCE AND COMMUNICATIONS .............. 1,203,133 1.219.933 +16,800
DEVELOPMENT PLANNING ..................................
DOD COMMON PROD LANGUAGE(ADA)ADV DEV ..................
SPACE TEST PROGRAM ....................................
WEATHER SYSTEMS .......................................
ADV AERIAL TARGETS BEV ................................
ALTERNATE FIGHTER ENGINE ..............................
FLIGHT SIMULATOR DEVELOPMENT ..........................
SPACE SHUTTLE .........................................
IMPROVED CAPABILITY FOR OTE ...........................
ELECTROMAG RADIATION TEST FACIL .......................
PROJECT AIR FORCE .....................................
ACQ/COMD SPT - TELECOM ................................
ENVIRONMENTAL EPIDEMIOLOGY ............................
ACOUISITION AND COMMAND SUPPORT .......................
TEST AND EVALUATION SPT ...............................
ADS SYS ENGINEERING/PLAN ..............................
INSTL AUDIOVISUAL SPT (R/D) ...........................
MGT HO (RESEARCH/DEV) ................................. ..
SATELLITE CONTROL FACILITY ............................
SPACE BOOSTERS ........................................
CONSOLIDATED SPACE OPERATIONS CENTER ..................
DEF METEOROLOGICAL SATELLITE PROG .....................
SPACE LAUNCH SUPPORT ..................................
UTAH TESTING + TRAINING RANGE .........................
PRODUCT/RELIABLE/AVAIL/MAINTAIN FROG ..................
INTERNATIONAL ACTIVITIES ..............................
TOTAL. DEFENSEWIDE MISSION SUPPORT ..................
FUEL PRICE ADJUSTMENT .................................
AUDIO-VISUAL ADJUSTMENT ...............................
REDUCTION, INFLATION/OFFSETS ..........................
ARMY GUARD AND RESERVE EQUIPMENT TRANSFER .............
TOTAL. RESEARCH, DEVELOPMENT, TEST & EVAL, AIR FORCE
2.200
---
-2,200
7,000
7.000
---
42,800
42.800
---
2,900
2,900
---
12,300
12,300
- -
35,000
35,000
---
11,300
11,300
---
266.000
266.000
---
22.700
22,700
---
3,100
3,100
---
13.800
13,800
---
4,700
4,700
---
3,900
3000
---
259,400
253,000
-6,400
365,500
365,500
---
5,000
5.000
---
5,800
5,800
---
22,900
22,900
67,900
67,900
---
19,300
19,300
---
19,500
19.500
---
47,400
47.400
---
39,700
39,700
- -
1,800
1,800
---
9,200
9,200
---
2,600
2,600
---
------------
------------
------------
1.293,700
1,285,100
-8,600
---
-3,000
-3.000
---
-4.190
-4.190
-12.000
-12,000
---
---
-12,400
-12,400
8,823,400
8,501,210
-322,190
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
RESEARCH, DEVELOPMENT, TEST AND EVALUATION, DEFENSE
AGENCIES
Appropriation, 1981 .................................................................................. $1,298,948,000
New Obligational Authority, 1982:
Estimate .............................................................................................. 1,789,000,000
Recommended .................................................................................... 1,613,204,000
Reduction ...................................................................................c........ 175,796,000
The Committee recommends an appropriation of $1,613,204,000
for the Research, Development, Test and Evaluation activities of
the Defense Agencies in fiscal year 1982. The recommended
amount is a reduction of $175,796,000 below the budget estimate,
and is $314,256,000 more than the appropriation provided in fiscal
year 1981.
The budget request for Experimental Evaluation of Major Inno-
vative Technology included $42,000,000 for a Korean Upgrade pro-
ject which the Committee denies. The total costs of this project are
unknown, its benefits uncertain, and its relationship to DARPA's
mission questionable. The budget request also included $23,400,000
for work related to IMAAWS, a program cancelled by the Army.
The Committee recommends that $10,000,000 be provided for this
project for advanced seeker work. In summary, the Committee
recommends a total $216,340,000 for this program.
Total funding requested for Defense Nuclear Agency is an in-
crease of 43 percent over last year. Between the January and
September budget submissions, the request increased by
$53,000,000 with little substantiation beyond statements that costs
had gone up. The Committee recommends a total of $230,000,000
for Defense Nuclear Agency, a reduction of $58,078,000 from the
budget request.
Funds are transferred to the following programs from Operations
and Maintenance to realign resources needed for WWMCCS mod-
ernization
NMCS-Wide Support ...........................................................................
7,713
+1,600
9,313
WWMCCS ADP ...................................................................................
12,814
+ 1,500
14,314
WWMCCS Sys Eng .............................................................................
45,052
+4,400
49,452
In addition, $500,000 is added to Long Haul Communications.
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 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
The Committee recommends a net reduction of $1,500,000 for
Long Haul Communications, Defense Communications Agency. The
net reduction includes an increase of $500,000 for Increased Circuit
Reliability which is transferred from O&M, Air Force to RDT&E,
Defense Agencies. A decrease of $500,000 is recommended for-PD-
53 NCS. The Committee remains open minded about the future of
this program, but does not want to start any major initiatives in
this area prior to analyzing the recommendations pending a review
of the program by the Committee's S&I Staff. A decrease of
$1,500,000 should be allocated among the various subprograms in
this activity.
The recommended total for this program is $18,050,000.
The Committee recommends a reduction of $4,418,000 requested
for MX surveys, and a recoupment of $583,000 provided in the
Fiscal Year 1981 supplemental for MX surveys. Also, an addition of
$1,000,000 is recommended for reasons explained in the classified
annex to this report. The recommended total for Defense Mapping
Agency is $21,905,000.
The budget request for this program was 30 percent higher than
last year, although the same workload is to be done. The Commit-
tee recommends a total of $3,200,000 for Information Analysis Cen-
ters, a reduction of $687,000 from the budget request.
AUTHORIZATION REDUCTION, OSD AND OASD
The Committee recommends a reduction of $7,103,000 to be ap-
plied to OSD and OASD activities, in accordance with the authori-
zation conference.
The following schedule shows the budget estimate, the recom-
mended appropriation, and the change from the budget estimate
(in thousands of dollars) for fiscal year 1982:
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
Budget Committee Change from
Request Recommended Request
-----------------------------------------------------------
DEFENSE RESEARCH SCIENCES .............................
94,400
89,400
-5,000
IN-HOUSE LAB INDEPENDENT RESEARCH .....................
TECHNICAL STUDIES .....................................
1,650
3,000
1,650
3,000
---
STRATEGIC TECHNOLOGY ..................................
145,831
145,831
---
TACTICAL TECHNOLOGY ...................................
81,695
81,695
---
PARTICLE BEAM TECHOLOGY ...............................
INTEGRATED COMD/CONTROL TECH ..........................
29,000
41,600
29,000
41,600
---
EXPERIMENTAL EVAL MAJ INNOVATIVE TECH .................
273.340
216,340
-57,000
MATERIALS PROCESSING TECH .............................
13,500
13,500
---
NUCLEAR MONITORING ....................................
15,600
15,600
---
DEFENSE NUCLEAR AGENCY ................................
288,078
230.000
-58,078
------------
------------
------------
TOTAL, TECHNOLOGY BASE ..............................
987,694
867,616
-120,078
WWMCCS ARCHITECTURE ...................................
1,170
1,170
---
CINC C2 INITIATIVES ...................................
2,729
2,729
---
NMCS-WIDE SUPPORT .....................................
7,713
9,313
+1,600
WWMCCS ADP-JTSA .......................................
12,814
14,314
+1,500
WWMCCS SYSTEM ENGINEER ................................
45,052
49,452
+4,400
MINIMUM ESSENTIAL EMER COMM NETWORK ...................
6,507
6.507
---
WWMCCS INFORMATION SYSTEM .............................
3,899
3,899
---
----------
------------
-----------
TOTAL, STRATEGIC PROGRAMS ...........................
79,884
87,384
+7,500
INTELLIGENCE AND COMMUNICATIONS
MAP/CHART/GEODESY INV/PROTOTYPE DEV ...................
19,810
15,808
-4,002
MAP/CHART/GEODESY ENGR DEV/TEST .......................
6,097
6,097
---
LONG-HAUL COMMUNICATIONS (DCS( ........................
19,550
18,050
-1,500
CLASSIFIED PROGRAMS ...................................
623,580
------------
576,154
------------
-47,426
------------
TOTAL,
INTELLIGENCE AND COMMUNICATIONS ..............
669,037
616,109
-52,928
TECHNICAL SUPPORT TO USDR/E ...........................
14,539
14,539
---
GENERAL
SUPPORT FOR PA/E ..............................
3,181
3,181
---
GENERAL
SUPPORT FOR ISA ...............................
