[House Hearing, 105 Congress]
[From the U.S. Government Publishing Office]



             DEPARTMENT OF DEFENSE APPROPRIATIONS FOR 1999

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                       ONE HUNDRED FIFTH CONGRESS
                             SECOND SESSION
                                ________
                    SUBCOMMITTEE ON NATIONAL SECURITY
                   C. W. BILL YOUNG, Florida, Chairman
 JOSEPH M. McDADE, Pennsylvania      JOHN P. MURTHA, Pennsylvania
 BOB LIVINGSTON, Louisiana           NORMAN D. DICKS, Washington
 JERRY LEWIS, California             W. G. (BILL) HEFNER, North Carolina
 JOE SKEEN, New Mexico               MARTIN OLAV SABO, Minnesota
 DAVID L. HOBSON, Ohio               JULIAN C. DIXON, California
 HENRY BONILLA, Texas                PETER J. VISCLOSKY, Indiana        
 GEORGE R. NETHERCUTT, Jr., 
Washington
 ERNEST J. ISTOOK, Jr., Oklahoma
 RANDY ``DUKE'' CUNNINGHAM, 
California                          
          
 NOTE: Under Committee Rules, Mr. Livingston, as Chairman of the Full 
Committee, and Mr. Obey, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
    Kevin M. Roper, David F. Kilian, Alicia Jones, Juliet Pacquing, 
 Gregory J. Walters, Patricia Ryan, Doug Gregory, Paul W. Juola, Tina 
                        Jonas, Steven D. Nixon,
         David L. Norquist, and Betsy Phillips, Staff Assistants

       Jennifer Mummert and Sherry L. Young, Administrative Aides
                                ________
                                 PART 4
                                                                   Page
 Army Acquisition Programs........................................    1
 Navy and Marine Corps Acquisition Programs.......................  121
 Air Force Acquisition Programs...................................  247
 Research, Development, Test and Evaluation, Defense-Wide: 
Ballistic Missile Defense Organization............................  355
                                ________

         Printed for the use of the Committee on Appropriations

                                ________
                     U.S. GOVERNMENT PRINTING OFFICE
 77-457                     WASHINGTON : 2002





                     COMMITTEE ON APPROPRIATIONS

                   BOB LIVINGSTON, Louisiana, Chairman

 JOSEPH M. McDADE, Pennsylvania      DAVID R. OBEY, Wisconsin
 C. W. BILL YOUNG, Florida           SIDNEY R. YATES, Illinois
 RALPH REGULA, Ohio                  LOUIS STOKES, Ohio
 JERRY LEWIS, California             JOHN P. MURTHA, Pennsylvania
 JOHN EDWARD PORTER, Illinois        NORMAN D. DICKS, Washington
 HAROLD ROGERS, Kentucky             MARTIN OLAV SABO, Minnesota
 JOE SKEEN, New Mexico               JULIAN C. DIXON, California
 FRANK R. WOLF, Virginia             VIC FAZIO, California
 TOM DeLAY, Texas                    W. G. (BILL) HEFNER, North Carolina
 JIM KOLBE, Arizona                  STENY H. HOYER, Maryland
 RON PACKARD, California             ALAN B. MOLLOHAN, West Virginia
 SONNY CALLAHAN, Alabama             MARCY KAPTUR, Ohio
 JAMES T. WALSH, New York            DAVID E. SKAGGS, Colorado
 CHARLES H. TAYLOR, North Carolina   NANCY PELOSI, California
 DAVID L. HOBSON, Ohio               PETER J. VISCLOSKY, Indiana
 ERNEST J. ISTOOK, Jr., Oklahoma     ESTEBAN EDWARD TORRES, California
 HENRY BONILLA, Texas                NITA M. LOWEY, New York
 JOE KNOLLENBERG, Michigan           JOSE E. SERRANO, New York
 DAN MILLER, Florida                 ROSA L. DeLAURO, Connecticut
 JAY DICKEY, Arkansas                JAMES P. MORAN, Virginia
 JACK KINGSTON, Georgia              JOHN W. OLVER, Massachusetts
 MIKE PARKER, Mississippi            ED PASTOR, Arizona
 RODNEY P. FRELINGHUYSEN, New Jersey CARRIE P. MEEK, Florida
 ROGER F. WICKER, Mississippi        DAVID E. PRICE, North Carolina
 MICHAEL P. FORBES, New York         CHET EDWARDS, Texas
 GEORGE R. NETHERCUTT, Jr.,          ROBERT E. (BUD) CRAMER, Jr., 
Washington                           Alabama                            
 MARK W. NEUMANN, Wisconsin
 RANDY ``DUKE'' CUNNINGHAM, 
California
 TODD TIAHRT, Kansas
 ZACH WAMP, Tennessee
 TOM LATHAM, Iowa
 ANNE M. NORTHUP, Kentucky
 ROBERT B. ADERHOLT, Alabama        
          
                 James W. Dyer, Clerk and Staff Director

                                  (ii)

 
             DEPARTMENT OF DEFENSE APPROPRIATIONS FOR 1999

                              ----------                              

                                       Thursday, February 26, 1998.

                       ARMY ACQUISITION PROGRAMS

                               WITNESSES

DR. KENNETH J. OSCAR, ACTING ASSISTANT SECRETARY OF THE ARMY FOR 
    RESEARCH, DEVELOPMENT AND ACQUISITION
LIEUTENANT GENERAL PAUL J. KERN, MILITARY DEPUTY TO THE ASSISTANT 
    SECRETARY OF THE ARMY FOR RESEARCH, DEVELOPMENT AND ACQUISITION, 
    U.S. ARMY
LIEUTENANT GENERAL WILLIAM H. CAMPBELL, DIRECTOR OF INFORMATION SYSTEMS 
    FOR COMMAND, CONTROL, COMMUNICATIONS AND COMPUTERS, U.S. ARMY

                              Introduction

    Mr. Young. The meeting will come to order.
    This afternoon the hearing is closed because of the 
potential classification of some of the material that we will 
be discussing.
    We are very happy to welcome Dr. Kenneth Oscar, the Acting 
Assistant Secretary of the Army for Research, Development and 
Acquisition; Lieutenant General Paul Kern, the Military Deputy 
to the Assistant Secretary; and Lieutenant General William H. 
Campbell, Director of Information Systems for Command, Control, 
Communications and Computers.
    I believe this is the first time that the three of you have 
appeared before the Committee. We will place your biographies 
in the record so that we will have a record of your appearance 
for posterity.
    We obviously are interested in the future of the Army. We 
had a good session this morning with the Acting Secretary of 
the Army and with General Reimer, and we saved all of the 
specific acquisition issues for this afternoon.
    We are anxious about the modernization of the Army, as you 
would expect, as we have been for many, many years. We are 
concerned about the rapid rate that we are using up our Army 
assets and many of the contingencies that we are dealing with. 
We are pleased that the President's budget seems to be a little 
more realistic this year than it has been in recent years, and 
we are especially glad of that because we don't have any extra 
money to spend this year to add to the President's budget, 
unless we get a miracle of some kind through the Budget 
Committee.
    We are interested in Force XXI, where we are getting, where 
we are in dealing with Force XXI, where we expect to be, what 
Force XXI needs in order to stay on schedule. Army helicopters, 
of course, are always a big issue. And so, Dr. Oscar, we are 
happy to hear from you.
    First, let me see if Mr. Murtha would like to comment.
    Mr. Murtha. Mr. Chairman, I will only say that the 
intelligence of these guys, meaning the gathering of 
intelligence, is superb, because this morning the chief came 
having all the answers before we even started. These guys, of 
course, are acquisition, but we gave the chief all the 
questions.
    Mr. Young. Dr. Oscar, we are very happy to hear from you. 
You are welcome to summarize your statement. Your entire 
statement will be placed in the record, and you are welcome to 
summarize it any way you would like, sir.


                     SUMMARY STATEMENT OF DR. OSCAR


    Dr. Oscar. Thank you, Mr. Chairman. I will summarize it, 
and I would also like General Kern to make a brief statement.
    Before I do, I would like to introduce three additional 
people: Dr. Fenner Milton, who is the Chief Scientist of the 
Army; General Rose, is the Head Director of Requirements in 
Deputy Chief of Staff for Operations and Plans (DCSOPS); and, 
behind me, Colonel Jeanette M. Edmunds is the Director of 
Ammunition.
    Mr. Young. We are happy to have all of you.
    Dr. Oscar. Thank you.
    As you know, over the last several years the Army has had a 
lot of reductions--reduced budgets; reshaping for the new 
world. At the same time, we have accomplished a lot of 
missions--helped in riots; in hurricanes; in drug wars; and 
floods in the Midwest; deployments in Haiti, Rwanda, Saudi 
Arabia, and Bosnia.
    With your help, we have been able to mitigate the effect on 
our soldiers and still do all those things. We had to focus on 
readiness and quality of life; and, oftentimes, modernization 
was sometimes pushed out a little bit or sacrificed. And so we 
weren't always able to take advantage of all the technology 
that we would like to have put into our weapons for thefuture. 
And, indeed, some of our equipment has aged.
    This fiscal year 1999 President's budget, for the first 
time in over 10 years, shows over a billion dollar increase in 
procurement. Our procurement budget is about $8.2 billion, 
which is about one-sixth of the Defense Department's 
procurement budget. And it not only goes up a billion dollars 
over 1998, but it goes up a billion dollars every year from the 
1999 to 2003 period.
    Our Research, Development, Test and Evaluation (RDT&E) 
budget is about $4.7 billion, about one-eighth of the Defense 
Department research and development budget, and it is pretty 
steady. There is a slight growth in the outyears.
    With that increase we have been able to put together what I 
think is a good modernization plan that has five key elements. 
The first is digitization; second is overmatch capability; the 
third is equipment recapitalization; the fourth is equipment to 
integrate the Guard and Reserve with the Active force; and the 
last is focusing the technology base on the Army After Next.
    For several years we have been fielding digitization or 
information management systems with our weapons. That is in the 
form of digital radios, computers, data buses, and so on, 
vehicles like the M-1 and A-2 tank. They have been fielded with 
these new devices.
    We have added to the budget $261 million in fiscal year 
1999 to take all of these weapons that we are fielding and 
integrate them together. We have determined that through our 
warfighting experiments, we can get a leap-ahead technology 
capability by linking them together instead of having each one 
digitized separately.
    It is very much like our houses. AT&T and America Online 
puts a backbone in, an Internet, and allows our telephones, our 
computers, our TVs to be linked together so that we can 
communicate and get synergism between each other. The 
battlefield is like that also.
    We have found that if we can spend this extra money taking 
a mobile internet and putting the switches in, the backbone, 
all these weapons would be linked together and give us a real 
big additional capability on the battlefield. So, as a result 
of that, our goal is to digitize a division by the year 2000 
and a Corps by the year 2004.
    In the second area, we would like to make sure that we 
maintain our combat overmatch so we can have a few selected 
weapons. Such as a Javelin fire-and-forget antitank weapon, a 
Comanche helicopter, the Crusader howitzer, Brilliant Anti-
Armor Submunition (BAT), or, for the Army Tactical Missile 
System (ATACMS) that will give us a good leap-ahead capability 
and make sure we maintain various areas of the battlefield on 
overmatch capability against the enemy.
    In the third area, equipment recapitalization, this is an 
area that over the last number of years we have had to stretch 
out; and, indeed, our equipment has aged. So what we are doing 
is we are putting additional money into focus on trucks, cargo 
helicopters, mobile electronic generators, and water purifiers. 
These are the items that have aged the most; and these are the 
items, like in Bosnia today, where they are really at war every 
day. The trucks are running up and down the highways in these 
exercises, like Haiti, Somalia, Rwanda, Bosnia; and they are 
getting a lot of use and are wearing out.
    So we are focusing on a lot of the older ones that have 
significant operations and support costs to do either depot 
maintenance overhaul or do a kind of Extended Service Program 
(ESP) or, in some cases, buy new so we can either get new 
equipment in to lower the age or to redo this equipment and 
extend their life, and lower the operations and support costs.
    The fourth area, we have put 33 percent more money this 
year into our Guard and Reserve to give them the equipment they 
need as we integrate them into the Active force. We have 
purchased with that money a lot of new air defense systems: ten 
new Black Hawk helicopters a year, a Sentinel, 200 line haul 
tractors, and over 54 20-ton dump trucks. Together with the 
additional money, the cascading equipment, we feel that we will 
be able to support the Army's integration plans to have a real, 
total Army.
    The last area is to focus our tech base on the Army After 
Next. This digital Army we talk about that we are going to be 
fielding between the year 2000 and about 2010 is our next Army. 
The money we are spending today in tech base is going to 
produce the Army After Next.
    We have done a series of analysis and war games. We will 
soon be looking at perhaps identifying the second Armored 
Calvary Regiment (ACR) to use that as kind of a strike force, 
an experimental force to test out new concepts in a tech base. 
To date, we have learned that we need to focus our money, and 
we have done that, on increased mobility, reducing the 
logistics footprint on the ground, reducing Operations and 
Support (O&S) costs and new target acquisition capability to 
take advantage of these precision strike weapons.
    So, in summary, I feel that we have taken our budget an we 
have balanced it among all the options of the new equipment, 
upgrading the old equipment, leap-ahead capability, 
digitization; and we have a good, balanced budget that will 
continue our capability today to win our Nation's wars and 
reduce our casualties on the battlefield.
    With that, I would like General Kern to make a few remarks.
    [The joint statement of Dr. Oscar and General Kern 
follows:]

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]




                   Summary Statement of General Kern

    General Kern. Mr. Chairman, as you noted, this is my first 
testimony before this Committee; and I am very pleased to be 
here today. But I have to note a year ago today I was at Fort 
Hood, Texas, deploying a division to Fort Irwin, California, 
for the experiments that we did in the desert last year.
    A remark was made about that it was largest rail move out 
of the State of Texas since Desert Storm. And that was a 
typical movement now for the United States Army to be able to 
pick up and deploy and get ready to do something in an area for 
which they are not home based.
    The second point I would make of that was the tremendous 
performance of the soldiers that took place in the field with 
some very high-tech equipment that was still very much in the 
prototype phase.
    I would like to read, if I could, just two comments from a 
letter from Secretary Cohen, that was sent to me when he 
returned from that exercise.
    He said, ``These warfighting experiments may well prove to 
be as important in defining the Army of the future as George 
Marshall's Louisiana maneuvers were to defining the Army that 
won World War II.''
    There is a process that is ongoing within the United States 
Army to adapt to the 21st century, and we are living now as 
part of that. I have to tell you it was very exciting to be 
part of that.
    He then went on to say, ``I saw soldiers who had put aside 
fatigue and stress to give everything they had to fight the 
battle at hand. I saw soldiers who had mastered complex 
technology and turned it to their advantage on the 
battlefield.''
    Again, a testimony to our soldiers. These are bright young 
men and women who have to teach many of the older folks, like 
myself, as the division commander, how to really master this 
technology. They are very comfortable with computers. They are 
very comfortable with a lot of the equipment we are using and 
now putting in the relatively tough environment, and they 
showed us what could be done.
    I was joined by General Campbell at the time, who was in a 
different role also as the Program Executive Officer for 
Command and Control Communications; and we had to narrow down 
some 300 different ideas to things that would work. We took 
about 70 of them to the desert to prove that they could work, 
and we learned an awful lot.
    Colonel Edmunds at the time also was out there with us. She 
commanded a Corps support group. I had taken many of her trucks 
with me that we had modified. These were Palletized Loading 
System (PLS) trucks that we used, but we had enhanced them with 
digital technology so we really knew where they were. So 
instead of wondering where the truck was out there with the 
part and the fuel and the ammunition that was trying to get to 
the battlefield, we were able to precisely get it from the 
supply base to the tank, the Bradley, the Howitzer, that needed 
those components.
    It was a very remarkable performance for all of us to be 
able to see those things come together and learn what the 
future could look like for the United States Army. We are not 
there yet. With your help, though, and this budget we have 
submitted, we will move a long way towards achieving the goals 
of a division by 2000 and a Corps by 2004.
    I would like to point out one other experience to you that 
is perhaps not usually associated with the acquisition 
business.
    Two weeks ago, I was in Sarajevo visiting a number of our 
officers but also some young enlisted Marines and Air Force 
Noncommission Officers (NCOs) who were working with our 
acquisition contracting officers in contingency contracting. 
Some of these same people we have been working in our 
acquisition offices back here are going over to Bosnia, and 
they have been to Haiti and Somalia as well for 6 months, to 
take their skills as contracting officers and to put them at 
work providing supplies and services to our soldiers in the 
field there, renting vehicles, buying fuel, buying goods on the 
local economy.
    Two remarkable things about that: One, it was clearly a 
joint operation, with a Marine gunny sergeant working for an 
Army major and an Air Force chief master sergeant working for 
another Army major; and we had these people working together 
that were putting money into the Bosnian economy to rebuild it. 
So the acquisition skills that we learned back here in building 
our weapons programs are also being used by our young 
acquisition personnel in rebuilding a country overseas.
    So this is, sir, an honor to be here today; and I am 
looking forward to your questions.
    Mr. Young. General, thank you very much.

                 Summary Statement of General Campbell

    Mr. Young. We are happy to have you here today, General 
Campbell. Did you want to make a statement before we go to 
questions?
    General Campbell. I would add briefly, Mr. Chairman, these 
are very exciting and important times for the Army. We are 
committed to providing the digitized Army of the 21st century 
and our soldiers of the 21st century the very best weapon 
systems possible; and we are adopting from the commercial 
industry their best practices, to include cycle development and 
shortening cycle times and continuous product improvement into 
the systems that we provide to our soldiers so that they can 
get ahead, stay ahead and win the nation's wars.
    Thank you, sir.
    Mr. Young. Thank you, sir, and I hope that you know that 
this committee is committed to that same dedication that you 
just mentioned.

                             DIGITIZED ARMY

    Mr. Young. Now, would one of you tell us, give us some 
examples of what is a digitized Army. I know some of our 
Members went to the exercise that you mentioned in California. 
Mr. Lewis was an observer there for the Committee; and his 
reports were very, very positive and pretty exciting, actually. 
But give us some specific examples that we can understand about 
what is a digitized Army.
    General Kern. Sir, I will start; and then I will ask 
General Campbell to add some more technical aspects of it.
    From the perspective of the warfighters, the commanders and 
the soldiers there, the digitized Army answers the questions 
for them: Where am I, where are you, where my buddies are, and 
where is the enemy? And we do that through a series of 
networked systems.
    We created two networks, one a tactical network, which was 
down at the individual crew level. That was done by taking the 
Single Channel Ground and Airborne Radio System (SINCGARS), 
which is a digital radio and, in addition to carrying voice, 
they also carry a digital message stream. That was coupled 
through a network system which General Campbell can explain 
which we borrowed from the commercial world and technology. We 
added as you went up there, another data radio, which is also a 
data radio which is in our system today, the Enhanced Position 
Location Reporting System (EPLRS), which is used by both the 
Army and the Marine Corps, that was meant to carry pure data.
    The data information that was carried there painted a 
mapped picture of where each vehicle was on the battlefield so 
that you could look around at your computer screen and see 
where the members of your platoon were, day or night, and you 
could tailor that software so that it could also tell you where 
your company was and a battalion commander could look to see 
where his companies were.
    That system was networked into the Army's battle command 
system, which provided the commander of the battalion and 
brigade a picture of where every unit was on the battlefield. 
In an analog unit, that would have been done by voice reports 
which were passed over the voice net and then recorded by a 
radio telephone operator at each echelon and forwarded up the 
stream.
    Normally, in a division, for that information to make it 
from the platoon back up to the division headquarters usually 
took about four hours, and about a third of the information was 
probably not very accurate by the time it was transferred. What 
happens in a digital division, the information is passed 
electronically, and the map showing where the units are is 
accurate, and its usually within 2 to 3 minute of being real 
time.
    This allowed us also to data link that information to the 
cockpits of some of our A-10s, and a satellite link with the 
Marines. It gave us and their cockpit a picture of where the 
closest friendlies were to a target they wanted to hit. So we 
had that exchange of information.
    We also down-linked information that came through multiple 
intelligence sources to paint the picture of where the enemy 
was. We down-linked Joint Surveillance Target Attack Radar 
System (JSTARs) data, down-linked Guardrail data, down-linked 
national information data from satellites, and this was brought 
back through the command and control system. We also displayed 
it on the broadcast system all the way down to the battalion 
level so that they had a pretty accurate picture of not only 
where the friendly forces were, but also where we were 
detecting the enemy to allow us to target them.
    This was all done through these electronic digital systems. 
Two networks, a tactical one, which today we call the Force XXI 
battle command brigade, and the and below ATTC system and the 
Army battle command system, which is a series of systems which 
are linked to together to provide combat service support, 
intelligence and maneuver information for our support.
    This is a big picture of what digitized Army means, 
answering the question to the soldier about where he is on the 
battlefield, where his friends are on the battlefield and, 
through the intelligence collection systems, then paints the 
picture back to him about what we can detect on where the enemy 
is.
    Mr. Young. How does the individual soldier know where he 
is? Does he have something that he carries with him to indicate 
to him where his command battalion headquarters might be or 
where the regimental leadership is? To what level does that 
digitization make that available?
    General Kern. Sir, we did that with a mechanized unit, so 
most of that information was then displayed in tanks and 
Bradleys and in command posts rather than on the individual 
soldiers. We did it with one of the light infantry battalions 
we had from the 25th Division at Fort Lewis which had some 
individual systems.
    But I have to be honest with you that those systems were 
very much a prototype and not nearly as reliable as the 
vehicular system. So what I will describe to you is what was in 
the vehicle.
    Essentially, it was a computer screen that had on it a 
digital map of, Fort Irwin, in this case, and displayed on the 
map were the icons for the different types of vehicles within 
that friendly unit. So if you were a tank commander you could 
look at your screen and you could see where the rest of your 
platoon and company was located. If you were the battalion 
commander, you could look at the 58 systems that were in your 
battalion and see where they were arrayed on the ground.
    So it was done on a computer screen with a map database 
pictured, and then messages came through just as they would on 
your computer as a line message type data.
    Dr. Oscar. This is enabled by the Global Positioning System 
(GPS), that comes from the satellites that show the location of 
these.
    General Kern. Two systems were used to actually geolocate 
our vehicle. One, as Dr. Oscar said, was the GPS, and the 
second was the RPLRS system, which also is a position locating 
system, one doing it from satellite time and distance factors, 
another triangulation across the EPLRS base stations.

                    MODERNIZATION ACCOUNT PRIORITIES

    Mr. Young. Your modernization account is about 6 percent 
over last year's appropriated level for fiscal year 1999, and 
we are happy to see that, as I mentioned earlier. Tell us, what 
are your highest priorities for this modernization? Give me 
that four highest priorities that you are dealing with.
    Dr. Oscar. The highest priority is the digitization, $261 
million to integrate all this together and form that backbone. 
The second and third are the Crusader howitzer and the Comanche 
helicopter. That will give us leap-ahead capability on the 
battlefield. The fourth is really kind of a collection of 
certain missiles that are guided, like the fire-and-forget 
Javelin and BAT ATACMS.
    It is kind of a grouping of equipment that will give us an 
increased capability on the battlefield very much over whatwe 
have today.
    [Clerk's note.--Dr. Oscar did not include the BAT ATACMS 
system in his original testimony.]
    Mr. Young. Does this budget submission keep those programs 
at the rate that they ought to be?
    Dr. Oscar. I believe this program that we have has the best 
balance of introducing new equipment and having programs to 
protect the equipment that exists.
    It is sort of like you have a taxi cab fleet in Brooklyn 
and you have 100 taxicabs and they last 10 years apiece and if 
you buy 10 taxicabs a year, you keep your fleet at the average 
age. So we need so much money a year. If you push it out and 
don't buy taxicabs, you are going to get to a point where you 
are going to have to buy more. Or if you wait to the end, you 
have to buy a whole hundred; and you rally can't afford that.
    At the same time as you would like to modernize, maybe you 
would like to put radios in your taxicabs or a GPS system so 
you know where they are and can communicate with them.
    The Army is committed to those two parts. Part of the 
budget is to replace equipment that is aging. And sometimes we 
have to decide, well, I can't afford to buy all new; maybe I 
will rebuild some to stretch out their life; and I would like 
to introduce some new things, like digitization or radios or a 
guided missile.
    I believe this program has the best balance with the money 
available to increase our technical capability in our weapons 
that give us combat overmatch from the enemy so we can win and 
maintain that average age or try to keep it from getting too 
old and having our operations and support costs go too high.
    Mr. Young. You all must have been comparing notes over 
there across the river. We heard that taxicab story yesterday, 
too.
    Dr. Oscar. Is that right?

                       CRUSADER ARTILLERY PROGRAM

    Mr. Young. That is a good story.
    Several years ago, the Committee was interested in moving 
or accelerating the Crusader program, and the information we 
received was, well, we ought to keep it on track. Are you 
saying now we are moving more expeditiously to go to the 
Crusader?
    Dr. Oscar. Yes, we are. We had, a few years ago, a 
technical problem. The original program had a liquid propellant 
gun, and we had some technical difficulties, and we switched 
over to a parallel program we had. Actually, Congress very 
helpfully suggested that we create a parallel program because 
it was a high-risk program to start with.
    So we had a very novel gun system conventionally but with a 
modular ammunition that would give us very rapid firepower and 
range. So we came to a point a year or two ago where the liquid 
wasn't working out well, so we have switched over and rebase-
line the program, and it is proceeding at a very good rate, 
probably about the optimum rate as you can develop something. 
We are in development now, and it would be very difficult to 
speed it up.
    Mr. Young. Thank you very much.
    Mr. Murtha.

                       DIGITIZATION VULNERABILITY

    Mr. Murtha. Now, you all have seen the reports about 
hackers breaking into our system. As you probably know, the red 
team broke into our system much more extensively than the 
hackers did. How vulnerable is this system to breaking in and 
disrupting the system?
    Dr. Oscar. I am sorry, sir. Mr. Murtha, are you talking 
about the battlefield or----
    Mr. Murtha. No, the digital battlefield. All the components 
or any of the components of the digital battlefield.
    Dr. Oscar. The battlefield is much tougher, because it is a 
closed system. It is not open to people with modems to get into 
like the internet, like your business or office machines. The 
battlefield is more of a closed system.
    We have tested at the division level an exercise that we 
had at Fort Hood this November, not only trying to break into 
it but trying to jam it and bring it down, and we had pretty 
good results.
    I would like to ask General Campbell to address that in a 
little more detail.
    General Kern. I could make one quick comment.
    The systems we are using are encrypted. The Single Channel 
Ground Airborne Radio System (SINCGARS) radios and the Enhanced 
Position Location Reporting System (EPLRS) I talked about are 
encrypted systems, so they have the same level of protection 
that our voice data have that we are using. And we have an 
organization called the Land Information Warfare Agency (LIWA), 
which the Army has built; and which was very much, in part, the 
work we have done in red-teaming; both in the exercise last 
March and in the exercise that was done in November.
    Now I will let General Campbell, who is a real expert in 
this business in his other life, talk to you about the details.
    General Campbell. Yes, sir, I would like to talk about two 
aspects of the battlefield communication systems.
    The first is the tactical internet, which is the system 
General Kern described earlier that links all of the individual 
weapon systems together on SINCGARS and EPLRS today and in the 
future will also include the near-term digital radio. That is 
essentially an intranet, a closed system, which, as General 
Kern mentioned, is encrypted.
    The biggest security risk that we have with the tactical 
internet is loss or capture of a tactical internet component 
which has the crypto key loaded. That could compromise 
everything that was being transmitted across the battlefield. 
Consequently, we have built capabilities into the system to be 
able to block any individual radio and computer that captured 
or might have been lost or captured from entering back into the 
intranet. I think that is the most significant vulnerability 
for that tactical internet.
    [Clerk's note.--In General Campbell's original testimony he 
stated that the information security capabilities were 
currently being developed and would be tested this summer.]
    Mr. Murtha. That is a significant vulnerability?
    General Campbell. Yes, sir, it is.
    Mr. Murtha. What about the administrative attachments to 
it? For instance, obviously logistics, administration, 
deployments, all of those things are not near as secure. What 
is the interplay between the two systems?
    General Campbell. Yes, sir, attachments connected to the 
system, include the larger computer systems that are not just 
on the intranet but have internet connections as well. And 
there are two aspects of vulnerability there. One is a 
connection that goes off into the unclassified world into 
portions of the logistics world, and the second is----
    Mr. Murtha. Tell me what you are talking about. Are you 
talking about bringing water, food, ammunition up?
    Specifically, what is the administrative side versus the 
tactical side?
    General Campbell. The administrative side would be ordering 
spare parts, sending information on personnel, linking and 
things of that nature.
    Mr. Murtha. The medical side.
    General Campbell. Yes, the medical systems as well. With 
telemedicine we have a need for large communication pipes to 
link the medical community to the battlefield.
    What we are bringing into the system to protect ourselves 
in that area is a series of tiered capabilities, ranging from 
intrusion detection systems to firewalls, where we can block 
certain domains from getting into that portion of our internet.
    Mr. Murtha. But how would you recognize that somebody has 
interjected themselves into it?
    General Campbell. Your first look would be at the address 
itself. We are using commercial protocols. The way the 
commercial internet works, any internet protocol address can be 
pinged from any other protocol address. So it becomes very 
important to use to be able to exclude non military addresses 
or domains like educational institutions, as an example. At the 
same time, we have to provide linkages that go back into those 
portions of the commercial or the sustaining base world as 
needed and in order to execute our missions.
    We set up these introduction detection devices so that only 
a certain set of addresses would be allowed in. Then the next 
level beyond that is to have the computer recognize any 
patterns of unusual activity where people failed on two or 
three attempts on a password or where people are going into 
areas of the system that they should not be allowed. So it is 
tiered and layered defense.
    Mr. Murtha. Are you working in trying to stop jamming or 
just interception, are you working against experts who are 
funded by a country? For instance, do you have the experts 
working this problem? The red team, you know, the best people, 
okay; is that who is working against you and you are trying to 
then solve a problem with the red team working against the 
administrative sides of it?
    General Campbell. Yes, sir. We are doing two things: We are 
working against the red teams, and we are concurrently 
implementing countermeasures to capabilities that exist in the 
real world today. If you read The Washington Post front page 
this morning you would have seen the article about the 
intrusions that were attempted into the nonsecure portion of 
the government's internet.
    Mr. Murtha. All right. I can't get it in my head. You have 
the tactical side of it, which is an envelope, say. Then how 
does the administrative side attach to it? I assume they can 
jam or intercept or interject themselves into the 
administrative side fairly easily at this stage before you have 
worked out or eliminated the vulnerability. Is that accurate?
    General Campbell. Yes, sir, generally. So the tactical 
components I mentioned earlier are isolated, both by either 
blocking of external addresses or operating on an encrypted 
intranet.
    Mr. Murtha. That is even against jamming?
    General Campbell. Let me address jamming as a separate 
question.
    Where we deploy on the battlefield in a division, there 
will be about 5,000 SINCGARS radios that are used in both the 
voice and a data mode. All of the radios will be working in a 
frequency hopping mode. They are all working with the same hop 
set interleafed at different times so that many nets can 
communicate simultaneously.
    That is an extraordinarily difficult challenge to work 
against in a jamming mode because, first of all, because it 
would be a huge challenge to deploy a jammer powerful enough to 
jam the whole division area. Such a jammer would be an enormous 
target and would probably be blown away within the first 2 
minutes after it was turned on. And if you try to use selective 
jamming against all those radios that are frequency hopping, it 
would be a very, very difficult challenge.
    The EPLRS system, that we also use as part of the data 
backbone, is also a frequency agile system that hops over 
another set of frequencies in the Ultra High Frequency (UHF) 
range. I think, just as a matter of physics, all systems that 
use the electromagnetic spectrum are vulnerable to interference 
and jamming, either intended or notintended. But a hostile 
attempt to jam the entire force would be extraordinarily difficult to 
pull off and extraordinarily dangerous.
    Mr. Murtha. At this point even a large country wouldn't 
have the capability or, if they did, you would have the ability 
to destroy it very soon because you would be able to recognize 
the source of the jamming?
    General Campbell. Yes, sir.
    Mr. Murtha. That is inside the envelope and outside the 
envelope?
    General Campbell. Yes, sir.
    Mr. Murtha. All right. Now, then, getting back to the 
intercepts or the interjection into the administrative side, 
that would be much easier, and you are working on trying to 
reduce that vulnerability. And part of the demonstration as you 
move to 2010 you hope you will be able to resolve those 
problems?
    General Campbell. Yes, sir, that is correct,
    The problem on the administrative system is that you link 
back into the sustaining base. As we employ our posts, camps, 
and stations in a power projection role, we need to have the 
communications pipes that go from a deployed force back to 
their home base.
    Mr. Murtha. I don't need to hear the details. I just want 
to make sure that as you are working your way towards what you 
consider this 21st century Army, that you recognize the 
vulnerability and you are working to overcome it, and that is 
what it sounds like you are saying.
    General Campbell. Absolutely.
    Dr. Oscar. We definitely recognize it and are testing it. 
Tactical is very hard, as we mentioned. It is closed, and we 
are testing that constantly in the exercises.
    The administrative one, as you said, is easier; but we have 
a wide array of programs to toughen it up and to detect 
intrusions.
    Mr. Murtha. Well, this demonstration project, this will be 
a major part of it, to see if you can overcome the 
vulnerability of the system itself, both the tactical system 
and the administrative system.
    Dr. Oscar. There was a division level exercise in November 
that was a major part of the test.
    Mr. Murtha. Thank you, Mr. Chairman.
    Mr. Young. Mr. Lewis.
    General Kern. One comment on that, Mr. Chairman.
    Mr. Young. Certainly.
    General Kern. If I look back at my career as a young 
lieutenant in Vietnam, we manually encrypted everything over 
radio nets which were not encrypted electronically. We did this 
by looking up codes and changing it every day. Very, very 
laborious and slow. Today, all that at the tactical level is 
done through our automated encryption system. So we are far 
better off than certainly I was 30 years ago.
    Mr. Murtha. But also the enemy is better off.
    General Kern. The enemy also is better off, without 
question. But what has been the Achilles' heel is that our 
admin systems have always been open, and we are really focusing 
on that right now.
    Mr. Murtha. And add one thing to it. With less materiel 
forward and with more stockpile, this becomes a big problem 
because you have to order it so much in advance. This could be 
a major concern as you work your way through this thing.
    Mr. Young. Mr. Lewis, our expert on the digital Army, 
because he is the only one of us that has actually seen it in 
operation.

                         NATIONAL DEFENSE PANEL

    Mr. Lewis. And the National Training Center (NTC) is in my 
district, gentlemen, if you didn't know that.
    I had the opportunity, as I sat here initially listening to 
this, to review the biographies of the people who make up our 
panel, Mr. Chairman. Just one more time, it is always 
impressive for me, as a layman sitting on this Committee, to 
know that we have the mix of talent, training and expertise 
that you gentlemen bring to us; and we appreciate it very much.
    I wanted to say that the National Defense Panel (NDP), who 
reviewed a lot of these subject areas and some of our 
modernization challenges, has stated that it did not followthe 
logic of several service procurement programs. The NDP expressed 
concern over the Army's Comanche helicopter, the M-1, A-2 tank and the 
Crusader field artillery system. Do you plan on making any adjustments 
to your modernization strategy based on those recommendations?
    Dr. Oscar. We continually look at the best mix, but I feel 
this budget is very well balanced.
    The National Defense Panel didn't say these weapons were 
better. They said they are very good weapons, and they are 
needed. They recommended maybe buying them slower or stretching 
them out.
    We have a difficult problem, which is trying to get a 
balance between what we have today, like in our Crusader 
howitzer. We have the Paladin, and that is aging. We are 
replacing it with Crusaders, which is a real leap ahead in 
capability that will dramatically improve our strategic 
mobility and firepower.
    If we were to stop these weapons or dramatically slow them 
down, first of all, these weapons are the road to the future. 
Many of these weapons you are proving out the technology step 
by step that will lead to the next weapon, and you just can't 
take this gigantic leap often.
    Second, if you take all that money and start working on 
developing a new weapon, it is going to be another 10, 15 years 
out in the future; and, meanwhile, our equipment is aging. So 
you have to kind of balance protecting the aging of the 
equipment you have today and keep on improving it with 
available technology and working for the next one.
    So what we would like to do in our strategy, like in the M-
1 tank, you would not want to stop something if you do not have 
an alternative. We have 7,000 tanks; our upgrade program is for 
only 120 a year. At that rate, it will take us 58 years to turn 
over that fleet. It is critical to keep on buying the M-1 tank.
    Now that doesn't mean that we won't look at an alternative 
at some point in time. Maybe 10, 15, 20 years from now we ask 
ourselves do I keep buying the existing tank, do I buy a 
modified improved tank or a completely new leap-ahead tank? But 
you can't stop that or else our aging will be ridiculous. We 
would have a real significant gap in the near-term.
    Mr. Lewis. The NDP suggested, at least in two of those 
systems, the Comanche and the Crusader, that you slow down the 
process. Do you agree with that? And do you believe that you 
can field lighter systems than Comanche and Crusader, let's say 
by the early part of the next century?
    Dr. Oscar. No. The Crusader and Comanche will be fielded in 
the near part of the next century. They are both in Engineering 
and Manufacturing Development (EMD) and will take until the 
year 2006, in the case of Comanche, to get fielded. So to slow 
it down would be to push it out.

                        TECHNOLOGY BASE FUNDING

    Mr. Lewis. Is that a technology question or a funding 
question, the problem?
    Dr. Oscar. It is both a technology question--we don't have 
a better technology right now than Comanche. It is our best 
technology. But it is also a strategy question of if I push out 
Comanche or I slow it down, the Kiowa and Cobra are Vietnam-era 
helicopters, so they are already 30 years old.* So if I slow 
Comanche from 2006 to 2016, I am going to have these 
helicopters another 10 or 15 years longer, and I just can't do 
that.
---------------------------------------------------------------------------
    * Kiowa Warrior will bridge the gap between Kiowa/Cobra and 
Comanche.
---------------------------------------------------------------------------
    General Kern. If I could add, Congressman, the issue we 
have with the National Defense Panel (NDP) report is not one of 
logic but is of timing, about when we can do things; and we 
believe that we have our programs----
    Mr. Lewis. And that is as much a technology question as it 
is a funding problem.
    General Kern. That is correct. But it is both. It is both a 
funding problem for the Army and balancing our resources. If we 
had the technology today to build a 20-ton tank with the same 
lethality and survivability and mobility of an M-1, we would do 
it, but we don't have that today.
    We are working the tech base very hard, and we hope in the 
next few years to be able to match some of the concepts of the 
Army After Next, which the NDP suggests we accelerate with 
technologies that are at hand.
    Mr. Lewis. Which raises kind of the next logical question 
as far as development is concerned. Are their recommendations 
realistic? If you are suggesting not realistic, then the 
question is, can you develop and field a new light tank, as 
early as 2010?
    General Kern. I will try that first.
    Dr. Oscar. Go ahead.
    General Kern. The technology to build a 20-ton tank by 2010 
by any measure that we have been able to find is not there 
today. We have looked at composite materials, we have looked at 
different propulsion systems, we have looked at different kill 
methods, the lethality of the gun systems that we have today. 
So I do not have in hand today the technology to build a 20-ton 
tank that is even close to the capability of the current Abrams 
series.
    That follows the logic that Dr. Oscar described to you 
about our current acquisition strategy until we are in that 
position. I have asked our program executive officers to look 
at that question very hard to determine when is the right time 
for us to be able to bring on a new system.
    We are looking very hard at the tech base, and we are 
challenging Dr. Milton over the next year with an Army Science 
Board study, with the National Academy of Sciences, and with 
our own technology wargames to really examine what we have in 
thetech base in academia, in industry, and in the Defense 
Department to see what technologies are available that we can 
accelerate.
    So all of those pieces are under scrutiny. We would like to 
be able to do all the things that are described within the 
concepts of Army After Next, which are suggested that we could 
accelerate, but we do not have that in hand today.
    Mr. Lewis. Mr. Chairman, you mentioned that I had been 
exposed to the digitization program. I was going to mention 
that the Speaker, as you know, from time to time has been known 
to visit the NTC and other locations where he observes these 
developments with keen interest.
    I think it would be really fabulous, if we can, as we plan 
for the next 4 to 6 years, to have more of the committee go out 
to those fields, especially NTC. But if we could get Mr. Murtha 
out to California it would be a tremendous assist to us as we 
deal with this next generation. So the invitation is open any 
time you want to come.
    Thank you.

                               AMMUNITION

    Mr. Young. Okay. Mr. Visclosky.
    Mr. Visclosky. On ammunition, are you adequately funded to 
sustain your capabilities in your industrial base, do you 
think?
    Dr. Oscar. I believe we are. We have increased the budget. 
It is a billion dollars, roughly, for ammunition. We have tried 
our best to sequence our ammunition needs to look at which 
industries make which kinds and arrange them so we are not all 
of a sudden buying all of one and not the other. We are very 
concerned about the industrial base, and we have done several 
studies on it, and we take that into account in our strategy.
    So I believe that the budget we have today not only is 
proper for the Army to fill its ammunition needs with training, 
ammunition and war reserve, but it is also sequenced in such a 
way to protect the industrial base.
    Mr. Visclosky. My understanding is you use about $900 
million a year for training, for ammunition. That is the value 
of the ammunition you use in training. And you are asking for 
$827 million this year for training and war reserve.
    I am looking at those numbers and wondering. There is a 
shortfall or decline somewhere. Is that of any concern to you 
or not?
    Dr. Oscar. No, it isn't. Our war reserve is kind of like my 
refrigerator. You have to rotate the stocks. And in some ways--
I shouldn't say that. My refrigerator is a little bit of a 
mess.
    Mr. Visclosky. Mine is like that myself.
    Dr. Oscar. In some areas, we have too much ammo. Not too 
much, but we have more than we need, so we are purposely 
drawing down some of our war reserves in some areas for 
training ammunition to kind of rotate this.
    So, overall, the difference between the $800 and $900 
million predominantly is that. It is drawing down in certain 
selected areas where we have too much. In other areas we don't 
have enough, and we are building back up.
    Mr. Visclosky. On your modernization you have 14 
categories, and you are funding four of them this year. What 
about the other 10 categories and the modernization issue as 
far as ammunition?
    Dr. Oscar. We have spaced those out over the 1999 to 2003 
period. I think it is actually six that we are buying, and in 
the next couple of years we are buying three more. Throughout 
that period there is only two we are not buying. I don't recall 
the names of them. I could perhaps ask.
    Mr. Visclosky. If you could give us justification for not 
doing so, we would appreciate that.
    Dr. Oscar. Would you like Jan to answer?
    Colonel Edmunds. The Volcano and the XM-915 105 millimeter 
howitzer round are the two.
    Mr. Visclosky. Is there a particular reason for that? Do 
you know?
    Dr. Oscar. Prioritization within the ammo accounts, of 
which we felt were most important right now.
    Mr. Visclosky. I take it from your answer, then, you would 
want to use the modernization for those two munitions but you 
don't have the money to do that?
    Dr. Oscar. Overall, in our budget, we are balancing 
everything. We think this combination is the most optimum.
    Mr. Visclosky. But you could use more money.
    Dr. Oscar. It is no different than the fire or police 
departments. Everyone wants more money. But within the 
reasonable resources, I think this program is the best balance.
    Mr. Visclosky. Could you, for the record, for those two 
munitions, indicate what you would need to include them in your 
rotation, as far as modernization?
    I assume they are on the list because you need them, and it 
is a question that you don't have money for all 14, so 
something gives. What do you need for those last two?
    Dr. Oscar. We will do that. It is a priority issue. But we 
will certainly do that.
    [The information follows:]

    The two `modern' munitions not in the President's Budget 
Submission or the Five Year Defense Plan are the XM915 105MM 
Howitzer Dual-Purpose Improved Conventional Munitions Cartridge 
and the Volcano Mine system. The total shortfall value of the 
XM915 is $100,000,000 of which approximately $20,000,000 can be 
executed in the next year of procurement. The total shortfall 
value of the Volcano Mine system is $485,000,000 of which 
approximately $20,000,000 can be executed in the next year of 
procurement.

                       TOP MODERNIZATION PROGRAMS

    Mr. Visclosky. Certainly.
    As far as your modernization programs, and I guess to the 
extent if you could do this for the record that would be fine, 
but there are one or two you might want to highlight. Do you 
have in this case four programs specifically you would list as 
your top four modernization programs? And, if so, are they 
fully funded for fiscal year 1999 in your budget?
    Dr. Oscar. They are. Without question, our top program is 
digitization; and in 1999 we have plussed it up $261 million, 
which is enough money along with the other years to field a 
division by 2000 and a corps by 2004. We are a little short in 
1998, and we are working that issue. But that is our top 
program.
    Our other two, next two top programs, are the Crusader 
howitzer and the Comanche helicopter; and we believe we have 
them going at the optimum rate, trying to balance the technical 
risk of how fast you can develop a weapon and available 
resources.
    Mr. Visclosky. Your budget also indicates you have 
increased your modernization budget by $800 million from last 
year. My understanding is some of that increase is a result of 
reclassification.
    Could you provide us a list of the programs previously 
funded in Operations and Maintenance, or service budgets, which 
were transferred during the fiscal year 1999 budget process to 
Army research and procurement programs so we could have a 
better sense as to how much real new money is included in that 
$800 million?
    Dr. Oscar. Yes, we will. Some of them are like chemical 
DEMIL that the Department is requesting Congress' permission to 
switch over, but we will do that.
    Mr. Visclosky. $800 million sounds better than nothing, but 
if it is not truly $800 million, it would be nice to know what 
the true figure is.
    Dr. Oscar. Yes.

                         BLACK HAWK HELICOPTER

    Mr. Visclosky. On the Black Hawk, my understanding is that 
you, over the next couple of years, have in your budgets 1999 
and the year 2000 requests for 82 additional helicopters. I 
think the total requirement you have talked about is actually 
90.
    Dr. Oscar. To my knowledge. Several years ago, we 
determined the optimum number of Black Hawks. We have redone 
that with the integration and reorganization of the Active and 
Reserve. And to my knowledge, our requirement is 90. Now, we 
have plused up the budget to take care of 50, and still in this 
fiscal year budget, there is 40 that we don't have funding.
    Mr. Visclosky. So you are only 40 short of the 90?
    Dr. Oscar. Yes.
    Mr. Visclosky. And 22 of those would be in this year's 
budget?
    Dr. Oscar. Correct.
    Mr. Visclosky. Then I assume it is 10----
    Dr. Oscar. And plus-up 10 a year after that.
    Mr. Visclosky. I don't understand your answer.
    General Kern. You are correct in what you described. There 
are 22 in this year's budget, and in the outyear budgets which 
we are now looking at, what we have submitted with the FYDP is 
10 a year, and we will continue--from the Army only.
    Now, the Black Hawk line, remember, has other aircraft that 
come into it from the other Services as well, and that is how 
we get to our sustaining rate within the Black Hawk production. 
We have reviewed that aviation modernization plan this year and 
resubmitted it to Congress this past fall, and that is what we 
outlined. We are just talking the Black Hawks in this case.
    Mr. Visclosky. I might want to follow up with you later on 
that if I could.
    Thank you, Mr. Chairman.
    General Kern. Yes.

                             TRUCK PROGRAMS

    Mr. Young. Mr. Hobson.
    Mr. Hobson. Thank you, Mr. Chairman.
    Gentlemen, as you might expect I want to talk about trucks, 
High Mobility Multipurpose Wheeled Vehicles (HMMWVs), tanks, 
the Black Hawk I want to revisit, and a collision warning 
system.
    As you know, this Committee has been very supportive of 
trucks, and a couple of years ago this committee added more 
money for trucks than we added for the B-2. What does the 
budget contain for Family of Medium Tactical Vehicles (FMTVs) 
this year?
    Dr. Oscar. We have plused up, and it is about $236 million 
last year; 1998 it was about $204 million, and 1999 is about 
$336 million, and I can get you the exact numbers.
    [The information follows:]

----------------------------------------------------------------------------------------------------------------
                                                   Prior        Current (FY98)   Budget (FY99)    FYDP (FY00-03)
----------------------------------------------------------------------------------------------------------------
RDTE........................................             90.7  ...............  ...............              1.6
Procurement.................................          1,310.8            204.0            336.4          2,188.7
                                             -------------------------------------------------------------------
      Total.................................          1,401.5            204.0            336.4          2,190.3
Qty.........................................          9,699              121.3          2,038           12,659
----------------------------------------------------------------------------------------------------------------

    This funding stream demonstrates the Army's firm commitment to the 
FMTV program.

    Mr. Hobson. Well, let me ask you this question: Do you 
think that there is enough additional funds to prevent a 
production gap to the contractor? Have you talked to the 
contractor?
    Dr. Oscar. We are working with the contractor to close that 
gap. He just recently advised us that there may be a gap 
between the 1998 and 1999 multiyear contracts, and it has to do 
with lead items. And so we are looking at buying a few long 
lead items to prevent that gap? And I think we can.
    What happens is we award the contract and then he says it 
takes him so many months to get started. Well, he is obviously 
in production now. It is a matter of purchasing up the long-
lead time items. So I think we can close that gap by making a 
small amount of money in fiscal year 1998 available for those 
long-lead items.
    Mr. Hobson. Let me ask you about the----
    Dr. Oscar. Here is the--I am sorry. The exact amount was 
$600 million over the Future Years Defense Plan (FYDP).
    [Clerk's note.--Dr. Oscar testified the exact amount was 
$336 million.]
    Mr. Hobson. The plus-up?
    Dr. Oscar. A total of over $600 million
    Mr. Hobson. You know, we had a lot of painfully discussed 
competition strategy, which we finally worked out with 
everybody. Is that fully funded in both fiscal 1999 budget and 
future POMs?
    Dr. Oscar. Yes, it is. We have fully funded the money 
necessary to compete and bring on a second source.
    Mr. Hobson. Okay. I just want to get that on the record.
    One other thing I would like to ask. Is there any money 
tucked away in here, like we found last year, to do a new HMMWV 
thing?
    Dr. Oscar. It will take me a little while to describe this. 
We have changed our HMMWV strategy a little bit, and if you 
will permit me.
    Mr. Hobson. I would hope so.
    Dr. Oscar. I know last year the Army was talking about new 
HMMWVs and then competing HMWVs in the near term. The Marines 
were talking about initiating an Extended Service Program 
(ESP). In this fiscal year 1999 budget, it is kind of a switch-
around. The Marines have looked into it and determined that the 
ESP effort is inappropriate. Most of the Marine Corps HMMWVs 
have salt water corrosion, and they do a lot of fording in and 
around beaches and have a lot of rust on them. Due to the 
severity of the rust problem they have decided to go with new 
HMMWVs.
    We also are in the process of relooking at it, and in the 
long term it is better for us to buy new. And so we are putting 
the finishing analysis together, and we may come back to you 
shortly to request moving the ESP money to new HMMWVs. And so 
our strategy will probably be to buy new HMMWVs out through at 
least 2002. We will also look at a kind of a maintenance 
upgrade with some technical insertion to kind of help keep them 
modern.
    Now, at the end of that time period, we need to also look 
at whether we should upgrade the HMMWV to insert new technology 
or buy a commercial HMMWV. But we will come back to you.
    Mr. Hobson. But your strategy before, as I understood it, 
was you were going to try to take $9 million and start going 
down the road of building a totally different--new, whatever, 
vehicle and you put that on the old until longer down the road. 
Is that the short answer?
    Dr. Oscar. That is correct. We no longer have that. We 
intend to buy new HMMWVs through 2002.
    Mr. Hobson. I just want to get that on the record, sir, so 
we don't have any misunderstanding down the road.
    You know, it always concerns me that we tend to upgrade all 
of these things. I mean, we tend to do the ones who do these 
things, and you guys all seem to know it, and it becomes a 
game. But I am telling you, the game is not as easy as it used 
to be. First of all, there isn't the money. Second of all, we 
have got somebody down there who is going to draw a line 
through it for something else they may want, and it is going to 
be a different game.
    And I don't think you guys can depend upon the benevolence 
of this Committee. First of all, I think the Army gets short 
shrift in the--and I could use another word--the amount of 
money they get based upon the load they carry. And then when 
this kind of thing happens, it makes it even harder for us to 
help you guys out, which I think we want to do. We have to have 
an understanding between ourselves and not try to do each other 
in.
    We had a hard time, and Trish was very helpful on the 
staff, and everybody, in working out this competition strategy, 
because I think long term we are going to save money with that. 
I will bet you it is cheaper, and I bet you we can build them 
more expeditionary when we compete it. And the HMMWV is another 
example because there have been times when there has been no 
money for the HMMWV, and this Committee had to do it.
    Let's go on to tanks, if we can, unless you want to say 
something about HMMWVs.
    Dr. Oscar. It was just going to say the HMMWV fleet is 
arelatively younger fleet compared the 2.5-ton truck fleet. And as we 
look in the future, we realize we only have so much money. So we are 
saying, how can we best optimize this?
    So we were doing a lot of analysis. And I realize at the 
early stages we were kind of flip-flopping between whether is 
it better to ESP all of them or, whether to buy some new and 
ESP some. And we are about done with that analysis. Like I 
said, the conclusion in the near-term, it is better to buy new.
    Mr. Hobson. And one of the things--and it is true with the 
tank, and it is true with trucks, and it is true with HMMWVs--
this supplier base is very fragile.
    You know, personally, if I were out in the private sector, 
I am not sure I would want to work with you guys, to be frank 
with you, because you never know where you are.
    I mean, I can't get anybody who builds trucks, and I have 
said this before, for a living in a commercial sense who wants 
to build them for you guys. And it is not just the special 
requirements you have, but it is all the stuff you have got to 
go through. I mean, I have got Kenworth in my district. I have 
got Navistar in my district. They don't build any heavy trucks 
for you people anymore. GM, I don't think, does anymore, the 
big stuff. So they have all walked away.
    So what we get are--you know, for stuff that shouldn't be, 
in my opinion, we have to get specialty contractors in there 
that have to start all over again. And I am not crying over the 
BMY thing. Navistar just bought it, so I don't have to worry 
about that anymore. Our State has probably lost a lot of money 
for selling it to Navistar. Sorry about that.
    They are located in his district.

                      ABRAMS TANK UPGRADE PROGRAM

    But I would like to go ahead and talk about tanks a little 
bit. Again, these are not in my district. They are in the State 
that I live in, and I have been up there. But I would like to 
read through this scenario on tanks and go back through it so 
you know where I am coming from and what I am doing.
    Let me read through this. I have got three different 
scenarios here, and I will read through them, and then I will 
come back to them so you know overall what I am talking about.
    Recent press reports stated that the Army intends to 
terminate the M1A2 tank upgrade program as early as fiscal year 
2003. Why have you decided to cancel the Abrams upgrade 
program, if you have? How many M1A2 tanks will the Army have at 
that point? What percentage of the total tank force will be 
modernized with the M1A2? What effect does termination of 
production have on sustaining combat overmatch? That is one.
    Two, the plan seems to accept a long production gap between 
termination of the Abrams upgrade program and the beginning of 
some Future Combat System. The lack of continuous modernization 
of our tank fleet appears to be a high risk, given the 
uncertainty of the emerging armored threats worldwide.
    One, what is your plan to deal with these threats? What 
level of risk is appropriate for our soldiers? Two, what do you 
do if unforeseen events require accelerated modernization 
before Future Combat System is ready for production?
    And three, a recent Army white paper says that the 
centerpiece of the Army's modernization program is 
digitization. Digitization is primarily the timely sharing of 
information done more effectively than in the past by other 
forms of communication. True modernization, however, is 
characterized by maintaining combat overmatch.
    I am concerned that the Army is confusing the public when 
it says that the modernization of one-third of the active armor 
force is digitized M1A1 tanks which are certain eventually to 
be overmatched.
    Now, those are three big things I want to talk about.
    The thing that bothers me about digitization, and I know 
you have got to do all this, but I will tell you, if you are 
the kid out there who has got to push the button, you want that 
thing to fire and where it is going to fire. I am worried you 
get so much of this stuff and you get out there in weather and 
all kinds of other things, and you push the button, and, you 
know, it doesn't fire because you have got so much--it is so 
mechanized, so automated, that it just doesn't work when it is 
supposed to work.
    And, you know, when they pull that trigger, I want it to 
fire. If you are the kid standing there, you know, you don't 
want to have to worry about fixing all of this stuff.
    I can remember years ago, and I am sure it is a lot better 
today, pulling radar systems around in trucks, when we would 
get them on top of the hill and they never worked, and they 
overheated when you got up over the hill, and they weren't 
worth anything. I am sure today they work. But that is why I 
worry about the over emphasis on digitization. But I would like 
to go back through this and let you answer so you know where I 
am going. Do you want to talk about the----
    Dr. Oscar. I was just going to comment on your last 
comment, because my last assignment, I was the head of research 
and development at the Tank Automotive Command in Detroit. And 
I guess--I have a lot of pride in the M1 tank. I think it is 
the best in the world, and if you ask the Iraqi soldiers in 
their tanks that we were knocking off first round every time at 
three clicks, and their turrets were popping off, I think they 
would admit that we have the best tank in the world.
    Mr. Hobson. Well, I want to continue to build them.
    Dr. Oscar. Right.
    Mr. Hobson. And I am worried about that supplier base. So 
why don't we go back and terminate the M1A2 tank and upgrade as 
early as fiscal year 2003, and then the other questions with 
that.
    Dr. Oscar. Okay. If you don't mind, I would like General 
Kern to answer that.
    Mr. Hobson. Whoever wants to is fine.
    General Kern. We have a current program, which is funded in 
this budget, we will complete the 5-year multiyear, which the 
M1A2s, are currently funded for in the fiscal year 1999 budget.
    The question you asked, sir, we will buy 1,150 M1A2s with 
the current budget which we have submitted.
    Your question then, I believe, was is that adequate? And 
then should we continue on producing them?
    Those are the same questions which we are asking ourselves 
right now, as we look beyond this budget and as we build our 
future program.
    The question which I asked the program office to look at 
last year, which was widely reported as kill the tank, we in 
fact----
    Mr. Hobson. We all heard that.
    General Kern. In fact, the question which you just asked, 
that this tank, the Abrams, is going to be with us for some 
period of time, well into the 21st century. Icannot tell you 
exactly how long that is today.
    We also know that we have a concept which is described, and 
we discussed earlier with Mr. Lewis, on the Army After Next in 
getting to a 20-ton tank. And I also stated earlier, I don't 
have the technology in hand today to be able to build that.
    So the question then is how do we balance the risk of 
current technology that is incorporated in the M1A2? How do we 
build the digital force which we are describing? And the A2 is 
a digital tank. It has a 1553 data bus. It has a digital 
messaging system, and what we are building in this program is 
an analog system enhancement program which matches its 
capability to communicate with the rest of the force. So it is 
not an analog system.
    Mr. Hobson. I am familiar with it.
    General Kern. How do we match those pieces within the 
resources that we have, as we go forward in the 21st century?
    Today, we believe that the 1,150 is about the right number. 
Would I like to pure fleet the entire United States Army on 
M1A2s? Yes, sir, I would. And if we had enough resources to do 
all of that, I am sure that you would also.
    But that is not the prudent plan that we see today, that we 
are going to build a balanced fleet of the M1A1, with a digital 
capability, and the M1A2. But in addition, we have to be able 
to bring in the rest of our Bradleys and our artillery, our 
Apaches, and bring in the other systems. So that is the balance 
which we must strike when we look at the tank program for the 
future, because the question is whether we will have another 
multiyear or whether we will continue buying at a single-year 
rate. And the question of how many total tanks will be 
purchased in a rebuilt M1A2 configuration with the system 
enhancement?
    All of those are questions which we are asking ourselves to 
address as we go forward in this year's program, beyond what we 
have submitted in the current FYDP.
    I think the last question that you asked was, how smart is 
it to invest in these high technologies versus overmatch? How 
much risk do we want to take?
    Our assessment right now is that the capabilities 
incorporated by allowing everyone to know where they are, where 
their buddies are and where the enemy is, has a significant 
synergistic effect on the current weapons platforms to given 
them much greater capability.
    We also believe that the reliability of these systems will 
be very high, and, in fact, many of the digital electronics, 
which we already have, have higher reliability than some of the 
other analog and mechanical systems which are currently 
incorporated in our weapons platforms.
    So I don't think we are shortchanging the soldiers on 
giving them systems which are not going to be reliable. And we 
will test to ensure that, in fact, what we do deliver is 
reliable.
    But I also have to tell you that I was a tanker back when I 
was a young fellow, and we also have backup systems in every 
one of those tanks, whether it is an A2 digital or not. It is a 
blasting device where you turn the switch that sends the round 
downrange. We will not leave them off.
    We will also make sure that we have strictly pure optical 
sites, which allow us to continue in a backup mode.
    I believe you know that we train in a regime which requires 
our soldiers to fight only with a full-up capability of our 
systems, but also requires them to fight in a degraded mode so 
that they know how to use the entire capability which we build 
into our system.
    And we will do this for all of our systems. We are not 
going to put equipment out there for our soldiers which puts 
them at risk.
    Mr. Hobson. Let me tell you the thing that concerns me as 
we go through this. The indecision on the part of the Army 
affects the ability to sell this equipment overseas in some 
contracts that are out there.
    In keeping the supplier base up, are you sending any 
messages or can you send any message to people that are 
thinking--there are a lot of people I suspect, as I understand 
it, a couple of people anyway, who are looking to buy a 
substantial number of tanks that are worried about buying our 
tanks versus other people's tanks because of the scenario that 
your are going through.
    Are you able to give any comfort to them or to the 
manufacturers so that we can get those sales? I think they 
enhance your ability, if we can get those sales, to get prices 
that you need and to get the capability that you need. If we 
lose that supplier base--and I don't mean the company that 
builds the things. I am talking about the people down below.
    Dr. Oscar. Right.
    Mr. Hobson. Apparently there are some contracts pretty 
close out there that are affected by this indecision or the 
timing of your decisions. Do you know anything about that?
    Dr. Oscar. So we work very hard with these other countries 
to brag about and to tell them about the good things about our 
equipment.
    Our budget stream, as they see it, does fund this M1 tank, 
and they know with 7,000 tanks this is going to be in our 
inventory for many, many years, and we are going to support it. 
We have given them that message.
    General Kern. Sir, I could add two comments. Yes, I am 
aware of some of the pending foreign military cases that are 
being looked at. I do believe that, as Dr. Oscar described, we 
have a more stable production base, than almost any other 
country in the world despite the low numbers we have. 
Certainly, if I were looking to buy a Russian tank, which I 
could buy cheaply on the market today, they aren't building 
any. So they have tremendous capacity. If I were buying, I 
would be very much worried about their supplier base.
    Mr. Hobson. Right.
    General Kern. The French are relooking their entire defense 
industry today, with another big competitor out there, with the 
LeClerc. It is also one which, if I were buying from a foreign 
source and looking around, I would feel less than comfortable.
    The Germans also produce a very capable tank, and their 
economy has had some problems.
    So nobody is going to look elsewhere and not come back and 
look at the United States and say we have had a very good track 
record over the last 50 years of being a very stable supplier 
of weapons platforms; not just for the initial purchase, but 
for the sustained.
    Mr. Hobson. Well, I think that is true over the last few 
years, but people are worried about where we are going. Oneof 
the places is Israel. The other place is Turkey.
    General Kern. Uh-huh.

                         BLACK HAWK HELICOPTER

    Mr. Hobson. And those sales could be very important, I 
think, to you all long term, and I hope you will work with 
whoever--however you do it to see that we are competitive and 
that we get those sales.
    I want to talk a little bit about the Black Hawk. It is my 
understanding that if you--you have 22, I think, in the fiscal 
1999 budget, which is what we were talking about before. If you 
added 8 to that, don't you get a big savings long term by 
adding--instead of buying 22, if you bought 30? Don't you save, 
I don't know, $60 million or more or something? There are some 
numbers in here that if you just added some of that rather 
than----
    Dr. Oscar. That's true of most programs we have, 
unfortunately. With the strategy we have of trying to--you 
know, if I buy all Black Hawk, and then I can't buy Apaches, or 
if I buy all Apaches, I can't buy tanks, so we are trying to 
balance the money available and buy new and fix it all up. And 
in some cases, yes, we are not buying--we could get discounts 
if we bought higher rates, that is true.
    General Kern. The total rate at which we would like to buy 
the Black Hawk is 36 a year, but that includes all services. So 
the 22 is only the Army number. There is also a Navy buy of 
Black Hawks as well.
    [The information follows:]

    In order to gain these savings, DoD would have to commit to 
36 Black Hawks per year for 3 years (FY99-01). This would 
rebaseline the current multiyear contract and generate 
approximately $30 million in savings over three years. However, 
to save this $30 million the Army would have to find 
approximately $240 million over three years to procure the 
additional UH-60's.

    Mr. Hobson. What is the Navy buy? Does anybody know?
    General Kern. I could not verify that.
    Mr. Hobson. Six? So that gets them to 28?
    So if you bought--so is the total number then not--so you 
only have to buy, what, two more to get to the savings number 
where you get the big savings? I don't know. Could somebody 
look at that and then figure it out?
    Dr. Oscar. We will have to look at it.
    Mr. Hobson. That is something we need to know. If you buy 
two more and you save $60 million, you know, maybe it is 
something we ought to look at. That is all I am saying. I don't 
know whether that is what Mr. Visclosky was getting at in his 
questions, but that is where I was coming from to you.
    General Kern. Sir, we will provide that information for you 
for the record.
    [The information follows:]

    The Army could achieve significant savings by buying at 
least eight additional UH-60s per year in each of the three 
remaining years of the current multiyear contract (fiscal years 
1999, 2000 and 2001). The current multiyear contract is based 
on a procurement strategy of 18 H-60 helicopters per year for 
all Services (Army, Navy and Air Force). Furthermore, the 
contract contains an option for the Army to re-baseline to a 
more economic rate of 36 H-60 helicopters per year. The 
advantage of going to 36 H-60s per year versus 18 would be a 
savings to the Army of $33,200,000 spread out over three years 
($10,900,000 in fiscal year 1999, $10,700,000 in fiscal year 
2000, and $11,600,000 in fiscal year 2001). This assumes the 
Navy buys six H-60s in FY99, eighteen H-60s each in fiscal 
years 2000 and 2001, and the Army funds eight additional H-60's 
in fiscal years 1999, 2000, and 2001. In order to achieve the 
more economical rate of 36 per year (18 Army & 18 Navy) and 
save $33,200,000 the Army would have to invest an additional 
$240,000,000 into its Black Hawk helicopter program. This would 
commit the Services to 36 H-60 helicopters per year, not only 
in fiscal year 1999 but the remaining two years of the 
multiyear contract (fiscal years 2000 and 2001).

                              TRUCK SAFETY

    Mr. Hobson. And the last thing, this is kind of a parochial 
one, I guess, not for me, but for somebody else, Army tactical 
vehicle accidents cost the Army approximately $25 million a 
year in material damage and medical injuries. Further, and 
worse, over 460 soldiers have been injured and 49 killed per 
year in truck accidents. Commercial off-the-shelf systems exist 
to alert drivers to avoid impending collisions.
    Dr. Oscar, you recently sent me the results of testing and 
analysis of the collision warning system. I would like you to 
talk about that to the committee, and on what vehicles will it 
be installed, and where else could this be installed that it 
would be cost-effective, and at what cost?
    Dr. Oscar. The Army is very proud of what it has done in 
dual-use technology. We formed a National Automobile Center in 
Detroit to try to compare our requirements and technology with 
the automobile industry, and so we have many joint programs 
with the Big 3, and one of them is on collision avoidance. We 
helped the Big 3 develop collision avoidance along with Anti-
Lock Brake System (ABS) off road, and refiltering of oil and 
many other initiatives.
    We have tested the collision device on our trucks, and it 
does provide an added capability to reduce accident rates. We 
are going to embed it in some of our new trucks. We are looking 
at the cost of doing it versus the kinds of accidents various 
trucks get into; many of them are roll-over or many of them had 
head-on accidents.
    This collision warning avoidance is best suited for convoy 
missions. The radar on the side of the vehicle alerts you not 
to pull over into the next lane, so you don't hit somebody in 
your blind spot. It is typically not a death or a serious 
injury kind of an accident. But we are doing the analysis now 
to determine if it is worthwhile to retrofit and put that 
device on current vehicles rather than just embed it in the new 
ones.
    General Kern. I have also asked our program office to look 
at putting them on the fleet of trucks which are out at the 
National Training Center (NTC), where we run convoys under 
relatively hazardous conditions with dust and at night. We do 
have some statistics at the NTC which we could go back and look 
at to see whether that makes good sense.
    Mr. Hobson. Thank you, Mr. Chairman. You have been very 
patient with me. I appreciate it very much.
    Mr. Young. Mr. Hobson, thank you very much.
    I want to apologize for a rather poor attendance this 
afternoon. The House adjourned early, and many Members chose to 
go to their districts to do what they do in their districts. 
But we appreciate very much your being here and your very 
thorough responses to our questions.
    We have additional questions that we would like to submit 
in writing and ask that you would respond for the record, if 
you would please.
    And the Committee will stand adjourned until 2:00 on 
Tuesday next, when we will meet in this room, H-140, of the 
Capitol for a closed hearing with the Commander in Chief of the 
Special Operations Command. And if there is nothing further, 
the Committee will be adjourned.
    [Clerk's note.--Questions submitted by Mr. Young and the 
answers thereto follow:]

                        Modernization Shortfalls

    Question. The Army is requesting $13,000,000,000 for Army 
modernization programs. This is $800,000,000--about six percent higher 
than the fiscal year 1998 appropriated amount. These funds will procure 
aircraft, ammunition, tracked and tactical vehicles, missiles, and 
other combat support equipment. This funding will also be used for 
research and development programs.
    What are your top four modernization programs? Are they fully 
funded in the fiscal year 1999? Are they optimally funded in the 
accompanying fiscal years of the Future Years Defense Plan (FYDP)? If 
not, what are the shortfalls?
    Answer. The Army's goal of digitizing a Division by fiscal year 
2000 and Corps by 2004 is our top initiative. Our Digitization efforts 
include the ongoing modernization efforts of approximately 97 systems 
encompassing 538 budget lines. The total estimate of the digitization 
effort is $2,600,000,000 in fiscal year 1999. The Army did not take 
this $2,600,000,000 from programs to create a new effort. It was 
already part of the Army Total Obligation Authority that was allotted 
to these many existing programs. Of this total, approximately 
$261,000,000 was added to digitization by Office of the Secretary of 
Defense for fiscal year 1999. The $261,000,000 provides for improved 
interoperability, increased integration, improved security, network 
management, and more robust common architectures. It is key to the 
horizontal efforts that go across these systems. Crusader and Comanche 
are two major weapons systems programs that continue development of new 
platforms. Other top Army's dollar value modernization programs in the 
President's fiscal year 1999 budget are the Longbow Apache helicopter, 
the Abrams tank, and the Army Tactical Missile System--BAT brilliant 
anti-armor. During the FYDP (2000-2005) we will spend approximately 
$10,400,000,000 on those systems.
    Question. Do you believe that your fiscal year 1999 budget allows 
you to procure items at a rate that makes economic and operational 
sense? Which programs concern you the most?
    Answer. Based on the fiscal constraints, the fiscal year 1999 
President's Budget and FYDP are adequate operationally and 
economically. Additional funds would provide increased flexibility 
while a decrease would cause reprogramming detrimental to some 
programs. The programs that concern me most are those that are funded 
at a level where production is at or close to the minimum sustaining 
rate. Examples of such programs include Extended Range Multiple Launch 
Rocket System, Army Tactical Missile System production, and Avenger.
    Our production rates for trucks, the Palletized Loading System, 
Heavy Expanded Mobility Tactical Truck and Heavy Equipment Transporter 
System are also being produced at or above the minimum sustaining rate. 
Finally, the M829A2 Kinetic Energy Tank Rounds that we are procuring in 
fiscal year 1999 are being produced at their minimum sustaining rates.

    [Clerk's note.--According to the Army $38,000,000 is 
required for the M829A2 to be produced at the minimum 
production rate. The fiscal year 1999 President's Budget 
request is only $9,700,000, well below the amount required to 
fund the minimum sustaining rate.]

    Question. Your fiscal year 1999 budget request is $800,000,000 
higher than last year's appropriated amount. Do you sustain this level 
funding in the outyears? If not, what programs do not maintain the 
momentum of the fiscal year 1999 budget?
    Answer. Yes, an increase of approximately $1,000,000,000 is 
realized each year throughout the FYDP. The momentum will be continued 
through the outyears.
    Question. Last year, Congress provided $12,200,000,000 for Army 
modernization. The Army's fiscal year 1999 budget request for 
modernization program is $13,000,000,000--this is $800,000,000 higher 
than the fiscal year 1998 appropriated amount. These funds are used to 
develop and procure aircraft, ammunition, tracked and tactical 
vehicles, missiles, and other combat support equipment. Although your 
modernization program is higher this year than last year's appropriated 
amount, the majority of your funds are to modify and extend the life of 
systems that are currently in the Army inventory. Does this concern 
you?
    Answer. The Army has developed a budget that adequately funds our 
programs consistent with our modernization strategy and within the 
existing fiscal constraints. The Army's fiscal year 1999 budget is 
approximately $1,700,000,000 above last year's President Budget 
submission. Based on fiscal constraints, the fiscal year 1999 
President's Budget and FYDP are adequate operationally and 
economically. An increase of approximately $1,000,000,000 is realized 
each year throughout the FYDP. Despite these increases we remain about 
$3,000,000,000 to 5,000,000,000 short of the requirements necessary to 
maintain modernization and prepare for the Army After Next.
    Question. Your budget request for modernization is $800,000,000 
higher than last year's appropriated amount; however, some of the 
increases is a result of transfers. For example:
    a. modifications previously budgeted in operations and maintenance 
are now funded in procurement;
    b. the dual-use technology program which was previously funded in 
defense-wide was transferred to Army, research and development; and
    c. the chemical demilitarization program which was previously 
funded in defense-wide was transferred to Army, procurement.
    For the record, please provide a list of the programs previously 
funded in operations and maintenance (O&M) or service/defense-wide 
budgets which were transferred during the fiscal year 1999 budget 
process to Army research and procurement appropriations.
    Answer. To comply with Department of Defense (DoD) Funding Policy 
requiring certain modifications to be funded from investment 
appropriations, depot maintenance funds were realigned from O&M to 
procurement beginning in the fiscal years 1998/1999 Program Budget 
Decisions (PBD) cycle to support equipment modernization.
    $80,900,000 was moved from O&M to procurement accounts for systems 
such as Apache Longbow, Abrams upgrades, Carrier modifications, and 
improvements to the Bradley Fighting System Vehicle.
    The following programs were transferred into the Army Research, 
Development, Test and Evaluation (RDTE) appropriation in the fiscal 
year 1999 budget:
    a. SERDP (Strategic Environmental R&D Program). $55,600,000. 
Transfer from Office of the Secretary of Defense (OSD), under the 
Defense Reform Initiative. Objective is to improve DoD mission 
readiness by providing new knowledge, cost effective technologies, and 
demonstrations in the areas of environmental cleanup, compliance, 
conservation, and pollution prevention. Addresses high priority, 
mission-relevant defense environmental technology needs necessary to 
enhance military operations. Also enhances pollution prevention 
capabilities to reduce operational and life-cycle costs.
    b. HBCU (Historically Black Colleges/Universities). $4,700,000. 
Transfer from OSD, under the Defense Reform Initiative. Program is 
devolved from OSD equally to the Services. Increases the amount that 
Army has for contracts/grants to minority institutions. Increases 
amount of budget activity 6.1 (basic research) funding.
    c. DUAP (Dual Use Applications Program). $20,000,000. Transfer from 
OSD. Provides incentive for Army agencies to exploit new ways of doing 
business with the private sector in development of technologies having 
both military and commercial applications. Provides matching funds for 
projects proposed and funded by private sector.
                OTHER R&D INCREASES IN FISCAL YEAR 1999
    d. Net Assessment Directorate to National Defense University (NDU). 
$8,000,000. Transfer under the Defense Reform Initiative from OUSD (P) 
to the National Defense University, for which the Army has executive 
agency. The President, NDU, will only provide administrative oversight. 
The Director will still be tasked by OUSD (P) and serve clients in OSD.
    Outrider Unmanned Aerial Vehicle (UAV), $75,600,000. Program 
management for the Outrider UAV was transferred from the Defense-wide 
RDTE program to Army R&D beginning in fiscal year 1999. Funds Low Rate 
Initial Production in fiscal year 1999, and allows a more though 
evaluation of the utility of this UAV prior to beginning full rate 
production in fiscal year 2000.
    Chemical Demilitarization, $980,400,000. The Chemical 
Demilitarization program devolved from Department of Defense to Army 
effective fiscal year 1999. Fiscal year 1999 funds of $855,100,000 were 
moved from Chemical Agents and Munitions Destruction (CAMD), Defense 
appropriation to an Army CAMD account. Fiscal year 1999 funds in the 
amount of $125,300,000 were moved from Military Construction, Defense-
Wide appropriation to Military Construction Army appropriation.

                           Additional Funding

    Question. Last year, you were very candid about identifying your 
top unfunded requirements to the Committee and working with us to 
provide additional funding for many of them. I hope you will continue 
that cooperation with us. General Kern, please describe your top 
unfunded weapons system acquisition priorities and why the fiscal year 
1999 budget is not sufficient in these areas.
    Answer. To achieve prominence as a superior fighting force, the 
Army has relied on and will continue to depend upon technology 
insertion to maintain our combat overmatch advantage. As our force has 
become smaller, we must replace aging and obsolete systems and upgrade 
our capabilities to maintain this advantage. The fiscal year 1999 
budget is balanced and funds our programs at a level that permits the 
Army to develop and procure the equipment which enables our soldiers to 
remain the best in the world. There are however, opportunities where we 
can develop and buy additional required technologies and weapon systems 
beyond amounts affordable in our balanced, yet constrained budget. We 
have divided our top fiscal year 1999 unfunded priorities into five 
broad areas: Readiness and Soldier Quality of Life, (including fiscal 
year 1999 contingency operations in Bosnia, real property maintenance, 
and base operations); Equipping the Force, (systems such as Comanche, 
Crusader, and Soldier Life Support); Additional Reserve Component 
Modernization Enhancements, (procurement of additional Blackhawk 
helicopters and tactical vehicles and trailers); Soldier Support and 
Cost Reduction Initiatives, (procurement of Apache helicopter and 
Javelin training devices); and Sustainment of Industrial Base, 
(conventional ammunition demilitarization and test equipment and range 
improvements. Total dollar amount of these Unfinanced Requirements 
(UFRs) is $3,900,000,000. This amount includes $976,400,000 for 
modernization associated with these broad areas.
    Question. What are the potential savings if the Congress were to 
provide additional funding in fiscal year 1999 for these items, either 
by buying them earlier than planned or by lower production unit costs 
through procurement at higher quantities? Please put the costs and 
savings in the record.
    Answer. The Army has developed a prioritized list of uses for 
increased fiscal year 1999 funding, should it be made available, along 
with potential savings to be derived. These savings are not always 
monetary, but reap operational impacts/benefits as well, and would 
allow the Army to increase readiness, revitalize infrastructure, and 
accelerate modernization programs. A representative sample of these 
savings/benefits follow: $24,000,000 for Comanche will accelerate the 
flight test program and provide continuous flying of the first 
prototype and additional flight test support for both aircraft, 
reducing program risk. $11,500,000 for Crusader will finance a risk 
mitigation program for the Crusader transmission, ensure that the 
program will achieve First Unit Equipped in fiscal year 2005, and 
deliver a system that meets all mobility performance requirements. 
$88,000,000 for Family of Medium Tactical Vehicles will accelerate 
fielding to National Guard and Army Reserve Force Package (FP) 1 and 2 
units, permitting mobilization of all FP 1 and 2 units with a fully 
modernized medium truck fleet rather than a half equipped force with a 
mixed fleet. It will also bring production to a more economic rate of 
200 per month, and the average unit cost of fiscal year 1999 production 
will drop at least 5 percent. More trucks fielded sooner will also 
lower support costs. $22,000,000 for Command and Control systems will 
provide automated terrain analysis, digital database updates, 
commercial and national imagery inputs and products in support of 
terrain visualization. These Command and Control systems will serve as 
critical enablers of information operations in peacetime and 
information warfare during hostilities.
    Question. Which of these items are on any of the CINC's integrated 
priority lists?
    Answer. All of the CINCs requested enhancements to their Command, 
Control, Communications, Computers, and Intelligence (C4I) 
capabilities. Command and Control systems such as those mentioned above 
compliment the capabilities described on the CINC Integrated Priority 
Lists (IPL). These systems contribute to providing a secure, robust, 
integrated, deployed global and sustaining base information 
infrastructure to ensure critical decision-making information is 
available to the warfighter, and protected against enemy exploitation. 
CINC IPLs also addressed enhancements to logistics capabilities which 
specifically mentioned FMTV and aging truck fleets.

                      National Defense Panel (NDP)

    Question. The National Defense Panel (NDP) recommended that the 
Army become ``more expeditionary: fast, shock-exploiting forces, with 
greater urban operations capability.'' The NDP was critical of the 
Army's procurement programs which continued to modify heavy weapons 
systems because they will be difficult to transport into theatre.
    The NDP stated that it did not follow the logic of several of the 
services procurement programs. The NDP expressed concern over the 
Army's Comanche helicopter and the Crusader field artillery system. Do 
you plan on making any adjustments to your modernization strategy based 
on these recommendations? Please explain.
    Answer. Our Army Modernization Strategy continues to prioritize 
investments over time and reflects the linkage to the operational 
concepts described in Joint Vision 2010 and the patterns of operation 
outlined in Army Vision 2010. I agree with the National Defense Panel's 
finding that ``it is important to begin the transformation process 
now.'' That's what our Force XXI and Army After Next processes are all 
about. Through Force XXI, we are exploring the potential, and 
leveraging the power, of Information Age technologies. The result--Army 
XXI--will be a product-improved version of today's force, with its 
principal increases in capability coming from our exploitation of 
information systems. I believe this is a prudent course to take based 
on our understanding of the current and future geostrategic 
environment.
    Where Force XXI seeks to achieve ``mental agility'' throughout the 
force--the ability to understand all facets of the task at hand and to 
act decisively and in a timely manner--our Army After Next process is 
focused on providing the ``physical agility'' to fully exploit the 
accomplishments of Force XXI. Where Force XXI is a product-improved 
force, the Army envisioned in our Army After Next effort--the Army of 
2025 and beyond--will be a much different force, with vastly different 
capabilities, equipment, and tactics. Many of the technologies required 
to realize our vision of the Army of 2025 do not now exist. We have 
identified some of them in our Army After Next process, and we are 
funding them appropriately. As other required technologies are 
identified, we will pursue them, as our funding permits. These leap-
ahead technologies will not be developed overnight. Our patience and 
sustained commitment will be critical to their attainment.
    I do not believe that the effort we are putting into Force XXI is 
hindering our ability to realize the vision described by Army After 
Next. In fact, I believe that the course we've laid out in Force XXI is 
required to get to the Army of 2025. There are no short cuts. However, 
I agree with the National Defense Panel's recommendation that we should 
look hard at our Force XXI investments, and where possible, free funds 
for Army After Next developments. I do not think it is necessary for 
each unit in the Total Army to pass through the same transition 
elements on the way to the Army of 2025. We are committed to carefully 
determining requirements and reengineering our process to achieve the 
savings necessary to finance future needs.
    With regards to Comanche, Crusader, and the Abrams tank, I believe 
these are important to modernizing our force. Our current M1A2 tank 
program includes the upgrade of about 1100 older M-1 tanks to the M1A2 
version. Given that our total tank requirement is about 7600 tanks, 
fielding of the M1A2 tank will be limited to selected forces--
essentially as recommended by the NDP.
    The Comanche armed reconnaissance helicopter is essential to how we 
anticipate fighting in the future. Until is it fielded, we will accept 
risk in this portion of the force, and continue to employ aircraft in 
interim organizational designs to bridge the gap. No currently 
available aircraft is adequate to perform all the functions we envision 
for Comanche, including the OH-58D Kiowa Warrior and AH-64D Apache 
Longbow. We have already downsized our aviation force in anticipation 
of the fielding of the Comanche. While the Comanche will largely 
replace interim aircraft on a one-for-one basis, the superior 
capabilities provided by Comanche will enable us to address the 
significant risk we have accepted in the interim in our armed 
reconnaissance and light attack capabilities.
    The Crusader will provide indirect fire support to future maneuver 
forces. As with Comanche, we have already made organizational changes 
in anticipation of fielding the Crusader. In fiscal year 1996, we 
changed the Army's fire support force structure to leverage the 
capabilities inherent in the Multiple Launch Rocket System (MLRS) and 
Crusader. As a result, our requirement for self-propelled howitzers 
decreased from 2160 to 1378. Until Crusader and the additional MLRS 
units are fielded, we have accepted risk in our fire support 
capabilities.
    The successful fielding of each of these systems--M1A2 tank, 
Comanche, and Crusader--will enable us to bridge the gap between the 
Army of the Gulf War, the Army of 2010, and the Army envisioned in our 
Army After Next process. Each of these programs enables the Army to 
more fully exploit the potential of information age technologies and 
reduces the risks we've already accepted in anticipation of their 
fielding.
    Question. The Comanche helicopter and Crusader field artillery 
system are two of the Army's top modernization programs. However, the 
NDP believes that future requirements would best be met if the Army 
used these systems as an interim until newer, lighter systems could be 
fielded. The NDP recommended that the Army reduce the planned 
procurement quantity of these two systems. Do you agree with the NDP 
assessment? Why or why not? Do you believe that you can field lighter 
systems than the Comanche and Crusader by 2010? Please explain--is it a 
technology or funding issue?
    Answer. Our Army Modernization Strategy continues to prioritize 
investments over time and reflects the linkage to the operational 
concepts described in Joint Vision 2010 and the patterns of operation 
outlined in Army Vision 2010. I agree with the National Defense Panel's 
finding that ``it is important to begin the transformation process 
now.'' That's what our Force XXI and Army After Next processes are all 
about. Through Force XXI, we are exploring the potential, and 
leveraging the power, of Information Age technologies. The result--Army 
XXI--will be a product-improved version of today's force, with its 
principal increases in capability coming from our exploitation of 
information systems. I believe this is a prudent course to take based 
on our understanding of the current and future geostrategic 
environment.
    Where Force XXI seeks to achieve ``mental agility'' throughout the 
force--the ability to understand all facets of the task at hand and to 
act decisively and in a timely manner--our Army After Next process is 
focused on providing the ``physical agility'' to fully exploit the 
accomplishments of Force XXI. Where Force XXI is a product-improved 
force, the Army envisioned in our Army After Next effort--the Army of 
2025 and beyond--will be a much different force, with vastly different 
capabilities, equipment, and tactics. Many of the technologies required 
to realize our vision of the Army of 2025 do not now exist. We have 
identified some of them in our Army After Next process, and we are 
funding them appropriately. As other required technologies are 
identified, we will pursue them, as our funding permits. These leap-
ahead technologies will not be developed overnight. Our patience and 
sustained commitment will be critical to their attainment.
    I do not believe that the effort we are putting into Force XXI is 
hindering our ability to realize the vision described by Army After 
Next. In fact, I believe that the course we've laid out in Force XXI is 
required to get to the Army of 2025. There are no short cuts. However, 
I agree with the National Defense Panel'srecommendation that we should 
look hard at our Force XXI investments, and where possible, free funds 
for Army After Next developments. I do not think it is necessary for 
each unit in the Total Army to pass through the same transition 
elements on the way to the Army of 2025. We are committed to carefully 
determining requirements and reengineering our process to achieve the 
savings necessary to finance future needs.
    With regards to Comanche, Crusader, and the Abrams tank, I believe 
these are important to modernizing our force. Our current M1A2 tank 
program includes the upgrade of about 1100 older M-1 tanks to the M1A2 
version. Given that our total tank requirement is about 7600 tanks, 
fielding of the M1A2 tank will be limited to selected forces--
essentially as recommended by the NDP.
    The Comanche armed reconnaissance helicopter is essential to how we 
anticipate fighting in the future. Until it is fielded, we will accept 
risk in this portion of the force, and continue to employ aircraft in 
interim organizational designs to bridge the gap. No currently 
available aircraft is adequate to perform all the functions we envision 
for Comanche, including the OH-58D Kiowa Warrior and AH-64D Apache 
Longbow. We have already downsized our aviation force in anticipation 
of the fielding of the Comanche. While the Comanche will largely 
replace interim aircraft on a one-for-one basis, the superior 
capabilities provided by Comanche will enable us to address the 
significant risk we have accepted in the interim in our armed 
reconnaissance and light attack capabilities.
    The Crusader will provide indirect fire support to future maneuver 
forces. As with Comanche, we have already made organizational changes 
in anticipation of fielding the Crusader. In fiscal year 1996, we 
changed the Army's fire support force structure to leverage the 
capabilities inherent in the Multiple Launch Rocket System (MLRS) and 
Crusader. As a result, our requirement for self-propelled howitzers 
decreased from 2160 to 1378. Until Crusader and the additional MLRS 
units are fielded, we have accepted risk in our fire support 
capabilities.
    The successful fielding of each of these systems--M1A2 tank, 
Comanche, and Crusader--will enable us to bridge the gap between the 
Army of the Gulf War, the Army of 2010, and the Army envisioned in our 
Army After Next process. Each of these programs enables the Army to 
more fully exploit the potential of information age technologies and 
reduces the risks we've already accepted in anticipation of their 
fielding.
    Question. The NDP recommended that the Army develop a 30-35 ton 
tank to replace the Abrams. The current M1A2 weighs approximately 68 
tons. Is the NDP recommendation realistic? Can you develop and field a 
new light tank by 2010?
    Answer. The Army agrees with the NDP recommendation that a future 
force must be lighter and is now charting a prudent course that will 
transform the force. Today's Army took 25 years to develop and field; 
technology for the lighter force of the future is at least 20 years 
away. To get the most out of technology we plan to invest in the 
development of a new close combat system we call the Future Combat 
System (FCS). Our current strategy is focused on first unit equipped in 
2018.
    Question. Has the Army decided if it will continue to procure tanks 
after the current contract is completed at the end of fiscal year 2000?
    Answer. The Army has funded a program to upgrade 1069 M1 tanks into 
M1A2s, which, in addition to 81 M1A2s previously acquired, makes an 
1150 M1A2 fleet. In procurement, the Army is executing a five-year 
multiyear contract for 580 M1A2 upgrades. The contract, covering the 
fiscal years 1996-2000, was awarded to General Dynamics Land Systems 
Division (GDLS) in July, 1996. A follow-on multiyear contract is 
contemplated for fiscal year 2001, with Congressional approval required 
in 2000.
    Question. Is the Army evaluating alternatives to the M1A2? If so, 
when will you make a decision?
    Answer. Yes. The Army is studying a Future Combat System (FCS) as 
an alternative to Abrams in the Army After Next (AAN). The FCS responds 
to the requirement for a close combat system that is leap ahead in 
lethality, survivability, and sustainability for the Army After Next. A 
key element of FCS is the ability of this system to perform expanded 
battlefield roles in the close heavy battlespace while significantly 
reducing the logistical support required for deployment and sustainment 
of such a system. FCS concept development is focused on candidate 
armament technologies, which are the main design driver for FCS. Also 
under consideration in Science & Technology are alternative power 
sources and approaches to provide a platform capable of maximum output 
with minimum logistical demands. Advanced survivability measures will 
also be integrated into the FCS to ensure the crew is protected to 
fight in the close combat battlespace.
                         Digitization Overview
    Question. The Army is creating a ``digitized battlefield'' that it 
believes will give it the ability to maintain a modern, but smaller 
force capable of decisive victory. Digitization is the application of 
information technologies--sensors, communications, computers, 
displays--to meet the needs of battlefield commanders at all levels, 
providing a common picture in near-real time, shared data among 
battlefield systems and the synchronization of combat power.
    Please describe the Army's plan to digitize the battlefield.
    Answer. The Digitization strategy is an integral subset and 
underlying guiding principle of the Army's modernization effort. 
Digitization applies modern Information Technology concepts to the 
military environment resulting in an integrated, high-speed Command and 
Control structure reaching from the National Command Authority to the 
individual soldier.
    The Army is using a process called ``Force XXI'' to evolve from our 
current Army of Excellence (AOE) structure to the ``Army XXI'' 
structure. The Force XXI process consists of three axes: redesigning 
the tactical Army; redesigning the institutional Army; and integrating 
digital technologies. Force XXI includes battle lab experimentation, 
Advanced Warfighting Experiments (AWEs), and other innovative processes 
to inform our efforts to modernize for the 21st century. Among the many 
initiatives of Force XXI are the Division Design Analysis, which 
provided a solid analytical foundation for redesigning the division, 
and the Warfighter Rapid Acquisition Program (WRAP).
    Simply stated, Force XXI projects our quality people into the 21st 
Century and provides them the right organizations, the most realistic 
training, robust and predictable sustainment during both peace and war, 
and the best equipment and weapons systems our Nation can provide given 
the resources available. We will leverage technology in order to arm 
our soldiers with the finest, most lethal weapons systems in the world. 
The power of information will allow the ultimate weapon--the individual 
soldier--to successfully meet the challenges of the 21st century and 
achieve decisive victory. Digitization will allow the Army to 
effectively integrate command and control hardware and software with 
communications systems and weapons systems to provide information 
sharing both horizontally and vertically, in the Army as well as Joint 
and Combined forces. The strategy is to leverage the latest mature 
technology advances in information management from the commercial 
sector. The improved and increased level of integration and 
interoperability will provide for highly effective Joint and Coalition 
operations.
    Our Digitization efforts include the ongoing modernization efforts 
of approximately 97 systems encompassing 538 budget lines. The total 
estimate ofthe digitization effort is $2,600,000,000 in fiscal year 
1999. The Army did not take this $2,600,000,000 from programs to create 
a new effort. It was already part of the Army Total Obligation 
Authority that was allotted to these many existing programs. Of this 
total, approximately $261,000,000 was added to digitization by Office 
of the Secretary of Defense for fiscal year 1999. The $261,000,000 
provides for improved interoperability, increased integration, improved 
security, network management, and more robust common architectures. It 
is key to the horizontal efforts that go across these systems.
    Digitization applies information technologies to acquire, exchange, 
and employ digital information throughout the battlespace. Accordingly, 
the Army will digitize all command and control systems, as well as 
communications systems, including tactical radios, military satellite 
communications, and network management. Our digitization strategy will 
set the conditions for full-spectrum dominance by integrating command 
and control (C2) and situational awareness systems across multiple 
weapons platforms (Abrams tanks, Bradley Fighting Vehicles, and 
Comanche helicopters), as well as combat support and combat service 
support platforms.
    Programs receiving increases from the $261,000,000 in fiscal year 
1999 include the Longbow Apache, Kiowa Warrior, Bradley Fighting 
Vehicle, Abrams Tank, Army Tactical Command and Control System (ATCCS) 
family, Force XXI Battle Command Brigade and Below (FBCB2), Integrated 
Systems Control (ISYSCON) network management, Tactical Operations 
Centers, architecture development, and training support. Other 
adjustments identified include increased funding for Advanced 
Warfighting Experiments, Information Security, Satellite 
Communications, and the Warfighter Information Network.
    Question. Last year, you planned on fielding the first digitized 
division in 2001. This year you have accelerated the fielding to 2000. 
What is the urgency? Is it threat driven? What is the impact if you 
delay the fielding?
    Answer. The First Digitized Division has been scheduled for the end 
of fiscal year 2000 in support of Joint Vision 2010 and Army Vision 
2010. Joint Vision 2010 states: ``by 2010 we should be able to enhance 
the capabilities of our forces through technology. This will, in turn, 
expand our greatest advantage: the adaptability, initiative, teamwork, 
and commitment of our people at every level.''
    Fielding the first digitized division (FDD) was part of Chief of 
Staff of the Army Sullivan's ``mark on the wall'' as early as 1994. 
Fielding a digitized division is a very complex undertaking, especially 
when considering the task from the perspective of broader issues 
including doctrine, training, organizational structures, logistics and 
manpower. Since that clear vision of fiscal year 2000 was established, 
the Army has been marching to accomplish the mission.
    While this acceleration is not threat driven, in order to achieve 
the full spectrum dominance envisioned in Joint Vision 2010, we must 
leverage the mature leading edge of commercial technology. The earlier 
we field this new capability, the earlier we can adapt the new 
operational tactics, techniques, and procedures as a way of life in the 
entire Army. This minimizes the expense of having to train and support 
both an analog and a digitized Army for an extended period of time. We 
should also maintain the momentum of the digitization effort that began 
with the spiral development process where the user, developer, and 
industry come together to translate requirements into fielded 
capabilities in significantly reduced timeframes.
    The sooner we can field a standard integrated and interoperable 
hardware and software infrastructure the easier it will be to respond 
to new threats and technology advances. We have to start in fiscal year 
2000 in order to accomplish all facets of training, doctrine, and force 
structure development for the entire Army by fiscal year 2010. We 
realize that there is some risk that some of the programs may not be 
ready to field in 2000. However, most of the systems are mature and 
will provide a solid basis of improved capability for the Division even 
if a few systems get fielded later.
    Over the last year and a half we have managed to successfully 
synchronize the Army fielding process to meet the First Digitized 
Division objective by the end of fiscal year 2000. These first steps 
firmly ground us in the multiyear framework to achieve Joint Vision 
2010 on schedule as directed by the Joint Staff. In addition, this 
schedule lines up with Year 2000 (Y2K) compliance efforts in fiscal 
years 1998 and 1999, along with Allied force interoperability 
capabilities to be implemented in fiscal year 2000.
    Question. Last year, by your own admission, you defined the 
digitization program as generally high risk in terms of cost, schedule 
and technology. Now you are accelerating the program. What is the level 
of risk in your new program? Based on your own risk assessment of the 
digitization effort, do you believe that fielding the first digitized 
division by fiscal year 2000 is overly ambitious? Please explain.
    Answer. The schedule risk to field all systems by fiscal year 2000 
remains high. However, many key systems have a version already fielded. 
Even if a few systems have delayed fieldings, the fiscal year 2000 
improved capability will be significant. The Army has implemented a 
spiral software development process using operational units to evaluate 
successively more capable software drops, which occur on a yearly 
basis.
    Spiral Development is a process which uses short, incremental 
developments--each of which build on previous work to shorten the 
development cycle and speed products to the field. Getting users 
involved throughout the development process will ultimately reduce the 
risk associated with a formal Initial Operational Test and Evaluation 
(IOTE), but adds more installation, training, and testing time to the 
schedule.
    Cost risk is moderate because the Army received approximately 
$261,000,000 for fiscal year 1999 during the last Program Objective 
Memoranda (POM) cycle to fund the requirements to meet our fielding 
goals. However, because each of the product increments builds on 
previous increments, long range cost estimates tend to have a wide 
range. Technology risk is moderate since we now have conducted and 
analyzed the results of Task Force XXI, conducted in March 1997 and the 
Division XXI Advanced Warfighting Experiment (AWE) in November 1997. 
None of the deficiencies require technological fixes beyond that which 
is used commercially. It remains moderate simply because there are a 
large number of systems that must be integrated.
    Risks have been reduced in two of three areas and we have taken 
steps to make the goal less ambitious. For example, we only intend to 
equip the first digital division with the highest priority command, 
control and communications (C3) equipment by fiscal year 2000. Other 
weapons systems will be fielded on a schedule determined by individual 
program funding profiles. Many systems are already fielded to the first 
digital equipment and we only plan to field two of the three brigades 
(those located at Fort Hood) of the first digital division.
    Question. The Army has conducted Advanced Warfighting Experiments 
(AWEs) to evaluate what impact digitization has on the battlefield. 
During the AWEs, the Army's test community found that the ``digitized 
brigade performed much like the baseline non-digitized brigades at the 
NTC in areas of lethality, survivability, and operational tempo. Is 
this what you expected?
    Answer. We stated going into the Task Force XXI Advanced 
Warfighting Experiment (AWE) that our focus was on how digitization and 
the other new technologies we were looking at would improve our mental 
agility * * * and this it clearly did. There were striking examples in 
the TFXXI AWE, and again in the Division AWE, in which commanders and 
staffs perceived the battlespace with greater clarity and tempo than 
ever before--and then acted on that perception with great speed.
    The Experimental Force, the EXFOR, went up against the world-class 
Opposing Forces or OPFOR on their ``home-turf'' at the National 
Training Center. The AWE featured wins and losses on both sides. Given 
the immaturity of many of the digital systems that were part of the 
experiment and the detriment this lack of maturity had on the train-up 
for the AWE, we were pleasantly surprised that they were able to hold 
their own against a well-trained force like the OPFOR. The EXFOR 
successfully demonstrated the potential that digital battle command can 
offer towards decisive military operations. The AWE revealed the 
exciting vision of a future battle in which the tactical commander is 
capable of destroying the enemy force through the effective application 
of information to his combat power.
    Question. What criteria are you using to measure the success of the 
AWEs?
    Answer. The Advanced Warfighting Experiments (AWEs) are a process 
developed by the Army to provide insights that will shape the future 
force, Army XXI. The primary data collection effort for the Division 
Advanced Warfighting Experiment (DAWE) was conducted using over 100 
subject matter experts (SMEs) and 60 Battle Command Training Program 
(BCTP) observer/controllers (OC). This data was consolidated into a 
database, containing over 6,000 SME/OC observations, interviews, 
surveys, etc. Analysts from the U.S. Army Training and Doctrine Command 
Analysis Command (TRAC), Operational Test and Evaluation Command 
(OPTEC), and the Army Research Laboratory (ARL) evaluated the data. The 
results, quantitative and qualitative, are used to support our decision 
making process. An AWE that provides little or no insights to get at 
those decisions would not be considered successful. The TF XXI AWE 
exceeded the expectations of planners and participants alike. It 
revealed the dynamic potential in the digital land force and validated 
the Army's approach to experimentation. AWEs serve to put concepts of 
doctrine, training, leaders, organizations, material and soldiers to 
the most rigorous test possible, short of actual war. They also serve 
as a ``forcing function'' to synchronize all the pieces of a digitized 
force together at the same place and time. The Army overcame many 
technical obstacles in this process that would have taken years to 
solve in the normal requirements-development model.
    Question. Do you believe that you did not see a significant 
increase in performance because of technical issues? What were they and 
how have you resolved them?
    Answer. Certainly, the varying levels of maturity and functionality 
of the technologies that were experimented with during the Advanced 
Warfighting Experiments (AWEs) affected the performance of the force.
    To some extent, soldiers lacked time for sufficient training and 
familiarization with the many new digitized systems and associated 
procedures. The greatest challenge was insufficient interoperability of 
all the digital command and control systems, communications systems, 
sensors, and weapons platforms on the battlefield. The Army recognized 
the enormous amount of effort that is required and has taken action to 
increase funding in critical areas such as development of operational 
and systems architectures, system integration, and the Central 
Technical Support Facility. In addition, existing programs are 
migrating to the standards outlined in the Joint Technical Architecture 
and all new starts must build to these standards to support 
interoperability.
    We most definitely saw not only in increase in performance, but a 
dramatic increase--albeit one that was not apparent to some forms of 
data collection and analysis. Let me give you an example. At one point 
during the Task Force XXI AWE, one of the experimental company teams 
had to traverse the area known as ``the washboard''--a very difficult 
piece of terrain to cross. Most units avoid it, because even apart from 
enemy action, units tend to get lost, delayed, and disrupted when they 
operate there. But this company team traversed the washboard unscathed 
and emerged as a coherent fighting force on the other side, because the 
soldiers had situational awareness--allowing them to move and fight as 
a cohesive team even when they couldn't see each other. This incident 
may not have caught the attention of analysts focused only on attrition 
dynamics, but military history would attest to the fact that the 
ability to cross ``uncrossable'' terrain has won battles many times in 
history. This is just one exciting aspect of what digitization is doing 
for us.
    Question. Based on the outcome of the AWEs, what is the advantage 
of accelerating the digitized division?
    Answer. We have seen the potential of a Joint Task Force that has 
an integrated digital capability. Joint Vision 2010, the conceptual 
template for how America's Armed Forces, will channel the vitality and 
innovation of our soldiers to the entire Army.
    During the Task Force XXI rotation at the National Training Center 
(NTC), commanders failed to take full advantage of the capabilities 
offered by enhanced situational awareness, because of a lack of 
confidence in the new technology. Fielding these technologies sooner 
will provide commanders and their staffs more opportunities to learn 
how to effectively use the digitized capabilities during routine 
training activities. In other words, the sooner we can field standard 
hardware, the easier the transition will be to new versions of software 
across the Total Army.
    To make all these changes by fiscal year 2010, we have to start in 
fiscal year 2000 to accomplish all the issues of doctrine, training, 
leaders organizations, materiel and soldiers that must be implemented 
through brigade, division, corps and the entire Army.
    Over the last year and a half we have managed to successfully 
synchronize the Army fielding process to meet the First Digitized 
Division objective by the end of fiscal year 2010. These first steps 
firmly ground us in the multiyear framework to achieve Joint Vision 
2010 on schedule as directed by the Joint Staff and leverage the 
technological opportunities to achieve new levels of effectiveness in 
Joint warfighting. The earlier we field this capability, the earlier we 
can adapt the new tactics, techniques and procedures as a way of life 
in the Army.
    Question. The General Accounting Office (GAO), the Committee's 
Surveys and Investigations Staff (S&I), and the Army's Director of 
Operational Test and Evaluation (OPTEC) have all raised questions as to 
the technical maturity of the digitized systems. Last year, the GAO and 
S&I believed that the Army digitization systems had complex technical 
issues that would be difficult to resolve before fielding in 2001--now 
you have accelerated the schedule. Do you believe that you have 
resolved the technical issues? How?
    Answer. The technical and maturity issues documented by the test 
communities were expected. The Army's intent was to conduct an 
experiment--not a test--at the National Training Center last March. We 
knew going into the experiment that the functionality was not adequate 
for go-to-war systems, but it was adequate to answer the experimental 
hypotheses.
    One of the most significant problems with the systems used in the 
Task Force XXI Advanced Warfighting Experiment (AWE) was the inability 
to support battlefield dynamics, such as the ability of a network 
manager to rapidly reconfigure units task organized for a particular 
mission. Since we did not intend to field the TFXXI AWE system, we used 
a large contingent of contract support, rather than investing in 
software functionality that had a high risk of being discarded 
immediately after the exercise. Armed with the lessons learned from the 
nine months of TFXXI experimentation, we have made significant changes 
to the communications architecture, and have plans in place to 
substantially automate the few residual functions.
    Question. Are you willing to trade off schedule to ensure essential 
performance?
    Answer. We will not field a system that does not meet the users 
essential performance requirements. We have included a large number of 
technical and operational tests between now and the formal Initial 
Operational Test and Evaluation (IOTE) in the first quarter of fiscal 
year 2000 to monitor the program's progress. This is another benefit of 
the spiral software development process we're using.
    Question. What issues would cause you to delay the fielding of the 
first digitized division?
    Answer. There is a subset of critical command, control and 
communications systems that must meet user requirements before we can 
turn the equipment over to operational users. For example, the Tactical 
Internet (TI) is need to support the Force XXI Battle Command Brigade 
and Below (FBCB2). Without the TI, we cannot field FBCB2. However, we 
would still field the systems that digitize tactical operations centers 
(TOCs) down to battalion level.
    Question. When would you make the decision to delay fielding?
    Answer. As mentioned in the response above, we have included a 
number of tests over the next two years to monitor program progress. 
Potentially, we could decide after any of the test events whether or 
not the overall program schedule needs to be changed. Only those 
systems requiring further development would have fielding schedule 
adjustments. Other systems will be fielded on schedule.
    Question. To date, you have spent almost $500,000,000 on the 
digitization effort. However, there have been no formal operational 
tests on two of the most important components of the digitization 
program--the computer software (FBCB2) and the communications link 
(Tactical Internet). Together they provide a common picture across the 
battlefield--increasing situational awareness. The only evaluation of 
either system has been through your Advanced Warfighting Experiments 
(AWE). How would you assess the performance of FBCB2 and the Tactical 
Internet in the AWEs? Would the test community agree?
    Answer. Force XXI Battle Command Brigade and Below (FBCB2) and the 
Tactical Internet actually performed much better than was anticipated. 
The Task Force XXI Advanced Warfighting Experiment (AWE) was an 
experiment and not an operational test of a ``go-to-war'' capability. 
The AWE itself included the 6-month train-up prior to the 2-week 
rotation at the National Training Center. With each major live training 
event at Fort Hood, platoon, company, and battalion lanes, and finally 
the National Training Center (NTC) rotation, the performance and 
reliability of the system improved. Based on results from the NTC 
rotation, the Operational Test and Evaluation Command (OPTEC) reported 
that the situational awareness provided by FBCB2 and the tactical 
internet was the highlight of the AWE. Over 50 percent of all platforms 
were visible on the screens at any one time at company and battalion 
levels. Numerous interviews with the participants support the critical 
role this situational awareness played during the AWE. OPTEC also 
reported that the ability to send operational graphics and orders was 
not sufficient. Due to the instrumentation and data collection provided 
by the test community the material developer has been able to isolate 
the causes of these problems and is restructuring the network 
architecture to preclude this from occurring in the fielded version.
    Question. What criteria did you use to measure effectiveness of 
FBCB2 and the Tactical Internet? Would you use the same criteria in a 
formal test? How would it differ?
    Answer. The test community looked at many of the same measures of 
effectiveness that they will use as Force XXI Battle Command Brigade 
and Below (FBCB2) progress through its acquisition process. There is a 
Limited User Test (LUT) scheduled for later this year (August-September 
1998), a Force Development Test and Experiment (FDTE) and an Initial 
Operational Test and Evaluation (IOTE) in October 1999.
    These measures of effectiveness included speed of service, message 
completion rates, human factors impacts, platform visibility 
(situational awareness), kill ratios, etc. What will differ between the 
experiment and the formal testing will be that the measures of 
effectiveness will be compared to specified criteria provided by the 
user. In addition, the formal test will be more structured to ensure 
sufficient data is collected under controlled conditions to show 
whether FBCB2 meets these performance criteria.
    Question. OPTEC has stated that the FBCB2 and Tactical Internet you 
will field will be markedly different from what was used in the AWE.'' 
Why?
    Answer. The ``system'' that was taken out to the Advanced 
Warfighting Experiment (AWE) was developed to provide sufficient 
functionality to support investigation of the hypothesis. The Force XXI 
Battle Command Brigade and Below (FBCB2) and Tactical Internet systems 
that will be fielded will change based on what we learned during the 
Task Force XXI AWE. The hardware is markedly different, using a smaller 
footprint, increased processing capability and better screen 
visibility. The software is expanded to include the full complement of 
messages identified by the user as being critical to operations on a 
digital battlefield, user interfaces to develop and send messages have 
been reworked to be more user friendly. We are migrating to a Joint 
Variable Message Format to ease interoperability with other services. 
The tactical internet architecture is redesigned to eliminate the 
shortcomings identified during the experiment and ensure operationally 
suitable message completion rates. Also included will be increased 
network management capability to increased the flexibility of 
thenetwork to force design changes and command and control protect 
(C2P) tools to decrease the vulnerability of the tactical internet.
    Question. When will you test the ``new'' FBCB2 and Tactical 
Internet?
    Answer. The Army begins technical testing of Force XXI Battle 
Command Brigade and Below (FBCB2) and the Tactical Internet (TI), to 
include electronic and information warfare, in April 1998 at the 
Electronic Proving Grounds, Fort Huachuca, Arizona. This is followed in 
August by the Limited User Test (LUT) at Fort Hood with troops from the 
4th Infantry Division. The purpose of this LUT is to verify the fixes 
that resulted from Task Force XXI and validate the scalability of the 
architecture. A second technical test is scheduled approximately a year 
later.
    That test will be followed by a Force Development Test (JUL 99) and 
an Initial Operational Test and Evaluation (IOTE) in October 1999, 
together constituting the operational test program for FBCB2. The FBCB2 
and TI will be fully examined at each of these events.
    Question. Are both programs adequately funded to meet your 
accelerated schedule? If not, what is the shortfall? What is the impact 
on your schedule?
    Answer. Both programs are funded to meet fielding of the First 
Digitized Division and First Digitized Corps. Digitizing the remainder 
of the force is subject to availability of funding in the outyears. 
However, the Army is undergoing a significant transition in the way it 
does business. This revolutionary change, known as ``Spiral 
Development'', is a process that will lead us to Force XXI, Army After 
Next, and Joint Vision XXI. This process of experimenting with change 
leads us to changes in warfighting requirements. As these changes 
appear, additional resourcing may be required. We all needs to 
understand that threat and technology change is the norm and resourcing 
needs to be responsive.
    Question. What interoperability issues will the digitized force 
have with non-digitized Army units, the other services, and Coalition 
allies? How will you resolve the interoperability issues?
    Answer. The Army continues to pursue many ongoing efforts with the 
other services and allies to ensure interoperability and seamless 
communications throughout the battlespace. Additionally, the common, 
minimal set of information technology standards developed by the Army 
on behalf of digitalization is the basis of the Joint Technical 
Architecture (JTA) that is now mandated for use throughout the 
Department of Defense.
    Interoperability between digital and analog units was an issue 
during the Division Advanced Warfighting Experiment (AWE) at Fort Hood, 
Texas in November 1997. It was concluded that digital and analog units 
can interact and fight well together. The problem is how to transfer 
the information between a paper map and a computer.
    This is solved, in part, by sending liaison teams with digital 
equipment to the analog units. The transfer of information can then 
take place in one location, taking into account that the analog unit 
requires a significantly longer period to pass operational overlay 
information through its ranks. This solution creates a new requirements 
for additional liaison officers and equipment that are not yet clearly 
defined.
    Question. The other services?
    Answer. There are a number of initiatives underway between the Army 
and other Services leading toward systems interoperability. For 
example, the Marine Corps has purchased the Army's Combat Service 
Support Control System (CSSCS) and Advanced Field Artillery Tactical 
Data System (AFATDS). In addition, a number of Department of Defense-
sponsored Advanced Concept Technology Demonstrations (ACTDs) cut across 
Service boundaries. The Army Digitization Office (ADO) has recently 
begun an initiative to work Joint Service Interoperability issues, to 
produce a coherent Joint Interoperability strategy and coordinate, 
where possible, with Army digitization advances. These efforts include 
steps to identify a single point of contact within each of the other to 
provide a digitization focus for Joint interoperability.
    We successfully integrated the USMC Newton systems during the Task 
Force XXI Advanced Warfighting Experiment (AWE) in March 1997 and have 
been working with the U.S. Air Force on the Situational Awareness Data 
Link (SADL) development, fielding and joint doctrine.
    Question. Coalition allies?
    Answer. For digitization international interoperability issues, 
there are a number of NATO and multinational fora available for 
discussion and resolution. The principal NATO groups include the NATO 
Command, Control and Communications Board (NC3B), the Joint C3 
Requirements and Concepts Sub-Committee (JC3RCSC) and the NATO Army 
Armaments Group (NAAG). In the multinational environment, groups range 
from American, British, Canadian, Australian (ABCA) to bilateral staff 
talks and exchanges with multiple countries.
    The ADO is responsible for the Army's International Digitization 
Strategy (IDS), which identifies high level requirements for 
international interoperability. Practical steps toward interoperability 
are extensively worked at the weapon system level (such as the British 
and Dutch purchase of Apache). At the command level, the Command & 
Control System Interoperability Program (C2SIP) is a major step 
forward.
    C2SIP brings work from three previous international initiatives 
into a single U.S. program. C2SIP will both refine already developed 
capabilities and lead to fielding of these capabilities in the Army 
Battle Command Systems (ABCS) by 2003. C2SIP provides two levels of 
interoperability based on legacy requirements and future technology.
    By 2003, the US Army will have interoperability at either one or 
the other of these levels with the armies of Canada, Denmark, France, 
Germany, Holland, Italy, Spain and the United Kingdom.
    Two other initiatives, the Artillery Systems Cooperative Agreement 
(ASCA) and the Low Level Air Defense Picture Initiative (LLAPI), are 
aimed at achieving interoperability with multiple ally artillery and 
air defense systems. An international interoperability agreement has 
been reached in the LLAPI and is being negotiated in the Artillery 
Systems Cooperative Agreement (ASCA).
    Question. What equipment will be fielded in 2000?
    Answer. The 4th Infantry Division (4ID) (Mech) at Fort Hood, Texas 
is the First Digitized Division (FDD). It is organized as a armored 
division with two armored bridages at Fort Hood, TX and one infantry 
brigade at Fort Carson, Colorado. The brigades at Fort Hood will be 
digitized with U.S. Army Training and Doctrine Command (TRADOC) 
backbond systems by the end of fiscal year 2000 and the remaining 
systems in accordance with (IAW) the Department of the Army Master 
Priority List (DAMPL).
    One of the armored brigades and the division cavalry squadron will 
be ``embedded'' while the other armored brigade will be ``appliqued.'' 
The term embedded means that those units will receive the M1A2 System 
Enhancement Program (SEP) Main Battle Tank and the M2/M3A3 Bradley 
Fighting Vehicle with the Force XXI Battle Command Brigade and Below 
(FBCB2) software. This will provide a built-in, or ``embedded,'' 
digital capability that operates the communications software on the 
internal vehicle systems as well as the othersystems improvements 
inherent in the new vehicles. This precludes having to ``bolt on'' an 
additional computer to run the software as is done with applique. The 
``appliqued'' units will have the FBCB2 installed in their M141s and 
M2/M3A2s to provide a digital communications system, but will not have 
the other improvements associated with new vehicles.
    The 3rd Brigade, 4ID at Fort Carson will receive TRADOC backbone 
systems by the end of fiscal year 2004 and the remaining systems that 
are available in accordance with DAMPL. This will bring the division in 
line with the U.S. Army Deputy Chief of Staff for Operations (DCSOPS) 
directive of one embedded and two appliqued brigades.
    Question. Have you completed your First Digitized Division Design 
document? I not, how did you determine what equipment (in terms of type 
and quantity) needs to be fielded?
    Answer. The First Digitized Division (FDD) design document will be 
completed and released on or about April 27, 1998. Until then, 
equipment densities are derived from the Task Force XXI model. 
Quantities for Force XXI Battle Command Brigade and Below (FBCB2)--
applique sets--and radios were extrapolated using actual equipment 
counts from units assigned to Task Force XXI. For example, if a tank 
battalion in Task Force XXI was equipped with 100 applique sets, the 
total number of tank battalions within the FDD was multiplied by 100. 
This provided a planning figure for appliquesets within the FDD.
    Question. What is the total cost of digitizing the division in 
2000? For the record, please provide the cost and equipment you plan on 
fielding.
    Answer. In November 1997, the Army provided an estimate of 
$423,000,000 required to digitize the 4th Infantry Division 4ID(-); 
however that estimate included RDTE costs that are properly distributed 
across multiple divisions. The Army has further refined the definition 
of digitization, resulting in a broader subset of programs. Of the 
total cost for digitization, $373,700,000 is procurement of programs to 
be fielded specifically to the first digitized division (FDD). The 
$373,700,000 does not fund any RDTE. The attached tables provide a 
breakdown of equipment and costs per fiscal year for the FDD. Table 1 
includes Operations & Maintenance (O&M), OPA and RDTE costs that can 
only partly be attributed to fielding the first digitized division, 
while Table 2 contains costs of fielding equipment just to the FDD.
    The remainder of the resources includes the existing Army command 
and control programs (Maneuver Control System, Advanced Field Artillery 
Tactical Data System), communications programs (SINCGARS, EPLRS, 
Satellite Systems), sensor programs (GBCS, Sentinel, Tactical Unmanned 
Aerial Vehicle, Spitfire), and the digitization related pieces of 
weapon systems (Abrams and Bradley). The funding for these programs 
procures systems that are distributed in accordance with Army 
modernization priorities.

  TABLE 1: O&M, OPA AND RDTE COSTS, PARTLY ATTRIBUTABLE TO FIELDING FDD
                             [$ in millions]
------------------------------------------------------------------------
                                                          FY99     FY00
------------------------------------------------------------------------
RDTE Costs:
    Force XXI WRAP....................................     99.5     99.4
    FBCB2.............................................     52.5     47.0
    C31 Interop Network...............................      2.7      3.2
    C41 System Certification..........................      4.6      5.5
    Army System Engr..................................      6.5      7.8
    WPN System Technical Arch.........................      0.0      1.1
    Army Warfighting Exper............................      6.9      7.1
    AFATDS Functionality..............................     15.0      0.0
        Total RDTE Costs..............................    187.7    171.1
O&M Costs.............................................     54.4     51.7
OPA Costs.............................................     37.7     38.2
            TOTAL OPA, O&M, RDTE......................    279.8    261.0
------------------------------------------------------------------------


                   TABLE 2: EQUIPMENT COST FOR FDD \1\
------------------------------------------------------------------------
 
------------------------------------------------------------------------
System:
    A2C2S........................        12.6   ...........        12.6
    IDM/EBC......................        10.7          5.0         15.7
    FAADC2.......................  ...........  ...........         0.0
    Linebacker...................         6.2   ...........         6.2
    ASAS.........................  ...........         4.3          4.3
    GBCS/AQF.....................        31.6         54.0         85.6
    GRCS.........................  ...........  ...........  ...........
    WIN-T........................         6.6         11.1         17.7
    ISYSCON......................         0.8   ...........         0.8
    C2 Protect...................         7.4   ...........         7.4
    SPITFIRE.....................         0.4   ...........         0.4
    SCAMP........................         0.1   ...........         0.1
    SMART-T......................         0.6   ...........         0.6
    STAR-T.......................  ...........  ...........  ...........
    GBS..........................         3.1   ...........         3.1
    MCS..........................         56.   ...........         5.6
    M1A1/2.......................        21.1          2.2         23.3
    M2...........................        11.5   ...........        11.5
    AFATDS.......................         0.0   ...........         0.0
    FED..........................         3.5          3.5          7.0
    Paladin......................  ...........  ...........  ...........
    Laser Marker.................  ...........  ...........  ...........
    DTSS.........................        21.2   ...........        21.2
    SIDPERS-3....................         0.4   ...........         0.4
    CSSCS........................  ...........  ...........         0.0
    Applique.....................        35.0   ...........        35.0
                                  --------------------------------------
        Total....................       178.4         80.1        258.5
------------------------------------------------------------------------
\1\ Zero in the total column indicates that the equipment item was
  purchased in a previous fiscal year.