4,114
4,114
---
GENERAL
SUPPORT FOR NET ASSESSMENT ....................
3,634
3,634
---
GENERAL
SUPPORT FOR MRA/L .............................
2,635
2,635
---
DEFENSE
TECHNICAL INFO CENTER .........................
14,619
14.619
---
INFORMATION ANALYSIS CENTERS ..........................
3,887
3.200
-687
MGT HO (RESEARCH/DEVELOPMENT) .........................
7,776
7,776
---
AUTHORIZATION REDUCTION, OSD AND DASD.................
---
-7,103
-7,103
------------
------------
-----------
TOTAL, DEFENSEWIDE MISSION SUPPORT ..................
54,385
46,595
-7,790
REDUCTION, INFLATION/OFFSETS ..........................
-2,000
-2,000
---
ARMY GUARD AND RESERVE EQUIPMENT TRANSFER .............
---
-----------
-2,500
-
-2,500
TOTAL, RESEARCH, DEVELOPMENT, TEST 8 EVAL, DEFENSE
-
-----------
------------
AGENCIES ..........................................
1,789,000
1,613,204
-175,796
------------
------------
------------
------------
------------
------------
DIRECTOR OF TEST AND EVALUATION, DEFENSE
Appropriation, 1981 .............................................................................................. $42,100,000
Estimate, 1982 ....................................................................................................... 53,000,000
Recommended in the bill .................................................................................... 53,000,000
The Committee recommends the appropriation of $53,000,000 for
the activities of the Director of Test and Evaluation in fiscal year
1982.
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 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
SPECIAL FOREIGN CURRENCY PROGRAM
Appropriation, 1981 .............................................................................................. $2,760,000
Estimate, 1982 ....................................................................................................... 3,083,000
Recommended in the bill .................................................................................... 3,083,000
The new obligational authority recommended in the bill is
$323,000 more than the amount provided in fiscal year 1981.
The special foreign currency appropriation provides dollars to be
used exclusively for the purchase from the Treasury of excess
foreign currencies which are used in the financing of programs of
benefit to the Department of Defense. Such expenditures are au-
thorized by 80 Stat. 990.
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
GENERAL PROVISIONS
The accompanying bill includes 91 general provisions. Of these
provisions, 68 were included in the Department of Defense Appro-
priation Bill for fiscal year 1981 and many have been included in
the Defense Appropriation Act for a number of years. Of the 76
general provisions contained in the Act for fiscal year 1981, eight
have been deleted. Twenty-three new provisions have been added
to the bill for fiscal year 1982.
The action taken on- the various budget recommended proposals
regarding the general provisions carried in the bill and other
changes being recommended by the Committee are discussed below:
_ The committee agrees to a new subsection (m) in Section 708, as
-proposed in the budget, which would allow payments for depot
maintenance contracts for 12 months beginning at any time during
the fiscal year.
The committee recommends a new subsection (n) in Section 708,
which allows payment of unusual cost overruns incident to ship
overhaul, maintenance, and repair for ships inducted into industri-
al fund activities or contracted for in prior fiscal years provided the
Secretary of Defense notifies Congress prior to obligation of such
payment.
The committee recommends a new subsection (o) in Section 708,
which allows for payments from annual appropriations to industri-
al fund activities and/or under contract for changes in scope of
ship overhaul, maintenance, and repair after expiration of such
appropriations, for such work either. inducted into the industrial
fund activities or contracted for in that fiscal year.
The committee agrees to delete subsection (k) in Section 709, as
proposed in the budget, because availability of appropriations for
expenses of arrangements with foreign governments for cryptologic
support is now permanent law.
The committee agrees to delete, as proposed in the budget, the
section which .provided funds to be.available for operating expenses
of messes because it is contained in permanent law.
The. budget requested the deletion of the proviso contained in
Section 719 which prohibited the conversion of heating plants from
coal to oil at defense facilities in Europe. The committee recom-
mends restoring the proviso in section 719 and also restores section
737.
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
PROCUREMENT LIMITATIONS
The committee recommends additional language in Section 723
which prohibited the military clothing sales stores from purchasing
option uniform items from foreign manufacturers.
The budget requested the deletion of the test program for excep-
-i tions of payment of a price differential on contracts hereafter made
for the purpose of relieving economic dislocations for certain con-
tracts not involving fuel by the Defense Logistics Agency. The
committee recommends restoring the above language but changed
the cumulative value to $5 billion.
LEGISLATIVE LIAISON ACTIVITIES
The budget proposed to increase the amount authorized for legis-
lative liaison activities from $7.5 million last year to $8 million.
The committee did not agree to such change.
The Department of Defense Appropriation Act has for a number
of years contained a provision allowing for the transfer of funds
between the various appropriation accounts. Section 733 of the
accompanying bill continues this provision in fiscal year 1982.
Prior to 1972, the transfer of funds was restricted to appropri-
ations in the Act. Between 1972 and 1978 the provision was
changed so that transfers were permitted from any funds available
to the Department of Defense. In fiscal year 1979, the Congress
reverted to the original language by reinserting the words "in this
Act." This was done because the Department had been using this
provision to give new life to funds about to expire and initiate
development and procurement programs, contrary to the intent of
Congress.
For the past three years, the budget has proposed that the words
"in this Act" be deleted. The Committee recommends again this
year that the words "in this Act" be retained in order to maintain
discipline in budget execution and avoid the abuses of the past.
In fiscal year 1982, the budget also proposed that the ceiling on
total transfers be raised from $750,000,000 to $1,000,000,000. The
Committee likewise recommends denial of this request. Section 733
of the accompanying bill retains the $750,000,000 limitation.
FEDERAL EMPLOYEES COMPENSATION FUND
The budget proposed the deletion of this general provision which
placed a limitation on the amount of Defense funds that can be
paid to the fund. The committee recommends restoring the general
provision but increased the amount from $192.8 million to $206.1
million.
CIVILIAN HEALTH AND MEDICAL PROGRAM OF THE UNIFORMED
SERVICES
The committee recommends a proviso to section 741 which allows
personnel who have separate health insurance coverage covering
75 percent to utilize CHAMPUS benefits in lieu of seeking a waiver
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
from using a military medical facility within a 40-mile radius of
the patient's residence.
The committee agrees to delete language, as proposed in the
budget, which authorized a test program to determine whether it is
cost effective to allow direct, independent reimbursement to certi-
fied psychiatric nurses, other than certified nurse practitioners,
and certified clinical social workers.
The committee recommends deleting a section which permitted a
test to evaluate a capitation approach to providing medical care
because the test has been completed.
Since fiscal year 1978, the Department of Defense Appropriation
Act has had a general provision requiring the deposit of free assets
in the Treasury as miscellaneous receipts. Free assets are receipts
received by the Department as a result of sales of military equip-
ment (usually to a foreign customer) which does not have to be
replaced. The fiscal year 1982 budget proposed that the phrase
"unless provided by statute enacted during the First. Session of the
Ninety-seventh Congress" be inserted. This was consistent with an
Administration proposal to use free assets to buy additional equip-
ment for future foreign sales. The Committee has serious reserva-
tions about the advisability of such a proposal on the grounds of
budget control and backdoor spending. In addition, it is highly
doubtful that the proposed legislation will be enacted in the re-
maining days of this session. Therefore, the Committee recom-
mends denial of the proposed change. The language in Section 748
of the accompanying bill is identical to that included in appropri-
ation acts since 1978.
SENIOR RESERVE OFFICERS' TRAINING CORPS
The committee agrees to change the wording of section 749, as
proposed in the budget, because required standards were revised
during fiscal year 1981.
The committee agrees to delete, as proposed in the budget, the
general provision which prohibited the expansion of the competi-
tive rate program to Alaska and Hawaii.
The committee recommends amending section 752 to allow funds
appropriated for the Reserve to remain available until September
30, 1983.
DEFENSE PRODUCTION ACT LOAN GUARANTEES
The budget proposed the deletion of the general provision which
permitted the Department to make guarantees and requested simi-
lar language under the new heading "Defense Production Guaran-
tees." The committee again sees no reason for this change and
recommends the retention of section 755.
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
UNDERGRADUATE HELICOPTER PILOT TRAINING
The committee agrees to delete, as proposed in the budget, the
general provision prohibiting funds for the consolidation or realign-
ment of advanced or undergraduate pilot training squadrons of the
Navy. There are no proposals pending to consolidate or realign
such training.
OBLIGATIONS INCURRED IN ANTICIPATION OF APPROPRIATIONS
The committee recommends continuation of the general provi-
sion, section 756, which states that all obligations incurred in an-
ticipation of the appropriations and authorized provided in this Act
are hereby ratified and confirmed if otherwise in accordance with
the provisions of the Act. The budget requested the deletion of this
language, but the committee recommends restoring it because the
fiscal year 1982 bill did not become law prior to the beginning of
the fiscal year.
The committee agrees to the more restrictive language which
allows abortions only if the life of the mother would be endangered
if the fetus were carried to term, as proposed in the budget.
The committee agreed to the deletion, as proposed in the budget,
of this provision which prohibited the payment of a military dis-
ability annuity to anyone who retired from both military and civil-
ian positions for the same disability because it is now permanent
law.
The Committee does not agree to the budget proposal to delete
the general provision which requires the Department to charge a
fair market price for items of insignia purchased by the Depart-
ment of Defense for resale.
The committee does not agree to the budget proposal to delete
the general provision which requires all new audit on expenditures
be resolved within six months after completing initial audit report.
FEDERAL REPUBLIC OF GERMANY CLAIMS
The committee does not agree to the budget proposal to delete
the general provision which prohibits funding of anticipatory pos-
session compensation claims between the United States and the
Federal Republic of Germany, other than those listed in a 1973
agreement.
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
The committee does not agree to the budget proposal which
instructs the Department to improve collection of overdue debts
owed the United States.,
The committee does not agree to the budget proposal to delete
the general provision which prohibits funds for medical care in the
United States on an inpatient basis for foreign military and diplo-
matic personnel and their dependents.
FOREIGN CURRENCY FLUCTUATIONS, DEFENSE
The committee agrees to delete the general provision, as pro-
posed in the budget, which removed the military personnel ac-
counts from coverage by the Foreign Currency Fluctuations, De-
fense appropriation because it is now permanent law.
The committee does not agree to the budget proposal to change
the general provision which prohibits funds for second career train-
ing of air traffic controllers under Public Law 96-347.
The committee does not agree to the budget proposal to. delete
the general provision which prohibits funds for the purposes of
demilitarization of small firearms.
The committee agrees, as proposed in the budget, to add a gener-
al provision (Section 769) which would prevent paying for an in-
creased salary based upon a teacher having obtained an education
level of fifteen additional hours of education beyond a bachelor's
degree.
The committee agrees, as proposed in the budget, to add a gener-
al provision (Section 770) which would impose a 4.8 percent pay cap
on the teachers in the school system during the school year 1981-
82.
The committee recommends a general provision (Section 771)
which would prevent an adjustment in teachers' pay in excess of
4.8 percent for August and September 1981, the first two months of
the 1981-82 school year, as proposed in the budget. However, the
committee changed the wording to include the months August
through December 1981.
The committee agrees to delete, as proposed in the budget, a
general provision which gave this property to the State of Maine
for public purposes because it became permanent law.
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
The committee agrees to delete, as proposed in the budget, the
general provision which allowed cash awards to be paid not with-
standing a member's death, separation, or retirement from the
Armed Forces because it is now permanent law.
The committee recommends a new general provision (Section
772) which would insure the committee's full participation in deci-
sions to initiate multiyear contracts for major weapons systems.
The committee recommends a new general provision (Section
773) which would eliminate the loopholes in the language con-
tained in the FY 1981 supplemental act which precluded funds
appropriated from being available to reimburse defense contractors
for the cost of commercial insurance which would cover the cost of
correcting the contractors' own defects in materials and workman-
ship incident to the normal course of construction.
The committee recommends a new general provision (Section
774) which would permit full reimbursement of subsistence ex-
penses to enlisted personnel in a travel status while prohibiting
double payment for the same expenses.
The committee recommends a new general provision (Section
775) which would round military retirement service credit to the
nearest month for any portion of a year in excess of six months.
The committee recommends a new general provision (Section
776) which would limit rental reimbursement to the General Serv-
ices Administration to 50 percent of the Standard Level User
Charge.
The committee recommends a new general provision (Section
777) which would exclude the 5.2 percent active duty catch-up raise
from the base for calculating military retired pay.
PAY CAP FOR GUARD AND RESERVE TECHNICIANS
The committee recommends a new general provision (Section
778) which would limit the pay of Guard and Reserve techni-
cians to $50,112 annually. This is the same level at which all other
government employees are capped.
H.Rept. 97-333 --- 19
Aagroved For Release 2007/0
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
Currently some Guard and Reserve full time technician person-
nel in GS grades 14 and 15 earn in compensation considerably
more than $50,112 annually which is the rate of pay at which most
other government employees are capped. These technicians do
what is essentially one job, even though the conditions of their
emplyment require they be uniformed members of the Unit in
which they serve as "full-time" technicians. In order words, they
cannot hold the one job without the other. This is also different
from the Government employee who is a member of a Reserve or
Guard unit. In this case his membership is purely voluntary and
this represents a second job. Personnel who support the Navy
Reserve and Marine Corps Reserve do not receive two separate pay
checks for performing one job.
The continuation of th epay cap has led to a situation where
high level technicians, serving in GS grades 14 and 15 receive
maximum pay or nearly the maximum of $50,112 in pay for a full
time job and then receive anywhere from 60 to 100 additional days
of pay at the Lt. Colonel or Colonel level. This has the effect of
making their total pay level from the Deferal Government more
than that provded to high ranking generals and top ranking civil-
ian officials of the Department fo Defense.
The committee recommends a new general provision (Section
779) which would require the Department of Defense to notify the
Appropriations Committees before they waive RDT&E or other
non-recurring costs related to a foreign military sale.
The committee recommends a new general provision (Section
780) which would prohibit an employee who has been working in
Alaska or Hawaii and who is transferred or reassigned to the
United States from continuing to receive the higher Alaska or
Hawaii pay rate for two additional years.
The committee recommends a new general provision (Section
781) which would prohibit giving foreign nationals priority over
United States citizens living in a foreign country in filling vacant
positions.
PREPOSITIONED EQUIPMENT CONFIGURED IN UNIT SETS (POMCUS)
The committee recommends a new general provision (Section
782) to insure that the two additional division sets of Army equip-
ment will not be placed in storage in Europe.
ARMY MEDICAL INTELLIGENCE AND INFORMATION AGENCY
The committee recommends a new general provision (Section
783) to prohibit the operation of the Army Medical Intelligence and
Information Agency after September 1, 1982.
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
The committee recommends a new general provision (Section
784) which would insure the status quo is maintained with respect
to the Department of Defense dependents school system pending
Congressional action on the proposal to repeal the transfer of the
system to the Department of Education. The provision would pro-
hibit funding of the activities of the Advisory Council on Depend-
ents' Education.
The committee recommends a new general provision (Section
785) which would insure that the Secretary of Defense is charged to
administer the funds provided for operation of section 6 schools.
The committee recommends a new general provision (Section
786) which would allow wage board employees in the Wichita,
Kansas, area to have their wages fully updated after the current
wage survey is completed.
The committee recommends a new general provision (Section
787) which would permit the Department to lease no more than six
aircraft as suitable replacements for C-140 aircraft.
The committee recommends a new general provision (Section
788) which would prohibit the transfer of any article of military
equipment or data related to the manufacture of such equipment to
a foreign country prior to the approval in writing by the secretary
of the military service involved.
SINGLE MANAGER FOR CONVENTIONAL AMMUNITION
The Committee has included a- new general provision (Sec. 789)
which requires the Single Manager for Conventional Ammunition
to operate only under a Phase II directive after January 1, 1982.
This provision is further discussed at the beginning of the procure-
ment section of this report.
PROCUREMENT OF FOREIGN ADMINISTRATIVE USE VEHICLES
The Committee has included a general provision (Sec. 790) direct-
ing the Department of Defense to purchase vehicles for its adminis-
trative use fleet by competitive bidding without differential in
favor of foreign manufacturers. This provision applies to all pro-
curement contracts in excess of $50,000. The provision will give the
opportunity to bid for such work to companies who manufacture,
assemble and produce such vehicles in the United States or
Canada.
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
REPORT OF FUNDING TRANSFERS
The Committee reconmmends new general provision (Section
791) which would require the Secretary of Defense or the Director
of Central Intelligence to specifically notify the House and Senate
Appropriations Committees at least 15 days prior to the transfer of
funds between the Department of Defense and the Central Intel-
lignce Agency for activities different from that previously justified
to the Congress. The purpose of this provision is to include the
Appropriations Committees in the notification process similar to
the notification requirements of the intelligence oversight commit-
tees required by Section 103 of the Intelligence Authorization Act
for fiscal year 1982.
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 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
TITLE VIII
RELATED AGENCIES
INTELLIGENCE COMMUNITY STAFF
Appropriations, 1981 ............................................................................................ $18,271,000
New Obligational Authority, 1982:
000
13
563
Estimate ..........................................................................................................
,
,
Recommended ................................................................................................
12,563,000
Decrease ..........................................................................................................