                Digitization Program--System Development

    Question.Two important components of the digitization program are 
the Force XXI Battle Command and Below (FBCB2) program and the Tactical 
Internet. FBCB2 is basically a computer which is either mounted on a 
vehicle or carried by a soldier. The FBCB2 software allows soldiers to 
automatically send and receive position reports and command and control 
messages. The Tactical Internet is a network of radios and routers that 
link the various FBCB2 computers.
    To date, have there been formal development or operational tests of 
either system? When will you conduct formal tests?
    Answer. No formal testing of either Force XXI Battle Command and 
Below (FBCB2) or the Tactical Internet (TI) has occurred to date. Field 
Test 1 will begin in April 1998, and initiate the formal developmental 
test program. Field Test 2 will be the second development test 
approximately a year later. A Limited User Test (LUT) is scheduled for 
August 1998, and will be followed by a Force Development Test (July 
1999) and an Initial Operational Test (October 1999), together 
constituting the operational test program for FBCB2. The TI will be 
tested and evaluated during the FBCB2 testing.
    Question. Both the FBCB2 and Tactical Internet have been part of 
the Army's Advance Warfighting Experiments (AWE). What is your 
assessment of their performance?
    Answer. Force XXI Battle Command and Below (FBCB2) and the Tactical 
Internet actually performed much better than was anticipated. The Task 
Force XXI Advanced Warfighting Experiment (AWE) was an experiment and 
not an operational test of a ``go-to-war'' capability. The AWE itself 
included the 6-month train-up prior to the 2-week rotation at the 
National Training Center (NTC). With each major live training event at 
Fort Hood: platoon, company, and battalion lanes, and finally the NTC 
rotation the performance and reliability of the system improved. Based 
on results from the NTC rotation, the Operational Text and Evaluation 
Command (OPTEC) reported that the situational awareness provided by 
FBCB2 and the tactical internet was the highlight of the AWE. Numerous 
interviews with the participants support the critical role this 
situational awareness played during the AWE. OPTEC also reported that 
the ability to send operational graphics and orders was not sufficient. 
Due to the instrumentation and data collection provided by the test 
community the material developer has been able to isolate the causes of 
these problems and is restructuring the network architecture to 
preclude this from occurring in the fielded version.
    Question. According to the Operational Test and Evaluation Command, 
the ``degree of digital connectivity achieved during the Task Force XXI 
AWE was low-not suitable for tactical operations.'' Do you agree? What 
changes have been made since that time?
    Answer. The system provided to 4th Infantry Division (4ID) for the 
task force was never intended to be fielded for ``tactical 
operations'', It was an experimental system intended to test the 
concept of digitization. Is the concept viable? Will digitization 
provide a significant advantage to the force? The system development 
was a massive engineering undertaking to provide a totally new 
capability, in a minimum amount of time.
    The first priority in regards to ``digital connectivity'' was to 
provide situational awareness (SA) to the force. This is defined for 
Task Force XXI as primarily friendly location information (blue force), 
but included enemy location (red force), as well as air tracks from 
Forward Area Air Defense Command and Control (FAADC2). As a secondary 
and add-on to the initial requirement, Command and Control (C2) 
information was considered. Due to the nature of the difference between 
C2 type information and SA type information, two distinct 
communications sub-architectures were developed, one for SA and one for 
C2. The SA architecture and implementation worked quite well at the 
Task Force XXI Advance Warfighting Experiment (AWE). The Operational 
Test and Evaluation Command (OPTEC) evaluation supports this statement. 
What did not work well was the C2 portion sub-architecture of the TI. 
In the design of C2 architecture, it was a priority to be as close to 
commercial standard internet design as possible, hence the commercial 
internet architecture was followed as closely as possible. Standard 
commercial routing protocols were used and a grid of radio circuits was 
established to route over, much the same way as the commercial 
internet. This architecture did not work well for a number of reasons. 
The commercial routing protocol did not work well in the tactical 
environment, and there were some software problems which created 
routing loops.
    Since the time of the Task Force XXI exercise the basic SA 
architecture has been retained, but improved upon to make it more 
flexible. All software problems have been corrected and upgrades to the 
INC have been accomplished to provide greater performance. The entire 
C2 architecture has been redesigned to be more like the SA architecture 
and take advantage of the inherent broadcast capability of the radios. 
We now have a broadcast capability, a multicase capability, and a 
point-to-point capability based on switched virtual circuits. These 
changes have drastically simplified the C2 architecture and will 
provide SA-like performance for C2 message traffic that requires both 
speed for service and a high message completion rate (``degree of 
digital conductivity''). A primary focus of the Force XXI Battle 
Command and Below (FBCB2) Limited User Test (LUT) will be to verify the 
basic improvement to the C2 architecture.
    Question. Have you completed and approved the Operational 
Requirements Document (ORD) for FBCB2? the System Threat Report? The 
Test and Evaluation Master Plan (TEMP)? When will they be completed?
    Answer. The Operational Requirements Document (ORD) and System 
Threat Assessment have both been completed and approved by U.S. Army 
Training and Doctrine Command (TRADOC). The Test and Evaluation Master 
Plan (TEMP) is in final draft, and expected to be approved after the 
Force XXI Battle Command and Below (FBCB2) Key Performance Parameters 
are validated, and the Critical Operational Issues and Criteria are 
finalized.
    Question. Given where you are in the development of the FBCB2 
program, are you confident you will be able to field the system in 
fiscal year 2000? Why?
    Answer. Program Manager (PM) Applique is no-track to field the 
system to the First Digitized Division, consisting of 1st Brigade, 2nd 
Brigade, 4th Brigade (Aviation), 1/10 Cavalry Squadron, and the 
associated Division slice by end of fiscal year 2000.
    The knowledge gained during the Task Force XXI effort has provided 
the Program Manager's office with a comprehensive understanding of the 
technology and logistics required to accomplish system fielding by 
fiscal year 2000. We believe we understand what did not work in Task 
Force XXI and why it did not work. We believe we have an executable 
plan to correct all deficiencies required to field a basic capability 
to meet threshold requirements. We have a considerable amount of 
infrastructure in place as a result of Task Force XXI. We feel we have 
met all challenges in principal and are executing physical 
implementations on schedule.
    Question. If FBCB2 or the Tactical Internet schedules slip, can you 
still field your first digitized division in Fiscal Year 2000? Please 
Explain.
    Answer. The Force XXI Battle Command Brigade and Below (FBCB2) 
schedule is defined by fielding the First Digitized Division (FDD) by 
the end of fiscal year 2000.
    If the FBCB2 schedule slips, we will not be able to field GBCB2 by 
the end of fiscal year 2000. The FBCB2 program has no schedule slack, 
and is inherently tied to the Tactical Internet.
    If either schedule slips it is doubtful that Program Manager for 
Applique will be able to complete its portion (FBCB2) of the FDD 
fielding by fiscal year 2000. Of course, any slip would have to be 
analyzed for its potential impact, since the nature of some type of 
slips, but not all, can be mitigated quite effectively. However, we 
will field the other systems, and will have operational digitized 
tactical operations center (TOCs) from battalion through division 
level. This will provide a significant level of digitization to the 
division.

                   Digitization--Information Security

    Question. The digitized force will be extremely vulnerable to 
information warfare. According to the Army, information security poses 
one of the greatest challenges for the digitized battlefield. The Army 
is currently assessing the vulnerability of the digitized battlefield 
systems to attack. How are you testing the vulnerability of individual 
``digitized'' systems to attack?
    Answer. We have several testing agencies, including the Operational 
Test and Evaluation Command (OPTEC), the Survivability/Lethality 
Directorate, the Digital Integration Laboratory, and the Technical 
Integration Center which use a two phased approach for testing the 
individual components of the Army's digitization systems.
    Phase One is done in a laboratory environment. Security system 
testers do a complete test of a specific system against known 
susceptibilities. We compare these susceptibilities to the known threat 
of adversaries that have the capability and the intent to exploit 
United States systems, categorizing these susceptibilities as 
vulnerabilities. The vulnerabilities are prioritized by ease of 
exploitation and possible damage if exploited. Countermeasures are then 
developed to offset the vulnerabilities and susceptibilities in a cost-
effective manner. We then look at the complete system to identify any 
new vulnerabilities or susceptibilities that may have been created by 
merging the various technologies together.
    Phase Two occurs when we place the system in the field and stress 
the system in an operational environment to identify any new 
vulnerabilities or susceptibilities. These new vulnerabilities or 
susceptibilities may be created by introducing human factors into the 
fast-paced operational requirements that our soldiers must meet. We 
take these results and again develop and implement countermeasures to 
reduce the risk of hostile exploitation.
    Question. How vulnerable are our digitized systems to jamming, 
computer network attacks, and command post detection?
    Answer. Any electronic system has a signature that may be 
identified and exploited to some degree. Our use of spread spectrum 
communications provides us a level of security by forcing an adversary 
to use wide band jamming that will allow us to easily identify, target 
and eliminate hostile jamming systems in a timely manner. We rely 
heavily on Command and Control Protect (C2P) tools that reduce an 
adversary's ability to reach our systems. Our goal is to ensure the 
reliability, integrity and confidentiality of our information. We 
accomplished this in the Division Advanced Warfighter Experiment (DAWE) 
by creating an electronic perimeter using an in depth strategy of 
firewalls, guards, and complimentary intrusion detection software.
    This electronic perimeter was sufficient to repel the efforts of 
Red Teams trying to penetrate our systems. Test results from Task Force 
XXI and the DAWE show that the electronic battlefield is a noisy place. 
Because of all the noise it was very difficult to pinpoint command 
posts. What we have done is further reduce the electronic signature of 
command posts by blending into the general background electronic noise, 
thereby improving battlefield survivability.
    Question. How will you reduce the vulnerabilities of the digitized 
systems from jamming? Computer network attacks, and command post 
detection?
    Answer. The Army is currently testing and developing technologies 
which we plan to integrate into each information and information-based 
system. We will provide these systems the ability to detect abnormal 
information operations. These technologies include, but are not limited 
to: Intrusion Detection, Penetration Alerts, and use by authorized 
members doing unauthorized activities. Protection from jamming is more 
difficult to address. Jammers interfere with the correct operation of 
an information system by overpowering the transmitted signal of U.S. 
emitters at intended receivers--thereby disrupting transmission to 
jammed sites. The most successful method we have to deter jamming by 
unauthorized elements is to identify it, and then destroy the jammer or 
neutralize it in some manner using anti-jam countermeasures.
    Reductions in the vulnerabilities will be accomplished in several 
other ways as well. We will continue to refine the ``defense in depth'' 
concept so that security will eventually extend to the desktop. 
Security training of operators is key to our overall program. Security 
training of network managers will also reduce the risk of compromise or 
system disruptions. We have already started teaching Information 
Systems Security courses within the Army. In May 1998, we will expand 
our systems and network management courses at Fort Gordon to include 
information systems security tools and techniques.
    Question. Does the budget provide funding to implement information 
security tools for the digitized systems? If not, what are the 
shortfalls?
    Answer. We initiated our developmental efforts towards the 
implementation of Command and Control Protect (C2P) tools by conducting 
market analysis of available government-off-the-shelf (GOTS), 
commercial-off-the-shelf (COTS) and non-development item (NDI) 
available protection and detection technologies. It was our strategy to 
lessen our research and development (R&D) efforts by focusing our 
efforts toward minor modifications, rather than a full R&D effort. 
Based on our early testing and evaluation (completed in January 1998) 
of over 20 of these types of tools for integration into the Tactical 
Internet, we feel that present acquisition funding seems adequate. 
However we also feel that we may have to increase our R&D efforts to 
ensure we can implement NDI and COTs tools in our digitized force. We 
are planning a major portion of our current budget towards the 
integration of C2 Protect tools into our C2 systems.

                            Aerostat Program

    Question. Last year, this Committee recommended that the Aerostat 
program be terminated, but it did not prevail in conference. Instead 
the conferees appropriated $35,000,000, a decrease of $51,000,000 from 
the budget request. This year the Army renamed the program, the Joint 
Land Attack Cruise Missile Defense Elevated Netted Sensor System 
(JLENS), and is requesting $103,000,000 to continue the program. Please 
the explain the JLENS concept.
    Answer. JLENS is a critical Joint program developing advanced 
elevated radars to provide sensor support for Land Attack Cruise 
Missile Defense (LACMD) using the Air Directed Surface to Air Missile 
(ADSAM) concept. These sensors provide a significant capability 
contributing to the creation of a Single Integrated Air Picture (SIAP), 
a key Commander In Chief (CINC) requirement. The JLENS system uses off-
the-shelf aerostats at an altitude of 15,000 feet for extended periods 
to elevate sensors and communication systems, including Cooperative 
Engagement Capability (CEC) and Joint Tactical Information Distribution 
System (JTIDS), required to pass information to the weapon systems. The 
JLENS system cost per flight hour is $100s versus $1000s per flight 
hour for fixed wing solutions. The JLENS system takes a major step in 
addressing the emerging cruise missile threat at low altitudes and in 
ground and sea clutter. The system is a key system contributor to the 
comprehensive Joint Theater Air & Missile Defense (JTAMD) cruise 
missile defense architecture laid out in the JTAMD master plan. JLENS 
is following a fast track acquisition approach beginning with a 
technology demonstration program. At the program's conclusion, it 
provides a leave behind operational system for CINC contingency 
operations. As such, it will be employed at corps level or echelons 
above corps (EAC), supporting active air defense, passive defense, 
attack operations and communications relay missions. The greatest 
contribution to commander-in-chief's warfighting capabilities is the 
sensor data required for over-the-horizon engagements by Patriot and 
over-land engagements by the Naval Standard Missile (SM-2) and bringing 
a complete SIAP to the warfighter.
    The JLENS concept uses off-the-shelf aerostat platforms to lift 
advanced prototype radar sensors to operational altitudes for extended 
periods at very low cost. The radar and software technology required to 
achieve the desired capability is strongly leveraged from other 
Department of Defense programs such as theTHAAD sensor (Ground Based 
Radar), multiple Battle Management Command, Control, Communications, 
Computers & Intelligence programs, and advanced radar development 
initiatives. The JLENS mission requirements are:
    a. Support development of a SIAP.
    b. Support Over-the-Horizon (OTH) ADSAM engagements with the Army's 
Patriot and Navy's SM-2 interceptors.
    c. Provide a platform capable of carrying alternate payloads such 
as other sensor and communication suites.
    d. Accomplish such secondary missions as detection and tract of 
theater ballistic missiles (TBMs) during boost and moving surface 
targets.
    The technical concept is two radars, one providing surveillance 
capability, and one providing precision tract capability, installed on 
two separate aerostat platforms. Mobile mooring stations are used to 
launch and retrieve the aerostats. A ground processing station controls 
the radar operations and the dissemination of target location and track 
data over JTIDS and CEC communication networks to tactical operations 
centers.
    Question. How will it be deployed and what will be its mission?
    Answer. The operational concept in support of the JTAMD cruise 
missile defense architecture, described in the JTAMD master plan, is 
one or more surveillance platforms are deployed to cover the theater 
area of operations and that one or more precision track radar platforms 
be deployed with each surveillance system. The surveillance radars are 
deployed to provide long-range detection and continuous tracking in 
support of the entire battlefield. The precision tracing radars are 
deployed to provide the best ability to defend assets in the presence 
of terrain in support of surface based air defense weapons. JLENS will 
be employed at corps level and at EAC supporting active defense, 
passive defense and attack operations. In addition, JLENS can support 
secondary missions such as communications relay, range extension for 
Unmanned Aerial Vehicles, TBM detection, and general surveillance 
missions.
    JLENS is a low-density, low cost, and operationally cost effective 
system supported in the field by contract personnel. The greatest 
contribution to the warfighting capabilities is the provision of 
precision track information upon which over-the-horizon engagements by 
the Patriot Advanced Capability (PAC)-3 and the SM-2 can be 
accomplished.
    Question. Why do you need JLENS?
    Answer. The primary concern of the Land Attack Cruise Missile 
(LACM) threat is the enemy's ability to deliver weapons of mass 
destruction on the battlefield. The LACM threat includes a flight 
profile that consists of low altitude incursion using earth curvature 
and terrain features to prevent observation by surface based defensive 
weapon sensor systems. Surface based sensor volumetric coverage is 
limited to a line-of-sight geometrical relationship with the LACM or, 
indeed, of any target. Detection and track of a LACM using the low 
altitude tactic is prevented either until the target appears over the 
horizon or as it emerges from behind an intervening terrain feature. In 
either event, obtaining timely information about the threat is delayed 
or perhaps lost entirely.
    All existing Army Air Defense radars are ground-based and have 
limited coverage against low altitude targets due to the terrain 
masking and earth curvature. Deployment of adequate numbers of ground-
based radars and air defense systems required for complete or near-
complete coverage of the battle space would be cost and manpower 
prohibitive.
    The line-of-sight limitation is mitigated by cost effective long-
term elevation of advanced sensors to an altitude where observation 
beyond the radar horizon of the ground-based sensors becomes possible. 
The benefits of having a capability to observe targets beyond the 
sensor horizon are significant. Low altitude and surface coverage is 
extended far beyond that of surface sensors. Detection and track range 
is potentially increased by several orders of magnitude and weapon 
systems can engage at the maximum capability of the designed missile. 
Having a capability to detect and track threats in this formerly blind 
zone greatly improves defensive effectiveness by:
    a. Supporting acquisition of a SIAP providing detection, track, and 
identification information about airborne targets that would otherwise 
not have been observed. Since continuous target track, that may have 
been terrain masked to surface sensors can now become a reality, 
maintenance of tracks is more likely and the inadvertent proliferation 
of tracks and the resulting confusion caused by targets emerging from 
the mask, is minimized. This is accomplished through the use of the CEC 
and JTIDS systems.
    b. Providing precision tracking data to air defense weapon systems 
that can be used to initiate and conduct intercepts against the LACM 
threat at long range. This ADSAM capability increases against the LACM 
threat at long range. This ADSAM capability increases the cost 
effectiveness of air defense forces by permitting effective defense of 
assets from low altitude attack without requiring the addition of more 
surface based weapons systems to cover the over-the-horizon or terrain 
masked blind zones. Furthermore, the ADSAM engagements of LACM targets 
at long-range increases the battlespace and permits intercept of 
weapons of mass destruction at locations more favorable to the defense.
    In addition, an elevated platform designed to detect and track low-
altitude targets can provide additional benefits to the battlefield 
commanders by:
    a. Providing information about moving surface targets, such as 
armor columns, to establish a basis for engagement by attack operations 
weapons.
    b. Providing a basis for vectoring aircraft to intercept OTH 
hostile air forces.
    c. Assisting the surface commanders in the maintenance of 
continuous knowledge of the location of friendly force units (friendly 
protection).
    JLENS, using aerostate platforms, provides an economical means of 
elevating tactical sensors to achieve the foregoing benefits for thirty 
days at a time. Additionally, a capability to elevate communication and 
communication network systems, such as JTIDS and CEC, is inherent in 
the modular payload approach of the JLENS architecture. This provides a 
relay capability to extend the range and coverage of tactical 
communications. Recently, analyses have been initiated to investigate 
the possibility of providing a backup capability to the Global 
Positioning System by providing a line-of-sight limited, position 
determination system based on the elevated JLENS aerostat platform.
    Question. What other system (either currently fielded or in 
development) could be used to do the JLENS mission?
    Answer. Some fixed wing aircraft with radar have the capability to 
provide over-the-horizon surveillance when they are on-station. 
Airborne sensor systems that are currently deployed include Joint 
Surveillance Target Attack Radar System, Airborne Warning and Control 
System, and the E-2C Airborne Early Warning System. None of these 
aircraft can detect advanced cruise missiles, nor can they provide the 
precision track and target identification support capability required 
to accomplish ADSAM engagement of LACM targets in an intense surface 
clutter environment. No other system will allow the multiple OTH 
engagement of multiple service weapon systems (Patriot, Standard 
Missile, Advanced Medium Range Air-to-Air Missile (AMRAAM)).
    The major draw back of fixed-wing assets is cost. Anywhere from 
four to five fixed-wing aircraft are required to provide 24 hour, seven 
days a week, continuous coverage. Each aircraft has a crew size of 10 
to 24 personnel. In addition, airfield(s) are required to service and 
support the fixed-wing platforms. This cost for fixed wing assets 
translates into the $1000s to $10,000s per hour for missions such as 
Bosnia, Desert Shield, Korea, etc., compared to $100s per hour required 
for the JLENS system. To provide both surveillance and precision 
tracking capability to support the entire JLENS mission would require 
additional planes, personnel and increase cost significantly.
    The following table summarizes and highlights how JLENS and 
proposed fixed wing LACMD altneratives are complementary:

----------------------------------------------------------------------------------------------------------------
        Performance parameter                Fixed wing                  JLENS                Both combined
----------------------------------------------------------------------------------------------------------------
Deployability.......................  Best....................  Good...................  Best.
Extended Time on Station............  Good....................  Best...................  Best.
Combat Survivability................  Good....................  Good...................  Best.
Weatherability......................  Good....................  Good...................  Best.
Life Cycle Cost.....................  Good....................  Best...................  Best.
System Affordability................  Good....................  Best...................  Best.
----------------------------------------------------------------------------------------------------------------

    a. The best solution to LACMD is a joint JLENS/fixed-wing solution. 
Both systems provide the synergism required to defeat the LACM.
    b. JLENS augments and extends the capability of these aircraft 
based sensors. Deployment of JLENS permits 24-hour coverage of the 
airspace at operational costs and manpower estimated at 80-90 percent 
savings over aircraft based assets. Deployment in peacetime and under 
pre-hostility conditions is economically and tactically effective 
mitigating a need to effect early deployment of thehigher cost aircraft 
based assets. Upon the onset of hostilities JLENS uniquely supports 
ADSAM engagements and thereby improves the effectiveness of air defense 
operations.
    Question. To date, the Joint Requirements Oversight Council (JROC) 
has not validated the requirement for the JLENS program. When will the 
JROC validate the requirement?
    Answer. The Army has approved the JLENS Operational Requirements 
Document (ORD). Army, Navy, Air Force, Marine Corps and JTAMD 
representatives have developed a Joint ORD. The ORD was reviewed by 
each of the services and comments were provided to the JLENS user 
proponent, U.S. Army Air Defense Artillery School (USAADASCH) for a 
final ORD.
    The Space & Missile Defense Command (SMDC) received the revised 
USAADASCH approved JLENS Joint ORD on March 12, 1998. SMDC is currently 
preparing a forwarding letter to the U.S. Army Training and Doctrine 
command (TRADOC) requesting expeditious processing of the ORD. Once 
finalized at TRADOC, the ORD will go the Department of the Army for 
release to the Joint Staff. The Joint Staff will send it out for the 
two-star review, normally 15 days. Once the two-star review is 
complete, the JROC will then schedule the ORD for review and approval, 
probably around the middle of May 1998. The JLENS ORD final approval is 
expected by June 1, 1998.
    In November 1997, the Joint Theater Air & Missile Defense 
Organization (JTAMDO) briefed the JLENS program to the JROC. The JROC 
approved the participation of JLENS in the JTAMD demonstration in 
fiscal year 2002.
    Question. Have the vulnerability assessments been completed? Please 
summarize the finding.
    Answer. Initial vulnerability assessments have been completed. Over 
the past year, significant analyses have been conducted on the JLENS 
system. The initial results show that either JLENS active/passive 
counter measures and/or operational strategies will mitigate the JLENS 
system vulnerability. The Special Operations Forces (SOF) threat 
against the mooring system appears to represent the greatest potential 
hazard. This threat is no more intense or effective than SOF directed 
against other battlefield/airborne systems. Further testing is planned. 
Summary of findings is provided in the following table:

                                           JLENS THREAT SUMMARY TABLE
----------------------------------------------------------------------------------------------------------------
               Threats                         Target                     Risk                Survivability
----------------------------------------------------------------------------------------------------------------
Air Delivered Threats:
    Infrared (IR) Missile...........  Air Platform............  Moderate...............  High.
    Radio Frequency Missile \1\.....  Air Platform............  Low....................  High.
    Radio Frequency Missile \2\.....  Air Platform............  Moderate...............  High
    Smart Bomb/Missile (IR/TV/laser)  Air Platform............  Moderate...............  High.
    Gun.............................  Air Platform............  Moderate...............  High.
    Iron Bomb.......................  Ground Base.............  Moderate...............  High.
    Smart Bomb/Missile (IR/TV/laser)  Ground Base.............  Moderate...............  High.
    Gun.............................  Ground Base.............  Moderate...............  High.
    Anti-Radiation Missile..........  Radar Emitter...........  Moderate...............  High.
    Jammer..........................  Radar Emitter...........  Moderate...............  Moderate.
Surface Delivered Threats:
    Surface-Air Missile.............  Air Platform............  Moderate...............  High.
    Theater Ballistic Missile.......  Ground Base.............  Moderate...............  High.
SOF/Terrorist Threats:
    Man Portable Air Defense System.  Air Platform............  High...................  Moderate.
    Direct & Indirect Fire..........  Ground Base.............  High...................  Moderate.
Other Threats: Directed Energy        Radar Emitter...........  High...................  High.
 Weapon.
----------------------------------------------------------------------------------------------------------------
\1\ Doppler.
\2\ Non-Doppler.

    Question. Are future vulnerability assessments planned? When will 
they occur and what vulnerabilities will you evaluate?
    Answer. Additional vulnerability analysis is planned now that a 
prime contractor has been selected. An independent evaluation will be 
conducted to assess the full vulnerabilities of the JLENS selected 
design. The assessment will include, but not be limited to: infra-red 
(IR) missiles, radio frequency (RF) missiles (Doppler), RF missiles 
(non-Doppler), smart bombs/missiles (IR, laser), air gun systems, iron-
bombs, anti-radiation missiles, jammers, surface to air missiles, 
tactical ballistic missiles, man portable air defense systems, direct/
indirect artillery fire, and direct energy weapons. Finally, the JLENS 
program will continue to refine availability data due to weather.
    Question. The estimated development cost of the JLENS is 
$400,000,000--this includes one demonstration system. It is our 
understanding that the demonstration program has a shortfall of 
$87,600,000. Please explain.
    Answer. The shortfall of $87,600,000 for fiscal year 2002 was 
created by the $51,200,000 reduction ($86,200,000 to $35,000,000) in 
program funding levied in September 1998. The result of this reduction 
is the JLENS Project Office is unable to complete the originally 
envisioned program by the end of the fiscal year 2001. The major impact 
of the reduction was to reduce funding to the prime contractor by 65 
percent ($60,300,000 to $21,100,000) which lead to a corresponding 
delay in radar development. The delayed radar effort has created a 
ripple effect whereby fiscal year 1999-fiscal year 2001 funding is 
required to accomplish the effort originally planned for fiscal year 
1998. In addition, the reduction has delayed CEC procurement until 
fiscal year 1999. Further, early demonstrations of JLENS capabilities 
had to be substantially modified, delayed or even canceled. Finally, 
the reduction has delayed final JLENS system integration and testing 
until 2nd quarter, fiscal year 2002 forcing the Early User Test (EUT) 
and JTAMD Demonstration to be combined due to scheduling. The breakdown 
of the $87,600,000 is as follows: $64,200,000 for the prime contractor 
to complete integration and testing of the JLENS prototype; and 
$23,400,000 for government costs for JLENS in-house costs, other 
government agencies (Navy, Army) providing support, and costs to run 
the EUT and JTAMD demonstration.
    The fiscal year 1999 President's Budget has programmed fiscal year 
1998-2001 funding for the JLENS Program at $389,000,000. The currently 
programmed funding is budgeted in the amount of $276,000,000 for the 
prime contract effort to develop the JLENS surveillance and tracking 
radars, the aerostat platform, theprocessing station and communications 
payloads. An additional $66,600,000 is programmed for developing and 
integrating modifications to the weapon and communications systems with 
which the JLENS will be interfacing, such as the Navy's CEC and SM-2 
interceptor programs, the Army's PAC-3 interceptor program, and the 
acquisition of items of government furnished equipment required by the 
prime contractor to complete the JLENS system. The remaining 
$46,400,000 is budgeted for JLENS in-house costs (salaries, travel and 
facilities), contract support, the maintenance of the JLENS testbed at 
the White Sand Missile Range, and various small contractual efforts 
performing needed analyses on topics such as interoperability, 
survivability, weatherability, etc.
    Question. It is our understanding that the Department of Defense 
does not know if they will procure additional JLENS after the 
demonstration is complete. When will the production decision be made?
    Answer. A decision to procure additional JLENS units has not yet 
been made. The JLENS Project Office has submitted a request for 
engineering and manufacturing development (EMD), low rate initial 
production (LRIP), and production funding in the current Program 
Objectives Memorandum cycle for the period fiscal year 2002-2010 to the 
Department of Army. Following the EUT and JTAMD Demonstration, four 
options are available to the government in fiscal year 2002 for the 
JLENS program. These are:
    a. Operations and Support--the JLENS protype would be placed in use 
for a twenty-four month period at a location to be determined.
    b. EMD--after a Milestone II decision, the program would build 1 
additional prototype and 1 operational system.
    c. Block I LRIP--produce a limited quantity based on the initial 
design.
    d. Produce Improvement Program, if the Block I LRIP option is not 
chosen, the program could enter a Product Improvement Phase followed by 
production.
    Question. Since neither the Army nor the Navy has committed to a 
procurement program, what is the benefit of conducting the $400,000,000 
JLENS demonstration program?
    Answer. The JLENS program will deliver state of the art 
surveillance and illuminating sensors to the nation following the fast 
track acquisition philosophy beginning with a technology demonstration 
program. The demonstration program will provide the initial 
architecture for air defense as envisioned in the JTAMDO Vision 2010 
document. Capability provided and demonstrated will be the initial 
development of a single integrated air picture meeting all four 
services' requirements including, an air-directed surface to air 
capability leveraging the Navy's SM-2 interceptor, the Army's PAC-3 
interceptor, and the Air Force's AMRAAM interceptor capabilities to 
bear on the problem of cruise missile defense. Upon completion, the 
results of the demonstration program will enhance existing battlefield 
weapon systems regardless whether a production and corresponding 
deployment decision is made. The JLENS program will provide a 
battlespace commander with a single integrated air picture, a CEC/JTIDS 
communications relay, an initial overland LACMD defense capability, 
sensor fusion advances, a light weight CEC antenna, an initial cruise 
missile defense capability, remote queuing for fire control systems, 
illumination for semi-active RF missiles, advances in the state-of-the 
art light weight sensor technology, and technology risk mitigation for 
future air defense systems.
    Question. The Office of the Secretary of Defense strategy is to 
conduct a demonstration of the JLENS and then make a procurement 
decision. For each alternative please provide the required development/
production-funding, schedule, and operations and support costs. Field 
the one JLENS test system?
    Answer. (The following four answers are preliminary pending results 
of the ongoing JLENs demonstration program. The JLENS system consists 
of two aerostats, surveillance radar, at least one tracking/
illuminating radar, processing stations, and communications payloads. 
Development/production funding, $476,600,000; Schedule, Fiscal year 
1998-2002; Operations and Support Cost, $8,000,000 per year/system.
    Question. Enter EMD?
    Answer. Development/production funding, $100,000,000 (One EMD 
system); \1\ Schedule, Fiscal year 2003; Operations and Support Cost, 
$8,000,000 per year/system.
---------------------------------------------------------------------------
    \1\ Requires $78,000,000 in fiscal year 2004 to complete the EMD 
system.
---------------------------------------------------------------------------
    Question. Begin LRIP?
    Answer. Development/production funding, $1000,000,000-$150,000,000 
(One LRIP system); \2\ Schedule, Fiscal year 2003; Operations and 
Support Cost, $8,000,000 per year/system.
---------------------------------------------------------------------------
    \2\ Requires $116,000,000 in fiscal year 2004 to complete the LRIP 
system.
---------------------------------------------------------------------------
    Question. Stop the program?
    Answer. Development/production funding, $10,600,000; Schedule, 3rd 
quarter, fiscal year 2002; Operations and Support Cost, $0.
    Question. Your fiscal year 1999 budget includes no funding for 
JLENS in 2002 and 2003. How much more would be required if the Office 
of the Secretary of Defense makes the decision to field the one JLENS 
test system?
    Answer. (The following four answers are preliminary pending results 
of the ongoing JLENS demonstration program.) $87,600,000 for fiscal 
year 2002 to complete the demonstration system.
    Question. Enter EMD?
    Answer. In fiscal year 2003 the JLENS requires $100,000,000 to 
start the EMD system.
    Question. Being LRIP?
    Answer. In fiscal year 2003 JLENS needs $100,000,000-$150,000,000 
to start the LRIP system.
    Question. Stop the program.
    Answer. The JLENS requires $10,600,000 to stop the program in 
fiscal year 2002.
    Question. Last year we were told that the Aerostat demonstration 
program would cost $600,000,000--now the cost has been reduced to 
$400,000,000. What was done to bring down the cost of the program?
    Answer. The Deputy Under Secretary of Defense (Acquisition and 
Technology) established JLENS program funding via Program Budget 
Decision 725 in the amount of $538,000,000. The $538,000,000 was 
established as a best estimate funding wedge prior to a more refined 
estimate, which was developed during the concept definition phase of 
the program. The $600,000,000 dollar estimate was based on several 
program options which are no longer required based on the results of 
the concept definition studies and the competitive proposals submitted 
by the three offerors during the Source Selection Evaluation conducted 
in fiscal year 1997. Originally, the program was oriented towards 
providing both a strategic and a tactical solution to the problem of 
land attack cruise missile defense. The JLENS demonstration program was 
directed to focus solely on the tactical solution for cruise missile 
defense, which significantly contributed to lowering the program's cost 
estimate. The JLENS program originally planned to carry two prime 
contractors for the first 19 months of the program through Concept 
Design Review. With the funding reduction in fiscal year 1998 of 
$51,200,000, this option was eliminated which also contributed to 
lowering the overall program costs. The program was also originally 
investigating the development of a 90-meter aerostat. Terrain analysis 
demonstrated little value was added with the additional altitude and 
radar performance obtained with a 90-meter aerostat when compared to 
the additional cost required to develop a new aerostat. The selection 
of an existing 71-meter aerostat significantly reduced program costs 
and risk.

                       Kinetic Energy Tank Round

    Question. Over the last several years the committee has expressed 
its concerns about the Army's 120 millimeter kinetic energy tank 
ammunition industrial base. In response the Acting Assistant Secretary 
of the Army for Research, Development and Acquisition, Dr. Oscar, sent 
a letter to the Congress stating that the Army would fund the M829A2 
kinetic energy tank round ``at a minimum sustaining level'' in fiscal 
year 1999. The letter also stated that the Army had added funding ``to 
accelerate the development'' of the follow-on munition, the M829E3. Dr. 
Oscar, do you agree with the contractor's claim that a minimum 
sustaining level of the M829A2 requires $42,000,000 annually? If not, 
what do you believe is the correct level of funding and why?
    Answer. The Army agrees with the system contractor's assessment 
that the minimum rate requires $38,000,000-$42,000,000.
    Question. Your fiscal year 1999 budget request includes only 
$9,700,000 for M829A2 production. Does your budget fund the M829A2 ``at 
a minimum sustaining level''?
    Answer. For fiscal year 1999, the Army has $31,700,000 of the 
$38,000,000-$42,000,000 required to procure the minimum production 
quantity of M829A2s.
    a. $9,700,000 from the fiscal year 1999 procurement request.
    b. $22,000,000 from Foreign Military Sales (FMS) proceeds.
The Army recognizes it has an obligation to provide another $10,000,000 
to complete the needed funding requirement to procure the M829A2.
    Question. It is our understanding that you have a proposal to 
increase funding for the M829A2 in fiscal year 1999. Could you please 
explain your proposal?
    Answer. For fiscal year 1999, the Army has $31,700,000 of the 
$38,000,000-$42,000,000 required to procure the minimum production 
quantity of M829A2s.
    a. $9,700,000 from the fiscal year 1999 procurement request.
    b. $22,000,000 from FMS proceeds.
The Army recognizes it has an obligation to provide another $10,000,000 
to complete the needed funding requirement to procure the M829A2.
    Question. It is our understanding that your proposal includes an 
``internal'' reprogramming of $10,000,000. When will you reprogram the 
funds? For the record, please provide the proposed sources.
    Answer. The Army expects to provide this funding in early fiscal 
year 1999. At the present time, a specific source(s) has not been 
identified.
    Question. Does your fiscal fund the M829A2 ``at a minimum 
sustaining level'' in fiscal year 1999?
    Answer. Yes.
    Question. Does your Future Years Defense Plan support M829A2 ``at a 
minimum sustaining level'' until the M829E3 enters production? If not, 
what is the shortfall? What is the impact?
    Answer. The M829A2 procurement is not yet fully funded. It is being 
addressed in the Army's budgetary process for fiscal year 2000. The 
funding level is $38,000,000-$42,000,000 per year. The fiscal year 1999 
President's Budget request for the M829A2/M829E3 production is as 
follows (all dollar amounts are in millions):

----------------------------------------------------------------------------------------------------------------
                                                      PB      SSN      FY99     FY00     FY01     FY02     FY03
----------------------------------------------------------------------------------------------------------------
M829A2/E3........................................     FY99   E78001      9.7      5.3     19.1     39.9     70.2
----------------------------------------------------------------------------------------------------------------

    Question. Based on your fiscal year 1999 budget, when will the 
M829E3 round enter into production? Is this an accelerated schedule?
    Answer. With the fiscal year 1999 President's Budget, the Army 
funded the acceleration of M829E3 Research, Development, Test and 
Evaluation so production could begin in fiscal year 2002, rather than 
fiscal year 2003, which was the case with the fiscal year 1998 budget. 
However, it is not yet fully funded for production in fiscal year 2002.
    Question. What will be the restart cost for the kinetic energy tank 
rounds if the production line closes?
    Answer. Restart costs are estimated at $70,000,000-$80,000,000.
    Question. If the kinetic energy round line goes cold, what is the 
impact on the depleted uranium (DU) industrial base? (There are only 
two DU suppliers in the United States).
    Answer. Aerojet Ordnance, Tennessee would probably go out of 
business. Starmet (formerly Nuclear Metals, Incorporated) will 
experience financial difficulties, but it is expected to remain in 
business. Overall, we expect loss of expertise, added risk of restart, 
and added cost to training rounds and other products.
    Question. Do either of the DU suppliers have non-defense customers? 
If so, do they have enough non-defense sales to keep them viable until 
the M829E3 enters production?
    Answer. Aerojet Ordnance, Tennessee does not have any commercial 
business. Starmet has limited commercial DU production work, including 
shielding for x-ray machines. Based upon the Army's best estimate, we 
believe Aerojet Ordnance, Tennessee, will go out of business unless 
they are awarded the production contract. Starmet will probably stay in 
business, however the future of their depleted uranium facilities is 
uncertain.
    Question. How will you ensure that DU is available for future 
requirements?
    Answer. The Army is currently reviewing all options in the 
budgetary process to insure that our DU requirements remain viable for 
the future.

                Reserve and National Guard Modernization

    Question. The budget includes $675,000,000 for the Army National 
Guard and $167,000,000 for the Army Reserve modernization--a 33 percent 
increase over last years budget request. Additionally, the army is 
cascading $34,300,000 in equipment to the National Guard and 
$137,300,000 to the reserve from its active units.
    Is the level of funding sustained in the Future Years Defense Plan 
(FYDP) accompanying your fiscal year 1999 budget? If not, what are the 
shortfalls?
    Answer. The level of funding for Reserve Component (RC) 
Modernization for the most part sustained throughout the FYDP. 
Increases are noticeable, particularly for the National Guard (NG), 
during the period 2000-2003 to support Total Army analysis (TAA) 03 and 
Army National Guard Division Redesign Study (ADRS) related conversions 
and activations. The Army Reserve (AR) is concerned with modernization 
shortfalls in Echelon Above Corps Signal Systems, Combat Service 
Support (CSS) equipment (shower sets, tactical power generation), 
Combat/Construction engineering equipment (Breacher System, Heavy 
Assault Bridge, Rock Crushers, Water Distributors) and Tactical 
Vehicles (line haul trucks and 25-ton/5-ton cargo trucks).
    Question. Are you satisfied with current equipment interoperability 
among the active Reserve Components?
    Answer. Overall the equipment interoperability between the active 
and reserve components is satisfactory within affordable constraints. 
The bulk of this improvement is the result of large amounts of cascaded 
equipment going from the active component to the reserves with little 
new equipment being procured during the early 90's. Despite equipment 
compatibility improving between the components, some challenges remain 
in the ares of communications, maneuver systems and combat service 
support equipment.
    Question. In what area do you have the biggest interoperability 
gaps?
    Answer. The area displaying the greatest interoperability gap 
between the active and reserve component is communications 
equipment.VRC series tactical radios have a limited ability to 
communicate with Single Channel Ground and Airborne Radio Systems 
(SINCGARS) radios. Component compatibility is improving as compatible 
radios continue to flow to higher priority reserve units.
    Question. Does your fiscal year 1999 budget and the accompanying 
FYDP maintain interoperability between the active and reserve 
components?
    Answer. Within affordability constraints, levels for the fiscal 
year 1999 budget and the FYDP do maintain a satisfactory level of 
interoperability between the active and reserve components. Looking to 
the future, the reserve components are concerned about equipment 
compatibility issues as a result of the Army's move to become more 
digitized. The reserve component is particularly concerned about 
falling behind in the area of Army Tactical Command and Control Systems 
and standard Army management information systems.

                      Aviation Modernization Plan

    Question. The Army has just completed its ``Total Army Aviation 
Modernization Plan'' for the active Army and National Guard. The 
modernization strategy is to provide modernized and updated aircraft to 
the first to fight units--initiatives within the plan will increase 
integration between the Active and Reserve Components. Please summarize 
your modernization plan. What are your priorities? What are the major 
deficiencies on your current fleet?
    Answer. The 1998 Total Army Aviation modernization priorities are: 
(1) Solve Aviation's most critical battlefield deficiency-tactical 
record and security (2) Maintain attack overmatch in attack helicopter 
into the 21st Century (3) Enhance Command, Control Community, and 
Intelligence (C3I) and joint/combined interoperability through 
battlefield digitization (4) Recapitalize aging utility, cargo and 
fixed wing fleets until replacement is possible (5) Develop technology 
underpinnings for Joint Vision 2010 and Army After Next requirements.
    Major deficiencies in the current fleet include: maintenance of the 
OH-58D Kiowa Warrior as the interim scout aircraft in both the active 
and reserve force until sufficient numbers of Comanches are procured to 
replace them; continued operation of legacy AH-1 Cobras until they can 
be replaced by either Apaches or Comanches; modernization of the UH-60 
Black Hawk fleet to meet Force XXI battlefield requirements and to 
extend the life of the UH-60 until it can be replaced by the Future 
Utility Rotocraft; modernization funding needed to either upgrade or 
replace significant numbers UH-1 Huey helicopters; an Improved Cargo 
Helicopter program to extend the life of the CH-47 Chinook until it is 
replaced by the Joint Transport Rotorcraft.
    Question. Your aircraft modernization plan ``recognizes that 
funding to resource all modernization goals are outside current Army 
funding levels.'' How much is required to fund the plan? How much is 
included in your fiscal year 1999 budget and the outyears? What is the 
operational impact if resources are not made available?
    Answer. The Army Aviation Modernization Plan addresses aviation 
modernization requirements out to fiscal year 2020. The total cost of 
modernization through that time frame have not been determined. The 
fiscal year 1999 President's Budget includes $1,320,000,000 for 
aviation modernization programs. Additionally, the Future Years Defense 
Program (fiscal years 2000-2003) includes $6,909,000,000 for aviation 
modernization. This funding supports major procurements that include: 
Comanche Operational Test and Evaluation (OT&E); 400 AH-64D's; 207 Fire 
Control Radars for the AH-64D; 90 UH-60L's; 11,497 Longbow Hellfire 
Missiles, 11 UC-35 jet aircraft. The Army has identified unfunded 
modernization requirements that exceed $2,500,000,000 in fiscal years 
1999-2003. These requirements include programs such as: Aviation 
digitization requirements. Apache systems upgrades; procurement of 40 
additional UH-60s needed to fill warfight requirements; procurement of 
48 of the 145 required LUHs; and to improve reliability and provide 
sustainment upgrades for the UH-1 fleet. If sufficient modernization 
funds are not available, the Army will continue to operate its current 
helicopter fleet without the increased operational capabilities 
provided through modernizations. The Army will also have to fund 
operational and support cost that will continue to grow as the fleet 
ages.
    Question. Your modernization strategy runs counter to be 
recommendation made by the National Defense Panel. The National Defense 
Panel recommended that the Army move toward advanced vertical lift 
systems versus service-life extensions of current rotary wing aircraft 
as proposed in your modernization plan. Why the difference?
    Answer. The Army has conducted extensive analysis of the current 
tilt rotor technology as a potential solution for future vertical lift 
requirements. However, the significant costs associated with this 
technology make it an unaffordable option for Army requirements. Given 
available resources and the absence of affordable technology, the Army 
has chosen service life extension programs as the most affordable and 
achievable means to meet some of its aircraft modernization 
requirements.
    Question. What is your rationale for submitting a ``Total Aircraft 
Modernization Strategy'' that cannot be supported in your budget? Why 
isn't your strategy based on budget projections?
    Answer. The Army has openly an accurately stated its aviation 
modernization requirements for both achieve and reserve components. 
These requirements are based on the capabilities the Army needs to 
accomplish missions outlined in the defense planning guidance. 
Requirements are determined by missions, not fiscal constraints. Fiscal 
constraints do limit the Army's ability to execute this modernization 
plan. The Army will continue to prioritize available resources to 
accomplish its aviation modernization requirements.
    Question. Have your developed alternatives to ensure that the 
aviation fleet remains reliable and safe it funding does not 
materialize to support your modernization strategy? Please explain.
    Answer. The Army will continue to insure its aviation fleet remains 
safe and reliable until aircraft can be either replaced or modernized. 
If adequate modernization funding is not available, the Army will have 
no choice but to continue to operate its present fleet. Operational and 
support costs will continue to grow as the fleet ages. The longer 
modernization is delayed, the longer the Army will be forced to operate 
without the advanced capabilities needed to accomplish assigned 
missions.
    Question. The National Defense Authorization Act for fiscal year 
1998 stated that no more 80 percent of the funds authorized for the 
modernization or upgrades or aircraft may be obligated until the Army 
provides a plan that addresses current and future modernization 
requirements and proposed funding. What impact did the restriction have 
on your programs? Has the restriction been lifted?
    Answer. The Army maintained tight control over obligation rates 
during this period to insure that it did not violate this restriction. 
A combination of the timely submission of the Aviation Modernization 
Plan and the availability of up to 80 percent of authorized funds 
enabled the Army to execute all essential programs when the restriction 
was in effect. The restriction was lifted on March 6, 1998.

                 Utility Helicopter Modernization Plan

    Question. The ``Total Army Aviation Modernization Plan'' requires 
that Army procure an additional 90 Black Hawks, accelerate the 
procurement of the Light Utility Helicopter, enhance or extend the life 
of the current UH-1 Huey helicopter, and extend the life of older Black 
Hawks. The Army's aircraft modernization strategy has always been to 
reduce the type of aircraft in the fleet. Based on your new plan, the 
Army will have a mixture of Black Hawk A, L and extended life models; 
current model and upgrades Hueys; and the new Light Utility Helicopter. 
Isn't this a logistics nightmares? Please explain.
    Answer. The Army's Aviation Modernization Plan calls for 
modernizing the UH-60 Black Hawk fleet to a single configuration, 
replacing the UH-1s in the Light Utility Helicopter (LUH) battalions 
with a ``commercial off the self'' replacement aircraft, and providing 
a Service Life Extension Program for the remaining UH-1s. As the Army 
transitions to a modernized UH-60, there will be a period of time where 
multiple configurations of the Black Hawk will be in the fleet. 
However, the end state objective for the UH-60 fleet is to have just 
one model of the Black Hawk. If funding were available, the Army would 
prefer to procure replacement aircraft for the entire UH-1 fleet. Under 
current funding projections, this goal is unaffordable. The Army 
intends to procure replacement aircraft for the LUH mission and provide 
the necessary life extension upgrades needed to ensure the remaining 
UH-1s continue to be safe and reliable.
    Question. The budget provides funding for only 50 of the 90 
additional Black Hawks. When do the Black Hawks need to be fielded? 
What is the impact if funds are not included in future budget submits?
    Answer. These Black Hawks are needed to modernize six National 
Guard companies that are currently equipped with UH-1s. These units 
will continue to support their States with UH-1s until modernized. 
However, they will not be able to perform their wartime mission of 
providing support to active duty light infantry divisions until they 
receive UH-60s. The Army would like to modernize these companies as 
quickly as possible; however, their modernization is not associated 
with a specific date.
    Question. The Army would like to identify a Light Utility 
Helicopter by 2001. The estimated cost of the Light Utility Helicopter 
program is between $507,000,000-$625,000,000. Does your outyear budget 
include funding for the new helicopter? What is your acquisition plan?
    Answer. Not at this time, however, it is competing in the Army's 
Program Objectives Memorandum 2000-2005. The Army is conducting a 
Utility Fleet Assessment study and is developing a Light Utility 
Helicopter Operational Requirements Document. These documents will 
provide the basis to determine the most achievable and affordable 
method to meet the future Light Utility Helicopter battlefield 
requirements. The results of this process will lead to development of 
an acquisition plan for the Light Utility Helicopter program.
    Question. The Army will conduct an assessment of the cost and 
alternatives for a Huey/UH-1 enhancement program. When will this study 
be complete? When do you need to begin your UH-1 enhancement program? 
How many UH-1's will remain in the fleet through 2010?
    Answer. The Utility Fleet Assessment study is expected to be 
completed by the end of calendar year 1998. In addition, the U.S. Army 
Training and Doctrine Command is developing a Light Utility Helicopter 
Operational Requirements Document (ORD). The ORD is expected to be 
completed by January 1999. Once the results of both efforts are 
available, a Huey/UH-1 enhancement program can be planned. The Army's 
UH-1 fleet may exceed 700 aircraft in fiscal year 2010, depending on 
its ability to procure replacement aircraft and the specific outcome of 
the ongoing trade studies.

                    Black Hawk Multiyear Procurement

    Question. The Army is requesting $242,400,000 to procure 22 Black 
Hawk helicopter. Last year, we were told that the Army had satisfied 
its warfighting requirement for Black Hawk helicopters. Recently, the 
Army released its ``Total Aviation Modernization Strategy'' which 
stated it has a requirement for 90 additional aircraft for its first-
to-fight units. What changed from last year?
    Answer. The primary change from last year was the release of Total 
Army Analysis-05 (TAA-05) which added an additional 90 Black Hawks to 
the warfighting requirement. The prior requirement was based on TAA-03.
    Question. Does the fiscal year 1999 budget adequately support the 
Army's requirement of Black Hawk helicopters in the outyears? If not, 
what is the shortfall?
    Answer. The fiscal year 1999 budget begins to address our out year 
requirements. The Army has funded 50 additional UH-60s toward its 90 
additional aircraft requirement. The remaining 40 UH-60s will compete 
in the Program Objectives Memorandum.
    Question. The National Guard has a requirement for a total of 260 
additional Black Hawk helicopters to replace aging Huey helicopters. Is 
the Army's acquisition plan for Black Hawk's acceptable to the National 
Guard?
    Answer. Yes.
    Question. Based on the Army's Black Hawk acquisition plan, how long 
will Huey's remain in the National Guard fleet?
    Answer. The Army will retain UH-1s beyond 2010 or until a 
replacement aircraft can be procured.
    Question. What is the estimated operational life of the Huey?
    Answer. The standard operational life of Army helicopters including 
the UH-1 is 30 years.
    Question. When will Huey's currently in the fleet reach their 
operational life?
    Answer. The UH-1 fleet will reach its 30 year operational life in 
2000, however, the Army's position is the UH-1 can be safely operated 
and sustained out to 2010.
    Question. Do you believe that the current Hueys will remain 
reliable and safe until they are retired? If not, what upgrades/
modifications need to be done and when?
    Answer. Yes. The Army is committed to keeping the UH-1 fleet safe 
and reliable until they are either retired or replaced. The Army is 
conducting a Utility Fleet Assessment study to provide the basis for 
determining the most cost effective means to meet its Utility 
Helicopter requirements.
    Question. How does the Army plan on satisfying the National Guard 
utility aircraft requirement or do you view this as a National Guard 
issue?
    Answer. The Total Aviation Modernization Plan, approved by the 
Secretary of the Army on February 6, 1998, addresses the modernization 
of the Army National Guard's Utility aircraft fleet and includes buying 
90 additional UH-60s, a proposed Light Utility Helicopter, and a 
Service Life Extension Program for the remaining UH-1s. Furthermore, 
the Army is conducting a Utility Fleet Assessment study, which will 
provide guidance on the most cost-effective methods to replace or 
modernize the UH-1 fleet and meet future requirements.
    Question. Although the Army is planning to procure ten Black Hawks 
in fiscal year 2000, the Army is not requesting advance procurement 
funds? Why?
    Answer. Based on the Army's current multiyear contract with 
Sikorsky, advance procurement is only required for the first 18 
aircraft. Since the Navy is on contract for 18 H-60s in fiscal year 
2000, the Army does not have an advance procurement requirement for the 
10 additional aircraft.

              Kiowa Warriors Helicopter Modernization Plan

    Question. Based on the ``Total Army Aviation Modernization Plan'' 
the current Comanche production schedule will require Kiowa Warriors to 
remain in the strategic reserve until fiscal year 2022. According to 
your plan, the strategic reserve requires a minimum of 190 Kiowa 
Warrior helicopters. Based on attrition, will you have sufficient 
quantities in the outyears?
    Answer. Once fielding of Kiowa Warriors to the 25th Infantry 
Division is complete in 2000, we will have about 312 aircraft in the 
active component. All of these will be cascaded to the reserve 
component as Comanche is fielded. Using an attrition rate of two 
aircraft per year, we will have sufficient Kiowa Warriors for the 
reserve component until they too are replaced by Comanche.
    Question. Kiowa Warrior helicopters will require future safety and 
sustainment upgrades to remain viable until 2022. When do the aircraft 
need to be upgraded and what is the estimated cost?
    Answer. The Kiowa Warrior's will require a major modification 
upgrade beginning about 2008. We estimate the cost to be $120,000,000 
per year to modify 48 aircraft per year for eight years. The total cost 
is estimated at $960,000,000.
    Question. Why can't you take the resources required to upgrade the 
Kiowa Warrior helicopter and use them to accelerate the Comanche 
program?
    Answer. The Initial Operational Capability of the Comanche is 
currently scheduled for December 2006. While this date might be 
marginally accelerated with Kiowa Warrior funds, Comanche fielding is 
programmed in both active and reserve components through 2020. Kiowa 
Warrior is the bridge to Comanche and will remain in service for 
another two decades; it is important to maintain its capability. 
Completing the Kiowa Warrior Systems Safety Enhancement Program is an 
immediate priority which should not be deferred, as it improves current 
safety margins and makes the aircraft relevant to the digitized Army of 
the next decade.
    Question. Based on your modernization strategy, Comanche will not 
be fielded to the heavy division/corps attack battalions until the 
``far-term.'' In the interim, Apache aircraft will serve as the scout 
platform for those units. When will the Comanche helicopter be fielded 
to the heavy units?
    Answer. The current plan fields Comanches to heavy attack 
battalions in fiscal years 2017 through 2024.
    Question. How many aircraft will be fielded?
    Answer. The Army's modernization plan fields Comanche to twenty-
nine active duty and reserve component battalions; each battalion will 
each receive nine Comanches, for a total of 261 aircraft.

                     Hellfire Missiles for Comanche

    Question. Based on the fiscal year 1999 budget, there will not be 
sufficient quantities of Hellfire missiles in the inventory to meet 
future Comanche requirements. What are your doing to ensure that you 
can meet Comanche missile requirements?
    Answer. In fiscal year 2003 the Army will begin research and 
development of a modernized Hellfire missile (LBHF+) that is dedicated 
to meet Comanche missile requirements and to replace an aging inventory 
of Hellfire missiles for Army Scout/Attack Aviation. Major product 
improvements will evolve the Longbow Hellfire missile into production 
of the LBHF+ which will increase the range, improve the lethality, and 
provide multi-seeker capability to defeat projected threats in the mid 
to far term. This will be a Joint Program (with United States Navy/
United States Marine Corps).

                        Kiowa Warrior Helicopter

    Question. The Kiowa Warrior is the Army's armed reconnaissance 
helicopter. Originally fielded during the Vietnam War as the OH-58, 
this helicopter will be replaced by the Comanche. The Army is 
requesting $40,400,000 for the Kiowa Warrior System/Safety Enhancement 
Program (SSEP). Please explain the SSEP retrofit program.
    Answer. The SSEP is designed to enhance the Kiowa Warrior's margin 
of safety by increasing engine performance, and improving 
crashworthiness and crew survivability. It adds the R3 engine with Full 
Authority Digital Electronic Control crashworthy seats, cockpit 
airbags, Improved Master Controller Processor Unit, Improved Data 
Modem, and the Single Channel Ground Airborne Radio System (commonly 
known as SINCGARS) Systems Improved Program radios. Installation begins 
in fiscal year 1998 and is expected to be complete not later than 
fiscal year 2005.
    Question. How long will the Kiowa Warrior fleet remain viable 
without the SSEP retrofits?
    Answer. Notwithstanding any safety issues, obsolescence in the 
Master Controller Processor Unit can be expected to reduce the number 
of flyable aircraft beginning in fiscal year 2002 at an estimated rate 
of one squadron/battalion per year. However, safety will always be the 
overriding issue, and SSEP modifications begin in fiscal year 1998 to 
correct those deficiencies.
    Question. Your current plan is to fund 201 SSEP retrofits. However, 
you have a requirement for 311 retrofits--29 percent of the fleet will 
not have the SSEP modifications. What is the impact if funding is not 
provided to retrofit the remaining aircraft? Will you have to ground 
aircraft? Does this concern you? How do you plan on fixing this 
problem?
    Answer. If full funding is not provided, the Army will face 
approximately 109 obsolescing aircraft with flight restrictions imposed 
to reduce the likelihood of mishap or injury. The Army will give due 
consideration to grounding those aircraft. The Army is concerned with 
this issue and is addressing a $130,000,000 shortfall in the fiscal 
year 2000-05 Program Objectives Memorandum to fix it.
    Question. Last year, the Army requested $15,000,000 for the SSEP 
retrofit program. What is the status of the fiscal year 1998 funding?
    Answer. Contracts are in negotiation for the $15,000,000 for SSEP.
    Question. When will the funds be obligated?
    Answer. A contract award, obligating the funds, is planned for the 
first week in March 1998.

                          Comanche Helicopter

    Question. The Comanche is the next generation armed reconnaissance 
helicopter. The Comanche will significantly expand the Army's ability 
to collect reconnaissance information in all battlefield environments 
because of its improved sensors and greater flexibility for 
development. The Comanche will replace the Kiowa Warrior. The Army is 
requesting $367,800,000 in fiscal year 1999 for continued development 
of Comanche, almost $90,000,000 more than the fiscal year 1998 
appropriated amount. According to the Comanche program office, the 
Comanche program schedule is ``mismatched''--it is ``not in synch'' 
with Force XXI schedules. Please explain what you mean by a 
``mismatched program.''
    Answer. The delivery of Comanche's six Early Operational Capability 
(EOC) aircraft occurs in fiscal year 2002, in time to capture the 
lessons learned from the First Digitized Division (FDD) in fiscal year 
2000 and to participate in the First Digitized Corps (FDC). Although 
the initial operational capability is in December 2006, technology 
improvements from FDD digitization initiatives will be incorporated in 
all Comanche aircraft.
    Question. Why is one of the Army's top modernization programs 
``mismatched?''
    Answer. The Comanche program schedule was established in March 
1995, two years before the Digitization schedule was developed. 
Initiatives to accelerate development of the Mission Equipment Package 
would allow the Comanche to better participate in digitization 
initiatives. The Army is looking for ways to fund the acceleration in 
the fiscal year 2000-2005 Program Objective Memorandum (POM).
    Question. What are the risks of a ``mismatched program?''
    Answer. The Comanche is the centerpiece of the digitized force, 
linking together all other elements of that force and distributing near 
real-time battlefield intelligence and targeting data. The risk is that 
some digitization experiments will take place without Comanche's full 
participation. Synergistic improvements that Comanche will bring out in 
other systems will not be identified, and Tactics, Techniques, and 
Procedures for the digitized force will be developed without the 
Comanche's full impact. We anticipate reducing that risk by seeking to 
incorporate more capability in our EOC aircraft and use these aircraft 
in our digitization initiatives.
    Question. Why are we buying six early operational aircraft at an 
estimated unit cost of $50,000,000 if they are not going to be in sync 
with the capabilities required for the digital battlefield?
    Answer. The EOC aircraft serve several purposes, one of which is to 
support the digitization plans for the FDD/FDC. Additional purposes are 
early user evaluation of Comanche capabilities and the development of 
new tactics, techniques, and procedures. Lessons learned on how to 
fight these EOC aircraft will ensure that production aircraft are 
fielded in accordance with the doctrine for fighting them.
    Question. What are you going to do to ensure that the Comanche 
program is in sync with the Army's schedule for digitizing its force?
    Answer. The Army is currently addressing this issue as a high-
priority unfunded requirement in the POM and evaluating possible 
alternatives that could accelerate the digital capability of Comanche's 
EOC aircraft. The Army is also minimizing the impact of not having EOC 
available for the FDD by using the Comanche Portable Cockpit and its 
simulation capabilities to represent Comanche in warfighting 
experiments
    Question. The Comanche development program, which was initiated in 
1988, was to have cost $4,500,000,000. Since the program has been 
stretched out numerous times, the development cost is now estimated to 
be $7,800,000,000, a difference of $3,300,000,000. Additionally, the 
Army has consistently included Comanche on its unfunded requirements 
lists which have been submitted to Congress. How confident are you that 
the development program will not increase in cost?
    Answer. The Army is committed to developing the Comanche with the 
available resources. The Comanche program manager is in the process of 
updating the program office estimate for completing the remaining 
development phase of the program and the preliminary data indicates the 
funding level is about right. The funding profile is not at the desired 
level but the Army will continue to make improvements to the program 
funding profile, as resources are available.
    Question. Does the $7,800,000,000 include the cost of developing 
the integrated armed reconnaissance/attack mission equipment package? 
If not, what is the cost of that effort?
    Answer. The $7,800,000,000 includes both the reconnaissance and the 
armed reconnaissance/attack mission equipment packages.
    Question. Does the $7,800,000,000 include integrating digitization 
technologies? If not, what is the added cost?
    Answer. The $7,800,000,000 includes integrating the digitization 
technologies. The unfunded issue addressed above provides that 
capability at an earlier point in the program to match the Army's 
digitization program schedule.
    Question. As a result of funding shortfalls, we understand that the 
Army has reduced the number of prototypes from six to two, reduced the 
number of tests, waived certain military specifications, and increased 
the weight limit to reduce the number of design changes for the 
Comanche development program. Is this true? If so, does this concern 
you? Why?
    Answer. The Comanche program, as well as many defense programs, has 
incorporated program improvements in the form of acquisition reform 
initiatives; elimination of military specifications and performance 
trade-offs are two of those incorporated in the Comanche program. While 
there are risks associated with the changes addressed, they are 
recognized and are being managed. The available resources do not allow 
for ``no risk'' program plans, but we do not allow a level of risk in 
programs that we do not believe is manageable. The number of prototypes 
versus EOC aircraft was carefully evaluated before the plan was 
approved in March 1995 and we continue to believe the program is 
executable with the aircraft available. Due to the extended period of 
time for development, we determined that the number of prototypes could 
be reduced and we could continue to perform all the required 
development tests. In fact, the six EOC aircraft will be used to 
perform some of the component and system qualification testing late in 
the development program after the user field evaluation of the EOC 
aircraft has been completed. The weight empty limit has grown, from the 
arbitrary 7,500 pounds at the start of the program, to the current 
empty. Much of this growth has been due to satisfying changing or 
additional requirements.
    Question. The Army's acquisition objective for Comanche is 1,292 
aircraft at a cost of approximately $37,000,000,000. It is our 
understanding that the unit cost of Comanche is based on an annual 
production rate of 72 aircraft. Are you confident that your budget can 
support an annual procurement of 72 aircraft?
    Answer. The current approved budget fully supports the procurement 
and fielding of 72 aircraft per year. The Army will have to balance its 
requirements in the coming years due to projected reduced level of 
resources and some adjustment to the quantity and rate of Comanche 
production may have to be considered.
    Question. Comanche is scheduled to enter low rate initial 
production (LRIP) in fiscal year 2004. What is the cost of the LRIP 
aircraft?
    Answer. The recurring cost of the LRIP aircraft vary due to 
projected learning curve and varying quantities procured in each year, 
but the initial unit cost is estimated to be approximately $30,000,000.
    Question. When will you enter full rate production?
    Answer. The current production plans are for a Milestone III 
decision in December 2006 which would approve ramping up from the LRIP 
quantities to the full rate of 72 in fiscal year 2009.
    Question. The National Defense Panel (NDP) believes that the Army 
does not have a requirement to procure 1,292 Comanche helicopters. If 
the Army were to implement the NDP recommendations, what would be the 
impact on the procurement cost for Comanche?
    Answer. Any reduction in quantity or reduced rate of production 
results in a higher average unit cost. The current projections indicate 
that as a worse case of procuring approximately one half the quantity 
at a reduced rate the average unit cost would increase about 15 percent 
to 20 percent.
    Question. The original Army's empty weight requirement for Comanche 
was 7,500 pounds. Since the Army has added features, the low rate 
initial production empty rate goal is 8,690 pounds. What impact will 
the increased weight have on the range, speed and vertical rate of 
climb requirements?
    Answer. The Comanche program has incorporated an upgrade to the 
T800 engine to a T801 engine that will provide approximately 13 percent 
more shaft horsepower allowing the production aircraft to meet all of 
the Operational Requirement Document performance requirements and Key 
Performance Parameters.
    Question. What does the prototype aircraft currently weigh? What 
plan do you have in place to reduce weight?
    Answer. The current weight empty of the first prototype is 8,988 
pounds. The prototypes were fabricated without weight optimization 
features incorporated in the design. The Army/contractor team has a 
comprehensive weight management program in place to meet the production 
weight goal of 8,690 pounds with a not to exceed weight of 8,943 
pounds. The current status of the production aircraft design is 8,838 
pounds. The design-to-weight program includes identified weight 
improvement features, as well as incentives for the contractors to meet 
the weight goal by tying weigh performance to award fee.

                            Patriot Missile

    Question. For the last two years, Congress has funded three 
different Patriot variants that each have an anti-cruise missile 
capability: Patriot Advanced Capability (PAC)-3, Guidance Enhancement 
Missile (GEM)+ Upgrade, and Patriot Anti-Cruise Missile (ACM). Describe 
the three variants and their capabilities.
    Answer. The three variants consist of the PAC-3, GEM+ and Patriot 
ACM. The PAC-3 is an active seeker missile, which incorporates hit-to-
kill technology--the only viable counter to threats armed with weapons 
of mass destruction. It is a totally new technology missile unlike 
anything in current inventories. It has a robust capability to counter 
the full range of Theater Ballistic Missile (TBM), Air-Breathing Threat 
(ABT) and Cruise Missile (CM) threats with high lethality. It is the 
missile of choice to handle current and projected TBM and low altitude 
CMs. With future software changes to the ground equipment and missile, 
it has the potential to engage CM and ABT threats over the horizon 
using external engagement quality track data. PAC-3 offers a four fold 
improvement in firepower over that of GEM+ and Patriot ACM.
    The GEM+ missile incorporates minor modifications to the existing 
fielded Patriot missiles that would enable them to achieve higher 
lethality than currently fielded missiles against a subset of TBM 
threats at altitudes below the PAC-3 missile keep-out altitude. The 
changes enable the GEM+ missile to intercept more stressing CM and ABT 
threats at lower altitudes. This technology does not offer the 
potential to intercept CM and ABT threats beyond the ground radar line 
of site. If funded, the plan is to update PAC-2 missiles when they are 
re-certified. This would significantly increase the capability of the 
existing PAC-2 missiles at relatively low cost, but the resulting 
missile will still be less capable than the PAC-3 missile.
    Patriot ACM was initiated at a low Research, Development Test & 
Evaluation funding level to prove out technology as a risk mitigation 
program for the PAC-3 missile. It combines GEM+ technology with an 
active seeker technology to provide a capability to counter the full 
range of ABT threats at all required altitudes and ranges. Patriot ACM 
would be as robust as PAC-3 against the CM threat. It also has the 
potential to engage CM and ABT threats over the horizon at greater 
ranges than the PAC-3 based on engagement quality external track data. 
With additional modifications, Patriot ACT could provide better 
lethality than existing, fielded Patriot missiles against a subset of 
the TBM threats and warheads.
    Question. Provide an average unit cost comparison of the three 
variants.
    Answer.

------------------------------------------------------------------------
 
------------------------------------------------------------------------
PAC-3 Missile......................   $1,200,000  Missile flyaway cost
                                                   based on 1,200
                                                   missiles
GEM+...............................      200,000  Average modification
                                                   cost
Patriot ACM........................      600,000  Average modification
                                                   cost
------------------------------------------------------------------------

    Question. What are the Army's plans for production of each variant? 
Please explain the rationale for these plans.
    Answer. The PAC-3 missile is the only configuration with a 
definitive plan for production. The PAC-3 missile is scheduled to enter 
into Low Rate Initial Production late fiscal year 1998 with full rate 
production scheduled for fiscal year 2000. A total of 1,200 missiles 
will be procured (fiscal years 1998-2004) with first unit equipped 
being accomplished fiscal year 1999. The GEM+ modification is competing 
with other programs in the fiscal year 2000 Army Program Objectives 
Memorandum. If funds become available, existing PAC-2 missiles would be 
modified during re-certification. The Army does not have a plan to 
procure the Patriot ACM missile.
    Question. What would be the implications of fielding all three 
variants in Army Patriot batteries in terms of military capability, 
acquisition costs, and logistics?
    Answer.
    Military Capability: The Patriot system design architecture will 
accommodate the multiple missile configurations and can be programmed 
to select the best missile to counter the threat. The battalion would 
provide a very robust capability to counter the full range of current 
and future TBM, ABT and CM threats at better altitudes and longer 
ranges with growth potential to conduct over the horizon engagements 
unconstrained by terrain masking. Depending on scenario, significant 
opportunity may exist to destroy ABT and CMs over hostile territories, 
thus reducing the effects of their conventional munitions or weapons of 
mass destruction.
    Acquisition Costs: BMDO has programmed $1,400,000,000 for the 
procurement of 1,200 PAC-3 missiles. As stated previously, the GEM+ 
modification would cost approximately $200,000 per missile. Given that 
funding is available, GEM+ missiles would become available 24 months 
after contract award. The Army does not intend to procure the PACM 
missile, but if funds were made available, missiles would become 
available 24 months after contract award.
    Logistics: At the organizational maintenance level, both the GEM+ 
and PACM missiles will be contained in existing PAC-2 canisters and 
will be deployed on existing Patriot launchers. The PAC-3 missile will 
be contained in a new 4-pack canister. Maintenance of this canister is 
similar to that of the existing PAC-2 missile, however minor changes to 
maintenance training/procedures will be required due to extensive 
modifications made to the launcher.
    With the addition of PAC-3, new depot level test equipment, 
fixtures and procedures must be added to existing depot facilities to 
support the missile and launcher. Depot personnel will require training 
for both missile and launcher. A depot study is in process to determine 
depot maintenance support requirements.
    Question. What are the security implications of providing Patriot 
ACM to foreign customers?
    Answer: There would be no major stumbling blocks that would 
preclude provision of Patriot ACM to existing foreign customers. 
Patriot has received approval to offer the PAC-3 Missile, which is more 
advanced technology than the Patriot ACM, to foreign customers. Patriot 
would have to go through the appropriate release processes, but there 
should be no impediment that would preclude release. There would be 
constraints on release of some design and manufacturing information 
just as there is on PAC-3, but release guidelines should be similar to 
those received for the PAC-3 missile.

                 Brilliant Anti-Armor Submunition (BAT)

    Question. What is the status of the BAT program in terms of 
development, testing, and production?
    Answer. All major technical issues have been resolved and 
demonstrated successfully in flight tests. We have shown that the 
design is mature and the system is meeting its performance 
requirements. The most significant challenge remaining is completing 
the hardware deliveries to support Army Tactical Missile System 
(ATACMS) Block II missile testing by June 1998. The Block II program 
completed its Engineering Development Test (EDT) flight in October 1997 
and its Pre-Production Test (PPT)-1 flight in December 1997. Both 
flights were dramatic successes that demonstrated the Block II 
capability to dispense BATs. The second Block II flight test dispensed 
a single live BAT and 12 instrumented simulants. The missile flew 134 
km and hit a moving BMP with the single live BAT. BAT Contractor 
Development Testing (CDT) was completed on January 12, 1998 when the 
flight-test vehicle acquired and impacted a T-72 tank at White Sands 
Missile Range. All known design issues have been successfully mitigated 
and demonstrated in the CDT flight test program. In April 1998, we will 
dispense Preproduction Verification Test (PPVT) vehicles from an ATACMS 
Block II. This will complete the Engineering and Manufacturing 
Development (EMD) testing for BAT. Additional BATs will be deployed as 
part of the Block II flight test program during fiscal year 1998 and 
fiscal year 1999. The completion of BAT EMD supports a Low Rate Initial 
Production (LRIP) decision in early fiscal year 1999. Also, the system 
level qualifications are ongoing and on schedule to support the 
production decision. The fiscal year 1999 President's Budget requests 
$100,400,000 to support BAT LRIP of 420 submunitions. This submunition 
production supports the ATACMS Block II LRIP of 30 missiles also in the 
fiscal year 1999 President's Budget.
    Question. The BAT Pre-planned Product Improvement (P3I), which 
allows the submunition to attack both warm moving vehicles and cold 
stationary vehicles, ``played'' well in the Deep Attack Weapons Mix 
Study (DAWMS). Some observers have suggested that we terminate 
production of basic BAT and proceed directly to P3I BAT. Please discuss 
the pros and cons of such a strategy.
    Answer. The Army needs the capability to deny the enemy of 
uncontested maneuver at depth--this is especially important for our 
light and early entry forces. Given the proliferation of armored 
vehicles in over 140 different countries, not fielding BAT and waiting 
for P3I BAT would deprive the warfighter of a near-term capability to 
engage and destroy moving armor at depth. Additionally, waiting for P3I 
BAT would result in shifting the integration risks from BAT to P3I BAT, 
impacting the vendor base--creating parts obsolescence problems, and 
significantly increasing qualification costs. P3I BAT is currently 
structured as an improvement program, not a full development program. 
The P3I BAT program develops upgrades or improvements to selected 
components of the basic BAT. The P3I program is developing an improved 
seeker that uses leading-edge technology, an improved acoustic target 
acquisition capability and an improved warhead. These improved 
components will be integrated into the base BAT system. All the other 
subsystems comprising the P3I BAT derive from the base BAT system. An 
attempt to incorporate these subsystems into the P3I BAT now would 
introduce an unacceptable level of risk to the entire ATACMs-BAT 
program and significantly raise the unit cost of the P3I BAT. Waiting 
for the P3I BAT would also result in a break in the ATACMS production 
line, dramatically increasing future unit costs. Base BAT meets a 
critical operational deficiency today, P3I BAT expands performance to 
meet the threat tomorrow.
    Question. Can P3I BAT be accelerated?
    Answer. No. At this time it does not appear that we can accelerate 
P3I BAT. The P3I BAT program is developing a leading-edge seeker to 
replace the seeker in the basic BAT. This program is currently 
completing its Program Definition and Risk Reduction phase and will 
enter EMD in October 1998. The EMD phase requires time to mature the 
seeker electronics behind the gimbals and system support software 
algorithms. There is a significant amount of testing planned in the EMD 
phase to prove out the seeker electronics and integration with system 
level subsystems. The main driver in the entire EMD test program is 
hardware deliveries. Specifically, the miniaturization of the 
electronics must be accomplished before initiating flight-testing. The 
Application Specific Integrated Circuits to support the electronics 
miniaturization have a 22 month lead time before they can be integrated 
into flight test vehicles. The P3I BAT EMD flight test program consists 
of a Captive Flight Test (CFT) phase, a Developmental Engineering Test 
phase, and culminates with a ATACMS Block II System Test with P3I BAT. 
Consequently, this testing can not be accelerated because of the 
hardware lead time.

                        Longbow Hellfire Missile

    Question. Last year, the General Accounting Office said that the 
Army overstated its requirement for the Longbow Hellfire missile. 
Further, during the Deep Attack Weapons Mix Study, the less expensive 
Laser Hellfire ``played'' better than Longbow Hellfire. Last year, the 
Office of the Secretary of Defense (OSD) agreed to study the best mix 
between Laser Hellfire and Longbow Hellfire. This year, the Army is 
requesting a multiyear contract for Longbow Hellfire. When will the 
Hellfire mix study be completed?
    Answer. The mix study is complete and strongly supports the Army's 
position for the stated requirement. The emerging mix study results 
were considered in the preparation of the fiscal year 1999 President's 
Budget. The budget includes a five-year multiyear procurement, which is 
critical to the Longbow Hellfire Cost Reduction Plan, and supports the 
Army's Longbow Hellfire requirement.
    Question. Why did the Army request a multiyear approval in the 
budget prior to the availability of this study?
    Answer. The Army completed the OSD required mix study in December 
1997, prior to the submission of the fiscal year 1999 President's 
Budget. The results confirm that the multiyear quantities are valid.
    Question. What are the requirement assumptions for Longbow 
Hellfire, and are these stable enough for a multiyear contract?
    Answer. Yes, the Longbow Hellfire requirement is stable for a 
multiyear contract. The Army's requirement process takes into account 
the total Longbow capable aircraft for the two major theater wars. The 
Longbow Apache aircraft requirement and procurement is stable and 
funded. The Apache Longbow helicopter procurement quantity will field 
25 attack battalions against the force structure requirement and 
modernizes the entire AH-64 fleet in both the Active and Reserve 
components. Present aircraft procurement schedule is based on the 
recent Total Army Analysis 2005 Force Structure process, which is 
designed to define the Army's force structure thru fiscal year 2005. 
Longbow requirements are those necessary to equip the two major theater 
war force to its designed capability to meet warfighting Commanders-in-
Chief requirements to decisively defeat the enemy, and to maintain 
operational flexibility in accordance with the Department of Defense 
instructions for determining munitions requirements.
    Question. What are the savings from the multiyear procurement 
compared to annual buys at the same annual quantities?
    Answer: The estimated savings are $172,186,000.
    Question. How many years is the proposed multiyear procurement? 
What is the total contract value for the multiyear procurement?
    Answer. The proposed multiyear procurement is for five fiscal 
years, starting in fiscal year 1999 and ending in fiscal year 2003. The 
estimated contract value for the multiyear procurement is 
$1,199,000,000.

      Line-of-Sight Anti-Tank (LOSAT) and Follow-On-To-Tow (FOTT)

    Question. Please provide a side-by-side comparison between the 
LOSAT and Follow-On-To-TOW (FOTT) weapon systems including, but not 
limited to the following areas, initial operating capability, average 
unit cost (with assumptions) number weapons projected to be fielded, 
firing platform, number of firing platforms projected to receive 
weapon, number weapons per firing platform, weapon range, reload times, 
lethality, and targeting method.
    Answer. LOSAT/FOTT Characteristics:

------------------------------------------------------------------------
        Characteristics               LOSAT                 FOTT
------------------------------------------------------------------------
Range.........................  Greater than 4     Greater than 4
                                 kilometers.        kilometers.
First Unit Equipped...........  Fiscal year 2003   Fiscal Year 2005--
                                 (Start of          Missiles with
                                 Extended User      Improved TOW
                                 Evaluation)        Acquisition System
                                 Fiscal year 2005   (ITAS)/BFVS A3
                                 (Advanced          Improved Bradley
                                 Concept            Acquisition
                                 Technology         Subsystem (IBAS)
                                 Demonstration      appliques.
                                 Completed).
                                                   Fiscal year 2007--
                                                    Bradley Fighting
                                                    Vehicle System
                                                    (BFVS) A2/A2
                                                    Operation Desert
                                                    Storm (ODS)
                                                    appliques.
Platform(s)...................  12 each M1113      Current ground TOW
                                 (Expanded          Platforms (ITAS-
                                 Capacity HMMWV).   1165, BFVS-4164).
No. of missiles per platform..  4 per LOSAT HMMWV  6 per ITAS vehicle, 7
                                 vehicle 8 each     per BFVS M2, 12 per
                                 in trailer         BFVS M3.
                                 behind LOSAT
                                 HMMWV.
Missile Reload Time...........  Less than 10       ITAS--30 sec (single
                                 minutes for each   missile). BFVS-2 min
                                 missile pods       (two missiles).
                                 (each pod holds
                                 2 missiles).
Average Unit Procurement Cost   Fire Unit Cost:    Missile Cost: $78,400
 (Fiscal Year 1998 Constant      $3,000,000 each    each (based on buy
 dollars).                       (based on buy of   of 39,267 missiles).
                                 12 ACTD Fire       Platform applique
                                 Units) Missile     kits: BFVS-$42,953
                                 Cost: $181,000     Each ITAS-$31,484
                                 each (based on     Each BFVS A2/A2 ODS-
                                 buy of 144 ACTD    $82,588 each.
                                 missiles).
Missile Warhead...............  Kinetic Energy     Chemical Energy
                                 (hit to kill).     Warhead--Potential
                                                    for either an
                                                    Explosively Formed
                                                    Penetrator (similar
                                                    to TOW 2B) or Tandem
                                                    shaped charged
                                                    warhead (similar to
                                                    Javelin).
Targeting Method..............  2nd Generation     2nd Gen FLIR target
                                 (Gen) Forward      acquisition with
                                 Looking Infrared   fire & forget and
                                 (FLIR) Target      alternate mode
                                 Acquisition.       (command line of
                                 Sequential         sight mode). BFVS
                                 engagement of      platforms have
                                 two targets, no    ability to
                                 gunner actions     sequentially engage
                                 after trigger      two targets.
                                 pull.
Rate of Fire Time of flight     >20 seconds to
 Approximately 4 seconds to      maximum range..
 maximum range.
Engagement Timelines..........  2 targets on one   Single Shot
                                 trigger pull (2    sequential firing.
                                 kills at maximum  BFVS A/A2 ODS. Two
                                 range in 10        missiles per
                                 seconds).          launcher--Fire and
                                                    forget mode: <5 sec
                                                    + missile time of
                                                    flight to target;
                                                    Alternate Mode: 1.5
                                                    sec + missile time
                                                    of flight to target.
                                                   BFVS A2/A2 ODS. Two
                                                    missiles per
                                                    launcher--Fire and
                                                    forget mode: <5 sec
                                                    + missile time of
                                                    flight to target:
                                                    Alternate Mode: 1.5
                                                    sec + missile time
                                                    of flight to target.
                                                   ITAS. One missile per
                                                    launcher--Fire and
                                                    forget mode: <2 sec
                                                    + missile time of
                                                    flight to target +
                                                    reload time;
                                                    Alternate Mode 1.5
                                                    sec + missile time
                                                    of flight to target
                                                    + reload time.
Deployment....................  1 Company (12      Replaces all current
                                 Fire Units) to     ground TOW
                                 XVIII Airborne     platforms.
                                 Corps.
Missile Length/Weight.........  113 in./175 lbs..   46 in./65 lbs.
------------------------------------------------------------------------

                      Abrams Tank Upgrade Program

    Question. The Army is requesting $698,000,000 for the M1A2 Abrams 
tank modification program. It is our understanding that the Army M1A2 
program does not include adequate funding for safety modifications in 
fiscal year 1999. What safety modifications are not funded?
    Answer. We have four safety modifications funded through fiscal 
year 2003. We are adequately funded in fiscal year 1999 for safety 
modifications. We have some outyear funding issues we are working in 
the fiscal year 2000 Program Objectives Memorandum (POM). Safety has 
the Army's highest priority.
    Question. What is the risk to the soldier if the safety 
modifications are not included?
    Answer. We strive to train our soldiers in the safe use of all of 
our equipment. We have no safety issues placing soldiers at high risk 
if proper operating procedures are followed. There are a few open 
safety issues where the chance of occurrence is remote but the results 
are catastrophic or fatal. An example is the Driver's Hatch Interlock 
(DHI). The DHI will prevent the tank commander from rotating the turret 
while the driver's hatch is open. Over the course of the entire Abrams 
tank program, we've had 18 turret rotation incidents with 5 fatalities. 
In these cases, we are implementing hardware fixes and updating 
training to take the remote chance of occurrence to nearly non-
existent.
    Question. What is the funding shortfall in fiscal year 1999? The 
outyears?
    Answer. There is no fiscal year 1999 shortfall. At this point in 
time, we have only four safety modifications in progress for the tank. 
Budget documents show that two of the modifications, DHI and Nuclear, 
Biological and Chemical (NBC) Fire Warning, need about $45,000,000 
between them to finish before fiscal year 2003.
    Question. The current multiyear contract is for an annual 
production rate of 120 tanks. However, the contract has a ``ceiling 
price'' if the Army procures less than 120 tanks. Could you please 
explain ``ceiling price'' and the production quantities required?
    Answer. The current funding of the weapon system cost profile for 
120 tanks each in fiscal year 1999 and fiscal year 2000 is as follows:

------------------------------------------------------------------------
                                            Fiscal year     Fiscal year
                                               1999            2000
------------------------------------------------------------------------
General Dynamics Land systems (GDLS) MY     $255,000,000    $262,500,000
 Procurement Price (4th and 5th Years)..
GDLS System Enhancement Program (SEP)         50,300,000      51,300,000
 Engineering Change Proposals (ECPs)....
GDLS other approved/pending ECPs........      16,900,000      21,000,000
2nd Generation Forward Looking Infrared       78,300,000      80,100,000
 (2nd Gen FLIR) Hardware................
2nd Gen FLIR Technical Support..........      18,300,000       6,300,000
Other Government Furnished Equipment         127,600,000     122,400,000
 (GFE)..................................
First Destination Transportation &             3,900,000       3,900,000
 Auxillary Services.....................
Total Package Fielding and Special Tools/     24,300,000      29,800,000
 Test Equipment Hardware................
Government Technical Support, Systems         18,500,000      18,800,000
 Test and Evaluation, Management........
Contractor Technical Support............      73,100,000      71,500,000
Total Weapon System Requirements........     666,200,000     667,600,000
------------------------------------------------------------------------

    The Abrams multiyear procurement is a firm fixed price (FFP) 
contract for 580 M1 to M1A2 upgrades at a 10/month average delivery 
rate. There are no clauses allowing adjustment for inflation, labor 
rates, etc. The contract value is $1,279,300,000 and the contract unit 
cost is $2,206,000 per tank. The contract unit cost is lower than the 
M1A2 unit cost because, as shown above, the contract only covers about 
45 percent of the tank. Separate contracts for GFE (such as thermal 
sights, hulls, guns, depleted uranium armor, etc.), Government 
activities, system technical support, fielding costs, etc. account for 
the remaining 55 percent.
    During negotiations for the multiyear, we added a contract re-
opener to take up to 18 tanks out of each of the four final years of 
the contract. We negotiated ceiling prices for the following five 
scenarios:

------------------------------------------------------------------------
     Number of tanks (by year)        Ceiling price        Unit cost
------------------------------------------------------------------------
580 (100, 120, 120, 120, 120).....     $1,279,300,000         $2,206,000
562 (100, 120, 120, 120, 102).....      1,301,000,000          2,315,000
544 (100, 120, 120, 102, 102).....      1,275,800,000          2,345,000
526 (100, 120, 102, 102, 102).....      1,249,500,000          2,375,000
508 (100, 102, 102, 102, 102).....      1,223,300,000          2,408,000
------------------------------------------------------------------------

    Because of limited resources, the primary focus of the negotiation 
team was the planned acquisition of 580 tanks. A lesser effort was 
spent in refining the reduced rate ceilings or in pricing every 
conceivable option for taking up to 18 tanks out each year because we 
expected to be able to renegotiate if we had to exercise this re-
opener.
    Throughout the negotiation process, there was growing conviction 
that the Saudis were going to but 150 additional tanks (already 
included in foreign military sales case VKZ and approved by Congress, 
but deferred by the Saudis because of cash flow issues). Locking the 
overheads' business bases was one of the late issues settled in 
reaching a definitized firm fixed price agreement inSeptember 1996. By 
then, both parties felt there was a high probability that the sale 
would be executed, and Kingdom of Saudi Arabia (KSA) tanks would be 
delivered concurrently with the U.S. Army quantity (in particular, over 
the delivery period for fiscal year 1998, fiscal year 1999 and fiscal 
year 2000). Multiyear procurement prices were finalized with the 
expected increase in business volume factored into the overheads and 
general and administration costs. Both parties accepted risk. In this 
particular case, GDLS came out on the short end of the bargain, because 
the 150 KSA tanks has been deferred for two years in a row. The tank 
program and taxpayers received a windfall of about $75,000,000 at GDLS 
expense. The only alternative considered by the negotiation teams at 
the time, was settling the multiyear procurement at a higher total 
amount ($75,000,000) with a downward adjustment provision if the Saudi 
case had materialized.
    The two issues above are of importance when considering the impact 
of exercising the alternate rate provision. For example, to buy 544 
tanks, (10 tanks per month for the first 34 months and 8.5 tanks per 
month for the last 24 months) the ceiling price is $1,275,800,000. 
We're only assured of saving $3,500,000 in total by cutting 18 tanks 
each out of fiscal year 1999 and fiscal year 2000. Re-opening the 
existing multiyear procurement for the purposes of renegotiating the 
fiscal year 1999 and fiscal year 2000 ceiling prices is an option; 
however, that would give the contractor the opportunity to put these 
additional overhead expenditures back on the table. These types of 
situations are not uncommon when terminating a contract for 
convenience. The contractors have an opportunity to revisit these types 
of issues when the price/contract is reopened/renegotiated.
    Question. It is our understanding that you can reduce the 
production quantity to 102 tanks without a significant increase in 
cost. If this is the case, why not reduce the number of tanks procured 
in fiscal year 1999 and fund the safety modifications?
    Answer. First, safety modifications are adequately resourced in 
fiscal year 1999. We also believe that by the time dust settles not 
just from the adjusting the multiyear, but also the myriad of other 
contractual documents for GFE supporting the multiyear; years will have 
passed and there will be little funding left on the table.
    Question. The fiscal year 1999 budget request includes funding for 
a SEP. The SEP modification includes a software upgrade, which will 
provide increased situational awareness. The Army's Operational Test 
and Evaluation Agency believes that the software development program is 
``high risk and could adversely impact the M1A2 schedule''. Do you 
agree with this assessment? Why or why not?
    Answer. At this point, the Army has decoupled the Embedded Battle 
Command software from the SEP (and Bradley A3) production decision. At 
the Abrams Follow-on Test and Evaluation (to be conducted in 3rd 
through 4th Quarters, fiscal year 1999 with the Bradley A3 Initial 
Operational Test and Evaluation (IOTE)), we will demonstrate a voice 
only communications capability. The digital command and control 
capabilities will be demonstrated during the Force XXI Battle Command 
Brigade and Below (FBCB2) IOTE in 1st through 2nd Quarters, fiscal year 
2000. The M1A2 SEP tank will perform all tank functions and the tank 
can be deployed and fought without the situational awareness software. 
The project manager for Abrams will integrate situational awareness 
software as it becomes available. The situation is analogous to buying 
a Pentium Personal Computer to upgrade Word, Excel and PowerPoint to 
Office 97 and hooking it up to e-mail at a later date. However the 
integration of Embedded Battle Command (EBC) software for situational 
awareness is complicated and is not a ``plug and play'' type of 
integration.
    Question. If the SEP program is delayed, what impact will that have 
on the M1A2 schedule?
    Answer. With fiscal year 1998 advance procurement, we're already 
buying SEP components such as 2nd Gen FLIR, thermal management system, 
etc. There are no workarounds to go back to 1st Gen FLIR hardware. SEP 
will be cut into production as scheduled or we will suffer a production 
break. The same situation occurred when the M1A2 was cut into 
production. Like the M1A2, we have a risk mitigation program for the 
M1A2 SEP.
    Question. For the record, what is the current development schedule 
for the SEP?
    Answer. The SEP Program is currently in the fabrication and testing 
phase of development. Component testing has been initiated, and in some 
cases already successfully completed. Six M1A2 SEP prototypes are being 
assembled with one tank completed and en route to Yuma Proving Ground 
(YPG) for contractor testing. Over the next three months, the remaining 
five prototypes will be completed. Government testing of three of those 
prototypes will begin in June. The remaining three tanks will stay at 
the contractor's facility to support software development/upgrades, 
conduct engineering evaluations, and to support the logistics program.
    System software is being completed with functional tank software 
available for contractor testing. Fully functional, safety release 
software will be available for Government testing in June 1998. 
Integration of the EBC software from the FBCB2 program will occur over 
the next eight months, with EBC version 1.02b released to the SEP tanks 
in December 1998. Upgrade to EBC version 3.1 will also begin over the 
remainder of fiscal year 1998, with actual release of software from the 
FBCB2 program to the Abrams SEP program in February 1999 (version 3.0) 
and June 1999 (version 3.1). After the Abrams EBCintegration program is 
complete, the M1A2 SEP prototype tanks will have EBC 3.1 functionality 
to support the FBCB2 IOTE in October 1999. Long lead hardware is in the 
process of being procured to support August 1999 production of the M1A2 
SEP tank.
    Question. When will SEP be tested?
    Answer. SEP testing has been on going at the component level. The 
first M1A2 SEP prototype was shipped to YPG in February 1998 to start 
technical testing. A follow-on operational test and evaluation is 
scheduled for 3rd through 4th Quarters, fiscal year 1999 to demonstrate 
tank requirements with an additional follow-on operational test in 
conjunction with the FBCB2 IOTE in 1st Quarter, fiscal year 2000 to 
demonstrate command and control requirements.
    Question. Last year, your budget proposed upgrading a total of 998 
tanks. This year your budget funds a total of 1,069 upgrades. Why are 
you increasing the number of upgrades?
    Answer. The Original M1A2 upgrade program was for 998 upgrades 
which when combined with 62 new and 19 pilots and prototypes added to 
1,079 M1A2 tanks. This quantity fielded our ``First-to-Fight'' 
continental United States contingency force. Subsequently, several 
implemented and planned force structure changes caused us to adjust the 
quantity. The key change is as ``digitization'' is introduced, we 
believe it will be such a combat capability multiplier that we can 
reduce the size of a tank battalion from 60 tanks to 45 tanks 
(including floats). Within a heavy division, we plan to outfit the 
division cavalry (27 tanks) and two battalions (90 tanks) with embedded 
platforms like the M1A2 SEP, and the remaining two to three battalions 
(90-135 tanks) with M1A1D. The 3rd Armored Cavalry Regiment will be all 
M1A2 SEP. Given these force structure assumptions, 1,150 M1A2 SEPs 
(including 1,069 upgrades, 62 new and 19 pilots and prototypes) are 
required to provide for our active forces, war reserve, testing and 
training base requirements.
    Question. What is the Army's acquisition objective (AAO) for M1A2 
tanks?
    Answer. We don't have an official AAO for a model of tank. Our 
official AAO is 6,760 tanks, by about fiscal year 2010. Our desire 
would be for all to be M1A2s, but this is not affordable. We currently 
plan to field 1,150 M1A2s.
    Question. Since the Army cannot afford to upgrade enough M1 tanks 
to the M1A2 to field throughout the force, the Army is proposing a new 
upgrade program, the M1A1D, which will ``digitize'' M1A1 tanks. Please 
explain how a M1A2 will differ from a M1A1D?
    Answer. The Abrams Upgrade converts an M1 into an M1A2 by adding a 
new turret, a 120mm main gun, NBC protection, a commander's independent 
thermal viewer (CITV), digital electronics architecture, position/
navigation system (POS/NAV), improved armor, and an improved 
commander's weapon station (ICWS). Beginning in fiscal year 1999, the 
SEP will be cut into production. SEP includes 2nd Gen FLIR thermal 
sensors, Army Force XXI software, digital maps, integrated global 
positioning system (GPS), improved electronics, an under armor 
auxiliary power unit (UAAPU) and a thermal management system. The M1A1D 
integrates the FBCB2 applique computer and command and control (C2) 
software with the tank's laser rangefinder, a pointing device (like a 
compass), the GPS and radios to provide digital C2/situational 
awareness (SA) and a far target designate capability. The M1A1D does 
not update any of the tanks analogue electronics, nor does it contain 
the fightability improvements of the M1A2 and M1A2 SEP such as the 
CITV.
    Question. What is the cost of the M1A1D program?
    Answer. The total cost is yet to be determined. The development 
cost is estimated at $12,000,000. The current estimated unit cost is 
$68,000 per tank in situational awareness and integration hardware, 
$150,000-$200,000 in GFE radios, EPLRS, PLGR and applique computer 
equipment and $50,000-$60,000 per tank to apply and provide technical 
and field support, (i.e., special tools and test sets, initial spares, 
training device modifications, engineering and logistics support).
    Question. Is the program fully funded in the budget?
    Answer. No. While the Army has funded the M1A1D development costs 
and most of the procurement costs for the first digital division (and 
identified funding for the rest), funding issues remain beyond fiscal 
year 2000. Digitization has a high priority and we will fund the 
remainder of the program in the on-going POM.
    Question. What is the schedule for the M1A1D upgrades?
    Answer.

------------------------------------------------------------------------
 
------------------------------------------------------------------------
Preliminary Design Review.................  2nd Quarter, fiscal year
                                             1998
Contractor Test & Evaluation..............  3rd Quarter, fiscal year
                                             1998
Critical Design Review....................  4th Quarter, fiscal year
                                             1998
IPR Production Decision...................  4th Quarter, fiscal year
                                             1998
Tech Data Package Available...............  1st Quarter, fiscal year
                                             1999
Operational Testing.......................  1st Quarter, fiscal year
                                             2000
------------------------------------------------------------------------

    Question. Who will do the upgrade?
    Answer. Current plan is for contractor teams to visit the units and 
apply the kits. A specific contractor is not yet identified. Another 
possibility is to accomplish some installations during the AIM XXI M1A1 
remanufacture program. The Army is currently assessing the results of 
the AIM XXI proof of principle effort and a decision is expected in the 
next few months.
    Question. At the completion of the M1A2 and M1A1D upgrade programs: 
How many M1A2, M1A2 SEP, M1A1D, M1A1 and M1/IPM1's will be in the 
active and National Guard Army components?
    Answer. At end state around fiscal year 2010, current Army plans 
are for 1,150 M1A2 SEPs, 0 M1A2s, 1,535 M1A1Ds and 39 M1s in the Active 
Army, War Reserve and Training Base. The Guard will have 2,792 M1A1s 
and 343 M1s. Another 901 M1s will be available for other Department of 
Defense purposes.
    Question. Will all the tanks be able to ``talk'' to each other?
    Answer. The M1A2 SEP and M1A1D will have common digital 
communications. All will have ``voice'' communication.
    Question. Will they all need different spares?
    Answer. In general terms, there are spares that are common across 
the fleet and there are unique spares requirements for each model of 
Abrams tank. For example, all have essentially the same gas turbine 
engine and powertrain. The M1s and IPM1s have 105mm tank main guns and 
mounts while the M1A1 and M1A2 have 120mm tank main guns and mounts. 
The M1 and M1A1 have primarily analogue electronics (and little 
computing power) while the M1A2 (equivalent to a 286mhz computer) and 
M1A2 SEP (equivalent to a Pentium) will have different versions of 
digital electronics.

                       Crusader Artillery Program

    Question. The Crusader is the Army's next generation field 
artillery system. The Crusader System includes a self-propelled 
howitzer and an armored resupply vehicle. The Crusader will have 
greater firepower range and will be lighter than the current Paladin 
system. These capabilities will result in increased survivability, 
lethality, mobility, and operational capability.
    The Crusader development program will cost $2,900,000,000. The Army 
has estimated that Crusader procurement will require $12,000,000,000.
    Crusader is a ``leap-ahead'' indirect fire support system. 
Generally, complex technologically advanced programs all have some risk 
in schedule, cost, and technology development. How would you 
characterize the risk in each of these areas for Crusader? Why?
    Answer. The Crusader program has an extensive risk management 
program to assess cost, schedule, and technical risk (hardware and 
software). In addition, the Army Materiel Systems Analysis Activity 
(AMSAA) provides a continuous independent risk evaluation of the 
Crusader program. At this time, the program office and the AMSAA 
consider the combined program risk moderate to moderate-high. The goal 
of the program is to have all risks reduced to moderate or low by 
Milestone II. Based on the extensive risk management program and the 
status of risk mitigation plans, we are on track to satisfy the program 
goal. The overall technical risk is moderate to moderate-high. The 
areas driving the risk include Automotive (mainly powerpack 
integration, and powerpack cooling), Armaments (cannon wear life and 
laser ignition) and Software (number of lines of code and complexity). 
The program cost risk is considered moderate based on the status of the 
program today and performance to date. The schedule risk is moderate to 
moderate-high. The program is well planned, but optimistic. The AMSAA's 
independent assessment is consistent with the Program Office 
assessment. In addition, the AMSAA has stated that they are unaware of 
any program with a more extensive risk management program and are 
confident that the Crusader program knows its risks and is proactively 
mitigating and managing the risks.
    Question. In fiscal year 1997, the Crusader program was 
restructured. The new development schedule compresses the Engineering 
and Manufacturing Development (EMD) phase by almost one year, but 
retains the First Unit Equipped (FUE) date in fiscal year 2005. The 
Army's Operational Test and Evaluation (OPTEC) office says the schedule 
causes a high degree of risk in the program. Do you agree with the 
assessment?
    Answer. The new development program did not really compress EMD. 
What it did do was compress the overall development schedule by 
introducing some concurrency among a limited number of the Program 
Definition and Risk Reduction (PDRR) and EMD activities. The new 
program was worked by a working level integrated product team (WIPT) 
made up of key Office of the Secretary of Defense (OSD) and Army 
personnel. The OPTEC was part of this WIPT. The OPTEC concurs with the 
program office risk assessement--the new development plan is an 
acceptable risk program.
    Question. Have you reduced or combined any of the testing to meet 
the compressed timelines? If so, what have you done?
    Answer. From an overall test and evaluation perspective, the 
actions taken resulted in a better and lower risk test and evaluation 
(T&E) approach--such as moving live fire testing forward and improving 
the time phasing of the overall program testing. The new development 
program did not reduce testing; in fact it has more testing than the 
original program. There is some combined operational and developmental 
(OT/DT) testing which was carried over from the previous program plan. 
Often as in Crusader's case, this is the most cost effective approach 
to T&E. The current program is assessed as well planned and within 
acceptable risk by both the Office of the Secretary of Defense (OSD) 
and the Army.
    Question. Since the schedule causes a high degree of risk in the 
program, why not slow down the schedule and field Crusader one year 
later?
    Answer. There is no reason to slow down the program and slip 
fielding one year. Slowing the program will not appreciably reduce risk 
in the program; but it will increase program costs. The Army made a 
decision in 1996 to reduce the size of its cannon battalions from three 
batteries of eight guns each (3X8) to three batteries of six guns each 
(3X6). This was done in anticipation of Crusader's increased 
capabilities and to meet other urgent personnel requirements. This, 
deliberate decision to reduce the cannon fire support available until 
Crusader is fielded, places the force at a calculated risk 
(insufficient fire support) in theevent of high intensity combat until 
Crusader is fielded. The risk in this decision is considered 
acceptable--knowing Crusader will begin fielding in 2005.
    Question. Is the restructured Crusader program on track?
    Answer. The program is on track since the restructuring. It is 
within budget and schedule. The Program Executive Officer and Field 
Artillery Commandant In Process Review (PEO/CMDT IPR) was 
satisfactorily concluded, as scheduled, on March 12, 1998.
    Question. When will the first prototype be completed?
    Answer. The first vehicle is available in April 1999. It will be a 
reliability test bed, which integrates the objective hull, suspension 
and propulsion system. The first full-up Program Definition and Risk 
Reduction (PDRR) prototype howitzer and resupply vehicles will be 
delivered for test in April 2000.
    Question. When will testing begin?
    Answer. Significant component testing, modeling, and simulation are 
ongoing at this time. As examples the cannon, gun cooling and gunmount 
have been in testing for well over a year and a mobility platform 
(prototype) will begin testing in third quarter, fiscal year 1999.
    Question. We understand that the Army estimates a $45,000,000-
$55,000,000 overrun on the Engineering and Manufacturing Development 
contract? What caused the overrun?
    Answer. The Crusader program is in Program Definition and Risk 
Reduction (PDRR). Engineering and Manufacturing Development (EMD) will 
begin in fiscal year 2001. The contract overrun being referred to is on 
the Program Development and Risk Reduction (PDRR) contract.
    The contractor currently estimates the overrun on Crusader's PDRR 
contract at $55,800,000 versus the contract target cost of 
$1,030,500,000, or 5.4 percent. The Government is maintaining close 
scrutiny on the latest revised estimates and the variance at completion 
could range up to $85,000,000. The contract's variance at completion is 
primarily driven by:
    a. Unrecoverable overruns in the now terminated Liquid Propellant 
Armament efforts;
    b. Higher projected rates than negotiated, primarily driven by 
overhead rate degradation affected by the shrinking defense production 
base;
    c. Required design iterations (beyond those planned) for the 
powerpack driven by size and cooling constraints; and
    d. Higher than planned system engineering and program planning 
costs.
    Question. How will you pay for the overruns?
    Answer. The Crusader Program Development and Risk Reduction (PDDR) 
development contract is a cost based contracted effort. Risk is 
inherent in this stage of the program and development risk is accounted 
for during the estimating process at Milestone I. Additionally, the 
anticipated development risk and fiscal year constraints were taken 
into consideration during update of Crusader's Approved Program 
Baseline in 1997. The Army believes that most of the contract overrun 
is currently accounted for in its current budget for Crusader. 
Affordability is and will continue to be perpetually monitored through 
the ``Cost as an Independent Variable'' (CAIV) process. However, the 
Crusader program can no longer absorb further reduction to its budget 
in the future without damaging cost, schedule or performance.
    Question. The National Defense Panel expressed concern over the 
weight of Army weapon systems. Crusader will weight 55 tons when fully 
loaded. Is weight a concern in the Crusader development program?
    Answer. We are concerned about weight and have an extensive weight 
management program. The Crusader system weight requirement is 55 tons 
with growth to 64.5 tons for each vehicle. Today's most likely vehicle 
weight, based on the current concept is 58.5 and 59.9 tons for the 
resupply vehicle and self-propelled howitzer respectively at the end of 
PDRR. The most likely weights represent the current allocated weight 
based on today's concept. The current concept is based on what team 
Crusader believes is the right balance of operational performance, 
weight, cost, schedule and risk. The program has an extensive weight 
reduction program with contractor incentives to cost effectively reduce 
vehicle weight. The weight reduction program is a combination of good 
engineering practices, making smart engineering decisions, and a series 
of weight reduction initiatives to make engineering changes to the 
current concept to eliminate or reduce weight. The program has a 
significant contract incentive program and an individual incentive 
program. Based on the current state of technology and a comprehensive 
CAIV program the Army believes the right weight requirement is 55-60 
tons per vehicle. There are technologies available to decrease weight, 
but they are not believed to be cost effective when balancing cost, 
weight, operational performance, risk and schedule.
    Question. Are you confident that you will achieve your weight 
goals?
    Answer. We are confident that based on these assessments that we 
can achieve our weight goals.
    Question. What strategic lift will be required to transport one 
Army armor division's dedicated fire support when Crusader is fielded?
    Answer. The Army will be able to strategically deploy Crusader. The 
Army deploys combat power four different ways. We forward deploy forces 
in high-tension areas such as South Korea. We preposition equipment in 
some critical areas and deploy soldiers to fall in on the equipment. We 
also preposition equipment afloat, and finally, we deploy forces from 
the continental United States. Crusader fits into all of these 
alternatives.
    Should an Army armor division (equipment and soldiers) deploy from 
the United States, it would do so by sea. Parts may go by air. Crusader 
is deployable by both sea and air. In fact, Crusader increases the 
commander's flexibility when deploying. Fewer Crusaders, requiring less 
lift, can provide equivalent fire support as compared to our current 
system. This is especially beneficial when tailoring forces for 
operations other than war. The commander may not require his complete 
fire support organization, and with Crusader, he can deploy a highly 
capable fire support package suited for the situation. Crusader lets 
the commander deploy the fire support he needs using less strategic 
lift, and therefore, freeing up assets to carry other systems he may 
need more of like tanks or infantry fighting vehicles.

                  M113 Upgrade Program--Reactive Armor

    Question. Last year the Congress appropriated $40,200,000 for the 
M113 program, an increase of $20,000,000. Of the increase, $15,000,000 
was only to modify M113 tracked vehicles with reactive armor. The 
authorization conference legislated that $35,200,000 of the $40,200,000 
may only be used for the procurement and installation of M113 upgrade 
kits. The remaining $5,000,000 was to procure driver night viewers as 
directed by the appropriation conference. What is the status of the 
$15,000,000 appropriated for reactive armor?
    Answer. The Department of the Army intends to fully comply with the 
law on this issue. The Army notified the House and Senate Appropriation 
Committee Chairmen on December 5, 1997, of its intent to use funds for 
the M113A3 upgrade kits as directed by statutory language contained in 
Section 113 of the National Defense Authorization Act for Fiscal Year 
1998. Currently, these funds are on withhold at the Office of the 
Secretary of Defense pending resolution of this issue.
    Question. Does the Army have a requirement for reactive armor on 
the M113?
    Answer. The Army does not have a requirement for M113 reactive 
armor.
    Question. If the Army were to begin a M113 reactive armor 
modification program, what would be the acquisition strategy? What 
would be the cost of such a program?
    Answer. The Army does not have a requirement for M113 reactive 
armor tiles and thus does not support funding for tiles at the expense 
of M113A3 conversion kits. However, a strategy to achieve a reactive 
armor capability on an M113 platform would require: two years of 
Research, Development, Test and Evaluation (RDTE) funding ($3,500,000 
in the first year and $7,500,000 in the second) to modify and test 
commercially available armor packages and to make vehicle modifications 
in order to accommodate the increased weight of the tiles; and two 
years of procurement funding ($33,600,000 in the first year and 
$6,500,000 in the second), starting the second year of the RDTE effort, 
to buy enough armor tiles for 96 vehicles (three battalion sets) and to 
buy and install the associated vehicle application kits.

                    Light Tactical Wheeled Vehicles

    Question. The Army is requesting $12,100,000 in fiscal year 1999 to 
procure High Mobility Multipurpose Vehicles (HMMWV). The Army is also 
requesting $24,800,000 to begin a HMMWV extended service program. 
Recently, we received budget documentation supporting a multiyear 
contract for the HMMWV extended service program. Why are you requesting 
the authority to proceed with a multiyear contract since it does not 
meet the criteria legislated in the fiscal year 1998 Appropriations 
Act.
    Answer. The value of the HMMWV extended service program multiyear 
contract as presented in the budget exceeds $500,000,000, which is the 
threshold for seeking multiyear procurement authority from Congress. 
However, due to the high unit cost of a remanufactured HMMWV, the Army 
does not intend to execute this contract.

    (Clerk's note.--The fiscal year 1998 legislation directed 
that all multi-year procurement requests must be submitted with 
the President's budget request. The President did not request 
approval for a HMMWV-ESP multi-year contract in the request 
submitted to the Congress. The Army requested approval during 
the budget hearings.)

    Question. Last year, the Army requested funds to develop a new 
light tactical vehicle. Since the Army had not completed its light 
tactical wheeled strategy, the Congress denied/terminated the program. 
Instead, Congress provided funding to procure HMMWVs to meet inventory 
shortfalls. Have you completed your light tactical wheeled strategy?
    Answer. No, we have not. Our Light Tactical Wheeled Vehicle 
Analysis of Alternatives (AoA) will be completed no earlier than 
December of 1998.
    Question. If so, please summarize the strategy.
    Answer. Our analysis is not complete.
    Question. Does the budget request sustain the industrial base? If 
not, what is the impact?
    Answer. No, it does not. The impact on AM General is dependent upon 
the amount of purchases by other Services, Foreign Military Sales, 
commercial and direct sales.
    Question. For the record, please provide the following for each 
alternative evaluated by the Army; the requirement; estimated 
development and procurement cost; estimated operations and support 
costs; and proposed schedule.
    Answer. The Army's Light Tactical Wheeled Vehicle Analysis of 
Alternatives is not complete. We will not have that detailed 
information until at least December 1998.
    Question. What is the Army's acquisition objective for HMMWVs?
    Answer. The acquisition objective exceeds 119,000 vehicles.
    Question. Does the fiscal year 1999 budget satisfy the Army 
requirements for HMMWVs? If not, what are the shortfalls?
    Answer. No, the Army will still be short over 17,000 vehicles.
    Question. The Army is requesting $24,800,000 for a HMMWV extended 
service program (ESP). The Marine Corps planned on a HMMWV ESP. After 
evaluating the cost and capabilities of such a program, the Marine 
Corps decided it made more sense to procure new vehicles. Why would the 
Army want HMMWV ESP's rather than new vehicles?
    Answer. The Army originally wanted to remanufacture basic HMMWVs 
into the A2 configuration with some corrosion resistance enhancements. 
This did not prove to be a cost-effective means of modernizing the 
fleet. Therefore, we are asking the Congress to authorize and 
appropriate these dollars into the HMMWV production line.
    Question. What is the condition of the Army's HMMWV fleet?
    Answer. It is generally good with readiness rates of about 95 
percent. This is one of the reasons why we now want to postpone the 
Remanufacturing effort.
    Question. What is the Army's acquisition plan for the HMMWV ESP?
    Answer. We are postponing any plans to remanufacture HMMWVs.
    Question. What is the unit cost of the HMMWV ESP program?
    Answer. We estimate the current hardware cost of taking a basic 
HMMWV to a near A2 configuration to be approximately $45,000.
    Question. What are the performance objectives of the HMMWV ESP?
    Answer. As I stated earlier, we planned to remanufacture basic 
HMMWVs into a near A2 configuration with some corrosion resistance 
enhancements.
    Question. What is the unit cost of producing new HMMWVs?
    Answer. The hardware cost for an M1097A2 in FY99 is $55,000.
    Question. Has the Army decided on the configuration for the HMMWV 
ESP? When will the configuration study be complete?
    Answer. We no longer intend to do the HMMWV ESP program in Fiscal 
Year 1999.
    Question. When do you anticipate awarding the HMMWV ESP Program? 
Will it be completed?
    Answer. We do not intend to pursue the HMMWV ESP program Fiscal 
Year 1999 and would like the Congress to put these dollars into the 
HMMWV production line.
    Question. Does your research and development budget include funds 
to develop a new tactical wheeled vehicle? If so, how much? What is the 
total funding required to complete the program?
    Answer. As I have stated earlier, we have abandoned our efforts to 
develop a new light tactical vehicle. There is an ongoing effort in the 
National Automotive Center called the Commercially Based Tactical Truck 
(COMBATT) program. This program is exploring the feasibility of 
modifying production vehicles to meet the HMMWV performance 
specifications. Ford, General Motors, Chrysler and AM General are 
participating in this program.

                   Family of Medium Tactical Vehicles

    Question. The Army is currently procuring the Family of Medium 
Tactical Vehicles (FMTV), 2.5 and 5 ton trucks, to replace those that 
have been in the fleet for over 20 years. The Army is requesting 
$336,000,000 for fiscal year 1999 for FMTV. During the past year, the 
Army has developed a new acquisition plan to develop a second FMTV 
producer. Dr. Oscar, please explain the Army's strategy for developing 
a second FMTV producer.
    Answer. Beginning in fiscal year 1998 we will award up to two pre-
production qualification contracts to qualified military, truck 
manufacturers. We will provide the winners vehicles, technical manuals, 
technical drawings and test reports. The winners will build pre-
production qualification vehicles that will be tested against the 
FMTV's performance specifications that include requirements for 
maintaining the fleets' high commonality of parts and components. At 
the conclusion of the testing, the Army will down select to a single, 
second source contractor in fiscal year 2000.
    Question. What is the status of the FMTV competition?
    Answer. We plan to publish our second source synopsis in Commerce 
Business Daily in March 1998. We will follow this with a draft Request 
for Proposals (RFP) 15 days later. The Army will convene an Industry 
Day to meet with potential bidders 15 days after draft RFP. Fifteen 
days after Industry Day we will release the RFP. We intend to award up 
to two contracts in the fourth quarter of this fiscal year.
    Question. What is the cost of the competition program?
    Answer. The anticipated cost of the second source pre-production 
qualification program is about $14,000,000.
    Question. Who is paying the cost associated with the development of 
a second source?
    Answer. All costs associated with the development of a second 
source are paid from the FMTV program line.
    Question. Is your new acquisition plan adequately funded in the 
budget?
    Answer. The acquisition plan is executable within the Army's 
current funding.
    Question. Last year, the Congress provided the authority to proceed 
with a second multiyear for FMTV. Have you awarded the new multiyear 
contract?
    Answer. No, the award is now planned for April 1998.
    Question. What is the value of the multiyear contract?
    Answer. Subject to final negotiation, the value of the multiyear 
contract is $1,734,000,000.
    Question. What are the anticipated savings?
    Answer. The anticipated savings of executing a multiyear contract 
versus annual contracts are estimated to be $130,000,000 or 6.4 percent 
of the value of the contract.

                           Ammunition Program

    Question. Last year, the Congress provided $1,040,000,000 for the 
procurement of ammunition. This represented an increase of over 
$200,000,000 to the fiscal year budget request. The additional funds 
were provided to adequately modernize the ammunition inventory and 
preserve the industrial base. The Army's fiscal year 1999 budget 
request for ammunition is $1,010,000,000. Does the Fiscal Year 1999 
budget request adequately fund the Army's requirement for ammunition 
and sustain the capabilities of the industrial base?
    Answer. The Fiscal Year 1999 Budget request adequately funds Army 
ammunition requirements for training (with a modest drawdown of war 
reserve stocks) and provides a modest improvement in the Army's war 
reserve stockpile by funding M829A2 120MM tank ammunition, M934A1 120MM 
Mortar Ammunition, SADARM, and HORNET (Wide Area Munition). It funds 
the Armament Retooling and Manufacturing Support initiative at a 
minimum level and provides modest funding for Army's industrial base. 
The Army was unable to fund VOLCANO, XM915 105MM DPICM Howitzer 
cartridge, 25MM M919 APFSDS cartridge and the Selectable Light Weight 
Attack Munition within its current funding levels, and was unable to 
fully fund the training pipeline. There are recognized weaknesses in 
the overall industrial base in medium caliber metal parts, explosives 
manufacturing, and fuze components, which are not addressed by the 
fiscal year 1999 budget. The Army believes its appropriation represents 
a balanced program given current funding constraints, and represents an 
acceptable level of risk.
    Question. The Army's annual consumption of training ammunition is 
approximately $900,000,000. The fiscal year 1999 budget request for 
both training and war reserve ammunition is $827,000,000. As a result, 
the Army must use war reserve ammunition to support training 
requirements. Does this concern you? Why?
    Answer. The drawdown of selected war reserve stocks to support 
training is a minor concern of the Army in fiscal year 1999. This is 
because the Army's drawdown in fiscal year 1999 is primarily in 
munitions that are currently excess to the Army's needs. A few 
stockpile munitions used to supplement training in Fiscal Year 1999 
budget request will require eventual replacement.
    Question. The Fiscal Year 1999 budget provides funding for only 
four of the fourteen munitions required to modernize the Army's 
ammunition inventory. When does the Army plan on buying the remaining 
munitions required to modernize its inventory? What is the impact of 
the Army's decision not to procure all of the munitions required to 
modernize its inventory?
    Answer. The Army has already completed its buy of 6 modern 
munitions and is deferring continued production of a seventh until a 
newer version is available. Three items currently in short supply (Wide 
Area Munition, Sense and Destroy Armor Munition, and 120MM Mortar High 
Explosive Cartridge with Multioption Fuze M934A1) are procured in the 
Fiscal Year 1999 budget. Two additional items (Selectable Lightweight 
Attack Munition and the M919 25MM cartridge) are programmed for 
procurement in future years. This leaves two munitions, the VOLCANO, 
and the XM915 105MM Howitzer cartridge, which are not in the budget 
request or programmed for future procurement. The current program 
attempts to balance the risk of deferring procurement of some 
modernized munitions against the projected requirements for near-term 
readiness. The Army believes it has struck the best balance possible 
given current budget constraints.

                          Wide Area Munitions

    Question. The Wide Area Munitions (WAM) program was restructured in 
fiscal year 1997. The Congress provided a funding to minimally sustain 
funding of the basic WAM until the improved system was fielded. What is 
the status of the basic Wide Area Munition program?
    Answer. The Army has awarded a basic fiscal year 1996 contract with 
options for fiscal years 1997 and 1998. The contractor is presently 
buying parts and preparing to assemble units. The first delivery is 
scheduled for March 1999, but an early delivery in late 1998 is 
possible.
    Question. What was the estimated cost of the basic Wide Area 
Munition?
    Answer. The original estimated cost of WAM in fiscal year 1998 was 
$69,000 per unit. This was before any contract had been signed. It also 
was before the restructuring of the program by Congress reduced 
production quantities.
    Question. What is the new cost of the basic Wide Area Munition? Why 
has it increased?
    Answer. The new procurement cost for the basic Wide Area Munition 
in fiscal year 1998 is $202,432. The fiscal year 1997 President's 
Budget estimated 215 units could be produced in fiscal year 1998. This 
estimate was developed with a learning curve model using higher 
production quantities for fiscal years 1996 and 1997 than were actually 
funded, and before production was initiated to validate the learning 
curve model and material costs. The low funding levels in fiscal years 
1996 through 1998 have resulted in very inefficient production buys. 
This situation can be expected in a low-rate production environment. 
Actual contract award data and the realities of low-rate production 
have been factored into the new learning curve model which now yields 
more realistic unit cost projections. Given the funding available in 
fiscal year 1998, the quantity of 74 is consistent with the new 
learning curve. Wide Area Munition production funding was reduced by 
$9,300,000 in fiscal year 1997, $3,600,000 in fiscal year 1998, and 
$5,600,000 in fiscal year 1999 at Congressional direction. In fiscal 
year 1998, the Army initiated a Producibility Enhancement Program (PEP) 
to reduce unit costs in the future. These actions have decreased the 
amount of funds available for hardware and delayed the Wide Area 
Munition advancement along its learning curve.
    Question. How will you resolve your production problem?
    Answer. There is no production problem. Delays in deliveries have 
resulted from a contractual effort to consolidate the fiscal year 1996, 
1997 and 1998 buys to make the production economically viable.

                 Storage and Maintenance of Ammunition

    Question. The Army is responsible for the storage and maintenance 
of all conventional ammunition. In the past, the Army has budgeted 
$300,000,000 for this activity. This year you are requesting 
$400,000,000. Why did it increase? Does this fully satisfy the 
Department of Defense requirement? If not, what are the shortfalls?
    Answer. It must be recognized that the Army's Fiscal Year 1999 
Budget Request for storage and maintenance supports management of both 
the conventional ammunition stockpile and the toxic chemical munitions 
stockpile awaiting demilitarization. The increase in ammunition 
requirements in fiscal year 1999 is primarily attributable to rate 
increases that affect the entire ammunition program. This funds the 
Toxic Chemical Program at 100 percent and the conventional ammunition 
Program at 98 percent. This minor shortfall effects a minimal amount of 
maintenance and in-house automated systems development.

         Sales of Excess, Obsolete, or Unserviceable Ammunition

    Question. In fiscal year 1998, Congress passed legislation allowing 
the Army to sell excess, obsolete, or unserviceable ammunition. The 
Joint Authorization conference directed that the Army conduct a review 
of sales under this legislation. Please describe how the Army plans to 
implement the program.
    Answer. On February 3, 1998, the U.S. Army Industrial Operations 
Command (IOC) published a Commerce Business Daily notice to announce a 
market survey to interested companies. This survey requested companies 
to provide the kinds and types of ammunition or ammunition components 
they would be interested in purchasing.
    IOC's initial survey was open for thirty days. To date, IOC 
received nine valid responses. IOC will not determine if these 
respondents meet the requirements for sale under the direct sales 
legislation. Most of the responses IOC received were requests for 
additional information from political groups, requests for ammunition 
from individuals, requests to buy serviceable ammunition which is in 
short supply (e.g., blank ammunition and 9 millimeter), or requests 
that did not meet the sales criteria of this legislation.
    To implement this initiative in the future, IOC will list excess or 
obsolete ammunition for sale on its direct sales web site. Qualified 
purchasers must register to access IOC's Web site. This site will show 
the type of ammunition available for sale, quantity, weight, condition 
code, and asking price--based on a fair market value analysis. In 
addition, this Web site will allow any qualified purchaser to identify 
stocks that they are interested in, thereby eliminating the need for 
future market surveys. The contractual language for these sales will 
include a ``Hold Harmless'' agreement as required by the direct sales 
legislation.
    Per the legislation, the Army Audit Agency will schedule a review 
of sales that Army makes under this legislation to ensure Army's 
compliance. The Army Audit Agency is required to provide a report to 
Congress no later than 180 days after the end of each of then next 3 
fiscal years.