The organization of the Intelligence Community Staff (ICS) was
approved by the President and the Congress by the process of
reprogramming fiscal year 1978 resources and by amending the
fiscal year 1979 budget. Final approval came with passage of the
fiscal year 1979 Department of Defense Appropriations bill which
explicitly provided funds and manpower levels for the Intelligence
Community Staff. That bill was signed into law by the President on
September 18, 1978. The ICS provides the -Director of Central Intel-
ligence with staff assistance to carry out his intelligence communi-
ty responsibilities.
The amended fiscal year 1982 budget for the Intelligence Com-
munity Staff totals $13,563,000 and 230 positions. Congress-subse-
quently authorized only 220 positions for fiscal year 1982. The
amount appropriated in fiscal year 1981 was $17,824,000 at which
time the ICS was authorized 245 positions.
During the past year, the Committee's Surveys and Investiga-
tions Staff conducted an in-depth review of the ICS organization,
its activities and responsibilities. A report was rendered under date
of July 1, 1981, at which time a reorganization of the ICS was then
taking place. The report was rather critical of the, ICS, and the
investigations staff was astonished at the disdain for the ICS held
by the rest of the intelligence community.
From a personnel standpoint, the ICS has never reached the
level of its 245 authorized positions. The highest number of employ-
ees was 225 reached in September 1980. At the end of June and
July 1981, it had an on-board strength of 201; at the end of August
1981, there were 203 personnel on board. The latest report indicat-
ed that at the end of September 1981, the on-board strength was
205 personnel.
The reorganization of the ICS was completed October 1, 1981, at
which time the Resource Management Staff and National Collec-
tion Planning Staff were eliminated. Other organizational changes
and consolidations were made, and the authorized level was set at
230 personnel, even though only 220 personnel were authorized for
fiscal year 1982 by Congress. The ICS reorganization was completed
too late in the year for the Committee to conduct a hearing to
determine if the asserted shortcomings of the ICS were corrected
by the recent reorganization. One would assume, however, that
with the elimination of prior staffs and realignment of others, a
reduction of more than 15 positions could be realized if there were
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any successful efforts made to streamline certain functional organi-
zations within the ICS.
The Committee has recommended funding for 200 positions in
the ICS for fiscal year 1982. This is the approximate level of on-
board strength the ICS has experienced since May 1981. To accom-
modate this level, the Committee recommends an appropriation of
$12,563,000, which includes $7,948,000 for personnel costs,
$2,265,000 for external contracts, and $2,350,000 for other costs, a
reduction of $1,000,000 from the amended fiscal year 1982 budget.
The Committee has directed its Surveys and Investigations Staff to
reevaluate the current ICS structure and functions to determine
whether or not the deficiencies noted in the July 1, 1981 report
have _ been addressed and corrected by the reorganization, and
whether or not the ICS does in fact require more than 200 person-
nel.
CENTRAL INTELLIGENCE AGENCY RETIREMENT AND
DISABILITY SYSTEM FUND
Appropriations, 1981 ............................................................................................ $55,300,000
New Obligational Authority, 1982:
Estimate .......................................................................................................... 84,600,000
Recommended ................................................................................................ 84,600,000
The Committee recommends $84,600,000, the budget request, for
the Central Intelligence Agency (CIA) Retirement and Disability
System Fund. The CIA Retirement Act of 1964 for Certain Employ-
ees (P.L. 88-643, October 3, 1964) authorized the establishment of a
CIA Retirement and Disability System for a limited number of CIA
employees, and authorized the establishment and maintenance of a
Fund from which benefits would be paid to qualified beneficiaries.
Payments to this Fund in fiscal year 1977 totalled $28,300,000.
The current request is $29,300,000 above the fiscal year 1981 appro-
priation of $55,300,000. It is estimated that payments to this Fund
will total $120,000,000 by fiscal year 1986. These annual payments
are mandated by law and are beyond the control of the Committee.
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INTELLIGENCE AND INTELLIGENCE RELATED ACTIVITIES
The Committee reviews the intelligence and intelligence related
activities budgets with the same degree of intensity as that afford-
ed other portions of the Department of Defense (DOD) budget.
Because of the highly sensitive nature of these activities, the re-
sults of the Committee's budget review are published in a separate
classified annex to this report. The classified annex is as detailed
and comprehensive as this report which accompanies the fiscal
year 1982 DOD Appropriations bill. The intelligence community is
expected to comply with the recommendations and direction in the
classified annex with the same degree of compliance afforded this
report and previous reports accompanying DOD appropriation bills.
COMMITTEE'S OVERSIGHT FUNCTION
In pursuing its oversight function in the intelligence and intelli-
gence related activities areas, the Committee held numerous sepa-
rate hearings and briefings which comprised several thousand
pages of transcript and written responses for the record relating to
those hearings. Also, there were several hundred pages of written
responses for the record not related to any specific hearing.
Additionally, the Committee has relied heavily on its Surveys
and Investigations Staff to augment and complement this oversight
responsibility. During 1981 a total of 16 separate study reports and
four memoranda were submitted by the Committee's investigative
staff. These 16 studies involved 17 investigators and 133 man-
months of effort. These reports were utilized extensively during the
Committee's review of the fiscal year 1982 intelligence and intelli-
gence related activities budgets. Prior to our hearings on the fiscal
year 1982 budget, the Committee made available to the intelligence
community copies of 13 current study reports, and the three re-
maining studies will be released to the intelligence community in
the next few weeks.
The Committee continues to be convinced that an intensive in-
vestigative effort in this overall intelligence area is merited be-
cause of the relative isolation of the intelligence community from
outside scrutiny. Traditionally, the intelligence agencies generally
have been exempt from routine review by the General Accounting
Office (GAO) except in a very limited and insignificant number of
instances. The GAO effort primarily encompass the intelligence
related activities areas.
The Committee's investigative study efforts have served a
common good over the years, both in furthering and assisting in
the Committee's oversight function and in surfacing important
issues for the intelligence community as a whole. During the past
six years, every intelligence activity has been investigated in depth
at least once, and several have been reviewed more than once by
the Committee's Surveys and Investigations Staff.
These investigative studies will be continued during the forth-
coming months. Thus far, the Committee has authorized six new
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study efforts involving the intelligence community. These studies
will permit the Committee to maintain a current data base and
ensure that the intelligence agencies are complying with previous
Committee directives and recommendations, and to discover new
problem areas or issues requiring Committee action.
NATIONAL FOREIGN INTELLIGENCE PROGRAM
The National Foreign Intelligence Program consists of those in-
telligence activities of the Government which provide the Presi-
dent, other officers of the Executive Branch, and the Congress with
national foreign intelligence on broad strategic concerns bearing on
U.S. national security. These concerns are stated by the National
Security Council in the form of long-range and short-range require-
ments by the principal users of intelligence and include political
trends, military balance trends, economic trends, treaty monitoring
and support to military theater commanders.
The National Foreign Intelligence Program budget funded in the
Department of Defense Appropriations Act consists primarily of
resources of the Central Intelligence Agency, the Office of the
Secretary of Defense, the Defense Intelligence Agency, the Nation-
al Security Agency, the Departments of the Army, Navy, and Air
Force, the Intelligence Community Staff of the Director of Central
Intelligence, and the CIA Retirement and Disability. System Fund.
The Committee has recommended reductions totalling
$21,096,000 in the fiscal year 1982 National Foreign Intelligence
Program budget. The recommended reduction is a net figure con-
sisting of both increases and decreases, the details of which are
explained in the classified annex to this report. In spite of the
reductions, very substantial real growth is provided, and the Com-
mittee believes that the funds recommended are more than ade-
quate to support the National Foreign Intelligence Program in the
forthcoming fiscal year.
INTELLIGENCE RELATED ACTIVITIES PROGRAMS
The Department of Defense Intelligence Related Activities (IRA)
are a diverse array of reconnaissance, surveillance and target ac-
quisition programs which are primarily a functional part of the
basic tactical military force structure, and provide direct informa-
tion support to combat operations. IRA include those activities
outside the General Defense Intelligence Program which respond to
operational command tasking for time-sensitive information as well
as to national command, control and intelligence requirements.
The Committee has recommended reductions totalling
$192,556,000 in the fiscal year 1982 intelligence related activities
budget. Of the total reduction recommended by the Committee, a
net total of $119,976,000 failed authorization. The reduction recom-
mended by the Committee also is a net figure consisting of both
increases and decreases, the details of which are explained in the
classified annex. The recommended total for IRA represents sub-
stantial real growth, which the Committee feels is more that ade-
quate to support these activities in the forthcoming fiscal year.