                            Tactical Radios

    Question. The Army is requesting $11,000,000 to develop the Near-
Term Digital Radio (NTDR). The Army plans on having a competition 
between the current radio, EPLRS, and the NTDR in fiscal year 2000. 
However, the Army is also requesting $15.6 million to develop a follow-
on radio, the Joint Tactical Radio System (JTRS). Please explain the 
Army's strategy for competing the Near Term Digital Radio (NTDR) and 
Enhanced Position Location Reporting System (EPLRS) radios. What 
criteria will be used to determine the winner?
    Answer. In fiscal year 2000, the Army plans to procure a data radio 
to suppoprt continued modernization fielding for Army's Force Package 
One units. The current requirement is for 2,941 data radios to fill the 
gap in Army digitization requirements until a fieldable Joint Tactical 
Radio System (JTRS) with a wideband waveform is available. For the 
First Digitized Division/First Digitized Corps (FDD/FDC), the EPLRS 
radio provides the tactical internet data backbone. For the FDD, the 
NTDR is the TOC-to-TOC data-hauler between battalion and brigade 
tactical operations centers (TOCs). The Data Radio is a system that 
will be capable of being upgraded via software and will be scaleable to 
the JTRS architecture. Our preliminary strategy of looking at a limited 
competitive procurement in fiscal year 2000 enables the Army and OSD to 
obtain a better value data radio. We will continue to review this 
strategy as our future digitization needs evolve. The strategy for 
competing the data radios will be a limited competition based on best 
value with the criteria being developed in fiscal year 1999 being based 
on operational requirements (mission need statement/operational 
requirements documents), cost, and supportability.
    Question. How many radios will the winner produce?
    Answer. Up to 2,941 data radios will be procured from the limited 
competition between Enhanced Position Location Reporting System (EPLRS) 
and Near Term Digital Radio (NTDR) in fiscal year 2000 for the data 
radio backbone at brigade level. The Data Radio Army Acquisition 
Objective is 8,157 and a total of 5,216 EPLRS will have been procured 
by fiscal year 1999.
    Question. The original target value of the Near Term Digital Radio 
(NTDR) contact was $12,000,000. Today the government's estimate to 
complete is $39,700,000. What caused the increase?
    Answer. The NTDR increase to the Cost Plus Incentive Fee portion of 
the contract (increase from $12,000,000 to $27,400,000 or $15,400,000) 
was caused primarily by prime and subcontractor underestimates. Of this 
amount, the Government is responsible for $10,000,000 and the 
contractor is liable for an estimated $5,400,000. Risk reduction 
measures, and minor design changes (communications security (COMSEC) 
and functionality) have also contributed to the increased cost. The 
remaining $12,300,000 is attributable to Government-directed changes 
(new work efforts) for information security (INFOSEC), Multicast, and 
Division XXI.
    Question. Who will pay for the increase?
    Answer. The government and the contractor share the increases to 
the basic portion of the contract--government pays $10,000,000; the 
contractor pays $5,400,000. Government-directed changes for new work 
are not subject to cost sharing; the government pays the full 
$12,300,000 for these changes.
    Question. Is the increased cost included in your budget request?
    Answer. Yes. the current program budget is sufficient to cover 
program completion.
    Question. What is the Enhanced Positioning Location Reporting 
System (EPLRS) unit cost?
    Answer. The contract cost of the EPLRS receiver/transmitter (RT) 
was reduced from $40,000 to $27,969 as a result of the value 
engineering change proposal (VECP) and Multiyear Contract acquisition 
strategy. Option buy for fiscal year 1998 was awarded with a unit cost 
of $26,450.
    Question. To date, how many Near Term Digital Radio (NTDR) 
development radios have you procured? How many will you procure in 
fiscal year 1999 in support of testing? What is the unit cost of NTDR 
development radios?
    Answer. In fiscal years 1996/1997, 20 developmental prototypes were 
procured followed by 110 NTDRs for testing. No NTDR radios are budgeted 
for procurement in fiscal year 1999. However, in fiscal year 1998, 80 
NTDRs are planned for procurement for testing. IN fiscal year 1999, the 
NTDR radios will be tested as part of the Force XXI Battle Command 
Brigade and Below (FBCB2) Initial Operational Test and Evaluation 
(IOT&E). The hardware unit cost for the 110 radios (radio and antenna 
only) was $9,900 on the Firm Fixed Price portion of the contract.
    Question. Since the cost of the Near Term Digital Radio (NTDR) 
program quadrupled, do you think it would have made more sense to 
forego the competition and just buy Enhanced Position Location 
Reporting Systems (EPLRS)? Why?
    Answer. Continuation of the Near Term Digital Radio program 
provides key insights into new technology. It also provides a critical 
data hauler for our Tactical Operation Center (TOC)-to-TOC radio 
requirements. In addition, the hardware unit for the NTDR is 
significantly less than the unit cost of EPLRS (i.e., currently $9,900 
versus the EPLRS cost of $26,450), and the bandwidth provided by the 
NTDR is nearly 500 percent more than EPLRS bandwidth.
    The potential future EPLRS/NTDR competition enables the Army and 
OSD to obtain a better value data waveform radio until a fieldable 
Joint Tactical Radio System with a wideband data waveform is available.
    Question. Recent testing concluded that the Enhanced Position 
Location Reporting System (EPLRS) radio had not demonstrated its 
effectiveness for transmitting long message. What does this mean for 
the digitized force?
    Answer. No impact. The Director of Operational Test and Evaluation 
(DOT&E) Initial Operational Test and Evaluation (IOT&E) report and the 
Army's agreed in terms of the major conclusions--that EPLRS is 
considered operationally effective and suitable at communicating the 
type of Army Tactical Command and Control System (ATCCS) messages used 
during the IOT&E. DOT&E Also reported the IOT&E was not adequate to 
assess EPLRS' ability to carry the larger TOC-to-TOC type messages seen 
in the subsequent ATCCS VI test. The Army has no intent to use EPLRS to 
carry the TOC-to-TOC type data seen in the ATCCS VI test. Therefore, 
after reviewing the issue with DOT&E and ASD(C31) all agreed to 
proceeding with the EPLRS full rate production (FRP) units called for 
in the Army's February Acquisition Decision Memorandum. These radios 
will be used to carry the time-sensitive type of ATCCS data tested in 
the IOT&E and for position location data. Additionally, radios will be 
reallocated to support the continued experimentation and testing 
associated with the Army's digitization program to include the Tactical 
Internet. The FRP radios will have increased capabilities (e.g., double 
current data rates, ability to provide bandwidth, externally 
reprogrammable) and a significantly reduced price (i.e., contract price 
less than $28,000 per unit).
    Question. When will you test the systems ability for transmitting 
long messages?
    Answer. There is no need for this test unless the Army decides to 
use the EPLRS to carry the larger TOC-to-TOC type messages.
    Question. According to your budget documents, the Joint Tactical 
Radio System (JTRS) program was funded in fiscal year 1998; however, 
the Congress never appropriated funds to the Army for that program. 
Please explain?
    Answer. The intent of the JTRS program is to comply with 
congressional language to better manager radio procurements within the 
DOD. The preliminary efforts associated with organizational definitions 
and mission development are being accomplished by representatives of 
the three services as a special task force effort, pending 
congressional recognition as a New Start program. Consequently 
participating service personnel are being funded from their respective 
permanent duty stations. All participating personnel are employed by 
project or headquarters staff offices that have a direct interest in 
the future JTRS program. A Program Budget Decision (PBD) 704 directed 
services to identify funds to support the beginning of this program for 
fiscal years 1998 and 1999. OSD Comptroller designated the funds to be 
allocated under the Science and Technology Budget Activity 3 and 
directed that the lead Service (Army) begin a request for above 
threshold reprogramming and request new start authority from Congress. 
The Army has been waiting for final line item designated program 
offsets from the other Services before forwarding reprogramming action. 
Budget documentation reflected the Army's support for the JTRS in 
accordance with the PBD. The budget submission timelines came earlier 
than the delayed reprogramming action and new start request.
    Question. To date, have you obligated funds for the JTRS program?
    Answer. No.
    Question. When do you plan on giving Congress the new start 
notification?
    Answer. Prior to obligating any funds for this effort, we realize 
Congress must approve Request for Reprogramming Action first.
    Question. When will the Joint Tactical Radio System (JTRS) be 
fielded?
    Answer. JTRS will be a spiral development with incremental 
capabilities available every 12-18 months. Architecture compliant 
prototypes for increment one will be available in fiscal year 2000 and 
service production and fielding will follow. Based on historical data 
for other tactical radio programs, planning time is 12-18 months 
minimum from prototype to production delivery. Architecture compliant 
prototypes of the wideband waveform form, fit, and function capability 
will be available in fiscal year 2002/03. The raw prototype with 
wideband waveform and networking would require some manufacturing 
development and testing in fiscal year 2004/05. This schedule assumes 
that Congress will approve DoD's Request for Reprogramming and new 
start approval for JTRS by 3rd quarter of fiscal year 1998.
    Question. What is the estimated cost of the development program?
    Answer. Joint Tactical Radio System (JTRS) is an aggressive 
acquisition program that will replace a wide range of existing single 
function radios with an integrated, interoperable, multimode, multiband 
system. Acquisition reform offers some fantastic opportunities to do 
things faster and cheaper than we ever have before. JTRS is using an 
incremental development and demonstration strategy. The Department is 
planning to meet the challenges of evolving requirements and advancing 
technology through ``spiral development.'' Spiral development is a 
process that uses short, incremental developments to shorten the 
development cycle and speed product to the filed. Each of the 
increments builds on previous increments. This approach will also allow 
us to leverage and integrate developments in commercial technology.
    Over the Program Objective Memorandum (POM) years, we estimate 
research and development to be $232,500,000. The Army is postured to 
buy JTRS beginning in fiscal year 2000 if a wideband waveform variant 
is developed by then. However, we do not expect a wideband variant 
until the third increment of development in fiscal year 2004. We 
estimate Army procurement for wideband data radios over the POM years 
to be $310,600,000; of which we expect $169,000,000 to buy and field 
JTRS. Out year funding depends on the size and shape of the Army and 
DoD which will drive the volume of the buy and cost per unit. If 
applied across all services by fiscal year 2015, total procurement 
costs may be in the range of $5,000,000,000.
    Question. If additional funds were provided, could the Joint 
Tactical Radio System (JRTS) be accelerated? Please explain.
    Answer. Yes, if additional funds are provided, the prototype phase 
(if required) and the Increment Two of the JTRS architecture 
development phase could be accelerated by about six months. However, 
there are significant unknowns in the JTRS cost estimate. The DOD has 
chosen to fund Increment One of JTRS architecture development at the 
``low'' level--approximately $34,500,000. If a prototype is required in 
fiscal year 1999, then the ``high'' level cost estimate becomes a 
reality, and additional funds would be needed in fiscal year 1999 to 
accelerate the JTRS program versus waiting for fiscal year 2000 
funding. If a prototype phase is not required, then the additional 
funds could be used to accelerate Increment Two.

                    Year 2000 (Y2K) Computer Problem

    Question. One of the problems that we face as we enter the next 
century is older computers that one only programmed to remember the 
last two digits in a year. Thus they remember 1997 as simply `97'. The 
year 2000, however, will be saved as `00', the same as the year 1900. 
This can lead to calculation errors and system failures. How serious is 
this problem for the Army? What would be the impact if your Mission 
Critical Systems were not corrected by the year 2000?
    Answer. The Army is dependent on information technology and Y2K 
poses a significant threat to our operations. If our Mission Critical 
Systems are not corrected in time we will experience a degradation in 
our ability to perform our core business functions. Command and 
control, communications, logistics, personnel, financial, intelligence 
and other information systems are all impacted.
    Question. How many systems does the Army have to evaluate and where 
do they stand in the process of assessment, renovation, validation and 
implementation?
    Answer. As of January 1998, the Army had identified 12,240 systems 
that require repairs due to Y2K: 239 are Major Army systems, of which 
120 are identified as Mission Critical; 12,001 are Other Army systems. 
The vast majority of these are in the renovation or later stages of the 
process, including all of our Mission Critical Systems. Major Army 
systems are Mission Critical systems, migration systems, legacy 
systems, any system with a $2,000,000 total cost per year, and any 
system that interfaces with a system that meets any one of the previous 
criteria. Examples of Major Army systems that are not Mission Critical 
include the Black Hawk Flight Simulator and the Apache Mission Trainer. 
Mission Critical systems are systems that when their capabilities are 
degraded, the organization realizes a resulting loss of core 
capability. Examples include the Apache Attack Helicopter, The Army 
Total Asset Visibility System, and The Standard Installation/Division 
Personnel System--3 (SIDPERS-3). Other Army systems are major command 
and installation systems. Examples include the Airborne Student Account 
Program System, The Command and General Staff College Nonresident 
Instruction System, and the Combined Arms Services and Staff School 
System.
    Question. Are there any systems, particularly Mission Critical 
Systems, whose Year 2000 efforts could be improved with additional 
funding? If so, which systems are they, how much money would you need, 
and how would the money be used?
    Answer. The Army can always use more money. The Army worked very 
hard to develop a balanced budget for fiscal year 1999 and the 
President's Budget adequately reflects that effort. We have been very 
successful in reprioritizing resources to solve our Y2K problems. While 
there are programs that will experience delays in their original 
modernization plans in order to make their hardware and software Y2K 
compliant, we do not see any show stoppers at this time.
    Question. Has your organization appointed a Year 2000 program 
manager and established an agency-level program office to manage and 
coordinate your Year 2000 program activities?
    Answer. Yes, Mr. William Dates is the Army's Year 2000 Program 
Manager and his office is an integral part of the Army CIO's staff.
    Question. Have you completed a service-wide inventory of 
information systems?
    Answer. We have found that this is a process of discovery. The Army 
is a very large organization in an almost constant state of change. We 
are confident that we have inventoried all of our Major systems. 
However, in each of the last three quarterly reports our inventory of 
Non-Major Systems and IT-controlled devices has increased. There are 
probably still a few unknown Non-Major systems and devices out there. 
We are aggressively searching for them all.
    Question. Have you deferred or canceled any new system development 
efforts in order to reprogram the funds to achieve Year 2000 compliance 
with an existing Mission Critical System? If so, which systems were 
deferred or canceled?
    Answer. We haven't canceled any programs to fund fixes for a 
different, more critical system. However, many program managers are 
deferring required capabilities within their own programs to fund the 
Y2K fixes first.
    Question. Have you developed contingency plans for Mission Critical 
Systems?
    Answer. This process is not yet completed. 60 percent of the 
Mission Critical Systems requiring repair have contingency plans. The 
Army CIO has published a policy directing all non-compliant Mission 
Critical Systems to develop a contingency plan by 1 June 1998.
    Question. Overall, are you confident of the Army's ability to 
correct this problem before the year 2000?
    Answer. Yes. We are committed to ensuring the Army is ready to 
deploy, fight, win and take care of its soldiers and families now and 
in 2000 and beyond.

          Information Technology Management Reform Act of 1996

    Question. The Information Technology Management Reform Act of 1996 
(known as the Clinger-Cohen Act) requires each agency to make specific 
changes in how they select and manage information technology programs. 
Among other steps, this includes performing an analysis of 
alternatives, a cost-benefit analysis and identifying specific 
performance measures. What steps has the Army taken to come into 
compliance with the Clinger-Cohen Act?
    Answer. Once the Clinger-Cohen Act was enacted, the Secretary of 
the Army immediately designated the Director of Information Systems for 
Command, Control, Communications, and Computers (C4) as the Chief 
Information Officer (CIO) of the Army. The Secretary has approved the 
CIO Implementation Plan, which provides a roadmap as to how the Army 
will accomplish the CIO mission. The CIO is an active participant in 
the Army's major processes, e.g., resource management, acquisition, and 
digitization. He has defined an overall C4/Information Technology (IT) 
investment strategy that successfully programs the best, affordable C4/
IT solutions for the warfighter for the 21st century. He has developed 
an IT architecture to improve interoperability and reduce costs, both 
at the tactical and infrastructure levels. He has established an 
effective information security program. He validates all warfighting 
requirements against such CIO criteria as the architecture, emerging 
technologies, business process reengineering, performance measurements, 
and information assurance. He is the Headquarters, Department of Army 
functional proponent for business process reengineering with a C4/IT 
impact. He serves as a member of both the Federal and Defense CIO 
Councils. Although the Army has much to do, our accomplishments are, 
nonetheless, considerable.
    Question. Is the Army now in compliance with this Act?
    Answer. Yes. Among other actions, the Army developed an Information 
Technology strategic plan and investment strategy. It also performs an 
analysis of alternatives as part of its acquisition strategy prior to 
Milestone II; it completes a cost-benefit analysis at each milestone; 
and it identifies its specific (outcome-oriented) performance measures 
in its requirement documents. These measures are evaluated at each 
milestone.
    Question. What improvements has the Army seen as a result of the 
Clinger-Cohen Act?
    Answer. As a result of a comprehensive Army Enterprise 
Architecture, we now have systems which are more interoperable--from 
the installation to the battlefield. The Army leadership has a better 
understanding of the importance of Information Technology (IT), both in 
IT dedicated systems and IT embedded in systems. The CIO is more 
involved in all levels of the resource and acquisition processes. The 
CIO provides a more comprehensive assessment of IT investments through 
its investment strategy, the use of architectures to build integrated 
IT systems, and its CIO assessment of systems during the acquisition 
process. By evaluating all Army IT systems, redundant areas have been 
identified and corrected. This has contributed to realizing a better 
return on Army investments.
    Question. In the last year, as a result of your Information 
Technology (IT) Milestone Reviews, did the Army delay, cancel or 
significantly restructure any of their IT systems? If so, which ones?
    Answer. There have been no cancellations of Information Technology 
(IT) programs as a result of Chief Information Officer (CIO) reviews of 
IT acquisitions. Through other prioritization processes (e.g., the 
program and budget), resources may have been redirected from IT 
systems/programs to weapons and infrastructure programs. Any changes 
that occurred are being reevaluated in the fiscal years 00-05 Program 
cycle. The purpose of CIO reviews is to ensure compliance with the 
Clinger-Cohen Act so that IT programs comply with the integrated 
technology architecture and promote effective and efficient designs.
    Question. What documentation does your review panel require for 
each milestone review?
    Answer. Documentation requirements for all major programs are 
outlined in Department of Defense (DoD) Regulation 5000.2-R, Mandatory 
Procedures for Major Defense Acquisition Programs (MDAPS) and Major 
Automated Information Systems (MAIS) Acquisition Programs and Office of 
the Secretary of Defense Memorandum, Information Technology (IT) 
Investment Management Insight Policy for Acquisition. All programs that 
meet ACAT I or ACAT IA criteria, listed in the DoD Regulation, are 
required to submit the following items prior to receiving Milestone 
Decision Authority concurrence to proceed into the next phase:
          Acquisition Program Baseline
          Acquisition Strategy
          Analysis of Alternatives
          Acquisition Decision Memorandum
          Affordability Assessment
          Beyond Low Rate Initial Production Report
          Component Cost Analysis
          Component Analysis Requirements Descriptions
          Exit Criteria
          Future Years Defense Program Funding
          Independent Estimate of Life Cycle Cost
          Interoperability Certification
          Live Fire Test and Evaluation Waiver
          Live Fire Test and Evaluation Report
          Legality of Weapons Under International Law
          Low Rate Initial Production (LRIP) Quantities
          Manpower Estimate
          Mission Needs Statement
          Operational Requirements Document
          Overarching Integrated Product Team (OIPT) Leader's Report
          OIPT Staff Assessments
          Program Office Estimate
          System Threat Assessment
          Test and Evaluation Master Plan
          Test Results
          CIO Assessment Memorandum
    Some of these elements are not appropriate for all programs and 
will not be required. For example, live fire testing, threat 
assessments, and LRIP authorizations are normally not required for IT 
programs. In accordance with DoD policy, MAIS acquisitions will be 
streamlined and tailored to the maximum extent possible through DoD 
concurrence and guidance. The CIO assessment is required by the 
Clinger-Cohen Act and will be addressed during any program review.
    Question. In conducting these reviews (reference question 154), how 
many involved an actual meeting of the senior decision makers, and how 
many were paper reviews.
    Answer. The Army Major Automated Information System Review Council 
(MAISRC) has not done any paper reviews in the past year. Senior Army 
leadership has chaired and attended two formal MAISRC meetings. OSD 
staff principals have also participated in these reviews. The OSD 
MAISRC has not done any paper reviews of Joint programs where the Army 
was a part of the program. OSD principals have chaired three OSD 
MAISRCs. The significance of the low number of reviews (either paper or 
formal) is a testament to the success of the Integrated Process Team 
(IPT) concept that we have been using for program oversight. This 
teaming process has brought together members of the program offices, 
Army staff elements and OSD principals in a collaborative environment 
to help solve problems and guide the program manager. The success of 
the IPTs has reduced the number of formal MAISRC actions and 
streamlined the entire acquisition process. In most cases the IPT 
process has not eliminated the requirement for proper documentation and 
reporting. However, the oversight principals now participate in the 
development of the program and the OSD leadership has an opportunity to 
be a part of the success of a program.
    Question. Has the OSD MAISRC, in its reviews, delayed, canceled or 
significantly restructured any of the Army's IT systems? If so, which 
ones?
    Answer. There have been no changes to any IT program that resulted 
in any significant impact. Several major programs have been submitted 
to OSD for consideration of delegation to the Army for oversight. For 
the past year, only the Total Army Distance Learning Program was 
delegated from OSD oversight to Army oversight as an ACAT IAC with the 
Army CIO as the Milestone Decision Authority.

                       Chemical Demilitarization

    Question. The Army has the responsibility for destroying all 
chemical warfare related material. The Army is currently constructing 
chemical demilitarization facilities at various storage locations. 
Congress mandated that the 31,493 tons of chemical munitions must be 
demilitarized by 2004. To day, 1,440 tons have been destroyed. The Army 
is requesting $855,000,000 for chemical demilitarization in fiscal year 
1999. What is the progress and status of the Chemical Demilitarization 
Program?
    Answer. The Chemical Demilitarization Program is well underway. Two 
baseline incineration facilities are operational--Johnston Atoll 
Chemical Agent Disposal Systems (JACADS) at Johnston Island in the 
South Pacific and Tooele Chemical Disposal Facility (TOCDF) at Desert 
Chemical Depot in Utah. Over 1,470 tons of agent have been destroyed at 
JACADS, which represents over 72 percent of the original chemical agent 
stored on the Atoll, and over 1,400 tons of agent destroyed at TOCDF, 
which represents approximately 10 percent of the original chemical 
agent stored at Desert Chemical Depot.
    Systems contracts have been awarded for disposal sites at Anniston 
Army Depot, AL and Umatilla Chemical Army Depot, OR. Construction 
efforts are continuing at both sites. Construction of the Anniston 
Chemical Disposal Facility is approximately 15 percent complete and the 
Umatilla Chemical Disposal Facility is approximately 13 percent 
complete.
    The systems contract for the disposal facility at Pine Bluff, AR 
was awarded in July 1997. A protest on the contract award was filed by 
an unsuccessful offeror. The protest was upheld by the General 
Accounting Office in November 1997. A decision resolution of the 
contract award is expected in March 1998. We anticipate receiving 
necessary environmental permits in fourth quarter of fiscal year 1998, 
at which time construction will begin.
    The projects for Pueblo Chemical Agent Disposal Facility and Blue 
Grass Chemical Agent Disposal Facility are on-hold as directed by 
Public Law 104-208 which prohibits baseline facility construction until 
180 days after the Secretary of Defense provides to Congress the final 
report evaluating demonstrated alternative technologies to incineration 
for assembled chemical munitions. This program, the Assembled Chemical 
Weapon Assessment Program, is managed by the Under Secretary of Defense 
(Acquisition and Technology).
    The Army is proceeding to initiate the necessary activities to 
support pilot testing of neutralization-based technologies at the bulk-
only storage sites, Aberdeen Proving Ground, MD and Newport Chemical 
Depot, IN. At present, the Army has entered the procurement process to 
acquire system contractors for these facilities. The Request for 
Proposal (RFP) for the Aberdeen facility was issued in November 1997 
and proposals are expected by early March 1998. The RFP for the Newport 
facility was issued in early March 1998.
    The Army and the Federal Emergency Management Agency (FEMA) provide 
emergency response/preparedness to the communities surrounding the 
eight stockpile storage sites. Army and FEMA signed a new Memorandum of 
Understanding on October 10, 1997 that agrees to give FEMA full 
authority, responsibility, and accountability for managing and 
directing the off-post emergency preparedness. The Army will continue 
to manage the on-post aspects of program and provide technical support 
and expertise to assist FEMA. The Army and FEMA will continue a 
partnership to execute the program and will continue to use integrated 
product teams as a management tool.
    Public Law 102-484 directed the Secretary of the Army to provide 
Congress a report on the Army's plan for destroying all chemical 
warfare materiel that is not part of the chemical stockpile disposal 
program. The Non-Stockpile Chemical Materiel Project (NSCMP) was 
established to carry out this plan. The Project Manager for NSCMP 
continues to support the emergency recovery of chemical warfare 
materiel (CWM), the treatment and disposal plans for future CWM 
recovery efforts, and the preparation of required documentation and 
plans to meet the provision of the Chemical Weapons Convention. As part 
of this program, the binary munitions projectiles, with the alcohol 
component are being destroyed at the Hawthorne Army Ammunition Plant in 
Nevada.
    Question. Which sites are currently operational?
    Answer. Two sites are currently in operation. Johnston Atoll 
Chemical Agent Disposal Facility (JACADS) located on Johnston Island in 
the Pacific Ocean has been in operation since January 1994 and has 
safely destroyed over 72 percent of the original chemical agent stored 
on the Atoll. The Tooele Chemical Agent Disposal Facility, the first 
continental United States disposal facility located at Desert Chemical 
Depot, UT, has been in operation since August of 1996. The Tooele 
facility has safely destroyed over 10 percent of the Depot's original 
chemical agent. To date, these two sites have destroyed over 9.0 
percent of the original United States chemical agent.
    Question. Which sites will be delayed? Why?
    Answer. The program schedule reflected in the fiscal year 1999 
President's Budget remains valid. It should be noted that the program 
schedules for the Pueblo and Blue Grass facilities are on hold as a 
result of Public Law 104-208, the Omnibus Consolidated Appropriation 
Act for Fiscal Year 1997. However, environmental permitting activities 
for incineration-based disposal facilities are continuing in the event 
no viable alternatives are identified. If alternatives are not 
available, a decision to proceed with incineration by Congress is 
needed by June 30, 1999 in order to meet Chemical Weapons Convention 
disposal deadlines.
    Question. Last year, the Congress appropriated $600,000,000 for 
chemical demilitarization. This year you are requesting $855,000,000. 
Your research and development (R&D) budget has tripled and your 
procurement budget is doubled. Why?
    Answer. Primarily, the fiscal year 1999 R&D increase of 
$116,500,000 over the fiscal year 1998 R&D budget request is required 
to support the Alternative Technologies and Approaches Project which 
involves the R&D of two low-temperature, low-pressure technologies for 
the disposal of bulk chemical agents at Aberdeen Proving Ground, MD and 
Newport Chemical Depot, IN. The funding increase is primarily for the 
finalization of the pilot facilities' design; equipment acquisition; 
completion of Resource Conservation and Recovery Act permitting 
process; and the award of the system contracts for the two sites.
    The procurement increase of $68,500,000 over the fiscal year 1998 
procurement budget request can be attributed primarily to equipment 
acquisition and installation at Umatilla Chemical Agent Disposal 
Facility, OR, and Anniston Chemical Agent Disposal Facility, AL.
    Question. This year the budget proposes to fund the chemical 
demilitarization program within the Army. In previous years, funds were 
appropriated to the office of the Secretary of Defense. Why the change?
    Answer. As part of the DoD Defense Reform Initiative, all program 
funding and milestone decision authority for the Chemical 
Demilitarization Program is being devolved from the Office of the 
Secretary of Defense to the Department of the Army. The Defense 
Acquisition Executive will delegate Milestone Decision Authority for 
the Chemical Demilitarization Program to the Army Acquisition 
Executive. Legislative changes to Public Law 99-145 are required to 
allow funds to support the Chemical Demilitarization Program to be 
transferred from Defense accounts to Army.

              Assembled Chemical Weapons Assessment (ACWA)

    Question. Currently, chemical munitions are demilitarized through 
incineration. Congress provided $40,000,000 in fiscal year 1997 to 
identify and demonstrate no less than two alternative technologies. 
When will the alternative technology demonstration be complete?
    Answer. The overall technology demonstration program will be 
complete by the end of calendar year 1998. A status report will be 
provided to the Congress by December 15, 1998, followed with an 
addendum on April 30, 1999. The addendum will coincide with the 
congressionally mandated independent assessment by the National 
Research Council on the technologies demonstrated and any additional 
information generated after December 15, 1998. The ``hands-on'' 
technology demonstration phase within the overall technology 
demonstration program will be from July 1, 1998 to December 15, 1998.
    Question. What will be the total cost of the demonstration program?
    Answer. The total cost of the overall demonstration program is 
estimated at $40,000,000. The technology demonstration phase within the 
overall program is estimated at $24,000,000.
    Question. Does your budget provide sufficient funds to conduct the 
alternative technology demonstration program? If not, what are the 
shortfalls?
    Answer. The $40,000,000 provided to the Congress for the overall 
program was ``to identify and demonstrate not less than two 
alternatives to the baseline incineration.'' In accordance with the 
intent of Congress, the Program Manager for ACWA has conducted the 
program in a manner to demonstrate as many technologies as reasonably 
possible within the challenging timeline desired by the Congress. At 
this point, seven technology candidates are being considered for the 
actual demonstration phase of the overall program. The evaluation 
process is underway to determine how many technology candidates will be 
taken forward and the cost to demonstrate each individual technology. 
As the technologies vary widely, it is anticipated that the individual 
technology demonstration cost will vary from technology to technology. 
At this point, the Program Manager, ACWA does not have adequate 
information to provide a hard estimate. If all seven technologies 
participate, it is likely that an increase on the order of $10,000,000 
may be required to complete the program.

                           Acquisition Reform

    Question. Dr. Oscar, in your statement you declare that as a result 
of acquisition reform ``efficiencies within our operation enable us to 
reinvest savings--in some cases substantial savings--in modernization 
and other high priority needs.'' To date, how much have you saved 
through acquisition reform?
    Answer. During the Program Objective Memorandum (POM) 1998-2003 we 
projected savings of $2,100,000,000, spread over the six-year period, 
as a result of acquisition efficiencies. In addition, last year we 
instituted a Cost Reduction Program (CRP) which will begin generating 
savings in 1999. The CRP is expected to produce $458,000,000 in savings 
over the remaining five years of the POM 98-03. Additional savings 
reported earlier are a combination of actual savings and cost avoidance 
for an extensive period including the POM and beyond. This period runs 
until the end of all projected life cycle savings (more than 20 years).
    Question. Please give us some examples of some of the areas you 
have achieved efficiencies?
    Answer. The Army has undertaken a number of initiatives to 
implement acquisition reform. We have simplified acquisition 
procedures; we are using commercial practices, performance based 
contracting and electronic commerce; and we are streamlining and 
integrating processes. We are working with Defense Contract Management 
Command (DCMC) in streamlining and standardizing manufacturing/business 
processes at contractor plants under the Single Process Initiative. In 
essence, we are taking several steps to reduce overhead and barriers to 
acquisition reform.
    Question. In which modernization programs did you reinvest those 
savings?
    Answer. As you know, readiness is of primary importance to the Army 
leadership. To help improve the readiness of the forces, most of the 
savings due to efficiencies gained within the acquisition community 
were provided to the Army leadership as discretionary savings and were 
allocated into the Operations and Maintenance, Army (OMA) and Military 
Personnel, Army (MPA) accounts to improve the readiness of the force. 
However, some savings were invested in the following modernization 
programs: Javelin; ATACMS/BAT; Abrams Tank; and Patriot Advanced 
Capability (PAC-3). Additionally, some savings from the Cost Reduction 
Program (CRP) were applied to high priority Army modernization efforts 
including digitization programs.
    Question. Were you able to accelerate the fielding of any systems 
as a result of reinvesting your savings? If so, please give us some 
examples.
    Answer. Some of the systems that we are accelerating the 
procurement as a result of savings include: Abrams Tank (from 11 to 9 
years); Bradley A3 Upgrade (to be in sync with the M1A2 SEP Tank); 
Javelin (from 14 to 11 years which enabled us to buy an additional 
3,660 rounds); and Longbow Hellfire (from 10 to 8 years).
    We are also using Force XXI initiatives funding to jump-start 
technology programs. Congress approved $50,000,000 in fiscal year 1997 
and $100,000,000 in fiscal year 1998. The Army requested $100,000,000/
year for the remaining Program Objective Memorandum years. This money 
is being used to accelerate the fielding of systems under the umbrella 
of the Warfighting Rapid Acquisition Program (WRAP). Some of the 
systems being purchased through the WRAP include: Radio Frequency Tags/
Interrogators; Striker; Gun Laying Positioning System; Avenger Slew-to-
Cue (STE); Mortar Fire Control System; Lightweight Laser Designator/
Rangefinder (LLDR); Army Airborne Command & Control System (A2C2S); 
Palletized Load System-Enhanced (PLS-E); and Combat Synthetic Training 
Assessment Range (CSTAR).

               Research, Development, Test and Evaluation

    Question. The Army is requesting $4,700,000,000 for Research, 
Development, Test and Evaluation (RDT&E) activities--this is 
$200,000,000 higher than last year's budget request. The fiscal year 
1999 budget request includes $20,000,000 to begin an Army ``Dual-Use 
Applications Program''. Previously a DARPA program, the budget proposes 
transferring the program to the Service. Please explain your plan for 
executing the Dual-Use Applications Program?
    Answer. The Army Dual Use Applications Program (DUAP) will be 
executed in a fashion similar to the current program. Specifically, the 
DUAP funding ($20,000,000 in fiscal year 1999) will be used as matching 
funds for Army laboratories and centers who solicit dual-use project 
proposals from the private sector. These proposals will be solicited 
via Broad Agency Announcements (BAAs) from the participating agencies 
and will be executed via Cooperative Agreements or Other Transactions. 
Funding for the projects will come from the DUAP line (>25 percent), 
the lab/center mission funding (>25 percent), and the private sector 
partner(s) (*50 percent). At least half of the non-Federal funding must 
be in the form of high quality cash cost-share. The other half can be 
in the form of in-kind contributions.
    Question. Why does the Army need a dual-use program?
    Answer. The Army has been an aggressive partner in dual-use 
Research and Development (R&D) for a number of years, with the primary 
motivation of leveraging commercial technology for military 
applications. Such leverage is critical in an era of dwindling defense 
resources that cannot support a military-unique industrial base. It is 
also smart business, particularly in areas where the commercial sector 
has the technical lead and the incentive to invest in co-development of 
technology. The Army has utilized Cooperative R&D Agreements more 
heavily than the other two Services combined to leverage the R&D 
investment by industry. The Army has also established two major centers 
focusing on ways to exploit dual use technologies:
    a. National Automotive Center (NAC) serves as a focal point for 
dual use technologies and application to military ground vehicles. 
Cooperative R&D Agreement with General Motors Ford, and Chrysler 
provides basis for significant technology transfer.
    b. National Rotorcraft Technology Center (NRTC) established a 
government/industry partnership that combines the resources of the 
government, U.S. rotorcraft industry, and academia, and identifies and 
develops dual use rotorcraft technologies.
    The Army strongly supports the concept of focusing applied research 
(6.2) funds on dual-use technology projects, as this is the phase of 
development where the dual-use potential is highest and industry may be 
most willing to co-invest. However, the Army is concerned that our year 
goals for the percentage of 6.2 funds devoted to dual use are too high.
    Question. For the record, please provide a list of all the ``new 
start'' RDT&E activities in fiscal year 1999.
    Answer. There are no major system new starts. There are a number of 
programs transferred from the Office of the Secretary of Defense (OSD) 
to the Army reflected in the Army's 1999 fiscal year budget submission. 
These include:

------------------------------------------------------------------------
                  Title                              Pe/Project
------------------------------------------------------------------------
Dual-Use Application Program DUAP).......  0602805A/A105
Net Assessment Directorate...............  0605803A/M735
Joint Tactical Radio System..............  0604280A/D152
Commercial Operating and Support Savings   0604824A/D112
 Initiative (COSSI).
Tactical Unamanned Aerial Vehicle........  0305204A/D114
Strategic Environmental Research and       0603780A/D852
 Development Program.
Minor new initiatives for fiscal year
 1999 are:
    Combat Service Support Equipment--     0604804A/DL43
     Engineering Development.
    Munitions Survivability and Logistics  0605805A/D297
    Auto Test Equipment Development......  0604746A/DL65
    Reliability, Maintainability and       0708045A/DE27
     Sustainability (RMS).
    Pollution Prevention.................  0602720A/A895
    Army After Next (AAN) Applied          0602308A/A636
     Research.
------------------------------------------------------------------------

    Question. How much is included in the Army's Future Years Defense 
Program (FYDP) for Dual-Use Applications?
    Answer. Based on the transfer of funding from OSD to the Services 
in the Program Decision Memorandum for fiscal years 1999-2003, the Army 
has approximately $19,000,000 per year for the DUAP effort through the 
FYDP. In fiscal year 1998, Congress established goals for dual-use 
Science and Technology spending as a percentage of the overall 6.2 
funding: 5 percent in 1998; 7 percent in 1999; 10 percent in 2000; and 
15 percent in 2001. This translates into an overall dual use goal of 
approximately $75,000,000 per year in 2001 and beyond. Given the 
limited funding in the Army DUAP Program Element (0602805A), which 
currently provides approximately 50 percent of the Army funding for 
dual use efforts as described above, the Army is concerned about the 
excessive burden on core 6.2 funds this imposes (i.e., approximately 
$56,000,000 per year). The Army recommends limiting the dual-use goals, 
established in terms of percentages of the applied research (6.2) 
program, to the extramural portion of 6.2 only, similar to the Small 
Business Innovation Research (SBIR) set-aside. The goal would then 
appropriately apply to funds targeted for use in the private sector, 
reducing the burden on core 6.2 in the out years to an acceptable 
level.
    Question. Which ones are included on the Commander in Chief (CINCS) 
priority list?
    Answer. The CINC Integrated Priority List includes Pollution 
Prevention, Combat Service Support equipment, and Tactical Unamanned 
Aerial Vehicle.
    Question. Your statement addresses the criticality of investing in 
Science and Technology (S&T) programs to ensure that the capabilities 
required by Army After Next (AAN) are available when needed. How much 
are you requesting for S&T in fiscal year 1999?
    Answer. The Army's S&T (6.1-6.3) budget request for fiscal year 
1999 is $1,196,000,000.
    Question. Of your request, how much is for Army After Next? Please 
give us some examples of initiatives included in your fiscal year 1999 
budget.
    Answer. A detailed analysis of the Army's S&T program indicates 
that approximately 90 percent of the funding is devoted to technologies 
that will contribute to essential AAN capabilities, with particular 
emphasis in basic research (6.1) and early applied research (6.2). Some 
specific examples of initiatives in the fiscal year 1999 budget 
include:
    a. Initiation of an AAN Applied Research program, which will 
provide matching funds to Army laboratories and centers to enhance 
private sector participation in new Science and Technology Objectives 
(STOs) focusing on AAN enabling technologies.
    b. Increased investment in Key AAN technology enablers, including 
full spectrum active protection and cognitive engineering to reduce 
information overload.
    c. Early investment in technologies leading to enhanced, AAN-
focused programs in the Program Objective Memorandum, such as the 
compact kinetic energy missile and a lighter weight (<50 lbs.) soldier 
system (including lightweight ballistic protection for the individual 
soldier and hybrid fuel cells for lightweight power sources).
    d. Focusing the National Automatic Center (NAC) on the issue of 
enhanced fuel efficiency to reduce the logistics burden associated with 
future vehicles.
    Question. Do the outyears support the fielding of those 
technologies?
    Answer. The technologies are adequately funded in the Army's 
planned S and T program, allowing them to mature into integrated 
advanced technology demonstrations. Funding for further development 
will depend on the success of such demonstrations and on further 
definition of the Army's requirements for specific AAN systems.

            Advanced Concept Technology Demonstration (ACTD)

    Question. Advanced Concept Technology Demonstration (ACTD) are 
aimed at rapidly fielding new systems to evaluate their military use--
generally in two to four years. After extended user evaluation, 
successful test systems, called ``residuals'' are fielded. The Army may 
make the decision to produce additional residuals for fielding after a 
successful extended user evaluation. Please explain the extended user 
evaluation?
    Answer. Prior to answering the question on extended user 
evaluation, clarification of an ACTD is required. In the Army, an ACTD 
is comprised of a 2-4 year period of technical test, integration and 
troop training leading to a large-scale field experiment (FE), and a 2 
year extended user evaluation (EUE) of residual quantities. Based on 
the results of the Field Experiment, the new capability/technology has 
three possible outcomes: (1) proceed through the acquisition process 
(e.g., Engineering and Manufacturing Development (EMD), procurement) 
for Army-wide fielding; (2) be retained as a niche capability only with 
the ACTD residual quantity; or (3) terminated if not deemed successful 
in the ACTD.
    The ACTD extended user evaluation is the two-year period after the 
large-scale field experiment during which the user/warfighter can 
continue training with the ACTD residuals to maintain proficiency, 
refine operational concepts and tactics, techniques and procedures 
resulting from the ACTD, while having a limited go to war capability. 
For those residual systems intended to transition to procurement, 
further assessment by the operational test agencies will be conducted 
to support procurement decisions.
    Question. What criteria is used to determine a successful user 
evaluation?
    Answer. All Army warfighting units operate with a Mission Essential 
Task List (METL) which lists the tasks the unit must be able to perform 
in their combat mission. Prior to the Field Experiment Measures of 
Evaluation (MOE) and Measures of Performance (MOP) are developed in 
conjunction with the METL. During the Field Experiment the designated 
ACTD warfighting unit will evaluate the new capability and attendant 
concept of operations against the METL using the MOEs and MOPs.
    Question. Who develops the criteria for a successful user 
evaluation? The program manager or the Army test community?
    Answer. In the Army, the Battle Lab in the Training and Doctrine 
Command (TRADOC), responsible as ACTD Operational Manager and the 
designated ACTD warfighting unit address evaluation of the new 
capability during against the METL.
    Question. Are representatives from the developmental and 
operational test community present during the user evaluation?
    Answer. Representatives from the operational test community are 
part of the team that develops the Measures of Effectiveness (MOE) and 
Measures of Performance (MOP) and they are present during the user 
evaluation.
    Question. Do ACTD residual systems undergo a formal development and 
operational test?
    Answer. No. The residual systems would undergo formal development 
and operational test outside of the ACTD and only if the Army 
leadership should decide to further develop the capability through the 
acquisition process (EMD) for Army-wide fielding.
    Question. If a residual system does not go through ``formal'' 
testing, how do you ensure that the system is reliable and operable in 
military conditions?
    Answer. Each ACTD has a set of criteria called MOEs which must be 
met in the large-scale field experiment. The MOEs address performance, 
reliability and risk assessment, are delineated in the ACTD Management 
Plan, and are agreed upon by all signers of the plan. In addition, 
residual systems are safety tested and man-rated during the ACTD by the 
U.S. Army Operational Test and Evaluation Command (OPTEC).
    Question. What process is in place to determine which technologies 
should be fielded?
    Answer. The MOEs used in the large-scale field experiment are the 
criteria against which ACTD new capabilities/technologies are judged 
for leave behind as residuals with a warfighting unit. Successful 
evaluation of the residuals by the user in EUE could lead to the 
decision to acquire the system for fielding.
    Question. How do you ensure that the operating and logistics costs 
for successful ACTD technologies can be supported in future budgets?
    Answer. If the decision is made to acquire the new capability/
technology, resources will be identified in the budget planning process 
to cover operating and logistics costs based on real data and 
experience gained from the ACTD.
    Question. For the record, please provide the ACTD's planned for 
fiscal year 1999. Please include prior year funding, planned funding 
for fiscal year 1998 and future funding requirements. Also include any 
Defense-wide or other Service Research, Development, Test and 
Evaluation funds which have or will be provided for each ACTD.
    Answer.

                                                 [$ in millions]
----------------------------------------------------------------------------------------------------------------
           FY98 PB RDT&E                FY98       FY99       FY00       FY01       FY02       FY03      Total
----------------------------------------------------------------------------------------------------------------
RFPI:
    Army...........................      69.50      69.50      28.50      11.00  .........  .........     326.80
CMRL:
    Army...........................       5.30  .........  .........  .........  .........  .........      50.40
JCM:
    Army...........................      20.60      21.20      17.40  .........  .........  .........     116.10
    Navy...........................      47.30       3.90       1.50  .........  .........  .........     223.90
    USMC...........................       7.50  .........  .........  .........  .........  .........      26.60
TPSO:
    OSD............................       1.00       4.00       4.50       4.00  .........  .........      13.50
    Army...........................       5.37       9.50      18.80      22.00      10.00       8.00      73.92
MOUT:
    OSD............................       5.00  .........  .........  .........  .........  .........       6.20
    Army...........................      20.30      21.10      20.90       2.00  .........  .........      66.30
JCID:
    OSD............................      16.40       4.00       4.00  .........  .........  .........      41.90
    Army...........................  .........  .........  .........  .........  .........  .........      14.70
RTV:
    Army...........................      10.57      14.35      12.53  .........  .........  .........      46.60
    OSD............................       2.00       2.00       3.00       3.00  .........  .........      10.00
LOSAT:
    OSD............................       5.00       7.00       5.00       1.00  .........  .........      18.00
    Army...........................       5.00      20.00      40.00      55.00      60.00       27.8     207.80
C4ICW:
    OSD............................        .40        .90        .96       1.07        .75  .........       4.08
    Army...........................       4.05       3.20       3.84       2.40       1.75  .........      15.24
THEL:
    OSD............................  .........  .........  .........  .........  .........  .........       3.50
    Army...........................      61.00  .........  .........  .........  .........  .........     107.40
    Israel.........................       7.60  .........  .........  .........  .........  .........      22.10
        Total
            OSD....................      29.80      17.90      17.46       9.07        .75  .........      97.18
            Army...................     201.69     158.85     141.97      92.40      71.75      35.80    1025.26
            Navy...................      47.30       3.90       1.50  .........  .........  .........     223.90
            USMC...................       7.50  .........  .........  .........  .........  .........      26.60
            Israel.................       7.60  .........  .........  .........  .........  .........      22.10
----------------------------------------------------------------------------------------------------------------

    Question. For the record, please provide a list of the technologies 
fielded as a result of the ACTD process. Please include testing, 
fielding, and support costs for each system.
    Answer. To date, no Army ACTD has completed EUE so that no 
technologies have yet been fielded as a result of the ACTD process.

    [Clerk's note.--End of questions submitted by Mr. Young. 
Questions submitted by Mr. Skeen and the answers thereto 
follow:]

                         High Powered Microwave

    Question. In my briefing by the Army Research Laboratory during my 
visit to White Sands Missile Range last year, I was shown a 
demonstration of the results of their RF coupling investigation on a 
workstation. They also noted that Russia was developing RF weapons.
    I have been briefed from Sandia National Laboratory and the Air 
Force on their interest in High Powered Microwave (HPM) effects on 
computers and computer networks. What is the Army doing to establish a 
program to evaluate and address the HPM effects on its digitized 
formations? I am most interested in this matter since I have been told 
that the Army is placing a processor on every platform to achieve its 
digitized battlefield.
    Answer. The Sensors and Electron Devices Directorate (SEDD) of the 
Army Research Laboratory has a program that addressed High-Power 
Microwave (HPM) effects. For fiscal year 1998, the SEDD has committed 
approximately $2,270,000. Specifically, the Directed Energy and Power 
Generation Division has two ongoing efforts. The first effort is to 
focus on the survivability of the digitized battlefield of the next 
century. In particular, it addresses the electromagnetic (EM) 
environments that will permeate the future battlefield and develop 
technologies for Force XXI and Army After Next (AAN) that will be 
required to assess survivability and mitigate the adverse effects on 
military equipment in the environments. The work draws upon the 
methodologies employed and the technologies developed in the successful 
nuclear EM pulse (EMP) and HPM Survivability program and will 
concentrate on developing new hardened devices and techniques with 
emphasis on an integral hardening approach applicable to all EM 
environments. Major elements include: measurements and analyses of the 
susceptibility of electrical devices; coupling to unhardened systems; 
performance of hardening technologies; installation of hardening 
technology into test subsystems/systems to verify performance of the 
hardening; documentation of the hardening performance; and 
recommendations for future hardening activities. The second effort is 
to develop Directed Energy Weapons (DEW) (narrow-band and ultra-wide-
band) sources, amplifiers, and antennas and associated hardware for use 
in HPM susceptibility experiments, developing field demos and DEW 
systems. The research and development for Force XXI and the AAN will 
concentrate on developing sources and components that have agile output 
parameters, and have multi-functional antennas to enable DEW systems to 
be effective against multiple classes and types of targets at extended 
ranges. This effort will enable the Army to constantly evaluate the 
potential threats due to HPM weapons via susceptibility experiments, 
assessment and field demonstrations. It will also provide the Army with 
new and improved HPM radiators and enable the Army to weaponize HPM 
concepts in appropriate scenarios.

    [Clerk's note.--End of Questions submitted by Mr. Skeen. 
Questions submitted by Mr. Bonilla and the answers thereto 
follow:]

                   Family of Medium Tactical Vehicles

    Question. Has the Army done a cost benefit analysis of the FMTV 
dual source acquisition strategy?
    Answer. The Program Manager provided cost and benefit analysis data 
as part of the FMTV, second source Determination of Findings (D&F).
    Question. Does the Army have sufficient funding in the out years to 
sustain an economic production rate for two contractors?
    Answer. Yes, we believe that we do.
    Question. One of the main objectives of the FMTV was to achieve 85 
percent commonality of parts among all 14 FMTV variants. How will 
commonality be maintained if we add a second production source?
    Answer. Commonality between variants will be evaluated as part of 
the best value, source selection process.
    Question. Will a second source be required to meet the same 
Reliability, Availability and Maintainability (RAM) performance levels 
as the current FMTVs? If not, why not?
    Answer. All the second source variants must meet the same RAM 
requirements as those built by Stewart and Stevenson.

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

                        Smokeless Nitrocellulose

    Question. Smokeless nitrocellulose, which is used as a military 
propellant, is produced by the Army's facility at Radford, Virginia, at 
considerable higher costs than is available in the commercial market. 
Is this correct?
    Answer. No, preliminary research found that the unit cost 
(unburdened) per pound is nearly the same as commercial sources in the 
United States and Canada. It is noteworthy that nitrocellulose is a raw 
material in the propellant production process and the ``make or buy'' 
decision resides with the production contractor.
    Question. What are the cost savings, say over 10 years, if the Army 
bought this product from the commercial supplier? I understand the cost 
savings could be as much as $100,000,000 over ten years.
    Answer. The Army recently received the same cost savings data for 
the commercial supplier. We have initiated an investigation to compare 
this cost to today's fully burdened costs to produce nitrocellulose at 
the Radford facility. We expect the results of this investigation by 
the end of May 1998.
    Question. With all of the efficiencies the Army is trying to 
achieve now to save dollars for modernization, why are they not buying 
smokeless nitrocellulose from domestic suppliers?
    Answer. The Army is not buying smokeless nitrocellulose. Rather, 
the Radford facility use contractor procures this raw material for 
propellant production after conducting a ``make or buy'' decision. Over 
the past several years, the Army has strongly encouraged ``full and 
open'' competition for raw materials by both the organic and commercial 
ammunition sectors. With a few exceptions, the Army plans to continue 
its strategy to procure ammunition end items from both the commercial 
and organic ammunition producers; and allow these producers to acquire 
raw material. This allows the market place to determine the price, 
while the Army focuses on end item quality and performance at the best 
value.

                           Starstreak Missile

    Question. Last year, the Committee added funds to allow the 
Starstreak missile to engage in a side-by-side comparison with Stinger 
for use on the Apache helicopter. The Committee also directed the Army 
to fully fund this competition in fiscal year 1999. General Kern, what 
is the status of the Starstreak missile program?
    Answer. Congress directed and funded the technical feasibility of 
the air-to-air missile capability of Starstreak on the Apache 
helicopter in fiscal years 1995-1997. The United Kingdom Ministry of 
Defence (MOD) is participating with the United States Army in a two-
phased assessment and is providing the required missiles under 
government loan agreements quid pro quo technical data results.
    Phase I Air-to-Air Starstreak (ATASK) testing was successfully 
completed October 1996. It was directed at evaluating initial technical 
feasibility and safety aspects of ATASK for the AH-64A Apache 
helicopter. Based on limited modeling, simulation, and test results, 
the Army concluded that the current configuration of ATASK limits the 
aircraft launch envelope to airspeeds less than 30 knots. A preliminary 
affordability analysis from Phase I was also conducted and is now 
available. This analysis raised significant concerns because it 
revealed that ATASK production integration costs for the Apache Longbow 
are projected to be two times greater than Stinger (largely driven by 
the integration of the laser guidance unit with the AH-64 Target 
Acquisition Designation System (TADS)).
    The Phase II contract was initiated in December 1996. Phase II will 
continue the technical feasibility for the system effectiveness of 
ATASK on the AH-64A Apache and is to be completed in December 1998. The 
Phase II program involves the integration of the missile laser guidance 
unit into the aircraft TADS, limited crew station integration, few-on-
few constructive simulations to assess system effectiveness and support 
test matrix development, AH-64A and Starstreak missile system 
modifications, airborne tracking tests, firing flight envelope/guidance 
verification, and live fire tests against simulated and live airborne 
targets. Detail design of the laser guidance unit integration with the 
target acquisition designation system is complete and hardware 
fabrication is underway. Simulation model development, methodology, and 
scenario development for few-on-few scenarios began in April 1997. 
These scenarios are providing a primary basis for the flight test 
matrix scheduled to commence in June 1998. One full scale remotely 
controlled drone (QUH-1) and an adequate number of stationary and 
moving ground based targets are sufficient to meet Phase II test 
requirements and to keep the program within budgeted cost constraints. 
The U.S. Army Operational Test and Evaluation Command is ensuring that 
the test matrix developed for ATASK Phase II will yield an adequate 
representation of operational feasibility.
    In parallel with Phase II, the Army is conducting a comparative 
system performance and cost effectiveness study to be completed in 
December 1998. To provide a fair and independent evaluation of 
Starstreak and Stinger, the Army Materiel System Analysis Agency, with 
direct support from Ministry of Defence Evaluation and Research Agency, 
will assess suitability of each system for future air combat. The study 
will include the evaluation of the improved version of ATASK (no 
limited launch envelope) and a more comprehensive operational cost 
analysis than was conducted during the Phase I ATASK program. This 
analysis will evaluate all costs associated with Starstreak and Stinger 
missile systems for the Apache Longbow.
    Continuing threat assessment will dictate the path forward for an 
air-to-air requirement. Any follow-on-side-by-side comparison effort 
will be dependent on ATASK Phase II results. System effectiveness and 
affordability results from ATASK Phase II and the comparative study 
will drive Army strategy and prioritization recommendations.
    Question. Did the Army comply with the Committee's direction to 
fully fund a side-by-side competition in fiscal year 1999? If not, why 
not?
    Answer. No. The Air-to-Air Starstreak (ATASK) Phase II program will 
not be completed until December 1998. A decision to fund and/or conduct 
a side-by-side comparison at the February 1998 submittal of the 
President's Budget (PB), and prior to Phase II completion is premature 
based on the incompleteness of the technical and affordability data to 
date. The United States/United Kingdom comparative study Senior 
Advisory Group agreed that the current two phase approach including the 
captive tracking flight trials and live fire flight tests of the 
Starstreak, and modeling and simulation efforts for side-by-side 
comparisons of Starstreak and Stinger air-to-air missile systems, is 
the most cost effective approach at this time. Additionally, the air-
to-air threat in the near and mid term is low and as such budgeting of 
scarce Army funding to support a side-by-side test of Starstreak and 
Stinger missile systems is not warranted in the fiscal year 1999 
Presidents Budget.
    Question. What did the Army budget for Starstreak in fiscal year 
1999?
    Answer. The Army did not budget for Starstreak in fiscal year 1999.

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

                       Ammunition: Unfunded Items

    Question. Does the Army Ammunition budget fund all ammunition 
required by the Army (including both training and war reserve) that 
could be reasonably produced in the fiscal year 1999 funded delivery 
period? If not, please identify those items that were not funded, or 
were funded at less than an economic buy quantity, and for each item 
identify the dollars required to meet the minimum sustaining rate 
quantity and the dollars required to meet the economic buy quantity.
    Answer. Due to limited funding, the Army was unable to fund all 
ammunition requirements in fiscal year 1999. In particular, several 
modernization items and a few war reserve munitions used to support 
training which have been drawn down in earlier years are unfunded, or 
funded at less than the economic buy quantity.
    The attached table represents the status of funding in fiscal year 
1999 for preferred war reserve munitions, and war reserve munitions 
with significant training implications, and training munitions with 
shortages. This table shows that of $7,500,000,000 in shortfalls in 
these munitions, only $957,000,000 is required today after considering 
substitutes. The other shortfall items have adequate substitutes in the 
current stockpile to meet current threats. There are a small number of 
munitions for which no, or limited, substitutes exist: Hydra 70 
Training Rockets, certain Small Arms Ammunition, the XM90 Light Vehicle 
Obscuration System Grenade, Non-Lethal Munitions, the XM915 105MM DPICM 
Projectile, and the Wide Area Munition. A maximum of $225,000,000 above 
the President's budget can be executed in fiscal year 1999 on munitions 
for which no suitable substitute is available. Thus the Army's Fiscal 
Year 1999 Ammunition Budget has only moderate risk when substitutes and 
potential for execution is considered.
    With regard to execution rates, the table also shows that for the 
listed munitions the minimum sustaining rate is about $476,000,000. The 
economic buy, or in many cases maximum program execution level, totals 
about $657,000,000. Of the executable range $393,000,000 is currently 
in the President's budget and $22,000,000 is available as Foreign 
Military Sales credits, leaving a fiscal year 1999 executable shortfall 
between $55,000,000 and $256,000,000.

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]




                      Abrams Tank Upgrade Program

    Question. The National Defense Panel issued its report last year 
and called on the Department to spend five to ten billion more dollars 
each year in procurement and Research and Development (R&D) to take 
advantage of the so-called revolution in military affairs. The Panel 
criticized some legacy systems and called specifically for an end to 
the M-1 upgrade program. To the best of your knowledge, what factors 
would have led the Panel to believe that the M-1 upgrade program should 
be ended, when it failed to make the same recommendation on dozens of 
other systems?
    Answer. I am not aware of the rationale used by the National 
Defense Panel (NDP) that contributed to these recommendations. The NDP 
report did not specifically call for an end to the M-1 tank upgrade 
program. The report recommended that land forces ``should reduce 
systems that are difficult to move and support; shift to lighter, more 
agile automated systems.'' We agree with this recommendation. This is a 
key element of the force we envision in our Army After Next Process. 
However, the NDP questioned the continuing upgrade of the M-1A1 tank 
beyond its current capabilities. I share the concerns the NDP expressed 
in its report, but disagree with those individuals who have 
subsequently suggested that the program should be canceled. The Army's 
greatest challenge is balancing near-term readiness with mid-term 
modernization investments. We do not have the luxury of allowing 
current systems to lose their relative advantage over potential 
adversaries while we invest in leap-ahead capabilities. We must do 
both, simultaneously. The safety of our soldiers--today's and 
tomorrow's--demand that we get the balance right. The Army is charting 
a prudent course that will transform the force to one that can fight 
the battle of 2020 and beyond.
    Question. Given today's limited resources and reduced forces, are 
we going to see the continued fielding of evolutionary improvements 
(like the M-1 upgrade), rather than the more rapid exploration of 
revolutionary ideas (like the Future Combat System (FCS))?
    Answer. We will seek to maintain the combat overmatch that we 
currently enjoy in critical systems, while simultaneously developing 
the leap-ahead capabilities we envision for our Army After Next (AAN) 
in 2025 and beyond. We envision that some evolutionary improvements to 
existing systems may be required to maintain combat overmatch. For 
example, the upgrade of part of our Abrams tank fleet will enable us to 
maintain combat overmatch until our AAN systems are developed.
    One of those AAN systems, the Future Combat System (FCS), will 
provide leap-ahead capabilities in lethality, survivability and 
sustainability. Currently efforts for the FCS are in science and 
technology focused on armament technologies, alternative power sources 
and advanced survivability measures. We project that FCS technologies 
will mature such that production can being in the 2018-2025 timeframe.
    Question. What is the current Research and Development (R&D) 
funding profile for the Future Combat System?
    Answer. The Army has budgeted no development funds for the Future 
Combat System (FCS) to date since fielding of this system is not 
planned until about 2020. Early research programs considered necessary 
to enable feasible FCS and related platform concepts are funded at 
about $40,000,000 in the fiscal year 1999 President's Budget request. 
General Reimer, in his recent testimony to the Congress, emphasized 
that the Science and Technology (S&T) base is focused on future needs 
of the Army--Army After Next (AAN). The U.S. Army Training and Doctrine 
Command (TRADOC) has identified several technology areas that they deem 
essential to achieve the emerging vision for the AAN, one of which is a 
lightweight, lethal FCS. From an S&T perspective, TRADOC's priority 
areas of investment include: active protection, signature management, 
light weight materials and, protection against kinetic energy and 
chemical energy projectiles, lightweight fuel efficient ground vehicle 
propulsion systems, and lightweight highly lethal armaments. In 
response to the User's interest in these technologies, the S&T base has 
realigned funds that constitute part of the total amount shown above 
for fiscal year 1999. These technologies have potential applications 
across a wide range of vehicles including those in the inventory now 
and emerging in the near future. The Army S&T community is supporting 
TRADOC battle laboratories with advanced technology demonstrations as 
well as virtual system designs, analyses and advice to help frame the 
technology issues and strategies to provide essential AAN capabilities.
    Question. If the Department dropped down to one Major Theater War 
(MTW) requirement (instead of two), would that affect the number of 
tanks that are scheduled to be upgraded in the future?
    Answer. In accordance with the defense planning and the National 
Military Strategy, the Army tailors its force in order to fight two 
nearly simultaneous Major Theater Wars, therefore, any modification to 
the schedule or number of future upgrades for our tanks--given other 
parameters--has not been considered. While recapitalizing the Army to 
meet future challenges under our current strategy and planning 
guidance, we will assume some degree of calculated risk (with shrinking 
budgets) in terms of readiness and allocation of sufficient resources 
to conduct the science, technology, and modernization efforts that will 
lead to long term capabilities. However, we must manage that risk 
carefully to ensure that readiness does not suffer to an unacceptable 
degree. The key is to monitor the risk while maintaining a balance 
among six fundamental imperatives of our Army: quality people, 
training, leader development, doctrine, force mix, and modern 
equipment.
    The Army has established a balance that enables us to meet the 
National Military Strategy, but the balance is fragile. It could be 
easily disturbed by failure to meet Quadrennial Defense Review-derived 
end strength targets, unpredictable funding, or less than expected 
efficiencies from programmed infrastructure reform. If we were to 
reduce readiness, we would increase risk associated with our ability to 
meet real world security challenges today. If we were to divert 
modernization funds, we would jeopardize the readiness of the future 
force. As leaders, we must ensure not only that our soldiers of today's 
full-spectrum Army are the best trained and equipped in the world, 
capable of fighting and winning our current two MTW strategy, but that 
future generations of soldiers enjoy the same ability to fight and win.

   Army Ability To Support Two MTW Strategy (Abrams Upgrade Program)

    Question. If the Department dropped down to one Major Theater War 
(MTW) requirement (instead of two), would that effect the number of 
tanks that are scheduled to be upgraded in the future?
    Answer. In accordance with defense planning and the National 
Military Strategy, the Army tailors its force in order to fight two 
nearly simultaneous Major Theater Wars, therefore, any modification to 
the schedule or number of future upgrades for our tanks--given other 
parameters--has not been considered. While recapitalizing the Army to 
meet future challenges under our current strategy and planning 
guidance, we will assume some degree of calculated risk (with shrinking 
budgets) in terms of readiness and allocation of sufficient resources 
to conduct the science, technology, and modernization efforts that will 
lead to long term capabilities. However, we must manage that risk 
carefully to ensure that readiness does not suffer to an unacceptable 
degree. The key is to monitor the risk while maintaining a balance 
among six fundamental imperatives of our Army: quality people, 
training, leader development, doctrine, force mix, and modern 
equipment.
    The Army has established a balance that enables us to meet the 
National Military Strategy, but the balance is fragile. It could be 
easily disturbed by failure to meet Quadriennial Defense Review (QDR)-
derived end strength targets, unpredictable funding, or less than 
expected efficiencies from programmed infrastructure reform. If we were 
to reduce readiness, we would increase risk associated with our ability 
to meet real world security challenges today. If we divert current 
funds earmarked for modernization it would jeopardize the readiness of 
the future force and adversely affect the number of tanks and other 
critical equipment to be upgraded. It would also impact on new systems 
to be fielded in the near term. It is imperative, therefore, that 
balance between current readiness and force modernization be 
maintained. The soldiers of today's Army must remain the best trained 
and equipped in the world and we must also remain on track with our 
modernization effort to ensure that future generations of soldiers 
enjoy the same ability to fight and win.

                      UH-60 Black Hawk Helicopter

    Question. I understand the active Army and the Army National Guard 
have acknowledged a shortfall of 90 UH-60L Black Hawks helicopters in 
Guard ``warfight'' units. Isn't it true that these 90 Black Hawks meet 
the ``warfighting'' requirements and fill the missing third assault 
company in six assault battalions thereby bringing these battalions to 
their doctrinal configuration?
    Answer. Yes, this is true.
    Question. I understand that all but eight of the 90 ``warfighting'' 
Black Hawks are either in the fiscal year 1999 budget request or 
projected in the Program Objectives Memorandum (POM) 2000. Are there 
significant cost savings associated with this 90 aircraft buy achieved 
by adding eight additional Black Hawks to the 22 included in your 
fiscal year 1999 budget?
    Answer. By way of clarification, 40 of the 90 additional UH-60s are 
competing in the POM 2000-2005. The Army has funded 50 UH-60s in fiscal 
year 1999 through 2003 and recognizes an unfunded requirement for 40 
additional UH-60s. Funding for the remaining 40 aircraft will compete 
in the POM process. However, the Army would have to add at least eight 
additional UH-60s per year in each of the three remaining years of the 
current multiyear contract (fiscal years 1999, 2000 and 2001). The 
current multiyear contract is based on a procurement strategy of 18 H-
60 helicopters per year for all services (Army, Navy and Air Force). 
Furthermore, the contract contains an option for the Army to re-
baseline to a more economic rate of 36 H-60 helicopters per year. The 
advantage of going to 36 H-60s per year versus 18 would be a savings to 
the Army of $33,200,000 spread out over three years ($10,900,000 in 
fiscal year 1999, $10,700,000 in fiscal year 2000, $11,600,000 in 
fiscal year 2001). This assumes the Navy buys six H-60's in fiscal year 
1999, eighteen H-60s each in fiscal years 2000 and 2001, and the Army 
funds eight additional H-60's in fiscal years 1999, 2000 and 2001, and 
the Army funds eight additional H-60's in fiscal years 1999, 2000 and 
2001. However, in order to achieve a more economic rate of 36 per year 
(18 Army & 18 Navy) and save $33,200,000 the Army would have to invest 
an additional $240,000,000 into its Black Hawk helicopter program. This 
would commit the Services to 36 H-60 helicopters per year, not only in 
fiscal year 1999 but the remaining two years of the multiyear contract 
(fiscal years 2000 and 2001).

    [Clerk's note.--End of questions submitted by Mr. 
Visclosky.]
                                      Wednesday, February 25, 1998.

               NAVY AND MARINE CORPS ACQUISITION PROGRAMS

                               WITNESSES

HON. JOHN W. DOUGLASS, ASSISTANT SECRETARY OF THE NAVY (RESEARCH, 
    DEVELOPMENT AND ACQUISITION)
VICE ADMIRAL CONRAD C. LAUTENBACHER, JR., DEPUTY CHIEF OF NAVAL 
    OPERATIONS, RESOURCES, WARFARE REQUIREMENTS AND ASSESSMENTS, U.S. 
    NAVY
LIEUTENANT GENERAL JEFFREY W. OSTER, DEPUTY CHIEF OF STAFF, PROGRAMS 
    AND RESOURCES, U.S. MARINE CORPS

                              Introduction

    Mr. Young. The Committee will come to order.
    This afternoon the hearing will be on Navy and Marine Corps 
acquisition programs, and by previous vote of the members of 
the Committees, the hearing will be closed because of the 
classification of much of the material to be discussed.
    I am very pleased to welcome Mr. John W. Douglass, the 
Assistant Secretary of the Navy for Research, Development and 
Acquisition. He is accompanied by Vice Admiral Conrad C. 
Lautenbacher, Jr., the Deputy Chief of Naval Operations for 
Resources, Warfare Requirements and Assessments; and by 
Lieutenant General Jeffrey W. Oster, Deputy Chief of Staff of 
the Marine Corps for Programs and Resources.
    Admiral, we will put your biography into the record because 
I understand this is your first appearance before the Committee 
in this capacity, and we do welcome you, as we welcome all of 
the witnesses.
    The Department of the Navy's fiscal year 1999 budget is 
encouraging in that funding for Navy and Marine Corps 
modernization programs have been increased over last year's 
appropriated levels.
    We are still concerned, however, that the budget provides 
funding for 71 new aircraft and helicopters--only 54 are combat 
aircraft--also 810 missiles and 5 combatant ships.
    While this number is better and the budget number is 
better, we have a situation for fiscal year 1999 that is 
different than we had for the previous 3 fiscal years, and that 
is we don't have any surplus in our budget figures over and 
above your budget. And so the room that we had to make adds to 
take care of unfunded priorities that you identified for us in 
the previous years, it is not going to be quite as easy this 
year to do that.
    We will obviously do the very best that we can to provide 
the Navy and the Marine Corps what you need to accomplish the 
mission that you are assigned, whatever it might be.
    And we are happy to have you here this afternoon. And, Mr. 
Douglass, let me yield first to see if Mr. Dicks has a comment 
he would like to make, and then we will yield to you to make 
your presentation.
    Mr. Dicks. Well, thank you, Mr. Chairman. I, too, want to 
welcome our distinguished panel, and I want to thank Secretary 
Douglass for all the help that he has given to me. We have 
worked on a number of these programs and issues that affect my 
area, and he has been tremendous to work with. Thank you.
    Mr. Young. Okay, sir, you have the floor.

                   Summary Statement of Mr. Douglass

    Mr. Douglass. Thank you very much, Mr. Chairman. I would 
like to begin, sir, with your permission, by entering our 
statement into the record in its entirety.
    Mr. Young. Yes, sir, without objection.
    [The joint statement of Mr. Douglass, Admiral Lautenbacher 
and General Oster follows:]

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]




                   NAVY AND MARINE CORPS ACQUISITION

    Mr. Douglass. I will very quickly, sir, run through a 
summary presentation so that the Members have plenty of time to 
ask questions. I understand that you have some other 
commitments this afternoon.
    I want to begin by indicating that this is my third 
appearance before this Committee. General Oster has been with 
me all the way. We are starting to become joined at the hip in 
making these presentations and discussions, and he was been an 
outstanding colleague through it all. It is Vice Admiral Conrad 
Lautenbacher's first year. We have had a very successful year, 
and what you will hear today is consensus. We have, we believe, 
a very good program to put forward, sir.
    I think the Committee might find it interesting that 
exactly 2 years ago, almost to the minute, my wife was over in 
Columbia Hospital giving birth to my little son Alex, who is 2 
years old today. I think that somewhat symbolizes what we are 
all trying to do here. I mean, his little life is something 
that symbolizes the future of America, and what we are trying 
to do is provide for the future combat forces of America in 
what we do in research, development and production. We are 
looking long into the future, and some of the weapons systems 
you will see us describe this morning will be what he uses when 
he comes on active duty as a Marine or a Sailor.

                            BUDGET OVERVIEW

    (CHART 1) Let's have the first chart, please. This is a 
quick summary to tell you that our budget for procurement is in 
the $20 billion category and about $8 billion for research and 
development. I would also add, as you will see in the next 
chart that there is about $25 billion in O&M money that also 
comes under Navy/Marine Corps acquisition.
    Mr. Dicks, it is in that O&M category where you and I often 
work together in the repair of our weapons systems.
    We are very much mindful of acquisition reform. As we show 
you the charts today, you are going to see that we have saved a 
lot of money through multiyear procurements. We have funneled 
that money back into Navy programs for the future, and we could 
not have done that without the cooperation of Congress. We are 
very appreciative of the support we have received.
    We are also desperately trying to look beyond the initial 
cost of these weapons systems, sir, and look at their life 
cycle costs. Oftentimes, the initial cost of the system is only 
a fraction of the total life cycle cost. If we can cut down on 
the maintenance costs, the number of crew members on a system 
and so on, this makes weapon systems much more affordable for 
the Navy and the Marine Corps of the future.
    One of the important changes from last year is that we have 
moved procurement up for our carrier by a year. This makes it 
more affordable for us and fits into our shipbuilding profile 
better. We have followed the advice of this Committee andother 
committees to look very carefully at putting some of our airplane 
programs on a multiyear status. You will see this as we go through our 
presentation.
    I would remind the Committee, our highest priorities in the 
Navy side are the F/A-18E/F, our new carrier, the CVX, and our 
next carrier, CVN-77. I will have a few things to say about 
them later.
    The next chart, please.

                            NAVY TRENDLINES

    (CHART 2) This is just a graphic presentation of what I 
have described to you. The important thing to glean from this 
chart is that the procurement line is on an upward slope. The 
rise in the procurement line you see there is the carrier in 
2001. It is very important. We have worked very hard to make 
that procurement line have an upward slope. I know this 
committee and other committees of Congress have been concerned 
that we are not investing in the future. This is not easy for 
us to do. You can see the RDT&E profile is about flat. That is 
tough on us, but we are doing everything we possibly can to get 
the most out of every dollar.
    Also, Congressman Dicks, you can see that the O&M line is 
pretty much flat, too. Embedded in that line are all those 
repair costs that we talked about before.

                          AIRCRAFT PRODUCTION

    (CHART 3) The next chart, please. This is our aircraft 
program for the future years defense plan. What is important to 
note about this chart, Mr. Chairman, it is almost exactly the 
same as the chart we showed you last year, with a couple of 
very minor changes. The changes that are on the chart are 
positive ones. In fiscal year 1998, we asked for 51 airplanes 
and the Congress gave us 62. That is a good news story for us. 
Fiscal year 1999 is the same number as last year--that 
represents stability and we are very proud of that fact. We are 
not telling you from one year to the next that we are going to 
do something and then we don't follow through with it.
    In the outyears, the numbers are within one or two 
airplanes of what we told you last year. We have been able to 
hold the line here, but it is tough going up that ramp. That is 
a pretty steep ramp, but we are committed to doing it, Mr. 
Chairman. My point in showing it to you is to tell you that it 
is approximately the same as last year. The next chart, please.

                           F/A-18E/F AIRCRAFT

    (CHART 4) The F/A-18E/F, of course, is our number one 
aircraft program. I brought a model of it today. I thought you 
might have some questions about its performance. There have 
been a lot of reports in the press about the wing drop issue. 
We have found several solutions to fix the problem. It never 
got beyond the category of a minor problem to us. What has made 
it somewhat notorious is there have been some leaks of memos 
within the building that made it somewhat sensational.
    The plane is doing well. It is on cost. It is under weight. 
The range estimates are all holding. It has had a very, very 
ambitious and good test program. If you would like more 
information on this wing drop issue, I am prepared to use the 
model to explain it. I know there have been GAO reports about 
the airplane. We can explain the GAO issues on a point-by-point 
basis, as you deem necessary, sir.
    What is most important, probably, to tell you is Secretary 
Cohen has publicly stated that before we turn on the production 
contract for fiscal year 1998, the wants to have a review of 
the program. It have already scheduled that review. We 
anticipate it will occur somewhere in about the last 10 days of 
March. You can imagine there will be an orderly series of 
briefings. They start, as a matter of fact, next week, with 
briefings to me, and they go to the Secretary of the Navy and 
so on up the chain. I am happy to report that the program is on 
course.
    Mr. Young. Mr. Secretary, before you leave that, I just 
wanted to tell you that this Committee has its own test pilot 
amongst our ranks.
    Mr. Douglass. Yes, sir. we are proud of him. I don't know 
where he is today.
    Mr. Young. He is sitting to your left.
    Mr. Douglass. There he is.
    Mr. Young. He has given us a similar report earliertoday on 
his experience on flying that airplane.
    Mr. Douglass. He is not only a test pilot, he is an ace. 
You are a great American, Mr. Cunningham, and we love you in 
the Navy.
    Mr. Lewis. He is being stealthy today.
    Mr. Douglass. Right. He snuck in here on me. I didn't see 
him come in.
    Mr. Cunningham. You can't see ugly very good.

                             V-22 AIRCRAFT

    Mr. Douglass. The MV-22, is the Marine Corps' number one 
aviation priority. As you know, we are in the engineering and 
manufacturing development phase. We are flying the heck out of 
this bird. She is a little behind schedule, but everything we 
can see in this program tells us this is going to be a great 
airplane. The Marine Corps and the Navy are fully behind it.
    I think you will see, if you look at our production 
figures, we are getting the costs down. We are getting the 
production rate up. That is what you have asked us to do. We 
are going to keep pushing on that. Once we have bought a few of 
these and we get a little more flying time, I am hopeful we can 
get this on a multiyear procurement and save even more money, 
which we plan to put back into this program to get the 
production numbers up.

                          JOINT STRIKE FIGHTER

    Concerning the Joint Strike Fighter, the program is doing 
well. I am the service acquisition executive of it right now. 
We have an Air Force general who is the program manager. The 
program has been under my control for about 6 or 8 months now. 
We go back and forth between the Air Force and the navy. It is 
on track. It is in the DEMVAL phase.
    It is a very ambitious program in terms of meeting its cost 
goals and meeting its schedule goals, but it is on track. 
Probably the highest risk part of that program is the engine 
program. We are pursuing what the Congress told us to pursue 
last year, which was to keep the alternate engine program 
alive. I will be glad to go into whatever detail is required on 
that program, sir. The next chart, please.

                         SHIPBUILDING PROGRAMS

    (CHART 5) This is our ship procurement profile. I think the 
most important thing to note about this profile is there is no 
big hump out there, like there is in airplane procurement. 
There will be in the future. We have got to get our numbers up, 
or we won't have a Navy of the size that we need.
    The good news on this chart is that the numbers are very 
stable. Three years ago, when we were here we didn't have our 
carrier in the program. We didn't have our submarine program 
squared away. We didn't have the multiyear contract on the 
DDGs. We have resolved all of those issues, and saved $1.4 
billion with the multiyear contract on the DDGs. I am pleased 
to tell you that the bids are in on that, so those savings are 
real. We are getting four submarines that the Congress 
authorized on contract this summer. If you look at the 
quantities in the outyears for the LPD-17, this is an excellent 
opportunity for a multiyear in the future.
    I know that there has been some question about are we going 
to compete those ships? The answer is, no, we are not. We have 
had a competition. There was a team that won it. The GAO 
reviewed it, and that is the team we are sticking with. I am 
prepared in the future to consider a multiyear procurement if 
the Congress feels that is appropriate. Next chart, please.

                        CVN-77 AIRCRAFT CARRIER

    (CHART 6) CVN-77, our next carrier, has been moved up a 
year. It is the highest priority of our ship programs. I think 
anybody that has been watching the crisis unfold in Iraq 
realizes how important the carriers are to our Navy and our 
Nation. The difference between the Navy we have today and the 
Navy of 1917, when they were about roughly the same number of 
ships, is naval aviation. That is predominantly the striking 
power of our fleet today, naval aviation. That is why we need 
the F/A-18E/F, that is why we need CVN-77 and that is why we 
need eventually a new class of carriers, the CVX. That program 
is progressing on track.

                            DD-21 DESTROYER

    DD-21, our new surface combatant, has been approved by the 
Defense Department for development. Our first ship will be 
procured in 2004, and it is fullyfunded in the budget.

                            DDG-51 DESTROYER

    We are in the second year of the 4-year multiyear for the 
DDG program. The savings are real, and that is working out 
fine. We anticipate that we may even be able to glean more 
savings because some of the contractors are doing so well. We 
expect some underruns on that contract.

                 LPD-18 AMPHIBIOUS TRANSPORT DOCK SHIP

    Concerning LPD-18, we are requesting the second ship of the 
class. Once we get that authorized and appropriated we would 
begin to look for a multiyear procurement for the future. The 
next chart, please.

                        SSN-21 SEAWOLF SUBMARINE

    (CHART 7) Regarding SEAWOLF, as you know, it is a three 
ship program. I have the model of the SEAWOLF here in front of 
me because I know that you may have some questions on it, sir. 
I will go into greater detail, after I summarize my statement.
    The first one is at sea. She is doing very well. We had her 
acoustic trials last summer. I will explain those, if you would 
like, at the end of my presentation.
    The second boat is about 87 percent complete. We will 
deliver her in December of 1998. The third boat is 34 percent 
complete. She delivers in December 2001. The program is under 
the cost cap and performing well. Last year, the Congress asked 
the DoDIG to come in and do an independent review of the cost 
cap. They have done it, and they have said they agree with us. 
She is under the cost cap.

                          NEW ATTACK SUBMARINE

    New Attack Submarine is working well. The second ship 
starts this fiscal year and the teaming arrangement between the 
two yards that we are able to work out last year is working 
extremely well. The next chart, please.

                         MARINE CORPS PROGRAMS

    (CHART 8) Concerning Marine Corps Programs, our number one 
priority for our ground forces is the Advanced Amphibious 
Assault Vehicle (AAAV). I brought in a model of it today. This 
is going to be a huge leap forward in our ability to project 
forces ashore. The AAAV goes very fast. I have seen it in 
operation.
    There are many war stories around about the equipment that 
we have today, How slow it is and how unreliable it is. I know 
General Zinni has a wonderful story about when he was being 
evacuated out of Somalia. I think he was the last Marine off 
the beach in Somalia, and incidentally, his AAAV broke down and 
bobbed around in the surf for a while. They had to go out and 
rescue him.
    We need the AAAV. I have a team working on this program 
near Quantico. We have the government team and the Marine team 
co-located in the same building, with the contractors that are 
building the AAAV. That is the way we are doing the LPD-17 as 
well. This is the wave of the future, breaking down these 
barriers to save money for the taxpayers. That program is on 
track.
    Our new Light Weight 155 is doing well. We have about $35 
million in the budget this year. It is a British-American 
design built in Louisiana and it is doing very well.
    We are going to SLEP our medium tactical trucks in the 
Marine Corps. I have been out and rode on these. These are 
dynamite trucks. You can go up a 45-degree slope with a huge 
load. This program is being executed by the Army. We are doing 
240 vehicles this year for about $85 million.
    The Commandant's Warfighting Lab, which we have worked very 
closely with him to develop, is about a $25 million program. 
Mr. Chairman, we are so lucky in this country to have a 
Commandant like Chuck Krulak. He is innovative, he is a leader, 
and he is doing wonderful things in that Warfighting Lab. At 
some point in time it might be helpful to have him meet with 
you.
    I am going to break it off here. I have a lot more charts, 
but to be mindful of time, I think this is a good place to 
stop.
    (The Charts referred to by Mr. Douglass follow:)

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



                        SSN-21 SEAWOLF SUBMARINE

    Mr. Young. Before we go to vote, and Mr. Nethercutt will 
chair, why don't you go and tell us about the SEAWOLF.
    Mr. Douglass. Yes, sir, I will.
    The model that you see in front of you is what the SEAWOLF 
is going to look like after we bring her back in for a post 
shakedown availability when we coat her with an acoustic 
coating. If you can imagine this ship with about that much of 
her coating taken off, that is what it looks like today. It 
would look similar to the B-2 if you took the radar absorptive 
material off of it. In addition, the hull has protrusions that 
stick out that will be flush when we put the coating on.
    We wanted to get some acoustic information about how well 
she was doing, but we didn't want to wait until we put the 
coating on, so we don't have the final figures. What we are 
going to do is put the coating on next year, take it back out 
and measure acoustics again. So I am reporting preliminary 
information to you today.
    This is her propulsor in the back. This is not the final 
design for the SEAWOLF, so we don't have the final propulsor, 
and we don't have the coating on her. What we found is, ------. 
We met our design specifications there, and that is really 
great news.
    What we found at high speeds was that in the condition that 
she is in today, she is the quietest submarine that exists in 
the world today, ------. Now, it is difficult for us to 
estimate acoustic performance at high speed with all these 
protrusions on the hull, because you get a lot of turbulent 
water noise around the hull when you go at high speeds. It is 
like driving your car with the windows down. You get a lot of 
wind noise. If you crack window, you know how annoying that is 
if you are trying to listen to the radio or something like 
that. We are trying to figure out how much of the noise we hear 
at high speed is due to that and how much is inherent.
    We believe right now, ------. However, she will still be 
the quietest submarine in the world.
    We are going to take this technology and move it forward 
into the New Attack Submarine. We believe the New Attack 
Submarine will clearly be at this acoustic level or better, 
because we are doing a lot of acoustic research in Lake Pend 
Oreille in Idaho ------.
    I would mention, Mr. Chairman, that the speed of this 
submarine is faster than we predicted she would go. You may 
recall when she first went to her sea trial [she went so fast 
that one of the outboard conformal array covers was sucked off 
its mounting flanges because the full acoustic coating wasn't 
installed. So it is a good news story, ------ quieter than any 
other submarines in the world. We are pretty proud of that.
    There have been some issues about the white outlined things 
you see in the front of the submarine. Those are the torpedo 
outer doors. They are like shutters that open up. At flank 
speeds we have had some problems opening those doors because of 
the hydrodynamic pressure. It is a fairly minor problem. We 
will get that solved during our post shakedown availability.
    Those are the main points, I think, that need to be made 
concerning the status of what we have learned from the at sea 
test program. I would be glad to answer further questions 
concerning these issues.
    Connie, do you have anything you think I have left out?
    Admiral Lautenbacher. I think that is a good summary, sir.
    Mr. Young. Okay. Why don't we move on.
    Mr. Douglass. All right, sir. With that introduction. I am 
ready to answer any general questions that the committee may 
have.
    Mr. Young. Okay. Well, this would be a good time for us to 
take a quick break and go to the House chamber and vote. Mr. 
Nethercutt will be in the chair. I apologize.

                      UNMANNED COMBAT AIR VEHICLES

    Mr. Nethercutt. Mr. Douglass, the Navy posture statement 
makes reference to the Outrider system as a replacement for the 
Pioneer UAV. While I recognize the importance of this system 
for C4I functions, I would like your comments on what the Navy 
is doing to pursue UCAVs.
    Aviation Week has reported that operational costs of UCAVs 
could be 15 percent of an F/A-18, and given the tight outyear 
budgets that Secretary Dalton and Admiral Johnson testified 
about this morning, I believe this concept deserves further 
consideration.
    Just as the NDP endorsed this concept, the panel also urged 
greater use of unmanned underwater vehicles to complement our 
smaller submarine fleet. So I am wondering if you could, for 
the record, please testify what research funds are being 
directed to pursuing this concept?
    Mr. Douglass. Yes, sir. Let me start with the UAV part of 
it, the Outrider. The Outrider started out, sir, as a program 
that was to be joint between the Department of the Navy, which 
includes both Navy and the Marine Corps requirement, and the 
Department of the Army. We had a hard time getting the 
requirement for this UAV settled down. About the first 6 months 
I was in office, I went to many meetings on this subject. Many 
of us urged that there be allowed a large bird for the Navy and 
a smaller bird for the Army, but with common guidance and 
control systems and a common ground control system.
    For a variety of reasons, it didn't turn out that way. We 
were told, one bird had to fit all. What this means is, the 
Navy needed about 200 miles of range and we wanted to launch it 
off of a ship to go out and check the coast before the Marines 
went in and do other missions with it, and then fly it back.
    The Army only needed approximately 50 miles of range, and I 
am doing these miles from memory, sir, so forgive me if I miss 
them a little bit.
    Mr. Nethercutt. That is fine.
    Mr. Douglass. I think I will be in the ballpark.
    So automatically, what you were going to have, if you met 
the Navy requirement, is a bigger, heavier, more expensive bird 
than the Army needed, and if you met the Army requirement, you 
couldn't do what the Navy wanted to do.
    We finally said, okay, we will give it the college try. We 
went out on an RFP and one contractor came in and promised us 
they could meet the requirement. When they began to deliver the 
first vehicles, I think they were supposed to weigh in the 
neighborhood of 300 pounds, instead they weighed 700 pounds. We 
have had a lot of problems with this ACTD.
    Ultimately, we decided that the most urgent requirement was 
the Army requirement--the 50 mile,short-range requirement. It 
looks like the Outrider can meet that requirement. The Marines can use 
that once they are ashore. We decided to focus on that requirement and 
try to get that requirement met first and then see if we could grow it 
into the Navy's requirement for a longer-range bird.
    Based on this decision I made arrangements with the Office 
of the Secretary of Defense to transfer my management of the 
program over to my colleague in the Army so that he could 
oversee that focus on the ground mission. That is where we are 
today. I will tell you, sir, my bottom line about UAVs in 
general is I am coming up on, let's see, about 35 years in 
Federal service, 28 years in the Air Force retiring as a 
general, 4 years on the Senate professional staff, and 3 years 
in this job now, and when I was a second lieutenant, we were 
trying to get UAVs operational, and we are still trying. We 
have a few of them out there. We need to do a better job, the 
whole Department, and I am not satisfied with the progress.
    UUVs, Unmanned Underwater Vehicles, is another story. We 
are doing a lot there. We have a multistage program, a shorter-
range vehicle and a longer-range vehicle, coming. We see, as 
your question implied over the long haul, a lot of synergism 
between our submarine force and these Unmanned Underwater 
Vehicles that go out and look at mine fields and do various 
things. There is a very exciting research project within our 
Office of Naval Research called the Mantra program, which we 
are trying to develop one of these for the long-term future. We 
are aware of their utility and trying to work in that 
direction, sir.
    If either of my colleagues would like to comment.
    Admiral Lautenbacher. Can I just add for a second?
    Mr. Nethercutt. Please.
    Admiral Lautenbacher. Our current program now includes the 
Pioneer UAV, which is the one we deploy on our ships today. It 
is very important both to the Marine Corps and the Navy. It is 
a requirement. We have it funded in our program, and our 
strategy is to try to hold on to that and use that, and as we 
get and solve some of the problems that Mr. Douglass is talking 
about, then transition into something that will give us more 
capability.
    Mr. Nethercutt. You are satisfied with the requests that 
you have made budgetwise that you will keep on track and make 
progress?
    Mr. Douglass. Yes, sir.
    Admiral Lautenbacher. Yes.

                    F/A-18 E/F AIRCRAFT PERFORMANCE

    Mr. Nethercutt. I understand that there has been some 
testimony about the F/A-18 wing drop, and I know Congressman 
Cunningham's experience in that respect to some extent. I am 
just wondering if you can let us know whether you see any 
restrictions on range or any other capability of the airplane 
by virtue of the fix?
    Mr. Douglass. Yes, sir. Thank you for asking that question. 
Yes.
    If you can hand me the model, Connie.
    This is the F/A-18 E/F and you can't see it too well from 
where you are sitting, but there is a little hump right here, 
and that is where the wing folds on both sides. Once we 
understood that we had a little bit of a problem with wing 
drop, our first approach was to focus on these flaps in the 
front and the back that are controlled by the computer on the 
airplane. It is a fly-by-wire system that when the pilot gives 
it a command, the computer adjusts the airfoils to optimize 
what the pilot wants to do. We thought we could solve it in the 
beginning with just software.
    As the program progressed and we solved many other issues 
we began to realize we needed a different approach. We have 
looked at a lot of different options, and it turns out that by 
replacing the solid plate that goes on this wing fold with a 
porous plate, in other words, a plate with holes in it, that we 
can solve the problem. That looks to us like the solution.
    Now, if you think about that for a minute, sir, it is going 
to be lighter than the plate that is on there because itis full 
of holes. Also, perforated surfaces like that tend to trap radar; they 
don't reflect it. As a matter of fact, the air intakes on the F-117, 
the stealth fighter, are really a perforated screen so that the radar 
goes in, bounces around and can't come out in a coherent way. So it is 
certainly not going to hurt the radar cross-section to have a 
perforated fairing there. It doesn't hurt range, and it doesn't hurt 
radar cross-section.
    There might be some very, very slight extra drag due to the 
airflow over the wing. We have, I think, in the neighborhood of 
25-26 miles more range in this airplane than we designed her 
for, and we expect that to grow, not to go away. I don't think 
this is going to affect that at all.
    The bottom line is we are not asking for any more money. We 
don't think it affects any of the airplanes' performance. We 
think we have a solution in hand. I am going to take this 
solution up the chain or command this month, starting on the 
3rd of March, I think. I am pretty confident that we will be 
able to convince the Secretary of Defense that we have put this 
behind us.
    It has been a very, very successful test program, and as we 
mentioned before you came in, we have one of the test pilots 
sitting here. He has flown it, and he probably knows more about 
this than I do. I am confident about this program. I have been 
in the airplane business for well over 30 years designing and 
building airplanes, and I have seen a lot of test programs come 
and go in my day. This one is a good program. I put my 
reputation behind it.
    The thing that has made this a notorious issue, sir, has 
been leaking of memos and things like that. In the environment 
we live in today in Washington, if you want something to be 
sexy or sell newspapers, you refer to leaks.
    The other thing that I would point out about this, sir, 
that I think is really important, is the last time our system 
put an airplane through a test program like this was the F-117. 
I was one of the young officers in charge of that program. We 
did it in the black, totally top secret. There wasn't a 
reporter in the country who knew about it.
    Then you have to go all the way back to the F/A-18A and B, 
which is 20 years ago. The young people that are reporting on 
this have never reported on a test program, before, and 
frankly, a lot of the other people that are around today in 
various management positions have never taken a fighter plane 
through the test program. There is an expectation that, if you 
find some little problem here and there that the roof is 
falling in.
    This program has been great compared to the kind of 
problems that we had in the past. When Dr. Kaminski and I were 
taking the stealth fighter, and you know how well she did over 
Baghdad, through the test program, the tails broke off of the 
airplane. We had a pilot come back one day with no tails. Thank 
God we had such a good flight control system he could do it. We 
had to redesign the whole back end of the airplane. Nobody knew 
about it because it was in the black. We had one of them crash 
because we hooked up the flight control systems backwards. So 
this has been a model program. We haven't lost any airplanes, 
and she is doing great.
    Mr. Nethercutt. A few of us went up and over to Pax River 
and prepared for an F/A-18E/F flight, and I talked to one of 
the Super Hornet test pilots who was there at the time and 
spoke very highly of the airplane and said it is a great 
airplane. And so--and having flown in a generation of it, 
without any great expertise, I know that it is exciting, that 
is for sure, and it shows you whether you have an inner ear or 
not, and I do.
    In any event, Mr. Dicks.

                      F/A-18E/F BLUE RIBBON PANEL

    Mr. Dicks. Thank you.
    On the F/A-18E/F, you are going to have a Navy board that 
is going to look at this is it on March 12th?
    Mr. Douglass. We have already had them look at it. Thank 
you, sir, for asking that. I forgot to mention that inmy other 
discussion.
    It is not a Navy board, Mr. Dicks. When this problem came 
up, given all the cynicism that exists in this town today, I 
realized fairly quickly we had to have some outsiders take a 
look at this issue who aren't Navy people.
    Mr. Dicks. Right.
    Mr. Douglass. I went to the Air Force, and I said, send me 
your best aerodynamist. I went to industry, not the people that 
build that plane but their rivals, and asked them to send me 
their best aerodynamist and promise me they would give me an 
honest evaluation. I went to academia to find the best 
professors who teach aeronautics and said to MIT and other 
places, send me your best professors to look at this 
independently. I also went to the National Aeronautics and 
Space Administration. None of these people are on this program. 
They have no connection to it. Their jobs aren't going to get 
big if the program does well.
    That is what I called my Blue Ribbon Panel. They came in 
and they looked at the program. They looked at the test 
program. They have given me a report in writing that says the 
Navy is on track. This is not a significant problem. We can 
solve it.
    They did say this, though, Mr. Dicks, and I think this is 
important: That as we go into the high-performance regimes that 
are represented by this type of airplane, we don't have 
anywhere in our country, not in NASA, not in our universities, 
or not in the Navy, the kind of computer modeling we need that 
could have predicted this wing wiggle phenomena. So they said, 
number one, please don't throw away your flight test data. You 
need to keep it. You need to give it to the Air Force for the 
F-22. You need to keep it for the Joint Strike Fighter program. 
Secondly, between NASA and the Department of Defense, we need 
to do some more research to fill out our knowledge concerning 
complex aerodynamics and what happens to shock waves at these 
high G, high angle of attack regimes, for this kind of wing. 
The good news is, we are on track for the short-term, but need 
to do more in the long-term for future programs.

                              TOWED DECOYS

    Mr. Dicks. Tell me about the towed decoy? Now, this is, I 
think, very important because it is necessary to fool incoming 
missiles.
    Mr. Douglass. Yes, sir.
    Mr. Dicks. Because the F/A-18E/F is not as stealthy as the 
F-22 and F-117.
    Mr. Douglass. Yes, sir, I would remind everybody in the 
room, this part of what we are going to talk about is 
classified.
    [Clerk's note.--Classified discussion removed.]
    This is not rocket scientist work. It is not an F/A-18E/F 
problem. It is a generic towed decoy issue. We are going to 
have the same problem on the Joint Strike Fighter. We are 
working on the problem.
    Mr. Dicks. When it goes after the towed decoy, does the 
missile explode?
    Mr. Douglass. Yes, sir, if it has proximity fuse.
    Mr. Dicks. Do you only have one of these towed decoys?
    Mr. Douglass. Oh, no, sir. You have several of them.Let's 
say you are penetrating and Congressman Cunningham probably knows this 
story better than me--and somebody starts painting you, ------.

                 JOINT STRIKE FIGHTER ALTERNATE ENGINE

    Mr. Dicks. Regarding the Joint Strike Fighter, can you tell 
me a little bit about the alternate engine program and what you 
are thinking about there? As you recall, we did an engine 
competition on the F-100 and F-110 a number of years ago, and 
that turned out to save the government a lot of money. Now, are 
we wrong about this congressional directive? Can you give me a 
little feel for what it could do in this situation?
    Mr. Douglass. Yes, sir.
    As you know, on the F-15 and the F-16 in the Air Force, 
there was a competition and it was basically between General 
Electric and Pratt-Whitney. We referred to it in soldier talk 
in the Pentagon as the great engine war. The idea was to 
compete these two against each other, and there are obvious 
advantages of that.
    This year, the Congress, in the authorizing committees, 
passed a provision which said that we have to certify that we 
are going to keep a second engine on the Joint Strike Fighter 
all the way through installation and test in a test airplane. 
If we don't certify to that effect, we are going to lose $100 
million of Joint Strike Fighter money.
    That came as a surprise to everyone in the Pentagon, and 
created two camps within the Pentagon. There was one camp that, 
frankly, got mad about it and said, well, okay, if that is what 
they want to do, the hell with them. We will just not have an 
alternate engine, and we will take our $100 million hit. It 
turned out it was more than $100 million. We had already 
budgeted for the alternate engine, so we got our money back by 
cancelling the program. but to me, sir, that doesn't make 
sense. The highest risk item in the Joint Strike Fighter is the 
engine program.
    I am pleased to tell you that the Pratt-Whitney engine, 
which won the competition for the program, is doing well. I 
have been to Palm Beach and I have seen the engine that is 
going to go in the F-22 operate. The engine seems to me to be 
on track, but we have got to grow that engine by 40 percent. It 
is a high-risk item.
    Mr. Dicks. Forty percent?
    Mr. Douglass. Yes, sir, roughly 40 percent. It has to grow 
in different ways for the three variants of Joint Strike 
Fighter. I think it is prudent to carry an alternate engine at 
least through the next 4 or 5 years.
    After much debate in the Pentagon, we were able to extract 
from both the Air Force and the Navy promises that we will fund 
this in our next budget. Dr. Gansler has certified to that 
effect. I think we all agree that for now we need to keep that 
alternate engine program going.
    Mr. Dicks. How much will that cost us?
    Mr. Douglass. Sir, just to keep it the next couple of 
years, I think we added a couple hundred million dollars to the 
budget.
    To take it all the way through, sir, it is estimated to be 
between $1 billion and $2 billion extra.
    You might be interested to know, Mr. Dicks, I went to the 
airframe contractors and said, ``What do you guys think about 
this?'' They said, ``We think we need an alternate engine, Mr. 
Douglass.'' I said ``Are you willing to pay for it?'' They 
said, ``No. If you ask us to pay for it, we aregoing to one 
engine.''
    Mr. Dicks. So at some point 4 or 5 years from now you 
decide it is going to be the Pratt-Whitney engine or the GE 
engine. Will there be a competition?
    Mr. Douglass. No, sir. We don't envision a competition. 
What we envision is something like the following: If the Pratt-
Whitney engine stays on track and on cost, there may be a point 
in time where we say don't need the other engine, we are just 
going to stop it. On the other hand, if it doesn't stay on 
track, or if we see that we can gain significant competitive 
advantages in the production program, we may just go ahead and 
carry the alternate engine all the way on through. It will not 
be a second competition. It will be a decision to go forward 
with the alternate engine based on the status of the program as 
we see it. I would guess that best time to make that decision 
would probably be in the next 2 years.
    Mr. Dicks. Okay. Thank you, Mr. Chairman.
    Mr. Nethercutt. Mr. Cunningham.

                           BUILD AND CHARTER

    Mr. Cunningham. Thank you.
    Let me switch from aviation over to shipbuilding, ship 
repair, Mr. Secretary. And I want to thank you personally for 
your efforts in this arena. It doesn't mean we haven't locked 
arms a couple of times, but it means that we have really tried 
to work things out for the different entities.
    But the combat logistic force ships continually kind of 
fall at the bottom of the food chain, and I understand why, 
when you have got destroyers, you have got carriers, but yet 
the funding for these ships has fallen short, and as we look at 
a 546 ship fleet shrink down to, at the current rate, even 
below 270, we are talking about additional funds down the line. 
But the problem we have today is we keep putting things off, 
putting if off and when it comes time to pay all of the 
backlog, they know we don't have enough money. So what we have 
to do is we have to cut it out in infrastructure. We have to do 
all the other things necessary.
    I know you are familiar with the problem, and I asked the 
question of the Secretary this morning, about charter and 
build.
    Mr. Douglass. Yes, sir.
    Mr. Cunningham. We tried to do the same thing with the Air 
Force on the C-17s to where a company would come in, operate 
them and actually have Air Force pilots fly them, but in time 
of war they would have access to those C-17s for logistics. And 
the charter and build concept, do you see that as an option; in 
the future, do you foresee it as a possibility for savings 
where we could use that type of program, Mr. Secretary?
    Mr. Douglass. Yes, sir. Admiral Lautenbacher and I as well 
as Admiral Lautenbacher's predecessor, Admiral Pilling, and I 
looked very hard at that program. We think there are some real 
possibilities for the future. Not only do we think that the 
realities of the budget world lead us towards this approach, 
but we think that we would end up with a cheaper ship. In other 
words, one that was more like a commercial ship and less like a 
military ship.
    Unfortunately, there are some barriers to doing it. To make 
this economically profitable, we have to change the law on the 
length of time that you can lease a ship. Frankly, we have to 
convince some of our colleagues in the administration that this 
is the right way to go.
    We have put some placeholder money in the outyears of our 
budget. It is in the SCN accounts now, but it could be moved 
back into O&M, Navy if we could achieve consensus on this in 
the future.
    As you know, I have been doing everything I possibly can to 
find ways to keep our maritime industrial base healthy, and I 
see this as one of the components of that program. If they are 
commercial-like, these ships could be used by the Navy when we 
need them, and we could get some money back by letting 
contractors use them commercially if we didn't need them, 
things of that nature, innovative techniques.
    Connie, do you have anything to add to that?
    Admiral Lautenbacher. I just want to say that we support a 
balanced Navy, and we want to make sure that we recapitalize 
the combat logistics force for us. It is a critical issue for 
us. And as Mr. Douglass said, we have scraped together some 
money. We put in money for the ADCX in the outyears. It 
represents seed money. It represents a way we could get this 
started should we be able to achieve consensus in a way to do 
this that makes sense from a business point of view. We do see 
it as a way to be more efficient and to obtain the advantages 
of commercial techniques for both building and maintaining 
these ships. So it is a viable alternative for us.

                           PRIVATIZING DEPOTS

    Mr. Cunningham. One of the things that I am going to--and I 
am going to have to work with my colleague from Washington on 
this, as well as my colleague like Duncan Hunter, but when we 
look at cost savings, and doing it without a big increase in 
the budget, which we are limited to in the balanced budget act, 
there is a lot of us who feel there are just sensible ways to 
do things. For example, the depots, we have got one at North 
Island, the key is to ensure the people understand that because 
of privatizing at, say, a depot, you could do repairs cheaper, 
which actually gives you more money to operate on the product 
so that workers actually keep their jobs. That is going to be a 
big sale thing. The same thing with--in our public yards, where 
your cost is $900 an hour, and the private yard is $300 an 
hour, you take those savings and you actually buy more product, 
but you get someone up in Washington State that has got a 
public yard, it's going to take a big not only PR but an 
assurance that it is going to be better for them, not worse, to 
do that. And that is the direction I think you have got to have 
some great savings.
    The BRAC that is--and I made this statement earlier--that 
the President wants for 2001, 2005, to be able to boost up our 
procurement to $60 billion is, to me, Mr. Secretary, in my own 
personal opinion, kind of smoke and mirrors. You won't reap any 
benefit from that for another 5 or 10 years, and to say that is 
what we are waiting for to boost up our funding for procurement 
is kind of smoke and mirrors. And many of us feel that when OSD 
and the White House get involved with it, because of the past, 
we are afraid that the politics will come into it again. And 
the only way that many of us, I think, would support it is to 
let the military have a cut at it Because they know, they know 
where they have got some excess without the politics coming in 
with OSD and with the White House into it, if they could go 
through and offer this up and work with the Congress so that we 
could eliminate that, that might be a possibility. But I know a 
lot of us would resist another BRAC. And I don't think you have 
got a chance in sugar to, you know, get another one through the 
Congress.

                        CONTINGENCY DEPLOYMENTS

    Another area that I think is important, that hasn't been 
mentioned here, is that we cannot continue to have 
contingencies and take it out of an already low budget, the 
emergency supplemental. We just can't afford to take and offset 
that thing. You look at, and I don't know what it costs us in 
Iraq, but I can imagine now, we have got the savings--you know, 
you have got a fleet deployed up to, what, 50.2 days or 
something or 2 man days per quarter, but when you go up to 75, 
you know, it costs a million dollars a day to operate a 
carrier, and then the air wing and the rest of the thing, those 
costs go up.
    We need your help to work with the President--the President 
has got to find a way to fund that instead of just taking it 
out of the hide of DOD in which all of our services go down at 
an already low budget. So--but I want to thank you for those 
kind words, and I have got to sit there and work with my 
colleagues, but I want you know, I personally thank you for 
that.

                           F/A-18E/F AIRCRAFT

    The last think I would say is that the A-4 Skyhawk, when I 
first test-flew that, I put it into dive. I went supersonic, 
which you are not supposed to do, and honked back on the stick 
and put it in a dive, and I had two F-4s comingout that I was 
going to attack, and I had an exact position where I was going to roll 
in behind him. I started at 50,000 feet, so there is no way they could 
pick me up on the radar, and I was going to get their knickers real 
quick and pull back on the stick, and ended up going like this because 
the tail wasn't active, and you end up with them going up here, and the 
next thing you are looking at is pulling out of this dive because of 
the water, and you have got to trim.
    The F-5/E has an inverted pitch hang-up. You get up there, 
and the airplane wants to go like this, and they have actually 
lost airplanes like that. The F-16 had a deep stall condition 
that the Air Force had, and even with the new one with the 110 
engine we went into problems with it.
    I have got to go up and vote, but the F-18, like I said, as 
strong as I feel about the F-14, if I was going to go to a 
squadron, if I was still in the service, I would want to go to 
an F-18E/F squadron rather than an F-14 squadron. It is that 
good an airplane.
    Mr. Douglass. Thank you, sir. We appreciate your 
willingness to go out there and fly the airplane. Your 
testimony means a lot to us.
    Mr. Cunningham. I will do it again, Mr. Secretary.
    Mr. Nethercutt. Mr. Visclosky.

                             300 SHIP NAVY

    Mr. Visclosky. Thank you, Mr. Chairman.
    Mr. Secretary, is the Navy still committed to a 300-ship 
Navy?
    Mr. Douglass. Yes. That is more in Connie's area than mine, 
but I would say, yes.
    Would you, Connie?
    Admiral Lautenbacher. Yes, sir. We don't want to get locked 
in on the number 300. We have just gone through the Quadrennial 
Defense Review, which has affirmed the need by the President 
and the Secretary of Defense to have our 12 carrier battle 
groups, our 12 amphibious ready groups, 116 surface combatants 
and 50 attack submarines, as well as the strategic force that 
we have, which is, of course in support of START I and START 
II. So that is the core--kind of core capability that has been 
decided on as necessary to meet the needs of national defense.
    When you add in the combat logistics force that Congressman 
Cunningham was talking about and the support ships that make 
that a blue water worldwide capability, the number is around 
300. So what I would like to say to you, it is the capability 
brought to you by a roughly 300 ship Navy. And I mean, you 
know, one or two up or down. So we are not locked into the 
number.
    Mr. Visclosky. You don't have an explicit number, but is 
300 the ballpark we are talking about?
    Admiral Lautenbacher. We are talking ballpark with 300. 
That meets the need of the Quadrennial Defense Review strategy, 
with the shape, respond and prepare strategy which is 
articulated by Secretary Cohen.
    Mr. Visclosky. Looking at the current FYDP, we are 
scheduled to be at 306 ships. I am not fixated on 300----
    Mr. Douglass. Yes, sir.
    Mr. Visclosky But we are scheduled to be at 306 in the year 
2003. Looking at the outyears as far as the projections for 
shipbuilding and ship retirement, by the time we get to the 
year 2015, which is not all that far away given the lead time 
for construction, we begin to fall below that ballpark figure. 
I appreciate the fact that there may be a bulge in the 
shipbuilding program.
    Mr. Douglass. Yes, sir.
    Mr. Visclosky. Clearly there have been all of these things 
we have had to work out over the last decade now. What happens 
to the shipbuilding budget? Is there a bulge after these years 
we have looked at?
    Mr. Douglass. There are two issues here, sir.
    Mr. Visclosky. Will there be a necessity for a bulge at 
some point?
    Mr. Douglass. In one respect, in terms of the numbers, 
there will have to be a bulge. In other words, if we are going 
to keep the force structure up, we are going to have to buy 
more ships. Thereis no question about that.
    The question is how big a bulge is there going to be in the 
dollars? My challenge is to be able to design future classes of 
ships that cost substantially less than the warships we have 
today, but still allow us to take advantage of the revolution 
in military affairs; in other words, better performance, but a 
lot less cost.

                          SHIPBUILDING PROGRAM

    That is what we are trying to do, essentially, with our 
shipbuilding program. It is not very well understood in the 
United States today, but we are going through a revolution on 
how you build ships and how you design them as well as how you 
manage them over their life cycle. There is significant on life 
cycle costs.
    Just to give you a couple of data points, a DDG-51, which 
is one of our main surface combatants today, has a crew of over 
350. Our next surface combatant will have a crew of less than 
95. That is going to give us a tremendously lower life cycle 
cost. Clearly, wherever we can substitute technology for crew, 
we are doing that. We are also trying to drive down the costs 
of construction of the ships through whatever means we have at 
our disposal. For example, by buying the ships on multiyear 
contracts, I can save substantial amounts of money. Our 
challenge is going to be to produce our next class of ships in 
a way that takes advantage of all of these things.
    The other thing is the old paradigm used to be that 
basically the Navy designed the ship in the Naval Sea Systems 
Command. We gave the plans to the contractors and said, bid on 
this, and they bid on them. They would flesh out the designs, 
then we would compete it, and the winner would win the 
contract. We had a lot of problems with that paradigm. Number 
one, there were always disputes when something went wrong 
later. Well, this is your design. No, it is your design.
    Right now we are asking that for the next class of ships 
the contractors will be responsible not only for the designing 
of the ship in its entirety and all of its weapons systems that 
go on it, but also the whole life cycle maintenance of the 
ship. Through techniques like this we are going to be able to 
get the costs down, and if we are not, sir, the size of our 
Navy will go down.

                            DD-21 DESTROYER

    Mr. Visclosky. Mr. Secretary, I appreciate that frank 
comment, and I appreciate the importance of life cycle costs. 
My concern, looking at the outyears, is our human ability, not 
doubting your expertise or in this case the Navy's to try to 
ratchet those costs down in acquisition.
    I have a prepared question for the record about the Navy 
bumping up on the cap for the SEAWOLF. Not to be derogatory, 
but we tend on all of these ship construction projects to end 
up spending more than we anticipate. Looking at the outyears, I 
find it difficult to believe it is going to be cheaper.
    One of the questions I have is on the DD-21 teaming 
arrangement and trying to get the best value for our dollar.
    Mr. Douglass. Right.
    Mr. Visclosky. If you have a teaming agreement between 
Ingalls and Bath Iron Works, are you going to be able to have a 
vigorous competition?
    Mr. Douglass. Yes, sir.
    Mr. Visclosky. How are you going to do that?
    Mr. Douglass. Well, I think what you are referring to is 
the Navy issued a for-comment RFP on our DD-21 some months ago 
to see what industry thought about it. In response to that, 
three contractors got together and declared they were going to 
form an exclusive team. The team includes Bath Iron Works, 
Ingalls Shipbuilding in Pascagoula, and Lockheed Martin.
    The competitor to Lockheed in the systems integration part 
of the project is Raytheon, Raytheon has gone to the Justice 
Department, to the Department of Defense, and to others and 
said that they feel that that exclusive team is not in the best 
interest of the government and asked us to look into it.
    We have looked into it, and we have looked at some of the 
other issues that we face from the overall consolidation of 
industry. Four or five years ago, I would have had maybe five 
integration houses I could go to. Now I have two. We recently 
reissued that RFP and we said, among other things, in the front 
end of the program, there can be no exclusive teaming. In other 
words, those three contractors that I mentioned to you are 
certainly welcome to team together, but they cannot declare 
themselves exclusive.
    If either of those shipyards would want to cut a separate 
arrangement with Raytheon and do what we call ``firewalls'' 
where they have one team at the shipyard that deals with one 
integrator and another team at the shipyard that deals with the 
other integrator, they are welcome to do so.
    Our actions are based, sir, on a fundamental principle, and 
that principle is that in the world of business, these business 
decisions are best made in the board rooms of America's 
corporations and not by bureaucrats in the United States Navy.
    Mr. Visclosky. When you say ``exclusive,'' if the two 
companies team, setting aside for a minute Lockheed, who is 
left to compete?
    Mr. Douglass. You mean in the shipbuilding part of it?
    Mr. Visclosky. Yes.
    Mr. Douglass. Avondale could build a ship. Newport News 
could build a ship. NASSCO could build a ship.
    Mr. Visclosky. Do any of those yards make surface 
combatants?
    Mr. Douglass. They don't now, but there is no reason why 
they couldn't.
    Mr. Visclosky. Do you anticipate that they will?
    Mr. Douglass. I think they will. I think at least one of 
them will get into the equation. I don't want to get into 
hypotheticals here, sir, but you could find a team that might 
involve either one of the two shipbuilders that were on the 
Lockheed team deciding to pick somebody else, and then in that 
arrangement have an arrangement with Raytheon. We don't know 
what industry is going to do on this, but I have committed to 
doing everything possible to gain competition in this program.
    I will say this, though, Congressman, and that is that we 
also have a clause in this RFP that says that if you don't come 
to the table at this part of the program you cannot come 
later--and that is important to put into context. What we are 
talking about here, sir, are 1-year contracts for preliminary 
design that we anticipate will be about a $6 million contract 
each. We are not talking about a contract to actually go out 
and build the ships, we are just talking about industry giving 
us their ideas.
    If somebody starts being petulant with us and they won't 
come in and bid, hoping to force us into something, we reserve 
the right to stay with whatever team does come in and bid. 
Within that team, there are lots of tools in my tool kit to 
generate competition.
    Mr. Visclosky. Okay.
    Mr. Douglass. In other words, you have got to have so much 
of your subsystems under competition and that sort of thing.

                   SHIPBUILDING INDUSTRIAL BASE STUDY

    Mr. Visclosky. Mr. Secretary, if I could, the Navy and DOD 
apparently has done an industrial-base study for shipbuilding. 
When are they going to release that report?
    Mr. Douglass. Mr. Congressman, we will be glad to brief you 
on that report at your leisure, but we are not going to 
publicly release it, for the reason that it is full of 
proprietary financial information from all of the shipyards as 
to what their hourly rates are and what they are projected to 
be into the future. If these were exposed to public disclosure, 
it would create competitive advantages between these yards. 
They would know what the other guy's plans are.
    Mr. Visclosky. You won't issue a summary?
    Mr. Douglass. We won't make it public, but we will be glad 
to brief you.
    Mr. Visclosky. You won't have the summary report 
generically about the industrial base?
    Mr. Douglass. Yes, we might release some sort of a generic 
summary. We do not expect to be making public the actual 
details of the report. But I will be glad to either now, or at 
some point in the future, generally tell you what is contained 
in the report.
    Mr. Visclosky. Mr. Chairman, if I could ask just one more 
question on the shipbuilding.
    Mr. Nethercutt. Yes.

                          CVX AIRCRAFT CARRIER

    Mr. Visclosky. On the CVX, in the Navy's fiscal year 1999 
posture statement, on page 51, you describe the CVX as a 
nuclear-powered carrier.
    Is this the appropriate time for the Navy to conclusively 
state that the CVX will be a nuclear carrier?
    Mr. Douglass. I don't recall conclusively saying that in my 
statement.
    Mr. Visclosky. It says, the CVX will be the most 
technologically advanced nuclear-powered carrier the Navy has 
ever developed.
    Mr. Douglass. Oh, that is the Secretary's statement. Oh, I 
am sorry.
    Mr. Visclosky. Okay.
    Mr. Douglass. I thought you were talking about my 
statement.
    Mr. Visclosky. I am sorry. No.
    Mr. Douglass. I want to quickly say, there is a typo in 
mine that I will correct for the record, and I apologize for 
that. I thought maybe you were pointing out that there is 
another mistake that slipped in there. Let me tell you where I 
am coming from on that, sir.
    This a model, a conceptual model of what CVX might look 
like. You can see this is radically different than a Nimitz 
class carrier. On this model the catapults are down here so we 
could catapult airplanes from this lower deck at the same time 
airplanes are landing on the upper deck. You could also egress 
airplanes from the hangar deck without elevators onto the 
catapult area.
    Please notice these things on the side. If you look at it 
from the side, it has a very, very low radar cross-section. 
This is the equivalent of the sea-borne B-2, if you will, or 
stealth fighter. We believe this is what is going to carry us 
into the next generation.
    Mr. Visclosky. I understand.
    Mr. Douglass. My own personal opinion, is that it is going 
to be big, and will be nuclear.
    Mr. Visclosky. Okay. The GAO has recently raised the issue 
of nuclear costing 66 percent more. You don't have any other 
nuclear-powered surface combatants, as I understand it.
    Mr. Douglass. Yes, sir.
    Mr. Visclosky. And you have, I think, pretty clearly 
enunciated it will be a nuclear ship.
    Mr. Douglass. I am just expressing my opinion.
    Mr. Visclosky. Isn't that something that is still subject 
to analysis?
    Mr. Douglass. It is, sir.
    Mr. Visclosky. Isn't that whole process prejudiced here? 
You didn't say it, but the Secretary said it. We take it, it is 
going to be nuclear.
    Mr. Douglass. Sir, my saying it to you is meant in the 
interest of not trying to beat around the bush or be ambiguous 
with you.
    Mr. Visclosky. No. I appreciate that.
    Mr. Douglass. I sometimes get into trouble with this, I 
tell it the way I see it. I think it is going to be big, sir, 
for the reason that this ship has got to go anywhere in the 
world. If you have ever been out on a carrier in a Sea State 5 
storm in the North Sea, you realize that for us to be able to 
launch the airplanes off of this deck and recover them and be 
able to operate on a 24-hour basis, you can't be bobbing around 
there like a cork. You have got to have enough stability.
    Mr. Visclosky. I am not disputing the size. I am asking 
about the propulsion system.
    Mr. Douglass. On the propulsion system the issue that you 
run into there is that, when you are nuclear, you get a lot of 
speed, a lot of power and a lot of mobility to go anywherein 
the world you need to go fast without anybody going with you if you 
have to. When you are not nuclear, not only do you have to carry all 
the fuel for your airplanes aboard, but you have got to carry the fuel 
for the engines of your own ship. That creates a complicating factor 
for the long term.
    We are still doing the studies, and in all honesty, I am 
trying to keep my design folks open-minded on this. But from an 
old soldier who has been around a long time, and seen a lot of 
these things come and go, my guess is it is going to end up 
being nuclear.
    Mr. Visclosky. And I think it would be----
    Mr. Douglass. This is the requirements issue.
    Mr. Visclosky. I am very sensitive about the issue of 
whether it is the corporate Navy who designs the ship or the 
Office of Naval Reactors. Designing the ship is the corporate 
Navy's job and that is your responsibility.
    I am opposed to the reactor system and the Office of Naval 
Reactors dictating to the United States Navy what the power 
plant and what the ship is going to look like.
    Mr. Douglass. Yes. Let me just give you a perspective on 
that.
    Mr. Visclosky. I think too often ships have been built 
around a reactor because nobody at Naval Reactors has bothered 
to tell anybody in the United States Navy or the Congress what 
is going on.
    Mr. Douglass. For an Air Force officer, I am kind of an 
unusual duck because when I was a young Captain, I worked for 
Admiral Rickover for 4\1/2\ years, and I know from firsthand 
experience, I went through the interview, I know Mrs. Rickover, 
and I know what those Rickover years were like.
    We now have an Admiral in naval reactors by the name of 
Skip Bowman, and he is a different kind of person. I am not 
taking away from Admiral Rickover. I nominated Admiral Rickover 
for the Navy's Acquisition Hall of Fame, and his picture hangs 
outside my office, and God bless him. You know, in my early 
life he played a significant leadership role. But Admiral 
Bowman is a different kind of person and the way we work 
together with the nuclear folks today is different than it was 
in the old days.
    Admiral Rickover was getting nuclear power into a Navy that 
didn't want it. Now you have a Navy that basically does want 
it. The interaction between my design people and his office is 
a good one, and I feel very good about my relationship with 
Admiral Bowman.
    Connie, do you want to comment on that?
    Admiral Lautenbacher. Yes. I think it has changed 
significantly.
    If I could just go back and answer the last question, the 
study that we are involved in is a three-phased study. The 
first phase was completed last year, and it basically dealt 
with the combat capability you are going to need and the size 
of the air wing. That sort of determines the platform then. So 
that has been decided and approved through the Department of 
Defense.
    We have another phase that is going on right now, and what 
you are hearing is the battle that is going on in the 
background about what the propulsion system should be, and that 
won't be decided until September----
    Mr. Visclosky. Okay.
    Admiral Lautenbacher. Or October when this next phase is 
completed. And there are a number of, you know, competing 
interests putting their stories on the table, and it is being 
reviewed right now.
    So that is kind of where it is. And I think as far as 
designing ships around a nuclear plan, as Mr. Douglass has 
said, that is not the case. I mean, we are looking at the 
combat capability and the requirements from a warfighting point 
of view.
    Mr. Visclosky. Okay.
    Admiral Lautenbacher. If nuclear power is the right answer, 
then we could, we should look at it very carefully, andwe need 
to be able to build a system that supports the combat capability, not 
the other way around. I think all of the Navy leadership is dedicated 
to that.
    Mr. Visclosky. I am pleased to hear you say that.
    Mr. Douglass. Propulsion has been a tough issue across the 
board. As you know, we have programs to improve the efficiency 
of our gas turbines, and they are very controversial, too. I 
have to fight all the time to keep those programs funded, 
because there is a tendency to let the future take care of 
itself and not put money aside for it. We are staying open-
minded, sir. I am probably influenced because I worked for 
Rickover for those 4 years.
    Mr. Visclosky. Thank you.
    Mr. Douglass. His legacy lives on.

                       YEAR 2000 COMPUTER PROBLEM

    Mr. Nethercutt. Mr. Secretary, in your testimony you note 
that no additional new funding is requested for the year 2000 
computer problem that faces the government and faces the 
country.
    Mr. Douglass. Yes.
    Mr. Nethercutt. How much do you expect to spend on that 
problem, the year 2000, in the fiscal year 1999 budget?
    Mr. Douglass. Frankly, sir, we don't know. All we know is 
we have been told to take it out of our hide. I have, in this 
respect, been wearing two hats. I am not only the Navy's 
Acquisition Official, but for a while I was the Navy's Chief 
Information Officer because the one we had left. I had to 
``double-hat'' myself. I just appointed a new person to be our 
Chief Information Officer. This is the number one task I gave 
her. You have got to go out and figure out, make sure we are on 
the right track for Y2K.
    I worry about a problem of this complexity, when you tell 
people to take it out of their hide. You always wonder if there 
isn't somebody out there who won't tell you they have got a 
problem because they don't want to take it out of their hide.
    We are making estimates right now, sir. I just want to tell 
you, I don't think we really know to the same degree of 
fidelity that we know, for example, how much this airplane is 
going to cost or that airplane or the AAAV.
    We are being very vigorous about this effort. I can tell 
you that it has the personal attention of the Deputy Secretary 
of Defense. He calls me to meetings on about an every-two-week 
basis and makes me show him where we are. I think the Navy is 
making good progress on it. We know what most of our problems 
are, and we have fixes for most of them.
    One thing that we do worry about is how are we going to get 
all the ships back into port and get the fixes done in time to 
get it implemented. We are working hard on that problem.
    Mr. Nethercutt. And what is the cost, and how long will it 
take? Are we going to have any surprises relative to 
implementing a solution?
    Mr. Douglass. Right. Jeff, do you want to comment on it?
    General Oster. Yes, sir. For the last 2 years, I have made 
it a special interest item in the Marine Corps and have had the 
folks bring in to, as what we call in our program objective 
memorandum development phase, bring in to me everything that 
they know about Y2K, and I made it very user-friendly, because 
I said you bring anything in and I will fund it. There is no 
extension of this beyond the end date. The good Lord has fixed 
that for us.
    So the problem is the complexity of what is involved in it, 
and the learning process that goes on. We have plussed up about 
$5.5 million, and in our major systems, mainframe kinds of 
systems that run our logistics and our manpower, I think we are 
in pretty good shape. We have got the test cycles funded. We 
are ready to go.
    It is the interaction, and most recently it has been the 
local and the wide area network and even the PC that you 
pluginto the local and wide area networks that we are starting to learn 
more and more about, because the computer itself, PC, also has to be 
Y2K-compatible to work. Those issues are ongoing now, and the largest 
dollar amount would be if we had to replace all of the PCs.
    Now, the good news there is that everybody doesn't need to 
be on-line in order to do the kinds of business that we need to 
do. But it is a very interactive problem. I have got 152 
systems that are mission-critical. Eighty-eight of them are 
complete, and I am satisfied with them. But I have got 48 of 
them that are in the process of discovery right now and how 
they interact. So this is an area that we are very concerned 
with. But the honest answer is it is an area that even the best 
technologists are having trouble with, and it is hard to give a 
dollar figure that fixes the problem.
    Mr. Douglass. My concern, Mr. Chairman, is that General 
Oster gave you the Marine Corps numbers. In the total 
Department of the Navy, we have 2,387 systems that we think 
need to be looked at. My worry is what if it is 2,389, and 
those other two are mission-critical? We are looking at this 
every way we can to comb through it. We are taking it very 
seriously. You can see from Jeff's comments that he is combing 
through it. I know Connie is doing the same thing.
    We have written letters to our Fleet Commanders. We have 
done everything we think we can reasonably do to find all of 
the systems and try to get the fixes in. It has the personal 
attention of the Deputy Secretary of Defense. I think the 
Department is approaching this with the proper attitude.
    Mr. Nethercutt. Have you set a target date any sooner, 
hopefully, than the year 2000?
    Mr. Douglass. Yes, sir. Our orders are to be compliant by 
the end of 1998.
    General Oster. 1998.
    Mr. Douglass. There is going to be a big test in early 
1999.
    Mr. Dicks. Fiscal year or calendar year?
    Mr. Douglass. Calendar year. Our worry is that we will have 
some ships at sea when the tests begin in 1999 that haven't 
received the modifications. We have had to ask for some 
waivers, but we will have all of them back into port and get 
them fixed before the year 2000. It is just getting them all 
ready for this test at the end of calendar year 1998.
    General Oster. OMB has set 31 March 1999 for the entire 
government.
    Mr. Douglass. For the test.
    General Oster. For the test. And the Deputy Secretary 
backed that up 90 days for us for our deadline to shoot for so 
we would have the time between.
    Mr. Nethercutt. I think that is good planning. I think that 
is smart to do.
    Mr. Dicks.
    Mr. Dicks. Yes. This is a software issue; isn't that 
correct?
    General Oster. Sir, it is a complex issue in that, yes, it 
is a software issue, but much of the software, especially in 
combat systems, is really hard-wired into the system. So there 
is a hardware component also.
    Mr. Dicks. As well?
    General Oster. The basic input/output system, the BIOS, of 
the computer that runs the programs has got to be able to 
recognize the year 2000 also. And that is where the desktop and 
work station computers come in, because they are not, even the 
ones being sold today, are not guaranteed to be year 2000-
compliant.
    So it is very complex. When we first started looking at it 
years ago, we focused on software. That is why in terms of the 
major mainframe systems such as our payroll and logistics 
systems, we are in pretty good shape, because we looked at the 
software because we were indifferent to the hardware that it 
was playing on. It has gotten more and more complex as we have 
looked into itbecause there is a hardware component to it. In 
combat systems where you have hard-wire algorithms, that can also be 
affected in terms of the year 2000.
    Mr. Douglass. Also, Mr. Dicks, there is the dilemma that we 
have that not every system nicely rolls up to 2000. What do you 
do about systems that you had planned to deploy, let's say, in 
the first 6 months of 2000? So you have got the old system you 
are going to hang on for a couple of months. You don't want to 
invest the money to fix the old one because you are going to 
throw it away, and the new one isn't ready yet. We are looking 
at accelerating things.

                       TRIDENT SUBMARINE BACKFIT

    Mr. Dicks. I asked the Secretary and the CNO this morning 
about the Trident program. Can you tell me where you see the 
Trident program as it relates to the 18 versus 14 and the D-5 
and the backfit program? And I realize that there are some 
uncertainties here because of the Russian Duma.
    Mr. Douglass. Why don't I let Admiral Lautenbacher give you 
the requirements part of it.
    Admiral Lautenbacher. Let me talk about the 14 and the 18.
    We, of course, have to maintain the capability of 
supporting the national strategic strategy, START I, START II 
and whatever may follow.
    Mr. Dicks. Right.
    Admiral Lautenbacher. And the current force structure and 
the current agreement that is in place is 18 boats, 
essentially, to support the START I. We have in our program, 
however, committed and funded to program 14 of those boats to 
the D-5 configuration. That is a funded program, committed to 
and locked in. What is at issue is between the 14 and the 18.
    What we have done is for the last couple of years has 
maintained the hedge to keep that force at the level of 18. We 
have those boats now on line.
    If we had to keep those boats forever and ever, and we were 
struck at the 18 level, we would have to convert them to a D-5 
program. That program is not funded. That is a large 
multibillion-dollar program that would occur after the FYDP.
    Mr. Dicks. Not funded for the last four of them, but they 
are funded for the next four?
    Admiral Lautenbacher. Four are funded; from 10 to 14 are 
funded.
    Mr. Dicks. Right.
    Admiral Lautenbacher. Fourteen to eighteen we are 
maintaining a hedge to be able to do that. We can do that for 
the next couple of years, and then a decision has to be made. 
Either we keep the 18 boats, or we do something else. But right 
now, we are funded to convert 14 of our boats to Trident or to 
have Trident D-5 capability in 14 of our boats. That includes 
four conversions. That is the program, and we are maintaining 
the hedge and will continue to for 18 boats in the force. So 
that is the requirement.
    Mr. Dicks. But that is unfunded at this point?
    Admiral Lautenbacher. Fourteen to eighteen for D-5 is 
unfunded, yes, sir.
    Mr. Dicks. Okay.
    Now, how are we doing on the D-5 program itself? Last year 
we didn't quite get what the administration requested, but we 
had the foreign buy and then the domestic buy for the U.S. Navy 
and then the British. Is the D-5 program okay?
    Admiral Lautenbacher. We have funded the D-5 program to 
maintain continuity the best that we can. We used the funds 
that we were authorized and appropriated last year to keep the 
sub component lines and the assembly of the missile itself 
going. We are asking, again, this year, for five, which, when 
combined with the foreign buy, is the right number to keep the 
industrial base going.
    Because of the fact that there was a shortfall in the 
funding that we needed last year, there will be one sub 
component line that in the future we will have to spend some 
extra money on to get started again.
    So we have--we have taken our money, I would say, as 
prudently as possible to keep the sub components working. 
Theassembly line is going. The money we are asking for this year is for 
five missiles, but there is enough money in there to keep our--three of 
the four sub assembly lines or critical component lines going. So I 
think this is a prudent program that we have submitted for you this 
year, sir.
    Mr. Douglass. It is important, Mr. Dicks, the line is 
broke. I mean, if we don't get that subcomponent started again, 
you are going to have all the other pieces but not these sub 
components for the last 40 some missiles.
    Mr. Dicks. Well, you are going to get that fixed, aren't 
you, Mr. Secretary?
    Mr. Douglass. Well, we are trying, sir.
    Mr. Dicks. Is this a serious, difficult problem that can't 
be fixed?
    Mr. Douglass. It is not something that can't be fixed, sir. 
I am just trying to say we shouldn't trivialize it.
    Mr. Dicks. So you think it is a serious matter?
    Mr. Douglass. Yes, sir, we have to fix it.
    Mr. Dicks. What is your plan to do that?
    Mr. Douglass. Our plan is that we have added some money 
this year and we plan to add more money next year to our budget 
to fix it.
    Mr. Dicks. To fix this problem?
    Mr. Douglass. Yes, sir.

                           SHIP SELF-DEFENSE

    Mr. Dicks. One of the issues Mr. Young, our Chairman, 
raised this morning that hasn't been raised here this afternoon 
is on the question of ship self-defense, and this has been a 
concern of this Committee. You and I, Mr. Secretary, had a 
chance to talk about this, very fast Russian cruise missile. I 
am not sure we can get into it at this level, so I am not going 
to mention the name, but it is one that I have been briefed on 
by the CIA, and this is one that they are talking about selling 
to other countries around the world. So all of a sudden, you 
are going to have a major threat, I believe, to surface ships, 
including aircraft carriers, that could affect our ability to 
operate.
    Now, that is why we feel here that this ship self-defense 
issue is one that deserves serious consideration because it is 
only a matter of time, frankly, until other people can develop 
stealthy missiles like we are developing. And so we are 
concerned, again, that the budget falls back from five ships 
that were supposed to be given self-defense to two.
    Mr. Douglass. Yes, sir.
    Mr. Dicks. I mean, we heard a little bit this morning about 
that. Can you give us a little more detail about what is 
happening here?
    Mr. Douglass. Yes, sir.
    Mr. Dicks. Because I know the budget is very difficult.
    Mr. Douglass. Yes, sir.
    Mr. Dicks. But this one seems to me it is one we shouldn't 
ignore.
    Mr. Douglass. Yes, sir. Let me begin by saying, we agree 
with you. This Committee has been in the lead on this issue, 
and consistently, as I said to you last year, you have been 
right on this issue. You won't get any disagreement from us 
about the degree of priority.
    Specifically, what happened on the SSDS program this year 
is a kind of good news/bad news story. The good news is we did 
an operational test on the USS ASHLAND that was dynamite. It 
showed that against the slow-speed skimmers, we really have a 
terrific system. Next year we are going to look at the high-
speed sea skimmers, so we have got another step in the program 
next year.
    Mr. Dicks. I am going to have to vote. You finish the 
answer, and you and I can talk about it some more.
    Mr. Douglass. Yes, sir. What happened to us is when we did 
the test, we found that we have this great capability, but we 
need to build in a few more things. The price went up, and when 
we looked at how much money we had in our budget, instead of 
being able to buy five, we canonly buy two. This was very late 
in the budget cycle and we couldn't adjust the outyears. Our commitment 
to you is we are going to adjust the outyears.
    Mr. Dicks. Mr. Kilian will be very pleased to hear that.
    Mr. Douglass. We will get this fixed. For those of us that 
are here, and I have said this to the Members before, but I 
think it is important to say it to Mr. Kilian as well. I have 
been a staffer for the Congress myself over the years, and what 
people in the Pentagon forget is the continuity in America's 
national security is not in the Pentagon. It is in the 
Congress. There are men and women who sit on these Committees 
for 15, 20, 30 years. They see Secretaries come. They see 
Secretaries go. They see admirals and generals come. They see 
them go. Where the continuity lies is in these Committees, and 
that is the great strength of our system. There are staff 
people like Dave, who have been here for a long time and see 
the big picture and the long picture, and they play a damn 
important role in American security, and so we listen.
    I used to work for Senator Nunn, and he used to 
occasionally remind me of how many Secretaries he saw in his 28 
years in the Senate. I am mindful of that, sir, and we make 
mistakes sometimes and sometimes our cycle is awkward. When we 
find something out late in the cycle, and everybody has got all 
the charts done and all the papers done, and they don't want us 
to change. We will fix this one.
    Mr. Nethercutt. Good. I think it is worth fixing, Mr. 
Secretary.
    Mr. Visclosky.

                       TACTICAL TOMAHAWK MISSILE

    Mr. Visclosky. Thank you very much.
    Mr. Kilian is a Notre Dame grad and I don't think has ever 
made a mistake. So just for the record, we might put that in.
    Mr. Secretary, I have heard that you may have an initiative 
as far as the Tactical Tomahawk program. Do you want to talk 
about that?
    Mr. Douglass. Yes, sir, we do. Would you like me to explain 
it?
    Mr. Visclosky. If you could in a little detail, please.
    Mr. Douglass. We had a program, sir, that was basically to 
take some of the Tomahawks we now have, our older Tomahawks, 
and rebuild them in a modernization program. We were also at 
the same time finishing the buy-out of the last of our older 
style Tomahawks, and we had contract options with our 
contractors that build the Tomahawk. The contractors came to us 
and said, instead of us building the last year of the old 
missile, why don't we take this money and let's design a newer, 
much cheaper and more capable Tactical Tomahawk so that you end 
up with the current inventory of older missiles, and add newer 
missiles. The newer ones have more capability than the old 
ones. Through this new program, for the same amount of money 
that you were going to spend in rebuilding the old missiles, to 
give you about 1,200 low-cost Tomahawks.
    We looked at this. We took a long look at it last year. It 
looks like a good deal for us. We have proposed a reprogramming 
to Congress that was supposed to come up concurrent with our 
President's Budget request. I am not sure if it has arrived 
here in the committee or not yet. If not, it will be arriving 
imminently. It has been all the way through all the approval 
loops in the administration. This reprogramming allows us to 
take the production money that we have for the last buy of 
exiting Tomahawks and turn them into research and development 
dollars. There is a substantial industry contribution to this 
program. In other words, it is a cost-sharing program. It would 
be to build about 1,200 low-cost Tomahawks. I think it is about 
$560,000 per missile instead of about $1.2 million per missile.

                        SSN-21 SEAWOLF SUBMARINE

    Mr. Visclosky. Mr. Secretary, how does the Navy plan to 
deal with the SEAWOLF cost cap situation?
    Mr. Douglass. Well, sir, the good news on the cost cap is 
we have consistently stayed under the cost cap. I meetwith the 
independent cost team about every 2 weeks. Not only does my program 
office come in and tell me they are under the cap, I have this 
independent team of auditors who are independent of my submariners, 
also come in and give me their views. They have both consistently 
monitored this, and the amount that we are under the cap has ranged in 
my 3 years from about $30 million up to about $100 million.
    What we have run into, though, sir, is that as we near the 
end of the program, we clearly do not need any additional money 
from the Congress to finish the program. But what we have found 
is people are now going back and looking at decisions that were 
made 5 or 6 years ago, and they are saying things like, well, 
at the time the cap was established, you should have put this 
or that in the cap, so there has been some discussion on that.
    Last year, the Congress raised the cap a little bit to 
recognize that some of the old money that was in the program 
before the cap was established should have been put into the 
cap.
    As we get down to the end of the program, we may have to 
make another one of those adjustments, depending on what people 
think. But I want to really clearly emphasize, this is not new 
money from Congress. This is just bookkeeping on old money. So 
we have stayed under the cap.
    I would also like to say, sir, too, that at some point 
these caps become counterproductive. Early in a program, they 
have a lot of value. If you think the program is starting to 
spin out of control, it is a way the Congress can say, now, 
look, guys, this is it. We are only going to give you this 
much, and if you can't do it for that, then, by God, you know, 
you are in trouble. I support that.
    When you get down to the end of the program, at some point 
it begins to reverse itself, and you get into funny things 
like, well, we could really improve this thing if we had a few 
extra dollars, but we can't put the money into it because we 
don't want to go over the cap.
    The first boat is built. The second one is approximately 87 
percent complete. The third one is about 38 percent finished. 
We know how much it is going to cost, and we are under the cap. 
The IG came in and looked at it this year and agreed with us 
that we are under the cap.

                          NEW ATTACK SUBMARINE

    Mr. Visclosky. On the New Attack Submarine, my 
understanding on the report that was issued is you have a 
smaller performance margin against the advanced Russian SSN 
than predicted. Could you comment on that, please?
    Mr. Douglass. The New Attack Submarine is still evolving, 
obviously. It is in its design phase right now, and my guess is 
that we are going to maintain the margin we currently have, 
between the SEAWOLF and the new classes that the Russians have 
been building.
    Mr. Visclosky, I think the thing that is very hard to 
predict here, sir, is that, a few years ago, we thought the 
Russians were going to build these new, better submarines like 
hotcakes, and of course their economy has gone to heck on them. 
They aren't building them near what anybody thought they would 
do. In some cases, they have stopped construction altogether. 
There is an intelligence story that goes with that if you are 
interested in it. I could get the Naval Intelligence people to 
come over and give you a full brief on that.
    I think I can safely report to you that given the $60 
million to $100 million that we are investing in new submarine 
technology each year, in large degree because Congress has 
urged us to do more in this area, coupled with the lessons we 
have learned from SEAWOLF, and coupled with the revolution in 
acquisition reform that is going on in the Navytoday in ship 
design and construction, we will be able to produce a New Attack 
Submarine that will maintain America's undersea superiority 
indefinitely. I see no threat to that right now, given all the factors.

                         AMMUNITION SHORTFALLS

    Mr. Visclosky. Okay.
    General, if I could talk to you for a moment about 
ammunition, do you have a shortfall as far as your budget for 
1999, and if so, what do you need?
    General Oster. We manage a large number of different items 
in ammunition and work very, very diligently to put all of the 
money in each year that is required. We do come up against late 
price changes from the Army and other things that cause some 
particular problems in terms of our requirements. We have just 
rerun all of the calculations based on the prices we got from 
the Army, and we do, across the FYDP, have some small 
shortfalls in a few of the items that we manage, but we don't 
have any serious problems in our ammunition, either against our 
combat requirement for wartime or our annual training 
requirement.
    Mr. Visclosky. If you could for the record.
    General Oster. Yes, sir.
    Mr. Visclosky. Understanding they are relatively minor, if 
you could review those shortfalls.
    General Oster. Yes, sir, be happy to.
    Mr. Visclosky. Thank you, Mr. Chairman.
    [Clerk's note.--The information was not provided for the 
record.]

                          MODULAR SHIPBUILDING

    Mr. Nethercutt. Mr. Secretary, I have had a chance to 
recently see the USS BATAAN and the MAHAN, the destroyer, and 
went to Newport News and took a look at their operations. It 
seems to me the new generation of ships that are being built by 
the Navy for the Navy have sort of a modular concept so you 
can--you sort of build a shell, and then you decide how it is 
best configured. Is that the way you see the future of 
shipbuilding in the Navy in the years ahead for all classes of 
ships, or is that just suitable for smaller ships?
    Mr. Douglass. No, sir. I see that as a concept that we will 
probably evolve more and more towards. It does vary from class 
of ship to class of ship. For example, it is a little bit 
harder to do that on a submarine than, say, it is on a DDG or 
the like.
    Mr. Nethercutt. Right.
    Mr. Douglass. Some of our European allies, Mr. Congressman, 
have a real modular concept that has gone even farther than 
ours in which they have a turret that you take off and you put 
on a rocket system; you take that off and put on an ASW system. 
They keep them on the dock, and if they want to go out in an 
ASW mission, they put on that equipment, and when they come 
back in if they think they are going to be in gunnery, they put 
on the gun turret.
    I don't see us getting that far into it, but I do see us 
moving more and more into using commercial-off-the-shelf 
displays and computers and electronic equipment that work in an 
open architecture. It has to be modular. It has to be refreshed 
periodically so that when the ship comes into port, instead of 
getting the old chief petty officer in the electronic section 
who is working with his replacement boards and the soldering 
irons you get sailors working throughout the night fixing 
things by just taking the old module out, putting the new one 
in. Now instead of having 64K RAM, you have 128K Ram. I do see 
modular and open architectures in our ship construction as a 
thing of the future, especially in the electronics area.
    Mr. Nethercutt. From a personal standpoint, Admiral and 
General, has that been accepted pretty much by the commanders 
and others, ship personnel, who have to either work on these 
ships or live on them?
    Admiral Lautenbacher. Absolutely. It shortens the amount of 
time the equipment is down, but it makes absolutely essential 
that we fund the logistics systems in our maintenance depot-
level repair capabilities and those types ofitems, because as 
you get these higher-level components, you really have to be able to 
shift them back and forth to keep your readiness levels up. But this 
is--this is very well accepted by Navy personnel as the right way to 
go.
    Mr. Nethercutt. General.
    General Oster. I was down on the BATAAN myself just 3 weeks 
ago, spent a whole day all the way from down in the engine 
room, which surprised them. As a matter of fact, when they knew 
I was going to spend the whole day, they spent a lot of time 
wanting to know what the real agenda of a three-star general 
was to come and spend a whole day on a ship. But I hadn't had a 
chance to be on that class.
    First of all, I was impressed by the fact that the user 
input into the original design gets reflected in the later 
class of ships. Clearly, you want to maintain a configuration 
control, but as this particular class of ships is operated and 
it has real world missions and so on now, the feedback is fed 
back into the system.
    The modular configuration and the kind of snap-in/snap-out 
with regard to the work stations and so on, is also very 
amenable because tactics and techniques are changing, and the 
configuration of the command and control that the new 
commanders are executing in neo-operation, is evolving over 
time. In the old days it was really hard-wired in and you had 
to work around the configuration. Now it is much more user-
friendly in terms of being able to go aboard and do that.
    And so our communications officers and command and control 
folks are able to get on the ships well in advance of 
deployment, lay out their configuration, work it out with the 
ship, and then move on board, and the transition is a lot 
better.
    Also, you know, BATAAN, for instance, something that should 
have been probably obvious to begin with was how do you 
maintain the integrity of the operating theater? In the first 
class of the ships, the triage was in the center of the medical 
spaces, and the operating theaters to the outside, which meant 
maintaining the integrity of the operating theaters was very, 
very difficult.
    They have reconfigured that now. The operating theaters of 
the BATAAN are down the center line and the triage is to the 
outside. So that modularity gives a lot of flexibility to be 
able to fix the things that you find were wrong with the basic 
design.
    Mr. Nethercutt. I was very impressed.
    Mr. Secretary.
    Mr. Douglass. I would like to add to that. It is not just 
the commanders that support it; it is the chief petty officers 
and the senior chiefs and the senior Marines that are aboard 
these ships. But in some ways, and equally important, it is the 
admirals and the generals. When I was a young officer, a second 
lieutenant, most of the people that were generals in those days 
were people that fought in World War II, and, God bless them, 
they were hardened veterans, but they didn't really understand 
computers and all the wave of modern technology that was coming 
aboard. We had a lot of problems integrating the new technology 
into warfighting in the beginning. The thing that kept us 
moving forward in those days was, of course, the pressure of 
the Cold War.
    Nowadays, you have a generation of very well-educated, very 
sophisticated admirals and generals in the Marine Corps and in 
the Navy, who have grown up in the computer world and are very 
sophisticated in their approach. I would invite you, sir, to at 
some time go down to the Commandant's Warfighting Lab if you 
want to see how Marines are going to fight in 2010 and you will 
see some really sophisticated thinking about this.
    Mr. Nethercutt. Sure. And I think the sailors----
    Mr. Douglass. Right.
    Mr. Nethercutt. Not just the officers, but the sailors.
    Mr. Douglass. That is why I mentioned the young petty 
officers.

                             SHIP DISPLAYS

    Mr. Nethercutt. Right.
    Anyway, thanks very much.
    Is there a cost savings associated with that, do you 
perceive?
    Mr. Douglass. Yes, sir, there is. It is one of the things 
that relates to what Mr. Visclosky asked me before, and that is 
that we are going to have to go to open architectures and 
commercial--off-the-shelf equipment to get the cost of these 
things down.
    Just to give you an idea, next time you get a chance to go 
out on these ships look at some of the displays on the ships, 
and what you will see in the combat information centers, are 
big, wide-screen, flat-panel displays that are, bigger than 
these pictures here, that are really great. On one of the DDGs 
there is a wide-panel display that is bigger than those doors 
behind you.
    In older combat information centers, you will see some poor 
sailor sitting there looking at this little TV screen with 
little squiggly green figures on it. That is the old 
technology, that shows him numbers and tables. When he sees a 
number come up, he has to get a big book like this and quickly 
go to some tab and read the thing.
    The modern ones show him the picture of the system. If 
something has gone wrong, a light flashes. He touches his 
finger to the screen. It goes back--now he can see the 
subsystem that is broken, and then he can touch his finger 
again and he goes back and sees exactly the part that is 
broken. He can hit another area, and it issues an order for a 
part from the depot. It is a dramatic difference.
    The interesting thing is that the military specification 
ones with green squiggly lines, you and I and Mr. Visclosky and 
all of us, we paid 100 percent of the development bill for 
those. The commercial ones, everybody shared the cost with 
everyone else, including the international partners. I don't 
have to pay the total development bill.
    There is a wave of new business revolution going on here, 
and I am trying to push it out there to the fleet as quickly as 
I can.
    Mr. Nethercutt. Good. Thank you.
    Mr. Dicks.

                             V-22 AIRCRAFT

    Mr. Dicks. Mr. Secretary, the fiscal year 1999 budget 
request for the V-22 is $355 million for continued testing and 
$692 million for procurement of seven V-22 aircraft.Your 
statement says that the V-22 test program is several months 
behind schedule, and this and other factors has led to some 
cost growth in the $6.9 billion R&D program, which is estimated 
to be about--the cost growth to be about $130 million.
    Can you tell me what the status is of the V-22 program?
    Mr. Douglass. Yes, sir. It is doing very well. the cost 
growth that I spoke to you about, Mr. Dicks, is due to the fact 
that we are about 4 months behind in the test schedule.
    I will tell you, sir, that the program has suffered through 
various cuts in the building. Every time the inflation rate 
changes, we get a little cut, and every time we get 
undistributed reductions when the congressional bills come out 
and things of that nature.
    We have all the money we need to execute this program, and 
I am confident that it is on track. But in the world we live in 
today, Mr. Dicks, there is an enormous amount of cynicism in 
the air, and if I am not utterly frank with the Congress and 
tell them when we are a little bit behind or a little bit over 
our costs, people accuse us of hiding things and being 
misleading. You have seen the press articles that people 
accused me of hiding the problem of the F/A-18E/F. I have 
never, to the best of my knowledge, ever hid a single thing 
from anybody in the Congress or in the senior leadership of the 
Department of Defense.
    So, what you are seeing is the realities of a very, very 
ambitious test program. We are a little bit behind. I have a 
plan to catch up. We are on that plan right now. The Commandant 
and I have talked to the contractors. We believe we have their 
support. All of our cost growth has been funded from within the 
President'sbudget, so we are not asking for anything from the 
Congress.
    Mr. Dicks. I am a very strong supporter of this program.
    Mr. Douglass. It is kind of a full disclosure statement.
    Mr. Dicks. I wanted to give you a chance to have that full 
disclosure.
    Is IOC still on track?
    Mr. Douglass. Yes, sir.
    Mr. Dicks. What are your plans to pursue multiyear 
contracting for the V-22?
    Mr. Douglass. Sir, we would like to go ahead and get a 
little further into our test program and get the birds from 
last year and this year firmly on contract. We are looking at 
it as a way of getting the production numbers up in the 
outyears. We haven't made a decision exactly when we would like 
to propose that to the Congress, but it is going to be within 
the next year or so.
    Mr. Dicks. Now a recent GAO audit indicates that the Navy 
has not included a ground collision avoidance and warning 
system with voice warning on V-22 production aircraft. Why is 
that?
    Mr. Douglass. Well, the reason is that none exists. We have 
to develop one, and we are looking at it.
    Mr. Dicks. You couldn't use the ground proximity warning 
system that is out there for other aircraft?
    Mr. Douglass. No, sir. It just doesn't work right in this 
kind of an airplane. As you know, there is no commercial 
version of this new tilt-rotor concept. We are looking--working 
with the contractors to develop a system, but we don't have it 
developed yet.
    Mr. Dicks. General, what do you think about that? Should we 
be doing something here? Should we be putting a couple bucks 
into the budget to look at a ground proximity warning system, 
or is this not the kind of aircraft that needs that?
    General Oster. No, sir. I think we all agree that there is 
a requirement there, and the application--the direct transfer 
of the application is not available. I agree with Mr. Douglass 
that we need to work with the contractors, and develop that 
system for this program.

                   GROUND/COLLISION AVOIDANCE SYSTEMS

    Mr. Dicks. Did you see ``60 Minutes'' on Sunday?
    Mr. Douglass. No, sir.
    Mr. Dicks. They had a big segment on TCAS. Are you familiar 
with TCAS?
    Mr. Douglass. Yes, sir, I know what it is.
    Mr. Dicks. And it was another situation where we told all 
of these people we are going to do it, we are going to put 
these systems on these airplanes, and we didn't put them on. 
And then a C-141 and a German plane crashed, head-on collision.
    Mr. Douglass. Yes, sir.
    Mr. Dicks. And we lose the planes, and we don't have this 
TCAS system on.
    Now, this was an Air Force issue. But I asked this morning, 
and I want to mention this to you all, since you are the 
acquisition people, I think we ought to--where possible, put 
these systems on our aircraft. I have been a big supporter of a 
ground proximity warning system, TCAS is most relevant unless 
planes are coming right at each other, a voice, a system 
activates and communicates to the pilot to go high or, go low, 
in order to avoid head-on collisions.
    Now, you know, if you could save a few planes here or a few 
lives, as far as I am concerned, this thing becomes affordable, 
and yet on these things, it is like pulling teeth to get the 
services to do them. I know the money is tight, you might have 
to cut something out. You shouldn't cheat on the safety 
modifications. Now, why do we do that?
    Mr. Douglass. Sir, I feel more like the dentist than the 
patient. I am trying to pull the teeth with you. It is asymptom 
of the shortness in the budget. You may recall, when we had that 
unfortunate incident in Bosnia in which Secretary Brown was killed.
    Mr. Dicks. Right, and Secretary Perry said we are going to 
go take care of these things. We are going to put these safety 
systems on.
    Mr. Douglass. That is what I was getting ready to say. Dr. 
Perry, who is a very dear friend of mine, called everybody in 
and pretty much gave them the speech you just gave to me, and 
lined us all up and said, now, get out there and do it. We are 
and the Navy is ahead of its schedule to meet Dr. Perry's 
commitment to do that.
    Mr. Dicks. I will tell you this: The Air Force officer, who 
gave the response on ``60 Minutes''--and I realize that on ``60 
Minutes'' they may interview you for an hour, and they pick out 
the 2 minutes that make you look the worst--well, this guy, he 
succeeded in looking about as bad as you can look. I mean, his 
answers were really shocking, saying, well, it isn't cost-
effective, and we are not sure it makes sense to do this. This 
isn't on fighter airplanes now. This is on cargo planes and 
passenger planes.
    And, you know, United Airlines put them on, I think it was 
like $25,000 per airplane. They did it real fast. The cost for 
the military is much higher. I don't know why it is much 
higher, because it sounds like it is the same system that they 
are using in the commercial area. But I would like you to put 
in the record what your plan is so that we can----
    General Oster. Yes, sir.
    Mr. Dicks. You sit there and listen to the wives of the 
people who are on that plane, whose husbands aren't coming back 
because we don't think it is cost-effective, I mean, there are 
certain things you just have to do.
    Mr. Douglass. Yes, sir.
    Mr. Dicks. This is one of them.
    Mr. Douglass. In general, we agree with you, sir.
    Mr. Dicks. Yes. Thank you.
    Tell us what, in the record, too, what you think we ought 
to do on the V-22.
    [The information follows:]

    There are two slightly different safety systems, one called 
Traffic Alert and Collision Avoidance System (TCAS) which deals 
with other aircraft and another called Ground Proximity Warning 
System (GPWS) that deals with avoiding controlled flight into 
terrain. TCAS is effective in air operations like commercial 
flights where aircraft operate independently and with 
significant separation distances. The use of TCAS for an 
amphibious assault aircraft is more complex and we have not 
decided how to proceed, however, we have plans for integration 
of a GPWS into the V-22. The V-22 program plans to take fixed-
wing and rotary-wing aircraft algorithms that have already been 
developed and combine them into a new algorithm especially for 
tiltrotor aircraft. We plan the system for a fiscal year 2001 
production line cut-in. Funding for these systems is being 
addressed in the fiscal year 2000 budget development process.

    General Oster. Yes, sir.

                        SSN-21 SEAWOLF SUBMARINE

    Mr. Nethercutt. Mr. Visclosky.
    Mr. Visclosky. Mr. Secretary, I remain very concerned about 
the shipbuilding budget. I appreciate what you are telling me 
about the SEAWOLF and the cost cap. Culpability is the wrong 
word, simply because the world radically changed in midstream 
on everyone, including the Congress, the Administration and the 
Department. You still have hundreds of millions of dollars of 
unused equipment sitting out there, and I think it is just an 
example of in an unsettled world what can go wrong, in many 
instances, is going to go wrong through, again, no fault of 
anybody in this room or the Department.
    You know, with a shrinking industrial base, and the issue 
of diminished competition, we need to make sure that we do keep 
people, and caps on costs.
    Mr. Douglass. Right.

                          CVX AIRCRAFT CARRIER

    Mr. Visclosky. I appreciate your comments on nuclear 
propulsion. You still have a GAO report out there saying that 
those life cycle costs that you had emphasized earlier are 
going to be higher because of that. Maybe GAO is right, maybe 
wrong; maybe the truth lies----
    Mr. Douglass. We don't agree with that.
    Mr. Visclosky. I assumed you would not. I am just concerned 
because I do think the world situation that we face today, we 
have to have the ability to project power. In the end it is 
based on the Navy's ability to project our presence. I just, 
again, remain apprehensive that, whether it is myself or 
somebody else sitting here 5 and 10 years from now; they are 
going to face a huge shipbuilding bubble potentially if we are 
not very careful and very methodical about what we do here in 
the next 3 to 4 years
    Mr. Douglass. Mr. Visclosky, we need your support on or 
maritime industrial base. One of the things that I have been 
very outspoken about, to the point where occasionally I get 
myself in trouble with certain people around town, is that we 
have got to protect our maritime industrial base. I argue very, 
very strongly that we need to build more commercial ships in 
this country, which lowers the cost of the ships that I buy 
from the big shipbuilders.
    Three or four years ago, there were no commercial ships 
under construction in the United States, capital-sized ships. 
Today the number is 21 with orders pending for an additional 
30. For the first time since 1957, two cruise ships will be 
built in the United States, starting this year. That is a whole 
industry. It is a travesty that 80 to 90 percent of the people 
all over the world that go on cruises are Americans, and that 
only one of those ships was built in the United States. When 
you are a passenger on one of those ships, you as an individual 
pay more income tax to the United States than the entire cruise 
line pays to the United States. That is a travesty, and I don't 
like that, and I go after these people strongly, and the idea 
is to protect our industrial base.
    We are making some progress, sir, and it has been because 
of people like yourself, Congressman Cunningham and Congressman 
Hunter have been helpful, and there are strong advocates over 
in the Senate. We all need to cooperate to protect this part of 
our industrial base because we cannot let it slip away. More 
and more, I think, in the post Cold War world, American 
security is going to depend on its maritime forces. Certainly 
our trade depends in large degree on these maritime sea lanes 
of communication staying open. The Navy's job is to keep those 
communication lanes open. To have an affordable Navy, we have 
got to have a robust industrial base, and we have got to have 
competition.
    Your comments, sir, are right on track. I saw the 
endorsement, and we need to continue the kind of cooperation 
that we had in the past from your colleagues on this Committee 
and others.
    Mr. Visclosky. Thank you, Mr. Chairman.
    Mr. Nethercutt. Gentlemen, thank you very much for your 
responses and your frankness and your preparedness for today.
    We thank you. We will see you again soon, and thank you for 
your testimony.
    Mr. Douglass. Thank you, sir.
    Mr. Nethercutt. The Committee is adjourned.
    [Clerk's note.--Questions submitted by Mr. Sabo and the 
answers thereto follow:]

                        Penguin Missile Program

    Question. Over the past two years, the Committee has provided the 
Navy with $14.5 million to support the PENGUIN missile program. What is 
the current status of the program, and how have these funds been 
utilized?
    Answer. The PENGUIN missile is operational and is carried by 
deployed carrier battle groups and the Middle East Force Squadron. The 
$14.5 million in fiscal year 1997 and fiscal year 1998 funding has 
allowed procurement of 6 telemetry rounds to be delivered in fiscal 
year 1999; additionally, contract negotiations are ongoing for the 
construction of 5 tactical rounds for fiscal year 1999/2000 delivery, 
acquisition of 45 missile simulators to correct program deficiencies, 
and acquisition of missile loading tools and spare components.
    Question. Why is this program not funded in the fiscal year 1999 
budget?
    Answer. The President's Budget represents the best balance of 
programs and priorities given constrained resources. This balance has 
precluded funding for PENGUIN acquisition in the fiscal year 1999 
budget. Funding for maintenance of existing PENGUIN missiles is 
provided in the fiscal year 1999 budget.
    Question. Does the Navy still have a valid requirement for the 
PENGUIN missile?
    Answer. The Navy requirement for PENGUIN missile remains valid at 
193 tactical missiles. The Navy has procured 101 tactical missiles to 
date with an additional 5 tactical missiles to be delivered in fiscal 
year 1999.
    Question. If so, exactly how many missiles does the Navy need?
    Answer. The Navy requirement for PENGUIN missile was validated at 
193 missiles; 101 tactical missiles were procured and delivered with an 
additional 5 tactical missiles to be constructed as a result of the 
fiscal year 1998 plus-up.
    Question. Does the Navy intend to initiate a multi-year contract to 
fill the requirement?
    Answer. The Navy does not currently intend to initiate a multi-year 
contract to acquire the missiles necessary to meet the requirement. 
Balancing programs and priorities within constrained resources has 
resulted in the missile being held as an ``above core'' funding issue.
    Question. If the Navy does not intend to use multi-year contracting 
procedures, what other methods are being examined?
    Answer. Funding for the PENGUIN missile is examined as part of each 
budget cycle. At this time, affordability constraints preclude 
programming the funds required to procure the missiles necessary to 
fulfill the requirement.
    Question. is the PENGUIN missile on the Navy's fiscal year 1999 
unfinanced requirements list?
    Answer. The PENGUIN missile is not on the Navy's unfinanced 
requirements list.
    Question. If not, why?
    Answer. The PENGUIN missile remains an ``above core'' issue; its 
priority against competing Navy requirements is insufficient to warrant 
inclusion on the unfinanced requirements list.

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

                        SSBN to SSGN Conversion

    Question. In fiscal year 2000 we will reach a decision point for 
retiring 4 SSBNs to reach START II levels of 14 SSBNs. Please provide 
detailed comments on the costs and performance attributes associated 
with converting the 4 retired platforms for the so-called SSGN option.
    Answer. Congressional language prohibits removal of any of the 18 
Trident SSBNs from strategic service prior to START II ratification. 
Pending START II ratification, the four oldest Trident SSBNs are 
planned for removal from strategic service, two each in fiscal years 
2002 and 2003.
    Right now, the Trident conversion (SSGN) concept is just a concept 
and not yet a program. No funds have been applied to it in the fiscal 
year 1999 budget, but the Navy continues to evaluate the concept.
    Conversion costs are currently estimated to be approximately $400 
million per ship (includes the refueling overhaul required for 20 
additional years of service life), with a one time initial design cost 
of approximately $170 million.

                  Commandant's Warfighting Laboratory

    Question. The Marine Corps Warfighting Lab is aggressively pursuing 
the doctrinal changes required for the urban battlefield. Are the 
experimental technologies required to dominate this future battlefield 
adequately funded in this budget? Please comment on the technologies 
and research funds for this effort.
    Answer. The Marine Corps Warfighting Lab (MCWL) conducts concept-
based experimentation in accordance with an analysis plan developed 
within the MCWL. Results of all experimentation are evaluated within 
the Combat Development System at Marine Corps Combat Development 
Command (MDDDC), Quantico, VA for their warfighting enhancement 
potential. Doctrinal, organizational, training & education, and support 
areas are assessed by MCCDC and implementation actions initiated.
    The President's Budget funding provides adequate support for 
experimental technologies support in Urban Warrior. This funding level 
supports the conduct of the experiment, but limits the number and depth 
of technologies available for examination. With additional funding, the 
MCWL would be able to more fully exploit the concepts and enabling 
technologies of Urban Warrior such as the autonomous indirect fire 
system, training initiatives, testing of Commercial Off The Shelf 
(COTS) communications equipment, and an instrumentation program. The 
Marine Corps estimates that a more in depth pursuit of these efforts 
would require an additional $10 million in fiscal year 1999.

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

                       Joint Strike Fighter (JSF)

    Question. It is your intention to have dual engine sources for the 
Joint Strike Fighter?
    Answer. Yes, the JSF is continuing an Alternate Engine Program with 
General Electric to develop an alternate engine for production.
    Question. It is correct to assume that the alternate engine will 
now be fully funded for its development and flight qualifications?
    Answer. Yes. The alternate engine program is fully funded through 
the current Future Years Defense Program, which ends in fiscal year 
2003. The Navy and Air Force are committed to funding the program in 
the outyears as well. The Department is currently structuring its 
options during the year 2000 budget development process for 
implementing an alternate engine program beyond fiscal year 2003.
    Question. Realizing that funding constraints are always an issue, 
do you not agree that annualized competition for the engine would 
benefit the Joint Strike Fighter Program and should be implemented as 
soon in the production process as possible?
    Answer. The Service recognize the benefits of an alternate engine 
program. The Department is currently structuring its options for 
implementing an alternate engine program beyond fiscal year 2003 that 
achieves annualized competition in production as soon as possible 
within affordability constraints.

                          CVX Aircraft Carrier

    Question. What is the Navy's inclination on the size of the ship? 
What is the Navy's inclination on the ship's propulsion?
    Answer. The Navy's preferred alternative for CV(X) being evaluated 
in the Analysis of Alternatives (AOA) is a large deck nuclear-powered 
carrier. This alternative provides the greatest capability, mobility, 
flexibility and survivability of all the alternatives being analyzed in 
the CV(X) AOA. A large deck provides the Navy the greatest flexibility 
in airwing size, mix of types of aircraft or other payloads carried on 
the ship, and for operations in all types of weather. Nuclear power 
provides the carrier force added mobility, operational flexibility and 
survivability as compared to a conventional carrier. In addition, given 
that the next class of aircraft carriers will be in service throughout 
the next century, it is prudent to provide the Navy's capital ship with 
the greatest capability practicable. The ongoing CV(X) AOA is examining 
several design alternatives, and a final decision on CV(X) size and 
propulsion will be made after the next phase of this AOA has been 
completed and reviewed by the DOD senior leadership.
    Question. In light of the GAO report that is scheduled to be 
released in the near future, please provide information about the cost 
comparison between nuclear and conventionally powered carriers. The 
Navy does not build other surface combatants with nuclear reactors. How 
does a nuclear-powered carrier's additional capabilities over a 
conventionally-powered carrier relate to comparisons amount other 
surface combatants and their nuclear versus conventional debates? Are 
conventionally powered cruisers and destroyers not so less capable than 
nuclear ones that the Navy could accept the lesser cost and 
capabilities of conventional destroyers but does not wish to do so with 
carriers?
    Answer. The DoD position on this GAO report has been provided to 
the GAO and the Congress recently by the Office of the Under Secretary 
of Defense (Acquisition and Technology).

                          Shipbuilding Program

    Question. Is the planned rate of shipbuilding sufficient to 
maintain a Navy of 300 ships over the long run (past 2015)? After what 
date will the Navy fall below 300 ships? Why wasn't the reduction in 
the planned size of the Navy from the BUR figure of 346 ships to the 
new figure of 300 ships made explicit in the Quadrennial Defense Review 
(QDR)?
    Answer. In order to sustain a 300 ship Navy our shipbuilding rate 
must be maintained at approximately 8-10 ships per year. Within the 
fiscal year 1999-fiscal year 2003 budget, we buy an average of 6 ships 
per year which is not sufficient over the long term to sustain a 300 
ship force.
    The QDR affirmed the need for 12 carrier battle groups, 12 
amphibious ready groups, 116 surface combatants and 50 attack 
submarines, as well as the strategic force that we have, in support of 
START I and START II. This represents the core capability necessary to 
meet the needs of national defense. In addition, we need to provide the 
combat logistics and other support ships to make this core capability a 
world wide force. When looking at our force structure from a 
capabilities focus, it is more essential to ensure we provide the 
required capability and not a specific number of ships. Navy's 
shipbuilding and modernization efforts are designed to produce ships 
that will provide the core capabilities well into the 21st Century.

                   Shipbuilding Industrial Base Study

    Question. What is the status of the joint Navy/DoD shipbuilding 
industrial base study? Wasn't this study supposed to have been done by 
November or December of last year? Why is the Navy sitting on it? Can 
you tell us anything about the findings of the report? Should the 
government award shipbuilding contracts without regard to possible yard 
closure? What should be the government's policy about consolidation or 
mergers?
    Answer. On April 7, 1997, Assistant Secretary of the Navy 
(Research, Development and Acquisition) and the Under Secretary of 
Defense (Acquisition & Technology) commissioned a Shipbuilding 
Industrial Base Study (SIBS). While the study was originally envisioned 
to be completed by November or December, the magnitude of data received 
from the shipbuilders required additional effort on the part of the 
Navy and OSD. The SIBS Working Group has completed its efforts and is 
in the process of briefing senior Navy and OSD management. Specifics on 
each shipyard are not releasable based on the business sensitive 
information provided by the shipyards. However, the study determined 
there is sufficient capacity to meet the Navy's needs. Therefore, it is 
important for the Navy to promote commercial and Foreign Military Sales 
opportunities.
    The two questions relating to contract placement and a policy on 
consolidations and mergers are the two questions asked in the study. 
Since the study has not been officially reviewed by the interested Navy 
and DoD officials, it is premature to present findings. Due to the 
sensitive nature of the report, it is likely that it will never be 
published publicly. However, the study would not have been successful 
without the involvement of the shipbuilding community. They were asked 
to participate up-front and were very cooperative.

                             DD 21 Teaming

    Question. Can you have vigorous competition after the announced DD 
21 teaming arrangement between Ingalls, Bath Iron Works, and Lockheed 
Martin? What is the Navy going to do about this? How does the Navy 
intend to prevent ``group think'' during the conceptual design phase if 
both major surface combatant yards are on the same team? Can the 
Government prevent the teaming arrangement? On the issue of prevention 
of exclusivity, what is the incentive for the first yard to break ranks 
and join up with a second team?
    Answer. The original draft DD 21 request for Proposals (RFP) was 
issued in November 1997. Shortly thereafter, the proposed team of 
Ingalls, Bath Iron Works and Lockheed was announced. Raytheon expressed 
concerns about this team to the Navy and DoD, and then referred the 
matter to the Department of Justice for review. In order to encourage 
competition to the maximum extent, the Navy made amendments to the RFP 
(listed below), and issued a revised DD 21 Draft RFP on February 20, 
1998. Major changes included:
     Use of Section 845/804 Authority vs. the original FAR/DFAR 
RFP.
     Prohibition against industry entering into exclusive 
teaming arrangements.
     Provisions to allow industry to propose competition at the 
system and subsystem level if only a single bid is received.
     Additional funds allocated to industry in Phase I and 
Phase II (1998-2001) of the development program.
     Additional opportunities for industry to innovate in the 
development process by removing Navy cost and schedule oversight, 
removing Navy performance specifications other than those in the Joint 
Chiefs of Staff approved Operational Requirements Document, and 
removing Navy control over the Integrated Product Teams.
     Extended Phase I from 9 months to 12 months.
     Affirms that the Navy wants a two shipyard program for DD 
21 series production.
    All industry feedback to date is positive, including comments 
received during a day long industry brief on February 27, 1998. More 
than 200 industry and government representatives attended the RFP 
review. The Navy expects at least two bids; however, the RFP puts 
industry on notice that if only one proposal is received, the Navy has 
a right to negotiate with that offeror to explore whether that offer 
contains a sufficient level of competition. Two or more bids will 
ensure intense competition and innovation for DD 21.
    DD 21 was not conceived as a ``business as usual'' ship, and its 
development will not be executed in a ``business as usual'' manner. All 
of America's shipyards have innovative ideas that could be used in DD 
21. Some U.S. shipyards are world leaders in ship signature control, 
others have been setting new technical standards in automated design 
and construction of Navy ships, some have been able to compete in the 
commercial shipbuilding market by using advanced processes, while 
others are acknowledged leaders in ship systems integration. Any of 
these shipyards, when teamed with a capable combat systems or C4ISR 
integrator will be able to provide the high degree of innovation the 
Navy needs to build and DD 21 within its aggressive cost and 
performance envelopes.
    As always, the Department of Justice remains free at any time to 
take action against the team as it deems appropriate. The Navy 
considers it in the best interest of any given shipyard to be on as 
many DD 21 teams as possible, thus increasing the chances that the yard 
will be on the ``winning team'' that designs and builds 32 DD 21 ships 
over the next 15 years.
    The Navy is committed to ensuring innovation through competition on 
DD 21. Only through aggressive competition in all aspects of ship 
design will the challenging cost and performance requirements set by 
JCS be met. Competition for ideas must occur at both the shipyard and 
integration levels throughout the early phases of DD 21 development.

                             CG 47 Upgrades

    Question. What is the scope of the work to be done on each ship and 
what is the cost per ship? What shipyard or shipyards will be doing 
this work?
    Answer. The ultimate goal of the Cruiser Conversion Plan is to 
modernize all 22 Baseline 2, 3, and 4 Aegis cruisers (CGs 52-73) 
eventually. Upgrades include significant improvements to the command 
and control systems for theater air warfare; upgrades in computer 
equipment and programs; installation of extended range guided munitions 
guns; and installation of modernized machinery control systems and 
other ``Smart Ship'' technology.
    After conversion, each Aegis cruiser will be Area TBMD and Land 
Attack capable. Of those ships, 12 will have an AADC capability 
required to manage joint integrated air defense in the 21st Century. 
Seven of the cruisers (CGs 52-58) will be fitted with a fully 
distributed, COTS based computer system architecture for the 
introduction of Theater-Wide TBMD.
    Conversions will require from 20 weeks to a maximum of ten months. 
Shipyards capable of conducting cruiser Regular Overhauls could perform 
the cruiser conversion work. This plan will generate significant 
industrial work across a variety of shipyard trades. Equipment 
procurement and installation costs are estimated at approximately $90 
million per ship.

                            Seawolf Cost Cap

    Question. What is the Navy's current plan on dealing with the 
SEAWOLF cost cap, and are there any outstanding issues that the 
Congress needs to address?
    Answer. The Navy continues to execute the SEAWOLF program within 
the limitations of the cost cap. The Navy does not intend to pursue 
cost cap issues with Congress this year.

                      Arsenal Ship Lessons Learned

    Question. The Navy has prepared a ``lessons learned'' document 
following the cancellation of the Arsenal Ship. It is my understanding 
that one of the lessons learned was that having multiple teams in which 
no one team included both of the surface combatant yards was a good 
thing. Do you intend to apply this important lesson to the DD 21 
teaming arrangement between Ingalls and Bath Iron Works?
    Answer. The Arsenal Ship report did not include such a 
recommendation. The Arsenal Ship report you discussed has documented 
the important lessons learned from that program. One important lesson 
learned was for the Government to allow winning teams to ``pick up'' 
members of losing teams in order to incorporate their good ideas into 
the winning team's proposal. This concept will be used during the DD 21 
development process to ensure that the very best ideas available 
throughout industry will be available for use by the winning DD 21 
team. It is the Navy's expectation that both Bath Iron Works and 
Ingalls Shipbuilding will be active participants in DD 21 competition, 
and that both shipyards will being many new and innovative ideas to the 
table regardless of any specific business arrangements that they may 
have negotiated with other members of industry.

                         Surface Fire Capacity

    Question. Mr. Douglass, when is the Navy going to choose between 
NTACMS or the Land Attack Standard Missile? Why did you have to do a 
panel to make this decision?
    Answer. The Navy chartered an analysis of alternative missile 
systems to support a decision on a Land Attack Missile in early-mid 
1998. A panel of recently retired Navy Admirals and Army and Marine 
Corps Generals was used to determine whether the analysis provided 
sufficient foundation for selecting between alternative missile systems 
and to make recommendations for additional study that may be required 
to support the decision. The panel has provided its recommendations and 
a decision is expected to be made by the end of April.
    Question. How much in additional funds would be required to R&D 
both programs?
    Answer. An additional $230-250 million would be required to 
complete R&D on both programs.

                              Mine Warfare

    Question. I understand that Secretary Cohen was concerned about the 
Navy's mine warfare program. Are you still confident that mine warfare 
improvements are fully funded and moving forward at a vigorous pace?
    Answer. The Navy continues to ensure sufficient resources are 
applied to maintain a fully ready and sustainable dedicated Mine 
Countermeasures (MCM) capability while vigorously pursuing the 
introduction of an organic capability to the fleet. The Navy's MCM 
vision, first articulated clearly in 1995 by the CNO, addressed the 
need to develop an organic MCM capability for the Joint Task Forces to 
carryout all phases of mine countermeasures in a timely fashion. This 
robust organic MCM capability will allow a reduction to the dedicated 
capabilities of the Navy's current MCM forces. The vision has been 
reiterated in the third edition of the Navy's Mine Warfare Plan and in 
all of the subsequent annual certifications signed by the Under 
Secretary of Defense (Acquisition and Technology) and forwarded to 
Congress. The fiscal year 1999 Mine Warfare Certification Package, 
currently en route to Congress, clearly demonstrates the Navy's 
continuing commitment to vigorous pursuit of this vision.

                           Trident Conversion

    Question. I have heard of a concept to convert four Tridents from a 
strategic role to a more conventional role.
    Is there funding in the budget for it?
    Answer. The Trident conversion (SSGN) concept is just that, a 
concept and not a program. No funds have been applied to it.
    Question. If it is not budgeted, how much money would it take to 
study the viability of the concept?
    Answer. Approximately $2 million would be required to validate a 
concept design.
    Question. What amount of funding would be needed this year to 
actually begin to implement the program?
    Answer. No funding would be needed to implement the program.

                       Tactical Tomahawk Missile

    Question. I've heard your initiative to pursue a Tactical Tomahawk 
program. Is the Navy still interested? What are the advantages?
    Answer. Yes. Tactical Tomahawk is being pursued because it is more 
capable and affordable than the current Block III missile. The 
Satellite Data Link, Anti-Jam GPS, in-flight re-targeting, and launch 
platform mission planning all contribute to greater accuracy and 
operational flexibility and responsiveness. Tactical Tomahawk meets or 
exceeds all performance requirements, including range, accuracy, 
reliability, and survivability as identified in the current Operational 
Requirements Document.
    Question. What is the current status?
    Answer. The Acquisition Decision Memorandum (ADM) authorizing 
transition to Tactical Tomahawk was signed March 2, 1998. The 
reprogramming request to fund the research and development effort was 
delivered to the Congressional Committee Chairmen the first week of 
March. Once the funding is authorized, Tactical Tomahawk will become a 
program with an Initial Operating Capability of fiscal year 2003.
    Question. We've been expecting it, when can we see it?
    Answer. The reprogramming request was delivered to the Committee 
Chairmen the first week of March.

                  E-2C Aircraft Multiyear Procurement

    Question. I understand that the E-2C multiyear procurement will 
save in excess of ten percent vs. continuing with annual procurements. 
Is this true and why is the E-2C multiyear good for DoD?
    Answer. The E-2C multiyear procurement will save in excess of ten 
percent versus continuing with annual procurements. The Navy estimates 
a savings of approximately 14 percent which equates to $204 million 
over a six-year annual budget. The E-2C is an ideal candidate for a 
multiyear procurement. The airframe has been in production since the 
mid 1960's and the configuration will be stable throughout the five 
year program. These factors substantially reduce the risk associated 
with a multiyear procurement. The E-2C multiyear is very good for the 
Navy and DoD because the $204 million saved allows the Navy and DoD to 
reapply resources towards modernization without any increase in 
obligation authority.
    Question. Since the advance procurement funding ($19 million) 
contained in the 1998 budget supports the fiscal year 1999 aircraft 
which are the first year of the multiyear program, would granting 
approval to use these funds this April towards the multiyear (vs. the 
existing annual plan) be beneficial to the Navy?
    Answer. The use of the $19 million fiscal year 1998 Advance 
Procurement (AP) is not a requirement for the fiscal year 1999 
multiyear procurement. The Navy has submitted a multiyear procurement 
program for the E-2C Hawkeye in the fiscal year 1999 President's 
Budget. The five-year, 21 aircraft program is projected to save the 
Navy approximately 14 percent ($204 million) vs. continuing to purchase 
the 21 aircraft over the next six years.

    [Clerk's note.--End of questions submitted by Mr. 
Visclosky. Questions submitted by Mr. Young and the answers 
thereto follow:]

                  Increased Use of Multiyear Contracts

    Question. The Department of the Navy budget request for fiscal year 
1999 requests authority for new multiyear procurement programs and also 
continues existing multiyear programs. The effect of the fiscal year 
1999 budget, if approved by Congress, would be to have DDG-51 ships, 
AV-8B aircraft, E-2C aircraft, T-45 trainer aircraft, CH-60 
helicopters, the Medium Tactical Vehicle Replacement, and Javelin anti-
tank missiles purchased under multiyear contracts. The Navy is also 
closely examining the feasibility of multiyear procurements for V-22, 
F/A-18E/F aircraft, P-3 aircraft modifications, and LPD-17 ships in 
future years. Secretary Douglass, please describe the Navy's new 
strategy of aggressively pursuing multiyear procurement programs.
    Answer. By capitalizing on the increased stability in our 
modernization accounts, we can accelerate procurement of crucial 
systems and reduce unit costs, increasing our modernization potential 
by billions of dollars (including existing multiyear contracts) which 
this approach saves.
    Question. Defense outyear budget projections are often optimistic, 
and usually materialize into actual programs at much lower funding 
levels. What is the risk that the Navy will start a number of multiyear 
programs that it cannot finish?
    Answer. The stability of funding and the stability of the 
requirement was carefully evaluated in each of our fiscal year 1999 
multiyear proposals and was rated low risk. What little risk there is 
will be further mitigated through appropriate use of variation in 
quantity liability limitation contract clauses.
    Question. For each of the programs in the 1999 budget for multiyear 
procurement please tell us: What is the ``up-front'' investment cost? 
What are the savings? What is the percentage of savings resulting 
solely from multiyear procurement?
    Answer.
                                  e-2c
    --Additional up-front investment: fiscal year 1999 $139.3 million, 
fiscal year 2000 $109.2 million.
    --Savings: fiscal year 2001-fiscal year 2003 $355.1 million (net 
fiscal year 1999-fiscal year 2003 $106.5 million).
    --Percentage savings multiyear alone: 8.3%.
    --Net savings multiyear plus acceleration: $204 million, or 14.4%.
                                 t-45ts
    --Additional up-front investment: fiscal year 1999 $41.2 million, 
fiscal year 2000 $14.2 million.
    --Savings: fiscal year 2001-fiscal year 2003 $102.9 million (net 
fiscal year 1999-fiscal year 2003 $47.4 million).
    --Percentage savings multiyear alone: 5.2%.
    --Net savings multiyear plus acceleration: $246 million, or 18.5%.
                                  mtvr
    --Additional up-front investment: None.
    --Savings: fiscal year 1999-fiscal year 2003 $86.1 million.
    --Percentage savings multiyear alone: 7.4%.
    --Net savings multiyear plus acceleration: Not applicable, pursued 
as multiyear from beginning.
    Question. Under what conditions and when would the Navy pursue 
multiyear procurement for F/A-18E/F aircraft, V-22 aircraft, or LPD-17 
ships?
    Answer. Future multiyear procurement candidates will be evaluated 
in terms of expected benefit (substantial economic and/or national 
security benefit), requirement stability, funding stability, program 
maturity and configuration stability, cost confidence, and contractor 
confidence. Those which offer substantial benefit at acceptable risk 
will be proposed for multiyear procurement.
    It is important to note, however, that most of the programs 
mentioned have potential for large savings through the use of multiyear 
contracts. In the case of the F/A-18E/F, the outyear budget has been 
constructed on the assumption that multiyear contracting will be 
utilized.
    Use of multiyear procurement for the V-22 is dependent upon the 
maturity of the aircraft (concurrence with R&D), stability of 
configuration, and degree of cost confidence (ability to negotiate a 
fixed-price type contract). The Navy is examining MYP options involving 
a full rate production decision as early as fiscal year 2001 with 
advanced procurement in fiscal year 2000.
    In addition, the Department of the Navy is also examining multiyear 
procurement for the LPD 17 class, and will balance the advantages of a 
multiyear program against the projected program savings. The LPD 17 is 
the replacement for four aging class of ships (LST, LKA, LSD 36, LPD 4) 
built between 1965 and 1973. When construction is complete, the 12 
ships will allow the DoN to meet both our forward presence requirement 
for Amphibious Ready Groups (ARGs) and the fiscally constrained 
warfighting goal of 2.5 MEBs of lift. Additionally, the LPD 17 class 
will eliminate our reliance on mothballed ships presently needed to 
meet our 2.5 MEB lift goal.
    Current procurement and commissioning profiles:

----------------------------------------------------------------------------------------------------------------
                                        96   97   98   99   00   01   02   03   04   05   06   07   08   09  Tot
----------------------------------------------------------------------------------------------------------------
LPD 17s Funded.......................    1    0    0    1    2    2    2    2    2  ...  ...  ...  ...  ...   12
LPD 17s Commissioned.................  ...  ...  ...  ...  ...  ...    1    1    1    2    2    2    2    1   12
Total in Inventory...................  ...  ...  ...  ...  ...  ...    1    2    3    5    7    9   11   12   12
----------------------------------------------------------------------------------------------------------------

                  SSN-21 Seawolf Submarine Performance

    Question. The Navy has recently analyzed the results of the Pre-
Post Shakedown acoustic sea trials for the first SSN-21 SEAWOLF 
submarine. The submarine is not in a final configuration, some results 
are estimates and are subject to change in later tests. But they 
indicate in some areas the ship may not meet its quieting goals. The 
information is not ready for formal transmission to the Congress, but 
since we are in a closed session today this is a good opportunity for 
Members to hear first hand about the issues. What does this mean 
tactically and operationally to a SEAWOLF submarine commander in 
combat?
    Answer. SEAWOLF's slow speed acoustic characteristics will meet or 
exceed the Program's goals. Her projected high speed acoustic 
characteristics will be close to the Program's goals. The tactical 
significance of her predicted high speed signature is being evaluated. 
The most significant potential impact is that SEAWOLF's secure speed 
will be slightly slower than originally planned, although still much 
higher than the SSN 688I against the most demanding threat.
    Question. In ``ballpark'' terms, what could it cost in the future 
if the Navy elected to redesign the SEAWOLF's propulsor to meet low 
frequency design objectives?
    Answer. Depending on the approach, the cost to redesign and replace 
all three SEAWOLF propulsors would be approximately $140 million. The 
estimate is based on extensive NSSN propulsor testing to date at Lake 
Pend Oreille, Idaho, on our unmanned LSV 1. A follow on acoustic trial 
is scheduled to be conducted this spring to obtain additional data. 
This data will be used for determining the best technical course of 
action.
    Question. There have been negative press articles on issues other 
than acoustics, such as inability to fire weapons at high speed. What 
technical problems are being found in SEAWOLF during testing and what 
are your plans to fix them?
    Answer. The press articles have focused on torpedo issues from 
SEAWOLF's Naval Board of Inspection and Survey (INSURV) trial in June 
of 1997. The most significant findings of the INSURV trial were weapon 
launch issues. Fixes for all these issues are either installed or in 
progress:
    --Salvo launch. Salvo launch was not achievable on the trial. 
Replacement of the gaskets on all 8 torpedo tube slide valves solved 
this issue. Successful retest was accomplished at sea in early February 
1998.
    --Torpedo tube reload time was not within specifications. This is 
principally due to slow tube flood and drain times. The flood times 
have been improved with a software revision. The drain times are in the 
process of being improved.
    --High Speed Weapons Launch. The article in Defense Week refers to 
SEAWOLF's inability to open her torpedo tube shutter doors and ejection 
pump inlet doors while at flank speed. The torpedo tube shutter doors 
are portals through which weapons are launched from the submarine. The 
ejection pump inlet doors allow seawater to enter the submarine to be 
used in launching a weapon. The cause is hydrodynamic forces generated 
by SEAWOLF's high flank speed. An engineering solution has been 
identified and will be tested at sea this spring.
    Additionally, while testing SEAWOLF's ability to launch weapons at 
higher ship speeds, the exercise weapons and the guidance wire 
dispenser sustained damage during moderate speed launches. The ship 
continued the test program, successfully completing all low to moderate 
speed launches. However, due to the exercise weapons damage, higher 
speed launches were not attempted during this test phase and will be 
scheduled at a later date. The initial indication is that SEAWOLF's 
Large Diameter Tubes and Turbine Ejection Pump configuration are 
causing the exercise weapons to drift backward into the tube at launch 
initiation, with sufficient force to cause damage above moderate ship 
speeds. A team of experts is evaluating root causes, design 
modifications for corrective action, and an implementation plan to test 
and install these corrective actions during the shakedown period, which 
continues through the summer.
    Question. Mr. Douglass, please describe Navy plans to perform a 
``shock test'' on SEAWOLF. What is a shock test, how much does the 
SEAWOLF shock test cost, and when is it budgeted?
    Answer. $47.45 million has been budgeted in fiscal year 1999-fiscal 
year 2001 to conduct the full ship shock test. Both law and DoD 
regulations require the conduct of survivability testing of major 
systems prior to full rate production. Director, Operational Test and 
Evaluation and the Navy will shock test SEAWOLF in fiscal year 2000. 
The break out of costs is as follows (RDT&E):

                          [Dollars in millions]

Fiscal year 1999..................................................  5.05
Fiscal year 2000..................................................  41.0
Fiscal year 2001..................................................   1.4

    Question. For the record, please answer each question individually.
    Is the cost worth the benefit, given that there are only 3 ships in 
the class?
    Answer. It is important to shock test the USS SEAWOLF. The SEAWOLF 
class represents the first major evolution in submarine technology in 
the past twenty years. The information gained from shock testing can be 
backfit into the SEAWOLF class and translated to ongoing design and 
future construction of the NSSN. There has been concern that the 
expense involved in shock testing is great and the benefit may not be 
seen with a three ship class. The Navy believes it is important to 
fully test the design of the SEAWOLF class in its final warfighting 
configuration because the benefits can be applied not only to the three 
SEAWOLF submarines, but to the NSSN as well.
    Question. If we found structural problems with the hull at this 
point, could anything different be done to the submarines of which ones 
already built and the other two are well into construction?
    Answer. If we found structural problems with the hull, we would 
backfit modifications to correct them. There is no reason to believe 
there are any structural problems with the hull.
    Question. Can SEAWOLF be tested to the design limit?
    Answer. No. The full ship shock test will subject the ship to 1/2 
the design limit. Separately, the program is testing ship components to 
their design limit under the component shock qualification program.
    Question. The Secretary of Defense's Director of Operational Test 
and Evaluation recently provided a report to Congress which made the 
following observation: The final planned shot at 2/3 design level shock 
factor for the Coastal Minehunter Ship (MHC 51) was canceled because of 
the extent of cumulative structural damage incurred on the fifth and 
earlier shots. How may cumulative shock tests are contemplated for 
SEAWOLF and what is the risk of significant damage to the ship?
    Answer. Five shots are scheduled for the full ship shock test. 
These loads will not risk significant damage to the ship.

                        Ship Self Defense System

    Question. The Committee has been concerned for a number of years 
about Navy ship self defense programs. A key program is the Ship Self 
Defense System, an upgrade to the short range air defense systems of 
aircraft carriers and amphibious ships, which uses computers to 
integrate the sensors on ships (such as radars) with weapons (guns and 
missiles) to shoot down incoming anti-ship cruise missiles.
    The Secretary of Defense's Director of Operational Test and 
Evaluation recently submitted a report to Congress which described 
testing done by the Navy last summer on the Ship Self Defense System 
aboard an amphibious assault ship used to bring Marines into combat:
     18 of 19 anti-ship cruise missile targets in quick 
reaction raids engaged in less than the required 2 seconds (.4 second 
average).
     Correct engagement decision in 99 percent of subsonic 
anti-ship cruise missile presentations.
     Appropriate tactical engagement sequences in 94 percent of 
the time.
     Demonstrated engagement by at least one defending system 
of 99 percent (160 of 162) of the targets.
     Correct decision in 32 of 35 (91 percent) of friendly 
aircraft presentations. In 3 cases, the operator manually entered the 
wrong identification for friendly aircraft, although SSDS provided 
correct identification.
     There were no hardware failures.
     . . . marks a major improvement in the self-defense 
capability of amphibious warfare ships against air threats, and 
justifies acquisition.
    Mr. Douglas, based on the results of these tests, how good is the 
Ship Self Defense System?
    Answer. SSDS MK-1 is an outstanding system. The commercial off the 
shelf, open architecture technology incorporated into the SSDS MK-1 
system to provide sensor fusion and automatic anti-air defense 
detection through engagement is truly revolutionary.
    Question. Last year, the Committee brought to your attention 
anomalies in your budget request that upon reflection the CNO, Admiral 
Pilling, and you told us needed to be fixed. The Ship Self Defense 
System was one of those items, so our committee provided additional 
funds last year. Please explain why the Navy has requested procurement 
funding for only 2 SSDS systems in fiscal year 1999, compared to your 
plan last year to purchase 5 systems in 1999.
    Answer. The unit cost figures provided in the fiscal year 1998 
President's Budget represented the best available estimates based on 
the SSDS MK-1 Cost and Operational Effectiveness Analysis. Subsequent 
to the LSD 41 system evaluation it was determined that additional 
equipment was required to maximize system performance. Specifically, an 
additional $1.9 million was required to incorporate a command table, 
updated Interrogation Friend or Foe (IFF) system, and large screen 
tactical display to allow the ship's commanding officer and tactical 
action officer to employ the system properly. Also, Navy required $4.8 
million of additional installation funding to install the 2 systems 
Congress added to the fiscal year 1998 President's Budget.
    Procurement funding in the fiscal year 1999 Budget request is a 25% 
increase over the fiscal 1998 Budget (fiscal year 1998 = $17.5 million, 
fiscal year 1999 = $22.9 million). The number of planned installations 
reflects actual unit cost of $6.0M vice fiscal year 1998 President's 
Budget estimated cost of $3.2 million.
    Question. Admiral Lautenbacher, what now justifies a 60 percent 
reduction in SSDS funding in fiscal year 1999 (two ship installations 
rather than five)?
    Answer. There is no reduction in SSDS funding in fiscal year 1999. 
Navy requirements for Maritime Force Protection of surface ships are 
contained in the Ship Class Anti-Air Warfare Self Defense CAPSTONE 
Requirements Document which was approved by the Chief of Naval 
Operations in February 1996. This document specified the ship self 
defense anti-air warfare contribution for each ship type and spells out 
the raid size, density, and required Probability of Raid Annihilation 
(PRA) for battle force and amphibious ready group ships. Furthermore, 
it identifies the operational environments that may be encountered in 
the post Cold War era.
    Procurement funding in the fiscal year 1999 Budget request is a 24% 
increase over the fiscal year 1998 Budget (fiscal year 1998 = $17.5 
million, fiscal year 1999 = $22.9 million). The number of planned 
installations reflects actual unit cost of $6.0 million vice fiscal 
year 1998 President's Budget estimated cost of $3.2 million. Navy 
utilizes a Combat Systems approach to validate each ship class 
performance against this Capstone requirement. All systems in the 
detection through engage sequence are modeled against the validated 
Defense Intelligence Agency threats. No one system is good enough, by 
itself, to meet the Capstone performance requirements. For the LSD-41 
class, the SSDS installation plan has been aligned with the fielding 
plan for the other major upgrades planned for the ship--most notable 
the RAM weapon system. Accelerating SSDS without coordinating the 
fielding plan with other required upgrades would do little to improve 
the ship's performance against the predominant anti-ship cruise missile 
threat.
    Question. What justifies a 38 percent reduction in SSDS ship 
installations between fiscal years 1999 to 2002 (18 ship installations 
rather than 29)?
    Answer. Navy's fiscal year 1999-2002 fielding plan represents a 
balanced approach to fielding maritime force protection capability 
rather than focusing on individual system procurement plans. As stated 
previously, Navy utilizes a combat systems approach to validate each 
ship class' performance against this Capstone requirement. All systems 
in the detection through engage sequence are modeled against the 
validated Defense Intelligence Agency threats. No one system is good 
enough, by itself, to meet the Capstone performance requirements. The 
SSDS Fielding plan is indicative of this balanced approach to maritime 
force protection. The reduction is the result of the per unit cost 
increases previously discussed.
    Question. Mr. Douglass, your statement indicates that the Navy's 
R&D budget is now $250 million higher than it was for fiscal year 1999 
in the last budget. Why couldn't you find $18 million for installation 
of potentially life saving equipment on combat ships?
    Answer. As with Maritime Force Protection, the fiscal year 1999 
President's Budget strikes a balance across all warfare areas to 
deliver the capable Navy this nation needs and Congress demands. 
Fielding the total fleet capability is our goal. The increase in the 
Navy Research and Development accounts is required to support all 
warfighting requirements.
    Navy's fiscal year 1999-2002 fielding plan represents a balanced 
approach to fielding maritime force protection capability rather than 
focusing on individual system procurement plans. As stated previously, 
Navy utilizes a combat systems approach to validate each ship class's 
performance against this Capstone requirement. All systems in the 
detect through engage sequence are modeled against the validated 
Defense Intelligence Agency threats. No one system is good enough, by 
itself, to meet the Capstone performance requirements. The SSDS 
fielding plan is indicative of this balanced approach to maritime force 
protection.

               F/A-18E/F Aircraft Performance (Wing Drop)

    Question. There have been a number of negative press reports lately 
concerning technical problems in the development of the F/A-18E/F 
aircraft. These problems are occurring in a program which is on 
schedule and under cost. Since we are in a closed session, we can 
discuss these technical problems in detail.
    What are the implications for:
     The flying quality/handling of the aircraft?
     Range and bring-back payload?
     Range cross section signature?
     Meeting development program cost and schedule goals?
    Answer. We have been able to correct wing drop using several 
technical solutions with no noticeable flying qualities/handling 
implications. The porous fairing appears to be the most promising 
solution at this time. The porous fairing posed no impact to bring back 
payload for the F/A-18E/F and a slight decrease in range. Initial 
flight test data shows the range decrease to be less than 10 nautical 
miles.
    New Technology data has been obtained at the component level and 
porous fairing has virtually no impact on the aircraft radar cross 
section.
    The Integrated Test Team is working the fine details of a 
productionized version of the wing fold fairing, e.g., moldline, 
fastener heads and contour. There are no anticipated schedule or cost 
changes.
    Question. A recent draft GAO report discusses other technical 
problems with the F/A-18E/F involving weapons separation, engine 
performance, and survivability features of the aircraft. In your view, 
are there any other problems considered to be technical ``show-
stoppers'' in the F/A-18E/F development program?
    Answer. The Integrated Test Team has identified and solved numerous 
technical problems since testing began on the F/A-18E/F, in 1996. At 
this stage of maturity in a testing program, most technical problems of 
the magnitude to be ``show-stoppers'' should have been identified. I 
see nothing at this point which I would consider a technical, schedule 
or cost ``show-stopper''. The F/A-18E/F wing drop was never considered 
a ``show-stopper''.

                       F/A-18E/F Aircraft Budget

    Question. The fiscal year 1999 budget requests $2.9 billion to 
purchase 30 F/A-18 E/F aircraft, an increase of ten aircraft from the 
1998 appropriated level (20 aircraft). Mr. Douglass, what is the status 
of the F/A-18E/F development program?
    Answer. The F/A-18E/F Super Hornet is a textbook model of how a 
successful acquisition program should be run. The program is 95 percent 
complete after six years and is on cost, on schedule and meeting or 
exceeding technical requirements. This Program Team is obviously doing 
things right. At present, the Cost Performance Indices are 100.9 
percent and 93.1 percent for the airframe and engine manufacturers, 
respectively. Corresponding Schedule Performance Indices are 99.3 
percent and 99.2 percent. With so little of the Engineering and 
Manufacturing Development (E&MD) program remaining, I am confident we 
will continue to see these impressive numbers through the completion of 
E&MD.
    Question. You have not yet approved low rate production of the Lot 
II (fiscal year 1998) aircraft, which otherwise would have been 
accomplished last fall, due to the wing drop issue. When is the low 
rate production decision now planned, and what does this mean to the 
program schedule?
    Answer. The low rate production decision will occur in the late-
March/early April 1998 timeframe. Contractual coverage with advanced 
procurement funds for Low Rate Initial Production (LRIP) II aircraft is 
adequate through May 1998. The airframe contractor is protecting 
schedule on LRIP III with company funds.
    Question. Our nation sells F/A-18s to a number of foreign 
countries. Please explain what impact the recent Asian financial crisis 
has had on F/A-18 FMS sales, and implications for the cost of the U.S. 
production program.
    Answer. The Government of Thailand reconsidered its purchase of 
eight F/A-18C/D aircraft. This was obviously tied to the Asian 
financial situation. The U.S. government is working with Thailand to 
identify other potential customers for these aircraft. Several 
countries are currently in the market for new fighter aircraft which 
have expressed interest in the F/A-18 aircraft. We are hopeful that we 
can match up the Thailand aircraft with one of these emerging 
customers.
    In the interim, On April 3, 1998, the U.S. Government received 
confirmation from the Thais to:
          1. Convert the eight aircraft from a Thai configuration to a 
        U.S. configuration;
          2. Restructure the delivery schedule;
          3. Sell appropriate items to other, interested buyers;
          4. Defer delivery of additional F/A-18 related components to 
        Thailand; and
          5. Terminate other items to allow time to achieve a 
        comprehensive solution without exposing the Thai program to 
        further financial liability.
    Question. The total F/A-18E/F buy has been reduced from 1,000 to 
548 aircraft, and the Navy now plans to build a higher proportion of 
``F'' model aircraft than before. Please explain these changes.
    Answer. The fiscal year 1999 budget reflects a QDR revised 
procurement objective of 548 aircraft with a mix (314E/234F) that 
reflects a roughly proportional reduction from the (608E/392F) mix in 
fiscal year 1998 budget. The mix of E/Fs included in the current FYDP 
supports the Navy's transition plan of F-14s into F/A-18Fs and F/A-18A/
Cs into F/A-18Es. In the fiscal year 2000 budget development process, 
the Navy is refining the optimum outyear mix of E/Fs to meet force 
structure and mission requirements.
    Question. Aircraft weight affects range, speed, payload, and 
carrier recovery payload. How is the F/A-18E/F doing in regard to its 
weight goals?
    Answer. The aircraft is approximately 450 pounds under 
specification weight.
    Question. Fiscal year 1999 funds the third production lot of F/A-
18E/F aircraft. Is all support equipment which is necessary to 
completely stand up the first F/A-18E/F squadron at Initial Operational 
Capability (IOC) fully funded? If not, how much additional funds in 
fiscal year 1999 would be needed to rectify that problem?
    Answer. Support equipment necessary to completely stand up the 
first F/A-18E/F squadron at IOC is fully funded. No additional funds in 
fiscal year 1999 will be required.

                       Joint Strike Fighter (JSF)

    Question. The fiscal year 1999 budget requests $920 million in the 
Navy and Air Force to continue the Joint Strike Fighter concept 
demonstration phase. The total R&D cost of the JSF is estimated to be 
$2.3 billion. What significant events occurred during the past year, 
and what significant events are scheduled in 1998 and 1999?
    Answer. In fiscal year 1997, the following significant events 
occurred:
     Awarded contracts to Boeing, Lockheed Martin, and Pratt 
and Whitney for a multiyear $2.2 billion competitive Concept 
Demonstration Program (CDP).
     Successfully completed initial technical baseline and 
design reviews with Boeing, Lockheed Martin, Pratt and Whitney, and 
General Electric.
     Numerous Technology Maturation efforts completed critical 
design reviews.
     The Services completed the second iteration of the 
requirements.
     Denmark, Norway and the Netherlands signed agreements to 
join the program with a focus on requirements validation.
    In fiscal year 1998, the following significant events occurred:
     The first engine core assembled at Pratt and Whitney in 
February 1998 (engine comprised of core, turbine, and fan).
     Canada formally joined the program, focusing on 
acquisition processes and the basic JSF design concept development.
    In fiscal year 1998, the following significant events are scheduled 
to occur:
     First engine to test in early summer of 1998.
     Final design reviews for the Boeing and Lockheed Martin 
Concept Demonstrator Aircraft (CDA) in summer 1998.
     Third iteration of the requirements completes in August 
1998.
    In fiscal year 1999, the following significant events are scheduled 
to occur:
     Rollouts of the primes' Concept Demonstrator Aircraft; 
ground testing begins preparatory to first flights in 2000.
     The Services complete the JSF Joint Operational 
Requirements Document in December 1999.
     About half of the ongoing technology maturation 
demonstrations are completed.
     Request to begin negotiation with the United Kingdom for 
cooperative partnership in Engineering and Manufacturing Development.

    Question. DoD expects foreign countries to participate in the Joint 
Strike Fighter program, and to contribute significant amounts to its 
cost: United Kingdom ($200 million), Denmark and Norway ($32 million), 
and Canada ($11 million). What do these countries pay for, and what do 
they get? What other countries are being invited to participate in the 
program?
    Answer. The United Kingdom is a Collaborative Partner; fully 
integrated and participates in all aspects of the program; and has 
influenced the design of the aircraft. Denmark, Norway, and the 
Netherlands are Associate Partners to assist them in performing 
requirements validation analyses, incorporate them in modeling and 
simulation efforts; very limited, if any, influence on JSF 
requirements. Canada is involved as an Informed Partner; they 
participate in the acquisition process in order to understand the 
design concept; they cannot influence requirements.
    Question. The Joint Strike Fighter will be very stealthy in terms 
of reduced radar signature. How does DoD plan to export this 
technology, which is of the quality achieved by the B-2 and F-22 
aircraft?
    Answer. The JSF program is in the process of developing the 
strategy for Engineering and Manufacturing Development participation 
and follow-on production, and will appropriately address these issues 
as decisions are made.
    Question. This is the first year that DoD has requested no funds in 
the DARPA line to support the Joint Strike Fighter program. Please 
explain what DARPA has contributed so far, and why it no longer has a 
role.
    Answer. Fiscal year 1995 legislation merged the DARPA CALF/ASTOVL 
program with the then-JAST Program. In February 1996 USD(A&T) approved 
DARPA's request to ``fade-out'' of the program effective in fiscal year 
1998. DARPA's position was that development under the JSF Program has 
progressed to the point where continued DARPA participation would be 
outside the bounds of that organization's charter. DARPA contributed 
$122 million (in then-year dollars) from fiscal year 1996-fiscal year 
1998.

                          V-22 Osprey Program

    Question. The fiscal year 1999 budget requests $355 million for 
continued testing and $692 million for procurement of seven V-22 
aircraft. Mr. Douglass, your statement says that the V-22 test program 
is several months behind schedule. This and other factors has lead to 
cost growth in the $6.9 billion R&D program, which is estimated to be 
$130 million.
    Last year, the Navy forecast building 473 V-22s for $34 billion 
(about $73 million each) while the current estimate is 408 V-22s for 
$26 billion (about $64 million each). So while we have a ``blip'' on 
the R&D side, there are major savings on the production side--as the 
Committee has been saying for a number of years. Please explain these 
changes.
    Answer. The decrease in the Navy procurement estimate reflects 
savings as a result of accelerated production rates (about $1.5 
billion), lower total aircraft quantities ($3.0 billion), reduced 
support costs ($3.0 billion) inflation/economic adjustments ($0.7 
billion), and revised flyaway estimates ($0.2 billion).
    Question. Excessive downward ``propwash'' on deploying troops 
remains a challenging technical issue. Please explain what is being 
done to address it.
    Answer. A quantitative assessment (collection of flow data) of the 
V-22 proprotor downwash was completed in December 1997. Initial 
analysis of the data shows that the V-22's downwash is comparable to 
that of helicopters. The velocity profile data will be utilized in 
developing acceptable operational procedures for aircrew and personnel 
working near the airplane. It is not viewed as a problem.
    Question. A recent GAO audit indicates that the Navy has not 
included a ground collision avoidance and warning system with voice 
warning on V-22 production aircraft. Please explain your rational for 
deleting this equipment. Could such a capability be included in the 
aircraft if Congress were to provide additional funds in fiscal year 
1999?
    Answer. The equipment was not deleted. A Ground Proximity Warning 
System (GPWS) is not presently available for integration on the V-22. 
Forms of GPWS exist for helicopters and fixed wing aircraft, but a 
system for a tiltrotor has not yet been developed. Non-recurring 
development and integration is projected to be a two-plus year effort 
and is estimated to cost approximately $18 million. Based on current 
planning (fiscal year 2000 start), GPWS integration is planned for 
fiscal year 2001. If Congress provided funds in fiscal year 1999, GPWS 
could be added to the fiscal year 2000 production aircraft.
    Question.Is all support equipment necessary to completely stand up 
the first V-22 squadron at Initial Operational Capability (IOC) fully 
funded?--if not, how much additional funding would be needed in fiscal 
year 1999 to rectify this problem?
    Answer. The V-22 suppport plan is to provide O-level capability by 
IOC in fiscal year 2001 and full I-level capability by 2003. All known 
O-level requirements are funded at this time. I-level requirements will 
be better defined as in the fiscal year 2000 budget development 
process.
    Question. Is the aircraft meeting its weight projections?
    Answer. Yes, the MV-22 is currently 722 pounds under specification 
weight.

                 LPD-17 Amphibious Transport Dock Ship

    Question. The LPD-17 class of 12 ships allows the Navy to retire 41 
current ships and reduce manpower by 7,800. Congress provided $100 
million in fiscal year 1998 for advance procurement for the second LPD-
17 ship, and the 1999 budget requests $628.8 million to complete its 
construction.
    Mr. Douglass, what is the status of the LPD 17 program?
    Answer. A contract for detailed design and construction was awarded 
on December 17, 1996, to an alliance led by Avondale Industries. The 
alliance includes Bath Iron Works, Hughes Aircraft Corp., Sperry 
Marine, Lucent Technologies, and Intergraph. The losing bidder, Ingalls 
Shipbuilding, contested the award. Since we briefed you last year, the 
General Accounting Office upheld the Navy's decision to award the lead 
ship contract to Avondale Industries, Inc. and performance under the 
contract resumed in April 1997. Avondale will build eight LPD 17s. Bath 
Iron Works will build four LPD 17s. In June 1997, the Integrated 
Product and Process Development Team was established at Avondale with 
the program manager, most of the program office, and many functional 
experts collocated on-site in New Orleans, LA. LPD 17 is a solid 
program on the forefront of acquisition reform, is an excellent low 
risk design, and is making excellent progress toward the urgent 
requirement to replace aging amphibious ships in the Fleet.
    Current procurement and commissioning profiles are:

----------------------------------------------------------------------------------------------------------------
                                        96   97   98   99   00   01   02   03   04   05   06   07   08   09  Tot
----------------------------------------------------------------------------------------------------------------
LPD 17s Funded.......................    1    0    0    1    2    2    2    2    2  ...  ...  ...  ...  ...   12
LPD 17s Commissioned.................  ...  ...  ...  ...  ...  ...    1    1    1    2    2    2    2    1   12
Total in Inventory...................  ...  ...  ...  ...  ...  ...    1    2    3    5    7    9   11   12   12
----------------------------------------------------------------------------------------------------------------

    Question.What consideration are you giving to multiyear procurement 
for future LPD 17 ships?
    Answer. The Department of the Navy will examine a multiyear 
procurement for 10 of the 12 LPD 17 class ships funded in fiscal year 
2000 through fiscal year 2004. The LPD 17 is the replacement for four 
aging classes of ships (LST, LKA, LSD 36, LPD 4) built between 1965 and 
1973. When construction is complete, the 12 ships will allow the DON to 
meet both our forward presence requirement for Amphibious Ready Groups 
(ARGs) and the fiscally constrained warfighting goal of 2.5 MEBs of 
lift. Additionally, the LPD 17 class will eliminate our reliance on 
mothballed ships presently needed to meet our 2.5 MEB lift goal.
    Question. The Navy recently announced its decision to remove the 
LPD-17's main self defense weapon for protection against anti-ship 
cruise missiles (the Enhanced Sea Sparrow Missile). Please explain your 
rationale.
    Answer. Navy's individual ships class Maritime Force Protection 
planning is based on providing the most cost-effective force protection 
possible, consistent with available funding, force wide. Furthermore, 
all ship classes will receive or retain a level of force protection 
consistent with their expected service life and potential exposure to 
operational threat environments.
    To ensure appropriate Maritime Force Protection capability across 
the battle force, the same rigor used to select Anti-Air Warfare self 
defense configuration for DDG-51 Flight IIA ships was applied to ships 
with primary missions other than air defense, like the LPD-17. When 
operating independently, LPD-17 will be as capable as any other ship to 
deal with expected threat levels in the normal operating environment.
    To accomplish this in the LPD-17 design, Navy has invested heavily 
in the benefits of RCS reduction combined with softkill (NULKA) 
capability; this combination provides a fundamental shift in 
warfighting philosophy for this amphibious ship class. In addition, RAM 
hardkill provides the firepower and performance necessary to meet Navy 
Capstone requirements and Congressional guidance against the validated 
threat. The Anti-Air Warfare combat system configuration for the LPD-17 
class, selected after careful analysis, meets all threats through 2012 
with growth potential provide to meet far term threats when defined.
    Question. The Navy has elected to also remove the Vertical Launch 
System from the ship, which would have been necessary for launching the 
ESSM missile but which would have provided the Marines with the 
capability to launch land-attack missiles (such as ATACMS) in direct 
support of Marine amphibious assault combat operations. What is the 
cost to put a Vertical Launch System on an LPD-17 ship, and given this 
relatively low amount, why don't we go ahead and do it while the ships 
are being constructed? Isn't it penny-wise and pound-foolish to drop 
the VLS systems now?
    Answer. The decision to remove the Evolved Sea Sparrow Missile 
(ESSM) and its Vertical Launching System (VLS) is based on requirements 
and affordability. LPD 17 has no mission requirement to launch land 
attack missiles. A VLS launcher to fire ESSM missiles was originally 
planned for LPD 17 to contribute to the force protection of the LPD 
from anti-ship cruise missiles in a multi-tiered, hardkill and softkill 
layered structure. ESSM and VLS are not required to meet the Navy Anti-
Air Warfare (AAW) CAPSTONE Requirement for self defense against anti-
ship missiles for the LPD-17 class. The LPD-17 class will be equipped 
with the Rolling Airframe Missile (RAM) and NULKA decoy. These, in 
combination with low radar cross-section design meet the AAW CAPSTONE 
Requirement and Congressional guidance against the validated threat. 
Cabling and foundations for VLS (for ESSM) remain in the LPD-17 design 
to accommodate the addition of ESSM in the future should threats beyond 
the capability of RAM require it.
    The LPD 17 program was reduced by $434 million when the decision 
was made to remove VLS and ESSM from eight ships in fiscal year 2000 
through fiscal year 2003. A cost estimate for stand-alone VLS 
installation without an associated missile has not be conducted, 
however, it is estimated that a land attack missile could cost twice as 
much as ESSM. If these systems are installed after delivery of the 
ships, it is estimated that there is at least a 30 percent premium to 
reflect the costs of ripping out existing structure and shipboard 
equipment and then installing the missile magazines and systems. This 
premium is based on reserving space and weight for backfits, and if 
these reservations are not made now, the premium is expected to be 
higher than 30 percent. Additionally, there would be the costs 
associated with the Weapons Control and Command and Control for the 
land attack mission which is currently not in the LPD-17 design.
    The Mk41 VLS was designed to be part of the multi-layered self 
defense system of LPD-17. In a threat environment, maritime dominance 
and subsequent force protection will be established and maintained by 
Aegis combatants. Amphibious forces will close the operating area once 
the threat has been diminished. In situations where amphibious forces 
could be detached to operate independently, combatants would be 
committed when required by threat. Navy's individual ships class 
Maritime Force Protection planning is based on providing the most cost-
effective force protection possible force wide, consistent with 
available funding.

                        CVN-77 Aircraft Carrier

    Question. CVN 77 is the tenth and last ship of the Nimitz class. 
Last year, Congress provided $50 million to initiate the ``Smart Buy'' 
advocated by Newport News. In the fiscal year 1999 budget, the Navy has 
accelerated funding for CVN 77 in a manner which has reduced the total 
cost of the ship from $5.2 billion a year ago to $4.5 billion today. 
Just two years ago CVN 77 was predicted to cost $6 billion. The fiscal 
year 1999 budget requests $124 million in the shipbuilding account and 
$39 million in R&D to support construction of CVN 77 in 2001.
    Mr. Douglass, please explain what the Navy has done to accelerate 
funding for construction of CVN 77.
    Answer. Following a detailed review of program priorities, the 
Department's funding profile for CVN 77 has been substantially adjusted 
in the fiscal year 1999 President's Budget request. Including the $48.7 
million provided by Congress in the fiscal year 1998 DoD Appropriations 
Act, we have applied a total of $241 million above the originally 
planned advance procurement of nuclear components, for advance 
procurement and advance construction of components in fiscal years 1998 
through 2000. With assistance from the Office of the Secretary of 
Defense and the Office of Management and Budget (OMB), we accelerated 
the full funding of CVN 77 one year to fiscal year 2001. The resultant 
profile, which shortens the production gap between CVN 76 and CVN 77, 
will provide significant industrial base benefits and savings while 
balancing other shipbuilding priorities.
    Question. Describe the Navy's plan to use CVN 77 as a 
``transitional carrier'' to incorporate some technologies on it that 
will bridge to the next generation of carriers (CVX).
    Answer. The Navy has budgeted R&D funding to support the ``Smart 
Transition'' approach for CVN 77. These funds will assess, select, and 
develop process changes and technologies which will reduce the total 
ownership cost of CVN 77 as well as provide opportunities for backfit 
into the previous nine ships of the CVN 68 class. CVN 77, as the smart 
transition carrier, will also provide opportunities to reduce 
technology risk for CVX.
    Fiscal year 1998 is the initial year of the CVN 77 RDT&E effort. A 
joint CVN 77 and CVX aircraft carrier R&D roadmap is being developed to 
achieve R&D synergies between the two programs. Additionally, 
guidelines have been established to ensure that the CVN 77 R&D design 
process identifies, evaluates, and ultimately incorporates transition 
technologies on CVN 77 that can also benefit CVX.
    The CVN 77 R&D program has concentrated its resources in seven key 
focus areas. These areas are Manpower and Material Support, Design 
Tools and Processes, Hull, Mechanical, Electrical, and Auxiliary 
Systems, Combat and Intelligence Systems, Aircraft Launch, Recovery, 
and Support, Battle Damage Prevention and Recovery, and Propulsion and 
Power Generation. These R&D investment focus areas have been aligned 
and integrated with the CVX program to prevent duplication of effort. 
These focus areas further address O&S cost reduction efforts for both 
manning and maintenance within their respective systems.
    Over the coming year, CVN 77 R&D transition technology candidates 
will be evaluated for risk reduction to CVX and overall return on 
investment.
    Question. In last years budget, the Navy deleted $300 million of 
``transition technology'' development. What is the Navy's plan for 
transition technology development in support of CVN 77? How much is 
funded? How much remains unfunded?
    Answer. The Navy's plan is for CVN 77 ``transition technology'' 
efforts to reduce aircraft carrier Operation and Support costs and to 
help transition to the next generation of aircraft carrier, the CVX. 
Toward this end, the CVN 77 research and development investment has 
been structured to identify and validate transition technologies which 
will enhance shipboard workload reductions, reduce life cycle costs for 
CVN 77 and the other nine ships of the NIMITZ class, and mitigate 
future risk for CVX.
    Transition technology funding is being addressed in development of 
the fiscal year 2000 budget. The total CVN 77 funding of $4.45 billion 
in the Future Years Defense Program accompanying the Fiscal Year 1999 
President's Budget request was derived from application of revised 
Office of Management and Budget inflation projections to the $4.6 
billion ``limitation on total cost of procurement'' of CVN 77 
established in Section 122 of the fiscal year 1998 National Defense 
Authorization Act. In a February 9, 1998, letter to the Congressional 
Defense Committees, the Secretary of the Navy advised that this ``cost 
cap'' (and the attendant funding for CVN 77) may need to be adjusted at 
some time in the future to reflect differences in the Department's plan 
(as outlined in the fiscal year 1998 Budget request) from the 
shipbuilder's original ``Smart Buy'' funding plan, as well as the cost 
of new transition technology which we plan to incorporate into CVN 77. 
Before the Secretary adjusts the ``cost cap'', we will evaluate our 
program with the shipbuilder to ensure that all possible cost reduction 
efficiencies are considered. With the fiscal year 2000 President's 
Budget request, the Navy will provide the required annual report giving 
a full evaluation and any revision to cost cap, as well as the plan for 
transition technologies. This additional time will also allow us to 
include results from our CVN 77 research and development program, which 
began in fiscal year 1998.
    Question. Will CVN-77 include the Ship Self-Defense System (SSDS) 
and Cooperative Engagement Capability (CEC) installed during it 
construction?
    Answer. SSDS is part of the baseline construction program for CVN 
77. CEC is being procured for every carrier in the fleet. Navy is still 
working to determine when and how to fund CEC installation on CVN-77.

                          CVX Aircraft Carrier

    Question. Mr. Douglass, why does the Navy need a new class of 
aircraft carriers?
    The fiscal year 1999 budget envisions spending about $1.1 billion 
in R&D between now and 2003 to develop a new class of aircraft carrier. 
The fiscal year 1999 budget requests $190 million for this purpose.
    Answer. The goal is to reduce the costs of operating and 
maintaining the aircraft carrier force and to maintain essential force 
levels through the next century. The current aircraft carrier design is 
capable of meeting current and foreseeable requirements, but the 
ability to improve affordability and adapt to future technology is 
limited with the existing 30 year old design. It is time now to start 
work on development of a new class of carriers that will last 
throughout most of the next century.
    Question. Do you intend to evolve the current (NIMITZ) design, or 
will it be a totally new design?
    Answer. The Navy is currently analyzing several alternative designs 
for CVX. These alternative designs run the gamut from an evolution of 
the current NIMITZ design to a totally new design which includes a new 
hull, new propulsion plant, new communications suite, new distributive 
systems, new functional arrangements and significant improvements in 
ship survivability and signature management.
    Question. The current cost estimate to build the last of the NIMITZ 
class ships (CVN-77) has fallen from $6.0 billion two years ago to $4.5 
billion today. Is it possible to build a new class of aircraft carriers 
that cost no more than today's ships? Why not continue building NIMITZ 
class aircraft carriers?
    Answer. On a average follow-on ship cost basis, the CVX is expected 
to be at or near current aircraft carrier unit costs. On a life cycle 
cost basis, the CVX will be significantly lower in costs than current 
carriers. Additionally, the CVX will have additional performance 
capabilities and will have increased survivability features 
incorporated in its design.
    The Navy goal is to reduce the costs of operating and maintaining 
the aircraft carrier force in order to maintain essential force levels 
through the next century. The current aircraft carrier design is 
capable of meeting current and foreseeable requirements, but the 
ability to improve affordability and adapt to future technology is 
limited with the existing 30 year old design. It is time now to start 
work on development of a new class of carriers that will last 
throughout most of the next century.
    Question. What is the urgency of spending so much R&D money now--
why can't we go at a slower pace?
    Answer. The fiscal year 1999 request is critical to initiate key 
technology development programs having major ship configuration and 
design impacts. Among these programs are:
    Advanced Technology Launcher--Electromagnetic catapult development 
will require development of power conversion and control systems. 
Following component development, land-based testing will be required to 
ensure safety of flight.
    Propulsion Plant Development--A new, modern propulsion plant 
requires continued funding in fiscal year 1999 to meet an fiscal year 
2006 construction start date. It has been over 30 years since the last 
carrier propulsion plant design. Funding is needed to incorporate 
lessons learned over this period of time into a new design.
    Advanced Protection Systems--Survivability of the carrier is 
achieved through passive features that protect vital ship spaces and 
are major ship configuration drivers. To keep pace with modern threats, 
and to limit the weight and space impact of upgraded protection 
systems, requires development of advanced armoring and protection 
systems. These systems will require small and full-scale land-based 
testing to ensure adequacy against the threat.
    Information Integration--Advanced computing plant architectures 
will enable significant reductions in manpower and will ensure 
survivability of the ship's computer-based systems. The information 
architecture and development of the substantial network control systems 
are key to fielding this capability. All of the ship control and 
monitoring systems that will reside on CVX in the future will need to 
be integrated into this architecture.
    Automation for Reduced Manning--Manpower is the leading driver in 
ship life cycle cost. Automated systems are key to reducing the 
shipboard manpower requirement for CVX. Development of automated 
systems must be undertaken early to enable the ship design to 
incorporate them. Unless these systems are definable early in the 
design process, the ship will be designed to accommodate large numbers 
of personnel and will not be properly arranged to enable backfitting 
automation into the ship.
    Computer Aided Design Tools--A clean-sheet aircraft carrier design 
has not been undertaken for over 30 years. Modern, computer based tools 
have not been applied to efficiently engineer, design, test and 
simulate construction of an aircraft carrier design in the virtual 
environment to significantly reduce overall product cost. These tools 
are needed now--not later.
    Question. The Navy completed the CVX Analysis of Alternatives in 
1997. What did it show? Place details in the record at this point.
    Answer. Only the first of a three-phase schedule for the CVX 
Analysis of Alternatives (AoA) was completed in 1997. This portion of 
the analysis was focused to make recommendations on the maximum size of 
the airwing on CVX, the airwing capacity, and on ship-related aspects 
of the aircraft type, specifically, conventional take-off and landing 
(CTOL) versus vertical/short take-off landing (VSTOL). The AoA analysis 
showed clearly that the smallest airwings were unable to conduct 
simultaneous strike missions and battlespace dominance missions due to 
an insufficient number of aircraft. The analysis also led to 
elimination of a ship design which would have predicated an all VSTOL 
airwing and would not have supported any CTOL aircraft.

           DDG-51 Destroyer Susceptibility to Torpedo Attack

    Question. The Secretary of Defense's Director of Operational Test 
and Evaluation made the following observation about the DDG-51 Aegis 
destroyer in a recent report to Congress: ------. Admiral Lautenbacher, 
this appears to be a serious problem. What is the Navy doing about it?
    Answer. The Navy acknowledges that the DDG-51 Class AEGIS Destroyer 
is susceptible to torpedo attack as are any surface ships when 
operating one-on-one against a highly trained enemy submarine. The 
sensor suite aboard a DDG-51 Class ship is capable of detecting post 
launch acoustic energy emitted by threat torpedoes. However, a highly 
trained and alert operator is required to classify torpedoes in time 
for the ship to take evasive action. If the classification is made in 
time, evasion techniques used by surface combatants are often 
successful. ------.
    To rectify this deficiency, the Navy has developed a Multi Sensor 
Torpedo Recognition and Alertment Processor (MSTRAP). This technology 
will be integrated via Engineering Change into the DDG-51 AN/SQQ-89 ASW 
Combat System, as the Torpedo Recognition Alertment Functional Segment 
(TRAFS). MSTRAP has been successfully demonstrated during Prospective 
Commanding Officer (PCO) operations under the witness of Surface 
Warfare Development Group (SWDG) and found to be potentially 
operationally effective and potentially operationally suitable by 
Operational Test and Evaluation Force (OPTEVFOR) in the integrated AN/
SQQ-89(V) configuration. Follow-on OT&E will be conducted in FY 1999 to 
determine the operational effectiveness and suitability of TRAFS. The 
Navy is proceeding with the introduction of TRAFS in this integrated 
configuration.
    TRAFS uses AN/SQQ-89 ASW sensors (AN/SQS-53C hull sonar, AN/SQR-19 
towed array, and AN/SQQ-28 sonobuoy processor) to detect and classify 
torpedo threats, present evasive maneuver recommendations to ship 
command personnel, and recommend placement of Launch Expendable 
Acoustic Devices (LEAD) torpedo decoys. Navy plans to backfit a Multi-
Function Towed Array (MFTA) on the DDG-51 Class Ships starting in FY05. 
In addition to active receive and passive detection capabilities, the 
MFTA will provide an enhanced torpedo detection aperture to exploit 
passive torpedo signatures for TRAFS processing.
    Navy plans to test the TRAFS and LEAD in realistic scenarios this 
year to assess the improvement to torpedo defense these two 
technologies provide. Furthermore, Navy has funded a software algorithm 
refinement effort for further TRAFS enhancement.

                     DDG-51 SQQ-89 ASW Capabilities

    Question. In discussing the DDG-51 ASW combat system (known as SQQ-
89), the report indicates that in the last test (in 1992) ``the system 
passively detected only 1 out of 6 submarine maneuvers, leaving its 
passive tracking ability in question.''
    What are the capabilities today of a DDG-51's SQQ-89 ASW combat 
system against an enemy submarine?
    Answer. Designed to detect, classify and engage a nuclear submarine 
threat in deep water, the DDG-51 AN/SQQ-89(V)6 ASW Combat System has 
outstanding capability against this enemy threat. Since the break up of 
the Soviet Union, the surface force has ostensibly changed the focus of 
ASW from a deep water nuclear threat to a shallow water littoral diesel 
threat. ------. Facing a quieter submarine threat, the Surface Ship 
Navy's strategy is to focus on improving active sonar and multi-static 
operations.
    Over the past few years, signal processing and display improvements 
have been developed and incorporated into the existing AN/SQQ-89(V)6 
hull systems (AN/SQS-53C) on DDG-51 Class Ships. Starting in fiscal 
year 2000, additional active improvements will be backfit on our most 
capable ASW platforms (Baseline III DD-963s and all DDG-51 Class Ships) 
through a COTS based adjunct capability providing improved sonar Active 
Classification. This capability will assist the sonar operators with 
initial detection of submarine echo returns through improved clutter 
reduction, automated detection algorithms and improved evaluation 
displays.
    Starting in fiscal year 2005, the surface navy will replace the 
SQR-19 TACTAS with the backfit of a Multi-Function Towed Array (META) 
on board all DDG-51 class ships. The MTFA will allow for below layer 
monostatic echo reception from above the layer, active hull array (AN/
SQS-53C). In addition, the MTFA will provide a bistatic/multistatic 
receiver capability with either the LAMPS MKIII SH-60R ALFS dipping 
sonar or another platforms' AN/SQS-53C hull sonar. This cross-layer 
detection capability has demonstrated a substantial performance gain 
against enemy submarines operating below the acoustic layer, typical in 
the littorals. In addition, the MTFA will provide an acoustic aperture 
for passive detection. Our intention is to evaluate future signal 
processing improvements developed by the submarine and surveillance 
communities, such as Advanced Processing Builds and integrate them into 
the MFTA signal processing architecture. The MFTA will also provide a 
torpedo detection aperture to exploit passive torpedo signatures for 
auto-detection and man-in-the-loop evaluation using the Torpedo 
Recognition Alertment Functional Segment (TRAFS).

                      New Attack Submarine (NSSN)

    Question. The fiscal year 1999 budget requests $219 million in R&D 
for continued development and testing and $2 billion for construction 
of the second New Attack Submarine. Mr. Douglass, what is the status of 
the NSSN program?
    Answer. The NSSN Program is on schedule to ensure the design in 
mature, construction plans and processes are in place, and material is 
available to begin construction on the lead ship in fiscal year 1998. 
The four ship construction efforts will be executed as a modification 
to the existing Integrated Product and Process Development (IPPD) 
contract with Electric Boat (EB), with Newport News Shipbuilding (NNS) 
as a major subcontractor. This approach ensures that the prime 
contractor retains responsibility for the entire design/build process, 
which is a major ``lesson learned'' from prior submarine construction 
contracts. EB has submitted a proposal with NNS as a major 
subcontractor for joint construction of the first four NSSNs. The 
Department is reviewing the proposal and contract award is planned for 
third quarter fiscal year 1998.
    The teaming arrangement between Electric Boat and Newport News was 
a controversial issue last year.
    Question. Is the teaming arrangement working?
    Answer. Yes, the teaming arrangement is working well. Some examples 
are:
    a. The free exchange of ideas and know-how between experienced 
construction personnel at both shipyards is resulting in the 
identification and implementation of improved and more efficient 
construction process.
    b. Electric Boat (EB) and Newport News Shipbuilding (NNS) formed 15 
integrated process teams, the teams have been working together over the 
past year. To date, about 50 NNS personnel have relocated to EB and are 
participating on the Design/Build Teams.
    c. Shipbuilders are sharing design data and establishing bills of 
materials.
    d. A pilot construction test will validate electronic transfer/
sharing of data between the shipyards using the electronic design 
passage.
    Question. In a new report to Congress by the Secretary of Defense's 
Director of Operational Test and Evaluation, the following observations 
are made. Mr. Douglass, could you please explain these findings and 
what the Navy has done to respond to the them?
    ``The January 1997 operational assessment indicated high risk 
existed in several programmatic areas, since formal plans of funding 
didn't exist for the external communications system, the towed array, 
mines, or anti-surface warfare missiles. As a result of DoD funding 
shortfalls, New Attack Submarine and supporting programs faced 
significant down-scoping which reduced the effectiveness of the 
submarine.''
    ``Technical risks were found in propulsion cavitation, in 
controlling electromagnetic signals, and in high data rate antennas.''
    Answer. Formal plans now exist and funding is in place to implement 
both the External Communications System (ECS) and the TB-29 Thin Line 
Towed Array on the New Attack Submarine (NSSN). There is no requirement 
in the NSSN Operational Requirements Document (ORD) for Anti-Surface 
Ship Warfare (ASUW) missile capability; however, the Navy has retained 
Over-the-Horizon targeting capability for the ship within general 
features of the combat control system and ECS so thatwhen the Navy 
develops a follow on submarine launched ASUW missile, it could be 
readily integrated into the NSSN. The Navy is evaluating offensive mine 
options to replace the Submarine Launched Mobile Mine (SLMM). The NSSN 
is committed to incorporating and employing any full diameter submarine 
launched offensive mine that is in the Navy's inventory at the time of 
ship delivery.
    A corrective action plan for propulsion cavitation was initiated in 
fiscal year 1996. Two design teams developed modified propulsor 
components which have shown acceptable performance at small scale and 
are currently undergoing quarter-scale testing to verify that 
performance. Results from these tests will provide design data in time 
to support manufacturing timelines for lead New Attack Submarine 
construction.
    Application of Commercial-Off-The-Shelf (COTS) electronics in the 
electromagnetic (EM) environment anticipated in New Attack Submarine 
caused the program to undertake a variety of risk mitigation actions. 
Projection of local EM fields was modeled and provided to electronics 
systems designers in the form of field maps. EM control and 
compatibility plans have been developed and implemented across the 
subsystems by their developers. Thirdly, the susceptibility of COTS 
electronics to EM fields has been characterized and found to be 
substantially less affected than anticipated.
    The supposition that submarine high data rate antenna size 
constraints severely limit communications bandwidth is valid only in 
very specific implementations. The ability of submarines to communicate 
with the bandwidth and data rate able to support video teleconferencing 
has been demonstrated at sea during Joint Warrier Interoperability 
Demonstration-97 and is continuing to evolve. Future application of 
commercial satellite communications promises even more robust 
communications capability.
    Question. ``Additionally, the Cost and Operational Effectiveness 
Analysis (COEA) engagement model was re-run against the Russian SSN 
using an updated Office of Naval Intelligence assessment (showing the 
advanced Russian SSN to be potentially more capable than previously 
estimated). The simulation showed New Attack Submarine having a smaller 
performance margin against the advanced Russian SSN than predicted.''
    Answer. NSSN acoustic performance margins will be reduced against 
threats with reduced acoustic signatures compared to the ``threat of 
record''. However, better than threshold level performance margins were 
sustained against even the most capable (quietest) threats postulated 
in updated threat scenario modeling. It is noted also that NSSN 
performance against these postulated threats is projected to be 
improved over that achieved by SEAWOLF. Further, the prospect of 
development and deployment of such updated threat submarines is 
questionable.
    Question. ``In shock testing of a scaled down NSSN hull section, 
human dummies demonstrated anomalous behavior. However, they were not 
instrumented, so it is not known how severe a risk to personnel will 
exist on the NSSN-unique floating modules. Additional anomalies 
discovered in undamped tests that . . . shock produced much larger 
vertical displacement than predicted, and some high capacity mounts 
tore. This is a potentially serious risk. . . .''
    Answer. Deck motion vertical displacement (in inches) with 
undamped, unsnubbed mounts were larger than initially predicted. 
However, even with the larger than anticipated displacements and 
despite some tearing of the mounts elastomer material, the mounts 
satisfied their specification. Further, subsequent tests with the torn 
mounts demonstrated that they still satisfied specification. Current 
design includes mechanical dampers which further limits the motion of 
the deck module under shock and reduces the induced motion to within 
acceptable limits for COTS electronics mounted on the deck.

                      Strategic Sealift/LMSR Ship

    Question. The fiscal year 1999 budget requests $251.4 million to 
construct the last of 19 Large Medium Speed Roll-On/Roll-Off ships 
(LMSRs), which are used to support Army operations during war.
    Mr. Douglas, since the first 18 ships were funded in the Sealift 
Fund, what is the merit of funding the last ship in the Shipbuilding 
account as the 1999 budget proposes?
    Answer. Procurement of the last ship in fiscal year 1999 has been 
shifted to the Shipbuilding Conversion, Navy appropriation to provide 
maximum visibility of our recapitalization efforts.
    Question. The Committee understands that OSD removed funds during 
the last internal budget process based on a DoD/IG report that 
suggested possible savings in the program. How much was removed and 
why?
    Does the Navy think this level of savings is valid?
    If this amount of savings cannot be obtained, what is the 
implication on configuration of the LMSR ships and their utility to 
support wartime operations?
    Answer. Funding for the LMSR program was reduced by $31.0 million 
primarily in anticipation of the savings postulated by a finding in the 
DoD/IG audit report which suggested that the Operational Requirements 
Document (ORD) did not require cargo space temperature and humidity 
control equipment on the last six LMSRs. Initial estimates from the two 
shipbuilders suggests that little savings will be achieved by removing 
the equipment. Since there is no potential for realizing the previously 
estimated savings and considering the major impact to full utilization 
of any of these ships in the prepositioned role, the space temperature 
and humidity control equipment on all 19 ships will be retained. No 
additional funds are required to retain these systems. Contractor 
(NASSCO) efficiencies will cover the additional cost.
    Question. Last year the Navy disclosed a $131 million overrun on 
the first five LMSR ships, which were conversions of existing ships 
rather than new construction. What is the current estimate?
    Answer. The Navy still continues to anticipate a $131 million 
overrun for the five conversion LMSRs all of which have been delivered.
    Question. What is the performance in terms of cost and schedule on 
new construction LMSR ships?
    Answer.
                                 NASSCO
     The Navy anticipates delivery of the lead ship 
approximately five months early (June 1998) with similar early interval 
delivery on all follow on ships.
     NASSCO will deliver the seven new construction ships at 
approximately target cost with the potential to come in below target.
                                AVONDALE
     The Navy anticipates delivery of the lead ship in August 
1998 (from January 31, 1998) due to a defect in Peck & Hale cloverleaf 
cargo tiedown fittings and delays in testing. The defect will also 
impact delivery dates on all follow on ships.
     The Navy estimates that Avondale will deliver the seven 
new construction ships at slightly above target cost but will 
experience a profit on the total contract.
    Question. When OSD reestimated inflation rates last fall, how did 
this affect the Sealift fund in fiscal years 1998 and 1999? How much 
does the changes in inflation indices show should be applied to the 
fund in each year, and how much of that amount has actually been 
removed from the fund?
    Answer. In fiscal year 1998 no reduction was taken. In fiscal year 
1999, the National Defense Sealift Fund (NDSF) was reduced by $38 
million for inflation. The Navy estimate for total reduction to the 
fund is approximately $13.2 million ($9.6 million from the LMSR ship 
construction portion and $3.6 million from the Operations and 
Maintenance portion). Of the total $38 million amount, $14 million was 
taken out of the LMSR which transferred to the SCN account. The 
remaining $24 million was taken out the Ready Reserve Force Funds.

 Landing Craft Air Cushion (LCAC) Service Life Extension Program (SLEP)

    Question. The Navy's ``From the Sea'' strategy needs (V-22s in the 
air and Landing Craft Air Cushion (LCAC) in the water to allow Marine 
combat forces to strike at great distances. Unfortunately, the LCAC 
fleet is not in good shape and the Navy has been slow to address the 
problem. The fiscal year 1999 budget includes no funds for LCAC service 
life extension, although Congress provided $3 million in 1997 and $20 
million in 1998 as a matter of special Congressional interest. The Navy 
plans to spend $168 million on LCAC service life extension through 
2003.
    Mr. Douglass, please explain the Navy's strategy for LCAC service 
life extension.
    Answer. About 95 percent of Marine Air Ground Task Force (MAGTF) is 
projected ashore on LCACs. Along with Advanced Amphibious Assault 
(AAAV) and MV-22s, LCACs form the third and central pillar of the 
Marine's future power projection triad.
    During the Navy's Program Review 1999, it was determined that 74 of 
91 total craft were sufficient to meet future power projection 
requirements and would satisfy the fiscally constrained 2.5 Marine 
Expeditionary Brigade (MEB) lift goal by 2010. The 17 excess craft--the 
oldest and/or worst condition--will be inactivated and disassembled. 
Based on the average age (7.6 years) and condition of the 74 remaining 
craft, Navy determined that fiscal year 2000 is sufficiently early to 
commerce the service life extension program. Navy will program SLEPs to 
sustain the 74 craft force.
    The LCAC modernization and service life extension program will be 
conducted in two phases. Phase I, performed at the Assault Craft Units 
(I level maintenance facility), will consist of corrosion abatement 
work and may include replacement of command modules. New command 
modules will incorporate upgrades to command, control, communications, 
computers, and navigation (C4N) capabilities necessary to keep pace 
with emerging Marine Corps operational concepts. Phase II (SLEP), 
performed at the contractor site, will extend the life of the craft 
from 15 to 30 years. The major Phase II effort is the replacement of 
the buoyancy box, an area of the craft that has experienced accelerated 
corrosion. Besides extending the life of the craft, the new box will 
incorporate modifications to improve damage stability and trim, and 
improve fuel availability to extend operating ranges. LCACs that are 
not scheduled for C4N upgrades during Phase I will receive them during 
Phase II.
    The fiscal year 1997 and fiscal year 1998 Congressional plus-ups 
will be used to fund one Phase I (including a C4N upgrade) in fiscal 
year 1998, and one Phase II SLEP in fiscal year 1998/1999. 
Additionally, the Congressional plus up will fund transportation, 
disassembly, and warehousing of LCACs scheduled for inactivation, and 
detailed design work, advanced procurement and integrated logistic 
product development for future SLEPs. Approval has been granted to 
award a sole source contract to Textron Marine and Land systems to 
perform the fiscal year 1998 work. A work proposal from Textron is due 
in April 1998.
    The $22.4 million Congressional plus-ups have been distributed 
across the Operations and Maintenance, Navy (O&M,N), OPN and 
Shipbuilding and Conversion, Navy (SCN) appropriations as follows:
O&M,N: $5.69 million
    --Transportation, disassembly, warehousing of inactive LCAC
    --Corrosion portion of Phase I
OPN: $4.31 million
    --C4N portion of Phase I
SCN: $12.4 million
    --Advanced procurement
    --C4N portion of Phase II
    --Buoyancy box replacement
    --Non-recurring cost for C4N
    Question. Last year, this Committee directed that the LCAC SLEP be 
funded in the shipbuilding account. Your new budget ignores our 
direction, funding it instead in the O&M and Other Procurement 
accounts. Why?
    Answer. The actual Phase II Service Life Extension portion for the 
LCACs will be performed with SCN funds. The Phase II SLEP deals with 
the problem of corrosion deterioration which compromises the watertight 
integrity of the craft through installation of a new hull or buoyancy 
box.
    Phase I tasks replacement of obsolete C4N equipment and correction 
of corrosion deficiencies of the hull to get the craft to the 15 year 
point. These efforts are more appropriately funded in Other 
Procurement, Navy and Operations and Maintenance, Navy, respectively.
    Question. The Committee understands that the navy plans to 
reprogram the 1998 funds we provided in the Shipbuilding account into 
the O&M and Other Procurement accounts, in contravention of the 
specific direction on the matter. Given our Committee's known keen 
interest in LCAC SLEP, do you plan to submit such a reprogramming to 
the Committee on a prior-approval basis?
    Answer. The Phase II of the LCAC SLEP program is being funded in 
SCN. However, some of the tasks necessary to maintain the craft in 
fleet readiness and modernize prior to a scheduled SLEP are funded in 
the Other Procurement, Navy (OM, N) appropriations. For example, 
cropping out corroded portions of the service craft and replacing with 
aluminum plates is general maintenance of the craft and is funded in 
the OM, N appropriation. Replacing the unreliable, obsolete component 
of Command, Control, Communication, Computers, and navigation (C4N) 
equipment is an upgrade/modernization of the service craft and is 
funded in the OPN appropriation. Navy intends to inform the Committee 
of the reprogramming requirements including the amount of reprogramming 
and the rationale for it by April 1, 1998.