The following table reflects the changes recommended by the
Committee in intelligence related activities programs:
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Title I, Military Personnel: Thousands
Military personnel, Navy: TENCAP Office ............................................. - $0,070
Military personnel, Air Force: PARCS ..................................................... -0,500
Total change, military personnel ........................................................... -0,570
Title III, Operation and Maintenance:
Operation and maintenance, Air Force:
PARCS (communications) .................................................................... -0,500
PARCS (support) .................................................................................... -7,100
Classified program ................................................................................ -2,500
Defense support program .................................................................... -2,000
DEW line ................................................................................................ -19,400
Total change, operation and maintenance ................................... -31,500
Title IV, Procurement:
Aircraft procurement, Air Force: Classified program ........................... -8,100
Missile procurement, Air Force: Defense support program ................. + 12,000
Total change, procurement ..................................................................... +3,900
Title V, Research, Development, Test and Evaluation (RDT&E):
RDT&E, Army:
SOTAS ..................................................................................................... -69,776
Joint tactical fusion program ............................................................. -8,000
Classified programs ............................................................................... -11,719
Subtotal, Army ......................... .,....................................................... -89,495
RDT&E, Navy:
Classified program ................................................................................ -2,000
C2 Surveillance/Reconn. Support ..................................................... -2,465
Moored surveillance system ................................................................ -6,000
Subtotal, Navy .................................................................................... -10,465
RDT&E, Air Force:
Classified programs ............................................................................... - 0,600
Tactical fusion centers ......................................................................... -3,000
Advance warning systems ................................................................... -2,400
Space surveillance technology ............................................................ -5,000
CONUS OTH Radar ............................................................................. -4,000
Advanced Tactical Air Reconn. System ............................................ -3,000
Subtotal, Air Force ........................................................................... -18,000
RDT&E, Defense agencies -46,426
Total change, intelligence related activities ................................................... -192,556
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COMMUNICATIONS PROGRAMS
The Committee reviews communications programs on a function-
al basis rather than on an appropriations basis. This functional
approach is required since these activities affect almost every
aspect of DOD operations and can meaningfully be reviewed only
as a coherent whole rather than as separate pieces. The Committee
recommends the following adjustments in communications pro-
grams:
Appropriations, 1981 ................................................................................ 1$5,828,155,000
New obligational authority, 1982:
Estimate .............................................................................................. 16,401,905,000
Recommended .................................................................................... 16,300,821,000
Reduction ............................................................................................ 1101,084,000
' Includes the GPS program.
C3 DOCUMENTS
The new Administration has made various changes in the man-
.agement structure and the "program mix" of programs which have
traditionally been in the Telecommunications and Command, Con-
trol Programs (T&CCP) function. In light of this restructuring, the
Committee believes that the best approach for providing informa-
tion to the Committee on these important programs is to have the
office of the Deputy Under Secretary of Defense C 3 I extract from
the regularly printed justification books, i.e., Air Force Procure-
ment, Navy RDT&E, etc., the budget request for the programs in
the C 3 area. These "extracts" should be compiled in separate books
arranged in the major C3 categories and include introductory com-
ments giving an OSD perspective to the various C 3 categories and
tables or charts which would be useful for the Committee to ana-
lyze.
DISTRIBUTION BY APPROPRIATION OF $101,084,000 NET REDUCTION IN FISCAL YEAR 1982
COMMUNICATION PROGRAMS
Army Communications Programs:
AUTODIN II ..................................................................................... -$2,000 ......................................................................
WWMCCS-ADP ............................................................................... -2,000 ......................................................................
Telephone Services .......................................................................... -1,600 ......................................................................
Joint Tactical Communications ........................................................................................................ -$5,000 ......................
Global Positioning System ............................................................................................................... -21,002 ......................
SINCGARS ....................................................................................................................................... -3,000 ......................
Subtotal ...................................................................................... -5,600 ........................ -29,002 -$34,602,000
Navy Communications Programs:
AUTODIN 11 ..................................................................................... -600 ......................................................................
WWMCCS-ADP ............................................................................... -1,400 ......................................................................
Telephone Services .......................................................................... -1,600 ......................................................................
LEASSAT ......................................................................................... + 59,000 ......................................................................
Joint Tactical Communications ........................................................................................................ -2,750 ......................
NAUSTAR Global Positioning System .............................................................................................. -34,362 ......................
Extremely Low Frequency ............................................................................................................... -34,874 .......................
Global Positioning System .............................................................................................................. + 34,000 .......................
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DISTRIBUTION BY APPROPRIATION OF $101,084,000 NET REDUCTION IN FISCAL YEAR 1982
COMMUNICATION PROGRAMS-Continued
Subtotal ...................................................................................... +55,400 ........................ -37,986 +18,288
Air Force Communications Programs:
AUTODIN II ..................................................................................... -2,000 ......................................................................
WWMCCS-ADP ............................................................................... -2,000 ......................................................................
Telephone Services .......................................................................... -1,600 ....................................................................
Joint Tactical Communications Program .......................................................................................... -3,000 ......................
Global Positioning System ....................................................................................... -73,596 ..............................................
Subtotal ...................................................................................... -5,600 -$73,596 -3,000 -82,196
Defense Agencies Communications Programs:
Telephone Services .......................................................................... -200 ............................... ...............................
Long Haul Communications ............................................................................................................. -1,500 ......................
Subtotal ...................................................................................... -200 ........................ -1,500 . -1,700
Total ........................................................................................... +44,000 -73,956 -71,486 -101,084,000
Details on these recommended adjustments appear in the report
in the account in which the program appears. However, a few
observations will be made at this point of the report regarding
programs in which adjustments have been made in numerous ac-
counts.
COMMUNICATION EQUIPMENT FOR GUARD AND RESERVES
As noted elsewhere in the - report, a substantial increase is pro-
vided for equipment for the Reserve Component. This increase
included communications equipment specifically for the Air Na-
tional Guard. The increases for communications equipment for the
overall Reserve Component are not included in the above table
because most of the overall increase may be expended according to
priorities set by the Reserve Component and thus the portion of
the total to be expended on communications equipment is not
certain at this time. The Committee urges the DoD to submit
adequate budgets for communication equipment for the Reserve
Component.
WORLDWIDE MILITARY COMMAND AND CONTROL SYSTEM-AUTOMATIC
DATA PROCESSING (WWMCCS-ADP)
The WWMCCS-ADP system currently consists of 35 medium to
large computer systems. The systems are located around the world
at 26 major sites. Other sites are served by remote processors and/
or terminals. The role of this system includes providing informa-
tion necessary for planning, decision making and force deployment
and employment. A total of $196,393,000 is requested in fiscal year
1982 for this program.
The Committee notes that O&M costs for this system are project-
ed to grow from a level of $66,873,000 in fiscal year 1980 to
$120,062,000 in fiscal year 1983. The existing WWMCCS-ADP oper-
ational hardware/ software is very old and expensive to maintain.
Continued use of this hardware could result in operational deficien-
cies before its replacement.
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As the DoD continues to develop the future "architecture" of
WWMCCS-ADP it should addre?s the following issues:
-Replacement of those computer systems having immediate
shortfalls with modern upward compatible computers in the
most cost beneficial manner.
-Completion of a detailed information requirements analysis
that will serve as a basis for specifying a revised WWMCCS-
ADP architecture.
-Development of an architecture that satisfies and is responsive
to detailed information requirements analysis.
DoD's response to these observations should be submitted to the
Committee in three months. Prior to the submission of DoD's re-
sponse to these recommendations, no major initiatives should be
begun in the following programs:
32019K-WSE-$3.3 R&D
33152K-Joint Program Management Office-$3.9 R&D
32017K-Joint Technical Support Activity-$7.4 R&D
32018K-National Military Command System ADP Support-$4.1 Procurement.
The enhancement of DOD's capabilities for its secure voice tele-
phone system has been one of the highest priority program within
the communications program of the DOD. Presently, DOD intends
to proceed with ALCEP (AUTOSEVOCOM Life Cycle Extension
Program) which involves the procurement of various types of
equipment to improve the present system until the Standard Tele-
phone Unit 11 modified (STU-11M), which would incorporate the
latest secure voice technology, is available.
No funds in this bill are included for the ALCEP program. How-
ever, the Committee has made no dollar reduction since the funds
which were requested for ALCEP are to be used instead to procure
STU-11 telephones which will provide a high degree of secure voice
capability. A number of Federal agencies are planning on using the
initial STU-11's.
Since the DOD plans a major buy of STU-11M telephones, the
prudent course at this time is to begin to buy the STU-11 tele-
phone and then transition to the STU-11M as it becomes available.
Testimony presented to the Committee strongly supports this ap-
proach. The Committee has fully funded the RDT&E request for
continued development of the STU-11M.
JOINT TACTICAL COMMUNICATION PROGRAM (TRI-TAC)
The TRI-TAC program provides tactical communications equip-
ment for all branches of the Armed Services. Eventually, a
"family" of equipment, consisting of a wide variety of types of
equipment, will be deployed in the TRI-TAC program. A total of
$352,851,000 is requested for the TRI-TAC program. These funds
are requested in various accounts-Procurement, RDT&E, Military
Personnel-for the program.