                      New Design Destroyer (DD-21)

    Question. The fiscal year 1999 budget envisions spending about $874 
million in R&D between now and 2003 to develop a new class of 
destroyers. The fiscal year 1999 budget requests $85 million for this 
purpose. In only one year, development costs have already risen by 15 
percent ($762 million last year vice $874 million currently).
    Mr. Douglass, why does the Navy need a new class of destroyers?
    Answer. The emphasis on naval operations in the littoral, coupled 
with the decommissioning of DD-963 and FFG-7 classes, will create 
shortfalls in the capability of the surface force to execute the land 
attack mission in a cost-effective manner. The DD 21 Operational 
Requirements Document further describes the shortcomings of the 
existing systems. The SC-21 Cost and Operational Effectiveness Analysis 
(COEA) analyzed both new designs and evolving the DDG-51 class as means 
of correcting the shortfalls. The COEA concluded a new class was the 
most cost-effective solution to satisfy Navy mission requirements in 
the littoral.
    Question. Do you intend to evolve the current (DDG-51 Aegis) 
design, or will it be a totally new design?
    Answer. The DD 21 will be a totally new design. The requirement for 
a new design is driven by the aggressive land attack, signature, 
survivability, manning, and cost objectives documented in the DD 21 
Operational Requirements Document (ORD). The SC-21 Cost and Operational 
Effectiveness Analysis (COEA) analyzed evolving the existing DDG-51 (in 
Decision Alternatives DA-01 and DA-03) and rejected this approach as 
cost prohibitive and not satisfying the mission requirements.
    Question. What are the deficiencies of the DDG-51 Aegis class that 
warrant spending around $1 billion on a new design? Describe each in 
detail for the record.
    Answer. DDG 51 does not meet the CJCS-approved Operational 
Requirements for DD 21 in several areas. The most important include:
     DD 21 is required to support the land campaign by 
engaging, suppressing, and destroying targets ashore. Modifying the DDG 
51 to provide the required level of firepower is cost prohibitive.
     The procurement cost objective for the fifth DD 21 hull is 
$750 million (in fiscal year 1996 dollars) at each shipyard.
     The DD 21 Operations and Support (O&S cost objective is 
70% lower than a DDG 51. Radical changes in ship design and manning are 
required to achieve this level.
     The DD 21 manning objective is 95 people. Current DDG 51 
manning is 383. The DDG51 ship design and associated legacy systems 
onboard severely limit manning reductions.
     DD 21 requires substantial ship signature reductions from 
DDG 51 levels, and redesigning DDG 51 to meet the aggressive acoustic, 
magnetic, RF, and IR signatures is cost prohibitive.
     The DD 21 design and architecture will facilitate pacing 
the evolving threat and transition to the next generation cruiser. An 
open, modular ship architecture is needed and cannot be achieved on DDG 
51 without significant and costly redesign.
    Question. Are the contractors for this class of ship likely to be 
different than the incumbent contractors on the current destroyers?
    Answer. One industry team has announced its intention to bid on DD 
21. Others are expected. All major corporations building DDG 51 have 
announced their intentions to bid on DD 21.
    Question. What is the urgency of spending so much R&D money now--
why can't we go at a slower pace?
    Answer. The Operational Requirements established for DD 21 are 
technologically challenging. The Navy has developed, and OSD has 
approved, an innovative and aggressive acquisition strategy that will 
meet those goals through the use of new acquisition practices that will 
inspire industry competition. The current schedule is achievable, but 
reductions in RDT&E funding would cause a slip in the IOC for DD 21. In 
order to avoid a significant gap in production for surface combatants, 
DD 21 must enter production in fiscal year 2004, and start series 
production in fiscal year 2005. DoD established a requirement for 57 
DDG 51 class ships. At the current rate of production, all 57 ships 
will be ordered by fiscal year 2003 and will be completed by fiscal 
year 2008. With a fiscal year 2004 start, DD 21 production will allow 
for near-continuous surface combatant production at a rate of three 
ships per year. The net result minimizes industrial base peaks and 
valleys caused by significant breaks in surface combatant production 
which would mean increase costs to the taxpayer.
    Question. The Navy advertises this ship as a ``Land Attack 
Destroyer'', and the lead ship is estimated to cost at least $1.2 
billion. For $1.5 billion, the Navy could convert 4 excess Trident 
submarines (assuming START II is ratified by the Russian government) to 
each carry over 100 land attack missiles. What formal analysis has been 
done between the Navy surface and submarine communities to ensure no 
duplication of effort?
    Answer. The SC-21 Cost and Operational Effectiveness Analysis 
(COEA) analyzed several approaches for providing immediate, massive 
firepower to support the Unified CINC early in the campaign. One of 
these alternatives considered Production Arsenal Ships, which would 
fulfill a role much like the one you postulated for Trident submarines. 
That alternative was found to be less effective than the selected (DD 
21) alternative. Additionally, since the Trident SSGN remains a concept 
with no funds yet applied, formal analysis on it has not been conducted 
for such a comparison.
    Question. How often do Navy DDG-51 or destroyers go to sea with a 
full load of missiles in their Vertical Launching System? What formal 
analysis has been done by the Navy to see if the Land Attack Destroyer 
mission can be performed by existing DDG-51 ships simply by fully 
loading their VLS cells?
    Answer. DDG-51s carry a mix of USW (vertical launch ASROC), strike 
(Tomahawk) and AAW (Standard) weapons in the Vertical Launching System 
(VLS) when deployed out of CONUS. The exact mix is based on a shipfill 
allowance tailored by the Fleet CINCs to meet the requirements in a 
particular theater. Fleet CINCs review NonNuclear Ordnance Requirements 
and publish revised shipfill loadouts annually.
    The SC-21 Cost and Operational Effectiveness Analysis (COEA) 
analyzed variants of the DDG 51, as well as new ship designs (i.e., DD 
21), to address the projected capability shortfalls of the future 
surface combatant force. All ships were analyzed assuming full VLS 
loadouts. The COEA found DD 21 to be the most cost-effective solution. 
DDG 51, even with a full VLS loadout, was found inadequate to meet the 
needs of land attack in the littoral.
    Question. The Navy claimed last year that it needed to build a $500 
million Arsenal ship as a ``demonstrator'' platform for SC-21. Since 
Arsenal ship is now defunct, how will SC-21 technologies be 
demonstrated at sea to reduce risk prior to ship construction?
    Answer. The DD 21 Program Office has identified alternative test 
strategies for all of the technologies initially proposed for the 
Maritime Fire Support Demonstrator.
    Key systems or technologies will be tested at land based test sites 
followed by selected at-sea testing on operational ships, dedicated 
test ships (such as the SSDS test ship ex-DECATUR) or other platforms 
as appropriate.
    Question. How much did the Navy add to the SC-21 R&D program in the 
new budget to compensate for loss of the Arsenal ship demonstrator, and 
how will these funds be used?
    Answer. The fiscal year 1999 President's Budget reflects an 
increase of $110 million over the previous budget in the area of RDT&E 
core funding for DD 21 and associated technologies. This funding is 
primarily used for program risk mitigation and additional land based 
testing.
    Risk mitigation techniques include:
          --Navy participation on contractor IPTs;
          --Use of both government and contractor testing;
          --Exploitation of state-of-the-art Computer-Assisted Design 
        and Modeling (CAD/CAM) techniques;
          --Use of Land Based Engineering Sites (LBES) and enhanced 
        modeling and simulation.
    Question. Is SC-21 on any of the CINC integrated priority lists?
    Answer. The CINC integrated priority lists contain broad statements 
of required military capabilities. One would not expect to see explicit 
reference to platforms (e.g., SC-21) and/or systems in these lists, 
although the CINC statements infer requirements for SC-21. SC-21 (i.e., 
DD 21) will enhance our ability to meet many of the CINC's priorities.
    Question. In what year does the Navy project that a potential 
adversary country would field a ship as capable as today's DDG-51?
    Answer. There are a number of countries, none considered threats, 
which currently have the capability to, or are, producing a ship nearly 
equivalent to DDG-51. All of the technology required to produce such a 
ship exists outside the U.S. or is in final development. For example, 
various European nations are cooperating to develop the HORIZON family 
of surface combatants. These ships are projected to become operational 
in 2002-2004 and will incorporate a phased array radar and surface-to-
air-missile (SAM). It is possible that this class of ship could be sold 
to a threat country, but probably not until after the ships become 
operational in European navies. A second example is Russia's 
advertisement of a ``Multi-mission Major Combatant'' with phased array 
radar and SAMs. While Russia currently has no funds to produce the 
ship, the technology exists and, given a buyer, the ship could be 
completed by 2007. Finally, the French-built LAFAYETTE already exists 
and has been exported to Taiwan. Current versions do not posses an 
advanced SAM capability but the ship does incorporate many advanced 
signature reduction techniques. Future versions are likely to 
incorporate phase array radar and SAMs. In summary, the technology to 
build a DDG-51 equivalent ship already exists outside the U.S. Various 
efforts to produce such a ship are ongoing, with actual ships likely to 
be completed by 2002-2005, and proliferation to threat countries 
possible thereafter.
    DDG 51 vis-a-vis another nation's ship is not a driving factor in 
the determination to build DD 21. DDG 51 is an open ocean design 
modified to operate in the littoral and support the land campaign. DD 
21 is a ship designed and optimized for the littoral environment and 
support of land forces. DD 21 and DDG 51 capabilities are 
complementary.
    The submarine community suffered (in terms of cost and schedule) 
for many years in development of combat systems (SUBACS/BSY-1/BSY-2), 
and has recently adopted Acoustic Rapid COTS Insertion based on state-
of-the-art commercial computers and open systems architecture for all 
submarine combat systems. Your statement indicates that the Navy will 
use the SQQ-89 system as the technological foundation for SC-21, which 
suggests that the surface Navy community has not learned the lessons 
that the submarine community did in development and standardization of 
combat systems.
    Question. Mr. Douglass, what action have you taken to develop a 
common, open combat system architecture for both surface ships and 
submarines?
    Answer. As part of the SC-21 Cost and Operational Effectiveness 
Analysis (COEA) investigation of advanced computing architectures for 
DD 21, System Engineers from the NSSN and SQQ-89 (V) communities 
participated, bringing with them their experiences, lessons learned, 
and knowledge from their combat system developments. This team 
recommended a common engineering approach to development of the DD 21 
ship combat system computer architecture. The Navy has adopted this 
approach for DD 21, and will provide this data to all industry teams 
that bid on the DD 21 development contract.
    The Navy had also established a strategy known as Total Ship 
Computing (TSC) to develop and validate this common, open system 
architecture approach. The Navy's internal Technology Ship 
Characteristics Improvement Panel (TSCIP) has endorsed this strategy as 
the ``advanced computing strategy for the Navy''.
    Representatives from both the NSSN and the Surface USW (SQQ-89) 
communities are members of this team to ensure that we have not 
forgotten the lessons learned from the submarine community. The DD 21 
Program Office is well aware of the Rapid COTS Technology Insertion 
process of the NSSN Program and expects that industry will implement a 
similar strategy for DD 21. The acquisition strategy for DD 21 seeks 
innovative solutions from industry based on aggressive competition in 
the early phases of the DD 21 development process. Industry will be 
able to build on the Navy's lessons learned, and we expect to see a 
substantial improvement in the affordability, maintainability, and 
performance of the DD 21 Total Ship Computing architecture.

                       Trident Submarine Backfit

    Question. Under the conditions of the START II treaty, the Trident 
submarine force will assume a role of growing importance within the 
strategic triad by carrying approximately one-half of the allowable 
strategic nuclear warheads. The Trident Backfit program, to retrofit 14 
of the 18 boats with D-5 missile, began last year but was controversial 
in the Senate and a major issue in our conference. How much is included 
in the fiscal year 1999 budget to continue it?
    Answer. $231 million in fiscal year 1999 Other Procurement, Navy is 
requested to continued the D-5 Backfit program in this year's 
President's Budget.
    Question. What has been the effect of the Senate reductions (to 
which we agreed in conference) to the D-5 missile production program in 
terms of impact on the D-5 missile production line, the program 
schedule to support Trident submarine loadout, and outyear cost to 
restore the missiles deleted by the Congress?
    Answer. The fiscal year 1998 Defense Appropriations Act reduction 
of $65 million in WPN was intended to reduce D-5 procurement by two 
missiles, thereby slowing the rate of D-5 production.
    The actual effect was that the Program Manager was forced to break 
production lines in fiscal year 1998 for four critical components 
because the quantity dropped below minimum sustaining rates:
    (1) Post Boost Control Systems gas generators,
    (2) Nose Fairing Jettison Motor,
    (3) MK-6 Guidance system electronics Assemblies (EA), and
    (4) HMX rocket motor propellant.
    Without additional funding, the program will be approximately 44 
missiles short of the inventory objective of 434 D-5 missiles (required 
to fully out-load the 14 D-5 Trident force).
    The most cost effective plan to restore the D-5 program utilizes 
$14 million provided in the fiscal year 1999 budget request to restart 
three of the four broken production lines (all except HMX propellant) 
and run the lines at the minimum sustaining rate in fiscal year 1999. 
$130 million (fiscal year 2000-2005) is required to procure the 
hardware deleted from fiscal year 1998 at the end of the prospective 
runs and restore the HMX propellant production line as needed to meet 
loadout requirements.
    Question. Congress directed that the Navy maintain the option to 
increase (from 14 boats) to an 18 all D-5 SSBN force until the Russian 
Duma ratifies START II. The fiscal year 1999 budget contains $18 
million to begin purchasing of equipment for the last 4 Trident boats 
that will be wasted if the Russian Duma makes such ratification. What 
is the Navy's plan for investment in the last 4 Trident ships that 
would be decommissioned once START II is ratified?
    What is the potential cost next year?
    What is the potential cost during the next five years?
    How much of this cost is currently addressed in the 
Administration's future years defense plan?
    Answer. The fiscal year 1998 Defense Authorization Act prohibits 
obligating any funds to retire or dismantle (or prepare to retire or 
dismantle) Trident ballistic missile submarines, pending START II 
ratification and Congressional approval. The fiscal year 1999 budget 
has $18 million programmed to preserve the option of maintaining the 18 
D-5 Trident SSBN force. These funds provide for the procurement of 
long-lead reactor components to support the additional refueling 
overhauls. If START II is ratified, this $18 million would not be 
wasted, since these reactor components will be procured for future 
refuelings of the other Trident SSBNs.
    Maintaining this year-by-year ``hedge'' option open is only 
possible until fiscal year 2002. Beyond that a decision must be made to 
either refuel or remove the four Trident SSBNs from strategic service. 
The costs for maintaining the option for an 18 D-5 Trident force beyond 
fiscal year 1999 are not programmed, pending a recommendation for START 
I force structure by the OSD/Joint Staff co-chaired START I Task Force. 
For fiscal year 2000, the estimated costs are high as $683 million 
above the current program, and fiscal year 2001, the hedge option costs 
up to $960 million. These funds would only maintain the option for 18 
D-5 Tridents, not execute an 18 D-5 Trident program. Executing an 18 D-
5 Trident SSBN force would cost between $5 and $7 billion in additional 
funds across the Future Years Defense Program.
    The START I Task Force is presently examining both costs and 
alternative force structures in the event START II is not ratified. The 
Defense Department will make a full report on the Task Force findings 
to Congress by April 15, 1998.

           Intercooled Recuperative (ICR) Gas Turbine Engine

    Question. Three years ago, the Committee recommended that the ICR 
Gas turbine engine program be terminated, but did not prevail in 
conference. The engine was targeted by the Navy for DDG-51 Aegis 
Destroyers, but it is now clear that no DDG-51 will ever have an ICR 
engine. Over $300 million has been sunk in the project, and a total 
investment of nearly $500 million is needed to make it viable. 
Secretary Douglass, how much have we spent on ICR development so far?
    Answer. The total U.S. investment through the end of fiscal year 
1998 is approximately $326 million.
    Question. Does it work?
    Answer. Yes. The current development engine has successfully 
demonstrated a fuel savings of 22 percent, and is 
projecting a savings of 27 percent compared to an LM2500, 
mechanical drive application with a speed vs time profile similar to 
that of DDG 51s. In an all electric architecture as envisioned for DD 
21, the fuel savings attributed to ICR will be lower. The engine 
completed a 500 hour development test which revealed additional 
mandatory development work that will have to be incorporated into the 
current schedule and funding profile. The development work is required 
to engineer and implement solutions to technical problems in three 
areas: Combustor section, Recuperator, and Compressor. To be ready in 
time for the 3,000 hour qualification test in fiscal year 2000, the 
efforts to engineer, test, and implement these technical fixes must be 
integrated into the existing program.
    Question. How much is contained in fiscal year 1999 and in your 
outyear plan for additional development of the engine?
    Answer. The President's budget proposes $23.6 million in fiscal 
year 1999, $29.4 million in fiscal year 2000 and $6.9 million in fiscal 
year 2001.
    Question. How much more is required above the amount in your 
outyear plan in order to achieve development of an engine that could 
actually be installed in a ship?
    Answer. Current estimates are that about an additional $128 million 
will be required in U.S. funding for an engine that could be installed 
in a U.S. ship. This assumes that the British and the French contribute 
about $60 million in non-cash services as they have proposed to do. The 
U.S. Navy is working closely with the Royal Navy to develop lower cost 
alternative strategies that meet both services needs.
    Question. Last year, the Navy approached the British government 
about footing more of the bill for this program. How did the British 
react?
    Answer. The British reaction was mostly positive. The ICR program 
appears to be very important to the British, for their Common New 
Generation Frigate and especially for their future carrier. In light of 
how important the ICR is to them, the British and the French together 
offered to add about $60 million in non-cash services. The U.S. 
requirement for an additional $128.4 million is over and above this 
offer from our Memorandum of Understanding allies. This $460 million 
will only be provided if there are assurances that the U.S. will cover 
the $128 million shortfall and commit to at-sea testing on a U.S. ship.
    Question. The next class of surface combatants is the SC-21, which 
at best will not enter service until 2008. Yes or No: will the ICR 
engine be the engine of choice for SC-21?
    Answer. While we believe that the ICR engine will be a leading 
candidate for industry design teams, the Navy has no intention of 
dictating that ICR be used for DD 21 or any other ship acquisition 
program.
    Question. Under what conditions would the Navy terminate this 
program?
    Answer. The Navy would terminate this program if the technical 
performance of the ICR engine failed to meet our expectations. We would 
also cancel the program if the prime contractor demonstrated a 
consistent inability to successfully manage the program within the 
established costs and schedule criteria. Allied withdrawal from the 
program would also result in termination of the ICR development 
program.
    Question. Admiral Lautenbacher, would you say the ICR technology 
merits a $.5 billion investment in this program?
    Answer. The Navy expects to reach a decision concerning the U.S. 
share of the ICR shortfall as part of fiscal year 2000 budget 
development process. There are many factors to consider, including the 
ramifications of terminating the Memorandums of Understandings with the 
British and the French.
    Question. How does the fleet feel about putting ICR engines on 
their ships?
    Answer. The fleet is concerned about reliability which is 
jeopardized by the engine's complexity and the life of the combustion 
section life of about 400 hours must be improved to at least 5,000 
hours. If the technical problems can be overcome, the projected fuel 
savings are of interest to the fleet.
    Question. When all costs are considered, including over $.3 billion 
in sunk costs, how many years will it take to reach a pay back of the 
taxpayer investment in this program?
    Answer. Based on an independent analysis by the OSD Cost Analysis 
and Improvement Group (CAIG), pay back occurs in 2028, under the most 
favorable assumptions for ICR. These assumptions include the largest 
possible population of ships with ICR engines (about 80 SC 21 
equivalents) and a zero discount rate (out year savings not penalized 
for time value). The latest pay back estimated was 2037 under less 
favorable assumptions. These analyses showed a strong sensitivity to 
the number of ships in the fleet. Sunk costs were not considered in the 
analysis.

                  Defense Features on Commercial Ships

    Question. The Congress provided $50 million in fiscal year 1996 to 
allow the Navy to reimburse shipbuilders for the costs of including 
features on their commercial ships that would be useful to DoD during 
wartime. The Navy recently solicited bids for these funds, but did not 
get much of a response from industry. Mr. Douglass, what is the status 
of the Defense Features portion of the Navy's sealift fund?
    Answer. Over the last year, the Navy (through Military Sealift 
Command) ran a competition under the National Defense Features program.
    Question. What were the results of your solicitation process?
    Answer. While there were initially six offerors, all but one 
dropped out during the course of the solicitation. The Navy awarded a 
single contract to Hvide Van Ommeren for $4.9 million on August 29, 
1997 to install refueling stations on the ships.
    Question. What causes the apparent lack of interest in the program?
    Answer. At the time, the National Defense Features (NDF) Program 
was constrained by the pending Organization for Economic Cooperation 
and Development (OECD) Shipbuilding Agreement. The Agreement required 
the NDF Program to pay only for acquisition, installation and 
maintenance of features that had defense utility and required that 
operators which used these features to reimburse the government. Most 
offerors considered the red tape and accounting to be extremely 
cumbersome which deterred competition. Working with U.S. Trade 
Representatives over the past year, the Navy has stressed the need for 
the pending OECD legislation to be flexible enough to ensure that a 
follow-on program could treat the national defense features program as 
a service.
    Question. The Committee understands that the Navy can consume only 
$10 million of the $50 million appropriated. How will you use the 
remainder of the funds?
    Answer. The Navy only consumed $5 million of the $50 million total. 
Of the remaining $45 million, Navy intends to use $40 million primarily 
to fund Ready Reserve Force upgrades (strongly supported by 
USTRANSCOM). $5 million would remain in the National Defense Sealift 
Fund for establishing a renewed NDF approach and solicit industry 
interest after issues surrounding the OECD Agreement have been resolved 
and future sealift requirements have been determined in a new Mobility 
Requirements Study expected to commence the end of calendar year 1998.

                     Common Support Aircraft (CSA)

    Question. The fiscal year 1999 budget requests $27 million in the 
R&D to begin a $8 billion R&D effort, leading to a $19 billion 
production run, for a new common support aircraft to replace C-2 (COD), 
E-2, and S-3 aircraft. Mr. Douglass, what is the Navy's plan to develop 
a common support aircraft?
    Answer. Common Support Aircraft (CSA) is a phased modernization 
program to replace aging and costly E-2C. ES-3A, S-3B, and C-2A 
aircraft. The Navy wants to begin exploring a wide range of 
alternatives such as derivatives of the E-2 or a possible new start 
program that would develop a single, long service life, carrier-based 
airframe that could be delivered in different weapon system variants. A 
new start program would conceptually utilize a commercial derivative 
engine, off-the-shelf million avionics, modular construction, and open 
system architecture to achieve high commonality across all variants.
    The first task includes a formal Analysis of Alternatives, cost 
analyses and up to four industry trade study efforts. Results of the 
analyses and studies will be used to determine whether to proceed to 
with the new start option or the E-2 derivative option.
    Question. The Committee understands that the program before the 
Congress is a ten-year R&D effort which, if properly funded, could be 
accomplished in five years. Is this accurate? If yes, why not kill it 
now and fund it properly starting in 2004?
    Answer. The CSA program is properly funded in a profile that is 
compatible with affordable recapitalization of Naval Aviation. A 
portion of the ten year period is used for the analysis of alternatives 
that precedes Engineering & Manufacturing Development (EMD). The actual 
EMD profile could be accelerated somewhat into a six-year period (e.g., 
fiscal year 2002 to fiscal year 2008) but that would increase execution 
risk and would require rebalancing all naval aviation modernization and 
readiness priorities or adding resources beyond the Navy's current 
authority.
    Deferring the CSA program by four years to a 2004 start date would 
require a significant, yet low return investment to sustain current 
aircraft. Subsequent program initiation would still impact naval 
aviation priorities to fund what would be a more urgent and critical 
fleet modernization program.
    Question. How strong is the requirement for these funds in fiscal 
year 1999?
    Answer. Fiscal year 1999 funding is essential to commence the 
variety of critical activities such as the formal Analysis of 
Alternatives, cost analyses, and industry concept exploration studies. 
Without the requested funds, there is no solid basis from which to 
select the path forward.

                 Dehumidified Preservation of Aircraft

    Question. Dehumidification is a method of preventing metal 
corrosion by reducing the amount of water vapor in the air. A September 
1997 Naval Audit Service report suggests that the Navy could save up to 
$331 million between 1998 and 2003 after investment costs if it were to 
apply dehumidification technology to reduce depot maintenance actions, 
provide better care for aircraft in attrition reserve, and preserve 
Reserve aircraft during variances in training cycles. Admiral 
Lautenbacher, the auditors make it sound simple: invest $100 million in 
aircraft dehumidification equipment and save $400 million on aircraft 
maintenance. What have you done to implement the Naval Audit Service 
recommendations?
    Answer. The Navy has not acted upon the Naval Audit Service 
recommendations to date. We have concerns with its findings, dispute 
the savings cited in their report, and have requested more detail. For 
example, the report claims savings based upon reduced maintenance 
actions equating to immediate reductions in manpower at the 
organizational, intermediate and depot level, and that other deferred 
maintenance actions would be funded in ``later'' years. Additionally, 
we are concerned with the added workload involved with using 
dehumidification equipment and the difficulties of using this equipment 
at sea. We received Naval Audit Service's latest finding update on 
March 10 and will complete our analysis of this new information by 
April 30, 1998.
    Question. Mr. Douglass, have you and Admiral Lautenbacher even 
taken a briefing on this subject from your Naval Audit Service?
    Answer. Neither Mr. Douglass nor Admiral Lautenbacher were 
personally briefed. However, Naval Audit Service personnel briefed Mr. 
Schaefer and Mr. Stussie (Deputy Assistant Secretaries to Mr. Douglass) 
on the audit of Dehumidified Preservation of Aircraft (Report 052-97) 
on June 11, 1997. Additionally, Admiral Lautenbacher's Deputy, Mr. 
Blickstein was briefed on June 12, 1997.
    Question. Did you know that the Naval Audit Service is located in 
the National Capital Region?
    Answer. We are very aware of the Audit service presence in the 
National Capitol Region.
    Question. Is the Naval Audit Service off-target? If yes, on what 
basis do you make this judgment?
    Answer We believe the Naval Audit Service finding is ``off-
target''. The initial report did not adequately document savings and 
the assumptions upon which they were based. We cannot invest money 
unless we are confident that the savings will actually materialize. We 
received more information from the Naval Audit Service on March 10, 
1998, and we should complete our analysis by April 30, 1998.
    Question. If Congress provided additional funds in fiscal year 
1999, how much could prudently be spent to implement the Naval Audit 
Service recommendations?
    Answer. We will make our recommendation by May 1, 1998, after 
completing the analysis of the additional information provided by the 
Naval Audit Service.

        Infrared Detection of Advanced Anti-Ship Cruise Missiles

    Question. Our nation has developed stealthy attack missiles, like 
TSSAM and the Advanced Cruise Missile, which are nearly undetectable to 
radars. It is only a matter of time until other nations field advanced 
stealthy anti-ship missiles that could someday threaten a Navy ship. 
Once radar detection becomes limited, infrared (heat-sensing) detection 
becomes critical. Unfortunately, a number of Congressional Committees 
continue to point out each year that the Navy does not have a plan 
leading to development and fielding of infrared anti-ship missile 
equipment for surface ships. Admiral Lautenbacher, would you agree with 
this characterization of the problem?
    Answer. Electro-optical and infrared sensors are complementary 
systems for other combat system detection elements. Navy has valid 
requirements for radar systems, electronic surveillance and attack as 
well as infrared sensing system. Although future high-technology 
threats you speak of are feasible, none are validated Defense 
Intelligence Agency threats and are not expected to appear before 2013. 
The radar systems we are fielding and developing are more than adequate 
to defeat all known and valid threats. The multi-function radar, 
introduced for development in the fiscal year 1999 President's Budget, 
is designed to provide capability against the most stressing 
technologically feasible threat. Additionally, the SLY-2 Advanced 
Integrated Electronic Warfare System was recently authorized to proceed 
into the Engineering and Manufacturing Development phase. This system 
is designed to counter radio frequency homing missiles that are still 
expected to comprise the majority of anti-ship cruise missiles for as 
long as we can forecast. Because infrared sensing systems cannot 
provide all weather capability, these advanced radar and electronic 
surveillance systems must be in place in our ships to counter the most 
stressing anti-ship cruise missiles. Consequently, they are considered 
a priority for fielding before an infrared surveillance system.
    Question. Do fleet CINCs want infrared detectors on their ships?
    Answer. There is a valid requirement for both an infra-red 
surveillance and tracking system as well as a thermal imaging sensor 
system.
    Question. Is there a technical reason why the Navy could not 
develop and quickly field advanced IRST devices?
    Answer. No. It is purely an affordable issue. The only systems 
available are too expensive to develop and field at the expense of 
other more critical programs.
    Question. How much is contained in the fiscal year 1999 budget for 
surface ship IRST development?
    Answer. $983,000 is in the fiscal year 1999 Budget request to 
complete the at-sea demonstration and validation of an IRST system. The 
demonstration and validation is scheduled to be completed in early 
fiscal year 1999.
    Question. How much is contained in the future years defense plan 
accompanying the fiscal year 1999 budget?
    Answer. No funds are contained in the Future Years Defense Program.
    Question. Under existing Navy plans, when is the first year that a 
surface ship IRST device for ship self-defense purposes will be fielded 
to the fleet?
    Relate this to the previous question on CINC requirements.
    Answer. Currently, Navy has no plans to field an infrared search 
and track capability in the surface fleet. We intend to complete in 
early fiscal year 1999 the at sea demonstration which Congress 
authorized in fiscal year 1998. We acknowledge a valid requirement for 
an infrared search and track capability and intend to monitor advances 
in the technology to potentially take advantage of more affordable 
options.

  Evolved Sea Sparrow Missile (ESSM) and the Rolling Airframe Missile 
                                 (RAM)

    Question: Admiral Lautenbacher, the Navy has recently decided to 
forego integration of the ESSM close-in ship defense missile on LPD 17 
in favor of RAM Block 1 missile. Yet on the DDG-51 class destroyers, 
the Navy has opted to integrate ESSM and not RAM. The Navy has 
indicated that RAM Block 1 can defeat any postulated threat through the 
year 2012. Both ESSM and RAM are international cooperative programs. 
Admiral, why is RAM good enough for LPD-17 but not good enough for the 
DDG-51?
    Answer. Navy's individual ships class Maritime Force Protection 
planning is based on providing the most cost-effective force protection 
possible force wide, consistent with available funding. Furthermore, 
all ship classes will receive or retain a level of force protection 
consistent with their expected service life and potential exposure to 
operational threat environments.
    To ensure appropriate Maritime Force Protection capability across 
the battle force, the same rigor used to select the Anti-Air Warfare 
(AAW) self defense configuration for DDG-51 Flight IIA ships was 
applied to ships such as the LPD-17, with primary missions other than 
air defense. When operating independently, LPD 17 will be as capable as 
any other ship to deal with expected self-defense threat levels in the 
normal operating environment.
    To accomplish this in the LPD 17 design, Navy has invested heavily 
in the benefits of Radar Cross Section (RCS) reduction combined with 
softkill (NULKA) capability. This combination provides a fundamental 
shift in warfighting philosophy for this amphibious ship class. In 
addition, RAM hardkill provides the firepower and performance necessary 
to meet Navy CAPSTONE requirements and Congressional guidance against 
the validated threat. The Anti-Air Warfare combat system configuration 
for the LPD-17 class, selected after careful analysis, meets all 
threats through 2012 with growth potential provided to meet far term 
threats when defined.
    In 1992, Navy decided to launch all hard kill weapons in the DDG 51 
Flight IIA from the MK-41 Vertical Launching System. Consequently, 
vertically launched ESSM was the self defense weapon selected for this 
class of ships. At that time, RAM Block I performance was not know. The 
Aegis SPY-1D(V), in DDG-79 and above, is the only US radar today that 
can fully exploit ESSM missile midcourse guidance capability in the 
near land environment. The performance of the Aegis/ESSM combination 
provides superior ship self defense capability. Combined with the 
advanced RCS reduction and soft-kill systems planned for this ship, the 
ESSM/SPY-ID(V) combination allows DDG-79 and above to meet Navy AAW 
self defense CAPSTONE requirements. It would not be cost effective to 
reverse the 1992 decision, and reconfigure the DDG's for RAM vice ESSM. 
Navy's decision to install ESSM in DDG-79 and above is the most 
operationally effective and affordable option for forward fit in this 
class.
    Question. Why do we need to buy ESSM now when RAM Block 1 can 
defeat the threat until at least 2012?
    Answer. Navy requirements for Maritime Force Protection of surface 
ships are contained in the Ship Class AAW Self Defense CAPSTONE 
Requirements Document, which was approved by the Chief of Naval 
Operations in February, 1996. This document specified the ship self 
defense anti-air warfare contribution for each ship type and spells out 
the raid size, density, and required Probability of Raid Annihilation 
(PRA) for battle force and amphibious ready group ships. Furthermore, 
it identifies the operational environments that may be encountered in 
the post-Cold War era.
    Navy utilizes a combat systems approach to validate each ship 
class's performance against this CAPSTONE requirement. All systems in 
the detect through engage sequence are modeled against the validated 
Defense Intelligence Agency threats. No one system is good enough, by 
itself, to meet the CAPSTONE performance requirements. For engagement 
systems, both soft-kill and hard-kill systems are required to meet the 
required measures of effectiveness. The answer to the previous question 
laid out the requirements for ESSM in the DDG-51 class. For other very 
large ship classes, including CV/CVN ships, where soft-kill systems are 
ineffective, multiple hard-kill systems will be required to meet the 
expected threat level. In these ships RAM Block 1 alone is not capable 
of meeting the threat. The existing NATO Sea Sparrow Missile Systems 
require upgrade, to include the capability to fire ESSM, to adequately 
defend against the projected threat.
    Question. Compare the average unit cost of ESSM to RAM Block 1 and 
state all assumptions.
    Answer. RAM and ESSM Cost Comparison for DDG-51 Flight IIA ships:

------------------------------------------------------------------------
                Cost Category                  RAM Block 1      ESSM
------------------------------------------------------------------------
Launcher Installation.......................      \1\ $8.5      \3\ None
                                                   million
Missile Cost................................      \2\ $.35       \2\ $.5
                                                   million       million
    Cost Per Round..........................      \4\ $.74   $.5 million
                                                   million
------------------------------------------------------------------------
\1\ Two 11-shot RAM launchers.
\2\ Missile hardware costs only.
\3\ ESSM fired from MK-41 VLS.
\4\ Includes cost of launcher and missiles.

    Question. What would be the cost to integrate RAM Block 1 on DDGs?
    Answer. Integrating RAM Block 1 into the DDG-51 Flight IIA ships 
authorized for construction would require inclusion in two planned 
Aegis Baselines. The total integration (computer system integration 
only) cost for both baselines is estimated at $28 million. Because of 
the tight timelines associated with the major capability changes (TBMD 
& CEC) included in these two baselines, a computer program including 
RAM would not be available until 2002 at the earliest, to support 
delivery of these ships. Additional costs would also be incurred to 
procure the launchers and missiles, conduct chip configuration 
modification studies, and for system installation.
    Question. What is the cost to integrate ESSM on DDGs?
    Answer. There is no additional cost associated with integrating 
ESSM into the DDG 51 Flight IIA ships. The Aegis Baseline 6 and 7 
programs planned for these ships have always incorporated ESSM 
capability in their development.
    Question. Based on the current funded program, what other platforms 
will get ESSM and when is the IOC on these other platforms? Would RAM 
Block 1 be suitable for these other platforms? Why or why not?
    Answer. LHDs are expected to receive an inherent ESSM capability 
in/about 2003. CV and LHD platforms will eventually be equipped with 
ESSM. When CVN 76 delivers and CVN 68 completes her Reactor Complex 
Overhaul (planned for 2001), their combat systems will have the 
inherent ability to fire ESSM. RAM Block 1 hardkill alone does not 
provide adequate self-defense for these ship classes. Since their radar 
cross section is too large to take advantage of NULKA decoys, CVN and 
LHD class ships require two hardkill systems to meet Navy CAPSTONE 
Requirements. Therefore, Navy plans include incorporation of ESSM 
capability in CVN/LHD classes.
    Question. How long is the anticipated production run for ESSM?
    Answer. The last order year for ESSM production is planned in 
fiscal year 2008 with delivery in fiscal year 2010. The MOU terminates 
December 26, 2011, unless all signatories agree to extend it.
    Question. What would be the impact of the Navy buying ESSM at the 
tail end of the international cooperative program when the threat 
merits versus buying at the front end?
    Answer. This is the only self defense weapon designated for DDG 79 
and above. Delay of ESSM until the end of the production run would 
leave these ships with no near-term self defense capability. 
Additionally, the MOU requires production support at a fixed level even 
if we do not procure the quantities currently planned in the near term. 
However, if the US portion of the missile procurement is deferred to 
the outyears, outyears production support funding levels would increase 
dramatically.

                           Tactical Tomahawk

    Question. Mr. Douglass, the Navy is proposing to terminate the 
Tomahawk Baseline Improvement Program (TBIP) in favor of a new program 
called Tactical Tomahawk. Please explain the advantages of the Tactical 
Tomahawk program and why the Navy believes the program is worth the two 
year delay in Initial Operating Capability (IOC)?
    Answer. The Tactical Tomahawk program is the Navy's best option to 
fill long-term inventory objectives. It delivers a more capable missile 
at a greatly reduced cost (Tactical Tomahawk: $569,000 each; either 
Block III or IV: over $1.2 million each) while providing an open 
production line should we need even greater production in the future. 
Additional advantages that support a two year delay in IOC are:
     The Commanders-in-Chiefs agree that 2,800 Tomahawks will 
be sufficient inventory to cover the period of delay in IOC.
     Tactical Tomahawk would put an additional 700 missiles in 
the inventory, at the same total program cost as the current Tomahawk 
program.
     Fleet Commanders gain responsiveness and flexibility due 
to mission planning on each shooter, inflight retargeting, and an 
onboard camera system. (Not funded in the current program.)
     The Tactical Tomahawk 1990's technology addresses 
obsolescence and high operation and support costs. The current Tomahawk 
is 1970's technology.
     Tactical Tomahawk brings a new production line through the 
year 2008. Current plans call for new production line to close in the 
year 2000 for the Tomahawk Block III and the remanufacture line for the 
Tomahawk Baseline Improvement Program, Block IV to remain open after 
2000.
    Question. Because Tomahawk missiles have been relatively expensive 
and require intensive mission planning, they have been primarily used 
against high value ``strategic'' targets. The Navy has advertised that 
lower unit costs and simplified targeting will give the weapon a 
tactical capability. However, if we include the cost of the additional 
R&D required for the new missile, its acquisition unit cost is 
equivalent to or possibly more than TBIP. Mr. Douglass, if Tactical 
Tomahawk costs the same or more as TBIP, would the Navy really be 
willing to use it in a tactical role against lower value targets?
    Answer. Tactical Tomahawk's improved operational capabilities were 
specifically intended to provide the warfighting Commaner in Chief(s) 
(CINCs) with more options against tactical targets. The genesis of the 
Tactical Tomahawk initiative was to have a more responsive and flexible 
missile for the warfighters. If the inventory requirements increase or 
large quantities of missiles are expended, the follow-on Tactical 
Tomahawk production will cost less than 50% of the Tomahawk Baseline 
Improvement Program (TBIP) for the same quantity. Tactical Tomahawk 
research, development, and production is estimated to cost less than 
completing TBIP.
    Question. Cost estimates for production of Tactical Tomahawk are 
currently based on future congressional approval of a multiyear 
procurement contract. Mr. Douglass, how many missiles over how many 
years would be under the multiyear contract?
    Answer. The contract offer for $569,000 (unit cost) requires a 
commitment of purchasing 1353 Tactical Tomahawk missiles within a six 
year period.
    Question. If a future Congress opts to not approve the multiyear, 
what would be the projected increase in procurement cost given the same 
year quantity purchases (then year dollars and percent)?
    Answer. Without multi-year procurement authority the cost of 
Tactical Tomahawk will increase approximately 7.5-12.5% to $612,000-
$640,000 based on a purchase price of $569,000 per missile.
    Question. Last year, the Navy argued that one reason it did not 
wish to pursue the JASSM program is that SLAM-ER could take the service 
through the year 2010 when hypersonic missiles would be available. 
Compare the capabilities of a hypersonic missile and tactical Tomahawk.
    Answer. The Office of Naval Research is investigating the concept 
of a hypersonic missile, hence it is difficult to compare the 
capabilities of the two missiles. However, the following assumptions 
may be applicable:
    --A hypersonic missile will probably have less range (700nm versus 
approximately 1600nm) than Tactical Tomahawk. If air launched, this 
implies possible risk to the aircrews.
    --Requires the same type of mission planning as Tactical Tomahawk 
to achieve the same level of precision.
    --Response time (sensor to target) would be less with hypersonic 
missile.
    --Estimated cost of hypersonic missile development and production 
would probably be more than Tactical Tomahawk.
    --Technical, cost, schedule risk for hypersonic missile are very 
high versus low technical and moderate cost/schedule risks for Tactical 
Tomahawk.
    --Tactical Tomahawk also provides an open design to facilitate 
alternate payload growth while hypersonic delivery of anything other 
than a unitary warhead would be difficult.
    Question. Where do we stand on the development of hypersonic 
missile?
    Answer. Hypersonic missile is in the risk reduction study phase.
    Question. Given the current state of development, is it reasonable 
to assume a hypersonic missile can be deployed in the 2010 timeframe?
    Answer. We do not yet have sufficient data upon which to base a 
definitive estimate. However, the current studies are generating the 
necessary data.
    Question. The Navy is projecting operations and support savings 
with Tactical Tomahawk as compared to TBIP assuming a 30 year service 
life for the new missile. Is this a reasonable service life assumption 
given the potential availability of hypersonic weapons within 8 years 
of Tactical Tomahawk Initial Operational Capability (IOC)?
    Answer. Yes. The 30 year life cycle encompasses the second 
recertification period of Tactical Tomahawk. The bulk of costs would 
accrue between 15 and 20 years during the first recertification. The 
Warfighting Commanders-in-Chief want to increase the inventory as soon 
as possible, but are willing to accept a brief delay for the larger 
inventory and additional capabilities afforded by Tactical Tomahawk. 
Eight years may be an overly optimistic estimate for hypersonics, but 
eight years is an unacceptable delay for inventory growth.

                            Aerostat Program

    Question. The Army is requesting $103 million to continue the Joint 
Army/Navy Aerostat program, now called the Joint Land Attack Cruise 
Missile Defense Elevated Netted Sensor System (JLENS). Last year, this 
committee recommended that the Aerostat program be terminated, but did 
not prevail in conference. Instead the conferees appropriated 
$35,000,000, a decrease of $51,193,000 from the budget request. Please 
explain the JLENS concept. How will the Navy deploy JLENS and what will 
be its mission?
    Answer. JLENS is designed to detect, track and provide fire control 
quality data in a sensor-netted network against the overland cruise 
missile threat. JLENS could support final illumination requirements in 
an over-the-horizon engagement in support of overland cruise missile 
defense.
    Navy does not plan to procure or deploy JLENS at sea. Navy interest 
lies in ensuring integration of critical sensors in a Joint Composite 
Tracking Network (JCTN); CEC is phase I of the JCTN.
    Question. Why do you need a JLENS? What other systems (either 
fielded or in development) could be used to do the JLENS mission?
    Answer. Elevated sensors, netted together to form composite tracks 
are critical to detect low flying, low radar cross section cruise 
missiles. Airborne fire control is required to conduct over-the-horizon 
engagements at the full kinematic capability of Standard Missile (SM-
2). Upgrades to surveillance aircraft including E-2C Hawkeye and E-3 
AWACS and aircraft with airborne fire control could fulfill this 
mission.
    Question. Secretary Douglass, the DoD is requesting $103 million in 
fiscal year 1999 for JLENS demonstration. The demonstration will cost 
$400 million--the Army has told us the program is underfunded by $86 
million. Are you willing to offset the shortfall within the Navy 
budget?
    Answer. No. Navy cannot support reductions in other much needed 
programs to offset the JLENS demonstration.
    Question. In what fiscal year will the Navy begin procuring JLENS?
    Answer. Navy has no plans to procure JLENS.
    Question. Do you have funds budgeted in the outyears for JLENS? If 
so what years and how much?
    Answer. JLENS is a Joint Advanced Technology Demonstration Army-led 
program with Navy interest due to Standard Missile support and CEC. 
Navy does not provide funding for JLENS. JLENS provides funds for 
Standard Missile (SM-2 BLK 1) development and CEC integration.

                            CH-60 Helicopter

    Question. The Navy plans to retire its logistics and cargo 
helicopters and replace them with a Black Hawk derivative, the CH-60. 
In fiscal year 1998, Congress provided $31 million for the development 
of the CH-60. Congress also appropriated $31 million above the budget 
request to procure two CH-60 helicopters for the Navy Reserve. This 
year the Navy is requesting $152 million to complete testing and 
procure four CH-60 helicopters. Recently the Navy has stated that the 
CH-60 research and development program is underfunded by $21 million in 
fiscal year 1998. Based on your current budget, what is the status of 
the CH-60 program--will it be delayed?
    Answer. The CH-60 program could be delayed, based on current 
budget. However, we are considering alternative program structures, and 
so the CH-60 program is continuing to move to a Milestone II/Low Rate 
Initial Production decision in fiscal year 1998.
    Question. What activities are unfunded in fiscal year 1998?
    Answer. The Navy is still reviewing any potential unfunded 
requirements in the areas of manufacturing (such as modification of 
production drawings), tooling and logistics activities.
    Question. Currently the fiscal year 1998 procurement funds are on 
OSD withhold pending approval from the Defense Acquisition Board (DAB). 
When are you anticipating a DAB decision?
    Answer. We anticipate a DAB decision in the third quarter of fiscal 
year 1998.
    Question. What is the impact if the CH-60 procurement funds are not 
released?
    Answer. The government may be unable to meet its contracted 
obligation to provide Government Furnished Equipment 90 days prior to 
aircraft delivery.
    Question. It is our understanding that the Navy would like to 
reprogram $12 million of the fiscal year 1998 funds appropriated for 
one CH-60 aircraft to research and development. Why?
    Answer. The Navy has not decided whether a reprogramming is 
required. The Cost Analysis Improvement Group independent cost estimate 
indicated the preliminary RDT&E estimates were low. As the program has 
gained more definition, the estimates have become better defined. This 
later estimate shows a larger amount of RDT&E funding could be 
required.
    Question. What is the impact if the reprogramming is not approved?
    Answer. The Navy is still assessing whether a reprogramming is 
required to avoid deferring some tasks, potentially delaying the 
program.
    Question. If the research and development shortfall is not fixed, 
can you still enter production is fiscal year 1999?
    Answer. The Navy is still reviewing if shortfalls exist in fiscal 
year 1998 and the resultant impact on production in fiscal year 1999.
    Question. Last year, the Navy told this Committee that it was not 
premature to appropriate funds for production aircraft. Less than six 
months later you are requesting that we allow you to reprogram a 
portion of the procurement funds to research and development. Please 
explain what has changed. Will you still procure one CH-60 aircraft 
with the fiscal year 1998 funds?
    Answer. Since meeting the Committee, the Navy has conducted an in-
depth cost analysis in conjunction with OSD. The findings of that 
analysis indicated a potential $21.5 million R&D funding shortfall in 
fiscal years 1998 and 1999.
    Once the design is complete, the Navy intends to procure CH-60 
aircraft with the fiscal year 1998 funds.
    Question. Last year, the Navy CH-60 budget proposed procuring six 
helicopters in fiscal year 1999. However, your fiscal year 1999 budget 
submission reduces the level of funding, allowing you to procure only 4 
aircraft. Why did the production quantities change?
    Answer. Congress provided Aircraft Procurement, Navy, funding in 
fiscal year 1998 to procure two aircraft for the Naval Reserves. As 
design efforts were incomplete, we were unable to procure those 
aircraft in fiscal year 1998, but rather delayed them to fiscal year 
1999, which is the timeframe for the first scheduled production lot of 
CH-60s. Two aircraft from fiscal year 1999 were then reprogrammed to 
the fiscal year 2000 procurement to reduce risks to the program in the 
early stages of production. This was intended to allow the Navy to meet 
its obligations to the Army's multiyear contract with minimal or no 
delay to aircraft delivery to the fleet.

                           SH-60R Helicopter

    Question. To reduce cost and infrastructure associated with its 
anti-submarine and surface warfare platforms, the Navy will 
remanufacture SEAHAWK (SH-60B)/SH-60F/HH-60) helicopters to a multi-
mission helicopter, the SH-60R. For fiscal year 1999, the Navy is 
requesting $358 million for the SH-60R development program. The funding 
is to continue Engineering and Manufacturing Development (EMD) and 
procure three test aircraft. What is the status of the SH-60R program?
    Answer. The SH-60R program is currently in Engineering 
Manufacturing and Development post Milestone II. Most development 
hardware is in assembly. The first drop of software has been completed. 
The first prototype aircraft has undergone re-configuration at Sikorsky 
Aircraft, Stratford, CT, and has been delivered to Lockheed-Martin, 
Oswego, NY, for avionics equipment installation, grooming and 
contractor test in preparation for the planned DT/OT test period in 
fiscal year 1999 to support the first Low Rate Initial Production 
decision mid fiscal year 2000.
    Question. It is our understanding that the Navy will request that 
additional funds be reprogrammed in fiscal year 1998 for the SH-60R 
development program. Please explain which planned activities are not 
funded in fiscal year 1998.
    Answer. The Navy has not decided whether to reprogram any funds 
into SH-60R.
    Question. What is the impact if the fiscal year 1998 reprogramming 
is not approved?
    Answer. The Navy has not decided whether to reprogram any funds 
into SH-60R.
    Question. The Airborne Low Frequency Sonar (ALFS), which is part of 
the SH-60R upgrade program experienced reliability issues during 
initial testing. Please describe the reliability issues and the 
recommended fixes.
    Answer. Three reliability issues were discovered during initial 
ALFS system testing. These include: a compass failure in the 
transducer, a reeling machine drum failure, and a back-up optical 
sensor system failure for the reeling machine.
    Fixes are in work for all three of these reliability issues. The 
fixes include redesign of cabling in the transducer for the compass 
problem, a change to a composite drum for the reeling machine, and the 
optic sensor system is being re-engineered.
    Question. The Navy estimates that it will require an additional $15 
million to implement the recommended fixes to reliability problems 
discovered during testing. Is funding included in the budget to 
implement the fixes to ALFS? If not, how will you fund the required 
changes?
    Answer. The funding for resolution of these fixes is programmed 
within the SH-60R program. This unanticipated funding requirement will 
be at the expense of some acoustic system automation intended to 
optimize system performance in the littoral.
    Question. In fiscal year 1998, the Congress appropriated an 
additional $15 million for the SH-60R program for avionics. What is the 
status of the funds? When do you anticipate obligating the funds?
    Answer. Some of the funds were used to support initial system 
design in preparation for the Common Cockpit System Design Review. The 
remainder are scheduled for contract award during March 1998.

                    Helicopter Avionics Commonality

    Question. The Navy believes it will reduce logistics and 
infrastructure costs by developing identical avionics and cockpits for 
the SH-60R and the CH-60 helicopters which are currently in 
development. The CH-60, which is primarily a transport helicopter, will 
receive the same sophisticated avionics required by the multi-mission 
SH-60R helicopter. The SH-60R will perform anti-submarine and surface 
warfare.
    What is the status of the cockpit development program?
    Answer. The cockpit development program remains on schedule. System 
Design Review (SDR) was held January 14 and 15, 1998. Preliminary 
Design Review (PDR) is scheduled for the last week of April. Critical 
Design Review (CDR) is planned for early July.
    The cockpit is not expected to experience the usual delays, as the 
current contractor has a reputation for on time delivery of avionics 
components. The majority of the hardware and software have also been 
previously developed, further reducing the risk of delay.
    The cockpit and its immediate avionics are one of three major 
avionics systems in the Navy's future H-60 series helicopters. The 
common cockpit is integrated to the mission and survivability avionics 
systems peculiar to each H-60 series. This allows the cockpit to 
support the same basic flight duties in every H-60, and the other 
systems to support the individual mission aspects of each helicopter 
series.
    Question. What is the estimated cost of the program?
    Answer. The estimated cost of the avionics program is $59 million.
    Question. Fiscal year 1999 is the first year of CH-60 production. 
Based on the fiscal year 1999 budget, will the common cockpit be ready 
for integration on the CH-60?
    Answer. Yes. Development and test plans are on schedule.
    Question. Do you have adequate funding?
    Answer. Yes. The funds are adequate to support the current 
commercial technology insertion plan.
    Question. What is the impact on the CH-60 program if the common 
cockpit schedule slips?
    Answer. If common cockpit slips, the CH-60 first production lot 
aircraft (five aircraft) will be produced with a commercially available 
cockpit that was flown in the CH-60 demonstration aircraft in fiscal 
year 1997. This commercial cockpit contains some of the hardware 
required in the Common Cockpit. The remaining production lots will be 
outfitted with the Common Cockpit.
    Question. If the cockpit development program slips, the Navy will 
integrate an interim cockpit on the CH-60. Later, those CH-60's will be 
retrofit with the common cockpit. What is the anticipated unit cost of 
the retrofit program?
    Answer. Although an in-depth analysis has not been conducted, the 
anticipated unit cost is approximately $1.0 million.

                      Light Weight 155mm Howitzer

    Question. The fiscal year 1999 budget requests $35.4 million for 
the development of the Marine Corps Light Weight 155mm Howitzer 
program. Last year, the Marine Corps included the Light Weight Howitzer 
on their shortfall list and the Congress provided an additional $3 
million for the program.
    Secretary Douglass, it is our understanding that during the fiscal 
year 1999 budget build, the Light Weight 155mm Howitzer program was 
decremented because funds were added in fiscal year 1998 by the 
Congress. Why would you reduce funds for a program you asked us to 
accelerate? Please explain.
    Answer. The fiscal year 1998 Budget Enhancement was requested for 
P3I integration. Congress increased the program by $3.6 million. The 
fiscal year 1999 reduction for the same amount, $3.6 million, was taken 
by the Department, which inaccurately assumed the fiscal year 1998 
budget enhancement accelerated the program.
    Question. How will the fiscal year 1998 funds be spent? Does the 
budget request continue those activities planned in fiscal year 1998 
for fiscal year 1999? If not, which activities are not fully funded?
    Answer. The fiscal year 1998 funds will be spent on basic 
engineering and manufacturing development (EMD) and pre-planned product 
improvement (P3I item integration to manufacture the test fixtures and 
design the gun to accept P3I items.
    The fiscal year 1999 budget request funds the continuation of basic 
EMD. There is no ``tail'' associated with the fiscal year 1998 
Congressional plus-up. However, testing efforts and capability may be 
less than optimal due to the Marine Corps pursuit of P3I integration, 
necessary, during fiscal year 1998 to maintain the design schedule, and 
the Departments decision to decrement fiscal year 1999 by $3.6M 
(consistent with the fiscal year 1998 add).
    The original development schedule remains unchanged and the LW 
155mm Howitzer program completes EMD in fiscal year 2000. The fiscal 
year 1999 request for PMC supports both long lead material and 
production line facilitization and setup. The actual cannon production 
begins in fiscal year 2000.
    Question. Based on the fiscal year 1999 request, what is the 
current schedule for the Light Weight 155mm program?
    Answer. The original development schedule remains unchanged and 
completes engineering and manufacturing development (EMD) in fiscal 
year 2000. The fiscal year 1999 request for PMC supports long lead 
material and production line facilitization setup. Cannon production 
begins in fiscal year 2000.

              Logistics Vehicle System Replacement Program

    Question. The Marine Corps is requesting $900,000 to begin the 
Logistics Vehicle System Replacement Program (LVSR) for its existing 
heavy cargo transport fleet. The Marine Corps plans on spending $15 
million to develop the LVSR. Fiscal Year 1999 funding will be used for 
``demonstration and validation.'' During this time the Marine Corps 
will determine the most cost effective way to modernize the current 
fleet.
    Please explain the LVSR acquisition strategy and funding 
requirements.
    Answer. Shortly after the fiscal year 1999 President's Budget was 
submitted, the LVSR schedule was updated to reflect a Low Rate Initial 
Production (LRIP) phase. The new schedule is attached. A two year LRIP 
contract will be awarded in fiscal year 2003 and the Milestone III (MS-
III) is then scheduled in fiscal year 2005. The Operational Test I (OT-
I) was incorporated concurrently with Developmental Test II (DT-II). 
The list of events comprise the current LVSR schedule as follows:
    The LVSR program is now in the Concept Exploration phase of 
research and development and employs streamlined acquisition. An 
Analysis of Alternatives, an Early Operational Assessment, and a 
Development Test I are scheduled during fiscal year 1999 for $910 
thousand. A Combined MSI/II decision is planned in fiscal year 2000 for 
$1.031 million. Engineering and Manufacturing Development prototype 
contract award is scheduled in fiscal year 2001 for $5.517 million. 
Development Test II and an update of the Operational Testing I are 
scheduled in fiscal year 2002 for $6.507 million. A two year Low Rate 
Initial Production contract will be awarded in fiscal year 2003 with an 
RDT&E cost of $979 thousand and Procurement Marine Corps (PMC) cost of 
$31.807 million. Milestone III, approval for full production, is 
planned in fiscal year 2005.

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    Question. Please explain the three LVSR replacement options that 
you are evaluating: new vehicle, rebuy, or remanufacture.
    Answer. An Analysis of Alternatives will begin in fiscal year 1999 
to determine greatest Cost and Operational Effectiveness for replacing 
the existing Logistics Vehicle System (LVS). Alternatives include 
replacing the current LVS with a completely new vehicle, 
remanufacturing the existing LVS to enhance its capability, rebuilding 
the existing LVS to original standards, or a Service Life Extension 
Program for the LVS.
    Question. What criteria are you using to determine the winner of 
the demonstration and validation phase--operational requirements, 
price, and/or contractors past performance? Is the source selection for 
this program based on hardware testing or a paper concept? Please 
explain.
    Answer. All of the criteria above will be used to downselect to the 
winner of the LVSR program demonstration and validation phase. The 
current strategy is to combine Milestone I and Milestone II decisions 
if possible. Development source selection will probably be based upon a 
paper concept. Production source selection will be based upon hardware 
testing.
    Question. What is the procurement profile for the LVSR program? 
What is the acquisition objective and funding profile?
    Answer. LVSR acquisitions are currently planned as follows: fiscal 
year 2003, 152 vehicles; fiscal year 2004, 450 vehicles; fiscal year 
2005, 1,130 vehicles; to Completion 2,218 vehicles. The total 
acquisition objective is 3,950 vehicles. The total funding estimate for 
RDT&E,N is $15 million and the total funding estimate for PMC is $838 
million.
    Question. The Army is requesting procurement funds in Fiscal Year 
1999 for heavy tactical vehicles.
    How do your requirements differ from the Army's heavy tactical 
vehicle requirements?
    Answer. The Marine Corps uses one vehicle system while the Army 
uses three different vehicle fleets. Differences between the Army and 
Marine Corps in Logistics Vehicle System requirements include air 
transportability by fixed wing aircraft of the assembled logistics 
vehicle system, ship transportability with a turning radius under 34 
feet, air transportability by CH-53E helicopter when the logistics 
vehicle system is separated into front and rear units, a mission 
profile of 70% on-road and 30% off-road, and detachable/interchangeable 
front and rear body units. The Army's heavy tactical vehicle (HEMMT) is 
a single unit without interchangeable/detachable front and rear body 
units.
    Question. Could the Army's heavy tactical vehicle fleet satisfy 
Marine Corps requirements? Why or why not?
    Answer. The Army's heavy tactical fleet cannot satisfy the Marine 
Corps requirements. The Marine Corps Logistics Vehicle System must be 
air transportable by fixed wing aircraft of the assembled logistics 
vehicle system, ship transportable with turning radius under 38 feet, 
air transportable by CH-53E helicopter when the logistics vehicle 
system is separated into front and rear units, capable of mission 
profiles of 70% on-road and 30% off-road, and capable of detachable/
interchangeable front and rear body units. The Army's vehicle is only 
transportable by a C-5 or C-17, not transportable by helo. The Army's 
vehicle cannot meet the required turning radius. The Army's heavy 
tactical vehicle HEMMT is a single unit and with a flat bed or wrecker. 
This trailer configuration is not interchangeable.

                   Light Tactical Vehicle Replacement

    Question. The Marine Corps is requesting $39 million to procure 714 
High Mobility Multipurpose Wheeled Vehicles (HMMWV) to replace HMMWV's 
that were fielded in the 1980's. Based on the budget, the Marine Corps 
will replace \1/14\th of the fleet each year.
    What is the condition of the Marine Corps light tactical vehicle 
fleet?
    Answer. The Marine Corps has critical reliability, availability, 
maintainability and durability concerns for the HMMWV fleet. In 
addition, corrosion problems arising from both fleet age and its 
operations in a maritime (salt spray) environment now require beginning 
the replacement of the Marine Corps' aging HMMWV fleet. A recent HMMWV 
fleet corrosion study conducted by the Naval Surface Warfare Center has 
found that the vehicles surveyed had severely corroded frame rails that 
no longer complied with the minimum metal width (thickness) structure 
specifications from the manufacturer.
    Question. Please explain the Light Tactical Vehicle Replacement 
(LTVR) acquisition strategy. What is the cost of the program? What is 
your acquisition objective?
    Answer. The LTVR acquisition strategy is to procure new model A2 
HMMWVs from the US Army to replace the existing HMMWVs. This strategy 
is pending the March 1998 approval of the Assistant Secretary of the 
Navy for Research Development and Acquisition. The strategy is to 
procure 7% of acquisition objective each year over a 14 year time 
frame. This time frequency is consistent with the HMMWV useful life 
span. Total PMC cost between fiscal year 1998 and fiscal year 2013 is 
$1.3 billion in Future Year Defense Plan dollars. The acquisition 
objective for the HMMWV is 19,280 vehicles.
    Question. At the request of the Marine Corps, Congress added $30 
million in fiscal year 1998 to being the HMMWV Service Life Extension 
Program (SLEP). This year you are requesting $39 million to procure new 
HMMWV's.
    Have you decided against a HMMWV SLEP program? Why?
    What will you use the fiscal year 1998 funds for?
    What is the status of the fiscal year 1998 funds? When will they be 
obligated?
    Answer. Based upon documented HMMWV corrosion conditions, we 
believe it may be more cost effective and efficient to buy new vehicles 
than to remanufacture old ones. Recent LTVR analyses of alternatives 
studies indicate that the current production HMMWV A2 vehicle, now 
being procured by the Army, may be the preferred alternative to meet 
the LTVR requirement. Pending a 31 March 1998 approval of this 
alternative by the Assistant Secretary of the Navy for Research 
Development and Acquisition ((ASN(RDA)), the Marine Corps LTVR and 
HMMWV programs will be combined.
    The fiscal year 1998 funds will be used to procure 530 new A2 
HMMWVs. These funds are currently on OSD withhold. OSD will release 
funds in conjunction with the ASN(RDA) decision. Funds obligation is 
planned for the 3rd quarter of fiscal year 1998, with production 
beginning in July 1998 and deliveries starting in August 1998.
    Question. According to the contractor, the government must annually 
procure 2,300 HMMWV's to maintain a production line. The Marine Corps 
fiscal year budget only procures 714 vehicles. The Army's fiscal year 
1999 budget request for HMMWV's includes funding for only 10 new 
vehicles.
    At this low rate, will the contractor produce sufficient HMMWV's in 
fiscal year 1999 to keep the production line open? Please explain.
    How does this low level of production impact overhead rates?
    Answer. Both the Army and Marine Corps fiscal year 1999 HMMWV 
procurements will be exercised through Firm Fixed Price options to an 
existing Army contract. The total quantity of vehicles for the fiscal 
year 1999 option on the contract are funded in the Marine Corps budget 
and in the Army's expressed intent to reprogram fiscal year 1999 funds 
from their HMMWV rebuild line to their new HMMWV production line. These 
fiscal year 1999 funds support a total of 714 Marine Corps vehicles and 
677 Army vehicles. Therefore, the total funded fiscal year 1999 
vehicles will be 1,391 or 909 less than the minimum economic production 
rate of 2,300 vehicles. Given the potential for both Foreign Military 
Sales and continuing commercial sales, as well as existing backlog, AM 
General has communicated no indication of a necessity to close the 
production line in fiscal year 1999.
    Question. Your budget proposes to procure approximately 1,100 
HMMWV's annually until the Marine Corps requirement is satisfied.
    Is your outyear budget price based on an annual production rate 
price of 2,300 vehicles?
    What impact does a reduced production rate have on the price of 
HMMWV's?
    It is our understanding that fiscal year 1999 is the last year of a 
fixed price contract for HMMWV's. What is the unit cost for HMMWV's in 
fiscal year 1999? Does this assume a production rate of 2,300 HMMWV's?
    Based on the DoD budget, what will be the unit cost in the outyears 
(assuming that the Marine Corps quantities are the entire buy)?
    If the Army does not include HMMWV funding in future budget 
submissions, can you still afford to procure HMMWV's? Please explain.
    Answer. The outyear budget price for HMMWV production is based on 
an annual production rate price of 2,300 vehicles.
    The HMMWV currently has priced options through October 2000. The 
price will most probably increase if the minimum sustaining rate is not 
maintained.
    The fiscal year 1999 unit cost of HMMWV is $55 thousand each 
assuming a production rate of 2,300 HMMWV's.
    The unit cost of the HMMWV in the outyears for Marine Corps 
procurements has not been negotiated and identified.
    If the Army's final decision does not include HMMWV funding in 
future year budget submissions, the Marine Corps must then revisit the 
LTVR strategy. Our current understanding is that the Army intends to 
buy new vehicles through fiscal year 2002, and that the follow-on years 
may be a combination of remanufactured and new vehicles.
    Question. AM General, the HMMWV producer, is competing for the 
Medium Tactical Vehicle Replacement Program. What would the loss on 
that competition have on its overhead rates and the cost of the HMMWV?
    Answer. There are a variety of ways a contractor can determine how 
to spread overhead rates among the various projects on which they may 
be working. Since no contract has yet been awarded for the production 
of the MTVR, the determination of the spread of overhead cost 
projections are proprietary and competition sensitive. At this point, 
neither the Project Officer nor the contractor can provide additional 
detailed information. It is reasonable to assume, however, that should 
AM General be awarded the contract for MTVR, the overhead rates and the 
cost of the HMMWV might be reduced.

                  Medium Tactical Vehicle Replacement

    Question. The Marine Corps is requesting $131 million for the 
Medium Tactical Vehicle Replacement (MTVR) Program. The MTVR program 
will replace aging medium tactical trucks (5 ton) with remanufactured 
trucks. Of the budget request, $83 million is to begin production of 
the MTVR.
    What is the condition of the Marine Corps medium tactical vehicle 
fleet?
    Answer. Our total FY99 request for MTVR is $85.7 million ($2.0 
million for R&D, and $83.7 million for PMC). Our current 5-ton truck 
(Medium Tactical Vehicle) fleet has been in service for 17 years of a 
20 year life cycle. It is becoming more expensive to operate and 
maintain, it is corroding rapidly, and the projected rebuild costs 
exceed 93% of a new 5-ton tactical vehicle. The current 5 ton truck 
fleet meets neither our payload and mobility requirements, nor federal 
safety and emission standards.
    Question. Please explain the MTVR acquisition strategy. What is the 
cost of the production program? What is your acquisition objective?
    How long will it take you to remanufacture all of the trucks 
currently in the Marine Corps fleet?
    Answer. Our total fiscal year 1999 request for MTVR is $85.7 
million ($2.0 million for R&D and $83.7 million for PMC).
    We are currently in the EMD phase of development of this program. 
Our acquisition strategy involves evaluating prototypes from the two 
contractors with a down select to one contractor currently scheduled 
for November 1998. After down select, we plan to award a 5-year 
multiyear contract if approved by Congress, with a total cost of the 
production program at $1.2 billion. The acquisition objective is 7,360 
vehicles for the Marine Corps. The current medium tactical fleet of 5 
ton trucks will be remanufactured to the new MTVR in 5 years. We 
currently have a total of $85.7 million ($2.0 million in R&D and $83.7 
million in PMC) anticipated to be spent on MTVR in fiscal year 1999.
    Question. What is the projected unit cost for the MTVR?
    Answer. The current projected unit cost for the MTVR cargo and 
variant chassis is between $135,700 and $142,250 each. This program is 
currently in the Engineering and Manufacturing Development phase and a 
downselect to one contractor will occur in November, 1998. At the time 
of the downselect, the unit price, which will be level over a 5-year, 
multi-year contract, will be finalized.
    Question. To date, what testing has been done to support the Marine 
Corps MTVR requirements? Who conducted the testing?
    For the record, please provide the technical and performance 
requirements for the MTVR program (objective and threshold) and what 
has been demonstrated to date.
    Answer. Our total fiscal year 1999 request for MTVR is $85.7 
million ($2.0 million for R&D, and $83.7 million for PMC). Two advanced 
technology transition demonstrators were constructed and successfully 
tested by the Nevada Automotive Test Center as proof of concept. 
Currently, both Aberdeen Test Center and Yuma Proving Grounds are 
conducting extensive developmental testing on competing prototypes. 
Concurrently, Marines are conducting an operational assessment on the 
prototypes to assist in determining suitability from the user's 
perspective.
    Following are performance and technical requirements for the MTVR:
Operational Mission Profile %
High Mobility                                                   Tactical
    Paved Road RMS 0.1-0.3....................................     10/10
    Gravel Road RMS 0.3-1.0...................................     20/20
    Trails RMS 1.0-3.4........................................     30/30
    Cross Country RMS 1.5-4.8.................................     40/40
Payload (Tons) Mean Square (Inches)...........................
    Off Road..................................................     8/> 7
    Highway...................................................   15/> 12
    Towed.....................................................   8.5/8.5
Speeds (MPH)
    Highway @ Off Road GVW on 0% Grade........................     55/55
    Highway @ Off Road GVW on 2% Grade........................     55/55
    Highway @ Off Road GVW on 3% Grade........................     45/45
    Off Road GVW on RMS 0.7 Surface...........................     30/15
    Off Road GVW on RMS 2.0 Surface...........................     20/15
    Off Road GVW on RMS 3.0 Surface...........................     15/15
Grade Operation (% of Slope)
    Longitudinal..............................................     60/60
    Side Slope................................................     40/40
Fording Capability (Inches)
    Without Kit...............................................     60/30
Operating Range (Miles).......................................   450/300
Operational Temperature Ranges (Degrees F) Hot................   125/125
    Cold without kits.........................................   -25/-25
    Cold with kits............................................   -50/-50

To date, everything above has been demonstrated, except for cold 
temperature, fording capability, and range, which will be completed 
soon.
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    Question. The Marine Corps is requesting the authority to proceed 
with a multiyear contract for the MTVR in fiscal year 1999. However, 
according to your budget documents, you will not award a production 
contract until November 1998 and testing will not be complete until 
July 2000.
    Why do you need multi-year procurement legislation in fiscal year 
1999?
    It is our understanding that the first 240 production vehicles will 
be used for testing. Is it common to use a multi-year contract in the 
first year of production? For the record, please provide any instance 
where the Marine Corps had awarded a multi-year contract in the first 
year of production.
    Anticipated savings and a stable design are all criteria for a 
multiyear contract. Since you have not chosen a contractor at this 
time, is it fair to say, given the criteria for multi-year contracting, 
it is premature to award a multi-year contract? Why?
    Answer. Our total fiscal year 1999 request for MTVR is $85.7 
million ($2.0 million for R&D, and $83.7 million for PMC). Multi-Year 
Procurement (MYP) legislation is required in order to award the initial 
MTVR production contract in November 1998. The Marine Corps does not 
believe it is premature to award a MYP contract. The Marine Corps feels 
MTVR as budgeted meets all the stability requirements of a MYP (i.e. 
funding, configuration, by capturing the full benefits of competition 
between the two EMD contractors and incorporating the same commercial 
components in use by industry today, the Marine Corps risk in awarding 
MTVR as an MYP is even further reduced.
    This type of approach is quite common in military truck contracts 
to provide adequate facilitization time, permit production of system 
technical manuals, accommodate testing requirements, and avoid a break 
in production while allowing for an orderly ramp-up leading to full-
rate production. Although the Marine Corps infrequently uses MYP 
contracts, the U.S. Army's TACOM, through which the Marine Corps 
procures tactical wheeled vehicles, routinely employs MYP contracts. 
Recent examples include the 2.5 Ton Extended Service Program, the 
Family of Medium Tactical Vehicles, the Pallet Load System, the Heavy 
Expanded Medium Tactical Truck programs, and the High Mobility 
Multipurpose Wheeled Vehicle A2 program. Both of our prototype 
contractors are currently manufacturing military vehicles under MYP 
contracts. The strategy complies with acquisition reform and continued 
pressure to ensure best value for the government.

                   Predator Anti-Tank Missile System

    Question. The Marine Corps is requesting $9.8 million for Predator, 
a man-portable, disposable top-attack, anti-tank missile system. What 
is the status of the Predator development program?
    Answer. The Predator program is in the engineering and 
manufacturing development (EMD) phase of RDT&E. The program has had 
some technical difficulties with sensors which resulted in accuracy 
problems. The program also underwent a change in contractor (Loral Inc. 
to Lockheed Martin) in March 1997, which resulted in developmental 
delays associated with the industry transition. These problems required 
a schedule extension to allow sufficient time to correct them and 
complete all required testing while complying with fiscal constraints. 
These difficulties appear to be resolved and recent shots have been 
good. The Milestone III approval for production is scheduled for 4th 
quarter fiscal year 2000 and production assembly to begin in the 1st 
quarter fiscal year 2001.
    Question. Please explain the accuracy issue that was experienced 
during testing. What is the solution to the accuracy problems? When 
will the system be retested to ensure that accuracy is not longer an 
issue?
    Answer. Lockheed Martin, in conducting its Fault Tree and 
Sensitivity Analyses, determined that the key contributors (in order of 
magnitude) to the accuracy errors were: (1) Telemetry effect on Quartz 
Rate Sensors; (2) Vertical bias; (3) Parallax error; (4) Spin radius 
for AZX Calculation; and (5) Borescope Calibration.
    The original Quartz Rate Sensor (QRS) was determined to be overly 
sensitive to the dynamic shock environment experienced by the missile 
during firing. To compensate for this environment, an improved QRS was 
incorporated with greater internal vibration isolation that was less 
sensitive. Further shock isolation was incorporated into the auto pilot 
assembly to provide greater protection.
    The vertical bias was corrected through a software correction, and 
the remaining alignment and calibration errors were corrected through 
improved quality assurance.
    Lockheed conducted missile shots in January and February 1998 to 
verify individual corrective actions. Subsequently missiles, with all 
corrective actions integrated, verified that the accuracy issues were 
corrected. A small number of missiles (4) will now undergo a series of 
highly stringent environmental tests/exposures to simulate worst case 
extremes in climatic and vibrational conditions. Upon completion of 
these exposures, each missile will be fired to assess operational 
impact. These tests are currently planned for completion in May 1998. 
Upon successful completion of this testing, the accuracy problems will 
have been fully corrected.
    Question. What is the anticipated cost of correcting the accuracy 
issue?
    Answer. Costs for the program have grown $96.5 million (which 
included original estimated growth due to a contractor and location 
transition) to the new estimate at completion of $121.3 million. This 
can be attributed to the underestimated cost of the contractor 
transition, the cost of associated developmental and manufacturing 
learning curves, and the cost to resolve technical and accuracy issues.
    Question. Who is responsible for the costs associated with the 
``accuracy fix''--the government or the contractor?
    Answer. Resolution of technical problems is a normal part of 
engineering and manufacturing development and the associated correction 
costs are the responsibility of the government; however, the contractor 
has agreed to a fiscal year 1998 correction cost sharing of $2.0 
million.
    Question. The government's Estimation At Completion for Predator 
was approximately $96,000,000. It is our understanding that the EAC is 
now over $102,000,000. What has caused the increase? Who will pay for 
the increase in cost?
    Answer. The new estimate at completion (EAC) cost is $121.3 
million, attributable to contractor transition and technical problems. 
The government is responsible for all costs to the new EAC of $121.3 
million. The contractor has agreed to absorb any costs over $121.3 
million. It should be noted that Lockheed Martin has invested $5.0 
million in fiscal year 1997 to cover transition cost growth and has 
agreed to a fiscal year 1998 cost sharing of $2.0, thereby reducing the 
government investment to $114.3 million.
    Question. Does the fiscal year 1999 budget support operational 
testing in fiscal year 1999 and a production decision in fiscal year 
2000, or originally planned? If not, what do you need to do to get back 
on schedule?
    Answer. Since submission of the fiscal year 1999 President's 
Budget, the Predator development program has slipped 12 months. 
Consistent with briefs provided to the Congressional Defense Committee 
staffs, the Predator program has rescheduled operational Testing to 
fiscal year 2000, Milestone III to 4th quarter of fiscal year 2000, and 
production to the first quarter of fiscal year 2001. This program 
extension will require an additional $4.0 million of RDT&E, Navy in 
fiscal year 1999. Subsequent years' funding requirements are being 
addressed in the development of the fiscal year 2000 budget.

                      Amphibious Assault Vehicles

    Question. The Marine Corps is requesting $84.5 million to rebuild 
the Amphibious Assault Vehicles (AAV) which were fielded in the 1970's. 
The AAV will be replaced by the Advanced Amphibious Assault Vehicle 
(AAAV) which will enter production in fiscal year 2005. What is the 
condition of the AAV fleet?
    Answer. The AAV fleet has been depot maintained through an 
``Inspect and Repair Only As Necessary'' (IROAN) Program. The fleet is 
in the third cycle of this program and maintenance costs in both the 
depots and fleet are becoming increasingly more expensive. The 
originally planned cycle for IROAN was to induct vehicles every six 
years. With the degrading condition of the vehicles, this criteria was 
shortened in the early 1990s to every four years. Recently, many 
vehicles have been nominated by the fleet operators with as little as 
three years since their last depot servicing. Costs to IROAN vehicles 
have also increased with the age of the vehicles. For instance, the 
personnel variant AAVP7A1, which represents the majority of the fleet's 
population, has increased in depot cost from $122,407 per vehicle in 
fiscal year 91 to $237,975 per vehicle in fiscal year 97. The problems 
with these aging assets are also reflected in the operating fleet with 
suspension, engine and corrosion concerns occupying most of the fleet's 
maintenance resources.
    Without significant application of rebuild, reliability and 
maintenance improvements, the AAV assets would become increasingly more 
unaffordable and unavailable during the first decade of the new 
century. The AAV Reliability Availability and Maintainability/Rebuild 
to Standard (RAM/RS) program returns the AAV to the original six year 
IROAN cycle, reduces the workload of the fleet maintainers, and 
provides the operators with more reliable and combat ready assets until 
replacement by the AAAV.
    Question. What is the difference between a ``rebuild'' and a 
``service life extension'' program?
    Answer. ``Rebuild to Standard'' returns the AAV to original 
performance and specifications and reduces expected rising costs. 
``SLEP'' extends the life of a vehicle, incorporates product 
improvements and capability enhancements. This is a ``Rebuild to 
Standard'' program.
    Question. What is the cost and schedule for the AAV rebuild 
program?
    Answer. The AAV RAM/Rebuild to Standard (AAV RAM/RS) cost is $308.6 
million over a four (4) year production beginning in fiscal year 99. 
Milestone III decision is scheduled for 1st Qtr of fiscal year 99.
    Question. It is our understanding that you actually began the AAV 
rebuild program in fiscal year 1997. However, the Congress never 
appropriated funds for this project in fiscal year 1997 or 1998.
    To date, how much has been obligated for the AAV rebuild program in 
fiscal years 1997 and 1998?
    When did you plan on formally notifying us that you were planning a 
$300 million rebuild program?
    How did you fund the program in fiscal years 1997 and 1998--a below 
threshold reprogramming? Please explain.
    Does the Marine Corps usually fund new starts with below threshold 
reprogrammings?
    Answer. Funding within the AAV/7A1 Mods (R&D) program and the AAV/
71A1 PIP (PMC) program support the continuation of funded and approved 
efforts associated with the modification and improvement of the AAV/7A1 
vehicle. As a result of decisions made during the Marine Corps fiscal 
year 1999 program review process, specific ongoing AAV/7A1 improvements 
were packaged into a discrete PIP effort now referred to as the AAV 
Reliability Availability.
    Maintainability/Rebuild to Standard (RAM/RS). Due to the large 
dollar value of the RAM/RS PIP effort, the Marine Corps made certain 
all four Congressional committees were briefed concerning the Marine 
Corps' intentions relative to the AAV RAM/RS effort and in concert with 
Department policy formal written notification has been provided.
    A below threshold reprogramming was accomplished in fiscal year 
1997 and fiscal year 1998 R&D for the continued research and 
development of efforts now associated with RAM/RS. In fiscal year 1998 
Procurement, Marine Corps funds associated with the continuation of 
existing AAV PIP efforts were realigned from within the AAV PIP Program 
for execution of efforts now associated with RAM/RS.
    Of the $2.1 million budgeted in fiscal year 1997 for R&D efforts, 
$1.2 million has been obligated for efforts now specifically associated 
with AAV RAM/RS. In fiscal year 1998, $.2 million of RDT&E, Navy funds 
have similarly been obligated for RAM/RS. Additionally, $1.2 million of 
fiscal year 1998 PMC funds have been provided to MCLB Albany for 
execution on RAM/RS related efforts.

          Chemical Biological Incident Response Force (CBIRF)

    Question. In fiscal year 1997, Congress provided $10 million to 
establish the Chemical Biological Incident Response Force (CBIRF). The 
CBIRF's mission is to respond to terrorist chemical and biological and 
toxic industrial chemical incidents. Last year, the Congress provided 
$10 million to continue procuring equipment for the CBIRF. This year, 
the Marine Corps is requesting no funds to procure CBIRF equipment and 
$1.2 million to continue the development of protective equipment and 
detectors.
    How did you spend the fiscal year 1998 procurement funds?
    Answer. Fiscal year 1998 funds are being used to procure Command 
and Control (C2) Vehicles, 8 kilowatt Generators, Search and Rescue 
Mobile Video and Lights, Decontamination Showers, Powered Air Purifying 
Respirators (PAPR), Biological Hazard Suits, Improved Remote Sensing 
Chemical Agent Alarm (RSCAAL), Chemical Biological Casualty Evacuation 
Hoods, 15 kilowatt Trailer Generators, 24, Beverage Trucks, 
and Military Band Very High Frequency (VHF) Manpack Radios. This is a 
partial list, the entire list can be provided under separate cover.
    Question. Did the fiscal year 1998 funds buy out your requirement?
    Answer. The fiscal year 1998 funds completed the procurement of the 
mission critical equipment. However, expansion of the CBIRF mission to 
include a radiological response and the outfitting of seven Marine 
Expeditionary Units will require additional funding.
    Question. For fiscal year 1999, you are requesting $1.2 million for 
CBIRF research and development activities. Please explain what 
initiatives are funded in fiscal year 1999.
    Answer. The fiscal year 1999 President's Budget request is 
primarily for the development of protective equipment and to fund 
detector initiatives. Current protective equipment initiatives include 
M40 Protective Mask Powered Air Purifying Respirator, Self Contained 
Breathing Apparatus and General Purpose Filters. Detector initiatives 
include the Portable Mass Spectrometer, Small Point Detectors, 
Biological Detectors, Field Rugged Mass Spectrometer and Digital 
Dosimeters to include the Small Unit Biological Detector.
    Question. According to your budget documents, the CBIRF will be 
equipped with off-the shelf equipment, yet your budget includes no 
procurement dollars until fiscal year 2000. What research and 
development initiatives are in your Future Year Defense Plan? Does your 
budget include adequate funds to field those systems you will be 
developing? If not, what is the shortfall?
    Answer. The Marine Corps is not continuing to review technology for 
chemical/biological and individual Marine protection improvements. Some 
of the initiatives which are currently under development include the 
electrostatic decontamination system, general purpose filters, phase 
change cooling garment and the self contained breathing apparatus with 
cooling system. The development of these systems could be accelerated 
into fiscal year 1999 with an additional $1.2 million. The procurement 
of systems now under development will be included in the fiscal year 
2000 budget request.
    Question. Given their mission, it is essential to provide the CBIRF 
with equipment that provides protection from chemical and biological 
weapons and toxic industrial chemicals. To date, what equipment have 
you provided to the CBIRF? What equipment is still required? Is funding 
for that equipment provided in the budget? If so, please provide the 
type of equipment, acquisition, schedule, and cost.
    Answer. Mission critical and a majority of the mission essential 
items have already been procured for the CBIRF. The remainder of CBIRF 
mission essential equipment will be procured with fiscal year 1998 
Procurement, Marine Corps funds. This completes procurement of 
approximately 264 items which comprise CBIRF initial equipment needs. 
In addition, the CBIRF would like to procure Military Medical 
Evaluation Tool software and a Nuclear Material, Nerve Gas and Blister 
Agent Detection System. Both of these programs are in development Phase 
I and could be procured in fiscal year 1999 with an additional $1.0 
million.
    Question. The proposed unit strength for the CBIRF will be 350 to 
400 marines. What is the current strength? When will you achieve your 
planned unit strength?
    Answer. There are a total of of 374 Marines and Sailors listed in 
CBIRF's Table of Organization (T/O). Currently, there are 368 Marines 
and Sailors assigned. Recognizing that most Marine Corps operational 
units are manned at 90% of required strength, CBIRF has achieved an 
acceptable manning level.
    Question. What impact would the decision to use the National Guard 
as the ``first shield'' in a chemical or biological attack have on the 
CBIRF's mission? Please explain.
    Answer. CBIRF's mission is to provide a national consequence 
management (CM) capability to assist first responders in cities and on 
military installations, and our allies overseas in the wake of a 
terrorist initiated release, or threat to release, of a chemical or 
biological weapon of mass destruction (WMD). CBIRF also enhances force 
protection against WMD for forward deployed forces by providing 
training assistance. Additionally, CBIRF is charged with developing the 
operational concepts and researching technologies that will enhance and 
enable more efficient WMD CM operations. CBIRF is most effective when 
forward deployed in response to a credible threat or to provide 
protection for events of national significance, such as the Olympics, 
State of the Union, 1996 Inauguration, etc.
    When the National Guard is ready to provide the ``first shield'' in 
a chemical or biological terrorist attack, it will provide a vital link 
in the nation's domestic consequence management capability. National 
Guard assets should be able to respond to no-warning WMD events more 
quickly than CBIRF and to provide similar assistance. The geographic 
spread of National Guard units will provide the nation with a more 
viable local presence that should have the capability to appropriately 
reinforce local responders to assist in extraction of victims and save 
lives. The National Guard should be able to provide a much needed 
robust local response capability in a more timely manner than CBIRF and 
is a key part of the Nation's domestic response capability.
    While the National Guard will significantly enhance domestic 
preparedness, it will be difficult for Guardsmen to maintain the level 
of training and speed of response that CBIRF has once it is forward 
deployed. As the National Guard shoulders the responsibility for 
providing national level assistance at the local level during no-notice 
attacks, CBIRF will be able to focus on improving methods and 
technologies, providing assistance overseas and will still be prepared 
to augment local, state, and National Guard assets for pre-planned 
events or when credible treats are delivered.
    The timely local response capability of the National Guard and the 
comprehensive capability provided by CBIRF should prove to be 
synergistic, not redundant. CBIRF welcomes the opportunity to work with 
the National Guard to share lessons learned, and to work on the 
development and integration of respective response capabilities.

                          Ammunition Programs

    Question. For fiscal year 1999, the Marine Corps is requesting 
$146.7 million for ammunition. This is an increase of $22.1 million 
over last year's appropriated level. What is your annual combat 
training ammunition requirement?
    Answer. $299 million based on the most recent pricing. An extensive 
Marine Corps ammunition study conducted in 1996 reduced the overall War 
Reserve (WR) requirement. This reduction in the WR freed up some assets 
that are now being consumed to meet annual training requirements. These 
available assets have allowed the Marine Corps to fund only that 
portion of the ammunition requirement not covered by the drawdown of 
the old WR and apply the savings to other readiness and modernization 
needs.
    Question. Is your annual combat training requirement for ammunition 
fully funded in fiscal year 1999? If not, what is the shortfall and 
what is the impact on your war reserve?
    Answer. Through the fiscal year 1999 funded delivery period, the 
predominance of the Marine Corps training requirement is funded. 
However, spot shortfalls do occur from time to time. Once these 
shortfalls are identified they receive high priority until a solution 
can be found. Currently, the Marine Corps has identified fiscal year 
1999 shortfalls in the following items:

------------------------------------------------------------------------
                                                              Shortfall
               DODIC                          Item               ($M)
------------------------------------------------------------------------
C784...............................  CTG, 120MM Target               0.7
                                      Practice w/Tracer (TP-
                                      T).
C785...............................  CTG, 120MM Target               0.5
                                      Practice Sabot
                                      (TPCSDS-T).
A940...............................  CTG, 25MM Target                0.9
                                      Practice Sabot (TPDS-
                                      T).
A075...............................  CTG, 5.56MM Blank               0.6
                                      Linked.
A143...............................  CTG, 7.62MM Ball                0.7
                                      Linked.
A555...............................  CTG, Cal .50 Ball               0.3
                                      Linked.
A363...............................  CTG, 9MM Ball.........          0.8
HX05...............................  Rocket, 83MM Dualmode          18.0
                                      PIP.
G878...............................  Fuze, Hand Grenade              2.5
                                      Practice.
G940...............................  Grenade, Hand Smoke             0.5
                                      Green.
G982...............................  Grenade, Hand Practice          0.2
                                      Smoke.
L283...............................  Signal, Smoke and               0.5
                                      Illum, Marine.
MN08...............................  Igniter, Time Fuse              0.6
                                      Blasting.
    Total..........................    ....................         26.8
------------------------------------------------------------------------

    There are other shortfalls identified in items requiring large 
quantities of C-4 explosive. Due to the increased cost of these items, 
the Marine Corps is reviewing its requirements for these items and 
waiting for C-4 pricing to stabilize. As the situation becomes clearer, 
the Marine Corps will address all shortfalls in its fiscal year 2000 
budget development.
    In general, the Marine Corps does not draw down its War Reserve to 
support training. The Marine Corps ammunition program has been built to 
support the annual training requirements, meet the Combat Requirement 
through the five year defense plan, and preserve the Strategic and 
Residual Reserve inventories.
    Question. Last year, we discussed that there had been a significant 
increase in the cost of explosives manufactured at the Holston 
Ammunition Plant. The unit cost of explosives has gone from 
approximately $10,000 to $57,000. Congress appropriated funds in fiscal 
year 1997 and 1998 to procure explosives manufactured at Holston. It is 
our understanding that you may go ``off-shore'' to procure explosives. 
Has the situation been resolved? How? Have you obligated the fiscal 
year 1997 or 1998 funds?
    Answer. No, it is anticipated that in June 1998 the Army will 
resolve this issue via a full and open competition. The Marine Corps is 
reviewing its requirements for these items and will address this issue 
during the fiscal year 2000 budget development. Fiscal Year 1997 and 
fiscal year 1998 funds status is identified below:
    --Fiscal Year 1997 funds for linear charges and demolitions have 
been obligated.
    --Fiscal Year 1998 funds for demolitions have been obligated.
    --Fiscal Year 1998 funds for linear charges have not yet been 
obligated. (Anticipate obligation by April 1998).
    Question. The Marine Corps is requesting $10,000,000 to procure 
M767 fuzes which are used with 155MM Howziter projectiles. Based on 
outyear budget projections, the M767 will not be produced after fiscal 
year 1999. Does the Marine Corps have a requirement for M767 fuzes 
after fiscal year 2000? What is the impact if the M767 fuze line goes 
cold after fiscal year 1999? (To the Marine Corps and industrial base). 
Does the fiscal year 1999 budget maintain the M767 production line for 
a full year?
    Answer. Yes, the Marine Corps has requirements beyond fiscal year 
2000 for M767 1998 and fiscal year 1999 funding will enable a ``bulk'' 
buy of these fuzes with the Army. This will provide Marine Corps with 
sufficient M767 fuze quantities through fiscal year 2003.
    It is assumed if the M767 fuze line goes ``cold'' i.e. stops 
production, there would be an increase in unit costs associated with 
the line's restart. The Marine Corps receives all ammunition pricing 
data from the Single Manager for Conventional Ammunition, who can 
address such impacts in greater detail.
    Yes, the fiscal year 1999 budget maintains the M767 fuze production 
line for a full year.

                       Year 2000 Computer Problem

    Question. One of the problems that we face as we center the next 
century is older computers that are only programmed to remember the 
last two digits in a year. Thus they remember `1997' as simply `97'. 
The year 2000, however, will be saved as `00', the same as the year 
1900. This can lead to calculation errors and system failures. How 
serious is this problem for the Navy? What would be the impact if your 
Mission Critical Systems were not corrected by the year 2000?
    Navy Answer. The Year 2000 (Y2K) problem is a pervasive problem 
within any organization that heavily employs information technology to 
accomplish its mission. We recognize that it resides in all ships, 
submarines, aircraft, and facilities, afloat and ashore, and it 
potentially affects systems in all areas from targeting to pay. It is a 
serious problem in that effects from Y2K problems can directly impact 
Navy operational readiness. The impact of Mission Critical Systems not 
being corrected by the year 2000 would be significant. A service wide 
approach to provide oversight of Navy Y2K efforts is being coordinated 
to reduce the chance that any Mission Critical systems will not be Y2K 
compliant by the year 2000.
    Marine Corps Answer. As we assessed the impact of the Year 2000, we 
determined that it touches all mission and support systems; may cause 
program and upgrade delays; places additional cost burdens on some 
programs; may require require early termination of systems; and may 
drive a solution toward early migration and modernization.
    The Department of the Navy (DON) is totally committed to assure 
that no mission critical system failures occur due to the Year 2000 
issue. If a mission critical system would fail due to the Year 2000 
problem, it could potentially lead to a degradation in our ability to 
accomplish our missions. Therefore, the Navy and Marine Corps are using 
an integrated, system-by-system, ship-by-ship approach that will ensure 
critical war-fighting and war-fighting support capabilities remain 
intact through the Year 2000 and beyond.
    Question. How many systems does the Navy have to evaluate and where 
do they stand in the process of assessment, renovation, validation and 
implementation?
    Navy Answer. The following is a status of the Navy Y2K efforts:

----------------------------------------------------------------------------------------------------------------
                                                                               Navy                    MarCorps
                            Phase                                 Navy       Mission      MarCorps     Mission
                                                                Systems      Critical     Systems      Critical
----------------------------------------------------------------------------------------------------------------
Awareness...................................................            0            0            0            0
Assessment..................................................            0            0            0            0
Renovation..................................................          772          162           51           46
Validation..................................................        1,178          266           12           12
Implementation..............................................           28           10            4            4
Completed...................................................          281          225          100           90
                                                             ---------------------------------------------------
    Total...................................................        2,259          663          167          152
Total DON:
    (Navy & MarCorps)...................................        2,426          815
----------------------------------------------------------------------------------------------------------------

    The Department of Navy has 2,426 systems--815 are mission critical 
and 1,611 are non-mission critical. All 815 mission critical systems 
have completed assessment (208 Mission Critical systems are in 
renovation, 278 are in validation, 14 are implementation, and 315 have 
completed all phases).
    Marine Corps Answer. The Marine Corps has 167 systems--152 are 
mission critical systems, all of which have completed assessment (46 
Mission Critical systems are in renovation, 12 are in validation, 4 are 
implementation, and 90 have completed all phases). Of our Non-Mission 
Critical systems, 5 are in renovation, and 10 have completed all 
phases.
    Question. Are there any systems, particularly Mission Critical 
Systems, whose Year 2000 efforts could be improved with additional 
funding? If so, which systems are they, how much money would you need, 
and how would the money be used?
    Navy Answer. The Department of the Navy's target date for 
completing all fixes is June 30, 1998. The Department of the Navy's 
target date for installing the fixes at all user sites is December 31, 
1998.
    Because much of our testing is still ahead of us, it would be 
premature today to state which systems would or would not need 
additional funding. As we progress through the rigorous in-depth 
testing of systems and interfaces, we may encounter needs for 
additional funding that have not been identified to date.
    The following programs, while scheduled to be fully completed by 
the Year 2000 will not meet the DoD mandated December 1998 completion 
date. Additional funding would accelerate the fielding of the Year 2000 
fixes from October 1999 to March 1999.
    JMCIS/GCCS-M Ashore: $800 thousand/OMN
    The additional funding, beyond current program funding, would be 
used to accelerate the installation of Y2K software and required 
training at ashore command centers. Upgrades are scheduled to commence 
June 1998 and current plans and budget allow for fielding at the final 
ashore site not later than October 1999.
    JMCIS/GCCS-M Tactical Mobile: $1.1 million/OPN
    The additional funding, beyond current program funding, would be 
used to accelerate the acquisition and installation of Y2K compliant 
hardware and software in Tactical Support Centers, Mobile Operations 
Control Centers, Mobile Ashore Support Terminals, and Mobile Integrated 
Command Facilities (TSC, MOCC, MAST, MICFAC). Current plans and budget 
allow for fielding at the final Tactical Mobile site not later than 
October 1999.
    Infrastructure: $88 million
    The additional funding, beyond current modernization funding, would 
be used to accelerate the procurement of the hardware required for the 
software to run. Though not mission critical, it is considered mission 
essential.
    Marine Corps Answer. Because much of our testing is still ahead of 
us, it would be premature today to state which system would or would 
not need additional funding. As we progress through the rigorous in-
depth testing of systems and interfaces, we may encounter needs for 
additional funding that have not been identified to date. US Navy 
Command and Control (C2) systems have Year 2000 plans identified and 
funded. The following additional funds would be used to accelerate the 
completion of fielding of the Year 2000 fix from October 1999 to March 
1999.
    JMCIS/GCCS-M Ashore: $800 thousand/OMN
    The additional funding, beyond current program funding, would be 
used to accelerate the installation of Y2K software and its associated 
training at ashore command centers. Current plans and budget allow for 
fielding at the final ashore site not later than October 1999.
    JMCIS/GCCS-M Tactical Mobile: $1.1 million/OPN
    The additional funding, beyond current program funding, would be 
used to accelerate the acquisition and installation of Y2K compliant 
hardware and software in Tactical Support Centers, Mobile Operations 
Control Centers, Mobile Ashore Support Terminals, and Mobile Integrated 
Command Facilities (TSC, MOCC, MAST, MICFAC). Current plans and budget 
allow for fielding at the final Tactical Mobile site not later than 
October 1999.
    Marine Corps Infrastructure: $20 million
    The additional funding, beyond currently budgeted modernization 
funding, would be used to accelerate the procurement of the hardware 
required for the software to run. $88 million is the amount required to 
bring the Marine Corps' inventory (approximately 35,000 286, 386 and 
low-end 486 computers) into Y2K compliance. However, only $20 million 
(approximately 8,000 computers) is executable in Fiscal Year 1999. 
Through not mission critical, this is mission essential.
    Question. Has your organization appointed a Year 2000 program 
manager and established an agency-level program office to manage and 
coordinate your Year 2000 program activities?
    Navy Answer. The Chief of Naval Operations is in the process of 
establishing a Y2K Project Office to coordinate all Navy Y2K activity. 
The project office will be headed by a Rear Admiral who will report 
directly to the Director, Space, Information Warfare, Command and 
Control (N6), VADM Cebrowski. The project office will be co-located 
with the Department of the Navy's Chief Information Officer Y2K staff 
and is in close coordination with the U.S. Marine Corp's Y2K staff.
    Marine Corps Answer. The Department of the Navy (DON) is totally 
committed to assure that no mission critical system failures occur due 
to the Year 2000. Efforts by the Secretary of the Navy Staff and 
Department of the Navy Chief Information Officer (DON CIO) have been 
ongoing for two years. The DON CIO staff currently has a dedicated Year 
2000 team led by an O-6 (US Navy Captain). The Year 2000 Team includes 
three professional Naval Officers, three government employees, and two 
man-years of contract support from a leading IT corporation. The Chief 
of Naval Operations has initiated a program office within CNO N6 to 
manage the Year 2000 risk and ensure there is an operational response 
to any emergent Year 2000 issues. The Commandant of the Marine Corps 
has tasked his Assistant Chief of Staff C4I (Marine Corps CIO) with 
oversight and management of the Year 2000 issue within the Marine 
Corps.
    Question. Have you completed a Service-wide inventory of 
information systems?
    Navy Answer. As part of the Assessment Phase, the Department of the 
Navy's Chief Information Officer directed all Program Managers to 
provide a complete inventory of information systems and to report their 
status of effort in the Defense Information Systems Tool (DIST). That 
action has been completed.
    Marine Corps Answer. Yes. Our inventory is contained in the Defense 
Integration Support Tools (DIST).
    Question. Have you deferred or canceled any new systems development 
efforts in order to reprogram the funds to achieve Year 2000 compliance 
with an existing Mission Critical System? If so, which systems were 
deferred or canceled?
    Navy Answer. There have been no reports of any system development 
cancellations for reprogramming of funds to the Y2K effort.
    Marine Corps Answer. The Department of the Navy (DoN) has not 
identified the need to reprogram fiscal year 1998 funds to meet its 
Year 2000 requirements. That does not preclude the possibility that 
future reprogramming actions may be necessary if the situation 
dictates.
    Question. Have you developed contingency plans for Mission Critical 
Systems?
    Navy Answer. The Department of the Navy's Year 2000 action plan 
directs the development of contingency plans for those Mission Critical 
Systems that will not complete Renovation by June 30, 1998 or complete 
Implementation by January 1, 1999. Currently, there are nine identified 
Mission Critical systems meeting this criteria. Two of these systems 
have a contingency plan in place and the other seven contingency plans 
are in draft.
    Marine Corps Answer. The Department of the Navy will closely 
monitor mission-critical systems scheduled for replacement or 
remediation for progress in meeting targeted year 2000 compliance 
deadlines. For each mission critical system for which replacement or 
remediation requirements exist, and for which operational fielding is 
scheduled to extend beyond January 1, 1999, the program office of the 
system, in coordination with the operational users, has developed a 
contingency plan that was effective no later than February 1, 1998. 
Systems which do not complete renovation by June 30, 1998, are required 
to have a contingency plan developed by July 31, 1998.
    Question. Overall, are you confident of the Navy's ability to 
correct this problem before the year 2000?
    Navy Answer. I am very confident of the Navy's approach to fixing 
Year 2000 problems. It is a comprehensive and integrated approach that 
seeks to manage the Year 2000 problem as a management challenge rather 
than a technical issue. The management approach has been endorsed by 
the CNO and requires Navy-wide participation. We are leveraging the 
lessons learned from industry and the other services and are working 
closely with the Office of the Secretary of the Defense and the 
Department of the Navy's Chief Information Officer in the management 
and coordination of effort in order to successfully meet the Y2K 
challenge.
    Marine Corps Answer. The Marine Corps and the Navy are totally 
committed to assure no mission critical system failures occur due to 
Year 2000. The Navy/Marine Corps is working in concert with OSD, the 
Defense Agencies and the other Services in addressing the Year 2000 
challenge. We will continue to aggressively manage and monitor progress 
until full Year 2000 compliance is achieved throughout the Department 
of the Navy.

          Information Technology Management Reform Act (ITMRA)

    Question. The Information Technology Management Reform Act of 1996 
(known as the Clinger-Cohen Act) requires each agency to make specific 
changes in how they select and manage information technology programs. 
Among other steps, this includes performing an analysis of 
alternatives, a cost-benefit analysis and identifying specific 
performance measures. What steps had the Navy taken to come into 
compliance with the Clinger-Cohen Act?
    Answer. The Department of the Navy has established a Department of 
the Navy Chief Information Officer and created an office supporting the 
Department of the Navy Chief Information Officer. We have modified 
directives to take advantage of the new acquisition philosophy inherent 
in the Clinger-Cohen Act. The entire approach to Information Technology 
management in the Department of the Navy has been restructured to allow 
the panoply of stakeholders to participate in the development and 
implementation of policy. A Board of Representatives from all major 
second echelon commands is the senior body for central leadership of 
the Information Technology program. Various Integrated Product Teams 
working for the Board do the detailed work in assigned functional 
areas.
    Question. Is the Navy now in compliance with this Act?
    Answer. We are completely in compliance and are working constantly 
to assure we remain so. We see compliance as a continuing 
responsibility rather than a project with a terminal date.
    Question. What improvements has the Navy seen as a result of the 
Clinger-Cohen Act?
    Answer. We have observed a major increase in momentum as the 
Department of the Navy moves to better harness the capabilities of 
information technology for mission accomplishment. Initiatives such as 
Information Technology for the 21st Century (IT-21) are receiving 
widespread and enthusiastic support as it becomes increasingly apparent 
that innovative use of information technology is welcomed and 
facilitated at the highest levels in both the Executive and Legislative 
branches.
    Question. In the last year, as a result of your Information 
Technology Milestone reviews, did the Navy delay, cancel or 
significantly restructure any of their Information Technology systems? 
If so, which ones?
    Answer. The process of molding Information Technology systems is 
best facilitated by constant informal relations between reviewers and 
project managers rather than overt countermanding of programs in 
process. There have been no dramatic, formal actions to change systems 
during the last year. This is seen as a strength in the process since 
it reflects a continuing dialog between the parties involved.
    Question. What documentation does your review panel require for 
each milestone review?
    Answer. Documentation is tailored to the size and nature of each 
individual project. Specific requirements are contained in Secretary of 
the Navy Instructions 5000.2B and 5420.188E.
    Question. In conducting these reviews, how many involved an actual 
meeting of the senior decision makers, and how many were `paper' 
reviews?
    Answer. As noted above, we take pride in working out problems 
before they reach the stage of requiring action by senior decision 
makers, and this has been the approach reflected in our extensive use 
of `paper' reviews. With respect to those conducted at the Department 
of the Navy level, three during Calendar Year 1997 involved actual 
meetings and six were `paper' reviews. Many reviews are conducted at 
subordinate echolons and no central data is maintained.
    Question. Has the OSD MAISRC, in its reviews, delayed, canceled or 
significantly restructured any of the Navy's Information Technology 
systems? If so, which ones?
    Answer. No. Actions have been taken as a result of OSD reviews, but 
MAISRCs, per se, have been supportive.

    [Clerk's note.--End of questions submitted by Mr. Young.]
                                           Thursday, March 5, 1998.

                     AIR FORCE ACQUISITION PROGRAMS

                                WITNESS

LIEUTENANT GENERAL GEORGE K. MUELLNER, USAF, PRINCIPAL DEPUTY ASSISTANT 
    SECRETARY OF THE AIR FORCE (ACQUISITION)

                              Introduction

    Mr. Young. The Committee will come to order. General 
Muellner, thank you very much for being here this afternoon.
    Your entire statement will be placed in the record, and we 
will be happy to have you consolidate it and summarize it any 
way you like.

                 Summary Statement of General Muellner

    General Muellner. Absolutely, sir. I do appreciate the 
opportunity to address you both.
    What I would like to do is just quickly step through the 
layout of our RDT&E and procurement programs this year. I will 
lead you through a couple of the key programs that we have and 
give you an update on how we are doing, and also give you an 
opportunity to ask any questions that you may have relative to 
those particular systems. Then I will wrap up with what I think 
is a good news story on where we are going wit some of our 
business affairs improvement and also some of the reduction in 
the acquisition work force.

                     MEETING THE WARFIGHTER'S NEEDS

    (CHART 1) Obviously, we built upon Joint Vision 2010 when 
we put this plan together, and I think you will find, and I am 
sure the Chief and the Secretary pointed out to you earlier 
today, we are really trying to embrace the revolution in 
military affairs, so we are really pushing the information and 
technology, clear down to the shooters and the ability to put 
precision weapons where we want it, when we need it, and that 
is the key focus of our program.

                      MODERNIZATION ACCOUNT HEALTH

    (CHART 2) The good news I think from the standpoint of our 
1999 President's Budget as submitted is our acquisition program 
overall has turned upwards; 1998 was a low ebb for us as far as 
the overall program content, down to 31.6 percent of the total 
budget. As you can see, we have stepped up, so that is a very 
positive trend as we work to correct some deficiencies in our 
modernization programs and replace some of our aging equipment.

                           GENERAL REDUCTIONS

    (CHART 3) One area of concern that we do need your help on, 
and that is in the area of undistributed cuts, or general 
reductions as they are called. We certainly understand the need 
for both of us to work together as a team in doing this, but 
when these come across to us as these undistributed reductions, 
unfortunately, they give me very little flexibility as to how 
to distribute them to minimize program content.
    As you can see from the percentages reflected here, these 
have been on a steady rise. This rise has gotten to the point 
where in some programs, because of multiple applications, the 
impact on the programs is rather significant. Programs, for 
instance, like Joint Tactical Information Distribution System, 
JTIDS and JDAM ended up getting hit not only with the 
adjustments because of economics, some of the general 
reductions, but they also get taxed again as a result of them 
using Federally Funded Research and Development Centers, FFRDC 
support or advisory service support. In general, these programs 
just don't have the flexibility to absorb a 12 or a 13 percent 
cut. So we really would like to work with your staffs to see if 
we could get some flexibility so that we could distribute these 
cuts to areas where we can better absorb and take out the 
content, rather than hurting some of these key programs like 
JTIDS.

                            AIR SUPERIORITY

    (CHART 4) What I would like to do now is just set the 
stage, if you will, and go through the key programs that we 
have and give you a brief update. We emphasize these terms of 
our core competencies, air and space superiority being the 
first of those; it was highlighted on the previous chart. I 
will start with the air and then go to the space side.
    Obviously the key program here for us is the F-22. That 
program is well into Engineering and Manufacturing Development, 
EMD, the first of the test airplanes is out at Edwards that we 
will start flying here very soon. The second one is down in the 
fuel barn right now and will be out at Edwards later on this 
summer also starting its flying activity.
    The EMD program is moving along very well. We have had, I 
think, 2 or 3 produceability issues that have come up as 
aresult of executing the manufacturing and development aspects of that, 
and one with some issues with titanium castings that we have worked our 
way through, a welding problem and how to inspect those. Another one 
with some tail, composition of the tail honeycomb, a very conventional 
design, the same that is used in the F-15 and F-18, but again, they 
have a manufacturing process which they have since fixed.
    The end result of that was ships 3, 4, 5 and 6 ended up 
slipping anywhere from about 5 months down to a couple of 
weeks, and by ships 7 and 8, which are the last of our 
airplanes in the EMD program, they are back on schedule. The 
impact of that is they have had to go out and adjust the flight 
schedule activities to accommodate for it. It will not impact 
the beginning of Independent Operational Test and Evaluation, 
IOT&E, and we think that those problems are behind us, but 
rather typical I think of the EMD activities, at least that I 
have seen.
    The other most important issue from my standpoint with the 
F-22 is the Air Force and the contractors have I think put 
together a program that we are highly confident we can execute 
within the cost caps, and I think we are getting good closure. 
The real test will be later on this summer when the CAIG comes 
in with their independent assessment. But all the feedback I am 
getting shows that they are pretty well on board with where we 
are at, so I am very optimistic that we will get good 
enforcement with that. The other thing, the contractors are 
willing to sign at a firm, fixed priced contract for the first 
two lots, so that is certainly good news, given their risk 
aversion.
    The other key program is of course the Airborne Laser. 
Again, it is a heavily milestone-driven program. It has met or 
exceeded every one of those milestones. There is a lot in the 
press about it. I can tell you most of it is not founded by any 
factual information. There are 4 demonstration milestones that 
have to be achieved before we leave the current phase of the 
program. They have already satisfied two of those and will 
complete the other two by June of this year. The program is 
exactly on cost and schedule from the standpoint of actual 
program execution.
    The task remaining in Air Borne Laser, ABL, is one of an 
engineering, it is not science. We have moved beyond that. All 
of the atmospheric collection we have done around the world and 
in Southwest Asia and Northeast Asia have reinforced all the 
modeling that has gone into it, and we have had some of the 
finest scientific talent in this country review this. I have 
had 3 separate review teams. All three of them have come back 
with exactly the same conclusion: press on, you are exactly 
where you should be, and we have found nothing that would take 
you off your model to date.

                           SPACE SUPERIORITY

    (CHART 5) As we move into space superiority, again, this is 
a very important area for the Air Force. It is one where we 
have a very large percentage of the Total Obligational 
Authority, TOA, missions. On the Communications side, I think 
the medium data rate, high capacity MILSTAR communication 
program is executing out very well. I think we have 
significantly improved our customer satisfaction. We had some 
problems in the early days, primarily with the use of the 
ground terminals and the user friendliness of those. I think we 
have moved beyond that. The only thing that I know of that 
General Habiger is still not real happy about is his inability 
to hold the conference calls with a large number of conference 
participants and not have significant lags that you would 
expect in this sort of communication, but we are working on 
that in the medium data rate field.
    Beyond that, I think our GPS is executing out very well. 
The Boeging North American, the contractor on that case, has 
done well, and has indeed I think achieved the cost savings we 
expected through the multiyear contract. The big push for us 
right now is to deal with increased interest by the FAA and 
other folks to get access to the more secure GPS to get better 
accuracy, and we are working with DOT to bring that issue to 
closure here, hopefully in the near term.
    The other key area of course is SBIRS, which is the space-
based IR system, a high interest item to many Members on the 
Hill, especially the SBIRS Low. Both of those programs are on 
schedule and as we were directed to do, we accelerated the 
SBIRS Low to a 04 time frame. So that program is still on 
schedule, although it does carry a fair amount of technical 
risk with it.
    With EELV, the evolved expendable launch vehicle concept, 
we changed our acquisition strategy this year, and because of 
the market demands that are seen out in the future, they 
clearly dictated the fact that having two competitors out there 
would do both us and our commercial users a great service. So 
what we elected to do at that point in time was change our 
strategy, not down-select to a single contractor for EMD, but 
carry both of them and split our EMD investment, which was 
about $1 billion total, so that each of them will get about 
$500 million. It is a robust effort; their own capital, they 
are chasing the commercial markets. Right now I think both of 
those contractors seem to be meeting their cost goals, and 
estimates have typically reduced dollars per pound to orbit, 
and that is the main objective of this program, of course, 
reduce the excess cost of access to space.

                             GLOBAL ATTACK

    (CHART 6) As you get into the global attack area, the 
bomber force, if you will, the primary emphasis here has been 
the robust and conventional capabilities of the bomber force. 
The B-1 defensive systems upgrade and conventional munitions 
upgrade programs are both doing very well. The acceleration 
that you all helped us with, the JDAM capability along with 
improved communications on a small fleet of 7B-1s is executing 
well,and by the end of this calendar year we will have the 
first of those airplanes on the map, and by February of next year we 
will have all 7 of them operational, JDAM-capable, and capable of 
operating in much higher threat environments. So that program I think 
is executing out quite well.
    The B-2 of course is kind of on hold. We have frozen our 
investment in the immediate expenditure of all of the 
appropriations this year, pending the outcome of the 
presidential commission. As soon as that commission executes 
out, and we certainly hope it is done by the 1st of April or we 
are going to have some major challenges, we are prepared to 
step off and if the decision is to indeed be all that you can 
be with this number of airplanes, we are prepared to spend that 
money to robust the Low Observable, LO, supportability of the 
airplanes and also enhance the conventional weapons delivery. 
We have pretty good plans in place and actual contracts in 
place to execute that at this point in time.
     The Minuteman upgrade program, we did something this year 
that we have been trying to do for 2 years, in that we took 150 
individual contracts that we had to integrate as the government 
on the Intercontinental Ballistic Missile, ICBM, programs. We 
went out and found the prime contractor through a competition, 
in this case TRW, and they now manage the entire ICBM Program. 
I might add that we project $1.5 billion in cost-avoidance over 
the long-term program as a result of doing that.
    So not only did we achieve the same satisfaction in this 
case, STRATCOM, I think we significantly reduced the cost as a 
result of going to this prime contractor total system 
performance responsibility approach.

                          PRECISION ENGAGEMENT

    (CHART 7) On the precision engagement standpoint, probably 
the most contentious of the airplanes up there, since the 
others are all in existence, is the Joint Strike Fighter. From 
our perspective, the program is executing well with the Navy 
now at the helm of that ship, if you will, with an Air Force 
program manager over there. The program remains focused on 
affordability. The contractors, the warfighters and the 
developers all understand the importance to Air Force force 
structure and the other services, of bringing that program in 
on cost. And I think Major General Select Kenne over there is 
doing a great job of keeping them focused on that.
    We, with the Department of the Navy, also made the 
commitment to fund the alternate engine program such that it 
would be ready for competition out in production. It really 
didn't buy us much as far as risk reduction during the 
development, but in production, hopefully like the 100 and 110 
competition did, it will get us lower prices and more product 
improvements as they compete with each other in the outyears.

                                WEAPONS

    (CHART 8) As we look at the weapons, I think this has been 
a good use year in both JDAM and in the Wind-Corrected 
Munitions Dispenser (WCMD-GPS) aided in both cases, for JDAM 
and for WCMD, have come along and matured very well. We went 
through some developmental issues with JDAM this year. One, we 
had a truncated envelope as a result of some hardware issues 
that they fixed. The residual problem that they are just now 
fixing was the fact of a low altitude, high-speed condition. 
The F-18's flow field wanted to vibrate one of the fins off of 
the weapon. They have had to go in and have now actually pinned 
the guidance assembly on that fin, and that looks like it is 
going to fix the problem. The good news is that while that fix 
cost us a little bit in the development program, it will not 
increase the cost and we are still going to bring that in at 
the $14,000 round that they committed to.
    Wind Corrected Munitions Dispenser, WCMD, which is going to 
allow all of us to deliver our cluster bombs with accuracy from 
altitude and correct for winds, and so on, also is executing 
well. They went through a similar issue with the fin rigidity 
issue as a result of the flow field effects, and they have 
probably come to the same conclusion, although that will not be 
decided until next week, and they are actually going to pin the 
fins until they are free of the airplane. But again, good news 
on both of those.
    The other program of course that is in development and a 
very important one to the Air Force in particular is the JASSM 
program. That is undergoing an Analysis of Alternatives right 
now which will report out to the Joint Requirements Oversight 
Council, JROC on the 23rd of March, and subsequently come to 
the Hill very shortly thereafter.While I haven't seen the 
Analysis of Alternatives, AOA results yet, based upon what I am seeing 
from both of those contractors, I think we are going to find that JASSM 
is not only significantly more effective, but also is significantly 
cheaper than the other alternatives. And that program to date has 
executed well. A good example of what acquisition reform and 
competition will do for you, because that has been a real cut-throat 
competition.

                        INFORMATION SUPERIORITY

    (CHART 9) In the information superiority area, probably the 
platform that has gotten the most attention up there is the 
JOINT STARS. As you know, as a result of the QDR activity, that 
war reduced from 19 to 13 aircraft, that was based upon the 
possibility of NATO buying some additional platforms. That has 
since been moved to the right. NATO has not made that decision 
yet. They are still studying the effort, and historically, my 
guess is that they will be for many years. So the end result of 
that is the department right now is reviewing how many MIT-
based platforms we really need and what the nature of those 
need to be. The contenders are additional JOINT STARS; we could 
look for a UAV application, possibly from something like Global 
Hawk which just recently flew, or the possibility is we may 
have the ability to move some of those to space.
    Just recently, we and the NRO and DARPA have signed an 
agreement on a joint program we have just stepped off on that 
will produce hopefully lower-cost satellites, $100 million or 
less, that will be able to provide the warfighter direct MTI 
from space. Not the efficiency of JOINT STARS, but still good, 
and I think in the future we will see some of that migrating 
through that sort of venue for detection.
    As I just mentioned, Global Hawk finally flew. That had 
slipped several times because of software problems, but last 
Saturday it had a very successful, 55-, 56-minute flight. It 
did very, very well. Thus far, all the data reduction will 
probably go on for another month or so, because they tend to be 
very conservative. All the data reduction so far indicates that 
they are on a good track, and they are not about to repeat the 
problem Dark Star had on its second flight, I guarantee you 
that. Dark Star meanwhile is probably still 30 to 60 days away 
from its next flights.

                         RAPID GLOBAL MOBILITY

    (CHART 10) Global mobility, our biggest challenge has been 
getting the C-5 reliability up. Because of engine problems, 
some of which have been associated with the drawdown of the 
depot down at Kelly, some of which has been associated with 
some erosion and failure problems in the turbine section, our 
reliability had fallen unacceptably low. We have put a fair 
amount of money, almost $500 million, in the 1999 budget to 
address the turbine problems and also address some of the real 
major bad actors on the airplanes as far as failures, and those 
were in the flight control system, our autopilot and stab 
augumentation devices. We are optimistic, and we have already 
seen an upturn in those numbers, so I think we have worked that 
problem. The long-term solution that General Keoss is studying 
right now is what type of integrated modernization program do 
we need for the C-5 or what other options do we need to handle 
the airlift issues. One of the proposals on the table that he 
is looking at is what is called the C-5M. It is a proposal that 
would replace the TF-39s which have been difficult for some 
time to maintain, and at the same time, update the avionics to 
deal with the global air navigation issues all in one package. 
That will be reviewed this year in the budget process.
    Mr. Hobson. Excuse me. The line out there is 2015 on the C-
5s?
    General Muellner. Yes, sir. The assumption we have, and I 
think that clearly is what Air Mobility Command, AMC carriers, 
is that some version of the C-5 will indeed persist for quite 
some time. Those will likely be As and Bs modified to the same 
configuration.
    C-17----
    Mr. Hobson. Those get the C-141 mission, right?
    General Muellner. No, they don't. But the C-141 will age 
out as the C-17 comes in, and we will have about 53 C-141's 
that will continue on out until probably 2006 time frame, but 
it will be totally replaced as the C-17 comes on board.
    The one issue that still remains that AMC has asked us 
todeal with this year is the fact that there is a special operations 
support requirement that the 141 performs, and that right now was not 
factored into the original analysis that showed that 120 was the right 
number. So AMC has come in with a request to augment the C-17 by as 
many as 15 C-17s to pick up that special operations tasking, and that 
sole tasking as it is normally called, will be dealth with by the Air 
Force this year in our 2000 POM.
    Mr. Young. General, we are sort of pressed for time.
    General Muellner. You bet.
    The long-term plan for the C-130s are we are going to take 
the Es and Hs, drive them to a common configuration called the 
X, which we will try to standardize the engines and the cockpit 
on, and then the C-130J will augment our BR force in the 
outyears.

                         SCIENCE AND TECHNOLOGY

    (CHART 11) Sir, in the science and technology area, I think 
this year we had some very, very tough decisions, but in the 
long term I think we maintained a reasonably good percentage of 
funding and balance, as it was, across all 3 of the areas. You 
can see the focus. The focus was on space technologies heavily 
and information, two of the more leveraging areas for us from 
the standpoint of the Revolution in Military Affairs, RMA. We 
also had some key technology investments in those other areas, 
and you have copies of those, so I won't belabor them.

                     REVOLUTION IN BUSINESS AFFAIRS

    (CHART 12) Acquisition work force drawdown has been a key 
part of our strategy to try to improve our efficiency. As you 
can see from this, we have continued that drawdown, and by the 
2003 time frame, between 1989 and 2003 we will have drawn that 
force down 36 percent. That continues by going to more of this 
total system performance responsibility, and by getting the 
government out of those areas that are not inherently 
government activities, that don't require the government to be 
the only performer of those functions. That has been very 
effective to us, to driving down the costs of procuring things.

                            COST REDUCTIONS

    (CHART 13) Overall, the revolution, if you will, in 
business affairs and the acquisition streamlining has saved us 
or avoided the cost of about $18 billion. The vast majority of 
that has gone back into our modernization programs, which is 
one of the things that allowed us to maintain the delicate 
balance that we have, and we are continuing to work these areas 
to institutionalize them, and they are paying off.

                         AIR FORCE ACQUISITION

    (CHART 14) Sir, in summary, we have a whole program. I 
won't tell you that it isn't fragile, because it is. As I am 
sure the Chief and the Secretary pointed out this morning, 
things like dealing with the supplemental, the emergency 
supplemental is a very important issue to us as it came over. 
If we had to consume that out of our--absorb it, rather, in the 
modernization program, that would significantly impact what is 
right now a balanced program.
    Sir, I would be happy to take any questions that you have.
    [The statement and charts of General Muellner follow:]

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



                  SUPPLEMENTAL AND GENERAL REDUCTIONS

    Mr. Young. General, thank you very much. I would like to 
tell you that we hope, most of us at least hope that we can 
deal with the supplemental on an emergency basis and not have 
to offset it. We tried to sell that idea last year, but we 
didn't get any help from the administration. They refused to 
sign off on that, but this year, of course, they have.
    So maybe we can make that work. But you are absolutely 
correct. We really can't afford any longer to dig into your 
budget to pay for contingencies, either planned or unplanned.
    I just wanted to make one quick comment. You mentioned the 
general cuts and how they hurt. What I have to tell you, 
General, is that they hurt us to. We don't like to see those 
general cuts. But if we hadn't added a little over $6 billion 
to the President's budget last year, those general cuts would 
have been a lot more substantial, but this Committee took the 
lead to add those additional monies. Even after we got the 
President's budget, Secretary Cohen then came back to us and 
said that the budget was deficient in the area of spare parts, 
in the area of missile defense, and in the area of spare parts, 
in the area of missile defense, and in the area of health care. 
So we need to increase those amounts.
    So there is the problem. We are not stingy with you because 
we are your partners. We want to make sure you have whatever 
you need to be the Air Force that we all want you to be. So we 
are trying. This year we don't have that extra money that we 
had last year to add, so it may not be as easy this year as it 
was last year. But anyway, we are with you. I think our record 
speaks for itself in trying to provide the funding for the 
programs of the United States Air Force.
    With that, I would like to yield to Mr. Lewis, and because 
we do have a time problem this afternoon, we would like to 
adhere to the 5-minute rule as closely as we can.
    Mr. Lewis. Thank you, Mr. Chairman.
    Where is George Air Force Base, anyway?
    General Muellner. Sir, as you well remember, my wife still 
liked that house out there.