Over the years the Committee has supported the program, but
has voiced its misgivings about the soaring costs, the long delay in
actual deployment of equipment, and the emphasis on high tech-
nology within the program. This program has been under develop-
ment since 1971. The so-called "Tick-39" switches which are the
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"heart" of the TRI-TAC system are reportedly performing well.
However, the Committee notes that they are very expensive.
The Committee has made a number of relatively minor reduction
to various RDT&E accounts for this program. The Committee en-
courages DoD and the TRI-TAC program officials to consider alter-
native, available or soon to be available capabilities to satisfy the
requirements that would assure a more timely fielding of the
system as RDT&E continues on this program.
DoD's cost for leased communications totals approximately
$500,000,000. Recent rate changes have significantly increased
these costs. The Committee believes that a number of changes,
some of which are already underway, can bring savings for this
area. Savings can be realized through (a) increased usage of FTS vs
commercial toll calls, (b) use of cost saving electronic switching
equipment, (c) use of lower cost alternatives, in lieu of AT&T
service, as is being done by various civil agencies, (d) consolidation
and elimination of dedicated circuits and consolidation of switching
in Metropolitan area. The Committee has recommended a reduc-
tion of approximately 1 percent in the total request for leased
communications.
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LIMITATIONS AND LEGISLATIVE PROVISIONS
The following limitations and legislative provisions not hereto-
fore carried in connection with any appropriation bill are recom-
mended;
On page 8, beginning in line 21, in connection with "Operation
and maintenance, Navy":
: Provided further, That not less than $59,000,000 shall
be available only for payments in support of the LEASAT
program in accordance with the terms of the Aide Memoire,
dated January 5, 1981
On page 9, beginning in line 18, in connection with "Operation
and maintenance, Air Force":
of which not less than $46,800,000 shall be available only
for the installation of modification kits into KC-135 air-
craft, and
On page 17, beginning in line 1, in connection with "Procure-
ment of weapons and tracked combat vehicles, Army":
of which $1,900,000 shall be available only for the con-
tinued testing and evaluation of 9mm handguns without
delay,
On page 17, beginning in line 24, in connection with "Other
procurement, Army":
(including not to exceed 14 vehicles required for physical
security of personnel notwithstanding price limitations ap-
plicable to passenger carrying vehicles but not to exceed
$100,000per vehicle)
On page 19, beginning in line 6, in connection with "Aircraft
procurement, Navy":
of which $37,000,000 shall be available only for purchase
of C-2 aircraft under a multiyear contract,
On page 23, beginning in line 18, in connection with "Aircraft
procurement, Air Force":
of which $1,817,600,000 shall be available only for pur-
chase of F-16 aircraft under a multiyear contract,
$103,500,000 shall be available only for the procurement of
B-707 aircraft to provide for engines and parts to re-engine
KC-135 aircraft, $121,700,000 shall be available only for
the procurement of A-7K aircraft only if such procurement
is authorized in the Department of Defense Authorization
Act, 1982,
On page 25, beginning in line 19, in connection with "Other
procurment, Air Force":
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of which $67,200,000 shall be available only for purchase
of AN/TRC-170 radios under a multiyear contract and for
related support,
On page 32, beginning in line 23, in connection with "Section 708
of the General Provisions":
; (m) for payments for depot maintenance contracts for
twelve months beginning at any time during the fiscal year;
(n) for payment of unusual cost overruns incident to ship
overhaul, maintenance, and repair for ships inducted into
industrial fund activities or contracted for in prior fiscal
years: Provided, That the Secretary of Defense shall notify
the Congress promptly prior to obligation of any such pay-
ments; and (o) for payments from annual appropriations to
industrial fund activities and/or under contract for
changes in scope of ship overhaul, maintenance, and repair
after expiration of such appropriations, for such work
either inducted into the industrial fund activity or con-
tracted for in that fiscal year.
On page 42, beginning in line 7, in connection with "Section 723
of the General Provisions":
. Neither shall any part of appropriations contained in
this Act be used to facilitate the sale of optional uniform
items by military clothing sales stores or by the Department
of Defense operated exchange system stores
On page 50, beginning in line 9, in connection with "Section 741
of the General Provisions":
: Provided, That the foregoing limitation shall not apply
to payments that supplement primary coverage provided by
other insurance plans or programs that pay for at least 75
per centum of the covered services
On page 55, beginning in line 21, in connection with "Section 752
of the General Provisions":
, except for funds appropriated for the Reserve, which
shall remain available until September 30, 1983
On page 61, beginning in line 12, in connection with "General
Provisions":
SEC. 769. None of the funds provided in this Act may be
obligated or expended to pay a person whose pay is deter-
mined pursuant to section 903 of title 20, United States
Code (section 5 of Public Law 86-91, as amended), any
increase in pay as the result of the establishment of any
new category of pay that was not in effect prior to the
school year 1979-1980.
On page 61, beginning in line 19, in connection with "General
Provisions":
SEC. 770. None of the funds provided in this Act shall be
available to pay a person whose pay is determined pursuant
to section 903 of title 20, United States Code (section 5 of
Public Law 86-91, as amended), any increase in basic com-
pensation as the result of adjustments pursuant to section
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
903(c) of title 20, United States Code, in excess of 4.8 per-
cent of the amount such person was entitled to receive for
the school year 1980-1981.
`On page 62, beginning in line 3, in connection with "General
Provisions":
SEC. 771. None of the funds available to the Department
of Defense by this or any other Act shall be available to pay
a person whose pay is determined pursuant to section 903 of
title 20, United States Code (section 5 of Public Law 86-91,
as amended), any increase in pay in excess of 4.8 percent for
the months of August through December 1981 as a result of
adjustments in pay made thereafter.
On page 62, beginning in line 10, in connection with "General
Provisions":
SEC. 772. No part of any appropriation contained in this
Act shall be available to initiate multiyear procurement
contracts for major weapons systems except as 'specifically
provided herein.
.On page 62, beginning in line 14, in connection with "General
Provisions":
SEC. 773. None of the funds appropriated in this Act
shall be available for obligation to reimburse a contractor
for the cost of commercial insurance that would protect
against the costs of the contractor for correction of the
contractor's own defects in materials or workmanship or
against the costs of fortuitous or casualty losses resulting
from such defects.
On page 62, beginning in line 20, in connection with "General
Provisions":
SEC. 774. None of the funds appropriated by this Act
which are available for payment of travel allowances for
per diem in lieu of subsistence to enlisted personnel shall
be used to pay such an allowance to any enlisted member in
an amount that is more than the amount of per diem in
lieu of subsistence that the enlisted member is otherwise
entitled to receive minus the basic allowance for subsist-
ence, or pro rata portion of such allowance, that the enlist-
ed member is entitled to receive during any day, or portion
of a day, that the enlisted member is also entitled to be
paid a per diem in lieu of subsistence: Provided, That if an
enlisted member is in a travel status and is not entitled to
receive a per diem in lieu of subsistence because the
member is furnished meals in an Government mess, funds
available to pay the basic allowance for subsistence to such
a member shall not be used to pay that allowance, or pro
rata portion of that allowance, for each day, or portion of a
day, _ that such enlisted member is furnished meals in a
Government mess.
On page 63, beginning in line 13, in connection with "General
Provisions":
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SEC. 775. Effective January 1, 1982, none of the funds
appropriated by this Act shall be available to pay the re-
tired pay or retainer pay of a member of the Armed Forces
for any month who, on or after January 1, 1982, becomes
entitled to retired or retainer pay, in an amount that is
greater than the amount otherwise determined to be pay-
able after such reductions as may be necessary to reflect
adjusting the computation of retired pay or retainer pay
that includes credit for a part of a year of service to permit
credit for a part of a year of service only for such month or
months actually served: Provided, That the foregoing limi-
tation shall not apply to any member who before January 1,
1982: (a) applied for retirement or transfer to the Fleet
Reserve or Fleet Marine Corps Reserve; (b) is being proc-
essed for retirement under the provisions of chapter 61 of
title 10 or who is on the temporary disability retired list
and thereafter retired under the provisions of sections 1210
(c) or (d) of title 10; or (c) is retired or in an inactive status
and would be eligible for retired pay under the provisions
of chapter 67 of title 10, but for the fact that the person is
under 60 years of age.
On page 64, beginning in line 8, in connection with "General
Provisions":
SEC. 776. No part of any appropriation, funds, or other
authority contained in this Act shall be available for
paying to the Administrator of the General Services Ad-
ministration in excess of 50 percent of the standard level
user charge established pursuant to section 210(j) of the
Federal Property and Administrative Services Act of 1949,
as amended, for space and services in effect on October 1,
1981.
On page 64, beginning in line 15, in connection with "General
Provisions":
SEC. 777. None of the funds appropriated by this Act
shall be available to pay the retired pay or retainer pay of a
member of the Armed Forces who, on or after January 1,
1982, becomes entitled to retired or retainer pay, in an
- amount that is greater than 94.8 percent of the amount to
which that member would otherwise be entitled.