                              BOMBER FORCE

    Mr. Lewis. Well, it's a pleasure to see you.
    I do have some questions for the record, Mr. Chairman, that 
I would like to submit.
    I noted that you took from your list of charts a chart that 
involves an area that is of great interest to the Committee and 
it had to do with the bomber force, so I would like to ask just 
a couple of questions about that subject area, if I could.
    Could you bring us up to date as to where we are on the B-
52, the B-1, the B-2, the actual numbers that we have, 
especially numbers that might be usable if we needed to use our 
bomber force with a long reach involved? How many B-52s do we 
have?
    General Muellner. I will dig those numbers out for you so I 
don't mislead you. Right now, on the B-2 side, forinstance, and 
I know the Chief had some questions this morning that he could not deal 
with because of the classification. Right now, as we speak, if General 
Zinni so chose, we have 4 Block 30 B-2s and 5 Block 20 B-2s. They are 
ready, willing and able to be employed. We have GPS-aided munitions, 
both of the 2,000 and 5,000 pound class that those airplanes could 
employ. So those airplanes, they are ready to go, and obviously, as you 
well know, it is General Zinni's call as to actually what goes into the 
plan.
    On the B-52 side----
    Mr. Lewis. That is 9. I am just counting out rough numbers.
    General Muellner. Yes, sir. I might add, that is 9 building 
that, as you know, 16 of the 21 will be Backup Aircraft 
Authorized, BAA, as we normally describe them.
    In the case of the B-52 we have 71 of those, and in the 
case of the B-1, of course the answer is unfortunately we have 
92 of those now, as a result of the accident we had here a 
couple of weeks ago.
    Mr. Lewis. Tell me about the condition of the bomber force 
from your perspective. What adjustments would you make? Don't 
worry about what the Commission might say; I am interested in 
what you have to say.
    General Muellner. I think the main areas, if I start with 
the B-1, the B-1 would be the workhorse of the bomber force in 
the outyears. The key issues there are to get the defensive 
systems upgraded so that it can be a viable player without 
inordinate packaging in the theater. I think that program is 
executing well. We are dependent upon a Navy program called 
IDECM, which is the Integrated Defensive Counter Measure 
Program, and at the moment, I think that program will deliver 
what we ask from it there.
    The other key part of it, as you know, we have a 5-phase 
investment initiatives upgrade program under drawn executing 
right now in the case of B-1. That has met all of its schedule. 
The only impacts it has undergone recently as a result of some 
of the cuts that we had to take this year, a couple of 
movements occurred with some of the capability, but generally 
it is pretty well on track. That will put the B-1 in the 
condition of being able to deliver both GPS-aided weapons, and 
also cluster bombs with the wind corrected munitions dispenser, 
and then most importantly, being able to employ the JASSM 
weapon, the standoff weapon in the outyears. Right now it is 
limited in that effect in JASSM or the A0A alternative JSLAM, I 
think is the name of the competitor now, it is going to give it 
that type of reach-out. I think that makes that B-1 very, very 
leveraging. Its main benefits are not only its long range and 
its connectivity, but equally important is because of the small 
footprint of the airplane on the ground.
    Mr. Lewis. If you were discussing with me our total bomber 
force, would you include the 117?
    General Muellner. Sir, I look at force employment 
seamlessly. I put together the original bomber road map when I 
was director of requirements when we still had Air Combat 
Command, ACC.
    Mr. Lewis. When was that?
    General Muellner. Five years ago. And I don't see any seam 
at all between the application of force in 117s, F-15Es on the 
outer edge of the tactical aviation side and what bomberd can 
do in that part of the battlefield also.
    Mr. Lewis. Someone suggested that we don't know a lot 
recently about the value of the Navy and the aircraft carriers 
because of the developments in the Middle East, and the lack of 
availability of long-range bombers. I am very concerned about 
our ability to have that reach in times of crises, and some of 
my colleagues have talked a lot about the need to be able to 
travel over long, long distances.
    First, I would like to go back to that analysis you did 5 
years ago and I would like to see whatever I can see about 
that, classified or otherwise.
    General Muellner. ACC has since updated it, and I am sure 
they would be glad to come up. I mean they would welcome the 
opportunity.
    Mr. Lewis. I would like to look at that.
    General Muellner. You bet. And that includes all the 
weapons. It shows what is leveraging as far as they carry.
    I think a key part of that also is our approach with the B-
2.
    Mr. Lewis. My time is up, General, so you and I will have 
to chat another time.
    Mr. Young. We will have another round, Mr. Lewis.
    Mr. Dicks.

                               B-1 BOMBER

    Mr. Dicks. General, I want to welcome you here. We did have 
a discussion this morning about the bombers with General Ryan, 
and I think his testimony and your testimony called the B-1B 
the backbone of our bomber fleet.
    Now, it is my understanding that the requirement for B-1 
mission capability is 75 percent. It is also my understanding 
that the current mission capability rate for the B-1 bomber is 
51.2 percent and going down. According to a recent press 
report, the B-1's engine flight control system and Electronic 
Counter Measures, ECM systems continue to break down far too 
frequently. A shortage of spare parts has also sparked a 
dramatic increase in the B-1's cannibalization rate, a 
measurement of how many times a B-1 has to be raided for parts 
to keep another B-1 flying. The Air Force admits the 
cannibalization of the B-1 has reached the problem stage.
    The B-1 is not stealthy, has never been used in a conflict 
in its almost 20 years of existence, currently falls below Air 
Force standards of mission capability, and is being continually 
cannibalized for parts.
    With all due respect, General, are you somewhat embarrassed 
to call this the backbone of our bomber fleet?
    General Muellner. No, sir, I am not. I am not sure where 
all those numbers came from, but they are not consistent at 
least with the Mission Capable, and the Sustainment Executive 
Management Report, SEMR, reports of readiness.
    The other key part of it is I think in those cases, when we 
have called upon the B-1 to be ready, and in those cases where 
we are flying global power missions right now around the world, 
the B-1 performs very well. Clearly, we have spare parts 
problems with the B-1.
    As you recall, with the direction of the Congress a year 
ago, we ran an assessment of, it fully provisioned, what could 
the B-1 do? And if you recall, when we pulled all of the spare 
parts together that we generally have a shortage of across the 
fleet, the B-1 performed very, very well, as far as mission 
capability.
    So we understand how to fix the problems with the B-1. The 
problem we have with the B-1, as we do with many of our other 
weapons systems, is availability of spare parts often is driven 
by something other than just money. It is the suppliers and the 
existence of those suppliers still being around to produce, and 
in many cases, our log centers and/or clients who are dealing 
with these issues end up having to go out and find alternate 
suppliers.
    As I think you know, for the last 2 years, we have been 
trying to fix the B-1 program and we have spent a lot of money. 
In fact, the vast majority of the money that we have in bomber 
upgrades is to make the B-1 a conventional, survivable player. 
You are right, it is not stealthy, but on the other hand, when 
you package it, for instance, with a carrier battle group who 
is strike-poor, but support-rich, i.e., they have EA-6s, they 
have HARM shooters, but they don't have many bomb-droppers, you 
get a great synergy there, and we clearly I think have 
demonstrated that in an awful lot of exercises.
    So we think the B-1 is going to do a good job of carrying 
its load in the outyears.

                      WEAPONIZATION OF B-1 AND B-2

    Mr. Dicks. How long will it take on the B-1 and B-2 to get 
them fully weaponized, assuming for the moment that we are 
going to have 21 B-2s and the number of B-1s that you 
mentioned, how long is it going to take us to get all of these 
conventional weapons onto those two bombers so that we are not 
in a situation like we are now where the B-1s and B-2s both 
have a limited number of conventional weapons, at best?
    General Muellner. The B-1 and the B-2 in particular will 
both have, the last weapon to go on is in 2003, which is the B-
2, that is the JASSM or the JSLAM, if that would be the case. 
In the case of the B-1, it will have all of the weapons, 
including that standoff weapon in 2002, as will the B-2.
    Mr. Dicks. Will this include sensor-fused weapon, JSOW, 
JDAM and the BLU-113?
    General Muellner. The only airplanes that can carry the 
5,000 pound weapon right now will be the B-2 and the F-15E, and 
this is a bay size issue or a carriage limitation of the 
pylons. So that 5,000 or 4,800-pound weapon, which is in the 
GPU-37 configuration for GPS-aided, or in the 28 configuration 
for laser illuminator, will go only on the B-2 and the F-15E. 
But again, we have limited numbers of those and we think that 
is probably the right packages for those.
    Mr. Dicks. And right now you have sensor-fused weapons on 
the B-1?
    General Muellner. This is correct.
     Mr. Dicks. Are you going to put the upgraded version of 
sensor-fused weapon on the B-1?
    General Muellner. The Wind-Corrected Munitions Dispenser, 
which is the INS-guided version of that, and theJSOW-B will 
both have the skeet weapon in it which is what constitutes the sensor-
fused weapon, and JSOW will go on both the B-1 and B-2. WCMD will go on 
the B-1B.
    Mr. Dicks. Last question. Tell us about Terrain Collision 
Avoidance System, TCAS. We asked the Secretary, and this came 
up again on 60 Minutes 2 weekends ago. It was another reminder 
that we had another crash, lost some airmen, and it just seems 
to me that on the planes that it makes sense to, we ought to 
get TCAS and ground proximity warning systems, the other safety 
devices that are widely used in the commercial arena, they 
ought to be put on these planes as quickly as possible, and I 
am told that the 5-year program for at least TCAS and E-GPWS, 
the ground proximity warning system, won't get us there. Is 
that accurate?
    General Muellner. I don't believe it is accurate, sir, and 
as the Chief told you, certainly because of the accident off of 
Africa, a lot of additional attention has been paid to 
accelerating that to the degree we can.
    I would like to correct, I guess, a couple of things that 
you may have seen on the 60 Minutes show. I guarantee you, none 
of the airlines that I talked to, and I talk to most of them 
daily, or at least weekly, paid $50,000. They wish they could. 
We are all looking for that vendor, whoever it is, that has 
this $50,000 TCAS. Most of the airlines pay about $200,000 on 
aircraft for the boxes, plus installation, which is about what 
we are paying for. Our boxes are a little bit more expensive 
because we have some combat modes, in the IFF system, 
Identification Friend or Foe, they do not have, and ours have 
to be night vision goggle compatible on some of our airplanes. 
But other than that, it is noise level as far as the cost of 
installation.
    I think as the Chief and Secretary talked about this 
morning, we have accelerated the program. For instance, the C-
17, which does not now have it, because it was designed before 
that was either a requirement or even really available. By 
2002, all of the C-17s either, coming off the production line 
or through retrofit, will be fully equipped with TCAS and with 
the other safety modifications. We are concentrating on our 
passenger carrying fleet up front. I can tell you that the 
ground proximity warning system from an Air Force perspective 
is going to be much more of a lifesaver than TCAS is. History 
shows that mid-airs that could have been prevented by TCAS are 
very rare, very rare in the case of military aircraft. Most of 
our mid-airs occur in close-in combat training and TCAS is not 
functional in that mode.
    But we agree with you. We are pushing hard as a result of 
the initiative that Secretary Perry put in place following the 
terrible accident with the CT-43, and I think you will find 
that the TCAS schedule I think is pretty aggressive.
    Mr. Dicks. Thank you, Mr. Chairman.
    Mr. Young. Mr. Hobson.

                 JOINT AIR-TO-SURFACE STANDOFF MISSILE

    Mr. Hobson. General, nice to see you again. I hope you are 
going to be around for a while, too. It worries me.
    Let me ask some questions real fast. I want to talk about 
JASSM replacing the old TSSAM program which experienced 
significant cost growth. Some people say it was $1 million a 
copy, and before you canceled the program for a total program, 
$4 billion. The question is, will JASSM be different? Number 2, 
can't SLAM-ER do the job? Can you explain, sir?
    General Muellner. Well, sir, the first thing is when we 
canceled, TSSAM, it is actually $1.3 million a copy, which is 
the reason we canceled that down at ACC or TAC at the time.
    I think there is a big difference between the two programs. 
One is, we had at one point in time 7 different variants of 
TSSAM that at that time Northrop was being forced to build for 
the various services. The certification requirements across a 
wide fleet of airplanes was very demanding. The end result of 
that is that they ran into an unexecutable program.
    I think that the big difference between that program and 
JASSM is that one, we have had aggressive competition. We had 
requirements that were open for negotiation by the contractor 
in order to effectively balance the weapons characteristics as 
far as range, kill effectiveness, carriage capabilities as far 
as low-downs and the survivability against the costs. They 
fully understood that from the very beginning, cost truly was 
one of the decisions variables that would be used, and that 
really wasn't the case previously in the case of the TSSAM.
    The JASSM AOA that is going on right now I think is going 
to do a good job of really quantifying what the cost of the 2 
systems are, and equally important, what their effectiveness 
is. Right now, based upon what I have seen, and admittedly I 
have not seen the final AOA, which won't be out for about a 
month, I think your are going to find that JASSM is going to be 
radically changed. Both of the contractors, by the way, for 
JASSM right now say they have enough confidence in their system 
that they are willing to come in, not with a cost of the 
weapons system, but with a price of the weapons system. And 
they are talking 15- and 20-year warranties, no questions 
asked. It is going to be very, very difficult for us to not 
look favorably, I think, on those.

                       AIR FORCE VISION FOR SPACE

    Mr. Hobson. One more question.
    The Air Force needs to become the air and space force. 
Space is the wave of the future and control thereof is 
essential to military operations. I am going to run through 
about 4 questions here and then you can answer them.
    One, what is your future space vision? Two, does this run 
afoul of the arms control community which may oppose 
modernization in space? Three, will Congress see a shift in the 
science and technology budget in support of the Air Force space 
division, and when? And where, from my perspective, where will 
this be done?
    The military space plane was one of the programs eliminated 
when the President used his line-item veto on the fiscal year 
1998 Defense Appropriations Act. The research involves studying 
a space vehicle that operates like an airplane. Some say that 
DOD wants this system and it was line-item vetoed just for the 
arms control advocates. Others say DOD does not want the 
system, as it is not in the future years' defense plan. What is 
the true story?
    General Muellner. I guess as far as the long-term vision, 
we clearly are focused on the seamless transition in this 
aerospace environment. Where it makes sense, we want to migrate 
missions to space. Examples I think right now are the ISR area, 
surveillance reconnaissance in particular, where space gives 
you the access and gives you the persistence, and hopefully a 
lower cost from the standpoint of operations. So we are clearly 
moving in that direction.
    To jump ahead, if you look at our S&T budget this year, you 
will find that one area that went up when most of the others 
went down was space. You have already seen that migration. You 
are going to see an even more aggressive migration to that next 
year. So I think we are speaking with our pocketbook, if you 
will.
    I think the vision that we have for the future, the key 
areas, I don't think you have to press the arms control. If I 
just take a program that is very enthusiastically supported by 
some of your colleagues on the other side of the Hill is the 
Space-Based Laser. Us demonstrating the technology to find out 
that there is a need for a viable approach we can do within the 
existing treaties. I know of no treaty implications for the 
space maneuver vehicle, for instance, which we wanted to 
pursue. Our residency in pursuing this single stage-to-orbit 
approach is a number of years ago the decision was made that we 
would focus on expendables and NASA would focus on the reusable 
space station and we have been pursuing that strategy. Clearly, 
if you look at the Air Force Space Command Master Plan, a space 
maneuver vehicle, a space operations vehicle, is the linchpin 
of an awful lot of what they want to do.
    At some point in the future, however, we are going to have 
to take on some of these treaties. Clearly, there is concern of 
satellite protection in the outyears, and we need to understand 
how we are going to deal with that. We have not encountered 
that yet and clearly it is on the horizon.
    Mr. Hobson. Where do you see most of this space technology 
money being spent?
    General Muellner. Sir, I think it is split. Propulsion 
technology will probably be done through the propulsion lab. A 
lot of the other technology work will be done out at the 
Phillips Lab out at Kirtland Air Force Base. Propulsion, of 
course, that part of it is Wright-Patterson, continues to do 
the hypersonics and those kinds of things.
    Mr. Hobson. Thank you, Mr. Chairman.
    Mr. Young. Mr. Visclosky.

                              SPACE LAUNCH

    Mr. Visclosky. Thank you, Mr. Chairman.
    General, I would like to ask you about the EELV program. I 
talked to the Secretary and the General this morning about it. 
My understanding is you set aside $500 million per contractor?
    General Muellner. That is correct.
    Mr. Visclosky. Could you just fill me in as to how you got 
to this point and where we are in the program?
    General Muellner. Yes, sir, I would be glad to. Our 
original process was going to lead to a down-select to a single 
contractor for the EMD phase. What happened was as we started 
to look at the national mission model for launch requirements 
in the outyears, and we started to get approached by users of 
launch; i.e., those people like Motorola and the others that 
use launch. It was clear that the mission model was growing 
very rapidly, and it looked like it would better support a 
competitive environment in the outyears in order to keep U.S. 
launch access costs down, and at the same time, make it most 
competitive in the world environment.
    After we had come to that conclusion, reinforced by our 
space architects looking, we met with the contractors and at 
that point made the determination to carry both of the 
contractors. The agreement we came to was that there were 
clearly some military requirements in the outyears, payload 
interfaces and other things like that, that we had to ensure 
were going to be captured in the vehicles they designed. At the 
same time, they needed to be able to chase the commercial 
launch requirements. So the compromise we came to was to carry 
them both in the EMD, protect our interests with the $500 
million of investment, and then hopefully, end up with 
something that is commercially a very viable product that has 
that 25 to 50 percent reduction in launch access cost.
    Mr. Visclosky. As far as the scope of work for the $500 
million, is everybody on board and is there a clear 
understanding as to what that scope of work is going to be for 
the contractor?
    General Muellner. I think from a philosophical standpoint, 
that is true. I don't think they worked out the entire work 
breakdown structure with both contractors. They are going to be 
doing that over the next 6 months. My Program Executive 
Officer, PEO that works that has met Art Money, who was the 
acquisition executive up until 2 weeks ago, has met with both 
the contractors. I think we generally have agreement.
    Each contractor is coming at this differently. One of them 
has a segment of the market captured right now, and the other 
one--and I might add, at a less--at a reducing degree of 
competitiveness, which is the reason they want to pursue that 
part even more. The other one wants to go after the full 
market. So I think the closure on the work breakdown structure 
is going to be what will occur over the next 6 months, but I am 
optimistic that is going to work well.
    Mr. Visclosky. You had some reprogramming, I think it is 
about $7.5 million in the program for 1998. In your budget 
request, do you anticipate any problems for 1999 from a 
budgetary standpoint?
    General Muellner. We may come in and request a 
reprogramming as we sort it out, because as I mentioned to you 
earlier, as a result of us trying to balance out the 1998 bills 
that came back to us, that could drive us to a reprogramming, 
but I don't think it will be a large number.
    Mr. Visclosky. General, last point on this issue. My 
understanding is that you launch from 2 different locations.
    General Muellner. That is correct?
    Mr. Visclosky. Is there any anticipation that that number 
might be reduced to have one site?
    General Muellner. Not at the moment. We are looking at 
bringing in more commercial content. As you know, out at 
Vandenberg we have already commercialized one of the launch 
pads. There is a commercial operator there. There are people 
that want to do that also at Patrick, but at the moment, we are 
going to retain both of those. We are shutting down launch 
capabilities for certain types of systems sequentially at one 
or the other locations.
    Mr. Visclosky. To save some of your money.
    General Muellner. Titan, for instance. When we get down to 
a reduced number of titan launches required, and as EELV stands 
up, we will draw down one post before the other.
    Mr. Visclosky. Thank you, Mr. Chairman.
    Mr. Young. Mr. Nethercutt.

                       YEAR 2000 COMPUTER PROBLEM

    Mr. Nethercutt. Thank you, Mr. Chairman. Welcome, General.
    Sir, I want to talk to you briefly about the year 2000, Y2K 
problem. The GAO recently completed a report about the Air 
Force with some findings that I assume you folks have looked at 
carefully.
    General Muellner. Yes, sir.
    Mr. Nethercutt. What changes have you implemented in 
response to the GAO report?
    General Muellner. Well, we have done a number of things. In 
all honesty, the Air Force has been pretty aggressive about 
chasing the Y2K problem. All of our weapons systems have been 
catalogued in this new package that OSD has, and for some time. 
They talk about 4 categories starting with identification all 
the way through full compliance in the Y2K issue.
    Right now, the distribution of our system shows that the 
vast majority of our systems are fully implemented. Better than 
50 percent are fully implemented. When I add those that are in 
validation for implementation, about 70 percent of them have 
already had validation of the fixes that are in place there.
    Of our mission-critical systems, again, the vast majority 
of those are in validation and implementation. We only have, as 
of today, only 3 systems, and these are primarily maintenance 
information systems, that are just in the first phase. Those 
are driven by the fact that they have a lot of COTS software in 
them, and we have had some difficulty in dealing with those.
    Mr. Nethercutt. I am informed that as of September last 
year, about 33 percent of your systems had not been assessed. I 
take it from your testimony that all that has been completed 
now, with the small exception that you mentioned?
    General Muellner. Sir, out of 3,407 systems, I only have 2 
that have not been through assessment.
    Mr. Nethercutt. Do you have enough money to do it? What's 
your cost estimate?
    General Muellner. Our cost estimate for all of these fixes 
today is probably somewhere around $900 million. We have enough 
money to do it because in each one of our programs we 
established this as a top priority for them to deal with from 
the standpoint of software. So as a result of that, other 
software activities, like program upgrades or what have you 
have been moved to the right in order to ensure that this is at 
the top.
    Mr. Nethercutt. In your process of assessment and follow 
on, have you gone through any testing to see to what extent 
they are in compliance or will be in compliance?
    General Muellner. Oh, yes, sir.
    Mr. Nethercutt. That is all part of the process?
    General Muellner. One of the five phases is validation, and 
so we verify the fixes and then implement them, and then after 
we have implemented them system-wide, we do a system-to-system 
test. For instance, Cheyenne Mountain is obviously a critical 
area.

                         AIRBORNE LASER PROGRAM

    Mr. Nethercutt. Let me switch quickly in my time left to 
the Airborne Laser. I strongly support that program, and I have 
been concerned about some recent press accounts about the 
potential problems of atmospheric distortion of the laser beam. 
I understand that since the initial GAO report on this subject, 
the atmospheric data collection program has revealed that 
turbulence problems are no longer a significant concern.
    Could you state for the record what this data tells us 
about the atmosphere in Southwest Asia and Korea relative to 
the ABL?
    General Muellner. Yes, sir, absolutely. As you said, we 
collected data over Southwest Asia and also over Korea. We 
collected both through balloons and also through a series of 
airplane flights over there. In fact, just yesterday, they got 
back from their last excursion into Bahrain where they were 
flying. What it showed is that the model we have for the 
atmosphere, if anything, is a little bit pessimistic. That is 
especially true in the Southwest Asia scenario. In the Korean 
scenario, it turned out to be about right.
    The measure of merit that they use for that turbulence is 
one or two times something called clear, and in reality, our 
design point for the system is clear 1, but we spec'd it to 
clear 2, which says turbulence twice as severe. What they are 
finding is that our assessment of what is either clear 1 or 
clear 2 was almost directly on the model that they have to 
date.
    So I think that, coupled with the understanding of the 
atmospheric correction to the adaptive optics, and for those 
who haven't been down to Kirtland or Star, if you ever get the 
change to do it, I would highly recommend it to you. Adaptive 
optics are wondrous things, especially if you are an 
astronomer. But what that shows is we can clearly correct that, 
because we understand it.
    Mr. Nethercutt. You still have confidence in this program 
and want it to move forward?
    General Muellner. Absolutely, sir. In fact, we had a 
program review yesterday with the OSD staff. We had 4 
demonstration criteria to move on to the next phase. Two of 
those have been satisfied, and the other two will be completed 
by June of this year.
    Mr. Nethercutt. Thank you very much for your testimony and 
your service.

                            COMPUTER ATTACKS

    Mr. Young. General Muellner, quite a few years ago, more 
than I would like to admit, we began becoming so dependent on 
our computers. One of my major concerns that I express 
oftentimes in this Committee and in other committees is that I 
was afraid those computers might not be as secure as we would 
like to think they are.
    Last week, Deputy Defense Secretary John Hamre announced 
that the DOD had suffered the most organized and systematic 
attack ever to its computer networks.
    Let me read off a couple of questions and if you would just 
respond to them generally. Were the Air Force computer networks 
attacked? If so, which systems were attacked? Were they 
successfully penetrated? If the hackers got into the system, 
what did they do? Did they damage or manipulate data, or did 
they merely obtain the capability to damage or manipulate data 
and simply choose not to use it?
    General Muellner. ------. Interestingly, in almost all but 
one case, we detected it, because all our bases, ------ have a 
detection system in place called ASIM. That is the one I think 
Secretary Hamre referred to. ------.
    Mr. Young. Well, one of the questions in my mind was, was 
this a red team exercise, but obviously from what you said it 
was not.
    General Muellner. No, sir, it was clearly not. I guarantee 
you there was a lot of activity, and as you also know from the 
Secretary's comments, ------. The difference is we have the 
security incident measurement device in place, the ASIM device, 
which allows us to know when they are being attacked whereas --
----. They are now, though.
    Mr. Young. General, what are the legal and policy issues 
that have to be resolved to facilitate a more aggressive 
protection of these networks?
    General Muellner. Well, I think there are a couple of 
issues, and clearly the FBI has been the lead agency working 
that. We have several efforts going right now with information 
ops-related activities with the FBI and with Department of 
Justice, but obviously, when you get into the 4th Amendment 
rights and that, that is an area that we obviously have to 
protect.
    But the primary area is the ability to trace them back and 
then hold them accountable. As you said with your earlier 
question, if all they do is penetrate and look around and don't 
do anything, then it is not clear that a crime has been 
performed. So there are certainly some issues there that have 
to be resolved as far as is trespassing a crime ------.
    Mr. Young. Can they do this to your classified systems?
    General Muellner. We hope not. They certainly have not been 
able to do that as of yet. We have not had any penetrations. 
The closest I think we have had to having one of those systems 
at risk was when there was an unauthorized linkage in the field 
between a classified and unclassified network. Right now, we 
have what we generally call air gaps or tennis shoe separation 
between them; i.e., the only way to take something from one 
classified network to an unclassified network is through a 
human intervening and physically doing it. So we think that 
protection is still holding. We have not had any classified 
penetrations that I am aware of.
    Mr. Young. Well, keep us advised as to whether or not these 
gentlemen, or whoever they are, male or female, if they decide 
to sign up with you. We would just be curious.
    General Muellner. Will do, sir.
    Mr. Young. Mr. Dicks.

                            MISSION PLANNING

    Mr. Dicks. Thank you, Mr. Chairman.
    In our discussions this morning with the Chief, one system 
came up for some criticism, and that is the Air Force Mission 
Support System. Now, this is developing a common mission 
planning system for all Air Force forces. The Committee 
understands that there have been numerous complaints by the 
user community that AFMSS is slow and difficult to use. For 
example, it currently takes 30 hours to plan a single mission 
for the B-2.
    What is being done to address the complaints in the user 
community?
    General Muellner. Well, I certainly resonate with those.
    Mr. Dicks. And who builds this system?
    General Muellner. The system is built by, or is 
orchestrated, if you will, because there are many components to 
it, but the system is built by Lockheed Sanders, and that 
system has indeed been brought under a lot of pressure by the 
bomber force, but also by the fighters to some degree also.
    I might add that the resident system on the B-2 takes 36 
hours in planning a mission, so AFMSS is actually working it 
down. That is the previous SIOP-based system. Right now, the 
objective for AFMSS with our block 1.5 release, which will 
probably be next year, is to get that 3, 2-to-3 day activity 
down to 8 hours per mission. The end objective, which is a 
result of conventional planning, is that the system will be 
able to mission plan a 16-bomb, relative GPS-delivered weapon 
scenario in no more than 8 hours for a combat mission and 4 
hours for a training mission where route planning is not 
critical.
    Now, the problems they have had with it have not 
necessarily been hardware problems; they have been based upon 
the complexity of the software. To begin with, it uses an LO 
auto router. If you are familiar with the ELVIRA system that we 
had for the F-117 during Desert Storm, you will recall that 
that was not built for the type of surge activities that we 
historically employ in our airplanes and we had major problems 
with it. The big part of it for LO airplanes is this management 
of the signature with a change in threat database, and that is 
one of the things that drives the long time on it.
    So the short answer is planning time for combat missions 
will go to 8 hours and hopefully 4 hours for training missions.
    Mr. Dicks. You are saying by the end of 1999?
    General Muellner. 1999, that is correct.
    Mr. Dicks. Apparently there will be some difference in the 
Block 30s and the Block 20s?
    General Muellner. They use different mission planning.
    Mr. Dicks. But apparently the Block 20 works better than 
the Block 30.
    General Muellner. Well, Tom Goslins' quote to me was that 
the Block 20 system, which is the Strategic Mission Data 
Preparation System, SMPDS, which is the Single Integrated 
Operational Plan, SIOP-based system, if you will, primarily 
designed for the nuclear side, right now takes 36 hours, 
according to the wings assessment, to plan a mission. My cut at 
the Air Force Mission Support System, AFMSS for the Block 30s, 
it actually takes 48 hours to plan that mission, although they 
say it is coming down to 30 hours.
    So the answer is they are two separate systems, they are 
not related. One is a legacy system that is really a spin-off 
from the system that was in place out at STRATCOM, and it was 
just a transition until AFMSS got on board. Because the AFMSS 
LO auto router, a common auto router, was not available when 
the Block 20s were fueled.
    Mr. Dicks. But what I don't understand is why doesn't this 
system work? What is wrong with it?
    General Muellner. It does work, it is just very slow.
    Mr. Dicks. Why is it slow?
    General Muellner. The reason it is slow is because if you 
lay out a threat database, especially one associated say with 
the SIOP, where you are penetrating amongst a lot of corridors 
and that, this system has to find you the optimum route to 
manage your signature through all of those things. Just like we 
found with ELVIRA. ELVIRA, when I started with the 117 program, 
it used to take us 2 days to plan a route for an airplane that 
could only stay airborne for a coupe of hours, not one that 
could fly as far as B-2.
    So the end result is that a long time is required for the 
mission planning to effectively manage the signature, manage 
the delivery of these 16 bombs, and individual targets and 
that.
    Mr. Dicks. Were we able to improve the F-117s?
    General Muellner. Yes, sir. We got it down to probably in 
the order of 6 hours per mission.
    Mr. Dicks. How do you rate the chance of fixing this system 
and making it fit into the 8 hours and then the 4 hours?
    General Muellner. I rate it very good. I rate it good for 2 
reasons. Why is that? We will be using the same auto router 
that the 117 uses and obviously the B-2 will use. So as a 
result of that, you will have the synergy between the 2 of 
them.
    The other part of it is that Lockheed Sanders has invested 
quite a bit in this. We have been working with the Navy, and we 
are going to migrate this system--I might add, the Navy has the 
same problem with their Tactical Automated Mission Planning 
System, TAMPS, and we are migrating the two systems together 
here just past the turn of the century. So I think the problem 
is going to get fixed. It is not going to get fixed, though, 
for at least a year-and-a-half.
    Mr. Dicks. Thank you.
    Mr. Young. Mr. Visclosky.

                      REENGINING OF LARGE AIRCRAFT

    Mr. Visclosky. Just one more question, Mr. Chairman, if I 
could.
    General, apparently the Air Force is undergoing a reengine 
study for the larger aircraft. Are there any preliminary 
conclusions as far as the study that you might share with us?
    General Muellner. I think the key ones that jump out are 
that, one, the option space they are looking at has everything 
from new engines to consolidating on a single family of engines 
across a lot of these airplanes like AWACS, Joint STARS and so 
on.
    The other part of it is that when we early on looked at 
reengining the B-52s, the limiting factor in leasing these 
engines powered by the hour, as the airlines do, were twofold. 
One is the indemnification over loss of the system. Obviously, 
providing insurance for that, if you will, which is what the 
commercial operators do, is going to be difficult for us, given 
that we are going to put these things at risk, intentionally.
    The other part of it is termination liability. What happens 
if we go out and reengine all of the B-52s with a 30-year lease 
option and next year the decision is made to retire them all. 
Obviously, some engine manufacturer has a lot of investment 
there which he is going to want to recover.
    And so in both of those cases, even when we looked at it 
for leasing the airplanes and support DV activities out at 
the--the ones that you all fly and that the Cabinet members fly 
out there with these commercial 757s we just bought, we found 
that the leasing, this was going to be very, very difficult and 
economically didn't work out well.
    They are still struggling with that. At least the 2 engine 
contractors have come in with a very, very attractive offer 
that would totally rule out the termination liability, because 
the engine they would use is so commercially in demand that 
they could easily absorb them back into the commercial pool, if 
that would become necessary. So there are some options opening 
up as a result of industry really taking a hard look. We still 
have the indemnification issue, though, that we are going to 
have to sort out.
    Mr. Visclosky. General, thank you very much.
    Thank you, Mr. Chairman.

                          BOEING 757 AIRCRAFT

    Mr. Young. General, do we have any of the 757s in our 
possession yet?
    General Muellner. Sir, you will get the first of them the 
end of March, the second one in April, and the other 2 the 
latter part of the year. The first has already flown. It is 
over being outfitted internally and will enter the flight test 
program. We were the lead customer for putting GPS on the 757, 
hard to believe at this late date, but as a result of that, 
they need to use our airplane for FAA certification 
integration. But the end of March, end of April, and then the 
end of the year for the other 2.
    Mr. Young. Which airplanes are you going to retire from the 
fleet as these 757s come on board?
    General Muellner. Some of these old what we call the VC-137 
airplane. We will only end up with one of those continuing for 
several years.
    Mr. Young. Well, general, thanks very much for an 
interesting hearing. We appreciate your responses to our 
questions.
    The Committee will adjourn now until 9:30 a.m. next 
Wednesday, when we will in closed session be hearing from the 
DCI on the 1999 intelligence budget.
    The Committee is adjourned.
    [Clerk's note: Question submitted by Mr. Lewis and the 
answers thereto follow:]

                 Predator Unmanned Aerial Vehicle (UAV)

    Question. The operational performance of the Predator Unmanned 
Aerial Vehicle (UAV) supporting NATO and US operations in Bosnia is 
impressive in all respects. The Predator UAV continues to be the only 
operational endurance UAV available to support Defense Department 
tactical intelligence requirements. With increasing frequency, the 
Department of Defense is deploying Predator systems for worldwide 
contingency missions. With other endurance UAV systems not operational 
for several years and the Services' difficulty in fielding a tactical 
UAV system, the committee is convinced that the Department should 
exploit the operational success of the Predator UAV system. The Air 
Force procurement plan only envisions a total purchase of 12 Predator 
systems through the Future Year Defense Plan. With the increased demand 
for Predator tactical surveillance support and a limited number of 
Predator systems funded, the Committee feels additional Predators 
should be purchased to field worldwide requirements. What is the 
Department's plan for acquiring additional Predator systems? What can 
the Committee do to help?
    Answer. The Air Force is procuring its entire Intelligence, 
Surveillance, and Reconnaissance (ISR) requirement for Predator 
systems. The Predator Operational Requirements Document (ORD), 
validated by the Joint Requirements Oversight Council (JROC), set the 
requirement for two Major Theater Wars (MTW) at twelve systems. This 
will provide five systems for each MTW, one training system, and one 
RDT&E system. There are no plans to procure additional complete systems 
at this time. We are procuring, in the fiscal year 1999 President's 
Budget, sufficient attrition air vehicles to maintain our required 
capability, and will continue to address this in subsequent budgets. 
Currently, there is one partial system deployed to the European 
theater. As we gain operational experience with Predator, and as we 
evaluate additional UAV mission requirements, we will assess our need 
for additional systems.

    [Clerk's note: End of question submitted by Mr. Lewis. 
Questions submitted by Mr. Visclosky and the answers thereto 
follow:]

                             F-22 Aircraft

    Question. My understanding is that the F-22 does not contain an 
active jammer and no plans are being made to include IDECM in the 
electronic warfare suite. Could you talk about why this platform should 
not have an active jammer?
    Answer. The F-22 tailors available Electronic Warfare (EW) 
technology, radio frequency (RF), infrared (IR), sensors, etc., 
appropriately to its low observable (LO) signature, supercruise, and 
agility to increase its survivability.

                         Incorporating Jammers

    Question. I have heard reports in the media recently about the 
unreliability of LO capabilities on the B-2. Shouldn't we be 
incorporating active jammers into all of our platforms given the 
possibility that someday our LO capabilities could be compromised by 
new threats?
    Answer. No, operational use of an active jammer on low observable 
aircraft would serve to highlight the presence of the aircraft which is 
counter to the objective of a low observable design--reducing the 
radar, acoustic, visual, and electronic signature of the aircraft. If 
jamming is needed at a future date, other operational options, such as 
packaging the aircraft with a jamming aircraft, would be available to 
the operational planner to achieve the mission objectives.

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

                              Joint STARS

    Question. The budget this year reflects a reduction to the Joint 
STARS total procurement objective from 19 to 13. The last two aircraft 
are funded in fiscal year 1999 with no advance procurement for follow-
on buys. Secretary Cohen wrote to several Members of Congress 
indicating that he believed the requirements for Joint STARS aircraft 
should be reassessed. General Muellner, what is the status of the Joint 
STARS review within DOD and when can we expect an answer?
    Answer. The DOD is conducting reviews of requirements and technical 
alternatives to form choices about the overall architecture of DOD's 
airborne surveillance capabilities. The DOD is evaluating Joint STARS 
along with other surveillance systems and approaches to ensure dominant 
awareness of the battlefield. The review will be completed in early 
summer.
    Question. When must a decision be in hand an action taken to 
prevent an adverse impact to the production line?
    Answer. A decision on whether to stop or continue production is 
needed in the summer of 1998. A production shutdown will begin in 
November 98, which is when the 14th production aircraft would have been 
inducted into the production process.
    Question. Are there components bought in previous years based on an 
inventory requirement of 19 Joint STARS aircraft that are now excess to 
program requirements? If so, what are these components and what did 
they originally cost? What will be done with these components?
    Answer. Six used B707 airframes, purchased at a cost of $5 million 
each, are presently in storage, awaiting induction into the Joint STARS 
production program. These are excess to program requirements, given a 
production program of 13 E-8Cs. The Air Force has not yet determined 
the final disposition of these airframes. Procurement of these 
airframes was authorized and funded by the fiscal year 1995 Defense 
Appropriation Bill.
    Question. Last year, the Air Force budget assumed production of 19 
aircraft and no development of a radar technology insertion program 
(RTIP). This year, the budget deletes all but 13 aircraft and assumes 
development of RTIP. General, why is RTIP now a higher priority than 
aircraft quantities?
    Answer. The fiscal year 1999 President's Budget submission is 
consistent with recommendations in the QDR made by the Department 
during the fiscal year 1999 budget cycle. In addition to reducing the 
number of aircraft to 13, the QDR included a recommendation to invest 
in radar improvements for joint STARS. The Radar Technology Insertion 
Program (RTIP) is that radar improvement program.

                             F-22 Aircraft

    Question. The F-22 has recently experienced delays in the 
manufacture of test aircraft and development of software. General 
Muellner, please discuss the cause of these delays and their impact on 
the program.
    Answer. There are two manufacturing related problems causing test 
aircraft delays in the F-22 program: the manufacture of side-of-body 
components and aft fuselage booms. The delays resulted from a new side-
of-body casting technique and a new welding process which provides for 
a less expensive and more producible design to be used in the F-22 
production phase.
    The side-of-body issue is related to challenges in producing very 
large, high-quality titanium castings. Shrink voids are created when 
there is inadequate flow of liquid metal during the solidification 
process, and shell inclusions are produced when portions of the ceramic 
casting mold break off during the casting process and result in ceramic 
``inclusions'' in the metal structure. In the interim, the side-of-body 
casting design has been ``beefed up'' to provide adequate strength and 
durability to accommodate possible shell inclusions in areas where the 
inclusions cannot be removed or detected by conventional inspection and 
weld repair techniques. The solution is to redesign the mechanism which 
feeds liquid metal into the casting mold.
    The aft fuselage boom problem resulted from extra time needed to 
complete a unique titanium welding assembly process. This process, 
electron beam welding, is used to join aft boom titanium sections in 
order to save weight and cost and provide enhanced service life. 
Limitations in the welding jig as the parts are tack welded in place 
prior to final welding have resulted in extensive touch labor to adjust 
and shim the parts to maintain tight tolerances needed for electron 
beam welding. The contractors have made minor design revisions to 
reduce part variability and to simplify machining and fit-up. This 
problem is behind us.
    The net effect of these two problems is a delay in the delivery of 
test aircraft 3999 (static article) by 4.6 months; aircraft 4000 
(fatigue article) by 4.7 months; aircraft 4003 by 5.3 months; aircraft 
4004 by 5.5 months; aircraft 4005 by 2.7 months; and, aircraft 4006 by 
0.4 months. We have solutions in place for the manufacturing 
difficulties and will have a detailed EMD schedule recovery plan in 
place by May 98. There will be no impact to the IOT&E schedule and no 
delays in the production schedule.
    Question. Please discuss any other delays in the development 
program.
    Answer. No other delays exist. However, you may have heard of a 
stabilator debonding problem.
    Prior to shipping aircraft 4001 to Edwards Air Force Base, non-
destructive investigation of the horizontal stabilator identified a 
small defect in the aluminum honeycomb. The first two shipsets of 
stabilators (aircraft 4001 & 4002) have experienced two different 
process/design problems: ``Blown Core'' and ``Nodal Disbonding.''
    The first problem, ``Blown Core,'' is caused by expansion of 
moisture during the core bonding process. Repairs for this defect are 
complete on aircraft 4001, nearly complete on aircraft 4002, and 
corrective manufacturing processes are in place and will be proven out 
on aircraft 3999 (static article).
    The second problem, ``Nodal Disbonding,'' is caused by the mismatch 
of thermal expansion coefficients between the aluminum and composite 
materials during cool down in the manufacturing process. The corrective 
process includes replacing aluminum with composite materials. The 
repairs will be incorporated into aircraft 4002 during the 
manufacturing process. There will be no impact to aircraft 3999 and 
follow-on aircraft schedules.
    Question. For fiscal year 1999, the Air Force budget requests for 
the first time procurement funding for 2 F-22 aircraft. General 
Muellner, will the program be ready for production in fiscal year 1999?
    Answer. The Air Force has high confidence the F-22 program is ready 
for low rate production, as we are executing the production plan we 
briefed you last year.
    The F-22 program was established utilizing an event based 
philosophy. Exit criteria were established to ensure the program does 
not proceed before it is ready. The exist criteria for awarding the 
advance buy effort for Lot I have been achieved. We believe this is the 
appropriate time to move into production.
    The problems the program is currently experiencing are to be 
expected for a complex weapon system during the development phase. The 
program will work through these issues and make the improvements 
necessary to mature the design that meets Air Combat Command 
requirements.
    Question. One of the biggest concerns currently for the B-2 is the 
problem of low observable maintainability. What specifically is being 
done on the F-22 program to avoid or mitigate these problems 
experienced on older generation stealth aircraft?
    Answer. The F-22 is a fourth generation Low Observable (LO) 
aircraft that incorporated lessons learned from previous generation 
stealth aircraft to enhance its LO maintainability. The F-22 program is 
using gap treatment materials (instead of tape like the B-2) that are 
qualified at all flight conditions and environments. The program 
utilizes J-seals that do not require LO restoration after opening the 
most commonly accessed panels. Additionally, the use of Form-In-Place 
seals allows less frequently accessed panels to be opened without 
removing the gap material, thereby eliminating the need for LO 
restoration. Overall, 75 percent of all expected repairs on the F-22 
can be accomplished without the need for LO restoration.

                          B-1 Bomber Upgrades

    Question. What are the B-1's capabilities today in terms of 
available weapons and aircraft survivability?
    Answer. The B-1 weapon system is undergoing a metamorphosis from 
its originally designed nuclear role. Over the next decade we will 
continue the conversion of the B-1 into a highly capable conventional 
platform capable of superior lethality, with vastly improved 
survivability.
    The Conventional Mission Upgrade Program (CMUP) is a multi-phase 
modernization that began in 1993 with the addition of Cluster Bomb 
Units (CBU-87 Combined Effects Munition, CBU-89 Gator, and CBU-97 
Sensor Fused Weapon). In addition to this major block of critical 
``halt phase'' munitions, and the existing gravity bomb capability, 
CMUP added munitions for ``control of sea lanes,'' via the Mk-62 Naval 
mine. The current CMUP block upgrade integrates the Joint Direct Attack 
Munition (JDAM), and follow on blocks contain Wind Corrected Munitions 
Dispenser (WCMD) in 2001, and the Joint Stand-off Weapon (JSOW) and the 
Joint Air-to-Surface Standoff Munition (JASSM) in 2002. The direct 
attack, stand-off and precision munitions capabilities gained through 
CMUP contribute to the B-1 being the ``backbone'' of the Air Force's 
conventional bomber force.
    The same block of software that added the B-1's CBU capability 
implemented changes to the existing ALQ-161 Electronic Countermeasures 
suite by improving survivability in low-to-medium threat environments. 
Starting in 1999, the B-1 will employ with the ALE-50 Towed Decoy 
System improving survivability against radar directed surface-to-air 
missiles. The B-1's final CMUP modification is the Navy's Integrated 
Defensive Electronic Countermeasure (IDECM) system, and the ALR-56M 
Radar Warning Receiver which, starting in FY02, will replace much of 
the B-1's current ECM system increasing B-1 survivability against 2010 
threats.
    The B-1's carefully structured modernization improves every aspect 
of the B-1 program. CMUP improvements in reliability, maintainability, 
lethality, and survivability will result in increased firepower and 
flexibility to warfighting CINCs world wide.
    Question. How many B-1's are currently deployed to the Gulf region? 
What determined this number? Could more have been deployed?
    Answer. There are currently three B-1 aircraft deployed to the Gulf 
region as part of our Air Expeditionary Force (AEF). This number is 
capped by the limited amount of ramp space at the deployed location, 
and the limited number of suitable air bases. This is further impacted 
by other critical AEF assets that are also deployed to the same 
location; preventing increased numbers of bombers at the forward 
operating base.
    If the situation warranted an increased B-1 presence, the aircraft 
could be deployed to locations on the perimeter of the theater, or 
outside the Gulf region. The B-1, as with all of our bomber assets, can 
take advantage of its long range, and short response time by conducting 
operations from their home fields here in the CONUS.
    Question. Can JSOW be accelerated on the aircraft?
    Answer. The B-1 JSOW integration can be accelerated if funding from 
the Congressional reductions and inflation adjustments were to be 
restored. The maximum acceleration would be 3-6 months, which would 
accelerate the scheduled initial capability to 2nd quarter fiscal year 
2002 (earliest).
    Question. What are the Air Force's plans with regard to integrating 
Link-16 in the B-1?
    Answer. The Air Force plans to outfit all combat aircraft with Link 
16 as funding permits. However, Link 16 funding for bombers is 
currently not included in the FYDP. The Air Force is weighing all Link 
16 acceleration options in our 2000 POM submittal.
    As an initial step in determining data link requirements for bomber 
aircraft, the B-1 will demonstrate Link 16 capability in September 1998 
during the Expeditionary Forces Experiment, EFX-98. This demonstration 
was funded by a Fiscal Year 1997 Congressional plus-up for B-1 data 
link. the plus-up will equip two B-1 aircraft with Link 16 and Beyond-
Line-of-Sight (BLOS) data link capability for use during the 4-day EFX-
98 exercise.
    During this exercise, the B-1 will integrate into a network of 
other aircraft and ground stations with similar data link capabilities. 
Other aircraft involved in the exercise include JSTARS, AWACS, F-15s, 
and RIVET JOINT. Funding for the B-1's demonstration will also allow 
the two aircraft to retain the data link equipment for a period of one 
year. This one year period will be used to develop a bomber concept of 
operations for data link.

                          B-2 Bomber Upgrades

    Question. General Muellner, is the B-2 ready to use today? What are 
its current capabilities?
    Answer. The B-2 is ready and available to meet potential tasking at 
the request of the combatant CINC and with approval by the NCA We have 
9 operational B-2s at Whitman AFB today: 5 Block 20 aircraft and 4 
Block 30 aircraft. These aircraft are available for both conventional 
and Single Integrated Operational Plan (SIOP) taskings. The existing B-
2 force can employ a large variety of conventional or nuclear weapons 
against high value, heavily defended targets. For Block 20, current 
capabilities include 2,000 lb (GBU-36) and 5,000 lb (GBU-37) near-
precision weapons, B-83 and B-61 nuclear weapons, as well as MK-84 
general purpose bombs. Block 30 capability includes all Block 20 
weapons with JDAM replacing the interim GBU-36. In addition, Block 30 
adds MK-82 and M-117 general purpose, MK-62 naval mines, and CBU-87/89/
97 cluster munitions.
    Question. What are the Air Force's plans with regard to integrating 
Link-16 in the B-2?
    Answer. Air Combat Command is considering plans to make Line-16 
capabilities available on a limited number of B-2 aircraft as part of a 
``proof of concept'' effort pending release of the fiscal year 1998 
Aircraft Procurement funding. Adding Link-16 to the B-2s will 
complement the existing defensive management system in providing 
critical situational awareness for the aircrews.
    Question. Please update the Committee on the current status of low 
observable maintenance on the B-2 and the steps being taken to improve 
the situation.
    Answer. The Air Force is aggressively working to reduce LO 
maintenance requirements for the B-2. Positive results to date:
          80% reduction in the LO maintenance backlog on ACC's B-2 
        fleet following the deployment of a contractor augmentation 
        team to Whiteman AFB
          Development of an action plan to address: material 
        improvements and availability, technical data, support 
        equipment, improved designs, and LO repair and verification 
        tools
          Use of improved materials, designs, processes, and diagnostic 
        equipment to reduce LO maintenance requirements
          LO Combat Readiness (LOCR) Model is in place at Whiteman AFB, 
        providing the wing's leadership with the ability to prioritize 
        LO work requirements to maintain mission-ready fleet
    Question. What is required to make the B-2 deployable? When will it 
be deployable?
    Answer. The B-2 can currently be deployed to locations possessing 
facilities (temperature and humidity controls required) where Low 
Observable maintenance could be performed. To demonstrate this 
capability, the Air Force deployed 2 Block 30 B-2s to Andersen Air 
Force Base, Guam for 10 days. During this time, the B-2 demonstrated 
the ability to perform low observable maintenance both in a climate 
controlled hangar, as well as outside on a heat-baked and rain-soaked 
parking ramp. Air Combat Command is evaluating deployable shelters 
which would allow a package of B-2s to be deployed to a wider range of 
locations. We expect to be fully deployable by the B-2's full 
operational capability date in late fiscal year 1999.
    Question. Last year, Congress added funds to either restart B-2 
production or upgrade the aircraft's deployability, survivability, and 
maintainability. If the President were to decide not to restart 
production, what upgrades, at what cost, would you recommend we pursue 
with the additional funding?
    Answer. The Air Force plans to use $174.1 million to fund the B-2 
baseline program in accordance with the fiscal year 1998 President's 
budget. In addition, the Air Force plans to fund as many of the 
following Multi-Stage Improvement Program initiatives as possible with 
the additional funds.
                                                            FY98 Funding
                                                               \1\ REQ'D
High Frequency Maintenance Improvements.......................    $30.3M
Advanced Topcoat System.......................................     15.4M
Arrowhead Panel Tape Elimination..............................      8.3M
Multi Mode Beyond Line of Sight UHF Satcom Radio/Mission 
    Management Upgrade........................................     98.4M
LO Repair Verification Tools..................................      9.3M
LO Enhanced Tiles.............................................      3.9M
8" x 10" Center Instrument Display (CID)......................       52M
                    --------------------------------------------------------------
                    ____________________________________________________

    Total.....................................................    217.6M

\1\ Project estimates as of April 6, 1998.

    Question. The media recently reported that there is an ongoing 
debate within the Pentagon about using the B-2 in the event of a strike 
against Iraq. It has been reported that there is reluctance to use the 
B-2 because if it performed well, support for continued production 
would be bolstered and if it performed poorly, it might embarrass the 
Air Force given the cost of the aircraft. General Muellner, is there 
any truth to these reports? Are these the appropriate considerations 
for using a weapon in combat?
    Answer. Any decision to employ the B-2 is based solely on achieving 
national security goals. B-2s at Whiteman Air Force Base are available 
for tasking at the request of the combatant CINC and with approval by 
the NCA. The decision to request the B-2 to support a theater concept 
of operations is an operational decision made by the combatant CINC. 
The target allocation and assignment process used by the CINC optimizes 
target assignments with combat capabilities of available weapon 
systems. This process ensures our ability to achieve stated goals 
against a given target or set of targets.

                         Airborne Laser Program

    Question. We understand that the GAO, the Pentagon's Office for Net 
Assessment, and the Pentagon's Office for Program Analysis and 
Appraisal (PA&E) have reported serious deficiencies with the potential 
effectiveness of the Airborne Laser program. The Air Force is seeking 
$292 million in fiscal year 1999 to significantly ramp-up effort on 
this $11 billion program. General Muellner, can you outline the major 
concerns expressed to date by GAO, Office of Net Assessment, and PA&E 
and the Air Force's response to each?
    Answer. The GAO's concerns with ABL have been overcome by events 
and are no longer relevant. Office of Net Assessment's work is focused 
on Space-Based Laser (SBL) and should not be applied to ABL. PA&E's 
analysis of ABL performance is fundamentally flawed and underestimates 
ABL's effectiveness.
    (a) In the summer of 1997, the GAO took issue with the Air Force's 
method of measuring atmospheric turbulence. This method is non-optical, 
i.e., it measures air temperature variations which are convertible to 
optical turbulence values. The GAO expressed concern this method might 
not be as accurate as the more complex and expensive optical technique 
of passing a laser beam between two aircraft. Since ABL's turbulence 
design specification is based on non-optical measurements, the GAO 
warned that the specification may not be correct and ABL may be 
underdesigned. The Air Force has since rendered the GAO's concerns 
obsolete. Concurrent with the draft GAO report, released in late August 
1997, the Air Force demonstrated a correlation (i.e., equivalency) 
between non-optical and optical methods of measuring turbulence, thus 
validating the non-optical method. Unfortunately, this crucial fact was 
not incorporated into the final GAO report. Using the validated method, 
the Air Force has collected in Northeast Asia and Southwest Asia over 
five times the amount of turbulence data available at the time of the 
GAO investigation. Thus in-theater data base validates ABL's design 
specification--over 80% of the measured optical turbulence levels are 
equal to or more benign than ABL's design specification, as predicted 
when ABL's specification was set back in 1993-94.
    (b) BMDO and the Office of Net Assessment have co-sponsored three 
SBL Operational Concepts wargames since early fiscal year 1997, as part 
of Net Assessment's larger Revolution In Military Affairs study. These 
seminar-style wargames are explicitly intended to assess the 
capabilities and utility of SBL in future warfare; they are not a cost 
and operational effectiveness analysis of current or planned theater 
missile defense systems. The first wargame was a 2010 scenario against 
a large, peer nation. In it, restrictive rules essentially negated any 
ABL contribution to the blue force. The second wargame was a 2015 
scenario against a hostile regional state. This time ABL showed 
positive contributions to the blue force when operated as part of a 
multi-tiered theater missile defense architecture that included SBL. 
Although promising, these results would need backup by much more 
rigorous and quantitative simulations before they could be used to 
assess ABL's military effectiveness. The third and most recent wargame 
was held only last month and the results are still being analyzed.
    (c) PA&E produced a preliminary analysis of ABL's effectiveness in 
the fall of 1997. It purported to show ABL's performance will be poor, 
based on PA&E's belief that atmospheric turbulence levels in theaters 
of interest are routinely much higher than ABL's design specification. 
This PA&E analysis is fundamentally flawed. It is based on an extremely 
limited set of atmospheric turbulence data that was biased towards high 
turbulence when it was collected in 1995 as part of a narrowly focused 
scientific experiment. PA&E's analysis did not include any of the Air 
Force's 1997-98 Northeast Asia or Southwest Asia theater turbulence 
data. This latter data set is more than five times larger than what 
existed in November 96 when ABL went through Milestone I and 
overwhelmingly validates ABL's turbulence design specification. 
Furthermore, the PA&E analysis is simplistic and misleading, as it 
plays a single ABL against a single theater ballistic missile (TBM). It 
ignores the essential truth that ABL's performance must be viewed in 
the context of its role as a flexible ``team player'' in a multi-
tiered, theater missile defense Family of Systems architecture (i.e., 
attack ops, boost phase intercept, midcourse, and terminal systems). In 
that context, ABL's contribution has consistently been shown to be 
significant. Because of its dependence on a biased and very limited 
data set and its simplistic approach, PA&E's analysis grossly 
underestimates ABL's effectiveness.
    The bottom line is that ABL will be a viable system available to 
the CINCs to deploy and employ as a true deterrent to the use of TBMs 
and weapons of mass destruction.
    Question. General Muellner, please walk us through the operational 
concept for the Airborne Laser in terms of its positioning in altitude 
and location over the battlefield, the time required to detect a 
missile launch, to acquire the missile, to slew the laser to fire at 
the missile, to destroy the missile, and then to engage a separate 
missile.
    Answer. Given the unique aspects of fighting from the sky, the 
Airborne Laser provides a dynamic air superiority weapon system to the 
Theater CINC and Joint Forces Air Combat Commander (JFACC). The 
location and altitude of the Airborne Laser orbits will depend on a 
number of factors: threat TBM type and launch locations developed 
through Intelligence Preparations of the Battlefield; level of threat 
(imminent launch likely or low potential for launch), enemy firing 
doctrine, current state of air superiority/air supremacy; integrated 
Joint Theater Air and Missile Defense (JTAMD) Family of Systems (FoS) 
rules of engagement and areas of responsibility, location of allied 
defended assets, number of ABLs available in the theater, level of 
atmospheric turbulence, location of clouds and cloud heights, etc.
    In general, the ABL will be located under 90 km behind the Forward 
Line of Troops (FLOT), or the enemy defended border, outside SAM threat 
rings, at around 40,000 feet. As the level of blue force air 
superiority/air supermacy increase, the JFACC may choose to move the 
ABL orbits closer to the TBM launch locations.
    The point in the TBM's boost phase when ABL will acquire the target 
will vary depending on cloud height and range to target. The higher the 
clouds and the longer the range to the TB, the later in the boost phase 
ABL is able to acquire the target. Notional cloud break is about 40 
seconds after launch, assuming a rare cloud deck top at 38,500 ft. ----
-- the TBM is detected by the ABL surveillance sensors (360 deg. 
coverage). The surveillance sensors pass information to the Battle 
Management, Command, Control, Communications, Computers and 
Intelligence (BMC4I) suite. The BMC4I suite prioritizes the target(s), 
coordinates its engagement with the other ABL orbits, deconflicts ABL 
engagements with aircrafts and space assets, and directs the Beam 
Control/Fire Control (BC/FC) system to engage the highest priority TBM. 
Target prioritization is based upon a number of factors including 
current rules of engagement of the theater JTAMD FoS and the 
capabilities of the ABL. The time from initial detection to hand-off to 
(BC/FC) ------ slew the BC/FC nose-mounted turret to the target 
direction provided by the BMC4I suite. An infrared (IR) acquisition 
sensor located in the turret acquires the target. The TBM is centered 
in the acquisition sensor and passed to the plume tracker, a much 
narrower field-of-view IR sensor. The plume is centered in the plume 
tracker array and tracking information is passed to the BC/FC computer, 
which points the Tracking Illuminator Lasers (TILL) to illuminate the 
nose of the missile. The illuminated nose forms a beacon for ABL's fine 
tracking (i.e. precision tracking) system, which stabilizes the line of 
sight to the target by compensating for atmospheric beam jitter and 
residual jitter from aircraft vibrations. With the line of sight 
stabilized, the Beacon Illuminator Lasers (BILL) are fired at the 
target to create an atmospheric compensation beacon at the desired 
aimpoint for the weapon laser. The BILL's beacon is used by ABL's 
adaptive optics to adjust deformable mirrors in the high energy laser's 
path to compensate for atmospheric distortions to the weapon laser 
beam. Once the line-of-sight is stabilized and the atmospheric 
degradation compensated, the high energy, weapon laser is fired at the 
specified aimpoint. All of the above adjustments are being done 
hundreds of times a second. Lasing continues until the TBM kill has 
been verified, booster burnout occurs, or the BMC4I system determines 
that other targets should be engaged. Depending on range to the TBM and 
the level of atmospheric turbulence, ------ BMC4I suite passing a 
target to BC/FC through completion of kill assessment). In parallel to 
the engagement of the first TBM, the BMC4I suite continues to detect, 
track, and prioritize any other TBM targets, so that as soon as the 
first engagement is completed, the turret is slewed to begin the second 
engagement, etc.
    Question. What is the time window from the point as missile exists 
the cloud layer to the point it completes its boost phase.
    Answer. ------.
    Question. What is the highest altitude that clouds can be found?
    Answer. Clouds can occur at altitudes up to 50,000 ft. However, 
clouds are rare at or above the Airborne Laser's operational altitudes 
of 38,000-40,000 ft. On average, clouds will occur at ABL altitudes 5-
10% of the time in SWA and 20-25% in NEA. On these infrequent 
occasions, the Air Force's combatant operators will exercise the 
inherent flexibility of an airborne platform to shift ABL's combat air 
patrol orbits laterally or in altitude to compensate for the presence 
of clouds.
    Question. How many missiles is the Airborne Laser being designed to 
attack without refueling the laser chemicals?
    Answer. ABL can attack a notional 20-40 enemy theater ballistic 
missiles (TBMs) before exhausting its laser fuels magazine. The reason 
the classified size of ABL's magazine is not designed to support 
attacks on a specified number of TBM targets is a reflection of the 
fact that the time duration of any one missile engagement is very 
dependent on senario variables. The two most influential variables are 
the range to the TBM target and the strength of the atmospheric 
turbulence. The shorter the range and/or more benign the turbulence 
strength, the less time required for each engagement and hence the 
greater number of shots the magazine will support. The longer the range 
and/or higher the turbulence strength, the greater the amount of time 
required to achieve each TBM kill and the fewer shots supported by the 
magazine. In simulated wargames done to date, ABL rarely runs out of 
laser prior to mission termination.
    Question. If an enemy fires 30 SCUD missiles in a salvo 
(simultaneously), how many of the missiles can we expect the Airborne 
Laser to be able to destroy?
    Answer. We have not calculated ABL's performance against a 1 
second, 30 missile salvo. Additionally, meaningful answer is not 
possible without a specific TBM threat laydown and engagement scenario.
    Prior to Milestone I, set of Defense Intelligence Agency (DIA) 
approved scenarios were developed which include fairly stressing 
salvos. For example, the most intense day ------. Current DIA estimates 
state the highest number of Theater Ballistic Missiles that a country 
will be capable of salvo launching in the year 2006 is ------. This is 
largely bounded by the number of launchers an adversary has available. 
The ability for an adversary to coordinate a salvo so that all the TBMs 
are launched within 1 second is very remote if not impossible. The 
effects of theater blue force operations on the adversaries command and 
control network along with the increased vulnerability to all his 
exposed launchers to negation through attack operations during the set-
up/tear-down phase will affect the timing of the salvo launch, causing 
it to be spread out over tens of seconds or even minutes. Missiles or 
groups of missiles launched greater than 10 to 15 seconds apart are 
considered independent events by the ABL.
    Question. If the 30 missiles employ countermeasures like spinning 
or reflective coatings, how many missiles would the Airborne Laser be 
able to destroy?
    Answer. A salvo launch of theater ballistic missiles (TBM) 
employing countermeasures is obviously harder to handle than one 
without countermeasures. The exact number of hardened TBMs killed by 
ABL in such a salvo is impossible to quantify without a detailed 
specification of the enemy threat laydown, the engagement scenario 
conditions, and degree of effectiveness of the specific 
countermeasures.
    Although simplistic in concept, countermeasures to ABL, like 
spinning and reflective coatings, are very difficult to implement and 
will impact the desired range and accuracy of the TBM.
    a. SCUD-type TBMs are predicted to remain the most numerous threat 
missiles. SCUD-type missiles can't be made to spin without a complete 
redesign of their guidance systems, and potentially, their control 
surfaces. Furthermore, the speed of rotation is critical ------. 
Spinning is neither a trivial nor inexpensive modification.
    b. Coatings add weight to a TBM, thereby reducing range and/or 
payload. Given their harsh mission environment, they are difficult to 
apply consistently and effectively. Depending on a coating's upkeep in 
the field, it may have negligible impact on the amount of lase time 
required to kill the Theater Ballistic Missile (TBM).
    Question. A February 17, 1998 Defense Week opinion editorial by Mr. 
Angelo Codevilla States:
          ``* * * The assertion that the use of a high energy laser 
        aboard an aircraft firing horizontally, has been made possible 
        by recent discoveries in adaptive atmosphere-compensating 
        optics is nonsense. The airplane-laser combination is an old 
        Air Force fantasy. Airplanes are unstable platforms, and the 
        atmosphere is an inherently unpredictable medium * * * No 
        reputable scientist will stake his reputation on solubility of 
        this problem * * *.''
    Do you think Mr. Codevilla is correct in his assertion that this is 
a difficult scientific problem?
    Answer. No, Mr. Codevilla is incorrect--Airborne Laser does not 
suffer from scientific problems. On the contrary, we believe we have 
solved the science issues pertaining to the ABL program through twenty-
five years of technology investment by the Air Force, DARPA, SDIO, and 
BMDO in such areas as lasers, optics, airborne pointing and tracking, 
atmospheric physics, atmospheric compensation and adaptive optics, and 
laser lethality. ABL does face the engineering challenge of integrating 
a high energy laser and a sophisticated optical system into an 
airplane. This type of challenge is part and parcel of a program in the 
Program Definition and Risk Reduction (PDRR) acquisition phase.
    Question. How would you characterize the risks associated with the 
Airborne Laser?
    Answer. ABL is a moderate risk weapons development program; the 
risks are engineering in nature. The engineering challenges include 
such practical matters as light-weighting components, vibration 
isolation, electrical power consumption, thermal management, and 
achieving a proper aircraft center of gravity. None of these appear to 
be showstoppers as we prepare for the ABL Program Definition and Risk 
Reduction (PDRR) Preliminary Design Review in April 98.
    Question. Is it true the Air Force eliminated all atmospheric data 
collection in fiscal year 1999 and out in all theaters other than Near 
East Asia and South West Asia?
    Answer. Yes, funding cuts, levied during the Fiscal Year 1993-2003 
President's Budget process, forced the ABL program to delete all of its 
atmospheric data collection after fiscal year 1998 so as to preserve 
the development schedule and technical content of the ABL PDRR 
prototype. Some efforts in the atmospherics arena will continue under 
Air Force technology funding, however the Air Force believes the vast 
amount of data it has collected to date in Northeast Asia and Southwest 
Asia (over five times the amount available at Milestone I in November 
96) has sufficiently characterized the atmosphere for the PDRR ABL 
program. During the fiscal year 2000 budget cycle, we will review the 
program for possible payback.
    Question. It was recently reported in the media that the Chief of 
Staff named a special ``semi-independent'' panel to review the range of 
the Airborne Laser. Is this true? Please name the individuals on the 
panel, their technical backgrounds, and their professional 
affiliations. When will the results from the panel's review be 
available?
    Answer. Yes. Under the auspices of the Air Force Scientific 
Advisory Board (SAB), a team was impaneled to review the effects of 
atmospheric turbulence on ABL's range performance. The panel was led by 
Mr. Jack Welch, former Assistant Secretary of the Air Force for 
Acquisition, and included: Dr. Gene McCall (PhD in physics, an employee 
of Los Alamos National Lab and former head of the SAB), Dr. Walter Sooy 
(PhD in physics, a long time laser expert now retired from Lawrence 
Livermore National Lab), Dr. Daniel Murphy (PhD in Engineering and 
Applied Science, now with MIT Lincoln Lab's Laser and Sensor 
Applications Group), and Dr. Kenneth Fischer (PhD in Atmospheric and 
Space Sciences, now a research scientist with the Environmental 
Research Institute of Michigan). The panel concurred with the Air 
Force's current ABL range estimates. These findings were briefed to Air 
Force leadership in February 1998.
    Question. Currently, the sole mission for the Airborne Laser is 
ballistic missile defense with adjunct missions being ``studied.'' What 
is the status of these studies and when might other missions be 
incorporated as validated requirements for the weapon system? What are 
these other missions? What other U.S. platforms are anticipated to 
perform these missions?
    Answer. The adjunct mission studies are being conducted in three 
phases. A preliminary look was completed in fiscal year 1997, with more 
detailed efforts planned for fiscal year 1998 and fiscal year 1999 that 
will result in estimates of the cost effectiveness of the various 
adjunct missions. After Air Combat Command (ACC) reviews the results of 
these studies, they will decide which of the adjunct missions to accept 
as new ABL requirements, and begin programming (mid-fiscal year 1999) 
for additional funding necessary to incorporate the new requirements 
into the EMD and operational designs. No adjunct missions are planned 
for the PDRR ABL system. The adjunct missions currently being studied 
are: cruise missile defense, imaging surveillance (using ABL's optical 
system to image objects on the ground), protection of high value 
airborne assets (self-protection and protection of other HVAAs using 
the high energy laser), suppression of enemy air defenses (using the 
high energy laser to kill enemy air defense components on the ground), 
and post-boost tracking of TBMs. The Airborne Laser (ABL) is the only 
USAF platform in development that potentially could address all the 
adjunct missions. Similar adjunct studies would need to be performed 
for the Space Based Laser (SBL) readiness demonstrator that the Air 
Force is executing. Currently, the Air Force relies on a system of 
weapon systems to address these missions. The system includes air, 
space and ground C2 and weapon systems.''
    Question. Can the Airborne Laser destroy a missile before exiting 
the cloud layer or after completion of the boost phase? Does the 
capability to destroy the missile diminish before completion of the 
boost phase (based for example on lower missile fuel pressures near the 
end of boost)?
    Answer. The Airborne Laser (ABL) cannot destroy a missile before 
the missile exits the cloud layer. The laser beam is near infrared 
light and will not penetrate clouds. Rather, the beam would be 
absorbed, refracted or reflected away from the target. ABL can destroy 
missiles throughout the boost phase. ABL can target either the fuel 
tank or the oxidizer tank, and ABL's lethality mechanism causes 
catastrophic failure (i.e., burst) of either the TBM's fuel or oxidizer 
tanks. While some TBMs may exhibit a drop in their fuel tank pressure 
during the boost phase, the pressure in their oxidizer tanks appears to 
stay constant or even rise slight during boost. Tests to quantify these 
effects are planned for April 1998. The effects due to missile fuel and 
oxidizer tank pressure changes during boost phase are explicitly 
accounted for in the ABL lethality assessments and range estimations.
    It is unlikely that ABL would be able to destroy a missile after 
completion of the boost phase. ABL can physically lase a missile after 
its boost phase has been completed. However, since ABL targets the fuel 
and/or oxidizer tanks, which would have negligible internal pressure 
after completion of the boost phase, the probability of causing 
catastrophic failure of the missile drops tremendously. ABL can 
continue to track missiles past their boost phase and send valuable 
tracking reports, as well as missile impact point predictions, to other 
elements in the family of systems supporting terminal system missile 
intercepts.
    Question. How will the capability of the Airborne Laser to detect, 
track, and provide warning to other BMD systems compare to the 
projected capability of SBIRS?
    Answer. ABL and SBIRS are complementary systems that will give the 
theater warfighters the best possible information on Theater Ballistic 
Missiles (TBM) for improving attack operations, upper and lower tier 
engagement opportunities and passive defense responses.
    The sensor suite required by the Airborne Laser (ABL) to acquire 
and track boosting TBMs in its surveillance mode has inherent 
capabilities to provide launch point estimates (LPE), impact point 
predictions (IPP) and position and velocity information on boosting 
TBMs. Being a theater weapon, ABL can provide this localized capability 
when flying in support of theater operations.
    SBIRS, on the other hand, is envisioned to provide worldwide 
continuous missile warning coverage. SBIRS is designed to provide LPE, 
IPP (missile warning) and position and velocity information (missile 
defense) on all ballistic missiles throughout their flight profile 
(boost, midcourse and terminal). SBIRS' other missions are technical 
intelligence and battlespace characterization.
    Both SBIRS and ABL will provide data to theater users through Link-
16 and the Intelligence Broadcast System (currently TIBS/TDDS). ABL's 
boost phase TBM position and velocity information will be more accurate 
due to its active laser ranging capability, but SBIRS should provide 
this data throughout the complete missile profile.
    Question. Mr. Codevilla, in the same article cited earlier wrote, 
``Contentions that ABL could defend itself with its beam are similarly 
insincere because the Air Force knows that ABL would not have the 
energy to defend itself against surface to air missiles . . . and that 
it could not dogfight enemy fighters.'' Realistically, what is the 
system's self-defense capabilities against air-to-air ground-to-air 
threats?
    Answer. Defense of large aircraft using laser weapons was 
demonstrated first-hand in the Airborne Laser Laboratory (ALL) program, 
the forerunner of the current ABL program. During this program the ALL 
used its weapons laser and shot down five air-to-air missiles and one 
cruise missile. ABL will be operated like other high value airborne 
assets, with its orbits positioned so as to minimize the danger from 
enemy surface-to-air missiles and will be fielded with a self-defense 
suite (i.e., chaff, flares, ECM perhaps) to help reduce its 
vulnerability to enemy threats. In addition, ABL will share a fighter 
combat air patrol with other high value airborne assets and could 
retrograde to safety if necessary. Finally, ABL's self-defense 
capabilities against air-to-air and ground-to-air threats are being 
studied in depth in the current phase of the program and preliminary 
results suggest ABL's weapon laser will be lethal against SAMs and 
fighters out to several hundred kilometers. At those ranges, enemy 
fighters and SAMs are easily followed by the ABL's tracking system and 
can be engaged and destroyed if necessary.
    Question. What would be the per day cost of maintaining multiple 
Airborne Laser aircraft on 24 hour Combat Air Patrol (CAP) in a 
contingency? How many aircraft would be required for 24 hour CAP for 
Near East Asia and South West Asia contingencies?
    Answer. The cost per flying hour of the ABL (a 747-400) has not yet 
been defined as the program is still early in the Program Definition 
and Risk Reduction Phase. We expect to definitize our estimates of 
ABL's cost per flying hour in fiscal year 2001 at the Authority to 
Proceed (ATP)-2. As a result, we are unable to determine the cost of 
maintaining multiple ABL aircraft on 24 hour CAP at this time. We can, 
however, provide some very rudimentary insight concerning some known 
costs. Boeing has indicated the cost of the E-4B (a 747-200) is 
$35,000/hour. Air Combat Command has indicated that their cost per 
flying hour for the E-4B is $40,000.
    Five deployed ABL's will support two, 24-hour/day CAPs in a Near 
East Asia or South West Asia contingency.

                          Joint Strike Fighter

    Question. The Joint Strike Fighter program has been designated as a 
`'flagship'' program for the acquisition reform initiative known as 
Cost As an Independent Variable (CAIV). The purpose of Cost As an 
Independent Variable is to allow contractors and government to conduct 
trade-off analyses to determine which capabilities provide the best 
value. These trade-off analyses are critical to making future aircraft 
more affordable. Making Joint Strike Fighter affordable will require 
some sacrifices in capability. The Committee is concerned with the 
contractors, and perhaps some in the military, have not gotten this 
message and still believe that whoever has the most bells and whistles 
will win the contract. General Muellner, you were a former program 
manager for the Joint Strike Fighter program and you have since 
remained closely involved with the program. What can be done to ensure 
both the military users and contractors are committed to making this 
aircraft affordable?
    Answer. The warfighters and the contractors fully understand 
affordability is critical to the success of the program. The 
warfighter's have established cost goals in their users' requirement 
documents. The program acquisition plan stipulates contract award will 
be based on best value for cost, not how much performance you can get 
for the cost. Recently, the Program Manager and other senior DOD 
officials have spoken with the prime contractors and stressed the need 
to focus on providing acceptable performance at an affordable cost. 
This message is being constantly reinforced throughout the government. 
Ultimately, continuous interaction between the warfighters, 
contractors, and acquisition community in conducting cost and 
operational performance trades, with cost as a critical performance 
metric, will ensure the Services get the best aircraft for an 
affordable cost.
    Question. What trade-offs have been made in the projected 
capabilities of the Joint Strike Fighter based on the analysis 
performed to date?
    Answer. The JSF Operational Advisory Group, a team of operators and 
maintainers, has made and continues to make cost and operational 
performance trades. Two examples of major trades are the single-engine 
versus dual-engine and single-seat versus dual-seat cockpit. Other 
significant, though less noticeable trades include: reduced sustained 
and instantaneous G requirements, reduced acceleration requirement, and 
balanced aircraft radar signature with the concept of operations and 
electronic warfare capabilities.
    Question. The JASSM program is also a flagship program for Cost As 
an Independent Variable and the same two contractors involved in that 
program are also working on the Joint Strike Fighter program (Boeing 
and Lockheed Martin). However, with respect to the JASSM, one senior 
Air Force acquisition executive was recently quoted in the media as 
saying, ``We are not willing to settle for `good enough.' '' General, 
isn't ``good enough'' the whole point of Cost As an Independent 
Variable?
    Answer. No. The point of CAIV is ``best value''--making cost a 
major driver while providing enough performance to ensure operational 
effectiveness. This does not mean that in all cases we will drive 
performance to the minimum acceptable levels, particularly when costs 
can be reduced in other ways while maintaining a performance advantage. 
The quote, attributed to a senior Air Force acquisition executive, was 
taken out of context. The SLAM-ER program claimed it was ``good 
enough'' for the Air Force's use of the Navy's weapon. The AF comment 
stated we wouldn't settle for a ``good enough'' SLAM-ER when we can 
have JASSM at a cheaper unit cost and with better performance.
    Question. Is the Air Force sending the right message to the 
contractors when it is not willing to settle for ``good enough''?
    Answer. The AF is committed to an affordable JSF program. We are 
looking for acceptable performance at an affordable cost (price). The 
message to the contractors is they must use innovative manufacturing 
methods, take full advantage of commonality among aircraft variants and 
establish revolutionary business practices to reduce cost. Cost will 
not be achieved by trading performance along. Based on the results 
we're seeing in programs like JDAM, JASSM, and thus far on JSF, we are 
confident the contractors are getting the ``right message.''
    Question. Is the Air Force committed to Cost as an Independent 
Variable as an acquisition reform? How is the Air Force treating this 
concept differently from the previous acquisition strategy ``Design to 
Cost.''
    Answer. Yes, The Air Force is committed to CAIV. An example of this 
commitment is the inclusion of cost goals as performance requirements 
in the users' requirements document along with more traditional 
performance requirements such as range, payload, and speed. The 
difference between CAIV and ``Design to Cost;'' is CAIV focuses on 
balancing cost and operational effectiveness through early warfighter, 
industry, and program interaction during the requirements definition 
process. In fact, CAIV elevates cost to the status of a performance 
requirement. Using an iterative process called Cost and Operational 
Performance Trades, the Services are defining joint requirements that 
balance weapon system capability against life cycle cost. ``Design to 
Cost'' didn't involve trades; requirements drove design, validation and 
manufacturing. In addition, design to cost offered virtually no 
flexibility after operational requirements were set, typically early in 
the program.

                  Global Air Traffic Management (GATM)

    Question. The civilian aircraft sector is in the process of 
developing new aircraft standards that would allow more aircraft to 
travel through the best air corridors for transocean flights. Military 
aircraft lacking these new features will be unable to use the best air 
corridors, adding cost and time to every flight. General Muellner, 
please describe the modifications required to US military aircraft to 
be compliant with the developing GATM standards. Which aircraft are 
affected?
    Answer. The specific communication, navigation, and surveillance 
elements include: oceanic datalinks; VHF-AM voice that includes both 25 
and 8.33 kHz channel spacing; air/ground datalinks; required navigation 
performance (RNP) including a flight management system (FMS), 
integrated multi-sensor navigation systems capable of basic area 
navigation (BRNAV), and a precision area navigation (PRNAV) capability; 
precision landing systems (PLS) to accommodate protected instrument 
landing system (P-ILS), reduced vertical separation requirement (RVSM) 
equipage; secondary surveillance radar (SSR) transponders; airborne 
collision avoidance systems (ACAS), a.k.a. traffic alerting and 
collision avoidance system (TCAS); automatic dependent surveillance-
addressed (ADS-A); and automatic dependent surveillance-broadcast (ADS-
B).
    The near term emphasis within the Air Force is on the mobility 
forces required to airlift troops and material during the deployment 
phase of contingency or humanitarian operations. Mobility aircraft are 
the first affected by air traffic procedural upgrades. Eventually, all 
aircraft will be affected.
    Question. What would be the impact to military effectiveness if the 
US failed to implement these modifications in a timely manner?
    Answer. Noncompliance with new FAA and ICAO airspace restrictions 
impacts USTRANSCOM's ability to support the Defense Transportation 
System and the Warfighting CINCs. Without these upgrades, the 
effectiveness of the air mobility fleet would be reduced, adversely 
impacting the delivery of forces, as in a Desert Shield scenario, as 
much as 50 percent.
    Question. What is the projected total cost to make U.S. aircraft 
compliant?
    Answer. The initial estimate for mobility aircraft is $2.4 billion, 
starting in fiscal year 1999. We are still validating and verifying 
requirements for our fighters, bombers, and other aircraft. We expect 
cost estimates to be ready for the fiscal year 2002 POM.
    Question. How much has the Air Force budgeted in fiscal year 1999 
for GATM related modifications?
    Answer. $252.7 million was budgeted in fiscal year 1999 for GATM 
related modifications.
    Question. Under the current Air Force plan, how long will it take 
to make all applicable aircraft compliant?
    Answer. Mobility aircraft will be able to meet near-term 
requirements (through 2003) except for the C-130 and the C-5. Current 
programming, schedules the C-5 for completion in the 2006-2008 time 
frame, and the C-130 in the 2010 time frame. As far-term (2003 and 
beyond) airspace criteria are established by civil airspace regulatory 
agencies, the Air Force will determine which requirements affect 
military force structure and the appropriate means to address them.

                       Recent ``Hacker'' Attacks

    Question. Deputy Defense Secretary John Hamre announced last week 
that DOD had suffered ``the most organized and systematic attack'' ever 
to its computer networks. What did the Air Force do to respond to these 
attacks as they were happening?
    Answer. ------.
    Question. Were the vulnerabilities known to the Air Force prior to 
the attack? If so, were these vulnerabilities being addressed in an 
expeditious manner? If not, why not?
    Answer. ------.
    Question. Are there other known vulnerabilities in Air Force 
computer networks that are not being addressed expeditiously? Why not?
    Answer. No, the Air Force is working expeditiously to address all 
known vulnerabilities to its computer networks. However, the complexity 
of the software ``patches'' developed to close vulnerabilities, along 
with the varying skills of the local network or system administrator, 
can delay installation of patches, leaving our systems open to 
exploitation.
    The Air Force is moving aggressively to correct these shortfalls. 
Through our ``Operationalizing and Professionalizing Networks'' 
initiative, we are working to improve the training of our system and 
network administrators. Additionally, we are creating an environment 
where information systems are managed and protected as mission-critical 
assets. Recently, the Air Force Vice Chief of Staff released a message 
to all commanders which mandates compliance with all Air Force Computer 
Emergency Response Team and Defense Information Systems Agency computer 
security advisories and emphasizes the importance of commanders' 
involvement to ensure compliance. The Air Force is also establishing a 
formal system of ``positive control'' to ensure tracking and compliance 
with all such advisories and the reporting of intrusions through 
operational channels.
    While the Air Force will continue to face unauthorized users 
(``hackers'') attempting to gain access to our networks, we are 
committed to developing the right procedures and to providing adequate 
resources and training to ensure identified vulnerabilities are closed 
in a timely manner.
    Question. What are the legal and policy issues that must be 
resolved to facilitate more aggressive protection of our unclassified 
networks?
    Answer. Real-time tracking of hackers involves following the 
electronic trail back to a hacker's electronic point of origin. This 
pursuit may constitute warrantless electronic surveillance, and as 
such, would be governed by the Fourth Amendment and federal statute. 
Consequently, we can pursue a hacker real-time only with the consent of 
the owners of the systems we will be transiting or with a court order. 
Either type of permission can be time consuming and burdensome, 
particularly since we must repeat the approval process for each 
additional network the hacker transits.
    Question. Were all the responsible parties for the recent attacks 
found? What laws did they break? What will likely happen to the 
responsible parties if found?
    Answer. ------.
    Question. What are the lessons learned from these attacks?
    Answer. ------.
    Question. What is the Air Force doing in the area of information 
protection to defend its computer networks from attack?
    Answer. The Air Force is committed to the DOD-wide effort of 
creating a ``defense in depth'' for the Defense Information 
Infrastructure (DII). Key Air Force players in this effort include the 
MAJCOMs, AFIWC and Air Force Computer Emergency Response Team (AFCERT), 
Air Force Office of Special Investigations (AFOSI), Air Force 
Communications and Information Center (AFCIC), 609th Information 
Warfare Squadron (IWS), and the Network Control Centers (NCCs) at every 
base. The Air Force leads the DOD in intrusion detection capability 
with 108 AF facilities currently protected by real-time ASIM systems 
monitored at the base NCCs and the AFCERT. The AFCERT operates 24/7 as 
the AF correlation and analysis center for intrusion detection, 
warning, and response. The Air Force Base Information Protection 
Program will install enhanced boundary protection, intrusion detection 
and internal controls tools at 108 AF facilities by the end of calendar 
year 1998.

                             C-17 Aircraft

    Question. The C-17 program is in the midst of a seven year, $16.3 
billion multiyear contract. What is the status of the C-17 multiyear 
contract?
    Answer. The C-17 program has delivered 38 production aircraft, and 
the last 26 have been delivered early (average 27 days) with excellent 
quality. The last aircraft delivered (P38) was 46 days early. With 
respect to the Multi-Year Procurement (MYP) contract, the fiscal year 
1997 and fiscal year 1998 aircraft have been fully funded as well as 
the advance buy for the fiscal year 1999 aircraft. The first MYP 
aircraft (P41) is expected to deliver prior to the 31 August 1998 
contract delivery date. The last MYP (P120) aircraft contract delivery 
date is November 30, 2004.
    Question. The Air Force has made significant reductions in both 
procurement and research and development programs. What is the basis of 
these reductions and their impact to the program, especially to the 
integrity of the multiyear program?
    Answer. The multi-year procurement (MYP) program is intact; the 
procurement quantities and delivery schedule have not changed. The non-
MYP portion of the C-17 program has absorbed the funding reductions. 
Funding for engineering change order activity was removed. Also, 
several planned modifications have been delayed, extended, or deferred. 
Finally, the Centralized Electronic Repair Capability (CERC), a 
critical depot-level test and repair capability for over 40 Line 
Replaceable Units (LRUs) and 350 associated Shop Replaceable Units 
(SRUs), was eliminated.
    Question. The Committee understands that Boeing is manufacturing a 
number of additional C-17s as ``speculation aircraft'' in anticipation 
of other buyers. How many aircraft have been initiated as ``speculation 
aircraft''? What is the status of construction on these aircraft?
    Answer. Boeing built two additional C-17 type aircraft in 
anticipation of other buyers which did not materialize. The Air Force 
entered into (and executed) an agreement to accept those aircraft as 
early MYP deliveries at no additional cost to the Air Force. Final 
assembly start is scheduled for later this year as Air Force aircraft 
(P-49 and P-50).
    Question. If Boeing is unable to find other customers for these 
aircraft, are there any agreements to sell the aircraft to the Air 
Force under the multiyear? What impact (or benefit) would this have on 
the Air Force program?
    Answer. The Air Force entered into (and executed) an agreement to 
accept those aircraft as early MYP deliveries at no additional cost to 
the Air Force. Final assembly is scheduled to start later this year 
with delivery to the Air Force expected in the summer of 1999.
    Question. What is the status of the British interest in using C-
17s?
    Answer. ------.
    Question. What work is being done to make the C-17 compliant with 
Global Air Traffic Management (GATM) standards? Do we know enough at 
this point about GATM to make wise decisions on the proper 
modifications required to the C-17 fleet?
    Answer. The C-17 Program has developed a road map to make the 
aircraft fully GATM compliant in time to meet the deadlines. Schedules 
are in place to incorporate capabilities into the production line and 
for the retrofit of operational aircraft. For the near future, the 
equipment and the capabilities required to comply with GATM are well 
understood. The Air Force is pursuing open architecture strategies to 
provide the capacity to meet emerging requirements in later years.
    Question. Please update the Committee on the status of testing the 
aircraft for Army parachute deployments and for operations on austere 
runways.
    Answer. Last fall, the Air Force used a new static line to drop 540 
Army paratroops in a record-breaking formation airdrop. In addition, 
the Air Force is developing a new method of dropping equipment (Dual 
Row) to improve Army Airborne operations. Initial austere runway 
testing is complete and aircrews are now authorized to use airfields 
designated as semi-prepared. Development work will continue to further 
refine semi-prepared runway operations data.
    Question. What are the other testing issues currently being worked 
by the Air Force on the C-17?
    Answer. The C-17 Program is conducting normal tests to mature the 
aircraft in the following areas: Low Level Special Operations, 
Defensive Systems suitability and employment, Parachute Extraction, 
Aeromedical Evacuation, Station Keeping Equipment, Core Integrated 
Processor, Precision Approach Capability, Electronic Flight Control 
System Processor Upgrades, Automatic Communications Processor, ARC-210 
Radio, Dual-Row Airdrop, OBIGGS, Command Control Module, and the Blocks 
9 and 10 Software Upgrades.

                Evolved Expendable Launch Vehicle (EELV)

    Question. The EELV program is designed to reduce the overall space 
launch costs of DOD payloads by 25 to 50 percent through the year 2020. 
The Air Force has recently announced changes to the EELV acquisition 
strategy in support of the fiscal year 1999 budget request. Please 
discuss the changes made to the EELV acquisition strategy between 
fiscal year 1998 and 1999. Why were these changes necessary?
    Answer. The Fiscal Year 1999 EELV acquisition strategy allows the 
AF to select up to two contractors for development and launch services 
versus the original strategy of using one contractor. This strategy 
maintains competition throughout the life of the program, encourages 
greater contractor investment, and reduces overall AF development 
costs. The government's investment will be capped at $500 million per 
contractor and contractors will fund the remaining development 
(original estimate $1.5 billion). This new strategy eliminates the need 
for dedicated test flights because commercial and government mission 
flight data will meet test community requirements.
    The Air Force changed the EELV acquisition strategy for two 
reasons. The commercial launch market is growing much faster than was 
initially forecasted, and is capable of sustaining two launch vehicle 
providers. Second the new acquisition strategy affords the government 
the opportunity to partner with industry, to develop a national system 
to meet both commercial and government needs.
    Question. What is the scope of work that these development costs 
are expected to acquire?
    Answer. The scope of work includes the government share of launch 
vehicle development completion, establishment of the manufacturing 
infrastructure, construction/modification of launch facilities, and 
launch site activation. This work will provide a national launch 
capability which meets the mass to orbit, standardized interface and 
launch pads, and design reliability requirements contained in the EELV 
System Performance Document (ORD requirements).
    Question. Will an EELV capability be developed by industry 
regardless of government investment, due to the demands of the 
commercial market?
    Answer. No, while the commercial launch industry has been investing 
a significant amount of funds in improving their launch vehicle 
capabilities, it is clear that without the government investment as 
part of the EELV program, the capabilities required to meet DOD needs 
at critical satellite block changes such as GPS IIF and SBIRs would not 
occur. The contractors have indicated that they would continue to 
improve their current commercial products that may eventually resemble 
the EELV approach obtained through US Government investment, but not 
provide the capabilities required by the DOD in terms of cost 
reduction, responsiveness, wide range of payload delivery, and launch 
need date, on a schedule to meet critical DOD satellite block changes.

              Space Based Infrared System--High Component

    Question. The estimated $18 billion SBIRS program is to replace the 
Defense Support Program (DSP), providing initial warning of a national 
or theater ballistic missile attack. The SBIRS space segment consists 
of a high and low component which occupy orbital planes of varying 
altitude. SBIRs--High is in the EMD phase at present. SBIRS--Low is in 
the demonstration/validation phase and is scheduled to enter the pre-
EMD phase in fiscal year 1999. What is the life expectancy for the 
existing DSP constellation?
    Answer. The block of DSP-1 Satellites currently on orbit have a 
design life ------.
    Question. How are the remaining 5 DSP satellites that are currently 
in storage to be used?
    Answer. We will continue to launch the remaining DSP satellites to 
maintain a health strategic/theater warning constellation, ------ orbit 
at all times. Under the current baseline, DSP Flt 19 will launch in Dec 
98, Flt 20 in Oct 99, Flt 21 in Aug 00, Flt 22 in June 01, and Flt 223 
in Aug. 03.
    Question. Considering that the DSPs are lasting longer than 
originally projected, how should the transition to SBIRS be structured?
    Answer. The present baseline validated at the August 97 JROC 
ensures transition to a more capable IR system with acceptable risk. 
The SBIRS GEO Fiscal Year 2002 launch is the earliest opportunity to 
begin to meet expanded CINC requirements for Missile Warning, Theater 
Missile Defense, Battlespace Characterization, and Technical 
Intelligence.
    Question. This summer OSD PA&E conducted a study on the longevity 
of the present DSP constellation and the Air Force's transition plan to 
SBIRS. What were PA&E's findings regarding this issue?
    Answer. PA&E did not conduct a study of an orbit longevity of DSP. 
DSP-SBIRS transition alternatives were developed by an issue team which 
PA&E led. The issue team presentation to the Defense Resource Board 
contained no recommendations and the SBIRS baseline program was 
maintained.
    Question. What are the Air Force's principal reasons for objecting 
to DOD's alternatives to the SBIRS--High launch plans?
    Answer. In Aug 97 the JROC reviewed DOD's alternatives and felt 
they posed ``a significant risk to the warfighter.'' Warfighting CINCs 
require greater accuracies and shorter warning timelines to counter the 
growing proliferation of tactical ballistic missiles. ------ GEO's 
performance must be proven prior to systems engineering and development 
of a Block II SBIRS system.
    Question. What effect would the changes in the SBIRS--High launch 
schedule have on the SBIRS--Low component?
    Answer. Slipping SBIRS High launches result in unacceptable 
concurrency between the two programs. Grounds Systems Integration of 
SBIRS and transition from DSP to SBIRS High is a large and complex 
task. Concurrent fielding of SBIRS High and Low would present 
unacceptable development, integration, and testing risk.

                Air Force Mission Support System (AFMSS)

    Question. The AFMSS program is developing a common mission planning 
system for all Air Force aircraft. The Air Force and Navy have 
developed two separate and incompatible mission planning systems. In 
terms of the basic functions, there is little difference in the needs 
of the Air Force versus the needs of the Navy. Having two different 
planning systems causes significant inefficiencies. For example, 
contractors manufacturing joint PGM weapons (JDAM, JSOW) must write 
separate software code to support each mission planning system. Last 
year, the services signed an agreement to try to migrate the two 
systems to a common architecture. General, what is the status of this 
migration plan?
    Answer. Last year, the Air Force and Navy agreed to pursue a study 
of a possible next-generation mission planning system, identified as 
Joint Mission Planning Segment (JMPS). A joint service team developed 
the initial set of requirements and is planning to release a draft 
request for proposal (RFP) in Spring 1998. The first phase of the 
effort is a Migration Study using two contractors. The purpose of this 
phase is to investigate ways to minimize the operational and financial 
impact of migration from our legacy systems (AFMSS Mission Planning 
System and Portable Flight Planning Software (PFPS)) to JMPS. If the 
results of the study are favorable and affordable, then JMPS will enter 
the second phase. The second phase executes the development of the 
common mission planning software using a single contractor.
    Question. Please discuss the pros and cons of trying to achieve a 
common architecture.
    Answer. Last year, the Air Force and Navy agreed to pursue a study 
of a possible next-generation mission planning system, identified as 
Joint Mission Planning Segment (JMPS). A joint service team developed 
the initial set of requirements and is planning to release a draft 
request for proposal (RFP) in Spring 1998. The first phase of the 
effort is a Migration Study, using two contractors, whose purpose is to 
investigate ways to minimize the operational and financial impact of 
migration from our legacy systems (Air Force Mission Support System 
(AFMSS) and Personal Flight Planning Software (PFPS)) to JMPS. If the 
results of the study are favorable and affordable, then JMPS will enter 
the second phase. The second phase executes the development of the 
common mission planning software using a single contractor.
    The advantage of jointly pursuing this effort is to insure each 
service will achieve a common system that operates in Defense 
Information Infrastructure/Common Operating Environment. JMPS will 
provide scaleable mission planning and collaborative inter-service 
planning, while attempting to reduce life cycle cost.
    The disadvantage is the initial investment by each service. A 
primary program concern is investment funding constrained by the 
ability to merge Air Force and Navy requirements and programmatic 
constraints. The Air Force has invested heavily in its existing 
systems. Also, the existing systems (AFMSS, Navy's Tactical Aircraft 
Mission Planning System, and PFPS) are limited in software reuse. 
Because of this portions of the JMPS software will require development 
of new code which would increase overall cost.

                           ICBM Modernization

    Question. During preparation of the current budget, the Air Force 
made large reductions to the fiscal year 1999 and 2000 Minuteman 
Guidance Replacement Program. Why did the Air Force reduce the planned 
fiscal year 1999 and 2000 buy for Guidance Replacement units?
    Answer. In the current fiscally constrained environment, the Air 
Force found it necessary to reduce the funding for the Guidance 
Replacement units procurement in 1999 and 2000 to apply to higher Air 
Force priorities. This reduction extends the production schedule by two 
years, but does not change the total procurement effort.
    Question. What impact will this have on the readiness of Minuteman 
III missiles?
    Answer. The predicted Weapon System Reliability (WSR), and hence 
readiness rate of the Minuteman III will be slightly degraded but has 
been judged an acceptable risk.
    Question. What was the position of the US Strategic Command on 
those reductions?
    Answer. There was a detailed dialogue with USSTRATCOM on this 
issue. Following extensive analysis of the effects of the delay, 
USSTRATCOM determined they could accept additional short term risk in 
equipment failure as long as the total procurement effort remained 
unchanged.

                         PGM Technical Problems

    Question. Recent acquisition reform initiatives have been very 
successful in lowering unit costs on new development precision guided 
munitions (PGMs). Strong contractor competition in two recent PCM 
development programs, the Joint Direct Attack Munition (JDAM) and the 
Wind Corrected Munitions Dispenser (WCMD), have resulted in contractor 
production cost commitments far lower than originally projected by the 
Air Force. However, both programs have recently experienced testing 
problems which could result in higher production costs than originally 
advertised. General Muellner, please describe the problems encountered 
in the JDAM and WCMD programs.
    Answer. JDAM is experiencing problems in the low altitude, high 
speed environment on the in-board stations of the F/A-18 C/D. In this 
flight regime, air flow locally exceeds the speed of sound, creating 
shock waves which impact on the tail-kit fins. The shock wave adversely 
impacts the structural life of the fins and causes vibrations severe 
enough to interfere with the guidance unit. The current JDAM design is 
adequate for operational use on all AF bombers, AF fighters, and 
outboard stations of the F/A-18.
    WCMD experienced problems with the weapon's autopilot software and 
unexpected fin movement. During a test drop from an F-16, an error in 
the weapon's auto-pilot software caused the tail-kit to reduce the 
angle of attack too aggressively causing the weapon to drop below the 
normal glide path and fall well short of the target. During another F-
16 test drop, the aerodynamic loads on the fins at weapon separation 
and fin deployment were greater than expected. This resulted in the 
fins moving 5 degrees from nominal, causing the weapon to spin-up, 
saturating the Inertial Measurement Unit. As a result, the weapon never 
attained controlled flight and fell wide and long of the target.
    Question. What is the status of developing fixes for these 
problems?
    Answer. The JDAM Program Office is addressing the problem according 
to the following schedule:
          Mar 98: Fully characterize weapon environment through flight 
        test
          Apr/May 98: Evaluate environmental data/update design models
          May 98: Design fixes
          Summer 98: Test fixes
    Flight tests will be conducted in the troubling environment with 
tail-kits equipped to measure the aerodynamic loads that are imparted 
to the fins. After confirming the most stressing conditions, tail-kit 
components will be strengthened to operate in the whole performance 
envelope. Redesigned components will be flight tested this summer.
    The WCMD autopilot problem was corrected and successfully test 
flown on March 5, 1998, with a 67 foot miss distance, well within the 
100 foot operational threshold requirement. The root cause was 
determined to be a software coding error. The contractor investigated 
the WCMD fin movement problem and pursued multiple corrective design 
paths and options. The most promising solution appears to be the 
addition of a fin locking mechanism. Testing of this fix will begin in 
August 98.
    Question. What is the estimated impact in terms of cost for 
development and production of the fixes?
    Answer. For JDAM, no additional development dollars are required to 
cover the contractor overruns, beyond the $5 million FY98 congressional 
research and development plus-up. As for the production costs, the 
design changes on the drawing board are expected to have minimal, if 
any, production price impact.
    WCMD development cost impacts are yet to be determined. Very rough 
estimates are in the range of $6 million to pay for engineering design, 
wind tunnel testing, dynamic lab testing, associated subcontractor 
redesign costs, and additional flight tests. The program has been 
restructured to absorb these additional costs. Lockheed Martin will 
meet with the Air Force to discuss proposed fixes and associated 
production costs on April 1-2, 1998.
    Question. Under the current contracts, who is responsible, the 
government or the contractor, for paying for the development and 
production of the fixes?
    Answer. (JDAM) The government is responsible for the costs but does 
not pay additional profits on any overrun since the JDAM development 
contract is cost plus award fee. The prime contractor is overrunning 
its initial target cost of $70.5 million by approximately $23 million. 
The good news is, the reliability of the JDAM tail-kit has been 
excellent in flight testing. Savings incurred from not having to repeat 
flights have largely offset contractor cost growth.
    (WCMD) The government is responsible for the additional development 
costs since the development contract is a cost plus award fee contract. 
The Air Force will pay for additional flight testing out of program 
funds. However, LRIP I and LRIP II options are firm fixed price 
options. Therefore any additional recurring production cost during LRIP 
will be borne by the contractor. The contractor remains committed to 
the prices for the LRIP options. For Full Rate Production (FRP), if the 
contractor fails to meet the unit cost agreed to in Production Price 
Commitment Agreement (PPCA) the government has the option to accept the 
price increase or invoke penalties called out in the contract. The 
responsibility of who pays for the recurring cost in FRP associated 
with the fixes is currently being negotiated between the government and 
the contractor.

                           Acquisition Reform

    Question. Given our recent experience with problems in the Joint 
Direct Attack Munition (JDAM) and Wind Corrected Munitions Dispenser 
(WCMD) programs, what lessons have been learned that can be applied to 
future programs so that we can enjoy the cost benefits of strong 
competitions while minimizing the cost impact of problems encountered 
after contractor downselect? Have you adjusted your plans for the JASSM 
program based on lessons learned from JDAM and WCMD?
    Answer. The JASSM program is getting invaluable input from lessons 
learned on JDAM and WCMD, our acquisition reform ``pioneers.'' JASSM, 
WCMD, and JDAM are under one Program Executive Office, all are in one 
building at Eglin AFB, and several key JASSM people, including the 
program manager, came from the JDAM SPO. Because of this, the JDAM and 
WCMD design problems have been communicated immediately to the JASSM 
SPO. In addition, the JASSM competitors are the JDAM and WCMD 
contractors.
    The JASSM program has been refined based on overall lessons learned 
from the JDAM and WCMD programs. One example is inclusion of a 
``Remaining Risk'' factor in the JASSM source selection criteria, which 
motivated the competing contractors to attack the toughest issues 
early. To minimize the ``remaining risk'' the JASSM contractors have 
used the most demanding environments (B-1 aft bay, B-52 aft inside 
shoulder station) for wind tunnel, fit checks, and separation tests.
    Question. There have been several proposals in recent years from 
contractors regarding long term leases of major military end items; for 
example, leasing aircraft engines. Many of these proposals, after 
detailed review, turn out to be bad business decisions for the 
military. What lessons have been learned from this recent experience 
with leasing arrangements?
    Answer. Termination liability and indemnification make long term 
leasing a challenge. The latest B-52 re-engining proposal held the AF 
immediately liable for a casualty or loss of leased assets. Termination 
liability would be up to $2 billion in a given year. In addition a long 
term lease is almost always more expensive in the long run than 
outright purchase. The last proposal provided more operational 
capability but was estimated to cost the Air Force over $1.3 billion 
more in life cycle costs. Long term leases present procurement policy 
and fiscal issues. Title 10 U.S.C. Sec 2401 allows leases up to 5 
years--the authority to enter into longer leases must be authorized by 
law. Long term leases could also greatly limit flexibility and restrict 
fiscal options in future years (especially if the overall budgets 
decrease or requirements change). Under certain conditions, the Budget 
Enforcement Act of 1990, as reflected in OMB Circular A-11, requires 
the present value of the total lease payments to be obligated during 
the first year of the lease. This requirement makes a long term lease 
very difficult to effect.
    Question. Under what circumstances would a leasing arrangement be a 
good business decision for the military?
    Answer. Leasing would be a good business decision if it allowed the 
Air Force to affordably satisfy a requirement with negligible 
consequences for early termination. A lease could allow a requirement 
to be met in a year when funding is tight. Policy issues would need to 
be worked out for leases longer than 5 years. It is almost always 
cheaper to buy outright, but leasing has the potential for more 
flexibility if termination liability is not an issue.

                 Joint Air-to-Surface Standoff Missile

    Question. JASSM is a flagship program for the Cost As an 
Independent Variable (CAIV) acquisition reform initiative. Please 
provide a list of capabilities that were considered in the JASSM 
program but sacrificed to reduce the cost of the missile. Did the 
contractor recommend trade-offs that were rejected by the Air Force? 
Please explain.
    Answer. JASSM cost and performance have been achieved through 
application of acquisition reform initiatives, competition, 
incorporation of TSSAM ``lessons learned'' such as only having a single 
variant, use of commercial parts and mature ``off-the-shelf'' 
technology, and an early emphasis on producibility (incentivized by a 
15 year warranty requirement).
    JASSM is structured as a CAIV program with only three Key 
Performance Parameters (KPPs): Range, Missile Mission Effectiveness 
(MME), and Carrier Operability. In addition, the JASSM program 
identifies cost as a system requirement. The requirement sets a 
threshold (maximum) cost of the missile at $700,000 with an objective 
cost of $400,000 (both in BY95$). Boeing and Lockheed Martin are both 
offering excellent performance at lower than objective unit cost--
$390,000 (basis for FY99 PB). All non-KPP requirements are tradable to 
achieve the cost requirement under the CAIV concept.
    CAIV trades are addressed in the IPT process with Air Force and 
Navy user involvement. Specific trades examined are Source Selection 
Sensitive. However, one ``generic'' case considered a slight reduction 
in the low-altitude, high-speed (transonic) part of the JASSM 
employment envelope on the F-16. Operation in this part of the launch 
envelope would have precluded use of less expensive commercial parts 
due to the temperatures which result from operating at those 
conditions. This trade was accepted after the users confirmed they had 
no requirement to operate in that small corner of the launch envelope. 
There are some contractor recommended trades which have been rejected. 
For instance, both contractors requested elimination of aircraft-
specific load items from the JASSM shipping container. This trade was 
rejected by the users.
    Question. Please update the Committee on the status of the JASSM 
Analysis of Alternatives and the associated requirements to report to 
the defense committees.
    Answer. As of March 5, 1998, there were only preliminary results of 
the JASSM Analysis of Alternatives (AoA). The AoA was complete, but the 
results were not yet approved. JASSM's joint AoA team briefed the Air 
Force, Navy, OSD, and Joint Staff on AoA results through the month of 
March. The JROC reviewed the results on March 23, 1998. The OSD JASSM 
Overarching IPT has the official AoA approval authority and reviewed 
the AoA results on March 27, 1998. Dr. Ganlser, USD(A&T), reviewed the 
AoA results on March 31, 1998. After Dr. Gansler's review, he forwarded 
a letter for SecDef signature to notify Congress of the DOD's decision 
on the JASSM/JSLAM acquisition strategy.
    On April 9, 1998, the SecDef letter told Congress the AoA complete 
and the results clarified the Department's position on JASSM and SLAM-
ER+. The AoA determined ``the JASSM requirement is valid'' and ``the 
JASSM candidates are more survivable, lethal, and cost-effective than 
modifications to the Navy's SLAM-ER.'' The Department is proceeding 
with JASSM and has transferred the $43M ``JSLAM'' funds to the JASSM 
program element. The SecDef notes the ``SLAM-ER missile is proven'' and 
lists several reasons why SLAM-ER+ is appropriate for Navy use. The 
Department supports continued Navy conversion and use of SLAM-ER+. 
JASSM is still a joint program with active Navy participation and the 
carrier operability requirement. The continuation of JASSM and SLAM-ER+ 
allows the Department to preserve an indirect competition between the 
two programs and provide a hedge against potential JASSM development 
problems.

                     Large Aircraft Reengine Study

    Question. Last year, in response to the potential need to reengine 
many of our large aircraft (B-52, C-5, AWACS, JSTARS), the Air Force 
initiated a reengine study to look at innovative ways to address the 
problem. What kinds of reengining programs has the Air Force considered 
as part of this study? Which show the most promise?
    Answer. This feasibility study is limited to an examination of 
aircraft with the TF-33 engine. These aircraft include the B-52, KC-
135, RC-135, AWACS, and JSTARS. The study involves both government and 
industry propulsion experts.
          Two types of programs are included in the study:
              --Upgrades to the existing TF-33 engine.
              --Complete reengining of the aircraft.
    Multiple business approaches are also being examined including 
leasing the engines, buying the engines, organic maintenance, and 
``power by the hour'' total contractor support.
    At this time, the study results are insufficient to support any 
particular approach. The Office of the Secretary of Defense will 
provide a report on the study results for military aircraft derived 
from Boeing 707 aircraft. The report will be provided to Congress by 
June 1, 1998.

                  Availability of Software Programmers

    Question. In recent months, the media has reported extensively 
about the nationwide shortfall of software programmers. General, is 
this shortfall of qualified software programmers impacting the military 
sector?
    Answer. We are acutely aware of the growth in demand for qualified 
software experts in industry. The Air Force has seen some significant 
impacts to its programs. As with the management of any highly technical 
career field, contractors have a challenge to recruit and retain 
experienced software programmers. While we have experienced 
disturbances and delays during program development, there have been no 
indications from contractors that they cannot execute the programs due 
to a lack of software personnel resources.
    Question. Do military contractors have trouble competing with 
commercial industry for software programmers?
    Answer. Contractors cannot easily be divided into military versus 
commercial contractors. The typical Air Force contractor has both 
military and commercial business. The Air Force relies on the 
contractor to provide the expertise necessary for the program 
development effort. It is, therefore, incumbent upon the contractor to 
recruit and retain skilled software personnel as well as software 
managers.
    Question. Do you see the trend of shortages in software programmers 
continuing?
    Answer. We expect the growth in demand for qualified software 
experts to continue. We are aware that our programs rely heavily on 
software to perform their mission and that this reliance will more than 
likely increase in the future. Although the Air Force has experienced 
some significant impacts to its programs due to software personnel 
turnover, we expect the free enterprise system will eventually self-
correct any existing programmer shortfalls.
    Question. What can the Air Force do to mitigate the impacts of this 
shortage?
    Answer. As part of acquisition reform, the Air Force is increasing 
its access to the commercial sector, thus, providing a greater source 
of expertise and resources that can be used for Air Force acquisition 
and development efforts. To meet the Air Force demand for software, we 
are encouraging the use of best commercial practices, including 
commercial off-the-shelf software and product-line practices for reuse.

                Impact of Outyear Inflation Adjustments

    Question. Every year, the Office of Secretary of Defense (OSD) 
adjusts the budget based on the latest approved OMB inflation 
estimates. In theory, adjusting the budget to reflect the best 
estimates of inflation should not affect program content. This year, 
however, nearly every Air Force modernization program is reporting 
significant programmatic impact resulting from these inflation driven 
budget cuts from OSD for fiscal year 1999 and out. General Muellner, 
does the Air Force disagree with the Administration on future inflation 
estimates? Why or why not?
    Answer. The Air Force agrees with the Administration on future 
inflation estimates. Programmatic impacts occurred, because programs 
were already on contract with established forward pricing rates and 
union contracts. Programmatic impacts can be expected whenever 
inflation adjustments affect the year currently being executed or years 
under contract.
    Question. Does the Air Force have its own approved inflation 
estimates? If so, please provide a comparison of the Air Force 
estimates with the Administration's estimates. If not, then what is the 
basis of the Air Forces budget estimates? Is each program allowed to 
make its own estimates of inflation? Is there any consistency between 
programs?
    Answer. The Air Force uses the administrations inflation estimates 
as provided by the Office of the Secretary of Defense. The provided 
inflation estimates were reflected in the fiscal year 1999 President's 
budget submission and supporting Congressional justification material.
    Question. Did OSD approve the Air Force strategy of showing 
programmatic impact from inflation adjustments?
    Answer. The Air Force briefed the Procurement and RDT&E plan 
proposed in the fiscal year 1999 President's Budget. The health of our 
modernization plan depends on a number of primary factors including 
inflationary impacts. Providing our proposed fiscal year 1999 
Procurement and RDT&E budget without covering the effects of inflation 
would provide an incomplete picture of those factors that impact the 
success of the Air Force's modernization plan.

                    Shortfalls in Baseline Programs

    Question. Several Air Force programs have already reported known 
shortfalls in the budget for fiscal year 1999 and out, including F-22, 
JSTARS, and Link-16. Please provide a list of all Air Force acquisition 
programs with known (or highly suspected) shortfalls in the program of 
record as presented to Congress in the Fiscal Year 1999 President's 
Budget. Please breakout the list by program, appropriation, and fiscal 
year over the Future Year Defense Plan using then-year dollars. Be sure 
to total the list by program and fiscal year.
    Answer. The following table lists the requested information:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                           Description of
            3-LTR                Appn        Program         requirement        FY98         FY99         FY00         FY01         FY02         FY03
--------------------------------------------------------------------------------------------------------------------------------------------------------
AQI..........................     3010  JSTARS..........  Estimated FY99-          0.00        40.00        20.00        20.00         0.00         0.00
                                                           FY01 costs for
                                                           the E-8C
                                                           production line
                                                           shut-down which
                                                           begins in FY99
                                                           on 13 A/C
                                                           program.
AQP..........................     3600  SFW.............  SFW P3I Cost             0.00         4.00         0.00         0.00         0.00         0.00
                                                           Overrun--During
                                                           staffer day
                                                           briefs
                                                           requested
                                                           Congressional
                                                           support to
                                                           realign FY99
                                                           Procurement to
                                                           RDT&E.
                                                           Magnitude of
                                                           overrun
                                                           characterized
                                                           after FY99PB
                                                           submission.
AQ...........................     3010    ..............  Total 3010 \1\           0.00        40.00        20.00        20.00         0.00         0.00
                                                           Appropriation
                                                           Requirement.
AQ...........................     3600    ..............  (1) Total 3600           0.00         4.00         0.00         0.00         0.00         0.00
                                                           \1\
                                                           Appropriation
                                                           Requirement.
AQ Total Requirement.........  .......  ................  ................         0.00        44.00        20.00        20.00         0.00         0.00
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ The F-22 contractor team is currently concluding the 1997-98 Affordability Analysis, with product delivery due in March 1998. In turn, the Air Force
  will need some time to review the analysis. Once the Air Force has confidence that we have received a high fidelity estimate, the Air Force will
  formulate a budget position with corporate Air Force approval to be included in the Fiscal Year 2000 President's Budget to execute this cost estimate.
  To date, the Air Force is still working FYDP funding requirements. Based on preliminary data, the revised program budget adds funds within the FYDP
  and makes outyear offsets within cost cap. The Air Force is confident that the program, with known constraints, remains executable.

                    Selling Key Technologies Abroad

    Question. The US spends billions of dollars to provide our military 
with technological advantages over our adversaries. However, there are 
numerous examples of these advantages being compromised following the 
marketing of these technologies abroad, in some cases forcing the 
premature requirement to spend billions more to recapture the 
advantage. Currently, several of our highest technology programs have 
barely gotten off the drawing board and are already being marketed 
abroad, including the most advanced aircraft (Joint Strike Fighter), 
most advanced close-in-air-to-air missile (AIM-9X), and the most 
advanced surveillance radar (JSTARS RTIP). General Muellner, from a 
warfighting standpoint, do you believe it is wise for the US to be so 
quick to sell our best warfighting technologies abroad?
    Answer. Yes, I believe it is wise, but there are both positive and 
negative aspects. There are several benefits to selling our latest 
technology to Allied nations: reduced cost, improved interoperability, 
easier planning, and simplified logistic support requirements for 
Allied efforts. Also, our Allies often find ways to improve on our 
products which we can then incorporate in upgrading our systems.
    The negative aspect of selling our warfighting technology abroad is 
proliferation to our potential enemies.
    The US has a coherent and consistent policy that, when realized, 
prevents technology from falling in to the wrong hands. This policy 
also relies on similar precautions by our Allied customers to be 
effective. Implementing these checks and balances allows for the wise 
sale of our warfighting technologies abroad.
    Question. What work is being done to protect these technologies 
from exploitation once sold overseas?
    Answer. All technologies are thoroughly reviewed and evaluated 
prior to release overseas. In addition, the Air Force has an active 
anti-tamper program implementing existing DOD policy in identifying and 
protecting critical technologies. Its purpose is to prevent 
exploitation of U.S. technology or the development of countermeasures 
against our weapon systems. Included in the anti-tamper program are 
techniques which not only protect the hardware, but also ensure 
software algorithms are secure. Examples of anti-tamper techniques 
include software encryption, integrated circuit protective coatings, 
and hardware access denial systems.
    Question. Are there currently policies in place to protect certain 
kinds of advanced hardware or software, or are these decisions made on 
an ad hoc basis?
    Answer. Yes, DOD policy 5200.1-M directs protection of critical 
technologies, including hardware and software, in our weapon systems. A 
Program Protection Plan is required for all acquisition programs that 
have critical technologies.
    Question. Who typically makes these decisions?
    Answer. The Program Protection Plan must be approved by the 
Milestone Decision authority as part of the Milestone Review Process. 
Additionally, systems proposed for foreign sale that have Low 
Observable (LO) or Counter Low Observable (CLO) capabilities must be 
approved by the LO/CLO Executive Committee. This committee is co-
chaired by the Vice Chairman, Joint Chiefs of Staff and the Under 
Secretary of Defense for Acquisition and Technology.

                             CV-22 Aircraft

    Question. The CV-22 is the special operations variant of the 
tiltrotor V-22 aircraft. Fiscal year 1999 is the first year the Air 
Force has requested production funding for this aircraft. What is the 
status of the CV-22 development program?
    Answer. The CV-22 development program is on track and follows the 
MV-22 development. The Navy is the lead acquisition agency for MV-22 
and CV-22. CV-22 design reviews have been completed on or ahead of 
schedule. The final CV-22 critical design review is scheduled for 
December 98. CV-22 starts flight test in October 99.
    Question. GAO recently reported several design issues with the 
aircraft that could be a problem for special operations personnel. 
These problems include inability for both pilot and copilot to see the 
refueling probe, excessive downwash, elimination of the laser-warning 
subsystem, interference between the terrain following radar and the V-
22 radar jamming system, absence of a ground collision avoidance and 
warning system. Does the Air Force agree with these concerns? What is 
being done about them?
    Answer. The Air Force has been following the Navy's progress during 
their test program; some of the concerns have been overstated. 
Visibility of the refueling probe is not an issue for the right seat 
pilot. Flight testing (Fall 98) will evaluate visibility for the left 
seat pilot. A quantitative assessment (collection of flow data) of the 
V-22 proprotor downwash was completed in December 97. Initial analysis 
of the data shows that the V-22's proprotor downwash is comparable to 
existing helicopters with regard to the magnitude of wind velocities. 
The user, USSOCOM, has agreed to add laser warning as a preplanned 
product improvement (P3I) item. Interference between the terrain 
following radar and the radar jamming system has been taken into 
consideration during engineering design, and will be investigated 
during CV-22 flight test beginning in 1999. A Ground Collision 
Avoidance and Warning System (GCAWS) is not presently available for 
integration on the V-22. Forms of GCAWS exist for helicopter and fixed 
wing aircraft, but a system for tiltrotor has not yet been developed. 
GCAWS will be added as a P3I item on both the MV-22 and CV-22. The next 
operational test, scheduled for this summer, will further clarify these 
issues using the MV-22 EMD aircraft.
    Question. GAO reported that the Pentagon's Director, Operational 
Test and Evaluation said that the combination of limitations to 
clearance and configuration in testing results in an ``extremely 
artificial'' test environment for early operational test and 
evaluation. General, are you concerned about the amount and type of 
testing being performed on the aircraft? Is anything being done to make 
the testing less artificial?
    Answer. The Air Force is satisfied the Navy is addressing test and 
evaluation issues realistically; envelope restrictions and pre-
production limitations in early operational assessments are the norm. 
MV-22 enters the fourth phase of five operational test phases in Summer 
98. Future test environments will be more challenging and realistic, 
each building on the previous.
    Question. The fiscal year 1999 budget requests $22 million in 
advance procurement two years prior to funding of the first CV-22 
production aircraft. What is this funding for? Why is it required two 
years prior to full funding of the first CV-22 production aircraft? 
Given the state of production, should this effort be funded in R&D? Why 
or why not?
    Answer. This funding is the Air Force portion of a joint 
procurement with USSOCOM to buy a full motion Weapon System Trainer 
(WST) to be located at Kirtland AFB, NM. Funding in fiscal year 1999 
will deliver and integrate the simulator by March 02, to be ready for 
training the initial instructor cadre by September 02. The initial 
instructor cadre must be trained prior to arrival of the first aircraft 
in March 03. Procurement funding is used because the Air Force 
simulator procurement follows the Navy fiscal year 1997 procurement for 
a simulator.

                       Year 2000 Computer Problem

    Question. One of the problems that we face as we enter the next 
century is older computers that are only programmed to remember the 
last two digits in a year. Thus they remember `1997' as simply `97'. 
The year 2000, however, will be saved as `00', the same as the year 
1900. This can lead to calculation errors and system failures. How 
serious is this problem for the Air Force? What would be the impact if 
your Mission Critical Systems were not corrected by the year 2000?
    Answer. Many Air Force systems depend upon computers and software 
so that scope of all programs is of considerable depth and breadth. The 
year 2000 remediation program has the attention of the senior 
leadership in the Air Force. In fact, the Acting Secretary of the Air 
Force and the Chief of Staff have declared it as the number one 
software sustainment priority. The problem is diverse--as illustrated 
by over 3400 weapon systems and automated information systems being 
tracked--but we have a program to fix the year 2000 issues and we are 
substantially on track. The impact of not correcting mission critical 
systems encompasses an equally wide spectrum of possible results, 
ranging from no operational impact to erratic system performance or 
even system shut down. Mission critical systems have been our primary 
focus. We are confident of the attention being given--mission critical 
systems will operate when the year 2000 arrives.
    Question. How many systems does the Air Force have to evaluate and 
where do they stand in the process of assessment, renovation, 
validation and implementation?
    Answer. We currently have 387 (approximately 10 percent of total) 
systems that are behind the assessment phase milestone. They are 
receiving increased emphasis to understand the condition of the systems 
and the plan to achieve the remedy by the required date. For some of 
these systems still in assessment phase remediation action is underway, 
but the responsible program managers still have some actions to take to 
complete all steps required to exit the assessment phase. For complex 
systems with complex interfaces, the remediation plan does not always 
fit the discrete steps and phase points we have specified. Over 30% are 
in renovation. The Air Force is tracking just over 3400 weapon and 
automated information systems. Almost 60 percent are ahead of schedule 
in the validation and implementation phases.
    Question. Are there any systems, particularly Mission Critical 
Systems, whose Year 2000 efforts could be improved with additional 
funding? If so, which systems are they, how much money would you need, 
and how would the money be used?
    Answer. Our strategy is to defer nonessential sustainment and 
system enhancements, and to use existing programmed resources to make 
our Y2K fixes. Given our current strategy, we will be able to fix all 
of our mission critical systems on time. While additional Total 
Obligation Authority might accelerate some mission critical fixes and 
avoid the undesirable consequences of diverting resources form 
essential program content to fix the year 2000 problem, we believe our 
strategy is sound and the President's Budget accurately reflect our 
priorities and commitments.
    Question. Has your organization appointed a Year 2000 program 
manager and established an agency-level program office to manage and 
coordinate your Year 2000 program activities?
    Answer. Yes. The Air Force's Year 2000 program is directed by the 
Air Force Chief Information Officer (CIO). The CIO Support Office in 
the Air Force Communications and Information Center provides policy and 
guidance, and coordinates program activities.
    Question. Have you completed a service-wide inventory of 
information systems?
    Answer. Yes, we have used a variety of methods to identify all of 
our weapon and information systems impacted by year 2000 issue. 
Additionally, we used a wide range of data sources from program funding 
lines, acquisition portfolios, system modification tests, etc. to cross 
check our inventories. We are confident that we have identified most of 
the systems but we fully understand that we will find additional 
systems as we continue to rigorously work the year 2000 program.
    Question. Have you deferred or canceled any new system development 
efforts in order to reprogram the funds to achieve Year 2000 compliance 
with an existing Mission Critical System? If so, which systems were 
deferred or canceled?
    Answer. The Air Force is not deferring or canceling any new system 
development. However, we are deferring minor modifications and 
enhancements to existing systems until after Y2K fixes have been made 
and we are doing that every day. Resources spent on year 2000 
remediation had to come from program content. While we have not 
canceled any programs because we are doing year 2000, we clearly have 
had to stretch out programs, delay content (features) in major software 
releases and divert resources from other important issues. A few 
examples of deferral action can be found in the Combat Information 
Transfer System (CITS), we are delaying planned and needed fiber 
optical cable modernization because we have to divert resources to 
obtain the year 2000 remediation in our telephone switches; and in the 
Global Positioning Satellite (GPS) program we have had to divert 
resources to establish a GPS receiver test capability to validate YSK 
fixes. We also had to spend resources to ensure our mission control 
system has the year 2000 remedy in place. In total, this remediation is 
consuming considerable resources but cost figures will never be more 
precise than rough estimates because the year 2000 actions are 
necessarily linked to a number of associated and on-going develop and 
sustainment actions.
    Question. Have you developed contingency plans for Mission Critical 
Systems?
    Answer. Roughly 25 percent of all mission critical systems 
currently have contingency plans. Air Force policy directs all mission 
critical systems to have contingency plans in place by June 30, 1998. 
This will be a special interest item as we continue in 1999 to perform 
interoperability testing. We are also developing contingency plans for 
all our operations centers to use as we roll into the year 2000. We are 
doing this so we will have in place a good set of emergency checklists 
and procedures that address the consequences and responses if essential 
services become interrupted because of second and third order effects 
of failure in systems or infrastructure outside Air Force control. We 
will be ready for the unexpected anomalies that might surface.

              Information Technology Management Reform Act

    Question. The Information Technology Management Reform Act of 1996 
(known as the Clinger-Cohen Act) requires each agency to make specific 
changes in how they select and manage information technology programs. 
Among other steps, this includes performing an analysis of 
alternatives, a cost-benefit analysis and identifying specific 
performance measures. What steps has the Air Force taken to come into 
compliance with the Clinger-Cohen Act?
    Answer. The Secretary of the Air Force appointed the Assistant 
Secretary for Acquisition as the first Chief Information Officer (CIO) 
of the Air Force on August 8, 1996.
Organization
    The Air Force CIO structure is aligned under the Secretary of the 
Air Force with the Assistant Secretary for Acquisition dual-hatted as 
Air Force CIO (AF-CIO). The Air Force's Director, Communications and 
Information is appointed as Deputy AF-CIO and reports to the AF-CIO for 
all CIO matters, the Paperwork Reduction Act (PRA), and implementing 
the provisions of the ITMRA.
    CIO Management Board: The CIO Management Board is an executive-
level structure, composed of senior members of the Secretariat and Air 
Staff, who advise the CIO on information technology and IRM issues from 
a corporate Air Force perspective. The board is chaired by the CIO.
    CIO Overarching Integrated Process Team (OIPT): The CIO established 
an OIPT composed of members of the CIO staff and designated functional 
staffs to address those cross-cutting issues which required a multi-
functional perspective. The OIPT is chaired by the Air Force 
Communications and Information Center's Director, CIO Support (AFCIC/
IT).
    CIO Support Staff: The Director, CIO Support reports to the Deputy 
AF-CIO and is responsible for day-to-day management and oversight of 
the responsibilities of the CIO under the ITMRA, PRA, A-130 and other 
laws and executive orders as applicable. The Director, CIO Support 
represents the AF-CIO at various Federal, DOD and National forums.
    ITMRA in Strategic Planning: The Air Force has incorporated ITMRA 
principles in its strategic planning. The AF-CIO published the Air 
Force Information Technology Management (ITM) Strategic Plan in 
accordance with the provisions of the ITMRA. The plan built on the 1995 
strategic plan for Information Resource Management (IRM) and 
established goals and objectives for information technology (IT) 
investments. The Air Force ITM Strategic Plan was developed using the 
Defense Planning Guidance (DPG) and the DOD Information Management/
Information Technology (IM/IT) Strategic Plan.
    AF-CIO Top Issues: The AF-CIO and his staff are currently 
addressing the following:
     Ensuring the Air Force is ready for the Year 2000 date 
change--the Air Force's top software and IT sustainment issue
     Air Force-wide standardization of its information 
infrastructure
     Information assurance to include information protection
     Improve information technology skills of entire workforce
     Implement supporting plans for strategic planning 
documents
     Institutionalize performance measurement, process 
improvement by innovation, business and mission process reengineering 
as precursor activities to information technology investments
     Data standardization
    Aggressive actions across the Air Force to recognize the power and 
value of information as strategic resources that enables revolutionary 
changes in the way we do the mission and business processes of the Air 
Force
    Federal and DOD CIO Councils: The AF-CIO is actively engaged with 
the Federal and DOD CIO Councils to proactively address IT issues 
common to all governmental agencies. An example of issues we're 
addressing are Year 2000 conversion, capital planning and investment 
control, and information architecture.
    Question. Is the Air Force now in compliance with this Act?
    Answer. Yes. Our structure and practices are in place. As with any 
new process or initiative we are constantly reviewing our actions in 
this area to seek improvements in the way we operate. Our fundamental 
objective in the area of ITMRA is to be a leader in the smart use of 
information and information technology to deliver to the American 
people an Air Force that works better and costs less.
    Question. What improvements has the Air Force seen as a result of 
the Clinger-Cohen Act?
    Answer. The most visible improvement Air Force-wide is the growing 
institutional awareness that our entire Air Force (all of its mission 
and business processes) is very information dependent. Information and 
IT are integral to every mission and business process throughout the 
Air Force. Consequently, we are continually improving our processes to 
save resources and increase our effectiveness.
    Examples of how we are exploiting information technology and 
applying ITMRA principles to become a better, faster, cheaper Air Force 
include:
    --Electronic travel management: We reengineered travel management 
processes and made smart use of IT to reduce customer service cycle 
time from 7 days to 3 days. We reduced travel arrangement processing 
time from 4 hours/traveler to 2 hours, and reduced travel processing 
cost from $66/traveler to $41.
    --Electronic mission briefings: We replace ``white board and 
marker'' briefings with computer-based systems, providing ready access 
to all flight regulations, safety supplements, training manuals, 
briefing materials, and other presentations. This $300 thousand 
investment produced $800 thousand savings in man-hours and increased 
pilot utilization.
    Since our mission is dependent on information, we are treating 
information as a strategic resource. We have recognized its role in our 
Global Engagement vision statement and we have declared that 
``Information Superiority'' is a core competency of the Air Force in 
parallel with ``Air and Space Superiority.'' We are convinced that the 
essential improvements we have addressed in our intelligence, situation 
awareness, precision engagement, lethality, global mobility, and combat 
support are directly linked to effective exploitation of information 
and information technology.
    Question. In the last year, as a result of your Information 
Technology (IT) Milestone reviews, did the Air Force delay, cancel or 
significantly restructure any of their IT systems? If so, which ones?
    Answer. Over the course of the past year, the Air Force did not 
delay, cancel, or significantly restructure any programs as a result of 
these reviews. We have incorporated the ITMRA requirements and 
principles into all program, portfolio, and milestone reviews. ITMRA 
compliance is closely scrutinized by the Air Force's Senior Acquisition 
Executive, AF-CIO, Deputy AF-CIO, Program Executive Officers (PEO), 
Designated Acquisition Commanders (DAC), and Program Managers. Joint 
use programs are reviewed quarterly; detailed program reviews occur 
semi-annually, and higher level portfolio reviews comprised of numerous 
programs also occur semi-annually. We study various program performance 
measures during these reviews to make the best decision for the Air 
Force and American public. Continually searching for improvements in 
effectiveness and opportunities to save resources, we are looking 
forward to further institutionalizing the results of an ongoing pilot 
study that validates our Air Force Information Technology Investment 
Performance Measurement Guide.
    Question. What document does your review panel require for each 
milestone review?
    Answer. Our PEO/DAC portfolio and milestone reviews, conducted 
under DOD Directive 5000 requirements, consider schedules, funding, 
Year 2000 compliance, Joint Technical Architecture/Defense Information 
Infrastructure Common Operating Environment compliance, and performance 
metrics. We review the Mission Need Statement and Operational 
Requirements Document to ensure we deliver the right product with the 
required capabilities. We also discuss the Single Acquisition 
Management Plan (SAMP), a concise, comprehensive document that enables 
the program decision authority to reach a decision. Specifically, the 
SAMP consolidates the essential elements of the program's Acquisition 
Plan, Program Management Plan, Integrated Logistics Support Plan, and 
Systems Engineering Management Plan--documents typically evaluated at 
milestone reviews.
    Question. In conducting these reviews, how many involved an actual 
meeting of the senior decision makers, and how many were ``paper'' 
reviews?
    Answer. PEO/DAC portfolio and milestone reviews are actual meetings 
with senior decision makers, not ``paper'' reviews. The Air Force's 
Senior Acquisition Executive, AF-CIO, Deputy AF-CIO, Program Executive 
Officers (PEO), Designated Acquisition Commanders (DAC), and Program 
Managers are directly involved in portfolio and milestone reviews. 
Joint use programs are reviewed quarterly, detailed program reviews 
occur semi-annually, and higher level portfolio reviews comprised of 
numerous programs also occur semi-annually.
    Question. Has the OSD MAISRC, in its reviews, delayed, canceled or 
significantly restructured any of the Air Force's IT systems? If so, 
which ones?
    Answer. The OSD MAISRC has not delayed, canceled, or significantly 
restructured any of the Air Force's IT systems.

    [Clerk's note: End of questions submitted by Mr. Young.]
                                          Wednesday, March 4, 1998.

                 BALLISTIC MISSILE DEFENSE ORGANIZATION

                                WITNESS

LIEUTENANT GENERAL LESTER L. LYLES, USAF, DIRECTOR, BALLISTIC MISSILE 
    DEFENSE ORGANIZATION

                              Introduction

    Mr. Young. The Committee will come to order.
    This morning our hearing will be on the Department of 
Defense's program in the area of ballistic missile defense. Our 
witness is Lieutenant General Lester L. Lyles, the director of 
the BMDO.
    General, we welcome you back. We enjoyed your testimony at 
the last visit, and we look forward to your testimony today.
    You know, this Committee has placed a very high priority on 
the issue of missile defense programs. We remember specifically 
the SCUD attack which took the lives of 28 Americans during 
Desert Storm. We have watched over the weeks the activity 
relative to Iraq. We also recognize that Iran is also a 
potential problem.
    As we see these threats, this Committee remembers last year 
that Congress added $800 million for the budget for missile 
defense. We thought the administration's budget was a little 
short. We are happy to see this year that the administration's 
budget is substantially better as it relates to funding for the 
ballistic missile threat.
    The fiscal year 1999 budget request for ballistic missile 
defense is $3.6 billion. That is only $100 million below the 
1998 appropriation of $3.7 billion, so it is better. It 
provides full funding for the Patriot Advanced Capability 3, 
Navy Lower Tier, and the THAAD programs. We are not quite as 
happy with the recommendation as it relates to the Navy Upper 
Tier, but we will work on that, and we will talk to you about 
that today.
    We would anticipate that there will be numerous questions 
from the members of the Committee, and we have some conflicts 
this morning, so our attendance is not as great now, but other 
members will be here as they complete their other assignments.
    We are happy to have you here, and before we recognize you 
I would like to ask Mr. Dicks for any comments he would like to 
make.

                          Remarks of Mr. Dicks

    Mr. Dicks. I welcome you, and I appreciated our chance to 
talk the other day, and I just want to emphasize again how 
important I believe theater missile defense is.
    Again, if we are going to deploy soldiers all over the 
world, we are going to have to have a way to defend them, and 
we were fortunate in the Gulf War that Saddam's SCUDs in most 
instances were pretty inaccurate. I know you told me about the 
improvements in PAC-3, but, again, the failure on THAAD up to 
this point has been a disappointment. I know you are working 
hard on that, but I just want to emphasize how important I 
believe this is for the safety of our deployed forces.
    General Lyles. Yes, sir.
    Mr. Young. General, we look forward to your testimony. Your 
entire statement will be placed in the record, and you may 
summarize it as you wish.

                   Summary Statement of General Lyles

    General Lyles. Thank you, Mr. Chairman. Good morning. It is 
a pleasure to be back here to address this Committee.
    Mr. Chairman and members of the Committee, I appreciate the 
opportunity to present the Department's ballistic missile 
defense program. As you stated, I will provide a formal 
statement that will be submitted for the record. I have some 
brief remarks I would like to go through very quickly, and then 
I welcome your questions.
    First off, because of some of the things that you just 
stated, Mr. Chairman, along with Congressman Dicks, I would 
like to introduce the Army, Navy and Air Force team that is 
here with me today. I know this is a relatively small room and 
it is not good always to bring a large group of people to a 
hearing like this, but I thought it was very, very important, 
and I wanted to consciously show you that this is a joint 
mission. This is something that we are all working on together.
    You met personally my deputy, Rear Admiral Dick West, who 
is sitting behind me. By the way, he was recently selected for 
second star; and we are looking forward to him pinning that on. 
Brigadier General Cosumano, United States Army, my Joint 
Program Manager for NMD. Mr. Rob Snyder, since you don't have a 
uniform on, you can raise your hand. Rob Snyder is a member of 
the Senior Executive Service. He is my deputy for program 
operations or my comptroller, the guy I hold responsible and 
actually keeps me honest to make sure we are spending the 
dollars wisely.
    Also with me today are representatives of the Service 
Program Executive Officers, or PEOs. These are the guys who are 
directly executing the missile defense programs. Unfortunately, 
only one of the actual PEOs could be here this morning because 
of schedule conflicts at the last moment, Brigadier General Dan 
Montgomery for the Army. Dan is sitting behind me also. He is 
the PEO for the Army's defense missile activities.
    We have Colonel Ted Bowles for the Air Force, who is 
representing Brigadier General Bruce Carlson for the United 
States Air Force who oversees some of our missile defense 
activities, and we work within the Air Force context. 
Unfortunately, Rear Admiral Rod Rempt for the Navy got called 
off at the very last minute.
    This is the instant missile defense team, Mr. Chairman; and 
they are all working with us to execute the theater missile 
defense programs and major defense acquisitions programs for 
missile defense for the Department. Together, we think we have 
a leadership team. I can tell you it hascompletely dedicated 
every one of us to forging missile defense as a joint mission area, a 
joint mission area that we are trying to use or acquire these defensive 
systems.
    I don't need to tell you, you just stated it yourself, 
today more than ever, when conflicts arise, the military is 
called upon to fight jointly in an integrated matter. We all 
firmly believe that we must develop and acquire missile defense 
systems in that same joint manner, and we are dedicated to 
doing that. This way, from the ground floor up, we build into 
those systems and we acquire the ability to communicate, to 
share information and, more importantly, to fight together. In 
some ways, Mr. Chairman, we are breaking new ground for the 
Department in this area.

                            INTEROPERABILITY

    Mr. Chairman and Committee, this past year, BMDO has taken 
on an additional responsibility to develop and to integrate a 
joint architecture for both theater air systems and theater 
missile defense systems, which includes cruise missile defense, 
another major element of concern for the future. In all cases, 
the missile defense programs we have structured are built on 
the important foundation of interoperability. Let me explain 
what this means to us.
    Interoperability literally means the ability to detect and 
track missile threats using a combination of space or sea or 
ground-based sensors, communicating that information within the 
entire missile defense system from one system to the other, 
regardless of its origins or who is the operator, and allowing 
the joint warfighter to make the most effective and efficient 
use of the interceptors to counter the threat. This is the way 
we are trying to operate our programs.
    My prepared testimony outlines some of the important 
efforts we have under way to ensure that interoperability is 
pursued in everything that we do, and you can see that in the 
context of the larger statement.
    Mr. Chairman, working with and strongly supported by the 
Congress, you mentioned yourself the additional $800 million 
that the Congress gave to us last year, we are on the verge of 
fielding comprehensive, highly effective missile defense 
programs that are responsive to the existing and, more 
importantly, to the emerging threat to the United States, our 
deployed military forces, our allies and friends.

                            BMDO PRIORITIES

    We still have within the BMDO three fundamental priorities: 
first, theater missile defense; second, national missile 
defense; and, third, and I am going to talk about this a little 
bit, advanced technology.
    Last year's Quadrennial Defense Review within the Pentagon 
reaffirmed the importance of all of our programs and also 
reaffirmed the priorities of our missile defense programs, 
including the idea of integrated cruise missile defense 
activities into our capabilities. The specific recommendations 
of the QDR were provided to me, to the BMDO in the defense 
planning guidance and the accompanying fiscal guidance from the 
Secretary of Defense.
    BMDO and our service executing agents, the individuals 
sitting behind me and the programs that they oversee, have 
successfully implemented the Department's direction. Our fiscal 
year 1999 budget reflects these priorities for our missile 
defense programs.

                        MANAGEMENT IMPROVEMENTS

    Let me also mention that in order to better manage and 
execute these programs and to successfully field missile 
defense systems for the warfighter, I personally have also 
directed my organization and our service executive agents to 
strengthen our management tools and our processes. Time, Mr. 
Chairman, does not permit to get into some of the details of 
these management improvements. We have provided them in our 
prepared statement, and I would be happy to either address them 
or at some time in the future tell you what we are doing to 
improve management of our programs.

                    FISCAL YEAR 1999 BUDGET REQUEST

    Mr. Chairman, let me quickly address our fiscal year 1999 
program and this budget. The total fiscal year 1999 budget 
request, as you stated, for ballistic missile defense is $3.6 
billion. I have included two charts in my attachments we 
provided to you that outline our specific fiscal year 1999 
budget.
    As you can see, our budget includes $3.1 billion for 
research development, test and evaluation, $409 million for 
procurement, and $17 million for military construction 
activities. Within these three budget categories, theater air 
and missile defense programs account for $2.1 billion or 
roughly 59 percent of our total budget, while our national 
missile defense represents $962 million or 27 percent.
    We are also requesting $253 million for advanced 
technologies, which is about 7 percent of our overall budget. 
BMDO's technical operations, which doesn't just include 
operating our offices, but also some of the other things we do 
to support the major programs that we are developing, accounts 
for $194 million and is about 5 percent of the budget.
    Finally, two of our new program elements, threat and 
countermeasures and international cooperation, represent a 
total of $72 million or 2 percent of the budget.
    Mr. Chairman, while very challenging on all fronts, our 
theater air and missile defense programs are progressing well, 
and we literally are on the verge of meeting some major 
milestones. I would like to provide you with a quick summary of 
where we are today.

                 PATRIOT ADVANCED CAPABILITY-3 (PAC-3)

    Let me start with the Patriot PAC-3. This is the most 
mature of our theater air and missile defense systems. It is 
currently in the engineering and manufacturing development 
phase of the acquisition process. PAC-3 is being fielded in the 
course of three phased upgrades. Currently, we have fielded the 
first two of these phases or configurations of the PAC-3, 
providing the Army with improved operational performance, 
greatly improving the capabilities that we had since Desert 
Storm. These two configurations are available in the Middle 
East today, Mr. Chairman, in the case of a conflict with Iraq.
    The third configuration will provide the final element of 
PAC-3 in the form of hit-to-kill interceptor technology, the 
capability we ultimately need to counter threats of weapons of 
mass destruction. I expect that the first PAC-3 with hit-to-
kill capability will intercept its first--make its first 
intercept flight test in May of this year, a couple of months 
from now, and that intercept will be followed by a decision to 
begin low-grade initial production for this new missile.
    The first deliveries of the ground system hardware and 
software for PAC-3 have already begun, and development and 
operational testing will start later this year. All of these 
efforts support a first unit equipped date of late fiscal year 
1999, less than 2 years from now, for the factory system. 
Nevertheless, let me footnote and reemphasize that the 
configurations that we have in the field today of Patriot can 
defeat the current threat that is represented in the Middle 
East.

                     NAVY AREA PROGRAM (LOWER TIER)

    Let me switch to Navy Area. Following last year'ssuccessful 
intercept flight test almost exactly a year ago, the Navy Area Program 
was approved for entry into EMD, engineering and manufacturing 
development. The program will commence development flight tests 
beginning in fiscal year 1999, followed by an at-sea demonstration of 
the User Operational Evaluation Systems, or UOES capabilities, in 
fiscal year 2000. Low Rate Initial Production will begin in fiscal year 
2000 also, with a first unit equipped date of fiscal year 2001.

                   THEATER HIGH ALTITUDE AREA DEFENSE

    Let me switch very quickly to Theater High Altitude Area 
Defense System, or THAAD. The THAAD program, as you noted, Mr. 
Chairman, is the most mature of our Upper Tier TAMD systems. In 
1997, as a result of our failure to achieve an intercept flight 
test, we began a major effort to ensure that we understood 
exactly what the design looked like and that we understood 
exactly what the problems were with the program and how we 
needed to solve them. The QDR endorsed a plan to restructure 
the program because we had the failures and directed that we 
achieve a first unit equipped in the year 2006, vice 2004, 
which is what we were aiming towards previous to our flight 
test failures.
    Following a very successful THAAD unit flight test this 
year, and I will talk a little bit more about that, we plan to 
execute the UOES missile buy for THAAD of about 40 missiles. 
This will provide us with some very early interim systems for 
testing and, in addition, provide the warfighter with an 
interim capability in case of a contingency conflict.

                     NAVY THEATER-WIDE (UPPER TIER)

    Let me switch to Navy Theater Wide. The Navy Theater Wide 
program is currently in the program definition and risk 
reduction phase of development, and they are preparing now to 
have their initial Defense Acquisition Board, or DAB, review in 
April of this year.
    The Navy program office and specifically their PEO, Rear 
Admiral Rod Rempt, has proposed, and I fully endorse, an 
evolutionary acquisition approach for the Navy Upper Tier or 
Navy Theater Wide program. This evolutionary acquisition 
approach consists of providing an initial Block I system 
capability followed by a more capable Block II system. This 
Block I capability for Navy Upper Tier will provide us the 
Upper Tier capability of aegis platforms. It will be able to 
counter the medium range threat and will be able to counter the 
threat similar to the No Dong threat that we seek today in some 
areas of the world. The Milestone I-level review, the DAB 
review for the program, will review and approve this proposed 
evolutionary acquisition strategy.
    Meanwhile, we are pressing on in the Navy's Upper Tier 
program with the Navy risk reduction effort and we are planning 
to conduct, starting later this year, the aegis intercept tests 
to assure that we are keeping up with technology associated 
with Navy Upper Tier.

                   MEDIUM EXTENDED AIR DEFENSE SYSTEM

    Mr. Chairman, I talked about the programs that are 
currently under way. Let me talk about a program that is not 
fully under way but one that I know is very strong in the 
hearts of the Congress, in addition to those of us in the 
Department.
    It is MEADS, the Medium Extended Air Defense System. It is 
our cooperative program with Germany and Italy. That program is 
currently in the project definition and validation phase and is 
scheduled to be completed of that phase in the first quarter of 
fiscal year 1999.
    Negotiations for the next phase of the MEADS program are 
currently under way with both of our international partners. 
The QDR, the Quadrennial Defense Review, recommended 
continuation of MEADS and increased the fiscal year 1999 
funding for the program to allow us a bridge between the 
current phase of the program and the next intended phase for 
MEADS.
    In light of the QDR guidance and the importance of this 
international program and continuing congressional interest in 
outyear funding, MEADS was raised during our last budget cycle 
through the Department and we deliberated and looked at it 
very, very hard. Nonetheless, other defense program priorities 
superseded addressing this issue, and we are unable to clearly 
define how we are going to fund the program in the year 2000 
and beyond.
    I can tell you, Mr. Chairman, that during this next POM 
process, which is the 2000 POM process that will begin this 
spring, the Department and my organization will identify 
resource requirements and alternatives for us to figure out 
exactly how we might structure the MEADS program and to look at 
ways that we might be able to finally support the program for 
the outyears.

                          FLIGHT TESTS DELAYS

    Mr. Chairman, I mentioned earlier and I know the Committee 
is very interested in flight testing of our Theater Missile 
Defense System. You are very aware I think of the recent slips 
in a couple of our major tests planned for this year. Let me 
quickly address those two issues; and, again, I will be very 
happy to answer any questions you might have.
    The PAC-3 program. Our first hit-to-kill test was 
originally scheduled to be conducted this month, the month of 
March. We have had some flight test delays in the PAC-3 
program; and we are now looking towards having our first hit-
to-kill test in the May time frame, late May time frame. The 
results of those slips or the reason for those slips were the 
aggressive testing and ground testing we have done where we 
have uncovered some software development problems that are 
taking a little longer than we had originally planned, and we 
want to make sure that we complete all of the tests 
satisfactorily before we take the PAC-3 out to White Sands and 
begin our flight testing. We plan for this test to fly later 
this spring, as I just mentioned.
    The preflight qualification efforts that we are currently 
doing are absolutely critical to ensure that all of the 
systems, all the hardware, all the subsystems are performing 
exactly the way we want them to perform before we actually try 
to conduct a flight test. Even with this delay, from March to 
May, I expect that we will conduct all of the scheduled PAC-3 
flight tests that were planned for this year, Mr. Chairman.
    Similarly, as you know, we have experienced some delays in 
THAAD. We are hoping to start the flight testing again for 
THAAD this month, again, in March. After last year's flight 
test, BMDO, the Army, and the prime contractor each 
commissioned independent review teams to review the entire 
THAAD program from cradle to grave and looked at every 
different aspect of the THAAD program. We looked at program 
processes, we looked at design, we looked at the entire 
missile, we looked at everything associated with THAAD to 
ensure that we understood what we had there.
    I believe the IRTs have had a direct positive impact on the 
way the THAAD program is now conducting its business, both 
within the government and certainly within the contractor 
arena. As a result, we have increased the rigors of our testing 
program to verify the design as we prepare for our next flight 
test.
    The IRTs, the independent review teams, I would like to 
mention each one of them, have fully agreed that the design for 
the THAAD program is very sound, but that systems engineering, 
quality and reliability issues existed, and those are the kinds 
of things we have been addressing since the last hearing. As a 
result of these rigorous tests that we have been conducting 
where we detected the most recent technical problems, we have 
now addressed those problems and we are now well on the way to 
being prepared for our first intercept, successful intercept 
test in the May time frame.
    Mr. Chairman, I can tell you that I actually applaud the 
THAAD team for discovering the faulty components and the things 
that caused us a little concern in the last couple of months 
that caused the delays. They are exactly the kind of rigors of 
testing, rigors of analysis that we have to have to ensure that 
we have successful flight tests. We didn't quite have the same 
sort of rigor previously. I can tell you, Mr. Chairman, we 
certainly do now; and I am confident that, when we fly, we will 
have a successful flight test.

                        THEATER MISSILE DEFENSE

    Finally, to close my remarks about theater missile defense, 
I would like to make a brief comment about another critical 
element of our family of systems theater missile defense 
architecture. This is a program that is not managed by BMDO, 
even though it is within our theater missile defense 
architecture. It is the airborne laser program, the only 
program we currently have in the Department to test boost-phase 
intercept, a capability we really need for theater missile 
defense.
    BMDO and the Air Force are working very closely to ensure 
that the airborne laser program is effectively integrated into 
our family of systems. It will provide our warfighters with a 
powerful capability and will strengthen our overall missile 
defense architecture.

                         AIRBORNE LASER PROGRAM

    Let me deviate very quickly from my prepared remarks, Mr. 
Chairman, and give a personal comment. There have been some 
remarks I have heard from some sources here in Congress who 
have questioned whether or not BMDO and particularly me fully 
support the airborne laser program. I can tell you that I have 
complete confidence and complete support for ABL.
    In some respects, I am sort of like a fox in a hen house 
because the airborne laser program used to report to me in my 
previous capacity. I understand the technology, I understand 
the risks, I understand how the program is laid out, and I have 
complete confidence in the contractor team, the government team 
that is managing the airborne laser program.
    So anybody who has stated that BMDO and particularly 
General Lyles do not support airborne laser really do not know 
what they are talking about. I am a complete supporter of the 
airborne laser.

                        NATIONAL MISSILE DEFENSE

    Let me turn very quickly to our national missile defense 
program or NMD. As you know, the primary mission of NMD is 
defending the United States against a ballistic missile threat 
by a rogue nation should such a threat emerge. In addition, NMD 
will have some capability against a small accidental or 
unauthorized launch of a ballistic missile from one of the 
current nuclear powers.
    As you know, to ensure that the Department has a required 
capability to defend our Nation, all 50 States, against an 
emerging threat, it has adopted an ambitious program that we 
call ``3 plus 3.'' By the year 2000, Mr. Chairman, we will be 
in a position to make a deployment decision, if warranted by 
the threat, which would result in the deployment of an initial 
NMD system by the year 2003. The program is laid out so that in 
2000 a threat assessment will be done, and that threat 
assessment may not warrant actual deployment. It depends on the 
threat, and we will be consulting both within the building and 
with Congress about the nature of the threat when we come to 
that particular decision.
    If a decision is made not to deploy because a threat does 
not warrant in the year 2000, we have a continued program of 
improvements to our NMD system and literally to allow it to 
continue to improve the capability, refine the capability, but 
we will always be prepared to deploy the system within a 3-year 
time period if something crops up relative to the threat.
    This is a very challenging program, and to meet these 
challenging schedules and other technology risks and to 
mitigate those risks we have taken numerous steps to leverage 
the previous technologies and previous programs that have been 
ongoing. The NMD system has gained development with what we 
call a flexible architecture to allow for a variety of 
deployment options in order to respond to the unknown and 
emerging threats and to provide us with an evolutionary path in 
order to give us a robust capability.
    We are building on various elements that exist today. I 
think I provided you a chart that shows you some of those 
various elements. I won't talk to them specifically in my 
comments right now, but, again, I can answer any questions you 
might have.
    Literally, as we approach the year 2000 and a potential 
deployment decision and we assess the threat to the United 
States, we will be in a position, Mr. Chairman, to determine 
which NMD capabilities, which one of our two systems, we will 
need to address the threat.
    During the last year, we have actually conducted two very 
successful flight tests for the NMD program. These flight tests 
were specifically addressing the design and trying to compete 
with the design and development of the Exoatmospheric Kill 
Vehicle, the front end of the missile, the front end that has 
to see the target and literally make the intercept.
    We have two competing teams and we have each one of these 
teams conducting fly-off tests, the first of a series of fly-
off tests to determine what their capabilities are. The first 
of these sensor flight tests, as we call them, took place in 
June last year, June 23, 1997. The second test occurred earlier 
this year, on January 16 of 1998.
    These tests were done to analyze the ability of the 
sensors, these EKV sensors, to identify and track objects in 
space and to identify a representative threat target, which is 
the real target and which are decoys. Both of those tests were 
very, very successful, and we have a very, very strong 
competition ongoing.
    The next flight test will be part of this EKV series of 
tests, and we will do it as part of our ``3 plus 3'' program. 
The next test will be planned to be an intercept test to be 
conducted later on this year.
    Mr. Chairman, as I think you are aware, BMDO and our joint 
program office, headed by General Cosumano who is behind MEADS, 
will announce the award of the Lead Systems Integration 
contract, a prime contractor for our NMD program. We have two 
very, very strong industry teams that are competing for this 
particular contract. One is the Boeing Company and the other is 
the United Missile Defense Company, a joint venture between 
Lockheed Martin, Raytheon and TRW. The LSI contractor's main 
task will be to complete theelement development and integrate 
all the elements we need for a national defense system into a total 
system to provide the Department a viable deployment option in the year 
2000. We have received two excellent proposals. We are in the 
evaluation phase, nearing the end of the evaluation phase, with those 
proposals right now; and we are scheduled to have a decision briefing 
coming up in the latter part of April and the first part of May.
    The NMD program, I think, Mr. Chairman, is progressing 
very, very well. We have benefited very strongly from the 
additional money that the Congress has provided us to allow us 
to add additional tests and do additional risk reduction for 
the program, and I am confident that we are well on the way to 
developing a national missile defense program for the country.

                          ADVANCED TECHNOLOGY

    Finally, Mr. Chairman, I would like to close by briefly 
talking about our advanced technology effort. As the Committee 
is very well aware, BMDO is a reincarnation or evolution of the 
old SDIO program. The SDI and SDIO focus was largely on 
technology; developing robust, advanced technologies to give us 
a potential capability for missile defense in a wide variety of 
different fronts. The funding that was provided by Congress 
over the years to SDIO and its technology efforts in some 
respects were the seed corn that allowed us and have allowed us 
to do what we are doing today in all of our programs of theater 
missile defense and national missile defense.
    Dividends from those investments have paid off 
substantially. Today's PAC-3, as an example, emerged from the 
technology development program called ERINT under the SDIO, and 
there are very, very similar examples like that.
    Today, our technology budget accounts for only 7 percent of 
the overall BMDO budget request. Mr. Chairman, I will tell you, 
this concerns me. I know we are constrained in dollars, but we 
still recognize a robust technology investment is still 
absolutely necessary to address both the near-term technology 
needs and things that we can provide to help our current 
programs in the very near future but also to address future 
threats.
    It is the latter part that concerns me more than anything 
else. We have made reductions and we have had reductions in our 
technology budget because of our budget constraints, but in 
spite of and perhaps because of those reductions we have done a 
couple of very smart things to try to leverage our technology 
dollars.
    I won't go into all of the details. My prepared statement 
will tell you more details about those things, but we are 
trying to make sure that we are working closely with the 
services and we are working closely within our own community to 
understand and leverage where we need to spend our very scarce 
technology dollars.
    We have developed or are developing a technology master 
plan; and we have something we call a Joint Technology Board 
that provides me inputs on technology efforts not just from 
within my own community within BMDO but specifically from the 
services--from the Army's technology people, from the Navy's 
technology people, and from the Air Force's technology people. 
Together we are trying to identify where we need to spend our 
scarce technology dollars and how we can leverage off from 
other programs that are addressing technology needs that are 
very similar to the ones we have within BMDO.
    Nevertheless, we are going to be doing everything we can to 
try to see where we can provide robust technology programs and 
some increases in some very critical technology areas for 
missile defense. No other organization is addressing some of 
those needs, so we feel we have to take this on.

                                SUMMARY

    In closing, Mr. Chairman, I appreciate again the 
opportunity to appear before this Committee and to share my 
perspectives on ballistic missile defense programs in our 
budget. I will tell you again, this is a very, very ambitious 
year for us and a very, very important year for the world of 
missile defense. We will attempt more flight tests, more 
intercept tests this year than in any previous year.
    As you have already seen, some of these tests are already 
experiencing delays but, in all honesty, Mr. Chairman, I 
encourage the Committee to not equate delays with failure. 
These are very, very complex programs and systems that we are 
working on. They operate at extreme conditions of speed, 
atmospheric pressure, short times for flight, with some very 
specific and very strong demands on discrimination kinds of 
methodologies we need to have, et cetera. I feel very confident 
we are going to create a family of systems that are 
interoperable and that is going to be the focus of all of our 
flights and activities over the next coming years.
    Mr. Chairman, I can also tell you from a personal 
standpoint, after another year as director of ballistic missile 
defense, I am totally impressed with the total team that we 
have. To address some of the team members that are with me here 
today, this is a combined government and industry team. 
Industry is very strongly behind us and industry is working 
very hard to address all of the issues and all of the concerns 
that we have and that the Congress has, and I feel very 
confident again that we are going to make joint mission area 
acquisition for missile defense a success, not just for us, not 
just for the Congress but, more importantly, for the country.
    Mr. Chairman, I will close my remarks, and I look forward 
to your questions or the questions of other members.
    Mr. Young. General Lyles, thank you very much for what I 
would consider a very enthusiastic and positive presentation.
    [The statement of General Lyles follows:]

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



    Mr. Young. I am going to yield briefly part of my time to 
Mr. Cunningham for one quick question.

                   THEATER HIGH ALTITUDE AREA DEFENSE

    Mr. Cunningham. Very briefly, Mr. Chairman. Thank you.
    I am a strong supporter of THAAD, and also I believe that a 
coordination of Upper Tier with the Navy will enhance, 
especially in areas like the Gulf, if we end up going into the 
Taiwan area, those kinds of things. Are you working close in 
the coordination with THAAD and Upper Tier system, and do you 
believe that that would be a better total package?
    General Lyles. Congressman Cunningham, that is absolutely 
the focus of all of our efforts--the interoperability of almost 
all of our systems, Lower Tier and Upper Tier, Patriot and 
THAAD, Patriot and Navy Lower Tier, Patriot and THAAD and Navy 
Upper Tier. We are working very closely to ensure that this 
entire family of systems are interoperable to provide us the 
capabilities that we need.
    I like to point out to people that use their hands, as I 
told somebody jokingly yesterday, sort of the Italian way of 
expressing things is by using my hands. If we worked on any one 
of the programs, Navy Upper Tier or THAAD or Patriot alone, we 
would have this much capability for the United States.
    Mr. Cunningham. So you do support it?
    General Lyles. Yes, sir.

                        NATIONAL MISSILE DEFENSE

    Mr. Young. General, one of the statements that you made 
about National Missile Defense is you talked about deployment 
or nondeployment of a system. You said it would take about 3 
years to deploy, but if something cropped up, we could move 
quickly. In the opinion of this Member, and I think quite a lot 
of other Members, 3 years isn't a very quick response if 
something crops up.
    You mentioned No Dong missiles. They are getting more range 
all the time. Realistically, where do you see the threat when a 
National Missile Defense should be in place and should be 
deployed?
    General Lyles. Mr. Chairman, let me just clarify. Our ``3 
plus 3'' program, of course, has the first three of that ``3 
plus 3'' title for development. We then test to make sure we 
actually have the capability, to make sure we have actually 
developed the kind of capability we need, and then we are 
prepared to deploy in another 3 years after that.
    In all honesty, 3 years from start, from go to deploy a 
weapons system, is fairly rapid compared to most programs 
within the Department. I recognize that it may not be as rapid 
as we, any of us, would like in the face of the kinds of 
threats that we are looking at, and probably the key thing that 
we will have to make sure we get is good intelligence 
information on when the threat is going to materialize.
    The reason we have that second 3, and we look at the threat 
very closely, is so that we can give ourselves lead time, that 
3 years lead time to get capability out there before the threat 
actually materializes.
    The kind of threats we see are threats from rogue nations. 
You mentioned the No Dong, and there are obviously some 
variants of No Dong called Taepo Dong that the North Koreans 
are thinking of developing. There are other systems that we 
understand the Iranians may be developing. From a rogue-nation 
standpoint, those probably represent the compendium on the 
threats.
    But I also mention, and I am always reminded of this by the 
warfighters, we also want to have a system that protects 
against an unauthorized or potential accidental launch from one 
of the current nuclear powers.
    Mr. Young. Well, I understand that many of us are anxious 
about defending America from a missile threat, and the National 
Missile Defense is very important to us. So keep moving that 
along. At least one Member would like you to do that.
    General Lyles. Yes, sir.
    Mr. Young. Now, the question that I had, back to the 
budget.
    As I mentioned earlier, the President's budget is a lot 
better this year as it relates to missile defense, but as we 
look at the projected outyears it looks like the funding is 
going to drop considerably. What is this going to do to the 
programs? The programs that we initiate or that we accelerate 
today with the increased funding, what happens to them in 
fiscal year 2000, 2001 and so on and so on? To me, it doesn't 
appear that the outyear funding is going to be adequate.
    General Lyles. Mr. Chairman, you are correct in many 
respects. When we look at the total dollars for the outyear for 
all of our programs, we recognize, and I think something very 
important to this Committee and many others, that we have an 
affordability issue, of being able to afford to pay for all of 
the programs we currently have on the books.
    We are going to be addressing that affordability issue but, 
more importantly, addressing the funding we need to ensure we 
have the capability we need in the upcoming Program Objective 
Memorandum 2000 for the next 5 years or so. This is a specific 
issue that is going to be addressed during the POM, and one of 
the programs that we obviously are going to have to address 
from that standpoint is Navy Upper Tier.
    The current structure for Navy Upper Tier program for the 
funding that we currently have outlined shows about a 4-year 
gap between the time we finish our risk reduction activities 
and the time we start developing flight testing. None of us 
think that is a wise thing to do, so we are seriously looking 
at how we structure the program. That is going to be reviewed 
in the Defense Acquisition Board, but also what are the options 
and how might we make sure we have more robust funding for Navy 
Upper Tier.
    Mr. Young. General, thank you very much.
    Let me yield now to Mr. Dicks.

                         AIRBORNE LASER PROGRAM

    Mr. Dicks. General, I want to compliment you on a very 
comprehensive statement. I was pleased to hear about your 
support for the airborne laser program.
    Let me ask you a couple of questions.
    First of all, give the Committee a sense of why you think 
it is important to have a system that can attack these missiles 
in the boost phase, and if you could also discuss any technical 
challenges that we face with this particular program I would 
appreciate it.
    General Lyles. Yes, Congressman Dicks. Let me start with 
the issue of why it is very important.
    Boost phase intercept is really a key part of our overall 
architecture for missile defense. As you know, once we get this 
capability, particularly with airborne laser, we would have the 
opportunity not only to counter the threat but, more 
importantly in many respects, we will have an opportunity to 
provide a deterrence.
    A Saddam Hussein or somebody else who might be anadversary 
in the future will think twice if he knows that we have the ability to 
shoot down air threat missiles over their territory, particularly if 
those missiles carry weapons of mass destruction, either chemical or 
biological or, God forbid, nuclear warheads. Boost phase intercept will 
give us that capability, shoot down that missile while it is in its 
boost phase over their territory. We think that is an important part of 
our architecture.
    There is another reason that goes back to a study we did 2 
years ago, literally just before I came on board.
    We did a study to evaluate the inventory of missile defense 
systems that we would need for protecting ourselves in the 
United States, protecting our forces against the kind of 
threats we think are going to be available in the future. And 
one major assumption that we made was that we can deplete and 
attrit some of the threats out there by having a boost-phase 
capability. We didn't say what. We just assumed something like 
a 20 percent attrition due to having boost-phase capability and 
an attack ops capability to shoot down the tails and those 
sorts of things on the ground.
    Now, having made those assumptions and as a result of that, 
sizing our inventory and forces to me is very important, that 
we get up with the programs that actually give us that 
capability and make those assumptions very, very true. So, to 
me, it is extremely important that we have that capability.
    Mr. Dicks. All right. What are the technical issues here?
    General Lyles. Speaking from my past, as the program used 
to report to me, probably the key technologies are being able 
to get a flight weight laser, a laser to give us the kind of 
power we need and put it on a platform like a 747-400 
freighter.
    The Javelin laser program is on schedule to do risk 
reduction effort and, actually, we are scheduled to fire the 
first flight weight laser module, the first module, this 
spring, later on this spring, early on this summer. That would 
be one of the problems that we have been able to solve, that 
particular technology risk.
    Another risk is being able to integrate and fire the laser 
off of a platform flying at 40,000 feet in the atmosphere and 
still be able to target and get a small beam to the target. 
There are lots of things being done to address that risk area 
by the program office, lots of flight tests, lots of ground 
tests. To me, they have addressed some of the concerns raised 
by the General Accounting Office earlier this year; and there 
is a lot more data to show that they are solving, if not have 
already solved, that particular problem.

                   THEATER HIGH ALTITUDE AREA DEFENSE

    Mr. Dicks. Let's switch over to THAAD. We are all concerned 
about the failure of the testing program up to this point.
    Have there been increases in the THAAD program? 
Specifically, have there been increases in the baseline 
selected acquisition report estimates; and, if so, how much?
    If you need a little help on this, we have a copy of a 
report here that says that the basic program was $4.3 billion. 
Now, it shows here that the increases, because of the problems 
we have, are $3.4 billion. Now, in other words, the program has 
increased from approximately $4.3 billion to $7.7 billion. Is 
that accurate?
    General Lyles. I think that is accurate, Congressman Dicks, 
but I would like to verify those specific numbers and get a 
response to the committee. The last number is correct.
    Mr. Dicks. That is a very substantial increase in the cost 
of this program. I mean, has that been budgeted for? Are we now 
assuming that this is accurate and, therefore, it is going to 
cost us $3.4 billion more to do the testing program?
    General Lyles. Congressman, we have budgeted for the number 
that you mentioned previously, the $7 billion number. What I 
can't verify is the $3 billion and when that actually occurred 
in the program.
    As you know, THAAD has been restructured because of the 
flight test anomalies over the last couple of years. We did 
slip just in this past year because of last year's failure from 
a first unit equipage of 2004 to a first unit equipage of 2006. 
That slip did not account for all of the increase that you just 
mentioned. So I would like to verify that number and get back 
to you.
    [The information follows:]

    We have in fact incurred significant cost growth in the THAAD 
program since the development was initiated in 1991. The original 
Research, Development, Test, and Engineering (RDT&E) program was 
estimated to cost $4.3 billion; that program plan called for a 48 month 
Program Definition and Risk Reduction (PD&RR) phase (fiscal year 92-
fiscal year 96), followed by a 60 month EMD phase and led to 
declaration of First Unit Equipped (FUE) in fiscal year 02. I believe 
this is the SAR estimate to which you refer. The following table is 
extracted from the June 30, 1997, SAR and provides a breakout of the 
components of the cost increase:

------------------------------------------------------------------------
                                                                fiscal
                                                     TY$M       year 88
                                                                  C&M
------------------------------------------------------------------------
Economic........................................      -318.3  ..........
Quantity........................................  ..........  ..........
Schedule........................................     1,278.6       808.9
Engineering.....................................     1,241.6       850.8
Estimating......................................     1,241.7       874.2
Other...........................................  ..........  ..........
Support.........................................        -4.4        -3.9
                                                 -----------------------
    TOTAL.......................................     3,439.2     2,530.0
------------------------------------------------------------------------

    Since the program's inception, the Department has implemented three 
major restructures--a result of both technical problems specific to 
THAAD, and competing modernization requirements across DOD programs. 
Since June 1997, the total program cost estimate decreased from $7.7 
billion to $7.3 billion as cited in the December 1997 SAR and reflects 
a development program that continues until fiscal year 07, with FUE 
declared at the end of fiscal year 06.
    There are a number of major contributions to this cost growth, to 
include the program restructures I've noted, contractor cost overruns, 
the addition of new scope to the program, and a change in cost 
estimating methodology. As a result of flight test delays and program 
restructures, the program's FUE has been delayed 4 years with an 
increase in the contract period of performance in both PD&RR and EMD. 
Further, the contractor has incurred additional costs as a result of 
flight test problems and the need to implement corrective actions 
following flight test failures.

    Mr. Dicks. Let me just follow up here. It says, schedule, 
$979.4 million, engineering, $770.4 million, estimated, $558.8 
million. That is a total of $2 billion, $15 million. Then down 
below that it says, schedule, $299 million, engineering, $471 
million, estimated, $652.9. What is estimated?
    These are current changes in the program. I can understand 
schedule, engineering, but what is estimated?
    General Lyles. Okay. I am sorry. General Montgomery just 
reminded me.
    That is the estimate for the operational and support costs 
for the program. The one thing that we have not fully defined 
yet is the operational support outyear cost of the THAAD 
program, and the estimated number you see there reflects the 
O&S part that we don't firmly have the numbers for yet.
    Mr. Dicks. Well, again, THAAD is a very important program, 
one that I have strongly supported, but I mean I am very 
concerned that we kind of have an open-ended financial 
situation where this was sold to us on a basis of being about a 
$4 billion program and now we are at $7.7 billion. I think we 
are going to have some problems.
    Thank you, Mr. Chairman.
    Mr. Young. Mr. Skeen.
    Mr. Skeen. General, good to see you.
    General Lyles. Thank you, sir. How are you?

                       WHITE SANDS MISSILE RANGE

    Mr. Skeen. General Lyles, the White Sands missile range I 
think is our best customer, and we appreciate that. Could you 
give us some idea of what kind of schedule we have this year 
for tests at White Sands?
    General Lyles. Congressman Skeen, we have a lot of tests 
planned this year for all of our programs.
    The PAC-3 program, the Patriot Advanced Capability 3 
program, we are scheduled to start on our flight test, our 
first hit-to-kill test, in the late May time frame, with 
several other tests planned over the next year at White Sands 
missile range.
    Our THAAD program is scheduled to have its first successful 
intercept, and I say that very positively.
    Mr. Skeen. We are for you on that.
    General Lyles. Yes, sir.
    Mr. Skeen. We suffer every time you miss.
    General Lyles. We do, too, sir.
    Mr. Skeen. So we want you to know how much we appreciate 
what you have done out there and how well it is coming along. 
It will be a success.
    General Lyles. Yes, sir. Thanks a lot.
    Mr. Skeen. We thank you.

                     PATRIOT ADVANCED CAPABILITY-3

    Mr. Young. Mr. Hefner.
    Mr. Hefner. Good morning, General. Good to have you here 
today. I want to ask a couple questions.
    Listening to your testimony and not being an expert in 
anything in particular but certainly not in missiles and that 
sort of thing, I would like to know how much more effective are 
the Patriot missiles? They have been around with us for years 
and years. How much more effective do you think they are than 
they were in the Persian Gulf? We never really did get a real 
feel on how effective they were overall in the Persian Gulf. 
How effective are they?
    General Lyles. They are significantly effective, 
Congressman Hefner. And, if you don't mind, I have prepared a 
couple charts just to hand over very quickly; and I will ask my 
staff to do that.
    I want to graphically show you exactly the improvements 
since Desert Storm but, more important, to give you a feel for 
what we have out in the desert today, out in the Middle East 
today, and what we would have had in terms of capability if we 
did have a conflict with Saddam Hussein. The improvements are 
significant, and I think you see them graphically by the chart. 
I will wait until you get there.
    The first chart you see, the graphic talks about Patriot 
system performance versus a 500 kilometer threat. That is 
roughly the threat that exists today in theater missile defense 
arena, the kinds of threats that Saddam Hussein and others have 
in the inventory of SCUDs, latest generation of SCUDs. We have, 
since Desert Storm, the capability that we have today four 
times the coverage versus the 500 kilometer threat.
    What you see on the graph on the right hand side, the one 
area represents the area that we protect during Desert Storm. 
The green represents the area we can protect today with today's 
improvements in the Patriot system, in configuration 2, that we 
have today. And the blue represents where we really are going 
to be, where we really need to be, the kind of capability we 
will have with the full PAC-3. You see that range presented a 
different way, the cross range on the left-hand side of the 
chart.
    [Chart follows:]

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



    
    General Lyles. If I can ask you to switch to the second 
chart. This is something I think is even more dramatic because 
of some of the threats that are emerging. This shows Patriot 
capability against a thousand kilometer threat. We didn't have 
any particular capability against a thousand kilometer threat 
during Desert Storm. So if you look at the graph, both sides of 
the graph, you don't see any white area. We couldn't protect 
against this kind of threat during Desert Storm. What you see 
in green is the kind of capability we do have today. And, 
again, blue is the capability we will have in the very near 
future.
    There are some specific numbers I can give you, 
Congressman. It would be classified for me to mention them. I 
would be happy to come back and talk about specific numbers. 
But I think these graphics sort of illustrates what we can do 
today, where we are since Desert Storm and, more important, 
where we are going to be in the future.
    [Chart follows:]

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



    
                       AIRBORNE LASER OPERATIONS

    Mr. Hefner. I want to ask a couple of questions here.
    We talk about the two tiers; and what I am interested in, 
you talk about the airborne laser, and you want to be able to 
destroy a missile in the launching stage. How much time do you 
have there? What is the window that you have in the launch 
phase that would be requied to consider the hit a success in 
the launch phase?
    General Lyles. Congressman, let me describe the general 
concept of operations. And the specific numbers are classified. 
But one reason we have the airborne lasers--and the orbits the 
airborne laser will be flying at is 40,000 feet. One is to get 
above the cloud cover, if you have a cloud cover scenario; and 
at 40,000 feet you are going to be assured that 99 percent of 
the time you will be above any cloud that might be in the air.
    Mr. Hefner. Let me interrupt you. Because I am assuming 
that we are going to know where these missiles are.
    General Lyles. Roughly, yes, sir.
    Mr. Hefner. They are going to be targeted. The point I am 
getting at is, how quickly? Because you are going to know the 
very instant that they are launched. You have to have some 
evidence that they are launched. How long would it take it to 
respond to the launch to be able to use the laser to destroy 
them?
    General Lyles. Without getting into specific classified 
information, it is roughly less than a minute. And we will be 
able to, with our satellite sensors, to detect when they are 
launched, to cue the airborne laser platform so we can slew. Or 
if it is flying to one specific direction, slew the actual 
turret with the laser on it to point it in that specific 
direction and literally be able to fire the laser when the 
missile breaks through the cloud cover at 40,000 feet.
    Once we do that, we will lase the target, lase the missile. 
Again, the specific number and how long in seconds it will do 
to take lasing to actually destroy it is classified. But I can 
tell you it is less than 10 seconds.
    Mr. Young. Will the gentleman yield?
    Is that real or is that theory?
    General Lyles. I consider that to be very real, Mr. 
Chairman.
    Mr. Hefner. What amazes me is do you consider whenthe 
missile is launched, or whatever the term is used, to be in the launch 
mode. Will the Navy be able to intercept a missile in its ascent stage?
    General Lyles. Ascent, yes, sir.

                         BOOST PHASE INTERCEPT

    Mr. Hefner. That is in the launch stage?
    General Lyles. Ascent is while it is still in the upper 
part of its trajectory.
    Mr. Hefner. The laser, the way I understand it, you are 
going to hit him before he really got a good head of steam up.
    General Lyles. Yes. As a matter of fact, one of the 
specific kill mechanisms, Congressman, the reason we call it a 
boost phase, a booster engine for the SCUD or whatever the 
target might be is still being fired, it is still in that boost 
phase. That is critical. Because during that phase is when the 
tank of the SCUD is still pressurized, and it is that 
pressurization plus the lasing that actually causes the 
failure.
    Mr. Hefner. And your platform would be in a position where 
you could use the laser within 10 seconds?
    General Lyles. Between the time we detect the actual launch 
and the time it breaks through the cloud cover or against 
roughly 40,000 feet, we should be able to slew the turret on 
the nose of the airborne laser to point in the direction and 
aim to be ready to fire.
    Mr. Hefner. Well, I like the concept and I like your 
optimism. And it makes a lot of sense to people especially if 
they were carrying chemical warheads and it blows up it is 
going to blow up in their backyard. And I understand that. I 
just am a little bit concerned. Mr. Dicks talked about the cost 
and we don't really have anything we can get our teeth into 
that we have had some real successes. And we have been burned 
on this Committee on some things that we stuck a lot of money 
in and we made excuses for them. You know, it is like the folks 
that are responsible for a program and, when it fails, somebody 
else says, I remember this program. It wasn't my program.
    I hope that you are right. Because we spent a lot of money 
on this program and lot of time and we don't have anything that 
we can go out to the public and tell them, these are the 
successes we have in the past programs.
    Of course, not a lot of folks understand it. I don't really 
understand it. But I am leaving after this year, so I will be 
one of the critical people that are complaining about you 
spending so much money on something that doesn't work.
    General Lyles. Yes, sir.
    Mr. Hefner. But I am a little bit concerned about it, and I 
hope it is not one of those that we can look back on and say, 
there is another Sergeant York or, in my opinion, the B-1 
bomber, which in my view was a total disaster even though we 
don't want to admit it.
    I wish you well, and you certainly seem to know exactly 
what you are talking about, and that gives me some confidence 
also. It is good to have you and your supporting staff here 
with us today.
    I have no further questions.

                  SUPPLEMENTAL MISSILE DEFENSE FUNDING

    Mr. Young. Mr. Hefner, thank you very much, sir.
    General, Congressman Weldon is proposing legislation that 
would authorize the appropriation of an additional $147 million 
for fiscal year 1999. You are familiar with that legislation?
    General Lyles. Yes, sir, I am, Mr. Chairman.
    Mr. Young. Give us your reaction to that proposal and what 
you think it would do to your programs.
    General Lyles. Mr. Chairman, as you know, that proposed 
legislation came out of the emerging medium range threat that 
we think is being developed in Iran, specifically the Shahab-3 
missile, which will have a range of about 1,300 kilometers. The 
concern is that that system could come into the inventory for 
the Iranians a lot quicker than our original intelligence 
estimate.
    By the way, I think the director of CIA in testimony to the 
Congress last month sort of reaffirmed reassessment of when 
that threat might materialize. The concern is that it might 
hold our allies, our forces hostage and vulnerable to having 
that capability. The interest was to see if there are things 
that we need to do now to ensure that we can protect ourselves 
from that vulnerability.
    As you know, Mr. Chairman, our upper tier programs, 
particularly the Navy Upper Tier, were designed or are designed 
to go against a medium range and long range threat. 
Technically, the lower tier programs, PAC-3 and the Navy system 
we are going to be fielding in the next couple years were not 
designed to go against that caliber a threat.
    I will come back to that comment in just a second.
    But the proposed legislation was to see if there were some 
things that we can do smartly today, starting this year, to 
give us the capability to address that medium range threat and 
to minimize the window of vulnerability until we get our upper 
tier systems. We laid out and have provided recommendations 
back to Congressman Weldon for a list of things that can be 
done.
    I will point to something I am interested in in my prepared 
text. The number one thing in the list was interoperability. As 
I mentioned to Congressman Cunningham, we get much more 
protection by making sure all of our systems work together; and 
there are some smart things that we can do today to make sure 
our systems are interoperable, the current systems we are going 
to have in our inventory.
    Another part of the recommendation, going back to 
Congressman Weldon to address the medium range threat, was 
something that I think is very important. None of our systems 
were designed with a clear cutoff in terms of their capability. 
We did not just design PAC-3 or the Navy lower tier to cut off 
at a certain range, and we think they actually do have 
capability against that medium range threat.
    To prove that, however, we need to do some flight tests. So 
we recommended some testing that would be done in the next 
couple years specifically where we can actually fire a PAC-3, 
fire a Navy lower tier against a surrogate medium range threat 
to see if we do actually have capability against that threat. 
And I think we are going to find that we do.
    If that is the case, that minimizes that window of 
vulnerability until we get the PAC, the Navy upper tier 
inventory. There are some other things we put in the 
legislation to help address that.
    Mr. Young. What is your position or the administration's 
position on the Weldon proposal?
    General Lyles. We provided the information to Congressman 
Weldon with a letter signed by the Deputy Secretary of Defense 
specifically addressing the things that we would recommend 
being funded. The statement and theletter signed by Dr. Hamre, 
by the Deputy Secretary of Defense, said that some of the things that 
are in that package are so smart for us to do that if there is no 
supplemental, which I think is what Congressman Weldon's objective is, 
we will have to look closely to see how we reallocate or carve out of 
our existing programs and existing budgets some way to address some of 
the items.
    Mr. Young. Are we talking about, basically, the same amount 
of money?
    General Lyles. Because it would be an impact to our current 
programs, all the programs I just outlined to you, Mr. 
Chairman, I don't think that, if there is no supplemental, 
there is no way that we can smartly, without impacting one or 
the other efforts, we can address a total reallocation for all 
of the things.
    We certainly would look at doing the testing against a 
surrogate threat, because I think that is smart to do. And 
interoperability is something that is part of our basic system 
anyway, as I just mentioned to you, and that sort of smart 
reallocation, we certainly will take that on.
    Mr. Young. I mentioned earlier that we were pleased with 
the President's budget submission for this year, but we were 
concerned about the outyears. Now, in the Weldon legislation 
what kind of outyear cost would there be that his legislation 
doesn't address?
    General Lyles. In the ground rules in the package that we 
submitted and provided to Congressman Weldon, we state very 
clear, we looked at specifically those things that helped us to 
address this window of vulnerability and this medium range 
threat, but we also looked at those things that could be 
executed in fiscal year 1998, things that had outyear tails.
    We actually did not provide the input and recommendation 
back to Congressman Weldon. We did provide to him some 
description of other things that we are continuing to look at, 
a lot of which have outyear tails, but our specific 
recommendations were things that could be executed in fiscal 
year 1998 without any tails.
    Mr. Young. I have some rather technical questions on this 
very same subject, and I would like to submit those to you and 
ask if you would respond to them.
    General Lyles. Yes, sir, very happy to.
    Mr. Young. Mr. Dicks.

                             MISSILE THREAT

    Mr. Dicks. Thank you, Mr. Chairman.
    The Iranians are engaged in a crash program to field two 
medium range missiles, Shahab-3 and Shahab-4, within 1 to 2 
years. The missiles will have enough range to hit targets 
throughout the Middle East, and a longer range version will 
eventually be able to target Europe. Now, will this capability 
on PAC-3, this enhanced capability, be able to deal with that?
    General Lyles. Congressman Dicks, as I just mentioned, the 
Shahab-3 is the one that is an immediate concern, because that 
is the one that may be in the inventory, at least to some 
limited extent, within the next 2 years or so. With the Shahab-
3, one of the reasons we want to test PAC-3 against a surrogate 
medium range threat is to see if we actually can't counter that 
threat with the PAC-3. I think our analysis shows we can do 
some countering.
    Mr. Dicks. Will Europe have any capacity to meet the 
Shahab-3 and 4 threat?
    General Lyles. The Shahab-3, Europe will have some capacity 
to meet it.
    If you were to look at a different area photograph for the 
country of Israel, Arrow was designed to go primarily against 
shorter range threats than that medium range. What this does, 
having a longer range system like Shahab-3, it decreases the 
footprint of coverage for Arrow; and, hence, there is an 
interest on the part of the Israelis to acquire additional 
Arrow batteries to provide or get back some of the coverage 
that they might lose against that particular threat.

                  ANTI-BALLISTIC MISSILE (ABM) TREATY

    Mr. Dicks. All right. Let me go back to another subject 
here.
    At the Helsinki Summit in March, 1997, President Clinton 
and President Yeltsin reaffirmed their commitment to the ABM 
Treaty. They issued a joint statement that said, ``We will not 
deploy theater ballistic missile systems that pose a threat to 
strategic nuclear forces on the other side or test theater 
ballistic missiles systems against strategic targets.''
    General Lyles, which BMD systems have been judged to be ABM 
Treaty compliant?
    General Lyles. Congressman Dicks, all of our current 
theater programs we are embarking on have been judged to be 
compliant by the Compliance Review Group (CRG), the current 
programs.
    Mr. Dicks. What about the airborne laser?
    General Lyles. Airborne laser has not been subject to the 
formal CRG evaluation. I think that is scheduled to take 
place--when I say, CRG compliance, that is the group that looks 
into the Treaty. I think airborne laser is scheduled to have 
its assessment by the CRG within the next 2 years.
    Mr. Dicks. And, of course, the space-based interceptor, 
that would have definite ABM problems; is that right?
    General Lyles. That definitely will have to be looked at. 
The current program, research program, technology program that 
we have for space-based laser is research only. I think it was 
stated as a result of the Helsinki agreement that we can do 
research, and that is all we are doing currently.
    Mr. Dicks. Under the demarcation agreement, will the Navy 
upper tier program pose a problem under the ABM agreement?
    General Lyles. Under demarcation, no, sir. It fits within 
the demarcation agreements coming out of Helsinki.
    Mr. Dicks. What is your strategy? I mean, in other words, 
at some point are you assuming, as the program manager here, 
that at some point we are going to have to make adjustments in 
the ABM agreement in order to field a national missile defense 
system? Or can we do one that is Treaty compliant?
    General Lyles. Congressman Dicks, I will state, just like 
Dr. Perry did when he first announced 2 years ago almost 
exactly, our national defense program. The research and 
development aspect of this program will be done in a treaty-
compliant manner. When it comes time to deploy the system, we 
will have to go back and relook at the Treaty; and we may have 
to make some adjustments to the Treaty.
    The issue of deployment and where we actually deploy again 
is going to be dependent on where the threat arises. But we 
recognize, as stated literally 2 years ago by Dr. Perry, that 
when we get to a deployment decision we will have to address 
the Treaty.

                   MEDIUM EXTENDED AIR DEFENSE SYSTEM

    Mr. Dicks. Let's go to MEADS again. You know, I can 
remember General Meade telling me, when Corps SAM was the issue 
for the Army, having a mobile air defense system that could 
deploy with Army units is a very important issue. And then 
Corps SAM went away, and now we have MEADS as an international 
program. But, again, we are winding up not funding it in the 
outyears. Now, what happens to the Army?
    General Lyles. Congressman, the requirement for MEADS has 
been restated as being very strong by both the Army and the 
Marine Corps.
    Mr. Dicks. But there is no money in the budget for it.
    General Lyles. Yes, sir. They are looking towards me to 
provide the funding.
    The issue we have, again, is one of affordability for all 
of our missile defense programs and how to fit MEADS into the 
budget, in addition to doing things like accelerating maybe the 
upper tier, etc. So we are trying to address this.
    Mr. Dicks. But let me get this right now. What does the 
Army have today for a mobile air defense system?
    General Lyles. Obviously, Patriot and THAAD are mobile, but 
they are not the kind of maneuverability that MEADS would be to 
move with the maneuvering force that we move with the troops. 
So from the standpoint of a Corps SAM capability, other than 
the air defense systems that we have, the shorter range air 
defense systems, we don't have anything like a MEADS or a Corps 
SAM.
    Mr. Dicks. So our position is we don't have the money to 
fund this. It seems to me that that is as important as some of 
these other issues, but it isn't getting the priority. I mean, 
the Army continues to have all these deployments, and it seems 
to me you have got to have some capability to protect these 
deploying forces.
    Now, you know, obviously PAC-3 is a fixed system. It is a 
point defense system. But if you are moving those forces you 
are not going to have anything that goes with it. And somehow 
that seems to me, if we are talking about doing things as 
supplementals, that ought to be one that we ought to consider. 
Are any of the Army people here prepared to talk about this?
    General Lyles. I can ask General Montgomery to give his 
comments.
    Let me preface it by telling you we are taking that 
requirement very seriously. We are examining not only budget 
considerations and alternatives and options we have available 
to us to be able to fund it but also architectural examples. We 
want to stick with a MEADS program per se because of the 
international cooperation of Germany and Italy. That is very, 
very important to all of us for a lot of different reasons.
    Mr. Dicks. How do they feel about us not having the----
    General Lyles. They are very concerned, Congressman. I just 
came back from a trip to Europe to visit Italy, visit Germany 
and to talk with their military leaders. They are very, very 
concerned about it, and we clearly understand the concern in 
that regard. But I want you to know that we are not just 
sitting back and just ignoring the issue. We are looking at 
alternative architectures in addition to additional funding 
structures.
    Mr. Dicks. You know what Jerry McGuire would say, ``Show me 
the money.''
    General Lyles. If you would like, I can ask General 
Montgomery to give his comments.
    General Montgomery. Sir, I would only echo what General 
Lyles said. The Army is very concerned about this mission area 
and desperately needs this capability to protect the forces as 
they move to contact. Germany and Italy also share a very dire 
need for this kind of capability, as do nations around the 
world. So we are pushing very hard to get this capability 
developed and fielded to protect our troops.
    The Army looks at this as an OSD bill to be paid not out of 
their budget but out of the OSD budget because of the way we 
are structured for development of air missile defense programs. 
So they are very interested in it and pushing hard for funding. 
We are going through a front end assessment with the Program 
Analysis and Evaluation folks at OSD, and the Army is playing a 
very active role in trying to get that done.
    Mr. Dicks. How much money are we talking about?
    General Montgomery. Sir, we have structured this program 
now through three other nations to hold the cost over the POM 
years for the United States to a billion dollars. So it starts 
at about $160 million in the year 2000 and never gets above 
about $230 million as we get out to 2005. And then we will have 
another 2 years to finish development, with the first unit 
equipped in 2007.
    The other nations have agreed to that, that we are looking 
for a 2005 fielding date. Because of funding constraints and 
because of just the development cycle, both Germany and Italy 
have signed up now for us to go out to 2007. But we need about 
a billion dollars in the POM years to do this program because 
it is a full of development of a complete new system.
    Mr. Young. Thank you, Mr. Dicks. And I would like to follow 
up on the subject Mr. Dicks has opened here. I remember, and I 
am sure Mr. Dicks does, years ago we were dealing with Sergeant 
York for the same program to defend ground troops from aerial 
attacks. What did we then go on to?
    General Montgomery. ADATS, air defense anti-tank system.
    Mr. Young. Why can't we do this?
    General Lyles. Mr. Chairman, I am a little bit familiar 
with that program, and I know some problems of it. I think the 
mission can be done, and I am very confident that we can define 
the MEADS program, that it is going to be very successful from 
a technical standpoint. There is no reason why we can't do it 
and provide that kind of capability.
    Let me come back to Congressman Dicks' question. General 
Montgomery just mentioned that we are trying to find a billion 
dollars in this POM cycle. To give you an example of the kind 
of restructuring alternatives we are looking at, originally we 
were trying to find $2 billion to stick with the original plan 
for MEADS. We already have restructured and looked at options 
and gotten it down to a program that will be a billion dollars 
for us plus a billion dollars for our partners. So we are doing 
everything we can to look at the alternatives and also look at 
funding alternatives, and we will be seriously addressing this 
in the POM.
    As late as last night, I talked to some German officials on 
this subject, so we know the issues and sensitivities andwe 
also know this is an issue we will have to address.
    Mr. Young. I appreciate that. I think those troops that are 
out there on the front lines deserve this kind of protection. 
As long as we can control the air and keep the missiles down, 
that is one thing. But we just never know when that situation 
might be different. So I encourage you to do whatever you can 
to protect the troops.
    General Lyles. Yes, sir.
    Mr. Young. Mr. Skeen.

                       GLOBAL POSITIONING SYSTEM

    Mr. Skeen. Thank you Mr. Chairman.
    Just one question I would like to ask; and that is, we are 
dependent on the GPS systems and satellites for a lot of this 
work. But how safe are we from having those knocked out? I know 
that the Russians had some ability some time back because they 
practiced on shooting stuff at satellites.
    General Lyles. Congressman Skeen, it is sort of an anti-
satellite capability. Something that might be worked on would 
be primarily associated with lower attitude systems.
    The systems that we heavily depend on for navigation, like 
GPS, and certainly for surveillance and warning, like GSP and 
SBIRS, Space-Based Infrared System, in the future are at much 
higher altitudes. And I personally, since I have a space 
background, am not concerned about dealing with that kind of 
threat at all.
    Mr. Skeen. Are you pretty confident that the system will 
take care of itself?
    General Lyles. Yes, sir.
    Mr. Skeen. Thank you very much.
    Mr. Young. Mr. Hefner.

                         AIRBORNE LASER PROGRAM

    Mr. Hefner. First of all, I have seen a lot of weapons 
systems come through. I remember in this Committee when we 
would go to markup when Silvio Conte was here, and Tip O'Neill 
was speaker, and we put a lot of AWACS in. They said, the 
Speaker has got to have so many Patriot missiles. It was a dog 
around here for a lot of years, and we never became a hero 
until the Persian Gulf, and I don't know how successful it was 
there.
    But here is the point: I worry more about terrorists with 
small weapons and chemical weapons to be able to pollute our 
water systems and what have you. But we have a problem around 
the world not knowing from one year to the next who our friends 
are.
    I remember back when Saddam was kicking the hell out of 
Iran some of our Senators went to Iraq and said, he is not a 
bad guy, and told him, you just need some PR work. You need 
better PR. So, you know, we have got a potential for a 
situation in Iran and in Iraq and all over those countries.
    On the laser, what sticks in my mind, you have to have a 
platform for the laser. What is the platform? A 747?
    General Lyles. A 747-400.
    Mr. Hefner. It is a great airplane to ride on. I don't know 
about carrying a laser. The 10 seconds, the response on launch, 
I can't comprehend that close a reaction time. How close does 
the platform have to be to the target for the laser to be 
effective?
    General Lyles. Again, I apologize, Congressman. The actual 
number capability we think we can get from airborne laser is 
classified. I would be very happy to come back and give you 
that. We are talking about hundreds of kilometers in terms of 
its capabilities.
    Mr. Hefner. I don't want you to give me that. Like the guy 
said, don't tell me nothing you don't want told.
    Mr. Young. He is not going to.
    Mr. Hefner. No, seriously.
    Mr. Dicks. It can do multiple shots, too. It can do one 
right after another.
    Mr. Hefner. I understand that, Norm. It is not something 
you have to put a new battery in. But, still, you have got to 
be within striking range to be effective if you are going to do 
it on enemy launch; and that is the ultimate way to do it. But 
it seems to me the lower tiers would be a bit more tight.
    But to say that you can react in less than 30 seconds to me 
is mind-boggling. I hope that you can. And I feel sure that on 
paper and in the laboratory that it works. But on paper in the 
laboratory, Sergeant York worked. Maybe it had to have a set of 
charge in it to blow it up before we could have a successful 
test.
    So I guess I am getting old and cynical. But I don't want 
to be spending my Social Security money on something that is 
not going to work.
    General Lyles. Congressman, I would love to come sit down 
with you, with the Air Force, and lay out the specific time 
lines and what we think the concept are. But one thing I think 
is also very smart, the way the program has been laid out, it 
has specific milestones to allow us to exit, I can use that 
terminology, if certain things don't prove out. Like the flight 
weight laser, that is a specific major milestone to see if we 
can actually get a powerful laser and a small enough weight 
that you can put it on that platform.
    There are some major test events over the next couple years 
to demonstrate we can do step by step each one of those 
capabilities. It is not like we are going off and developing 
and building this system without clearly identifying the risks, 
deducing and solving the risks and doing all those step by step 
before we proceed with the program.
    Mr. Hefner. The thing that troubles me is your time level. 
I remember when we had the argument about silos and then we had 
the sophisticated weapons with the little mini-missiles that 
would go up and blow them up on ascent. And, on that, if you 
harm the silos, then my question was, how do you know that you 
won't cover up the silos? We went to California, to observe, 
and they had one that would come up 16 feet. I said, that is 
good if the debris don't go over 16 feet. But there are a lot 
of things that come up that really bother me just from a common 
sense standpoint. I don't understand all the technology.
    General Lyles. I am, again, familiar with all of those 
concerns and risks and would love to have the opportunity to 
sit with you.
    Mr. Hefner. Well, maybe with the Chairman's indulgence he 
can set a time when we could have a closed hearing and let them 
come and brief us on all this stuff. Because I don't want to 
know this by myself.
    General Lyles. Yes, sir, the Air Force would love to do 
that. I am here as an advocate because the capability is 
greatly needed, and we will gladly ask the Air Force to come 
and do that.
    Mr. Hefner. I don't have that authority.
    Mr. Young. Mr. Hefner, I would like to tell you that we 
have actually been trying to work out an arrangement where the 
Members could travel to the area and actually get on-site 
demonstrations and a classified briefing. We have been trying 
to work out a time when folks were available to do that.
    But I agree. I have a very strong interest in this as well. 
I asked the General, was it real or a theory, and he said he 
thought it was pretty real.
    General Lyles. Mr. Chairman, if I could amplify your 
comment. If you ever take that trip to Kirtland Air Force base 
in Albuquerque and see the Starfire optical range and see the 
technology that exists, you will understand why it is real 
rather than just theory.
    Mr. Young. We are working in that direction.
    Mr. Hefner. We are so busy around here this year, we may 
not have time to do that.
    General Lyles. Yes, sir.
    Mr. Young. General, thank you very much for an excellent 
hearing. We appreciate you and your knowledge of the issues 
that you deal with and your forthrightness and your responses 
to our questions. We appreciate it, and we look forward to 
working with you to make all these good things happen.
    The Committee will adjourn now until 1:30 this afternoon, 
when we will be in closed session with Admiral Prueher and 
Commander of the U.S. Forces Korea, General Tilelli.
    [Clerk's note.--Questions submitted by Mr. Young and the 
answers thereto follow:]

                    Fiscal Year 1999 Budget Request

    Question. General Lyles, the fiscal year 1999 budget request of 
$3.6 billion is significantly higher than the 1998 budget request of 
$2.9 billion. Moreover, it appears that most of the core programs are 
fully funded. However, while the near term funding appears to be 
sufficient, the out year funding drops considerably. General Lyles, are 
you concerned about being able to support the core BMD programs in the 
future?
    Answer. Although the recent fiscal guidance issued by the 
Department has elevated fiscal year 2004/2005 funding to the $3.0 
billion level in each year, correcting the downward trend in BMD 
funding, I am still concerned. All of the core programs are in the 
research and development phase and, by implication, involve some degree 
of technical, schedule and cost risk. We are trying to integrate 
technologies, systems and subsystems that have never been integrated 
before, and make them work under very stressing conditions. However, 
that is the principal reason why my organization exists: to resolve 
those problems within the context of total BMD requirements, and to 
make the trade-offs within and across programs so that fielded BMD 
capability is optimized. I have instituted cost control measures within 
all programs, emphasized using Cost as an Independent Variable (CAIV) 
to ``scrub'' all requirements and continue to examine overhead-type 
areas to minimize the costs of doing business. I have re-focused our 
modest technology program so that it better supports the core TMD 
programs and NMD in lowering costs and risks, and have involved the 
military services in our technology planning in order to leverage work 
done elsewhere.
    Question. Is the out year funding in the budget sufficient to 
support each of the core program? If not, what is your estimate of the 
shortfall?
    Answer. At the present, funding is adequate to support current 
departmental guidance for each program. However, I must point out that 
current departmental fiscal guidance does not include resources for the 
MEADS program beyond the current phase, NMD deployment, or the Navy 
Theater-Wide program after the ALI demonstration is completed (planned 
for fiscal year 2001).
    Question. What would the impact be to the core missile defense 
programs if out year funding is not adequate? Will there be further 
delays in program? Will there be increased risk?
    Answer. As I stated earlier, to address budget shortfalls I will 
conduct the necessary cost/performance trade studies with a view toward 
fielding the best BMD capability at the earliest possible date. I 
cannot provide specific impacts without knowing the size of the 
shortfall. Additionally, since requirements and threats tend to evolve 
over time, any answer I give you today in response to a hypothetical 
shortfall situation could easily be different given a different set of 
realities even in the near future. However, in conducting these trades, 
I attempt to minimize increases in risk. Based on the size of the 
potential shortfall, I would rather tend to allow modest schedule slips 
or reduce inventories in one or more programs. Of course, large budget 
shortfalls may have to be addressed with significant program re-
structuring, up to and including, the cancellation of one or more 
programs. Additionally, it should be understood that the Department has 
assigned three primary missions: TMD; NMD; and advanced technology to 
support these two mission areas. And, as part of the annual DOD 
planning and programming cycle, the Department provides specific 
guidance relative to each mission area. It is then my job to allocate 
funds to comply with this guidance and to sustain each mission area in 
the most effective and efficient manner. Therefore, when conducting 
trades to address a budget shortfall, I am constrained both by specific 
departmental guidance and by my charter responsibilities to sustain the 
three mission areas.
    Question. In your view, does the budget contain a sufficient level 
of funding to continue to develop the core Theater Ballistic Missile 
Defense programs?
    Answer. Yes, with regard to PAC-3, THAAD and Navy Area. However, 
BMDO funding for the Navy Theater Wide (NTW) program is sufficient only 
to conclude the ALI demonstration in fiscal year 2001. Funding for NTW 
beyond fiscal year 2001 is not adequate for engineering and 
manufacturing development at an efficient pace. I must stress this 
funding posture is fully consistent with the latest DOD guidance for 
the NTW program. However, I anticipate that the funding status of this 
program will be re-visited by the Department over the next several 
planning cycles, and especially after the ALI demonstration in fiscal 
year 2001.
    Question. In your view, does the budget contain a sufficient level 
of funding to continue to deploy the core Theater Ballistic Missile 
Defense (TBMD) programs?
    Answer. Yes. However, deployment funding for our last mature TBMD 
program, Navy Theater Wide, is not required until beyond the 
President's Budget planning window, under the current program schedule.
    Question. Is the funding in the budget sufficient to continue to 
develop the National Missile Defense (NMD) program?
    Answer. Yes, the funding in the budget is sufficient to continue to 
develop the NMD program.
    Question. Is the funding in the budget sufficient to continue to 
deploy the National Missile Defense (NMD) program?
    Answer. No. As the Committee is aware, the Quadrennial Defense 
Review provided an additional $2 billion over the fiscal years. These 
funds are adequate for conducting development and testing activities 
and for demonstrating technical feasibility to support a deployment 
decision as early as fiscal year 2000.
    Question. The budget request for Technology is 40% less than the 
1998 appropriated amount. What is the reason for this reduction?
    Answer. In fiscal year 98 Congress authorized and appropriations 
$425 million (less Congressional reductions) for advanced technology, 
$156 million over the President's Budget Request. Specifically, Spaced-
Based Laser (SBL), Advanced Interceptor Technology (AIT), and other key 
technologies were ``plussed up.'' The fiscal year 99 budget request, 
roughly 40% less than the fiscal year 98 appropriated budget, largely 
returns to the Department's planned budget level.
    In response to Congressional interests in accelerating the 
development of the SBL technologies through a readiness demonstration 
program, both BMDO and the Air Force made a good faith effort to 
increase program resources through the Department's POM process. Other 
Defense program funding needs superseded this BMD funding issue. 
Together, BMDO and the Air Force internally realigned approximately $65 
million for SBL in fiscal year 1999, raising the combined budget 
request to about $94 million. Similarly, BMDO increased resources for 
the AIT program. BMDO, via the Technology Master Plan, is in the 
process of assessing its overall technology program priorities and 
matching them with the budget projections.
    Question. Do you have sufficient resources to continue advanced 
technology programs? If not, what is the impact of inadequate funding 
for technology?
    Answer. The Department's guidance for missile defense consistently 
has been prioritized as: fielding highly effective TMD systems, 
developing an NMD deployment option, and conducting an advanced 
technology program. Nonetheless, as my testimony outlines, I have 
specifically identified our advanced technology program as an area 
where the Department and Congress must work together to maintain a 
strong foundation in order to ensure our ``seed corn'' for the future 
is adequately supported. That is why I have embarked on initiatives to 
ensure we: first, involve the Services more closely in our technology 
efforts to share resources and increase our ability to leverage off one 
another's investments; and secondly, develop a Technology Master Plan 
which will literally establish a ``roadmap'' for our technology base 
program. The Technology Master Plan is the guiding document that will 
help us plan and execute a coherent missile defense advanced technology 
program that reduces risk, improves system performance and 
affordability, and keeps pace with the threat. Ultimately, I would like 
to increase our investment in our technology base from roughly 8 
percent of the budget to about 12 percent. However, given the 
importance of fielding effective TMD systems and increasing our NMD 
efforts, this may not be feasible within our overall fiscal guidance. 
Hence, I want to ensure we work with Congress to arrive at an 
investment strategy that has the single, important goal of providing 
maximum effectiveness for each defense dollar spent. We must ensure a 
strong, effective and stable technology program which is responsive to 
the needs of the joint BMD program, the Services, and the Nation.
    Question. The budget request for Navy Upper Tier is $190 milliom--
54% less than the 1998 appropriated amount. Why is the budget request 
$219 million less than the 1998 appropriated level? Is there adequate 
support within the Pentagon for this program? Is this simply a matter 
of resources or are there policy issues that are impeding this program?
    Answer. The additional capability that Navy Theater Wide (NTW) adds 
to the Theater Ballistic Missile Defense (TBMD) Family of Systems is 
well recognized and supported by the Department. There are tough 
decisions that must be made given Departmental resource constraints. 
The resources dedicated to NTW are a function of priorities established 
by the Department. NTW is a lower priority than the lower tier programs 
or THAAD, the more mature upper tier program. The fiscal year 1999 
budget request of $190 million is sufficient to continue the flight 
demonstration program associated with the NTW risk reduction efforts.

                     Navy Area Program (Lower Tier)

    Question. The Navy Area Theater Ballistic Missile Defense (or Navy 
Lower Tier) system detects, tracks and engages short and medium range 
theater ballistic missiles. The system uses a modified Standard Missile 
and an improved SPY-1 radar. In January 1997, the Navy Lower Tier 
successfully intercepted a Lance Missile--fulfilling its requirements 
for entry into the Engineering and Manufacturing Development (EMD) 
phase of acquisition (Milestone II).
    The budget request for fiscal year 1999 is $289.1 million, $16 
million less than the 1998 appropriation. The Navy plans to develop a 
User Operational Evaluation System (UOES) capability by the year 2000. 
The UOES capability will equip 2 Aegis ships with 35 missiles.
    The First Unit Equipped (FUE) or capability delivered to the 
warfighter is planned for 2002. The total acquisition cost of the 
weapon system is estimated to be $6.2 billion. A total number of 1500 
missiles are to be procured and 57 Aegis destroyers and 22 Aegis 
cruisers are to be equipped between 1998 and 2011 with theater 
ballistic missile defense capability.
    General Lyles, when this Committee met two years ago to discuss 
BMDO programs, the Navy Lower Tier program was experiencing serious 
delays and setbacks. However, with the successful intercept of a Lance 
target last year, the program has entered into the Engineering and 
Manufacturing Development phase or ``Milestone II.'' What key events 
are you planning for the remainder of fiscal years 1998 and 1999?
    Answer. For fiscal year 1998, engineering efforts are underway at 
AEGIS and STANDARD missile government and contractor facilities to 
prepare for upcoming events. Preparations, including missile build-up 
and test for developmental and operational assessment flight tests (DT/
OA) at White Sands Missile Range, NM (WSMR) next year are on track. 
Upgrades to support the User Operational Evaluation System (UOES)/
LINEBACKER commence this summer with computer program installation and 
crew training aboard USS Lake Erie (CG 70) and USS Port Royal (CG 73). 
The Critical Design Review for the tactical AEGIS Weapon System 
computer program is also scheduled for Summer 1998.
    The Navy is currently conducting arena and sled track lethality 
tests as part the program's Live Fire Test and Evaluation program. 
These events will continue into fiscal year 1999.
    The Navy Lower Tier program is on schedule to begin it's first 
series of EMD flight tests starting in fiscal year 99. These tests, 
scheduled to start in February 1999, will be conducted at the WSMR. The 
initial flight in this series, coupled with lethality results and 
significant system engineering efforts, will support Low Rate Initial 
Production (LRIP) Long-Lead Material decision planned in Spring 1999.
    Question. When do you plan to conduct further flight testing? Will 
that be in fiscal year 1999? What are the objectives of those tests? Do 
you believe that the schedule permits a sufficient number of tests to 
ensure that Navy Lower Tier will be effective and technically sound 
before the system enters production?
    Answer. EMD flight tests are scheduled to begin in fiscal year 99. 
The objectives of these initial developmental tests are to demonstrate 
the accuracy of the interceptor's guidance system, to demonstrate a 
missile-to-target intercept for the Anti-Air Warfare (AAW) mission and 
the Theater Ballistic Missile Defense (TBMD) mission, and to gather 
data from actual flight events to validate missile performance 
predictions based on modeling and simulation. Further flight testing 
will continue during the DT/OT phase in fiscal year 2001.
    Although the testing schedule is aggressive, we believe that there 
are sufficient tests planned to ensure that the system is sound and 
effective prior to committing the program to production.
    Question. What developmental test and evaluation activities have 
been conducted or planned?
    Answer. Prior to the Milestone II decision in February 1997, a 
series of risk reduction activities was conducted. The purpose of these 
activities was to reduce the risk in the areas of AEGIS TBM detecting, 
tracking, and control, IR guidance, and blast fragment warhead 
lethality. In addition to the intercept of the Lance target in January 
1997, the AEGIS Extended Tracking and Control Exercise and various 
lethality sled and arena tests were conducted.
    Extensive developmental testing is planned during the Engineering 
and Manufacturing Development (EMD) phase of the program. This includes 
various ground tests prior to land based and at sea flight tests. 
Ground testing of the missile and it's components include IR seeker 
component testing on sled tracks and in wind tunnels, forward-looking-
fuze dynamic testing, and hardware-in-the-loop (HWIL) testing of 
missile components and all-up-rounds. The AEGIS computer program will 
also undergo extensive testing at the Combat System Engineering 
Development Site (CSEDS), which includes HWIL testing with an Inert 
Operational Missile (IOM). This ground testing will lead to initial 
Developmental Testing (DT) at WSMR from the Navy's Desert Ship 
beginning in fiscal year 99 and the at-sea DT from an AEGIS cruiser in 
fiscal year 2001 prior to Operational Testing (OT).
    Question. When do you plan to conduct operational test and 
evaluation work?
    Answer. OT&E activities, in the traditional sense, are scheduled to 
begin in Winter 2001. In addition, there are plans to conduct interim 
operational assessments of the UOES/LINEBACKER system and of WSMR 
developmental test results prior to the LRIP decision.
    Question. What activities will be conducted on the ground to ensure 
that Navy Lower Tier does not run into the same type of testing 
difficulties experienced by the Theater High Altitude Area Defense 
(THAAD) program?
    Answer. The Navy Area program is currently conducting extensive 
ground-based test activities to reduce the risks of flight test 
failure. These ground test activities include: warhead lethality arena 
and sled track tests, IR seeker component wind tunnel and sled track 
testing, forward looking fuze dynamic testing, computer-in-the-loop 
(CIL) and hardware-in-the-loop (HWIL) testing, as well as extensive 
modeling and simulation activities, culminating in all-up-round level 
integration testing prior to flight testing. Extensive developmental 
testing is planned during the Engineering and Manufacturing Development 
(EMD) phase of the program. This includes various ground tests prior to 
land based and at sea flight tests. Ground testing of the missile and 
it's components include IR seeker component testing on sled tracks and 
in wind tunnels, forward-looking-fuze dynamic testing, and hardware-in-
the-loop (HWIL) testing of missile components and all-up-rounds. The 
AEGIS computer program will also undergo extensive testing at the 
Combat System Engineering Development Site (CSEDS), which includes HWIL 
testing with an Inert Operational Missile (IOM). This ground testing 
will lead to initial Developmental Testing (DT) at WSMR from the Navy's 
Desert Ship beginning in fiscal year 99 and the at-sea DT from an AEGIS 
cruiser in fiscal year 2001 prior to Operational Testing (OT).
    We have proactively examined THAAD lessons learned to try to 
further reduce risk in our test program. As such, we have expanded the 
WSMR testing schedule to accommodate additional ground based hardware 
and one additional flight test.
    Question. What are your current estimates as to when a User 
Operational Evaluation System (UOES) will be deployed?
    Answer. There are no plans to ``deploy'' a UOES capability. UOES 
would only be deployed if its capability is required by the warfighter. 
UOES is primarily for early user involvement and is not intended to 
provide an operational capability. The UOES/Linebacker, if its 
capability is required in a national emergency, could be deployed in 
the second quarter of fiscal year 2000.
    Question. How many AEGIS Cruisers (CG-47) and Guided Missile 
Destroyers (DDG-51) will be equipped for the UOES system? How many 
missiles will be procured for the UOES system?
    Answer. Two AEGIS cruisers will be equipped with UOES/LINEBACKER 
computer program and equipment; 35 SM-2 Block IVA missiles will be 
procured. There are currently no plans to place the UOES capability on 
destroyers.
    Question. In total, how many ships does the Navy plan to equip with 
theater missile defense capability? How many missiles does the Navy 
plan to buy?
    Answer. There will be 79 total Cruisers and Destroyers equipped 
with the lower-tier capability. 1,500 SM-2 Block IVA missiles will be 
procured during production.
    Question. The President's Budget also projects that the First Unit 
Equipped (FUE) for Navy Lower Tier will be in 2002. Are you fairly 
confident with this projected date?
    Answer. We are confident that the FUE for the Navy Area Theater 
Ballistic Missile Defense (TBMD) System will be fiscal year 2002.
    Question. Do you have any unfunded requirements?
    Answer. No. BMDO is funded to meet its current requirements in the 
Future Years Defense Program. From time to time, program developments 
(schedule slips, changed requirements, cost growths) may require 
budgeting adjustments. However, these are handled using normal 
management processes, such as instituting cost control measures within 
all programs, emphasizing using cost as an Independent Variable (CAIV) 
to ``scrub'' all requirements, and continuing to examine overhead-type 
areas to minimize the costs of doing business. I have re-focused our 
modest technology program so that it better supports the core TMD 
programs and NMD in lowering costs and risks, and have involved the 
military services in our technology planning in order to leverage work 
done elsewhere.
    Question. Have you had any cost overruns? If so, what is the amount 
of the overrun? What was the reason for the cost overrun?
    Answer. The Navy Area Theater Ballistic Missile Defense program is 
executing within cost projections.

           Navy Area Program--GAO Concerns Regarding Schedule

    Question. In November 1997, the GAO issued a report, ``Ballistic 
Missile Defense: Improvements needed in Navy Area Acquisition 
Planning.''
    The GAO expressed concern that the Navy plans to begin Low Rate 
Initial Production (LRIP) of the missiles in June of 2000, 5 months 
prior to the date that development and operational tests are scheduled 
to begin. The GAO stated: ``Scheduling low-rate initial production 
concurrent with testing increases risk. . .if problems are uncovered 
during the test phase, the program may need to acquire additional 
hardware and incur design costs . . . Unless the acquisition plan and/
or the testing schedule is revised, the Navy will not have reasonable 
assurance that the system will adequately perform before the Navy 
commits itself to the production of the Block IVA interceptor 
missiles.''
    The GAO recently recommended that the Navy revise its testing 
schedule to reduce the risks associated with concurrent production and 
testing of the Navy Lower Tier program. What is your view regarding the 
GAO report?
    Answer. BMDO supports the Department's non concurrence with the 
GAO's recommendations. The GAO is concerned that the Navy will not have 
accumulated enough data to make the production decision and that no 
independent assessment of the system's capabilities will have been 
made. Low-rate initial production (LRIP) long-lead material purchase, 
LRIP fabrication and Full Rate Production (FRP) are individual events 
with their own distinct set of exit criteria. The LRIP fabrication 
decision will require the program to go before the Defense Acquisition 
Board (DAB). The Ballistic Missile Defense Acquisition Executive's 
(BMDAE) approval to proceed in accordance with requirements. The GAO 
recommendation to delay the Navy Area TBMD program's plan to acquire 
185 LRIP missiles until after D/OT&E certifies that the missile has the 
potential to meet its key performance requirements (KPR) is 
unwarranted. Postponing the acquisition of these missiles is contrary 
to the purpose of LRIP as stated in title 10 United States Code 2399 
(10 U.S.C. 2399) and DoD 5000.2-R. The statute authorizes the 
acquisition of LRIP quantities sufficient to provide production-
representative articles required for operational tests, establish the 
initial production base for the system, and permit an orderly increase 
in production rate.
    Question. Is the Navy Lower Tier program schedule optimistic?
    Answer. There have been concerns in the Department that the 
program's schedule is overly optimistic due to planned test phases 
appearing compressed. BMDO has been working closely with the Navy Area 
Program Manager on understanding the implications and risks inherent in 
the current schedule. The Program Manager has briefed BMDO on his 
assessment and evaluation of the Navy Area program's schedule. The 
schedule is evaluated to be in the moderate risk category. Absent 
unforeseen difficulties, BMDO is confident there is sufficient time and 
funding in the current program plan to execute all required phases.
    Question. Should the testing schedule for Navy Lower Tier be 
revised to reduce the risk of producing missiles before the Navy knows 
if they will function correctly?
    Answer. The Navy Area Program Manager is currently refining the 
White Sands Missile Range (WSMR) Development Test/Operational 
Assessment (DT/OA) test plan to include additional risk reduction 
ground testing and an additional flight test. This refinement is a 
direct result of applying lessons learned from the THAAD program. BMDO 
agrees with the GAO that some amount of operational field testing be 
conducted prior to committing to production and this concern is 
reflected in the program's testing plans. After WSMR DT/OA in fiscal 
year 2000, the Navy will conduct an at-sea demonstration and evaluation 
of the UOES/LINEBACKER. An AEGIS cruiser, outfitted with the UOES/
LINEBACKER AEGIS Weapon System TBMD computer programs and equipment, 
Block IVA missiles, and the Command and Control (C2) capability, will 
be evaluated against threat-representative targets. An operational 
assessment, based on this at-sea demonstration, will be made by DOT&E 
and Commander, Operational Test and Evaluation Force (COMOPTEVFOR). In 
BMDO's view, this level of testing is more than adequate to retire 
concerns that the program is prematurely embarking on production before 
some level of operational testing is conducted.
    Question. What are the financial risks of having already entered 
into initial production, if developmental and operational testing shows 
the missile to be deficient? Will there be additional costs to the 
program? If so, would those costs be substantial?
    Answer. The financial risk associated with entering into low-rate 
production before completion of development/operational testing (DT/OT) 
is minimal. During EMD testing at WSMR in fiscal year 99-00, the 
functionality of the missile round will be proven. One of the 
objectives of the EMD phase is to translate the most promising design 
approach into a stable, producible, supportable, and cost effective 
design. We believe our current plan does this and minimizes the 
probability of missile production cost problems arising in the OT 
phase. Less than 15% of the low rate production (LRIP) missiles will 
begin fabrication prior to operational testing by COMOPTEVFOR in the 
first quater, fiscal year 01, and none are planned to begin fabrication 
prior to the UOES/LINEBACKER at-sea demonstration and evaluation. The 
current plan is for 32 of the 35 UOES/LINEBACKER missiles to be the 
same configuration as the LRIP rounds (the first three rounds will be 
delivered with a different IR seeker miscroprocessor). No other 
differences are planned. However, if test results indicate the need for 
modifications, these modifications would be included in the LRIP 
production line. This plan will minimize the number of missiles that 
may need modification, and missile modification costs should be 
significantly less than the cost of shutting down and then restarting 
the SM-2 missile production line. This acquisition strategy balances 
the key program performance, cost, and schedule risks.
    Question. What are the schedule risks of having already entered 
into initial production, if development and operational testing shows 
the missile to be deficient? Will there be substantial delays in the 
program? If so, would those delays be significant?
    Answer. The schedule risk associated with entering into low-rate 
production before completion of developmental/operational testing is 
minimal. During EMD testing at WSMR in fiscal year 99-00, the 
functionality of the missile round will be proven. One of the 
objectives of the EMD phase is to translate the most promising design 
approach into a stable, producible, supportable, and cost effective 
design. We believe our current plan does this and minimizes the 
probability of missile production schedule problems arising in the OT 
phase. Less than 15% of the LRIP missile will begin fabrication prior 
to operational testing by COMOPTEVFOR in the first quarter, fiscal year 
01, and none are planned to begin fabrication prior to the UOES/
LINEBACKER at-sea demonstration and evaluation. The current plan is for 
32 of the 35 UOES/LINEBACKER missiles to be the same configuration as 
the LRIP rounds (the first three rounds will be delivered with a 
different IR seeker microprocessor). No other differences are planned. 
However, if test results indicate the need for modifications, these 
modif8iation would be included in the LRIP production line. This plan 
will minimize the number of missile that may need modification, and 
missile modification costs should be significantly less than the cost 
of shutting down and then restarting the SM-2 missile production line. 
This acquisition strategy balances the key program performance, cost, 
and schedule risks.
    Question. Do you believe the potential gain is worth the associated 
risks of the ambitious schedule? Are there ways to mitigate the risk of 
such a strategy? Would this require additional resources? If so, how 
much and during which fiscal year?
    Answer. Yes, I do. Since the August 1994 DAB meeting, the Navy has 
executed a very deliberate plan to mitigate and reduce the risk 
inherent in a program with concurrency and a pressing national need to 
accelerate at every opportunity. The Navy Area program has conducted 
numerous events that have proven the SPY-1 radar can track a Theater 
Ballistic Missile (TBM). The risk reduction events that the Navy Area 
program used to track a TBM were conducted using patch software to the 
SPY-1 radar system. Two events successfully demonstrated that the AEGIS 
system can be modified to fulfill the TBM defense mission. The design 
used in the patch software will be used to support development of the 
Linebacker tactical builds.
    Risk in the interceptor has been steadily mitigated through the 
Risk Reduction flight test program, hardware-in-the-loop testing, wind 
tunnel testing of the IR dome and components, and a rigorous lethality 
testing regimen. During EMD testing at WSMR, the functionality of the 
missile round will be proven. The uplink messages from Desert Ship that 
control the missile in flight are identical to those from the AEGIS 
ship. AEGIS Weapon System (AWS) and SM 2 Block IVA round integration 
will be conducted at the Combat System Engineering Development (CSED) 
site (just as have all AEGIS missiles before the Block IVA).

  Navy Area Program--Funding for Modifications to AEGIS Cruisers and 
                               Destroyers

    Questions. The Navy Lower Tier system is comprised of a modified 
Theater Ballistic Missile Defense (TBMD) capable Navy Standard Missile 
(SM-2 Block IV) and an improved SYP-1 radar. The BMDO budget includes 
funds to upgrade five Aegis ships to provide TBMD capability.
    However, the Navy's budget includes only part of the funding 
required to equip all of its new DDG-51 Aegis destroyers with theater 
ballistic missile defense capability.
    How much funding is included in the BMDO budget to upgrade AEGIS 
cruiser and destroyers for theater ballistic missile defense?
    Answer. A total of 79 cruisers and destroyers will be upgraded to 
the Navy Area capability. A total 49 of these ships are funded in the 
current President's Budget (PB), fiscal year 99-03. The remaining 30 
ships are funded beyond fiscal year 03. Hardware/software delivery and 
installation follows the funding by approximately three years. The 
upgrade to four shore centers is also funded.

        fiscal year                                                   $M
1998..........................................................    15.058
1999..........................................................    43.318
2000..........................................................    60.313
2001..........................................................    72.390
2002..........................................................    60.214
2003..........................................................    56.221

    Question. How many ships will receive theater ballistic missile 
defense capability in fiscal year 1999?
    Answer. None. Our current estimate for declaring UOES/LINEBACKER is 
the 2nd quarter of fiscal year 2000.
    Question. Does the Navy's fiscal year 1999 budget include funding 
to modify or equip AEGIS destroyer and/or cruisers with theater 
ballistic missile capabilities? How many ships will be modified? Over 
what time period?
    Answer. Yes, PB-99 increased OPN and SCN accounts to equip DDG-51 
class destroyers and CG-47 class cruisers and Navy Area TBMD 
capability. The OPN funding will be used to incorporate TBMD capability 
on two CGs and four DDGs (DDGs 81-84 during the Post Delivery 
timeframe). The SCN funding will be used to incorporate Navy Area TBMD 
capability on three DDGs (DDGs 93-95) which are to be appropriated in 
fiscal year 99 as part of the multi-year procurement contract. These 
ships will be delivered to the Navy in the fiscal year 04 timeframe.
    Question. Does the Navy's fiscal year 1999 budget include enough 
funding to modify or equip its new DDG-51 AEGIS destroyers with theater 
ballistic missile capabilities? If not, why not?
    Answer. Yes, all destroyers funded in fiscal year 99 will be 
equipped with Navy Area TBMD capability.
    Question. Do you believe that the Navy is fully committed to the 
Navy Lower Tier program?
    Answer. Navy and BMDO are working closely to ensure a successful 
Navy Area (Lower Tier) program.
    Question. Does the Navy agree with the First Unit Equipped (FUE) 
date of 2002?
    Answer. Yes, the Navy agrees with the BMDO threshold FUE date of 
December 2001 (fiscal year 02).

                 Patriot Advanced Capability-3 (PAC-3)

    Question. The Patriot Advance Capability (PAC-3) missile defense 
system is comprised of four basic elements: a radar, an engagement 
control station, a launching station and interceptors. PAC-3 will 
engage and destroy short and medium range theater ballistic missile and 
cruise missile within the atmosphere.
    Development is progressing in stages: configuration 1 upgrades the 
guidance system; configuration 2 enhances the radar; configuration 3 
includes the PAC-3 hit-to-kill missile (formerly known as Extended 
Range Interceptor, ERINT). The budget request for 1999 is $480.5 
million, about $75 million less than the 1998 appropriation.
    The First Unit Equipped (FUE) or capability delivered to the 
warfighter is planned for the fourth quarter of 1999. The total 
acquisition cost of the weapon system is estimated to be $6.4 billion. 
A total number of 1200 missiles and 54 Fire Units are to be procured.
    The Army conducted two successful non-intercept tests of the PAC-3 
missile last year. (A September test assessed the missile's flight 
functions and another in December tested the systems in-flight 
communications ability). Intercept tests will be conducted later this 
spring and the program will enter into Low Rate Initial Production 
(LRIP) in the third quarter. The first intercept test of the PAC-3 
missile was schedule for second quarter 98 but slipped to the third 
quarter.
    The PAC-3 missile defense system is being developed incrementally. 
General Lyles, will you please explain the differences between the 
various development stages and configurations?
    Answer. Based on the lessons learned from Operations Desert Shield 
and Desert Storm, the Army initiated a new development program to 
improve the PATRIOT system's performance. This new development program 
planned to extend the PATRIOT unit's battlespace while enhancing its 
lethality against TBMs. The first improvements were part of the Quick 
Response Program (QRP). The QRP improvements were near-term upgrades 
fielded in 1992-1993 to the PAC-2 system that: (1) provided for rapid, 
accurate fire unit emplacement through the use of the Global 
Positioning System and a North Finding Seeker; (2) improved the 
defended area of the fire unit by enabling missile launchers to be 
emplaced up to 10 km from the ground radar set; and (3) provided ground 
radar enhancements that improved TBM detection and increase system 
survivability.
    More substantial improvements to the PAC-2/QRP system were 
initiated under the new PATRIOT Advanced Capability-3 (PAC-3) program. 
To more rapidly field improvements and modifications to the PATRIOT 
system as they were developed, the PAC-3 program was separated into 
three separate configurations. The Configuration 1 upgrade consisted 
primarily of hardware installed to support future growth of the PATRIOT 
system. System throughput, memory, and reliability, maintainability, 
and availability were all increased. BMDO also funded procurement of 
the Guidance Enhanced Missile (GEM) as a part of this configuration. 
The GEM incorporated engineering changes to the PAC-2 missile to 
improve its performance against high speed TBMs. All of these 
modifications have completed development and were fielded starting in 
1995, with the last of the 10 U.S. PATRIOT Battalions modified in the 
Spring of 1997.
    Configuration 2 consist primarily of software upgrades to achieve 
improved capabilities using the hardware improvements fielded with 
Configuration 1. The principal improvement was to radar performance in 
detection, identification, and discrimination. In addition, 
communications hardware was improved to enable PATRIOT to interface 
with joint networks. Development on this upgrade is also completed and 
the First Unit Equipped occurred December 1996. Fielding to the eighth 
US battalion was recently completed, with the remainder receiving the 
modifications in 1998.
    Configuration 3 modifications include: (1) the new PAC-3 hit-to-
kill missile which provides improved lethality against TBMs; (2) 
improved defended area of the fire unit by emplacing missile launchers 
up to 30 kms from the ground radar set; (3) Classification, 
Discrimination, and Identification Phase III modifications to improve 
identification, classification, and discrimination of TBMs; (4) 
improvements to the ground radar that significantly increase its 
average power and detection range while at the same time increasing its 
reliability; (5) communications upgrade that provides Joint Tactical 
Information Distribution System (JTIDS) terminals at the Fire Unit 
level; and (6) PDB-5 (Post Deployment Build) software upgrades which 
will maximize the capabilities of the previous improvements to the 
PATRIOT system. These upgrades are currently in either engineering and 
manufacturing development or production.
    Question. What systems do we currently have fielded? What equipment 
is in the Gulf?
    Answer. All U.S. PATRIOT Battalions are equipped with Configuration 
1. Eight of the ten U.S. PATRIOT Battalions have received the 
Configuration 2 upgrades, with the remainder receiving the 
modifications through 1998. All of the PATRIOT batteries located in 
Southwest Asia have the Configuration 2 system.
    Question. What are the specific improvements associated with these 
modifications? Do the improvements make the system more accurate or 
more lethal?
    Answer. Configuration 1 modifications consisted primarily of 
hardware improvements which include: the Guidance Enhanced Missile 
(GEM), a new pulse doppler signal processor for the ground radar, and 
new processing and data storage upgrades to the Expanded Weapons 
Control Computer (EWCC). The new EWCC provides four times the 
throughput of the prior WCC and eight times the memory. This expansion 
in memory is critical to allow PATRIOT the ability to continue to grow 
in its performance capabilities with advanced software techniques since 
the current WCC could not support any substantial increase in lines of 
software code. The new pulse Doppler processor improves the ground 
radar dwell time for the pulse doppler waveforms and improves the 
performance of the radar against targets in cluter. The GEM missile 
provides improved system effectiveness and lethality against high speed 
TBMs and reduced radar cross section (RCS) air breathing targets 
(ABTs).
    Configuration 2 modifications consisted primarily of software 
upgrades that leverage the hardware improvements installed in 
Configuration 1. The Configuration 2 improvements include: 
communications upgrades through the use of the Joint Tactical 
Information Distribution System (JTIDS) terminals at the Battalion 
level for interfacing on the Joint Data Net; (2) ground radar 
enhancements that improve detection of lower radar cross section (RCS) 
targets at a greater distance; (3) an improved defensive capability 
against Anti Radiation Missiles; (4) provides for the first phase of 
Classification, Discrimination, and Identification (CDI), an upgrade 
which correlates target tracks received from external sources to a fire 
units tracks generated by the ground radar; and (5) PDB-4 software, 
which maximizes the capability of all previous hardware improvements 
and additionally has TBM message alert capability. These upgrades have 
completed operational testing and the first tactical unit was fielded 
with these improvements in December 1996. All of the PATRIOT batteries 
located in Southwest Asia have the Configuration 2 system. The 
Configuration 2 improvements increase a firing unit's defended 
battlespace against TBMs by a factor of eight compared to PATRIOT's 
capability during the Gulf War and with 50% greater lethality.
    Question. There has been some debate about the actual effectiveness 
of the upgrades made to enhance the PATRIOT missile system in the 
absence of the new hit-to-kill missile (e.g. radar and guidance 
improvements). Do you believe the upgrades are effective in the absence 
of the new missile? Will the upgraded system perform adequately in the 
Gulf should we find ourselves in another conflict?
    Answer. The Configuration 2 upgrades currently in the hands of our 
soldier provide a greatly improved capability over what we possessed 
during the Gulf War. The GEM missile provides improved lethality over 
the PAC-2 missile. Every GEM flight test met or exceeded expectations. 
The Configuration 2 improvements increase the battlespace defended by a 
PATRIOT firing unit by a factor of eight over its Gulf War counterpart. 
In addition, we are now capable of engaging longer range threats than 
we could in the Gulf War. These improvements are significant and we are 
confident that the PATRIOT configuration in the field today can defeat 
the current threats in the Middle East.
    Question. How will the addition of the PAC 3 hit-to-kill missile 
enhance the system? What about that missile's lethality?
    Answer. The PAC-3 missile provides PATRIOT with a hit-to-kill 
capability. We need this capability in order to effectively counter 
threats of weapons of mass destruction. The PAC-3 missile provides a 
leap ahead in lethality compared to our current interceptors. The PAC-3 
missile builds on the success of the ERINT missile demonstration and 
validation program which demonstrated that hit-to-kill is achievable, 
and assessed and reduced the risks associated with integrating the 
missile into the PATRIOT system. Hit-to-kill relies on body-to-body 
contact to generate high destructive energy against the target. Flight 
tests, sled tests, and flight validated simulations showed that this 
missile provides greatly improved lethality over the PAC-2 missile 
against more stressing TBMs and air breathing targets.
    Question. What will the advantages of the PAC-3 configuration 3 be 
compared with the current PATRIOT system?
    Answer. The most significant advantage of the PAC-3 Configuration 3 
modifications is the combined effects of improvements to the ground 
systems coupled with the new hit-to-kill PAC-3 missile. The 
Configuration 3 system can detect a target at a greater range, better 
identify what type of target it is and have a missile inventory that 
has a higher probability of defeating the target. Furthermore, the PAC-
3 missile has a significant capability against more stressing target 
warheads, such as those containing chemical submunitions. The 
Configuration 3 system will have an eight fold increase in defended 
area and a 100% increase in lethality against stressing warheads, 
relative to the Configuration 2 system.
    Question. The Army conducted two tests last fall of the PAC-3 
missile. What were the results of those tests? Did the PAC-3 system 
meet all the objectives of the tests? What have we learned?
    Answer. The two flight tests conducted last fall did not involve 
intercepts of targets; rather, the primary objectives were to evaluate 
missile flyout functions flight worthiness, and integration of the 
missile with the ground system. The first developmental test flight 
(DT-1) of a PAC-3 missile was successfully conducted at White Sands 
Missile Range, NM, on September 29, 1997. The only objective not 
completed was the exercise of the missile communications uplinks and 
downlinks due to a ground support system anomaly. The cause of this 
anomaly was identified and resolved prior to the second developmental 
test flight (DT-2) which was successfully conducted on December 15, 
1997. A key objective in this test was a maximum duration flight for 
the missile. The missile successfully flew for the expected period of 
time, and all uplinks and downlinks were performed. The only anomaly 
noted during the second test flight was the failure of the missile's 
tactical self-destruct mechanism. The cause of this anomaly and its 
solution have been identified. The missile met all of the objectives 
desired and provided valuable data on the missile and ground system 
performance. A significant finding was that the system simulations run 
prior to each flight test accurately predicted the actual flight 
profile. The validation and verification of these models and 
simulations is critical to completing the development of the PAC-3 
system.
    Question. How many flight tests will be conducted with the PAC-3 
missile before the system goes into initial production?
    Answer. Three tests, firing a total of three PAC-3 missiles, will 
be conducted prior to a milestone decision to approve the start of low 
rate initial production. Two of these tests have been successfully 
completed. The final test will be an intercept mission.
    Question. When will the PAC-3 system with the hit-to-kill missile 
be fielded?
    Answer. The PAC-3 first unit equipped (FUE) date is planned for 
late 1999.
    Question. What is the total acquisition cost of the PAC-3?
    Answer. $6,156 in TY$M is the total acquisition cost of the PAC-3.
    Question. Do you have unfunded requirements in the PAC-3 program?
    Answer. No. BMDO has programmed funds to meet current PAC-3 
requirements in the FYDP. From time to time, unforeseen program 
developments (schedule slips, changed requirements, cost growths) may 
require budgeting adjustments. However, these are handled using normal 
management processes.
    Question. Have you had any cost overruns in the PAC-3 program? If 
so, what is the amount and the reason for the overrun?
    Answer. Based on the likely schedule change in the first intercept 
mission to 4Q fiscal year 98, and a rescheduling of subsequent flight 
tests, there has been growth in the RDT&E requirements. While there are 
no major technical design problems, there are numerous first time 
integration efforts that are requiring more time to resolve than 
initially forecasted. A baseline review of the program schedule and 
costs with the missile development contract was conducted in February 
1998. The Department is working to request Congressional reprogramming 
in fiscal year 98, along with changes in the fiscal year 99 
appropriation to realign funds from missile procurement to RDT&E. This 
realignment will address the cost growth expected in the missile 
development contract. The realignment also shifts Low Rate Initial 
Production (LRIP) missile procurement funding in fiscal year 98 and 
fiscal year 99 which may be unexecutable based on delays in the LRIP 
contract award. These LRIP contract awards cannot be in place until an 
intercept flight has been successfully conducted.

               Theater High Altitude Area Defense (THAAD)

    Question. The Theater High Altitude Area Defense (THAAD) missile 
defense system provides protection against short and long range theater 
ballistic missiles by intercepting them both in and out of the 
atmosphere (endo and exoatmosphere). THAAD consists of four components: 
truck mounted launchers, interceptors, a radar, and battle management, 
command, control and communications (BM/C3I) systems.
    The THAAD program is in its fourth year of demonstration and 
validation. To date, seven flight tests have been conducted. The first 
three were to test the propulsion, controls and the seeker. The fourth 
and following flight tests were to intercept a target. Each of the four 
intercept tests failed.
    Subsequent to the fourth test, the program was reviewed and 
restructured. The new plan, called ``2 plus 4,'' revised the testing 
schedule to allow for two tests to be conducted in the first quarter of 
fiscal year 1998. However, the first of those two flights has been 
delayed until the third quarter of 1998 due to continuing technical 
problems.
    The budget request for 1999 is $821.6 million, $415.5 million more 
than the 1998 appropriation. The present acquisition plan calls for the 
procurement of a User Operational Evaluation System (UOES) or initial 
capability--consisting of 40 missiles by the year 2001. The First Unit 
Equipped (FUE) has been delayed by two years and is now scheduled for 
the year 2006 versus 2004. The total estimated acquisition cost is $15 
billion. The total number of missiles to be procured is 1233.
    General Lyles, as we all know, the THAAD missile system has 
experienced a series of failures which have caused cost increases and 
long delays. Last year's failure was extremely disappointing because it 
was the fourth consecutive failure and the missile has not flown in a 
year. We know that a complete review of the program was conducted in 
the aftermath of that failure. What have you learned about that test 
and other test failures as a result of your independent studies?
    Answer. With specific regard to THAAD's last flight test, the root 
cause for the failure was determined to be contamination on the divert 
and attitude control system (DACS) battery shorting plug. This 
contamination prevented the DACS motors from operating properly, which 
in turn prevented the kill vehicle from effecting the maneuvers 
necessary to intercept the target. More broadly, though, DMDO and the 
Army have worked very hard to document lessons learned as part of the 
THAAD flight test program in order to benefit our other--both TMD and 
NMD--development efforts. These lessons offer program management as 
well as technical/engineering guidance to our contractor and Government 
organizations alike. Documentation of these lessons is an ongoing 
process, but allow me to provide a brief review of some of our 
observations and the insights we have gained.
    Though flight testing is often the focus of government, contractor, 
and media attention, a rigorous ground test program is the most 
critical pillar supporting the eventual successful transition to the 
missile range. Prior to flight testing, critical components should be 
tested to failure, where possible, to assess reliability and to define 
the physical limits of selected parts, components, and subsystems. In 
addition, full-up qualification tests and post-test teardown and 
analysis of critical components should be conducted. Problems uncovered 
during ground testing should be fixed and flight test vehicles properly 
instrumented to verify fixes and better understand flight environments.
    Once flight testing is underway, it is critical that the flight 
test schedule allow for adequate preflight checkout/testing and post 
flight data analysis; hardware-in-the-loop testing is an essential 
element of preflight testing. Configuration changes should be minimized 
where possible; excessive configuration changes from flight test to 
flight test increase the risk of failure and make reliability 
assessments extremely difficult. Finally, product assurance and 
configuration management require interest/attention and visibility at 
senior levels. It is especially important that product assurance 
requirements and procedures flow down to subcontractors.
    Question. Is the THAAD program still considered to be technically 
sound? What exactly caused the problem in that last test flight? What 
components worked? What components did not work? Do you expect to have 
similar problems in the future or have you solved the problem?
    Answer. The target launch and trajectory for the mission were 
nominal. The THAAD radar acquired the target in its primary search and 
the battle manager calculated an engagement solution. The interceptor 
launch, energy management maneuver, flare deployment, booster and 
shroud separation, and seeker operations were all nominal. Though the 
avionics computer issued commands to the divert and attitude control 
system (DACS) in response to in-flight-target updates from the radar, 
the DACS motors did not operate properly. As a result, the kill vehicle 
could not make the flight path corrections necessary to intercept the 
target. The problem with the DACS was traced to a contaminated shorting 
plug. Corrective actions have been implemented to preclude experiencing 
this failure again.
    Question. Subsequent to the fourth test, the program was reviewed 
and restructured. The new plan, called ``2 plus 4'', revised the 
testing schedule to allow for two tests to be conducted in the first 
quarter of fiscal year 1998. However, the first of those two flights 
has just recently been delayed again, until the third quarter of 1998, 
due to continuing technical problems. Why has this test once again been 
delayed? What is causing the problem? Are the delays due to serious 
technical issues?
    Answer. First, allow me to clarify that the ``2+4'' test plan does 
not refer to the timeframe for conducting the remaining PD&RR flight 
tests. Instead, it refers to the number of tests using each of the 2 
THAAD Kill Vehicle (KV) configurations. Of the remaining 6 tests, the 
first two (flights 8 and 9) will involve the baseline KV design that 
has flown on the previous flight tests. The final 4 tests will test the 
Block Upgrade (BUG) configuration, which incorporates some design 
changes to enhance the producibility of the UOES missile without making 
any fundamental functional changes to the kill vehicle.
    Following the FT-07 failure, I chartered an independent review team 
(IRT) to assess both the overall THAAD system concept and the missile 
design. Lockheed Martin began implementing the recommendations of the 
IRT in May 1997 to improve our understanding of system reliability and 
reduce flight test risk. The changes included a complete review of the 
acceptance test procedures and environmental test screening processes, 
incorporation of a complete kill vehicle vibration test, and increased 
test screening at both the Courtland, Alabama missile assembly facility 
and White Sands Missile Range (WSMR). The delays to the flight test 
program reflect the more thorough, more disciplined preflight checkout 
tests and processes. The two most recent problems deal with the 
communications transponder and the thrust vector control system. I 
would characterize these issues as significant, however they do not 
preclude the success of the next flight test. All technical issues are 
being addressed appropriately to ensure the highest probability of 
success. THAAD is an event-driven program and will only fly when ready.
    Question. What do you intend to do to ensure that the next test 
will be successful?
    Answer. Following the FT-07 failure, the Missile Assessment Team 
(MAT) I chartered as part of the IRT noted above thoroughly reviewed 
the missile design margins and contractor test procedures and quality 
assurance practices. The MAT did confirm that the overall missile 
design is sound, although they made a number of recommendations to 
reduce the flight test risk.
    LMMS began implementing the recommendations of the MAT in May 1997 
to improve system reliability and reduce flight test risk. The changes 
included a complete review of the acceptance test procedures and 
environmental test screening processes, incorporation of a complete 
kill vehicle vibration test, and increased test screening at both 
Courtland and WSMR. The chairman of the MAT now chairs the Project 
Manager's independent readiness review team, which will monitor 
implementation of the MAT recommendations and conduct a risk assessment 
to support the executive readiness reviews prior to flight.
    Question. In 1996, the President's Budget proposed to severely cut 
funding for the THAAD program and to delay its deployment until 2006. 
General O'Neill testified at that time that the THAAD program could be 
deployed sooner if the proper resources were committed. He also said 
that the delay was due solely to budget cuts, not to technical 
problems. It was on that basis that this Committee decided to restore 
funds to the program. General Lyles, do you believe General O'Neill was 
mistaken? Why weren't these technical problems--or at least the 
substantial risks involved--anticipated?
    Answer. I don't believe Lieutenant General O'Neill was mistaken. 
The 1997 President's Budget reduced the THAAD program by $2.1 billion 
in the FYDP years and slipped the program's First Unit Equipped (FUE) 
date four years from fiscal year 02 to fiscal year 06. At that point in 
the program, we had conducted just two flight test intercept attempts 
and had not benefited from the two subsequent years of additional 
program development and flight test experience. Accordingly, our view 
of the program today is not what it was in 1996. We believe the program 
is now adequately funded, could not be accelerated without incurring 
unacceptably high risk, and that the current program reflects a 
moderate risk approach to achieving the FUE in fiscal year 06.
    With respect to your question on risk, I think we have always 
acknowledged that there was, and is, a significant technical challenge 
associated with the THAAD program development. The warfighter's urgency 
of need of an upper-tier theater missile defense capability, however, 
drove the Department to accept a development schedule that was assessed 
and recognized in the program's Milestone I Acquisition Memorandum as 
being ``high risk.''
    Question. Do you believe the THAAD program has been too aggressive 
in terms of schedule and resources? Did the Administration's decision 
in 1996 (President's Budget 97) to cut the program back and the 
subsequent reversal of that decision have an effect on the program? Did 
the lack of a stable funding profile disrupt the careful management of 
the program?
    Answer. As planned for in 1991, the original THAAD program was 
directed toward achieving a First Unit Equipped (FUE) in fiscal year 
02. In hindsight, given our experience with flight test failures, it's 
apparent that a FUE in fiscal year 02 was probably too aggressive in 
both schedule and resources. We have to remember, however, that urgency 
of need was and continues to be a paramount concern in the development 
of this program.
    I believe the THAAD program that we have today, which achieves an 
FUE in fiscal year 06, does reflect a moderate risk approach to the 
development of the THAAD system. Since 1996, the Department has 
implemented three restructures of the THAAD program. I would, in fact, 
characterize these restructures as having a disrupting impact on the 
program, but principally in terms of the Government and prime 
contractor management attention and resources required to revise and 
implement new program plans.
    I do not believe, that either of those restructures have 
contributed to the lack of flight test success to date. The program's 
failure to achieve an intercept has been principally related to 
problems with implementation of sound and rigorous systems engineering 
and quality control processes. Working closely with the prime 
contractor over the past year, we've accomplished a great deal in 
improving and adding discipline to these processes--I'm optimistic that 
they will contribute to a flight test success this year.
    Question. Should the Congress continue to aggressively fund this 
program? Or should we reevaluate this program given its recent 
technical problems?
    Answer. We have an urgent need for the development and fielding of 
an upper-tier system to address the threat that THAAD is designed to 
defeat. Irrespective of how the THAAD program proceeds, the threat will 
remain and so we must continue to develop a capability to counter that 
threat. We are currently funding the THAAD development at an 
appropriate level and we have no plans to terminate the program. Should 
the program fail to achieve an intercept on its next flight test, then 
the Department may need to reassess the THAAD program development and 
determine whether there are alternative acquisition strategies for 
meeting the mission need.
    Question. Do you believe in the technical viability of the current 
missile design?
    Answer. The problems THAAD has experienced in its attempts to 
achieve a hit-to-kill intercept have, in general, involved missile 
reliability and system engineering and are not indicative of a 
fundamental design flaw. Following FT-07, I chartered an Independent 
Review Team (IRT) to assess the missile critical functions and design 
margins, as well as review the concept for the overall system design. 
Though the review made a number of recommendations to improve system 
reliability and to reduce flight test risk, the IRT concluded that the 
THAAD system concept and missile design are sound.
    Question. Did your review include a look at other potential 
contractors? Is it a mistake to put all your ``eggs in one basket''?
    Answer. Since the competitive award of the PD&RR contract, the 
Department has never initiated any formal assessment of potential 
contractors, outside of the prime, for the THAAD development. To date, 
the radar, launcher, and battle management segments have all performed 
superbly during flight testing. Should the missile continue to 
demonstrate problems in flight testing, however, seeking a new source 
for the missile development is one of several possible alternative 
acquisition strategies for the program.
    Question. Apparently, some of the problems in THAAD were related to 
issues of quality control. Do you believe contractor is now applying 
enough rigor to reviewing its THAAD program?
    Answer. While Lockheed Martin Missiles and Space (LMMS) has 
admittedly had problems in quality control, the problems being 
discovered now are a result of an increased emphasis on quality 
control/product assurance and more rigorous pre-flight ground testing. 
Following the FT-07 failure, LMMS implemented recommendations from the 
government Project Office and an independent missile assessment team 
that included a complete reassessment of the acceptance test procedures 
and the environmental stress screening of the missile components. As a 
result of this process, LMMS increased the ground test shock and 
vibration testing for several components to more thoroughly test the 
packages. This increased discipline and more rigorous approach to 
ground testing has significantly increased confidence in the 
contractor's overall quality control and flight test preparation 
processes going into the next test.
    Question. Given the urgent requirement for an upper tier missile 
defense system and the problems that THAAD is now experiencing, do you 
think we should seek alternative systems?
    Answer. Based on the independent Government review I've discussed, 
we have assessed the THAAD system concept as being sound for meeting 
the requirement for an upper-tier TMD system. As I have indicated in 
prior responses, the THAAD radar, battle management, and launcher 
segments have all performed well throughout the flight test program. 
The failures of the missile have been principally related to the rigor 
with which systems engineering and quality control processes have been 
applied. Since the last flight test, the Government and the prime 
contractor have worked intensively to improve upon these processes. 
Coupled with an enhanced flight test readiness process, we are 
optimistic that an intercept will be achieved in flight testing this 
year. Given this outlook, we believe the THAAD system represents the 
most viable, near-term solution toward acquiring an upper-tier TMD 
capability.