On page 64, beginning in line 21, in connection with "General
Provisions":
SEC. 778. None of the funds appropriated by this Act for
the pay of Reserve and National Guard technicians based
upon their employment as technicians and their perform-
ance of duty as members of the Reserve components of the
Armed Forces shall be available to pay such technicians a
combined compensation in excess of the rate payable for
level V of the Executive Schedule.
On page 65, beginning in line 3, in connection with "General
Provisions":
H.Rept. 97-333 --- 20
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 Approved For Release 2007/03/03: CIA-RDP89M00610R000100040004-8
SEC. 779. None of the funds appropriated by this Act
shall be available to approve a request for waiver of the
costs otherwise required to be recovered under the provi-
sions of section 21(e)(1)(C) of the Arms Export Control Act
unless the Committees on Appropriations have been noti-
fied in advance of the proposed waiver.
On page 65, beginning in line 9, in connection with "General
Provisions":
SEC. 780. None of the funds appropriated by this Act
shall be available to make any payments authorized under
the provisions of subchapter VI of chapter 53 of title 5 to
any prevailing rate employee who is transferred or reas-
signed from a position in Alaska or Hawaii to a position in
another wage area outside Alaska or Hawaii on or after
April 1, 1982: Provided, That the foregoing limitation shall
not apply to a prevailing rate employee who is transferred
or reassigned as a result of a reduction in force or a func-
tional or organizational transfer from Alaska or Hawaii:
Provided further, That the foregoing limitation shall not
apply to a prevailing rate employee whose transfer or reas-
signment had been approved prior to April 1, 1982, or who
had applied for a position in another wage area outside
Alaska or Hawaii prior to April 1, 1982, and is accepted for
that position.
On page 65, beginning in line 24, in connection with "General
Provisions":
SEC. 781. None of the funds appropriated by this Act
shall be available after April 1, 1982, to pay for the direct
or indirect hiring of any locally hired non-United States
citizen in a position in an overseas area as specified in
Department of Defense Directive 1400.6 or Department of
Defense Instruction 1400.10 if qualified United States citi-
zens are available at the overseas area and have applied for
employment by the Department of Defense in such a posi-
tion: Provided, That this limitation shall not apply to non-
United States citizens employed before April 1, 1982, or to a
non-United States citizen who has been recognized by the
Department of Defense as a dependent of a military
member or a civilian employee of the Department of De-
fense.
On page 66, beginning in line 12, in connection with "General
Provisions":
SEC. 782. None of the funds appropriated by this Act
shall be available for the transportation of equipment or
materiel designated as Prepositioned Materiel Configured
in Unit Sets (POMCUS) in Europe in excess of four division
sets.
On page 66, beginning in line 17, in connection with "General
Provisions":
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SEC. 783. None of the funds provided in this Act shall be
available for operation of the Army Medical Intelligence
and Information Agency after September 1, 1982.
On page 66, beginning in line 20, in connection with "General
Provisions":
SEC. 784. None of the funds provided in this Act may be
obligated or expended to transfer the Defense Dependents'
Schools to the Department of Education, or to fund the
activities of the Advisory Council on Dependents' Educa-
tion until legislative proposals to repeal such transfer of
the dependents' schools are considered and acted upon by
Congress.
On page 67, beginning in line 1, in connection with "General
Provisions":
SEC. 785. Notwithstanding the provisions of section 505(c)
of the Omnibus Budget Reconciliation Act of 1981, funds
made available to the Department of Defense by this Act
for payments and arrangements authorized by section 505(c)
shall be administered by the Secretary of Defense who shall
be responsible for the conduct of programs with such funds
and who shall not delegate such responsibility outside of
the Department of Defense.
On page 67, beginning in line 9, in connection with "General
Provisions":
SEC. 786. Without regard to any other provision of law
limiting the amounts payable to prevailing wage rate em-
ployees, during the current fiscal year prevailing wage rate
employees employed in the Wichita, Kansas, wage area
shall be paid, beginning the first pay period beginning on
or after January 1, 1982, the wages determined as a result
of the full scale wage survey of that area scheduled to
become effective in January, 1982.
On page 67, beginning in line 17, in connection with "General
Provisions":
SEC. 787. Appropriations for the Department of Defense
shall be available until the end of fiscal year 1983 for lease
of no more than six aircraft, in accordance with applicable
laws and regulations, for the purpose of providing passen-
ger airlift support to the Department of the Air Force Spe-
cial Airlift Mission, pending procurement of suitable re-
placements for the C-140 aircraft.
On page 67, beginning in line 24, in connection with "General
Provisions":
SEC. 788. None of the funds in this Act may be used to
transfer any article of military equipment or data related
to the manufacture of such equipment to a foreign country
prior to the approval in writing of such transfer by the
Secretary of the military service involved.
On page 68, beginning in line 4, in connection with "General
Provisions":
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SEC. 789. Funds made available in this Act for the Single
Manager for Conventional Ammunition shall be used only
for implementation of phase II under a reissued Depart-
ment of Defense Directive 5160.65 after January 1, 1982.
On page 68, beginning in line 8, in connection with "General
Provisions":
SEC. 790. None of the funds available in this Act shall be
used by the Secretary of a military department to make a
contract for the purchase of administrative motor vehicles
that are manufactured outside the United States or
Canada unless the contractor was selected through competi-
tive bidding without a differential in favor of foreign man-
ufacturers: Provided, That this section does not apply to
contracts for amounts less than $50,000.
On page 68, . beginning in line 16, in connection with "General
Provisions":
SEC. 791. None of,'the funds appropriated in this Act may
be made available through transfer, reprogramming or
other means for any activity different from that previously
justified to the Congress unless the Director of Central In-
telligence or the Secretary of Defense has notified the House
and Senate Appropriations Committees of the intent to
make such funds available for such activity.
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ADDITIONAL VIEWS OF HONORABLE JOSEPH P. ADDABBO
The action of the Defense Subcommittee in reducing the Defense
budget by $4.2 billion is certainly a step in the right direction but
it represents only a portion of wasteful spending found within the
budget request that should have been eliminated. After extensive
debate the Subcommittee declined to make further cuts in margin-
al programs at this time. My belief is that we could have prudently
cut $11.2 billion without harming necessary military programs or
hindering national security in any way.
I will discuss only three such program areas. The first is the Bl-B
strategic manned bomber. The budget requests $2.4 billion this
year for the B1-B, $1.9 billion for procurement and $500 million for
research and development. Almost all of the bad things that can
happen to a major procurement program are present in the Bl-B
program. There is far too much concurrency between development
and production. More than one-half of the aircraft are scheduled to
be produced and delivered before the development program has
been completed. The Bl-B is obsolete. It is an old design. There are
better ways to penetrate enemy defenses than those offered by the
Bl-B. The costs are completely out of control. The Air Force offi-
cially claims that development and production of 100 aircraft will
cost $19.7 billion in FY 1981 dollars. Internal Air Force documents
admit to a cost of $29.4 billion in "then-year" dollars. The Congres-
sional Budget Office estimates that the then-year dollar cost will be
$39.8 billion. The CBO estimate includes the cost of many systems
needed for the B1-B which the Air Force conveniently "forgot" to
include in its cost estimates, such as cruise missile carrying capa-
bility. At a cost of $290 million per copy, the Bl-B would be too
expensive. At a cost of $400 million each, it is ridiculous. The
spending of such sums for this purpose will take so much money
from needed defense programs, it will hurt, not help our national
security.
Another area in which huge savings could and should be made is
in theatre nuclear weapons. Our NATO allies for the most part do
not want and will not allow these weapons to be deployed in their
countries. There is no other way to usefully deploy them. Yet, we
are spending $367.1 million for procurement of the Air Force's
Ground-Launched Cruise Missile (GLCM) and $191.8 million for the
Army's Pershing II theatre ballistic missile. Until we have signed
agreements from the countries where the missiles must be de-
ployed, it makes little sense to produce them. The trend appears to
be away from obtaining such approval. Yet, the funds for both the
GLCM and Pershing II are included in the bill.
I strongly disagree with the decision by the Committee, by a vote
of 25 to 23, to reverse the decision of the Defense Subcommittee to
provide $1.9 billion for the MX. Following cancellation by the
Administration of the Multiple Protective Shelter system, we held
special hearings on the President's so-called "strategic package".
(307)
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We received testimony from the Secretary of Defense and his depu-
ties, and from Air Force personnel. One thing came through very
clearly-the basing mode for the MX is now completely unknown.
The Air Force admitted that it had no plan for any of the basing
modes mentioned as candidates in the President's package. It had
no costs. It had no schedules. It had no explanation of what FY
1982 R&D funds would be spent to do. Most certainly, developing
cost estimates and schedules and sensible deployment plans will
take time. As a first guess, the Air Force says it may have enough
information by 1984 on which to decide which basing mode to
pursue further.