                THAAD User Operational Evaluation System

    Question. The present acquisition plan calls for the procurement of 
a User Operational Evaluation System (UOES) or initial capability--
consisting of 40 missiles by the year 2001. The General Accounting 
Office (GAO) and the Director of Operational Test and Evaluation 
(DOT&E) and other have raised concerns about the use of just one 
successful test as the criteria for the UOES award.
    The Milestone II (Engineering and Manufacturing Development) 
criterion requires three body-to-body intercepts.
    What was the impact of the last flight test failure in terms of 
schedule? When will the User Operational Evaluation System (UOES) be 
deployed?
    Answer. The failure to achieve an intercept last March caused the 
program to breach a number of schedule milestones which led the 
Department to assess and subsequently implement a restructure of the 
program. This restructure slipped the program schedule for achieving 
FUE by two years from fiscal year 04 to fiscal year 06.
    As you are aware, the execution of the UOES option is contingent 
upon achieving a successful intercept in flight testing. With the next 
flight test scheduled for the third quarter of this fiscal year, we 
project an initial capability (defined by the warfighter as two radars, 
two battle management units, four launchers and twelve missiles) by the 
end of fiscal year 00 with final deliveries of missiles in fiscal year 
01.
    Question. Last year, the General Accounting Office (GAO) issued a 
report criticizing the plan to exercise a contract option for the 40 
User Operational Evaluation (UOES) missiles upon one successful 
intercept test. Do you think that GAO's overall concerns about 
concurrency are valid?
    Answer. The Department has come to share some of the concerns noted 
by the GAO regarding award of the UOES missile option; however, we have 
never agreed that the award should be delayed until completion of the 
entire PD&RR flight test program and the Limited User Test (LUT). Award 
of the UOES option based on a single intercept does require the 
Government to assume increased cost and technical risk. We have always 
sought, however, to balance that risk with the warfighter's urgent need 
for an upper tier TMD capability. Given that the objective system will 
not be available until fiscal year 06, the limited contingency 
capability that UOES will provide continues to be an important aspect 
of the UOES concept and the program as a whole.
    As reflected in the response below, the Department still plans to 
award the UOES option with a single intercept. Over the past year, 
however, the Department has worked to develop a plan which reduces 
technical risk and limits the government cost exposure based on 
employing an incremental approach to execution of the UOES contract 
option.
    Question. Is the Army still planning to commit funds early for the 
40 UOES missiles? Have they reconsidered that position because of the 
recent technical failures? If no, why not? Is this a safe or prudent 
choice? What are you doing to minimize the government's financial risk?
    Answer. Per the Milestone I Acquisition Decision Memorandum (ADM), 
2 criteria must be satisfied prior to exercising the contract option 
for 40 UOES missiles:
          (1) Hardware in the loop demonstration of guidance and 
        control systems,
          (2) One body-to-body intercept using the THAAD radar.
Of these two criteria, a successful body-to-body intercept has not yet 
been achieved. It is still the Department of Defense plan to exercise 
the missile option following a successful intercept. However, because 
each intercept tests failure to date has had a different root cause and 
because of differences between the current test configuration and the 
UOES missile, there is concern within DoD regarding the risk of buying 
40 UOES missiles on the basis of only one intercept. As a result of 
these concerns, OSD, BMDO, and the Army have agreed to revise the plan 
for exercising the option. Formal contract option initiation is planned 
following the first successful intercept, but a phased implementation 
strategy that includes two interim progress reviews (IPRs) and a 
subassembly review if necessary will be pursued. The first IPR will 
follow the completion of FT-08, ground tests on the block upgrade (BUG) 
configuration, and a 60-day planning session. This IPR would give 
authority for partial contract execution to buy long lead items. A 
second IPR will be conducted prior to the full contract execution of 
hardware purchases. Finally, a Government subassembly review will be 
conducted following FT-10, if necessary, to review plans to complete 
assembly of the missiles. This phased approach limits government 
financial and technical risk by allowing additional ground testing and 
flight testing prior to purchase of all hardware components.
    Question. Has the Director for Operational Test and Evaluation, 
Philip Coyle, had any difficulty with this plan? Why is he concerned 
about it? Does it pose any risk?
    Answer. Dr. Coyle and his staff played a key role in developing the 
phased approach described above and concurred with the plan's 
implementation.
    Question. What is the exit criteria for Demonstration and 
Validation? Is that one test or more? Why did the Department decide to 
insist on three body-to-body intercepts? Do you agree with that 
decision?
    Answer. The THAAD Milestone II (MSII) exit criteria address the 
missile, sensor (radar), and battle management segments, as well as the 
producibility of key components. These broad categories have been 
broken down further in order to specify more detailed, focused 
requirements that must be satisfied prior to the next milestone 
decision. This includes demonstration of successful body-to-body 
intercepts, missile kinematic flyout and guidance capability, radar 
sensitivity, discrimination, and track handling, interoperability, and 
lethality. Exit criteria are satisfied based on a combination of flight 
test and ground test results and model/simulation-based analyses 
conducted over the course of the entire Program Definition and Risk 
Reduction (PD&RR) phase. At Milestone I (January 1992), three body-to-
body intercepts were believed sufficient to demonstrate that the THAAD 
program had resolved issues associated with an Endoatmospheric/
Exoatmospheric interceptor and integration with the THAAD radar; I 
concur with that assessment.
    Question. Since the flight testing program has been delayed for 
over a year, it is unlikely that the 2004 deployment date can be 
achieved. What is your present estimate as to when this system will be 
able to be fully deployed?
    Answer. The current THAAD program will achieve its First Unit 
Equipped (FUE), in fiscal year 06. As I've indicated in a prior 
response, the THAAD program was restructured in 1997 to delay the 
program FUE by two years from fiscal year 04 to fiscal year 06. Though 
flight testing has been delayed by a year, the program is implementing 
an EMD risk reduction program to keep the program on track to achieve 
its FUE date.

                    THAAD Substantial Increased Cost

    Question. The Selected Acquisition Report (SAR) for June 30, 1997 
shows that the current cost estimate for THAAD has increased by $3.4 
billion from the baseline estimate. The SAR also shows that $1.4 
billion of that increase occurred during the last review period--
between December 1996 and June 1997. What is the specific reason for 
the $3.4 billion increase?
    Answer. We have in fact incurred significant cost growth in the 
THAAD program since the development was initiated in 1991. The original 
Research Development, Test, and Engineering (RDT&E) program was 
estimated to cost $4.3 billion; that program plan called for a 48 month 
Program Definition and Risk Reduction (PD&RR) phase (fiscal year 92-
fiscal year 96), followed by a 60-month Engineering and Manufacturing 
Development (EMD) phase and led to declaration of First Unit Equipped 
(FUE) in fiscal year 02. I believe this is the SAR estimate to which 
you refer. The following table extracted from the June 30, 1997, SAR 
provides a breakout of the components of the cost increase:

------------------------------------------------------------------------
                                                                fiscal
                                                     TY$M       year 88
                                                                  C$M
------------------------------------------------------------------------
Economic........................................      -318.3  ..........
Quantity........................................  ..........  ..........
Schedule........................................     1,278.6       808.9
Engineering.....................................     1,241.6       850.8
Estimating......................................     1,241.7       874.2
Other...........................................  ..........  ..........
Support.........................................        -4.4        -3.9
                                                 -----------------------
    Total.......................................     3,439.2     2,530.0
------------------------------------------------------------------------

    Since the program's inception, the Department has implemented three 
major restructures--a result of both technical problems specific to 
THAAD, and competing modernization requirements across DOD programs. 
Since June 1997, the total program cost estimate decreased from $7.7 
billion to $7.3 billion as cited in the December 1997 SAR and reflects 
a development program that continues until fiscal year 07, with FUE 
declared at the end of fiscal year 06.
    There are a number of major contributors to this cost growth, but 
the largest is the flight test failures we have experienced. These 
failures led to program delays, contractor cost overruns, and program 
restructures. As a result, the program FUE has been delayed 4 years 
with an increase in the contract period of performance in both PD&RR 
and EMD. Further, the contractor has incurred additional costs as a 
result of flight test problems and the need to implement corrective 
actions following flight test failures.
    Question. How much was due to the delay in the schedule and 
additional testing?
    Answer. The delay in the schedule caused increase of $808.9 million 
(fiscal year 88C$/$1.278 billion (TY$)). The additional PDRR testing 
increased costs by $96.0 million (fiscal year 88C$/$128.8 million 
(TY$)).
    Question. How much was due to cost estimating?
    Answer. $874.2 million (fiscal year 88C$)/$1.2417 billion (TY$) was 
attributable to cost estimating.
    Question. What is being done to keep the cost of the program within 
reason?
    Answer. The Department is extremely concerned about the cost growth 
we've observed to date on the THAAD program. We have prepared and are 
forwarding a report to Congress which addresses the initiative the 
Department is implementing to control and reduce costs. To briefly 
summarize, since last Fall the Ballistic Missile Defense Organization 
(BMDO) and the Army have been working closely with the contractor to 
control costs and identify areas where we can drive down total 
acquisition and life cycle costs. Through Integrated Product and 
Process Development (IPPD), the Government and the contractor are 
assessing for implementation a broad range of initiatives in the area 
of cost-performance trades, alternative acquisition strategies contract 
management, test and evaluation, and producibility enhancements. We are 
intensively working this effort. The technical challenges of the THAAD 
program are still significant, however, we believe this work will 
ensure that we provide the warfighter with not only a capable system, 
but one that is affordable as well.

                     Navy Theater-Wide (Upper Tier)

    Question. The Navy Theater-Wide program will intercept ballistic 
missiles in their ascent, mid-course and descent phases. As with the 
Lower Tier system, Navy Upper Tier will use the extant capabilities of 
the Aegis weapon system. A Standard Missile with a kinetic (hit-to-
kill) vehicle will provide exoatmospheric intercept capability. The 
Navy Upper Tier program is a pre-Milestone I program. The Defense 
Acquisition Board (DAB) was scheduled to review the program in February 
but this has been delayed.
    Once the program formally enters into Milestone I, the Program 
Definition and Risk Reduction (PDRR) phase, it will begin a series of 
ten Aegis LEAP Intercept (ALI) flight tests. The last five of those 
tests will be intercept attempts. As currently planned, the budget 
provides funding for risk reduction and a Milestone II in 2003. The 
budget request for 1999 is $190 million, $219 million less than the 
1998 appropriation, and is not sufficient to support a deployment 
program.
    The Navy Upper Tier system is designed to provide intercept 
capability against medium and long-range theater ballistic missiles. 
The system has several advantages over current programs insofar as: it 
builds upon existing infrastructure; it is highly mobile and can be 
rapidly positioned around the world; and it will have the ability to 
intercept a target in its ascent phase--greatly limiting potential 
damage and increasing the area that is to be defended.
    General Lyles, what is the advantage of Navy Upper Tier regarding 
its ability to use the existing AEGIS Weapons System? Does this save 
time? Does this save money?
    Answer. Incorporation of the Lightweight Exoatmospheric Projectile 
(LEAP) technology onto an existing AEGIS platform using Standard 
Missile will provide both a cost and schedule advantage due to per-
existing infrastructure.
    Question. General Lyles, what is the benefit of Navy Upper Tier's 
mobility? How will that help the CINCs? What kind of advantage will it 
provide in terms of logistics and warfighting capability?
    Answer. The Navy's ability to position as needed within 
international waters provides significant flexibility to our 
warfighters. This is particularly important where Host Nation Support 
may be limited. Additionally, because the Navy can self-deploy an 
initial in-theater presence, logistical resources can be reallocated to 
other non-TBM priorities.
    Question. General Lyles, at what point in an incoming missile's 
flight does the PAC 3, the Navy Lower Tier, and the THAAD actually 
intercept that target? What is the disadvantage of intercepting a 
missile in its final or ``terminal'' phase?
    Answer. PAC 3, Navy Lower Tier, and THAAD all intercept in the 
descent phase of target flight. The earlier a threat can be engaged, 
the less likely the defended area will receive collateral damage from 
the engagement. The lower-tier systems, PAC-3 and Navy Area TBMD, also 
have very limited reaction time available to reengage if necessary.
    Question. Will the Navy Upper Tier be capable of intercepting a 
target early in its flight--or in its ``ascent'' phase? What is the 
advantage of intercepting a missile in its ``ascent'' phase?
    Answer. The Navy Upper Tier TBMD System, now known as ``Navy 
Theater Wide,'' will be capable of ascent-phase intercept. Ascent phase 
is the portion of a missile's flight after booster burnout and before 
apogee, the highest point in the ballistic trajectory. The advantage of 
ascent phase intercept is that it allows one AEGIS cruiser to defend 
many different targets, since hostile missiles are intercepted before 
they have proceeded far down range along different tracks toward their 
targets. Additionally, the earlier a threat can be engaged, the less 
likely the defended area will receive collateral damage from the 
engagement.
    Question. The budget request for Navy Upper Tier is $190 million, 
$219 million less than the 1998 appropriated level. Do you think that 
the request is sufficient to continue to develop Navy Upper Tier?
    Answer. The fiscal year 99 figure of $190 million is sufficient to 
continue development of Flight Demonstration Program associated with 
the Navy Theater Wide risk reduction efforts.
    Question. Does the President's Budget propose enough funding to 
deploy the Navy Upper Tier program?
    Answer. The President's Budget will support continued development 
of the Navy Theater Wide (NTW) Block I capability, but does not include 
funding for deployment. Under the current NTW program schedule, 
deployment funding is not required within the current President's 
Budget planning window.
    Question. General Lyles, the Navy Upper Tier system has been 
through five major reviews which have all reaffirmed the requirement 
for a Navy Theater Wide system. In addition, the CINCs have repeatedly 
testified that theater missile defense is their number one priority. 
Why is it then, that the Administration has not requested the necessary 
funds to deploy the Navy Upper Tier system?
    Answer. The Navy Theater Wide system is the least mature of the 
four TBMD Major Defense Acquisition Programs (MDAPs) under development 
at BMDO, including PATRIOT PAC-3, THAAD, and Navy Area TBMD System. In 
addition to these MDAPs designed to defend against the Theater 
Ballistic Missile threat, BMDO is also spending significant resources 
on developing a National Missile Defense System in anticipation of a 
future threat. All of these systems rely on a firm foundation of basic 
research and technology, also funded by BMDO. NTW will require a long-
term commitment of sufficient dollars after the AEGIS LEAP Intercept 
(ALI) demonstration concludes in fiscal year 01. Sufficient funds have 
been requested for the ALI demonstration.
    Question. How much more funding would be required to actually 
deploy Navy Upper Tier?
    Answer. A Navy Theater Wide Block I capability can eventually be 
deployed under the fiscal year 1999 President's Budget funding profile. 
Funding increases required to accelerate deployment are currently being 
defined by BMDO and the Navy.
    Question. What is the total acquisition cost of Navy Upper Tier?
    Answer. Navy Theater Wide acquisition costs have not yet been 
finalized. The total acquisition cost of the Navy Theater Wide System 
will depend on many factors, including the final date set for a First 
Unit Equipped (FUE), and whether or not a decision is made to proceed 
with a Block II major system upgrade, the follow-on capability to the 
initial Block I capability. A cost estimate for Block I will be 
available after the completion of the Independent Cost Estimate and the 
Milestone I-equivalent DAB Review later this year.
    Question. What are the total number of missiles and ships that 
would be equipped with Navy Upper Tier?
    Answer. The Navy Theater-Wide Block I capability will consist of an 
initial buy of 80 missiles, with four AEGIS cruisers modified to carry 
and fire them. If a decision is later made to proceed with a Block II 
capability as a major system upgrade, the Navy vision is to convert all 
Vertical Launch System (VLS)-equipped AEGIS cruisers to the NTW 
standard, with an inventory of several hundred Standard Missile SM-3 
Block III missiles.

                Navy Theater-Wide--Definition of Program

    Question. The Navy Upper Tier is a ``core'' theater missile defense 
program. However, it lacked definition until it was designated as a 
``Major Defense Acquisition Program'' on September 16, 1997. This 
designation should ensure that the program meets normal acquisition 
guidelines. However, a Defense Acquisition Board (DAB)--scheduled to 
validate the program's acquisition plan--was postponed. Some believe 
that the DAB review is critical to ensuring the program's long-term 
viability. General Lyles has expressed concern over the direction of 
the program and has stated that he believes the program should not 
receive funding increases until the Navy strategy is approved by the 
DAB.
    What is the objective of the Defense Acquisition Board (DAB) 
meeting on Navy Upper Tier?
    Answer. The purpose of the Milestone I-equivalent DAB for Navy 
Theater Wide is to establish the Acquisition Program baseline (APB) for 
the program. Major Defense Acquisition Programs such as NTW require an 
APB with an approved acquisition strategy and an appropriate portfolio 
of approved documentation, to include the Cost Analysis Requirements 
Document (CARD), Single Acquisition Management Plan (SAMP), Test and 
Evaluation Master Plan (TEMP), and Operational Requirement Document 
(ORD). This provides the Department, Administration and Congress the 
means to assess cost, schedule and technical performance.
    Question. Why was the DAB meeting postponed?
    Answer. The Navy Theater Wide DAB originally scheduled for February 
was postponed due to a lack of definition in program documentation. The 
DAB is likely to be further postponed due to a reassessment of program 
testing and risk reduction in light of the recently released Report of 
the Panel on Reducing Risk in Ballistic Missile Defense Flight Test 
Programs (the ``Welch Report''). The Navy and BMDO wish to ensure that 
the testing and evaluation regimen for Navy Theater Wide is 
sufficiently robust to prevent unanticipated program delays due to 
flight test failures.
    Question. Do you think that it is necessary to have a clear plan, 
as would be outlined at the DAB, before providing additional funds for 
the Navy Upper Tier? Why?
    Answer. A well-defined DAB approved acquisition program will 
include an approved Acquisition Program Baseline (APB). The only way 
that informed decisions may be made as to current status and future 
options is from the ``benchmark'' of a well-documented, baselined 
program. This is the discipline and rigor that the DAB process 
enforces. A successful DAB will give the Navy, BMDO and Congress a 
starting point from which to guide the progress of this important 
program.
    Question. What are the associated risks of not having a clear 
acquisition strategy?
    Answer. The cost, schedule and technical risks facing an undefined 
program can be numerous, and reflects a degree of risk that the 
Department seeks to avoid. Systems engineering rigor and financial 
discipline cannot be effectively monitored. The pace of vital Risk 
Reduction activities cannot be effectively measured, since no firm 
strategy will have been outlined and agreed upon in an approved Test 
and Evaluation Master Plan (TEMP). All planning would be unstable 
without a baseline.
    Question. What are the technical challenges associated with the 
Navy Upper Tier program? Do you think these risks can be overcome?
    Answer. The Navy Theater Wide program promises high operational 
value but pushes the state of the art. The challenge for the Navy, BMDO 
and the testing community is to manage risk through a program of 
comprehensive, incremental and sequential simulation and testing. Key 
areas of technical risk in this program include:
    --Hit-to-Kill intercept. This is the only way to deliver sufficient 
energy to kill the entire range of potential NTW targets. Hit-to-Kill 
is difficult, though, and has not yet proven reliable.
    --Exoatmospheric intercept. The Navy Theater Wide Kinetic Warhead 
(the ``LEAP'') must be able to maneuver rapidly in the vacuum of space 
and discriminate against multiple objects, ranging from boosters to 
debris to celestial bodies. It must pick out the lethal object, and 
then maneuver to strike a specific spot on that object to achieve 
maximum lethality.
    --The AEGIS Weapon System. AEGIS is a superb system, but it was 
originally designed to counter the Soviet air threat. That it has 
demonstrated an inherent TBMD capability under real world conditions is 
a measure of the excellence of the original design. However, in order 
to provide robust detection and tracking support for NTW intercepts, 
significant modifications must be made to improve the performance of 
the SPY radar against the more challenging theater ballistic missiles 
now being deployed.
    --All of these risks must be successfully retired, and the NTW 
Program Office is working to define a robust schedule of Risk Reduction 
Activities designed to do so.
    Question. What would be required to reduce the risk in this Navy 
Upper Tier program?
    Answer. Robust risk reduction requires a careful balance of 
scientific discipline, adequate funding, and flexible scheduling. As 
explained in the recently released ``Report of the Panel on Reducing 
Risk in Ballistic Missile Defense Flight Test Programs'' (the ``Welch 
Report''), a report commissioned by BMDO and the OSD testing community, 
system testing and risk reduction activities must be comprehensive, 
incremental, and sequential. There is grave danger inherent in 
conducting risk reduction activities ``in parallel,'' hoping that tests 
on many different subsystems conducted simultaneously will allow those 
subsystems to work together when tested as a complete system. 
Additional funding can allow additional risk reduction, but only up to 
a point. At some point, tests must proceed sequentially, and that takes 
a certain amount of time, both to execute tests and to properly 
interpret the data resulting from those tests. That said, however, Navy 
Theater Wide has a fairly comprehensive risk reduction program 
including:
    --The AEGIS Leap Intercept (ALI) program itself is a major risk 
reduction activity, seeking to prove the basic hit-to-kill concept upon 
which NTW is built, by intercepting a ballistic missile target outside 
the earth's atmosphere using the LEAP Kinetic Warhead (KW).
    --Vital lethality risk reduction activities include quarter-scale 
light gas gun tests of LEAP performance against simulated threat 
warheads, and full-scale rocket sled tests starting later this year of 
the KW against actual threat-configured warheads. These tests will 
allow researchers to better characterize the type of damage inflicted 
on a TBM warhead by the hypervelocity LEAP.
    --Discrimination risk reduction will involve captive carry of the 
actual LEAP seeker in a specialized, BMDO-funded aircraft (the Airborne 
Surveillance Testbed), use of Hardware-in-the-Loop facilities at the 
Johns Hopkins University Applied Physics Laboratory, and enhancement of 
the SPY-1 radar discrimination capabilities through use of the Navy's 
High Range Resolution Testbed. Initial testing of some critical LEAP 
algorithms will take place during BMDO's Red Crow experiment launch in 
April, and during the ARIES Target Test Vehicle mission (TTV-1) 
scheduled for September.
    --The Department is planning additional NTW risk reduction in the 
form of flight testing against threat-representative targets prior to a 
Milestone II decision to proceed into the Engineering and Manufacturing 
Development (EMD) phase. The Department is determining the appropriate 
number of Developmental Testing/Operational Testing (DT/OT) flight 
tests, to ensure that the warfighter gets a proven, capable system when 
NTW Block I is deployed.

                         Airborne Laser Program

    Question. The Airborne Laser is not technically part of the 
Ballistic Missile Defense Organization (BMDO) program. It is being 
funded within the Air Force's budget. The Air Force plans to integrate 
a high power chemical laser into a 747 aircraft with the mission to 
destroy theater ballistic missiles in the boost phase. The program will 
develop, procure, and operate seven aircraft at an approximate cost of 
$11 billion. The budget request for 1999 is $292 million.
    Three studies of Airborne Laser have been conducted over the last 
year. The General Accounting Office (GAO) concluded that the ABL could 
be under-designed because atmospheric turbulence could be four times 
greater--thus attenuating and weakening the laser beam--than the Air 
Force assumed. An internal group from Program Analysis and Evaluation 
(PA&E) reportedly agreed with GAO's findings--concluding that ``the 
laser would meet its range requirements less than half the time against 
Scuds'' according to Defense Week. In response to these findings, the 
Air Force Chief of Staff named a panel of laser scientists to study 
atmospheric propagation data of the ABL under the auspices of the Air 
Force Scientific Advisory Board.
    General Lyles, your office is charged with the responsibility for 
setting priorities for Ballistic Missile Defense. Suppose for a moment 
that additional funding was available to your office and that the Air 
Force had not funded the Airborne Laser program. What would be your 
highest priority for use of the additional funds: to reduce risk on 
your current programs, to develop the Airborne Laser program, or to 
fund some other program?
    Answer. Deputy Secretary of Defense Hamre stated that the ABL 
program is best funded and managed by the Air Force and the President's 
fiscal year 99 Budget Request identifies the Department's priorities 
and maintains the ABL program within the Air Force.
    As Director of the BMDO, I am responsible for developing and 
acquiring the best Theater Air and Missile Defense (TAMD) Family of 
Systems (FOS) architecture available for US and Allied Forces. TAMD is 
an urgent, near term U.S. defense priority that has been under 
development since 1991. Although a high priority must be placed on 
producing and fielding PATRIOT PAC-3, THAAD, Navy Area, and Navy 
Theater Wide programs, I strongly support funding the ABL, as does the 
Air Force. ABL is the Department's primary boost phase kill capability 
program.
    The ABL fits into the TAMD Family of Systems as it will provide the 
only planned boost-phase theater ballistic missile (TBM) killer in the 
FOS architecture. As you know, killing a TBM during the boost phase of 
its flight profile improves the chance of dropping the missile body and 
warhead within enemy territory. This early kill potential assumes great 
importance against weapons of mass destruction or sophisticated 
countermeasures such as advanced sub-munitions. As a rapidly deployable 
active defense asset, the ABL complements all planned upper and lower 
tier interceptor systems and would provide additional operational 
flexibility for limited interceptor inventories.
    Current priorities for the BMD program provide for allocating 
additional funding: first priority for MDAP risk reduction efforts; 
second priority to joint interoperability risk reduction issues with 
MDAP enhancements; and finally improvements to Advanced Technology 
programs. Depending on the quantity of funds provided, BMDO would 
seriously consider maintaining the Airborne Laser Program (ABL) at a 
modest level to ensure contractor team stability and continued level of 
efforts pending our ability to fit a more substantial program in our 
top line. BMDO funding could not provide for a more aggressive ABL 
program until PAC-3, Navy Area, THAAD and Navy Theater Wide are well 
into the production phase.
    Question. In Helsinki in March 1997, President Clinton and 
President Yeltsin agreed on a Joint Statement concerning the Anti-
Ballistic Missile (ABM) Treaty. The agreement effectively puts 
limitations on theater missile defense systems. The Helsinki Joint 
Statement indicated that development and deployment of the Space-Based 
Laser was off the table. Are the Russians also concerned about the ABL? 
Is the ABL treaty compliant?
    Answer. The Russians have not offered any substantive comment on 
the Airborne Laser to date. The Air Force's ABL is designed to be a 
theater missile defense system. When deployed, the system would not 
pose a realistic threat to the strategic nuclear force of Russia. The 
Air Force is pursuing the ABL in a manner fully consistent with all 
provisions of the 1972 ABM Treaty. The ABL is not yet sufficiently 
mature for a compliance review. When the program is sufficiently 
mature, the Air Force will present the program to the DoD Compliance 
Review Group for a compliance determination.
    Question. A study was done by the Office of Net Assessment last 
year that suggested that there are operational limitations to the ABL. 
What are those limitations? How did the ABL fare in comparison to the 
Space Based Laser? How well did the ABL do in comparison to other 
missile defense systems?
    Answer. The fiscal year 1997 study did not identify operational 
limitations to the ABL. In addition, this study was not a COEA of 
current or planned theater missile defense systems and no comparisons 
were drawn between ABL and SBL and between ABL and other missile 
defense systems.
    The fiscal 1997 effort was the first of three BMDO and the Office 
of Net Assessment co-sponsored SBL Operational Concepts wargames, as 
part of Net Assessment's larger Revolution In Military Affairs study. 
The objective of these seminar-style studies is to develop innovative 
concepts of operations for Space-Based Laser and to expose the war game 
``players'' to the challenges of integrating various systems into the 
Joint Theater Ballistic Missile Defense architecture. In the 
particular, referenced scenario, severe operational constraints were 
placed on the ABL which limited its effectiveness. The scenario was 
against a peer competitor with sophisticated anti-aircraft defenses. 
The ``players'' preferred to establish air superiority before directly 
targeting the peer competitor or forward basing the ABL. In post-game 
analysis, however, it was concluded that this may have been too 
conservative an employment of the ABL.
    Question. What is the maximum range of the ABL?
    Answer. The ABL's maximum range is dependent on several factors 
including atmospheric conditions (e.g., optical turbulence, cloud 
height), location of the target relative to the aircraft, and type of 
missile (hardness and boost time). Thus, a single maximum range value 
cannot be provided; however, the current estimated maximum ranges for 
various types of missiles under nominal conditions are shown below. --
----.
    Question. In circumstances where the ABL cannot reach a target due 
to the laser's range limitations, overflight would be necessary. Has 
the Air Force given ample consideration to this limiting factor? How 
would ABL work with other BMD systems?
    Answer. Overflight is just one option the Air Force is examining. 
The ABL will be a highly flexible standoff weapon system that provides 
theater commanders a variety of options for deploying ABL Combat Air 
Patrols (CAP) to provide effective coverage of the threat. If a 
situation arises where ABL cannot reach a target due to a laser range 
limitation, the theater commander actually has many options available 
to him to provide the required theater ballistic missile defense. He 
can:
    (1) locate one or more ABL CAPs at a higher altitude to reduce 
optical turbulence and increase the weapon laser's range;
    (2) move an ABL CAP closer to the target (including the possible 
choice of moving it over hostile territory) to reduce the range to 
target;
    (3) add an additional ABL CAP to increase coverage;
    (4) assign targets originating from specific threat locations to 
other deployed systems within the theater ballistic missile defense 
architecture. The theater commander selects one of these options based 
on current intelligence, theater threats, level of air superiority, 
coverage requirements and optimal deterrence/engagement potential.
    ABL is a high value asset and will be deployed with a fighter CAP 
support in the same fashion that AWACS and JSTARS are deployed. In 
addition, a defense suite will protect ABL against surface-to-air and 
air-to-air threats.
    The ABL is designed to work with other BMD systems as an integrated 
member of the overarching TMD architecture using Link 16. Through this 
network, the ABL will provide:
    a. quick and accurate launch point estimates to enhance the attack 
operations layer of the architecture,
    b. TBM trajectory (position and velocity) data and impact point 
predictions to enhance upper and lower tier system engagement 
effectiveness
    c. impact point predictions to theater commanders for passive 
defense.
    Question. Can ABL perform its mission in all weather conditions?
    Answer. The ABL is being designed to operate ``above'' the weather 
(notionally 40,000 ft.). Even with a solid cloud cover undercast, the 
ABL will be able to detect, track and destroy theater missiles.
    Question. What are the fuel requirements for ABL? How many shots 
can the laser fire with the allotted fuel aboard? What if a potential 
adversary were to fire more than 30 missiles? Wouldn't that defeat the 
ABL?
    Answer. The amount of laser fuel (magazine size), measured in 
seconds of lase time, is classified. The Air Force estimates that the 
number of TBMs which can be killed with this magazine typically varies 
between 20 and 40 depending on the specific engagement geometry, target 
type, and atmospheric conditions and amount of laser energy expended to 
kill the TBM.
    ABL will detect all 30 missile launches, prioritize and engage as 
many missiles as possible following the specific mission's rules-of-
engagement (e.g., the ABL may be directed to engage all missiles 
launched from certain regions due to their high probability of carrying 
weapons of mass destruction). In addition, track data will be passed to 
the joint missile defense architecture via Link 16, thereby enhancing 
the overall architecture's effectiveness.
    Such a large missile launch would not defeat the ABL. Typically, 
there will be two ABLs on Combat Air Patrol (CAP) with overlapping 
coverages and the ability to deconflict engagements. These ABLs would 
operate as an integrated member of the Family of Systems architecture. 
In salvo launches, the ABL is not designed to defeat all missiles. 
Rather, it is designed to thin the threat and provide warning and 
tracking data, to significantly improve the effectiveness of the other 
missile defense systems.
    Question. What has been done to solve the problem of beam 
attenuation? Are you confident that you will able to counteract the 
effects of the atmosphere and turbulence on the ABL?
    Answer. Atmospheric attenuation has a negligible effect on ABL's 
performance. The atmosphere at ABL's operational altitudes (nominally 
40,000 ft.) is so thin that 90 percent or more of the weapon laser 
energy is transmitted to the targets.
    I am highly confident ABL will overcome the negative effects of 
atmospheric turbulence on ABL performance. ABL will employ active tilt 
jitter correction and atmospheric compensation subsystems whose 
critical components and algorithms have been proven in a number of 
airborne, brass board, and field tests. The data from all tests 
conducted to date match detailed ABL simulation results and indicate 
ABL will exceed its JROC-validated range requirements the vast majority 
of the time.
    Question. The chemical laser must be reduced to meet certain size 
requirements of the aircraft. How does the Air Force plan to do this?
    Answer. The chemical laser must be reduced in weight, not size. The 
Air Force has already manufactured the first flight weighted laser 
module using proven lightweighting techniques such as use of 
composites, plastics, titanium and milled-out structural components. 
This flight weighted laser module will be tested in April 1998.
    Question. What is the purpose of the Air Force's ``Adjunct 
Mission'' study? Does the Air Force believe that the ABL is capable of 
performing other missions? What other types of missions?
    Answer. The Air Force is studying several adjunct missions for the 
ABL. These studies will continue through fiscal year 99 and are 
designed to determine the cost effectiveness and feasibility of 
performing these missions with ABL. The five adjunct mission studies 
are:
     Cruise Missile Defense
     Protection of High Value Airborne Assets
     Suppression of Enemy Air Defenses
     Imaging Surveillance
     Post Boost Tracking
    Question. In the February 17, 1998 Defense Week opinion editorial 
by Mr. Angelo Codevilla stated: ``. . . The assertion that the use of a 
high energy laser aboard an aircraft firing horizontally, has been made 
possible by recent discoveries in adaptive atmosphere-compensating 
optics is nonsense. The airplane-laser combination is an old Air Force 
fantasy. Airplanes are unstable platforms, and the atmosphere is an 
inherently unpredictable medium . . . No reputable scientist will stake 
his reputation on solubility of this problem . . .'' Do you think Mr. 
Codevilla is correct in his assertion that this is a difficult 
scientific problem? How would you categorize the risks associated with 
the Airborne Laser?
    Answer. No, Mr. Codevilla is incorrect--Airborne Laser does not 
suffer from scientific problems. On the contrary, we believe we have 
solved the science issues pertaining to the ABL program through twenty-
five years of technology investment by the Air Force, DARPA, SDIO, and 
BMDO in such areas as lasers, optics, airborne pointing and tracking, 
atmospheric physics, atmospheric compensation and adaptive optics, and 
laser lethality. ABL does face the engineering challenge of integrating 
a high energy laser and a sophisticated optical system into an 
aircraft. This type of challenge is part and parcel of a program in the 
Program Definition and Risk Reduction (PDRR) acquisition phase.

                          Arrow Missile System

    Question. The ARROW is a U.S./Israeli cooperative program to track 
and destroy theater ballistic missiles. The Committee seriously 
considered terminating the Arrow program in 1995 because of the 
system's extremely poor technical performance and the substantial level 
of past and future U.S. financial commitment for the program.
    Over the past few years the Administration moved to shore up the 
program and signed a Memorandum of Understanding to limit future U.S. 
funding. However, the Administration has already gone beyond this 
limitation and has extended assistance to the year 2001. The budget 
request provides $37.9 million in 1999, $37.7 million in 2000 and $37.5 
million in 2001 for Arrow.
    The Arrow's test program has been more successful over the last two 
years than in the past. However, it failed it most recent flight test 
in August of 1997. Israel intends to begin production of the missile 
and have it operational by 1999. In addition, Israel has reportedly 
asked the U.S. for funding for a third battery of missiles.
    General Lyles, you are aware that this Committee has in the past 
had concerns regarding the performance and cost of the Arrow missile 
system. Will you please give us an update? How is the Arrow doing in 
its flight tests?
    Answer. The Arrow Deployability Program (ADP) is proceeding toward 
achieving an initial contingency capability projected in late 1999 with 
one Arrow full User Operational Evaluation System (UOES) battery 
available in the 2001 time frame and a second Arrow UOES battery in the 
2005 time frame. Although Arrow has been successfully demonstrated and 
intercepted surrogate ballistic missile targets, the most recent test, 
conducted in August 1997, failed. The United States and Israel 
conducted a failure analysis and successfully identified the cause. The 
Arrow missile problem has since been remedied and a follow-on flight 
test is planned for mid-summer 1998.
    Question. We understand that the flight test in August of last year 
failed to intercept its target. What exactly happened?
    Answer. An intense U.S. and Israeli failure analysis identified a 
circuit board in the Arrow Missile's flight control system that was 
incorrectly wired and did not pass through the required testing prior 
to installation into the missile. The required component test that was 
not accomplished would have caught the faulty component before 
installation into the missile. Clearly, it was a lack of quality 
control that caused the failure and not any design flaw. As a result, 
the quality control procedures for every component of the Arrow Weapon 
System have been thoroughly analyzed and a more rigorous quality 
control system is now in place.
    Question. We understand that Israel is seeking additional funding 
from the U.S. for a third battery of missiles. Is this true?
    Answer. The Israeli Ministry of Defense presented a proposal for 
the third battery to the Department of Defense in January 1998. The 
Ministry is seeking funding support for the additional Arrow battery in 
response to the emerging medium range ballistic missile threat in the 
region. The Israeli Defense Minister will be visiting the Department of 
Defense in March 1998, at which time the third battery, as well as 
other Israeli defense issues, will be discussed.
    Question. Has the Administration made any further financial 
commitments for Arrow? If so, exactly, what has the Administration 
agreed to provide? How much funding? For what period of time?
    Answer. In February 1998, the Department of Defense and Israeli 
Ministry of Defense concluded an amendment to the Arrow Deployability 
Agreement to enhance the Arrow User Operational Evaluation System 
(UOES) capability and provide a more thorough test regime for 
interoperability. We agreed to a cost share for the amendment of $48 
million for the United States and $12 million for Israel for fiscal 
years 98-01. The February 1998 International Agreement, concluded 
between the United States and Israel, specified that the increased DoD 
cost share for the ADP enhancement is contingent upon Congressional 
increases to the budget. Congress increased the Arrow program by $12 
million in its fiscal year 98 Appropriation to fund the amendment's 
first installment. Because of other competing priorities within the 
BMDO budget, the U.S. cost share for fiscal year 99 through 2001 is 
actually unfunded.
    Question. Is the Israeli government still committed to production 
of this system?
    Answer. Yes. In light of current and emerging ballistic missile 
threats and the possibilities of weapons of mass destruction in the 
Middle East, the Israeli Ministry of Defense is fully committed to 
producing and fielding the Arrow Weapon System.
    Question. When we last discussed this issue, the total acquisition 
cost estimates for Arrow varied and ranged anywhere from $2 to $10 
billion. What is the latest, more accurate cost estimate?
    Answer. The total cost estimate for the development and acquisition 
of two Arrow User Operational Evaluation System batteries is $1.7 
billion with the U.S. providing $614 million in RDT&E funds for Arrow 
missile development only.
    Question. Has the U.S. committed to fund any percentage of that 
production? Does the Administration intend to do so?
    Answer. No. The U.S. is only participating in the cooperative 
development of the Arrow User Operational Evaluation System (UOES) 
contingency deployment capability, as agreed in the ADP International 
Agreement, signed March 29, 1997. The Government of Israel is 
unilaterally responsible for subsequent production and deployment of 
the Arrow operational systems.
    Question. Why should the U.S. continue to fund this program? Have 
we learned anything about our missile defense system development based 
on our cooperation with the Israeli? What about the seeker?
    Answer. The U.S has, and continues to, receive technical data, risk 
reduction, and lessons learned from the Arrow missile development 
efforts which are used in development of U.S. ballistic missile defense 
efforts. Moreover, an Israeli national missile defense capability would 
significantly reduce the requirement to deploy U.S. missile defense 
assets to the Theater in crisis situations. With regard to the Arrow 
seeker, the infrared focal plane array in the Arrow is the same seeker 
technology that will be used in the THAAD intercept test later this 
Summer.
    Question. Would you fund this program in your budget if you were 
given no additional funds to do so?
    Answer. While the U.S. has no operational requirement for the Arrow 
Weapon System, we strongly support this important cooperative missile 
defense program. We have been engaged in developing the Arrow missile 
with Israel since 1988 and have the funds necessary to see it through 
final development in fiscal year 01. However, in February 1998, the 
Department of Defense and Israeli Ministry of Defense concluded an 
amendment to the Arrow Deployability Program (ADP) agreement to enhance 
the Arrow User Operational Evaluation System (UOES) capability and to 
provide a more thorough test regime for interoperability. We agreed to 
a cost share for the amendment of $48 million for the U.S. and $12 
million for Israel for fiscal years 98-01. The February 1998 
international agreement specified that the increased DoD cost share for 
ADP enhancement is contingent upon Congressional increases to the 
budget. Congress increased the Arrow program by $12 million in its 
fiscal year 98 Appropriation to fund the amendment's first 
installation. If additional funding is not provided in fiscal year 99, 
the increased U.S. share will likely be funded.
    Question. Where is Arrow on your priority list?
    Answer. While Arrow is not high on a priority list in fulfilling 
DoD operational requirements, the technical benefits of Arrow 
development efforts are very useful.

               Medium Extended Air Defense System (MEADS)

    Question. MEADS is a mobile defense system that would protect 
maneuvering forces from short range ballistic missiles. The program was 
initially an Army program (Corps SAM) but was made an international 
cooperative program in order to defray the cost of developing the 
system. Originally, the U.S. agreed to provide 50% of the cost and 
work. Germany was to provide 20%, France was to provide 20% and Italy 
was to provide 10%. However, France dropped out of the program leaving 
the U.S. with 60% of the cost and work share. The budget request for 
1999 is $43 million. The President's Budget contains no funding for 
MEADS beyond 1999 and many top acquisition officials believe that it is 
affordable.
    DoD officials concluded during the Bottom-up Review, and the 
unilateral Army program, Corps SAM, was not affordable. However, 
shortly thereafter, the program was reestablished as MEADS, a multi-
lateral program. The President's Budget contains no funding for MEADS 
beyond 1999. Does this mean that you will not proceed with this 
program? Has the decision been made to cancel this program? If so, why?
    Answer. It is our intent to proceed with the MEADS program. 
Affordability consideration have been and are the driving factors in 
determining the future of the system. BMDO, Army and OSD have given 
considerable study to program alternatives that can make the program 
affordable while satisfying the users requirements and maintaining the 
international program. MEADS FYDP funding will be a priority review 
issue in the preparation of the fiscal year 00 President's Budget.
    Question. Do you believe the multi-lateral MEADS program is 
affordable?
    Answer. MEADS funding has been constrained by affordability 
consideration and DoD examined this issue closely during the 
Quadrennial Defense Review. The QDR agreed to continue the MEADS 
program but only provided $35 million additional funding in fiscal year 
1999, bringing the total fiscal year 99 funding to $43 million. Since 
the ODR, BMDO, Army and OSD have done extensive study of alternative 
programs that will reduce cost and still satisfy the user's 
requirement. As my statement indicates, the Department will address 
funding for all BMD programs in the fiscal years 00-05 POM. MEADS FYDP. 
Funding will be a priority review issue in this process.
    Question. What is the current agreement between the U.S. and its 
partners on this program? What is the current U.S. cost share?
    Answer. The current cost share/work share agreement for the Project 
Definition-Validation (PD-V) phase is the U.S. 60%, Germany 25%, and 
Italy 15%.
    Question. The total acquisition cost of MEADS is expected to be 
about $11 billion for the U.S. How does this compare with the total 
acquisition costs of other theater ballistic missile defense systems?
    Answer. The total acquisition cost estimate for the MEADS baseline 
program is currently being updated. Also BMDO, the Army, and the Office 
of the Secretary of Defense have given considerable study to program 
alternatives that can make the program affordable while satifying users 
requirements and maintaining the international program. When the cost 
estimate is available, we will bring it forward.
    Question. According to BMDO, the total acquisition costs of THAAD, 
PAC-3, Navy Lower Tier, HAWK, MEADS and Navy Upper Tier are expected to 
be about $43 billion. General Lyles, do you believe that we can afford 
all of these programs?
    Answer. Sufficient funds are currently programmed to acquire and 
field the PAC-3, THAAD and Navy Area systems. By definition, they are 
affordable. BMDO no longer provides funds for HAWK system upgrades--
this work has been completed. Neither MEADS nor the Navy Theater Wide 
programs are currently funded as acquisition programs.
    Question. MEADS are reviewed in the Quadrennial Defense Review. 
What was the outcome of that review? Is there still a requirement for 
this type of system? Is it technically feasible?
    Answer. MEADS was an integral part of the QDR from the beginning 
and was recognized as having a valid operational requirement for the 
U.S. The QDR agreed to continue the MEADS program but only provided $35 
million additional funding in fiscal year 99, bringing the total fiscal 
year 99 funding to $43 million. I am confident the MEADS system is 
technically feasible.

                        National Missile Defense

    Question. The National Missile Defense (NMD) system will provide 
protection against long range ballistic missile threats using ``hit-to-
kill'' technology and will be ABM Treaty compliant. The primary 
components of the NMD system are: a ground based interceptor (GBI); a 
ground based radar (GBR); Upgraded Early Warning Radar (UEWR); and 
Battle Management and Command, Control and Communications (BM/C3).
    The program has completed two successful flight tests, one in June 
1997 and one in January 1998. The purpose of the flight tests were to 
test the ability of the Exoatmospheric Kill Vehicle (EKV) sensor to 
identify and track objects in space. The sensor views the target and 
decoys and identifies the simulated warhead from among the decoys.
    The Administration's ``three plus three'' deployment readiness plan 
would allow for the deployment of a minimal NMD capability in 2003 if 
the threat warrants. The budget request for 1999 is $950 million, $27.6 
million less than the 1998 appropriation, but it does not include 
funding for deployment.
    This spring, the program is expected to award a multi-billion 
dollar, 10 year contract to integrate the components of the NMD system. 
Two companies are competing for the Lead System Integrator contract: 
Boeing and the United Missile Corporation (a joint venture of Lockheed 
Martin, Raytheon and TRW). The contractors were each asked to propose a 
design for two systems: an initial system consisting of 20 
interceptors--to defeat a crude or unsophisticated target; and a 
follow-on system consisting of 100 interceptors for a more 
sophisticated target.
    General Lyles, the budget request for NMD is substantially higher 
than the budget request for 1998. Does this reflect a change in 
Administration policy or priorities? Was this change precipitated by 
emerging threats?
    Answer. The NMD Program's MDAP designation and the concomitant 
increased budget reflect the Department's commitment to the NMD program 
and recognition that a missile threat to the U.S. could arise sooner 
than predicted by the Intelligence Community. The MIDAP designation 
ensures more involvement by the user, DoD, and the Services that will 
ensure access in executing the deployment readiness program.
    The budget request of $968 million in fiscal year 99 is actually 
lower than the fiscal year 98 request when the effect of the QDR-
related increases are included. The $504 million originally requested 
for fiscal year 98 did not reflect the QDR's recommendations. The 
Department asked Congress for an additional $474 million in fiscal year 
98 to meet the QDR's intent to support accelerated R&D to facilitate a 
deployment decision as early as fiscal year 2000.
    Question. General Lyles, please explain the ``three plus three'' 
concept. What is the difference between a ``deployment readiness'' 
program and a program to actually deploy a NMD system? When will the 
decision to deploy be made?
    Answer. To accommodate the uncertainty of the threat, the NMD 
``3+3'' program strategy was created as a hedge program. The program 
transitioned from a technology readiness program to a deployment 
readiness program in April 1996. The first three years of the ``3+3'' 
program are designed to develop the various elements of the NMD system 
(Radars, interceptors, BMC3, and Space Based Early Warning). This will 
lead up to an Integrated System Test in fiscal year 99, followed by a 
deployment readiness review in fiscal year 2000. This is the first 
opportunity to make a decision to deploy.
    If a decision is made to deploy, development and deployment 
activities must be completed in three years, by 2003. If the decision 
is to not deploy, then the program will continue development 
activities. The Joint Program Office must maintain a rolling capability 
to deploy in three years, if asked to do so.
    The difference between the ``3+3'' deployment readiness program and 
a program to actually deploy is the compressed schedule of the ``3+3'' 
program initially, and the mandate to retain the flexibility to deploy. 
Additionally, there are no production funds programmed in the 
deployment readiness program. The decision to deploy will be made based 
upon the emergence of a threat and the maturity of the NMD system. The 
first decision opportunity is in fiscal year 2000.
    Question. If you were required to deploy a NMD system by the year 
2003 would the 1999 budget request be sufficient? How much more funding 
would be required to actually deploy the system? When would those funds 
be required?
    Answer. The 1999 budget request is sufficient to permit a positive 
deployment decision to be made in fiscal year 2000. It includes only 
RDT&E (development) funds. Deployment funds (procurement) will be 
requested when a positive deployment decision is made. If a deployment 
decision is not made in fiscal year 2000, then continued development 
will be undertaken with RDT&E funds, until a positive deployment 
decision.
    The Department has laid out an evolutionary approach to meeting all 
the user requirements. This approach is defined in capabilities. 
Capability 1 is an initial capability (earliest 2003) to defeat the 
unsophisticated threat. It consists of a single site with 20 
interceptors and associated radars, battle management and space based 
early warning. Capability 2 is a more capable architecture consisting 
of up to 100 interceptors at a single site, coupled with the Space 
Based Infrared System (available in 2004) and associated radars and 
battle management. Capability 3, a multi-site architecture, could be 
deployed to meet the user's full objectives.
    Cost estimates have been initially performed and validated by the 
DoD Cost Analysis Improvement Group for Capability 1 and 2. We estimate 
the C1 acquisition cost (RDT&E, Procurement, MILCON) in then year 
dollars to be between $9 billion and $11 billion, depending on the 
architecture chosen. Likewise, the C2 acquisition costs are between $14 
billion and $15.5 billion.
    These reflect government cost projections, which will be updated 
once the LSI contractor has been selected and his proposed architecture 
has been costed.
    Question. BMDO is scheduled to award a multi-billion dollar 
contract for a Lead System Integrator very soon. What is the importance 
of having a Lead System Integrator? What is the benefit to the 
government of having a contractor versus a Service manage this program.
    Answer. There are several objectives for the LSI contractor. First, 
the LSI contractor serves as a ``prime-like'' contractor for the 
overall system being developed. As such, the LSI will be held 
accountable for the effective operation of the NMD system. The LSI 
contractor must ensure that the various elements operate together as a 
single system in an effective manner. This requires that performance 
trades be made between elements and that interface specifications be 
properly defined. Second, the LSI contractor will be responsible for 
developing those system components not currently under development on 
some other contract. Third, the LSI contractor will integrate the 
overall system to allow the elements to function together and to 
demonstrate the system in integrated testing. Finally, the LSI 
contractor will prepare the necessary plans to allow the rapid fielding 
of the system if a decision to do so is made. Experience has shown that 
these tasks are most efficiently and effectively performed by a prime 
contractor rather than the government. There are several benefits to 
the government of having an LSI contractor instead of a Service 
managing NMD. Industry will be able to provide the best and most 
innovative ideas needed for the development and possible deployment of 
NMD. The use of an LSI contractor will also shift the burden of system 
performance, coast and schedule outside of government, an essential 
requirement given the limitation on manpower and therefore oversight.
    Question. There has been some debate over whether or it is possible 
to design a National Missile Defense system that is Treaty Compliant 
and yet is capable of defending all 50 states. What is your view?
    Answer. To defend all the territory of all 50 states from a threat 
from any point of origin has been analyzed extensively over the past 
two years. The current ``treaty complaint'' site does NOT provide the 
high protection required for all the territory of all the 50 states.
    All development activities will comply fully with the ABM treaty. 
However, the program has been designed with a flexible ``plug and 
defend'' architecture to allow deployment at a site after the threat is 
identified. This deployment may comply with the treaty, or require 
modifications of the ABM treaty.

                    NMD Schedule and Technical Risks

    Question. The General Accounting Office (GAO) issued a report in 
December that provided an initial assessment of the technical and 
schedule risks associated with the National Missile Defense (NMD) 
program. The report concluded that: DOD faces significant challenges in 
the NMD program because of high schedule and technical risks. Schedule 
risk is high because the schedule requires a large number of activities 
to be completed in a relatively short amount of time... Technical risks 
are high because the compressed development schedule only allows 
limited testing.
    The report also stated that the acquisition strategy calls for 
conducting only one system test prior to the deployment decision and 
one system test of the ground-based interceptor before production. GAO 
further concluded that: ``If subsequent test reveal problems, costly 
redesign or modification of a already produced hardware may be 
required.''
    General Lyles, the GAO recently issued a report that said that the 
NMD acquisition strategy had high schedule and technical risks. With 
regard to schedule, the GAO said that plan is high risk because it 
``requires a large number of activities to be completed in a relatively 
short amount of time.'' Do you feel that the NMD program is unduly 
risky with regard to schedule? Do you think that the challenges with 
regard to schedule can be overcome? What will be required to overcome 
these challenges?
    Answer. We have always maintained that the NMD ``3+3'' program is a 
high schedule and technical risk program. With the additional funds 
provided, we have tried to reduce risk by adding additional spares and 
test articles, additional ground tests, simulations and, if a 
deployment decision is made, additional flight tests.
    The delay in standing up the Joint Program Office and selecting a 
Lead System Integrator have added to the already tight schedule. The 
selection of the Lead System Integrator will help us more clearly 
understand the ability to meet the schedule we have laid out.
    Question. The GAO's report said that the NMD acquisition strategy 
had high schedule and technical risks. With regard to technical risks, 
the GAO said that plan is high risk because the ``compressed 
development schedule only allows limited testing.'' Do you feel that 
the NMD program is unduly risky with regard to technical matters? Do 
you believe that the technical challenges can be overcome? What will be 
required to overcome these challenges?
    Answer. Schedule risk is high, but we believe the technology is 
within our grasp and builds upon years of development efforts from the 
legacy of the technology readiness program. Our biggest concern is two-
fold: having enough data to make an intelligent deployment decision in 
fiscal year 2000, if necessary; and the compressed schedule in the 3 
years of deployment and continued development, if told to do so. The 
program is high risk, but the risk is mitigated through the addition of 
spares, additional ground tests, simulation and modeling, and 
additional flight tests if a deployment decision is made.
    Question. GAO also stated that: ``additional funding will not 
reduce the high schedule risk inherent in the program.'' Do you agree 
with this conclusion that additional funding will not reduce the high 
risk in the program?
    Answer. We are currently able to fund the efforts that are required 
to support the 3+3 program through the Deployment Readiness Review 
(DRR) in fiscal year 2000. If we have problems in any area of our 
program, we may have to make suitable adjustments, and could face the 
situation where there is insufficient time to recover from a problem 
and still meet the program milestones. At this time, I cannot identify 
fiscal year 2000 specific areas where we would apply additional funds. 
The short schedule we've embarked upon will continue to be a challenge.
    Question. General Lyles, in your view what are the toughest 
challenges in National Missile Defense program? What issues present the 
greatest risk?
    Answer. The most challenging specific system risks facing the NMD 
program are (1) test and evaluation, (2) discrimination of targets and 
kill assessments, (3) the aggressive program schedule before the 
deployment readiness review, and (4) system siting/site activation 
actions required after a decision to deploy the NMD system.

                          Advanced Technology

    Question. The technology budget is reduced by 40% from the 1998 
appropriation of $425 million to $254 million. (This is due to 
congressional adds and the program transition from research to 
acquisition.) The advanced technology budget provides funding for the 
development of next generation missile defense systems. This portion of 
the budget funds two primary advanced systems: the Atmospheric 
Interceptor Technology (AIT) ($24.5 million) and the Space Based Laser 
(SBL) ($58.8 million). In addition to the funding for SBL in this 
budget, the Air Force budget also includes $35 million.
    In the fall of 1997, the services' missile defense chiefs 
recommended terminating the AIT program. The program was revived by the 
Office of the Secretary of Defense and requirements were changed. The 
objective of the new program will be to produce a lightweight 
interceptor that will improve the capability to intercept missiles at 
high and low altitudes.
    The Spaced Based Laser program is continuing to conduct advanced 
technology experiments and is investigating the development of a Space 
Based Laser Readiness Demonstrator (SBLRD)--an integrated system. The 
budget does not support the deployment of such a system. This would 
require the investment of about $2 billion in additional funding. 
However, the budget does fund the continued investigation of these 
advanced technologies.
    General Lyles, the Atmospheric Interceptor Technology (AIT) program 
has experienced considerable turmoil over the past several years and it 
looked as if it were going to be canceled. What is the status of this 
program?
    Answer. AIT is a very important element of our advanced technology 
program. During late summer 1997, BMDO initiated development of new 
requirements for the AIT program to ensure AIT is developing and 
demonstrating atmospheric interceptor technologies more closely related 
to some of BMDO's major acquisition programs. This requirements 
development process, guided by the BMDO Chief Architect and fueled by 
BMDO's new technology master planning process, focused AIT to 
capitalize on technology insertion opportunities. This will enable pre-
planned product improvements (P3I) and upgrades of BMDO's lower tier 
(atmospheric) missile defense interceptors and additional missile 
defense capabilities. BMDO also established a stakeholders' oversight 
group (AIT Oversight IPT) which includes tri-service representation to 
aid in developing the requirements and then to monitor execution of the 
AIT program. Along with the new requirements, BMDO approved a revised 
acquisition strategy for AIT, which calls for the competitive selection 
and contract award of an interceptor testbed contractor in 3Q fiscal 
year 98.
    Question. What will the objectives of the new program be?
    Answer. The objectives of the AIT program are to develop, 
integrate, and demonstrate critical technologies for performing 
hypervelocity hit-to-kill intercept of theater ballistic missiles 
within the atmosphere. The program will provide atmospheric interceptor 
components and subsystems for potential Pre-Planned Product Improvement 
upgrades for current and future BMD systems.
    Question. How do you expect to improve our current capability to 
intercept missiles?
    Answer. The AIT program expects to improve our current capability 
to intercept missiles by providing interceptor technologies that yield 
improved performance and reduced cost. For example, strapdown infra-red 
seekers developed within the AIT program will have significantly 
reduced parts counts over gimbaled designs. As a result, these seekers 
will not only be less costly, but will also be more reliable. The 
technologies being developed will provide: (1) new capabilities with 
reduced costs/risks compared to current interceptor weapons systems and 
enhancements to other interceptors under development; (2) reduction of 
technical risks and costs in support of acquisition programs through 
direct technology insertions; and (3) technical solutions to provide 
theater defense interceptor capabilities for contingencies not 
currently addressed by the TMD system programs.
    Question. Do you expect to produce a whole new missile? Or, do you 
expect to simply improve components of the existing systems?
    Answer. The focus of the AIT program is on developing component and 
subsystem technologies, not a whole new missile. However, in order to 
demonstrate these technologies and their interactions in an interceptor 
system context, the program has options to integrate selected 
components and subsystems into interceptor test beds for ground and 
flight test purposes. Since AIT is a technology development program 
rather than a system acquisition program, these potential test beds 
would be designed and fabricated solely to demonstrate the technology 
components. They would not be qualified for immediate use in planned 
operational systems. The program will be structured such that the 
components and subsystems being developed could be inserted into 
various system programs as needed at any stage of development when the 
required technology maturity has been demonstrated.

                           Space Based Laser

    Question. The BMDO budget includes $58.8 million for the Space 
Based Laser. In addition, the Air Force budget includes $35 million for 
this program. What are the objectives of The SBL program?
    Answer. The Air Force, as executing agent, has recently contracted 
with Lockheed Martin Astronautics, Denver, Colorado and TRW, Space and 
Laser Programs Division, Redondo Beach, California to perform Concept 
Definition Studies for the SBL Readiness Demonstrator (SBLRD). They are 
investigating three program alternatives for the design and development 
of an integrated laser demonstration vehicle to be tested in space. 
These are (1) a vehicle to be flown in the 2005/2006 timeframe which 
incorporates existing low risk component technology; (2) a launch in 
the 2008 time frame given the same constraints regarding technology; 
and (3) a launch in the 2008 time frame where more advanced technology 
may be inserted to increase technical legacy to a potential operational 
system.
    The objective of the fiscal year 99 SBL program is to continue the 
development of the Space Based Laser Readiness Demonstrator (SBLRD) 
vehicle design that will be initiated following the completion of the 
6-month Concept Definition Studies. The fiscal year 99 program also 
includes continuing critical component technologies and subsystem 
concepts (i.e., Acquisition, Tracking, Pointing, Fire Control) that 
directly support the technical feasibility of a future space-based 
laser type missile defense system.
    Question. What is the distinction between the activities being 
conducted under the auspices of your office and those activities being 
conducted by the Air Force?
    Answer. In 1997, we assigned to the Air Force as executing agent 
responsibilities for the SBL program. This is consistent with other 
BMDO programs (THAAD, PAC-3, Navy Area, Navy Theater Wide) which are 
executed by the Army and Navy. Consistent across all these programs is 
BMDO's responsibility to provide oversight of the activities being 
conducted by the executing agents/Services. We are responsible for the 
overall NMDD and TMD architectures in response to the current and 
emerging threats and interoperability requirements of the Family of 
Systems.
    Question. Do you actually plan to build and deploy a satellite? 
What is the current plan? What is a ``Readiness Demonstrator''? Will 
that system have operational capability?
    Answer. The SBL effort is a planned, joint BMDO and Air Force 
advanced research effort to explore the technical feasibility of a 
future spacebased laser type missile defense system. Hardware concepts 
for a space test vehicle, called a Readiness Demonstrator, are 
currently being studied by two contractor teams. Thus, the SBLRD would 
be a proof-of-concept experimental satellite, not a prototype for 
operational system testing. Current concepts for this subscale 
demonstrator vehicle ahve inherent and designed-in limitations that 
would prevent it from possessing an operational capability.
    Question. What are the implications for continued development of 
the SBL with respect to the ABM Treaty?
    Answer. The SBLRD effort is a advanced research effort to explore 
the technical feasibility of a future space-based laser type missile 
defense system. The ABM Treaty was specifically negotiated not to 
prohibit such advanced research. The hardware that may be developed 
would be a proof-of-concept experimental platform, not a prototype for 
operational system testing. Current concepts for this demonstrator 
vehicle have inherent and designed-in limitations that would prevent it 
from possessing an operational capability. Zenith Star, a similar 
concept vehicle, was reviewed by the DoD Compliance Review Group (CRG) 
in the late 1980s and found compliant, but it was never built. The 
SBLRD concept, once arrived at, would go through a similar review. 
Before the U.S. could pursue an SBL system, the Administration and 
Congress would need to address implications for the ABM Treaty.
    We will continue with the SBL program as planned. The Helsinki 
agreement does not affect our plans for that program. Our research for 
SBL falls short of any development, testing, and deployment that might 
violate either the Second Agreed Statement, which was signed on 
September 26, 1997, or the ABM Treaty.

                  Anti-Ballistic Missile (ABM) Treaty

    Question. At the Helsinki summit in March 1997, President Clinton 
and President Yeltsin reaffirmed their commitment to the ABM treaty. 
They issued a Joint Statement and agreed not to deploy Theater 
Ballistic Missile (TBM) systems that pose a threat to the strategic 
nuclear force of the other side or to test TBM systems against 
strategic targets.
    General Lyles, which BMD systems have been judged to be ABM Treaty 
compliant?
    Answer. All of BMDO's core TMD programs have been determined to be 
ABM Treaty compliant. These include PATRIOT PAC-3, THAAD, Navy Area 
with Cooperative Engagement Capability, and Navy Theater Wide.
    Our NMD development program is designed to be compliance with the 
ABM Treaty, but as the Secretary of Defense has noted, deployment of 
NMD may require changes to the treaty. This would depend upon the 
architecture selected to address a specific threat.
    Question. What about the Airborne Laser? Has the Treaty Compliance 
Review group assessed that system?
    Answer. The ABM is not yet sufficiently mature for a compliance 
review. When the program is sufficiently mature, the Air Force will 
present the program to the DoD Compliance Review Group for a compliance 
determination.
    Question. How does the Helsinki Joint Statement of President 
Clinton and President Yeltsin affect the core BMD programs?
    Answer. The Joint Statement will have no effect on our current core 
programs. Upon entry into force of the First Agreed Statement, which 
was signed on September 26, 1997, PATRIOT, THAAD, and Navy Area will be 
deemed compliant with the ABM Treaty regardless of their 
configurations. The Second Agreed Statement, which was also signed on 
September 26, 1997, will not affect the U.S. Government's ability to 
make unilateral ABM Treaty compliance determinations in the future for 
the Navy Theater-Wide system.
    Question. What is the status of the demarcation agreement? Have the 
U.S. and Russian negotiators concluded an agreement?
    Answer. A demarcation agreement has been concluded, although it 
will be submitted to the Senate for advice and consent before it enters 
into force. The agreement has two parts. Part 1 provides that TMD 
systems with interceptor missiles having velocities of 3 km/sec or less 
are compliant with the ABM Treaty, provided they are not tested against 
ballistic target missiles with velocities greater than 5 km/sec or 
ranges greater than 3,500 km. Thus, as long as these parameters are not 
exceeded, lower-velocity TMD systems--PATRIOT, THAAD, and Navy Area--
will no longer require time-consuming national compliance 
determinations, even when the configurations of these systems change. 
Part II of the Agreement will not affect the U.S. Government's ability 
to make unilateral ABM treaty compliance determinations in the future.
    Question. Under the demarcation agreement would the Navy Upper Tier 
program pose a problem?
    Answer. The Second Agreed Statement, which was signed in September 
1997, addresses higher velocity TMD systems, i.e., systems with 
interceptors whose velocity exceeds 3 km/sec. NTW, which is expected to 
have an interceptor exceeding 3 km/sec, would be covered by the 
provisions of the Second Agreed Statement after its ratification and 
entry into force. The Second Agreed Statement contains restrictions 
against test TMD systems or their components against ballistic target 
missiles with a velocity greater than 5 km/sec or a range greater than 
3,500 km, this Agreed Statement would not constrain our planned NTW 
program. The determination of ABM Treaty compliance of higher-velocity 
TMD systems remains the national responsibility. NTW, as currently 
planned, has already been certified to be complaint.
    Question. Have the BMD programs been deliberately limited to 
``dumbed down'' in order to accommodate the Helsinki agreement? Are the 
designs of our TBM systems being determined by the threat, by 
requirements or by the arms control negotiators?
    Answer. None of BMDO's programs have been deliberately limited or 
``dumbed down'' in order to accommodate the Helsinki agreement. BMDO's 
TMD systems designs are determined by the threat which, in turn, 
determines requirements.
    Question. Does this agreement limit the advanced technology 
program?
    Answer. Neither the ABM Treaty nor the demarcation agreements place 
limitations on advanced technology research. BMDO's advanced technology 
program will remain unaffected by the demarcation agreements.
    Question. The agreement specifically prohibits the development, 
test or deployment of space-based interceptor missiles or ``components 
based on other physical principles.'' General Lyles, this agreement 
seems to require that the Space-Based Laser program be terminated. What 
is your understanding as to how this agreement affects SBL?
    Answer. We will continue with the SBL program as planned. The 
Helsinki agreement does not affect our plans for that program because 
our research for SBL falls short of any development, testing, and 
deployment that might violate either the proposed Part II Agreement or 
the ABM Treaty.
    Question. Are there provisions for initiating discussions with the 
Russians should higher velocity systems and future capabilities be 
required due to the threat?
    Answer. Yes. Article XIII of the ABM Treaty provides for the 
establishment of a Standing Consultative Commission (SCC) to ``consider 
questions concerning compliance with the obligations assumed, . . . and 
proposals for further measures aimed at limiting strategic arms.'' 
Discussions pertaining to higher velocity systems were initiated during 
negotiations of Part II of the demarcation agreement, the purpose of 
which was to discuss higher velocity systems. As additional 
capabilities are pursued, the SCC may provide a forum in which to 
discuss them.
    Question. The demarcation discussions included a Phase I (for lower 
velocity systems) and Phase II (for higher velocity systems, e.g. Navy 
Upper Tier). Have the Russians agreed to discuss higher velocity 
systems?
    Answer. Yes, the Russians were participants in Phase II of the 
demarcation negotiations. The purpose was specifically to discuss 
higher velocity systems.
    Question. In the absence of a Phase II agreement, will compliance 
determinations still remain a ``national responsibility?'' In other 
words, will it still be up to the U.S. to decide whether a TBM system 
is compliant?
    Answer. Yes. Regardless of whether the U.S. ratifies the Second 
Agreed Statement, compliance determinations will continue to be a 
national responsibility.
    Question. If we are capable of deciding what is compliant on our 
own now, what is the need for the demarcation agreement? What do we 
gain by signing this agreement? Doesn't the agreement just tie our 
hands in terms of future TBMD systems?
    Answer. The demarcation agreement is part of the Administration's 
effort to evolve the cooperative, non-threatening, strategic 
relationship between the U.S. and Russia. It is intended to provide a 
legal and political basis for the Russian Duma to ratify the START II 
treaty which will significantly reduce the strategic nuclear 
inventories of the two parties to that agreement. Regarding the impact 
of the Helsinki Agreement on future TMD systems, it does not affect any 
aspect of TMD systems that are currently planned for future deployment.

                            Iran Missile Act

    Question. In response to the recent news that Iraq is developing a 
medium range ballistic missile capable of hitting Saudi Arabia and 
Israel, Representative Weldon has proposed legislation that would 
authorize an additional $147 million in 1998 funds for missile defense 
programs. The legislation would add funds to enhance our capability to 
deal with the emerging Iranian missile threat.
    Specifically, the bill would: add $35 million to integrate the 
Patriot, Aegis and the Ground Based Radar; add $15 million to 
accelerate the Patriot Remote Launch capability to double the defended 
area of the PAC-3; add $40 million for additional tests of the PAC-3 
and Navy Area system to consider how well they will perform against a 
longer range missile; add $6 million for enhanced early warning 
sensors; add $41 million for PAC-3 production enhancements to expand 
the ability to produce more missiles in a faster time period; and add 
$10 for the Arrow missile program to accelerate interoperability 
between Arrow and U.S. systems.
    The Administration responded to the Weldon legislation with a $100 
million proposal that would fund similar enhancements but exclude the 
$6 million for early warning and $41 million for production 
enhancements. In lieu of the $10 million for Arrow interoperability, 
the Administration proposal would invest in efforts to help detect, 
identify and destroy tactical ballistic missile launchers, missiles and 
related infrastructure on the ground.
    General Lyles, Representative Weldon has proposed legislation that 
would authorize the appropriation of an additional $147 million for 
1998. Are you familiar with the legislation? What does the proposal 
include?
    Answer. Yes, I am very familiar with the proposed legislation which 
was offered as an amendment to H.R. 2786 by Mr. Weldon, jointly with 
Mr. Pickett and Mr. Spratt. In fact, the issue of the Iranian ballistic 
missile threat, which this proposed legislation addresses, is of 
considerable importance to the Department. Since the original bill was 
introduced in October 1997, I have spent a considerable amount of time 
developing options for near-term responses to this emerging threat and 
coordinating these options within the Department. I have also held 
numerous discussions with House National Security Committee bipartisan 
staff and testified before this committee on BMDO programs and options 
to address this threat.
    I am pleased to note that the proposed legislation includes many of 
the options which have been proposed by the Department. Specific 
proposals made by the Department which have been included in the 
proposed legislation are:
     $35.0 million for the Joint Composite Tracking Network 
which will link sensors from various platforms to allow earlier, more 
accurate cueing of TMD missiles. The Department requested this funding 
for improved integration of PATRIOT, AEGIS and the Ground-based Radar 
(GBR).
     $15 million to accelerate completion of the PAC-3 remote 
launch capability which focuses on improving communication at the fire 
unit level. Additionally, this capability will allow PAC-3 missiles to 
be emplaced up to 30 Km from the radar, thereby doubling the defended 
area. The remote launch capability had slipped to fiscal year 00 due to 
program cuts. This funding will restore the operational capability to 
fiscal year 99.
     $40 million for PAC-3 and Navy Area Demonstrations. These 
funds allow for additional live fire testing of PAC-3 and Navy Area 
interceptors against the longer-range posed by Iranian medium range 
ballistic missiles (MRBMs). This funding provides for one test of each 
of these lower-tier systems against the more demanding threat.
    The proposed legislation also provides additional funds for three 
other programs that were not specifically requested by the Department. 
The impacts of these funding increases must be studied in greater 
detail. These three additional funding proposals are:
     $6 million for enhanced early warning to support 
integration of various elements of SHIELD.
     $41 million for production rate enhancements of PAC-3 to 
support an increased rate of production during initial low rate 
production to provide a hedge if Iranian and other missiles threats are 
deployed more rapidly and in larger numbers than currently anticipated.
     $10 million for the Israeli Arrow TMD system to improve 
interoperability between Arrow and U.S. TMD systems.
    Question. Under Mr. Weldon's proposal, which missile defense 
systems would receive funds? Do you agree with that choice?
    Answer. The draft legislation proposes to authorize additional 
funding for the Joint Composite Tracking Network, PATRIOT remote launch 
capability, PATRIOT Advanced Capability-3 and Navy Area Theater 
Ballistic Missile Defense System testing, enhancement to our early 
warning system, and the Arrow Weapon System interoperability. I am in 
full agreement with the intent of this proposed legislation to 
accelerate DoD's ability to counter enhanced ballistic missile threats.
    The proposed legislation contains many of the options proposed by 
the Department to fund PATRIOT/AEGIS/GBR integration through the Joint 
Composite Tracking Network, the PATRIOT remote launch capability and to 
support PAC-3 and Navy Area Demonstrations. The proposal also provides 
addition funding for PAC-3 production rate enhancements and for 
improved interoperability for Arrow. While improved interoperability 
with Arrow is an important priority, it is not yet clear that 
increasing the production rate for PAC-3 will provide any significant 
capability against the Iranian medium range ballistic missile threat. 
At the same time, the proposed legislation provides funds for SHIELD 
integration, apparently as an option for attack operations. In its 
proposal, the Department proposed that no specific option for enhancing 
attack operations be identified at this point. Numerous options are 
currently under review within the Department; SHIELD is one of those 
options. However, until the Joint Theater Air and Missile Defense 
Organization can properly analyze all options, it is premature to 
legislate any one option.
    Question. Does the Administration have an alternative proposal? 
Under the Administration's proposal, which missile defense systems 
would receive funds?
    Answer. We do not have an alternative proposal.
    Question. What would be achieved by increasing spending to 
integrate the PATRIOT, AEGIS and Ground Based Radar? Is this feasible? 
What sort of improvement could we realistically expect from the 
investment of $35 million?
    Answer. The $35 million for PATRIOT/AEGIS/GBR integration would be 
spent to demonstrate Over The Horizon PATRIOT engagement of a TBM using 
Cooperative Engagement Capability (CEC). In addition, this option would 
enhance the interoperability and performance of all three systems. The 
demonstration program would also create contingency assets which could 
be used in the near-term. This funding would also be used to accelerate 
the validation of THAAD GBR and AEGIS SPY-1b radar integration.
    Question. What would be achieved by increasing spending to 
accelerate a remote launch capability for PAC-3? Is this feasible? What 
sort of improvement could we realistically expect from the investment 
of $15 million?
    Answer. The Remote Launch/Communication Enhancement Upgrade (RL/
CEU) effort focuses on improving communication at the fire until level 
through the introduction of new switching equipment and a 
communications processor in conjunction with a conversion to Band IV 
UHF throughout the battalion. This funding allows the fielding of a 
remote launcher ``farm'' up to 30 Km from the parent fire unit and 
doubles the defended area forward of each radar. RL/CEU is required to 
meet PAC-3 requirements for increased battlespace, lethality, and rate 
of fire. Additional modifications will satisfy requirement documents in 
the U.S. Army for interoperability and communication with other Theater 
Missile Defense systems.
    Question. What would be achieved by increasing spending to provide 
two additional tests for the lower tier systems, PAC-3 and Navy Lower 
Tier? Is this realistic? What sort of improvement could we 
realistically expect from the investment of $40 million?
    Answer. These funds would allow for additional live fire testing of 
PAC-3 and Navy Area interceptors to demonstrate inherent capability 
against the longer range threats. Testing could be carried out in 
fiscal year 00 in two flight tests involving 2 PAC-3 missiles, 2 SM-2 
Blk IVA missile, and associated targets. These systems are designed to 
counter shorter-range threats. Therefore, these flights are not 
currently planned in either the Navy Area or PAC-3 programs. However, 
these flight tests would verify missile capabilities against the 
emerging threat.
    Question. What would be achieved by increasing spending for early 
warning sensors? What sort of improvement could we realistically expect 
from the investment of $6 million?
    Answer. The SHIELD-developed CENTCOM Integrated Surveillance System 
(CISS) is designed to provide layered, assured warning for theater 
missile threats. The system integrates both passive and active sensors 
to include multiple Defense Support Program (DSP) satellite and in-
theater radar data. Accurate cueing to other in-theater sensors 
(JSTARS, AWACs, radars, etc.) is part of this concept. The SHIELD 
facility at Falcon Air Force Base has been applying the CISS concept 
for two years during National Missile Defense and Theater Missile 
Defense Tests. This architecture consists of networking terrestrial 
radars to a radar fusion processor where the various radar data are 
fused. The resulting data are then fused with Infrared (IR) data. The 
current architecture consists of separate processors for radar and IR 
sensor fusion. This will be replaced with a single processor as part of 
the CISS effort. The CISS network will be established using existing 
communications paths where available and supplemented with UHF and S-
Band communications when needed. The initial CISS will have a fusion 
processor located at a command and control facility or a Theater Event 
System (TES) element if available. TES is made up of ALERT, JTAGS and 
TACDAR.
    SHIELD-developed software could allow the CISS processor to 
initiate a track before the required minimum DSP track criteria is met 
to reduce launch point ellipses by 50%. The CISS processor could also 
use post boost radar data to reduce impact ellipses. CISS will ensure 
warning with improved launch point, state vectors, and impact point 
predictions to enhance Attack Operations, Active Defense and Passive 
Defense.
    This option is one of several potential options that the Department 
is considering to enhance early warning for attack operations.
    Question. What would be achieved by increasing spending to enhance 
production of the PAC-3 missile? Is this reasonable? What sort of 
improvement could we realistically expect from the investment of $41 
million?
    Answer. This increase in funding supports both a more robust 
production rate during Low Rate Initial Production (LRIP) and a more 
robust PAC-3 missile production line for Full Rate Production (FRP). At 
the time this question was initially answered, the planned Lot 1 
procurement quantities were 48 missiles. However, recent program cost 
overruns have caused the Department to request the conversion of fiscal 
year 98-00 procurement funds to RDT&E funds. This reduction in 
procurement funds decreases total missile quantities and decreased the 
fiscal year 98 quantity to 20 missiles. $16 million of the $41 million 
investment in fiscal year 98 restores missile procurement in fiscal 
year 98.
    The remaining $25 million adds special tooling and test equipment 
to the PAC-3 production line to produce up to 30 missiles per month. 
During FRP, the PAC-3 production line is required to support a 20 
missile per month production rate to sustain the projected deployment 
schedule.
    Enhancing PAC-3 production was not part of the proposal submitted 
by the Department of Defense because it is not clear, until completion 
of testing, that it would provide additional capability for the 
specific threats of concern.
    Question. What would be achieved by increasing spending for 
interoperability for the Arrow weapon system and U.S. weapon systems? 
Is this feasible? What sort of improvement could we realistically 
expect from the investment of $10 million?
    Answer. The efforts associated with making the Arrow Weapon System 
and U.S. systems ``hardware'' interoperable involve development of 
several new pieces of equipment, which would permit the sharing of 
tactical data. This is an ongoing part of the Arrow Deployability 
Program. Increased spending would contribute to interoperability 
testing using distributed interactive simulation, and the development 
of combined Concepts of Operations to allow U.S. and Israeli missile 
defense systems to operate cohesively in a contingency operation.
    Based upon the language in the proposed legislation, it is not 
clear what is intended. However, increased interoperability with U.S. 
forces would enhance and supplement Arrow performance.
    Question. In lieu of the $10 million for Arrow interoperability, 
the Administration proposal would invest in efforts to help detect, 
identify and destroy tactical ballistic missile launchers, missiles and 
related infrastructure on the ground. What specifically is the 
Administration's proposal regarding attack operations?
    Answer. Attack Operations apply to operations initiated to destroy, 
disrupt, or neutralize ballistic and cruise missile launch platforms 
and their supporting command, control, and communications (C3); 
logistic structures; and reconnaissance, surveillance, and target 
acquisition (RSTA) platforms.
    The Department is developing an integrated investment strategy for 
attack. The strategy first proposes investment in non-material 
solutions, such as the development and implementation of joint Tactics, 
Techniques, and Procedures, which are also low cost, low risk 
investments with the potential to yield considerable near-term 
improvements in attack operations effectiveness. Secondarily, 
investment is recommended in technologies that enhance the capabilities 
receiving the highest investment priorities.
    Investment in technology programs that support the above activities 
would allow use in the field at targeted exercises, allowing the ``user 
pull'' (user needs drive development rather than the developers' 
perception of user needs) for development of technologies and systems 
that show the most utility.
    It is not a question of pursuing attack operations in lieu of Arrow 
interoperability. The Department of Defense submitted a proposal for 
$10 million in fiscal year 98 to study specific threats and to look at 
opportunities to invest in some short term attack operations capability 
improvements which may have high payback potential. Initial analysis 
shows that a credible approach to deal with the medium range ballistic 
missiles (MRBM) threat lies in the attack operations arena. However, 
until the Joint Theater Air and Missile Defense analytical process 
completes its investment strategy and investigations, it is premature 
to specify options at this time.

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

                        National Missile Defense

    Question. Two Booster missile options have been considered for NMD. 
Please describe the tradeoffs associated with selecting either disarmed 
Minuteman missiles or a commercial rocket as well as the cost estimates 
for both options.
    Answer. During the last year we have studied the issue extensively. 
The best data we have shows that there is no discernible cost advantage 
to a Minuteman III booster versus a commercial off the shelf booster 
over a twenty year life cycle. There are treaty issues concerning the 
use of Minuteman III which are currently being addressed by the 
Department. The current NMD acquisition strategy calls for the 
Department to select the appropriate booster no later than 90 days 
after award of the Lead System Integrator contract.

                          Arrow Missile System

    Question. The U.S. had agreed to spend $48 million over 4 years for 
interoperability testing of the Arrow system with Israel. Would this 
testing make Arrow more effective? Does the Department of Defense 
anticipate budgeting for this testing in the future?
    Answer. The U.S. $48 million commitment over 4-years for enhancing 
the Arrow Deployability Program (ADP) is provided for the purposes of 
enhancing the User Operational Evaluation System (UOES) contingency 
capability in all elements of the Arrow Weapons System, developing 
U.S./Israeli weapon system interoperability, and testing that 
interoperability with a thorough test regime. Interoperability will 
allow Israeli missile defense capabilities to be fully tested and 
integrated with U.S. TMD systems. Operationally, this will enable a 
U.S./Israeli combined theater capability within U.S. European Command's 
(USEUCOM) command and control architecture. Technically, 
interoperability will allow the Arrow Weapon System rapid access to 
missile track data to support early intercept engagement opportunities. 
This translates into increased Arrow battlespace, making it a much more 
effective system.

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

                      Airborne Laser (ABL) Program


    Question. General, have you priorities for the Airborne Laser 
program changed since last year? If so, why?
    Answer. No, my priorities are unchanged. I believe that in last 
year's testimony there was some miscommunication or misunderstanding of 
the committee's question and/or my response to the question.
    For the Theater Air and Missile Defense Family of Systems to be as 
effective as possible, we are building a multi-tier architecture that 
starts by engaging theater ballistic missiles prior to launch and 
continues engagement throughout a TBM's flight (boost, mid course and 
terminal). All tiers are required to provide effective negation of the 
TBM threat. This is accomplished by taking full advantage of the 
services' investments in attack operations, theater surveillance, and 
boost phase intercept as well as BMDO's investment in the upper and 
lower tiers. As a Department, we are building a robust TBM negation 
capability that will be fielded in the most expeditious manner within 
the available budget.
    Question. General, we understand that you support the Airborne 
Laser program. The issue is not of support, but of priority. If the Air 
Force was not funding the Airborne Laser program, and you had an amount 
of funding available to you in addition to your current budget, is the 
Airborne Laser of sufficient priority that you would fund it at the 
same pace as the Air Force, or would you fund something else like 
reducing the risk of your core programs or adding to you Advanced 
Technology programs?
    Answer. Deputy Secretary of Defense Hamre stated that the ABL 
program is best funded and managed by the Air Force and the President's 
fiscal year 99 budget Request identifies the Department's priorities 
and maintains the ABL program within the Air Force.
    As Director of the BMDO, I am responsible for developing and 
acquiring the best Theater Air and Missile Defense (TAMD) Family of 
Systems (FOS) architecture available for US and Allied Forces. TAMD is 
an urgent, near term U.S. defense priority that has been under 
development since 1991. Although a high priority must be placed on 
producing and fielding PATRIOT PAC-3, THAAD, Navy Area, and Navy 
Theater Wide programs, I strongly support funding the ABL, as does the 
Air Force. ABL is the Department's primary boost phase kill capability 
program.
    The ABL fits into the TAMD Family of Systems as it will provide the 
only planned boost-phase theater ballistic missile (TBM) killer in the 
FOS architecture. As you know, killing a TBM during the boost phase of 
its flight profile improves the chance of dropping the missile body and 
warhead within enemy territory. This early kill potential assumes great 
importance against weapons of mass destruction or sophisticated 
countermeasures such as advanced sub-munitions. As a rapidly deployable 
active defense asset, the ABL complements all planned upper and lower 
tier interceptor systems and would provide additional operational 
flexibility for limited interceptor inventories.
    Current priorities for the BMD program provide for allocating 
additional funding: first priority for MDAP risk reduction efforts; 
second priority to joint interoperability risk reduction issues with 
MDAP enhancements; and finally improvements to Advanced Technology 
programs. Depending on the quantity of funds provided, BMDO would 
seriously consider maintaining the Airborne Laser Program (ABL) at a 
modest level to ensure contractor team stability and continued level of 
efforts pending our ability to fit a more substantial program in our 
top line. BMDO funding could not provide for a more aggressive ABL 
program until PAC-3, Navy Area, THAAD and Navy Theater Wide are well 
into the production phase.
    Question. General, you discussed that interoperability between your 
systems will be a major focus for the coming years. Given that Airborne 
Laser is not managed by you, but by the Air Force, is there more risk 
that interoperability will suffer with respect to the Airborne Laser? 
What is being done to ensure the Airborne Laser is fully interoperable 
with the rest of the BMD architecture?
    Answer. No there is not an increased risk to interoperability. The 
Air Force has been interfacing with my organization since before the 
ABL Milestone I in Nov. 96. One of ABL's Key Performance Parameters 
(KPPs) is Link-16 Interoperability. Link-16 is the cornerstone of Joint 
Theater Air and Missile Defense Theater (JTAMD) communications.
    Interoperability is being analyzed within on-going JTAMD 
architecture studies. At a minimum, the JTAMD Family of Systems (FoS) 
architecture is expecting ABL to provide detailed information on all 
Theater Ballistic Missiles within view of its surveillance system. ABL 
could provide:
          a. quick and accurate launch point estimates to enhance the 
        attack operations layer of the architecture,
          b. TBM trajectory (position and velocity) data and impact 
        point predictions to enhance upper and lower tier system 
        engagement effectiveness,
          c. impact point predictions to theater commanders for passive 
        defense.
During the Roving Sands 97 exercise, ABL participated through 
simulation and demonstrated beneficial performance as the FoS boost 
phase interceptor and as a FoS theater-wide surveillance system. We 
anticipate ABL's continuing participation in CINC Exercises like Roving 
Sands, FoS Systems Integration Tests (SITs) and being integrated into 
the Theater Missile Defense System Exerciser (TMDSE) system.
    Question. The budget includes $230 million for continued RDT&E on 
the ABL. Although, this program does not fall under BMDO's 
jurisdiction, I appreciate the strong support that you continue to 
provide to this program. I believe ABL is a critical component of our 
TMD portfolio because it is currently the only TMD program in 
development with boost-phase capability.
    Can you give the Committee a general overview of how this program 
is going?
    Do you agree with the importance of having a system that can 
eliminate missiles in the boost-phase? Please share with the 
subcommittee the value of destroying a missile in the boost-phase?
    There are several unique technical challenges on the ABL program--
particularly on the tracking and beam control portions of the program. 
I have talked with the Boeing Co. and believe they are on the right 
path meeting these challenges. How do you assess the technical 
challenges associate with the ABL program?
    Answer. (Note: The fiscal year 1999 budget request for continued 
ABL RDT&E is $292 million, not $230 million) ABL is a well-managed 
program. It's on cost and on schedule. ABL has completed successful 
risk reduction efforts in the areas of turret aerodynamic design, laser 
exhaust, and optics fabrication. The program is on track for a 
successful Authority-to-Proceed #1 decision in June 1998. The 
flightweighted laser module will begin testing in April and there is 
every indication it will meet its test objectives. The Air Force has 
completed the collection of atmospheric turbulence data in Northeast 
Asia and Southwest Asia and the data to date validates ABL's turbulence 
design specification. ABL is progressing well towards it Preliminary 
Design Review in late April 1998, and there are no showstoppers in 
sight.
    Destorying enemy missiles in the boost phase is extremely important 
for several reasons to include:
    (1) it thins the threat midcourse and terminal defense systems 
face, enhancing their effectiveness;
    (2) it kills missiles before any early release of submunitions 
(ERS, a very significant challenge for interceptor defense systems);
    (3) it presents an enemy with the possibility that missile debris, 
including the warhead, may fall back on their territory (ABL serves as 
a viable deterrent to use of weapons of mass destruction).
    In addition to its role as a boost-phase ``shooter'', ABL will also 
possess significant sensing capability that will improve the 
performance of the other theater missile defense systems. ABL will 
provide quick and accurate missile launch point estimates which will 
cue attack operations assets. It will also pass on trajectory data and 
impact point predictions on ``leakers'', permitting midcourse and 
terminal systems to narrow their sensor search patterns and extending 
their range. In short, ABL fills a critical niche in the TAMD 
architecture.
    ABL's challenges are engineering in nature. Over twenty-five years 
of Air Force, DARPA, SDIO, and BMDO investments in high energy laser 
technology areas have solved the scientific problems associated with 
developing an ABL. What remains are the engineering issues of 
integrating a weapon laser and a sophisticated optical system on board 
an airplane. Such issues are the sort normally faced by acquisition 
programs in the Program Definition and Risk Reduction Phase and I 
believe the ABL program appears prudently structured to address them.

               Theater High Altitude Area Defense (THAAD)

    Question. THAAD as you know is the most mature of our upper tier 
system. I have always strongly supported this program but like many 
members on this subcommittee, I am very concerned over the fact that we 
have conducted four intercept attempts and had no successful 
intercepts. And, I understand that the fifth intercept test which had 
been scheduled for March, now has been delayed. While I recognize the 
importance of ensuring the next test is a success, this most recent 
delay does heighten the level of concern that a lot of us have with 
this system.
    What have you identified as the primary reason for the four 
intercept misses? Does the trouble stem from a broad range of technical 
glitches or is there simply one, identifiable issue that needs 
resolution?
    Why did the 5th intercept test have to be moved back? What is the 
current target date for this test?
    How much money has the schedule delays cost the program to this 
point?
    I understand that you have implemented a very substantial cost-
reduction program on the THAAD program that may also be carried over to 
other TMD systems. Please provide for the subcommittee, an overview of 
those cost-reduction measures.
    Answer. The independent review I chartered following the FT-07 
failure concluded that the THAAD fundamental system design is sound. 
The flight test failures to date have principally been caused by 
inadequate quality control and system engineering processes prior to 
flight. In each intercept attempt this deficiency has manifested itself 
in a flight anomaly associated with a different subcomponent (avionics 
software, stage separation mechanism, seeker, and DACS). These 
anomalies are summarized below.

------------------------------------------------------------------------
           Flight test                Root cause       Corrective action
------------------------------------------------------------------------
FT-04...........................  Faulty off-nominal  Revised software
                                   guidance,          Increased logic
                                   navigation, and     testing
                                   control logic.
                                  Corrupt radar data
FT-05...........................  Lanyard failure     Connector
                                   during stage        separation
                                   separation.         mechanism
                                  IAP reset due to     redesigned
                                   power interrupt
                                   prevented.
 
                          Subsequent Maneuvers
 
FT-06...........................  Dewar               Clean dewar design
                                   contamination       and process
                                   (smudge across      implemented
                                   adjacent traces
                                   caused
                                   electronics
                                   short).
FT-07...........................  DACS battery        Eliminate epoxy
                                   contamination       potting
                                   (epoxy potting).   Re-ATP DACS valve
                                                       assembly
                                                      Add DACS test
                                                       during assembly
                                                       at WSMR
------------------------------------------------------------------------

    As stated above, following the FT-07 failure, Lockheed Martin 
Missile Systems (LMMS) implemented recommendations from the government 
Project Office and an independent missile assessment team to improve 
our understanding of system reliability and reduce flight test risk. 
The recommendations included a complete reassessment of the acceptance 
test procedures and the environmental stress screening of the missile 
components. As a result of this process, LMMS increased the shock and 
vibration ground testing for several components to more thoroughly test 
the packages and increase confidence going into the mission.
    As LMMS discovers problems with previously delivered hardware that 
had not been subjected to the more stringent acceptance test 
procedures, they have been correcting the problems across the entire 
lot of hardware. The planning and implementation of this new testing, 
as well as the requirement to perform detailed pedigree reviews of each 
of the missile sub-components, has taken considerable time. This 
disciplined approach has, however, identified some discrepancies which 
may have gone undetected and which, potentially, could have contributed 
to another flight test failure.
    Recently, two problems were discovered as a result of this more 
rigorous ground test approach. The first of these problems involved a 
communications transponder (CT), a device used to receive and transmit 
mission critical in-flight information with the THAAD radar. The second 
problem involved firmware in the thurst vector control (TVC), a 
subassembly of the missile booster. The TVC firmware determines the 
steering commands to be executed during flight.
    While conducting the pre-flight ground testing in late December/
early January, LMMS discovered that the CT and TVC firmwave were out of 
tolerance and had to change out these components. In the case of the 
TVC, although LMMS was able to replace the FT08 booster with one that 
was already disassembled for re-testing (acceptance and environmental 
testing), they incurred a four week delay to assemble and retest the 
new package. The new test date is now projected for May 1998.
    As I have noted in a prior response, the schedule delay schedule 
caused an increase of ($808.9 million fiscal year 88C$/1.2786 billion 
(TY$)).
    As I've noted in a prior response, we have prepared a forthcoming 
report for Congress which provides an overview of the cost reduction 
work being performed on the THAAD program. To again briefly summarize, 
since last Fall, the Ballistic Missile Defense Organization (BMDO) and 
the Army have been working more closely with the contractor to control 
costs and identify areas where we can drive down total acquisition and 
life cycle costs. Through Integrated Product and Process Development 
(IPPD), the Government and the contractor are assessing for 
implementation a broad range of initiatives in the area of cost-
performance trades, alternative acquisition strategies, contract 
management, test and evaluation, and producibility enhancements. We are 
intensely working this effort and I'm optimistic that we will find 
areas where significant cost savings can be realized.

                 Patriot Advanced Capability-3 (PAC-3)

    Question. I have been a strong supporter of the PAC-3 enhancement 
program as have all the members of this subcommittee. I understand that 
the first two phases of the three phase enhancement program have been 
completed on all PAC-3 systems and that the third phase--integrating a 
hit-to-kill interceptor missile on the system--will be able to be 
deployable starting in 2000.
    Does the current PATRIOT configuration, with the first two phased 
upgrades now completed, provide our forward troops in the middle east 
with a TMD capability that meets the threat of potential missile 
launches by Iraq?
    I understand BMDO has planned a hit-to-kill intercept test for the 
PAC-3 missile in February but that test date has been delayed. What is 
the reason for the delay?
    You have budgeted a total of $480.5 million for the PAC-3 upgrade 
in this year's budget. If Congress were to provide money for this year 
beyond the budgeted amount, how would that money be used? Could a 
phase-3 PAC-3 system be deployed prior to the year 2000 target if 
additional funds were provided?
    Answer. The Configuration 2 upgrades currently in the hands of our 
soldiers provide a greatly improved capability over what we possessed 
during the Gulf War. The GEM missile provides improved lethality over 
the PAC-2 missile. Every GEM flight test met or exceeded expectations. 
The Configuration 2 improvements increase the battlespace defended by a 
PATRIOT firing unit by a factor of eight over its Gulf War counterpart. 
In addition, we are now capable of engaging longer range threats than 
we could in the Gulf War. These improvements are significant and we are 
confident that the PATRIOT configuration in the field today can defeat 
the current threats in the Middle East.
    We are now engaged in the key step in the development of the PAC-3 
missile, the integration of the flight seeker and its software into the 
missile. We must also complete the development of two hardware-in-the-
loop facilities which enable us to integrate and checkout the flight 
hardware and software. The combined integration efforts are a complex 
technical challenge that most likely will cause the currently planned 
third quarter flight test to move to the fourth quarter. To assure 
ourselves that we are not missing some technical problem, a government 
missile flight readiness review team has conducted an intensive review 
of the engineering development program with the contractor. This team 
has extensive experience with managing missile and software intensive 
development programs. Their conclusion is that the difficulties 
currently being encountered are not unusual for this kind of program. 
While progress is being made, it will probably require more time and 
resources than originally thought. We will continue with our event-
driven philosophy and not proceed with the first intercept mission, DT-
3, until these technical challenges are resolved, and the ground tests 
indicate we are ready. Based on the team's review we believe that, 
while not impossible, it is unlikely DT-3 will occur in the third 
quarter of this fiscal year. However, we are confident that DT-3 can 
occur in the fourth quarter.
    The Department provided a list of possible uses of additional funds 
to Congress in February 1998, in answer to a request from the HNSC. 
This list included three areas where additional funds could be used for 
PAC-3. These are: additional funds to demonstrate the ability of 
PATRIOT/AEGIS/Ground Based Radar to engage a remote TBM using CEC; 
demonstrate the ability of the PAC-3 against the longer range threat; 
and restore Remote Launch Communication Upgrades procurement 
quantities. In December 1997, the Department considered funding 
production line enhancements to increase the production rate for the 
PAC-3 missile, however, this effort was not included in the final 
response to the HNSC. The Department will address each of these 
requirements in the upcoming Future Years Defense Program (fiscal year 
DP) development cycle, depending on the results of the Congressional 
action on the fiscal year 1998 Emergency Supplemental Appropriation and 
the maturity of the PAC-3 program.

               Medium Extended Air Defense System (MEADS)

    Question. The MEADS program is the only mobile TMD system in 
development. This is something I know the Army feels very strongly 
about and I too have been a strong supporter of this program. The 
fiscal year 1999 budget includes $43 million for Project Definition and 
Validation. Our European MEADS partners, the Germans and Italians, are 
contributing 50% of the funding associated with this program.
    I understand that although this program was funded in fiscal year 
1998 and is funded this year by the United States and our European 
partners, that no money exits in the FYDP for MEADS beyond this year.
    Why is there no funding for MEADS beyond this year?
    What has the reaction of the Italians and Germans been to this 
seemingly lack of commitment on the part of US to the MEADS program?
    Do you agree that having a mobile TMD capability important?
    How much money would be required by the U.S. in fiscal year 2000 to 
keep the MEADS program on track?
    How much is it anticipated that the MEADS program cost the U.S. 
over the fiscal year DP?
    Answer. Due to the affordability considerations, a conscious 
decision was made not to address funding beyond fiscal year 99 until 
BMDO, Army and OSD had completed their analysis of alternatives. Once 
these studies are complete outyear funding will be addressed as a 
fiscal year 00-05 POM issue. The Department's decision will be 
reflected in the fiscal year 00 President's Budget Position.
    Failure to adequately fund MEADS indicates to our allies a lack of 
resolve on the part of the U.S. and jeopardizes any future cooperative 
ventures of this kind. Our allies may see us as an unreliable partner 
who cannot be trusted to see a project through to its conclusion.
    Operationally and tactically our forces will fight on less dense 
battlefieds, and over greater expanses of land with large gaps between 
friendly forces. Ground force commanders will incur risks as they 
construct forces in major unit assembly areas upon arrival to a theater 
of operations, or tactical assembly areas while preparing for 
operations. MEADS will play a key role in reducing these risks in 
future Army or Marine Corps operations.
    Both the Army and the Marine Corps have requirements for a system 
that provides defense of vital corps and division assets associated 
with their maneuver forces. This system must provide: (1) 360 degree 
defense against multiple and simultaneous attacks by short and medium 
range ballistic missiles, cruise missilesand other air breathing 
threats; (2) immediate deployment for early entry operations using C-
141; (3) transportability in its road march configuration as roll-on/
roll-off cargo in a C-130 or in standard amphibious landing craft; (4) 
mobility to move rapidly and protect the maneuver force during 
offensive operations.
    The requirements drive the system design to meet demands of the 
operational mission against the next generation threat with an 
appropriate mix of existing and next generation technology that will 
remain viable well into the 21st century. MEADS is the system that will 
satisfy these requirements.
    As stated previously, extensive studies have been carried out in an 
effort to streamline and reduce the costs of the MEADS program while 
satisfying the users requirements. Once an affordable approach has been 
selected, fiscal year 00 funding requirements will be established.
    Several alternatives are under consideration; U.S. cost share over 
the FYDP could vary widely.

                        National Missile Defense

    Question. I have been a strong supporter of the Administration's 
``3 plus 3'' plan on development and potential deployment of the NMD 
system. I understand that BMDO plans to award the Lead System 
Integration (LSI) contract for the NMD system this Spring. The 
contractor who wins this competition will research and test a missile 
defense capable of providing a ``limited shield'' against attack by a 
limited number of long-range missiles directed at U.S. territory. It 
will be the first step toward what could evolve into a 10-year, $10 
billion program designed to be deployed by 2003.
    I believe we ought to go forward with some type of NMD system if, 
in the year 2000, our intelligence reports suggests a clear threat 
exists. However, the TMD threat in my judgment is undeniable, immediate 
and serious. I worry that if, in the year 2000, a decision is made to 
deploy an NMD system, billions of dollars could be diverted from TMD 
accounts to finance an NMD system.
    Do you believe we currently have the right budgetary balance 
between NMD and TMD systems?
    If we decide to proceed with an NMD system in the year 2000, what 
would be the impact on the TMD budget. Would we be able to retain all 
the current TMD programs in development at their projected levels of 
funding?
    If in the year 2000, intelligence reports suggest that an NMD 
system is not needed, how much money would be required annually to 
maintain a hedge for deploying an NMD system in the future?
    Under the ``3 plus 3'' program, and NMD system would have to be 
deployed within three years of the time that a decision was made to go 
forward with production. The aggressive nature of such a schedule has 
been met with some skepticism by the defense community. A December GAO 
study raised strong doubts about this compressed time-frame. The report 
said that ``developing and deploying a national missile defense system 
in the time allotted under the three plus three program will be a 
significant challenge for DoD given its past history with other weapons 
systems''.
    Can you comment on the GAO report?
    Are you confident that an NMD system can be deployed in the time-
frame mandated under the ``3 plus 3'' plan.
    Answer. Yes. Sufficient NMD funds are programmed to comply with DoD 
guidance to provide for an informed deployment decision by fiscal year 
2000. With the exception of a modest technology program and normal 
management and support requirements, the balance of funds are allocated 
to the TMD programs which are somewhat resource-constrained. However, 
any shift of funds from NMD to TMD would undermine our ability to meet 
our NMD objectives for fiscal year 2000.
    If BMDO were directed in fiscal year 2000 to begin deploying a NMD 
system by fiscal year 2003, and to do so using currently-programmed 
BMDO funds, then approximately 75 percent of TMD funds for the next 
several years would have to be transferred to the NMD mission area. 
This would be catastrophic, and clearly would result in several core 
TMD program terminations as it would be wasteful and ineffective (and, 
perhaps, unfeasible) to stretch all program schedules by three to four 
years just to keep all programs alive. BMDO planning has always assumed 
that if a deployment decision were made, it would be the result of a 
rapidly emerging missile threat, and that it would be accompanied by 
the additional resources needed to acquire and deploy an NMD system.
    We are currently in the process of evaluating how much will be 
needed. As you are aware, the fiscal year 1999 request is for RDT&E to 
permit a deployment decision in fiscal year 2000. The exact amount that 
will be needed in that budget for the years beyond fiscal year 2000 is 
being derived as a part of the fiscal year 2000-2005 Future Years 
Defense Program and will be submitted next year as part of the fiscal 
year 2000 budget request.
    I concur with the Department letter attached to the GAO report.
    If the threat warrants a deployment and we continue the successful 
execution of the first three years, I am confident we can deploy a 
system by 2003. However, schedule risk remains high.

                          Arrow Missile System

    Question. I have always been a strong supporter of the Arrow 
program and am delighted with the technical success Arrow has enjoyed 
to this point. I understand that the Israeli government has approached 
the United States about the possibility of obligating somewhere around 
$107 million for a third Arrow battery to complement the two in 
existence in the northern and southern regions of the country.
    Where does this proposal stand at this point?
    Recognizing this is an open hearing, what can you tell the 
subcommittee about the current missile defense threat faced by Israel 
right now?
    How much value added would a third Arrow battery bring to Israel's 
missile defense capability?
    How much of the cost of the Arrow battery does proposed $170 
million cover?
    Answer. The Israeli Ministry of Defense presented a proposal for 
the third battery to the Department of Defense in January. The Ministry 
is seeking funding support for the additional Arrow battery in response 
to the emerging medium range ballistic missile threat in the region. 
The Israeli Defense Minister will be visiting the Department of Defense 
later this month at which time the third battery, as well as other 
Israeli defense issues, will be discussed.
    Presently, Israel faces the same threats that were evident during 
the Gulf War. However, it has been widely reported that Iran is 
aggressively developing a medium range ballistic missile that could be 
fielded in the very near time frame. Much of Israel would be within 
range of this emerging longer range threat, and much sooner than 
expected. This threat will tax Israel's planned Arrow deployment in the 
near-term and results in the Israeli request for U.S. funding support 
for an additional Arrow battery.
    A third Arrow battery would recapture the lost battlespace and 
robustness, e.g., overlapping coverage, that would result from the 
introduction the region of a longer range threat.
    The Government of Israel has indicated that about $170 million will 
buy a complete third battery that includes radar, BM/C3, 
launcher control, launchers and interceptors.

                        Iran Missile Production

    Question. There have been a number of reports alleging that the 
Iranian government is engaged in a crash program to field two medium-
range missiles, Shahab-3 and Shahab-4 within the next year or two. The 
missiles could have enough range to hit targets throughout the Middle 
East and a longer range version may eventually be able to target 
Europe. Recent reports have further alleged that the Russians are 
carrying out secret missile technology transfers to Iran to assist them 
in that effort.
    How would PAC-3--our most mature TMD system--in current 
configuration fare against a Shahab-3 or Shahab-4 missile?
    How would a fully configured PAC-3 fare against the same threat?
    What can you tell us about Arrow's capacity to meet Shahab-3 and 
Shahab-4 threat?
    Answer. The lower tier systems, which include PATRIOT, were not 
specifically designed to deal with the medium range ballistic missile 
(MRBM) threat. Analytically, however, we can show some limited PATRIOT 
performance against the Shahab-3, to the degree that the Shahab-3 
program is understood. Using the currently deployed PAC-3, 
configuration 2 with the Guidance Enhanced Missile (GEM) there is a 
very limited capability against the Shahab-3. Using the PAC-3, 
configuration 3, including the PAC-3 interceptor, currently under test, 
there remains a capable system performance against the Shahab-3. 
However, this assumes near-ideal conditions and requires that the 
PATRIOT be cued by an external source, such as other radars planned for 
the Theater Missile Defense Family of Systems. This analysis was drawn 
from a variety of sources--the Services and their Program Executive 
Officers, Joint Theater Air and Missile Defense Organization (JTAMDO), 
Atlantic Command (ACOM), and Central Command (CENTCOM). Very little is 
known about the Shahab-4, therefore, our analytic capabilities are 
limited in assessing performance against this threat.
    Our analysis shows that a fully configured PAC-3 would have better 
performance against the same threat. However, the PAC-3 system was 
designed to defend against threats of shorter ranges. As in the case of 
the current configuration for PATRIOT, analysis of PAC-3 performance 
has shown that this capability can be enhanced through the use of 
external sensors and radars. This requires full integration of, and 
interoperability between, the PAC-3 and other elements of the Family of 
Systems. Therefore, BMDO has recommended increased funding for the 
Joint Composite Tracking Network (JCTN) as a priority. When the upper 
tier systems are deployed (THAAD and Navy Theater Wide), analysis shows 
that these systems will have good capability to defeat the Iranian MRBM 
threat. This is not surprising since this is precisely what they have 
been designed to do.
    Increasing the intensity of the systems engineering and risk 
reduction activities associated with the integration and 
interoperability of the Family of Systems will help ensure that full 
capability will be available in the timeframe that these MRBM threats 
will be deployed. This includes enhancing the capability of the lower 
tier systems that will be fielded first, such as PAC-3, for potential 
use against an Iranian MRBM threat.
    The Arrow Weapon System possesses some capability against the 
Shahab-3. Arrow performance against the Shahab-4 has not been assessed.

    [Clerk's note.--End of questions submitted by Mr. Dicks.]


                           W I T N E S S E S

                              ----------                              
                                                                   Page
Campbell, Lt. Gen. W. H..........................................     1
Douglass, J. W...................................................   121
Kern, Lt. Gen. P. J..............................................     1
Lautenbacher, Vice Adm. C. C., Jr................................   121
Lyles, Lt. Gen. L. L.............................................   355
Muellner, Lt. Gen. G. K..........................................   247
Oscar, Dr. K. J..................................................     1
Oster, Lt. Gen. J. W.............................................   121

                               I N D E X
                              ----------                              
                     AIR FORCE ACQUISITION PROGRAMS
                                                                   Page
Acquisition Reform...............................................   345
Airborne Laser (ABL) Program...................................324, 333
Air Force Mission Support System (AFMSS).........................   343
Aircraft Programs:
    Boeing 757 Aircraft..........................................   328
    Bomber Force.................................................   315
        B-1 Bomber Upgrades....................................317, 331
        B-2 Bomber Upgrades......................................   332
        Weaponization of B-1 and B-2.............................   318
    C-17 Aircraft................................................   341
    CV-22 Aircraft...............................................   350
    F-22 Aircraft..............................................329, 330
    Joint Surveillance Target Attack Radar System (JSTARS) 
      Aircraft...................................................   329
    Joint Strike Fighter (JSF)...................................   338
Evolved Expendable Launch Vehicle (EELV).........................   342
Global Air Traffic Management (GATM).............................   339
Inflation Adjustments, Impact of Outyear.........................   348
Information Technology Management Reform Act.....................   352
Intercontinental Ballistic Missile (ICBM) Modernization..........   344
Introduction.....................................................   247
Jammers, Incorporating...........................................   329
Joint Air-to-Surface Standoff Missile (JASSM)..................319, 346
Large Aircraft Reengine Study..................................327, 347
Mission Planning.................................................   325
Precision Guided Munitions (PGM) Technical Problems..............   344
Predator Unmanned Aerial Vehicle (UAV)...........................   328
Recent ``Hacker'' Attacks......................................324, 340
Selling Key Technologies Abroad..................................   350
Shortfalls in Baseline Programs..................................   348
Software Programmers, Availability of............................   347
Space, Air Force Vision for......................................   320
Space Based Infrared System (SBIRS)--High Component..............   343
Space Launch.....................................................   321
Statement of Lieutenant General George K. Muellner...............   255
Summary Statement of General Muellner............................   247
    Air Force Acquisition........................................   254
    Air Superiority..............................................   248
    Cost Reductions..............................................   254
    General Reduction............................................   248
    Global Attack................................................   250
    Information Superiority......................................   252
    Meeting the Warfighter's Needs...............................   247
    Modernization Account Health.................................   247
    Precision Engagement.........................................   251
    Rapid Global Mobility........................................   252
    Revolution in Business Affairs...............................   253
    Science and Technology.......................................   253
    Space Superiority............................................   249
    Weapons......................................................   251
Supplemental and General Reductions..............................   315
Year 2000 Computer Problem.....................................323, 351

                       ARMY ACQUISITION PROGRAMS

Abrams Tank Upgrade Program.................................49, 88, 117
    Army Ability to Support Two Major Theater Wars (MTW) Strategy   118
Acquisition Reform...............................................   106
Advanced Concept Technology Demonstration (ACTD).................   109
Aerostat Program.................................................    71
Aviation Modernization Plan......................................    78
    Utility Helicopter Modernization Plan........................    79
Ammunition.......................................................44, 97
    Sales of Excess, Obsolete, or Unserviceable Ammunition.......    98
    Storage and Maintenance of Ammunition........................    98
    Unfunded Items...............................................   113
    Wide Area Munition (WAM) Program.............................    97
Black Hawk Helicopter.......................................46, 53, 118
    Multiyear Procurement........................................    80
Brilliant Anti-Armor Submunition (BAT)...........................    86
Chemical Demilitarization........................................   104
    Assembled Chemical Weapons Assessment (ACWA).................   106
Comanche Helicopter..............................................    82
    Hellfire Missiles for........................................    82
Crusader Artillery Program.......................................37, 92
Digitization Program, Army.......................................    34
    Information Security.........................................    70
    Overview.....................................................    60
     System Development..........................................    68
    Vulnerability, Digitization..................................    38
Family of Medium Tactical Vehicles (FMTV).......................96, 111
Funding, Additional..............................................    57
High Powered Microwave...........................................   110
Information Technology Management Reform Act of 1996.............   102
Introduction.....................................................     1
Kinetic Energy Tank Round........................................    76
Kiowa Warrior Helicopter.........................................    82
    Modernization Plan...........................................    81
Light Tactical Wheeled Vehicles..................................    95
Missile Programs:
    Line-of-Sight Anti-Tank (LOSAT) and Follow-on-to-TOW (FOTT) 
      Missiles...................................................    87
    Longbow Hellfire Missile.....................................    87
    Patriot Missile..............................................    84
    Starstreak Missiles..........................................   112
M113 Upgrade Program--Reactive Armor.............................    94
Modernization, Army:
    Account Priorities...........................................    36
    Reserve and National Guard...................................    78
    Shortfalls...................................................    55
    Top Modernization Programs...................................    45
National Defense Panel...........................................41, 58
Research, Development, Test and Evaluation, Army.................   107
Smokeless Nitrocellulose.........................................   111
Statement of Kenneth J. Oscar and Lieutenant General Paul J. 
  Kern, The Joint................................................     5
Summary Statement of General Campbell............................    34
Summary Statement of General Kern................................    33
Summary Statement of Mr. Oscar...................................     2
Tactical Radios..................................................    99
Technology Base Funding..........................................    42
Truck Programs...................................................    46
Truck Safety.....................................................    54
Year 2000 (Y2K) Problem..........................................   101

                 BALLISTIC MISSILE DEFENSE ORGANIZATION

Advanced Technology..............................................   441
Airborne Laser (ABL) Program....................397, 405, 412, 433, 448
Anti-Ballistic Missile (ABM) Treaty............................409, 443
ARROW Missile System......................................436, 448, 453
Boost Phase Intercept............................................   405
Fiscal Year 1999 Budget Request..................................   414
Global Positioning System........................................   412
Introduction.....................................................   355
Iran Missile Act.................................................   444
Iran Missile Production..........................................   454
Medium Extended Air Defense System (MEADS)................410, 437, 452
Missile Treat....................................................   408
National Missile Defense.............................396, 438, 447, 453
    Schedule and Technical Risks.................................   440
Navy Area Program (Lower Tier)...................................   416
    Funding for Modifications to AEGIS Cruisers and Destroyers...   420
    GAO Concerns Regarding Schedule..............................   418
Navy Theater-Wide (Upper Tier)...................................   429
    Definition of Program........................................   431
PATRIOT Advanced Capability-3 (PAC-3).....................400, 421, 451
Remarks of Mr. Dicks.............................................   355
Space Based Laser................................................   442
Statement of Lieutenant General Lester L. Lyles..................   366
Summary Statement of General Lyles...............................   356
    Advanced Technology..........................................   364
    Airborne Laser (ABL) Program.................................   362
    BMDO Priorities..............................................   357
    Fiscal Year 1999 Budget Request..............................   358
    Flight Tests Delays..........................................   360
    Interoperability.............................................   357
    Management Improvements......................................   358
    Medium Extended Air Defense System (MEADS)...................   360
    National Missile Defense.....................................   362
    Navy Area Program (Lower Tier)...............................   359
    Navy Theater-Wide (Upper Tier)...............................   359
    PATRIOT Advanced Capability-3 (PAC-3)........................   358
    Summary......................................................   365
    Theater High Altitude Area Defense (THAAD)...................   359
    Theater Missile Defense......................................   362
Supplemental Missile Defense Funding.............................   406
Theater High Altitude Area Defense (THAAD)...........396, 399, 424, 450
    Substantial Increased Cost...................................   428
    User Operational Evaluation System (UOES)....................   427
White Sands Missile Range........................................   400

               NAVY AND MARINE CORPS ACQUISITION PROGRAMS

300 Ship Navy....................................................   175
Aerostat Program.................................................   228
Aircraft programs:
    CG-47 Upgrades...............................................   200
    CH-60 Helicopter.............................................   229
    Common Support Aircraft (CSA)................................   223
    E-2C Aircraft Multiyear Procurement..........................   201
    F/A-18E/F Aircraft...........................................   175
        Blue Ribbon Panel........................................   170
        Budget...................................................   206
        Performance (Wing-Drop)................................168, 206
    Joint Strike Fighter.......................................197, 207
        Alternate Engine Program.................................   171
    SH-60R Helicopter............................................   230
    V-22 Osprey Aircraft.......................................192, 208
Ammunition Programs............................................189, 208
Amphibious Assault Vehicles (AAV)................................   238
Arsenal Ship Lessons Learned.....................................   200
Chemical Biological Incident Response Force (CBIRF)..............   239
Commandant's Warfighting Laboratory..............................   197
Contingency Deployments..........................................   174
CVN-77 Aircraft Carrier..........................................   211
CVX Aircraft Carrier.................................179, 195, 198, 212
DD-21 Destroyer................................................177, 218
    Teaming......................................................   199
DDG-51 Destroyer:
    SQQ-89 ASW Capability........................................   214
    Susceptibility to Torpedo Attack.............................   213
Defense Features on Commercial Ships.............................   223
Dehumidified Preservation of Aircraft............................   224
Depots, Privatizing..............................................   174
Evolved Sea Sparrow Missile (ESSM) and the Rolling Airframe 
  Missile (RAM)..................................................   225
Ground/Collision Avoidance Systems...............................   193
Helicopter Avionics Commonality..................................   231
Information Technology Management Reform Act (ITMRA).............   245
Infrared Detection of Advanced Anti-Ship Cruise Missiles.........   224
Intercooled Recuperative (ICR) Gas Turbine Engine................   222
Introduction.....................................................   121
Landing Craft Air Cushion (LCAC) Service Life Extension Program 
  (SLEP).........................................................   217
Light Tactical Vehicle Replacement (LTVR) Program................   234
Light Weight 155 mm Howitzer Program.............................   231
Logistics Vehicle System Replacement Program (LVSR)..............   232
LPD-17 Amphibious Transport Dock Ship............................   209
Medium Tactical Vehicle Replacement (MTVR) Program...............   236
Mine Warfare.....................................................   200
Modular Shipbuilding.............................................   189
Multiyear Contracts, Increased Use of............................   202
New Attack Submarine (NSSN)....................................188, 214
Penguin Missile Program..........................................   196
Predator Anti-Tank Missile System................................   237
Ship Displays....................................................   191
Ship Self Defense System.......................................185, 204
Shipbuilding Industrial Base Study.............................178, 198
Shipbuilding Program...........................................176, 198
    Build and Charter............................................   173
Strategic Sealift/Large Medium Speed Roll-On/Roll-Off Ships 
  (LMSR).........................................................   216
SSBN to SSGN Conversion..........................................   197
SSN-21 SEAWOLF Submarine..................................166, 187, 195
    Cost Cap.....................................................   200
    Performance..................................................   203
Statement of John W. Douglass, Vice Admiral Conrad C. 
  Lautenbacher, Jr. and Lieutenant General Jeffrey W. Oster, The 
  Joint..........................................................   123
Summary Statement of Mr. Douglass................................   122
    Aircraft Production..........................................   153
    Budget Overview..............................................   152
    CVN-77 Aircraft Carrier......................................   155
    DD-21 Destroyer..............................................   155
    DDG-51 Destroyer.............................................   155
    F/A-18E/F Aircraft...........................................   153
    Joint Strike Fighter.........................................   154
    LPD-17 Amphibious Transport Dock Ship........................   156
    Marine Corps Programs........................................   156
    Navy and Marine Corps Acquisition............................   152
    Navy Trendlines..............................................   153
    New Attack Submarine.........................................   156
    Shipbuilding Programs........................................   155
    SSN-21 SEAWOLF Submarine.....................................   156
    V-22 Osprey Aircraft.........................................   154
Surface Fire Capacity............................................   200
Tactical Tomahawk Missile.................................187, 201, 227
Towed Decoys.....................................................   171
Trident Conversion...............................................   201
Trident Submarine Backfit......................................184, 221
Unmanned Combat Air Vehicles (UCAVs).............................   167
Year 200 Computer Problem......................................181, 242

                                

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