Regarding the Administration's plan to place MX missiles in
existing Titan silos, the best that can be said is that the plan is
sketchy. The numbers of such silos to be modified is not decided.
The efficacy of hardening them is the subject of debate among
technical experts. The cost to carry out the plan, variously estimat-
ed at $5 billion and $7 billion, appears unequal to the value re-
ceived by a long way.
The net result is a picture of indecision on the part of the
Administration and the Pentagon. I firmly believe that providing
funds for MX is both premature and imprudent. My years on the
Defense Subcommittee have taught me that the Pentagon always
manages to spend every cent it gets. Whether the taxpayers get
value in return is often subject to question. Even if the MX pro-
gram were sound and well planned, which it is not, the huge sum
of $1.9 billion for R&D would not be spent in one year without a
great deal of waste. Any money provided for MX will be spent,
even though we are several years from knowing where the missiles
will be put. Clearly, funding for MX can be deferred until an
acceptable basing mode can be found.
There is absolutely no doubt of the adverse impact of defense
spending on the economy. Money which goes for national defense
and which does not produce any marketable goods or services is by
definition inflationary. Every year the American people pay a ter-
rible toll because of economic inflation. It appears that they will be
required to continue to do so at least for as long as the present
administration is in office.
One of the saddest aspects of the much touted increase in defense
spending is that many Americans have been led to believe that an
increase in defense spending automatically provides for greater
national security; but it does not. When the additional funds are
spent for consultants, cost overruns, obsolete weapons, and waste-
ful procurement policies and procedures, it is very easy to spend
more money but very difficult to obtain any additional real defense
capability. As I have tried to point out all year, the huge increase
in defense spending we are asked to agree to does not provide for
any major increases in military forces. The increase, and it, is a
large one, is primarily for the purpose of maintaining the status
quo. We are agreeing to pay more for the people we have and to
pay more for the equipment we purchase and the supplies we
purchase, but we do not get significant additional combat units for
the additional money we are spending.
As is pointed out elsewhere in the report, even with the $4.2
billion reduction which the Committee proposes, the Defense Ap-
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propriation Bill for Fiscal Year 1982 is $25.0 billion more than was
provided by the Congress for fiscal year 1981 including the FY 1981
supplemental. As a matter of fact, it is really more than $40 billion
more than was appropriated in the previous fiscal year because an
additional $7 billion was provided at the initiation of the new
Administration in a supplemental bill which was enacted into law
late in fiscal year 1981.
In a very interesting acknowledgement of defense spending un-
certainties, the Administration submitted a budget amendment on
the second of October which reduced by $7.6 billion the funds for
Defense that were requested in the April budget amendment. I
applaud the President for his efforts in this instance to try to
reduce unnecessary defense spending but it does not give an admin-
istration a great deal of credibility when funds are urgently re-
quested in April and then deleted in October.
The Appropriations Committee has ongoing a study of the pro-
curement policies and practices of the Department of Defense.
Along with the Chairman of the Full Committee and the ranking
minority members of the Full Committee and the Defense Subcom-
mittee, I have written to the Secretary of Defense with regard to
some of the findings from this study in the hope that these findings
would be useful to him in better managing the Defense Depart-
ment. Some of the major points discussed are:
(1) The over-emphasis on very advanced and uncertain technol-
ogy in the development of weapons systems;
(2) Excessive numbers of design changes and change orders
during development of a weapon system;
(3) Excessive and increasingly lengthy time required for develop-
ing a weapon system. For example, the first submarine-launched
ballistic missile submarine, the Polaris A-1, required 5 years. The
successor, the Polaris A-3, required 6 years. The new Poseidon C3
submarine took 9 years, and the now projected Trident C4 will take
about 11 years.
(4) The practice of contractors of submitting a low estimate to
"buy-in" on a contract and subsequently receive price increases
under the contract after the award.
(5) The lack of competitive procurement. Only about 11 percent
of DOD's procurement dollars are spent under the competitive
procurement method.
(6) The pyramiding of prices for components and parts by prime
contractors cost the taxpayers millions of dollars annually. An
example is given of a part which was purchased from a prime
contractor at the cost of $199,405.00. This part had been obtained
V by the prime from a subcontractor at a cost of only $9,770.
(7) Defense contractors continue to pass unallowable overhead
cost to the Department of Defense.
(8) Post initial provisioning reviews are not being conducted as
required by regulations and as a result there are severe shortages
of spare parts in many major equipments.
(9) The military services continue to resist the establishment of a
strong, workable challenging procedure for the requisition of non-
standard and nonstocked items.
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(10) Inventory losses in the military services run to the tens of
millions of dollars, due to inadequate supply of processes, losses in
transit and theft.
The wastes committed against the American taxpayer in the
name of national defense are many. Only constant vigilance on the
part of the Department of Defense, the military services and the
Congress can hope to cope with this situation. Unfortunately, when
an atmosphere is created in which there are constant outcries for
more and more defense spending, the atmosphere is created under
which the military services are given no incentive to become more
efficent.
When more money is requested by the Department of Defense
than the Department can adequately cope with, we can expect
nothing but bad management and waste. Ample evidence of the
fact that the Department is having more money thrown at it than
it can usefully spend is the sharp increase in unobligated and
unexpended balances. The Department's own projections, not mine,
show that it is estimated that at the end of fiscal year 1982, $29
billion will remain unobligated. That is, there will not be a binding
contractual obligation for the spending of those funds. This com-
pares with an estimated unobligated amount of $21.3 billion at the
end of fiscal year 1981, $17.8 billion in fiscal 1980, $16.2 billion in
fiscal 1979, and $16.7 billion in fiscal 1978.
The unbelievably large amount of $134.6 billion is estimated to
remain unexpended, unspent, at the end of fiscal year 1982 just for
those parts of the Department of Defense funded in this bill. This
is an increase of more than $36 billion more than the estimated
$97 billion remaining unexpended at the end of fiscal year 1981.
The actual figures for fiscal year 1980 are $79.6 billion; for 1979,
$72.6 billion; and for 1978, $64.6 billion. So, the unexpended bal-
ance for the Department of Defense will have more than doubled
in the past five years.
Looking at the huge influence Defense spending has on our
nation's economy and the huge influence Defense spending has on
our law-making bodies, brings to mind the admonition of former
President Eisenhower in his farewell address to beware of the
undue influence of the military-industrial complex. This nation is
much closer to a failure ' of civilian control of the military than
most citizens are aware. The present Administration has almost
given up trying to manage the military services and has turned
over that management almost exclusively to the military them-
selves.
The influence of the Defense Department and the Defense budget
is shown when one looks at some of the other appropriation areas.
The $25.0 billion recommended increase over last year-in the
Defense bill, as recommended by the Defense Subcommittee, is
more than the entire amount appropriated for the Department of
Agriculture. It is almost twice the amount appropriated for the
Department of the Interior or the Department of Transportation,
or the bill for Energy and Water Development.
If there was a justified need to sharply increase defense spending
or if the military services really proved what was needed or tried
to manage effectively, I would support the increases in defense
spending. Few of these factors are present.
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We must use the rule of reason and keep defense spending under
control and not sacrifice many genuine needs of our people need-
lessly.
ADDITIONAL VIEWS OF HONORABLE JULIAN C. DIXON
The Committee wishes to express concern over operation of the
Department's Private Dining Rooms which serves less than 100
selected senior members of the Secretary's staff, and the dispropor-
tionate rate of appropriations needed to maintain meal subsidies.
In 1980, subsidy of the five private dining rooms required appro-
priations of $1,438,322 according to the Department of Defense.
Although meal charges cover the cost of purchasing fodstuffs, ap-
propriated funds still cover 8 percent of the cost of lunches served.
The inflated meal costs result largely from inefficient operation.
The Navy's Executive dining room had a staff of 22 to serve 13,500
meals last year which its Air Force counterpart needed only 20 to
serve 28,000 meals, more than twice as many. Consequently the
Navy cost-per lunch ranged up to $31, while for the Air Force was
$12 per meal. Overstaffing is evident since the ratio is only 4.2
meals per dining service employee daily.
At a time when domestic programs are being seriously curtailed,
it is difficult to justify such an operation. In contrast, Federal
subsidy for the National School Lunch program is 21.5 cents per
meal as compared to 32 cents last year. The total average cost per
meal is less than $1.50 for the 26 million school lunches served
daily.
The Committee expects the Department to improve efficiency of
this operation, and report its progress in the fiscal 1983 budget
submission. It is the Committee's belief that subsidies should not
exceed three times the price charged per meal.
 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
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 Approved For Release 2007/03/03: CIA-RDP89M0061OR000100040004-8
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